— fwo"- -■' j pOb»,is«ie«. I ALBANY. -N.Y- Cornell University Law Library The Moak Collection PURCHASED FOR The School of Law of Cornell University And Presented February 14, 1893 IN nenoRY of JUDGE DOUGLASS BOARDMAN FIRST DEAN OF THE SCHOOL By his Wife and Daughter A. M. BOARDMAN and ELLEN D. WILLIAMS Cornell University Library KF 1384.S74 v.1. . n the law of private cor^^^^^ (JornpU Slam ^rlynnl Slibtary Cornell University Library The original of tiiis bool< is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924019347677 ^ G, fr ^-^ A TREATISE ON THE LAW OF PRIVATE CORPORATIONS, DIVIDED WITH EBSPBCT TO RIGHTS PERTAINING TO THE CORPORATE ENTITY AS WELL AS THOSE OF THE CORPORATE INTERESTS OF MEMBERS, REMEDIES FOR THE ENFORCEMENT AND PROTECTION OF THESE RIGHTS AND INTERESTS, AND LEGISLATION AMENDING AND REPEALING CHARTERS, REGULATING RATES AND CONDUCT OF BUSINESS, AND TAX- ING STOCK FRANCHISES, AND OTHER CORPORATE PROPERTY. \ CONTAINING A PULL AND COMPLETE EXPOSITION OF PRINCIPLES BOTH ANCIENT AND RECENTLY DEVELOPED, WITH REFERENCES TO AUTHORITIES IN ENGLAND AND ALL THE STATES DOWN TO DATE OF PUBLICATION. By T. carl spelling, OF THB SAK rKANCISOO BAK. VOL. I. NEW YORK : L. K. STROUSE & CO., Law Publishers. 1892. .VO, Copyright, 1892, by T. C4RL SPELLING. TO HON. STEPHEN M. WHITE OF CALIFORNIA, Who, whether in official or professional life, or as a champion of popular sovereignty, has ever proven himself faithful to every trust, loyal and courageous in advocacy of public justice and in defense of private right, and in all qualities unexcelled as a type of intellectual American manhood, this work is respectfully dedicated by THE AUTHOR. PBEFACE. The author cannot justify this effort on the ground that there is a dearth of text books on the law of private corporations. Morawetz, for Iris clearness and comprehensiveness of style and statement, and Cook, for fullness of elaboration, well deserve special mention. And yet, it is safe to premise that a merito- rious treatise on the subject, in faithful harmony with contempo- rary as well as early expositions by the courts, will find a welcome reception to the library of many lawyers making pretensions to success and efficiency in the profession. The tendency of the day is toward corporate aggregations of capital and effort. The liberal policy of state governments, allowing the formation of corporations under general laws for an almost unlimited number of objects, facilitates and aids this tendency. A large and con- stantly increasing proportion of the business of the country has come to be transacted by these artificial agencies. It is a logi- cal sequence and matter of common observation, that the num- ber of controversies involving this branch of the law and requir- ing settlement by the courts is increasing and will continue to increase. The development of resources has but fairly begun, and the field in which corporations may operate and employ their capital to advantage is virtually unlimited. Moreover, the law of corporations may be said to be in its infancy — at any rate, in its early stages ; so that a presentation of the law as expounded and adjudged a few years ago is inadequate and unsatisfactory to the busy practitioner. Attention is called to the original and logical division of the subject as illustrated in the analytical plan, (pages one and two). It is no unfair criticism of previous divisions to say that they have been awkward and illogical. The actions of members for an accounting by officers, against each other, and against promo- ters ; of creditors against the corporation, against corporate assets in the hands of receivers, and against members for unpaid capital, and upon the statutory personal liability of members and VI PREFACE. officers ; of members and creditors by writ of mandamus ; the remedies of the state by quo warranto, and the ex parte proceed- ings of the corporation upon insolvency and voluntary dissolu- tion, have previously as a rule been treated respectively in dis- jointed and isolated chapters, when they should have been classed as remedies and subdivided according to their relations to the whole subject into remedies internal and external. Amend- ment and repeal of charters, and the exercise of taxing and police powers by the state not being capable of classification either as corporate rights or remedies are treated in three final chapters constituting Part Three. In the present arrangement of the mat- ter exactness of division heading as indicating the contents is sufficiently clear, while the fullness of the indexing is relied upon to supply any deficiencies that may be discovered in that respect. The author has not taken the trouble to count the number of cases cited, nor does he think there is any special merit in a claim of any writer of text books that he has cited more cases than any or all others. He considers that the citation of one or two of the latest decisions in a state wherein former decisions in the same state are cited and reviewed will yield space which can be better devoted to development of principles than to a long string of cases which will necessarily come to the notice of the practitioner upon examination of the latest decisions. This plan of the work has been departed from where conflict of decisions in the same state, or generally, rendered it advisable. Any one choosing to do so, either for the sake of comparison or to gratify curiosity, may count the cases for himself. It is thought that more are cited than in any previous work on this branch of the law, and that few of any importance have been overlooked. No words will be wasted in relating how muct; labor and what degree of patience were involved. These are matters with which courts and lawyers cannot be expected to become inter- ested. The result must tell its own story. Previous experience and researches incident to a somewhat extensive practice, principally in this branch, have been of great assistance in dis- criminating and forming opinions in cases of conflicting author- ity. The same conscientious pains-taking and care have been devoted to the notes as to the text. An incongruous digest of cases might have swelled the size of the work but would have been PKBFACE. VU a positive hindrance to the lawyer or judge who looks in a text book for the gist of the law and a guide to authorities which he examines for himself. Great care has been taken that each authority cited supports the principle announced, though errors may occasionally be found. The indexing is thorough and exact, a matter of considerable importance in all cases. All at- tempts at elaboration of historical and obsolete matters have been avoided, and the greatest utility within the smallest compass has been the ruling motto throughout. Under the circumstances it was deemed best to retain the references to periodical reporters, as these are coming into gen- eral use, side by side with official reports. The words " the author thinks " are not found, nor is the editorial " we " used in the work. The individual opinion of the writer is expressed freely wher- ever the law is unsettled, or the decisions conflicting, but not obtrusively or controversially. It would be unjust, and deprive the author of a great pleasure, not to mention the uniform and undeviating courtesy and many kindnesses on the part of James H. Deering, Librarian of the San Francisco Law Library and the author of a valuable legal treatise, and of his assistants, J. Fred Tyler and David Lloyd Conkling, during a considerable portion of the time occupied in this work. Whatever sacrifices the preparation of the following pages may have involved, they have been made cheerfully to the cause of a science which, though technical and somewhat speculative, yet is broader than any, and touches all sciences and all human affairs. If the result be accepted as a genuine contribution to legal literature the author will be fully compensated aside from any pecuniary returns. So many considerations enter into our conception of a good book that it is nearly as easy to write one as to tell what it should be. This effort is submitted to the pro- fession with the understanding that it will be judged according to its merits and demerits. Reliance is placed no less upon the liberality than the intelligence of those to whom it is offered. To their judgment and charitable consideration it is respectful!}' submitted. Thos. Gael Spelling. San Francisco, Cal., -Jan. 1892. TABLE OF CONTENTS. PART I. EIGHTS. CHAPTER I. THE CORPORATE EXISTENCE. PAGE. 1. Definition , 3 2. Common Law Incidents 4 3. Principles applicable alike to corporations and individuals 6 4. Continuity of existence 7 5. Members necessary 8 6. Two corporations may have membership in common & 7. Individuality and unity of corporate entity & 8. Of the twofold relation 10 9. Corporations and partnerships distinguished 11 10. Name furnishes no test 1- 11. Class to which corporation belongs to be considered 12 12. The range of objects not decisive 1.5^ 13. Private corporations performing public duties -. 15 14. Subdivision common to both 1(J 15. Public corporations sole distinguished from private 17 16. Existence of private corporations beneficial !& CHAPTER II. ESSENTIALS OF ACT OF INCORPORATION. 17. Authority to act as a corporation, how derived and evidenced 21 18. Whether corporation may exist by prescription 22 19. Indirect authorization 24 20. Quasi corporations 24 21. Official boards 25 22. Must have capacity to perpetuate itself 26 23. Joint stock companies 26 24. Agricultural societies 31 25. Irrigation districts 32 26. Reclamation and drainage districts 34 i TABLE OP CONTENTS. PAGE. 27. Private irrigation corporations 35 28. Power of Congress and state legislatures to create corporations. . • 35 29. Constitutional limitations 36 30. Cannot create by amendment of charter 38 31. Delegation of power to incorporate 38 32. Territorial corporations 39 33. States cannot delegate the authority 39 34. Incorporation under general laws 42 35. What the articles should contain 43 36. Reorganization, reincorporation and amendment of articles 44 37. Stricter compliance with general law required, than with provisions of special charter 45 38. Such general law the measure of authority 47 59. Performance of conditions precedent 49 40. No common law conditions 50 41. Conditions precedent and subsequent requirements distinguished.... 50 42. Conditions precedent prescribed on grounds of public policy 51 43. The state alone can object 52 44. Evidence of incorporation 53 45. Of foreign corporations 56 46. Pleading and denying corporate existence 57 47. Issue of corporate existence how raised 59 CHAPTEE III. LEGAL AtTTHOEITY PRESUMED FBOM USER AND RECOGNITION. 48. Corporations de facto 61 49. Distinguished from corporations dejure 61 50. The common law prohibition considered*. 62 .51. De facto existence must be shown 63 52. How the law of agency connects itself with the question 64 53. Powers of de facto corporations 65 54. Ko de facto corporation without legal authority for the class to which it assumes to belong 66 65. Same rule applied to foreign and consolidated de facto corporations. . 66 56. A different rule where illegality or immorality appears in articles 67 57. Estoppel in the case of dealings with a de facto corporation 67 58. Acts of acquiescence must be shown 70 59. Where not estopped 71 CHAPTER IV. POWERS DERIVED FROM CHARTER AND CONSTRUCTION OF SAME — IN GENERAL. 60. Construction of language of charters 78 61. Grant construed as if made to an Individual 76 62. Specified powers 77 63. Incidental powers 79 64. Of corporations performing public duties 81 TABLE OP CONTENTS. xi PAGE. ! 65. No incidental power to become accommodation indorser. 83 66. Or sliareliolder in anotlier corporation 83 67. Tlie incidental power must be necessary 84 68. Grants when permissive and when imperative 85 69. Construction of exemptions and special privileges 85 70. Construction affected by public interest in the grant 86 71. Right to an exclusive monopoly never implied 88 72. Inconsistent and ambiguous provisions in charter 89 73. A distinction based on public policy 89 74. When authority will be presumed 89 75. Less liberal construction than formerly 90 CHAPTER V. IN STATJS FOREIGN TO THAT OF CREATION. 76. Rights and powers fixed by laws of domicile 92 77. Can have but one domicile 94 78. Ko extra-territorial franchises can be conferred by a state 96 79. Comity and the usages of trade 97 80. Cannot exceed authority conferred by charter in another state 99 81. The law of comity will not authorize infringement of local laws 100 82. Comity a part of the law of the land 101 83. The charter alone is consulted for authority in another state 101 84. Corporations not entitled to rights and immunities as citizens 102 85. Property rights are protected 103 86. Foreign corporations may be excluded 104 87. Policy of exclusion need not be expressed 104 88. State may impose conditions 104 89. How contracts are affected by failure to comply with conditions pre- cedent 107 90. Constitutional rights distinguished from rights by comity 109 fll. Corporations chartered in two or more states 109 CHAPTER VI. POWER TO CONSOLIDATE WITH OTHER CORPORATIONS. 92. Definitions and distinctions 112 93. Results involved 113 94. Legislative sanction necessary 113 95. Power in constating instruments 114 96. Any member may prevent 115 97. Rights of shareholders upon consolidation 115 98. Succession of one corporation to property and rights of another 116 99. Consolidation of several companies 116 100. Subsequent sanction effectual 117 101. Equivalent to formation of new company 117 102. Whether consolidating corporations are dissolved 118 103. What rights and franchises pass to consolidated company 120 XU TABLE OF CONTENTS. PAGE. § 104. Effect upon exemption from taxation 122' 1 05. Construction of authority to consolidate 122 106. Effect of consolidation upon municipal agreements to take stock 123 107. Consolidation considered with respect to the rights of third parties . . 121 108. Substitution and novation necessary 125 109. Assumption of liabilities by new company 126 110. Consolidation under general statutes 128 111. Irregular consolidation 12S CHAPTER VII. COMBINATION WITHOUT CONSOLIDATION — LEGAL BBSTRICTIONS. 112. Scarcity of definitions 130' 113. The term does not apply in all cases of combination 131 114. The purpose difficult of ascertainment 132. 115. A "trust," "forestalling," and "cornering," distinguished 134 116. Legal supervision and control 135- 117. Corporations offer facilities for organizing " trusts. " 135 lis. Forms assumed 136 119. "Tying up " stocks 138 120. Pooling arrangements 140 121. When quo warranto proceedings will lie 141 122. The law against perpetuities 142 123. The placing of property in trust usually lawful 143 124. Mutation of beneficiaries allowable 144 125. What constitutes restraint of trade 144 120. General view '. 144 127. Conclusion 145 CHAPTER VIII. POWEIJ TO CONTRACT. 128. The power subject to ordinary rules of construction 148 129. Disabling contracts void 149 130. The public character of franchises 149 131. Applies to corporations formed to supply commodities to the public. . 150 132. Application of the principle to railroad companies 151 133. Statutory authority to lease 152 134. Public charge attaches in hands of lessee 153 135. Lessor company remains liable I53 136. General power to mortgage corporate property I55 137. Of corporations charged with public duties 15g 138. Mortgages ultra vires in part only 15f 139. Rolling stock as a subject of mortgage 157 140. Of rolling stock not yet in possession 158 141 . Important as affecting registration 159 142. Mortgage lien on after acquired property, further considered 159 143. Such provision given effect in equity IgQ TABLE OF CONTENTS. xiii PAGE. § 144. Exception founded upon convenience and necessity 161 145. The lien of the mortgage subject to existing liens 161 146. Prior liens may be lost 164 147. Liens of vendor of real estate for unpaid purchase money not disturbed. 164 148. Conditional sales generally invalid as against subsequent mortgagee.. 165 149. Limitation of this rule 165 l-")0. Agreements amounting to a loan on the property not binding upon mortgagee of after-acquired property 166 151. Construction of authority to mortgage 167 152. When right of eminent domain does not pass 168 153. Discrimination between corporations and individuals 169 154. Cases holding that no legislative permission is required 170 1.55. The tendency of legislation 171 156. What property subject to mortgage 172 157. Gas and other companies not restricted 17,3 158. True test of right to mortgage 173 159. Statutes authorizing mortgages of railroad property 174 160. Forms of corporate mortgages 175 161. What property covered by a railroad mortgage 176 162. Apportionment of earnings while property encumbered 177 163. How far governed by intention of parties 178 164. Repairs and additions and uncalled-for subscriptions must be specially mentioned 179 165. Mortgages of tolls and income 180 166. Not subject to attachment after being set apart 181 167. Contracts based upon immoral consideration 181 168. Corporation cannot purchase shares in itself 183 169. Cases holding a contrary view 185 170. Exception to the rule 18.") 171. Further considered 186 172. Dealings in shares of other corporations 188 173. Receiving stock as collateral security 189 CHAPTER IX. EXEECISE OP POWER THROUGH AGENTS. 174. The general law of agency applicable 191 175. Limitations on authority of agents 192 176. Collective power of members 192 177. Authority of agents derived, solely from powers of corporation 193 178. When authority may be presumed 194 179. To indorse commercial paper 196 180. Matters within exclusive cognizance of agents 198 181. Duty of corporation upon the termination of agent's authority 199 182. Conditional authority of directors 200 183. How scope of authority determined 200 184. The true measure of authority 202 185. Scope of authority of directors 203 186. Where directors are given control 203 XIV TABLE OP CONTENTS. PAGE. § 187. Method and power of appointment of other agents by directors 204 188. The appointment of sub-agents 205- 189. Directors cannot delegate special powers 206 190. Executive and ministerial duties may be delegated 20T 191. Nature of business important 20T 192. Construction of agent's authority 20S 193. Incidental powers and duties of president 209 194. Secretary, treasurer, superintendent, etc 21S 195. Execution of conveyances under seal 21T 196. The place of the agent's transactions immaterial 219 197. Agents cannot serve an interest adverse to that of the corporation . . 219' 198. Ratification a waiver of remedy 221 199. Cannot purchase corporate property 221 CHAPTER X. ACQUISITION, OWNEBSHIP AND DISPOSAL OF PBOPBRTY BY OEDINAEY METHODS. 200. The common law rule 223. 201. Property can be acquired only for legitimate uses of corporations 225. 202. Character of corporation important 225 203. The state alone can object 226 204. Amount of capital stock no measure 22T 205. Statutory limitations upon the power 227 206. Xature and operation of such statutes 229 207. Purchase and sale includes a holding 230' 208. Estate, title and tenure 231 209. When tenancy in common results 232 210. Foreign corporations as land owners 234 211. Capacity to hold as trustee. — Title as cestui que trust 235 212. Must have capacity to execute the trust 236 213. A liberal rule with respect to charitable trusts 237 214. How affected by doctrine of cy pres 288- 215. Execution of charitable uses 241 216. Administration of charities by corporations 242 217. Corporate powers with respect to trusts cannot be enlarged 243 218. Visitorial power over the trust 244 219. Modern view of visitorial power 245 220. Vested in courts of equity 24T 221. English decisions inapplicable 248 222 Donor may make rules and conditions 249 228. The rules against perpetuities not applicable to charitable bequests. 250 224. How far the directions of the donor of funds for charitable uses are binding on the corporation 232 225. Effect of conditions 252 226. Grants and devises to religious corporations 252 227. Whether held by society in trust or absolutely 254 228. Effect of becoming incorporated 235 229. Sale of property of religious corporations 236 230. Liens in favor of corporations upon property in their possession 257 TABLE OF CONTENTS. XV PAGE. 231. Lien not lost by warehousing the goods 258 232. Lien of banks on commercial paper 258 233. Lien of banks on deposit 260 CHAPTER XI. ACQUISITION AND TENUBE TJNDEK EXEBCISB OF POWEB OF EMINENT DOMAIN. 234. Exercise of the power by private corporations 2ti:> 235. A franchise may be taken 26.3 236. Corporate interest of members not exempt 264 237. Various instances of its exercise 265 238. Its exercise of vital Importance 266 239. Legislature may select the agency and determine the purpose 267 240. Authority need not be special 207 241. Exercise of the power by foreign corporations 269 242. The power must be exercised impartially 269 243. How held by the appropriator 270 244. The authority strictly construed 270 245. The legislature cannot bind the state not to exercise it in the future. 272 246. Only to be exercised for the purposes mentioned and subject to the conditions imposed in the Constitution 273 247. The compensation to be judicially ascertained 274 248. The tribunal 27.5 249. Treaty with owner 277 250. The public use 278 251. Same — how determined 279 2.52. Consideration of the question of public use with reference to par- ticular corporations 282 253. When the public purpose and necessity must be plain 283 254. Due process of law 285 255. Prescribed methods must be strictly pursued 286 256. When and what compensation to be made 288 257. Same— with reference to time of payment 291 258. Competency of evidence of damage 292 259. Special value 295 260. Various methods of determining compensation 296 261. General principles 298 262. Damages independent of value of lands taken 299 263. Community benefits not considered ,301 264. Not entitled to damages for independent trespasses 302 265. The right strictly legal 302 266. Conclusiveness of award , 303 267. Use of streets by railroads 304 268. Elevated street railways 304 269. Street railways operated by horse power 305 270. Bailroads on common highways 305 271. State not entitled to compensation 306 272. Compensation of corporation ,S06 273. Reversion of the fee in land upon cessation of use 307 XVI TABLE OF CONTENTS. CHAPTEK XII. OBGANIZATION BY CHABTEK MEMBERS. PAGE. § 274. Preliminary membership 308 275. Defective execution of articles 309 276. Proceedings after filing articles 310 277. No notice of preliminary Organization required 310 ,278. Notice of subsequent meetings 311 CHAPTER XIII. SUBSCRIPTIONS TO CAPITAL STOCK. 279. Subscriptions distinguished from other membership contracts 314 280. Capital stock corporations 314 281. Stock— Capital— Capital stock 315 282. What constitutes membership 316 283. Laws entering into each contract of membership 316 284. Acceptance of amendment to charter a new contract 317 285. Who may become a stockholder 318 286. Municipalities 319 287. Can only become stockholders for public purposes 320 288. Validity and enforceability 320 289. Submission to popular vote — Petition, etc 321 290. Presumptions — Bona fide purchasers ,323 291. Registration 324 292. Who to make the subscription for municipality 324 293. Infants — Married women — Partners 324 294. Liability assumed in contract of membership 326 295. A different rule in New England States 327 296. When the contract is complete 328 297. Acceptance by the corporation 328 298. Must have legal validity at time of acceptance 329 299. Agreements to subscribe 329 .300. Mutual agreements before incorporation 330 301. Measure of liability wanting 332 302. Difficult of enforcement where no agent is designated 332 303. But a designated agent may sue 332 304. Subscriptions taken by promoters 333 305. The corporation has no common law remedy .334 306. Agreements to contribute capital and form a corporation 334 307. Contracts to purchase shares 335 308. Agreements made with the corporation 335 309. Contract of membership defined 33g 310. Must contain essential parts of a contract 337 311. Where law requires stock books to be kept 333 312. Issuance of certificate not essential 339 313. Nor form of contract important 34O 314. Neither party can withdraw 34]^ 315. Membership in benevolent, etc., societies 341 TABLE OF CONTENTS. XVU PAGE. ( 316. Collateral parol agreement not binding 341 317. General rules governing contracts -Ua 318. Informalities may be waived :!42 319. Subscription in escrow 344 320. Conditional subscriptions 34.5 321. Conditions in municipal subscriptions 346 322. Power of corporate officers to insert conditions 346 323. When taken by commissioners 347 324. Conditions implied in subscriptions beforein corporation 347 325. The fixed amount of capital must have been subscribed in good faith . 348 326. Requirement founded on justice and public policy 350 327. Proof of compliance herein 350 328. Cases In which the objection does not lie .351 329. When the implied becomes an express condition 35v! 330. What subscriptions to be counted 353 331. Express conditions in preliminary subscriptions 354 332. Conditions and stipulations distinguished 354 333. What conditions may be inserted 355 334. Undertakings to locate railroads, etc 357 335. Construction of conditional subscription 359 336. Performance and avoidance of conditions 359 337. Colorable subscriptions binding 361 338. Fictitious subscriptions 362 339. When subscriptions become payable 363 340. Statutory modifications of the common law 363 341. The rule in Oregon . 364 342. Construction of special provisions 365 343. Extent of liability to pay assessment 366 344. Time and mode of payment 368 345. In what subscriptions to be paid 368 346. Stockholders as plaintiff against corporation 370 CHAPTER XIV. CONTRACTS OP MEMBEKSHIP IN OTHER THAN CAPITAL STOCK CORPORATIONS. 347. General features of contract 372 348. Membership in voluntary associations 373 349. Effect of becoming incorporated 374 350. Business features in all societies 375 351. Scope of the subject 375 352. Mutual benefit contracts 375 353. Contract where found 377 354. Limitation as to beneficiaries 379 355. Designation how made 382 356. Nature of member's interest 384 357. Requisites of valid designation 385 358. Failure to designate 386 359. Change of beneficiary 388 360. Change must be made in pursuance of by-laws 390 Xviii TABLE OF CONTENTS. PAGE. § 361. Change cannot be defeated by default of association 392 362. Obligations assumed in contract 394 363. Personal distinguished from other duties 394 364. Assessments 394r 365. Fees and dues 39(> 366. Liability of members of voluntary associations 39T 367. Voluntary withdrawal 399 368. Effect of withdrawal 399- 369. Membership in boards of trade, clubs, etc 40O CHAPTER XV. CONTKOL THROirGH CORPOEATK MEETINGS. 370. Objects and powers of corporate meetings 401 371. Control of the majority 402 372. Majority control implied in contract of membership 403 373. Power of majority to dissolve 404 374. What constitutes majority 405. 375. A different rule applies to directors' meetings 40& 376. Voting rights of the members 407 377. Interest no disqualification for voting 407 378 Stock books as evidence of the right 410 379. Meaning of legal owner 411 380. Stock held in trust 412 381. Collusive transfers 41S 382. Shares owned by corporation cannot be voted 414 383. Of the place of meeting 415 .384. Of the mannerof voting 417 385. Calling meeting to order 41& 386. Statutory regulations 420 387. Voting by proxy 420 388. Notice of meeting 421 389. Time of notice 422 390. Manner of giving notice 423 391. Waiver of notice 424 392. Meetings must be called by proper authority 425. 393. Election of officers 427 394. Mode of electing 429 395. Regularity of proceedings presumed 429. CHAPTER XVI. CONTROL BY MEANS OF BY-LAWS. 396. Definition and object 43I 397. How made and enforced 432. 398. Usually the province of members 433 399. Statutory provisions 434 400. Limitations upon the power to enact by-laws 435 TABLE OF CONTENTS. xix PAGE. 401. Retroactive by-laws invalid 436 402. By-laws cannot prejudice rights of third parties 436 403. Invalid provisions 437 404. Must be reasonable and necessary 437 405. Power given by lawto enforce conditions 439 406. Must not be in restraint of trade 439 407. Must not be in restraint of personal liability 440 408. By-laws imposing forfeiture invalid 441 409. By-laws providing for forfeiture under authority conferred by charter or statute 442 410. Power to regulate does not authorize prohibition 443 411. Kegulations not formally adopted 444 412. To what extent binding on third parties 444 413. Validity a question of law 446 414. Proof of by-laws 446 CHAPTER XVII. POWERS AND DUTIES Or DIRECTOKS. 415. Variously designated 448 416. Qualifications 449 417. Directors de facto 450 418. Acceptance of ofBce 450 419. Term of office 451 420. Express powers 451 421. Statutory prohibitions and limitations 452 422. By-laws made by 452 423. Implied powers 453 424. How powers may be exercised 455 425. Place of meeting immaterial 456 426. Stockholders cannot interfere 457 427. Have no power to dissolve the corporation 458 428. Their double relation 458 429. Fiduciary relation 459 430. Strict accountability for ultra vires expenditures 460 431. Unwarranted payment of dividends , . . . 461 432. Diligence required 462 433. Cannot serve their own interest at expense of the corporation 464 434. Termination of fiduciary relation 468 435. Duty upon dissolution 468 436. Compensation 470 437. President may be compensated 472 CHAPTER XVIII. PARTICIPATION IN PROFITS — DIVIDENDS. 438. The main object 474 439. Dividends defined 4*74 440. Meaning of " profits," " net profits,'* " net earnings," " surplus," etc. 476 XX TABLE OF CONTENTS. PA&B. § 441. Duty of directors with respect to dividends 478 442. Wlien a court of equity will order a dividend paid 479 443. Capital stock cannot be impaired 481 444. Tlie nature of tlie investment important 481 445. Discretionary power of directors to provide for future maturing lia- bilities 482 446. Wlien dividend becomes property of shareholder 483 447. Delay in making demand 483 448. Converting surplus into working capital 484 449. Profits must be distributed impartially 486 450. Preference may be given by statute, articles or by-laws 488 451. Where there is a subsequent acquiescence to a preference given to a part 488 452. Payment of dividends in scrip. . : 489 453. Distinction between new allotment and scrip dividend 490 454. Usually payable in cash 492 455. Guaranteed dividends 493 4.56. Conditioned upon the earning of profits 493 457. Eight to dividends as between life tenant and remainderman 494 458. How far intention of testator controls 496 459. The New Jersey rule 497 CHAPTEE XIX. TBANSFER OF MEMBERSHIPS. 460. At common law 499 461. Statutory provisions 500 462. Memberships in benevolent, etc., associations 501 463. Stock book not conclusive 502 464. Statutory definitions ,503 465. Transfer complete upon assignment and notice to company's agent. . 504 466. Transfer of insolvent invalid 506 467. Eight of a transferee to sue and share in results of suit 506 468. Knowledge of wrongs no bar to transferee 507 469. Insolvency and dissolution terminate the right to transfer 508 470. Compliance with regulations and formalities 509 471. Transfers in pledge 510 472. Blank assignments 512 473. Identity and proof of genuineness of signature 513 474. When transfer complete 514 475. Waiver by corporation 515 476. Duties of parties to transfer 516 477. Where the corporation claims a lien upon the shares 516 478. The weight of authority favors the right 518 479. No common law lien 519 480. By-law regulations under statutory authority 520 481. Construction of statutes authorizing the retention of lien on shares. . 521 482. Inconsistency of authority with general law not regarded 523 483. Such by-laws confined in their operation to the immediate parties. . . 523 TABLE OF CONTENTS. Xxi PAGE. § 484. What constitul.es notice to transferee of lien of corporation 524 48.5. Waiver of the lien on stock 525 486. An equitable lien may be acquired 526 487. Transferee not prejudiced by default of agents of the^corporation 527 488. Transfers of shares in national banks 527 489. Whether an unregistered transferee holds the legal or an equitable title 528 490. The question complicated Ijy conflicting decisions 528 491. Wager sales 529 492. Same, further considered 530 493. Executory contracts to sell are valid 532 494. Precautions to be observed with respect to transfers by executors, guardians, etc 533 495. Transfers to guardians, executors, trustees, etc 537 496. Married women, infants, etc., as purchasers of stock 538 497. Legality and genuineness warranted by corporation 539 498. Rights between the immediate parties to a transfer 540 499. Measure of damages between vendor and vendee of stock 545 500. Eemedies for breach of contracts for future delivery 546 501. Certificate carries notice of nature of title 547 502. Where the transfer is conditional 550 503. Where pledgee is given power of sale 553 504. Other remedies of pledgee 553 505. With respect to liens of the corporation 554 506. When does statutory Mability shift 555 507. Prior trusts 556 508. When liability for calls becomes shifted 558 509. Consideration of transfers with reference to the rights of third par- ties 559 510. Eights between vendee and vendor's creditors 561 511. Transfer by sale under attachment and execution 564 512. The situs of stock 565 513. The property character of shares 566 514. In what respects negotiable 568 515. Conflicting usage not binding 570 516. Transfer of stolen stock to buna fide purchasers 570 517. Testamentary transfers 571 518. Construction of devises of stock 572 519. Gifts of stock 573 520. Donations causa mortis 574 521. Lost or stolen certificates 575 522. Forged assignments 576 CHAPTER XX. EXPULSION, FORFEITUBE, SUSPENSION AND EEINSTATEMENT. 523. The right of expulsion does not generally exist in capital stock cor- porations 578 524. A motion and disfranchisement , 579 525. An essential right of incorporated and voluntary associations 580 XXU TABLE OP CONTENTS. FAQE. § 526. Where property rights are Involved 582 527. Power, where found and by whom exercised 582 528. The proceedings — Charge — Notice 584 529. Conduct of the trial 588 530. Equitable jurisdiction in cases of simple expulsion 589 531. Same where property interests are affected 591 532. Remedies inside association must be exhausted 593 533. Presumptions in favor of regularity 594 584. Forfeiture and suspension of contract by its terms 595 535. By-laws imposing forfeiture require statutory sanction 597 536. Reinstatement 598 TABLE OF CASES. PAGE. A. Backus v. Ry. Co 117, 121 Abbey v. Chase 817 Abbey v. Dry G. Co 918 Abbott V. American Hard Rubber Co 421 Abbott v.Aspin wall.... 72,1027, 1028 Abbott V. Baltimore, etc.. Steam PacketCo 848,849, 992 Abbott V. Dodge 34 Abbott V. Hard Rubber Co 452 Abbott V. Hapgood 745 Abbott V. Johnstown R. R. Co.. 174 Abbott V. New York & N. E. R. Co 269 Abbott V. Omaha Smelting Co. 44, 932, 934 Abe Lincoln Mut. L. & Ace. Assn. V. Miller 776 Abels V. Mobile Real Estate Co. 563, 564 Abendroth v. New Tork L. R. Co 294 Abercrombie v. Riddle 495 Aberdeen Ry. Co. v. Blackie. 221, 466 Academy bf Music's Appeal 514 Accidental, etc., Assn. v. Sulli- van 656 Ackerman v. Emott 537 Ackerman v. Huff 291 Adair's Appeal 1262 Adair v. Brimmer 537 Adams v. B. H. & E. R. R. Co. . . 1197 Adams v. Chicago B. & W. S. Co. 290 Adams v. Crosswood Pr. Co.. 212, 1114 Adams v. Goodrich 1032 Adams v. Hannibal, etc., R. R. Co 841 Adams v.Kehlor Mining Co. 1138, 1167 Adams v. Lamson Consolidated Store-service Co 57 Adams v. Railroad Co 299 Adams v. Rivers 307 Adams v. Wicasset Bank 25, 32 Adams Ex. Co. v. Denver, etc., Ry. Co 602 Adams Express Co. v. Harris .... 58 Adams Mining Co. v. Senter 221 Addison's Case 907 Addison v. Lewis 959 Addison v. N. E. Co. Trav. Assn. 382 Adderly V. Storm 308,511, 907 PAGE. Adler v. Milwaukee Pat. B. Mfg., 874, 875, 913, 918, 947, 948, 1147 Adrienne v. Roone 444, 197 .^tna Ins. Co., Re 890 ^tna Ins. Co v. Harvey 108 .^tna Nat Bank v. Charter Oak L. Ins. Co 83 Adriance v. Rome 702 African, etc., Ch. v. Conover.. 31, 255 African Soc. v. Varick 5 Aeawam Nat. Bank v. South Had- ley 217 Agnew v. A. O. U. W 395, 396 Agriculture, etc., Assn. v. Ala- bama Gold Life Ins. Co 506 Agricultural Bank v. Burr •. 428 Agricultural Bank v. Wilson, 428, 884 Agr. Br. R. R. Co. v. Winchester. 1206 Agricultural C. Ins. Co. v. Fitz- gerald 642 Agricultural & Stock Assn. v. Mill '.. 1205 Ailling V. Wenzell 882 Albany City Bank v. Maher 1261 Alabama & Fla. R. R. Co. v. Row- ley 632,734, 737 Alabama G. S. R. Co. v. S. & N. A. R. Co 831 Alabama v. Montague 177 Ala., etc., R. R. Co. v. Kidd 16 Albright v. Lafayette Assn 78 Albion Steel, etc., Co. v. Martin 712 739 Albion R. R. Co. v. Hesser '. 294 Albert v. Sav. Bank of Baltimore 535, 558 Albert v. Mayor 536 Albert v. Order of Chosen Friends, 761, 764 Albery v. Sav. Bank 535 Albrecht v. Inglis 1231 Alderman, etc., v. Finley 55, 60 Aldred v. North, etc., Ry. . . . 739, 744 Aldvich v. Drury 307 Alexander v. Cauldwell. 77, 849, 197, 862 Alexander v. Relf e 802, 965 Alexander v. Searcy 507, 688 Alexander v. Simpson 422 Alexander v. ToUeston Club 69 Alexandra Palace Co., In re 462 XXIV TABLE OF CASES. PAGE. Alexandria & F. Ry. Co. v. Gra- ham 177 Alfordy v. Wilson 546 All Saints Church v. Lorett. .. 22 Alleghany City v. MeClurkan .... 862 Alleghany Co. v. MeKeesport Diamond Market 15 Alleghany Co. Workhouse v. Moore 840 Alleghany Val. R. Co. v. Pitts- burgh June. R. Co 285 AUemong v. Simmons 455, 1027 Allen V. City Steam Nav. Co 199 Allen V. Clark 1047 Allen V. Fairbanks 682, 1016 Allen V. First Nat. Bank 197 Allen V.Hill 413, 428 Allen V. Sewall 1028 Allen V. South Boston R. Co., 652, 828, 836, 858 Allen V. Inhabitants of Jay. . 320, 1245 Allen V. Jones 285 Allen V. Louisiana 319 Allenv. Mer. B'k 820 Allen V. Montgomery R. R. Co., 548, 655 892, 908 Allen V. Morse 1281 Allen V. Texas, etc., Ry. Co 602 AUertpn v. Lang 575 Ailing V. Ward 895, 1153 Allird's Case 509 AUis V. Jones 817, 820, 850 Allison V. Coal Co 1039 Allman v. Havana R. &E. R. Co., 350, 364 Almy V. Cal 1268 Alta S. M. Co. V. Alta P. M. Co., 196, 203, 848 Althart v. Wolfe 1065 Altman v. Benz 400 Alven V. Bond 963 Amador Queen Min. Co. v. De- witt 281 Ambergate, etc., Ry. Co. v. Mit- chell 626, 629 Ambergate, etc., Ry. Co. v. Nor- cliffe 629 Ambrose V. Evens 552, 567 A mbrose Lake, etc. , Min. Co. , Re. , 693 America v. McNiel 542 American Bank v. Baker 370 American Bap. Home, etc., Soc. v. Foote 58, 59 American Bridge Oo. v. Heldel- bach 181 American Coal Co. v. Alleghany County 1250, 1252, 1276 American Central Railroad Co. v. Miles 472 American Exp. Co. v. Haine 820 American Colonization Soc. v. Gartrell 94 American Ins. Co. v. Oakley 213 PAGE. American Ins. Co. v. Owen 93 American L. & I. Co. v. E. & W. R. Co 108, 109, 175, 944, 595 American, etc., Co. v. Norris 402 American, etc., Tel. Co. v. Conn. Teleph. Co 1231 American Legion of Honor v. Perry 380,381,385,387, 393 American Mut. Aid Soc. v. Hel- burn 780 American Mut. Aid Soc. v. Kil- bum 597 American Mortg. Co. of Scotland v. Tennville 226 American Order of Scottish Clans v. Merrill. 6 American Preservers' Trust Co. V. Taylor Mfg. Co 134 Am. Refrig. & Constr. Co. v. Linn 8 American Ry. Frog Co. v. Haven, 188, 729- American Salt Co. v. Heiden- heimer . . 934 American Tel. & Tel. Co. v. Pearce 284,285, 290 American Tel. & Tel. Co. V. Smith 284, 285, 286, 290 American Tube & Iron Co.'s Ap- peal American Un. Tel. Co. v. West- ern Un. Tel. Co 1243 Ames V. Conant 417 Ames V. Lake Superior, etc., R. R. Co 275 Amesbury v. Bowditch Mut. Fire Ins. Co 4.37 Amey v. Mayor 320 Amherst Academy v. Cowls 148 Amoskeag Kat. Bank v. Town of Ottawa 321 Amsden v. Xorwich Union Fire Ins. Soc 604 Anacosta Tribe v. Murbach 593 Ancient Club v. Miller 78 Anderson v. Anderson 963 Anderson v. Ft. Worth Baseball Ass'n 616 Anderson v. Kerns Drainage Co.. 55 Anderson v. Klssman 214 Anderson v. Newcastle & R. R. Co. 642 Anderson v. Nichols 575 Anderson v. Phila. Warehouse Co. 550 Anderson v. Traders' Ins. Co 004 Anderson V. Turbeville 281, 287 Anderson v. Van Allen. 535 Anderson's Case 333, 903 Andrews v. Bacon 1019, 1031 Andrews v. Mich. Cent. R. R. Co. 604 Andrews v. Murray 1015 Andrews v. Ohio & Miss. R. R. Co 627 Andrews v. Pratt 464 466 Angelv. Hume '. 321 TABLE OP CASES. XXV PAGE. Angier v. E. Tenn. V. & G. R. Co. 606 Anglo-Cal. Bank v. Granger's Bk. 517, 519, 522, 524, 526, 528 Anglo-Danubian, etc., Co., Ke.... 860 Antonio v. Greenboro 1178 Anthony v. H. H. S. M. Co... 203, 263, 296 Anthony v. Jasper Co 324 Annan, Inre 1228 Ansonia Brass & Copper Co. v. New Lamp Chimney Co. 917, 1017 Anvil Min. Co. v. Slierman, 3(;3, 364, 626 Apperly v. Page 938 Apperson's Ex'rs v. Exchange Bank 822 Appellate Tax Court v. Kice 1284 Appleton Mut. Fire Ins. Co. v. Jesser 71, 925 Arapahoe, C. & L. Co. v. Stevens. 800 Archer v. People's Sav. Bank . . . 454 Arenzv. Weir 965, 1021 Argenti v. City & County of San Francisco 862, 866 Argus Printing Co., Inre 413, 428, 449, 5.52 Argyle C. & C. Co., Re 829 Arkansas Riv. L. T. & Co. v. F. L. &T. Co 685 Arkansas Val. Agr. Soc. v. Eich- oltz 466 Arkedelphia Cotton Mills v. Trim- ble 343 Arkwrightv.Newhold.. 723,728, 737 Armine v. Spencer 26 Armington v. Barney 265 Armiston, etc., R. Co. v. Jackson- ville, etc., R. Co 266, 284 Armontv. New Orleans, etc., R. Co 484 Arms V. Conant 456 Armstrong v. Chemical Nat. B'k., 1138, 1139 Armstrong v. Church 706 Armstrong v. Harshner 641 Armstrong v. In re 1139 Armstrong v.. Sec. Nat. B'k. . .52, 96 Armstrong v. Scott 1139 Arnison v. Smith. 644, 720 Arnold v. Decatur 286 Arnold v. Hudson River R. R. Co. 304 Arnold v. Johnson 557 Arnold v. Lyman 127 Arnold v. Ruggles 539 Arnold v. Suffolk 518, 522 Amot V. Pittson, etc.. Coal Co. . . 140 Amot V. Sage 1031 Arrington v. Van Houten 1008 Arthurs v. Baird 380 Arthur v. Commercial B'k 1092 Arthur v. Clark 878 Arthur v. Griswold 1053, 105.5 Arthur v. Midland R. Co 506 PAGE. Arthvir v. Odd Fellows' Ben. As'n, 383, 384, 385, 386 Arthur v. Willius 1136 Ash v. Guie 934 Ashby's Case 648 Ashbury, etc., R. R. Co. v. Riche. 846 Ashbury v. Walton 676 Ashbury v. Wilson 675, 859 Asher v. Louisville & N. R. Co... 291 Ashley v. Kinnan 466 Ashpitel V. Lacombe 938 Ashtabula, etc., R. R. Co. v. Smith. . 340, 345, 354, 358, 429, 445, 636 Ashton V. Ashton 572 Ashton V. Atlantic Bank 536 Ashton V. Bashaway Assn 690 Ashton V. Burbank 1207 Ashton V. Dakin 532 Ashuelot Boat Co. v. Holt. . 331, 3:!2 Ashuelot Mfg. Co. v. Marsh 210 Ashuelot R. R. Co. v. Elliot 1214 Ashiu'st's Appeal 716 Ashurst v. Field 490 Ashurst V. Field's Adrar 495 Ashurst V. Given 240 Aspinwallv. County of Davidson. 1100 Aspinwall v. Ohio ifc Miss. R. R. Co 95, 99, 117, 4](V Aspinwall v. Sacchi 895, 925 Aspinwall v. Torrane 1 134 Aston, Ex parte 28 Astor V. Ry. Co 58 Astoria & ,s. R. R. Co. v. Hill, 339, 365, 633 Atchafalaya B'k v. Dawson 1119 Atchinson's Appeal 467 Atchison v. Davidson 969 Atchison v. Milton 1101 Atchison A. T. & S. F. R. Co. v. Cochran 899 Atchison, etc., R. R. Co. v. Commrs 4!)4 Atchison,- etc., R. R. Co. v. Fletcher 189, 1206 Atchison, etc., R. Co. v. Nave .304 Atchison, etc., R. R. Co. v. Phillips Co 124, 346 Atchison, T. & F. R. Co. v. Fletcher 9:; Atchison T. & H. F. R. Co. v. Schneider 30O Athenaeum, etc., Soc. In re 1021 Athol Music Hall Co. v. Carey. . . 332 Atkins V. Gamble 552 Atkins V. Petersburg R. Co 9S8 Atkins V. Wabash, St. L. & P. Ry. Co 940, 995 Atkinson v. Atkinson 535, 537 Atkinson v. Foster 787 Atkinson v. Marietta,etc. R. R. Co. 37 Atkinson v. Rochester Printing Co 114L XXVI TABLE OF CASES. PAGE. Atlanta v. Gate, etc., Co 1153 Atlanta, etc., E. R. Co. v. Ga. 119, 1157 Atlanta, etc., Ey. Co. v. HodDett. 1056 Atlantic B'k v. Savery 836 Atlantic Cotton Mills v. Abbott. . 344 Atlantic Cotton Mills v. Indian Orchard Mills 836 Atlantic, etc., Ins. Co. v. Moody. 395 Atlantic, etc., E. Co. v. St. Louis, 271, 304 Atlantic Fire Ins. Co. v. Sanders, 312, 446 Atlantic Mut. Fire Ins Co. v. Young 824 Atlantic State B'k v. Savery 8;i6 Atlantic & G. E. Co. v. Ga 1283 Atlantic & Ohio Tel Co. v. Com. 486 Atlanta & E. A. L. R. Co. v. State 1282 Atlas Nat. Bank v. Gardner 199 Atleev. Fink 460 Atty-Gen. v. Bank of Charlotte. . 1272 Atty-Gen. v. Bank of Newbum . . 74 Atty-Gen. v. Barstow 1117 Atty-Gen. v. Bay State Mining Co. 1249 Atty-Gen. v. Bayer 240 Atty-Gen. v. Boultbee 240 Atty-Gen. v. Brazen, etc. , College. 9 Atty-Gen. v. Clare Hall 251 Atty-Gen. v. Clarendon 1096 Atty-Gen. V. Clergy Society 1158 Atty-Gen. v. Cockermouth Local Board 1167 Atty-Gen. v. Consumers Gas Co. 1084 Atty-Gen. v. Downing 240 Atty-Gen. v. Foote 1119 Atty-Gen. V. Gaunt 245 Atty-Gen. v. Great Eastern Ry. Co 1167 Atty-Gen. v. Great Northern Ey. Co 1167 Atty-Gen. v. Green 240 Atty-Gen. v. Guar. Mut. Ins. Life Co 797, 977, 1141, 1142 Atty-Gen. v. Hopkins 1153 Atty-Gren, v. Hudson River E. E. Co 1167 Atty-Gen. v. In re 1129 Atty-Gen. v. Lady Downing. 1164 Atty-Gen. v. Leaf 1110 Atty-Gen. v. Leeds Corp 1167 Atty-Gen. v. Leicester 1167 Atty-Gen. v. Life Ins. Co 976 Atty-Gen. v. Mayor of Southamp- ton 1167 Atty-Gen. v. Mer. Ins. Co .30 Atty-Gen. v. Metropolitan E. Co. .305 Atty-Gen. v. Mich. State Bank... 1118 Atty-Gen. v. Mid-Kent Ey. Co. . . 1167 Atty-Gen. v. Moore 248 Atty-Gen. v. N. A. L. Ins. Co. 38, 986 Atty-Gen. v. North Amer. Ins. Co 1193 Atty-Gen. v. Oglander 240 PAGE. Atty-Gen. v. Old South Church. . 252 Atty-Gen. v. Pearson 254 Atty-Gen. v. Perkins.... 45, 810, 1118 Atto-Gen. v. Petersburg, etc., E. E. Co 1116, 1119 Atty-Gen. v. R. R. Companies, 1166, 1167, 1202 Atty-Gen. v. Stanford 247 Atty-Gen. v. State Bank 491 Atty-Gen. v. The Cohoes Co 1167 Atty-Gen. v. Toronto Street Ey. Co 1167 Atty-Gen. v. Tudor Ice Co 1167 Atty-Gen. v. Utica Ins. Co. . 249, 1075, 1097 Atty-Gen. v. Wallace 248, 250 Atty-Gen. v. Wansay 240 Atty-Gen. v. West Hartlepool, etc. Commrs 1167 Attrill V. Huntington 1038 Atwood V. R. I. Agr. Bank 867 Atwood V. Shenandoah Val. R. Co 168 Attaway v. Third Nat. Bank 460 Auburn L. T. etc., Min. Co. re. . 898 Augerhoefer v. Bradstreet Co. . . . 94 Augusta Bank v. Augusta 1273 Augusta B'k v. Earle '77 Augusta B'k v. Hamblet 218, 454 Augusta & K. E. Co. v. Kilian. . . 155 Augusta, etc., E. v. Eandall 1220 Aull V. Calkett 575 Aultman's Appeal 506 Aultman v. Waddle 69, 925 Austin V. Berlin 1037 Austin V. Boston 1267 Austin V. Murray 43'7 Austin V. Searing. . 752, 590 584, 591 Automatic, etc., Co. v. N. A. Phon. Co 69 Auburn & Bate Plank E. Co. v. Douglas 87 Auburn & Cato Plank R. Co. v. Douglas 83 Avegne v. Citizens' Bank 349 Avelyn v. Ward 573 Averille v. Barber 459, 690 Ayer v. Seymour 664 Ayers v. Seibel 94. Aylesbury Ry. v. Thompson.. . . " 5.5S Ayrault v. Pac. Bk 820 Ayre'sCase 646, 90 Ayer v. Seymour 688 Aylesbury Ry. Co. v . Mount. . . . .' 558 A. & A. R. R. Co. V. Ezell 52 B Babbv. Reed 501 Babcock v. Schuylkill &"l. V ^y- ^° "607", 900 TABLE OF CASES. XX VU PAGE. Babcock v. N. J. Stockyard Co. . 79 Babcock V. Western K. Corp 303 Bachman, In re 521, 909 Bachman v. N. T. Arbeiter, etc. . 594 Backdahl v. Grand Lodge Ancient Order of United Workmen 785 Backus V. Lebanon 264, 266 Bacon v. Cohen 1165 Bacon v. Irwin 710 Bacon v. Mississippi Ins. Co 212 Bacon v. Robertson 1162, 1163 Badger v. Bank of Cumberland . . 205 Badt V. Benedict 1159 Baeder v. Jennings 26, 1191 Bagley v. Grand Lodge Ancient Order United Workmen... 766, 782 Bagnall v. Carlton 712, 738, 745 Bagshaw v. Eastern Un. Ky. Co., 156, 708, 713 Bagshaw, ex parte, L. R 114 Baile V. Calvert College Ed. Soc. 346 Bailey's Appeal 618, 706 Bailey v. Birkenhead, etc., R. R. Co 81, 669, 706 Bailey V. ChamplainM. & P. Co., 885, 668 Bailey v. Citizens Gaslight Co. . . . 489 Bailey v. Clarke 315 Bailey v. Ford 1168 Bailey v. Hannibal, etc., R. R. Co 480, 494, 676, 1211 Bailey v. HoUister 1266 Bailey v. McAuley 399 Bailey v. M. & D. C. & M. Co. . . 1153 Bailey v. Mut. Ben.. Assn. . . 754, 706 Bailey v. New York Central & H. R. R.Co 496 Bailey V. N. Y. R. Co 58 Bailey v. Philadelphia, etc., R. R. Co 1178 Bailey v. Pittsburg Coal Co 1135 Bailey v. Platte Denver Canal & Milling Co 1197 Bailey v. Power Street, etc., Church 698 Bailey v. R. R. Co 315,. 490 Bailey v. Schlog 919 Bailey v. Shroyer 545 Bailey v. Strohecker 56.5, 735 Bailey v. The Mayor, etc. , of N. Y. 848 Baines v. Babcock 916 Bain v. Richmond & D. R. Co. . 1269 Baird v. Bank of Washington .... 230 Baker V. Administrator of Backus 947 Baker v. Backus' Adm 702 Bakerv. Brown 1023 Baker V. Citizens Mut. F. Ins. Co. 396 Bakerv. Clarke Institution 102 Baker v. Clarke Ins. Co 1181 Baker v. Drake 511 Bakerv. Harpster 847 Baker, Matter of 420 Bakerv. Neff 69 PAGE. Bakerv. Northwestern Guar, etc., Co 868 Baker's Case 325 Baldwin v. Burrough 544 Baldwin v. Canfield , 512, 542, 652, 616, 708, 551 Baldwin v. Western Un. Tel. Co. 1063 Balfour v. City of Portland 1277 Ball V. Granite State Mut. Aid Assn 756 Ball V. Keokuk & N. W. Ry. Co., 293, 302, 276 Ballard v. Louisville R. Co 307 Balliett v. Brown 702 Ballin v. J. & E. B. Friend Lace Importing Co 921, 1024 Ballord v. Bank 435 Ballou V. Gile, etc 381, 387 Balsley v. St. Louis A. & T. H. R. Co 77, 150 Baltimore, etc., R. Co. v. Carmon. 952 Baltimore v. City Pass. Ry. Co. . . 1250 Baltimore City P. Ry. Co. v. Sewell 542, 561 Baltimore, etc., P. Co. v. Vander- werken 984 Baltimore & Oliio Employees Rel. Assn. V. Post. . . . 394, 781, 757, 764 Baltimore & Ohio R. R. Co. v. Ford Ill Baltimore & P. R. Co. v. Fifth Baptist Church 4, 1049 Baltimore & P. R. Co. v. Springer 298 Baltimore & P. R. Co. v. Sloan. . 294 Baltimore, etc., R. R. Co. v. Glenn 97 Baltimore, etc., R R. Co. v. Nes- bit 1191, 1192 Baltimore, etc., R. R. Co. v. Wal- ton 545 Baltimore V. Rappahannock Steam Packet Co 992 Baltimore Retort, etc., Co. v. Mali, 575, 735 Bambri ck v. Campbell 210 Bancroft v. Cambridge 1238 Bangor, etc.. State Co., Re 1133 Bangor, etc., R. R. Co. v. Smith. 832 Bangor, etc.. Slab Co., In re 489 Bangs v. Mcintosh 947 Banet v. Alton & Sangammon R. R. Co 628 Bank v. Alden 908 Bank v. Bank 197 Bank v. Bruce 185 Bank Corn's v. Bank 1089 Bank v. Emroy 195 Bank etc. , v. Guttschlick 148 Bank v. G. M. Com. Min. Co. . . . 908 Bank v. German Warehousing Co. 197 Bank v. Gustin, etc.. Mining Co. 1015 Bank v. Hall 197 Bank v. Hammond 866 XXVIU TABLE OF CASES. PAGE. Bank v. Hirsh, etc., Co.'s 198 Bank v. Canier. . . . 187, 518, 528, 540, 570, 653 Bank v. Matthews 109 Bank v. McElratli 652 Bank v. McLeod 166 Bank v. Mer. Bank 523 Bank v. Page 108 Bank v. Texas Investment Co. ... 48 Bank v. The City of Charlotte. . . 1207 Bank v. Transportation Co 185 Bank v. St. Anthony's Church. . . 202 Bank v. Whitney 109 Bankers and Merchants' Mnt. L. Assn. V. Strapp 761 Bankhead v. Brown 279 Bank of Augusta v. Earle..93, 98, 97, 99, 104, 149, 155, 219, 237, 789 Bank of Alexandria t. Patton 1166 Bank of America v. McNiel 525 Bank of Attica, In re 5 Bank of Attica v. Mfgrs. Bank. . . 500, 517, 518, 519 Bank of Battle Creek v. Mallan . . 197 Bank of British North America V. Barling 608 Bank of California v. W. U. Tel. Co 1065 Bank of Cape Fear v. Edwards . . . 1285 Bank of Chillicothe v. The Town of Chillicothe 848 Bank of Colombia v. Okely 1191 Bank of Columbia v. Patterson 148, 824, 847 Bank of Commerce's Appeal.. 514, 529 Bank of Commerce v. New York. 315, 1275 Bank of Commerce v. Rutland etc., R. R. Co 94 Bank of Danville, Matter of 29 Bank of Edwardsville v. Simpson. 94 Bank of 6a. v. Savannah 1275 Bank of Genesee v. Patchin Bank 196, 197 Bank of Havana v. Magee 17 Bank of Hindostan v. Alison 114 Bank of Holly Springs v. Pierson 517, 518 Bank of Ireland v. The Trustees of Evans' Charities 1064 Bank of Kentucky v. Schuylkill Bank 438, 509 Bank of Louisville v. Nat. State Bank 519 Bank of Lyons v. Demmon, Hill & Denio 205 Bank of Madison, In re 261 Bank of Marietta v. Pindall 94 104 Bank of Metropolis v. New Eng- land Bank 2.59 Bank of Mich. v. Niles 230 Bank of Mich. v. Williams 93 Bank of Middlebury v. Edgerton 168, 4.")4 600 847 1032 618 PAGE. Bank of Monroe v. Gifford 54 Bank of Montreal v. C. C. & W. R. Co 992 Bank of Montreal v. Fidelity Nat. Bank 1160 Bank of Montreal v. Thayer 991 Bank of Niagara v. Johnson . . 979, 1044 Bank of North America v. Rindge 611 Bank of North America v. Chica- go, etc., R. Co Bank of Northern Liberty v. Cres- son Bank of Penn v. Gries Bank of Pittsburgh v. Whitehead Bank of Poughkeepsie v. Ibbott- son 1018, 1019, 1027, 1028 Bank of Poughkeepsie V. Whitlock 1031 Bank of Red. v. Boston 1259 Bank of Republic v. County of Hamilton 1 251 Bank of St. Mary v. St. John,797, 799, 800, 1015, 1042, Bank of Tenn. v. Burke Bank of the Republic v. Millard.. Bank of Toledo v. International Bank Bank of United States v. Dand- ridge 148, 205, 847, Bank of United States v. Dall- man 874, 916, Bank of United States v. Dallaur. Bank of United States v. Davis, 836, Bank of United States v. Dunn 213, Bank of United States v. Mac- Leaster 260 Bank of Utica v. Magher 82+ Bankof Uticav. Smalley, 371,410, 412, 428, 522, 528, 542, Bank of Va. v. Adams Bank of Washtenaw v. Montgom- ery BankofWatertown v. Watertown Bank of the University v. Hamil- ton Banks v. Poitiaux 148, 224, Banty v. Buckles 364, Baptist Ass'n v. Hart's Ex'rs 248 Baptist Ch. in Hartford v. With- erell 254 Baptist Church v. Mvilf ord 148 Baptist Meeting House v. Webb.. 1153 Barbaro v. Occidental Grove No. 16 772 Barbier v. Connelly 33, 1277 Barbour v. National Exchange Bank 944 Barclay, Ex parte 28 Barclay v. Culver 5,=52 Barclay v. Tallman 97. 917, 1152 Barclay v. Quicksilver Mini Co. 702, 808, 944, 958 Barclay v. Wainwright 494 1162 41 261 66 848 1019 1031 838 840 .554 917 99 29 816 230 S94 TABLE OF CASES. XXIX PAGE. Bard V. Bauigan 626 Bard v. Poole 99, 100, 102 Bardstown & G. K. Tp. Co. v. Godman 695 Bardwell v. Sheffield, etc., Co 672 Bargate v. Shortridge 848, 1062 Baring v. Dix 1146, 1168 Barings v. Dabney 796, 813, 1138 Baringtyne v. Homer Ins. Co 478 p. Barn Nat. B'k v. Hingham Mfg. Co 800 Barnard v. Backhaus 530, 531, 532 Barnard v. Norwich & W. K. K. Co 161, 479, 480, 481, 485, 676 Barnes v. Brown 403, 492 Barnes v. Lacon 319 Barnes v. Michigan Air Line Ky.. 293 Barnes v. Pennell 197 Barnes v. Suddard 851 Barnes v. Ontario Bank 197 Barnes v. Trenton Gas Light Co.. 838 Barnett's Case 901, 909 Barnett V. Chicago, etc., E. E. Co. 94 Barnett, Hoares & Co. v. South London Tramway Co.,L. E 215 Barney v. State 1250 Barnstead v. Empire Min. Co 370 Barrv. Bartram, etc., Mfg. Co.... 790 Barr v. King 604 Barr v. N. T. L. E. & W. R. Co. 409, 466, 694, 696, 832 Barre E. Co. v. Montpelier & W. R. E. Co 284 Barre Water Co., In re 82 Barread Banking Co., Re 512 Barrett v. Alton & Sangamon E. E. Co 1214 Barrett v. Darlington & Stockton E. E. Co 87 Barrett V. Henrietta Nat. Bank... 994 Barrett v. Mead 66 Barrick v. Giffoi-d 886, 922 Barrillv. C.I&W.P. Co 472 Barrington v. Pittsburgh & S. R. E. Co 356 Barron v. Burnsides 106 Barron v. Paine 878 Barrow's Case 904 Barrow v. Mass. Medical Soc 579 Barrow v. Page 285 Barrow v. Paine 916 Barry's Appeal 1262 Barry v. Broach 402, 403, 622 Barry v. Croskey 134 Barry v. Merchants Exchange Co. 224 Barry v. Merchants Exchange Co., 78, 80, 224, 315, 478, 479 Barry v. M. K. & T. E. Co. . .178, 477 Barry v. Plate-Glass Co 690 Barstowv. Savage M. Co. 569, 571, 575 Barter v. Com 438 Bartholomew V. Bentley 449, 929 Bartlett V. Drew 797,883, 1135 PAGE. Bartlett v. King 253 Bartlett v. Mystic Eiv. Corp 472 Bartlett v. Nye 253 Bartlett v. Smith 531 Bartlett v. Western Union Tel Co. 1063 Barton v. Barber 984 Barton's Case 657 Barton v. Cooke 572 Barton v. Enterprise Loan & Bldg Association of Wabash. . . 1157, 1158 Barton v. Port Jackson, etc., Co., 184, 465 Barton v. North, etc., Ry. Co 534 Barton V. Provident Mut. Eel. Ass'n 384, 389 Barton v. Railroad Co 187 Barwickv. London J. S. Bank. 7, 1050 Bassett v. Monte Cristo, etc., Co.. 456 Bassett v. St. Albans Hotel Co., 895, 1012, 1043 Basshor V. Forbes 1021 Basye v. Adams 391, 393 Bate V. Gillett 6 Bates V. Androscoggin E. Co., 477, 481, 677 Bates V. Bank of the State 79 Bates V. Boston, etc., E. E. Co., 218, 509 Bates V. Detroit Mut. Ben. Ass'n. 395, 396 Bates V. Elmer Mass. Mfg. Co. . . 1140 Bates V. Great Western Tel. Co. 885 Bates V. Keith Iron Co 209 Bates V. Lewis 361, 679 Bates V. McKinley 494 Bates V. New York Ins. Co. 520, 661 Bates V. Palmetto Soc 236 Bates V. Gt. Western Tel. Co 340 Bates V. Wilson 47, 68 Bates Co. v. Winters 123, 347 Bath V. Miller 181 Battelle v. N. C. & C. P. Co 460 Battelle v. Northwestern, etc., Co. 741, 744, 831, 835 Batter's Appeal Battershall v. Davis 971 Battle V. Davis 942 Bauch V. Sproule 492 Bauer v. Pierson 835 Bauer v. Sampson Lodge 378 389, 591, 752 Bauet V. Sanganan E. E. Co 1205 Baxter v. Moses 916 Bayard v. Bank 535 Bayard v. Farmers' & M. Bank, 513, 534 Baylies v. Lafayette, etc.,E. Co . 995 Baxendale v. Bennett 827 Beach v. Cooper 706 Beach v. Miller 466, 468, 831 Beach Co. V. Harned 897 Beadles V. McElrath 532 Beadleston v. Alley 707 XXX TABLE OP CASES. PAGE. Beal V. Cbase 133, 616 Bean v. American L. & Tr. Co. . 344 Bean v. People 733 Bean v. Pioneer Min. Co 818 Beardslee v. Morgner 772 Beasley, Ex parte 337 Beardsley v. Hotchkiss 325 Beardsley v. Johnson 450 Beaston v. Farmers' Bank of Dela- ware 93, 1166 Beatty V. Ebory 1055 Beatty v. Knowles 77, 79 Beatty V. Neelon 746 Beaumont v. Meredith 581 Beck V. Henderson 70 Beck V. Kantorwicz 712, 745 Beck V. Railway Co 289 Beck Ex. V. McGillis 573 Becher v. Wells Flouring Mill Co. 706 Becker v. Directors of Gulf City St. Ey. & Real Estate Co 691 Beckett v. Houston 428, 515 Beckwith v. Biirrough 510, 541 Beckwith v. St. Phillips Parish.. 238 Beckwith v. Union Bank 261 Bedford E. R. Co. v. Bowser, .856, 453, 640, 823, 892, 893, 924 Bedford v. N. Y. Iron Mine 607 Bedford, etc., R. Co. v. Stanley. . 741 Beecher v. Billsburg, etc., v. R. R. Co 341 Beecher v. Wells Flouring Mill Co 410, 514 Beeckel v. Imperial Council of the Order of the United Friends 886 Beekman V. H. R. W. S. R. Co. 68, 156 Beekman v. Saratoga, etc., R. R. Co 267 Beene v. Cahawha, etc., R. R. Co. 327 Beer Co. v. Mass 1201, 1225, 1232, 1238, 1241 Beers v. Bridgeport Spring Co., 483, 488 Beers v. Phoenix Glass Co. 80, 199 834 Beers v. Wabash 975 Beeson v. Green Mt. G. M. Co 1066 Beilder's Appeal 292 Belcher Ref. Co. v. St. L. G. E. Co 849 Belfast, etc., R. Co. v. Belfast, 480, 493, 673, 674, 675, 676, 677 Belfast, etc., R. R. Co. v. Cottrell, 327,350, 353 Belfast, etc., R. R. Co. v. Inhab. of Brooke 323, 35.3, 357 Belfast, etc., R. R. Co. v. Moore, 327 357 Bell's Appeal 329, 516, 54.3 880, 914, 919 Bell's Case 644 Bellv. A. P. & L. R. Co 645 Bell V. Cunningham .544 Bellv. Hull 371 PAGE. Bell V. Mercantile Trust & Deposit Co 36 Bell V. Railroad 319 Bell V. R. T, Co 161 Bell V. Shibley 966, 971 Bellairs v. Tucker 723 Bellona Co.'s Case 1152 Bellows V. Hallowell, etc., B'k, 806, 811 Bellows V. Todd 417, 456 Bell Tel. Co. of Phil. v. Com. Pa. Supr. Ct 1231 Belmont v. Erie Ry. Co 698, 716 717, 857, 954, 956 Belmont v. Erie Ey. Co.. 698, 716, 717, 854 Belton, etc., Co. v. Sanders, 351, 364, 1213 Benefit Building Soc. v. Cunliffe. 467 Benjamin v. Elmira E. E. Co 172 Bentlif v. London & Colonial Finance Corp 605 Belo V. Commrs. of Forsyth 1284 Belton V. Hatch 378, 584 Beman v. Hufford 152, 706 Beneficial Soc. v. Dugre 380 Beneficial Soc. v. White 777 Bennett v. Judson 1052, 1055 Bent V. Priest 460 Bentz V. Northwestern Aid Ass'n. '757 Bercick v. Marye 576, 651 Beresf ord. Ex parte 892 Bergen v. Porpoise Fishing Co., 66, 370. 932, 1138 Berkman v. Hudson Riv. W. S. By. Co 58 Berliner v. Waterloo 321 Bernard V. Lapew, etc., Co 326 Berney Nat. B'k. v. Pinkard. 561, 564 Berry V. Brett 966 Berry v. Broach 713, 1168 Berry v. Yates 188,353,537, 642 Berryman v. Cin. S. Ey. Co 359 Berrucke v. Ins. Co 544 Berthin v. Crescent City Slaughter House 1174 Besch V. Western C. Mfg. Co 455 Best V. Thrall 106& Bethany v. Sperry. 311, 426, 57a Beveridge v. Hewitt 531, 532 Beverly v. Brooke 943, 946, 996 Bickford v. Grand Junction Ey. Co 171 Bickitt V. Billsbrough 546 Bickley v. Schley §81 Bidwell V. Com. L. Ins. Co 778 Bidell V. Bayard 575 Biddle v. The Locks & Canals ... 32 Bidstrup v. Thompson 513 Bidwell v. Babcock Com. L. Ins. Co. 776 915 Bidwell V. Pittsburg, etc., E.E. Co'. 367, 370 TABLE OF CASES. XXXI PAGE. Bierce v. Red Bluff Hotel Co 835 Bigelow V. Benedict 531 Bigelow V. Gregory, 44, 78, 932, 933 934 Bigelow Matter of 522 Biglin T. Fr. Assn 622 Billings T. Robinson ...908 965 Bingham v. Rushing 799, 1015 Bingham pton Bridge, In re 89 Binney's Case 224 Birch's Case 30 Birch V. Cropper 476 Bird V. Bird's, etc., Sewerage Co. 114 Bird V. Daggett 79, 866 Bird V. Hayden 1015, 1038 Birkett v. White June. R. Co 154 Birkenhead L., etc., J. R. Co. v. Pilcher 539 Birmingham v. Gallagher 28 Birmingham, etc., R. Co. v. Locke 586, 656 Birmingham Mineral R. Co. v. Smith 295 Bish V. Bradford 642 1056 Bish T. Johnson 1212 Bishop V. Brainerd 9, 794, 1212 Bishop V. Empire Ord. Mut. Aid Soc 385 Bishop V. Empire Order of Mut. Aid 759 Bishop V. Globe Co. 509, 522, 525, 526 Bishop V. Grand Lodge 764 Bi-Spool S. M. Co. V. Acme Manuf'gCo 192, 822 Bissell et al. v. City of Jefferson- ville 847 Bissel V. Kankakee 320 Bissel V. Mich. So. & N. I. R. R. Co 80, 154, 197,322,623, 4865 Bissett V. Daniel 585 Bissitt V. Ky. River Nav. Co. 910, 916 Bisson V. Curry 960 Black V. Del., etc., Canal Co., 85, 115, 152, 1159, 1174, 1177, 1178, 1180 Blacky. Hemersham 544, 559 Black v.Huggins 689, 706 Black In re 1033 Black T.Valley, etc. , Assn 376 Blackburn's Case 644 Blackburn V. Selma, etc., R. R. Co. 69, 111 Black River Improvement Co. v. Lacrosse Booming & Transp. Co 806 Black's Case 1025 Blair v. Compton 564 Blair v. Perpetual Ins. Co 104 Blair v. St. L. H. & C. R. Co. 974 990 Blaisdell v. Bohr 536 Blake, etc., Co. v. New Haven 966 Blake, Ex parte 891 Blake v. Griswold 1040, 1041 Blake v. Hinckle 917 Blake V. Portsmouth, etc., R.R. Co 116-^ PAGE. Blake V. Rich 307 Blake v. Winona & St. PaulR. R. Co 1221 Blake's Case 644 890 Blakely v. Bennecke 399' Blaker v. Bayley 450 Blanchard v. Atlantic Mut. F. Ins. Co 597 Blanchard v. Dedman Gas. Co. 529, 56.? Blanchard v. Dow 429, 445 Blanchard v. KauU 932, 934 Blandon v. Richmond F. & P. R. Co 8a Blandwell v. Stevens 535 Blanke v. St. L. S. G. & S. Min. Co 915 Blatchfordv. Ross 947 Bleeker v. Ballow 118.3- Blen V. Bear River & A. W. & M. Co 197, 210, 652 Bligh V. Brent 568 Bliss V. Canal Co 218 Bliss V. Kanweah, etc., Co. 208, 210, 455 Bliss V. Matterson 460, 809 Bliven v. Peru Steel, etc. Co 1145 Block V. Atchison, etc. R. R. Co. 605 Blodgett V. Morril, 361, 678, 679, 891 Bloomer v. Union Coal, etc. , Co. . . . 172 Bloomer v. Waldron 384 Bloomfield v. Bank 544 Bloomington Mut., etc., Assn. v. Blue 881, 383, 394, 767 Blouin V. Liquidators, etc., 511, 512, 553 Bloxam v. Metropolitan Ry. Co. 508, 704, 714 Bluehill Academy v. Withan, 739, 74.3. Blundell v. Winsor 28 Blyth's Case 884 Board of Commrs. v. Cottingham. 34T Board of Commrs. v. Elston 1265 Board of Tippecanoe County v. La Fayette, etc., R. R. Co. 666, 822 Board of Commrs. v. Mighels 25 Board of Chosen Freeholders of Essex County v. Newark City.. Board of Commissioners v. State. 124 Boardman v. Cutter 568 Boardman v. Lake Shore Ry. Co. 119, 128, 480, 485, 493, 494, 559, 611,67-3,676, 677 Boasberg v. Cronan 380 Boatman's Ins. Co. v. Able 529 Bobbitt V. Liverpool L. & G. Ins. Co 778 Bock V. Ancient Order of United Workmen 76S Bocock's Ex'rs. v. Alleghany C. &LCo 192 Boeppler v. Menown 1147 Bogarrlns v. Rosendale Mfg. Co. . 920 xxxn TABLE OK CASES. PAGE. Bogardus v. Trinity Church 226 Boggs V. Badger 537 Boggs V. Olcott 880 Bohm V. Brewery Co 196, 831 Boisgerard v. N. Y. Bltg. Co. 29, 824 Boise City Canal Co. v. Pinkham. 52 Bolen V. Crosby 1046 Bolton V. Bolton 376, 1079 Bolton V. Madden 410 Bonaparte v. Camden & Amboy R. E. Co., 270, 271, 1167 Bon Aqua Imp. Co. v. Standard Fire Ins! Co 54, 69 Bond V. Morse 1042 Bone V. Del. & H. Canal Co 229 Bonewitz v. Bank 1028 Bonner v. Heame 960 Boody V. Drew 749 Booker, Exparte 370 Booske V. Gulf Ice Co 68 Booth V. Bunce 808 Booth V. B. & A. R. R. Co 1067 Booth V. Clark. 942 Booth V. Farmers' & M. Nat. Bank 197 Booz's Appeal. 78 Borgraffe v. Knights of Honor, 596, 597 Borland v. Haven, 195,467,543, 560, 917, 1018, 1024 Borne V. Freith 938 Borough of Norwalk v. Blanchard .300 Bosanquet v. Shortridge 549 Bostock V. Blakeney 538 Boston C. & M. R. R. Co. v. Gil- moie 158 Boston, etc., R. Co., In re, 265, 268, 284, 370 Boston, etc., R. Co. v. Lowell, etc., R. R. Co 268 Boston, etc., R. R. Co. v. Rich- ardson 577, 652, 828 Boston, etc., R. R. Co. v. State... 1233 Boston, etc., R. R. Co. v. Well- ington. . 327, 337, 340, 352, 364, 655 Boston, etc.. Shoe Co. v. Boston Rubber Co 5 Boston Freight R. R. Co. v. East- em R. R. Co 173 Boston Glass Mfg. Co. v. Langdon 1152, 11.53, 1159 Boston Music Hall v. Gary 563 Boston S. D. & T. Co. v. Bankers &M. Tel. Co 161,162, 164 Boston Tannel Co. v. McKenzie.. 55 Boston Water Power Co. v. Bos- ton & W. R. R. Co 265 Boston & Albany R. R. Co. v. Pearson 27, 29, 515, 877 Boston & L. R. R. Co. v. Salem cfeL. R. R. Co 265 Boston & N. Y. Air Line R. R. __ Co. V. Coffin Ill PAGE. Boston & Prov. R. R. Co. v. N. Y. & New Eng. R. R. Co 822 Boston V. P. R. Corp. v. N. Y. & N. E. R. Co 702 Botts V. S. & B. C. Tp. Co. . 115, 691 Boughton V. Opis 1015 Boulton Carbon Co. v. Mills, 882, 908, 910, 915 Boulware v. Davis 105, 155, 978 Bouton V. Dement 800, 882, 921 Bowden v. Johnson 506, 909 Bowden v. Santos 506, 909 Bowen v. First Nat. B'k 605 Bowen v. Kuehn 670 Bowen v. Mt. Wash. Ry. Co 216 Bowker v. Pierce 538 Bowlby V. Bell 567 Bowlingreen & M. R. Co. v. War- ren County Ct 77, 89 Bowman v. Moore 39-3 Bown V. Catholic M. Ben. Assn.. 386 Bo wring v. Shepard 548 Boyce v. City of St. Louis. . . 100, 234 Boyce v. Town son ton Station, etc., Church 69 Boyd v. Ches., etc.. Canal Co 604 Boyd V. Hall 1028 Boyd V. New England Mut. L. Ins. Co 783 Boyd V. Peach Bottom Ry. Co., 356, 369, 926 Boyd V. Sims 688, 689, 691 Boyden v. B'k of Cape Fear 261 Boylins v. Swift 1016 Bozeman v. Bozeman 923 Bracia v. Nelson 789 Bradbee v. Warren F. C. Sav. Bank 216 Braddockv. Phil. Marlton &Med- ford R. R. Co 626, 746 Bradford, etc., Co. v. Briggs 555 Bradley v. Aldrich. 718 Bradley v. Ballard 854, 865, 866 Bradley, Exparte 1001 Bradley v. Farwell 795, 796 Bradley v. N. Sac. R. Co 272 Bradley v. New York & New Hampshire R. R. Co 86 Bradley v. People 1275 Bradley v. South Cars. Phos.. 88, 1185 Bradley v. Williams 467 Bradner v. Woodruil 1141 Bradt v. Benedict 1152, 1153 Brady v. Brooklyn 80 Brady v. Coachman's Tenev. Assn 438, 597 Brady v. Mayor 702 Brady v. Weeks 1238 Brainard v. Colchester 1183 Brainard v. Cowdrey 573 Brampton, etc., Ry. Co., In re 743 Branch v. City of Charleston 122 Branch v. Jesup, 66, 114, 151, 162, 861 TABLE OF CASES. lOSif 102S 905 154 1109 :!50 1138 10(13 PAGK. Branch v. Langdon 8 Branch v. Roberts ti94, 801 Brand v. Henderson 531 Brand v. Lawrenceville, etc., It. R. Co ;j.-.3 Brandon Iron Co. v. Cleason, 11. ">0, 11.): Brandt \ . (rodwin 448, Braniu \. Conn., clc, R. R. Co. Branson v. Oregonian Ry. Co Brandt V. Eklen SS9. i)01, 90-.'. Braslin v. .Somerville H. R. Co... Brauustein v. Accidental Death Ins. Co •. 775 Brauser v. New Kng., etc., Ins. Co. 006 Bravard v. Cincinnati II. & I. R. Co 231, 371, Bray v. Farwell 30, Breen v. Bank Breese v. United States Tel. Co. Breisenineister v. Supreme Lodgt' Knights of Pythias \ . 781 Breitina: v. Lindauer 1047 Brent v. Bank of \Va,shington. 517, 520, 5il Bressler V. Wayne County 1259 Brewer v. Boston Theatre, -159. (187, 701, 7(».-!. 709 Brewer Brick Co. v. Brewer 'BO Brewer's Fire Ins. Co. v. Bnri;(^r, 357 Brewster v. Hatch 74 1 Bi-ewster v. Hartley, 414, 428, 51 1 , 550 Brewster v. JlcOall 253 Brewster V. Sime •53(i, .557 Brewster v. Stratman 465 Brice v. Munro 017 Brick. Presb. (Ihurcli v. Mew York 1221 Bridge V. Chapin 364 Uridge Co. v. Cummings 926 Bridge Co. v. Hoboken Land, etc., Co , 87 Bridge Co. v. Bachnian 202 Bridge Proprietors i. Hobpken Co i;.a,l85 Bridge v. Penniman 648, 724 Bridges' Case 1137 Bridger's Case L. R .361 Bridgeport Bank v. New York & N. H. R. R. Co 513. .540, .570, 052 Bridgeport City Bank v. Empire Stone-dressing Co 83 Bridgeport Sav, Bank v. Eld- ridge 210 Brig^Bi V. Mead 545,548, 549 Bright v.Lord : . .544, .559 BrighLv. Metairis Cehi. Ass'n.... 210 Brinham v. Wellesburg Coal Co... 1134 Brinkerhoff v. Bostwich....463, 667, 718, 920, 924 Brinklev v. HambeUon....543, 546, 5-18, 558 Brisbane v. Del., etc., R. R. Co. 514, Briscoe v. So. Kan. Ry. Co Bristol V. Chicaj^o, etc., R. Co.... Bristol Milling Co. v Probasco.... Bristol V. Sandford 965 Bristol, etc., Ry.('o., Re British Anieripan Land (;o. v. Ames. British, etc.j Co. in re 425, British, etc., Assn. L. it. lie.. 449, British Sugar RelininsfCo. Matter of ." 312, British & Am. Tel. ('Z Bruecher v. Village of Port Ches- ter 1277 , Brueixahan v. Manhattan Col . . . 242 Bruffett V. Great Western R. R. Co 124, 128, 804, 81 1, 1152 Brum, V. Merchants' Mut. Ins. Co.. 808 Brundage v., Brundage 485, 559 Brundage v. Monumental S. M. Co 874 Brunson v. Nichols 603 BrUnswick-BaHce-Colletoder Co. v. I Boutell 817 Bryan V. Baldwin. 6.t1 Bryan v. Reynolds ■: 182 . Bryant & Brown Shoe Co 986 Bryant v. Goodnow 312, 425 Bryant v. Moore 544 Bryant v. Tel. Co 1231 Brydon v. Gemmell 681, 921 Buchannan v. Barstow 1042 Buchannah v. Litchfield 321 Buchannan V. Low ■ 1042 ■ Bucher v. Dillsburg,. etc., R. IJ. , ., i Co.... U....34.5, 3.57 ,.', Buckv. BucU ,.,.... :28 ■ .jBuck V. Collins.*. . ^ . i„t-r • • 'TSS <''(Buck V. Memphis, ife.i..';R. R. Co. ;r ' ■• 1.1.. 158, ..,177 ;4.^iick y. Seymour 161. fi/Buckfield, etc,, R. K Co. v. Irish. 328 i>lBucVsford, etc. , R. R. Co; v. Bucfc ,-,425, i;t;(Bucklin v. BiuckJin j ,.. 143 . liijJucHpjan, In.ve,.'.., 517 Bucksport & B. R. R. Co. v. Buck, . a52, -M;:,. 632, I20j PAGE. Bucksport & B.. R. R. Co, v. Brewer 346 Bucksport & B. R. R. Co. v. In- hab., etc 3.56 Budd V. Monroe 557 Bndd V. Multnomah St. Ey. Co. 633, 568, 659 Budd V. Walla Walla P. Co. . , 456, 467 Buell V. Buckingham 455, 796 Buell V. Warner 1042, 1043 Buena Ventiu-a Mfg. Co. v. Vas- sault 418 Buenz v. Cook 1026 Buffalo E. S. R. Co. v. Buffalo St. Ry. Co 1228 Buffalo, etc., R. E. Co. v. Clarke, 329 Buffalo, etc., E. E. Co. v. Dudley, 327, 339, 362, 428, 1206, 1211 Buffalo, etc., R. R. Co. v. West.. 924 Buffalo N. Y. ,& P, E. R. Co. v. Harvey , 165 Buffalo R. R. v.Bainard.. 4 268 Buffalo V. Webster ■ 445 Buffalo S. & C. Co. V. Del. L. & W. R. Co 154 Buffalo & J. R. Co. V. Gifford, .331, 332,' 639 Buffett V. Troy & Boston R. R. Co ,....,. 862 Bugg's Case , 662, 907 Burroughs v. Bunnell 992 Burrough of Millvale's Appeal.. . . 75 Burrough of Millvale v. Evergreen Ry. Co 75 Burroughs v. Smith. 337 Burroughs v. North Carolina R. K. Co 485 Burroughs v. North Carolina E.- E. Co 559 Burrill v. Boardma,n 240 Burrows v.. Smith .339, 3,58 Busbee v. Freeman 496 Busey v. Hooper... . .308, .341, 426, 708 Bush V. McDonnell... 69, 325, 886, 879 Bushell V. Commonwealth Ins. Co... , 604, 606 Bushnell v. Con. Jer. Mach. Co... 70 Bushnell v. Grit.. Ice Mach. Co..„ 68 Butchers', etc.„Bank v.McDoiiald, 69 Butfer V. Aspinwall. 344^. S94 Butler. V. Cumpston ,. . , .545 Butler V. Eahm ..161, 172 Butler V. Smalley.. ........ ;a045,' 1040 Butler V. State Mut. L. Assur. .Co....... .,, 7(55 Butm^n V. Howell ....,; 554 Buton ,& Sadlej-'s Co., .In re ■. _ 733 Butt v.. >Ionteaux [-."^ 938 Butt v.. Wopds -; . , . i- 409 Butter,nut5,. etc.. Tump. Co. v. North. .'. ,.,..-,■.,.„, „345 355 Putter,worth v. (Janfield. . . . ." ' 551 Butterwoith v. O'Brien ' ggg Button V. Hoffman 616 1152 TABLK OF CASES. XXXV Buttrick v. N. & L. R. Co Buxton V. N. E. Rl. Co. L. R BuUard v. Bank 509, Bullard v. Thompson Buller V. Society, etc Bullock V. Kilgour Bulkeley v. The Derby Fishing Co. Bulkley v. Bdggs • Bulkley v. Whitcomb Bun V. Wilcox Bunch V. Glover Bunch V. Taylor Bundy v. Birdsall Bundy v. Bundy Bundy v. Iron Co Bundy v. Jackson Bunn's Appeal Burbank v. Whitney. Burbank v. Rockingham Ins. Co. Burch T. Taylor Burbrldge v. Manners Burdon v. Mass. Safety Fund Assn Burgoyne v. Eastern & W. Ry Go. Burgess v. Pul 205 Burgess v. Sellgman 550, 905, Burke v. Badlam Bm'ke v. Roper Burke v. Smith 856, 549, S82, Burkinshaw v. Nichols. .... .889, Burland v. Northwestern Mut. Burlington C.' R. & N. Ryi Co. v. Dey 1221, Burlington K. & S. W. K Co. v. Johnson ... Burlington & 31. R. R. Co. v. Hayue Burlington M. R. Co. v. Thomp- son Burlington & M. R. Co. v. White, 293, Burmester V. Norris Burnes v. Pennell 549, 883, Bume's Appeal Burnett v. Sacramento Bumham v. Bowen Burnham v. Northwestern Ins Co. Bumham v. Mfg. Co Bumham v. S. F. Fuse Mfg. Co. 623, 034, Bums V. Beck 466, 470, Burns V. Brick Layers', etc., Assn. Bui-ns V. Grand Lodge of Ancient Order of United Workmen .... Burns V. Peck Bums V. Pennell Burns' Appeal , 882, .Burasville Tp. Co. v. State .Burt V. Batavia. Paper Mfg. Co. 618, Burt V. Bringham Burt V. British Assur. Co., 680, 698, 706, 559 154 518 102 1107 1024. 847 148 910 560 914 914 256 236 616 187 871 253; .379' 671 827 757 958 821 916 1251 590. 893, 754 1230 288 1281 298 204 898 799 34 990 878 658 877 594 773 93(i 646 1144 734 837 287 716 PAGE. Bui'tv. Farrar..-: 891 Burt V. Grand Lodge F. & H. M. 584 Burt V. Rattle 155, 493, 859 Burton v. St. George's Soc. 586, 593, .VJt Burr V. Sherwood '>-'A) Burrv. Wilcox 315,51.5, 330 Burr' s E.U«62, 1085; Oamden, etc., H. R. Co. v. Elklns «98i Came V. Br-igjia™ 4024 Cameron y. Chicago M. Ife St. PaolKy. Co 299 Camensm, v.iHavemqyei;, 94\1162, '1168 Camp y. %™e *9.,. 41S, 416 Camp T. Barney 98.?, Camp V. Taylor. 461, 706S Campbell Co. v. Yuengling S.'il! Campbell v. Kenesha 320; Ciimpbell v. Metropolitan St. H. \ Co 290: Campbdil v. Miss. CF*i. B''k 4159 Camiib^H v. National Ij. Assn. ; Co 773 Campbell v. Pari^ etc.^ 4i. 11. Co. 31 9; Campbell v. IFope 830' Campbell v. Teitbot. •1126 Camptbell V. Zylomte Co 544, 068 Cambrian iKy. Co., In i-e . . . . 860 Canada SouSliern liy. Co. v. ^ob- ' hard 1192 Cani^U etc., Street Hy. Co. v. I>esceirt City K. Co. . . . ^ 1239 .Canal, etc., St. Jiy. Co. v. C!res- «erit Ctty H. «G» 40: Canblos v. PJiH., «tc., K. «. Co . . 116 Cannon v. T-rask 703 CantUlon v. ©ribuftue, «ic., "It. 11. Co 1241 Canton (Masomc iSfilt. Ben. Soc. *. 4{ocfclitJia 767i Cape Ma-y & ©. B. -N^. Co.., In re, 411, 412, 705 i Cape Sable Co. 's Case t4S_ Capel v..Simis '644J Capp V. Lan* 430' Capper's Case -aOg Cartan v. iPabber Malliliew., «'tc., «oc..... 4!!8, 057 Carter V. 'Bafflerar ,. 1!S3i Carter iv,. Xfeion IPmi'ting Co '887 Cartmelt'-s Case .502 Cartwright w. Oickinsom. . . . «42, 1447 Ciarver .. '519 ^ase v> IBranerSiitit — PAGE. Case V. Beattr^gffitd '9ii Case V. Citizens' Bank 1139 Ga?ew.. Kelly 225, 230 Gassell v. Iiexington H. & M. Turnpike Road Co. . 426, 451, 1177 Casey v. Galli «95 Casey v. Gibson 1017 Casey v. .Society Credit Mobilier, 1138, 1139 Gashwiler v. Wills 45.'") Cass V. Pitfabargh, etc., li. U. Co., 341, ?,U, 632 Castle V.Belfast Foundry Co. 212, «1S Castleman v. Holmes 502 i Castellan v. Hodson 548 Cates V. Sparkman -J6S, 696 Catland v. Hoyt 772 Gartlett V. Starr 210, 219, 816 Gailia v. Eagle B'k 794 :Gatski.H Bank v. Gray 1100 Caulkins v. Gas Co 652 C. Aultman & Co. v. Connor 61 Gawley v. Castello 197 Cayuga fiake E. It. Co. v. Kyle, 72, 340, 925 Gapron v. Stout 1032 Card V. Hope 410 Cardot V. Barney 984 Care^v"..s Estate, In re 618 Garey v. Ciaicinnati. etc., R. R. Co 56, 69 Carey V. Houston & T. C. Ry. Co., 698, 809 Carlen v. Drury 594 Carting's Case 905 Carlisle v. Cahawba & Marion R. R. Go 632 Carlisle v. Pullman Palace Car Co 1248 Carlisle v. Saginaw Valley &, St. L. R. Co.... 330 Carlisle v. Terre Haute & Rich- :iaud R. R. Co 1207 Carlow V. C. Aultman <& Co 101 Carmody v. Power 615," 740 Canail, .etc., St. Ry. Co. v. Jf«w Orleans 75 Carnall v. (East St. Xjouis 104 C!arnaghan v. E:g>ort'ers & Pro- ducers' ©aCo 60(i Came v. Brigham 432 Carothers v. Phila. Co 48 Carpenter v. Black Hawk Gold Min. fG9 «(), 807 Carpenter w. Marine B"k, 918, 920, ai031 Carpenter v. Uew York, etc., R. tl.Co 479 Carpertter v. Westinghouse A. B. ^^°--- 608 Oarr *r. Heniser ggjj CaiT V. J^e Fevre 881 CarjoU V. City «f East .St. iJotiiV, 104 Garroilliv. Mifllamfliy'sSav. EaBJc, 518, 542, 554 ^ABLE OF CASES. XXX VI* PASE. Carroll Co. v. Smith.. . 321, 322,, 347 CSurron Iron Co. v. McCJStren 604 Carson V. Arctic MLq. Co .327 Carson v. Carson 240 Carson v. Gaslight Co 712 Cayzer v. Taylor 1067 Cazeaux V. Mali 722 Cecil, Re 421 Cedar Lake Hotel Co. v. Cedar Lake Hydraulic Co 87^ 866 Cedar v. Lumber Co 826 Cedar Kapids I. F. & 'S. W. Ky. Co. V. Kaymond'. 272 296 Cedar Kapids I. F. & N. Ry. Co. V. Ryan 293, 829 Central A. & M. Ass'n. v. AISl- bama G. L. Ins. Co 10-, 71 909i 925^ MIS Central Bridge Co. v. City of Lowell Central! Bank v. Empire Stone- dressing Co . . , 83, 197 Central Branch U. P. R. Co, v. Andrews 276, 290 Central City Sav. Bank v. Walker, 935, 936 Central Co. v. Collins 84, 716 Central, etc., R. R. Co. v. Twenty, etc., R. R. Co 1119 Centr. etc., Tel. Co. v. State 1006 Central & G. R. Co. v. People. . 1128 Central Jr. DJstv. DeLapps. . 33;, 34 Centre & K. Tump. Road Co. v. McConahy 361 Central Land. Co. v. City of Pro- vidence 290, 294 Centi-al Nat. Baink of Boston v. Hazard 989 Central Neb. Nat. Bank v. Wil- der 551 Central P. R. Co. v. Clements 70 Central R. Co. v. Chicago, etc., R. Co 266 Centr. R. Co. v. Collins .. .9, 188, 697 704, 709', 1206 Central Co. v. Collins 8 Centr. R. Co. v. Penn. R. Co. 8, 9, 84, 188, 441 Central R. R. Co. v. Claghora .... 370 Central R. R. Co. v. Gieorgia, 122, Hot, 1283 Central R. R. & Bkg Cto. v. Georgia 118 Central K. R. Co. v. Johnson, 3Qi N. H 390 Central R. R. Co. of I,. I. T. & C. N. Y., Matter of 266 Central R. R. Co. v. Ry. Co. ... . 733 Central R. R. Co v. State Board of AssesscjES . . .,., 1279 OMJtral R. R. Co. of Venezuela v. Kiseh 643, 647 Central R. R. & Banking Co. v. Papot 544 I'AGK, I Central R. R. & Bankiajig Co. t. Atlaintfc?, etc., B. R. Co 65* Cent. E. & Bkg. . Coi y,. (8a. Cofetr. &Ins. Co. K. C. . . @&5i 60? Central Transp. Co. v. Pullman Palace Car Co 152, 846 Central Trust Co. v. OMo C. R. R. Co 164 Central Tirust Co. v. Kwaeltod.. J 77 Central Tiitst Co. v. Si. L. A. T. R. Coi... 117, 121, 160, 948,, 982 Central Tlrust Co. v. Tappaa 988 Central Tlijst Cov v. JTast Ttemnes^ see„"V. & G. R. Co 974, 967 Central Ttnst Co. v. W. St. L. & P. R. Co. . . . 162, 177, 974, 986, 990 Cent. THrnp. Co. v. Val;eBtine< SrjO, 366 Cent. Om. Tef. Co. v. Bi'adbury, 1231 Central Vn. Tel. Co. v. State. . . . 123* CentraJia Chicago B. & N. Ey. Co. v. Porter 28a Chicago B. & Q. R. Co. v. Mann- ing 603 Chicago, etc., Co. v. People 141 Chicago, etc., E. E. Co. v. Ackley, 1234 Chicago, etc., E. E. Co. v. Dakota iCJo Ill Chicago, etc., E. E.Co. v. Gretz- ner ; 106 : Chicago, etc., R. E. Co. v. Iowa, 1228 Chicago, etc., E. E. Co. v. Keo- kukPaeketCo ;... 967 Chicago, etc., R. E. Co. v. Lake, 279 Chicago, etc., R. R. Co. v. Mal- lory 322 Chicago, etc., R. R. Co. v. Mar- seilles 185 Chicago, etc., R..R. Co. v. Mar- ' seilles 346 Chicago, etc., E. E. Co. v. Minn. ' etc., E. R. Co Ill Chicago,, etc., E. E. Co. v. Page, 559 Chicago, etc., R. R. Co. v. Put- nam 324 Chicago, etc., R. R. Co. v.. Smith. 287 Chicago, etc., E. E. Co. v. Wilson. 273' Chicago, E. & L. .S. E. Co. v. Catholic Bishop 293 Chicago,6. & C. Co. V. People's G. & C. Co 77 Chicago V. Hall 1026 Chicago, K. & N. Ey.. Co. v. An- drews 290 Chicago, K. & N. Ey. Co. v. Hazels 294, 300 Chicago, K. & N. Ey. Co. v. Wieb, 302 Chicago, K. & W. Ey. Co. v. Brunson 298 Chicago, K. & W. E. Co. \. Commrs 49 Chicago, K. & W. E. Co. v. c'os- ^per 298, ,300 Chicago, K. & W. Ey. Co. v. Free- „inan 360 Chicago Life Ins. Co. v. Audi- tor . : 1193 Chicago Life Ins. Co. v. Needles, 790, 1085, 1086, 1192 TABLE OF CASES. XXXIX PAGE. Chicago, M. & St. Paul Ry. Co. v. Becker 95, 106, 1228, 1243 Chicago, M. & St. P. Ky. Co. v. Minnesota 11S7, 1236 Chicago, M. & St. Paul Ey. Co. v. Third Nat. Hani:; 152 Chicago Municipal Gas-Light and Fuel Co. V. Town of Lake.. : . . . 75 Chicago Mut. Life Indemnitv Ass'n V.Hunt 376,1087, 1111 Chicago, P. & St. L. Ky. Go. v. Aldrich 299, 302 Chicago, R. I. & P. R. E. Co. v. Howard 80 Chicago K. R. Co. v. Minn, etc., K. R. Co Ill Chicago, R. I. & P. R. Co. v. Smith 303 Chicago, S. F. & C. Ry. Co. v. Ward 300 Chicago, S. F. & C. Ry. Co. v. Vivian 298 Chicago & AUeghjiny Oil & Min- ing Co. V. TJ. S. Petroleum Co, 944 Chicago & A. Ry. Co. v. Derkes, 850 Chicago, etc.. Gas Co. v. People's Gas Co 846 Chicago & A. R. Co. v. Goodwin, 293, 294 Chicago & I. R. Co. v. Davis .... 1049 Chicago cfe I. R. Co. v. Pyne 181 Chicago & N. W. Ry. Co. v. Ft. Howard • • 1^8 Chicago & N. W. R. Co. v. Chic- ago & E. R. Co •■■• 281 Chicago & N. W. Ry. Co. v. Dey, 1237 Chicago & N. W. R. R. Co. v. James 1^^ Chicago &N. W. Ry. Co. v. The People 1008 Chicago ife.X. W. R. R. Co. v. SweU 1067 Chickaming v. Carpenter 124 Chickory Co. v. Crews 67 Child V. Hudson Bay Co. . . . 4.3o, 443, 517, 523 Child v. N. Y. etc., R. R. Co . . . . 809 Child v. Boston 1023 Chllds V. DIgby 566 Childs V. Harris Manufg. Co 606 Childsv. Hurd 47, 50 Chllds V. Smith 66, 72, 533, 928 Chilton V. Brooks 217 Chippendale, Ex parte. . . 30, 459, Chisholm v. Forney 882, 904 Chollar Min. Co. v. Wilson. . 705, 707 Chouteau v. Allen ■:■ 5o2 Chouteau v. Dean 878, 693 Choteau Ins. Co. v. Floyd.. 633, ^ 638, 6i!9, 678 Chouteau's Ins. Co. v. Holmes, 316, 4.o6 PAGE. Choteau Spring Co. v. Harris, 505, 508, 520, 542, 548 Christ Church v. Holy Commim- ion Church 400 Christ Church V. Philadelphia.... 118;i Christen v. I. & St. L. Br. Co.. . . 1141 Christenson v. Eno 315, 874, '898, ,901, 903, 1024 Christenseh v. Colhy • 910 Christensen v. 111. & St. L. Bridge Co ; 798 Christensen v. Quintard. 898 Christensen v. Eno... — 901 Christmas v. Biddle. 566 Christian v. Am. F. L. & U. Co., 108 Christian College v. Hendley 333 Christian Jensen Co., In re '. Il80 Christian Univ. v. Jordan 821 Christian Union v. Yount . . 98; 104, tl9 Chuhh v. Upton. . '. 352, 800, 925 Church v. Manfield.. 1064 Church V. Pickett ..;...';.;...... 5.") Church V. Sterling 371- Church of Latter Day Saints \. United States 1197, 1209 Chynoweth's Case - 506 Cicotte V. Anciaux 700 Cincinnati Assur. Co. \. Rosen- thal i 108 Cincinnati, C & C. U. Co. v. Keary 1067 Cincinnati, etc., R. R. Co. v. ■ Danville, etc., R. R. Co. ....... .107 Cinn. H. & N. R. Co. v. Clifford, 1109, lJll.-> Cincinnati, H. »2, 8.5.') City of Chicago v. Taylor 290 City of Concord v. Concord Horse R. K , 7'") City of Covington v. Bridge Co., 4f«, 075, 860, 1200 City of Davenport v. Peoiia, etc.. Co .....; 148 City of Detroit v. Daly 280 City of Denver v. Mullin 69 City of E. Dalles v. State 1 114 City of Elniira T. Maple Ave 7f> City of Gr. Rapids' v. G. R. Hydr. Co •.; 1201 City of Grand Rapids \'. Grand Rapids & I. R. Co. . In re 293 City of .Joneshoio' v. Cairo, etc., R. R.Co 319 City of London v. Wood. 14:! City of Louisville V. University of Louisville . . i 10 City of Lynchburg v. Slaughter. 319 City of Memphis v. EaiTington. . 1284 City of Memphis v. Memphis Gas Co '.■:. Sl'4 City of Milwaukee v. Hoelfler .... 1277 City of New Vork v. Bailey 848 City of Ohio v. Cleveland, etc., 1!. K. Co 672 City of Oniaha v. Kramer 294 City of Ottawa v. Carey 319 City of Savannah v. Hancock, 281 279 City of St. Louis v. Bell Tel. Co., 1231 City of St. Louis v. Shields 69 City of St. Louis v. VV(;stern t[nioh Tel. Co : . . 1208 City of Natchez v. Mallory 862 City of Philadelphia v. Ridge Av. R. Co 31,5 City of Wilkes Barre v. MJyoming Hist. & Geolog. Soc. . . "... 231, 283 City of Wheeling v. Mayor 704 City & County of San Francisco v. Baldman 1248 City & County of San Francisco v. Flood....... 124S City & County of 'Siin Francisco v. Liverpool L. & G. Ins. Co 1183 City & County of San Frandsco v. Philan '. 1248 City & County of San Francisco v. Sharon 1248 City of Zanesville v. ZanesvlUe Gas. L. Co .57 Clalliu V. Housfsman 603 Claiborne County v. Brooks 827 PAGE. Clancy v. Onondaga Fine Salt Co. 1.39, 1101 Clapp V. Clapp 994 Clapp V. Peterson 183, 18.5, 916 Clark V. Barnard Ill Clark V. Bever .559, 901 Clark V. De Moines 320 Clark V. Farrington. .. 337, 369, 880 Clark V. Edgar 723 Clark V. Hancock ' 323 Clark V. Janesville 32 1 Clark V. Jones 26, 54 Clark \ . Lecren 440 Clark V. Lowell 2.57 Clark V. Miller 275 Clark V. MonogahelaNav. Co. 926, 1205 Clark V. People 1118 Clark V. Pratt 198 Clark V. Thomas 925 Clarkv. Tuner 858 Clarke v. Continental Imp. Co.... 340 Clarke v. Dickson 890 Clarke v. Hart. 6.57 Clarke v. Lincoln Lumber Co 878 Clarke v. Phil., etc., R, R. Co. . . . 1269 Clarke v. School Dist , 2(i Clarke y. Thomas 349 Clarrisy v. Metrop. Fire Dep't. . . 25 Clarkson v. Clarksou, 475, 490, 495 497 Clarksou, In re 1161 Clay v. Towle 80, 465 Cleary v. Delierseline 1108 Clearwater v. Meredith.. .115, 117, 118, nil. 1157. 1159, 1177, 1180, 1205, 1207, 1283 Clegg v. Hamilton Co 933 Clements v. Bowes 938 Cleve v. Financial Corp 422 Cleveland v. Burnhara 916 Cleveland, etc., R. Co. v. Robbins, 514 Cleveland, etc., R. R. Co. v. Tap- pett ;540 Cleveland Iron Co. v. Ennor 361 Cleveland, etc., R. R. Co. v. Rob- bins mn Cleveland & P. R. R. Co. v. Speer. 284 Clews V. Bardon 46:'> C;iews V. Woodstock Iron Co 605 Clinch V. Financial Corp J 14, 706 Clippinger v. Hepbaugh 1S2 Clive V. dive 494 Close V. (ilenwood Cemetery, 65, ,^ 69, 928, 1202, Il'0.5 Clunie v. Sacramento Lumber Co. 839 Coalfield Coal Co. v. Peck. . . 799, 916 Coates V. Donnell 1137 Coats V. Nottingham 670 Coast L. R. Co. v. Savannah, 1270, Cobb V. Prell 532 Coburn v. Ames 942, 997 Cockburn v. tin. P.k ' 733 TAKLK OF CASES. xli PAGE. Cockerell v. Tan Dieman's Land Co 086 Cochrane v. Chambers 5:i9 Cochrane v. Cochrane 573 Cochrane v. Ocean Dry Dock .... 910 Coddv. Eathbone 17 Coe V. Brown 172 Coe V. Columbus, etc., R. li. Co., 152, 158, 169, 807 Coe V. Washington Mills 751 Coffin V. Chicago & N. , etc 554 Coffin V. Ramsdell 881, 901 Coffin V. Ramsdell 874 Coffin V. Reynolds 10.33 Coffin V. Rich 367, 1012, 1015 Cogswell V. Cogswell 495 Cogswell V. Ball 710 Cogswell V. Bull 689 Cohen v. Grayson 5.36, 6.J0 Coit V. N. Car. Gold Amal. Co., 879, 881, 885, 887, 895, 901, 902 Coil V. Pittsburg Female College, 1056 Colbert v. Eankin 1068 Colderwood v. McCrea 532 Cole V. Cunningham 103 Cole V. Frost 243 Cole V. Ryan 326, 500 Coleman v. Coleman 932, 9.34 Coleman v. Knightg of Honour, 391, 592 Coleman v. Rice 1064 Coleman v. San Raphael Turnp. Co 225 Coleman V. Waller 678 Coleman v. West Va. Oil, etc, Co. , 213 Coleman v. White, 918, 920, 1029, 1031 Coll V. Pittsburg Female College, 1056 Collins V. Chicago 1256 Collins V. Godfrey 472 Collins V. Sherman 85, 87 Colman v. Easterri Counties Ry. Co 697, 709, 716 Colorado Cent. R. Co. v. Allen. . 294 Colorado Cent. R. R.Co. v. Ogden, 1067 Colorado E. Ry. Co. - v. Union Pac. Ry. Co 268, 277, 28 1 , 284 Colo. I. W. V. S. G. Min. Co. 106, 107 Colorado Iron-Works v. Sierra Grande Min. Co 609 Coltv.Clapp S30 Coltv. Ives 510, 652 Colt V. Owens 651 Colt V Wallaston 938 Coltham v. Eastern Counties Ry. Co 534 Colton L. & W. Co. V. Raynor 928 Colton V. Mississippi Boom Co.... 38 Colton V. Stanford 409 Columbia Bank v. Jackson 58, 59 Columbia Co. Lever Co. v. Meir, 406 Columbia Elec. Light Co. v. Dixon "^80 Columbus, etc., R. R.Co. v Powell, 127 PAG 10. Columbia F. Ins. Co. v. Kinyon... 395 Columbia Ins. Co. v. Buckley 596 Columbus Pigua & 1. R. Co. v. I. B. R. Co 1104 Columbia, etc., Co. v. Dixon 801 Columbus, etc., Ry. Co. v. Powell. 128 Colvin, In re 996 Combe v. Brazier 2.')4 Combs V. Smith 981 Comer v. Gray 979 Comet Consolida,ted Min. Co. v. Frost 609 Common v. Bridgewater Min. Co. 1075 Commercial Bank v. Canal Com- missioners 1009 Commercial Bank, v. City of lola, 320 Commercial B'k. v. Hughs 261 Commercial B'k v. Lockwoorl, 807,811, 1160 Commercial B'k V. Pfeiffer 68 Commercial B'k v. State 1119, 1193 Commercial,etc., B'k v. Kortright. 5.54 Commercial Ex. Bk. v. Cumber- land Coal Co 820 Commercial Bank of Buffalo v. Kentright 428, 512, 528 Commercial B'k. of Natchez v. Chambers.... 1160,1162,1164, 1165 Com. Fire Ins. Co., In re 987 Commeyer v. United, etc., German Ch 4.50 Commissioner v. Beckwith 28(1 Commrs. V. Essex 1197 Commrs v. Gherky 25 Commissioners v. Holyoke Water Power Co 1211 Commissioners v. Smith 807 Commissioners v. Thayer 323 Commissioners of Knox County v. Aspinall S48 Commissioners on Inland Fish- eries V. Holyoke Water Power Co 87, 120.=),'1215 Commissioners v. Lehigh Coal, etc., Co. l-6:i Como V. Port Henry Iron Co 1058 Commonwealth v. Ahem 1094 Commonwealth v. Alleghany 1088 Commonwealth v. Alleghany Bdg. Co 1109 Commonwealth v. American B'k, 1108 Commonwealth v. Am. Bell Tel. Co 107 Commonwealth v. Am. Dredging Co 12.54 Commonwealth v. Anison 1094 Commonwealth v. Arrison 1110 Commonwealth v. Atlantic, etc., R. Co 1115 Commonwealth v. Birchett 1075 Commonwealth v. Bird 1183 Commonwealth v. Boston & A. R. Co 489 xlii TABLE of" cases. PAOE. Commonwealth v. Bringhurst,420. 421, ,428 Commonwealth v. Bunnell 1108 Commonwealth v. Cain 1094 f!ommonwealth v. Carroll 54 Commonwealth v. Central Passen- ger R. R : 85 C'ommonwealth v. Chesapeake & O. R. Co 1281 < 'ommon wealth v. Cluley 1075 Commonwealth v. Commercial Bk. 1089, 1114, 1115, 1124 Commonwealth v. Conover 407 Commonwealth V. CorchitateB'k, 1191 Commonwealth v. Cullen 1152 Commonwealth v. C. & O. E. R. Co 1253 Commonwealth v. Detwiler, 403, 420 441, 450 Commonwealth v. l)unbar Fur- nace Co 1262 Commonwealth v. Erie & N. E. R. Co 77,79,87, 272 Commonwealth v. Essex Co 120 Commonwealth v. Farmers' B'k, 1108 Commonwealth v. Farmers & Mechanics' Bank 1193 Commonwealth v. Fayette Comity R. R. Co 1201 Commonwealth v. Fowler 1094 . 1108, 1129 Commonwealth v. German Soc. . . 726 Commonwealth V. (xiU..... 1118, 1124 Commonwealth v. Gloucester.Ferry Co 1247 Commonwealth v.. Graham ... 1094 GomTnonw^alth v. Green. . ., 26 Commonwealth V. Guardians of the Poor 583, 5''7 Commonwealth v. HamDton Mfg. Co 1241, 1249 Commonwealth v. Hulings ; . 1084 Commonwealth Ins. Co. v. Monin- ger 778 Commonwealth v. Intoxicating Liquors 1221, 1241 Commonwealth v. James River Co 1084 Commonwealth v. McCloskey 1075 Commonwealth y. Montgomery L. &Z. M. Co 1253 Common wealth ,v. Murry 1094 Commonwealth v. New. Bedford Bridge Co 1178 Commonwealth V. New York P. & O. R. Co 604 Commonwealth v. N. Y. L. E. & W. Co 101, 225, 2.S4 Commonwealth v. Nickerson 79 Commonwealth v. North Pa. R. Co .:.. 1259 Commonwealth v. Penn ... ■ 586 Commonwealth. V. Phil..' & K.. iC. .,. ! &1. Co 1276 PAGE. Commonwealth v. Philanthropic Soc 579 Com. V. Un. League 583 Com. V. Lehigh Val. R. Co. . .... 1268 Com. V. Lexington, etc, 'Turnp.. 1108 Com. V. Luscomb.-. . .■.-... ....... 12.38 Com. V. Lykens..... 1092 Com. V. Lykens Water Co.. 1091,. 1107 Com. V. Phoenix Iron Oo 733 Com. V. Pittsburgh, ietc., R. R. Co. 491, 10S8, 1107, 1167, 1216 Commonwealth v. Pittsburg) 124 Com. V. Proprietors of New Bed- ford Bridge Co 1202 Com.v. l^eading Sav. Bank 209 Commonwealth v. Rosseter. ..... 1000 Com. V. R. R. Co 1268 Com. V. Smith 140, 170, 173 Com. v. St. Patrick Benev. Soc... 441,579, 581 Com. V. S; & D. R. Co 162 Com. V. Tel. Co 1248 Com. V. Turner 431 Com. V. Union Ins. Co 1108, 1094 Com. \'. Union League of Phila. ' 580, 586 Com. V. Watmouth 562 Com. V. Weatherbee 1079 Com. V. West Chester R. R. Co... 24 Com. V. Woelpper 430, 433, 445 Com. V. Woelfer 1094 Compton V. Railroad Co 432 Compton V. The Chelsea 541 Compton V. W. St. L. & P. R. Co. 162 Comstock, Re 100, 108 Conant v. Reed 541, 543 Conant v. Van Schaick 1028 Coiiaht v.. Seneca Co. Bank 529 Conant v. Seurce Co. Bank... 522, 544 Concord v. Portsmouth Sav. Bank .^21, 346 Concordia Cemetery Ass'n. v. N. W. R. Co 276, 292, 293, 296 Conductor's Assn. v. Birnbaum... 895 Cone's Exrs. v.Russell 409 Congdon v. Winsor 880, 1023 Congregation Beth. Elohim v. ' Centr. Presby. Church 256 Congress & E. Spr. Co. v. Knowl- ton 863 Conklin v. Farnham 1028 Coivklin v. Sec. Nat. Bank 509, 518 Conkling v. Washington Univer- „s''y 144 Connecticut, etc., R. R., Co. v. Bailey.. ..327, 342, 361, 642, 678, 679 Connecticut L. Ins. Co. v. Luch*; 772 Connecticut River Mut. Fire Ins. Co. y Way 108, 778, 784 Connelly v. Davidson 47a Connelly v. Peck g^g Connor v. Robinson. ; . 532 Conover v. Mut. Ins. Co '. 201 f onrad' V. Atlv Ins. Co. 1 174 TABLE OF CASES. xliii PAGE. Conro V. Gray 802, 955 Conroy v. Port Henry I. Co 702 Conservator v. Ash. , 12 Consolidated Channel Co. v. C, P. R. R. Co 281 Consolidated , Tank Line Co. v. Kansas City Varnish Co 944 Consols. Ins. Co. v. Newhall 337 Continental ISTat. Bank v. Elliott Nat. Bank 512, 563 Continental National Bank v. Folsom 603 Continental Nat. Bank v. Weems, 1166 Continental L. Ins. Co. v. Kessler. 778 Continental Life Ins. Co. v. Pal- mer ' 388 Continental Tel. Co. v. Nelson. .. 901 Continental T. Co. v. Valentine, 363 Contocook Valley R. R. Co. v. Barker .763, .365 Contra Costa R. R. Co. v. Moss... 282 Converse v. Blumrich 1055 Converse v. Hood 408, 648, 665 Conway, Ex parte 1137 Copeland v. Citizens' Qaslight Co. 702 Copeland v. Johnson 466 Coppage V. Hutton 334 Copper V. Jersey City 827 Coppin V. Gremlers 184 Cook V. Chittenden 876 Cook V. Corthell 161 Cookv. Detroit, etc., R. R. Co... 807, 811 Cook V. South Park Conimrs 275 Cook V. St. Paul. ., , 1068 Cook. County v. School. 925 Cooke V. State Nat. Bank 196 Cooke V. Orange 966 Cooke.v. U. S 827 Cooley V. Board of Wardens, etc. , 1241 Coomes v. Burt 33 Coon y. Plymouth P. R. Co 1118 Cooper V. Canal Co 564 Cooper V. Frederick 186, 888 Cooper V. Welb 938 Cooper Mfg. Co. v. Ferguson 107 Coquard v. Bandergjist 910, 923 Coquard v.* Marshall 429 Corbett v. Woodward .417, 459, 465, 796 Corcoran v. Snow Cattle Co.... . . . 195 Cordon v. Universal Gas Light Co. 509 Cordova Coal Co. v. Long 625 Corey v. Chicago B. & K. C. Ry. Co.. , 297 Corey v. Curtis , . . 419 Corey v. Long 942 Corey v. L. &E. R. R. Co....... 494 Corey y. Morrill 68 Corfiejd v. Cornell 441 Cork, etc., By. Co. v., Cazenoe. . . 325 Cork, etc., Ry. Co., L. R., In re, 183, 849 PAGE. Cormac v. Western 549 Cornack v. Bronze Co 558 Cornack v. Western White, etc., Co 515 Cornean v. Guild Farm Oil Co. . . 562 Corn Excli. Bank v. Cumberland Coal Co 456 Cornick v. Richards 511, 550, 554, 563 Corning v. McCullough 1 013 Corp. of Sons of Clergy v. Mose... 251 Corry v. Londonderry, etc.. By. Co 676, 860 Cory V. Lee 69 Cornell's Appeal. . . 351, 359, 360, 918, 920, 953 Cornell V. Corbin 929, 940 Cornell v. Roach 1045 Cornell v. Utica, etc., R. R. Co., 809 Cortes v. Thannasuer 742, 746 Cornwall v. Eastman 1039, 1042 Cornwall v. Louisville & N. B. Co 272 27*-* Corwith V. Cuiver. ..'.'. .' 344, 357, 362 Cosgrove v.Howland 1124 Costigan v. Michael Tp. Co 839 Cotter V. Doty 442 Cotting V. N. Y. & N. E. R. R. Co. 674 Cotton Oil Co. V. Wemple 124S Coulee Lumber Co. v. Ripon L. », 965 Cia-tis V. McCuUoch 419, 725 Curtis V. Mutual Ben. Life Co.... 756 Curtis V. Hurd 646 (Bushman v. Brownlee 120 Cushman v. Fmaiiy Fund Soc. .. 785 Cushmaa v, ;^epheravies v. Dunc(in Davies v. Fowler Davies, etc., L. Co. v. Gottschalk, Davies v. New York PonbertCo. . Davies v. Proprs., etc Daviess County v. Huidc^open.... Davidson v. Associates of Jersey Co 1138 1045 1059 34 216 1182 638 351 280 650 875 286 272 101 1138 519 549 925 95 847 393 890 931 838 1180 1114 457 1174 240 .506 1260 706 98:5 572 1191 195 859 321 718 xlvi TABLE OF CASES. PAGE. Davidson v. Gilliss 479 Davidson V. Grange 703 Davidson v. Holden 27, 750, 928, , 931 Davidson v. Knox ^ 27 Davidson v. New Orleans 34, 1261 Davidson v. Old People's Mut. Ben. Soc 767 Davidson v. Kaiikin....l016, 1014, 1016 Davidson's Case .361, 679, 891 Davidson v. State 1094 Davidson v. Tallocli 721 Davidson v. Westchester Gaslight Co 78, 200, 850 Davis V. Bank of England 513, 567, 582 Davis, etc., W. W. Co. v. Davis, etc., W. Co 616, 617 Davis V. Doud Pottery Co 1138 Davis V. Essex, etc., Soc 662 Davis V. E. T. & Ga. A. R. E. Co. 306 Davis V. Gemmell 210, 466. 681, 688, 816, 817, 921 Davis V. Gray 1272 Davis V. Haycock — , 548 Davis V. Jackson, 475, 495 Davis V. The Mayor of JTew York, 707, 1236 Davis V. Memphis, etc., E. Mo.... 1162 Davis V. Montgomery, etc., Co.... 881 Davis V. Old Col. E. Co . . . .77, 83, 848, 862 Davis V. Rock Creek L. F. M. Co. 222, 465, 466 ■ Davis V. Sec. Un. Meeting House, 80 Davis V. Smith 261 Davis, V. Stevens 663, 909 Day V. Ogdensburg & L. C. R. Co. 181, 11.58 Day V. W. N. & R. R. Co 126 Day V. Croft 992 Day V. Mill Owners' West F. Ins. Co.. 4.5, 810 Day V. Postal Tel. Co 967, 1131 Dayer v. Rathbone 818 Dayton y. Borst 874, 875 Dayton, etc., Co. v. Coy 329, 330 Dayton, etc., R. R. Co. v. Hatch, 27, 358, 1206 ' Dayton Nat. Bank v. Merchants' Nat. Bank 510 Dawe'sCase 812, 892 Dawkins v. Antrobus 581, 58S1, 591, 593 Deaderick v. Wilson 687 Dean v. Biggs 799, 870 Dean v. Davis 26, 34 Deanv.DeWoIf 1033 Dean V, Sullivan E. R. Co 307 Dean v. Whitory 1028 Deane v. Test 573 Deivnsville Cemetery Ass'n., Re... . 279 PAGE. Dearborn v. Park 127 De Bemer V. Drew 958 De Buol V. Freeport & M. R: Ry. Co 297, 29S De Camp v. Alward.. 457, 1152 De Camp v. Miss. & Missouri R. E. Co , .. 281, 1064 Decatur County v. Humphreys. i.-. 286 De Caumont v. Bogert 574 Decker v. Gardner 982 Decker v. B. & New York Ey. Co. 1240 Decombes v. Wood 405 Dedham Inst, for Savings v. Slack, 216, 590 Deems V. Albany v. Cahawba Nav. Co.. ..542, 545 Duke V. Markhkm...l93, 196, 793, 831 Dulany v. Middletown 2.39 Dullman T. Wilson 1116 Dummer v. Pitcher 574 Duncuft V. Albrecht .567 Duncan v. Jaudan 5.38 Duncan v. Jones 29 Duncomb v. Railroad Co 467 Dunham, etc., Co., In re 461 Dimham v. Isett 173 Dunham v. Rochester 433 Dnnkerson, In re 517 Dunlap V. Dunlap 522 Dunn V. Brown Agr. Soc. .31, 32, 148, 847 Dunn Y. Cora 567 DunnoYan y. Green 322 Dunphy y. TraY. Newsp. Assii . . . 666, 688. 713 Dunsten v. Hoptonie 918 Dunstan v. Imperial, etc., Co. 370, 4.54, 445 Duntz V. Duntz 26 Dupee Y. Water Power C;o 185 Dupes V. Swigert 10.34 Dupont Y. Tilden 90l Duquesne Club y. Penn. B'k 94 Durand v. New Haven, etc., Co. 1211 Durant v. Burt 5.30 Durant v. Kennett 616 Durfee v. Old Colony, etc., R. R. Co 403, 098 Durham & N. Ry. Co. \. Rich- mond & D. R. Co 277 Durham & N. R. Co. v. Trustees of Bullock Church 293 Durham's Case 1021 Durian v. Central Verien 384 Dutenhoffer y. Adirondack, etc., R. Co 46 Dulcher v. Marine National Bank 1021 Dutchess & C. C. F. Co. v. Mab- bett 72, .309, 327 Dutton Y. Com. B'k 563 DuYal V. Goodson. . 382, 384, 387, 388 Duverger v. Fellows 28 Dujrkendall v. Miles 1031 Dwight V. Boston '. 12.50 Dyer v. Grand Trunk R. R. Co. ^ 230, 2.57 Dyer v. Osborne 1250 E gag e Woolen Mills v. Monteith, 466 Eagle Works v. Churchill 56 Eakins v. Am. White Bronze Co. 470 Eakright v. L. & \. I. R. R. Oo. 631 TABLE OF CASES. xlix Eakriglit v. Logansport R. Co.. 47, Ail, 342 Eames v. Doris 1032 Earl of Liiidsey v. 6t. Nortlieni Ky 741 Earl Powley v. Herbert 538 Earl of Shrewsbury v. Xorth, etc., Ry 741 Earnest v. VV. W. Co 40,; 50 Earnshaw v. Sun Mut. A'ld Soc. 754, 755, 759, 769 Earp's Appeal 489, 495, 496 East Anglican Railroad Co. v. Eastern Counties R. R. Co., 152, 156, S54 East Boston F. K. Co. v. Hubbard 1197 East Birmingham Land Co. v; Dennis .'■>70, f Field V. Jones 'M; Field V. Schiefflin. 537 Fielden v. Lancastershire, etc., Ry. Co S59 Fifth Ward Sav.: Bank v. First Nat. Bank 74, 80, 195, 216, 822 Fifth Nat. Bank v. Navassa Phos- phate Co 825. 832 Fildenv. Lancastershire. etc.. Ry^ Co ;....;.... 674 Filder v. London, etc., Ry. Co.... 698 Filon V. Brewing Co 148, 455 Fine v. Hornsby 567 Finch V. Riverside & A. Ry. Co... 76, 222 Finney's Appeal 51 1, 553, 502 Fire Dept. v. Kip 55 Fire Department v. Noble .... 105, 1247 Fire Ins. Patrol Co. v. Boyd 251 Fire Ins. Co. v. Felrath 775 Fire Ins. Co. v. Lortwell 424 Fireman's Ins. Co. v. Mayor, etc., 999 First Bap. Church v. Branham. . . 65 First fiapi Soc. v. H««en 233 First Meth. Epis. Church v. Fil- ,.kins.. 255 First Nat. Bk> V. Almy 933 First Nat. Bk. v. Armstrong 818 First Nat. Bank v. Burch. ...... 608 First Nat, B'k v. Christopher 837 TABLE OF CASES. liii PAGE. Krst Nat. B'k v. City of Richmond 1258 First National Bank v. C. B. C. W. W. Co 196, 216 First Nat. Bank v. Davies 9-32, 933 First Nat. Bank v. Drake... 410, 473, 822 First Nat. Bank v. E. T. Barnum Wire & Iron Works 996 First Nat. Bank v. Fancher 1250 First Nat. Bk. v. Fricke 822 First Nat. Bank v. Gifford....428, 542, 549 First Nat. Bank v. Graham 1062 First Nat. B'k v. Greene 918 First Nat. B'k v. Gustin M. Co. 882,889, 1015 First Nat. Bank v. Hartford Ins. Co .')25 First Nat. Bank v. Hendrie 359 First Nat. B'k v. Hingham Mfg. Co 907 First Nat. Bank v. Hoch 210 First Nat. B'k v. Hurford 646 First Nat. Bank v. Lucas 210 First Nat. B'k v. Mason 261 First National Bank v. Meredith, 1256 First Nat. B'k v. Morgan 602 Fir^tNat. Bank v. National Exch. Bank 189 First Nat. Bank v. Oskaloosa P. Co 5.32 Fh-st Nat. Bank v. Overman 603 First Nat. Bank v. Salem F. M. Co 184,185,217,4.55, 816 First Nat. B k v. Smith 920 First Nat. B'k v. Strang 801 First Nat. Bank v. Price 103S First Nat. B'k's Appeal 793 First Parish v. Cole 5 Firtsam v. Hay 151 Fisclier V. Mellen 1055 Fishbeck v. Phoenix Ins. Co 839 Fisher v. Andrews 667 Fisher v. Brown 651 Fishery. Bush 140, 410 Fisher v. Essex Bank 410. 412, ■ 509, 563 Fisher v. Evansville, etc., R. R. Co 358 'Fisher v. Fisher 554 Fislier v. Jones 50.5, 562 Fisher v. Kane 4S2 Fisher v. Keene 583 Fisher v. Miss. & Tenn. R. R. Co. 635 Fislier v. New York Central, etc., R. R. Co 122 Fisher v. Raab 584 Fishery. Seligman 550, 901 Fishkill Sav., etc., y. National Bank, etc 1049 Fishmongers' Co. y. Robertson.... 849 Fisk V. Central Pac. R. R. Co. . .'. 1068 Fisk V. Chicago R. I. & Pac. R. R. Co in, on PAGE. Fisk V. Eq. Aid Union .392 Fisk V. Patton 156 Fisk V. Un. Pac. Ry. Go 802, 1161 Fitch V. Lewiston S. M. Co.. .219, 831 Fitch V. Popular Flat I. S. & S. L. Tp. Co 30 Fitzburgh v. B'k 0.54 Fitchburgh R. H. Co. v. Grand Junction R. R., etc 1211 Fitchburg Sav. Bank v. Torrey, 542, 54."> Fitz V. Muck 584, .585 Fitzgerald v. Eq. Ijeserve Fund L. Ass'n 758, 776 Fitzgerald v. Missouri Pac. Ry. Co 94, 121, 617 Fitzgerald & Mallory Const. Co. V. Fitzgerald 212, 471 , 605 Fitzhugh V. Franco-Texan Land Co 826 Fitzpatrick v. Dispatch Pub. Co. 672 Fitzpatrick v. Woodruff .533 Flagg V. Baldwin 530, 532 Flash V. Conn 1014, 1016, 1017 Fleckner v. Bank of United States, 451 Fleming y. Alter 12T Fleming v. Northampton Nat. B'k .551 Fleming v. Hector. 399 Flesson v. Savage S. M. Co 371 Fletcher, Ex parte 892 Fletcher v. N. Y., etc., Ins. Co... lOt Fletcher v. Peck 1174, 1176, 1197 Fletcher's Case 657 Flike v. B. & A. R. R. Co ; ... 1067 Flinn y. Bagley 900,898, 90S Flint v. Boston 1267 Flint, etc.. Plank Road Co. v. Woodhulf 1216 Flint v. Pearce 431, 436 Flint & P. M. R. Co. v. Board of Railroad Crossings 280 PliTit & P. M. R. Co. y. Detroit & B. C. R. Co 293, 296 Flitcroft's Case 462 Florida M. & G. R. Co. v. Va- nedoe! 455, 830 Flour City National Bank v. Wechselberg 1014 Flournoy v. First Nat. Bank 92 Flynn v. Mass. Ben. Assn 773 Foard v. McComb 1055 Foewman v. Bigelow 881 Foggy. Blair 840 Fogg y. Boston & L. R. Co 1058 Polman's Appeal 391, 376 Foram v. Howard Ben. Assn 720 Forbes v. American Mut. L. Ills. Co 778 Ford V. Delta & Pine Land Co. . . 45 Ford y. Johnson 694 Foreman y.-BigeJow 889, 905 Forest v. Manchester, etc., By. Co. 697, 698 liv TABLE OF CASES. PAGE. Port Edward, etc, E. R. Co. v. . North S4.T Fort Edward, etc., Co. v. Payne.. 358 Fort Madison Lumber Co. v. Ba- tavian Bank 515, 563 Fort North & N. O. Ry. Co. v. Pearce 294 Fort Worth Pub. Co. v. Hettson, 210, 402 Fort Scott W. &. W. Ey. Co. v. . Fox.. ... 290 Fort St. Union Depot Co. v. State Railroad Crossing Board. 286 Fort W. & G. Ry. Co. v. Jennings, 289 Fortler v. Bank 109 Fosdick V. Schall 161, 988 Fosdick v.. Sturglss 671 Fosdick V. Town of Plempstead. . . 2,38 Foss V. Harbottle 701, 738, 689 Foster V. Clifeord... 818 Foster v. Essex Bank, 1160, 1064, 1062 Foster v. Mackinnon 838 Foster V. MuUanphy P. M. Co.... 455 Foster v. Pattee , 555, 564 Foster v. White 732 Fouchard v. Fouchard 848 Foulke V. San Diego & R. E. Co., 183 Four Mile Co. v. Bailey 642, 902 Fourth National Bank v. Frank- lyn 1016, 1017 Foushee v. Grisby 10-32 Fowle V. Ward 552 Fowler v. State 1120 Fox V. AUensville C. S. & V. T. Co 350 Fox V. Horan 1160* 1163, 1165 Fox V. Sandford 1066 Fox V. Union Acad .., 255 Fox's Case 422,- 891 France v. Clark 552 Francis v. N. Y. & B. El. R. R. Co. 574, 724 Franco Texas Land Co. v. Laighle, 415 Frank v. Denver & Pu 6. R. R. Co. 164, 167 Frank v. Dunkhair 616 Frankle v. Jackson 981 Franklin Bank v. Commercial Bank 77 Franklin Ben. Assn. v. Com 580 Franklin Bridge Co. v. Wood. . . . 21 Franklin v. Armfield 248 Franklin, etc, Turnp. Co. v. White 327 Franklin Co. v. Lewiston Sav. Bank 8, 9, 84, 190, 848, 862 Franklin V. Com 726 Franklin v. Twogood 926 Fraser V. Charleston 512, 562 Fraser v. Whalley 704 Fravser v. Richmond & A. E. R. . Co 180 Frazer v. .Phoenix M. L. Ins. Co. 773 PAGE. Frazier v. E. T. V. & G. R. Co., 155, 162, 168 Frazier v. Wilcox 80, 100 Frederick v. Augusta 320 Fredenhall v. Taylor 27 Freedraan'sSav. Co. v. Shepherd, 180 Freehold Mut. Loan Ass. v. Brown 1215 Freeland v. McCulloch 916 Freeman v. Machais, etc., Co.. ... 416 Freeman v. National Ben. Soc... 754 Freeman v. Stine 1069 Freeman v. Society ■. -774, 775 Freeman v. Winchester. . 655 Freeman's Assignee v. Stine; .... 901 Freemantel v. Matlock 360 Fremont E. & M. V. R. Co. v. Meeker 294, 297 French Bank Case 694, 697, 946, 955, 956, 1149 French v. Currier 537 French v. Fitch 645 French v. Gifford 960, 993 French Spiral Spring Co. v. N. E. Car Trust 192 French v. Teschemacher, 367, 884, 1021 Freon v. Carriage Co 545 Fresno Canal & Ir. Co. v. Warner, 54, 65, 68, 928 Fresno Nat. B'k. v. Sup. Ct 603 Freundlich's Case 988 Friend v. Powers 1029 Frier v. Peacock ■ 240 Friezenv. Allemanial Ins. Co 608 Fritz V. Muck 432 Frittz V. Palmer 109, 603 Froehly v. North St. Louis Mut. F. Ins. Co 770 Fromm v. Sierra Nevada Silver Mining Co 651 Frost v. Belmont 182 Frost V. Clarkson 532 Frost Mfg. Co. V. Foster 1036 Frost V. Walker. . .-. 27, 69, 935 Frue V. Houghton 547 Frys V. Lexington, etc., R. R. Co. 38, 326, 350, 1213 Fulgan V. Macon, etc., R. E. Co. 51.-), 884 Fuller V. Baltimore, etc., Emp. Eel. Assn 769 Fuller V. Dame 182 Fuller V. Fitzgerald Equitable Ace Assn 754 Fuller V. Jewell 1067 Fuller V. Ledden 1014, 1016 Fuller V. Linzee 7t'2 Fuller V. Miller 470 Fullerton v. Mobley 554 Fulton B'k. V. N. Y. & Sharon CanalCo 835, 838 Fuller V. Plainfield Academic School •. IJ7 TABLK OF CASES. Iv PAOK. Fuller V. Rowe 935, 9o6 Fuller's Will, In re 239 Fnsz V. Spaunhorst. . . SOI, 1036, 1055 r,aff V. Flasher 68, 70, 909, 1165 (Jaif V. Greer 400 Gaff V. Winchester College... 329, 3.30 Gaffney v. Colville 1040 Gaines v. Coates 85 Gainsborough & jST. C. J. Tp. Co. V. Strattoii 466 Galatin v. Bradford 437 Gale V. Eastman 1015 Gale V. Troy & B. E. Co 126 Gale V. Townsend 750 Galena & Chicago Un. R. R. Co. T. Menzies ISl Galena, etc., R. E. R. Co. v. Loomis 1232 Galena &S. W. E. Co. v. Fnnor, 642 Gallego v. Atty.-Gen 247 Gaits Exrs. v. Swain 354 Galveston R. R. Co. v. Cowdrey, 161, 219, 417 Galveston Hotel Co. v. Ralton . . . 352 (ialway v. United States Steam Sugar Refining Co I)."i0 Gamble v. Queens County Water Co 155, 369, 408, 693 Garden Gully, etc., Co. v. Mc- Lister f,.-,S Gardner v. Berry 12T2 Gardner v. Butler 4(iiS Gardner v. Preemantle 584. 591 Gardner v. Hamilton, etc., Ins. Co J14 Gardner v. James 116 Gardner v. London & D. Ey. Co. 155, 170, 176 Garland, Ex parte 143 Garnett v. Richardson 932, 934 , .545 Gilbert v. R. R. Co •. 988 Gilbert v. Wasliington City A- G. S. R. R. Co 180, 973, 988 Gilbert El. K. Co., lie 22 Gilbert's Case 520, 695 Gildart v. Gladstone 87 Gilfillau V. Union Canal (Jo 1192 Gilkey v. Paine 492 Gill V. Balis 878 Gill V. Bates 184, 361 Gill V. Kentucky & Col. G. S. M. Co 100, 331 Gillan v. Morrison 603 Gillespie V. Commercial, etc., Ins. Co HIT Gillespie v. Gaston 1251 Gillett V. Moody. . . 187, 797, 969, 977 Gillett V. Xew Market Sav. Bk. . . SIS Gillet V. Phillips 9()9 Gillis V. Bailey 207, 209 Gillman v. Hamilton 248 Gilman v. [11. & M. Tel. Co 180 Gllman v. Lockwoort 1 179 Gilman v. Sheboygan 320, 1246 Gilman v. Sheboygan, etc., R. R. Co 807, 811 Gilman V.Phil 1241 Gilman, etc., R. R. Co. \. Kelly, 832, 834 Gilmer v. Lime Point. . . 3.3, 271, 272 Gilmore v. Lycoming F. Ins. Co. 778 Ginger, Ex parte 890, 1054 (rilpin V. Howell 553 Gilroy v. Com 1110 Gilson V. Dayton 323 Girard Co. v. Board of Revision, 1252 Gi'rard v. Philadelphia 243, 244 (riven V. Wisconsin O. F. M. L. Ins. Co. 388 Given's Appeal •■>75 Gladding v. Gladding 391 Glamorganshire, etc., Iron Co. \. Irvine 10-56 Glaser v. Priest 74 (ilass V. Tipton 5 Glaisier v. Rolls 477 ( Jlen v. Breraid 935 (Harm v. r;labaugh 316, 634 Glenn v. Dodge 1147 Glenn v. Dorslieimf'r,870, S71, 922, 1 144 PAGE. Glenn v. Foote 922 Glenn v. Garth S7S Glenn v. Hatchett 885 Glenn v. Howard 634 Glenn v. Liggett 875, 918, 922 Glenn v. Macon 970 Glenn v. McAllister's Exrs. . .878, 922 Glenn v. Orr 878 Glenn v. Saxton 922, 1147 Glenn v. Semple 923, 1147 Glenn v. Soule 1144 Glenn v. Sumner 917 Glenn V. Williams 921, 1144, 1147 Glenn Iron Works, Re 876, 898, 90O Globe Rolling Mill v. BaU.ou 1145 Gloninger v. Pittsburgh A: C. R. Co 40S Goddar.1 v. Merch. Exch 440 Goddard v. Smithett 1110 Godfrey v. Terry 1029 Goeselle v. Bimelcr 30 Goff V. Flesher 637 Golf V Hawkeve )'nmp & W. M. Co ; 362 Goff v. Winchester College 3.34 Gogebic luv. Co. v. Iron Chief Min. Co 885 Going v. Emery 248, 253 Gold V. Clyne 1037 Gold Mining Cd. v. Nat. Bank, 187, 862 Golden (.>j,te, etc.. Mining Co. v. Sup. Ct 1049 Golden Gate M. & M. Co. v. Joshua Hendry M. M 69 Goldsmith v. Home Ins. Co 105 Goldfast V. People 1253 Goldsmith v. Swift 494, 495 (Jontoocook Valley R. R. Co. v. Barker 350 Goodayv. Colchester Ry. Co.. 148, 741 Goodbar v. City Nat. Bank Tex. . 527 Goodfellow V. Boston, etc., R. R. Co 1064 Goodlet V. L. & N. R. R. Co. ... 22 Goodloe V. Godley 83& Goodlove V. The City of Cinn S4a Goodman v. Jedediah Lodge 771 Goodnow v. Commrs. Ramsey County 25 Goodrel v. Kriechbaum 106 Goodrich v. Dorman 881 Goodrich v. Reynolds 69, 646, 1056 Goodrich v. W. & D. T. Co 34 Goodrich's Appeal 238 Goodspeed v. East Haddem Bank, 1049, 1059 Goodwin v. Cincinnati, etc., Canal Co 401) Goodwin V. Colorado, etc., Co. . . . 107 Goodwin v. Hardy 4s."i, 4s7 Goodwin V. McGehTO SdO,' 910 Cooihvin v. Tin. Sorcw Vn. . . ijio, 205 TAliLlC OF CASES. Ivii PAftE. Goodwin's, etc., Appeal .M7 Goodyear, etc., Co. v. Caduc. . . . S:!2 Gootsfrled v. Miller US, 604 Gordon v. App. Tax Court 1284 Gordon v. Baltimore 12S I Gordon v. Duff 572 Gordon v. Jennings 1033 Gordon v. Preston, 370, 4.54, 822, S48 Gordon v. Richmond, etc., R. R. Co 493, 676 Gordon V. Winchester, etc., Build- ing Assn 1186 Gordon, Exrs. v. Mayor, etc., 1275, 1284, 1285 Gordon's, Extra v. Richmond, etc., R. Co 475 Gorham v. Campbell 402 Gorham v. Gilson £i64 Gorman v. Pac. R. R. Co 1232 Gorman v. Russell 581 Goshen, etc.. Turnpike Co. v. Hurtin 327 Goshorn v. Superiors 85 Goss V. Hampton 552 Goss V. Phillips, etc., Co 564 Gossett V. Union Mut. Ace. Assn. 777 Gott V. Cook 143 Gott V. Dinsmore 27 Gouckenour v. Sullivan Building & Loan Assn 443 Gould V. Emerson 3S6 Gould V. Farmers' Loan & Trust Co 552 Gould V. Head, 84, 128, 133, 134, 542, 543, 735, 1098 Gowen v. Penobscot R. R. Co. ... 1191 Gowen's Appeal 403 Gower's Case 660, 738, 893 Graff V. Bonnett 143 Graff V. Flesher 634 Graff V. Pittsburgh & S. R. Co. 359, 361, 924 Grafton v. Union Ferry Co 1160 Graham v. Boston, etc., R. It. Co HI, 416 Graham v. Van Diemen's Land Co -122, .586 Graham v. Birkenhead, etc., Ry. Co 715 Graham v. Township of St. Joseph 1253, 1254 Granada Co. v. Brogden 416 Granby M. & S. Co. v. Richards, 42, 47, 1172 Grand Lodge A. O. U. W. v. Brand 592 Grand Lodge A. O. U. W. v. Child, .379, 392 Grand Lodge, etc., v. Eisner, 379, 592 Grand Gulf R. R., etc., Co. v. State 1091 Grand Rapids, etc., R. R. Co. v. Alley -•'^" Grand Rapids L. * D. R. Co. v. Cheseboro 292, Grand Rapids N. & L. S. R. Co. V. 6. R. &L R. Co 268, Grand Rapids Safety Deposit C;o. V. Cinn. Safe & Lock Co Grand Rapids & 1. R. Co. v. Heisel Grand Rapids & 1. R. Co. >'. Weiden Grand River Br. Co. v. Rollins. . . Granger v. Bassett Granger v. Bourn Granger v. Original, etc., Co. 420. 422, Grangers' Bus. Ass'n v. Clark Grangers' Ins. Co. v. Kamper, 78, 856, Granite Roofing Co. v. Michael, Grape, etc., Co. \ . Small, 741, 744, Grant v. Bryant Grant v. Francher Grant V. Henry Clay Coal Co. . . . Grant v. Mechanics' Bank Grant v. Phoenix Life Ins. Co. . . Grant v. Taylor Grant's Case 230, 326, 331, Gratz v. Redd 462, 655, Grattan v. National L. Ins. Co. Graves v. Mono Lake, etc., Min. Co 409,464, 466,468, Gray v. Chaplin Gray v. Christian Society Gray v. City of Knoxville Gray v. Coffin. . . ..367, 1112, 1134, Gray v. First Division of St. Paul, etc., R. Co Gray v. Fox Gray v. Lewis Gray v. Lynch Gray v. Monongahela Nav. Co. 38, Gray v. National Ben. Ass'n. .... Gray v. N. Y. & V. Steamship Co 702, Gray v. Oxnard Brothers Co. 139, Gray v. Salt R. Val. Canal Co . . . Gray v. Supreme Lodge Knights of Honor 762, Gray v. The State Grayson v. Willoughby. .713, 748, Gray v. Quicksilver Min. Co., 107, Great Barrington v. County Commrs Great Falls, etc., B, R. Co. v. Copp Great Falls Mfg. Co. v. Garland, Great Northern R. R. Co. v. East- ern Counties R. R. Co. J 52, 1.50, Great North, etc., Ry. Co. v. Kennedy Great Western R. Co. v. Blake. . . Great Western Ry. Co. v. Rushout Great Western Tel. Co. v. Burn- li.nm AGli 28» 307 210 005 277 02 48.% 201 429 68 801 898 832 093 20 09 .">21 ',18.7 200 1216 797 472 710 i")82 291 )• 120(i 290 702 031 779 807 97<; 837 779 614 93) 603 1250 307 285 188 65(1 1.54 708 07O Iviii TABLE OF CASES. PAGE. Oreat Western Tel. Co. v. Gray, 916, 921, 1147 Grease v. Babeock 920 Greaves v. Gouge 689, 706 Greeley v. .Provident Sav. Bank, 960, 993 Greeley v. Smith. 1159 Green v. African Metk. Episcopal See 580, 582 Green v. Beckman 367 Green v. Biddle 1178 Green v. Cady 255 Green v. Derbyshire, etc., K. R. Co ■. 1002 Green v. Erie R. E. Co 1064 Green v. Hugo 211 Green, In re 5:!2 Green v. People 29, 1112 Green v.,Rutheforth 247, 251 Green v. 'Smith 496 Green v. The Mayor 469 Green v. Van Buskirk 166 Green v. Walton .'. . 1036 Green Bay & M. Canal Co. v. Kaukauna Water-Power Co. 276 380 Green Bay M. R. Co. v. Un. Steamboat Co 77 Green County v. Commrs 119 Green County v. Conness 120 Greene v. Greeno 384, 386, 391 Greenville, etc., R. R. Co. v. .lohn- son 1206 Greenville, etc., R. R. Co. v. Woodsides 926 Greenville, etc., R. R. Co. v. Cath- cart 655 Greenville & Columbia River R. R. Co. T. Coleman 1206 Greenwood V. Freight Co.. 1197, 1214, 1215 Greenwood v. The Marginal, etc., R. R. Co 1189 Greenwood's Case 1021 < ireen Mt. T. Co. v. Bulla 516 Green v. Chartiers Ry. Co 342 Gregory V. German Bank 1047 Gregory v. Lamb 891 Gregory v. N. Y., etc., R. Co. . . . 610 Gregory v. Patchett 716 Gregory v. Wandell 530, 53 1 Grier v. Hazard, Hazard & Co. . . 740 Greisa v. Mass. Benn. Assn., 780, 868 Grensboro & N. C. J. Tp. Co. v. Stratton 470, 471 Grey v. Lewis 977 Griffin v. Kentucky Ins. Co. 1201, 1204, 1215 Griffin v. Shreveport & A. R. Co. 290, 300 Griffith V. Chicago P. R. Co., 195, 212 Griffith V. Green J023, 1030 Griffith V. Jewett 140 Griffith V. Paget < 1133 Griffith's Case 804 PAGE. Grimes v. Harmon 248 Griudle V. Stone 880, 915 Grissell v. Bristowe 548 Grissell's Case 1025 Grissou V. Hill 250 Griswold College v. State 1281 Griswold V. Peoria University, 330 331 Griswold v. Seligman. ..337, 550, 880, 905 Grose v. Hilt 910 Gross V. Nichols 603 Grosse Isle Hotel Co. v. Panson's Exr's ■. 327 Grossman v. Supreme Lodge of Knights and Ladies, etc 781 Grosvenor v. United Society, etc., 593, 394 Grubb V. Mahonig Nav. Co 631 Grubb V. Vicksburgh, etc., R. K. Co 631 Gruber v. Washington, etc.. Ry. Co 1049 Gruinelly v. Western Union Tel. Co 1063 Grundy v. Pine Hill Coal Co 472 Grymes v. Hone Ex'r. . . 520, 568, 575 Guadaloupe, etc., Mining Co. v. West 1019 Guadaloupe & S. A. R. Stock Ass'n V. West 49, 51 Guaga Iron Co. v. Dawson 93 Guarantee & Collection Co. of America v. Mayer 890 Guarantee & Collection Co. of America v. Weil 890 Guaranty Co. v. B'd of Revision, 1252 Guardian Mut. L. Ins. Co v. Ho- gan 778 Gue V. Tidewater Canal Co. . .564, 1197 Guin V. N. E. M. S. Co 9.3 Guinault v. Louisville & N. R. Co. 606 Guinn v. Iowa Cent. Ry. Co 602 Guinners v. Land Corp. of Ire- land 674, 675, 859, 860 Gulf Col. & S. F. Ry. Co. v. James 195, 1037 Gulf Col. & S. F. Ry. Co. v. Morris 125, 151, 174 Gulf C, etc., R. R. Co. v.Neely.. 637 Gulf, Colorado & S. F. Ry. Co. v. State 1105 Gulf River L. Co. v. Keefe 109 Gunn V. London, etc., Ins. Co. 7-13, 862 Gunther v. New Orleans Cotton Exchange 394 Guthrie v. Imbrie 217 Gurney v. Atlantic, etc., Ry. Co. . 1033 Gurney v. Grand Trunk Ry. Co. . 607 H Habicht v. Pemberton 749 ITackensack Water Co. v. Dekay] 155 TABLE OF CASES. l'A(!E. Haddin's Will, In re 573 Hadgman v. St. Paul, etc., R. K. Co .'546 Hadley v. Hopkins 251 Hadley v. Russell 920 Haferv. N. Y. L. E. & W. R. Co 704 Hagar v. Cleveland, 69, y4;j, G32, 898, 926 Hagar V. Reclamation Dist.. o3, 34, 1261 Hagar v. Union Nat. Bank, .520, 661 Hager v. Yolo County 33, 34 Hage V. Richmond & D. R. Co.... 1281 Hagele v. West Stone Mfg. Co 503 Hague V. Dandeson 559 Hahm v. Johnson 359 Hahiieman, etc., Co. v. Beebe 94 Hahn's Appeal 351, 353, 359 Haight V. R. R. Co 1250 Haight V. Sawyer 823 Hain v. North W. G. R. Co 3.50 Hainer v. Leg. of Honor 390 Haislip V. Wilmington & W. 1!. Co 300, .302 Hake v. Perdue 26 Hale V. Nashua, etc. , R. (Jo 988 Hale >'. Republican Bridge ('o. 459, 488 Hale V. Sanborn :!r,0, 352, 632 Hale V. Walker 515 Haley v. Boston Belting Co 817 Halket v. Merchant Traders', etc., Assn 1021 Hall V. Auburn Turnp. Co. 83, 197, 222 Hall Mfg. Co. V. Am. Rv. Supply Co 850 Hall V. De Cuir 1241 Hall V. Ins. Co 629 Hall V. Klink 1027 Hallv. Rose Hill, etc., Road Co. 514 Hall V. Selma R. R. Co 630, 642 Hall V. Sullivan R. R. Co 151 Hall V. Supreme Lodge R. of Honor 59'! Hall V. Tanner & DeLaney En- gine Co "74 Hall V. U. S. Ins. Co 521, 520 Hallam v. Hotel Co 467 Hallam v. Indianola Hotel Co 693 Hallman v. Williamsport 347 Hallet V. narrower • 17 Hallows v. Fernie 645 Hall's Case, L. R 187, 892 Halsey, etc., Co. v. Donovan, .350, 352 Halsey v. M'Lean • 1038 Halstead v. Adams 1254 Halstead v. Meeker's Ex'rs 537 Ham V. Mulberry Gravel Road Co. 627 Ham V. Toledo R. R. Co 1009 Hamberstien v. Parsons 383 Hambleton v. Cent. O. R.-R. Co. .576 .Hambleton v. King 993 PAGE. 363 . 343 880- 958 652 352 1144 805 148 Hamilton, etc., Co. v. Ward. Hamilton, etc., Plankroad Co. v. Rice Hamilton, etc., R. R. Co. v. Rice, Hamilton v. Accessory Transit Co. Hamilton v. Cent. Ohio, etc., R. R. Co. — Hamilton >t E. P. R. R. Co. v. Rice Hamilton v. Glenn, 470, 543, 505, 875, 913, 921, 1134, 1135, Hamilton v. Grangers L. & H. Ins. Co 034 Hamilton Ins. Co. v. Hobart. 114, Hamilton \'. Lycoming Mut. Ins. Co 80, Hamilton v. McLaughlin 68 Hamilton v. McPherson 544 Hamilton Co. v. Mass 1249 Hamilton v. Meadville 322 Hammer v. Garfield Min. & M. Co 108 Hammerstein v. Parsons .... 749, 755 Hammond v. Hastings 524 Hammond v. Port Royal, etc., Ry. Co 811 Hammond's Appeal 468 Hampshire v. Franklin 25 Hampson v. Weare 1024 Hamsherv. Hamsher 230 Hancock Stock Fence Law Co. V. Adams 272 Hancock v. American L. Ins. Co. 78:5 Hancock v. Holbrook, 402, 405, 459, 1158 Handley >. Stutz, 416, 880, 887, 894, 896, 901 Handy v. Cleveland & M. R. Co... 996 Handy v. Draper 917 Hanf V. Northwestern Masonic Aid Assn 765 Hanna v. Cincinnati AVayne R. R. Co 1206, 1212 Hanna v. International Petroleum Co , 93, Hannah V. Moherly B'k. . . . 799, 871 Hannibal Blank Co. v. Manifee, 642 Hannibal, etc., R. E. Co. v. Muder 273 Hannibal & St. Joseph R. Co. v. Marion County 25 Hannibal & St. Joseph R. Co. v. Shacklett; 315, 1284 Ilannigan v. Ingraham 380 Hanover J. & S. R. R. C. Co. v. Haldeman... 71, 352,358,364, 809 Hanover Nat. Bank v. Johnson, 55 Hardcastle v. Maryland, etc., R. R. Co 1009 Hardenburg v. Farmers, etc.. Bank 347, 402 417, 426, 455 Harditi v. Constr. Co. ... 158, 195, 429 Harding v. Goodlet 279 101 Ix TABLE OF CASES. Harding v. LittteUalf 37fi Harding V. Vandewatcr -t-M, -loO Hardman v. Sa,a;e 'JSl, lii:;0, 1047 Harden v. Newton (>S7 Hardway y. Semmes i')62 Hardy v. Chesapeake B'k 261 Hardy v. Merriweatlier. . (it?, (",09, 1056 Hardy v. Metropolitan Land Co., 62.') Harger v. McCullougli 1028 Hargrave v. Bank of Illinois 60 Hargroves V. Chambers 1038, 1047 Harkness v. Manhattan 11. Co. 9, Vr2, 613 Harl ^. Pottawatomie Co. Mut. Fire Ins. Co 754, 757, 771 Harland v. Bankers & Merchants' Xcl. Co :; :... 980 Harlem Canal Co. v. Seixa.s 351 Harlem Canal Co. v. Spear 351 Harley v. Heist 389 Harman v. Lewis 391 Harman's Case 114, 812 Harmon v. Columbia ^- G. K. Co. 154 Harmon v. Drether .594 Harmon V. rage. . . b7:i, 875, 1019, 1144 Harper v. llaymon 140 Harpending v. Dutch Clmrch. . . . 227 Harpole v. Stobart .)0o, 506, 560 Harriman v. Southam 60, 69 Harrington v. Tennessee 1174 Harrington v. Vict. G. D. Co 460 Hai'rington V. Workingmen's Ben. Assn 482, 594 Harris v. First Parish, etc 874 Harris v. F. S. R. Co 1045 Harris v. McGregor 44, 933 Harris v. Miss. Val., etc., R. R. Co 1088, 1152 Harris v. Muskingam Mfg. Co. 1159 Harris v. Nesbit 11.53 Harris v. Pullman 917 Harris v. Roofw. Ex'rs 182 Harris v. Runnels 866 Harris v. San Francisco, etc., Co. 5.59 Harris v. Stevens 544 Harris v. Turnbridge. . . 530, 531, 651 Harris' Appeal 545 Harrisburg Bank v. Comm 1015 Harrisburg City Pass. R. Co. v. Harrisburgh 1239 Harrison v. Cotton States Life Ins. Co 945 Hai-rison v. Han'ison 144, 538 Harrison v. Heathoni 28 Harrison v. Mexican R. R. Co. 486, 488, 494, 669, 674, 675, 859 Harrison v. Timmins 25 Harrod v. Hamer. ... 44, 51, 935, 1032 Harshman v. Bates 123, 124 Hart V. Barney & Smith Mfg. Co. 166 Hart V. Boston, etc., I!. R. Co, . . 1161 Hart V. Clarks 30 Hart V. East Union l!y. Co 176 PAGE. Hart V. Frantino, etc., Co 650 Hart V. Mayor, etc.. of Albany. . . 442 Hart V. Ten Eyck 5:'.S, 55". Hart's Case L. R 325 Harts V. Brown 467 Harter v. Kemochen 121 Hartford & X. H. R. 11. Co. v. Crosswell 1207 Hartford Fire Ins. f!o. v. Doyle, 106 Hartford & X H. R. R. Co. v. Kennedy 327, .331, 370 Hartford F. Ins. Co. \ . Kaymond, 104, lOS, 216 Hart well v. Armstrong 33 Harvard College v. Armory 537 Harvard College v. Boston ' 227 Harvey v. Clough 30 Harvey v. CoUett 938 Harvey v. R. R. Locomotive Works 160, 167 Harwood v. City of Bloomington, 302 Harwoo, 702, 1131 Hutchinson v. Lawrence 585, 593 Hutchinson v. Surrey, etc., Assn. 739, 743 Hutton V. Scarborough, etc., Co. 674, 675, 859, 937 Huyler v. Craigin Cattle Co.,.100, 734 Hybart v. Parker 30 Hyland v. Brazil Block Coal Co. 1284 Hyman v. Coleman 915, 923, 10-30 Hyde v. Doe 5:'. Hyde v. Larkin 213 Hydev. Lynde 966 Hyde v. Trewhitt 1110 Hyde v. Woods 584 Ibbotson V. Elam 559 Ihmsen's Appeal 537 Illinois Cent. R. R. Co. v. Illi- nois 1221 111. Cent. R. R. Co. ,-. .lewell 1069 Illinois, etc., 1!. Co. v. People 1119 111. G. T. R. R. Co. V. Cook 1207 Illinois G. T. Rv. Co. v. Wade. . . 541, 850 Illinois Ins. Co. v. Marseilles Mfg. Co 371 Illinois & M. Canal Co. v. Chi- cago & R. R. Co 268, 1185 111. Masons' Benev. Soc. v. Bald- win 597 HI. River R. R. Co. v. Zimmer, 352, 6;)5, 1205, 1206, 1241 Illinois & St. L. R. & Coal Co. V. Stookey 1279 Imhoden v. Etowah & B. B. Min. Co 69, 840, 1070 Importing, etc.. Co. v. Locke, 67, 93,97, 937 Imp. & Groc. Ex., In re. . . .1156, 1158 Independent Order, etc., v. Paine. 68 India, etc., Ass'n, In re '. 804 India Bagging Ass'n v. Kock 139 India Mut. Ins. Co. v. Worcester N. & R. R. Co 126 Indiana C. R. R. Co. v. State .... 306 Indiana R. M. Co. v. St. Louis Ft. S. & W. R. Co 215, 8Sl TABLE OF CASES. Ixv PAGE. Indianapolis P. & M. Co. v. Her- kimer 42, 44, 53, 71, 309, 933 Indianapolis, etc., E. B. Co. v. Jones 127, 128, 807 Indianapolis R. R. Co. v. Fryer, 127, 807 Indianapolis E. R. Co. v. Marshall, 1228 Indianapolis & Cin. R. Co. v. The State 1006 Ind's Case 662 Inge, Ex parte 251 Inglis V. Sailor's Snug Harbor 240 Inglis V. Gt. North Ry. Co 656 Ingraham v. Camden & R. Water Co 82 Ingraham v. Terry 1159, 1160 Inhabitants of County of Essex v. Board of Assessors, City of Salem 1282 Inhabitants of School District v. Wood 26 Inhab. of Springfield v. Conn. R. R. Co 265 Innerarity v. Merchants' Nat. B'k, 836 Innes V. Lansing 802, 913 Innes v. Wylie 585 Instone v. Frankford Bridge Co. 327, 655 Insurance Co. v. Morse 106, 1243 Ins. Co. V. Purselle 107 Ins. Co. V. Francis 93, 602 Ins. Co. V. Needles 1101 Insurance Co., In re 185 Ins. Co. V. Com 1247 Int., etc., Ass'n v. Walker. ..326, 343, 894 Intermountain Pub. Co. v. Jack, 70, 634 International & Great Northern Ry. Co. V. State 1082 International Tr. Co. v. L. & Tr. Co 1247 International, etc., Co. v. McMor- ran 835 International L. Ass'n., In re. . . . 155 International & G. E. R. Co. t. Underwood 155, 174 International R. R. Co. v. Bre- mond 823 International & G. N. R. Co. v. Eckford 153 International & G. N. R. Co. v. Moody. 154 International Trust Co. v. Inter- national Loan & Trust Co 5 Iowa B. S. W. Co. V. So. B. W. Co 1049 Iowa, etc., R. R. Co. v. Perkins.. 341 Iowa Lumber Co. v. Foster 185 Iowa & Minn. R. R. Co. v. Per- kins. . 343, 352 Ireland v. Ireland 391 Ireland v. Metropolitan £1. Ry. Co 9.m PAGE. Ireland v. Nichols 996 Irish Catholic Ben. Ass'n v. O'Shaughnessey 777 Iron Mountain R. R. Co. v. Bing- ham 290 Iron Works v. Davidson 27 Irons V. Mfrs. Nat. B'k, 802, 919, 1139 Irrigation Co. of France, In re... 114 Irvine v. Forbes 27 Irvine v. M'Keon 1036 Irvine v. Turnpike Co 1214 Irvin V. N. O. St. L. Ry. Co 1254 Irwin V. Bailey 212 Irwin V. Or., etc., Co 611 Irwin V. Williar 530, 531, 532 Isaac V. Clarke 551 Isham V. Buckingham. . .515, 548, 549, 5.58, 908 Isham V. Trustees of First Presby. Church of Dunkirk 400 Isgrigg V. Schooley 392 Isle Royale Land Coi-p. v. Sec. of State 48, 100 Ives V. Smith. . .607 610, 699, 701, 709, 713, 813 Ives V. Sterling 331, 333 Jack V. Haber 357 Jacques v. Chambers 572 Jackson v. Allen 1021 Jackson v. Chicago S. F. & C. Ry. Co 289, 301 Jackson v. Dines 982 Jackson v. Frear 904, 909 Jackson v. Frier 882 Jackson v. Hathaway 307 Jackson v. Haynor .338 Jackson v. Ludeling 795 Jackson v. Meek 1022, 1032 Jackman v. Mitchell 678 Jackson v. Newark P. R. Co. 488, 621, 660, 669 Jackson v. Northwestern Mut. Relief Soc 754, 760 Jackson v. Pearce 127 Jackson v. Phillips 241, 248, 1167 Jackson v. Rutland, etc., B. C. Co 307 Jackson v. Sligo, etc.. Co 905, 908 Jackson v. Twenty-third St. Ry. Co 574 Jackson, etc., Co., Re, 1153 James v. Cin. H. & D. R. R. Co. 339, 347 James v. May 545 James v. Milwaukee 321 James v. St. Louis & S. F. Ry. Co 96 James v. Woodruff 509 James River, etc., Co. v. Thomp- ,son 264 Ixvi TAULK OF CASES. PAGE. Jamison v. Citizens' Sav. Bank, 850 Jansen v. Glass Letter Co 195 Jansen v. Stuart 1116 Jarvis v. Manhattan Beach Co. 897 Jarvis v. Rogers 511, 5.52 Jaudon v. Nat. City Bank 536 Jefferson Branch Bank v. Skelly, 84, 1182 Jefferson County Sav. Bank v. Eborn 1049 Jeffers v. Radcliff 78« Jefferson's Case 875 Jelly V. The Paraiso Kednction Co 948 Jemison v. Citizens' Sav. Bank, 78 Jenkins v. Andover 1245 Jenkins v. Fowler 573 Jenkins v. Morris 824 Jennings v. Badeley 1146 Jennings v. Bank of Cal 518, 520, 524, 525, .526 Jennings v. Braddeley 1168 Jennings v. Broughton 645 Jersey City Gas L. Co. v. Con- sumers of Gas L. Co., 87, 1096, 1111 Jermain v. Lake Shore & M. S. E. Co 480,494, 559 Jessamine Co. v. Swigert's Admr. 322 Jessup v. Carnegie 932, 933 Jessup V. 111. Cent. R. Co 699 Jessup V. Wabash, St. L. & P. By. Co 975 Jewell v. Rock Kiver, etc., Co. 337, 642, 891, 894 Jewett V. Bradford Sav. Bk. & Trust Co 718 Jewett V. Lawrenceburgh & W. M. R. R. Co 358, 361 Jewett v. Miller 963 Jewett V. Union R. R. Co 290 Jewett V. Valley Ry. Co.3.o2, 362, 364, 642, 679, 926 Jinks V. Banner Iiodge, etc.. Ladies & Knights of Honor 393 John Hancock Mut. L. Ins. Co. V. Moore : 783 Johnson v. Albany, etc., R. R. Co ol5, 656, 580 Johnson v. Baltimore & N. Y. Ry. Co 291, 292 Johnson v. Bush 184 Johnson v. Chicago B. & N. R. Co 293 Johnson v. Chicago, etc., R. R. Co 271 Johnson v. Com 1272, 1284 Johnson v. Crawford F. K. & JTt. W. R. Co ".. 346 Johnson v. Crawfordville K. R. Co 631 Johnson v. Drummond 12.")5 Johnson v. Freeport & M. R. Ry. Co 298 PAGE. Johnson v. Ga. Midland & Gulf R. R. Co 3.59 Johnson v. Goslett 30 Johnson v. Griffin Banking Co. 79 Johnson v. Hanover Nat. Bank, 58 Johnson v. Johnson 573 Johnson v. Jones 205, 667 Johnson v. Kesler 49, 50 Johnson v. Kirby 546 Johnson v. Laflin. ..187, 508, 520, 525, 528, 542, 545, .5.54, 558, 908 Johnson v. Little's Iron Agency, 656, 659 Johnson v. Ostrander 26 Johnson v. Pensacola & Ga. R. R. Co 357, 1205 Johnson v. Renton 576 Johnson v. Shewsbury, etc., R. E. Co 114 Johnson v. Stark 323 Johnson v. Underhill. . . .504, 542, 548 Johnson v. Union Switch & Signal Co 839 Johnson v. Wabash, etc.. Plank- road Co 342 Johnson, etc., Co. v. Albany, etc., R. R. Co 659 Johnston v. Jones 311, 410, * 422, 426, 445 Joliet E. L. & P. Co. v. Ingalls. . 212 Joint Stock Gas. Act, In re 425 Joint Stock Coal Co., In re 1145 Jones v. Ark. Mech., etc., Co 797 Jones V. A. T. & S. F. R. Co 500 Jones V. Bank of Leadville. ..955, 1142, 1165 Jones V. Bank of Tennessee 59 Jones v. Bowles 724 Jones V. Cincinnati Type, etc, Co 60 Jones V. Davis 315 Jones v. Earl 835 Jones v. Galend R. R. Co 1228 Jones v. Granite Mills , 1066 Jones V. Indemnity Co 109 Jones, In re 1161 Jones V. Jaman 367 Jones V. Jarman 1031 Jones V. Johnson 338, 461 Jones V. Keen 993 Jones V. Kent 546 Jones V. Kokomo Building Ass'n, 69 Johnson v. Laflin .540 Jones V. Latham 504 Jones V. Milton 31 1, 312 Jones V. Morrisson 471 Jones V. M. & R. Tp. Co 425 Jones V. Nai ional, etc .593, 761 Jones V. Newhall 547 Jones V. Ople 559 Jones V. Renshaw 229 Jones V. Sisson 630 Jones V. Sniitli los TABLE OP CASES. Ixvi'i PAGE. Jones V. Terra Haute, etc., R. R. Co 486, 491, 858 Jones V. Willberger 102t) Jones V. Wooley 884 Jones & N. Mfg. Co. v. Com 1281 Johns V. Johns 568 Jordan v. Nat. Shoe and Leather Bank 261 Josephs V. Pebrer 28 Joslin V. Stokes 330, 746 Joslyn V. Athens Coach & Car Co. 996 Joslyn V. Pac, etc., Co 1206 Joslyn V. St. Paul Distilling Co. 681 Jourdan v. L. I. R. Co 8:i0 Jours V. Ogle 494 Joy V. Marion 745 Joy V. Jackson, etc., PI. R. Co. 168, 1181, 1206 Judah V. American L. Ins. Co. .. 426 Judson V. Bridgeport 287 Judsonv. State 1281 Juker V. Com 433 Junction R. R. Co. v. Reeve 354 Justh V. Holliday 532 K Kahn v. St. Joseph 522 Kain v. Smith 984 Kaiser v. 111. Cent. R. R. Co 1229 Kaiser v. Kellar 642 Kaiser v. Lawrence S. Bank, 933, 9.34 Kampf V. Jones 572 Kane v. Metropolitan El. Ry. Co. 300 Kankakee & S. R. Co. v. Horan. . 293 Kankakee, etc., v. Kampe. ..1138, 1141 Kankison v. Paige 754 Kansas, etc., R. R. Co. v. Int. State, etc., Co 602 Kansas, etc., R. R. Co. v. Tope- ka 611 Kans.as Center R. R. Co. v. Allen, 307 Kansas City C. & S. R. Co. v. Story 299, 300, 301 Kansas City, etc., Co. v. Sauer, 1153 Kansas City Ft. S. & M. R. Co. v. Daughtry 609 Kansas City Hotel Co. v. Clay. . . 1152 Kansas City Hotel Co. v. Harris, 633 Kansas City Hotel v. Hunt 70 Kansas City St. J. & C. B. R. Co. V. St. Joseph Ter. R. Co 290 Kansas City & B. R. Co., In re. . . 98 Kansas L. Assn. v. Lemke 754 Kansas L. Co. v. Cent B'k 833 Kansas N. & D. Ry. Co. v. Cuy- kendall 290 Kansas Pacific R. R. Co. v. Mower 1224, 1228 Kansas Protective Union v. Gard- ner 784 PAGE. Kansas Protective Union v.Whitt, 784 Karcher v. Supreme Lodge, .584, 593, 594, 596 Kaniv. Korer Iron Co., 98!), 993, 1141 Karnes v. Rochester, etc., R. Co. 475, 479, 480, 482, 703 Kataiha Land Co. v. Holley... . 925 Katama, etc., Co. v. Jennigan. , . 327 Katoma Land Co. v. Holley 327 Kathrops v. Stedman 1215 Kavanaugh's Will, In re 248 Kaw Life Assn. v. Lemke 756 Kean v. Davis 824 Kean v. Johnson 623, 702, 1148 Kearns v. Leaf 790 Keary v. Mutual Reserve Fund L. Assn 773 Keasley v. Codd 27 Keegan v. W. R. R. Co 1067 Keener v. Grand Lodge A. O. U. W 380 Keener V. Union Pac. Ry. Co... 1279 Keeper v. St. Paul & N. P. Ry. . . 299 Kehlenbeck v. Lageman 432 Keignein V. Drainage Commrs. . . 1096 Keith & Perry Coal Co. v. Bing- ham 450 Kelk's Case 892 Kelley v. A. H. R. Co 850 Kelleyv. Greenleaf 458 Kelley v. Newbnryport, etc.. R. R. Co 822 Kelley v. Alabama & C. R. R. Co. 170 Kelley v. Mariposa Land Co 709 Kelley v. Milan 319 Kelly V. Nom. Pub. Co 59 Kelly V. Pittsburg 1261 Kelly V. Upton 533 Kellock V. Enthoven 547, 548 Kellogg Bridge Co. v. U. S 27 Kellogg V. Larkin 140 Kellogg V. Malin 307 Kellogg V. Stockwell, 529, 543, 545, 548 Kelsey v. Pfaundler, etc., Co. 730, 1152, 1186, 1160 Kelsey V. Sargent 666 Kelsey v. Trustee of Nevada 34 Kena v. Johnson 1207 Kendell v. Bishop 470, 795, 1140 Kenicott v. Supervisors 319 Kenkel v. McGill 572 Kenkele v. Manhattan Ry. Co... 294 Kennebec, etc., R. Co. v. Jarvis, 339 Kennebec & Portland R. R. Co. V. Waters 357 Kennebec & P. R. R. Co. v. Port- land & K. R. R. Co 171 Kennedy V. Baltimore Ins. Co... 148 Kennedy v. Gibson 970, 1017 Kennedy v. Green 83f> Kennedy v. St. Paul & Pac. R. R. Co 959, 991 ixviii TABLE OF CASES. Kenosha, etc., E. R. Co. v. Maisk, Kent V. Freehold Land & Brick- making Co Kent V. Miltengerger Kent V. Mincing Co Kent V. Quicksilver Min. Co., 488, 489, 661, 662, 668, 675, 676, 680, 710, 845, Kenton Fur v. McAlpine, 425, 485, Kenton Ins. Co. v. Bowman, 515, Kentucky, etc., Ins. Co. v. Miller's Admr 380, 382, 484, 391, Kentucky Cent. K. Co. v. County of Pendleton 1279, Kentucky Mut. Security Fund Co. V. Turner Kepler v. Sup. L. Knights of Honor Keppel V, Petersburg R. R. Co. . . Kerchner v. Getty Kernochan, In re Kerr v. Minnesota Mut. Ben. Assn Kerridge v. Hesse Kersey Oil Co. v. Oil Creek, etc., R. Co Kessler v. Continental C. & I. Co. Kettle River R. Co. v. Eastern Ry. Co,... Kettlewell v. Watson Kewen v. Johnson Keystone Bridge Co. v. Barstow, Keyser v. Hitz 70, Keystone Bridge Co. v. McCluney, Kickland v. Menasha Wooden- ware Co 822, Kid V. Mitchell Kidd V. Pearson Kieman v. Chicago S. F. & C. R. Co 276, 292, Kierman v. Manhattan Quotation Co Kilgore v. Smith Kiliingsworth v. Portland Trust Co Kilpatrick v. Penrose Ferry Bldg. Co Kimball v. Milford Kimball r. Reding Kimball v. Town of Lakeland Kimpson vs Saunders Kincaid v. Doninelle 1017, lO.'SS, Kincaid v. Indianapolis Natural Gas. Co Kinder v. Taylor Kine v. Becker King V. Accumulative Life, etc., Assn. Co King V. Barnes 333, King V. Chetwynd King V. City of Madison King V. Company of Free Fishers, King V. Coot>ers Co AGE. '1212 744 530 895 859 491 519 393 1281 769 386 493 533 495 758 884 456 1156 282 836 26 792 879 831 651 1241 299 1231 109 77 470 1275 537 324 28 1153 289 28 243 790 682 425 1284 728 440 PAGE. King V. Grant 239 King V. Katherine Duck Co 635 King V. Marquis of Stafford 1008 King V. Marshall 173, 174 King V. Merchant Tailors' Co., 730, 733 Kingv. Merchants Exch. Co 80 Kinn v. National M. & E. Co. 62, 608 King V. lllwaco Ry. & Nav. Co. 6 King V. Severn & Wye. Ry. Co. 1007 King V. Talbot 537 King V. Theodorick 425 King V. Trevenen 402 King V. Patterson, etc., R. Co 483 King V. Union Iron Co 910 King V. University of Cambridge, 726 999 King V. Water Wks. Co .' 1007 King v. Wilts Canal Co 731 King's Case 502, 506, 907 Kings Co. El. Ry. Co., Re, 1091, 1203 Kingsland v. Braisted 27 Kingsbury v. Kirwan 530 Kingsland V. Mayor 290, 293 Kingsleyv. B'k 795, 798 Kinney v. Kinney's Ex'r 239 Kirkland v. Kille 473, 1046 Kirkpatrick v. Bousall, 530, 531, 532 Kirksey v. Florida, etc., Plank- road Co 327, 331, 655 Kirby v. Shaw 1273 Kirtright v. Bank of Buffalo 412 Kisch V. Cent. R. R. Co 644 Kishacoquillas, etc., Co. v. Mc- Conahy 70 Kitchen v. St. L. & Ry. Co., 680, 695, 710 Kittow v. Liskeard Union 30 Klien v. Alton & Sangamon R. R. Co 327, 3.51 Kline v. C. P. R. K. Co 1064 Knapp, Stout & Co. v. National Mut. Fire Ins. Co 606 Knecht v. U. S. Sav. Inst 261 Kneeland v. American L. & Tr. Co 166 Knight V. Norris 1032 Knight V. Old Nat. Bank 517 Knight's Case 586 Knights of Honor v. Abbott, 596, 598 Knights of Honor v. Johnson ,585 Knights of Honor v. Nairn, 380, 381, 382, 387, 390, 391 Knights of Honor v. Watson .389 Knights of Honor v. Wickser, 765,780, 783 Know V. Protection Ins. Co 606 Knower v. Haines 1047 Knowlton v. Compress, etc., Co. 858 Knox V. Childersburg Land Co. . . 329 Knox County v. Aspinwall, 320, 847 Knoxvllle v. Knoxville, etc., R. R. Co 11,5, 1207 Knoxville Iron Co. v. Wilkins. . . 1139 TABLE OF CASES. Ixix PAGE. Knutz V. Paola T. Co 930 Kobogam v. Jackson Iron Co 622 Eoehler v. Black River Co., etc., 218, 222, 464 Koehler v. Dodge 222 Koehler v. Merchants' Aid Soc. . . i)82 Koeles v. Cochran 1S4 Koenig v. Chicago B. & Q. Ry. Co 269 Kohl V. LiUienthal 8, 119, 404 620, 625,641, 1149, 1157 Kortright v. Buffalo Com. Bank. 51.<5 Kraft V. Cuykendall 502 Kraft-Holmes, etc., Co. v. Ci-ow, 461, 881, 1167 Kramer v. Arthurs 27 Krause v. Malaga Glass Co. 797, 1140 Krauser v. Rickel 1033 Kreighler v. Shelby R. R. Co 614 Kretz V. Texas & P. Ry. Co 983 Kritzer v. Woodson 1015 Kropp V. Forman 286 Kryger v. Andrews 643 Kryger v. Ry. Track 471 Kuebnemundt v. Smith 585 Kxih V. Metropolitan El. Ry. Co. 295 Kuhn V. McAllister 568 La Solidarte Mut. Ben. Assn 204 Labdell v. Baker 1055 Labouchere v. Earl of Warncliffe, 442, 581, 583, 585, 586, 588, 589 Ladd V. Cartwright 924 Lackland v. North Mo. R. R. Co. 272 Ladd V. Couzins 841 Lady Biyan's Case 308 Ladywell Min. Co. v. Brookes, 744,737, 745 Lafand v. Deems 1145 Lafayette, etc., R. Co. v. Cheeney, 471 Lafayette Ins. Co. v. French, 105, 106, 107, 1247 Lafayette R. Co., In re 470 Lafayette v. Kagle 304 Laflin v. Chicago W. & N. R. Co. 302 Lafond v. Deems 593 Lagrange, etc., R. R. Co. v. Rainey 1119,1159 Lake Co. v. Sulphur Bank Quick- silver Min. Co 1248 Lake Erie, etc., Co. v. Griffin, 807, 811 Lake Erie & Western R. Co. v, Scott 289 Lake Ontario, etc., R. R. Co. v. Mason 327,6.31, 655 Lake Ontario Shore R. R. Co. v. Cnrtiss 330 Lake Superior Iron Co. v. Brown, Bonnell& Co 1161 PAGE. Lake Sup. S. C. R. & I. Co. v. School Dist 1191 Lake S. & M. S. Ry. Co. v. Chicago & W. I. R. Co 269 Lake View v. Rose Hill Com. 1226, 1241 Lakeside Ditch Co. v. Crane, 54, 65, 928 Lakin v. Willlamette Val., etc., R. Co 151, 152, 154, 155 Lamar v. Micou 537 Lamb v. Laughlin 794 Lamb v. Reclamation Dist 288 Lambert v. Addison .... .584, 591 Lambert v. Lambert 573 Lambert v. Neuchatel Aspjialt Co 479 Lamoille, etc., R. R. Co. v. Fair- field 319 Lamont v. Grand Lodge, etc., 381, 383 Lamont v. Hotelman's Assn 383 Lampheare v. A. O. U. W .396 Lancaster Co. Nat, Bank v. Smith 1062 Lancaster v. Wash. Ins. Co 783 Lance's Appeal 272 Land.v. Brainerd 351 Land v. Develop. Assn., In re..,. . 911 Land Grant R. R. Co. v. Commrs. of Coffee Co 95, 97, 100 Land's Appeal 400 Lander v. Tillia 871 Landis v. W. Pac. R. Co. 162 Landon Celluloid Co., In re 912 Lane v. Brainerd 312, 357, 430 Lane v. Boston & Alb. R. R. Co. 841 Lane v. Harris 1016 Lane v. Morris 1015 Lane v. Nickerson 1144 Lang Syne Min. Co. v. Ross 688 Langdon v. Bkg. Co 84 , Langdon v. Branch 133, 70^, 814 Langdon v. Fogg 693 Langdon v. Hillside C. & I. Co. . 68!) Langdon v. Mayer 290, 1197 Langford v. Ottuma Water Power Co 799 Langley v. Little 1206 Langton v. Waite 552 Lanning v. New York Central R. R.Co 1067 Lanyon v. Smith 30 Larrabee v. Baldwin 1014, 1027 Larange, etc., R. R. Co. v. Reimey, 1158 Larsen v. Oregon Railway & Nav. Co 294 Larwell v. Hanover Sav. etc., Soc 100 Late Corporation, etc., v. United States 39, 146 Lathain v. Wood 652 Latham v. Houston Flour Mills. . 818 Latham v. Chafee 943 Lathrop v. Commercial Bank of Sciota 93 Ixx TABLE OP CASES. rAGE. Lathropv. Kneeland.... 856,861, 894 Lathrop y. Stedman 689, 1163 Latimer v. Un. Pac. Ry. Co 605 Latrobe v. Western Tel. Co 812 Latwell V. Hanover Sav. Fund Society 155 Lauckland v. Northern Missouri E. K. Co 271 Laudeuschlager v. Northwestern Endowment & Legacy Assn. . . 778 Lauferty v. Wheeler 933 Lauman r. Lebanon, etc., R. R. Co 115, 152, 405, 1158, 1177 1189, 1207, 1283 Laurel Fork, etc., R. R. Co. v. West Va. Trans. Co 1228, 12.34 Lavender v-. Lavender 996 Laverty v. Burr 197 Law Guar. Tr. Soc. v. Bank of England 734 Lawless v. Connecticut River R. R.Co 1068 Lawler v. Burt 1015 Lawler v. Murphy 27, 756 928, 931, 936 Lawrence v. Greenwich Fire Ins. Co 954, 955 Lawrence v. Maxwell 552, 554 Lawrence v. McCready 966 Lawrence v. Morgans' L. & T. R. &S. S. Co 169, 1077 Lawrence v. Nelson 910 I^awrence County v. Chattaroi R. R. Co 25 Lawrenceville, etc., Co. v. Parker, 212 Lawyer v. Rosebrook 917 Lay V. Austin 219 Lazarus v. Shearer 824 Lazenski v. Supreme Lodge Knigts of Honor 781, 783, 785 Lazure v. Graniteville M. Co 1068 La Fayette v. Cox 319 Legett V. N. J. Banking Co 210 Leggett V. Bank of Sing Sing 518,521,522, 525 Lehigh Ave. Ry. Go's Appeal, 48, 75 Lehigh Bridge Co. v. Lehigh Coal, etc., Co 59 Lehigh Coal Co. v. Cent. K. R. Co 667, 981 Lehigh, etc., R. R. Co. v. Orange, etc., Co 266 Lehigh Val. Coal Co. v. Hampden 5 Lehigh Val. R. R. Co. v. Com- monwealth 1259, 1268 Lehigh W. Co. v. Easton 1178 Lehman v. Dist. No. 1 B. B. . . . 432 Lehman v. Glenn 878, 879, 921 Lehman Bros. v. Tallahassee Mfg. Co 155, 157, 180 Lehman v. Semple 922 Lehman v. Warner 65, 927 Leibscher v. Kraus 817 Leicester v. Rose 678 PAGE. Leisey, etc., Co.. v. Hardin 1241 Leitch V. Wells 512, .529, 539, 569 Leland v. Hayden 490, 495, 496 Lemley v. Commrs 1256 Lenawee Co. Sav. Bank v. City of Adrian 1273 Lenox v. Roberts 1165 Leo V. Union Pacific Ry. Co 716 Leo V. Union Pac R. R. Co. .403, 704 Leominster, etc., Co. v. Shrews- bury, etc., Ry 739, 743 Leonberger v. Rouse 1250, 1252 Leonard v. American Ins. Co 380 Leonard v. Davenport 31 Leasure v. Union, etc., Ins. Co. 93, 219 Leaters v. Bank 975 Leathers v. Janney 9, 73, 80, 798, 815 Leasure y. Hillegas 231 Leavenworth Co. v. C. R. I. & P. Ry. Co 128 Leavenworth Co. v. Miller. 319 Leavenworth N. & S. Ry. Co. v. Usher 302 Leavitt v. Blatchford 29 Leavitt v. Fisher. 513, 528, 649 Leavitt v. Oxford, etc., Co.. 367, 4.55, 4.56 Leavitt v. Yates 29, 197, 823, 832 Leazure v. Union Mut., etc., Co. 94 Le Conteulx v. Buffalo 77 Le Crey v. Eastman 552 Le Clair v. St. P. & P. R. R. Co. 1067 Lee V. City Nat. Bank. . .518, 526, .540 Lee V. G. M. Co 871 Lee V. Neuchatel Co 476, 482 Lee V. Pembroke Iron Co 85 Lee V. Pittsburgh Coal Co 200 Lee V. Sturges 1252 Leech v. Harris 579, 581, 584 Leed & Evansburg Tump. Co. v. Phillips 1207 Leeds Banking Co., L. R., In re. 206 Leeds, etc., Ry. Co. v. Fearnley, 325 Lees v. Canal Co 87 Lexington v. Butler 197 Lexington, etc., Ins. Co. v. Page, 883 Lexington v. McQuillan 26 Lexington, etc., R, R. Co. v. Bridges 797, 800, 801 Lexington & W. C. R. R. Co. v. Chandler. . . . .352, 586, 630, 6.56, 659 Leonard v. New York, etc., Tel. Co 1063 Leonard v. Washburn 107 Leonard v. Winslow 2.30, 257 Leroy & W. R. Co. v. Ross. . .293, 301 Leslie v. Lorillard 74, 133, 697 Lessassier v. Kennedy 546, 548 Lesseps v. Architects' Co 657 Lender v. Hartford L. & A. Ins. Co 756 Lender v. Ins. Co 754 TABLE OF CASES. Ixxi PAGE. Levering v. Mayor 148 Levy V. Levy 251 Lewame v. Meyer 67, 937 Lewey's Island R. R. Co. v. Bol- ton 333, 363, 656, 659, 686 Lewis V. Bask of Kentucky. .56, 93, 99 Lewis V. City of Shreveport 319 Lewis v. Clarenden 124, 321 Lewis v. Glenn 173 Lewis V. Graham 511 Lewis & Mason Co. Turnpike Road Co. V. Thomas 78 Lewis V. Meir 1049 Lewis V. Robertson 926 Iiewis V. Robs 882 Lewis V. Tilton 27, 398 Lewis V. Wilson 591, 594 Lewis' Adm. v. Glenn 918 Libby v. Tobey 881, 901 Libby v. Rosekrans 961, 964 Life Ass'n v. Fassett 1159 Life Assur. Co., In re 174, 180 Life & Fire Ins. Co. v. Mechanic Fire Ins. Co 1050 Ligat v. Commonwealth 275 Liggett V. Ladd 28 Lighthall Mfg. Co., In re. . . .417, 421, 435 Lightner's Appeal 512 Lloyd V. West Branch Bank 209 Lloyd V. Loaring 28 Lloyd V. The Mayor, etc., of BT. T 848 Lime v. Wagoner. l\m Lincoln v. Worcester 1277 Lindsay Pet. Co. v. Hurd. . . .648, 712 Lindsey v. Simonds 917 Liuingston, etc., Ass'n., In re. . . 1153 Linn v. Robertson 1163 liion, etc.. Insurance Co. v. Tucker 367 Lionberger v. Rouse 1238, 1269 Lippett V. Am. Wood-Paper Co . 565 Liquidators of the British Nation Life Assur. Ass'n, Re 188 Litchfield Bank v. Church. ..351, 361, 891, 1246 Little V. Kerr 196 Little V. O'Brien 633, 866 Little, etc., Co. v. Lightbourne. 603 Little Rock June. Ry. v. Wood- ruff 292, 296 Littleton Mfg. Co. v. Parker, 350, 353 Little Miami, etc., R. R. Co. v. Dayton 284 Little Miami R. R. Co. v. Wet- more 1062, 1064 Little Rock & Ft. S. R. Co. v. Hanniford 1221, 1228 Little Rock & Ft. S. R. Co. v. Huntington 176 Little Rock & Ft. S. Ry. Co. v. Page 160 PAGE. Little Rock, etc., R. R. Co. v. Perry 7.S9 Livesey v. Hotel Co 926 Livesey v. Omaha Hotel Co. .344, 350 Liverpool H. S. Association, In re 1040 Liverpool Ins. Co. v. Mayer ; . 1247 Liverpool Ins. Co. v. Massachu- setts 12, 29, 367, 1247 Livingston v. Lynch 27 Livirisston v. Pittsburgh, etc., R. R. Co .326 Livingston v. Van Ingen 89 Livingston County v. First Nat. Bank 121, 123, 124, 152 Loan Assn. v. Stonemetz 472 Loan Ass'n. v. Topeka 320, 1245 Locke V. Venables 495 Lockett V. Van Alystyne 861 Lockhart v. Craig St. Ry. Co 76 Lockhart v. Van Alstyne 476, 485, 493 Lockport & B. R. Co., In re 40 Locks V. Nashua & Lowell R. R. Co 271 Lock's Will, In re 238 Lockwood V. Mich. Nat. Bank, 434, 444, 447, 450, 517, 529 Loftin V. Citizens' Nat. Bank. . . . 1256 Logan Co. Nat. B'k v. Townsend, 851 Logan V. Stogdale 282 Lohman v. N. Y., etc., R. R. Co., 858 Lohman v. St. Paul, etc., R. R. Co 287 Lohr v. Railroad Co 290 Lombard v. Case 559 London, etc., Ry. Co. v. Fair- clough 510, 656 London India Rubber Co., In re, 489, 1133 London v. Vanaore 445 London Tobacco Pipemakers' Co. V. Woodroofe 639 London, etc., Ass'n v. Wrexham, etc., Ry. Co 860 London & C. B. Co. v. London & R. P. B'k 570 London, etc., Disc. Co., Re.. 689, 701 London & Provid. Consol. Coal Co., Re 892 London & S. W. R. R. Co. v. Southeastern R. Co 114 Long V. Harrisburg & P. R. Co. . 301 Long V. Stewart 538 Longheed v. Dykeman's Bap. Ch. & Soc 241 Long Island R. R. Co. Elec. Case, In re. . . .412, 419, 422, 423, 425, 442 Long Island R. Co., In re .378, 582, 657, 70,6 Longley v. Stage Line 370 Longmont, etc., Co. v. Coffnian.. 430, 435 Took, In re 238 Ixxii TABLE OF CASES. I'AGK. Looman v. Brockway 1069 Loomis V. Davenport & St. P. R. Co 165 Lorcher v. Supreme Lod. Knights of Honor 781, 784 Lord Belhaven's Case... 186, 191, 192 Lord V. Brooks 49.5, 497 Lord V. Copper Miners' Co 698 Lord V. Haycock 548 Lord Talbot's Case 1021 Lord V. Tonkers Fuel Gas Co 200 Lorenz v. Jacob 281 Lorie v. Nortla Chicago City Ky. Co 291 Loring v. Brodie 536 Loring V. Salisbuiy Mills Co., 537, 653, 652 Loring v. Woodward 578 Lorillard v. Clyde 90, 741 Losee v. Bullard 1153 Loubat V. Leroy. . . 432, 581, 583, 588, 593 Loughbridge v. Harris 279 Louis V. Weber 433 Louisiana Paper Co. v. Waples. . . 628, 884, 875, 879 Louisiana Savings Bank & Safe Deposit Co., In re 986 Louisville Bkg. Co. v. Paine 818 Louisville, etc., R. R. Co. v. Boney, 127, 807 Louisville C. C. & R. R. Co. v. Letson 9.3, 602, 1166 Louisville, etc., R. R. Co. v. Tenn. 322 Louisville, etc., R. R. Co. v. The State 1280 Louisville Gas Co. v. Citizens Gas Co 150, 1180, 1201 Louisville v. University of Louis- ville 1174 Louisville N. C. & A. Ry. Co. v. Flanniugan 849 Louisville & E. Mail Co. v. Bar- bour 1254 Louisville & K R. R. Co. v. Col- lins 1067 Louisville & K. R. Co. v. Literary Society of St. Rose 76, 817 Louisville & N. R. Co. v. R. R. Com. of Tenn 1229 Louisville, etc., Tp. Co. v. Merri- weather 659 Lounsbury v. Protection Ins. Co. 778 Love V. Harvey 530 Lovelace v. Doran 1038 Loveland v. Garner 718, 1044 Lovell V. Minot 5.37 Low V. Studebaker 361 Lowe V. Edgefield & K. R. R. Co. .354 Lothian v. Wood 838 Lowell v. Boston 320, 1245 Lowell F. C. Sav. Bank v. Win- chester J07 PAGE. Lowryv. Com. Bank 512, 529, 535, .558, 6.5:{ Lrauser v. Ruckel 1033 Lucas V. Bank of Georgia 93 Lucas V. White Line Tr. Co 74 Luckhart v. Alstine 672 Luckombe v. Ashton 399 Ludowisky v. Polish, etc., Soc, 59, 592 Luhrs v. Luhrs 393 Luhrs V. Supreme Lodge Knights & Ladies of Honor 389 Luling V. Atl. Mut. Ins. Co. .486, 669 Lumbard v. Aldrich 445 Lumpkin v. Jones 1119 Lumsden's Case, L. R 324, 539 Lun v. Robertson 1165 Lund V. New Bedford Bohlman v. Green Bay, etc., R. R. Co 286 Lung Chung v. Northern Pao. Ry. Co 6*3 Lutheran' s Congregation' s Appeal 254 Lungren v. Pennell 7-38 Lux V. Haggin .3:i Lyceum v. Ellis 19.3 Lycoming Co. v. Gamble 1250 Lycoming F. Ins. Co. v. Longley, 93 Lycoming Ins. Co. v. Bixbee 395 Lyde v. Eastern Bengal Ry. Co. . 704 Lydney & Wigpool Iron Ore Co. V. Bird -. . . . 745 Lyman v. Boston, etc., R. R. Co 1228, 1233 Lyman v. Central Vermont R. Co 942, 983 Lynch v. Eastern, etc., R. R. Co. 124 Lyndon Mill Co. v. Lyndon, etc., Inst 202, 826 Lyon V. Am. Screw Co., 730, 733, 734 Lyon V. Culbertson 530, 532 Lynn v. Freemansburg Building & Loan Ass' n 438 Lyon V. Rolfe 381 Lyons v. Martin 1064 Lyons v. Orange. .52 Lyttleton v. Blackburn 584 M Macauley v. Robinson 892, 1137 Macedan & B. O. R. Co. v. Snl- decker 355 Macedon & B. PI. R. Co. v. Snedicker Machel v. Nevison 420 Machinists' Nat. B' k v. Field, 577, 828 Mack V. De Bardelaben C. & L. „Co 408 687 Mackay v. Com. Bank 7 Mackintosh v. Flint, etc., R. R. Co J88 Mackensey v. Ramsays 820 TABLE OF CASES. Ixxiii PAGK. Macon v. First Nat. Bank 1269 Macon V. Macon & W. R. Co 80 Macon & A. R. Co. v. Macon & D. R. Co 88 Macon & B. R, Co. v. Stamps, 278, 1205 Maeon, etc., R. 'R. Co. v. Vason, 205, 628, 629, 659, 670 Macon & N. R. v. Mayes 151 Macon Webster R. R. Co. v. Davis, 85 Maderla v. Merchants' Exch 597 Mandlebaum v. N. A. Min. Co. . . 576 Madison v. Fireman's Ins. Co 506 Madison Ave. Bap. Cliurch v. Bap. Churcli 405 Madison, etc., R. R. Co. v. White- neck 1228 Madison Co. v. Brown 324 Madison County Ct. v. Richmond, etc., R. R. Co 347 Madison W. & M. P. R. Co. v. Watertown & P. P. R. Co 80 Magee v. N. P. C. R. R. Co 1069 Magill V. Kaufman 839 Magruder v. Colston 907 Maguire v. Allen 962 Maguire's Case 542 Magwood v. Railroad Bank, 5-34, 535 Mahody v. Bush wick 291 Mahan v. Wood 318, 1207 Mahone v. Manchester & L. R. Co 216 Mahoney v. Middleton 835 Mahoney v. Ry. Co 95 Mahoney v. Spring, etc., Co 271 Mahoney Minn. Co. v. Bennett. . 46+ Males V. Sprague 1028 Main v. Casserly 866 Main v. Mills 461 Maine Bank v. Ogdeii 1100 Make Lime Mill Min. Co. v. Mallery, In re 986 Mallory V. Hanaur, etc., Co 140 Malloiy V. Hannaner Oil Works, 1099 Mallory v. Russell 30 Malloy V. Mallett 1160 Malone v. Transp. Co 57 Maltby v. Northwestern Va. R. Co 70, 326 Maltby v. Reading R. R. Co. 1249, 1252 Manchester, etc.. Loan Assn. L. R., Inre 124,804, 805 Manchester, etc., R. R. Co. v. Fisk 208 Manchester & L. R. R. v. Con- cord R. R 131, 847, 849, 850 Manchester & K. R. R. v. City of Keen 360 Mandater v. Smith 1252 Manderson v. Com. Bank of Penn. 213, 704 Mandeville v. Riggs 28 PAGE. Mandion v. Fireman's Ins. Co. . . 909 Maneely v. Knights of Birming- ham 381,383,393, 394 Mangles v. Grand Collier Dock Co .361 Manahan v. Varnum 233 Manhattan Hardware Co. v. Pha- len 195, 831, 847 Manheim, etc., Co. v. Amdt 1207 Manill v. Little Falls Mfg. Co. . . . 705 Manns v. Brookville Nat. Bank, 511 Mann v. Chandler. 824 Mann v. Cooke, 861, 655, 679, 878, 901 Mann v. Illinois 1222 Mann v. Oriental Print Works. . 1067 Mann v. Pentz 913, 920, 1134 Mann v. Second Nat. B'k of Springfield 837 Mann V. Williams 53, 68 Manning v. Supreme Lodge A. O. U. W 391, 392, 761 Manning v. Gasharie 27 Manning v. Quicksilver Mining Co 493, 559 Mannix v. Pursell 240 Mansfield v. Fuller 1009 Mansfield, etc., R. R. Co. v. Brown 3,58 Mansfield, etc., R. R. Co. v. Drinker 62, 123 Mansfield, etc., R. Co. v. Stout, 72, 358 Mandfield & New Lisbon R. R. Co. V. Smith 354 Manson v. Grand Lodge 596, 598 Manufacturing Co. v. Bradley. . . 1017 Manufacturing Sav. Bank v. O'Reilly 466, 695 Manufacturer's Nat. B'k of Ra- cine V. Newell 837 Manus's Case 502 Manville v. Edgar 1013 Mape's Estate, In re 569, 840 Marblehead Mut. F. Ins. Co. v. Underwood 783 Marbly v. Morgan 546 Marbury v. Ehlen 534, 535 March v. Eastern Railroad Co. 487, 652, 691, 706, 709 March v. Burroughs 1147 Marcus v. Hannibal, etc.. Plank Road Co 4.57 Marie v. Garrison 174, 421 Marietta v. Fearing 436, 437 Marietta & Cin. R. E. Co. v. Elliot 1207 Marine, etc.. Bank v. Jauncey. . . 56 Marine Bank v. Butler Colliery Co 831 Marine Bank v. Clements 212 Marine Bank v. Ogden 1099 Marine Cent. Co. v. Maine 1283 Mai'ine Ins. Co. v. St. Louis I. M. Newry, etc., Ry. Co. v. Coombe, 325, 5.!i» Newton v. Daly, 30, 510, 511, 1152, 123S Niagara Falls Paper Mfg. Co., In re .54, 280 Nicholas v. Oliver 824 Nicliolls V. Eaton 548 Nichols V. Burlington, etc., R. Co. 365 Nichols V. Stephens 349 Nichols V. Mase 166 Nicholson v. Leavitt. 234 Nickerson v. English .574, 642, 668 Nicol V. Walworth 2."j-t Nicol's Case 644, 64(> NicoU V. New York, etc., R. R. Co 231, 110-' Nicollet Bank v. City Bank. .503, 522, 54 it Niles V. Edwards 551 Nimick v. Mingo Iron Works ](>]:; Nimmons v. Tappan 450, 1045, ll-j:; Ninth Ward National Bank v. City of Newark. 1249, 1250 Noble V. Callender 342, 369 Noble V. Turner 543, 563 Nockels V. Crosby 28, 938 Noesen v. Port Washington 340 Nonantum, etc., Co. v. HolUston Wills 918, 1134 Norfolk & W. U. Co. v. Com., 103, 1269 Norfolk & W. R. Co. v. Cottrell.. 609 Norfolk & W. R. Co. v. Shippers' Comp. Co 74 Norfolk & W. R. Co. v. Stevens.. 293 Norris v. Harrison 494 Norris v. Johnson 874, 1019, 1032 Norris v. Mayor, etc 115i> Norris v. Stapa 436 Norris v. Thompson 248 Norris v. Waco 1261 North V. Forest 567 North V. Phillips 532, 542, 65 1 North V. State 68 North Branch Co. v. Germnell, 681, 921 Ixxxiv TABLE OF CASES. I'AGK. North Carolina R. K. Co. v. Leach 342 North Cent. Mich. R. R. Co. v. Eslow 343 North Fifth St. Mut. Land Ass"n. In re 6, 48 North Hempstead v. Hempstead, 17, 24 North Hudson Mut. Bldg. & Loan Ass'n. V. First Nat. Bank . . 149, 194 North Missouri R. R. Co. v. Maguirs 1182 INorth Missouri R. R. Co. v. Winkler 357, 358 North Saflord Steel, etc., Co. v. Ward 363 North Shore, etc., Ferry Co. In re 413 North State Copper & Gold Min. Co. V. Field 610 Northampton Bank v. Smith 451 Northeastern, etc., R. R. Co. Ex parte , 1191 Northeastern Neb. Ry. Co. v. Frazier 298 Northern Cent. R. Co. v. Bastian, 198 North Central Coal Co. v. Coal & Iron Co. 281 Northern Cent, Ry. Co. v. Holland 290 Northern, etc., Co. In re 412 Northern Pac. Ry. Co. v. Garland, 1194 Northern R. R. Co. v. Concord & C. R. R. Co 284 Northern R. R. Co. v. Eastern Counties R. R. Co 114 Northern R. R. Co. v. Miller 327 Northey v. Johnson 30 Northrop v. Bushnell 901 Morthrop v. Curtis 514 Xorthrop v. Miss. Val. Ins. Co.... 839 Northrop v. Newton, etc.. Tump. f'o 509, 514 Xoriliumberland Co. Bank v. Eyer 59 Northwestern Ben. & Mut. Aid. Ass'n. V. Hand 780 Northwestern Mut. Life Ins. Co. V. Cotton Exch. Real Estate Co. 882 Northwestern R. Co. v. Payne. . . 77 Norton v. Hodges 367 Norton v. Norton 483 Norton v. Union Trust Co 648 Norton V. Walkill, etc., R. B. Co. 1164 Norwich Ins. Soc. L. R., In re. . . 367 Norwood & M. R. Co., In re..295, 1159 Norwich & W. R. Co. v. Wor- cester 12C Nourse v. Prince 552 Noyes v. Marsh — 547 Noyes V. Rich 181 Noyes V. Smith, et al 1067 Noyes v. Spaul^ing, 515, 529 532 542, 552 PAGE. Nugent V. B. C. & M. R. Corp. 154, 155 Nugent V. Supervisors, 115. . .121, 123, 324, 1211 Nulton V. Clayton 331, 340 Nutter V. Lexington, etc., R. R. Co 349 Nutting V. Hill 69 Nye V. Burlington & L. R. Co. . . . 603 Nyce's Appeal 537 O Oakes v. Turquand 890 Oakland v. Carpenter 836 Oakland R. R. Co. v. B. B. & F. V.R. R. Co 789 Oakland Gaslight Co. v. Dameron 56 Gates V. Supreme Court of Fores- ters 600 Oberlander v. Speiss '. . 1054 O'Brien v. Home Ben. Soc 754 O'Brien v. Shaws, etc., Co. 604 Occum Co. V. Sprague Mfg. Co. 77, 225, 697 O'Connor v. Irvine 547 Ode V. Manhattan Ry. Co 294 Odd Fellows, etc., Co. v. Glazier, 327 Odd Fellows Mut. Assn. v. Sweet- ser 779, 782 O'Donnell v. C. R. Johns & Co. 6 Oesterreiclier v. Sporting Times Pub. Co 57 Ogden V. City of St. Joseph 1250 Ogden V. County of Daviess 319 Ogden V. Folliott 1015 Ogden V. Gibbons 89 Ogden V. Lathrop 553 Ogden V. Murray 409, 456 Ogden V. Saunders 1179 Ogdensburg, etc., R. R. Co. v. Frost 326 Oglesby v. Attrill 81 Ogle V. Knipe 573 Oglivoe V. Know Ins. Co 1135 Ogilville V. Knox Ins. Co 874, 882 Ogilvie V. Knox ins. Co 875 Ogivie V. Knox Ins. Co 1147 O Hare v. Sec. Nat. Bank 187 Ohio V. Cleveland R. R. Co 559 Ohio College v. Rosenthal 672 Ohio, etc.,R. Co. v. McPherson, 199,416,417, 456 Ohio Life Ins. Co. v. Merchants' Ins. Co 79, 99, 102 Ohio Life & Trust Co. v. Debolt, 87,' 1178 Ohio & M. R. Co. V. Dunbar 151 Ohio & M. R. R. Co. v. Ind. & Cinn. R. R. Co 152 Ohio & M. Ry. Co. v. People, 1006, 1007, 1157 TABLE OP CASES. Ixxxv PAGE. Ohio & M. R. Co. V. Wheeler, 22, 111, 602 Ohio & M. R. R. Co. v. Weber. .. 315 Ohio Steam Nav. Co. v. Winsor, 133 Ohio Val. Ry. & Min. Co. t. Thomas 293 OhioVal.Ry.&Min.Co.v. Kuhn, 293 Ohleyerv. Bunce 1138 Oil Co., etc., R. R. Co. v. Penn. Tranps Co 849 Oil Co V. Marbury 467 Olcott V. Supervisors 283 Olcott V. Tioga R. R. Co. 100, 205, 824 Old Colony R. R. Co. v. Evans 227 Oldtown & L. R. R. Co. v. Veazie, 344, 632, 1212 Oler V. Bait. R.R. Co 636 Olery v. Brown 584, 591, 593, 752 Oliver v. Hopkins 763 Oliver Lee & Co's Bank, Re. .1201 1211 Oliver v. Liverpool Life & Eire Ins. Co 29, 366, 367, 1247 Oliver v. Union I^oint & W. P. R. Co 277 Olson V. St. Paul M. & M. Ry. Co 272 Olmstead v. Camp 33, 279 Olmstead v. Farmers' Mut F. Ins. Co 596, 598 Olmstead v. Masonic Mut. Ben. Soc 391 Olmstead v. Rochester & P. R. Co 979 OIney v. Conn. Land. Co. 694, 796, 1140 Onley v. Connecticut L. Co 1132 Omaha Belt Ry. Co. v. McDermott 302 Omaha Horse Ry. Co. v. Cable Tramway Co 293, 298, 1184 O'Meara V. North Am. Mining Co. 651 O'Neal V. King 359 Oneida Bank v. Ontario Bank, 183, 863 O'Neill V. Whigman 554 Ontario Salt Co. v. Merchant Salt Co 140 Ontario State Bank v. Tibbitts, 58, 59 Oregon R. & Nav. Co v. Oregon- ian R. Co 69,84,149, 153 Oregon Ry. & Nav. Co. v. Mosier 293 Oregon Ry. etc., Co. v. Oregonian Ry. Co 22, 78 Oregonian Ry. Co. v. Oregon R. & N. Co 65, 928 Oregon Steam Nav. Co. v. Win- sor 846 Order Mut. Companions v. Griest 390, 759 Oregon Cent. R. R. Co. v. Scog- gin 352, 365, 645, 1056 Oregon v. Gennings 346 Or. Ry. & Nav. Co. v. Smalley. . . 1221 O'Reilly v. Bard 1012, 11.34 Oriental Ins. Co. v. Glancy 757 Ormsby v. Vermont Copper Min. Co 415, 416, 651 PAGE. Orno V. Wedgewood 60 Oroville, etc., R. R. Co. v. Plumas Co 37,903, 1009 Orr V. Ins. Co 80 Orr Water Ditch Co. v. Reno Water Co 450, S:i7 Ortigosa v. Brown 512 Orynski v. Loustaunan . . 350, 031 , 632 Osborne v. B'k of U. S 1267 Osborn v. Hart 270 Osborne v. Mobile 1270 Osborn v. N. Y. & N. H. R. R. Co 127.-> Osceola Tribe v. Schmidt. . , .JS4 Osgood V. King 878, 882, 904 Osgood V. Laytin..461, 475, 665, 883, 913, 969 Osgood \'. Ogden 969 Oskaloosa Works v. Parkhurst . . 353 Ossipee, etc., Co. v. Canney..71, 925 Oswego Fall Bridge Co. v. Fish,84, 88 Oswego, etc., Factory V. Dolloway, 1251 Otto V. Brevoort, etc., Co 903 Otis V. Gardner 512, 513, 529 Ottawa, etc., v. McCaleb 1250, 1252 Ottawa, etc., R. R. Co. v. Hall. . . 344 Ottawa, etc., R. Co. v. Larson. . . 306 Ottawa O. C. & G. C. R. Co. v. Adolph 293 Ottawa, etc., R. Co. v. Peterson. . 306 Otto V. Tailors', etc.. Union. .579, 580, 581, 590, 591, 594, 752 Ould V. Washington Hospital, 102, 248 Overende, etc., Co. v. Gibb 463 Overseers v. Sears 19 Overmyer v. Williams 77 Owen V. Homeopathic Mut. Life Ins. Co 982 Owen V. Kellogg. \ 981 Owen V. Pardy 832 Owen V. Smith 1162, 1163 Owens V. Baltimore, etc., R. Co. 767, 768 Owens V. Missouri Pac. Ry. Co. . . 293 Owens V. Missionary Soc. of the M. E. Church 30, 2.JS Owens V. Routh 651 Owings V. Hull 544 Owings V. Speed 821 Oxford, etc.. Society, In re. . .461, 482 Oxford Tump. Co. v. Bunnell, 514 563 Oxford Turnp. Co. v. Burns 550 Pacific Coast Ry. Co. v. Porter. . . 302 Pacific R. R. Co. v. Cass Co 158 Pacific R. R. Co. v. Maguire 1182 Pacific R. R. Co. v. R. R. Co 306 Pac. R. R. Co. V. Renshaw 1205 Pacific R. R. Co. v. Seeley. .86, 225 Pacific R. Co. V. Sellers 154 Pacific R. R. Removal Cases 602 Ixxxvi TABLE OF CASES. PAGE. Pacific Factor Co. v. Adler 139 Pacific Guano Co. v. Mullen 56 Pacific Kat. B'k Cas SOO Pacific Trust Co. v. Dorsey 672 Pack V. Coalfield Coal Co 881 Packard v. First Uniyersalist Soc. 216 Padston, etc., Co., In re 1168 Paducah, etc., Bank v. Parks. . . . 339, 357 Page V. Austin 858 Page V. Contoocook Val. E. R. Co 371 Page V. Fall Kiver, W. & P. R. Co 216 Page V. Heinberg 224 Page V. Parker 1064 Paige V. Stone 216 I'aine, Ek parte 725 Paine v. L. E. et<;., R. Co 125 Paine v. Stewart 1017, 1028 Painesville, etc., R. R. Co. v. King, 672 Painsville, etc., R. R. Co. v. Leve- rett 493 Palfrey v. Paulding 888 Palmer v. Commercial Trav. Mut. Ace. Assn 751 Palmer v. Howes 463, 554 Palmer v. Lawrence 68, 865 Palmer v. Merrill 500 Palmer v. Stevens 824 Palmer v. Vandenberg 26 Palmetto Lumber Co. v. Risley. . 57 Pana v. Bowler 323 Panhandle Nat. Bank v. Emery, 1138, 1163 Panuley v. Tenth Ward Bank 956 Parea v. Lippincott. 322 Parham V. Justices 281 Parish V. Wheeler ...179, 848, 849, 850, 854, 862, 865 Parish of Bellport v. Tooker 1084 Parish of St. James v. Newbury- port&A. H. R. Co ;.... 832 Park V. Grant Locomotive Works, 382,452,453,477, 479 Park V. Spaulding 27 Parke County Coal Co. v. Terra HautePaperCo 794 Parks V. Hemans 628 Parker v. Bernal 454 Parker v. Great Western R. R. Co. 87 Parker v. Glover 5-38 Parker v. Humas 355 Parker v. May 1167 Parker v. Mason 496 Parker v. Metropolitan R, R. Co. 1200, 1211 Parker v. jSTorth Cent. R. R. Co., 343 Parker v. N. O. B. R. Co. . . .160, 161, 168, 172 Parker v. Receiver 210 Parker V. Sun Ins. Co 1284 Parker v. Thomas 1050 PAGE. Parker v. Way cross & F. R. Co... 1067 Parkersburg V. Brown 1245 Parrott v. Byers 428, 562, 6.J2, 667, 710 Parrot v. City of Lawrence, etc... 1185 Parrott v. Worsfold 573 Parry v. Merchants' Exchange Co. 227 Parson v. Joseph 669 Parsons Case 325 Parsons v. Chester Oak L. Ins. Co 966 Parsons v. Hayes 693 Parsons v. Howard 330 Partridge v. Badger 80 Paschall v. Acklain 248, 251 Passenger Conductors' Assn. v. Birnbaum . . .395, 396, 595 Passenger Ry. Co. v. Easton..40, 1239 Passmore v. Mott 824 Passumpsic R. R. Co. v. Taggart, 358 Patch V. City of JSoston 277 Pattee's Appeal 905 Patterson v. Arnold 52, 55, 936 Patterson v. Lynde 875, 917, 919, 924, 1017 Patterson v. Minn. Mfg. Co., 1037, 1039, 1044 Patterson v. Robinson 1039 Patterson v. Stewart 460 Pattison v. Syracuse Nat. Bank... 1062 Pattison v. Yolo County 34 Paul V. People 1125 Paul y. Virginia 84, 104, 105, 602 Paulding v. Chrome Steel Co., 458, 794 Pawlett V. Clark 252 Paxton V. First Nat. Bk 741, 746, 835 Paxton et al. v. Beacon Hill, etc. 1045 Payette v. Free Home, etc., Ass'n, 66 Payn v. Rochester Mut. Relief Soc 588 Payne v. Elliott 880 Payne v. New Soutli, etc., Co 740 Payne v. Stewart 506 Payson v. Stoever 882 Payson v. Withers 362, 1206 Peabody v. Eastern Methodist Soc. 31 Peabody v. Flint 623, 680, 687, 706, 716 Pearce v. Billings 573 Pearce v. Madison, etc., K. R. Co 117 J97 1099 Pearce v. Madison R. R. Co' .' 1213 Pearson v. Concord R. R. Co 188 Pearson v. Concord R. Corp., 459, 466 Pearson v. Zable. 34 Pease v. Peck 906 Peavery v. Greenfield 1257, 1259 Peckham v. Hendren S36 Peckham v. Newton 53s Peckham v. North Parish 94, lloo Peck V. Bank fi3(; Peck V. Coalfield Coal Co 885 TABLE OF CASES. Ixxxvii 617 521 371 PAGE. Peckv. Equitable Acc. Assn., 754, 774 Peck V. Lockwood 437 Peck V. Miller 1033 Peck V. Providence Gas Co 534 Peck V. Superior Siiort Line Ry. Co 298 Peddicord v. Baltimore, etc., R. Co 306 Pedell V. Gwynn 1021 Pedrick v. Bailey 433 Peebles v. Patapsco Guano Co . . . 1049 Peek V. Deny. . , 644 Peek V. Detroit Novelty W'ks.. . . 840 Peek V. Doran Wright Co 849 Peek V. Guerney 721, 723 Peele v. Phillips 1042 Peet V. Great Camp of the Knights of the Maccabees 773 Peik V. Chicago & If. W. R. R. Co 1221 Pellatt's Case, L. R 359 Pembina Cons. S. M. & M. Co. v. Penn 103, 105 , Pender v. Lushington 698 Pendergast v. Bank of Stockton, 501, Pender v. Lushington . Peninsular, etc., R. R. Co. v. Duncan 308, 331, Peninsular, etc., R. R. Co. v. Howard 371 Peninsular, etc., Ry. Co. v. Thorp, 62 Penn. v. Wadhams 240 PennoCk v. Coe . . . . 85, 158, 161, 172 Penniman v. Briggs 1018 Pennsylvania College Cases, 791, 1272 Penn. Co. v. Wentx 1228 Penn. Co. for Ins. v. Board of Re- vision 1252 Peniftylvania Co's Appeal 265 Penn. D. & M. «Nav. Co. v. Dau- dridge Pennsylvania v. Erie, etc., R. Co., Pennsylvania, etc., Co. v. Com... 1252 Penn., etc., R. R. Co. v. Leuffer, 1033 Penn. Mut. Co. v. Hapgood, 615, 739, Pennsylvania Mut. L. Ins. Co. v. Wilier 778 Pennsylvania R. Co. v. Alleghany C. &LR. Co Penn. K. Co. v. Bowers, 1179, 1191, 1199 Penn. R. R. Co. v. Canal Com'rs. 21, 77 Pennsylvania R. Co. V. Com., 501, 569 Pennsylvania R. R. Co. v. Dun- can 1174 Pennsylvania R. Co. v. Ellett. . . . 154 Penn. K. R. Co. v. Krick 1063 Pennsylvania R. Co. v. Magee, 272, 297 Pennsylvania R. R. Co. v. Phila- delphia 319 77 475 741 178 PAGE. Penn. R. R. Co. v. Riblet 1228 Pennsylvania Ry. Co's Appeal. . . 512 Pennsylvania State R. R. Co.'s Appeal 65;! Pennsylvania S. V. R. Co. v. Cleaiy 295, 300 Pennsylvania S. V. E. Co. v. Kel- ler .,.;, 276, 292 Pennsylvania S. V. R. Co. v. Walsh 298, 300 Penn. R. R. v. St. Louis, etc., R, R , 22, 78, 153, 174 Pennsylvania Tranps. Co.'s Ap- peal 807, 809, 811 Pennsylvania's Appeal 537 Penny v. Croul 285 Penny's Case 521 Pennypacker v. Capital Ins. Co. 108 Penobscot, etc.,R. R. Co. v. Bart- lett 328, 365 Penobscot Broom Co. v. Lamson, 1159 Penobscot R. R. Co. v. Dummer, 330,332,341,348,351, 629 Penobscot R. R. Co. v. White, 345, .348, 351, 353 Penobscot & K. R. R. Co. v. Bart- lett 052 Penobscot & Kennebec R. R. Co. v. Dunn 195, 345, 358, 629 Pensacola Tel. O. Co. v. West. Un. Tel. Co 1243, 1270 Pensacola & A. R. Co', v. State, 1236 Pentz V. Citizens', etc., Co 657 Pentz V. Hawley 969, 978 Penzel Grocer Co. v. Williams. . . 986 People V. Abbott 1118, 1124 People V. Ah Sam : 56 People V. Albany, etc., R. R. Co. 403, 417, 420, 1076, 1094, 1096, 1114, 1124, 1129 People V. Albany R. Co 445 People! V. Atlantic Ave. Ry. Co. 1085, 1088, 1111 People V. Am. Bell Tel. Co... 107, 1080, 1248 People V. American Institute 583 People V. Assessors 559 People V. Aushei Chesed Cong. . . 727 People V. Bank of Niagara 1088 Pfeople V. Bank of Passaic 1087 People V. Bartlett ■ 1127 People V. Barrett 321 People V. Batchelder 583 People V. Batchelor 427 People V. Beck 321, 445 People V. Ben. Soc 432, 440 People V. Board of Fire Under- writers 579 People V. Board of Trade 591 People V. Board of Trustees 68 People V. Bogart 1088 People V. Bowen 22 People V. 15. P. & C. 1. 1!. li. Co., 1197 Ixxxviii TABLE OF CASES. PAGE. People V. Bradley 1251 People V. Bristol, etc., 1084, 1101, 1114, 111.5, 1120 People V. Broadway Ry. Co 1085 People V. -Brooklyn 1246 People V. Brooklyn, etc., K. R. Co.. 807, 952 People V. Budd 1226 People V. California College, 1154, 1162, 1164 People V. Campbell 417, 445 People V. Carpenter 1093 People V. Central Car Mfg. Co. . . 735 People V. Cent. Pac. R. Co., 58, 1262, 1263 People V. Chambers 51, 636 People V. Chapman 322 People V. Cheesman. . . 23, 42, 45, 74 People V. Chicago Bd. of Trade, 698, 726 People V. Chicago & Alton R. Co. 1005 People V. Chicago Gas Trust Co. 133, 140, 141 People V. City Bank of Leadville, 1091, 1092 People V. City of Spring Valley, 1117, 1118 People V. Clayton 1124 People V. Clark 1114 People V. Coleman 1251 People V. Colo. Centr. E. Co. . . . 1007 People V. College 1078 People T. Commrs 1251, 1258 People V. Coramr's, etc 315 People V. Com. of Taxes, 1251, ■ ■ 1254,1265, 1275 People V. Conover 1125 People V.Cook 45,807, 1084 People V. Coon 614 People V. Crockett, 435, 516, 517, 519 People V. Crossly 435 People V. Cummings 426, 999 People V. Davenport 1251 People T. Davidson 1091 People V. Dashaway Ass'n 1122 People V. Detroit G. H. & M. R. Co 1218, 1222 People V. Del Mille 1113, 1114 People V. Dispensary 1101 People V. Dispensary, etc., Soc. . .' 1089 People V. Distilling Co 141 People V. Doersbury 1124 People V. Dutchess & C. E. Co. . . 1006 People, etc., v. Miller 554 People V. Elmore 428 People V. Equitable Gas-Light Co. , 603 People ex rel., Corrigan v. Young Men's Father Mathew's Ben. Soc 584, 588 People, ex rel. Field v. Northern Pac. R. H. Co 733 People v. Elmore 502 People V. Ferguson 1251 PAGE. People' s Ferry Co. v. Belch . . 334, 353 People V. Fire Department, etc. . . 583 People V. Fire Ass'n 105 People V. Fire Dept 594, 598 People V. Fishkill 1101 People V. Flint. . . . : 1112, 1117 People y. Franklin 321, 323 People V. Geneva College 1084 People V. Gilroy 40, 1239 People V. Globe Mut. Ins. Co.. 471, 1197 People V. Goss, etc., Mfg. Co 564 People V. Governors of Albany Hospital 427 People V. Grand River Bridge Co. 1095, 1109 People v. Green 1009 People v. G. I. W. Co 999 People V. Harp 322 People V. Hicks 1278 People V. Hills 1095 People V. Hillsdale, etc., Co., 1088, 1095, 1120 Peoyle v. Hoboken Turtle Club. . 587 People V. Hoffman 1265 . People V. liolden 346, 350 People V. Home Ins. Co 1251 People V. Horn S. M. Co. . . .1247, 1248 People V. Horsley 1083 People V. Hughitt 323 People V. Hutton 321 People V. Hurlburt 321, 323 People V. Improvement Co. .1088, 1089 People V. Jones 1075 People V. Kingston Tump. Co., 1085, 1090, 1092, 1114 People V. Kip 433 People V. Knickerbocker Ice Co., 1281 People V. Knickerbocker lafe Ins. Co 978, 979 People V. Knight "IIOS People V. Koiskern 275 People V. Laena 322 People V. La Rue 34, 225, 44.> People V. Logan Co 323 People V. Long Island City 1281 People V. Louisville & N. B. Co. 1.56, 1007 People V. Lowden 1118, 1119 People V. Lowe 1155 People V. Los Angelos Elec. Ry. Co :• 1116, 1196 People V. Mayor, etc., of New York 1167 People V. Mauran 231 People V. Manhattan Co 1084, 1119 People V. Manhattan Fire Ins. Co. 1065, 1086 People V. Manhattan Gas-Light Co 1002, 1231 People V. Marshall 1182 People V. Maynard 1093 People V. Med. Soc, etc 726 People V. Med. Soc. of Erie, 579, oSl, .-)94, 725 TABLE OF CASES. Ixxxix PAGE. People V. Merchanics' Aid. Soc, 083, 720 People V. Metz 1197 People V. McLean 1251 People V. Miller • 446, 519 People V. Musical Mut. Protective Union 587, 727 People V. Mut. Gas-Light Co 150 I'eople V. Mutual Life Ins. Co. 127, 804 People V. National Gold Bank. . . . 1256 People V. I^at. Sav. Bank, 49, 1091, 1092 People V. Kewton. . .75, 449, 1094, 1203 People V. New York Board of Underwriters 440 People V. New York Commercial Association 579 People V. New York, etc., Co 1251 People V. New York Tax Commrs. 1251, 1281 People V. Niagara 29 People V. North Rlv. Sugar Re- finery 142,151, 193,831, 846, 1102, 1105 PeoiJle V. Oakland, etc., B'k., 1089, 1119, 1197 People V. O'Brien 1194 People V. O'Brien. .469, 952, 1127, 1153, 1163, 1166, 1167, 1168, 1196, 1197, 1198 People V. O'Keefe 1091 People V. Oliver 323 People V. Ottawa Hydraulic Co. 1115, 1119 People V. Pac. Mail S. S. Co. ,730, 733 People V. Pac. R. C. Co's 1274 People V. Paton 730, 731 People V. Pease 1118, 1125 People V. Peck 312, 323, 402, 425 People V. Pharris 56 People V. Phoenix Bank 1119 People V. Pittsburgh K. R. Co . . . . 282 People V. Pres. Manhattan Co... . 1116 People V. Purdy 1282 People V. P. & T. R. C 452 People V. Ransom 1009 People V. Ravens wood, etc., T. Co 1113 People V. Real Estate Bank 1084 People V. Rec. Dist 26, 34 People V. Refining Co 133, 140 People V. Remington... 797, 1032, 1141, 1142 People V. Rensselaer Ins. Co 52 People V. Rensselaer & Saratoga R. R. Co 1127 People V. Renss 1087 People V. Rice 1273 People V. Ridgley 1097 People V. Robinson, 411, 428, 449, 514 People V. Rogers 985 People V. Runkel 255 People V. R. R. Co 733, 1115 PA&E. People V. S. F. Sav. Union 477 People V. St. George's Soc .579 People V. St. L. etc., R. Co 733 People V. Sailors Snug Harbor, 432 579 People V. St. Stephen's Church. . 727 People V. Santa Anna o22 People V. Selfridge 44 People V. Seneca L. G. & W. Co., 1156 People V. Several Defendants .... 58 People V. Simonson 239 People V. Smith 322, 323 People V. Squires 1221, 1222 People V. Stanford.. ..23, 124, 150, 1084, 1113, 1117 People V. Steele 999 People V. Sterling Mfg. Co 898 People V. Stockton, etc., R. R. Co. 47, 52, 368, 636 People V. Straton 1119 People V. Sturtevant 707, 952, 1197 People V. Suffern .321 People V. Superior Court 1001 People V. Supervisors , 476 People V. Supervisors of Chenango County ions People V. Supervisors of S. Fi . . . . 1009 People V. Supervisors of West- chester County 1009 People V Susquehanna K. B. Co. 955, 960 People V. Sweeting 107") People V. Tax Commrs 1276 l'S>2 People V. Thatcher. , 1118 People V. Theatrical Mechanical Ass'n 587 People V. Thompson 1084, 1 120 People V. Throop 435, 724 People V. Troy House Co 52 People V. Tump. & Bridge Co.. . . 1114 People V. Twaddell 420 People V. Utica Ins. Co 76, 77, 78, 1082, IIJ.-) People V. Universal Life Ins . Co. , 987 People V. U. S. Mer. Kep. Co. . . . 731 People V. Walker 730, 731 , 734 People V. Washington, etc., Bank, 1088 People V. Washington Ice Co. 950, 952, 1129 People V. Weaver 1259 People V. Wemple 12, 29, 1251 People V. Whitcomb 11 18 People V. White 469, 1110, 1103 People V. Williams 26, 34 People V. Williamsburg, etc., Co. 1119, 1251 People V. Wilson 1079 People V. Worthington 1273 People V. Wren 1152 People's B'k v. Grindley 563 People's Bl'd'g & Loan Assn. v. Furey 486, 6.';3 People's Bank v. Gridley 542 People's Brew. Co. v. Borbinger, 547 xc TABLE OF CASES. PAGE. People's Mut. Ins. Co. v.Wescott, 20.5, 028 Peoria etc., E. E. Co., v. Preston, 354, .363, 364, 1206 Peoria & Eock Island R. E. Co. v. Coal Valley Mining Co U4, 125 Peoria, etc., E. E. Co. v. Elting, 655, 1205 Pepton V. Com. Nat. Bank 1259 Perch V. Simmons 914 Percy v. Millaudin 184, 208, 464 Perkins v. Port Washington 346 Perkins v. Pritchard 176 Perkins v. Sanders 352, 1016 Perkins v. Union, etc., Co 329, 330 . Perkins v. Washington Ice Co. . . 201 Perrett's Case L. E, 116 Perrine v. Ches. & Del. Canal Co. 77, 82, 85 Perrine v. Granger 443, 657 Perry v. Florence 1255 Perry V.Hale 643,647, 722 Perry v. Little Eock etc., E. E. E. Co 739 Perry v. Maxwell 572 Perry v. Pearson". 466 Perry V. Turner. .874, 1015, 1018, 1027, 1028, 1032 Perry v. Tuscaloosa Cotton Seed Oil Mill Co 369, 465, 667 Persch v. Simmons 918 Perun v. Cleveland 1128 Peters v. Foster 967 Peters v. Ft. M. C Co 1024 Peters v. Lincoln & N W. E. Co. 346 Peters v. Paine 470 Peters v. Eylainds 154 Peters v. St. Louis etc., R. E. Co. 1232, 1233 Petersborough, etc., E. E. Co. v. Nashau, etc., E. R. Co 551 Petersburg v. Petersburg E. Co. 1282 Petersburg Sav. etc., Co., v. Launden 522 Peterson v. Sinclair 799 Peterson v. St. Clair 871 Peterson v. Whitebreast C. & M. Co 1066 Pettibone v. Toledo C. & St. L. R. Co 163 Pettis V. Atkins 935 Petre v. EasternEy., etc 740 Petrie v. Guelph Lumber Co 746 Peychaud v. Hood 361 Peychaud v. Love 633 Pfister V. Gerwig 772 Pfohl V. Simpson, 874, 1019, 1020, 1031 Pbelan v. Hazard 881, 902 Phelps v. Farmers', etc.. Bank, 485, 480 Phelps V. M. C. G. M. Co 835 Philadelphia v. Fox 252 Phil. V. Etdge Ave. , etc. , R. R. Co . 75 PAGE. Phil V. Western Union Tel. Co. . . . 152 Philadelphia, etc., R. E. Co. v. Maryland 116, 122, 1281 Philadelphia, etc., R. E. Co. v. Powell..., 337 Philadelphia, etc., E. E. Co. v. Woelpper. 160, 172 Philadelphia, etc., E. R. Co., v. Love 466, 796 Philadelphia Fire Ass'n v. New York 103, 105, 106 Philadelphia Loan Co. v. Towner, 183 Philadelphia R. E. Co. v. Derby, 1049, 1064 Philadelphia Trust Co. v. Board of Revision.. 1252 Phil. & Erie R. R. Co. v. Cata- wissa R. R. Co 85 Philadelphia & C. Ry. Co.'s Ap- peal 264, 492, 495 Philadelphia & S. M. S. S. Co. v. Pj^ ^ 1255 Phil. & Read! R. 6. Co. v. Derby, 1064 Philadelphia & Westchester E. E. Co. v. Hickman 358, 892 Phillips V. Blatchf ord 27, 28 Phillips V. Burlington Library Co 608 Phillips V. Bury 251 Phillips V. Campbell. 200 Phillips V. Covington & Cih. Bridge Co 353 Phillips V. Com 1094 Phillips V. Wickham, 402, 417, 420, 445, 1152 Phillips Academy v. King 235 Phillips Ins., In re 393 Phinizy v. Murray 544 Phipps V. Jones 28 Phoenix Ins. Co. v. Common- wealth 97, 100, 105 Phoenix Ins. Co. v. Copeland 196 Phoenix Iron Co. v. Com 730, 731 Phoenix Warehousing Co. v. Bad- ger. . 72, 337, 357, 361, 627, 631, 6.39,92.5, 1136 Phosphate of Lime Co. v. Green, 312, 823, 892 Phosphate Sewerage Co. v. Hart- mont 712, 746 Pickering v. Appleby 567 Pickering v. Stephenson 704, 709 Pickman v. Town of Peabody, 266, 272 Pickering v. Templeton. .679, 878, 891, 901 Pick V. Bartlet 1234 Pick V. Chicago, etc, E. E. Co 1234 Pierce v. Burroughs 495 Pierce V. Crorapton 99 Pierce v. Emery 80 Pierce v. Jersey, etc., Co 740 Pierce v. Kearney 371 Pierce v. Milwaukee, etc., E. E. Co 172, 920 TABLE OF CASES. XCl PAGE. Pierce v. Partridge 370 Pierson v. Cronl*. 461, 714, 979 Pierson v. McCurdy 188 Pierson Ileveiver, etc., v. Mc- Curdy 718 Pike V. Bangor, etc., E. K. Co — 62S, 634 Pillford V. Fire Dept 436 Pill V. Western TJn. Tel. Co 689 Pilot V. Johnson 511 Pirn's Case 325 Pine Grove v. Talcott 849 Piuedo V. Germania, etc., Co 722 Pingrey v. Cherokee & D. K. Co. 29S, 300, 301 Pinkerton v. Boston, etc., R. E. Co 307 Pinkerton v. Manchester, etc., E. R. Co 550, 651 Pinkerton v. R. R. Co 563 Pinlett V. Wright 5.38 Pitot V. Johnson 512, 518, 563 Pipe V. Bateman 27, 28, 749 Piqua Bank v. Knoop 1174 Piscataqna Ferry Co. v. Jones. . . 342, .357, .361, 655 Piscataqua Bridge Co. v. New Hampshire Bridge Co 1185 Pitclier V. Board of Trade. . . 713, 1231 Pitchford v. Davis 344 Pitts V. Temple 430 Pittsburgh B. & B. E. Co. v. Mc- Closkey 204, 302 Pittsburgh Carbon Co. v. McMil- lan; 133, 134 Pittsburgh C. & St. Louis Ry. Co. V. K. & H. Br. Co 149, 152, 153 Pittsburgh, etc., C. R. Co. v. Gazzah 328, 330, 342, 1207 Pittsburgh, etc., E. R. Co. v. Bed- fors, etc., R. R. Co 153 Pittsburgh, etc., R. R. Co. v. Clarke 339, 342, 521, 522, 554 Pittsburgh, etc. R. R. Co. v. Stewart 211, 354, .357, 898 Pittsburgh, etc., R. R. Co. v. Southwest Pa. R. R. Co 1228 Pittsburgh Exch. B'k v. N. Y. Third Nat. B'k 820 Pittsburgh Junction R. Co.'s Ap- peal....: .-.284, 285 Pittsburg V. & C. Ry. Co. v. Vance 276, 292, 293, 296 Pittsburgh W. & K. R. R. Co. v. Applegate 635, 925, 926 Pittsburgh W. & K. R. R. Co. v. Benwood Iron Works.. .273, 280, 282 Pittsburgh, etc., R. R. Co. v. County of Alleghany 672 Pittsburgh & Steubenville R. E. Co. V. Bigger 356, 357 Pittsburg & S. R. E. Co. v. Griffin, 333 Pittsburg & Steubenville E. 1!. Co. \. Woodnew o")(> PAGE. Pittsburgh & S. R. Co.'s Appeal, 121, 672 Pittsbiu'gh's Appeal 15 Pittstown V. Plattsburg 26 Pixley V. Boynton 531 Pixley V. W. P. K. R. Co 455 Plank V. E. R. Co 1067 Plank R. Co. v. Lapham 1231 Plankroad Co. v. Arndt. 1213 Planters' Bank, etc., v. Bivings- ville, etc., Co 1028 Planters' Bank v. Sharp 822 Planters' Bank v. Whittle. . . .458, 796, 1178 Planters', etc., B'k v. Andrews. . 606 Planters, etc.. Bank v. Pagett, 932, 934 Planters, etc., Ins. Co. v. Mobile Real Estate Co 568, 564 Planter's Ins. Co. v. Selma Sav. Bank. . . . 517, 518, 522, 524, 529, 545 Planters' Ins. Co. v. Comfort 760 Planter's Rice Mill Co. v. Olm- stead 215 Plate Glass Ins. Co. v. Sunley. . . . 891 Piatt v. Archer 1161 Piatt V. Ashman 1159 Piatt V. Hawkins 539 Plattville V. Galena, etc., E. R. Co 709 Plimpton V. Biglow 564, 566 Plitt V. Cox 1163 Plumb V. Cattaraugus Co. Mut. Ins. Co ■ 211 Plymouth Bank v. Bank of Nor- folk 517, 518 Plymouth First National Bank v. Price 1015 Pneumatic Gas Co. v. Berry, 823, 832 Pocock V. Reddington 538 Poindexter v. Greenhow 1184 Polar Star Lodge v. Polar Star Lodge 1159 Poland v. Railroad Co 974 Polhemus v. Fitchburg R. Co.l26, 811 Pollack V. Nat. Bk 652 Poland V. Lamoile Val. R. R. Co. 160 Pollard V. Bailey 874, 1031 Pollard V. Maddox 151 Pollard V. State 1259 Pomeroy v. N. Y. c% N. Y. R. R. Co 605 Pond V. Farmingham 789, 794 Pond V. Yt., etc., E, E. Co . .667, 687 Pond V. Metropolitan El. Ey. Co. 300 Pond V. Railway Co 298 Pontchatrain R. R. Co. v. Pauld- ing 463 Poole V. Middleton 521, 546 Poolev. W. P. B., etc., Ass'n, 516, 542, 849, 1138 . Poole's Case 910 Pope V. Terra Haute Car Mfg. Co IV,), 605 TABLE OF CASKS. PAGE. Pope's Case 981 Port Gibson v. Moore 8H 1160 Port Royal, etc., E. K. Co. v. Hammond •: 611 Potter V. The B'k of Ithaca 866 Porter V. Bank of Rutland.. ..371, 535, 837 Porter v. Bessemer Steel Co. . 161, 162 Porter v. Carolin 242 Porter v. Pittsburgh Bessemer Steel Co 164 Porter v. Rockford, etc., Ry. Co. 1250 Porter v. Pacific Coast Ry. Co. .. 291 Porter v. Robinson 425, 430 Porter v. Sabin 688, 706, 718, 981 Porter v. Sewall, S. C. H. Co. . . . 605 Potter V. Spa Spring Brick Co.... 968 Porter v. T. T .1., etc., R. Co. . . . 1249 Porter's Appeal • 537 Porterfield v. Roand 299 Portland, etc., R. R. Co. v. Ken- nebec, etc., R. R. Co 157 Portland, etc., R. R. Co. v. In- habitants of Hartford 346 Portland, etc., R. R. Co. v. Graham 656 Portland & C. Tp. Co. v. Bobb, 47, 51, 277 Portsmouth Livery Co. v. Watson 93 Post V. ^tna Ins. Co 224 Post Express Pr. Co. v. Coiu'sey, 451 Potts V. Port Carlisle D. & R. W. Co 1066 Potts V. Wallace 882 Poughkeepsie, etc., R. Co. Re, 271, 272 Poughkeepsie, etc.. Plank Road Co. V. Griffin.. 38, 328, 330, 333, 1206 Poultney v. Bachman 432, 584, 593 Poultneyv. Wells 148 Pound V. Turck 1241 Powder River Cattle Co. v. Custer County 109, 608 Powell V. Blair 73 Powell V. Oregonian Ry. Co. .916, 922, 1022, 1024, 1159 Powell V. Jessop 30 Powell V. Williamette Val. R. Co. 541, 1023 Powell V. Xorth Missouri R. R. Co 119, 120, 128, 1157, 1163 Power V. Cassidy 143 Powers V. C. F. Jewett Pub. Co., 827, 1050 Powers V. Hamilton Paper Co 458 Powers V. Skinner 182 Power's Appeal 275, 286 Powis V. Harding 890 Prall V. Tilt 513, 571 Pratt V. American Bell Tel. Co., 336, 531 Pratt V. Hutchinson 28 Pratt V. Lewett 1145 PAGE. Pratt V. Meridan Cutlery Co 729 Pratt V. Pratt • 480, 709 Pratt V. Short 85 Pratt V. Taunton Copper Mfg. Co 652, 653 Pray's Appeal 537 Pray v. Mitchell 567 Presbyterian Church v. City of New York 435 Presby. Ch. v. Gutherie 239 Presbyterian Church's Appeal.. . . 5 Presbyterian Cong. v. Bank 525 Presbyterian, etc.. Fund v. Allen, 378, 380, 382, 384, 385, 380 Prescott V. Br.ttersby lOS President, etc., v. Corn en 836 i President, etc., AVasli. B'k v. Lewis... 836 President, etc. , v. Moore 807 Preston v. Cincinnati, etc., R. E. Co 904, 1021 Preston v. Cutter 502 Preston v. C. C. H. V. R. Co . . , 876 Preston v. Grand Collier Dock Co 669, 706 Preston v. Laughran 222, 405 Preston v. Liverpool, etc., Ry.. 741 Preston v. Melville 494 Price v. Anderson 49 1 Price & Brown's Case 907- Price V. Gover 553 Price V. Grand Rapids, etc., it. R. Co 628, 631 Price V. Lynch 561, lOIS Price V. Minot .547 Price V. Riverside L. & I. Co 999 Priest V. Essex Mfg. Co 917, 10 1 2 Princetown B'k v. Crozer 564 Princeton Min. Co. v. First Na- tional Bank 4S Pringle v. Wool worth 868 Pritz, Ex parte 3(> Probst V. Trustees 62, 196 Proctor V. Webber 14S Proprs. Canal Bridge v. Gordon, 9, 847 Prop. Rural Cemetery v. Commrs. of Worcester County ]2S1 Propr. Union Lock & Canals v. Towne 1207 Proprs. of Jeffries Neck Pasture V. Inabitants of Ipswich 24 Proprs. of Leeds & Liverpool Canal v. Hustler 37 Proprietors of Locks, etc., %. Nashua & L. R. R. Co 272 Proprs. of N. Bridge v. Story y.50 Proprietors of St. Luke Church, etc., V. Ruggles 799 Prosper, etc., Co., In re 30 Prospect Park v. Williamson 268 Prosser v. First Nat. Bank. . .211, 722 Protection Ins. Co. v. Osgood, 55o' 905 Protection L. Ins. Co. v. Foote, 395 TABLE OF CASES. xcm PAGE. Protestant Ep. Ed. Soc. v. Church- man 247 Prouty V. Lake Shore, etc., K. K. Co 126, 128, 677, 1157 Prouty V. Mich., etc., R. Co., 480, 493, 611, 678, 676 Providence Bank v. Billings, 87, 1281 Prov. C. Co. V. Prov. & VV. R. Co. 117 Prov. Ins. Co. v. Shaw 548 Provident Inst. Fire Savings, etc.. In re 1232 Provident Sav. Inst. v. Jackson Place Skating Rink 506 Prudential Assur. Co. v. Edmonds, 783 Pugh & Sherman's Case 506 Pulford v. Fire Dept 591, 752 Pullman v. Cinn. & Chicago R. R. Co 152,158, 174 Pullman v. Upton 515, 907 Pullman Palace Car Co. v.' Mo. Pac. R. Co 899 Purcell V. British Land & Mort- gage Co 606 Purdy's Case 636 Putnam v. City of Albany 356, 893 Putnam v. Sweet 1082 Puxton Caule Co. v. First Nat. Bank 831 Pyles v. Riverside Furniture Co., 458, 944, 1138 Q. Quackenbush v. Wis. & M. R. Co 1191, 1220 Quade v. New York 1180 Quarrier v. Peabody Ins. Co 777 Queen v. Deptford 1007 Queen v. Eastern Counties R. R. Co 1004, 1007 Queen V. Great Western Ry. Co., 1004 Queen v. Kendall 999 Queen v. Ledyard 635 Queen v. Londonderry & Cole- raine Ey. Co 626 Queen v. Maraquita Min. Co 734 Queen v. Southeastern R. Co 1006 Queen v. Trustees of Balby Tp. Road 1008 Queen v. Trustees of Swansea Harbor 1007 Queen v. Victoria Park Co. ..635, 1000 Queen v. York, Newcastle & Ber- wick R. Co 1004 Queen v. York & N. Midland R. Co 1004 Quimby v. Vermont Central, etc., 307 Quick V. Lemon 330 Quincy Bridge Co. v. AdamS County Ill, 116, 1249 Quiner v. Marblehead 545 R. PAGE. Racine County Bank v. Ayers, 358, 673 Racine, etc., R. R. Co. v. Far- mers' L. & T. Co., 66,69,116,148, 1169 Rae V. Russell 369 Raeder v. Bensberg 1032 Rafferty v. Bank of Jersey City, 69 Railroad Co. v. Arnold 298 R. R. Co. V. Berks Co 1281 Railroad Co. v. Burnside 634 R. R. Co V. Cary 895 R. R. Co. V. Casey 1215 Railroad Co. v. Commrs 807 Railroad Co. v. Dix 27.3 Railroad Co v. Eastman 3,59 R. E. Co. v. Elliott 1213 Railroad Co. v. Falconer 321, 346 Railroad Co. v. Frazier 298 Railroad Co. v. Georgia, 119, 807, 1157, 1201 E. R. Co. V. Gould 926 Railroad Co. v. Hecht 1191 Railroad Co. v. Harris 22, 94 Railroad ( 'o. v. Hays 294 Railroad Co., In re 40, 294 R. R. Co. V. James 1197 Railroad Co. v. Koontz 60.3 Railroad Co. v. James 158 Railroad Co. v. Lake 285 Railroad Co. v. Maine 120, 1200 Railroad Co. v. Marsh 1213 Railroad Co. v. Mason 629 Railway Co. v. McCarty 849, 862 R. R. Co. V. Md 1270 E. R. Co. V. Miller 1232 Railway Co. v. Morris 153 Railroad Co. v. Moss 281 Railroad Co. v. Parks 359 Railroad Co. v. Plumas County. . 22 Railroad Co. v. Prattle 1213, 1231 R. L. R. Co. V. Preston 926 R. R. Co. V. Richmond 1241 Railroad Co. v. Rollins 125 Railroad Co. v. Sawyer 202 Railroad Co. v. Stratton 28 Eailroad Co. v. Sullivan 1213 Railroad Co. v. Vance. .' 22 Eailroad Co. v. Wiltse 273 E. E. Commrs. v. P. & D. C. E. Co 1007 Eailroad Nat. Bank v. Lowell 217 Eailway v. Magistrates, etc 740 Eay V. Powell 398 Eay V. Powers 1184 Ey. Co. V. Abell 926 Eailway Co. v. AUerton 453, '701 Railway Co; v. Hodgens 1213 Eailway Co. v. Johnson 983 Eailway Co. v. Whitton 602 Eainsbarger v. Union Mut. Aid Assn 754, 759 XCIV TABLE OF CASES. PAGE. Raisbeck v. Oestereicher 933 Raish V. Bd. of Education 1001 Kaleigh, etc., E. E. Co. v. Conner, 1250 Raleigh & G. R. R. E. Co. v. Davis 16 Raleigli, etc., R. R. Co. v. Eeid. . 1285 Ealey V. County of Umatilla 239 Ramsden v. Boston & A'. E. Co. 1049 Ramsay v. Gould. . . 667, 697, 716, 717 Ramsey v. Carhart 1095 Ramsey v. Erie 312, 857 Ramsey County v. Church of the Good Shepherd 1282 Ranwell's Case 903 Ranee's Case 461, 797 Band V. Hubbell 491, 496 Rand v. Upper Locks, etc., Co . . 604 Rand v. White Mts. R. R. Co. . . . 799 Randall v. Van Vechten 847 Randolph v. N. J. West Line R. R. Co 177 Ranger v. Great West Ey. Co., 1049, 10.50 Eanlet v. Concord R. Corp 295 Rapid Transit Co. v. Dash 49 Raritan, etc., R. R. Co. v. Dela- ware, etc.. Canal Co 1167 Rathbone V. Gas Co 688 Rathburn v. Snow 193, 216 Raymond v. Brodbelt 573 Raymond v. Leavitt 134 Itaynor v. Mintzner 928, 936 Read v. Buffurn 215 Reading, etc. , R. Co. v. Belthaser, 295, 300 Reading Fire Ins. & Tnist Co. v. Reading Iron Works 476, 517 Recamier Mfg. Co. v. Seymour. .. 695 Reclamation Dist. v. Hagar 33 Reciprocity Bank Re 183, 894 Red River Bridge Co. v. Mayor, etc., of Clarkville 264 Red Rock v. Henry 346 Redding v. Goodwin 1131 Reding v. Anderson 27 Redinger v. Marquette & W. R. Co 289 Eedington v. Cornwall 1029 Redman v. ^tna! Ins. Co 778 Redman's Appeal 231 Redmond v. Enfield, etc., Co., 611, 1145 Redmond v. Hoge 957 Redmond v. St. PaulM. & M. Ry. Co 293 Ree v. Birkenhead 834 Reed V. Baltimore Trust & Guar- antee Co 36 Reed V. Bank of Newburgh 140 Reed v. Boston Machine Co 858 Reed V. Bradley 172 Reedv. Cumberland, etc., Canal Corp 1084 Reed v. Hoyt 466, 472, 884 PAGE. Eeed v. Memphis Gayoso Gas Co. 349, :',0.) Reed v. Ohio & M. Ry. Co 277 Reed v. Richmond St. R. R. Co. 44, 71, 309 Rees V. Concocheague Bank 104 Rees V. Schuylkill River E. S. E. Co 294 Eees V. Smith 890 Rees's Appeal 286 Reese v. Bank of Commerce, 521, 522 Reese v. Bank of Montgomery Co. 488 Reese v. Newport News & M. V. Co 5,97, 121 Reese River Silver Mining Co. v. Smith 644, 890 Reeves v. Harper 106 Reeves v. State B'k 820 Reformed Church v. Schoolcraft, 2.56 Reformed Dutch Ch. v. Veederm, 255 Reformed Prof. Dutch Church v. Brown 331 Reg. v. Blizard 1094 Reg. V. Chester 1094 Reg. v. Gov. Stock Co. L. E 421 ■ Reg. v. Maraqnita Min. Co 733 Reg. V. The Saddlers' Co 734 Reg. V. Seale 1076 Reg. V. Taylor 1094 Reg. V. Wilts Canal Co 733 Regents, etc., v. Williams, 8, 15, 1151, 1225 Regina v. Aldman, etc., Ins. Co., 427 Regina v. Grimshaw 427 Regina v. Midland Counties, etc., Ry. Co 506 Reichwald v. Commercial Hotel Co... 370, 415, 417, 458, 741, 744 1152 Reid V. Allen 1021 Reid V. Eastonton Mfg. Co 797 Reid's App 672 Reifsnider v. American Imp. Tub. Co 60S Reiger .v. Beaufort .322 Reilly v. Oglebay 426 Eeitenbaugh v. Chester Valley R. R. Co 287 Rel). Assn. McAuley 383 Relfe V. Columbia Life Ins. Co., 804, 1250 Reming v. New York L. & W. Ry. Co 298 Rembert v. S. C. Ry. Co 57, 58 Renk v. Hermann Lodge 391 Reno Water Co. v. Leete 455 Rennselaer, etc., R. R. Co. v. Davis 225, 271, 284 Rensselaer, etc., Co. v. Barton, 326, 327, 655 Rensselaer & W. P. R. Co. v. Wet- zel 352 Renshaw v. Creditors 553 Renton, etc., Co. v. Monnier 838 TABLE OF CASES. XCV Renwickv. Hall 1112 Republic L. Ins. Co. v. Swigert, 885, 971, 972 Renter v. Tel. Co 447 Revere v. Boston, etc., Co 1159 Reynolds v. Bank 109 Reynolds v. Equitable Ac. Assn., 759 Reynolds v. Feliciana Steamboat Co 1027, 1028 Reynolds v. Stark County 80 Reynolds v. Myers 69 Reynolds v. Stockton 966 Rex V. Amery 1112 Rex V. Ashwell 434 Rex V. Bank of England 479 Rex V. Bennett 1075 Rex V. Brooks 1094 Rex V. Carmarthen 312, 11 12 Rex V. Chetwynd . . . ; 312 Rex V. Colchester 9 Rex V. Cudlipp. 1097 Rex V. Dawbeny 1095 Rex V. Day 1094 Rex V. Dodd 28 Rex V. Edgan 1075 ' Rex V. Emery 1161. Rev V. Hanger 440 Rex V. Haughley 5 Rex V. Hill 312, 422 Rex V. Jones 1075 Kex V. May 422 Rex V. Mayor & Jurats of Hast- ings 85 Rex V. Newcastle 733 Rex V. Ogden 1097 Rex V. Outridge 1119 Rex V. PSsmore 1160, 1162 Rex V. Richardson 580 Rex V. Seale 1075 Rex V. Shepherd 1095 Rex V. Smith 1094 Rex V. Spencer 433 Rev V. Theoderick 312 Res V. Town of Liverpool .... 581 , 583 Rex V. Trevenen 1097 Rex V. University of Cambridge. . 580 Rex v. Webb 28 Rex v. Westwood 4.34 Rex V. White 1112 Rex V. Wildman 728, 1126 R«x V. Yarmouth 1126 Rheem v. Naugatuck Wheel Co. . 59 Rhine v. McKinney 275 Rhode Island Hospital Trust Co. v. Olney 236 Rhoner v. First Nat. Bank 605 Rhodes v. Rhodes 226, 227 Rhodes v. The City of Cleveland, 848 Rhodes v. Spencer 1138 Rhymney R. R. Co. v. Taff Vale R. R. Co 113 Rice V. Commonwealth Bank 1112 Rice V. New England M. A. Soc. . 382 PAGE. Rice V. Rockafeller 514 Rice V. Rock Island R. R. Co 1205 Rice V. R. R. Co 84, 85 Richards v. Attleborough Nat. Bank 404, 1160 Richards v. Beach ^ .914, 918 Richards v. Coe 914, 917 Richards v. Crocker 910 Richards v. Incorporated Town of Rock Rapids 1256, 1257 Richards v. Kinsley 910 Richards v. Merrimac, etc., R. R. Co 80, 157, 174 Richards v. New Hampshire Ins. Co 7!).-), 796 Richardson v. Buhl 13;;, 134 Richardson v. Hickman 985 Richardson v. Pitts 933 Richardson v. Railroad Co 479 Richardson V. Richardson. . ..490, 494 Richardson v. Sibley 152, 173 Richardson v. Vennont & V. Co., 425, 481, 502, 672, 677 Riche V. Ashbury C. & I. Co. L. R., , 156 Richmond v. Chicago 275 Richmond v. Irons 1013, 1024 Richmond v. Johnson. . .379, 384, .390 Richmond v. Judy 399 Richmond Turnpike Co. v. Vaii- derbilt • 1061 Richmond, etc., R. R. Co. v. Louisa R. R. Co. .8.5, 265, 1167, 1185 Richmond Factory v. Alexander, 44 Richmond Factory Ass'n v. Clark, 71 Richmond St. R. Co. v. Reed 333 Richmond's Case 659, 660, 893 Richmondville Mfg. Co. v. Prall... 515 Ricker v. Am. L. & Tr. Co 31 Ricker v. Larkin 47 Ricketts V. C. & O. Ry. Co., 151, 152 Rickoffv. Brown R. S. S. M. Co. 71 924 Ricordv. Cent. Pac. R. R. Co! 1057, 1060 Riddick v. Amelhi 39 Riddle v. New York, etc., R. R. Co 602 Ridenour v. Mayo 27, 933, 035 Rider v. Alton & S. R. Co 635 Rider v. Keeler 574 Rider v. Morrison... 506, 887, 892, 009 Rider v. Union India Rubber Co. S33 Ridgefield, etc., R. R. v. Brush, 342, 348, 351, 353, 357, 358, 1050 Rigby V. Connol 589, 590, 591 Riggin V. Magwire 634 Riggs V. Cragg 490, 495 Riker v. Leo 236, 2-38 Riley V. Riley 380, 409 Rindge v. New England Mut. Aid. Soc '. ... 772 Ringo V. Biscoe 1138 XCVl TABLE OF CASES. PAGE. Rio Grande, etc., Co. v. Coby 820 liio Grande & E. P. Ry. Co. v. Ortiz 297 Kisley v. Indianapolis, etc., R. R. Co 210 Ritclier V. Jerome , 809 RIttenhouse v. Ind.,Tel. Co 1063 Rittenhouse v. Winch 408 Rivauna Nav. Co. v. Dawson 186 Rives V. Montgomery, etc., P. R. Co 646 Rivingstons' Case 114 Roaclie v. Roanolce Seminary. . . . 342 Robbins v. Butler SO Robbinsv. Clay 702 Robbins v. Waldo Lodge No. 12, L O. O. F 771 Robeson v. Ford 985 Robert E. Lee Silver Min. Co. v. Omaba & Grant Smelting & Ref. Co 215 Roberts v. City of Boston , 299 Roberts v. Township of Chai-levaix 1254 Robert's Appeal 490, 575 Roberts' Case 358 Roberts' & Payne's Appeal 78 Robertson v. Bullions 2.S5 Robertson v. Hays 108 Robertson v. Nationals. S. Co. . . 98 Robertson v. Rockford 123 Robie v. Sedgwick 1162 Robins v. St. Paul, etc., R. R. Co. 307 Robinson v. Baker 2.30, 257 Robinson v. Bank of Darien, 614, 913 Robinson v. Bidwell, 614, 884, 908, 1021 Robinson v. Chartered Bank 521 Robinson v. Edinboro Academy... 331 Robinson v. Fitchburgh, etc., R. R. Co 841 Robinson v. Hemingway 403 Robinson V. Hurley 511, 553, 554 Robinson v. Jones 1108 Robinson V. Lane 1163 Robinson v. Nat. Bank of New Berne. 1139 Robinson v. Oceanic, etc., Co. 94 607 Robinson v. Pittsburgh, etc., R. R .361, 809, 891 Robinson v. Pittsburgh, etc., R... 678 Robinson v. Smith 463, 687, 706 Robinson v. Spaulding, etc., Co... 564 Robinson v. Yates City Lodge 584 Robson V. Dodds 698 Rochester v. Alfred 321 Rochester El. Ry. Co., In re. . .40, 74, 92, 277, 356, 1239 Rochester H. & L. R. Co. v. Bab- cock 277, 280 Rochester Ins. Co. v. Martin. .77, 78 Rockford, etc., R. R. v. Sage 743 Rockford, etc., R. R. Co. v. Shuraick 338 PAGE. Rockland v. Canton Mas., etc., Soc, 376, 767 Rockland W. Co. T. C. & R. W. Co 1185 Rockland Mt. D., etc., Co. v. Sea- wall 57, 3.50, 364 Rockville, etc., Co. v. Maxwell, 893 Rockville, Tump. Road v. Van Ness 450, 925 Rocky Mt. Nat. B'k v. Bliss 917 Roe V. Dean of Rochester 205 Rogers v. Burlington 320 Rogers V. C. P. R. R. Co 1067 Rogers v. Danby Univ. Soc 370 Rogers v. Danvers, etc.. Society. . 47 Rogers v. Doughtery 960 Rogers v. Hastings, etc., R. R. Co 471 Rogers y. Huntington Bank.. 521, 522 Rogers v. Jones 437 Rogers v. La Fayette Agr. W'ks, 666, 687, 706 Rogers v. N. Y. & T. L. Co 623 Rogers v. Oxford, etc., Ry. Co. .. 120 Rogers v. Phelps 689, 698 Rogers v. Stevens 528 Rogers Locomotive Works v. Lewis 166 Rogers L. & M. Works v. So. E. R. Ass'n 168 Rolland v. Hart 836 Rollins V. Clay 1152 Rolling V. La Grande 49 Rolling Mill v. Railway Co 544 Rollins v. iShaver AV. * C. Co. .74, 184, 455, 460 Rome V. Hoagland '. 649 Rome, Watertown & O. R. Co., v. O. S. R. Co 1197 Roman v. Fry 502, 506 Roman Catholic Orphan Asylum V. Abrams 47 Rood V. Railway Passengers', etc. Ass'n 597, 766 Roosevelt v. New York El. R. Co. 298 Roosevelt Hospital v. Mayor 1183 Root V. Sinnock 1012, 1013 Rorke v. Thomas 1041 Rosborough v. The Shasta R. C. Co 472 Rose V. Traux 132 Rose V. Tump. Co 1152 Rose V. Western Union Tel. Co. 1063 Rose Hill & E. R. Co. v. People, 22 5S Rose V. Chicago R. R. Co .' 1205 Rdsenback v. Salt Springs. ...509, „ 518, 657 Roseboom v. Warner 796, II41 Rosenburg v Weeks 1257, 1259' Rosenberger v. Wash. Mut. F. Ins. Co 396 Rosenfeld v. Einstein 733 TABLE OF CASES. XCVll PAGE. Eosenhouse v. Seeley 108 Rosen velt v. Bown 308, 907 Ross V. Bank of Gold Hill Nev., 340, 63:!, 898 Rossv. Elizabethtown, etc.. R. R. Co , .' 1167 Ross V. Estates Inv. Co 644 Ross V. San Antonio, etc., R. R. Co 637 Ross V. Southwestern R. Co.. .529, 544 Ross V. S. & C. S. Min. Co. . . .886, 908 Rossie Iron-Works v. Westbrook, 602 Rotheram, etc., Co., Re 740, 744 Rothschild v. G. T. Ry. Co... 59, 607 Rothwell V. Robinson 688, 690 Roundtree v. Smith 530 Rouse V. Mer. Nat. B'k, 797, 1139, 1140 Roushlange v. Railway Co , 299 Rowland v. Header Furniture Co. 68, 71, 634, 1162 Rowland's Case 905 Royal Bank of India's Case. . 190, 907 Royal Bank of Liverpool v. Grand June. R. R. & D. Co 218 Royal British Bank v. Turquand 155 Royal Ins. Co. v. Smith 777 Royal Templars of Temperance v. Curd 379, 785 Royal Victoria Palace Syndicate, In re 746 Rozet V. McCleelen 554 Rubey v. Shain 321 Ruchizky v. DeHaven 532 Rudd V. Robinson 459 Rude V. City of St. Louis 301 Rues bach v. La Souer Mill Co . . .. 148 Rugg's Case 907 Ruggles V. Brock 72 Ruggles V. Collier '77 Ruggles V. Fon Dulac 1259 Ruggles V. Illinios 1221 Rngheimer, In re 302 Rumbough V. So. Imp. Co 100 Runkel v. Winenniller 726 Runyan v. Koster's Lessee..77, 97, 100, 101, 104 Runyon v. Farmers & Mechanics' Bank 949, 969 Ruppell V. Schlegel 226 Rush V. Halcyon Steamboat Co. . 69 Russell V. Allen 240 Russell V. Birstod 327^ 894 906 Russell V. McLellan 1152 1153 Russell V. Minneapolis & St. P. R. R.Co 1068 Russell V. Tapping 77 Russell V. T & P. Ry. Co 230, 988 Russell V. Wakefield, etc., W. W. Co 623, 681, 703, 706 Rutland R. Co. v. Thrall. .481, 609, 628, 629, 632, 655, 672, 674, 677, 859, 862, 1206 Rutland & E. R. Co. v. Proctor, 849 PAGE. Rutter V. Kilpatrick 515 Rutz V. Esler, etc, Mfg. Co. .640, 924 Ryan v. Fowler 1067 Ryan v. Leavenworth, etc., R. R. Co 189,669, 1248 Ryder v. Alton, etc., R. R. Co., 486, 892 Ryerson v. Brown 279 Sabin v. B'k of Woodstock 545 Sabin v. Grand Lodge of A. O. U. W 391 Sackett's Harbor R. R. Co. v. Blake 910 Sackett's Harbor B'k v. Lewis Co. B'k 855 Sadler v. Langham 281 Sadler & Jackson, Ex parte 678 Safety, etc., Co. v. Smith 743 Saffold V. Barnes 362 Safford v. Wyckoff 90, 197 Sage V. Cent. R. R. Co 809 Sagory v. Dubois 778, 1147 Sage V. M. & L. R. R. Co . . . . 178, 944 Sage, Matter of Ill Sage, Re 733 Sahanny V. Androscoggin Mills.. 1067 Sala V. City of New Orleans 1190 Sale V. First Regular Baptist Church 590 Salem Bank v. Gloucester Bank. . 197 Salem Iron, etc., Co. v. Danvers, 1275 Salem Mill Dam Co. v. Ropes 348, 353, 364, 366, 638, 861, 856, 1056, 1145 Sales V. Bates 505 Salisbury v. Metro. Ry. Co. . .462, 672 Salisbury Mills v. Townsend, 536, 652, 653 Salmon v. Hamborough Co 875 Salomon V. Richardson 463, 1055 Salmon River, etc., Co. V. Dunn, 80 Salomons v. Laing...681, 687, 701, 713 Salt Co. v. Guthrie 1103 Saltmarsh v. Spaulding. . .99, 210, 417, 430, 456, 466, 816 Salt Lake F. & M. Co. v. Mam- moth M. Co 214 Salt Lake City Nat. Bank v. Hendrickson 367, 1012 Salt Marsh v. Spaulding 222 Saltsman v. Shults 750 Samainego v. Stiles 875, 914, 923 Sample v. Bank 108 Sampson v. Bowdinham Mill Co. 55, 199 Sampson v. Show 134 Samuel v. Fidelity, etc., Cas. Co. 848 Samuel v. Holliday..312, 370, 42.">, 680, 689, 699. 703, 706, 710 XCVIU TABLE OF CASES. PAGE. Sanborn v. Fireman's Ins. Co 208 Sanborn v. Lefferts 370, 1046 Sanborn v. Madera Flume Co 1067 Sanders v. Sioux City 59 Sandheim v. Gilbert 530 Sands v. Kieuback 1031 Sandy River R. Co. v. Stubbs 465 Sanford v. Board of Supervisors ofN. Y 29 Sanford v. R. R. Co 716 Sanger v. Upton 337, 375, 388, 880, 904, 909, 921 Sankey Brook Coal Co., In re 174 Sankriglit v. Liverpool L. & G. Ins. (;o... 605 Sansenderfer v. Pacific Mut. L. Ins. Co 783 Sanzey v. la., etc., Glass Co 809 San Antonio v. Manaflfy 862 San Buenaventura, etc., Co. v. Vassault 422 San Diego v. S. D. & L. A. R. R. Co....'. 464. 466, 623 San Diego Land & Town Co. v. Neale 291, 295 San Jose, etc., Sav. Bank v. Pharris 1018 San Jose, etc.. Bank v. Sierra Lumber Co 449 San Jose & A. B. Co. v. Mayne, 295, 297 San Mateo County v. S. P. Ry. Co. 1261, 1262 San Francisco v. Cent. P. R. B. Co 1263 San Francisco v. Flood 1250 San Francisco v. Fry 1250 San Francisco V. Spring Valley W. W. Co 36, 882 San Francisco Water Co. v. Pattee, 795, 797, 798 San Francisco W. Co. v. Patten. . 222 San Francisco, etc., R. R. Co. v. Bee 795, 808 Santa Clara Co. v. Sou. Pac. R. Co 103, 1261, 1262, 1263 Santa Clara, etc., Acad. v. Sulli- van.... 93, 95, 234 Santa Clara Mfg. Assn. v. Meri- dith 470 Santa Clara Val. M. & L. Co. v. Hays 137 Santa Cruz R. R. Co. v. Schurtz, 351 Santa Cruz R. R. Co. v. Spreckles, .366. 367, 467 Santa Eulalia S. M. Co., In re 449, 450, 1156 Sappington v. Little Rock, etc., R. R. Co 807, 811 Saratoga Elec. R. Co., In re 400 Sargent v. Franklin Ins. Co.. .438, 441, 518, 519, 528, 544, 545, 661 Sargent v. Essex 554, 5U3 PAGE. Sargent v. Webster 312, 420, 430' Sargent, Ex parte 512, 649 Sartwell v. North 836 Sauce V. Bingham 55 Sauce V. Caldwell 55 Saugatuck, etc., Co. v. Westport, "47 Saunders' Case 662 Savage Mfg. Co. v. Armstrong,. 56, 60, 93 Savage v. Medbury 966 Savage v. Russell & Co 59 Savage v. Walsh 1158 Savin v. Haylake Ry 743 Savings Association v. O'Brien. . . 1015 Savings Ass'n. v. Topeka 320 Savings B'k v. Bates 794 Savings Bank v. Davis 311, 424 Sav. B'k V. Fatzirger 1147 Savings Bank of Louisville's As- signee V. Caperton 464 Sav. Bank v. Portsmouth 1275 Savannah v. State 1009 Savannah & W. R. Co. v. Wood- ruff 88 Sawyer v. City of Boston 276, 292 29& Sawyer v. Hoag 623, 800, 878^ 88.3, 909, 910, 919 Sawyer v. Printing Co 697 Sawyer v. Taggart 531, 532 Sawyer v. Upton. 331 Sawyer v. West 872 Saxton V. Texas S. F. & N. R. Co. 216, 219 Sayler Assignee v. Simpson 904 Sayles v. Bates 503, 886, 922, 924 Sayles v. Blane 510 Sayles v. Brown. ...895, 896, 1013, 1015, 1038 Sayres v. Cit. Gaslight & Heat Co. 660 Sayre v. Glenn 634 Sayre v. Louisville M. Ben. Assn. 440 Scadding v. Lorant 427 Scaulan v. Keith 818 Scarlett v. Academy of Music, 357, 632 Scarsburgh T. Co. v. Cutler 55 Schaefter v. E. Tenn. V. & G. R. Co 606 Schaffer v. Mo. Home Ins. Co. 515, 645 Schallard v. Eel River S. Nav. Co., 219 Schaller v. City of Omaha 302 Schalucky v. Field 1014, 1034 Schaper v. Brooklyn & L. I. Ry. Co 49 Scheerejiberg v. Stephens 349 Scheffer v. Nat. Life Ins. Co 602 Scheiderer v. Trav. Ins. Co 777 Schellenberger, Ex parte 93 Schelter v. S. O. Imp. Co 463, 466 Schemetham v. Vanderheyden . . . 127 Schenck v. Andrews 693 Schenectady <& S. P. R. R. Co. v Thatcher, 352, M64,425, 541, 546, 633 TABLE OF CASES. XCIX PAGE. Scheuffler v. Gr. L. A. & N. W. 68, 596 Schillinger v. Boes 774 Schillinger's Fire Proof Cement & Asphalt Co. V. Arnott 57 Schlandecker's Appeal 910 Schley v. Dixon.. ..801, 878, 1042, 1069 Schloss v. Mont. Tr. Co 71 , 925 Schmidt v. A. Lincoln Lodge, 591, 752, 753, 765 Schmidt v. Gunther 749 Schmidt v. Hennepin, etc., Co. . . 521 Schmidt v. la. Knights of Pythias Ins. Co 393 Schobacker v. Germantown Far- mer's Mut. Ins. Co 777 Schockley v. Fisher 870 Schoff V. Bloomfield 420, 427 Schonfield v. Turner 380, 391 Schoharie Val. R. E. Case 423 School District v. Blaisdell 59 School Dist. V. Everett 238 School Dist. V. Greenfield. . .1151, 1165 School Dist. V. Thompson 25 School Dist. No. 61 v. Collins 68 School Inspectors v. People 1009 Schooner v. Hinckley 961 Schrivener's Case 728 Schromm V. Seymour 456 Schultz V. Chicago, etc., K. R. Co 1064 Schunck v. Gregenzeiter 378 Schuylkill River E. S. R. Co. v. Stocker 297 Schweiger v. Voightlander Benev. Ass'n 588 Schwenck v. Naylor 723 Scott V. Eagle Fire Ins. Co., 462, 475,477, 480 Scott V. Cattle Co 604 Scott V. Clark 1075 Scott V. Cent. E. K. Co 481, 492 Scott V. De Peyster 462, 696, 710 Scott V. Dixon 721 Scott V. Indianapolis Wks 565 Scott V. Johnson 824 Scott V. Middleton, etc., R. R. Co 822, 832 Scott V. Pequonnock Bank.... 542, 563 Scott V. Prov. Mut. R. Ass'n 387 Scott V. Texas Land & Cattle Co. 606 Scotland Co. v. Mo. la., etc., Ry. Co 1285 Scotland County v. Thomas, 123, l25 Scoville V. Scanfield 1015 Scoville T. Thayer, 492, 693, 856, 858, 861, 895, 898, 901, 900, 922, 1144, 1147 Scranton Elec. L. & H. Go's Appeal....: 48, 49 Scripture v. Soapstone Co 652 Scruggs V. Mortgage Co 603 Scudder v. Trenton, etc., Co 279 PAGE. Search v. EUicott 1032, 1131 Searcy v. Yarnell 468 Seals V. Haker 10.54 Sears v. Hotchkins 703 Sears v. Kings County El. R. Co. 473 Searle v- Lindsay 1066 Searle v. School District 294 Searsburgh Ii, Co. v. Cutter 371 geaton v. Grant 706 .'Seattle v. Yesler 34 Second Ave. R. R. Co. v. Mehr- bach 210 Second Cong. Ch. Soc. v. Waring, 233, 255 Second, etc., R. R. Co. v. Phil. . . 75 Second National Bank v. Cald- well 1260 Second Nat. Bank v. Hall. , , 935 Second Nat. B'k v. Howe 836 Second Nat. Bank v. Lovell 101 Second Nat. Bank v. Mfg. Co 831 Security State Bank v. Raine 360 Seda v. Huble 240, 241, 248 Sedalia Warsaw, etc., Co. v. Abell, 352 Seeleston v. Brown 563 Seeley v. New York Nat. Exch. Bank 483 Seffingwell v. Elliot 233 Seignouret v. Home Ins. Co S56 Seitzinger v. New Era L. Ass'n... 773 Sellers Chapel Meth. Church, In re 231 Selley v. San Jose J. M. & B. Co. 455 Seligman Cases 905 Seligman v. Charlottsville Nat. B'k 848, 862 Selma M. E. N. R. R. Co. v. Anderson 350, 1056 Selma, Rome, etc., R. R. Co. v. Harbin 126, 128 Selma & Tenn. R. R. Co. v. Roundtree 636 Selma & T. R. Co. v. Tipton, 331, 626, 655 Semmers v. Steath 884 Semple v. Flynn 945 Seneca County Bank v. Lamb, 435, 436 Seneca County B'k v. Neass 836 Seneca Mining Co. v. Secretary of State 44 Settler v. Chicago & N. W. R. Co. 154 Severin v. Cole ; . . . 277 Sewall v. Eastern E. Co 330 Sewall v. Herkimer Mfg. Co 326 Sewall V. Lancaster Bank 521 Seward v. City of Rising Sun 1250 Sewell v. Boston W. P. Co. ..569, 571 Sewell V. Cape May & S. P. R. E. Co 944, 995 Seyk V. Miller's Nat. Ins. Co 765 Seymore v. Ives 546, 651 Seymour, In re 212 TABLE OP CASES. PAGK. Seymour v. Sturgess 328 Shaeber's Appeal 713 Shackleford v. New Orleans, etc., K. R.CO 471 Shackley v. Fisher 870, 1147 Shaeffer v. Mo. Home Ins. Co 884 Shaffner v. Jeffries 3.57 Shakopee, I. 72 Tanner, etc. , Co. v. Hall 218 Tappan v. Deblois 248 Tappan v. Gray. 1696 Tappan v. Merchants' Bant 1252 Tarbell v. Page 71, 882, 933 Tarpey v. Desert Salt Co. .48, 54, 116, 12], 234, 343, Tar River Nav. Co. v. Neal. .. . 70, ^ ■ ""S' 925 Tatem v. Wright 105, 1247 Taurine Co., In re sqc, Taussig v. Hart 552 Tax Cases 1284, 1285 Taylor v. Agr., etc., Assoc a'>2 Taylor v. Albemarle Nav. Co 831 Taylor v. Ashton io5.-> TABLE OP CASES. CIX PAGE. Taylor Co. Ct. v. Baltimore & OhioK. R. Co 84 Taylor v. Bay City St. Ey Co 40 Taylor v. Carondelet 435 Taylor v. Cheever 554 Taylor V. Chichester, etc. , Ey. Co. 623 Taylor v. Exporting Co 185 Taylor v. Fletcher 355 Taylor v. Griswold 407, 420, 421 Taylor v. Holmes 688, 707. 716 Taylor v. Hughs 549 Taylor V. IfiU 27 Taylor v. Kansas City C. Ey. Co. 297 Taylor v. Ketchum 552 Taylor v. Miami Expr. Co. . .186, 623, 703, 706 Taylor v. National Temperance Eel, Un....754, 776, 777, 784, ^4 Taylor V. P. & E. E. Co 992 Taylor v. Simpson 1138 Taylor v. South, etc. , Ey. Co-. . 716, 861 Taylor v. Taylor 795 Taylor v. Weston 526 Teachout v. Des Moines, etc., St. Ey 304, 623, 698 Teake v. Jackson 30 Teasdale'sCase 187, 891 Telegraph Co. v. Davenport. .513, 652 Telegraph Co. v. Gray 885 Telegraph Co. v. Texas 1270 Telegraph Co. v. Tel. Co 1231 Telephone Co. v. State 1231 Telford, etc., T. P. Co. v. Cerhab 505, 621, 880 Temple v. Lemon 344, 350 Templin v. C. B. & P. R. Co 212 Ten Brock v. Boiler, etc., Co 201 Ten Eyck v. Del. & H. Can. Co. . 16 Ten Eyck v. Pontiaco, & P. A. E. Co. mo, 466, 470, 471 Tenell v. Branch Bank 2050 Tenessee v. Sneed. . . .' 1178 Tennessee v. Wliitworth 475 Tennessee Lodge v. Ladd 384 Tennessee Trans. Co. v. Kava- naugh, 148, 446, 825 Tennessee fa o o 'Q - C?l hpfc. 05 fc© H-l p -^gP P^ OS *^ S ^ £' 1 u 9 t CIS en Ig0<3 DO CD |i E. S • CO CO H CO 3 (IQ ei* I «»o " S° S ►« P I I ?a3 C5 CD CD CD CD IB rf- et- d- ct- «+■ 1- g p S S S S I |.»ggSS |-.§S=gB8 p CD erh t— boaB'TS s- a- OglP-O JD B B O CD 5 "* CD I CD 09 n I 2 CD 2 fo • 2 a 9 ca S ■ I Is- B P m p* £»•§ SO I O P* I ts ts •s- B C I PAET I. RIGHTS. CHAPTER I. THE COBPORATE EXISTENCE. § 1. Definition. 2. Common lav incidents. 3. Principles applicable alike to corporations and individoals. 4. Continuity of existence. 5. Members necessary. 6. Two corporations may have membership in common. 7. Individuality and unity of corporate entity. 8. Of the twofold relation. 9. Corporations and partnership distinguished. 10. Name furnishes no test. 11. Class to which corporation belongs to be considered. 12. The range of objects not decisive. 13. Private corporations performing public duties. 14. Subdivision common to both. 15. Public corporations sole distinguished from private. 16. Existence of private corporations beneficial. § 1. Deflnition. — A corporation has been defined by writers and judges in varied phraseology and degrees of accuracy. All agree that it is purely a creation of law with certain rights in common with individuals and others that are distinctive, all of which must be held and exercised for the objects for which it is created.^ I See Southern Pacific R. R. Co. v. Orton, 32 Fed. R. 457. One of the clearest and most comprehensive among definitions taking cognizance of the individuals composing as well as of the entity by which they are represented in the corporation, and of the rights and powers of both, is that of Chief Justice Marshall, as follows: "An artificial being, invisible, intangible and existing only in contemplation of law. Being the mere creature of the law, it possesses only those properties which the charter of its creation confers upon it, either expressly or incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created, and among the most important are immortality, and if the expression maybe allowed, individuality — properties by which a perpetual succession of many persons are considered as 4 THE COEPOKA.TE EXISTENCE. § 2 While it is manifest that a corporation cannot exist for any practical purpose without members, yet in strict legal contemplation, as has been often adjudi- cated and explained,- the legal entity is something dis- tinct and separate from those who employ it as an agency to accomplish their objects, whether these be public or private. And it is equally diflScult to dis- cover any reason for incumbering the definition with a consideration of the corporation's term of existence. There is nothing definitive in the idea of immortal- ity, and besides, under modern laws, the term of cor- porate existence is usually limited like a lease of real estate, to a number of years. Even when such is not the case, the length of a corporation's life always de- pends to a great extent upon the will or disposition of its members to keep it alive. It is also liable like natural persons to accidents, and may at any time, as we shall see hereafter, have its term of existence cut short at the hands of the state on account of the mal- feasance or nonfeasance of its management. A full and complete definition of a corporation can only be given by telling what are its rights, powers, duties, and relations, and the legal and equitable prin- ciples which control it in all its parts and functions and how they operate. That is the object of this treatise. § 2. Common Law Incidents. — There are certain rights and components necessarily implied in our conception the same, and may act as a single individual." Dartmouth College v. Wood- ward, 4 Wheat. 636. It ■^uld be difficult to improve upon the following defini- tion by Prof. Minor, " A body composed of one or more individuals and pos- sessed of a franchise by virtue of which it subsists as a body politic under a special designation and by the policy of the law is vested with the capacity of perpetual succession, and of acting in several particulars however numerous the association, as a single individual." 1 Minor Inst. 541. " Private corporations ace but associations of individuals united for some common purpose, and per- mitted by the law to use a common seal, and to change members without a dis- solution of the association." Baltimore & P. R. Co. v. Fifth Baptist Church, 108 U. S. 317. § 2 THE CORPORATE EXISTEIfCE. 5 of a corporation as an artificial legal entity and in the employment through it of capital or effort, or both, by its incorporators and members in carrying out the de- sign of its creation. Itis difficult to conceive of a cor poration existing for any practical purpose without^ Continuous succession by a corporate name duriagthe period specified in the act of incorporati on: j^ 2^|Hie 1 Ang. & Ames on Corp. 99. If a name be nc^S^romlP^Pcharfer one may be assumed, 1 Salk. 191, or acquired by usage. Smith v.' JMank Boad Co., 30 Ala. 650. The name should be distinct from that of any 9ther body incor- porated in the same state. Newby v. Or. Cent. R. Co., Deady, (U. S. C. C.) 609; Presby Ch. etc. 2 Grant's Gas. (Pa.) 240. A corporation held not entitled to incorporate as "The Kansas City Real Estate Exchange" when there was in the same city another corporation carrying on the same business under the style ofthe "KansasCity Real Estate and Stock Exchange." State v. McGrath, 92 Mo. 355; 5 S. W. 29. See also Farmers' Loan & Trust Co. v. Farmers' Loan & Trust Co. of Kansas, 21 Abb. ?f. C. 104; 1 N". Y. S. 44; In re United States Mercantile Reporting Co., 115 N. Y. 176; 21 N. E. 1034; as to power of Court to change the name, Nebraska Loan & Trust Co. v. Nine, 27 Neb. 507 ; 4.3. N.W. 348, holding that it is no infringement to take the name of the state adopted by another company 100 miles distant, unless conflict of interest is shown. See also In re Bank of Attica, 12 N. T. S. 648. Substantially same ruling wiLh respect to use of name of trade in which two companies were engaged, Boston etc. Shoe Co. v. Boston Rubber, Co. 149 Mass. 436. See also Employers' Assur. Corp. v. Employers' Liability Ins. Co., 10 N. Y. S. 845, where the court refused to enjoin a foreign corporation at suit of another foreign corporation. But a corporation may take the name of a corporation of another state. Lehigh Val. Coal Co. v. Hamplen, (Pa.) 8 .\m. & Eng. Corp. Cas. 201; Reese v. Newport News & m' >'. Co., 3-i \V. V.i. lot; iis. E. 212. But in such case a domestic corporation of the same name is entitled to an injunction restraining the foreign corporation from doing business in the same state with the former. Intei-national Trust Co. v. International Loan & Trust Co., (Mass.) 26 N. E. 693. It has been said that a corporation may be empowered by charter to act and purchase and receive conveyances in one name, and to sue and be sued in another, and may be specially empowered to use more than one name for the same purpose. Ang. & Ames, 100; 1 Kyd. 229, 230; 3 Salk. 102. See Minot v. Curtis, 7 Mass. 441. But where a certain name has been given in the charter, and adopted, that name and no other must be used in substance. Glass v. Tipton, etc. Co., 32 Ind. 376, though a slight variance between the words and syllables of the two names will not render the act or • conveyance invalid. Rex v. Haughley, 1 Bam. & Aid. 655. And if a corpora- tion convey by a wrong name, it cannot take advantage of the misnomer after re- ceiving the consideration. African Soc. v. Varick, 13 Johns. (N. Y.) 38. It has been held sufficient to sustain a devise to a corporation if it was shown that it was meant, though there was a mistake in the name. Vansant v. Roberts, 3 Md. 119; First Parish v. Cole, 3 Pick, (Mass.) 232. Corporations are entitled to protection in the use of their corporate names to the same extent as indi- viduals in the use of trade marks. Merchants' Detective Assn. v. Detective Mercantile Agency, 25 III. app. 250. As to what constitutes infringement 6 THE CORPORATE EXISTENCE. § 6 right to purchase, hold and convey lands and personal property! and contract obligations .2 3. To sue and be sued.3 4. To have and use a common seal.* 5. To make rules and regulations called by-laws for the government of the body corporate and its business. 6. To appoint and remove officers and expel members for j^flScient cause.* Tto f(3«rf going may be called ordinary rights or com- mon law incidents since they have always been rec- ognized as essential incidents and components of cor- porate existence. § 3. Principles applicable alike to corporations and individ- uals. — In the exercise of these and such additional powers as are given in the charter, either expressly or by implication, the same principles are uniformly applied as to individuals.^ The charter of a corpora- tion fulfills exactly the ofiice, to the extent of its powers, as a power of attorney given to an individual. All ancient theories of functions peculiar to them- selves in the matter of contracting, with respect to their liability for torts and all technical distinctions in regard to sealing and formalities in the execution of instru- ments between corporations and individuals, have dis- entitling complainant to mjunction,seetr.S. Mer. Rep. Co. v. U. S. Mer. Rep. Assn., 21 Abb. N. C. (N. Y. ) 115 ; American Order of Scottish Clans v. Merrill, 151 Mass. 558; 24 N. E. 91S; holding also that under Mass. Stat. 1888, 0. 429, certificate of Secretary of Commonwealth and Insurance Commissioner are conclusive as to the right to use name; In re N. Fifth St. Mut. Land Ass'n, 8 Pa. Co. Ct. Rep. 15. Corporate name can be changed only in manner pointed out by law Sykes v. People (111.) 23 K. E. 391; but an attempt to change name otherwise does not avoid charter, O'Donnell v. C. R. Johns & Co., 76 Tex. 36; 18 S. W. 376. See Kingv. lUwaco Ry. & Nav. Co. (Wash.) 23 P. 924, as to changing by amend- ment of articles. The fact that a corporation has changed its name without any change in its membership was held no defense to an action instituted against it under its former name Welfley v. Shenandoah I. L. M. & M. Co., 8.S Va. 768. ;! S. E. 376; Appearance without objection is a waiver of misnomer. Bate v. Gillett, 31 F. 809. 1 Infra, ch. x. "^ Infra, ch. viii. » Infra, ch. xxi. ' Infra, § I9n. 6 Infra, ch. xvi. ' Infra, ch. xx, ' Infra, § 61. § 4 THE CORPORATE EXISTENCE. 7 appeared in modern times. By the whole course of de- cisions in this country and also in England the trans- actions of corporations and individuals are to a great extent assimilated.^ It is only in internal affairs, in the rights and equities be- tween the members and the corporate entity and among themselves, in the disabilities with respect to citizen- ship and their relations to the state, that marked and peculiar diflferences exist between the law as adminis- tered to corporations and individuals. A consideration and exposition of these is the proper province of a work of this character. Corporations are also subject to the usual burdens and duties of inhabitancy and have their domicile, owe allegiance, and are subject to local juris- diction like moral beings. § 4. Continuity of existence. — A distinguishing feature ■of a corporation not possessed by natural persons is its continuity of existence as the same artificial person by means of perpetual succession in its membership. Like the attribute of individuality this power to per- petuate itself belongs to a corporation from necessity. "Without the one there would be no single will or responsible source of authority, and without the other the rights and privileges of the corporation would de- termine or vary upon the death or change of any of the individual members. But when it is said that corporations have perpetual succession, it is meant that they have continuity only •during any limited period of time which may be fixed ' In Barwick v. London J. S. Bank, L. R. 2 Exch. 259, a case of fraud by agent, Lord Oh. Cranworth said: " If the agents employed conduct themselves fraudulently so that if they were acting for private employers, the persons for -whom they were acting would have been affected by their fraud, the same prin- ciples must prevail where the principal under whom the agent acts is a corpora- tion." See also to same effect, Mackay v. Com. Bank, etc., L. R. 5 Priv. Co. 594. This subject fully considered, infra. 8 THE CORPORATE EXISTENCE. § » by the law of their creation ; and it is to be under- stood in the sense that such existence may be termi- nated at any time either by their failure to avail them- selves of the privileges afforded by law or by some act which authorizes and causes the State to terminate it. In the proper and more restricted sense the immor- tality of a corporation means only its capacity to take in perpetual succession so long as it exists. § 5. Members necessary. — Though as has just been stated the membership is distinct from the corporation in whose name they act and which abides in legal contemplation only, yet without members, it is for all practical purposes lifeless. These are usually natural persons but may consist of persons in a political capa- city as the governor of a State or the officers and citizens of a municipality. A corporation may also have for its members other corporations as in the cases of the Universities of Oxford and Cambridge of which, several incorporated colleges within these universities are the members.^ But a corporation cannot become a member in another capital stock corporation without express statutory authority.' It is not usually among the im- plied powers of corporations formed under general laws 1 Regents, etc. v. Williams, 9 G. & J. (Md.) 365; Am. Refrig. & Constr. Co. V. Linn. Civ. L. 204. And it Is well settled in England and all the States of the Union where the question has been raised. 3 Bishop V. Brainerd, 28 Conn. 289. See Hunt v. Kansas Bridge Co., 11 Kans. 412. * Whitehouse v. Sprague (Me.) 7 A. 17; Harknese v. Manhattan B. Co., 54 N. Y. Supr. Ct. 174. 10 THE COEPORATE EXISTENCE. § 8 are vested in it and not in the members, and the latter cannot in propria personce affect its title or divest it of its property though their act be concurred in unani- mously.^ Its personality is so distinct from that of those composing it at law that the latter cannot join in a binding contract with it or receive the benefits of a contract that has been made with it. Whatever causes of action accrue to others whether members or not arising out of transactions on corporate account they must be brought against the corporation and not against its members or officers. However, if the directors or other agents commit willful torts in the corporate name they are individually liable.^ § 8. Of the twofold relation.— Every private corpora- tion sustains two relations ; the one to the members who in its name combine their capital or efforts, or both to effect an object beneficial to themselves or to others ; the other to the sovereignty by the exercise of whose will or by whose consent it came into being. The theory that each corporation represents a particle of sovereignty granted by the State from motives of public utility though practically obsolete and little more than a fiction at the present day, when applied to corporations that are strictly private, yet is con- venient in understanding the real nature and function of the legal entity. Adhering to this theory and keeping in view its relation to the members as their representatives there is little if any difference, technically speaking, between a corporation and a public office instituted to subserve public interests and enjoyed for*a time definite or in- definite by the incumbent. If the office be lucrative his interest corresponds to that of the members of a 1 Infra, § 548. 2 i^fra, § 939. § 9 THE CORPORATE EXISTENCE. 11 corporation organized and managed for profit ; if it be an oflSce of honor only, the incumbent holds a similar relation to it as do the members of a benevolent cor- poration to the latter. It may be that the public interest in a public office is greater than in any except public or quasi public corporations and greatly pre- ponderates as regards the community, over the private interest of the incumbent, and the public interest in a private corporation may be very small in comparison with that of the incorporators, but these facts do not destroy or disturb the analogy between the legal attri- butes of the two agencies. § 9. Corporations and partnerships distinguished. — It is sometimes difficult to determine whether a particular company or association of persons is a corporation or a copartnership. The same institution cannot be both, nor can its members change their relation in this re- spect at pleasure. They possess the following points of resemblance : 1. Each may comprise numerous mem- bers associated together in one enterprise ; 2. — The membership may consist not only of natural persons but of corporations or partnerships;^ 3. — In each there may be a joint stock divided under by-laws or articles of agreement into shares transferable by assignment or delivery ; 4. — Each may hold its property and transact its business, sue and be sued under and by a common name ; 5. — Partners like incorporators are frequently allowed by statute to limit their liability to the extent of stock or interest held by them. There are the following points of difierence : l.Eaeh partner is an agent for the partnership and may bind it to any extent 1 The weight of authority at present is against the right of a corporation to become a member of a copartnership. Infra, §971. Still it may bind itself by its dealings and contracts as a member of a copartnership unless the state ob- jects. No such objection lies against a co-partnership being a stockholder in a corporation. 12 THE CORPORATE EXISTENCE. §§ 10, 11 within the scope of the partnership business , while corporators possess no power as such to bind the corporation ; 2. — Each partner is personally liable for the liabilities of the firm while shareholders in a cor- poration are not liable for its debts except where made so by statute. At common law the personal responsibility of stock- holders is inconsistent with existence of a body corpo- rate,-' § 10. Name furnishes no test.— It is wholly immaterial what name an association assumes whether one indicat- ing corporate or copartnership capacity or of a joint stock company. If it is organized under and avails itself of the provisions of a public act in its formation and exercises the functions and privileges and enjoys the immunities of corporations under the law it will be deemed and treated as a corporation, whether in its articles any act or statute be referred to or not.* § 11- Class to which corporation belongs to be considered. — As regards the implied conditions and incidents of corporate existence regard must be had to the class to which the particular corporation belongs. It is deemed unnecessary to enter into elaborate classifications of corporations, ancient and modern.^ Such a task 1 For a fuller discussion of the difference between corporations and partner- ships see Walker's Am. Law 223. 2 People V. Wemple (N. T.) 6 L. K. An. 303; Conservator v. Ash., 10 Bam. & C. 349' Denton V. Jackson, 2 Johns. Ch. 320; Liverpool Ins. Co. v. Massa- chusetts, 10 Wall. 566; Watersbury v. Mer. W. Expr. Co., 50 Barb. 157; Fargo V. MoVickar, 55 Barb. 440; Fargo v. L. N. A. & C. R. Co., 6 Fed. Rep. 78". Most of these cases also recognize the doctrine that when the state grants to indi- viduals such property rights or franchises or imposes upon them such burdens as can only be properly held enjoyed or borne according to the terms of the grant by a corporation, the intention to create such corporate entity is presumed. 8 The earliest corporations of which history gives any account were of a municipal kind and were created purely from political motives and for the ac- complishment of objeclft of public concern. There is no doubt but that impor- tant functions of government were conferred upon towns and cities by the § 11 THE CORPORATE EXISTENCE. 13 •would involve historical discussion which if full and critical would occupy too much space, and if partial and cursory would be of little value. But it is well to note that the early division of lay corporations into eleemosynary and civil is still of considerable import- ance, owing to the fact that there are different statutory enactments governing them in most of the states, and to the further fact that judges of our courts, as in former times, in determining the respective rights of the two classes, apply to them diflFerent principles and rules of construction. Civil corporations comprise all which have for their object pecuniary profit, and all are muni- cipal and other public corporations which perform any of the functions of government. Those created by statutes and city ordinances for the relief of the dis- tressed indigent and helpless members of society, such as hospitals, insane asylums, and homes for feeble- minded children are civil and not eleemosynary.' Oreeks from whom the idea was derived and the practice adopted hy the Ro- mans. At any rate some of the most important conceptions of corporations owe their origin to the Roman civil law. Private trading corporations are of almost as ancient origin as municipal, but they were at all times under the ban of dis- favor with the ruling powers of Greece and Rome and to some extent among the people of modern nations. An evidence of this is found in the abolition of all trading companies by one imperial decree of Augustus. The classifications of the early English Judges and law writers though still retained in our law books, were based on a state of political and religious affairs which have no ex- istence in this country. Though most of the definitions of that period will apply to institutions found among us at the present day, yet this branch of the law is greatly simplified by limiting the primary classification of corporations to the heads public and private here given. There were at the period mentioned, the general division into ecclesiastical and lay; the first term including all religious corporations and the latter all other kinds. Ecclesiastical corporations were before the Reformation subdivided into regular and secular. Regular cor- porations were composed of ecclesiastical persons who lived under some rule and had a common dormitory and refectory and were obliged to observe the statutes of their order; while secular were so called because they performed spiritual offices and took upon themselves the care of souls. ' 1 Blk. Com. 471 ; 1 Kyd on Corp. 27. The reason for so classifying them is that in providing for them the body politic does not administer a private charity but performs a duty to the unfortunate among the members constitute in? it. 14 THE CORPORATE EXISTENCE. § 11 Eleemosynary corporations comprise all having for their objects the prosecution of purely charitable objects and the promulgation of religious and humane doctrines when personal gain forms no part. This de- finition embraces all colleges and other educational institutions founded by private gifts and bequests in aid of those who have not the means for otherwise pursuing their studies.^ Though the government be the principal promoter and supporter of a corporation having for its object the gratuitous distribution of alms or free education of persons, yet unless it con- ducts and controls it as a part of the governmental autonomy, the institution is not a public but a private eleemosynary corporation.* The object to be accom- plished by public corporations are strictly public ; by private corporations strictly private. Public corpora- tions assume some of the duties of the state in a sub- ordinate relation to the state and within circumscribed boundaries fixed by it. Private corporations, are such as have no public interest to subserve except in a vague sense, and their principal object is the emolument of their members. There is a class of private corporations, sometimes called quasi public, having a concern with certain expensive undertakings which though highly beneficial to the public are imdertaken from no sense of public duty but in consideration of valuable con- cessions and privileges conferred by the state and from the further motive of employing the franchises thus conferred in the prosecution of gainful private enterprises.* 1 Dartmouth College v. Woodward, 4 Wheat 681; 1 Blk. Com. 471; 1 Kyd on Corp. 25; Trustees of Phillips Academy v. King, 12 Mass. 546. " It was so held in a case where an act of Congress reserved certain town- ships for the use of a seminary of learning and by subsequent acts incorporated it as the Vincennes University and provided that the trustees in their corporate capacity or a majority of them might sell and convey any portion of the land not exceeding four thousand acres for the use of the university and rent the remain- der for the same use. Vincennes University v. Indiana, 14 How. 268. ' McKim V. Odom, 3 Bland Ch. 407. A public corporation has been de- §§ 12,13 THE CORPORATE EXISTENCE 15 § 12. The range of objects not decisive. — In determining ■whether the powers exercised are public or private, regard should be had not so much to the nature and character of the rights conferred as to the object and purpose of the legislature in conferring them. If granted for public purposes exclusively they belong to the corporate body in its public and political character. But if the grant was for purposes of private advantage and emolument though the public may derive a com- mon benefit therefrom the corporation quoad hoc is to be deemed private. Corporations which exercise any delegated powers of government are public however restricted as to the number and extent of the exercise of such functions. In this sense school districts, road districts and the like are public corporations. Unless public objects are contemplated and designated in its creation the cor- poration is private though the government be the prin- cipal stockholder. § 13. Private corporations performing public duties. — Merely conferring power for the performance of duties of a public character does not make a corpora- tion public even though such duties amount to police regulations. The Statute of Henry VIII, ch. 5, created the college of physicians in London and authorized them in their corporate capacity to impose a fine on persons practicing without its license and yet it was held to be a private corporation.^ All corporations are founded upon the principle that by their creation fined to be one which cannot carry out the purposes of its organization without chartered rights from the commonwealth. Alleghany County v. McKeesport Diamond Market, 123 Pa. St. 164; 16 A. 619; and a private corporation as one needing no franchise from the state in order to carry on its business. Pittsburgh's Appeal, 123 Pa. St. 374; 16 A. 621. ^ Begents of Uniyersity of Md. t. Williams, 9 Gill . & Johns. 365. 16 THE COKPOUATE EXISTENCE. § 14 the public interest or convenience will be promoted, and the mere fact that the public derives a benefit from it is not suflScient to determine its character as public or private.^ This applies to all insurance, canal, bridge and turnpike companies. ^ The true criterion is whether the objects, uses, and purposes for which the corporation was organized were solely for public benefit and convenience or for private emolument, and whether the public can participate in them by right or only by permission.^ § 14. Subdivision common to both. — Both public and private corporations are susceptible of subdivision into aggregate and sole, such subdivision relating to func- tional control and primary constitution. Corporations sole have their objects carried out by a single incum- bent, while corporations aggregate are usually composed of more than one. Still, if in a capitalized corporation one person should become possessed of all the stock 1 A corporation having for its objects the promotion of private interests of owners of real estate in a district and of others not included in its provisions was held to be a private corporation though its powers were co-extensive with the district. Directors v. Houston, 71 111. 318. 2 Tinsman v. Belvidere Del. R. R. Co., 2 Dutcher N. J. 148; State v. New Orleans Gas Light & Banking Co., 2 Rob. La. 529; Ten Eyckv. Del. & R. Can Co. 3 Har. (N. J.) 200. » Ala. etc. R. R. Co. v. Kldd, 29 Ala. 221; Sweat v. Boston, 3 Clifford, 339. The property of a railroad corporation is in the hands of individuals who exer- cise control and management for their own benefit, while the public derives a benefit and has an interest regulated and guarded by the state. The status of railroad and turnpike companies is well defined by Ruffin, C. J., In R. & G. R. R. R. Co. V. Davis, 2 Dev. & Batt. 451: " As to the corporation it is a franchise like a ferry or any other. As to the public it is a highway and in the strictest sense publici Juris. The land needed for its construction is taken by the public for the public use and not merely for the private advantage of individuals. It is only vested in the company for the purposes of the act, that is to make the road." Water companies incorporated to supply cities or districts and gas com- panies are quasi public corporations whose primary objects are mainly private in the same sense with railroad companies. Society, etc., v. Butler, 12 N. J. Eq. 49S. A valuable explanation of the distinction between a t)ublic and a private corporation may be found in the City of Louisville v. University of Iiouisville, 15 B. Mon. 642. § 15 THK COlil'OUATE KXISTEXCE. 17 or in case of an incorporated non-capital association a,ll the members except one should die or resign, tlie character of the corporate body would in neither case change from aggregate to sole, such not being the intent of the legislature at its creation. Nor in such cases is the corporation dissolved. By the death of nearly all its members the corporate enterprise may come to an end or become impossible of further prose- cution, but the corporate entity still exists until dis- solution in the manner provided by law,^ Number is often made the test of classification as sole or aggregate ; but such test seems arbitrary and misleading. Those corporations which at their creation imply an undivided individual responsibility are sole, and those which by the form and terms of their creation are designed to combine divers interests are aggregate. Under the first head fall the office of Governor, that of person, rector, etc., in churches in England and in this country where incorporated as such. Municipalities, capital stock insurance, banking, manufacturing and railroad companies and all incor- porated, mutual benefit and fraternal societies be- long to the class of corporations aggregate. § 15. Public corporations sole distinguished from private. — The incumbents of public corporations sole are trus- tees for the people and the interests they represent. In case of a minister of a parish who is seized of lands in its right as a corporation sole he holds them to him- self and his successors in trust ; and in case of a vacancy the parish is entitled to possession and may enter and take possession until there is a successor.^ 1 Infra, § 1006. '^ N. Hempstead v. Hempstead, 2 Wend. 135. Under the general banking law of New York of 1838 an individual banker was held not to be a corpora- tion. Hallett V. narrower, 33 Barb. 537; Codd v. Rathbone, 19 N". Y. 373; Bank of Havana v. Magee, 2 Id. 355. 2 18 THE COKPOKATB EXISTENCE. § 15 And it is held that whenever any oflBcer or other per- son is authorized to hold real and personal property to himself and his successors he thereby becomes a corporation sole,^ Mr. Kyd, an excellent authority on the law of corporations in England, distinguishes very clearly between the two classes of corporations sole. Of the one class are those wherein the incumbent acts only as a trustee for the benefit of others, and of the other those where the incumbent has a corporate power for his own benefit. The Chamberlain of the City of London, he places in the class of public corporations sole, " who," says he "may take a recognizance to himself and his successors in his politic capacity in trust for the orphans." 2 Corporations sole, the incum- bents of which hold particular ofiicds with power to act in their public character as trustees for others in- volve the necessity of having perpetual succession and the power of suing and being sued in their public character as far as their trusts are concerned. A cor- poration aggregate may acquire and hold personal property for itself and its successors but a corporation sole cannot at common law.^ They are empowered by 1 Thomas v. Dakin, 22 Wend. 1, 102; Denton v. Jackson, 2 John (Ch.) 235. 2 In England there are many authorized appropriations of particular rev- enues to corporations sole, which belong to the incumbent not in his natural but in his public capacity, and the right to them vests at death not in his heirs but in his successors in office. All such are private corporations, as they subserve no public interest except in a very limited sense. * " A bishop or parson acting in a corporate capacity, and holding property to him and his successor in right of his office, has no need of a corporate name, he requires no peculiar seal, in his own name, and name of office ; his own will regulates his acts, and he has no occasion for a secretary, for he need not keep a record of his own acts ; no need of a treasurer, for he has no personal property except the rents and proceeds of the corporate estate, and these he takes to his own use when received. By-laws are unnecessary, for he regulates his own ac- tion by his own will and judgment, like any other individual acting in his own right. Such a person holding an estate as a sole corporation dies or resigns his office; the fee is in abeyance until a successor is appointed. Tiie incumbent holds the property to his own use and benefit whilst he retains the office, and afterward the estate and the enjoyment of it go together to his successor. The § 16 THE COKPORATJi; KXISTENCE. 19 statute however to take and transmit personalty to their successors. Few general principles apply alike to aggregate and sole corporations. There are but few private corporations sole to be found in the United States at the present day. Where they exist they have been created or provided for by statute. § 16. Existence of private corporations beneiicial. — Re- gardless of prejudices and popular demands for strin- gent statutory limitations and strict judicial construc- tion the necessity for private corporations is almost universally admitted. Without them no rights could be continued beyond the lives of persons possessed of them. For such great works of internal improvement as require enormous investments in land, machinery and other property and in wages before yielding a revenue, railroads for instance, and such enterprises as from their nature could not be profitably prosecuted for short periods, such as the business of banking and insurance, they may be said to be indispensable.^ Uansmission of the estate is perpetual, but the beneficial enjoyment changes at each succession. On the other hand, a corporation aggregate has a perpetual existence without any change, so that an estate once vested in it continues vested without interruption. From this flows one necessary but obvious legal consequence, which is, that a grant to an aggregate corporation carries a fee without the word successors ; while a grant to a corporation sole without includ- ing successors carries a life estate only to the actual incumbent who is the first taker." Overseers v. Sears, 22 Pick. 125. 1 Many examples of Koman jealousy of private corporations might be given. The same prejudice existed until a comparatively recent date in England. There is still a deep seated jealousy cherished and cultivated among the people against certain phases and tendencies of private corporations. It never totally disap- pears, but on occasions with little or much provocation becomes a popular cla- mor. The basis of the present fear in regard to corporations is not as formerly, that they will exercise directly the functions of government, but that they will by unfair and cornipt means influence the instruments of government, and that their ability and opportunity to do so is furnished in the facilities the law of their creation gives them to absorb and aggregate wealth and with it operate on 20 THE COIITOUATK EXISTKNCE. the hopes, fears and necessities of both tlie peojjle and those to wliom tliey have for the time, entrusted legislative, judicial and executive duties. It must be ad- mitted that the spirit of injustice and the disposition to prey upon wealthy cor- porations has sometimes characterized legislators to such an extent as to almost justify such corporations in going into politics in self-defense. Notwithstanding numerous and widespread suspicions and warnings there is ' an undeviating trend of legislative enactment and judicial construction favor- able to their numerical increase and the extension of corporate privileges and •objects. In justification of this policy, great reliance is placed upon the wisdom and •virtue of the people and their representatives supposed to be sufficient to meet and dispose of any dangers whicli may arise from this source. Time alone can ■determin* whether that confidence is being safely reposed or perilously mis- placed. Like other great political and economic problems beset with difficul- ties, it will probably be solved and set at rest when our form of government and liberties become imperilled, if that time should ever come, and not before. In whatever there is opportunity for competition on equal terms, as in trading, in- surance, banking and the like, there can be no valid objection to an unlimited number of corporations ; but where the necessities of the public or geographical conformation have provided vantage points as in the business of transportation, furnishing light apd water to cities and districts, and in certain manufactures the number which can operate within a given territory successfully is often re- stricted to one, and monopoly with the opportunity for oppression, extortion and accumulation of colossal wealth is a necessary consequence. § 17 ESSl!;>iTlALS OF ACT OF INCOBPOKATION. 21 CHAPTER II. ESSENTIALS OP ACT OF INCOBPORATION. § 17. Authority to act as a corporation, how derived and evidenced. J 8. Whether corporations may exist by prescription. 19. Indirect authorization. 20. Quasi corporations. 21. Official boards. 22. Must have capacity to perpetuate itself. 23. Joint stock companies. 24. Agricultural societies. 25. Irrigation districts. 26. Reclamation and drainage districts. 27. Private irrigation corporations. 28. Power of Congress and state legislatures to create corporations. 29. Constitutional limitations. 30. Cannot create by amendment of charter. 31. Delegation of power to incorporate. 32. Territorial corporations. 33. States cannot delegate the authority. 34. Incorporation under general laws. 3.5. What the articles should contain. 30. Reorganization, re-incorporation and amendment of articles. 37. Stricter compliance with general law required than with provisions of special charter. .38. Such general law the measure of authority. .39. Performance of conditions precedent. 40. No common law conditions. . 41. Conditions precedent and subsequent requirements distinguished. 42. Conditions precedent prescribed on grounds of public policy. 43. The state alone can object. 44. Evidence of incorporation. 4.5. Of foreign corporations. 46. Pleading and denying corporate existence. 47. Issue of corporg,te existence how raised. § 17. Authority to act as a corporation, liow derived and evidenced. — No power less than the government of :i state can create a body corporate and politic,^ Though 1 Franklin Bridge Co. v. Wood, 14 Ga. 80; United States Trust Co. v. Brady, 20 Barb. 119; Penn. R. R. Co. v. Canal Com'rs., 21 Pa. St. 9; McKim v. Odom, "11 ESSENTIALS OF ACT OF INCORPOEATJON. S -lo it is essentially an act of sovereignty, yet by the common law and by its recognition and adoption in this coun- try the sovereign will need not be evidenced by direct and express language. The sovereignty meant here is the act or assent of the law however established. When it is said in England that the creation of a cor- poration is the exercise of royal prerogative, it is meant that these political institutions must, in some form, have royal authority for their existence, which author- ity may be inferred as well from long acquiescence as from direct acts of recognition or appointment. So in several of the United States it is well settled that the right to enjoy and exercise a corporate franchise, need not necessarily rest upon an express legislative grant special or general, but may be acquired by prescrip- tion. ^ § 18. Whether corporations may exist by prescription-— Under the practice which prevailed in the United States, until a comparatively recent period, and still exists in some of the states, of creating corporations by special charter after the manner of the English govern- 3 Bland. Oh. (Md.) 407, 417; Stowe v. Flagg, 72, 111,397; Hoadley v. County.etc., Essex, 105 Mass. 51U; Slate v. Bradford, 32 Vt. 50. It is immaterial whether the legislative will be exercised in the form of special or general laws. Re Gilbert El R. Co., 70 N. Y. 361; People v. Bowen, 21 N. T. 516. 1 Thus where a body had held itself out as a corporation and had exercised corporate functions for a period of twenty years a legislative grant was pre- sumed. All Saints Church v. Lorett, 1 Hall N". Y. 191; Rose Hill & E. R. Co. V. People, 115 111 133; 3 N. E. 725. But such rule is not recognized in all the stales. In California the Supreme Court held that admitting a legislative recog- nition a corporation of that character (meaning a private corporation) could not be created by legislative recognition, the Constitution of California, Art. 4, Sec. 31, prohibiting the creation of corporations except for muncipal purposes other- wise than by general laws ; Railroad Co. v. Plumas County, 37 Cal. 354; and it was held that a mere license to enter a state given to a railroad company of an- other state did not create a new corporation. Goodlett v. L. & N. R. R. Co. 122 IT. S. 391;7S.Cfc. 1245. See also"o.& M. R. Co. v. Wheeler. 1 Black, 286, 393^ 297; Railroad Co. v. Harris, 12 Wall. 6."), S3; Railroad Co. v. Yancp, OOU. S.'45o' 457; M. &, C. R. R. Co. v. Alabama, 107 U. S. 581, 584; 2 S. Ct. 482; Penn. Co' v. St. L. A, & T. il. Co., 118 U. S. 290. § 18 ESSENTIALS OP ACT OF INCOKPOKATION. 2S ment, there grew up certain rules of construction bor- rowed largely from that source, and applicable alike to corporations so chartered in both countries. While the system of principles thus built up apply, for the most part, to private corporations organized under general laws, yet those created by the method last mentioned present certain organic and functional phases, to which principles well recognized under the old practice are clearly inapplicable. While the courts have in a few cases tacitly acknowledged such to be the case, and de- cided contrary to long established precedent, they have been^low to set forth the reasons for a departure which it was necessary to take in order to meet the changed conditions. But the initiatory steps having been taken, the advance to new ground will doubtless proceed rapidly and surely. The principal recent divergence is that where there are general incorporation laws enacted under constitutions prohibiting the creation of any corporations, except municipal by special act, there can be no private corporations by prescription (which is a tacit sovereign recognition) nor even by express legis- lative recognition. In other words, where the claim of corporate existence and right to exercise a corporate franchise is called in question by a proper proceeding, nothing less than proof of substantial compliance with statutory provisions will support the claim.-' 1 111 People V. Stanford, 77 Cal. 351; 19 P. 693, the court said: "Asagainst the state there is no presumption that citizens exercising a franchise, are exer- cising it rightfully . . . Even if it were conceded that under our law a franchise can be acquired by prescription, it would still be for the defendant in a proceed- ing like the present (quo warranto) to allege and prove the long continued use." See also People V. Cheesman 7 Col. 376; 3 P. 716. The New York & L. I. Bridge Co. was incorporated by Laws N. Y. 1867, c.395, for the purpose of build- ing a bridge. The bridge was to be built within a certain time, or all the rights and privileges of the petitioner under the act would cease. By Laws 1885, c 392, the period for the construction of the bridge was extended, and it was pro- vided that it should be built for railway, foot and carriage travel. It was held that as the legislature had no power to make the provision for railroad travel, under Const. N". Y. art. 3, Sec. 18, providing tliat the legislature shall not pass a 24 ESSENTIALS OF ACT OF INCORPOBATION. §§ 19,20 But the existence of a right or title constituting an essential element of corporate existence maybe estab- lished by prescription in this as in other cases.* § 19. Indirect authorization.— Since in theory corpo- rate powers are granted for the benefit or convenience of the public, the language creating them usually receives a liberal construction, the legislative intendment being often inferred from general and inexact terms. ^ § 20. Quasi corporations. — However it may be in re- gard to prescriptive rights to corporate existence, there is no doubt that bodies may be so organized and con- structed, by law, and given such powers as are incon- sistent with other intention on the part of the legisla- ture than that they shall exercise their powers in a corporate capacity. Often in the administration of governmental affairs and sometimes in the transactioa private or local bill granting to any corporation the right to lay down railroad tracks, or provide for building bridges, and chartering companies for such pur- poses, the extension of time granted to the petitioner must fall with the con- dition upon which it was granted; and that an application of the petitioner to acquire certain lands must be denied, though at the time of such application, no bridge had been built nor any rails laid. In re New York & Long Island Bridge Co., 5 N. Y. S. 77; 7 N. Y. S. 445 ; 21 N. Y. S. Rep. 858. 1 Where an association of proprietors of common land has, for more than 5a years, been in possession of the land, and has, during all that time, acted as a corporation under proceedings of incorporation regular on their face, the val- idity of the proceedings cannot be attacked by proof that the proprietors had not the kind of title necessary for a valid act of incorporation. Proprietors of Jeffries Neck Pasture v. Inhabitants of Ipswich, (Mass.) 26 N. E. 239. •' It is held that no special form of words is necessary to create a corporation by special act, and that a mere grant of power to perform corporate acts in itself implies a grant of corporate capacity. Com. v. West Chester R. R. Co., 3 Grants Cas. (Penn.) 200. And in another casethat a mere grant of lands by the state to individuals to be possessed and enjoyed by them in a corporate char- acter in itself conferred upon such individuals tlie right to take and hold in a corporate capacity. N. Hempstead v. Hempstead, 2 Wend. [N. Y.) 219. But in Southern Pac. E. Co. v. Orton,.'!2Fed. R. 4.-)7, it was held that the granting of other than the specific franchise constituting a corporation and of other privi* leges and powers to a pre-existing corporation are not acts regulating the con- duct of the existing corporation in its relation to and intercourse with the pub- lic and other persons natural and artifical. § 21 ESSENTIALS OK ACT OF INCOUPOKATION. 25 of businses of a public nature, it becomes necessary for men to organize themselves into permanent collec- tive bodies. Upon some of these the law has conferred rights and powers very like those enjoyed and exercised by corporations ; and to that extent and no farther, they are corporations. To distinguish these from those regularly constituted and clothed with complete cor- porate authority, they are termed quasi corporations. i The people of a county are not a corporation in any sense nor are they recognized in law as capable of suing or being sued. But the country itself is a corporation and as such may become party to a suit.2 But at com- mon law all collective bodies of men, such as towns and parishes as had corporate capacities for specified purposes, though without the ordinary general powers of a corporation, were quasi corporations, and as such vested with powers coextensive with the duties im- posed upon them hj law.^ § 21. Official boards. — State boards of Railroad Com- missioners, Commissions of Horticulture, of Viticulture, State Labor and Mining Bureaus and the like are vested by law with powers similar to those exercised by muni- cipal corporations among which are the powers to institute legal proceedings, to send for persons and papers, arid compel obedience. With respect to such rights and powers they are to be considered as corpo- rations. It may be stated generally that where bodies 1 Adams v. WiscassetBank, 1 Me. 361; Harrison v. Timmins, 4 M. & W. 510; Instances of quasi corporations are: Counties; Goodnow v. Commrs. Ram- sey County, 11 Minn. .31, 41; Hannibal & St. Joseph R. Co. v. Marion County, 36 Mo. 294; School Dist. v. Thompson, .5 Minn. 286; Lawrence County v. Chat- taroi R. R. Co., 81 Ky. 22.5; Hampshire v. Franklin, 16 Mass. 87. ; Boards of Supervisors of Counties and County Commissioners ; Board of Commrs. v. Mighels, 7 Ohio St. 109; Vankirk v. Clark, 11 Searg. & R. 28; Commrs. v. Gherky, Wright R. 493; Supervisors .V. Bowen, 4 Lansing, 24. ^ Smith V. Myers, 15 Cal. 33. ' Clarissy v. Metrop. Fire Dep't; 7 Abb. Pr. (X. S.) ?M. 26 ESSENTIALS OF AGT OF 1:NCI)UPOKAT10-\. §§ 2'2, 23 and political persons are created by law, and are charged ■with the administration of legal duties, and directed to adopt the necessaiy measures for enforcing obedience to their rules and respect for their authority, they are to that extent bodies corporate, and may be described generally as quasi corporations.^ § 22. Must have capacity to perpetuate itself. — ^But in order to constitute a body a qiiasi corporation, there must be not only a distinct existence and the right to exercise some of the powers of corporations, but there must be a capacity to perpetuate its existence and such stability in its organization as entitles it to a standing in court as a political person.^ § 23. Joint Stock Companies. — Joint Stock Companies may be cited as quasi corporations of a private character. They have some of the features of a copartnership 1 See Dean v. Davis, 51 Gal 406. A Reclamation District is declared to be a public corporation, in People v. Rec. Dist. No. 108, 53Cal. 546; People v. Wil- liams, 7 Pac. C. L. J. 120; Halte v. Perdue, 62 Cal. 545. Additional examples of quasi public corporations are : Overseers of the Poor ; Pittstown v. Plattsburg, ] 8 Johns, 407 ; Kewen v. Johnson, 3 Denio, 185 ; Arraine v. Spencer, 4 Wend. 406 ; Palmier v. Vandenberg, 93 Wend. 193 ; County Supervisors v. Hartwell, 8 Johns, 424; Johnson v. Ostrander, 1 Cow. 670; Board of School Directors; Inhabitants of School District v. Wood, 13 Mass. 198; Lexington v. McQuillan, 9Dama, 519; Grant v. Francher, 5 Conn. 309; Dist. v. McCloon, 4 Wis. 79; Clarke v. School Dist. 3 E. I. 199; Horton v. Garrison, 24 Barb. 176 ; State v. Hulliu, 2 Or. 306; Road Commissioners; Duntz v. Duntz, 44 Barb. 459. ■^ It was held that the General Assembly of the Presbyterian Church is not a corporation in any sense. It is a segregated association, which though it is the productive organ of corporate succession,, has no corporate quality. Comm. v. Green, 4 Whart. 531. Subordinate lodges of the I. O. O. F. organized by the Grand Lodge in Tenn. and vested by statute with power to take and hold title to property, were held to have continuing personality and to be capable of hold- ing and administering a trust; but they were held not to be corporations. Heis- kell v. Ohichasaw, Lodge 87 Tenn. 668. For a case in which the facts were of peculiar historical interest and the exposition of the law on the subject able and exhaustive, see Baeder v. Jennings, 40 Fed. Rep. 199. But the fact that the business of a lumber company is conducted by a president and secretary raises no presumption of corporate existence. Clark v. Jones, 87 Ala. 474; 6 So. 362. See also Duggan v. Investment Co., 1 Colo. 113; Wood v. Construction Oo., 56 Conn. 87; 13 A. 187. § 23 • ESSENTIALS Oi' ACT OF INGOKPOUATIOX. 27 and others of a private corporation. A joint stock company being, in legal effect, as respects its relations to the state and its liabilities to parties dealing with it, a copartnership^ need have no statutory authority (l) Kellogg Bridge Co. v. U. S. 15 Ct. CI. Ill; Cross v. Jackson, 5 Hill, 478; Boston & Albany R. R. Co. v. Pearson, 12S Mass. 445; Kramer v. Arthurs, 1 Pa. St. 165; Wescott v. Fargo, 61 jST. Y. 542; Skinner v. Dayton, 19 Johns. 5ir,; Wells v. Gates, 18 Barb. 554; Taft v. Ward, 111 Mass. 518; Cutter y. Estate of Thomas, 25 Vt. 1i; Frost v. Walker, 60 Me. 468; Gott v. Dinsmore, 111 Mass. 45; Newell v. Borden, 128 id. 31; Keasley v. Codd, 2 Carr. & P. 408; Moore v. Brink, 4 Hun, 402. In Taylor v. Ifill, 1 N. Y. 576 it was held that the transferree in an unincorporated joint stock company was liable for all debts existing before or subsequent to the transfer. In Lewis v. Tilton, 64 la. 220, the court say :— " It is immaterial whether tlrey be so held because, they held themselves out as agents for a principal that had no exist- ence, or on the ground that they must, under the contract, be regarded as prin- cipals, for the simple reason that there is no other principal in existence," and held the ofQcers entering into a contract for the company personally liable. See also Reding v. Anderson, 34 N. W. (la.) 300; Phillips v. Blatchford, 137 Mass. 510; Davidson v. Holdeu, 10 A. (Conn.) 515; Fredenhall v. Taylor, 26 Wis. 220. In Dayton &c. R. R. Co. v. Hatch 1 Sis. Cin. S. Ct. (Ohio) 849 the Court say : " As no one is bound to own property in indivision, it follows that such owners who wish a division have a right to have that property sold, and after a liquidation of the affairs of the concern to have the residue distributed ratably among themselves." Compare Chandler v. Brainard, 31 Mass. 285; Ir- vine V. Forbes, 11 Barb. 587; Ridenour v. Mayo, 40 O. St. 9; Manning v. Gash- arie, 27 Ind. 399; Livingston v. Lynch, 4 Johns. Ch. 573; Frost v. Walker, 60 Me. 468; Townsend v. Goewey, 19 Wend. 423. The same duties as to giving notice of an interest by one of the holders of the stock as in an ordinaiy co- partnership. Shamburg v. Abbott, (Pa.) 4 A. 518. At common law the mem- bers of a voluntary association are in legal effect partners and should be sued as such. Pipe V. Bateman, 1 la. 3^; Williams v. B'k of Mich., 7 Wend. 542; Wells V. Gates, 18 Barb. 554; Hess v. Werts, 4 S. & W. (Pa.) .356. Their relation is not altered by statute in Cal. Sec. 368. C. C. P. As to wliat constitutes doing business under a common name, see Swift v. S. F. S. & E. Board, 67 Cal. 567; 8 P. 94. The same rule of practice applies where the business is done under a com- mon name as if the associates were partners. Sec. 388. C. C. P. of Cal. and sim- ilar statutes are pennissive and the parties behind the common name may still be individually sued. Whitman v. Keith, 18 Ohio St. 134; Feder v. Epstein, 66 Cal. 456, 458; Davidson v. Knox, 67 Cal. 143. To same effect Iron Works v. Davidson, 3 Cal. 389; see also 75 Cal. 590. Thn New York Code, Civil Proce- dure, Sec. 1919, differs from Sec. 388 Cal. C. C. P. in allowing the suit against the association in the name of its president or treasurer. It is therefore held that the liability of members is neither extended or lessened by such statute, and they may still be sued directly on their individual liability. Kingslandv. Braisted, 2 Laus 17; Park v. Spaulding, 10 Hun, 128. The name assumed by parties in tlieii dealings is not decisive of their capacity or of the character of their association. In Lawler v. Murphy, 58 Conn. 294; 20 A. 457, it was held that a crrtificnto rociting a contract between the holder and 28 ESSKisTIALS OW ACT OK INCOKPOEATION. § 23 for its creation^ although the creation of, such com- panies is sometimes authorized by statute.^ There the state Insurance Fund A. O. H., and signed by its officers, the personal liability of the latter is sufficiently shown by a complaint which alleges that they were jointly engaged in carrying on a life-insurance business, and entered into the contract under the name of the " State Insurance Fund A. O. H." It is generally not necessary to sue all the members where plaintiff elects to proceed against them personally instead of proceeding against the common property. See Wood v. Draper, 24 Barb. 187; Pipe v. Bateman, 1 Iowa, 369; Phipps T. Jones, 20 Pa. St. 260; Mandeville v. Kiggs, 2 Pet. 482; Smith v. Lock- wood, 1 Code Kep. K S. 319; Snow v. Wheeler, 113 Mass. 179; Birmingham v. Gallagher, 112 Mass. 190; Lloyd v. Loaring, 6 Ves. 773; Deems v. Albany & V, Line, 14 Blatchf. 471. But one of the associates cannot sue without joining the others with him unless he sue in a representative capacity. Liggett v. Ladd Or.), 21 P. 133. (1) Lindley on Partnership, 192. This authority after citing and commenting on various English cases in a note thus concludes. — "The case of Blundell v. Winsor, always relied upon as an authority by those who contend that such a, company is illegal, has never met with approbation from the bench, nor has it ever been followed. Upon the whole, therefore, it appears that there is no case deciding that a joint-stock company with transferable shares, and not incorpo- rated by charter or act of parliament, is illegal at common law ; that opinion have nevertheless differed upon this question; that the tendency of the courts was formerly to declare such companies illegal; that this tendency exists no longer; and that an unincorporated c©npany with transferable shares will not be held illegal at common law unless it can be shown to be of a dangerous and mischievous character, tending to the grievance of her majesty's subjects. The legality at common law of such companies may therefore be considered as finally established." He cites and discusses Rex v. Dodd, 9 East. 106; Buck v. Buck, 1 Campb. 547; Duverger v. Fellows, 5 Bing. 248; Josephs v. Pebrer, 3 B. & G. 639; R. V. Stratton, 1 Campb. 549, n.; Blundell v. Winsor, 8 Sim. 601; 10 B. & C. 826; Kinder v. Taylor, Coll. on Partn. 917f 2nd. Ed., holding unincorpo- rated associations with transferable shares to Be illegal, and Sheppard v. Oxen- ford, 1 K. & J. 491; Ex parte Barclay, 26 Beav. 177; R. v. Webb, 14 East. 316; Kockels V. Crosby, 3 B. & C. 814; Pratt v. Hutchinson, lo East. 511; Ex parte Aston, 27 Beav. 474; Walburn v. Ingilby, 1 M. & K. 61; Kimpson v. Samiders, 4 Bing. 5; Brown v. Holt, 4 Taunt. 587; Ellison v. Bignold, 2 J. & W. 310; Ex- parte Grisewood, 4 De G. ifc J. 544; Garrard v. Hadley, 5 Man. & Gr. 471; Har- rison V. Heathorn, 6 Man. & Gr. 81, holding the contrary. Most of the Englnli cases which insist upon the illegality of joint stock associations are found upon examination to have been largely influenced by the iniquitous practices under the Bubble Act in force from 1"20 to 1826. The view in Massachusetts was thus expressed by the court in Phillips v. Blatchford, 37 Mass. 510, " It is too late to contend that partnerships with transferable shares are illegal in this com- monwealth The grounds upon which they were formerly said to be illegal in England, apart from statute, have been abandoned in modern times." See also Snow v. Wheeler, 113 Mass. 179; Townsend v. Goewey, 19 Wend. 423. 2 When organized under statutory authority as they may be in England, in New York and perhaps om^ or two other states they resemble corporations more than copartnerships, thougli declared not to be tlie formpr. The only respect § 23 i:SSENX[ALS OF ACT OF INCOKPORATION. 29 are, however, at least two exceptions to this rule. In Louisiana^ and Illinois^ joint stock companies in which shares are .issued to represent the separate inter- in which a joint stock company whose capital is divided into shares and made transferable resembles a copartnership consists in the fact that its members are still held to unlimited liability to creditors and partners. Joint stock companies may be organized in New York under Sess. Laws 1854, ch. 245 ; Sess. Laws 1858, ch. 172; Sess. Laws 1867, ch. 289; Sess. Laws 1868, ch. 290; Sess. Laws 1881, ch. 599. For cases arising under these various acts see Leavitt v. Yates, 4 Edw. 134; B'k of Watertown v. Watertown, 25 Wend. 686; Boisgerard v. N. Y. Bkg. Co., 2 Sandf. ch. 231; Gifford v. Livingston, 2 Den. 380; Warner v. Beers, 25 Wend. 103; Willoughby v. Comstoek, 3 Hill, 389; People v. Niagara, 4 Hill, 20; Matter of B'k of Danville, 6 Hill, 370; Leavitt v. Blatchford , 17 N. Y. 521 ; Tracy v. Talmage, 18 Barb. 456; Talmage v. Pell, 7 N. Y. 328; Falconer v. Campbell, 2 McLean, 195; Duncan v. Jones, 32 Hun, 12; Culver v. Sanford, S Barb. 225. The only effect of the statutory declaration that they are not cor- porations is to fix the liability of the members as copartners, Boston & Albany K. E. Co. V. Pearson, 128 Mass. 445; Oliver v. Liverpool & London Life & Fire Ins. Co., 100 Mass. 531, and depriving them of the limitation in that respect incident to corporate membership. They are treated by the courts generally as corporations. See Fargo v. Louisville, New Alb. & Chicago Ry. Co., 6 Fed. Kep. 787; Waterbury v. Merchants' Union Ex. Co., 50 Barb. 157; Liverpool Ins. Co. \. Mass. 10 Wall. 566; Oliver v. Liverpool & London Fire Ins. Co., 100 Mass. ■VA; Sanford v. B'd of Supervisors of N. Y., 15 How. Pr. 172. They are also treated as corporations under tax laws. People v. Wemple, 52 Hun, 434; but they cannot sue as such In the federal courts. Chapman v. Barney, 129 U. S. 677. 1 .'^tate V. American, etc., Trust, 40 La. Ann. 8; .3 So. 409; 1 Ey. Corp. I,. J. 509. In Factors', etc., Ins. Co. v. Harbor, etc., Co., 37 La. Ann. 233, 239, such an organization was described as "a nondescript organization, composed of the owners of certificates showing the proportion of their respective interest in its assets and liability for its obligations, and who are co-owners or proprie- tors in common. As no one is bound to own property in indivision, it follows that such owners who wish a division have a right to have that property sold, and after a liquidation of the affairs of the concern to have the residtie distrib- uted ratably among themselves." - In Green et al. v. People ex rel., etc. (111.), 21 N. E. 605, it was held that " an association or number of persons, who, in conducting the business of insur- ance, profess to limit their liability to the amount of money contributed by each, and assume to give perpetuity to the business by making membership certifi- cates transferable by the assignment of the member or his personal representa- tives, are " acting as a corporation," so as to authorize a judgment of ouster on quo warranto under Rev. St. 111. 1874, c. 112, where they are not legally incor- . porated. The Court said:— "We think it clear that, in two respects at least, these respondents are acting as a corporation, and in pretending that they are actually incorporated, namely: First— in professedly limiting their liability to the amount of money contributed by each; second— in assuming to give per- petuity to the business bv making membership certificates transferable by the assignment of the member or his personal representative. It may be, as con- 30 ESSENTIALS OF ACT OF INCOKPOBATION. § 2S ests of members and made transferable are held illegal as usurpations of corporate functions. A joint-stock company has been defined as " a partnership whereof the capital is divided or agreed to be divided into shares _ and so as to be transferable without the express con- sent of all the copartners." ^ From this definition, it is seen that the object of forming such associations is to enjoy some of the benefits of corporate organization without actually becoming incorporated. ^ Bat be- tended by counsel, that individuals may insure property against loss by fire. They cannot limit their liability to any given amount of capital they choose to set apart for that purpose, nor can they pei-petuate the business without change of capital, beyond their own lives indefinitely. These things can only be done by a corporation." 1 Home's Appeal, 63 Pa. St. 273. Regularly organized corporations are in Mass. designated as joint stock companies. Atty.-Gen. v. Mer. Ins. Co., 121 Mass. 524. But they have few rights and immunities of an ordinary corporation however much their articles of association resemble the constating instruments of the latter. The object of these in a joint-stock company is to "regulate the duties of the of&cers and the duties and obligations of the mem- bers of such a company among themselves ; they specify the capital, limit the duration and define the business of the company." Bray v. Farwell, 81 N. T. 600. See also White v. Brownell, 42 Abb. Pr. X. S. 162, 193; Bobbins v. Butler, 24 111. 387, 426, 482. * They may perpetuate in themselves and their successors the ownership of real estate, by having it conveyed to the trustees of the association. This was a feature of the English Cost Book Mining Companies which existed in the coun- ties of Cornwall and Devonshire, England about the year 1850. For a full ex- planation of their plan of organization and of conducting business consult In re Wrysgan Co. , 5 Jur. N. S. 215 ; In re Prosper, etc. , Co. L. K. , 7 Ch. 286 ; Hybart T. Parker, 4 C. B. Jf. S. 209; Kittow v. Liskeard Union, L. R. 10 Q. B. D.; In re Bodwin,,etc., Co., 23 Barb. 370; Ex parte Chippendale, 4 De G. M. & G. 19, 52; Lanyon v. Smith, 3 B. & S. 938. The associates in a cost book mining ven- ture were uniformly held liable as partners. Johnson v. Goslett, 18 C. B. 728; afTd in, 3 C. B. N. S. 569; Northey v. Johnson, 19 L. T. 104; In re Wrysgan, etc., Co., 28 L. J. (Ch.) 894; Mayhew's Case, 5 De G. M. & 6. 837; Thomas v. Clarke, 18 C. B. 662; Xewton v. Daly, 1 F. & F. 26; Teake v. Jackson, 15 W. R. 338; Fenn's Case, 4 De G. M. & G. 285; Harvey v. Clough, 8 L. T. N. S. 324; Birch's Case, 2 De G. & J. 10; Ellis v. Schmoeck, 5 Bing. 521; Tredwell V. Bourne, 6 M. & W. 461 ; Hart v. Clarke, 6 De G. M. & G. 232. For cases governed by similar principles as those governing cost-book mining companies, see, generally, Treat v. Hiles (Wis.), 32 K. W. Rep. 517; Ward v. Davis, 3 Sandf. Rep. (N. Y.) 502; Watson v. Spratley, 10 Ex. 222; Hayter v. Tucker, 4 K. & J- 243; Mallory v. Russell, 32 N. W. Rep. 102; Holmes v. Mead, 52 N. Y. 332; Powell V. Jessop, 18 C. B. 336; Sparling v. Parker, 9 Beav. 450; Owens v. Mis- sionary Soc. of the M. E. Church, 14 N. Y. 380; Webb v. Wetherhead, 17 How. 576; Goeselle v. Bimeler, 5 McLean, 223; Gerard's Titles to Real Estate, p. 490 j § 24 ESSENTIALS OF ACT OP INCORPOKATION. 31 tween ordinary partnerships and corporations in the fullest sense, are found every possible variety of asso- ciation. The real character of the organization must in each case be determined by reference to the laws and articles of agreement under which it is formed. ^ § 24. Agricultural Societies — A county agricultural society organized under an act of a state legislature, by persons, and authorized to adopt a constitution and by-laws, to appoint the customary officers, to become a body corporate, with capacity to sue and be sued, " and perform all such acts as they deem best calcu- lated to promote agricultural and household interests " of the county and state, of holding real estate for its purposes, and receiving and accepting aid from the county, was held to be neither a public nor a quasi public but a private corporation aggregate, and as such liable out of its property and estate for negligence. In Dunn v. Brown County Agricultural Society^ the Court say : " It is true their purpose may be public in the sense that their establishment may conduce to the public welfare by promoting the agricultural, household and manufacturing interests of the county ; that in the sense that they are designed for the accom- plishment of some public good all private corporations are for a public purpose, for the public benefit is both the consideration and the justification for the special German Land Association v. Scholler, 10 Minn. 331; Slierwood v. Am. Bible Soc, 4 i.'ob. Pr. 227; Byam v. Beckford, 140 Mass. 31; Wliite v. Howard, 46 N. T. 144; Trustees, etc., v. Hart's Ex' rs, 4 Wheat. 1; McKeon v. Kearney, 57 How. Pr. 349; African, etc., Ch. v. Conover, 27 N. J. Eq. 157; Peabody v. Eastern Methodist Soc. in Lynn., 87 Mass. 540; Chapin v. First, etc., Soc, 74 Mass. 582; Gibson y. McCall, 1 Rich. 174; Leonard v. Davenport, 58 How. Pr. 384; Towar y. Hale, 46 Barb. 361. 1 There is not known to the laws of Massachusetts any intermediate form of organization between a corporation and a. copartnership. Bicker v. Am, L. & Tr. Co., 140 Mass. .346; 5 X. E. 284. - (Oliip) 25 Am. & Eng. Corp. Cas. 467. 32 ESSENTIALS OF ACT OF INCORPORATION. § 25 privileges and franchises conferred on them. These agricultural societies are not only of the free choice of their constituent members, but they are also by their active procurement ; for it is only when they or- ganize themselves into a society, adopt the necessary constitution and elect the proper officers that they^ become a body corporate, The State neither compels their incorporation, nor controls their conduct after- war ds.^ " § 35, Irrigation Districts — The subject of irrigation has become of vast and is of increasing importance in a number of Western and Pacific states and territories. From the very nature and necessities of the case, the supplying , of water from a common source to a com- munity of separate interests can only be accomplished by corporations operating on an extensive scale. Great waste and inequality are inseparable incidents to the use of water in agricultural development, and common observation would seem to teach that economy and ^ p. 471, 472. The only decision on the question of the liability of agri- cultural societies to actions for negligence prior to this decision was the case of Brown v. South Kennebec Agricultural Society, 47 Me. 24.o. The Maine ease like the Ohio case holds that an agricultural society is distinguishable from a quasi corporation in several essential particulars; and like an individual is responsible for injuries resulting from want of ordinary care and foresight ; but that the liabil- ity is corporate, to satisfy which only corporate property can be levied upon. It is a well established principle in both England and America that at common law private actions cannot be sustained against quasi corporations for neglect to perform a public duty. See Eastman v. Meredith, 36 N. H. 284, where Perley, C. J., in a very able and learned opinion classifies and to a certain extent recon- ciles the various decisions involving that question. In Biddle v. The Locks and Canals, 7 Mass. 187, the Court said: We distinguish between proper aggregate corporations and the inhabitants of any district who are by statute invested with particular powers without their consent. These are in the books sometimes called quasi corporations ; of this description are counties and hundreds in Eng- land, and county towns, etc., in this state. Although quasi corporations are liable to information or indictment for neglect of a public duty imposed upon them by law, yet no private action can be sustained against them for a breach of their corporate duty unless such action is given by statute. And the reason is that having no corporate existence and no legal means of obtaining one, each corporator is liable to satisfy any judgment rendered against the corporation. See also Adams v. Wicasset Bank, 1 Maine, 361. § 25 ESSENTIALS OF ACT OF INCOEPOKATION. 33 beneficial results increase in proportion to the exten- sion and inclusive magnitude of systems. The best thought conversant with the science and practice of irrigation, favors governmental supervision and con- trol. Superintendence and direction by the federal .government or even direct state control would hardly be tolerated ; but the management of extensive sys- tems through municipal districts has been tried and results of such experiments have been very satisfactory and full of promise for the future. So far as one may judge from so youthful an enter- prise, inaugurated under recent and novel statutory provisions, these corporations, termed by the courts " quasi public," are to become a fruitful subject for litigation involving the most important and valuable interests. The range of objects and number of persons inter- ested in the corporate enterprise is not the only, if indeed any reason for terming such corporations quasi public. It is because they are empowered by statute to exercise important functions of government.^ 1 Turlock Ir. Dist. v. Williams, 76 Cal. 360, 372; 18 P. 360; Cent. Ir. Dist. V. DeLappe, 79 Cal. 351 .385; 21 P. 825; Supervisors v. Tregea, (1891) 88 Cal. in presis; Crall v. Directors Peso Dist. (1891) 87 Cal., in press; Tide Water Co. V. Coster, 18 N. J. Eq. 521; 90 Am. Dec. 634; Hartwell v. Armstrong, 19 Barb. 166; Lux t. Haggin, 69 Cal. 303; 10 P. 674; Gilmer v. Lime Point. 18 Cal. 252; Cooley on Taxation, 2n(J Ed. 103; Olmstead v. Camp, 33 Conn. 532; 89 Am. Dec. 221; Talbot t. Hudson, 82 Mass. 417; Coomes v. Burt, .39 Mass. 427; Wnrts v. Hoagland, 114 U. S. 606; Head v. Amoskeag Mfg. Co., 113 U. S. 9; 5 S. Ct. 441; Hagar v. Reclamation Dist., Ill U. S. 701; 4 S. Ct. 663; Hager V. Yolo County, 47 Cal. 222; Reclamation Dist. v. Hager, 66 Cal. 54; 4 P. 945; C. W. & Z. R. R. Co. V. Com. Clinton Co., 1 Ohio St. 94; Barbier v. Connelly, 113 U. S. 27; 5 S. Ct. 357; S. & V. R. R. Co. v. Stockton, 41 Cal. 147. Irriga- tion districts are created in Cal. , under act of 1887, Sess. Laws, p. 29, commonly called the "Wright Act," to which important amendments were made in 1889 and in 1891. The most important features of the law are : The jurisdiction of county commissioners to designate boundaries and make the necessary orders for organization; the election of directors and other officers by qualified electors within the prescribed boundaries in similar way to that in which state and county officers are elected, and making returns to supervisors who declare the result and issue commissions ; the vesting of power in the board of directors to 3 34 ESSENTIALS OP ACT OE INCOBPOEAtIOII. § 2f5 § 26. Reclamation and drainage districts — The analogy between reclamation and irrigation districts, as regards their functional character and relation to the state is very close, both being regarded as quasi public. The purpose of the one is to make large bodies of land fit foi* cultivation by removing the excess of water, and* of the other to accomplish the same object by distrib- uting water over the land. Their general powers are similar in many respects and they are organized upon the same plan.^ change the boxmdaries so as to include other lands upon petition of the owners; thereof and approval by vote of the landowners within the existing district ; the power to tax for the corporate purposes, to incur indebtedness and issue cor- porate bonds to represent the same, and to appropriate public and private prop- erty upon making comprensation. The constitutionality of the act was strongly contested in a case which arose soon after its approval, and the act was declared constitutional. Turlock Ir. Dist. v. Williams, 76 Cal. 360, 372; followed in Cent. Ir. Dist. v. DeLappe, 79 Cal. 351, 365; Supervisors, etc., v. Tregea (1891) 88 Cal. in press, and in Crall v. Directors Poso Ir. Dist. (1891) 87 Cal. in press. 1 Cent. Ir. Dist. v. DeLappe, 79 Cal. 351, 365; 21 P. 825. See also Dean V. Davis, 51 Cal. 410; Peofile v. Eec. Dist. 53 Cal. 318; People v. Williams, 56 Cal. 647; Hope v. Perdue, 62-Cal., 546; People v. La Rue, 67 Cal., 528; 8 P. 84. The charge imposed for the purpose of paying the bonds is strictly an assess- ment for local improvements and not a general tax; consequently the methods adopted for enforcing the assessment need not conform to the requirements Of the Constitution in reference to general taxation. Dillon on Munic. Corp. 752; Desty on Tax., 151-171; Cooley on Taxation, 639; Goodrich v. W. & D. T. Co.^ 26 Id. 119; Creighton v. Scott, 14 Ohio St. 438; Seattle v. Tesler, 1 Wash. 571; Dailey v. Swope, 47 Miss. 367; Mason v. Spencer, 35 Kan. 512; McGehee v. Mathis, 21 Ark. 40; Emery v. S. F. Gas Co., 28 Cal. 346; Burnett v. Sacra- mento, 12 Cal. 76 ; 73 Am. Dec. 518. The legislature has constitutional authority to commit the power to levy the assessment to a special board. Hager v. Rec- lamation Dist. Ko. 108, 111 U. S. 701. It is not necessary that the local im- provement for which the assessment is levied should be confined within the dis- trict taxed. Pattison v. Yolo County, 13 Cal. 189. The legislature fias power to determine all questions of policy involved in the formation of an irrigation district and may delegate such power to boards of supervisors or other subordi- nate bodies. Pearson v. Zable, 78 Ky. 170; Cooley on Tax. 150; Kelsey v. Trustee of Kevada, 18 Cal. 6-30; Desty on Tax. 1247; Hager v. Reclamation Dist. Xo. 108, 111 IT. S. 701; Abbott v. Dodge, 18 Neb. 1240. The mode pro- vided by the Cal. Act of 1887, Sess. Laws, p. 29, as subsequently amended for the levy and collection of the assessment is not a denial of due process of law. Davidson v. New Orleans, 96 U. S. 97; Hager v. Tolo County, 47 Cal. 222; Bur- roughs on Taxation, sec. 145; Hager v. Reclamation Dist. No. 108, 111 TJ. S. 708. § 27, 28 ESSENTIALS OiF ACT OP INCOEPOEAi'iON. 35 § 27. PriTate irrigation corporations. — In addition to the comparatively few irrigation districts formeid under the recent California law, there are, in that state, and in others, and in one or two territorities, many jjfivate corp6rations formed under general incorporation laws carrying on the business of supplying water fdr irriga- tibii pui'poses both to rural and urban populations to an important extent. The litigation cbucerning these, has devfeloped but few principles of corporation Iflw not applicable alike to them and other private corpo- rations, and need not be here fur'ther noticed. Many such cases are incidentally cited in divers connections thi^bughbut this work. § 28. Powers of Congress and State Legislatures to create corporations. — Although the constitution is silent on the question of the power of Congress to grant charters to corporations, the power is exercised as incidental to the carrying out of those powers expressly con- ferred. The determination of the right of Congress to grant a charter in any given case, turns upon the question whiether it is an appropriate means of accomplishing the object contemplated, and whether the object itself is constitutional. If bbth these tests are affirmatively detferrnined, coarts have never presumed to inquire info the expediency or necessity for adopting that method of accomplishing its object. Since the con- stitutionality of acts of Congress creating corporations was established in the case of McCullough v. Maryland,^ Congress has often exercised this power as a means of executing public enterprises of great importance. The Pacific Railroad Companies and the National Banks are familiar instances.^ 14 Wheat ."JHi. ^ For a learned discussion of this once great constitutioiial issue, see the reply of Alexander Hamilton , when Secretary of the Treasui-y, to the' Secretary of 36 ESSENTIALS OP ACT OF INCOEPOKATION. § 29 § 29. Gonstitntional limitations. — Constitutional pro- hibitions of the creation of corporations by special acts of the legislature and limitations of the exercise of that process to general enactments, owe their origin partly to abuses of the power to incorporate by special act, and to the opportunities it aflForded for favoritism and corruption, and partly to the convenience and justice of uniform provisions affecting all impartially and avail- able at all times. No resort to indirect means or sub- terfuges designed or calculated to create a corporation or confer corporate privileges other than or additional, to those provided for in the general law are allowed to prevail.! The constitutional provisions on the subject in the different states vary but little, but in some the exception is broader than in others. In Maryland ^ private corporations may be created by special act when no general law exists for the creation of corporations of the same general character as that proposed in the special act.^ A legislative recognition of the existence of a body state and Att. -General. 1 Hamilton's Works, 111, and Message of President Madi- son Dec, 1S15. The state Legislatures have so long and of ten exercised the right to grant corporate privileges on such obvious grounds that no discussion of the origin or nature of that right is necessary further than to say that it is a part of the sovereign power wliich .they may exercise to any extent on all sub- jects when not prohibited expressly or inferentially by the national or by state onstitutions. The reasoning employed by the courts in justification of the right of Congress to legislate on this subject applies equally to the right of a state government. See the opinion of the Court in McOuUough v. Maryland, supra. 1 Ex. parte Fritz, 9 Iowa, 30; San Francisco v. Spring Valley W. W. Co., 48 Cal. 493, 515; over-ruling California State Tel. Co. v. Alta Tel. Co. 22 Gal. 98. See Southern Pacific E. R. Co. v. Orton, 6 Sawy. 157, 186. 2 Const. Md., Art 3, Sec. 48. ' An act incorporating the Baltimore Trust & Guarantee Company, and authorizing it to accept and execute trusts of every description, to act as guar- dian, executor, receiver, etc., as a safe-deposit company, and to exercise numer- ous other powers, is not void, for the general law (Code Md. art, 23, Sec. 29) providing for the formation of " Savings institutions, trust companies, and guar- anty companies" does not confer the powers granted by the special act. Reed V. Baltimore Trust & Guarantee Co., (Md.) 20 A. 194; Bell v. Mercantile Trust & Deposit Co., Id. 195; Chapter 346, Laws Wis. 1889. § 29 ESSENTIALS OP ACT OF INCOKrOEATION. 37 claiming to be a corporation, but without proper authority ratifying its claim, is clearly unconstitutional and void.^ But the power of congress not being limited in this respect by constitutional provisions may give valid and binding recognition to a corporation whether claim- ing existence under state or national laws or the con- current acts of both sovereignties. 2 1 Oroville, etc., E. K. Co. v. Plumas Co., .37 Cal. 3.54. A similar decision was made where by a special act purchasers under a foreclosure sale of the prop- In-ty of a railroad company were given authority to organize and form a corpo- ration with the same rights and franchises as belonged to the corporation whose property was taken, there being a constitutional provision that '' The General Assembly shall pass no special act conferring corporate powers." Atkinson v. Marietta, etc, E. E. Co., 1.5 Ohio St. 21. - Act Cong., July 27, 1S66, recognized the Southern Pac. E. E. Co., organ- ized under a general law of California, and made it certain grants of land. Pur- suant to Act Cal. Leg., March 1, 1870, authji-;zing aay corporation already formed, or thereafter to be formed, to amend its articles of association, and Act April 4, 1870, in terms authorizing the S. P. R. 11. Co. to file new and amenda- tory articles of association to enable it completely to conform to Act Cong., July 27, 18l)(i, the S. P. R. E. Co. and other railroads, October 11, 1870, filed articles amalgamating and, consolidating themselves into anew corporation, — S. P. E. i!. Co. Act Cong., March 3, 1871, authorized the S. P. R. E. Co. of California (subject to the laws of California) to construct a line of railroad from a point at or near Tehachapa Pass, by way of Los Angeles, to the T. 1'. R. 11. at or near the C. river, with the same rights, grants, and privilcg.'?, and subject to t;i3" same limitations, restrictions, and conditions, as were granted to said S. P. R. R. Co., of California, by Act July 27, 1806. Held, that Congress thereby recog- nized that the S. P. E. E. Co. of California, existing March 0, 1871, under the articles of amalgamation and consolidation of October 11, 1870, was the same .s. P. E. E. Co. to which the grant of July 27, 1836, was made. U:i'a;> 1 Sta'es v. Southern Pac. E. Co., 45 F. 596; Same v. Colton Marble & Lime Co., Id: So ah act providing that any number of resident members of a church "may form such corporation;" that the first nine members signing the articles shall be directors thereof until others are elected ; that certain policy-holders shall be members " of the corporation;" that" its" officers shall make a verified report of " its " doings; that every member of " this organization '' shall notify "the " secretary of cer- tain occurrences; and that any member of " this corporation " may withdraw therefrom, shows a legislative intention to indirectly authorize the organization of one corporation only for the specified purposes, and is therefore in contraven- tion of the amendment (1871) to article 4, Const. Wis. Sec. 31, subd. 7, prohibit- ing " special " or "private " legislation granting corporate "powers " or " priv- ileges," except to cities, and section 32, providing that the purposes of such pro- hibited legislation can only be effected by general laws of uniform operation, and the act is liaconstitutional and void. State v. Cheek, (Wis.) 46 N. W. 163. 38 BSaflfTIAI'S OF ACT OJ" incokpoeation. §§ 30, 31 <■ § 30. Capnot -create by |^me^dment of charter. — Every alteratiQn of a contr,act implies a new contract, and every amendment of a charter, if allowed, grantg a new charter. But there are cases in which additional provisions have been made by the legislature, notwith- standing the constitutional prohibition, and upheld by the courts on the ground that they could not be with propriety called the creation of a corporation.^ At any rate the legislature may, by special act relegate or grant to an existing corporation new privileges, if by so doing its character is not altered, and such act is not open to the objection that it impairs the obligation of contracts by releasing the shareholders.^ § 31. Delegation of power to incorporate, — In England, it is a well established doctrine that Parliament with the consent of the Crown, or the King alone, can dele- gate the power of conferring corporate privileges, though at a former period the right even of the King to grant a license to another to exercise this power was denied. Corporations created by proprietaries of Pennsylvania 1 Colton V. Mississippi Boom Co., 22 Minn. 372; St. Paul Fire, etc., Ins. Co. V. Allis, Minn. Sup. Ct. 1889. An actof the Alabama legislature authorizing a railroad company to change its name and to purchase the railroad and franchises of another company was upheld by the Supreme Court of the United States. Wallace v. Loomis, 97 U. S. 146. ^ Everhart v. Westchester, etc., R. R. Co., 28 Pa. St. 339; Gray v. Mononga- hela Nav. Co., 2 W. & S. 156; Clark v. Monongahela, Nav. Co., 10 Watts, 364; Cross V. Peach JKy, Co. 90 Pa. St. 392; Poughkeepsie, etc., Plajik-road Co. v. Griffin, 24 N. ^. 150; Delaware, etc., R. R. Co. v. Irick, 3 Zabinskie, 321. In Fry Extr. V. Lexington, etc., 11. R. Co., 2 Met. (Ky.) 322, the court said : "If it (the company) should avail itself of such provisions in the amendment as are calculated to aid in tlie accomplishment of the original undertaking, and are entirely consistent therewith, it will have the right to do it. Every stockholder in a railroad company which is organized for the purpose of constructing a rail- road comes under an implied agreement that such amendments may be required to carry the original design into complete effect. The corporation still has the power to execute the primary object of its creation and if it should not attempt to ijse the means of the shareholders for any other purpose, they cannot c)^ipi to be absolved' from their obligation to pay the amount of their subseriptipiis." See also So. Pac. % 6o. v. Orton, 6 Sawy. 157; Att'y.-CJeneral v. ^'1 A. fj^tps. Co., 82 N. T. 172. ■ " ■"■ §§ 32, 33 ESSENTIALS OF ACT OF INCOKPOKATIOK. 89 under delegated authority from tlie Crown of England before the K,eyolution, yrere recognized afterward as valid. Similar powers were also exercised in Maryland under royal sanction, during the provincial government. In these cases the persons to whom these powers were delegated, exercised them as instruments in the hands of the government, under the familiar maxim " quifacit per aliumfacit per se." In but few instances, has such power been exercised in this country under a delegation of authority from a State legislature.^ § 33. Territorial corporations — The authority of ter- ritorial governments in the creation of corporations has always been liberally used but is now regulated and limited by a general statute.^ But when territorial governments before the enactment of a general law on the subject created corporations their legal existence was uniformly recognized as being created under a delegation of power from the Federal government, the right being reserved in Congress to disapprove and revoke any act passed by territorial legislatures.^ § 33. States cannot delegate the authority. — But state governments as now constituted being themselves agents of a still greater sovereignty, the people, from whom, in constitutions, they derive their powers, can- not delegate their trust in the matter of creating corporations any more than in any other species of legislation. " One of the settled maxims of constitu- tional law is that the power conferred upon the legis- lature to make laws cannot be delegated by that de- J In the Case of St. Mary's Church, 7 S. & R. 517, a similar power was dele- gated by the Pennsylvania legislature and its exercise recognized as valid. 2 Sec. 1889, Kev. Stat. U. S. Laws K. Y. 1884, c. 252, sec 14, is not un- constitutional on the ground that it constitutes a delegstMoit of 'legislative power in requiring the consent of roads already pccupying a street, before another street railroad can be built upon such street. In re Thirty-Fourth St- Ky. (Jo., 102N. T. 343; 7N. E. 172. » Riddickv. Amelin 1 Nev. 5; Late Corporation, etc. v. United States, 136 U. S. 1;10S. Ct. 792. 40 ESSENTIALS OF ACT OF INCORPORATION. § 33 partment; to any other body or authority. Where the sovereign power of the state has located the author- ity, there it must remain."i There are several cases which apparently conflict with the principle here de- clared, but it is thought that a thorough examination of them will show the soundness of the above doctrine. City authorities are generally given important control- ling powers over street railways. But the authority so conferred cannot be exercised so as to grant street car companies any new franchises.^ In the case of the New York Elevated Railroad Company,^ an act 1 Cooley's Const. Lim., 116. 2 Mattlage v. IST. Y. El. R. Co.,. 14. Daly 1. Act N: T. 1867, authorizing tlie construction of an elevated street railway in tlie city of New York on Greenwich street and on Ninth Avenue, or streets west of Ninth Avenue, and authorizing the railway company " to rent, purchase, or acquire such huildings or parts of buildings as may be convenient for the stations or depots for public access to the railway," did not empower the company to build stations in or over any streets except those in which it was authorized to lay its tracks. See Canal, etc., St. Ey. Co. v. Crescent City E. Co., 41 La Amer. Sfel ; Taylor v. Bay City St. Ey. Co., 80 Mich. 77; 45 N. W. 335; In re Rochester El. Ey. Co., 57 Hun, 56; 10 N. Y. S. 379; Passenger Ry. Co. v. Easton, 7 Pa. Co. Ct. R^jp. 56Q, 577; Harrisburg City Pass. E. Co. v. Harrisburgh, id. 584, 593; People v. Gilroy (Matter of Third Ave. E. Co.), 56 Hun, 537; 9 N. Y. S. 833. 8 70 N. Y., 327, 343. Under Laws N. Y. 1884, c. 2o2, § 3, requiring a street railway company incorporated under that act, before constructing its railroad, to obtain the consent in writing of the owners of one-half in value of the prop- erty bounded on, and of the local authorities having control of, that portion of a street on which it Is proposed to construct such railroad, a petition by such a company, for the appointment of commissioners to determine the points of crossing of its railroad over another, must contain an allegation that such con- sents have been obtained; notwithstanding section 1 of the act confers on such companies all powers granted by the general railroad act, and that act does not require such consents to be obtained. Distinguishing In re Lockport & B. R. Co., 77 N. Y. 558; In re Saratoga Electric E. Co., 12 N. Y. S. 318. The charter of the Brooklyn Elevated Eailway Company (Laws N. Y. 1874, c. 585) required that iron columns should be placed on each side of the streets, etc., "on a line with the curbstone," their location to be subject to the approval of the city engineer; and that iron girders, not more than 36 feet in length, should be placed " across" the streets, and be properly attached to the top of said columns. An amendatory act (Laws N. Y. 1875, c. 422) required that iron colupans should be placed on each side of the streets, " as near as practicable on a line parallel with the curbstone," subject to the approval of the city engineer,, and that iron girders should be placed " above" the streets, and be properly at- § B3 ESSENTIALS OF ACT OF INCOliPORATIOX. 41 providing for the incorporation of underground rail- roads had conferred the power on certain commissioners to determine the necessity for such railroads, fix the routes upon which they should be located, and to prescribe the plans for their construction. It was held that notwithstanding the fact that a determination of these matters was left to commissioners, the act rested upon the legislative will, and in no way depended: for its validity upon the action of the commissioners, and that corporations organized under the act derived their franchises from the legislature and in no proper sense from the commissioners. The same may be said of all officers clothed by statute with the per- formance of ministerial duties during the process of perfecting corporate organization under specific grants or under general laws. They are merely instru- ments for executing the legislative will, and upon this view all the cases on this subject may be harmonized to the effect that the maxim delegata potestas non potest delegari applies alike to the power of legislatures to create corporations and to cases involving special fit- ness of a trustee or agent.^ tached to said columns. The road, as constructed, had its line of columns in the street, there being a space of eight feet eight inches between the curb and the foundation, and eight feet four inches between the foundation of the two lines of columns. Held, that the location was such as the act of 1875 authorized the company to adopt, and, having been approved by the city engineer, was lawful.. Affirming 11 X. Y. S. 161. In re Brooklyn El. Ey. Co. (X. Y.), 26 N. E. 474. For construction of acts requiring consent of municipal authorities as condition precedent to the laying out and the construction of street railways, see People t. Bernard, 48 Hun, 57. 1 In Heiskell v. Chicasaw Lodges, 87 Tenn. 068, an act of the Tennessee- legislature had authorized the Grand Lodge I. O. O. F. to establish subordinate lodges and provided that such lodges might hold title to property. The act was held not to delegate power to create corporations and that such lodges did not become corporations. But in the same state branch banks established by parent banks under acts of the General Assembly were recognized by the courts as cor- porations. McNeil V. Wyatt, 3 Humph, 127; Bank of Tenn. v. Burke, 1 Coldw. 62.5. The power committed to the courts of Georgia to grant corporate powers to private companies is not judicial but legislative. Gaslight Co. v. West, 78- Ga. 318. 42 ESSENTIALS OF ACT OF INCORPOKATION. § B4 § 34:- Incorjipration under genie^ral lawj^. — Nearly every state in the Union now provides for the fgrmation of •corporations under general law. The right to e^siact general laws on the subject is often given the legislature even where the power to grant special charters is also given in state constitutions. In all these states, a compliance with such general provisions by signing, ac- knowledging, and filing articles of association or incpr- poration and performing other prescribed acts con- stitutes the incorporators a body corporate.^ These laws extend the right to incorporate to all persons who accept their provisions and comply with their conditions, and no further acceptance by the members or recognition by the state is necessary. A corporation is not created by merely signing and ac- knowledging articles of incorporation. It is necessary that the subscribers acknowledge the same in due form, and cause the certificate of incorporation to be recorded. A preliminary organization ' usually precedes the filing of articles, and this dispenses with the necessity of for- mal acceptance by the incorporators, and the certificate of the Secretary of State, or other officer, furnishes ample evidence of the sovereign recognition of corporate exist- ence. The articles and the certificate correspond with and take the place of charters granted by special act 1 Indianapolis F. & M. Co. v. Herkimer, 46 Ind. 142. The directors named tlierein for the first year incur no liability as such prior to the filing of the char- ter, St. L. Ft. S. & W. K. Co. V. Tiernan, 37 Kan. 606; 15 P. 544. As to liabil- ity of subscriber for special stock as partner In case of failure to file the articles with proper ofBcer see Granby M. & S. Co. v. Eichards, 95 Mo. 106; 8 S. W. 246, holding that no such liability is incurred and that advantage of such omissjion can be taken only by the state. A failure to acknowledge the articles is a fatal defect and does not estop one of the incorporators though the certificate pf the Secretary of State recites that the articles were duly acknowledged. I)oy^e v. Mizner, 42 Mich. 332. It is not necessary tha,t the acknoyrledgment of articles -of incorporation should show that the persons accepting ;vvere personally knaym to tli^ acknowledging QfiHcer to \)e the persons who executed the articles. jP^pIe T. Cheesmani 7Colo. 376; 3 P. 716. § 35 ESSENTIALS OF ACT OF INCORPORATION. 4S and formally accepted by the members.^ Taken to- gether they may without any violation of propriety be designated as the charter. The construction of articles of incorporation executed under general laws is within the exclusive province of the courts, and the same general rules of interpretation apply to them as to other written instruments.2 § 35. What the Articles should contain — The statements which the articles must contain are usually prescribed by the gerteral law as well as are the duties of state and county officers upon the filing of articles-^ ' It may be generally stated that all the statutory require- ments in regard to what the articles must contain and other acts to set the institution on its feet as a corpora- tion, must be substantially complied with, and an entire 1 S. V. W. W. V. S. F. 22 Cal. 434. The grant of a charter by legislative act to persons named as incorporators dpes not of itself create a corporate body. It must be shown either by the act itself or by other proof that the corporators applied for the charter or afterwards accepted it, and an acceptance must be shown to have taken place within the state granting the charter. Smith \. Silver Talley Min. Co., 64 Md. 85; 20 A. 1032. 2 BxPLAN ATioN OF TjBBMS. The word charter is often used in this treatise indiscriminately to describe special acts of incorporation and articles of incorpo- ration under general law. The word director is used to denote a member of the managing board of a corporation whether such board is designated in the char- ter by that title or by that of trustee, curator or otherwise. So the word stock- holder, shareholder and member are often employed interchangeably. Likewise the words constating instruments wlien used are to be understood to include not only the charter or articles of incorporation but such constitution, by-laws and rules and regulations of a permanent character, as the members of the corpo- ration may have adopted. 3 The statements required by the California statute. Civ. Code, Sec. 290, which may be taken as a fair illustration are as follows : — 1. The name of the incorporjition; 2. The purpose for which it is formed; 3. The place where its principal business is to be transacted ; 4. The term for which it is to exist not exceeding fifty years ; 5. The number of its directors or trustees which shall not be less than live nor more than eleven and the names and residences of those who are appointed for the first year; 6. The amount of its capital stock, and the number of shares into which it is divided; 7. If there is capital stoclc the amount actually subscribed and by v^hom. In addition to these other statements are often required to be contained in articles incorporating certain classes ^f cor- porations. These generally rejlate to the adv^^ce payment of a c§rtg,in ijerceat- age of the c^Jfital stock, estc. 44 ESSENTIALS OP ACT OF INCOEPOKATION. § 36 omission of any of them will be fatal to the legal existence of the organization as a corporation, when attacked on quo warranto or whatever method of sovereign attack is provided in a given state.' But where the steps taken to organize a corporation have been ineffective to give •it corporate capacity, an act of the legislature, authoriz- ing reincorporation of " any existing corporation, asso- ciation or society * * * incorporated under the laws of this state " was held to authorize reincorporation of such defective organization.^ , § 36, Reorganization, reincorporation and amendment of Articles. — In most states where corporations may be formed under general laws, are found in addition provi- sions for reorganizing corporations which have from any cause abandoned the enterprises to prosecute which they were originally formed, or where their terms of existence have expired, and in others authority for doing so may be given by special act.^ The same re- sult is accomplished where power is given to re-incor- po]*ate, or, which is the equivalent, thereto filing amended articles. Amended articles must be executed with the same formalities and are subject to the same construc- tion and tests as to their validity as original articles. 1 People V. Self ridge, 52 Cal. 331; Mokelumne Hill Mfg. Co. v. Woodbury, 14 Cal. 424; Harris v. McGregor, 29 Id. 124; Bigelovv v. Gregory, 73 111. 197. See also, Mclntire v. Mcljain Ditching Co., 40 Ind. 104; Hunt v. Salisbury, 5.5 Mo. 310; Indianapolis Furnace Co. v. Herkimer, 46 Ind. 142; Reed v. Richmond St. R. R. Co., 50 Ind. 342; Field & Co. v. Cooks, 16 La. Ann. 153; Utley v. Union Tool Co., 11 Gray, 139; Doyle v. Mizner, 42 Mich. 332; 3 N. W. 968; Rich- mond Factory V. Alexander, 61 Me. 3-51; Abbot v. Omaha, Smelting Co. 4 Neb. 416; Unity Ins. Co. v. Crane, 43 N. H. 641; Harrod v. Hamer, 32 Wis. 162. 2 State V. Steele, (Minn.) 34 N". W. OOl. 8 An act providing for an extension of terms of existence of corporations beyond the term originally limited by their charters is not unconstitutional where corporations can only be created under general laws although the provi- sions of such act extend only to a specified class of corporations. Seneca Min. Co. V. Secretary of State (Mich.), 47 N. W. 25. Where a town company was created by special'act of the territorial legislature of Kansas which took effect in 1857, and which contained no provision as to the period during which the company § 37 ESSENTIALS OF ACT OP INCORPORATION. 45 However brought into being, the new institution is dis- tinct from the original and possesses only'such powers as are conferred by the new proceeding, in connection with the general laws, governing the class into which it falls.^ If the reorganization or reincorporation proceed under a special act conferring additional powers to those enjoyed by its predecessor, it takes the same subject to the same construction as in the case of the creation of any other corporation by special charter.^ § 37. Stricter compliance with general law required than w^ith provisons of special charter. — Where a general law was to exist, its existence was limited to 10 years, by the general corporation law, (Laws Kan. 185.5, P. ISo,) and a deed made by it thereafter is void, and not admissible as evidence of title in the grantee therein. Marysville Investment Co. V. Munson, (Kan.) 24 P. 977. Where a statute provides that a corporation shall not exist to exceed 20 years but the articles of incorpora jon provide for an existence of fifty years they are valid for 20 years' existence, People v. Chees- man, 7 Col. 376; 3 P. 716. Section 1041, Code Miss, provides that all corpora- tions, after their charters have expired or been annulled, shall nevertheless be -continued bodies corporate for three years thereafter for the purpose of suing and being sued and closing up their business. It was held that, where 'a rail- road company's franchise was sold with the rest of the property on a decree of foreclosure, and the purchasers organized a new corporation under an act of the legislature, the old corporation ceased to exist at the end of three years there- •after. Ford v. Delta & Pine Land Co., 43 F. 181. And in another case it was held that an ordinance granting to a gas company, its successors, and assigns, the right of supplying gas to the city and to private consumers for a stated period, is not void because the time extends beyond the limit of the company's chartered existence, the ordinance providing that it might transfer all of its rights, privi- leges, property, and franchises conferred by the ordinance to any organized gas •company of the state, which should within 20 days after the transfer file its written acceptance of the ordinance and give bond to perform all the agreements required of the original company. Barclay, J., dissenting; State v. Laclede Gas-Light Co., (Mo.) 14 S. W. 974. 1 Day V. Mill Owners West P. Ins. Co., 75 la. 694; 38 N. W. 113. See Att'y- Gen. V. Perkins, 73 Mich. 303; 41 N. W. 426, holding also that an act extending period of corporate existence, is not in conflict with constitutional provision that private corporations shall not be created by special act. See also Dester v. Koss .(Mich.), 48N. W. 530. 2 People V. Cook, 110 N. Y. 483; 18 N. E. 113; State v. Butler, 2 Pick. (Tenn.) 614; 8 S. W. 586. But where before the expiration of period for which a national bank was chartered, its term of existence was extended by act of Con- gress, it was held that the identity of the old corporation was in no wise? affected, and that it simply had a new lease of life. Nat. Exch. Bk. v. Gay, 5T 'Conn. 224; 17 A. 555. See also Day v. Ins. Co., 75 la. 694; 38 N. W. 113. 46 ESSENTIALS 6F act Oi* INCOEPOEATION. § St provides tliat persons may become a Bbdy politic and eoi'pbrate upon complying ifiih. the provisions of tlie law sueli a^ tliat before any such corporation shall com- meriee business its articles of associiation shall be piibli^hed in a certain way, and a certificate of the pur- poses of the organization shall be filed in certain public offices, the performance of these acts is a necessary prerequisite to corporate existence. Iii this respect there is a maiiifest difference as to the efffect of irregu- larities and omissions of the requirements of the law in the organization of corporations, between those created by special charter, where there have been acts of user, and the case of individuals seeking to form theniselves into a corporation under a general law. In the latter case, it is only in pursuance of the provi- sions of the statute for siich purposes, that corporate existence can be acquired, and a stricter compliance with the statutory provisions is necessary in order to shield such individuals from personal liability.' The articles should by apt reference or clear purport, show in what class of corporations provided for in the general law they seek corporate authority, setting forth explicitly the objects to be accomplished, and pointing out the manner of accomplishing them.^ 1 Sometimes a reorganizing law defines the powers of the new corpora- tion to be such as were exercised by that which it succeeds. See Gas L. Co. t. Green, 46 N. J. Eq. 118. Protesting stockholders will not be bound by any arrangements affecting the interests in the corporate property unless there is legal authority for such reorganization and strict compliance therewith. Duten- hoffer V. Adirondack, etc., R. Co., 14 N. T. S. 558. 2 The charter of a private corporation is not void where the petition for a charter states the name and by it the purposes and objects of the association, and shows In connection with the order granting it that the charter was suffi- cient. "Van Pelt v. Home Building & Loan Ass'n, 79 Ga. .S49; 4 S. E. 501. For construction of articles filed under Territorial law in connection with statute U. S. Sec. 1889, see Carver Mercantile Co. v. Hulme, 7 Mont. 566; 19 P. 21.3. Under the provisions of a law requiring the certificate to state the manner of carrying on the business of the association, a statement merely that the manner of carrying on the business shall be such as the association may from time to time prescribe by rules and regulations was adjudged insufficient. State v. Cen- tral Ohio Relief Ass'n, 39 Ohio St. 899. A certificate of incorporation which § 38 essentiaijS of act of incokpokatiok. 4T But a strict compliance in matters of detail is riot essential and the proceeding will not be held invalid for slight desfeets or omissions.^ § $8. Snchgenerallaw, the measure of authority. — Under general laws providing for what purposes corporations may be formed, no persons by merely going through the formality of filing articles of incorporation, acquire any corporate powers not authorized by such general provides that the corporate affairs shall be controlled by its president, vice pres- ident and attorney instead of providing for a board of directors or tmstees, held insufficient to create a corporation dejure. Bates v. Wilson (Colo.), 24 P. 99. 1 S. V. Water Works v. San Fraticisco, 22 Cal. 434; Ex parte S. V. W. W., 17 Id. 132; People v. Stockton, etc., R. li. Co., 45 Id. 306; Eastern Plank Road' Co. V. Vaughan, 14 N. Y. 543; lioman Catholic Orphan Asylum v. Abrams, 49 Cal. 455; Eakright v. Logansport R. Co., 13 Ind. 404; Wallworth v. Bracket t, 08 Mass. 90; Rogers v. Danvers, etc.. Society, 19 Vt. 187; Walton v. Riley, S5 Ky. 413; 3 S. W. 605. Where the certificate stated that San Francisco was the place of business instead of "the principal place of business" it was held not sufficient variance f roih the requirement of the sta,tute to render the proceedings- void; Ex parte Spr. V. W. W., 17 Cal. 132. Where a statute atithorized all " moral, beneficial, litei;ary; or scientific associations by such methods as their rules or regulations may direct to appoint or elect any number not less than three nor more than nine trustees to take charge of the estate property belong- ing thereto," etc., and that " upon the appointinent or election of such trustees or directors, a certificate of such appointment shall be executed by the person or persons ihaking the appointment, or the judges holding the election, stating the names of the trustees or directors; the name by which said trustees shall there- after forever be called and known shall be particularly mentioned and specified, etc.," it was held the statute did not require the rules and regulations adopted by the society to be set forth in the certificate. Roman Catholic Orphan' Asylum V. Abrams, 49 Cal. 455. As to different, requirements for. benevolent, social, etc., associations and manufacturing corporations and construction of same, see Edgarton Tobacco Mfg. Co. v. Croft, 69 Wis. 256; .^4 N. W. 143. Where statute requires articles to be signe'd by nine persons, signatures of less number not sufficient. State V. Critchett, 37 Minn. 13; 32 N. W. 787. Under statute requh^ng articles to be recorded fiUng for record in proper office sufficient. Heald V. Owen, 79 Iowa, 23; 44 N. W. 210; Walton v. Riley, 85 Ky. 413; compare Chtlds V. Hurd, 32 W. Va. 66; 9 S. E. 362. Same ruling with respect to failure to file a' certified copy of certificate, Vanneman v. Toung, (N. J.) 20 A. 53; In re Shakopee I. & B. Works v. Cole, 37 Minn. 91 ; 33 jST. W. 319; Portland & C. Tp. Co. V. Bobb, (Ky.) 10 S. W. 794; Granby Min. & Smelting Co. v. Richards, 95 Mo. 106; 8 S. W. 246; contra, Ricker v. Larkin, 27 111. App. 625. Failure of probate judge to certify on the "completion of organization" that corporators are organized under the law and are authorized to do business does not invaHdate. Sparkis v. Woodstock Iron & Steel Co., 87 Ala. 294; 6 So. 195. 48. ESSENTIALS OF ACT OP INCORF'OEATIOX. i ! § 38 laws.^ And if in their articles they assume to derive the right to engage in the prosecution of business or the accomplishment of purposes not warranted in such general law, the state officer, whose duty it is to receive and place on file articles of incorporation and issue a certificate, may refuse to give recognition to the same ; nor can he be compelled to do so by writ of manda- mus."^ 1 state V. Atehison & N. E. Co. (>reb.), OS N. W. 43. See also Smith v. Berndt, 1 K. Y. S. 108; Wood v.. Odessa W. W. Co., 42 CU. Div. 636., But a foreign corporation need not show authority in its charter to hold land in the state where it does business, suoli right being determined by the laws of the latter. Tarpey v. Deseret Salt Co. (Utah), 17 P. 631 ; nor does tlie fact that an alien owns stock in a corporation which has acquired title to real estate dis- turb its title. Princeton Min. Co. v. First National Bank, 7 Mont. 5.30 ; 19 P. 210. A statute giving power to borrow money to the extent of one half par value of capital stock means the par value of the paid up capital only and not half of the authorized capital. Appeal of Lehigh Ave. Ry. Co. (Pa.), 24 N. E." 530. The development of natm-al gas is an object for which corporations may be organized under statute authorizing their formation to engage in "any work or works public or private which may tend or be designed to improve, increase, facilitate or develop trade." Carothersv. Phila. Co., 118 Pa. St. 468; 12 A. 314. Under the New Jersey act to authorize the formation of railroad corporations and regulate the same, approved' April 2, 1873, (Revision, 925,) and its supple- ments, a railroad less than a mile in length may be built, and an independent company may be organized to build a railroad which will connect two existing railroads. National Docks & N. J. J. C. Ry. Co. v. State, (N. J.) 21 A. 570. For construction of articles purporting to convey corporate authority under vari- ous statutes, see Appeal of Scranton Elec. Light & Heat Co., 122 Pa. 154; 15 A. 446; Nat. Bank v. Tex. Ins. Co., 74 Tex. 421; 12 S. W. 101; Brown v. Corbin, 40 Minn. 508; 42 N. W. 481; State v. Minn. T. Mfg. Co., 40 Minn. 213; 41 N. W. 1020; In re N. Fifth St. Mut. L. Ass'n, 8 Pa. Co. Ct. Rep. 17. For valuable review of the N. T. Mfg. Corp. Act 1848, and Business Corp. Act 1875, as amended extended and modified to Apr., 1890, see 7 Ey. & Corp. L. Jour. 480. Decisions on such corporations collected 27 American and English Corp. Cas. 307 n. " Isle Royale Land Corp. v. Sec. of State, (Mich.) 26 Am. & Eng. Corp. Cas. 84, holding that a corporation formed for "buying and selling and dealing in real estate, live stock, bonds, securities and other properties of all kinds on its own ac- count and for commissions " may be incorporated under a statute which provides that a corporation may be created for the purposes therein enumerated and "for any other purpose intended for mutual profit or benefit not otherwise specially provided for" and consistent with the constitution and laws of the state. Nat. Bank \. Texas Investment Co., (TeX.) 12 S. W. E. 101. See also Brown v. Cor- bin, 40 Minn. 508. If the incorporation be lawful under one statute it will be lawful though another statute be referred to in the articles. State v. Minn., etc. Co., 40 Minn. 213. A stock association may be incorporated under the Texas statute for the purposes of giving mutual protection to its members against theft ^ ' ■ / ' ^ 39 ESSENTIALS OP ACT OF INCOEPOEATIOlM. 49 § 39, Performance of conditions precedent. — The per- formance of prescribed acts are often made conditions precedent to the transaction of business by certain classes of corporations. The classes upon which these conditions are imposed are usually such as do business of a public nature, and which both in the sale of the stock and the transaction of business after incorpora- tion, invite the confidence of many persons who have no means of knowing or ascertaining the extent pf their trustworthiness. It is apparent that if in any such case a corporate J existence prior to a compliance with the preliminary V requirements to the extent of legalizing any business 5, transaction could be successfully claimed it would defeat entirely the intent and object of the law. There- fore it is well settled that all conditions precedent imposed by the express terms of the law, must be com- plied with, before the assumption of corporate func- tions.^ and ferreting out crime. G-uadaloupe & S. A. K. Stock Ass'n v. West, 70 Tex. 591; 7 S. W. 817. It was held that the General Kailroad Act of New York of 1850, and its amendatory and supplementary acts, do not authorize a company -organized thereunder to build an elevated railway through the streets of a city. Following Rapid Transit Co. v. Dash, 26 N. E. 25; Schaper v. Brooklyn & L. I. Ey. Co., (N. T.) 26 N. E. 311. 1 An act provided that the capital stock of a banking company should be $50,000 that no Increase of such stock should be made unless the amount thereof should be paid in ; and that before the corporation began business the stock- Tiolders should pay in full the several amounts subscribed ; and that the act should become void unless the corporation should organize and proceed to busi- ness within twoyears. It was held that a failure to subscribe and pay in $50,- 000 in two years forfeited the charter. People v. Nat. Sav. Bank, 129 111. 618; 22 N. E. Rep. 2S8. Under the Alabama statute construed in connection with the state constitution, it was held no essential that the written declaration of the incorporators should provide that the unpaid portion of the capital be secured to be paid in fixed installments. Rolling v. Le Grand, 87 Ala. 482; 6 So. 332. Obtaining subscriptions for all the capital stock held not a prerequisite to the right to begin business under Kansas general laws. Chicago K. & W. R. Co. v. ■Commrs., 36 Kan. 121; 12 P. 593. See also Johnson v. Kessler, 76 la. 411; 41 N. W. 57; Earnest v. W. W. Co., 39 La. Am. 550; 2 So. 415; State v. R. R Co., 24 Neb. 143; Appeal of Scranton Electric L. & H. Co., 122 Pa. St. 154; 15 A. 446; State v. Canal Co., 40 Kan. 96; 19 P. 349; N. Y. Cable Co. v. New York, 104 N. Y. 1 ; 10 N. E. 332, where the condition precedent was obtaining 4 50 ESSENTIALS OF ACT OF INCOEPOEATION. §§ 40, 41 § 40. No common law conditions — But there are no eottimon law conditions other than a complete organiza- tion by the preliminary meeting and election of officers. It was held that a railroad company was authorized to begin business before any of its capital stock was subscribed, where there was no requirement on the subject in its charter.' § 41. Conditions precedent and subsequent requirements distinguished. — A distinction must be kept in view be- tween coiiditions which must be complied with before assuming to act as a corporation, and those which con- stitute merely a prerequisite to the right to transact business as a corporation, after it has been formed. In the first case thqre is no corporate body in exist- ence which the law recognizes until by a compliance with the statute the organization is complete. In the second case though there is a corporate body complete in its organization, yet it has no authority of law to exercise its function as such until it has acquired it by virtue of compliance with the conditions of law.^ But it seems that the mere filing of a copy of the articles with another officer after the original has been properly filed with its proper custodian is not a condition pre- consent of property owners for construction of the road. Elizabeth G-as L. Co. V. Green, 46 N. J. Eq. 118, holding only the state can object to failure to pay preliminary capital stock required by law. 1 Johnson v. Kessler, 76 la. 411. See also Earnest v. Water Works Co., 39 La. Ann. 550; State v. Eailroad Co., 24 Neb. 143; Appeal of Scranton Electric Light and Heat Co., 122 Pa. St. 154; State v. Canal Co., 40 Kan. 96. Where a proportion of the capital stock is required to be subscribed before commencing, business, it is no legal objection that certificates for the same were not issued. State V. Butler, 2 Pick. (Tenn.) 614; 8 S. W, 586. A charter of a turnpike company which authorized an organization when "$200 to any one mile" are subscribed, is substantially complied with by a subscription of $200 without designating any particular mile of road to which it shall be applied. Fitch v. Popular Flat L E. & S. L. Tp. Co. (Ky.), 13 S. W. 791. 2 Where the statute required that before a corporation can do any business, it shall record in a certain county the certificate of its incorporation, this was lield to be a condition precedent to corporate existence. Childs v. Hurd, 32 W.. Va. fi6; 9S. E. .362. § 42 ESSENTIALS OF ACT OP INCORPORATION. 51 cedent to corporate existence, but merely a condition precedent to the right to transact business.' § 42. Conditions precedent prescribed on grounds of public policy. — The case is different where from reasons of public policy, or for the better protection and security of persons dealing with them, prescribed acts are re- quired by statute to be performed by companies pro- posing to do business of a public character. For instance, insurance companies are often required to provide guarantee funds and furnish a certificate of capital stock ; and railroad companies to obtain a per- centage of the subscribed capital stock in cash, before doing business as a corporation. These may be con- sidered corporations in a certain sense, before compli- ance with the requirements, but they are not insurance corporations in the one nor railroad corporations in the other case, with legal capacity to do business as such until the prescribed acts are performed.'^ 1 Harrod v. Hamer, 32 Wis. 162. A corporation was held to be organized under the law and authorized to do business where it had taken all proper steps required by statute, although the prol>ate judge who had been requested so to do, had not issued the certificate of incorporation required by the statute. Sparks v. Woodstock Iron & Steel Co., 87 Ala. 294; and a similar view was taken where after original articles had been filed with the county clerk, a copy had not, as required by statute, been filed with the Secretary of State, within three months. Portland & G. Turnpike Co. v. Bobb, (Ky.) 10 S. W. 79-t. See also Guadaloupe :TIAiS OE ACT OF INCOEPOEATION. 53 business imposed by law. In such cases the state alone can object in a proceeding instituted for that purpose.^ § 44, Evidence of incorporation — The law of evidence is a sufficient guide to the means of proving corporate existence, which is established like other facts when such proof is required. The charter must be pro- duced as the best evidence or its absence accounted for, in order to admit secondary evidence of its exist- ence and contents.^ But while, as we have seen, there can be no corporate existence as against the 1 In Mokelumne Hill Mining Co. v. Woodbury, 14 Cal. 424, the certificate had been filed in conformity with the requirements of the act with the county clerk of the proper county, but no duplicate had been filed in the office of the Secretary of State. The company had been doing business as a corporation for several years. The court, per Cope, J., said :— " There is a broad and obvious dis- tinction between such acts as are declared to be necessary steps in the process of incorporation, and such as are required of the individuals seeking to become incorporated, but which are not made prerequisites to the assumption of corpo- rate powers. In respect to the former, any material omission will be fatal to the existence of the corporation, and may be taken advantage of, collaterally, in any form in which the fact of incorporation can properly be called in ques- tion. In respect to the latter, the corporation is responsible only to the govern- ment, and in a direct proceeding to forfeit its charter." See also Humphrey's v. Mooney, 5 Cal. 283; Hyde v. Doe, 4 Sawy.'133; Cross v. Pinckneyville Mill Co., 17 111. 54; contra, Indianapolis Furnace, etc., Co. v. Herkimer, 46 Ind. 142. ■^ Where the certificate of incorporation, and the record thereof, are de- stroyed by fire; parol proof is admissible to show compliance with the law in the organization of the company and to prove the contents of the certificate; and it is not necessary that such evidence should be so minute as to permit of the reproduction of the certificate in all its details. It is sufficient if it is so full as to show that the law was complied with. Bose Hill & E. R. Co. v. People, 11.5111. 133; 3N. E. 725. In a verified petition by a railroad corporation to condemn lands, the corpo- rate existence of the petitioners is sufficiently established by an allegation to that effect, and the burden of proof is on him who assails it to show its non- existence. In re New York, L. & W. E. Co., 99 N. Y. 12; 1 N. E. 27. In an action on contract to recover the price of certain shares of stock in the M. Co. sold to the defendant, the fact that the defendant signed a memorandum setting forth that he had bought a certain number of shares in the M. Co. is an admission by him that there was an M. Co. that issued what were called by the parties shares of stock which the defendant bought. And, in the absence of evi- dence that the certificates offered by the plaintiff were not genuine, or were what were generally known and called shares of stock in the M. Co., or were not what was intended by the parties, the defendant is liable for the purchase money. Mann v. Williams, 143 Mass. 394; 9 N. E. 807. 64 ESSENTIALS OP ACT OF INCOKPOKATION. § 44 State without proof of a charter in existence, or of facts from which the court will presume one to have existed at a previous period, yet in most cases, the question of rightful existence is only incidental to the main issue ; and in all such cases slight evidence only of corporate existence will be sufficient. In a suit between members of the same corporation, affecting corporate interests, the mere naming of the corpora- tion as a party dispenses with all further proof on that point.^ So where any person sues on claims founded ' on dealings with a corporation as such, he is estopped, except where such estoppel would operate fraudulent- ly,* from denying that the corporation exists or had capacity to have such dealings as far as concerns those particular transactions.^ In other words evidence 1 Fresno Canal & Ir. Co. v. Warner, 72 Cal. 379; 14 P. 37. Where it is shown that there is a charter or a law under wiiich a corporation with the powers assumed might lawfully be incorporated, and a colorable compliance therewith, as well as a user of the rights claimed tliereunder, the existence of a corporation de facto is established. Stout v. Zulick, 48 N. .T. L. 599; 7 A. 362. Acts incorporating held sufficient without producing charter, Com. v. Carrall, 145 Mass. 403; 14 N. E. 618; so production of articles without showing acts of in- corporation. Tarpeyv. Desert Salt Go. (Utah), 17 P. 631; Bolbear v. Am. Bell Telephone Co. , 8 S. Ct. 778 : proof of recognition in community where business was carried on and acting as a corporation. Lakeside Ditch Co. v. Crane, 80 Cal. 181; 22 P. 76. The corporate existence of a company sued as "The S. Fire Ins. Co. of W.," may be inferred from its having caused the policies sued on to be signed under that name by its president and secretary. Bon Acqua Imp. Co. V. Standard Fire Ins. Co. (W. Va.), 12 S. E. 771. But where the certificate of incorporation when produced is legally defective for want of conformity with the statutory requirements under which it purports to have been made, it cannot be used for proof of a corporation in esse McCallian v. Hibernia Sav. & Loan Soc, 70 Cal. 163; 12 P. 114. For presumption in favor of regularity of in- corporation see Welch v. Importers & Traders' Nat. Bank, (N. Y.) 25 N. E. 269; In re SKagara Falls Paper Manuf'g Co., Id. The fact that the business of a lumber company is conducted by a president and secretary, raises no pre- sumption of incorporation, Clark v. Jones, 87 Ala. 474 ; 6 So. 362. 2 State V. N. J. Tel. Co. (N. J.), 8 A. 290. ' A presumption exists in favor of the regularity of proceedings to incor- porate. Bank of Monroe v. Gifford, 72 la. 750; 32 N. W. 669; Wood v. Wiley Construction Co., 56 Conn. 87; 13 A. 137; Duggan v. Col. M. & I. Co., 11 Colo. 113; 17 P. 105. But courts will not presume legal incorporation in a state foreign to that under whose laws the corporation claims corporate existence. Compliance with such laws must be shown. Brown v. Dibble, 65 Mich. 502; § 44 ESSENTIALS OF ACT OF INCOEPORATION. 55 that the party recognized the corporate capacity to transact that particular business is sufficient.^ The court will take judicial notice of public acts conferring corporate powers ; but organization of cor- porations created by private statute or by organization under general incorporation laws must be proven. ^ When the question of corporate existence has been properly put in issue, it is generally sufficient proof for the corporation to produce the charter and show user.* Generally, by statute the production of a certified copy of the copy required by law to be filed *in a particular office is sufficient.* Under general incorporation laws, something more is required than the mere production of articles of incorporation. Either a compliance or attempted compliance with the laws governing the organization of the particular class of corporations to which it belongs must be shown in addition.^ 32 N. W 656. Where a corporation has been permitted to interplead, and lias been substituted as defendant in the action, a supplemental complaint filed by plaintiff against it, which fails to state whether it is a foreign or domestic cor- poration, and, if the latter, the state or government by which it was incorpo- rated, as required by Code Civil Proc. N. T. § 1775, is fatally defective, and a demurrer to such complaint will be sustained. Chandler v. Erie Transfer Co., 15 N. Y. S. 573. 1 Infra. Ch. III. - Hays V. Northwestern Bank, 9 Gratt (Va.) 127; Stribling v. Bank of the Valley, 5 Rand. 132; Alderman, etc., v. Finley, 10 Ark. 423; Hollo way v. Mem- phis, etc., R. R. Co., 23 Texas, 465; State v. Vincennes University, 5 Ind. 91 Anderson v. Kerns Draining Co., 14 Id. 199. 3 Fire Dept. v. Kip, 10 Wend. (N. Y.) 266; McCune Min. Co. v. Adams 35 Kan 193; 10 P. 468; Utica Ins Co. v. Tilmad, 1 Wend. {N. S.) 555; Meth. Epis, Church V. Pickett, 19 N. Y. 482; Society, etc., v. Young, 2 N. H. 310; Scars, burgh T. Co. v. Cutler, 6 Vt. 315; Sampson v. Bowdinham Mill Co., 36 Me. 78 Sauce v. Bingham, 39 Id. 35; Same v. Caldwell, 3 Wend. 296; Wilmington, etc., R. R. Co. V. Thompson, 7 Jones, N. C. 387. * See Boston Tunnel Co. v. McKenzie, 67 Cal. 485; 8 P. 22. A copy of the organization and certificate of a national bank, duly certified by the comptroller of currency of the United States, and authenticated by his oificial seal, is suffi- cient evidence of its incorporate existence. Hanover Nat. Bank v. Johnson, (Ala) 8 So. 42. ^Mokelumne Hill Co. v. Woodbury, 14 Cal. 424; Patterson v. Arnold, 45 Pa. St. 410; Washington Mut. Ins. Co. v. Chamberlain, 16 Gray, 165. A certifl- 56 ESSENTIALS OF ACT OF INCOBPOKATION. § 45^ § 45. Of foreign corporation. — Courts will not take- judicial notice of acts of other states chartering corpo- rations. These must be produced and put in evidence as other material facts. ^ Where the fact of legal organiza- tion of a foreign corporation is in issue, the production of a copy of the charter or articles of organization under general law of such foreign state properly cer- tified by the Secretary of the State is sufficient evidence of such fact in the first instance. ^ cate authenticated by the state officer with whom a copy of articles are required to be filed and shbwing in its statements substantial conformity with the law is sufficient evidence of legal organization; and when such organization is once shown, no subsequent irregularity in its proceedings or non-user is admissible In evidence between the parties. Eagle Works v. Churchill, 2 Bosw. 166. A statute making a copy of the certificate properly certified presumptive evidenee- of , what is therein stated does not exclude 6ther evidence of incorporation. New York Car Oil Co. v. Richmond, 6 Bosw. 21.3. Certified copies of letters of incor- poration are primd/acie evidence of such incorporation, under Code N. C. §§ 677-682, providing that letters of incorporation, certifiei by the clerk of the su- preme court, shall be admissible in judicial proceedings, and be deemed primd facie evidence of the organization of a company purporting thereby to be estab- lished. Marshall v. Macon County Sav. Bank, (N. C.) 13 S. E. 282. Evidence- that a corporation is acting as such is primd, facie evidence of de facto- existence. People v. Pharris, 49 Cal. :J42; Oakland Gaslight Co. v. Dameron, 67 Cal. 663; 8 P. 595, and a contract by a corporation, in a name different from its true corporate nams, may be enforced by either party, where there is no ques- tion of its identity. ■ Hasselmen v. Japanese Development Co. (Ind.), 27 N. E. 318. 1 Lewis V. Bank of Ky., 12 Ohio, 132; U. S. Bank v. Stearns, 15 Wend. 314; Savage Manuf. Co. v. Armstrong, 17 Me. 34; Marine, etc.. Bank v. Jauncey, 1 Barb. 486. 2 People V. Ah Sam, 41 Cal. 653; Pacific Guano Co. v. Mullen, 66 Ala. 582; State V. Carr, 5 N. H. 367; IT. S. v. Johns, 1 Wash. C. C. 363; s. c. 4 Ballas, 412; Farmers, etc., Bank v. Troy City Bank, 1 Doug. (Mich.) 437; Stone v. State, 20 N. J. 401. Under Code Iowa, § 2717, providing that when the corporate ca- pacity has been alleged generally, as authorized in section 2716, it shall not be sufficient to deny the corporate capacity in terms contradictory of the allegation, but the facts relied on shall be specifically stated; where duly authenticated articles of incorporation under the laws of another state tend to disprove the allegations of the answer in regard to plaint- iff's incorporation they should be admitted as competent, though they do not contain all that is required in such articles in the courts of Iowa, such fact not being relied on in the answer. Warder, Bushnell & Glessner Co. v. Jack, (Iowa), 48 N. W. 729. A party relying upon a non-compliance of a foreign corporation in Its organization with the laws of the state whence it claims corporate exist- ence must set out the particular statute or statutes relied upon in order that the court may judge of the legal provisions. Carey v. Cincinnati, etc., K. R Co., 5. Iowa, 357. § 46 ESSENTIALS OF ACT OF INCORPORATION^. ' 5T § 46. Pleading and denying corporate existence. — In or- dinary suits brought by or against a corporation, the question whether there is a corporation de facto is in issue ; but the legality of the corporate existence usually is not.^ An issue may be raised by a denial in proper form of the existence of any fran- chise or power whenever assumed as the foundation of a right.^ But a general denial does not put in issue plaintiffs corporate character.^ In ordinary 1 Such allegation is no part of the cause of action, and its absence in the complaint is not ground of demurrer for insufficiency. Adams v. Lamson Con- solidated store-service Co., 13 N. Y. S. 118. 2 City of Zanesville v. Zanesville Gras L. Co. (Ohio), 2;) N. E. 55. s Herron v. Cole, 25 Neb. 692; 41 N. W. 765 Palmetto Lumber Co. v. Risley,. 25 S. C. 309. In an action against certain persons who alleged in their answer generally that they were a corporation, it was held error to exclude the testi- mony of plaintiff that he did not know defendants to be a corporation, and did not deal with them as such, but that he was informed by one of them that they were a partnership, and in the belief that they were so dealt with them. Eaton v. Walker, 76 Mich. 579. Where a statute provides tliat no corporation now in existence or hereafter formed, shall maintain any action, etc., until it has filed copies of articles with certain officers, a demurrer to a complaint which does not set out compliance with the requirements of the statute in these respects will not be sustained. The non-compliance must be specially pleaded. South Yuba, etc., Co. V. Rosa, 80 Cal. 333; 22 P. 222; S. P. Ry. Co. v. Pursell, 77 Cal. 69; 18 P. 886; Tabor v. Mfg. Co., II Colo. 419; 18 P. 537; Malone v. Transp. Co., 77 Cal. 38; 18 P. 858; Rembert v. S. C. Ry. Co., 31 S. Car. 309; 9 S. E. 968. Plea of general issue admits plaintiff's corporate existence as well as its power to sue; Rockland Mt. D. etc. Co. v. Sewall, 78 Me. 167; 3 A. 181. A consolidated railroad company assigned a note given to one of the corporations merged in a consoli- dation. In a suit by the assignee, it was held that, in order to recover, the con- solidated company must be alleged and shown to be the legally created successor of the corporation to whom the note was given. Brown v. Dibble, 65 Mich. 520. Failure to allege that a party is a corporation renders the complaint de- murrable; Oesterreicher v. Sporting Times Pub. Co., 5 N. Y. Supp. 3. An allega- tion that a corporation is doing business in a certain state does not necessarily import that it was created by the laws of that state and was a citizen thereof. Brock V. N. W. Fuel Co., 1.30 U. S. 341. Failure to allege in the complaint that plaintiff is a corporation is ground for demurrer, although plaintiff is described in the title of the action as a company, and the complaint itself begins as fol- lows: "The plaintiff above named a corporation organized under the laws of the state of New York, and doing business in New York City, by .... its attorney, complaining of the defendants, alleges," etc. Schillina;er Fire Proof Cement & Asphalt Co. v. Arnott, 14 N. Y. S. 326 (May, 1801.) Following Society v. Anderson, 2 N. Y. Supp. 49; Oesterreicher v. Sporting Times Pub. Co., 5 N. Y. Supp. 2. As to what constitutes sufficient allegation- of corporate existence see West v. Eureka Imp. Co., 40 Minn. 394; 42 NT. 58 ESSENTIALS OP ACT OF INCOKPOEATION. § 46 actions between private parties, the general principles of pleading determine tlie suflScency of allegations, and denials of corporate existence,^ In a suit by a foreign W. 87; Adams Expr. Co. v. Harris, 120 Ind. 73; 21 N. E., Rep. 340; On- tario State Bank v. Tibbitts, 80 Cal. 68; 22 P. 66; Columbia Bank v. Jackson, 4 ISr. T. Supp. 433 ; Am. Bap. Home, etc . , Soc . v. Foote, 52 Hun, 236. In the last case it was held sufficient if the complaint alleges that the corporation was created first under statutes of other states and that it was also incorporated under a specified chapter of the laws of New York, for a given year as the facts are stated from which a conclusion as to whether it is a foreign or domestic corpo- ration must follow. For requisites of plea of failure to accept of statutory pro- Tisions see Bailey v. N. Y. Ry. Co., 1 N. Y. S. 304; following Astor v. Ry. Co., 1 N. Y. S. 174; Taendsticks-fabriks Aktiebolaget Vulcan v. Myers, 11 N. Y. S. «63. Estoppel by demurrer, Berkman v. Hudson Riv. W. S. Ry. Co., 35 Fed. R. 34. 1 Plea that plaintiff is not a corporation authorized to maintain the action held to be a defense to the whole action and to devolve upon plaintifE the burden -of proving its corporate existence. Jolmson v. Hanover Nat. Bank, 88 Ala. 271. Averment of corporate existence necessary in every count of complaint. Peo- ple V. Cent. Pac. R. Co., 83 Cal. 393; 23 P. 303; Same Plaintiff v. Several Other Defendants, Id. In Indiana it j^ held that the complaint must sliow by proper averment when the corporation was organized or under what law it was created. And this is not shown by an averment that the corporation was formed by the consolidation of two corporations in a certain year, it not being stated whether the constituent corporations were organized under general laws or special char- ters. Crawfordsville & Southwestern Turnpike Co. v. Fletcher, 104 Ind. 97; '2 N. E. 243. Where a defendant sued as a corporation filed the affidavit requiredby statute stating that it was not a corporation, and no evidence was ad- duced to the contrary, judgment was held properly entered for defendant. White V. Bellefontaine Lodge I. O. O. F., 30 Mo. App. 682. See also Rembert v. Ry. Co., 31 S. C. 309. Allegation that defendant is a private corporation, sufficient without stating by what authority it was incorporated ; Houston W. W. Co. v, Kennedy, 70 Tex. 233; 8 S. W. 36; Texas & P. Ry. Co. v. Virginia Ranch, etc., •Co. (Tex.) 7S. W.341; ahdit was held that where a party's name imports that it is a corporation the fact need not be alleged. Adams Express Co. v. Harris 120 Ind. 73; 21 N. E. 840. When the complaint described the defendant by its full corporate name it was held to sufficiently appear that defendant was a cor- poration. Cincinnati H. & I. R. Co. v. McDougall, 108 Ind. 179; 8N. E, 571. But a complaint which omitted to allege whether plaintiff was a foreign or do- mestic corporation or the state or county by or under whose laws it was created or any facts from which the court conld determine the class to which it belonged held bad on demurrer. Nat. Temperance Soc, etc., v. Anderson, 17 N. Y. St. Rep. 389; 2 N. Y. S. 49. Plea that corporation had ceased to exist in law at the time the alleged cause of action arose held bad for not averring that corporation had wound up its business and ceased to exist in fact as well as in law. Miller's Admx. V. Newberg, etc. Co., 31 W. Va. 836; 8 S. E. 600. A corporation plaintiff need not allege that it was empowered by its charter to make the contract. St. P. L. Co. V. Dayton 37 Minn. 364; 34 N. W. ,335. An answer stating that all the members of the corporation are non-residents and that all its business is •done in another state does not set up a defense. Moxie N. Y. Co. v. Baumbach "32 P. 205. As to what officers should verify pleading and what verification § 47 ESSENTIALS OF ACT OF IKCOKPOKATION. ■ 59 corporation it must allege not only the proceedings of incorporation, but the statute of the state where it was incorporated, authorizing such incorporation.! § 47. Issue of corporate existence, how raised. — It is clear that in all cases where a party to a suit brought by a corporation is not stopped by having dealt with the corporation as such, in the transaction upon which the action is based, he may put in issue the corporate existence. There is no presumption in favor of exis- tence of a private corporation, and in the absence of a statutory provision dispensing with it, or unless it is chartered by public act of the legislature, its existence must be alleged and proven as any other fact.^ The issue cannot arise where a corporation is sued by its corporate name and enters its appearance. The one party by bringing the action against it as a corpora- tion, and the other by entering its appearance as such is precluded from raising the question of corporate capacity to sue or to be sued. Accordingly, the objection that there is no such cor- porate body cannot be interposed under a general should contain, see Meton v. Isham Wagon Co. (N. Y.), 15 Civ. Proc. R. 259, Kelly V. Kom. Pub. Co., Id. 4 N. Y. S. 99. As to whether name imports a corpo- ration should be left to judicial knowledge. St. Cecilia Academy v. Hardin, 78 Oa. 39; 3 S. E. 305. The following additional authorities may be consulted with profit on the question of pleading or denying corporate existence : Am. Bap., etc., Soc. v. Foote, 52 Hun, 307; Sanders v. Sioux City, etc., Co. (Utah), 24 P. 532; Columbia Bank v. Jackson, 4 N. Y. s! 433; Weeks v. G. S. G. M. Co., (Cal.) 15 P. 302 Ontario State Bank v. Tibbitts, 80 Cal. 68; Young v. Prov. & S. S. Co., 150 Mass. 550; Smyth v. Scott, 124 Ind. 183; 24 N. E. 685; Supreme Lodge A. O. U. W. v. Zulke, 30 111. App. 98;aff. S. C. 129 111. 298; 21 N. E. 789; Rothschild v. 6. T. Ry. Co., 10 If. Y. S. 36; Ludowisky v. Polish, etc, Soc. 29, Mo. App. 337. 1 Savage V. Russell & Co., 84 Ala. 103; 4 So. 235. But failure to file the articles of incorporation with the declaration where the proper allegations are made is not ground for plea in abatement. C. J. L. Meyer & Sons Co. v. Black, 4 N. M. 190; 16 P. 620. 2 Rheem v. Nangatuck Wheel Co., 33 Pa. St. 358; Northumberland county Bank v. Eyer, 60 Pa. st. 436; Lehigh Bridge Co. v. Lehigh Coal, etc., Co., 4 Raw. (Pa.) 9; Brown v. lUius, 27 Conn. 84; School District v. Blaisdell, 6 N. H. 197* Methodist Church v. Wood, 5 Ohio, 283; Jones v. Bank of Tennessee, 8 B. Men. 60 ESSENTIALS OP ACT OF INCOKPORATION. § 47" denial, but must be made at an earlier stage or by- special plea according to the practice of the court where the suit is brought, 122; Whitington v. Farmers' Bank, 5 Har. & Johns, 489; JEtnalns. Co. v. Peck,. 28 Vt. 93; Savage Manuf. Co. v. Armstrong, 17 Me. 34; Mclntire v. Preston, 5 Gilman, 48; Soc. v. Pawlet. 4 Pet. 480; Hardy v. Merri weather, 14 Ind. 202; Hargravev. Bank of Illinois, 1 Breese, 84; Jones v. Cincinnati Type, etc., Co.,. 14 Ind. 89; Monumoi Gt. Beach v. Rogers, 1 Mass. 159; Omo v. Wedgewood,., 4 Id. 49; Alderman, etc., v. Finley, 10 Ark. 443. J§ 48, 49 LEGAIi AUTHOKITY PRESUMED FROM USER. 61 CHAPTER III. LEGAL AUTHOKITY PRESUMED FROM USER AND RECOGNITION. § 48. Corporations de facto. 49. Distinguished from corporations dejure. 50.. The common law prohibition considered. 51. Be facto existence must be shown. 52. How the law of agency connects itself with the question. 53. Powers of de facto corporations. 54. No de/acto corporation without legal authority for the class to which it assumes to belong. ■55. Same rule applied to foreign and consolidated de facto corporations. 56. A different rule where illegality or immorality appears in articles. 57. , Estoppel in the case of dealings with a de facto corporation. 58. Acts of acquiescence must be shown. 59. Where not estopped. § 48. Corpofations de facto — The term de facto ap- plied to an association of persons may either signify- that they are assuming and acting as a corporation without legal authority or upon irregular and imperfect organization under it, or we may by use of the term mean such an association so acting without regard to their legal right to so act. § 49. Distinguished from corporations de jure, — By the term " corporation rfe /wre " we describe an aggregate body of persons acting in a corporate capacity of legal right.^ In order to determine more clearly the difference between corporations de jure and de facto it is necessary 1 In a suit by a corporation where the principal issue is corporate existence, it is misleading and mystifying to use over and over again in the charge the ex- pressions, " corporation dejure" and "corporation de facto." C. Aultman & Co. V. Connor, 25 111. App. 654. -62 LEGAIi AUTHORITY PKESUMED FROM USER. § 60 to clearly understand the proceedings necessary to the legal formation of a corporation. " Familiar incidents of conditions precedent to the assumption of corporate powers are the requirements that there shall first be raised by subscription a certain amount of capital stock and that copies of articles of incorporation shall be filed with public officers. ^ Sub- scribers to the required capital stock in the one case are not bound as by express contract by their subscrip- tions ; and signers of articles of association do not in any such case become actual members of the proposed corporation until the positive requirements in regard to filing articles are fulfilled.^ The same rule applies ■to shareholders in the original companies when a con- solidation of two or more companies is authorized and attempted. The forms prescribed by law must be ob- served or they are not bound by the attempted consol- idation.3 §!^0. The common law pFohifoition considered. — Acts -done in excess of the powers conferred by law upon le^ially existing corporations are prohibited by the 1 Coyote, etc., Mining C9. v. Ruble, 8 Oreg. 284; De Witt v. Hastings, 69' N. T. 518. The fact, that a religious corporation had not, previously to the commencement of a suit, caused the papers and certificates required by chapter 3 of the Laws of New Mexico, 1880, to be filed in the office of the secretary of the territory, does not debar it from access to the courts in protecting its previously vested estate in the territory. Probst v. Trustees, etc., 3 N. M. 237; 5 P. 702. liThe law requiring foreign corporations doing business in Montana to first file charter or act of incorporation declares the failure to do so to be willful negli- gence. The penalty therefor is not disqualification to do. business, but simply re- lieves the iparty suing such corporation from the necessity of proving the incor- poration except by reputation. King v. National M. & E. Co., 4 Mont.; 1 P. 727. 2 There is a corporation de /acio though not dejrtre where the articles are filed with the county clerk but not with the Secretary of State, as required by laV. Grand River Br. Co. v. Rollins, 13 Colo. 4; 21 P. 897. 8 Mansfield, etc., R. R. Co. v. Drinker, 30 Mich. 124; Peninsular Ry. Co. v. Thorp, 28 Mich. 506; Tuttle v. Mich. Air Line R. R. Co., 35 Mich. 247; Infra, § 92. § 51 LEGAL, AUTHOJRITY PRESUMED FROM USER. 6S common law.^ It necessarily follows that all the acts done by a body assuming to act as a corporation but which, in fact, has no legal existence as such, are like- wise prohibited by the common law. But the rights and obligations between the parties to such prohibited contracts are matters independent and distinct from the powers of the corporation. ^ So with reference to the validity of transactions with a corporation without legal existence, the questions are different from that of the legal authority of either party to enter into it. These are two in number. First : Did the de facto cor- poration do the act or make the contract in a corporate ciapacity or become chargeable with it on the principles of the law of agency ? Second : Is the contract affected by the common law prohibition ? The organization assuming corporate functions with- out statutory authority has sometimes been treated by the courts as a nullity. But the ends of justice can be better promoted by recognizing the corporation like other existing facts, that is as a corporation, unlawful though it be, until by a direct proceeding its assump- tion of corporate capacity has been terminated. § 51. De facto existence must be shown. — But since Nothing is plainer than that a contract cannot be made with a non-entity or a " nullity "; therefore the (fe/acto corporation must be shown to have an existence at' least to the extent of contracting.^ But when it is 6hce shown that an attempt has in good faith been made 1 Infra. § 763. 2 Infra. § 765. "Where a deed of trust and note were executed to the Bank of Tennessee after its charter had expired, and a judgment creditor of the grantor in the deed of trust isued to have the deed of trust set aside, the relief prayed for was granted on the ground that it appeared affirmatively and conclusively that the corpora- tion did not exist for any purpose at the time of the execution of the note and deed of trust. White v. Campbell, 5 Humph. 38. "64 LEGAL AUTHOEITY PBESUMBD FEOM USER. § 52 to organize a private corporation by colorable proceed- ings, approved by the attorney-general and the secretary of state, and the paper intended for the certificate of incorporation is admitted to record in the oflSce of the latter, duly certified by him as the certificate of incor- poration of such body, and where these steps are followed by uninterrupted and unchallenged user for a number of years, and valuable rights and interests have been in good faith acquired, enjoyed and disposed •of by such organization, acting as a body corporate, it is a corporation' rfe/acfo and its corporate capacity cannot b6 questioned in a private suit to which it is a party. Such an organization has capacity to acquire, hold, enjoy, incumber, and convey the legal title to real estate ; and rights acquired, or liabilities incurred, by it, and by parties dealing with it in good faith, will not be divested or defeated by a subsequent judgment in quo warranto proceeding excluding it from the use of corporate franchises by reason of some defect or omis- sion in the original steps taken to assume corporate power s.i § 52, How the law of agency connects itself with the qnes- tion, — The fact that entering into the contract or doing the act by the de facto corporation was an exercise of its assumed corporate capacity, being shown or presumed from the relations of the parties to the transaction or the form of the pleadings, it is chargeable subject to general laws in the same manner and to the same extent as corporations de jure. The principles of the law of agency are applicable alike to all corporations whether lawfully formed or not. The scope of the powers of agents of a de facto corporation are determined by the same means as in corporations dejure. 1 Society Perun v. Cleveland, 43 O.st. 481; 3 N". E. 357. § 53 LEGAL ATJTHORITY PRESUMED FliOM USEE. 65 § 53. Powei's of de facto corporations. — The power of the majority of members is bounded and limited by the charter or articles and by-laws, if they have accepted or adopted any, as in corporations existing and acting under lawful authority. The customs, usages and methods of business governing individuals and de jure corporations engaged in like enterprises with the de facto corporation determine the fact and extenti of liability for acts of their officers and agents. Persons assuming to act as a corporation may, in some cases, be chargeable as such, even though they have made no attempt to comply with the law governing the class of corporations to which they claim to belong ; but generally there has been at least a colorable, com- pliance. When the assumption of corporate authority is a naked and bald pretension, the presumption can only be indulged to avoid gross injustice, and on the principle of estoppel, which will be applied in these cases as in others, not to avoid but to prevent fraud. Where the ends of justice would be promoted by refus- ing to recognize the de facto claim of such an associa- tion courts will not hesitate to ignore it. In order to avail the persons so claiming, they will be required to show that they have acted in the utmost good faith. Even then they are not shielded from personal lia- bility, except in those cases where a contractual rela- tion has been assumed. In actions not founded upon contract made between the parties, the existence of the alleged corporation, if put in issue, must be proved ; but when one has contracted with an alleged corpora- tion, and is sued for failure to perform his contract, he cannot be heard to say that the corporation had no exist- ence, and for that reason no contract was made.^ 1 Fresno Canal, etc., Co. v. Warner, 72 Cal. 379; Lehman v. Warner, 61 Ala. 455; Close v. Glenwood Cemetery, 107 U. S. 477; Oregonian Ry. Co. v. Oregon E. & N. Co., 10 Sawy. 470; Blgelow on Estoppel, 4th Ed. p. 527; Lakeside Ditch Co. V. Crane, 80 Cal. 181; First Bap. Church v. Branham, (Cal.) 27 P. 60. 5 66 LEGAL ^AUTHOKITY PRESUMED FROM USEE. §§54,55 § 54. No de facto corporation without legal anthority for the class to which it assumes to belong. — There can be no corporation de facto for any purpose in the absence of a law authorizing associated parties to file their articles of association or to become incorporated. Nor does the carrying on of business in a corporate name, under such circumstances, constitute evidence of user which can be considered in aid of legal corporate existence. ^ But where it is shown that there is a charter or law under which a corporation with the powers assumed might lawfully be incorporated, and there is in good faith a colorable compliance with the requirements of the charter or law and a user Of the rights claimed under the charter, the existence of a corporation is established.^ § 55. Same rule applied to foreign and consolidated de facto corporations — With respect to the regularity and legality of their organization in the sovereignty whence they claim corporate existence, foreign corporations are treated precisely as domestic in all proceedings growing out of their contracts and dealings.^ And so are corporations formed by an attempted consolidation of two or more corporations.* 1 Eaton V. Walker, 76 Mich. 579; 43 N. W. 638. See also Doyle v. Mizner, 42 Mich. 332; 3 N. W. 968; Meth. Epis. V. Church v. Bickett, 19 N. Y. 482, 485; Heaston v. E. Co., 16Ind. 275; Harriman v. Southam, 16 Ind. 190; U. S. Bank V. Stearns, 15 Wend. 314; Childs v. Smith, 55 Barb. 45. 2 Stout V. Zulick, 48 N. J. L. 599; 7 A. 362; Payette v. Free Home, etc., Ass'n, 27 111. App. 307. A corporation having carried on business, and held it- self out to the world as such before it was organized according to law the assets thereof should be made liable for its debts, though created previously to the completion of such organization. Bergen v. Porpoise Fishing Co 42 N J Eq. 397; 8 A. 523. * Bank of Toledo v. International Bank, 21 N. T. 542; Williams v. Cheney, 3 Gray, 215; Newburg Petroleum Co. v. Weare, 27 Ohio St. 354; Barrett v Mead' 10 Allen, 337. * Branch v. Jesup, 106 U. S. 468; 1 S. Ct. 495; Rachine, etc., R. R. Co. v. Farmers' L. & T. Co., 49 111. 347; Venahle v. Ebenezer Baptist Church, 25 Kans. 177, §§ 56, 57 LEGAL AUTHORITY PKESUMED FROM USER. 67 § 56. A different rule where illegality or immorality ap- pears in articles.— But if, in the purposes for which the de facto corporation was attempted to be organized, appear,, on the face of the articles or charter under which it assumes corporate capacity, the taint of illegality or im- morality, or a violation of apositive statutory prohibition, a member of such association will not be bound by his contract of membership, nor persons 'dealing with it by their recognition of corporate existence. This rule applies whether the organization in pur- suance of the reprehensible association was according to the formalities prescribed by law for the organiza- tion of corporations for lawful purposes or not.^ § 57. Estoppel in the case of dealings with a de facto cor- poration. — Corporate capacity cannot be denied on the ground of illegal organization by those who have assumed contractual relations or had transactions with a corporation as such in an action growing out of such contracts or transactions. Neither party will be per- mitted in such cases to deny the legality of corporate existence.2 All such objections, if valid, are only avail- 1 The following illustrations of the text are cited : An association incorpo- rated to resist the enforcement of the law; Detroit Scheutzen Band v. Agita-' tions Verein, 44 Mich. 313; 6 N. W. 675; to aid a rebellion against the govern- ment, Chicora Company v. Crews, 6 S. Car. 243 ; to violate any constitutional prohibition or statute of the state, St. Louis, etc., Assn. v. Hennessey, 11 Mo. App. 555. But see Importing, etc., Co. v. Locke, 50 Ala. 332; United States v. Insurance Companies, 22 Wall. 99, and the two following sections. Where in- dividuals owning a grant from the Mexican government of lottery franchises and privileges organized a corporation under the public improvement law of Louisiana for the avowed purpose of constructing and developing various public improvements in Mexico, but for the real purpose of carrying on a lottery in that republic, and fixed the capital stock at $1,000,000, all of which was issued as fully paid up stock to subscribers who paid nothing therefor, it was held that as by the constitution of Louisiana the lottery business is prohibited, unless the privilege is granted by the state, as is also the issue of paid up stock without any payment in fact being made, the subscribers to the original stock acquired no interests which a court would protect. Lewarne v. Meyer, 38 Fed. Kep. 91. 2 Weinman V. Wilkinsburg, etc., Ry. Co., 118 Pa. 192; 12 A. 288, estoppel of directors to deny constitutionality of act under which corporation organized ; 68 LEGAL AUTHORITY PKESUMED FilOM USER. ' §'57 able on behalf of the state.^ Transfers of property, real or personal, by and to a corporation, stand upon the same footing as other transactions. Neither party can avoid them on the ground that the corporation was Granger's Bus. Ass'n v. Clark, 67 Cal. 634; 8 P. 440; Fresno Canal, etc., Co. v. l "Warner, 72 Cal. .379 ; 14 P. .37 ; Wentz v. Lowe, (Pa.) 3 A. 876 ; Stout y. Zulick, 48 J K J. L. 599; 7 A. 36^; Minn. Gas. etc. Co. v. Denslow (Minn.), 48 N. W. 771; holding that persons who have dealt with de facto corporations cannot deny their corporate capacity for the purpose of holding shareholders to Individual lia- bility as partners; also that the principle applies as well to corporations formed under general laws as to those formed under a special charter; Mann v. Wil- liams, 143 Mass. 394 ; 9 N. E. 807 ; Independent Order, etc. , v. Paine, 1 22 111. 625 ; 14 N. E. 42; purchase of shares; Hamilton v. McLaughlin, 145 Mass. 20; 12 N. E. 424; acceptance of mortgage duly signed by officers of de/acto corporation; Marshall Foundiy Co. v. Killian, 99 N. C. 501; 6 S. E. 680; participation in organization and acting as president; Williams, v. Stevens Pt. Lumber Co., 72 Wis. 4S7; 40 N. W. 154; estoppel of corporation to allege its lack of organiza- tion at time of purchase; Corey v. Morrill (Vt.), 17 A. 840; Demorestv. Flack, 11 jST. Y. S. 83; to same effect; St. Jaul Land Co. v. Dayton, 42 Minn. 73; 43 N. W. 782;Com. Bk. V. Pfeiffer, lOS X. Y. K. S. (X. Y.)242; 15N.E.3H; Scheuffler w. Gr. L. A. & ST. W. (Minn.) 47 N. W. 799; Beekman v. Hudson River, etc.,Ry. Co. , 35 F. 3 ; estoppel of railroad company mortgagee from denying source of title ; Bates V. Wilson, 14 Colo. 140; 24 P. 99, estoppel of director; Vanneman v. Young (N. J.), 20 A. 53; Stout v. Zulick, supra, estoppel of parties seeking to hold Incorporators as partners when they have acted ia good faith; People v. Board of Trustees 111, 111. 171 ; principle applied in mandamus proceeding. A corpora- tion bringing suit in a justice's court is not on appeal bound to prove its corpo- rate existence in the appellate court if no objection was made by the defendant to its failure to do so on the trial in the court below. State v. K. Y. & N. J. Tel. Co., 51 N. J. L. 83 ; 16. A. 188. A corporation continuing to act as such after the expiration of the period of existence fixed in its articles held to be a de facto corporation to the extent of estopping one who had dealt with it as such; also that ohe who had taken part in its organization and acted as an officer and agent could not treat it as a copartnership and compel his fellow corporators to account to him on that basis. Bushnell v. Ont. Ice Mach. Co. (111. May, 1891), 27 N. E. 596. 1 Rowland v. Meader Furniture Co., 38 Ohio St. 270; Gaff v. Flasher, 33 Ohio St. 107, 115, 453; St. Louis & S. C. & M. Co. v. Sandoval C. <& M. Co., Ill II. 32; North v. State, 107 Ind. ,356; 8 N. E. 159; People v. Board of Trus- tees, 111 111. 171; Corey v. Morrill, 61 Vt. 598; 17 A. 840; Palmer v. Lawrence, 3 Sandf. 161; McFarlan v. Triton Ins. Co., 4 Denio (N". Y.) 392; West Winsted Savings Bank v. Ford, 27 Conn. 282; Town of Searcy v. Yarnell, 47 Ark. 269; 1 S. W. 319; Cravens v. Eagle Mills Co., 120; Ind. 6; 21 N. E. Rep. 981; School Dist. No. 61 V. Collins, (Dak.) 41 N. W. Rep. 464; McQord & Nave Mer. Co. v. Glen, (Utah) 21 Pac. Rep. 500; Winget v. Quincy Building & Homestead Ass'n, 128111. 67; 21 N. E. 12; Booske v. Gulf Ice Co., 24Fla. ,550; 5 So. 247; Mc- Donnell v. Ala. Gold L. Ins, Co., 85 Ala. 401; 5 So. Kep. 126; Nat. Com. Bank v. McDonnell (Ala,), 9 So. 149; Dorgan v. Same, Id. ; Bush v. Same, Id.; § 59 • LEGAL AUTHOraTY PRESUMED FROM USER. 69 not formed under authority of law.^ In suits against shareholders to enforce their liability on their subscrip- tion after insolvency, they will not be allowed to deny the validity either of their contracts of membership in the cle facto corporation, or the contract between the latter and the creditor.^ McMillan v. Same, Id.; Worcester Institution v. Harding, 11 Cush. 285; Kew- burg Tetroleum Co. v. Weare, 27 Ohio St. :i54; Jones v. Kolcomo Building Ass'n, 77 Ind. 340; Alexander v. Tolleston Club, 110 111. 6.5; City of St. Louis v. Shields, 62 Mo. 247 ; Grant v. Henry Clay Coal Co. , 80 Pa. St. 208, 218 ; Butchers, etc.. Bank v. McDonald, 130 Mass. 264; Town Hall Ass'n v. Chester, D5 Cal. 98; Golden Gate M. & M. Co. v. Joshua Hendry il. M., 82 Cal. 184; 23 P. 45. Prin- ciple of text applied to maker of promissory note. Oregonian Ry. Co. v. Oregon Ry. (;o.. etc., 22 Fed. Rep. 245, 249; s. c. 23 Fed. Rep. 232; Heastonv. Cincinnati, etc., R. R. Co., 16 Ind. 279. The rule applies as well to municipal as to private corporations. Douglass County v. Balles, 94 U. S. 104; County of Leaven- worth V. Barnes, 94 U. S. 70; Camp v. Byrne, 41 Mo. 525; Smith v. County of Clark, 54 Mo. 58; Goodrich v. Reynolds, 31 111. 490; Mitchell v. Deeds, 49 111. 417- Applies to suits generally upon contracts with corporations de facto. Imboden v. Etowah, etc., Mining Co., 70 Ga. SB. To de facto corporations as well as to parties dealing with them. Caller v. Town of Cameron, 3 Dill. 198; Blackburn v. Selma, etc., R. R. Co., 2 Flipp. 525; Racine, etc., R. R. Co. v. Farmers' L. & T. Co., 49 111. 346; Dooley v. Cheshire Glass Co., 15 Gray, 494; Empire Manuf. Co. v. Stuart, 46 Mich. 482; 9 ST. W. 527; Snider's Sons Co. V. Troy, (Ala.) 8 So. 658; Cory v. Lee, Id. 694; Stone v. Berkshire, etc., Soc, 14 "Vt. 86; Rush v. Halcyon Steamboat Co., 84 N. Car. 702; Reynolds v. Meyers, 51 Vt. 444. Contra, Boyce v. Towsontown Station, etc., Church, 40 Md. .359. 1 Cowellv. Springs, Co., 100 U. S. 55, 60; Broadwell v. Merritt (Mo.), 1 S. W. 855; Samev. Weller, Id. 857; Smith v. Sheeley, 12 Wall. 358; Close v. Glen- wood Cemetery, 107 U. S. 466; 2 S. Ct. 267; Sword v. Wickersham, 29 Kans. 746; City of Denver v. Mullen, 7 Col. 345; 3 P. 693; Cahall v. Citizens' Mut. Building Ass'n, 61 Ala. 232; Baker v. Keff, 73 Ind. 68; Thompson v. Candor, 60 111. 244; Snyder v. Studebaker, 19 Ind. 462, overruling Harrimau v. Southam, 16 Ind. 190; Case v. Benedict, 9 Cush. 540; but see Doyle v. Mizner, 42 Mich. 3:J2; 3 X. W. 968; Dooley v. Wolcott, 4 Allen, 406; Morgan v. Donaron, 58 Ala. 255; Carey V. Cincinnati, etc., R. R. Co., 5 Iowa, 8.58; Nutting v. Hill, 71 Ga. 557. A creditor of a de facto coi-poration who had obtained a preference in the distribution of its assets was not permitted to deny its legal incorporation in a suit by a receiver to recover the undue proportion after insolvency. Rafferty v. Bank of Jersey City, 33 N. J. Law 368. ^ Walworth v. Brackett, 98 Mass. 98; Bon Aqua Imp. Co. v. Standard F. Ins. Co. (W. Va.), 12 S. E. 771; Frost v. Walker, 60 Me. 468; Hager v. Cleve- land, 36 Md. 476; Wheelock v. Kost, 77 111. 296; Automatic, etc., Co. v. N. A. Phon. Co., 45 F. 1; Aultman v. Waddle, 40 Kan. 195; 19 P. 730; National Com. Bank v. McDonnell (Ala.), 9 So. 149; Doi-gan v. Same, Id. ; Bush v. Same, Id. ; McMillan v. Same, Id. ; McHose v. Wheeler, 45 Pa. St. 32, 41 ; Minn. Gas Light Economizer Co. v. Denslow, (Minn.) 48. X. W. 771; Holyoke Bank v. 70 LEGAL AUTHORITY PRESUMED FROM USER. ' § 58 § 58. Acts of acquiescence must be shown. — Esttoppelin the case of members seeking to deny liability to the corporation can only be predicated upon some act or acts of acquiescence. 1 Aparty maybe estopped by act- ing as a director,'^ by paying calls,^ attending meetings of stockholders,* by any other act indicating an acquies- cence in the validity of his subscription. In such cases he cannot set up as a defense that a charter has been granted upon a condition precedent which has not been performed where the incorporators are found in the quiet possession and exercise of corporate rights and privileges ,5 or that the corporation had forfeited Goodman Paper Co., 9 Gush. 576; Beck v. Henderson, 76 Ga. 760; Central Agricultural, etc., Ass'n v. Alabama, etc.. Ins. Co., 70 Ala. 120; Gaff v. Plesher, 33 Ohio St. 107. See Utley v. Union Tool Co., 11 Gray 139; Keyser v. Hitz, 2 Mackay (D. C.) 473. Where a subscription is made to the capital stock of a corporation in view of and for the purpose of a subsequent organization, which is actually had, and the subscriber pays in full for one share, and trans- fers other shares, he thereby recognizes and affirms his contract of subscription, and, upon a bill being filed by a creditor of the corporation, alleging its insol- vency, and asking for the payment of the unpaid capital stock, such subscriber cannot set up as a defense that the corporation was not in existence at the time the contract of subscription was executed. Bell's Appeal, 115 Pa. 88; 8 A. 177. 1 In Swortout v. Mich. Air Line K. R. Co., 28 Mich. ?,89, the Court say:^ "Where there is a corporation de facto, with no want of legislative power to its due and legal existence; where it is proceeding in the performance of corporate functions, and the public are dealing with it on the supposition that it is what it professes to be; and the questions suggested are only whether there has been exact regularity and strict compliance with the provisions of the law relating to incorporations, — it is plainly a dictate alike of justice and of public policy, that, in controversy between the de facto corporation and those who have entered into contract relations with it, as corporators or otherwise, such questions should not be 'suffered to be raised." 2 Home Stock Ins. Co. v. Slierwood, 72 Mo. 460; Stoops v. Greenburgh, etc., Co., 10 Ind. 47; Danbury & N. R. R. Co. v. Wilson, 22 Conn. 435; Evans- ville, etc., Co. v. Evansville, 16 Ind. 39.5; Meadow v. Gray, 30 Me. 547; Kisha- coquiUas, etc.. Go. v. McConahy, 16 S. & R. 140. , 3 Central P. R. Co. v. Clements, 16 Mo. 359; Maltby v. Northwestern Va. R. Co., 16 Md. 422; Intermountain Pub. Go. v. Jack, 5 Mont. 568; 6 P. 20. 4 Kansas City Hotel Go. v. Hunt, 57 Mo. 126. ' Tar River Nav. Go. v. Neal, '". Hawks (N. G.) 520; see also Wilmington G. & R. R. R. Go. V. Thompson, 7 Jones' L. (N. G.) 387; Brookville & G. T. Co. V. McCarty, 8 Ind. 392; Bushnell v. Con. Jer-Mach. Go. (Hi.), 27 N. E. 5 69. § 59 LEG AL . AUTHOBITY PRESUMED FROM USER. 71 its charter for misuser and non-user.^ After sucii acquiescence, it was held no defence that no certificate wasfiled.^or that the incorporation was obtained by false representations to Parliament,^ or that only three of the five required had signed the certificate,* or that the corporation was organized on a fourteen days' notice, fifteen days' notice being required.^ It seems to be well settled that a subscriber cannot set up that the charter® or the statute creating the corporation was unconstitutional ; ' though in a late case a contrary view is taken.' § 59. Where not estopped. — But where the contract of subscription was made previous to and in anticipation of incorporation, subsequent acts of acquiescence in the mode of incorporation do not estop the party from setting up the non-incorporation. The defect is a good defense to the action on a subscription so made.' Nor 1 Central A. & M. Ass'n v. Alabama Gr. L. Ins. Co., 70 Ala. 120. In this case the Court say: — " Whoever contracts with a corporation having a de facto existence, the reputation of a legal corporation in the actual exercise of corpo- rate powers and franchises, is estopped from denying the legality of the existence of the corporation, or inquiring into irregularities attending its formation, to defeat the contract, or to avoid the liability he has voluntarily and deliberately incurred." See Appleton Mut. Fire Ins. Co. v. Jesser, 87 Mass. 446; McCarty V. Lavasche, 89 Dl. 270. 2 Tarball v. Page, 24 111. 48. See also Wallworth v. Brackett, 98 Mass. 98; Hanover J, & S. K. K. Co. v. Haldeman, 82 Pa. St. 36; Rowland v. Meader Furniture Co., 38 O. St. 269; Central A. & M. Ass'n v. Alabama G. L. Ins. Co., 70 Ala. 120. s Crawford R. R. R. Co. v. Lacey, 3 T. & J. 80. * Monroe v. Fort W. J. & S. E. R. Co., 28 Mich. 272. ' Ossipee, etc., Co. v. Canney, 54 N. H. 295. 8 Dows V. Napier, 91 111. 44. ' St. Louis Ass'n v. Hennessey, 11 Mo. App. 555; Slocum v. Prov. S. & G. P. Co., 10 K. I. 112; McHose v. Wheeler, 45 Pa. St. 32; Tarbell v. Page, 24 111. 48. 8 Eaton V. Walker, 76 Mich. 579; 42 N. W. 638. 'Schloss V. Mont. Tr. Co., 87 Ala. 411; Taggart v. Western Maryland R. R. Co., 24 Md. 563. See also Dorris v. Sweeney, 60 N. T. 463; Rickoff v. Browne R. S. S. M. Co., 68 Ind. 388; Indianapolis F. and Min. Co. v. Herkimer, 46 Ind. 142; Nelson v. Blakey, 47 Ind. 38; Mclntire v. McLane D. Ass'n, 40 Ind. 104; Richmond Factory Ass'n v. Clarke, 61 Me. 351; Reed v. Richmond St. R. R. Co., 50 Ind. 342. 72 LEaAL AUTHOKITY PRESUMED FROM USER. § 59 does the principle of estoppel apply to prevent a subscriber from denying that a consolidated company which succeeds his own was legally incorporated;^ nor where at the time of signing the articles the names of the directors had not been inserted ; ^ or to a case where there is a total non-user of the corporate fran- chise ; ^ nor where the time within which work should have been commenced has expired.* 1 Mansfield, etc., R. Co. v. Stout, 26 O. St. 241 ; Brown v. Dibble, 65 Mich. 529; 32 N. W. Rep. 656. 2 Dutchess C. C. & R. R. Co. v. Mabbett, 58 N. Y. 397; Cayuga Lake R. R. Co. V. Kyle, 64 N. T. 185; Phoenix Warehousing Co. v. Badger, 67 N. Y. 518. ' Ruggles V. Brock, 6 Hun, 164; Meed v. Keeler, 24 Barb. 20; Abbott t. Aspinwall, 26 Barb. 202; McFarlan v. Triton, 4 Denio, 392; Childs v. Smith, 46. N. Y. 34. * McCully V, Pittuburgh & C. R. R. Co., 32 Pa. St. 25. § ^0 POWERS DERIVED PROM CHARTER. 73 CHAPTER IV. POWEBS DEKIVED PKOM CHAKTEB AND CONSTEUCTION OP SAME IN GENERAL. § 60. Construction of language of charters. 61. Grant construed as if made to an individual. 62. Specified powers. 63. Incidental powers. 64. Of corporations performing public duties. 65. No incidental power to become accommodation indorser. 66. Or shareholder in another corporation. 67. The incidental power must be necessary. 68. Grants when permissive and when imperative. 69. Construction of exemptions and special privileges. 70. Construction affected by public interest in the grant. 71. Eight to an exclusive monopoly never implied. 72. Inconsistent and ambiguous provisions in charter. 73. A distinction based on public policy. 74. When authority will be presumed. 75. Less liberal construction than formerly. § 60. Construction of language of charters. — When a charter is granted to or articles of incorporation ex- ecuted by persons, its terms are those of a contract between the incorporators and the state which is con- strued according to its spirit and intent as other con- tracts. The general rule is that the powers of corpo- rations organized under statutes are such, and such only as those statutes confer. That which is fairly implied is as much granted as what is expressed.^ ^ A corporation may sell any or all its property in the absence of a prohibi- tion in its charter, and if it acts in accordance with the duly expressed will of its stockholders. Leathers v. Janney, 41 La. Ann. 1120. May borrow money to pay a debt previously contracted ; and such transaction is not an increase of in- debtedness within constitutional prohibition against increasing indebtedness. Powell V. Blair, 7 Pa. Co. Ct. E. 492. May receive its own capital stock from a T4 POWERS DERIVED FROM CHARTER. § 60 But subject to this implication the general rules of construction applicable to all statutes govern those creating corporations. All legal provisions relate to the corporation as a whole, and not to the individuals composing it.* An act of the legislature giving a corporation power to extend its operations does not stockholder and pay therefor with bonds of another corporation with which be had originally purchased the stock. BoUins v. Shaver W. & C. Co., 80 la. 380; 45 N. W. 1037. See also County Ct. v. B. & O. R. Co., 35 F. 161; Koches- ter H. & L. Co. In re 110 N. Y. 119; 17 N. E. 678. One mining corporation may contract with another for common benefit and advance money to the latter for construction of drains. Sutro T. Co. v. Seg. B. Min. Co., 19 Nev. 121; 7 P. -271. May buy off competition where it does not create a monopoly. Leslie v. Lorillard (N. T.), 18 N. E. 363. May make negotiable paper. Fifth Ward Sav. Bank v. First Nat. Bank, 48 N. J. L. 513; 7 A. 318; Nat. Bank v. Young, 41 N. J. Eq. 531 ; 7 A. 488. May, when chartered for the purpose of manufacturing, disposing of, and dealing in engines, boilers, etc., make valid contracts of sale, not only in the state by which it was incorporated, but in all other states where the sale is not prohibited by local laws. Hall v. Tanner & De Laney Engine Co. '(Ala.), 8 So. 348. Railroad companies may contract for shipping room in a ves- sel. Norfolk & W. R. Co. v. Shippers, Comp. Co., 83 Va. 272; 2 S. E. 139. Railroad company cannot guarantee profit on stock of another company as an inducement to piwchase of its own stock. Memphis G. & E. Co. v. Memphis & C. R. Co. (Tenn.), 5 S. W. 52. A transfer company cannot become guarantor -of the credit of a third party in a matter in no way connected with its business. Lucas V. White Line Tr. Co., 70 la. 541; 30 N. W. 771. Corporation given a lien on shares of stockholders to secure indebtedness does not authorize the making a loan to such stockholder. Webster v. Howe Mach. Co., 54 Conn. 394; 8 A. 482. Articles of incorporation which declare an intention to create a company "for the purpose of locating, building, owning, and maintaining a union depot for railroads," in a certain city, and for the location, building, own- ing, and maintaining as many different lines of railroad from said depot to the exterior boundaries of " said city " as may be necessary for the " accommodation and use of the different railroad companies making said city a point of delivery for freight and passengers," held not to indicate an attempt to create an ordi- nary raiilroad company, under section 333 et seq. Gen. St. Colo. People v. Cheeseman, 7 Colo. 376; -S P. 716. A corporation can make no contracts and do no acts, either within or with- out the state which creates it, except such as are authorized by its charter. Ewing V. Toledo Savings Bank, 43 Ohio, 31 ; IN. E. 138. 1 Atty.-Gen. v. Bank of Newbern, 1 Dev. & Batt. Eq. 216. A corporation em- powered by its charter to " accept and execute all such trusts of every descrip- tion as may be committed to it by any person or persons whatsoever, or any cor- poration, as may be committed or transferred to them, by order of the supreme court, or by a surrogate, or by any of the courts of record," has power to accept an appointment by the supreme court of its state to act as committee of the estate of one adjudged an habitual drunkard. Glaser v. Priest, 29 Mo. App. 1. I 60 POWERS DERIVED FROM CHARTER. 75 change iis character or attributes, and therefore is not a new franchise.^ Every portion of the statute should be considered in connection with the nature of the objects for which the corporation is created and public convenience.^ 1 State V. Society, etc., (If. J.) 5 A. 724. ^ Strauss v. Eagle Ins. Co., 5 Ohio St. 59. Wliere the charter of a corporation authorized it to borrow money " not exceeding one half of the par value of the cap- ital stock," it was held that it could only borrow to the extent of one half of the capital actually paid in on subscriptions, although subscriptions had been made for the full amount of its capital stock. Lehigh Ave. K. K. Co. App., 129 Pa. St. 405; 5 L. K. An. 367. The same rule applies in paying dividends to stockholders and of regulating the amount of taxes due to municipalities having the power to tax, and in all these cases the amount of stock actually paid is the capital stock of the company. Citizens' Pass. R. K. Co. v. Phil, 49 Pa. St. 251; Second, etc., E. R. Co. V. Phil., 51 Pa. St. 465; Phil. v. Ridge Ave., etc., R. R. Co., 102 Pa. St. 190. A charter authorizing a railroad company to use steam as its motive power, and to carry freight and passengers, authorizes the construction and use of the ap- pliances ordinarily used for those purposes, though no express power is given to use locomotive engines or the heavy freight and passenger cars commonly used to carry freight and passengers, or to use the "T" rails in common use on steam railroads. App. of Bm-rough of Millvale (Burrough of Millvale v. Ever- green Ry. Co., 131 Pa. St. 1; 18 A. 99.3; 25 W. N. C. 142.) The provisions in the charter of a street railroad company, authorizing it to construct and maintain its tracks "upon and over such streets" in the city, "except in" certain of the streets therein mentioned, "as shall from time to time be fixed and deter- mined by the city council," are not to be construed to prevent the company from laying its tracks " across " one of the excepted streets. State v. Ifewport St. Ry. Co. (R. I.), 18 A. 161. The fact that the company had previously laid a track across one of the excepted streets without hindrance, in order to reach a wharf, upon which they were authorized to run their cars, confirms the inference that such a power was not excluded by the charter. Id. See City of Concord v. Concord Horse R. R. (N. H. ), 18 A. 87; City of Elmira v. Maple Ave. E. Co. , 51 Hun, 636 ; 4 N. Y. S. 943 ; Canal, etc. , St. Ry. Co. v. New Orleans 39 La. An. 709. Rev. St. 111., c. 32, sec. 5, which authorizes corporations to exercise all powers necessary to carry into effect the objects for which they are formed, does not empower a gas company, incorporated for the purpose of supplying gas to towns, to lay pipes in the streets of the town, whose charter gives the town authorities power to control and regulate its streets, without consent of the town. Chicago Municipal Gas-Light & Fuel Co. v. Town of Lake, 1.30 111., 42; 22 N. E. 616. See People v. Newton, 112 N. Y. 300; 19 N. E. 831, holding that neither the charter nor a general law gave a horse car company authority to excavate, amend and change the motive power to a subterranean cable without the con- sent of the city council. A literaiy corporation having power to contract and buy and sell real and pers onal property for the purpose of ' ' sustaining and carry- ing on said institution of learning, and not otherwise," has power to make a contract donating money to a railroad company to aid in constructing its road, 76 POWERS, DERIVED FROM CHARTER,. § 61 The public necessity for the act is of importance in determining the intention of the legislature, in author- izing the formation of a corporation. If, however, the cause or object of the statute is not apparent or as- certainable, the intention may be gathered from other circumstances. Whatever is within the intention is within the statute, though not within the letter, and what is clearly not intended is not within the statute, though within its letter.^ o § 61. Grant construed as if made to an individual. — - Whatever incidents would attach to the performance of a daty or the exercise of a privilege by an individ- ual under like circumstances, are within the spirit of the act and follow the grant of powers to a corpora- tion. ^ Being a mere creature of law, it possesses only those powers which are given to it by its charter. where the road will be of benefit to the association in giving a means of access for persons and supplies, and for shipping the produce of its land. Louisville & N. E. Co. V. Literary Society of St. Rose (Ky.), 15 S. W. 1065. National banks are prohibited making loans on real estate; but under Rev. St. TJ. S., sec. 5137, a national bank "may purchase, hold, and convey real estate mortgaged to it in good faith by way of security for debts, previously con- tracted." It was held, that a mortgage given to such a bank by way of security for an indebtedness previously contracted, and evidenced by new notes of the mortgagor, was valid. Farmers & Merchants' Nat. Bank v. Wallace, 45 Ohio St. 152; 12 N. E. 439. 1 People V. TJtica Ins. Co., 15 Johns. 358. In Civil Code, Cal., §498, requiring street railway tracks to be placed " as nearly as possible " in the middle of the street, the words " as nearly as possible " are equivalent to " as nearly as prac- ticable." Finch V. Riverside & A. Ey. Co. (Cal.), 25 P. 765. Act Pa. May 14, 1889, provides that a company may be formed for the purpose of constructing a street railway for public use in the conveyance of passengers by any other power than locomotives. It was held, that this grants, by implication, to the com- pany so formed, power to construct and operate an electric railway. Lockhart v. Craig St. Ry. Co. (Pa.), 21 A. 26. " Hood V. N. Y. &N. H. R. R. Co., 22 Conn. 1. A corporation'whose object is to mine limestone and to manufacture and sell lime cannot purchase goods to be resold except to carry on a supply store or otherwise aid in its principal busi- ness. ChewaclaLime Works V. Dismukes, 87 Ala. 344; 6So. 122. But it is not ultra vires for a trading corporation to lend money to one dealing with it to en- able him to carry on the transactions. Holmes, etc., Co. v. Willard 53 Hun 629; 5 N. Y. S. 610. ' ' § 6"2 POWERS DEKIVED FROM CHARTEK. 77 either expressly or by implication, as necessary and incidental to a due performance of its duties, the ex- ercise of its privileges and furtherance of the objects of its creation.^ The enumeration of powers in a charter confers those and what are fairly implied ; but such enumeration of powers excludes all others than those that are included upon a fair and reasonable construction.^ § 62. Specified powers. — If chartered to build a bridge it may contract debts for necessary labor, land, and material, or may borrow money with which to pay for them*; and as evidence of such indebtedness it may 1 Huntington v. Nat. Sav. Bank, 96 U. S. 388; Beatty v. Knowles, 4 Pet. 152; Nat. Park Bank v. German Warehousing Co. (N. Y.), 5 L. E. An. 673; Che- wacla Lime Wks. v. Dismukes, 87 Ala. 344; 6 So. 22. Alexander v. Cauldwell, S3 N. T. 480; Sherwood v. Alvis, 83 Ala. 115; 3 So. 307. Kunyan v. Koster, 14 Pet. 122; Russell v. Tapping, 5 McLean 194; Montgomery v- Mont. & W. R. R. Co. 31 Ala. 76; Vandall v. South San Francisco Dock Co., 40 Cal. 83; New London V. Brainerd, 22 Conn. 552; Puller v. Plainfield Academic School, 6 Conn. 532; Cecum Co. v. Sprague Mf g Co. , 34 Conn. .541 ; Winter v. Muscogee R. Co., 11 Ga. 438; Bowlingreen & M. R. Co. v. Warren County Ct., 10 Bush. 712; Weckler v. First Nat. Bank, 42 Md. 581- Pa. D. & M. Nav. Co. v. Dandridge, 8 Gill. & J. 248; Davis v. Old Col. R. Co., 131 Mass. 259; Rochester Ins. Co. v. Martin, 13 Minn. 59; Mobile & O. R. Co. v. Franks, 41 Miss. 511; 72 Am. Dec. 143; Matthews V. Skinner, 62 Mo. 329; Rugglesv. Collier,43 Mo. 353; Downing V. Mt. Washington R. Co., 40 N. H. 231; South Newmarket Meth. Sem. v. Peasler, 15 N. H. 330; Le Conteulx v. Buffalo, 33 N. Y. 333; Brady v. New York, 20 N. Y. 312; People v. Utica Ins. Co., 15 Johns, 358; White's Bank v. Toledo F. & M. Ins. Co., 12 Ohio St. 601; Overmeyer v. Williams, 15 Ohio, 31; Straus V. Eagle Ins. Co., 5 Ohio St. 59; Diligent Fire Co. v. Com., 75 Pa. 291; Wolf T. Goddard, 9 Watts, 550; Pa. R. Co. v. Canal Commrs., 21 Pa. 9; Com. v. Erie & N. E. R. Co., 27 Pa. 339; Northwestern R. Co. v. Payne, 8 Rich. L. 177; Shawmut Bank v. Plattsburg EUensworth v. St. Louis, etc., R. R. Co., 98 N. Y. 553. An act requiring a vote of the stockholders to convey real estate does not apply to a foreign cor- poration. Saltmarsh v. Spaulding, 147 Mass. 224; 17 N. E. 316. The legis- lature in levying a tax upon gross receipts of foreign corporations may reojiuire the same to be paid by their agents. State v. Sloss, 83 Ala. 93; 3 So. 745, Same law determines duties and liabilities of offices of foreign corporation as those of citizens occupying similar fiduciary relation. N. Y. P- & B. R. Co. v. Dixon, 114 N. Y. 80; 21 N. E. 110. ' Silver Lake Bank v. North, 4 Johns. N. Y. Ch. 370; Bard v. Poole, 12 N. Y. 505; Milnor v. New York, etc., R. B. Co., 53 N. Y. .363; McGregor v. Erie Ry. Co., 35 N. .T, Law, 115; Bank of Augusta v. Earle, 13 Pet. 539, 395; Stetson, y. City Bank, 2 Ohio St. 174; Lewis v. Bank of Kentucky, 12 Ohio 132; Isle. 100 IN STATE FOKEIGN TO THAT OF CJIEATION. § 81 § 81. The law of comity will not autliorize infringement of local laws The comity between states will not be allowed to avail a corporation for the purpose of evading under its cover the laws of a foreign state.^ To give effect to such an attempt would be to facilitate the per- petration of a fraud upon both the state of its creation and that in which it seeks to exercise its powers.^ Koyale Land Corp. v. Sec. of State, 76 Mich. 162 ; 43 N. W. 14. The laws of New York forbid devises to corporations except under certain conditions; and a devise made in that state to a foreign corporation was held void although it was authorized by its charter to accept testamentary devises. Boyce v. City of St. Louis, 29 Barb. N. T. 650; White v. Howard, 46 N. Y. 144, 165; United States V. Fox, 94 U. S. 315. Though the charter of a corporation authorizes it to charge a certain rate of interest, such rate will be deemed usurious in a state whose usury laws make it so. Hitchcock v. United States Bank, 7 Ala. 435. But see Larwell v. Han- over Sav., etc., Soc, 40 Ohio St. 274, 281. An act requiring every contract of a corporation whereby a liability may be incurred by it exceeding $100 to be in writing under its seal held not to apply to foreign corporations. Kumbough v. So. Imp. Co., 106 N. 0. 461; 11 S. E. 528. 1 Gill V. Kentucky & Col. G. S. M. Co., 7 Bush. 6.35; Phoenix Ins. Co. v. Com- monwealth, 5 Bush 68; Milnor v. New York & N. H. R. R. Co., 53 N. Y. 363; Runyon v. Koster, 14 Pet. 122; Martin v. Mobile, & O. R. R. Co., 7 Bush, 635; Re Comstock, 3 Sawy. 218; Frazier v. Wilcox, 4 Rob. La. 518; Bard v. Poole, 12 N. Y. 495; Diamond Match Co. v. Powers, 51 Mich. 145; 6 N. 314. By virtue of Revision N. J., sec. 50, p. 186, the courts will order the books of a com- pany incorporated under the laws of that state, but keeping its books out of the state, brought into the state for inspection by stockholders, when the stock has depreciated, and the stockholders are desirous of knowing the exact condition of the company, and on failure to do so will declare its charter forfeited. Huy- ler V. Craigin Cattle Co., 40 N. J. Eq. 392; 2 A. 274. ^ A corporation was created by act of the legislature of Pennsylvania and em- powered by its charter to do business anywhere except in the state of Pensyl- vania. It was also provided that " It shall be lawful for the company to estab- lish the necessary offices for the business of the company wherever their busi- ness is located and to have their principal office in the United States in such place as they may deem expedient; at which place it shall be lawful to hold all meetings for the transactions of the business of the company." After doing business on an extensive scale in the state of Kansas and keeping its main office there for a number of years, its authority to do business by virtue of the comity of the latter state came in question before its courts in an action on municipal bonds executed and delivered to it. It was held that no comity due or existing required the state of Kansas to recognize the corporate existence or powers of such foreign corporation. Land Grant By., etc., Co. v. Coffee County, 6 Kan. 256. Acts Tex., 1885, p. 59, which repealed Rev. St. 1879, art. 566, subd. 27, authorizing the organization of mercantile corporations, is a direct prohibition §§ 82, 83 IN STATE FOREIGN TO THAT OP CKEATION. 101 Nor can a foreign corporation do away by contract with the provisions of statutes regulating and fixing conditions upon which it is permitted to do business in a state. ^ § 82. Comity a part of the law of the land. — Still since the law of comity is founded upon reasons of in- terest and convenience, an intent to disregard it must clearly appear in order to deprive a corporation of its benefits. By it corporations, like natural persons, are permitted to extend their dealings into other states than that in which they are chartered. " If the policy of a state or territory does not permit the business of the foreign corporation in its limits or allow the corporation to acquire or hold real property, it must be expressed in some affirmative way ; it cannot be inferred from the fact that its legislature has made no provision for the formation of similar corporations or allowing corporations to be formed only by general law." ^ § 83. The charter alone is consulted for authority in an- other state, — The powers conferred in the charter or articles of incorporation are consulted to determine the against the operation of such corporations in Texas, and the rule of comity does not extend so far as to render valid the charter of such a corporation ob- tained In another state for the sole purpose of doing business in Texas. Affirm- ing 1 S. W. 200. Empire Mills v. Alston Grocery Co., (Tex.) 15 S. W. 505. See also Smith v. Alvord, 63 Barb. Jf. Y. 42.3; Com. v. N. Y. L. E. & W. R. Co., 114 Pa. St. 340; 7 A. 756; State v. Milwaukee, etc., Ey. Co., 43 Wis. 079; Hannav. International Petroleum Co., 23 Ohio St. 622; Runyan v. Koster's Lessee, 14 Pet. 130; Second Nat. Bank v. Lovell, 2 Gin. (Ohio) 400; Newburg Petroleum Co. v. Weare, 27 Ohio St. .352; Hill v. Beach, 12 N. J. Eq. 31; Mer- rick V. Van Santvoord, 34 N". Y. 222; Merrick v. Brainard, 38 Barb. 574. But the conveyance of real estate to a foreign corporation which the law does not permit it to hold is not void upon collateral attack. It may hold and enjoy the same subject to the Commonwealth's right of escheat. Hickoi'y Farm Oil Co. v. Buf. N. Y. & P. R. Co., 32 F. 22. See also Com. v. N. Y. L. E. & W. Co., 114 Pa. St. .340; 7 A. 756; Carlow v. C. Aultman & Co. (Neb.), 44 N. W. 873. 1 Fletcher v. N. Y., etc., Ins. Co., 13 Fed. Rep. 526. See also Daly v. Nat., etc., Ins. Co., 64 Ind. 1, holding that the same principle applies to a corpora- tion chartered by the federal government. ' Cowell V. S. Springs Co., 100 U. S. 50, 00, per Field, .T. 102 IN STATE FOEEIGK TO THAT OF CREATION. § 84 legality of corporate acts in a state, other than that creating the corporation. While the general legislation of such state has no extra-territorial application, yet it affects the legality of the acts of the corporation if the same are legal in the state where performed. Though an act be expressly prohibited in the charter of a corporation where formed, yet it may be upheld in another sovereignty if not contrary to the laws of the latter.i And a foreign corporation may charge the legal rate of interest in a state where it does business though the rate would be illegal and usurious in the state of its creation.^ If although the laws of the state where the charter was granted render the corporation liable in an action by the representatives of a person whose death it has caused, yet no liability will attach in another state where no means of redress for such act are provided:® § 84. Corporations not entitled to rights and immunities as citizens. — The constitutional provision securing^ to citizens of each state all the immunities and privileges of citizens in the several states was not intended to in- i Thus where in a charter granted in Illinois the corporation was prohibited from disposing of its bonds at less than eighty cents on the dollar, it was held that such prohibition did not prevent it from disposing of its bonds at less rate in the State of New York. Such prohibitions were considered in the latter state as mere restrictions upon the powers of the oflBcers and agents of cor- porations. Ellsworth V. St. Louis, etc., Ey. Co., 98 N. Y. 553. The same principle has been applied to devises prohibited In the state grant- ing the charter but lawful in the state where made, White v. Howard, 38 Conn. 342; Felldws v. Miner, 119 Mass. 541. See Baker v. Clarke Institution, 110 Mass. 88; Ould V. Washington Hospital, 95 U. S. 313. As to the capacity of an insolvent corporation to take a transfer of property where the laws of the place of creation and of the transaction were different; Hoyt v. Sheldon, 3 Bosw. 267; 299. See also Hoyt v. Thompson, S N. Y. 320, 353; s. c. 19 K. Y. 208; Ohio Life Ins. Co. v. Merchants' Ins., etc., Co., 11 Hump. 324. " Bard v. Poole, 12 N. Y. 495; Hitchcock v. United States Bank, 7 Ala. 386, 433. See Miller v. Tiffany, 1 Wall, 310; Depau v. Humphreys, 20 Mart.' La. 1 ; pullard v. Thompson, 35 Tex. 318. 8 Crowley v. Panama, R. K. Co., 30 Barb. 99. § 85 IN STATE FOEEIGX TO THAT OF CKEATiON. 103 elude corporations under the term citizens.^ Such a con- struction would have the effect of conferring upon each state the power of disposing of the franchise of acting in a corporate capacity within the jurisdiction of other states. Such a power would enable one state by the creation and transfer of " legal institutions " to entirely subvert the objects of legislation in a sister state and substitute its own.^ § 86. Property rights are protected.— But this prin- ciple only applies to foreign corporations seeking to enjoy the rights and benefits of citizenship beyond the limits of the states creating them. It has come to be well settled that with respect to property rights no dis- crimination can be made between corporations and natural persons.^ The shareholders of a corporation are not necessarily citizens of any state ; and even if they were there is a marked distinction between a discrimination against the members and against the corporation itself. It cannot be said that a law of a state discriminating against a cor- poration chartered by another state discriminates against the indivi(iual citizens of such state. It would merely be a modification, limitation or abrogation of the comity previously existing between the two states with respect to the extra-territorial effect of charters of incorporation. Special privileges, such as the enjoyment of a corporate franchise, enjoyed by citizens in their own state, are not secured under the constitutional provision under con- sideration in other states. The privileges intended to 1 Norfolk W. & K. Co. V. Conn., 136 U. S. 114; 10 S. C. 958. See also Cum- mings V. Wings, 31 S. C. 427; Cole v. Cunningham, 133 U. S. 107; 10 S. C 269. 2 Phil. Fire Asso. v. New York, 119 U. S. 110; Pembina Cons. S. M. & M. Co. V. Penn. 125 U. S. 181. 3 Minneapolis & W. L. K. Co. v. Herrick, 127 U. S. 210; Missouri Pac. R. Co. V. Mackey, Id. 205; Minn. & St. P. E. Co. v. Beckwith, 129 U. S. 26; Santa Clara County v. Sou. Pac. K. Co., 118 U. $. 394, 396; Pembina Min. Co. v. Penn., 125 U. S. 181. 104 IN STATE FOREIGN TO THAT OF CREATION. §§ 86, 87, 88 be secured by it are those common to all citizens in any given state under its constitution and laws by yirtue of their being citizens.-' § 86. Foreign corporations may be excluded Since a state has the right to exclude foreign corporations entirely from the exercise of corporate powers or the transaction of business within her boundaries, and the means by which she causes such exclusion or the motives thereof are not subjects for judicial inquiry, — ^ § 87. Policy of exclusion need not be expressed.; — The intent of a state to exclude foreign corporations from the transaction of business within its borders need not be expressed directly, but may be inferred from its general policy and legislation. Whenever a state suflSciently indicates that contracts which derive their validity from its comity are repugnant to its policy or are considered as injurious to its interests, the presumption in favor of the adoption of such comity can no longer be drawn.^ § 88. State may impose conditions. — It necessarily 1 Paul V. Virginia, 8 Wall, 168. 2 Doyle V. Continental Ins. Co., 94 TJ. S. 535; Blair v. Perpetual Ins. Co., 10 Mo. 564. A subsequent revocation of license granted to a foreign corporation to do business within the state does not deprive it of property without due ptocess of law. Hartford F. Ins. Co. v. Raymond, 70 Mich. 485; 38 N. W. 473. Compare N. O. & M. Packet Co. v. James, 32 F. 21, holding that foreign corpo- ration cannot be excluded from the right to do business in Louisiana. ' Carroll v. City of East St. Louis, 67 111. 568; Bank of Augusta v. Earle, 13 Pet. 592; Kunyan v. Koster's Lessee, 14 Pet. 122, 130; Myers v. Manhattan Bank, 20 Ohio, 301, 302; B'k of Marietta v. Pindall, 2 Rand. 473; Eees v. Con- cocheague B'k, 5 Rand. 326; Starkweather v. American Bible Soc, 72 111. .">(); United States Mortgage Co. v. Gross, 93 III. 483, 493; Christian Union v. Yount, 101 U. S. 358. In Carnall v. E. St. Louis, 67 lU. 568, a foreign corpo- ration had been incorporated in Connecticut whose sole business was the buy in o- and selling of land. It was held that such business was contrary to the general policy pf the state of Illinois because tending to create monopolies, and acquisi- tion of land by it would not be permitted. To same effect is U. S. Trust Co. V. Lee, 73 III. 142. But such rule was held not to prevent a foreign corporation from )oaniii!T nionoy on real estate security. U. S. Mfg. Co. v. Gross, 9.1 111. 4S:l. § 88 IN STATE FOREIGN TO THAT OP CREATION. 105' follows that a state may impose conditions not in con- flict with the constitution or laws of the United States to the transaction of business within its territory by companies chartered by other states, or having given a license it may revoke or alter it with or without cause. i 1 Phil. Fire Asso. v. N. Y., 119 U. S. 110; People v. Fire Ass'n, 92 N. T. 31] ; Goldsmitli v. Home Ins. Co., 62 Ga. 379; Lafayette Ins. Co. v. French, 18 How. 407; Paul v. Virginia, 8 Wall. 168; Ducat v. Chicago, 10 Wall. 410; s. c. 4.S 111. 172; Woodward v. Com. (Ky.), 7 S. W. 613; Phoenix Ins. Co. v. Common- wealth, 5 Bush, Ky. G8; State v. Fosdick, 21 La. Ann. 434; State v. L. L. & G. Ins. Co., 40 La. Ann. 463; 4 So. 504; State v. S. C. & N. R. Co., 43 Minn. 17; Western Union Tel. Co. v. Mayor, 28 Ohio St. 539, 540; Home Ins. Co. v. Davis, 29 Mich. 238; Pembina, etc., Co. v. Com., 125 U. S. 181; 8 S. Ct. 737; Slaughter v. Commonwealth, 18 Gratt. 767; Tatem v. Wright, 3 Zab. 429; Fire Department V. Noble, 3 E. D. Smith, 449; State v. Benn, (N. J.) 19 A. 665. Acts Tenn., 1875, c. 109, and Acts Tenn., 1887, c. 187, provide that no foreign insurance company shall do business in the state unless it has "at least $200,000 ' of paid-up actual cash capital, of which $100,000 shall be invested in bonds of the United States, or some one or more of the states." A purely mutual fire in- surance company cannot be licensed to do business in the state, though it has in its advance premium fund more than $200,000, of which $100,000 is invested in United States bonds, and the commissioner of insurance may be satisfied that the company is entirely solvent. Mutual Fire Ins. Co. v. House, (Tenn.) 14 S. W. 927. Const. Ala., art. 14, § 4, prohibiting a foreign corporation from doing business in the state, without having an agent and known place of business in the state, was not intended to interfere with interstate commerce, and does not prevent a foreign corporation from selling a merchant of the state goods to be shipped into the state. Ware v. Hamilton-Brown Shoe Co. (Ala.), 9 So. 136. ■- Eev. Code, Ala., § 1180, prohibiting the agent of a foreign insurance company to take any risk or transact any business of insurance in the state, without first procuring a certificate of authority from the auditor, does not prohibit the trans- action of business not in the line of insurance, and a bill, therefore, to foreclose a mortgage in favor of a foreign insurance corporation, which merely shows a debt owing to the company, for which security was given, is not demurrable for failing to show a compliance with the statute. Boulware v. Davis (Ala.), 8 So. 84. See also Nelms v. 'Edinburgh- American Land Mortg. Co., of New England (Ala.), 9 So. 141; Mortg. Security Co. v. Ingram (Ala.), 9 So. 1^0. A foreign insurance company which issues to its agents in Louisiana com- missions authorizing them to receive proposals for insurance, to fix premiums and receive the same, and to countersign, issue, renew and consent to the trans- fer of policies signed by the president and secretary, and which has made the deposit, and appointed an agent to receive services of process, required as con- ditions precedent to the business of insurance by the laws of Louisiana, is doing business within the state, within Act La. 101 of 1886, imposing licenses on insurance companies. State v. New England Mut. Ins. Co. (La.), 8 So. 888. It was held that where the owner of a, plantation situated in Louisiana applies for a loan in another state to the agent of a foreign corporation, and the 106' IN STATE FOREIGN TO THAT OF CEEATION. § 88 But it has been recently held that a state cannot in its constitution impose as a consequence of failure to pro- vide a known place of business within the state a total exclusion from the right to do business within the state, such provision being considered an interference with interstate commerce when applied to common carriers.^ A state may provide as a condition precedent to the transaction of business by a foreign corporation the filing with a state oflScer of a stipulation not to remove suits brought against it into the federal courts, and a violation of such law will justify a revocation of the license to do business.^ , But an agreement to this effect cannot be specifically enforced nor pleaded in bar of a petition for the removal of a cause to a United States Court, because the contract itself is unconstitutional and void.^ A common requirement is that a designation of an ofiicer or agent upon whom service of process may be had shall be filed in a public ofiice in the county where notes and mortgage, though executed in Louisiana, are delivered and made payable in such other state, the transaction is not a violation of Const. La., Art. 236, providing that " no foreign corporation shall do any business in this state •without having one or more known places of business, and an authorized agent or agents in this state upon whom process may be served." Eeeves v. Harper (La.), 9 So. 104; Maxwell v. Reeves, Id. A single purchase of machinery within the state by a foreign corporation to be carried to and set up in the state of its domicile does not constitute doing business within the state. Colo. I. W. v. S. G-. Min. Co. (Colo.), 25 P. 325. 1 N. O. & M. Packet Co. v. James, 32 F. 21. 2 Doyle V. Continental Ins, Co., 94 TJ. S. 537, overruling the circuit court; Hartford Fire Ins. Co. v. Doyle, 6 Blss. 461. A statute imposing as a condition to the right to do business within the state that no actions shall be removed or brought in federal courts, does not affect the right of the foreign corporation to sue in the state court though an action has been previously brought for the same cause in a federal court. N. W. Mut. L. Ins. Co. v. Brown, 36 Minn. 108; 81 N. W. 54. See Goodrel v. Kreichbaum, 70 la. 362; 30 K. W. 872. 8 Insurance Co. v. Morse, 20 Wall. 445; Barron v. Burnsides, 121 U. S. 186; Chicago M. & St. P. E. Co. v. Becker, 32 F. 849; Lafayette Ins. Co. v. French, 18 How. 404, 407; Ducat v. Chicago, 10 Wall. 410; St. Clair v. Cox, 106 U. S. 330, 356; Phil. Fire Ass'n v. jST. Y., 119 U. S. 110, 120. Contra, Home Ins. Co. v. Davis, 29 Mich. 238. § 89 IN STATE FOEEIGX TO THAT OF CREATION. 107 it has its principal place of business and. sometimes, in such office in each county in the state where it has a resident agent and with the secretary of state or some other state officer.^ An appointment under such statute holds good until a new appointment is made.^ But the right of the foreign corporation to sue and be sued in the federal courts is not affected by the appointment of an agent under such statute.* Nor is the right to serve in the ordinary way provided by statute taken away by failure to file the appointment when the cor- poration has engaged in transacting business in the state.* A judgment obtained by such service cannot be impeached in another state.^ No express assent to statutory regulations and conditions is necessary. As- sent will be presumed.^ A charter provision in conflict with local provisions will be disregarded.^ § 89. How contracts are affected by failure to comply with conditions precedent. — The effect of statutes impos- ing conditions precedent upon the contracts of foreign 1 Goodwin v. Colorado, etc., Co., 110 U. S. 1; Gibbs v. Queen's Ins. Co., 63 N. Y. 114; Leonard V. Washburn, 100 Mass. 2.51; Morton v. Mutuallns. Co., 105 Mass. 141; Thayer v. Tyler, 76 Mass. 164; Nat., etc., Ins. Co. v. Pursell, 92 Mass. 231; Gillespie v. Commercial, etc., Ins. Co., 78 Mass. 201. 2 Gibson v. Mfgrs., etc., Co., 144 Mass. 81; 10 N. E. 729. 8 Stevens v. I'hoenix Ins. Co., 41 N. Y. 149; Gray v. Quicksilver Min. Co., 21 Fed. Rep. 288. * Ehrman v. Teutonia Ins. Co., 1 McCrary, 123. See also Colo. I. W. v. S. G. Min. Co. (Colo.). 25 P. 325. " Lafayette Ins. Co. v. French, 18 How. 404; Moeh v. Virginia, etc., Ins. Co., 10 Fed. Rep. 696. « Lafayette Ins. Co. v. French, 18 How. 404. ' Gin. Mut., etc., Co. v. Rosenthal, 55 111. 85; State v. Lathrop, 10 La. Ann. 398. See also Leonard v. Washburn, 100 Mass. 251 ; Thayer v. Tyler, 76 Mass. 164; Nat., etc., Ins. Co. v. Pursell, 92 Mass. 231; Morton v. Mutual Ins. Co., 105 Mass. 141; Gillespie v. Commercial, etc., Ins. Co., 78 Mass. 201. A single act does not constitute the doing of business within a state. Cooper Mfg. Co. V. Ferguson, 113 U. S. 727. Nor does the making and performing contracts through domestic companies. People v. Am. Bell Tel. Co., 117 N. Y. 241; 22 N. E. 1057; Com. v. Same, 129 Pa. St. 217; 18 A. 122, where the question of the power of the state to tax foreign corporations doing business was involved. 108 IX STATE FOREIGN TO THAT OF CEEATION. § 89 eorporations made without compliance with the condi- tions imposed is a question upon which litigation fre- quently arises. There is a distinction in this respect between disabling and prohibitory provisions. In the case of the former the validity of their acts and con- tracts cannot be collaterally attacked ; the state alone can object. If, however, the language of the constitu- tional provision or statute be clearly prohibitory or if it impose a penalty for violations, then contracts made without previous compliance with the conditions im- posed are void and unenforceable by the corporation whether expressly declared to be so or not.i 1 Dudley V. Collier, 87 Ala. 431; 6 So. 304; Woods v. Armstrong, 54 Ala. 150; Robertson v. Hays, 83 Ala. 290; 3 So. 674; Farrior v. U. S. Co., 88 Ala. 275; 7 So. 200; Christian v. Am. F. L. & M. Co., 89 Ala. 198; 7 So. 427; Melchon V. McCarty, 11 Am. Rep. 605; Prescott v. Battersby, 119 Mass. 285; Thome v. Traveller's Insurance Co., 80 Pa. St. 15; Cincinnati Assur. Co. v. Rosenthal, 55 111. 85; ^tna Ins. Co. v. Harvey, 11 Wis. 394; Hoffman v. Banks, 41 Ind. 1; Tin. Cent. L. Ins. Co. v. Thomas, 46 Ind. 44; Bank v. Page, 6 Cr. 431; In re Corastock, 3 Sawy. C. C. 218; Sample v. Bank, 5 Ind. 88; Williams v. Cheney, 3 Gray, 215; Jones v. Smith, Id. 500. The case of Dudley v. Collier, supra, was under an act of 1887, which expressly made it un- lawful for a foreign corporation to do business without, etc., and imposed a penalty for a violation of the provision. But in a case arising imder the consti- tutional provision which existed prior to the act of 1887, containing a simple prohibition, it was held in the federal court that the contract, a mortgage of real estate, was not void but only voidable. Am. L. & T. Co. v. E. & W. R. Co., 37 Fed. Rep. 242. In another case it was held that where a contract of insurance is made and the policies issued in another state, it cannot be objected that the company tas not complied with the laws relating to foreign insurance companies doing busi- ness within the state where suit is brought. Marine Ins. Co. v. St. Louis I. M. & S. Ry. Co., 41 F.' 643. A statute which forbids, under a penalty, any foreign insurance company to do business in that state unless it has a certain amount of capital stock, and has obtained from the insurance commissioners a certifi- cate that it has complied with certain requirements, but which imposes no duty or prohibition on persons receiving policies from companies which have not complied with the law, does not render void a policy issued in violation thereof. Pennypacker v. Capital Ins.. Co., 80 Iowa, 56; -15 N. W. 408. See also Conn. River Mut. Fire Ins. Co. v. Way, 62 N. H. 622; Resenhouse v. Seeley, 72 Mich. 603; 40 K. W. 765; Hartford Fire Ins. Co. v. Raymond, 70 Mich. 485. Foreign corporations may be required to file with the secretary of state or territory in which it is carrying on business a copy of its articles of incorpora- tion duly authenticated. Hammer v. Garfield Min. & M. Co., 130 U. S. 291. § 90 IN STATE FOREIGN TO THAT OF CEEATION. 109 It is well settled that the corporation cannot itself take advantage of its non-compliance with such conditions. ^ § 90. Constitntional rights distinguished from rights by comity. — Independent of its franchises and corporate privileges, which may be recognized or not as suits the convenience and will in each state in the exercise of the law of comity, there are constitutional rights which belong to corporations and to individuals alike, and which can be .claimed in every state irrespective of the place of creation or citizenship. The exercise of a franchise may be absolutely refused, but rights guaran- teed by the constitution of the United States must be respected by every state as a matter of duty and not merely of comity. When a foreign corporation is required to file in the office of the secretary of state a statement in writing designating a place of business in the state as a con- dition precedent to the right to do business therein, an authorized agent of a foreign corporation which had not complied was denied the right to recover compensation from the borrower for services in securing a loan. Dudley v. Collier, 87 Ala. 431. Under a constitutional provision of Colorado denying foreign corporations the right to acquire and hold real estate until compliance with such conditions, it was held that a conveyance to a foreign corporation which had not complied was void, and that it might be collaterally attacked by a private person. Fritts V. Palmer, 10 Sup. Ct. Rep. 93. See also Utley v. Mining Co., 4 Colo. 369; Bankv. Matthews, 98X7. S. 621, 627; Bank v. Whitney, 103 U. S. 99, 103; Swope V. Leffingwell, 105 U. S. 3; Reynolds v. Bank, 112 U. S. 40.5, 412; Smith v. Sheeley, 12 Wall. .358, 361; Meyers v. Croft, 13 Wall. 295; Joues v. Indem- nity Co., 101 TJ. S. 622, 628; Fortier v. Bank, 112 U. S. 439, 451; Toledo Tile & L. Co. V. Thomas, 33 W. Va. 556; 11 S. E. 37. Compare Sprague v. Cutler & S. L. Co., 106 Ind. 242; 6 N. E. 835; Marinelns. Co. v. St. L., etc., Co., 41 F. 643. The failure of a foreign corporation to comply with the requirement of the Montana statute that all foreign corporations before doing any business within the territory shall file with the secretary thereof, etc., was held not to preclude it from suing to recover taxes paid under protest and alleged to have been illegal, such action not being based upon any act or contract of plaintiff in the conduct of its business. Powder Riv. Cattle Co. v. Custer County, 9 Mont. 145; 22 Pac. Rep. 383. 1 Tabor v. Gross & P. Mfg. Co., 11 Colo. 419; 18 P. 537; Singer Mfg. Co. v. Hardee, 4 N. W. 175; 16 P. 605; Kilgore v. Smith, 122 Pa. St. 48; 15 A. 698; Brooklyn L. Ins. Co. v. Bledsoe, 52 Ala. 538; Fritts v. Palmer, 10 S. Ct. 93; Am. L. & I. Co. V. E. & W. B. Co., 37 F. 242; Gull River L. Co. v. Keefe . (D.ak.), 41 N. W. 743; Hull v. Ins. Co., 79 Ga. 93; 3 S. E. 903. 110 IX STATE FOREIGN TO THAT OF CREATION. § 91 A state law directed against foreign corporations can- not impair contracts or deprive them of their property, without due process of law, nor levy a tax upon them which amounts to an interference with interstate com- merce.^ A statute which abolishes the rule of comity and re- fuses a recognition of foreign corporations has the effect of converting the corporators who have as an associa- tion exercised the forbidden corporate power into a co- partnership of individuals ; and thus although the cor- poration could not as such protect its contracts, property or rights, the members of the company would be under no such disability .2 "While the corporate entity is not a citizen in the same sense that natui'al persons are, and is therefore- incapable of protecting the constitutional rights and immunities guaranteed to citizens, the individual mem- bers or shareholders who compose it are undoubtedlj'" citizens of the United States and of their respective states, and entitled to all constitutional rights as such. For this reason the constitutional rights of a corporation can best be understood and determined by regarding it in its true light as an association of individuals rather than in its legal sense as a corporate entity.^ § 91. Corporations chartered in two or more states. — A ■corporation created by the joint act of different states is treated as a domestic corporation in each state under whose laws it is authorized. Its rights and duties are no greater or less than if it were in each state a different corporation of the same name ; and the relations of such 1 Erie Ky. Co. v. State, 31 N. J. L. 531. See Diamond Match Co. v. Roeber, 106 N. T. 473; 13 X. E. 419. ^ Erie Ey. Co. v. State, supra; State of Indiana v. Am. Express Co., 7 Biss. 230. ' Infra, ch. xxii. § 91 IN STATE FOREIGN TO THAT OP CREATION. Ill constituent corporations are governed by the same rule. Their corporate existence is not merged, but there is created only a unity of stock and interest.^ But it is held that the consolidation of foreign and domestic corporations creates a domestic corporation ;^ and that in such case the act of the legislature of the state of the foreign corporation confirming its ultra vires acts does not validate them.* A corporation chartered by concurrent act of two or more states is considered a citizen of each.* If sued in one of the' chartering states it cannot move the case to the federal courts on the ground of residence in the other.* Consequently a judgment against it in one of the states is conclusive upon it in the other or others.* 1 Farnum v. Blackstone Canal Corp., 1 Summ. 46. See also Quincy Bridge . Co. V. Adams County, 88 Dl. 615; Covington, etc., Bridge Co. v. Mayer, 31 O. St. 317. 2 Matter of Sage, 70 N. T. 220. See also Chicago E. R. Co. v. Minn., etc., B. E.. Co., 29 Fed. Rep. 337; Sprague v. Hartford & Providence R. R. Co., 5 E. 1. 233. 3 State V. North Central R. R. Co., 18 Md. 193; Fisk v. Chicago E. I. & Pac. R R. Co., 4 Abb. Pr. N. S. 378.' The same view is taken in the federal courts. Mullen V. Downs, 94 U. S. 445. See also Clark v. Barnard, 108 U. S. 436; Blackburn v. Selma M. & M. E. E. Co., 2 Flip. 525. It was held that by com- plying with the laws of Nebraska as to filing charter, etc., a foreign corporation became domestic; Stout v. Sioux City, etc., E. R. Co., 8 Fed. Rep. 794. Contra, Chicago, etc., R. R. Co. v. Minn., etc., R. R. Co., 29 Fed. Rep. 337. But not by the purchase of a railroad in that state. Chicago, etc., E. R. Co. v. Dakota Co., 28 Fed. Rep. 219. Nor does the mere authorizing a foreign corporation to do business ui the state, make it domestic. County Court v. Baltimore & O. E. R. Co., 35 Fed. Rep. 161; Baltimore & O. E. E. Co. v. Ford, 35 Fed. Eep. 170. * Quincy, etc.. Bridge Co. v. County of Adams, 88111. 615; Graham v. Boston, etc., R. R. Co., 118 U. S. 161, 168; Nashua & L. E. E. Co. v. Boston & L. E. E. Co. 19 Fed. Rep. 50; Ohio & Miss. Ry. Co. v. Wheeler, 1 Black 286; Horn& V. Boston & M.E. R. Co., 18 Fed. Rep. 50. 5 Union Trust Co. v. Rochester, etc., E. R. Co., 29 Fed. Rep. 609. "> Re United States Rolling Stock Co., 57 How. Pr. 16. 112 CONSOLIDATION. § 92 CHAPTE.R VI. POWER TO CONSOLIDATE WITH OTHER CORPORATIONS. § 92. Definitions and distinctions. 93. Results Involved. 94. Legislative sanction necessary. 95. Power in constating instruments. 96. Any member may prevent. 97. Rights of shareholders upon consolidation. 98. Succession of one corporation to property and rights of another. 99. Consolidation of several companies. 100. Subsequent sanction effectual. 101. Equivalent to formation of new company. 102. Whether consolidating corporations are dissolved. 103. What rights and franchises pass to consolidated company. 104. Effect upon exemption from taxation. 105. Construction of authority to consolidate. 106. Effect of consolidation upon municipal agreements to take stock. 107. Consolidation considered with respect to the rights of third parties. 108. Substitution and novation necessary. 109. Assumption of liabilities by new company. 110. Consolidation under general statutes. 111. Irregular consolidation. § 92. Definitions and distinctions. — There is amalga- mation or consolidation of one corporation with another when by consent ofits members it effects a complete trans- fer of all its property, interests and franchises to and be- comes completely merged in it, or in the creation of a new corporate entity by the consolidation of two or more corporations, which thereby abandon their original organizations and franchises, and transfer all their rights and interests to the new. It has sometimes been at- tempted to define and explain amalgamation and con- solidation as a result of distinct proceedings. The §§ 93, 94 COKSOLIDATION. 113 result of merger of one corporation into another, how- ever effected, is an amalgamation, and the same term may properly be applied to the result of two or more corporations, consolidating to form a new one, though the result is generally designated in the United States as a consolidation and in England as an amalgamation. The union of two or more corporations may be likened to either the welding of two or more malleable substances so as to form a distinct third, or of one into another whereby the latter retains its name and form, notwith- standing it has received an accession to and change of its substance and nature by the merger of the substance welded into it. Virtually and practically, the terms amalgamation and consolidation may be applied inter- changeably.^ § 93. Results involved.— The operation, when fully car- ried out, involves four distinct operations : 1. A de- struction of the entity of one or both the original corpo- rations ; 2. A transfer of corporate rights and liabilities ; 3. A transmutation of the members of one corporation into another or of the original corporations into a new one ; 4. Usually, a novation between the creditors of the original corporations and a substitution of the new one as debtor. § 94. Legislative sanction necessary. — A transfer of franchises or special privileges cannot be effected with- out express legislative sanction .^ The result is accom- 1 In Dongan's case, 28 L. T. N. S. 60, the court say: — " Two companies may be united, either by fusion into a third or by one absorbing the other. The former process seems to correspond most nearly with the popular sense of the word amalgamation, and 1 believe nobody really knows what amalgamation means. Whatever be the process, no shareholders in the company which it destroys, or of which it suspends the life, can become a shareholder in the other company without his personal assent." For another definition see In re Em- pire Ass. Co., L. K. 4 Eq. 341. 2 Ehymney E. R. Co. v. Taff Vale K. R. Co., SOL. J. Oh. 482; West London R. R. Co. V. London & Northwestern K. R. Co., 11 C. B. 327; Winch v. Birken- Lit CONSOLIDATION. § 9& plished by compliance with the conditions and formali- ties contained in the legislative enactment or with the terms provided in the constating instruments or unani- mously agreed upon by the members. But the pre- scribed methods must be strictly pursued whether con- tained in statutes or other instruments,^ and no member of either consolidating corporation can be bound by the proceeding without his consent thereto, somehow ex- pressed.2 Such statutes in so far as the right to con- solidate is sought under them are strictly construed. Parallel railroads cannot consolidate under a statute authorizing the consolidation of connecting lines.^ But when the right is plainly derivable from the statute, a liberal construction will be given to effectuate the objects intended by the consolidation. Power to con- solidate stock gives power to purchase and sell ; and power to construct implies power to purchase.* § 95, Power in constating instrnments. — ^But if the eon- stating instruments or general law contain a provision authorizing a consolidation with another company, this places the power in the hands of the majority to effect head, etc., K. R. Co., 7 Kail. Gas. -334; Northern K. K. Co. v. Eastern Counties R. Ei Co., 21 L. J. 837; London & Southwestern R. E. Co. v. Southeastern R. R. Co., 8 Ex. 584. See Johnson v. Shrewshury, etc., R. R. Co., 3 De G. M. & G. 914. 1 Brown v. Dibble, 65 Mich. 520; 32 N. W. 656. " Clinch V. Financial Corp. L. R., 4 Eq. 341; Bagshaw ex parte L. R., 4 Eq. 341; Hort's Case, 1 Ch. B. 307; Banlcof Hindostan v. Alison L. R., 6 C. P. 54, 222; Harman's Case, ib. 326; Doman's Case, ib., 21; In re Irrigation Co. of France, L. R., 6Ch. 176. 3 state V. Vanderbilt, 37 O. St. 590. See also Peoria, etc., R. R. Co. v. Coal Valley Co., 68 111. 489. * Branch v. Jessup, 106 U. S. 468. But power to sell to a corporation does not contain power to sell to an individual. Bird v. Bird's, etc., Sewerage Co., I,. R., 9 Ch. 358. See generally Hamilton Ins. Co. v. Hobart, 68 Mass. 54.S; Smith V. St. Louis, etc., Ins. Co., 2 Tenn. Ch. 727; Gardner v. Hamilton, etc., Ins. Co., 34 N.,Y. 420; Currier v. Concord R. R. Co., 48N.H. 321; Rivington's Case, L. R., 3 Ch. D. 10; Doman's Case, L. R., 3 Ch. D. 21; Wynne's Case, L. R.,8Ch. 1002. §§ 96, 97 COKSOLIDATIOK. 115 a consolidation which will be binding on all the mem- bers.^ § 96. Any member may preyent — But it is also well settled that corporations already formed without the existence of such statutory provisions, or express agree- ment at the time of their formation, cannot be consoli- dated without unanimous consent of their members, even though the legislature should authorize the con- solidation to be made ; for it would, if allowed, work a fundamental change in the contracts of membership.^ Without the consent of every member given through the charter or otherwise, an attempt to effect a con- solidation by a majority vote is wholly nugatory, and a single dissenting member may, by objecting, prevent the proposed change.' § 97. Rights of shareholders upon consolidation.— Where a naked power of consolidation is given by law, the parties to it may adjust the terms of consolidation with respect to the rights and liabilities of shareholders and creditors of each by agreement. Thus shares in one company may be issued in exchange for those in another, thus making the shareholders in one company the owners of all the shares in the other. Or if it is desir- able to preserve the legal identity of both companies, the united shareholders in both companies may be re- garded as shareholders in each corporation, both corpo- rations, however, acting under similar charters and under the same management. Corporations originally char- tered by different states are often thus united -under ^ Nugent V. Superiors, 19 Wall. 241. 2 Tuttle V. Michigan Air Line R. K. Co., 35 Mich. 247; Botts v. Simpsonville Tp. Co. (Ky.), 10 S. W. 134; Mowrey v. Indianapolis, etc., E. R. Co., 4 Biss. 78, 83; Clearwater V. Meredith, 1 Wall. 25, 40. 3 Lauman v. Lebanon, etc., R. E. Co., 30 Pa. St. 46; Black v. Delaware, etc., Canal Co., 24 K. J. Eq. 467; Knoxville v. Knoxville, etc., B. R. Co., 22 Fed. Ret). 758; Botts v. Simpsonville Tp. Co. (Ky.), 10 S. W. 134. 116 CONSOLIDATION. §§ 98, 99 legislative acts in each state into a single corporation. The new company by such means becomes invested with all the rights and duties of a corporation in both states.i And the new corporation in these cases is an aggre- gation of the interest of all the shareholders in the several corporations out of which it is formed. § 98. Succession of one corporation to property and rights of another. — The same object is attained by a corporation transferring all its property, funds, rights, liabilities to another, and then voluntarily dissolving itself as by amalgamation ; but there is an obvious legal difference in the means employed.^ Such arrangements are matters of internal manage- ment, consequently their validity and binding obligation upon dissenting members must be determined in each instance by the constating instruments. Probably in every ease express powers in this behalf are necessary in order that a corporation may itself enter into such arrangements, and bind its members without their con- current assent thereto.^ § 99. Consolidation of several companies. — When sev- 1 Racine, etc., K. E. Co. v. Farmers' L. & T. Co., 49 111. 349, 350; Quinoy Bridge Co. v. Adams County, 88 111. 619; Phil., etc.,K. E. Co. v. Maryland, 10 How. 376; Mead v. New York, etc., E. Co., 45 Conn. 199; Eatoli, etc., E. E. Co. V. Hunt, 20 Ind. 459; Gardner v. James, 5 E. I. 235; Maryland v. Northern Central Ey. Co., 18 Md. 193. 2 In re United Ports & Genl. Ins. Co. L. E., 8 Ch. 1002; Perrett's Case, L. E. 15 Eq. 250. ' Green's Brice's Ultra Vines, 2 Am. Ed. 614. Under articles of amalgama- tion and consolidation in which each original company granted to the new " all its property real and personal and mixed of every kind and description . . . con- tracts, agreements, claims . . . and all rights, privileges, franchises corporate, and otherwise, held, owned or claimed by said parties of several parts in possession or in expectancy either in law or in equity ... it was held that land granted by the government to the companies by an act declaring the purposes for which it was granted passed to the new company." Tarpey v. Deseret Salt Co. (Utah), 17 P., 631. §§ 100, 101 CONSOLIDATION. 117 eral corporations unite to form a new one, there is an implied transfer to it of the entire interests and all the effects of the original companies. There is also an im- plied undertaking on the part of the new organizations which it has succeeded. But in order that the new corporation may exercise the franchises of the old ones, it must have legislative sanction or authority for the purpose.^ § 100, Subsequent sanction effectual. — But a consoli- dation effected without previous authority of law may be rendered effectual and the new institution vested with, the franchises of its constituents by subsequent, legislation. Franchises, unlike property, cannot be transferred by agreement between the parties, however formal the transaction and whatever the consideration. They can be derived only through the legislature. " When the consolidation was completed, the old cor- porations were destroyed, a new one was created, and its powers were ' granted ' to it, in all respects, in the view of the law, as if the old companies had never ex- isted, and neither of them had ever enjoyed the fran- chises so conferred." ^ § 101. Equivalent to formation of new company. — The aggregation resulting from the consolidation of several companies does not differ in any respect, from other corporations in its constitution and nature and in the rules of law governing the construction and exercise of its powers.3 1 Pearcev. Madison, etc., R. R. Co., 21 How. 442; Aspiawall v. Oliio, etc., R. R. Co., 20Ind. 492; Clearwater v. Meredith, 1 Wall. 25; State v. Bailey, 16 Ind. 51. 2 Shields v. Ohio, 95 U. S. 319, per Swayne, J. 3 Shields v. Ohio, 95 U. S. 319. See Centr. Tr. Co. v. St. L. A. T. E. Co., 41 F. 551; Backijg v. Ey. Co., 71 Mich. 645; 39 X. W. 469; Prov. C. Co. v . Prov. & W. R. Co., 15 R. I. 303; 4 A. 394. Where railroad corporations consolidate, the articles of consolidation constitute the new articles of incorporation, and the persons therein named to act as directors are such until successors are 118 CONSOLIDATION. § 102 The terms upon ■which the members of the original corporations agree to associate in the new are generally to be gathered from several instruments instead of one as before. But the franchises which they are to enjoy in the united company are derived wholly from the general law or act authorizing the consolidation. It may describe the rights, powers and franchises of the new body in terms, or, as is most usually the case, it may refer to the charters of the old companies and expressly incorporate their provisions. § 102. Whether consolidating corporations are dissolved. — Dissolution of the original corporations does not nec- essarily result from their consolidation. Whether such dissolution occurs will depend in each case upon the legislative intent manifested in the act or general law under which the consolidation takes place. In Central K. R. & Banking Co. v. Georgia,^ Justice Strong said : " True, where three corporations had' consolidated under an act of the legislature, authorizing them to merge and consolidate their stock and make one joint com- pany, it was said that the effect of the act, and the terms of consolidation under it, was a dissolution of the three corporations, and at the same instant the creation of a new corporation, with property, liabilities and stock- elected. St. Cal. 1861; Civil Code Cal., sec. 473. California Southern R. Co. v. Southern Pac. E. Co., 67 Cal. 59; 7 P. 123. Pursuant to state authority, recog- nized by and made a part of the congressional grant of March 3, 1871, the Southern Pac R. R. Co., April 15, 1871, filed amended articles of incorporation; and August 12, 1873, filed, together -with the S. P.Branch R. R. Co., articles of amalgamation and consolidation, mider the name of the S. P. R. R. Co. Held, that while in one sense a new corporation was formed, each was substantially and practically the same S. P. R. K. Co., mentioned in the acts of Congress, and was so recognized by Congress, and that the articles of amendment, amal- gamation and consolidation were authorized by congressional as well as by state legislation. United States v. Southern Pac. R. Co., 45 P. 596; Same v. Colton Marble & Lime Co., Id. 1 92 IT. S. 665, referring to McMahan v. Morrison, 16 Ind. 172, and Clearwater V. Meredith,' 1 Wall. 40. § 102 CON SOLID AT lOK. 119 holders, derived from those then passing out of exist- ence." But the consolidation of separate corporations under general laws does not, at any rate, work an absolute cessation of their existence and powers for any and all purposes. A court of equity will, for purposes of con- venience and justice, consider such corporations still in existence and possessed of certain powers. Thus it was held that the transfer of the assets to a new company might be Specifically decreed according to the terms of consolidation against the oflScers of ones of the composite companies.^ Temporary suspension of operations and non-user of 1 Edison Electric, etc., Co. v. New Haven Electric Co., 21 Abb. N. Cas. 119. In Kohl V. Lillienthal, 81 Cal. 378; 20 P. 401 ; 22 P. 689, two mining companies compromised existing disputes and vexatious litigations by the formation of a new corporation in which they became the principal shareholders, and to which each conveyed most of its property. Jt was held that the original companies were not thereby dissolved and that they could not be dissolved except by the judg- ment of the superior court, upon proceedings instituted and conducted to that end as provided by statute. But under the Georgia and Ohio statute a different view is taken. Railroad Co. v. Georgia, 98 U. S. 359; Atlanta, etc., E. Co. v. State, 63 Ga. 483. See also Eaton v. Hamilton K. Co., 20 Ind. 457; State v. Bailey, 16 Ind. 46; McMahon v. Morrison, 16 Ind. 172; Clearwater v. Meredith, 1 Wall. 25, 40 ; Powell v. North Missouri E. E. Co. , 42 Mo. 63, etc. ; New Orleans, •etc., Co. V. Louisiana, etc., 11 Fed. Eep. 277; Charity Hospital v. New Orleans, etc., Co, (La.), 4 So. 433; Ohio, etc., Ey. Co. v. People, 120 111. 200; 14 N. E. Eep. 874. The effect upon the franchises differs in case of consolidation from that of a sale. In the former case all the franchises of the consolidating corporations are merged in the new. In Boardman v. Lake Shore, etc., Ey. Co., 84 N. T. 157, 181, the Court say: — " It is held that where two railroads are consolidated, as far as one of the creditors of one of the original companies is concerned, the consolidated company is the successor of the old company; but in respect to the properties of the other companies it is a new and independent company, and such creditor has no claim against it upon their original contract, but only by virtue of its assumjition of the obligations of the old companies." In Fee v. Gas Co., 35 La. An. 413, the Court say: — " The articles of consolidation and the legislative act by authority of which they were executed evidently present a case of complete and perfect amalgamation, the effect of which was, under American authorities, to terminate the existence of the original corporations, to create a new corporation, to transmute the members of the former into members of the latter, and to operate a transfer of the property, rights and liabilities of each old company to the new one." See also Green County v. Commrs., 109 U. S. 104. 120 CONSOLIDATION. § 103 franchises during a supposed consolidation subse- quently held by the courts illegal and void do not de- stroy or forfeit the corporate existence of either of the companies or affect its title to corporate property.^ § 103. What rights and franchises pass to consolidated company. — It is usually provided in the law authorizing a consolidation, that the new company shall be invested with all the rights and privileges previously enjoyed by the consolidated companies. But the franchises when acquired by the new company and adapted to its consti- tution, are not the same though they are similar to those enjoyed by the original corporations. ^ The new com- pany having been duly constituted, it stands upon the same footing as other corporations, and enjoys the same right to exercise both its express powers and the inci- dental powers usually implied\ And the extent of such powers and the manner of their exercise by the original companies is a proper measure of authority for the new.^ Upon the consolidation of a domestic with a foreign railroad corporation it was held that the new company acquired a privilege to receive subscriptions to the domestic company, made by a township, and that the issue of bonds by the township to the new company 1 state V. Crawfordsville, etc., Co., 102 Ind. 283; 1 N. E. 395. ' Bailroad Co. v. Maine, 96 U. S. 509. Under Ga. statutes, in order to give- a consolidated railroad corporation the right to acquire and hold lands granted in aid of the construction of the lines of both of two constituent companies, these lines must bear such relation to each other that when completed they may admit of the passage of trains over two or more of such lines continuously. Ga. Pac. Ry. Co. v. Wilks, 86 Ala. 478; 6 So. 34". See also Norwich & W. K. Co. V. Worcester, 147 Mass. 518; 18 N. E. 409. In Oushman v. Brownlee, (Ind. 1891), 27 N. E. 560, it was held that when a railroad company consolidates with another, title to its land vests in the latter. 3 Tomlinson v. Branch, 15 Wall. 460; Powell v. North Missouri E. R. Co., 42 Mo. 63; Green Coimty v. Conness, 109 U. S. 104; Zimmer v. State, 30 Ark. 680. See Rogers v. Oxford, etc. Ry. Co., 2 De G. & J. 662, per Mr. Justice Erie; Chicago, St. P. & K. 0. Ry. Co. v. K. C, St. J. & C. B. E. Co., 38 F. 58; Ga. Pac. R. Co. v. Wilks, 86 Ala. 478; Norwich & W. Co. v. Worcester, UT Mass. 518. § 103 CONSOLIDATION, 121 was lawful.^ A corporation by the same name may be chartered by two states, clothed with the same powers, and duties in both states ; but it will be two distinct corporations one in each state with only such corporate powers in each state as are conferred by its creation in that state.^ But while consolidating corporations of .two states are to be taken as one, yet that one has no legal existence in either state except by the laws of that state. ^ Among the franchises, property and rights which have been held to pass to a railroad company formed by the consolidation of several companies are that of taking land to build its road ; * of receiving a grant from the government provided by act passed before con- solidation ;^ of mortgaging its road ;® of charging a 1 Livingston County v. Portsmouth First Nat. Bk., 128 U. S. 102. See also Nugent V. Supervisors, 19 Wall. 241; County of Scotland v. Thomas, 94 U. S. 682; Town of E. Lincoln v. Davenport, 94 U. S., 801; Wilson v. Salamanco, 99 U. S. 504; Empire v. Darlington, 101 U. S. 87; Menasha v. Hazard, 102 U. S. 81; Harter v. Kemochen, 103 TJ. S. 562; County of Tipton v. Locomotive Works 103 U. S. 523. " Eeece v. Newport News & M. V. Co., 32 W. Va. 164; 9 S. E. 212; Farmers' Loan & Trust Co. v. Trust Co., 21 Abb. N. C. 104; IN. T. S. 44 ; Central Tr. Co. V. St. L., A. & T. Ry. Co., 41 F. 551. See also A. Backus v. Ry. Co., 71 Mich. 645; 40 N. W. 604. 5 Pittsburg & Sh. R. Go's Appeal (Pa.), 4 A. 385. In Fitzgerald v. Missouri Pac. Ry. Co., 45 F. 813 (April, 1891), it was held that in the conduct of its cor- porate business the consolidated corporation acts as a unit, — as one corporation, and not three; and, in the absence of a statutory provision to the contrary, it may transact its corporate business in one state for all, and the contracts it enters into and the liabilities it incurs in one state are binding upon it in all the states, and may be enforced against it in any one of them, when the action is transitory. But it was further held that such corporation is not the same in each state. While it is a unit, and acts as a whole in the transaction of its cor- porate business, it is not a corporation at large, nor is it a joint corporation of the three states. Like all corporations, it must have a legal dwelling-place, and it dwells in three states, and is a separate and single entity in each. It is,'in effect, a corporate trinity, having no citizenship of its own distinct from its con- stituent members, but a citizenship identical with each. * South Carolina E. E. Co. v. Blake, 9 Rich. 233. 5 Tarpey v. Deseret Salt Co. (Utah), 17 P. 631. « Mead v. New York & R. R. Co., 45 Conn. 109. 122 CONSOLIDATION. §§ 104, 105 fixed rate for transportation ; ^ of an exemption of the oflScers and servants of the companies from jury duty.^ § 104. Effect upon exemption from taxation. — Where the charter of one of the original companies exempts its property from taxation, such exemption cannot be ex- tended to any other property acquired by the consoli- dated company by the consolidation or to any subse- quently acquired ; but the property to which the exemp- tion applied would still be exempt.^ § 105. Constmctionof authority to consolidate. — The true construction of laws granting to corporations the right of consolidation subordinates such right to all the gen- eral laws in force at the time of consolidation.* And a provision of law or in a charter or in articles of associa- tion authorizing a consolidation and transfer of rights, franchise and property, to the new organization, refers to those owned and possessed at the time of consolida- tion and to no others.^ 1 Fisher v. New York Central, etc, R. K. Co., 46 N. T. 644. 2 Zimmer v. State, 30 Ark. 680. 8 Phil., etc., K. E. Co. v. Maryland, 10 How. 376; Branch v. City of Charles- ton, 92 17. S. 677; Tomlinson v. Branch, 15 Wall. 460; City of Charleston v. Branch, Id. 470; Central R. R. Co. v. Georgia, Id. 665; Chesapeake, etc., R. R. Co. V. Virginia, 94 U. S. 718. * A new corporation resulting from consolidation under statutes authorizing and consenting to Its organization is not subject to a constitutional provision previously adopted, providing "a majority of the directors of any railroad cor- poration now incorporated or hereafter to be incorporated, by the laws of this state, shall be citizens and residents of this state." O. & M. By. Co. v. People, 120 111. 200; 14 N. E. 874. ^ An interesting and instructive exposition of the law on this subject is found in the decision of the Supreme Court of the United States in St. Louis, etc., R. R. Co. V. Berry, 113 U. S. 475. It came up on a writ of error to review the action of the Supreme Court of Arkansas in refusing to restrain officers of that state from levying a tax on property of plaintiff in error. The charter granted by the state of Arkansas to one of the two consolidating companies contained a provision authorizing it to consolidate with other com- panies. Another provision exempted the road and all the property of the com- pany from taxation. The company receiving this charter at length consolidated Tsrith the St. Louis Iron M. & S. R. E. Co. ; but before the consolidation and § 106 CONSOLIDATION. 123 § 106. Effect of consolidation upon municipal agreements to take stock — A county authorized, by law to subscribe for shares in a railroad company which is afterwards consolidated with another company is entitled to sub- scribe for shares in the new company in place of the original.! But when it is proposed that a county shall take stock in a company, and the law requires a proposition to that effect to be approved by a two -thirds vote of the qualified voters, and after such vote is taken the company consolidates with another company, there must be a new submission and a new adoption of the proposed subscription before it can be made in the new company resulting from such consolidation.^ But where by the same act authorizing a city to lend its credit to each of two railroad companies, power to con- solidate their roads was given to the companies, it was held that the city might exercise the power so given it as well after such consolidation as before.^ The after receiving its charter, tlie state of Arkansas adapted a new constitution in which provisions were inserted that all corporation laws passed thereafter should he subject to a reserved power of alteration and repeal, and that " the property ; Scotland v. Thomas, 94 U. S. 682; Chesapeake & Ohio K. K. Co. v. Virginia, lb. 718; Peoria & Kocli: Island K. R.. Co. v. Coal Valley Mining Co., 68 111. 489. The right of creditors who have not consented to a consolidation to follow the property of a debtor corporation into the hands of the new company is well set- tled. See Railroad v. Rollins, 82 N. C. 523; Marshall v. Western, etc., R. R. Co., 92 N. C. 322; Toung v. Rollins, 35 Id. 485. lufra, § 709 et seq. 2 Miller T. Lancaster, 5 Caldw. Tenn. 514. SeePainev. L. E., etc., R. Co., 31 Ind. 283. 8 Wabash, etc., R. R. Co. v. Ham, 114 U. S. 593. See G. C. & S. F. Ey. Co. V. Morris, 67'Tex. 692; 4 S. W. 156; Shaw v. Norfolk Co. E. E., 16 Gray, 407; 126 CONSOLIDATION. § lOtJ It is usually provided by statute that the consolidated company shall become liable for the debts and obliga- tions of the original corporations. Since even in that case the new corporation cannot be substituted for the original debtor, without the creditor's consent, the legislature may authorize a substitution and novation on terms less favorable to the creditor than before existed, and he will,, by consenting to the substitution, accept the terms and conditions thus imposed.^ § 109. Assumption of liabilities by new company. — It is usual, however, in arrangements for a consolidation, to make satisfactory provisions for the payment of the Western Un. E. Co. v. Smith, 75111. 496; Prouty v. Lake Shore, etc., E. E. Co., 52 N. Y. 363; Selma, Eome, etc., E. E. Co. v. Harbin, 40 Ga. 706; Houston, etc., E. E. Co. V. Shirley, 54 Tex. 125; Vilas v. Page, 306 N. Y. 439; 13 N. E. 743; Warren v. Mobile, etc., E. E. Co., 49 Ala. 582; Welsh v. First Dlv. of the St. Paul, etc., E. Co., 25 Minn. 314. 1 Deposit B'k v. Barrett (Ky.), 13 S. W. 337. But where a consolidation wa& made under statutory authority on the basis of equality between the shares or the two corporations and plaintlS held bonds issued by one of the corporation* convertible into its stocks on completion of its road, it was held that they wer& entitled to demand stock in the new corporation, as for the purposes of this con- tract the old corporation continued under the new name. Day v. W. N. & E. R. Co., 151 Mass. 302; 23 N. E. 824. The N. Y. Stat. 1869, C. 917, sec. 5, gives- right of action against an original corporation after its consolidation. Gale v. Troy & B. E. Co., 51 Hun, 470; 4 N. Y. S. 295. A statute consolidating two corporations provided that the new corporation should "be subject to all the duties, restrictions, obligations, debts, and liabilities to which, at the time of the union, either of said corporations is subject," and that "all claims and con- tracts . . . against either corporation may be enforced by suit or action . . . against the" new corporation. The consolidation was made on the Ibasis of equality between the shares of the two corporations. Plaintiffs held bonds, issued by one of the corporations, convertible into its stock on comple- tion of its road. It was held that they were entitled to demand stock in the new corporation, as for the pul^poses of this contract the old corporation con- tinued imder the new name. India Mut. Ins. Co. v. Worcester, N. & E. E. Co. (Mass.), 25 N. E. 975; Sweet v. Same, Id. Laws N. Y. 1869, c. 917, § 5, authorizing the consolidation of railroad com- panies, and providing that all debts and liabilities of either company, except mortgages, shall attach to the new corporation and be enforced against it and its property to the same extent as if created by it, allow an action against the new company on bonds and coupons of one of the former companies, though they are secured by a mortgage on the property of the original debtor corpora- tion. Affirming, 3 N. Y. S. 327. Euger, C. J., and Earl and Finch, JJ., dissenting. Polhemus v. Fitchburg E. Co., 123 TS. Y. 502; 26 N. E. 31. § 109 coNsoiiiDATiojsr. 127 debts of the respective companies.* The acceptance of the arrangement and of the resulting corporation for the original debtor may be evidenced as well by con- duct and acquiescence as by express agreement.^ However, until there is some manifestation of assent on the part of the creditor, the consolidated corporation is under no obligation to consider itself the principal debtor. And it is sometimes a task of construction to determine from the act authorizing the consolidation or from the terms of the mutual agreement respecting creditors, whether prior debts are assumed by the new company .3 1 As in Columbus, etc., R. E. Co. v. Powell, 40 Ind. 37; Indianola E. E. v. Fryer, 56 Tex. 609; Indianopolis, etc., R. E. Co. t. Jones, 2i Ind. 463; Louis- ville, etc., E. E. Co. T. Boney, 117 Id. 501; 20 N. E. Eep. 432; Montgomery, etc., E. R. Co. V. Boring, 51 Ga. 582; Thompson v. Abbott, 61 Mo. 176. 2 In Morgan v. Overman S. M. Co., 37 Cal. 534 two corporations had com- promised litigation pending between them by the defendant company in the action transferring all its property to plaintiff company, whereupon the latter assumed all the debts of both. A creditor of the defendant corporation sued plaintiff without previous express acceptance of plaintiff in lieu of defendant as his debtor. It was held that the bringing of the suit was of itself sufficient evidence of acceptance by the creditor of the terms of the compromise. See also Fleming v. Alter, 7 Searg. 294; Vilas v. Page, 106 N". Y. 439; 13 IS". E. 743; Gay V. Thompson, 1 Johns. Ch. 32 ; Dearborn v. Park, 5 Me. 81 ; Felton v. Dick- inson, 10 Mass. 289; Schemetham v. Vanderheyden, 1 Johns. 139; Jackson v. Pearce, 10 Johns. 418; Arnold v. Lyman, 17 Mass. 404. ' Upon the consolidation of three railroad companies under act of the legisla- ture, it was provided that all the property of each of the companies thus united should become vested in the new corporation subject to the rights, demands, liens, etc., of creditors whose right to resort to the property thus vested for satisfaction of their claims was thus preserved; and that "all the franchises, property, powers, and privileges now enjoyed by, and all of the restrictions, liabilities and obligations imposed upon, said corporations by virtue of their respective charters, shall appertain to said united corporations, in the same manner as if the same had been contained in or acquired under an original charter." It was held that the new corporation was not bound primarily to pay the debts of the original corporations and that the new company might pur- chase outstanding bonds of the old companies and hold them like other credi- tors, or pay and extinguish them, thereby relieving the property held by it. Shaw V. N'orfolk E. E. Co., 16 Gray, 407. See Indianopolis E. E. Co. v. Fryer, 56 Texas, 609; People v. Empire Mut. Life Ins. Co., 92 IST. Y. 105; Deposit B'k V. Barrett (Ky.), 13 S. W. 337. No doubt the corporation would have been held liable in this case as a trustee if the action had been brought in proper form to so change it. 128 CONSOLIDATION. §§ HO, 111 The liability of the new corporation in the absence of an express agreement has often been asserted.^ And nearly as often denied.^ § 110. Consolidation under general statutes — Very few states have provided by general law for the consolidation of all corporations ; but most of them have prescribed how railroad corporations, and, in some instances, other corporations may consolidate.^ § 111. Irregular consolidation — But even without ex- press authority under general provisions, for forming corporations, there is nothing to prevent two corpora- tions wishing to unite their business, abandoning their original enterprises by unanimous consent of their re- spective members, and filing new articles of association. The same object is effected by one corporation that wishes to join another transferring all its property and business to the latter and continuing to carry out its purposes under the name of the latter.* 1 Prouty V. Lake Shore, etc., Ey. Co., 52 N. T. 363; Chase v. Vanderbilt, 37 N. T. Sup. Ct. 384; Shaw v. Norfolk County K. K Co., 16 Gray, Mass. 407; Powell V. North Mo. K. K. Co., 42 Mo. 63; Town of Plainview v. W. & St. P. E. Co., 36 Minn. 505; 32 N. W. 745. Compare Selma, etc., E. R. Co. v. Harbin, 40 Ga. 709; Montgomery, etc., E. E. Co. v. Boring, 51 Ga. 582; Bruffett v. Gt. Western E. E. Co., 25 111. 357; Boardman v. Lake Shore, etc., Ey. Co., 84 N. Y. 157. 2 Thompson v. Abbott, 61 Mo. 177; Indianapolis & E. Co. v. Jones, 29 Ind. 465. See Columbus & Ey. Co. v. Powell, 40 Ind. 40; Mt. Pleasant v. Beck- with, 100 U. S. 514. * Though statutory authority exist for a consolidation, and two or three or more corporations agree to consolidate, there can be no valid consolidation of two if the third afterwards refuses to enter the corporation without a new agree- ment between the two. See Gould v. Seney, 9 N. Y. S. 818; 7 Ey. & Corp. L. 143. It is not important as affecting complete valid consolidation that the new corporation has failed to comply with a provision of general law requiring each company to file with the secretary of state a resolution accepting the provisions of the act if they have complied with all the other important provisions, such provisions being merely directory. Leavenworth Co. v. C. E. I. & P. Ey. Co., 134TJ. S. 688; 10 S. Ct. 708. * This method of effectively transferring the f "ainchises and property of a cor- poration to another without literal legality is thus described by an English author. " A corporation is an existence, owl:ig all its qualities, powers and § 111 ■ CONSOLIDATION. 129 And if the corporation to which it accedes does not possess the requisite powers under its charter or articles, the statute furnishes the fullest facilities for amend- ment. However, no such transfer and combination can be effected with less than unanimous consent of the members, and the claims' of creditors will in no case be allowed to be defeated or jeopardized by such trans- actions/ capacities to the law. The law wliich calls it into being has also appointed the manner in which its existence shall be determined, but it has not been said that it may commit civil suicide. In whatever mode, by surrender or forfeiture of cliarter, by winding up, etc., a corporation be ended, it is found that the law, i.e., the state, intervenes. A corporation is something distinct from its members ; all these may leave it, yet it still exists. How, then, is it possible that "any ac- tion of theirs, unrecognized by the law, can destroy that which depends for its origin and continuance on the law alone ? But though a corporation cannot directly jjut an end to its existence, and merge it, by any process of amalgama- tion, in that of another, yet it may accomplish this in an indirect and circuitous manner. It may do so by transferring its property, funds, rights and liabilities to the other contracting corporation, and then voluntarily dissolving itself, usually by winding up. Generally, the arrangement is supplemented by a pro- viso, whereby the transferee, the purchasing company, indemnifies the . selling company against the liabilities which it may be under in respect of claims, ex- isting or prospective. This, after all, is not an amalgamation. It is not a union of one corporation with another, but is simply a transfer of assets, with attendant responsibilities. It is, however, a sufficient amalgamation for all prac- tical purposes." Green's Brice's Ultra Vires, 2d Am. Ed., 608. ' The case of Miners Ditch Co. v. Zellerback, 37 Cal. 543, is a case in which two water companies had abandoned their respective organizations, formed a new corporation under a new name and conveyed all their property to it. The right of the plaintiff to enter into an arrangement for such a complete transfer ■of property as was put in evidence in that case was not directly in dispute, as the decision tiuned on a question of implied authority in the officers of the cor- poration. It is clear, however, that the uniting of property rights merely by two or more corporations under new articles and a new name does not involve a sale of the franchise. But unless assented to by every shareholder it would be a diversion of funds for unauthorized purposes, and would entitle single dissenting shareholders to an injunction to restrain and prevent. But as appears elsewhere, a transfer of the entire corporate properly and even a consolidation, may be pro- vided for in the articles under general laws or in the ch^ter. Supra, § 94 9 130 ILLEGAL COMBINATION. § 112 CHAPTER VII. COMBINATION WITHOUT CONSOLIDATION — LEGAL BESTBIOTIONS. § 112. Scarcity of definitions. 113. The term does not apply in all cases of combination. 114. The purpose difScult of ascertainment. 115. A " trust," " forestalling" and " cornering," distinguished. 116. Legal supervision and control. 117. Corporations offer facilities for organizing " trusts." 118. Forms assumed. 119. " Tying up " stocks. 120. Pooling arrangements. 121. When quo warranto proceedings 'will lie. 122. The law against perpetuities. 123. The placing of property in trust usually lawful. 124. Mutation of beneficiaries allowable. 125. What constitutes restraint of trade. 126. General view. 127. Conclusion. § 113. Scarcity of definitions — The question. What is a trust? in the offensive or illegal sense, cannot be answered with a satisfactory definition, and few legal principles applicable to the subject are, as yet, clearly established.^ It may be said, in a general way, that 1 Illegal combinations known as "trusts" have come so recently, have as- sumed so many shapes, and have been employed in so many departments of in- dustry and commercial enterprise, and have multiplied so rapidly, that the juris- prudence of the country has not, as yet, had time to formulate new rules by which- they may be reached and controlled. Although numerous cases have been passed upon by the courts, after able arguments and expositions by coun- sel, they fail to furnish the profession any new principles of general application. Consequently it is difficult to lay down, any general rules as an imerring guide to the legal mind In deciding under what circumstances a so-called " trust " would be amenable to the process of a court to redress a public grievance arising from its character as such. Although no set phrase or regular formula by which to define a " trust" has been accepted or agreed upon, yet all have a general under- standing that it is some form of combination among capitalists to destroy com- § 113 ILLEGAL COMBINATION. 1?,1 when individuals conspire or come to a common under- standing, and unite their capital for an unlawful pur- pose, their agreement is void ; but every such statement iavolves the assumption of an unlawful purpose, and- thus deprives it of any definitive or descriptive value.^ § 113. The term does not apply in all cases of coniMnation, — A combination of capital and effort in pursuance of a mutual agreement by a number of individuals or corpo- rations is neither unlawful nor immoral in itself, although the result of carrying out the agreement be the destruc- tion or exclusion of competition.2 If it were, interstate railroads could seldom be built, except in violation of law, and many other great undertakings of lesser magni- petition and increase the profits in any particular trade or industry. And the notion also prevails in the public if not the professional mind, that such a com- bination is necessarily inimical to public interests. 1 The popular theory that every unification of several individuals or corporate enterprises brought about to secure immunity from injurious competition is per se hostile to common right and prejudicial to public welfare may be correct when asserted concerning a fliajority of " trusts," but Its correctness is not sufficiently universal to establish the affirmation as a rule. The methods by which that form of "trusts" is formed by the combination of several corporations, where shares are issued to represent the constituent interests, are thus stated by a con- gressional committee in a report to congress, on the Standard Oil and other " trusts." " There exist a certain number of corporations organized under the laws of the different states and subject to their control. These corporations have issued their stock to various individuals, and these individual stockholders have surrendered their stock to the trustees named in the agreements creating these trusts, and accepted in lieu thereof certificates issued by the trustees named therein. The agreements provide that the various corporations whose stock is surrendered to the trustees shall preserve their identity and carry on their busi- ness." 4 Ey. & Corp. L. J. 98. 2 A contract between rival and competing railway companies made for the purpose of preventing competition, but noc for the purpose of raising the prices of transportation above a reasonable standard, is not void as against public policy. Manchester & L. R. R. v. Concord R. E., (N. H.) 20 A. 383; holding also that Act N. H., July 5, 1867, forbidding the consolidation of competing rail- ways renders illegal any contracts whereby the road-bed, rolling stock, and equipments of one competing line is to be operated and controlled by another. Street railways, though parallel, cannot be "competing" in the sense of the mischief intended to be prevented, and a statutory prohibition relative to the consolidation of parallel and competing railways does not apply to them. Ap- peal of Montgomery (Pa.), 20 A. 399. 132 ILLEGAL COMBINATION. § 114 tude would fail or not be attempted. The character of ownership of railroads and many local enterprises is necessarily monopolistic. Moreover, they are usually carried on by combinations of individual or corporate capital. And yet they are not only tolerated but en- couraged, and sometimes subsidized by nations, states and municipalities. § 114. The purpose difficult of ascertainment. — If the real, purpose were always, or even generally, the ostensible purpose, there would be but little difficulty in dealing with illegal trusts. Suppose, for illustration, the members of corporations engaged in the steel rail industry form a new corporation to engage in the same business done by the original corporations, and the transaction presented no other phases. The best evi- dence of their intentions, and generally the only available evidence, would be their articles of association, which would disclose nothing unlawful. Suppose it could be proven that the method by which the business was to be made successful was for the aggregate membership of each consolidating corporation to take a proportionate share of interest and of profits and all become subject to a common management so as to reduce the expenses, and, by thus escaping each other's competition, increase profits. There surely is npthing unlawful in the mono- polistic sense either in providing economical manage- ment or in securing profitable business. Such arrange- ment may, however, subject the combining corporations to quo warranto proceedings on the ground that their acts are ultra vires, as we shall see further on. If the law authorized a court to prevent two or more individuals from consolidating their business in order to increase their profits, the same law would compel them to continue business in separate establishments, after such business had ceased to be profitable, or prevent § 114 ILLEGAL COMJilNATION. 133 them from disposing of their stock and fixtures to a rival establishment. By so doing, it would inflict upon them a loss of their investments, because, forsooth, the public welfare required that there should be competi- tion/ And if a court cannot do the latter neither can it de- cide what consideration the parties shall accept, whether a fixed sum or an interest in the new establishment. The remunerative employment of capital is the object of much legislation ; and the co-operation of different members of society in the investment of capital is the incitive policy which justifies the legalizing of corporate bodies. But a different rule applies to corporations owing dnties of a strictly public nature. To buy up the stock of a rival gas company is not a " lawful purpose " for which a corporation may be formed. Its essential re- sult is the creation of a monopoly.^ And though cor- porations owe no public duties, if the palpable and only object of the transaction is the suppression of competi- tion, which result is sought not by absorbing the prop- erty of a rival company, but by suspending its opera- tions for a time or indefinitely, it will be deemed an 1 In Moore & Handley Hardware Co. v. Towers Hardware Co., 87 Ala. 206; 6 So. 41, it was held that a contract hy which one of the companies hound itself not to handle plow stocks and hlades in the territory including and north of Birmingham, Ala., in competition with or in opposition to the other, was reason- able and valid. See also Hubbard v. Miller, 27 Mich. 15; Curtis v. Gokey, 68 X. Y. 300; Warfleld V. Booth, 33 Md. 63; Dethlifs v. Townsend, 7 Daly, 354; Beal V. Chase, 31 Mich. 490; Morse Machine Co. v. Morse, 103 Mass. 73; O. S. Nav. Co. V. Winsor, 20 Wall. 64. ■^ People -v. Chicago Gas Trust Co., 130 111. 268, 22 S. E. 798; holding that a corporation cannot be formed "to purchase and hold or sell the capital stock of any gas or electric company in Chicago or elsewhere in 111.," because the accom- plishment of such object would tend to create a monopoly. State v. Nebraska Distilling Co. (Neb.), 46 N. W. 155; Richardson v. Buhl, 77 Mich. 632; 43 N. W. 1102; Pittsburg Carbon Co. v. McMillan, 23 Abb. N. C. 298; 6 N. Y. S. 433; People V. Eefining Co., 54 Hun, 354; 7 N. Y. S. 406; Langdon v. Branch, 37 Fed. Hep. 449. See also Gould v. Head, 38 Fed. 886; Gibbs v. Consol. Gas Co., 130 U. S. 396. Compare Leslie v. Lorillard, 110 N. Y. 519; 18 N. E. 363. 134 ILLEGAL COMBINATION. § 115 illegal combination subjecting charters of the offending corporations to forfeiture.^ § 115. A " trust," " forestalUng " and " cornering," distin- guished. — The principles appertaining to the common law offense of forestalling have frequently been referred to and attempts have been made to apply them to this modern invention ; but there is really only a resemblance and no legal analogy between them. To forestall the market was only possible where the sources of supply and production were barely equal to the demand, and had reference to buying up in advance what others pro- duced or were to produce, and by this means creating a scarcity and securing an advance price.^ "Corners" in the stock and produce markets are offenses similar to forestalling, but they are not the same. While the public are incidentally injured by them, the immediate victims and greatest sufferers are persons who have "sold short" after all the products or particular class of stocks have been bought into the pool or " cornered."^ The criminality of forestalling consisted as much in the fact that it took the community by surprise as that it created a monopoly. It was temporary in its effect 1 state V. Nebraska Distilling Co., 7*7 Neb. 632; 46 N. W. 155; Am. Pre- servers' Trust Co. V. Taylor Mfg. Co., 46 F. 152. A court will not enforce such a contract as between the parties thereto. Richardson v. Buhl 77 Mich. 632; Pittsburg Carbon Co. v. McMillan, 23 Abb. N. C. N. T. 298; Gould V. Head, 38 F. 886. In a suit against a corporation formed by the con- solidating of two gas companies brought about for the pm-pose of disabling one of them from competing with the other and of increasing the price of gas con- sumed in the city of Baltimore ; the whole controversy turned on the legality or illegality of the combination. It was held that the arrangement thus brought about was Illegal even if there were no statute prohibiting it, and that the consider- ation for the services performed partook of such illegality so that he could not recover. Gibbs v. Baltimore Gas Co., 130 U. S. 396. 2 2 Cooley's Bl. 169. « " Corners " are fraudulent, illegal and void. Sampson v. Show, 101 Mass. 145; Eaymond V. Leavitt, 40Mich. 447; and any one injured by its being organ-' ized may recover in equity money exacted from him through its operations. Barry v. Croskey, 2 J. & H. 1. |§ 116, 117 ILLEGAL COMBINATION. 135 and necessarily local in its operations, while the institu- tions we are considering must be successful, if at all, in the future, and by reason of their permanence. Nor are " trusts " identical with middle-age monopolies, such as existed in the Elizabethan era as described by Lord Coke.^ § 116. Legal supervision and control. — The attendant circumstances must be rare indeed which will give an individual suitor a standing in a court of law or equity on the sole ground that such a combination has been entered into. Constitutional provisions could generally be successfully invoked for the protection of the alleged wrongdoer. Any public wrong done by a trust, must be a wrong to the state, and any remedy must be one devised and enforced by virtue of state authority to enforce police regulations unless the aggrieving party be a corporation, and be guilty of an abuse of its fran- chises. The state may attach criminality and forfeiture of rights and privileges to the doing of almost any busi- ness or specific act ; but as there are few kinds of business enterprise in which capital may not profitably combine under favorable circumstances, it would require more ingenuity and statesmanship than any legislator or body of legislators possesses to formulate a system of regulations on this subject which would not either fail of its objects from inherent weakness or work great inequality and injustice as well as public injury. § 117. Corporations offer facilities for oi^auizing "trusts." — To the facts that the capital of corporations is usually represented by shares of stock having an ascertainable market value, and offering a permanent form of investment, which requires only slight personal 1 Case of the Monopolies, 11 Coke, 84. 136 ILLEGAL COMBINATION. § 118 supervision and attention by the owner, and that the stock furnishes a certain and convenient basis for calcu- lating the separate interests, is attributable the fre- quency with which corpora,tipps bp^ppa^jthe integers in, these trust arrangements. And because of the unchange- able nature of corporations and their freedom from acci- dents, to unexpectedly terminate their existence, which are the inseparable conditions of life of a natural person-, the trust itself frequently assumes the shape, if not the legal status, of a coi-poration. But when so formed, it need not and generally does not present any phases or features not found in other corporations engaged in the same department of trade or industry. This similarity to ordinary corporate methods has presented insuper- able obstacles in many cases in which it was sought to reach and deal with them,^ § 118. Forms assumed. — It may be safely asserted that all the trusts which have attracted attention in the United States have assumed one of three forms of or- ganization : — 1. The conveyance of the property and business of several corporations or individuals to an in- corporated board of trustees, and the acceptance from it of shares in the common concern in return for the shares or interest in the uniting corporations or establishments 1 When a number of individuals associate themselves together, and become incorporated for the purpose of manufacturing or dealing in an article for gain, it is an inseparable incident of the power conferred by the charter or law, under which they have become incorporated, that they shall employ all means whicli are not unlawful to carry out the objects of the incorporation, the real essence and finality of which is the realization of profits. Law makers might specify certain acts and declare them to be unlawful and punishable or a ground of forfeiture of the corporate franchise. But if the acts so specified are the means best adapted to the successful exercise of the franchises of corporations, their charters would be self-defeating and inoperative to such an extent, that individuals would not care to become incorporated and incur the coiiesponding risk. The formation of corporations would consequently cease, and the accomplishment of projects requiring aggregations of capital wouUl be no longer possible. § 118 ILLEGAL COMBINATION. 13T at an agreed valuation or proportion. 2. A similar conveyance to an individual or to several individuals, or to an existing corporation formed for the purpose, in trust, and a similar exchange and substitution of shares as in the first mentioned plan, except that in the latter case the " trust " becomes a partnership or common law joint-stock association or ordinary trust, 3. The or- ganization of a combination by several corporations or individuals engaged in a particular line of business, by the terms of which one or more of their number is to either lease at a given rental or manage for a proportion- ate share of the profits all the establishments without decapitalization or substitution of shares of stock in the common concern for those of the constituent corpora- tions. The plan is sometimes varied to meet peculiar situa- tions and requirements, but most of the combinations complained of by the public may be placed in one or the other of these classes.^ ' " Trusts " in form of corporation. The American Loan & Trust Co., a ear trust whose plan of operations was exhibited in the case of Kicker against the same, 140 Mass. 346, was a case of a corporation acting as a trustee of a car trust organized by corporations. It was held to be a partnership in the nature of a joint-stock company, and the trustee (the corporation) the legal owner of the partnership property. The consolidated Rolling Stock Company of Conn., a corporation whose plan was shown in Mills v. Barb, 29 Fed. Kep. 410, was the result of a joint effort of several corporations engaged in manufacturing and furnishing cars to railroads. See also Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. St. 17-3. Illustration of second class. The American Cotton Seed Oil Trust, which was the defendant in a proceeding by quo warranto brought by the State of Louisiana, was an instance of an unincorporated association of individuals becoming trus- tees of the uniting companies. State v. American Cotton Seed Oil Trust, 40 La. Am. 8; 1 Ry. & Corp. L. J. 509. The modus operandi of this enterprising in- stitution is thus described in the petition embodied in the opinion: — " The pe- tition alleges that the defendant association was formed about two years since in the city of New York, with a president, two vice-presidents, secretary and treasurer; that the agreement under which the said concern was organized, together with its by-laws, is kept a profound secret; that the trust is a gigantic monopoly formed for the purpose of acquiring and controlling the various cotton seed oil mills existing and operating in the different states of the South, for the purpose of depreciating the value and price of cotton seed and increasing the 138 ILLEGAL COMBTNATIOK. § 119 § 119. " Tying np " stocks. — There is still another form ■of combination which, from the fact that it suppresses opposition and seeks to succeed by combination of interests, resembles a " trust ; " and from the fact that it seeks to temporarily " squeeze " the market resem- price of the products thereof, formed by process of manufacture; that the trust has withm the past year acquired a majority of the stock in the several corpora- tions organized and operating in this state, under the laws thereof, for the pur- pose of purchasing cotton seed, the mannfactiu-ing therefrom cotton seed oil, soap, oil-cake and other articles of commerce; that the trust acquired the ma- jority of the stock in said corporations at a premium and advance thereon, and have elected directors and are controlling and operating said cotton-oil mills, the property of said corporation, solely for the interest and benefit of said illegal association ; that in making said exchanges the said trust illegally fabricated, manufactured and Issued certificates purporting to represent shares in the equity to the property held by the trustees of the American Oil Trust; that the trust monopoly has succeeded in reducing cotton seed from $14 per ton to $8 per ton, and in increasing seed products more than fifty per cent in price; that the trust has closed two mills in this state; that the trust, although a foreign association, carries on business in this state without having anyplace of business therein, or any known agent upon whom process may be served ; that the trust has obtained no license or permit, has paid no taxes either to the state or city government, and is without right to carry on business in this state." Illustrations of third class. The elements of a trust are scarcely perceptible in the third form of combine, audits objects, whether given publicity or not, are almost invariably to control and aSect the market abnormally in the interest of the contracting parties. Such being the case there is no doubt of the illegality of the agreement as between the parties to it. But that fact is available only as a defense as between them, and affords no relief to the public, who are the principal sufferers from the unlawful combine. The decisions holding the ille- gality of trusts because in restraint of trade and against public policy have been principally cases arising out of the third form — suits between parties in pari delicto. A fairly representative case is that of Santa Clara Val. M. & L. Co. v. Hays, 76 Cal. 387, 391; 18 Pac. Rep. It was an action to recover $10,000 for a breach of a contract entered into between plaintiff, a corporation, and defendants, who were engaged in the manufacture of lumber near Felton, in the county of Santa Cruz, whereby the latter agreed to make and deliver to the former, during the lumber year of 1881, 2,000,000 feet of lumber at $11 per thousand feet. De- fendants agreed not to manufacture any lumber to be sold, during said period, in the counties of Monterey, San Benito, Santa Cruz or Santa Clara, except under the contract, and to pay plaintiff $20 per thousand feet for any lumber manufactured and sold to parties other than plaintiffs. Defendants failed to comply with the contract; hence the action. The court found that plaintiff was.the owner of three saw-mills near Felton, and that various other parties were likewise owners of similar mills in the same vicinity; that for the purpose of limiting the supply of lumber, and increasing the price thereof, a plan was de- ■vised by which plaintiff was to lease all the mills for the year 1881 where such § 119 ILLEGAL COMBINATION. 139 bles a " corner," and yet is neither ; or, if we choose to call it so, is either. It consists in " tying up " the stock of a particular corporation for speculative purposes. Various schemes have been resorted to and devices employed for doing this. Sometimes " irrevocable " proxies are obtained lease could be obtained, and, where that could not be done, to contract with the parties owning mills and not willing to lease, by contracts similar to the one entered into with defendants; that, during the year 1881, plaintiff should shut down two of its own mills, and also as many of the mills by it leased as might seem necessary, in order to limit the supply of lumber in the fojir coun- ties named; that this contemplated scheme was carried out, including the con- tract with defendants as a part thereof; that the sole and only object, purpose and consideration upon the part of plaintiff in entering into these contracts was to form a combination among all the manufacturers of lumbers at or near Felton for the sole purpose of increasing the price of lumber, limiting the amount to be manufactured, and giving plaintiff the control of all lumber manu- factures near Felton for the year 1881, and the direct effect of this was no whole- sale market for lumber at Felton, and dealers would not purchase in any con- siderable quantity during 1881. The Supreme Court of California, affirming the decision of the lower court, held the contract void. A very similar case was that of Clancy v. The Onon- daga Fine Salt Co., 62 Barb. 395, the only difference being that in the latter case the result of the "combine " was the formation of a corporation. In Craft v. McConoughy, 79 111. 346, the illegal combine was thus outlined by the court: — " The four firms, by a shrewd, deep-laid secret combination, attempted to con- trol and monopolize the entire grain trade of the town and surrounding country. The action being by one of the firms against another for an accounting, relief was refused. After the North Eiver Sugar Eefining Company was dissolved, and its franchises forfeited by law, on account of its having become a party to an illegal combination, plaintiff was appointed a receiver, and brought suit, alleging a partnership between the parties to said combination and an accruing of profits, seeking to recover the ratable share of his defunct corporation there- in. It was. held that, "as it appears from plaintiff's own showing that he can have a recovery in his action only by the enforcement of an illegal contract in his behalf, a demurrer to his complaint will be sustained." Affirming 11 N. Y. S. 118; Gray v. Oxnard Brothers Co., 13 N. Y. S. 86. In Pac. Factor Co. v. Adlsr (Cal. Supreme Court, July, 1891), it appeared that plaintiff had contracted with defendant for the exclusive sale of all the grain bags in defendant's possession. Upon his refusal to perform the contract and action for breach of the contract, defendant set upas a defense that plaintiff had by similar contracts obtained control of three-quarters of all the grain bags which would arrive in California prior to a given date with a view to "corner- ing" the market and fleeching the farmers. This plea was held good on de- murrer. In India Bagging Ass'n v. Kock, 14 La .Ann. 168, several firms owning a large quantity of Indian cotton bagging had agreed among themselves not to sell except upon consent of a majority of the participants. The court, in refusing to enjoin a 140 ILLEGAL COMBIITATION. § 120 from all owners of the stock and held by a common agent or trustee ; ^ in other cases trust certificates have been issued.^ All such arrangements are restrictive of trade and illegal, and any party may withdraw at pleasure.^ § 180. Pooling arrangements. — Courts long ago ex- ercised jurisdiction to regulate rates of quasi public corporations, and on the same principle will refuse to enforce pooling contracts between railroad and gas companies. Such contracts are void as against public policy.* violation of the compact by one of ttie parties, said. — " Such combinations are contrary to public order, and cannot be enforced in acourt of justice." To same effect is Amot v. Pittson, etc.. Coal Co., 68 N. T. 558; Hooker v. Vandewater, 4 Denio, 349 ; Stanton v. Allen, 5 Denio, 434. Compare Kellogg v. Larkin, 3 Pin. Wis. 123. But in Mallory v. Hanaur, etc., Co., 2 Pickle, Tenn. 598; 8 S. W. 346, it was held that w-here four cotton seed oil companies had entered into a combination illegal because in restraint of trade, and amounting to a copartner- ship, one of them might sue for and recover property held by the assumed co- partnership. And it seems that in order to render the combination unlawful as being in restraint of trade, it must have' the effect of destroying or hamper- ing competition in some article of common necessity. In Com. v. Smith, 14S Mass. 169; 9 N. E. 629, the action was by one manufacturer of shade rollers jtgainst another toenjoin a violation of the compact. The court said: — "The agreement does not refer to an article of prime necessity, nor to a staple of com- merce, nor to merchandise to be bought and sold in the market It does not look to affecting competition from outside — the parties have a mono- poly by their patents— but only to restrict competition in price between them- selves." Moreover, it must appear that the restraint is not merely local but general. Shrainka v. Scharringhausen, 8 Mo. App. 522. See also Marsh v. Kussell, 66 N. Y. 288; Diamond Match Co. v. Koeber, 106 N. Y. 473; Wicken v. Evans, 3- De G. & J. 318; Ontario Salt Co. v. Merchants' Salt Co., 18 Grant's Ch. 540; Mogul, 'etc., Co. V. McGregor, 59 I;. T. Eep. "514. People v. Chicago Gas Tr., 130111. 268; 22 N. E. 798; State v. Neb. Distilling Co., (Neb.) 46 N. W. 155; People V. Kefining Co., 54 Hun, 354. 1 Woodruff V. Dubuque, etc., E. R. Co., 30 F. 91. See also Brown v. Pac. Mail Steamship Co., 5 Blatchf. 525, holfiing that such proxies are irrevocable but not void. Heed v. B'k of Newburgh, 6 Paige, 337. 2 See Griffith v. Jewett, 15 Weekly Law Bull. 419; Vanderbilt v. Bennett, IS' Abb. N. C. 460; 2 Ry. & Corp. L. J. 409. 3 Fisher v. Bush, 35 Hun, N. Y. 641 ; Havemeyer v. Havemeyer, 43 N. Y. Sup. Ct. 506; Moses V. Scott, 84 Ala. 60S; 4 South. Rep. 742; Harper v. Ray- mond, 3 Bosw. N. Y. 29. * An agreement Ijetween two companies, in Chicago "to keep out of each § 121 ILLEGAL COMBINATION. 141 § 121. When quo warranto proceedings will lie If a trust assume the shape of an incorporated association, a partnership or joint stock company without doing anything to render it amenable to a proceeding on the part of the state for usurpation of franchise of being a corporation the trust itself will be diificult to deal with. Where, however, the trust is formed by the integral parts without going through the formalities prescribed by the statute, or becoming incorporated as such, and the association so formed proceeds to issue shares to represent the various interests, such as regular corpora- tions usually do, a proceeding by quo warranto may be effectually prosecuted against it as was done in the case of State V. American Cotton Seed Oil Trust. ^ •other's territory" was void. Chicago, etc. Co. v. People, etc., Co., 121 111. 530; 13 N. E. Rep. 169; Gibbs v. Consol. Gas Co., 130 U. S. 397. 1 40 La. Ann. 8; 1 Ry. & Corp. L. J. 509. Houston, J. in rendering judg- ment against the defendant in the proceeding said: " The character of acts is ■determined by their nature as defined by law. If the law defines certain acts as <:orporatioii acts, persons will not be heard to say that they understand such acts not to be corporation acts, but simply acts to be legally done by commercial partners, by trustees, or b^ other voluntary unincorporated associations. The .acts charged against the trust are set forth in the beginning of this opinion. If the trust has done all the things there charged,, and it must be assumed that it has done them, in manner and form charged, has it acted within the State of Louisiana as a corporation ? " "It is alleged herein that the trust is •composed of more than six persons; that they have a president, two vice-presi- dents, a secretary and treasurer; that they act under the name of the American -Oil Trust, a name which raises the presumption of an entity distinct from them- selves; that the persons who compose the trust have associated themselves for the purpose of controlling and running the cotton-oil mills of the Southern States, or in other words, to carry on manufacturing business; that they have issued shares of stock which they have put on the market, or in other words, that they claim to have a perpetual succession. It will be seen by a reference to the char- acteristics of a corporation, as set forth in the articles and sections of Louisiana law herein cited in full, that the acts alleged against the Oil Trust constitute every act, except one, that may be done by a duly incorporated corporation. That one corporation act not alleged to have been done by the Oil Trust is the act of setting forth the liability of the members is restricted to the amount sub- scribed or paid for stock." "A commercial partnership has no right to issue transferrable stock and to set up a claim of perpetual succession. To do so would be to render itself liable to be preceded against as acting as a cor- poration without being incorporated." See also State v. North etc., Co., 54 Hun, 354; People v. Chicago Gas T. Co., 130 HI. 268; People v. Distilling C». 142 ILLEGAL COMBINATION. § 122 § 122. The law against perpetuities. — In many states are found statutes limiting the period during which property may be held in trust and defining the pur- poses for which a trust may be created.^ These statutes (Neb.), 46 N. W. 155. These cases decided no new principle nor did it suggest any new remedy. The cause of action did not arise from nor depend upon the character of the agreement, but upon the unlawful assumption of corporate powers in the transaction of the business. The legal results to corporations themselves upon quo warranto proceedings, based upon an unauthorized delega- tion of powers and franchises, is treated in a future chapter. Infra, ch. xxxv. The anti-monopoly policy of courts in giving effect to the remedy was thus ex- pressed by Pinch, J., in People v. North Ri v. Sugar Refinery Co., 121 N. T. 582- 53 Hun, 635. " The judgment sought against the defendant is one of corporate death, a state which created asks us to destroy, and the penalty invoked represents the extreme vigor of the law. Two questions open before us : First, Has the defendant cor- poration exceeded or abused its powers ? and second. Does that excess or abuse threaten or harm the public welfare ? We find in evidence that it has become an integral part and element of a combination which possesses over it absolute control, and dictates the extent and manner and terms of its entire business activity. The defendant corporation has lost the power to make a dividend, and is compelled to pay over its net earnings to a master whose servant it has become. Under an order from that master, it refused to refine sugar, and by so much has lessened the supply upon the market. It cannot stir unless its master approves, and yet it is entitled to receive from the earnings of other refineries amassed as profits in the treasury of the board its proportionate share for divi- sion among its own stockholders, who now own substitute certificates. In re- turn for this advantage, it has become liable to become mortgaged, not for its own corporate benefit alone, but to supply with funds a controlling board when that board reaches out for other coveted refineries. All this is admitted by de- fendant The defendant could have prevented it being founded, by re- fusing to register or recognize the legal transfer of stock. They should have appealed to the law, thus shattering the trust at the outset. The question to be determined is, whether the conduct of the defendant in aiding to form the trust was illegal. In all theSe points which have been reviewed, it is found the cor- poration was doing the public an injury, and, in avoiding the state law which compels the reservation of corporate rights, proved unfaithful to its charter. The present corporation of trust puts upon the market a capital stock, proudly defiant of the actual values and capable of unlimited expansion. It is one thin;tkact. 163 capital stock of another company, and thereby its road, or otherwise.^ A mechanic's lien for work done and materials furnished in building docks, wharves and piers upon a branch road afterwards acquired by a company was held to take precedence of a general mortgage upon the property owned by it and to be afterwards acquired.^ In such a case it cannot be said that the property has been really acquired by the mortgagor except cu7n onere ; and the lien of the mortgagee only attaches to his title and interest therein.® several years the funds necessary to make up the deficit created by the payment of operating expenses, fixed charges and interest on the bonds, does not thereby acquire an equitable priority of the mortgage bondholders who, upon foreclo- sure of their mortgage, are entitled to have the proceeds of the sale applied to the payment of their claims in preference to the re-payment of the advance. Morgan's L. & T. R. & S. S. Co. v. Tex. Cent. Ry. Co., 11 S. Ct.; Tex. Cent. By; Co. Morgan's L. & T. R. & S. S. Co., Id. 1 Thompson v. W. Tal. R. Co., 132 U. S. 68; 10 S. Ct. 29; U. S. Trust Co. v. Wab. W. E. Co., 38 F. 891; HoUister v. Stewart, 111 N. T. 644; 19 N. E. 782. The fact that debenture bonds are issued to enable the corporation to complete its railroad does not create any trust in favor of creditors whose claims are for supplies furnished in the construction of the road. Pettibone v. Toledo C. & St. L. R. Co., 148 Mass. 411; 19 N. E. 337. 2 WilUamson v. N. J. South. Ry. Co., 23 N. J. Eq. 277, 298; 29 Id. 311. ' A company which had made a mortgage covering all future -acquired prop- erty, subsequently purchased property stipulating that the United States should have a lien for the purchase money and that the company should not part with it without written consent until paid for. In an action by the trustee for the bondholders founded upon the claim that the mortgage, being prior in date to the bond, attached to the property as soon as purchased and displaced any junior lien, the United States Supreme Com't held that the lien of the mortgage only attached itself to the property in the condition in which it came into the mortgagor's hands and was subject to the lien of the United States. Justice Bradley delivering the opinion said: "If that property is already subject to mortgages or other liens, the general mort- gage does not displace them, though they may be junior to it in point of time. It only attaches to such interest as the mortgagor acquires; and, if he purchase property and give a mortgage for the purchase money, the deed which he re- ceives and the mortgage which he gives are regarded as one transaction; and no general lien impending over him, whether in the shape of a general mortgage, or judgment, or recognizance, can displace such mortgage for purchase money. xV.nd in sucli cases a failure to register the mortgage for purchase money makes no difference. It does not come within the reason of the registry laws. These 164 POWER TO CONTKACT. §§ 146, 147 § 146. Prior liens may be lost.^But liens junior to such general mortgage are lost where the property against which they exist becomes a part of the permanent striicture of the road, for instance, rails and bridges.^ And the case is not altered where the articles become so affixed to the realty by stipulating in the contract under which such articles are furnished that they shall remain the property of the vendor until paid for.^ The rule only applies in cases of rolling stock and other property susceptible of separate ownership and of separate liens and of real estate not essential to the use and enjoyment of the railroad. The parties may, however, in some cases, determine by agreement the character to be attached to the property whether of fixtures or personalty so as to preserve the lien of the vendor.^ § 147. lien of vendor of real estate for unpaid purchase money not disturbed. — The lien of a vendor of real estate sold to a railroad company whose future-acquired prop- laws are intended for the protection of subsequent, not prior, purchasers and creditors. Had the property sold by the government to the railroad company been rails, or any other material which became affixed to, and a part of the principal thing, the result would have been different. But, being loose property, susceptible of separate ownership and separate liens, such liens, if binding on the railroad itself, are unaffected by a prior general mortgage given by the company, and paramount thereto. In the case before us the United States, at the time of making the sale, reserved a lien on the property, and im- posed a condition of non-alienation until the price should be paid. Taken alto- gether, the transaction amounts to a transfer sub modo, and the lien must be regarded as attaching to the property itself, and as paramount to any other liens arising from the prior act of the company." United States v. New Orleans R. E. Co., 12 Wall. 362, 265; Boston Safe Deposit & T. Co. v. Bkrs. & M. Tel. Co., 36 Fed. Rep. 288. 1 Porter V. Pittsburgh Bessemer Steel Co., 122 U. S. 267; 7 Sup. Ct. Rep. 1206; 30 Am. & Eng. R. R. Gas. 495. 2 Frank v. Denver & R. G. Ry. Co., 23 Fed. Rep. 123; West. U. Tel. Co. v. Burlington & S. W. Ry- Co., 3 McCrary, 130; 11 Fed. Rep. 1; Cent. Trust Co. V. Ohio C. R. R. Co., 36 Fed. Rep. 520. 8 Boston Safe Deposit & T. Co. v. Bankers' & M. Tel. Co., 36 Fed. Rep. 288; West Un. Tel. Co. v. B. & S. W. R. R. Co., supra. §§ 148, 149 POWER TO CONTRACT. 165 erty is subject to a mortgage, holds good as against the mortgagee. He is not regarded as a purchaser for value, as against the vendor's lien for unpaid purchase- money.^ So land taken under the power of eminent domain does not become the property of the company or sub- ject to a mortgage upon the after -acquired property until paid for.^ § 148, Conditional sales generally invalid as against sub- sequent mortgagee. — But upon the same principle that property acquired and annexed to the realty becomes divested of the lien of the vendor, property passing to a company under a conditional sale is usually regarded as the absolute property of the company, as between the vendor and subsequent mortgagees without notice, notwithstanding the condition that the title shall re- main in the vendor until it is paid for. This may be said to be universally true where a mortgage was given after the property was so acquired; and also in states where there are statutes requiring that con- ditional sales shall be recorded in order to hold good as against subsequent purchasers for value and such recording is neglected. § 149. Limitations of this rule.— This rule relates spe- cially to personalty. It is not extended, however, beyond the reason upon which it rests, namely, the prevention of fraud. Thus where the contract was for sale of railroad iron which, under the agreement, was placed upon and annexed to a specified portion of the track, so that it was easy of identification, and was to remain the property of the vendor, and not to 1 Loomis V. Davenport & St. P. K. Co., 17 Fed. Rep. 301. 2 Buffalo K Y. & P. R. R. Co. v. Harvey, 107 Pa. St. 319; 26 Am. & Eng. K. R. Cas. 642. 166 POWER TO CONTRACT. § 150 become the property of the company until paid for, a subsequent mortgagee with notice of the agreement and its conditions was held not to have any interest' in such property as against the vendor.^ "Whether such conditional sales of personal property to a company after the execution of a mortgage cover- ing after -acquired property are valid, depends to a great extent, upon the lex rei sitae both as between the vendor and the mortgagee and as between the latter and the attaching and execution creditors of the com- p§,ny ; ^ and in the absence of proof to the contrary such personal property will be presumed to have been at the time of the execution of the mortgage in the state where the corporation was organized and where the mortgage was executed.^ § 150. Agreements amounting to a loan on the property not binding upon mortgagee of after-acquired property. — Courts will not permit mortgagees of after-acquired property to be deprived of their substantial rights un- der the mortgage by any contrivance which, in effect, amounts to a loan secured by a lien which, if given effect, would exclude the lien provided for in the mort- gage and deprive the mortgagee of the benefits of the terms with respect to property to be afterwards ac- quired. The legal effect of such transactions will be deter- mined from the intention of the parties and the cir- cumstances connected with it, and not by the name the ' Haven v. Emery, 33 K. H. 66. 2 See Hervey v. K. E. Locomotive Works, 93 U. S. 664; Nichols v. Mase, 94 N. Y. 160; &reen v. Van Buskirk, 5 Wall. 307; Kneeland r. Am. L. &Tr. Co., 136 U. S. 89; Rogers Locomotive Works v. Lewis, 4 Dill. 158; Farmer's L. F. 693; Tex. W. R. Co. v. Gentry, 69 Tex. 625; 8 S. W. 98; Willink v. Andrews, (Ind.) 16 C. L. J. 201; Pennock v. Coe, 2a How. 117; Speis V. Chicago &E. R. Co., 40 F. 34; holding that future income may be mortgaged; Williamson v. New Alb., etc., R. R. Co., 1 Biss. 198; Pierce V. Milwaukee, etc., E. R. Co., 24 Wis. .551; U. S. v. New Orleans R. E. Co., 12 Wall. 362; Shaw v. Bill, 95 U. S. (5 Otto) 15; Centr. Trust Co., v. O. Centr. K. Co., 36 F 520; Meyer v. Johnston, 53 Ala. 324; Butler v. Rahm, 49 Md. 541; Morrill v. Noyes, 56 Me. 458; Coe v. Brown, 22 Ind. 252; Stevens v. Wat- son, 4 Abb. Ct. of App. Decis. 302; Phil., etc., R. R. Co., v. Woelpper, 64 Pa. ■|§ 157,158 POWEE TO CONTEACT. 173 law that nothing can be mortgaged not in existence and belonging to the mortgagor at the time of making "the mortgage does not apply to the future stock in trade of trading and manufacturing corporations. But future calls cannot be mortgaged.^ § 157. Gas and other companies not restricted.— Com- panies engaged in furnishing gas, water and other necessary commodities to the inhabitants of cities and •districts, are under no such restrictions in the matter of mortgaging their property and franchises as railroad •companies. The restriction upon the common law right of alienation of property arises not from the fact that it subserves a public use and is beneficial or that i,he business of the corporation is the supplying of a public necessity, but applies only when the state, in view of the public purpose of a corporation, has con- ferred upon it special privileges, one of the most im- portant of which is the right of eminent domain.^ § 158. True test of the right to mortgage. — In all cases where the alienation of franchises and property would disable a corporation from performing its public duties and is forbidden, the same policy likewise forbids the same being mortgaged. The right to sell includes the right to mortgage and the giving of a mortgage may in the end, amount to a sale. A manufacturing company may sell its mill and buy another ; but a railroad com- pany cannot make a new railroad at pleasure, or a canal company a new canal at pleasure.^ St. 366; Dunham v. Isett, 15 la. 284; Williamson v. N. J., etc., R. R. Co., 29 N. J. Eq. 314. See Moran v. P. C. & St. L. R. Co., 32 F. 878, wliere the mort- gage was held not to cover after-acquired property. 1 Lewis V. Glenn, 84 Va. 947; 6 S. E. 866; King v. Marshall, 33 Beav. 565. 2 Jones on Corp. Bonds and Mort., sec. 6. ' Com. V. Smith, 10 Allen, 448, 455; per Justice Hoar. See Bast Boston Freight R. R. Co. v. Eastern, R. R. Co., 13 Id. 422; Richardson v. Sibley, 11 Id. 65. 174 POWER TO CONTRACT. § 159> A railroad company cannot convey,^ or lease its track and right of way or other property which is essential to the fulfilment of the duties imposed upon it by the charter.^ But back debts already made whether due or not, may be mortgaged where the Corporation has general authority to borrow, or where the funds to be obtained by the assignment are necessary to the suc- cessful continuance of its business.^ § 159. Statutes authorizing mortgages of railroad prop- erty. — Most of the American states have provided general laws authorizing railroad companies to mort- gage their property, and such franchises as can be mortgaged. The other kinds of corporations which require legislation to legalize the conveyance of their property, and other franchises than that of being a cor- poration, which none can convey are not numerous. Canal companies may be mentioned as the most im- portant ; and few, if any, of these are located where special legislation is disallowed. It is fortunate, in view of the general and interstate importance of the subject that there is considerable uniformity of the statutes of the difierent states. 1 Penn. Co. v. St. Louis & T. H. R. R. Co., 118 V. S. 290, 309; Richards v. Merrimac & C. Riv. R. R. Co., 44 N. H. 127, per Bell, C. J. ; Naglee v. Alexan- dria & F. Ry. Co., 83 Va. 707; Gulf C. & S. F. Ry. Co., v. Morris, 67 Tex. 692; 4 S. W. 156. 2 Abbott V. Johnstown R. K. Co., 80 N. T. 27; Troy & B. R. R. Co. v. Bos- ton H. T. SeeSistare v. Best, 88 N. Y. 527; Boyal Bank of India's Case L. E., 4 Ch. 252 ; Shoemaker v. Nat., etc., B'k, 1 Hughes, 101 ; Nat. Bank v. Case, 9» V. S. 628. § 174 EXERCISE OF POWER THROUGH AGENTS. 191 CHAPTER IX. EXERCISE OF POWER THROUGH AGENTS. § 174. The general law of agency applicable. 175. Limitations on authority of agents. 176. Collective power of members. 177. Authority of agents derived solely from powers of corporation. 178. When authority may be presumed. 179. To indorse commercial paper. 180. Matters within exclusive cognizance of agents. 181. Duty of corporation upon the termination of agent's authority. 182. Conditional authority of directors. ' 183. How scope of authority determined. 184. The true measure of authority. v 185. Scope of authority of directors. 186. Where directors are given control. 187. Method and power of appointment of other agents by directors. 188. The appointment of sub-agents. 189. Directors cannot delegate special powers. 190. Executive and ministerial duties may be delegated. 191. Kature of business Important. 192. Construction of agents' authority. 193. Incidental powers and duties of president. 194. Secretary, treasurer, superintendent, etc. 195. Execution of conveyances under seal. 196. The place of the agent's transactions immaterial. 197. Agents cannot serve an interest adverse to that of the corporation. 198. Ratification a waiver of remedy. 199. Cannot purchase corporate property. § 174. The general law of agency applicable.— A corpo- ration being merely an ideal entity can no more act without the intervention of agents than a partnership without partners, or a public office without an officer. Even when an act is done by a majority of the mem- bers assembled at a corporate meeting, their authority depends upon an implied agency from the dissenting minority and the absentees. 192 EXERCISE OP POWEE THEOUGH AGENTS. § 176 This absolute dependence gives the general law of agency peculiar importance when applied to the deal- ings of corporations. We measure a corporation's right to employ and act through agents by the full extent of its powers. We answer the question, "What can it do through agents?" by asking "What has the corpora- tion itself authority of law to do ? " To corporations applies with ^reat jfitness the maxim ' ' qui facit per alium Jacit per se. § 175. Limitations on authority of agents. — A corpora- tion may, and usually does, confer most of its power upon a board of managing agents, to be exercised by them as a body and through various subordinates appointed by them. But there is always a reservation of ultimate authority or jus disponendi of corporate power reserved in the members at large which must be called forth in the last emergency.^ An illustra- tion is seen in the process of voluntary dissolution and sale of the corporate property with a view to abandon- ing the corporate enterprise. § 176. Collective power of members.— The membership, collectively expressing its will through its majority, is 1 Bocock's Extrs. v. Alleghany C. & I. Co., 82 Va. 913; 1 S. E. 325. See Stevenson v. Polk, 71 la. 278; 32 N. W. 340, where a limitation as to instruments affecting real estate held not applicable to release of a mortgage. French Spiral Spring Co. Y. N. E. Car Trust, 32 F. 44, holding that similar limitation upon contracts involving liability to pay money does not apply to acceptance of order in liquidation of previous indebtedness. A vote by a meeting of stockholders of a corporation to purchase all the materials, tools, and personal property qf another certain corporation, giving in payment therefor a certain sum in capi- tal stock of the first corporation, to be issued to a designated person as trustee, and to pay a certain royalty, authorizing the issuance of the stock to the trustee, and providing that any balance left after paying the liabilities of the second cor- poration should be issued to the treasurer of the first, does not authorize a con- tract to pay all of the second corporation's debts absolutely, in consideration for a transfer of its property. Bi-Spool S. M. Co. v. Acme Manuf'g Co., (Mass.) 26 N. E. 991. I 177 EXEKCISE OP POWBK THKOUGH AGENTS. 193 both the first and the last actor, superior to all others, and the source whence all agents derive their authority. When by statute or constating instruments the con- trol of the corporation's affairs is given to its board of directors, the investiture of power is understood to be subject to a reservation of final authority in the mem- bership who collectively constitute the only agent pos- sessing all the powers of the corporation. It is too evident to need illustration that no agent, great or small, can do any act in excess of the powers conferred by the charter upon his principal and such as are in- cidental thereto. In order, therefore, to determine the legal effect of an act done, ostensibly by a corporation through an agent acting on its behalf, it is necessary to keep in view not only the law of agency as applied alike to artificial and natural persons, but also the extent of powers conferred by the charter or articles and the limitations imposed by statute and the qualifications contained in the by-laws.^ § 177. Authority of agents derived solely from powers of corporation.— It is a rule well settled and recognized in nearly every decision on questions involving the acts of agents that corporations are not, as a general rule, bound by the acts of agents done in excess of their authority. The important interests often intrusted to corporate agents and the opportunities thus afforded for abuse of their trust, with consequent loss to mem- 1 Rathburn v. Snow, 3 N. T. S. 925, no liability incurred for supplies con- trary to provisions of a by-law. See also People v. N. E. Sugar Kef . Co., 25 Abb. N. C. 1 ; Stutz v: Handley, #1 Fed. R. 511 ; Star Pr. Co. v. Andrews, 9 N. T. S. 731; Duke v. Markham, 105 N. C. 131; 10 S, E. 1017, consent to corporate act given elsewhere than in corporate meeting not binding; The Lyceum v. Ellis, 57 N. T. Sup. Ct. 5.32, holding that under N. T. Stat, consent of holders of two thirds of stock actually issued is sufficient to authorize mortgage of cor- porate property. 13 194 EXEECISE OF POWER THKOUGH AGEKTS. § 178 bers, make it necessary that courts should hold agents and not the corporation to account for acts done in ex- cess of authority. Justice to shareholders requires that they shall not suffer loss through the unauthorized acts of agents from whom they are generally widely separated. To these general rules there are, however, important exceptions, founded upon reasons of justice. The exceptions are made in cases which appeal so strongly to the sense of right as to supersede and I overcome the reasons for the rule itself. One impor- tant exception is where a principal employs an agent lin a particular transaction and clothes him with ap- jarent authority in that transaction or course of busi- less. A person who, in that case, deals with the agent, within the scope of his apparent authority, will bind the corporation. The recognition of this excep- tion is essential to the safety of persons dealing with agents regardless of the nature and character of their principals. It has been held to act upon the principal as an estoppel.^ But his liability would seem more properly to arise from an implied obligation. § 178. When authority may be presumed.— For, when an agent is employed to transact business of a particular kind or is put in charge of a department of a corpora- tion's business,* he may be presumed by all dealing 1 Wilson V. Engs Co. E. E. Co., 114 N. T. 487? 21 N. E. 1015. Merrill v. Consumers' Coal Co., Id. 216, where a practice by the president of paying attor- neys for legal services in stock of the corporation was held to be admissible in evidence to bind the corporation in the case before the court; St. L. & C. E. E. Co. V. Drennan, 26 El. App. 263, course of dealing by member of executive com- mittee? The directors of the association being by its by-laws empowered to manage its affairs, the corporation cannot defeat the recovery of money borrowed by direction of the directors, on the ground that the directors applied the money to an unauthorized purpose, unless the lender knew that such purpose was un- authorized. North Hudson Mut. Bldg. & Loan Ass'n v. First Nat. Bank (Wis.), 47 TSr. W. 300. 2 New York, etc., E. L. Co. v. Schuyler, :U N. Y. 30, 73. § 178 EXERCISE OF POWER THROUGH AGENTS. 195 with his principal through him to possess authority to exercise all the powers and to resort to all the means usually incident to such authority, or pertaining to that department or class of business. And though he do acts prohibited by the terms of his employment, those who deal with him within the scope of apparent authority are not bound to investi- gate the original intention of the parties. The impli- cation from the course of dealing and the appearance held out may in such case be accepted as real and materially affecting the result whether the corporation is estopped or bound by an implied obligation. The question as to what facts and circumstances will war- rant a presumption of authority in the absence of posi- tive proof is a broad one, peculiarly appropriate for a jury.' _^____ 1 Where C. had been accustomed to collect the moneys and pay the bills of plaintiff without objection, it was held that plaintiff's officers were estopped to deny C.'s authority to make such collections. Craig Medicine Co. v. Merchants' Bank, 14 N. Y. S. 16. The evidence was deemed sufficient to support the find- ing that authoiity had been given in the following cases : Jansen v. Glass Letter Co., 1 N. T. S. 605; Whittaker v. Kilroy, TO Mich. 635; McNeil v. Boston Chamber of Commerce (Mass.), 28 N. E. 245 (Sept. 1, 1891), involving implied powersof a committee; Bank of Attica M'fg. Co., 1 N. Y. S. 48.3; South Coving- ton & C. B. Ey. Co. V. Beat, 34 F. 628; Borland v. Haven, 3,1 P. 394; Siemens K. G, L. Co. V. Horstman (Fa.), 16 A. 490; Griffith v. Chicago P. E. Co., 74 la. 85; EastE. T. Co. v. Brower, 80 Ga. 258; 7 S. E. 273; Deller v. Staten Is., etc.. Club, 56 Hun. 647; 9 N". Y. S. 876; Sims v. Davidson, 54 ]Sr. Y. Sup. Ct. 235; Panhandle Nat. Bank v. Emory (Tex.), 15 S. W. 23; Sherman, etc., Co. v. Ste- vens, 13 Colo. 534; Huntington v. Attrill, 118 N. Y. 365; 23 N. E. 544; Hardin V. Constr. Co., 78 la. 726; 43 N. W. 543; Corcoran v. Snow Cattle Co., 151 Mass. 74; 23 N. E. 727; Nat. B'k v. Navassa P. Co., 56 Hun, 136; 8 N. Y. S. 929; Wilson V. Met. Ey. Co., 120 N. Y. 145; 24 N. E. 384; McDonald v. Chis- holm, 131 111. 273; 23 N. E. 596; Manhattan Hardware Co., v. Phalen, 128; Pa. St. 110; 18 A. 428; Daviesv. New YorkConcertCo., 13 N. Y.S.739; Wilson V. K. C, El. Ey. Co., 114 N. Y. 487; Eureka I. W. v. Bresnahan, 60 Mich. 332; 27 N. W. 524; Merrill v. Coal Co., 114 N. Y. 216; G. C. & S. F. Ey. Co. v. James, 73 Tex. 12; 10 S. W. 744; St. L., etc., Co. v. Drennan, 26 111. App. 263; Walker v. Wilmington C. & A. K. Co., 26 S. C. 80; Fifth Ward Sav. B'k V. First Nat. Bank, 47 N. J. L. 357. The fact that a Presbyterian clergyman, recognized as such, claimed to hold certain specific property in Santa Pe., for a religious corporation in New York; that said corporation could not, on account of its distance, occupy its lands ex- cept by means of servants, agents, tenants, or other representatives; the state- 196 EXERCISE OF POWER THROUGH AGENTS. § 179 § 179. To indorse commercial paper.— An illustration of this principle is found in the case of cashiers of banks who have general authority to issue and indorse nego- tiable paper and to certify checks in carrying on the business of the bank. A person who, in good faith and without notice, receives any commercial paper ordinarily dealt in by banks of that character, indorsed or certified by the cashier may hold the corporation liable although no express authority for the act can be found in its charter or by-laws.* But it cannot be pre- sumed that the agent of a corporation has authority to transact business which the corporation is not author- ments of such clergyman, and his position in Santa Fe. , raise a strong presump- tion that he was acting for the plaintiff corporation, and tliat his possession was the possession of the corporation. Probst v. Trustees, etc., 3 N. M. 237; 5 P. 702. Where the directors of a steam packet company authorize arrangements to be made with persons " to induce them to buy freight for the boats," it is within the power of the president to guarantee shippers against loss upon the mer- chandise to the extent of the freight charges. Ward v. Davidson, 89 Mo. 445. A different conclusion was reached in Little v. Kerr, 44 KT. J. Eq. 263; 14 A. 613; Mer. Nat. B'k v. Detroit K. & C. W., 68 Mich. 620; 36 N. W. 696; Getty V. Milling Co., 40 Kan. 281; 19 P. 617; Stanley v. Sheffield L. I., etc., Co., 83 Ala. 260; 4 So. 34; McElroy v. Nucleus Ass'n, 131 Pa. St. 393; 18 A. 1063; Duke V. Markham, 105 N. C. 131; 10 S. E. 1003; Bohm v. Brewery Co., 30 St. R. 424; 9 N. Y. S. 514; First Nat. Bank v. C. B. C. W. W. Co., 56 Hun, 412; Wahlig V. Mfg. Co., 9 N. T. S. 739; Alta S. M. Co. v. Alta P. M. Co., 78 Cal. 629; 21 P. 373, and the evidence held insufficient to warrant finding the cor- porations liable. Where a special agent and adjuster of an insurance company, pending nego- tiations after loss, confers with assured and her attorney concerning the proofs thereof, and employs an attorney to assist in the investigation of the loss, and seeks to secure a cancellation of her claim on the repayment of the premium, and, without informing her of the existence of any limitation on his authority to bind his principal, positively refuses to pay the claim, the company will be estopped to deny the agent's authority to bind it. California Ins. Co. v. Gracey (Colo.), 24 P. 577. But a soliciting agent of an insurance company has no authority to waive a breach of the condition relative to additional Insurance, or to estop the company by admissions after loss. Phoenix Ins Co. v. Copeland (Ala.), 8 So. 48. 1 Bank of Genessee v. Patchin B'k, 13 N. T. 309; 19 N. Y. 312; City Bank v. Perkins, 29 N. Y. 554; Meade v. Merchants' Bank, 25 N. Y. 143; Cooke v. State Nat. Bank, 52 N. Y. 96; Merchants' Bank v. State Bank, 10 WalL 604; Faneuil Hall B'k v. Bank of Brighton, 16 Gray, 534; Everett v. United States, 6 Port. 166. Compare Mussey v. Eagle Bank, 9 Mete. (Mass.) 306. ij 179 EXERCISE OF POWER THROUGH AGENTS. 197 ized by its charter to engage in.^ Therefore, no au- thority to indorse commercial paper for the accommo- dation of the maker will be presumed ; and the charter containing the grant of powers, being matter of public record, all dealing with the agents of the corporation are presumed to take notice that no such power has been conferred upon the corporation itself.^ A cor- poration has no power to indorse on its behalf, or in its name a third party's note for accommodation. ^ ' Nat. Park B'k v. German Warehousing Co., 116 N. Y. 281; 5 L. E. An. 673; Alexander v. Cauldwell, 83 N. Y. 480; Dabney v. Stevens, 2 Sweeney, 415. See Chicago & N. W. R. K. Co. v. James, 22 Wis. 194; Bank of Battle Creek v. Mallan (Minn.), .34 N. W. 901; Farmers' Loan & Trust Co. v. Carrall, 5 Barb. 613, 649; Farmers' etc., T. Bank v. Harrison, 57 Mo. 503; Blen v. Bear River it A. W. & M. Co., 20 Cal. 602; Barnes v. Pennell, 2 H. L. Gas. 520. ■^ Leavitt v. Yates, 4 Edw. Ch. 174; Adriance v. Koome, 52 Barb. 399; Lowell F. C. Sav. Bankv. Winchester, 8 Allen 109; Zabrinskie v. Cleveland C. & C. R. Co., 23 How. 398; Pearce v. Mad., etc., R. Co., 21 How. 443; Salem B'k v. Gloucester B'k, 17 Mass. 1; The Floyd Acceptances, 7 Wall. 676; U. S. v. City Bank, 21 How. 364. But under the circumstances in Allen v. First Nat. Bank, 127 Pa. St. 51 ; 17 A. 886, the corporation was held bound by an accommodation indorsement made by its cashier. ■'' Bank v. German Warehousing Co., 116 N. Y. 281; CouUer v. Richmond, 59 N. Y. 478; Cawley v. Castello, 15 Hun, 303; Cromwell v. Hewittj 40 N. Y. 491 and note ; Farmers' & M. Bank v. Empire Stone Dr. Co. , 5 Bosw. 275 ; Morf ord v. Farmers' Bank, 23 Barb. 568; Cent. B'k v. Empire Stone Dr. Co., 26 Barb. 23; Bank of Genessee v. Patchin B'k, 13 N. Y. 309; Culver v. Reno R. E. Co., 91 Pa. St. 367; Hall v. Auburn Tp. Co., 27 Cal. 255; Walker v. Wilmington C. & A. R. Co., 26 S. C. 80; IS. E. ,366; Bankv. Bank, 48 N. J. L. 513; 7 A. 318; or to execute a note as surety for another; Hall v. Auburn Turnp. Co., 27 Cal. 255; Smeadv. Lidianapolis P. etc., R. Co., 11 Ind. 204; Laverty v. Burr, 1 Wend. 529. The case is not altered by the fact that the accommodation indorser is a stockholder. Webster v. Howe Mach. Co., 54 Conn. 394; 8 A. 482. But where a corporation has general power to issue negotiable securities a bona fide holder without notice that the paper was indorsed for accommo- dation has a right to presume that it was Issued under circumstances which gave the agents the requisite authority even though neither the corporation nor its agents, in the transaction was actually vested with power and authority. Mechanics' Banking Ass'n v. N. Y. & S. White Lead Co., 23 How. Pr. 74, 79; Affd. 35 N. Y. 505; Bank v. Hall, 44 N. Y. 395; Bissell v. Mich. So. & N. I. R. Co., 22 K. Y. 289; Booth v. Farmers' & M. Nat; B'k, 4 Lans. 306; 50 N. Y. 400; Weeks v. Fox, 3 Thomp., etc., 355; Lexington v. Butler, 14 Wall. 296; Merch. Nat. Bank v. State Nat. B'k, 10 Wall. 644. See Barnes v. Ontario Bank, 19 N. Y. 164; Safiford v. Wyckoff, 4 Hill 44."); Willmarth v. Crawford, 10 Wend. 344. 198 EXERCISE OP POWER THROUGH AGENTS. § 180 § 180. Matters within exclusive cognizance of agents. — Another case requiring an application of the principle of the exception is where the authority of the agent is conditional upon the existence of certain facts pecu- liarly within his knowledge or not equally open to the knowledge of others, though mentioned in the cor- poration's charter or by-laws. Under these circumstances, a party dealing with such agent is entitled to assume the facts upon the existence of which his authority depends. In ease such authority depends for its continuance upon the non- occurrence of certain events, a party acting in good faith and without notice may safely assume that the events designed to operate as a defeasance of the agents' authority have not transpired. This exception rests upon the same reasons of public convenience and safety as the one previously noticed. Where the agent is an officer his authority is limited in point of time to 'the term for which he was elected or appointed. If appoilited for a special purpose, his authority ceases upon the accomplishment of that pur- pose. By the very terms of his employment, his- term of service may be limited, or he may be subject to dis- charge at any time. By whatever means his agency may be terminated if, after it has ceased, he continues to act and the corpo- ration continues to recognize his acts as an agent, it would, on this principle, be held liable for acts done in its name and within the scope of the original author- ity.^ Tinder denial by corporation tliat it made tlie indorsement, it may show that tliough made by its treasurer, it was never authorized by its directors. Wahlig V. Mfg. Co., 9 N. Y. S. 739. Generally, authority must be proven by the party claiming title under it. Bank v. Hirsch Bws., etc., Co., 4 N. Y. S. 385; Sheri- dan Electric L. Co. v. Bank, 52 Hun, 575. 1 Northern Cent. E. Co. v. Bastian, 15 Md. 494. See also Clark v. Pratt, 47 Me, 55 ; Ang. & Am. on Corp. Sec. 283. § 181 EXEKCISE OF POWEK THROUGH AGENTS. 199 § 181. Duty of corporation upon the termination of agent's authority, — Where the authority of an agent has been withdrawn, a neglect to notify parties who have dealt with him as such estops the corporation from denying his authority, where doing so would result in loss to such parties, on the same principle that neglect of a retiring partner to notify the firm's customers of his withdrawal would render him liable in future trans- actions in which credit was given to the firm on the strength of his supposed connection. In these cases the omission of the act which would have prevented the injury shuts out the truth, to wit : — the actual want of authority.^ Although an election or appoint- ment of an agent or officer be irregular for want of compliance with prescribed formalities, yet, if such appointment or election be subsequently ratified by the corporation a regular appointment or election may be presumed.^ And although acting officers be ineli- gible their acts while allowed by the proprietors to take control of its property and exercise its functions bind it.^ 1 N. T. & N. H. R. R. Co. v. Schuyler, 34 N. Y. 30. But it seems that no presumption in favor of continuing authority will prevail where the term for which an officer of a corporation was appointed has expired and he continues to act in the absence of some recognition by the corporation. See N. T. P. & N. Ky. Co. V. Bates (Md.), 11 A. 705. 2 Browning v. Gt. Cent. Min. Co., 5 H. & N. 856; Smith v. Hull Glass Co., 11 C. B. 897; Sampson v. Bowdoinham Mill Co., 36 Me. 78; Penobscot, etc., R. Co. V. Dunn, 39 Me. 587; Smith v. State B'k, 18 Ind. 327; Goodwin v. Un. Screw Co., 34 N. H. 378; Ohio, etc., R. Co. v. McPherson, 35 Mo. 13; Waite v. Windham Min. Co., 36 Vt. 18; Charitable Ass'n v. Baldwin, 1 Met. 359; Allen V. Cit. Steam Nav. Co., 22 Cal. 28; Southgate v. Atlantic, etc., R. Co., 61 Me. 89; State B'kv. Chetwood, 3 Halst. (K. J. L.) 1; Mich. Nat. Bankv. Burnett, 32 N. J. Eq. 286; Minor v. Mcch. B'k, IPet. 96; Union Bankv. Call, 5 Fla. 409; Elwell V. Dodge, 33 Barb. 336; Vernon Soc. v. Hills, 6 Cow. 23; Beers v. Phne- nix Glass Co., 14 Barb. 358; Farmers' Mut. Ins. Co. v. Taylor, 73 Pa. St. 342. ' Mech. Nat. Bank v. Burnett Mfg. Co., 32 N. J. Eq. 236. See also Atlas Nat. B'k V. Gardner, 8 Biss. 537; Despatch Line v.'Bellamy Mfg. Co., 12 N. H. 205; Delaware, etc., Canal Co. v. Penn. Coal Co., 21 Pa. St. 131; Thorington V. Gould, 59 Ala. 461. But in Ellsworth Mfg. Oo. v. Farmer, 79 Me. 440; 10 A. :250, it was held that a board of directors claiming an election at a meeting at 200 EXERCISE OP POWER THKOTTGH AGENTS. § 183 § 182. Conditional antliority of directors Where direc- tors have authority to do an act, to borrow money for instance, provided a resolution authorizing it should, be previously adopted at a general meeting, a party loaning them money in good faith and without infor- mation has a right to assume that a proper resolution has been passed.^ § 183. How scope of authority determined. — Prevailing^ custom and usage have long since led the business public to attach certain duties to different corporate officers. Unless they have information to the contrary, or the constating instruments of which they are bound to take notice contain provisions to the contrary, per- sons dealing with the corporation through agents ar& justified in presuming that particular officers possess authority to perform the usual duties pertaining to such offices. This may be stated as the broadest rule on the subject under consideration, and contains not only the rule of actual and incidental authorization, but also its exceptions. The instances are numerous, in which authority from which less than the number of votes required by the by-laws for the purpose of electing were cast, could not be regarded as officers de facto as against another board holding over from a previous election about which there was no dispute. 1 Mining Co. v. Anglo California Bank, 104 U. S. 192; Affg. 5 Saw. 255. See also Lee v. Pittsburgh Coal Co., 56 How. Pr. 376; Phillips v. Campbell, 43 N. T. 271. A corporation organized under section 2, c. 37, Laws N. Y. 1848, could not, under that act, mortgage its property. Under chapter 480, Laws 1867, it could do so with the consent of two-thirds of its stockholders, Section 2, c. 374, Laws 1872, authorized such a corporation to give a mortgage to secure the payment of money borrowed to carry on its business. Held that, by the last act, the con- sent of the stockholders was dispensed with. Davidson .v. Westchester Gas light Co., 99 N. Y. 558; 2 N. E. 892. Where the consent, however, does not embrace the right to mortgage the fran- chises, rights, and liberties," power to do which is conferred by chapter 163, Laws 1878, and requires the consent of stockholders, a mortgage given is inoper- ative as to the franchises. Lord v. Yonkers Fuel Gas Co., 99 N. Y. 547; 2 N. E. 909. § 183 HKEKCISE OF POWEE THEOTJGH AGENTS. 201 corporations to agents to do acts and make contracts in the absence of actual authority has been implied. The test of the extent to which an agent placed in charge of a particular business may bind his principal is whether those who dealt with him and relied upon his authority had a right to do so in view of the appear- ances his principal had enabled him to present to the public.^ A just and safe rule is deducible from a recent New York decision. It is to the eflFect that a mere practice of doing a certain act in a certain way, in the name of the corporation, by a particular agent having neither 1 Perkins v. Washington Ice Co., 4 Conn. 645. Wliere tlie secretary of an insurance company had for a long time habitually and without objection by the managing board indorsed assignments of policies and made entries of the same in the books, the corporation was held estopped from setting up a provision in the by-laws to the effect that such assignment could be made only by the con- sent of the directors themselves. The regular entries in the books of the cor- poration were deemed sufficient to charge the directors with notice of the exer- cise of the authority in question by the secretary. Conover v. Mut. Ins. Co., 1 N". Y. (1 Comst.) 290. A by-law of a manufacturing company provided that no officer or agent should contract indebtedness on behalf of the corporation ex- ceeding twenty-five dollars without consent of the board of directors. The president had purchased of plaintiff for a price exceeding the limit articles which were used by the corporation. In the absence of proof that plaintiff had a notice of such by-law it was held liable. Ten Brock v. Boiler, etc., Co., 20 Mo. App. 19. Where a clerk of a corporation had been in the habit of borrowing money and executing its notes therefor with the knowledge and acquiescence of its board of directors and the note in question was for money borrowed by him and used in its business; these facts were decided to be proper evidence that his act was that of the corporation to go to the jury. Mead v. Keeler, 24 Barb. 20. The general manager of a trading corporation was in the habit of assisting per- sons with whom the corporation dealt. The corporation was held liable on a note which he had indorsed in the name of the company; and procured to be discounted for the maker's benefit. Holmes v. Willard, 53 Hun, 629; o N. Y. Supp. 610. The court said: — "Trading corporations are necessarily managed in a more informal way than those of a different character. They are voluntary copartnerships having a right of survivorship not dissolved by reason of the death of any one of the parties in interest, and a director or officer or manager with whom is intrusted all the business of the corporation can exercise all the powers which the board of directors could exercise," etc. Citing Hoyt v. Thompson, 19 X. Y. 209. A guaranty executed by officers of a corporation based upon a contract which they have not authority to make is without consid- eration and not binding upon the corporation. Granger v. Bourn, 7 P. 760. 202 EXERCISE OP POWER THROUGH AGENT*. § 184 actual nor apparent authority, however often the act may be repeated, will not be sufficient to estop the corporation from denying his authority, unless its man- agers be chargeable with either actual or constructive notice, as for instance, entering the transactions upon the books of the corporation.^ And a corporation is not bound to make good losses resulting from dealings with its agents where the person advancing money or performing services has notice that the agent has a personal interest in the matter, distinct from his principal, although the agent's general authority in the transaction is undoubted,* § 184. The true measure of authority The scope of an agent's authority, considered aside from the presump- ' Nat. Bank of Republic v. Navassa Phosphate Co., 56 Hun, 136; (N. T.) 7 Ry. & Corp. L. J., 372. The president of the company was shown to have in- dorsed from .WO to 400 notes in its name and an action had been brought npon one of these notes. The court said, per Cullen J. : "If for several years Lawton (the agent) though without authority was using the credit of the company and the corporate machinery to avail himself of that credit, entering the transac- tions on the books of the corporation and paying obligations out of apparently ^corporate funds, we think the trustees could not by their negligence in omitting to discover the fact, of practically turnmg over to Lawton the whole manage- ment of the New York office, relieve the company from liability to those who had acted on the faith of the apparent power. But the indorsement of numer- ous notes was not of itself sufficient to charge the company. Such was a mere repetition of the fraud. The essential point was to charge the defendant with either actual or implied notice." See also R.R. Co. v. Sawyer, 54 N. T. 30; Compare Sparks v. Despatch, etc., Co. (Me.), 15 S. W. 417. Proof that one is an agent of a corporation or a particular officer, without proof that he has authority either apparent or real to transact the business out of which the al- leged liability arose will not be sufficient. Bank v. St. Anthony's Church, 109 N. Y. 512; McCuUoch v. Miss., 5 Denio 567; Bridge Co. v. Bachman, 66 N. Y. 262. 2 Where plaintiff was employed by the president of a railroad company to pro- cure some person to build the road on terms profitatble to the president and to himself it was held that he could not recover from the railroad company for his services in obtaining the contract; and it was held to make no difference whether the directors of the company knew of and approved the contract or not. The company was not bound by it and could repudiate it as a diversion of profits. See also, Lyndon Mill Co. v. Lyndon, etc., Inst. (Vt.), 22 A. 575; Hill V. Pub. Co. (Mass.) 28 N. E. 142. Van Valkenburg v. Thomasville T. & G. R. Co., 52 Hun, 610. § 186 JEXERCISE OF POWER THKOTJGH AGENTS. 203 tions in which outside pasties for salutary reasons are sometimes permitted to indulge, is determined to a great extent by the nature of the employment. Of course it is within the power of the parties to insert minute details and specific limitations and defi- nitions in a contract of employment or in the by-laws imposing duties upon officers ; but that is seldom done and is virtually impracticable. Whatever the charac- ter of the agent, the ultimate source of authority is the constating instruments.^ § 185. Scope of authority of directors. — Directors are agents whose agency is coupled with ah important trust, to be executed in a manner diflFering in many respects from the methods adopted by other agents. Their relations to the corporation, to those dealing with it, to other agents and to the members are suffi- ciently important and peculiar to justify a separate division devoted to that subject and need be noticed here only incidentally .^ § 186. Where directors are given control Although several states have provided that the corporate powers, business and property of all corporations " must " be exercised and controlled by a board of directors, yet the directors derive their appointment from the mem- bers at large, who also have authority to regulate the conduct and limit the authority of the board of di- rectors in a code of by-laws. They retain the further right to call the board to account by various actions at law and in equity to be hereinafter set forth.s But I See Anthony v. H. H. S. M. Co. (K. I.), 18 A. 176; Sherman, etc., T. Co. v. Morris, 43 Kan. 282 ; 23 P. 569 ; Parns worth v. W. U. Tel. Co. , 53 Hun, 636 ; 6 N. T. S. 735; Alta S. M. Co. v. Alta P. M. Co., 78 Cal. 729. » Infra, Ch. XVII. » Infra, Ch. XXIV. 204 EXERCISE OF POWER THROUGH AGENTS. § 18T subject to this liability and such limitations as may- be imposed in the form of by-laws they constitute the corporation for all purposes of dealing with others. It has been said that " they are the mind and soul of the corporate entity and what they do as the repre- sentatives of the corporation the corporation itself is deemed to do." ^ But notwithstanding the force of that expression, and the unequivocal language of statutes, they are at most only agents of the corpora- tion, and though controlling agents, are subject to a higher authority. As to their acts being those of the corporation, the same may be said of any agent, duly authorized. "Where by a deed of settlement the business of a company was placed under the sole and complete control of a board of directors, it was held that not- withstanding their extensive authority they were not empowered to borrow money on behalf of the corpo- ration.2 § 1S7. Method and power of appointment of other agents by directors. — The power to employ other agents is in- cidental to the authority of directors to conduct and control the business and property of the corporation. Persons so employed become agents, not of the board of directors but of the corporation itself. But agents may be appointed by the members at corporate meet- ings, or may be designated in the articles or charter. 1 Maynard v. Fireman's Fund Ins. Co., 34 Cal. 480. The directors of a cor- poration have authority to make a bona Jlde settlement of a pending action which will be binding on the stockholders. Donohue v. Mariposa Land & Min. Co., 66 Cal. 317; 5 P. 495. A resolution of the members of a corporation concerning the disbursement of money, if not adopted or ratified by the directors (where no money could be ap- propriated or drawn from the treasury without their order,) was held Ineffective, as a corporation can only act or speak through the medium prescribed by law, and that was in this case its board of trustees. In re La Solidarte Mut. Ben.. Ass'n, 68 Cal. 392; 9 P. 453. 2 Burmester v. Norris, 21 L. J. (N. S.) 5 Exch. 43; 8 Eng. L. & Eq. 487. § 188 POWEK TO CONTRACT. 205 Where the general management and control is given to the board of directors considerable latitude of con- struction will be indulged in construing their powers to employ agents as well as in other matters. The language of the charter of a railroad company was that " the president and managers shall conduct the business of said company." It was held that the purchase of locomotives being a part of the business an agent who was not one of their number, nor inter- ested in the corporate enterprise might be employed l)y them to make the purchases ; and that such agent possessed implied authority under his employment to execute bills or notes of the company in payment of debts thus incurred.^ Their authority and sanction of the acts of all other agents within the corporate powers may be gathered as well from acquiescence as from formal action.^ An agent may be appointed by parol ; and by subse- quent recognition of his acts such an appointment is usually inferred so as to bind the principal without proof of any corporate act constituting him the agent of the corporation.^ § 188. The appointment of sub-agents. — Without ex- ipress authority or assent by a principal an agent whose 1 Bank of U. S. v. Dandridge, 12 Wheat, 64; Olcott v. Tioga, E. E. Co., 27 N. T. 546; People's Mut. Ins. Co. v. Wescott, 14 Gray, 440; Johnson v. Jones, 23 N. J. Eq. (8 C. E. Green), 216; Macon, etc., B. E. Co. v. Vason, 57 Ga. 314. 2 Hoxt V. Sheldon, 3 Bosw. 267; Mobile & M. E. Co. v. Gilmer, 85 Ala. 422; 5 So. 138; Kitchen, St. Gerardeau, etc., E. E. Co., 59 Mo. 514. 3 Goodwin v. Un. Screw Co., 34 N. H. 378; Bank of IT. S. v. Dandridge, 12 Wheat, 64; Tarborough v. Bank of Eng., 16 East 6; Eoe v. Dean of Eochester, 2 Camp. 96; Detroit v. Jackson, 1 Doug. Mich. 106; Troy Turnp. & E. E. Co. T. McChesney, 21 Wend. 296; Warren v. Ocean Ins. Co., 16 Me. 489; Badger v. B'k of Cumberland, 26 Id. 428; Bank of Lyons v. Demmon, Hill & Denio, 398; Burgess v. Pue, 2 Gill, 254; Elysville Mfg. Co. v. Okisko, 1 Md. Ch. 392. " Not only the appointment but the authority of the agent may be implied from the adoption or recognition of his acts by the corporation or its directiors," Equi- table Gas L. Co. V. Baltimore Coal Tar Mfg. Co., 65 Md. 73; 3 A. 106. 206 ' POWER TO CONTRACT. § 189 duties involve the exercise of a discretion or trust cannot delegate them to another. Much of the author- ity of directors is original and underivative. When convened as a board they possess by an irrevocable delegation all the primary and incidental powers con- ferred upon the corporation by its charter, and may delegate to agents of their own appointment the per- formance of any acts the corporation itself may per- form except those requiring the exercise of the per- sonal discretion and Judgment of themselves.^ It is important to understand the dividing line be- tween those acts which involve the trust and discre- tion vested exclusively in the directors and those which may as well be performed by other agents appointed by them. It is their peculiar province to adopt the general policy of the corporation in the carrying out of the purposes for which it is formed, to provide the means therefor, and prescribe the general rules govern- ing the transaction of its business by themselves and all other agents. Although a board is sometimes said to delegate its authority as such to a quorum or to a committee, the designated body can only act in an executive capacity in carrying out the orders of the board. Whenever it ex- ercises any part of the discretionary or legislative power properly belonging to the board, it acts as the board itself, its expression relating back and forming part of the original expression of the will of the whole body.^ § 189. Directors cannot delegate special powers. — The board of directors cannot delegate their power in re- spect to the allotment of shares where that power is ex- pressly conferred upon them by the charter.* And 1 Hoyt V. Thompson, 19 N. Y. 207; Burrill v. Nahant Bank, 2 Mete. 163. * McNeil V. Chamber of Com. (Mass.), 28 N. E. 245, holding that a majority of suoh committee may act and bind the corporation. 8 In re Leeds Bkg. Co. L. E., 1 Ch. 561. §§ 190, 191 EXERCISE OF POWER THROUGH AGENTS. tiOl where no sale of shares for unpaid assessments was. provided for in the charter except upon order of the board of directors, it was held that they could not dele- gate to a committee authority to order such a sale.^^ To authorize a less number than a quorum of the board to aflSx the corporate seal, that duty belonging by the charter to the board of directors, a direction from the board itself is necessary.^ § 190. Executive and ministerial duties may be dele- gated. — But in the mere execution of the corporate powers as contradistinguished from prescribing or legis- lating, there is practically no limit within the charter upon the power of agents properly appointed and authorized by the board. § 191. Nature of business important. — What power should be exclusively exercised by the board of direc- 1 York, etc., R. R. Co. v. Ritchie, 40 Me. 425. ' Van Hook v. Somerville Mfg. Co., 1 Halsey. Ch. 137. The by-laws of a corporation provided that the board of directors or a quorum thereof, might authorize the treasurer to sell its lands and execute proper conveyances under seal, etc. The treasiu-er and board acting in concurrence executed and delivered to one R. a power of attorney providing that he might enter upon all the lots claimed by the corporation under certain conditions, hold and improve the same. It was held that such power could not be delegated, and the instrument by which its delegation to R. was attempted was void. Gillis v. Bailey, 21 N. H. 149. A corporation's charter provided generally for the sale by the treasurer upon order of the board of directors of shares for non-payment of dues and the by-laws made specific provisions and directions to be followed by that oflScial. At a meeting of the directors an order was made giving a committee consist- ing of the president and treasurer, alternative authority to adopt the method pointed out in the charter and by-laws, " or by preliminary employment of an attorney to collect said dues, or in both ways as said committee shall think proper." It appeared that the treasurer adopted and pursued the method pre^ scribed in the charter and by-laws in the sale of the shares under consideration. It was held that "The directors cannot legally delegate the power to a com- mitee to order such sale. And when the order is given by vote of the directors, it should be absolute and not in the alternative such as is shown by the vote given to the committee." Tork, etc., R. R. Co. v. Ritchie 40 Me. 425. See McHeil V. Boston Chamber of Commerce (Mass.) 28 N. E. 245. 208 EXERCISE OF POWER THROUGH AGENTS. § 192 tors and what may be delegated to others depends to a certain extent upon the nature of the business in which it is engaged. Discounting notes being required by a banking com- pany's charter to be the act of the directors, it was held that their authority to do that could not be delegated to an agent.' But where the charter of a railroad company con- ferred upon the president and board of directors all the powers granted to the corporation, it was held that the power to establish rates of freight might be exercised by agents appointed by them.^ After a board of directors have ordered a sale of real estate,^ or a transfer of personal property,* they may authorize a committee or one of their number to make the sale, and such authority necessarily impl^ies the fur- ther authority to execute the requisite conveyances. § 193. Construction of agents' authority. — The various powers of a corporation can only be exercised by tte particular oflBcers or agents designated in the charter, and the acts of other persons assuming to exercise them will be void, or at least voidable.^ 1 Percy v; Millaudon, 3 La. 568. 2 Manchester, etc., K. K. Co. v. Pisk, 33 N. H. 297. s Hoyt V. Thompson, 19 N. T. 207. * BuiTill V. Nahant Bank, 2 Mete. 163. 6 Union Mut. Fire Ins. Co. v. Keyser, 32 N. H. 313. An agent of an insur- ance company expressly authorized to "effect insurance" and " for this pur- pose to survey risks, fix the rate of premiums and issue policies of insurance signed by the president " was held to have authority to make the preliminary contract equally with the company. In the matter of effecting insurance, he was not limited to the mere duty of receiving proposals and transmitting them to his principal. Sanborn v. Fireman's Ins. Co., 16 Gray, 448. See New Eng- land F. & M. Ins. Co. V. Schettler, 38 111. 166. Authority to an officer "to con- vey land to purchasers at his discretion " is sufficient authority to donate land, this word "purchasers" being taken in its broadest sense. State v. Glenn, 18 Nev. 34; IP. 186. In California such discretionary power, it is held cannot be delegated by the directors. Bliss v. Kanweah, etc. , Co., 65 Cal. 502; 4 P. 507. § 193 EXERCISE or POWER THROUGH AGENTS. 209 An agent put in control of a corporation's affairs with lull discretionary powers and subject only to special instructions from the directors, has power to employ laborers and assistants ; and in case of the lack of funds with which to pay them, to execute his principal's note in payment/ If the authority of an agent of a corporation is sought to be inferred from former exercise of a power with the knowledge and acquiescence of his principal, the power will be strictly limited to cases in which he was pre- viously allowed to exercise it, and cannot be extended to dissimilar cases.^ Directors in .control of the affairs of a corporation alone have power to authorize the creation of a lien upon its property to secure borrowed money. An agent engaged in attending to mere routine matters has no such authority without the sanction of the direc- tors,^ A bank is not responsible for a fraud committed by means of forged, fictitious, or paid-up pass books, al- though its treasurer has given currency to them by statements that they correctly represent the sums due.* No servant of a corporation can make it responsible as a. bailee without its consent unless being a depositary is a part of its regular business.^ A general agent of a mining company in the absence of special authority cannot make promissory notes binding on the com- pany.« § 193. Incidental powers and dnties of president. — Usage and custom and the necessities and conveniences of 1 Bates V. Keith Iron Co., 7 Mete. 224. 2 Gillis V. Bayley, 17 N. H. 18. 3 Whitewell v. Warner, 20 Vt. 425. * Com. V. Beading Sav. B'k, 133 Mass. 16. 6 Lloyd V. West Branch Bank, 15 Pa. St. 172. « N. Y. Iron Mine v. Negauee Bank, 39 Mich. 634. 14 210 EXERCISE OF POWER THROUGH AGENTS. § 193^ business attach, to certain corporate officers certain functions independent of any express authority from the board of directors. In the exercise of these they are as much agents of the corporation as if authority so to act were specially delegated. The president for instance, as the chief executive officer of the corporation, may bind it by all acts the performance of which is incidental to his office.^ "When the president of the corporation performs an act pertaining to its business, a presumption exists in favor of the legality of his act. And the same pre- sumption attaches to an act of the vice-president done in the absence of the president, or when he fills a vacancy in the office of president.^ But in order that 1 stokes V. N. J. Pottery Co., 46 N. J. L. 237; Bambrick v. Campbell, 37 Mo. App. 460; Ward v. Davidson, 89 Mo. 445; 10 S. W. 846, Legett v. ST. J. Bkg. Co.,. Saxton Ch. 541; Westerfield v. Kadde, 7 Daly, 326; Bliss v. Kaweah Canal, etc., Co., 65 Cal. 502; 4 P. 507; Blen v. Bear River, etc.. Mining Co., 20 Id. 602; Davis v. Gemmell, 70 Md. 356; 17 A. 2.59. Bisley v. Indianapolis, etc., K. R. Co., 1 Hun, 202; Crump v. V. S. Min. Co., 7 Gratt. 352; Hodges v. Rutland, & Burlington, R. R. Co., 29 Vt. 220; Catlett v. Starr, 70 Tex. 485;" 7 S. W. 844; Ashuelot Mfg. Co. v. Marsh, 1 Cush. 507; Holmes v. Turner Falls Co., 150 Mass. 535; 23 N. E. 305 ; Saltmarsh v. Spaulding, 147 Id. 224; 17 N. E. 316; Bright V. Metairis Cem. Ass'n, 33 La. Ann. 58; Grand Rapids Safety Deposit Co. V. Cincinnati Safe & Lock Co., 45 F. 671; Bridgeport Sav. B'k v. Eldridge, 28 Conn. 556; Un. Mut. Life Ins. Co. v. White, 106 ni. 67; First Nat. B'k v. Hoch, 89 Pa. St. 324. See Second Ave. R. R. Co. v. Mehrbach, 49 N. Y. Supr. 267; Twelfth St. Market Co. v. Jackson, 102 Pa. St. 269. Where a president of a corporation appears as the active agent in the execution of any work, parties^ employed by him have a right to assume that he is acting for the corporation, and that his acts in that respect are its acts, and binding upon it. Solomon R. Co. V. Jones, 30 Kan. 601 ; 2 P. 657. A president of a bank who secures a set- tlement from an indorser on overdue notes held by the bank, by taking new notes signed and indorsed by the same parties, acts as the agent of the bank, and whatever he does within the apparent scope of his authority to obtain new security is binding on the bank which accepts and holds the security. Cake v. Pottsville Bank, 116 Pa. St. 264; 9 A. 302. A bank president has not authority as such to sell the corporation's property, and is liable in damages for loss resultmg from unauthorized sales. First Nat. Bank of Central City v. Lucas, 21 Neb. 280; 31 N. W. 805. But a valid transfer of the property of a corporation may be made by its president, with the knowledge, consent, and acquiescence of the directors and stockholders, though there is no formal transfer under seal, nor any official action taken by the di- rectors or stockholders. Ft. Worth Pub. Co. v. Hettson (Tex.), 14 S. W. 843. 2 Smith v. Smith, 62 IIU 493. In an action against a corporation upon a con- § 193 KXERCISE OF POWER THROUGH AGENTS. 211 the circumstances of a particular ease may be sufficient to raise a presumption of authority in a bank president to bind the bank in matters beyond the scope of his usual authority, the bank must in some manner be a party to the circumstances, or must be chargeable with knowledge of them.^ "When an executive committee is authorized by the stockholders to execute a deed, it may be executed by the president under direction of the committee, it being an act the performance of which properly belonged to the function of the president.^ If the tender of an assessment is made to the president at the office of the corporation during business hours his refusal to accept it will be deemed the refusal of the corporation, in the absence of evidence showing his want of authority to accept it.^ And a conditional subscription accepted by the president will bind the corporate body.* But be- tract made with one who was admitted to be its president and general managing agent, it was lield that this admission was sufficient evidence of his authority to make the contract and tliat it was unnecessary to show any vote or other corpo- rate act giving him such authority. Crowley v. Mining Co., 55 Cal. 273. 1 Wheat V. Bank of Louisville (Ky.), 5 S. W. 305. The purchase and sale of its stock by the president of a national bank, for the purpose of getting the stock into the hands of desirable persons, will not render the bank liable for fraud in its sale, the purchases being accomplished by means of funds of the bank loaned to the president, and the proceeds of the sales applied in payment of such loans, no actual authority or agency being shown and the stock being transferred to the president individually and registered in his name; Eev. St. IT. S. Sec. 5201, moreover, forbidding national banks to purchase or hold their own stock except to secure a bona fide debt. Prosser v. Bank, 109 N. T. 677. A corpora- tion is not bound by the result of a suit brought by its tenant, though it knew of the suit, and its president, without authority from the board of trustees, employed an attorney to look after its interest in the suit. Wilson v. Brook- shire (Ind.), 25 N. E. 131. A resolution of a board of directors authorizing a director "to make contracts of sale of the lands of the company," does not au- thorize him to convey land as the attorney in fact of the corporation. Green v. Hugo (Tex.) 17 S. W. 79. 2 Merchant's B'k, etc., v. Goddin, 76 Va. 503. See also Deller v. Staten, Island, etc., Club, 56 Hun, 647; Shaver v. Hardin (la.), 48 N. W. 68. 3 Mitchell V. Vt. Cooper Min. Co., 67 N. Y. 280. See Plumb v. Cattaraugus Co. Mut. Ins. Co., 18 N. Y. 392; Dougherty v. Hunter, 54 Pa. St. 380. * Pittsburgh, etc., R. E. Co. v. Stewart, 41 Pa. St. 54. 212 EXERCISE OF POWEE THROUGH AGENTS. § 193 fore he can indorse and negotiate promissory notes ' in behalf of the corporation, or execute a mortgage upon its property ^, it must in general be shown that authority to do so has been given him. Nor can he jointly with the treasurer confess judgment against the corporation, ^ or execute a power of attorney authorizing another to do so.* But special authority for that purpose is not required. The fact that he is the general manager of the corporate concern attending all its ordinary business includes an authority to give, in the name of the cor- poration, a promissory note for indebtedness arising in the course of business.^ The president of a railroad company acting as its general financial agent in the matter of transferring its assets and raising funds for paying the expenses of its road, may indorse and sign notes and mortgages given to the company in aid of the enterprises." The pres- 1 Nat. Bank v. Navassa, etc., Co., 56 Hun, 136; Joliet E. L. & P. Co. v. In- galls, 23 111. App. 45; Lawrenceville, etc., Co. v. Parker, 32 N. Y. St. R. 234; 10 K. T. S. 831. Bacon v. Miss. Ins. Co., 31 Miss. 116; In re Seymour (Mich.), 47 N. W. 321; McCuUough v. Moss, 5 Denio, 567; Marine Bank v. Clements, 3 Bosw. 600. Compare Fitzgerald v. Construction Co., 11 S. Ct. 36; Siebe v. Mach. Wks. (Cal.), 25 P. 14. 2 England v. Dearborn, 41 Mass. 590; 6 N. E. 837, in which the transaction was not considered any more binding upon the corporation by the fact that the president was also treasm'er. 8 Adams v. Cross-Wood Pr. Co., 27 111. App. 313. But in Joliet El. Light & Powder Co. v. Ingalls, 23 111. App. 45, it was held prima facie sufficient to authorize entry of judgment where judgment notes of a corporation, with war- rants of attorney authorizing confessions of judgment, pm^orted to have been signed and executed by the president of the company and attested by the secre- tary and sealed with the corporate seal by order of the directors. ^ Joliet E. L. & P. Co. v. Ingalls, supra. 5 Castle V. Belfast Foundry Co., 72 Me. 167. And a corporation which has executed by its president a contract, by which it agrees to give its judgment note thereby authorizes its president to execute the warrant of power of attorney at- tached to such note. McDonald v. Chisholm, 131 111. 273, 23 N. E. 596. 6 Irwin V. Bailey, 8 Biss. 523. But the president of a railroad company has no power by virtue of his office merely to let a contract for the construction of its road. Templin v. C. B. & P. R. Co., 73 la. 548; 35 N. W. 634; Griffith v. Same, 74 la. 85; 36 N. W. 901. Nor to direct an agent to make an agreement with a firm to take up labor tickets of the company. Stanley v. Sheffield, L. I. & C. Co., 83 Ala. 200; 4 So. 34. § 194 EXERCISE OP POAVBR THROUGH AGENTS. 213 ident and cashier of a bank have no power to release an indorser from his liability as such. It is not part of their duties to make such agreements. It belongs to the board of directors to provide the terms and con- ditions for loaning money and to allow the president and cashier to alter these terms would be taking it out of the hands of those into whose keeping it has been given by the stockholders.' Whatever means are necessary and convenient for the execution of the powers given to the president or other agent, he has as good a right to employ as if the manner and instrumen,ts had been specified.^ Where not restricted in the charter or by-laws the president ordinarily has authority to employ and dismiss counsel in defending and prosecuting suits.^ In some corporations the business management de- volves upon the vice-president while the president is only formally at the head in the graver and more im- portant matters. When such is the case the president cannot represent the corporation in those matters which usually appertain to that office, but the same devolves upon the vice-president.* § 194, Secretary, treasurer, superintendent, etc. — The duties belonging to other officers of a corporation are 1 Bank of U. S. v. Dunn, 6 Pet. 51; Manderson v. Com. Bank of Pa., 28 Pa. St. 379; Hyde v. Larkin, 35 Mo. App. 365. 2 Augusta Bank v. Hamblet, 35 Me. 491. 3 Merrill v. Consumer's Coal Co., 114 N. Y. 216; 21 N. E. 155; Western B'k of Mo. V. Gilstrap, 45 Mo. 419; Coleman v. West Va. Oil, etc., Co., 25 W. Va. 148; Am. Ins. Co. v. Oakley, 9 Paige Ch. 496; Mumford v. Hawkins, 5 Denio, 355. * The directors of an insolvent corporation authorized its vice-president "to use all means and do all acts and make all deeds by him deemed necessary or proper to serve the best interest of the association, and to use the corporate seal for such purpose ; " provided, that the treasurer " be authorized to receive and disburse all moneys belonging to the association, and act as manager of the same imtil its business is closed." Held, that the vice-president was authorized to execute an assignment for the benefit of creditors. Huse v. Ames (Mo.), 15 S. W. 965. 214 EXERCISE OF POWER THROUGH AGENTS. § 194 such as are fixed in the constating instruments or are customarily assigned to them. There is a public rec- ognition of the propriety of the secretary, cashier,^ treasurer and the like having charge of certain branches of the corporate business and those with whom they deal may safely attribute to each of them the requisite authority within the scope of duties usually performed by similar oflScers in corporations and business estab- lishments generally. The natural and legal presump- tions heretofore pointed out as being raised by allowing those official functions to be exercised furnish third parties without notice of any limitations upon the usual powers ample protection as against the corporation. There is no general or certain rule for measuring and defining the duties of secretaries of corporations. Their duties vary sometimes according to the character of the corporate enterprise, and in other cases according to the division of duties made in the particular company. Secretaries of ordinary trading corporations often have a considerable scope of authority, the buying of mer- chandise, making of contracts, superintendence of other employes and the like being included among their duties.^ In mining and transportation companies where 1 It Is not responsible negligence in a cashier of a bank to pay the overdraft of a customer of character and business integrity, though not having property sub- ject to execution, as reasonable conformity to the customs and methods in vogue among prudent bankers is the degree of diligence required in such cases, and the directors cannot be made liable on mere proof that an account was over- drawn, and a loss thereby sustained. Wallace v. Lincoln Sav. Bank (Tenn.), 15 S. W. 448. A cashier has not authority to assure an indorsee of a note payable to the bank that he will not be held liable. Thompson v. McKee, 5 Dak. 172 ; 37 TSr. W. 367. Where It was shown that the cashier had no authority to make checks, and that the checks were paid by the drawee, defendants were prima /acie liable in trover for their face amount. Andersen v. Kissam, 35 F. 699, holding also that the fact that some of the moneys thus deposited by the cashier were paid in by defendants at his request does not affect their liability, or go in mitigation of damages. 2 See Salt Lake F. & M. Co. v. Mammoth M. Co. (Utah), 23 P. 760, defendant § 194 EXERCISE OF I'OWER THROUGH AGENTS. 215 there are iisaally a greater number of departments and heads of departments their duties are usually more limited.^ The duties of superintendents and general managers are usually very indefinite, and, as in the case of secretaries, vary so as to conform to the character and necessities of particular corporations. Sometimes a superintendent is in entire control of the business of the corporation in which case he virtually is the corpo- ration and his acts bind it almost without limit.^ But he has no right to use the corporate name or funds in his individual affairs, however extensive his powers.® Tield liable for work and materials furnished at request of secretary who was also ■general manager. Washanon L. & L. Co. v. Sloan, (Pa.) 7 A. 102, company held liable on note given by secretary and treasm-er, but holding that they had no implied authority to release without consideration one of several makers of a note owned by the corporation. 1 In Barnett Hoares 1 1 Kyd on Corp. 108; 7 Wend. 412, holding that corporations might be ten- ants in common in personalty but not deciding as to real estate, because tha question was not before the court. § 209 ACQUISITION AND DISPOSAL OP PROPERTY. 233' ations known to the common law ; and their common possession was never severed until the original position produced inconveniences.^ The title to land acquired by a corporation is vested in the corporate entity itself and not in the members. The latter are not tenants in common and cannot even by joint and unanimous deed convey the legal title. One who holds all the stock is not competent to con- vey the title of the corporation in his own name.^ The mere incorporation of tenants in common does not ipsa facto vest in the corporation formed by them, the title to their estate. There must be a conveyance by proper deeds from the individuals to the corporation.^ But if a conveyance is made to a corporation aggregate for their own lives, this is no estate for life but a fee simple, for they and their successors may continue to exist as a corporation forever.* If, in such case, the corporation should have been dissolved at common law, the land would have reverted to the grantor or his heirs ; but the corporation could have defeated a reverter by alienation in fee.^ Lands conveyed to capital stock corporations for valuable con- sideration, to not revert to the vendor on dissolution. They are sold and the proceeds applied to the payment of creditors' claims if required for that purpose, and if not needed distributed to the stockholders.® No formal acceptance of a grant on the part of a corporation is required. Grants made to a corporation are presumed to be mutually beneficial to it and the grantor. 1 1 Kyd on Corp. 108. » Supra, § 5. 8 Manahan V. Varnum, 11 Gray, Mass. 405; Sefflngwell v. Elliott, 8 Pick. (Mass.) 451. See Bangor House Proprietary v. Hinckley, 12 Me. 385; Hoiland V. Craft, 3 Gray, 163; Contra, Second Cong. Ch. Soc. v. Waring, 24 Pick. 304. " Bac. Abr. Tit. Corporations, etc: See First Baptist Soc. v. Hazen, 100 Mass.. ■332; School Dist. v. Everett, 52 Mich. 314. 5 Preston on Estates, 50, 250. 6 Infra, § 1010. 234 ACQUISITION AND DISPOSAL OF PEOPBETY. § 210 § 210. Foreign corporations as landowners. — On a ques- tion whether a foreign corporation is entitled by its charter to hold land in a particular state, the court will give its own construction to the charter and will be governed by the decision of the courts of the state under whose laws the corporation was created only so far as the reasons upon which they were founded en- title them to consideration.^ But a state may place whatever restrictions it pleases upon the power of foreign corporations to hold lands, or may prohibit such holding entirely.^ And where a corporation is pro- hibited from owning land directly in a state, it cannot exercise ownership indirectly as by obtaining a major- ity of the stock of a domestic corporation.^ But a cor- porate deed in a chain of title though executed by a foreign corporation will be presumed to be valid though made by a foreign corporation.* If the charter of a foreign corporation does not per- mit it to acquire real estate by ordinary methods, it cannot take it by devise in another state.^ But where the laws of the state where a devise to a foreign cor- poration is made allow it, it is valid notwithstanding a prohibition in its charter or in the laws of the state of its creation.® 1 Boyce v. City of St. Louis, 29 Barb. 650; Nicholson v. Leavitt, 4 Sandf. 276 ; White v. Howard, 38 Conn. 342; Com. v. N. T. L. E. & W. E. Co., 114 ; Pa. St. 340; 1 Ry. & Corp. L. J. 108; 7 A. 756. - It was held that statutes authorizing railroads to take land for their right of way do not apply to foreign corporations. Holbert v. St. K. 0. & N. K. Co., 45 la. 23. An educational institution chartered in another state not having a cap- ital stock was held not prohibited from owning real estate in Illinois within the terms of sec. 26 III. corporation act of 1872. Santa Clara Fern. Acad. v. Sullivan, 116 111. 375; 6N. E. 188. » pom. V. N. T. L. E. & W. E. Co., 114 Pa. St. 340. * Tarpey v. Deseret Salt Co., (Utah) 17 P. 651. 6 Boyce v. St. Louis, 29 Barb. 650; Starkweather v. Am. Bible Soc, 72 111. 50. 8 Am. Bible Soc. v. Marshall, 15 O. St. 537. Thompson v. Swoope, 24 Pa. St. 474; Sherwood v. Am. Bible Soc, 4 Abb. App. Gas. 227. And though duly .authorized by its charter, if contrary to law of the state where made, the devise § 211 ACQUISITION AND DISPOSAL OF PKOPERTY. 235 §211. Capacity to hold as trustee. Title as cestui que trust. — It seems that in England a corporation cannot assume to designate an agent to perform the duties of an ex- ecutor or administrator with the will annexed under an appointment as such.^ But with respect to trusts which are not strictly matters of personal confidence, the former rule has been relaxed and corporations may now take property in trust for others where they might take it directly and absolutely for their own purposes. " Where a corporation has legal capacity to take real and personal estate, then it may take and hold it upon trust in the same manner and to the same extent as a private individual may do." ^ If property be granted to a corporation in trust partly for itself and partly for another corporation, it may hold it and execute the trust.^ And one incorporated mission society may take and hold property in trust for another.* ^ It was settled by the early decisions in this country, that corporations might execute trusts of a religious and charitable nature if consistent with the objects of their creation.^ And equity will not allow a trust to is void. See United States v. Fox, 94 U. S. 315, holding a devise of land to the government of the United States to be void. 1 Georgetown College v. Brown, 34 Md. 450; Matter of Thompson, 33 Barb. 534. 2 Vidal V. G-irard's Exrs., 2 How. 127, 187, per Justice Story. A bequest of all the residue of the testator's estate to trustees, to be converted into personalty, and the income derived therefrom to be paid to the board of water commissioners of Detroit, or their successors, to be used by them in beautifying and improving the grounds whereon the water works are situated, and for the maintenance of :a library, is valid; being a trust of which the subject, the beneficiaries, and the •purpose are clearly defined, and the beneficiaries having been expressly author- ized by the legislature to accept and expend the fund arising thence. Penny v. Croul, 76 Mich. 431; 43 N. W. 649. 8 Matter of Howe, 1 Paige, 214. See In re Tweed, 12 N. Y. S. 642. 4 Sheldon v. Chappel, 47 Hun, 59. 5 Robertson v. Bullions, 11 N. T. 243; Chaplin v. School Dist., etc., 35 N. H. 445 ; Phillips Academy v. King, 12 Mass. 546. A township being a distinct municipal corporation, with power to receive and expend funds coming into its possession, for school purposes, a devise to it for the support of the common 236 ACQUISITION AND DISPOSAL OP PROPERTY. § 212' fail merely because a corporation appointed as trustee is incompetent from lack of legal capacity to execute the trust. The court will appoint a proper trustee ta carry it out,^ § 212. Must have capacity to execute the trust.— Notwith- standing the general rule that whoever is capable of taking the legal title or beneficial interest in property may take the same in trust for others, it does not follow that such party is capable of performing or executing the trust. The ability or competency ta execute the trust is the real test in determining whether a corporation may take. If, for instance, the law does not allow aliens and non-residents to become trustees, the prohibition would apply to foreign corporations, though the latter be authorized to purchase real estate for its necessary uses. The general rule of qualification and capacity of corporations as trustees applies and schoots is germane to the purpose of its creation, and is not void for want of capacity in the devisee to hold. Skinner v. Harrison, 116 Ind. 139; 18 N. E. 529. The charter of the North American Relief Society for the Indigent Jews in Jerusalem contains by implication power to ameliorate their condition by the contribution of money for the purposes of education, and hence it can take money left it by will for that purpose. Riker v. Leo, 1 N. T. S. 128. A legacy of $30,000 " to the trustees of Bloomfield Academy to be appropri- ated at their discretion in founding a free public library in the town of Show- hegan," is vested absolutely in the donee. Dascomb v. Marston, (Me.) 13 A. 888. Where land was given an association to establish a school, and the association built on it, and afterwards obtained a charter, which was allowed to lapse, it was held that the obtaining of the charter put the association in abeyance, and at its expiration the land revested in the members of the association, and did not revert to the donor. Bates v. Palmetto Soc. , (S. C.) 6 S. E. 327. Testator gave legacies to named educational and charitable institutions, and provided for the accumulation of a trust fund, from the income of which one- quarter should go to " educational institutions similar to those mentioned," and one-quarter to "charitable institutions similar to those mentioned." Held, that it is for the trustee to decide to which of similar institutions the fund should be distributed, and the proportions to be given to each. Rhode Island Hospital Trust Co. V. Olney, (R. I.) 13 A. 118. 1 Infi-a, Ch. 37. Story Eq. Jur., sees. 98, 976; McCarter v. Orphan Asylum Soc, 9 Cow. 437; Crocheron v. Jaques, 3 Edw. 207; Bundy v. Bundy, 28 N. Y. 410; Perry on Trusts, 38. I 213 ACQUISITION AND DISPOSAL OF PROPERTY. 237 determines who and in what cases they may be cestuis ■que trust and a corporation may be a beneficiary in a trust estate where it could legally acquire and hold the legal title. A simple bequest of money to be paid to a foreign corporation is valid even if the law of the state where the will is made forbids the execution of such a trust ■as that, for which the corporation is created.^ They cannot evade statutory limitations upon their right to take the legal title to lands by taking the legal title to trustees and the beneficial interest to them- selves.^ § 213. A liberal rule with respect to charitable trusts But to this rule there is an important exception in favor of charitable trusts. A limitation of one charity upon another is not an infringement of the rule against perpe- tuities.^ In these the cestuis qiie trust are not and need not be capable of taking the legal title, as when prop- erty is given in trust for the poor of a parish or for the education of youth, or for pious uses, or for any ■charitable purpose. The beneficiaries are generally unknown, uncertain, changing and incapable of taking or dealing with the legal title. Such trusts are valid in equity ; and courts of equity will administer them and protect the rights of the cestuis que trust.* 1 Trustees Presby. Oh. v. Guthrie, 6 L. R. An. 321; 86 Va. 125; Bank of Augusta V. Earle, 13 Pet. 521 ; Cowell v. Colo. Spgs. Co., 100 IT. S. 55. - Hill on Trustees, 52; Lewin on Trusts, 36. 3 Storrs Agr. School v. Whitney, 54 Conn. 342; 8 A. 141; so a conveyance of land to the trustee of an Incorporated religious society, to be used for the erec- tion of a church building, does not violate the statutes against suspension of the power of alienation, for the reason that such trustees are within the meaning of the statutes, "persons in being, by whom an absolute fee in possession " coidd at any time be conveyed through the agency of the circuit court, as prescribed in the statutes. Fadness v. Braunborg, 73 Wis. 257. * " It is immaterial how uncertain, indefinite, and vague the cestuis que trust or final beneficiaries of a charitable trust are, provided there is a legal mode of Tendering them certain by means of trustees appointed or to be appointed. In 238 ACQUISITION AND DISPOSAL OF PKOPEBTY. § 214 § 214. How affected by doctrine of cy pres. — The doc- trine of cy pres has an important bearing upon all be- other words, it is immaterial how uncertain the beneficiaries or objects are, if the court, by a true construction of the instrument, has power to appoint trus- tees to exercise the discretion or power of making the beneficiaries as certain as the nature of the trust requires them to be. Uncertainty as to the individual beneficiaries is characteristic of a charitable use." Beckwith v. St. Phillips Parish, 69 Ga. 564; Miller v. Atchinson, 63 N. Car. 537. See also McLain v. School Directors, 51 Pa. St. 196. In order that a bequest to a town for the purpose of investing the principal and applying the income to a specific object may take effect as an absolute gift to the town, the gift must be made for some one or all of the purposes for which the town was incorporated ; and where it is under no legal liability to support persons who do not come within the statutory definition of poor persons, a bequest " for the support of the poor of the town " cannot take effect as an absolute gift to the town. Reversing 8 N. Y. S. 772.. RuGBE, C. J. , and Finch and Gray, J J. , dissenting, Fosdick v. Town of Hemp- stead (N. Y.) 26 N. E. 801; State v. Griffith, 2 Del. Ch. 392. A bequest " to the Am. Bible Soc. . . . to be used by the said society for the promulgation of the Holy Bible," is not void as a gift in trust, without a definite or ascertainable beneficiary capable of enforcing the trust, since the gift was limited to the precise use for which the society was incorporated. In re Look, 54 Hun, 635; 7 N.-T. S. 298. See also Wetmore v. K. Y. Inst, for the Blind, 18 N. Y. St. R. 732; 3 N. Y. S. 179; Riker v. Leo, 115 N. Y. 93; 21 N. E. 719; Rev. St. Wis. 1849, c. 57, sec. 11, subd. 5, provided that "express trusts may be created for the beneficial interest of any person or persons, when such trust is fully expressed," etc. Held, that a conveyance to the trustees of an incorporated religious society, for the use of the "members" sufficiently designated the beneficiaries. Fadness v. Braunborg, 73 Wis. 257; 41 N. W. 84. A devise to a lodge of Odd Fellows " for the benefit of the widows and or- phans," is for the widows and orphans of deceased members of that lodge, and is sufficiently definite to be sustained as a charity. Heiskell v. Chickasaw Lodge, 3 Pickle, Tenn. 668; 11 S. W. 825; Wood v. Hammond, (R. I.) 17 A. 324; App. of Goodrich, 57 Conn. 275; 18 A. 49. A bequest to the " trustees and managers of the Phil. Water Works" for the benefit of the corporation is invalid, such a bequest not being for a public charity, and there being no corporation of that name, as the water works are owned and managed by the city of Phil., which will not be presumed to be the object of the bounty. Doughten v. Vandever, 5 Del. Ch. 51. A legacy to the " Fund for Disabled Ministers of the Presby. Ch." will go to the " Presby. Board of Relief for Disabled Ministers and the Widows and Orphans of Deceased Ministers," where it appears that the latter title is the name of the only corpo- ration engaged in relieving Presby. Ministers; that testatrix knew and approved of this corporation; and that there was no such corporation or society as that named in the will. Woman's Un. MfSs. Soc. v. Mead, 131 111. .S3; 23 N. E. 603. A testatrix bequeathed legacies to the "trustees of the Orphans' Asylum of Phil, in the State of Penn.," the "trustees of the Widows' Asylum" of the same place, and to the " trustees of the Marine Soc." of the same city and state, for the benefit of those various institutions. Held, that these bequests were for § 214 ACQUISITION AND DISPOSAL OJ? PKOPEKTY. 239' quests to corporations for charitable uses where any uncertainty exists as to the intended beneficiary.^ public charities, and that the " Orphan Soc. of Phil." the " Indigent Widows' and Single Women's Soc." and the "Penn. Seaman's Friend Soc." answered with sufficient certainty the objects designated in the will and would take under it. Doughten v. Vandever, 5 Del. Ch. 51. See also Trustees of the General Assembly of The Presby. Ch. v. Guthrie, 86 Va. 125; 10 S. E. 318. Compare Stratton v, Physio-Medical College, 149 Mass. 505; 21 N. E. 874; In re Fuller's Will, 75 Wis. 431; 44 N. W. 304; Dulany v. Middleton, (Md.) 19 A. 146; People V. Simonson, 28 N. Y. St. Rep. 97; 7 N. Y. S. 861. 1 A bequest to such charitable institutions in the city of St. Louis as " my executor shall deem worthy" held to be sufficiently definite. Howe v. Wilson, 91 Mo. 45; 3 S. W. 390. See also Hunt v. Fowler, 121 111. 209; i2 N. E. 331. A grant of land " upon which shall be erected a college free from all sectional or political influence " is in its nature a charitable trust, and as such it is no ob- jection that the beneficiaries are uncertain or unknown. Raley v. County of Umatilla, 15 Or. 172; 13 P. 890. A bequest of one half of the revenue of an estate to the Presby. Committee of Publication at Richmond, Va., is a valid bequest not void for uncertainty, and was intended to be a bequest to the trustee of the Presby. Committee of Publica- tion, which by its charter had a legal capacity to take, and is entitled (;o take the same. Wilson v. Perry (W. Va. ), 1 S. E. 302. But charitable bequests of $500 to enclose the Mount Pleasant Church and graveyard, $ 4,000 to purchase a parsonage for Mt. Pleasant Church,. $250 for the Presby. Sunday School at Union, $250 for the Sunday School at Centerville, $250 for the Sunday School at Fairview School House, $300 for the Home Missions of the Presby. Ch. and the remaining half of the residue of said estate to purchase a parsonage at Union, are uncertain as to the beneficiaries, and therefore void. Wilson v. Perry, 29 W. Va. 169; 1 S. E. 302. See also Vt. Bap. State Conv. v. Ladd's Estate, 58 Vt. 95; 4 A. 634; King V. Grant, 55 Conn. 156; 10 A. 505. A testator bequeathed a sum of money to a certain church the income thereof "to be applied to the Sunday School belonging to or attached to said church." The church was a corporate body, but the Sunday School was not. The Sunday School having been shown to be an integral part of the church organization, there was not such uncertainty as to, and want of legal identification of, the ob- ject to be benefited as would render the bequest void. Eutaw Place Bap. Ch. of Bait. City v. Shively, 67 Md. 493; 10 A. 244. A bequest to the churches of a certain denomination in a city for the care of their poor does not create and perpetuate a fund not recognized by law, but is an ordinary bequest for pious uses recognized by the La. Civ. Code and favored by the courts of that state. Succession of Auch, 39 La. Ann. 1043; 3 So. 227. • Where a testator bequeathed a portion of his estate " to the poor of the city of Green Bay," and there were no city paupers nor a poor fund in the city of Green Bay at the time of the testator's death, it was held that the bequest was void for uncertain. In re HofEen's Estate, (Wis.) 36 N. W. 407. A will which provided : " I do will and bequeath to the Meth. Epis. Ch. South, to be applied to foreign missions, all my property, real and personal, after the payment of my just debts, for their use and benefit exclusively," was held suffi- cient indication of testator's purpose. Kinney v. Kinney's Ex'r, 86 Ky. 610; 6- S. W. 593. 240 ACQUISITION AND DISPOSAL OF PBOPEETY. § 214 It is well settled that in trusts created for other than charitable purposes for the benefit of a natural person, it is not always necessary that the cestui que trust should be in existence at the time of its creation.^ And a devise for a charitable use to churchwardens, although not a corporation capable in law of holding and trans- mitting property, will be sustained.^ So the devise may be made to a corporation to be ■organized after the death of the donor, or to certain •officers for their successors in office ; or if they are in- capable of executing the trust then to a corporation to be formed for the purpose.* A discretion vested In executors and trustees to bestow upon a charitable cor- poration directed by the will to be organized, the whole of the residuary estate, -or such part as they may deem expedient, does not render the gift invalid for uncertainty. Tilden v. Green, 18 N. T. S. Eep. 752; 2 N. T. S. 584. The residuary clause of a will was — " I devise the remainder of my estate to the Old Ladies' Home, at present near Eincon Hill at St. Mary's Hospital." It was shown that a corporation named the "Sisters of Mercy" conducted an establishment generally known as "St. Mary's Hospital," of which one depart- .rnent was called " Old Ladles' Home," and that there was no other Old Ladies' Home in the vicinity of Eicon' Hill. It was held that testatrix meant to make , such corporation her residuary legatee, and that the bequest was valid. In re Gibson's Estate, 75 Cal. 329; 17 P. 438. ^ Ashhurst v. Given, 5 Watts & S., Pa. 329; Carson v. Carson, 1 Wins. N. 'Car. 24. 2 Atty.-Gen. v. Oglander, 3 Bro. Oh. 166; Atty.-Gen. v. Green, 2 Bro. Ch. 492; Atty.-Gen. v.Boultbee, 2 Ves. Jr. 380; Frierv. Peacock, Finch, 245; Duke, 355; Atty.-Gen. v. Wa'nsay, 15 Ves. 232; Burrill v. Boardman, 43 N. T. 254. ' Enssel v. Allen, 107 U. S. 163. * Seda V. Huble, 75 la. 429; 39 N. W. 685; Dascomb v. Marston, SO Me. 223; 13 A. 888.. See also Weeks v. Hobson, 150 Mass. 877; 23 N. E. 215; Field v. Drew Tlieological Seminary, 41 F. 371 ; Sheldon v. Chappell, 47 Hun. 59; Penn. V. Wadhams, (Or.) 25 P. 720; Inglis v. Sailors' Snug Harbor, 3 Pet. 99; White V. White, 1 Bro. Ch. 12; Atty.-Gen. v. Downing, Amb. 550; Tilden v. Green, 18 N. Y. St. Eep. 752; 2 N. Y. S. 584; Fadness v. Braunborg, 73 Wis. 257-, Atty.-Gen. v. Bayer, 3 Ves. 714. A bequest to the trustees of a church or unincorporated religious society is void in West Va. and lapse of time and acquiescence of the testator's residuary legatee in such bequest do not aid it. Mong. v. Boush, 29 W. Va. 119; 11 S. E. fl06. Foreign corporations may take bequests of charities under a will made in West Va. when and to the extent authorized, by their charters. University v. Tucker, 31 W. Va. 621; 8 S. E. 410. J 215 ACQUISITION AND DISPOSAL OF PKOPEKTY. 241 With respect to- the capacity for taking and holding and the title acquired, it is immaterial" as to the means of acquisition of property whether by devise, bequest, gift, inter vivos, gift causa mortis, or investment of cor- porate funds or by the exercise of eminent domain. § 215. Execation of charitable uses. — In order to prop- erly discuss the functions and duties of corporations in the administration of charitable uses, it becomes nec- essary to define the term " charity." In its Restricted sense, it means relief or alms to the poor ; but a charity in a legal sense may be more fully defined as a gift to be applied, consistently with existing laws, for the benefit of an indefinite number of persons, — either by bringing their hearts under the influence of education or religion, by relieving their bodies from disease, suffering or con- straint, by assisting them to establish themselves for life, or by erecting or maintaining public buildings or works, or otherwise lessening the burdens of government. It is immaterial whether the purpose is called charitable in the gift itself, if it is so described as to show that it is charitable in its nature." ^ A will containing a devise of land to a religious society by the words, " At the death of my wife, I give and devise," etc., provided that the land devised should be used as a parsonage by the society, and that when the society shall cease to use it as such it should revert to the testator's heirs. It was held, that the devise did not vest till the death of testator's wife, and that the society, hav- ing been incorporated during her life, was competent to take under the devise, although not incorporated at the time of testator's death. Longheed v. Dyke- man's Bap. Ch. & Soc. 12 If. T. S. 207. When subscriptions for the benefit of a business corporation to be organized in the future are made payable to a designated agent he becomes,trustee of an express tnist, and may enforce such subscriptions by suit in his own name ac- cording to their terms. West v. Crawford, 80 Cal. 20. 1 Jackson v. Phillips, 14 Allen, 556, per Justice Geet. A trust for the purpose of public religious worship and other charitable uses is one of which the courts will take cognizance and assume control for the purpose of preventing its abuse, perversion or destruction. Mannixv. Purcell, 46 Ohio St. 102; 19 N. E. 572; Succession of Auch., 39 La. Ann. 1043; Seda v. Huble, 75 la. 429; Hutchin's Ex'r V. George, 44 N. J. Eq. 124; Kinney v. Kinney's Ex'r, 86 Ky. 610; 6 S. W. 593. 16 242 ACQUISITION AND DISPOSAL OP PflOPBKTY. § 216 The importance attached to charity by the English courts of chancery arises from the statute of Elizabeth under which those purposes are considered charitable which are enumerated in the statute or which by anal- ogy are deemed within its spirit or intendment, i § 216. Administration of charities by corporations. — By reason of their continuity of existence and immunity from th^se accidents which are liable to terminate the trust or interrupt its enjoyment when the trustees are natural persons, corporations are the safest and most convenient mediums through which to effectuate the in- tentions of donors of funds devoted to general charity. Owing to these superior facilities the trustees of a charity sometimes have themselves incorporated in order to carry out the intention of the donor with more con- venience. There is nothing illegal in their doing so. True, it is a delegation of the trust which ordinarily is not allowable ; but such charities being matters of pub- lic concern, to a certain extent, the legislature has power to direct their administration and to make all needful provisions and rules for the preservation and application of the funds with the consent of those in whom is vested the legal title. But it may not alter the uses to which they have been devoted or establish any changes which could not, by a fair construction, have been contemplated by the donor. An unincorporated institution organized, administered, and maintained by a municipal corporation, and known as " The Insane Asylum," may be the object of a charitabft bequest. Succession of Vance, 39 La. Ann. 371 ; 2 So. 54. A gift of real estate in Missouri, to the Mo. Historical Soc. and Academy of Science of St. Louis, being for the promotion of science, education and the diffusion of useful knowledge, is valid as a charity, though not so denominated. in the deed. Mo. His. Soc. v. Academy of Science, 94 Mo. 459; 8 S. W. 346. 1 Tudor Char. Uses, 2nd Ed. 4; Morice v. Bishop of Durham, Ves. 405. Penn. Laws, Act of Apr. 26, 1855, declares bequests to charities void when testator dies within one calendar month after making his will. Craig v. Libby, (Pa.) 9 A. 171. See also Shields v. McAuley, 37 F. ,302. Compare Porter v. Carolin, 50 Hun, 603; 2 N. Y. S. 791. Laws N. Y. 1848; Ch. 319, renders in- § 217 ACQUISITION AND DISPOSAL OF PKOPERTY. 243 The trustees have such vested rights under the gift of the donor and the act of incorporation, that they cannot be controlled or interfered with by subsequent special legislation.^ § 217. Corporate powers with respect to trusts cannot be enlarged.— A corporation engaged in the execution of a trust cannot be enlarged by an addition to its objects and still retain authority over the original charity. But where a municipal corporation is the devisee of an estate ill trust for charitable uses, its right to hold property devised to it is not destroyed by a change of its name or an enlargement of its area or an increase in the number of its incorporators, the identity of the corporation remaining the same.^ Funds devoted to charitable relief and education of indigent classes cannot be diverted by the trustees charged with the execution of the trust to general edu- cational purposes. Thus, where a fund was devised in 1815 with directions to the trustees to invest a portion valid bequests to charitable iustitntious under a will made within two mouths of testator's death. Bruenahan v. Manhattan Col., 53 Hun, 48. See also In re Kavanagh's Will, 53 Hun, 1; Cole v. Frost, 51 Hun, 578. Under a statute which provided that no bequest of more than one half of an estate to charitable institutions should be valid, it was held that when a testa- tor devised all of his estate to his wife absolutely during her life and with re- mainder over after her death, and the payment of her just debts to two religious societies, and the wife died, leaving the entire principal of the estate unused, that the remainders over were valid only to the extent of one half of the estate. McKepwn v. Officer, 6 N. Y. S. 201. See also In re Stile's Estate, 3 N". Y. S. 187. Compare Kine v. Becker, 82 Ga. .563; 9 S. E. 828. 1 Dartmouth College v. Woodward, 4 Wheat. 518; St. John's College v. State, 15 Md. 330; Brown v. Hummel, 6 Pa. 86; State v. Adams, 4 Mo. 570. ^ Girard v. Philadelphia, 8 Wall. 1. In 1769, M. bequeathed his estate in trust to educate poor children. This trust remained in abeyance until 1811, when the legislature incorporated the Orange Humane Soc. to administer it, which it did for 60 years. Act Va., March 27, 1876, assumed to repeal said act of 1811, and to transfer said fund and corporate franchises to Orange County school board. It was held a valid act, because said fund had been dedicated to "public" uses, and said "society" was a "public" corporation. Lewis, J. dissenting. Wambersie v. Orange Humane Society, 84 Va. 446; 5 S. B. 25. 244 ACQUISITION AND DISPOSAL OF PKOPERTY. § 218 of the fund, and apply the proceeds of the investment for the use and support of a " poor school" or " in- stitution " for the benefit of poor children in the town of Zanesville, Ohio, it was held that any permanent appropriation of the proceeds of such fund to aid the public schools of said city, thus lightening the taxes assessed upon property, would be a perversion of the fund from the legitimate objects of the donation, and the court directed a discontinuance of such appropria- tion.! But an obvious distinction exists between thfe objects of a donor's bounty and the means of giving them its benefits ; and a court of equity may direct such altera- tions in the methods of relieving such objects as their altered conditions may require. If a corporation in charge of a trust does not possess adequate powers to meet such changed condition, the state may confer upon it the requisite additional powers without divest- ing it of the legal title. " It cannot admit of a doubt, that where there is a valid devise to a corporation in trust for charitable purposes unaffected by any question as to its validity the sovereign may inter- fere to enforce the execution of the trusts either by changing the administrator if the corporation be dis- solved, or if not by modifying or enlarging its fran- chises provided the trust be not perverted and no wrong done to the beneficiaries. "2 § 218. Yisitorial power over the trust, — Over the trust fund given to corporations to be administered for char- itable purposes or given to trustees, the donor of the trust usually reserves in the instrument by which the trust is created a limited supervision. But even in the 1 Mclntire's Admin, v. Zanesvijle, 17 O. St. 352. 2 G-lrard V. Phil., 7 Wall. 1, 14, per Justice Grieb. § 219 ACQUISITION AND DISPOSAL OP PKOPEETY. 245 absence of such reservation on the institution of such a charity, visitorial jurisdiction arises of common right in England to the founder and his heirs, or to those whom the founder has substituted in place of himself and his heirs.^ The common law right of visitation was recognized in England as early as the beginning of the reign of Edward the Third.^ It was frequently and probably first exercised in the case of religious corporations ; but it does liot exist with respect to them in this country. Though the charities administered by religious denom- inations, are frequently of a public nature, the corpora- tions themselves are reckoned private so far that the government has no more authority to control the dis- position of their ordinary funds than those of private moneyed corporations. The abuse of a charitable trust by a religious corporation may be redressed at the suit of any party in interest by a court of chancery. § 219. Modern view of visitorial power — The classes of corporations which may accept and execute charitable trusts as well as the conditions and limitations upon the right and their duties therein are regulated by statute in most of the states. These are generally intended to prevent the evils resulting from accumulations in the hands of private persons with opportunities thus afforded for abuses of the trust in disregard of the intentions of donors ; to in a measure restrain testators from disin- heriting legal heirs by giving too free vent to fanatical zeal or religious enthusiasm, " in those hours of physical and mental lassitude which often precede dissolution," and to vest the visitorial power in the courts and public authorities rather than in private parties. Their policy 1 Perry on Trusts, 742^ Eden v. Foster, 2 P. Wms. 326; Atty.-Gen. v. Gaunt, aSwanst. 148. « Year Books, 3, fol. 69, 70. 246 ACQUISITION AND DISPOSAL OF PROPERTY, § 219 is similar to that which led to the enactment of the English statute of uses during the reign of Queen Eliza - .beth.i Various reasons have been assigned for the enact- ment of that statute. One of the reasons probably was that 'the power and influence of the ecclesiastical bodies charged with the administration of temporalities overawed the proper authorities, and by this means escaped all checks and enjoyed immunity from redress for breaches of trust and neglect of duty to the chari- table objects. And one object for vesting jurisdiction in the High Court of Chancery doubtless was to remove the visitorial power beyond the reach of corrupt in- fluence and intimidation, which neither the founders themselves, their heirs, nor inferior ecclesiastical tribu- ijals were capable of resisting. These dangers, while they exist in this country to a limited extent, are much less to be feared. But the courts of ordinary jurisdiction are given ample power and provided with adequate remedies to reach and redress every case of abuse, and are fully capable of exercising the visitorial duties.'^ 1 After reciting the uses to which property of every kind had been "given, hmited, appointed and assigned by the Queen and other well disposed persons for some or other of the purposes ' ' therein specified (enumerating them), and that the lands and effects so appropriated had not been duly employed, that statute proceeds to vest visitorial power with respect to the execution of the funds so devoted in such bishops and other church dignitaries and other persons as should be appointed and commissioned by the Lord Chancellor, Lord Keeper of the Great Seal, etc. 43 Eliz. Oh. 4; Boyle pp. 1-12. 2 It would not serve any useful purpose, even if it were practicable or germane to our subject, to notice the statutory provisions of the several states. Chari- table tnists, however, subject to tha directions and limitations provided are usu- ally favored in several respects. The provisions designed to prevent perpetui- ties do not as a general rule, apply to them as in the case of other trusts. The doctrine of cy pres which is still recognized to a limited extent owes its inven- tion to a disposition of courts to give effect to charitable bequests under circum- stances where ordinary trusts would fail for uncertainty. Charitable bequests are not, however, favored or even recognized in every state in the Union. Such dispositions of property by testators were not until recently recognized as valid in Md. or Va. ■§ 220 ACQUISITION AND DISPOSAL OF PKOPEETY. 247 § 220. Vested in courts of equity — Courts of equity in the various states, where not prohibited by statute, ex- ercise an original inherent jurisdiction over charities The decision in Protest. Epis. Ed. Soc. v. Churchman, 80 Va. 7l8, was tl.e last of a long line of decisions in Va. beginning with Gallego v. Atty.-Gen., 3 Leigh, 450, denying the validity under the constitution and statutes of Va. of bequests to religious and charitable uses. A different view has since been taken in two important well considered cases. Bequests to foreign incorporated mis- sionary societies were upheld in Missionary Soc. v. Calvert, 32 Gratt. 357, and in Trustees, etc., v. Guthrie, 86 Va. 125; 6 L. E. An. 321. In both cases it was Tield that charities for religious piffposes are not against the constitution or laws or the policy of the law in that state. They are valid In Cal.,N. Y., Maine, Vermont, Mass., Penn., Kentucky, North Car., Georgia, Indiana and most of the other states. Section 1313. The Cal. Civ. Code contains important re- strictions, upon the devotions of property to charitable uses. It would be diffi- cult to synopsize it. It reads as follows: — "Sec. 1313. No estate, real or personal, shall be bequeathed or devised to -any charitable or benevolent society or corporation, or to any person or persons in trust for charitable uses, except the same be done by will duly executed at least thirty days before the decease of the testator; and if so made, at least thirty days prior to such death, such devise or legacy, and each of them, shall be T^alid; provided, that no such devises or bequests shall be made so as to reduce the aggregate thereof to one third of such estate; and all dispositions of prop- ■erty made contrary hereto shall be void, and go to the residuary legatee or de- visee, next of kin, or heirs, according to law." A subsequent act passed in 1881 vests important discretionary powers in •county and city authorities in the matter of accepting or rejecting bequests to public charities made to them administering the same and disposing of income and increase thereof. Following Sec. 1313 of the Civ. Code. The above section clearly recognizes the validity of bequests to charitable and benevolent societies and corporations subject to the limitations therein contained. See Robinson's Est., 63 Cal. 620. The jurisdiction of courts of equity in Cal. to establish and enforce charities when trustees competent to take the estate are named and the <;lass to be benefitted and the designated beneficiaries are capable of ascertain- ment is derived from the common law independently of the statute of Elizabeth. Estate of Hinckley, 58 Cal. 457. Under that statute devises to corporations for charitable uses were at first deemed void at law; but were sustained in equity, not as conveyances to the corporation, but subject to and clothed with the use designated by the testator. Kyd on Corp. 72; Gilbert, Uses and Trusts, 5, 170; Jeremy's Eq. Jur., book 1, p. 19; Atty.-Gen. v. Stanford, 2 Swanst. 594; Green v. Rutheforth, 1 Ves. Sen. 468; Coventry V. Atty.-Gen. 2, Bro. P. C. 235; Trustees of Phillips Acad. v. King, 12 Mass. 566. The whole subject of charitable bequests was reviewed, and "the constitutional and statutory provisions of Cal. bearing upon the question of common law jurisdiction in the administration of charities, in connection with their provisions against perpetuities, were discussed and construed by McKins- TRY, J., in the course of an elaborate opinion in Hinckley, Estate of, 58 Cal. 457, 481. Many decisions in England and in this country in both federal ami state courts were considered. 248 ACQUISITION AND DISPOSAL OF PKOPEETY. § 221 and apply to them rules of equity together with other ordinary rules applicable to charitable uses j and they do this by virtue of their inherent powers without reference to the question whether the statute of 43 Elizabeth has been technically adopted in their states,^ The objection does not lie to a charitable bequest to an unincorporated church, that if the trustees should misuse the fund no one could call them to account.^ § 221. English decisions inapplicable. — Most of the de- cisions of the English courts bearing on the question of -visitorial power are inapplicable in this country. The courts possess ample powers to correct abuses by trustees and enforce the conditions imposed by the 1 Perry on Trusts, 694; Vidal v. Girard's Ex'rs, 2How. 127; Williams v. Wil- liams, 4 Selden, 533; Atty.-Gen. v. Moore, 40. E. Green, 503; Walker v. Walker, 25 Ga. 420; Sweeney v. Sampson, 5 Ind. 465; Tappan v. Deblois, 45 Me. 122; Going V. Emery, 16 Pick. 107; Jackson v. Phillips, 14 Allen 558; Norris v. Thompson, 4 C. E. Green, 307;^ Williaims v. Pearson. 38 Ala. 299; State v. Prewett, 20 Miss. 165; Paschall v. Acklain, 27 Tex. 173; Chambers v. St. Louis, 29 Mo. 543; Atty.-Gen. v. Wallace, 7 B. Monr. 611; Franklin v. Armfleld, 2 Sneed, 805; TJrmry'sEx'rs v. Wooden, 1 Ohio St. 160; Gillman v. Hamilton, 16 111. 225; Grimes v. Harmon, 35 Ind. 246; Burr's Ex'rs v. Smith, 7 Vt. 241; Vidal V. Phil. 2 How. 128; Ould v. Wash. Hospital, 95 U. S. 363. At the time of the decision in Bap. Ass'n v. Hart's Ex'trs., 4 Wheat 1, a different view pre- vailed both in this country and in England, and it was thought that courts of equity had not exercised common law jurisdiction over charitable bequests in England prior to and independent of the statute of Elizabeth. But the records published in the report of the commissioners of public records in England in 1827, 1830, 1832, disclosed about iifty cases in which courts of chancery had ex- ercised jurisdiction in establishing, regulating, and enforcing gifts and grants to charitable uses before the statute similarly as they had done subsequently. The opinion has since been expressed by most, if not all the great judges and chancellors of England and by the judges of the highest courts in the United States that the statute created no new law but simply a new and ancillary juris- diction by commission tO' issue out of chancery to inquire whether funds devoted to charitable purposes had been misapplied. Perry on Trusts, 694, and cases cited. "^ Seda V. Huble, 75 la. 429; 39 N. W. 685, holding that a bequest in trust for an unincorporated Roman Catholic Church being to the persons named, who take money charged with the execution of the charitable use, it would not be mate- rial that the Catholic Church is prohibited from taking or holding any property whatever. § 222 ACQUISITION AND DISPOSAL OF PROPERTY. 249" founders of charities. It may be doubted if such a thing as the visitorial power exists in this country in its original sense.^ The state, through its courts, possesses absolute con- trol over the administration o*f public charities ; but un- less private corporations charged_with the execution of a private trust abuse their franchises, the state will not interfere. When the use to which the fand is devoted is public, the attorney -general may proceed in a court of equitable jurisdiction and invoke the same remedies for its preservation and restitution as a private suitor interested in a priva^te trust. In the sense that the state may call all private corporations' to account for abuse of their franchises, it possesses sole, supreme and visitorial power under puv system. § 323. Donor may make rules and conditions. — The foun- der of a charity may make whatever rules and regulations for the government of the corporation which he creates to dispose of his bounty he pleases, and no matter how arbitrary and unreasonable they may appear, may exact a strict compliance. Any violation of the prescribed rules and conditions may by their terms subject the of- fender to any civil consequences he has seen fit to im- pose, which may be enforced in any court of competent jurisdiction. The time for an examination and scrutiny of these is before the trust is accepted ; afterwards, the trustee will not be heard to complain of their harsh- ness. The terms expressed in the grant or deed of settlement to charitable uses become by-laws of the corporation created, (formerly called statutes,) and cannot be re- pealed or materially altered without the consent of the founder. His visitorial power extends to the enforce- 1 Atty.-Gen. v. Utica Ins. Co., 2 Johns. Ch. 371. 250 ACQUISITION AND DISPOSAL OF PROPERTY. § 223 ment of these by-laws. If they be not observed, he, or the person vested by him with the so-called visitorial power, may have his appropriate action for redress ; but the person so authorized cannot defeat the grant for a violation unless expressly given the right to resume it as for condition broken.^ § 233. The rnle against perpetuities not applicable to charitable bequests.— Perpetuities were in great disfavor at common law ; consequently a constitutional provision or a statute directed against them is but an express declaration of principles already recognized by courts in all common law 'states. Charitable devises of unlimited duration were, on the other hand, upheld at common law, and were not within the spirit of the rule against perpetuities. Therefore, without express provision to the contrary, the first proposition as well as its counter- part prevail in all those states where the English com- mon law prevails, and statutes which limit the period during which the alienation of property may be re- strained in conveyances, settlements and wills in gen- eral terms will not be held to apply to charitable be- quests or conveyances to trustees for permanent chari- table uses.^ When the object of the trust is private 1 The interest of shareholders and their right of control in corporate matters at stockholders' meetings and their right to have the business conducted accord- ing to the charter and the by-laws enacted by them may be properly called a visitorial power, and in no other sense does any such power exist with respect to corporations having a capital stock. 2 Lewis on Perpetuities, 863; State v. Griffith, 2 Del. Ch. 399. It was held to be settled doctrine in Ala. in 1862 that the chancery court had jm-isdiction by virtue of its original common law powers, without claiming prerogative powers and without the aid of the statute 43 Elizabeth, to uphold an executory bequest of money to the " Pilgrims' Rest Association " " to be loaned out by the com- missioners to be appointed by said association," etc. Williams v. Pearson; 38 Ala. 299. The same view as to the power of courts of chancery in the respective states where they were decided prevailed in the following cases : Treat's App., 30 Conn. 115; Zanesville C. & M. Co. v. Zanesville, 20 O. St. 483; Grisson v. Hill, 17 Ark. 488; Atty.-Gen. v. Wallace, 7 B. Mon. 611, holding also that ^ 224 ACQUISITION AND DISPOSAL OP PROPERTY. 251 the favor which the law gives to charity cannot be in- voked for it SO as to allow the creation of a perpetuity. Such trusts are void if they create perpetuities, while the full conception of a charitable trust includes the idea that it is or may be perpetual.^ § 224. How far the directions of tlie donor of funds for charitable uses are binding on the corporation. — If a charity fund be given to an old corporation, it is not subject to the same rules and conditions as the property with which the charity was originally endowed nor will the new gift be subject to the original visitorial power un- less a plain intention of the donor to that effect be either expressed or implied.^ If the property is given generally and no special pur- pose is named, the donor will be presumed to intend that the charity shall be administered and regulated by general rules of the corporation.^ Where, however, a particular trust has been annexed to the fund donated in the hands of the corporation, the rules prescribed by the original founder of the trust will not attach to it, and the court will not treat the corporation in respect to the newly^acquired fund as an ordinary trustee or as an individual entrusted with the fund for a particular purpose.* ' the courts of chancery in that state possesses the powers of chancery in England, even such as are in the nature of prerogative ; Miller v. Chitten- den, 4 la. 252; Ex'rs' of Burr v. Smith, 1 Vt. 241; Paschal v. Acklin, 27 Tex. 173 ; Williams v. Williams, 8 N. T. 525, though in view of subsequent decisions it is doubtful if this case is authority in that state at present. See Levy v. Levy, 33 N. Y. 97. 1 Fire Ins. Patrol Co. v. Boyd, 120 Pa. St. 624; Mifflin's App., 121 Pa. St. 205; Heiskell v. Chickasaw Lodge, 3 Pickle (Tenn.), 668; Callman v. Grace, 112 N. T. 299. ^ Green v. Eutherforth, 1 Ves. 472; Corp. of Sons of Clergy v. Mose, 9 Sim. 610; Phillips v. Bury, 1 Ld. Eaym. 5; Comp. 265; Holt, 715; 1 Show. 360; 4 Mod. 106; Skin. 447. 3 Ex parte Inge, 2 K. & M. 596; Atty.-Gen. v. Clare Hall, 3 Atk. 675; Had- ley V. Hopkins, 14 Pick. 240. '■> Green v. Eutherforth, 1 Ves. 462; Corp. Sons of Clergy v. Mose, 9 Sim. 610. 252 ACQutsiTioisr and disposal of property. § 225 § 225. Effect of conditions.— If a condition be inserted in a deviso to a corporation that a certain thing shall be done and it is provided that in case of failure to per- form the condition the estate shall go to an individual, the latter is not bound by the mere will and pleasure of the corporation as to the time and manner of per- forming the condition. It must be performed within a reasonable time according to its nature.^ § 226. Grants and devises to religions corporations. — Equity will not discriminate against religious in favor of other charitable objects, or vice versa. Thus, where a church held funds a part of which were contributed for the poor and the balance for religious purposes and they became mingled, it was held that the entire fund could not be devoted to either purpose, but that as ac- curate a separation as possible should be made,^ An act of the legislature changing the trustees of a charity conferred upon a municipal corporation is valid ; ^ but a grant of land to a charitable corporation for a school or college or for a religious or charitable purpose by the legislature cannot be repealed.* In England religion is scarcely regarded as an object of charity, charitable trusts being there chiefly under legal supervision and control, while here it leads in that respect. An examination of reports of charity cases in this country discloses that the majority of such cases are for the maintenance of institutions of a religious or semi-religious character. Associations formed for re- J Hayden v. Stoughton, 5 Pick. 528. 2 Atty.-Gen. v. Old South Church, 13 Allen, 474. ' Phil. V. Fox, 64 Pa. St. 169; Stone v. Framingham, 109 Mass. 303. « Terrett V. Taylor, 9 Cranch. 43; University v. Fay, 2 Hayw. 310; Pawlett V. Clark, 9 Cranch. 292. ^ 226 ACQUISITION AND DISPOSAL OF PBOPEETY. 253 ligious objects of the various denominations and the numerous societies connected with and supported by them, absorb a large proportion of the charitable funds in this country. On the other hand, the principal charitable objects named in the statute of Elizabeth, such as the repair of highways, ports, havens, bridges, relief of the poor, houses of correction, etc., have here been given up for the most part to municipal control. It is well settled that religious societies whether incorporated or not, have capacity to take and hold charitable bequests. i " Trusts in favor of education and religion have always been considered charitable uses."^ Courts incline to direct the application of funds donated to religious purposes to the propagation of the doctrine which the donor desired to advance ; and in order to ascertain such intention, will inquire into his individual faith and tenets, and when these are ascer- tained, will be governed by them.^ 1 The Evangelical Assn's App., 35 Pa. St. 316. 2 Owens V. The Missionary Soc. of the M. E. Church, 4 Kern. 380, 409, per Denio, C. J. Bequests, devises and gifts to religious and educational purposes have been upheld in the following cases : To trustees for the benefit of a volun- tary unincorporated association the object of which was the propagation of Christianity among the heathen; Bartlettv. King, 12Mass. 537; "to the cause of Christ for the benefit and promotion of true Evangelical piety and religion," directing the same to be paid to certain persons named, and giving them full discretion and authority to select the societies and charitable purposes upon which to bestow the bounty; Going v. Emery, 16 Pick. lOT; to an unincorpo- rated female society in another state composed in part of married women for charitable purposes; Washburn v. Sewall, 9 Wei. 280; " to the Methodist Church At Darlington Court House, and the preachers of said church and the Pedee Mission to be selected by the trustees of said church," etc; Gibson v. McCall, 1 Rich. Law 174; to trustees and their successors to erect a school-house for the perpetual use of the parties to the deeds and the inhabitants residing nearer than any other school-house and such other persons as the inhabitants might admit; Wright v. Linn, 9 Penn. St. 433. See also Bartlett v. Nye, 4 Met. 378; Burbank v. Whitney, 24 Pick. 146; Brewster v. McCall, 15 Conn. 274; Carter V. Balfour, 19 Ala. 814; Ex'rs of Burr v. Smith, 7 Vt. 241. ' If a schism occurs in the body to whom the administration of the trusts is ■committed and part separate from the others the courts usually continue the 254 ACQUISITION AND DISPOSAL OF PEOPEKTY. § 227 § 237. Whether held by society in trust or absolutely.— A difficult question which sometimes arises when a de- vise or gift is made to a religious society expressed to be to charitable uses, is whether it is in reality such, or an outright donation to the society or corporation itself, and for that reason illegal because contrary to the stat- utory prohibition limiting the amount of property such bodies may hold. If the trust declared is only nominal and the enjoy- ment and possession of the property by the members not affected by it, there would be no material difference between the nominal and the real owner such as would be required to constitute a trust for charitable pur- poses. It was held in New York that the trust became exe- cuted in the cestui que trust under a statute in that state relative to the incorporation of religious societies author- izing them to take into their possession all the property of the society whether the same was given directly to- such church or society or to any other person for their use, and to hold such property the same as if the right and title thereto had been originally vested in the trustees.^ .Where the grantor or other person holds the estate in trust for the church or society prior to its incorpo- ration the legal estate is transferred to the corporation, by operation of law, whenever the requisites of the statutes are complied with, and it is rendered legally competent to take the property in its corporate char- acter.'^ " administration with the old organization unless there has occurred on its part an essential departure in doctrine from the tenets of the founder. Redfield on Wills, p. 573, 2nd. Ed. ; App. of The Lutheran Congregation, 6 Penn. St. 201 ; Combe v. Brazier, 2 Desau. 431; Atty.-Gen. v. Pearson, 3 Met. 353, 418. 1 Van Deuzen v. Trustees, 3 Keyes, 550; s. c. 4 Abb, App. Becis. 465; Welsh V. Allen, 21 Wend. 147; Nicol v. Walworth, 4 Denio, 385. 2 Bap. Church in Hartford v. Witherell, 3 Paige Ch. 296; Trustees of South Bap. Ch. V, Tates, 1 Hoffm. Ch. 141; 2 K. Y. Rev. Sts, 7th. Ed. p. 1658, sec. 4.. § 228 ACQUISITION AND DISPOSAL OF PKOPEKTY. 255 § 338. Effect of becoming incorporated. — ^By becoming incorporated churches and religious societies become assimilated with respect to the internal management and control of their property to other private corpora- tions. The trustees elected and acting as such and their successors are entitled to the custody, manage- ment, possession and legal control of all the property and funds belonging to their society in the same man- ner and to the same extent as directors in business cor- porations. " Their authority within the scope of the objects and purposes of the incorporation is superior to that of individual members, and not even a majority can, without their consent, take forcible possession of the church building and legally hold it." ^ And a grant of property to trustees to hold for the use and benefit of a church not in existence, but to be afterwards organized, the trustees having no power to create the beneficiary or to dispose of the property for any purpose, will be upheld and the title will vest in the society thereafter organized, with capacity to ac- quire and hold the property.^ The principle established by the New York cases seems to be that unincorporated religious societies are not capable of acquiring the legal title, but may benefi- cially enjoy the estate if the legal title be conveyed or held in trust by some one competent to execute the trust. After the society becomes incorporated its equi- table title becomes merged in the legal title which it then acquires.^ 1 First Meth. Epis. Ch. v. Filkins, .1 Thomp. & C. 279, per E. D. Smith, J. See to the same effect Grerman, etc., Cong. v. Pressler, 17 La. Ann. 127; Greea V. Cady, 9 Wend. 414; People v. Runkel, 9 Johns. 147. 2 Miller v. Chittenden, 2 Clarke la. 315. See Second Cong. See. v. Waring, 24 Pick. 308; Howard v. Hayward, 10 Mete. 420; Fo.\ v. Union Acad. 6 Watts & Searg. 353. ' Eef. Dutch Ch. v. Veederm, 4 Wend. 494. See African Meth. Epis. Ch. v. Conover, 27 N. J. Eq. 157. It was held that a deed of land to the acting trus- 256 EMINENT DOMAIN. § 229 § 229. Sale of property of religious corporations.— But although the estates held by the religious corporations are considered legal so far as the right of legal control and possession is vested in the trustees selected by the members after incorporation, yet such estates partake so far of the nature of trust estates from a legal stand- point that the right of alienation does not exist by force and effect of the statute, and in the absence of further legislation can only be given by an order of court. In a case in New York it was said that sales of property so held are " against public policy unless authorized by the proper tribunal in the same way that the sale of the lands of infants is against public policy unless authorized by some court." ^ It is held that the statute of Elizabeth which re- strained ecclesiastical corporations from alienating their real estates became a part of the common law of that state ; and previous to the general law allowing them to do so upon obtaining an order of court for that pur- pose, religious corporations possessed no power to sell and convey their lands. The object in requiring an order of court for that purpose is to protect corporators from a perversion of their property and funds.'^ tees of an unincorporated religious society conveys no title to the society. Bnndy V. Birdsall, 29 Barb. 31. The provisions of the Cal. Stat, governing religious corporations are similar to those of New York both with respect to the manner of acquiring title and holding property. Limitations are placed upon the amount and value of property such corporations may own. Civ. Code, sec. 595. An important exception is made in favor of the bishop, chief priest or presiding elder of any religious denomination. These may when the administration of the temporalities require it incoi-porate themselves as corporations sole in the manner prescribed for the formation of other corporations as near as may be. When so incorporated the limitation contained in sec. 595, with respect to churches and religious societies does not apply to them "when the land is held or used for churches, hospitals, schools, colleges, orphan asylums, parsonages, or cemetery purposes." Civ. Code, sec. 602. 1 Ref. Church v. Schoolcraft, 65 N. Y. 134. 2 Cong. Beth. Elohim v. Centr. Presby. Ch., 10 Abb. Pr.(N. S.)48-t. By stat- ute in Cal. the superior court of the proper county is authorized to order a sale of church property upon proper application. Sec. 598 Civ. Code. I 230 ACQUISITION AND DISPOSAL OF PEOPERTY. 257 § 330. Liens in favor of corporations upon property in their possession. — Several kinds of business corporations retain liens upon personal property and commercial paper without special contract to that effect. Some of these liens are sometimes such as existed at common law, others again are given by statute, while others arise from custom so uniformly observed as to become a part of the law of the business in which they obtain recognition. A familiar instance of a common law lien is that of common carriers for freight charges which is founded upon the same right and governed by the same principles to a great extent as other liens. The lien is lost by loss of possession but attaches to any part of property in possession which forms a part of the partic- ular shipment upon which the freight was earned. But a. carrier cannot subject goods on which the freight charges are due for their carriage to a lien for back freights ; ^ nor can he hold them for the freight against the owner where he has received them, though without notice of the owner's right, from a wrongdoer.^ A delivery of the goods to the consignee or his assignee is an abandonment of the lien unless there is a contract to the contrary. But a mere undisclosed in- tention on his part that the lien shall continue does not qualify the effect of his act so as to preserve the lien. It would be otherwise, however, if possession were obtained by trick or fraud.^ A bill of lading stipulated that a cargo should be de- livered to a consignee, " he paying freight and charges." It was held that the carrier had a lien upon the cargo 1 Leonard v. Winslow, 2 Grant's Cas. 139; Wallis v. London, etc., R. E. Co., L. R. 5 Exch. 62. 2 Robinson v. Baker, 5 Gush. 137; Stevens v. Boston, etc., Co., 8 Gray, 262; •Clark V. Lowell, 9 Id. 2.'?1. ' Dyer v. Grand Trunk E. R. Co., 42 Vt. 441. 17 258 ACQUISITION AND DISPOSAL OF PROPERTY. § 232 for salvage, it coining within the terms of the contract ; and that the fact that part of the cargo had been deliv- ered did not divest the carrier of his lien upon the balance for the unpaid freight and charges.^ § 231. Lien not lost by warehonsing the goods. — If the bill of lading contain a provision that the goods shall be called for within a given time, and the consignee is in default in receiving. the goods according to the con- tract, or if in the absence of any sidpulation he fails tO' receive them within a reasonable time, the carrier may- store the . goods without impairing his lien. The pos- session of the warehouseman in that case is the posses- sion of the carrier for the purpose of preserving the^ lien.^ A usage and regulation of a railroad company; that freight shall be delivered within a obtain time after notice of arrival, its and that if not taken away a fixed charge will be made for the use and occupation of the cars upon which the goods are loaded, if known to the consignee will be binding upon him. For such charge the carrier has a lien as a warehouse - man. 3 § 233. Lien of banks on commercial paper. — In long con- tinued dealings between banks, usages are sometimes established concerning commercial paper and deposits 1 Chicago B. R. Co. v. Northwestern Un. Packet Co., 38 la. 377. 2 Western Transp. Co. v. Barber, 56 N. T. 544; Culbreth v. Phil., etc., R. R. Co., 3 Houston, Del. 392; Mobile, etc., R. R. Co. v. Prewett, 46 Ala. 63; Mohr V. Chicago, etc., R. L. R. Co., 40 la. 579; Merchants' Dispatch Transp. Co. \. Hallock, 64 111. 284; Cahn. v. Mich., etc., R. R. Co., 71 Id. 96. 8 Miller v. Mansfield, 112 Mass. 260. But where the notice stated that " this company will assume no responsibility in regard to property after its arrival here," such notice was held to be an express disclaimer by the company of its character as warehouseman and that the company had no lien upon the goods for its charges for keeping them. Crommelin v. N. Y., etc., R. R. Co., 4 Keyes- 90. § 232 ACQUISITION AND DISPOSAL, OF PEOPEETY. 259 which from recognition and acquiescence become a part of the commercial law, applicable to such transactions so as to bind all parties to them in the absence of an express contract showing a different intention.* Thus where an account current has been kept be- tween two banks in a long course of dealings, wherein they mutually credited each other with the proceeds of all paper collected when received, and charged, and credited such transactions to each other as principals in such transactions and not to the persons endorsing and depositing the same for collection, each bank has a right to retain the proceeds of notes and drafts then in its hands to cover the balance of account due from the other, independently of the claims of the real owner of such paper. In'such cases possession of the paper by the bank re- mitting it is prima fade evidence of ownership. With- out notice to the contrary the bank receiving it is en- titled to treat it as the property of the bank by which it was sent for collection, and is not bound to inquire into and will not be affected with respect to its lien by the question whether in fact the other bank held it as agent or owner. ^ A usage of this kind is extremely liable to work in- justice to innocent third parties and should be confined within the narrowest limits consistent with giving adequate protection to the immediate parties to the 1 Bank of Metropolis v. New England B'k, 1 How. 234. In this case the court remanded the case to the lower court, with the following instruction among others: — "If the jury find that, in the dealings mentioned in the testimony, the Bank of Metropolis regarded and treated the Commonwealth Bank as the owner of the negotiahle paper which it transmitted for collection, and had no notice to the contrary, and upon the credit of such remittances made or antici- pated in the usual course of dealing between them, balances were from time to time suffered to remain in the hands of the Commonwealth Bank, to be met by the proceeds of such negotiable paper, then the plaintiff in error is entitled to retain them against the defendant in error for the balance of account due from the Commonwealth Bank." 260 ACQUISITION AND DISPOSAL OF PKOPEKTY. § 233 transaction, and such usage will never be presumed but must be proven. ^ But where a firm in good standing which was owing a balance to a bank handed it drafts for collection on which collections were made, after which the firm failed and filed its petition in bankruptcy, it was held that the bank might apply the money collected on the draft to- ward the payment of the firm's indebtedness to it, and was not bound to turn the money over to the assignee for general distribution .2 § 233. Lien of bank on deposits. — Ordinarily a lien attaches in favor of a bank upon the moneys and securi- ties of a customer in the usual course of business for such advances as have been made upon their credit. The lien then attaches to such securities and fund^ not only as against the depositor but against the unknown equities of all others in interest, unless modified or waived by some agreement express or implied, or by conduct inconsistent with the assertion of a lien. But it will not be permitted to prevail against the equity of the beneficial owner of which the bank had notice either actual or constructive.^ A fund deposited in a bank for a special purpose can- not, as against a creditor to whom the deposit has been pledged, be diverted by the bank to another purpose on the pretext that the bank has suffered the depositor to overdraw his general account. * An ordinary deposit 1 Grant v. Taylor, 52 N. T. 627. 2 In re Farnsworth, 5 Bissell, 233. s In Nat. B'k v. Ins.Co., 104 IT. S. 54, Justice Mathews said :— " Although the relation between a bank and its depositor is that of merely debtor ani creditor, and the balance due on the account is only a debt, yet the question is always open to whom in equity does it beneficially belong ? If the money deposited be- longs to a third person and was held by the depositor in a fiduciary capacity its character is not changed by being placed to his credit in his bank account. 4 Bank of U. S. v. MacLeaster, 9 Pa. St. 475. § 233 ACQUISITION AND DISPOSAL OF PROPERTY. 261 made in the usual course of business is not a bailment.^ The indebtedness for which a lien is claimed must be an actual existing indebtedness at the time the right to the lien is asserted. At the death of a party having a balance at a bank, the latter held his note not yet due. The defendant bank claimed a lien on the balance for the indebtedness for which the note was given when sued by the execu- tor of the deceased for the balance, but the court held that to constitute a good set-off against an executor or administrator under the statute in an action brought by him it must have been due and payable from the de- cedent in his lifetime. 2 1 Commercial B'k v. Hughes, 17 Wend. 94; Marsh v. Oneida Cent. B'k, 34 Barb. N. Y. 298; Davis v. Smith, 29 Minn. 201; In re Williams, 3 Ired. Eq. 346; State B'k v. Armstrong, 4 Dev. 519; Boyden v. B'k of Cape Fear, 65 N. C. 13; Hardy v. Chesapeake B'k, 51 Md. 562 ; Bank of the Republic v. Millard, 10 Wall. 152; In re B'k of Madison, 5 Biss. 515; Knecht v. TJ. S. Sav. Inst. 2 Mo. App. 563. See Detroit Sav. B'k v. Burrows, 34 Mich. 158. ^ Jordan v. Nat. Shoe & Leather Bank, 74 N". Y. 467. This case is reported in 12 Hun, 512, where Daniels, J. said :— " The policy as well as the require- ments of the law concerning the payment of debts of deceased persons is, that they shall participate equally in the assets of the estate, so far as they may be required for that purpose, and that would be defeated by construing this section of the statute as allowing the set off of demands accming and becoming due after the death of the deceased debtor." See also Beckwith v. Union Bank, 4 Sandf. 604; First Nat. B'k v. Mason, 95 Pa. St. 475. 262 EMINENT DOMAIN. CHAPTER XI. ACQUISITION AND TENURE UNDER EXERCISE OF POWEB OP EMINENT DOMAIN. j 234. Exercise of the power by private corporations. 235. A franchise may be taken. 236. Corporate interest of members not exempt. 237. Various instances of its exercise. 238. Its exercise of vital importance. 239. Legislature may select the agency and determine the purpose. 240. Authority need not be special. 241. Exercise of the power by foreign corporations. 242. The power must be exercised impartially. 243. How held by the appropriator. 244. The authority strictly construed. 245. The legislature cannot bind the state not to exercise it in the future. 246. Only to be exercised for the purposes mentioned and subject to the conditions imposed in the Constitution. 247. The compensation to be judicially ascertained. 248. The tribunal. 249. Treaty with owner. 250. The public use. 251. Same — how determined. 252. Consideration of the question of public use with reference to par- ticular corporations. 253. When the public purpose and necessity must be plain. 254. Due process of law. 255. Prescribed methods must be strictly pursued. 256. When and what compensation to be made. 257.. Same— with reference to time of payment. 258. Competency of evidence of damage. 259. Special value. 260. Various methods of determining compensation. 261. General principles. 262. Damages independent of value of lands taken. 263. Community benefits not considered. 264. Not entitled to damages for independent trespasses. 265. The right strictly legal. , 266. Conclusiveness of award. 267. Use of streets by railroads. 268. Elevated street railways. ■§§ 234. 235 EMINENT DOMAIN. 263 § 269. Street railways operated by horse power. 270. Railroads on common highways. 271. State not entitled to compensation. 272. Compensation of corporation. 273. Reversion of the fee in land upon cessation of use. § 234. Exercise of the power by private corporations. — The legislature may not only determine and declare what shall be a public use for which private property may be taken, in the exercise of the power of eminent domain, but having done so may delegate the power to take it. in conformity to prescribed terms and conditions to individuals, and to corporations both public and private.^ § 235. A franchise may be taken. — In "West River 1 Right supei'venes provisions of the federal constitution. Coextensive with the power which each state possesses to regulate its internal affairs by suitable police regulations, and subject likewise to the condition that the purpose for ■which it is exercised must appertaiin to the self-preservation and good govern- ment of the community at large, is the right to take private property for public use upon making just compensation to the owner. The power to do this is so •essential to the maintenance of sovereignty and the performance of governmen- tal duties by the States, that it supervenes all private riglits, and by long estab- lished construction is deemed to have been impliedly excepted from the general terms of the federal constitution with respect to the inviolability of contracts. An attribute of sovereignty. Eminent domain is the sovereign right of the state to take private property for public use. The right exists in the limited sovereignty of the federal government as well as in the more general sovereignty •of the States. Peitalning to the former the public use must be within the scope ■of its limited powers and necessary for their ijreservation, but cannot be exer- cised for the enlargement of such powers or in derogation of the reserved sov- ereign rights of the States. The right of eminent domain in each is commen- surate with the extent of their respective powers. By the same imperative necessity this power belongs to the States as well as to the federal government. Power extends to every species of property. The power of eminent domain may be wielded in a proper case and subject to the condition that due compen- sation be made against every species of property whatever and from whatsoever source acquired. In re Met. El. K. Co., 2 N. Y. S." 278. Contracts as well as tangible property derived from the State itself are deemed to be acquired and Tield subject to the superior title and ultimate right of revocation reserved and to be asserted by the State whenever required for the public good. There are two exceptions to this statement— money or that wliich ordinarily passes as such, and rights in action which can only be made available when made to produce money. It can never be needful to take either of these under this power. An additional reason may be mentioned. Money is itself an instrumentality of sovereignty in the hands of the federal government. 264 EMINENT DOMAIN. § 236" Bridge Co. v. Dix,^ the court say : — " We are aware of nothing peculiar to a franchise which can class it higher or render it more sacred than other property. A fran- chise is property, and nothing more. .... A franchise, therefore, to erect a bridge, to construct a road, to keep a ferry, and to collect tolls upon them, granted by the authority of the State, we regard as occupying the same position, with respect to the paramount power and duty of the StatQ to promote and protect the public good, as does the right of the citizen to the possession and enjoyment of his land under the patent or contract with the State ; and it can no more interpose any obstruction in the way of their just exertion. Such exertion we hold to be not within the inhibition of the Constitution, and no violation of a contract."^ § 236. Corporate interest of members not exempt. — The- contracts between members in a corporation and their corporate interests in its property of every description are like other property subject to be appropriated. Nor can there be in any act of incorporation any con- tract binding on the State that the corporation sO' formed may not have its operations suspended by the State in the exercise of the power of eminent domain.* 1 6 How. 507, 531, 533. 2 See also, Matter of Kerr, 42 Barb. 119; Red River Bridge Co. v. Mayor, etc. , of Clarkvllle, 1 Sneed, 176; In re Towanda Bridge Co., 91 Pa. St. 216; Rich- mond, etc., R. R. Co. V. Louisa R. R. Co., 13 How. 83; New Orleans Gas Co. V. Louisiana Light Co., 115 U. S. 659; Crosby v. Hanover, 36 N. H. 420; Cen- tral Bridge Co. V. City of Lowell, 4 Gray, 481; Philadelphia, & C. Ry. Co.' a Appeal, 102 Pa. St. 23; Delaware, etc., Canal Co. v. Raritan, etc., R. R. Co., 16 N. J. Eq. 366; Shorter v. Smith, 9 Ga. 517; James River, etc., Co. v. Thomp- son, 3 Gratt. 270. ' Backus V. Lebanon, 11 N. H. 23. A provision in a charter authorizing the construction of a toll bridge across a river or arm of the sea by a corporation and providing that it shall not be lawful for any one to erect or maintain a bridge or ferry in or near the same place, does not preclude the State from grant- ing a similar privilege to others, with the right to condemn and appropriate the necessary property. Thompson v. N. Y. & Harlem R. R. Co., 3 Sandf. Ch. 625; Mohawk Bridge Co. v. Utica, etc., R. R. Co., 6 Paige Ch. 554. § 237 EMINENT DOMAIN. 265 The property of the United States is subject to con- demnation in the exercise of eminent domain unless reserved and held by the national government for speci- fied national purposes.^ Although franchises pertain to the sovereignty, yet they are property in the sense that the owner may be deprived of them in the exercise of the power. They icannot be taken away, however, except where absolutely necessary to the enjoyment and exercise of a subse- quent grant. To permit the extinction of franchises on a plea of necessity created by a corporation for its own convenience or profit would place the power to capri- ciously destroy valuable privileges in the hands of the grantee of the latest franchise.^ § 237. Various instances of its exercise. — ^his right to appropriate the franchises and property of existing cor- porations has been exercised upon a great variety of occasions of superior public convenience and necessity, and with different results to the corporations whose property was appropriated.^ 1 U. S. V. Bridge Co., 6 McLean, 517. 2 In re Boston, etc., R Co., 53 N. Y. 574; Pennsylvania Co.'s Appeal, 93 Pa. St. 150; Inhab. of Springfield- v. Conn. River R. R. Co., 4 Cush. 63; Matter of N. T., etc., R. Co., 77 Nl. Y. 278. ' It was held a railroad may appropriate a turnpike, White Riv. Tp. Co. v. Vt. Cent. R. Co., 21. Vt. 594; and that a tur'npike may be taken for a public highway, Richmond F. & P. R. Co. v. Loiiisa R. Co., 13 How. 71; Armington v. Barney, 15 Vt. 745. A State may make a public road through lands of the United States. U. S. v. R. R. Br. Co., 6 McL. 517. So a town may condemn for a highway the part of an interstate bridge in the state. Crosby v. Hanover, 36 N. H. 404. A lease owned by an existing railroad company may be appro- priated by another. Matter of N. Y. & H. R. R. Co., 63 N. Y. 326; 5 Hun, 20. So may lands of a gas company. In re N. Y. C, etc., R. Co., 77 N. Y. 248; or of a steamboat company; Re N. Y. & C. R. Co., 99 N". Y. 12; IN. E. 27. One street railway may appropriate for its necessary purposes right of way over property of another. Sixth Av. Ry. Co. v. Kerr, 72 N. Y. 330. See also, Bos- ton & L. R. R. Co. V. Salem & L. R. R. Co., 2 Gray, 1 ; New York, H. & N. R. R. Co. T. Boston, H. & E. R. R. Co., 36 Conn. 196; Central Bridge Co. v. Lowell, 4 Gray, 474; Enfield Toll B. Co. v. Hartford & N. H. R. R. Co., 17 Conn., 454; Boston Water-power Co. v. Boston & VV. R. R. Co., 23 Pick. 360. 266 EMINENT DOMAIN. § 238 Of course there is no such thing as appropriating the franchise of being a corporation under the power, it not being considered as property. That can only be taken by a special proceeding prosecuted by the State,^ The power only extends to the taking of other fran- chises owned by a corporation, as the right to use streets, to the exclusive use of a right of way and the like. This right has often been exercised by railroads requir- ing to cross highways or other railroads.^ As such necessity arises from the necessities of the -case it need not be expressly conferred.^ The right extends to crossing railroads chartered by the federal government.* But the right to appropriate corporate property is not confined to railroad companies. It may be exercised lay canal, water irrigation, and other companies when suflScient necessity exists therefor.^ § 238, Its exercise of vital importance.— It is a power -the possession and exercise of which is absolutely essential to the existence and well-being of municipal corporations, and nearly so in the case of many private corporations whose franchises and operations are of a public nature. It is upon the principle of a resulting 1 Infra, Ch. XXXV. 2 New York & H. R. R, Co. v. Forty-second St. & G-. S. F. E. R. Co., 50 "Barb. 309; Starr v. Camden & Atl. E. K. Co., 24 N. J. L. 592; Matter of Cen- tral B. E. Co. of L. I., 1 T. & C. (N. Y.) 419. s Morris & E. E. Co. v. Central E. Co., 31 N. J. L. 206. * U. P. E. Co. V. Leavenworth, etc., E. Co., 29 P. "728. As to right to con- demn part of right of way which another company is not using. See Anniston, etc., E. Co. V. Jacksonville, etc., E. Co., 2 So. 710, sustaining the right. But one railroad company cannot parallel their track on another under statutory author- ity to cross, 111. Cent. E. Co. v. Chicago, etc., E. Co., 122 111. 473; 13 N. E. 140; though one turnpike can he laid out partly over the route of another; Backus V. Lebanon, UN. H. 19. * See Lehigh, etc., E. E. Co. v. Orange, etc., Co., 42 N. J. Eq. 205; 7 A. 659. Exercise of the right by water companies. See Woodbury v. Marblehead Water Co., 145 Mass. 509; 15 N. E. 282 ; Pickman v. Town of Peabody, 145 Mass. 480; 14 N. E. 7ol. §§ 239, 240 EMINENT DOMAIN. 267 benefit to the public that this power is extended to private parties and corporations. By virtue of it they have been authorized to take private property for a great variety of purposes, the most unusual and im- portant of which are the making of highways, turn- pikes, roads, steam and street railroads and canals, the erection and construction of wharves and basins, the drainage of swamps and marshes, the irrigation of crops and premises, and the supplying of water to cities, towns and villages. In all such cases the object of the legislative grant of the power is the public benefit resulting from the contemplated improvement.^ § 339. Legislature may select the agency and determine the purpose.— That the legislature may thus select any agency it sees fit for the exercise of eminent domain, and also that it may determine what purposes shall be deemed public, are propositions too deeply rooted in the jurisprudence of this country to admit now of doubt or discussion. Making an application of this doctrine to railway corporations, conceding it to be settled that these facilities for travel and commerce are a public necessity, if the legislature, reflecting the public senti- ment, decide that the general benefit is better promoted by their construction through individuals or corpora- tions than by the State itself, it would clearly be press- ing a constitutional maxim to an absurd extreme if it were to be held that the public necessity should be only provided for in the way which is least consistent with the public interest.^ S 240. AHthority need not be special — It is not neces- 1 Beekman v. Saratoga, etc., E. K. Co., 3 Paige, 45; Wilson v. Blacltbird Co. Marsh Co., 2 Pet. 243; Napa Valley K. R. Co. v. Napa County, 30 Cal. 437; S. & V. R. E. Co. V. Stockton, 41 Cal. 148. " Cooley Const. Lim., 667, citing numerous authorities. 268 EMINENT DOMAIN. § 240 sary therefore that the legislature should designate either the particular agency to accomplish the appropri- ation or the property to be taken ; and the authority need not be special but maybe conferred by the general law. It is in the nature of a trust reposed in the pro- jectors of the undertakings declared by the law to be public upon the presumption that they will not enter upon an improvement which the public does not need.^ The power given by a general railroad act to railroad corporations to acquire title to " any real estate re- quired for the purposes of the incorporation " does not extend to property already dedicated to and held for another public use by authority of law, save in the cases where it is expressly given by such act. Such a power must be conferred by express terms or necessary implication, and the implication does not arise if the powers expressly conferred can by reason- able intendment be exercised without such an appro- priation.^ A mere prospective public use to which property may be devoted other than that for which it js pres- ently sought to be condemned does not justify con- demnation proceedings. Such future and probable use, though of greater public benefit than that to which the property has been already devoted, must yield to pres- ent necessity .8 Mere priority of occupation by another company in 1 Wier V. St. Paul R. R. Co., 18 Minn. 155; Buffalo R. R. v. Barnard, 9 N. T. 100. 2 Matter of Boston & Albany R. R. Co., 53 X. Y. 574. See also, Boston, etc., R. R. Co. V. Lowell, etc., R. R. Co., 124 Mass. 368. 8 Colorado Eastern Ry. Co. v. Union Pac. Ry. Co., 7 Ry. & Corp. L. J. 373. See also Springfield v. Railroad Co., 4 Cush, 63; Illinois & M. Canal Co. v. Chicago & R. R. Co., 14 111. 314; Prospect Park v. Williamson, 91 N. Y. 552; Eastern R. Co. v. Boston & M. il. Co., Ill Mass. 125; Grand Rapids N. & L, S. R. Co. V. G. K. & I. R. Co., 35 Mich. 265. ^§ 241, 242 EMINENT DOMAIN. 269 contemplation of a future public employment of the property gives no exclusive right/ § 241. Exercise of the power by foreign corporations, The legislature may in its discretion delegate the power to a corporation of another state,^ But under a general act a foreign corporation has no power to condemn lands .^ It is well settled that foreign corporations may be excluded from the privilege of exercising the power,* but generally have the right extended to them by statute.^ § 242. The power must be exercised impartially. — While all property rights are equally subject to de- struction or loss in the necessary exercise of the power, yet all are equally sacred in the absence of such neces- sity, and the property of one citizen should not be selected for condemnation rather than another's unless it be done to subserve some public use, or a higher and more obvious public use than that to which it is at 1 East St. L. C. Ry. Co. v. East St. L. U. Ry. Co., 108 HI. 265; Lake S. & M. S. Ry. Co. V. Chicago & W. I. R. Co., 97 111. 506. 2 Matter of Townsend, 39 N. Y. 71; Morris Canal Co. v. Townsend, 24 Barb. 658. 8 Holbert v. St Louis R. R. Co., 45 la. 23. * Koenig v. Chicago, B. & Q. R. Co. (Neb.), 43 N. W. 423; State v. Scott (Neb.), 36 N. W. 121; Trester v. Missouri Pac. Ry. Co., 23 Neb. 242; 36 N. W. 502. 5 Laws N. Y. 1881, c. 649, amending act, April 2, 1850, provide that " if at any time after the construction of any railroad operated by steam, by any com- pany now existing, or that might hereafter be created, such company, or any company owning, operating, or leasing such railroad, or any mortgagee or mortagees in possession of such railroad, or person or persons appointed as receiver or receivers of any such railroad, in the possession of and operating the same, shall require, for the purpose of its incorporation, or for the purpose of running or operating any railroad so owned," etc., " any real estate in addition to what has been already required for the purposes of such railroad," in the manner therein provided. It is held that foreign corporations are en- titled to the benefits of the act. In re Marks, 6 N. Y. 105. See also Abbott v. New York & N. E. R. Co., 145 Mass. 450; 15 N. E. 91. 270 EMINENT DOMAIN. §§ 243, 244 present devoted. Whenever it is sought to take the property of one man which he has fairly acquired, and the general law protects, in order to transfer it to an- other, even upon a complete indemnification, it will naturally be considered as an extraordinary act of legislation, which ought to be viewed with jealous eyes, examined with critical acuteness, and scrutinized with all the severity of legal exposition. An act of this sort deserves no favor ; to construe it liberally would be sinning against the rights of property. In England, it has been said that all courts have, for obvious reasons^ at all times construed such legislative enactments most strictly. ^ § 243. How held by the appropriator. — On the same principle that the taking of property under the power can only be exercised for the supposed public benefit, it cannot after having been taken be held otherwise than in its application to the public use for which it was taken.^ § 244. The authority strictly construed.-^-An act au- thorizing any person or corporation to construct any railroad, canal, turnpike, toll bridge, etc., and to take real estate for the purpose does not justify a taking for public convenience merely. It could only be taken to satisfy a public necessity.** The right to exercise the power of eminent domain is in derogation of common right and the statute conferring it should be strictly construed. If the power or the right to exercise it in a 1 Blnney's Case, 2 Bland. Oh. 99. 2 Lance's Appeal, 55 Pa. St. 16; Nesbitt v. Trambo, 39 111. 110; Osborn v. Hart, 24 Wis. 89; Bankhead v. Brown, 25 Iowa, 540; Brown v. Beatty, 34 Miss. 227; Crear v. Crossley, 40 Id. 175; Bonaparte v. Camden & Amboy K. R. Co., Baldw. 205. 8 Memphis Freight Co. v. Memphis, 4 Coldw. 419. § 244 EMINENT DOMAIN. 271 given case is doubtful, the doubt should be resolved ad- versely to the claim of right. Yet it should not be con- strued so strictly and literally as to defeat the evident purpose of the legislature in granting it. i A railroad company will not be confined in the acqui- sition of property under the power to a sufiicient amount for its railway, but will be allowed to appropriate in addition lands on which to erect passenger depots, shelter for cars, engines and other rolling stock when not in use, and warehouses for the storage and delivery of freight intended for transportation or delivery to con- signees at its place of destination. It cannot, however, be extended by implication.^ The prescribed method of giving notice by publication must be strictly com- plied with.^ The general statute law relating to condemnation proceedings by railroad companies contemplates that such rights of private use of the land taken as are of the nature to interfere with the operation of the railroad shall be determined in the condemnation proceedings ; but the landowner has not a reserved right of private •■ Lackland v. Northern Missouri K. R. Co., 31 Mo. 185; Zack v. Pa. R. R, Co., 25 Pa. St. 394; 185 State v. Jersey City, 25 N. J. 309; Van Winkle v. R. R. Co., 14 Id. 162; Gilmer v. Lime Point, 19 Cal. 47; Locks v. Nashua & Lowell R. R. Co., 104 Mass. 1. 2 Power given to a railroad company to construct its track along a river does ' not authorize its construction in or upon the river. Stevens v. Erie R. Co., 21 N. J. Eq. 259. See also New York & H. R. R. Co. v. Kip, 46 N. Y. 546; Browning v. Camden & W. R. R. Co., 4 N. J. Eq. 47; Rensselaer & S. R. R. Co. V. Davis, 43 N. Y. 137; Bonaparte v. Camden & H. R. R. Co., Bald. 205. The power cannofbe exercised after the time given a railroad company within which to complete its road has expired; Atlantic, etc., R. Co. v. St Louis, 66 Mo. 228; nor is the right assignable. Mahoney v. Spring, etc., Co., 52 Cal. 159. A railroad company in Iowa cannot condemn land for an elevator. Johnson V. Chicago, etc., R. Co., 58 la. 537. A similar view obtains in New Jersey State V. United, etc., R. R. Co., 43 N. J. L. 110. It was held that a bridge company cannot, under a change in its approaches designated in a special charter, condemn Itod under the change. Re Poughkeepsie, etc, Co., 108 N. Y. 483. 8 Hull V. Chicago B. & Q. R. Co., 21 Neb. .371; 32 N. W. 162. Compare In re Metropolitan E. Ry. Co., 2 N. Y. S. 278. 272 EMINENT DOMAIN. § 244 crossings unless so defined, and compensation to the landowner is to be assessed accordingly.^ A con- stitutional provision imposing additional conditions to the exercise of the right applies to corporations in existence at the time of its adoption.^ But in some cases neither a strict nor a liberal but a reasonable con- struction has been applied.^ A company succeeding to the franchises and property 1 Cedar Eapids I. F. & N. W. Ry. Co. v. Eaymond, 37 Minn. 204; 33 N. W. 704. 3 Pennsylvania R. Co. v. Magee (Pa.), 13 A. 839. An act extending boun- daries so as to include private lands and which does not provide for compensa- tion forthe lands so taken, is unconstitutional. Hancock Stock Pence Law Co. V. Adams, 87 Ky. 417; 9 S. W. 246; Daly v. Georgia S. & F. R. Co., 80 Ga. 793; 7 S. E. 146; In re Poughkeepsie Bridge Co., 108 N. Y. 483; 15 N. E. 601. An act giving a railroad company a right to acquire land for railroad purposes does not give the company a right to dig a ditch three miles long, at right angles to its track, to carry off the water accumulating along the road bed and turn it on the land of another. Olson v. St, Paul M. &, M. Ry. Co., 38 Minn. 419; 37 N. W. 953. Under act 111. , July 1st, 1887, it was held that a company whose road ter- minated on the Ohio river at Cairo could not condemn land for an incline track and transfer ferry-boat landing, in order to connect with another road. St. Louis & C. R. Co. V. Thomas, .34 F. 774. An act giving a company authority to conduct the waters of a certain pond, by subterranean pipes, into its own lands, and construct and maintain dams, pipes, fountains, and reservoirs upon and over any land whatsoever, and provid- ing a remedy only for damages caused by the taking of the water, did not author- ize it to construct a dam and sluice-ways at the mouth of said pond, and to flow the lands adjacent thereto. Pickman v. Town of Peabody, 145 Mass. 480; 14 N. E. 751. Land dedicated for a public street cannot be condemned to the use of a rail- road, in the absence of an express statutory right. Cornwall v. Louisville & N. E. Co., 87 Ky. 72; 7 S. W. 553. 3 Proprietors of Locks, etc., v. Nashua & L. E. E. Co., 104 Mass. 1; Lackland V. North Mo. R. R. Co., 31 Mo. 180; Currier v. Marietta & Cim. R. R. Co., 11 O. St. 228; State v. Jersey City, 25 N. J. L. 309; Zack v. Pennsylvania R. E. Co., 25 Pa. St. 394; Doughty v. Somerville & E. R. E. Co., 21 N. J. L. 442; "Van "Wickle v. Camden & A. E. E. Co., 14 N. J. L. 162. In Com. v. Erie & N. E. R. Co., 27 Pa. St. 339, the court refused to enjoin a company from operat- ing its road which it had built in an unauthorized place, and made an order requiring a relocation and reconstruction. See also Lance's Appeal, 55 Pa. St. 16; Gilmer v. Lime, etc., Co., 19 Cal. 47. It was held a lessor company might condemn land for the use of its lessee. Re N. T., etc., R. Co., 99 N. Y. 12. A company succeeding to the franchises and property of another may receive and complete its condemnation proceedings. Bradley v. N. Sat. R. Co. 38 Minn. 234; .36 N. W. 345. §§ 245, 246 EMINENT DOMAIN. 273 of another may revive and complete its condemnation proceedings.^ But it seems that sites for the manufacture of cars and for the erection of dwellings of operatives cannot be taken.2 And where a railroad corporation sought to condemn land over which to build a switch branch road or lateral work to reach a private manufactory, a steel mill, for thei purpose of transporting freight to and from the same over the company's road, it was held that the use to which the land was to be subjected was private.^ § 245. The legislature cannot bind the state not to ex- ercise it in the future.— The power of eminent domain being an inherent element of sovereignty, it cannot be divested out of the State or abridged by contract or treaty so as to bind future legislatures.* Nor can the right be divested by private contract.^ § 346. Only to be exercised for the purposes mentioned and subject to the conditions imposed in the Constitution. — The 1 N. T. & Harlem R. E. Co. v. Kip, 46 N. T. 546. 2 Eldridge v. Smith, 34 Vt. 484. Among the purposes for which railroad companies may take land are, for cattle yards, repair shops, turnouts, for the deposit of wood and lumber transported and additipnal tracks needed on account of an increase of business. Hannibal, etc., K. E. Co. v. Muder, 49 Mo. 165; N. Y. Cent. E. E. Co. v. Metrop. Gas Light Co., 63 N. Y. 326; Cumberland Val- ley E. E. Co. V. McLanahan, 59 Pa. St. 23; State v. Mansfield, 23 N. J. 510; Chicago, etc., R. E. Co. v. Wilson, 17 HI. 123. It was held that the land may be taken for those purposes notwithstanding the fact that other land equally convenient can be had at private sale. N. Y. & Harlem R. R. Co. v. Kip, 45 N. Y. 546. 3 Pittsburg W. & K. E. R. Co. v. Benwood Iron Works, 31 W. Va. 710. See also, Railroad Co. v. Dix, 109 111. 237; Railroad Co. v. Wiltse, 6 N. E. Eep. 49. Compare Getz's Appeal (Pa.), 13 Am. & Eng. R. Cas. 186. * Per Colt, J., in Eastern E. E. Co. v. Boston, & C. R. E. Co., Ill Mass. 125, 131. See also Cooley on Constitutional Limitations, 342-344. 5 Cornwall v. Louisville & 5". R. Co., 87 Ky. 72; 7 S. W. 553, where land was ceded to a city for use of a railroad, on condition that no more should be taken for that purpose, and proceedings were instituted by the company to have ad- ditional lands condemned. 18 274 ^ EMINENT DOMAIN. § 24T Fifth Amendment to the Constitution of the United States provides that " no person shall be deprived of life, liberty or property without due process of law ; nor shall private property be taken for public use without just compensation," In no part of the Constitution is found a negation or limitation of the right on the part of the states to take private property for public use, and the last clause of the Fifth Amendment imposes a con- dition to its exercise which by clear implication recog- nizes the right itself. There is only one other condition, and it is contained in the clause immediately preceding. It can only be- taken "by due process of law." The provision that nO' person shall be deprived of property without compen- sation does not apply to the exercise of the right of eminent domain by a state.^ But this additional condition is found in all the state constitutions. Consequently only three leading ques- tions can ever arise in any case growing out of an exer- cise or attempt to exercise the power : 1. — Is the compensation provided or paid adequate or " just " ? 2. — Is the intended use a public use ? 3. — Are the means provided and the method pre- scribed for ascertaining the value and taking the prop- erty " due process of law " ? The first of these raises an issue of fact, the second one of mixed law and fact, while the last is purely legal. I 247. The compensation to be judicially ascertained The requirement that " just " compensation must be made would seem to imply that proper legal means must be provided by the law under which the appro- priation is made, it being a matter which requires. 1 Wilson V. Baltimore & P. R. Co., 5 Del. Ch. .i2S. § 248 EMINENT DOMAIN. 275 judicial ascertainment. This is very generally recog- nized by the states, and impartial tribunals are desig- nated either in constitutions or statutes before which the party interested is entitled to appear and have the compensation fixed with the usual rights and proceed- ings which attend judicial investigations. ^ § 248. The tribunal — This requirement is not satis- fled by the state through the legislature fixing the com- pensation, for this would be making it the judge in its own cause.2 But the proceeding is not of such a nature as entitles the party to trial by jury as matter of right, unless the state constitution has so provided.^ Whatever the tribunal which may have been provided in the constitution or legislation, it is a familiar rule almost invariably recognized, that the party should have the same opportunity to appear and be represented as in any other case of judicial cognizance, and unless he have such opportunity he would not be bound by the result.* There are numerous and important differences in the proceedings in the several states, and their validity depends principally upon the course of practice of the court or other tribunal where the condemnation is had.^ 1 Eich. V. Chicago, 59 111. 286; Cook v. South Park Com'rs, 61 III. 115. See Ames V. Lake Superior, etc., E. E. Co., 21 Minn. 241. All notices, etc., re- quired by law must be given. People v. Koiskern, 54 X. Y. 52; Power's Appeal, 29 Mich. 504. 2 Eich. V. Chicago, 59 111. 286; Petition of Mount Washington Co., 35 N. H. 134; Ames v. Lake Superior, etc., E. E. Co., 21 Minn. 241; Ligat v. Common- wealth, 19 Eem. St. 456, 460. » Charles Eiver Bridge Co. v. Warren Bridge, 7 Pick. 344; s. c. 11 Pet. 420, 571, per McLean, J. And see Ehine v. McKinney, 53 fex. 354. * Power's Appeal, 29 Mich. 504; Hood v. Finch, 8 Wis. 381; Dickey v. Ten- nison, 27 Mo. 373. As to the right to order reassessments, see Clark v. Miller, .54 N. Y. 528. * In Minnesota an act making no provision for "just compensation," its re- quirement that railroad companies shall permit others, on application, to con- duct elevators on the lands of such companies, was held void. State v. Chicago, M. & St. P. Ey. Co., 36 Minn. 402; 31 JT. W. 36o. Evidence should be allowed as to the damages per acre, without definite proof 276 EMINENT DOMAIN. § 248 Whatever facts tend to enlighten the jury on the subr ject, and thus enable them to reach a correct conclusion as to the value of the property taken, are admissible.^ A judicial ascertainment of compensation is unimportant to the owner where the government assumes respon- sibility for claims arising from the condemnation.^ A de- as to the number of acres involved. Ball v. Keokuk & N. W. Ey. Co., 71 Iowa, 306; 32 N. W. 354. In support of the estimates of witnesses they may be interrogated as to the location, advantages, and surroundings of the property. Little Rock Junction Ry. v. Woodruff, 49 Ark. 381; 5 S. W. 792. 1 Pennsylvania S. V. K. Co. v. Keller (Pa.), 11 A. 381. In an action to assess damages for property taken by a railroad company in exercise of the right of eminent domain, where the title is in dispute, evidence that part of the premises in question did not belong to plaintiff, and that his claim is excessive, is admissible. Pennsylvania S. V. S. Co. v. Keller (Pa.), 11 A. 381. Evidence showing the land in question to be a specially eligible for a bridge-site was properly admitted, as affecting the question of its value. Little Rock Junction Ry. v. Woodruff, 49 Ark 381 ; 5 S. W. 792. In ascertaining tlie value of lauds required for railway purposes, the latitude allowed to the parties in producing evidence of facts in support of the estimates of witnesses is a matter largely in the discretion of the presiding judge. The owner, however, should be allowed to put in evidence all facts which a vendor would adduce if he were attempting a piivate sale. Opposing counsel should be allowed to make every Inquiry an individual about to buy would feel it in his interest to make. Id. See also. Central Branch U. P. R. Co. v. Andrews, 87 Kan. 162; 14 P. 509. Evidence of sales of lots situated like the petitioner's land is not incompetent because they were small, and the latter large. Sawyer v. City of Boston, 144 Mass. 470; 11 N. E. 711. In assessing the value of a strip of land condemned for a right of way, which was not itself used for cemetery purposes, but was part of the tract of land owned by a cemetery association, it was held that the value of lots in other cemeteries was not competent evidence. Concordia Cemetery Ass'n v. Min- nesota & N. W. R. Co., 121 111. 199; 12 N. E. 536. The general selling price of lands in the neighborhood of the land in question cannot be shown by evidence of particular sales of alleged similar properties, at a price fixed in the mind of the witness, for the knowledge of what lands are generally held at for sale, and at which they are sometimes actually sold, bona fide, in the neighborhood may differ. Pittsburgh V. & C. Ry. Co. v. Vance, 115 Pa. St. .325; 8 A. 764. But in a proceeding by a railroad corporation to condemn a right of way through a farm, evidence for plaintiff as to the effect produced upon the selling value of other farms in the same county, by their being cut by railroads, as shown by actual sales, is not admissible. Kiernan v. Chicago S. F. & C. R. Co., 123111. 188; 14 N. E. 18. 2 Green Bay & M. Canal Co. v. Kaukauna Water-Power Co., 70 Wis. 635; 35 N. W. 529. § 249 BMII^ENT DOMAIN. 277 termination of the amount of compensation by com- missioners is sufficient.^ But generally the necessity for the taking must be shown in the petition.^ § 249. Treaty with owner. — Where an effort to agree upon compensation is required, it must be alleged and shown that the company cannot agree with the owner as to the price.^ The same rule of pleading governs with respect to filing maps.* Where the company fails to agree as to damages with the owner it is not bound to show negotiations with the lessee of the owner, the latter not being able to give the title and right acquired.^ Questions arising upon the -petition as to the treaty with the owners of the land, and the inability to acquire title by reason of the exorbitant , price asked by such owners, are jurisdic- tional and controvertible.^ 1 Patch V. City of Boston, 146 Mass. 52; 14 N. E. 770, or by assessors. Oliver V. Union Point & W. P. R. Co., 83 Ga. 257; 9 S. E. 1086. An appeal from the award of commissioners (bringing in question only the sufficiency of the dam- ages) is not inconsistent with the proceedings, to vacate the appointment of the commissioners, and to oppose the condemnation proceedings. Minneapolis Ry. Terminal Co. v. Minneapolis Union Ry. Co., 38 Minn. 157; 36 N. W. 105. See also St. J. Ter. R. Co. v. H. & St. J. R. Co., 94 Mo. .535; 6 S. W. 691. For presumptions in favor of regularity and fairness of proceedings by com- missioners, see Wilmington & W. R. Co. v. Smith, 99 N. C. 131; 5 S. E. 237. ■' New York, N. H. & H. R. Co. v. Franz, 5o Hun, 610. Where land sought to be condemned by a railroad company lies on the direct line between the end of its road, as built, and the terminus at which it aims, the fact that it could have reached the terminus, by a circuitous route, without crossing svich land floes not show that the land is not necessary for the construction of the road. Colorada E. Ry. Co. v. Union Pac. Ry. Co., 41 F. 293. 3 Portland & G. Turnpike Co. v. Bobb (Ky.), 10 S. W. 794; Reed v. Ohio & M. Ry. Co., (111.) 17 N. W. 807. Compare Grand Rapids & I. R. Co. v. Weiden, 70 Mich. 390; 38 N. W. 294. < In re Rochester Electric Ry. Co., 57 Hun, 56; 10 N. Y. S. 379; Durham <$; N. Ry. Co. V. Richmond & D. R. Co., 104 N. C. 673; 10 S. E. 664. ' Rochester, H. & L. R. Co. v. Babcock, HON. Y. R. 119; 17 K. E. 678. « Weiden V. Grand Rapids, L. & D. R. Co. (Mich.), .37 N. W. 872; Howland V. School District, No. 3, 15 R. I. 184; 2 A. 549; 8 A. 337. Where com- panies, shortly before filing their petitions, served written offers to purchase upon the owners of some of the parcels, left offers as to other parcels with some 278 EMINENT DOMAIN. § 250 § 250. The public use — The question of what is a public use has often been said to be one of law purely. This expression doubtless arose from the fact that it is xisually determined by the legislature in the first in- stance, and thus becomes embodied in the law as part of it after having been arbitrarily passed upon. But that it is not strictly and always a legal question is evident when we consider that a great many facts both of a general and a special nature must be brought to bear in establishing the dividing line between a public and a private use. Especially is this true in cases where the State does not seek to make the appropriation for pub- lic use directly to itself, for instance for capital grounds, but through the agency of private corporations whose person upon the premises, which in some cases came to the notice of the owners, and all these offers were declined, or taken no notice of, or the counter-offer was considered exorbitant and most of the owners had already sued for damages, and in their verified complaints had placed the value of the property at sums which the companies considered grossly extravagant, it was held that, as the estimates of value entertained by the owners and the companies differed so widely as to render it almost certain that the offer to purchase would be rejected, the efforts made by the companies were a sufBcient compliance with Laws N. y. 1850, c. 140, requiring a railroad company, before instituting condemnation proceedings, to make a bona fide and unsuccessful effort to purchase the property sought to be taken. In re Metropolitan E. Ey. Co., 2 N. Y. S. 278, holding also, that, as the allegations of the petition concerning the offers to purchase involved matters as ranch within the knowledge of the owners as of the companies, it was for the owners to show that they did not, in fact, receive the offer, or, if they did not ?:eceive it, why they did not accept, or make a counter-offer, and that there was reasonable ground to suppose that further negotiations might have resulted in an agreement. Under Sess. Acts Ala., 1884-85, p. 223, relating to condemnation of land by railroad companies, providing that if the owners of the land cannot agree with the company as to damages, " or, in case such owner is an infant, such value or damages shall be ascertained in the manner directed by the general laws ;" a previous attempt to agree on damages need not be alleged nor proved in the case of lands owned by an infant, though he has a guardian. Brown v. Rome & T>. R. Co., 86 Ala. 206; 5 So. 195. An act requiring a railroad company to run through a certain town if the citizens of such town will pay the excess of the cost of that route over the one proposed by the company, does not affect the right of the company to proceed to condemn the right of way before the cost of the route through the town has been determined and payment of the same by the citizens promised. Macon <& B. R. Co. V. Stamps (Ga.), 11 S. E. 442. I 251 EMINENT DOMAIN. 279 business though prosecuted for private gain largely interests the public. Private lands certainly could not be taken for the use of a private hotel company on which to erect hotel buildings for use in its business ; but such appropriation might be very necessary for the accommodation of the travelling public on a line owned and operated by a railroad company. § 251. Same— how determined. — And on account of the ■differences in topography, climate, commercial and in- dustrial occupations, in the various states, what would be a public use in one would be private in another. If the legislature has decided the question in the first instance the statute embodying its decision is not open to the objection by a party whose property is taken under it, that he is deprived of it without due process of law, for such statute is based upon general consider- ations of public necessity and welfare, and in that sense and to that extent constitutes by its own inherent force and effect " due process of law." But its decision is not always conclusive upon the courts, as to whether or not the use is public, and when its validity is brought before them they may re-examine and pass judgment upon the matter ; and to determine whether the purpose designated or in view is public, may review all the facts and circumstances with as much authority and effect as the legislature.^ 1 Matter of Deansville Cemetery Ass'n, 66 N. T. 569; Harding v. Goodlett, 3 Terg. 40; Bankhead v. Brown, 25 Iowa, 540; Chicago, etc., E. K. Co. v. Lake, 71 111. 3.33; Olmsted V. Camp, 33 Conn. 551; Tylor v. Beacher, 44 Vt. 648; Loughbridge v. Harris, 42 Ga. 500; Water- Works Co. v. Burkhart, 41 Ind. 364; Scudder T. Trenton, etc., Co., 1 N. J. Eq. 694; Eyerson v. Brown, 35 Micli. 333. The constitution of Missouri, 1875, provides that, " whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and as such judicially determined." Under this provision it is held that the ques- tion should not be submitted to a jury. City of Savannah v. Hancock, 91 Mo. 54; 3 S. W. 215. Same provision is found in Colorado. See Const. Colo., art. 15, sec. 4; Den- 280 EMINENT DOMAIN. § 251 Great deference, however, will always be paid to the legislative judgment as expressed in enactments provid- ing for appropriations of property. And where there is any doubt whether the use to which the property is pro- posed to be devoted is of a public or private character, courts will not undertake to disturb its judgment in this ver R. L. & C. v. Union Pac. Ry. Co., 34 F. 386; Pittsburg, W. & K. R. Co. v. Ben wood Iron Works, 31 W. Va. 710; 8 S. E. 453. In Virginia it was held that the necessity for the acquisition of land by the state for any asylum is not a subject of judicial cognizance, but belongs exclu- sively to the legislative department. Tait's Ex'r v. Central Lunatic Asylum, 84 Va. 271; 4S.E. 697. The taking may be defeated by showing that it is not necessary, though the use be unquestionably public. City of Detroit v. Daly, 68 Mich. 503; 37 N. W. 11. If the general purpose be public, the right cannot be defeated by showing a devotion of the property taken to private uses, as where a small space m stations of an elevated railroad was used for news stands. In re Metropolitan E. Ky. Co., 2 N. T. S. 278. A charge as follows : " The fact that some other company had ample terminal and depot grounds was no reason why the plaintiff should not condemn such lands described in the complaint, as the jury should find to be necessary for the construction and operation of its roads," is not erroneous. California Cent. Ry. Co. V. Hooper, 76 Cal. 404; 18 P. 599. Educating the public, by exhibiting artistic, mechanical, agricultural, and horticultural products, held to be a public use under Act. Pa., June 14th, 1887. Appeal of Rees (Pa.), 12 A. 427. As to what constitutes public use by improvement company. Green Bay & M. Canal Co. v. Kaukauna Water-Power Co., 70 Wis. 635; 35 N. W. 529. By railroad company, Toledo, S. & M. R. Co. v. East Saginaw & St. C. R. Co., 72 Mich. 206; 40 N. W. 436; Flint & P. M. R. Co. v. Board of Railroads Crossings, Id. 448; In re Niagara Falls Peddicord v. Baltimore, etc., E. K. Co., 34 Md. 463; Ottawa, etc., E. Co. v. Larson, 40 Kan. 301; 19 P. 661; Same v. Peterson, Id. 666. s State T. Eailroad Commissioners, 56 Conn. 308; 15 A. 756. 8 Morris v. Essex E. R. Co. v. Newark, 2 Stockt. Ch. 352. 4 Stockton V. Baltimore & N. Y. E. Co., 32 F. 9. 6 Black Eiver Improvement Co. v. Lacrosse Booming and Transportation Co., 54 wis. 659; referring to Ind. C. R. R. Co. v. State, 3 Ind. 421; Pa. E. E. Co. V. R. R. Co., 8 C. E. Green, (N. J.) 167; Davis v. E. T. & Ga. A. E. R. Co., 1 Sneed, Tenn. 94; U. S. v. E. E. Bridge Co., 6 McLean, 517. § 273 EMINENT DOMAIN. 307 in other appropriations under the power of eminent domain. And such right is not affected by the fact that the property so taken and appropriated was orig- inally acquired by them in the same way. * § 273. Reversion of the fee in land upon cessation of nse. — After the use for which lands were acquired in the exercise of the power and to which they have been de- voted has termihated or the enterprise of the promoters been abandoned, such lands revert to the original owner or his successors in interest, in whom the fee remains subject to the public servitude.^ A strict adherence to this rule is the only safeguard against evils which would result from acquisitions by corporations of lands for private purposes in the name of public necessity, by which means they would accom- plish indirectly what they are prohibited from doing directly. Still a railroad company may so contract as to acquire the fee ; ^ but only of essential property. * Usually, however, the rule is as above stated, and the original owner may continue to use the property in any way which does not interfere with the use of it for the purposes for which it was taken.^ 1 Grand Bapids, etc., E. K. Co. v. Grand Rapids, etc., Co., 35 Mich. 265; Cincinnati, etc., R. K. Co. v. Danville, etc., R. R. Co., "75 111. 113. See Mass., etc., R. R. Co. V. Boston, etc., R. R. Co., 121 Mass. 124. 2 Kansas Center R. R. Co. v. Allen, 22 Kansas, 285; Heard v. Brooklyn, 60 N. Y. 242; Hastings v. B. & M. R. R. Co., 38 Iowa, 316; Dean v. Sullivan R. R, Co., 22 N. H. 316; Kellogg v. Malin, 50 Mo. 496; Troy, etc., R. R. Co. v. Potter, 42 Vt. 265; Robins v. St. Paul, etc., E. R. Co., 22 Minn. 286. See Woodworth v. Payne, 74 N. T. 196; Pinkerton v. Boston, etc., R. R. Co., 109 Mass. 527. 8 Ballard v. Louisville R. Co. (Ky.), 5 S. W. 484. 1 It was held that a railroad could not after using earth taken for filling exca- vations sell it to other parties. Aldvich v. Drury, 8 R. I. 554; Chapin v. Sul- livan R. Co., 39 N. H. 564. 5 Henry v. Dubuque, etc., P. R. Co., 2 Iowa, 288; Giesy v. Cincinnati, W. & Z. R. Co., 4 O. St. 308; Weston v. Poster, 7 Mete. 297; Quimby v. Vermont Central, etc., 23 Vt. 387; Dean v. Sullivan R. R. Co., 22 N. H. 316, 321. And see Jackson v. Rutland, etc., B. C. Co., 25 Vt. 151; Adams v. Rivers, 11 Barb. 290; Blake v. Rich, 34 X. H. 282; Jackson v. Hathaway, 15 John, 447. 308 ORGANIZATION BY CHARTEE MEMBERS. § 274 CHAPTER XII. OKGANIZATION BY CHARTER MEMBERS. § 274. Preliminary membership. 275. Defective execution of articles. 276.' Proceedings after filing articles. 277. No notice of preliminary organization required. 278. Notice of subsequent meetings. § 274. Preliminary membership. — While the corpora- tion itself is a distinct legal entity from the persons composing it, we cannot possibly conceive of a corpora- tion being organized and put in working shape for the business for which it was chartered without willing in- corporators preceding organization, and members or shareholders afterwards. Those to whom the charter is granted or who sign the articles before filing are incor- porators, but cease to be such after incorporation, when they become members.^ One who has signed a con- tract to take part of the original issue of stock of a cor- poration is a subscriber .2 After a subscription has been accepted by the corporation, he becomes a shareholder.^ It would be idle to speak of conferring franchises with- out recipients of the same. But though the organiza- tion is not complete under either general or special laws 1 Chase v. Lord, 77 N. T. 1, 11; Lady Bryan's Case, 1 Saw. 349. 2 Peninsular, etc., R. R. Co. v. Duncan, 28 Mich. 130; Busey v. Hooper, 35 Md. 15; Spear V. Crawford, 14 Wend. 20, 23; Thomas Tunnel Co. v. Sheldon, 6 Bam. & 0. 341. * See Wonall v. Judson, 5 Barb. 210; Adderly v. Storm, 6 Hill, 624; State v. Tennis, 42 Conn. 560; Rosevelt v. Brown, 11 N. T. 148, 150. § 275 ORGANIZATION BY CHAETER MEMBERS. 309 until all the steps in the process of incorporation have been taken, yet in legal contemplation the corporation exists from the filing of articles in the proper ofiice in the one case and from acceptance of the charter in the other. The usual language of a general statute is that " cor- porations may be formed by," etc., which means that there is no corporation until the prescribed acts have been performed. Sometimes more explicit language is used, and it is declared that " upon filing said articles of incorporation with the Secretary of State (or other offi- cer) the persons who have signed and acknowledged the same become a body politic or corporate." Corporations having no capital stock may be consid- ered as completely organized upon the filing of the articles ; for our conception of a corporation is thereby satisfied, all the essential parts being then in esse, to wit, a legal institution with corporate powers and a complete membership to give it direction and exercise its powers. § 275. Defective execution of articles. — It is quite clear upon the authorities that the mere signing without ac- knowledging the articles does not constitute the signers, subscribers, or members. As to them the instrument is incomplete and cannot be enforced either for or against the corporation.^ The authorities cited below furnish a safe guard on a subject where much uncertainty and some con- flict of decisions have heretofore existed. By adher- ing strictly to the kw just declared, that no contract to take shares made before incorporation and ac- 1 Indianapolis Furnace, etc., Co. v. Herkimer, 46 Ind. 142; Dutchess & C. C. F. Co. V. Mabbett, 58 N. Y. 397; Reed v. Richmond St. R. Co., 83 Ind. 9; Wil- liamson V. Kokomo Bldg. & L. F. Ass'n, 89 Id. 397. 310 OEGANIZATION BY CHAETEE MEMBEES. §§ 276, 277 ceptanee can be made to inure in favor of the corpora- tion without the appointment of an agent to represent all parties, or unless the agreement forms a part of the articles as filed, no hardship or inconvenience can pos- sibly result, and a certain and just rule of business and dealing is established,— always a desirable object. § 276. Proceedings after filing articles. — Corporations which have a capital stock, though existing for certain purposes, are not complete for all purposes until further steps are taken after filing the articles, for as yet there are no members. It is usually required that the direc- tors for the first year or term shall be named in the articles. Such directors do not constitute the corpora- tion or its membership, for there is no corporation ex- cept in name. They open stock subscription books and do all other acts necessary to complete the organ- ization but the components of the corporate body are those who become stockholders after the filing. These alone have the right to give direction to the corporate enterprise and dispose of its estate. The directors, however, previous to complete organization, may re- ceive and transfer property in the corporate name and hold it for the benefit of future members.^ The case is not altered when the corporation is organized in the name of " The President and Board of Directors of," etc., or other similar designation. Such is a difference in form only and, need not be noticed ex- cept in the technique of legal procedure. The members still constitute the corporation and own its property, while the directors are their agents and trustees. • § 277. No notice of preliminary organization required.— ' Compliance with statutory provisions requiring the articles to state the names and places of residence of 1 Coyote, etc., Mining Co. v. Ruble, 8 Or. 284, 293. ^ 278 ORGANIZATION BY CHARTEK MEMBERS. 311 the directors appointed for the first year would seem to require a meeting of the incorporators previous to incor- poration for the purpose of making the appointments ; but no express direction for calling and giving notice of conducting such preliminary meeting is generally given. In actual practice the necessity for such preliminary meeting is dispensed with by unanimous consent of all the incorporators, evidenced by their signature to the articles containing the names of the directors for the first year and the other terms upon which it is agreed to become associated as a body corporate. But there must be a meeting after incorporation and before the adoption of by-laws containing specific rules and regu- lations governing the calling and conduct of the meeting. Such meeting or some act on the part of the members is necessary to put the corporate machinery just in- vented in motion.^ Where a meeting is held in compli- ance with a statute its formalities must be followed.* § 378. Notice of subsequent meetings. — If neither the by-laws adopted at the first meeting nor the articles provide how notice of subsequent meetings shall be given, there should be personal written or printed notice signed by some person authorized to designate the time and place of meeting ; though verbal notice whereby all the members obtained full information of the pro- posed meeting and its objects if proven would no doubt loe deemed sufficient.^ Indeed it would generally be 1 The California statute has directed such meeting to be called, held and conducted, and specified the manner and the objects for which it may be held. It also provides the means by which such meeting may be dispensed with. Civ. ■Code, sec. 301. 2 Bethany v. Sperry, 10 Conn. 200; Shelby B. R. Co. v. Louisville K. R. Co., 12 Bush. 62. 3 See Stow v. Wyse, T Conn. 214; Savings Bank v. Davis, 8 Id. 191; Bethany T. Sperry, 10 Id. 200; Stevens v. Eden Meeting House Soc, 12 Vt. 688; Wiggin V. Free Will Baptist Church, 8 Mete. 301; Evans v. Osgood, 18 Me. 213; Jones V. Milton, etc., Co., 7 Ind. 547; Johnston v. Jones, 23 N. J. Eq. 216. 312 EMINENT DOMAIN. § 27S practically impossible to give actual notice to all th& members. This rule requiring notice does not apply tO' regular stated meetings provided for in the articles and by-laws, which are deemed to have been fixed by the mutual consent of all the members, and of which they are bound to take notice withoiit further action.^ If, however, it is proposed to transact any other business at ohe of the set- day meetings than such as is ordained by the constitution, notice must be given as in other cases. ^ Proof that a day was fixed by common consent dispenses with notice of any and all meetings held on that day.^ If, however, the charter or articles require a special notice, it has been held that it cannot be dis- pensed with even by consent ; * but it may be stated as a well-established rule that all who attend a meeting and participate in the proceedings without objection founded on lack of notice will be estopped from object- ing subsequently.^ Due notice to all the members of a meeting wUl be presumed until the contrary is made to appear.® Members not present at a meeting for want of notice will be bound by such of the proceed- ings thereat as they subsequently acquiesce in or ratify.' 1 Rex V. Hill, 4 B. & C. 441, 443; Rex v. Carmarthen, 1 M. & S. 702; Warren V. Mower, supra; State v. Bonnell, 35 Ohio St. 10. 2 Grant on Corp. 157. ' Atlantic Fire Ins. Co. v. Sanders, 36 N. H. 252; Lane v. Brainerd, 30' Conn. 565. * Rex V. Theoderick, 8 East. 543; U. S. v. McKelden, 4 McArthur, 162. 6 Rex V. Chetwynd, 7 B. & C. 695; Matter of British Sugar Refining Co., 3 K. & J. 408; 26 L. J. Ch. 369; Jones v. Milton, etc., Turnpike Co., 7,H. 547; Samuel v. Holliday, 1 Woolv. C. C. 400; People v. Peck, 11 Wend. 604; Steb- bins V. Merritt, 10 Cush. 27. e Sargent v. Webster, 13 Mete. 49?. ' Turquand v. Marshall, L. R. 4 Ch., 376; Smallcombe v. Evans, 3 H. of L. Cas. 249; Bryant v. Goodnow, ,5 Pick. 228. See Phosphate of Lime Co. v. Green, L. R. 7 C. P. 43; Ramsey v. Erie, R. R. Co., 38 How. Pr. 193; s. c. 7 Abb. Pr. N. C. 156. Infra, Ch. XV. SUBSCBIPTIONS TO CAPITAL STOCK, SIS' CHAPTER XIII. SUBSCBIPTIONS TO CAPITAL STOCK. I 279. Subscriptions distinguished from otlier membership contractSt 280. Capital stock corporations. 281. Stock, capital, Capital stock. 282. What constitutes membership. 283. Laws entering into each contract of membership. 284. Acceptance of amendment to charter a new contract. 285. Who may become a stockholder. 286. Municipalities. 287. Can only become stockholders for public purposes. 288. Validity and enforceability. 289. Submission to popular vote, petition, etc. 290. Presumptions — Bona fide purchasers. 291. Kegistration. 292. Who to make the subscription for municipality. 293. Infants — Married women — partners. 294. Liability assumed in contract of membership. 295. A different rule in New England States. 296. When the contract is complete. 297. Acceptance by the corporation. 298. Must have legal validity at time of acceptance. 299. Agreements to subscribe. 300. Mutual agreements before incorporation. 301. Measure of liability wanting. 302. Difficult of enforcement where no agent is designated. 803. But a designated agent may sue. 304. Subscriptions taken by promoters. 305. The corporation has no common law remedy. 306. Agreements to contribute capital and form a corporatiOD. 307. Contracts to purchase shares. 308. Agreements made with the corporation. 309. Contract of membership defined. 310. Must contain essential parts of a contract. 311. Where law requires stock books to be kept. 312. Issuance of certificate not essential. 313. Nor form of contract important. 314. Neither party can withdraw. 315. Membership in benevolent, etc., societies. 316. Collateral parol agreement not binding. 317. General rules governing contracts. 318. Informalities may be waived. 514 SUBSCEIPTIONS TO CAPITAIi STOCK. § 280 § 319. Subscriptions in escrow. 320. Conditional subscriptions. 321. Conditions in municipal subscriptions. 322. Power of corporate officers to insert conditions. 323. When taken by commissioners. 324. Conditions implied in subscriptions before incorpoiation. 325. The fixed amount of capital must have been subscribed in good &ith. 326. Requirement founded on justice and public policy. 327. Proof of compliance herein. 328. Cases in which the objection does not lie. 329. When the implied becomes an express condition. 330. What subscriptions to be counted. 331. Express conditions in preliminary subscriptions. 332. Conditions and stipulations distinguished. 333. What conditions may be inserted. 334. Undertakings to locate railroads, etc. 335. Construction of conditional subscription. 336. Performance and ayoidance of conditions. 337. Colorable subscriptions binding. 338. Fictitious subscriptions. 339. When subscriptions become payable. 340. Statutory modifications of the common law. 341. The rule in Oregon. 342. Construction of special provisions. 343. Extent of liability to pay assessments. 344. Time and mode of payment. 345. In what subscriptions to be paid. 346. Stockholders as plaintiff against corporation. § 379. Subscriptions distinguished from other member- -ship contracts. — A nominal distinction is generally ob- served between the constituents of capital stock cor- porations and such as have no capital stock, the term stockholders or shareholders being applied to the for- mer and that of member to the latter. But it is a dif- ference in words only resorted to for the sake of con- venience, as in both cases the whole number of persons thus designated own both the franchise and the prop- erty in the corporate name. § 280. Capital stock corporations Far outranking in importance all other classes of private corporations are those in which the monetary 'interest of the members is divided into shares, each share representing a pro- portionate interest in the property and business of the ^ 281 SUBSCRIPTIONS TO CAPITAL STOCK. 315 joint enterprise. They are familiarly known as capital stock corporations.^ § 281. Stock, Capital, Capital stock. — The capital of a corporation means the amount of property possessed by it as forming the basis of taxation, for instance.^ But by the term capital stock we mean the sum fixed by the charter or articles as the amount paid in or to be paid in by the stockholders as a fund with which to prose- cute the corporate business, and to which creditors may look for satisfaction of their demands against the cor- poration. Consequently, when we speak of member- ship in a capital stock corporation, we mean an individ- ual interest acquired by contract, in such fixed sum, and a proportionate liability.^ There is a distinction also to be taken between the terms stock and capital stock, often used indiscriminately. " Stock " means the seg- regated interests in the hands of individuals, while " capital stock " signifies the aggregate interest.* The term " stock" is rarely applied to government securities in this country at present, though it was formerly in common use to designate municipal bonds, and is still so used in England.^ 1 This class of corporations was scarcely known in this country prior to the Eevolution. McKim v. Odom, 3 Elands. Ch. (Md.) 407, 418. 2 Ohio & M. R. R. Co. v. Weber, 96 III. 443; City of Phila. v. Ridge Ave. R. Co., 102 Pa. St. 190. 8 The definitions vary, but the above is the plain English of what the courts would say. Eabl, J., in Williams v. Western Union Tel. Co., 98 N. Y. 162, 188; defines capital stock to be " the property of the corporation contributed by its stockholders or otherwise obtained by it to the extent required by its charter." Almost exactly the same definitions are given by Justice Field in Bailey v. Clarke, 21 Wall. 284; andbyFoLOEB, J., inBurrall v. BushwickR. Co., 75 N. Y. 211. See also Jones v. Davis, 35 Ohio St. 474, 476; Barry v. Merchants' Exch. Co., 1 Sandf. Ch. 280, 305; Christenson v. Eno, 106 N. Y. 97, 100; Hightower y. Thornton, 8 Ga. 486; Hannibal & St. Joseph R. Co. v. Shacklett, 30 Mo. 551, 558; St. L. I. M., etc., R. Co. v. Loftin, 30 Ark. 693, 709. * Buit V. Wilcox, 22 N. Y. 551, 555; People v. Commrs., etc., 23 N. Y. 192, 220; Bailey v. R. R. Co., 22 Wall. 604, 637. ° Cavanaugh's Money Securities (2nd Edition), 488, 494; Bank of Commerce v. New York, 2 Black. 620; Weston v. City of Charlestown, 2 Pet. 449. 316 ORGANIZATION BY CHARTEK MEMBERS. § 283 § 383. What constitates membership. — No one assumes any of the duties or liabilities or becomes entitled to any of the benefits of membersMp in a private corpo- ration aggregate otherwise than by contract, express or implied. In this respect corporations resemble copart- nerships. The corporation owes its origin no less to the mutual contract of its incorporators among themselves whereby they agree to form a particular corporation than to the act of the state in conferring a franchise, while in the formation of a copartnership the state has no part. Its essential basis is the precedent agreement of the several partners among themselves, § 383. Laws entering into each contract of membership. — Whether formed under general laws or special ena- bling acts, the contract to form a corporation includes the terms and provisions of the law under which it is made. The contract of subscription is to be performed and its terms fixed and construed according to the laws of the state creating the corporation and none others.^ It is not in the nature of a common law contract for the rea- son that there must be a statutory license provided by or obtained from the legislature without which it could not be made at all. A subscription for stock is pre- sumed to have been made with reference to the law in force at the time ; and where the period prescribed by statute is suffered to elapse without beginning the con- struction of a railroad, a subscriber for stock is absolved ' from liability on his subscription, and the subscription cannot be revived by the subsequent passage of an act suspending the limitation and fixing another date when such period shall begin to run, especially as a subsequent ' Glenn v. Clabaugh, 65 Md. 65; 3 A. 902, holding that the subscriber U) stock in a Virginia corporation could not invoke the insolvency laws of Maryland to discharge him from his obligation to the corporation. ^ 284 OKGANIZATION BY CHAKTEK MEMBERS. 317 ■act of incorporation.! Though the construction and in- terpretation of this species of contract are according to common-law rules, yet all questions as to the validity of its terms must be tested by the law under whose authority it is formed. The terms of the charter are the ligaments which bind the members to it, and to each other. No other consideration than the mutual promise of each to all the others is required, and a clear, unequivocal expression of an intention to share in com- mon the benefits and burdens of the proposed corporate enterprise according to the articles under the provision of the particular law governing its creation, are the only ■essentials of the agreement. § 3S4. Acceptance of amendment to charter a new contract. — "While amendments to charters by special act and in articles of incorporation under general laws allowing such amendments are not binding upon an individual non- consenting member, yet they may be accepted. Where the change is beneficial, members of the orig- inal corporation can have no objection to accepting the change ; and though injurious to their interest they are frequently accepted to avoid a total loss. In whatever way the acceptance is manifested and accomplished, it is the creation of a new contract of membership governed by the usual rules and require- ments applicable thereto. Every change in the amount of capital stock, or enact- ment or repeal of a by-law — indeed, any of the internal modifications in the government and management of a corporation, as are provided for by concurrent act of a majority of the membership in the general law — is in 1 Bywaters v. Paris & G. Hf. Ky. Co., 73 Tex. 624; 11 S. W. 850. See also Chesapeake, O. & S. W. R. Co. v. Grlest, 85 Ky. 619; State v. R. R. Co., 24 Keb. 143; 3#1sr. W. 43; Bravard v. R. R. Co. 115 Ind. 1; Young v. R. R. Co., 75 la. 140; 39 N. W. 234. 318 ORGANIZATION BY CHAKTBE MEMBEES. § 285= one sense the creation of a new corporation. But these are required to be made from time to time for the wel- fare and success of the corporate enterprise, and are not such changes as require the consent of all the members. It is only the important changes which amount to sub- stantial departures from the objects and purposes for which the corporation was created that are repugnant to the general law, and so far violative of the terms of each member's contract as to require a novation to be- come binding upon him,^ In Mahan v. Wood ^ promissory notes had been given, for shares in a homestead association about to be formed. The articles provided that each share for which the notes were given, should represent a lot of landv It was held that the mere fact that when the association was formed it had a different number of shares from that agreed upon did not constitute a failure of consid- eration, provided the land was the same and the lots of the same value, but it would be otherwise if the price of each share had been greater than that represented. § 285. Who may become a stockholder. — The extent of the power of a private corporation to become the owner of its own stock^ and to subscribe for or purchase shares in other corporations * is elsewhere considered. The general capacity of parties to subscribe for shares is limited by and co- extensive with their capacity to make other contracts and assume other liabilities. A- state may become a shareholder in a private corporation and acquire equal but no superior right to any other stockholder.* ' » New Haven, etc., R. K. Co. v. Chapman, 38 Conn. 56; Infra, § 168, et seq. " 44 Cal. 462. » Infra, § 172. * Supra, § 5. s Gibson V. Richmojid & E. R. Co., 37 F. 743. § 286 SUBSCEIPTIONS TO CAPITAI, STOCK. SIS' § 286, Municipalities — It is well settled that the dis- ability attaches to municipal as to private corporations, and that without express statutory authority they can- not make a valid subscription. This principle was first asserted in Pennsylvania,^ and has since been followed in many cases in that and other states and in United States courts. Such subscription is " manifestly for- eign to the usual purposes intended to be subserved by the creation of corporate municipalities." ^ Without legislative sanction for a vote of the people of the municipality authorizing a subscription either for stock ^ or the issue of aid bonds to a railroad com- pany,* the defence of a want of legal authority is avail- able in favour of the city, town or county whose officers have issued them against any person to whom such shares of stock or securities have been delivered, whether by the agents of the municipality or in the ordinary course of business, the holder in either case being chargeable with notice of all the statutory pro- visions and any defect of authority therein.^ 1 Sharpless v. Mayor, etc., 21 Pa. St. 147. See also Dill. Munic. Corp. 19, 20, and cases cited. ^ Dillon, Munic. Corp., 161. See also, Kenicott v. Supervisors, 16 Wall. 452; Bell V. Railroad Co., 4 Id. 598; Thompson v. Lee Co., 3 Id. 327; Kelly v. Milan, 127 U. S. 139; Wells v. Supervisors, 102 U. S. 625; Barnes v. Lacon, 84 111. 461; Lamoille, etc., R. R. Co. v. Fairfield, 51 Vt. 257 ; Leavenworth Co. v. Mil- ler, 7 Kan. 479; Sharpless v. The Mayor, 21 Pa. St. 144. Compare Marsh v. Ful- ton Co., 10 Wall. 676; Welsh v. Post, 99 111. 471. Legislative authority (Gen. St. Mo., sec. 338) to subscribe to the stock of a railroad company, will authorize a subscription, but will not validate the issue of negotiable bonds in payment thereof. Hill v. City of Memphis, 134 TJ. S. 198; 10 S. Ct. 562. s City of Jonesboro' v. Cairo, etc., R. K. Co., 110 U. S. 192; Pa. R. R. Co. v. Phil., 47 Pa. St. 189; Allen v. Louisiana, 103 U. S. 80. Compare East Oakland v. Skiimer, 94 U. S. 255; Brodie v. McCabe, 33 Ark. 690; Gelpeke v. Dubuque, 1 Wall. 220; Campbell v. Paris, etc., R. R. Co., 71 111. 6U; City of Lynchburg v. Slaughter, 75 Va. 57. * State V. Saline, etc., Court, 51 Mo. 350; City Council, etc., v. Montgomery, etc., Co., 31 Ala. 76. 6 City of Ottawa v. Carey, 108 U. S. 110; Ogden v. County or Daviess, 102 U. S. 634; McClure v. Township of Oxford, 94 Id. 429; Lewis v. City of Shreve- port, 108 Id. 282 ; Dillon on Munic. Corp. , sec. 161 ; La Fayette v. Cox, 5 Ind. 38. 320 SUBSCKIPTIONS TO CAPITAL STOCK. § 288 § 387. Can only be made for public purposes. — The power to make such subscriptions is still further narrowed by the rule that they can only be made to aid and encour- .age enterprises of public utility,^ The right to aid by taking stock or lending credit even in that case was long denied and combated ; ^ but that the legislature may give it is now well settled,^ and it has been held that the authority was implied in a power given " to borrow money for any purpose ; " * also that a sub- -scription may be validated by subsequent legislation.^ The value of such subscriptions was for a long time materially affected by the fact that their payment de- pends practically upon the will of the legislature to grant and keep in force in the hands of corporate au- thorities adequate taxing powers, and the willingness of .the latter to exercise them.® § 288. Validity and enforceability. — But the course pur- igued in the federal courts for several years past, of holding municipalities to due performance and enforc- ing the same by the issuance of peremptory writs of mandamus directed to the officers of the same, has effected a wholesome check upon the tendency to reck- 1 state V. Osawkee Township, 14 Kan. 418; Clark v. Des Moines; 19 Iowa, 199; Bissellv. Kankakee, 64111. 249; Loan Ass' n v. Topeka, 20 Wall. 655; Brewer Brick Co. v. Brewer, 62 Me. 62; Weismer v. Village of Douglass, 64 N. Y. 91; McConnell v. Hamm, 16 Kan. 228; Allen v. Inhabitants of Jay, 60 Me. 124; Lowell V. Boston, 111 Mass. 463; Union Pac. R. R. Co. v. Smith, 23 Kan. 745; ■Savings Ass'n v. Topeka, 3 Dillon 376; Frederick v. Augusta, 5 Ga. 561; Com- mercial B'k V. City of lola, 2 Dillon, 353. 2 See Cooley Const. Lim., 261-6; Dillon, Munic. Corp., 117, 123; Dixon Co. v. Field, 111 U. S. 83. 8 Curtis V. Butler Co., 24 How. 435; Zabriskie v. R. R. Co., 23 Id. 381; Knox County V. Aspinwall, 21 Id. 539; Amey v. Mayor, 24 Id. 364, 376; Gelpeke v. Dubuque, 1 Wall. 175. < Rogers v. Burlington, 3 Wall. 654. ' Campbell v. Kenesha, 5 Wall. 194. ^ It has been held that a state may, after obligations have been incurred under statutory authority, so modify the tax laws as to exempt important portions of 4;axable property. Gilman v. Sheboygan, 2 Black. 510. I 289 STJBSCEIPTIONS TO CAPITAL STOCK. 821 lessly incur bonded and other forms of indebtedness to railroads and afterwards repudiate.^ And it has now become the settled doctrine that after a subscription has been made under acts passed in strict accordance with constitutional provisions,^ an act of the legislature so abridging or modifying the taxing power as to de- prive the municipality of the power to meet such obli- gations is unconstitutional and void.^ A subscription made by an assumed municipality before incorporation upon a vote of the residents within its proposed bound- aries is void.* But a town may incorporate subse- quently under a previous act which authorizes " any incorporated town or city to subscribe for stock," and then make a valid subscription ; * or it may be made to a corporation not yet created and accepted by the cor- poration after it comes into existence.^ § 289. Submission to popular vote, petition, etc.— In order to render municipal subscriptions valid and bind- ing, a substantial compliance with all the requirements of the statute authorizing the subscription must have been attended to.^ If a popular vote be required on a 1 See cases cited in preceding notes. 2 Amoskeag Nat. B'k v. Town of Ottawa, 105 U. S. 667. 8 Wolff V. New Orleans, 103 U. S. 358. Compare Hays v. Dowes, 75 Mo. 250; Edwards v. Williamson, 70 Ala. 145. In Napa Valley R. R. Co. v. Napa Co., 30 Cal. 435, it was held that the legislature may compel the making of a sub- scription, and the issuance of bonds in payment therefor. Compare People v. Batchelor, 53 N. T. 128; Cairo, etc., R. R. Co. v. Sparta, 77 111. 505. * Rochester v. Alfred, 13 Wis. 432; Dillon on Munic. Corp., sec. 12, 117, 157; Berliner v. Waterloo, 14 Wis. 378; Clark v. Janesville, 13 Wis. 414; s. c. 10 Id. 136; Cooley on Const. Lim., sec. 261, et seq. 6 Lewis V. Clarenden, 5 Dill. 329. 6 Daviess County v. Huidekopen, 98 U. S. 98; James v. Milwaukee, 16 Wall. 159. See also, Concord v. Portsmouth Sav. B'k, 92 U. S. 625; R. R. Co. v. Fal- coner, 103 Id. 821. Compare Rubey v. Shain, 54 Mo. 207; People v. Franklin, 5 Lans. (N. T.) 129. ' Angel V. Hume, 17 Hun, 374; Buchanan v. Litchfield, 102 V. S. 278; Peo- ple V. Barrett, 18 Hun, 206; People v. Suffern, 68 N. T. 321; People v. Button, 18 Hun, 116; Carroll Co. v. Smith, 111 U. S. 556; People v. Hurlburt, 46 N. T, 21 322 SUBSCEIPTIONS TO CAPITAL STOCK. § 289' proposition to subscribe upon one consideration or for a certain purpose, that proposition and no other must be submitted to be voted upon.i So bonds must be signed or attested by the officer designated where one is designated, else they are invalid ; 2 and the method pointed out for calling and conducting the election must be pursued.* It is not necessary that the designated proportion of all the voters within the territory affected by the proposition be cast for the proposition. It is sufficient if all have an opportunity to express themselves as in other elections. If they do not choose to do so the assent of all who absent themselves is presumed.* But where the statute authorizing the submission makes a different provision, as that the proposition shall receive the sanction of a majority of all the taxpayers ^ or in- 110; Hawley v. Fairbanks, 108 U. S. 543; Wilson v. Cancadia, 15 Hun, 218; Wheatland v. Taylor, 29 Hun, 70. 1 As where the authority given was to issue bonds running 20 years upon a vote of sanction being obtained, and the proposition as submitted called for bonds running not exceeding 10 years. Cairo, etc., R. R. Co. v. Sparta, 77 111. 505. See also Jessamine Co. v. Swigert's Admr. (Ky.), 3 S. W. 18; Hamlin v. Meadville, 6 Neb. 227, where it was held that a vote authorizing a subscription gave no power to make a donation. And if the vote be directed to be taken at a regular town meeting and it be taken at a special one, it is irregular and insuffi- cient. Parea v. Lippincott, 2 Bradw. (111.) 466. 2 Bissell V. Spring Valley, etc., Co., 110 U. S. 162. ' In People v. Smith, 45 N. T. 77, it was held that where the act required a petition of taxpayers, a petition by an agent for them was insufficient. So a vote in the alternation as to grantor is void. State v. Roggen, 22 Neb. 118; .34 N. W. 108. If a registration of votes be required, such registration is indispen- sable. People V. Santa Anna, 67 111. 57. See State v. County of Wabaunsee, 36 Kan. 180; 21 P. 942; People v. Laena, 67 111. 65. Observance in the matter of appointing officers and the general conduct of the election by them is necessary. Chicago, etc., R. R. Co. v. Mallory, 101 111. 583. * County of Cass v. Jordan, 95 U. S. 373; Carroll Co. v. Smith, 111 U. S. 556; State V. Brassfleld, 67 Mo. 331; People v. Chapman, 66 111. 137; Hawkins V. Carroll Co., 50 Miss. 735; County of Cass v. Johnson, 95 U. S. 360; Louis- ville, etc., R. R. Co. V. Tenn., 8 Heisk. 663; Webb v. La Fayette Co., 67 Mo. 353; People v. Harp, 67 111. 62; Dunnovan v. Green, 57 111. 63; St. Joseph v. Rogers, 16 Wall. 644; Milner v. Pensacola, 2 Woods, 632; Melvin v. Lisenby,. 72 111. 63; Reiger v. Beaufort, 70 N. C. 319. 6 Culver v. Fort Howard, 8 Hun, 340. § 290 STJBSCKIPTIONS TO CAPITAL STOCK. 323 habitants, a majority of those actually voting is not sufficient.^ So where the submission is required to be based upon a petition of a certain proportion 2 or a designated number,^ a petition by a less proportion or a less number will invalidate the subscription. § 290. Presumptions— Bona fide purchasers But com- pliance in unimportant details and matters of form is not required. " Defects, irregularities or informalities which do not affect the result of the vote do not affect its validity."* While substantial requirements cannot be dispensed with, there are frequently mere irregularities which, however they may affect the immediate parties, cannot be set up to defeat a recovery by innocent holders without notice of the same. They are allowed to in- dulge in the presumption that all the preliminary and merely ministerial acts were duly and properly per- formed.® Irregularities in holding, conducting and cer- 1 Walnut V. Wade, 103 tJ. S. 683. 2 People V. Smith, 45 N. Y. 112; People v. Hughitt, 5 Lans. 89; Wells- borough v. New Tork, etc., R. R. Co., 76 N. Y. 182; People v. Hulburt, 59 Barb. 446; People v. Franklin, 5 Lans. 129; People v. Peck, 62 Barb. 545; People V. Oliver, 1 Thomp. & C. 570. Compare Syracuse Sav. B'k v. Seneca Falls, 21 Hun (N. Y.), 304; St. Joseph Township v. Rogers, 16 Wall. 644; Faris v. Reynolds, 70 Ind. 360. 3 Monadnock R. R. Co. v. Petersboro, etc., 49 N. H. 281; Gilson v. Dayton, 123 U. S. 59. * Commrs. v. Thayer, 94 U. S. 631. Where no mode of submission is pre- scribed, an election held according to the usual method is sufficient. People v. Logan Co., 63 111. 374. The absence of a seal does not affect the right of aftona fide holder to recover upon bonds issued in payment of a subscription. Draper V. Springport, 104. U. S. 501. A notice for a town meeting " to see if the town will loan its credit" for the proposed object, was held sufficient notice that a stock subscription to a railroad company named in the notice would be acted upon. Belfast, etc., R. R. Co. v. Brooke, 60 Me. 568. 5 See Munson v. Lyons, 12 Blatch. 539; Draper v. Springport, 101 U. S. 501; Clarke v. Hancock; Supervisors v. Schenck, 5 Wall. 772. Compare Pana v. Bowler, 107 U. S. 529; Singer Mfg. Co. v. Elizabeth, 42 N. J. L. 249; County of Jasper v. Ballou, 103 U. S. 745; Johnson v. Stark, 24111. 75; New Haven, etc., V. Chatham, 42 Conn. 465. 324 SUBSCRIPTIONS TO CAPITAl, STOCK. § 293 tifying the election cannot be taken advantage of after the bonds or stock have passed into the hands of bona fide purchasers for value.^ § 291. Registration. — If registration with a certain officer be required of the bonds issued in payment of the subscription before delivery to a purchaser, such registration is usually considered essential to their validity.'^ § 292. Who to make tlie subscription for municipality. — The same principles of agency govern in this case as in the execution of powers by corporations generally. If no particular agent or body is designated by the statute, the contract may be made by those who usually execute the contracts of the corporation. But a provision that some particular agent or person or body shall make it must be strictly complied with.^ § 293. Infants — Married women — Partners. — Stock in a corporation by an infant cannot be regarded as a neces- sary of life. But, like other contracts of this nature.it is not void but only voidable, and may be ratified by the infant at his majority.* 1 Kimball v. Town of Lakeland, 41 F. 289; Madison Co. v. Brown (Miss.), 7 So. 516. Compare Wilson v. Union Sav. Ass'n, 42 F. 421. Where an election is called for the purpose of voting on a proposition to issue bonds in aid of a certain railroad, the submission to the voters, at the same election, of a proposition to aid any railroad that may be built between two certain points within the next five years, though improper, does not invalidate bonds Issued to the first-named railroad in pursuance of such election, after such bonds have passed into the hands of innocent purchasers. Williams v. People (111.), 24 N. E. 647. 2 Hoff V. Jasper County, 110 U. S. 53; Anthony v. Jasper County, 101 U. S. 693. " Nugent V. Supervisors, 19 Wall. 241 ; County of Moultrie v. Eockingham Ten Cent Sav. B'k, 92 IT. S. 631; County of Cass v. Billett, 100 Id. 585. Com- pare State V. Jennings, 4 Wis. 549. See also, Chicago, etc., E. E. Co. v. Putnam (Kan.), 12 Pac. Eep. 593, where it was held that a board of supervisors could au- thorize the county clerk to sign for them. * Lumsden's Case L. E., 4 Ch. 31. Holding the shares for fourteen months § 293 SUBSCRIPTIONS TO CAPITAL STOCK. 325 Undoubtedly, acting as a shareholder and receiving the benefits of such relation for a considerable time creates an estoppel against him.^ The defence is per- sonal to the infant and cannot be made available to a transferee.^ A repudiation during infancy is effectual to render the subscription void ab initio.^ A married woman could not, at common law, any more than an infant, bind either her husband or her separate estate by a stock subscription. But under liberal stat- utory provisions both in England and the United States most of her disabilities in the matter of contracting have been removed and her subscriptions where such statutes are in force, and are sufficiently broad in their terms to embrace contracts generally, extend to those under consideration. Where a married woman is incapable under the statute of making a contract binding her per- sonally or charging her separate estate, the husband, if he subscribes for stock in the name of his wife, is per- sonally liable on the subscription, and subject, to the extent of the stock, to any additional liability imposed by the statute on stockholders. ^Whether a subscription after coming of age held to be sufficient acquiescence though he had never acted as a shareholder. Ebbete's Case L. R., 5 Ch. 302. The following acts after coming of age wei'e held a ratification of subscription made before majority. Holding as trustee, and taking no steps to repudiate for two years: — Mitchell's Case L. R., 9 Eq. 363. But a signilicant act of repudia- tion is not required. See Wilson's Case L. R., 8 Eq. 240 ; Hart's Case L. R., 6 Eq. 512. It was held not sufficient that after coming of age the infant had sur- rendered' the shares for exchange for others. Pirn's Case, 3 De G. & Sm. 11. See also Baker's Case L. R., 7 Chan. 115. 1 Cork, etc., Ry. Co. v. Cazenoe, 10 Q. B. 935; Dublin, etc., Ry. Co. v. Black, 7 Railway & Can. Gas. 434; s. c, 8 Exch. 181; Beardsley v. Hotohkiss, 96 K Y. 201. 2 Beardsley v. Hotchkiss, 96 N^. Y. 201. The court will never presume in- fancy; hence it must be taken advantage of by plea of confession and avoidance. Leeds, etc., Ry. Co. v. Fearnley, 4 Exch. 26. 8 Parson's Case L. R., 8 Eq. 656; Newry, etc., Ry. Co. v. Coombe, 3 Exch. 565; s. c. 18 L. J. Exch. 325. * Clopton, J., dissenting. National Commercial Bank v. McDonnell (Ala.), 9 So. 149; Dorgan v. Same, Id. ; Bush v. Same, Id. ; McMillan v. Same, Id. 326 SIJBSCRIPTIONS TO CAPITAL STOCK. § 294 by an individual partner in the firm name will bind the copartnership depends, of course, upon the terms of association. If wilhin the scope of the purposes for which the copartnership was formed^ his subscription will bind it -^ otherwise not.^ § 294. Liability assumed in contract of membership. — Every person who unconditionally subscribes for stock in, or engages to become a member of, an incorporated company, thereby assumes to pay for the same accord- ing to the stipulations contained in the articles of as- sociation. Whenever the subscription paper refers to the articles, the provisions of the latter are expressly incorporated in the contract of subscription, and when not referred to they form a part of it by implication.^ It is a liability arising from his contract of membership to contribute the amount of the shares for which he has subscribed and not merely for the number of shares actually taken.* The liability of a subscriber to shares of capital stock to contribute capital is of a similar nature as that of one who signs articles of copartnership agreeing to contribute a share of the partnership cap- ital. And this implication attaches to the contract not- withstanding a provision in the constating' instruments authorizing a sale of the shares of delinquent sub- scribers. The power to enforce the claim of the cor- poration against subscribers by civil action for unpaid subscriptions to the capital stock is cumulative to the 1 Union Hotel Co. v. Hersee, 79 N. T. 454; Odgensburg, etc., E. E. Co. v. Frost, 21 Barb. 541; Maltby v. Northwestern, etc., K. R. Co., 16 Md. 422. 2 Livingston v. Pittsburgh, etc., K. K. Co., 2Grant'sCas. 219; Statev. Beck, 81 Ind. 501. Bernard v. Lapeer, etc., Co., 6 Mich. 274. s Rensselaer, etc., Co. v. Barton, 16 N. Y. 460; Sewall v. Herkimer Mfg. Co., 2 N. Y. 330. * Cole V. Ryan, 52 Barb. (N. Y.) 168; Upton v. Tribilcook, 91 U. S. 45; Web- ster V. Upton Id. 67; Fry's Ex'trs. v. Lexington, etc., R. R. Co., 2 Mete. (Ky.) 316, 317; International Fair & Exp. Assn. v. Walker (Mich.), 47 N. W. 338. ^ 295 SUBiSUlUi'TIOA'S TO CAPITAL STOCK. 327 right of forfeiture, where there are no provisions to the ■contrary,^ § 295. A different rule in New England States. — Such is the recognized and established doctrine in most of the states ; but a rule was established in the New England States at an early date, and has been since adhered to, to the effect that unless the subscriber expressly promises or the charter expressly obligates him to pay for the stock in his subscription, the corporation cannot collect the same by action at law. The rule originated from the form and peculiarities of early charters to turnpike companies in which the shares of stock were not limited in amount but imposed upon each shareholder an un- limited liability for the whole capital stock except so far as it had already been paid by himself and others. Just how the transmutation in the law from unlimited liability to no liability at all on such contracts was brought about has never been made very clear.^ 1 Multon V. Clayton, 54 la. 425; Hughes v. Antletam Mfg. Co., 34 Md. 326; Hartford & N. H. K. K. Co. v. Kennedy, 12 Conn. 514-316; Eensselaer, etc., PlankroadCo. v. Barton, 16 if. T. 457, note; Lake Ontario, etc., K. R. Co. v. Mason, 16 N. T. 451; Buffalo, etc., R. R. Co. v. Dudley, 14 N. Y. 336; Northern R. R. Co. V. Miller, 10 Barb. 297; Dutchess Cotton Mfg. Co. v. Davis, 14 Johns. 239; Essex Bridge Co. v. Tuttle, 2 Vt. 293; Goshen, etc., Turnpike Co. v. Hur- tin, 9 Johns. 217; Cheraw, etc., R. R. Co. v. White, 14 S. C. 51; Waukon, etc., R. R. Co. V. Dwyer, 49 la. 121; Grosse Isle Hotel Co. v. Panson's Exrs., 42 N. J. L. 10; Kirksey v. Florida, etc., Plankroad Co., 7 Fla. 23; Beene v. Cahawba, etc., R. R. Co., 3 Ala. 660; Troy Turnpike, etc., Co. v. McChesney, 21 Wend. 296; Carson v. Arctic Min. Co., 5 Mich. 282; Dexter, etc., Plankroad Co. v. Millard, 3 Mich. 91; Instone v. Frankfort Bridge Co., 2 Bibb. 577; Klein v. Alton & Sangamon R. R. Co., 13 111. 429. 2 See Worcester, etc.. Tump. Co. v. Willard, 5 Mass. SO; Franklin, etc., Turnp. Co. V. White, 14 Id. 286; Belfast, etc., R. R. Co. v. Moore, 60 Me. 561; White, etc!, R. R. Co. v. Eastman, 34 N. H. 124; Conn., etc., R. R. Co. y. Bailey, 24 Vt. 465; Katama, etc., Co. v. Jernigan, 125 Mass. 156; Boston, etc., R. R. Co. v. Wellington, 113 Mass. 79; Russell v. Birstod, 49 Conn. 251. Compare Odd Fellows, €tc., Co. V. Glazier, 5 Harr. (Del.) 172; Stokes v. Lebanon, etc., Co., 6 Humph. 241; City Hotel V. Dickinson, 6 Gray, 586; Belfast, etc., E. K. Co. v. Cottrell, 66 Me. 185; Katoma Land Co. v. HoUey, 129 Mass. 540. It has frequently been held that an agreement to "take and fill" a number of shares was equivalent to 328 SUBSCRIPTIONS TO CAPITAL STOCK. § 297' § 296. When the contract is complete. — ^The contract of membership may be made as well before as after the beginning of the corporation's existence, but does not be- come of binding force and effect as such until the cor- poration comes into existence and is made a party to it by accepting it. Those who sign and acknowledge the articles of associations having no capital stock, and pro- ceed to a completion of the process of incorporation by filing the same, become members eo instanti, and no further assent by the corporation to the contract is nec- essary. The same may be said of subscribers to the- capital stock of railroads, wagon roads and other corpo- rations required to provide a proportion of their capital stock before the issuance of a certificate. To allow them to withdraw after the issuance of the certificate and be- fore the formal acceptance by the agents of the corpo- ration would be to allow them to perpetrate a fraud upon creditors as well as upon the state, § 297. Acceptance by the corporation In other cases there must be acceptance on the part of the corporation or its agents before such agreements become binding. Such acceptance may- be made by the board of directors after organization under general law. No particular formality is required to be observed in accepting stib- scriptions taken before complete organization. Any act which clearly signifies that a subscription is or has been recognized as valid is suflicient.^ The offer is revocable an express promise to pay for them. Buckfield, etc., E. R. Co. v. Irish, 39 Me. 44; Penohscot, etc., K. K. Co. v. Bartlett, 12 Gray, 244; Seymour v. Sturgess, 26 N. T. 134; Ft. Edward, etc., Co. v. Payne, 17 Barb. 567; Pittsburg, etc., 0. R. Co. V. Gazzan, 32 Pa. St. 340. 1 Strasburg R. E. Co. v. Echternact, 21 Pa. St. 220; Miller v. Wildcat, etc., Co., 52 Ind. 51; Thrasher v. Pike Co., 25 111. 393; Mt. Sterling, etc., Co. v. Little, 14 Bush. 429; Cal., etc., Co. v. Schafer, 57 Cal. 396; Poughkeepsie Co. V. Griffin, 24 K T. 150; Troy, etc., R. R. Co. v. Tibbits, 18 Barb. 297; Char- lotte R. R. Co. V. Blakeley, 3 Strobh. L. 245; Pittsburgh, etc., Co. v. Gazzan, 32 Pa. St. 340; Wallingford, etc., Co. v. Fox, 12 Vt. 304; Strouse v. Flagg, 72 111. § 299 StTBSCEIPTIONS TO CAPITAL STOCK. 329* at any time before acceptance. Death of one who has made a written offer to subscribe before its acceptance works a revocation.^ § 298. Must have legal validity at time of acceptance. Though an agreement to subscribe for stock in a cor- poration to be formed be legal at the time it is made, if before the corporation comes into existence the contract which would arise from an acceptance of the offer con- tained in the agreement is made illegal by statute, the corporation cannot accept such offer so as to constitute- a binding subscription. Nor does the designation of a trustee to whom payment is to be made, pending the organization of the corporation cure the invalidity of the transaction.2 Nor can an action be maintained on such agreement which, though in its terms is legal, yet cannot be carried out without a violation of law.^ § 399. Agreements to subscribe — An agreement be- tween parties having in view the future formation of a corporation to subscribe for its shares of stock is a species of contract somewhat resembling, and yet dis- tinct from, a contract of membership. The corporation has no recourse upon the parties entering into such an agreement, and the latter do not become members unless they carry out their mutual 397; Gaff v. Winchester College, 6 Bush, 443; Perkins v. Union, etc., Co., 12 Allen, 273; Dayton, etc., Co. v. Eoy, 13 O. St. 84. The bringing of a suit by the corporation to collect a subscription ; Buffalo, etc., R. K. Co. v. Clark, 22 Hun, 359, and the receipt of installments for the stock; Bell's App., 115 Pa. 88; 8 Atl. Rep. 177, have been held sufficient. But the corporation can defeat a subscriber's action for stock by proving that it never accepted his subscription,. Starrett v. Rock Island & V. R. R. Co. , 65 Me. 374. 1 Wallace v. Townsend, 43 O. St. 547; 3 N. E. 601. 2 Knox v. Childersburg Land Co., 86 Ala. 180; 5 So. 578. 3 Mercer Co. v. P. & E. R. R. Co., 27 Pa. St. 389; Thrasher v. Pike Co. R. E. Co., 25 111. 393. 330 SUBSCRIPTIONS TO CAPITAL STOCK. § 300 agreement by having the certificates of stock or other indicia of membership issued to them.^ § 300. Mutual agreements before incorporation. — Agree- ments among themselves by parties who expect to sub- scribe for stock in a company when organized cannot be specifically enforced.^ But it seems that an agreement by one person with others who contemplate becoming the incorporators of a company to take stock in such corporation, and pay for it, is a valid contract of sub- scription, and is enforceable by the corporation after it -comes into being.3 The promisors in such case might 1 Mt. Sterling Coal Eoad Co. v. Little, 14 Bush (Ky.), ^25; Lake Ontario Shore R. R. Co. v. Curtiss, 80 N. Y. 219; Thrasher v. Pike County R. R. Co., 25 111. 393; Strasburg R. R. Co. v. Echternact, 21 Pa. St. 220. But see Twin ■Creek, etc., Road Co. v. Lancaster, 79 Ky. 3.52; Quick v. Lemon, 105 111. 578. Where complainants alleged that they and certain other persons agreed to organize a corporation; that afterwards they organized a mining company, adopted by-laws and elected ofBcers; that at a regular meeting of said corpora- tion it was agreetl that the capital stock should be divided among the different members thereof, complainants to receive a certain number of shares; that, sub- sequently, complainants were induced to resign from the board of directors in order to let in other investors, they being promised that their interests should remain the same; that thereafter they were excluded from the meetings and denied all knowledge of the affairs of the corporation; and that a new distribu- tion of stock was made, the original distribution being disregarded and the ishares of stock which had been allotted to complainants were allotted to others, it was held that all these allegations did not show any contract of subscription binding upon the corporation as such, and it could not be made a party defendant to an action to compel the issue of the shares of stock originally allotted to them or for damages in case such shares could not be issued, Summerlin v. Fronte- riza S. M. & M. Co. U. S. Cir. Ct. W. D. Tex. 1890; 7 Ry. & Corp. L. J. 451. See also Joslin v. Stokes, 88 N. J. Eq. 31 ; Parsons v. Howard, 2 Woods, 1. 2 Lake Ontario Shore R. R. Co. v. Curtiss, 80 N. Y. 219; Strasburg R. Co. v. Echternacht, 21 Pa. St. 220; Mt. Sterling Coal Road Co. v. Little, 14 Bush, 429; Cal. Sugar Mfg. Co. v. Schafer, 57 Cal. 396; Poughkeepsie & S. P. PI. C. Co. v. Griffin, 24 N. Y. 150; Charlotte & S. C. R. Co. v. Blakely, 3 Strobh. L. 245 ; Pitts- burg, etc., S. R. Co. V. Gazzan, 32 Pa. St. 340; Wallingford Mfg. Co. v. Pox, 12 Vt. 304; Chase v. Sycamore & R. R. Co., 38 111. 215; Sewall v. Eastern R. Co., 9 Bush. 5; Stowe v. Flagg, 72 III. 397; Gaff v. Winchester College, 6 Bush. 443; Perkins v. Union B. H. & E. Mach. Co., 12 Allen, 273; Carlisle v. Saginaw Valley & St. L. R. Co., 27 Mich. 315; Dayton W. V. & Turnp. Co. v. Coy, 13 O. St. 34. ' See Penobscot R. R. Co. v. Dummer, 40 Me. 172; Cross v. Pinckneyville Mill Co., 17 111. 54; Griswold v. Peoria University, 26 111.41; Stone v. Great Western J 300 SUBSCRIPTIONS TO CAPITAL STOCK. 331 sue in their own names as designated agents or trustees of an express trust.^ But this case differs from that of mutual agreements between parties to make donations to a corporation to be thereafter formed. The latter case falls within the definition of a " contract made between two or more parties for the benefit of a third." Accordingly it is held that the corporation when formed can sue for and recover the promised donations.'^ Oil Co., 41 111. 85; Heaston v. Cin. & Ft. W. R. Co., 16 Ind. 275; Buffalo & J. R. Co. V. Gifford, 87 N. T. 294; Peninsular R. Co. v. Duncan, 28 Mich. 130; Kirksey v. Florida & G. PI. Road Co., 7 Fla. 23; Selma & T. R. Co. v. Tipton, 5 Ala. 787; Hartford & N". H. R. Co. v. Kennedy, 12 Conn. 499; Thigpen v. Miss. Cent. R. Co., 32 Miss. 347; Gill v. Ky. & C. G. & S. Min. Co., 7 Bush. 635; CucuUa v. Union Ins. Co. 2 Rob. La. 573; Nulton v. Clayton, 54 la. 425; Robinson v. Edinboro Academy, 3 Grant's Cas. 107; Chater v. S. F. Sugar Ref. Co., 19Ral. 219; Klein v. Alton &S. R. Co., 13111. 514; Sawyer v. Upton, 91 IT. S. 56; Weiss V. Maunch Chunk Iron Co., 58 P. St. 295. A contract of subscription to the capital stock of a corporation to be formed, reading: " We, the sub- scribers hereto . . . agree to pay the above amount " of the capital stock, and "for a faithful and full performance of our respective parts of the above ■contract we bind ourselves," followed by the name of each subscriber, with the amount of his subscription, is several, and a subscriber may be sued severally :by the other party to the contract, who agreed to erect the building— a creamery — for the proposed corporation. Gibbons v. Grinsel (Wis.), 48 N. W. 255. In another case defendant and others had agreed to organize a hotel company with a capital of $100,000, and that a meeting of stockholders should be called to organize the corporation and elect directors whenever $70,000 should, be sub- scribed. One of a firm of general agents of a railroad company subscribed in the company's name, without authority, " for the amount of freight on furni- ture and material" shipped from certain ports, $10,000. He also subscribed in his own name a certain block "for a site for a hotel, if accepted and used for that purpose, $7,500, and in that case, cash $5,000." When $77,200 was sub- scribed, a meeting was had, and the agent voted those shares. It was held that since the agent's personal subscription was conditional, and the other unau- thorized, the shares were illegally voted, and an independent subscriber, who did not take part in the organization, was not liable for his subscription, though the railroad and steamship company afterwards ratified the agent's subscrip- tions. California Southern Hotel Co. v. Russell (Cal.), 26 P. 105. 1 Infra, § 303. 2 Edinboro Academy, 3 Grant's Cas. 107; Ashuelot Boat, etc., Co. v. Holt, 56 N. H. 548; Griswold v. Peoria University, 26 111.41; Reformed Prof. Dutch Church V. Brown, 17 How. Pt. 287; Hutchins v. Smith, 46 Barb. 235; Eastern Plank Road Co. v. Vaughan, 14 N. T. 546; Ives v. Sterling, 6 Mete. (Mass.), 310; Thompson v. Page, 1 Mete. (Mass.) 565. 332 SUBSCRIPTIONS TO CAPITAL STOCK. § 303 § 301. Measure of liability wanting. — But in case of an agreement to subscribe for shares in a future corpora- tion there is no means of determining what benefits, if* any, accrue to the corporation from such agreement; and that question cannot be determined without a com- plete performance of the undertaking. It is a mere common-law agreement, the validity and enforceability of which depends upon principles applicable alike to all executory contracts. It has been seriously doubted whether a corporation afterwards formed in pursuance of such agreements could sue for damages arising from their breach.^ § 302. Difficult of enforcement where no agent is desig- nated. — ^In agreements entered into, prior to the organ- ization of the corporation, unless an agent is by the same instrument constituted to receive the amounts subscribed, it is always difficult to ascertain the prom- isee, in whose name alone suit can be brought.^ § 303. But a designated agent may sue. — Where in the contract to take stock in a corporation to be formed au agent is designated as payee, he may sue in his own name on the agreement. He is thereby constituted the trustee of an express trust within the meaning of the statute.^ 1 Troy & Boston E. E. Co. v. Tibbits, 18 Barb. 297; Erie, etc., E. E. Co. v. Owen, 32 Barb. 016; Dorris v. Sweeney, 64 Barb. 639; Athol Music Hall Co. v. Carey, 116 Mass. 473; ^sbuelot Boot, etc., Co. v. Holt, 56 N". H. 548; Penobscot R. E. Co. V. Dummer, 40 Me. 172; Cross v. Pinckneyville Mill Co., 17 111. 54; Haskell v. Sells, 14 Mo. App. 91. Contra, Buffalo & J. E. E. Co. v. G-ifford, 87 N. T. 294, 299. 2 This difBculty was pointed out in the case of Athol Music Hall Co. v. Carey, 116 Mass. 473. In that case a number of persons had entered into a contract whereby they mutually agreed to form a corporation and contribute a certain amount of capital each. Although the contract was incomplete and not binding per se, yet the passage of an act of the legislature subsequently, by which the company was incorporated, was held to make the subscribers shareholders, and as such liable to pay in the capital which they had agreed to contribute. 8 West V. Crawford, 80 Cal. 20; Troy, etc.. E. E. Co. v. Tibbits, 18 Barb. 297 i § 304 STJBSCRIPTIONS TO CAPITAL STOCK. 333 § 304. Subscriptions taken by promoters A promoter of a proposed corporation who solicits and procures stock subscriptions is an agent for the purpose of re- ceiving the subscriptions ; and a delivery to him to hold until the corporation is formed is, without any further act, a complete delivery, so that it becomes eo instanti & binding contract as between the subscriber s.i An agreement that a corporation shall be formed and that the whole stock shall be issued to one of the promoters is not illegal as against public policy.^ In such cases there is no contract with any corporation ; merely an offer which may be revoked at any time.^ If a party sign his name to the articles opposite a certain number of shares, and the articles be thus filed, it seems the corporation cannot hold him for a greater number upon a written contract made before such filing. Filing the articles containing the subscription for the lesser amount has the legal effect of a rejection of the offer for addi- tional shares.* The introductory clause of articles of association read thus : — " We, the undersigned, agree to take the stock in the amount set opposite our names in a company to Erie, etc., R. E. Co. v. Owen, 32 Barb. 616. Conti^a, Dorris v. Sweeney, 64 Barb. 639. ' 1 Minn. T. M. Co. v. Davis Minn., 40 Minn. 110; 26 Am. &Eng. Corp. Cas. 61. Where the subscription sued on is made before the organization of the corpo- ration, it is necessary to a recovery that the complaint should show that the steps essential to the bringing of the corporation into existence were duly taken. Eichmond St. E. Co. v. Eeed, 83 Ind. 9. 2 King V. Barnes, 109 N. T. 267. See Anderson's Case, 7 Ch. Div. 75; see Christian College v. Hendley, 49 Cal. 347. ' Thompson v. Page, 1 Mete. 565; Ives v. Sterling, 6 Mete. 310; McCauly v. Ballinger, 20 Johns. 89; East. P. Co. v. Vaughan, 20 Barb. 157; P. & S. P. E. Co. V. GrifBn, 21 Barb. 454. « Monterey & S. V. E . Co. v. Hildreth, 53 Cal. 123. In California Sugar Rfg. Co. V. Schafer, 57 Cal. 396, defendant had entered into a contract with others agree- ing to subscribe for a certain amount of capital stock in a corporation to be thereafter organized. The corporation having been formed, sued upon the agreement, and the court decided against its right of recovery. 334 SUBSCRIPTIONS TO CAPITAL STOCK. § 306 be organized for manufacturing and selling the William- son Straw Stacker." Only seven of the eighty-three signers acknowledged the execution of the articles before a notary, and the instrument was duly recorded. It appeared $8,000 of stock was subscribed, and that the company was duly organized and a board of direct- ors elected. It was held that only those who acknowl- edged the articles as required by statute became liable as members.^ § 305. The corporation has no common-law remedy.— Where, after mutual agreements to form a corporation and contribute capital have been entered into by parties, a corporation is formed by others than them- selves, it cannot sue directly on the amounts promised as a debt in the absence of a statutory provision giving a right of action to one for whose benefit a contract is made by two or more others. For these reasons courts of equity, it is sometimes said, will decree specific per- formance in such eases. But it is difficult to discover in such an arrangement any contract to which the cor- poration is a party of which specific performance can be decreed. If not a party for the purpose of suing at law, what standing has it as such in a court of equity for another purpose, which, when carried out, has ex- actly the same result, namely, the compulsory pay- ment of the sums of money specified in the agree- ment ? 2 § 306. Agreements to contribute capital and form a corpor- ation. — Where the agreement among the signers of an instrument is to pay fixed sums for a designated object of common interest, as to build a meeting house without 1 Coppage V. Hutton, 124 Ind. 250; 7 L. K. An. 591. 2 See people's Perry Co. v. Belch, 8 Gray, 310; Goff v. Winchester College, 6- Bush. 445; Bdinboro Academy v. Robinson, 37 Pa. St. 210. § 308 SUBSCRIPTIONS TO CAPITAL STOCK. 335 the formation of a corporation, there is no difficulty in determining the exact terms of the undertaking to which they have bound themselves, and each promise is a con- sideration for the others. But when the undertaking involves the formation of a corporation which is a distinct and independent contract, unless it is described with great minuteness and detail, there is no means of deter- mining from the contract the kind or character of corpor- ation they have agreed to form, or its rights and powers, or the extent of their respective interests in it. So, agreements of the last-mentioned class may be said tO' be unenforceable and practically void. But after the parties have progressed so far with the execution of their agreement as to organize a corporation under it, the corporation immediately becomes a party to it by relation, and may sue for the sums promised. But if the manner of entering into it and the form of contract is prescribed by statute, the specified require- ments must, as we have seen, be substantially complied with.^ § 307. Contracts to purchase shares.— The ordinary con- tract between two parties for the sale and purchase of shares of stook in a corporation differs from a contract of membership; nor is it similar to either of the contracts hereinbefore mentioned. It is not a common-law con- tract and the right to make it, as well as the rules and regulations governing it, is either found in the statute or the corporation's by-laws or partly in both.^ § 308. Agreements made with the corporation.— Some- what resembling an agreement among parties before incorporation to subscribe for shares of stock, but to be distinguished from it, is an agreement made with a cor- 1 Supra, § 283. a Infra, Ch. XIX. ^36 SUBSCEIPTIONS TO CAPITAL STOCK. § 309 poration itself to become a member or to subscribe for its shares at a future date. Courts acting on equitable grounds have in some in- stances held such contracting binding to the extent of justifying a decree of specific performance. It vests an inchoate right of membership in the party agreeing to purchase, which becomes complete on due performance of the contract and compliance with the statute and by- laws by having the proper entries made in the books of the corporation. But such contracts do not of themselves constitute the parties shareholders, and in a suit at law, the corporation cannot recover the amount of the shares as a debt. There can only be a recovery of damages for breach of contract. This might furnish an adequate remedy when the shares have an ascertainable market value ; but in case of a new corporation whose stock has not, or has only to a limited extent, been issued, so as to acquire a market value, the measure of damages would be purely speculative. § 309. Contract of membership defined.— The contract of membership in a corporation is one which of its own. inherent quality and force entitles, the holder to exercise the privileges of membership. It is an agreement entered into between a party competent to contract and a corporation whereby the former assumes in presenti a share of the latter's burdens and stipulates for a share of its benefits proportionate to his interest.^ The con- 1 One who holds a note of a corporation containing the privileges, on certain ' dates and another time, of allowing said holder to exchange the same for one share of stock In the company, is not a stockholder, and has no vested interest in any particular stock; and when the corporation, subsequently, issues more stock before his time of election, and gives to the old stockholders the right of taking three shares of new issue for one of the old, this privilege does not inure to the holder of said note. Pratt v. American Bell Telephone Co., 141 Mass. 225; 5 N. E. 307. § 310 SUBSCRIPTIONS TO CAPITAL STOCK. 337 tract is usually evidenced by a writing, but may be created by parol, and in some instances is implied from circumstances and relations. This principle of member- ship by implication does not conflict with the statutory provision requiring that corporations shall keep sub- scription books. The party by conducting himself as a member estops himself from setting up non-compliance with prescribed formalities and methods, and is bound upon the ground of part performance to the extent of benefits received and assumed interest.^ § 310. Must contain essential parts of a contract. — This exception, however, does not aid writings, which, though purporting to be subscriptions, are fatally defective as contracts or which are rendered invalid for lack of completion or on account of material alteration.^ A party will not be allowed to reduce by parol on the ground of mistake, the amount of stock which a subscription paper shows him to have contracted for, unless he can show that the mistake occurred without 1 See generally Sanger v. Upton, 91 U. S. 56; Wheeler v. Miller, 90 N. T.353; Boston, etc., K. R. Co. v. Wellington, 113 Mass. 79; Ex parte Beasley, 2 Mac. & G. 176; Clark v. Farrington, 11 Wis. 306; Jewell v. Rock Riv., etc., Co., 101 HI. 48, 57; Haynes v. Brown, 36 N. H. 545; Chaffln v. Cummings, 37 Me. 76; Griswold v. Seligman, 72 Mo. 110; Musgrave v. Morrison, 54 Md. 161; Phoenix Warehousing Co. v. Badger, 67 N. Y. 294; Phil., etc., R. R. Co. v. Co well, 28 Pa. St. 329; Cheltenham, etc., R. R. Co. v. Daniel, 2 Q. B. 281; West Cornwall v. Moffatt, 15 Q. B. 521. A director where required by the charter to be a stock- liolder is estopped from denying that he is such at least to the extent of qualify- ing him for the position by assuming and performing the duties of the position. Harwood's Case L. R. 13 Eq. 30; -Stephenson's Case, 45 L. J. (Ch.), 488; In re British & Am. Tel. Co., L. R. 14 Eq. 316; In re Empire Assurance Co., L. R. 6 Ch. 469. 2 As where the party signed Incomplete articles of association. Dutchess, etc., R. R. Co. V. Mabbett, 58 N. T. 397; where the articles were materially altered without consent of all the subscribers after being signed and before complete organization of the company. Burroughs v. Smith, IQ N. Y. 550. Where the names of the directors were left blank in the subscription paper. Consolts. Ins. Co. V. Newhall, 3 Foster & F. 130; where the number of shares was also left blank. See also Eakright t. Logansport, etc., Co., 13 Ind. 404. 22 338 SUBSCRIPTIONS TO CAPITAL STOCK. § 311 negligence on his part ; nor in any case where interests of others would be prejudiced by allowing him to do so.^ But where he signed upon a misunderstanding of the entire scope and meaning of the contract, it will be set aside upon well-known principles,^ § 311. Where law requires stock books to be kept. — But by statutory regulations stock companies are in many states required to keep stock certificate books, showing the names of shareholders and the amount of stock held by each. Where that is the case, it is evident that at least an entry must be made by the party to be charged, in this case the corporation, and that no contract of membership is complete whatever the form of the sub- scription until a certificate of shares be issued, though it may be binding as between the parties. While the certificate is not the contract of membership, it is the best evidence of the extent of the holder's interest and membership ; and the usual and regular manner of con- summating the contract is by the issuance of a certifi- cate. And it has been frequently held that if the charter or general law authorizes books of subscription 1 Diman v. Prov., etc., R. E. Co., 5 R. I. 130. One subscribed to bank stock on condition that at the end of a certain period, if he wished, he could return the stock, and receive back the note he had given in payment, and which contained the same stipulation. It was held that the stockholders, not having been misled, were boimd by the contract. Jones v. Johnson, 86 Ky. 530; 6 S. W. 582. But where it is alleged by a stockholder that the stock held by him has been cancelled, but no resolution or minute was adopted by the; directors, and no record thereof made, and where it is further shown that the stockholder has continued to act as an officer after such alleged cancellation, is to be determined by the court, whose finding is conclusive. Topeka Mfg. Co. v. Hale, 39 Eans. 23; 17 P. 691. 2 Jackson v. Haynor, 12 Johns. 469; Throughgood's Case, 2 Eep. 9; Poster v. Mackinnon, L. R, 4 C. P. 704; Rackford, etc., R. R. Co. v. Schumick, 65 111. 223. The admissions of a defendant are sufficient prima facie evidence that he became a shareholder. Dows v. Napier, 91 111. 44. The authenticity of subscriptions may be established by proof that calls made upon the subscribers have been paid. Union Hotel Co. v. Hersee, 79 N. Y. 454, 460. § 312 SUBSCEIPTIONS TO CAPITAL STOCK. 339 for capital stock to be opened, parol contracts of sub- scription are invalid.^ § 312. Issuance of certificate not essential. — The failure to issue a certificate is not a valid defence to an action on the subseription.2 This has often been held where the interests of creditors were involved. One who has become the owner of shares in a corporation is liable to creditors for the amount of unpaid capital due to the corporation without having had the certificates issued to him by the corporation.^ The certificate only constitutes proof of property which may exist without * it. When the corporation has agreed that a person shall be entitled to a certain number of shares in its capital, to be paid for in a manner agreed upon, and the person has agreed to take and pay for them accordingly, he becomes their owner by a valid contract made upon a valuable consideration.* But in order to maintain an action on the subscription, the corporation must be in a position to issue the certificate.* And the subscriber has his action on a valid contract of subscription to compel the corporation to issue the certificate to him.* » Vreeland v. N. J. Stone Co., 29 N. J. Eq. 188; Panning v. Ins. Co., 87 Ohio St. 339; Pittsburg, etc., E. K. Co. v. Clarke, 29 Pa. St. 126; Same v. Gazzan, 32 Id. 340. - Burr V. Wilcox, 22 N. Y. 551; Chandler v. Northern Cross R. E. Co., 18 111. 190; Astoria & S. C. E. Co. v. Hill (Or.), 25 P. 379; Millerv. Wildcat G. E. Co., 52 Ind. 51 ; New Albany & S. E. R. Co. v. McCormick, 10 Ind. 499; Slepher v. Earhart, 83 Ind. 173; Paducah, etc., B'k v. Parks, 8 S. W. Eep. 39; 2 Pickle (Tenn.), 554, 842; Heaston v. Gin. & F. W. E. Co., 16 Ind. 275; Kennebec, etc., R. Co. V. Jarvis, 34 Me. 360; Chaffin v. Cummings, 87 Me. 76. 8 Infra, § 561. ' Mitchell V. Beekman, 64 Cal. 118. See also ChafBn v. Cummings, 37 Me. 83; Spear v. Crawford, 14 Wend. 20; The Chester Glass Co. v. Dewey, 16 Mass. 94; In re South Mountain Consolidated Min. Co., 7 Sawy. 30. 6 McCord V. Ohio & Miss. R. R. Co., 13 Ind. 220; Burrows v. Smith, 10 N. Y. .=5.50; .James v. Cin. H. & D. R. R. Co., 2 Disney, 261. 6 Buffalo, etc., R. R Co. v. Dudley, 14 N. Y. 336, 347; Mitchell v. Beekman, 64 Cal. 117. 340 SUBSCRIPTIONS TO CAPITAL STOCK. § 313 § 313. Nor form of contract important. — There is no particular form required in a written contract of mem- bership. It should, however, contain the names of the contracting parties, the amount of interest contracted for, and all the terms and conditions not found in the constating instruments.^ If the charter requires sub- scriptions for stock to be made upon subscription books, the mere signing of a separate agreement to take stock will not support an action by the corporation against the party signing the agreement.^ But where the party whom it is sought to charge as a subscriber has assumed the relation of a stockholder upon such agreement, he cannot set up the irregularity and failure to comply with the legal formality of mak- ing the same in the subscription books. Where a party had paid $1,000 which was applied as capital stock of a bank, receiving at the time a certificate reciting that upon the payment of the balance he should be entitled to 100 shares of stock, of the par value of $100 each, and afterwards denied his liability as a subscriber and sought to recover back the $1,000, he was held liable to the bank and its creditors as a stockholder, notwith- standing a provision in the statute under which the corporation was organized, that " no certificates repre- senting shares of stock shall be issued nor shall such stock be considered as acquired until the whole sum of money which such certificate purports to represent shall be paid into the corporation." * Substantial com- pliance with statutory requirements is suflficient.* > Nulton V. Clayton, 54 Da. 425; Ashtabula, etc., R. R. Co. v. Smith, 15 Ohio St. 328; Bates v. St. Western Tel. Co. (111.), 25 N. E. 521. 2 Charlotte E. E. Co. v. Blakeley, 3 Strobh. S. Cas. 245. » Ross V. B'k of Gold Hill, 20 Nev. 191; 26 Am. & Eng. Cas. 54, n. * Cayaga L. R. Co. v. Kyle, 64 N. T. 185; Boston, etc., E. Co. v. Wellington, 113 Mass. 79; Ashtabula, etc., R. R. Co. v. Smith, 15 O. St. 328; Clark v. Con- tinental Imp. Co., 57 Ind. 135; Nulton v. Clayton, 54 la. 524. § 316 SUBSCRIPTIONS TO CAPITAL STOCK. 341 Subscriptions need not necessarily be made in the subscription books authorized to be opened. Subscrip- tions taken on a sheet of paper which was afterwards placed in the record book of the company and the names of the subscribers, and the amount subscribed by them entered in the book by commissioners appointed to open books of subscription constitute a sufficient compliance with the statute in such case.' § 314. Neither party can withdraw — After there has been a binding subscription, neither party can withdraw from the obligation, and the subscriber can compel a delivery to him of the evidence of his membership — the certificate — ^by the corporation, while the latter may compel payment for the shares and treat the subscriber as a shareholder subject to assessments to meet the corporate liabilities.^ § 315. Membership in benevolent etc, societies. — In the case of incorporated, benevolent and friendly societies the contract of membership consists in its charter, con- stitution and by-laws, and a member becomes such by signing his name. In mutual, beneficial and co-operative associations, a certificate of membership to subsist so long as the recipient complies with the by-laws, rules and regula- tions is the usual form.^ § 316. Collateral parol agreement not binding. — In stock corporations, a subscription usually precedes issuance of the certificate which constitutes one a member. ' Woodruff V. McDonald, 33 Ark. 97. The subscription may be put in form from disconnected memoranda by a person authorized by the subscribers to act in their behalf for that purpose. Iowa, etc., R. E. Co. t. Perkins, 28 Iowa, 281. 2 Spear v. Crawford, 14 Wend. 20; Beecher v. Dillsburg, etc., v. R. R. Co., 76 Pa. St. 306; Marsh v. Borroughs, 1 Woods, 463; Busey v. Hooper, 35 Md. 15; Cass. V. Pittsburg, etc., R. R. Co., 80 Pa. St. 31. ' See next chapter. 342 SUBSCEIPTIONS TO CAPITAL STOCK. § 318 The term subscription implies a writing and cannot be proven by parol until the absence of the subscription paper has been accounted forr^ Nor can any parol agreement or condition made before or contemporaneous with the subscription be set up to vary its terms.^ But parol evidence explanatory of the situation of the parties and subject matter and of alterations and erasures in the subscription paper is admissible. The erasure or alteration of a subscription does not per se prevent a suit upon it. Explanatory parol evidence is admissible.^ § 317. General rales governing contracts. — ^Written con- tracts of membership as evidence and as foundations for legal proceedings, are governed by the saine rules as other contracts in writing. Whatever formalities are required by the charter or general law under which a corporation has been formed on the subject of becoming a member must be complied with. Neither party is bound by a subscrip- tion which substantially varies from statutory require- ments.* § 318. Informalities may be waived — AH informalities 1 Vreeland v. N. J. Stone Co., 29 X. J. Eq. 188, 191; Pittsburg, etc., R. R, Co. V. Clarke, 29 Pa. St. 146, 152; Pittsburg, etc., R. R. Co. v. Gazzam, 32 Pa- st. 340. ' 2 Fairfield County Tp. Co. v. Thorp, 13 Conn. 173; McCIure v. People's Freight Ey. Co., 90 Pa. St. 271; Wight v. Shelby R. R. Co., 16 B. Monr. 4; Piscataqua Ferry Co. v. Jones, 39 N. H. 491; Miss., etc., R. R. Co. v. Cross, 20 Ark. 443; Conn, etc., R. R. Co. v. Bailey, 4 Yt. 465; New Albany R. R. Co. v. Fields, 10 Ind. 187; Meth. Epis. Church v. Town, 49 Vt. 29; Evansville, etc., R. R. Co. V. Posey, 23 Ind. 363; Roche v! Roanoke Seminary, 56 Ind. 198; Eak- right V. Logansport, etc, R. R. Co., 13 Ind. 404, 407; Haskell v. Sells, 14 Mo. App. 91; ISTorth Carolina R. R. Co., v. Leach, 4 Jones (Law.), 340; Smith v. Tallahasse, etc., Plankroad Co., 30 Ala. 650; Ridgefield, etc., R. R. v. Brush, 43 Conn. 98; Thigpen v. Miss. Cent. R. R. Co., 32 Miss. 347; White Hall, etc., R. R. Co. V. Myers, 16 Abb. Pr. N. S. 34; Noble v. Callender, 20 O. St. 199. ' Greer v. Chartiers Ry. Co., 96 Pa. St. 391; Johnson v. Wabash, etc., Plank- road Co., 16 Ind. 389; Sodus Bay., etc., R. R. Co. v. Hamlin, 24 Hun, 390. * West V. Crawford, 80 Cal. 20; Monterey, etc., R. R. Co. v. Hildreth, 53 Cal. 123. ^ 318 SXJBSCKIPTIONS TO CAPITAL STOCK. 343 in the contract of subscription are waived by acceptance of the stock certificate except a total absence of authority on the part of the corporation to issue it,^ A convenient test of the question whether one is liable as a stockholder is the position in which the contract in question has placed the corporation. If it is bound by its terms to receive the papty as a member for purposes of voting or enjoying other privileges of mem- bership, it is a valid subscription.^ The objection that the whole capital stock has not been subscribed may be waived like other conditions. Such waiver may be either express or implied ; it may consist either in acts or declarations of the subscriber .3 Acting as director, 1 Hamilton, etc., Plank-road Co. v. Eice, 7 Barb. 157; A subscription made in a blank book and afterwards accepted by the corporation but not transferred to its regular subscription books was held valid. Brownlee v. Ohio, etc., R. R. Co., 18 Ind. 68. So when at the town meeting the objects of the meetiag and the nature of the corporate enterprises having been made known nxunerous persons wrote their names and the amotmts for which they were willing to subscribe on slips of paper which were afterwards transcribed by the company into a book of the company, it was held that this book became the original contract of subscription. Iowa & Minn. R. E. Co. v. Perkins, 28 Iowa, 281; Stuart v. Valley R. R. Co., 32 (Jratt. 146. A similar effect was given to a book made up of loose sheets of paper on which parties had written their subscriptions. Woodruff v. McDonald, 33 Ark. 99. 2 Parker v. Northern Cent. R. R. Co., 33 Mich. 23; Korthem Cent. Mich. R. R. Co. V. Eslow, 40 Id. 222. See University of Des Moines v. Livingston, 57 la. 307; Tarrett v. Eockland Ins. Co., 65 Me. 374. 3 Emmett v. Springfield, J. & P. R. R. Co., 31 O. St. 23; Hager v. Cleveland, 36 Md. 476. International Fair Exp. Assn. v. Walker, (Mich.) 47 N. W. 338. The articles of association provide that the " capital stock of said corporation shall be |50,000, of which $14,50O has been subscribed, * * * and the residue may be issued and disposed of as the board of directors may from time to time order and direct." The company had begun business before defendant sub- scribed for his stock. Held, that the implied condition that no subscriptions were to be paid until the whole capital stock, was subscribed could not arise, and defendant was bound to pay his subscription when called upon for it by the directors. Arkadelphia Cotton-Mills v. Trimble (Ark.), 15 S. W. 776. The expenditure of money in the erection of the building to be used by a pro- posed corporation by the parties to whom the subscription to the capital stock run is a sufficient consideration to support the promise of the subscribers. Gib- bons V. Grinsel (Wis.), 48 N. W. 255. 344 STJBSCBIPTIONS TO CAPITAL STOCK. § 319' attending meetings and encouraging the contracting of corporate debts, paying assessments with full knowl- edge of all the facts ; ^ acting as president of the corporation ; ^ participating in the affairs and manage- ment ^ have been held suflScient evidence of waiver. But equivocal acts capable of other import than that the regularities and defects in the organization are not to be taken advantage of will not deprive him of the benefits of these defenses.* § 319. Subscriptions in escrow. — There is a difference between a subscription and a contract of subscription placed in escrow. The latter is in no sense a subscrip- tion until a second delivery. It may, moreover, be itself either absolute or conditional, and its second delivery is nearly always contingent upon the performance of a condition without which it does not take effect. The fact that the delivery is made to an agent of the corporation engaged in taking subscriptions ^ does not take away the 1 Morrison v. Dorsey, 48 Md. 461. The depositors of a savings bank agreed to incorporate it as a bank of capital. Books were opened for subscription of stock, depositors being given the preference, and funds in the bank were accepted in. payment. A large amount of stock was taken, and the money paid in, and the persons subscribing, without waiting for all the stocl^ to be taken, organized and began business. The subscription to the stock was unconditional. The bank was forced to suspend, and on liquidation dividends were paid on deposits, ex- cluding those whose deposits were applied on stock. It was held that such stock- holders were estopped to say that their subscriptions were conditional on the whole amount of the stock being taken, and they could not claim any rights as depositors. Dallemand v. Odd Fellows, etc., Bank, 74 Cal. 598; 16 P. 497. 2 Corwith V. Culver, 69 111. 502. s Sharpley v. Louth & E. R. Ey. Co., L. R. 2 Div. 66-3; Butler v. Aspinwall, 33 Fed. Rep. 217. * See Pltchford v. Davis, 5 Mees. & W. 2; Wontner v. Sharp, 4 C. B. 404; Bean v. Am. L. & Tr. Co. (N. T.), 26 N. E. 11; New H. Cent. E. R. Co. v. Johnson, .30 N. H. 390; Livesey v. OmahaHotelCo.,5Neb. 50; Oldtown & L. R. R. Co. V. Veazie, 39 Me. 571; Memphis Br. R. R. Co. v. Sullivan, 57 Ga. 240; Atlantic Cotton Mills v. Abbott, 63 Mass. 423; May v. Memphis, Br. R. R. Co., 48 Ga. 109; Temple v. Lemon, 112 111. 51; 1 N. E. 268. 6 Cass V. Pittsburg, etc, R.R. Co., SOPa. St. 31; or to a director; Ottawa, etc., R. R. Co. V. Hall, 1 Bradw. 612. § 320 STJBSCEIPTIONS TO CAPITAL STOCK. 34&' true character of the delivery and render it a delivery to the corporation. But it is otherwise if the delivery be to a commissioner.^ The delivery in escrow has the same effect as a like delivery of a deed to real estate. Without the performance of the condition no estate passes in the one case and there is no subscription in .the other. A delivery without performance of the condition is void and ineifectual.^ § 320. Conditional subscriptions. — Contracts to take effect upon condition are not subscriptions but merely offers to become shareholders, which become subscrip- tions when accepted by the corporation by a performance of. the condition.^ Where the time for the performance of a condition is limited and there is not a performance within the limited time by the corporation, the other party is released from his proposition.* Such conditions in order to shield a party from, liability as a shareholder must be such the performance of which is not contrary to the terms of the charter or provisions of the general law or against public policy.^ A contemporaneous promise by the corporation which, if carried out, would necessitate an ultra vires act is J Wright V. Shelby R. R. Co., 16 B. Monr. 4; and it has been held that com- missioners acting under statutory authority to take subscriptions to a railroad company could take no other than unconditional subscriptions. Pittsburg, etc., R. R. Co. V. Bigger, 34 Pa. St. 455. 2 The condition and its non-performance may be shown by parol as where the party made an agreement with the agent at the time of signing a blank that his ■ subscription should not be binding until he should have an opportunity of see- ing and approving the heading of the subscription. Bucher v. Dillsburg, etc., R. E. Co., 76 Pa. St. 306. « Ashtabula, etc., R. R. Co. v. Smith, 15 O. St. 328. * Ticonic Water Power Co. v. Lang, 63 Me. 480. See Penobscot, etc., R. R. Co. V. Dunn, 39 Id. 589; Penobscot R. R. Co. v. White, 41 Id. 512. 6 See Butternuts, etc., Turnp. Co. v. North, 1 Hill, 518; Fort Edward, etc., P. R. Co. V. North, 15 N. Y. 346 SUBSCBIPTIONS TO CAPITAL STOCK. § 322 not valid, is not a condition, and is no defense to an action for the price of the shares.^ § 321. Conditions in mnnicipal subscriptions. — Subscrip- tions by cities, towns and counties in aid of railroads, canals and other enterprises of a public nature are frequently made subject to a condition. The due per- , formance of such conditions are as binding upon the company to which they are made, as when inserted in the contract of a private individual.^ The non-perfor- mance of a condition precedent which it is legal to insert, is a good defence to an action on the subscription as in other cases, ^ and the same general principle applies that substantial compliance is suflScient.* § 333. Power of corporate officers to insert conditions. — While the contract is not self executing and does not take effect until executed by the proper oflBcer or represent- ative of the municipality,^ yet as to such terms as have not been definitely fixed in the statute authorizing the submission, the agent has a certain degree of discretion » Johnson v. Crawford, F. K. & Ft. W. R. Co., 11 Ind. 280; Peters v. Lin- coln, & K. W. R. Co., 14 Fed. Rep. 319; Baile v. Calvert College Ed. Soc, 4!r Md. 117. 2 Portland, etc., R. R. Co. v. Inhabitants of Hartford, 58 Me. 23; Brocaw v. Gibson Co.,_ 73 Ind. 543; Ifoesen v. Port Washington, 37 Wis. 168; Perkins v. Port Washington, 37 Id. 177; Red Rock v. Henry, 106 U. S. 596; Atchison, etc., R. R. Co. V. Phillips, Co., 25 Kan. 261; Compare Memphis, etc., R. R. Co. v. Thompson, 24 Kan. 170; Shurtleff v. Wiscasset, 74 Me. 130 ' As that a railroad shall run through or be located in a county or city. State V. Hancock County, 11 O. St. 183; Oregon v. Jennings, 119 U. S. 74; Chicago, etc., R. R. Co. v. Marseilles, 84 HI. 145;- Mellen v. Town of Lansing, 19 Blatch. 512; Bucksport, etc., R. R. Co. v. Brewer, 67 Me. 295. * As where the road was completed within the time except a,bout one mile of the distance and the train of the company for that distance ran over the track of another road. People v. Holden, 82 111. 93. See also Hadgman v. St. Paul, etc., R. Co. 23 Minn. 153, where it was held that the completion of the road did not depend upon the building of a bridge across a stream, other provision for crossing it being made. See also Concord v. Portsmouth, etc., 92 U. S. 625; R. R. Co. V. Falconer, 103 U. S. 821. ' Wadsworth v. St. Croix Co., 4 F. 378. Cumberland, etc., R. R. Co. v. Bar- § 324 SUBSCBIPTIONS TO CAPITAL STOCK. 347 in fixing them.i But the corporate or county author- ities cannot change the absolute terms of a proposition after it has been voted upon, or insert additional con- ditions, or resubmit with new conditions.^ § 323. When taken by commissioners — Statutes some- times provide for the opening of books by commissioners for the purpose of receiving subscriptions to the capital stock of corporations. Such commissioners have no other powers than those given them in the act and must give all eq^ual opportunities for subscribing ; nor can they themselves obtain any priority over others.^ Where the commissioners have a discretion and it has been honestly exercised, no one has any legal cause for complaint ;* and slight irregularities in their proceedings will be disregarded.* The authority and functions of commissioners cease upon the organization of the cor- poration; and they are superseded by its constituted authorities.^ § 324. Conditions implied in subscriptions before incor- poration — Under the class of conditional subscriptions properly fall all subscriptions made to the capital stock of a corporation before its formation, the implied con- Ten Co., 10 Bush (Ky.), 604; Bates Co. v. Winters, 97 U. S. 83; B'd of Commrs. V. Gottingham, 17 N. E. Kep. 855. 1 As in time and manner of payment. Syracuse, etc., v. Seneca, etc., 86 N. Y. 317. In Winter v. City Council, etc., 65 Ala. 403, it was held that where a maximum amount for which bonds might be issued was fixed by the vote, the corporate officers might issue them for a less amount. 2 Madison County Ct. v. Richmond, etc., K. R. Co., 80 Ky. 16. Falconer v. Buffalo, etc., R. R. Co., 69 N. T. 491. See also Carroll v. Smith, lllU. S. 556. ' Walker v. Devereux, 4 Paige, 229; Brower v. Pass. Ry. Co., 3 Phil. 161. * Saugatuck, etc., Co. v. Westport, 39 Conn. 337, 348. ' As a failure to take the statutory oath; Hallmau v. Williamsport, etc., Co., 9 Gill. & J. 462. 8 James v. Cin., etc., R. R. Co. v. Duncan, 28 Mich. 130; Hardenburg v. Farmers', etc., B'k, 3 N. J. Eq. 68; Walkerv. Devereau, 4Paige, 229; Crockerv. Crane, 21 Wend. 211; Wellesburg, etc., Co. v. Hoffman, 9 Md. 559; Smithy. Bangs, 15 111. 399; State y. Lehre, 7 Rich. L. 234. 348 SUBSCRIPTIONS TO CAPITAL STOCK. § 325- dition in all such cases being that a corporation shall be formed, that is, the particular corporation with refer- ence to which and to whose charter or articles of incor- poration the contract is made. When these terms are fulfilled, no further acceptance on the part of the cor- poration is necessary. But in order that such contract shall become binding by virtue of a completion of the process of incorporation under general law, it is neces- sary either that the amount of stock agreed to be taken shall be stated in the articles signed by the party or such reference made to -them in the contract as shows that their provisions were fairly understood.^ § 335. The fixed amount of capital must have been sub- scribed in good faith.— The full capital required to be subscribed before calling for the payment of subscrip- tions must consist of actual unconditional subscriptions. If any part required to constitute the entire amount is either fictitious or subject to conditions precedent no calls or assessments can be collected until the fixed amount is reached in absolute bona fide subscriptions. The amount obtained in order to authorize the collec- tion of assessments must consist of subscriptions by persons at least apparently able to pay their assess- ments.^ But the mere fact that some of the subscrib- ers had proven to be insolvent was held to be no defense to the payment of subscriptions by others in a case where the insolvents had been accepted as subscribers by the agents of the corporation in good faith. ^ But in case of an increase of capital by a corporation under authority in its charter, a subscriber for stock to 1 Supra, § § 299, 300. i" Central Turnpike Co. v. Valentine, 10 Pick. 142. » Ridgefleld, etc., R. E. Co. v. Brush, 43 Conn. 87; Penobscot R. R. Co. v. Dummer,40Me. 172; Penobscot R. R. Co. v. White, 41 Me. 512; Salem Mill Dam Co. v. Ropes, 9 Pick. 187. I 325 SUBSCRIPTIONS TO CAPITAL STOCK. 349 be issued by virtue of the increase may be compelled to pay the subscription price of his shares whether the entire amount of the increase is subscribed for or not. The reason for the distinction between this class of sub- scriptions and those to the original capital is, that the corporation has already begun business and the imme- diate use of the money to be derived from the new sub- scriptions may have been the main inducement for the increase.^ But subscriptions to an increase of capital stock in national banks are governed by the provisions of Rev. Stat. U. S. § 5442, and Act of Congress, May 6, 1886, and where an increase is attempted to be made without obtaining the consent of two -thirds Of the stock, the payment in full of the amount, of such in- crease, and the certificate and approval of the comp- troller of the currency, as required by those statutes, the proceedings are invalid, and preliminary subscrip- tions to such increase cannot be enforced. Such a subscription is impliedly conditioned on the subscrip- tion of the whole amount of the proposed increase, and on the compliance by the corporation with all the requirements of the statutes necessary to make the in- crease of stock valid. And in case of non-compliance with such requirements there is a failure of considera- tion.2 1 Clarke v. Thomas, 34 O. St. 46; Nutter v. Lexington, etc., K. R. Co., 6 Gray, 85; See Reed v. Memphis Gayoso Gas Co., 9 Heisk. (Tenn.) 545; Avegne v. Citizens B'k, 40 La. Ann. 799. 2 Winters v. Armstrong, 37 F. 508. To same effect Scheerenberg v. Stephens, 32 Mo. App. 814; Xichols v. Same, Id. 330; and it was held that one who sub- scribes and pays for a specified number of shares of a "proposed increase" of the capital stock of a national bank, which increase is in fact never issued, and to whom the bank officials transfer, instead, old stock of the bank without his knowledge or consent, is not a " shareholder" within the meaning of § 5151, imposing individual liability on the shareholders for the debts of national banks. The fact that the subscriber for the new shares received a dividend on the old shares so transferred to him does not estop him from denying his liability as a shareholder, where such dividend was received in the belief that it was paid to 350 STTBSCEIPTIONS TO CAPITAL STOCK. § 327 § 326. Requirement foanded on justice and public policy. — These rules as to implied conditions in subscriptions have been held inflexible both on the ground of public security and protection of the other subscribers, and cannot be evaded,^ they are founded on a plain dictate of justice and the strict principles regulating the obli- gations of contract.^ § 327. Proof of compliance herein. — It is held that a corporation in suing on the contract must aver that the full capital stock has been subscribed ; ^ and that the corporation has the burden of proving the subscriptions for the full capital stock.* It is well settled that the him by virtue of his subscription to the new stock. Stephens v. FoUett, 43 F. 842. 1 Livesey v. Omaha Hotel, 5 Neb. 50; Rockland Mt., etc., Co. v. Sewall, 78 Me. 167. Peoria & R. I. E. R. Co. v. Preston, 35 la. 118, " Unless a contrary intention appears, expressly or by implication, either in the charter or the con- tract of subscriptions; " Shurtz v. Schoolcraft & T. R. R. Co., 9 Mich. 269; New Tork H. & N. R. R. Co. v. Hunt, 39 Conn. 75; Hale v. Sanborn, 16 Neb. 1; Haskell v. Worthington, 7 S. W. Rep. 481; Halsey, etc., Co. v. Donovan, 57 Mich. 318; Stoneham Br. R. R. Co. v. Gould, 68 Mass. 277. Rev. St., Tex., Art. 585, which confers the general management of a corporation on the directors, and which empowers them to dispose of the unsubscribed capital stock " in such manner as the by-laws may prescribe," does not, in the absence of any by-laws on the subject, authorize the directors to enforce an unaid subscription before the capital stock is all taken. Orynski v. Loustaunan (Tex.), 15 S. W. 674. 2 Bray v. Farwell, 81 N. T. 600, 608. 8 Hain v. North W. G. R. Co., 41 Ind. 196. See also Selma M. E. M. R. R^ Co. V. Anderson, 51 Mass. 829; Hughes v. Antietam Mfg. Co., 34 Md. 318,332; Topeka Bridge Co. v. Cummings, 3 Kan. 55; Allman v. Havana R. & E. R. R. Co., 88 m. 521; Temple v. Lemon, 112 111. 51; Littleton Mfg. Co. v. Parker, 14 N. H. 543; Hendrix v. Academy of Music, 73 Ga. 437; (Jontoocook Valley R. R. Co. V. Barker, 32 N. H. 363; Prop, of N. Bride v. Story, 6 Pick. 45; Belfast & M. L. R. R. Co. V. Cottrell, 66 Me. 185; Rockland, etc., Co. v. Sewall, 14 Atl. Rep. 939; Memphis Br. R. R. Co. v. Sullivan, 57 6a. 240; Fox v. Allens- ville C. S. & V. T. Co., 46 Ind. 31. * Cent. Tump. Co. v. Valentine, 10 Pick. 142; Fry's Exrs. v. Lexington & B. S. B. R. Co., 2 Mete. (Ky.) 314. Compare Monroe v. Fort W. J. & S. R. R. Co., 28 Mich. 272. A. subscribed to certain shares of increased capital stock of a corporation, npon condition that the subscription should not become binding unless the full amount of the increase were subscribed. Among the subscriptions were two by married women, which, of course, were void and were never paid. It was held that. § 328 SUBSCRIPTIONS TO CAPITAL STOCK. 351 records of the corporation, until impeached, are suffi- cient evidence that the full capital stock has been sub- scribed.^ Evidence is admissible, however, to destroy the effect of such records. But the certificate of com- missioners that full subscription has been made cannot be questioned, even though the subscriptions of married women have been counted. ^ § 328. Cases in which the objection does not lie. — Where a subscription is made before incorporation on paper fixing the capital stock, at a given sum which is pro- cured, the failure to secure full subscription as fixed in the charter is no defense.^ This condition like others, may be waived by significant acts of acquiescence.* Part payment is generally a waiver, though it has been held that parties may recover back what they have paid, if the corporation has failed to obtain subscription for the entire capital.^ There is no implied condition that the fall amount shall be obtained where a subscription contains an express promise to pay; ^ but if the corpora- tion is incorporated with a less capital stock than that specified when the subscription was made, the subscriber is not bound by it.' as to one who had not by any act waived this defect, the condition had not been complied with. Appeal of Hahn (Pa.), 7 A. 482. But where part of conditional subscriptions to stock were invalid, but were treated as binding and good by other subscribers, the latter will not be permitted to set up the invalidity of those subscriptions to show that the condition had not been fulfilled. Appeal of Cornell, 114 Pa. 153; 6 A. 258. ' Ridgefleld & N. Y. E. E. Co. v. Brush, 43 Conn. 86; Penobscot E. E. Co. v. Dummer, 40 Me. 172; Same v. White, 41 Me. 512. 2 Harlem Canal Co. v. Seixas, 2 Hall (N. T.) 504; Same v. Spear, 2 Hall, 510; Litchfield B'k v. Church, 29 Conn. 137; Marlborough Br. E. E. Co. v. Arnold,. 9 Gray, 159; Land v. Brainerd, 30 Conn. 565. » Belton, etc., Co. v. Sanders, 70 Tex. 699; 6 S. W. Kep. 134. * Dallemand v. Odd Fellows', etc., B'k, 74 Cal. 598; 16 Pac. Eep. 497. 6 Winters v. Armstrong, 37 Fed. Rep. 508. « Skowegan & A. R. E. Co. v. Kinsman, 77 Me. 370. ' Santa Cruz E. E. Co. v. Schultz, 53 Cal. 106. But see New Castle & A. T. 352 SUBSCKIPTIONS TO CAPITAL STOCK. 5 329 • •' The rule has no application where the charter author- izes the organization and commencement of business after a certain amount of the capital stock has been subscribed, such provision being equivalent to express authority to the corporation to call in the subscription, freed from conditions.^ § 329. When the implied becomes an express condition. — On the contrary, a provision in the subscription itself, that a certain amount of capital stock shall be sub- scribed before payment may be demanded, is generally given legal effect like other expressed conditions, and until it is fully complied with, the subscriber is not liable. And on the same principle, if by the terms of the subscription payment is not to be demanded until a certain amount is subscribed, it is enforce- able when that amount is secured although less than the full capital stock.^ The same rule applies to conditions that sufficient subscription for a corporate ■Co. V. Bell, 8 Blackf. (Ind.) 584; York & G. E. R. Co. v. Pratt, 40 Me. 447; Oregon Cent. R. R. Co. v. Seoggin, 3 Or. 161; Cheraw& C. E. B. Co. v. White, 10 S. C. 155; Chubb v. Upton, 95 U. S. 665, 668. 1 Hale V. Sanborn, 16 Neb. I; Shurtz v. Schoolcraft & T. R. R. Co., 9 Mich. 269; Haskell v. Worthington, 94 Mo. 560; 7 S. W. Rep. 481; New York H. & N. R. R. Co. V. Himt, 39 Conn. 75; Halsey, etc., Co. v. Dondvan, 57 Mich. 318. 2 Hunt V. Kansas & M. B. Co., 11 Kan. 412; Sedalia, Warsaw, etc., Ry. Co. V. Abell, 17 Mo. App. 645; Schenectady & S. P. R. R. Co. v. Thatcher, 11 N. Y. 102; Hamilton & D. P. E. R. Co. v. Rice, 7 Barb. 166; Perkins v. Sanders, 56 Miss. 733; Rensselaer & W. P. R. Co. v. Wetsel, 21 Barb. 56. See also Hoag- land V. Cin. & F. W. E. E. Co., 18 Ind. 452; Penobscot & K. E. R. Co. v. Bart- lett, 12 Gray, 244; Hanover K. & S. R. R. Co. v. Haldeman, 82 Pa. St. 36; Bos- ton B. & G. R. R. Co. V. Wellington, 113 Mass. 79; New Haven & D. R. R. Co. V. Chapman, 38 Conn. 65; Lexington & W. C. R. R. Co. v. Chandler, 54 Mass. 311; Minor v. Mechanics' B'k, 1 Peters, 46; Jewettv. Valley Ry. Co., Hi O. St. 601; 111. E. R. Co. V. Zimmer, 20 111. 654; Williamette F. Co. v. Stannus, 4 Or. 261. Cf. Galveston Hotel Co. v. Balton, 46 Tex. 63.S. Where the court said:— " There were good reasons for organizing the company to be found in the in- creased facility of thereby raising the subscriptions to the amount fixed for the capital stock and of other preliminary preparations for the execution of the work, when the subscription should reach that amount." » Bucksport & B. E. E. Co. v. Buck, 65 Me. 536. See also la. & Minn. R. R, 'Co. V. Perkins, 28 la. 281. § 330 SCTBaCRIPTIONS TO CAPITAL STOCK. 853 purpose shall be secured.^ A subscription to pay " when required " renders the subscription payable before the full capital stock is subscribed.^ § 330. What subscriptions to be counted. — Subscriptions containing a condition precedent should not be counted in determining whether the full capital has been sub- scribed, with a view to enforcing subscriptions.^ The same rule applies to invalid subscriptions/ and to those of married women, where common law disabilities re- main, infants, and persons of unsound mind,^ This objection is not available, however, to the subscriber with knowledge that the subscriptions of married women were counted,^ Ultra vires subscriptions of other corporations are excluded from the estimate ; '^ as are those of insolvents, who were such at the time of subscription.^ If solvent at the time of subscribing, subsequent insolvency is immaterial.^ With respect to subscriptions payable in labor and materials the prevail- ing view is, that where they were made in good faith they should be counted ; since it is often necessary to resort to this method of carrying out corporate enter- prises.^" 1 People's Ferry Co. v. Balch, 74 Mass. 203. 2 Cheraw & C. K. K. Co. v. Garland, 14 S. C. 63. Compare Chases' Pat., etc., Co. V. Boston, etc., Co. (Mass.), 28 N. E. 300 (Sept. 1891). 3 Troy & Gr. R. K. Co. v. Newton, 74 Mass. 596; Oskaloosa Agrl. Works v. Parkhurst, 54 la. 357; Cabot & W. S. B. v. Chapin, 60 Mass. 50; Brand v. Law- renceville, etc., R. R. Co., 77 Ga. 506; 1 S. E. Rep. 255; N. T., etc., K. R. Co. V. Hunt, 39 Conn. 75. ♦ Belfast & M. L. R. R. Co. v. Cottrell, 66 Me. 185. Compare Swartwout v. Mich. Air Line R. R. Co., 24 Mich. 389. » Phillips V. Covington & Cin. Bridge Co., 2 Mete. (Ky.) 219; Appeal of Hahm (Pa.), 7 Atl. Rep. 482. 6 Appeal of Cornell, 114 Pa. St. 153; 6 Atl. Rep. 2.58. ' Berry v. Yates, 24 Barb. 199. 8 Lewey's Island E. R. Co. v. Bolton, 48 Me. 451; Belfast, etc., Ey. Co. v. Inhab. of Brooks, 60 Me. 568. ' Salem M. D. Corporation v. Ropes, 26 Mass. 187. w Phillips V. Covington & Cin. Bridge Co., 2 Mete. (Ky.)219; Penobscot R. E. Co. V. Dummer, 40 Me. 172; Same v. White, 41 Me. 512; Ridgefield & N. T. 354 SUBSCEIPTIONS TO CAPITAL STOCK. § 332 § 331. Express conditions in preliminary subscriptions. — If in addition to these implied conditions there are express conditions in the charter or articles, or other paper containing the terms of the contract to be per- formed either by the corporation or third parties before the subscription takes place prior to performance of these must be shown in order that the formation of the corporation amounts to a binding acceptance of the offer.i Still the subscriber cannot withdraw after ac- ceptance of the offer by the corporation subject to the conditions until the latter has had reasonable time and opportunity to perform the condition and convert it into a complete obligation.^ But unreasonable delay will release the subscriber. All such offers may be retracted and recalled if acceptance or performance is unreason- ably deferred.^ In such case a notification of with- drawal to the secretary or other officer in ehargie of the subscription list constitutes a withdrawal.* § 333. Conditions and stipulations distinguished. — But a distinction must be kept in view between terms in a contract of subscription which amount to conditions precedent and those which merely bind the corporation to perform acts upon the performance of which the obligation on the part of the subscriber to become a shareholder is not made to depend. K. B. Co. V. Brush, 43 Conn. 86. But in the last case the subscriptions were counted for the reason that the contract for payment in work, being parol, was not allowed to vary the apparently absolute subscription. 1 Ashtabula & New London E. E. Co. v. Smith, 15 O. St. 328; Taggart v. Western Md. E. E. Co., 24 Md. 563; Lowe v. Edgefield & K. E. E. Co., 1 Head. (Tenn.) 659. 2 Junction E. E. Co. v. Eeeve, 15 Ind. 236; Gait's Exrs. v. Swain, 9 Gratt. (Va.) 633; Taggart v. Western Md. E. E. Co., 24 Md. 563-; New Albany & Salem K. R. Co. V. McCormick, 10 Ind. 499; Pittsburg & Connellsville, R. E. Co. v. Stewart, 41 Pa. St. 54; Mansfield & New Lisbon E. E. Co. v. Smith, 15 O. St.. 328. s Taggart v. Western Md. E. E. Co., 24 Md. 563. * Wood's Case, L. E. 15 Eq. 236. § 333 SUBSCRTPTTONS TO CAPITA,!. STOCK. 355 , For instance, where stipulations are embodied con- cerning the application of the money to be paid by the subscriber or of the corporation's capital stock which do not peculiarly affect one shareholder more than others, and all otier stipulations affecting the internal management of the corporate body, where not express- ly made so, are not conditions precedent.^ In subscriptions to the capital stock of railroad cor- porations are often found provisos that unless the com- pany's road is located on a specified route, or a depot built at a certain point the party shall not be bound to make the stipulated payment. Such provisions are con- ditions precedent and due performance must be proven before the company can recover the amount of shares so stipulated for. And it has been held that though notes are given at the time by the party signing such conditional contract of such subscription, a failure of performance may be pleaded by the maker of the notes in a suit by the corporation in bar of recovery .^ § 333, What conditions may be inserted. — After incor- poration the authorities are uniform in holding that parties may make the performance or compliance by the corporation with any legal and possible terms they choose a condition precedent to payment. But as to the effect of conditions in subscriptions made in order to raise the" preliminary capital required by statute or the charter before beginning business, different rules have been established in different states. The weight of authority, however, is to the effect, that none but unconditional subscriptions should be accepted for the purpose. In New York it seems to be the settled rule 1 McGinnis v. Kortkamp, 24 Mo. App. 381; McMillan v. Marysville, etc., R. R. Co., 15 B. Monr. 218. * Parker v. Humas, 19 Ind. 213; Taylor v. Fletcher, 15 Ind. 80. 356 SUBSCEIPTIONS TO CAPiTAL STOCK. § 333 that conditional subscriptions are to be rejected,^ In Pennsylvania, the condition is void and the sub- scription is treated as absolute.^ The views in the federal courts are somewhat conflicting, though the point seems not to have been directly passed upon.^ The practical result of the decisions in both New York and Pennsylvania is that subscriptions taken be- fore incorporation must be absolute, " Any other rule would lead to the procurement from the commonwealth of valuable charters without any absolute capital for their support, and thereby give rise to a system of speculation and fraud which would be intolerable." * To the same effect will be found the decisions in most, if not all, the other states, though an early case holds to the contrary.^ While the right to insert conditions in contracts of subscription after incorporation is every- where recognized the legality and enforceability of conditions must be determined by the policy of the particular state where the contract'is made as affecting all contracts. What would be immoral and illegal or contrary to public policy in one state, might be quite otherwise elsewhere.® 1 Troy & Boston E. R. Co. v. Tlbbits, 18 Barb. 297; In re Eochester, etc., R. R. Co., 50 Hun, 29. 2 Caley v. Phil., etc., R. R. Co., 80 Pa. St. 363; Boyd v. Peach Bottom Ry. Co., 90 Id. 169; Bedford R. R, Co. v. Bowser, 48 Id. 29; Banington v. Pitts- burg & S. E. R. Co., 44 Id. 358; P. & S. R. R. Co. v. Biggar, 34 Md. 455; Same V. Woodnew, 3 Phil. 271. ' See Burke V. Smith, 16 Wall. 390; Putnam v. City of Albany, 4 Biss. 365, 383. * Caley v. Phil., etc., Co. County R. R. Co., supra. 6 Chamberlain v. P. & H. R. R. Co., 15 O. St. 225. 8 The test of the legal effect of such contracts is the extent of the parties which must be determined by a consideration not only of the words of the par- ticular clause but also the language of the whole contract as well as the nature of the act acquired and the subject matter to which it relates. ■ Bucksport & B. R. R. Co. V. Inhab. etc., 67 Me. 295; Chamberlain v. P. & H. E. R. Co., 15 O. St. 225. The familiar exception to the general rule that terms and stipulations intended by the parties to be incorporated in the contract but which were omitted through accident, fraud or mistake, may be orally proven, applies as well to subscriptions § 334 SUBSCRIPTIONS TO CAPITAL STOCK. 357 It is a misnomer to speak of conditions subsequent in contracts of subscription, since the breach of the collateral undertaking does not operate as a rescission of the main contract. They are really covenants, not conditions.^ A requirement that the whole or a speci- fied part of the road shall be constructed on a specified route is not a condition but a collateral undertaking. An important reason for giving them such effect and con- struction, is that the payment of the subscription itself is necessary to carry out the requirement.'' § 334. Undertakings to locate railroads, etc. — In most as to other contracts. Piscataqua Ferry Co. v. Jones, 39 N. H. 491 ; Kennebec & Portland K. R. Co. v. Waters, 34 Me. 369; Cin. N. & Ft. W. E. Co. v. Pearce, 28 Ind. 502; Scarlett v. Academy of Music, 46 Md. 132; Dill. v. Wabash Val. E. Co., 21 111. 91; E. Tenn. & Va. E. R. Co. v. Gammon, 5 Sneed, o67; Corwithv. Culver, 69 111. 502; Jack v. Naber, 15 Ga. 450; Thornburgh v. Newcastle & D. R. Co., 14 Ind. 499; Gelpcke v. Blake, 15 la. 387; Johnson v. Pensacola & Ga. E. E. Co., 9 Fla. 299; Miss. O. & E. E. E. Co. v. Cross, 20 Ark. 443; Eidgefield & N. T. E. R. Co^v. Busch, 43 Conn. 86; Phoenix Warehousing Co. v. Badger, 6 Hun, 293; Whitehall & P. R. Co. v. Myers, 16 Abb. Pr. (N. S.) 34. See Brewer's Fire Ins. Co. v. Burger, 10 Hun, 56; Eighmire v. Taylor, 98 N. Y. 288; Hendrix v. Academy of Music, 73 Ga. 437. Subsequent parol contracts on new considerations were upheld in Pittsburg & Connellsville R. Co v. Stewart 41 Pa. St. 54; Tonica R. Co. v. Stein, 21 111. 96. See also Bucher v. Dillsburg etc., R. R. Co., 79 Pa. St. 306; Brewer's, etc., Ins. Co. v. Burger, 10 Hun, 56- Eighmie v. Taylor, 98 jST. Y. 288. ' ' ' Lane v. Brainerd, 30 Conn. 565 ; H. & K. R. R. Co. v. Leovell, 16 B. Monr. 358. 2 " It is a most extraordinary defense, for it presupposes that the company were to build their road without money and to deliver it a finished work to the stock subscribers who were then to pay their subscriptions." Miller v. P. & C. E. E. Co., 40 Pa. St. 237. See also on this point Swortwout v. Mich. A. R. Co., 24 Mich. 389; McMillan v. M. & L. R. R. Co., 15 B. Monr. 218; B. & B. R. R. Co. V. Inhab., etc., 67 Me. 295; N. Mo. R. R. Co. v. Winkler, 29 Mo. 318; Bel- fast & M. L. Ry. Co. V. Moore, 60 Me. 561; Chamberlain v. C. P. & H. R. Co., 15 O. St. 225. other so-called conditions subsequent not allowed to defeat re- covery on the subscriptions were that "the road goes within half a mile of Florence" P. & S. R. R. Co. v. Biggar, 34 Pa. St. 455; that commissioners should be appointed to see that other conditions are complied with. Shaftner v. Jef- fries, 18 Mo. 512; that the money subscribed should be expended on a certain part of the road. Lane v. Brainerd, 30 Conn. 565 ; that a depot shall be established at a certain place. Paducah, etc., R. R. Co. v. Parks, 2 Pickle (Tenn.), 554; 8S.W. Eep. 842; that bonds will be issued as a bonus to the stockholders. Morrow v. Nashville, etc., Co., 3 Pickle (Tenn.), 262; 10 S. W. 495. 358 SUBSCRIPTIONS TO CAPITAL STOCK. § 334 states it is entirely legal to make a subscription for stock in a railroad or turnpike conditional upon a par- ticular location of the route or of a depot ; and yet in New York public policy is held to forbid such condi- tions and they are accordingly not enforceable.^ Such conditions are upheld in other states.^ The validity of ordinary conditions are generally upheld.^ A condition that part or all of the subscriptions shall be expended on a particular part of a railroad is valid ;* or a condition with reference to the amount of capital to be subscribed may be superadded to that which the law implies ; ^ or upon that which the charter allows to suffice.® The subscriber may reserve the right to approve the location of the route of a railroad before becoming sub- jected to payment ; ' or, except in New York, may make it a condition precedent to liability that it shall be located on a particular route.^ Where the condition is 1 Butternuts, etc., O. Tump. Co. v. North, 1 Hill, 518; Ft. Edward, etc., Co. V. Payne, 15 N. T. 583; M. & B. PI. E. Co. v. Snedicker, 18 Barb. 317. 2 Ashtabula, etc., N. E. K. E. Co. v. Smith, 15 Ohio St. 328; New Albany & Salem E. E. Co. v. McCormick, lOInd. 499; McMillan v. Maysville& L. E. Co., 15 B. Monr. 218; Dayton, etc., E. Co. v. Hatch, 1 Disney, 84. 8 Union Hotel v. Hersee, 79 N. T. 454; Burrows v. Smith, 10 N. T. 550; Morris Canal & Bkg. Co. v. Nathan, 2 Hall, 239. * Milwaukee & Northern 111. E. E. Co. v. Field, 12 Wis. 340; Hanover Junc- tion & Sus. E. E. Co. T. Haldeman, 82 Pa. St. 36. 5 Penobscot & Kenebee E. E.Co. v. Dunn, 39 Me. 587; Phil. & Westchester E. E. Co. V. Hickman, 28 Pa. St. 318; Union Hotel Co. v. Hersee, 79 N. T. 454; Hanover June. & Sus. R. E. Co. v. Haldeman, supra. « Eidgefleld & N. T. E. E. Co. v. Brush; 43 Conn. 86. ' Eobert's Case, 3 De Gex & Sm. 205; afe'd 2 Mac. & Gr. 196; Spartan- burgh, etc., R. E. Co. V. De Graffenseid, 12 Eich. L. 675; Mansfield etc., R. E. Co. V. Brown, 26 O. St. 224; Chamberlain v. Painesville, etc., E. R. Co., 15 O. St. 225; Des Moines, etc., E. E. Co. v. Graff, 27 la. 99; Mansfield, etc., R. R. •Co. V. Stout, 26 O. St. 241; North., etc., E. E. Co. v. Winkler, 29 Mo. 318. 8 Jewett V. Lawrenceburgh, etc., E. E. Co., 10 Ind. 529; Wear v. Jacksonville, etc., R. R. Co., 24 111. 595; Fisher v. Evansville, etc., E. E. Co., 7 Ind. 407; Evansville, etc., E. E. Co. v. Shearer, 10 Ind. 246; Conn. & Passumpsic E. R. Co. V. Baxter, 32 Vt. 805; Cumberland Valley R. E. Co. v. Baab, 9 Watts, 458; Mo. Pac. Ey. Co. v. Taggart, 84 Mo. 264; Taggart v. Western Md. E. E. Co., 42 Md. 563; Eacine Coimty B'k v. Ayers, 12 Wis. 512. Often the advantages of § 336 SUBSCKIPTIONS TO CAPITAL STOCK. 359 illegal or impossible and yet constitutes the main in- ducement to the subscription, the latter is a nullity ; and prior to the performance of an ultra vires condition the subscription is not enforceable.^ § 335. Construction of conditional subscription. — No definite general rule can be laid down for the deter- mination of the question whether the terms of contracts of this nature amount to conditions precedent, or of what constitutes a due performance of the conditions. The decision in each case must depend in a great de- gree, upon its own circumstances, keeping the inten- tion of the parties constantly in view so far as such intention can be gathered from the language employ ed,^ § 336. Performance and avoidance of conditions.— When the terms to be complied with on the part of the cor- poration are decided to be conditions precedent and due performance is alleged, it is sometimes difficult to determine what acts amount to due performance. Gen- erally speaking, a substantial performance satisfies the terms of the contract.^ a particular location are alone sufficient inducement for promises of money and property. These may be enforced after performance of the condition by the cor- poration. Stowellv. Stowell, 45 Mich. 364; First Nat. B'k v. Hendrie, 49 la. 402; Berryman v. Cin. S. Ry. Co., 14 Bush (Ky.) 755. 1 Pellatt's Case, L. R. 2 Ch. 527. 2 See Meyer v. Blair (N. Y.), 4 Ry. &Corp. L. J. 159; Hahm v. Johnson, Cowper, .343; R. R. Co. v. Eastman, 34 ST. H 124; Graff v. R. R. Co., 31 Pa. St. 489; Miller v. R. R. Co., 87 Pa. St. 95; Melvin v. Ins. Co., 80 111. 446. s People V. Holden, 82 111. 93; Springfield St. Ry. Co. v. Sleeper, 121 Mass. 29; O'Neal v. King, 3 Jones' Law (N. C), 517. See also, Virginia, etc., R. R. Co. V. County Commrs., 8 Nev. 68; See Chamberlain v. Painesville & H. R. R. Co., 15 O. St. 225; Johnson v. Ga. Midland & Gulf R. R. Co., 81 Ga. 725; 8 S. E. 531; R. R. Co. v. Parks, 2 Pickle (Tenn.), 554; 8 S. W. Rep. 842; Henderson V. Thompson, 52 Ga. 149; Meyer v. Blair, 109 N. T. 600; 4 Ry. & Corp. L. J. 159. Where the condition is that a given sum shall be raised by subscription it means valid and binding subscriptions, App. of Hahn, 7 Atl. Rep. 482 (Pa.); App. of Cornell, Q Atl. Rep. 114; Pa. 153, 258. It is generally unimportant to the 49ubscriber who performs the condition. Thus it was held that a condition that 360 SUBSCEIPTIONS TO CAPITAL STOCK. § 336- On the other hand a mere technical compliance with the letter of the contract will not be suflScient where it does not satisfy the intention of the parties accord- ing to a fair construction of their language in the sense in which it is used.^ If, after the condition has been a blast furnace should be constructed was complied with by its construction bjr a lessee. App. of Cornell, 6 Atl. Kep. 258. But a condition that a road shall be completed by a company named is not complied with by its completion by a consolidated company so as to enable the latter to enforce it. Toledo, etc., E. R. V. Hinsdale, 45 O. St. 556; 15 N. E. Rep. 665. A condition in the vote of a city granting aid to a railroad, that the money shall not be payable unless the road shall be completed for use within a specified time, is complied with when, the road is built, so as to be in as reasonable fit condition and as safe and con- venient for the public use as new roads usually are in similar localities. Manchester & K. R. E. v. City of Keen, 62 N". H. 81; holding also that an amendment by a clerk of the record by which the time within which a road is required to be completed is shortened, will not be allowed to prejudice the rights of the company with respect to the aid previously adopted by popular vote. Under Comp. Laws, Kan. 1885, c. 84, sec. 68, relating to municipal aid to rail- roads, and providing that townships shall issue no more than $15,000 and 5 per cent on its assessed value for such purpose, a subscription to the amount limited, duly made and accepted by the company, is a contract binding on the township, and, the conditions being performed, the company is entitled to the township- bonds to the exclusion of another road, to whose stock the town has afterwards subscribed, though the latter perform its conditions first. Chicago K. & W. Ry. Co. V. Freeman (Kan.), 16 P. 828. The stockholders of a national bank proposed to surrender its charter and organize as a state bank in another county, and to erect a certain building on a designated lot, provided the citizens of that county would subscribe $30,000 to its capital stock. The defendant and others subscuibed $35,000 by a writing which recited the proposal, and that "we * * * do hereby subscribe the amounts opposite our names to the capital stock of said proposed bank, under the foregoing proposition, and in the following conditions." In a suit by the bank organized under the state law, the petition stated the terms of the subscrip- tion, and that the bank had duly performed all the conditions on its part tr, be performed. It was held that a cause of action was stated. Security State Bank V. Raine (Neb.), 48 N. W. 262. 1 In a note given to a company about to begin the construction of a railroad appeared the following condition: "If said road is not completed by the twenty, fifth day of December, 1866, the cars running to Rushville, this note is null and void." It appeared from the evidence that on the date named cars were run over a tem- porary track laid down for the purpose, and that it was fully four months after- wards before cars were making regular trips to Rushville. It was held that within the meaning of the contract '' the road was not completed and that the cars were not running thereon to Rushville by the twenty- fifth day of December, 1866, and that the note in suit was therefore by its terms null and void." Freeman- § 337 SUBSCRIPTIONS TO CAPITAL STOCK. 361 complied with and payment made, the plans are changed by the company so as to amount to non-performance^ the money so paid may be recovered back.^ § 337. Colorable subscriptions binding.— Where both parties have entered into the contract with an under- standing that it shall be colorable only with the object of inducing others to subscribe, and others have been induced by it to do so, both the fraudulent and subse- quent subscriptions are binding. The parties to the fraudulent subscriptions may be compelled by sub- sequent subscribers to make good the status they have represented by their conduct to exist ; and be- cause of this power on their part, subscribers subse- quent to them are not allowed to set up the fraud toi avoid their own subscriptions.^ tal V. Matlock, 67 Ind. 99. A promise to pay money upon the completion of a railroad described in. tlie contract can only be enforced by tlie promisee upon proof that the railroad named has been completed, and it will not be sufficient to entitle the promisee to a recovery to prove that a railroad has been built, for it must be shown that the raihoad described has been built. Low v. Studebaker, 110 Ind. 57; 10 N. E. 301. 1 Jewett V. Lawrenceburgh & W. M. E. K. Co., 10 Ind. 539. 2 Conn, etc., K. E. Co. v. Bailey, 24 Vt. 465, 476; Jewett Valley Ey. Co., 34 O. St. 60. See also, Downie v. White, 12 Wis. 176; Weatherbee v. Baker, 35 N. J. Eq. 501; Centre & K. Tump. Eoad Co. v. McConahy, 16 Searg. & R. 140; Phoenix Warehousing Co. v. Badger, 6 Hun, 293; afe'd 67 N. Y. 294; Peychaud V. Hood, 23 La. Ann. 732; Cleveland Iron Co. v. Ennor, 116 111. 55; Eobinson- V. Pittsburg, etc., R. Co., 32 Pa. St. 334; Graff v. Pittsburg & S. R. Co., 31 Pa. St. 489; Mann v. Cooke, 20 Conn. 178; Conn. & P. E. Co. v. Bailey, 24 Vt. 465; Davidson's Case, 3 De G. & Sm. 21; Bridger's Case, L. E. 9 Eq. Cas. 74; New Alban'y & S. R. Co. v. Slaughter, 10 Ind. 218; Blodgett v. Morrill, 29 Vt. 509; Minor v. Mech. B'k, 1 Pet. 46; Bates v. Lewis, 3 O. St. 459; Litchfield B'k v.. Church, 29 Conn. 137; Mangles v. Grand Collier Dock Co., 10 Sim. 519; Chou- teau Ins. Co. V. Floyd, 74 Mo. 286. On like principle the following promises on the part of the corporation have been held unavailable as defences; that the sub- scription shall be in fact a pledge of stock by the corporation to the subscriber or that it may be surrendered. Melvin v. Lainor Ins. Co., 80 111. 446; White Mts. R. Co. V. Eastman, 34 N". H. 124; Gill v. Bates, 72 Mo. 424; that the sub- scriber should be entitled to keep his stock on payment of less than its par value; Custer V. Titusville Gas & Water Co., 63 Pa. 381; Un. Mut. L. Ins. Co. v. Frear- stone Mfg. Co., 97 111. 537; for other'similar executory contracts held to be in- valid as defenses, see Piscataqua Ferry Co. v. Jones, 39 N. H. 491 ; Crossman vi 362 STJBSCBIPTIONS TO CAPITAL STOCK. § 338 The rule was applied to a secret agreement between an agent of a company and a subscriber that the amount of stock contracted for should be reduced after the entire subscription had been used to induce others to subscribe.^ § 338. Fictitious subscriptions.— But there is a distinc- tion between subscriptions fraudulently made to induce others and fictitious subscriptions. If by the latter, persons are induced to subscribe, their subscriptions are voidable, for there is a toal absence of the reason for holding them which exists in the former case. And it has been held that they are not bound in cases of colorable subscriptions if the previous subscrip- tions based upon the secret agreement were made by persons unable by reason of insolvency or other cause to carry out their agreements. But this cannot be ad- mitted as a principle. It might be allowed to operate" in exceptional cases, but it would be difficult to avoid carrying it too far in practice. If it applies to a case where there has been a fraudulent secret agreement not binding or admissible in evidence, there is no reason Penrose Ferry Bridge Co., 26 Pa. 69; New Albany & S. E. Co. v. Fields, lOInd. 187; East Tenn. & Va. R. Co. v. Gammon, 5 Sneed (Tenn.), 567; Saffold v. Barnes, 39 Miss. 399; Payson v. Withers, 5 Biss. 269; GofE v. Hawkeye Pump & W. M. Co., 62 la. 691; Corwith v. Culver, 69 111. 502. Where the subscrip- tion was made for the sole purpose of enabling the corporation to obtain % certi- ficate of organization under an agreement with the other subscribers that the subscriber should not be liable on the stock but should hold it as a trustee, he was held liable on his subscription as between himself and the creditors of the corporation. But it was held that he was not liable to an assessment on his stock in a suit by other subscribers brought for the purpose of winding up the concern and paying its debts, especially where their subscriptions are not fully paid. Winstow v. Brooks (111.), 4 L. R. An. 507. See Wilson v. Rivett, 119 111. 379. 1 White Mts. R. R. Co. v. Sastman, 34 N. H. 124. See Whitehall, etc., R. R. Co. V. Myers, 16 Abb. Pr. 34; Buffalo, etc., E. R. Co. v. Dudley, 14 N. Y. 336; Jewett V. Valley R. E. Co., 34 O. St. 601. I 340 SUBSCRIPTIONS TO CAPITAL STOCK. 363 for withholding it in any case where a preceding sub- scriber can be shown to have been insolvent at the time of subscribing. The application of such a rule in practice would render voidable a large proportion of stock subscriptions. § 339. When subscriptions become payable. — Though, as we have shown, a subscription is binding unless re- voked before acceptance from the time it is made, the subscriber cannot be called upon to contribute his share of the capital until the corporation has been actually formed. There, is no completed contract ; and, there- fore, no matured liability until the company has been incorporated and invested by law with authority to carry on business in a corporate capacity.^ § 340. Statutory modiflcations of the common law. — The common law requirement that the whole capital stock shall be subscribed before the corporation shall have the right to make assessments, is in several states mod- ified by statutes.^ The general current of authorities maintains the rule that compliance with such provision is a condition precedent to the right to make calls or assessments, thus harmonizing with the decisions made with respect to the common law rule that subscriptions for the entire capital is a condition precedent. " It would appear unjust as well as a violation of the con- 1 Peoria, etc., R. E. Co. v. Preston, 35 la. 116 ; New Haven Cent. R. R. Co. v. Johnson, 30 N. H. 390; Contocook Valley, R. R. Co. v. Barker, 32 Id. 363; Continental T. Co. v. Valentine, 10 Pick. 142; Mass. Iron Co. v. Hooper, 7 Cush. 183; Hamilton, etc., P. E. Co. v. Rice, 7 Barb. 157; Lewey's Island E. E. Co. V. Bolton, 48 Me. 451 ; Hughes v. Antietam Mfg. Co. , 34 Md. 316. See North Safford Steel, etc., Co. v. Ward, L. E. 3 Exch. 172, supra. 2 In Wisconsin it is provided that until at least one half of itS' capital stock has been subscribed, and at least 20 per cent thereof paid in, "no such corpora- tion shall transact business with any other than its members. It was held that until this statute was complied with, a corporation has no right to make an assessment. Anvil Min. Co. v. Sherman, 74 Wis. 226; 42 N. W. 222. 364 SUBSCEIPTIONS TO CAPITAL STOCK. § 341 tract of subscription to assess the stock of one subscriber for the expenses of the general business of the corporation before it is authorized to do such business, and capable of making fair and equal assessments upon all of its capital stock ; and neither condition is complied with until all of its capital stock has been subscribed." ^ But such condition being as much for the protection of subscribers themselves as of the business community, and being a provision of law entering into and forming part of the contract of subscription, it may be waived and the liability made absolute by any act showing a contrary intention on the part of the subscriber, such as participating in the organization before the required amount has been raised, voting to begin the business for which the corporation is being organized, and the like.2 § 341. The rule in Oregon. — Under the general ii}- corporation laws of Oregon and the construction given to them by the courts, an exceptional rule prevails in that state, and it is there held that whenever a corpora- tion is so organized as to be capable of prosecuting its business, it has power, through its board of directors, to 1 Okton, 3., in Anvil Min. Co. v. Sherman, 74 Wis. 225; 42 K. W. 226. See also, Salem Mill Dam v. Kopes, 6 Pick. 23 ; Stoneham Br. E. Co. v. Gould, 2 Gray, 277; Bridge v. Chapin, 6 Cusli. 50; Eaton v. B'k, 144 Mass. 260; Warwick, R. R Co. V. Cady, HE. I. 131; Haskell v. Worthington, 19 Am. & Eng. Cor. Gas. 275; Banty v. Buckles, 68 Ind. 49; AUman v. Havana, E. & E. E. Co., 88 111. 521 ; Peoria & E. I. R. Co. v. Preston, 35 la. 115; Rockland, etc., Co. v. Sewall, 78 Me. 167, 198. The following are authorities under statutes modifying the common law requirement, and are to the effect that when the statute fixes a leas amount than the whole as that which must be obtained it constitutes a condition pre- cedent to the making of calls or beginning of business; Jewett v. Valley E. Co., 34 O. St. 601; Schenectady & S. P. R. Co. v. Thatcher, 11 K. T. 102; Boston B. & G. R. Co. v. Wellington, 113 Mass. 79; Hanover June. & S. R. Co. v. Haldeman, 82 Pa. St. 36; New Haven & D. E. Co. v. Chapman, 38 Conn. 65. 2 Marshall Foundry Co. v. Killian, 99 N. Car. 501; Belton Compress Co. v. Saunders, 70 Tex. 609. See also, Naugatuck W. Co. v. Nichols, 58 Conn. 403; 20 A. 315. I 342 SXJBSCEIPTIONS TO CAPITAL STOCK. 365 levy assessments ; and that subscriptions to the entire amount of stock is not a condition precedent to general corporate existence unless expressly made so in the articles of incorporation.^ § 342. Construction of special provisions — "Where the charter or articles do not definitely fix the entire amount of the capital stock, but only provide that it shall not be less than a certain sum nor more than a certain other sum, and contain no other provision or direction on the subject, it will be presumed that the intention is that the stockholders or directors shall fix the amount try- vote. In such case no assessments can be levied until the amount is determined,^ nor after it is determined, until the whole amount has been subscribed.^ In any case, however, where a corporation is author- ized by law or its articles to begin the prosecution of its main enterprise before the amount of its capital has been fixed at a certain sum by vote of stockholders or other- wise, such authority also empowers it to make calls upon its shareholders to contribute the requisite capital for that purpose.* The same exception governs where a corporation is authorized by its charter or articles not in conflict with general law to enter into engagements and incur ex- penses before the whole amount of its capital has been 1 Oregon Cent. R. E. Co. v. Scroggin, 3 Or. 161; Willamette Freighting Co. V. Stamus, 4 Id. 261. A proviso in sec. 6 of the Oregon act in relation to private corporations, makes it lawful for such corporations to proceed to elect directors after one-half of the capital stock has been subscribed. Missc. Laws Ch. 7; Astoria & S. C. R. Co. v. Hill (Or.), 25 P. 379. 2 Somerset R. R. Co. v. Clarke, 61 Me. 384; Somerset, etc., E. R. Co. v. Gush- ing, 45 Me. 524. See White Mts. R. R. Co. v. Eastman, 34 N. H. 124. ' Reed v. Memphis GayosoGas. Co., 9 Heisk. Tenn. 545, 551; Littleton Mfg. Co. T. Parker, 14 N. H. 543; Cabot, etc., Bridge Co. v. Chapin, 6 Cush. 50; Contocook Valley R. E. Co. v. Barker, 32 N. H. 363. * Penobscot, etc., R. R. Co. v. Bartlett, 12 Gray, 244; Nichols v. Burlington, etc., R. Co., 4 Greene (Id.) 42; Bucksport, etc., E. E. Co. v. Buck, 65 Me. 536. 366 SUBSCRIPTIONS TO CAPITAL STOCK. § 343^ subscribed. In such cases the shareholders will be- liable to pay calls made for that purpose but not for any other purpose.'' § 343. Extent of liability to pay assessments. — So long as the statute and articles are pursued there is no doubt of the right of a corporation to make calls and levy assessments to the full amount of the subscriptions whatever the purpose for which the subscribed capital is needed, provided such purpose be authorized by the shareholders. But whether assessments can be col- lected to pay indebtedness of the corporation beyond the subscribed capital stock, depends upon the statutory provisions of the particular state where the question arisen. It is clear that at common law, there was no liability incurred by the contract of subscription, be- yond the par value of the stock subscribed ; nor did the common law provide any remedy by forfeiture against the delinquent shareholder. To authorize a sale of the stock, even for that purpose, statutory author- ity is necessary.^ It is well settled by the great pre- ponderance of authority both in this country and in England, that a stockholder cannot be assessed above the par value of his stock. The mere act of creating a corporation implies a limited liability.* The liability of the stockholder being purely ex contractu extends no further than the undertaking to contribute capital con- 1 Central Turnp. Co. v. Valentine, 10 Pick. 142; Salem Mill Dam Co. v. Ropes, 6 Pick. 23, 43. 2 But see Santa Cruz R. R. Co. v. Spreckles, 65 Cal. 193; Sullivan v. Triunfo, Min. Co., 39 Cal. 465, holding that assessments could be made and collected be- yond the par value of the stock. But in that state it may be considered as still an interesting, if not a leading question. In the latest case first cited above the- decision was by a bare majority, and seems to be overborne by the able dissent- ing opinion of Thornton, while McKinstry, J., concurred with the majority on another ground expressing no opinion on the present question. ' Oliver v. Liverpool, etc., Ins. Co., 100 Mass. 531, 539. § 343 SUBSCRIPTIONS TO CAPITAL STOCK. 367 tained in his subscription. ^ It is held in California 2- that the directors may assess stockholders beyond the par value of the stock to pay indebtedness of the cor- poration. But it would seem, according to often recog- nized rules of construction, that the legislature having expressly defined the extent and nature of the personal liability of stockholders and directors in such case, and provided ample and specific means for its enforcement, that it is not only unnecessary but contrary to the maxim expressio unis alterior excludit to superadd by construction power to make further exactions, and con- fer a power upon corporate managers by implication from the language of statutes intended to place limita- tions on the exercise of powers by them. The power, if possessed, is much more likely to be perverted and employed coUusively, to confiscate the property of the shareholder, from motives of self-interest than to be exercised fairly in the interest of creditors. 1 Great Palls, etc., E. E. Co. v. Copp, 38 N. H. 124; Sta.te v. Morristown Fire' Ass'n, 3 Zab. 195; Morley v. Thayer, 3 Fed. Eep. 737; Chase v. Lord, 77 N. T. 1; Slee v. Bloom, 19 Johns. 453, 473; Show v. Baylan, 16 Ind. 384; Coffin v. Eich, 45 Mass. 511 ; Gray v. Coffin, 68 Mass. 193, 199; French v. Tesche- macher, 24 Oal. 518, 540; Inhab. of Norton v. Hodges, 100 Mass. 241; Oliver v. Liv., etc., Ins. Co., 100 Mass. 531, 539. Personal liability and membership in a corporate body are inconsistent ideas. Liverpool Ins. Co. v. Massachusetts, 10 Wall. 566, 576; New England B'k v. Stockholders, etc., 6 E. I. 188; Walker V. Lewis, 49 Tex. 123; Green v. Beckman, 59 Cal. 545; Jones v. Jaman, 34 Ark. 823; Windham Prov. Inst. v. Sprague, 43 Vt. 502; Woods v. Hicks, 7 Lea. (Tenn.), 40; Terry v. Little, 101 U. S. 216; Smith v. Huckabee, 53 Ala. 191 ; Spense V. Iowa Valley Constr. Co., 36 la. 407; Salt Lake City Nat. B'k v. Hendricksey, 40 N. J. L. Eep. 52; Van Sandon v. Moore, 1 Euss. Ch. 392, 408; Atwood V. E. I. Agr. B'k, 1 E. I. 876. But where stockholders have voluntarily assessed themselves and paid the assessments, a debt is not thereby created against the corporation for which an action will lie. Bid well v. Pittsburg, etc., E. E. Co., 114 Pa. 535; 6 Atl. Rep. 729; Leavitt v. Oxford, etc., Co., 3 Utah, 265; 1 P. 356. The law is the same in England and in the " Companies Act " Cavaugh'sLaw of Money Securities, 2d. Ed. 494; Lion, etc., Ins. Co. v. Tucker, L. E. 12 Q. B. D. 176; In re Norwich Ins. Soc, L. R. 13 Ch. D. 693; In re City, etc., B'k, L. E. 4 App. Gas. 337 to 632; City, etc , B'k v. Houldsworth, L. R. 5 App. Cas. 317. 2 See R. E. Qo. v. Spreckles, 65 Cal. 193; Sullivan v. Min. Co., 39 CaL 465. 368 SUBSCEIPTIONS TO CAPITAL STOCK. § 345 § 344. Time and mode of payment. — Unless it be so expressed in the contract of subscription, part payment at the time of subscribing is not necessary to its valid- ity. And even where by its terms or by the terms of the articles or general law, it is required, a party who does not make the part payment at the time of sub- scribing whose payment is afterwards accepted by the corporation, can claim his rights as a stockholder. Although it may have been agreed between the stockholders, that payment of the stock should not be enforced but should be paid by the dividends, if valid, and not contrary to public policy, still the contract can- not be set up to defeat the collection of a note given by a stockholder thereafter, for the amount of his stock. The giving of such note amounts to a rescission of any such agreement.^ § 345, In what subscriptions to be paid, — In the absence of a provision in the by-laws or in the contract of sub- scription to the contrary, subscriptions like other promises for a sum certain are payable in cash only. And a payment by a check on a solvent bank by a solvent and responsible drawer does not satisfy the terms of a statute requiring cash payment.^ But un- less expressly required by statute to be paid in cash a provision in the constating instruments allowing pay- ments otherwise will be valid. And where there is no express provision how or in what stock subscriptions shall be paid, the directors having general power to prescribe the manner of pay- ment may direct the character of payment to be ac- cepted and may accept labor materials or promissory 1 McDowell V. Chicago Steel Works, 124 111. 491. See Whittaker v. Grum- mond, 68 Mich. 249; N. O. & G. K. Co. v. Frank, 39 La. Ann. 70T. " 2 People V. Stockton, etc., R. R. Co., 45 Cal. 300. § 345 StTBSCEIPTIONS TO CAPITAL STOCK. 369 notes instead of cash.^ But, under the New York statute allowing certain companies to purchase prop- erty necessary for their business and to issue stock to the amount in value thereof in payment, it is held that such corporations have no power to issue their stock in payment for purchased property at less than par value.^ Under such a subscription a refusal to perform the labor or deliver the materials renders the subscriber liable for the amount subscribed in money.^ Collateral agreements between a corporation and particular subscribers for the payment of subscriptions otherwise than in cash, unless such privilege is accorded alike to all, are fraudulent and void as to the other subscribers, and in all cases as to creditors who have given credit without notice of such special arrange- ments.* 1 Clark V. Farmington, 11 Wis. 306; Eppes v. Miss. & G. & T. K. R. Co., 35 Ala. 33. 2 Reversing 5 N. T. S. 124. Gamble v. Queens County Water Co. (N. T.), 25 N. E. 201. An original issue on credit of stock in a corporation at less than half its par value is in violation of Const. Ala., art 14, sec. 6, which prohibits increase of stock except for money, labor done, or money or property actually received. Perry v. Tuscaloosa Cotton-Seed Oil Mill Co. (Ala. ), 9 So. 217 (April 30, 1891). 3 Haywood, etc., R. R. Co. v. Bryan, 6 Jones (N. C), 82. It was held under a statute requiring a payment of five dollars on each share subscribed and provid- ing that without such payment no subscription should be valid, that the giving ■of a note for the amount was not a compliance with the statute. Boyd v. Peach Bottom R. R. Co., 90 Pa. St. 169. But in another case under a statute provid- ing that upon each share of stock subscribed the subscriber should pay to the commissioners taking the same five dollars, and on non-payment of said install- ment, the subscription should be void, it was held that although the subscriber who had given his note for the amount, could not have been compelled to pay the $5 per share by force of the subscription, yet if he and the other subscribers chose to waive the provisions thus made for their benefit respectively and agreed that upon his giving bond for the amount, it should be taken as cash and be ad- mitted into the company, and he does so, he could be compelled to pay the same. Home Stock Ins. Co. v. Sherwood, 72 Mo. 461, 464; see also Rae v. Russell, 12 Ired. 224; Highland Tump. Co. v. McKean, 11 Johns. 100; Hibernia Tump. €o. V. Henderson, 8 Searg. & R. 219; Wilmarth v. Crawford, 10 Wend. 341. ■• Xoble V. Callender, 20 O. St. 199; Henry v. VeHnilion, etc., R. R. Co., 17 O. St. 187. Where subscribers to the capital stock of a company, upon payment 24 370 SUBSCRIPTIONS TO CAPITAL STOCK. § MG- § 346. Stockholder as plaintiff against corporation. — Except as witness, juror, etc., so far as his dealings may affect third creditors and other shareholders with re- spect to his interest in the corporation, a stockholder holds as independent a relation to the corporation as if such interest did not exist. He may contract with the corporation ; and with respect to his contracts with it, he owes no greater duty than third parties. Consequently, he may pur- chase claims against the corporation 2 and obtain security for his claims to the exclusion of the other creditors.^ While at law he cannot sue the corpora- tion on account of inter se rights,* yet outside of these, his relation constitutes no impediment either at law or in equity.® He has no authority or power as an agent by virtue of his interest.® But at common law, his interest was considered such as to disqualify him from testifying as a witness of one-third of the par value, cause to be issued to themselves shares of fully paid stock, and at the same meeting issue a certain number of shares-to certain per- sons for services alleged to have been rendered by them to the company, without any statement of the amount due for such services, the court will not enforce the issue of such shares, the contract being tainted with fraud. State v. Tim- ken, 48 N. J. L. 87; 2 A. 738. Infra, 541, et seq. - Gordon v. Preston, 1 Watts, 385; Hartford & N. H. R. E. Co. v. Kennedy, 12 Conn. 499, 509; Cent. K. K. Co. v. Claghorn, 1 Speer'sEq. (S. C.) 545, 562. 2 stockholders owing money upon their stock subscriptions have the right to buy and pay for the company's bonds, and either hold them or pass them upon the market. Bergen v. Porpoise Pishing Co., 42 N. J. 397; 8 A. 523. 8 Ely V. Sprague, 1 Clark's Ch. (N. T.), 351; Longley v. Stage Line Co., 23 Me. 39; American B'k v. Baker, 4 Met. (Mass.) 164, 176; Eeichwald v. Com- mercial Hotel Co., 106 111. 439. « Infra, Ch. XXII. 6 Culbertson v. Wabash Nav. Co., 4 McLean, 544; Ex parte Booker, 18 Ark. 338; Bidwell v. Pittsburgh, etc., Co., 114 Pa. St. 535; 6 A. 729; Gifford v. New Jersey, etc., Co., 2 Stock. Ch. 171; Rogers v. Danby Univ. Soc, 19 Vt. 187- Waring v. Cahawba Co., 2 Hay (S. C), 109; Pierce v. Partridge, 44 Mass. 44; Sanborn v. Lefferts, 58 N. T. 179; Barnstead v. Empire Min. Co., 5 Cal. 299- Wasau & Y. Co. V. Plummer, 35 Wis. 274; Dunstan v. Imperial, etc, Co. 3 B. & Ad. 125; Samuel v. Holladay, 1 Woolw. 400, 418. " Morelock v. Westminster Water Co. (Md.), 4 A. 404. § 346 SUBSCKIPTIONS TO CAPITAL STOCK. 371 for the corporation,^ A transfer will qualify him, although the transfer has not been registered.^ A stockholder is disqualified from serving as a juror,* or judge, where the corporation is a party .^ Being re- lated to a stockholder does not disqualify a judge ^' though it seems that it does a juror.'' 1 Porter v. B'k of Rutland, 19 Vt. 410; McAuley v. The York, etc., 6 Gal. 80; Pierce v. Kearney, 5 Hill, 82; Mokelumne Hill, etc., Co. v. Woodbury, 14 Cal. 265; Mitchell V. Beckman, 64 Cal. 117; Compare Church v. Sterling, 16 Conn. 388; Simons V. Vulcan, etc., Co., 01 Pa. St. 202; Washington B'k v. Palmer, 2 Sandf. Sup. Ct. 686; New York, etc., R. E. Co. v. Cook, Id. 7?2. 2 Union B'k v. Owen, 4 Humph. (Tenn.) 338; 111. Ins. Co. v. Marseilles Mfg. Co., 6111. 236; Bell v. HuU, 6 M. & W. 699. ' Del., etc., R. E. Co. v. Irick, 23 N. J. L. 321; Bank of Utioa v. Smalley, 2 Cow. 770; Gilbert v. Manchester Iron Mfg. Co., 11 Wend. 627; State v. Catskill B'k, 18 Wend. 466. * Williams v. Smith, 6 Cow. 166; Plesson v. Savage S. M. Co., 3 Nev. 157; Georgia E. E. Co. v. Hart, 60 Ala. 550; Silver v. Ely, 3 Watts & S. (Pa.) 420; Page V. Contoocook Val. R. R. Co., 21 N. H. 438; Peninsular R. R. Co. v. Howard, 20 Mich. 18. 6 Dinns v. Prop, of Grand Junction Canal, 3 H. L. Gas. 759. See also Cooley on Const. Limit., Sees. 410, 411; Washington Ins. Co. v. Price, 1 Hopk. Ch. (N. T.) 1; Peninsular Ry. Go. v. Howard, 20 Mich. 18; Stuart v. Mechanics' & Far- meis* B'k, 19 Johns. 496, 501. « Searsburgh L. Co. T. Cutter, 6 Yt, 815. » Georgia R. R. Co. v. Hart, 60 Ala. 550. 372 CONTKACTS OF MEMBBKSHIP. § 347 CHAPTER XIV. CONTRACTS OF MEMBERSHIP IN OTHER THAN OAPITAL STOCK CORPORATIONS. § 347. General features of contract. 348. Membership in voluntary associations. 349. Effect of becoming incorporated. 350. Business features in all societies. 351. Scope of the subject. 352. Mutual benefit contracts. 353. Contract where found. 354. Limitation as to beneficiaries. 355. Designation how made. 556. Nature of member's interest. 357. Requisites of valid designation. 358. Failure to designate. 359. Change of beneficiary. 360. Change must be made in pursuance of by-laws. 361. Change cannot be defeated by default of association* 362. Obligations assumed in contract. 363. Personal distinguished from other duties. 364. Assessments. 365. Fees and dues. 366. Liability of members of voluntary associations. 367. Voluntary withdrawal. 368. Effect of withdrawal. 369. Membership in boards of trade, clubs, etc. § 347. General features of contract.— In other than capital stock corporations the terms of the contract are evidenced by the charter or articles, the constitution adopted by the incorporators and all the by-laws in force at the time the constitution is signed by the can- didate for membership. In most incorporated benevo- lent and friendly societies such signature in connection Ti^ith a previous election or acceptance of his offer to § 348 CONTKACTS OF MEMBEKSHIP. 37S become such completes , the contract of membership, and subjects the party to the performance of the duties therein imposed. Often, the objects of the association are co-operative and mutually beneficial in a pecuniary sense ; and in all such cases there is, in addition to the usual obliga- tions, that of making contributions from time to time, with a condition that upon failure to so contribute the contract of membership shall cease. Sometimes the pecuniary contract is entirely independent of the con- tract of membership, and is governed, enforced and terminated by the same principles as other contracts of a similar nature without affecting the party's stand- ing as a member. But usually the two contracts are interdependent, so that the collateral contract for the payment of money cannot be enforced by either party unless the promisee is a member at its maturity. § 348. Membership in voluntary associations. — Whether a non-capital stock association be incorporated or not is unimportant as regards the rights and duties of members to each other. These are determined by the articles of association and by-laws. In both and with like effect each member pledges himself " to obey the laws as a condition of his membership, by an express undertaking in signing the constitution, and his promise to support the constitution and by-laws as a brotherly member. Nor is this pledge executed under the by-laws until he shall have answered on his word of truth that he is acquainted with the constitution and by-laws. The association having the right to make the by-laws for the well-being of the society and the proper regulation of its affairs, the regulation being a reasonable and proper one, contributing to the value of the membership, and the good of the association, and the member having accepted the by-laws in express 374 CONTKACTS OF MEMBERSHIP. § 349 terms in his entry into membership, the by-laws con- stitute a part of the terms of the contract." ^ § 349. Effect of becoming incorporated.— It is only in the legal status toward third parties that differences exist between voluntary and incorporated religious, social, benevolent and mutual benefit societies. With respect to this status or relation the authorities are not harmonious. While in many cases the members of voluntary associations have been held to the duties and liabilities of partners, they have in others, and under different circumstances, been held to occupy other relations and to be exempt from personal liability in the absence of an implied agency authorizing the particular contract upon which the suit was brought.^ Under the liberal provisions of general incorporation laws, a very large proportion of such associations, even those that are strictly social and benevolent, as clubs and churches, have, in this country, incorporated. By doing so the members relieve themselves from liability as partners, though they are frequently made person- ally liable by statute for the corporate indebtedness. Mutual benefit societies, though generally incorpo- rated under the statutes authorizing, the formation of 1 St. Mary's Benev. Soc. v. Burford's Admin., 70 Pa. St. 321. 2 " The language of many authorities (particularly those where the peculiar rules applicable to voluntary associations do not seem to have been brought to the attention of the court) proceeds upon the idea that every organization must be either a corporation or a partnership. Many of the cases in the books have been decided upon this principle : Is this society a corporation ? No. Then it must be a partnership. But this is not the only alternative. There may be a joint or a common tenancy in property — there may be a mutual or reciprocal agency in transactions for a specified purpose — and there may be a well-defined organization of the owners of such property, or the actors in such transactions, or both— an organization even having articles (like a partnership), or having a constitution and by-laws (like the charter and by-laws of a corporation), yet the organization may be in the eye of the law neither a partnership nor a corpora- tion." Ebbinghausen v. Worth Club, 4 Abb. N. C. 300, n. This subject fully ■considered infra, Ch. XXVI. §§ 350, 352 coNTiiACTS of membbeship. 375 social, religious and benevolent societies, are not re- garded as falling within either of those classes. In order that they niay derive corporate existence and power under such statutes it is essential that they have no capital stock and be not organized for profit,^ § 350. Business featnres in all societies—No organi- zation can be held together and conducted, without financial resources of some kind. Even a Sabbath school composed mainly of children must have its revenues. Hence, the making of contributions is nearly always an incident, though not generally a condition, of membership. The non-payment of dues is never a cause of for- feiture or expulsion, unless so provided in the articles or by-laws enacted in pursuance of statutory authority •or special contract. § 351. Scopeofthesubject.— Besides capital stock cor- porations, there may be incorporated in most of the states innumerable forms of aggregated humanity from the purely charitable kindergarten school to the stock board ; and the means of obtaining and losing member- ship in these are also numerous and varied. In a given case, th« peculiar structure of the organization, the •objects, the articles, constitution, by-laws, rules and regulations, and special contracts, if any, must be exam- ined. Nothing less than an encyclopaedia would ade- quately develop and expound -the legal inquiries thus opened up. Only some of the more important bodies, membership in which involves considerable pecuniary interest, will be treated in this place. § 352. Mutual benefit contracts.— A mutual benefit 1 Infra, § 959. 376 CONTEACTS OF MEMBBKSHIP. S 352 certificate is in legal effect a contract of mutual insur- ance , ^ and is governed generally by the same laws. Such contract is of a dual character. It contains: — 1st. In connection with the constitution, by-laws and charter,, the contract of membership. 2nd. The contract of in- demnity or for benefits or both, and to pay assessment.^; In the absence of statutory restrictions, minors are not ineligible to membership in mutual benefit soci- eties. The objection that an infant can avoid his con- tract is not important, as adult members may do the like without incurring any liability. Nor is the ob- jection important that minors could not act as trustees, because of their immaturity of judgment. The same objection would lie against many adult members, yet their lack of intelligence or business experience would be no reason for excluding them from member ship. ^ Such contracts are made by two classes of associa- tions: first, those organized for that purpose solely; second, those organized for fraternal or social purposes which annex the mutual benefit and indemnity feature as an incident. The latter class usually have a secret organization and ritual, have mystic signs and pass-words. There 1 state V. Nichols (la.), 41 N. W. 4 ; Rockland v. Canton, Mass., etc., Soc. (111.), 21 N. E. 794; Endowment & Ben. Ass'n v. State, .35 Kan. 253; 10 P. 372; State V. Farmers' & Mech., etc., Ass'n, 18 Neb. 276; Stamm v. Benefit Ass'n, 65- Mich. 317; State v. Merchants' Exchange, etc., 72 Mo. 146.; Black v. Val., etc., Assn., 52 Ark. 340; 12 S. W. 477; Bolton v. Bolton, 73 Me. 299; Supreme Com- mandery, etc., v. Ainsworth, 71 Ala. 443; Folmer's Appeal, 87 Pa. St. 133; State V. Bankers, etc., 23 Kan. 499; Miner v. Mich. Mut. B'k Ass'n, 63 Mich. 338; 6 West. Eep. 117; 29 N. W. Eep. 852. '^ As a mutual insurance contract, it is defined as "any contract whereby a benefit is to accrue to a party or parties named therein, upon the death of a per- son, which benefit is in any manner conditioned upon persons holding similar contracts." Stat. Mass. 1885, ch. 183, sec. 7; Harding v. Littlehale, 150 Mass. 100; 22 N. E. 703; Laws Cal. 1891. 3 Chicago Mutual Liffe Indemnity Ass'n v. Hunt, 127 111. 257; 20 N. E. 55; 127 111. 257. § 353 CONTRACTS OF MEMBERSHIP. SIT are two kinds of benefits paid : those paid on account of sickness of a member, and those which provide a specified sum to be paid at his death to his widow and the orphans, or to a designated beneficiary. The fraternal orders in this country consist of in- ferior or local bodies and grand lodges, made up 'of delegates as chosen representatives from the former,, but having its own officers and corporate organization^. In collecting assessments and paying benefits, the in- ferior body generally acts as the agent of the grand lodge. In pure and simple benefit societies, there is no tie that brings or binds the members to each other,, except that of pecuniary interest. The members, as> a rule, are widely separated both geographically and socially ; and the continuance of their connection is optional. Consequently, there is little stability or permanency in such associations. But during their connection the members are as much bound by the constating instruments as by the terms of any special contract they may hold, or as are the members of truly fraternal orders which hold stated meetings., S 353. Contracts in benefit society, where found. —Though diflerent views have been expressed both as to the nature of such contracts, and the proper evidence ta establish them, the better view is, that they are to be found not in the constitution and by-laws, nor in the certificate alone, in connection with the application for membership, but in all these considered together. In Van Bibber v. Van Bibber,^ the Supreme Court of 1 82 Ky. 350. The constitution, by-laws, rules, and rogulations of the defend- ant's lodge provided that a resort to the civil courts to recover benefits, before the disputed question v?as submitted to the lodge and taken on appeal in regular order to the sovereign grand lodge, should render any right or claim to any bene- fits null and void. It was held that this restriction could only affect benefits to members of the lodge, and not benefits to which strangers were entitled by virtue' of a contract made in their behalf by a member with the lodge. Strasser v.. Staats, 13 N. T. S. 167. 378 CONTRACTS OF MBMBKRSHIP. § 353 Kentucky says : " The certificate of membership con- stitutes the contract ; but it is to be construed and governed by the company's charter. In fact, it may be said that the charter is a part of the contract ; and if it declares who, in a certain event, shall be the ben- eficiary, the parties cannot alter this legislative direc- tion, because neither the company nor the insured can do anything in violation of it." In a New Hampshire case, it was said : " The charter, by-laws and certificate of membership, taken together, show what was the understanding of the parties."^ The expressions of other courts on the subject are vague and fragmentary.^ The correct general rule is thus expressed : " If the certificate refers to the laws of the order in such a way as to make them a part of it, then, of course, they are to be considered as a part of the contract ; but if the charter is in ■ general terms and simply provides that the society may conduct the business of paying bene- fits to its members, and if the by-laws contain no 1 Eastman v. Prov. M. Relief Ass'n (TT. H.), 20 Cent. L. J. 266; Splawn v. Chew, 60 Tex. 535; Masonic, etc., Ben. Soc. v. Buckhart, 110 Ind. 192; ION. E. 79; 11 N. E. 449. Wlierethe constitution of a stock exchange, under which each member binds himself in respect to the manner of his transaction of busi- ness and of his right to continue In membership, provides that, when one has lost his seat, the proceeds of the sale of such seat may, by force of constitutional provision, be appropriated to his creditors in the exchange, or to any of the cor- porate objects, a member who, by offending against the rules, may have forfeited his seat, has no further interest or title in it or its proceeds ; and, the privileges of membership having only been conferred upon him on condition that all the rights should revert to the exchange oil the happening of certain events, he, having assented to the rules, cannot complain of them as against public policy, nor can his assignee. Belton v. Hatch, 109 N. Y. 593; 17 N'. E. 225. 2 In the by-laws, Dolan v. Court of Good Samaritan, 128 Mass. 437; Charter and by-laws, Hellenberg v. Dist. I. O. O. B., 94 N. T. 580; Schuuck v. Gregen- zeiter, etc., 44 Wis. 375. " The contract is contained in the certificates." Wor- ley v. N. W. Masonic Aid Ass'n, 10 F. 228. See also Presbyterian, etc., Fund V. Allen, 106 Ind. 593; 7 N. E. 317; Bauer v. Sampson Lodge, 102 Ind. 262; 1 N. E. 571; Sup. Commandery, etc., v. Ainsworth, 71 Ala. 44S; Elkhart M. Aid Ass'n V. Houghton, 98 Ind. 149; Supreme Lodge v. Schmidt, 98 Ind. 374. § 354 CONTRACTS OF MEMBEESHIP. 379 restrictions or limitations, then the whole of the con- tract would be in the certificate. The conclusion, from an examination of all the cases, is that the contract is found in the certificate, if one is issued, but is to be construed and governed by the chatter and by-laws of the society, and the statutes of the state of the domi- cile of the corporation." ^ § 354. Limitations as to beneficiaries. — A leading dif- ference between mutual benefit certificates and ordi- nary contracts of indemnity or insurance, in addition to the effect of the holder's membership relation, con- sists in the fact that limitations upon the power to designate and restrictions upon the classes who may be beneficiaries are inserted in charters or in the gen- eral laws of most of the states. The charter or general law authorizing such associa- tion usually prescribes who may become members of the company, and their obligations, and who shall be the beneficiaries of the membership after the death of the member, and it is not in the power of the company or of the member, or of both, to alter the rights of those Bacon, Ben. Soc. & L. Ins., sec. 162. See also Grand Lodge A.O. U. W. V. Child, 20 Mich. 163; 14 West. Rep. 454; 38 N. W. Eep. 1; Supreme Lodge Knights of Pythias v. Schmidt, 98 Ind. 374; Wendt v. Iowa Legion of Honor, 72 la. 682; 3-1 K. W. Kep. 470; Holland v. Taylor, 111 Ind. 121; 12 N. E.,Eep. 116; 9 West. Kep. 606; Supreme Lodge Knights of Honor v. Johnson, 78 Ind. 110; Bichmond v. Johnson, 28 Minn. 447; 10 N. 596; Eoyal Templars of Tem- perance V. Curd, 111 111. 286; Supreme Commandery, etc. v. Ainsworth, 71 Ala. 437; Miner V. Mich. Mut. Ben. Ass'n, 63 Mich. -338; 29 N. W. Eep. 852; 6 West. Eep. 117; Mitchell v. Lycoming, etc., Ins.' Co., 51 Pa. St. 402; Mulroy v. Knights of Honor, 28 Mo. App. 463; National Ben. Ass'n v. Bowman, 110 Ind. 355; 11 N. E. 316; Maryland Mut. Ben. Ass'n v. Clendinen, 44 Md. 429; Bur- bank V. Eockingham Ins. Co., 24 N. H. 550; 57 Am. Dec. 300; Masonic Relief Ass'n V. McAuley, 2 Mackey, 70; Simeral v. Dubuque, etc., Ins. Co., 18 la. 319; Susquehanna, etc., Ins. Co. v. Perrine, 7 W. & S. 348; Grand Lodge, etc., v. Eisner, 26 Mo. App. 109; McMurray v. Supreme Lodge, etc., 20 Fed. Eep. 107; Skillings v. Mass. Benev. Assn., 146 Mass. 217; 15 N. E. 566; excluding a creditor; Britton v. Supr. Council (N. Y.), 18 A. 675. 880 CONTIIACTS OP MEMBERSHIP. § 354 who are thus declared to be the beneficiaries, except in the mode and to the extent therein indicated.^ 1 Kentucky, etc., Ins. Co. v. Miller's Adnii'., 13 Bush. 489. A divorced wife- is entitled to no share of a benefit fund, which by the rules of the association goes to the member's heirs, no beneficiary having been appointed by him. Schon- field V. Turner, 75 Tex. 324; 12 S. W. 626. Under Acts Mass. 1882, c. 195. sec. 2, which provides that mutual benefit societies may make their certificates pay- able to the "widows, orphans, or other relatives of deceased members, or any persons, dependent upon deceased members," a certificate may be made payable to a member's fiancee, who is supported partly by her own labor and partly by money paid her by such member, though he is under no legal obligation to make- such payments. McCarthy v. New England Order of Protection (Mass.), 26 N. E. 866. Where it is provided by statute that the beneficiary fund shall not be liable to be seized, taken, or appropriated by any legal or equitable process, to pay any debt of such deceased member, it was held that a member has no prop- erty interest in the beneficiary fund, and a designation of a beneficiary to receive the money and pay the member's debts is invalid. Ke versing, 7 N. Y. S. 5; Boasberg v. Cronan, 9 N. T. S. 664. Adults are not orphan children within the meaning of a regulation that " should there be no widow, then the said amount shall be paid to the lodge of which the deceased was a member, for the use or bene- fit of his orphan children, in equal shares. In case there should be no widow, child, or children, or designa,ted person or object, the amount shall be paid to his executor or administrator." See Kiley v. Eiley, 75 Wis. 464; 44 K. W. 112 j Hannigan v. Ingraham, 55 Hun, 257; 8 N". Y. S. 232; Walter v. Odd Fellows* Mut. Ben. Soc. (Walter v. Hensell), 42 Minn. 204; 44 N. W. 67; Keener v. Grand Lodge A. O. U. W., 38 Mo. App. 543, holding that a mistress or concu- bine does not come within the scope of a provision that the benefit shall issue to the benefit of " the families, widows, orphans or other dependents " of deceased members; Keener v. Grand Lodge A. O. U. W., 38 Mo. App. 543; Murray v. Strang, 28 111. App. 608; Young Men's Mut. Life Ass'n v. Harrison, 23 Weekly Law Bulletin, 360, holding that a member's mother comes within the terms "families or heirs" as befneflciary; Arthars v. Baird, 3 Pa. Co. Ct. Rep. 67, 71, as to marriage of member after naming his mother as beneficiary. In Am. Leg. Hon. v. Perry, 140 Mass. 589; 5 N. E. 634, the court say:—" The statute vmder which the plaintiff corporation is organjzed gives it authority to provide for the widow, orphans or other persons dependent upon deceased members, and further provides that such fund shall not be liable to attachment. The classes of persons to be benefited are designated, and the corpoi'ation has no authority to create a fund for other persons than of the classes named." See also Elsey v. Odd Pel- lows, etc., Ass'n, 142 Mass. 224; 7 N. E. 844; Leonard v. American Ins. Co., 9T Ind. 305; Presbyterjan, etc.. Fund v. Allen, 106 Ind. 593; 7 N. E. 317; Knights of Honor v. Nairn (Mich.), 26 N. W. Rep. 826; National, etc., Ass'n v. Gonse'r, 43 Ohio St.i 1; Benef. Soc. v. Dugre, 11 R. L. (Queb.) 344; State v. People's M. Ben. Ass'n, 42 Ohio SJt. 579. But an appointment of the administrator as bene- ficiary in a certificate of membership is not inconsistent with the declared ob- ject of defendant association " to secure to dependent and loved ones assistance and relief at the death of a member." Eastman v. Provident Mut. Eel. Ass'n (N. H.); 18 A. 745. See also Marsh v. Supreme Council A. L. pf Honor, M» Mass. 512; 21 N. E. 1070. § 354 CONTEACTS OF MEMBERSHIP. 381 But in the absence of restrictions in the charter or statute any person may be constituted the beneficiary of a member.^ But the rules of construction of the powers of benefit societies and their members in the matter of designating beneficiaries as declared by the courts are not uniform, and an unwarranted liberality has, in some of the cases, been indulged.^ But generally a strict construction is given to the power to designate beneficiaries ; and a designation beyond the prescribed class held ineffective.^ 1 Eckertv. Mut. Rel. Soc, 2 N. T. S. 612; Milner v. Bowman, 119 Ind. 448; Massey et al. v. Mutual Relief, etc., Soc, 102 N. T. 523; 7 N. E. 619; Mitchell V. Grand Lodge, etc., 70 la. 30; N. W. Rep. 863; Swift v. Railway, etc., Ass' n, 96 111. 309. 2 In Maneely v. Knights, of Birmingham, 115 Pa. 305; 7 Cent. Rep. 633; 9 Atl. Rep. 41, one of the purposes of the charter of the association issuing the certificate was " the maintenance of a society for the purpose of benefiting and -aiding the widows and orph9,ns of the deceased members." The court in con- struing this provision said: — "While it is true that the general purpose of the corporation is there stated to be the maintenance of a society for benefiting and aiding widows and orphans of deceased members, it must be observed -that this is only the statement of a general purpose. It is only the recital of an object sought to be accomplished, and which doubtless is accomplished in the great majority of cases, even though in exceptional cases the benefits may, by special ■contract, be paid to the other persons than the widows or orphans." See also Massey v. Mutual Relief, etc., Soc, 102 N. Y. 523; 7 N. E. 619; Mitchell v. Grand Lodge, etc., 70 la. 360; 30 N. W. 865; Swift v. Railway, etc., Ass'n, 96 111. 309; Bloomington Mut., etc., Ass'n v. Blue, 120 111. 127; 11 N. E. 331; Mut. Ben., etc., Assn. v. Hoyt, 46 Mich. 473; Lamont v. Grand Lodge, etc., 51 Fed. Rep. 177. An old friend of a member of a benevolent society, who has lived with him for years, and is physically disabled, is not a member of his family, so as to be able to take the benefits of a benevolent insurance policy, payable only to such a member. Knights of Honor v. Nairn, 26 N. W. 826; 60 Mich. 44. See also Lyon v., Rolf e, 76 Mich. 146; 42 N. W. 1094, holding that the assignment of a policy by a member of complainant to a brother of the assignor's wife, having no insurable interest in the life of the assignor, was void. 8 Bacon, Ben. Soc. & Life Ins. Co., 244; Knights of Honor v. Nairn, 60 Mich. 44; 26 N. W. 826; American Legion of Honor v. Perry, 140 Mass. 580; 5 N. E. 634; 1 N. Eng. Rep. 715; Ballou v. Gile, etc., 50 Wis. 614; Knights of Honor v. Nairn, 60 Mich. 44; 26 N. W. 816; Elsey v. Odd Fellows, etc., 142 Mass. 224; 2N. Eng. Rep. 667; 7 N. E. 844; Daniels v. Pratt, 143 Mass. 216; ION. E. 166; 3 N. Eng. 480; National Mut. Aid, etc., v. Gonser, 43 Ohio St. 1; 1 West. <582 CONTRACTS OF MEMBERSHIP. § 355- § 355. Designation, how made — The principal object of benefit societies, and hence the object of becoming members therein, is the payment of relief , and death benefits. Relief benefits are payable to the member himself, in case of sickness or disability, while a speci- fied sum, as the death benefit, is usually agreed to be paid by the association to* a beneficiary named in the Rep. 4; 1 N. E. 11; State v. People's Mut. B.en. Ass'n, 42 Ohio St. 579; State T. Moore, 38 Ohio St. 7; State v. Standard Life Ass'n, 38 Ohio St. 281; Knights of Honor v. Nairn, 60 Mich. 44; 26 N. W. Rep. 826; Ky. Masonic Mut. L. Ins. Co. V. Miller's Admr., 13 Bush. 489; Van Bihber's Admr. v. VanBibber,82 Ky, 347; Duval v. Goodson, 79 Ky. 224; Masonic Mut. Rel. Ass'n v. McAuley, 2 Mackey, 70; Worley v. N. W. Masonic Aid Ass'n, 10 F. 227; Expressmen's, etc., V. Lewis, 9 Mo. App. 412; Presby. Ass'n Fund v. Allen, 106 Ind. 593; 7 N. E. 317; 4 West. Rep. 712; Deitrich et al. v. Madison Rel. Ass'n, 42 Wis. 79; Highlandv. Highland, 109111. 366; Addison v. N. E. Com. Trav. Ass'n, 144 Mass, 591 ; 4 N. Eng. Rep. 639 ; 12 N. E. Rep. 407 ; Skilling v. Mass. Ben. Ass' n, 146 Mass. 217; 15 K. E. Rep. 566; 5 N. Eng. Rep. 718; Rice v. New England M. A. Soc, 146 Mass. 248; 5 N. Eng. Rep. 813; 15 N. E. Rep. 624; Daniels v. Pratt, 143 Mass. 221; 10 N. E. 166; 3 N. Eng. Rep. 480; National Mut. Aid Ass'n v. Gonser, 43 Ohio St. 1 : 1 West. Rep. 4; 1 N. E. 11-.. In Daniels v. Pratt, supra, the deceased had designated as his beneficiary "my estate," whereas the law under which the association was organized authorized such organizations ta provide for a benefit for the family widow, relations, orphans or other depend- ents of deceased members. The court held that the designation was invalid and said: — " If it were a part of his estate it would be assets for a payment of debts and expenses of administration, and would be subject to an unrestricted disposi- tion by will. But this is inconsistent with the statutes, and so beyond the powers of the parties." In National Mut. Aid Ass'n v. Gonser, supra, under a similar statute the court held invalid the designation made by the deceased. In Knights of Honor v. Nairn, 60 Mich. 44; 26 N. W. 826, the court say:— "It appears that under a Kentucky charter, and under the constitution as it stood prior to 1884, the benefits could be made payable to his family, or as the mem- ber should direct. This, apparently, would have made Nairn a competent beneficiary, if we can regard these constitutions as controlling 'the contract. But this benefit is payable by a corporation of the state of Mo., and the laws of that state very clearly and expressly forbid corporations of this sort from pay- ing benefits to any but the member's family or dependents. This prohibition is further strengthened by some future provisions making it unlawful to issue ' policies of life insurance, or for the benefit of the members themselves in any shape. The restrictions imposed by the laws of Missouri cannot be abrogated or changed by the corporation, and it cannot subject itself to any outside control which will override the laws of its organization as a corporate body. The intent of the prohibition is clearly to shut out all persons who are not actual relatives, or standing in the place of relatives in some permanent or in some actual dependence on the members." § 355 CONTBACTS OF MEMBERSHIP. 383 certificate; and in case no one is named, it is sometimes provided in the by-laws that it should go to his widow, orphan children or next of kin. Sometimes it is pro- vided that in case no designation be made by the member during his life, the fund shall revert to the society. Whatever provisions on the subject are contained in the constitution and by-laws are binding upon the members as part of the contract, especially if referred to therein. Of these the member is conclu- sively presumed to have taken notice and consented when he became a member.^ A more liberal view prevailed in the following cases :— Maneely v. Knights of Birmingham, 115 Pa. St. 305; 9 Atl. Eep. 41; 7 Cent. Kep. 633; Falmer's App., 87 Pa. St. 135; Lamont v. Grand Lodge la. Leg. of Hon., 31 F. 17T; Sup. Lodge Knights of Hon. v. Martin et al. (Pa.), 12 Ins. L. J. 628; Bloomington Mut. L. Ins. Ass'n v. Blue, 120 111. 121; 11 N. E. 331; 8 West. Kep. 642; Lamont v. Hotelmen's Association, 30 F. 817; Lamont v. Grand Lodge la. Leg., of Hon., 31 F. 177. The reasoning of these cases is thus ably advanced in Maneely v. Knights, etc., supra: — " While it is true that the general purpose of the corpora- tion is there stated to be the maintenance of a society for benefiting and aiding widows and orphants of deceased members, it must be observed that this is only the statemi^nt of a general purpose. It is only the recital of an object sought to be accomplished, and which doubtless is accomplished in the great majority of cases, even though in exceptional cases the benefits may, by special contract, be paid to other persons than the widows and orphans. There is no prohibitory or restrictive language excluding from the powers of the corporation the right to contract specially with the members for the payment of benefits to other persons than his widow or orphants, nor is such a contract to be held void by reason of any necessary implication from the language of the charter, for the widows and orphans may be much benefited and in many ways by a contract designating another beneficiary, as, for instance, if the member in his lifetime, desiring to establish a home for his wife and children which they might hold after his death, borrowed money for that purpose and so used it to secure the loan, desig- nated the lender as a beneficiary of his membership. Certainly his widow and orphans would be most materially benefited by such an arrangement, or if hav- ing a home he met "with disaster and was about to lose it by judicial sale and should save it by a similar provision, his widow and orphans would be benefited thereby." Mr. Bacon makes the following comment on this case: — "It must be noted, however, as to this case, that, by the language of the charter, the ob- ject of the corporation was not to pay to the widows and orphans, etc., but /or the purpose of-benefiting and aiding the widows and orphans, etc. Other cases tend to support this liberal view, though none go so far." 1 Hellenberg v. District No. 1., etc., 94 N. Y. 580; Hamberstein v. Parsons, 29 Mo. App. 509; Maryland Mut. B. Ass'n v. Clendinen, 44 Md. 429; Arthur et al. V. Odd Fellows' Ben. Ass'n, 29 O. St. 557; Rel. Ass'n v. McAuley, 2 Mac- 384 CONTRACTS OF MEMBBESHIP. § 356 § 356. Nature of member's interesL — While all the duties of membership imposed in this dual contract are obligatory upon the member and upon no one else, yet he has under the contract no property interest in the death benefit but simply the power to designate some one to receive it.i Tiey, 10; Barton v. Prov. Eel. Ass'n, 63 N. H. 535; 3 A. 627; Richmond v. John- son, 28 Minn. 447; 10 IS". E. 596; Greeno v. Greeno, 23 Hun, 478; Masonic Mut. Ben. Soc. v. Burkhart, 110 Ind. 189; 10 K E. 79; 7 West. Kep. 527; Van Bibber's Admr. v. Van Bibber, 82 Ky. 347; Worley v. Northwest Masonic, etc., 10 F. 227; Ky. Masonic, etc., Ins. Co. v. Miller, 13 Bush, 489. ' Maryland Mut. Ben. Soc. v. Clendinen, 44 Md. 433, giving the following definition of a power :— " A liberty or authority reserved by or limited to a party to dispose of real or personal property for his own benefit, or for the benefit of others, and operating upon an estate or interest, vested either in himself or in some other person. The liberty or authority, however, not being derived out of such estate or interest, but overreaching or superseding it either wholly or partially." It is a mere naked power. Bloomer v. Waldron, 3 Hill, K Y. 365. See also, Greeno v. Greeno, 23 Hun, 479; Masonic Mut. R. Ass'n v. Mc- Auley, 2 Mackey, 70; Barton v. Provident Mut. Eel. Ass'n, 63 N". H. 535; 3 A. 627; 1 K. Eng. 856; Eastman v. Prov. Mut. R. Ass'n (N. H.), 20 C. L. J. 266; Worley v. K. W. Mas. Aid Ass'n, 10 F. 227; Gentry v. Sup. Lodge K. of H., 23 F. 718; Richmond v. Johnson, 28 Minn. 447; 10 N. E. 596; Swift v. Ry. Cond. Mut. Ass'n, 06 111. 309; Presby. Ass'n v. Allen, 106 Ind. 593; 7 N. E. 317; Ma- sonic Mut. Ben. Soc. v. Burkhart, 110 Ind. 189; 10 X. E. 79; 7 West Rep. 527; Ky. Masonic Mut. Life Ins. Co. v. Miller, 13 Bush, 489; Van Bibber's Admr. v. Van Bibber, 82 Ky. 347; Sup. Counc. Catholic M. B. A. v. Priest et al., 46 Mich. 429; 9 N. W. 481; Durian v. Central Verein, 7 Daly, 168; Tenn. Lodge v. Ladd, 5 Lea, 716; Arthur v. Odd Fellows, B. Ass'n, 29 Ohio St. 557; Duval v. Good- son, 79 Ky. 224. The residuary legatees under the will of a deceased member who had left no wife or children sued to recover the benefit not specially mentioned in that will. The provision in the charter of the defendant upon the subject was that the fund should be paid upon the death of a member " to the widow, child, children or such person or persons to whom the deceased may have disposed of the same by will or assignment." It was further provided that the balance of the benefit after payment of funeral expenses should revert to the society. The court in deciding for defendant said: — " It is possible — and -we neednot consider imder what circumstances — that when a member has executed and delivered to the reporter (secretary) his attested surrender in favor of a competent beneficiary, his death, before a new certificate is issued, may leave his power of designation so far executed as to enable a court of equity to relieve against the accident." The member of a benefit association having no interest or property in the fund stipulated to be paid on his death to his appointee, but simply the power of appointment, failure so to appoint leaves the fund to be disposed of as provided for in the contract creating the power, and if no disposition is so provided for, then there is a total lapse of the power and the fund will revert to the society. § 357 CONTRACTS OF MEMBERSHIP. 385 The charter and by-laws of the corporation con- stitute the terms of an executory contract, to which the applicant assents when he accepts admission into the association. 1 But there is a distinction between the member's relation to the benefit itself and his right to desig- nate the recipient of that fund. The latter, as has been frequently decided, is a part of his contract of mem- bership, and therefore possesses a property value to be protected as such.^ § SST. Reqaisites of valid designation The power to •designate a beneficiary given in a certificate, or in constating instruments referred to in such certificate, must be executed in strict compliance with the terms •of the instrument or instruments conferring it.^ For instance, power to designate by deed cannot be executed by will, or vice versa.* Where power is given In no case is this fund assets, and if collected by the executor or administrator it is to be regarded as a trust fund held for the benefit of the person entitled to it, and the creditors cannot share in it." Arthur v. Odd Fellows' Ben. Ass'n, 29 O. St. 558. - Hellenberg v. Dist. No. 1, I. O. B. B., 94 N. Y. 580. In this case defend- ants' charter provided that the benefit should be " paid to the wife of the de- ceased, if living, and if dead to his children, and if there are none, then to such person as he may formally have designated to his "lodge prior to his decease." The deceased member having no wife or children designated his mother, who died before him. But before his mother's death, and after she had been so •designated, he idade a will by the terms of which his mother was to have the benefit, and in case of her prior decease, then his brother was to have the benefit. It was held that the designation of the brother was vaUd, and that the executor under the will could not recover the fund for the benefit of the estate. See also Bishop v. Empire Ord. Mut. Aid Soc, 43 Hun, 472. 2 Infra, Ch. XXVI. 3 Elliott V. Whedbee, 94 N. 0. 115; Sup. L. K. & L. of H. v. Grace, 60 Tex. 571; 1 Sugden on Powers, 250, 255; Am. Legion of Honor v. Perry, 140 Mass. 580; 5 N. E. Bep. 634; 1 N. Eng. 715; 2 Washb. on Real Prop. 317; Presby. Pundv. Allen, 106 Ind. 593; 7 N. E. 317; 4 West. 712. * 2 Washb. on Keal Prop. 317; 1 Sugden on Powers, 255; Worley v. N. W. Masonic Aid Soc; 10 F. 227; Daniels v. Pratt, 143 Mass. 216; 10 N. E. 166; 5 N. E. 634; 3 N. Eng. 480. 25 386 CONTEACTS OP MEMBERSHIP. § 358 to designate by will, the designation must be therein, specially made, and the benefit does not pass under a general disposition of all the testator's property, nor under a residuary clause.^ § 358. Failure to designate— DefectiTC designation. — " The member of a benefit association having no interest nor property in the fund stipulated to be paid on his death to his appointee, but simply the power of appointment, failure so to do leaves the fund to be disposed of as provided for in the contract creating the power, and if no disposition is provided for, then there is a total lapse of the power, and this fund will revert to the society. In no case is this fund assets, and if collected by the executor or administrator, it is to be- regarded as a trust fund held for the benefit of the person entitled to it, and the creditors cannot share in it." 2 But this disposition of the benefit is determined by the charter and by-laws of the society, and if these provide otherwise the benefit will be disposed of accord- ingly.^ 1 Arthur v. Odd Fellows' Ass'n, 29 Ohio St. 557; Bown v. Catholic M. Ben. Ass'n, 33 Hun, 263; Maryland Mut. Ben. Ass'n v. Clendinen, 44 Md. 429 p Greene v. G-reeno, 23 Hun, 478; Hellenberg v. Dist. No. 1, I. O. B. B., 94 N. T. 580; Morey v. Michael, 18 Md. 241; Highland v. Highland, 109 111. 366; East- man V. Prov. E. Soc. (N. H.), 20 Cent. L. J. 267. Contra, St. John's Mite Soc. V. Buckly, 5 Mackey (D. C.) 406; 6 Cent. Eep. 292; Kepler v. Sup. L. Knights of Honor, 45 Hun, 274. 2 Bacon, Ben. Soc. & L. Ins., sec. 241. A certificate issued by the society mentioned no beneficiary other than the member, but provided that the benefits should be paid " subjact to will." The member died intestate, leaving a wife and three children. It was held that creditors of the member had no right or title to the money to be procured upon the certificate. Beeckel v. Imperial Coimcil of the Order of the United Friends, 11 N. T. S. 321. 8 Eastman v. Prov. Eel., etc., Soc, 20 C. L. J. 266; Swift v. San Francisco S., etc., E. Board, 67Cal. 567; 8P. 94; Hellenbergv. Dist. No. 1, I. O. B. B.. 94 N. Y. 580; Worley v. N. W. Mas. Aid Ass'n, 10 F. 227; Daniels v. Pratt, 143 Mass. 216; 10N.E.166;3]Sr. Eng. 480; McClurev. Johnson, 56 la. 620; ION. 217; Mary- land, etc., V. Clendinen, 44 Md. 429; Greeno v. Greeno, 23 Hun, 478; Gould v.. § 358 CONTRACTS OF MEMBERSHIP. 387 Bat where the certificate named the devisees of the member as beneficiaries and the charter of the associ- ation declared the objects of the association to be " tO' afford financial aid and assistance to the widows, or- phans, heirs or devisees of deceased members," and the member died intestate, it was held either the devisees or the heirs should take the benefit ; in other words, if there were no devisees, then the intent was that the heir was entitled to the benefit.^ "Where there is not a total failure to designate, but only a defective designation, and enough appears to clearly establish an attempt in good faith to execute the power, equity will interfere to remedy the defect.^ Emerson, 99 Mass. 154; Van Bibber's Admr. v. Van Bibber, 82 Ky. 347; Du- vallv. Goodson, 79 Ky. 224; Masonic Eel. Ass'n v. McAuley, 2 Mackey, 70; Bailee V. Gile, etc., 50 Wis. 614; Am. Leg. of Hon. v. Perry, 140 Mass. 580; 5 N. E. 634; 1 N. Eng. 481; Whitehurst Admr. v. Whitehurst, 83 Ya. 153; 1 S. E. Rep. 801; Covenant Mut. Benefit Ass'n v. Sears etal., 114 111. 108; Fenn v. Lewis, 10 Mo. App. 478. In a case where the disposition of a benefit was in dispute, the court say :— "It is not to be supposed that a father, on procuring insurance on his own life for the benefit of his family, or in keeping such a policy alive, intends to benefit himself or his estate, and especially is that true when, by the terms of the charter of the company in which he insures, with which he must be supposed to be familiar, he cannot take insm'ance for the benefit of any one except his wife or children, if he have either, and cannot dis- pose of the insurance if he leave wife or children surviving. We, therefore, conclude that the charter gave the member a mere power of appointment in case he has neither wife nor child, and that he has no interest whatever in the fund, and, therefore, it did not pass under a will merely disposing of all his estate, but in which no mention is made of the fund to arise from his member- ship." Duvall V. Goodson, 79 Ky. 224. See also McClure v. Johnson, 56 la. 620; ION. W. 217; Wason v. Colburn, 99 Mass. 342; Morley v. N. W. Mas. Aid Ass'n, 10 P. 227 ; Eastman v. Prov. Mut. Rel. Ass'n (IST. H. ), 20 Cent. L. J. 266. 1 Gov. Mut. Ben. Ass'n v. Spies, 114 111. 463; 2 N". E. 482. See also Smith V. Gov., etc., Ass'n, 24 F. 685. 2 1 Story Eq. Jur. 181, 182; Scott v. Prov. Mut. R. Ass'n, 63 N. H. 556; 2 N. Eng. Rep. 286; 4 A. 792; Knights of Honor v. Nairn, 60 Mich. 44; 26 N. W. 826. In the last case cited the court said: — " It is impossible — and we need not consider under what circumstances — that when a member has executed and de- livered to the reporter (secretary) his attested surrender in favor of a competent beneficiary, his death, before a new certificate is issued, may leave his power of designation so far executed as to enable a court of equity to relieve against the accident." Where under the laws a creditor was capable of becoming a beneficiary as 388 CONTRACTS OP MEMBKESHIP. § 359 The same principles of equity jurisprudence apply in these as in other cases of defective execution of powers, § 359. Change of beneficiary.— The power to designate a beneficiary given in a certificate of membership in a mutual benefit society is, unless limited in this respect, revocable as in other cases where a power is conferred. This arises from the fact that the act of designation is testamentary in its character, and therefore subject to the rules governing testamentary writings.^ Still, if the right to change be expressly given in the by-laws entering into the contract of membership, it may be equally correct to say that the act is, in part, execution of a contract. As has been stated the member has no property right in the benefit.^ The same is true of the person named as beneficiary prior to the happening of the event upon which it is to become vested in him, usually the death of the member. This is because of the contingent and uncer- legatee by the member so ordering during his lifetime, it was held that an assignment of the certificate by the member in his lifetime to the creditor as se- curity for the debt was but an irregularity in the mode of designation, which could not be questioned by , the widow, the society having recognized it as valid, Martin v. Stubbings, 126 ni. 387; 18 N. E. 657. ' Duvall V. Goodson, 79 Ky. 228; National American Ass'n v. Kirgon, 28 Mo. App. 80; Washington Ben. Fund. Ass'n v. Wood, 4 Mackey, 19; Continental liife Ins. Co. v. Palmer, 42 Conn. 64; 19 Am. Rep. 530; Union Mut. Aid Ass'n V. Montgomery, 70 Mich. 587; 38 ;K. W. 588; 14 West Kep. 877; Thomas v. Leake, 67 Tex. 469; 3 S. W. Rep. 703. In Sanger v. Rothschild, 2 N. T. S. 794, it was held that marriage operated as an annulment of a preceding designation. But see Mass. Cath. O. F. v. Callahan, 146 Mass. 391; 16 N. E. 14. In ttiven v. Wis. O. F. M. L. Ins. Co., 71 Wis. 547; 37 N. W. 817, where the wife of the member had been designated as beneficiary but died before his death, it was held this operated as a revocation so far that her heirs could not take the benefit, not- withstanding a statute which " empowers a husband to insure his life in favor of his wife, and provides that, such insurance shall inure to her separate use, and that of her children." ' Supra, § 356. § 359 CONTEACTS OF 3IEMBEESHIP. 389 tain nature of his interest, it being liable to defeat and termination by the member exercising his power to re- voke the appointment and substitute a new beneficiary. i This constitutes the principal distinction between benefit certificates and ordinary insurance policies ; the interests under the latter being vested interests, and not subject to alteration without consent of all the parties thereto.^ 1 Union Mut. Aid Soc. v. Montgomery, 70 Mich. 587; 38 N. W. 588; Kniglits of Honor v. Watson (N. H.), 15 A. 125; Luhrs v. Supreme Lodge Knights and Ladies of Honor, 54 Hun, 636; 7 N. Y. S. 487; Supreme Council Catholic Knights V. Morrison (R. I.), 17 A. 57. Supreme Council Catholic Knights of America V. Franke (111.), 27 N. E. 86. In Byrne v. Casey, 70 Tex. 247; 8 S. W. 38, it was held that where " the constitution of a mutual benefit society pro- vides that its by-laws may be amended at any time, a beneficiary in a benefit certificate, resulting from the insured's membership therein, who is not a mem- ber of the society, cannot complain that a by-law in existence at the time the certificate was issued, providing that the member may surrender the certificate, and receive a new one, with the consent of the beneficiary, was amended so as to omit the consent of the beneficiary." The right to change without the con- sent of the beneficiary is not affected by the fact that the latter is a creditor. Smith V. Nat. Ben. Soc, 51 Hun, 575; 4 N. Y. S. 521. •^ Bacon, Ben. Soc, & L. Ins., sees. 289, 292; Bliss L. Ins., sec. 318; Harley v. Heist, 86 Ind. 196; 44 Am. Eep. 285; Holland v. Taylor, 111 Ind. 121; 12 N. E. 116. In Holland v. Taylor, supra, the court says : — " For many, and, indeed, for most purposes, mutual benefit associations are insurance companies, and the certificates issued by them are policies of life insurance governed by the rules of law applicable to such policies. There are, however, some essential dif- ferences usually existing between the contracts evidenced by such certificates and the ordinary contract of life insurance. The most usual difference is the power on the part of the assured in mutual benefit associations to change the beneficiary. But, as in either case the rights of the beneficiary are dependent upon and fixed by the contract between the assured and the company or association, there seems to be no reason why the assured should have any greater power to change the beneficiary in one case than in the other, except as that power may be in- herent in the nature of the association, or is reserved to him by the constitu- tion, or by the laws of the association or by the terms of the certificate." See also, Presby. FundAss'nv. Allen, 106 Ind. 593;' Elkhart Mut. AidAss'nv. Houghton, 103; Ind. 286; 2 N. E. 763; 53 Am. Rep. 514; Bauer v. Sampson Lodge, etc., 102 Ind. 262; 1 N. E. 571. In Barton v. Prov. R. Ass'n, 63 N. H. 535 ; 3 A. 627. the following reasoning was advanced to support the view that the beneficiary has no interest in such certificates : — " The power of direction as to the object of the benefit is given to the member both in the by-law and in the certificate of membership, and there is nothing in either tending to show that the power is exhausted and another beneficiary cannot be substituted. , The power of selec- tion is unlimited as to persons, and is limited to time only by the death or the 390 CONTRACTS OF MEMBERSHIP. § 360 § 360. Change must be made in pursuance of by-laws.— The formalities which the by-laws of the association prescribe in the matter of changing the beneficiary must be complied with, else, according to the great pre- ponderance of authority, the attempted revocation and substitution are invalid and ineflFective. Such change, like the original designation, is but the execution of a power which, as we have seen, must be by the instru- ment, and executed in the manner pointed out by the grantor of the power.^ control of the member until death, and the provision for paying the benefit to the person named in the certificate at the death of the member, as then appears, leaves the power to appoint the beneficiary continuous until that event. The power of appointment is the one thing in the contract which is given to the member, and over that power no other person has any control. The right of its free exercise requires its continuance until death." See also Weil v. Trafford, ;! Tenn. Ch. 103; Swift v. Railway, etc., Ben. Ass'n, 96 111. 309; Richmond v. Johnson, 28 Minn. 447; 10 >r. .596. 1 McCarthy v. New Eng. Ord. Protec. (Mass.), 26 N. E. 866; Hotelmen's, Mut. Ben. Ass'n v. Brown, 33 F. 11; Order Mut. Companions v. Greist, 76 Oal. 494; 18 P. 652; Knights of Honor v. Nairn, 60 Mich. 44; Supr. Council v. Smith . B. N. Co. (N. J.), 16 A. 191. In Stewart v. Mahoney Min. Co., 54 Cal. 149, it was decided that one in whose name shares stand on the books with the designation of " trustee " cannot vote them if he has no actual interest in them, and is not in fact, a shareholder. 2 The law as to the important use to be made of the stock books by the corporation, in determining the right to vote, was thus summarized by Shabpstbin, J., in People v. Eobinson, 64 Cal. 373, 375: " A transfer not entered on the books of the company has no validity outside of the parties to such transfer. If not, could it affect the validity of an election at which trustees of the company were elected ? If so, would not a transfer, although not entered on the books of the company, be valid outside of the parties to such transfer ? The construction which we feel compelled to give to this clause is, that a transfer of stock, until entered on the books of the com- pany, confers on the transferee, as between himself and the company, no right beyond that of having such transfer properly entered. Until that is done, or demanded to be done, the person in whose name the stock is entered on the books of the company is, as between himself and the com- pany, the owner to all intents and purposes, and particularly for the purpose •of an election." ' Hoppin v. Bufferin, 9 R. I. 513. 412 CONTROL THROUGH CORPORATE MEETINGS. § 380 the protection of the corporation, to enable it to know vfla.0 are its members, who are entitled to dividends, and to enable it to know who are entitled to vote. This is the recognized object of such provision as decided in many cases. ^ § 380. Stock held in trust. — The rule does not prevent him having the legal title in a representative capacity from voting. In case of the death of a stockholder, his administrator becomes, by operation of law, vested with the legal title to the stock, and is entitled to vote it, at all elections, without a transfer upon the stock book. The same rule would apply to all cases where the title is transferred by operation of law. And the fact that the decedent held the stock subject to a trust would not alter it. Upon the death of a trustee of personal property the trust would devolve upon his representative and he become legal owner as to all persons except the cestui que trust, and the corporation has nothing to do with the equities between the imme- diate parties to the trust, or between the legal owner and third parties, as regards the rights of voting.^ So if the stock be hypothecated the pledgor is entitled to^ vote as long as the stock remains in his name on the books of the corporation,^ or in the name of the pledgor. 1 People V. Eobinson, 64 Cal. 373; Hoppin v. Bufferin, 9 E. I. 513; Gilbert T. Mfg. Iron Co., 11 Wend. 627; Bank of Utica v. Smalley, 2 Cow. 770, 77S; Detwilerv. Com., 131 Pa. St. 614; Miller v. Katterman (Ohio), 24 N. E. 496; Kirtright v. Bank of Bufealo, 22 Wend. 348, 362; Fisher v. Essex Bank, 5 Gray, 373, 380; State v. Smith, 15 Or. 98; 15 P. 386; Hoagland v. Bell, 36 Barb. 57. 2 In re Cape May, etc., Co. (N. J.), 16 Atl. Eep. 191; In re Ferry Co., 63 Barb. 556;, In re L. I. B. R. Co. Elec. Case, 19 Wend. 43; In re Northern, etc., Co., 13 Beav. 139. 3 Wilcocks, ex parte, 7 Cow. 402. See Mc Daniels v. Flower Brook Mfg. Co., 22 Vt. 274. In California, by statute, the share of stock of a minor or insane person may be represented and voted by his guardian, and of a decedent by his administrator or executor. Civ./Code, sec. 313. Though the pledgee of stock transferred to him on the corporate books may have promised that the pledgee should retain control pf the corporation, this equity must be enforced in a suit "^ 381 CONTROL THROUGH CORPORATE MEETINGS. 413 with an explanation on the register showing the extent and nature of his title.^ One whose name appeared on the company's books as the owner of shares was held not to have lost his right to vote them by reason of an assignment in bankruptcy .2 But it seems that the prima facie title of the record owner may be disputed and overcome so as to compel the corporation to recognize the real owner, if the latter is present objecting, and is able to show his title beyond dispute.^ § 381. Collusive transfers. — If shares were collusively and fraudulently transferred on the stock book without the knowledge or consent of the real owner, he would, no doubt, have the right to make that fact appear either at the meeting where one, having thus obtained a mere colorable title, attempted to vote them to defeat -the attempt, or in a proceeding to set aside an election or other act done at such meeting, unless a majority of the stock, independent of such shares, had been fairly represented and voted on the proposition. As between the record owner and real or equitable owner, a court of equity will often interfere to preserve to the latter the right of voting, and prevent an unjust exercise of it by compelling the nominal owner to give to compel the pledgee to give him a proxy, and not in a proceeding under Comp. Laws N. D., § 2982, providing that, on the application of any person aggrieved by any election held by a corporate body, the district judge shall summarily hear the allegations and proofs, and thereupon confirm the election, order a new one, or direct such other relief as may be right and just. In re Argus Printing Co. (N. D.), 48 N. W. 347'. 1 Infra, § § 471, 498. 2 State v. Ferris, 42 Conn. 560. See Ee North Shore, etc., Perry Co., 63 Barb. 556. 8 Allen v. Hill, 16 Cal. 113. There are several New York cases to the con- trary, but they are predicated upon a statute making the books the only evidence ■of ownership. Holmes, ex parte, 5 Cow. 434. 414 CONTROL THKOTJGH COKPOKATB MBBTINOS. § 382~ a proxy. As where a shareholder has made a com- plete sale or assignment of his interest in shares and no transfer has been made to the purchaser upon the books of the company,^ or when stock has been transferred by the real owner to one as collateral security, only .2 § 382. Shares owned by corporation cannot be voted. — The rule that the legal owner may vote the shares in his name is subject to an exception in the case of shares owned by the corporation. And the exception holds good, although the shares are held for the corporation in the name of trustees. This necessarily follows un- less it can be shown that a corporation can become a stockholder of its own stock, receive from itself divi- dends, respond to calls for assessments, and be respon- sible for debts, first as a corporation, and second as a stockholder.^ In Holmes, ex parte,* thirteen persons, being duly elected directors, had received votes upon stock owned by the corporation, and thirteen other persons had re- ceived a majority of the votes representing outstanding stock. The court vacated the election of the former, and declared the others duly elected. The principle upon which these decisions rest is, that oflScers of moneyed institutions will not be allowed to wield such stock, however obtained, to control elections of directors and perpetuate themselves and their favor- ites in office.^ 1 McHenry v. Jewett, 26 Hun, 453. 2 Vowell V. Thompson, 3 Cranch C. C. 428. ' Mousseaux v. Urquhart, 19 La. Ann. 482; Brewster v. Hartley, 37 Cal,- 15; Vail V. Hamilton, 85 N. T. 453; 20 Hun, 355; Am. Ry. Frog Co. v. Haven, 101 Mass. 898. Where one held stock which had heen transferred to him " for the benefit of the corporation," it was held that until the corporation had, by authority of the company, sold and transferred the shares, .the right of voting upon them was suspended. Brewster v. Hartley, supra. * 15 Cow. 426. 6 In Brewster v. Hartley, supra, shares of stock in a railroad corporation had § 383 CONTROL THROUGH CORPORATE MEETINGS. 415 § 383. Of the place of meeting.— No meeting of members of a corporation can be legally held outside of the boundaries of the state by or under whose laws the corporation was created.^ As to the legal eifect of acts done at corporate meetings outside the state, there is a conflict of opinion as to whether they are void or merely voidable. It seems to be settled, by the weight of authority, that the corporation itself and the stock- holders who attend such ultra -territorial meeting are estopped to deny its validity and regularity, and that as to others they are voidable but not void.^ And a- been transferred by the corporation to a trustee to secure a debt due by it. The trustee had voted all the shares so held, such votes having determined the result of an election for directors. In deciding against the title to office of the directors so elected, Rhodes, J., delivering the opinion said : — "While the position that the corporation may issue its stock in payment of its indebtedness is not ques- tioned, it does not follow that the stock may be issued in the usual manner, and afterwards become the property of the corporation, and be held in such a manner that it did not merge. When the certificates of stock are issued to a stockholder, they are, in his hands, the mimiments and evidence of his title to a given share in the property, income and franchises of the corporation. The corporation possesses only the right, the power to issue the stock, and a condition precedent to the exercise of the power is the purchase and payment for the stock. This restriction, if it may properly be so called, is not more unreasonable than those relating to the amount of money the corporation may borrow and the rate of interest it may pay, and they all tend in some degree to protect the stockholders and creditors. If the power exists in the corporation to issue stock to secure a loan or indebtedness, it is practically imlimited, and the directors may issue and pledge all the capital stock not held by stockholders as security for a trifling loan, and by the aid of the stocks thus' issued, they may increase the capital stock, and pledge the new stock to secure another loan, and thus perpetuate themselves in power beyond the reach of redress on the part of the stockholders, who may have contributed much the larger portion of the assets of the corpora- tion.'-' In the same case it was held that " where the qualifications of voters are prescribed by statute, and authority to regulate the conduct of elections in by- laws is also given, no by-law will be allowed to operate so as to take away or abridge the exercise of the right of voting. Such statutory provisions are im- perative." 1 Miller v. Ewer, 27 Me. 509; Smith v. Silver Valley Min. Co., 64 Md. 85; Franco Texas Land Co. v. Laighle, 59 Tex. 339; Omrsby v. Vermont Copper Min. Co., 56 N. Y. 623; Hilles v. Parrish, 14 N. J. Eq. 380; Reich wald v. Com- mercial Hotel Co., 106 111. 439; Camp v. Byrne, 41 Mo. 525. 2 Where all the stockholders are present at a meeting held outside the state, and vote for an increase of capital stock, and agree to receive proportionate shares of the increased stock, they cannot question the validity of the meeting 416 CONTROL THROUGH CORPORATE MEETINGS. § 383 stockholder is estopped from objecting to a meeting of the board of directors on the ground that it was held outside the state of the company's incorporation, where it appears that he was present at the previous meetings, nearly all of which were held at the same place, and made no objection.^ But where the corporation has heen incorporated by the concurrent action of two or more states, it may lawfully hold meetings of the stockholders in either state.^ A different rule prevails in respect to meetings of idirectors, it being generally held that, in the absence of a statutory or charter provision to the contrary, they may lawfully hold meetings outside the state, and that in an action brought against them by creditors of the corporation to compel them to pay the par value of the stock as a trust fund for the creditors. Kerers- dng 41 F. 531. Handley v. Stutz, 11 S. Ot. 530. In Aspinwall v. Ohio, etc., K. E. Co., 20 Ind. 492, 497, calls made at a meeting in another state to which a ■corporation after being foiTied had migrated were held void and unenforceable. In Miller v. Ewer, 27 Me. .509, an election of directors at a meeting held in a foreign state was held void. See also to same effect Freeman v. Machais, etc., ■Co., 38 Me. 343; Ormsby v. Vermont Copper Min. Co., 56 N. Y. 623. Thepro- ■ceedings at such meeting may be subsequently validated by legislative action where it could previously have authorized it. Graham v. Boston, H. & H. R. R. ■Co., 118 U. S. 161, 178. See Granada Co. v. Brogden, 112 U. S. 261. The corpo- ration itself is estopped. Heath v. Silverthorn Lead Min. etc., Co., 39 Wis. 146. And so are the stockholders who participated in the transaction of the business and voted in favor of the measures adopted. Camp v. Bryne, 41 Mo. 525; Ohio, •etc., R. R. Co. V. McPherson, 35 Mo. 13. But as against officers elected at a meeting held outside the state, those previously in office have the right to retain control of the affairs of the corporation. Hodgson v. Duluth, H. & D. R. Co. (Minn.), 49 N. W. 197 (Aug., 1891). The stockholders of a water-works corpora- tion, organized under the laws of Kansas, met at Natchez, Miss., and passed resolutions authorizing its board of directors to issue bonds, and execute a mort-. gage to secure bonds, which the board of directors. did in pursuance of such resolution. It was held that, although the stockholders' meeting was illegal, the mortgage was valid, inasmuch as the board of directors had power to mortgage the property without special authority, unless restrained by the charter or by-laws or the law of Kansas. Thompson v. Natchez Water & Sewer Co. (Miss.), 9 So. 821 (Sept. 1891). 1 Wood V. Honey (N. J.), 21 A. 574. 2 Graham v. Boston, H. & H. R. R. Co., 118 U. S. 161; Covington, etc.. Bridge Co. V. Mayer, 31 O. St. 317; Ohio, etc., Ry. Co. v. People, 121 111. 483; 14 N. E. Rep. 874. ;§ 385 COKTKOL THROUGH COEPOKATE MEETINGS. 417 their acts done and contracts made thereat are valid and enforceable,^ § 384. Of the manner of Toting.— The members having assembled, it is their right to control and conduct the voting according to law, the charter or articles and by- -laws. The right to appoint inspectors or judges of elections is vested in them and not in the directors.^ The manner of expressing the will of the members is immaterial, and mere informalities will not be regarded, provided the will of the majority be clearly and fairly expressed.^ Every qualified stockholder present at an election has a right to vote at one time the number of shares owned by him for the whole number of directors to be elected, and to cumulate his shares upon one candidate or to distribute them among as many candidates as he may see fit ; and the corporation has no power to adopt any mode of election which will interfere with this right, when given by statute.* § 385. Calling meeting to order.— The time within which a meeting should be called to order after as- sembling will depend largely upon the circumstances 1 Wright V. Bundy, 11 Ind. 398, 404; Barsett v. Monte Cristo, etc., Co., 15 Nev. 293; Ohio, etc., K. E. Co. v. McPherson, 35 Mo. 13; Wood Hydraulic, etc., Co. V. King, 45 Ga. 34; Saltmarsh v. Splauding, 147 Mass. 244; 17 N. E. Kep. 316; Reich wald v. Com., etc., Co., 106 111. 439; Galveston, etc., R. E. Co. v. Cowdrey, 11 Wall. 459, 476; Bellows v. Todd, 89 la. 209; Ames v. Conant, 36 Vt. 744; McCall v. Bryan Mfg. Co., 6 Conn. 428; Smith v. Alvord, 63 Barb. 415 ; Corbett v. Woodward, 5 Sawy. 403. 2 State V. Merchant, 37 O. St. 251; In re Light Hall Mfg. Co., 47 HuHj 258. , 8 Phillips V. Wickham, 1 Paige, 590; Dowingv. Potts, 3 Zab. 66; People v. Albany, etc., R. R. Co., 55 Barb. 344; Wheeler's Case, 2 Abb. Pr. N. S. 361; People V. Campbell, 2 Cal. 135; Hardenburgh v. Farmers', etc.. Bank, 3 N. J. Eq. 68; Hughes v. Parker, 20 N. H. 58. * Wright V. Cent. Cal. 0. W. Co., 67 Cal. 532; State v. Smith (Or.), 15 P. -386. 27 418 CONTROL THEOUGH CORPOEATE MEETINGS. § 386' in each case. There should be no unreasonable delay, and yet suflSicient time should evidently be given to enable the members to assemble. The meeting should not be delayed so long as to create the impres- sion that no meeting is to be held and cause the larger part of the members to disperse. A measure cannot,, after such unreasonable delay, be legally adopted whicfi. could not have been adopted but for the delay .^ In the absence of proof to the contrary, it will be presumed that a meeting was held at a suitable hour and in pur- suance of the notice.^ § 386. Statutory regulations.— All provisions,' require- ments and regulations governing elections, whether found in the statutes or in the by-laws, framed under authority derived from statutes, must be substantially pursued.^ Thus where the statute provided that the board of directors should be annually elected by the- stockholders at such time and place and upon such notice as should be provided by the by-laws of the^ corporation, it was held that unless all the stockholders, were actually present, either in person or by proxy, such annual meeting could not not be held until after notice, and that under a by-law directing that annual meetings should be held on the third Monday in April, a notice of a meeting which did not specify the time of day at which the meeting would be held was insuf- ficient.* So, where stockholders were restrained from holding 1 South School Dist. v. Blakeslee, 13 Conn, 227. See State v. Bonnell, 35 Ohio St. 10. 2 South School Dist. v. Blakeslee, supra ; Tounglove v. Steinman, 80 Gal. 375 ; 22 P. 189. See State v. Le Kemp, 4 Ohio Cir. Ct. 257 ; State v. Stockley, 45 Ohio, 304; 13N. E. 279. 4 San Buenaventura Mfg. Co. v. Vassault, 50 Cal. 534. See also Zion M. E. Church v. H'illery, 51 Cal. 155. § 386 cosrxKOL thkough coepokatb meetings. 419' their annual election for directors at the time fixed,, and the election was held several hours afterwards by a minority, without notice to the others, it was held that such an election had no validity at law.^ Where the corporation failed to provide in its by-laws any of the necessary steps in the calling and holding of an election, as it might have done, and the general law concerning corporations contained a provision on that subject, the latter governed and should have been followed.^ The statute having provided that each shareholder voting may cumulate or distribute his shares at option, a corporation cannot contravene that provision by adopt- ing another mode.® So where the statute authorized a majority of the board of directors to do a corporate act, and a by-law authorized a vacancy in the office of trustee to be. filled by a less number than a majority, it was held that such by-law, being contrary to the charter, was void.* But where it was shown that part of the members assembled fifteen minutes before the hour appointed, organized and proceeded with the election of officers for which the meeting was called, and that other mem- bers at or about the hour fixed met in another room, organized and also had an election, it was held that the first-mentioned meeting was irregular and void as to the 1 state V. Bonnell, 35 Ohio St. 10. 2 Matter of L. I. Ky. Co., 19 Wend. 37. 8 State V. Stockley, 45 Ohio, 304; 13 N. E. 279; 67 Cal. 532. * Corey v. Curtis, 9 Nev. 325. Although directors hold ot&oe until their successors are elected and qualified, yet the law contemplates that an election shall be held periodically, according to the general law. Curtis v. McCuUooh, 3 Nev. 202. And it is the duty of directors to exercise a wise and just discretion in calling and fixing time and place for the annual election. State ex rel., etc., v. Lady Bryan M. Co., 4 Nev. 400. The right to demand an annual election, as required by law, belongs to every stock- holder. State ex rel., etc. v. Wright, 10 Nev. 167. 420 CONTROL THROUGH CORPORATE MEETINGS. § 387 non- participating members ; that the irrgularity was not cured by re-organizing the meeting at the proper time, and going through the same proceedings, it being in fact and legal effect a continuation of the first meet- ing. It was also decided that the second meeting was legal, and those elected to offices thereat entitled to hold them.i But if called together for a particular purpose stated in the notice, they cannot proceed to the transac- tion of other business without unanimous consent of the membership.2 The length of time during which the polls should be kept open is a matter largely within the discretion of the inspectors ; but it is a trust they will not be allowed to grossly violate. The time should be long enough to give all a fair opportunity to vote.^ § 387. Voting by proxy.— Proxy voting was not recogniz- ed by the English Common law,* but has become so uni- versal a custom in this country, that the right would at the present day probably be held to exist even in the a;bsence of statutory provisions . where so provided in the by-laws.6 and the form of authority, so to vote is 1 People V. Albany, etc., K. B. Co., 55 Barb. 344. If the statute does not require the business to be transacted to be stated In the notice, the meet- ing may entertain and pass upon any ordinary matter pertaining to the corporate interests. SchofE v. Bloomfleld, 8 Vt. 472 ; Granger v. Original, etc., Co., 59 Cal. 678. 2 Machel v. Nevison, 11 East. 84. 3 Matter of Chenango County Mut. Ins. Co., 19 Wend. 635; People v.- Albany, etc., R. K. Co., 55 Barb. 344. 4 Willcocks ex parte, 7 Cowen, 402. See McDaniels v. Flower Brook Mfg. Co., 22 Vt. 274. 6 Phillips V. Wickham, 1 Paige, 590, 598 ; Com. v. Detwiler, 131 Pa. St. 614 ; People V. Twaddell, 18 Hun, 427 ; Commonwealth v. Bringhurst, 103 Pa. St. 134; Taylor V. Griswold, 14 N.J. Law, 222. But see Brown v. Com., 3 Grant's Cas. 209; State v. Tudor, 5 Day, 329. Compare Matter of Baker, 6 Wend. 509. The Cal. Statute recognizes the right and empowers all corporations to regulate the manner by by-laws, only requiring that proxies shall be in writing. Civ. Code, sec. 312. § 388 CONTROL THROtTGH CORPORATE MEETINGS. 421 immaterial.^ The right is given, however, by statute in most, if not all the states.^ The right was not recog- nized by the civil law, unless allowed by overruling custom.^ There are important differences in this, as in the provision respecting other matters pertaining to cor- porate elections in the various states, so that for a clear understanding reference must be had to the statutes of the particular state where the question arises. A proxy cannot be used for any purpose other than that for which it was given. "Where it authorizes the holder to vote, he cannot represent the stockholder on other questions, such as a dissolution of the corporation or sale of the entire corporate property and business.* Authority to vote by proxy can by no means be con- strued to authorize the sanction of an ultra vires act.^ § 388. Notice of meeting. — In order to constitute a I In re St. Lawrence Steamboat Co., 44 N. J. L. 529, 534, the court said : — " A stockholder, who desires to exercise his right to vote on his stock by proxy is undoubtedly bound to furnish his agent with such written evi- dence of the latter's right to act for him as will reasonably assure the in- spectors that the agent is acting by the authority of his principal. But the power of attorney need not be in any prescribed form, nor be executed with any peculiar formality. It is sufQcient that it appear on its face to confer the requisite authority, and that it be free from all reasonable grounds of suspicion of its genuineness and authenticity ; and the court, in reviewing the proceedings at an election, must be satisfied that the in- spectors had reasonable grounds for rejecting the proxy." See also. Re Cecil, 36 How. Pr. 477 ; Marie v. Garrison, 13 Abb. N. C. 210. ■•' Comm. V. Bringhurst, 103 Pa. St. 134 ; s. o. 49 Am. Bep. 119 ; Taylor v. Griswold, 14 N. J. 222; Craig, v. First Pres. Ch., 88 Pa. St. 42; In re Lighthall Mfg. Co., 47 Hun, 258. 3 Ayliffe, Civ. L. 202. 4 Abbott V. Am. Hard Rubber Co., 33 Barb. 578, 584; Cumberland Coal Co. V. Sherman, 30 Barb. 552, 577 ; Matter of Wheeler, 2 Abb. Pr. N. S. 361 ; Marie v. Garrison, 13 Abb. Pr. N. C. 310, 335; Keg. v. Gov. Stock Co., L. R. 3 Q. B. D. 442. 5 Brown v. Byers, 16 M. & W. 252. It was held that a proxy for the purpose of voting could not be used at an election four months later. Howard v. Hull (Eng.), 5 Ky. & Corp. L. J. 255. 422 CONTROL THEOTJGH CORPORATE MEETINGS. § 389 legal meeting notice to all the members is essential,^ In few cases is it necessary to prove actual personal notice to each member, but some general form of notice is usually prescribed by the statute, articles or by-laws, and then it is only necessary to follow the prescribed method of notification. § 389. Time of notice, — The notice should contain the date, time of day, place and business proposed to be transacted ; though if the meeting be for transacting the ordinary business the object need not be stated.^ If no length of time of notice be fixed by the articles or by4aws, notice must be given a reasonable time before the meeting. 3 Where long notice is provided for, the courts incline to require strict compliance on the theory that it fur- nishes opportunity for a full attendance, enables the members to qualify themselves for voting, and is a safeguard against collusion and the evils which might result from advantage being taken of a partial attend- ance.* In New York the power to review corporate ' Notice that a meeting will be held upon the happening of an event, without a further notice that the event has occurred rendering the meeting necessary, is not sufficient to bind the members by proceedings taken at a meeting so noticed and held. Alexander v. Simpson, 43 Ch. Div. 139. 2 Matter of British Sugar Refin. Co., 3 K. & J. 408; G-raham v. Van Diemen's Land Co., 1 H. & N. 541; 26 L. J. Exch. 73; Fox's Case, L. R. 6Ch. 176; Cleve v. Financial Corp., L. R. 16 Eq. 363. See GrangerV. Original Empire Mill, etc., Co., 59 Cal. 678; Johnston v. Jones, 23 N. J. Eq. 216. 8 Rex v. May, 5 Burr, 2681; Rex v. Hill, 4 B. presumes, until the contrary appears, that valid notice of a corporate meeting which has been held was given to every stockholder, and that the meeting itself was regularly called andheld.^ ■ once rebutted by proof is of no force. Where a by-law of a corporation re- quired its secretary to give due notice of meetings of the board of directors, and a sale of all the corporate property was made at a meeting of which one director was not notified, and from which he was absent, it was held that such sale was unauthorized and void. Farwell v. Houghton Copper Wks., 7 Fed. Bep. 67. If no record of the proceedings at a corporate meet- ing is kept parol, evidence is admissible to show what was done. Ten Eyck V. Pontiac, O. &P. A. K. Co., U Mich. 226; 41 N. W. 905. See Saltmarsh v. Spaulding, 147Mass.224; 17 N. E. 316; Thompson v. Williams, 76Cal.l53;. 18 B. 153; Met. T. &T. Co. v. Tel. Co., 44N. J. Eq. 568 ; 14 A. 907; Longmont, etc., Co. v. Coffman, 11 Colo. 555; Wood v. Constr. Co., 56 Conn. 87; 13 A. 137. 1 McDaniels v. Flower Brook, etc., Co., 22 Vt. 274; Porter v. Bobinson, 30 Hun, 209 ; Sargent v. Webster, 13 Met. 497 ; Medical & Surg. Soc. v. Weatherly, 75 Ala. 248; South School, etc., v. Blakeslie, 13 Conn. 227, 235;. Lane v. Brainard, 30 Conn. 565 ; Pitts v. Temple, 2 Mass. 538 ; Capp. v. Llamb, 12 Me. 312 ; Tuttle v. Mich., etc., B. B. Co., 35 Mich. 247 ; Wells v. Bodgers (Mich.), 27 N. W. Bep. 671; Mut. Fire Ins. Co. v. Sortwell, 8 Allen, 217; Com. V. Woelpper, 3 S. & E. 29 ; Edgarly v. Emerson, 23 N. H. 555 ; State v. Smith, 48 Vt. 266. § 396 CONTEOL BY MEANS OF BY-LAWS. 431 CHAPTER XVI. CONTROL BY MEANS OF BY-LAWS. § 396. Definition and object. 397. How made and enforced, 398. Usually the province of members. 399. Statutory provisions. 400. Limitations upon the power to enact by-laws. 401. Retroactive by-laws invalid. 402. By-laws cannot prejudice rights of third parties. 403. Invalid provisions. 404. Must be reasonable and necessary. 405. Power given by law to enforce conditions. 406. Must not be in restraint of trade. 407. Must not be in restraint of personal liberty. 408. By-laws imposing forfeiture invalid. 409. By-laws providing for forfeiture under authority conferred by charter or statute. 410. Power to regulate does not authorize prohibition, 411. Kegulations not formally adopted. 412. To what extent binding on third parties, 413. Validity a question of law. 414. Proof of by-laws. § 396. Definition and object. — A rule of a permanent character adopted by a corporation for its internal government, obligatory upon all its members, and also upon others who are acquainted with its method of doing business, is called a by-law.^ The power to adopt rules for the government of the members, and for the administration of internal affairs, is necessarily incident to the authority to organize and conduct a corporate 1 Grant on Corp., 76; Cummings v. Webster, 43 Me. 192; Drake v. Hudson Riv. R. Co., 7 Barb. 508. "The office of a by-law is to regulate the conduct and define the duties of the members toward the corporation and between them- selves." Flint V. Pearce, 99 Mass. 70. See also Comm. v. Turner, 1 Cush. 496. 4S2 CONTKOL BY MEANS OF BY-LAWS. § 397 enterprise.^ If it were not, it would be next to impos- sible to conduct its business in an orderly and efficient manner. The distinction between a by-law and a regulation is this : A by-law binds the members only, while a regulation, if reasonable, affects third persons, who, having notice of it, deal with the corporation.^ § 397. How made and enforced. — By-laws must, of necessity, be left, for the most part, to the discretion of those best acquainted with the interests and needs of the corporation, namely, the members themselves. ^ From the power to enact by-laws flows, as a natural ■consequence, the right to enforce them by the infliction •of penalties for their violation. It may be provided by 1 1 Blk. Com. 476; People v. Sailors' Snug Harbor, 54 Barb. 532; Came v. Brigham, 39 Me. 35; Harrington v. Workingmen's Benevolent Ass'n, 70 Ga. 340; Poultney v. Bachman, 39 Hun, 49; State v. Tudor, 5 Day, 329. 2 Morris & Essex K. Co. v. Ayers, 5 Dutch (N. J.), 393; State v. Overton, 24 N. J. L. 440; Compton v. R. Co., 34 N. J. 134. A person has the right to treat the by-laws given to him on his becoming a member of the association as all the by-laws such association had, and he is not bound to take notice of the modifi- cations of such by-laws, with respect to withdrawing, on the record of the com- pany simply, without further notice to him; which notice must be proven by the defendant company to have been given. McKinney v. Diamond State Loan Ass'n (Del.), 18 A. 995. " Green's Brice's Ultra Vires, 2d. Am. Ed. 15. Voluntary associations re- semble religious and other charitable and social corporations, with respect to the jurisdiction of courts to enforce by-laws. With respect to such, courts will leave members to the authority or tribunal within the corporation where the by- laws are valid, subject to the right to appeal on the ground of oppression or abuse of authority. The court has no visitorial power. The only question which it will determine is, whether they have been adopted in the way agreed upon by the members of the association. Kehlenbeck v. Lageman, 10 Daly TJnion Mut. Ins. Co. v. Keyser, 32 N. H. 313. 2 Morton Gravel Road Co. v. Wysong, 51 Ind. 4; People v. Throop, 12 Wend. 183; Child v. Hudson Bay Co., 2 P. Wm. 209. * St. Louis V. Bufflnger, 19 Mo. 13; Cunningham v. Alabama Life Ins. Co., 4 Ala. 652, 654; Taylor v. Carondelet, 20 Mo. 105; A. & A. on Corp. 177; Hop- kins T. Mayor, etc., 4 M. & W. 621; Ballord v. Bank, 18 Wall. 589; People v. Crackett, 9 Gal. 110; Smith v. Nelson, 18 Vt. 511; U. S. v. Hart, 1 Pet. C. C. 390; Mt. Moriah Com. Ass'n v. Com., 81 Pa. St. 235; Evansville Nat. B'k, 45 N. T. 655; State v. Williams, 75 N. C. 134; Presb. Church v. City of New York, 5 Cowen, 538. See People v. Crossly, 69 111. 195 ; Seneca County Bank v. Lamb, 26 Barb. 595. * In re Lighthall, 47 Hun, 258, holding that where a statute provided that elec- tions of officers should be made " by such of the stockholders as should attend for that purpose, either in person or by proxy," the corporation cannot require in a by-law that proxies can only be held by stockholders. 436 CONTROL BY MEANS OF BY-LAWS. § 402 the kingdom is void, though, justified by the terms of the charter. 1 § 401. Retroactive by-laws invalid.— By-laws must not be retroactive. Accordingly a by-law amending the con- stitution "of a corporation, so as to attach a new penalty to a default in addition to that existing at the time of its occurrence, was deemed analogous to a foreclosure decree fixing a shorter time for payment than that agreed upon by the parties, and clearly ex post facto. ^ § 402. By-laws cannot prejudice rights of third parties.— A corporation cannot, by means of a by-law, impose either upon third parties, or its members with respect to third parties, any liability or remedy in addition to those created and provided by the general law ; ^ and by-laws must be limited in their operation to such mat- ters as concern the internal affairs of the corporation,* A by-law of a bank is a contract of the stockholders among themselves ; and in order to be binding upon a third party dealing with it, must be reasonable and be brought to his notice before the contract affected by it 1 2 Kyd on Corp. 109; Norris v. Staps, Hobart, 210. » Pillford V. Fire Dept., 31 Mich. 458. See also Dock Co. v. Heron, 52 Pa. St. 280. It was held that a by-law adopted after the issue of shares of stock provid- ing that no transfer should be made when the owner was indebted to the bank was held not to bind the judgment creditors of the stockholders; although the statute declared that the shares should be transferable on the books of the cor- poration in such manner as the by-laws might direct. Byron v. Carter, 22 La. Ann. 98. Such purchase does not occupy the position of an innocent purchaser for value and without notice. These decisions are at variance with later views. Infra, § Oh. XIX. 8 Flint V. Pierce, 99 Mass. 68; Mechanics' B'k v. Smith, 19 Johns. 115; Susquehanna Ins. Co. v. Pe^fine, 7 Watts & Serg. 348; Marietta v. Fearing, 4 Ohio, 427. See State v. Curtis, 9 Nevada, 325. * Seneca County Bank v. Lamb, 26 Barb. 595. Before a creditor can recover on the strength of the provisions of a by-law, he must show in addition some privity, as, for instance, that his claim is for value advanced upon the credit of the by-law. Flint v. Pearce, 99 Mass. 68. § 404 CONTROL BY MEANS OF BY-LAWS. 437 was raade.i And the same rule applies to other cor- porations, whether public or private.^ § 403. Invalid provisions.— A by-law subjecting the members of a corporation to expulsion if they resorted to the courts for redress for wrongs, and refusing to submit their grievances to arbitration, was held void as against public policy.^ A by-law was held valid, however, which added the penalty of expulsion to legal liability for their violation of a contract, notwithstanding such contract may be void by the statute pf frauds.* And a by-law which affixes a penalty to an act may be valid, though the matter is regulated by a statute which also affixes a penalty .5 Where a by-law consists of several distinct parts or independent clauses, it may be void in part and valid in part ; but when it is entire and its parts are insepa- rable, it is void altogether if any part of it is open to legal objection.® But if a part is void and the whole forms an entirety, so that the part which is void in- fluences the whole, the entire by-law is void.'' § 404. Must be reasonable and necessary.— The deter- mination of the question of the necessity for a by-law is left largely to the corporation, or the body within it. 1 Mechanics & Farmers' B'k v. Smith, 19 Johns. 115. 2 Galatin v. Bradford, 1 Bibb. 209; Hayden v. Noyes, 5 Conn. 391; Peck v. Lockwood, 5 Day. 22: Marietta v. Fearing, 4 Ohio, 427; Austin v. Murray, 16 Pick. 121; Milhauv. Sharp, 17 Barb. 435; 27 X. Y. 611; Dunham v. Trustees, etc., 5 Cow. 462; Strauss v. Pontiac, 40 111. 301; Austin v. Murray, 16 Pick. 125 ; Wreford v. People, 14 Mich. 41. 2 State V. Merchants' Exch., 2 Mo. App. 96. * Dickinson v. Chamber of Commerce, 29 Wis. 45. 5 Rogers v. Jones, 1 Wend. 237. 6 Amesbury v. Bowditch Mut. Fire Ins. Co., 6 Gray, 596; Rogers v. Jones, 1 Wend. 237. ' State, etc., v. Curtis, 9 Nev. 325. 438 CONTROL BY MEANS OF BY-LAWS. § 404 enacting the by-law ; but the presence or absence of its necessity sometimes affects the question of its legality. ' The power to enact by-laws must not be exercised in such a manner as to cause great vexation and un- necessary inconvenience. Such by-law will be deemed unreasonable, and for that reason in conflict with the spirit of the law conferring authority to enact by -laws. ^ Nor can the corporation enforce a by-law requiring formalities so extraordinary as to amount to a material inconvenience in the transfer of shares.^ The imposi- tion of unreasonable restrictions upon the right is not allowed, on the same principle that no rights can be impaired or taken away.* " The unreasonableness of a by-law should be demonstrably shown. Courts in construing by-laws will interpret them to be reasonable if possible, not scrutinizing their terms for the purpose of making them void, nor holding them invalid if every particular reason for them does not appear." ^ 1 Zlystra v. Charleston, 1 Bay, 382; McMuUan v. Charleston, lb. 46. See Barter v. Com., 3 Pen. & W. 253. 2 Mobile V. Tuylle, 3 Ala. 137; Hibernia Fire Engine Co. v. Harrison, 93 Pa. St. 264. 8 Bank of Ky. v. Schuylkill Bank,' Parson's Sel. Cas. 180. « 2 Kyd on Corp., 122. A by-law providing that transfers cduld only be made personally or by attorney and with the assent of the president is contrary to law in restraint of trade and unenforceable. Sargent v. Franklin Ins. Co., 8 Pick. 890. 6 lb. See also Hibernia Fire Eng. Co. v. Harrison, 93 Pa. St. 264. A by-law of a benevolent association providing as a penalty for the non-payment of dues that a delinquent member should forfeit his right to any benefits while in arrears, and for a period of three months after the payment of arrears, is invalid because unreasonable, oppressive and detrimental to the interests of the corporation. Cartan v. Father Mathew, etc., Soc, 3 Daly (N. Y. C. P.), 20; Brady v. Coach- man's Benev. Assn., 14 N. Y. S. 272. The same conclusion was reached where a by-law provided that every stockholder neglecting to pay his monthly dues and interest " shall forfeit and pay the additional sum of ten cent's monthly on each and every dollar due by him.'' Such by-law allowed to be enforced gave authority to impose a fine that is cumulative, i.e., to be imposed upon the aggre- gate amount of all money due at the end of each month, no matter for what cause, and, as such, it was oppressive, extortionate, and unreasonable, and therefore invalid. Lynn v. Freemansburg Building & Loan Ass'n, 117 Pa., 1; 11 A. 537. § 406 CONTKOL BY MEANS OF BY-LAWS. 439 § 405. Power given by law to enforce conditions. — A cor- poration may be empowered by its charter to not* only regulate but control the transfer of stock, and to enact by-laws prescribing the conditions to be complied with in order to constitute a valid transfer ; and when so empowered, it may refuse to register transfers made otherwise than in the manner pointed out. But the purpose for which such power is vested in the corporation should be considered in construing by-laws providing for its exercise. If a by-law amounted to a virtual prohibition upon the transferability of shares, as if it assumed to prescribe the consideration for the transfer or to designate to whom it should and should not be made, it would be void. The power conferred to regulate and control the trans- fer is conferred for the convenience and protection of the corporation, and no restraints beyond those that are necessary for these objects should be allowed. It is both convenient and necessary that the officers should have a record by which to legally test all claims of membership as against itself, for purposes of making assessments, holding elections and paying dividends ; but it is not necessary for its protection in these matters that one person in preference to another should be entitled to these privileges and be subject to these bur dens. 1 § 406. Must not be in restraint of trade.— The right of •alienation is an incident of ownership of property. All laws limiting or qualifying the free transfer of title to property, whether personal or real, in the United States ^re looked upon unfavorably, and by-laws of corporations I Tor authorities and full decisions of validity and effect of by-laws regu- lating transfers of stock, see infra, Ch. XIX. 440 CONTROL BY MEANS OF BY-LAWS. § 40T having that object in view or that eflfect are void a& against public policy.^ The common law guaranteed to every man the right to exercise whatever trade he pleased, and courts in protecting that right nullified not only by-laws but charters of corporations.^ Most of the questions that have come before the courts, contesting the validity of by-laws on the ground that they were in restraint of trade, have been those of municipal corporations. But a distinction must be observed between a reasonable regulation of trade and a restriction imposed on it, whether introduced in a by- law of a private trading company or in a municipal ordinance. Those of the first kind are, if otherwise objectionable, generally held to be good ; while those of the latter are universally held to be void ; but it is often difficult to determine to which class they ar& assignable.^ § 407. Must not be in restraint of personal liberty. — Very similar to the objection to a by-law that it is in re- straint of trade, is that successfully argued in the case^ of the tailors of Ipswich.* Corporate powers were conferred upon the tailors and cloth workers of Ipswich, with authority to make reasonable by-laws. Among the by-laws adopted was 1 Tailors, etc., v. Ipswich, 11 Eep. 53; Butcliers' Benev. Assoc, 35 Pa. St. 151 ; People v. Benev. Soc, 3 Him (N. Y.), 361 ; People v. N. Y. Board of Underwriters, 54 How. Pr. 340; Sayre v. Louisville M. Benev. Assoc, 85 Am. Dec. 613; Heskith v. Braddook, 3 Burr. 1858; Moore v. Bank of Com- merce, 52 Mo. 377; Clark v. Lecren, 9 B. & C. 52; Mayor v. Yuille, 3 Ala. 137; Cal. St. Nav. Co. v. Wright, 65 Am. Dec. 511; Goddard v. Merch. Ex., 9 Mo. App. 290 ; s. o. 78 Mo. 609 ; Chamberlain, etc. v. Compton, 7 D. A director Is an " officer " within the meaning of one section of an act containing another section which requires that the annual report shall be signed by the president and a majority of the directors. Brand v. Good- win, 29 N. Y. St. Rep. 143; 8 N. Y. S. 339. § 416 POWERS AND DUTIES OF DIEECTOKS. 449 and the organization of the board are usually provided for and prescribed by statute in the states where cor- porations are created by general law. Where chartered by special acts, these must be consulted for information in each particular case^ § 416. Qualifications — The directors are usually re- quired to be shareholders ; but when neither the articles of incorporation nor the statute prescribe it, it is not necessary.! Where the ownership of shares is required, it is held to be complied with, if the party is the legal owner.2 1 state V. McDaniel, 22 O. St. 354; Ke British, etc., Ass'n, L. B. 5 Ch. D. 306. In Connecticut stockholders who are stockholders in other corpora- tions are ineligible as directors. Chase v. Tuttle, 55 Conn. 455; 12 A. 874. 2 It was held that though the owner had mortgaged, his stock, he had not thereby become disqualified, Cunning v. Prescott, 2 Younge & C. 488, that persons not interested, but attempting to qualify themselves by fraudu- lently receiving to themselves transfers of stock, were not eligible. Bar- tholomew V. Bentley, 1 0. St. 37. But see State v. Leete, 16 Nev. 242 ; Statfe V. Houston, 28 Vt. 595. To same effect is People v. Eobinson, 64 Gal. 373. Comp. Laws N. D. § 2926, provides that, to be a director of a corporation, one must be the holder of stock, and section 2915, that a transfer not en- tered on the corporate books shall not be valid for any purpose except be- tween the parties. Held, that an assignee of stock not transferred on the corporate books was not eligible as a director, though the company had wrongfully refused to make the transfer. In re Argus Printing Co. (N. D.), 48 N. W. 347. As to a director ceasing to be a stockholder and continuing to act, see San Jose, etc., Bank v. Sierra Lumber Co., 63 Gal. 179. One to whom unregistered transfer had been made held eligible. State v. Smith, 15 Or. 98 ; 15 P. 386. A person having acted as one of the trustees of a corporation with the knowledge and consent of stockholders, the latter were held to be estopped from questioning his eligibility for the purpose of defeating a petition for the dissolution of the corporation on the ground that it was not signed by a majority of the trustees as required by statute. In re Santa Eulalia S. M. Co., 51 Hun, 640 ; 4 New York Supp. 174. Relator was elected a manager at a meeting at which there was not a majority of the managers, and was afterwards deposed, and brought mandamus to be restored. Held, that the fact that relator was elected secretary of the board, a position to which a manager only was eligible by the by-laws, could not legalize his election as manager. People v. New York Infant Asylum, 122 N. Y. 190; 25 N. E. 241. 29 450 . POWERS AND DUTIES OP DIRECTORS. §§ 417, 418" Directors are often required by statute to be residents of the state where the corporation is created.^ § 417. Directors de facto. — Persons though disquali- fied may bind the corporation as de facto directors. Within the scope of their authority, they have the same authority while in office as directors dejure.^ § 418. Acceptance of office. — In the absence of an ex- press declaration or any statute or controlling usage to the contrary, one elected a director is presumed ta accept.3 A long- continued neglect, however, to perform any duty as a director is equivalent to an abandonment of the office.* 1 An alien •who had for many years been a resident and property holder In Penn. may be legally elected a director, if not expressly made ineligible- by the charter. Com. v. Detwiler Com., 131 Pa. St. 614; 18 A. 990. In Oregon a minority of directors in canal and railroad companies are allowed to be non-residents. State v. Smith, 15 Or. 98. Where a constitutional pro- vision required " a majority of directors of any railroad corporation non-in_ corporated or hereafter to be incorporated by the laws of this state" to be citizens of Illinois, it was held that upon the consolidation of a domestic- with a foreign railroad corporation under subsequent concurrent acts ot the legislature of that and other states, the constitutional provision did not apply to the consolidated corporation. Ohio & M. By. Co. v. People, 121 111. 483 ; 14 N. E. 874. 2 Despatch Line v. Bellamy Mfg. Co., 12 N. H. 205 ; Rockville Tump. Eoad V. Van Ness, 2 Cranch C. C. 449; Ellis v. N. C. Inst., 68 N. Car. 423. Under a statute requiring directors to be stockholders, a director who- had sold all his stock, and had been superseded at a special stockholders' meeting held pursuant to notice, was decided not to be even a de facto di- rector. Beardsley v. Johnson, 121 N. T. 224 ; 24 N. E. 380. Persons are not entitled to recognition as directors df, facto who claim at a meeting irregu- larly called and illegally ootiducted, and against another board holding over by virtue of a previous election, about which no question is raised. Ells- worth, etc., Mfg. Co. V. Faunce, 79 Me. 440; 10 A. 250. See In re Santa Enfalia S. M. Co., 4 N. T. S. 174. 3 Lockwood V. Mich. Kat. B'k, 9 E. I. 308; Kimmons v. Tappan, 2 Sweeney, 652. Contra, Blaker v. Bayley, 16 Gray, 531. * Orr. Water Ditch Co. v. Reno Water Co., 17 Nev. 166. In this case respond. ent, the Reno W. Co., had sold all its property and closed up its affairs in March, 1876, and though its directors did not resign, they did not act as trustees, or do any corporation business until June and July following, when a majority § 420 POWERS AND DUTIES OF DIBECTORS. 451 § 419. Term of office. — The period of incumbency of directors is generally fixed by statute or in the by-laws, or both. Where no term of office is prescribed, they hold until resignation or death, or their authority is revoked by action of the members, duly assembled. Until their successors are duly elected and qualified they are officers dejure} § 420. Express powers — The powers contained in the articles or act of incorporation, general laws and by- laws must be considered in the light of so many dele- gations of authority in the nature of powers of attorney, and the general principles applicable thereto apply here. Where their powers are thus specifically defined, they cannot claim, in respect to them, the liberal com- mon law powers of directors ; ^ nor can they where they are thus limited enact 5,ny by-laws enlarging their au- thority,^ In all matters concerning which their author- ity is not circumscribed, they may exercise all the powers of the corporation by virtue of its constating or incorporating instruments, and in addition thereto, those conferred in the by-laws and those implied from the nature of the duties devolving upon them. They are the agents of the corporation ; that is to say, when acting as a board, their province and office of them met and allowed on account, and drew a check for the amomit in favor of appellant (the Orr. Ditch Co.), it was held in an action to enforce this claim; against the stockholders of the Keno Company, that at the time this check was drawn, the persons claiming to be trustees and officers of the Eeno Company were not such, either de jure or de facto and the corporation could not he held liable for their act. 1 See Nathan v. Tompkins, 82 Ala. 437; 2 So. 747; Cassell v. L. H. & P. Tp. K. Co. (Ky.), 9 S. W. 701; Post Express Pr. Co. v. Coursey, 57 Hun, 585; 10 N. T. S. 497. Merely selling all his stock and informing the secretary that he ceased all connection with the coi-poration, held not to constitute resignation. Chemical Nat. Bank v. Colwell, 29 N. Y. St. Kep. 729; 9 N. T. S. 285-8. 2 Fleckner v. B'k of U. S., 8 Wheat. 338. 3 Wilson V. Myers, 10 C. B. (N. S.) 348; Spear v. Ladd, 11 Mass. 94; North- ampton Bank v. Smith, 2 Cow. 579. 452 POWERS AND DUTIES OP DIEECTOES. § 422 is that of a collective agent. Under their expressly- delegated authority, they may do whatever a liberal construction of the terms of the instruments conferring it allow. Such instruments are liberally construed in favor of the directors, but with due consideration for the best interests of the corporation. Where the general powers of a corporation are en- trusted to the directors, they may, unless restricted, do whatever the corporation itself might do, and by virtue of such general powers may sell all the corporate prop- erty.^ But unless expressly authorized by law to do so, they have no right, even under such general au- thority, to dispose of the corporate franchises. Under statutes vesting them with all the corporate powers, it is held that they constitute the corporation for all purposes of dealing with others. " Being the mind and soul of the corporate entity, what they do as its representatives the corporation itself is deemed to do."2 § 421. Statutory prohibitions and limitations.— Prohibi- tions are usually designed and framed for the protection of shareholders as well as the public, and directed against the declaration and payment of dividends and contracting of indebtedness, and making reports not justified by the financial condition of the corporation. ^ § 422. By-laws made by — General statutes and charters 1 See Wood V. Bedford, etc.,K. K. Co., 8 Phil. (Penn.) 94; Miners' Ditch Co. V. Zellerbach, 37Cal. 543; People v. P. & T. of C. 38Cal. 166; Martin v. Zeller- bach, Id. 318. ' Compare Abbott v. Hard Kubber Co., 33 Barb. 579. " The di- rectors are competent to make any contract necessary or proper to enable the corporation to accomplish the purposes of creation; its expediency is a matter for their sole determination, and, if they act in good faith, their contracts are valid." Park v. Grant Locomotive Works, 40 N. J. 30, 114; 3 A. 162. 2 Maynard v. Fireman's Fund Ins. Co., 34 Cal. 48. 8 For a further discussion of statutory prohibition and liabilities, infra, Ch. XXX III. § 423 POWERS AND DUTIES OP DIEECTOES. 453 often provide that the members at a corporate meeting may, by the same vote or by the same method as that by which they may enact a code of by-laws, confer authority to amend and repeal them and enact additional by-laws upon the directors. The power may, at any time, be revoked by the same power and by the same majority as that by which it was delegated, notwithstanding a provision in the origi- nal resolution to the contrary.^ While vested with general authority to enact by-laws, the directors may adopt such as they deem proper within the powers of the corporation, and subject to no other limitations than those imposed on the latter by the general law or in the constating instruments. But the corporation may limit the authority it confers upon directors to enact by-laws, and in that case their scope of authority will be still further narrowed ; 2 and, if they accept office under a contract regulating the dis- position of profits, they can dispose of them only as directed by the contract.^ § 433. Implied powers — In addition to the express powers conferred upon directors by the articles, by-laws and general laws, there are others derived by necessary implication therefrom. "When not expressly prohibited, or the power is not delegated to others or reserved to the shareholders, directors may do any act in further- ance of the ends of the corporate creation.* They may 1 Smith V. Nelson, 18 Vt. 511. 2 Stevens v. Davidson, 18 Gratt. 819. A majority of the directors of such number as constitutes a quorum must concur in adopting or enacting by-laws, as in other matters. Wilcock's Case, 7 Cow. 402; Cahill v. Kalamazoo Ins. Co., 3 Mich. 124, supra. ^ Park V. Grant Locomotive Works, 40 N. J. Eq. 114. * Maynard v. Fireman's Fund Ins. Co., 34 Cal. 48; Ry. Co. v. AUerton, 18 Wall. 233; Bank of Middlebury v. Rutland, etc., Ry. Co., 30 Ver. 159; Smith v. Poor, 3 Ware, 148; Wright v. Oroville M. Co., 40 Cal. 20; Bedford By. Co. v. Bowser, 48 Pa. St. 29. 454 POWEES AND DUTIES OF DIRECTORS. § 423 fix the salaries of the officers and agents.^ From the very nature of the general authority to represent and act as the corporation, by far the greater part o*f their powers are implied. Being general agents, subject only to the restrictions and limitations imposed by the fundamental law of its creation, they have a very wide range of discretion in the choice of means and agencies for the accomplishment of its main objects. But they possess no powers by implication not necessary for an economical and successful prosecution of the purpose of the institution, nor can they divert their efforts or its capital to enterprises not comprehended within the terms of its constating instruments. On account of the vast increase in the number of • corporations and purposes for which they are formed in this country, and the necessity for the exercise by their officers and managing boards of wide discretionary powers, courts of the present period incline to deal with them very liberally, both in construing their express, and in granting their implied, authority. In doing so, they have to a certain extent relaxed the former rule on this subject. At an earlier period, they were reluctant to concede powers to the directors beyond a strict con- struction of the charter and by-laws.^ 1 Waite V. Windham County Min. Co., 37 Vt. 608. See also, St. L. F. S. & W. K. Co. V. Tierman, 37 Kan. 606; 15 P. 644; Stewart v. St. L. Ft. S. & W. E. Co., 41 F. 736; holding that compensation maybe fixed and allowed long after the services were rendered and without a previous contract of employment. Archer v. People's Sav. B'k, 88 Ala. 249; 7 So. 53; Eq., etc., Assn. v. Fisher. *71 Md. 480. But there must be either a contract or acceptance of the services rendered. Mather v. Eureka Mower, Co., 118 N. Y. 629; 23 N. E. 993. 2 Whitewell v. Warner, 20 Vt. 425. See also Augusta Bank v. Hamblelt, 35 Me. 491; Dispatch Line, etc., v. Bellamy, Mf'g Co., 12 K. H. 22.5; Bank of Middlebury v. Egerton, 30 Vt. 182; Miller v. Rutland, etc., Ry. Co., 36 Vt. 425; Hoyt V. Thompson, 19 N. T. 207 ; Gordon v. Preston, 1 Watts, 385 ; Shaver v. Bear River & Auburn Water & Min. Co., 10 Cal. 396; People v. La. Rue, 67 Cal. 526; Cal. State Tel. Co. v. Atl. Tel. Co., 22 Cal. .398, 621; Parker v. Bernal, 66 Cal. 112; 4 P. 1090, Sullivan v. Triunfo, G. & S. Co., 29 Cal. 586; '§ 424 POWERS AND DUTIES OF DIRECTORS. 455 § 424. How powers may be exercised Where the cor- porate powers are committed to the board the directors cannot act as such except when assembled as a board.i If authorized to do an act by the board, a director has only the authority of any other agent similarly author- ized.^ The directors may act as a board at a regular meet- ing, if the prescribed quorum is present, whether there has been any call for a meeting or not.* But it would "Cashwiler v. Wills, 33 Cal. 11; Bliss v. Kaweah, C. & C. Co., 65 Cal. 502; :Selley V. San Jose, J. M. & B. Co., 59 Cal. 22; Donohoe v. Mariposa, V. 21.5; People v. O'Brien, 111 N. T. 1. See infra, § 842. 2 Havemeyer v. Sup. Ct., 84 Cal. 327; 24 Pac. Rep. 121. ' Green v. The Mayor, 2 Hilton, 203, 209; People v. White, 59 Bard. 666; In re Woven Tape, etc., Co., 8 Hun, 508. The deed of trust of an insolvent corpo- ration providing that the unpaid subscriptions shall be payable to the trustee, the right to collect the same passes thereby, and they may be enforced in a suit 470 POWEKS AND DITTIES OF DIKECTOES. § 436 benefit of creditors of a national bank the authority of its officers ceases.^ § 436. Compensation. — Directors are subject to the general rule governing trustees, which is, that in the absence of some provision to that effect in the by-laws or an express contract, they are not entitled to pay for the performance of official duties.'^ When officers have been chief promoters of a corporate enterprise, their interest in the stock and other incidental advantages justify a presumption that the promotion of their own interests is the motive for the exercise of official duties, and this presumption prevails until overcome by evi- dence of an express pre -arrangement for salary.^ But , for that purpose. Hamilton v. Glenn, 85 Va. 901; 9 S. E. Rep. 129. The board of directors of a corporation may authorize an assignment by a corpora- tion under the Minnesota insolvency act of 1881 when the conditions specified in the act exist. Tripp v. N. W. Nat. B'k, 41 Minn. 400. See also Same v. Seeley 41 Minn. 404. After directors of a corporation have transferred all its property to a trustee for the purpose of securing creditors they have no right to continue the business nor can they authorize the trustee to do so. Eendell v. Bishop, 76 Mich. 634; 43 N. W. 645. , 1 Shrader v. Mngrs. Nat. B'k, 133 U. S. 67; Peters v. Bain, 133 U. S. 670. ■■' Loan Ass'n v. Stonenietz, 29 Penn. St. 534; Utica Ins. Co. v. Bloodgood, 4 Wend. 652; New York, etc., E. E. Co. v. Ketchum, 27 Conn. 170; State v. People's Mut. Ben. Ass'n, 42 O. St. 579; First Nat. B'k v. Drake, 29 Kan. 311; Hodges V. Rutland E. R. Co., 29 Vt. 220; Chandler v. Monmouth B'k, S N. J. Eq. 101, 255. But in Hedges v. Pacquett, 3 Or. 77, it was held that, if not prevented by the by-laws, directors may fix their own compensation. See also Giensboro & N. C J. Tp. Co. v. Stratton, 120 Ind. 294; 22 N. E. 247. An at- torney who was also a director and who rendered valuable services in both capacities was held entitled to recover reasonable 'compensation. Ten Eyck v. P. O. & P. A. K. Qo., 74 Mich. 226: 41 N. W. 905. / " Kilpatrick v. Penrose Ferry Bdg. Co., 49 Pa. St. 118. See Citizens' Nat. B'k V. Elliott, 55 la. 104; Merrick v. Peru Coal Co., 61 111. 472; Cheney v. La- fayette, etc., E. E. Co., 68111. 570; Burns v. Beck, 83 Ga. 471; 10 S. E. Eep. 121; In re Lafayette E. Co., 87 111. 446; Holder v. Same, 71 111. 106; Santa €lara Mfg. Ass'n v. Meredith, 49 Md. 389. The services of a director in efforts to form another corporation in another state in pursuance of an official arrange- ment between himself and the other directors, without any agreement as to re- numeration and for general corporate advantage, were held not to entitle him to pay for the same. Eakins v. Am. White Bronze Co., 75 Mich. 568; 42 N. W. «82. See also Ellis v. Ward (111.), 25 N. E. Rep. 580. -§ 436 POWERS AND DUTIES OF DIRECTORS. 471 a corporation may, by contract or by-law, provide for the compensation of an oflBcer or director for life, or until dissolution of the corporation.^ A distinction must be kept in view between those services purely official and those performed under contract or resolution of the board, employing and authorizing them as agents. In the latter case even though no compensation be stip- ulated for, the law will infer a contract on the part of the corporation to pay a reasonable sum.^ Services are often needed requiring mechanical skill, and if, in this case, the qualifications are possessed by a member of the board, there is no good reason why he should not be employed. So, it may happen that the business of the corporation requires attention at a long distance from the location of its principal business. In this case, it might also be very inconvenient and expensive for the whole board to attend. Under such circumstances as these, it is legal and proper that the board should constitute one of its members an agent, and ••compensate him for his, services and necessary expense.' But where the services were strictly official, though '€x;traordinary, and not provided for by contract or 1 People V. Globe Mut. Ins. Co., 91 N. T. 174. 2 Shackleford v. New Orleans, etc., K. R. Co., 37 Miss. 202; Rogers v. Hast- ings, etc., R. R. Co., 22 Minn. 25; Chandler v. Monmouth B'k, 1st Green (N. J.), "2.55; Lafayette, etc., R. Co. v. Cheeney, 87 111. 446; .Tones v. Morrison, 1 Am & Eng. Corp. Gas. .313-326; Ward v. Davidson, 14 lb. 73; Ten Eyck v. Pontiac O. & P. A. R. Co., 74 Mich. 226; Grensboro & N. C. J. Tump. Co. v. Stratton, 120 Ind. 294. " One who has performed services for a corporation has a right of action against it, though lie is one of its trustees." McDowall v. Sheehan, 1.3 ISr. Y. S. 386. The director of a construction company who acts as superin- tendent, treasurer and general manager, performing, with the knowledge of the company, services not pertinent to his office as director, can recover the reason- able worth of the services. Fitzgerald & Mallory Oonstr. Co. v. Fitzgerald, 11 S. Ct. 36. A general manager was allowed to recover compensation for services rendered where such services were defined in the by-laws. Kryger v. Ry. Track, .letc, Co. (Minn.), 49 N. W. 2.55 (August, 1891). ^ Chandler v. Monmouth B'k, 1 Greene (Jf. J.), 255. 472 POWERS AND DUTIES OF DIEECTOBS. § 437 resolution, it was held that the director performing^ them could not recover compensation.^ And the board cannot, in such cases, by resolution or otherwise, create a debt against, the corporation for past services.^ A resolution of trustees voting pay to themselves for past services is void as a corporate act. § 437. President may be compensated.— But directors may, by resolution, provide for pay of president pur- suant to an understanding to that effect. He will not be entitled to recover for such services until the directors take the necessary action ; ^ nor then if they do not act before the corporation is adjudged insolvent.* Such resolution may cover past services, and when properly recorded is a contract in writing, ^ Officers, the very 1 Am. Cent. K. E. Co. v. Miles, 52 111. 174; Maux Ferry Gravel R. Co. v. Bramegan, 40 Ind. 361; Collins v. Godfrey, 1 Bam. & Aid. 590. 2 Loan Ass'n v. Stonemetz, 29 Pa'. St. 534. 3 Barril V. C. I. & W. P. Co., 50 Hun, 257; 2 N. Y. S. 758; Martindale v. Wilson-Cass. Co., 134 Pa. St. 348. It was held that they can only act by resolu- tion which must be adopted previous to the^ rendering such services, and that the president cannot recover on a resolution subsequently adopted. Ellis v. Ward (111.), 25 X. E. 530. Contra, Reed v. Hoyt, 109 N. Y. 659; 17 N. E. 418; Grundyv. Pine Hill Coal Co. (Ky.), 9 S. W. 414. Where the resolution of a cor- poration, appearing in the minutes, recites that the salary of the president shall be " fixed at the rates allowed during the past year, viz., $1.50," it Is an admis- sion by the directors that the salary was so fixed for the preceding year, and is competent evidence to prove that fact. Smith v. Woodville Con. S. M. Co., 66- Cal. 398; 5 P. 688. < McAvity v. Lincoln P. & P. Co., 82 Me. 504; 20 A. 82; Wood v. L. L. & C. Mfg. Co. (Or.), 23 P. 848. A contract may, however, be implied from cir- cumstances. Bartlett V. Mystic Rlv. Corp. 151 Mass. 433; 24 'N. E. 780; Ind. E. R. & S. W. R. Co. V. Hyde, 122 Ind. 188; 23 N. E. 706. But there must be proof of services outside of mere official duties. Graves v. Mono Lake Min. Co., 81 Cal. 303. 6 Rosborough v. The Shasta R. C. Co., 22 Cal. 557. But see Ellis v. Ward (111.), 25 N. E. 530. In this case the president of a corporation, who had served without agreement as to pay, sold his stock to three persons, who thereby acquired control of the corporation, and made themselves directors. They then voted a sum of money to the president for his past services, and paid the money to him in part consideration for their stock. It was held that they were liable- for said sum to the receiver of the corporation, since the president was not en- § 437 POWERS AND DUTIES OF DmECTORS. 473" nature of whose employment involves constant atten- tion and labor, as in the case of business managers and secretaries, probably could recover reasonable com- pensation on a quantum meruit, even in the absence of a stipulation as to salary. The right to do so by agents other than officers has never been questioned. ^ titled to salary. Though a vote of the directors of a corporation fixing the treasurer's salary at a certain sum has been recorded in the minutes, in an ac- tion for such salary parol evidence is admissible to show that, at the time the vote was passed, it was understood that it was not to be binding unless negotia- tions then pending were successfully concluded, which would enable the cor- poration to comply with the terms of its charter, and to begin operations. Sears v. Kings County El. E. Co. (Mass.), 25 N. E. 98. Where plaintiff's com- plaint states a single cause of action, a debt due from a defendant corporation to plaintiff as holder and owner of bonds of the corporation, he cannot, having - accepted the bonds as compensation for his services as president, recover the amount of his salary as such. Kirkland v. Kille, 99 N. T. 390; 2 N. E. 36. 1 It was held in the case of a director who also acted as treasurer that he was not entitled to compensation ; but the court said if the services had been per- formed by a new stockholder or other person not connected with the directory, it would have been otherwise. Holder v. Lafayette, etc., R. R. Co., 71 111. 106; s. c. 22 Am. R. 89. See First Nat. Bank v. Darke, 29 Kan. 311. Acting as secretary after being elected to that position, though neither a director nor a stockholder, was held to raise a prima facie obligation upon the company to make compensation, and it was held unimportant that plaintiff omitted to present his claim for five years and until superseded, in the absence of clear evi- dence that the services were to be gratuitous. Smith v. Long Island K. Co.,, 102 N. Y. 190; 6 N. E. 397. 474 PAETICIPATION IN PROFITS. §§ 438, 439 CHAPTER XVIII. PABTICIPATION IN PROFITS. — DIVIDENDS. § 438. The main object. 439. Dividends defined. 440. Meaning of "profits," "net profits," "net earnings," "surplus," etc 441. Duty of directors with respect to dividends. 442. When a court of equity will order a dividend paid. 443. Capital stoclc cannot be impaired. 444. The nature of the investment important. 445. Discretionary power of directors to provide for future maturing liabili- ties. 446. When dividend becomes property of shareholder. 44t. Delay in making demand. 448. Converting surplus into working capital. 449. Profits must be distributed impartially. 450. Preference may be given by statute articles or by-laws. 451. Where there is a subsequent acquiescence to a preference given to a part. 452. Payment of dividends in scrip. 453. Distinction between new allotment and scrip dividend. 454. Usually payable in cash. 455. Guaranteed dividends. 456. Conditioned upon'the earning of profits. 457. Eight to dividends as between life tenant and remainderman. 458. How far intention of testator controls. 459. The New Jersey rule. § 438. The main object — The main, and generally ihe sole, object in taking stock in a capitalized corpo- ration is participation in the profits of the enterprise in the form of dividends. § 439. Dividends defined — The term dividend may mean either the aggregate fund out of which profits from a corporate enterprise are paid to the shareholders collectively, or it may mean the share of the fund apportioned to an individual stockholder. Thus we say :§'439 PARTICIPATION- isr profits. 475 that a dividend has been declared by such and such a company, meaning that there is a sum derived from its business not needed for expenses to which the share- holders are ratably entitled ; and we speak of a share- holder being entitled to a dividend, by which we mean that he is entitled to a definite part of a certain profit fund. In a larger sense a dividend is money paid out of profits by a corporation to its shareholders, whether the amount be great or small, or whether made at long or short intervals, regardless of the manner or place of payment.^ The interest of each stockholder consists in the Tight to a proportionate part of the profits whenever dividends are declared by the corporation during its existence under its charter, and to a like proportion of the property remaining upon the termination or dissolu- tion of the corporation after payment of its debts. ^ But a dividend representing profits and payable in cash or shares of increased stock is not a mere sub- stitute for a stock dividend when the stockholder is at liberty to sell his right to subscribe for the new stock. ^ Thus it is seen that the term " dividends " is not to l)e applied to the stockholders' share upon final dis- tribution, but only to the surplus income ascertained 1 Taftv. Hartford, etc., E. Co., 8 K. I. 33; Clarkson v. Clarkson, 18 Barb. N. T. 657. The term dividend is used to signify something to be paid by cor- porations not insolvent. Scott v. Eagle Ins.. Co., 7 Paige (IT. Y.), 198; Karnes v. Eochester, etc., E. Co., 4 Abb. Pr. N. S. N. Y. 107; Gordon's Extra v. Eich- mond, etc., E. Co., 78 Va. 501. For other definitions seePenn. v. Erie, etc., E. Co., 10 Phila. Pa. 466; Bouv. Law Diet.; Williston v. Mich, etc., E. Co., 13 Allen (Mass.), 404; Osgood v. Laytin, 3 Keys (N. H.), 523. 2 Gibbons v. Mahon, 136 U. S. 549, per Justice Gray. » Davis V. Jackson (Mass.), 25 N. E. 21. Van Allen v. Assessors, 3 Wall. 573, 584; Delaware E. E. Tax, 18 Wall, 206, 230; Tennessee v. Whitworth, 117 U. S. 120, 136; New Orleans v. Houston, 119 U. S. 265, 277. 476 PARTICIPATION IN PROFITS. § 440 and paid from time to time in a live and going con- cern.^' § 440. Meaning of " profits," " net profits," " net earn- ings," "surplus," etc. — The duties of directors in the first place, and the jurisdiction of a court of equity when appealed to by a shareholder after a breach of duties by them on a question of dividends, are generally deter- mined by the definition attached to the term dividend in the given case. Charters and articles of incorporation often empower or limit the power of directors to declare dividends, and direct that such dividends shall be paid only from a particular fund variously designated as " profits," " net profits," " net earnings," " surplus profits," or equivalent words. These terms have received con- struction by the courts from time to time. "Profits" and " net earnings " are the terms most frequently used. They are convertible and denote the excess of receipts over expenditures.^ 1 Lockhart v. Van Alstyne, 31 Mich. 76. 2 Connelly V. Davidson, 2 Sneed. Tenn. 452. "Profits" and "net profits" are substantially synonymous expressions; but the aggregate returns are often called."gross profits," and what remains after deducting expen,ses "net pro- fits." These different uses of the term have made it necessary to preserve a dis- tinction. Lindley on Part., 15; Story, Part., sec. 23; Fuller v. Miller, 105 Mass. 103. Passing a resolution that "the report of the assessors of income tax of the profits of last year be made in the individual names of the stockholders and their respective amounts charged to their account when paid," does not con- stitute a division of the profits. Reading Fire Ins. & Trust Co. v. Reading Iron- Works (Pa.), 21 A. 170. Aside from this relative significance which usage has given it, the term " profits " means the gain which comes in oris received from any business investment when both receipts and expenditures are to be taken into account. People v. Supervisors, 4 Hill (N. Y.), 20, but it is not limited to what remains after the payment of every debt, but the excess of ordinary re- ceipts over expenses properly chargeable to revenue account. Mills v. Northern Ry. of B. A. Co., L. R. 5 Ch. 621; Lee v. Neuchatel Co., L. R. 41 Ch. Div. 1; Birch V. Cropper, L. R. 14 App. Cas. 525. Depreciation of buildings in which a business is carried on, although original capital was Invested in their erection, is not usually taken into account in estimating profits. Eyster v. Centennial Bd. of Fin. 94 U. S. 500. § 440 PARTICIPATION IN PEOFITS. 477 The term " net profits " as applied to corporations is the sum remaining to be divided among the stock- holders after discharging or providing for every out- going expenditure properly chargeable against the period, whether long or short, for which the profits are to be calculated ;i in other words, what remains as the clear gains of a business venture after deducting the capital invested, the expenses incurred in its conduct and the losses sustained in its prosecution.^ It would be difiicult to distinguish between the literal meaning of " net profits" and " net earnings." But the latter term has been given a somewhat more restricted definition when applied to railroad management than in other enterprises. In a general sense the term denotes the gross receipts less the expenses of operation and management in earning such receipts. ^ But courts have often required several other kinds of charges, such as interest on bonded indebtedness, to be taken into consideration and deducted before the pay- ment of dividends from the fund.* Within the meaning of an act relating to the dividends which savings banks were authorized to make, " surplus profits" were held to consist of earnings actually received.^ 1 Glazier v. Rolls, L. R. 42 Ch. Div. 453. 2 Park V. Grant Locomotive Works, 40 N. J. Eq. 114; 3 A. 162. Neither the legal nor any rate of interest is to be deducted. There may be net profits amounting to less than the legal rate of interest. Tutt v. Lang, 50 Ga. 339. 3 St. John V. ErieRy. Co., 22 Wall. 146. See also, Bates v. Androscoggin E. Co., 49 Me. 491; Sioux City, etc., R. Co. v. U. S., 110 U.S. 205; Union Pacific R. Co. v. U. S., 99 U. S. 700; Barry v. M. K. & T. E. Co., 27 Fed. Rep. 1. 1 Belfast & M. L. R. Co. v. Belfast, 77 Me. 445; 1 A. 362; Chaffee v. Rutland R. Co., 55 Vt. 110; Taft. v. Hartford, etc., R. Co., 8 R. I. 310. ' 5 People V. S. F. Sav. Union, 72 Cal. 199; 13 P. 498. Compare Williams v. Western Un. Tel. Co., 93 N. Y. 162. Unearned premiums upon policies re- ceived by an insurance company are not surplus profits which the directors are authorized to distribute as dividends. Scott v. Eagle F. Ins. Co., 7 Paige, Ch. (S. Y.), 198. 478 PARTICIPATION IN PROFITS. § 441 § 441. Duty of directors with respect to dividends. — It is to the interest of all creditors and the state, as well as of all solvent shareholders, that the property of a cor- poration shall be preserved intact to fulfil the purposes for which it was formed, and that it shall not be ren- dered insolvent by a division of its earnings when its financial condition does not justify it. Just what that condition is, is sometimes a difficult question to deter- mine. The gross receipts constitute the general fund out of which expenses and net earnings are to be paid, and the first of these has the highel" claim on the fund. The injustice which it is the object of a statute for- bidding dividends being paid from the capital stock or other funds of a corporation than the net earnings to prevent is too apparent to require elucidation. The capital stock of a corporation, like that of a co- partnership or joint- stock company, is made up of the amounts which the partners or associates put in as their stake in the concern. To this they add upon the credit of the company from the means and resources of others to such an extent as their own prudence or the confidence of such other persons will permit. Such additions are held in trust ; they do not form capital. If successful in their career the surplus over and above their capital and debts becomes profits, and is either divided among the partners and associates or used still further to extend their operations. ^ From the nature of the case no definite rules can be established for the guidance of corporate agents in the 1 Barry v. Merchants' Exchange Co., 1 Sandf. Ch. 280. Where a corporation has on hand actual capital available for the payment of debts exceeding the amount to which it has reduced its stock, the excess may generally be distributed among the stockholders. Strong v. Brooklyn C. T. B. Co., 93 N. Y. 426. See Crandall v. Lincoln, 10 Am. & Eng. Cor. Cas. 149; Siegnoret v. Homer Ins. Co. and note, Id. 131, 134; In re Direct Spanish Tel. Co., 16 Id. 377; Baringtyne v» Same, Id. 358. § 442 PARTICIPATION IN PEOFITS. 479' exercise of the important function of declaring dividends and by which the wisdom and good faith of its exercise can be determined afterwards. Courts of equity look carefully into all the attendant circumstances, and, unless it is plainly apparent that the directors have abused their discretionary power to such an extent as to injure the ultimate interests of shareholders or imperil the rights of creditors, refuse to interfere.^ § 44a. When a court of equity will order a dividend paid. — ^But while the general rule is as just stated, yet when the right to a dividend is clear and there are funds from which it can properly be made, and the directors inequi- tably, wantonly or oppressively are using their power, a 1 Hunter v. Boberts (Mich. 1890), 31 Am. & Eng. Corp. Cases, 349; Howell v. Chicago, etc., R. R. Co., 51 Barb. 378; Ely v. Sprague, Clarke's Ch. (N. T.) 351; William v. Western Un. Tel. Co., 93 N. Y. 162; Park v. Grant Locomotive Wks.,, 40 N. J. Eq. 114; Barnard v. Vermont, etc., R. R. Co., 7 Allen, 512; Chaffee v. Rutland R. R. Co., 55 Vt. 110; Smith v. Prattville Mfg. Co., 29 Allen, 503; Barry v. Merchants' Exch. Co., 1 Sandf. Ch. 280; Rex. v. Bank of England, 2' Bam. & Aid. 620; Stringer's Case, L. R. 4 Ch. 475; Browserv. Monmouthshire- Ry. & Canal Co., 4 Eng. L. & Eq. 118. Directors may distribute part and with- hold a part of profits. State v. Baltimore, etc., R. R. Co., 6 Gill. 363; State v. Bank of La., 6 La. 745. An action at law will not lie to compel directors to de- clare a dividend. The remedy is in equity. Karnes v. Rochester, etc., R. R. Co., 4 Abb. Pr. N. S. 107; Carpenter v. N. Y., etc., R. R., 5 Abb. Pr. 277. The courts will not interfere except in a very strong case. State v. Bank of La., supra; Lambert v. Neuchatel Asphalt Co., 51 L. J. Ch. 882. See Dent -f. Lon- don Tramways Co., 50 L. J. Chan. 190; s. c. L. R. 16 Chan. Div. 344; Davidson V. Gilliss, Id. 182. Nor can the free exercise of this discretion of the directors be forestalled or interfered with by or on account of the contracts of promoters or original incorporators with respect to the disposition of profits. Coyote, etc., Co. V. Ruble, 8 Or. 284. See Richardson v. R. R. Co. , 44 Vt. 613. In Hunter v. Roberts (Mich.), 31 Am. & Eng. Corp. Cas. 349, 356, the court said: " Courts of equity will not interfere in the management of the directors unless it is clearly made to appear that they are guilty of fraud or misappropriation of the corpo- rate funds, or refuse to declare a dividend when the corporation has a surplus of net profits which it can without detriment to its business divide among its stockholders, and when a refusal to do so would amount to such an abuse of discretion as would constitute a fraud or breach of that good faith which they are bound to exercise toward the stockholders." 480 PARTICIPATION IN PROFITS. § 442 court of equity will interfere to compel the company to declare a dividend.^ It is not indispensable that a company be free from the pressure of floating debt before a court of equity will compel it to pay a dividend even to holders of non-preferred stock.^ A somewhat different rule ap- plies with respect to the right of preferred stockholders to have a dividend declared, and a court of equity will sometimes entertain a bill by them under circumstances which would not warrant interference on behalf of a holder of common stock. The question is one upon which the decision of the directors is not conclusive, but will be reviewed by the court.^ 1 Belfast & M. L. K. Co. v. Belfast, 77 Me. 445; State v. Bank of La., 6 La. 745; Willlston v. Mich. So. & No. Ind. R. Co., 13 Allen, 400; Scott v. Eagle F. Ins. Co., 7 Paige, 203; Boardman v. Lake Shore & M. S. R. Co., 84 N. T. 157; Stevens v. S. Div. Ry. Co., 9 Hare, 313; Jermain v. Lake Sjjore & M. S. R. Co., 91 N. Y. 483; Pratt v. Pratt, 33 Conn. 448; Beers v. Bridgeport Spring Co., 42 Conn. 17; Brown v. Buf., etc., R. R. Co., 27 Hun, .342. Courts of equity will never hesitate, in a plain case of neglect and refusal on the part of directors, the finances of the corporation justifying it, to compel directors to pay a divi- dend to preferred sh^^reholders who are equitably entitled to it. Hazeltine v. Belfast & M. L. R. Co. , 79 Me. 411 ; 10 A. 328. And directors will be compelled to declare a dividend and sale of all the corporate property. Cramer v. Bird, L. R. 6 Eq. 143. ^ Hazeltine v. Belfast & M. L. K. Co., 79 Me. 411. An action at law will not lie against a corporation by a stockholder for its refusal to declare a dividend. Karnes v. Rochester & G. V. R. Co., 4 App. Pr. (N. T.) N. S. 107- 8 Hazeltine V. Belfast, etc., R. Co., 79 Me. 411; Henry v. Gt. N., etc., Ey. •Co., 4 E. & J. 1 ; Boardman v. Lake Shore, etc., E. Co., 84 N. Y. 157, 180; Bel- fast, etc., E. Co. V. Belfast, 77 Me. 445. In the last case the court say: "It does not necessarily follow that debts should be wholly paid before a dividend is disclosed merely because they are of a floating character. When the right to a dividend is clear and there are funds from which it can properly he made, a some insurmountable obstacle or unforeseen event.^ It is clear that no record is necessary to perfect the trans- fer of stock unless it is required by the charter or by- laws of the corporation.^ After such assignment and application to the proper agent of the company, the original holder of the shares ceases to be a member of the corporation, and its hold- ing him out as a stockholder is a misrepresentation in which he cannot be charged as a participant ; nor does the doctrine of estoppel apply in such case. For the same reasons, the assignee becomes legally and equi- tably substituted for him to all the benefits and liabil- ities with respect to the shares from the date of the assignment.^ A corporation is not bound with constructive notice of actions pending between the parties concerning the ownership of shares. And it seems that, though it be a party to such action, it may still recognize the legal owner for the purpose of making atransfer on its books without incurring liability to the other party, if the latter should finally prevail in the litigation.* 1 Wells V. Rodgers, 60 Mich. 525; Telford & P. Tp. Co. v. Gerhab (Pa.), 13 A. 90, holding also that the company is liable to the injured party in damages for such refusal. As to what constitutes proper effort on the part of the stock- holders, see Harpold v. Stobart, 46 Ohio St. 397 ; 21 N. E. 637. In Choteau Spg. Co. V. Harris, 20 Mo. 382, 390, the court said:—" An assignment in writing is sufficient between the parties; and if it be notified to the company and they will not allow it to be made according to their by-law, it is as valid against them as if the required formalities had been observed; the courts acting on the prin- ciple as between these parties of considering that done which ought to have been done and settling the rights of parties accordingly." Where a company had adopted no by-law regulating transfers and kept only a single book of stock certificates in which was entered a memorandum of transfer, this was held suflfl- cient to charge subsequent creditors and purchasers with notice. Fisher v. Jones, 82 Ala. 117; 3 So. 13. 2 Sales V. Bates, 15 R. I. 342; 5 A. 497. 3 Infra, § 796. * In an action to recover certain shares of stock in a corporation, in which the corporation was made a defendant, judgment was rendered for plaintiff against the other defendants for the stock or its value, and restraining the cor- •506 TRANSFER OP MEMBERSHIPS. §§ 466, 467 § 466. Transfer to insolTent invalid. — The requirements of good faith and fair dealing also operate to render nugatory a transfer by a shareholder to an insolvent to escape liability to creditors.^ Such transfer is fraudulent as against either a cred- itor whose claim would be defeated if it shovdd be al- lowed to stand, as well as against the other shareholders upon whom the loss must otherwise fall. So where shares are taken by the management in a fictitious name or in the name of an insolvent and irresponsible party for the purpose of swelling the apparent number of shareholders, the real owner or subscriber would be held liable personally under the name he has assumed.^ § 467. Eight of a transferee to sue and share in results of suit. — A corporation is a continuing institution, irre- poration from disposing of or transferring the stock. No interim injunction, however, had issued, and it appeared that, before the judgment, the stocli had been transferred from the other defendants on the books of the corporation. It was held that an assignee of the judgment could not, in an action thereon against the corporation, recover from it the stock or its value. Hawes v. Gas Consumers' Ben. Co., 12 N. T. S. 924. 1 Mason V. Alexander, 44 O. St. 318; 7 N. E. 433; Bowdenv. Johnson, 107 U. S. 251; Bowden v. Santos, 1 Hughes, 158; McClaren v. Franciscus, 43 Mo. 557; Provident Savings Inst. v. Jackson Place Skating Kink, 52 Mo. 557; Cent. Agriculture, etc., Asso. v. Alabama Gold Life Ins. Co., 70 Ala. 120; Rider v. Morrison, 54 Md. 429; Madison v. Fireman's Ins. Co., 11 Rob. La. 177; Payne V. Stewart, 33 Conn. 517; Nathan v. Whitlock, 9 Paige, 152; Dauchy v. Brown, 2-1 Vt. 197; Roman v. Fry, 5 J. J. Marsh, 634; Veiller v. Brown, 18 Hun, 571; Westchester, etc., R. Co. v. Jackson, 28 Pa. St. 339; Aultman's Appeal, 98 Pa. St. 505; Arthur v. Midland R. Co., 3 Kay & J. 204; Muskingum Valley Turn- pike Co. V. Ward, 13 Ohio St. 120. In England a contrary view prevails, and it is held that if the transfer to an insolvent or irresponsible party be absolute and without condition or secret trust in favor of the transferrer such transfer is valid. In re Taurine Co., 25 Ch. Div. US; Chynoweth's Case, 13 Ch. Div, 13; William's Case, 1 Ch. Div. 576; King's Case, 6 Ch. Div. 196; Regiua v. Midland Counties, etc., Ry. Co., 15 Ir. Ch. .525. See also Skrainka v. Allen, 76 Mo. 384. 2 See Cox's Case, 4 De G. J. & S. 53; Pugh & Sherman's Case, L. R. 13 Eq. 566. But the insolvency must relate to the time of the transfer. If transferee afterwards becomes insolvent the vendor cannot be held. Harpold v. Stobart, 46 Ohio. St. 397; 21 N. E. 637; Infra, § § 815-817. § 467 TRANSFER OP MEMBERSHIPS. 507 spective of the rights of the members composing it at any particular period. Each share represents a frac- tional interest in all its assets, including its causes of action at the time he became a member. If a cause of action previously existing in favor of the corporation has become barred from any cause, it does not revive in favor of one who becomes a member afterwards. On the same principle the new member succeeds to the right and interest of the original member, and although, hj reason of his acts or personal misqualification of himself, the transferee is not entitled to sue, he is still entitled to share the benefits of a recovery by or on behalf of the corporation in any action, whether arising before or after the transfer.^ A contrary view has been expressed in the United States Supreme Court and in Georgia, where it was held that a person who did not own stock at the time of fraudulent transactions complained of, or whose shares have not devolved upon him since, by operation of law, cannot maintain a suit to have such transac- tions declared illegal.2 § 468. Knowledge of wrongs no bar to transferee.— Mere knowledge that wrongs have already been com- mitted for which the corporation is entitled to redress in an action would not deprive a transferee of his right to sue ; nor would the fact that the vendor had barred 1 Ervin v. Oregon, etc., Ry. Co., 27 Fed. R. 625. 2 Alexander v. Searcy, 81 Ga. 536; Hawes v. Oakland, 104 U. S.'450; Dimp- fell V. Ohio, etc., R. R. Co., 110 Id. 209. In the last case Justice Field, speak- ing of plaintiff's efforts to induce the directors or stockholders of the corporation to begin suit as well as of his capacity to sue, said: — " The cause of his failure should be stated with particularity in his bill of complaint, accompanied with an allegation that he was a stockholder at the time of the transaction of which he complains, or that his shares have devolved upon him since, by operation of law." 508 TEANSPER OF MEMBERSHIPS. § 469' himself alone bar a purchaser in good faith, unless the fact were known to him at the time. And the acquiescence of the original holder in illegal acts of the managing agents will never bind a subse- quent holder of that stock to submit to future acts, whether of a similar or of a different character.^ § 469. Insolvency and dissolution terminate the right of transfer. — The right of transfer is given for the benefit of the members, but they will not be permitted to ex- ercise it as a means of escaping their proportionate shares of losses resulting from failure of the enterprise, and cast it entirely upon their associates. To prevent the injustice which would result from a contrary rule, it has been repeatedly held in the United States that after a corporation has become notoriously insolvent, the only duty remaining to its officers and members, is to wind up its business, call in the out- standing capital and satisfy its creditors. And even before the insolvency is made public, if it actually exists, to allow the shareholders to transfer their inter- ests, and with them their liability to bear a share of the losses, to persons unable to contribute or beyond the jurisdiction of the courts, would be opening the door to subterfuges calculated to defeat the- claims of creditors and defraud their associates. And upon principle it would seem that creditors might avoid such transfers made to their injury. There are a number of cases, however, which maintain the contrary. ^ The right of transfer terminates on the dissolution of a corporation as upon insolvency, but for a different reason. Transfers after insolvency are disallowed upon 1 Bloxam v. Metropolitan Ry. Co., L. R. 3 Ch. 337; Tnfi-a, § 637. 2 Johnson v. Laflin, 6 Cent. L. J. 181 ; Chouteau Spg. Co. v. Harris, 20 Mo. 382; Everliart v. Chester, etc., R. R. Co., 28 Pa. St. 339; 5 Dill. 76. § 470 TRANSFER OF MEMBERSHIPS. 509 equitable grounds, but dissolution puts an end to all contracts of membership, and there exists nothing rec- ognizable at law which can pass from one to another. A former member of a dissolved corporation may, how- ever, assign his interest in the undistributed assets so as to give his assignee an equitable claim.^ § 470. Compliance with regulations and formalities. — The provisions of the constating instruments, as we have seen, enter by implication into every contract of membership.^ So a transfer of shares which is no more than the making of a new contract in place of one which existed previously, must be made in accordance with whatever reasonable and valid rules and regula- tions the articles and by-laws contain with reference to that transaction.^ 1 James v. Woodruff, 10 Paige, 541; affirmed, 2 Denio, 574. See Allin's Case, L. E. 16 Eq. 449, 455; Chappell's Case, L. R. 6 Ch. 902, 905. 2 Supra, § 283. 3 Union Bank v. Laird, 2 Wheat. 390, per Stoet, J. ; Supply Ditch Co. v. Elliott, 10 Colo. 327; 16 P. 691; Xorthrop v. Newton, etc., Tump. Co., 3 Conn. 544, per Hosmer, J. ; Hibblewhite v. McMorine, 6 M. & W. 200 ; Merrill v. Call, 15 Me. 428; Bishop v. Globe Co. (G.), 135 Mass. 132; Fisher v. Essex B'k, 5 Gray, 373; Stockwell V. St. Louis Mercantile Co., 9 Mo. App. 133; Bates v. Boston, etc., K. E. Co., 10 Allen, 251; Cordon v. Universal Gas Light Co., 6 Dowl. & L. 379; State v. Pettmelli, 10 Nev. 141. A by-law reqmring the surrender of the old certificate before the issue of a new one is not an unreasonable restriction upon the right of transfer. It is a legitimate means of protecting the company from conflicting claims between legal and equitable owners, and to preserve any liens or claims it may have on its stock before transfer to third parties having no notice of such liens or claims. See Bank of Ky. v. Schuylkill Bank, Parsons' Sel. Cas. 180. A by-law of a bank prohibiting the transfer of stock therein or interposing unreasonable restrictions is in restraint of trade and void. Moore v. Bank of Commerce, 52 Mo. 377. A by-law of a national bank attempting to create a lien in favor of the bank on stock held by its debtors is not a regulation of the business of the bank, or a regulation for the conduct of its affairs within the meaning of the national banking act; but is a restriction and interference with the free exchange of personal property, and therefore not enforceable. BuUard v. Bk., 18 Wall. 589; Conklin V. Second Nat. Bk.,45N. Y. 655. See also Eosenback v. Salt Spgs. Nat. Bk.; Id. 512, note. 510 TKANSFEE OF MEMBEKSHIPS. § 471 Until the corporation has notice of the assignment the assignor remains liable to pay all calls issued by it.i , But the assignee is not liable until compliance with the prescribed rules, although the company have notice of the assignment.^ The registry is no protection to the corporation as against the default of its agent or officer whose duty it is to enter a transfer, but who fails to do so upon proper demand where the charter or gen- eral law declares the stock assignable.^ Where the law or charter or by-law enacted in pur- suance of the same prescribes a mode of transfer, an assignment in a different form which would have been effectual at common law to pass the legal title to an assignable interest will not be valid.* § 471. Transfers in pledge. — The same principles apply where the transfer is not absolute, but to secure a loan or other indebtedness. By the preponderance of au- thority, shares of stock in a corporation being merely choses in action are not the subject of mortgage ; but the certificates partake so far of the character of per- sonal property as to Jpe the subjects of pledge. ^ The transfer is often made with power of sale to the credi- tor,* the creditor thereby becoming the agent of the ' Humble v. Langston, 7 M. & W. 517; Shellington v. Howland, 53 N". Y. 371; Worrallv. Judson, 5 Barb. 210; London, etc., Ry. Co. v. Fairclough, 2 Man. & Gr. 674; McEuen v. West London Wharves, etc., Co., L. R. 6 Ch. 655; Sayles v. Blane, 19 L. J. Q. B. 19; s. c, 6 Eng. Ry. Gas. 79; Midland, etc., Ry.. Co. V. Gordon, 16 M. & W. 804; s. c, 5 Eng. Ry. Gas. 76; Dane v. Young, 61 Me. 160. 2 Marlboro Mfg. Co. v. Smith, 2 Conn. 579. 3 Stebbins v. Phoenix Fire Ins. Co., 3 Paige, Ch. 350. * Union Bk. v. Laird, 2 Wheat, 390; Colt v. Ives, 31 Conn. 25; McEuen v. West London, etc., Co.,X. R. 6 Ch. 655; Sayles v. Blane, 19 L. J. Q. B. 19. « Dayton Nat. Bk. v. Merchants' Nat. Bank, 37 O. St. 208; Newton v. Fay, 92 Mass. 505; Merchants' Nat. Bk. v. Hall, 83 N. Y. 338. « See Beckwith v. Burrough, 13 R. I. 294. § 471 TKANSFER OF MEMBERSHIPS. 511 pledgor.^ Even though the transaction take the form of a mortgage accompanied with delivery of the certifi- cate, it will be treated as a pledge rather than as a mortgage.2 A convenient method of pledging stock is by a delivery of the certificate with a blank power of attorney.^ A transfer on the books of the corporation is not essential* to the validity of the pledge as between parties, and it has been held that a mere delivery of the certificate without a written transfer is sufiicient.5 Nor is notice to the corporation required.® The usual method is to deliver the certificates endorsed in blank as in absolute transfers, accompanied by a memorandum in writing, setting forth the terms upon which the transfer is made and designating the shares held.'^ ' Vauppell V. Woodward, 2 Sandf. Ch. 143. A broker to whom shares are consigned for sale on a margin is pledgee; Baker v. Drake, 66 N. T. 518; Markham V. Jaudon, 41 N. Y. 235; and is bound to the same duties and ob- ligations to the pledgor. 2 Merchants' Bk. v. Cook, 4 Pick. 405; Doak v. Bk. of the State, 6 Ired. L. 309; Newton V. Fay, 92 Mass. 505; Mechanics', etc., Ass'nv. Conover, 14N. J. Eq. 219; Nabring v. Bk. of Mobile, 58 Ala. 204. Compare Smith v. 49 and 56 Quarts, Mining Co., 14 Cal. 242, where the court held the transaction to amount to a mortgage. See also, Manns v. Brookville Nat. Bank, 73 Ind. 243; Williamson v. New Jersey Southern E. E. Co., 26 N. J. Eq. 398. In Adderly v. Storm, 6 Hill, 624, the court held the transaction to be neither a pledge nor a mortgage. Com- pare Wilson V. Little, 2 N. Y. 443; Hasbrouck v. Vandervoort, 4 Sandf. 74. In Brewster v. Hartley, 37 Cal. 15, the court held that the fact that the transfer- was formally reduced to writing did not constitute the transaction a pledge, holding also that unless the stock was expressly made assignable by the delivery of the certificates it could not be pledged in any other manner. See Thompson V. HoUaday (Or.), 14 Pac. Eep., where a chattel mortgage on shares of stock made to the receiver who previously held the stock as receiver was held void. 3 Mechanics' Bank & L. Ass'nv. Conover, 14 N. J. Eq. 2.9; Lewis v. Graham, 4 Abb. Pr. 106. * Nabring v. Bank of Mobile, 58 Ala. 204; Wilson v. Little, 2 N. Y. 443. 5 See Jarvis V. Eogers, 13 Mass. 105; Brewster v. Hartley, 37 Cal. 15; Kobin- son V. Hurley, 11 Iowa, 410. 8 Crescent, etc., Co. v. Deblieux, 3 South. Eep. La. 72. ' Pitot v. Johnson, 33 La. Ann. 1286; Finney's App., 59 Pa. St. 398; Broad- way Bk. V. McElrath, 13 N. J. Eq. 24; Mount Holly, etc., Co. v. Ferree; 17 N. J. Eq. 117; Blouin v. Liquidators, etc., 30 La. Ann. 714; Merchants' Nat. Bank V. Eichards, 6Mo. App. 545; AfE'd74Mo. 77; Cornick v. Richards, 3 Lea, 1 ; New 512 TRANSFER OF MBMBEESHIPS. § 472 A provision in the charter or by-laws for a different method of transfer does not affect the validity of a bona Jide pledge made in the usual manner.^ § 472. Slank assignments. — The practice of assigning by a transfer duly signed by the transferee, but with the name of the transferee left blank, has become a commercial usage and is recognized as valid by the courts.^ It is usual to have printed on the back of the certificate as part of the assignment a blank power of attorney empowering ' any one whose name may be in- serted to fill in the name of any person he may select to make the transfer. Such assignment and power of attorney so signed may be sold and passed from hand to hand, each purchaser being entitled to the same rights against his transferrer and previous transferrers as he would have if their several names had been in- serted. "Whenever it may become necessary the last transferrer may fill up the blanks with his own name and the name of an agent as attorney to make the reg- istry transfer, or, as is frequently done, the name of the Orleans Nat. Bkg. Ass'n v. Wiltz, 10 Fed. Rep. 330; Baldwin v. Canfield, 26 Minn. 43. 1 Bitot V. Johnson, 33 La. Ann. 1286; Dickinson v. Cent. Nat. B'k, 129 Mass. 279; Lightner's App., 82 Pa. St. .301; McNeil v. Tenth Nat. Bank, 46 N. T. 825; Fraser v. Charleston, 11 S. C. 486; Factors' & K. Ins. Co. v. Marine D. D. Co., 31 La. Ann. 149; Continental Nat. Bank v. Elliott Nat. Bank, supra; United States v. Cutts, 1 Sumn. 133; Lowry v. Com. B'k, Taney, 310; Blouin v. Liquidators, etc., 30 La. Ann. 714; Com. Bank of Buffalo v. Kortright, 22 Wend. 348; Leitch v. Wells, 48 N. T. 58.5; Otis v. Gardner, 105 111. 436. 2 Walker v. Detroit Transit Ry. Co., 47 Mich. 338; Penn. Ry. Co. App., 86 Pa. St., 80; Cutting v. Damerel, 88 N. Y. 410; German Un. Bank Ass'n v. Sendmeyer, 50 Pa. St. 67; Ex parte Sargent, L. R. 17 Eq. 273; Ortigosa v. Brown, 47 L. J. Ch. 168; Re Barread's Bkg. Co., L. R. 3 Ch. 105; McNeil v. Tenth Nat. Bank, 45 N. T. 325, 331, holding that such assignment is good even in the absence of such usage; Holbrook v. New Jersey Zinc Co., 57 N. T. 616 625. Where certificates of stock are transferable by indorsement in blank and not on the books of the company, an offer by the holder to deliver them so in- dorsed is a sufficient tender. Hill v. Wilson (Cal.), 25 P. 1105; Wilson v. Hill, Id. I 473 TRANSFER OF MEMBERSHIPS. 513 latter may be left blank to be filled with the name of the registry clerk.^ § 473. Identity and proof of genuineness of signature. The corporation may undoubtedly make and enforce reasonable rules and regulations with reference to iden- tity of transferee with the person representing himself to be such and requiring proof of the signature of the transferrer. Without such power corporations would have no protection against forgeries and fraudulent practices of various kinds. ^ A bank may take reasonable time to make inquiries and may require proof that the signature is the writing of the party whose signature it purports to be ; ® and in cases of doubt, as to the right of the person in whose 1 See Broadway Bank v. McElrath, 13 N. J. Eq. 24; Matthews v. Mass. Nat. B'k, 1 Holmes. 396; Bridgeport B'k v. N. Y. & N. H. K. E. Co., 30 Conn. 231; Kortright v. Buffalo Com. B'k, 20 Wend. 91; Otis Admin, v. Gardner, 105 1\\. 436; Mt. Holly L. & M. T. Co. v. Tenie, 17 N. J. Eq. 117; Prall v. Tilt, 28 N. J. Eq. 479; Leavitt v. Fisher, 4 Duer. 1, 20, Defendant, being the owner of shares of corporate stock, deposited the certificate with a trustee under an agree- ment with the other shareholders that the stock should not be taken out of his possession, or put on the market before a certain time, and took a receipt from the trustee reciting such facts. Afterwards he delivered the receipt to inter- venor, with a power of attorney in blank, authorizing the transfer of the shares on the company's books; but he gave the intervenor no order for the delivery of the certificate, and no notice was given to the trustee of the transfer. Meld, under Civil Code La., art. 3158, providing that "when a debtor wishes to pawn . . . stocks ... he shall deliver to the creditors the . . . certificates of stock ... so pawned," that there was no pledge of the shares as against an execu- tion creditor of defendant. Bidstrup v. Thompson, 45 P. 452. See Batter's Appeal, 108 Pa. St. 510; 1 A. 78, holding that the name on the stock book is only prima facie evidence of ownership and of no avail against an opposing posses- sion of the certificate together with such an executed power of attorney for its transfer. 2 Tel. Co. V. Davenport, 97 U. S. 369; Davis v. Bank of Eng., 2Bing. 393. A corporation having entered on its books a transfer of its shares signed by an agent, the corporation supposing the signature to be that of the principal, the entry of the transfer is justified if the agent was in fact authorized, but the corporation cannot rely on an estoppel arising from the principal's having held the agent out as authorized. Camden Fire Ins. Ass'n v. Jones, (N. J.), 21 A. 458, * Davis V. Bank of Eng., supra; Bayard v. Farmers' & M. Bank, 52 Pa. St. 232. 33 514 TEANSFER OF MEMBERSHIPS. § 471- name the stock appears on the books, to sell and trans- fer the same, it may require legal proof of competency. The same rule applies in the case of one representing himself to have and apparently having authority as at- torney for the party. But the corporation has no right to inquire into the motive of one having legal authority to make the transfer.^ Ordinarily, however, it cannot refuse to make the transfer on the ground that the transfer will injure the corporation, or that the object of the transfer is to increase the votes of the trans- feree.^ In England the law is somewhat different. Directors there usually have a discretionary power to allow or refuse a transfer.^ § 474. When transfer complete. — The novation is not complete; nor is the assignee a shareholder for the pur- pose of voting and claiming dividends ; * nor has he any equitable claim upon the assets in case of insolvency or dissolution as against the corporation and its creditors prior to giving notice of his claim.^ But a formal as- signment or transfer on the corporation books is not 1 Townsend v. Mclver, 2 S. 0. 25. A merely nominal transfer, however, made to obtain for the transferee certain special privileges, such as free admission to a place of amusement, would be without valid consideration and a fraud upon the other stockholders. Appeal of Academy of Music, 108 Pa. St. 510; In Rice V. Rockafeller, N. T. Da. Reg., May, 1888, in an action to compel the unincor- porated Standard Oil Trust to transfer on its books "trugt" certificates which plaintiff had purchased, defendants alleged that plaintiff was a competitor of the trust and had purchased the certificates in order to break up the trust and compel it to put the plaintiff out. It was held the plaintiff should be compelled to give a bill of particulars. 2 Moffatt V. Farquar, L. R. 7 Ch. D. 591. " Healey on Law and Pr. of Companies, 79. " Hall V. Rose Hill, etc., Road Co., 70 111. 673; People v. Robinson, 64 Cat. 373; Cleveland, etc., R. Co. v. Robbins, 35 Ohio St. 483; Oxford, Turnp. Co. v. Bunne, 1; 6 Conn. 562; Northrop v. Newton, etc., Turnp. Co., 3 Conn. 544; Northrop v. Curtis, 5 Conn. 246; Chambersburg Ins. Co. v. Smith, 11 Pa. St. 120. ' Becher v. Wells Flouring Mill Co., 1 McCrary C. C. 62; Bank of Commerce App., 73 Pa. St. 59; Brisbane v. Delaware, etc., R. R. Co., 25 Hun, 438. § 475 TRANSFER OF MEMBERSHIPS. 515 essential to the substitution of the transferee for the transferrer to the rights of membership as between themselves, such entries being only evidence of tha shareholder's right and not the right itself.^ § 475. Waiver by corporation — A corporation majr waive its right to require transfers to be made upon its books.^ But some unequivocal act must be shown in order to establish a waiver of the method prescribed by- statute.^ And it may establish a usage of having the entry or evidence of the transfer kept elsewhere than in the books. When such usage and compliance with it are proven, the corporation is estopped from setting up that no registration was made in its books as the law or its by-laws require.* 1 Mitchell V. Beekmen, 64 Cal. 117; Rutter v. Kilpatrick, 60 N. Y. 604; Wheeler v. Miller, 90 N. T. 353; Burr v. Wilcox, 22 N. Y. 551; Thorp v. Wood- hull, 1 Sandf. Chi 411; Johnson v. Albany, etc., R. R. Co., 40 How. Pr. 193;, Chaffln V. Cummings, 37 Me. 83; Schaeffer v. Mo. Home Ins. Co., 46 Mo. 248; Chester Glass Co. v. Dewey, 16 Mass. 94; Boston & Albany R. R. Co. v. Pear- son, 128 Mass. 445 ; Beckett v. Houston, 32 Ind. 393 ; Slipher v. Earhart, 83 Ind. 173; Haynes v. Brown, 36 >r. H. 545, 563; Fulgam v. Macon, etc., R. R. Co., 44 Ga. 597; South Ga. & F. R. R. Co. v. Ayres, 56 Ga., 230; Minneapolis Harvester Wks. V. Libby, 24 Minn. 327. 2 Isham V. Buckingham, 49 N. Y. 216. 3 The holder of shares agreed to sell them to S., and placed the certificate in the hands of a third party to be delivered to the vendee on payment of a note given for the stock. The note was never paid and the stock remained on the books of the corporation in the name of the vendor. But S. voted on the stock by virtue of a proxy, and the note was subsequently taken by the corporation, but not on account of any transaction between it and S. It was held that S. was. not liable to the corporation for unpaid assessments on the stock. Cornack v. Western White, etc., Co., 77 la. 32; citing Ft. Madison Lumber Co. v. Batavian B'k, 71 la. 270; Hale v. Walker, 31 la. 344; Pullman v. Upton, 96 U. S. 328. An employ^ who has not power to transact general business for the corporation has no implied power to waive its lien. Kenton Ins. Co. v. Bowman, 84 Ky. 430, holding also that the lien is not waived by merely taking other security. * Walker v. Detroit Transit R. R. .Co., 47 Mich. 338; Munn v. Barnum; 24 Vt. 283; Stewart v. Walla Walla Pub. Co. (Wash.), 20 P. 105; Noyes v. Spauld- ing, 27 Vt. 420; Richmondville Mfg. Co. v. Prall, 9 Conn. 487. See EUistou v. Schneider, 25 La. Ann. 435. 516 • TKANSFBE OF MEMBERSHIPS. §§ 476, 477 § 476. Duty of parties to transfer. — On a sale of stock, it is the legal duty of both parties to the transaction to see that the transfer is properly registered.^ It is the vendor's duty to do so for the information of those dealing with the corporation and to enable the vendee to collect dividends, vote in corporate affairs, etc., and it is the vendee's duty to have a legal transfer made at the only place where it can be done in order to relieve the vendor from liability to future calls. Since a court of equity will compel a transferrer of stock to record the transfer, and the transferee to pay all calls afterward, it is clear that the vendee may himself demand that the transfer be entered. When it is done at his request, he becomes responsible for future calls. The exercise of these rights and duties, however, does not interfere with the right of one who appears to be a stockholder on the books of the company to show that his name appears there without right and without authority.^ The mere fact that the assignor is indebted to the corporation will not justify a refusal on the part of its officers to make the proper transfer upon the books, un- less the company had a lien upon the stock at the date of the transfer.^ § 477. Where the corporation claims a lien upon the shares. — As to whether a by-law creating a lien upon shares for all indebtedness of the shareholder to the corporation can be enforced against, a bona fide purchaser without notice of prior liens, without additional statutory au- thority than that authorizing it to make rules and reg- 1 Poole V. W. p. B., etc., Ass'n, 30 F. 514; Bells App. (Pa.), 18 A. 177. 2 Upton V. Webster, 91 U. S. 65. See Green Mt. T. Co. v. Bulla, 45 Ind. 1. 8 People V. Crockett, 9 Cal. 112; DriscoU v. West Bradley Mfg. Co., 59 X. T. 102; Williams v. Lowe, 4 Xeb. 398; Steamship Co. v. Henon, 52 Pa. St. 280; Byon V. Carter, 22 La. Ann. 98; Vansand v. Middlesex Co. Bank, 26 Conn. 144. § 477 TRANSFER OF MEMBERSHIPS. 517 Illations concerning transfers, there has been consider- able conflict of authority.! There is a long line of decision in favor of the cor- poration's right to pass and enforce^ such a by-law. There are many respectable authorities against the right.2 1 Pendergast v. Bank, 2 Sawy. 0. C. 108; Bank of Attica v. Mfrs. Bank, 20 N. T. 501; Vicksburg, etc., K. R. Co. v. McKeen, 14 La. Ann. 724; Plymouth Bankv. B'k of Norfolk, 10 Pick. 454; Mechanics' Bank v. Mer. B'k, 45 Mo. 513; Tuttle v. Walton, IGa. 4.3; McDowell v. B'k of Wilmington, 1 Harr. (Del.) 27; St. Louis Ins. Co. v. Goodfellow, 9 Mo. 149; Nesmith v. B'k of Wash., 6 Pick. .329; Reading F. Ins. & T. Co. v. Reading I. W. (Pa.), 21 A. 170, holding that an indebtedness created by a stockholder who drew money from the com- pany in excess of the amount due him as profits, becomes a lien on the stock of such person by virtue of a by-law, to which he assented, that if any indebted- ness of a stockliolder to the corporation was not paid by a given time, his stock might be applied to its payment, and the statute does not run against such lien when the debt is not paid. Knight v. Old Nat. B'k, 3 Clifford, 429; McDowell V. B'k of Wilmington, 1 Harr. (Del.) 27; Bank of Holly Spgs. v. Pierson, 58 Miss. 421; St. L. Perpet. Ins. Co., 9 Mo. 149; Mechanics' Bk. v. Mer. Bank, 45 Mo. 513; Surplock v. Pac. R. R. Co., 61 Mo. 319; In re Buckman, 12 Nat. Bank, Reg. 223; People v. Crockett, 9 Cal. 112; Pendergast v. B'k of Stockton, 2 Sawy. 108; Lockwood v; Mechanics' Nat. Bank, R. I. 308; Cunningham v. Ala., etc.. Trust Co., 4 Ala. (N. S.) 652; Geyer v. West. Ins. Co., 3 Pittsb. 41; In re Dunkerson, 4 Biss. 227; Young v. Vaugh, 23 N. J. Eq. 325; Brent v. Bank of Wash., 10 Pet. 596, 615; Child v. Hudson Bay Co., 2 P. Wms. 207; Planters' Ins. Co. v. Selma Sav. B'k, 63 Ala. 585. See Heart v. State Bk., 2 Dev. Eq. N. C. Ill; Farmers', etc., Bankv. Warson, 48 la. 336, 340; Tuttle v. Walton, 1 Ga. 43. In Pendergast v. Bank of Stockton, 2 Saw. C. C. 108, Sawyer, J., after ably discussing previous decisions, summarized the law on the question as follows : " Upon the Whole, after a careful consideration of the statute and the authorities, I am of the opinion that the provision of the fourth section authorizing the corporation to make by-laws for the management of its property, the regulation of its affairs and the transfer of its stock, and of the ninth section, that the stock of the company shall be transferable in such manner as shall be pre- scribed by the by-law of the company, etc., authorized the corporation to adopt the by-law in question and that the by-law is valid." 2 In Anglo-Cal. Bank v. Grangers' Bank, 03 Cal. 359, the question came directly before the court, and after a consideration of all the recent cases on tlie subject, the court expressly approved the doctrine of the cases cited by it against the validity and unforceability of such a by-law and said :— " The de- fendant might make by-laws regulating the transfer of stock, but it cofild not, under the power to regulate the transfer of stock, create a secret lien upon it, which would adhere to it in the hands of a bona fide purchaser without notice. We think that the by-law which it is claimed gives the defendant such lien is clearly inconsistent with the provisions of sec. 324 of the Civil Code, etc. 518 TEANSFER OF MEMBERSHIPS. § 478 § 478. The weight of authority favors the right.— But the weight of authority and of reason is still in favor of the right under statutes empowering corporations to enact by-laws regulating transfers of stock.^ The argument that the public should not be ensnared by secret liens may well apply to negotiable instruments; but in the case of certificates of shares in a corporation, the books are at all times open to the inspection of intending purchasers, and the law points out the place for as- certaining -beyond cavil whether any such liens exist. If the agents of the corporation should refuse to give the information sought, or should misrepresent the terms upon which the shares are held, it would be of course estopped from afterwards setting up such lien against the purchaser; and he would take them subject to no claim against him, and just as if no lien existed. The conclusion drawn from all the best considered and ably discussed cases is that, under such statutory provisions as we have been considering, the corporation The doctrine of this case is supported by the following authorities : — ^DriscoU Y. West Bradley, etc., Co., 59 N. Y. 96; Bank of Attica v. Mfrs. Bk., 20 Id. 501; Kosenback v. Salt Springs Nat. Bank, 53 Barb. 495; Leggett v. Bank of Sing Sing, 21 N. Y. 283; Arnold v. Suffolk B'k, 52 Barb. 424; Byron v. Carter, 22 La. Ann. 98; Pitot v. Johnson, 533 Id. 128; K. O. Bkg. Ass'n v. Wiltz, 4 Woods, 43; Planters', etc., Mut. Ins. Co. v. Selma Sav. 6k., 63 Ala. 585; Steamship Dock Co. V. Henon's Admin.., 52 Pa. St. 280; Merchants' Bk. v. Shouse, 102 Pa. St. 488; Bank of Holly Spgs. y. Pinson, 58 Miss. 421; Carroll v. Y. MuUanphy Sav. B'k, 8 Mo. App. 249; Evansville Nat. Bank v. Met. Nat. B'k, 2 Biss. 527; Lee v. Cit. Nat. Bk., 2 Gin. Sup. Ct. 298; Bank v. Lanier, 11 Wall. 69; BuUard v. B'k, 18 Id. 589. In Plymouth Bank v. Bk. of Norfolk, 27 Mass. 454, the validity of a by-law giving a lien in favor of a bank on its own stock is strongly questioned; and in Sargent v. Franklin Ins. Co., 25 Mass. 90, still stronger ground is taken against it. In Conklin v. Sec. Nat. B'k, 53 Barb. 512 it was held that the in- sertion in the certificate of a provision to the effect that the stock was not trans- ferable until ail the liabilities of the stockholder to the bank were paid, did not give the bank a lien upon the shares for the subsequent indebtedness of the share owner. This case is not in conflict with Jennings v. Bank of Cal.,79 Cal. 323. In that case the indebtedness of the shareholder had been already incurred. Supra, n. 1, p. 517. § 479 TLIANSFEK OF MEMBEUSHIPS. 519 may enact by-laws having reference to the security by way of lien on its outstanding shares of stock for any indebtedness of the stockholders ; that such lien does not prevent the holder from transferring his certificate ; that the assignee takes the shares evidenced by it, subject to all liens existing in favor of the corporation; and that in order to complete his legal title and vest him with the right to vote and receive dividends, the transfer must be registered in the books of the corpora- tion in conformity with the statute and all reasonable by-law: regulations not repugnant to it. § 479. No common law lien.— There was no lien in favor of the corporation upon shares at common law. The allowance of such lien would have subverted the policy of the common law against secret liens. Therefore, liens for debts due the corporation must be allowed by statute or provided for in by-laws under statutory authority, unless there is a binding usage or custom of which the party denying the right to enforce the lien has notice, actual or constructive. Without such notice the validity of a lien in favor of manufacturing, trading, and other corporations not engaged in the business of loaning money has been generally denied.^ But the common law rule only has application in the case of bona fide purchasers of the shares without notice. The eommon law rule could not attach to dividends declared arid set apart. They are considered as so much money in the possession of the corporation 1 Case V. Bank, 100 U. S. 446; Sargent v. Franklin Ins. Co., 8 Pick. 90; Kenton Ins. Co. v. Bowman, 84 Ky. 430; Heart v. State Bank, 2 Dev. Eq. Ill; Dana v. Brown, 1 J. J. Marsh, 304; Bank of Attica v. Mfrs., etc.. Bank, 20 N. T. 505; Driscoll v. West Bradley, etc., Mfg. Co., 59 Id. 96; Hill v. Pine River B'k, 45 N. H. 300; People v. Crockett, 9 Oal. 112 ; Anglo-Cal. Bank v. Grangers Bank, 63 Id. 359; People v. Miller, 39 Hun, 557; Bank of Louisville v. Nat. State Bank, IQ Bush. Ky. .367; Del., etc., R. R. Co. v. Oxford Iron Co., 38 N. J. Eq. 340; Steamship Doc< Co. v. Heron, 52 Pa. St. 280. 520 TRANSFER OP MEMBERSHIPS. § 480f belonging to the stockholder pledged toward the pay- ment of any just debt then due from him,^ But the" lien on dividends does not hold good after the death of a shareholder. The dividend must then go into the general fund for the payment of creditors, and the cor- poration takes its place in the order of payment with others.^ Without it is so provided in the articles, statute or by-laws, or by special agreement, the cor- poration acquires no lien as against a shareholder on his shares, even though it hold his note for the debt due from him.* § 480. By-law regulations under statutory authority. — The object of a special or general statute in requiring that shares shall " be transferable only on the books of the company " is not only to enable the corporation to know who are its shareholders and as such entitled to vote, receive dividends, etc., but for the protection of bona fide purchasers of the shares and of creditors, and persons dealing with it as well.* In some states where shares are not expressly made transferable by indorsement and delivery, the members in their articles of incorporation may confer upon the directors discretionary power to approve or disapprove- transfers. In such cases they are not bound to disclose 1 Hagar v. Union Nat. Bank, 63 Me. 509. 2 Brent v. Bank, 2 Cranch, SlY. 3 Bates V, N. Y. Ins. Co., 3 Johns. Cas. 238. And the common law rule against secret liens has been held not to apply where there was a known usage of a bank by which the stock of a debtor was not transferable until his indebt- edness to the bank was paid. Such usage is binding upon the assignee of the stockholder, and it was his duty to make inquiry with reference to the condition of the account between the latter and the bank. Morgan v. Bank of North Am., 8 Searg. & B. 73; nor where a notice that a lien would be claimed for all in- debtedness of the holder of the stock was printed on the back of the certificate to which attention was called on its face. Jennings v. Bank of Cal., 79 Cal. :!2o. * Moore v. Bank of Commerce, 52 Mo. 377; Weston's Case, L. R. 4 Ch. 20; Chouteau Spg. Co. v. Harris, 20 Mo. 382; Johnson v. Laflin, 5 Dill. 75-78; Gilbert's Case, I.. R. 5 Ch. 559. § 481 TRANSFER OF MEMBERSHIPS. 521 their reasons for the exercise of their authority'; but; they are not allowed to withhold their assent capri- ciously or in bad faith.i § 481. Construction of statutes authorizing the retention of lien on shares.— It is well settled that when a lien upon the shares of stockholders is given by statute or provided for in by-laws enacted under statutory au- thority to regulate, it extends, or may be made to extend to all debts, whether payable presently or at a future time, except where the statute limits the lien to debts ■ actually due and payable, and that a stockholder in- debted to a corporation, although the debt may not be due, cannot transfer his stock freed from such lien with- out the consent of the corporation.^ The lien continues for the benefit of the corporation after the debt has become barred by the statute of limitations,* and whether the stockholder's debt accrued after or before the debtor became a stockholder.* It at- taches to a debt to which the shareholder is liable only ' Poole V. Middleton, 29 Beav. 646; Eobinson v. Chartered Bank, L. R. 1 Eq. 32; Re Stanton Iron, etc., Co., L. R. 16 Eq. 559; Pender v. Lushington, L. R. 6 Ch. D. 70; Penny's Case, L. E. 8 Ch. App. 446. 2 Pittsburgh, etc., R. R. Co. v. Clarke, 29 Pa. St. 146; Grant v. Mechanics' Bank, 15 Serg. & R. 140; Sewall v. Lancaster B'k, 17 Id. 285; Rogers v. Hunt- ington B'k, 12 Searg & R. 77; In re Bachman, 12 Nat. Bank Reg. 223; Downes Admin, v. Zanesville B'k, Wright, O. 447; Brent v. Bank of Wash., 10 Pet. 596; McCready V. Ramsey, 6 Duer. 574; St. Louis Perpet. Ins. Co. v. Goodfellow, 9 Mo. 149; Cunningham V. Ala., etc., Trust Co., 4 Ala. (N. S.) 652; Hall v. U. S. Ins. Co., 5 Gill. (Md.) 484; Leggett v. Bank of Sing Sing, 24 N. Y. 283; Iii re Stockton Malleable Iron Co., L. R. 2 Ch. D. 101. Under the Penn. Stat, of 1814 it was held that a bank might lawfully refuse to permit the transfer of the stock of a stockholder who had drawn a bill which had been discounted by the bank but not payable at the time the transfer was demanded, both the drawer and his indorser having become insolvent since the discount of the bill. Grant V. Mechanics' Bank, 15 S. & R. (Pa.) 140. See also Reese v. Bank of Commerce,. 14 Md. 271. ' Farmers' Bank of Md. v. Inglehart, 6 Gill. 50; Geyer v. Western Ins. Co.,, 3 Pittsb. 41; Brent v. B'k of Wash. 10 Pet. 596. * Schmidt v. Hennepin, etc., Co., 3"i Minn. 511. 522 TRANSFER OF MEMBERSHIPS. § 481 as surety. It extends to debts due from a partnership of whicli tlie stockholder is a member.^ It is well settled by a long line of English as well as American authori- ties that unpaid calls in original subscriptions may be secured by such by-laws.^ But no lien can attach to uncalled-for subscriptions except where, upon insol- vency, the creditors have an equitable lien.* Such provision in the by-laws of a bank is not an un- reasonable restraint upon alienation of persoiial property, but is within the purview of a reasonable requirement for its benefit and protection.^ But a provision in the charter of other than banking corporations giving a' lien upon shares does not authorize the making of loans "to the stockholders.^ 1 McLean v. Lafayette Bank, 3 McLean, 587; Leggett v. B'k of Sing Sing, 24 N. T. 283; Union Bank of Georgetown v. Laird, 2 Wheat. 390; McDowell v. Bank of Wilmington, 1 Harr. (Del.) 27. See Miles v. New Zealand, etc., Co., 54 L'. T. Kep. 582. It was held in Union Bank v. Laird, supra, that a corporation on discounting ^ bill or note may take security from one of the parties and also hold the shares of another party as security for the same loan. See also Conant v. Seurce Co. Bank, 1 O. St. 298; Helen v. Swigett, 12 Ind. 194; Dunlap v. Dnnlap, L. K. 21 Ch. Div. 583. 2 In the Matter of Bigelow, 2 Benedict (N. T.), 469; Geyer v. Western Ins. •Co., 3 Pittsb. 41 ; Arnold v. Suffolk Bank, 27 Barb. 424; Planters', etc., Ins. Co. V. Selma Sav. Bank, 63 Ala. 585. 3 See Pittsburgh, etc., R. R. Co. v. Clarke, 29 Pa. St. 146; Rogers v. Hunt- ington B'k, 12 S. & R. 77; Petersburg Sav., etc., Co. v. Launden, 75 Va. 327; Hall V. U. S. Ins. Co., 5 Gill. (Md.) 484, 499; Spurlock v. Pac. R. R. Co., 61 Mo. 319; McCready v. Ramsey, 6 Duer. 574. * Hall V. U. S. Ins. Co., 5 Gill. (Md.) 484. See Infra, § To allow it would be to entirely destroy the transferable character of shares. 5 Planters', etc., Mut. Ins. Co. v. Selma Sav. Bank, 63 Ala. 585; Cross v. PhcBnix Bank, 1 R. I. 39; Bank of Utica v. Smalley, 2 Cowen, 770; Mt. Holly Paper Co. App., 99 Pa. St. 513; Bishop v. Globe Co., 135 Mass. 132. Contra, Anglo-Cal. Bank v. Grangers' Bank, 63 Cal. 359. But the bank has no lien for debts not yet due where the terms used in giving the lien are for all debts ac- tually due and payable to the corporation. Reese V. Bank of Com. 14 Md. 271. Nor has a corporation any right to refuse a transfer on the ground that subscrip- tions on the shares remain unpaid if no calls have been made for the balance •due. The balance is not a debt due the corporation prior to its being called for. Kahn v. St.' Joseph, 70 Mo. 262. ' " Webster V. Howe Mach. Co., 54 Conn. 394. A statute prohibiting banks, §§ 482, 483 TRANSFER OF MEMBERSHIPS. 523 § 482. Inconsistency of authority with general law not regarded. — A provision in a charter declaring the stock of a corporation personal property, and empowering the directors to make rules and regulations governing its transfer, will be given effect to the extent of authorizing the board to prohibit transfers of stock until all debts due by the holder to the corporation are paid, notwith- standing the inconsistency of such prohibitory provision with the general law of the state governing the transfer of personal property. And this will hold true although such charter provide that the rules and regulations to be made under its authority shall be subject to the ■ general law of the state. -^ But an attaching creditor has a lien upon the shares superior to thatof the corporation for an indebtedness incurred by the shareholder to it subsequently to the attachment.^ § 483. Such by-laws confined in their operation to the immediate parties. — Where the by-laws of a company, which by its charter it is authorized to enact, give it a lien upon shares until all indebtedness is paid, they will not extend to the creation of a lien in favor of third parties to whom the shareholder is indebted, although the corporation may have acquired an interest organized under the laws of the state, from making loans or discounts on the security of the shares of their capital stock, is effectual to prevent a bank from having a lien on the shares of a stockholder for a debt thus created after that enactment, though a by-law before adopted had provided for such a lien. Nicollet Nat. Bank v. City Bank, 38 Minn. 85; 35 N. W. 577. 1 St. Louis Perpet. Ins. "Oo. v. Goodfellow, 9 Mo. 149. Scott, J., delivering the opinion, said:—" In saying that the rules and restrictions on the transfer of stock should be subject to the general law, the legislature could not have intended that they should be consistent and in conformity with the law of the state gov- erning the subject matter concerning which the by-laws were to be enacted. It could only have been contemplated by the legislature that they should be reason- able and not contravene the general laws other than that relative to the sub- ject about which they were prescribed." See also Bank v. Mer. Bank, 45 Mo. 513. 2 Geyer v. Western Ins. Co., 3 Pittsb. (Pa.), 41. 524 TRANSFER OF MEMBBRSHnPS. , § 484 in or control of such claim. i It does not attach to a subsequently acquired equitable interest, but is con- fined to the legal interest of the corporation.^ § 484. What constitutes notice to transferee of lien of corporation. — ^Where a lien is given directly by general law, all persons, even non-residents, are bound to take notice of such lien.^ But the power given to enact, a by-law creating a lien does not imply the power to bind those who have no knowledge, actual or construc- tive, of such by-law ; and if the corporation wishes to preserve its rights under such by-laws, it must bring them in some practical way to the attention of all who have occasion to deal in its shares. A corporation can- not enforce a by-law creating a secret lien.* As we have seen, the preponderance of Judicial decis- ion is largely in favor of the binding effect of such by- law upon all who buy shares with notice of it, and to the effect that in such case the party is bound to exert reasonable diligence in ascertaining the existence, nature and extent of liens upon notice that the corporation has such by-law provisions.^ Evidently a reference on the face of the certificate to a by-law or provision in the articles requiring the liqui- dation of all the holder's indebtedness to the corpora- tion before a transfer would be amply sufficient to- place the intended purchaser upon inquiry ; and unless he made investigation at the proper place he would be 1 Child V. Hudson Bay Co., 2 P. Wms. 207; 1 Strange, 645. ^ Child V. Hudson Bay Co., supra. But a firm succeeding to the business of a stockholder who became a member of such firm is chargeable with notice of the lien of the corporation in which sUch stock is held. Planters', etc.. Mut. Ins. Co. V. Selma Sav. Bank, 63 A.la. 58.5. It was held in the same case that the lien of the bank on the stock under the by-laws extended to indebtedness of the succeeding firm in subsequent transactions between it and the bank. 3 Hammond v. Hastings, 1?A U. S. 401. * Anglo-Cal. Bank v. Grangers' Bank, 63 Cal. 359. 6 Jennings v. B'k of Cal., 79 Cal. 323, supra, § 478. § 485 TRANSFER OF MEMBERSHIPS. 525 held to contract with reference to and knowledge of his vendor's indebtedness.-^ But a provision giving a lien in favor of a bank for debts due, will not be extended so as to embrace debts to become due in the future as against an assignee of a certificate containing express reference to the articles.^ Notice in the case of liens for indebtedness is a fact to be proven in a case arising between corporations and purchasers, as in other cases, each case depending to a great extent upon its own circumstances and resting upon general principles. § 485. Waiver of the lien on stock. — The lien which a corporation has upon shares of stock, whether acquired under statute or by-laws or otherwise, may be lost by acts showing a clear intention to waive it.^ The lien is released by permitting a transfer of the stock to a stranger, and delivery to him of a certificate reciting that the shares are transferable when the liabilities of the holder to the corporation are paid. But the waiver will not be inferred from equivocal or 1 Jennings v. Bank, 79 Cal. 323. 2 In a case where a bank had refused to transfer a stockholder's shares on "the ground of his indebtedness, it appeared that the latter had given the bank his note for a considerable amount, but at the time of the assignment the note was not yet due. The court, in deciding against the right of the bank to refuse to register the transfer, said: — "When a man gives his note payable at a future day, it is an essential part of the contract that he shall not be called on to pay it, and shall in no respect be molested in relation to it, until the day shall arrive, and then he is pledged to pay it. This is the contract; and why should we say that a dealer with this bank is subject to greater liabilities and exposed to more severe restrictions than attacji to any similar indebtedness to other persons ? " Leggett V. Bank of Sing Sing, 25 Barb. 326. 8 Bishop V. Globe Co., 135 Mass. 132; Nat. Bank v. Watsontown Bank, 105 U. S. 217; Johnson v. Laflin, 103 Id. 800; Presby. Cong. v. Bank, 5 Barr. 345; Upton V. Burnham, 3 Biss. 431; Hill v. PineKiver Bank, 45 N". H. 300; Nesmith V. Wash. Bank, 6 Pick. 324; Hall v. U. S. Ins. Co., 5 Gill. 484; First Nat. Bank of Hartford V. Hartford Ins. Co., 45 Conn. 22; B'k of Am. v. McNeil, 10 Bush. ■de vises of personal property. A general legacy of stock differs, however, from one that is specific. The former ■case consists in a general direction in the will to the ex- ecutor to purchase a certain amount of stock for the leg- atee, there being nothing in the will to indicate that any of such stock is already owned by the testator. A specific legacy consists of a direction to the executor to deliver to the legatee stock already belonging to the testator's 'estate. It is often difiicult as well as important to deter- mine whether a legacy of stock is general or specific. " A specific legacy is not liable to abatement for the payment of debts, but a demonstrative legacy is liable to rebate when it becomes a general legacy by .reason of the failure of the fund out of which it is payable. A specific legacy is liable to ademption, but a demonstra- tive legacy is not. A specific legacy, if of stock, car- ries with it the dividends which accrue from the death of the testator, while a demonstrative legacy does not carry interest from the testator's death. " 2 ' If the legacy is to be considered specific, then, in the event of the testator's parting with the thing or property bequeathed, or if, from any cause, it should be lost or destroyed, the legacy fails. Then, again, such legacies are not liable to abatement with general legacies ; nor 1 2 Dauiel on Neg. Inst. (3d. Ed.), sec. 1708, g; McNeil v. Tenth Nat. B'k, 46 N. T. 325; Tump. Co. v. Ferree, 17 N. J. Eq. 117; Prall v. Tilt, 28 N. J. Eq. 479; Merchants' B'k v. Livingston, 74 N. Y. 223. See Barstow v. Savage Jlin. Co., 64Cal. 388; Shaw v. Spencer, 100 Mass. 382. See also Sewall v. Boston W. P. Co., 4 Allen (Mass.), 282. 2 MuUins V. Smith, 1 Dr. & Sm. 204. 672 TKANSFEK OF MEMBEESHIPS. § 518 are they liable to contribution towards the payment of debts.i § 518. Gonstruction of devises of stock. — Such devises are construed favorably to the legatee,^ and generally enjoy a preference over the general legatee in a general legacy.^ The legatee of stock takes it, just as it is held at the testator's death, like other transferees. Whatever payments have been made upon it accrue to the bene- fit of the legatee ;* and he is entitled to receive all dividends thereafter declared, but none declared pre- viously, though the same had not been paid.* But this liberality of construction in favor of the special legatee only applies when it is plain that the devise is special and not general. In determining the latter question preference is given to general over special legacies. "If doubt exists as to whether a legacy is general or specific, it will be con- strued to be general.^ 1 Kenkel v. Mcaill, 56 Md. 120. See Walton v. Walton, 7 Johns. Ch. 257; Davies v. Fowler, L. R. 16 Eq. 308; Jacques v. Chambers, 2 Coll. 435. " It was held that if the language employed will apply equally to paid up and to only partly paid stock the legatee may take the former. Millard v. Bailey, L, E. 1 Eq. 378; Jacques v. Chambers, 2 Coll. 435. ' His legacy holds good although no property be left out of which to provide for the general or -pecuniary legacies; Drinkwater v. Falconer, 2 Ves. Sr. 622; provided the testator died possessed of so mvicli of that kind of stock, but not otherwise; Ashton v. Ashton, 3 P. Wms. 384; Gordon v. Duft, 28 Beav. 519. If the testator owned none of such stock, however, the specific legacy fails. Evans v. Tripp, 6 Mad. 91. But in case of both, a general and specific legacy of the same stock, the latter is entitled to prior satisfaction. Barton v. Cooke, 5 Ves. 461. ^ Tanner v. Tanner, 11 Beav. 69. 5 Perry v. Maxwell, 2 Dev. Eq. (N. C.) 487. 6 Eckfield's Estate, 7 W. X. C. Pa. 19; Davies v. Fowler, L. E. 16 Eq. 308; Tifftv. Porter, 8 IST. T. 516, 520; Gordon v. Duff, 28 Beav. 519; Ashton v. Ashton, 3 P. Wms. 384. The following words and phrases used by testator held to convey specific legacies of stocks: "Standing in my name." Kampf v. Jones, 2 Keen. 756; Ludlam's Estate, 13 Pa. St. 188; Gordon v. Duff, 28 Beav. 519. " Stock now lying in the three per cents," Merely v. Bird, 3 Ves. 628. A. 1 519 TRANSFER Off MEMBERSHIPS. 673 § 519. Gifts of stock—Gifts of stock may be made effectual by delivery of the certificate and compliance with the rules and requirements governing registration, or even by the designation of an agent to make the de- livery and entry in the books of the corporation. But Request of all dividends, interest and proceeds from stock constitutes a specific legacy thereof; although no such stocls was owned by the testator at the time he made the will. Stephenson v. Dawson, 3 Beav. 342. See also Fidelity Trust Co.'s App., 108 Pa. St. 339, 492. Where the word " my " is used in connection with a description of the stock, it is held to create a specific legacy; Hayes v. Hayes, 1 Keen 97; Loring v. Woodward, 41 N. H. 391; Walton v. Walton, 7 Johns. Ch. 257; Shuttleworth v. Greaves, 4 Mylne & Cr. 35; Miller v. Little, -2 Beav. 259; Brainerd v. Cowdrey, 16 Conn. 1; though an omission of the word "my" does not necessarily make the legacy general; Avelyn v. Ward, 1 Ves. Sr. 420. But it was held that a legacy of "all my stock that I may be possessed of at the time of my decease" was general, and not special, because " no individual thing was given." Parrott v. Worsfold, 1 Jac. & Walker, 574. The intent to make a general bequest or to create a general legacy of stock may be inferred from a direction to invest a designated sum in specified stock for the benefit of the legatee; Raymond v. Brodbelt, 5 Ves. 199; or from a direc- tion to transfer to the legatee specified stock not owned by him at the time of making the will; Lambert v. Lambert, 11 Ves. 607; Silbley v. Perry, 7 Ves. 552. See also Parrott v. Worsfold, 1 Jac. '& W. 574. Contra, Bethime v. Kennedy, 1 Myl. & C. 114; Deane v. Test, 9 Ves. 146; Johnson v. Johnson, 14 Sim. 3. Where the testator merely bequeathes a designated number of shares without words indicating that he then owned or expected to hold the stock bequeathed, the legacy is general. Wilson v. Brownsmith, 9 Ves. 180. In Pearce v. Bill- ings, 10 E. L 102, the court said: — " The evident intent of the testator was to ■have the stock mentioned purchased for the legatees by his executor, or to have the legatees furnished with the means to purchase the stock for themselves. See also Purse v. Snaplin, 1 Atk. 413. The use of the words " that I possess " in making a bequest of stock has been held to have reference to stock possessed by the testator at the time of making the will and not the time of his death. Cochran v. Cochran, 14 Sim. 248. A bequest of money does not convey the tes- tator's stock in the corporation. Hothan v. Sutton, 15 Ves. 319; Hundleston v. Gouldsbury, 10 Beav. 547; MuUins v. Smith, IDr. &Sm. 204; Willis v. Plaskett, 4 Beav. 208; Chapman v. Reynolds, 28 Beav. 221; Ogle v. Knipe, L. E. 8Eq. 436; Douglas v. Congreave, 1 Keen, 410, 424; Beck Ex. v. McGillis, 9 Barb. 35, 39. Contra, Waite v. Coombs, 5 De G. & S. 676; Kewman v. Newman, 26 Beav. 218; Jenkins v. Fowler, 63 K. H. 244. Where a testator owns bonds and stocks ■of various corporations, bequests in different sums to different legatees of " my " stocks and bonds at their par value, not describing them particularly, are general legacies; and it is the duty of the executors to make the selection of each legatee's bonds and stocks. In re Hadden's Will, 9 IT. T. S. 453. A legacy of " ten shares of the stock of the W. 274; Innes v. Wylie, 1 Car. & K. 257; Wachtel v. Noah Widows' & O. Soc, 84 N. T. 28, 31; Southern Plank R. Co. v. Hixon, 5 Ind. 165; Niblack on Mutual Ben. Soc, sec. 65; Fitz v. Muck, 62 How. Pr. 69, 74; Downing v. St. Columbia's, etc., Soc, 10 Daly, 262. In Hutchinson v. Lawrence, 67 How. Pr. 47, the court said:—" Again, while these proceedings are not to be governed by the strict rules which apply to actions at law or suits in equity, or even, perhaps, by the rules; which obtain in regard to arbitration, there is, I think, a strong analogy between the principles which govern in arbitrations and those which relate to proceed- ings of this character." In Murdock v. Philips' Academy, 12 Pick. (Mass.) 244, the court held the proceeding to be judicial in its nature and stated somewhat in detail the essentials of valid expulsion proceedings. 1. A monition or cita- tion to the accused to appear; 2. A charge given him to which he is to answer; 3. A competent time assigned for proofs and answers; 4— Liberty of counsel to- defend his cause and to except the proofs and witnesses ; 5 — A solemn sentence after hearing proofs and answers. Though a formal complaint is usually neces- sary, this may be dispensed with in the laws of the society. Bissett v. Daniel, 10 Harr. 493 (case of a numerous copartnership). The constitution of the New York Stock Exchange provides for suspension of insolvent members, and that within a year from the time of suspension such members may apply, for read- mission on showing a settlement with their creditors; also that members guilty of obvious fraud, of which the governing committee shall be the judges, shall on vote of two-thirds of the members of said committee present be expelled. Plaintiff was suspended for insolvency, and chg,rged with obvious fraud. He asked for and was granted an adjournment of the hearing, examined the testi- mony taken, appeared, and was heard and interrogated, and given a full oppor- tunity for self-defence, and was adjudged guilty by a two-thirds vote, and ex- pelled. He did not settle with his creditors within a year, nor apply for read- mission, nor did he object to any of the proceedings. It was held that the court would not declare his suspension null and void. Kuehnemundt v. Smith, 2 N. T. S. 625; 17 N. Y. S. Rep. 7.57. 2 In Fisher v. Keene, tl Ch. D. 353; 49 L. T. Ch. 11, the liability of sueh> •586 EXPULSION, FOEFEITURE, § 528 notices apply in such cases. Notice may be waived by the member's appearance, and entering upon his defence or pleading guilty to the charge.^ Unless the constitution or by-laws provide a different manner of giving notice, it must be personal.^ Where the propo- sition to expel did not obtain the two-thirds vote required to pass it, it was held such failure amounted committees to abuse their power is thus stated by the chancellor: — " One must recollect, too, that the meetings of clubs are not always fair for another reason • -quite independently of any personal impropriety of conduct on the part of the members. . . . Some may say, ' Well, so-and-so is a man we ought to get rid •of, and I shall put in a black ball; ' another may say, ' Oh, we must support the •committee; they have acted to the best of their judgment. They are all honor- able men, men in whom we have the greatest confidence. If we do not support them, they will resign, and it will break up the club ; I shall put in a black ball. ' It is not like an appeal to a judicial tribunal, or even to a guasi-judicial tribtmal. A^ I said before, it behooves a committee, who are a judicial or guosi-judicial tribunal, to be very careful before they expose one of their fellow members to such an ordeal. A committee ought not, as I understand it, according to the ordinary rules by which justice should be administered by committees of clubs, or by any other body of persons who decide upon the conduct of others, to blast a man's reputation forever — perhaps to ruin his prospects for life — without giving him an opportunity of either defending or palliating his conduct. In my opinion upon this ground also, the committee have not acted fairly or properly. I have no doubt they acted according to the best of their judgment, and with the ut- most desire to do what was right, but I think that they have made a mistake, and that the right course is to grant an injunction, so that they may have an •opportunity of re-considering this matter in a fair and impartial spirit." See also Labouchere v. Whamcliffe, 13 Ch. D. 346; Leach's Club Cases, 38. 1 Moxey's Appeal (Pa.). 9 Week. N. Gas. 441; Sperry's Appeal, 116 Pa. 391; 8 Cent. Eep. 215; 9 Atl. Rep. 478; Commonwealth v. Penn. Ben. Soc, 2 Serg. & R. 141; Burton v. St. George's Soc, 2S Mich. 261. 2 Wachtel v. Ifoah Widows' & O. Soc, 84 IS". Y. 28, 31; Birmingham, etc., R. Co. V. Locke, 1 Q. B. 256; Graham v. Van Dieman's Land Co., 1 Hurl. & N. 541; Lewey's Island R. Co. v. Bolton, 48 Me. 451; s. c. 77 Am. Dec. 236; Schenectady, etc, PI. Road Co. v. Thatcher, II ?^. Y. 102; Lexington, etc., R. Co. V. Chandler, 13 Met. 311 ; South Staffordshire Ry. Co. v. Burnside, 5 Ex. 129; Miss, etc., R. Co. v. Gaster, 20 Ark. 455; Cockerell v. C. Van Dieman's Land Co., 26 L. J. C. P. 203; Knight's Case, 2 Ch. 321. The trial resulting in tlie expulsion of a member having been conducted in due form and in good faith by the club, the courts will not inquire into his guilt. Com. v. Union League of Phila., 13.5 Pa. St. 301; 19 A. 1030; 26 W. N. C. 142. The by-laws of ,in incorporated musical society provided that the directors should investigate all charges against members, that any member bringing charges against another should appear personally to prove them, and that a copy of the charges must be served upon the accused. A member who had been charged with improper con- § 528 SUSPENSION AND REINSTATEMENT. 587 to an acquittal upon the charges. It is doubtful if a member could, in such case, be subsequently expelled upon the same charges.^ He certainly cannot without a rehearing upon new notice. Where the charter pro- vided for expulsion after a hearing in such manner as the by-laws may provide, ftid a by-law provided for expulsion on the charges after a hearing on charges, " a copy of which shall be served on the member as charged," it was held that a notice served on a member to show cause why he " should not be expelled for violation of art. 12, sec. 1, of the by-law to wit :— for disobedience of the order of the board of directors on the 9th of March, 1886," was not such a service of a copy of the charges as to be a suflBcient compliance with the statute.^ •duct appeared before the directors without being served with a copy of the charges, and denied the jurisdiction of the directors because the accuser was not present. It was held that an order of expulsion, entered on such charges during his absence, was void, the want of service not having been waived. People V. Musical Mut. Protective Union, 23 N. E. 129; 118 N. Y. 101. Where the articles of a benevolent society provide that " any member who shall refuse or neglect to pay all fines, dues, or contributions quarterly, and who, having been notified by the financial secretary of his indebtedness, shall still neglect or refuse, for sixty days after receiving said notice, to cancel his in- debtedness, shall be dropped frOm the roll of membership," it has no right to drop a delinquent meniber from the rolls unless he has received notice of his de- linquency. People V. Theatrical Mechanical Ass'n, 8N. Y. S. 675; 55 Hun, 608; holding also the evidence that delinquent was absent at the time the notice was mailed to his residence rebuts the presumption of its receipt by him which would ordinarily arise from the mailing of a notice to his place of residence. The constitution of a club gave power to the board of governors to censure, suspend, or expel members for misconduct, but provided that no such penalty should be enforced until after ten days' notice in writing had been given to the member. It was held that, in the absence of any agreement or provision to the contrary, personal notice was required, and notice sent by mail, which in due course, would have been delivered at the member's address ten days previous to the pro- posed action, but which was not received by him personally until nine days pre- vious to then, was insufficient. People v. Hoboken Turtle Club, 14 N. Y. S. 76. 1 Com. v. Guardians of the Poor, 6 Serg. & E. (Pa.) 469, 473. 2 People V. Musical Mut. Protective Union, 47 Hun, 273, holding also that an appearance at the time and place mentioned in the notice to deny the right of; the directors to carry on the proceedings, and a refusal to answer the charges, are not a waiver of a right to have had a copy of the charges served previously. 588 EXPULSION, FORFEITURE, § 529' Where the proceeding was for any cause a nullity, it does not stand in the way of a subsequent expulsion upon due notice. It may be disregarded or the party may be restored to membership and again regularly tried and expelled.-* § 629. Conduct of the trial. — The committee or other body charged with the duty and vested with the power of expulsion must act at a regular or at a special meet- ing called upon proper notice ;^ and it is necessary that a quorum should be present.^ The offences charged against the member must be established upon formal investigation and upon evidence,, and must not rest upon inference alone.* Although a member, against whom proceedings for expulsion have been instituted upon formal charges, fails to appear after due notice, the evidence in support of the accu- sation should be required.* But a committee need not Remedies for improper expulsion and suspension from societies and fraternities discussed under tlie following heads : — Preliminary; Relief in the Society; Re- view by Court ; Distinctions between Unincorporated and Incorporated Societies ; Reinstatement; Legal Remedies ; Action at Law; Jfajidamits; Injunction; and English and American decisions on the subject collected by E. McQuillin, 20 Cent. Law J. 327. 1 Hurst V. N. Y. Produce Exchange, 100 N. Y. 605; 3 N. E. 42; Mem. S. C. in full, 1 Cent. Rep. 206. 2 Payn v. Rochester Mut. Relief Soc, 17 Abb. N. C. 53. 8 Med. & Surg. Soc. v. Weatherly, 75 Ala. 248. As to what constitutes a quorum of a committee charged with the duty of expulsion, see Loubat v. Leroy, 40 Hun, 546; 15 Abb. N. C. 1. In this case it was provided by the con- stitution of a club that a member might be expelled by a two-thirds vote of the governing committee and that a majority of such committee should constitute a quorum. It was held that a two-thirds vote of a quorum of the committee as it existed at the time of the vote was sufficient although vacancies existed. * Schweiger v. Voightlander Benev. Ass'n, 13 Phila. 113. 5 People ex rel. Corrigan v. Young Men's Father Matthew Ben. Soc, 65 Barb. 357 ; Labouchere v. Wliarncliffe, 13 Ch. D. 346. In the last case the Master of the Rolls said: — " The committee are not to form an opinion without inquiry. They are not to take up a newspaper and see that A. B. has written a letter which they may consider scandalous, or that C. D. has been brought up in a police court for drunkenness." For it might well happen that the wrong man was charged, because it was well known that men had given the name of a § 530 STJSPENSION AND REINSTATEMENT. 589 take evidence in legal form, or confine themselves to such evidence only as would be admissible in a court of justice. They may resort to any proper and fruitful source of information, and may take notice of matters of common notoriety and general repute. It is only necessary that they act in good faith, and are convinced as reasonable men of the truth of the charges.^ § 530. Equitable jurisdiction in cases of simple expulsion, — Seldom will courts interfere with the exercise of the right of expulsion, from clubs and associations, where no property rights are thereby affected. The reason they will not, is based upon the assumption that the associates are themselves the best judges of the fitness -and worth of individuals to continue the relationship which, in many cases, could not be fully investigated and unerringly determined before the consummation of the contract of membership.^ The same rules, so i friend or an enemy. Inquiry meant inquiry into tlie facts, and also into what- ever excuse or reason might be given by the member whose conduct is to be inquired into. They should have given notice, if they could, to the member that his conduct was about to be inquired into, and should have given him an opportunity of stating his case to them." ' Leach's Club Cases, 45; Labouchere v. Wharncliffe, 13 Ch. D. 346. ^ Upon this question the language of the court in Rigby v. Connol, 14 Ch. D. 482; 49 L. J. Ch. 328, is clear, luminous and instructive. The learned justice said: — "I have no doubt whatever that the foundation of the jurisdiction is the right of property vested in the member of the society, and of which he is un- justly deprived by such unlawful expulsion. There is no jurisdiction that I am aware of reposed, in this country at least, in any of the Queen's courts to decide upon the rights of persons to associate together when the association possesses no property. Persons, and many persons, do associate together with- out any property in common at all. A dozen people may agree to meet and play -whist at each other's houses for a certain period, and if eleven of them refuse to associate with the twelfth any longer, I am not aware that there is any juris- diction in any court of justice in this country to interfere. Or a dozen or a hundred scientific men may agree with each other in the same way to meet alternately at each other's houses or at any place where there is a possibility of their meeting each other, but if the association has no property, and takes no subscription from its members, I cannot imagine that any court of justice could interfere with such an association, if some of the members declined to associate •with some of the others." 590 EXPULSION, POEPEITURE, § 530' far as applicable, govern questions of expulsion, whether the society be incorporated or voluntary,^ But this policy of non-interference relates to the grounds of expulsion and not to the manner. As has been stated, the proceedings must be fairly conducted, according to the rules of the organization, and must be free from malice and bad faith ;^ otherwise a court of equity will enjoin the threatened expulsion, or, if already consum- mated, a writ of mandamus will lie to restore the mem- ber to his rights.* Some of the expressions of the early English cases on this subject require qualification. They seem to^ lose sight of all distinctions between purely social and other objects for which associations are formed. True, as said in Eigby v, ConnoP if a dozen gentlemen agree to meet occasionally in a casual way, and eleven of them come to the conclusion to no longer associate with the twelfth, there is no law to compel them to do so, however capricious and unreasonable their reasons. But where a constitution and by-laws have been for- mally adopted, and permanency has been given to an in- stitution organized for various objects, it is clear that the contract of membership includes rights which, though they may not be of pecuniary value, are yet substantial and valuable, and cannot be taken away recklessly, and in violation of the plain rules of justice. While the motives of individual members of such bodies- or of committees for voting to expel will not be in- 1 otto V. Journeyman Tailors' P. & B. U., 75 Cal. 308; 17 P. 217; s. c. 7 Am. St. Rep. 156, 158; Sale v. First Regular Baptist Church, 62 la. 26; 17 N. 143; s. c. 49 Am. Rep. 1.S6; Rigby v. Oonnol, 14 Ch. D. 482; s. c. 49 L. J. Ch. 328; Burke v. Roper, 79 Ala. 138. 2 Supra, §§ 527, 528. 8 Infra, §648.SeealsoStarkB'kv. U.S. PotteryCo., 34 Vt. 144; Dedham Inst.,, etc., V. Slack, 6 Cush. 408; Hiss v. Bartlett, 6 Am. Dec. 776; Austin v. Searing,. 69 Am. Dec. 665, n. * 14 Ch. D. 482; S. C. 49 L. J. Ch. 328. § 631 StrSPENSION AND REINSTATEMEKT. 591 quired into, yet where the proceeding on its face shows gross injustice or a violation of the rules, a ground is furnished for equitable interference.^ § 531. Same, where property interests are affected There is an important distinction between cases of sim- ple expulsion from the enjoyment of the personal privileges of membership and those where such expul- sion has the effect of forfeiting property interests. In the latter class of cases, courts will much more closely scrutinize the proceedings and more readily interfere to protect those interests and redress wrongs thereto.2 1 Otto V. Journeyman Tailors' P. & B. U., 75 Cal. 308; 17 P. 217; s. C- 7 Am. St. Rep. 150, 159, citing Hirsch on Fraternal Societies, 56; Dawkins v Antrobus, 44 L. T. Rep. 557; s. c. L. R. 17 Ch. D. 615; Lambert v. Addison, 46 L. T. 20. In Otto v. Journeyman Tailors', etc., Union, supra, th'e court say:—" We are referred to the provision of appellant's constitution, which pro- vides that ' any member having a grievance shall have the right to lay his case before the central body, who shall take action thereon, and whose decision shall be final.' No doubt, when an action is properly taken in the manner indicated, it is final and the courts will not interfere; but when, under the guise of remedy- ing the grievance of a member, the central body acts in bad faith and maliciously makes the subject of the grievance a pretext for oppression and wrong, its action may however, to that extent, be the subject of review." In Gardner v. Free- mantle, 24 L. T. 81, Lord Romily said:—" In some cases this court interfered with the exercise of that paramoimt authority, but only where there is a moral culpability, or if the decision is arrived at from fraud, personal hostility or bias. But in cases of this description all that this court requires is to know that the persons who were summoned really exercised their judgment honestly. The court will not consider whether they did rightfully or wrongfully." 2 People V. Bd. of Trade, 80 111. 134; Hopkinson v. Marquis of Exeter, 37 L. J. Ch. 173; s. c. 5 L. R. Eq. 63; Eigby v. Connol, 14 L. R. Ch. D. 482; State V. Odd Fellows, etc., 8 Mo. App. 148; Dawkins v. Antrobus, 17 L. R. Ch. D. 615; 44 L. T. 557; Pulford v. Fire Dept., 31 Mich. 458; Olery v. Brown, 51 How. Pr. 92; Thompson v. Soc. Tammany, 17 Hun, 305; Milroy v. K. of H. Sup. Lodge, 28 Mo. App. 463; Otto v. Jour. Tailors', etc., Union, 75 Cal. 308; 17 Pac. Rep. 217; Bauer v. Sampson Lodge, 102 Ind. 262; 1 K E. 571; White v. Brownell, 2 Daly, 329; Austin v. Searing, 16 N. T. 112; Supreme Council v. Garrigus, 104 Ind. 133; 3 N. E. 818; Schmidt v. A. Lincoln Lodge, 84 Ky. 490; 2 S. W. 156; Lewis v. Wilson, 2 IST. Y. S. 806. A member of a benevolent mu- tual society cannot be expelled without notice, and in his absence, although the rules of the society do not require notice. Sup. Lodge A. O. U. W. v. Zuhlke, 30 m. App. 98; aff'd, 21 N. E. 789; 129 111. 298; The fact that a motion was made to suspend a member of a mutual benefit association, but the presiding ■593 EXPULSION, FORFEITURE, § 531 Important questions sometimes arise on contracts in mutual benefit societies which contain the right. to participate in various ways in sick and death benefit and endowment fund^. Such societies are not only- social organizations, but are mutual insurance com- panies. If the courts could deal with them in their character of mere social organizations, the principles set forth in the last preceding section would be appli- cable to them. But the members to whom certificates are issued by such societies acquire property rights in the society of an important character ; and in dealing with these rights, it is highly essential that the courts should confine themselves strictly to the terms of the contract which the members have made among them- selves.^ " It would be a very dangerous doctrine to apply to societies which, in addition to the character of social clubs, possess also the character of life insur- ance companies, and which undertake to insure the lives of their members for the benefit of their families, paying them a large sum in the event of the death of the member, the rule that they can expel their mem- bers, and thereby deprive their families of the benefit of this insurance, it may be, after the member has paid assessments for many years, and when, by reason of age or bad health, he has passed into such a state that new insurance upon his life cannot be procured, for causes not named in their constating instruments, or in the public statutes, or such as the members of officer refused to put the motion to a vote on the ground that it was contrary to the rules, does not constitute such a suspension as trill defeat the right of re- covery of the beneiiciary in his certificate after his death. Grand Lodge A. O. U. W. V. Brand (Neb.), 46 K. W. 95. A member of a mutual benefit associa- tion, who is expelled or suspended, without notice or trial, has a cause of action against the association. Ludowiski v. Polish Roman Catholic St. Stanislaus Kostka Benevolent Ssciety, 29 Mo. App. 337. ' Mulroy v. Knights of Honor, 28 Mo. App. 463; Grand Lodge v. Eisner, 26 Mo. App. 108; Coleman v. Enlghts of Honor, 18 Mo. App. 189. § 532 SUSPENSION AND REINSTATEMENT. 593 the subordinate lodge may, in the excitement of the hour, deem a good ground of expulsion. We hold in this case, as we have held in other cases of this kind, that the rights of the beneficiary in such a certificate are strictly a matter of contract ; that this contract is to be found in the terms of the certificate itself, in the statutes of the society, and, in case of a society incor- porated under the laws of this state, in the statutes of this state relating to such societies." ^ The principles indicated in the language just em- ployed are entirely applicable to other cases involving contracts, conferring upon the holders pecuniary inter- ests in corporate funds in addition to membership priv- ileges .2 § 532. Remedies inside association must be exhausted.— It is well settled that unless the association, or the tri- biinal within it, having jurisdiction of the matter, has acted in such total disregard of rules as to render the proceeding a nullity, or that the aggrieved party has had no notice of the proceeding, he must first exhaust the remedies for redress, if any, provided by the society itself,* unless property interests are involved. In the 1 Mulroy v. Knights of Honor, supra, per Thompson, J.; see article by same Judge and auttior Marcti, and April number, Am. L. Kev. 1891. 2 See Osceola Tribe v. Schmidt, 57 Md. 98; Woolsey v. Independent Order, €tc., 61 la. 492; 16 N. E. 576; Sperry's Appeal, 116 Pa. St. 391; 9 A. 478; 8 Cent. Kep. 115; Grosvenor v. United Society, etc., 118 Mass. 78; Anacosta Tribe v. Murbach, 13 Md. 91; Dawkins v. Antrobus L. E., 17 Ch. D. 615; aff'd, 44 L. T. Kp. (N. S.) 557; White v. Brownell, 4 Abb. Pr. (N. S.) 162; Hopkin- son V. Marquis of Exeter, L. R. 5 Eq. 63; Burton v. St. George's Soc, 28 Mich. 261; Famsworth v. Storrs, 5 Cush. 412; Dolan v. Court of Good Samaritan, 128 Mass. 437; Karcher v. Supreme Lodge, 1.37 Mass. 368; Hutchinson v. Lawrence, 67 How. Pr. 38; Jones v. National, etc., Ass'n (Ky.), 2 S. W. Rep. 447; Loubat V. Leroy, 15 Abb. N. C. 1; Olery v. Brown, 51 How. Pr. 92; Lafond v. Deems, 8 Abb. N. C. 388; s. c. 81 N. T. 507. ' Karcher v. Sup. Lodge, etc., 137 Mass. 368; Lafond v. Deems, 8 Abb. N. C. 388; s. c. 81 N. Y. 508; Poultney v. Bachmann, 31 Hun, 49; Dolan v. Court Good Samaritan, 128 Mass. 437; Chamberlain v. Lincoln, 129 Mass. 70; Gros- 38 594 BXPULSIOK, POEFEITTJEE, § 533: latter case, courts will interfere for the purpose of pro- tecting rights of members in all proper cases, whether the society be incorporated or not ; and when they have- acquired jurisdiction will follow and enforce as far a& applicable the proper principles and remedies.^ The action of the association honestly taken accord- ing to its rules, on a question which it has authority to decide upon due notice, cannot be collaterally reviewed by the courts.'^ But if the action of the body be a usurpation, or without notice or authority, it cannot affect the legal rights or change the legal status of any'^ one ; and the obligation to appeal is not imposed when the judgment is void for want of jurisdiction.^ § 533. Presumption in favor of regularity. — The same presumption in favor of the regularity of expulsion proceedings prevails as in the case of transactions of corporate bodies generally where there is no question as to jurisdiction.* It is otherwise where the expul-. sion involves the loss of property rights. In that case, courts will look into the whole question, untrammelled by presumptions and probabilities.^ The whole matter venor v. United Soc, etc., 118 Mass. 78; White v. Brownell, 4 Abb. Pr. (N. S.) 162; s. c. 2 Daly, 329 ; Carlen v. Drury, 1 Ves. & B. 154; Harrington v. Workingmen's Ass'n, 70 Ga. 340; Lewis v. Wilson, 2 N. T. S. 806; aff'd, 121 N. T. 284; 24 N. E. 474; Bums v. Brick-Layers', etc., Ass'n, 10 N". T. S. 916; Bes I ad^udicata in church courts discussed, and American decisions bearing upon the subject collected by W. H. Burnett, 30 Cent. L. J. 73. 1 otto V. Jour. Tailors', etc., Union, 75 Gal. 308; 17 P. 217. 2 Karcher v. Sup. Lodge, etc., 187 Mass. ."368. 8 Bacon, Ben. Soc. & L. Ins., sec. 107; Hall v. Sup. Lodge Knights of Honor, U. S. Circuit Ct. E. D. Ark., 24 Fed. Kep. 450; Mulroy v. Sup. Lodge Knights of Honor, 28 Mo. App. 463. " It may be likened to a judgment rendered by a court which has no jurisdiction of the subject-matter or the person. No appeal or writ of error is necessary to get rid of such a judgment ; it is void in all courts and places." Hall v. Sup. Lodge, etc, supra. * Bachman v. N. T. Arbeiter, etc., 64 How. Pr. 442; Harmon v. Drether, 1 Speer Eq. 87; Shannon v. Frost, 3 B. Mon. 253; Burton v. St. George's Soc. 28 Mich. 261. 5 People V. Fire'Btept., 31 Mich. 458; Peoplev. Medical Society, 32 N. T. 187. § 534 SUSPENSION AND REINSTATEMENT. 595 is well summarized as follows : "In seeking to obtain rights under the by-laws or rules of a society, the member must proceed as therein required, and gener- ally exhaust the remedies established by the by-laws and rules before applying to the courts for reHef. If no tribunal is established by the rules, he may at once resort to the courts. In the case, however, of property rights, it has been held that he may or may not leave the determination to the tribunals of the order ; he may sue at once, or he may consent to an adjudication by the society, in which latter case he is bound as by an arbitration, provided no principles of natural justice have been violated by thie tribunal, and the proceed- ings are regular,"^ § 534. Forfeiture and suspension of contract by its terms. — The certificates of mutual benefit societies usually provide for payment by the holder of assessments at specified times ; and further, that non-payment shall cause a suspension of membership privileges, and if such failure continues, a forfeiture of all rights of mem- bership, including all claim against the society for T^enefits. Such provisions are in the nature of penalties and are strictly construed.^ The assessment must be made in strict conformity with all its laws, and there is no presumption in favor of the regularity or legality of the acts of the directors in making assessments, or other steps by which a member's rights are forfeited.^ But no judicial determination either by a tribunal inside the association, or elsewhere, is necessary to effect a 1 Bacon, Ben. Soc. & L. Ins., sec. 116. - Bates V. Detroit Kut. Ben. Ass'n, 51 Mich. 587; Underwood v. la. Legion of Honor, 66 la. 1.34; 23 N. W. 300; Passenger Conductors' Ass'n v. Bimbaum (Pa.), 10 Cent. Kep. 63; 11 Atl. 378. 8 Supra, § 531. • 596 EXPULSION, FORTBITUKB, , § 634r suspension or forfeiture of rights on account of non- payment of assessments, where the same is provided for in the contract or in the laws ; ^ and a member may, by contract, dispense with notice.^ A simple provision, however, to the effect that for the non-payment or other default or act a member shall forfeit his contract, is not self- enforcing. There must be some action or proceeding on the part of the society. This rule is of general application.^ The effect of a suspension is to deprive the member sus- pended of all rights and benefits, except to be re- instated upon taking the prescribed steps for that purpose.* Suspension from mutual benefit societies usually results from the non-payment of dues and assessments. It is generally held that, if a member die while sus- pended, his beneficiary cannot recover the benefit from the society ; and in one case this rule was applied so far as it affected a supreme lodge, although the subor- dinate lodge from which he had been suspended con- tinued to treat him as a member after default.^ After, by affirmative action by the society, a member has been suspended, and having notice of such action, he does not exercise the right of appeal secured by the laws of the organization, such action, if regular, is final, and cannot be assailed in an action on the certifi- cate after the member's death.® 1 Borgraffe v. Knights of Honor, 32 Mo. App. 127. 2 McDonald v. Koss-Lewin, 20 Hun, 87. 3 See Med. & Surg. Soc. v. Wetherly, 76 Ala. 248; State v. Trinity Chui-ch, 45 N. J. Eq. 230; Scheu v. Grand Lodge, etc., Ind. Foresters, 17 F. 214; Olm- stead V. Farmers' Mut. F. Ins. Co., 50 Mich. 200; Columbia Ins. Co. v. Buckley, 83 Pa. St. 293; Supple v. la. State Ins. Co., 58 la. 29; 11 K. 716. * Knights of Honor Supreme Lodge v. Abbott, 82 Ind. 1 ; Borgraefe v. Knights of Honor, 22 Mo. App. 127; Manson v. Grand Lodge, 30 Minn. 509. 5 Borgraefe v. Knights of Honor, 22 Mo. App. 127. " Karcher v. Supreme Lodge K, of H., 137 Mass. 368; Chamberlain v. Lin- § 535 SUSPENSION AND REINSTATEMENT. 59T Undoubtedly, members may so contract, or provisions of the laws may be such, that the mere non-payment within a specified time is a repudiation of the contract, and ipso facto effects a forfeiture of all rights under it.^ § 535. By-laws imposing forfeiture require statutory sanction — The common law disfavor of forfeitures ex- tends to by-laws of associations providing forfeitures as penalties. These are of no force or effect unless their adoption be authorized by statute. " No such power is consistent with common law or ancient right, and it coin, 129 Mass. 70; Mulroy v. Knights of Honor, 28 Mo. App. 463. Under a by-law of a benevolent association, providing for payment of benefits in case of sickness, etc., to " every member in good standing on the books," a member cannot be deprived of such benefits because in arrears for dues, where the amount of the dues in arrear is less than the benefits to which he was entitled when they became due. Brady v. Coachman's Benev. Ass'n, 14 N. T. S. 272. 1 111. Masons' Benev. Soc. v. Baldwin, 86 111. 479; Am. Mut. Aid Soc. v. Kilburn, 7 Ky. L. Rep. 750; Toe v. B. C. Howard M. B. Ass'n, 63 Md. 86; Rood V. Railway Passengers', etc., Ass'n, 31 Fed. Rep. 62; Blanchardv. Atlantic Mut. F. Ins. Co., 33 N. H. 9; Madeira v. Merchants' Exch., etc., Soc, 16 F. 749; 5 McC. 258; McDonald v. Ross-Lewin, 29 Hun. 87. In Borgraefe v. Knights of Honor, 22 Mo. App. 127, 142, the court, per Thompson, J., this principle is more fully discussed as follows : — " It was argued in behalf of the plaintiff, at the bar, that there was no forfeiture in this case, because the declaration of a forfeiture is a judicial act, and neither Ada Lodge, nor any other judicatory having the power to declare a forfeiture, had so adjudged. This contention has no founda- tion, in view of the fact that under provisions of sec. 3, of law 2, above quoted, it is not necessary that the lodge or any other judicatory of the order should ad- judge a forfeiture against a delinquent member for non-payment of an assess- ment for a death benefit, but that, on the contrary, the suspension attaches by operation of law. There is, in view of this provision, a plain distinction be- tween this case and cases which have arisen under the constating instruments of mutual insurance companies, and other benevolent orders of this character, where the governing statute recites that for the non-payment of dues, or other named delinquency, the member may be suspended by the lodge or other judica- tory. Here the member Is not suspended, until the lodge or other designated judicatory exercises the power of suspension. The reason is that, whatever the lodge or the order may have against the member for an infraction of its rules, must be sought in conformity with the laws and rules of the order. The remedy therein prescribed must be exhausted before resort can be had to the judicial courts. But where, as in this case, the suspension attaches by an operation upon an event named, and the member dies before the suspension has been set. aside, in conformity with the rules of the order, there can be no recovery upon his benefit certificate." 698 EXPULSION, POEFEITUEB, § 536 cannot be obtained from anything but the sovereignty. The only means for the enforcement of corporate charges and penalties is by action. Summary means and methods unknown to the common law must be authorized by express authority. And it would not be reasonable to enforce a pecuniary obligation or penalty by means disproportionate to its importance," ^ § 536. Reinstatement. — After final expulsion or forfeit- ure there can be no such thing as a reinstatement. If the party still desires membership he can only obtain it as any other outsider. But a suspension only has a similar effect to a nisi decree or an interlocutory order of a court. The suspended member is only required to do things prescribed as a condition to reinstatement. No aflBrmative action is required by the society in recogni- tion of the renewed relation as a general rule. Thus it was held that where a suspended member might be re- stored upon payment of arrearages, he was not required to tender the arrearages to a meeting of the lodge ; that payment to the proper financial ofiicer was sufiicient ; and that no assent or action on the part of the lodge was necessary to his complete restoration.^ Sometimes, however, a member can only be suspended by action of the society or a managing board thereof.^ In other societies it is expressly provided that applications for reinstatement upon lapsed and forfeited certificates must 1 People V. Fire Dept., 31 Mich. 458, 465, per Campbell, J. See also, Wescott V.Minnesota Mining Co., 23 Mich. 145; Matter of Long Island R. Co., 19 Wend. (N. Y.) 37. 2 Manson v. Grand Lodge A. O. U. W., 30 Minn. 509; 16 N. W. 395. Under a by-law of a benevolent society providing that any subordinate lodge in arrears should stand suspended, and that no death benefit should be paid during the sus- pension, it was held that the by-law was not to be construed as cutting off the right to receive the benefit except while the suspension continued. Knights of Honor v. Abbott, 82 Ind. 1. 8 See Olmstead v. Mut. F. Ins. Co., 50 Mich. 200; 15 N. W. 82. § 536 SUSPENSION AND REINSTATEMENT. 599 be passed upon by the body or a committee, and that it can only be granted upon a satisfactory excuse being shown. In such cases, the restoration to rights is discretionary with the society, or its designated agents, and the decision is judicial in its nature. But such judi- cial function must not be abused. Courts will not be concluded by an arbitrary decision upon the question, and will examine into the validity of the excuses offered for non-payment.i ^ Dennis v. Mass. Ben. Ass'n, 47 Hun, 338. In this case the defendant asso- ciation had issued to one Dennis a certificate of membership to which was an- nexed among other rules and conditions one providing that the member should, within thirty days after the mailing of a notice of assessment to pay the same, and that if the assessment should not be received by the company within the time the contract should lapse, and be void; but that " for valid reasons to the officers of the association (such as a failure to receive notice of an assessment) he may be reinstated upon paying assessment arrearages." After receiving notice of an assessment, but before the, expiration of the thirty days, the member was stricken with apoplexy and remained unconscious until several days after the expiration of the thirty days, when he died. The beneficiary then tendered the assessments due and offered these facts as an excuse for the member's de- fault; but the officers declined to receive them or to acknowledge the sufficiency of the excuse offered. An action having been brought by the beneficiary for the benefit, the trial coiu-t had directed a verdict for the defendant; but the appel- late court held this to be an erroneous ruling, and that the question whether the facts showed a " valid reason " within the meaning of the contract should have been submitted to the jury. The court reasoned thus : " What right would the member have had if he had recovered his reason on the day he died. In the first place, the words were intended to be operative. The defendant obtained the premiums on agreement to pay assessments upon them. He assured the mem- bers that, if a valid reason was furnished for the default, it should not be ex- clusive. The use of the restrictions as to the validity of the excuse to the offi- cers of the company did not mean to make them sole arbiters of the validity of the reason. The company illustrate by citing an instance of a good excuse by the term ' such as a failure to receive notice of an assessment.' If an assess- ment notice had not been received without the fault of the member, can it be doubted but that the officers were bound to acknowledge it and reinstate the member upon payment of arrearages ? The company say that is a good excuse, and impliedly say that other good reasons for the default must be acknowledged also. The court of appeals have decided that a discretion given to trustees is not personal. Is the reason assigned a valid reason under the contract? There can be no doubt of this fact. The assessed had thirty days, and before he paid the assessment he was rendered powerless by sudden calamity — his intent to pay is manifest by numerous previous payments. This was the construction put on the rule by the defendant. They again, after he was unconscious, notified the member of the forfeiture for non-payment and that the contract might be ■600 EXPULSION AND REINSTATEMENT. ' § 536 Considerable conflict of views on the subjects of suspension, forfeiture, and reinstatement will be ob- served in the authorities cited which in some cases cannot be reconciled, while in others the conflicting views result from difierences in the statutory provis- ions and their construction. Tenewed if in good health. This condition, in respect to good health, is not in the rule, and the officers had no right to add it in the rule. If a valid reason existed for the defavdt the member must be reinstated, because of the valid reason for the default, and not because he had a valid reason and was in good health. The rule, as created by the company in this respect, would exclude cases where it was vital that they should be included in the contract. If the good reason was rejected in cases of ill health or death the insured would lose a real value in the contract. If members become sick or die the policy is at an end, no matter how completely the default may be excused. This would make a very unfair con- tract, not within the words of the rule, and one whieh the company would be unwilling to print in its rules." To same effect are Hull v. Hull, 24 N. Y. 647; The Duplex Boiler Co. v. Garden, 101 Id. 387; 4 N. E. 749; Van Houtenv. Pine, 38 N. J. Bq. 72; Oats v. Supreme Court of Foresters, 4 Ont. Bep. 535. KF 1384 S74 Author Spelling, Thomas Crisp Vol. 1 Title A treatise on the law of private corporations, ... Copy Date Borrower's Name