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 liliimtiitf ■'{'''■
 
 FIELD 
 
 ON 
 
 THE LAW 
 
 OF 
 
 Private Corporations. 
 
 BY 
 
 GEORGE W. FIELD, 
 
 AUTHOR OF ■• A TREATISE ON THE LAW OF DAMAGES," ETC., ETO. 
 
 REVISED BY 
 
 H . G. WOOD 
 
 ALBANY, N. Y.: 
 JOHN D. PARSONS, Jr., PUBLISHER. 
 
 1883.
 
 Entered, according to act of Congress, in the year eighteen hundred and eighty-three, 
 
 By JOHN D. PARSONS, Jr., 
 
 In the office of the Librarian of Congress, at Washington. 
 
 T 
 
 WEED, PARSONS AND CO MP A NT, 
 PRINTERS AND ELECTROTYPERS, 
 ALBANY, N. Y.
 
 PREFACE, 
 
 In the revision of this work the object lias been to bring into 
 one vohime the Largest possible amount of useful and practical 
 matter, without essentially impairing the plan of the autlior or 
 destroying the symmetry of his work. Some portions of tlie original 
 text, which it was believed could reasonably be dispensed with, 
 have been eliminated and replaced by other matter, and other 
 matter, covering just one hundred and two pages more than the 
 original work, has been added to it. The original work, in my 
 judgment, was an excellent one, and much better adapted for 
 practical use by the profession than any which has been published. 
 In going over the topics treated by the author 1 have found on 
 every page evidences of careful research, conscientious study and 
 an honest purpose on his part to give to the profession a book 
 upon the vast topics covered by it, which should be of value to 
 them, and I sincerely trust that my labors have not impaired the 
 symmetry or the excellence of his work. If my task had been to 
 write a new work upon the subject, my plan might have been 
 somewhat different from the author's, as I have always believed 
 that a subject, involving so many nice and intricate questions as 
 this one does, cannot be satisfactorily treated in a single volume, 
 and that a work which merely covers the outlines of a subject, 
 and confines itself to the mere statement of general rules, is never 
 entirely satisfactory to the practicing lawyer, who, in the prepara- 
 tion of .his cases, desires to find the exceptions to, or the adjudged 
 application of, the rules, rather than the rules themselves, with 
 which he is supposed to be familiar. I know that the tendency 
 of authors latterly is to condense the law into rules, within a 
 brief compass, but I think that the profession will agree with me 
 that mathematical certainty is not an element of legal rules or 
 propositions, and that the exceptions to these rules, are of as 
 
 75599B
 
 iv Preface. 
 
 much importance as the rules themselves, and that it is the 
 duty of an author to note these exceptions as fully as possible, 
 which, upon a subject which has attained such proportions as that 
 involved under the head covered by this treatise, cannot be done 
 in a single volume. Yet I believe that this work will be found 
 to be of more practical value to the profession than any other, 
 and that it will serve as a useful guide upon many heads of the 
 subject involved, not covered by any other work upon the subject.
 
 TABLE OF CONTENTS. 
 
 CHAPTER I. 
 
 WHAT ARE — ORIGIN AND HISTORY OF. 
 Sec. Page. 
 
 1. What are corporations, and kinds of 1 
 
 2. Various kinds of corporations 3 
 
 3. Distinction between public and private corporations 6 
 
 4. Quasi corporations 7 
 
 5. Origin and early history of private corporations 8 
 
 CHAPTER n. 
 
 HOW CORPORATIONS ARE CREATED. 
 
 6. Creation an act of sovereignty 9 
 
 7. Creation by royal charter 10 
 
 8. Creation by act of parliament 11 
 
 9. Corporations at common law and by prescription 12 
 
 10. How created in this country 13 
 
 11. Power of congress to create 13 
 
 12. Sovereign authority of legislatures 14 
 
 13. General statutes of incorporation . . 15 
 
 14. The national banking law 17 
 
 15. Of the power to delegate authority to create 18 
 
 16. Of the power of territorial legislatures to create 18 
 
 17. Corporations by prescription in this country 19 
 
 18. Foreign joint-stock companies may be corporations 20 
 
 19. The corporate name 23 
 
 20. The location of corporations 26 
 
 21. Words of incorporation in royal grants 27 
 
 22. Common-law incidents of a corporation 28 
 
 23. Acceptance of the grant 28 
 
 24. Mode of acceptance 30 
 
 25. Same continued 31 
 
 26. Acceptance must be unconditional 31
 
 vi Table of Contents. 
 
 Sec. Page. 
 
 27. Acceptance under general laws . . 32 
 
 28. The term, "constating instruments " 33 
 
 29. Organization of a corporation 36 
 
 CHAPTER III. 
 
 PRIVATE CORPORATIONS — NATURE AND CHARACTER OF. 
 
 80. Distinction between public and private corporations 38 
 
 31. Legislative control of public corporations 39 
 
 32. Private corporations — doctrine in reference to legislative control 
 
 over 41 
 
 33. Immunity does not exempt property from legislative control 45 
 
 34. Power of the legislature to regulate the charges of railroads 46 
 
 35. Ground on which legislative power is predicated 48 
 
 36. Reason for the exercise of such power 51 
 
 37. Legislative control over rate of charges by railroad companies. . . 53 
 
 38. Subsequent grants do not impair the contract — construction of 
 
 grants <- 56 
 
 39. Reservation of power in the legislature 59 
 
 40. Right to resume based upon misuse or abuse of its franchise 63 
 
 41. The power to resume cannot be exhausted 63 
 
 42. General statutes reserving tlie power 63 
 
 43. Amendments of charters . . ; 64 
 
 44. Repeal of charter 65 
 
 45. General implied powers of 65 
 
 46. Powers conferred or limited by statute ... 66 
 
 47. Corporate powers limited to the object of the grant 67 
 
 48. Distinctions between corporate and copartnership associations ... 70 
 
 CHAPTER IV. 
 
 PERPETUAL SUCCESSION. 
 
 49. The doctrine of immortality 73 
 
 50. The advantages of perpetual succession 73 
 
 CHAPTER V. 
 
 MEMBERS STOCKHOLDERS AND STOCK. 
 
 51. Composition of private corporations 78 
 
 52. The government may constitute a member 79 
 
 53. Admission and election of members and officers 81 
 
 54. Disfranchisement and expulsion of members 81 
 
 55. Quasi corporations 82 
 
 56. Membership under general statutes 90 
 
 56a. Certificates of stock, nature of, etc 91
 
 Table of Contents. vii 
 
 Sec. Page. 
 
 57. Management by directors <J4 
 
 58. Shareholders are members — right to vote 95 
 
 59. Transfer books of company 97 
 
 59a. Rights of corporation in stock, lien, etc 100 
 
 60. Executor of stockholder, rights of 106 
 
 61. Right to vote by proxy or attorney 106 
 
 62. Matters that stockholders are presumed to know 107 
 
 63. Personal liabilities of, under statutes 108 
 
 64. Cause of action, accnies when 110 
 
 65. Intentional deceit as to organization, etc 112 
 
 66. General liabilities of, on subscription to stock 114 
 
 67. Conditions provided bj' the constating instruments 116 
 
 68. Special disabilities created by charter 118 
 
 69. Condition must be complied with 118 
 
 70. Conditional subscriptions , 120 
 
 71. Company may accept payment in labor, etc 122 
 
 73. The condition may be waived 123 
 
 73. When the condition is void 123 
 
 74. Conditions which will avoid the whole contract 125 
 
 75. Conditional subscriptions continued 127 
 
 76. Fraudulent subscriptions 130 
 
 77. Subscriptions in contemplation of incorporation 131 
 
 78. Fraud in relation to subscriptions 132 
 
 79. Rules depend upon statutes or constating instruments. 136 
 
 80. Defense to subscriptions on other grounds . 137 
 
 81. Changes in charter. . . 1 39 
 
 82. Assessments and calls for payments 141 
 
 83. Promise to pay, effect of, by whom calls should be made 142 
 
 84. Diversion of capital to other pui'poses 143 
 
 85. Forfeiture of stock ... 145 
 
 86. Assessments — rules in relation to 148 
 
 87. Power to lay, cannot be delegated 149 
 
 88. Statutory power must be followed 150 
 
 89. Several assessments may be laid at one time, when 150 
 
 90. Notice of assessments or calls 151 
 
 91. Sufficiency of 152 
 
 92. Rights of stockholders to dividends 153 
 
 93. Right of purcliaser to dividends 155 
 
 94. Effect of declaring dividend 158 
 
 95. A stockholder may sue for his dividends 159 
 
 96. Income on stock in trust 159 
 
 97. Money in hands of directors 160 
 
 98. Right to sell and assign shares 161 
 
 99. Transfer of stock 162
 
 viii Table of Contents. 
 
 Sec. 
 
 100. Power of attorney to transfer, presumption arising from 170 
 
 101. Liabilities of assignees to corporations 171 
 
 103. Liability of purchasers from trustees 173 
 
 103. Right of trustee to pledge 173 
 
 104. Rights of cetstui que trust against purchaser 175 
 
 105. Stockholder's right to vote — holding stock constitutes right. . . 176 
 
 106. Right of stockholders to access to books 177 
 
 107. Holders of preferred stock 178 
 
 108. "When it can be issued — dividends on 178 
 
 109. Scrip and preliminary subscriptions 179 
 
 110. Stock defined, etc 180 
 
 111. Issuing certificates of shares 181 
 
 112. Certificates unlawfully issued 183 
 
 113. Fraud in issuing stock certificates 183 
 
 114. Shares and income — cliaracter and quality of, as property 183 
 
 115. Interest of stockholders in corporate property 184 
 
 116. How stockholder's interest is conveyed 185 
 
 117. Character and quality of certificates 186 
 
 118. Transfer of shares — how made 188 
 
 119. Effect of assignment and delivery 190 
 
 120. Refusal of the corporation to transfer 192 
 
 121. Contracts for the transfer of shares 196 
 
 122. Liens of the corporation on stock 197 
 
 123. Company may refuse to transfer, when 198 
 
 124. Instances where corporation has been held justified in refusing 
 
 to transfer 199 
 
 125. Corporation may be compelled to transfer 200 
 
 126. Stock subject to execution against assignor, until transferred. . , 201 
 
 127. Stockholder's right of action against the corporation 202 
 
 128. When stockholder may have injunction against corporation. . . . 203 
 
 129. Liability of the stockholders in equity to creditors 205 
 
 130. Overissued, and "watered stock. " 206 
 
 CHAPTER VI. 
 
 DIRECTORS. 
 
 131. Directors — election of 211 
 
 132. Relation of, to stockholders 213 
 
 133. Powers of directors 214 
 
 134. Same continued 215 
 
 135. Board of directors or managers 216 
 
 136. General powers of and limitations thereon 216 
 
 137. Implied powers of 217 
 
 138. Acts not within the scope of their powers 218
 
 Tablk of Contents. ix 
 
 Sec. Page. 
 
 139. Powers conferred by the fundamental law 219 
 
 140. Powers depend upon interpretation ►. . . . 221 
 
 141. Powers not conferred upon directors remain in the corporate 
 
 body 221 
 
 142. The directors cannot change the character and objects of the cor- 
 
 poration 223 
 
 143. Directors as agents 225 
 
 144. Distinction in Massachusetts 226 
 
 145. Rule in England as to the authority of directors 225 
 
 146. Delegation of authority 227 
 
 147. Ratification of agent's acts 232 
 
 148. Same continued 236 
 
 149. Effect of knowledge of unauthorized acts 237 
 
 150. Effect of ratification 239 
 
 151. Directors under the national banking law 239 
 
 152. Personal liability of directors 240 
 
 153. Same continued ' 242 
 
 154. The fiduciary character of directors 243 
 
 155. Same continued 244 
 
 156. They cannot manage the affairs of the corporation for their per- 
 
 sonal benefit 247 
 
 157. Contracts by directors with corporation 248 
 
 158. Instances where they are not personally liable 253 
 
 159. Where they act without authority 255 
 
 160. Liability as partners 256 
 
 161. Directors de facto 256 
 
 162. Compensation of 257 
 
 163. Cannot increase their own compensation 259 
 
 164. Meetings of directors 266 
 
 CHAPTER VII. 
 
 OFFICERS AND AGENTS GENERALLY. 
 
 165. Necessity for corporate agents 267 
 
 166. General limitations on the authority of agents 268 
 
 167. Directors as agents ... 268 
 
 168. Appointment of agents, use of seal, etc 269 
 
 169. What is within the scope of the agent's authority 271 
 
 170. Powers implied by virtue of an office 272 
 
 171. Powers of president 274 
 
 172. Authority by usage 277 
 
 173. Apparent authority 277
 
 X Table of Contents. 
 
 Sec. Page. 
 
 174. Distinction between executed and unexecuted contracts, where 
 
 the agent exceeds his authority 278 
 
 175. Limitations of power as to time 279 
 
 if 6. Mode of executing contracts by agents 281 
 
 177. How contracts by, should be executed 382 
 
 178. Id 286 
 
 179. Ultra mres contracts by agents . . . 286 
 
 180. Same continued 287 
 
 181. Parties dealing with an agent must take notice of his authority.. . 287 
 
 182. Delegation of authority by agents 290 
 
 183. Same continued 291 
 
 184. Powers expressly conferred 292 
 
 185. Ratification of acts of agents 292 
 
 186. The doctrine of ratification applicable to corporations 294 
 
 187. Same continued 295 
 
 188. Personal liability of agents 296 
 
 189. Forms of executing power by agents 297 
 
 190. When agent personally bound '. 298 
 
 191. Where there is no principal 298 
 
 192. Liability of agent in case of misrepresentation of his authority. . . 299 
 
 193. Matters of which parties dealing with agents are bound to take 
 
 notice .... 301 
 
 194. Same continued 302 
 
 195. Liability of agents for violation of duties 302 
 
 196. Compensation of officers and agents. 303 
 
 197. Frauds of officers and agents 308 
 
 198. Proof of agency 308 
 
 CHAPTER VIIL 
 
 CORPORATE MEETINGS. 
 
 199. How the will of the corporate body is expressed 310 
 
 200. Notice of corporate meetings 311 
 
 201. Common-law doctrine relating to notices 313 
 
 202. Waiver of notice — presumptions 315 
 
 203. Adjourned meetings 316 
 
 204. General and special meetings 317 
 
 205. The majority at corporate meetings may express the corporate will 318 
 
 206. Doctrine in case of a pledge of stock — right of pledgee or trustee 
 
 to vote 319 
 
 207. Meeting of directors 321 
 
 208. Acts of an irregular meeting may be valid 322 
 
 209. Can the directors only act as a board? 322 
 
 210. Same continued 324 
 
 211. What constitutes a quorum 325
 
 Table of Contents. xi 
 
 Sec. Page. 
 
 212. Same continued 325 
 
 213. Majority may act 326 
 
 214. The powers of directors 326 
 
 215. The mode of expressing assent by directors 327 
 
 216. Corporate meetings cannot be lield outside the state 327 
 
 217. Directors may hold meetings outside the state 329 
 
 218. Jurisdiction of equity to restrain by injunction 331 
 
 CHAPTER IX. 
 
 CORPORATE CONTRACTS. 
 
 219. The power to contract, a corporate incident ; construction of the 
 
 power 335 
 
 220. Mode of exercising the power 336 
 
 221. Incidental powers of a corporation 338 
 
 222. Cases illustrating the subject 340 
 
 223. Contracts relating to bailments. ... 344 
 
 224. What would and what would not be within the scope of an agent's 
 
 authority, in cases of bailments 345 
 
 225. Place of contracting by tlie corporation 346 
 
 226. Place of contracting by directors 349 
 
 227. Corporate bills and notes ; negotiable quality of corporate bonds. 350 
 
 228. Coupons ; their incidents and qualities 353 
 
 229. Ultra vires; doctrine of 355 
 
 230. Different senses in which the term is used 360 
 
 231. Are all contracts void, entered into by corporations, beyond 
 
 the powers conferred upon them ? 361 
 
 232. Same continued 366 
 
 233. Distinction between executed and unexecuted contracts, in rela- 
 
 tion to ultra vires 366 
 
 234. Same continued 368 
 
 235. When neither party can avoid a contract, although ultra vires. . . . 374 
 
 236. Same continued ... 375 
 
 237. 238. Form of action, in case of ultra vires contracts 377 
 
 239. The doctrine of ultra vires applied to agents . 381 
 
 240. The doctrine of ultra vires^ in cases of negotiable instruments. . . 382 
 
 241. Necessary or implied powers, not ultra vires 384 
 
 242. Right to mortgage 388 
 
 243. Conclusion as to ultra vires contracts 388 
 
 CHAPTER X. 
 
 THE CORPORATE SEAL. 
 
 244. Definition ; history 392
 
 xii Table of Contents. 
 
 Sec. Page. 
 
 245. History of private seals 393 
 
 246. How seals came into use 394 
 
 247. Incident of a corporation 394 
 
 248. Former doctrine as to corporate seals 395 
 
 249. Origin of the law relating to corporate seals 397 
 
 251, 252, 253. Corporate seals ; present doctrine in reference to 400 
 
 254, 255. What is a common seal 404 
 
 256. By whom the seal should be affixed 406 
 
 257. Where an acknowledgment is required 407 
 
 258. Doctrine in relation to agents 407 
 
 260. The seal as evidence 410 
 
 CHAPTER XL 
 
 BY-LAWS. 
 
 261. General principles relating to by-laws 412 
 
 262. Requisites of, and construction relating to by-laws 413 
 
 263. By-laws must be reasonable and not oppressive, nor contrary to 
 
 the laws of the state 414 
 
 284. By-laws in restraint of trade 416 
 
 265. By-laws, when adojjted by the corporate body 417 
 
 266. By laws adopted by the directors 417 
 
 267. Distinction between by-laws adopted by the corporation and those 
 
 adopted by directors 418 
 
 268. By-laws contrary to the general laws of the land void 420 
 
 270. Matters that may be regulated by by-laws 422 
 
 272. How by-laws are made 425 
 
 273. Repeal of by-laws 426 
 
 274. Functions of by-laws — effect on third persons 427 
 
 275. Bj'-laws regulating the transfer of stock 428 
 
 277, 278. Providing for a corporate lieu on stock 429 
 
 279. Notice conferred by the by-laws 431 
 
 280. By-laws cannot enlarge or abridge the rights of stockholders . . . 431 
 
 CHAPTER XH. 
 
 LIABILITY OF CORPORATIONS FOR TORTS. 
 
 281. 282. General principles relating to the liability of, for torts 432 
 
 283. Corporations, when liable for torts 434 
 
 284. Liability of principal for acts of agent 435 
 
 285. They may do wrongful acts, or direct them to be done 436 
 
 286. Frauds of corporations, or of their agents 436 
 
 287. Doctrine of ultra vires not applicable to torts 438 
 
 288. Frauds of agents for which the corporation is liable 441
 
 Table of Contents. xiii 
 
 Sec. Page. 
 
 289. Frauds, etc., of directors 442 
 
 290. Particular acts of fraud by agents 443 
 
 291. Doctrine where the corporation is the occasion of the loss by the 
 
 fraudulent act of a servant 444 
 
 292. Corporations enjoying the benefit of contracts secured by the 
 
 frauds of agents will be responsible for such frauds 445 
 
 293. Rule in England 446 
 
 294. Riglit to repudiate a contrnc t fnr fraud limited to the original 
 
 parties 449 
 
 295. Ratification of a contract effected by the fraud of the agent. . . . 449 
 
 296. Ratification of torts 450 
 
 297. Corporate liability for other other wrongs 450 
 
 298. Assault and battery ; when committed in line of duty of the 
 
 agent 450 
 
 299. Distinction between torts and contracts as to application of doc- 
 
 trine of nltra vires 457 
 
 300. Liability of corporations for trespasses to property 457 
 
 301. Rule in Vance v. Erie R. Co 458 
 
 302. Liability of corporations in cases of the negligence of agents. . . 459 
 
 303. Limitation of liability in case of negligence 460 
 
 304. Rule in Illinois as to proximate cause 462 
 
 305. Reason for rule as to proximate cause 463 
 
 307. Complications arising from successive negligence 464 
 
 311. Damages generally, in cases of torts 467 
 
 312. When injury of permanent nature 468 
 
 313. Exemplary damages 469 
 
 315. Application of the doctrine to private corporations 471 
 
 316. Extreme doctrine of liability for exemplary damages 472 
 
 317. Gross negligence, which authorizes exemplary damages 474 
 
 318. Inconsistency of the rule in its application to corporations 474 
 
 319. Recent examination of the doctrine of exemplary damages 475 
 
 322. Conflict growing out of the diverse rules 478 
 
 323. Damages for an injury resulting in death 479 
 
 324. Elements of damages in case of death ; what it is competent to 
 
 show 480 
 
 CHAPTER XIIL 
 
 SUIT AT LAW BY AND AGAINST CORPOKATIONS. 
 
 325. The right to sue and the liability to be sued, common-law inci- 
 
 dents 482 
 
 826. In what name must sue or be sued 483 
 
 327. May sue and be sued by members 483 
 
 329. Where suit may be brought 485
 
 xiv Table of Contents. 
 
 Sec. Page. 
 
 330. Foreign corporations not citizens 487 
 
 334. When suits may be brought in the federal courts 491 
 
 335. A corporation may be an alien under the judiciary act 491 
 
 336. It may be a citizen under the constitution of the United States, 
 
 and tlie acts of congress relating to judicial powers and the 
 
 jurisdiction of the courts 492 
 
 338. Corporations considered as citizens under the statutes of tlie 
 United States, for the removal of suits from the state to the 
 
 federal courts 494 
 
 342. Rights in courts under the national banking law 497 
 
 345. Parties to a suit 500 
 
 346. Process 501 
 
 347. Pleadings 502 
 
 349. When a party dealing with a corporation is estopped to deny the 
 
 corporate existence 504 
 
 350. When the corporation is estopped to deny its existence 505 
 
 351. General denial 505 
 
 352. Proof of incorporation .- 506 
 
 354. Corporate records ,•••-. 507 
 
 356. Stockholders' rights in equity 509 
 
 CHAPTER XIV. 
 
 SUITS IN EQUITY BY AND AGAINST CORPORATIONS AND DIRECTORS. 
 
 357. Remedy in equity by and against corporations 510 
 
 358. Rights, liabilities and remedies of various parties 511 
 
 359. Rights and liabilities of, and remedies against, directors 511 
 
 363. Stockholders' liability in equity 515 
 
 364. Rights of stockholders to restrain acts ultra vires 515 
 
 365. Creditors' rights in equity for a misappropriation of the corporate 
 
 fund 517 
 
 367. Doctrine, generally, as to parties in equitable proceedings 521 
 
 370. Where an injunction will be granted 523 
 
 371. Where an injunction will not be granted 524 
 
 372. Specific performance — right of way 526 
 
 CHAPTER XV. 
 
 EXECUTION AND THE APPOINTMENT OP RECEIVERS. 
 
 373. The common-law doctrine in reference to execution 528 
 
 374. Where the same doctrine provides for a sale on execution 531 
 
 375. Doctrine as to the subjection of stocks to execution 531 
 
 376. Statutes generally provide for the garnishment of stockholders. . . 532 
 
 377. Appointment of receivers , 535
 
 Table of Contents. xv 
 
 Sec. Page. 
 
 378. Judgment creditor's right to a receiver 535 
 
 381. Functions, rights and duties of a receiver of a corporation 543 
 
 CHAPTER XVL 
 
 AMALGAMATION AND CONSOLIDATION. 
 
 384. Amalgamation — meaning of 545 
 
 385. The EngUsh doctrine relating to amalgamation 546 
 
 386. Doctrine in this country 547 
 
 387. Consolidation must be authorized by legislative authority 548 
 
 388. Where legislative, authority is conferred after the creation of the 
 
 corporation 549 
 
 390. Difficulty removed by the exercise of the right of eminent domam 550 
 393. Where authority to consolidate exists at the time of the creation 
 
 of the corporation 553 
 
 393. Rule as to the requisite concurrence where no provision is made 
 
 therefor 553 
 
 394. The new corporation created by consolidation 554 
 
 395. Doctrine as to the creditors of the consolidating companies 557 
 
 396. Consolidation of companies organized in different states 558 
 
 CHAPTER XVII. 
 
 EMINENT DOMAIN. 
 
 398. What the right of eminent domain is 561 
 
 399. How the right can be enjoyed 566 
 
 400. The authority to grant the right is in the legislature 569 
 
 401. What are public uses which justify the exercise of the right 570 
 
 403. Who is to determine the question of public use 576 
 
 403. Limit of the right 578 
 
 404. Who is to determine in reference to the extent, amount or quan- 
 
 tity of property to be taken 580 
 
 406. Where the corporation takes more land than is required 589 
 
 407. Compensation 591 
 
 409. Damages — mode of estimating 601 
 
 410. Elements of damages which may be considered 606 
 
 411. Lands injuriously affected but not taken 606 
 
 CHAPTER XVIII. 
 
 QUO WARRANTO. 
 
 413. The writ of quo warranto at common law 610 
 
 413. Proceedings in the nature of quo warranto 617 
 
 414. The remedy regulated by constitutional and statutory provisions. 619 
 
 415. As a remedy against private corporations 619 
 
 416. The fact of non-user or mis-user must be clear 631
 
 xvi Table of Contents. 
 
 See. Page. 
 
 417. As a remedy for an unlawful usurpation of an office in a private 
 
 corporation 623 
 
 418. Possession and user of the assumed office, essential 026 
 
 419. Non-user as a ground for forfeiture 626 
 
 420. Destruction of the objects of a corporation, as a ground of for- 
 
 feiture 627 
 
 421. Pleadings. Evidence 627 
 
 422. Judgment 627 
 
 423. Nothing forfeited to the state but the franchise 628 
 
 CHAPTER XIX. 
 
 LIENS ON CORPORATE PROPERTY AND THEIR PRIORITY. 
 
 424. Corporate mortgages and bonds secured thereby 629 
 
 425. Can the corporation by mortgage or trust deed give a lien on 
 
 property to be thereafter acquired 631 
 
 426. What may be conveyed by mortgage . . 634 
 
 427. Rolling stock, character and quality of 637 
 
 429. Mechanics' and constructors' liens .- 641 
 
 431. Not assignable 642 
 
 432. Priority between mortgage and mechanics' liens 642 
 
 CHAPTER XX. 
 
 DISSOLUTION. 
 
 436. Cause for which corporations may be dissolved or wnicn consti- 
 
 tute a dissolution 648 
 
 437. Reserved power in the legislature to dissolve 648 
 
 439. Where the reserved power is subject to a condition 650 
 
 440. Expiration of the time limited for its continuance 651 
 
 441. Neglect or abuse of powers 652 
 
 443. Mode of proceeding in such cases 654 
 
 445. Dissolution by the voluntary act of members 658 
 
 446. When the majority may surrender the franchise 660 
 
 447. Dissolution under statutes providing for the winding up of cor- 
 
 porations 661 
 
 449. Dissolution by the death of all the members 665 
 
 450. Effect of dissolution generally at common law 667 
 
 451. Effect of dissolution upon creditors 669 
 
 452. Forfeiture, not the subject of collateral inquiry 670 
 
 453. When corporate existence mav be inquired into, collaterally 671
 
 Table of Contents. xvii 
 
 CHAPTER XXI. 
 
 MA17DAMUS. 
 Sec. Page. 
 
 454. The writ and its functions . G72 
 
 455. The writ in this country G73 
 
 456. When issued, discretion of the court 673 
 
 457. Practice and proceedings 673 
 
 458. Office of the writ to compel the performance of duty 674 
 
 459. Concurrence necessary to authorize the issuing of the writ 677 
 
 460. When it will not be issued 677 
 
 461. Resemblance and distinction between, and injunction 679 
 
 463. Against private corporations or its officers 679 
 
 463. Corporations may invoke its aid 684 
 
 464. To compel inspection or delivery of corporate books and papers. 685 
 
 465. As a remedy against corporations 687 
 
 466. To whom the writ should be directed, and service 688 
 
 CHAPTER XXII. 
 
 TAXATION. 
 
 467. Taxation defined and necessity of 689 
 
 468. Should be equitably imposed 689 
 
 469. Difficulty attending taxation of railroad property 691 
 
 470. Statutes regulating taxes on corporate property 691 
 
 472. What corporate property is taxable — double taxation 694 
 
 473. Corporate property subject to and exempt from taxtion . 694 
 
 474. Exemption statutes sustained 697 
 
 475. Indications that the doctrine will not be extended 703 
 
 476. Where corporate property is used in different states 705 
 
 477. Exemption of United States stocks 706 
 
 478. Exemption from taxation under the national banking law 710 
 
 479. Municipal subscriptions in aid of corporate enterprises, and tax- 
 
 ation therefor 711 
 
 CHAPTER XXIII. 
 
 NEGLIGENCE AND WRONGFUL ACTS OP AGENTS OR SERVANTS. 
 
 480. Corporate liability for negligence and wrongful acts of agents and 
 
 servants 716 
 
 481. Illustration of the rule 717 
 
 482. The maxim q^ui facit per aliumfacit per se, especially applicable to 
 
 corporations 718 
 
 483. Cases Ulustrating the maxim 719 
 
 487. Real test of liability 724 
 
 c
 
 xviii Table of Contents. 
 
 Sec. Page 
 
 488. Implied powers of agents 729 
 
 489. Matters to be considered in determining whether the act is within 
 
 the scope of the agent's authority 731 
 
 490. Contractor's and contractee's Uability 732 
 
 491. Liability in case of a nuisance attaches only when a nuisance nec- 
 
 essarily results 730 
 
 493. Corporations bound to the same degree of care as natural per- 
 sons — degree of care 738 
 
 493. Not insurers against all casualties 739 
 
 494. Care required of railroad corporations in relation to engines, cars, 
 
 track, etc 741 
 
 495. Duty of railway company as to stations 751 
 
 496. Instances of negligence where the corporation was held liable. . . 751 
 
 497. Duty of railroad corporation 754 
 
 499. Injuries received in getting upon a train 760 
 
 500. Accommodations — contributory negligence 761 
 
 501. Duty to passengers -. 762 
 
 502. Grounds upon which liability is predicated 763 
 
 503. Liability for willful wrongs of agents 767 
 
 504. Liability of railroad corporations for delay in running trains . . . 775 
 
 505. Liability for negligence in constructing or repairing railroads, or 
 
 for nuisances 677 
 
 506. Engines and machinery 783 
 
 507. Application of the maxim sic utere tuo ut alienum non Icedas 783 
 
 508. Contributory negligence 784 
 
 509. Consequential damages 785 
 
 510. Injury to persons and property by running of trains 786 
 
 511. Trespassers on the tracks 791 
 
 512. Different rule as to children 792 
 
 513. Injuries to animals 793 
 
 515. Instances of liability for other torts of servants 795 
 
 . 516. Liability to indictment 796
 
 TABLE OF OASES CITED. 
 
 Aaron V. Sec. Ave. R. Co 4(i9 
 
 Abbey v. Chase 297, 500 
 
 Abbot V. American Hard Rubber Co. 215 
 218, 223, 524 
 
 Abbott V. Aspinwall , ... 112 
 
 Abbot V. Baltimore Steam Jack. Co . . . 3.59 
 
 Abbott V. Hermon 395, 4U3 
 
 Abbott V. Merriam 303 
 
 Abby V. Billups 282, 337 
 
 Aberdeen Female Acad. v. Aberdeen.. 649 
 
 Aberdeen Rwy. Co. v. Blailiie 2.50 
 
 Ackerman V. Desha Co 675, 678 
 
 Aclierson v. Erie R. Co 473 
 
 Aoome V. Am. Min. Co 504 
 
 Adams V. Cole 732 
 
 Adams V. Mayor, etc 413 
 
 Adams V. Wicassett Bank 40 
 
 Adler V. Milwaukee, etc., Co... 537, 664, 669 
 
 Adley V. Whitestable 413 
 
 Adriancev. Roome 227,289,419, 431 
 
 Aetna Ins. Co. V. Maguire 289 
 
 African M. B. Church v. Duru 222 
 
 African Soc. V. Varick 20 
 
 Atrges V. Nicholson 385 
 
 Asfro V. Nicholson 350 
 
 Agra & Masterman Bk, In re 350 
 
 Agricultural Bk. v. Burr 34, 90, 181 
 
 Agricultural Bk. v. Commercial Bk 346 
 
 Agricultural Bank v. Robinson 181 
 
 Alabama Bk. v. Conregys 316 
 
 Ala., etc., R Co. v. Kemy.. 566 
 
 Ala. &Tenn. R. Co v. Kidd 433 
 
 Ala. L. Ins. Co. V. Smith 387 
 
 Albany V. Cunliflf 286 
 
 Albany Street, Matter of 579 
 
 Albert V. Savings Bank.. 176, 359, 434, 450 
 
 .Vldebert v. Leaf 531 
 
 Alden V. N. Y Cent. R. Co 741 
 
 Alden V. Pearson 771 
 
 Alderley v. Storm 112 
 
 Alderman V. Finley : "505 
 
 Aldrich v. Boston, etc., 11'. Co 773, 795 
 
 Aldrich V Drury 578 
 
 Aldrich v. Palmer 409 
 
 Aldrich V. Press Printing Co 716, 796 
 
 Alexanderv. Baltimore 569 
 
 Alexander V. Berney 25 
 
 Alexander V. Cent. R. Co .523 
 
 Alexanderv. Sizer 285, 296 
 
 Alexandria Bk. v. Bk. Columbia 410 
 
 Alford V. Miller 219 
 
 Alfridson v. Ladd 282 
 
 Allison V. Chandler 466 
 
 Allnut V. Inglis 51 
 
 All Saints' Church v. Lovett. . 10, 24, 256 
 
 652 
 
 Allton V. Mulledy 282 
 
 Allyn V. Boston & A. R. Co.. .. 786, 787, 788 
 
 Allegheny V. McClurkan 295, 355 
 
 Allegheny Co. v. Cleveland 560 
 
 Allen V. Buchanan 43, 44 
 
 PAGE. 
 
 Allen V. Curtis 204, 513, .516 
 
 Allen V. Drew 690 
 
 Allen V. London & S. Western Rwy. Co. 451 
 
 721 
 
 Allen V. McKeen 40, 45 
 
 Allen V Montgomery R. Co... 148, 388, 631 
 
 Allen V. Pegram 113 
 
 Allen V. Sewall 112, 114 
 
 Alton V. Mulledy 3:37 
 
 Alton, etc., R. Co. V. Dietz 33 
 
 Althorpf V. Wolfe 480 
 
 Amant v. Turnp. Co 528 
 
 Ambergate, etc. , Ry. Co. v. Mitchell. .. 103 
 
 America Bk. v. McNiel 97,163, 191 
 
 American Bk. v. Embury 336 
 
 American Colonization Soc. v. Gartriel. 485 
 
 American Express Co. v. Sands 771 
 
 American Fire Ins. Co. v. Pringle 645 
 
 American Ins. Co. v. Oakley . 395, 403, 410 
 American, etc., R. Co. v. Miles... 257 
 
 American R. Frog Co. v. Haven 106, 321, 685 
 
 Ames V. Palmer 643 
 
 Amesbury v. Ins. Co 414 
 
 Amesbury Woolen Man. Co. v. Ames- 
 bury 697 
 
 Amey v. Allegheny City 282 
 
 Ammant v. New Alexandria, etc., R 
 
 Co 6.38 
 
 Amory V. Hamilton 295 
 
 Amsden V. Dubuque 605 
 
 Anacosta Tribe v. Murbach 417 
 
 Ancient City Club v. Miller 483 
 
 Anderson v. Coonley 273 
 
 Anderson V. Kanawha Coal Co 37 
 
 Anderson v. Kerns Draining Co 571 
 
 Anderson V. Longden 232, 280 
 
 Anderson v. Newark, etc., R. Co ISO 
 
 Anderson v. Newcastle R. Co 671 
 
 Anderson v. Nicholas 93, 195, 532 
 
 AndoverT. Co. v. Gould 141 
 
 Andover Turnp. Co. v. Hay 410 
 
 Andrews V. Kneeland 372 
 
 Andrews v. Ohio, etc., R. Co 133 
 
 Andrews v. Union Ins. Co 423 
 
 Androscoggin, etc., R. Co. v. Stevens. 694 
 
 Andrus v. Howard 795 
 
 Augell v. Silsbury 543 
 
 Anglo-Australian Co. v. British, etc., 
 
 Co 547 
 
 Angio-California'.G. M. Co. v. Lewis .. 153 
 
 Annapolis & E. R. Co. v. Gantt 462 
 
 Anthony V. Cleveland 355 
 
 Anthony V. Leftwick 526 
 
 Antisdell v. Chic, etc., R. Co 793 
 
 Appleby v. Mayor 387, 3.55 
 
 Applegate V. Earnest 638 
 
 Appling V. Bailey 674 
 
 Arberryv. Beavers 673 
 
 Arents V. Commissioners 353 
 
 Argent V. Dean & Chapter St. Paul 454 
 
 Argenti v. San Francisco 375, 381.
 
 XX 
 
 Table of Casks Cited. 
 
 PAGE. 
 
 Arkenburg V. Wood 203 
 
 Armingtoii v. Baruett 566, 509, 577 
 
 Arms V. Conant 266.330, 350 
 
 Armstrong v. Cooley 795 
 
 Arnold V. Mavor 269, 395 
 
 Arnold v. Haggles 181, 183. 189, 533 
 
 Arnold V. Suffolk Bk 96,198, 200 
 
 Arrington v. Vart Houton 673 
 
 Arthur V. Commercial Bk 215, 387 
 
 Arthur v. Griswold 241 
 
 Artz V. Chicago, etc., K. Co 788 
 
 Ash V. Cummiugs 573 
 
 Ash V. Doggy 527 
 
 Ashbyv. White 482 
 
 Ashtabula, etc., R. Co. v. Smith, 32, 118, 121 
 
 Ashton V. Atlantic Bk 175,522 
 
 Asiatic Banking Corp., Ex parte 350 
 
 Aspinwall v. Ohio, etc., R....328, 346, 500 
 
 Aspinwall V. Torrance 302 
 
 Atchafalaya Bk. v. Dawson... 650, 654 
 
 Atchison V. Davidson 543 
 
 Atchison, etc., R. Co. v. Stanford. 462, 409 
 Atlienaeum L. Assurance Co., ex parte, 439 
 Athenaeum L. Ass. Co. v. Pooley..209, 233 
 
 Athol Music Assoc. V. Carey 131 
 
 Atkins V. Albree.. 156, 101 
 
 Atkins V. Gamble 93 
 
 Atkins V. Hunt 12 
 
 Atkinson v. R. R. Co 528 
 
 Atlantic Cotton Mills V. Abbott 119 
 
 Atlantic Delaine Co. v. Mason... 141, 317 
 
 Atlantic Ins. Co v. Sanders 313 
 
 Atlantic Mut. F. Ins. Co. v. Young... 285 
 
 Atlantic, etc., R. Co. V. Comm 190 
 
 Atlantic, etc., R. Co. v. Dunn. 408, 474, 702 
 Atlantic, etc., R. Co. v. Johnston . .. 250 
 Atlantic, etc., R. Co. v. Sullivant. ... 592 
 Atlantic, etc., Tel. Co. v. Common- 
 wealth . 155 
 
 Atlas Bk. V. Nahant Bk 537 
 
 Atterberry v. Knox 487 
 
 Attica Bk. V. Manufac. Bk... 430 
 
 Atty.,Gen., Ex parte 016 
 
 Atty.-Gen . v . Barstow 655 
 
 Atty.-Gen. v. Bay State Min. Co 090 
 
 Atty.-Gen. V. Birmingham 780 
 
 Arty.-Gen. V. Boston, etc., R. Co 500 
 
 Atty.-Gen. V. Bradford Nav. Co... 779, 780 
 
 Atty.-Gen. V. Chic, etc., R. Co 47 
 
 Atty.-Gen, v. Clerg. Soc 659 
 
 Atty -Gen . v. Eastlake 516 
 
 Atty.-Gen. v. Evart Booming Co .574 
 
 Atty.-Geu. v. Hudson R. R. Co 779 
 
 Atty.-Gen. V. Ins. Co 343,383,387 
 
 Atty.-Gen. v. Metrop. Bd. of Works .. 780 
 
 Alty.-Gen. V. Norwich, etc 516, 6.53 
 
 Atty.-Gen. v. Petersburgh, etc., R. Co. 612 
 
 631, 658 
 
 Atty.-Gen. v. Siddon 435 
 
 Atty.-Gen. V.Tudor Ice Co 373, 653 
 
 Atty.-Gen. v. Uticalns. Co 611 
 
 Atty.-Gen. v. Wilson 242 
 
 Att wood V. Small 437 
 
 Atwater V. Woodbridge 40 
 
 At wood V. Merry weather 514 
 
 Auburn Academy V. Strong 413, 421 
 
 Auburn PlankroadCo. v. Douglass.. 339 
 
 Augusta Bk. v. Conrey 293 
 
 Augusta Bk. V. Augusta 711 
 
 Augusta Bk. V. Earl.. 26, 32.5, 329, 338, 347 
 384, 487,489, 495, 623 
 
 Augusta Bk. V. Hamblet 217,420 
 
 Aurora v. West 41, 69, 351, 353 
 
 Aurora, etc., R. Co. v. Miller 35 
 
 Aurora T. Co. v. Holthouse 649 
 
 Austin v. Daniels 303 
 
 Austin V. Murray 416 
 
 Auter v. Miller 526 
 
 Aylesbury R. v. Mount 173 
 
 PAOE. 
 
 Babb V. Reed 12 
 
 Babcockv. Beman 286, 297 
 
 Babcock V. N. J. Stock Yd. Co . 70 
 
 Bach V. Pac. Mail Steam S. Co 203, 306 
 
 Bach man. In re 171 
 
 Backus V. Lebanon 43, 44, .566 
 
 Bacon v. Robertson 664, 008 
 
 Badger V. Bank of Cumberland... 333, 374 
 377. 394, 410 
 
 Bagshavv , Ex parte .54.5 
 
 Bagshaw v. Eastern N. R. Co. 508. 514, 521 
 
 Bailey v. Hannibal, etc., R. Co 178 
 
 Bailey v. Hollister II4 
 
 Bailey v. Methodist Epis. Ch 649 
 
 Bailey V. Miltenberger 565 
 
 Baileyv.R Co 179 
 
 Bailey V. Strohecker 687 
 
 Bailiffs, etc., of Ipswich v. Martia 269 
 
 Baird V. Graham 731 
 
 Baker V. Administrator 535 
 
 Baker V. Backus H, 113, 612, 652, 671 
 
 Baker V, Bolton 479 
 
 Baker V. Freeman 336 
 
 Baker v. Cotter 339 
 
 Baker V. Johnson. 583, 597, 605 
 
 Bakerv. Utica 304 
 
 Baldwin V. Bk. Newburgh 374, 377 
 
 Balfour V. Ernest 516 
 
 Ball V. Lappins 675, 678 
 
 Ballou V. Farnum 469 
 
 Ballouv. Talbot 383, 300 
 
 Baltimore V. Baltimore 356 
 
 Baltimore v. Baltimore, etc. , R. Co . . . 66 
 
 696, 698 
 
 Baltimore V. Board of Police 41 
 
 Baltimore V. Norman '. 105, 458 
 
 Baltimore V. Pittsburgh, etc., K. Co... 63 
 
 Baltimore v. Reynolds 338, .380 
 
 Bait &0. R. Co. V. Blocher.. 474, 705, 774 
 Baltimore, etc., R. Co. v. Gallahue.483, 560 
 
 Baltimore, etc. , R. Co. v. Glenn 560 
 
 Baltimore, etc., R. Co. v. Lowell 191 
 
 Baltimore, etc., R. Co. v. Marshall Co. 653 
 
 Bait., etc., R. Co. v. Nesbit 594, 602 
 
 Baltimore, etc., R. Co. v. State.. 480, 791 
 Baltimore, etc., R. Co. v Supervisors 560 
 Baltimore, etc., R. Co, v. Wheeling ... 203 
 
 533 
 Baltimore, etc., R. Co. v. Woodruff . . 451 
 
 Baltzenv, Nicolay 399, 301 
 
 Bancroft v. Consen 174 
 
 Banet V. Alton, etc., R. Co 63 
 
 Bangate v. Shortridge 164 
 
 Bangor R. Co. V. McComb 605 
 
 Bangor, etc., R. Co. v. Smith . ..33, 64, 483 
 
 689, 694 
 
 Bangs V . Mcintosh 535 
 
 Bank V. Biningsville Cotton Co 285 
 
 Bank v. Chambers 520 
 
 Bankv. Chillicothe 343 
 
 Bankv. Comm 339 
 
 Bank V. Farnington 355 
 
 Bankv. Hammond 381 
 
 BanlvV, Kennedy 664 
 
 Bankv. Lanier 190,413,430, 533 
 
 Bankv. Lockwood 609 
 
 Bank V. St. John ... ... 319 
 
 Bank V. Wrenn 654 
 
 Bank of Ala. v. Conegvs 323 
 
 Bank of Cape Fear v. Edwards 697 
 
 Bank of Columbia V. Patterson 396 
 
 Bank of Commerce's Appeal 96 
 
 Bank Comrs. v. Bank 657 
 
 Bank of Middlebury v. Rutland, etc., 
 
 R. Co 334 
 
 Bank of Mo. v. Merchants' Bk 671 
 
 Bankof Mo. V. Snelling.... 678 
 
 Bank of Kentucky v. Schuylkill Bk. .. 373 
 Bankof St. Mary v. St. John 345
 
 Table of Cases Cited. 
 
 XXI 
 
 Bank of S. Carolina v. Ilanimond 371 
 
 Bank of State v. Bk. of Cape Fear .... 42 
 
 Bank Tax Case 711 
 
 Bank of U. S. v. Dandrid«e.31, 2G0, 279, 39ti 
 
 41.^ 
 
 Bank of U. S. v. Davis 457 
 
 Bank of U. S. v. Dunn 217 
 
 Bank of U. S. v. Lyman 34 
 
 Bank of U. S. v. Planters' Bk. of Ga. . 79 
 
 Bankhead v. Brown 570, 577 
 
 Banking Co. V. Fisher 3.52 
 
 Banks V. Poitoux 371, 39ti 
 
 Banks, etc. , v. St. John 520 
 
 Bannon V. Baltimore &O.R. Co. 469, 474, 792 
 
 Banorgee V. Hovey 337 
 
 Baptist Church V. Mulford.37], 395, 403, 410 
 
 Barclay V. Quicksilver Min. Co 547 
 
 Barclay V. Talman 659 
 
 Barcua v. Hannibal, etc., P. R. Rubber 
 
 Co 266 
 
 Bard v. Poole 328 
 
 Bardstown, etc., R. v. Metcalf .339, 387, 631 
 
 6a5 
 Bargate v. Shortridge,188, 281, 383, 434, 4.50 
 
 Barces v. R. Co 757 
 
 Barker, E.x parte 320 
 
 Barker V. Allen 296 
 
 Barker V. Mechanics Fire Ins. Co. 283, 386 
 
 Barnard v Stevens 458 
 
 Barnard v Vermont & Mass. R. Co... 179 
 
 Barnes V. Barnes 13 
 
 Barnes V. Ontario Bk 344, ^86 
 
 Barnetv. Alton, etc., R. Co 147 
 
 Barnet v. Smith 444 
 
 Barn um V. Blackstone Canal Co 26 
 
 Barrett v. Mead 35, 671 
 
 Barrett V. Schuyler Co 351 
 
 Barrington v. Washington. Bk .... 233, 374 
 
 Barrow V. N. & C. T. Co 373 
 
 Barrows v. Mass ... <>76 
 
 Barrows V. Nat. Rubber Co 194 
 
 Barry v. Croskev . ... 446 
 
 Barry v. Merchants Exch 334,342, 386 
 
 Barstow v. City R. Co 2.57 
 
 Bartlettv. Kinsley .508 
 
 Bartlett v. Medical Soc 83, 89 
 
 Bartlett v. Pentland 23 
 
 Bartlett V. Tucker 300 
 
 Barton v. New Orleans 260, 303 
 
 Barton V. Plankroad Co 251 
 
 Barton v. Port Jackson Plank R. Co.. 244 
 
 246, 390 
 
 Bartonshill Coal Co. V. Reid 795 
 
 Barwick V. Eng. Joint Stock Bank 4-38 
 
 441, 447, 724 
 
 Bass V. Chicago, etc., R. Co 783 
 
 Bassett V Carlton 482 
 
 Bassett v. Porter 13 
 
 Bassett v. St. Albans, etc., Co 151, 171 
 
 Basshor V. Dressel 32 
 
 Bateman v Mayor, etc 335 
 
 Batemauv Mid-Wales R. Co 350 
 
 Bates V. Androscoggin, etc. , R. Co. 15.5, 179 
 
 Bates v. Bank 371, 358, 410 
 
 Bates V. Boston, etc. , R. Co 405 
 
 Bath V. Miller 388, 631, 634 
 
 Battershall v . Davis 131 
 
 Battle V. Davis 543 
 
 Bavington V. P. & S. R. Co 121, 134 
 
 Baxter v. State 393 
 
 Baxter V. T. & B. R. Co 788, 789 
 
 Bayard V. Farmers, etc., Bk 105, 176 
 
 Bay Citv v. State Treasurer 685 
 
 Bavlessv. Orne 241, 303, 523, 654 
 
 Bayley V. Ry. Co 723,738, 763 
 
 Beach V. Fulton Bank... . 338, 436, 457, 717 
 
 796 
 
 Beach V.Smith 116 
 
 Beard v. Conn . & Pass. R . Co . . 753 
 
 PAGE. 
 
 Beardsley V. Ontario Bank 530, 638 
 
 Beardsley v. Smith 113 
 
 Beardsley v. Swann 468 
 
 Beaston v. Farmers' Bank 219, 340 
 
 Beaty v. Knowler ..66, :«9 
 
 Beaty v. Marine Ins. Co 3-5^5 
 
 Beavan v. Earl of Oxford 92 
 
 Beck V. Kantorowitz 139 
 
 BecUel V. Union Tp 713 
 
 Beckett V. Houston 176 
 
 Beckett V. Upton 779 
 
 Beckwith v. Windsor Man. Co. 407 
 
 Bedell V. L.I. R. Co 782. 783 
 
 Bedford, etc., R. Co. v. Bowser 134, 137 
 
 218, 247 
 Beekman v. Sar., etc., R. Co. .532, 561, 576 
 
 580 
 
 Beenev. Cahawba, etc., R. Co 146, 148 
 
 Beers v. Housatonic R. Co 451 
 
 Beers v. Phoenix Glass Co "274 
 
 Beisiegel v. R. Co 788 
 
 Belknap v. Boston, etc., R. Co. ...468, 471 
 
 473 
 
 Belfast, etc., R. Co. v. Moore 131 
 
 Bell V. Midland, etc., R. Co 474 
 
 Bell v. Shibley 543 
 
 Bellefontaine, etc., R. Co. v. Snyder. 792 
 Bellmeyer v. Independent Dist. of 
 
 Marshaltown 68 
 
 Bellows V. Todd 266 
 
 Belmont v. Erie R. Co. .243, 245, 256, 516, 535 
 
 Beloit Bank V. Beal 294 
 
 Beman V. Rufford 518,634 
 
 Bend v. Susquehanna Bridge Co. ..171, 173 
 Benjamin v. Elmira, etc., R. Co. ...338, 6,31 
 
 6.39 
 
 Benneson v. Bill .544 
 
 Bennett, Ex parte 172 
 
 Bennington Iron Co. v. Rutherford. .. 504 
 
 Benoist v. Carondelet 402, 407 
 
 Benson V. Albany . 713 
 
 Benson v. Heathorn 254 
 
 Bentinck V. N'orf. Estuary Co .590 
 
 Bentley V. Craven 139 
 
 Berry V. Yates .. 359 
 
 Berryman v. Cin. Southern Ry. Trus- 
 tees 187 
 
 Berthin V. Crescent 43 
 
 Bethany V. Sperry 313 
 
 Bethel Bank v. Pahquioque Bank 664 
 
 Betts V. Menard 356 
 
 Beverly V. Lincoln Gas-light Co. ...404, 485 
 
 Bickering f. Ilfracombe Ky. Co 93 
 
 Bickford V. First Nat. Bk 444 
 
 Biddis V. James 507 
 
 Bigelow, matter of 197 
 
 Bigelow V. Hillman . . 436 
 
 Bigelow V. North Mo. R. Co 793 
 
 Bill V. Dareuth, etc , R. Co 303 
 
 Bingham V. Weiderwax 667 
 
 Binghamton Bridge Case 44, 29, 563 
 
 Binney V. Plumlev 483 
 
 Bird V. Bird's Patent, etc , S. Co .. .. 516 
 
 Bird V Daggett 285 
 
 Birkenhead, etc., Rwy. Co. v, Brown- 
 
 rigg 79 
 
 Birkett V. Whitehaven Junct 752 
 
 Birmingham, Bristol & Thames R. Co. 
 
 V.Locke 148 
 
 Bish V Bradford 134 
 
 Bish V . Joh nson 141 , 553 
 
 Bishop V. Brainerd 13, 548, 554, 656 
 
 Bishop V. Holcomb 166 
 
 Bissell V. Mich. Southern, etc., R. Co. 226 
 277, 279, 365, 375, 383, 434, 517, 716 
 
 Black V. Auditor 675 
 
 Black V. Del. etc., R. Co 143, 215, 23:3 
 
 311, 387, 516. 548, 550, 552, 660 
 Black V. United Co 339
 
 XXll 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 Black V. Zacharie 91. 96, '164, 198, 429 
 
 Blackliunrs Case 44H 
 
 Black River, etc , R. Co. v. Barnard ... 15 
 Black River, etc., R. Co. v. Clarke. . 116 
 
 133, 50.5 
 Blackstock v. N. Y., etc., R. Co .. 434, 450 
 Black & White Smith Soc. v. Vandyke. 85 
 
 89 
 
 Blaclvwilder V. Loveless 526 
 
 Rladen v. Phila 260 
 
 Bladesv.Free 301 
 
 Blair v. Rutherford 35, 120, 139 
 
 Rlakev. Ferris 733 
 
 Blakev. Hinkle 656 
 
 Blake V. Livingston Co . . 351 
 
 Blakev. R. H. Co 479, 653, 664, 670 
 
 Blake V. Rich.., 578,588 
 
 Blakemore v. Glamorganshire Canal 
 
 Nav. Co 604 
 
 Blanchardv. Blackstone 271 
 
 Blanchard V. KauU 355, 356 
 
 Bland's Case 609 
 
 Blanding V. Burr 41 
 
 Blatchford v. Ross 248. 535, 548, 553 
 
 Blight V. Brent 184 
 
 Bliss V. Anderson 204, 516 
 
 Bliss V. Hosmer .564 
 
 Bliss V. Matteson 248, 546 
 
 Blodgett V. Morrill 134, 136, 443 
 
 Bloodv. Goodrich... 293, 337 
 
 Bloodgood V. Mohawk R. Co.... 433, 458 
 
 569, 593, 597, 605 
 
 Bloomfleld Gas Co. v. Richardson — 571 
 
 Blyth V. Birmingham Waterworks Co. 740 
 
 Board, etc., V. Scearce 46 
 
 Board of Education v Greenebaura . . . 401 
 
 Board of Liquidation v. McComb 679 
 
 Boardman V. Cutter 93 
 
 Bodinev Exchange F. Ins. Co 388 
 
 Bodwic V. Fennell 417 
 
 Bogardus V Rosendale Manuf. Co 114 
 
 Bohannon V. Binns 654, 671 
 
 Boland v. Mo., etc., R. Co 793 
 
 Bolt V. Stennett 51 
 
 Bolton V. Throgmorton 417 
 
 Bond V. Mount Hope Iron Co 176 
 
 Bond V. Poole 350 
 
 Bonaparte v. Camden, etc. , R. Co 561 
 
 571, 605 
 
 BonellisTel. Co.. Re 333 
 
 Bonesteel v. Mayor, etc 380 
 
 Bonk V. Clark 114 
 
 Bonnell v. Wheeler 341 
 
 Bonner V. State 678 
 
 Booe V. Junction R. Co 140 
 
 Booker, Ex parte 134, 303, 447 
 
 Boon V. Chiles 508 
 
 Boon V. Utica 355 
 
 Booth V. Bunce 547 
 
 Booth V.Clark 543 
 
 Booth V. Farmers & Mechanics Bk. . . 434 
 Bordentown, etcT. Co. v. Imlay. .. 133 
 Boston Glass Manuf. Co. v. Langdon.. 73 
 653, 657, 6.59, 666 
 Boston Mill Dam Co. v. Newman.. 569, 571 
 
 573, .578 
 
 Boston Overseers, etc. , v. Sears 90 
 
 Boston, etc., R. Co. V. Coram . ... 155, 161 
 
 690 
 Boston, etc., R. Co. v. Gilmore... 530. 637 
 Boston, etc., R. Co. v. Midland R. R. 
 
 Co 618 
 
 Boston, etc., R. Co. v. Salem, etc., R. 
 
 Co 58. 563, 566, 649 
 
 Boston, etc., R. Co. v. Wellington 143 
 
 Boston Water Power Co. v. Boston, etc., 
 
 R. Co 553, 563, 568 
 
 Bosworth V. Budgen 417 
 
 Bosworth V. Hearne 417 
 
 PAGE. 
 
 Boulard V. Calhoun 473 
 
 Mow V Allenstown 13 
 
 Bowen V. Irish Presb. Cong 411 
 
 IJowen V. Morris 283 
 
 Boweringv. Shepherd 1.56 
 
 Bowler V. Lane .. . 473 
 
 Bown V. County of Somerset 280 
 
 Bowyerv. Giles, etc., Turnpike Co 34 
 
 Boyd v. Blankman 249 
 
 Boyd V. Chesapeake 530 
 
 Boyd V. Hall 108 
 
 Boyd V. Plumb .. 277 
 
 Boyden V. IJrooklino 304 
 
 Boylan V. Hagnel 93 
 
 Boyland v. Mayor 355 
 
 r.oynton V. Turner 446 
 
 Brackett v. Lubke 733 
 
 Brace V. Ormond 509 
 
 IJradlee v. Boston Glass Co 282, 284 
 
 Bradley v. Ballard 357, 373, 375, 386 
 
 Bradley V. Boston R. Co 451 
 
 Bradley v. Holdsworth 1.54, 184 
 
 Bradley v. N. Y., etc., R. Co.... 39, 58, 344 
 Bradley v. N. Y., etc., K, Co. ..339, 569, 571 
 
 Bradley V. Richardson 483 
 
 Bradly V. Buffalo, etc., R. Co 793 
 
 Bradshaw V. Rogers 597 
 
 Bradstreet, Ex parte 677 
 
 Bradstreet v. Bank of Royalton 334 
 
 Bradt V. Benedict 659 
 
 Hrady v. Mayor, etc 387, 334, 355, 394 
 
 Brainard V. Clapp 587 
 
 Brainerd v.N. Y., etc., R. Co 3.51 
 
 Brai nerd V. Peck 388,633 
 
 Branch Bank Ala. v. Collins 260 
 
 Branch State Bank v. Knoop 698 
 
 Brandv. R. Co 762,791 
 
 Brandon Iron Co. v. Gleason 6.57, 6.59 
 
 Branham v. San Jose .. 303 
 
 Brannou v. Baltimore R. Co 474 
 
 Branser v. New Eng. F. Ins. Co . . . ... 486 
 
 Brass v. Worth .234, 294 
 
 Bredin v. Dubarry 237, 296 
 
 Breedlove v. Martinsville R. Co .. 153 
 
 Breedlove v. Wamack 446 
 
 Brendell v. Buffalo, etc., R. Co 787 
 
 Brent v. Bank 198,430 
 
 Brewer V. New Gloucester 40 
 
 Brewer V. I'rop., etc 513 
 
 Brewster v. Hartley. . . 319, 431 
 
 Brewster v. Hough 690, 698 
 
 Brewster V. Sime 176 
 
 Brewster v. Stratman 314 
 
 Brick Pres. Church v. Mayor 417, 419 
 
 Brickner v. R. Co 794 
 
 Briggs V. Penniman 114, 671 
 
 Briggs V. Johnson 678 
 
 Brightwell V. Mallory.. 158, 189 
 
 Brigham V. Blead 99 
 
 Brignoli v. Chic, etc.. R. Co 7.50, 751 
 
 Bridge Co. v. Grand Junction R. Co . . 4.59 
 
 Bridge Co. v. Hoboken Co 339, 563 
 
 Bridge Co. v. Loomis 469 
 
 Bridge Co. V.Lowell 563,566 
 
 Bridgeport V. Bishop 695 
 
 Bridgeport v. R. R. Co 67, 286,355, 711 
 
 Bridgeport (Mty Bank v. Empire, etc., 
 
 R. Co 167,190,383,387 
 
 Bridges v. N. London R. Co 758 
 
 Brinkerhoff v. Brown 659 
 
 Brinley v. Blann 411 
 
 Bristol V. Chic , etc., R. Co 694 
 
 Bristol , etc . , R. Co . v. Locke 146 
 
 British American Land Co. v. Ames. . . 485 
 
 British Sugar Ref. Co., Re 313, 823 
 
 Broadbent v. Imp. Gasl. Co 779 
 
 Broadnox's Case 417 
 
 Broadway Bank v. McElrath ..91, 190, 201 
 Broadwell v. Broadwell 527
 
 Table of Cases Cited. 
 
 xxiu 
 
 Brockway v. Allen 28.'3, 
 
 Brokawv. N. J., etc., R. Co.. ..443, 450, 
 
 Bromley V. Coxwell 
 
 Brotisoii Agricultural, etc., As3'n. v. 
 
 Ramsdell .. 
 
 Brooklyn C. R. Co. v. Brooklyn City 
 
 R.Co 
 
 Brooklyn Grand Road Co. v. Slaughter, 
 
 Brooks Paper Works v. Willet 
 
 BrookvilleT. Co. v. McCarty 6.54, 
 
 Broughton v. Manchester Waterworks 
 
 Co 
 
 Brouvver V. Hill 
 
 Brown V. Beatty 561, 
 
 Brown v. Leckie 
 
 Brown v. McGregor 
 
 Brown V. N. Y. C. R. Co 
 
 Brown v. Pac. Mail Steam S. Co... 313, 
 
 Brown v. Purvience 
 
 Brown v. Somerset 
 
 Brown v. S. Kennebec Ag. Soc 
 
 Brown V. Union Ins. Co 
 
 Brown v. Van Dyke 204, 303, 
 
 Brown v. Winnisimmet Co 233, 
 
 Browne V. Providence, etc., R. Co — 
 
 Browning V. Morris 
 
 Brown lee v. Ohio, etc.. R. Co.. 134, 443, 
 Brownlowv. Metropolitan Board .... 
 
 Bruce v. Lord 385, 
 
 Bruce V. Smith. 
 
 Bruff V.Mali 341, 
 
 Bruffett V. G. W. R. Co.. 315, 538, 649, 
 
 Bruning v. New Orleans, etc., Bank 
 
 Co 
 
 Bryan v . Reynolds 
 
 Brvand V. Goodman 
 
 Bryant v . Rich 730, 763, 773, 
 
 Bryon V. Carter 
 
 Bu(:hanan v. Hamilton 
 
 Buchanan v. Upshaw 
 
 Buck v. Lockport 
 
 Buckfleld R. Co. v. Irish 130, 
 
 Buckley V. Derby Fishing Co 
 
 Buckley V. Briggs 383, 401, 
 
 BuckniHSter v. Consumers' Ice Co 
 
 Buckmaster v. Gt. E. R. Co 
 
 Bucksport, etc., R. Co. v. Buck 
 
 Buclvsport, etc., R. Co. v. Dameson ... 
 Buckwater v. Blackrock Bridge Co. . . . 
 Buel v. Buckingham Co. . .348, 3.55, 366, 
 
 Buffalo V. Kortright 
 
 Buffalo, etc., R. Co. v. Brainard 
 
 Buffalo, etc., R. Co. v. Dudley.. .63, 6.5, 
 
 130,135, 180, 
 
 Buffalo, etc., R. Co. v. Hatch .. ..34. 
 
 Buffalo, etc., R. Co. v. Lampson..348, 
 
 Buffalo, Bayou, etc., R. Co. v. Terris.. 
 
 Buffett V. G. W. R. Co 
 
 Buffett V. Troy & B. R. Co ...286, 339, 
 Bulkley v. Derby Fishing Co. . 339, 338, 
 
 Bullard V. Bank 93, 413, 
 
 Bullard v Kinney 
 
 Bullock V. Curry 
 
 Bulowe V Charleston 
 
 Bundy V. Blrdsall 
 
 Burliridge v. Morris 
 
 Burden V. Stein 
 
 Burgess v. Clark 
 
 Burgessv. Pue 374, 
 
 Buraessv.R. Co 752, 
 
 Burke v. Broadway, etc.. R. Co 
 
 Burkev. Gt. West. R. Co 
 
 Burke V. Norwich, etc., R. Co 
 
 Burkev Smith 218, 
 
 Burliinshaw v. Birmingham & Oxford 
 
 Ry. Co 
 
 BurlingtonR. Co. v. White 
 
 Burneav. Penne 
 
 Burnes v. Pennel 
 
 liurnes v. Plienix Glass Co 
 
 Burnett, Ex parte 
 
 Burns v . Cork , etc . , R . Co 
 
 Burr V. McDonald 387, 
 
 Burr v. Wilcox 114,138, 
 
 Burrill v. Nahant Bank . 217, 233,239, 
 
 Burroughs v. North Carolina R. Co 
 
 Burroughs v. Richmond 
 
 Burrows v . Erie R. Co 
 
 Burrows v. Smith 134, 
 
 Burt v. Farrar 30, 
 
 Burton, In re 
 
 Busey V . Hooper 33 
 
 Bush V Shipman 
 
 Bush V. Steinman 
 
 Bushwick, etc., Co. v. Ebbets 32, 
 
 Butchers' Ben. Soc 
 
 Butler V. Corn well Iron Co 
 
 Butler V. Dunham 
 
 Butler V. Pres. of College of Physi- 
 cians 
 
 Butler v. Watkins 445, 
 
 Butterfleld v. Western, etc. , R. Co ... 
 
 Butternuts, etc. , Turnp. Co. v. North. 
 
 Butterworth v. O'Brien 543, 
 
 Buttrick V. Holden 
 
 Butts V. Wood.. . 343, 248, 353, 260, 513, 
 
 Butz V. Mass 
 
 Butz V Muscatine 653, 
 
 Cabot, etc.. Bridge Co. v. Chapin..ll9, 
 
 Cadv V . Potter 
 
 Cahill V Kalamazoo Mut. Ins. Co.. 31, 
 413, 425, 054, 656, 666, 
 
 Cain V. Heard 
 
 Calais Steamboat Co. v. Van Pelt 
 
 Calder Nav. Co. v. Pilling 
 
 Caldwell v. Murphy 
 
 Caldwell v. N. J. Steamb. Co. 468, 471, 
 
 Calhoun V. Richardson 341, 
 
 California Nav. Co. v. Wright 
 
 California, etc.. R. Co. v. Butte Co — 
 California Tel. Co. v. AltaTel. Co. ... 
 
 Callender v. Marsh 
 
 Camblos v. Phila., etc., R. Co 
 
 Camden & A. R Co. v. Briggs 
 
 Camden, etc., Co. v. Swede Iron Co.. 
 
 Came v. Brighara 
 
 Carameyer V. German Churches 
 
 Camp V Byrne 
 
 Campbell V. Poultney 
 
 Canal Appraisers v . People 
 
 Canal Bridge V. Gordon 
 
 Canal Co. v. Bonham 
 
 Canal Co. v. R. R. Co.. 6.50, 654, 659. 666, 
 
 Cannon V McNab 371, 
 
 Carbon Iron Co. v. Carbon County — 
 
 Carey v. Cine, etc., R. Co 443, 504, 
 
 Carey v. Giles 
 
 Carhart v. Auburn Gas L. Co. 
 
 Carlisle v. Evansville, etc., R. Co 
 
 Carlisle V. Terre Haute, etc., R. Co... 
 
 Carlisle F Nat. Bk. v Graham 
 
 Carman V. Steubenville, etc., R.Co — 
 
 Carneal V. Banks 
 
 Carpenter v . Farnsworth . 
 
 Carpenter V. Mercantile Bk — 
 Carpenter v. N. Y., etc. , R. Co 
 
 Carr v . Chartier's Coal Co 
 
 Carr v. Le Fevre 
 
 Carr v. St. Louis 308, 413, 420, 
 
 Carrington v. Wycombe Ry. Co 
 
 Carroll v. East St. Louis 348, 
 
 Carroll v. Hinkley — 
 
 Carson v. African Co 
 
 155, 
 
 448 
 32 
 343 
 416 
 741 
 407 
 173 
 407 
 154 
 3.53 
 756 
 140 
 117 
 680 
 96 
 649 
 435 
 66 
 89 
 347 
 713 
 
 24 
 44T 
 788 
 788 
 126 
 669 
 175 
 .533 
 714 
 713 
 
 131 
 163 
 386 
 671 
 337 
 175 
 433 
 469 
 473 
 303 
 504 
 685 
 563 
 S97 
 47 
 339 
 486 
 343 
 333 
 505 
 331 
 598 
 233 
 528 
 671 
 391 
 695 
 671 
 273 
 779 
 136 
 553 
 455 
 4.58 
 737 
 495 
 296 
 .505 
 159 
 308 
 114 
 423 
 590 
 373 
 113 
 5::0
 
 XXIV 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 Carson v. Coleman StiO 
 
 Cartan V. Father Matthew, etc., Soc .. 415 
 
 Carter V. Burley '6^2 
 
 Carter v. Bean of Ely 401 
 
 Carter V. Howe Machine Co 453 
 
 Cary V. Cleveland, etc., R. Co 375 
 
 Cary v. Matthews 267 
 
 Caryl v. McElrath 6;j4 
 
 Case V. Citizens' Bk 194, 195 
 
 Casev. Dillon 711 
 
 Case V. Mechanics' Bk 730 
 
 Casev. North. Cent. R. Co 78a 
 
 Cass V. Dillon 80 
 
 Castellan V. Hobson 156 
 
 Castleman V. Holmes 113 
 
 Castro V. Howe Machine Co 453 
 
 Caswell V. Boston & W. R. Co 757 
 
 Cathcart V. Robinson .537 
 
 Cathorn V. Towle 113 
 
 Catlin V. Bell 291 
 
 Catlin V. Eagle Bk 540 657 
 
 Catskill Bk. V. State 377 
 
 Cayuga Bridge Co. v. Magee 58 
 
 Cayuga, etc., R. Co. v. Kyle 34 
 
 Cazeauxv. Mali 207, 242, 255 
 
 Center T. Co. v. McConahy ....... 133, 505 
 
 Cent. T. Co. Valentine 119 
 
 Central Bk. of Georgia v. Gibson 559 
 
 Cent. Bank of Georgia v. Little 79 
 
 Cent. Bk.v. Empire Stone Dressing Co .383 
 
 387 
 
 Cent. Bridgev. Lowell 44, 553 
 
 Cent Gold Mining Co. v. Piatt 68 
 
 Cent., etc., R. Co. v. Baches 480 
 
 Cent., etc., R. Co. v. Clemens 137 
 
 Cent , etc. , R. Co. v. Collins , ,514 
 
 Cent., etc. , R. Co. v. Dixon 788 
 
 Cent., etc., R. v. Georgia 554, 698 
 
 Cent., etc., R. Co. v. Kisch...l33, 441, 448 
 
 Cent , etc., R. Co. V. Ward 201 
 
 Cent., etc., R. Co. v. Weldon 480 
 
 Cincinnati V. Stone 737 
 
 Chaffee v. Granger 335 
 
 Chaffin v Cummings 181 
 
 Chamberlain v. Ashtabula, etc., R. Co. 131 
 
 Chamberlain v. Chandler 763, 770, 774 
 
 Chamberlain V. Compton 414, 417 
 
 Chamberlain V. Dover 317 
 
 Chamberlain v. Huguenot Mfg. Co. . 36 
 Chamberlain V. Painesville, etc., R. 
 
 Co 118, 124,127,313, 315 
 
 Chamberlinv. Huguenot Mfg. Cn 34 
 
 Chambers v. Ohio Life Ins. & Trust 
 
 Co 736 
 
 Chambers v. St. Louis 373 
 
 Chambersburg Ins. Co. v. Smith. .103, 164 
 
 178, 188 
 
 Champion V. White 446 
 
 Chandler V. Monmouth 303 
 
 Chapin v. Vermont, etc., R. Co 351 
 
 Chapin V. Sullivan R. Co 578 
 
 Chaplin v. Canada 483 
 
 Chapman v. Mad River, etc., R. Co... 124 
 
 375 
 
 Charles River Bridge v. Warren Bridge, 39 
 
 39. 56, 61, 339, 650 
 
 Charlotte, etc., R. Co. v. Blakely..ll6, 147 
 
 Charlton v. Newcastle & Cai-lisle Ry. 
 
 Co 548 
 
 Chase V. Blackstone Canal Co 677 
 
 Chase V. Sycamore &C. R. Co 90, 98 
 
 Chase V. Vanderbilt 213, 216, 5.56 
 
 Chautauqua County Bank v. Risley... 358 
 Cheltenham, etc., R. Co. v. Daniel... 173 
 Cheltenham, etc., R. Co. v. De Medina, 173 
 Chenango Bridge Co. v. Bing. Bridge 
 
 Co 39 
 
 Cheney V. Lafayette, etc., R. Co 259 
 
 Cheraw, etc., R. Co. v. White 141 
 
 Chesapeake, etc., Co. v. Bait , etc., 
 
 R. Co.. .. 552, 568 
 
 Chesapeake, etc., Co. v. Dulany 107 
 
 Chesapeake, etc , Co. v. Key 28 
 
 Chesapeake, etc., Co. v. Knopp 270, 394 
 
 Chester v . Dickerson 351 
 
 Chester Glass Co. v. Dewey.. .34, 90, 98, 131 
 
 181, 305, 50.5, 653 
 
 Chestnut Hill Co. v. Rutter.. ..394, 396, 458 
 
 Chest V. App. Tax Court 698 
 
 Chew V. Bank Baltimore 105 
 
 Chicago V. Langlass 469 
 
 Chicago V. Mayor . . 480 
 
 Chicago Building Soc . v. CroweIl....a33, 295 
 
 376 
 
 Chicago, etc., R. Co. v. Allerton 209 
 
 Chicago, etc., R. Co. v. Atty.-Gen'l 47 
 
 Chicago, etc., R. Co. v. Borough of 
 
 Fort Howard 530, 637 
 
 Chicago, etc., R. Co. v. Coleman 275 
 
 Chic, etc., R. Co. v. Fears 789 
 
 Chic. R. Co. V. Fell 458 
 
 Chic, etc., R. Co. V Gregory 793 
 
 Chic, etc., R. Co. v. Hazzand 756 
 
 Chic, etc,R. Co. v. Howard .... 344, 246 
 248, 484, 501, 508, 664 
 
 Chic, etc., R. Co. v. Iowa 48 
 
 Chic, etc., R. Co. v. McKean 786 
 
 Chic, etc., R. Co. v. Moffit .5.54 
 
 Chic, etc., R. Co. v. Patchin 583, .587 
 
 Chic, etc, R. Co. v. Payne 792 
 
 Chic, etc.,-R. Co. v. People 680 
 
 Chic, etc., R. Co. v. Quaintance 784 
 
 Chic, etc., R. Co. v. Randolph 756 
 
 Chic, etc., R. Co. v. Shannon 480 
 
 Chic, etc., R. Co. v. Stumps 739 
 
 Chic, etc., R. Co. v. Svvett 480 
 
 Chic, etc., R. Co. v. Triplett 787 
 
 Chic, etc., R. Co. v. Whipple 458 
 
 Chic, etc., R. Co. v. Williams 457 
 
 Child V. Hudson Bay Co 91, 104, 413 
 
 Chillicothe Bk. V. Chillicothe 386 
 
 Chouteau Spring Co. v. Harris 96, 164 
 
 188, 429 
 
 Christian University v. Jordan 237 
 
 Christ's Church V. Barksdale 241 
 
 Christ's Church v. Phila 700 
 
 Church Case. 318 
 
 Church V. City, etc 423 
 
 Church V. Imperial, etc., R. Co 396 
 
 Church V. Slack 676 
 
 Church V. Sterling 233, 239, 295 
 
 Church of the Ascensicn v. Buckhart. 785 
 
 Cincinnati V Gwynne 425 
 
 Cin. Mut., etc., V. Rosenthal 373 
 
 Cin., etc., R. Co. V. Cole 29, 47 
 
 Cin , etc., R. Co. v. Comrs.. 711 
 
 Cin., etc.,R. Co. v. Knowlton 559 
 
 Citizen's Bk. y. Howell 346 
 
 Citizen's, etc..', Ins. Co. v. Lott 155 
 
 City Bk. Columbus v. Bruce 217 
 
 City Council v. Ahrens 431 
 
 City Council V. Baptist Church 431 
 
 City Council v. Moorehead 406, 410 
 
 City Council V. Plankroad Co 356 
 
 City Hotel V. Dickinson 130, 143, 148 
 
 Cit. Mut. F. Ins. Co. v. Sortwell 313 
 
 ClaremontBk. v. AVood 633 
 
 Clark V. Boston Manuf. Co 333 
 
 Clapp V. County of Cedar ... 352 
 
 Clark V. Cuckfleld Union 341, 395, 404 
 
 Clark V. Denton 417 
 
 Clark V. Des Moines 286,343, 355 
 
 CI ark V . Dickson 441 , 447 
 
 Clark V. Eight Ave. R. Co 761 
 
 Clark V. Farmers', etc., Co 403 
 
 Clarkv. Fry 737 
 
 Clark V. Iowa City 351, 3.54 
 
 Clark V. Janesville 363
 
 Table of Cases Cited. 
 
 XXV 
 
 PAGE. 
 
 Clark V. Lecren 414,417 
 
 Clark V. Mayor 780 
 
 Clark V. Newsain . 473 
 
 Clay V. Oakley 30U 
 
 Clark V. Polk County 287, 355 
 
 Clark V. Pratt 280,405 
 
 Clark V. Saybrook 58 
 
 Clark V. Van Northwick 272 
 
 Clark V. Van lleinisdyk 233. 293 
 
 Clark V. Washington .279,282, 337 
 
 Clark V. Woolen Man. Co 407 
 
 Clarke V. Benton Manf. Co 308, 410 
 
 Clarke V. Imperial Gas Co 407 
 
 Clarke v. Rochester 666, 713 
 
 Clarke V. Rochester, etc., R. Co 526 
 
 Clay V. Rufford 222 
 
 Clearwater V. Meredith 143, 548, 550 
 
 Clevelands v. Grand T. R. Co.. . . 462, 782 
 
 Cleaves V. Turnpike Co 131 
 
 Cles-'horn v. N. Y. Cent., etc., R. Co 474 
 
 Clemens v. Hannibal, etc., R. Co 7S3 
 
 Cleveland, etc., R. Co. v. Erie 505, 654 
 
 Cleveland, etc., K. Co. v. Robbins .... 193 
 
 Cleveland, etc., R. Co. v. Rowan 479 
 
 Cleveland, etc., R. Co. v. Speer 43, 560 
 
 Cleveland , etc. , R. Co. v. Terry 783 
 
 Clinch V. Financial Corp 546 
 
 CliiiLon, etc., R. Co. v. Eason 99 
 
 Clippinger V. Hepbaugh 307 
 
 Coal Co. V. Blatchford 522 
 
 Coates V. Clarence R. Co 780, 782 
 
 Coates V. Nottingham, etc., R. Co 178 
 
 Coates V. N. Y 420 
 
 Coburn v. Boston Papier Mache Man. 
 
 Co 567 
 
 Coburn V. Wheelock 71 
 
 Cockburn V. Union Bank 177 
 
 Cochran v. Arnold 505 
 
 Cook ran v. Irlam , 290 
 
 Cochrane v. Miller 474 
 
 Cockle V. S. E. Ry. Co 757 
 
 Coe V. Columbus, etc., R. Co. ..215, 387, 522 
 528, 530, 532, 631, 037 
 
 Coe V. Johnaon 87 
 
 Coev. McBrown 388. 631, 634 
 
 Coe V. Pen nock 631 
 
 Coey V. Belfast, etc., R. Co . 178 
 
 CofBav.Rich 46, 113 
 
 Cohen V. Wilkinson 517 
 
 Coil v. Pittsburgh Female College 134 
 
 Colchester v. Goodwin 417 
 
 Coleman V. Colutnbia Oil Co . 154 
 
 Coleman v. Columbia R. Co 154 
 
 Coleman v. Eastern Counties R. Co 339 
 
 383 
 
 Coleman V.N. Y., etc., R. Co 457, 762 
 
 Coleman v. Sec. Ave. R. Co 248 
 
 Coleman v , Spencer 533 
 
 Coles V. Bank of England 106 
 
 Coles V Bristowe 156 
 
 Coles V. Trecoothick 290 
 
 College of Physicians v. Lablas 4S3 
 
 CoUen V. Wright 299 
 
 Collier v. Collier 158 
 
 Collins V. Godfrey 205 
 
 Collins V. Hammock 368 
 
 Collins V. Hatch ... 414 
 
 Collough V. Moss 342 
 
 Colman v. Easter, etc., R. Co. . . 516, 523 
 Colonial Assn. of Ireland v. Bentley.. 103 
 
 Colonial Bk. v. Cherry 243, 245 
 
 Colorado &Ind. C. R. Co. v. Farrell... 758 
 
 Colquitt V. Howard 247 
 
 Coltv. Ives 93, 164, 191, 202, 429 
 
 Columbia v. Beasly 691 
 
 Columbia Bk. v. Patterson... 233, 270, 284 
 293, 335, 396, 401, 403, 408, 410 
 
 Columbia Ins. Co. v. Cooper 289 
 
 Columbus, etc., R. Co. v. Farrell... . 754 
 D 
 
 Columbu.s, etc., R. Co v. Powell 
 
 Colville v. Ry 
 
 Comeau v. Guild Farm Oil Co 
 
 Commerce Bk. v. Dalrymple 
 
 Commerce Bk. v. N. Y 690, 
 
 Commercial Bk. v. French 
 
 Commercial Bk. v. Kortright 100, 
 
 Commercial Bk. y. Lockwood G51, 
 
 Commercial Bk. v. Newport Man. Co . 
 
 Commercial Bk. V. Norton 290, 
 
 Commercial Bk. v. State 42, 44, 
 
 Commercial Bk. v. Union Bk 
 
 Commercial Ins. Co. v. Ives 
 
 Comins v. Coe 
 
 Commissioners V. Bank of Buffalo 
 
 Uomrs. V. Baroux 
 
 Comrs. V. Bright 
 
 Comrs. V. Cox 287, 
 
 Comrs. V Erie, etc., R. Co 
 
 Comrs. V. Gas Co 
 
 Comrs. V. Holyoke Water P. Co 62, 
 
 Comrs. V. Keller 
 
 Comrs. V. Philadelphia 
 
 Comrs. V. Supervisors 
 
 Comrs. V. Troy, etc., R. Co 
 
 Comrs. of Cent. Park, Matter of 
 
 Commonwealth v. Allegheny Bridge 
 
 Co 612, 618, 625, 654, 
 
 Comm. V. Arrison 612, 
 
 Comm. V. Athern ... 
 
 Comm. V. Atlantic, etc. , Co 
 
 Comm. v. Bk. of Brest 35, 
 
 Comm. V. Blue Hill Turnpike 
 
 Comm. V. Breed 573, 
 
 Comm. V. Burrell 
 
 Comm. V. Cambridge 
 
 Comm . V. Carey Improvement Co 
 
 Comm. V. Cluley 618, 
 
 Comm. V. Commercial Bk ... 612, 620, 
 
 Comm. V. Crane 
 
 Comm. V. CuUen 42, 44, 656. 
 
 Comm. V. Dennison 
 
 Comm. V. Eastern R. Co 
 
 Comm. V. Erie, etc., R Co 
 
 Comm. V. Essex Co 63, 
 
 Comm. V. Farmers' Bk 618, 
 
 Comm. V. Fayette R. Co 64, 
 
 Comm. V. Fisher 
 
 Comm. V. Fitchburg R. Co 
 
 Comm. V. Fowler 
 
 Comm . V . Guardians of the Poor 
 
 Comm. V. German Soc 86, 
 
 Comm. V. Gill ....^. 414, 
 
 Comm. V. Graham 012, 
 
 Comm. V. Green 
 
 Comm. V. Hamilton Man. Co 690, 
 
 Comm . V. Hancock Bridge 
 
 Comm. V. Ipswich 
 
 Comm. V. Jarrett 
 
 Com m . V Liquors , 
 
 Comm. V. Lowell Gas Co 690, 
 
 Comm. V. McBride 
 
 Comm. V. Mayor, etc .. 
 
 Comm. V. Med. Soc. Erie 
 
 Comm. V. Murray 
 
 Comm. V. Nashua & Low. R. Co 
 
 Comm. V. New Bedford 649, 
 
 Comm. V. Penn. Beneficial Inst ... 85, 
 
 Comm. V. Perkins 
 
 Comm. V. Phila., etc , R. Co 
 
 Comm. V. Philanthropic Soc 
 
 Comm. V. Pike Beneficial Soc 85, 
 
 Comm. V. Pittsburgh 45, 80, .355, 
 
 Comm. V. Pittsburgh, etc., R. Co 
 
 .554 
 
 .558 
 ti05 
 191 
 1.55 
 708 
 483 
 201 
 278 
 654 
 386 
 395 
 371 
 657 
 451 
 289 
 164 
 232 
 678 
 505 
 355 
 339 
 414 
 64 
 651 
 355 
 675 
 678 
 388 
 574 
 
 658 
 625 
 615 
 554 
 217 
 
 40 
 577 
 619 
 601 
 690 
 655 
 650 
 258 
 666 
 673 
 651 
 
 64 
 651 
 625 
 696 
 668 
 653 
 616 
 
 85 
 
 89 
 423 
 625 
 
 12 
 697 
 779 
 318 
 
 30 
 
 46 
 697 
 614 
 419 
 
 89 
 613 
 796 
 796 
 
 89 
 713 
 625 
 
 89 
 
 S9 
 560 
 
 63 
 650
 
 XXVI 
 
 Table of Cases Cited. 
 
 PAGE 
 
 Comm. V. Power 772 
 
 Coiiiiii. V. QuiolisllverMin. Co.... 493, 500 
 
 Comm. V. Reed 779 
 
 Couiin V. Keitrart 655 
 
 Comm. V. Kobertson 414 
 
 Comm. V. KomauCath. Soc 221 
 
 Comm. V. Rosseter . 077 
 
 Comm V. Roxbui-y OlW 
 
 Uomm. V. St. Mary's 510 
 
 Comm. V. St. Patrick's Benev. Soc ... 85 
 Comm. V. Smith ... 215, 387, 615, 635, 655 
 
 Comm. V. Sparlvs 615 
 
 Comm. V. Stodder 417 
 
 Coram. V. Tenth Mass. Tump 012 
 
 Comm. V. Tewksbury ,508 
 
 Coram. V. Turner 414 
 
 Comm. V. Union Ins. Co 650, 0.>i 
 
 Comm V. Westborougrh — . . 001 
 
 Coram. V. Westchester R. Co... 10, 28, 120 
 
 Coram, V. Worcester 414 
 
 Comm. Ins. Co. v. Crane Mi 
 
 Comparet V. Burr i)3 
 
 Compton V. Sus. R. Co 594 
 
 Comstock, In re 348, 390 
 
 Conant v. Seneca Co. Bk 91 
 
 Conant V. Van Schaick 112 
 
 Concord Bank V. Gregg 440 
 
 Concord R. Co. v. Greeley. .561, 570, 577, 606 
 
 Congregation V. Johnston oil 
 
 Congregational Soc. v. Perry 505 
 
 Conklin v. Sec. Nat. Bank 416 
 
 Connecticut V. Penn 293,446 
 
 Conn. Mut. L. Ins. Co. v. Cleveland, 
 
 etc., R. Co. 351,3.53 
 
 Conn., etc., R Co. v. Bailey ..134, 130, 421 
 
 443, 6.54 
 Conn., etc., R. Co. v. Baxter .... .133 
 
 Conn., etc., R. Co. v. Holton 583, 589 
 
 Conn. Ins. Co. v. Cleveland 282 
 
 Connell v. Woodward 484 
 
 Conner V. Southern Ex. Co 113 
 
 Conover V. Ins. Co 274 
 
 Couro V. Port Henry Iron Co.. 221, 233, 248 
 
 285, 297, 418, 510 
 
 Conservators of River Tone V. Ash ... 27 
 
 Contoocook Valley R. Co. v. Barker.l 19, 151 
 
 Conway, Ex parte 388, 673 
 
 Convbeare V. New Brunswick 447 
 
 Cook V. Tullis 239, 292 
 
 Cookev.State Bank 274, 277 
 
 Cooley V. Granville 69 
 
 Coombe v. Scott 294 
 
 Cooper V. Curtis 6.52 
 
 Cooper V. Frederick 414, 520 
 
 Cooper V. Gooderich 269 
 
 Cooper V. Rankin 337 
 
 Cooper V. Williams 561 
 
 Copeland v. Merchants' Ins. Co 446 
 
 Copes v. Charlestown 713 
 
 Copley V Grover & Baker S. Mach. Co. 452 
 
 Copper Mines v. Fcjx 395 
 
 Corbett V. Woodward 213, 214 
 
 Corey V . Long 543 
 
 Corfleld V. Coryell 489 
 
 Cork & Yougra Ry. Co. v. Paterson... 5.57 
 Corn Ex. Bank v. Cumberland Coal 
 
 Co 323 
 
 Cornell v. Guilford 3.55 
 
 Cornell v. Hay. 241 
 
 Cormack v. Richards 92, 193 
 
 Corning V. McCullough 112, 114 
 
 Corning V. Southland 233 
 
 Cornraan v. Eastern Co. R. Co .. 751, 7.53 
 
 Cornwall V. Easthman 113 
 
 Cornwall G. C. M. Co. v. Bennett... 1.52 
 
 Corrigan v. Trenton, etc., Co 400, 404 
 
 Corrigan v. Union Sugar Refinery Co.. 732 
 
 Corry v. Londonderry, etc., R. Co 178 
 
 Corse v. Sanford 113 
 
 Corser v. Paul 293 
 
 Cosgro ve v. Ogden 725, 730, 733, 795 
 
 Coster v. Tide Water Co .561 
 
 Cotheal V. Brower 178 
 
 (/Othier V. Midland R. Co 590 
 
 Cottrill V. Myrick 570 
 
 Coulter V. Robertson 668, 670 
 
 Coulter V. Trustees, etc 26 
 
 County Comrs. V. Cox 668 
 
 County Life Assurance Co., In re... 256 
 County Palatine Loan, etc, Co., lore. 171 
 
 Courcier v. Ritter 295 
 
 Courtright V. Deeds 183 
 
 Couteulx V. Buffalo 339 
 
 Covey V. Pittsburg, etc., R. Co 638 
 
 Covington v. Covington Bridge Co. 44, 287 
 Covington, etc., Co. v. Kenton Co... 711 
 Covington Draw Bridge Co. v. Shep- 
 herd 26, 495, 529, 534, 536 
 
 Cowell V.Colorado Springs Co 21 
 
 Cowles V. Cromwell 171 
 
 Cowles V. Mercer County 494 
 
 Cox V. Bodfish 12 
 
 Cox V. Midland R. Co 279 
 
 Cox V. Vanderkleed 469 
 
 Craig V. Ward 446 
 
 Craig V. Vicksburg .3.52 
 
 Craker v. Chicago & N. W. R. Co 763 
 
 Cram v. Bangor House 266, 326 
 
 Crane, Ex parte 674, 677, 683 
 
 Crawford v. Pittsburg, etc., R. Co... 133 
 
 Crawfordsville R. Co. v. Wright 458 
 
 Crease v. Bahcock 63, 523, 650, 664 
 
 Crenshaw v. State Riv. Co 573 
 
 Crocker v. New LondoD, etc., R Co. 4.57 
 
 Crocket v. Young 273 
 
 Croft V. Alison 719 
 
 Crook V. Jewett 242 
 
 Crosby V. Hanover 552, 563, 566 
 
 Cross V. Guthrey 479 
 
 Cross V. Phenix Bank 430 
 
 Cross V. Sackett 242, 449 
 
 Crossman v. Bristol, etc., R. Co 590 
 
 Grossman V. Penrose P. B. Co 135 
 
 Grossman v. Hilltown, etc., Co. .392, 410 
 
 Crump V. U. S. Mining Co... 31, 133, 135, 446 
 
 451, 654, 671 
 
 Cruse V. Paine 156 
 
 Crystal Lake Ice Co. v. Backus 612 
 
 Culbertson v. Wabash Nav. Co. 107, 359, 484 
 Cumberland Coal Co. v. Parish. . .. 213, 216 
 Cumberland Coal Co. v. Sherman.. 248, 295 
 
 523 
 
 Cumberland College v. Ish 557 
 
 Cumberland, etc., R. Co. v. Portland.. 694 
 
 Cumraings V. Maxwell 46, 113 
 
 Cummingsv, Webster 417 
 
 Cunningham v. Ala. L., etc., Ins. Co.. 104 
 
 430 
 Cunningham v. Edgerfleld, etc., R. 
 
 Co 130 
 
 Cunningham v. Soules 300 
 
 Cunningham v. Vermont 158 
 
 Curdy v. Rodgers ... 300 
 
 Curien v. Santini 660 
 
 Curlingv. Chalklen 279, 281 
 
 Curranv. State.... 79, 179, 206, 209,244, 246 
 515, 651, 663, 668 
 
 Currie v. White 154 
 
 Currier v. Lebanon Slate Co 171 
 
 Curry V. Farmers' Bank 155 
 
 Currv v. Mt. Sterling 569 
 
 Curry V. R. R. Co 31 
 
 Curry V.Scott 65,182,209 
 
 Curry v. Woodward 154 
 
 Curtis V. Detroit, etc., R. Co 761 
 
 Curtis V. Leavitt 339, 343, 380, 387, 543 
 
 Curtis v. McCullough 486, 080 
 
 Curtiss V. Murry . . 113, 483
 
 Table of Cases Cited. 
 
 xxvii 
 
 PAGE. 
 
 Curtiss V. Rochester, etc., R. Co 4(i8 
 
 Cushinan V. Loksr 2il'i 
 
 Cusliinan v. Smith 59- 
 
 Cushraan V. Thayer Mfg Co 100, I'M 
 
 Custer V. Tittiaville Gas, etc , Co 444 
 
 Cutler V. Middlesex Factory Co... 131, 248 
 Cuyler V. Rochester 287, 355 
 
 Dabney V. Stevens 227,289, 431 
 
 Dacosta V. Russia Co 679 
 
 Dalandv. Williams 156,161 
 
 Daley V. Norwich, etc., R. Co 792 
 
 Dally v.Wonham 139 
 
 Dalrymple V. Whltingham 3.55 
 
 Damon V. Granby 284,318,407 
 
 Damotit V. N. O., etc., R. Co 7.56 
 
 Dana V. Bank of U. S 388,418, 510 
 
 Dana V. Brown 103 
 
 Danbury, etc.,R. Co. v. Wilson — 143, 180 
 
 Dane V. Young 414 
 
 Danelv V. Brown 108 
 
 Danforth v. Schoharie Turnp. Co.. 394, .396 
 
 Daniels v. Flower Brook Co 315 
 
 Darcy v. Tamar, etc., R. Co 266, 323 
 
 Darlinerton V Mayor, etc 41 
 
 Darnell v. Dickens 406, 410 
 
 Dart V . Farmers' Bank 486 
 
 Dartv. Houston 619 
 
 Dart V. Hunston 483 
 
 Dartmouth College V. Woodward — 3, 10 
 
 16, 29, .38, 43, 60, 66, 75, 338, 356, 649, 652, 705 
 
 Daterv. Troy &T.R. Co 433 
 
 Davenport V. Dower 513 
 
 Davenport v. Hallowell 272 
 
 Davenport v. Peoria, etc., Ins. Co. ,402, 407 
 
 David v. South W. R. Co 480 
 
 Davidson v. Bridgeport 233, 274 
 
 Davidson v. Cooper 404 
 
 Davidson V. Rankin 110, 113 
 
 Davis v. Bank of England 82, 105, 424 
 
 Davis V. Bilsland 645 
 
 Davis v. Chic, etc., R. Co 760 
 
 Davis V. London, etc., R. Co 753 
 
 Davis V. Maynard 531 
 
 Davis V. Mayor 779 
 
 Davis V. Mobile Bank 285 
 
 Davis V.N. Y. C. R. Co 790 
 
 Davis V. North River Ins. Co 338 
 
 Davis V. Prop, of Meeting House. . .343, 414 
 
 Davis V. Tuscumbia, etc., R. Co 571 
 
 Dawning v. Mt. Washington Co .. 357 
 
 Dawson V. Manchester, etc., R. Co 750 
 
 Day V. Essex County Bk 623 
 
 Day V. Newark India Rubber Co 26 
 
 Day V. Owen 771 
 
 Day V. Stetson 31, 598, 652 
 
 Dayton V. Borst 130, 147 
 
 Dayton V. Pease 4,50 
 
 Dayton, etc., R. Co. v. Hatch 123, 129 
 
 221, 224, 418 
 
 Dean V La Motte 25 
 
 Dean V. Roesler 296 
 
 Dean V Hall 93 
 
 Dearborn V. Boston, etc. , R. Co 605 
 
 Deaton V. Polk Co 605 
 
 Debolt V. Ins. & Trust Co 427 
 
 DeCamp V. Alward 614, 627 
 
 Decker, Ex parte 675 
 
 Decker v. Freeman 407 
 
 De Cordovan v. Galveston 354 
 
 Dedham Hk. v. Chickering 31, 2.s0 
 
 Dedham Sav. Inst. V. Slack 238 
 
 De Forrest V. Wright .. 733 
 
 De Grave V. Mayor, etc 404 
 
 De Graff v. American Linen Thread 
 
 Co 279, 358, 376 
 
 Delacev V NeuseRiv. Nav. Co .... 82, 89 
 
 Delamatyr V. Mil , etc., R. Co 754 
 
 Delaware, etc., R. Co. v. Irick ... 143, 483 
 
 PAGE. 
 
 Delaware, etc.,R. Co. v. Thorp ..62, &51 
 
 Delaware Tax Cases 339 
 
 Delaware, etc.. Canal Co. v Coramrs.. 458 
 Delaware, etc.. Canal Co v. Common- 
 wealth 4.58 
 
 Delaware, etc. Canal Co. v. Sansom .. 147 
 
 Delamatyr V. R. Co 7.57 
 
 Den V. Vreelandt 406, 410 
 
 Den V. Wright 446 
 
 Denmead V. Bait. Bk 637 
 
 Dennis v. Kennedy .. 13 
 
 Denny V. Hamilton 533 
 
 Denny V. Manhattan Co 303 
 
 Densmore Oil Co. v. Densmore 139 
 
 Denton V. Gt. North. R. Co. 438, 776 
 
 Denton V. Jackson .. 27 
 
 Denton V. Livingston 184, 189, .533 
 
 Denton V. Macneil 448 
 
 De Pauw v. N. Albany 
 Deposit, etc., Ass. Co. 
 
 691 
 133 
 447 
 407 
 388 
 446 
 
 Ayscough . 
 441 
 
 Derby Canal Co. v. Wilmot 
 
 De Ruyter v. St. Peter's Church 
 
 Despard v. Walbridge 
 
 Detroit v Jackson 233, 239, 270, 410 
 
 Detroit Post Co. v. McArthur 478 
 
 Detroit, etc.,R. Co. v. Curtis 761 
 
 Detroit, etc., R. Co. v. Van Steinbuxgh, 788 
 
 790 
 
 De Varaigne v. Fox 561,668 
 
 De Vass V. Richmond 351 
 
 Devendorf v. Beardsley 54.H 
 
 Deveiidorf v. Dickinson 543 
 
 Devoyv. N. Y 260 
 
 Dewv. Judges G76, 681 
 
 De Witt V. Brisbane 890 
 
 De Witt V. Walton 286, 298 
 
 De Wolf v. Mallett 113 
 
 Dexter Plank R. Co. v. Millerd 128 
 
 Dey V. Jersey City 323, 338 
 
 Deyov. N. Y. C R. Co 750 
 
 Dickey v. Tennison .561 
 
 Dickinson v. Cent. Nat. Bank 93 
 
 Dickinson V. Chamber of Commerce.. 83 
 
 416 
 
 Dickinson v. Conway 294 
 
 Diggle V. London, etc., R. Co 395 
 
 Dill V. Wareham 355 
 
 Diligent F. Ins Co. v. Com 89 
 
 Dillingham v. Snow 13, 20 
 
 Dillon V. Wareham 355 
 
 Dingley v. Boston 571, 668 
 
 Dingman V People 46 
 
 Dispatch Line, etc., v. Bellamy Man. 
 
 Co 217,239,283,285,323,326,410 
 
 Dobbins V. Walton 198 
 
 Dobson V. Pearce 446 
 
 Dobson V. Racey 249 
 
 Dodge V. Lambert 293 
 
 Dodge V. McDonnell 294 
 
 Dodge V. R. Co 788 
 
 Dodge V. Woolsey. . . .202, 511, 513, 515, 699 
 
 Dodwell V. University of Oxford 419 
 
 Doe V. Martin 435 
 
 Donaldson V. Miss. & Mo. R. Co 480 
 
 Donell V Sanford 469 
 
 Donovan v.N.Y 286 
 
 Doiinaher V. State 563 
 
 Donnelly v. People 614 
 
 Donworth V. Coolbaugh 113 
 
 Dooley V. Cheshire Glass Co 35, .505 
 
 Dorian v. East Brandywine, etc., R. Co. 605 
 
 Dorr V. Munsell 446 
 
 Dorris V. French 131, 138 
 
 Dorsey, etc , R. R. Co. v. Marsh 68 
 
 Dobbleday V. Muskett 299 
 
 Doughaday V, Crowell 336 
 
 Dougherty v. Hampston 527 
 
 Dougherty v. Hunter 278
 
 XXVlll 
 
 Table of Cases Cited. 
 
 Doughty V. Hope 574 
 
 Doiifrlaa V. VirtriiiiaCity 335, 343 
 
 Doviistoii V. Pay lie 588 
 
 Dow V. Clark . 427 
 
 Downie V. White 121, 133 
 
 Downing v. Mt. Washington R. Co.. 60, 295 
 
 338, 35(; 
 
 Downing V. Totts .. 81, 98 
 
 Downinga V. Ruger 317 
 
 Doylo V. Continental Ins. Co ."Us 
 
 Doyle V. Miuitz 521 
 
 Doyle V. Peerless, etc., Co (w;j 
 
 Drake V. Hudson R. R., etc (ills 
 
 Draper v. Mass. S. Heating Co 290, 308 
 
 Drawbridge Co. v. Shepherd 488 
 
 Driukwater v. Portland Marine R 113 
 
 Driscoll V. West Bradley Man. Co. .416, 421 
 
 Drew V. Sixth Ave. R. Co 795 
 
 Drury v. Cross 348 
 
 Dubois V. Augusta 413 
 
 Dubois V. Canal Co 284 
 
 Dubois V. Hermauce 440 
 
 Dubois V. Wilson 645 
 
 Dubree v. Reliance Engine Co 80 
 
 Ducat V. Chicago 37,347,489,500 
 
 Duckworth V. Johnson 479 
 
 Dudley v. Jamaica Aqueduct Pond Co. 690 
 
 Dudley V. Kentucky High S 311 
 
 Dudley V. Price 520 
 
 Duffy V. Chicago, etc., R. Co.. . 786, 790 
 
 Duggins V. Watson 720, 702, 795 
 
 Duke V. Cahawba Nav. Co. . 91, 96, 104, 188 
 507, 654, 671 
 
 Dumper V. Syms 369 
 
 Duncan V. Jaudon 175 
 
 Duncan V. Lintley 100 
 
 Duncan V. Niles. 300 
 
 Duncan V. Surry Canal Co 458, 710 
 
 Duncuft V. Albrecht 185 
 
 Dung V. Parker 299, 301 
 
 Dunham v. Cin., etc., R. Co 388, 631 
 
 Dunham V. Isett 631 
 
 Dunham v. Rochester 414, 417 
 
 Dunham V. Trustees, etc 416 
 
 Dunham v. Williams 501 
 
 Dunkerson, Re . 415 
 
 Dunn V. Commercial Bank 187, 190 
 
 Dunn V. St. Andrew's Church. 394, 403, 410 
 
 Dunnell Man. Co. V. Pawtuck 690 
 
 Dunning v. North-western Turnpike 
 
 Road 355 
 
 Dunster V. Lord Glengall 92 
 
 Dunston v. Imperial Gas Co 265, 412 
 
 Dupeev. Boston Water Power Co 68 
 
 Durant V. Iowa Co 351 
 
 Duranty's case 439 449 
 
 Durf ee v. Old Col. & F. R. Co .63, 517 
 
 Durkee V. Stringham 184 
 
 Dusenbury V. Ellis , 300 
 
 Duston V. Imp'! Gas Co 358 
 
 Dutch West India Co. V. Moses 24 
 
 Dutchess Cotton Mill Manuf. Co. v. 
 
 Davis 126,146, 147, 501 
 
 Dutton V. Marsh 290, 298 
 
 Duvall V. Myers .'....' 5;0 
 
 Dyer v. Hunt ;jOg 
 
 Dyer V. Walker 654,671 
 
 Dygert v. Schenck.. . 7:57 
 
 Dynes V. Shaffer 133, 130 
 
 Eadman V. Bowman 206 
 
 Bagan V. Fitchburg R. Co 789, 791 
 
 Eakright v. Logansport, etc., R. Co 152 
 
 Eames V. Wheeler 188 
 
 Earnest v. Nicholls 290 
 
 Earp's Appeal 157 
 
 East V. Third Ave. R. Co 740 
 
 East Anglian, etc., R. Co. v. Eastern, 
 etc., R. Co 235, 360, 384 
 
 East Anglian R. Co. V. Lythgoe 303 
 
 I'lrist Boston Ferry Co. v. Boston 675 
 
 Eastern Archipelago Co, v. Regina ... 052 
 
 6.57 
 
 Eastern Co. R. Co. v. Brown 796 
 
 Kastern Co. R. Co. v. Hawkes 363 
 
 Eastern P. R. Co. v.Vaughan.90, 117, 148, 180 
 Kastern Union Ry. Co. v. Cochrane ... 5.57 
 East Hartford v. Hartford Bridge Co.41, 427 
 East London Water W. Co. v. Bailey. . 269 
 
 380 
 
 Eastman v. Cooper 174 
 
 Eastman v. Coos Bank 403 
 
 East Pen n. R. Co. v. Hottenstine 605 
 
 East Tenn R. Co. v. Gammon 311 318 
 
 Eaton V. Boston C. & M. R. Co .' 569 
 
 Eaton V. Erie R. Co.. . 788 
 
 Eaton V. European & Northern R. Co . 7.37 
 
 Eaton & Hamilton R. Co. v. Hunt 5.58 
 
 Ebaugh V. Hendel 82 
 
 Eclectic Life Ins. Co. v. Fahrenkring.. 289 
 
 Edgerly V. Emerson 323,326 
 
 Edgerton V. N. Y. & H. R. Co. 761 
 
 Edinburgh, etc., R. Co. v. Campbell .. .590 
 
 Edmunds V. Bushnell .. 299 
 
 Ediuundson, In re 684 
 
 Edwards v. Grand Junction Canal Co. 369 
 
 Edwards v. Grand Junction R. Co 305 
 
 Edwards V. Hall 184 
 
 Edwards v. Jager 44 
 
 Edwards V. Kilkenny, etc., R. Co 233 
 
 Edwards v. London & N. Western Ry. 
 
 Co 451 
 
 Edwards v. London & S. West. R- Co.. 727 
 
 Edwards V. Midland Ry. Co 453 
 
 Edwards v. Stonington Cem. Ass 571 
 
 Edwards v. Union Bank.. .433, 458, 559, 717 
 
 Edwardsville Bank v. Simpson 487 
 
 Ehle V. Chittenango Bank 157 
 
 Eland V. Eland 173 
 
 Eld V. Gorham 507 
 
 Eldridge v. Long I. R. Co 762 
 
 Eldridge V. Smith 578,635 
 
 Ellicottv. Warford 543 
 
 Elliott V. Merryman 175 
 
 Ellis V. Coleman 302 
 
 Ellis V. E.^sex Merrimack Bd- Co 181 
 
 Ellis V. Marshall 29 
 
 Ellis V. Pulsi;er 297 
 
 Ellis V, Sheffield Gas Co 716 
 
 Ellis V . Turner 435 
 
 Ellison V. Ellison 532 
 
 Ellsworth V. Cole 197 
 
 Elwell V.Dodge 275, 285, 297 
 
 Elwes V. Ogle 303 
 
 Ely V. Fire Ins. Co 487 
 
 ElysvilleMan. Co. v. OkiskoCo... 147, 395 
 
 410 
 
 Emblem v. Myers 474 
 
 Embury v. Connor 569, 579 
 
 Emerson v. Pro v. Manuf . Co 285, 336 
 
 Emery v. Mariaville 355 
 
 EmmetvReed 239 
 
 Empire Assurance Co., In re 545, 548 
 
 Enfield Toll Hr. Co. v. Conn., etc., K. 
 
 Co 58, 215, 357, 552, 649, 654, 659 
 
 English V. Chicot Co 713 
 
 English V. New Haven, etc., R. Co... 65 
 Eng. Joint Stock Bk Co., Ex parte... 439 
 
 Enos V. Hamilton 730 
 
 Eiisey V. Cleveland, etc., R. Co 504 
 
 Episcopal Soc. v. Episcopal church ... 25 
 
 233, 295 
 
 Eppes V. Miss., etc., R, Co 32, 153 
 
 Era Ins. Soc. , In re 548 
 
 Erick V. Johnson 295 
 
 Erie V. Canal Co 41 
 
 Erie, etc., R. Co. v. Brown 120 
 
 Erie, etc. , R. Co. v. Casey.... 45, 649, 654
 
 Table of Cases Cited. 
 
 XXIX 
 
 PAGE. 
 
 Erie, etc., R. Co. v. Owen 132 
 
 Enieley V. Walroud 209 
 
 Ernest V. Nicholls 209, 230, 513 
 
 Ernst V. Bartle 10 
 
 Ernst V. H. R. Co 788 
 
 Essex Bridge Co. v. Tuttle 11.5, 147 
 
 Essex T. Corp. V. Collins 239, 379 
 
 Kstepv. Keokuk Co 287, 3.55 
 
 Eureka Co. V Bailey Co 411 
 
 European C. R. Co., Re 241 
 
 European &N. A. R Co. v. Poor 213 
 
 348, 2.53 
 
 Evansv. Bicknell 278 
 
 Evans v. Haefner 583 
 
 Evansv. Ossrood 313 
 
 Evansv. Philadelphia Club. 83, 85, 87, 89 
 Evansv. Trimountain Trust F. Ins. Co. 544 
 
 Evansv. Wells 248 
 
 Evaiisville Nat. Bk. v. Metropolitan 
 
 Nat. Bk 416 
 
 Evansville, etc., R. Co. v. Baum. 457, 473 
 
 Evansville, etc., R. Co. v. Duncan 760 
 
 Evansville, etc., R. Co. v. Evansville. 505 
 Evansville, etc., R. Co. v. Sheaver ... 124 
 Evartsv. Killingworth Man. Co... 656, 666 
 
 Everett V. Grapes 412 
 
 Everett v. Saltus 642 
 
 Everett v. U.S 339,273 
 
 Everhardt v. West Chester, etc., R. 
 
 Co 118, 144, 172 
 
 Eversfleldv. Mid-Sussex, etc., R. Co.. 590 
 
 Everston V. Nat. Bk. Newport 3.55 
 
 Ewbank V Niitting 724 
 
 Ewing v. Medlock 12 
 
 Exchange Bk. v. Monteath 279 
 
 Exeter Bk. v. Rogers 333, 281 
 
 Eyre V. McDonald 93 
 
 Fairv. Load. & N. W. R. Co 
 
 Fairchilds V. Cal. Stage Co 
 
 Fairfield Turnpike Co. v. Thorp ... 30, 
 
 Fainnount, etc., R. Co. v. Statler 
 
 Falconerv. Campbell 13, 
 
 Fanning V. Gregoire 383, 
 
 Fanners', etc., Bk. v. Butchers', etc., 
 
 Bk 376, 387, 
 
 Farmers', etc., Bk. v. Chester 
 
 Farmers', etc. , Bk. v. Downe 
 
 Farmers', etc., Bk. v. Empire Stone 
 
 D. Co 
 
 Farmers', etc., Bk. v. Gettinger 
 
 Farmers', etc., Bk v. Haight 286, 
 
 Farmers', etc., Bk. v. Harrison 
 
 Farmers', etc., Bk. v. Iglehart — 164, 
 
 Farmers', etc. , Bk. v. Jenks 
 
 Farmers', etc., Bk. v. Sherman 
 
 Farmers', etc., Bk. v. Troy Bk 
 
 Farmers', etc., Bk. v. Wasson... 103, 
 Farmers', etc., Ins. Co. v. Cheshunt . 
 
 Farmers', etc., Ins. Co. v. Harrah 
 
 Farmers' Loan Co. v. Carroll 
 
 Farmers' Iioan Co. v. Clowes 
 
 Farmers' Loan & T. Co. v. Commercial 
 
 Bk 388, 
 
 Farmers' Loan & T. Co. v. Hendrick- 
 
 son 387, 
 
 Farmers' Loan & T. Co. v. St. Joseph, 
 
 etc., K. Co 
 
 Farmers' Turnp. Co. v. McCuUough ... 
 
 Farrar v. Perley 
 
 Farrar v. Stackpole 
 
 Farrington v. Tenn 
 
 Farrow V. Bivlngs.. . 
 
 Faulds V. Yates 98, 
 
 Fay V. Lexington, etc., R. Co 
 
 Fay V. Noble 226, 343, 386, 
 
 Fay V. Parker 470, 
 
 Fazakerly v. Wiltshire 
 
 Feeterv. Heath 300 
 
 Fent V. Toledo, P. & W. R. Co 46a 
 
 Fenn V. Harrison 273,293 
 
 Fero V. Buffalo, etc., R Co 782 
 
 Ferrett V. Taylor 6.52 
 
 Fester v. La Rue 375 
 
 Field V. Cooks 33 
 
 Field V. Crawford 427 
 
 Field V. Field 310 
 
 Field V. Montmollin 161, 183 
 
 Field V. Pierce .. 181 
 
 Field V. Schieffelin 175 
 
 Filer V. N. Y.C. R. Co 469, 755 
 
 Pllson's Trustee V. Himes 308 
 
 Finch V. Same .509 
 
 Finlason V. Chicago, etc., R. Co 791 
 
 Fire Dept. v. Helfenstein 691 
 
 Fire Dept. V. Kipp 29 
 
 Fireman's Ins. Co., Ex parte IIX) 
 
 Fireman's Ins. Co. v. Ely .390 
 
 Fireman's Ins. Co. v. Sturges 358 
 
 First Rapt. Ch. v. Schenec, etc.,R. Co. 608 
 
 717 
 First Baptist Ch., etc., v. Utica R. R., 
 
 etc 4.54. 608 
 
 First Mort. Bondholders v. Maysville 
 
 & T. R. Co 634 
 
 First Nat. Bank Carlisle v. Graham... 4.53 
 
 457 
 
 First Nat. Bank v. Lanier 175, 195, 201 
 
 First Parish V. Sterns 318 
 
 Fish V. Chic, etc., R. Co 516 
 
 Fish V. Potter 388 
 
 Fisher \, Essex Bank .. 96, 189, 197, 201, 429 
 Fisher v. Evansville. etc., R. Co. . . 215, 548 
 
 551 
 
 Fisher v. Horicon Co 573 
 
 Fisher v. Price 197 
 
 Fisher V. Harrisburg 414 
 
 Fisher v. Willard 446 
 
 Fisher v. N. Y.C. R. Co 5-54 
 
 Fishkill V. Joliet Opera House 171 
 
 Fisk v. Chic, etc., R. R. Co 48.5, 525 
 
 Fisk V. Kenosha 713 
 
 Fiske V. Eldridge 285 
 
 Fishmongers' Co. v. Robinson 395 
 
 Fister v. La Rue 379 
 
 Fitch v. McDiarmid 673 
 
 Fitch v. Pacific R. Co 783,784 
 
 Fitchburg, etc., R. Co. v. Grand Junc- 
 tion, etc., R. Co ..62,651 
 
 Fitchburg R. Co. V. Prescott . . 691 
 
 Fitzherbert v. Mather 278 
 
 Fitzsimmons V. JosIi[i 295 
 
 Flanagan v. Great W. R. Co 341 
 
 Fleckner v. W. S. Bank . . .216, 233, 239,, 273 
 277, 387, 337, 371, 394, 396, 403, 410, 418 
 
 Fleming, Ex parte 678 
 
 Fleming V. Chic, etc., R. Co 605 
 
 Fletcher v. Dysart 294 
 
 Fletcher V. Peck 649 
 
 Flint V. Clinton Co 388, 411 
 
 Flint V. Pierce 415, 437 
 
 Flint V. Trans. Co 762, 764 
 
 Flint V. WoodhuU 43 
 
 Flint, etc.. R. Co. v.Dervey.... 351, 354, 511 
 
 Flint, etc, R. Co. v. WoodhuU 651 
 
 Florida V. Gibbs 677 
 
 Flower V. London, etc., R. Co 590 
 
 Flynn v. San Francisco, etc, R. Co. 783, 784 
 
 Fogg V. Griffin 443 
 
 Folger V. Mitchell 293 
 
 Foote's Case 156 
 
 Foote V. Cincinnati 716 
 
 Force v. Dahlonega Tanning, etc. , Co. 113 
 
 Ford V. Williams 284 
 
 Forsyth v. Boston, etc., R. Co 758 
 
 Forsyth v. Hooper 736 
 
 Forrestier v. Bordman 373, 293
 
 XXX 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 Fort Edward, etc., Co. v. Payne. ...127, 130 
 
 Fort Wayne v. Jackson 2fi 
 
 Fort Wayne Turnp. Co. V. Deane 504 
 
 Fosdick V. Sturges 35, 183 
 
 Foss V. Harbottle 139 
 
 Foster V. Bates 307 
 
 Foster V. Cackerell 92 
 
 Foster V. Essex Bank 373, 375, 434 
 
 Foster V. Shaw 406,410 
 
 Fountaine v. Carmarthen R. Co 2;}0 
 
 Four Mile Valley R. Co. v. Bailey 133 
 
 Fowle V. Common Council, etc 434 
 
 Fowler, In re 569 
 
 Fowler v. Bledsoe 371 
 
 Fowler v. Ludwig 113 
 
 Fowler V. Robinson 113 
 
 Fowler V. Scully 390 
 
 Fox V. AllensvilleCo 119 
 
 Fox V. Northern Liberties 339 
 
 Foy V. London, etc., R. Co , 753 
 
 Frankfort Bank v Johnson 434 
 
 Fraiikford, eta, Turu. Co. v. Phila., 
 
 etc., R.Co 783 
 
 Franklin V. Ezell 294 
 
 Franklin v. S. E. Ry. Co 479 
 
 J'ranklin Bank v. Cooper 664 
 
 Franklin Bridge Co. v. Wood 13 
 
 Franklin Co. v. Lewiston Institute for 
 
 Saving 368 
 
 Franklin Glass Co. V.Alexander 143 
 
 Franklin Ins. Co. V. Jenkins 303 
 
 Franklin Ins. Co. v. Murray 389 
 
 Franklin Tel. Co., In re 613, 637 
 
 Eraser v. Charleston 91, 194 
 
 Fraylor V. Sonora Mining Co 303 
 
 Frazier v.N. O. Gas, etc 346 
 
 Frazier V. Wilcox 487 
 
 Frederick Female Sem. v. State 657 
 
 Freehold Gen. Ins. Co. v. Metrop. R. 
 
 Co 781 
 
 Freeholders V Barber 417 
 
 Freeman V. Harwood 93 
 
 Freeman v. Machias Water Power Co. 338 
 
 346 
 
 Freeman v. Winchester 146 
 
 Free School v. Flint 413, 431, 423 
 
 Fremont V. Stone 248, 546 
 
 French V. Braintree 572 
 
 French v. Gifford 514 
 
 French V. Teschemaker 109, 113 
 
 Friedlander V. Slaughter House Co 193 
 
 Frink V. Coe... 474 
 
 Frink V. Potter 750, 763 
 
 Frink V. Schroyer 469 
 
 Frisby v. Ballance .537 
 
 Frost V. Frostburg Coal Co 34 
 
 Frost V. Grand Trunk R, Co 758 
 
 Frowd case 448 
 
 Frye V. Bk. Ill 504 
 
 Frye V. Tucker 383 
 
 Fullam V. Cummings 93 
 
 Fuller v.Bowe 107, 108 
 
 Fuller V. Dame 248,351 
 
 Fuller V. Hooper 297 
 
 Fuller V. Plainfleld Academic School. . 3.56 
 
 Fuller V. Rowe 256 
 
 Fulton Bk. V. N. Y. Canal Co 345 
 
 Gage V. New Market R. Co 359, 434 
 
 Galena V. Comm 3.35 
 
 Galena, etc. , R. Co. v. Dill 786 
 
 Galena, etc. , R. Co. V. Loomis 46 
 
 Gallatin v. Bradford 416 
 
 GalliopolisBk. V.Trimble 654, 671 
 
 Gallowayv. Mayor 591 
 
 Galveston R. Co. v. Cowdry.. 330, 349, 388 
 
 533, 631, 639 
 
 Galwav V. U. S. Steam Sugar Ref . Co.. 543 
 
 Gandy V.Chicago, etc, K. Co 783, 783 
 
 PAGE. 
 
 Gansevoort V. Williams. 377 
 
 Gardinerv. Pollard 204 
 
 Gardner V. Hamilton Ins. Co .553 
 
 Gardner v. Hope Ins. Co 143 
 
 Gardner V, Newljurgh .565 
 
 Gardner V. State 095 
 
 Garland v. Reynolds 483 
 
 Garlingv. Baechtel 133 
 
 Garnierv. St. Louis 260, 303 
 
 Garrettv. Dillsburgh, etc. R. Co 139 
 
 Garretzen V. Duenkel 734, 733 
 
 Garrison v. Coombs 410 
 
 Garton v. Great Western R. Co 693 
 
 Garvey V. Colcock 395, 403 
 
 G arris V. Portsmouth, etc., K. Co 793 
 
 G as Co. V. San Francisco 374, 425 
 
 Gas. & Bk. Co. v. Haynes 542 
 
 Gasset v. And over 395 
 
 Gassies v. Ballou 500 
 
 Gavett V. Manchester, etc., B. Co . ... 756 
 
 Gayle v. Cahawba, etc., R. Co 115, 147 
 
 Gaylord v. Fort Wayne, etc., R. Co.... 625 
 
 Gaynor v. Old Colony R. Co 761 
 
 Geery V. Hopkins 509 
 
 Gelpcke v. Dubuque 351, 353, 653, 670 
 
 General v. Uiica Ins. Co . 618 
 
 General Exchange Bk., In re 197 
 
 Genesee Bk. v. Patchin Bk 383, 387 
 
 Georgia R. Co. V. McCurdy 756 
 
 Gerbler V. Emery 272 
 
 Germantown R. Co. v. Fitler 151 
 
 German Security Bk. V. Jefferson.. . 197 
 
 Getchell v. Allen 645 
 
 Getty V. Devlin .. 251 
 
 Geyer V. Western Ins. Co 188, 193 
 
 Ghent V. Adams 286 
 
 Gibson v. Colt 272 
 
 Gibson V. Mason 571 
 
 Giesey v. Cin., Wilm. & Z. Ry. Co.. 577, 589 
 Gifford v. N. J. R. Co. . . 46, 203, 311, 318, 514 
 
 Gifford V. Thompson 154,156, 161 
 
 Gilbert's case . . 143 
 
 Gilbert v. Manchester Iron Co., 81, 90, 96, 187 
 
 Gilbert Elevator R. R. Co 61 
 
 Gilesv.Hutt 146 
 
 Gill V. Continental Gas Co 93 
 
 Gillard v. Lancashire, etc., R. Co 479 
 
 Gillen water v. Madison R. Co 451, 592 
 
 Gillespie v. Wood 678 
 
 Gillet V.Moody 543, 664 
 
 Gillett V. Missouri, etc., R. Co 458 
 
 Gillettv. West. R.Co 790 
 
 Gills V. Bailey 231 
 
 Gilman v. Bassett 673 
 
 Gilmerv. Lime Paint 569, 571 
 
 Gilmore V. Pope 270, 408 
 
 Gilpin V. Howell 189, 533 
 
 Girard V.Philadelphia 25,41, 668 
 
 Girard Bk. v. Bank, etc 444 
 
 Glaize V. S. C. R. R. Co 26 
 
 Glasgow V. Drew 436 
 
 Glasscock V. Comrs., etc 675 
 
 Glass Co. V. Alexander 147 
 
 Glassey V. R. Co 793 
 
 Gleanes V. TurnpiKeCo 117, 305 
 
 Gloucester Bk. V. Salem Bk 447 
 
 Glover V. N. W. 1{. Co 323 
 
 Glynv.Baker ... 352 
 
 Godbold V.Mobile Bk.... 104. 241, 243, 245 
 
 308 
 
 Goddard's case 393 
 
 Goddardv. Grand R. R. Co.. 468, 472, 473 
 475, 720, 737, 731, 762, 767, 773 
 
 Goddard V . Pratt 29 
 
 Goddard V. Sraithett 614, 618 
 
 Goff V. Gt. North. R. Co.. 451, 456, 719, 724 
 
 732, 795 
 Gonzales v. N. Y. & H. R. Co. 741, 751, 788 
 Gooday v. Colchester, etc., B. Co. 833, 305
 
 Table of Cases Cited. 
 
 XXXI 
 
 PAGE. 
 
 Goodel V. Baker , 317 
 
 Goodenow v. Tyler. . . 273 
 
 Goodin v. Evans 30, 33 
 
 Goodiii V. Whitewater Canal Co 248 
 
 Goodman V. Kennell 795 
 
 Goodiiow V. Coinrs 343 
 
 Goodrich V. Detroit — 335 
 
 Goodrich V. Reynolds 34, 133 
 
 Goodson V. Broolie 272 
 
 Goodspeed v. East Haddam Bk... 434, 452 
 
 716 
 
 Goodwin v. Hardy 154, 156 
 
 Goodwin V. N. Y.. etc., R. Co 203 
 
 Goodwin v. Union Screw Co 410 
 
 Gordon v. Appeal Tax Court 698 
 
 Gordon V. Baltimore 697 
 
 Gordon v. Bulkley 337 
 
 495 
 776 
 407 
 631 
 762 
 
 Gordon v. Longest . 
 
 Gordon v. Manchester, etc., R. Co. 
 
 Gordon V. Preston .. 217, 237, 296, I 
 
 Gordon v. R. Co 
 
 Gorgier V. Mierville 352 
 
 Gorman V. Pacific R. Co 46 
 
 Gorton v. Erie R. Co 788 
 
 Goshen Turn. Co. v. Hurtin99, 115, 128, 145 
 
 Goshen Turn. Co. V Sears 31 
 
 Goshoen V. Supervisors 560 
 
 Goslin V. Agricultural Hall Co 735 
 
 Goss V Coblens 795 
 
 Goswill V. Dankley 291 
 
 Goszler v. Georgetown 356, 420 
 
 Gott v. Adams Express Co 36 
 
 Gould V. Oneonta 379, 375 
 
 Gould v. Thompson 500 
 
 Gould V. Womack 537 
 
 Goulding v. Clark 313 
 
 Governor V. Gridley 4 
 
 Governor V. McEwen 41 
 
 Gowen v. Penobscot R. Co 46 
 
 Gracie v. White 336 
 
 Grady, E.t parte 358 
 
 Graff v. Pittsburgh R. Co .... 130, 136, 144 
 
 172 
 
 Grafton Bk . v. Doe 623 
 
 Graham V. Connersville R. Co 606 
 
 Graham V. Van Diemen'sLand Co 313 
 
 Grammar School V. Burt 44 
 
 Granger v. Bassett 156, 1.59 
 
 Grand Gulf Bank V.Archer 6.54 
 
 Grant V. Courter 713 
 
 Grant v. Mechanics' Bk 96, 429 
 
 Gratz V. Redel 146,148,341, 255 
 
 Gray V. Bridge 675 
 
 Grayv.Coffin 114 
 
 Gray v. Monongahela Nav. Co 141 
 
 Gray v. Murray 291 
 
 Gray V. N. Y. & V. S. Co 248 
 
 Gray V. Portland Bk 203,270,408, 484 
 
 Grays v. Turnpike Co 146, 148, 504 
 
 Great Falls Man. Co. v. Fernald — 572, .574 
 Great Luxembourg Ry. Co. v. Magnay, 253 
 Great North England Ry. Co. v. Bid- 
 
 dulph lOo 
 
 Great Northern Ry. Co. v. Kennedy 146 
 
 Great W. R. Co. v. Fawcett ... 741 
 
 Great W. R. Co . v. Rushout 521 
 
 Greeley v. Smith 667 
 
 Greely V. Bartlett 272 
 
 Green v. African Methodist Sec 85 
 
 Green V. Bidde 649 
 
 Green v. Craig 474 
 
 Green V. Durham 312 
 
 Green v. Hudson Ry. R. Co 480 
 
 Greeny. London Genl. Omnibus Co — 433 
 451, 454, 716, 719, 731 
 
 Green v. Seymour 39, 373 
 
 Greenland v. Chaplin 462 
 
 Greanleaf v. Ludington 163 
 
 PAGE. 
 
 Green Mt. Tump. Co. v. Bulla 193 
 
 Greenup V. Barbee 113 
 
 Greenville, etc., R. Co. V. Partlow 606 
 
 Greenville, etc., R. Co. v. Smith 147 
 
 Greenville, etc., R. Co. v. Woodsides . . 118 
 Greenwich v. Easton, etc., R. K.Co — 68 
 
 Greenwood's case 209 
 
 Greenwood v. Lake Shore R. Co 187 
 
 Gresham Life Assurance Co., In re 191 
 
 Grew V. Breed 664 
 
 Grogan v. San Francisco 41 
 
 Grose V. Hilt 113 
 
 Gridley V. Lafayette, etc., R. Co. 257 
 
 Griffin v. Kentucky Co 62 
 
 Griffin v. St. Louis Vine, etc., Assoc... 89 
 
 Griffith V. Com'rs, etc 712 
 
 Griffith V. Frederick County Bk 526 
 
 Griggs V. Foote 286 
 
 Grim V. Wissenberg 561 
 
 Grippen V. N. Y. C. R. Co 787 
 
 Grisewood case 441 
 
 Grissell V. Bristowe 156 
 
 Griswold's case 449 
 
 Griswold v. Haven 444 
 
 Griswold V. Peoria Univ 180 
 
 Grizebood v. Blane 197 
 
 Grymes V. Hone 97, 163 
 
 Guaya Iron Co. v. Dawson 487 
 
 Gue V. Canal Co 528, 531 
 
 Guerreiro V. Peile 278 
 
 Guest V. Poole 359 
 
 Gunton V. Ingle 636 
 
 Gutzweller v. People 41 
 
 Guyer V. Western Ins. Co 197 
 
 Haack v. Fearing 795 
 
 Habersham v. Canal Co 680, 688 
 
 Habnerv. New Orleans, etc.,R. Co — 760 
 
 Hackfordv. N Y. O. R. Co 789 
 
 Haden v. Middlesex T. Corp 239 
 
 Haddesfleld Can. Co. v. Buckley 173 
 
 Haddon V. Ayers 296 
 
 Hadley V. Freedman's Sav. Bank 348 
 
 Hagan v. Providence R. Co 471, 473 
 
 Hagerstown Turnpike v. Cruger... 20, 35 
 
 Hague V. Dandeson 198. 4.30 
 
 Hague v. Philadelphia 386, 380 
 
 Hahicht V. Pemberton 12 
 
 liahn V. Purdell 68 
 
 Hahnemannian L. Ins. Co. v. Beebe... 503 
 
 Haightv. Aqueduct 566 
 
 Haight V. Day 331 
 
 Haightv. N. Y. C. R. Co 788 
 
 Hain v. N. Y. G. Co 119 
 
 Halcomb V. 111., etc.. Canal Co 485 
 
 Haldeman v. Penn. R. Co 668 
 
 Hale V. Bridge Co 213, 344, 246 
 
 Halev. Houghton 335 
 
 Halev. Mut. F. Ins. Co 375, 433 
 
 Halford v. Cameron, etc., R. Co 385 
 
 Hall v. Boyd 561 
 
 Hallv. Carey 333 
 
 Hall V. Grossman 679 
 
 Hallv. Selma., etc., R. R. Co 116 
 
 Hall v. Sullivan, etc., R. Co ...215,387, 635 
 
 Hall V. Supervisors 678 
 
 Hallv. U S. Ins. Co 115, 171, 173 
 
 Hall V. Vt. & Mass. B. Co 358, 306 
 
 Hallett V. Dowdall 296 
 
 Hallowell Bk. v. Hamlin 273, 275 
 
 Hallows V. Fernie 133, 341 
 
 Halstead v. Mayor, etc 355 
 
 Ham V. Boody 393 
 
 Hamdenv. N. H. R. Co 781 
 
 Hamilton v. Annapolis, etc., B. Co ■ 566 
 
 654, 671 
 
 Hamilton v . Hobart 553 
 
 Hamilton V. Keith 43, 63 
 
 Hamilton V. Lycoming Ins. Co... 395, 403
 
 xxxu 
 
 Table of Cases Cited. 
 
 Hamilton v. Newcastle R. Co 380, 395 
 
 Hamilton V. Pittsburn *i81 
 
 Hamilton v. K. R. Co ;i37 
 
 Hamilton v. St. Louis County Court . 691 
 Hamilton V. Third Ave. Co... 457, 474. 724 
 Hamilton, etc., R. Co. V. Rice .... 131, 180 
 
 Hammattv Wyman 531 
 
 Hammond v. Shepard 26 
 
 Ilanison v. Weare 113 
 
 Hampton v. Coffin 601 
 
 Hampton V. Spe(^kenagle 300 
 
 Hampshire V. Franklin 293, 659 
 
 Hamtramck v. Bk. Edwardsville .. 504, 653 
 
 Hance V Cayuga, etc., R. Co 793 
 
 Handrahan v. Cheshire, etc 114 
 
 Hanford V. M'Nair ... 337 
 
 Haunav. Cincinnati, etc., R. Co. 141, .553 
 
 558 
 Hanna v. International Petroleum Co. 13 
 
 34 
 
 Hanover R. Co. V. Coy le 469, 786, 788 
 
 Hanson V. Donkersley 108 
 
 Hanson v. R. R. Co 473 
 
 Hanson V. Vernon 41, 577, 713 
 
 Hardcastle V. Md., etc., R. Co 675 
 
 Hardeman V. Ford 294 
 
 Hardenbergh v. Bacon 100 
 
 Harding V. Goodlett .- 573 
 
 Harding v. Tovpnshend 480 
 
 Hardy v. Merriweather . . 133, 383, 386, 505 
 
 Hardyv. Waltham 698 
 
 Harford V. M'Nair 293 
 
 Harger V. McCuUough 113 
 
 Hargreaves v. Parsons 185 
 
 Harlem Canal Co. v. Selxas 119, 147 
 
 Harness V. Chesapeake, etc., R. Co... 566 
 
 Harper v. Charlesworth 401 
 
 Harrington V. Berkshire . — 601, 603 
 
 Harris v. Intendant 67 
 
 Harris V. Thompson 561, 779 
 
 Harris V. Roof s Ex'rs 307 
 
 Harrison v. Goodman 417 
 
 Harrison V. Lexington R. Co 654 
 
 Harrison v. Martinsville, etc., R. Co. . . 505 
 
 Harrison v. Muskingum Man. Co ... 504 
 
 Harrison v. Timmons 23 
 
 Harrison v. Vines 183 
 
 Hartv. Albany 417 
 
 Hartv. West. R. Co 463 
 
 Hartford Bk. v. Barry 273, 275, 487 
 
 Hartford Bk. v. Hart 484 
 
 Hartford, etc., R. Co. v. Boorman. ... 144 
 
 171, 539 
 
 Hartford, etc., R. Co. v. Crosswell 143 
 
 Hartford, etc . , R . Co. v. Kennedy 115 
 
 147, 539 
 
 Hartshorn V. Day 446 
 
 Hartt V. Harvey 535 
 
 Hartwell v. Armstrong 566, 571 
 
 Harvard College v. Aldermen 690 
 
 Harvey v. Thomas 571 
 
 Haslett V. Wotherspoon 115 
 
 Hastings v. Amherst & Belchertown 
 
 R. Co 612 
 
 Hatch v. Barr 411 
 
 Hatch v. Chic, etc., R. Co 495, 497 
 
 Hatch V. City Bk 686 
 
 Hatch V. Vermont Cent. R. Co 607 
 
 Hatcher V. Toledo, etc., R. Co ... 215, 528 
 
 Hann V. Mulberry, etc.. R. Co 119, 150 
 
 Haven V. Adams 411 
 
 Haven V. Emery 388, 631 
 
 Haven v. Grand Junction R. Co. .. 3.51, 400 
 Haven V. New Hampshire Asylum, 308, 410 
 
 Havens v. Erie R. Co 789 
 
 Haverhill Mut. F. Ins. Co. v. Newhall. 285 
 Hawkins v. Dutchess, etc., Steamboat 
 
 Co 717 
 
 Hawkins V. Malthy 156 
 
 PAGE. 
 
 Hawkins V. Rochester 601 
 
 Hawthorne v. Calef 44 
 
 Hay V. Cohoes Co 458, 572, 785 
 
 Haxtun V. Bishop 388 
 
 Hayden v. Middlesex Turnp. Corp., 403, 484 
 
 Hayden V. Noyes 413, 410 
 
 Hayes V. Ottanay, etc., R. Co 215 
 
 Haygood v. Justices, etc 678 
 
 Havne v. Beaucharap 130 
 
 Ilaynes v. Covington 66, 371, 483 
 
 Haynes V. Municipality . 41 
 
 Haysv. Pittsburgh R. Co 142, 144, 173 
 
 Haysv.Stone 234 
 
 Hay ward v. Davidson 374 
 
 Hay ward v. Pilgrim Soc 239, 255, 279 
 
 Haywood, etc., Plankroad Co. v. Bryan, 
 
 116, 122 
 
 Hazard v. Day 446 
 
 Hazelhurst v. Savannah, etc., R. Co... 179 
 
 279, 375, 377 
 
 Hazen v. Boston, etc., R. Co.. 458, 584, 589 
 
 Hazen V. Essex Co 571,573, 577 
 
 Heacock v. Sherman 112 
 
 Head v. Providence Ins. Co.... 66, 338, 350 
 
 384 
 
 Heard v. Eldredge 161 
 
 Heard V. Talbot 653 
 
 Heart v. State Bk 103, 189, 197, 201 
 
 Heastonv. Cincinnati, etc., R. Co. 180, .504 
 
 Heath V. Erie R. Co 248,513 
 
 Heath V. Sijverthorn Co 32 
 
 Heathcote v. N. Staffordshire, etc., 
 
 Ry. Co 527 
 
 Heaton v. Cincinnati, etc., R. Co 483 
 
 Hebron Church v. Smith 36 
 
 Heffernan v. Benkard 737 
 
 liegeman v. Johnson 300 
 
 Hegeman v. Western R. Co 741 
 
 Heil v. Glanding . . 474 
 
 Heisembittle v. Charleston 414 
 
 Helland v. Lowell 433 
 
 Helm v. Swiggett 100 
 
 Hendee v. Pinkerton.215, 387, 392, 400, 404 
 Henderson v. Australian Royal Mail, 
 
 etc., Co 395 
 
 Henderson v. Hays 527 
 
 Henderson v. Marzetti 395 
 
 Henderson v. R. R. Co 134,441, 443 
 
 Henderson v. Sacon 241 
 
 Hendrickson V. Kingsbury 471 
 
 Henriquez v. Dutch West India Co.341, 485 
 
 506 
 
 Henry V. Dubuque, etc., R. Co 578, 605 
 
 Henry V. G. Northern R. Co 179 
 
 Henry V. Rutland, etc., R. Co 259, 303 
 
 Henry v. Vanderwood 561 
 
 Henry V. V. & A. R. Co 541 
 
 Henry V. Vt. Cent. R. Co 783 
 
 Henshaw v. Bellows Falls Bk 633 
 
 Herals V. G. Western R. Co. 179 
 
 Herkimer, etc., Co. v. Small 146 
 
 Hern v. Nichols 435 
 
 Herod V. Rodman ..255 
 
 Herronv. Vance » 664 
 
 Hersey v . Veazie 303, 513, 523 
 
 Herzo v. San Francisco 417 
 
 Heskith V. Braddock 417 
 
 Hester V. Hooker 526 
 
 Hester V. Memphis R. Co 134 
 
 Hewettv. Swift 716, 720, 731, 793 
 
 Hewitt V. Price 197 
 
 Heyman v. European R. Co. ...133, 441, 447 
 
 Hey ward V. Mayor 561, 668 
 
 Hi board v. Lambe 523 
 
 Hibbard v. R. Co 763 
 
 Hibernia Turnp. Co. v. Henderson. 98, 115 
 
 117 
 
 Hichens v. Congreve 523 
 
 Hickey V. Boston, .etc., R. Co 761
 
 Tablk of Cases Cited. 
 
 XXXIU 
 
 PAGE. 
 
 Hicksv.Hlde 286 
 
 Hitrgrins v. N. Y. & H. R. Co 7(11 
 
 llifjgins V. Senior .. 28:J 
 
 HiggiDS V. Watervliet Turnp. Co .. 720, 72" 
 
 7oO, VXi 
 
 Higg'scase 5li' 
 
 Highland Turnp. Co. V. McKean.... 13, '.t8 
 
 115, 148 
 
 Higlitowerv. Thornton 148. 6Gi, OTO 
 
 Hildretli v. Lowell ..571 
 
 Hilt V. Beach .... 3.") 
 
 Hillv. Frazier 212 
 
 Hill V. Lacrosse, etc., R. Co 530, 637 
 
 Hill V. Manchester Water- Works Co. .. 33S 
 
 Hill V. Newichawanick 154, 1G3 
 
 Hillv. N. J. R.Co 203 
 
 Hill V. N. O., etc., R. Co 473 
 
 Hill V. Pine River 13k 100, 199 
 
 Hillv. Rockingham Bk 203 
 
 Hill V. Simpson 175 
 
 Hill V. Western Vt. R. Co . . . 578, 584, 590 
 Hilles V. Parrish. 154, 247, 329, 331, 3-50, 524 
 
 Hilliardv. Goold 238, 296, 763 
 
 Hilliard V. Richardson 732 
 
 Hills V. Bannister 283 
 
 Hindustan Bk., etc., In re 545 
 
 Hoaglandv. Bell . 114,181 
 
 Hobbitt V. London , etc., Ry. Co 734 
 
 Hobbs V. Manhattan Ins. Co 495 
 
 Hoblyn V. Rex 312 
 
 Hodges V.Buffalo 287, 3.55 
 
 Hodges V. New Eng. Screw Co ... 241 , 247 
 303, 523, 547 
 
 Hodges V. Rutland R. Co 259, 303 
 
 Hodgkinson V. Kelly 156 
 
 Hodsdon v. Copeland 650, 653, 659 
 
 Hotfraan Steam Coal Co. v. Cumberland 
 
 Coal Co 248 
 
 Holbrook v. Basset 387 
 
 Holbrook V. Fauquier, etc., Turnp. Co. 181 
 
 Holbrook V. N.J. Zinc Co 183, 190 
 
 Holcomb V. 111., etc., Canal Co 487 
 
 Holder V. Lafayette R. Co 257, 259 
 
 Holladay v. Elliott 119 
 
 Holliday V. People 41 
 
 Holly Spring Bk. v. Pinson 91, 103 
 
 Holmes, Ex parte 99, 320 
 
 Holmes v. Gilliland 482 
 
 Holmes v. Holmes Man. Co — ... 25 
 
 Holmes V. Wakefield. ... 718, 720, 763, 795 
 
 Holt V.Blake 113 
 
 Holyoke v. Grand Trunk R. Co. ...468, 474 
 
 Holyoke v. Ry. Co 469 
 
 Holyoke Bk. v. Burnh.am 114 
 
 Holyoke Bk v. Man. Co 508 
 
 Holyoke, etc., Co. v. Lyman ...43, 65, 651 
 
 Home of Friendlessv. Rouse 69-i 
 
 Home Ins. Co. v. Davis 347 
 
 Home Ins. Co. v. Morse 348 
 
 Home L. Ins. Co. v Pierce 289 
 
 HomersLara v. Wolverhampton, etc., 
 
 Co 404 
 
 Honegsberger V. R Co 793 
 
 Hood v. N. Y., etc., R. Co 339 
 
 Hooker V. Eagle Bk 380 
 
 Hooker v. N. II. & Northampton Co... 597 
 
 Hooksettv. AmoskeagMan. Co 785 
 
 Hoole v. Great W. R. Co 516 
 
 Hooper V. Winston .543 
 
 Hope, etc., Ins. Co. v. Beekman. ..30, 32 
 
 Hope, etc., Ins. Co. v. Koeller 3'2 
 
 Hopkins v. A. & St. R. Co 474 
 
 Hopkins v. Exter 82 
 
 Hopkins v. Gallatin Turup. Co.... 388, 407 
 
 411 
 
 Hopkins v. Mayor 423 
 
 Hopkins V. Mehaffey 271, 284, 300 
 
 Hopkins V. Whitesidea 71, 669 
 
 Hoppin V. Buffum 96,98,100,319 
 
 E 
 
 PAGE. 
 
 Horn V. Atlantic, etc., R. Co ... 793 
 
 Horn V. Baltimore Co 303 
 
 Horn V. Ivy 267 
 
 Horner v. Lawrence 730 
 
 Ilornstein V. Atlantic, etc., R. Co 605 
 
 Horton V. Baptist Church 311, 318 
 
 Hotchin v. Kent 238 
 
 Hotel C.>. V Dickinson 147 
 
 Hough V. Cook County Fund Co 371 
 
 Houston, etc., R. Co. v. Commrs 085 
 
 Houston, etc., R. Co. v. Smith 791 
 
 Hovey v. Magill 285 
 
 How V. Canal Co 795 
 
 Howbeach Coal Co. v. Teague 143 
 
 Howard v. Baillie 271 
 
 Howard V. Moore 527 
 
 Howard v. Savannah 414 
 
 Howev. Duel 219,243,245, 535 
 
 Howe V. Freeman 388, 631, 633 
 
 Howe V. Keeler 407 
 
 Howe V. Newm arch 720,724, 795 
 
 Howe v. Starkweather. .. 187, 531, 534, 037 
 
 Howe Machine Co. v. Snow 504 
 
 Howell V. Chic. & N. W. R. Co... 156, 1.59 
 
 524 
 Hoyle V. Plattsburgh, etc , R. Co. 248, 530 
 
 ii.i$, 640 
 
 Hoyt V. Bridgewater, etc . , Co 239 
 
 Hoyt V.Sheldon 420, 657 
 
 Hovt V. Thompson 217,239,316, 420 
 
 Hubbard v. Chappel 505 
 
 Hubbard V. Winsor 317 
 
 Hubersty v. Manchester, etc., Ry. Co.. 198 
 Hudersfleld Canal Co. V. Buckley.. 171 
 
 Hudson v. Carman 30, 113 
 
 Hudson V. Layton 526 
 
 Hudson Co. V State 316 
 
 Hudspeth V. Wilson. 93 
 
 Hughes V. Antietam Manuf. Co — 171, 443 
 
 Hughes V. Bank of Somerset 504 
 
 Hull & London L. Assur. Co., Ex parte, 439 
 
 HiiUman y,. Honcomp 615, 619 
 
 Humbard V Hurabard 526 
 
 Humble V. Mitchell ; 185 
 
 Humes V. Knoxville 458 
 
 Humphrey V. Pegues 704 
 
 Humphreys V. Havens 294 
 
 Hungerford Nat. Bk. v. Van Nostrand, 36 
 
 Hunt V. Bullock 529, 638, 641 
 
 Hunt V. Hoyt 409 
 
 Hunt V. Kansas, etc.. Bridge Co — 32 
 
 Hunt V. R. Co 7.33, 736 
 
 Huntv. Wolfe 543 
 
 Hunter V. Glasgow, etc.. Canal Co — 731 
 
 Huifhins v. Byrnes 411 
 
 Huti^hins v. New England, etc , Co... 114 
 
 Hutchins V. State Bk 175, 187, 189 
 
 Hutton V. R. Co 179,780 
 
 Huvett V. Phila., etc., R. Co 783 
 
 Hyatt V. Allen 155 
 
 Hyatt V. ISIcMahon 63 
 
 Hyatt V. Whipple 649 
 
 Hyde V. Franklin 355 
 
 Hyde v. Lynde 542 
 
 Hynes V. Jungren 730 
 
 Ihl V. Forty-second St. R. Co. 
 
 lllidge V. Goodwin 
 
 Illinois Bk. v. People 
 
 III " ~ 
 
 111 
 
 HI 
 
 111 
 
 etc., R. Co. v. Able . 
 
 etc., R. Co. V. Adams 
 
 etc-,R. Co. V. Baches 
 
 etc., R. Co. v. Barron 
 
 111., etc., R. Co. V. Beers 
 
 111. , etc. , C. Co. V. Chic. & R. I. R. Co. 
 
 III., etc., R. Co. V. Cook 34, 524, 
 
 111., etc., R. Co. V. County 
 
 III., etc. ,R. Co. V. Hutchinson 
 
 111., etc ,R. Co. V. McClelland 
 
 793 
 463 
 698 
 755 
 793 
 788 
 469 
 140 
 563 
 551 
 699 
 793 
 783
 
 XXXIV 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 Til., etc., R. Co. V. Nunn T83, 784 
 
 111., etc., R. C.) V. Reedy «» 
 
 III., etc., I{. Co. V. Station 700 
 
 111., etc., R. Co. V. Weldon 480 
 
 Imperial Arso. V Coleman 511 
 
 Imperial IJk., etc., v. Hindustan Bk.. 546 
 
 Imperial Gas L. Co. v. IJroadbent 780 
 
 Imperial Gas Co, V. Clarke COl 
 
 Importins, etc., of Ga. v. Locke. 613, 037 
 Indianapolis, etc., R. Co. v. Farrell... 755 
 Indianapolis, etc., R. Co. v. Jones ... 55() 
 
 55K 
 Indianapolis, etc., K. Co. v. Para- 
 more 783 
 
 Indianapolis, etc., R. Co. v. Petty 793 
 Indianapolis, etc , R. Co. v. State. 680, 688 
 
 Inge V. BirmiriKham, etc., R. Co 536 
 
 Iiifilis V. Great N. Ry. Co 146 
 
 Ingrahara v . Terry . 653, (167 
 
 Inhabitants V. Weir 355 
 
 Inhoff V. Chicago, etc., R. Co 760 
 
 Inland Fishery Comm'rs v. Holyoke 
 
 W. P. Co 43 
 
 Instone v. Bridge Co 148 
 
 Insurance Co , In re 325 
 
 Ins. Co. V, Coram 488,600 
 
 Ins. Co. V. C. D., Jr 500 
 
 Ins. Co. V. Mayor 680 
 
 Ins. Co. V. Sanders , 316 
 
 Ins. Co. V. Tweed 463 
 
 International L. & A. Soc, In re . . .. 531 
 International L. Ins. Co. v. Commrs. 
 
 of Taxes 696 
 
 Intendent V. Chandler 67 
 
 Iowa V. Wapello 713 
 
 Ireland v. Palestine T. Co 143 
 
 Ireland Bk. v. Evans 407 
 
 Iron Bk. V. Pittsburgh 695 
 
 Iron City Bk. V. Plattsburg 698 
 
 Iron Mountain Bk. v. Mercantile Bk. .. 453 
 Iron R. R. Co. v. Lawrence Furnace Co. 47 
 
 Irrigation Co. of France, Re 313 
 
 Irvine v. McKeon 113 
 
 Irving Bk. v. Wetherald 444 
 
 Isaacs V. Third Ave. R. Co 729 
 
 Isabel! V. St. Joseph, etc., R. Co 791 
 
 Isham V. Bennington Iron Co. 189, 484, 634 
 
 Isham V. Buckingham 189 
 
 Isreal V. Jewett 605 
 
 Jackson v. Brown 387 
 
 Jackson V Carnpbell 407 
 
 Jackson V. Cliicago, etc , R. Co. 783 
 
 Jackson V. Cocker ...180 
 
 Jaclison V. Hampden 313 
 
 Jackson V. Ludeling 244, 246, 248 
 
 Jackson v. Marine Ins. Co., Matter of. 6.53 
 
 657 
 Ji-ckson V. Newark, etc., Plank R. Co. 1.54 
 
 159 
 
 Jacksonv. Pratt 406, 410 
 
 Jackson V. R. & R. Co. .588, 793 
 
 Jackson v. Sec. Ave. R. Co . 457, 730, 737 
 
 731 
 
 Jacksonv. Turquand 133 
 
 Jacob V. Louisville 005 
 
 Jaraesv. Cincinnati, etc., R. Co 183 
 
 James V. Eve 546 
 
 James v. Gt. West. R. Co 789 
 
 .lames V. Pontiac P. R. Co... 531 
 
 James V. R. R. Co , 530 
 
 James V. Woodruff 669 
 
 James Riv., etc., Co. v. Thompson 566 
 
 Jameson V. People 1.3 
 
 Jamison v . New Orleans 691 
 
 Janson v. Ostrander 4 
 
 Jasigi V. Chic, etc., R. R. Co.. 100 
 
 Jav Bridge Co. v. Woodman. ..145, 413, 430 
 Jefferson, etc., Bk. v. Skelly 698 
 
 Jeffersonville, etc., R. Co. v. Bowen.. 
 Jellersonville, etc., R. Co. v. Hen- 
 dricks 
 
 Jeffersonville, etc., R Co. v. Rogers.. 
 
 459, 474, 718, 763, 
 
 Jeffersonville, etc., II. Co. v. Swift ... 
 
 Jefts V. York 
 
 Jenkins v. California Stage Co 
 
 Jenkins v. Hutchinson 
 
 Jenkins v. Morris . . . 
 
 Jennings v. Broughtou 
 
 Jerome v. Ross 564, 
 
 Jer.«ey, etc . R. Co. v. Jersey 
 
 Jessup v. Bridge 631, 
 
 Jessup V. Trustees 
 
 Jewett V. Lawrenceburgh, etc., R. Co. 
 
 John V. Erie R. Co 154, 
 
 Joh !) V . Farmers' Bk . 650. 0.53, 
 
 Johns V. Joiins 189, 
 
 Johnson v, Albany, etc., R. Co 
 
 Johnson V. Atlantic R. Co 
 
 Jf)hiison V. Bentley 654, 
 
 Johnson V. Comm 
 
 Johnson v. Concord R. Co 
 
 Johnson v. County 
 
 Johnson v. Crawfordsville, etc., R. Co. 
 
 136, 
 
 Johnson v. Cunningham 
 
 Johnson v. Indianapolis 
 
 Johnson V. Lucas 675, 
 
 Johnson v. McGruder 
 
 Johnson v. JSorway ,. .. 
 
 Johnson V. Perry 
 
 Johnson V. State Marine Hosp 
 
 Johnson v Underbill 
 
 Johnson v. Wabash, etc., R. Co ...117, 
 
 Johnson v. Westchester, etc., R. Co. .. 
 Johnston V. Ewing Female Univ.. 117, 
 
 Johnston v. Jones 211, 
 
 Johnston V. South West B. Bk. ... 118, 
 
 Joice V . Williams 
 
 Joint Discount Co. v. Brown 243, 
 
 Jolly V. Terre Haute D. Co 
 
 Jones V. Cine, etc., R. Co 
 
 Jones V. Dana 34, 
 
 Jones V . Glass 
 
 Jones V. Mayor 
 
 Jones V. Milton T. Co 313, 
 
 Jones V. Perry. 
 
 Jones V. Smith 
 
 Jones V. Terre Haute, etc-, R. Co., 1.54, 
 181, 190, 219, 244, 
 
 Jones V. Walker 
 
 Jones V. Williams 
 
 Jordan v. Woodward 
 
 Josey V. R. R. Co 
 
 Joslyn V. McAllister 
 
 Junction, etc., R. Co. v. Reeve 
 
 Junkins v. School Dist 
 
 Justices, etc., v. Turnp. Co 
 
 Kaiser v. Kellar 
 
 Kanawha Coal Co. v. Kanawha, etc., 
 
 Coal Co 
 
 Kane V. Bloodgood 99, 
 
 Kansas City Hotel v. Harris ...123, 142, 
 
 Kansas, etc., R. Co. V. Butts , 
 
 Kansas, etc., R. Co. v. Fitzsimmons — 
 
 Kansas Pac. R. Co. v. Miller 
 
 Kansas Pac. R. Co. v. Pointer 
 
 Karnes v. Rochester, etc., R. Co — 156, 
 
 KatamaLand Co. v. Jernegan 
 
 Kay V. Johnson 296, 
 
 Kay V. Penn., etc., R. Co 
 
 Kean V. Johnson 143. 223, 513, 516, 
 
 548, 
 Kearney v, Andrews 
 
 \aK. 
 793 
 
 756 
 
 4.57 
 795 
 756 
 300 
 559 
 300 
 385 
 134 
 592 
 696 
 636 
 388 
 124 
 179 
 654 
 .533 
 150 
 781 
 671 
 698 
 763 
 353 
 133 
 443 
 290 
 
 26 
 678 
 336 
 668 
 469 
 520 
 
 97 
 131 
 180 
 761 
 131 
 180 
 293 
 450 
 277 
 245 
 779 
 505 
 
 36 
 795 
 366 
 315 
 479 
 175 
 159 
 246 
 560 
 175 
 573 
 411 
 469 
 127 
 272 
 711 
 
 543 
 
 34 
 159 
 375 
 783 
 791 
 739 
 649 
 158 
 130 
 536 
 793 
 534 
 660 
 412
 
 Table of Cases Cited. 
 
 XXXV 
 
 PAGE. 
 
 Kearney V. Buttes 114 
 
 Keating V. N. y. C. R. Co TOO 
 
 Keeler V. Fassett 9^! 
 
 Keeler V. Salisbury 2'M 
 
 Keeley V. Erie, eto., R. Co 750 
 
 Keeso v. Chicago, etc., R. Co 784 
 
 Kelley V. Mdnson 44!) 
 
 Kellogg V. Chicago, etc., R. Co .. . .453, 46'! 
 
 7S3, 7»;") 
 
 Kelly V. Mariposa Min. Co 547 
 
 Kelly V. Troy Iiis. Co 27ii 
 
 Kelnerv. Baxter ... 29S 
 
 Kelsey V. National Bk 2*57, 2!) ! 
 
 Kelsey V. Northern L. Oil Co . ... 443, 447 
 
 Kendall V. D. S 67:! 
 
 Kenicott V. Siinervisors 351 
 
 Keiinayde V. Pac. R. Co 78!) 
 
 Kennebec, etc., R. Co. v. Kendall, 143, 148 
 413, 4;i0, 433 
 Kennebec, etc., R. Co. v. Palmer . 145, 305 
 Kennebec, etc., R.Co. v. Portland, etc., 
 
 R. Co 215, 387 
 
 Kennebec, etc., R Co. v. Waters ..134, 443 
 
 Kennedy V. Baltimore Ins. Co 410 
 
 Kennedy V. Colton .504 
 
 Kennedy V. Gibson 604 
 
 Kennedy v. Panama, etc., Mail Co., 437, 4-U 
 
 Keuosiia V. Lamson .. 351,353 
 
 Kenosha, etc., R.Co. V. Marsh .. 63,143 
 
 Kenton County v. Bk. Lick Townp. 30, 64 
 
 Kentucky Bk. v. Schuvlkill Bk . 231, 2.30 
 
 287, 35S, 450 
 
 Kernghara V. Williams . 516 
 
 Kerr, In re — . 5(53 
 
 Ketchum v. Buffalo 343, 3S6 
 
 Keyes V. Devlin 409 
 
 ' Keyes v . Westf nrd 69 
 
 ' Key ser V. School Dist 307 
 
 ' Keyser V. Stansifer 310 
 
 Kiddermiiister V. Hardwick 400 
 
 Kidwelly Canal Co V. Raby 131 
 
 Kilpatrick V. Penrose Ferry Co 258, 303 
 
 Kimball v. Cushman 732 
 
 Kimball V. Marshall... 317 
 
 Kimmel v. Stoner 243 
 
 Kiii£<v. Brooks 3-37 
 
 King V. Coopers' Co 417 
 
 King V. Ginever. 430 
 
 King V. Hertford 616 
 
 King V. Mayor of Liverpool 86 
 
 King V. Mayor of N. Y 682 
 
 King V. Merchants' Ex. Co 387 
 
 Ki ng V . Morf ord .536 
 
 King V.Morris 783 
 
 King V. Ogden .. 63.5 
 
 King V. Patterson, etc. , R. Co 154, 159 
 
 King V. St. Catherine Dock Co 541 
 
 Kingv. Stacey 636 
 
 King V. Theodorick 417 
 
 King V Wilson 355 
 
 I Kingman V. Perkins ... 93 
 
 Kingsl)ury V. School Dist 
 
 Kingston V Kincaid 295 
 
 Kinney V Crocker 469 
 
 Kinzie v. Chic 356 
 
 Kipv. Paterson 414 
 
 Kirljy V Potter 184 
 
 Kirbvv. Shaw 690 
 
 Kirkv. Bell 143 
 
 Kirk V. Nowill 417 
 
 Kirthind v. Snow 166 
 
 Kishacoquillas T. R. Co. v. McConahy. 652 
 
 654 
 Kitchen v. Cape Girardeau, etc., R. 
 
 Co 68, 270 
 
 Klauber v. Am. Ex. Co 771 
 
 Klein v. Alton, etc., R. Co 145, 147 
 
 Kline V. Cent., etc., R. Co 4,57, 733 
 
 Knap V. Jewelch 269 
 
 PACE, 
 
 Knappv. R. R Co .. ,533 
 
 Kneass V. Schuylkill Bk 71(5 
 
 Kneehmd V. Gihnan 3^1 
 
 Kneeland v. Milwaukee 691 
 
 Knight V. Mnyor 34 
 
 Knight V. New O., etc.. R. Co.... 703 
 
 Ivniulit V. Pontcliartrain R. Co 760 
 
 Kniglit V. Wells 25, 667 
 
 Knowlcs V. Beatty 69, 141 
 
 Knowllon V. Ackley 653, 6-56, 666 
 
 Kriowlton V. Congress S. Co 143, 241 
 
 Koehler V. niack Riv. Falls Co 248 
 
 Korn V. Mut. III.'*. Soc 6^ 
 
 Kramer v. C. & P. R. Co 5fi9 
 
 Krester V. Smith 480 
 
 Krider v. Western College 233 
 
 Kuhn V. McAlli.ster ]S3 
 
 Kynaston v. Mayor, etc 417 
 
 Lackawanna, etc., R. Co. v. Doak 784 
 
 Lacl\a\vanna Iron Co. V. Luzerne. . .. 695 
 
 Lafayette Bk. v. Buckingham 543 
 
 Lafayette Bk. v. State B. of III 27.3 
 
 La Fayette Ins. Co. v. Freimh 485, 488 
 
 Lafayette Ins. Co. v. Rogers 501 
 
 Lafayette, etc., R. Co. v. .-Vdams 793 
 
 La Grange R. Co. V Mays 127, 134 
 
 Lrtirange, etc., R. Co. v. Rainey 651 
 
 LalxC V. De Lambert. ,. . ,533 
 
 Lake Ontario R. Co. v. Mason, 117, 132, 1.53 
 
 ISO, 305 
 
 Lake 'View v. Rose Hill Cemetery 43 
 
 Lamb V. Lamb ,348 
 
 Lambertville V. Clevinger. 605 
 
 Lainpeth v. North Carolina R. Co 760 
 
 Lamprell v. Billericay Union 404 
 
 Land Grant R. R. Co. v. Coffey County, 348 
 
 Landreaux v. Bet 763, 76t 
 
 Lane V. Brainerd 137, 313, 315 
 
 Lane V. Cotton - .. 435 
 
 Lane v. Schomp . . 366, .5.3.3 
 
 L.mg V. Smith 353 
 
 Langhaff v. Mil., etc., R. Co 700 
 
 Lang.'-dale v. Bonton. 425, ,508 
 
 Langston v. South Carolina, etc., R.Co., 353 
 
 Lanier v. Bk 91 
 
 Lansing V. Cf)unty Tr 653. 670 
 
 Lansing V. Gaine '. 277 
 
 Larrabue v. Baldwin 109 
 
 Lathrop v. Bk. of Sciot 271 
 
 Lath rop V. Cora Bk.. 410 
 
 Lathrop V. Union Pac. R. Co 485, 494 
 
 Laugher V. Pointer 435 
 
 Lauman v. Lebanon, etc., R. Co., 215, .SIX 
 387, 513, .547, 550 
 
 Laussatt V. Lippincott 272, 290 
 
 Lavertv V. Burr 277 
 
 Law V. Conn. R R. Co ; . . 293 
 
 Lawless v. Anglo-Egyptian Co 453, 4.53 
 
 Lawrence case 448 
 
 Lawrence v. Gt. North. R. Co 7S3 
 
 Lawrence v. Housatonic R. Co 469 
 
 Lazarus v. Shearer 283, 300 
 
 Lea V. American Canal Co 6.53 
 
 Lea V. American, etc., R. Co 604 
 
 Leavenworth V. Rankin 287, 302, 355 
 
 Leavitt V. Blaichford 344 
 
 Leavitt V. Fisher 170 
 
 Leavitt V. Palmer 381 
 
 Leavitt v. Yates 217, 316 
 
 Leazure V. Hillegas 410 
 
 Le Blanc, Matter of 155, 1,59 
 
 Ledbetter v. Walker 336 
 
 Lee V. M. E. Church 296 
 
 Lee V. Sandy Hill ,.. 443, 4.58 
 
 Lee V. Trustees, etc., 403 
 
 Leev. Wallis 421 
 
 Leech v. Harris 83 
 
 Leedom V. Plymouth, etc., R.Co 529
 
 XXXVl 
 
 Table of Cases Cited. 
 
 PAOF.. 
 
 Leflerv. Field 446 
 
 Legtrett V. N.J. Bk. Co 407, 6;?1 
 
 Le^urett V. N. J. Man. Co 410 
 
 Legrand v. Haiupdeii Sidney College . 271 
 
 403. 410 
 Lehigh Br. Co. v. Lehigh Coal Co. 50.5, H.50 
 
 Lehigli Co v. Northampton 6'.).') 
 
 Lehigh, etc., R. Co. v. Hall 788, 790 
 
 Lehiiutn V. Brooklyn 480 
 
 Leigh V. Crump -. 537 
 
 Leitoh V. Welles 97, 190 
 
 Leland V. Hayden .. 156, 160 
 
 Lenoh V. Lench... . 449 
 
 Lenox V. Roberts 388 
 
 Lentoii V. McNeil 13;i 
 
 Leonardsville Bk. v. Willard 483 
 
 Le Roy V. Globe Ins. Co 159 
 
 Leroy V. Piatt .. 638 
 
 Le Roy v. Trinity House 616 
 
 Lesterv. Webb 217, 278 
 
 Levering v. By. Co 594 
 
 Levy V. Home 378 
 
 Lewey's Island R. Co. v. Bolton — .. 153 
 
 Lewis V. Bk. of Kentucky 487, 506 
 
 Lewis V. Jeffries 369 
 
 Lexington V. Butler 353, 383, 387 
 
 Lexington, etc., R. v. Applegate 60S 
 
 Lexington, etc., R. Co. v. Bridges. 241, 303 
 Lexington, etc.,R. Co. v. Chandler, 117, 119 
 
 147, 153 
 
 Lexington , etc., R. Co. v. Staples 1.53 
 
 Libbey V. Hodgdon 486 
 
 Libby V Roselvranse 543 
 
 Lickbarrow V. Mason 4-14 
 
 Life Ins. Co. v. Mechanics* F. Ins. Co.. 434 
 
 Life Ins Co. v. Wilson 677 
 
 Lighte V. Everett Ins. Co 504 
 
 Lightner v. Boston, etc., R. Co 555 
 
 Limpus v. London Gen'l Omnibus Co., 451 
 457, 716, 719, 726, 731, 738, 795 
 
 Lincoln v. Prince 493 
 
 Lincoln V. Richardson 29 
 
 Lincoli! V. Saratoga R. Co 469 
 
 Lincoln v. Smith 713 
 
 Lindell V. Benton 653, 667 
 
 Linder v. Carpenter 2.53 
 
 Lindsey v. ^Marshall 371 
 
 Lindus v. Melrose 296 
 
 Linsley v. Bushnell 468 
 
 Lionberger v. Rouse 711 
 
 Lisconibe V.Jersey, etc., R. Co 7.53 
 
 Litchfield Bk. v. Church .. 133, 136 
 
 Litchfield Bk. v. Peck 4« 
 
 Litchfield Iron Co. v. Bennett .... 233, 278 
 
 Littell V. Scranton Gas, etc., Co 93 
 
 Little V. O'Brien 371 
 
 Little Miami R. Co. v. Collett 606 
 
 Little Miami R. Co. v. Stevens 717 
 
 Little Miami R. Co. v. AVetmore. 763, 794 
 Littleton Manuf. Co. v. Parker. 119, 141, 151 
 
 Littlewort v. Davis 371, 391 
 
 Liverpool v. Chorley W. Works 575 
 
 Liverpool Ins. Co. v. Mass.. .2, 15, 23, 348 
 
 490, 500 
 
 Livingston V. Dorgenois 674, 683 
 
 Livingston V. Hastie 277 
 
 Lloyd v. Hannibal, etc., R. Co. ... 755, 760 
 
 Lloyd v. Mayor, etc., of N. Y 41 
 
 Lloyd V. Wheatley 526 
 
 Loan Asso. v. Stoneraetz..257, 259, 260, 303 
 
 Loan Asso. V. Topeka 35 
 
 Locke V. Stearns .. . . 278, 435 
 
 Lockhart V. Van Alstyne 159, 179 
 
 Lockwood V. Mechanics' Nat. Bk.. 188, 416 
 
 Lockwood V. Merchants' Nat. Bk 413 
 
 Logan V. McAllister 29, 32 
 
 Lohman v. N. Y., etc., R. Co.. 181, 233, 274 
 
 Loker V. Brookline 286 
 
 London V. Vanacker 413 
 
 London, etc. 
 London, etc. 
 
 London, etc. 
 
 London, etc., Bk., Re 546 
 
 London, etc. , Coal Co. , In re 218 
 
 London, etc. , Ins. Corp., In re 548 
 
 LoTidon & Provincial Law Ass. v. Lon- 
 don Pro. Joint Stock Life Ins. Co . . . 25 
 
 London, etc., K. Co. V Canal Co 780 
 
 R. iJo V. Freeman. 173 
 
 R. Co. V. Graham... 146, 148 
 173 
 
 R. Co. V. McMichael 79 
 
 Londonderry V. Andover 13 
 
 Longv. Colburn 283,293 
 
 Long Island U Co., Matter of 146, 313 
 
 Longley v. Little 113 
 
 Longmore V. G. W. Ry. Co 7.57 
 
 Loraine v. Cartwrignt 293 
 
 Lothrop V. Stedmai) 45 
 
 Loughbridge V. Harris 570, .573, .576 
 
 Louisiana V. Fordick 487, 500 
 
 Louisiana State Bk. v. Orleans Nev.Co. 66 
 
 Louisville V. Uni. of Louisville 649 
 
 Louisville It Co. v. Faulkner 795 
 
 Louisville, etc., R. Co. v. Comm 694 
 
 Louisville, etc., R. R. Co. v. Letson.. 79 
 
 488, 493, 495 
 
 Louisville, etc., R Co. v. State... &iS, 796 
 
 Lovett v. Salem, etc. , R. Co 723 
 
 Lovett V. Steam Saw Mill Asso 407 
 
 Low v. Connecticut, etc., R. Co 304 
 
 Low v. London, etc., R. Co 396 
 
 Lowberv. Mayor 41, 666 
 
 Lowell's case 233 
 
 Lowell V. Boston & Low R. Co 433 
 
 Lowell V. Oliver 6iM3 
 
 Lowell Sav. Bk. v. Winchester 237, 289 
 
 419, 431 
 Lowry V. Commercial, etc., Bk... 105, 176 
 
 Lucas V. Pitney 343, 383, 386 
 
 Lucenav. Crawford 449 
 
 Ludlow v Charlton 409 
 
 Ludlowv.Hurd 388,6.31,637 
 
 Luling V. Atlantic Mut. Ins. Co 190 
 
 Lum v. Robertson 669 
 
 Lumbard v. Stearns 571, 658 
 
 Lunney v. East Warren Co 393 
 
 Luttrell V. Hazen 795 
 
 Lyman V. Bonney 533 
 
 Lyman v. Bridge Co 458, 717 
 
 Lynch V. Nurdin 463 
 
 Lyndeborough Glass Co. v. Mass. Glass 
 
 Co 233 
 
 Lyon V. Adamson 271 
 
 Lyonv. Jerome 564 
 
 Lyons V. Martin 730 
 
 Lyons V. O. A. &M. R. Co 31, 64 
 
 Mabey V. Adams 241 
 
 Mabey V. Austin 303 
 
 McAfee's Heirs v. Kennedy 573 
 
 Mc Aleer v. McMurray 516 
 
 Macauly v, Robinson 113 
 
 McBane v. People 673 
 
 .Mc Bride V. Porter 310 
 
 McCall v. Byram Man. Co 350 
 
 .McCall v. N. Y. C. R. Co 788 
 
 McClanathan v. R. Co 730 
 
 MeCleary v. Kent ■ 734 
 
 McClellan V. Scott 443 
 
 McClung v. St. Paul 304 
 
 McCluerv. Manchester, etc., R. Co 375 
 
 McClure V. Bennett . 398 
 
 McConahy v. Centre Turnp 671 
 
 McCracken V. San Francisco.. 239,293, 355 
 
 McCray v. Junction R. Co 140, 143, 551 
 
 McCready V. Rumsey 200 
 
 MeCullO(;h V. Maryland 14, 699, 706 
 
 McCulloch V. Moss 337, 289 
 
 McCullough V. Annapolis R. Co 423 
 
 McCully v.R. R. Co 128
 
 Table of Cases Cited. 
 
 xxxvii 
 
 PAGE. 
 
 McCurdy v. Myers 600 
 
 McCutcheon V. Steamboat Co 380 
 
 McDcUiiel V. Etiiaiiuel 467 
 
 McDaniels v. Flower Brook Manuf. Co., 312 
 
 3.58 
 
 McDermottv. Board Police 417, 423 
 
 McDeriuott v. Kvening Journal 4-53 
 
 McDiarmid V. Fitch 67.5 
 
 McDonald V. Chicago, etc., R. Co., 751, 7-53 
 
 756, 7.59 
 
 McDowell V. Bk. Wilmington 104 
 
 McDowell V. N. Y. C. R. Co 793 
 
 McDowell V. Wash. Bk 430 
 
 McElhenny's appeal 1.39 
 
 Mackey V. N. Y C. R. Co 78^: 
 
 McGehee V. Mathis 691, 698 
 
 McGoonv. Scales 664 
 
 Mactrregor v. Deal, etc., R. Co., 302, 363, -383 
 
 McGresjor v. Erie U. Co .560 
 
 Mai'gregor v. Dover, etc., R. Co 302 
 
 McGrew V. Stone 469 
 
 McGuire V. Grant ':32 
 
 McGuirev. Hudson R. Co 789, 791 
 
 Jlclntire V. Preston 285 
 
 Mclntyre v. N. Y. Cent. R. Co 479 
 
 Mclntyre Poor Schools v. Zanesville 
 
 Canal Co. 73, 650, 659, 666 
 
 Mackey v. N. Y. Cent. R. Co 787 
 
 McKarlin V. Bresslin .509 
 
 McKeen V. Northampton 695 
 
 McKellarv. Stout... 113 
 
 McKeon v. ( itizens' R. Co 795 
 
 McKim V. Mason 637 
 
 Mclvinleyv. Chic. & N. W. R. Co.. 463, 478 
 
 McKinstry V. Pearsall 272 
 
 Mai'laev. Sutherland 2-39 
 
 McLaren V. Pennington ... 131, 649, 6.59 
 
 McLaughlin v. Detroit, etc., R. Co. 1,58, 179 
 
 181, 233 
 
 McLean v. Russell 735 
 
 McMahan V. Morrison 547, 550 
 
 McM asters V. Com m 561 
 
 McMasters v. Reed 3.56 
 
 McMetity V. Frank 336 
 
 McMillen v. Smith 679 
 
 McMuIlin V. State 675 
 
 McMiirtrie V. Bennett 527 
 
 McNeil V Tenth Nat. Bk... 91, 97, 102, 190 
 
 Macon, etc., R. Co. v. Davis 793 
 
 Macon, etc., R. (^o. v. Johnson 761 
 
 Macon, etc., R. Co. v. Parker.. ..529, .5.34 
 Macon, etc., R. R. Co. v. Vason... 139, 142 
 
 534 
 
 Macon, etc., R. Co. V. Winn 793 
 
 McPadden V. N. Y. C. R. Co 751 
 
 McPherson V. Foster 357 
 
 McRea V. Ru.'^sell 116, 118 
 
 McVlcker V. Ross 5.53 
 
 McWhorterv. Lewis 286 
 
 McWhorterv. McMahan 527 
 
 Maddox V. Crahara 3.52 
 
 Madison College v. Burke 483 
 
 Madison, etc., R Co. v. Taffe 789 
 
 Madison, etc., R. Co. v. Watertown, 
 
 etc., P. R. Co 66 
 
 Magill V. Kauflman 233, 287 
 
 Mahaska, etc., R. Co. v. Des Moines, 
 
 etc.,R Co 215 
 
 Maher V. Carman 114 
 
 Mahoney v. R. Co 793 
 
 Mahonyv. Bk. of Arkansas 28 
 
 Mahony V. Bast Hoi vford 3.56 
 
 Mahoney v. Spring Valley Water Wks. 368 
 
 Mahoney Mining Co. v. Bennett 313 
 
 Macine Stasre Co v. Langley 394 
 
 Malecek v. Tower Grove Co 270 
 
 Malloy V. Mallett 114,669 
 
 Maltby V. N. Western R. Co 137, 505 
 
 Manderson v. Commercial Bk 514 
 
 Manhattan Co. v. Lydig 345. 450 
 
 Mann V. Cfiandler 283 
 
 Manti v. Cooke 147, 172, 541 
 
 Mann v. Ciirrie 121,147,171, 173 
 
 Mannv. Prentz ... 144,171,406,410, .">41 
 
 Maniiey v. Motz 483 
 
 Monroe v. McCall 674 
 
 Man < V. Worthing .338 
 
 Manser v. Eastern Counties R. Co 741 
 
 Mansfield V. Watson 114, 436 
 
 Mansfield V Fuller 675 
 
 Mansfield, etc., R. R. Co. v. Dunker... .5.57 
 
 .Man Nat. Bk. v Baach 492, .500 
 
 Man. Co. V. Armstrong .505 
 
 Manuf. Co. V. Davis 25 
 
 Mapp V. Phillips 294 
 
 Marble V. Worcester 463 
 
 Marblehead Social Ins. Co. v. Quiner. 1.87 
 March v. Eastern, etc., R. Co. .154, I.5fi, 204 
 
 513, 516 
 
 Marchand V. Loan, etc., Assoc .. 34 
 
 M arc vv. Clark 40, 113 
 
 Mare V. Charles 286 
 
 Marietta V. Fearing 41,416 
 
 Marietta Bk. v. Pindall 487 
 
 Marietta, etc. , R. Co. v. Elliott 140 
 
 Marine Bk. V. Biays 1-59 
 
 Marine, etc., Ins. Bk. v. Jauncey 487 
 
 Mariners' Bk v. Sewall 064 
 
 Markham V Brown 773 
 
 Markle V.Akron 425 
 
 Marlatt v. Levee Stearab. Cotton Co . . . 4.51 
 
 Marlborough Manuf. Co. v. Smith . 96, 149 
 
 104, 172, 198, 218, 224. 439 
 
 Maroney v. R. Co 763 
 
 Marsh V. Falker 446 
 
 Mar.'ih V. Fulton Co. 286, 303, 355 
 
 Marshall v. Baltimore, etc., R. Co 26 
 
 307, 495, .500 
 
 Marshall V. Queensborough .536 
 
 Martin v. Gt. North. R. Co 7.53 
 
 Martin v. Mayor 286, 355 
 
 Martin V. Nashville Building Asso 413 
 
 Martin V. Pensacol a Coal Co 134 
 
 Martin v Pensacola, etc., R. Co.. 124, 1.36 
 
 Martin V. Zellerbach 2-33, 295 
 
 Mary V. Beekraan Iron Co 284 
 
 Maryland v. Baltimore, etc., R. Co 4*0 
 
 Maryland V. Bank of Md .530 
 
 Maryland, etc., v. Scliroeder 535 
 
 Maryland Tris. Co. v. Dalrymple 93 
 
 Maryland Union Bk. v. Ridgely 233 
 
 Mason v. Cheshire Iron Works 114 
 
 Mason v. Elsworth 469 
 
 Mass. Gen. Hosp. v. State Asso. Co 649 
 
 Mass. Iron Co. v. Hooper 103, 197, 201 
 
 Master, etc.. Emanuel College, Case of. 269 
 
 Masters v. Warren 468 
 
 Mathenyv. Golden 427 
 
 Matheny V. Wolffs 737 
 
 Mathews v. Albert 114 
 
 Mathews V. Mass. Bk 196 
 
 Mathews V. Hamilton 294 
 
 Mattesor. V N. Y. C. R. Co .. 469 
 
 Matthews v. G. Northern, etc., R. Co.. 178 
 
 Matthews V. Skinner 68, 338 
 
 Matthews V. Trustees .534 
 
 Matthews v. West London W. Co 782 
 
 Manx Ferry Gravel Co. V. Branigau.257, 2-59 
 
 Maxwell V. Dulwich College 401 
 
 Mayer V. Penn. Slate Co Ill 
 
 Mayhew's case 23 
 
 Mayorv. Bailey 571 
 
 Mayor V. Beasley 414 
 
 Mayorv. Charlton 380, 395 
 
 Mayor V. Seaber 483 
 
 Mayor v. Groshon 516, 524 
 
 Mayor V. Horner 365 
 
 Mayorv. Lord 685, 714:
 
 XXXMU 
 
 Tajjle i)V Cases Cited. 
 
 PAGE. 
 
 Mayor v. Norfolk K. Co 303, 3ti;3, 379 
 
 Mayor V. Norwich K. Co 651 
 
 Mayor V. Ifairiwater 074 
 
 Mayor v. Kay 2!).") 
 
 JMayor V. Slielturi 18 
 
 Mayor V. Winfleld 4U 
 
 Alayor V. Vuillo .. .. 67,414 
 
 Maysville 'riirnpike Co. V. How 42 
 
 Mead v. ICeeler 30, 37, 274, 278, 386 
 
 Mead v. Sinith 107 
 
 Mead V. Veeder 313 
 
 Meads v. Merchants' Bk 444 
 
 Means V. Swormstedt 2'.\.\ 
 
 Mears v. London, etc., R. Co 458 
 
 Mechanics' Bk. v. Bk. of Columbia — 271 
 
 379, 286, 338 
 
 Mechanics' Bk. v. Merchants' Bk. . .102, 197 
 
 534 
 
 Mechanics' Bk. v. Mfriden Agency Co. 35.i 
 
 Mechanics' Bk. v. N. V , etc., It. Co... 102 
 
 187, 190. 207, 227, 287, 289, 431 
 
 Mechanics' Bank V. Thomas 202 
 
 Mechanics' Bk. Asso. v. White Lead 
 
 Co 383, 388 
 
 Mechanics', etc., Bk. v. DeboIt..42, 202, Oid 
 
 699 
 
 Mechanics', etc., Bk. v. Smith 416, 419 
 
 Mechanics' i uilding Asso. v. Stevens.. 671 
 
 Medicallnst. V. Patterson 10 
 
 Medillv. Collier 114 
 
 Medomak Bk. v. Curtis 239 
 
 Meech V. Smith 300 
 
 Meeker v Meeker 526 
 
 Meers v. London & S. Western Ry. Co. 451 
 
 Meesel V. Lynn, etc., 11. Co 701 
 
 Meeting House V. Lowell 695 
 
 Meikel v. German Sav., etc., Soc 505 
 
 Mellen V. Whipple 427 
 
 Melvin V. Lumar Ins. Co 171 
 
 Memphis V. Dean .509,510 
 
 Memphis v. Lasser 451 
 
 Memphis Uranch 11. R. Co. v. Sullivan 139 
 Memphis Freight Co. v. IMemphis. .572, 577 
 
 Memphis & O. B. Co. v. Hicks 782 
 
 Meagher V. County 303 
 
 Mendelsohn v. Anaheim Lighter Co.. 408 
 
 473 
 
 Menier v. Hooper's Tel. Works 510 
 
 Mentz V. Second Ave. R. Co 788 
 
 Mercer V. R. K. Co 509 
 
 Mercer Co. V Hackett 351 
 
 Merchants' Bk. v. Cont. Bk.. 239, 280 
 
 Merchants' Bk. v. Glendori Co 37 
 
 Merchants' Bk. v. Mc' all 285, 297 
 
 Merchants' Bk. v. Marine 274 
 
 Merchants' Bk. v. Richards ... 19 5 
 
 Merchants' Bk. v. State Bk....229, 374, 277 
 4.34, 444, 447 
 
 Merchants' Bk. V. Stone 31 
 
 Merriam V. Moody's Exrs 66 
 
 Merrick v. Brainard 338, 3.50 
 
 Merrick v. Burlington, etc., R. Co., 401, 410 
 
 Merriclv V. Peru Coal Co . 2.55, 484 
 
 Merrick v. Reynolds Engine Co 35, 505 
 
 Merrill V.Suffolk Bk 007 
 
 Merrill v. Tariff Mem . Co 4.59 
 
 Merrimac, etc., Co. v. Bay City 145 
 
 Merrimac Mining Co. V. Levy 130 
 
 Merritt V. Ferris 313 
 
 Mersey Docks' Trustees v. Gibbs 4.53 
 
 Methodi-st Chappel Co. v. Herrick.. 303, 410 
 Methodist, etc.. Church v. Pickett ... 36 
 Methodist Episcopal Church v. Wood. . 506 
 
 Metropolis Rk. V. Jones 217 
 
 Metropolis Bk. V. Orme ... . 506 
 
 Metropolis Bk. v. Guttsclilick, 270, 283, 408 
 
 411 
 Metropolitan Saloon Omnibus Co. v. 
 
 Hawkins 452 
 
 Meyer v. Midland, etc.. R. Co 792 
 
 Meyer V. Second Ave. R. Co 7t)3 
 
 Mey not. Ex parte 304 
 
 Miami Coal Co. v. Wigton 578 
 
 Mich. Bk. V. Hasting* ... 649 
 
 Mich. Bk. V. Williams.... 504, 506 
 
 Jlichoud V. Girod . . . 2.54 
 
 Mickles V. Rochester City Bk., 625, 653, 657 
 
 Middle Bridge V. Brooks 06 
 
 Middlebrook v. Merchants Bk 100 
 
 Middlebury Bk. v. Edgerton 217, 213 
 
 iiddlebury Bk. v. R. ^ W. R. Co... 317, 4()5 
 
 420 
 Middlesex Husbandman V. Davis... 24, 315 
 Middlesex R. Co. v. Boston, etc., R. Co., 215 
 
 Middlesex T. Co. V. Locke 127, 143 
 
 Middlesex Turn. Co. v. Swan 127 
 
 iMiddletown Bk. V. Bu.ss 113 
 
 Middietown, etc., Turnp. Co. v. Watson, 149 
 
 .Midland G. W. R Co. v. Gordon 180 
 
 Midland Great Western Ry. v. Leech... 557 
 
 Mid. By. Co. v. Hudson 2.53 
 
 Milhau v. Sharp 416 
 
 Millard v. Eyre 523 
 
 Mill Dam Foundry V. Hovey. 393,405, 411 
 
 Miiledge V. Boston Iron Co.. 394 
 
 Miller v. Chance 387, 031 
 
 .Miller V. Craig ... 571 
 
 .Vlillerv. Ewer 26, 328, 350, 411, 015 
 
 Miller V. Frost 573 
 
 Miller V. Hanover Junction & S. R. R. 
 
 Co .. ..r 141 
 
 Miller V. Lancaster. .. 5.54,5.56 
 
 Miller V.Milwaukee 3^5 
 
 .Miller V. N. Y., etc., R. Co 506 
 
 Millerv. P. &C. R. R. Co 125 
 
 Miller v. Rutland, etc., R. Co 2!5, 217 
 
 351, 353, 387, 637 
 
 Miller V. State 65 
 
 Milligan v. Wedge 435 
 
 Mi Hi ken v. Whitehouse 114 
 
 Mills V. Camp 100 
 
 Mills V.Jefferson 353 
 
 .Mills V. Stewart 98 
 
 Mills V. Williams ... 39, 44 
 
 Milwaukee & M. R. Co. v. Finney . 473, 774 
 Milwaukee, etc., R. Co. v. Hvmter. 787, 790 
 
 Minardv. Mead 282,2.84 
 
 Miners' Bk. V. Cr. S 63, 049 
 
 Miners' Ditch Co. v. Zellerbach . . 66, 08 
 286, 357, 360 
 
 Minliinnah v. Haines 676 
 
 .Minn. Cent. R. V. McNamara 606 
 
 Min. Co. V. St. Paul Co 530, 039 
 
 Minor V. Mechanics' Bk... 30, 118, 130, 274 
 
 Minotv.Paine 1.55,159, 101 
 
 .Minter V. Pac. R. Co 725 
 
 Minturu V. Larue .. . 07 
 
 Mintzer V. Montgomery 711 
 
 Mo. Bk. V. Merchants' Bk. 6.54 
 
 Miss. Bk. v. Wren n 051 
 
 Miss , etc., R. Co. V Camden 80 
 
 Miss., etc., R. Co v. Cross... 134, 136, 443 
 
 505 
 
 Miss., etc., R. Co. v Gaston 153 
 
 Miss. Soc. V. Musgrove 31 
 
 Mitchell V. Deeds 375 
 
 Mitchell V. Rockland 287, 355 
 
 Mitchell V.Rome R. Co.. 118, ISO 
 
 ^Mitchell V. Sproul . .. 336 
 
 Mitchell V. Vermont Copper Min. Co... 426 
 
 Mixer's case 439 
 
 Mobile V. Yuille 51 
 
 .Mobile, etc., R. Co. v. Franks 339 
 
 Mobile, etc., R. Co. v. Mosely .. 43 
 
 Mobile, etc., K. Co. v. State 650, 6.59 
 
 Mobile, etc., R. Co. v. Talman'... 343, 388 
 
 631 
 Moers V. Reading 711
 
 Table of Cases Cited. 
 
 xxxix 
 
 PAGE. 
 
 Mohawk, etc., R. Co. V. Clute 694 
 
 Mohawk & Hudson R. Co . , lie 09, 69 i 
 
 Mohawk Brid-ie Co. v. U. & S. R. Co. 58, 3.39 
 
 Moise V. Cliapman ... 'A'-) 
 
 Moises V. Thornton 406,410 
 
 Mokelumne, etc., Co. v. Woodbury. 32, 113 
 
 Alonongahela Bridtje Co. v. Kirk 785 
 
 Monroe Co. Sav. Bk. V. Koch Til 
 
 Montague v. Church School Dist ,T).H 
 
 Montoya V. London Ass. Co . 46'.; 
 
 Montpelierv. East Montpelier UiiS 
 
 Monument Nat. Bk. v. Globe Works... 357 
 
 3.-3 
 
 Moody V. Keener .. 93 
 
 Moody V. Orijorood 468 
 
 Moody V. Wright 388 
 
 Moore V. Bk. of Commerce 161, 416 
 
 Moore V. Fjichburgh R. Co 457, 716, 73;2 
 
 738, 763, 764, 795 
 
 Moore V. Hammond 313 
 
 Jloore V. Saiiborno 733 
 
 Moore v . Whitcomb 659 
 
 Morell V. Codding 285 
 
 Morford v. Farmers' Bk 383 
 
 Morgan v. Bauk of North America.. .. 103 
 
 430 
 
 Morgan V. Donovan 367 
 
 Morgan v. Louisiana 703 
 
 Morgan V. Skiddy 3t3 
 
 Morrill V. Noyes .388, 631 
 
 Morris V. Keil .396 
 
 Morris Canal Co. v. Lewis 351 
 
 Morris Canal, etc., Co. v. Townsend ... 566 
 
 Morris, etc., R. Co. V. Miller 691 
 
 Morris, etc., R. Co. v. Newark.. SSS 
 
 Morris, etc., K. Co. v. Sussex R. Co 68 
 
 Morrison v. Eaton, etc., R. Co 342 
 
 Morse v. Auburn, etc., R. Co 468 
 
 Morse v. Erie R. Co 788 
 
 Morse v. b wits 343 
 
 Mortimer V. McCallan 197,509 
 
 Morton Gravel R. Co. v. Wysong 413 
 
 Mosler V. Potter 36 
 
 Moss V. Averell 114, 233, 295, 386 
 
 Moss V. Haspeth Academy 336, 343 
 
 Mosa V. Livingston 398 
 
 Moss V. McCullough 112 
 
 Moss V. Oakley 113, 114 
 
 Mossv. Rnssie Lead Co 2-33, 388 
 
 M,)tt v. Hicks. 271, 283, 297, 342, 386, 394, 396 
 
 Mottv. Palmer 6.38 
 
 Mott v. Penn. R. Co 437, 698 
 
 Mott V. U. S. Trust Co 338,371 
 
 Mt. Holly, etc., T. Co. v. Ferree. ..188, 19ij 
 
 19' 
 
 Mount Wash. Road Co., Petition 566 
 
 Mount Sterling V. Looney 379 
 
 Mousseaux v. Urquhardt 99 
 
 Mowrey v. Ind. &Cin. R. Co.... 43. 44, l-'O 
 311. 550, 553 
 Muir V. Louisville & Portland Caual 
 
 Co 395 
 
 Muller V. Dows 5.54 
 
 Mullins V. North, etc., R. Co.... 139 
 
 Mummav. Potomac Co ..206,244, 246, 515 
 650, 659, 664, 668 
 
 iMunicipality V. Cutting 425 
 
 Muiin V. Rarnum 187 
 
 Mu n n V. Comrs. Co 386 
 
 Munu V. Illinois 49 
 
 Munn V. People 52 
 
 Munroe V. Thomas 538 
 
 Munsell V. Temple 373 
 
 Munt V. Shrewsbury, etc., R. Co- ..516, 536 
 
 Miirdock v. Gifford 638 
 
 Murphy V. Bk. of Arkansas 28 
 
 Murphy V. Caralli 731 
 
 Murphy V. Farmers' Bk 613,618, 634 
 
 Murray v. Carrie 732 
 
 Murray v. East India Co 
 
 .\Iurray v. Lardiier 351, 
 
 Murray v. Vanderbilt 
 
 Muscatine v. 11. R. Co 
 
 JIuscatiue Turn Verein v. Funk... 664, 
 Muskingum, etc., R. Co. v. Ward . ... 
 
 Mussey V. Eagle Bk 
 
 Mut. Benellt L. Ins. Co. v. Davis 
 
 Myers v. Manhattan Bk 19, 
 
 Naber V. Bright 
 
 Nabor, Matter of 
 
 Naglee v. Pac, etc., Warf. Co 191, 
 
 Napa Valley R. Co. v. Napa Co 
 
 Napier v.Poe 
 
 Narragansett Bk. v. Atlantic Silk Co.. 
 35, 37, 393, 
 
 Nashville Bk. V. Petway 65b, 
 
 Nasliville, etc., R. Co. v. Messino . . . 
 
 Nathan v. VVIiittock 541, 
 
 Nat., etc.. Assurance Co., In re 
 
 Nat. Bk. v. Colby 
 
 Nat. Bk. V. Comm 
 
 Nat. Bk. V. Lake Shore, etc., Ry. Co.. 
 Nat. Exchange Bank v. Hartford, etc , 
 
 R. Co 351, 
 
 Nat. Ex. Co. V Drew 437, 450, 
 
 National Patent Steam Fuel Co., Ex 
 
 parte 179, 
 
 Natoma W. &M. Co. v. Clarkin 
 
 Nebraska v. Campbell 
 
 Neal V. Pittsburgh & Connellsville Ry. 
 
 Co . 
 
 Neall V. Hill 204, 523, 
 
 Neiler v. Kelly 
 
 Nelson V. Blakey 
 
 Nelson v. Eaton." 
 
 Nelson v. Iowa Eastern R. Co 
 
 Nelson V. Justices .... 
 
 Nelson v. Luling 244, 
 
 Nesbitt V. Trumbo 
 
 Nesmith V. Wash Bk 
 
 Neuse River Nav. Co. v. Com. of fiew- 
 
 bern 133 
 
 Neville v Wilkinson 378 
 
 Nevitt V. Bank 664 
 
 New Albany v. Burke 669 
 
 New Albany, etc., R. Co. v. Fields 131 
 
 New Albany, etc., R. Co. v. McCormick, 1.53 
 New Albany, etc., R. Co. v. McNamara, 79.3 
 New Albany, etc.,R. Co. v. Smith ... 353 
 New Bedford, etc., Co. v. Adams. .. 145 
 
 Newberry v. Detroit, etc 199, 203 
 
 Newberry v . Garland ... 243 
 
 New Boston V. Dumbarton 13, 28 
 
 New Bruuswick, etc., Ry. Co. v. Cony- 
 
 beare 437, 439, 
 
 Newby v. Oregon, etc , R. Co 
 
 Newcastle R. Co. v. Peru, etc.. R. Co.. 
 New Cent. Coal Co. v. George's Creek 
 
 Coal, etc. ,Cu 
 
 Newcomb v. Smith 
 
 Newell v. Smith 288, 
 
 New England Car Spring Co. v. Union 
 
 India-rubber Co 
 
 New Eng. Ins. Co. v. De Wolf .... 283, 
 New Hampshire, etc., R. Co. v. John- 
 son 
 
 New Haven Co. v. Hayden . . 
 
 New Haven R. Co. v. Chapman 
 
 New Hope &D. B. Co. v. PhoeuixBk.. 
 
 269 
 353 
 255 
 670 
 669 
 153 
 274 
 485 
 654 
 
 674 
 200 
 685 
 116 
 31 
 308 
 666 
 750 
 664 
 556 
 657 
 711 
 193 
 
 a53 
 453 
 
 43T 
 374 
 469. 
 
 604 
 535 
 93 
 137 
 387 
 643 
 677 
 246 
 561 
 439 
 
 New Hope, etc., Co. v. Pough. Silk Co., 
 
 N. J. M. R. Co. V. Strait 
 
 New .Jersey Nav. Co. v. Merchants' Bk. 
 
 New Jersey V. Wilson 
 
 Newling V. Francis — 
 
 .Vewman, Ex parte 
 
 New Orleans v. Philippi 
 
 453 
 35 
 553 
 
 571 
 573 
 573 
 
 68 
 288 
 
 119 
 
 379 
 35 
 237 
 239 
 487 
 554 
 .53 
 699 
 413 
 674 
 414
 
 xl 
 
 Table of Cases Cited. 
 
 New Orleans Gas-light Co. v. Bennett.. 542 
 
 N. O. U. R. Co. V. Biiiley 4.52 
 
 Kew Orleans, etc., K Co. v. Harris, 42, 21.5 
 New Orleans, etc., K. Co. v. Hurst. . . 474 
 New Orleans, etc., R. Co. v. Statham.. 474 
 
 75!) 
 New Orleans, etc., R. Co. v. Willianis, 135 
 
 Newry, etc., Ily. Co. v. Edmonds J0:> 
 
 Newsou V. N. Y. C. R. Co 7«9 
 
 Ncwsoii V. Thornton 272 
 
 Newton & Bridf;eport Turnp. Co. v. 
 
 Northrop .. Ifi7 
 
 Newton, etc., Co. v. White &59 
 
 N. Y. Bli. v.Bk. Ohio 297 
 
 N. Y. Bk. V. Farmers' Bk '^97 
 
 N. Y., etc.. Canal Co. V. Fulton 548 
 
 N. Y . Dry Docks v. Hicks 485 
 
 N. Y. Exch. Co. V. DeWolf 123, 134 
 
 N. Y. Floating Derrick Co. v. N. J. Oil 
 
 Co : 3.28, 350 
 
 N. Y. F. Ins. Co. v. Ely ti9, 485 
 
 N. Y. L. Ins. & Trust Co. v. Beebe .... 390 
 N. Y., etc., R. Co. v. Ketchum, 257, 259, 2«1 
 
 303 
 
 N. Y., etc., R. Co. v. Kip 339, .570 
 
 N. Y.,etc., R. Co. v. N. Y 410 
 
 N. Y., etc., R. Co. v. Sal>in 695 
 
 N. Y., etc., R. Co. v. Schuyler, 91, 102, 171 
 186. 188, 195, 207, 209, 431, 444. 532, 716 
 
 N. Y. &E. R. Co. V. Young 7S5 
 
 N. Y. Trust & Loan Co. v. Helmer..70, 389 
 
 New Zealand Bk. Co., Re 232 
 
 New Zealand Caulking Co. v. Blakely 
 
 Ordinance Co 350 
 
 Ney V. Richards 676 
 
 Niagara Bk. V. Johnson 653 
 
 Nichol V.Nashville 711 
 
 Nicholas V. Oliver 270, 285 
 
 Nicliols V. Burlington, etc., Plank R. 
 
 Co 128 
 
 Nichols V. Frothingham 28.5, 296 
 
 Nichols v. Oliver 296 
 
 Nichols V. Somerset, etc., R. Co 561 
 
 Nicholson v. Bradford . 404 
 
 Nicholson v. Erie R. Co 789 
 
 Nicholson v. Lan. & York R. Co 7-52 
 
 Nicholson Pavement Co. v. Painter ... 66 
 
 Nickerson v. Wheeler . . 241 
 
 Nicol's case 437 
 
 Nicoll V. N. Y. & Erie R. Co. . . . 588, 652 
 
 Nietov. Clark 762, 765, 771, 774 
 
 N;nimons V Tappan 6.57 
 
 Niven v. Spikerman 12 
 
 Nixton V. Hyserott 272 
 
 Norris V. Irish Land Co 679, 680, 687 
 
 Norris v. Trustees 41, 44 
 
 Norris v. Staps 421 
 
 Norris V. State 412 
 
 North V. Forest 93 
 
 Northampton Bk. V. Pepoon 217, 233 
 
 280, 286 
 
 Northampton Bk v. Smith 216 
 
 North E. &S. W. R. Co., Ex parte 46 
 
 Northern Cent. R. Co. v. Basiian 280, 410 
 
 North Liberties V. Cresson 371 
 
 Northern R. Co. v. C. R. Co 563 
 
 Northern R. Co. v. Miller.. 62, 130, 145, 147 
 
 Northern, etc., Tea Co,, In re 198 
 
 North Hempstead v. Hempstead 10 
 
 North Penn. R. Co. v. Adams .353 
 
 North Penn. R. Co. V. Heilman 786 
 
 North Penn . R. Co. v. Robinson ... 479 
 North Riv. Bk. v. Aymar.227, 278,289,445, 730 
 
 Northrop v. Curtis 164, 429 
 
 Northrop v. Newton, etc., Turnp. Co .. 96 
 
 164, 197, 429 
 
 North Shore Ferry Co., Matter of ... 106 
 
 North Stafford Steel Co. v. Warth 132 
 
 North Staffordshire R. Co. v. Dale 781 
 
 PAGE. 
 
 North Western Distillery Co. v. Brant. 26 
 North Wliitehali v. South Whitehall .. 394 
 
 North Yarmouth V. Sklllings 41 
 
 Norwich, etc., Co. v. Tlieobald 119 
 
 Noves v. Loring 300 
 
 Noyes V. Hut & Burl. R. Co 4;« 
 
 Noyes V. Spaulding 100, 187, 197 
 
 Nugent V. Cin., etc., R. Co 443 
 
 Nugent V. Supervisors 351, 548,550 
 
 Oakesv. Hill 6 
 
 Oakes v. Turquand 440, 446 
 
 Oakland R. Co. v. Keenan .531 
 
 Oakley v. Paterson Bk 535 
 
 O'Brien v. Chic, etc., R. Co... 525 
 
 O'C'onnell V. Strong 795 
 
 Odd Fellows' Hall Co. V. Glazier 141 
 
 Odiorne v. Maxcy 293, 44S 
 
 O'Donald v. Evansville R. Co 129 
 
 O'DoiinelAi Alleghany R. Co '761 
 
 ODonnell V. Bailey 699 
 
 Ogden v. Murray 248, 253 
 
 Ogdea V. Raymond 300 
 
 Ogdenv. Roilo 114, 
 
 Ogdensburgh, etc., R. Co. v. Frost, 79, 146 : 
 
 148 
 Ogdensburgh, etc, R. Co. v. Vermont, 
 
 etc.,R. Co 390 
 
 Ogdensburgh, etc., R. Co. v. Wolley, 116, 133 
 
 Ogilvie V. Knoxins. Co 136,443 541 
 
 O'Harav Lexington, etc., R. Co 501 
 
 Ohio v. Cleveland, etc., R. Co 159 
 
 Ohio L. Ins. Co. v. Merchants' Ins. Co., 3.59 
 
 OhioL. &T. Co. V. Debolt . 699 
 
 Ohio Life Ins. & T. Co. v. Merchants' 
 
 Ins. & T. Co 115 
 
 Ohio, etc., R. Co, v. Davis. 538. 646 
 
 Ohio, etc , R. Co. v. McPherson, 266, 329, 350 
 
 Ohio, etc., R. Co. v Wheeler 495 
 
 Olcott V. Supervisors 571 
 
 Olcottv. Tioga Ry. Co.... 233, 285, 295, 297 
 
 386 
 
 Old Colony R. R. Co. v. Evans 335 
 
 Old Dominion Bk. v. McVeigh 44 
 
 Oldtown, etc.. R. Co. v. Veazie, 63, 119, 149 
 
 Oler V. Baltimore, etc., R. Co . 139 
 
 Oliverv. Liverpool Ins. Co 690 
 
 Oliver v- Northern Turnp. Co 730 
 
 Oliver v. AV ash. Mills 690 
 
 Oliver Lee & Co. 'sBk 64 
 
 Olmsiead V. Camp 569, 571 
 
 OMara v. Hudson R. Co 786 
 
 Oregon Cascade Co. V. Bailey 578 
 
 Oregon, etc., R. Co. v. Scoggin 443 
 
 Ormsby v. Vermont Copper Mining Co. 328 
 
 350, 6.53 
 
 Orono V. Wedgewood 506 
 
 Orrv. Bigelow 187 
 
 Orrv.U. S. Bk 717 
 
 Osbornv. Bk U. S 14, 410, 708 
 
 Osgood V. King .. 171 
 
 Osgood V. Laytin 543 
 
 Osgood V. Ogden 131, 248 
 
 Ossipee Manuf . Co. v. Canney 35, 123 
 
 143, 375 
 
 Oswego Bk. V. Babcock 346 
 
 Ottawa V. People 673 
 
 Ould V. Richmond 698 
 
 Overseers v. Mayor 286 
 
 Overseers v . Overseers . . 403 
 
 Overseers of Poor v. Sears 5 
 
 Owenv. Smith 668 
 
 Owen V. Van Ulster 243, 245 
 
 Owings v. Hall 294 
 
 Owingsv. Speed 13, 308, 410 
 
 Owsley V. Montgomery, etc., R. Co... 453 
 
 796 
 
 Oxford V. Bunnell 429 
 
 Oxford Iron Co. v. Spradley 386, 502
 
 Table of Cases Cited. 
 
 xli 
 
 Oxford Turnp. Co. v. Bunnel KiS 
 
 Pacific Bank V. De Roe 25 
 
 Pac. R. Co. V. Cass Co 637 
 
 Pao. R. Co. V. Chrystal COli 
 
 Pac. K. Co. V. Hufrlies C3, 140 
 
 Pac. R. Co. V. Lincoln Co 14 
 
 Pac. R. Co. V. Maeruire — 6!is 
 
 Pao. R. Oo. V. beely 60,252 
 
 Pagre v. Board of Trade 84 
 
 Paire V. Defries T95 
 
 Page V. Hardin 67f) 
 
 Pafie V. MItchel 4ii9 
 
 Paicev. Wallver ... 29ti 
 
 Paine, Ex parte .. 678 
 
 Paine v Guardians', etc., Union 404 
 
 Paine v Lalce Erie, etc., R. Co. 248, 554, 558 
 
 Paine v. Leicester 683 
 
 Paine V. Strand Union 380, 395 
 
 Paine v. Wright & Ind. & Bellefon- 
 
 taine R. Co 
 
 Painter V. Pittsburg 732, 
 
 Palfrey v. Paulding 
 
 Palmer v. Forbes 529, 635, 638, 
 
 Palmer V. Lawrence 131, 
 
 Palmer V. Medina Ins. Co 395, 
 
 Palmer v. Merrill 
 
 Palmer V. Ridge Mining Co 141, 
 
 Palmerton v. Huxford 
 
 Palmyra v. Morton 
 
 Panton v. Holland 
 
 Parish v. Wheeler 279, 375, 387, 
 
 Park Bk. v. Nichols 
 
 Parker v. Anderson 
 
 Parker V. Fdote 
 
 Parker V. Metropolitan, etc., R. Co... 
 
 Parker v. Thomas 
 
 Parker v. Scogin 
 
 Parkham v. Decatur County 
 
 Parks V. Evansville, etc.. R. Co 
 
 Parmly V Tenth Ward Bk 
 
 Parrot V. Byers 
 
 Parsons V. Goshen 287, 
 
 Partridge V. Badger 278,343, 
 
 Paschall V. Whitsett 650,657, 
 
 Passenger R. Co. v. Donahue 
 
 Passenger K Co v. Young 762, 
 
 Paterson V. Baumer .. 
 
 Patten V. Rea 
 
 Patten V. C'hicago, etc., R. Co 7.53 
 
 Patten v. North Cent. R. Co 605 
 
 Patterson v. Baker 242 
 
 Patterson v. Keystone, etc., Co .. 330 
 
 Paterson v. Mayor £39 
 
 Patterson v. Miss., etc.. Boom Co 574 
 
 Patterson V. Soc, etc . — 41 
 
 Patterson V. Wyomissing, etc., Co. .. 114 
 
 Paul V. Virginia 23, 347, 488, 490 
 
 Paulk V. S. W. R. Co .. 700 
 
 Paulmier V. ErieR. Co 480 
 
 Pawle's case 441 
 
 Pawletv Clark 4, 12, 20, C49 
 
 Payne V. Baldwin 649 
 
 Paynev. Elliott . 93 
 
 Payson V. Strever 206, 237, 295 
 
 Peabody V. Flint 203, 248 
 
 Peari'e V. Olney 654, 671 
 
 Pearcev. R. R. Co 225, 286, 383, .548 
 
 Pearson V. Morgan 278 
 
 Pease V. Peck 507 
 
 Peck V. Gurney 241. 303, 441, 446, 449 
 
 Peck V. Harriott ,. 271 
 
 Peckv. R. Co 416, 727, 731, 737 
 
 Pedrick V. Bailey 414 
 
 Peele V. Phillips 114 
 
 Peik V. Chicago, etc., R. Co 47 
 
 Peirce v. Somersworth 566, 671 
 
 Peudergastv. Stockton Bk 416, 424 
 
 Pendergast V. Turtou 146 
 
 F 
 
 PAOE. 
 
 Pendleton V. Army 713 
 
 Pendletf>n V. Bk 275 
 
 Peninsular Ry. Co. V. Thorp 5.57 
 
 Penniman V. Briggs. . 659 
 
 Pennock v. Coe . 339, 387, 631. 6.34, 638, 641 
 
 Penn. v. Wheeling Bridge Co 79 
 
 Penu. Bk. V. Commonwealth 28, 217 
 
 237, 239, 274 
 
 Penn. Canal Co. V. Graham 469 
 
 Penn. R. C"i>. v. Barnett .. 786 
 
 Penn. U. Co. v. Canal Co. 13, 39, 6", 339, 344 
 Penn. R. Co. v. Dandridge ... 838, 296, 3.59 
 
 Penn. R. Co. V. Henderson 479 
 
 I'enii. R. Co. V. Keller .... 480 
 
 Penn. R. Co. V. Kerr 461 
 
 Penn. R. Co. v. Kilgore 760 
 
 Peun.R.Co.v. Mct'loskey 479 
 
 Penn. R. Co. v. Philadelphia 712 
 
 Penn. R. Co. v. Vandever 457, 479 
 
 Pen n . R. Co . v . Weber 790 
 
 Penn. R. Co. V Zebe 479 
 
 Penn. Steam Nav. f'o. v. Hungerford . 435 
 
 Peuobscott Broom Co. v. Lamson..31, 41 
 
 66, .505, 6.50, 652, 659, 666 
 
 Penobscot R. Co. v. 15artlett 142 
 
 Penobscot R. Co. v. Dummer..ll7, 121, 142 
 
 180, 305 
 Penobscot R. Co. v. Dunn ... 121. 142, 218 
 Penobscot A.. Co. v. White .... 119, 121, 127 
 
 Pentz V. Fire Ins. Co 415 
 
 Pentz V. Stanton 282, 284 
 
 People V. American Institute 88 
 
 People V. Albany, etc., R. R. Co.. 100, 211 
 
 660 
 
 Peoiplev. Ballou 243 
 
 People V. Bk. Hudson 6-59 
 
 People V. Bk. Niagara 6.50 
 
 People V. Batchelor 312.316, 628 
 
 People V. Beigler 36 
 
 People V. Board of Met. Police.... 673, 676 
 
 People V. Bd. Supervisors 711 
 
 People V. Board of Trade 89 
 
 People V. Bogart 620 
 
 People V. Bristol, etc., Turnp. Co.. 620, 653 
 
 657 
 
 People V . Brooklyn 677, 690, 693 
 
 People V. College of California 73, 660. 664 
 
 People V. Cliica. Co 675 
 
 People V. Chic, etc., R. Co .. .. 688 
 
 People V. Clark 616 
 
 People V. Comrs 158 
 
 People V. County 355 
 
 People V. Crockett 413 
 
 People V. Detroit 678 
 
 Peoplev Devin .96,201 
 
 People V. Dispensatory, etc., Soc. ._. 650 
 
 People V. Easton 675, 677 
 
 People V. Elmore 191. 200 
 
 People V. Fairbury . . 667 
 
 Peoplev. Fishkill P. R Co 653 
 
 People V . Geneva College , . 613 
 
 People V. Grand, etc.. Plank B. Co 65 
 
 People V.Gray 3.55 
 
 People V. Green 677 
 
 People V. Hatch 673 
 
 Peoplev Hayden 598,605 
 
 Peoplev. Haad 677 
 
 People v. Hi I Hard 677 
 
 Peoplev. Hills 614 
 
 Peoplev. Hillsdale & Chat. Turnp. Co. 613 
 
 619, 653 
 
 People v. Hoffman 711 
 
 People V. Hudson Bk..611, 627, 650, 655, 659 
 
 People V. Jackson P. R. Co 44, 649 
 
 People V. Jackson T. Co , 658 
 
 People V. Jameson 675 
 
 People V. Judges, etc 674, 677, 679 
 
 People V. Kingston, etc., Turnp. Co... 616 
 620, 650, 654, 658
 
 xlu 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 People V. Law 779 
 
 People V. LoiKiks (>~1 
 
 People V. Manhattan Co 44, 650. G5:) 
 
 People V. Marshall 613, fi49 
 
 People V. Mariiii 317 
 
 Pen[)le V Mayiiard 13 
 
 People V. Mayor, etc., N. Y... 561, 56.5, 678 
 
 681, 711 
 People V. Med. Soc. of Erie .... 86, 88, 417 
 
 fi7t! 
 
 People V. Minor C78 
 
 People V. Mitchell 713 
 
 People V. Morris 40 
 
 Peoplev Mott 680 
 
 People V Nearing 571 
 
 People V. N.Y. Board of Underwriters. 86 
 
 87 
 
 People V. N. Y. Commercial Asso 87 
 
 People V. N. Y. Cotton Exchange .. .. 86 
 
 People V. N. Y. Gas L. Co 770 
 
 People V. N Y. Loan Commercial.. . 84 
 
 People V. Niagara Bk 613, 627, 655 
 
 People V. Olmstead 676 
 
 Peoplev. Pac. Mail Steamship — 177, 686 
 
 690 
 
 People V. Pearson 677 
 
 Peoplev. Pe(^k 315 
 
 People V. Peirce 693 
 
 People V. Phoenix Bk 654 
 
 Peoplev. Piatt 770 
 
 People V. Sailors' Snug Harbor.. 85, 89, 413 
 
 Peoplev Salem 570, 713 
 
 People V. Salomen 678 
 
 People V. St. Fransiscus Benev. Soc ... 83 
 
 88 
 People v. Sar. & Rens. R. R. Co . . . 616, 638 
 
 People v. Smith 569, .577 
 
 Peoplev Society, etc 652 
 
 People V. Steele 680 
 
 Peoplev. Supervisors 67-3, 677 
 
 People V. Sweeting 615, 6.55 
 
 Peoplev. Thompson 62R. 658, 673, 677 
 
 Peoplev. Throop... 216, 412, 414, 509, 6s0 
 
 68f), 688 
 People V. Tibbets . . . 413, 421, 433, 630, 635 
 People V. Troy, etc.. R. Co.... 676, 678, 680 
 
 People V. Turn. & Bridge Co .506 
 
 People V. Uticalns. Co.... 69, 338, 356, 613 
 616, 618, 630, 632 
 
 People V. Vein Coal Co 100 
 
 People V. Waite ■ 655 
 
 Peoplev. Walker 6.53, 6S6 
 
 People V. Washington Bk 050, 653, 655 
 
 Peoplev. Whitcomb 619 
 
 People V. White 566 
 
 People V. Williams ■•- 676 
 
 People V. Wren . . .. 41 
 
 People V. Young Men's, etc., Soc .. 88, 320 
 
 Peoples' Bk. v. Gridley 93 
 
 Peojiles' Ferry Co. v. Balch 117, 180 
 
 Peoples' Ins. Co v. Westcott 313, 3!6 
 
 Peoria V. Calhoun 417, 421 
 
 Peoria Bk. Ass. V Loomis — . 468 
 
 Peoria, etc., R. Co. v. Etting 119, 147 
 
 Peppin V Cooper .. 379 
 
 Percy v. Millandon .. 317, 331, 243, 345, 247 
 
 Perkins V, Church 114 
 
 Perkins v. Mijssouri 474 
 
 Perkins V. N. Y., etc., R. Co 442 
 
 Perkins V. Wash Ins. Co .... 233, 371, 300 
 
 Perkins V. White .527 
 
 Perleyv. Eastern R. Co 462. 466 
 
 Perrine v. Chesapeake, etc.. Canal Co. 58 
 66, 69, 339, 384 
 
 Perry V. Wilson 561 
 
 Peruvian R. Co. v. Thames, etc., Co .. 70 
 
 385 
 
 Petersburgh V. Matzker 356 
 
 Peterson v. Mayor 232, 380, 394 
 
 Petriev. Wright 173, 395, 401, 403 
 
 Petroleum Co. v. Weare 347 
 
 Phenix Bk. V. Curtis .505 
 
 Phenix Bk. v. Donnell 504 
 
 Philadelphia V. Field 41 
 
 Phila. V. Flanigen 286 
 
 Phlla.v. Given 260, .303 
 
 Phila. V. Lewis, etc., R. Co 355 
 
 Phlla. V. Head. R. Co 730 
 
 Phila., etc., R. Co. V. Bayless 696 
 
 Phila., etc., R. Co. V. Cornell 1.59 
 
 Phila., etc., R. Co. v. Derby . 43.3, 4.57, 738 
 
 763, 773, 778 
 
 Phila., etc.,R. Co. v. Hickman.. 122, 124 
 
 Phila., etc., R. Co. v. Quigley ... 434, 4,53 
 
 458 
 
 Phila., etc., R. Co. v. State 696 
 
 Phila., etc., K. Co. v. Steam Tow-Boat 
 
 Co 730 
 
 Phila., etc., R. Co, v. Wilt. 4.5T 
 
 Phila , etc., R. Co. v. Woelpper.. 388, 631 
 
 Phila. Sav. Bank case. 413 
 
 Phillips V. Allen 417 
 
 Phillips V. Berger 101 
 
 Phillips V. R. &S.R Co 761 
 
 Phillips V. Wickham 107, 413, 421, 656 
 
 666, 671 
 Phillips Limerick Academy V. Davis... 315 
 
 Phosphate of Lime Co. v. Green 233 
 
 Pickens V. Diecker 79.5 
 
 Pickering V. Pickering 526 
 
 Pickerin;^ V. Templeton 1.39 
 
 Picket V. Crook 474 
 
 Pickett V. Pearson 295 
 
 Pickett V. School Dist. No. 1., etc 249 
 
 Pickett V. White 678 
 
 Pierce v. Emery.. 215, 387, 530, 631, 634, 637 
 
 Pierce V. Gibson 93 
 
 Pierce v. Milwaukee, etc., R. Co... 388, 631 
 
 Pierce V. Partridge .5.30 
 
 Pierce v. St. Paul, etc.. R. Co 388 
 
 Pierce v. Somersworth 6.54 
 
 Pierce v. Thompson 259 
 
 Pierson v. Washington Bk 201 
 
 Piggv. Corder 526 
 
 Piggot V Eastern, etc., R Co 462 
 
 Pinkerton v. Man. &L R. Co 201 
 
 Piqua Bk. V. Knoop 44,699 
 
 Piscataqua Bridge v. N. H. Bridge, 553, 563 
 Piscataqua Ferry Co. v. Jones, 116, 134, 136 
 
 147, 443 
 
 Pitcher V. Hennessy 303 
 
 Pitts V. Shubert 295 
 
 Pittsburgh V. Scott .598 
 
 Pittsburgh, etc., R. Co v, Alle. Co . . 179 
 Pittsburgh, etc., R. Co. v. Biggar. 124, 130 
 
 Pitts . etc., Co. v. Clark. 173, 201 
 
 Pitts., etc., R. Co. V Dunn 787, 790 
 
 Pitts., etc., R. Co V. Gazzam 294 
 
 Pitts., etc , R. Co. V. Gilleland. .. . 739, 781 
 P'tts., etc.,R, Co. V. Graham... . 133, 144 
 Pitts., etc.R. Co. V. Hinds.... 764, 773, 774 
 
 Pitts., etc , R. Co. V. Methoen 793 
 
 Pitts , etc , R. Co. V. Pearson 793 
 
 Pitts , etc.,R. Co. V. Plummer 144 
 
 Pitts., etc., R. Co. V Stewart 133 
 
 Pitts, etc., R Co. V. Thompson 480 
 
 Plankroad Co. v. Arndt 128 
 
 Plankroad Ci. v. Husted 427 
 
 Plankroad V. Payne 147 
 
 Planters' Bk v. Alexandria Bk ... 654, 671 
 
 Planters' Bk. v. Leavens 184, 189 
 
 Planters' Bk. v. Rivingsville Cotton 
 
 Man. Co 115 
 
 Planters' Bk. V. Sharp 44, 239 
 
 Plate Man Co. V. Meredith 565 
 
 Piatt V. Archer 6.57 
 
 Piatt Receiver, etc., In re 664 
 
 Player v . Jones HI
 
 Table of Cases Ciied. 
 
 Xllll 
 
 Player V. Vere 417 
 
 Pleasant Bk., In re 61t 
 
 Plitt V Cox ms 
 
 Plymouth V. Jackson 41 
 
 Prymouth Bk. v. Bk Norfolk 430 
 
 Plymouth Chrisiiati Soc. v. Macomber, 3s 
 Plymouth R. Co. v. Colwell 529 
 
 Polar Star Lodge v. Polar S. Lodge, 248, 6U0 
 
 Police Jury V Britton 3ol, 386 
 
 Pohue Jury V. Shreveport 41 
 
 Pollard's Lessees V. Hagan ritjl 
 
 Pollock V. Nat. Bk 101, 105 
 
 Poineroy V. Bank 664 
 
 Poiiieroy V. N. Y., etc , R. Co 495 
 
 Pouchartraia R. Co. v. Paulding.. 241, 243 
 
 245 
 
 Pond V. Negus 426 
 
 Pondville Co. V. Clark 657 
 
 Poor V. European, etc., R. Co 248 
 
 Ptior V. Sears 27 
 
 Pore Gibson v. Moore 669 
 
 Port of Lond Assurance Co. case ... 316 
 Porter V. Androscoggin, etc., R. Co... 392 
 
 405 
 
 Porter v. Harris 677 
 
 Porter V. McOoUura 352 
 
 Porter V Necerrvis 483 
 
 Port V. Russell 248 
 
 Portland Bk. v. Apthorp 690 
 
 P(ii-tlaud R. Co. V. Graham 142 
 
 Portsmouth Livery Co. v. Watson. .485, 487 
 
 Potter V Bk. Ithaca.. .... 381 
 
 Potter V. Seymour 732 
 
 Pottstowii Gas Co. v. Murphy 605, 785 
 
 Poughkeepsie P. R. Co. v. Griffin .117, 13:i 
 
 Poultiieyv. Wells 394 
 
 Poulton V. London, etc., R. Co.451, 737, 7vi5 
 
 Powell V. Deveny 462 
 
 Powell V. Hannibal, etc., R. Co 793 
 
 Powell V. Newbursrh 410 
 
 Powell V. North Mo. R. Co. 
 
 .547, 558 
 
 Powell V Salisbury 46' 
 
 Powers V. Skinner 306 
 
 Praeger v. Bristol & E. Ry. Co 7-57, T58 
 
 Prater V. Miller 5^7 
 
 Pratt V Bacon 114 
 
 Pratt V. Jewett 660 
 
 Pratt V. Meriden Cutlery Co OS.; 
 
 Pratt V. Pratt .517 
 
 Pratt V. Putnam 446 
 
 156 
 
 Pratt V. Tilt 
 
 Presbyterian Cong. v. John's 
 
 President, etc., Jacksonville v. Mc 
 
 Connel 
 
 Preston v. Dubuque, etc., R. Co... 583, 605 
 
 Preston V Grand Coll. Dock Co 14:! 
 
 Preston V. Liverpool, etc., R. Co. .304, 3.59 
 
 424 
 
 Prettyman V. Supervisors 80 
 
 Priest V. Essex H at Mfg. Co 35 
 
 Priester V. Angley t — 795 
 
 Prouty V Lake Shore, etc., R. Co 5.58 
 
 Proutvv. Blichigan S., etc., R. Co. .. 179 
 Providence Bk. v. Bellines ... 39, 339, 705 
 
 Prov., etc., R. Co v. Wright 694 
 
 Provident Inst. v. Mass 711 
 
 Pulford v. Fire Dept. Detroit 424 
 
 Pullan V. Cincinnati R. Co. 215, 387, 635, 639 
 
 Pulliain V. Owen .527 
 
 Pullman v. Cincinnati R. Co 387 
 
 Pumpellyv Phelps 296 
 
 Purchase V.N. Y. Exchange Bk 100 
 
 Purtonv. N O , etc., R. Co 1.50 
 
 Putnam v. New Albany 124, 171 
 
 Putnam F. Scliool v. Fisher 505 
 
 Pynev. Great N. R Co 480 
 
 Quarman V. Burnett 435 
 
 Quimby V. Vt. Cent. R. Co 793 
 
 Quln V. Moore 479 
 
 (iulM v. 111. Cent. R. Co 761 
 
 Quincy Canal v. Newcomb 6.53 
 
 Quiner v. Marblehead Ins. Co. 103, 161, 429 
 
 Racine, etc., R. Co. v. Farmers' Loan 
 
 Co .560 
 
 Ry. Co. V. Allerton 216, 224 
 
 li. Co. V. Anthony 762 
 
 K. Co. V. Archer 780 
 
 R. Co. v. Aspell 756, 762 
 
 R. Co. V. Berks Co 695 
 
 R. Co. V. Blocher 472, 763 
 
 R. Co v. Canal Co 781 
 
 R. R Co. v. Chenoa 13 
 
 R Co V. Clinton Co 677 
 
 R. R. Co. V Davis .588 
 
 R. Co. v. Derby 764 
 
 R. Co. V. Douglass 28 
 
 R. Co. v. Finney 762, 764 
 
 R. Co. V. Goodwin 5.5? 
 
 R. Co V.Harris .559 
 
 R. Co. V. Hinds 7(i3 
 
 R. Co. V. Howard 375, 515 
 
 R Co. V. Hurst 472 
 
 R. Co. V. James 639 
 
 R. Co. V Kenney 563 
 
 R. Co. V. Kip 569 
 
 R. Co. V. Plumas Co 13 
 
 R. Co. V. Rodrigues 146, 444 
 
 R Co. V. Seeley... . 339 
 
 R. Co. V. Soutter 388, 631 
 
 R. Co. V. Stout 792 
 
 R. Co. V. Vandiver 702, 764 
 
 R. Co. v. Whitton 493, 5.59 
 
 R. Co. v. Wyandot Co 678 
 
 Railsback v. Liberty, etc , Turnp. Co.. 505 
 
 Raleigh, etc., R. Co. v. Reid 700 
 
 Ramsden v. Boston, etc., R. Co .. 457, 717 
 720, 724, 727, 731, 762, 794 
 
 Rand v. Hui)ble 157, 161 
 
 Randall V. Elwell 530 
 
 Randall v. Van Vechten . 233, 270, 284, 410 
 
 Raiidleson V. Murray 435 
 
 Ranger v. Great Western R. Co 433 
 
 Hanson v. N. Y., etc., R. Co 468 
 
 Kapson V. Cubitt 435, 735 
 
 Rawson v. N. Y. & Erie R. Co 469 
 
 Raymond v. Caton 148 
 
 Read v. Frankfort Bk ... 650, 664 
 
 Keadhead V. Midland 741 
 
 Reading V. Comrs 673 
 
 Reapers' Bk. v. Willard 46 
 
 Red d al 1 V. Bryan 571 
 
 Redge Turnpike Co. v. Staener 356 
 
 Redmond V. Dickerson 248 
 
 Red Riv. Bridge Co. v. Clarksville 566 
 
 Red River Turn. Co. v. State 796 
 
 Reed v. Bradley 410 
 
 Keed V. Jones. .. 333 
 
 Reed V. N Y. C. R. Co 741,751 
 
 Reedie v. London, etc., R. Co 734, 795 
 
 Reese v. Bk. Montgomery ( ,'o 182 
 
 Reese Riv. S. M. Co., In re 441 
 
 Reese Riv. Min. Co. v. Smith 448 
 
 Reformed, etc., Church v. Brown . ... 180 
 
 RegeiiK, etc., v. Detroit 271, 283, 392 
 
 Regents, etc., v. Williams 41, 649, 6.55 
 
 Rotritri v. Archdall 626 
 
 Reg V. Baines 681 
 
 Reg. V. Birmingham, etc.R. Com. 433, 453 
 
 688, 796 
 
 Reg. V Boucher 11 
 
 Reg. V.Cumberland 270 
 
 Reg. V. Deptford Pier Co 687 
 
 Reg. V. Derbyshire, etc., R. Co... 683, 687 
 Reg. V. Eastern Counties R. Co., 591,604, 687 
 
 Reg. V. Gen. Cem. Co 680, 684 
 
 Reg. V. G. N. of E. R. Co 453, 796
 
 xli' 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 Re«. V. Governora 423 
 
 lif-ii. V. Hereford (i72 
 
 Keg. V. Kendall 680 
 
 Heg. V. London, etc.,R. Co 680, 684 
 
 Ketc. V. Londonderry, etc.,Ry. Co .. 103 
 
 Reji. V. Longton Gas Co 45:! 
 
 Res. V . Mayor 453 
 
 Ret;. V. Midland, etc., R. Co 680 
 
 Reg. V. Pepper 62(5 
 
 Resr. V. Powell 6T2 
 
 Repr. V. Quale C2ti 
 
 Beg. V. Queen, etc., Co 530 
 
 Reg. V. Registrar, etc 24 
 
 Reg. V. St. Paul, etc 404 
 
 Reg. V. Saddlers' Co 423,679 
 
 Reg. V. Scott 796 
 
 Reg. V. Sheffield Gas Co 796 
 
 Reg. V. Slatter 026 
 
 Reg. V. Stephens 453, 798 
 
 Reg. V. Train 781 
 
 Reg. V. Trustees, etc 687 
 
 Reg. V. United Kingdon Electric TeL 
 qq ■ 453 
 
 Reg .' V. ' Victoria Park Co. '. '. '. '. '. '. 530,' 541', 684 
 
 Reg. V. White 378 
 
 Reg. V. Wing .103,680, 684 
 
 Reg. V. York North Midland R. Co 604 
 
 Reid V. Hibbard 293 
 
 Reid V.Jones 525 
 
 Keiff V. Connor 426 
 
 Reitenbaugh V. Chester Valley R. Co.. 592 
 
 Rensselaer, etc., P. R. Co. v. Bartow.. 117 
 
 131, 147, ISO 
 
 Rensselaer, etc., R. Co. v. Davis. . . 339, .569 
 
 577, .590 
 
 Rensselaer, etc., R. Co. v. Wetsel 119 
 
 Reprocity Bk., Matter of 649 
 
 Republic Bk v. Hamilton County.. 46, 704 
 
 Renter v. Electric Tel. Co 239, 396 
 
 Revere V. Boston Copper Co 308, 6G0 
 
 Rex V. Amery 31, 654, 6.59 
 
 Rex V. Anderson ... . 615 
 
 Rex V. Archbishop Canterbury 682 
 
 Rexv.Ashwell 30,426 
 
 Rex V. Atwood 312, 423 
 
 Rex V Barber Surgeons 421 
 
 Rex V Barker 672, 681, 683 
 
 Rex V. Bedford Level Corp 681 
 
 Rex V Bibb 401 
 
 Rex V. Bigg 269, 365 
 
 Rex V. Bird :..... 312, 423 
 
 Rex V. Bishop of Chester 682 
 
 Rex V. Bishop of Ely 509 
 
 Rex V. Carmarthen 654 
 
 Rex V. Chancellor, etc. , of Cambridge 681 
 
 Rex V. Chetwynd 312 
 
 Rex V. Conirs. of Excise 682 
 
 Rex V. Cooper, etc., Co 414, 423 
 
 Res V. Corp. Bedford 683 
 
 Rexv. Cudlipp 615 
 
 Rex V. Curghey 672 
 
 Rex V. East & W. I. Docks R. Co 780 
 
 Rexv Field C81 
 
 Rexv. Francis 611 
 
 Rex V. Gardner 492 
 
 Rexv. Gi never 423 
 
 Rexv. Grant 015 
 
 Rex v. Gray 659 
 
 Rexv. Grosvenor 652 
 
 Rex V. Gutch 435 
 
 Rex V. Haythorne 421 
 
 Rexv. Hill 313 
 
 Rex V. Hots man of Newcastle 680 
 
 Rex V. Justice of Buckingham 537 
 
 Kejc V. Justices of Yorksliire 684 
 
 Rex V. Langhorn 312 
 
 Rexv. Latham 615 
 
 Rex v. Liverpool 86 
 
 Rex V. London 454, 616, 681 
 
 PAfiE. 
 
 Rex V. London Assurance Co 100 
 
 Hex V . Marcli 679 
 
 lle.x V . M ay 326 
 
 Rex V. Mayor 083 
 
 Rexv. Medley ..716,790 
 
 Rex v. Merchant Tailors Co . .509, 680, 686 
 
 Rexv. Miller 421 
 
 Rex V. Monday 325 
 
 Rex V. AI orris 666, 779 
 
 Rex V. Norwich, etc 672 
 
 Rex V. O.xford 315 
 
 Rexv. Pasmore 652, 654, 667, 671 
 
 Rex V. Piiyne 615 
 
 Rexv. Pease 779 
 
 Rexv. St Katharine Dock Co 684 
 
 Rex V. Saunders 6.52 
 
 Rex V Slaverton 6.54 
 
 Rexv .Spencer 413, 420 
 
 Rex V. Stacey 612, 615 
 
 Rex V. Surgeons Co 681 
 
 Rex V . Swem, etc. , R. Co 687 
 
 Rex V. Trevener -■ 615 
 
 Rex V. Water- Works Co 677, 687 
 
 Rexv. Westwood . 30, 312, 412, 423, 426 
 
 Rexv. Wilts Canal Co 686 
 
 Rex v. Worcester Canal Co 684, 687 
 
 Rexv. York 681 
 
 Rexford V. Knight 605,668 
 
 Reynolds V. Glasgow Academy 405 
 
 Rheerav. Naugatuck Wlieel Co 506 
 
 Rhode V. Loutham 336 
 
 Rhodes V. <31eveland 717 
 
 Rhodes V. Salem, etc., R. Co .. 694 
 
 Rice V. Comm. Bk 618 
 
 Rice V. Courtis 92, 201 
 
 Ricev.Gove 283 
 
 Ricev. R. R. Co .. 339 
 
 Richard V. Warren 380 
 
 Richards v. Merrimack R. Co . ... 387, 631 
 Richards v. New Hampshire Ins. Co. . . 242 
 
 248 
 
 Richardson V. Burl., etc. , R. Co 502 
 
 Richardson V. N.Y. Cent. R. Co.. 786, 789 
 
 Richardson v. St. Jolins Ins. Co 410 
 
 Richardson v. St. Joseph's Iron Co 504 
 
 Richardson V. Scott, etc. , R. Co 284 
 
 Richardson v. Sibley 215, 387 
 
 Richardson v. Vt. Cent. R. Co. 560, 780, 783 
 
 Richardson V. Williamson 241, 303 
 
 Richie V. Ashbury Co 390 
 
 Richland County v. Lawrence County. 41 
 
 Richmond & Painter's cases. 143 
 
 Richmond V. Russell 735 
 
 Richmond Man. Co. v. Starks . . ... 293 
 Richmond, etc., R. Co. v. Louisiana R. 
 
 Co 39,339,552,563 
 
 Richmond, etc., R. Co. v. Snead 386 
 
 Rickett V. Metrop. Rv 781 
 
 Riddell v. Harmony F. Ins. Co 88 
 
 Riddiclcv. Anielin ... 18 
 
 Riddle V. Locks, etc., Co 31, 6.59 
 
 Ridgwayv. Farmers. . .216, 221, 273, 387, 418 
 
 Rigby V. Hewitt 462 
 
 Riggs V. Johnson County 685 
 
 Ring v. Johnson Co 407 
 
 Ripon V. Bittel 469 
 
 Risley v. Ind., etc., R. Co.. 237, 2.34, 3.38, 248 
 289, 419, 431 
 
 Ritterband V. Baggett 415 
 
 Rivere V. Boston Copper Co 659 
 
 Rives V. Montgomery, etc., R. Co 443 
 
 Rives V. R. R. Co 134 
 
 Roach V. Coe 294 
 
 Road cases . 426 
 
 Road V. Myers 407 
 
 Roberts V. Button 243,245 
 
 Roberts V. Ohio, etc., R. Co 142 
 
 Robertson V. Conrey 113 
 
 Robertson V. Ryckford 554
 
 Table of Cases Cited. 
 
 xlv 
 
 PAGE. 
 
 Robinson v. Bealle 274 
 
 Robinson v. Chartered Bk. 188, 3t)6 
 
 Robinson v. Lane - .. 609 
 
 Kobinson V. Nesbitt 92 
 
 Robinson v. N. Y. & E. R. Co 783 
 
 Robinson v. Pitts., etc., R. Co 121, 133 
 
 Robinson V. Sniitli 217, 5:i3 
 
 Kobson V. N. E. R. Co 755 
 
 Rochester l$k. v. Gray 40-1 
 
 RockRiv. Bk, v. Sherwood 370 
 
 Rookville & Wash. Turup. v. Maxwell, 35 
 
 148 
 
 Rockwell V. Elkhorn Bk 386 
 
 Roehler v. Mechanics' Aid Son 82, 676 
 
 Rogers V. Hastintrs, etc., R. Co 359 
 
 Rogers V. Huntington Bk 429, 5.33 
 
 Rogersv. Kneelaiid 271, 293, 449 
 
 Rogers v . Saunders 526 
 
 Rollins V. Cl.iy 567 
 
 Rollins V. Columbia Ins. Co 423 
 
 Ronan V. Fry 113 
 
 Rome V.Cabot 335 
 
 Rome Bk. v. Rome 351 
 
 Rome R. Co. v. Rome 696 
 
 Rood V. N. Y. C. 11. Co .782 
 
 Root V. Wallace 424 
 
 Rorke V. Thomas 547 
 
 Rose V. Truax ... 307 
 
 Rose V Turup. Co. 656, 666 
 
 Rosenback v. Salt Spring Nat. Bk 416 
 
 Rosenthal v. Madison, etc., R. Co 25 
 
 Ross V. Crockett 323 
 
 Ross V. Estates Investment Co 133, 448 
 
 Ross V. Lafayette, etc., R. Co 142 
 
 Ror^s V. Lane" 678 
 
 Ross V. Madison 337,401 
 
 Ross V. Ross 532 
 
 Ross V. South-western R. Co 91, 97 
 
 Rossmore V. Mowatt 558 
 
 Rothe V. Mil. R. Co 788 
 
 Rounds V. Del. & Lack. R. Co., 720, 723, 727 
 
 Rounds V. Smith 444 
 
 Roundtree V. McLain 526 
 
 Rouse V Mcore 4 
 
 Routh V. Thompson 449 
 
 Rowlev V. Empire [ns. Co 288 
 
 Royal Bk. of India's case 230 
 
 Royal Bk. Liverpool v. Gr. June. R 400, 405 
 
 Royal British Bk., In re 433,439 
 
 Royal Uritish Bk. v. Turquand 379 
 
 Royalton v. Turnp. Co 247 
 
 Royston v. Royston 561 
 
 Roxbury V Huston 506 
 
 Rubotton V. McClure 598 
 
 Ruby V. Abyssinian Soc 484 
 
 Ruby V. Portland 71 
 
 Ruck V. Williams 452 
 
 Rudolph V. Covell 526 
 
 Ruggles V. Washington County 293 
 
 Ruhn V. McAllister 93 
 
 Rundle V. Del. «& Raritan Canal Co 6 
 
 Runkle v. Wineraeler 680 
 
 Runj'on V. Lessee, etc 26 
 
 Russell V. Elliott 677 
 
 Russell «r. McLellan 30, 656, 666 
 
 Rust V . Low .588 
 
 Rutland, etc., Co. V. Proctor 384 
 
 Rutland, etc., R. Co. v. Thrall . .. 124, 153 
 
 Rutter V. Chapman 11 
 
 Ryan V. Dunlap 273 
 
 Ryan V. H. R. R. Co 738 
 
 Ryan V. N. Y. Cent. R. Co 461 
 
 Ryder V. Alton, etc., R. Co.... 1.3, 147, 172 
 
 190, 606 
 
 Sabin V. Vt. Cent. R. Co 781 
 
 Sabin v. Woodstock 201 
 
 Sacketts Harbor Bk. v. Lewis Co. Bk. . 381 
 Sadler V. Langhatn 570, 573, 576 
 
 Safford V. Wyckoff 338. S^S, .3«7 
 
 Sagory V. Diiboi-e 131,144, 116, 14S 
 
 St. Andrew's Bay Land Co. v. Mitchell. 271 
 
 410 
 St. Charles Nat. Bk. v. De Bernales.... 485 
 
 St. James' Church v. C. Redeemer 248 
 
 St. Jo. &D. C. R. Co. V. Chase 463 
 
 St. .lohn V. Benedict ...527 
 
 St. Johns V Erie R. Co 1.56 
 
 St. Joseph V. Rogers 351 
 
 St Louisv. Alexander 712 
 
 St. Louisv. Buffinger 423 
 
 St. Louis V. Ferry Co 705 
 
 St. Louisv. Kean . .. 675 
 
 St. Louis V. Manufac. Sav. Bk 43 
 
 St Louis v. Wel)er 68, 366, 414 
 
 St. Louis, etc., Ins. Co. v. Cohen 486 
 
 St. Louis, etc., Ins. Co. v. Goodfellow. 104 
 
 199, 4.30 
 
 St. Louis, etc., R. Co. v. Dalby 716 
 
 St. Louis, etc., R. Co. v. Manly 7b8 
 
 St. Louis, etc., R. Co. v. Montgomery. 783 
 
 St. Luke's Church v. Matthews 3U8, 414 
 
 St. Luke's Church V. Slack 6s5 
 
 St. Mary's Bk. v. St. John 242 
 
 St. Mary's Church, Re 311, 318 
 
 St. Mary's Church v. Cagger 394 
 
 St. Paul V. Coulter 417, 4'21 
 
 St. Paul R. Co. V. Parcher 389 
 
 Said V. New Orleans 43 
 
 Salem v. Richardson 303 
 
 Salem Bk. V. Caldwell 609 
 
 Salem Bk. v. Gloucester. 221, 226, 2-37, 239 
 287. 289, 295, 412, 418, 420, 425, 434, 4,50 
 
 Salem & H. T. pike Co. v. Lyme 58 
 
 Salem Iron Fac. v. Danvers 697 
 
 Salem Mill Dam Corp. v. Ropes 99, 118 
 
 121, 136, 142, 305 
 
 Salem R. Co. v. Tipton 654 
 
 Salisbury Mills V. Townsend 190 
 
 Salmon V. Richardson 241 
 
 Salomons V Laing 22.5, 339, 516 
 
 Salt Co. V. East Saginaw 704 
 
 Saltmarsh V. Planters' Bk 667 
 
 Sampson v. Bowdoinham Steam Mill 
 
 Corp 313, 317 
 
 Samuel V. Halladay 315, 822, 417,419 
 
 431, 485, 501, 511, 515 
 
 Samuels V. Cent., etc., Exp. Co 415 
 
 San Antonio V Lane 353 
 
 San Buenaventura, etc., Man. Co. v. 
 
 Vas.sault 211 
 
 Sanders v. Guardians of St. Neat's 
 
 Union 404 
 
 Sandford v. Eighth Ave. R. Co.... 7-2.3, 763 
 
 780, 795 
 San Diego v. San Diego, etc., R. Co.... 248 
 
 Sandilands, In re 400 
 
 Sandusky Bk. v. Wilbor 698 
 
 Sanford v. Worn 566 
 
 San Francisco v. Spring Valley Water 
 
 Works 15 
 
 San Francisco R. Co. v Bee'. .. 248 
 
 San Francisco, etc., R. Co. v. Cald- 
 well .571, 605 
 
 Sangamon & Morg. R. Co. v. County 
 
 of Jlorgan 693 
 
 Santa Cruz R. Co. v. Schwartz 119 
 
 Sargent v. Essex JIarineRy.92, 1(4,187. 419 
 
 Sargent V. Franklin Ins. Co .81, 96,100, 103 
 
 161, 164, 187, 197, 201, 429 
 
 Sargent V. Webster. ...217,255. 312,315, 325 
 
 Sater v. Burlington, etc., R. Co 605 
 
 Savagev. Ball 183 
 
 Savage v. Medbury 543 
 
 Savage v. Rice 283 
 
 Savage V. Walshe 659 
 
 Savage Man. Co v. Armstrong 487 
 
 Savings Bk. v. Davis 271, 313, 317, 394
 
 xlvi 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 SarinfTS Fund Soc. V. Phil 41 
 
 Siiwver V. lloiiir 669 
 
 Sawyer V. Methodist B. Churcli 325 
 
 Sitxloii V. Uncoil 467 
 
 S. & B. K. Co. V. L & N. W. 11. Co. . . 634 
 
 Scaith V. ChiidwicU 5:il 
 
 Sohiu-kelford v. New Orleans R. Co.259, 30.i 
 SL-liaeffer V. Missouri, etc., Ins. Co. .95, 115 
 
 171 
 Schenectady, etc., R. Co. v. Thatcher, 615 
 
 119 
 
 Schmidt V. Mil., etc., R. Co 792 
 
 SclKiif V. Bloomfield 316 
 
 Scholev V. Cent., etc., R Co 441,447 
 
 SchulUeld V. Union I5k 9(1 
 
 School Coinrs. v. Dean 27 
 
 Scliool Dist. V. Blaisdell 50li 
 
 School Dist. V. Thompson 355 
 
 School Di.st. V. Wood 390 
 
 Scliool Inspectors v. People 673 
 
 Schular V. Hudson R. Co 732 
 
 Schumni v. Seymour 323 
 
 Soliuylliin Nav . Co. v. Thoburn 605 
 
 Scott V, Cent., etc., R. Co 157 
 
 Scott V. De Peyster 241, 248, 252 
 
 Scott V. Eagle Ins. Co loij, 520 
 
 Scott V. Lord Hastings 92 
 
 Scott V. Johnson 2S5 
 
 Scott V. Scott 278 
 
 Scott V. Shepherd 402 
 
 Scotland County v. Missouri & N. R. 
 
 Co 43 
 
 Scripture v. Francestown Soap-stone 
 
 Co , 97 
 
 Scudder V.Trenton, etc.. Falls Co... . 509 
 
 Searl V. Lack., etc., R. Co 605 
 
 Sears v. Eastern R. Co 775 
 
 Sears v. IlotchUiss 243, 245, 514, 524 
 
 Searsburgh Turn. P. Co. v. Cutler. ... 504 
 
 Seaver v. Coburn 290 
 
 Secombe v . R R. Co 574 
 
 Secoii;] Nat. Bk. v. Lavell 348, 4S5 
 
 Sedgwick v. Stanton .. 307 
 
 Setrerv. Barkhamstead 468 
 
 Seibrecht V. New Orleans 286,335 
 
 Selbyv. Levee Corns 691 
 
 Selma V. Tenn. R. Co 1.32 
 
 Selnia, etc., R. Co. v. Harbin .5.56, 558 
 
 Selma, etc., R. Co. v. Tipton.. 117, 130, 145 
 
 147, i')04 
 Seneca County Bk. v. Lamb.. 215, 398, 413 
 
 417, 419 
 Serrell v. Derbyshire, etc., R. Co... 243, 245 
 
 Sessions V. Crunkiltou 574 
 
 Seton V. Slade 279 
 
 Sewall V. Boston Water Power Co 105 
 
 Sewall V. Brainerd 353 
 
 Sewall V. Chamberlain 182 
 
 Sewal I V. Lancaster Bk 429, 5.33 
 
 Sewall's Falls Br. v. Fisk ... 671 
 
 Seymour V. Canada, etc., R. Co ...388, 631 
 
 Sevmour V. Chiiago, etc., R. Co 753 
 
 Seymour V. Milford, etc., T. Co 529 
 
 Seymour v. Delancy 101, 526 
 
 Seymour V. Ely 675, 679 
 
 Seymour v. Greenwood.451, 457, 724, 726, 738 
 702, 764, 795 
 
 Seymour V. Hartford. 699 
 
 Seymour V. Tump. Co 79, 528 
 
 Seymour V. Wyckoff 294 
 
 .Shackleford v. Coffey 573 
 
 Shaler, etc., Co. V. Bliss 114 
 
 Sharp V. Mayor 436, 440, 4.57 
 
 Sharpe V. Bellis 285,290 
 
 Sharpless v. Philadelphia 711 
 
 Sharrod V. London R. Co 451 
 
 Shaughnessy V. Rens. In.s. Co .5-12 
 
 Shaver V Bear River, etc , Co 238 
 
 Shaver V. Ocean Mining Co 285 
 
 P.VOE. 
 
 Shaw V. Boylan 71 
 
 .~<liavv V. Dennis 711 
 
 Shaw V. Norfolk, etc., R. Co, .388, 622, 554 
 
 556 
 
 Shawv. Nudd 'Si^ 
 
 Shaw V. Spencer 101, 175 
 
 Shawmut Bk. v. Plattsburgh, etc., R. 
 
 Co a39 
 
 Shay V. Tuolumne Co. Water Co 107 
 
 Shea V. Sixth Ave R. Co 724, 730 
 
 Sheffield, etc., K. Co. v. Woodcock.... 172 
 
 Shelbyville, etc.,T. Co. v. Barnes .551 
 
 Sheldon v. Fairfax 395, 403 
 
 Sheldon Hat, etc., Co. v. Eickmeyer 
 
 Hat, etc., Co 368 
 
 Shelling V. Farmer 509 
 
 Shelton V. Darling 283 
 
 Shepard V. Buffalo, etc., R. Co .. 793 
 
 Shepherd V. Gillespie 156 
 
 Shepley V. A &St. L. R. Co 215, 387 
 
 Shepficrd V. Midland Ry. Co 757, 
 
 Sheridan v. Brooklyn, etc., R. Co 761 
 
 Kherley V. Billings 720, 762, 773, 795 
 
 Sherlock v. Winnetka 371 
 
 Sherman v. Fitch 233, 411 
 
 Sherman v. N. Y . Cent. R. Co 296 
 
 Sherman V. Smith 113, 649 
 
 Sherman V. West Stage Co 480 
 
 Shervvin V. Bugbee 13 
 
 Sherwood v. American Bible Soc 66 
 
 Shewalterv. Pirner 256 
 
 Shield V. JJdin. & Glasgow R. Co 735 
 
 Shieldsv. Ohio 554 
 
 Shipley V. Kymer 290 
 
 Sliipman V. JEtna Ins. Co 166 
 
 Shitz V. Berks Co 690 
 
 Shoe & Leather Bk. v. Brown 504 
 
 Shorter V Smith 503 
 
 Shortz V. Unangst 31 
 
 Shotwell V. Mali 207, 255 
 
 Shrewsbury V. Brown 482 
 
 Shrewsl)ury v. N Staffordshire R. Co. . 359 
 Shrewsbury, etc., R. Co. v. London, 
 
 etc., R. Co 225, 3;)9, 360, .527 
 
 Shropshire, etc., R. Co. v. Anderson .. 143 
 
 Shuetze v Bailey '336 
 
 Shurtz V. Schoolcraft, etc., R. Co .... 119 
 Sibley V. Carteret Club of Elizabeth... 89 
 
 Sicilies V. Wilcox 4.53 
 
 Sikesv Hatfield 260. 303 
 
 Silver Lake Bk. v. North. 381, 487, 023, 6.54 
 Silverthorne v. Warren R. Co. ... 675, 678 
 Simmons v. New Bedford, V. & U. S. 
 
 Co 774 
 
 Simonson V. Spencer 112 
 
 Simpson V. Denison 516 
 
 Simpson V. Westminster, etc., R. Co. 513 
 
 Simrali V. Mut. Ins Co 30 
 
 Siner V. Gt. West. R. Co... 758 
 
 Skellyv. Jefferson Branch Bk 098 
 
 Skinner V. Maxwell 543 
 
 Skowegan Bk. v. Cutler 191, 201 
 
 Slack V. Marysville, etc., R. R. Co.. 80, 711 
 
 Slaterv. Rink 469 
 
 Slaughterv. Comm 691 
 
 Slaw.son V. Loring 296, 298 
 
 .■^laymaker V. Gettysburgh Bk. 18.5, 187, 189 
 Slee V. Bloom ... 114, 414, 530, 6.53, 6.59, 671 
 
 Sleeper V. Franklin Lyceum : 90 
 
 Sleevant v. Anglo California Gold Min- 
 ing Co 145 
 
 Slim V. Croucher 299 
 
 Sloan V. Pacific R. R. R. Co 47 
 
 Sloan V. State . 40 
 
 Small V. Herkimer Manuf. Co.. 141, 146, 148 
 
 Small V. Owiiigs 336 
 
 Smart v. West Ham Union 396 
 
 Smead v. Indianapolis, etc., Co.287, 355, 387 
 Smith, In re 133,191
 
 Table of Cases Cited. 
 
 XlVll 
 
 PAGE. 
 
 Smith V. Alvord 323, 347, 300 
 
 Suiith V. American Coal Co 102 
 
 JSinitli V. Appletou 652, 670 
 
 Smith V. Bansrs 524 
 
 Smith V. Uanlv of Scotland 233 
 
 Smith V. Birmiusham C. Co 458 
 
 Nmith V. Birmingham Gas Co 43-t 
 
 S^mith V Hromley 373 
 
 Smith V. Burlev 697 
 
 Smith V. Cartwright 269 
 
 tjinith V. Cheshire 355 
 
 Smith V. Clark 352 
 
 Smith V. Comm 260, 31)4 
 
 Smith V. Congregatio'l Meeting House, 395 
 
 Smith V. Connelly 5i3 
 
 Smith V. Crescent City Co 91 
 
 Smith V. Eureka Flour Mills 66, 356 
 
 Smith V. Exeter 6V)4 
 
 Smith V. Helmer 598 
 
 Smith V. Holcomb 469 
 
 Smith V. Hull Glass Co 290 
 
 Smithv.Hurd 303,513 
 
 Smith V. Indiana, etc., R. Co 153 
 
 Smithy. Lansing 255 
 
 Smith V. Law 316,343 
 
 Smith V. London & S. W. R. Co 462 
 
 Smith V. Miss R. Co 654 
 
 Smith V. Morse 356 
 
 Smith V. Natchez Co 666 
 
 Smith V. Northampton Bk 273 
 
 Smith V. Overby 469 
 
 Smith V. Perry 337 
 
 Smith V. Plankroad Co. 24, 116, 134, 136, 152 
 
 654 
 
 Smithv.Poor 204, 303 
 
 Smith V. Prattvllle Manuf . Co.240, 243, 245 
 
 Smith V. Reese Riv. Co. 133, 441 
 
 Smithy Sac. Co 351 
 
 Smith V. State 628 
 
 Smith V. Tracy 234 
 
 Smoot y. Rea 526 
 
 Smout y. Ilberv 299, .301 
 
 Sinvth y. Darley 317, 3-.'2 
 
 Snowy Webber 194 
 
 Society, etc., y. Coite 711 
 
 Society, etc., v. New London 351 
 
 Soc. Visitation of Sick y. Com. 83, 87, 69 
 
 Somerby V. Buntin . 93 
 
 Somerville. etc., R. Co. v. Doughty — 606 
 
 South Baptist Soc. v. Clapp 392 
 
 South Bay, etc., Co. v. Gray.. .. 149, 482 
 
 Southampton Dock Co. y. Richards 142 
 
 Southampton & ItchinB. Co. y. South- 
 ampton 452 
 
 South Eastern R. Co. y. Hebblewhite . 143 
 Southern Life Ins. Co. y. Lanier.. 279, 375 
 
 381 
 Southern Penn. Iron Co. v. Steyens... 140 
 Southern Plankroad Co. y. Hixoa. 83, 89 
 
 133, 139 
 
 Southern R. Co. y. Jackson 700 
 
 Southern R. Co. y. Kendrick 468, 760 
 
 Souih.uayd y. Riiss . — ... .. Ill, 113 
 
 Sout.i, etc., K. Co., Ex parte 675 
 
 South Western R. Co. y. Georgia 554 
 
 South Western R Co. v. Paulk.... 693, 762 
 South Western, etc.,R. Co.y.Thomason 154 
 
 South wick V. Estes 795 
 
 South Yorkshire R. Co. y. Great N. R. 
 
 Co 225 
 
 Soutterv. Madison 653, 670 
 
 Sower V. Philadelphia 425 
 
 Spangler y. Indiana, etc., R. Co . 150, 504 
 
 Sparenburgh V. Bannatyne 493 
 
 Sparhawk V. Union, etc., R. Co 525 
 
 Sparks y. Proprietors, etc ]46 
 
 Sparrow y. Evansville, etc., R. Co 553 
 
 Sparta V. Lebanon, etc. , Turnp. Co 145 
 
 Spauldingv. Chicago, etc., R. Co. 783, 783 
 
 PAQE. 
 
 Spauldingv. Lowell 69, 287, 355 
 
 Spearv. Blairsville 5^0 
 
 Si.ear V. Crawford... 113, 114, 131, 146, 118 
 Spear v. lirant... . 206, 244, 246, 515, 520, 538 
 
 Spear y. Hart 1,55 
 
 Spearv. Ludd 216, 233 
 
 Speer V. Atlantic, etc., R. Co 559 
 
 Spencer V. E'eld 282 
 
 Spencer v. 111. Cent. R. Co.... 786, 783, 790 
 
 Spering's appeal 240 
 
 Spooiier V. Holmes 3.j3 
 
 Sprague V. Cacheco Manuf. Co 1G2 
 
 Spvague V. Gillette 271 
 
 Sprague v. Hartford, etc., R. Co £60 
 
 Sprague v. 111. Kiver R. Co 33, 143, 318 
 
 Spring V. Russell oiil 
 
 Springfield v. Conn. R. Co.... 553, 563, 565 
 
 Spriiiirfleld V. County Com'rs 681 
 
 Stacey v. Vermont Cent. R. Co . 578, 590 
 
 594, 600 
 
 Stackpolev. Arnold 282,298, 3;i6 
 
 Stainton v. Woolrych 780 
 
 Stamford Bk. v. Benedict 271, 273, 410 
 
 Stamford Bk. V. Ferris 531, 534 
 
 Stanley v. Chester & Birkenhead R. 
 
 Co 305 
 
 Stanley v. Stanley 113 
 
 Stanton V. Wilson 180 
 
 Starv. Camden R. Co .566 
 
 Starin V. Genoa .. 713 
 
 Stark V.Burke 113 
 
 Stark Bk. v U. S. Pottery Co 251, 387 
 
 Starkweather y. Bible Soc 373 
 
 State V. Accommodation Bk 44, 65 
 
 State V. Adams. 88,234 
 
 State V. Ancker 417 
 
 State V. Armstrong 18 
 
 State V. Ashley 611,616,619, 655 
 
 State V. Bailey 215, 505, 551, 664, 669 
 
 State V. Baltimore, etc., R. Co. 155, 159, 190 
 
 State V. Bk. Louisiana 221, 510 
 
 State V. Bk. of Maryland 388 
 
 State v. Binder 318 
 
 State V. Bonnell 212 
 
 State v. Bradford 650, 6r>2 
 
 Slate V. Bridgman 675 
 
 State V. Brown 655 
 
 State v. Buchanan 613 
 
 State V. Burbank 655, 673, 675 
 
 State V. Burnett 6.55 
 
 State V. Canterbury 563 
 
 State y. Carney 678 
 
 State y. Centerville Br. Co 6.54 
 
 State V. Cincinnati 653 
 
 State v. Clark 414 
 
 State V. ClarksvilleR. & T. Co 779 
 
 State v Claypool 543 
 
 State V. Coll. & H. P. R. Co 657 
 
 State v. Commercial Bk. . . 326, 273, 289, 419 
 431, 622, 649 
 
 Statev. Com'rs 63 
 
 State v. Common Council 80, 676 
 
 Statev. Conklin 413,415, 520 
 
 State V. Conlin 713 
 
 Statev. County Judge 678 
 
 State v. Curran 63, 420, 650 
 
 State v. Davenport . 714 
 
 State V. Dawson ... 30 
 
 Statev. Delafleld 351 
 
 State V. Douglas 42 
 
 State V. Dubuclet 678 
 
 State V. Duflfv 676 
 
 State V. Favell 653 
 
 State v. Ferguson 313, 414, 417 
 
 State V. Ferris. .. : 95 
 
 State V. Fisher 655 
 
 State v. Fourth N. H. Turnp. Co.. 6-53, 670 
 
 State V. Franklin Bk 158, 189 
 
 State v. Freeman 414
 
 xlviii 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 State V. Georpria Med. Soc 84, 87 
 
 Wtate V. Gleasoii 611, CI9 
 
 State V. GoU 508, fit?5 
 
 State V. Grand Trunk R. Co 7")9 
 
 State V. Hartford, etc., K. Co (587 
 
 State V. Haskell 'M2 
 
 State V. Hood CDS 
 
 State V. Hull f)77 
 
 State V. 111. Cent. K. Co 093 
 
 Slate V. J ersey City 425, 574 
 
 State V. Johnson Oil, (519 
 
 Stale V. Justinian Soc 82 
 
 State V. Kirkley 303 
 
 State V. Krebs 89, 70 
 
 State V. Lehre... 615, fi-'C 
 
 State V. La Granse 11. Co 5;i0 
 
 State V. Latliroji C91 
 
 State V. Ck. Louisiana 418 
 
 Slate V. Lynah C75 
 
 State V. McOrillus C73 
 
 Stale V. Mclver 191 
 
 State V. Maine Cent. 11. Co 554 
 
 ^la;e v. Manchester, etc., R. Co 792 
 
 State V. Mansfield 695 
 
 State V. Marlow . 615,619 
 
 Stale V. ^I ayor of Mobile 356 
 
 State V. Mayor of Newark 41, 43 
 
 Stale V. Merchants' lus. Co 653, 657 
 
 State V. Merry 611, 619 
 
 State V. Metz 560 
 
 State V. Miller 42 
 
 State V. Minion 696 
 
 Stale V. Miss., etc., R. Co.. 65b 
 
 State V. Morris, etc., R. Co.... 395, 450, 796 
 
 State V. Morristown 414 
 
 State V. Morristown F. Ins. Asso IBO 
 
 State V. New Orleans Gas L. Co. .. 6.52, 654 
 
 State V. Northern, etc., li. Co 3«8, 486 
 
 560, 631, 680 
 
 State V. N. Eastern R. Co ...676, 688 
 
 Stale V. Nnyes 28,44,46, 566 
 
 Slate V. Ogden 691 
 
 Stale V. Parker 713 
 
 State V. Parrott 779 
 
 btale V. Paterson, etc., T. Co.. 618, 625, 653 
 
 State V. Pawtucket T. Co 650 
 
 State V. Perrine 675, 678 
 
 Slate V. Person 42, 64 
 
 State V. Pindal 37 
 
 State V. Pinto City Clerk, etc 426 
 
 State V. Police Jury 678 
 
 State V. Powers . 698 
 
 State V. Real Estate Bk 611, 619, 637 
 
 Stale V. Rives 530,634,658 
 
 State V. St. Louis County Court 41 
 
 Stale V. St. Louis Ins. Co Oil, 619 
 
 State V. Saxton 676 
 
 State V. Schnierle 655 
 
 State V. Scott 779 
 
 State V. Sh ields 613 
 
 State y. Sibley 32 
 
 State V. Smith 191,261! 
 
 Slate V. Southern Minn. R. Co 42, 680 
 
 State V. Stebbina 3.56 
 
 State V. Stone 611, 619 
 
 Slate V. Taylor 615,619 
 
 State V. Tolan . . 655 
 
 State V. Tombeckbee Bk 44 
 
 State V. Trustees, etc 668 
 
 State V. Tudor 82, 107, 616 
 
 Stale V. Tunis C96 
 
 Stale V. Union Merchants' Exchange.. 416 
 
 State V. U rbana Ins . Co 653, 6.57 
 
 Stale V. Vt. fent. R. Co 716, 796 
 
 State V. "Wadkins 615, 619 
 
 State V. Warmoth 675 
 
 State V. Warren County 691 
 
 State V. Warren, etc., Co 687 
 
 State V. Warren Foundrj', etc., Co 191 
 
 State V. Washincton Library. . 
 Stale V. Wost Wis. R. Co. . .". 
 State V. Willianistown T. Co.. 
 Stale V. Wilinint^ton lir. Co... 
 
 Stale V. Wilson 
 
 State V. Zanesville, etc., Co. 
 
 PAGE. 
 
 . 69, 649 
 611, 619 
 
 649 
 
 .. .. 678 
 
 Slate Bk. y. Cape Fear Bk 44, 336 
 
 State Bk. y. Clark 80 
 
 State Bk. y. Comc3;ys 23:^ 
 
 State Bk. y. Giblis 80 
 
 State Bk. V. Knoop 40, 696 
 
 State i'.k. V. Kav. Co , 41 
 
 State Bk. V. Orleans N.iy. Co ,3.56 
 
 State Bk. y. State 611,610,628 
 
 State Bk. y. Tutt 531 
 
 State Board Agriculture y. Cit. Street 
 
 R. Co 357,381 
 
 State F. Ins. Co., In re 521 
 
 State Ins. Co. V. Sax 191 
 
 State Nat. Bk. y. Robadoux 657 
 
 Stale Nicholson Payem't Co. y. Mayor, 677 
 
 State Sav. Bk. V. Kellogg 108 
 
 Steam Nay. Co. v. Weed 381 
 
 Steamship Dock Co. v. Heron.. 91, 104, 200 
 
 429 
 
 Stearns y. Midland Ry. Co 4.54 
 
 Stearns V. Old Col., etc., R. Co 793 
 
 Stebbins y. Jennings 28 
 
 Stebbins V. Merritt 313, 315 
 
 Stebbins y. Phoenix F. Ins. Co ... . 104 , 187 
 
 198, 429 
 
 Steel V. S. Eastern R'y Co 735 
 
 Steele y. Oswego 403 
 
 Stein V. Mobile 711 
 
 Stelner's Appeal 635 
 
 Stephen y. Smith 7(53 
 
 Stephenson V. N. Y R. Co 279 
 
 Stetson V. City Bk 664 
 
 Stetson V. Kempston 69, 287, 355 
 
 Statson y. Patten 300 
 
 Stevens V. Buffalo, etc., R. Co 388, 434 
 
 450, 530, 631, 716 
 
 Stevens V. Davison 247, 525 
 
 Stevens y. Eden Meeting-House Asso., 313 
 
 Stevens y. Middlesex Canal 569 
 
 Stevens y. Midland Ry. Co 456, 459 
 
 Stevens y. Norris 306 
 
 Stevens y. Rutland, etc., R. Co 143. 204 
 
 Stevens v. South, etc., R. Co 516, 525 
 
 SLeven.s v. Watson.. 388 
 
 Stevenson y. Buxton 527 
 
 Steward y. Huntingdon Bk ... 279 
 
 Stewart v. Austin 241 
 
 Stewart y. Jones 538, 533 
 
 Stewart v. Say 108 
 
 Stiles v. Cardiff Steam Nav. Co 4.53 
 
 Stimson v. N. Y. C. B. Co 763 
 
 Stockton y Frye 469 
 
 Stockton Iron Co., In re 197 
 
 Stockton, etc., R. Co. v. Stockton 574 
 
 Stoddard y. Gilman 426 
 
 Stoddard V. Shetucket 159 
 
 Stokes y. Eastern Counties H. Co 741 
 
 Stokes y. Lebanon, etc., R. Co .. 115, 148 
 
 Stokes V. Scott County 713 
 
 Stone V. Berkshire Congregat'l Soc.,.. 395 
 
 Stone V. Hockett 188 
 
 Stone V. Wetmore 655 
 
 Stoneham Branch R. Co. v. Gould 119 
 
 Stoney v. American L. Ins, Co 
 
 Stoops V. Greensburgh P. R. Co... 504, 671 
 
 Storey y. Ash ton 734 
 
 Story V. Livingston , 508 
 
 Stowv. Wyso 313,317, 417 
 
 Stout V. Sioux City, etc., R. Co 791 
 
 Stogstown, etc., T. Co. y. Craver 333 
 
 Stratton v. Allen 255, 343 
 
 Strauss y. Eagle Ins. Co... 60, 335, 342, 3.")6 
 Strauss y. Pontiac 416
 
 Table of Cases Cited. 
 
 xlix 
 
 PAGE. 
 
 StrawbridKe V. Turner 467 
 
 Strickland V. Frichard C")9 
 
 Sirong's case — G76 
 
 Stroll},' V. Smith 99 
 
 StroiiK V. Wheaton I'iS 
 
 Stuart V. Loudon R. Co 2;i9 
 
 Slurges V. Bk. Circleville »71 
 
 Sturstes v. Board of Trade 79 
 
 Sturffesv- Knapp 53:^ 
 
 Sturges V. Stetson ... 35, 183, ~'1T 
 
 Sturtevaiit V. Alton 335, 403 
 
 Sturtevant v. Jacques — 174 
 
 Sturtevaiit V. Liberty 355 
 
 Stuyvesant V. JIayor 420 
 
 Sudl)ury V. Stearns — 676 
 
 Sullivan v. La Cro=se, etc.. Packet Co.. 486 
 
 Sullivan V. Union P. 11. Co 479 
 
 Sum V. Robertson .... ... 664 
 
 Sumner V. Marcy 353, 387 
 
 Supervisors v. Durant GS5 
 
 Supervisors V. Mississippi R. Co.. . 141 
 
 Sui)orvisors v. U. S 714 
 
 Sus. Bridge Co. V. Geii'l Ins. Co.. 387, 631 
 
 Sus. CanalCo. v. Wright 387,529, 598 
 
 Sutton V. Cole 293 
 
 Sutton's Hospital Case 4,27,392, 412 
 
 Suydam v. Morris Canal, etc 381 
 
 Siiydam v. Moore 649 
 
 Suydam V. Receivers 544 
 
 Suydam v. Williamson 635 
 
 Swan V. Grav 675 
 
 Swan V. North British, etc., Co... 103, 6V0 
 
 Swan V. Williams 569, 571 
 
 Swansea Dock (.'o. v. Levien 142 
 
 Swartwoiit V. Mich., etc., R. Co 35 
 
 Swil't V. Winterbothara 441 
 
 Switzerland lik. v Turkey Bk 658 
 
 Sweeney V. Old Col. R. Co 788, 789 
 
 Sweetzer V. Mead 383 
 
 Sword V. Cameron 731 
 
 S. Y. R. Co. V. Great N. R. Co 264 
 
 Sj'ke'sCase 341 
 
 Symonds V. Carter .. 476 
 
 Taber V. Cincinnati, etc., R Co 387 
 
 Tabor v. Mo. Vail. H. Co 789 
 
 Taft V. Hartford, etc., R. Co 178 
 
 Tuft V. Pittsford 302, 355 
 
 THK£;artv. West Maryland R. Co.. . 46, 180 
 Tailors of Ipswich V. Sherring. ... 414,653 
 
 Taintor v. Pendergrast 283 
 
 Talbot V.Dent 711 
 
 Talbot V. Hudson 570, 577 
 
 Talladega Ins. Co. v. Landers.. 29, 33, 68 
 
 Talladegalns. Co. v. McCuIlough 502 
 
 Tallmaa v. Svracuse, etc., R. Co 793 
 
 Talmadge V. tishkill Iron Co 243 
 
 Taliiiau-ev. Pell 542 
 
 Tarbell V. Page 113 
 
 Tar Kiv. Nav. Co. V. Neal 140, 504 
 
 Tarver v. Comrs. Court 677 
 
 Tattan V. G. Western R. Co 451, 458 
 
 Taunton Turnpike Co. v. Whiting 143 
 
 Taylor V. Ashton 437 
 
 Taylor V. Boston W. P. Co 716, 793 
 
 Taylor v. Burlington C. R. R. & M. Co. 646 
 
 Taylor V. Carondelet 423 
 
 Taylorv. Chichester, etc., R. Co 3.59 
 
 Taylor V. Fletcher 122 
 
 Tavlor v. Franklin Ins. Co 657 
 
 Taylor V. Grand Trunk R. Co 781 
 
 Taylorv. Griswold ...30, 107, 313, 413, 421 
 
 Taylor V. .TenUins 531 
 
 Taylor V. Miami Export. Co 217 
 
 Taylor V. Midland Uy. Co 105 
 
 Taylor V. Newberne 30, 37, 712 
 
 Taylor V. Porter 449,561, 577 
 
 Taylor V. Ry. Co 474 
 
 Taylorv. Robinson 239, 293 
 
 PAGE. 
 
 Taylorv. Shelton 300 
 
 Teaton V. Lynn 505 
 
 Teller v. Northern R. Co 480 
 
 Ten Eyck v. Del., etc.. Canal Co..0, 41, 566 
 
 Term. Bk. V. Dibrell 79 
 
 Tenney v. East. Warren Lumber Co. . 266 
 
 405, 411 
 Terro Haute Gas Co v. Teel. . . .4.58, 716, 796 
 
 Terre Haute, etc., R. Co. v. Karp 141 
 
 Terre llauto, etc. , R Co. v. McKinlcy. 781 
 Terre Haute, etc., R. Co. v. Vaii.ntta .. 763 
 
 Terrett V. Taylor 20,649, 654 
 
 Terrilv. Flower 293 
 
 Thatcher V. Bank 26, 27.5, 434, 450, 7!7 
 
 Thayer v. Boston 434, 716 
 
 Thayer V. Daniels 92 
 
 Thiiyerv. Middlesex Ins. Co .. 37, 308. 410 
 
 Thigpi-n V. Miss., etc., R. Co 443 
 
 Thomas V. Armstrong 538 
 
 Thomas V. Dickenson SiiO 
 
 Thomas v. Richmond 286, 302, 3'<5 
 
 Thompson V. Abbott 555 
 
 Thompson v. Bell 434, 4.50 
 
 Thompson v. Candor 33, a5, 2~i(i, 559 
 
 Thompson v, Davenport 2'I6 
 
 Thompson V. Erie, etc., R. Co 156, 179 
 
 Thompson v. Grand Gulf R. Co.... 598, 605 
 
 Thompson V. Guion 140 
 
 Thomitson v. Lambert 357 
 
 Thompson v. New Orleans & Carrolton 
 
 Co 717 
 
 Thompson V. N. W. R. Co 4.59 
 
 Thompson v. N. Y. R. Co 654 
 
 Thompson v. Tioga R. Co 285, 297 
 
 Thompson v. Waters 348, 485 
 
 Thompson V. Young 233, 281 
 
 Thomson v. Lee Co. . . .80, 351, 353, 652, 713 
 
 Thomson V. Pac. 11. Co 14 
 
 Thornburgh v. Newcastle, etc., R. Co. 133 
 
 136 
 Thornton v. Marginal Freight Rwy ... 43 
 
 Thorpe V. Hughes 133 
 
 Thorpe v. Rutland, etc., R. Co 690. 71:2 
 
 Thrasher V. Pike, etc., R. Co 98 
 
 Thurston V. Hancock... 609 
 
 Tibbets V. Knox & Lincoln R. Co 734 
 
 Ticonic Water Power Co. v. Lang 131 
 
 Tide Water Canal Co. v. Coster 553, 570 
 
 Tidrickv. Rice 294 
 
 Tilden v.Metcalf 483 
 
 Tilley v..H\idsonR. R. Co 480 
 
 Tilliterv. Phippard 734 
 
 Tilson V. Warwick Gas Co 303 
 
 Timms V. Williams 433 
 
 Tiuu'leyv. Providence 605 
 
 Tinkhamv. Borst 664, 689 
 
 Tinsman V. Belvidere, etc., R. Co — 6, 41 
 
 Tii)petsv. Walker 141, 181, 134, 533 
 
 Tisdale V. Harris 93 
 
 Titcomb V. Union Ins. Co 531, 533 
 
 Titus v. Ginheimer . . 638 
 
 Titus V. Kyle 298 
 
 Titus V. iMabee 529, 638 
 
 Tobey V. County of Bristol 536 
 
 Tobin V.Portland, etc., R. Co 752, 753 
 
 Toddv. Austin 571 
 
 Todhunter V. Walters 113 
 
 Toledo, etc., R. Co. v. Opperson...741, 751 
 Toledo, etc., R. ( o. v. Baddeley... 469, 757 
 Toledo, etc., R. Co. v. Goddard....7S6, 788 
 
 Toledo, etc., R. Co v. Riley 791 
 
 Tombigbee, etc., R. Co. v. Kneeland. 487 
 
 Tomlinson V. Branch 65,554 
 
 Tomlinson V. Jessup 65 
 
 Toiiica, etc , R. Co. v. McNeely 131, 305 
 
 Toomey V. London, etc., R. Co 753 
 
 Topping V. Bickford 36,410 
 
 Towar V. Hale 671 
 
 Town V. Bk. of Riv. Raisin ... 659
 
 Table ok Casks Cited. 
 
 Townv. Cheshire, etc., R. Co 793 
 
 Ti)«er V. Provideiioe, etc., K. Co 703 
 
 Towle V Sleveiisoi) 20,1 
 
 Towii.seiid V. Urown. 33!) 
 
 'I'ownsend V N. Y. Cent. R. Co 474 
 
 Tracv V. N. Y. C. R. Co 793 
 
 Tricyv. Tahnajre 379, 375, 381 
 
 Tracv V. Yato.s 118 
 
 Traders' r5k. V. Tlioraas 009 
 
 Tra.sU V Ma^ruire 698 
 
 Treadwell v. Salisbury Man. Co. . 315, (iOO 
 
 Troti V. Warren i.'33 
 
 Troivv. Vt. Cent. R. Co 793 
 
 TV-v V. Milt. Ulv. 690 
 
 Troy, etc., R. Co. v. Kerr, 145, 147, 215, 311 
 
 387, 634 
 Trov, etc., R. Co. v. Newton .... 117, 119 
 Trov, etc., R. Co, v.Tibbits.. 137, 133, 147 
 Troy T. & R. Co. v. McChesney, 146, 153, 333 
 
 374 
 
 Trumbull v. Mut. F. lus. Co 115 
 
 Tru.stees V. Cherry 386 
 
 Trustees, et(!., v. Flint 71, 437 
 
 Trustees V. Indiana 44 
 
 Trustees V. Parks 37 
 
 Trustee.s V. Peaslee 35, 69, 338 
 
 Trustees v. lieneau 36 
 
 Trustees V. State 673 
 
 Truiidy v. Farrar 410 
 
 Tuberville v. Stamp 734 
 
 Tucl<er V. Rex 313 
 
 Tuckerv. Woulsey... .. 730 
 
 Tucker Manuf. Co. v. Fairbanlss.. 396, 398 
 
 Turnery. Ciav 537 
 
 Turnery. G. W. R. Co 776 
 
 Turner V. North Beach R. Co 473 
 
 Turquand V. INIarshall 343, 345 
 
 Turnpike Co. v. I m lay 145 
 
 Turnpike Co. y. McKean 116 
 
 Turnpike Co. V. Phillips 1.33 
 
 Turnp. Co. v. State 653 
 
 Tuttle y. Walton 104 
 
 Tyler V. Beacher 570, 576 
 
 Tyrrell y. Bk. London 139 
 
 Tyrrell y. Washburn _. 114 
 
 Tyson V. Watts .. .. 537 
 
 Underbill V. Trustees 354 
 
 Underbill y. Newport Lyceum 458, 717 
 
 Union Bk. y. .Jacobs 386, 39'i 
 
 Union Bk. y. Knapp .345, 509 
 
 Union Bk. v. Laird 91. 96, 104, 198, 439 
 
 Union Bk. y. McDonough 443, 450 
 
 Union Bk. y. State 104, 189, 695 
 
 Union Branch R. Co. v. East Town R. 
 
 Co 505 
 
 Union Bridge Co. v. Troy, etc., R. Co., 578 
 
 Union Co. y. Bordelon 691 
 
 Uniim Hotel Co. V. llersee ... .. . 138 
 
 Union Improvement Co. v. Comm 64 
 
 Unionlns. Co. v. Keys 338 
 
 Union Loclcs & Canals v. Towne.. 115, 140 
 
 143 
 Union Mining Co. y. Rocky Mt. Nat. 
 
 Bk 336, 843 
 
 Union Mut. Ins. Co. y. Ossood 504 
 
 Union Mut. Ins. Co. y. Wilkinson 389 
 
 Union Pac. R. Co., Re 253 
 
 Union Pac, etc., R. Co. y. Lincoln 
 
 County 3t)6, 533 
 
 Union, etc.,R. Co. y. East Tenn. R. 
 
 Co 500 
 
 Union Springs Co. y. Jenkins 337 
 
 United Soc. v. Underwood.... 243, 345, 347 
 
 U. S. V. Amedy 10, 340 
 
 U. S. V. Bank of Columbus 377 
 
 U. S. y. Brown 304 
 
 U. S y. Columbian Ins. Co 99 
 
 U. S. y. County Co 676 
 
 U. S. V. Devaux 493 
 
 U. S. y. Hart 413, 431 
 
 U . a. V. Haskins, .. ,504 
 
 U. S V. Kirkpatrick 230 
 
 U. S. V. Keokuk 675, 685 
 
 U. S. y. New Orleans, etc., R. Co. 388, 6,39 
 
 U . S . y . O wen 373 
 
 U S. V. Van Zandt 330 
 
 U S. V. Vaughn 103, 187 
 
 U. S. Bank v. Dallam 113 
 
 U. S. Bank V. Dandridge 39, 219, 233 
 
 370,274, 401, 403,40:, 410 
 
 U. S. Bank y. Dunn 274,277 
 
 U. S. Bank V. btearns 5i!6 
 
 U. S. Trust Co. v. Brady 13,15,371 
 
 University of Md. y. Williams. 6.52, 654, 6.59 
 Univ of Vermont, etc., V. Baxter. ... .555 
 
 Updegrafif y. Evans ... 61.5,619 
 
 Upton V. Hansbrough 443, 447 
 
 Upton y. Trebilcock 137 
 
 Ulicay. Churchill 1.58 
 
 Utica Bk. V. Hillard 509 
 
 Utica Bk. y. Magher 386 
 
 Utica Bk. y. Smalley 96, 154, 429, 504 
 
 Utica Bk. y. Smedes 69 
 
 Utica Ins. Co. V. Bloodgood 2.57, 308 
 
 Utica Ins. Co. V. Scott 69 
 
 Van Allen v. Vanderpool 273 
 
 Vancey. Erie R. R. Co 452, 458 
 
 Vance V. Farmers" Bk 18 
 
 Vandall y. South San Francisco Dock 
 
 Co 68, 358 
 
 Vandenburgh y. Truax 463 
 
 Vanderbilt v. Garrison 204 
 
 Vander[)Ool y. Husson .. 737 
 
 Van Doren y Robinson 523 
 
 Van Hook y. Somerville Man. Co 2.55 
 
 Van Hook y. Whitlock 114 
 
 Van Sandan y. Moore 7, 23 
 
 Vansandsv Middle.sex Co. Bk. 91. 96, 104 
 
 Van Schaick y . Hudson R. Co 789 
 
 Van Wickle y . Cam . & Amboy R. Co . . . 574 
 
 V rickv.Smith ... 561, 577 
 
 Varnell v. Thompson 96 
 
 Vawterv. Ohio, etc., R. Co.... 133, 136, 443 
 
 Vermont y. Boston, etc., R. Co 634 
 
 Vermont Cent. R. Co. y. Clayes. .. 117. 305 
 Vermont, etc., R. Co. y. Vermont C. R. 
 
 Co 654 
 
 Vernon Soc. V. Hills 2.56,654 
 
 Verplanck y. Mercantile Ins. Co.. 253, 653 
 
 Vicksburgh Co. y. Ouchita 508 
 
 Vicksburgh K. R. y. McKean, 116, 118, 135 
 
 443, 474 
 Vincennes University V. Indiana .. 19, 668 
 
 Vincent v. Nantucket 287, 355 
 
 Virginia City v. Mining Co 13 
 
 Virginia, etc., S. Nav. Co. v. U. S 26 
 
 Vogle V New Granada Canal, etc., Co 
 
 of N. Y 486 
 
 Von Hoffman y. Quincy .. 670, 714 
 
 Von Schmidt y. Huntington 93, 660 
 
 Vosey. Grant 206, 244, 246, 520, 538 
 
 Wade v. American Colonization Soc. . 371 
 
 Wade V. Leroy 468 
 
 Wadleigh v. Gilman 414 
 
 Wadsworth y. Manning 526 
 
 Wait y. Ferguson 114 
 
 Waitev. Mining Co 366, 374, 378 
 
 Wakeman V. Dalley 341 
 
 Waldo v. Chic, etc, R. Co 1.05, 413 
 
 Wales y. Stetson 44, 649 
 
 VValkery. Bk. N. Y 285,300 
 
 Walker y. Cincinnati 713 
 
 Walker y. Devereaux 118, 130, 3:JI, 515 
 
 Walker y. Fleming 256 
 
 Walker v. Kentucky Bk 303, 403
 
 Table of Cases Cited. 
 
 li 
 
 PAGE. 
 
 Walker v. London & Blackiiall Ry. Co. 683 
 Walker v. Mobile, etc , K. Co., 134, 13(5, ay3 
 
 Walker V. Sherman 640 
 
 WalKer V. South-east. Ky. Co Ti'-i 
 
 Walker V. Taylor 175 
 
 Walker V. Warren 471 
 
 Walkley v M u-oatine 675 
 
 Wallace V. Mayor 474 
 
 AValla<-e V. San Jose 30:i 
 
 WalliniTford Manf. Co. v. Fox 305 
 
 Walsh V. Sexton ...176 
 
 AValter V. Belding 676 
 
 Walthani Bk v. Walthara 184, 18!) 
 
 Walworth v. Brackett 35 
 
 AValvvorth Co. Bk. v. Farmers' L. & T. 
 
 Co ^39 
 
 Wanstall v. Pooley 793 
 
 Ward V. Arredondo 495 
 
 Ward V. Griswoldville M. Co 147, 538 
 
 Ward V. Sea Ins. Co 653, 657 
 
 Ward V Soc. of Attorneys 536, 63S 
 
 Warden v. Eichbaiim 39 1 
 
 Warden, etc., V. Hart 20 
 
 Ware V. Barataria Canal Co 443, 450 
 
 AVare V. Grand, etc., R. Co -535 
 
 Ware v. Regents Canal Co 781 
 
 Waring V. Catawba 303 
 
 Warner V. Daniels 34 
 
 Warner V. Mower. .313, 316, 388, 393, 417 
 
 Warner V. N Y. C. R. Co 786, 783, 793 
 
 AVarner Academy V. Starrett 483 
 
 Warren V. Lynch 39,' 
 
 Warren v. O-ean Ins Co 233, 274, 410 
 
 Warren Bk v. Snfifolk Bk 346 
 
 Warren Man. Co v, Etna Ins. Co 488 
 
 Washington Bk. V. Lewis 279 
 
 Washington, etc., Soc. V Bacher 86, 88 
 
 Washington College V. Dnke 505 
 
 AVashington Co Bk. v. Lee 37 
 
 Washington F. Ins Co. v. Davidson.. 289 
 
 Wash. Univ. v. Rouse 699 
 
 Wash. & B T. R. v. Maryland 6.53 
 
 Wash., etc , R. V. State 650 
 
 Waterbury V. Clark ...484 
 
 \Vaterl)nry V. Express Co B'^ 
 
 Waterbury v. ^Merchants'' Union Ex.Bk. .535 
 Warerford, etc.. Turn. Co. v. People. 796 
 
 AVat"rhouse V. Jamieson 1:33 
 
 Waterman v. Conn. & Pass. R. R. Co... 783 
 
 Waterman V. Troy, etc., R. Co 158 
 
 Waters V. Leech 414 
 
 Waters V. Howard 536 
 
 Watervliet Bk. V. White 285 
 
 Water W. Co. v. Burkhart 570 
 
 Watkins V. Cheek 173 
 
 Watkinsv E.iraes 180 
 
 Watkinsv. G. Northern Ry 607 
 
 Watkins V. Ilolman 507 
 
 Waikins V.Walker Co 564 
 
 Watson V. Bennett 395, 458 
 
 Watson V. Harlem Nav. Co .534 
 
 Watson V. Pittsburgh, etc., R. Co 605 
 
 Wausaw Broom Co. v. Plumer 484 
 
 Way man v. Southard 685 
 
 AVeaverv. Barden 161, 189 
 
 AVebb v Browning 336 
 
 AVebb V. Graniteville Manuf . Co 194 
 
 AVebb v. Manchester, etc., R. Co 590 
 
 AVebb v. Moler 654 
 
 AVebb v. Kidgelv 100,331 
 
 Webb V. Rome, W., etc.. R. Co.. 783 
 
 AVeher v . Lee County 685 
 
 AVebsrerv. Upton 191 
 
 AVeckler v. First Nat. Bk 68, 344, 3-58 
 
 Weed V. Chase 446 
 
 Weed V. Panama R Co. 719, 763, 764,773, 776 
 
 795 
 
 AVeeden V. Town Council . 671 
 
 AVeeks V. Propert 241,303 
 
 PAGE. 
 
 Weir V. St Paul R. Co 571 
 
 Weisenberg V. Appletiin 469 
 
 AVelch V. Durand 474 
 
 Welch V. Hoover 3:36 
 
 Welch V. St». Genevieve 669 
 
 WellandR. Co. V. Blake 143 
 
 AA'ells V. Canton Co 637, 6+5 
 
 Wells V. Gates 10, 13, 2.56 
 
 Wells V. Somerset, etc., R. Co. 564 
 
 Wells V. Stackhouse . 675 
 
 Wertv Crawlordsville, etc ,R. Co.133, 1.35 
 
 West V. Blake 569 
 
 West V. Forrest 467 
 
 West V. Madison Co Ag. Board 68,358 
 
 West V. N. J., etc., R. Co 787 
 
 West Branch Bk. v. Armstrong .534 
 
 Westbrook V. North 601 
 
 Western Bk. Scot. v. Addie.. 440, 447, 4.58 
 Western Bk. Scotland v Bairds .. 243, 245 
 
 AA'estern, etc., R. Co. v. Avery 144 
 
 Western, etc., R. Co. v. Babcock .536 
 
 Western, etc., R. Co. v Johnston. .538, 533 
 Western, etc., R. Co. v. Nolan.. 513, 533 
 
 Western Sav. Bk v. Phila 670 
 
 Western, etc., Soc. v. Phila 283, 337 
 
 AA''estern Union Tel. Co. v. Mayer 347 
 
 A\"est India Docks, etc., v. Gattke . . 607 
 
 Westoby V. Day 93 
 
 WestoQ V. Bear River, etc., Mining Co. 200 
 
 201 
 
 AVeston V. Charleston 699, 708 
 
 Weston V. Hunt 5 
 
 Weston Bk. v Gilstrap.. 233 
 
 West Phila. Canal Co. v. Tones. . 171, i;3 
 West Riv. Bridge V. Dix.. 553, 563, 566, 569 
 
 690 
 West Vir. Transp. Co. v. Volcanic Oil, 
 
 etc., Co 574 
 
 AVest Wisconsin R. Co. v. Sup., etc 63 
 
 AVetumpka, etc., R. Co. v. Bingham... 33 
 
 AVeyant V. N. Y & Harlem R. Co 733 
 
 AVeyinire v. Wolf 791 
 
 Weymouth V. Wash. R. Co 347 
 
 Whatman V. Pearson 733 
 
 AVheatonv. N. Beach R. Co 469 
 
 AVheeler, In re 2;3 
 
 Wheeler V Nevins 336 
 
 Wheeless V. Sec. Nat. Bk 4.53 
 
 AVheelock v. ' oston, etc., R. Co 788 
 
 Wheelock v. M.mlton 189, 484, 6o4 
 
 Wheelock V. Young 564 
 
 Whelpleyv Erie R Co 525 
 
 AA'hitaker v. Hertford, etc. , R. Co 353 
 
 Whitcomb V. Vt.. etc., R. Co 607 
 
 White V. Campbell 667 
 
 White V Derby Fishing Co 239, 365 
 
 Whitw. Franklin Bk 279, 375 
 
 Whitev. Ilaight 543 
 
 AVhite V. Lester 68 
 
 White V. Madison 299 
 
 Whitev. Mayor, etc 414 
 
 White V. New Orleans 338 
 
 White V. Schuyler 101 
 
 White v. Skinner 300 
 
 White V. Syracuse, etc., R. Co 63, 713 
 
 AVhite V. 'I allman 417 
 
 White y. A^ermont, etc., R. Co 351 
 
 AVhite V. Westport Cotton Man. Co.... 239 
 
 4a3 
 
 White's Bk. v. Toledo Ins. Co 66, 356 
 
 AVhiiehead V. Tuckett 278 
 
 Whitenian V. R. Co 433, 458, 717 
 
 White Mountain R. Co. v. Cooke 131 
 
 AVhite Mountain R. Co. v. Eastman 133 
 
 147, 218 
 
 Whitesell v. Northampton Co 695 
 
 White Riv. Turnp. Co v. Vermont Cent. 
 
 R. Co 5.53,566,569 
 
 Whitewater &C. Co. v. Valette 388
 
 lii 
 
 Table of Cases Cited. 
 
 PAGE. 
 
 Whitewell Hnnd &Co. v. Warner. .418, 430 
 AVhitfield v. S. E. R. Co... 434, 453, 455, 458 
 
 71G, 7!t(i 
 
 Wliitford V. Panama R. Co 4T9 
 
 Wliitiiitfv. Shehoyefan R. Co 713 
 
 Wliitinan Mining Co. v. Baker.. 66, 35fi, 3T3 
 
 Whitney Anns Co. v. Barlow 357, 391 
 
 Whittakerv. Man. & S. K. Co 758 
 
 Wliittington V. Farmers' Bk 50fi 
 
 Whitvvell V. AVarner 217,831, 339, 255 
 
 Wi(;klo V. Rv Co 504 
 
 Wicklerv. First Nat- Bk 335 
 
 Wierv, Bush COO 
 
 Witrgins v. Preerville Baptist Church.. 313 
 Wight V. Shelby, etc., R. Co.. ..107,11(5, lis 
 
 134, 443 
 
 Wilbur V Glen Iron Works 144 
 
 Wilcox, Ex parte 335, 413 
 
 AVllcox V. Rome, etc., R. Co 7.SS 
 
 Wild V. Bk. Passamaquoddy.. 227, 233, 273 
 
 28i), 431 
 
 Wiidman V. Wildman 1H4 
 
 Wild.sv. N. Y. C, etc.,R. Co. ... 788, 790 
 Willamette Freighting Co. v. Stamus. . 142 
 
 375 
 
 Willard V. Nevvburyport 69, 272 
 
 Willcocks, Ex parte 96,319 
 
 William's case 545 
 
 Williams V. Ausrusta 413 
 
 Williams V. Babcock. 543 
 
 Williams v. Bk. of 111 613, 671 
 
 AVilliams V. Bk. of Michigan 12 
 
 Williams V. Bpaumont 483 
 
 Williams V. Cheney 30, 278 
 
 Williams v. Chester K. Co 281 
 
 Williams V. Christian Female College.. 310 
 
 Williams v. Colleee, etc., R. Co 177 
 
 AVilliams V. Creswell 348 
 
 Williams v. Detroit 691 
 
 Williams V. Great W. R. Co. 421 
 
 Williams V. Gregg 241 
 
 Williams V. Luneiiburgh 318 
 
 Williams V. Mechanics' Bk 191 
 
 Williams V. Planters' Ins. Co 413 
 
 AVilliams v. St. George's Harbor Co 233 
 
 AVilliams V. School Dist 571 
 
 Williams V. Walbridge 277 
 
 Williamsburgh Ins. Co. v. Frothing- 
 
 ham 30 
 
 Williamson v. New Albany, etc., R. Co. 388 
 
 631 
 Williamson v. N. J., etc., R. Co.... 388, 522 
 
 Williamson v. Smoot 487, 532 
 
 Williamson V. Wadsworth 114 
 
 Willing V. Morris Canal Co 631 
 
 Williiiks V. HoUingsworth 293 
 
 AViliisv. LongI R. Co 701 
 
 AVillisv. Murray 312 
 
 AVilliston v. M . S. & N. J. R. Co 178 
 
 Wilmington, etc., R Co. v. Reid .... 700 
 AVilmlngton, etc., R Co. v. Saunders.. 37 
 AVilmington, etc., R. Co. v. Stauffer .. 605 
 
 AVilmot V. Mayor, etc., Coventry 267 
 
 AVilson V. Blackbird Creek Marsh Co.. 570 
 
 AVilsoii V. Cent. Br. Co 660 
 
 AVilson V. Marsh Co 569 
 
 Wilson V. Meiers 214,299 
 
 Wilson V. Beverly . 795 
 
 Wilson V. Poulter 449 
 
 AVilson V. Prop, of Cent. Bridge ... 98, 600 
 
 AVilson V. Tesson 651 
 
 AVilson V. Tnmman 293 
 
 AVilson V. AAMIliams 277 
 
 AVilsoti V. Wills Valley R.. Co 152 
 
 Wiltbank's Appeal 1.54, 157, IGO 
 
 Winch V. Birkenhead Lancashire & 
 
 Cheshire June. R. R. Co 634 
 
 Winchester T. Co. v Vlmont..215, 387, 638 
 Winfield v. Hudson 251 
 
 Winn V. Macon 713 
 
 Wtnotia, etc., R. Co. v. Waldron 6(t5 
 
 Winsmore V. Greenbank 483 
 
 Winsor. Ex parte ... 131, 149, 248, 423 
 
 Winter V. Baker 205,243 
 
 AVinier V. ISelmont Mining Co 91 
 
 \Vii:ierv. Muscogee R. Co 66, 143, 350 
 
 Winterbottom V. Wright.. 4;J5 
 
 AVinters v Hannibal, etc , R. Co 408 
 
 W'iswall V. Greenville, etc., Plankroad. 356 
 
 Witherhead V Allen 
 
 Withers v. No. Kent. R. Co 739 
 
 Withington V. Herring 271 
 
 Wolcott VA'^ddlen Man. Co. v. Upham.. .573 
 
 AVolf V. Goddard ....410 
 
 AVood V. Belford, etc., R. Co 215 
 
 Wood V. Coosa, etc., R. Co 116 
 
 Wood V. Draper. .. 13 
 
 \\'ood V. Dummer..206, 244,515, 520, 5138, 064 
 
 Woodv. McCann 239, 292, 307 
 
 AVood V. Pearce 521 
 
 Wood V.Tate 401 
 
 Wood V. Turnp. Co .... .528 
 
 Wood Hydraulic, etc., Co. v. King. 26, 328 
 
 346. 350 
 
 Woodbury v. Larned 294 
 
 AA'oodhouse v. Commonvrealth Ins. Co. 140 
 Woodman v. York, etc., R. Co... 400, 405 
 
 Woodruff A. Attor -Gen 28 
 
 AVoodrutf V. Trapnail 670 
 
 Woodstock V. Gallup 578,083 
 
 Woods V. People's Nat. Bk 390 
 
 Wookeyv. Hole 353 
 
 Wooleyv. Idle 417 
 
 Woolsey V. D'dge . .. 696 
 
 Worcester v. N. & W. R. K. Co 43 
 
 Worcester Medical Inst. v. Harding... 36 
 
 Worcester, etc , R. Co. v. Hinds 119 
 
 AVorcester T. Co v. Willard 141, 270 
 
 Wormley V. Wormley 495 
 
 AVorrell V. Judson 114 
 
 Worrell v. Munn 374 
 
 Worsterv Fortv-second St. R. Co ... 782 
 
 Worth, Ex parte 437 
 
 AVreford v. People 416 
 
 Wright V.Boyd 285 
 
 AVrightv. Bunday S31, 350 
 
 Wriirlitv. Carter 339,356 
 
 Wri^rht V. OrovilleM Co 514 
 
 Wright v. Shelby R. R. Co... 37 
 
 AVyman V. Hallwell Bk 226,419 
 
 Yarborough v. Bank of England.. 401, 433 
 
 454, 458 
 
 Yarmouth v, N.Yarmouth 27, 41, 049 
 
 Yates V. Squires . 795 
 
 A'eatman V. Crandall . 691 
 
 Veaton v. Bk. Old Dominion 62, 64 
 
 Vellow Jacket M. Co. v. Stevenson, 238, 323 
 
 York, etc., R. Co., In re 388 
 
 York, etc., R. Co v. Hudson 253 
 
 Vork, etc., R. Co. V. Pratt 153 
 
 York, etc., R. Co. v. Pegina 29, 004 
 
 A^ork, etc., R. Co. v. Ritchie . 142, 148, 153 
 
 York, etc., R. Co. v. \Vinan3 315, 387' 
 
 A'oung V. Bk. Alexandria 507 
 
 Young V. Daniels .526 
 
 Young V. Harrison 42, 566, 649, 654, 671 
 
 Young v. N. Y., etc., Steairi S. Co .... 114 
 Youngman v. Alexandria R. Co 528 
 
 Zabriskie v. Cleveland, etc , R. Co. 30, 203 
 
 235, 383, 375, 381, 516 
 
 Zabriskie V. Hackensack, etc., R Co.. 43 
 
 63, 143, 233, 516, 5r,3, 660 
 
 Zemp V. Wilmington, etc., R. Co. ... TOl 
 
 Ziniiner V. State . .. ,5.'4 
 
 Zion Church v. St. Peter's Church . .. 504 
 
 Z<jltman V. San Francisco 3S0
 
 PRIVATE CORPORATIONS. 
 
 CHAPTEK I. 
 
 WHAT ARE ORIGIN AISTD HISTORY OF. 
 
 Sec. 1. What are corporations, and kinds of. 
 
 Sec. 2, Various kinds of corporations. 
 
 Sec. 3. Distinction between public and private corporations. 
 
 Sec. 4. Quasi corporations . 
 
 Sec. 5. Origin and early history of private corporations. 
 
 Section 1. What are corporations, and kinds of. — A corporation is 
 
 an artificial person, created hy, and deriving all its powers from, ; 
 the law, and, within the scope of the express or implied authority 
 conferred npon it by the law creating it, possesses all the powers 
 and functions of a natural person. It is composed of one or more 
 persons constituting, under a particular name, one artificial person, 
 without a soul, but enjoying the capacity of a continuous succes- 
 sion, and of perpetual existence and identity, unless its duration 
 is limited by the law creating it, or its powers are taken aw'ay by 
 statute or the judgment' of a competent tribunal, upon proper pro- 
 ceedings to that end. 
 
 Like a natural person it may, unless restrained by law, in its 
 corporate name, purchase, take, hold and convey real or personal 
 property, make contracts, employ agents, and prosecute the busi- 
 ness for the prosecution of which it was organized, and sue or be 
 sued, either in courts of law or equity. It may be said to be a 
 collection of persons, united by law into one hody, and endowed
 
 2 Pkivate Corporations. 
 
 with the capacity of a single person within the scope of the ex- 
 press or implied powers with which it is endowed. 
 
 It is a political or civil institution, composed of one or more 
 persons, legally organized with a particular name, and constituting, 
 in law, but a single person, and having an identity, and a legal 
 existence and liability entirely separate and distinct from that of 
 the members of which it is composed. Indeed, the principal ob- 
 ject and purpose of private corporations is to enable many persons 
 to concentrate their capital in the prosecution of a particular busi- 
 ness, without incurring the personal risks or liabilities incident to 
 the prosecution of business by an individual in his own name, or 
 of an afferreffation of individuals under a firm name ; and to ac- 
 complish this result a corporation has a legal identity and liability, 
 entirely distinct from and independent of the persons or other 
 corporations of which it is composed. 
 
 An American author of fair reputation accurately describes 
 a corporation as being "a legal institution devised to confer 
 upon individuals of which it is composed, powers, privileges 
 and immunities which they would not otherwise possess ; the 
 most important of which are continuous legal identity and perpet- 
 ual or indefinite succession under the corporate name, notwith- 
 standing successive changes, by death or otherwise, in the corpo- 
 rators or members of the corporation." ' 
 
 Mr, Kyd defines a corporation as being a collection of many in- 
 dividuals united in one body, under a special denomination ; hav- 
 ing perpetual succession under an artificial form, and vested by 
 the policy of the law with a capacity of acting in several respects 
 as an individual ; particularly, of taking and granting property, 
 contracting obligations, and of suing and being sued ; of enjoying 
 privileges and immunities in common, and of exercising a variety 
 of political rights more or less extensive according to the design 
 of its institution or the powers conferred upon it, either at the 
 time of its creation or at any subsequent period of its existence." * 
 
 •1 Dill, on Mun. Corp., § 8; 1 organized in England, under an act of 
 
 Brown's Civ. L. 141; 2 Kent's Com. parliament, with the incidents of a 
 
 267. corporation, may in this country be 
 
 ^ 1 Kyd on Corp. 13. In a recent treated as such, though it is expressly 
 
 case, the supreme court of the United provided by' the act, that such compa- 
 
 States has intimated, that the earlier nies should not be so consiaered. 
 
 definitions of a corporation were not Liverpool Ins. Co. v. Massachusetts, 
 
 satisfactory; and that a company 10 Wall. (U. S.) 566.
 
 Origin and History of. 3 
 
 Chief-Justice Marshall, in a leading case upon this branch 
 of the law/ says : — 
 
 " A corporation is an artificial being, invisible, intangible, and 
 existing only in contemplation of law. Being a mere creature 
 of the law, it possesses only those properties which the charter of 
 its creation confers upon it, either expressly, or as incidental to 
 its very existence. These are such as are supposed, best calculated 
 to effect the object for which it is created. Among the most im- 
 portant are immortality, and, if the expression may be allowed, 
 individuality ; properties by which a perpetual succession of 
 many persons are considered as the same, and may act as a single 
 individual. They enable a corporation to manage its own affairs, 
 and to hold property, without the perplexing intricacies — the 
 hazardous and endless necessity of perpetual conveyances, for the 
 purposes of transmitting it from hand to hand.' It is chiefly for 
 the purpose of clothing bodies of men in succession with these 
 qualities and capacities, that corporations were invented, and are 
 in use. By these means a perpetual succession of individuals is 
 capable of acting for the promotion of the particular object, like 
 one immortal being," 
 
 Sec. 2. Various kinds of corporations,— The definitions and descrip- 
 tions we have given apply to cor}X)rations generally ; but there 
 are various kinds of corporations created for different and specific 
 purposes, the francliises and powers of which are limited to the 
 specific purposes for which they were created. Thus they are 
 divided into sole and aggregate. A sole corporation consists of 
 a single individual, as a member or representative of it . Of this 
 class in the institution of the English church are the ecclesiastics, 
 known as bishops, deans, parsons and vicars, who possess certain 
 temporal rights and franchises, and whose successors continue to 
 
 ' Dartmouth College v. Woodworth, not impracticable, it has been found 
 
 4 Wheat. (U. S. ) 636. necessary, when it is for the advantage 
 
 Blackstone observes that, " as all of the public, to have any particular 
 
 personal rights die with the person, rights kept on foot and continued, to 
 
 and as the necessary forms of in- constitute artificial persons, who may 
 
 vesting a series of individuals, one maintain a perpetual succession, and 
 
 after another, with the same identical enjoy a kind of legal immortality." 
 
 rights, would be very inconvenient, if 1 Bl, Com. 467.
 
 4 Private Corporations. 
 
 enjoy the same rights as a sole corporation.' In New York a 
 supervisor of a town is held to be siib modo a sole corporation,' 
 so an overseer of tlie poor/ and as to the latter class of officers, 
 the same doctrine has been held in Mississippi.* 
 
 The king is regarded as a sole corporation, and his successors 
 enjoy the same franchises by virtue of this sole corporation which 
 he constitutes." It is in this sense that the king never dies. 
 
 It is claimed that sole corporations are an invention of tlie 
 English law, as they are unknown as original institutions to the 
 civil law, from which most of the law relating to corporations is 
 derived. The familiar maxim of the Roman law was tresfaciunt 
 collegium. But it was a doctrine of the civil law that if a cor- 
 poration, originally consisting of three persons, was reduced to 
 one, "6'<e univemitus ad unam redit^'' it might still exist as a cor- 
 poration, '■'' et stat nomen universitatus.''^ ' Tliere are few princi- 
 ples of the general law of corporations applicable to sole corpora- 
 tions.'' But we shall hereafter notice statutes of various states 
 providing for the incorporation of a single person for pecuniary 
 gain under general laws of incorporation, and call attention to 
 the fact, that an individual may become entitled to the rights 
 and franchises of a corporation aggregate, by purchase of the 
 same on a sale thereof on execution against the corporation, or on 
 
 ' 1 Bl. Com. 469 ; Bac. Abr., tit. Corp. lished was not divested by tlie change 
 
 If it consists of one member only, it is of government. Tlie Town of Pawlet 
 
 denominated a sole corporation; if of v. Clark, 9 Crancb (U. S.), 293. In Eng- 
 
 more than one, an aggregate corpora- land the freehold of the churchyard, 
 
 tion. The members of an aggregate parsonage-house, the glebe and the 
 
 corporation may not only consist of tithes of the parish were vested in the 
 
 natural persons, but of other corpora- parson as a sole corporation. 1 Bl. 
 
 tions and of partnerships; and it does Com. 469. The king, as well as par- 
 
 not lose its legal identity by any liament, is a sole corporation. The 
 
 change of its members during its legal case of Sutton's Hospital, 10 Coke, 29, 
 
 existence. If a parson holds his pos- b; 1 Shepard's Abr. 431. 
 
 session singly he is a corporation sole; ^ Janson v. Ostrander, 1 Cow. (N. Y.) 
 
 but if with others, he makes a chapter, 670. 
 
 and is a member of a corporation ag- * Rouse v. Moore, 18 Johns. (N. Y.) 
 
 gregate. Id.; Wats. Comp. Incumb. 407. 
 
 373. In those states of the Union *Govenor v. Gridley, 1 Miss. 328. 
 
 where the religious establishment of '1 Bl. Com. 470; Bac. Abr., tit. 
 
 the Church of England was adopted Corp. The king is made a sole cor- 
 
 when they were colonies, together poration in order to prevent an inter- 
 
 with the common law on that subject, regnum or vacancy of the throne, 
 
 the minister of the parish was seized 1 Bl. Com. 470. 
 
 of the freehold as persona ecclesim, in *1 Bl. Com. 469. 
 
 the same manner as in England; the '1 Woodeson's Lect. 471; 2 Kent's 
 
 right of his successor being thus estab- Com . 307 .
 
 , Origin and History of. 5 
 
 a sale made under a power contained in a deed of trust, executed 
 by the corporation.' We have said that aggregate corporations 
 consist of two or more persons, although the civil law required at 
 least three. Of the class denominated aggregate corporations are 
 the mayor and commonalty of a city, the head and fellows of a 
 college, the dean and chapter of a cathedral church, and most of 
 the corporations, both public and private, in this country. Another 
 division of corporations is into ecclesiastical and lay. In the 
 former the persons comprising them and the objects for which 
 they are constituted are spiritual or religious, and they embrace all 
 such corporations as are organized under general statutes of the 
 various states, providing for the incorporation of religious socie- 
 ties. Again, lay corporations are divided into two kinds, elee- 
 mosynary and civil. Eleemosynary corporations embrace all such 
 as are constituted for the perpetual distribution of the arms and 
 bounty of the founder, such as hospitals, colleges, and academies." 
 Again, civil corporations are divided into public and private. 
 Public corporations are such as are created for political purposes, 
 and embrace all such as come under the denomination of munici- 
 pal corporations, as counties, cities, towns, and villages.' Private 
 corporations are such as are created for a variety of temporal pur- 
 poses, and for pecuniary gain to the members composing it, and 
 embrace such as are created for banking, insurance, railroad, canal, 
 bridge, turnpike, manufacturing, building, and for other com- 
 mercial and business purposes, for the personal gain and emolu- 
 ment of its members. 
 
 ' It is sometimes provided by statute lands, to liold to him and his succes- 
 that the franchise of a corporation sors in the same office iu right of his 
 may be levied upon and sold under an parish." But ministers were made 
 eifecutiou, the purchaser becoming sole corporations by statute in 1785, 
 vested with all the powers of the cor- chap. 51, which is the same as 28 Geo. 
 poration. Iowa Code (1873), i^ 1086 ; 2, for the express purpose of holding 
 see also, as to the authority of a single such parsonage lands, and under this 
 individual to entitle himself to the ad- statute they were held to stand on 
 vantages of a corporation aggregate, the same foundation as other corpora- 
 Iowa Code (1873), § 1088. See, also, tions holding lands in succession at 
 po.«<, chap. 15. In Overseers, etc., V. common law. Weston v. Hunt, 2 
 Sears, 22 Pick (Mass.) 125, it was said: Mass. 500. See Gen. Stat. Mass., chap. 
 " We are not aware that there is any 31; Brown v. Porter, 10 Mass. 93. a 
 instance of a sole corporation in this '■* 1 Bl. Com. 471. 
 commonwealth, except that of a par- ^g Kenfs Com. 375. 
 son, who may be seized of parsonage
 
 6 Private Cokpokations. 
 
 Sec. 3. Distinction between public and private corporations. — As 
 we propose to consider and illustrate the law applicable to private 
 corporations only, it may be proper to consider the distinction as 
 to membership between the two great and most common divisions 
 of corporations, viz.: public and private corporations. In public 
 corporations, membership consists only in residence within the 
 territorial limits of the corporation, A citizen, for instance, of a 
 county, cit}^, town, village, or school district, duly incorporated, is 
 a member of such corporation ; and it is not necessary, as with 
 private corporations, that the members or citizens constituting it 
 should, in any manner, accept of the charter or statute creating 
 the same. On the other hand, membership in private corporations 
 can, originally, only be created by an acceptance of the provisions of 
 the charter tendered to them, or voluntarily organizing under the 
 provisions of the statutes providing for in corporation, or com])lying 
 with the provisions of the general statute of the state in relation 
 thereto.' And it has been held, that a corporation is private as dis- 
 tinguished from public, unless the whole interest belongs to the 
 government, or the corporation is created for the administration 
 of political or municipal power." 
 
 The distinction between private and public corporations is thus 
 stated by Mr. Dillon : " Private corporations," says he, " are 
 created for j^rivate purposes, as distinguished from governmental 
 purposes ; and they are not, in the contemplation of law, pub- 
 lic, because it may have been supposed by the legislature that their 
 establishment would promote, either directly or consequentially, 
 the public interest. They cannot be compelled to accept a charter 
 or incorporating act. The assent of the corporation is necessary 
 to make the incorporating statute operative. But when assented 
 to, the legislative act is irrevocable, and it cannot, without the 
 consent of the corporation, be impaired or destroyed by any sub- 
 sequent act of legislation, unless the right to do so was reserved 
 at the time. Public corporations are called into being at the pleasure 
 of the state, and while the state may, it need not obtain the con- 
 sent of the people of the locality to be affected. The character 
 
 ' Overseers of Poor v. Sears, 23 Pick, cause it is of general public interest. 
 
 (Mass.) 132; Oakes v. Hill, 10 id. 333. Ten Eyck v. Delaware & Raritan Canal 
 
 •' Uiiudle V. Delaware & Raritan Ca- Co., 18 N. J. L. 200 ; Tinsman v. Bel- 
 
 nal Co., 1 Wall.. Jr. (U. S.) 375. But a videre, etc. , R. R. Co., 26 id, 148. 
 corporation is not necessarily public be-
 
 Oeigin and History of. 7 
 
 of a municipal corporation is in no sense a contract between the 
 state and the corporation, although, as we shall see, private or 
 vested rights in favor of third persons, if not in favor of the cor- 
 poration, may arise under it. Public corporations, within the 
 meaning- of this rule, are such as are established for public pur- 
 poses exclusively — that is, for purposes connected with the ad- 
 ministration of civil or local government ; and corporations are 
 public only when, in the language of Chief- Justice Marshall, 
 the whole interests and franchises are the exclusive property and 
 domain of the government itself." ' 
 
 Sec. 4. Quasi corporations. — There is a class of joint-stock asso- 
 ciations, organized for private pecuniary purposes, under special 
 statutes, that possess some of the powers and attributes, or com- 
 mon-law incidents of corporations, and may be designated as quasi 
 corporations. Provision was made for these limited or qualitied 
 partnerships, in France, as early as 1673, by an ordinance, la 
 sooiete en commandite, by which one or more special or silent 
 partners might furnish a certain portion of capital to be used in 
 the partnership affairs, and only be liable to the extent of the 
 funds thus furnished." It is beheved that similar statutoiw enact- 
 ments may be found in most of the states of Europe, as well as of 
 the Union ; and the members of such partnerships or joint-stock 
 associations, in respect to their personal liability for the debts of the 
 association, are placed on the same footing as corporators. 
 
 The condition required in such cases, in order to exempt from 
 unlimited liability, is the recording in some public office, or the 
 publication in some manner, of a statement or certificate of the 
 terms and conditions of the copartnership, and of the extent or 
 limit of liability of the partners. An English act of parliament 
 also permitted the secretary of a commercial joint-stock partner- 
 ship to sue and be sued as a representative of the company, and 
 allowed members of the same to sue the company.' This was con- 
 
 '1 Dill, on Mun. Corp., p^ 39,30; Riias. Ch. 441. See, also, 3 Bell's Com., 
 
 poft, chap. 3. B. 7, cbap. 3, p. 627, e< seq.; Story on 
 
 ■^ French Code, Repertoire ou Juris- Part., § 77 and notes ; 25 and 26 Vict., 
 
 prudence par Merlin, tit. Societe, art. chap. 89; " The Companies' Act, 1863;" 
 
 3, Code de Com., b. 1, tit. 3, § 1. 30 and 31 Vict., chap. 131; "TheCompa- 
 
 ^ See history of early English legis- nies' Act, 1868," regulating joint-stock 
 
 lation on this subject, opinion of Lord companies. 
 EhDON in Van Sandau v. Moore, 1
 
 8 Pkivate Ooepokations. 
 
 ferring upon a partnership an additional corporate quality, that 
 otherwise it would not possess ; and a recent English act/ among 
 other things, provides that the separate property of the members 
 of such companies as shall be organized under it shall be liable 
 to the satisfaction of judgments obtained against such company, 
 only after due diligence has been used to obtain satisfaction out 
 of the property of the company. 
 
 Sec. 5. origin and early history of private corporations. — The 
 origin of private corporations is hidden in the obscurity of 
 the remote past. They probably existed in Greece in the age of 
 Solon, the law-giver, as his laws provided for the institution of 
 private corporations, on condition of subjection and obedience to 
 the laws of the state.* They also existed in Home at an early 
 period in the history of the republic ; authority being conferred 
 by the Twelve Tables to private companies, to make by-laws, not 
 inconsistent with the public law ; which provision, it has been 
 claimed, was copied from the laws of Greece. The probability, 
 that the Roman idea of corporate institutions was obtained from 
 the Grecians, is perhaps increased by the fact, that Rome obtamed 
 much of her literature, philosophy, and fine arts, as well as juris- 
 prudence from Greece.' 
 
 The value and importance of corporations, in developing and 
 keeping on foot the leading industries of any country, is incal- 
 culable, and the desirability of such a concentration of capital and 
 union of business experience is illustrated by the very large num- 
 ber of such corporations in existence in this country, and the won- 
 derful results which have been wrought thereby ; results which 
 could never have been accomplished except through the interven- 
 tion of these agencies, and the prejudices formerly existing against 
 " soulless corporations," as they have been termed, are rapidly 
 disappearing. 
 
 » 7 and 8 Vict., chap. 110. ' Table 8 ; Plut. Life of Numa. 
 
 'Ayliffe's Treat, on Civ.L. 197 ; Dig. 
 47, 22, 4 ; 2 Kent's Com. 268.
 
 How COKPOEATIONS AEE CkEATED. 
 
 CHAPTER II. 
 
 HOW CORPORATIONS ARE CREATED. 
 
 Sec. 6. Creation an act of sovereignty. 
 
 Sec. 7. Creation by royal charter. 
 
 Sec. 8. Creation by act of parliament. 
 
 Sec. 9. Corporations at common law and by prescription- 
 
 Sec. 10. How created in this country. 
 
 Sec. 11. Power of congress to create. 
 
 Sec. 13. Sovereign authority of legislatures. 
 
 Sec. 13. General statutes of incorporation. 
 
 Sec. 14. The national banking law. 
 
 Sec. 15. Of the power to delegate authority to create. 
 
 Sec. 16. Of the power of territorial legislatures to create. 
 
 Sec. 17. Corporations by prescription in this country. 
 
 Sec. 18. Foreign joint-stock companies may be corporations. 
 
 Sec. 19. The corporate name. 
 
 Sec. 20. The location of corporations . 
 
 Sec. 21. Words of incorporation in royal grants. 
 
 Sec. 22. Common-law incidents of a corporation. 
 
 Sec. 23. Acceptance of the grant. 
 
 Sec. 24. Mode of acceptance. 
 
 Sec. 25. Same continued. 
 
 Sec. 26. Acceptance must be unconditional. 
 
 Sec. 27. Acceptance under general laws. 
 
 Sec. 28. The term, " constating instruments.' 
 
 Sec. 29. Organization of a corporation. 
 
 Sec. 6. Creation an act of sovereignty. — The pOWer to confer 
 corporate franchises and privileges is exclusivelj vested in the 
 sovereign authority of the state or general government. It is an 
 act of sovereignty. Hence, by the civil law, franchises could only 
 be conferred by a decree of the senate, or the imperial constitu- 
 tions ;' notwithstanding the observation of Blackstone, that under 
 the civil law, they " seem to have been created by the mere act 
 
 ' 1 Brown's Civ. L. 143 : Dig., vol. 196 ; Domat's C. L., Prel. B, tit. 11, § 2, 
 47, tit. 22 ; Wood's C. L. 134 ; Ayliffe, 15. 
 
 2
 
 10 Pkivate Corporations. 
 
 and voluntary association of their members." ' " But," lie ob- 
 serves, " with us, in Enghmil, the king's consent is absohitely 
 necessary to the erection of any corporation, either impliedly or 
 expressly given." " 
 
 A fundamental rule, invariable iu its application, is that no 
 corporation can exist, except under and by the authority of the 
 sovereign power,' and companies or societies which are not sanc- 
 tioned expressly by the sovereign power, pursuant to some gen- 
 eral or special law, are nothing more than ordinary partnerships,* 
 and the ground upon which it is held that incorporation by pre- 
 scri])tion may exist is upon the presumption that a grant formerly 
 existed, and that all due formalities as to organization under it 
 have been observed.* 
 
 No special form of words are necessary to create a corporation, 
 and a mere grant of the power to perform, corporate acts, of itself, 
 implies a grant of corporate powers,* and if no act is required to 
 be done to bring the corporation into being, the franchise attaches 
 at once; but if some future act is required to be done to bring the 
 corporation into existence, the franchise remains in abeyance until 
 such act is done, and then attaches immediately, and the corpora- 
 tion is endowed with a legal existence.'' A mere grant of lands 
 by the state to individuals, to be possessed and enjoyed by them 
 in a corporate character, has been held in itself to confer upon 
 such individuals capacity to take and hold in a corporate character.* 
 
 Sec. 7. Creation by royal charter. — According to the ancient 
 common law of England, the king, by virtue of his prerogative, 
 was the only creator of corporations ; and this right was said to 
 
 '1 Bl. Com. 472. "It does not ap- ^ vVells v. Gatea, 18 Barb. (N. Y.) 
 
 pear that the prince's consent was 554. 
 
 necessary to be actually given to the * All Saints' Church v. Lovett, 1 
 
 foundation of them, but merely that Hall (N. Y.), 191 ; United States v. 
 
 the original founders of these friendly Amedy, 11 Wheat. (U. S.) 392. 
 
 societies, for they were little more * Com. v. West Chester R. R. Co., 3 
 
 than such, should not establish any Grant's Cas. (Penn.) 200. 
 
 meetings in opposition to the laws of ' Dartmouth College v. Woodward, . 
 
 the state." Id. 4 Wheat. (U. S.) 518. 
 
 ' Id. ® North Hempstead v. Hempstead, 2 
 
 3 Ernst V. Bartle, 1 Johns. (N. Y.) Wend. (N. Y.) 119, 
 Cas. 319 ; Medical Inst. v. Patterson, 
 1 Den. (N. Y.) 61.
 
 How COKPORATIONS AKE CrEATED. 
 
 11 
 
 be " tlie flower of the prerogative." ' But more recently it was 
 held that the king's charter could, under the English constitution, 
 confer only ordinary corporate powers, and that extraordinary 
 authority could only be granted by the transcendent power of 
 parliament.'* And if the king grants charters and attemj^ts to 
 confer powers therein, which infringe upon constitutional rights, 
 they are void." 
 
 Sec. 8. Creation by act of parliament. — Notwithstanding the 
 claims made, that the granting of charters to corporate bodies 
 belongs to the king's prerogatives, it seems that parliament, as the 
 representative also of sovereignty, may, by act, create corpora- 
 tions, to which the royal assent is, however, presumed to be 
 given.* But acts of parliament, relating to corporate franchises, 
 were formerly confined to confirmation of those charters pre- 
 viously granted by the king, or they conferred on the king power 
 to create them infuturo. In the latter case, " however, the im- 
 mediate creative act was usually performed by the king alone, in 
 virtue of his royal prerogative." * 
 
 1 1 Bl. Com. 472; 4 Co. 107 b.; 10 id. 
 33 b.; 2 Bac. Abr. (Am. ed.) 438, tit. 
 Corp. ; 2 Kyd on Corp. 42 ; Miller's 
 Eng Gov. 149 ; Aug. & Am. on Corp., 
 § 67 ; 1 Wile, on Corp. 25 ; 1 Dill, on 
 Corp. 53. 
 
 « 1 BL Com. 474 ; 1 Dill, on Corp., 
 § 15 
 
 3 Id. 
 
 4 I Bl. Com. 473 ; 10 Co. Rep. 29 ; 
 1 Roll. Abr. 512. 
 
 * 1 Bl. Com. 473. See, also, respect- 
 ing the authority of the crown to grant 
 charters to incorporate towns, General 
 Municipal Corp. Act of England, 1835; 
 also, Rutter v. Chapman, 8 M. & W. 1; 
 Reg. V. Boucher. 3 Q. B. 654 ; Dill, on 
 Corp.,§ 16. 
 
 General statutes have been enacted 
 in England, under which most of the 
 corporations are now instituted, auaong 
 which are the following: 
 
 The Companies Act, 1862, 25 and 26 
 Vict., chap. 89 ; and The Companies 
 Act, 1867,30 and 31 Vict., chap. 131, 
 which relate to and regulate all joint- 
 stock companies not created by special 
 acts, or charters ; The Industrial and 
 Provident Societies Act, 1862, 25 and 
 
 26 Vict., chap. 87, which was amended 
 by 30 and 31 Vict., chap. 117, and 34 
 and 35 Vict., chap. 80, which relate to 
 friendly societies, and other similar 
 associations ; The Life Assurance So- 
 cieties Act, 1870, 33 and 34 Vict., chap. 
 61, as amended by 34 and 35 Vict., 
 chap. 58, and 35 and 36 Vict., chap. 41 ; 
 The Companies Clauses Consolidation 
 Act, 8 and 9 Vict., chap. 16; and the 
 Railways Clauses Consolidation Act, 
 chap. 20. 
 
 " The above statutes and especially 
 the first two, The Companies Acts of 
 1862 and 1867," observes Mr. Brice, 
 " enable persons by a very simple and 
 speedy process to unite themselves 
 into, and thereby create a corporation 
 for almost any and every purpose of 
 life, commercial or otherwise. The 
 constitution of such corporation, its 
 objects and purposes, its rights and 
 powers, and those of its various mem- 
 bers, will be determined by the instru- 
 ments drawn up — the memorandum 
 and articles of association — at tlie 
 time of registration. The acts them- 
 selves contain but little upon these 
 heads. The chief specific provisions
 
 12 
 
 Private Corporations. 
 
 Seo. 9. Corporations at common law and by prescription. — In Eng- 
 land corporations exist, also bj what is termed bj common law, 
 and by prescription. But in such cases a grant by charter of the 
 king or act of parliament must be presumed. Tliose recognized 
 at common law are such as have continued from time immemorial 
 to exercise corporate privileges, but whose grant or charter cannot 
 be found. And the same may Ije said in reference to corpora- 
 tions by prescription. 
 
 Each rests upon a supposed grant, and it is difficult to draw any 
 distinction in this respect between them, though they have been 
 frequently thus designated and distinguished.' 
 
 In this country also, presumptions are sometimes made in favor 
 of the incorporation of associations, without actual proof of the 
 same. And proof of the existence of a corporation by reputation 
 has been allowed from user, where it had continued to act as such 
 for several years, but the original act of 'incorporation could not 
 
 found in them relate to the formalities 
 and other circumstances connected 
 with the foundation and the dissolu- 
 tion, voluntary or forced, of the cor- 
 poration, and with the assembling 
 periodically of the members. The 
 enactments that concern the working 
 and control of the corporation, and 
 the rights and liabilities of the share- 
 holders and other matters belonging 
 to the internal management of the 
 association, are but mere generalia, it 
 beinsr left to the individuals from time 
 
 to time composing the association, to 
 fix and prescribe these in a more par- 
 ticular manner, and in accordance with 
 the exigencies and requirements of 
 the undertaking in which they propose 
 to engage. These statutes give to the 
 bodies coming within their purview 
 no arbitrary or compulsory power of 
 dealing with the rights, pecuniary or 
 proprietary, of others than their own 
 members." Green's Brice's Ultra 
 Vires, 34. See, also, Buckley, pp. 15, 
 345. 
 
 I \ Bl. Com. 473 ; Dill, on Corp., § 15; 
 1 Kyd on Corp. 41, 43 ; 3 Kent's Com. 
 377; Town of Pawlet v. Clark, 9 
 Cranch (U. S.), 393; 3 Inst. 330; 
 Bract. 1, chap. 34, f. 55; 10 Co. 33; 
 Ayliffe, 310. There are a class of as- 
 sociations, not incorporated, partaking, 
 however, of the nature of both cor- 
 porations and partnerships, that are 
 in some respects entitled to the ad- 
 vantages of corporations, and which 
 are sometimes called quani corpora- 
 tions. Bullard v. Kinney, 10 Cal. 60; 
 Williams v. Bank of Michigan, 7 
 Wend. (N. Y.) 543 ; Atkins v. Hunt, 
 14 N. H. 305; Babb v. Reed, 5 Rawle 
 (Penn.), 151 ; Wells v. Gates, 18 Barb. 
 (N. Y.)554; Cox v. Bodfish, 35 Me. 
 303. But such associations cannot be 
 
 regarded as even quasi corporations, 
 because they have not the capacity 
 to sue or be sued as an artificial 
 person. Com. v. Green, 4 Whart. 
 (Penn.) 531; Niven v. Spickerman, 
 13 Johns. (N. Y.) 401 ; but must sue 
 either in the name of all the mem- 
 bers, Hahicht v. Pembertou, 4 Sandf. 
 (N. Y.)657; or, where the members 
 are numerous, in the name of one or 
 more for the benefit of all. Wood v. 
 Draper, 34 Barb. (N. Y.) 187; Dennis 
 V. Kennedy, 19 id. 517 ; so, too, there 
 is another very important distinction 
 existing between these associations 
 and corporations, which is, that a 
 member of the association cannot sue 
 it. Bullard v. Kinney, 10 Cal. 60; 
 Ewing V. Medlock, 5 Port, (Ala.) 83.
 
 How Corporations are CREATiiiD. 13 
 
 be found.' And it has been lield in this country, th;it the exer- 
 cise of corporate powers for a long time (twenty years) without 
 objection, and witli the knowledge and assent of the legislature 
 of the state, furnished conclusive evidence of a charter, or con- 
 stitnted a corporation by prescription, which supposes an original 
 grant." 
 
 Sec. 10. How created in this country. — In this country corporate 
 rights can only be conferred by legislative acts.^ According to 
 the theory of our government the sovereign or supreme authority 
 is vested in congress and the legislatures of the various states, 
 each having its proper and limited sphere of action. Hence cor- 
 porate franchises, which can only be conferred by the sovereign 
 authority, must be secured by either an act of congress or of the 
 legislature of. the state where the corporation is to be created.* 
 So, a legislature may provide for the creation of an indefinite 
 number of corporations in one act, as well as a definite number.* 
 And there is no legal difficulty in the way of the creation of a 
 single corporation by the concurrent action of the legislatures of 
 two or more states, nor of the creation of a corporation, where 
 one of the constituents is a foreign corporation.' 
 
 Sec. 11. Power of congress to create. — The congress of the 
 United States is sovereign in respect to those powers conferred 
 upon it by the constitution of the general government, and the legis- 
 latures of the several states are sovereign in respect to those pow- 
 ers, unless prohibited by the constitutions of the respective states, 
 or in conflict with the federal constitution. On general principles 
 
 ' DilliDgham v. Snow, 5 Mass. 547. pany, 2 Nev. 86; Railroad Co. v, Plu- 
 
 See, also, Bassett v. Porter, 4 Cusli. mas Co., 37 Cal. 354. 
 
 (Mass.) 487: Barnes v. Barnes, G Vt. n Dill, on Corp., § 17; 2 Kent's 
 
 388; Londonderry v. Andover, 28 id. Com. 277; United States Trust Co. v. 
 
 4.16; Sherwin v. Bugbee, 16 id. 439; Brady, 20 Barb. 119; Pennsylvania, 
 
 Ryder v. Railroad Co., 13 111. 523; etc., R. Co. v. Canal Com., 21 Penn. 
 
 Highland Turnpike Co. v. McKean, St. 9. 
 
 10 Johns. (N. Y.) 154; Owings v. ^Franklin Bridge Co. v. Wood, 14 
 
 Speed, 5 Wheat. (U. S.) 420; New Qa. 80. 
 
 Boston V. Dumbarton, 15 N. H. 201. ^Falconer v. Campbell, 2 McLean 
 
 2 Bow V. Allenstown, 34 N. H. 351. (U. S. C. C), 195. 
 
 Pee, also, Jameson v. People, 16 111. ^uisi^op v. Brainerd, 28 Conn. 289. 
 
 257 ; People v. Maynard, 15 Mich. 463; The life of a private corporation dates 
 
 Railroad Company v. Chenoa, 43 111. from the time it commences to do 
 
 209: Virginia City v. Mining Com- business. Hanna v. International Pe- 
 troleum Co., 23 Ohio St. 622.
 
 14 Private Corporations. 
 
 it is evident that each state has the power to create corporations, 
 or make general laws wherebj they may he created (unless ex- 
 pressly prohibited from so doing by constitutional provisions), as 
 incidental to their sovereign power and authority, and althongh 
 not particularly enumerated among its constitutional powers. 
 This doctrine was settled, after much discussion and consideration, 
 by our courts at an early period in the history of our government ; 
 and those early decisions have been followed, not only by the 
 federal, but by the various state courts. In an early case in the 
 sujDreme court of the United States, in reference to the inciden- 
 tal and implied powers -of congress to create corporations, the 
 court said : " If we look to the origin of corporations, to the 
 manner in which they have been framed in that government from 
 which we have derived most of our legal principles and ideas, or 
 the uses to which they have been applied, we find no reason to 
 suppose^that a constitution omitting, and wisely omitting, to enu- 
 merate all means for carrying into execution the great powers 
 vested in government, ought to have specified this. " * 
 
 Although no express power is found in the federal constitution 
 for the creation of corporations, the right is now universally re- 
 cognized by the courts, and has frequently been exercised by 
 congress, not only by special and general statutes for the creation 
 of national banks within the states, but also for the creation of 
 corporations, both public and private, in the several territories of 
 the Union." 
 
 • Sec. 12. Sovereign authority of state legislatures. — The legislatures 
 
 of the several states have the power to make laws, and legislate 
 upon all subjects pertaining to the public benefit, and this, in the 
 absence of express provisions on the subject in the constitution, 
 carries with it, by implication, the right to use all the means re- 
 quisite to the accomplishment of the objects of legislation, con- 
 sistent with the purposes for which the government is instituted, 
 and with the state and national constitutions. The public benefit 
 
 1 McCullocli V. State of Maryland, 4 of U. S., 9 id. 738 : Tliomaon v. Pacific 
 
 Wheat. (U. S.) 421. See, also. 1 Ham. R. Co , 9 Wall. (U. S.) 579 ; Pacific R. 
 
 Works, 111. Co. V. Lincoln Co., 1 Dill. (U. S. C. C.) 
 
 ^ See ante, § 1^) ; Dill on Corp , § 18 ; 314. See, also, hs to national banks, 
 
 McCulloch V. State of Maryland, 4 U. S. Rev. Stat. (1874). p. 998. 
 Wheat. (U. S.) 31G ; Osboru v. Bank
 
 How Corporations are Created. 15 
 
 to be derived is the consideration on tlie part of tlie state for the 
 creation of private corporations. Tlie motive of the sovereign 
 creating it is supposed to be some good that the public will derive 
 from it.' This advantage has been considered suthcient to bring 
 their creation, by the legislatures, within the scope of their gene- 
 ral powers to legislate for the public benefit, and it seems now to 
 be universally recognized.'' 
 
 Sec. 13. General statutes for incorporation. — It is undoubtedly 
 
 the true public policy to provide for the incorporation of corpo- 
 rations, either public or private, by general statutes enacted for 
 that purpose. Mr. Dillon alludes to this policy iu reference to 
 municipal corporations ; and the advantages of genei*al statutory 
 enactments in relation to incorporations for municipal purposes, 
 would be equally applicable to private ones. He says: "1. It 
 tends to prevent favoritism and abuse in procuring extraordinary 
 grants of special powers. 2. It secures uniformity of rule and 
 construction. 3. All being created and endowed alike, real wants 
 are sooner felt and provided for, and real grievances sooner re- 
 dressed." ' 
 
 Governed by this evident public policy, the legislatures of most 
 of the states have passed general statutes for the incorporation of 
 private associations for all the various objects and private pur- 
 poses to which the talents and capital of the citizen may be 
 profitably directed. In fact, the constitutions of many states 
 particularly prohibit special acts of incorporation, or only permit 
 incorporations under general laws.* General statutes on the sub- 
 ject of incorporations generally prescribe the manner in which 
 private corporations may be organized ; the business to be con- 
 
 ' Doraat's Civ. L. 453; 1 Bl. Com. should not be treated as a corporation. 
 
 467 ; Dartmouth College v. Woodward, Liverpool Ins. Co. v. Massachusetts, 10 
 
 4 Wheat. (U. S.) 637 ; Carrie's Adm. Wall. (U. S.) 566. 
 
 V. Mut. Assur. Co., 4 H. & M. (Va.) n Dill, on Mun. Corp., ij 20. 
 
 347. * Const. la., art. 3 (Leg. Def.), § 30 ; 
 
 2 United States Trust Co. v. Brady, Const. Cal., art. 4, § 31 ; Const. N. Y., 
 
 20 Barb. (N. Y.) 119 ; 1 Dill, on Corp., 1846, art. 3, § 17. 'if the constitution 
 
 5^ 17; Black River, etc., R. Co. v. prohibits the creation except under 
 
 Barnard, 31 Barb. (N. Y.) 258. general laws, it is restrictive in the 
 
 An English joint-stock company, strict sense of the term ; and no pow- 
 
 having powers incident to a corpora- ers can be granted by a special act. 
 
 tion, has been treated as a corporation City of San Francisco v. S[)ring Valley 
 
 in this country, although an act of par- Water- Works, 48 Cal . 493. 
 lianient declared that such company
 
 16 Private Corporations. 
 
 ducted by tliem ; the limit of the liability of members ; and, in 
 general, the powers, privileges and immunities intended to be 
 conferred, and the liabilities imposed, among which are usually 
 the following : 1. To have perpetual succession ; 2. To sue and 
 be sued by the corporate name; 3. To have a common seal which 
 they may alter at pleasure ; 4. To render the interests of the 
 stockholders transferable ; 5. To exempt the private property of 
 members from liability for corporate debts ; 6. To make contracts, 
 acquire and transfer property, possessing the same powers and 
 rights, and subject to the same liabilities in those respects as pri- 
 vate individuals ; 7. To establish by-laws and make all rules and 
 regulations deemed expedient for the management of their affairs 
 in accordance with law. 
 
 These powers and franchises it will be noticed are among the 
 common-law incidents of corporations. But the power of the leg- 
 islature is supreme in this respect, and there can be no doubt of 
 its right to extend or limit the common-law rights of corporations, 
 or prohibit them altogether. The mode of organizing private 
 corporations for pecuniary gain under these general statutory 
 provisions is, as we have observed, provided for, and directed by 
 them. Parties desiring to become incorporated are usually re- 
 quired, preliminary thereto, to subscribe certain articles of asso- 
 ciation, containing generally the following items, or some of them, 
 to-wit : 
 
 The name of the corporation, and the principal place of trans- 
 acting businese ; the general nature of the business to be trans- 
 acted ; the amount of the capital stock authorized and the times 
 and conditions of payment ; the time of the commencement and 
 termination of the corporation ; by what officers or persons its 
 affairs are to be conducted, and the times at which they will be 
 elected ; and the highest amount of indebtedness to which it is at 
 any time to subject itself. Other things may be required, but 
 these items will perhaps cover the general requirements of such 
 articles by the statutes. These articles are also usually required 
 to be recorded in some public office, and some notice of the same, 
 in some manner, publicly given. And they not only frequently 
 provide for the punishment of the corporators guilty of fraud in
 
 HoAV Corporations are Created. 
 
 17 
 
 tlie organization and management of the same, but subject them 
 to personal liability therefor/ 
 
 Sec. 14. The national banking law.— The act of congress, provid- 
 ing for the association and incorporation of persons for the carry- 
 ing oil of the business of banking, provides that they shall con- 
 sist of not less than five persons, who are required, as a preliminary 
 step to incorporation, to sign articles of association, which must 
 specify in general terms the object for which the association is 
 formed, and may contain any other provisions, not inconsistent 
 with law, which the association may think fit to adopt for the 
 regulation of its business, and the management of its affairs; and 
 they are required to be signed by the persons uniting to form the 
 association, and a copy of them is required to be filed in the office 
 of the comptroller of the currency.* 
 
 ' Code Iowa, tit. Corp. 183 ; Mass. 
 St. 1870, chap. 324 ; statute 1873, 173 ; 
 1874, chap. 2U, 165, 349. On the subject 
 of the personal liability of members or 
 stockholders of corporations in the va- 
 rious states, see 2)ost, ^ 71, note 3. 
 
 2 Act June 3, 1864, chap. 106, § 5, v. 
 13, Par, 100;Rev.Stat.(1874),p. 998, tit. 
 62, § 5133. This act further provides: 
 
 Sec. 5134. The persons uniting to 
 form such an association shall under 
 their hands make an organization cer- 
 tificate, which shall specifically state: 
 
 First. The name assumed by such 
 association; which name shall be sub- 
 ject to the approval of the comptroller 
 of the currency. 
 
 Second. The place where its opera- 
 tions of discount and deposit are to be 
 carried on, designating the state, terri- 
 tory or district, and the particular 
 county, and city town or village. 
 
 Third. The amount of capital stock 
 and the number of shares into which 
 the same is to be divided. 
 
 Fourth. The names and places of 
 residence of the shareholders, and 
 number of shares held by each of 
 them. 
 
 Fifth. The fact that the certificate 
 is made to enable such persons to 
 avail themselves of the advantages of 
 this title. 
 
 Sec. 5135. The organization certifi- 
 cate shall be acknowledged before a 
 
 judge of some court of record, or notary 
 public; and shall be, together with the 
 acknowledgment thereof, authenti- 
 cated by the seal of such court or no- 
 tary, transmitted to the comptroller of 
 the currency, who shall record and 
 carefully preserve the same in his 
 oflSce. 
 
 Sec. 5136. Upon duly making and 
 filing articles of association and an or- 
 ganization certificate the association 
 shall become as from the date of the 
 execution of its organization certificate 
 a body corporate, and as such and in 
 the name designated in the organiza- 
 tion certificate, it shall havepower : 
 
 First . To adopt and use a corporate 
 seal. 
 
 Second. To have succession for the 
 period of twenty years from its organi- 
 zation, unless it is sooner dissolv^ed ac- 
 coi'ding to the provisions of its articles 
 of association, or by the act of its 
 shareholders owning two-thirds of its 
 stock, or unless its franchises become 
 forfeited by some violation of law. 
 
 Third. To make contracts. 
 
 Fourth. To sue and be sued, com- 
 plain and defend, in any court of law 
 or equity, as fully as natural persons. 
 
 Fifth. To elect or appoint directors, 
 and by its board of directors to appoint 
 a president, vice-president, cashier and 
 other officers, define their duties, re- 
 quire bonds of them and fix the pen-
 
 18 
 
 Pkivate Corporations. 
 
 Sko. 15. Of the power to delegate authority to create a corporation. — 
 
 Altliougli it was fonnorlj licld in England that the act of incor- 
 poration must bo the immediate act of the sovereign authority, 
 yet tlie law seems now well settled there, that the king may give 
 a general authority to some other person to create them, on the 
 principle that, quifaoitper aliwm facit per se} For instance, it 
 has been held that the chancellor of the university of Oxford is 
 authorized to grant corporate privileges by virtue of the royal 
 authority conferred upon him, and that by virtue of such author- 
 ity he may create incorporated companies of tradesmen ; but this 
 is upon the theory, after all, that the king creates.^ 
 
 Sec. 16. of the power of territorial legislatmres to create. — it IS 
 evident that the various legislatures of our territories, under the 
 general legislative authority conferred by congress, may create 
 corporations as incident to the authority possessed by them, sub- 
 ject, however, to the provisions of the acts of congress conferring 
 
 alty thereof, dismiss such officers or 
 any of them ut pleasure, and appoint 
 others to fill their places. 
 
 Sixth. To prescribe, by its board of 
 directors, by-laws, not inconsistent 
 with law, regulating the manner in 
 which its stock shall be transferred, its 
 general business conducted, and the 
 privileges granted to it by law exer- 
 cised and enjoined. 
 
 Seventh. To exercise by its board 
 of directors or duly authorized offi- 
 cers or agents, subject to law, all 
 such incidental powers as shall be 
 necessary to carry on the busiiiess of 
 banking ; by discounting and negotiat- 
 ing promissory notes, drafts, bills of 
 exchange and other evidences of debt; 
 by receiving deposits ; by buying and 
 selling exchange, coin and bullion ; 
 by loaning money on personal security; 
 and by obtaining, issuing, and circu- 
 lating notes according to the provis- 
 ions of this title. But no association 
 shall transact any business except such 
 as is incidental and necessarily pre- 
 liminary to its organization, until it 
 
 has been authorized by the comptroller 
 of the currency to commence the busi- 
 ness of banking. 
 
 Sec. 5137. A national banking asso- 
 ciation may purchase, hold, and con- 
 vey real estate for the following pur- 
 poses, and for no others : 
 
 First. Such as shall be necessary 
 for its immediate accommodation in 
 the transaction of its business. 
 
 Second. Such as shall be mortgaged 
 to it in good faith by way of security 
 for debts previously contracted. 
 
 Third. Such as shall be conveyed 
 to it in satisfaction of debts previously 
 contracted in the course of its dealings. 
 
 Fourth. Such as it shall purchase at 
 sales, under judgments, decrees or 
 mortgages held by the association, or 
 shall purchase to secure debts due it. 
 But no such association shall hold 
 such real estate under mortgage, or 
 the title and possession of any real 
 estate purchased to secure any debts 
 due to it for a longer period than five 
 years. 
 
 ' 1 Kyd on Corp. 50 ; 1 Bl. Com. 473. 
 
 2 1 Bl. Com. 473. See, also, 3 Wills., 
 § 409 ; St. Mary's Church, 7 S. & R. 
 517 ; State v. Armstrong, 3 Sneed, 634; 
 
 Riddick v. Amelin, 1 Mo. 5 ; Mayor, 
 etc., V. Shelton, 1 Head (Tenn.), 24; 
 Vance v. Farmers' Bank. 1 Blackf. 
 (Ind.) 80.
 
 How Corporations are Created. 19 
 
 this authority. In such cases tlic soveriegn authority of the 
 Uuited States, or of congress as the representative of it, is con- 
 ferred upon the legislature of the territory, and the territorial 
 authority in this respect is supreme. 
 
 It is now, however, expressly provided by an act of congress 
 that " the legislative assemblies of the several territories shall 
 not grant private charters or special privileges, but may, by gen- 
 eral incorporation acts, permit persons to associate themselves to- 
 gether as bodies corporate, for mining, manufacturing and other 
 industrial pursuits, or the construction or operation of railroads, 
 irrigating ditches, and the colonization and improvement of lands 
 in connection therewith, or for colleges, churches, libraries, or any 
 benevolent, charitable or scientific association." ' 
 
 If, by virtue of any special or general act of such territorial 
 legislature, a corporation is created or organized, it could not be 
 affected in respect to its corporate rights by the subsequent adop- 
 tion of a state constitution, or by any change made by subsequent 
 acts of the legislature thereunder in relation to incorporations.^ 
 
 Sec. it. Corporations by prescription in this country. — vV e have 
 already referred to the existence of corporations by prescription 
 in England, and shown that even in this country the same doc- 
 trine has been recognized in refel'ence to corporate existence." The 
 English doctrine has been recognized in relation to a class of cor- 
 porations now very limited in this country, where the corporate 
 rights were conferred previous to our independence. The com- 
 mon law of England at that time became apart of our inheritance, 
 and corporations then existing here, with all their common-law 
 incidents, continued to exist, and were not affected by the new 
 organization and establishment of our government. At that 
 time the English church establishment existed in this country, 
 carrjdng with it those corporate rights of the parsons thereof to 
 take in succession, and securing to him and other officers of the 
 church all the common-law corporate rights pertaining to them. 
 If before the Revolution an Episcopal church was duly estab- 
 
 1 Rev. Stat U. S. (1874), tit. 23, chap. 4 How. 268 ; Myers v. Bank, 20 Ohio, 
 1 ; tit. Territories, p. 333, § 1889. 83. 
 
 ^Vincennes University v. Indiana, ^ Ante, § 13 ; 2 Kent's Com. 277.
 
 20 PkIVATE COKPORAIIONS. 
 
 lislied, the parson was by the common law entitled to the glebe 
 jitre ecdesice, and was capable of transmitting the inheritance ; 
 and such corporations have been recognized by our courts since 
 the establishment of our govermnent.^ Where a parish had acted 
 as a corporation for more than forty years it was held proper to 
 show its corporate existence by reputation.^ And where for thirty 
 years a town had exercised corporate privileges, it was permitted 
 to show this by parol as tending to prove that it had been duly 
 incorporated with the ordinary powers of incorporated towns." 
 
 On the subject of the continuance of corporate rights existing 
 in this country at the time of the establishment of our independ- 
 ence, Mr. Kent observes : " There are, however, several of the 
 corporations now existing in tliis country, civil, religious and 
 eleemosynary, which owed their origin to the crown and under 
 the colonial administration. Those charters granted prior to the 
 E-e volution were upheld either by express provision in the consti- 
 tutions of the states, or by general principles of public and com- 
 mon law, of universal reception ; and they were preserved from 
 forfeiture by reason of any nonuser or misuser of their powers 
 during the disorders which necessarily attended the Kevolu- 
 tion." ' 
 
 The recognition of corporations by prescription is from the 
 reasonable presumption, that as they have been recognized and 
 suffered to exist for a long time they were originally lawfully 
 created. In England the doctrine is more important than in this 
 country, where our existence as a nation is comparatively short, 
 where corporations are all created by legislative acts, and there 
 are few occasions for the application of it to corporate claims. 
 
 Sec. 18. roreign joint-stock companies may be corporations. — In 
 a recent case in this country, an English joint-stock company, hav- 
 ing the incidents and powers of a corporation at common law, was 
 held to be a corporation, although acts of parliament, in accord- 
 ance with a local policy, declared that it should not be so held. 
 The company was organized under the laws of Great Britain, 
 
 ' Town of Pawlet V. Clark, 9 Crancli, 5 H. & J. (Md.) 122 ; Warden, etc., v. 
 
 294 ; Terrett v. Taylor, id. 43. Hart, 1 C, & P. 113. See, also, 1 Dill. 
 
 '■'Dillingham v. Snow, 5 Mass. 547. on Corp., S 17 ; ante, § 14. 
 
 ^Hagerstown Turn. Co. v. Creeger, *2 Kent s Com. 276.
 
 How Corporations are Created. 21 
 
 for the purpose of conducting the business of insurance under a 
 certain deed of settlement, legalized and enlarged by acts of par- 
 liament, and by virtue of such deed and such acts possessing the 
 following characteristics and powers : 1. A distinctive and artifi- 
 cial name, by which it could make contracts ; 2. A statutory 
 authority to sue and be sued in the name of its oflicers as the 
 representatives of the whole body ; 3. Perpetual succession by 
 the transfer and transmission of the shares of its capital stock, 
 when new members were introduced in the place of those who died 
 or sold out ; 4. An existence as an entity apart from the share- 
 holders, which enables it to sue its stockholders and be sued by 
 them. A statute of Massachusetts, where the company was tran- 
 sacting business, imposes upon " each fire, marine, and each fire 
 and marine insurance company, incorporated or associated under 
 the laws of any government or state, other than one of the United 
 States, a tax of four per cent upon all premiums charged or 
 received on contracts made in this commonwealth for insurance 
 of property." The same statute imposes a tax of but two per 
 cent upon such premiums M'hen the company is incoi^porated 
 under the laws of any one of the United States other than Massa- 
 chusetts; and upon such companies incorporated by itself in 
 Massachusetts only one per cent, while no tax is imposed by the 
 laws of the state upon the business of insurances transacted by 
 any natural persons citizens of the same. The company failed 
 to pay the tax prescribed by the statute, and the state filed a bill 
 in the proper court to enforce the payment of the same or the 
 suspension of the business of the company. In defense the com- 
 pany claimed that it was not incorporated at all, but was merely 
 an association under the laws of Great Britain, having the legal 
 character of a partnership ; and that it could not be taxed as a 
 "company incorporated nnder the laws of any government or 
 state other than one of tlie United States ; " that the character of 
 the association must be determined by the laws of Great Britain ; 
 that under those laws the association was a mere partnership of a" 
 large number of persons, having certain privileges granted by 
 statute ; that these privileges cannot be enjoyed in this country ; 
 that they relate to remedies ; that the acts of parhament are in- 
 operative beyond the limits of the jurisdiction of the courts of
 
 22 PkIVATE CoRrORATIONS. 
 
 Great Britain; tliat the riglit to be sued in the names of its offi- 
 cers is of no avail in tliis country; and that the English authori- 
 ties sliow that the association is not a corporation.' On the 
 other side it was chiimed that this association was, by act of par- 
 liament, clothed with all the characteristics of a corporation ; and 
 that its legal character could not be changed by calling it some- 
 thing else. 
 
 On the final hearing of this case the company was enjoined 
 from the further prosecution of its business until the taxes found 
 due should be paid. And the supreme court of the United States, 
 to which the case was taken, affirmed this judgment. Justice 
 Miller, in delivering the ojDinion of the court, remarks : " The 
 bankino; business of the states of the Union is now conducted 
 chiefly by coi-porations organized under a general law of congress, 
 and it is believed, that in all the states, the articles of association 
 of this company would, if adopted with the usual formalities, 
 constitute it a corporation under their general laws, or it would 
 become so by such legislative ratification as is given by the acts of 
 parliament we have mentioned. To this view it is objected that 
 the association is nothing but a partnership, because its members 
 are liable individually for the debts of the company. But, how- 
 ever the law on this subject may be held in England, it is quite 
 certain that the principle of personal liability of the shareholders 
 attaches to a very large portion of the corporations of this country, 
 and it is a principle which has warm advocates for its universal 
 application when the organization is for pecuniary gain. So, also, 
 it is said that the fact that there is no provision, either in the 
 deed of settlement or the act of parliament, for the company 
 suing or being sued in its, artificial name forbids the corporate 
 idea. But we see no real distinction, in this i-espect, between the 
 act of parliament, which authorizes suits in the name of the 
 Liverpool and London Fire and Life Insurance Company, and 
 that which authorized suit against that company in the name of 
 its principal officer. If it can contract in the artificial name and 
 sue and be sued in the name of its officers on those contracts, it 
 
 ' Harrison v. Timmons, 4 M. c& W. & G. 563 ; Mavliew's case. 5 id. 837 ; 
 
 510 ; Bartlett v. Pentland, 1 B. & Ad. Blakeley's Ex'rs, 13 Beav. 133 ; 
 
 704 ; Van Sandau v. Moore, 1 Russ. Barnes v. Pennell, 2 H. of L. C. 497. 
 441 ; Cape's Ex'rs, 2 De Oex, Macn.
 
 How Corporations are Crkated. 23 
 
 is in effect the same, for process would have to be served on some 
 such officer, even if the suit were in such artificial name. It is 
 also urged that the several acts of parliament we have mentioned 
 expressly declare that they shall not be held to constitute the 
 corporate body a corporation. But whatever may be the effect 
 of such a declaration in the courts of that country, it cannot alter 
 the essential nature of a corporation or prevent the courts of 
 another jurisdiction from inquiring into its true character, when- 
 ever that may come in issue. It appears to have been the policy 
 of the English law to attach certain consequences to incorporated 
 bodies, which rendered it desirable that such associations as these 
 could not become, technically, corporations. Such local policy 
 can have no place here in determining whether an association, 
 whose powers are ascertained and its privileges conferred by law, 
 is an incorporated body. The question before us is, whether an 
 association, such as the one we are considering, in attempting to 
 carry on its business in a maimer which requires corporate powers 
 under legislativ^e sanction, can claim, in a jurisdiction foreign to 
 the one which gave those powers, that it is only a partnership -of 
 individuals. We have no hesitation in holding that, as the law 
 of corporations is understood in this country, this association is a 
 corporation, and that the law of Massachusetts, which only per- 
 mits it to exercise its corporate function in that state, on the con- 
 dition of a payment of a specific tax, is no violation of the 
 federal constitution, or of any treaty protected by said con- 
 stitution." 
 
 Sec. 19. The corporate name. — In whatever manner a corpora- 
 tion is created, it is necessary that it be designated by a particu- 
 lar name. If it is created by charter or special legislative act, the 
 name is necessarily given, "for the name is as it were the very 
 being of the constitution, without which they could not perform 
 their corporate acts, for it is nobody to plead and be impleaded, 
 to take and give, until it hath gotten a name." '^ The name of a 
 corporation is the name of its baptism. Blackstone observes ; 
 
 ' Liverpool L. & G. Ins. Co. v. Comm., ^ Bac. Abr., tit. Corp. Co. 
 10 Wall. 566. See, also, Paul v, Vir- 
 ginia, 8 id. 168.
 
 24 Private Coepoeations. 
 
 " Where a corporation is erected a name must be given to it, and 
 by that name it must sue and be sued, and do all legal acts, 
 though a minute variation therein is not material. Such name is 
 the very being of its constitution, and through it the will of the 
 king that erects the corporation is expressed, and the name is the 
 knot of its combination, without which it could not perform its 
 corporate functions."' It is not only essential that it should have 
 a particular name to distinguish it from other corporations, but 
 also by which it may contract, and grant and receive property, 
 and sue and be sued.^ A corporation may acquire a name by 
 prescription'' and, it seems, may have more than one name,* but 
 this is confined to corporations by prescription, and those consti- 
 tuted by charter, or under statutes, and have but one name at the 
 same time, for the- same purpose' unless so provided in the 
 charter. It seems, however, that a corporation may be incor- 
 porated by one name and have power to,sue and hold property by 
 another. ° 
 
 If a corporation is organized under general statutory provisions, 
 it is usually provided that it shall have some name, as well as a 
 location, and by such name only can it exercise the corporate func- 
 tions ; and the name given by the charter or special act, or 
 assumed under general laws, cannot be changed by corporate 
 action.' But where the constitution prohibits the creation of cor- 
 porations by special enactments, this does not prohibit the chang- 
 ing of tlie name of a corporation by such legislation. In a recent 
 case in California, involving this question it was held, that the 
 mere changing of the name of a corporation was not the creation 
 
 1 1 Bl. Com. 474. " Every corpora- Hall (N. Y.), 191 ; Middlesex Husband- 
 
 tion should have a name by which it men v. Davis, 3 Met. (Mass.) 183. 
 
 should be known as grantor and ^ Knight v. Mayor,! Ld.Raym. 80; 
 
 grantee, and to sue and be sued, and Anon., 1 Salk. 103. 
 
 do all legal acts. Such name is the ^ Butler v. President of the College 
 
 very being of its constitution, the of Physicians, Cro. Cas. 256. 
 
 'knot of its combination,' without ' 1 Dill. on Corp., §§ 119, 120. " Part- 
 
 which it could not perform its corpo- nerships and simply joint-stock trading 
 
 rate functions." Smith's Mer. Law, 133. companies may be at liberty to change 
 
 '■^ 1 Dill, on Corp., § 117; Walker on their name or style, yet after a com- 
 
 Am. Law, 224. pany has been incorporated by a name 
 
 2 Smith V. Plankroad Co., 30 Ala. set forth in the act of incorporation, 
 
 650 ; Dutch West India Co. v. Moses, such incorporated company has not the 
 
 1 Strange, 614. right nor the power to change its 
 
 ^All Saints' Church v. Lovett, 1 name." Id.; Regina v. Registrar, etc., 
 
 10 Ad. &E1. (N. S.)839.
 
 How Corporations are Created. 
 
 25 
 
 of a corporation in the sense of the constitution ; that it was no 
 more the creation of a corporation than the changing- of the name 
 of a natural person is the begetting of a natural person, and that 
 a change of name is not a change of being.' 
 
 But it is said the name may not only be expressed in the 
 patent, but implied in the nature of the thing. As if the king 
 should incorporate the inhabitants of Dale, with power to choose 
 a mayor annually, though no name be given, yet it is a good cor- 
 poration by the name of the mayor and commonalty." 
 
 ' Pacific Bank v. De Roe, 37 Cal. 538; 
 Wile, on Corp. 34 ; Episcopal Society 
 V. Episcopal Churcii, 1 Pick. 373. But 
 the mere fact of similarity iu name 
 without proof that the first company 
 is likely to suffer injury thereby, is 
 not sufficient to justify a court of equity 
 in restraining the latter company from 
 using such name. London and Pro- 
 vincial Law Association Society v. Lon- 
 don Provincial Joint-Stock Life Ins. 
 Co., 11 Jur. 938. A change of name 
 does not necessarily involve a change 
 of the identity of the corporation. 
 Girard v. Philadelphia, 7 Wall. 1 . In 
 a recent case in Tennessee it was held 
 that a court of equity may, upon ob- 
 jection being made to the organization 
 of a corporation by a specific name, on 
 the ground that another corporation has 
 already adopted the proposed name, or 
 one so near like it as to lead to confu- 
 sion, requires a sufficient modification 
 of it as to obviate the objection. Ex 
 parte Walker, 1 Tenn. Ch. 97. See, also, 
 Newby v. Oregon, etc., R. Co., Deady 
 (U. S. C. C), 609; Holmes v. Holmes 
 Man. Co., 37 Conn. 378. Although the 
 name of a corporation has been changed 
 by an act of the legislature, yet if it 
 continues to conduct its business in its 
 original name, and otherwise exclu- 
 sively uses such name, it may by usage 
 retain and regain its original name and 
 sue and be sued thereby. Alexander 
 V. Berney, 38 N. J. Eq. 90. As to the 
 sufficiency of a name under the Indiana 
 statute of May 13, 1853, see Naber v. 
 Bright, 33Ind. G9. A corporation may 
 acquire a name by usage. Smith v. 
 Plankroad Co.. 30 Ala. 650. A mere 
 change of name by the legislatuie does 
 not affect the rights of third peisons. 
 Rosenthal V. Madison, etc., R. Co., 10 
 Ind. 359. A corporation may be known 
 4 
 
 by one name by prescription and one by 
 grant; but where there is more than 
 one grant the last grant will take the 
 place of the others. Knight v. Wells, 
 1 Ld. Raym. 80 ; Anonymous, 3 Salk. 
 103 ; Manufactui:ing Company v. Davis, 
 14 Johns. 838 ; Middlesex, etc. , v. Davis, 
 3 Mete. 133; Trustees, etc., v. Peaslee, 
 15N. H. 317. 
 
 "The name of incorporation," says 
 Sir Edward Coke, " is a proper name 
 or name of baptism ; and therefore 
 when a private founder gives his col- 
 lege or hospital a name, he does it only 
 as god-father, and by that same name 
 the king baptizes the corporation. But 
 though the name of a corporate body 
 is compared to the Christian name of a 
 natural .person, yet the comparison is 
 not in all respects perfectly correct. A 
 Christian name consists in general of a 
 word, as Oliver or Robert, in which 
 the alteration or omission of a single 
 letter may make a material alteration 
 in the name. The name of a corpora- 
 tion frequently consists of several 
 words, and an omission or alteration 
 of some of them is not material." 1 
 Com. Dig., tit. Franchise, F. 9.; 10 R. 
 39 b.; Smith's Mer. L. 133 ; Bac. Abr., 
 tit. Corp.; 1 Kyd on Corp. 337. 
 
 In Missouri it has recently been held 
 that after the changing of a name of a 
 corporation for convenience, where it 
 continues the same business with the 
 same ofiicers, it is responsible under 
 the new name for all its previous debts 
 Dean v. La Motte Lead Co., 59 Mo. 533. 
 
 ' Anon., 1 Salk. 191; 10 Co. 33. If a 
 note or other obligation is executed to 
 a corporation by a name differing from 
 the corporate name, suit may be 
 brought thereon by the corporation iu 
 its true name, by alleging that it is the 
 party to whom the obligation was
 
 26 
 
 PkIVATB C0KPOKA.TIONS. 
 
 Sec. 20, The location of corporation. — Tlie location of corpora- 
 tion should, in all cases, be designated. The legal existence 
 of a corporation is confined to the territory of the sovereignty 
 creating it ; and it is held that it cannot lawfully meet and act in 
 a corporate cajsacity, outside the boundaries of the state in which 
 it was created.' But this rule in reference to meetings does not 
 apply to directors, or other agents and officers of the company 
 who may assemble or transact business.* But corporate meetings 
 will constitute the subject of a subsequent chapter, where it will 
 be fully considered. A corj)oration should be constituted of some 
 place, and it has no legal existence outside of the terri- 
 tory of the sovereignty by which it was created." But its legal 
 residence is not necessarily confined to tlie locality of its principal 
 office of business, but may be anywhere within the territorial 
 limits of the state.^ And a corporation may, through its agents, 
 transact business and enjoy corporate privileges in other states. 
 It may, byt he comity of states, carry on its lawful business, ac- 
 quire, hold and transfer property in any of the states or teri'ito- 
 
 made. African Society v. Varick, 13 
 Johns. 3b; Trustees, etc., v. Reneau, 3 
 Swau (Teim.),y4; Fort Wayne v. Jack- 
 son, 7 Blackt. (lud.) 36 ; Thatcher v. 
 West River National Bank, 19 M4ch. 
 196. In Hammond v. Shepard, 29 
 How. Pr. (N. Y.), 188, an objection 
 that the promise sued on was to the 
 "New York Central College," when 
 the true name was the " New York 
 Central College Association," was held 
 to be obviated by proof that the col- 
 lege was known by both names. See, 
 also, Coulter v. Trustees, etc., 29 Md. 
 69. In Johnson v. Indianapolis, 16 
 Ind. 227, the general law authorized a 
 
 town or city to adopt its provisions as 
 a charter, and a city having done this, 
 it was held that it was authorized 
 to retain its former name, and would 
 be presumed to have done so. A deed 
 made to a corporation by a name dif- 
 fering from its true one may be sued 
 in its true name, it being averred in 
 the complaint that the deed was in- 
 tended for it. North-western Distillery 
 Co. V. Brant, 09 III. 658. 
 
 If a corporation, sued by a wrong 
 name, appears and answers to the suit 
 without objection, the defect is cured. 
 Virginia, etc., S. Nav. Co. v. U. S., 
 Taney (U. S. C. C), 418. 
 
 1 Miller v. Ewer, 37 Me. 506; McCall 
 V. Byram Manuf. Co., 6 Conn. 428 ; 
 Bank of Augusta v. Earle, 13 Pet. 519 ; 
 Barnum v. Blackstone Canal Co., 1 
 Sumn. 47; Runyon v. Lessee, etc., 14 
 Pet. 129 ; Day v. Newark India Rub- 
 ber Co., 1 Biatchf. 628 ; Marshall v. 
 The Baltimore, etc., R. R. Co., 16 
 How. 314; The Covington Draw Bridge 
 Co. V. Shepherd, 20 id. 233; 1 Redf. on 
 Rail. 56, 57. 
 
 "^ Wood Hydraulic, etc., Co. v. King, 
 
 45 Ga. 34 ; McCall v. Byram Manuf 
 Co., 6 Conn. 428. 
 
 '^ See, also. Bank of Augusta v. Earle, 
 13 Pet. 519 ; Miller v. Ewer, 27 Me. 
 509; Farnum v. Blackstone Canal Co., 
 1 Sumn. 47; Runyon v. Lessee, 14 
 Pet. 129; Covington Draw-Bridge Co. 
 V. Shepherd, 20 How. 233; Day v. 
 Newark, etc., Co., 1 Biatchf. (C. C.) 
 638; McCall V. Byram Manuf. Co., 6 
 Conn. 428. 
 
 •*Glaize V. S. C. R, R. Co., 1 Strobh. 
 (S. C.)70.
 
 How CORPOKATIONS ARE CeEATED. 27 
 
 ries, the same as individuals might do, and enforce its legal riglits 
 and obtain i-edress of its wrongs, and may sue and be sued on its 
 contracts/ 
 
 Sec. 21. Words of incorporation in royal charters. — Questions fre- 
 quently arose in former times, as to the sufficiency of the language 
 used in royal charters, to confer corporate powers and privileges. 
 The words most commonly used for this purpose were " we 
 create, erect, found and incorporate ; " creamus^ erigim,us, fun- 
 damics, incorporamus. But while these words were commonly 
 used to create corporations, it was held that they were not essen- 
 tial." Questions of this kind can seldom arise in this country, 
 where all our corporations are constituted such, by legislative 
 acts, and usually under some general statute. These statutes 
 provide for the incorporation of persons on their complying with 
 the requirements of the statutes. And where no special powers 
 are conferred by the statutes, the organization would undoubtedly 
 secure the ordinary common-law powers, franchises and incidents 
 of a corporation. And under theinodeof incorporation by legis- 
 lative authority there can seldom arise any question requiring 
 any application of the English doctrine of incorporation by im- 
 plication.' "It is not necessary," observes Mr. Kyd, "that the 
 charter should expressly confer those powers, without which a 
 collective bod}^ of men cannot be a corporation, such as the power 
 of suing and being sued, and to take and grant property ; though 
 powers are, in general, expressly given," ^ And if the name 
 should be omitted in the charter, still, if from its language, or the 
 nature of the tiling granted, this could be ascertained, it would 
 be sufficient to constitute a corporation, by the name thus indi- 
 cated.^ And where an act of the legislature of Arkansas merely 
 
 * 
 
 1 Ducat V. The City of Chicago, 48 30 ; 1 Roll. Abr. 513 ; Conservators of 
 111. 173 ; Cowell v. Colorado Springs the River Tone v. Ash, 10 B. & C. 349. 
 Co., 100 U. S. 55. See, also, 3 Kent's Com. 376 ; Sutton 
 
 2 The case of Sutton's Hospital, 10 Hospital, 10 Co. 37; Roll. Abr., tit. 
 Coke, 37a, 38a, 39b, 30 ; 1 Kyd on Corp. Corp. F. ; Dyer's R. 100. 
 
 63 ; 3 Kent's Com. 376 ; 1 Roll. Abr., ^ 1 Kyd on Corp. 63. See, also, Case 
 
 tit. Corp. F.; Denton v. Jackson, 3 of the Borough of Yarmouth, 3 B. & 
 
 Johns. Ch. 335. G. 393 ; Poor, etc., v. Sears, 33 Pick. 
 
 3 "If the king grants to a sat of 133; 1 Dill, on Corp., ^ 31. 
 
 men to have guildham mercatorUim, a ^ Trustees, etc., v. Parks, 10 Me. 441; 
 
 mercantile meeting or assembly, this School Comm'rs v. Dean, 3 Stew. & 
 
 is alone sufficient to establish them Port. (Ala.) 190. 
 forever." 1 Bl. Com. 474 ; 10 Rep.
 
 28 PiiivATE Corporations. 
 
 provided that a bank should be established, without otlier incor- 
 porating words, but it also provided for a certain number of 
 directors, and the usual banking powers were conferred upon 
 them, it was hekl that the directory was incorporated by implica- 
 tion, and that they possessed the ordinary powers of a corporate 
 body.* It may be affirmed, as a general principle, that where 
 rights, franchises and powers are granted by a competent author- 
 ity to a body or association of persons, and the exercise of these 
 cannot be enjoyed, unless they are considered as a corporate body, 
 they will be considered as such by implication, although no cor- 
 porate powers are expressly granted.^ 
 
 Sec. 22. Common-law incidents of a corporation. — The COmmon- 
 law incidents of a corporation are perpetual succession ; and the 
 right to sue and be sued in the corporate name ; to plead and be 
 impleaded; to grant and receive property; to purchase lands and 
 hold them for the benefit of themselves and their successors ; to 
 have a common seal ; and to make by-laws for the regulation and 
 government of the affairs of the corporation.^ 
 
 Sec. 23. Acceptance of the grant.— The acceptance of the charter 
 or act, or the provisions of the general statutes providing for 
 incorporation, is necessary in order to create a private corporation. 
 In this respect a private corporation differs from a public one, as 
 we shall hereafter more particularly notice.* A charter or legis- 
 
 ' Mahoiiy v. Bank of Arkansas , 4 construed upon the same principles 
 Ark. 620; Murphey v. Bank of Ar- which apply to contracts between in- 
 kansas, 2 Engl. (Ark.) 57 ; Woodruff v. dividuals. State v. Noyes, 47 Me. 189. 
 Attorney-General, 8 id. 836 ; 1 Kyd on But where the rights of individuals, 
 Corp. 63 ; Falconer v. Campbell. 2 Mc- in the lawful enjoyment of their prop- 
 Lean (C. C), 195. erty, is involved, in the determination 
 
 -Stebbins v. Jennings, 10 Pick. 187 ; of corporate claims, the rights of cor- 
 
 Commouwealth v. Westchester R. R. porations under their charters are not 
 
 Co., 8 Grant's (Penu.) Cas. 200 ; New to be extended by implication. Au- 
 
 Boston V. Dunbarton, 15 N. H. 201. burn, etc., R. R. Co. v. Douglass, 9 
 
 But a corporation created by statute N. Y. 444. See, also, Bank of Penn- 
 
 can exercise no powers except those sylvania v. Commonwealth, 19 Penn. 
 
 expressly given or necessarily implied. St. 144. 
 
 Perrine V. Chesapeake, etc., Canal Co. , ^1 Bl. Com. 475; 2 Kent's Com. 
 
 9 How. 1S2. The construction of the 277; Kyd on Corp. 13, 69, 70. 
 charter must be such as would best * See post, chap. 3. The king cannot 
 
 carry ii}to effect the will of the legis- incorporate a body of men without 
 
 lature. Chesapeake, etc., Canal Co. v. their assent. Until his charier has 
 
 Key,3Cranch(C. C), 599. The contract been accepted, it is inoperative. When 
 
 between the government and a corpo- once accepted, the acceptance is irre- 
 
 ration created by its charter is to be vocable. The acceptance must be by
 
 How Corporations are Created. 29 
 
 lative act of incorporation is nsuall}^ a mere offer or tender of the 
 corporate privileges contained in it, or if no privileges are speci- 
 fied, then of the common-law powers and immnnities, and the 
 common-law incidents of corporations. The sovereign authority 
 cannot compel persons to become a private corporation. They 
 can only become such by their voluntary consent. But this con- 
 sent, as we shall have occasion hereafter to consider, may be in- 
 ferred from their acts,* A charter or act of incorporation, for 
 private purposes and personal objects, if accepted, becomes a con- 
 tract between the parties accepting and the state, and an offer of 
 corporate privileges, on the one side, must be accepted on the 
 other, in order to give the contract full force and virtue. This 
 doctrine is established by the uniform current of decisions of 
 courts of highest authority, not only in this country but in Eng- 
 land. In the Dartmouth college case, the court say : " Dr. 
 Wheelock, acting for himself, and for those who, at his solicitation, 
 had made contributions to his school, applied for this charter, as 
 the instrument which should enable him and them to perpetuate 
 their benevolent institution. It was granted. An artificial 
 immortal being was created by the crown, capable of receiving 
 and distributing forever, according to the will of the donors, the 
 donations which should be made to it." 
 
 After a charter has been accepted, it is within the power of the 
 legislature to amend it in every respect, so that it does not im- 
 pair any vested right, and in that event the corporation is bound 
 by the amendment, and if it continues business after its adoption 
 it is presumed that it accepted it, and no other proof of accept- 
 ance is necessary.^ The rule is, that when the powers of a corpo- 
 
 those to whom it is addressed ; and it or not at all, for there can be no partial 
 
 is held that a valid acceptance may acceptance without the consent of the 
 
 be made by a majority of the grantees, crown, which must be shown by mat- 
 
 The charter must be accepted in toto, ter of record. Dill, on Corp., § 15. 
 
 ' 2 Kent's Com. 277 ; Charles River partment, etc., v. Kipp, 10 Wend. 266; 
 
 Bridge v. Warren Bridge, 7 Pick. 344; Falconer v. Campbell, 2 McLean (C. 
 
 Bank of United States v. Dandridge, C), 196; Dartmouth College v. Wood- 
 
 12 Wheat. 70. See, also. Goddard v. ward, 4 Wheat. 518. 
 
 Pratt, 16 Pick. 412 ; Green v. Sey- '•^ Cincinnati, etc., R. R. Co. v. Cole, 29 
 
 mour, 3 Sandf. Ch. 285 ; York & Co. Ohio St. 126 ; Talladega Ins. Co. v. 
 
 v. Regina, 18 Eng. L. & E. 199; Landers, 43 Ala. 115; Logan v. Mc- 
 
 Ellis v. Marshall, 3 Mass. 269 ; Lincoln Allister, 2 Del. Ch. 176. 
 v. Richardson, 1 Me. 79 ; Fire De-
 
 30 Private Cokporations. 
 
 ration are enlarged or curtailed by the legislature without provid- 
 ing any mode for their acceptance, the exercise of such powers by 
 it is sufficient evidence of acceptance, and this rule applies equally 
 in a case where the powers are conferred by general law, which 
 is declared applicable to any corporation that may accept its pro- 
 visions.* So, too, the organization of a company under a charter 
 is sufficient evidence of its acceptance. Indeed, exercising the 
 privileges granted is conclusive evidence of the fact of acceptance.'' 
 
 Sec. 24. Mode of acceptance.— The charter or act may be ac- 
 cepted by a vote of a majority of the corporators ; ^ but such 
 direct action is not essential. If the persons or association to 
 whom a grant of corporate privileges is tendered proceeds to act 
 under it, this is an acceptance, and the contract, between the state 
 and the corporators, becomes complete. If the persons have 
 applied for a charter, the offer of it to them is 'said to be in fieri, 
 and they may still accept or refuse it.* Although the secretary 
 may be required to keep a record of the proceedings of meetings 
 of the stockholders or members, and of the directors, it is not nec- 
 essary that a record be made showing an acceptance of the grant, 
 but acceptance may be inferred from the acts of its agents." 
 
 If certain acts are required to be done by corporators under the 
 provisions of either a special or general act, then, unless those 
 acts are done, the corporation cannot be considered as in being.' 
 But if such acts are done by the persons intended to be bene- 
 
 > Goodin V. Evans, 18 Ohio St. 150. 33. See, also. Rex v. Westwood, 4 B. 
 
 ' Logan v.McAUister, ante; Talladega & C. 786. 
 
 Ins. Co. V. Landers, 43 Ala. 115 ; Hope, It is not necessary that the records 
 
 etc., Ins. Co. v. Beekrtian, 47 Mo. 93 ; of a corporation should show a formal 
 
 Kenton County v. Bank Lick Turn- acceptance of the act. Russell v. Mc- 
 
 pikeCo. , 10 Bush (Ky.), 539. Lellan, 14 Pick. 03. See, also, Sim- 
 
 ' Lincoln, etc., Bank v. Richardson, rail v. Mutual Ins. Co., 40 Mo. 27; 
 
 supra ; Commonwealth v. Jarrett, 7 S. Taylor v. Newberne, 3 Jones' (N. C.) 
 
 & R. 461 ; Dartmouth College V. Wood- Eq. 141 ; Hudson v. Carman, 41 Me. 
 
 ward, s?/p?a. 84; Mead v. Keeler, 24 Barb. 20; 
 
 * Charles River Bridge v. Warren Zabriskie v.C , C. & C. R. Co., 33 How. 
 
 Ri V. Bridge, 7 Pick. 344 ; State v. Daw- (U. S . ) 381. 
 
 son, 16 Ind. 40. « Yhv. Dept. v. Kipp, 10 Wend. 266 ; 
 
 5 Taylor v. Griswold, 14 N. J. L. 2 Kent's Com. 393; 1 Redf. on Rail w. 
 
 223 ; Fairfield Turnpike Co. v. Thorp. 64 ; Minor v. The Mech. Bk., 1 Pet. 46 ; 
 
 13 Conn. 173 ; Rex v. Ash well, 12 East, Burt v. Farrar, 34 Barb. 518.
 
 How COKPOKATIONS ARE CrEATED. 31 
 
 fitecl or incorporated, the corporation is complete, and the duties 
 imposed by the act will attach to the corporation.' 
 
 Sec. 25. If they have held meetings, adopted by-laws, elected 
 officers, or done other corporate acts, this would be evidence of 
 acceptance of the grant, though no formal acceptance of record 
 could be shown. And the doing of acts by persons acting in the 
 usual way of corporate agents, and which would not be consistent 
 except upon the theory of acceptance, would be evidence of it.^ 
 It has been held in Michigan that a person who has dealt with a 
 body professing to act as a corporation as such, cannot question 
 its corporate existence, for the purpose of charging its members 
 with liability as partners,^ unless, perhaps, he has been misled by 
 the acts and representations of the persons composing it. 
 
 Sec. 26. Acceptance must be unconditional. — If a charter IS of- 
 fered, it is only necessary, as a general rule, that it be accepted by 
 a majority of the persons mentioned as corporators.* But it must, 
 in all cases, if accepted, be taken unconditionally ; and by accept- 
 ing the privileges conferred, the corporators will be required to 
 perform the conditions imposed by it. Nor can the corporators 
 claim the benefits of the charter unless they perform all the pre- 
 cedent conditions required by it in order to constitute the corpo- 
 ration. These conditions precedent are any thing which, l)y the 
 express provisions of the charter or act, are required to be per- 
 formed by the persons claiming the benefit of it, as a preliminary 
 to incorporation, or the foundation for the exercise of the powers 
 
 ' Riddle v. Proprietors, etc., 7 Mass. or other unequivocal acts on its part, 
 
 187 ; Goshen Turnpike Co. v. Sears, 7 but this cannot prevail against direct 
 
 Conn. 86 ; Shortz v. Unangst, 3 W. & proof. Lyons v. O. A. & M. R. Co., 
 
 S. 45 ; Bank of U. S. v. Dandridge, 13 33 Md. 18; Narragansett Bank v. At- 
 
 Wheat. 70. The mere passage of an lantic Silk Co., 3 Mete. 883; Dedhain 
 
 act of incorporation does not make the Bank v. Chickering 3 Pick. 335 ; Pe- 
 
 contract, as it may be repealed prior nobscot Broom Co. v. Lamson, 16 Me. 
 
 to a full acceptance by the corporation. 334. 
 
 Mississippi Society v. Musgrove, 44 ^Merchants' Bank v. Stone, 38 
 
 Miss. 830 ; S. C, 7 Am. Rep. 733. Mich. 779. 
 
 ^Crump v. U. S. Mining Co., 7 * Rex v. Amery, 1 T. R. 575; Penob- 
 
 Qratt. 353; Cahill v. Kalamazoo scot Bank v. Lamson, 16 Me. 334; 
 
 Mutual Insurance Co., 3 Mich. 134 ; Day v. Stetson, 8 Me. 365; Curry v. 
 
 Bac. Abr., tit. Corp. Acceptance of Railroad Co., Penn. St. (1868) ; Lyoue 
 
 an act of a legislature maybe inferred v. Orange, etc., R. Co., 33 Md. 18. 
 from the exercise of corporate powers.
 
 32 Pkivate Corporations. 
 
 and privileges of the grant.' The exercise of a power granted hy 
 an amendment of the charter of a corporation is evidence of an 
 aceptance of the amendment by the corporation.^ And when a 
 charter or amended charter is once accepted, no snbscquent with- 
 drawal of the corporators therefrom can affect the obligations im- 
 posed thereby.' And one who deals with a corporation acting 
 under an amended charter, and m its amended name, cannot com- 
 plain that the amendment has not been properly accepted." A 
 company, also, having accepted a charter, cannot insist that any 
 provision therein was fraudulently obtained, but it is bound by 
 all of its provisions.^ 
 
 Sec. 27. Acceptance under general laws.— Where persons pro- 
 ceed to incorporate under general statutes enacted for this pur- 
 pose, the signing of the preliminary articles of association, or the 
 certificate required by the statute, and a compliance generally 
 with the requirements of the law would undoubtedly be deemed 
 an acceptance of the grant and the conditions of it." "Accept- 
 ance of a charter," says the court, in a Delaware case,' " is neces- 
 
 ' Lyons v. Orange, etc., R. Co., exercising the privileges granted, it 
 
 supra; Alton, etc., R. Co. v. Dietz, will be almost conclusive evidence of 
 
 50 111. 210; S. C, 1 With Corp. CcS. acceptance." Heath v. Silverthorn 
 
 439; 1 Redf. on Rail., § 18, p. 04 et Co., 39 Wis. 146; State v. Sibley, 35 
 
 seq., and notes. Minn. 387. 
 
 ^ Wetumpka, etc., R. Co. v. Bing ^Busey v. Hooper, 35 Md. 15. See, 
 
 ham, 5 Ala. 658; Palfrey v. Paulding, also. Basshor v. Dressel, 34 Md. 503. 
 
 7 La. Ann. 363; Bangor, etc., R. Co. ^Eppes v. Mississippi, etc., R. Co., 
 
 V. Smith, 47 Me. 34. In Hope, etc., Ins. 35 Ala. 33. And a majority may 
 
 Co. V. Beekman, 47 Mo. 93, in an ac- adopt, an amendment. Sprague v. 
 
 tion by a mutual insurance company Illinois lliv. R. Co., 19 111, 174. 
 
 agaiust a person upon a premium note ^ Bushwick, etc, Co. v. Ebbets, 3 
 
 given prior to a change in its charter, Edw. Ch. 353. 
 
 it was held unnecessary for the com- ^Mokelumne, etc., R. Co. v. Wood- 
 pany to prove the acceptance of the bury, 14 Cal. 424; Field v. Cooks, 16 
 amendment by it, and that its assent La. Ann. 153; Ashtabula, etc., R. Co. 
 thereto would be inferred from acts v. Smith, 15 Ohio St. 328 ; Thompson 
 and omissions inconsistent with any v. Candor, 60 111.244; Hunt v. Kan- 
 other hypothesis. See.also, Hope, etc., sas, etc., Bridge Co., 11 Kans. 412; 
 Ins. Co. V. Koeller, 47 Mo. 129. "It Lyons v. Orange, etc., R. Co., supra ; 
 is true," says the court, in Talladega Hope Ins. Co. v. Beekman, 47 Mo. 
 Ina. Co. V. Landers, 43 Ala. 115, "that 93, where it was held that the assent 
 the charter of a corporation must be of the corporation to amendments 
 accepted ; but in cases of private cor- might be inferred from acts or omis- 
 porations created for individual bene- sions inconsistent with any other hy- 
 fit, the presumption is that they are pothfsis. See, also, Hope Ins. Co. v. 
 created at the instance and request of Koeller, id. 129. 
 
 the parties to be benefited thereby, ' Logan v. McAllister, 3 Del. Ch. 
 
 and, consequently, are accepted by 176. 
 them. If, therefore, they are found
 
 How Corporations are Created. 33 
 
 sarj to bring it into operation. But an express or formal decla- 
 ration of acceptance is not required. Organizing and acting 
 under a charter is sufficient evidence of acceptance." ' 
 
 "We shall hereafter consider the nature and character of the 
 accepted charter or corporate contract of a corporation instituted 
 for private purposes, and illustrate the distinctions between them 
 and public corporations. 
 
 Sec. 2S. The term " constating instruments." — It will be apparent, 
 from what has been said in relation to private corporations and 
 the modes bj which tliey may be created, and especially of the 
 manner in which they are usually constituted inthis country, that 
 not only statutory provisions, but various instruments in writing 
 are required. These means and instruments for effecting incor- 
 poration may be numerous : consisting of statutes, articles of as- 
 sociation, deeds of settlement, by-laws and notices ; some of which 
 are usually required to be recorded, and others published. The 
 convenience of using some short term, to express all of these fun- 
 damental acts and instruments, in a work of this character, will 
 be manifest. We, therefore, adopt for this purpose the term 
 "constating instruments." ° 
 
 Sec. 29. Organization of a corporation ; how proved.— The life of 
 a corporation dates from the period of its organization, and not 
 
 ' See, also, Goodin v. Evans, 18 its exact meaning with the circum- 
 
 Ohio St. 150. stances." Brice's Ultra Vires, 38. 
 
 ^Ou this subject, Mr. Brice says: The term "constitution," observes 
 " It may here be observed, that the Mr. Redfield, " as applied to corpora- 
 expression ' constating instruments,' tions, is susceptible of being used in 
 will very generally be employed in very different senses. It may imply 
 this work to signify the document or nothing more than the charter or for- 
 collection of documents which fix the mal grant of corporate organization 
 constitution of any corporation. These and powers by the sovereignty, or it 
 documents are very various, charters, may be applied to certain fundamental 
 letters-patent, statutes of the founder, principles, declared by the corporators 
 acta of parliament, by-laws, deeds of themselves, as the unalterable basis 
 settlement, articles of association, and of the organization of the body ; or if 
 not unfrequeutly they will be very not wholly unalterable, not to be 
 numerous and lengthy, the original altered, except by the adoption and 
 muniments having been added to or concurrence of certain formalities not 
 modified by many subsequent proceed- likely to occur, except in regard to 
 ings, resolutions and the like. There- changes of very obvious necessity ; or 
 fore it will be far more convenient to the term may be. used to signify the 
 have one single term always denoting constituent members, or different 
 the same general fact, but varying in bodies of which the corporation is 
 
 composed." 1 Redf. on Rail., § 17. 
 
 5
 
 34 Pkivate Cokpoeations. 
 
 from the time when it begins to do business as such.' In other 
 words, a corporation, as such, is put on foot, and imbued with cor- 
 porate Hfe, when the requisite steps have been taken to perfect 
 its organization as a distinctive body. From that time it may 
 sue or be sued in its corporate name, akhougli no business has 
 ever been done by it, and has a valid existence as an artificial per- 
 son, for all the purposes for which it was created, within the 
 scope of the powers conferred upon it by law, but prior to that 
 time it has no existence. In order to perfect an organization, all 
 the requirements of the charter, or of the statute under which it 
 is organized, should be complied witli, and the proper evidence 
 thereof is the record of the organization." It is under this rule 
 that it is held that claims for money expended hefore its organi- 
 zation cannot be enforced against it as a debt of the corporation 
 after it is organized. Prior to its organization it could not make 
 any contract, because it had no existence ; ' and tliis rule applies 
 where the statute requires that the articles of association shall 
 be filed in a certain public office as a preliminary step, before 
 entering upon the transaction of business ; but in such case 
 copies of the articles so filed, made by the proper officer, are 
 competent evidence of its authority to do business as a cor- 
 poration.^ After a company has been in operation for several 
 years as a corporation, without any question as to the regularity 
 of its organization, its due organization will be presumed,^ and 
 where the organization is defective in any material respect, the 
 legislature has power to cure the defect, so as to legalize its acts, 
 ah initio.'^ And where the legislature, subsequent to the oi'gani- 
 zation of a corporation, recognizes it as such, it is held that i's 
 organization is thereby validated.' The word "organized" or 
 
 1 Hanna v. International Petroleum 24 Me. 256 ; Bank of the United States 
 
 Co., 23 Ohio St. 622. v. Lyman, 20 Vt. 606. 
 
 '•* Bowyer v. Giles, etc., Turnpike ^ Illinois, etc. , R. R. Co. v. Cook, 29 
 
 Co., 9 Gratt. (Va.) 109; Warner v. 111. 237; Goodrich v. Reynolds, 31 id. 
 
 Daniels, 1 Woodb. & M. (U. S. C. C.) 490 ; Kanawha Coal Co. v. Kanawha, 
 
 90. etc., Coal Co., 7 Blatchf . 391. 
 
 ^ Marchand v. Loan, etc., Associa- "^ Cayuga, etc. , R. R. Co. v. Kyle, 64 
 
 tion. 26 La. Ann. 389. N. Y. 185. An irregularity in the or- 
 
 * Buffalo, etc., R. R. Co. v. Hatch, ganization of a company cannot be 
 20 N. y. 157; Jones v. Dana, 24 Barb, taken advantage of by one dealing 
 (N. Y ) 395 ; Chamberlin v. Hugue- with the company. Frost v. Frost- 
 not M'fg Co. 118 Mass. 532. burg Coal Co., 24 How. (U. S.) 278. 
 
 ^ Chester Glass Co. v. Dewey, 16 The directors of a corporation have no 
 
 Mass. 94 ; Agricultural Bank v. Burr, power to issue certificates of stock, for
 
 How Corporations are Created. 
 
 35 
 
 "organization " as aj)plicable to corporations ordinarily means the 
 election of officers constituting the body complete for the trans- 
 action of business' and tlie performance of such other acts or con- 
 ditions precedent as may be provided by law/ Even where the 
 organization of a corporation is defective, if it was organized in 
 good faith, it may be sustained as a de facto corporation where 
 the question as to its regularity is only raised collaterally;' and the 
 corporation itself is estopped from setting up its own want of cor- 
 porate capacity, where it has claimed to act as such,* and upon 
 
 any purpose, for a less price than the 
 sum fixed by the charter ; shares so 
 issued are void in the liands of the 
 party receivinj^ them. Sturges v. 
 Stetson, 3 Phila. (Penn.) 304. And 
 a purcliaser of such stock, who has 
 paid the consideration, is entitled to a 
 rescission of the contract. Fosdick v. 
 Sturges, 3 Phila. (Peun.) 312. The 
 commissioners' book of subscriptions 
 
 \s prima facie evidence that the sub- 
 scriptions were genuine, or made by 
 persons duly authorized. And the 
 fact that the defendant was appoint(;d, 
 by the stockholders, one of its mana- 
 gers, and acted as such, is prima f<tcie 
 evidence of an admission, on his part, 
 of the existence of the corporation. 
 Rockville and Washington Turnpike 
 Road V. Van Ness, 2 Cranch (C. C), 449. 
 
 ' New Haven, etc., R. R. Co. v. Chap- 
 man, 38 Conn. 56. 
 
 "^ Where a corporation has gone into 
 operation as such, and rights have 
 been acquired under it, every reason- 
 able presumption will be made in 
 favor of its legal existence. Hagers- 
 town Turnpike v. Cruger, 5 Harr. & J. 
 (Md.) 122. But if a body acting as a 
 corporation has in fact no legal exist- 
 ence as such, it will be treated as a 
 partnership. Hill v. Beach, 12 N. J. 
 Eq. 31. 
 
 ^Ossippee Hosiery, etc., M'f'g Co. v. 
 Canney, 54 N. H. 295 ; Swartwout v. 
 Michigan, etc., R. R. Co., 24 Mich. 
 389 ; Aurora, etc., R. R. Co. v. Miller, 
 56 Ind. 88 ; Thompson v. Candor, 60 
 111. 244. In Walworth v. Brackett, 
 98 Mass. 98, three persons were 
 named in an act as corporators, and 
 one of them called a meeting of the 
 subscribers to the capital stock for the 
 purpose of organizing and electing the 
 necessary officers, and the others made 
 no objection thereto, and never made 
 any claim to the exercise of the corpo- 
 rate powers. It was held that although 
 the mode of organization was not in ac- 
 cordance with the requirement of the 
 statute, yet as against all persons but 
 the state, the organization was valid, 
 and that after the corporation was so 
 organized, and had elected its officers 
 
 and carried on business as a corpora- 
 tion, it was too late to deny that the 
 corporation ever had any legal exist- 
 ence. Blair v. Rutherford , 31 Tex. 
 465; Comm. v. Bakeman, 105 Mass. 
 53. In Barrett v. Mead, 10 Allen, 337, 
 it was held that proof that a company 
 had attempted to form an organization 
 under the statutes of another state, 
 and had transacted business as a cor- 
 poration de facto, and that its certifi- 
 cates of shares contain a recital that it 
 was organized under the general laws 
 of that state, is sufficient, in the ab- 
 sence of any thing to control it, to au- 
 thorize a jury to find that the company 
 was duly incorporated, in a case in 
 which the fact is only collaterally in 
 issue. In Narragansett Bank v. Atlan- 
 tic Silk Co., 3 Mete. (Mass.) 282, it 
 was held not necessary to prove that a 
 company had complied with the re- 
 quirements of the statute in its organi- 
 zation, but that it was generally suf- 
 ficient to give in evidence the act of 
 incorporation and tJie actual itse of the 
 powers and privileges of an incorporated 
 companij under the name designated. 
 See, also. Farmers & Mechanics' Bank 
 V. Jenks, 7 Mete. (Mass.) 592. 
 
 ■* Dooley v. Cheshire Glass Co., 15 
 Grav, 494; Merrick v. Reynolds En- 
 gine & G. Co., 101 Mass. 381 ; Priest 
 V. Essex Hat M'f'g Co., 115 id. 380.
 
 36 Private CoRPORA'noNS. 
 
 the other hand it is held that a person who contracts with another 
 as a corporation is estojjped to deny the legal existence of such 
 corporation.' Prima facie, in an action on a note given to a 
 foreign corporation by their corporate name, the production of 
 the note is sufficient evidence of the due organization of the cor- 
 poration and its competency as such to do business, but not if the 
 fact of organization is denied in the answer.'' Thus in an action 
 by the indorser of a note, payable to the " Continental Insurance 
 Company," it was held sufficient lyrima facie to establish the 
 legal existence of a corporation bearing that name,' and a writ in 
 an action upon a bond which describes the plaintiffs as a corpora- 
 tion, the execution of the bond being proved, was held to afford 
 'prima facie evidence of the plaintiff's incorporation.* Where an 
 action is brought by a corporation, and the answer denies the ex- 
 istence of such a corporation, the plaintiff is bound to prove its 
 corporate existence as a fact,* and it seems that, where the decla- 
 ration alleges that the plaintiff is a corporation, and the answer 
 contains a general denial of each and every allegation in the 
 plaintiff's declaration or complaint contained, that the plaintiff's 
 incorporation is thereby put in issue,' but, unless put in issue by 
 the answer or pleadings, it is treated as admitted, and cannot 
 be questioned upon the trial.' The proper method of proving 
 corporate existence is by the production of the act of incorpora- 
 tion or the articles of association, and proving the election of offi- 
 cers or the exercise of corporate powers thereunder," but, where 
 
 ' Worcester Medical Inst. v. Hard- "^ Plymoutli Christian Society v. Ma- 
 
 ing, 11 Gush. 285. comber, 3 Mete. (Mass.) 235. 
 
 '^Williams v. Cheney, 3 Gray, 215. ^ Chamberlain v. Huguenot M'f'g 
 
 3 Topping V. Bickfor'd, 4 Allen, 120. Co., 118 Mass. 533. A charter and user 
 A note made payable at "Hunger- under it affords presumptive proof in 
 ford National Bank " was held, in an the first instance of the legal exist- 
 action by tlie " Hungerford National ence of a corporation. People v. B^ ig- 
 Bank" thereon, not to atford conclu- ler, Hill & Denio, 133. And are all that 
 sive evidence that the plaintiffs are a a corporation is called upon to prove, 
 corporation, but as evidence of the to establish its existence, in a litiga- 
 fact which should be submitted to the tion with individuals dealing with it. 
 jury. Hungerford National Bank v. Jones v. Dana, 24 Barb. ;i95 ; Method- 
 Van Nostrand, 106 Mass. 559. ist, etc.. Church v. Pickett, 19 N. Y. 
 
 ^ Williamsburffh Ins. Co. v. Froth- 482. The validity of its corporate 
 
 ingliam, 122 Mass. 391. existence can only be tested by pro- 
 
 5 Gott V. Adams' Ex. Co., 100 Mass. ceedings in behalf of the people. 
 
 o20. Whether it has been properly organ- 
 
 *Mosler v. Potter, 121 Mass. 89; ized or not, according to its charter, is 
 
 Hebron Church v. Smith, 121 id. 90, n. a question that cannot be made col-
 
 How Corporations are Created. 
 
 37 
 
 this cannot be conveniently done, proof of the exercise of corpo- 
 rate powers by the alleged corporation, under the corporate name, 
 Ys, prima facie sufficient,' and especially is this so if the act of in- 
 corporation or a certificate of association, certified by the proper 
 officer, is produced.' If a corporation refuses to produce its books 
 of record upon notice to do so, parol proof of its organization or 
 election of officers and agents is admissible.^ 
 
 laterally, but only by direct proceed- 
 ings against the corporation. Wight 
 V. Shelby Railroad Co., IG B. Monr. 4. 
 
 So tlie determination of the board 
 of commissioners appointed by the 
 comptroller to make examination for 
 that purpose, that an insurance com- 
 pany has the requisite amount of capi- 
 tal and premium notes, is conclusive 
 as to the existence of the corporation, 
 until that existence is impeached by 
 such proceedings. Jonea v. Dana, 24 
 Barb. 395. 
 
 The act of incorporation being in 
 the case, it is competent, in order to 
 prove the existence of the corpora- 
 tion, to show by parol that the cor- 
 porators were acting under their char- 
 ter and enjoying the franchises 
 thereby granted to them. Wilming- 
 ton and Manchester Railroad Co. v. 
 Saunders, 3 Jones' L. 126. 
 
 The defendant, whom it ia attempted 
 to hold liable for a debt of a cor- 
 poration which has been judicially re- 
 cognized as duly organized under the 
 act of 1811 and has acted as such over 
 twenty years, and in which the de- 
 fendant held stock till its dissolution, 
 will not be heard to deny the legal in- 
 corporation of the company, in the 
 action against him. Mead v. Keeler, 
 24 Barb. 20. It is not essential that 
 the acceptance of a charter should ap- 
 pear on the records of a corporation. 
 It may be inferred from acts of the cor- 
 porators, or of the corporation. Taylor 
 V. Newberne, 2 Jones' Eq. (N. C.) 141. 
 
 Evidence that it is reputed to be a 
 corporation and acts as such has been 
 held sufficient even in a case where a 
 person was charged with issuing coun- 
 terfeit bills on a reputed bank. State 
 V. Pindal, 5 Harr. (Del.) 488. 
 
 ' Hungerford Bank v. Van Nostrand, 
 ante; Merchants' Bank v. Gleudon 
 Co., 120 Mass. 97 ; Topping v. Bick- 
 ford, ante. In Anderson v. Kanawha 
 Coal Co., 12 W. Va. 526, a deed of 
 trust executed by a corporation, in 
 which the due organization of the cor- 
 poratiou was recited, was held ad- 
 missible as evidence of the defend- 
 ant's legal existence as a corporation. 
 
 ^ In Merchants' Bank v. Glendon Co., 
 ante, the plaintiff brouirht an action 
 describing iUe]f as the Merchants' Na- 
 tional Bank of Bausror, organized un- 
 der the laws of the United States, and 
 having its place of business in Bangor 
 in the state of Maine. Its corporate 
 existence being put in issue, in order 
 to prove it, it produced a certificate of 
 
 the comptroller of the currency that 
 it had been duly organized, and the 
 testimony of a book-keeper of a bank 
 in Boston, that the Merchants' Na- 
 tional Bank of Bangor did a banking 
 business under that name, and that he 
 had been iu their banking-house in 
 Bangor, and was well acquainted with 
 the cashier, and that his own bank 
 was in the habit of receiving remit- 
 tances from the Merchants' National 
 Bank of Bangor ; and this was held 
 sufficient to establish the existence of 
 the plaintiff as a de facto corporation. 
 See, also, to the same effect, Washing- 
 ton Co. Bank v Lee, 112 Mass. 521. 
 
 ^Thayer v. Middlesex Ins. Co., 10 
 Pick. 326; Narragansett Bank v. At- 
 lantic Silk Co., 3 Mete. (Mass.) 282.
 
 38 Pkivate Cokporations. 
 
 CHAPTER III. 
 
 PRIVATE CORPORATIONS NATURE AND CHARACTER OF. 
 
 Sec. 30. Distinction between public and private corporations. 
 
 Sec. 31. Legislative control of public corporations. 
 
 Sec. 32. Private corporations — doctrine in reference to legislative control 
 
 over. 
 
 Sec. 33. Immunity does not exempt property from legislative control. 
 
 Sec 34. Power of the legislature to regulate the charges of railroads. 
 
 Sec. 35. Ground on which legislative power is predicated. 
 
 Sec. 36. Reason for the exercise of such power. 
 
 Sec. 37. Legislative control over rate of charges by railroad companies. 
 
 Sec. 38. Subsequent grants do not impair the contract — construction of 
 
 grants. 
 
 Sec. 39. Reservation of power in the legislature. 
 
 Sec. 40. Right to resume based upon misuse or abuse of its franchise. 
 
 Sec. 41. The power to resume cannot be exhausted. 
 
 Sec. 42. General statutes reserving the power. 
 
 Sec. 43. Amendments of charters. 
 
 Sec. 44. Repeal of charter. 
 
 Sec. 45. General implied powers of. 
 
 Sec. 46. Powers conferred or limited by statute. 
 
 Sec. 47. Corporate powers limited to the object of the grant. 
 
 Sec. 48. Distinctions between corporate and copartnership associations. 
 
 Sec. 30. Distinction between public and private corporations We 
 
 have already referred to some of tLe characteristic differences 
 between public and private corporations ; but the character of 
 this treatise demands a fuller consideration of the marked dis- 
 tinction between them, and of the character of the grants creating 
 them; for important interests frequently depend on this dis- 
 tinction. We have said that public corporations were those 
 instituted for public and political purposes only, and in which 
 the citizens of the district or territory are supposed to have a 
 common interest. The grant of such corporate privileges is 
 generally made, and such corporations instituted, without the 
 consent of the corporators or members. Public corporations may 
 be imposed upon a people, nolens volens / and they do not par-
 
 Natuke and Chakacter of. 
 
 39 
 
 take of the nature of a contract between the state, and tlie parties 
 becoming members of it, by the mere creation of tlie corpoi'ation. 
 They are members solely and only by virtue of their residence 
 within the territorial limits of tlie locality, that is constituted the 
 public or municipal corporation by the sovereign authority.^ All 
 private corporations, however, are, in a certain sense, of public 
 interest. In fact, the conferring of private and particular powers 
 and franchises upon a society of persons, and giving them privi- 
 leges not commonly enjoyed without such grant, and thereby 
 surrendering to the corporate body authority which otherwise 
 must remain in the sovereignty of the state, can only be justified 
 on the ground of the public benefit to be derived from the grant, 
 and that the state in this way will be fully indemnified for the 
 surrender or transfer of its supreme rights, in respect to the 
 authority conferred/'' 
 
 Seo. 31. Legislative controi of public corporations. — We have said 
 that public corporations are such as are established for public and 
 
 1 " The rule which applies to private 
 corporations, that the incorporating act 
 is ineffectual to constitute a corporate 
 body until it is assented to or accepted 
 by the corporators, had no application 
 to statutes creating municipal corpora- 
 tions. * * * All who live within 
 the limits of the incorporated district 
 are bound by them, and can only with- 
 draw from the corporation by re- 
 moval." 1 Dill, on Corp., i^ 23. 
 
 ^ Providence Bank v. 13illings, 4 
 Pet. (U. S.)514; Charles River Bridge 
 V. Warren Bridge, 11 id. 544; Rich- 
 mond, etc., R. Co. v. Louisa., etc., R. 
 Co.. 13 How. (U. S.) 71; Bradley v. 
 New York, etc , R. Co., 21 Conn. 294 ; 
 Chenango Bridge Co. v. Binghamton 
 Bridge Co., 27 N. Y. 87; State v. 
 Krebs, 64 N. C. 604 ; Pennsylvania R. 
 Co. v. Canal Com., 21 Penn. St. 22 ; 
 Mills V. Williams, 11 Ired. 558. In 
 this case the court, by Parsons, J., 
 say: " The purpose in making all cor- 
 porations is the accomplishment of 
 some public good . Hence, the division 
 into public and private has a tendency 
 to confuse and lead to error in investi- 
 gation ; for unless the public are to bo 
 benefited it is no more lawful to con- 
 
 fer exclusive rights and privileges 
 upon an artificial body than upon a 
 private citizen. The substantial dis- 
 tinction is this ; Some corporations are 
 created by the mere will of the legis- 
 lature, there being no other party in- 
 terested or concerned. To this body 
 a portion of the power of the legisla- 
 ture is delegated, to be exercised for 
 the public good, and subject at all 
 times to be modified, changed or an- 
 nulled. Other corporations are the 
 result of contract. The legislature is 
 not the only party interested ; for al- 
 though it has a public purpose to be 
 accomplished, it chooses to do it by the 
 instrumentality of a second party. 
 These two make a contract. The ex- 
 ception of benefit to the public is the 
 moving consideration on one side; that 
 of expected remuneration for the out- 
 lay is the consideration on the other. 
 It is a contract, and , therefore, cannot 
 be modified, changed or annulled, 
 without the consent of both parties. 
 Counties are an instance of the former, 
 railroad and turnpike companies of 
 the latter, class of corporations.'' Penn. 
 R. Co. V. Canal Com., 31 Penn. St. 22.
 
 40 Private Corpokations. 
 
 municipal purposes, or sucli as are constituted for civil and local 
 government. Incorporations of this character constitute no con- 
 tract between the state and the corporation. The powers and 
 franchise thereby conferred are always subject to the right of the 
 authority conferring them, to resume or modify and control them 
 at pleasure. The power of the legislature over such corporations 
 is only restrained in certain cases by constitutional limitations. 
 It may change or abolish them, as it may deem the public interest 
 requires.' 
 
 And it may be affirmed as a principle, based upon the soundest 
 public policy, that where public or municipal corporations are 
 created, the special powers conferred upon them for local govern- 
 ment are not vested rights as against the state, but may be 
 changed at pleasure by the legislature. " Otherwise," in the 
 language of Justice McKean, " there would be numberless petty 
 governments existing within the state and forming part of it, but 
 independent of the control of sovereign power." '^ And such 
 powers may be abolished, qualified, changed or limited, either by 
 a special act for that pur|)ose, or by general provisions relating to 
 all such corporations.' On this subject the supreme court of 
 Louisiana say : " The government of cities and towns, like that 
 of the police jury of parishes, forms one of the subdivisions of in- 
 ternal administration of the state, and is absolutely under the 
 control of the legislature. The laws which establish and regulate 
 municipal corporations are not contracts, but ordinary acts of 
 legislation, and the powers they confer are nothing more than 
 mandates of the sovereign power ; and those laws may be repealed 
 or altered at the will of the legislature, except so far as the repeal 
 
 'Allen V. McKeen, 1 Sumner, 276 liable for corporate debts, but the 
 
 (opinion by Story, J.) ; People v. property of the members of public 
 
 Morris, 13 Wend. 325, in which Nel- corporations was liable to be taken to 
 
 SON, J., said : " It is an unsound and satisfy a judgment against the corpo- 
 
 even an absurd proposition that politi- rate body. Adams v. Wicasset Bank, 
 
 cal power conferred by the legislature 1 Me. 364; Brewer v. New Glouces- 
 
 can become a vested right as against ter, 14 Mass. 216; Marcy v. Clark, 17 
 
 the government, in any individual or id. 333; Comm. v. Blue Hill Turnpike 
 
 body of men ." Co., 5 id. 420 ; Atwater v, Woodbridge, 
 
 A marked distinction between pub- 6 Conn. 223. 
 
 lie and private corporations at com- 'State Bank v. Knoop, 16 How. (U. 
 
 mon law was the difference in the in- S.) .369. 
 
 dividual liability of the corporators. 'Id. See, also, Sloan v. State, 8 
 
 In private corporations they were not Blackf . (Ind.) 361.
 
 KaTURE and CnARACTEE OF. 
 
 41 
 
 or change may affect tlie rights of third persons acquired under 
 them." ' 
 
 As public corporations are not strictly embraced within the 
 scope of this treatise, we have only alluded to them for the pur- 
 pose of pointing out some of the fundamental distinctions between 
 them and private ones. 
 
 Sec. 32. Private corporations — doctrine in reference to legislative 
 control over. — The doctrine, as to tlie right of the legislature of 
 the state to affect the corporate rights of public corporations, has 
 no application at common law to private corporations. The ac- 
 ceptance of the charter or act of incorporation for private purposes 
 constitutes a contract, which thereby becomes irrevocable between 
 the parties thereto, viz.: the state and the corporation. There 
 is no necessity for private parties, intended to be benefited by 
 legislative acts of incorporation, to accept the same. They cannot 
 be compelled to accept an offer of corporate privileges. But, 
 
 ' Police Jury v. Shreveport, 5 La. 
 Ann. 661. See, also, State Bank v. 
 Navigation Co., Sid. 294; Reynolds v. 
 Baldwin, 1 id. 163; Haynes v.Munici- 
 palitv, 5 id. 760 ; Board v. Munici- 
 pality, 6 id. 21 ; East Hartford v. Hart- 
 ford Bridge Co. , 10 How. (U. S.)511; 
 Trustees v. Tatnian, 13 111. 30, in which 
 WooDBURr, J., remarks in reference 
 to municipal corporations : "They are 
 allowed privileges or property only 
 for public purposes. The members 
 are not shareholders nor joint partners 
 in any corporate estate which they can 
 sell or devise to ottiers, or whicli can 
 be attached or levied upon for their 
 debts. Hence, generally, the doings 
 between them aud the legislature are 
 in the nature of legislation rather than 
 a compact, and subject to all the legis- 
 lative conditions named, and therefore 
 to be considered as not violated by 
 subsequent legislative changes." See, 
 also, Ten Eyck v. Canal Co.. 18 N. J. L. 
 200; Hanson v. Vernon, 27 Iowa, 28 ; 
 Regents, etc., v. Williams, 9 Gill & J. 
 (Md.) 865 ; Norris v. Trustees, etc., 7 
 id. 7 ; Patterson v. Society, etc., 24 
 N. J. L. 385 ; Baltimore v. Board of 
 Police, 15 Md. 376 ; Penobscot Boom 
 Corporation v. Lamson, 16 Me. 334 ; 
 
 6 
 
 Yarmouth v. North Yarmouth, 34 id. 
 411 ; North Yarmouth v. Skilliuga, 45 
 id. 133; Qirard v. Philadelphia, 7 Wall. 
 1. As to the distinction between pub- 
 lic and private corporations, see 
 People V. Wren. 5 111. 273 ; Holliday 
 V. People, 10 111. 316; Richland 
 County V. Lawrence County, 12 111. 8; 
 Gutzweller V. People, 14 id. 145 ; State 
 V. St. Louis County Court, 34 Mo. 564; 
 Llovd V. Mayor, etc., of New York, 5 
 N.Y. 369; Lowber v. Mavor, 7 Abb. 
 Pr. 248 ; Aurora v. West, 9 Ind. 74 ; 
 Plymouth v. Jackson, 15 Penn. St. 44. 
 Public corporations are such as are 
 created for political purposes, but a 
 corporation is not public merely be- 
 cause its object is of a public charac- 
 ter. Tinsman v. Bel. Del. R. R. Co. 
 26 N. J. L. 148 ; Marietta v. Fearing, 
 4 Ohio, 427 ; State v. Mayor, etc., 24 
 Ala. 701 ; Governor v. ^IcEwen, 5, 
 Humph. 241 ; Grogan v. San Francisco, 
 18 Cal. 590 ; Darlington v. Mavor, etc., 
 31 N. Y. 164; Saving Fund "Society, 
 etc., V. Philadelphia, 31 Penn. St. 
 175 ; Philadelphia V. Field, 58 id. 320 ; 
 Erie V. Canal Co., 59 id. 174; Dun- 
 more's Appeal, 52 id. 374 ; Blandiug 
 V. Burr, 13 Cal. 343.
 
 42 Pkivate Cokpokations. 
 
 when once accepted, the rights of the corporation under the same 
 cannot be prejudiced by any subsequent legishition, unless the 
 rio-ht so to do has been reserved by the creating charter or act, or 
 is reserved by some general law in existence when the charter was 
 granted, which is applicable to all corporations formed after its 
 passage,' in which case the power to amend or repeal exists, al- 
 thou'di the charter contains no words in express terms so declar- 
 ino-.'^ But this is subject to the restriction that no such amend- 
 ment can be made which defeats or substantially impairs the object 
 of the grant or any vested rights under it." 
 
 The contract thus constituted comes within the meaning of the 
 federal constitution, inhibiting the passage of any law impairing 
 the obligation of contracts. And unless there is a reservation of 
 the right to resume or amend a charter or act, contained in it, or 
 in some general law, or in the constitution of the state, thus mak- 
 iu"- it a part of the terms of the contract- between the state and the 
 corj^orators, it comes within the constitutional provision, which 
 secures contracts from being impaired by subsecpient legislation/ 
 The charter, although a law, is, in such cases, something more than 
 a law ; it is also a contract between the government and the cor- 
 poration, and the legislature cannot alter, rej)eal, or in any manner 
 impair, the rights or privileges conferred without the consent of 
 the corporation." This rule extends even to the curtailment of 
 
 1 State V. PersoD, 32 N. J. L. 134 ; wealth v. Ciillen, 13 Penn. St. 138 ; 
 affirmed, id. 56(5 ; State v. Miller, 29 Dartmouth College v. Woodward, 4 
 id. 369 ; State v. Douglass, 34 id. 83. Wheat. (U. S.) 518. The charter of a 
 
 2 Id. private corporation is something more 
 
 3 Inland Fishery Comm'rs v. Holyoke than a law, in that it contains stipula- 
 Water Power Co., 104 Mass. 446 ; Hoi- tious which are terms of contract be- 
 yoke Co. v. Lyman, 15 Wall. 500; tween the state as one party and the 
 Thornton v. Marginal Freight Rail- corporation as the other, and is as 
 ■way, 123 Mass. 32 ; Worcester v. N. much removed from the modifying 
 & W. R. R. Co., 109 id. 103. influence of the legislature as would 
 
 ■1 Mechanics' Bank v. Debolt, 1 Ohio be contracts between two private 
 
 St. 591 ; State v. Southern, etc., R. Co., parties. Flint v. Woodhull, 25 Mich. 
 
 24 Tex. 80; Const., art. 1,§ 10. 99. Allen v. Buchanan, 9 Phila. 
 
 ^ Young V. Harrison, 6 Ga. 1.30; 283; Mowrey v. Indianapolis, etc., R. 
 
 Maysville Turnpike Co. v. How, 14 B. Co., 4 Biss. (U. S. C. C.) 78. Where a 
 
 Monr. 429 ; Commercial Bank v. State, corporation was established by the 
 
 14 Miss. 599; New Orleans, etc., R. concurrent action of ^(oo states, it was 
 
 Co. V. Harris, 27 id. 517 ; Backus v. held to be not only a contract be- 
 
 Lebanon, 11 N. H. 19 ; Zabriskie v. tween the states and the company, 
 
 Hackensack, etc., R. Co., 18 N. J. Eq. but also between the two states, and, 
 
 178; Bank of State v. Bank of Cape therefore, not subject to interpretation 
 
 Fear, 13 Ired. (S. C. L.) 75 ; Common- by the local usages of either, and that
 
 Nature and Chakactee of. 43 
 
 the powers of the state in reference to the exercise of what 
 are termed its police powers, which enables it to prohibit all 
 things hurtful to the peace, welfare, or comfort of society, and 
 even in this respect the state is subject to constitutional limita- 
 tions, and when applied to corporations they must not be in con- 
 flict with any of the provisions of the charter.* So, too, while the 
 state has the power to impose taxes upon property, yet it is 
 within the province of the legislature to exempt property from 
 taxation, or to stipulate that a particular rate shall be imposed 
 upon certain property, and if, in granting a charter to a corpora- 
 tion, it provides that it shall pay a certain per cent upon each 
 share of its stock in lieu, of all other taxes, the state has no power 
 by a subsequent law to impose additional taxation upon the stock 
 of the company/ In the case of Dartmouth College v. Woorhoard, 
 this question was fully considered by the supreme court of the 
 United States, after the most elaborate arguments by eminent 
 counsel/ Chief- Justice Marshall, upon this question, remarks: 
 " The objects for which a corporation is created are universally 
 such as the government wishes to promote. They are deemed 
 beneficial to the country, and this benefit constitutes the con- 
 sideration, and, in most cases, the sole consideration of the grant, 
 * * * If the advantages to the public constitute a full con- 
 sideration for the faculty it gives, there can be no reason for 
 exacting a further compensation, by claiming a right to exercise 
 over this artificial being a power which changes its nature, and 
 touches the fund, for the security and application of which it was 
 created. There can be no reason for implying in a charter given 
 for a valuable consideration, a power (to change or amend it) 
 which is not only not expressed, but is in direct contradiction to 
 
 the same constructioa must be made State v. Mayor of Newark, 35 N. J. L. 
 
 in both. Cleveland, etc., R. R. Co. v. 157; Mobile, etc., R. R. Co. v. Mose- 
 
 Speer, 56 Penn. St. 325. Upon the ley, 53 Miss. 127 ; Berthin v. Crescent 
 
 general proposition see Hamilton v. City, etc., Slaughter-House Co. , 28 La. 
 
 Keith, 5 Bush, 458 ; Sala v. New Or- Ann. 210 ; St. Louis v. Manufacturers' 
 
 leans, 2 Woods (U. S. C. C), 188; Sa v. Bank, 49 Mo. 574. 
 Farrington v. Tennessee, 95 U. S. G79 ; 
 
 ' Lake View V. Rose Hill Cemetery, 679; Scotland County v. Missouri & 
 
 70 111. 191. N. R. Co.. 65 Mo. 123. 
 
 « Farrington v. Tennessee, 95 U. S. M Wheat. 518.
 
 44 Private Corporations. 
 
 its express stipulations. * * * -pj^jg jg plainly a contract to 
 which the donors, the trustees and the crown (to whose rights and 
 obligations New Hampshire succeeds) were the original parties. 
 It is a contract made upon a valuable consideration. It is a con- 
 tract for the security and disposition of property. It is a contract 
 on the faith of which real and personal estate has been conveyed 
 to the corporation. * * * The opinion of the court, after 
 mature deliberation, is, that this [the charter] is a contract, the 
 obligation of which cannot be impaired [by legislative acts] with- 
 out violating the constitution of the United States." 
 
 It may be affirmed, under the doctrine of irrevocable contract, 
 as established in the case last cited, that, in all cases of corporate 
 (jra)xU^ that are not solely for the purpose of furnishir\,g ma- 
 chinery for the government^ hut for 'private purposes and ob- 
 jects^ if accepted^ they constitute contracts hetuoeen the state and 
 the corporators / the consideration of the grant received by the 
 state being the general public beneiit to be derived incidentally 
 from the prosecution of the objects of the corporation, and the 
 duties which it assumes in accepting of the grant ; and the cor- 
 porate powers and privileges can no more he resumed or im- 
 paired^ without the consent of the corporators^ than any grant 
 of property or other valuable thing^ unless^ as we have suggested, 
 such right is reserved in the charter or act creating it^ or in 
 some general statute^ or in the constitution of the state.^ But 
 where the right to alter, amend, or repeal, is reserved in the 
 charter, or by a general law in existence when the charter was 
 granted, the legislature may alter, amend, or repeal the charter at 
 its jDleasure, without restriction, and summarily, and the courts 
 
 'Id. See, also, Trustees, etc., v. In- Mich. 285; Bank of State v. Bank of 
 
 diaiia, 14 How. (U. S.) 268 ; Planters' Cape Fear, 13 Ired. 75 ; Mills v. Wil- 
 
 Baiik V. Sharp, 6 id. 301; Piqua Bank liains, 11 id. 558; Hawthorne v. Calef, 
 
 V. Kuoop, 16 id. 369 ; Biu^hamton 2 Wall. 10; Wales v. Stetson, 2 Mass. 
 
 BridgB Case, 3 Wail. 51; Norris v. 143; State v. Tombeckbee Bank, 3 
 
 Trustees, etc. , 7 G. & J. 7; Grammar Stew. 30; Central Bride^e v. Lowell, 
 
 School V. Burt, 11 Vt. 632 ; People v. 15 Gray, 106; Bank of Old Dominion 
 
 Manhattan Co , 9 Wend. 351; Common- v. McVeio^h, 20 Gratt. 457; Mowrey v. 
 
 wealth V. CuUen, 13 Penn. St. 133; Indianapolis, etc., R. Co., 4 Bi.-'S. 78; 
 
 Commercial Bank, etc., v. State, 14 Citv of Covington v. Covington, etc.. 
 
 Miss. 599; Backus v. Lebanon, 11 N. Bridge Co., 10 Bush (Ky.), 69; Allen 
 
 H. 19; Edwards v. Jagers, 19 Ind. v. Buchanan, 9 Phil. (Penn.) 281 ; State 
 
 407 ; State v. Noyes, 47 Me. 189 ; v. Accommodation Bank, 26 La. Ann. 
 
 BruflFett v. G. W. R. Co., 25 111. 353 ; 288. 
 People V. Jackson, etc., R. Co., 9
 
 Nature and Character of. 45 
 
 have no power to review its action, except where the power is 
 exercised so wantonly and carelessly as to violate the principles 
 of natural justice.^ A charter, as previously stated, is a contract 
 between the state and the corporation, and the corporation takes 
 the grant subject to the limitations which are contained therein, or 
 in general laws relating thereto, in force at the time it was 
 granted. If no power of repeal is reserved, none can be exer- 
 cised; but when a charter itself or a general statute provides that 
 the charter is subject to repeal by the legislature at its pleasure, 
 the legislature may exercise this power in a reasonable manner, 
 but is not justified in the unjust and despotic exercise of the 
 power. The theory of our government is opposed to the deposit 
 of unlimited power anywhere ; the executive, the legislative, and 
 the judicial branches of these governments are all of limited and 
 defined power. But it is always to be presumed that the legis- 
 lature has exercised its great powers for adequate cause, and it is 
 only when this presumption is overcome by proof that it has 
 exercised it wantonly and carelessly, or despotically and unjustly, 
 that the courts will interfere.'' A power to repeal a charter can- 
 not be implied, and unless expressly reserved cannot be exercised. 
 Thus, a reservation of a power "to alter, limit, restrain, or annul 
 the powers conferred," does not confer upon the legislature the 
 right of absolute repeal of the charter,' nor does the right to re- 
 peal a charter if the corporation '■'' abuses or misuses its fran- 
 chises " justify a repeal unless such causes really exist, and the 
 courts have a right to pass upon this question in order to deter- 
 mine the validity of a repealing act.^ 
 
 bEC. 33. Immunity does not exempt property from regulation, or pro- 
 hibit a change of remedies.— But even in case there is no reservation 
 of the right to resume, change, or abridge the powers conferred 
 on a private corporation, the legislature still possesses the power 
 to regulate the sale of its property and prescribe the methods and 
 extent of its legal remedies, the same as it might those of a natu- 
 
 ' Lotlirop V. Stedman, 13 Blatchf. ^ Allen v. McKeeu, 1 Sura. 276. 
 
 134 ; Lotbrop v. Stedman, 42 Conn. 583. •* Coram, v. Pittsburgh, etc., K. 11. Co., 
 
 '■^Loan Association v. Topeka, 20 58 Penu. St. 46; Erie & N. E. R. R. 
 
 Wall. 663; Lotbrop v. Stedman, ante. Co. v. Casey, 26 id. 287.
 
 46 Pkivate Corporations. 
 
 ral person.' They Jiave immunity from injury to tlieir absolute 
 vested rii^hts, but no such incidental injuries as may flow from a 
 change of remedies ; * and like a natural person they are subject 
 to those regulations which a state may reasonably prescribe for 
 the safety or good government of the community.' Thus, a cor- 
 poration may be compelled to fence its railroad track ; * and in 
 Massachusetts it has been held that the legislature might prohibit 
 the sale of malt liquors by statute/ as a proper police regulation, 
 and that the prohibition extended to and affected the privileges of 
 a corporation in that respect as well as natural persons, although 
 such corporation was instituted for the purpose of brewing malt 
 liquors, and the legislature possessed no power to resume or re- 
 peal the charter.' And, even in the absence of any reserved 
 powers, the legislature may provide a remedy more effectually to 
 compel a corporation to perform its duties, and prescribe the man- 
 ner in which, the time when, and the court where, such remedy 
 may be enforced.' 
 
 Sec. 3-i. Power of the legislature to regulate the charges of railroads. — 
 The question whether the legislature can regulate and control the 
 rates of fare and freights of railroad companies has recently been 
 the subject of general interest and controversy as well as of judi 
 cial investigation ; and it has been determined by the supreme 
 court of the United States, that such regulation may be made, 
 unless the railroad company is protected therefrom by a special 
 provision of its charter or by the general statutes, under which it 
 is organized. The court has determined that a railroad company 
 can only charge a reasonable fare or freight as a common carrier, 
 
 ^Bank of Republic v. Hamilton, 21 441. So, its powers may bp enlarged. 
 
 111. 5^. Gilford v. N. J. R. Co., 10 N. J. Eq. 
 
 •2 Reapers' Bank v. Willard, 24 111. 171 . 
 
 433. ^ Stat. Mass. 1869, chap. 415. 
 
 ^Galena, etc., R. Co. v. Loomis, 13 ^ Comm. v. Liquors, llo Mass. 153. 
 111. 543 ; Coffin v. Rich, 45 Me. 507 ; ' Go wen v. Penobscot R. Co., 44 Me. 
 State V. Noyes, 47 id. 189. See, also, 140. See, also, Cummiuo;s v Maxwell, 
 Ex parte N. E. & S. W. R. Co., 37 45 id. 190; Taggart v. Western, etc., 
 Ala. G79. The general power of the R. Co., 24 Md. 5(J3. And the charter is 
 legislature to legislate for the protec- not impaired by an act of the legisla- 
 tion of the life, health and safety of ture providing for the redress of inju- 
 the inhabitants of a state cannot be ries occasioned by the negligence or 
 the subject of an irrevocable grant by misconduct of railroad or other corpo- 
 it. Dingman v. People, 51 111. 277. rations. Board, etc., v. Scearce, 2 Duv, 
 
 * Gorman v. Pacific R. Co., 26 Mo. (Ky.) 576.
 
 Nature and Citaracteu of. 47 
 
 which in tlie absence of legislative determination rnnsthe fixed hy 
 the courts ; and that the legislature has the authority to fix the 
 maximum rates of charges for 'the same, in the absence of any ex- 
 press provision limiting the power, either contained in the general 
 law or charter of incorporation of such company. It is claimed 
 that this doctrine is entirely consistent with the inviolability of 
 the contract of the state with the company incorporated ; and 
 that, in the absence of any reserved power in the legislature, it 
 would have a riirht to reirulate and fix the maximum ciiarfjes for 
 transportation, the same as though the carrier was a natural per- 
 son. Thus, the Burlington and Missouri Railroad Company was 
 organized under the general incorporation law of Iowa, and sub- 
 sequently the plaintiff, the Chicago, Burlington and Quincy Rail- 
 road Company, succeeded to the rights of the former, and power 
 was conferred upon the said company to contract in reference to 
 its business, the same as a private individual, and to establish bv- 
 laws and make all rules and regulations deemed expedient in rela- 
 tion to its affairs, but subject to such rules and regulations as the 
 general assembly of Iowa might from time to time enact and 
 provide.' In a recent case against said company it was held by 
 the supreme court of the United States, that railroad companies 
 are common carriers for hire ; that they are given extraordinary 
 powers in order the better to serve the public in that capacity ; 
 that they are engaged in a public employment affecting the pub- 
 lic interest, and are therefore subject to legislative control ; that 
 in the transaction of business they have the same rights and are 
 subject to the same control as private individuals under the same 
 circumstances ; that it would be their duty to carry when called 
 upon so to do, and that they can charge only a reasonable sum 
 for carriage ; that in the absence of any legislative regulation 
 
 * Peik V. Chicago, etc., R. E. Co., general laws passed for the peace, 
 94 U. S. 164 ; Chicago, etc., K. K. Co. good order, health, comfort and wel- 
 V. Att'y^Geu'l, 9 West. L. J. 347. But fare of society. Sloan v. Pacific R. 
 the legislature has no power to regu- R. R. Co., 61 Mo. 24. Upon the general 
 late the tolls of railroad companies question upholding the right of the 
 under its police powers, where the legislature to regulate tolls of rail- 
 power is not in some way reserved to roads in certain cases. Cln., 11. & D. 
 it. Att'y-Gen'l v. Chicago, etc., R. R. R. Co. v. Cole, 29 Ohio St. 12o ; Iron 
 Co., 35 Wis. 425. Nor has it such R. R. Co. v. Lawrence Furnace Co., id. 
 power under its power to regulate the 208; Camblos v. Philadelphia, etc., 
 exercise of a railroad franchise by R. R. Co., Brewst. (Penn.) 563.
 
 48 Pkivatk Corporations. 
 
 upon the subject the courts must decide for them as they do for 
 private persons, when controversies arise on this subject, what is a 
 reasonable charge ; that when the legislature prescribes a maxi- 
 mum charge for fare or freight it operates upon the corporation as 
 it would upon an individual engaged in a similar business ; that 
 it is within the power of the company to call upon the legislature 
 to fix j)ermanently the limit of charges of carriage, and make it a 
 part of the charter, and if it is refused, to abstain from accept- 
 ing the grant or engaging in the business ; that if fixed by the 
 legislature at the time of the grant or acceptance of tlie act, it 
 miglit have presented a contract in that respect, with which the 
 legislature could not interfere ; but that, as this was not done in 
 this case, the company invested its capital, relying upon the good 
 faith of the people and the wisdom of legislators, against any 
 wrono; in the form of leo-islative regulation.* 
 
 Seo. 35. Ground on VT^hich legislative power is predicated. — Al- 
 though there seems to have been a pi'ovision in the charter of the 
 original railroad company to the rights and privileges of which 
 the plaintiff succeeded, reserving a right in the legislature to make 
 rules and regulations in relation to the company, still the supreme 
 court seems to rest its opinion upon the ground of the power of 
 the legislature to regulate the charges, and to determine what is 
 reasonable in that respect, or fix the maximum of charges of fare 
 and freight, independent of any reserved right so to do, continued 
 in the express statutory or constitutional law ; that such corpora- 
 tions stand the same as natural persons in this respect ; and that 
 there is a right in the legislatue to determine what are reasonable 
 charges for individuals, in all those occupations and employments, 
 in which persons are engaged affecting the j)ublic interest, as in 
 the case of public ferries, common carriers, hackmen, bakers, 
 millers, wharfingers, innkeepers, and warehousemen. The decision 
 in this case is, in fact, based upon the same reasons, as a decision 
 made at the same term of the court in relation to the right of the 
 legislature to regulate by statute the charges of the o^vners of 
 warehouses, in which grain is stored in bulk, and " in which the 
 
 'Chicago, etc., R. Co. v. Iowa, 94 U. S. 155.
 
 Nattjre and Character of. 49 
 
 grain of different owners is mixed together, or in which grain is 
 stored in such a manner that the identity of different lots or par- 
 cels cannot be accurately preserved," in Chicago and other places, 
 and to fix the maximum charges for the same.' In the case last 
 referred to, it was claimed, that such a statute was repugnant to 
 that part of the constitution of the United States, which confers 
 upon congress the power to regulate commerce with foreign nations 
 and among the several states ; ^ and to that part of the constitu- 
 tion, which provides that no preference shall be given by any 
 regulation of commerce or revenue, to the ports of one state over 
 another ; ^ and to that part of the amendment of the ,constitution, 
 which ordains that no state shall deprive any person of life, hb- 
 erty, or property, without due process of law ; nor deny to any 
 person within its jurisdiction the equal protection of the laws.* 
 After able arguments by comisel, and a full consideration of the 
 case by the court, it was held that a law of the state, regulating 
 warehousing, and the inspection of grain, and fixing the maxi- 
 mum of charges for the storage of grain in warehouses, was con- 
 stitutional, and not repugnant to that part of the fourteenth 
 amendment of the constitution, which ordains that no state " shall 
 deprive any person of life, liberty, or property, without due pro- 
 cess of law, or deny to any person within its jurisdiction the equal 
 protection of the laws." The court says : "Looking then to the 
 common law, from whence came the right which the constitution 
 protects, we find that when private property is affected with a 
 public interest, it ceases to be juris ^rivati only." This was 
 said by Lord Hale more than two hundred years ago, and has 
 been accepted without objection as an essential element of the law 
 of property ever since. Property does become clothed with a 
 public interest when used in a manner to make it of public con- 
 sequence and affect the community at large. When, therefoi'e, one 
 devotes his property to a use in which the public has an interest, 
 he in effect grants to the public an interest in that use, and must sub- 
 mit to be controlled by the public for the common good and to the 
 extent of the interest thus created. He may withdraw his grant by 
 
 1 Munn V. Illinois, 94 U. S. 113 ; 18 « Id., art. 1, § 2. 
 Alb. Law J. 180. * Const. U.S., XlVth Amend. 
 
 «Const. U. S., art. 1, §8. 
 
 7
 
 60 Private Corpokations. 
 
 discontinuing the use, but so long as lie maintains the use, lie must 
 submit to tlie control. Thus, as to ferries. Lord Hale says^ " the king 
 has ' a right of franchise or privilege, that no man may set up a com- 
 mon ferry for all passengers, without a prescription time out of 
 mind, or a charter from the king. He may make a ferry for his own 
 use or the use of his family, but not for the common use of all 
 the king's subjects passing that way ; because it doth not in con- 
 sequence tend to a common charge, and is becoming a thing of 
 public interest and use, and every man for his passage pays a toll, 
 which is a common charge, and every ferry ought to be under a 
 public regulation, viz.: that it give attendance at due times, keep 
 a boat in due order, and take but reasonable toll ; for if he fail in 
 these he is finable.' So, if one owns the soil and landing places 
 on both banks of a stream, he cannot use them for the purpose 
 of a public ferry, except upon such terms and conditions as the 
 body politic may from time to time impose, and this, because the 
 common good requires that all public ways shall be under the 
 control of the public authorities. The privilege or prerogative 
 of the king, who in this connection only represents and gives 
 another name to the body politic, is not primarily for his profit, 
 but for the protection of the people and the promotion of the 
 general welfare. And again, as to wharves and wharfingers, 
 Lord Hale says : ' A man for his own private advantage may, in 
 a port or town, set up a wharf or crane, and may take what rates 
 he and his customers can agree for cranage, wharfage, housellage, 
 or pesage ; for he doth no more than is lawful for any man to 
 do, viz.: make the most of his own, * ^ ^ If the king or 
 subject have a public wharf, unto which all persons that come 
 to tliat port must come and unlade or lade their goods as for the 
 purpose, because they are the wharves only licensed by the queen, 
 ■* * * or because there is no other wharf in that port, as it 
 may fall out where a port is newly erected ; in that case, there 
 cannot be taken arbitrary and excessive duties for cranage, wharf- 
 age, pesage, etc., neither can they be enhanced to an immoderate 
 rate, but the duties must be reasonable and moderate, tliongh 
 settled by the king's license or charter. For now the wharf and 
 crane and other conveniences are affected with a public interest, 
 
 ' Be Jure Maris, 1 Harg. Law Tracts, 6.
 
 Nature and Character of. 51 
 
 and they cease to be juris privati only ; as if a man set ont a 
 street on his own Land, it is no longer a bare private interest, but 
 is affected by a public interest.' This statement of the law by 
 Lord Hale was cited with approbation and acted upon by Lord 
 Kenton, at the beginning of the present century, in Bolt v, 
 Stennett, 8 T. E. G06." 
 
 Sec. 36. Reason for the exercise of such power. — It is evident that 
 
 the general reasoning, as well as the decisions, wliich would sub- 
 ject wharfingers to legislative control, on the ground of the public 
 character of their employment, would be equally aj^plicable to 
 warehousemen, innkeepers, bakers, millers, cartmen and common 
 carriers, generally. Upon this question Lord EllenboRough 
 once observed: "There is no doubt that the general principle is 
 favored both in law and justice, that every man may fix what 
 price he pleases upon his own property or the use of it ; but if, 
 for a particular purpose, the public have a right to resort to his 
 premises and make use of them, and he lias a monopoly in them 
 for that purpose, if he will take the benefit of that monopoly, he 
 must, as an equivalent, perforin the duty attached to it on reason- 
 able terms. The question then is, whether, circumstanced as this 
 company is, by the combination of the warehousing act with tlie 
 act by which they were originally constituted, and with the actual 
 existing state of things in the port of London, they alone having 
 the warehousing of these wines, be not, according to the doctrine 
 of Lord Hale, obliged to limit themselves to a reasonable com- 
 pensation for such warehousing." " The general principle which 
 allows legislation in these cases on the ground of the public nature 
 of the property or business in which the person is engaged, would 
 be particularly applicable to common carriers ; and especially to 
 that class of them which operates our raih-oads. Their business 
 is particularly " affected with a public interest." Their property 
 is employed in a manner that directly affects the body of the peo- 
 ple. The corporate franchise is granted, and extraordinary powers 
 conferred on such corporations, in order that they may the better 
 serve the public in the capacity of common carriers ; they are 
 
 ' Alluut V. Inglis, 12 East, 527. See, Ala. (N. S.) 140, where the right to 
 also, opinion of Le Blanc, J., in the regulate the weight and price of bread 
 some case, p. 541 ; Mobile v. Yuille, 3 was sustained.
 
 r)9 
 
 Private Corporations. 
 
 certainly engaged in a public employment wliich affects the public 
 interest, and ai"e within the reasoning of those class of cases, 
 where the right of legislative control and regulation has uni- 
 formly been recognized.' 
 
 ' See Eu^. Stat. W. & M., chap. 12, 
 § 24; 3 Stat, at Large (Great Brit- 
 aiu), 481; New Jersey Nav. Co. v. 
 Mercbauts' Bank, 6 How. (U. S.) 382; 
 where it was held that coiumou car- 
 riers exercise a sort of public office, 
 and have duties to perform in which 
 the public is interested. 
 
 The opinion of the learned chief- 
 justice in Munn v. The People, already 
 referred to, is so clear and satisfactory 
 on this question, and illustrates the 
 application of the principle on which 
 the right of legislative control is based 
 so well, in cases of warehousemen as 
 well as in cases of common carriers, 
 that I insert the concluding portion of 
 it. He observes: " Enough has already 
 been said to show that when private 
 property is devoted to a public use it 
 is subject to public regulation. It 
 remains only to ascertain whether the 
 warehouses of these plaintiifs in error 
 and the business which is carried on 
 there come within the operation of 
 this principle. For this purpose we 
 accept as true the statements of fact 
 contained in the elaborate brief of one 
 of the counsel of the plaintiflfs in error. 
 From these it appears that the great 
 producing region of the west and 
 north-west sends its grain by water and 
 rail to Chicago, where the greater part 
 of it is shipped by vessels for trans- 
 portation to the seaboard by the great 
 lakes, and some of it is forwarded by 
 railway to the eastern ports * * * 
 Vessels, to some extent, are loaded in 
 the Chicago harbor, and sailed through 
 the St. Lawrence directly to Europe. 
 * * * The quantity [of grain] re- 
 ceived in Chicago has made it the 
 greatest grain market in the world. 
 This business has created a demand 
 for means by which the immense 
 quantity of grain can be handled or 
 stored, and these have been found in 
 grain warehouses, which are commonly 
 called elevators, because the grain is 
 elevated from the boat or car by ma- 
 chinery operated by steam, into bins 
 prepared for its reception, and elevated 
 from the bins by like process into the 
 vessel or car which is to carry it on 
 
 * * * In this way the largest traf- 
 fic between the citizens north and 
 west of Chicago and the citizens of the 
 country lying on the Atlantic coast 
 north of Washington is in grain which 
 passes through the elevators of Chi- 
 cago. In this way trade in grain is 
 carried on by the inhabitants of seven 
 or eight of the great states of the 
 west, with four or five states lying on 
 the sea shore, and forms the largest 
 part of the inter-state commerce in 
 these states. The grain warehouses, 
 or elevators, in Chicago, are immense 
 structures, holding from 300,000 to 
 1,000,000 bushels at one time, accord- 
 ing to, size. They are divided into 
 bins of large capacity and great 
 strength. * * * They are located 
 with the river harbor on one side and 
 the railway tracks on the other, and 
 the grain is run through them from 
 car to vessel, or boat or car, as may be 
 demanded in the course of business. 
 It has been found impossible to pre- 
 serve each owner's grain separate, and 
 this has given rise to a system of in- 
 spection and grading, by which the 
 grain of different owners is mixed, 
 and receipts issued for the number of 
 bushels, which are negotiable and re- 
 deemable in like kind upon demand. 
 This mode of conducting business was 
 inaugurated more than twenty years 
 ago, and has grown to immense pro- 
 portions. The railways have found it 
 impracticable to own such elevators, 
 and public policy forbids the transac- 
 tion of such business by the common 
 carrier; the ownership has, therefore, 
 been by private individuals, who have 
 embarked their capital and devoted 
 their industry to such business as a 
 private pursuit. In this connection it 
 must also be borne in mind that, al- 
 though in 1874 there was in Chicago 
 fourteen warehouses adapted to this 
 particular business, and owned by 
 about thirty persons, nine business 
 firms controlled them, and that the 
 prices charged and received for stor- 
 age were such ' as have been from year 
 to year agreed upon and established 
 by the different elevators or ware-
 
 Nature and Chabacter of. 
 
 53 
 
 Sec. 37. Legislative control over rate of charges by railroad com- 
 panies.— It is evident that the legislature has the right to regulate 
 the prices of railroad companies, and especially to fix the maxi- 
 mum rates which they may charge for fare and freight, even 
 
 be made with their tracks, so that any- 
 public warehouse, etc., might be 
 reached by the cars on tlieir railroads. 
 This indicates very clearly that during 
 tlie twenty years in which this pecu- 
 liar business had been assuming its 
 present immense proportions some- 
 thing had occurred which led the 
 whole body of the people to suppose 
 that remedies, such as are usually em- 
 ployed to prevent abuse by virtual 
 monopolies, might not be inappropri- 
 ate here. For our purposes we must 
 assume that, if a state of facts could 
 exist that would justify such legisla- 
 tion, it actually did exist when the 
 statute now under consideration was 
 passed. For us the question is one of 
 power, not of expediency. If no state 
 of circumstances could exist to justify 
 such a statute, then we must declare 
 this one void, because in excess of the 
 legislative power of the state. But 
 if it could, we must presume it did. 
 Of the propriety of legislative inter- 
 ference within the scope of legislative 
 power, the legislature is the exclusive 
 judge. Neither is it a matter of any 
 moment that no precedent can be 
 found for a statute precisely like this. 
 It is conceded that the business is 
 one of recent origin, that its growth 
 has been rapid, and that it is already 
 of great importance. And it must also 
 be conceded that it ia a business in 
 which the whole public has a direct 
 and positive interest. It presents, 
 therefore, a case for the application of 
 a long-known and established princi- 
 ple in social science, and this statute 
 simply extends the law so as to meet 
 this new development of commercial 
 ])rogress. There is no attempt to com- 
 pel these owners to grant the public 
 an interest in their property, but to 
 declare their obligations, if they use it, 
 in this particular manner. It matters 
 not in this case that these plaintiffs in 
 error had built their warehouses and 
 established their business before the 
 regulations complained of were 
 adopted. What they did was from 
 the beginning subject to the power of 
 the body politic to require them to 
 conform to such regulations as might 
 
 houses in the city of Chicago, and 
 which rates have been annually pub- 
 lished in one or more newspapers 
 printed in said city, in the month of 
 January in each year then next ensu- 
 ing such publication.' Thus it is ap- 
 parent that all the elevating facilities 
 through which these vast productions 
 ' of seven or eight great states of the 
 west' must pass on the way 'to four 
 or five of the states on the sea-shore,' 
 may be a virtual monopoly. Under 
 such circumstances it is difficult to see 
 why, if the carrier, or the miller, or 
 the ferryman, or the innkeeper, or the 
 wharfinger, or the baker, or the cart- 
 man, or the hackney-coachman, pur- 
 sues a public employment and exer- 
 cises ' a sort of public office,' these 
 plaintiffs in error do not. They stand, 
 to use the language of their counsel, 
 in the very 'gateway of commerce,' 
 and take toll from all who pass. Their 
 business most certainly ' tends to a 
 common charge, and is become a thing 
 of public interest and use.' Every 
 busliel of grain for its passage ' pays 
 a toll which is a common charge,' and 
 therefore, according to Lord Hale, 
 every such warehouseman ' ought to 
 be under public regulation, viz., that 
 he * * take but reasonable toll.' 
 Certainly, if any business can be 
 clothed with a public interest, and 
 cease to be juris privati only, this has 
 been. It may not be made so by the 
 constitution of Illinois or this statute, 
 but it is by the facts. We also are 
 not permitted to overlook the fact 
 that, for some reason, the people of 
 Illinois, when they revised their con- 
 stitution in 1870, saw fit to make it 
 the duty of the general assembly to 
 pass laws ' for the protection of the 
 producers, shippers, and receivers of 
 grain and produce ' (art. 13, § 7), and by 
 section 5 of the same article, to require 
 all railroad companies receiving and 
 transporting grain in bulk or other- 
 wise to deliver the same at any ele- 
 vator to which it may be consigned, 
 that could be reached by any track 
 that was or could be used by such 
 company, and that all railroad com- 
 panies should permit connections to
 
 54 
 
 Pkivate Corporations. 
 
 when the riglit to regulate and control tliem, or to amend or repeal 
 tlieir charters, is not contahied in the act or general statutes undei' 
 which they are instituted or created. The doctrine is that the 
 
 be established by the proper authori- 
 ties for the common good. They 
 entered upon their business and pro- 
 vided themselves with the means to 
 carry it on, subject to this condition. 
 If they did not wish to submit them- 
 selves to such interference, they 
 should not have clothed the public 
 with an interest in their concerns. The 
 same principle applies to them that 
 does to the proprietor of a hackney 
 carriage, and, as to him, it has never 
 been supposed that he was exempt 
 from regulating statutes and ordi- 
 nances, because he had purchased his 
 horses and carriage and established 
 his business before the statute or 
 ordinance was adopted. It is insisted, 
 however, that the owner of property 
 is entitled to reasonable compensation 
 for its use, evei:i though it be clothed 
 with a public interest, and that what 
 is reasonable is a judicial and not a 
 legislative question. It has already 
 been shown the practice has been 
 otherwise. In countries where the 
 common law prevails, it has been cus- 
 tomary, from time immemorial, for the 
 legislature to declare what shall be a 
 reasonable compensation under such 
 circumstances, or perhaps, more prop- 
 erly speaking, to fix a maximum, be- 
 yond which any charge made would 
 be unreasonable. Undoubtedly, in 
 mere private contracts relating to mat- 
 ters in which the public has no inter- 
 est, what is reasonable must be ascer- 
 tained judicially. But this is because 
 the legislature has no control over 
 such a contract. So, too, in matters 
 which do affect the public interest, 
 and as to which legislative control 
 may be exercised, if there are no statu- 
 tory regulations upon the subject, the 
 courts must determine what is reason- 
 able. The controlling fact is the 
 power to regujate at all. If that 
 exists, the right to establish the maxi- 
 mum of charge, as one of the means 
 of regulation is implied. In fact, the 
 common-law rule, which requires the 
 charge to be reasonable, is itself a 
 regulation as to price. Without it the 
 owner could make his rates at will, 
 and compel the public to yield to his 
 terms or forego the use. But a mere 
 
 common-law regulation of trade or 
 business may be changed by statute. 
 A person has no property, no vested 
 interest in any rule of the common 
 law. This is only one of the forms of 
 municipal law, and is no more sacred 
 than any other. Rights of property, 
 which have been created by the com- 
 mon law, cannot be taken away with- 
 out due process ; but the law itself, aa 
 a rule of conduct, may be changed at 
 the will, or even the whim, of the leg- 
 islature, unless prevented by consti- 
 tutional limitations. Indeed, the great 
 office of statutes is to remedy defects 
 in the common law as they are de- 
 veloped, and to adapt it to the changes 
 of time and circumstances. To limit 
 the rate of charge for services rendered 
 in a public employment, or for the use 
 of property in which the public has 
 an interest, is only changing a regula- 
 tion which existed before. It estab- 
 lishes no new principle in law, but 
 only gives a new effect to an old one. 
 We know that this is a power which 
 may be abused, but this is no argument 
 against its existence. For protection 
 against abuses by legislatures, the 
 people must resort to the polls, not to 
 the courts. After what has already 
 been said, it is unnecessary to refer at 
 length to the effect of other provisions 
 of the fourteenth amendment, which 
 is relied upon, viz.: That no state 
 shall ' deny, to any person within its 
 jurisdiction, the equal protection of the 
 laws.' Certainly it caunot be claimed 
 that this prevents the state from 
 regulating the fares of hackmen, or 
 the charges of draymen, in Chicago, 
 unless it does the same thing in every 
 other place within its jurisdiction. 
 But, as has been seen, the power to 
 regulate the business of warehouses 
 depends upon the same principle as the 
 power to regulate hackmen and dray- 
 men, and what cannot be done in the 
 one case cannot, in this particular, be 
 done in the other. We come now to 
 consider the eifect upon this statute of 
 the power of congress to regulate com- 
 merce. It was very properly said, in 
 the case of the State Tax on Railway 
 Gross Receipts, 15 Wall. 293, that ' it 
 is not every thing that affects com-
 
 Nature and Ciiaractee of. 55 
 
 legislature creating tliem, or by or under whose acts they are cre- 
 ated, may regulate and fix the inaxiniuni or reasonable charges 
 which they may receive, the same as though they were private 
 persons; and that such regulation is not any violation of the 
 corporate contract, or any infringement of the constitutional 
 rights of the corporation, whose charges are thus fixed or regu- 
 lated. 
 
 The right of the legislature to regulate the charges of a j)rivate 
 person engaged in an employment of general public interest or 
 concern seems to be settled by a uniform current of decisions, 
 and there would seem to be no reason, based upon principle or 
 any sound public policy, against the right of the legislature to pro- 
 vide for and regulate the rates of fare and freight of incorporated 
 companies, organized and instituted for the purpose of carrying 
 persons or property. In fact, the reason for the application of 
 the doctrine we have referred to would be stronger in that case 
 than in case of mere private and individual concerns, whose busi- 
 ness is less extensive, such as draymen, hackney coachmen, etc.; 
 as railroad corporations have, by virtue of the corporate fran- 
 chises conferred upon them, although of a private character, the 
 right to condemn and appropriate private property for their pri- 
 vate purposes, on the condition that they make compensation for 
 the same to the owner.' 
 
 merce tliat amounts to a regulation rectly operate upon commerce outside 
 within tlie meaning of the coustitu- its immediate jurisdiction. We do not 
 tion.' The warehouses of these plaint- say that a case may not arise in which 
 ifFs in error are situated, and their it will be found that a state, under the 
 business carried on exclusively, within form of regulating its own affairs, has 
 the limits of the state of Illinois, encroached upon the exclusive domain 
 They are used as instruments by those of congress, in respect to inter-state 
 engaged in state, as well as by those commerce ; but we do say, that upon 
 engaged in inter-state commerce ; but the facts as they are presented to us 
 they are no more necessarily a part of in this record, that has not been done, 
 commerce itself, than the dray or cart. The remaining objection, to-wit, that 
 by which, but for them, grain would the statute in its present form is re- 
 be transferred from one railroad sta- pugnant to section 9, article 1 of the 
 tion to another. Incidentally, they may constitution of the United States, be- 
 become connected with inter-state com- cause it gives preference to tlie ports 
 merce, but not necessarily so. Their of one state over those of another, 
 regulation is a thing of domestic con- may be disposed of by a single remark, 
 cern, and certainly until congress acts that this provision operates only as a 
 in reference to their inter-state rela- limitation of the powers of congress, 
 tions, the state may exercise all the and in no respect affects the states in 
 powers of the government over them, the regulation of their domestic af- 
 even though in so doing it may indi- fairs." 
 
 ' See post, chap. 17.
 
 66 Private Corporations. 
 
 Seo. 38. Subsequent grants — exclusive privileges — construction of 
 charters.— The granting of franchises to a private corporation does 
 not ordinarily prevent future grants of the same character to 
 others. The general doctrine is, that if a grant is accepted, it be- 
 comes a contract between the state and the corporators ; yet the 
 courts, in the construction of such contracts, will not, by implica- 
 tion, extend the powers of corporations beyond the express pro- 
 visions of the grant, or such as are necessarily implied, in order to 
 carry out those expressly conferred. Thus, the grant of authority 
 by a legislature to a turnpike corporation, to construct a road 
 between two places, and collect tolls thereon, would not preclude 
 the same legislature from conferring similar powers upon other 
 companies, for different routes between the same places. This 
 doctrine is illustrated by the opinion of the supreme court of the 
 United States in a leading case.^ In this case a charter of the legisla- 
 ture of Massachusetts conferred upon certain persons authority to 
 construct a bridge over Charles river, thereby connecting Boston and 
 Charlestown, with the right to collect tolls, but without j)ro visions 
 conferring special powers, or restricting future legislative action, and 
 such bridge was built by said corporation, and the legislature subse- 
 quently incorporated another company to build the Warren bridge 
 across the same river, and near the former one, and said latter 
 company were proceeding to build such bridge, when the former 
 filed a bill for an injunction, and also for general relief, on the 
 ground that the second charter impaired the obligations of the 
 former charter, but it was dismissed.'^ And this decision was af- 
 firmed in the supreme court of the United States. Chief-Justice 
 Taney in this case, referring to the charter of the proprietors of 
 the Charles River bridge, and the rules of construction of such 
 charters, observes : " This act of incorporation is in the usual form, 
 and the privileges are such as are commonly given to corpora- 
 tions of that kind. It confers on them the ordinary faculties of a 
 corporation, for the purpose of building the bridge, and establishes 
 certain rates of toll which the company are authorized to take. 
 This is the whole grant. There is no exclusive privilege given 
 to them over the waters of Charles river, above or below their 
 bridge. No right to erect another bridge themselves, or prevent 
 
 1 Charles River Bridge v, Warren '■' 7 Pick. 344. 
 Bridge, 11 Pet. 420.
 
 Natuke and Character of. 57 
 
 other persons from erecting one. No engagement from the state 
 that another shall not be erected, and no undertaking not to sanc- 
 tion competition, nor to make improvements that may diminish 
 the amount of its income. Upon all of tliese subjects the charter 
 is silent. No words are used from which an intention to grant 
 any of those rights can be inferred. If the plaintiff is entitled to 
 them it must be implied simply from the nature of the grant, and 
 cannot be inferred from the words by which the grant is made. 
 The relative position of the Warren bridge has already been de- 
 scribed. It does not inten-upt the passage over the Charles River 
 bridge, nor make the way to it or from it less convenient. None 
 of the faculties or franchises granted to that corporation have 
 been revoked by the legislature, and its right to take the tolls 
 granted by the charter remains unaltered. In short, all the fran- 
 chises and rights of property enumerated in the charter, and there 
 mentioned to have been granted to it, remain unimpaired. But 
 its income is destroyed by the Warren bridge, which, being free, 
 draws off the passengers and property which would otherwise have 
 gone over it, and renders their franchises of no value. This is the 
 gist of the complaint. For it is not pretended that the erection of 
 the Warren bridge would have done them any injury, or in any de- 
 gree affected their right of property, if it had not diminished the 
 amount of their tolls. In order, then, to entitle themselves to re- 
 lief, it is necessary to show that the legislature contracted not to 
 do the act of which they complain, and that they impaired, or in 
 other words, violated that contract, by the erection of the Warren 
 bridge. The inquiry is, does the charter contain such a contract 
 on the part of the state ? Is there such a stipulation to be found 
 in that instrument ? * * * If a contract on that subject can 
 be gathered from the charter it must be by implication, and can- 
 not be found in the words used. Can such an agreement be im- 
 phed ? In such charters no rights are taken from the public or 
 given to the corporation, beyond those which the words of the 
 charter, by their natural and proper construction, purport to con- 
 vey." ' 
 
 ' It is further observed by the travel; the later ones interfering mater- 
 learned justice in this case, as fol- ially with the profits of the first. These 
 lows ; " Turnpike roads have been corporations have, in some instances, 
 made in succession on the same line of been utterly ruined by the introducing
 
 68 
 
 Pkivatpj Corporations. 
 
 ]jiit this doctrine does not obtain wliere tlie charter expressly 
 provides for exclusive privileges, and confers franchises of an 
 extraordinary character. And a railroad corporation, npon which 
 have been conferred such exclusive and extraordinary privileges 
 and franchises, may maintain an action in equity, for any disturb- 
 ance of them/ Thus, where it was provided in the charter of 
 such a corporation, " that no other railroad than the one hereby 
 granted shall, within thirty years from and after the passing of 
 this act, be authorized to be made, leading from Boston, Charles- 
 town or Cambridge to Lowell," it was held that this constituted a 
 contract by the state with the Boston and Lowell Bailroad Cor- 
 poration, and that no other railroad from Boston, Charlestown or 
 Cambridge to Lowell could be lawfully incorporated within thirty 
 years, and that such a condition was binding upon subsequent 
 lesrislatures of that state.'' 
 
 of newer and better modes of transpor- 
 tation and traveling. In some cases 
 railroads have rendered the turnpike 
 roads on the same line of travel so 
 useless, that the franchise of the turn- 
 pike corporation is not worth preserv- 
 ing. Yet in none of these cases have 
 the corporations supposed that their 
 privileges were invaded or any con- 
 tract violated ou the part of the state. 
 Among the multitude of cases which 
 have occurred and been daily occur- 
 ring for the last forty or fifty years, 
 this is the first instance in which such 
 an implied contract has beea contended 
 for, and this court called upon to infer 
 it from an ordinary act of incorpora- 
 
 ' When the charter contains a grant 
 of exclusive privileges it will be con- 
 strued strictly and with reference to 
 the particular objects of the grant. 
 Mnhawk Bridge Co. v. U. & S. R. R. 
 Co., 6 Paige's Ch. 554 ; Cayuga Bridge 
 Co V. Magee, 3 id. 116. But the pub- 
 lic faith as pledged in the charter will 
 be upheld at all hazard and regardless 
 of consequences to others. The En- 
 field Toll Bridge Co. v. Hartford & 
 New Haven R. R. Co., 17 Conn. 41. 
 In this case, id. 454, the court, upon 
 a further hearing, held that the fran- 
 chise of the plaintiff being in the na- 
 ture of real estate might be taken 
 under the right of eminent domain for 
 public purposes and upon proper as- 
 
 tion, containing nothing more than 
 the usual stipulations and provisions 
 to be found in every such law. The 
 absence of any such controversy, when 
 there must have been so many occa- 
 sions to give rise to it, proves that 
 neither states, nor individuals, nor 
 corporations, ever imagmed that such 
 a contract could be implied from such 
 charters. It shows that the men 
 who voted for those laws never imag- 
 ined that they were forming such a 
 contract ; and if we maintain that 
 they have made it, we must create it 
 by a legal fiction, in opposition to the 
 truth of the fact, and the obvious in- 
 tention of the party." 
 
 sessment and payment of the damages 
 thereto by such taking. See, also, 
 Bradley v. N. Y. & N. H. R. R. Co., 
 21 Conn. 299; Clark v. Saybrook, id. 
 316 ; Salem & H. Turnpike Co. v, 
 Lyme, 18 id. 457. 
 
 ^ Boston & Lowell R. Co. v. Salem & 
 Lowell R. Co., 2 Gray, 1. In this case 
 the supreme court, per Shaw, C. J. , 
 say : '* In construing this act of incor- 
 poration, we are to bear in mind the 
 time and circumstances under which 
 it was made, but more especially to 
 take into consideration every part and 
 clause of the act. and deduce from it 
 the true meaning and intent of the 
 parties. The act, like every act and 
 charter of the same kind, is a contract
 
 Nature and Ciiakacter of. 
 
 59 
 
 Sec. 39. Reservation of power in the legislature.— The inviola- 
 bility of the contract secured by incorporation, and the disa- 
 bihty of the state, through its legislature, to resume or in any 
 
 between the government on the one 
 part, and the undertakers, accepting 
 the act of incorporation, on the other ; 
 and therefore what they both intended, 
 by the terms used, if we can ascertain 
 it, forms tlie true construction of such 
 contract. * * * The question is, 
 does his provision confer any exclu- 
 sive right, interest, franchise or bene- 
 fit on this corporation '? It is found in 
 the same act ; the whole is presented 
 at once to the consideration of the 
 corporators, to be accepted or rejected 
 as a whole ; and this would, of course, 
 constitute a consideration in their 
 minds, in determining whether to ac- 
 cept or reject the charter. If it adds 
 any thing to the value and benefit of 
 the franchise, such enhanced value is 
 part of the price which tlie public 
 propose to pay, and which the under- 
 takers expect to receive, as their com- 
 pensation for furnishing such public 
 improvement. 
 
 " This is a stipulation of some sort, 
 a contract, by one of the contracting 
 parties, to and with the other ; in 
 order to put a just construction upon 
 it, we must consider the character and 
 relations of the contracting parties, 
 the subject-matter of the stipulation, 
 and its legal effect upon their respect- 
 ive rights. It was made by the govern- 
 ment, in its sovereign capacity, with 
 subjects, who were encouraged by it 
 to advance their property for the bene- 
 fit of the public. It was certainly a 
 stipulation on the part of the govern- 
 ment regulating its own conduct, and 
 putting a restraint upon its own power 
 to authorize any other railroad to be 
 built, with a right to levy a toll, and 
 of course, no other such road could 
 lawfully be made. It was, therefore, 
 equivalent to a covenant for quiet en- 
 joyment against its own acts, and those 
 of persons claiming under it. This is, 
 in fact, all that the government could 
 stipulate. It could not covenant with 
 the corporation for quiet enjoyment 
 against strangers and intruders, 
 against the unauthorized and illegal 
 disturbance of their rights by third 
 parties; against these, they would 
 
 have their remedy in the general laws 
 of the land." 
 
 The same doctrine was also held in 
 The Biughamton Bridge Case, 3 
 Wall. 51. Davis, J., in the opinion 
 in this case, observes: 
 
 "The constitution of the United 
 States declares that no state shall pass 
 any law impairing the obligation of con- 
 tracts ; and the twenty-fifth section of 
 the judiciary act provides that the final 
 judgment or decree of the highest 
 court of the state, in which a decision 
 in a suit can be had, may be examined 
 and reviewed in this court, if there 
 was drawn in question in the suit the 
 validity of a statute of the state, on 
 the ground of its being repugnant to 
 the constitution of the United States, 
 and the decision was in favor of its 
 validity. 
 
 " The plaintiffs in error brought a 
 suit in equity in the supreme court in 
 New York, alleging that they were 
 created a corporation by the legislature 
 of that state, on the 1st of April, 1808, to 
 erect and maintain a bridge across the 
 Chenango river, at Binghamton, with 
 perpetual succession, the right to take 
 tolls, and a covenant that no other 
 bridge should be built within a dis- 
 tance of two miles either way from 
 their bridge ; which was a grant in 
 the nature of a contract that cannot be 
 impaired. The complaint of the bill 
 is, that notwithstanding the Chenango 
 Bridge Company have faithfully kept 
 their contract with the state, and main- 
 tained for a period of nearly fifty years 
 a safe and suitable bridge for the ac- 
 commodation of the public, the legis- 
 lature of New York, on the 5tli of 
 April, 1855, in plain violation of the 
 contract of the state with them, au- 
 thorized the defendants to build a 
 bridge across the Chenango river 
 within the prescribed limits, and that 
 the bridge is built and open for travel. 
 
 " The bill seeks to obtain a perpetual 
 injunction against the Binghamton 
 Bridge Company from using or allow- 
 ing to be used the bridge thus built, 
 on the sole ground that the statute of 
 the state which authorizes it is repug-
 
 60 
 
 Private Corporations. 
 
 way modify or control tlie powers tlnis conferred, although tliey 
 may have been the result of unwise, hasty, or corrupt legisla- 
 tion, has created apprehensions of danger from the power that 
 
 nant to that provision of the constitu- 
 tion of the United States which says 
 that no state shall pass any law im- 
 pairing the obligation of contracts. 
 Such proceedings were had in the in- 
 ferior courts of New York, that the 
 case finally reached and was heard in 
 the court of appeals, which is the 
 highest court of law or equity of the 
 state in which a decision of the suit 
 could be had. And that court held 
 that the act by virtue of which the 
 Binghamton bridge was built was a 
 valid act, and rendered a final" decree 
 dismissing the bill. Every thing, 
 therefore, concurs to bring into exer- 
 cise the appellate power of this court 
 over cases decided in a state court and 
 to support the writ of error, which 
 seeks to re-examine and correct the 
 final judgment of the court of appeals 
 in New York. 
 
 " The questions presented by this 
 record are of importance, and have re- 
 ceived deliberate consideration. 
 
 " It is said that the revising power of 
 this court, over state adjudications is 
 viewed with jealousy. If so, we say, 
 in the words of Chief-Justice Mar- 
 shall, ' tl^at the course of a judicial 
 department is marked out by law. As 
 this court has never grasped at un- 
 granted jurisdiction, so it never will, 
 we trust, shrink from tha* which is 
 conferred upon it.' The constitutional 
 right of one legislature to grant cor- 
 porate privileges and franchises, so as 
 to bind and conclude a succeeding one, 
 has been denied. We have supposed, 
 if any thing was settled by an un- 
 broken course of decisions in the 
 federal and state courts, it was, that 
 an act of incorporation was a contract 
 between the state and the stock- 
 holders. All courts, at this day, are 
 estopped from questioning the doc- 
 trine. The security of property rests 
 upon it, and every successful enter- 
 prise is undertaken, in the unshaken 
 belief that it will never be forsaken. 
 
 " A departure from it noio would in- 
 volve dangers to society that cannot 
 be foreseen, would shock the sense of 
 justice of the country, unhinge its 
 
 business interests, and weaken, if not 
 destroy, that respect which has always 
 been felt for the judicial department 
 of the government. An attempt, even 
 to reatlirm it, could only tend to lessen 
 its force and obligation. It received 
 its ablest exposition in the case of Dart- 
 mouth College V. Woodward, 4 Wheat. 
 518, which case has ever since been 
 considered a landmark by the profes- 
 sion, and no court has since disre- 
 garded the doctrine, that the charters 
 of private corporations are contracts, 
 protected from invasion by the consti- 
 tution of the United States. And it 
 has since so often received the solemn 
 sanction of this court, that it would 
 unnecessarily lengthen this opinion to 
 refer to' the cases, or even enumerate 
 them. 
 
 " The principle is supported by rea- 
 son as well as authority. It was well 
 remarked by the chief-justice, in the 
 Dartmouth College case, ' that the ob- 
 jects for which a corporation is created 
 are universally such as the govern- 
 ment wishes to promote. They are 
 deemed beneficial to the country, and 
 this benefit constitutes the considera- 
 tion, and in most cases the sole consid- 
 eration for the grant.' The purposes 
 to be attained are generally beyond the 
 ability of individual enterprise and 
 can only be accomplished through the 
 aid of associated wealth. This will 
 not be risked unless privileges are 
 given and securities furnished in an 
 act of incorporation. The wants of 
 the public are often so imperative, that 
 a duty is imposed on government to 
 provide for them ; and as experience 
 has proved that a state should not 
 directly attempt to do this, it is neces- 
 sary to confer on others the faculty of 
 doing what the sovereign power is un- 
 willing to undertake. The legislature, 
 therefore, says to public spii'ited citi- 
 zens: ' If you will embark, with your 
 time, money, and skill, in an enterprise 
 which will accommodate the public ne- 
 cessities, we will grant to you, for a 
 limited period, or in perp^-tuity, privi- 
 leges that will justify the expenditure 
 of your money, and the employment of
 
 Mature and Chakacter of. 
 
 61 
 
 may thus be created ; ' and to guard against and protect the 
 government and the interest of the people therefrom, provisions 
 are now usually found in the constitutions of various states of 
 the Union, preventing the creation of corporations, except subject 
 to the right of the legislature to repeal or amend the same ; and 
 not unfrequently the special or general law creating them, con- 
 tains a clause, reserving the right of the legislature to control such 
 corporation and amend, alter, abridge, regulate or withdraw the 
 
 your time and skill.' Such a grant ia 
 a contract, with mutual considerations, 
 and justice and good policy alike re- 
 quire that the protection of the law 
 should be assured to it. 
 
 " It is argued, as a reason why courts 
 should not be rigid in enforcing the 
 contracts made by states, that legisla- 
 tive bodies are often overreached by 
 designing men, and dispose of fran- 
 chises with great recklessness. 
 
 " If the knowledge that a contract 
 made by a state with individuals is 
 equally protected from invasion as a 
 contract made between natural per- 
 sons, does not awaken watchfulness 
 and care on the part of law-makers, it 
 is difficult to perceive what would. 
 The corrective to improvident legisla- 
 tion is not in th6 courts, but is to be 
 found elsewhere. 
 
 " A great deal of the argument at 
 the bar was devoted to the considera- 
 tion of the proper rule of construction 
 to be adopted in the interpretation of 
 legislative contracts. In this there is 
 no difficulty. All contracts are to be 
 construed to accomplish the intention 
 of the parties; and in determining 
 their different provisions, a liberal and 
 fair construction will be given to the 
 words, either singly or in connection 
 with the subject-matter. It is nor, the 
 duty of a court, by legal subtlety, to 
 overthrow a contract, but rather to up- 
 hold it and give it effect ; and no 
 strained or artificial rule of construc- 
 tion is to be applied to any part of it. 
 If there is no ambiguity, and the mean- 
 ing of the parties can be clearly ascer- 
 tained, effect is to be given to the in- 
 
 ' Of the power of the legislature to 
 preclude itself from exercising in 
 future any of the essential attributes 
 of sovereignty, see construction of 
 the New York constitution in con- 
 
 strument used, whether it is a legisla- 
 tive grant or not. In the case of the 
 Charles River Bridge, 11 Peters, 544, 
 the rules of construction known to the 
 English common law were adopted 
 and applied in the interpretation of 
 legislative grants, and the principle 
 was recognized, that charters are to be 
 construed most favorably to the state, 
 and that in grants by the public 
 nothing passes by implication. This 
 court has repeatedly since reasserted 
 the same doctrine ; and the decisions 
 in the several states are nearly all the 
 same way. The principle is this : that 
 all rights which are asserted against 
 the state must be clearly defined, and 
 not raised by inference or presumption; 
 and if the charter is silent about a 
 power, it does not exist. If, on a fair 
 reading of the instrument, reasonable 
 doubts arise as to the proper interpre- 
 tation to be given to it, those doubts 
 are to be solved in favor of the state ; 
 and where it is susceptible of two 
 meanings, the one restricting and the 
 other extending the powers of the 
 corporation, that construction is to be 
 adopted which works the least harm 
 to tlie state. But if there is no ambi- 
 guity in the charter, and the powers 
 conferred are plainly marked, and 
 their limits can be readily ascertained, 
 then it is the duty of the court to sus- 
 tain and uphold it, and to carry out 
 the true meaning and intention of the 
 parties to it. Any other rule of con- 
 struction would defeat all legislative 
 grants, and overthrow all other con- 
 tracts . " 
 
 nection with an act of the legislature 
 relating to railways in streets, in the 
 New York court of appeals, in the case 
 of Matter of the Gilbert Elevated 
 Railroad Co., 70 N. Y. 361.
 
 62 Private Corpokations. 
 
 rights, privileges and powers conferred.' In such cases the legis- 
 lature could alter, change, set aside, abridge or regulate the cor- 
 porate powers and franchises without any violation of the contract 
 or of constitutional rights.'' 
 
 If the corporate rights are conferred subject to the reserved 
 right of the legislature to modify or repeal them, the rights of 
 powers conferred are mere privileges, subject to be withdrawn at 
 any time at the wiU of the legislature ; ^ and the right may be 
 exercised in any manner and to any extent that may be deemed 
 proper. If the corporation is a railroad company, it may, under 
 a general reservation, make changes in the level, grade and con- 
 nections of the road, direct the construction of new connecting 
 tracks, and provide in what manner, and under whose supervision 
 the work shall be done and how paid for." And in such cases, not 
 only the original corporators, but the subsequent stockholders 
 and bondholders, whose bonds are secured by mortgages, will be 
 held to have acquired their respective rights, with knowledge of 
 and. subject to the reserved right of the legislature to alter or 
 resume the powers and franchises conferred upon the corpora- 
 tion.^ 
 
 ' Code Iowa, § 1090; Const. Iowa, art. capacity. Yeaton v. Bank of the Old 
 
 8, § 12; New York Const., art. 8, § 1 ; Dominion, 21 Gratt. (Va.) 593. See, 
 
 2 R. S. 497, § 8, 5th ed. If the power also, as to power to alter or amend, 
 
 to revoke corporate charters is oon- Commissioners, etc., v. Holyoke 
 
 tained in the constitution, it need not Water Power Co., 104 Mass. 446. 
 
 be contained in the charter. Delaware, Under a reserved authority in the 
 
 etc.R. Co. V. Tharp, 5 Hfrr. (Del.) legislature contained in constitutions, 
 
 454. general or special laws, or in the char- 
 
 * West Wisconsin R, Co. v. Super- ters of corporations, tlie question has 
 visors, etc., 35 Wis. 257. Bat cousti- been presented, whether the legisla- 
 tutional or statutory provisions could ture can authorize a change of the 
 not have a retroactive effect. Id.; objects and purposes for which the 
 Hamilton v. Keith, 5 Bush (Ky.), 458; corporation was created, without the 
 GrilBn V. The Kentucky Co., 3 id. 592. unanimous concurrence of all the 
 
 ^ State V. Commissioners, 37 N. J. stockholders. In New York, Massa- 
 
 L. 228. chusetts, Illinois and Missouri, from 
 
 ■^Fitchburg, etc., R. Co. v. Grand the current of decisions, it would appear 
 Junction, etc., R. Co., 4 Allen, 198. that in the exercise of the reserved 
 See, also, Hyatt v. McMahon, 25 right of the legislature, it may author- 
 Barb. 457. ize the corporation to engage in a new 
 
 * West Wisconsin R. Co. v. Super- enterprise, or extend the objects and 
 visors, etc., 35 Wis. 257. But it can- purposes of the old one, without the 
 not compel the corporators to accept assent or concurrence of all the mem- 
 of an amendment, though it may de- bers, and even against the protest of a 
 stroy the corporation. If the original minority of them. See Northern R. 
 powers are changed or modified, they Co. v. Miller. 10 Barb. 260 ; White v. 
 must accept the same as modified or Syracuse, etc., R. Co., 14 id. 559; Sche- 
 cease to transact business in a corporate nectady, etc., Plankroad Co. v-
 
 Natdke ajstd Character of. 
 
 63 
 
 Sec. 40. Right to resume based upon misuse or abuse of its franchise. - 
 Where a charter provides, that if the corporation sliall at any 
 time misuse or abuse its franchises, the legislature may revoke 
 the grant, it has been recently held, that the power of revocation 
 is thereby made conditional, upon some misuse or abuse, and that 
 this fact must be proved upon some inquiry, giving the corpora- 
 tion an o]5portunity to be heard in defense, before the charter can 
 be revoked.^ 
 
 Sec. 41. The power to resume cannot be exhausted A reserva- 
 tion of the right to resume, repeal, or alter a corjiorate charter, or 
 grant, has none of the characteristics of a mere power, which when 
 once exercised is exhausted ; but its effect is upon the legislative 
 grant itself to prevent it from becoming, what it would become 
 without the limitation, namely, an irrevocable contract between 
 the state and the corporation.^ 
 
 Sec. 42. General statutes reserving power. — A statute which in 
 general terms provides, that the legislature may resume or amend 
 
 Thatcher, 11 N. Y. 103 ; Buffalo, etc., 
 R. Co. V. Dudley, 14 id. 336; Durfee 
 V. Old Colony R. Co., 5 Allen, 330; 
 Bauet V. Alton, etc., R. Co., 18 111. 
 504 ; Pacific R. Co. v. Hughes, 33 Mo. 
 291. But a contrary doctrine seems 
 to prevail in Wisconsin, New Jersey 
 and Maine ; and it is there held that, 
 while the legislature may, under the 
 reserved right, grant the power to 
 embark in new enterprises, not con- 
 templated in the original corporation, 
 
 ' Baltimore v. Pittsburgh, etc., R. 
 Co., 3 Pittsb. 20. The court suggests 
 in this case, that the proper mode for 
 the legislature to proceed, in such a 
 case, would be to pass a resolution 
 directing the attorney-general to in- 
 stitute the proper proceedings in the 
 courts to ascertain the facts ; and that 
 if in such proceeding the charge be 
 found true, the charter should be re- 
 voked. See, also, Commonwealth v. 
 Pittsburgh, etc., R. Co.,r)8 Penn St. 
 26, where it was held, that the legis- 
 lature was not the final judge of the 
 sufficiency of the causes for a repeal 
 of a charter, based upon a charge of 
 misuse or abuse of the same. See, 
 also, Crease V. Babcock, 23 Pick. 334; 
 
 the corporation cannot be compelled 
 to use the franchise thus conferred , 
 nor can the majority of the corporators 
 carry out the powers thus conferred, 
 against the wiU of any member. Ke- 
 nosha, etc., R. Co. V. Marsh, 17 Wis. 
 13; Zabriskie v. Hackensack, etc., R. 
 Co., 18 N. J Eq. 178 ; Oldtown, etc., 
 R. Co. V. Veazie, 39 Me. 571. See, 
 also, Delaware, etc., R. Co. v. Tharp, 
 1 Houst. (Del.) 149 ; 5 id. 454. 
 
 Commonwealth v. Essex Co., 13 Gray, 
 239 ; State v. Curran, 12 Ark. 331 ; 
 Delaware R. Co. v. Tharp, 5 Harr. 
 (Del.) 474, But in Miners' Bank v. 
 United States, 1 Greene (la.), 553, it 
 was held, in a similar case, that the 
 legislature was the proper judge as to 
 the fact of misuse and abuse, and of 
 the right to resume the powers con- 
 ferred, on their own judgment of the 
 facts ; and that their act and motives, 
 or the suflaciency of the evidence on 
 which they acted, could not he collat- 
 erally questioned in the courts. See, 
 also, post, chap. 20. 
 
 * State V. Commissioners, etc., 37 N. 
 J. L. 328.
 
 64: Private Coepokations. 
 
 charters, or control corporations, will authorize the legislature to 
 exercise this power, though tlie corporate act under which a cor- 
 poration is created contains no express limitations of its power, 
 nor any provision in relation to such reserved powers. And a 
 charter granted after the passage of a general act subjecting all 
 charters thereafter granted to amendment or changes, in the dis- 
 cretion of the legislature, is subject to alteration although the 
 charter or act creating it does not expressly refer to the act con- 
 taining the reserved power.^ 
 
 Sec. 43. Amendments of charters. — If there is a reserved risfht 
 to resume the charter or amend tlie provisions of the statutes un- 
 der wliich cor]3orations are instituted, and the legislature by virtue 
 of such authority amends the charter or statutes, the corporation 
 has a discretion whether to accept or not the grant as amended ; 
 and the granting of new franchises to an existing corporation is 
 inoperative until accepted." If the corporation accepts of such 
 an act, it must do so in an unqualified manner ; there cannot be 
 a partial acceptance of the requirements and conditions of statutes 
 granting corporate privileges.^ 
 
 Where the defendants, who Avere a corporation, had received a 
 charter, subject to the right of amendment or repeal, which gave 
 them authority to construct and use a railroad terminating in the 
 city of New Haven, and provided that the construction of that 
 part of the road within the limits of the city should be subject to 
 
 ' Bangor, etc., R. Co. v. Smith, 47 also, State v. Mayor, etc., 35 N. J. L. 
 
 Me. 34; State v. Person, 33 N. J. L. 157. 
 
 134. See, also, Oliver Lee & Co.'s ^Id. See, also, a/if^, § 31. Where 
 
 Bank, 21 N. Y. 9; Commonwealth v. there is a general power of repeal of 
 
 Fayette R. Co., 55 Penn. St. 452. corporate charters, contained in the 
 
 ^ Yeaton v. Bank of the Old Domin- constitution of a state, and there is 
 ion, 21 Gratt. (Va.) 593; Commission- also a power reserved to the legisla- 
 ers, etc., V. Holyoke Water Power Co., ture, contained in the act creating the 
 104 Mass. 446; Lyons v. Orange, etc., corporation, the power contained in 
 R. Co., 32 Md. 18 ; Kenton County v. the constitution is sufficient authority 
 Bank Lick Townp. Co., 10 Bush, 529. for the exercise of this power aa well 
 And a right reserved by the legisla- as the act of incorporation, and a re- 
 ture in an original act of incorpora- troactive statute aifecting corporations 
 tion, to alter a charter, was held to created under an act providing there- 
 confer power to impose a tax on the for, is constitutional. Oliver Lee & 
 capital stock of the company, notwith- Co.'s Bank, 21 N. Y. 9. A change of 
 standing a supplemental act, that the the constitution cannot affect a vested 
 "capital stock and dividends" of that right. Id. See, also, Reciprocity Bank, 
 kind of corporations should not be tax- 29 Barb. 369; S. C, 17 How. (N. Y.) 
 able. Union Improvement Co. v. Com- Pr. 383 ; Commonwealth v. Erie, etc., 
 monwealth, 69 Penn. St. 140. See, R. Co., 27 Penn. St. 339.
 
 Nature and Chara.cter of. 65 
 
 such regulations as the common council of the citj should pre- 
 scribe, and they constructed their road and built bridges within 
 and to the acceptance of the city, and an act was subsequently- 
 passed by the legislature authorizing the common council of the 
 city to order the bridges Mddened in such a manner as the public 
 convenience might require, and to enforce such order, it was held 
 that the act was not unconstitutional, as impairing the obligation 
 of the contract of the state with the company, or as taking their 
 property without compensation.^ And where the legislature en- 
 larged the powers of a corporation with the assent of the stock- 
 holders, it was held that no one stockholder, by refusing his as- 
 sent, could hinder the exercise of the enlarged powers.'' 
 
 Sec. 44. Repeal of charter.— Although a state enactment ex- 
 empting a corporation from taxation, if absolute, may be opera- 
 tive as a contract, so that it cannot be abrogated by subsequent 
 legislation, yet where, instead of being absolute, the charter is 
 accepted, subject to the general law of the state, that all corpo- 
 rate charters shall be subject to amendment or repeal by the legis- 
 lature, a subsequent legislature may revoke it.^ So, a state legis- 
 lature has power to pass a law affecting the interests of a corpora- 
 tion, under a general power reserved by a law antedating the char- 
 ter, i^roviding the charter is subject to amendment ori-epeal; and 
 the objection in sucli a case, that tlie subsequent legislation 
 amending the charter impairs the obligation of the contract, will 
 not avail.* 
 
 Sec. 45. General implied powers of corporations. — The creation 
 of a corporation under a special or a general statute would carry 
 with it, by implication, all the common-law incidents and powers 
 of a corporation, unless there was some limitation contained in the 
 law at the time. These common-law incidents and powers, as we 
 have before observed, are the right of perpetual succession, to sue 
 
 'English V. New Haven, etc., R. Co., v. Accommodation Bank, etc., 26 La. 
 
 33 Conn. 240 ; Buffalo, etc., R. Co. v. Ann. 288. 
 
 Dudley, 14 N. Y. 836. See, also, Peo- ^Tomlinson v. Jessup. 15 Wall. 454. 
 
 pie V. Grand, etc., Plank R. Co., 10 See, also, Tomlinson v. Branch, id. 
 
 Mich. 400. 460. 
 
 ^Currv V. Scott, 54 Penn. St. 370. ''Tomlinson v. Branch, supra,- Mil- 
 
 If the alterations be fundamental, the ler v. State, 15 Wall. 478 ; Holyoke v. 
 
 acceptance must be unanimous. State Lyman, id. 500, 
 
 9
 
 66 Private C(?rporations. 
 
 and be sued, to grant and receive in the corporate name, to pur- 
 cliase and hold real and personal property, to have a common seal, 
 and to make bv-laws.^ 
 
 Sec. 46. Powers conferred or limited by statutes. — The powers 
 and privileges of corporate bodies are, however, usually limited 
 and controlled by the creative statutes.''^ These may extend, or 
 limit and restrain, the corporate common-law powers and privi- 
 leges. The legislative authority in this respect is restrained only 
 by constitutional provisions. The charter or statute is the funda- 
 mental law of the corporate existence ; and usually specifies the 
 powers which it is intended to confer, the mode of exercising, 
 resuming, or amending or modifying the same. The acceptance 
 of a grant of corporate powers is, of course, an acceptance of all 
 the requirements and conditions of it, and there can be, as 'we 
 have noticed, no qualified or conditional acceptance of it, or of 
 any amendment of the same.^ 
 
 The powers and franchise conferred by the grant of corporate 
 privileges, Avhether at common law or under the statutes, are of 
 three kinds, namely : tliose granted in express words ; those nec- 
 essarily implied in, or incident to, the powers expressly granted, 
 and those essential to tlio objects and purposes of the grant.* 
 
 In this respect the same rules of construction would be appli- 
 cable to a municij^al as to a private corporation. ]^o powers can 
 
 ' 1 Bl. Com. 475; Kyd on Corp. 13, else of the corporate powers granted. 
 
 69, 70. See, also, Penobscot Boom Head v. Providence Ins. Co., 2 Cranch, 
 
 Corp. V. Lamson, 16 Me. 24. So, at 127; Dartmouth College v. Woodward, 
 
 common law, corporations could take 4 Wheat. 63G ; Beaty v. Knowler, 4 
 
 property by all the usual methods of Pet. 152; Smith v. Eureka Flour 
 
 acquiring it. Sherwood v. American Mills, 6 Cal. 1 ; Winter v. Muscogee 
 
 Bible Society, 4 Abb. Ct. App. Dec. R. Co., 11 Ga. 438; Louisiana State 
 
 227. Bank v. Orleans Nev. Co., 3 La. Ann, 
 
 ^ Perrine v. Chesapeake, etc.. Canal 294; Baltimore v. Baltimore, etc., R. 
 
 Co., 9 How. 182. See, also, Haynes v. Co., 21 Md. 50 ; Whitman Mining Co. 
 
 Covington, 21 Miss. 408. v. Baker, 3 Nev. 386 ; Downing: v. Mt. 
 
 3 Farmers' Loan & Trust Co. v. Car- Washington R. Co., 40 N. H. 230 ; 
 
 roll, 5 Barb. Ch. 613 ; The Bush wick, Strauss v. Eagle Ins. Co., 5 Ohio St. 
 
 etc., Co. V. Ebbetts, 3 Edw. (N. Y.) 59 ; White's Bank v. Toledo Ins. Co., 
 
 353. See, also, Penobscot Boom Corp. 12 id. 601; Madison, etc., R. Co. v. 
 
 V. Lamson, 16 Me. 234. The Miners' Watertown, etc., P. R. Co., 5 Wis. 173. 
 
 Ditch Do. V. Zellerbach. 37 Cal. 543. Middle Bridge v. Brooks, 13 Me. 391 ; 
 
 * 1 Dill, on Corp., g 55. A corpora- Merriam v. Sloody's Executors, 25 la. 
 
 tion has no power' except what is 163 ; Nicholson Pavement Co. v. 
 
 given by its incorporating act, either Painter, 35 Cal. 699. 
 expressly or as incidental to the exer-
 
 Nature ajstd Chakacter of. 67 
 
 be exercised except such as are conferred, and in case of reason- 
 able doubt it must be decided against the corporation. If a 
 power is exercised which is not autliorized, it is idtra mres and 
 void. But we will consider this subject hereafter. On the sub- 
 ject of corporate powers and rights, and the rules of construction 
 of corporate charters, Mr. Justice CnuRcu very forcibly and 
 accurately observes: "In this country all corporations, whether 
 public or private, derive their power§ from the legislative grant, 
 and can do no act for which authority is not expressly given or 
 may not be reasonably inferred. But if we were to say that they 
 can do nothing, for which a warrant could not be found in the 
 language of their charters, we should deny them in some cases 
 the power of self-preservation, as well as many of the means 
 necessary to effect the essential objects of their incorporation. 
 And, therefore, it has long been an established principle in the law 
 of corporations, that they may exercise all the powers within the 
 fair intent and purpose of their creation, which are reasonable and 
 proper to give effect to the powers expressly granted. In doing 
 this, they must have a choice of means adapted to ends, and are 
 not confined to any one mode of operation." ^ But the jjowers 
 must be germane to the purposes of its creation ; "^ and in con- 
 struing grants, the settled rule of the courts is, that only such 
 powers and rights can be exercised under them as are clearly com- 
 prehended within the words of the act, or derived therefrom by 
 necessary implication, the objects of the grant being considered 
 in construing it. But any doubts arising in the construction of 
 public grants are in favor of the public' » 
 
 Sec. 4:7. The corporate powers limited to the objects of the grant. — 
 In construing corporate grants, it is uniformly held, that the cor- 
 porate powers are restricted by the nature and objects of the insti- 
 tution, and will not in this respect extend beyond the letter or 
 
 ' Bridgeport v. Railroad Co., 15 herself to that extent of the power 
 
 (Jonu. 475. that belongs to her, it is so easy to 
 
 2 Mayor v. Yuille, 3 Ala. 137; Harris say so, that we will never believe it to 
 
 V. Intendaut, 28 id. '577 ; Intendant v. be meant when it is not said. * * * 
 
 Chandler, 6 id. 899. In tlie construction of a charter to be 
 
 ^Minturn v. Larue, 23 How. (U. S.) in doubt is to be resolved ; and every 
 
 435. The supreme court of Pennsyl- resolution which springs from doubt 
 
 vania say: " When a state means to is against the corporation." Pennsyl- 
 
 clothe a corporate body with a portion vania R. Co. v. Canal Coms., 21 Penn. 
 
 of her own sovereignty, and to disarm St. 22.
 
 68 
 
 Pkivate Corporations. 
 
 spirit of the grant or statute. They can lawfully exercise no 
 powers except such as are exjpressly conferred^ or such as are nec- 
 essary to the performance of corporate duties, in the accomplish- 
 nnent of the purposes and objects for lohich thehody was incorpo- 
 rated. An attempt to exercise powers beyond tliis would be 
 tdtra vires and void.^ 
 
 "Tliis principle," observes Chief-Justice Shaw, "is derived 
 from the nature of corjoo'rations, the mode in whicli they are 
 
 ' Vandall v. San Francisco Dock Co., 
 40 Cal. 83. They can exercise only 
 such powers as are expressly confer- 
 red upon them, or such as are fairly 
 implied to enable them to fully carry 
 out the purposes for which they were 
 incorporated. Weckler v. First Na- 
 tional Bank, 43 Md. 581; Matthews v. 
 Skinner, 63 Mo. 339; Bellmeyer v. 
 Independent Dist. of Marshaltown, 44 
 Iowa, 164. They have none of the 
 elements of sovereignty and cannot go 
 beyond the powers conferred upon 
 them by law. St. Louis v. Weber, 
 44 Mo. 547. And where extraordinary 
 powers are conferred, which contra- 
 vene established rights, they will be 
 construed strictly. Greenwich v. 
 Easton, etc , R. R. Co., 24 N. J. Eq. 
 217. But as previously stated, a corpo- 
 ration chartered for a specific purpose 
 takes, by implication, all the incidental 
 powers necessary for the consum- 
 mation of such purpose, even though 
 the charter prohibits it from exercis- 
 ing any powers, except such as are 
 essential to its corporate existence. 
 Morris, etc., R. R. Co. v^ Sussex R. 
 R. Co., 20 N. J. Eq. 542. But it can do 
 no act expressly prohibited by the char- 
 ter, although otherwise it might have 
 been fairly within its incidental pow- 
 ers. Farmers, etc., Bank v. Harrison, 
 57 Mo. 503. Thus, a corporation author- 
 ized to receive deposits, may issue 
 certificates of deposit, even though 
 prohibited from issuing bills, bonds, 
 notes, or other securities to circulate as 
 money, because the purposes of the 
 corporation being to receive deposits, 
 it will be presumed that the legisla- 
 ture did not intend to prohibit it from 
 giving to a depositor such necessary 
 evidence of its liability for a deposit, 
 even though it be used to circulate as 
 money. Talladega Ins. Co. v. Landers, 
 
 43 Ala. 115. In Vandall v. South San 
 Francisco Dock Co., 40 Cal. 83, the 
 powers enumerated in the certificate 
 of incorporation of a dock company 
 were to buy, improve, or dispose of 
 real estate, etc., and it was held that 
 the term improve must be construed 
 in its most liberal sense as including 
 the performance of any act, whether 
 on or off the land, the direct and proxi- 
 mate effect of which icould be to enhance 
 its value in the market. So in Dorsey, 
 etc., R. R. Co. V. Marsh, 6 Fisher's 
 Pat. Cas. (U. S.) 387, it was held that 
 a power to purchase property enables 
 a corporation to purchase and hold a 
 patent, the ownership of which is ap- 
 propriate to enable it to execute the 
 corporate purpose. For instances of 
 other incidental powers see The Ca- 
 mauche, 8 Wall. (U. S.) 448 ; New 
 England Car Spring Co. v. Union In- 
 dia-rubber Co., 4 Blatchf. 1 ; Miner's 
 Ditch Co. V. Zellerbach, 37 Cal, 543 ; 
 Central Gold Mining Co. v. Piatt, 3 
 Daly (N. Y. C. P.), 263. In a Penn- 
 sylvania case this right to exercise 
 incidental powers was well illustrated 
 in a case where a company owning a 
 large body of unimproved lands was 
 held to have power to build saw-mills 
 and a hotel to accommodate persons 
 having business at the location of the 
 company, under a clause in the charter 
 authorizing it " to aid in the develop- 
 ment of minerals and other materials, 
 and to promote the clearing and set- 
 tlement of the countrv." Watt's Ap- 
 peal, 78 Penn. St. 370. See, also. 
 White V. Lester, 4 Abb. App. Dec. 
 (N. Y.) 585 ; Dupee v. Boston Water 
 Power Co.. 114 Mass. 37; Hahn v. 
 Purdell,3 Bush, 189; West v. Madison 
 Co. Ag. Board, 82 111. 205 ; Kitchen v. 
 Cape Girardeau, etc., R. Co., 59 Mo. 514.
 
 Nature and Character of. 69 
 
 oi'gaiiized, and in wliicli their affairs must be conducted. In 
 aggregate corporations, as a general rule, the act and will of the 
 majority is deemed in law the act and will of the whole — as the 
 act of the corporate body. The consequence is, that a minority 
 must be bound not onl}^ without but against their consent. Such 
 an obligation may extend to every onerous duty, to pay money to 
 an unlimited amount, to perform services, to surrender lands, and 
 the like. It is obvious, therefore, that if this liability were to ex- 
 tend to unlimited and indefinite objects, the citizen, by being a 
 member of a corporation, might be deprived of his most valuable 
 personal rights and liberties. The security against tliis danger is 
 a steady adherence to the principle stated, viz., that corporations 
 can only exercise powers over their respective members, for the 
 accomplishment of limited and defined objects. And if this prin- 
 ciple is important, as a general rule of social right and municipal 
 law, it is of the highest importance in those states where corpora- 
 tions have been extended and multiplied, so as to embrace almost 
 every object of human concern." ^ 
 
 According to the principles of the law relating to the powers of 
 corporations, it is evident that if a corporation is instituted for 
 purposes of insurance, it could not properly engage in banking, 
 but must be confined to the business for which it was incorpo- 
 rated ; and it has been held that notes discounted, and securities 
 for money loaned by an insurance company, in violation of stat- 
 utes restraining such action, were void.'* The same doctrine was 
 held in a case where a library association attempted to exercise 
 the business of banking.^ So, power to acquire lands for a right 
 of way does not authorize a railroad company to acquire lands 
 for speculative purposes,* nor does the grant of a right " to grant, 
 bargain, sell, buy or receive all kinds of property, real, personal 
 
 ' Spaulding v. Lowell, 23 Pick. 71. 11 Ohio, 96. See, also, Knowles, les- 
 
 See, also, Stetson V. Kempton, 13 Aiass. see, v. Beatty, 1 McLean (C. C), 43; 
 
 372; Willard V. Newburyport, 12 Pick. People v. Utica Ins. Co, 15 Johns. 
 
 227; Keyes v. Westford, 17 id. 273; 358; Korn v. Mutual Ins. Soc, 6 
 
 Cooley V. Granville, 10 Cush. 57. And Cranch, 192; New York Fire Ins. Co. 
 
 the law creating a corporation will be v. Ely, 2 Cow. 678; Bank of Utica v. 
 
 an index to the objects for which it Sniedes, 3 id. 662; Perrine v. Chesa- 
 
 was created and the powers with which peake, etc.. Canal Co., 9 How. (U. S.) 
 
 it was endowed. Aurora v. West, 9 172; Trustees v. Peaslee, 15 N. H. 317. 
 Ind. 74. * Pacific R. R. Co. v. Seely, 45 Mo. 
 
 ^ Utica Ins. Co. v. Scott, 19 Johns. 1. 212. 
 
 ^ State V. Washington Library Co. ,
 
 70 Pkivate Corporations. 
 
 or mixed, or to hold the same iii trust or otherwise * * * * 
 and to advance moneys * * * ^- upon any property, real or 
 personal, on such terms or commissions as may be established or 
 approved, by the directors," necessarily authorize the corporation 
 to transact a banking business.^ In a word, a corporation takes 
 no powers by implication, except such as are fairly incident to the 
 objects and purposes of the grant.'' No power can be implied in 
 favor of a corporation to do an act in opposition to the general 
 law, or which is prohibited by it. Thus where the charter of a 
 company authorized it to dispose of property " in any manner they 
 deem best," it was held that this did not authorize it to dispose of 
 its property by lottery, lotteries being prohibited by statute.^ ISTor 
 does authority given by a charter to carry on a certain business 
 authorize it to carry it on in a way that would lead to injurious 
 results to others, or materially afiect their health, their comfort or 
 their property." 
 
 "We shall hereafter consider the powers of corporations in con- 
 nection with corporate meetings, and the management of corpo- 
 rate business ; the power to sue and be sued, to use a corporate 
 seal, to contract, and to make by-laws. 
 
 Sec. 48. Distinction between corporate and copartnership associations. 
 
 — There are some points of resemblance as well as marked, differ- 
 ences between corporate and mere partnership associations, which 
 it may be Avell here to notice. The leading principles of the com- 
 mon law relating to both corporations and partnerships are bor- 
 rowed from the Roman law. This is the inexhaustible fountain 
 of various and valuable learning — the concentrated wisdom of 
 eminent jurists, adapted to the convenience, the wants and the 
 policy of a commercial people in all ages.^ 
 
 The points of resemblance which may be noticed are : (1) each 
 may be composed of many members associated together for some 
 specific object ; (2) the members may consist not only of natural 
 persons, but of other corporations or partnerships ; (3) the capital 
 
 1 New York Trust, etc., Co. v. Hel- ^gaijcQck y. New Jersey Stock Yard 
 
 mer, 12 Hun (N. Y.), 85. Co., 20 N. J. Eq. 296. 
 
 ■'' Peruvian R. R. Co. v. Thames, etc., * Story on Part., chap. 1; 2 Kent's 
 
 Ins. Co., L. R., 2 Ch. App. 617. Com., § 33, p. 269; IBrown's Civ. and 
 
 3 State V. Krebs, 64 N. C. 604. Adm. L. 142; Wood's lus. Civ. I.. 134.
 
 Natdke and Chauacteb of. 71 
 
 of each may consist of a joint stock, wliicli may be divided mider 
 by-laws or fuiidameutal articles of agreement into shares, and 
 transferred by assignment or delivery ; (4) each may have a com- 
 mon name ; (5) the liability of partners, like that of corporators, 
 is frequently, as we have observed, limited by statute to a certain 
 amount, as the amount of the stock subscribed or owned by them ; 
 (6) each usually acts by its agents, and may sue and be sued by 
 the corporate and partnership name. On the other hand, there 
 are, at least at common law, some marked distinctions between 
 them. The members of a partnership are each agents for the 
 partnership, and by their simple act may bind the firm, as any 
 other agent may, within the scope of his authority, bind his prin- 
 cipal. Each member is personally liable to the creditors of the 
 firm. But as a general rule corporators are not personally hable 
 to the creditors of the corporation, although they may be required 
 to fulfill their obligations to it.^ ISTor is there any general au- 
 thority for corporators to act as agents for the corporation.^ In the 
 case of partnerships each partner h the accredited agent of the 
 other, and may bind them as such agent to the extent of their 
 property, but the personal responsibility of stockholders is incon- 
 sistent with a body corporate at common law.^ It very often 
 happens, however, that the charter imposes liability upon stock- 
 holders in certain instances, and in some instances the statute pro- 
 vides that the stockholders shall, under certain circumstances, be 
 
 ' The stockholders of a company in- iently. The persons in question must 
 corporated under general laws are not be constituted a corporation by means 
 partners even between themselves, of a legislative act or charter, or they 
 Baker v. Backus, 33 111. 79. And must enter into a partnership by virtue 
 where the statute contains no provis- of a contract. In either case their re- 
 ion making the corporators Individ u- lations will be determined, partly by 
 ally liable, they are not so liable, the express provisions of the charter 
 Shaw V. Boylau, 16 Ind. 384. And or contract, and partly by the implied 
 such liability cannot be imposed by a conditions tacitly annexed by law to 
 by-law. Trustees, etc., v. Flint, 3 each of these relations. Thus, while 
 Mete. (.Mass.) 539: Hopkins v. White- corporations and partnerships both 
 sides, i Head, 31; Coburn V. Wheelock, agree in being relations voluntarily 
 34 N. Y. 440. assumed by the members, and also in 
 
 2 Ruby V. Portland, 15 Me. 306 having for' their object the association 
 
 3 " When two or more persons desire of several individuals for the purpose 
 to unite their means for the purpo.'5e of co-operation in business, yet they 
 of carrying on some enterprise or differ so materially in their mode of 
 business which neither might be able creation, and in many other respects, 
 to accomplish by himself alone, there that they require a separate considera- 
 are but two ways of doing it conven- tion." Walker on Am. Law, p. 223.
 
 72 Pkivate Ooepoeations. 
 
 responsible for the debts of the corporation, but, except where 
 the statute so provides, liability does not attach to the stockholders. 
 In other words, no liability attaches to stockholders for the debts 
 of a corporation beyond that imposed by statute.
 
 Perpetual Succession. 73 
 
 CHAPTER IV. 
 
 pekeptual succession. 
 
 Sec. 49. The doctrine of immortality. 
 
 Sec. 50. The advantages of perpetual succession. 
 
 Sec. 49. The doctrine of immortality. — The capacity of perpetual 
 succession is the distinctive feature of, and among the most import- 
 ant incidents connected with private corporations. This is some- 
 times expressed by the term "immortality," which, however, is not 
 strictly correct, as applicable to corporations, as perpetual succes- 
 sion only means that they may continue, and rights and interests 
 therein be transferred in succession, for an indefinite time, or so 
 long as the corporation legally exists. But private corporations in 
 this country are usually limited as to the period of their continu- 
 ance by the statutes under which they are constituted, and they 
 may also be terminated for various causes, before the period thus 
 limited. They may, for instance, be dissolved for the want of 
 members, for nonuser, or for misuser of their franchises.^ By 
 virtue of this capacity of succession a corporation continues the 
 same legal person and identity, from the time of its creation until 
 the time of its dissolution, notwithstanding changes in its mem- 
 bers by death or otherwise, " so that it is unnecessary to make 
 grants to them and their successors, or to declare their obligations 
 binding on their successors." "'' 
 
 Sec. 50. The advantages of perpetual succession. — Perpetual suc- 
 cession, as we have seen, is that continuous existence which enables 
 a corporation to manage its affairs and hold property, without the 
 
 i2Kydon Corp. 445; Wilcox on of California College, 38 Cal. 166. For 
 
 Corp. 326 ; 1 Bl. Com. 485; 3 Kent's instances in which corporations may 
 
 Com. 305; Boston Glass M'fg Co. v. be dissolved, also for the necessary 
 
 Langdon, 24 Pick. 52; Mclntyre Poor steps to secure the same, see chapter 
 
 School V. Zanesville Canal Co., 11 Ohio, on Dissolution, etc., post. 
 
 203. So they may surrender their '^ 1 Wile, on Corp. 16. 
 franchises. People v. President, etc., 
 
 10
 
 74 Pkivate Corpokations. 
 
 necessity of perpetual conveyances for tlie purpose of transmit- 
 tin<^ it. By reason of this quality this ideal and artificial person 
 remains, in its legal identity and personality, the same, though 
 fre(pient changes may be made of its members ; and although all 
 of its members may be changed and new ones substituted for the 
 old, it still legally I'emains one person. In reference to the ad- 
 vantages thus possessed by a corporation, Blackstone observes : 
 " To show the advantages of these incorporations, let us consider 
 the case of a college in either of our universities, founded ad 
 studendum et orandutn, for the encouragement and support of 
 religion and learning. If this was a mere voluntary assembly 
 the individuals which compose it might indeed read, pray, study, 
 and perform scholastic exercises together, so long as they 'could 
 agree to do so ; but they could neither frame nor receive any laws 
 or rules of their conduct, none, at least, which could have any 
 binding force, for want of coercive power to create a sufficient 
 obligation. Neither could they be capable of retaining any privi- 
 leges or immunities, for if such privileges be attacked, which of 
 all this uncontrolled assembly has the ability to defend them ? 
 And when they are dispersed by death or otherwise, how shall 
 they transfer these advantages to another set of students equally 
 unconnected as themselves ? So also with regard to holding es- 
 tates or other property, if land be granted for purposes of religion 
 or learning to twenty individuals not incorporated, there is no 
 legal way of continuing the property to any other persons for the 
 same purposes but by endless conveyances from one to the other 
 as often as the hands are changed. But when they are consoli- 
 dated and united into a corporation, they and their successors are 
 considered as one person in law. As one person they have one 
 will, which is collected from the sense of the majority of the in- 
 dividuals. This one will may establish rules and orders for the 
 I'egulation of the whole, which are a sort of municipal laws for 
 this little republic ; or rules and statutes may be prescribed to 
 it at its creation, which are then in the place of natural laws. The 
 privileges and immunities, the estates and possessions of the corpo- 
 ration, when once vested in them, will be forever vested, without 
 any new conveyance to new successions, for all the individual 
 members that have existed from the foundation to the present
 
 Perpetual Succession. 75 
 
 time, or that shall ever hereafter exist, are but one person in law, 
 a person that never dies, in like manner as the river Thames is 
 still the same river, though the parts which compose it are changing 
 every instant."^ The members of the corporation may change, but 
 it remains the same legal person, whether the corporation is ])ub- 
 lic or private It continues the same body politic from its crea- 
 tion to its dissolution, unaltered by the revolutions of ages or the 
 successive changes of its members ; therefore it is unnecessary to 
 make grants to it and its successors, or to declare its obligations 
 binding on its successors,^ If a conveyance of land is made to 
 an association of individuals not incorporated, their successors 
 could not enjoy the land without a conveyance from each of the 
 members composing it, and if numerous changes should be made 
 in the members of the association, as many conveyances would be 
 required. On the other hand, if the persons were incorporated 
 so that in law. they would constitute but one person, a conveyance 
 of land to them in their corporate capacity and name would vest 
 the title in the corporation, and it could thus be enjoyed by it so 
 long as it had a legal being, or until it should make a conveyance 
 of the same in its corporate name. 
 
 The advantages of this perpetual continuance and succession in 
 the ^•arious undertakings of mankind at the present day will be 
 manifest. In enterprises of great magnitude, where the associated 
 ^\■ealth of many persons may be requii-ed, it enables the persons 
 thus associated as one body to apply the capital thus pledged to 
 the objects of the association ; to hold real or personal property, 
 and convey the same without the inconvenience of frequent con 
 veyances by each member, or of perpetual conveyances, at each 
 change of membership ; " and its youth and vigor are perpetuated 
 by a succession of fresh managers, while its finances can neither 
 become legally diverted from its business, nor be withdrawn for 
 personal gratification or necessity.'' ^ 
 
 ' 1 Bl. Com. 467, 468. Justice Marshall, in relation to the 
 "^ 1 Wile, on Corp. 16; Grant on Corp. properties of corporations, observes : 
 5; Qloyer on Corp. 8 ; 7 Vin. Abr. 358; "Among the most important are im- 
 1 Bl. Com. 468. mortality, properties by which a per- 
 ^ Dartmouth College v. Woodward, 4 petual succession of persons are con- 
 Wheat. 636; ante, g 1. In Dartmouth sidered the same, and may act as a 
 College V. Woodward, supra. Chief- single individual. They enable a cor-
 
 76 Private Corporations. 
 
 This right of perpetual succession is incident to every corpora- 
 tion ; and they may take, hold, and transmit real or personal prop- 
 erty, limited in that respect only, by the constitution or the act 
 creating it. We shall hereafter more fully consider the power to 
 acquire and hold property and the limitations on this power. 
 
 poration to manage its own affairs and in succession, with these qualities and 
 
 to hold property without the perplex- capacities, that corporations were in- 
 
 ing intricacy, the hazardous and end- vented and are in use. By these means 
 
 less necessity of perpetual convey- a perpetual succession of individuals 
 
 ances, for the purpose of transmitting are capable of acting for the promotiou 
 
 it from hand to hand. It is chieliy for of the particular object like one im- 
 
 the purpose of clothing bodies of men, mortal being."
 
 Members — Stockuolders and Stock. 77 
 
 CHAPTEK V. 
 
 MEMBERS. STOCKHOLDERS AND STOCK. 
 
 Sec. 51. Composition of private corporations. 
 
 Sec. 53. The government may constitute a member. 
 
 Sec. 53. Admission and election of members and officers. 
 
 Sec. 54. Disfranchisement and expulsion of members. 
 
 Sec. 55. Quasi corporations. 
 
 Sec. 56, Membership under general statutes. 
 
 Sec. 56a. Certificates of stock, nature of, etc. 
 
 Sec. 57. Management by directors. 
 
 Sec. 58. Shareholders are members — right to vote. 
 
 Sec. 59. Transfer books of company. 
 
 Sec. 60. Executor of stockholder, rights of. 
 
 Sec. 61. Right to vote by proxy or attorney. 
 
 Sec. 63. Matters that stockholders are presumed to know. 
 
 Sec. 63. Personal liabilities of, under statutes. 
 
 Sec. 64. Cause of action, accrues when. 
 
 Seo. 65. Intentional deceit as to organization, etc. 
 
 Sec. 66. General liabilities of, on subscription to stock. 
 
 Sec. 67. Conditions provided by the constating instruments. 
 
 Sec. 68. Special disabilities created by charter. 
 
 Sec. 69. Condition must be complied with. 
 
 Sec. 70. Conditional subscriptions. 
 
 Sec. 71. Company may accept payment in labor, etc. 
 
 Sec. 73. The condition may be waived. 
 
 Sec. 73. When the condition is void. 
 
 Sec. 74. Conditions which will avoid the whole contract. 
 
 Sec. 75. Conditional subscriptions continued. 
 
 Sec. 76. Fraudulent subscriptions. 
 
 Sec. 77. Subscriptions in contemplation of incorporation. 
 
 Sec. 78. Fraud in relation to subscriptions. 
 
 Sec. 79. Rules depend upon statutes or constating instruments. 
 
 Sec. 80. Defense to subscriptions on other grounds. 
 
 Sec. 81. Changes in charter. 
 
 Sec 82. Assessments and calls for payments. 
 
 Sec. 83. Promise to pay, eflFect of, by whom calls should be made. 
 
 Sec. 84. Diversion of capital to other purposes. 
 
 Sec. 85. Forfeiture of stock. 
 
 Sec. 86. Assessments — rules in relation to. 
 
 Sec. 87. Power to lay, cannot be delegated.
 
 78 PltlVATE CORPOEATIONS. 
 
 Statutory power must be followed. 
 
 Several assessments may be laid at one time, when. 
 
 Notice of assessments or calls. 
 
 Sufficiency of. 
 
 Rights of stockholders to dividends. 
 
 Right of purchaser to dividends. 
 
 Effect of declaring dividend. 
 
 A stockholder may sue for his dividends. 
 
 Income on stock in trust. 
 
 Money in hands of directors. 
 
 Right to sell and assign shares. 
 
 Transfer of stock. 
 
 Power of attorney to transfer, presumption arising from. 
 
 Liabilities of assignees to corporations. 
 
 Liability of purchasers from trustees. 
 
 Right of trustee to pledge. 
 
 Rights of cesttd que trust against purchaser. 
 
 Stockholder's right to vote — holding stock constitutes right. 
 
 Right of stockholders to access to books. 
 
 Holders of preferred stock. 
 
 When it can be issued — dividends on. 
 
 Scrip and preliminary subscriptions. 
 
 Stock defined, etc. 
 
 Issuing certificates of shares. 
 
 Certificates unlawfully issued. 
 
 Fraud in issuing stock certificates. 
 
 Shares and income — character and quality of, as property. 
 
 Interest of stockholders in corporate property. 
 
 How stockholder's interest is conveyed. 
 
 Character and quality of certificates 
 
 Transfer of shares — how made . 
 
 Effect of assignment and delivery. 
 
 Refusal of the corporation to transfer. 
 
 Contracts for the transfer of shares. 
 
 Liens of the corporation on stock. 
 
 Company may refuse to transfer, when. 
 
 Instances where corporation has been held justified in refusing 
 
 to transfer. 
 Corporation may be compelled to transfer. 
 Stock subject to execution against assignor, until transferred. 
 Stockholder's right of action against the corporation. 
 When stockholder may have injunction against corporation. 
 Liability of the stockholders in equity to creditors. 
 Overissued, and " watered stock." 
 
 Sec. 51. Composition of private corporations. — We liave stated that 
 a corporation is an association of persons constituting in law one 
 
 Sec. 
 
 88. 
 
 Sec. 
 
 89. 
 
 Sec. 
 
 90. 
 
 Sec. 
 
 91. 
 
 Sec. 
 
 93. 
 
 Sec. 
 
 93. 
 
 Sec. 
 
 94. 
 
 Sec. 
 
 95. 
 
 Sec. 
 
 96. 
 
 Sec. 
 
 97. 
 
 Sec. 
 
 98. 
 
 Sec. 
 
 99. 
 
 Sec. 
 
 100. 
 
 Sec. 
 
 lOL 
 
 Sec. 
 
 102. 
 
 Sec. 
 
 103. 
 
 Sec. 
 
 104. 
 
 Sec. 
 
 105. 
 
 Sec. 
 
 106. 
 
 Sec. 
 
 107. 
 
 Sec. 
 
 108. 
 
 Sec. 
 
 109. 
 
 Sec. 
 
 110. 
 
 Sec. 
 
 111. 
 
 Sec. 
 
 113. 
 
 Sec. 
 
 113. 
 
 Sec. 
 
 114. 
 
 Sec. 
 
 115. 
 
 Sec. 
 
 116. 
 
 Sec. 
 
 117. 
 
 Sec. 
 
 118. 
 
 Sec. 
 
 119. 
 
 Sec. 
 
 130. 
 
 Sec. 
 
 131. 
 
 Sec. 
 
 123. 
 
 Sec. 
 
 133. 
 
 Sec. 
 
 134. 
 
 Sec. 
 
 135. 
 
 Sec. 
 
 136. 
 
 Sec. 
 
 137. 
 
 Sec. 
 
 138. 
 
 Sec. 
 
 139,. 
 
 Sec. 
 
 130.
 
 Members — Stockholdees and Stock. 79 
 
 artificial person, endowed with certain capacities and incidents ; 
 and tliat the component parts or corporators need not necessarily 
 be natural persons. On the contrary, this incorporeal, imaginjlry 
 and artificial person may be composed of other artificial persons 
 or coi'porations, or of copartnerships, as well as natural persons ; 
 and they may consist of women and children as well as adult per- 
 sons."' 
 
 Sp;c. 52. The government may constitute a member, — The govern- 
 ment may be a stockholder in a corporation or company, and, 
 when it assumes that relation, to that extent, it divests itself of 
 its sovereign character, and takes that of a private citizen,^ and 
 the fact that the state is the sole owner of the stock of a corpora- 
 tion does not dejDrive a creditor of the corporation of his legal or 
 equitable remedies,* nor does a debt due to such a corporation 
 acquire any incidents, or priorities, not possessed by debts due to 
 individuals or other corporations.^ In the case of the original 
 United States Bank, incorporated in 1791, the goverimient be- 
 came one of its members by subscription to its stock to the amount 
 of one-fifth thereof." This institution was not merely a com- 
 mercial institution, but was mainly and essentially of a financial 
 and political character ; and like the banks of England, Yenice 
 and Genoa, it was chartered mainly for governmental purposes ; 
 and the United States became a member by subscribing to its 
 stock through its authorized agent.'' So, in case of tlie Planters' 
 Bank of Georgia, and the State Bank of South Carohna. Al- 
 
 ' Kyd on Corp. 32; Bank of U. S. ^ gank of U. S. v. Planters' Bank, 
 
 V. Planters' Bank of Ga., 9 Wheat. 9 Wheat. 907 ; Louisville, etc., R. R. 
 
 907. Co. V. Letson, 2 How. (U. S.) 497; Penn- 
 
 * Ayliffe's Civ. L. 204; 1 Kyd on sylvania v. Wheeling Bridge Co., 13 id. 
 
 Corp. 32; 10 Co. R. 31 b.; Ogdens- 518. 
 
 burg, Rome & Clayton R. R. Co. v. * Curran v. Arkansas, 15 How. (U. 
 
 Frost, 21 Barb. (N. Y.) 541. An infant S.) 304; Seymour v. Turnpike Co., 10 
 
 stands in the same relation to a cor- Ohio, 476. 
 
 poration for a portion of whose stock ^ Central Bank of Georgia v. Little, 
 
 he has subscribed, as he does to a per- 11 Ga. 346; Bank of Tennessee v. 
 
 son with whom he has contracted. If Dibrell, 3 Sneed, 379. 
 
 upon becoming of age he disclaims the ^ Hildreth on Banks and Banking, 
 
 contract, and restores the thing with 59 et seq. 
 
 all its advantages, his liability is ter- ■" Hildreth on Banks and Banking, 
 
 minated, and he cannot be made liable 58; Ency. Am., vol. 1, p. 548; Bank 
 
 for calls. Birkenhead, etc.. Railway of U. S. v. Planters' Bank of Georgia, 
 
 Co. V. Brownrigg, 4 Exch. 426; London 9 Wheat. 907. 
 & North Western Railway Co. v. Mc- 
 Michael, 5 id. 855.
 
 80 Private Corporations. 
 
 tlioiigli tlicsc banks were chartered by tlic states of Georgia and 
 South Carolina, respectively, the states creating them became 
 membei's thereof.' 
 
 Several corporations may form a component part of one corpora- 
 tion,* and if authorized to do so hy the legislature, a municipal 
 coi*poration may become a stockholder in a private corporation ' 
 but not otherwise,* and in all cases, where the statute prescribes 
 the manner in which the subscrij^tion shall be made, or the doing 
 of certain things as a prerequisite to its validity, the statute must 
 be substantially complied with, or the subscri]3tion will be void.* 
 And the mayor or aldermen and commonalty may constitute a 
 corporation ; but in such a case " neither of them has any corpo- 
 rate capacity distinct from the other two, and, therefore, the 
 mayor cannot in his political character of mayor take in succession 
 any thing as a sole corporation ; nor can the aldermen as a select 
 body take any thing to them and their successors as an aggregate 
 corporation." * There are various corporations in England, espe- 
 cially political or municipal, that are constituted of integral parts, 
 ■without which parts the corjjoration would not be complete ; nor 
 has any of the integral parts power to act without the others.'' 
 Such is the mayor, aldermen and commonalty ; they constitute 
 three distinct parts.* 
 
 Under the former railroad system of England, the corporate or- 
 gans of railroad corporations were three-fold, viz. : The general 
 assembly of the company, the board of directors, and a duly con- 
 stituted agent.* But in this country, especially private corpora- 
 tions for the pecuniary emolument of its members, are constituted 
 on the unitary principle, and usually in all matters relating to the 
 objects for which tlie corporation is instituted, the constating in- 
 struments confer on a limited number of directors the manage- 
 
 ' State Bank S. C. v. Gibbs, 3 '•Thomson v. Lee County, ante; 
 
 McCord (S. C), 377; State Bank of Comm. v. Pittsburgh, 41 Penn. St. 278 ; 
 
 N. C. V. Clark et al., 1 Hawks (N. Mississippi, etc., R. R. Co. v. Camden, 
 
 C), 36. 23 Ark. 3U0. 
 
 2 1 Kyd on Corp. 36. « Bullock v. Curry, 2 Mete. (Ky.) 
 
 3 Thomson v. Lee County, 3 Wall. 171. 
 
 327 ; Cass v. Dillon, 21 Ohio St. 607 ; « 1 Kyd on Corp. 36. 
 
 Prettyman v. Supervisors, 19 111. 40(5 ; ''Id. 
 
 State V. Common Council of Madison, ^lA. 
 
 7 Wis. 688; Slack v. Maysville, etc., ^Wolf on Railways, 70; see ante, 
 
 R. R. Co., 13 B. Monr. 9. chap. 2.
 
 Members — Stockholders and Stock. 81 
 
 ment of its affairs. In the absence of snch an arrangement the 
 members of it constitute the corporate body, and there are usually 
 at least no separate or constituent parts. Membei'ship is usually 
 provided for by the general law under which it is instituted or by the 
 articles or certificate of association, signed and filed for record by 
 the original corporators in some public oflice or ofiices designated 
 by the general law imder which it is organized and constituted. 
 
 Sec. 53. Admission and election of members and officers. — The rules 
 and doctrines of the common law in relation to the admission and 
 election of members and officers in corporations of a religious or 
 literary character has generally no application in this country to 
 corporations instituted under general statutes for pecuniary profit. 
 The number of the members under the former class is fre- 
 quently limited by the charter, and Avhen a vacancy occurs 
 provision is usually made for filling it by an election of some 
 person by the remaining corporators. But, in ordinary private 
 statutory corporations, the joint stock, or capital, is divided into 
 equal shares, and membership consists of the ownership of shares, 
 either by original subscription and ownership, or by subsequent 
 purchase of shares of the same.^ 
 
 Sec. 54. Disfranchisement or expulsion of members. — The right tO 
 deprive a meuiber of a corporation of his rights as such by ex- 
 pulsion depends upon the nature and character of the corporation, 
 the provisions of the charter or act, and sometimes on the pro- 
 visions of the by-laws. This right has no general application to 
 ordinary statutory corporations with property interests in the 
 stockholders created for pecuniary gain, with a joint stock, or 
 capital divided into shares. In such a case, as we have noticed, 
 ownership of shares constitutes membership ; and the stockholders 
 are secured all the rights of membership so long as they continue 
 to own shares of stock. They may become such by purchase, and 
 cease to be such when they transfer their stock certificates. The 
 character or conduct of a stockholder cannot be made the lee^al 
 ground of removal, nor can the company divest him of his in- 
 
 ' Gilbert v. Manchester Iron Co., 11 N. J. L. 66; Green's Brice's Ultra 
 Wend. 637 ; Sargent v. Franklin Ins. Vires, 45-47. 
 Co., 8 Pick. 90 ; Downing v. Potts, 33 
 
 Jl
 
 82 Private Corporations. 
 
 terest without his assent.' But such power can, uncloubtedl}', be 
 expressly cout'erred bj the special act or by general acts of incor- 
 poration, or by virtue of the paramount authority of the legisla- 
 ture ; and is, in fact, thus conferred, or by the articles of associa- 
 tion, whenever the company or its directors, who represent it, are 
 authorized to forfeit stock for the non-payment of dues ; ^ in which 
 case the rights of the owner cease on the forfeiture being legally 
 declared. But in corporations of this class the power of expelling 
 a stockholder only exists by virtue of the statute, and only for 
 the causes named therein, and the decision of the officers of the 
 corporation as to whether such cause actually existed is by no 
 means final, unless expressly so provided by the statute. It 
 would be a singular condition if a person who has become a stock- 
 holder in a moneyed corporation, by taking and paying for a cer- 
 tain number of shares of its stock, could be expelled therefrom 
 and deprived of his property without 'compensation, unless the 
 charter or laws under which the corporation was founded con- 
 tained such a provision, so that he could be said to be charged 
 with notice of suL;h authority, and the causes for which the au- 
 thority might be exercised. 
 
 The power to remove, however, otherwise than above stated, is 
 seldom conferred by law, either upon the corporation or the board 
 of directors of a joint-stock corporation, constituted purely for 
 pecuniary profit. 
 
 Sec. 55. Quasi corporations ; right of expulsion therefrom. — There is 
 a class of q^msi'privsite corporations instituted for private purposes, 
 
 1 2 Kent's Com. 298 ; Green's Brice's ter. And if an owner of stock could 
 
 Ultra Vires, 45-47. be excluded, without any provision in 
 
 '■^ Evans v. Philadelphia Club, 50 the charter, from participating in the 
 Penn. St. 107; Society v. Common- election of officers, and in the other 
 wealth, 52 id. 125 ; Leech v. Harris, 2 aifairs of the company, he would still 
 Brewst. 571. See, also, Waterbury v. be entitled to the amount of his stock. 
 Express Co., 3 Abb. Pr. (N. S.) 163 ; and could recover it in an action 
 State V. Justinian Soc, 15 La. Ann. 73. against the corporation. Evans v. 
 "With regard to whatare called joint- Phil. Club, 50 Penn. St. 107; Society 
 stock incorporated companies, or, in- v. Commonwealth, 52 id. 125 ; Hop- 
 deed, any corporation owning property, kins v. Exter, L. R., 5 Eq. Cas. 63; 
 it cannot be pretended that a member Roehler v. Mechanics' Aid Roc. , 32 
 Can be expelled, and thus deprived of Mich. 86 ; Davis v. Bank of Eng., 2 
 his interest in the stock or general Bing. 393 ; State v. Tudor, 5 Day 
 fund in any case by a majority of the (Conn.), 329 ; Delacy v. Neuse Riv. 
 corporators, unless such power has Nav. Co., IHawks (N. C), 274 ;Ebaugh 
 been expressly conferred by the char- v. Hendel, 5 Watts, 48.
 
 Members — Stockholders and Stock, 83 
 
 thotigli not for direct pecuniary profits, where tlie aim and object 
 of the corporators and the provisions of the charter or by-laws may 
 .warrant and authorize the expulsion of members. And where a 
 charter of a society directed the mode of proceeding against a mem- 
 ber charged with an offense indicated by it, and authorized the so- 
 ciety to expel a member guilty of it, it was held that such a person 
 might be lawfully expelled, and that, if the proceedings were regu- 
 lar, the action of the corporation in this respect could not be in- 
 quired into collaterally in a proceeding by mandamus, or in any 
 other manner in the courts.^ But a member of a corporation is 
 entitled to notice of an intention to expel him, and to an oppor- 
 tunity to hear the evidence against him, and to be heard to dis- 
 prove the charges upon which it is sought to deprive him of 
 membership,* and the right of expulsion should be clear and un- 
 questionable, and the law will not tolerate sharp and summary 
 removals when the rights of a party are involved and he had 
 had no reasonable op])ortunity to be heard/ And where a by- 
 law of a chamber of commerce provided for the expulsion of 
 members for the violation of it, it was held to be reasonable and 
 valid and enforceable, even though the contract made in violation 
 of its provisions was void by the statute of frauds, and although 
 it was not made during the session of change of the chamber of 
 commerce.* And where the charter stated that the corporation 
 
 ' Leech v. Harris, 2 Brewst. (Penn.) any contract, eitlier verbal or written, 
 
 571. or of making false or fictitious reports 
 
 '^ Delacy v. Neuse River Navigation of sales or purchases, or of any other 
 
 Co., 1 Hawks (N. C), 274 ; Southern act contrary to the spirit which should 
 
 Plaukroad Co. v. Hixon, 5 Ind. 165 ; govern all commercial transactions, 
 
 People v. St. Fransiscus' Benevolent they shall report the same to the as- 
 
 Soc, 24How. Pr. 216; Bartlett v. Medi- sociation, either at a regular annual 
 
 cal Society, 32 N. Y. 187. meeting or at a meeting called for that 
 
 ^ Bartlett v. Medical Society, ante, purpose ; and the member shall be 
 
 ** Dickenson v. Chamber of Com- suspended or expelled, if so deter- 
 
 merce, 29 Wis. 4o. mined by a majority of the members 
 
 In this case the by-law under which present and voting, the number not 
 the proceedings were taken provided : being less than one hundred * * * 
 " It shall be the duty of the board No member shall be suspended or es- 
 of directors to examine charges of pelled without having an opportunity 
 misconduct in business matters, pre- of beins heard iu his own defense, 
 ferred against any member of the and any member having been expelled, 
 association, when made to the presi- shall be ineligible to membership un- 
 dent or secretary in writing, by a til the association see proper to remove 
 member of the association, and if his disability." 
 
 the party shall be found guilty of a The bill of the plaintiff was for an 
 violation of the rules, of failing to injunction, for the purpose of restrain- 
 promptly comply with the terms of ing the defendant from interfering
 
 84 
 
 Pix'IVATE OoRPORATiONS. 
 
 Wcas instituted, among otlier things, to inculcate jnst and equitable 
 principles in trade, it was held that a member might be expelled 
 for obtaining goods under false pretenses, though the offense was 
 not committed within the local jurisdiction of the corporation nor 
 against a member thereof. And where a member of such a 
 corporation performs an act in direct contravention of the purposes 
 for which it is instituted, it has been held that it possesses the 
 power to expel such member.^ Where the regulations of an 
 
 with his rights and privileges as a 
 member of the association, and from 
 suspending or expelling him from the 
 privileges thereof ; and it averred in 
 substance the intention of the de- 
 fendant so to do on the ground of the 
 phiiutiffs failure to keep and perform 
 two verbal contracts for the sale of 
 wheat ; that they were void by the 
 statute of frauds ; that the contracts 
 were not made during any session of 
 change of the chamber of commerce ; 
 that the contract did not in any way 
 relate to the aflairs or business of the 
 corporation ; that the contracts were 
 made after the hours of change, and 
 in the offices of the other parties to 
 the contract. The court below re- 
 fused, on motion, to dissolve the in- 
 junction. On appeal. Cole, J., ob- 
 served : "If it was one of the ob- 
 jects of the association ' to inculcate 
 just and equitable principles of, in 
 trade,' it is apparent would be better 
 attained by raising the standard of mo- 
 rality among its members, 'n requiring 
 them to perform all their business en- 
 
 gagements, whether legally binding 
 upon them or not. Consequently, we 
 can see no valid objection to the by- 
 law which provides that if a member 
 shall be found guilty of a failure to 
 comply promptly with the terms of 
 any contract, either verbal or written, 
 it should constitute a good ground for 
 the suspension or expulsion of such 
 member from the privileges and bene- 
 fits of the corporation. There is surely 
 nothing unreasonable or unjust, noth- 
 ing illegal or wrong, in such a by-law. 
 Nor do we think there is any ground 
 for saying that this by-law only had 
 reference to such contracts as were 
 made during a session of change of 
 the chamber of commerce, and made 
 upon the floor of the chamber of the 
 corporation. It applied to all his busi- 
 ness conduct and relations with the 
 members of the association at least. 
 And the plaintiff, after having volun- 
 tarily connected himself with the as- 
 sociation, is bound to observe the rules 
 and regulations adopted by it to secure 
 the objects of its creation." 
 
 ' People V. New York Loan Commer- 
 cial, 18 Abb. Pr. 271. See, also. People, 
 ex rel. Page, v. The Board of Trade of 
 Chicago, 45 111. 113. 
 
 In Dickinson v. Chamber of Com- 
 merce, supra, it was further held, that 
 a member might be expelled for the 
 following causes, and that the power 
 in this respect expressed in the char- 
 ter was inherent in the corporation : 
 
 1. Where an offense is committed 
 which has no immediate relation to a 
 member's corporate duty, but is of so 
 infamous a nature as to render him 
 unfit for the society of honest men, 
 and where no trial and conviction be- 
 fore a court is necessary, previous to 
 the act of expulsion by the corpora- 
 lion. 
 
 2. Where the offense is against his 
 duty, as corporator, he may be ex- 
 pelled on trial and conviction by the 
 corporation. 
 
 3. When the offense is of a mixed 
 nature against the member's duty as 
 a corporator, and also indictable by 
 the law of the land. 
 
 Where a medical society provided 
 in their by-laws for the expulsion of 
 members, it was held that it was not 
 vested with arbitrary power or uncon- 
 trolled discretion in the matter ; and 
 that the courts might investigate the 
 legality of the action of the corporate 
 body taken under it. 
 
 The State v. Georgia Med. Soc, 38 
 Ga. 608 (1869).
 
 Members — Stockholders ajstd Stock. 
 
 85 
 
 asylum for aged seamen forbid inmates thereof to leave the 
 premises without permission of certain officers, and enjoins quiet 
 demeanor at the table on pain of expulsion, it was held that such 
 regulations were reasonable, and that an expulsion for their breach 
 was lawful.' So it has been held that the guardians of tlie poor 
 may expel a memder who has been guilty of charging the corpora- 
 tion with money as having been paid by him for it, which he 
 never paid, but that lie cannot be expelled for a mere misemploy- 
 ment of public moneys." But it must be understood, as previously 
 stated, that this power of removal cannot be exercised except 
 where it is authorized by the charter or the general law under 
 which the corporation is organized, nor unless the member has 
 been guilty of some offense which affects the interests or good 
 order of the corporation, or which is indictable by law.^ Nor can 
 the power conferred be exercised arbitrarily or unfairly, or with- 
 out notice of the party sought to be removed, nor otherwise than 
 in the manner specified in the charter or by-law.* 
 
 'People V. Sailors' Snug Harbor, 
 5 Abb. Pr. (N. S.) 119. 
 
 "^ Comm. V. Guardians of the Poor, G 
 S. & R. 469. 
 
 ^ Comm. V. German Society, 15 Penn. 
 St. 251 ; Comm. v. St. Patrick's Benevo- 
 lent Society, 2 Biun. (Penn.) 441 ; 
 Evans v. Philadelphia Club, '50 Penn. 
 St. 107. 
 
 ■* Green v. African Methodist Society, 
 1 S. &R. 254 ; Comrn. v. German Society, 
 15 Penn. St. 251; Comm. v. Penn. 
 Beneficial Institution, 2 S. & R. 141 ; 
 Comm. V. Guardians of the Poor, (mte. 
 
 The charter of a private corporation 
 provided that if any member should 
 i)e found breaking the rules of the 
 society, he should be served with a no- 
 tice to attend, to answer at the next 
 stated meeting, after which a decision 
 should be made by ballot, and if two- 
 thirds considered him guilty, he 
 should be dealt with conformably to 
 the by-laws. The by-laws provided 
 that no member should be entitled to 
 receive any 'benefit from the society, 
 whose complaints are the result of in- 
 toxication, etc. A member was ex- 
 pelled, by the required majority, after 
 due notice, and brought an action to 
 recover the allowance granted to dis- 
 abled members. Held, that the regu- 
 
 larity of the proceedings to expel him 
 could not be investigated in such 
 action, and that the court had no juris- 
 diction, by action, to compel payment 
 of the allowance. Black and White 
 Smith Soc. v. Vandyke, 2 Whart. 809; 
 S. P., Commonwealth v. Pike Bene- 
 ficial Soc, 8 VV. & S. 247. 
 
 A member of an association cannot 
 be expelled on a report of a committee 
 of investigation. The return to the 
 mandamus must show that the relator 
 had notice to appear and defend him- 
 self ; that an assembly of the proper 
 persons was duly held ; the proceed- 
 ings before them ; a conviction of the 
 ofTense ; and an actual amotion by 
 them. Especially is this the case 
 where the charter of the society pro- 
 vides that the party charged shall have 
 the right to be heard in his defense, 
 be confronted with the witnesses 
 against him, and of producing evi- 
 dence in his favor. Commonwealth 
 V. German Soc, 15 Penn. St. 251. 
 
 Under the constitution and by-laws 
 of a beneficial society, each member 
 was entitled to receive, in case of sick- 
 ness, $o per week, and each member 
 was bound to contribute such monthly 
 dues as the society might declare, and 
 a member was entitled to twenty-four
 
 86 
 
 Pkivate Coepokations, 
 
 Tlie right of a corporation, not involving property rights, to 
 expel members for cause is conceded by a large line of cases, bnt the 
 offenses for which a member may be expelled must be specifically 
 defined either in the charter or by the by-laws of the company, 
 or mud he of such a character as violates some one of the express 
 or implied conditions of membership,^ and in all organizations of 
 this character there is an implied condition that the members will 
 not violate their duty to the corporation,'' consequently, it being 
 
 hours' notice before lie could be ex- 
 pelled. In an action by a member for 
 an illegal expulsion, — Held, that the 
 secretary of the society, being liable 
 for an assessment of the amount 
 that might be recovered in the suit, 
 was incompetent to testify on the 
 part of the society ; that where an 
 expulsion took place in the absence 
 of a member, without notice or the 
 waiver thereof, the party expelled 
 miglit recover damages to the extent 
 of the injury; and that the want of 
 notice rendered the expulsion invalid, 
 and neither the minutes of the pro- 
 ceedings of the society, nor oral testi- 
 mony of the statements of the secre- 
 tary to the society at the time of the 
 expulsion, was admissible in favor of 
 the society. Washington Beneficial 
 Soc. V. Bacher, 20 Penn. St. 425. 
 
 The Pennsylvania supreme court 
 will not approve a charter for the iu- 
 corporatiou of any association, where 
 the articles contain an indefinite state- 
 ment of the offenses that may result 
 in expulsion ; as that any member 
 may be expelled who commits a mis- 
 demeanor or any other act that may 
 prove injurious to his character or 
 standing. Butchers' Beneficial Assoc, 
 il8 Penn. St. 298 ; Beneficial Assoc. 
 of Brotherly Unity, id. 299. 
 
 Where the charter of a corporation 
 declared its purpose, among other 
 things, to be " to adjust controversies 
 between its members and to establish 
 just and equitable principles in the 
 cotton trade," and gave it power to 
 make all proper and needful by-laws, 
 
 not contrary to the constitution and 
 laws of the state of New York or of 
 the United States ; and " to admit new 
 members and expel any member in such 
 manner as may be provided by the by- 
 laws ;" and the by-laws provided for 
 expulsion for the improper conduct, 
 but did not state what should be con- 
 sidered as such, it was held that there 
 being in the charter or by-laws of the 
 corporati^in no express or implied au- 
 thority to determine who was the 
 owner of a right to a membership in 
 dispute, a member was not guilty of 
 improper conduct warranting his ex- 
 pulsion, for resorting to the courts to 
 prevent the corporation from dispos- 
 ing of such a right claimed by him. 
 
 That in refusing to submit to a re- 
 port against his title, a member was 
 not acting in antagonism to the corpo- 
 rate power of " adjusting controversies 
 between its members" or of "estab- 
 lishing just and equitable principles 
 in the cotton trade," and that his right 
 to appeal to another tribunal, if to be 
 foreclosed, should be so by explicit con- 
 tract or agreement (not shown in this 
 case), not by mere construction of 
 language employed in a by-law, or by 
 implication from something contained 
 in it ; for forfeitures depend upon clear 
 and explicit language, and are even 
 then looked upon with disfavor, and 
 the presumption should be against 
 the power to expel, except for the 
 causes recognized in the adjudged 
 cases. People v. N. "Y . Cotton Ex- 
 change, 8Hun(N. Y.), 216. 
 
 ' People v. Medical Society of Erie, 
 32 N. Y. 194; The King v. Mayor of 
 Liverpool, 2 Burr. 732; People v. 
 New York Board of Underwriters, 7 
 Hun (N. Y.), 248 ; Dubree v. Reliance 
 Engine Co., 1 W. N. C. (Penn.) 524; 
 
 Comm. V. German Societv, 15 Penn. 
 St. 251. 
 
 ^ Rex V. Liverpool, ante; Comm. 
 v. St. Patrick's Society, 2 Biun. 
 (Penn.) 448.
 
 Members — Stockiioldees and Stock. 
 
 87 
 
 tlie duty of a ineniber to comply with a lawful by-law of the 
 corporation, it follows that its violation by him constitutes a suf- 
 cient ground of expulsion.' But the courts retain a revisory 
 power over the action of corporations in this respect, and, unless 
 its action is legal, will compel the restoration of an exj^elled 
 member by mandamus^ and, where tlie question as to whether 
 
 ' In People v. N. Y. Board of [In- 
 derwriters, ante, the relator, as presi- 
 deut of the Relief Fire Insurance 
 Company, was an incorporator in the 
 defendant corporation, incorporated 
 by the laws of New York. Its pur- 
 poses were declared to be " to incul- 
 cate just and equitable principles in 
 the business of insurance ; to estab- 
 lish and maintain uniformity among 
 its members in policies or contracts of 
 insurance, and acquire, preserve and 
 disseminate valuable information rela- 
 tive to the business in which they are 
 engaged." And power was conferred 
 upon it "to make all needful by-laws 
 not contrary to the provisions of the 
 act, or the constitution and laws of 
 this state or of the United States." A 
 by-law was adopted providing that 
 the board might establish or alter 
 rates of premiums for insurance by a 
 majority of its members at any regu- 
 lar meeting, or one especially called 
 for that purpose, and that such rates 
 should be binding on all the members. 
 The Relief Fire Insurance Company 
 subscribed the charter and by-laws, 
 and agreed to be governed by and to 
 maintain all the rates, rules and regu- 
 lations adopted by the board. The 
 board adopted and prescribed rates 
 which should be charged and received 
 by its members as premiums for in- 
 surance upon property. And the re- 
 lators afterward violated those rates 
 by insuring two steamers for smaller 
 amounts than those which had been 
 established by the board. For that, 
 after an investigation of the charge, 
 the Relief Fire Insurance Company 
 was expelled from its membership in 
 the board. The defendant owned no 
 other property than that allowed to be 
 acquired for the purposes of Its incor- 
 poration ; and that amounted to the 
 sum of about $50,000. It issued no 
 stock, but was empowered to assess 
 upon the organizations and agencies 
 of svhich its membership consisted. 
 
 not to exceed two per centum of the 
 aggregate premiums returned by them 
 as received, such sums as should be 
 necessary to defray its expenses, and 
 to sustain a fire patrol, if that should 
 be provided. It was also permitted 
 to take and hold real and personal 
 property to an amount not exceeding 
 $100,000, for the purposes of the cor- 
 poration ; and they were regulating 
 and managing the business of insur- 
 ance carried on by such organizations 
 and agencies. The members owned 
 none of the property acquired, and no 
 earnings were to be made in which 
 they could in any form participate. 
 But the assessments collected were 
 designed to pay the expenses to which 
 the corporation should be subjected 
 in the management of its atfairs, and 
 the acquisition of real estate and per- 
 sonal property required for that pur- 
 pose. The court held that, under this 
 state of facts, no property interests 
 were involved, and the corporation, 
 being in no sense a trading corpora- 
 tion, it clearly had the power to expel 
 a member for the violation of the by- 
 law named. The inquiry in such 
 cases is whether the by-law is wit_Jiin 
 the scope of the corporate powers of 
 the company. People v. N. Y. Com- 
 mercial Assoc, 18 Abb. Pr. (N. Y.) 
 271. It has been held a sufficient 
 cause for the disfranchisement of a 
 member of a beneficial society, that 
 he feigned sickness, or drew relief af- 
 ter his recovery from actual sickness. 
 Society for the Visitation of the Sick 
 V. Comm., 53 Penn. St. 125. But a 
 member of a social club who has paid 
 a large sum for admission cannot be 
 expelled merely for disorderly conduct 
 which does not affect the interests of 
 the corporation. Evans v. Philadel- 
 phia Club, 50 Penn. St. 107. Nor be- 
 cause he refuses to resign. Id. 
 
 ^ State V. Georgia Medical College, 
 38 Ga. 608.
 
 88 PltlVATE COKPOKATIONS. 
 
 a member has violated a by-law is one of construction merel}^ 
 the society will not be permitted to exercise an uncontrollable 
 discretion in the construction and enforcement of such by-law, 
 and, imless its construction thereof is legal, its action will be 
 neutralized by the courts.' Thus, where the constitution of an 
 incorporated society made " slander against the society " by a 
 member, an offense for which he may be fined or expelled, it was 
 held that in order to constitute a breach thereof an offense analo- 
 gous to slander at the common law must be established, and that 
 an expulsion for an offense short of that was without authority,^ 
 The power of amotion, whether relating to the disfranchisement 
 of a member, or the removal of an officer of a corporation, is judi- 
 cial in in its charactei', and, when exercised by the corporation, 
 the member must be given a reasonable opportunity to meet the 
 charges against him, and the matter must be fairly and judicially 
 decided, and if it appears that in fact the charges were not suffi- 
 cient or were not sustained, or that the action of the corporation 
 was unfair, the courts will restore the member to all his rights/ 
 A member cannot be expelled arbitrarily, without charges being 
 preferred against him and without notice and an opportunity to 
 be heard in answer thereto,* and the records of the corporation 
 should show that all the requisite steps were taken for, and 
 the grounds of a legal expulsion,^ and if it appears that he 
 was expelled by default, no witnesses being heard in support of 
 the charges,* or that he was expelled for the violation of an ille- 
 gal by-law,' or without complying with the requirements of the 
 charter or by-laws in reference to the filing of charges and the 
 hearing thereon, the expulsion will be set aside by the courts.* 
 
 ' State V. Georgia Med. Col., ante. (N. T.), 361 ; People v. Young Men's, 
 
 ''People V. Mechanics' Aid Society, etc., Soc, 65 Barb. 357. 
 
 23 Mich. 86. 'People v. St. Franciscus Benevo- 
 
 3 State V. Adams, 44 Mo. 570; Rid- lent Soc, 24 How. Pr. 216. 
 
 dell V. Harmony Fire Ins. Co., 8 ®Comm. v. German Soc, 15 Penn. 
 
 Phila. 310. St, 251. In People v. American In- 
 
 '' People V. St. Franciscus Benevo- stitute, 44 How. Pr. 468, a corporation 
 
 lent Soc, 24 How. Pr. 316 ; People v. having adopted Cushing's Manual as 
 
 Benevolent Soc, 3 Hun (N. Y.), 361 ; its rules of order, where a member 
 
 Comm. V. German Society, ante ; Kid- was expelled for improper language 
 
 dell V. Harmony Fire Ins. Co., ante ; used at a meeting of the society, the 
 
 Washington, etc., Soc. v, Bacher, 20 court restored him on the ground that 
 
 Penn. St. 435. the words were not reduced to writing 
 
 ^ People V. Mechanics' Aid Society, and acted upon at the meeting at 
 
 33 Mich. 86. which they were spoken. 
 
 * People V. Benevolent Soc, 3 Hun
 
 Members — Stockholders and Stock. 
 
 89 
 
 But, in Pennsylvania, a member of such a corporation cannot 
 be expelled for the non-payment of dues without notice to him 
 and a vote of the society.^ And even where the right to expel for 
 just cause exists, it cannot be exercised in an arbitrary and sum- 
 mai-y manner, but the party charged, with the violation of duty 
 nnder the charter or by-laws of the association sliould have an 
 opportunity to be heard in answer to the charges.^ 
 
 When a member of a corporation is wrongfully expelled there- 
 from or illegally expelled, lie may be restored to membership by 
 mandamus^ and even though a member has been technically guilty 
 of a breach of the by-laws or regulations of the corporation, yet 
 if the breach is trivial, and not ^vithin the spirit thereof, his 
 restoration to membership will be ordered. Thus, where a mem- 
 ber was expelled for defrauding the company out of fifty cents, 
 it was held not a sufficient cause of disfranchisement and his 
 restoration to membership was ordered.* 
 
 ' Comm. V. Penn. Ben. Inst., 2 S. & 
 R. (Penn.) 141 ; Comm. v. German So- 
 ciety, 15 Penn. St. 251; Diligent Fire 
 Ins. Co. V. Commonwealth, 75 id. 
 291. 
 
 '^ Southern Plankroad Co. v. Hixon, 
 5 Ind. 105 ; People v. St. Frauciscus' 
 Benevolent Soc, 24 How. Pr. 216 ; 
 Delacy v. Neuse River Nav. Co., 1 
 Hawks (N. C), 274 ; Bartlett v. Med. 
 Soc, 82 N. Y. 187 ; People v. Sailors' 
 Snug Harbor, 5 Abb. Pr. (X. S.) 119. 
 And when the articles of a corporation 
 authorized expulsion for scandalous 
 and improper proceedings wbich 
 might injure the reputation of the so- 
 ciety, a member may be expelled for 
 altering the amount of a physician's 
 bill from $4 to $40 ; and for present- 
 ing the bill to the president as the 
 basis of a claim. Commonwealth v. 
 Philanthropic Soc, 5 Binn. 486. See, 
 also, Black & White Smith's Soc. v. 
 Van Dyke, 2 Whart. 309; Common- 
 wealth V. Pike Beneficial Soc, 8 W. 
 •Sc S. 247 ; Commonwealth v. German 
 Soc, 15 Fenn. St. 251 ; Washington 
 Beneficial Soc v. Bacher, 20 id. 425 ; 
 Butchers' Beneficial Assoc. , 88 id. 298 ; 
 Society for Visitation of the Sick v. 
 Commonwealth, o2 id. 125. 
 
 ^ Comm. V. German Soc, 15 Penn„ St. 
 251 ; People v. Medical Society of 
 Erie, 24 Barb. 570; People v. St. 
 
 12 
 
 Franciscus' Benevolent Soc, 24 How. 
 Pr. 216 ; Sibley v. Carteret Club of 
 Elizabeth, 40 N. J. L. 295 ; Sturges v. 
 Board of Trade, 86 111. 441. And a 
 court of equity has no power to sus- 
 pend an officer of a corporation. The 
 power of amotion belongs to the cor- 
 poration within the scope of its legal 
 posver. Griffin v. St. Louis Vine, etc., 
 Assoc, 4 Mo. App. 495. But courts 
 will not generally interfere to control 
 the manner of enforcing the by-laws 
 of a purely voluntary association, 
 which is not organized for the pur- 
 poses of business, but for the purpose 
 of inculcating certain principles 
 among its members. People v. Board 
 of Trade, SO 111. 134. 
 
 *Comm. V. German Society, ante. A 
 private corporation or club, owning 
 property and at liberty to accumulate 
 more, expelled one of its members for 
 quarreling with and striking another 
 member within the walls of the club- 
 house. Held, that the club had no 
 authority for such expulsion, in the 
 absence of any provision therefor in 
 the charter, notwithstanding that it 
 was provided for by a by-law ; and a 
 mandamus was awarded for the res- 
 toration of such member. Evans v. 
 Philadelphia Club, 50 Penn. St. 107. 
 
 The foregoing decision was affirmed 
 by the court by operation at law, the
 
 90 Pjbivate Corporations. 
 
 Sec. 5G. Membership under general statutes.— Where a Corpora- 
 tion is instituted, under general statutes, tliey and the articles 
 authorized by them furnish the measure and limitations of the 
 general powers and privileges of the corporators and they gener- 
 ally provide as to membership and the riglits and privileges of 
 members. These instruments become the supreme law of the 
 corporation, limited and controlled only by the constitution of 
 the state creating it, or the constitution of the federal government. 
 
 What constitutes membership usually depends upon the nature 
 of the corporation, the ])rovisions of the general law, the articles 
 or certiiicate of original association, or the rules or by- laws adopted 
 by the corporators, not inconsistent witli the general or funda- 
 mental law. The parties subscribing articles of association may 
 adopt by-laws, providing for and regulating membership ; and if 
 such authority is not expressly given, it would be among the im- 
 plied and inherent powers of a corporation. The statutes or 
 regulations of private corporations, for pecuniary gain, usually 
 provide for tlie amount of the capital stock of the corporation, 
 and for its division into equal shares of a certain amount, and 
 that stockholders are members and entitled to a voice or vote in 
 the management of the corporate affairs.^ 
 
 judges being equally divided in opin- the secretary, which was the ground 
 ion. lb. of his disfranchisement, was not be- 
 On an application for arule to show fore the court, the rule asked for was 
 cause wliy a writ of ma/idami'7S should made absolute; that, in order to en- 
 not issue to a literary corporation, able the corporation to set out, in its 
 commanding it to restore a.i expelled return to the writ, sisecifically the 
 member to tiie rights of membership, grounds of its action, the writ was 
 where it appeared that the proceed- ordered to issue in the alternative, 
 ings of the corporation, which first either to restore the applicant to his 
 suspended the member from debate, rights of mpuiberahip, or to show good 
 and afterward wholly disfranchised cause to the contrary. Sleeper v. 
 him, were irregular; and where a cer- Franklin Lyceum, 7 R. I. 523. 
 tain letter written by the applicant to 
 
 ' " In all bridge, railroad and turn- scription, purchase or transfer, is a 
 
 pike companies, in all bank, insurance member thereof, and is entitled to all 
 
 and manufacturing companies, and, the rights and privileges of a member, 
 
 generally, in corporations having a Gilbert v. Manchester Iron Co., 11 
 
 capital stock and looking to profits. Wend. 637. Nor is it necessary that he 
 
 membersliip is constituted by a trans- should have a certificate of l.us shares, 
 
 fer of shares according to the by-laws, if he is an original subscriber to the 
 
 without any election on the part of stock. Agricultural Bank v. Burr, 24 
 
 the corporation itself." Opinion of Me. 256 ; Chester Glass Co. v. Dewey. 
 
 Shaw, Ch. J., in Boston Overseers, 16 Mass. 94. See Easton Plankroad Co. 
 
 etc., V. Sears, 22 Pick. 132. Any v. Vaughan, 14 N. Y. 546 ; Chase v. 
 
 person who owns stock in a corpora- Sycamore & C. R. R. Co., 88 111. 215 . 
 tion, whether he acquired it by sub-
 
 Members — Stockholders and Stock. 91 
 
 Sec. 56 «. Certificates of stock — nature of, etc.— Certificates of 
 stock are not strictly couunonnal paper, but they approxitnato to 
 it as nearly as is practicable,' and are transferable by assignment 
 unless the charter or the by-laws, made in pursuance of a power 
 conferred therein, provides a])articular mudeof transfer, in which 
 case such mode must be pursued. But, if the certificate itself 
 contains a statement as to how a transfer may be made, such 
 statement is binding upon the company and constitutes the regu- 
 lation on the subject,'' and the company will not be permitted to 
 assert a claim in violation of its own regulations, especially when 
 the violation is a matter essential to the protection of the party 
 against whom the claim is asserted.' If the charter confers the 
 power upon the directors to make by-laws, they may also waive 
 compliance therewith. If stock has been transferred in the mode 
 provided by the charter or by-laws to a person having no notice 
 of any claim thereon by the company, it cannot refuse to enter 
 the ti"ansfer upon its transfer-books upon the ground that it has 
 a lien thereon, unless such lien is given by the charter." A lien 
 may be given by a by-law,^ but, except where the purchaser has 
 notice of the lien before his purchase of the stock, or the certifi- 
 cate on its face contains something which should put him upon 
 inquiry aS to the existence of a lien thereon, he will not be preju- 
 diced by such lien.' A mere assignment of stock, accompanied 
 by delivery of the certificate to the purchaser, is valid between 
 the parties, and also against attaching creditors of the assignor 
 with notice, although no transfer has been made upon the books 
 
 'Lanier v. Bank, 11 Wall. 3G9. ing Co., 53 Cal. 428 ; Fraser ,v. Char- 
 
 They are likened to bills of lading and leston, 11 S. C. 48G. 
 
 other quad negotiable securities. Ross '^ Bank of Holly Springs v. Pinson, 
 
 V. S. W. R. R. Co., 53 Ga. 514 ; Black 58 Miss. 421 ; 38 Am. Re^i. 330 ; Van- 
 
 V. Zacliarie, 3 How. (U. S.) 483 ; N. Y. sands v. Middlesex Co. Bank, 25 Conn. 
 
 & N. H. R. R. Co. V. Schuyler, 34 N. 144. 
 
 Y. 30; Duke v. Cahawba Navigation ^ Bank of Holly Springs v. Pinson, 
 
 Co., 10 Ala. 82; Ijanier v. Bank, 11 ante. 
 
 Wall. 3G9; Broadway Bank v. McEl- ^ Union Bank v. Laird, 2 Wheat, 
 
 rath, 13 N.J. Eq. 24; Pratt v. Tilt, 390; Steamship Dock Co. v. Heron, 
 
 12 C. E. Greene, 393; Finney's Ap- 52 Penn. St. 280. 
 
 peal, 59 Penn. St. 598; Smith V. Cres- « Child v. Hudson Bay Co., 2 P. 
 
 cent City Co., 30 La. Ann. 1378; Co- Wms. 12. 
 
 nant V. Seneca Co. Bank, 1 Ohio St. *But see SteainshiD Dock Co. v. 
 
 298 ; McNeil v. Tenth Nat. Bank, 4G Heron, 52 Penn. St. 280. 
 N. Y. 325 ; Winter v. Belmont Min-
 
 92 Pkivate Corporations. 
 
 as required by the cliarter or bj-law.s, ' and the same rule prevails 
 as to an assignee in bankruptcj. Thus, the owner of a national 
 bank stock delivered his certificate with a power of attorney to 
 transfer the stock as collateral security for his note. The by- 
 laws of the bank provided that stock was assignable only on its 
 books subject to the national banking act, and that a transfer-book 
 should be kept and that the old certificates should be surrendered 
 and new ones issued. The owner of the stock afterward went 
 into bankruptcy. On notice to him and the assignee, the payee 
 sold the stock, and the l)ank refusing the demand of the 
 assignee for a transfer, transferred it to the purchasers. Tlie 
 court held that the bank was not liable to the assignee for aeon- 
 version.'^ The certificate is merely evidence of the holder's in- 
 terest in the corporation, his actual interest therein is represented 
 by his " shares of stock " and the certificate is only evidence of 
 sncb interest and is by no means conclusive, because the shares 
 may have been levied upon and sold upon execution, so, that the 
 certificate represents no value whatever, or the corporation by 
 virtue of its charter may have a lien thereon for its full value, so 
 that the real evidence of a party's property interest in the stock 
 of a corporation is the stock-book of the company. For this rea- 
 son it is held that an action for conversion, as enlarged by codes, 
 lies for the conversion of the " shares of stock," rather than for 
 
 1 Snrgent v. Essex Marine Ry., 9 Deaue v. Hall, 3 Russ. 1, wliicli is 
 
 Pick. 202 ; Bullard v. Bauk, 18 Wall, followed in Foster v. Cackerell 3 CI. 
 
 589. It seems that in some of the & F. 456, it is held that of two inno- 
 
 states an equitable assignment of cent purchasers, he shall be preferred 
 
 stock is good as against the attaching who first gave notice to the trustee or 
 
 creditors of the assignor. Especially holder of the legal title. But as it 
 
 is this the rule in Massachusetts, cannot be presumed that the law, 
 
 Boston Music Hall Assoc, v. Cory, 129 statutory or common, intends that one 
 
 Mass. 435 ; Dickinson v. Central Nat. man's property shall be taken to pay 
 
 Bank, id. 279 ; Kingman v. Perkins, another man's debts, unless so ex- 
 
 105 id. Ill ; Tiiayer v. Daniels, 113 id. plicitly stated, it is held that the right 
 
 129. and in Westoby v. Day, 2 E. & B. extends to the equitable, as well as 
 
 605. It is said to have been the rule the legal right. Scott v. Lord Hast- 
 
 ever since the time of Richard I, that ings, 4 K. & J. 633 ; Robinson v. Nes- 
 
 an equitable assignment of a chose in bitt, L. R., 3 C. P. 264 ; Gill v. Conti- 
 
 action should prevail against an at- nental Gas Co., L. R., 7 Excli. 332; 
 
 tachment. In Vermont, Rice v. Cour- Dunster v. Lord Glengall, 3 Ir. Ch. 47 ; 
 
 tis, 32 Vt. 464 ; Illinois, People's Bank Bickering v. Ilfracombe Ry. Co., L. R., 
 
 V. Gridley, 91 111 457; and Connecticut, 3 C. P. 235 ; Eyre v. McDonald, 9 H. 
 
 Colt V. Ives, 31 Conn. 25; and in L 619; Beavan v. Earl of Oxford, 6 
 
 Pennsylvania this rule also prevails, D. G. M. & G. 524 ; Cornick v. Rich- 
 
 unless the corporation has notice of ards, 3 Lea (Tenn.), 1. 
 the assignment. Littell v. Scranton '■'Dickinson v. Central Nat. Bank, 
 
 Gas, etc., Co., 2 Luz. L. Obs. 82. In 129 Mass. 279 ; 37 Am. Rep. 351.
 
 Members — Stockholders and Stock. 93 
 
 the certificates of stock/ but the action of trover, as it exists at 
 common law, will lie for a conversion of the certificates of stock 
 and the rule of damages is the market value of the stock, such 
 certificates being treated as goods, wares and merchandise." 
 
 In Pennsylvania it is held that trover will not lie for " shares 
 of stock." Sharswood, J., says "A share of stock is an incor 
 poreal, intangible thing. It is a right to a certain proportion of 
 the capital stock of a corporation, never realized except upon the 
 dissolution and winding up of the corporation, with the right to 
 receive, in the meantime, such profits as may be made aud de- 
 clared in the shape of dividends. Trover can no more be main- 
 tained for a share of the capital stock of a corporation, than it can 
 for the interest of a partner in a commercial firin." ' In com- 
 menting upon this decision, McKee, J., in a California case,* 
 says : 
 
 " Upon the idea that shares of stock cannot be taken away or 
 wrongfully detained from the owner or that they cannot be lost 
 by the owner or found by a stranger, there is ,110 doubt of the 
 soundness of that decision. But the fiction on which the action 
 of trover was founded, namely, that a defendant had found the 
 property of another, which was lost, has become, in the progress 
 of law, an unmeaning thing, which has been by most courts dis- 
 carded ; so that the action no longer exists as it did at common 
 law, but has been developed into a remedy for the conversion of 
 every species of personal property. It lies for bank notes sealed 
 in a letter; * for negotiable instruments ; * for a judgment ; ' for 
 a promissory note which has been paid ; * for copies of a creditor's 
 account ; ^ for a writ of execution issued on a judgment,'" and for 
 certificates of shares of stock." 
 
 " At the same time that the action has been thus expended, the 
 
 iPavne v. Elliott, 54 Cal. 339; 35 ^j^oody v. Keener, 7 Port. (Ala.) 
 
 Am. Rep. 80 ; Ruhn v. McAllister, 1 218. 
 
 Utah, 375 ; Boylan v. Hagnel, 8 Nev. ^ Comparet v. Burr, 5 Blackf. 419. 
 353. •'Hudspeth v. Wilson, 3 Dev. (N. 
 
 ■2 North V. Forest, 15 Conn. 400; C.)373. 
 Tisdale v. Harris, 20 Pick. 9; Free- « Pierce v. Gibson, 9 Vt. 216. 
 man v. Harvvood, 49 Me. 195; Marv- ^ Fullam v. Cummingrs, 16 Vt. 697. 
 land Ins. Co. v. Dalrymple, 25 Md. '"Keelerv. Fassett, 21 Vt. 539. 
 243; Boardman v. Cutter, 138 Mass. " Anderson v. Nicholas, 28 N. Y. 
 
 388: Somerby v. Buntin, 118 id. 279. 600 ; Atkins v. Gamble, 43 Cal. 98 ; 
 
 sNeiler v. Kelly, 69 Penn. St. 407. Von Schmidt v. Bourn, 50 id. 616, 
 
 4 Payne v. Elliott, 54 Cal. 339 ; 35 
 Am. Rep. 80.
 
 94 Private Corporations. 
 
 words ' things in action ' have undergone such a development from 
 their original meaning, tliat they now represent things to the 
 imagination in the light of tangible objects ; and as such, they are 
 tlie subject of contract, sale, gift, mortgage, bailment, and pledge ; 
 and under the provisions of our codes they are personal property, 
 subject to taxation, attachment, execution, levy and sale.' 
 
 " It is, therefore, the ' sliares of stock' which constitute the 
 property which belongs tothesliarcholder. Otherwise, the prop- 
 erty would be in the certificate ; but the certificate is only evi- 
 dence of the property ; and it is not the only evidence, for a 
 transfer on the books of the corporation, without the issuance of 
 a certificate, vests title in the shareholder ; the certificate is, 
 therefore, but additional evidence of title, and if trover is main- 
 tainable for the certificate, there is no valid reason why it is not 
 also maintainable for the thing itself which the certificate repre- 
 sents." 
 
 Sec. 57. Management by directors. — The rights and privileges of 
 members are ge*nerally left to be provided for by the by-laws 
 which may be adopted by the corporators. By virtue, also, of 
 such statutes, articles or by-laws, the management of the business 
 of the corporation may be vested in a limited number of the 
 members, or in a board of directors, who are ajjpointed by the 
 members at some general meeting called for that purpose. By 
 such means, the authority to manage the affairs of the corpora- 
 tion which, on general principles, Avould rest in the members, is 
 conferred upon a board of directors thus appointed, whose action, 
 however, is by virtue of the election or appointment authorized 
 by the corporators, and is the action of the corporation, binding 
 the same in every respect as though it were done by all its mem- 
 bers, lawfully assembled and acting for the corporate body. 
 Whether the business is managed by the corporators directly, or 
 indirectly, by a board of managers or directors, tlie management 
 is considered to be in accordance with the will of the majority of 
 the members or stockholders ; and that will must be expressed in 
 either case by a majority of either, at a lawful meeting, unless it 
 is otherwise provided in the law constituting it, or by by-laws 
 lawfully adopted. 
 
 1 §§ 543, 688, Code Civ. Proc.
 
 Members — Stockitot.deks and Stock. 95 
 
 As it is usually quite irapracticiible for the members of a cor- 
 poration to meet and express its will by a majority of its members 
 or stockholders, the convenience, if not the necessity, of having a 
 small body of such members to represent and act for them will 
 be apparent. The wisdom of such an arrangement cannot be 
 questioned. For the various matters that must arise in the ex- 
 tensive operations of many of our private coi-porations would 
 render it almost impossible practically to conduct its affairs, un- 
 less the general management was confided to a limited number. 
 The members or stockholders are usually difficult to be found, 
 and it would be more difficult to convene them for corporate busi- 
 ness, on all the various questious that would usually arise, calling 
 for corporate action. 
 
 Sec. 58. Shareholders are members ; right to vote.— As the power 
 to appoint directors would, on general principles of the law, even 
 in the absence of special regulations, vest iii. the members, and as 
 membersliip consists usually in ownership of shares,^ and the right 
 to and ownership of such shares is evidenced by certificates of 
 stock duly prepared and authenticated by the proper agents, and 
 as such certificates may be held by the original owners or trans- 
 ferred to other parties by assignment, and the assignees thereby 
 become stockholders and members of the same and entitled to a 
 voice or vote for each share so held by them, at all general cor- 
 porate meetings, it becomes necessary for the adoption of some 
 rule or by-law, providing for such transfer of the certificates of 
 such stock, and for some record of the same on proper books of 
 the corporation kept for such purpose. It is usual, therefore, to 
 provide, either by the articles or the by-laws, that suitable books 
 shall be kept for the registry and transfer of the capital stock of 
 the company, and that every transfer of such stock to be valid 
 shall be made upon such books, and signed by the assignor of such 
 shares, or by his agent, duly constituted in writing.^ It is possible 
 
 ' Scliaeffer v. Missouri, etc., Ins. v. Ferris, 42 Conn. 560. But a mere 
 
 Co., 46 Mo. 248. subscription to stock, of itself, does not 
 
 * Every person in whose name stock constitute a subscriber a stockholder, 
 
 stands upon the books of a corporation but entitles him to become one upon 
 
 is, as to the corporation, a stockholder, complying with the terms and condi- 
 
 and entitled to all the rights and sub- tions of the subscription. Busey v. 
 
 ject to all the liabilities as such. State Hooper, 31 Md. 15. As between a cor-
 
 96 
 
 Pefvate Corporations. 
 
 that, under tlie general provisions of statutes, the powers and 
 franchises, as well as the capital stock, may be possessed and 
 owned hy one person constituting it, in one sense, a sole corpora- 
 tion, but with the powers and privileges of an aggregate one. 
 In fact, it is expressly provided by the statutes of some of the 
 states, that tlic rights and powers conferred by the incorporating 
 statutes may be enjoyed by a single person, who may, by comply- 
 ing with the provisions of the statutes so far as the same can be 
 applicable to tlie incorporation of a single person, become thereby 
 incorporated.^ 
 
 poration and a corporator, the stock- 
 book is primary, and the certificate 
 secondary evidence of their relation. 
 Bank of Commerce's Appeal, 73 Peun. 
 St. 59. The right of a stockholder to 
 vote is not destroyed by the circum- 
 stance that he has become bankrupt 
 and that his assignee has a right to 
 demand a transfer, so long as the 
 stock stands upon the books of the 
 corporation in the name of the bank- 
 rupt. " The party who appears to be 
 the owner by the books of the corpo- 
 ration," says Park, C. J., in State v. 
 Ferris, 42 Conn. 56S, " has the right 
 to be treated as a stockholder and to 
 vote on whatever stock stands in his 
 name, Marlborough Mfg. Co. v. 
 Smith, 2 Conn. 579; Northrop v. 
 Newtown, etc., Turnpike Co., 3 id. 
 544 ; Vansands v. Middlesex Co. Bank, 
 26 id. 144; Ex parte Willcocks, 7 
 Cow. 403 ; Matter of Barker, G Wend. 
 509;" Gilbert v. Manchester Iron Co., 
 11 id. 639; Hoppiu v. Buffum, 9 R. I. 
 518; Fisher v. Essex Bank, 9 Gray, 
 373. Even though he has parted with 
 his title or pledged his stock, so long 
 as it stands in his name upon the 
 books of the corporation. Ex parte 
 Willcocks, ante; Gilbert v. Manches- 
 ter Iron Mfg. Co., ante. " What mat- 
 ters it," says Pakk, C. J., in State v. 
 Ferris, ante, "to the other stockhold- 
 ers which of these parties voted on 
 the stock so long as one party or the 
 other manifestly had the right to vote 
 and both were agreed as to who should 
 
 vote." It has been held that a person 
 who has pledged his stock to the cor- 
 poration as collateral security for a 
 loan not yet due may vote upon the 
 stock. Scholfield v. Union Bank, 2 
 Cranch's C. C. 115. Or to a third per- 
 son. Matter of Barker, 6 Wend. 509 ; 
 Ex parte Willcocks, ante. So, too, it 
 has been held that the mortgagor of 
 stock may vote thereon at all elec- 
 tions until his title thereto has been 
 divested by foreclosure. Varnell v. 
 Thompson, ante. And, generally, it 
 may be said that so long as the stock- 
 holder in whcse name stock stands 
 upon the books of the company re- 
 tains any title to the stock, legal or 
 equitable, he may vote thereon ; but, 
 after he has parted with all his title 
 thereto, he has no right to vote 
 thereon, although the stock still stands 
 in his name upon the books. People 
 V. Deviu, 17 111. 84. The certificates 
 of sliares are usually signed by the 
 president or vice-president and coun- 
 tersigned by the secretary of the com- 
 pany. Uuiou Bank v. Laird, 3 Wheat. 
 390; Black v. Zacharie. 3 How. (U. 
 S,) 513 ; Fisher v. Essex Bank, 5 Gray, 
 373 ; Chouteau Spring Co. v. Harris, 
 20 Mo. 383 , Grant v. Mechanics' 
 Bank, 15 S. & R. 143 ; Duke v. Cahaba 
 Nav. Co.. 14 Ala. 82 ; Arnold v. Suf- 
 folk Bank, 27 Barb. 424; Bank of 
 Utica V. Smalley, 2 Cow. 770 ; Gilbert 
 V. Manchester 5lanuf. Co., 11 Wend. 
 627; Sargent v. Franklin Ins. Co., 8 
 Pick. 90. 
 
 1 See Code Iowa, ^ 1088, which pro- 
 vides as follows : " A single individual 
 may entitle himself to all the advant- 
 ages of this chapter (relating to incor- 
 porations for pecuniary profit) pro- 
 
 vided he complies substantially with 
 all its requirements, omitting those 
 which from the nature of the case 
 are inapplicable . "
 
 Membees — Stockholders and Stock. 97 
 
 Sec. 59. Transfer on books of company. — As against all persons 
 but the corporation, the sale of shares is completed when the 
 seller has subscribed the proper autliority to the transfer agents 
 of the company, to make a transfer on the books, and has de- 
 livered it, together with the old certificate, to the buyer, and the 
 conditions of the sale have been complied with. Such acts trans- 
 fer the title, subject only to such rights as the company may have 
 to refuse assent to the transfer, and neither a fomial transfer nor 
 the issue of a new certificate are necessary to perfect the buyer's 
 title.' 
 
 As between buyer and seller, this principle applies even though 
 the statute provides that no transfer of stock shall be valid for 
 any purpose whatever until it shall have been entered in the book 
 prescribed and in accordance with the law. Such a statute is 
 held to be confined in its application to the security and ease of 
 remedy of creditors, and for the information of stockholders and 
 creditors, and does not affect, as between the vendor and vendee, 
 the validity of an assignment of the stock, and after such an as- 
 signment the vendee assumes and holds to the corporation and its 
 creditors the same relation as the vendor held before the assign- 
 ment, and if, by reason of his neglect to have the stock regularly 
 transferred on the books, the vendor is subjected to liability for 
 any of the debts of the corporation, the vendee is liable to him 
 therefor." The rule may be said to be that an assignment of 
 stock, unaccompanied by a transfer upon the books of the corpora- 
 tion, vests in the assignee only an equitable title as against 
 the company, hut an ahsohite legal ownership as against the 
 assignor, and this too although there is no manual delivery 
 of the certificate.' The provision for the transfer of stock 
 on the books of the corporation is necessary in order that the 
 ofiicers or agents of the corporation may know on whom to 
 serve notices of the general meetings, and to secure the mem- 
 bers against fraud, which otherwise might be perpetrated 
 
 I Ross V. Southwestern R. R. Co., 53 America v. McNeil, 10 Bush, 54; Mc- 
 
 Ga. 514; Hill & Newichawanick Co., Neil v. Tenth Nat. Bank, 46 N. Y. 
 
 48 How. Pr. 427; Bruce v. Smith, 44 325. 
 
 Ind. 1; Leitch v. Welles, 48 N. Y. « Johnson v. Underhill, 52 N. Y. 
 
 585 ; Scripture v Francestown Soap- 203. 
 
 stone Co., 50 N. H. 571; Bank of ^Qrymeg v. Hone, 49 N. Y. 17. 
 
 13
 
 98 Private Corporations. 
 
 upon them. For, as we shall have occasion hereafter to notice 
 more fully, the members are generally entitled to notice of cor- 
 porate meetings, and to vote at such meetings the number of 
 votes which the stock they may own may entitle them to, and a 
 majority of such votes may control the action and the policy of 
 the corporate body, either directly by the stockholders or indi- 
 rectly by the duly constituted board of directors.^ 
 
 We have said that ownership of stock constitutes member- 
 ship and entitles the owner to vote at all corporate meet- 
 ings.^ It has been held that when a holder of a certificate 
 of corporate stock really holds it for another, but such trust does 
 not appear on the books of the company, and it is not disclosed 
 by the trustee, votes of such trustee on such stock at a coi'porate 
 meeting are valid ; and that especially would this be the case 
 where it did not appear that the votes thus cast were not in ac- 
 cordance with the wishes of the cestui -que trusty or that the latter 
 was not satisfied that the stock should thus stand in the name of 
 the person thus voting,^ and a subscriber to stock to whom a 
 regular certificate has been issued is entitled to vote thereon, 
 although he has paid nothing on the stock." But merely sub- 
 scribing for a certain number of shares of the stock of a corpora- 
 tion does not make a person a member of a corporation so as to 
 entitle him to the privileges, or impose upon him the liabilities of 
 a member,^ especially if any thing remains to be done before he 
 
 ' In Massacliusetts, it appears tliat facie evidence as to who possesses that 
 it is uot necessary, in order to consti- right. Hoppin v. Buifum, 9 R. I. 513. 
 tute a person a member of a corpora- A combination between a portion 
 tion for manufacturing purposes, that of tlie members of a mining corpora- 
 he should have a certificate of his tion to secure a board of directors and 
 shares. Cliester Glass Co. v. Dewey, the management of the property was 
 16 Mass. 94. held not to be void as against pub- 
 
 But where the statute requires every lie policy. Faulds v. Yates, 57 111. 416. 
 
 subscriber to pay a certain sum of 'A subscriber who has paid part of 
 
 money to become a member, the mere his subscription, but whose stock ia 
 
 subscription to stock of the com- afterward forfeited for the non-pay- 
 
 pany, without payment of the sum re- ment of calls, is not a stockholder 
 
 quired, does not constitute the party within the meaning of the New York 
 
 subscribing a member on his subscrip- statutes. Mills v. Stewart, 41 N. Y. 
 
 tion. Highland Turnpike Co. v. Mc- 884. 
 
 Kean, 1 1 Johns. 98 ; Hibernia Turnp. ' Wilson v. Proprietors of Central 
 
 Co. V. Henderson, 8 S. & R. 219 ; S. C, Bridge, 9 R. I. 590. 
 
 13 id, 484. ^ Downing V. Potts, 23 N. J. L. 66. 
 
 In case of a dispute as to the right * Chase v. Sycamone R. R. Co., 38 
 
 to vote at a corporate meeting, the 111. 215; Thrasher v. Pike, etc., R. R. 
 
 books of the corporation are 'prima Co., 25 id. 398.
 
 • Members — Stockholders and Stock. 99 
 
 is entitled to a certificate of tlie stock subscribed for. Thus, if 
 the statute or the terms of the subscription require that each 
 person subscribing for stock shall pay a certain amount upon 
 each share at the time of subscribing, those who do not pay are 
 not members/ nor does a person who subscribes for stock in the 
 name of a third person, but without autliority from him, become 
 a member of the corporation under such subscription.* But, 
 where a person subscribes for stock and complies with the re- 
 quirements of the charter or statute relative thereto, be immedi- 
 ately becomes a member of the corporation, although no certifi- 
 cate of the stock subscribed for has been issued to him. A per- 
 son becomes a member of a corporation by accepting a transfer 
 of stock therein, and thereupon becomes entitled to all benefits, 
 and subject to all liabilities which such relation creates.^ But 
 where stock stands in the name of a person as trustee for the cor- 
 poration, such trustee cannot vote thereon,^ nor can any one vote 
 upon stock standing upon the books in the name of the corpora- 
 tion itself.^ Where stock stands in the name of a person as 
 " cashier," *' president," etc., these words are treated as mere 
 matter of description, and his successor in the office cannot vote 
 thereon until a transfer is made.* The question as to the right 
 to vote at such meetings is determined by reference to the 
 books of the company which, under the regulations in ref- 
 erence to the issue and transfer of stock, should show the pai'ty 
 who ow^ns the same ; and they are usually at least jprima facie 
 evidence as to who is 2:>ossessed of the right to vote on shares.'' 
 But in New York, while by statute the inspectors are bound by 
 the transfer book, yet the courts may go behind and determine 
 whether a transfer appearing thereon was a sale or only a pledge, 
 and whether, under the circumstances, the pledgor or the pledgee 
 was entitled to vote thereon,* and, independent of any statutory 
 
 1 Hibernia Turnpike Co. v. Header- ^ United States v. Columbian Ins. 
 
 son, 8 S. & R. 219; Highland Turn- Co., 2 Crancli's C. C. 266; Ex parte 
 
 pike Co. V. McKean, 11 Johns. 100; Holmes, 5 Cow 426. 
 
 Goshen Turnpike Co. v. Hurtin, 9 id. * Mous.seaux v. Urquhardt, 19 La 
 
 218. Ann. 482. 
 
 ^ Salem Mill Dam Corp'n v. Ropes, * Matter of Mohawk & Hudson R 
 
 9 Pick. 187 R. Co., 19 Wend. 135. 
 
 3 Kane v. Bloodgood, 7 Johns. Ch. ' Hoppin v. Buffum, 9 R. I. 513. 
 
 90; Clinton, etc., R. R. Co. v. Eason, « Strong v. Smith, 15 Hun, 222 
 14 La. Ann. 816 ; Brigham v. Mead. 10 
 Allen, 245.
 
 100 PlilVATE COKPOKATIONS. 
 
 provision to that end, there can be no question but that the court 
 may go behind tlio transfer book so far as is necessary to ascer- 
 tain wliether the votes cast were cast by a person legally author- 
 ized to do so. While, as a rule, the pledgor of stock is entitled 
 to vote thereon, yet, if the pledgee for a long time acquiesces in 
 the pledgee's control thereof, and by the books of the corporation 
 the pledgee appears to be the owner thereof, in the absence of 
 any fraud, a court of equity will not interfere to aid the pledgor 
 in asserting control thereof at a contested election.' But where 
 stock is transferred without consideration for the purpose of 
 fraudulently controlling an election a court of equity will enjoin 
 the transferees from voting thereon.^ Where an election of 
 officers is procured by the abuse of legal processes and proceed- 
 ings under a preconceived scheme to that end, to prevent a fair 
 election, it will be set aside.' 
 
 Sec. 50 a. Rights of corporation in stock, lien, etc. — Liability for 
 unauthorized transfers, etc. — A Corporation, in the absence of any 
 provision in its charter, or the statutes giving it a lien thereon, 
 or giving the board of directors discretionary power in that re- 
 spect, cannot refuse to transfer stock u23on its books ; * and even 
 
 ' Hoppin V. Buffum, 9 R. I. 513. plaintiflPs husband, and by its terms 
 ^ Webb V. Ridgely, 38 Md. 364. was transferable only upon the books 
 ^People V. Albany, etc., R. R. Co., of the company upon surrender of the 
 55 Barb. (N. Y.) 344. old certificate. Cushman executed an 
 ^Jasigi V. Chicago, etc., R. R. Co., assignment of the stock in proper 
 129 Mass. 46; Purchase \. N. Y. Ex- form to the plaintiff, which was wit- 
 change Bank, 3 Robt. (N. Y.) 164. nessed by one Reals, an officer of the 
 When the required evidence of assign- defendant corporation. Subsequently 
 ment is produced, the corporation is Cushman executed an assignment of 
 bound to permit a transfer of stock, the same stock to Beals. On the same 
 Commercial Bank v. Kortright, 22 day that the assignment was executed 
 Wend, 348. But the remedy is by ac- to the plaintiff, she presented it to the 
 tion, and not by 'mandamus. Ex parte defendant, offered to surrender it, and 
 Fireman's Ins. Co. ,6 Hill (N. Y.)243; demanded a transfer of the stock to 
 Sargent v. Franklin Ins. Co., 8 Pick, her upon the company's books, and 
 79 ; Rex v. London Assurance Co., 5 B. that a certificate be issued to lier, which 
 & Aid. 899. Especially where spurious the defendants refused, and an action 
 stock is afloat. People v. Vein Coal was brought to compel such transfer. 
 Cd*. 10 How. Pr. (N. Y.) 186. Assump- Miller, J., said : " That an equita- 
 sit lies for such refusal. Hill v. Pine ble action will lie, in such a case, has 
 River Bank, 45 N. H. 300; Helm v. been distinctly recognized in a uum- 
 Svviggett, 12 Ind. 194; Noyes v. ber of the adjudicated cases in this 
 Spaulding, 27 N. H. 20 ; Hardenbergh state. In Middlebrook v. Merchants' 
 V. Bacon, 33 Cal. 356. In Cushman Bank, 41 Barb. (N. Y.) 481 ; 27 How. 
 V. Thayer Mfg. Co., 76 N. Y. 365, the (N. Y.) 474, the action was brought to 
 original certificate of the stock was compel the bank to allow the transfer 
 issued to Peter B. Cushman, the of certain shares of bank stock to the
 
 Meivibers — Stockholders and Stock. 
 
 101 
 
 where the statute provides that a transfer shall be subject to the 
 approval and acceptance of the board of directors, it is held that 
 this discretion cannot be exercised without limitation, so as to 
 
 plaintiff. A decree was made direct- 
 ing the transfer, and, upon appeal to 
 the court of appeals, the judgment of 
 the supreme court was aiJBrmed. 3 
 Abb. App. Dec. 295. No question 
 was raised in either of the courts as to 
 the right to maintain the action ; and 
 it is said, in the opinion of the court 
 of appeals: 'His' (the plaintiff's) 
 ' right was perfect and his demand 
 wrongfully refused.' As no point was 
 made that the action did not lie, it 
 is fair to assume that it was con- 
 ceded that it could be maintained. 
 In Com. Bk. of Buffalo v. Kortright, 
 32 Wend. (N. Y.) 348, it was held 
 that an action of assumpsit Vies a.ga.inst 
 a corporation for damages for refusing 
 to permit a transfer of stock on its 
 books. The chancellor, who dissented 
 from a majority of the court, in his 
 opinion, says tliat tlie plaintiff might 
 still file a bill to have a sale of the 
 pledge and to compel the bank to al- 
 low a transfer of the stock to the pur- 
 chaser. The decision of the case did 
 not turn on the question now consid- 
 ered ; and hence the point was not 
 decided, and the remarks of the chan- 
 cellor are only entitled to weight as 
 the opinion of a judge learned and 
 distinguished in this department of 
 the law. In Pollock v. National Bank, 
 7 N. Y. 274, it was held that a bank 
 which has permitted a transfer of 
 stock owned by a stockliolder, upon a 
 forged power of attorney, and has 
 cancelled the original certificates, may 
 be compelled to issue new certificates; 
 and if it has no shares which it can so 
 issue, to pay the value thereof. If, 
 in such a case, new certificates may 
 be decreed to be issued, surely it 
 should be done where the right of the 
 owner is entirely clear. The action 
 was of an equitable character, and 
 the principle decided recognizes the 
 right to compel a transfer of stock by 
 the bank. In Purchase v. N. Y. Ex. 
 Bk., 3 Robt. (N. Y.) 164, it was held 
 that after an assignment of bank stock, 
 the bank, upon the application of the 
 owner, is bound to allow the transfer 
 to be made on its books, and to issue 
 a new certificate, unless restrained by 
 
 the order of a court of competent ju- 
 risdiction. In White v. Schuyler, 1 
 Abb. Pr. (N. Y.) N. S. 800, it was held 
 that specific performance of an agree- 
 ment to transfer stock may be de- 
 creed, where the contract to convey is 
 clear, and the uncertain value of the 
 stock renders it difficult to do justice 
 by an award of damages. The spe- 
 cific objection that the party had a 
 remedy at law was not taken, although 
 the point was in the case. The ques- 
 tion was considered in tlie opinion by 
 HoGEBOOM, J., and numerous authori- 
 ties are cited to sustain the principle 
 laid down. The same rule is held in 
 the case of Buckmaster v. Consumers' 
 Ice Co., 5 Daly (N. Y. C. P.), 313. 
 These cases show a recognition of 
 the principle that a court of equity 
 will interfere when the remedy is de- 
 fective at law, if such an interference 
 be not against equity and good con- 
 science. See Seymour v. Delancey, 6 
 Johns. Ch. (N. Y.) 222. 
 
 " While the general rule is for courts 
 of equity not to entertain jurisdiction 
 for a specific performance on the sale 
 of stock, this rule is limited to cases 
 where a compensation in damages 
 would furnish a complete and satis- 
 factory remedy. Phillips v. Berger, 
 2 Barb. (N. Y.)603 ; Story's Eq. Jur., 
 § 717. Judge Story, in section 717, 
 states as the reason why a contract 
 for stock is not specifically decreed, 
 that ' it is ordinarily capable of such 
 an exact compensation.' He further 
 says : ' But cases of a peculiar stock 
 may easily be supposed, where courts 
 of equity might still feel themselves 
 bound to decree a specific perform- 
 ance, upon the ground that from its 
 nature it has a peculiar value, and is 
 incapable of compensation by dam- 
 ages.' He also says, in regard to the 
 general rule as to jurisdiction, in sec- 
 tion 718 : ' The rule is a qualified one 
 and subject to exceptions; or rather, 
 the rule is limited to cases where a 
 compensation in damages furnishes a 
 complete and satisfactory remedy.' 
 The case considered comes directly 
 within the exception stated. A re- 
 covery of damages would furnish in-
 
 102 
 
 Pkivate Corpokations. 
 
 defeat the rights of otliers,' but can be exercised and enforced 
 only so far as is necessary to protect the rights of the corpo- 
 ration, and that, if the corporation has no rights to be pro- 
 
 adequate compensation ; the remedy 
 by inaiulamns cannot be invoked as 
 the authorities hold, and there can be 
 no question that in a case of this kind 
 a court of equity alone can grant the 
 proper relief. 
 
 " It is insisted that when the plaint- 
 iff demanded a transfer on the books 
 of the company, the stock had already 
 been transferred to another person, 
 who had paid a money consideratiou 
 to the plaintiff's husband, from whom 
 she claimed, and the remedy, if any, 
 was by an action for damages. We 
 think that the transfer alleged, under 
 the circumstances, was not a valid 
 one as against the plaintiff, and fur- 
 nishes no sufficient answer to the 
 plaintiff's claim, if, as we have seen, 
 she had a right to maintain an action 
 in equity to compel a transfer of the 
 stock to her. Her right was para- 
 mount to that which the defendant 
 seeks to interpose as a defense. The 
 stock had previously, and on the 19th 
 of January, 1875, been transferred to 
 her by an assignment indorsed on the 
 back of the certificate, and on the 
 same day a power of attorney had been 
 executed by the owner to her, which 
 authorized the plaintiff to act for him 
 and in his behalf. That the transfer 
 was made without a moneyed consid- 
 eratiou can make no diffe/euce, as it 
 was otherwise valid. The assign- 
 ments to Beals, which, it is claimed, 
 are entitled to priority, bore date 
 some time after the transfer to the 
 plaintiff. As they were subsequent 
 to such transfer, and as by the cer- 
 tificate the stock was only transferable 
 upon the books of the company upon 
 a surrender of the same, no title could 
 pass, unless the transfer was thus 
 made. The delivery of the certificate, 
 as between the owner and assignee, 
 with the assignment and power in- 
 dorsed, passes the entire legal and 
 equitable title in the stock, subject 
 only to such liens or claims as the cor- 
 poration may have upon it. McNeil 
 V. Tenth Nat. Bk., 46 N. Y. 381 ; 7 
 
 Am. Rep. 341 ; N. Y. & N. H. R. R. 
 Co. V. Schuyler, 34 N. Y. 30, 80. Any 
 act suffered by the corporation that in- 
 vested a third party with the owner- 
 ship of the shares, without due pro- 
 duction and surrender of the certifi- 
 cate, rendered it liable to the owner ; 
 and it was its duty to resist any trans- 
 fer on the books without such produc- 
 tion and surrender. Smith v. Ameri- 
 can Coal Co. of Allegany Co., 7 Lans. 
 (N. Y.) 317. See, also, N. Y. & N. H. 
 R. R. Co. v. Schuyler, 34 N. Y. 83. 
 Beals was a witness to the original 
 assignment to the plaintiff, was an 
 officer of the company, and took the 
 transfer to himself with full knowl- 
 edge of plaintiffs claim for a very 
 trilling' consideration, and in fraud of 
 plaintiff's rights as the owner of the 
 stock. In view of the facts, Beals has 
 no reason for questioning the plaint- 
 iff's title ; and the defendant cer- 
 tainly has no valid grotinds for claim- 
 ing that Beals was the owner instead 
 of the plaintiff. 
 
 " That no demand of the stock was 
 made by Thayer, who was named in 
 the assignment and authorized to 
 make the transfer on the books of 
 the company, was not important. If 
 he was unwilling or neglected to do 
 so, it would not deprive the plaintiff 
 of her right, as the owner of the stock, 
 to a transfer of the same. But the 
 demand and refusal was admitted by 
 the answer; and when the plaintiff 
 rested, it was stated that the demand 
 and refusal was admitted by the 
 pleadings, and no claim made to the 
 contrary, or exception taken to such 
 statement. 
 
 " There was no error in the fourth 
 finding of fact, which was to the effect 
 that Cushman transferred the certifi- 
 cate of stock for a good consideration; 
 and there was sufficient evidence to 
 sustain such finding. That money 
 was not paid, and that it was a gift to . 
 the plaintiff, does not impair or affect 
 the validity of the assignment of the 
 same. For similar reasons, the fourth 
 
 ' Farmers' and Mechanics' Bank v. Wasson, 48 Iowa, 336 ; 30 Am. Rep.398.
 
 Members — Stockholders and Stock. 
 
 103 
 
 tected by its exercise, and other parties would be deprived 
 of their rights thereby, it cannot be enforced. " Its enforce- 
 ment," says Beck, J.,' " would operate as an infringement upon 
 the property rights of others, which the law will not permit. 
 It would, besides, operate as a restraint upon the disposition of 
 property in the stock of the corporation, in the nature of restraint 
 of trade, which the courts will not tolerate." "^ 
 
 If the corporation, by virtue of its charter or of the general 
 law, has a lien upon the stock for assessments, calls or the in- 
 debtedness of the stockholder to it, it may refuse to transfer the 
 stock until such lien is discharged,^ and it is held in Pennsylvania 
 that such a lien may be acquired by usage,* but the rule is gen- 
 erally held to be that such a lien cannot be acquired as against a 
 purchaser without notice unless it is given by the charter or gen- 
 eral law, of which the purchaser is bound to take notice, 
 or by a by-law of the coi*poi-ation to that effect of which 
 he has notice.^ At the common law no lien exists in favor 
 
 and fifth requests to find were properly 
 refused. The subsequent power of 
 attorney and transfer to Beals, with- 
 out the certificate, could not aifect or 
 impair the validity of the previous 
 assignment to the plaintiff; and as we 
 have already seen, Beals acquired no 
 right under the same. As the case is 
 presented, there are no facts to au- 
 thorize the conclusion that the trans- 
 fer to the plaintiff was revoked by the 
 assignment and power of attorney 
 subsequently executed to Beals ; and 
 he acquired no title thereby. The 
 acts of Cushman, in attempting to 
 transfer stock to which he had no 
 
 title, and of Beals, in accepting the 
 same with full knowledge of that fact, 
 could not affect the plaintiff's owner- 
 ship in any form ; and any transfer on 
 the books of the company would be 
 utterly unavailable in conferring any 
 title upon Beals. The assignment 
 was absolute to the plaintiff ; and 
 Cushman had reserved no right to 
 make any other or different disposi- 
 tion of the stock, and was without 
 any authority to do so. Beals was 
 fully acquainted with the facts ; and 
 in accepting a transfer, and claiming 
 under the same, he acquired no title 
 whatever." 
 
 ' Farmers', etc., Bank v. Wasson, 
 ante. 
 
 - Sargent v. Franklin Ins. Co., 8 
 Pick. 90; Quinet v. Marblehead Ins. 
 Co , 10 Mass. 476; United States v. 
 Vaughn, 3 Binn. (Penn.) 394; Chani- 
 bersburg Ins. Co. v. Smith, 11 Penn. 
 St. 120 ; Choteau Springs Co. v. Harris, 
 20 Mo. 382. 
 
 3 Great North of England Rv. Co. v. 
 Biddulph, 7 M. & W. 243; Quinet v. 
 Marblf^head Social Ins. Co., 10 Mass. 
 476 : Regina v. Wing, 33 Eug. L. & 
 Eq. 80; iST. A. Colonial Assn. of Ireland 
 v. Bentley, 15 Jur. 187 ; Regina v. 
 
 Londonderry, etc., Ry. Co., 13 Q. B. 
 998; Newry, etc., Ry. Co. v. Edmonds, 
 2 Exch. 118; Arabergate, etc., Ry. Co. 
 V. Mitchell, 4 id. 540. 
 
 * Morgan v. Bank of North America, 
 8 S. & R. 73. 
 
 ^ Dana v. Brown, 1 J.J. Marsh. 304; 
 Mass. Iron Co. v. Hooper, 7 Cush. 183; 
 Heart v. State Bank, 2 Dev. Eq. Ill; 
 Farmers', etc., Bank v. Wasson, 48 
 Iowa, 336. In Bank of Holly Springs 
 V. Pinson, 58 Miss. 421; 38 Am. Rep. 
 330, a bank was empowered by its 
 charter to make " all needful rules 
 and by-laws for the * * * mode
 
 104 
 
 Private Corporations. 
 
 of a corporation upon a stockholder's stock for his indebt- 
 edness to it,' and upon an assignment of such stock by him 
 it is bound to permit its transfer notwithstanding such indebted- 
 ness,'' unless there is written or printed on the certificate a notice 
 that transfers will not be permitted while the stockholder is in- 
 debted to the corporation,^ or the corporation has established a 
 usage to that effect, of which the assignee is bound to take 
 notice,^ or there is a by-law to that effect made in pursuance of 
 a power given by the charter, warranting such a condition.* 
 It is incumbent on the assignee of stock to reasonably satisfy the 
 corporation of the entire genuineness of the assignment, and the 
 coi'poration may require the personal attendance of the assignor 
 in cases wliere there is a real doubt as to the genuineness of the 
 
 and manner of transferring its stock," 
 enacted a by-law that the stock should 
 be assignable only on its books, and 
 that no transfer should be made by 
 any stockholder indebted to it, and 
 that the certificates of stock should 
 contain notice of this provision. A 
 certificate of stock was issued to C. , 
 reciting that the shares were "trans- 
 ferable at the ofBce in person, or by 
 attorney." C. pledged the certificate 
 to Pinson, as collateral security, by an 
 assignment indorsed thereon, appoint- 
 ing him attorney to demand and ob- 
 tain a transfer on the books. The 
 bank refused to transfer the stock 
 on the ground that C. owed it more 
 than the amount of the stock and 
 that it had a lien on the stock 
 therefor. Pinson had no notice 
 of this claim when the assign- 
 ment was msfde. The court held that 
 Pinson was entitled to the transfer. 
 In Steamship Dock Co. v. Heron, 52 
 Penn. St. 280, a stockholder whose 
 estate was insolvent died indebted to 
 the corporation, and after his death 
 the company passed a resolution pro- 
 
 hibiting the transfer of stock by any 
 one indebted to the company until 
 such indebtedness was paid or secured. 
 The stock was subsequently sold, the 
 purchaser having no knowledge of 
 the stockholder's indebtedness or of 
 the resolution of the company. The 
 court held that the corporation was 
 bound to permit the transfer. But 
 where a certificate of stock states 
 upon its face that the stock is trans- 
 ferable, " subject, nevertheless, to 
 his indebtedness and liability at the 
 bank, according to the charter and by- 
 laws of said bank ,'" it has been held 
 that these words may be held to sus- 
 tain a lien although no lien was ex- 
 pressly provided for in the charter or 
 by-laws, and that the corporation, hav- 
 ing relied on the stock as security, 
 were entitled to insist upon the lien 
 against the holder of the stock and 
 against his assignee, as the words 
 were sufficient to put the assignee 
 upon inquiry as to whether the 
 assignor was or not indebted to the 
 corporation. Vansands v. Middlesex 
 Co. Bank, 26 Conn. 144. 
 
 ' Steamship Dock Co. v. Heron, .53 
 Penn. St. 280; Mass. Iron Co. v. Hooper, 
 7 Cush. 183. 
 
 2 Heart v. State Bank, 2 Dev. Eq. 111. 
 
 ^Vansands v. Middlesex Co, Bank, 
 26 Conn. 144. 
 
 4 Morgan v. Bank of N. America, 8 
 S. & R. 73. 
 
 ^ St. Louis Perpetual Ins. Co. v. 
 
 Ooodfellow, 9 Mo. 149 ; Cunningham 
 V. Alabama Life, etc., Ins. Co., 4 Ala. 
 (N. S.) 652; Child v. Hudson Bay Co., 
 2 P. Wms. 207; Tuttle v. Walton, 1 
 Qa. 43; McDowell v. Bank of Wil- 
 mington, 1 Harr. (Del.) 27; Union 
 Bank v. Laird, 2 Wheat. 390 ; Stebbins 
 V. Phoenix Fire Ins. Co., 3 Paige Ch. 
 350,
 
 Membeks — Stockholders and Stock. 105 
 
 transaction, but after a transfer has once been made nnder a 
 power of attorney the corporation is bound by and cannot rescind 
 it, and if it permits a transfer to be made where it ought not to 
 liave done so, as where it was made under a power of attorney 
 executed by a lunatic, it may be set aside and the corporation 
 will be liable for the damages sustained.' The reason for this 
 rule is that the corporation is a trustee for the property and title 
 of each o^yner of the stock and consequently are bound to ex- 
 ercise proper diligence and care in its preservation. This rule 
 applies with additional force when the stock is expressed to be 
 held on trust for certain persons named, ^ and if a corporation 
 permits a transfer of stock to be made upon its books without 
 examining the will as to the specific becpiests of the stock therein 
 made, it is deemed guilty of negligence and liable to the cestui 
 que trust on the conversion of the stock by the executor to his 
 own use,^ and such has also been held to be the rule where the 
 stock of a ward has been transferred by the guardian and the 
 certificates canceled by the corporation,* and when the transfer 
 . was made under a forged power of attorney,^ and it has been held 
 that a stockholder may recover the dividends on the stock, al- 
 though at the time the dividends were payable he knew that the 
 stock had been placed in the nanie of another person under a 
 forged power of attorney, and omitted to inform the corporation 
 and did not demand the dividends until the offender had es- 
 caped.® So where a corporation permitted the transfer of stock 
 under an assignment which had been altered so as to embrace 
 all of the assignor's stock when it really embraced only a part 
 thereof, the corporation was held liable to the owner for the 
 amount of stock wa-ongfully transferred.^ But where the stock- 
 holder has himself been guilty of negligence in the mode of 
 
 ' Chew V. Bank of Baltimore, 14 Md, * City of Baltimore v. Norman, 4 
 
 299; Bayard v. Farmers and Me- Md. 353. 
 
 chanics' Bank of Phila., 53 Penn. St. ^ Pollock v. National Bank, 7 N. Y. 
 
 233; Pollock v. Nat. Bank, 7 N. Y. 274. 
 
 274; Davis v. Bank of England, 2 ^ Davis v. Bank of England, 2 Bing. 
 
 Bing. 393; Sewall v. Boston Water 393; Taylor v. Midland Ry. Co., 6Jur. 
 
 Power Co., 4 Allen, 277. (N. S.) 595. 
 
 "^ Bayard v. Farmers', etc., Bank, ante. ' Sewall v. Boston Water-power Co., 
 
 ^ Lowry v. Commercial, etc.. Bank 4 Allen (Mass.), 377. 
 
 (U. S. C. C. Md.), G Western L. J. 
 
 121. 
 
 14
 
 106 Pkivatk Corporations. 
 
 filling up the assignment,^ or has misled tlie corj)oration by his 
 conduct after the transfer, tlie corporation cannot be held 
 chargeable for any loss to the assignor.^ 
 
 Skg. 60. Executor of stockholder, rights of— Upon the death of 
 a stockholder, in a corporation, intestate, and the appoint- 
 ment of an executor or administrator of his estate who accepts 
 the trust, he becomes, by operation of law, vested with the 
 legal title to the stock, and with all the rights appertaining 
 to the ownership of the same, and especially the right of 
 voting at elections of directors of the company, without any 
 formal transfer of the stock on the books of the company 
 being necessary for that purpose/ But it is evident that the 
 corporation in snch cases might properly require evidence of the 
 decease of the o^vner, and of the due appointment of such execu- 
 tor or administrator, who should claim the right to vote by virtue 
 of his appointment as the representative of the deceased. 
 
 Sec. 61. stockholder's right to vote by proxy or attorney. — There 
 
 is usually a provision in the articles of association, that the mem- 
 bers may be represented in the corporate meetings by an agent or 
 proxy duly constituted. In such cases the personal attendance 
 of the member at a general meeting is unnecessary, but the votes 
 which a principal would be entitled to cast if personally present 
 may be cast by his duly constituted agent. But the right of 
 proxies to vote, as well as the manner of voting in moneyed cor- 
 porations, is usually provided for by the articles of association, 
 or the by-laws duly adopted in accordance with such articles, they 
 constituting the guide and authority in this matter. When the 
 constating instruments provide for the right of voting by proxy, 
 that settles all questions relating to the subject." And it is gen- 
 
 • Swan V. North British, etc., Co., 7 ment of the profit is not void as 
 H. & N. G03. ai^ainst public policy. Faulds v. Yates, 
 
 2 Duncan v. Lintley, 2 Mac. & Q. 30; 57 111. 416. 
 
 Coles V. Bank of England, 10 Ad. & '' The right to vote at corporate meet- 
 El. 437. iogs on shares of the stock of the cor- 
 
 3 Matter of North Shore Ferry Co., poration held in trust for the benefit 
 63 Barb. 556. And a combination be- of the corporation is suspended while 
 tween a portion of the members of a they are so held. American Railway 
 corporation to secure an election of a Frog Co. V. Haven, 101 Mass. 398. 
 board of directors and the manage-
 
 Members — Stockholders and Stock. 107 
 
 erally so provided, in case of corporations for pecuniary gain. 
 But it was formerly a controverted question whether the corpora- 
 tion could by its by-laws pi-ovide for such a method of voting 
 where the -constating instruments were silent upon the question. 
 Mr. Kent observes : " Though in case of elections in public and 
 municipal corporations, and in all other elections of a public na- 
 ture, every vote must be personally given ; yet in the case of 
 moneyed corporations, instituted for private purposes, it has been 
 held that the right of voting by proxy might be delegated by the 
 by-laws of the institution, when the charter was silent."^ But in 
 a New York case,^ the chancellor doubted the validity of the 
 right of voting by proxy, when the right is not given either ex- 
 pressly or impliedly in the act creating the institution ; and 
 subsequently, after a full consideration of the question by the 
 supreme court of New Jersey, it was held to be a principle 
 of the common law, that where an election depended upon 
 the exercise of judgment, the right could not be deputed; 
 and that it required legislative sanction before any corporation 
 could make a valid by-law authorizing members to vote by 
 proxy. ^ 
 
 But we shall consider this subject more fully under the head of 
 corporate meetings.^ 
 
 Sec. 62. Matters stockholders are presumed to know. — It is a gene- 
 ral rule that a person who becomes a member of a corporation is 
 presumed to know the obligations he assumes under the charter 
 and the by-laws of the body. And if he or the corporation is 
 mistaken in their construction of them, this would not be the 
 ground for setting aside a contract between tliem.^ And it has 
 been held that parties assuming to act in a corporate capacity, and 
 
 * 2 Kent's Com. 394 ; State v. Tudor, corporator, and sue or be sued on the 
 5 Day (Conn.), 329 contract. Culbertson v. Wabash Nav. 
 
 '2 Phillips V. Wickham, 1 Paige, Co., 4 McLean, 544. But a corpora- 
 
 593. tion is not generally bound by the ad- 
 
 * Taylor v. Griswold, 14 N. J. L. mission of its members, unless ac;ing 
 223. by its express authority. Shay v. 
 
 4 See chap. 8. Tuolumne Co. Water Co., 6 Cal. 73. 
 
 * Chesapeake, etc.. Canal Co. v. Du- Subscribers for stock in a railway 
 lauy, 4 Cranch's C. C. 85; Palmyra v. company must be presumed to know 
 Morton, 25 Mo. 593; Wight v. Shelby the provisions of the charter of the 
 R. R. Co., 16 B. Monr. 4. company. Wight v. Shelby, etc., R. 
 
 A corporation may contract with a R. Co., 16 B. Monr. 4.
 
 K)8 Private CoRPORAnoNS. 
 
 as members of a corporation which has in fact no corporate ex- 
 istence, are personally liable to those with whom they contract as 
 partners, if it appears that they were so acting at the time the con- 
 tract was made. ' 
 
 Sec. 63. Personal liability of stockholders under statutes. — At the 
 
 common law, a stockholder of a corporation is not liable for its 
 debts or for the acts of its oiScers in the prosecution of the busi- 
 ness of the company, but they are frecfuently made individually 
 responsible for the debts and liabilities of the corporation, or to a 
 limited amount or proportion of the same, by the exjjress pro- 
 visions of the incorporating statutes, or the constitution of the 
 state. These provisions vary the general common-law rule, ex- 
 empting the members from individual liability beyond their ex- 
 press obligations to the company. But the liability being purely 
 statutory, they are not liable except in the mode and to the ex- 
 tent provided in the statute. In a Yermont case,* the charter of 
 a corporation provided that the " persons and property of said 
 corporation shall be holden to pay their debts, and when any exe- 
 cution shall issue against such corporation, the same may be levied 
 on the person or property of any individual thereof," and it was 
 held that this did not authorize the levying of an execution 
 against the corporation upon the persons or property of the stock- 
 holders in the first instance, but that proceedings must first be 
 had against the corporation and the remedies against it exhausted 
 before the liability of the stockholders attached. When the 
 statute simply imposes liability upon the stockholders to an 
 amount equal to their stock, together with any unpaid subscrip- 
 tion, this is the limit of their liability, and when it has been once 
 exhausted by a suit by a creditor, the liability ceases,^ and it seems 
 that a honafide judgment debt in favor of a stockholder against 
 the corporation may be set off by him in equity against a suit to 
 make him individually liable in proportion to his stock." It was 
 also held in the case last cited that a creditor need not sue all the 
 stockholders, but may pursue one or more, provided, however, 
 
 1 Fuller V. Bo we, 57 N. Y. 23. ^ gtate Savings Bank v. Kellogg, 63 
 
 ^Danely v. Brown, 24 Vt. 197. See, Mo. 540. 
 
 also, Stewart v. Say, 45 Iowa, (504 ; •» Boyd v. Hall, 56 Ga. 563. 
 Hanson v. Donkersley, 37 Mich. 181.
 
 Members — Stockholders and Stock. 109 
 
 that his recovery shall in no case exceed the amount of his stock. 
 The statute of California concerning mining corporations provides 
 that " each stockholder shall be individually and personally liable 
 for his proportion of all the debts and liabilities of the company 
 contracted or incurred during the time that he was a stockholder, 
 for the recovery of which joint or several actions may be insti 
 tuted and prosecuted." ' 
 
 And the constitution of that state provides that " dues from cor- 
 ])orations shall be secured by such individual liability of the cor- 
 porators and other means as may be prescribed by law," ' and that 
 "each stockholder of a corporation or joint-stock association shall 
 be individually and personally liable for his proportion of all its 
 debts and liabilities." ' In a suit against stockholders of a min- 
 ing company in California to recover against them personally a 
 debt due from the corporation, the question was presented whether 
 the stockholders were personally liable beyond their proportion of 
 all the debts and liabilities of the corporation, contracted or in- 
 curred during the time they were stockholders, and whether the 
 statutory provision was not void as in conflict with the constitution. 
 
 Sawyer, C. J., in delivering the opinion of the supreme court 
 in the case, observed : " It was manifestly contemplated that the 
 legislature should regulate the liability and prescribe the rule by 
 which each stockholder's proportion should be ascertained. The 
 principle adopted by the legislature makes every stockholder liable 
 for his share of all debts contracted while he is a stockholder. 
 The entire body of stockholders for the time being is personally 
 liable for the entire debt contracted ; an entire set of stockholders 
 is liable for every debt. This is sufficient to answer all the re- 
 quirements of the constitution. There is nothing in the provision 
 that requires each man when he becomes a stockholder to do so 
 on the penalty of becoming responsible for all prior liabilities of 
 the corporation that remain uncanceled. This would be to make 
 several different sets of stockholders personally responsible for 
 some debts and only one set for others. There is nothing in the 
 constitution requiring such a result." * In an action against a 
 
 ' Act passed April 17, 1853, amended ^Larrabee v. Baldwin, 35 Cal. 155. 
 
 1863. See, also, French v. Teschemaker, 24 
 
 "Art. 4, §33. id. 539. 
 2 Id., § 36.
 
 110 Pkivate Corpoeations. 
 
 stockholder under the provision of tlie foregoing statute, to re- 
 cover a proportional share of one of the corporate debts, the evi- 
 dence must show that he was a stoclvliolder at the time the debt 
 was contracted ; and where a judgment against the corporation 
 does not show when* the debt upon which it was rendered was 
 contracted, it would not be sufficient to establish the liability of a 
 stockholder thereon, nor would a judgment against the corpora- 
 tion, while a party is a stockholder, ujion a contract entered into 
 before that time, constitute a contract within the meaning of the 
 act which provides that a stockholder shall be liable for corporate 
 debts contracted or liabilities incuri'ed while he was a holder of 
 stock, so as to renderhimpersonally liable for any portion thereof ; 
 but, in case of liability, a joint and several action may be main- 
 tained against the stockholders for a corporate debt.^ 
 
 Sec. 64:. Cause of action accrues, when. — -Under SUch statutes it 
 becomes a very important question when a cause of action against 
 a corporation against its stockholders upon their individual lia- 
 bility, for debts and liabilities of the corporation contracted or 
 incurred during the time they were stockholders. That is, whether 
 it accrues at the same time it accrues against the corporation, or 
 not until after a judgment has been obtained against the corpora- 
 tion, and the creditor has failed to collect it from the corporation, 
 or, in other words, whether the liability of the stockholder is 
 conditional, upon the failure or inability of the corporation to pay. 
 
 These questions have oeen settled by the supreme court of Cali- 
 fornia, in a case involving the construction of the constitutional 
 and statutory provisions referred to, in which Cope, J., who de- 
 livered the opinion of the court, said : '' It would seem, from a 
 just and reasonable construction of the constitutional and statu- 
 tory provisions upon this subject, that an individual corporator 
 in respect to his personal liability for the debts of the corpora- 
 tion does not occupy the position of a surety, but that of prin- 
 cipal debtor.^ His responsibility commences with that of the 
 
 ' Id.; Davidson v. Eankin, 34 Cal. under the peculiar provisions of the 
 
 503(1868); S. C, 1 With. Corp. Cases, California statute, yet we should be 
 
 199. derelict in our duty if we did not 
 
 ^ Without questioning the accuracy warn the profession that this doctrine 
 
 of the doctrine stated by the court, is only applicable under statutes con-
 
 Members — Stockuoldeks ai^d Stock. 
 
 Ill 
 
 corporation and continues during the existence of the indebted 
 ness. It is not in any sense contingent, but is declared to be 
 absolute and unconditional. The remedial effect of these pro- 
 visions, in which consists their only value, should not be impaired 
 
 tainin^ identical provisions. It will 
 be observed that under this statute 
 the creditor may proceed against the 
 corporation and the stockholders in 
 the same action, or may pursue them 
 separately, so that the doctrine which 
 is usually lield in reference to a stock- 
 holder's liability, that the corporation 
 is primarily liable, and the remedies 
 against it must be first exhausted, has 
 no application, as it would have ex- 
 cept for this provision. But the state- 
 ment of the learned judge that their 
 corporate debts and liabilities stand in 
 the same position in relation to cor- 
 poration creditors as if they were con- 
 ducting their business as an ordinary 
 partnership can have no application 
 under tlie California statute, because 
 under it each stockholder is not made 
 individually liable for the entire debts 
 of the corporation, as an individual 
 partner would be, but only for "his 
 proportion of all the debts of the cor- 
 poration during the time he was a 
 stockholder." That is, under a fair 
 construction of the statute his liability 
 is to be in the ratio which the amount 
 of the stock owned by him bears to 
 the whole stock of the corporation, 
 and this liability has no resemblance 
 to the liability of an ordinary partner. 
 The court evidently had in mind, when 
 it made use of the expression referred 
 to, the doctrine held by Hosmeh, C. 
 J., and two other judges, in South- 
 mayd v. Russ, 3 Conn. 53. But that 
 doctrine was held under a very pe- 
 culiar clause in the charter, to-wit : 
 " That the persons and property of the 
 members of said corporation shall at 
 all times be liable for all debts due by 
 said corporation." Under this statute 
 the liability of a stockholder is not 
 limited, but is co-ex.tensive with the 
 obligations and liabilities of the cor- 
 poration itself, nor is the liability re- 
 stricted to the share of each stock- 
 holder, so that the court might well 
 say that " they are liable as if there 
 had been no incorporation. The debt 
 is no sooner incurred than their liabil- 
 ity commences * * * while the 
 members of the company enjoy all the 
 
 privileges of a corporation, their cred- 
 itors the rights, and are entitled to 
 the remedies which are furnished by 
 established law, against an ordinary 
 partnership." But even under this 
 peculiar provision, which will prolja- 
 bly not be met with in the charter of 
 any other incorporated company in ex- 
 istence, Petkos, J., and Bristol, J., 
 refused to give their assent to the 
 statement of Hosmer, J., that the de- 
 fendants were to be treated as a mer- 
 cantile copartnership, nor generally, 
 under these charters and statutes, will 
 it be found that there is any attempt 
 even to render the stockholders pri- 
 marily liable with the corporation for 
 its debts, and unless the statute, as 
 does the statute of California, ex- 
 pressly so provide, the courts will 
 hold that the liability is merely sec- 
 ondary, and only attaches when the 
 creditor's remedy against the corpora- 
 tion has been exhausted and proved 
 wholly or partially fruitless. This 
 liability, being purely statutory, and 
 in derogation of the common law, the 
 statutes conferring or imposiug it will 
 be strictly construed, and liberally in 
 favor of the stockholder, and, in de- 
 terminining the question, the language 
 of the charter or statute will never 
 be extended beyond the plain and or- 
 dinary import of the language em- 
 ployed. The doctrine of strict con- 
 struction is illustrated in a Pennsyl- 
 vania case in which this question was 
 ably discussed by the court. Mayer 
 v. Pennsylvania Slate Co., 71 Penn. 
 St. 293. In that case the charter con- 
 tained a provision that the stockhold- 
 ers should be individually liable " for 
 debts due mechanics, workmen and 
 laborers employed by the company, 
 and for material furnished," and the 
 court held that the language could 
 not be extended so as to make them 
 liable for hauling, for repairing wag- 
 ons, for lumber,for erecting machinery, 
 provender for horses, powder for 
 blasting, tools, etc., as the word "ma- 
 terials " must be restricted to that 
 which forms a part of the products of 
 the company.
 
 112 Private Corporations. 
 
 by constrnction. Similar provisions in otlier states liave generally 
 been construed in the same manner. It lias been declared that 
 the members of a corporation who are answerable, personally, for 
 the corporate debts and liabilities, stand in the same position in 
 relation to creditors of the corporation as if they were conducting 
 their business as a common partnership." ' Of course, no general 
 rules can be given by which to determine either the fact, or the 
 extent of a stockholder s liability under these statutes, as in every 
 case it depends upon the language of the statute. But, under a 
 statute making the stockholder liable for the debts of the com- 
 pany, his liability is restricted to demands arising ex contractu^ 
 and he cannot be made liable for torts." And, even though a 
 judgment is obtained against the corporation for a tort, yet, if it 
 is sought to i-ender a stockholder liable therefor, the question of 
 liability depends, not upon the judgment, but upon the original 
 ground of action. Under these statutes^ a subscriber for stock is 
 held liable, although he has never paid his subscription or done 
 any act as a stockholder,' because the court will not look beyond 
 the legal title to the stock as shown by the books of the corpora- 
 tion." In Xew York it is held, under the statute existing there, 
 that the liability of a stockholder is several and not joint, and 
 that each creditor has a remedy against each stockholder, ^ and 
 that they are not primarily liable, as partners, but only as cor- 
 porators. " 
 
 Sec. 65. intentional deceit as to organization, etc. — Under the 
 statutes of various states it is also provided that any failure to 
 comply with the requirements of the statute or the articles of as- 
 sociation in organizing the corporation, or in intentionally de- 
 ceiving the public as to their means or liabilities, subjects the stock- 
 holders, or those in fault in these respects, to a personal liability ; 
 and they are made liable for the corporate debts in the former 
 
 ' Mokelumne Hill Canal Co. v. Wood- monson v. Spencer, 15 Wend. 548 ; 
 
 bury, 14 Cal. 265 ; Davidson v. Ran- Todbunter v. Walters, 29 lud. 105 
 
 kin, supra. See, also. Moss v. Mc- (1868). 
 
 Cullough, 7 Barb. 295 ; Harder v. Mc- - Heacock v. Sherman, 14 Wend. 58. 
 Cullough, 2 Den. 119 ; Marcy v. Clark, ^ Spear v. Crawford, id. 20. 
 17 Mass. 330; Southmavd v. Knss, 8 ^ ^Iderley v. Storm, 6 Hill, 624. 
 Coun. 56 ; Moss v. Oakley, 2 Hill, 265; ^ Abbott" v. Aspinwall, 26 Barb. 202. 
 Aliens V. Sewall, 2 Wend. 327 ; Corn- « Conant v. Van Schaick, 24 id. 87. 
 ing V. McCullougb, 1 Comst. 47 ; Si-
 
 Members — Stockholders and Stock. 
 
 113 
 
 case, and in tlie latter to such damages as may be sustained 
 tliereby.^ But it is generally provided in such cases that satis- 
 faction must first be sought of the corporation." The liability of 
 corporatoi's for failure to comply with the law in the institution 
 of the corporation does not generally apply to railroad corpora- 
 tions ; the usual limit of liability of members in such corporations, 
 and in some other cases, being the amount of stock held by them.' 
 
 • Code Iowa, ^§ 1068-1071 ; Corpo- 
 ration Acts of California, 1853-1863 ; 
 Rev. Stat. Me., chap. 7G. 
 
 ^Id., § 108;}. See, also, as to the 
 construction of a former but similar 
 statute of that state, Donworlh v. 
 Coolbaugh, 5 Iowa, 300 ; McKellar v. 
 Stout, 14 id. 359. 
 
 3 Iowa Code (1873), 1068 ; Md. Act, 
 1853, chap. 338. The decisions, under 
 the personal liability provisions of the 
 statutes of the various states, are as 
 follows: — 
 
 California. Mokelumne, etc., Co. v. 
 Woodbury, 14 Cal. 265; Irvine v. 
 McKeon, 23 id. 473. But such a clause 
 in the constitution may be waived, by 
 a stipulation to that effect incorporate 
 contracts. French v. Teschemaker, 34 
 id. 518. See, also, as to the effect of a 
 writing signed by the president of a 
 corporation, as evidence, Curtiss v. 
 Murry, 26 id. 633. See, also, as to 
 individual responsibility under a par- 
 ticular provision of the California 
 statute, Davidson v. Rankin, 34 id. 
 503. 
 
 Oonneeticut. Southmayd v. Russ, 3 
 Coun. 53; Middleton Bank v. Russ, id. 
 135 ; Beardsley v. Smith, 16 id. 368. 
 
 Georgia. A stockholder subjected to 
 liability may have his remedy. Force 
 V. Dahlonega Tanning, etc., Co., 23 
 Ga. 86 ; Conner v. Southern Ex. Co., 
 37 id. 397. 
 
 Illinois. Where a stockholder is lia- 
 ble to the amount of his stock, there 
 should be an averment of the amount 
 in the declaration. Sherman v. Smith, 
 20 111. 350. So suit should be brought 
 within one year. Tarbell v. Page, 34 
 id. 46. See, also, Baker v. Backus, 33 
 id. 79. 
 
 loioa. Execution should follow the 
 judgment, with a clause that it be 
 levied on the property of the members. 
 Hampson v. Weare, 4 Iowa, 13. See, 
 also, Don worth v. Coolbaugh, 5 id. 
 300 ; Corse v. Sanford, 14 id. 235. The 
 
 15 
 
 bank officer, liable individually un- 
 der the statute, for payment of bills 
 issued, may contract with another 
 party for the redemption of them. 
 Alleu V. Pegram, 16 id. 163. 
 
 Kentucky. Greenup v. Barbee, 1 
 Bibb, 320. Corporators, only, liable 
 for a note who were such at the time 
 it was given. Castleman v. Holmes, 
 
 4 J. J. Marsh. 1. See, also, Roman v. 
 Fry, 5 id. 634 ; De Wolf v. Mallett, 3 
 Dana, 218 ; U. S. Bank v. Dallam, 4 
 id. 574 ; Cornwall v. Easthman, 2 
 Bush, 561. 
 
 Louisiana. Brown v. Union Ins. Co., 
 3 La. Ann. 177 ; Robertson v. Conrey, 
 
 5 id. 297 ; Stark v. Burke, id. 740. 
 One whose stock has been forfeited 
 will not be further personally liable. 
 Macauly v. Robinson, 18 id. 619. 
 
 Maine. The creditor must, under 
 act of February 16, 1836, first obtain 
 judgment against the corporation. 
 Drink water v. Portland Marine R., 18 
 Me. 35. 
 
 A statute, making stockholders in a 
 pre-existing corporation liable indi- 
 vidually for the debts of the corpora- 
 tion , is constitutional in respect to 
 debts contracted after the passage of 
 the statute. Stanley v. Stanley, 20 
 Me. 191. See, also, Longley v. Little, 
 id. 162 ; Fowler v. Robinson, 31 id. 
 189 ; Fowler v. Ludwig, 34 id. 455 ; 
 Grose v. Hilt, 36 id. 23 ; Hudson v. 
 Carman, 41 id. 84 ; Cummings v. Max- 
 well, 45 id. 190. 
 
 Under the act of 1856, a stockholder 
 cannot be personally liable in an ac- 
 tion commenced after the passage of 
 the act, to recover a debt contracted 
 before its enactment. Coffin v. Rich, 
 45 id. 507 ; Carroll v. Hinkley, 46 id. 
 81 ; Cathorn v. Towle, id. 302 ; Holt v. 
 Blake, 47 id. 63. 
 
 Judgment against the corporation 
 is binding upon the stockholders, and, 
 until reversed, is conclusive upon 
 them in a subsequent suit against
 
 114 
 
 Privatk Corporations. 
 
 Sec. 6(). General liabilities on subscriptions for stock. — The charter 
 or act of incorporation, or tlie general statutes and articles of as- 
 sociation, under Avhich a corporation is instituted, like the 
 
 them by the same plaintiff. Millikeu 
 V. VVhitehouse, 49 Me. 527. 
 
 Maryland. Section 9, of chapter 338, 
 of the act of 18o2, provides that stock- 
 holders " shall be severally and indi- 
 vidually liable to the creditors of the 
 company iu which they are stockhold- 
 ers to an amount equal to the amount 
 of stock held by them respectively, 
 for all contracts made by such com- 
 pany until the whole amount of capi- 
 tal stoclc fixed and limited by such 
 company shall have been paid in, one- 
 half thereof in one year, and the other 
 half iu two years, from and after tlie 
 incorporation of said company, or such 
 corporation shall be dissolved." 
 
 On a bill filed by creditors, to make 
 certain stockholders liable under this 
 provision, the latter attempted to set 
 off the amount of certain loans made 
 by them to the company. But the 
 supreme court of Maryland held ; 1. 
 That thouj^h the doctrine of recoup- 
 ment might arise, it did not follow 
 that the stockholders were absolved 
 from liability to the creditors of the 
 company ; 2. That the statute did not 
 refer to them in their corporate capac- 
 ity, but as individual stockholders ; 
 and it declared their liability without 
 reference to the amount they might 
 have paid for tlie stock ; 3. That the 
 stockholders were not liable for debts 
 contracted by the company subsequent 
 to the parting with tlieir stock ; 4. 
 That each might insist upon contribu- 
 tion from the others, of their propor- 
 tion of the complainant's claims. 
 Matthews v. Albert, 21 Md. 527. 
 
 Massachusetts. Liability several and 
 not joint. Pratt v. Bacon, 10 Pick. 
 127. Law should be construed strictly. 
 Gray v. Cotfin, 9 Cush. 192. See, also, 
 Holyoke Bank v. Burnhara, 11 id. 
 183; Handrahan v. Cheshire, etc., 4 
 Allen, 396 ; Mason v. Same, id. 398 ; 
 Hutchins v. NoW England, etc., Co., id. 
 580. Under the statutes of 1851, chap. 
 133, see Bonk v. Clark, 6 id. 361 ; Tyr- 
 rell V. Washburn, id 466. Under act 
 1862, chap. 218, g 3, see Peele v. 
 Phillips, 8 id. 86 
 
 JVe?o York. Slee v. Bloom, 19 Johns. 
 456; Briggs v. Penniman, 8 Cow. 387; 
 
 Aliens v, Sewall, 2 Wend. 327. Stock- 
 holder liable though he has paid no 
 part of his subscription. Spear v. 
 Crawford, 14 id. 20 ; Moss v. Oakley, 
 2 Hill, 265. 
 
 Debts barred by the statute of 
 limitations cannot be enforced. Van 
 Hook V. Whitlock, 3 Paige, 409; Same 
 V. Same, 7 id. 373; Corning v. Mc- 
 CuUough, 1 N. Y. 47; Bogardus v. 
 Rosendale Manuf. Co., 7 id. 147; Moss 
 V Averell, 10 id. 449 ; Burr v. Wilcox, 
 23 id. 551 ; Bailey v. Hollister, 26 id. 
 112. The liability of a trustee under 
 the act of 1848 is confined to debts 
 contracted while he was trusiee. 
 Shaler, etc., Co. v. Bliss, 27 id. 297. 
 
 Stockholder liable while he appears 
 upon the books as such, though he has 
 transferred his stock. Worrall v. Jud- 
 son, 5 Barb. 210. See, also, Hoagland 
 V. Bell, 36 id. 5 7; Williamson v.Wad.=- 
 worth, 49 id. 294; Ogden v. Rollo, 13 
 Abb. Pr. 300; Wait v. Ferguson, 14 
 id. 379 ; Maher v. Carman, 38 N. Y. 
 24; Witherhead v. Allen, 28 Barb. 
 661 ; Perkins v. Church, 31 id. 84. 
 
 The plaintiflF must show that the 
 defendant was a stockholder at the 
 time the debt was contracted. Young 
 V. N. Y., etc., Steamship Co., 15 Abb. 
 Pr 69. 
 
 North Carolina. Under the provis- 
 ions of an act of incorporation, provid- 
 ing "that the private property of the 
 individual stockholders shall be liable 
 for the debts of contracts and liabili- 
 ties of the corporation," it was held 
 that the responsibility of the indi- 
 vidual stockholders was secondary, 
 and that when the corporation became 
 extinct the liability of the stockhold- 
 ers became extinct also. Malloy v. 
 Mallett, 6 Jones' Eq. 345. 
 
 Ohio. Kearney v. Buttles, 1 Ohio St. 
 362 ; Medill v. Collier, 16 id. 599. 
 
 Pennsytvnnia. Carr v. Le Fevre, 27 
 Penn. St. 413. A decision in relation 
 to liabilities of stockholders, under the 
 act of 1853. See, also, Patterson v. 
 Wyomissing, etc., Co., 40 id. 117. See, 
 also, Wilson v. Pittsburgh, etc., Co., 
 43 id. 424 ; Mansfield, etc., v. Will- 
 cox, 52 id. 377. 
 
 South Carolina. Where the charter
 
 Members — Stockholders and Stock. 115 
 
 constitution of a state, not only the organic hnt the supreme law 
 of its being. By these constating instruments, the amount of 
 the capital stock is fixed, as well as the times and conditions for 
 the payment for subscriptions for the stock, the proportion of in- 
 debtedness to the capital stock, and, if organized under general 
 statutory provisions, the preliminary steps necessary to incorpo- 
 rate the association. Provision is also usually made b}' the articles 
 of association or by-laws, for a division of the capital stock into 
 equal shares, for the issuing of proper certificates therefor to pur- 
 chasers or subscribers, who thereby become members of the cor- 
 poration,' and for a record of such sales, and of all transfers of 
 the certificates on proper books of the company. 
 
 Controversies frequently arise between subscribers and the com- 
 pany as to the liability as well as the rights of the former on their 
 subscriptions. The subscribers for stock are bound to take notice 
 of the requirements of the charter, articles and by-laws of the 
 company, and of the obligations thereby imposed upon them. 
 These usually control the contract and explain the obligation. 
 The subscription becomes a contract between the subscriber and 
 the corporation to pay the sum stipulated, in such manner and on 
 such conditions as may be provided in the express contract, inter- 
 preted by the constating insti'uments, to which he subscribes, or in 
 the absence of this, at such times and on such conditions as may 
 be provided by the articles or by-laws.^ 
 
 provided that notliing therein con- Cotton Man. Co., 10 Rich. 95. See, 
 
 tained should exempt the members also, Haslett v. Wotherspoon, 1 Strobh. 
 
 " from all liabilities pertaining to gene- Eq. 209 ; Farrow v. Bivings, 13 Kich. 
 
 ral partners," it was held that the Eq. 25. 
 
 members were liable to creditors of Tennessee. Ohio Life Ins. and T. 
 
 the company as partners, and might Co. v. Merchants' Ins. and T. Co., 11 
 
 be sued as such under the corporate Humph. 1. 
 name. Planters' Bank v. Bivingsville 
 
 'The subscriber to capital stock of 11 Johns. 100; Goshen Turnpike Co. 
 an incorporated company becomes a v. Hurtin, 9 id. 218; Hibernia Turn- 
 member of it, even though he may pike Co. v. Henderson, 8 S. & R. 219; 
 subsequently fail to meet calls on his Trumbull v. Mutual Fire Ins. Co., 17 
 subscription. SchaefiTer v. Missouri Ohio, 407: Gayle v. Cahawba, etc., 
 Ins. Co., 46 Mo. 248. But this will de- Ry. Co., 8 Ala. 586; Stokes v. Leb- 
 pend upon the terms of the statute un- anon Turnpike Co., 6 Humph. 241; 
 der which the company is formed. Hartford, etc., R. Co. v. Kennedy, 12 
 Under the Massachusetts statute the Conn. 499 ; Essex Bridge v. Tuttle, 2 
 subscribers can hardly be said to be Vt. 393; Union Lock, etc., v, Towne, 
 members of the company, unless they 1 N. H. 44 ; Wadsw. on Joint-Stock 
 finally elect to take and pay for the Comp. 317; Hall v. U. S. Ins. Co., 5 
 shares subscribed for. Gill. 484. 
 
 * Highland Turnpike Co. v. McKean,
 
 116 Private Corporations. 
 
 Sec. 67. Conditions provided by the constating instruments. — Wliei'O 
 tlie charter of a railroad com})any provided that no subscri[)tioii 
 should be received and allowed without the payment of five dollars 
 on each of the shares at the time of the subscription, it was held 
 that a subscription without such payment did not invest the sab- 
 scriber with any of the privileges of a corporator, nor render him 
 liable either as a subscriber, stockholder or otherwise.^ And where, 
 by the incorporating act, the shares of stock were fixed at twenty- 
 five dollars, and it required the payment of ten dollars on each 
 share subscribed at the time of subscribing, it was held in New 
 York that the subscription and payment were both essential to con- 
 stitute membership, and to consummate the contract. The court, 
 in an early New York case,^ in which, the question was deter- 
 mined, say: "Suppose the speculation liad been an advantageous 
 one, and before the first call of the president and directors, the 
 stock had risen considerably in value', could not the directors, 
 with propriety, have refused to consider Mr. Jenkins (the defend- 
 ant) as a stockholder, on account of his not having made the pay- 
 ment required by the act on his subscribing ? I think they could. 
 
 ' Wood V. Coosa, etc., R. Co., 32 Ga. scription, if tlie statute is complied 
 
 273. See, also. Highland ' T. Co. v. with before suit brought. If both the 
 
 McKeau, 11 Johns. 98. subscription and the actual cash pay- 
 
 '■* 1 Cai. (N. Y.) 381. The rule adopted ment of ten per cent have been made, 
 in this case was followed in Highland the contract is binding, although the 
 Turnpike Co. v. McKean, llJohns. acts are not simultaneous. Ogdens- 
 98; Charlotte, etc., R. R. Co. v. Blake- burgh, etc., R. R. Co. v. Wolley, 34 
 ley, 3 Strobh. 245, and Hibernia Turn- How. Pr. 54. See, also, Napier v. 
 pike Co. V. Henderson, 8 S. & R. 219. Poe, 12 Ga. 170. A subsequent pay- 
 But, unless the charter or the law ment will operate as a waiver of the 
 under which the corporation is formed condition, and the party making it will 
 makes such payment a condition pre- be treated as recognizing his original 
 cedent, it is not believed that the sub- liability. Beach v. Smith, 28 Barb, 
 scriber can set up his failure to pay as 254 ; Hall v. Selma, etc., R. R. Co., 6 
 a defense to an action against him Ala. 741 ; Black River, etc., R. R. Co. 
 therefor upon his subscription. The v. Clarke, 25 N. Y. 208 ; Haywood, etc., 
 only effe4*t of such a failure ordinarily Plank road Co. v. Bryan, 6 Jones' L. 
 would be, to enable the company to 82. And where an article in the by- 
 decline to recognize the subscription, laws of a corporation provided that 
 unless such payment is made as re- " ten per cent shall be payable upon 
 quired. Vicksburgh, etc., R. R. Co. subscription, or the subscription shall 
 V. McKean, 12 La. Ann. 638; Wight be void," it was held that a subscrip- 
 v. Shelby R. R. Co., 16 B. Monr. 4. tion made without paying any thing 
 And in New York, under the general was not void, but voidable only at the 
 railroad law of 1850, prescribing that election of the company. Piscataqua 
 no subscription to the stock shall be Ferry Co. v. Jones, 89 N. H. 491. See, 
 taken without a payment of ten per also, holding a similar doctrine, Smith 
 cent on the amount in money, it is not v. Plankroad Co., 30 Ala. 650 ; McRea 
 necessary that the payment should be v. Russell, 10 Ired. 224. . 
 made at the same time with the sub-
 
 Members — Stockholders and Stock. 117 
 
 No possible benefit then arising from the future emohiments of 
 the company transactions can be considered as a consideration 
 for the promise ; and if it could, none such is stated on the rec- 
 ord." ^ But tliere seems to be no question but tliat the right 
 of membership, of itself, affords a sufficient consideration for a 
 subscription to the stock of a corporation,^ and an agreement to 
 take a certain number of shares of stoc}?: subscribed for previously 
 to the formation or incorporation of the company is at least suffi- 
 cient to support an implied promise to pay all calls upon the 
 same after the corporation is formed/ Of course a subscription/ 
 to stock before the corporation is formed is a mere proposition 
 or agreement to take the number of shares named in the subscrip- 
 tion when the corporation is legally formed, and is revocable at 
 any time hefore the latter event occurs, but not afterward,* and, 
 after the corporation is legally formed, a subscriber is liable upon 
 hjs subscription, although he has not complied in all respects with 
 its conditions. Thus, where a note was given in lieu of the 
 amount required by the incorporating act to be paid at the time 
 of a subscription, it was held that the note was given upon suffi- 
 cient consideration and was valid in the hands of the corporation, 
 though executed before the completion of the organization.^ And 
 it has been held by the supreme court in Kentucky that the fail- 
 ure of a subscriber for railway stock, to pay the amount required 
 by the charter to be paid at the time of the subscription, does not 
 exonerate him from his liability for his subscription, as it would 
 be his duty to pay it, and he should not be permitted to take ad- 
 
 ' See, also, same doctrine in Hibernia ^ Eastern Plaukroad Co. v. Vaughn, 
 Turnp..Co. v. Henderson, 8 S. & R. 14 N. Y. 546; Rensselaer, etc., Plank- 
 219. But, in a dissenting opinion in road Co. v. Barton, 16 id. 457; Penob- 
 tliis case, Duncan, J., said : "If this scot R. R. Co. v. Dummer, 40 Me. 172; 
 defendant had obtained a receipt from Gleaves v. Brick Church Turnpike 
 the commissioners and had given his Co., 1 Sneed, 491 ; Johnston v. Ewing 
 note to the company for the money to Female University, 35 111. 518 ; John- 
 be paid in advance, it could be recov- son v. Wabash, etc., R. R. Co., 16 
 ered. Has he not done this? For the Ind. 889. 
 
 subscription includes this, and is a ■• Poughkeepsie, etc., Plankroad Co. 
 
 note for five dollars payable on de- v. Griffin, 24 N. Y. 150; Burt v. 
 
 mand ; and the company could have Farrar, 24 Barb. 518. 
 
 recovered though no note had been ^Vermont Central Ry. Co. v. Clayes, 
 
 given." 21 Vt. 80. See, also. People's Ferry 
 
 « Lake Ontario R. R. Co. v. Mason, Co. v. Balch, 8 Gray, 314 ; Troy R. 
 
 16N.Y. 451 ; Buffalo & N. Y. R. R. Co. v. Newton, id. 596. But see, also, 
 
 Co. v. Dudley, 14 id. 336 ; Selma & Lexington R. Co. v. Chandler, 13 
 
 Tenn. R R. Co. v. Tipton, 5 Ala. 787. Mete. 311.
 
 1 
 
 118 PiiivATE Corporations. 
 
 vantage of his own wrong.' So, in Louisiana, a stock subscriber, 
 who had not paid tlie five per centum on the amount of his stock 
 at the time of subscribing, as required by the charter of the com- 
 pany, it was held, could not avail himself of such a defense, for it 
 was his duty to make the payment, and that to sustain such a 
 defense would be to permit him to avail himself of an advantage 
 from his own wrong.'' 
 
 Sec. G8. Special liabilities created by charter. — The liabilities of 
 the subscribers may depend upon other conditions imposed by 
 the charter or act of incorporation. Thus, when by the act under 
 which the corporation was created, it was provided that the cap- 
 ital stock should be divided into five thousand shares, of not ex- 
 ceeding $100 each, and that after one thousand sliares should be 
 subscribed for, a meeting of the subscribers might be called for 
 the purpose of organizing the corporation, and providing for the 
 management of its affairs ; it was held, by the supreme court of 
 Massachusetts, that no call for the payments of subscription could 
 lawfully be made for the general objects of the corporation until 
 the five thousand shares had been subscribed for, although a call 
 might be made before that time to defray the expenses incurred 
 in effecting the incorporation.^ 
 
 Sec. 69. Conditions must be complied with It may be stated as 
 
 the general, if not the universal rule in this country, that where 
 
 J Wight V. Shelby Ry. Co., 16 B. ^ gaiem Mill-dam Corp. v. Ropes, 6 
 
 Mour. 4. See, also, under provisions Pick. 23. 
 
 of the Ohio statute, Cliamberlain v. But if, by the charter, a bank is re- 
 Painesville, etc., R. Co., 15 Ohio St. stricted from operation until a certain 
 225 ; Ashtabula, etc., R. Co. v. Smitli, amount of stock is subscribed, a sub- 
 id. 328. sequent purchaser of tlie stock could 
 
 - Vicksburgh R. Co. v. McKean, 12 not be prejudiced by the fact that a 
 
 La. Ann. 638. certain amount of the stock was fraud- 
 
 And where in lieu of a cash pay- ulent and fictitious, and secured by 
 raent, required by the charter on the collusion between the original sub- 
 first installment, the subscriber gave scribers and the commissioner, for the 
 his promissory note, this was held a purpose of evading the limitations of 
 sufficient compliance. McRae v. Rus- the law, provided the purchase was 
 sell, 12 Ired. 224; Selma & Tenn. R. botia fide, and without notice of the 
 Co. v. Tipton, 5 Ala. 787; Tracy v. fraud. Minor v. Mechanics' Bank, 1 
 Yates, 18 Barb. 152; Greenville & Col. Pet. 46; Walker v. Devereaux, 4 
 R. Co. v. Woodsides, 5 Rich. 145 ; Paige, 229 ; Johnston v. South West 
 Mitchell V. Rome R. Co., 17 Ga. 574. R. Bank^. 3 Strobh. Eq. 263 ; Ang. & 
 See, also, Everhart v. West Chester Am. on Corp., i^ 146. 
 Phil. R. Co., 28 Penn. St. 339. 
 
 1
 
 Membeks — Stockholdeks and Stock. 119 
 
 the constating instruments fix the number of shares or the amount 
 of the capital stock to be subscribed, or the sum which must be 
 paid tliereon, before the corporation can enter upon the business 
 for which it was organized, these conditions must be, in good 
 faith, complied with." Thus, in a California case,^ an agreement 
 to take sliares, etc., and that " as soon as $150,000 of the capital 
 stock of the company has been secured " * * * 'f the company 
 will be organized," was held not to be binding where the company 
 was organized on a subscription of only $130,000. In an Oregon 
 case,^ articles were filed under the general incorporation law, to in- 
 corporate the OregonCentral Railroad Company with a capital stock 
 of $7,250,000, divided into seventy-two thousand five hundred 
 shares of $100 each. Six persons subscribed for one share each, 
 and the seventh subscription w^as as follows : " Oregon Central Ilail- 
 road Company, by G. L.Wood, chairman, seventy thousand shares, 
 $7,000,000," and it was held that an organization effected under 
 these subscriptions was a nullity. So, under an English act of 
 incorporation which provided that the sum of £100,000 should 
 be subscribed before any of the powers and provisions of the act 
 should be considered in force, it was held that the full sum re- 
 quired should be subscribed before any call could be made on the 
 subscri23tion.^ 
 
 This doctrine has been frequently recognized in this country.* 
 The condition imposed in such cases is a condition precedent ; 
 and no authority to act is conferred, until it isfully complied with. 
 
 * As bearing on these propositions, 115; Shurtz v. Schoolcraft, etc. , R. Co., 
 
 consult opinion of Parker, J., in 9 Mich. 269; Oldtown, etc., R. Co. v. 
 
 Schenectady, etc., R. Co. v. Thatcher, Veazie, 39 Me. 571 ; Penobscot R. Co. 
 
 11 N. Y. 102. See, also, Salem Mill- v. Dummer, 40 id. 173; Penobscot R. 
 
 dam Co. V. Ropes, 6 Pick. 23; 9 id. Co. v. White, 41 id. 513; Littleton 
 
 187; Central T. Co. v. Valentine, 10 Maniif. Co. v. Parker, 14 N. H. 543 ; 
 
 id. 143; Stoneham Branch R. Co. v. Con toconk Valley R. Co. v. Barker, 
 
 Gould, 9 Gray, 277 ; Troy, etc., R. Co. 33 id. 363 : New Hampshire, etc., R. 
 
 V. Newton, 8 id. 596; Cabot, etc., Co. v. Johnson, 30 id. 390. 
 
 Bridnje Co. v. Chapin, 6 Cusli. 50 ; '■^ Santa Cruz R. R. Co. v. Schwartz, 
 
 Worcester, etc., R. Co. v. Hinds, 8 id. 53 Cal. 106. 
 
 110 ; Atlantic Cotton Mills v. Abbott, =* jjoHaday v. Elliott, 8 Oregon, 84. 
 
 9 Cusli. 423; Lexington, etc., R. Co. * Norwich, etc., Co. v. Theobald, 1 
 
 V. Chandler, 13 Mete. 311; Harlem Moo. & Mai. 151. 
 
 Canal Co. v. Seisas, 3 Hall, 504 ; Rens- * Salem Mill-dam Corp. v. Ropes, 9 
 
 selaer, etc., R. Co. v. Wetsel, 21 Barb. Pick. 187 ; Central Turnpike Co. v. " 
 
 56 ; Haun v. Mulburv, etc., R. Co., 33 Valentine, 10 id. 142 ; Worcester, etc., 
 
 Ind. 103 ; Haiu v. N."W. G. Co., 41 id. R. Co. v. Hinds, 8Cush. 110 ; Littleton 
 
 196 ; Fox V. Allensville Co., 46 id. 31; Manuf. Co. v. Parker, 14 N. H. 543. 
 Peoria, etc., R. Co. v. Preston, 35 Iowa,
 
 120 Private Coeporations. 
 
 But where the charter of a railroad company provided for certain 
 commissioners to receive subscriptions, and that they should "re- 
 ceive no subscriptions to said stock unless five per centum thereof 
 in cash should be paid to them at the time of subscribing, and 
 should they receive subscriptions to said stock without payment, 
 they shall be personally liable to pay the same to said corporation 
 when organized," it was held that this clause was not a condition 
 precedent to the organization of the company, but a mere per- 
 sonal liability imposed on the commissioners/ Kot only is it 
 necessary that the requisite amount of stock should be subscribed, 
 but, also, where more than the amount required is subscribed for, 
 and an allotment is made which excludes certain subscribers, the 
 company cannot, by increasing the amount of the capital stock, 
 bind the subscribers so excluded to take the stock subscribed for 
 by them. Thus, in a recent Massachusetts case,'^ A., with others, 
 signed a paper which recited that a certain corporation had been 
 incorporated, the capital stock of which was fixed at $50,000, and 
 by the terms of which the subscribers agreed with each other and 
 with the corporation to take the number of shares affixed to their 
 respective names, and to pay therefor $100 a share. Opposite 
 A.'s name was a certain number of shares. The whole number 
 of shares subscribed for exceeded $50,000. At a meeting called 
 for the purpose of organization, a committee was appointed to re- 
 port the names of the subscribers to the original capital stock of 
 $50,000. The committee reported a list of names not including 
 A.'s. The meeting then voted to increase the stock to $100,000, 
 and that all the subscribers be admitted to the company with the 
 rights and privileges of stockholders under the agreement. A. 
 subsequently paid three assessments on his stock. It was held 
 that an action against him on the original paper, for a subsequent 
 assessment, could not be maintained, even if he knew of these 
 votes before paying his assessments. 
 
 Sec. to. Conditional subscriptions.— Conditions also, affecting 
 the liability of subscribers, may, of course, be expressly provided 
 
 1 Blair v. Rutherford, 31 Tex. 465 ^ Katama Land Co. f. Jernegan, 126 
 (1868) ; Coram, v. West Chester R. Co . Mass. 155. 
 3 Grant's Cas. 200 ; Mitchell v. Rome 
 R. Co., 17 Ga. 574.
 
 Members — Stockholdees and Stock. 121 
 
 for in the contract ; and unless tliej violate the fundamental law 
 of the corporation, or are manifestly fraudulent, or must result in 
 the prejudice of innocent parties, they will be upheld. Thus, 
 where a subscription was made to the capital stock of a corpora- 
 tion upon the express condition that the company should not be 
 organized, or should not enter upon the object of its organization, 
 until a certain amount of its capital stock should be subscribed for, 
 the supreme court of Maine held that such a condition was a con- 
 dition precedent, and that the company was not authorized to en- 
 force the collection of such a subscription until the conditions 
 were complied with by the company.' And where, on the organi- 
 zation of a corporation, the number of shares of the capital stock 
 and the sum to be j)aid on each are fixed by vote, and inserted in 
 the agreement of subscription, the organization is not bound to 
 proceed, and the subscribers may refuse to pay any part of their 
 subscriptions until the requisite number of shares are subscribed 
 for, as fixed by vote." 
 
 And where stock was subscribed for on condition that the citi- 
 zens of a certain town should take a certain amount of stock, it 
 was held that no assessment could be properly made on the sub- 
 scriber until the condition was complied with.' When the con- 
 dition imposed is, that a certain number of shares shall be sub- 
 scribed for, it is not competent for the subscriber to show that the 
 number has not been subscribed for by persons pecuniarily re- 
 sponsible, or that the subscribers are insolvent, unless it appears 
 that the corporation has acted in bad faith.* 
 
 ' Penobscot, etc. , R. Co. v. Dunn, private arrangements with subscribers 
 
 39 Me. 589; Chamberlain v. Ashta- giving tliem peculiar advantages over 
 
 bula, etc., E. R. Co., 15 Ohio St. 225 ; others, would be null and void. Rob- 
 
 Ashtabula, etc., R. R. Co. v. Smith, inson v. P. & C. R. Co., 33 Penn. St. 
 
 id. 328. 334 ; Bavington v. P. & S. R. Co., 34 
 
 ^ Cabot, etc, Bridge Co. v. Chapin, id. 3^8; New Albany, etc., R. Co. v. 
 
 6 Cash. 50. Fields, 10 Ind. 187 ; Downie v. White, 
 
 ^Ticonic Water Power Co. v. Lang, 12 Wis. 170 ; White Mountains R. Co. 
 
 68 Me. 480. v. Eastman, 34 N. H. 124; Mann v. 
 
 * Penobscot R. Co. v. White, 41 Me. Cooke, 20 Conn. 178 ; Mann v. Currie, 
 
 512 ; Salem Mill-dam Co. v. Ropes, 9 2 Barb. 294. 
 Pick. 187. But Mr. Redfield observes :" Where 
 
 If the corporation acts in good subscriptions are made under an agree- 
 
 faith and parties are apparently able meut tbat they are not to be binding 
 
 to pay, and they finally fail and are unless a specified sum is subscribed, it 
 
 unable to pay, this will not render the is essential that there should be no 
 
 organization illegal. Id.; Penobscot conditions as to the liability of any of 
 
 R. Co. V. Dummer, 40 Me. 172. But the subscribers not applicable to all. 
 
 16
 
 ]22 Pkivate Corporations. 
 
 Sec. Y1. Company may accept payment in labor, etc.— I^J an act 01 
 the legislature of Pennsylvania, conmiissioners were apppointed 
 to receive subscriptions to stock, for the purpose of constructing a 
 railroad ; and it was provided, that no subscription should be valid 
 unless $5 should be paid on each and every share at the time of 
 the subscription ; that when a certain number of shares should be 
 subscribed for, and the $.5 paid on each, the same should be cer- 
 tified to the governor, who should thereupon issue letters incor- 
 porating the subscribers andtliose who might thereafter subscribe. 
 The letters wore issued and the company organized. It was held 
 that a condition annexed to a subscription that it should be bind- 
 ing only when a cei'tain amount of stock has been subscribed for 
 was valid, and that a party subscribing on that condition could not 
 be held liable until it was shown that the condition had been com- 
 plied with, and that the installments were, subsequently, called in 
 before suit brought ; but that the company had a right to accept 
 payment for stock in labor or materials or damages, or any other 
 liability of the company, provided the transaction was bona fide} 
 But it has been held in North Carolina that a corporation can take 
 nothing but money in payment for stock subscribed tor, unless 
 the charter so provides,'* and, in any event, it would seem that 
 the right to accept any thing but money must legally depend 
 upon the object and purposes for which the corporation is foi-med, 
 and upon the circumstance whether it can be hona fide regarded 
 as an equivalent for money. 
 
 Confidential subpcriptions, made for New York Exch. Co. v. De Wolf, 31 
 
 the purpose of making up tlie required N. Y. 273. 
 
 sum, are a fraud upon the other sub- Wliere there is a subscription, upon 
 scribers, and should not be treated as the condition that no calls shall be 
 valid subscriptions. Where, by de- made, until work should be com- 
 ducting such confidential subscrip- menced upon a particular section of 
 tions, the required sum is not sub- the line, and the subscriber gave his 
 scribed, the contract of subscription note for the amount on the false rep- 
 does not become operative so as to bind resentatiou of the agents of the com- 
 the subscribers. Parol evidence is pauy that the work had been com- 
 admissible to show that certain of the menced, it was held that the company 
 subscriptions were confidential in could not recover upon the note. Tay- 
 character, and, therefore, fraudulent." lor v. Fletcher, 15 lud. 80. 
 
 ' Philadelphia, etc., R. Co. v. Hick- in materials, it becomes payable in 
 
 man, 28 Penn. St. 318. See, also, Vaw- money, unless the materials are fur- 
 
 ter V. Ohio, etc, R. Co., 14 Ind. 174. nished on reasonable demand. Hay- 
 
 '^ Neuse River Nav. Co. v. Cominis- wood, etc., Plankroad Co. v. Bryan, 6 
 
 sioners of Newbern, 7 Jones' L. 275, id. 83. 
 But where a subscription is payable
 
 Members — Stockholders and Stock. 123 
 
 Sec. Y2. The conditions may be waived.— Where, liowever, there 
 is a conditional subscription wliich is vaHd, subscribers may, by 
 their acts, waive tlie same, and tliereby become liable as though 
 no condition had been imposed upon the company. Thus, where 
 there was a condition in a subscription to the capital stock of a 
 corporation that other stock to a given amount should be taken, it 
 was held that this was waived by the conduct of the party, in pay- 
 ing the first installment on the subscription, voting the whole 
 stock at an election for officers, and acting as an officer of the cor- 
 poration.' So, where a person who made a subscription of land 
 to the stock of a railroad company, on a condition precedent, it 
 was held that he waived such condition by delivering an absolute 
 deed of the land to the company, and receiving his stock.' 
 
 And where the subscribers to the stock of a railroad gave their 
 notes for the amounts of their suljscriptions, paj'able when the 
 road should be completed ; but were subsequently induced to take 
 np these conditional notes and give new ones, to enable the com- 
 pany to carry out acontractfor the completion of the road, payable 
 in four years, within which time it was confidently and honestly 
 stated and believed by the officers, at the time, that the road would 
 be completed, it was held that the subscribers were liable upon 
 the new notes, although the road was abandoned before any 
 thing was done upon it, and the road never completed.' So, 
 where a person participated in the proceedings creating a corpo- 
 ration, and to increase its stock and for making calls on the stock 
 subscriptions, both as stockholder and director; in a suit against 
 him to compel payment of his installment due and payable under 
 such calls, it was held that he was estopped from denying the 
 validity of the proceedings.^ 
 
 Sec. 73. When the condition is void,— Cor]iorations organized 
 under ^le act of the leo;islatnre of Pennsylvania, of February 19, 
 1849, could receive no conditional subscriptions; and a subscrip- 
 tion made to the commissioners under the act, conditional on the 
 
 ' Dayton, etc., Railway Co. v. Hatch, ^ Poiir Mile Vallev R. Co. v. Bailey, 
 
 IDis. (0.)84. See, also, Garlin^ V. 18 Ohio St. 208. 
 
 Baechtel, 41 Md. 305; Ossipee Manf. ''Kansas City Hotel v. Harris, 51 
 
 Co. V. Canney, 54 N. H. 295. Mo. 4G4. 
 
 'Parks V. Evansville, etc., K. Co., 
 23Iud. 567.
 
 124: Pkivate Corporations. 
 
 location of tlio road ou a special route, was lield to be void so far 
 as related to the condition, and was treated as an unqualified sub- 
 scription.' But where the contract with the subscriber contained 
 a condition tliat interest on sums assessed and paid in by sub- 
 scribers should be allowed him, from the time of payment until 
 the road should be put in operation, it was held that such a con- 
 dition did not avoid the subscription," and, generally, it may be 
 said that, unless prohibited by the charter or general law, a 
 subscription may be made conditional. Thus, a subscription to 
 the stock of a railroad company that the subscriber will take a 
 certain number of shares of the road, if it is located on a specified 
 line, is valid," and, upon a substantial performance of the condi- 
 tion, the subscription becomes enforceable. Thus, where a sub- 
 scription was given for a certain number of shares in a railroad 
 company, provided the road was located on a given route, and a 
 freight-house and depot located at a given point, it was held that 
 the subscription became enforceable after the road was perma- 
 nently located according to the terms proposed, and that the pro- 
 vision in relation to the erection of the buildings was not a con- 
 dition precedent to the right to collect the subscription, but a 
 mere stipulation, the performance of which was not necessary to 
 fix the riglit of the company to recover the subscription.* The 
 fact that a condition is annexed to the subscription will not pre- 
 vent a recovery, unless it is a condition precedent. Thus, a per- 
 son subscribed for shares in the stock of a railroad company' on 
 the express condition that the company should locate and con- 
 struct their raih-oad along a specified route, and, having paid one 
 installment and part of the second, delayed the payment of the 
 balance as the calls were made, until tlie company, as the road 
 
 ' Pittsburgli, etc., R. Co. v. Biggar, 'Martin v. Pensacola, etc., R. R. 
 
 34 Penn. St. 455. See, also, Erie, etc., Co., 8 Fla. 370; Evansville, etc., R. 
 
 P. R Co. V. Brown, 25 id. 156; Phil- R. Co. v. Sheaver, 10 lud. 244. And 
 
 adelphia, etc., R. Co. v. Hickman, 28 the subscription becomes payable only 
 
 id. 318 ; Bavington v. Pittsburgh, etc., upon a substantial compliance with 
 
 R. Co., 34 id. 358; Bedford R. Co. v. the condition. Chapman v. Mad 
 
 Bowser, 48 id. 29. River, etc., R. R. Co., 6 Ohio St. 119 ; 
 
 '^Rutlaijd, etc., R. Co. v. Thrall, 35 Jewett v. Lawrenceburgh, etc., R. R. 
 
 Vt. 536. The subscription cannot be Co., 10 Ind. 539. 
 
 rescinded so as to affect the rights of ''Chamberlain v. Painesville, etc., 
 
 innocent and bona fide creditors, while R. R. ('o., 15 Ohio St. 325. 
 the corporation is insolvent. Putnam 
 V. New Albany, 4 Biss. 365 (1869).
 
 Members — Stockholders and Stock. 125 
 
 was constructed along tlie route mentioned, suspended operations ; 
 after which payment was refused on the ground that though the 
 road had been located by the company, they had not constructed 
 it according to the condition in the subscription. In an action 
 for the subscriptions, it was held that the promise of subscription 
 being precedent to that of construction upon the part of the com- 
 pany, the defendant could not insist upon performance by the 
 railroad company while he refused performance on his part ; and 
 that the road, having been located as stipulated, and completed so 
 far as the means of the company would allow, it was a compliance 
 with the condition, and that the plaintiffs were entitled to re- 
 cover.^ 
 
 Sec. 74. Conditions which will avoid the whole contract. — It is 
 evident that there may be conditional subscriptions, which could 
 not be justl}'^ enforced against the subscriber without a compliance 
 with the precedent conditions for which he has stipulated, and 
 when the conditions could not be enforced Mnthout great injustice 
 to the company and others. Contracts of this character would 
 be against public policy and entirely void. Thus, in an action 
 by a plankroad company against a subscriber to the stock of the 
 corporation, the facts were as follows: The plaintiff was duly 
 incorporated under the general laws of New York, providing for 
 incorporation of turnpike and plankroad companies;^ and its 
 articles of association thereunder were duly filed. 
 
 One ai-ticle provided as follows : " For the purpose contem- 
 plated by these articles, the undersigned have severally subscribed 
 for the number of shares of the ca]3ital stock of this association 
 placed opposite their respective signatures hereto, and they sever- 
 ally agree, to and with each other, to pay to the said Fort Edward 
 and Fort Miller Plankroad Company their respective subscrip- 
 tions for said capital stock, whenever called for by said directors 
 or their successors in office." 
 
 The defendant did not subscribe the articles ; but subscribed 
 an instrument, in writing, which, after reciting that at a meeting 
 of the directors of the company, it was resolved that the directors 
 
 1 Miller v. P & 0. R. R. Co. , 40 Penn. '^ Act of May 7, 1850. 
 St. 287.
 
 126 Private Corporations. 
 
 adopt and establish a terminus of tlieir road, some convenient 
 point at or near Saratoga Bridge, commonly called Fort Miller 
 J^ridge, in the town of Greenwich, and that the directors cause to 
 he constructed the whole of their road, extending from Fort 
 Edward Village to said bridge, proceeded as follows : " Now we, 
 the undersigned, subscribe for the number of shares to the Fort 
 Edward and Fort Miller Plankroad Company, set opposite our 
 respective names, upon condition that the road is extended to 
 Fort Miller Bridge, so as to make that its southern termination." 
 This instrument was written in a book of the company, follow- 
 ing the record of its articles of association. The company was 
 oi'ganized to construct a road from the village of Fort Edward to 
 the village of Fort Miller, a distance of about eight miles, with 
 the privilege of extending it to a point near Saratoga Bridge, 
 about two and one-half miles further. The suit was brought for 
 the recovery of the defendant's subscription, the directors having 
 made the calls for the payment of the w'hole amount of subscrip- 
 tions to stock, and given the recpiisite notices thereof, pur- 
 suant to the act. Judo-ment was rendered against the defendant 
 for the amount of the subscription. On ajDpeal, Bowen, J., 
 said: "I think the instrument signed by the defendant is 
 wholly void by reason of tlie condition therein contained. It 
 was intended as a subscription to the capital stock of the company. 
 The act under which the plaintiff was incorporated prescribes the 
 manner of subscribing for the stock, and only authorizes absolute 
 subscriptions. This case cannot be distinguished in principle 
 from Butternuts, etc., Turnpike Co. v. North.^ It w^as held in 
 that case that to allow subscriptions to the stock of such a corpora- 
 tion to be received, conditioned that a particular location of the 
 proposed road should be adopted, would be contrary to public 
 polic}^ as by such means improper influences might be brought to 
 bear upon the question of the location. The object had in view 
 by the legislature, in authorizing the formation of these corpora- 
 tions, was the benefit to the public generally by providing for the 
 construction of safe and commodious highways, so located as to 
 be most convenient and beneficial. If the interest of the stock- 
 holders in such a company is allowed to control the question, 
 
 • 1 Hill, 518.
 
 Members — Stockholders and Stock. 127 
 
 such a location and such a termination of the proposed road will 
 almost invariably be adopted as will best subserve the public 
 interest, when, if in order to procure the requisite amount of 
 capital, subscriptions are allowed to be taken, conditioned that a 
 particular location or terminus be adopted, public convenience 
 will frequently be sacrificed to individual interest. By the articles 
 of association of this compau)^ their road was to be constructed 
 from Fort Edward to Fort Miller, a distance of eight miles, with 
 the privilege of extending it to Saratoga Bridge, two and one-half 
 miles further, and a large majority of the stockholders became 
 such by subscribing the articles which left it optional with the 
 directors whether the road should be extended. These stock- 
 holders had the right not only to expect but to require that it 
 should not be extended, unless the interest of the company would 
 be thereby promoted ; but by receiving these conditional sub- 
 scriptions the directors were obliged to extend the road, although 
 every dollar expended for that purpose will be a total loss to the 
 corporation, and none be benefited thereby except those at whose 
 instance it was done." ' 
 
 Sec. 75. Conditional subscriptions continued.— In other cases of a 
 similar character the courts have held conditional subscriptions, 
 where not expressly pi'ohibited by law, in the nature of a propo- 
 sition to the company, and not binding as a contract, until ac- 
 cepted. Thus, when a subscription was made for stock payable 
 in certain land at a specific price, and conditioned that in case the 
 company declined to take the land at the j)rice named the sub- 
 scription should be void, it was held that the subscription was a 
 mere proposition, and until accepted by the company was not 
 binding upon the subscriber, and that the acceptance could be 
 made by the directors or other authorized agents." If subscrip- 
 tions to the stock of a corporation, organized to construct a road 
 from one place to another, are made conditional upon the route 
 
 ' Fort Edward, etc., Co. v. Payne, 15 '^Junction, etc., R. Co. v. Reeve, 15 
 
 N. Y. 583. See, also, Middlesex Turn Ind. 236. See, also, Bedford R. Co. v. 
 
 pike Corp. v. Swau, 10 Mass. 38-4 ; Bowser, 48 Penn. St. 29. 
 
 Same v. Locke, 8 id. 268 ; La Grauije, When accepted under such circum- 
 
 etc. , Plank R. Co. v. Mays, 29 Mo. stances they become absolute. See 
 
 64; Troy & Boston R. Co. v. Tibbits, Chamberlain v. Painesville, etc., R. 
 
 18 Barb. 297. Co., 15 Ohio St. 225 ; Penobscot, etc., 
 
 R. Co. V. White. 41 Me. 512.
 
 128 Private Corporations. 
 
 or tcninni, if any cliauge is made by the act or procurement 
 of the company, the subscriptions are no longer binding,^ 
 The subscriptions, in tlie absence of other provisions as to time 
 and mode of payment, imj^ort a promise to pay on demand, 
 or in such manner as the directors might indicate, and on giving 
 the notice required by law." Where a person subscribed for stock 
 upon conditions other than those named in the articles of incor- 
 poration, and subsequently paid live per cent thereon, in an action 
 by the company to recover the balance of installments due on the 
 subscriptions^ and the defense was a want of mutuality, and that 
 the condition on which the subscription was made had not been 
 performed, it was held that there was such a concurrence in the 
 new conditions as to bind the parties, and to constitute sufficient 
 mutuality, so as to authorize a recovery.^ When the charter of a 
 company requires that certain things shall be done within a 
 certain time or the franchise shall be void, a subscription to the 
 stock ceases to be enforceable if tlie things are not done as re- 
 quired. Thus, where the charter of a hotel required that it should 
 be completed in four years, otherwise that the franchise sliould 
 be null and void, it was held that upon the failure to complete 
 the hotel within the time the subscribers were released from their 
 subscription,^ although the legislature subsequently extended the 
 
 ' Plankroad Co. v. Arndt, 31 Penn. to increase the same to $500,000. The 
 
 St. 317. See, also, McCully v. Railroad business of the company was to be 
 
 Co., 83 id. 25. managed by thirteen directors. Power 
 
 '^Dexter Plankroad Co. v. Millerd, also was given to borrow such sums of 
 
 3 Mich. 91, See, also, Goshen Turn- money as should be necessary for the 
 
 pike Co. V. Hurtiu, 9 Johns. 218. The purchase of lands and the construction 
 
 Duchess Manuf. Co. v. Davis, 14 id. of a suitable building. Section 7 of 
 
 238 ; Plankroad Co. v. Arndt, 31 Penn. the act provided that the corporation 
 
 St. 317. shall commence the work of construct- 
 
 ^ Nichols v. Burlington, etc., Plank- ing such hotel within two years from 
 
 road Co., 4 Green (Iowa), 42. the passage of the act, and complete 
 
 ■* Union Hotel Co. v. Hersee, 15 Hun, the same within four years from the 
 
 373. time of commencing the construction 
 
 The facts as well as the rule of law thereof ; it further provided in said 
 adopted in this case are stated in the section, " if this section be not corn- 
 opinion of NoxON, J., as follows ; plied with, the franchise hereby 
 
 " The plaintiff was incorporated un- granted shall become null and void," 
 der an act of the legislature, passed Section 8 provided the act should 
 
 April 12, 1871 (chap. 432), as a body cor- take effect immediately. The said 
 
 porate under the name of the " Union section 7 was amended by an act 
 
 Hotel Company," with power to pur- passed March 24, 1873 (chap. 123), as fol- 
 
 chase real and personal property for lows: " Section 7. Such corporation 
 
 the construction of a hotel in the city shall commence the work of construct- 
 
 of Buffalo. The capital stock was ing such hotel within five years from 
 
 $200,000, with power to the directors the passage of this act, and complete
 
 Members — Stockholders and Stock. 
 
 129 
 
 time for the completion of the liotel, the court holding that 
 this could not affect the defendant's subscription, because, being 
 in the nature of a contract, the legislature had no power to 
 alter it without his assent. But a subscriber may waive the con- 
 dition, and such waiver may be implied from the acts of the sub- 
 scribers, after the performance of the condition is no longer pos- 
 sible.^ A condition in a subscription to be operative, must be a 
 
 the same within four years from tlie 
 time of commeucing the construction 
 thereof. If tliis section be not com- 
 plied with, the franchise hereby 
 granted shall become null and void," 
 and it was provided in said amended 
 act that the same shall take eflFect im- 
 mediately By the provisions of the 
 original act the time to commence the 
 work of constructing such hotel ex- 
 pired April 13. 1873, and by the 
 amended act such time expired March 
 28, 1878. The proofs in the case show 
 that the lands were bought by con- 
 tract, upon which lands a hotel was to 
 be built, and that subsequently such 
 lands by authority and resolution of 
 the board of directors, passed February 
 2, 1876, was sold back to the parties 
 of whom the land was bought. The 
 president of the said hotel company 
 testified, on the trial had March 2, 
 1877 : " The project of building a hotel 
 haa been, I suppose, substantially 
 abandoned.' ' 
 
 The time designated for the com- 
 mencement of the construction of said 
 hotel having expired under the act of 
 1871, is an important question bearing 
 on the liability of the defendant in 
 this action. The action in this case 
 was commenced on the 9th of Feb- 
 ruary, 1876. At that time the period 
 in which the plaintiff was bound to 
 commence the work of construction of 
 the hotel had not expired under the 
 amended act, and at that time no pro- 
 vision of the acts operated to make the 
 franchise null and void. There is no 
 evidence before the court from which 
 it appears that the commencement of 
 the construction of a hotel by such 
 corporation had not been commenced 
 prior to March 24, 1878. If such proof 
 was before the court, under the au- 
 thority of a number of leading cases 
 
 in the court of appeals, judgment 
 could not be ordered by this court in 
 favor of the plaintiff and upon the ex- 
 ceptions sent to this court to be argued. 
 If the corporation is null and void, and 
 in the eyes of the law dead, any order 
 for judgment in favor of the plaiutifi 
 would be absolutely void. The point, 
 therefore, taken by the defendant, 
 that the plaintiff has no standing in 
 this court, is not available here. 
 
 Another question raised is upon the 
 liability of defendant upon his sub- 
 scription, upon which the action is 
 brought. The defendant signed a con- 
 ditional subscription to take $5,000 of 
 stock in the company. The condition 
 was that ,$200,000" should be sub- 
 scribed by the citizens of Buffalo. The 
 act under which the subscription was 
 made provided that the company 
 should commence the work of con- 
 structing the hotel within two years 
 from the passage of the act and com- 
 plete the same in five years from the 
 time of commencement of construction 
 thereof. The fact was admitted on 
 the trial, that plaintiff did not com- 
 mence the work of constructing the 
 hotel within two years, and did not 
 complete the same in four years from 
 the passage of the act of incorporation. 
 The defendant's subscription was upon 
 the terms and conditions provided by 
 the act and the subscription. 
 
 The amendment passed in 1873 in 
 no manner affected the dtifendant's 
 subscription, which was in the nature 
 of a contract which could not be 
 altered without his assent, and there 
 is no evidence of his assent. The mo- 
 tion for a nonsuit should have been 
 granted on the ground alone that the 
 construction of the hotel had not been 
 commenced within two years after the 
 passage of the act." 
 
 > Dayton, etc., R. R. Co. v. Hatch, 1 Dis. (Ohio) 84 ; O'Donald v. Evansville, 
 etc., E. R. Co., 14 Ind. 259. 
 
 17
 
 130 Private Coeporations. 
 
 part of the contract, and a mere parol condition is inoperative.^ 
 If the charter or general law provides that no conditional sub- 
 scriptions shall be made, a condition contained therein is inopera- 
 tive and the subscriber is liable thereon the same as though no 
 condition had been inserted therein."'' A change in the name of a 
 corporation by the legislature does not affect the validity of a 
 subscription, as it does not alter the terms of the contract,' but, if 
 one corporation, under power conferred by statute, sells its fran- 
 chise and stock subscription to another corporation, the latter 
 does not acquire the right to enforce the subscriptions.* 
 
 Sec. 76. Fraudulent subscriptions. — If a subscription is fraudu- 
 lently made, and by collusion between the subscriber and the 
 directors, the subscriber will not be permitted to take advantage 
 of such fraud to defeat the rights and interests of hona fide 
 holdei's of stock or creditors of the corporation.^ And in Pennsyl- 
 vania it has been held that a subscription is not only an under- 
 taking to the company, but Math all other subscribers ; and even 
 if fraudulent, and made for the purpose of inducing subscriptions, 
 it is to be enforced for the benefit of the others in interest, and 
 a subscriber will not be permitted to set up as a defense that the 
 subscription was a feigned and fraudulent one, and that the 
 company was a party to the fraud. ° AndAvhen a person sub- 
 scribes for stock, he cannot exonerate himself from liability to' the 
 company therefor, by assignment of the same to another with- 
 out the consent of the company, unless authorized so to do by 
 statute or the articles of association, and he is liable for all assess- 
 ments legally made on the shares," as the capital stock of a 
 corporation is treated as a trust fund for the benefit of its creditors, 
 
 'Cunningham v. Edgerfield, etc., * Graff v. Pittsburgh, etc., R. Co., 31 
 
 R. R. Co., 2 Head. (Tenn.) 28. Penn. St. 489. 
 
 '•'Pittsburgh, etc., R. R. Co. v. ■» Buckfield, etc., R. Co. v. Irish, 39 
 
 Biggar, 84 Penn. St. 455. Me. 44 ; Fay v. Lexington, etc., R. 
 
 3 Bucksport, etc., R. R. Co. v. Buck, Co., 2 Mete. (Ky ) 314 ; City Hotel v. 
 68 Me. 80. Dickinson, 6 Gray, 586 ; Buffalo, etc., 
 
 4 West End R. R. Co. v. Dameson, R. Co. v. Dudley, 14 N. Y. 336; 
 
 4 Mo App. 414. Dayton v. Borst, 31 id. 435 ; Northern 
 ^ Minor v. Mechanics' Bank, 1 Pet. R.'Co. v. Miller, 10 Barb. 260; Fort 
 
 46; Walker v. Devereaux, 4 Paige's Edward, etc., v. Payne, 17 id. 567; 
 
 Ch. 229 ; Selma, etc., R. Co. v. Tipton, Merrimac Mining Co. v. Levy, 54 
 
 5 Ala. 787 ; Hayne v". Beauchnmp, Penn. St. 227. 
 13 Miss. 515.
 
 Members — Stockholders and Stock. 
 
 131 
 
 and no transfer thereof can be made by whicli, as to tlie creditors 
 of the company, a stockholder can relieve himself from liability 
 for subscriptions to stock, and substitute that of another person.' 
 
 Sec. 77. Subscriptions in contemplation of incorporation A sub- 
 scription to articles of association, setting forth amount of capital 
 stock of the proposed company, and the number of shares, im- 
 ports that the subscriber will take and pay for the number of 
 shares set opposite his name.* xlnd if made in cojitemplation of 
 a charter of incorporation, it is valid and may be enforced by the 
 company after it has become incoi'porated.' It constitutes a legal 
 obligation of the subscriber, and can usually be enforced by action 
 or by forfeiture of the shares or both, depending upon the con- 
 stating instruments or articles of agreement.* If he subscribes 
 
 iRe Bacbaui, 13 Bankr. Reg. 223. 
 And iu case a corporation is being 
 ■wound up, and its affairs are in the 
 hands of a receiver, a sbareliolder, 
 who is also a creditor under another 
 contract, is not entitled to set off the 
 debt due to him thereon against calls 
 made by the receiver on his stock, nor 
 to set off anticipated dividends against 
 such calls. See Brice's Ultra Vires, 
 553 ; Ex parte Henry Winsor, 3 Story, 
 411 ; Cutler v. ^Middlesex Fac. Co., 
 14 Pick. 483 ; McLaren v. Pennington, 
 1 Paige, 102; Osgood v. Ogden, 4 
 Keyes, 70. 
 
 ^Rensselaer, etc., R. Co. v. Barton, 
 16 N. Y. 457. 
 
 "Hamilton, etc., Plankroad Co. v. 
 Rice, 7 Barb. 157; Tonica,etc.. R. Co. 
 V. McNeely, 21 111. 71 ; Johnson v. 
 tlwiug Uuiver., 35 id. 518. Unless 
 the subscriber expressly dissents be- 
 fore the incorporation is completed. 
 Gleaves v. Turnpike Co., 1 Sueed, 
 491 ; Dorris v. French, 6 T. & C. 581 ; 
 4 Huu, 292. 
 
 ^Battersball v. Davis, 13 Barb. 323. 
 See, also, Athol Music Assoc, v. Carey, 
 116 Mass. 471 ; Palmer v. Lawrence, 
 3 Saudf. 161, where DuER, J., said: 
 " The law must be considered settled, 
 that the obligation of actual payment 
 is created in all cases by subscription 
 to capital stock, unless the terms of 
 the subscription are such as to plainly 
 exclude it." Chester Glass Co. v. 
 Dewey, 16 Mass. 94 ; Spear v. Craw- 
 
 ford, 14 Wend. 20, where Suther- 
 land, J., observes : " The promise of 
 the defendant and the other sub- 
 scribers, although in form to take the 
 shares subscribed by them respect- 
 ively, is, undoubtedly (when taken in 
 connection with what precedes it, and 
 with the act of incorporation which is 
 there referred to and in part recited), 
 a promise not only to take the shares, 
 but to pay for them ; to take them 
 upon the terms and conditions set 
 forth iu the subscription paper." 
 
 And when shares are payable on a 
 call of the directors, they are also in 
 like manner payable on the call of a 
 duly appointed receiver. Sagory v. 
 Dubois, 3 Sandf. Ch. 466. 
 
 But in a recent case in Maine where 
 the subscribers simply agreed to take 
 the amount of shares set against their 
 respective names, it was construed as 
 imposing no personal obligation to 
 pay for the shares ; and that the con- 
 struction of the agreement was not 
 affected by a provision in the charter 
 of the corporation purporting to ren- 
 der tlie subscriber liable for the 
 balance remaining due after a sale of 
 his shares. Belfast, etc., R. Co. 
 v. Moore, 60 Me. 561 (1862); John- 
 son V. Wabash, etc., Co., 16 lud. 
 889 ; Kidwelly Canal Co. v. Raby, 2 
 Price, 93, in which Baron Richards 
 said : " If Raby [the defendant] had 
 not endeavored to withdraw, there 
 would have been no doubt of his
 
 132 Private Corporations. 
 
 for stock upon preliminary articles he may refuse to sign second 
 articles of association, when such are |)rovided for and re- 
 quired to be signed and recorded under the provisions of the 
 statutes for incorporation. But he cannot in any case with- 
 draw his subscription for stock without tlie consent of his co-sub- 
 scribers/ unless authorized so to do by tlie act of incorporation 
 or by the terms of the contract itself.^ 
 
 Sec. 78. Fraud in relation to subscription. — "When a bank was in- 
 corporated under a lawful charter in Connecticut, but the parties 
 who effected the organization fraudulently induced a person to 
 subscribe for a portion of the stock by representing to him that 
 his subscription would be merely nominal, and that he would not 
 be required to pay for the stock ; and the bank afterward issued 
 a large amount of bills but soon failed and went into the hands 
 of a receiver for the benefit of its creditors, in an action by the 
 receiver against the subscriber, it was held that he could not, as 
 a defense to the claim for the amount of the subscription, show 
 the fraud or misrepresentation under which he had been induced 
 to subscribe, as he and his associates constituted the bank, and he 
 
 liability ; then the question becomes And when under the New York act 
 whether he has in fact withdrawn, of 1850, it was required that the sub- 
 and I think he has not, iiiaaiimch as scriber should pay the directors ten 
 he could not do so without the consent per cent on the amount subscribed by 
 of all those with whom he had be- him at the time of subscribing, and 
 come engaged in the undertaking." that no subscription should be re- 
 See, also, Selma V. Tennessee R. Co., ceived without the payment of such 
 5 Ala. 786 ; Turnpike Co. v. Philips, sum, it was held in the court of ap- 
 2 Penr, & Watts, 184. peals of that state when ten per cent 
 Under the railroad law in New on the subscription was not paid at the 
 York, of 1848, a person could not ren- time of subscription, but forty per 
 der himself liable by subscribing a cent was afterward paid, that this 
 preliminary paper previous to the or- made the subscription a valid one. 
 ganization of the company, unless he Black River R. Co. v. Clarke, 25 N. 
 subsequently subscribed the articles Y. 208. 
 
 of association, or subscribed to the And when the subscriber gave his 
 
 capital stock in the books directed by note for the ten per cent instead of 
 
 statute to be opened after the corpo- paying the money, and the company 
 
 ration is formed. TroyR. Co. v. Tib- afterward received the money on the 
 
 bits, 18 Barb. 297. See, also, Pough- note, it was held that the subscriber 
 
 keepsie P. R. Co. v. Griffin, 24 N. Y. was liable as such. Ogdensburgh R. 
 
 150 ; Erie R. Co. v. Owen, 32 Barb. Co. v. Wolley, 1 Keyes, 118. But see 
 
 616; Lake Ontario R. Co. v. Mason, North Stafford Steele Co. v. Warth, 
 
 16N. Y. 451. L. R. Ex. 172. 
 
 ' Bordentown, etc., T. Co. v. Imlay, 4 N. J, L. 285.
 
 Members — Stockholdees and Stock. 
 
 133 
 
 was a party ^vitli them in the fraud of the bank on tlie i^ublic* 
 So, it has been held in lUinois, that stock subscribed for must be 
 paid, notwithstanding the giving of a note therefor was induced 
 by the misrepresentations of the agents of the company as to the 
 amount of stock then subscribed and the time witliin which the 
 road would be completed.^ And when a secret agreement was 
 entered into between the directors of a i-ailroad company and a 
 subscriber, that he might within a specified time reduce the 
 number of shares subscribed for, the subscription being made to 
 appear honafide for the purpose of inducing others to subscribe ; 
 in an action by the corporation for such subscription, it M'as held 
 that the full amount might be" recovered, as the stipulation to 
 reduce the amount was a fraud on the other subscribers." But 
 the general rule is that subscriptions obtained b}"- fraud cannot be 
 enforced against the subscribers, and that although the rule of 
 
 1 Litchfield Bank v. Church, 29 
 Conn. 137; Southern Plankroad Co. 
 V. Hixon 5 Ind. 166. 
 
 ^ Goodrich v. Reynolds, 31 111. 490 ; 
 Johnson v. Crawfordsville, etc., R. 
 Co., 11 Ind. 280 ; Andrews v. Ohio, 
 etc., R. Co., 14 id. 169; Hardy v. Mer- 
 riweather, id. 203; Thornburgh v. 
 Newcastle, etc., R. Co., id. 499 ; Dynes 
 V. Shaffer, 19 id. 165. But see Wert 
 V. Crawfordsville, etc., R. Co., id. 242. 
 
 » White Mt. R. Co. v. Eastman, 34 
 N. H. 124. See, also, Downie v. White, 
 12 Wis. 176 ; Crawford v. Pittsburg, 
 etc., R. Co., 32 Penn. St. 141 ; Robin- 
 sou V. Same, id. 334. When a charter 
 has been obtained by means of ficti- 
 tious subscriptions for part of the stock , 
 and a fraud has been committed on a 
 bona fide subscriber by which he has 
 sustained or might sustain injury, no 
 action can be maintained against him 
 by the corporation for the amount of 
 his subscription, unless such sub- 
 scriber has accepted the charter and 
 by his own acts has assisted in putting 
 it in operation ; in that case he cannot 
 avail himself of the fact that part of 
 the stock was fictitious. And if a 
 stock company lets off a part of its 
 subscribers and returns them their 
 money, other subscribers, not consent- 
 ing thereto, are discharged from all 
 liability growing out of their original 
 subscription. If a person is induced 
 to subscribe for stock by means of rep- 
 
 resentations which are not fulfilled, it 
 has been held that he is not bound to 
 take the stock. See, relating to the 
 effect of fictitious stock, Center T. 
 Co. V. McConahy, 16 S. & R. 140; 
 Thorpe v. Hughes, 3 Mylne & Cr. 742 ; 
 Crump V. U. S. Mining Co., 7 Gratt. 
 352; Southern P. R. Co. v. Hixon, 5 
 Ind. 166. But when a subscriber dis- 
 covers such frauds he must renounce 
 all benefits derived from his subscrip- 
 tion or he will be responsible. De- 
 posit Ass. Co. V. Ayscough, 6 E. & B 
 761. See, also. County of Crawford 
 V. Pittsburgh R. Co., 32 Penn. St. 141 
 Pittsburgh, etc., R. Co. v. Graham,36 
 id. 77; Same v. Stewart, 41 id. 44 
 Connecticut R. Co. v. Baxter, 32 Vt 
 805 ; Central R. Co. v. Kisch, L. R., 2 H 
 L. 99 ; Smith's case, L.,R., 2 Ch. 604 ; 
 Heyman v. European R. Co., L. R., 4 
 Eq. 154. 
 
 If the prospectus contains a ma- 
 terial misrepresentation or misstate- 
 ment of facts, the subscription induced 
 thereby may be rescinded. Smith v. 
 Reese Riv. Co., L. R., 2 Eq. 264 ; Ross 
 v. Estates Investment Co., L. R., 3 Eq. 
 122 ; L. R., 3 Ch. 682 ; Waterhouse v. 
 Jamieson, L. R., 2 H. L. Sc. 29. But 
 the misrepresentation must be in ref- 
 erence to a material matter. Lenton 
 V. McNeil L. R., Eq. 352 ; Hallows v. 
 Ternie, L. R., 3 Ch. 467; Jackson v. 
 Turquand, L. R., 4 H. L. 305.
 
 134 
 
 Pkivate Corporations. 
 
 evidence is tliat parol representations cannot be permitted to vary 
 the terms of a written agreement, still this rule will not exclude 
 parol evidence to show such fraud as would be allowed to vitiate 
 any other contract.' In order to relieve himself from liability 
 upon his subscription, not only must actual fraud be shown, but 
 he must also show tliat he acted upon the false statements of the 
 agents of the corporation in respect to matters of fact material to 
 the value of the enterprise, and not upon the mere speculation of 
 the directors, or upon his own exaggerated ideas of the prospective 
 success and value of tlie business.^ The rule that parol evidence 
 
 1 See Blodgett v. Morrill, 20 Vt. 509; 
 Coun., etc., R. Co. v. Bailey, 24 id. 465; 
 Same v Baxter, 33 id. 805 ; Burrows v. 
 Smith, 10 N. Y. 550 ; New York Ex- 
 change Co. V. De Wolf, 31 id. 273 ; S. 
 C, 5 Bosw. 593 ; Coil v. Pittsburgh 
 Female Coll., 40 Penn. St. 439 ; Ken- 
 nebec R. Co. V. Waters, 34 Me. 369 ; 
 Piscataqua Ferry Co. v. Jones, 39 N. 
 H. 491 ; Martin v. Pensacola Coal Co., 
 8 Fla. 370 ; Rives v. Railroad Co., 30 
 Ala. 93 ; Smith v. Same, id. 650 ; Hes- 
 ter V. Memphis R. Co., 32 Miss. 378 ; 
 Walker v. Mobile R. Co., 34 id. 245 ; 
 Ellison V. Same, 36 id. 572 ; Henderson 
 V. Railroad Co., 17 Tex. 560; La 
 Grange R. Co. v. Mays, 29 Mo. 64. 
 The general rule of evidence is that 
 parol statements and representations, 
 or agreements made at the time of the 
 execution of a written contract, and 
 inconsistent with the written terms of 
 the same, are inadmissible and void, 
 unless fraud is shown. Thornburgh 
 V. Newcastle R. Co., 14 Ind. 499: 
 Johnson v. Crawfordsville R. Co.. 11 
 id. 280 ; Hardy v. Merriweather, 14 
 id. 203; Kennebec R. Co. v. Waters, 
 34 Me. 369 ; Wight v. Shelbv R. Co., 
 16 B. Monr. 4 , New York Exch. Co. 
 V. De Wolf, 5 Bosw. 593 ; Mississippi 
 R. Co. V. Cross, 29 Ark. 443; Smith 
 V. Plankroad Co.. 30 Ala. 650. 
 
 Oral evidence is inadmissible to vary 
 the terms of a subscription to the 
 stock of a corporation, unless it tends 
 to show fraud or mistake. But where 
 the subscriber is really misled, and in- 
 duced to subscribe for stock upon the 
 representation of a state of facts in re- 
 gard to essential matters made by 
 those who take up the subscription, 
 and in good faith and upon proper in- 
 quiry and the exercise of reasonable 
 
 discretion, believed by the subscriber, 
 and which constitutes the prevailing 
 motive and consideration for the sub- 
 scription, and which proves false, it 
 would seem that the contract of sub- 
 scription should be held void, both in 
 law and equity. Wight v. Shelby R. 
 Co.. IfrB. Monr. 5 ; Blodgett v. Morrill, 
 20 Vt. 509 ; Kennebec & Port. R. Co. 
 V. Waters, 34 Me. 369 ; Henderson v. 
 Railway Co., 17 Tex. 500. But if the 
 location of a railroad is different from 
 that provided in the charter, it has 
 been held that the subscriber may 
 lose his right to object thereto, and to 
 paying his subscription on the ground, 
 unless he resorts to mandamus or in- 
 junction at the earliest convenient 
 time, looker, ex parte, 18 Ark. 338; 
 Brownlee v. Ohio, Ind. & 111. R. Co., 
 
 18 Ind. 68. 
 
 2 Jennings v. Broughton, 22 L. J. (N. 
 S.) Ch. 585. A false statement by an 
 agent of the company soliciting stock 
 subscriptions that the company al- 
 ready had enough subscriptions to 
 finish the road in a specified time, and 
 sought others from persons living on 
 the line of the road only as evidence 
 of friendliness, was held to bear 
 merely on matters of expectation and 
 opinion, and not to suffice to void the 
 subscription. Bish v. Bradford, 17 
 Ind. 490 ; Brownlee v. Ohio, etc., R. 
 R. Co., 18 id. 68 ; Parker v. Thomas, 
 
 19 id. 213 ; Hardy v. Merriweather, 14 
 id. 203. 
 
 The defendant, sued on his subscrip- 
 tion for stock in a turnpike company, 
 answered that he was illiterate and 
 could not read, and did not hear the 
 articles of association read ; but a 
 party to them, interested in obtaining 
 subscriptions, induced him to sub-
 
 Members — Stockholdees and Stock. 
 
 135 
 
 cannot be admitted to alter or deny tlie terms of a written con- 
 tract has no application where it is merely sought to establish 
 substantial fraud inducing the party to enter into the contract.^ 
 
 scribe by his false representation that 
 the articles did not require a payment 
 of subscription until $20,000 had been 
 pubscribed. It was held that these 
 avermeuls set up a sufficient ground 
 of defense. Wert v. ('rawfordsville, 
 etc., Co., 19 Ind. 243. But parol 
 declarations made by otBcers of a 
 company on public occasions, if ad- 
 missible at all to invalidate a subscrip- 
 tion for stock, cannot avail a sub- 
 scriber who does not show that such 
 declarations amounted to fraud on the 
 part of the company inducing error on 
 Ms own part token lie subscribed. Vicks- 
 burgh Railroad v. McKean, 12 La. 
 Ann. 688. 
 
 Representations as to the value of 
 the land given to the company by the 
 United States, and as to the probable 
 cost and profit of the road, and the 
 nieaus of the company, are but the 
 opinions of the agent, which the sub- 
 scriber has no right to rely on, the 
 falsity of which is no ground for 
 avoiding the contract; Walker v. 
 Mobile, etc., R. R. (_'o., 34 Miss. 245; 
 and in the same case it was held that 
 a colorable subscription by a person 
 of influence, shown to the defendant to 
 induce him to subscribe, does not 
 avoid his subscription, unless, relying 
 on it, he was thereby induced to sub- 
 scribe. 
 
 Fraudulent representations by an 
 officer of a corporation at a public 
 meeting, in presence of a majority of 
 the directors, not in pursuance of any 
 authority from their board, will not 
 discharge a subscriber to stock. Buf- 
 falo, etc , R. R. Co. V. Dudley, 14 N. 
 Y. 336. 
 
 A fraudulent representation by an 
 agent to obtain subscriptions to the 
 stock of a company avoids the sub- 
 scription, but an unperformed promise 
 to obtain for the subscriber stock in 
 another company, or an honest mis- 
 take as to the probable expense of the 
 improvement, will not. Grossman v. 
 Penrose F, B. Co., 26 Peun. St. 69 
 
 When an agent of a corporation, for 
 the purpose of selling its stock, made 
 certain representations of the company 
 and its prospects, which subscribers 
 said were false and fraudulent, and 
 were beyond what was stated in the 
 prospectus, and reports of the com- 
 pany, it was held, in an action by the 
 company against a subscriber to re- 
 cover his subscription, that evidence 
 of the fraudulent and false representa- 
 tions of the agent were admissible on 
 the part of the defendant, and that it 
 was a question of fact for the jury 
 whether or not the subscriber, from 
 all tile circumstances in the case, was 
 deceived by the agent, and where a 
 corporation issued a prospectus and 
 reports of its condition for the pur- 
 pose of selling its stock, it was held 
 that if there were any false statements 
 contained in such proposals, as to ma- 
 terial facts, lohich misled purchasers to 
 their injury, and in which the pur- 
 chasers trusted to the agents of the 
 corporation, the contract of sale was 
 void, whether the corporation did this 
 knowingly or not. The same rule was 
 applied to the concealment of material 
 facts. Crump v. U. S. Mining Co., 7 
 Gratt. (Va.) 353. 
 
 A corporation is liable for false and 
 fraudulent material representations 
 made by its agents who are engaged 
 in soliciting stock subscription and 
 representations by such agents that 
 the company was in good condi- 
 tion and repute, earning on the com- 
 pleted portion of its road four and 
 one-half per cent on the entire cost of 
 the road, etc., etc., when it was a fact 
 known to these agents that the road 
 was on the verge of bankruptcy, with- 
 out credit, and its stock and bonds of 
 little value, was held sufficient ground 
 for the rescission of subscriptions 
 made on the strength of such repre- 
 sentations. Waldo V. Chicago, etc. , 
 R. R. Co., 14 Wis. 575. 
 
 'New Orh^ans, etc., R. R. Co. v, 
 Williams, 16 La Ann. 315 , Crump v. 
 United States Mining Co., 7 Gratt. 
 352 ; Henderson v R. R. Co., 17 Tex, 
 
 560 ; Rives v. Plankroad Co , 30 Ala. 
 93; Wert V. Crawfordville, etc., Co., 
 19 Ind. 243.
 
 136 Pkivate Corporations. 
 
 But in no case can a party be permitted to prove that certain 
 fraudulent representations or agreements were made which are 
 inconsistent with the tertns of the svhscrijption^ ' nor as to 
 the effect of the agreement, or what it contains,' as a party 
 is bound to know the contents of an instrument which he 
 signs, and its effect, and has no right to rely upon the repre- 
 sentations or judgment of the other party in that regard, and if 
 parol evidence was admissible to override an agreement upon 
 this ground, greater mischiefs would result than could possibly 
 ensue from holding a party up to strict liability where he has 
 been misled as to the effect of his contract by relying upon the 
 statement or judgment of the other party. In order to relieve a 
 party from liability on the ground of fraud, misrepresentations 
 as to matters which are not matters of judgment or opinion, as to 
 existing facts not affecting the terms of the contract itself, must 
 be shown, and it is not competent to show that the officers of the 
 company or the persons procuring the subscriptions represented 
 that the company would do certain things which it has not done 
 and did not intend to do," or as to the future prospects, and 
 value of the enterprise ' or as to the probable expenses of the 
 company.' Nor can a subscriber for stock be relieved from the 
 payment on the ground of a fraud to which he was a party,' nor 
 if he has been guilty of ladies in asserting the fraud.'' 
 
 Sec. 79. Rules depend upon the statutes or constating instruments. — 
 In regard to the liability of subscribers for subscriptions to capital 
 stock, it is difficult to lay down general or universal principles 
 applicable to all cases, as it usually depends upon the charter 
 or act, or articles of association ; and these vary in the same as well 
 as different states. In order to determine the various questions 
 
 1 Blodgett V. Morrill, 20 Vt. 509; 13 Ind. 477; Mississippi, etc., R. K. 
 Conn. & P. R. Co, v. Bailey, 24 id. Co. v. Cross, 20 Ark. 443. 
 
 465 ; Johnson v. Crawford ville R. R. "^ Vawter v. Ohio, etc., R. R. Co., 14 
 Co., 11 Ind. 280; Piscataqua Ferry Ind. 174; Salein Mill Dam Corpora- 
 Co. V. Jones, 39 N. H, 491 ; Smith tion v. Ropes, 9 Pick. 187. 
 V. Plankroad Co., 30 Ala. 650. ^ Walker v. Mobile, etc., R. R. Co., 
 
 2 Thornburgh v. Newcastle, etc., 34 Miss. 245 ; Ogilvie v. Knox Ins. Co., 
 R. B. Co. , 14 Ind. 499. 22 How. (U. S.) 380. 
 
 3 Martin v. Pensacola, etc., R. R. ^ Graff v. Pittsburgh, etc., R. R. Co., 
 Co., 8Fla, 370; Vicksburgh, etc., R. 31 Penn. St. 489; Southern Plank- 
 R, Co. V. McKean, 12 La. Ann. 638 ; road Co. v. Hixon, 5 Ind. 165 ; Litch- 
 Carlisle v. Evansville, etc., R. R. Co., field Bank v. Church, 29 Conn. 137. 
 
 "" Dynes v Shaffer, 19 Ind. 165.
 
 Members — Stockholders and Stock. * 137 
 
 relating to tlio subject which may arise, it is necessary to consult 
 the organic and fundamental laws of the institution ; and although 
 some illustration of rules of construction of the corporate con- 
 tract, and of the relations of the subscriber to the company, may 
 be obtained from adjudications in other states imder similar laws, 
 yet it frequently happens that the questions presented only occur 
 and are adjudicated in the state where the corporation is created.' 
 
 Sec. 80. Defense to subscription on other grounds. — It is a general 
 rule that a corporation seeking to recover a subscription must 
 show a strict compliance with the requirements of the laws under 
 which it was constituted, where a defense is made on the ground 
 of its failure in this respect.'' But in some cases a compliance 
 will be presumed, and in others it will be treated as waived by 
 the subscriber. Thus, the payment of installments on the stock 
 subscribed for would usually be considered, as we have noticed, 
 a waiver of the failure of stiict performance of a conditional sub- 
 scription and a recognition of the legal organization and existence 
 of the corporation by the subscriber, so as to enable the company 
 to recover the balance of the subscription.^ And -where a party 
 subscribed for stock in and assisted in organizing a plankroad 
 company, it was held that he could not avoid the payment of 
 the stock subscribed for on the ground of a failure of the com- 
 pany to strictly conform to the law in completing its organiza- 
 tion.* If a subscription to the stock of a railroad company is 
 made upon condition that the road shall be permanently located 
 over a certain route, if it is so located, the condition is met, and 
 the completion of the road is not a condition precedent to a right 
 to recover the subscription.* It is no defense to an action for an 
 assessment that a certificate has been issued to him, reciting that 
 it is " non-assessable," as that is merely a stipulation against as- 
 sessments after the subscription is paid.* Nor is a stockholder re- 
 leased from his subscription because the directors have purchased 
 from themselves or their friends, property for the use of the cor- 
 
 ' 1 Redf. on Rail., §32. Mo. 359; Lane v. Brainerd, 30 Conn. 
 
 2 Nelson v. Blakey, 47 Ind. 38. 5G5. 
 
 ^ Maltby v. North Western R. Co., ' Berryman v. Cincinnati Southern 
 
 IG Md. 422. Ry. Trustees, 14 Bush, 755. 
 
 ^ Central Plankroad v. Clemens, 16 « Upton v. Trebilcock 91 U. S. 45. 
 
 IS
 
 138 Private Corporations. 
 
 poration at exaggerated prices in fraud of tlie company.^ In tlie 
 case last cited, the defendant signed a paper, with others, whereby 
 he and they agreed to unite in tlie formation of a company for 
 the exchisive use and sale of a patent, called Noyce's patent for 
 preserving fruit, each agreeing to take a certain number of 
 shares. Afterward the defendant and nine others executed and 
 acknowledged tlie certificate of incorporation required by law. 
 The company, having failed to exercise its privileges within a year 
 after its incorpoi'ation, was dissolved, and a receiver was appointed, 
 and in action by him against the defendant to recover the amount 
 due upon his subscription, he defended upon the ground that the 
 directors, in fraud of the stockholders, purchased the patent at a 
 greatly exaggerated price ; also because he was not a stockholder, 
 and that the company was never legally incorporated. As to the 
 last two grounds of defense, the court held, according to the uni- 
 versal rule, that a corporation, when foi-med, may enforce pay- 
 ment of a subscription made hefore the corporation had a legal 
 existence.'* As to the defense that the defendant was released 
 because of the fraud of the directoi-s, the court, in denying the 
 validity of the defense, by Gilbert, J., said : " Among the de- 
 fenses pleaded, one was that some of the promoters of the com- 
 pany, who signed the certificate of incorporation and were named 
 therein as trustees, were intrusted with the duty of purchasing 
 the j)atent right, under which the business of the company was 
 conducted ; that they purchased it, in fact, of themselves and 
 their associates, for the corporation, for the price of $50,000, 
 whereas the real price was $16,000, and that the difference was 
 divided between them and their associates. This, if true, was a 
 gross fraud, and no proof of an actual intent to cheat, beside the 
 matter itself, in such a case, is requisite to invalidate the transac- 
 tion. The persons who undertook the duty of purchasing the 
 patent thereby became agents of the corporation for that pur- 
 pose. The same principles are applicable to them, as govern the 
 relation of trustee and cestui que trust. They were bound not 
 to do any thing which could place them in a position inconsistent 
 with the interest of their principal. Agents are not permitted to 
 
 ' Don-is V. French. 4 Hun, 292. 20 N. Y 161 , Burr v. Wilcox, 22 id. 
 
 2 Buffalo, etc , R. R. Co. v. Hatch, 551 ; Strong v. Wheaton, 38 Barb. 623.
 
 Members — Stockholders and Stock. 139 
 
 become secret vendors of property wliich tliey are authorized to 
 hny for their principals, or indeed to deal validly with their prin- 
 cipals in any case, except -where there is the most entire good 
 faith and full disclosure of all facts and circumstances, and an 
 absence of all undue influence, advantage or imposition. Nor 
 will an agent, employed to purchase, be permitted, unless by plain 
 and express consent of his principal, to make any profit out of 
 the transaction.^ If those who made the purchase for $16,000 
 were at the time acting as projectors or promoters of the com- 
 pany, they can make no profit at the company's expense by a pur- 
 chase and resale.' The injury occasioned by the alleged fraud, 
 however, was done to the corporation, and not to the defendant. 
 It constitutes no defense to an action at law, brought by the cor- 
 poration or its receiver, to recover his subscription to the capital 
 stock. The only mode of making it available to the defendant 
 would be by a bill in equity in which the persons accused of 
 fraud, as well as the coii^oration, would be necessary parties." 
 The fact that the directors have released some of the subscribers 
 from their subscription does not necessarily discharge others, 
 although circumstances may exist which wiU have that effect.^ 
 The failure of the agent of a corporation to deliver to it the 
 original subscription ])aper does not discharge those who sub- 
 scribed,^ nor that the commissionei'S appointed to receive sub- 
 scriptions failed to obey the provisions of the charter requiring 
 them to exact a certain per cent in cash from each subscriber,* nor 
 that a greater amount of subscriptions, in the aggregate, have 
 been received than is authorized,* or that the corporate property 
 has been seized on execution, or by the state.' 
 
 Sec. 81. Changes in charter. — Changes made in the charter by pro- 
 curement of a corporation and acted upon by it, that affect the 
 
 ' Story's Eq. Jur., ^ 315 ; Dally v. livan, 57 Ga. 240 , Macon, etc., R. R. 
 
 Woahaib, 3o Beav. 154 ; Bentley v. Co. v. Vasou, id. 314. 
 
 Craveu, 18 id. 75 ; Tyrrell v. Bank of ■* Pickering v. Templeton, 2 Mo. 
 
 London, 10 H. L. C'as. 2G ; Ueck v. App. 424. 
 
 Kantorowitz, 3 K. & J. 230. ^ Blair v. Rutherford, 81 Tex. 465; 
 
 ■^ Foss V. Ilarbottle, 2 Hare, 489; Garrett v. Dillsburgh, etc., R. R. Co. 
 
 Deusniore Oil Co. v. Densmore, 64 78 Penn. St. 465. 
 
 Penu. Si. 49; McElhennv's Appeal, 61 ^ Oler v. Baltimore, etc., R. R. Co., 
 
 id. 188. ■ 41 Md. 583. 
 
 •5 MempUis Branch R. R. Co. v. Sul- '' Mullins v. North, etc.. R. R. Co., 
 
 54 Qa. 580.
 
 140 Pkivate Corporations. 
 
 entire objects and purposes for which it was instituted, where 
 there is no provision in the fundamental law for so doing, would 
 release the subscribers to the original stock from liability for the 
 same.' 
 
 The rule may be said to be that, if the name and fundamental 
 purposes of a corporation are changed, under sucli circumstances 
 that it can be said to operate as a fraud upon the subscribers to 
 the original stock, they are thereby released from their subscrip- 
 tions. Thus by the supplement to an act incorporating an iron and 
 railroad company, tlie name of the company was changed, and 
 authority was given to purchase and cancel the original stock, and 
 the main purpose of the new company was to be that of a general 
 transportation company. It was held to be a fair question for 
 the jury, whether a combination to change the fundamental pur- 
 pose of the original act by the supplement, and divert the stock 
 of an original subscriber to this new end, was not a fraud upon 
 him ; and if they so found, that an action upon the original sub- 
 scription could not be sustained.^ But a change in the act of in- 
 corporation enlarging tlie powers of the company, but not author- 
 izing a material departure from the original design for which it 
 was instituted, would not release those who have subscribed for 
 the stock,' 
 
 A subscriber to the capital stock of a corporation agrees to be 
 subject to tlie reasonable rules and regulations which may from 
 time to time be adopted, and he cannot avoid payment of his 
 subscription because the charter has been amended on the applica- 
 tion of the directors, and the amendment accepted by them, 
 reducing the number of days' notice of the call for subscription.* 
 
 And where the law under which a company is instituted 
 authorizes consolidation of the corporation with others, the exer- 
 cise of this power will nut discharge a subscriber from his obliga- 
 
 ' Burrows v. Smith, 10 N. T. 550 ; * Southern Penn. Iron Co. v. Stevens, 
 
 McCray v. Junction R. Co., U Ind. 359 ; 87 Penn. St. 190. 
 
 Booe V. Same, 10 id. 93 ; Union Locks ^ Pacific R. v. Hughes, 23 Mo. 291. 
 
 & Canals v.Towne, 1 N.H. 44 ; Thomp- A change in the name of a corporation 
 
 son V. Guion, 5 Jones (S. Car.), 113 ; does not aflPect the validity of a stock 
 
 Marietta, etc., R. Co. v. Elliott, 10 subscription. BucksiJort, etc., II. R. 
 
 Ohio St. 57 ; Woodhouse v. Common- Co. v. Buck, 08 Me. SO. 
 
 vpealth Ins. Co., 54 Penn. St. 307. * Illinois River, etc., R. Co. v. Beers, 
 
 27 111. 185.
 
 Members — SxocKnoLDERS and Stock. 141 
 
 tion.^ So, a grant of additional powers to a corporation by an 
 amendment of the charter, if accepted, is not always sucli an 
 invasion of the contract of subscription as will relieve a subscriber 
 from his liability to pay.^ 
 
 A subscription to joint stock is not only an undertaking with 
 the company-, but also with all the other subscril^ers, and for this 
 reason, if for no other, a subscriber cannot be permitted to set up 
 a secret parol agreement with the agents of the company by which 
 he may be released from his subscriptions, while the other sub- 
 scribers continue to be bound,' nor can a person who is appointed 
 to receive subscriptions for stock, wlio has himself subscribed for 
 stock and taken the subscrijjtions of others, release himself from 
 liability thereon by erasing his name from the subscription lists 
 defore turning it over to the corporation/ 
 
 Sec. 82. Assessments and calls for payments. — Power is usually 
 vested in the corporation or the directors to make assessments and 
 calls on the subscribers for the capital stock subscribed by them. 
 The organic law of the corporation, or the by-laws, usually pro- 
 vide for the time and mode of payment of subscriptions, and that 
 a certain amount or per centum of the whole shall be paid at 
 stipulated times, or on a call therefor, made by the proper agents, 
 and on notice thereof given to the subscribers. These provisions 
 are also frequently incorporated in the written contract of sub- 
 scription, or made a part of it. 
 
 The rights and liabilities of subscribers must depend upon the 
 nature of the engagement, the express promise made, or the 
 statute or articles and by-laws of the corporation.^ 
 
 ' Bisli V. Johnson, 21 Ind. 299 ; Han- Mass. 495 ; Palmer v. Ridge Mining 
 
 na V. Cincinnati, etc., R. Co., 20 id. Co., 34 Penn. St. 288 ; Littleton Manu- 
 
 30. See on the subject of consolida- facturlng Co. v. Parker, 14 N.H. 543 ; 
 
 tion, post, chap. 16. Knowles v. Beatty, 1 McLean, 41 ; 
 
 ^ Gray v. Monongahela Nav. Co., 2 Small v. Herkimer Manufacturing Co. 
 
 W. & S. 156. See, also, Terre Haute, 2 Corast. 330; Worcester T. Co. v. 
 
 etc., R. Co. V. Earp, 21 HI. 291. But Willard, 5 Mass. 80 ; AndoverT. Co., 
 
 see Supervisors v. Mississippi R. Co., v. Gould, 6 id. 40 ; Atlantic Delaine 
 
 id. 338, where subscribers were held Co. v. Mason, 5 R. L 463 ; Odd Fel- 
 
 released. lows' Hall Co. v. Glazier, 5 Harr. 
 
 3 Miller V. Hanover Junction & S. R. (Del.) 172. But a statute authorizing 
 
 R. Co., 87 Penn. St. 95. a corporationtolevy assessments upon 
 
 ■* Clieraw, etc., R. R. Co. v. White, its stockholders who have paid the 
 
 10 S. C. 155. full amount of their subscriptions, 
 
 * See, also, Tippets v. Walker, 4 and who are not otherwise liable, is
 
 142 Privatp: Corporations. 
 
 SeO. 83. Promise to pay. Effect of. By whom calls should be made. 
 
 — A promise to pay, without liniitatioii or qiialilicatioii in the 
 manner referred to, would make the subscriber liable on demand 
 by the proper agent.' But, in order to render such a promise 
 binding, the call must be valid and made by the proper officials, 
 unless at the time it was made the stockholders knew of its in- 
 validity, or was an active participant in procuring it to be made,* 
 in M^hich case he is estopped from setting up an objection that 
 the call was not duly made. 
 
 On the subject of calls Mr. Brice observes : " Companies hav- 
 ing their capital divided into shares have, as incident thereto, the 
 powder to make calls. It is purely a question oi" internal arrange- 
 ment, in whom this power is vested. It will generally be in the 
 directors ; and where it is so, a call made by those who are actiially 
 directors and not yet removed will be good.^ But if made by 
 persons not having the j^ower,* or not acting at a board meeting 
 when tliis is required, the call will be simply nugatory.^ Calls 
 must in all respects, both as' to times and amounts, be made, 
 whether by the company in general meeting or the directors, in 
 
 unconstitutional. Ireland v. Pales- of the constating instruments, or the 
 tine T. Co., 19 Ohio St. 369 But if agreement as it must be interpreted 
 the legislature has a reserved right to by them. See Penobscot R. Co. v. 
 amend, alter or repeal a charter, it has Bartlett, 13 Gray, 244 ; Franklin Glass 
 been held that they could authorize a Co. v. Alexander, 2 N. H. 880 ; Port- 
 corporation to assess stockholders to land R. Co. v. Graham, 11 Mete. 1; 
 make up losses, although the original Kennebec R. Co. v. Kendall, SI Me. 
 charter provided that no stockholder 470. But an agreement to '• pay and 
 should be liable beyond the amount of fill" shares in a railroad company has 
 his shares for any loss sustained by been held to include an agreement to 
 the company, or any debt due on the pay all assessments legally made, 
 shares. Gardner v. Hope Ins. Co., 9 Buckfield R. Co. v. Irish, 39 Me. 44; 
 R. I. 194. Penobscot R. Co. v. Dunn, id. 587 ; Pe- 
 The liability may depend upon either uobscot R. Co. v. Dummer, 40 id. 172; 
 the express agreement entered into, Penobscot R. Co. v. Bartlett, 12 Gray, 
 or the agreement and the provisions 244. 
 
 ' Taunton Turnpike Co. v. Whiting, ^ Swansea Dock Co. v. Levien, 20 L. 
 
 10 Mass. 327 ; Worcester Turnpike J. Ex. 447. Compare Southami)ton 
 
 Co. V. Willard, 5 id. 80 ; Salem Mill Dock Co. v. Richards, 1 Man. & Gr. 
 
 Dam Co. V Ropes, an<e; Boston, Barre 448. See, also, York, etc., R. Co. v. 
 
 «& Gardner R. R. Co. v. Wellington, Ritchie, 40 Me. 425 ; Roberts v. Ohio, 
 
 113 Mass. 79; City Hotel v. Dickinson, etc., R. Co., .32 Miss. 373; Hays v. 
 
 6 Gray, 586. Pittsburgh, etc., R. Co. 38 Penn. St. 
 
 '•' Ossepee Manuf. Co. v. Canney, 54 81 ; Ross v Lafayette, etc., R. Co., G 
 
 N. H. 295; Macon, etc., R. R. Co. v. Ind. 297. 
 
 Vason, 57 Ga. 314; Kansas City Hotel ^ Howbeach Coal Co. v. Teague,5 H. 
 
 V. Harris, 51 Mo. 464; Willamette & N. 151. 
 
 Freighting Co. v. Stamns, 4 Oregon, ^ j^ji-^ y B^f]^ iq q_ b 290. 
 261.
 
 Members — - Stockholders and Stock. 143 
 
 such a way as to press equally upon all.^ And for the furtherance 
 of corporate purposes, i. e., iorthQho7ia Jide-purpo&ooi obtaining 
 capital, and not to enable any particular members to escape or to 
 lessen their liabilities.^ Of course, calls can be made only for pur- 
 poses not tdtra vires of the corporation. If it is intended to 
 devote the proceeds to other purposes, the call imposes no liability 
 either at law or in chancery upon a shareholder." '■* 
 
 Sec. 84. Diversion of capital to other purposes. — In this country it 
 
 has been universally held, that no majority of either the corpora- 
 tors or of the directors can divert the capital stock of a corpora- 
 tion to any purpose not consistent with the original purposes of 
 the organization ; that the business of the corporation cannot be 
 changed, abandoned or sold without the consent at least of all 
 the corporators ; that when a person takes stock in a corporation, 
 he enters into, at least, an implied contract with the company that 
 his interest in the corporation shall be subject to the direction 
 and control of its proper managers in the legitimate prosecution 
 of the business for which the corporation was created ; * but not 
 
 ^ Preston v. Grand Coll. Dock Co., Where an illegal contract or transac- 
 
 11 Sim. 827. tion is only partially performed, there 
 
 2 Richmond and Painter's cases, 4 is a locus penitentm, and either party 
 
 K. & J. 305; Gilbert's case, L. R., 5 may rescind the contract. Thus in a 
 
 Ch. 559. case where A. subscribed for shares in 
 
 ^ Green's Brice's Ultra Vires, 150. the capital stock of a corporation, in 
 
 See, also, South Eastern R. Co. v. Heb- increase of its stock, and the proceed- 
 
 ble white, 12 A. & E. 497 ; Shropshire, ing was illegal, because in contraven- 
 
 etc, R. Co. V. Anderson, 3 Ex. 401 ; tion of the statute under which the 
 
 Welland R. Co. v. Blake, 6 H. & N. corporation was organized, and he 
 
 410. paid a certain sum as an installment 
 
 * Kean v. Johnson, 1 Stockt. 401 ; on his subcription, on the first call. 
 Black V. Delaware, etc., R. Co., 7 C. E. and by the subscription he was to for- 
 Green, 130 ; S. C, 9 id. 455 ; Zabriskie feit all he had paid if he failed to pay 
 V. Hackensack, etc., R. Co., 3 id. 178 ; subsequent calls ; and he so failed, 
 Clearwater v. Meredith, 1 Wall. 25 ; and, after the corporation had de- 
 Hartford, etc., R. Co. v. Crosswell, 5 clared his rights to be forfeited, but 
 Hill, 383 ; McCray v. Junction, etc., before any scrip had been issued for 
 R. Co.. 9 Ind. 358; Winter v. Musco- the new stock, the corporation abau- 
 gee, etc., R. Co., 11 Ga. 438 ; Middle- doned the plan of increasing the stock, 
 sex T. Co. V. Locke, 8 Mass. 268 ; In an action by him against the corpo- 
 Sprague v. 111., etc., R. Co., 19 111. 177; ration to recover back the sum paid by 
 Union Locks Co. v. Towne, 1 N. H. 44: him as such installment, held, that he 
 Stevens V. Rutland, etc, R. Co., 29 was entitled to recover it. Knowlton 
 Vt. 545 ; Danbury, etc., R. Co. v. v. Congress Savings Co., 14 Blatchf. 
 Wilson, 22 Conn. 435; Hartford, etc., (U. S. C. C.) 364. The articles of a 
 R. Co. v. Croswell, 5 Hill, 383; Dela- manufacturing company created by the 
 ware, etc., R. Co. v. Irick.3 Zabr. 321 ; Pennsylvania act of 1865, p. 387, pro- 
 Kenosha, etc.R. Co. v. Marsh, 17 Wis. vided that the capital stock should be 
 13; Hays V. Railroad Co., 61 111. 422. $140,000, divided into two thousand
 
 14A 
 
 Private Cokporations. 
 
 that lie must submit to assessments or calls made to carry out 
 purposes foreign to its original objects. 
 
 A court of chancery will interfere to restrain calls that are already 
 made for an illegal object ; but will not when the application 
 of the proceeds is within the scope of the authority of the cor- 
 poration, or of those authorized to make the call.' But where 
 the purpose of those who make the call, and in whom this power 
 is vested, for legitimate purposes, is to devote the proceeds to 
 purposes not authorized by law, it imposes no obligation upon the 
 shareholders either in law or equity.'' The articles of incorpora- 
 tion frequently provide, that when the capital stock, or a certain 
 portion of it, shall have been subscribed, the directors shall have 
 authority to call in the capital stock at such times as to them may 
 seem best for the interest of the company, not exceeding a certain 
 
 eight hundred shares of $50 each, 
 and that the subscribers should 
 give their notes, without interest, 
 for the amounts respectively sub- 
 scribed, which notes should not be 
 liable, at any time, to an assessment 
 for more than fifty per cent of their 
 face, nor to an assessment of more 
 than twenty per cent within eighteen 
 months from the organization of the 
 company. It was held; 
 
 1. That the legal meaning of this 
 provision was that, with ultimate re- 
 lation to creditors, the capital was of 
 the full residuary amount of $140,- 
 000, but such calls for payments on the 
 stock as might from time to time be 
 made by the corporate authorities, in 
 the course of the active business of 
 the company, as a solvent concern, 
 should not exceed one-half of that 
 amount. Accordingly stockholders 
 were not absolved from liability to 
 creditors for so much of the whole 
 
 ),000 as might be required for the 
 payment of the debts. 
 
 2. That the operation of the articles 
 as to creditors could not be altered by 
 inserting a provision in the notes 
 given by the stockholders in payment 
 of the stock subscribed, that all divi- 
 dends should be credited proportion- 
 ately upon it until its full amount, 
 by reason of credits by assessments 
 and dividends, should be paid, when 
 the same should be returned, and in 
 lieu thereof a paid-up certificate of 
 stock be issued. 
 
 3. That on the bankruptcy of the 
 company, and the deficiency of other 
 assets exceeding the whole unpaid 
 amount of the $140,000, the stock- 
 holders were liable to the assignee in 
 bankruptcy for their respective pro- 
 portions of such unpaid amount. 
 Wilbur V. Glen Iron Works, 18 Bankr. 
 Reg. 178. 
 
 • See Green's Brice's Ultra Vires, 
 153, and notes. 
 
 2 Mann v. Prentz, 2 Sandf. Ch. 258; 
 Sagory v. Dubois, 3 id. 466 ; Everhart 
 V. West Chester, etc., R . Co., 28 Penn. St. 
 339 ; Graff v. Pittsburgh, etc., R. Co., 
 31 id. 489 ; Hays v. Pittsburgh, etc., R. 
 Co., 38 id. 81; Hartford, etc., R. Co. 
 V. Boorman, 13 Conn. 530. In Pennsyl- 
 vania a subscription conditioned for 
 the prosecution of the construction of 
 a railroad will be barred, unless the 
 
 condition be performed, and a call 
 made within six years. Pittsburgh, 
 etc., R. Co. V. Graham, 36 Penn. St. 
 77. But, where no time is fixed for 
 payment, and the same is left subject 
 to call, the statute only begins to run 
 from the date of each call. Pittsburgh, 
 etc., R. R. Co. V. Plummer, 37 Penn, 
 St. 413 ; Western R. R. Co. v. Avery, 
 64 N. C. 491 • Wood on Limitation of 
 Action, 326.
 
 Members — Stockholders and Stock. 145 
 
 per centum thereof, at or witliin a certain time, and to give notice 
 thereof, in some manner, to the subscribers. 
 
 The remedy, for a faihire to pay, may, by virtue of stipulations 
 or pi-ovisions of the constating instruments, be confined to a for- 
 feiture or sale of the shares of the delinquent ^Jarty, or the sum 
 paid thereon ; or it may be against the subscriber personally ; or, 
 the company, by virtue of the contract, may be entitled to either 
 or all of these remedies. If power is conferred on a corporation 
 to sell the stock of a subscriber in default of payment of his 
 subscription, it has been held that this is not exclusive of the 
 usual remedy by suit, to recover the amount due. ' 
 
 Sec. 85. Forfeiture of stock. — The general doctrine is, that a 
 subscriber cannot rescind his contract by suffering a forfeiture of 
 his stock for non-payment, or of the sums paid thereon, but that 
 the right of forfeiture belongs exclusively to the corporation, and 
 can only be exercised by it. It may usually waive the right to 
 forfeiture, and resort to the common-law remedy of action on the 
 express contract to pay the amount of the subscription, unless it 
 is otherwise provided. 
 
 If the remedy of strict forfeiture is pursued, this would usually 
 be considered satisfaction of the claim and a bar to a suit for the 
 amount due on the subscription contract. But whether it is a 
 bar or not would depend upon the provisions of the contract with 
 the company, or the provisions of the act or articles of incorpora- 
 tion. It might be a cumulative remedy in a larger sense than a 
 mere choice of remedies. Tlie fundamental law of the corpora- 
 tion might undoubtedly provide for a sale of stock of delinquent 
 subscribers to satisfy the unpaid dues.'' But unless the power to 
 
 'See post, cliap. 16, on Execution company -to sell the stock and pursue 
 
 and the Appointment of Receivers, the stockholder for the balance, or as 
 
 Goshen Turnpike Co. v. Huutin, 9 to whether it may do both, or only 
 
 Johns. 217 ; Troy & Rutland R. R. Co. sell the stock, depends upon the char- 
 
 V. Kerr, 17 Barb. (N. Y.) 581 ; North- ter or law under which it was formed, 
 
 em R. R. Co. v. Miller, 10 id. 260 ; Sparta v. Lebanon, etc., Turnpike 
 
 Selma & Tennessee R. R. Co. v. Tip- Co., 6 Humph, 241 ; Jay Bridge Corpo- 
 
 ton, 5 Ala. 787 ; Kennebec & Portland ration v. Woodman, 31 Me. 573 ; New 
 
 R. R. Co. V. Palmer, 34 Me. 366. The Bedford, etc., Co. v. Adams, 8 'Mass. 
 
 right of forfeiture belongs with the 138. 
 
 company. Turnpike Co. v. Imlay, 4 221^5^ y Alton, etc., R. Co., 13 111. 
 
 N. J, L. 285 , Sleevant v. Anglo-Cali- 514 ; Merrimac, etc., Co. v. Bagley, 14 
 
 fornia Gold Mining Co., 17 Jur. 257. Mich. 501. The remedy provided by 
 
 But the question as to the right of a the charter, of forfeiture of stock, is 
 
 19
 
 146 
 
 Private Coeporations. 
 
 pass a by-law providing for forfeiture of the stock, or the amount 
 paid by a subscriber thereon, m ease of a faihire to pay the full 
 amount subscribed, is confen-ed by the organic law of the corpora- 
 tion, such by-law would be of no effect.^ If the language of the 
 charter or organic law of the corporation provides that the com- 
 pany may sue, or declare the shares, or the sum paid thereon, for- 
 feited, the corporation may adopt either remedy, but cannot 
 adopt one and then resort to the other. And if there has been 
 a strict forfeiture without a sale of the shares, when such course 
 is authorized by the fundamental law of the corporation, courts 
 of equity will not interfere by granting relief against such for- 
 feiture.'' 
 
 But the general rule seems to be that the obligation of actual 
 payment is created by subscription to the capital stock, unless the 
 
 only cumulative, and the company 
 may elect to sue at law for the sub- 
 scription dues. Freeman v. Winches- 
 ter, 18 Miss. 577; Ogdensburgh, etc.. 
 R. Co. V. Frost, 21 Barb. 541 ; Herki- 
 mer, etc., Co. V. Small, 21 Wend. 273 ; 
 Troy, etc., Co. v. McChesney, id. 296. 
 But see Small v. Herkimer Manuf. 
 Co., 2 N. Y. 380. The option of for- 
 feiture is with the company. Railroad 
 Co. V. Rodrigues, 10 Rich. (S. C.)278; 
 Spear v. Crawford, 14" Wend. 20 ; Sa- 
 gory V. Dubois, 3 Sandf. Ch. 4G6 ; Tar 
 Riv. Nav. Co. V. Neal, 3 Hawks. 520 ; 
 Dutchess Cotton Mill Manuf. Co. v. 
 Davis, 14 Johns. 238 ; Beene v. 
 Cahawba, etc., R. Co., 3 Ala. 660; 
 Gratz V. Redd, 4 B. Monr. 178; Lon- 
 don, etc., R. Co. V. Graham, 1 A. & E. 
 270 ; Bristol, etc., R. Crf. v. Locke, id. 
 25 ; Gray v. Turnpike Co., 4 Rand. 
 (Va.) 578. 
 
 In England, under a statute which 
 authorizes the company to sue for un- 
 paid calls, and also authorizes the 
 company to forfeit stock on which 
 calls are unpaid, whether they have 
 sued or not, the remedies are not al- 
 ternative, and after commencing a suit 
 the company may declare a forifeiture 
 and also prosecute the action until the 
 claim is satisfied. Great Northern 
 
 Railw. Co. V. Kennedy, 4 Exch. 417. 
 The rule is otherwise where the two 
 powers are expressed in the alterna- 
 tive. Exch. 1848, Giles v. Hutt, 3 
 Exch. 18. By the private act of the 
 company, power was given to cancel 
 any forfeited shares where the market 
 was not sufficient to realize a sum 
 equal to the arrears of the calls, and 
 to issue so many new shares, and of 
 such nominal amount as they might 
 think fit, provided the capital to be 
 represented by such new shares should 
 not in the whole exceed the capital 
 represented by the unpaid portion of 
 the shares which should be so canceled. 
 It was held, that the remedy given 
 by this latter provision was cumula- 
 tive, and that an action for calls was 
 maintainable, notwithstanding that 
 the shares had been forfeited and can- 
 celed ; and that it was no answer to 
 the action, to say that new shares had 
 been issued and sold in lieu of the 
 canceled shares, which realized a sum 
 greater than the unpaid portion of the 
 canceled shares ; but that the original 
 shareholders would be entitled to 
 the benefit of payments made in re- 
 spect of the new shares. Inglis v. 
 Great Northern Railway Co., 16 Jur. 
 895. 
 
 ■ Small V. Herkimer Manuf. Co., 2 
 N. Y. 330 ; Matter of Long Island R. 
 Co., 19 Wend. 37. 
 
 '^ Story's Eq. Jur. , § 1325. See, also. 
 
 Sparks v. Proprietors, etc., 13 Ves. 
 433 ; Pendergast v. Turton, 1 Y. & C. 
 98.
 
 Members — Stockholders and Stock. 
 
 147 
 
 contrary is plainly expressed by the conditions of the subscriptions, 
 and that the right of forfeiture and sale of shares, on the failure 
 of payment of subscriptions, is not an exclusive but a cumulative 
 remedy, unless otherwise provided by the terms of the subscrip- 
 tion or the provisions of the constating instruments.^ But in 
 some cases it has been held that the corporation must elect which 
 remedy it will pursue, and that when it has a choice of remedies, 
 it cannot pursue both; and that where there is a right of forfeit- 
 ure, but no express power to use both remedies, the election of the 
 right of forfeiture precludes the right of ordinary action. Thus, 
 under a charter containing such provisions, where an action was 
 
 ' See Glass Co. v. Alexander, 3 N.H. 
 380 ; White Mountains R. Co. v. East- 
 man, 34 id. 147 ; Spear v. Crawford, 14 
 Wend. 20 ; Troy Turnpike Co. v. Mc- 
 Chesney,21 id. 296 ; Mann v. Currie,2 
 Barb. 294 ; Northern R. Co. v. Miller, 
 10 id. 260 ; Troy, etc., R. Co. v. Kerr, 
 
 17 id. 581 ; Troy, etc., R. Co. v. Tibbits, 
 
 18 id, 297; Ogdensburo;h, etc., R. Co. v. 
 Frost, 21 id. 541 ; Goshen T. Co. v. Hur- 
 
 .tin, 9 Johns. 217 ; Dutchess Cotton M. 
 Co. V. Davis, 14 id. 238 ; Harlem Canal 
 Co. V. Seixas, 2 Hill, 504 ; Delaware 
 Canal Co. v. Sansoni, 1 Binn. 70 ; Tar 
 Riv. Nav. Co. v. Neal. 3 Hawks, 520 ; 
 Greenville, etc., R. Co. v. Smith, 6 
 Rich. 91 ; Charlotte, etc., R. Co. v. 
 Blakely, 3 Strobli. 245 ; Selma, etc., R. 
 Co. V. Tipton, 5 Ala. 787 ; Gayle v. Ca- 
 hawba, etc., R. Co., 8 id. 586; Free- 
 man v. Winchester, 10 S. & M. 577 ; 
 Elysville Co. v. Okisko, 1 Md. Ch. 392; 
 Gratz v. Redd, 4 B. Monr. 178 ; Barnet 
 V. Alton, etc., R. Co., 13 111. 504; 
 Klein v. Alton, etc., R. Co., id. 514; 
 Ryder v. Same, 13 id. 516 ; Peoria, etc., 
 R. Co. V. Ettino-, 17 id. 429 ; Essex 
 Bridge Co. v. Tattle. 2 Vt. 393 ; City 
 Hotel Co. V. Dickinson, 6 Gray, 586 ; 
 Lexington, etc., R. Co. v. Chandler, 
 13 Mete. 311 ; Hart, etc., R. Co. v. 
 Kennedy, 12 Conn. 499 ; Ward v. Gris- 
 woldville M. Co., 16 id. 593; Mann v. 
 Cooke, 20 id. 178. On this subject 
 Mr. Redfield observes : " But where 
 the stock of the company is defined in 
 its charter, and is divided into 
 shares of a definite amount in money, 
 a subscription for shares is justly re- 
 garded as equivalent to a promise to 
 pay calls, as they shall be legally made 
 to the amount of the shares. This 
 may now be regarded as settled, both 
 
 in this country and in England, and 
 that the power given the company to 
 forfeit and sell the shares, in cases 
 where the shareholders fail to pay 
 calls, is not an exclusive, but a cumu- 
 lative remedy, unless the charter or 
 general laws of the state provide that 
 no other remedy shall be resorted to 
 by the company." 1 Redf. on Rail., 
 § 49. See, also, Hartford & N. H. R. 
 Co. v. Kennedy, 12 Conn. 499 ; Mann 
 V. Cooke, 20 id. 178 ; Dayton v. Bors;, 
 31 N. T. 435 ; Piscataqua Ferry Co. v. 
 Jones, 39 N. H. 491 ; Goshen Turnp. 
 Co. V. Hurten, 9 Johns. 217 ; Dutchess 
 Man. Co. v. Davis, 14 id. 238 ; Troy 
 Turnp. Co. v. McChesney, 21 Wend. 
 296; Northern R. Co. v. Miller, 10 
 Barb. 260 ; Plaukroad v. Payne, 17 
 id. 567 ; Troy & Bost. R. Co. v. Tib- 
 bits, 18 id. 297; Ogdensburgh R. Co 
 V. Frost, 21 id. 541 ; Herkimer M. & 
 H. Co. v. Small, 21 Wend. 273 ; S. C, 
 2 Hill, 127 ; Sagory v. Dubois, 3 Sandf. 
 Ch. 466 ; Mann v. Currie, 2 Barb. 294; 
 Ward v. Griswold Manuf. Co., 16 
 Conn. 593; Lexington & W, C. R. Co. 
 V. Chandler, 13 Mete. 311 ; Klein v. 
 Alton, etc., R. Co., 13 111.514; Palmer 
 V. Lawrence, 3 Sandf. 161 ; Greenville, 
 etc., R. Co. v. Smith, 6 Rich. 91; 
 Freeman v. Winchester, 10 S. & M. 
 577; Selma R. v. Tipton, 5 Ala. 787 ; 
 Troy, etc., R. Co. v. Kerr, 17 Barb. 
 581. 
 
 But if the stockholder is only made 
 liable after a sale of stock, the statute 
 must be pursued, and he would only 
 be liable for a deficiency after the sale. 
 Grays v. Turnp. Co., 4 Rand. 578; 
 Essex Bridge Co. v. Tuttle, 2 Vt. 393. 
 See, also, Rensselaer & W. Plank R. 
 Co. V. Barton, 16 N. Y. 457.
 
 148 
 
 Private Cokpokations. 
 
 commenced against a subscriber, to recover certain installments, 
 and the stock was afterward forfeited for the non-payment of a 
 subsequent and last call, a plea of such forfeiture in bar of the 
 further prosecution of the action was sustained.' 
 
 Sec. 86. Assessments ; niles in relation to. — Assessments, in con- 
 nection with corporate stocks, is understood to mean a rating by 
 the members or the board of directors of a corporation, by install- 
 ments, of which notice is usually required to be given ; and after 
 such assessment and the requisite notice is given, and the period 
 for payment has passed, then an action will lie for the amount of 
 
 > Small V. Herkimer Manufg. Co., 2 
 N. Y. 330; overruling Herkimer 
 Manufg. Co. v. Small, 31 Wend. 273, 
 and 2 Hill, 177. See, also, Kennebec 
 & Port. R. Co. V. Kendall, 31 Me. 470 ; 
 Allen V. Montgomery R. Co., 11 Ala. 
 437. If in such cases the company 
 fail to exercise their power of forfeit- 
 ure, as the successive defaults occur, 
 until all the defaults for payment of 
 calls occur, it loses its remedy by sale. 
 Stokes V. Lebanon, etc., R. Co., 6 
 Humph. 241 ; Harlem Can. Co. v. 
 Seixas, 2 Hall, 504 ; Delaware Canal 
 Co. V. Sausom, 1 Binn. 70. A power 
 conferred by the legislature on a cor- 
 poration to sell the stock of a sub- 
 scriber for default of payment of an 
 installment by him does not exclude 
 the common-law remedy to recover 
 the amount ; but he is still liable in 
 an action of assumpsit on his promise 
 by the subscription. The penalty of 
 forfeiture is cumulative; and the 
 company may waive it, and proceed in 
 personam on the promise. London 
 Grand Junction R. W. Co. v. Graham, 
 1 Q. B. 271 ; Birmingham, Bristol & 
 Thames R. W. Co. v. Locke, 1 Q. B. 
 256 ; Highland Turnpike Co. v. Mc- 
 Kean, 11 Johns. 109 ; 1817, Dutchess 
 Cotton Mfg. Co. V. Davis, 14 id. 
 238; 1835, Spear v. Crawford, 14 
 Wend. 20 ; 1839, Troy Turnpike & R. 
 R. Co. V. McChesney, 21 id. 296 ; 
 Sagory v. Dubois, 3 Sandf. Ch. 466 ; 
 Harlem Canal Co. v. Seixas, 2 Hall, 
 504 ; Stokes v. Lebanon & Sparta 
 Turnpike Co., 6 Humph. 241; Eastern 
 Plankroad Co. v. Vaughaii, 20 Barb. 
 155 ; Klein v. Alton & Sangamon R. R. 
 Co., 13 HI. 514; Hartford & New 
 Haven R. R. Co. v. Kennedy, 12 Conn. 
 
 499 ; Instone v. Bridge Co., 2 Bibb. 
 577; Grays v. Turnpike Co., 4 Rand. 
 578 ; Rockville & Washington Turn- 
 pike Road V. Maxwell, 2 Cranch's C. C. 
 451. In this respect there is nothing 
 to distinguish the case of an assignee 
 from that of an original stockholder. 
 See Mann v. Currie, 2 Barb. 294. The 
 rule is the same, although the sub- 
 scription promise upon pain of for- 
 feiture, etc. The company may sue as 
 upon an absolute promise. Troy 
 Turnpike & R. R. Co. v. McChesney, 
 21 Wend. 296. That the forfeiture 
 can only be enforced on a full com- 
 pliance with the provisions of the act, 
 see Eastern Plankroad Co. v. 
 Vaughan, 20 Barb. 155. Where the 
 statute was, that "the directors may 
 order the treasurer to sell," they can- 
 not delegate the power of ordering 
 sales to a committee, and an order to 
 the treasurer must be absolute and 
 not in the alternative. See York & 
 Cumberland R. R. Co. v. Ritchie, 40 
 Me. 425 ; Small v. Herkimer Mfg. Co., 
 3 N. Y. 330 ; Troy & Rutland R. R. 
 Co. V. Kerr, 17 Barb. 581 ; Troy & 
 Boston R. R. Co. v. Tibbits, 18 id. 
 297 ; 1856, Ogdensburgh, Rome and 
 Clayton R. R. Co. v. Frost, 21 id. 541 ; 
 Mann v. Cooke, 20 Conn. 178; City 
 Hotel V. Dickiuson, 6 Gray, 586 ; 1803, 
 Delaware & Schuylkill Canal Co. v. 
 Sansom, 1 Binn. 70 ; Tar River Navi- 
 gation Co. V. Neal, 3 Hawks, 520 ; 
 Beene v. Cahawba, etc., R. R. Co., 3 
 Ala. 660 ; Gratz v. Redd, 4 B. Monr. 
 178 ; Peoria & Oquawka R. R. Co. v. 
 Elting, 17 111. 429 ; 1860, Raymond v. 
 Caton, 24 id. 123 ; Hightower v. 
 Thornton, 8 Ga. 486.
 
 Members — Stockholders and Stock. 149 
 
 the subscription due.' "Where the charter of a railroad corpora- 
 tion contained a pr6 vision that the capital stock shonld be of not 
 less than a certain number of shares, it was held that assessments 
 laid before the requisite number of shares had been subscribed 
 were invalid.* This was in the absence, of course, of any provis- 
 ion autliorizing assessments where a less amount was subscribed. 
 
 Sec. 87. Power to lay cannot be delegated. — If the power to lay 
 assessments is vested exclusively in the corporation, it cannot be 
 delegated to the directors f but if authority is given to a corpora- 
 tion, by an act of the legislature, to raise a fund in addition to 
 their capital stock by assessment on the stockholders, the corpora- 
 tion may confer the power on the directors to lay assessments for 
 this purpose." 
 
 And where the articles of incorporation of a railway company 
 restricted the installments of stock that might be called for in 
 any one year, by the board of directors, to twenty-five per centum 
 of the whole amount, and also provided for a change in the arti- 
 cles by the votes of the directors, and a change was so made in 
 compliance with the general statutes on that subject, by which the 
 directors were authorized to assess five per centum per month, it 
 was held that such change was binding upon the stockholders who 
 subscribed previous to such alteration.* 
 
 In this case the supreme court of Iowa say : " The charter of 
 the company, plaintiff in this case, provides that the articles of 
 incoi-poration are formed and adopted under and in pursuance of 
 the forty-third chapter of the Code of Iowa (1851), which pro- 
 vides for changes in the charter, which when recorded and pub- 
 lished, as the original articles are required to be, are valid. In 
 view of this provision of the law and the articles of the charter, 
 which authorizes changes to be made by the board of directors, 
 or by the stockholders, we do not think the defendant can, with 
 
 ' Spangler v. Indiana, etc., R. Co., 5 Iowa, 409; Soutli Bay, etc., Co. v. Gray 
 
 21 111. 276. 30 Me. 547. But see, when the char- 
 
 ^ Oldtown, etc., R. Co. v. Veazie, 39 ter is amended after subscription, but 
 
 Me 571. before completing the organization 
 
 ^ Ex parte Winsor, 3 Story, 411. reducing the number of shares re- 
 
 '' Marlborough Manuf. Co. V. Smith, quired to be taken before organiza- 
 
 2 Conn. 579 ; Middletown, etc., Turnp. tion, Oldtown, etc., R. Co. v. Veazie, 
 
 Co. V. Watson, 1 Rawle, 830. 39 Me. 571. 
 
 'Burlington, etc., R. Co. v. White,
 
 160 Private Corporations. 
 
 justice, allege that his liability has been increased or changed with- 
 out his consent. He consented to the change being made, and 
 authorized the company to call for payment of his subscription 
 stock, at the rate of five per centum per month, by becoming a 
 member of the corporation." ' 
 
 Sec. 88. statutory power must be foUowed. ^- Under a Statute 
 which authorized the directors of a company to require "payment 
 from subscribers to the capital stock, of the sums subscribed by 
 them, at svich times and in such proportions and on sucli conditions 
 as they shall see fit," it was held that the directors were invested 
 with full discretionary power as to time and manner of payment, 
 and that they might require the whole subscription to be paid at 
 one time or in installments.'' But a general resolution of a rail- 
 road company forfeiting stock for non-payment of installments, 
 must declare to the stockholder that they claim to forfeit his spe- 
 cific stock, or it will not be valid.'' And where the capital stock 
 is to be paid at such times and in such proportions as required by 
 the president and directors, though the shareholders will be liable 
 to third persons for their subscriptions whether called in or not, 
 yet the call being an uncertain event forms a condition which, as 
 between the subscribers and the corporation, suspends the obliga- 
 tion to pay until called in.^ 
 
 OEC. 89. Several assessments may be laid at one time, when. — 
 Where the terms of the subscription required that assessments 
 should not exceed five dollars on each share at any one time, it 
 was held that, if no greater sum was payable at one time, several 
 assessments might be voted at one time, and that the records 
 of the corporation are competent evidence to show who were 
 the corporators, and number of shares that had been taken 
 at the time of the one assessment, unless some proof be intro- 
 duced to destroy their effect.* So, where an act of incorporation 
 
 1 See same doctrine in Mowrey v. ^ Purton v. N. O., etc., R. Co., 3 La. 
 
 Indianapolis, etc., R. Co., 4 Bias. 78. Ann. 19. 
 
 ^ Haun V. Mulberry, etc., R. Co., 33 * Penobscot, etc., R. Co. v. Dummer, 
 
 Ind. 103. 40 Me. 173. But a contrary doctrine 
 
 ^Johnaon v. Albany, etc., R. Co., seems to be held in Span^lerv. ludi- 
 
 40 How. Pr. 193. . ana, etc., R. Co., 21 111. 276.
 
 Membeks — Stockholders and Stock. 151 
 
 provided that the members might divide the capital stock into as 
 many shares as they might think proper, and by a written agree- 
 ment, they fixed the capital stock at $50,000, and divided it into 
 five hundred shares of $100 each, but only one hundred and 
 thirty-eight shares were taken, it was held that no assessment for 
 the general purposes of the corporation could be legally made 
 until all the shares were taken.' And if the proper officers of an 
 insolvent corporation have neglected to call in unpaid subscriptions 
 due to the company from solvent stockholders, in a proper pro- 
 ceeding in chancery by a judgment creditor of such company 
 against the company and such stockholders, the court may decree 
 payment by such stockholders to such judgment creditor, to the 
 extent of such amounts of subscription as remain unpaid." 
 
 Where the charter of a railroad company provided that, if any 
 stockholder should omit for the space of six months to pay any 
 installments on his shares which might be called for, the managers 
 of the company might declare such shares forfeited ; and the 
 defendant paid two installments on his shares when called for, 
 after which the company made a general assignment for the bene- 
 fit of its creditors, and a call for a third installment was made at 
 the proper time by the managers without the approval or disap- 
 proval of the assignee, it was held that the managers had the 
 authority to declare the defendant's shares forfeited for the non- 
 payment.^ 
 
 Sec. 90. Notice of assessments or calls. — Notice of the assessment 
 or call is usually provided for by the act, or articles of association, 
 or the by-laws of the corporation, to be given personally or by 
 publication to dehnquent subscribers before proceedings can be 
 taken to recover the same by suit at law, or by forfeiture of 
 shares or sums paid on them. The mode and manner of pro- 
 ceeding and the length of notice is generally thus provided for, 
 and of which provisions the stockholders would be bound to take 
 notice. 
 
 But, whatever be the requirement of the corporation in this 
 
 Littleton Manuf. Co. v. Parker, 14 ^Bassettv. St. Albans, etc., R. Co. 
 N. H. 543 ; Contoocook, etc., R. Co. v. 47 Vt. 313. 
 
 Barker, 33 id. 363. ^ Germantown, etc., R. Co. v. Fitler, 
 
 GO Penn. St. 134.
 
 X52 Private Corporations. 
 
 respect, it should be strictly followed in order to entitle it to the 
 remedies provided in case of the neglect or default of the sub- 
 scriber to attend to the call, and make the payment required ; 
 and especially when there is authority in the company to forfeit 
 the shares.' But a judgment for an installment on a subscription 
 was sustained, where it did not appear that the defendant had 
 any notice of a call for the same, as it did not appear that the 
 charter required notice to be given.^ 
 
 Sec. 91. Sufficiency of. — The notice, when required, in case of 
 authority to sell by virtue of a power in the company for that 
 purpose, should express the time and place of sale, and should be 
 reasonably sufficient in the absence of provisions as to the length 
 of notice, for the purposes for which it is required or intended. 
 Thus, it was held in Massachusetts, that a notice that shares in a 
 railroad company would be sold for non-payment of assessments 
 on a day fixed, and by an auctioneer named, who was and long 
 had been an auctioneer in the place at which the notice bore date, 
 was held to be insufficient, as it did not express the place of sale ; 
 and three days' notice of the time and place of sale was held to 
 be unreasonably short, and, therefore, insufficient, where the 
 owner resided at a distance.^ 
 
 Where a by-law of a corporation provided for a notice to be 
 given of sales of shares for non-payment of assessments, by adver- 
 tisement, designating the time and place thereof and the shares to 
 be sold, it was held that any description sufficing to show clearly 
 
 ^ Cornwall G. C. M. Co. v. Bennett, been, in some cases, considered as 
 
 5 H. & N. 423 ; Anglo-California G. directory only ; and it has been held 
 
 M. Co. V. Lewis, 6 id. 174. that notice may be given in a diHerent 
 
 2 Wilson V. Wills Valley R. Co., 33 manner, if tlie subscriber can sustain 
 Ga. 466. If installments are regularly no injury thereby ; as for instance, a 
 assessed in accordance with the terms personal notice to the subscriber, 
 provided in the subscription, no notice where one by publication is prescribed, 
 of the assessment, or of time and See Lexington R Co. v. Chandler, 13 
 place of payment of the same, is re- Mete. 311 ; Mississippi R. Co. v. Gas- 
 quired. See Lake Ontario R. Co. v. ter, 30 Ark. 455. But see Lewey's 
 Mason, 16 N. Y. 451 ; Smith v. Indi- Lsland R. Co. v. Bolton. 48 Me. 451 ; 
 ana, etc., R. Co., 12 Ind. 61 ; Eakright Rutland R. Co. v. Thrall, 35 Vt. 547. 
 V. Logansport, etc., R. Co., 13 id. 404 ; Where the fundamental law prescribes 
 New Albany R. Co. v. McCormick, 10 a certain length of notice before suit 
 id. 499 ; Breedlove v. Martinsville R. can be brought, such notice must be 
 Co., 13 id. 114 •, Eppes v. Mississippi, given. Id. 
 
 etc., R. Co., 35 Ala. 33; Smith v. ^Lexington R. Co. v. Staples, 5 
 
 Plankroad Co., 30 id. 650. The man- Gray, 520. 
 ner prescribed for giving notice has
 
 Members — Stockholders and Stock. 153 
 
 what shares were intended to be subject of sale M'as sufficient ; * 
 and where a charter provided that for non-payment of assessments 
 " the directors may order the treasurer to sell such shares at auc- 
 tion, * * * and the delinquent subscriber shall be held 
 accountable for the balance, if the shares sell for less than the 
 assessments," and the directors voted that the president and 
 treasurer be a committee to collect arrearages, and enforce such 
 collections by sales or otherwise, it was held that a sale under this 
 vote was void ; that the directors could not delegate the power of 
 ordinary sales to a committee ; and that the order to the treasurer 
 must be absolute and not in the alternative." 
 
 And when the charter authorizing a sale of the stock of delin- 
 quent subscribers required notice of the assessment to be given 
 thirty days before the order of the directors for the sale of the 
 shares, and that the treasurer should give to the subscriber the 
 notice in hand, signed by the treasurer, or by a director, on his 
 behalf, it was held that a notice of the assessment thirty days 
 before the sale, or a notice to the subscriber in hand not signed 
 by the treasurer or a director, was insufficient.^ 
 
 But, when an act of incorporation requires that the place of 
 payments of stock shall be designated in the notice requiring 
 payment, a notice requiring payment to be made to a certain per- 
 son residing in a certain city is priincc facie a compliance with 
 the statute.* And notice to pay instalhnents of a subscription 
 to the treasurer of a company implies that it should be made to 
 him at his office, and is sufficient designation of the place of pay- 
 ment.^ 
 
 Sec. 92. Rights of stockholders to dividends. — It will be manifest 
 that the stockholder must have various rights growing out of the 
 
 ' York, etc., R. Co. v. Pratt, 40 Me. call, will only give it effect from the 
 
 447. date of the ratification." 1 Redf. on 
 
 3 York, etc., R. Co. v. Ritchie, 40 Me. Rail., § 49, par. 8. See, also, id., § 49, 
 
 425. par. 10, 11. 
 
 "The proceedings in making the ^ Id. ; Lewey's, etc., R. Co. v. Bolton, 
 
 calls must have been substantially in 48 Me. 451. 
 
 conformity with the charter and by- "^ Troy, etc., R. Co. v. McChesney, 21 
 
 laws' of the company and the general Wend. 296. 
 
 laws of the state at the time of mak- ^ jyiygj^^j^g^jj^^ ^^^^ q^^ y Ward, 13 
 
 ing the same. Any subsequent ratifi- Ohio, 120. 
 cation by the directors, of an informal 
 
 20
 
 154 Pkivate Cokpokations. 
 
 relation wliicli lio sustains to the corporation, which we will con- 
 sider in this connection. The most important of these, and usually 
 the sole object of the relation, is the right to share in the profits 
 of the association in the j^roportion which the stock he owns bears 
 to the whole capital stock used in the enterprise for which the 
 corporation was organized. 
 
 Among the regulations which may be made by the corporators 
 is that relating to dividends on the shares of capital stock invested 
 and held by the stockholders. Dividends are usually declared by 
 the proper officers of the corporation periodically, as required by 
 its by-laws ; and thereupon the holders of the shares become 
 entitled to the amount so declared as their share of the profits.' 
 
 But the stockholders have no claim to a dividend until it is 
 declared. Until that time the profits belong to the corporation 
 precisely' the same as any other property which the corporation 
 may own.'' And when the dividend is, declared and distribution 
 ordered of the profit fund, whether in whole or in part, it should 
 be distributed between those who at the time were owners of the 
 stock, and in proportion to the shares owned by them.' The com- 
 pany is bound to pay the dividends which may be declared to the 
 true owners only ; * and these are usually determined by an 
 inspection of the proj)er books of the company.^ But if the divi- 
 dend is payable at a future day, a sale of the stock carries with 
 it, to the assignee, the right to the dividends.' If a dividend has 
 
 * The directors of a corporation have Wiltbank'g Appeal, 64 id. 256; St. 
 
 authority to declare dividends and to John v. Erie R. Co., 10 Blatchf. 271 ; 
 
 fix the time and place of payment, Bradley v. Holduworth, 3 M. & W. 422. 
 
 •with such limitations as reason and ^ Goodwin v. Hardy, 57 Me. 143 ; 
 
 good faith may require. King v. Pat- March v. Eastern R. Co.. 43 N. H. 515; 
 
 erson, etc., R. Co., 29 N. J. L. 82. But Gifibrd v. Thompson, 115 Mass. 478. 
 
 the acceptance of a dividend by a The unpaid dividends are assets and 
 
 stockholder is no ratification of illegal liable for the debts of the company, 
 
 conduct of directors in relation thereto. Curry v. Woodward, 44 Ala. 305 ; Hill 
 
 Hilles V. Parish, 14 N. J. Eq. 3S0. A v. Newichawanick Co., 48 How. Pr. 427; 
 
 corporation is liable to one of its stock- Coleman v. Columbia, etc., R. Co., 51 
 
 holders to whom it fails to distribute Penn. St. 74. 
 
 his proper quota of a dividend which * Southwestern, etc., R.Co. v. Thoma- 
 
 has been declared. Jackson v. New- son, 40 Ga. 408. 
 
 ark, etc., Plank R. Co., 31 N. J. L. 'Jones v. Terre Haute, etc., R. Co., 
 
 277. 17 How. Pr. 529 ; compare, Currie v. 
 
 2 If the corporation uses its surplus White, 37 id. 330 ; 6 Abb. Pr. (N. S.) 
 
 to buy up some of its own stock, the 352; Bank of Uticav. Smalley, 2 Cow. 
 
 stockholders have no right to claim 770. 
 
 this pro rata, until it is ordered to be ^ Burrough v. North Carolina R. R. 
 
 divided among them. Coleman v. Co.,67N. C. 376. 
 Columbia Oil Co., 51 Penn. St. 74;
 
 Members — Stockholders and Stock. 155 
 
 been declared, when in fact there is no money earned with which 
 to pay it, a stockholder may maintain an action to enjoin its pay- 
 ment.' 
 
 It has been held that dividends are to be considered paid to 
 the stockholders, when they have received credit on their stock 
 notes in the possession of the company.^ And a declaration of a 
 dividend by a corporation on a part of its capital stock raises a 
 presnmption that the same is declared on all, and it has been held 
 that this presumption was sufficient basis for a tax, and that for 
 the purposes of taxation it might be assumed that the same divi- 
 dend had been declared on all the stock.' But a shareholder has 
 no legal right to the profits of his shares until a division is made, 
 and a contract by him in reference to dividends and profits upon 
 his stock includes only dividends or profits ascertained and de- 
 clared by the company and allotted to him, and not profits to be 
 ascertained by third persons or courts of justice, upon investiga- 
 tion of the accounts and transactions of the company.* When, 
 however, a dividend has been declared, the amount accruing upon 
 the stock of each stockholder is treated as his own property, and 
 the directors have no power to apply it to any purpose not in- 
 cluded in their charter, without the consent of such stockholder/ 
 
 Sec. 93, Right of purchaser as to dividends. The general rule is, 
 that the purchaser of stock has a right to receive all dividends 
 subsequently declared without reference to the time they were 
 
 ' Carpenter v. N. Y., etc., R. R. tion for its refusal to pay tliem. See 
 
 Co., 5 Abb. Pr. (N. S.) 277. Bates v. Androscoggin, etc., R. Co., 
 
 ^Citizens, etc., Ins. Co. v. Lott, 45 49 Me. 491; State v. Baltimore, etc., 
 
 Ala. 185. R. Co., 6 Gill, 363 ; Bank of Commerce 
 
 ^ Atlantic, etc., Tel. Co. v. Common- v. Dalrymple, 16 Md. 17; Moss' Ap- 
 
 wealth,3Brewst. (Penn)366. See, also, peal, 43 Peun. St. 23. 
 as to the proper basis of taxation of ^ March v. Eastern R. R. Co.,43 
 
 stock, Boston, etc., R. Co. v. Com- N". H. 515. Where a dividend was 
 
 monwealth, 100 Mass. 399. declared, and the amount deposited 
 
 * Goodwin v. Hardy, 57 Me. 143 ; with bankers expressly to pay it, but 
 
 Minot V. Paine, 99 Mass. 101 ; Curry before it was paid upon all the stock, 
 
 V. Woodward, 44 Ala. 305; Phelps v. the money was withdrawn, and the 
 
 Farmers' Bank, 26 Conn. 269 ; Hyatt corporation became insolvent, it was 
 
 V. Allen, 56 N. Y. 553. See, also, held that the stockholders were 
 
 Spear v. Hart, 3 Robt. (N. Y.) 420. equitably entitled to the money. 
 
 As to the right of stockholders todivi- Matter of Le Blane, 4 Abb. N. C. (N. 
 
 dends ; their amount, how payable; Y.)221. 
 and the remedy against the corpora-
 
 156 Private Cokporations. 
 
 earned.^ And dividends divisible among the shareholders must 
 be considered as their property, and cannot be applied by the 
 directors to any piirjiose not provided for by the act or articles of 
 incorporation, without the consent of the shareholders." 
 
 And if one sells stock to another, and is unable to have the 
 transfer registered in consequence of a failure of the corporation, 
 and he, therefore, remains the registered owner, he is entitled to 
 recover of the vendee any assessments he may have been obliged 
 to pay on the stock after the assignment.' 
 
 In relation to dividends it has been affirmed that they are pay- 
 able out of profits, and that it is not necessary that all outstand- 
 ing liabilities should be paid off before they are declared and paid 
 to the respective shareholders.'* But this proposition should at 
 least be given with this qualification, viz. : that the corporation 
 is solvent. For, according to principles of justice in such cases, 
 if the corporation is insolvent, the creditors would have an un- 
 doubted right to insist that the profits should first be apjjlied to 
 the satisfaction of their claims.^ And it has been held that the 
 directors may retain the profits and invest the same in improve- 
 ments ; and, in lieu of the dividends which the stockholders would 
 otherwise be entitled to, issue shares of stock, where the law or 
 the constatmg instrument authorized them to increase the capital 
 stock for any purpose. And such action, it has been held, would 
 afford no ground for an injunction to restrain them.® 
 
 ' Marcli V. Eastern R. Co.. 43 N. H. stock declared that it should be enti- 
 
 515 ; Foote's Case, 22 Pick. 299 ; tied to preferred dividends out of the 
 
 Granger v. Bassett, 98 Mass. 462 ; net earnings, not to exceed a specified 
 
 Goodwin v. Hardy, 57 Me. 14.3 ; Gif- note after payment of mortgage in- 
 
 ford V. Tliompson, 115 Mass. 478. terest in full, and after the certificate 
 
 '^ March v. Eastern R. Co., aupra. was issued the corporation borrowed 
 
 ^Grissell v. Bristowe, L. li., 3 C. P. money and issued bonds therefor, with 
 
 112 ; Coles v. Bristowe, L. R. , 6 Eq. interest, and also took a lease of con- 
 
 149 ; L. R., 4 Cli. 3 ; Hodgkinson v. nectiug roads on rent, it was held that 
 
 Kelly, L. R., 6 Eq. 496; Hawkins v. the certificate was not entitled to be 
 
 Mallby, id. 505 ; Cruse v. Paine, id. paid a dividend until after the interest 
 
 641 ; Castellan v. Hobson, L. R., 10 on such bonds and the rent under such 
 
 Eq. 47 ; Bowering v. Shepherd, Ij. R., leases had been paid. See, also, 
 
 6 Q. B. 309 ; Shepherd v. Gillespie, L. Thompson v. Erie R. R. Co., 42 How. 
 
 R., 3Ch. 764. Pr. (N. Y.) 68. 
 
 * Green's Brice's Ultra Vires, 130. ^ Howell v. Chicago & N. W. R. Co., 
 
 s Scott V. Eagle Ins. Co., 7 Paige, 51 Barb. 378; Atkins v. Albree. 12 
 
 198; Karnes v. Rochester, etc., R. Co., Allen, 359 ; Minot v. Paine, 99 Mass. 
 
 4 Abb. Pr. (N. S.) 107. In St. John 101; Boston, etc., R. Co. v. Common- 
 
 V. ErieR. R. Co., 10 Blatchf . (U. S. wealth, 100 id. 399; Daland v. Wil- 
 
 C. C.) 271, where a certificate of liaras, 101 id. 571; Leland v. Ilayden,
 
 Membeks — Stockholders and Stock. 157 
 
 In a case heard in the United States Circuit Court,' the court 
 saj : " Net earnings are properly the gi-oss receipts, less the expen- 
 ses of operating the road, or other business of the corporation. 
 Interest on debts is paid out of what thus remains, that is, out of 
 the net earnings. Many other liabilities are paid out of the net 
 earnings. When all liabilities are paid, either out of the gross 
 receipts or out of the net earnings, the remainder is the profit 
 of the shareholders, to go toward dividends, wliich, in that way, 
 are paid out of the net earnings.'" 
 
 A recent case in the court of appeals in Kew York will serve 
 to illustrate the legal rights in such cases. A stockholder brought 
 a suit against a corporation, to compel it to declare a dividend. 
 The facts were as follows : The corporation had on hand, on de- 
 posit and securities, $36,000. Its floating debt was $1,000, and 
 the funded debt payable in seventeen years at six per centum was 
 $75,000. The yearly current expenses, including interest on the 
 funded debt, was about $10,000, and the corporation had no 
 immediate need of the surplus on hand, or of its earnings, except 
 to pay the current expenses. The court observed : " The property 
 of every corporation, including all its earnings and profits, belongs, 
 primarily, to such corporation, exclusively, and not to its stock- 
 holders, individually or collectively. They have a certain claim, 
 it is true, but their claims are always subordinate to the claims of 
 creditors, and the latter approach much nearer to the condition of 
 ownership than the former. No stockholder can entitle himself 
 to any dividend, or to any portion of the capital stock, until all 
 debts are paid. The funds on hand, which the plaintiff asks to 
 have divided and distributed among the stockholders, are only 
 about half sufiicient to pay the indebtedness of the defendant. It 
 is of no sort of consequence, in a legal point of view, that the 
 debt is not yet due, and has a number of years to run before it 
 
 102 id. 542 ; Rand v. Hubbell, 115 id. is a debt that is payable only in legal 
 
 461 ; Gifford v. Thompson, id. 478 ; tender currency. Ehle v. Chittenango 
 
 Earp's Appeal, 28Penn. St. 368; Wilt- Bank, 24 N. Y. 548. But see Scott v. 
 
 bank's Appeal, 64 id. 256. A dividend Central, etc., R. Co., 52 Barb. 45. 
 
 ^St. John V. Erie R. R. Co., 10 ^ See, also, opinion of Bronson, J., 
 
 Blatchf. 271 ; affirmed in the supreme in People v. Supervisors, 4 Hill, 20 ; 
 
 court of the United States, iu 22 Wall. S. C. on appeal, 7 id. 504. 
 146.
 
 158 Private Corporations. 
 
 matures. The creditors still have the better right to the funds, 
 which the defendant holds for them in trust. The court cannot 
 undertake to say, judicially, that the future business of the corpo- 
 ration will be prosperous, nor has it any right to postpone the 
 rights and claims of creditors to future earnings and accumula- 
 tions, even if it could be certain they would accrue. The board 
 of directors, in their discretion and in view of all the facts within 
 their knowledge, might do this, but no court, I ai3prehend, would 
 ever undertake to deal in such a manner with the funds of the 
 corporation which was indebted to an amount at least double the 
 fund sought to be distributed. * * * The corporation does 
 not stand in any fiduciary relation to its stockholders. * * * 
 The stockholders are in no sense creditors of the coi-^joration, nor 
 are they in the situation of partners. They are constituent parts 
 of the corporate body. In a general sense, a corporation may be 
 regarded as the trustees of its creditors, but not of its stockholders. 
 The action has, therefore, no foundation of a trust to support it." * 
 
 Sec. 94. Effect of declaring dividends. — When a dividend is de- 
 clared, it becomes a debt due from the corporation to the in- 
 dividual stockholder, and if the corporation deposit the money 
 with a bank for the benefit of the stockholder, it does not thereby 
 release itself from liability to the stockholder, in case of a failure 
 of the banking company to pay the same.^ A stockholder, in a 
 moneyed corporation, has a perfect ownership over his stock, and 
 may, as we have seen, sell and transfer the same to whom it 
 pleases, and the corporation has no right to restrain him in so 
 doing. Such stock entitles the owner to his proportion of the 
 dividends, which may be from time to time declared f and a de- 
 vise of the dividends, without qualification, has been held to carry 
 with it the stocks themselves.'* 
 
 ' Karnes v. Rochester, etc., R. Co., 4 ^ King v. Paterson R. Co., 5 Dutch. 
 
 Abb. Pr.CN.S.)107; Uticav. Churchill, 82, 504. 
 
 83 N. Y. 338. See. also, People v. Com- ^ Brightwell v. Mallory, 10 Yerg. 196; 
 
 missioners, 35 id. 433; S. C, 4 Wall. State v. Franklin Bank, 10 Ohio, 90. 
 
 244; Waterman v. Troy, etc., R. Co., But a stockholder must prove a de- 
 
 8 Gray, 433" Cunningham v. Vermont, mand before he can maintain an action 
 
 etc., R. Co., 13 id. 411; McLaughlin for a dividend. Scott v. Central, etc., 
 
 V. Detroit, etc., R. Co., 8 Mich. ICO ; R. Co., 53 Barb. 45. 
 City of Ohio v. Cleveland, etc., R. Co., * Collier v. Collier, 3 Ohio St. 374. 
 6 Ohio St. 489.
 
 Members — Stockholders and Stock. 159 
 
 But an agreement by a corporation to pay annual dividends to 
 preferred stockholders, witli'out reference to its ability to pay 
 tlieui from its earnings, is opposed to public policy and void.' 
 
 Sec. 95. a stockholder may sue for his dividends. — When a divi- 
 dend is declared payable at a certain time it thereupon becomes 
 the individual property of the stockholder, aud he is entitled to 
 receive the same upon or after the day fixed for payment on de- 
 mand of the proper agent. In such a case the dividend is considered 
 as a severance of so much as belongs to each stockholder from the 
 common fund of the corporation, and is thereafter held in trust 
 by the company for them, and cannot be appropriated to other 
 purposes. It is a debt due from the time it is set apart to the 
 stockholder, and if not paid on demand he may maintain an action 
 therefor." And where the money is subsequently withdrawn by 
 the directors and the corporation becomes insolvent the stock- 
 holders have an equitable lien upon the fund to the extent of their 
 unpaid share of the dividend, and such lien follows the fund into 
 the hands of the receiver, and will be enforced by a court of 
 equity.^ 
 
 Sec. 96. income on stock in trust. — If shares of a capital stock of 
 a corporation are held as a fund in trust to pay the income to 
 a person until his death, and then convey the capital to another, 
 the regular dividends declared and paid would of course consti- 
 tute income to which the trustee, for the benefit of the cesticique 
 trust, would be entitled, and also any dividends on shai-es of 
 additional stock distributed as part of the net earnings of the cor- 
 poration. But he would not be authorized to ti-eat the additional 
 stock itself as income, for the benefit of his cestui que trust.* A 
 
 ' Lockhart v. Van Alstyne, 31 Mich. Co., 29 N. J. L. 83; Jackson v. Plank 
 
 76. See, also, St. John v. Erie R. Co., R. Co., 31 N. J. L. 277; Philadelphia, 
 
 10 Blatchf. 271. etc., R. Co. v. Cowell, 28 Penn. St. 
 
 2Kanev. Bloodgood, 7 Johns. Ch.90; 329, Marine Bank v. Biays, 4 H. & 
 
 Carpenter v. New York, etc., R. Co., 5 J. 338 ; State v. Baltimore, etc.,R. Co., 
 
 Abb. Pr. 377; Jones v. Terre Haute, 6 Gill, 363 ; City of Ohio v. Cleveland, 
 
 etc., R. Co., 57 N. T. 196; Howell v. etc., R. Co., 6 Ohio St. 489 : Le Roy v. 
 
 Chicago, etc., R. Co., 51 Barb. 378 ; Globe Ins. Co., 2 Edw. Ch. 657. 
 
 Granger v. Bassett, 98 Mass. 463; ^ jyjatter of Le Blanc, 4 Abb. N. C. 
 
 Stoddard v. Sbetucket, etc., Co., 34 (N. Y.)221. 
 
 Conn. 543 ; King v. Paterson, etc., R. ^Minot v. Paine, 99 Mass. 101.
 
 160 Private Corporations. 
 
 fund bequeathed in trust to pay the income to one until his death, 
 and then the capital to another, included shares in the stock of a 
 railroad corporation. This corporation, out of its net earnings 
 accninulated during the term of the trust, bought in the market 
 part of its own stock, invested other earnings to an amount equal 
 to twenty per centum of the par value of the residue of its stock 
 in property, a large portion of which was not required for the 
 use and improvement of the railroad, and voted to create a num- 
 ber of new shares of the same par value, to be issued and disposed 
 of as the directors should deem proper. The directors then voted 
 to offer to the individual stockholders the right to take part of 
 the new stock at par, in the projDortion of twenty per cent of new 
 shares for each old share held by the taker, and that if an 3' indi- 
 vidual stockholder should not avail himself of his right in this 
 respect, they would dispose of it as they might see fit ; and at the 
 same time they declared a dividend of- forty jjer centum on the 
 old shares held by the individual stockholders, payable, ' ' twenty 
 per cent in the shares of the company which were purchased and 
 held by this corporation in its corporate capacity, and twenty per 
 cent in cash, derivable from the shares which the stockholders 
 entitled to this dividend shall respectively pay for the new stock 
 taken by them, under the terms of the preceding vote." On these 
 facts the question presented to the court was, what part of the 
 avails of the stock was income to which the tenant for life was 
 entitled, and what part, if any, belonged to the trust fund. The 
 court held, that of the avails of the dividend to the trustee, so 
 much as was derived from the first twenty per cent was payable 
 as income to the life tenant, and so much as was derived from 
 the second twenty per cent accrued to the capital of the trust fund.' 
 
 Sec. 97. Money in hands of directors. — Money in the hands of 
 the directors may be income to tiie corporation, but it cannot be 
 considered income to the subscribers until a dividend is made. 
 Thus, where the company invests in machinery, or in railroad 
 tracks, depots, I'olling stock, or any other permanent improvement 
 for enlarging or carrying on their legitimate business, it does not 
 
 1 Leland v. Hayden, 102 Mass. 542 (1869). See, also, Wiltbank's Ajipeal, 64 
 Penn. St. 256.
 
 Memhers — Stockholders and Stock. 161 
 
 become income to the sliarelioldcrs, but is accretion to the capital ; 
 and it is the same whether thej increase the shares or the par 
 value of the shares, or leave the shares unaltered. And if the 
 number of shares is increased for purposes merely speculative, it 
 is an increase of capital stock and not of income, and it has been 
 suggested that it would be practically unwise for courts to go be- 
 hind the action of the company and attempt to ascertain how 
 they came by the funds out of which they declare either their 
 cash or their stock dividends.' 
 
 The right to take new shares on increase of the capital stock is 
 a benefit or interest which attaches to the stock, and is not usually 
 considered as income derived from the prosecution of the corpo- 
 rate business, but inherent in the shares ; and it is important to 
 understand this principle, as we have seen in cases where stock is 
 left in trust to pay the income for life with one person with 
 remainder of the principal to another.'' If a stock dividend under 
 such circumstances is declared, the trustee would take it as capital 
 for the remainderman, and not as income for the benefit of the 
 life estate, although it is the result of the net earnings of the cor- 
 poration. ^ 
 
 Sec. 98. Right to sell and assign shares. — The capital stock of an 
 incorporated company is personal property ; but the certificate of 
 shares thereof, or other evidence of ownership or title, has none 
 of the qualities of negotiable or commercial paper.* The owner 
 may sell and assign such shares like any other personal property. 
 The right of alienation is an incident of such property, as well as 
 any other, and a by-law of the corporation prohibiting alienation, 
 or placing restraints thereon, is void.* 
 
 ' Boston, etc.. R. Co. v. Common- pany is property within the meaning 
 
 wealth, 100 Mass. 399. of the Civil Code of Kentucky. Field v. 
 
 2 Atkins V. Albree, 13 Allen, 359. Moutmollin, 5 Bush, 455. And a by- 
 
 2 Minot V. Paine, 99 Mass. 101. See, law, which imposes restraints on, or 
 
 also, Daland v. Williams, 101 id. 571 ; unreasonable impediments to aliena- 
 
 Leland v. Hayden, 102 id . 543 ; Heard tion or the transfer of stock, unless the 
 
 V. Eldredge, 109 id. 258 ; Rand v. Hub- power so to do has been conferred by 
 
 bell, 115 id. 461; Gifford v. Thompson, the fundamental law of its institution, 
 
 id. 478. would be void. Sargeant v. Franklin 
 
 * Weaver v. Barden, 3 Lans- 338. Ins. Co., 8 Pick. 90; Quiner v. 
 
 See, also, Shaw v. Spencer, 100 Mass. Marblehead Ins. Co., 10 Mass. 476. 
 
 382. See, also, Robinson v. Chartered Bank, 
 
 ^ Moore V. Bank of Commerce, 52 Mo. L, R., Eq. 32. But in Missouri it has 
 
 337. Stock in an incorporated com- recently been held that a by-law for- 
 
 21
 
 162 PkIVATE Co]tPORA.TION8. 
 
 But tliG purchaser or assignee of shares of such capital stock 
 acquires no better right or title than tlie seller or assignor had, 
 and takes it subject to the equitable and legal rights of the cor- 
 poration, and of previous innocent hona fide purchasers. If tlxe 
 rio'jitful owner has invested another with the usual evidence of 
 title, or an apparent anthority to dispose of the stock, he will be 
 estopped from making any claim against an innocent purchaser 
 dealing upon the faith of such apparent ownership or right of dis- 
 position.' And to entitle a party to the character of a hona fide 
 purchaser, without notice of a prior right or equity, he must not 
 only have obtained the legal right to the shares, but he must have 
 paid the purchase-money, or some part thereof, or have parted 
 with value on the faith of the purchase, before notice of such 
 prior right or equity ; and the mere giving of security to pay the 
 purchase-money is not of itself suiBcient to entitle the purchaser 
 to protection.^ A delivery of stock as collateral security for an 
 indebtedness, with the usual power of attorney indorsed thereon, 
 and signed by the owner in blank, transfers all the owner's title, 
 both legal and equitable, subject only to the liens or claims of the 
 corporation, and only the holder of the certificate, with power to 
 transfer can cause a transfer on the books of the company.^ 
 
 Seo. 99. Transfer of stock. — Although certificates of shares do 
 not j)ossess the ordinary qualities of commercial contracts or 
 negotiable obligations, and assignments of them may be subject 
 to all legal and equitable claims of the company, yet every reaso;i- 
 able facility is usually offered for the transfer of them from one 
 
 bidding the transfer of stock, when of stock under execution, the pur- 
 the owner is indebted to the corpora- chaser cannot recover the shares or 
 tion, is valid, although inconsistent their value, where such a by-law ex- 
 with the general law of the state iats, until such indebtedness be satis- 
 governing general transfer of prop- fied. Mechanics' Bank v. Merchants' 
 erty ; and in case of a sale of shares Bank, 45 Mo. 513 
 
 1 Weaver v. Barden, 49 N. Y. 286. ^ Id. See, also. Mechanics' Bank v. 
 
 If a hona fide assignee of bank stock N. Y. R. Co., 13 N. Y. 627. 
 
 has a valid transfer thereof on the ^ Smith v. American Coal Co., 7 
 
 books of the bank, and takes the same Lans. 317. The assignee acquires a 
 
 without any notice of previous assign- legal title as against the assignor, but 
 
 ment of the stock not entered on the only an equitable one as against the 
 
 transfer book,, he has a prior and bet- company. But the manual delivery 
 
 ter right than the previous assignee, of the certificate is not absolutely 
 
 Cady V. Potter, 55 Barb. 463. necessary . Grymes v. Hone, 49 N. 
 
 Y. 17.
 
 Membeks — Stockholders and Stock. 163 
 
 to another. But, for tlie protection of tlic owner and tlie cor- 
 poration, and to afford tlie latter knowledge which it may need 
 in giving the required notice to members for certain purposes, it 
 is usually provided that transfers of stock shall only be made on 
 a book kept for that purpose in the office of the company, and 
 under the care of some officer or agent appointed for that purpose, 
 and the corporation may be responsible on general principles for 
 any negligence or misconduct on the part of such agent in per- 
 forming such duty, whereby injury results to others. A trust is 
 thus imposed upon the corporation, and if for a failure to perform 
 its duty a stockholder is injured, it is responsible. Thus, where 
 one having a certificate of shares of stock in a railroad company 
 duly assigned them to another, and afterward, on application by 
 the assignor and the presentation to the company of an affidavit 
 that he had lost his certificate, procured the issne of a new certifi- 
 cate in its stead upon giving a bond " to save the company harm- 
 less from all loss by reason of said second issue and from any 
 liability or account of * * the stock described in said affidavit ;" 
 and the company afterward refused to allow any transfer of the 
 stock on its books when requested by the holder of the original 
 certificates, and the stock, of the value of $Y00, depreciated so 
 that it became worthless, in an action therefor against the com- 
 pany and the assignor it was held that an action would be sustained 
 against such company for such refusal ; and that, although the 
 bond was general assets of the company, the plaintiff could not 
 have by subrogation a right of action in equity npon it.* And 
 when the charter provides for the transfer of shares only on the' 
 books of the corporation, still the assignment of a certificate with 
 a written power to the assignee to transfer the stock to himself 
 on the books is a symbolical delivery affecting those who have 
 notice thereof, as if the transfer had been made on the books of 
 the corporation.'' And where one having sufficient funds in bank 
 at the time, paid by his check for certain shares which were trans- 
 ferred on the books thereof to his credit, but no certificate was 
 issued, and the bank was afterward notified of an adverse claim 
 
 ' Greenleaf v. Ludington, 15 Wis. * Bank of America v. McNeil, 10 
 558. Bush, 54. See, also, Hill v. New- 
 
 icliawanick Co., 48 How. Pr. 527.
 
 164 Private Corporations. 
 
 to liis deposit, growing out of previous and independent frauds 
 which the depositor had committed, and the bank refused to pay 
 the clieck, and the assignor became a bankrupt, it was held that 
 the assignee 'of the shares could not maintain a bill against the 
 original owner and the corporation to compel a conveyance 
 thereof.^ And generally it may be said that where the charter of 
 a company requires that its stock shall be transferred in a certain 
 way, a long continued and universal disregard of that method 
 estops the company from setting up the charter provisions in that 
 respect to the prejudice of third persons,^ the rule being that 
 a transfer of stock made according to the usage of the company 
 is valid, as against the company, although it does not conform to 
 the requirements of its by-laws/ The equitable title to stock may 
 pass, although the transfer is not made according to the provisions 
 of the charter or by-laws.* The provision usual in charters that 
 no transfer of the stock shall be effec'tual until entered on the 
 books of the company is a regulation designed for the security 
 of the corporation itself, and of third persons taking transfers 
 without notice of any prior equitable transfer. It relates to the 
 transfer of the legal title, and not of any equitable interest sub- 
 ordinate to that title. As between the vendor and purchaser, a 
 transfer not in conformity to such provision passes the equitable 
 title and divests the vendor of his interest,^ and courts of equity 
 will, where there is no statute to prevent it, protect this equitable 
 title against the attachments of creditors of the vendor, who have 
 notice of such transfer. Thus in a Connecticut case,* it appeared 
 
 ' Comins v. Coe, 117 Mass. 45. ance. He said : " The attaching credi- 
 
 ^ Bangate v. Shortridge, 5 H. L. tors, who are the real parties in in- 
 
 Cas. 297. terest in this cause, assume that by a 
 
 ^ Sargent v. Essex Marine Railway, course of decisions in Connecticut, 
 
 9 Pick 204; Chambersburgh Ins. Co. stock in a corporation is held to be so 
 
 V. Smith, 11 Penn. St. 120 ; Choteau peculiar in its nature and character 
 
 Springs Co. v. Harris, 20 Mo. 383. that no transfer can be made of it, 
 
 ■* Colt V. Ives, 31 Conn. 25 ; Sargent or even any equitable interest acquired 
 
 V. Franklin Ins. Co., 8 Pick. 90. in it, as against attaching creditors, 
 
 * Black V. Zacharie, 3 How. (U. S.) unless by an actual transfer made 
 483 ; Farmers' Bank of Maryland v. upon the corporation books, or re- 
 Iglehart, 6 Gill (Md.), 50 ; Duke v. corded in them, in the mode pre- 
 Cahawba Navigation Co., 10 Ala. 82. scribed by the charter or by-laws of 
 
 * Colt V. Ives, ante. We append the the institution ; and the cases of The 
 opinion of HiNMAN, Ch. J., in this case, Marlborough Manufacturing Co. v. 
 as it is of suificient importance to give Smith, 2 Conn. 579 ; Northrop v. New- 
 it a place in a work of this character, town & Bridgeport Turnpike Co., 3 id. 
 upon a question of so much import- 544, and Northrop v. Curtiss, 5 id.
 
 Members — Stockholders and Stock. 
 
 165 
 
 that one William Jarvis was in 1846 appointed guardian of tlie 
 petitioner Elizabeth Colt, who was his daiigliter, and was tlien a 
 minor and unmarried. At that time there came into his hands 
 
 24G, subsequently sanctioned by more 
 modern cases in our reports, as is* 
 claimed, are relied upon in support of 
 the position. The first two of these 
 cases, and the case of The Oxford 
 Turnpike Co. v. Bunncl, 6 Conn. 552, 
 do undoubtedly decide that, in actions 
 at la\v, in cases where the legislature 
 in the act of incorporation either pre- 
 scribe the mode of transferring stock, 
 or authorize the company to do it in 
 their by-laws, and the company do in 
 their by-laws prescribe a mode as the 
 only one to be pursued, that mode 
 must be followed, or the legal title 
 will not pass by an assignment which 
 would be good at common law had no 
 particular and exclusive mode of 
 transfer been prescribed. These cases, 
 and others to the same effect, being 
 actions at law, conversant only with 
 what at the time was considered the 
 strict legal title to corporate stock, 
 have necessarily no controlling force 
 in a case depending upon equitable 
 instead of legal principles. And al- 
 though the case of Korthrop v. Curtiss 
 was upon a bill in chancery praying 
 that the legal title to certain shares of 
 stock might be transferred to the 
 plaintiff, who claimed the equitable 
 title thereto, yet the case itself shows 
 that the plaintiff relied not only upon 
 what he considered an equitable as 
 distinguished from a legal assignment 
 of the stock to himself, but more par- 
 ticularly upon the fact that the party 
 from whom he claimed to have de- 
 rived his title, such as it was, had 
 only an equitable interest in the stock 
 to assign, and therefore could not 
 create in the plaintiff as his assignee 
 any better title than he himself had 
 in it ; and it was upon this last ground 
 that he insisted that the intervening 
 attaching creditors took nothing, be- 
 cause, as he claimed, the debtor's 
 equitable interest was not the subject 
 of an attachment. The court was of 
 opinion that the debtor had a valid 
 legal title at the time his stock was 
 attached and taken in execution, and 
 therefore that the plaintiff's title, de- 
 rived from him subsequently to the 
 attachment, was of no validity, and on 
 
 this ground dismissed the bill. It 
 appears to us, therefore, that there is 
 nothing in any of these cases that 
 ought to control our determination of 
 the present case, contrary to the strong 
 equitable claim of the plaintiff, as 
 shown in the facts found by the court, 
 whatever may be thought of some of 
 the remarks made by the judges in 
 giving reasons for the decisions. On 
 the contrary, the cases themselves, so 
 far as they decide that there can be no 
 legal transfer of stock except upon the 
 books of the company, or by an assign- 
 ment actually recorded on those books, 
 may be regarded as authorities show- 
 ing that the plaintiff has no legal title 
 to the stock and is therefore justified 
 in applying to a court of equity for 
 relief. 
 
 Shares in the stock of a corporation 
 are the subjects of sale, mortgage or 
 pledge, and are liable to attachment 
 and execution like other personal 
 property. And when the question is 
 between a vendee and an attaching 
 creditor of the vendor, as to which of 
 them has the better title, and it ap- 
 pears, as it does here, that the instru- 
 ment of transfer or assignment was 
 executed prior in point of time to the 
 service of the attachment, then, if the 
 vendee's purchase was made in good 
 faith and for a valuable consideration, 
 as to which no question is made in 
 this case, it would seem that in equity 
 his title ought to prevail, provided he 
 has done all that the law requires of 
 him, and all that it was possible for 
 him to do, in "taking such possession 
 as the nature of the property is sus- 
 ceptible of. In regard to chattels 
 there must be a substantial change of 
 possession accompanying and follow- 
 ing the sale, or it will, unexplained, 
 be conclusive evidence of a fraudulent 
 trust, which will render the sale void 
 as to creditors. Possession being the 
 usual indication of ownership in per- 
 sonal chattels, the law looks upon the 
 purchaser's neglect to take and hold 
 possession of the property purchased 
 as evidence that the sale was fictitious, 
 and therefore, as to the vendor's credi- 
 tors, treats the property as still his,
 
 16G 
 
 PlilVATE CoRPOKATIONS. 
 
 about $5,000 in cash, as a part of liur estate, no part of the prin- 
 cipal of which liad ever been paid over to her. The petitioner 
 was married in 185(3. The funds belonging to the j)etitioner in 
 
 notwithstanding the gale. So in re- 
 spect to the assignment of ordinary 
 choses in action, tliere must be notice 
 of the assignment to the debtor — the 
 assignment conveying but an equit- 
 able interest in the thing, and notice to 
 a trustee being in equity the ordinary 
 and only practicable mode in which 
 an assignee can protect his interest. 
 And in the case of the purchase of 
 stocli in a corporation, there must be 
 such a transfer of it as the legislature 
 in the charter or by statute piescribes ; 
 and notice of the assignment of choses 
 in action, and the transfer required by 
 statute of corporate stock, stand in 
 lieu of the taking and retaining of the 
 possession of personal chattels sold, 
 being the only possession the nature 
 of the property admits of. These ele- 
 mentary principles, for which surely 
 no authority need be cited, it is neces- 
 sary to bear in mind in considering a 
 case of this sort ; since, if a good rea- 
 son is shown for not giving notice of 
 the assignment of a chose in action, as 
 was the case in Bishop v. Holcomb, 10 
 Conn. 444, or for the failure to procure 
 a transfer of stock on the books of a 
 corporation, as in this case, which 
 would have been sittiicient to excuse 
 the taking possession of personal 
 chattels sold, then upon the same 
 principles upon which the taking pos- 
 session in the latter case would be 
 excused, it would seem that the act 
 which is ordinarily required in order 
 to perfect an assignment of a chose in 
 action or of stock in a corporation 
 ought in equity certainly to be also 
 excused. 
 
 The application of these suggestions 
 to the case in hand seems quite 
 obvious. We need not determine 
 whether the written assignment of 
 the stock by Mr. Jarvis passed the 
 legal title or only an equita'ble title, 
 since it is very clear that in either 
 case it passed all the substantial in- 
 terest, and left in him, if any thing, 
 only the technical legal title. 
 
 But the respondents claim that, so 
 long as this bare legal title remained, 
 with no knowledge on the part of his 
 creditors that he had made the assign- 
 
 ment, it was open to their attach- 
 ments as his to the same extent as be- 
 fore the assignment. V^'e think this 
 too broad a claim. The ground on 
 which stock sold but not legally trans- 
 ferred is open to attachment by the 
 creditors of the vendor is, as has been 
 suggested, the same upon which per- 
 sonal chattels sold but retained in the 
 possession of the vendor are liable to 
 attachment by the vendor's creditors. 
 The principle in each case is, that the 
 retention of possession is a badge of 
 fraud — that is, is evidence of a fraud- 
 ulent secret trust. This is the reason 
 given in the recent case of Shipman v. 
 Mtna. Ins. Co., 29 Conn. 245, why 
 certain stock, sold by a written bill of 
 sale but not transferred, was held to 
 pass to the trustee in insolvency of 
 the vendor ; the trustee being held to 
 have taken precisely as an attaching 
 creditor would have done. 
 
 But it is well settled that this re- 
 tention of possession in every case is 
 only a badge, that is, is evidence of 
 fraud, to be regarded as conclusive 
 where the retention of possession is 
 voluntary and unnecessary. 
 
 And it is to be observed that it is 
 the policy of the law which forbids 
 this retention of possession ; and the 
 liability of the property to attachment 
 is in a measure a punishment, either 
 for the actual fraud, or the negligence 
 of the vendor. Hence it is said in the 
 cases on this subject that " proof of 
 the payment of a full consideration, 
 or of the justice of the debt for which 
 the property is taken on legal process, 
 accompanied with the highest evidence 
 of the honesty of the transaction, will 
 not, in general, be sufficient to repel the 
 legal effect of neglecting an actual re- 
 moval of the property." Mills v. Camp, 
 14 Conn. 219 ; Kirtland v. Snow, 20 
 id. 23. The rule therefore is, to a 
 certain extent, punitive in its character, 
 creating something in the nature of a 
 forfeiture for the violation of the 
 policy of the law. It is on this ground 
 that the rule is relaxed where there 
 has been no voluntary violation of 
 this policy. If the manual delivery 
 of the article sold, in consequence of
 
 Members — Stockholders and Stock. 
 
 167 
 
 common -with funds of his liad been invested in stocks and other 
 securities, and it was agreed between them a short time before 
 lier marriage, she being then of full age, that she should select' in 
 
 its bulk or situation, is impossible, the 
 delivery and taking possession are ex- 
 cused. So where the vendor has used 
 due diligence to make delivery, and 
 the vendee to take possession, the 
 property is not open to attachment ; 
 as la the case of Mead v. Smith, 10 
 Conn. 34G, where it was held that a 
 purchaser in New York was to be 
 allowed a reasonable time to come 
 into Connecticut to take possession of 
 the property purchased ; and it is al- 
 ways held that a grantee is to be 
 allowed a reasonable time to get his 
 deed to the recording office. Now 
 whether this principle ought to be 
 applied in actions at law, depending 
 upon rigid legal principles, to the case 
 of the transfer of stock in a corpora- 
 tion, perhaps depends upon whether 
 we regard the dictum in the case of 
 The Newtown & Bridgeport Turnpike 
 Co. v. Northrop, as correct, " that the 
 transfer on the books of a company 
 does not operate by giving notice of 
 an antecedent conveyance, but is a 
 fact essentially necessary to originate 
 a title." But we are not called on to 
 discuss this question at this time. It 
 is only necessary to say tlierefore that 
 the respondents admit that such is 
 not the law generally ; and it is 
 claimed merely to be the law of Con- 
 necticut, founded upon peculiar views 
 which have obtained here. But 
 whether it is law or not, so far as re- 
 gards the bare technical legal title, 
 and to be adhered to in trials at law, 
 we are satisfied that it ought not to 
 be regarded as having the controlling 
 force and efficacy claimed for it in 
 equity. No such ground was taken 
 or suggested in the case of Shipman 
 V. The ^tna Ins. Co., before referred 
 to ; and the late case of The Bridge- 
 port Bank v. The New York & New 
 Haven R. R. Co., 30 Conn. 231, pro- 
 ceeded throughout upon the idea that 
 the plaintiffs had a good equitable 
 title to the stock claimed in that case. 
 In analogy then to the principles 
 which have been suggested, we think 
 the effort of the vendor to get the 
 assignment perfected on the transfer 
 books of the company, and on failure 
 
 to accomplish this his effort to make 
 the assignment as notorious as possi- 
 ble, constituting not only due diligence 
 but all the diligence on his part that 
 it was possible to exercise, ought to 
 exempt this retention of possession 
 from the condemnation of tlie law, if 
 a retention of possession ever can be. 
 Indeed the retention of possession was 
 as nearly nominal as possible. Assum- 
 ing then that the respondents are 
 correct in the claim that this retention 
 of possession involves the retention of 
 the naked legal title also, is this cir- 
 cumstance sufficient to distinguish 
 the case from those cases where the 
 retention of possession by the vendor 
 may be excused or justified? In the 
 case of the sale of personal property 
 the mere sale is ordinarily sufficient to 
 pass the legal title between the parties 
 before delivery ; while here it is 
 claimed that the formal transfer on 
 the books of the company was neces- 
 sary for that purpose. But ought this 
 distinction to be allowed to deprive 
 the petitioner of her property, when, 
 if it was of any other description, she 
 would confessedly hold it? Is the 
 distinction so material that the case 
 must rest upon the mere fact that a 
 bare legal title was retained against 
 the desire of the vendor and his ut- 
 most effort to convey it? This cer- 
 tainly is to place the case upon the 
 most technical ground possible, and it 
 would vest in corporations and their 
 officers the power to prevent the trans- 
 fers of their stock by the holders of it 
 — a power which it is too much to be 
 feared would not always be exercised 
 with the most disinterested motives. 
 It is true there will sometimes be 
 cases where a mere technical title will 
 prevail ; but it is desirable, so far as 
 practicable, that the substantial and 
 equitable ownership should be sus- 
 tained rather than a technical title ; 
 and so far as the rule was intended to 
 be punitive in its application, in order 
 to compel a conformity to the policy 
 of the law, there is no reason why a 
 party who has done all that he possi- 
 bly could should be made to suffer any 
 penalty. The plaintiff then, having
 
 1G8 Pkivate Corporations. 
 
 payment of the $5,000, from any of the stock tlien owned by 
 liiin, such an amount as at the par value would amount to that 
 sum. She thereupon selected the stock of tlie Hartford and New 
 Haven Railroad Company, and Mr. Jarvis assented tliereto, but 
 the stock was not at that time transferred to her, though an in- 
 strument in writinw- for the purpose of transferi-ing it was drawn, 
 but remained unexecuted. Afterward, on the 10th of August, 
 1857, the stock so intended to be transferred to her was attached 
 at the suit of the Middletown Savings Bank as the property of 
 Mr. Jarvis. Mr. Jarvis, not knowing that the stock was about to 
 be attached, had on the same day gone to Hartford for the pur- 
 pose of transferring it in pursuance of the agreement, but learn- 
 ing that the same had been attached about an hour before his ar- 
 rival, and believing that the attachment would soon be removed, 
 he deferred transferring it to the petitioner at that time. After- 
 ward, on the IGtli of September, 1857-, Mr. Jarvis transferred 
 forty-nine shares of the stock, subject to the attachment to the 
 petitioner, by the following instrument executed by him : 
 
 "For value received of Elizabeth H. Colt, of the city and 
 county of Hartford, I hereby assign and transfer unto the said 
 Elizabeth H. Colt all my right, title and interest in and to forty- 
 nine shares of the capital stock of the Hartford and New Haven 
 Railroad Company, now standing in my name on the books of 
 said company. Said stock is now subject to an attachment in 
 favor of the Middletown Savings Bank for the sum of $5,P00. 
 And I appoint, authorize and empower, as my attorney, H. Fitch, 
 Esq., of said city of Hartford, for me and in my name to trans- 
 fer said stock to said Elizabeth H. Colt on the books of said 
 company. In witness whereof, I have hereunto set my hand and 
 seal, this 16th day of September, 1857. 
 
 " WILLIAM JARVIS. (Seal.) " 
 
 "Witness, S. P. Conner." 
 
 On the same day he placed the instrument in the hands of 
 Horatio Fitch, then secretary of the company, for record, and for 
 whatever might be needful in relation thereto, according to the 
 
 done, or having had done for her, all acquired a perfect equitable title to 
 
 that could be done, is wholly without the stock, and she had taken every 
 
 fault. Her debt was of as high a possible means to obtain the legal 
 
 nature as the respondents'. She had title also."
 
 Members — Stockholdeks and Stock, 169 
 
 by-laws of the company, and at tho same time surrendered the 
 certificate of stock wliich he held ; but the president of the com- 
 pany then, and at all times thereafter before the bringing of the 
 present petition, declined to permit the instrument to be recorded, 
 or any transfer to be made on the books of the company, because 
 the shares had been attached as before stated ; and the secretary 
 declined for this reason to act further in the premises than to 
 enter on the certificate and transfer the time when the same were 
 received, and the instrument was not at the time of the attach- 
 ments of the respondents recorded upon the books of the com- 
 pany. The instrument of transfer w^s drawn in all respects ac- 
 cording to law, and according to the by-laws of the company, and 
 the original certificate was duly surrendered to the company, and 
 the president and secretary had no excuse for not permitting the 
 transfer to be recorded, unless the facts stated constitute in law 
 such an excuse. 
 
 The charter of the company provided that the stock of the 
 company should "be transferred in such manner as the by-laws 
 of said company [should] direct." The by-law of the company 
 with regard to the transfer of stock was as follows : 
 
 " 9th. Regular transfer books shall be kept by the secretary, at 
 the office of the company in Hartford only, and certificates of 
 stock such as are now in use shall be issued, signed by the presi- 
 dent and countersigned by the secretary. No transfer shall be 
 permitted but by stockholders in person, or by power of attor- 
 ney duly attested by at least one witness, and no transfer shall be 
 permitted but on the surrender of the certificate wliich had been 
 issued therefor, unless bonds of indemnity, approved by the board, 
 are given." 
 
 The stock remained subject to the attachment of the Middle- 
 town Savings Bank until the 27tli of March, 1858, when judg- 
 ment having been recovered and execution satisfied from other 
 property, the attachment was determined, and the stock was then 
 free from all incumbrances prior in date to the assignment to the 
 petitioner ; but the company still refused to cause the transfer to 
 be recorded upon their books, on the ground that the stock had, 
 subsequently to the assignment, been attached by the respondent 
 Ives, whose suit was then pending. The judgment obtained on 
 22
 
 170 Private Corporations. 
 
 tliis attaelimcnt liad, since the bringing of the present petition, 
 been otherwise satisfied. 
 
 Afterward, on the 17tli of December, 1858, writs of attach- 
 ment were levied on the stock, as the property of Mr. Jarvis, by 
 leaving copies thereof with the secretary of the company by the 
 officer serving the same, at the suits respectively of Truman 
 French and Edward S. llowland, two of the respondents ; each 
 placed writs of attachment in the hands of an officer with in- 
 structions to attach this stock. When the officer went to the 
 secretary of the company he M'as informed by the secretary that 
 the stock stood on the books of the company in the name of 
 Jarvis, but that he then held and had held for some time an as- 
 signment of the stock to the petitioner, and a power of attorney 
 from Mr. Jarvis to transfer the stock to her on the books of the 
 company. But the officer attached the stock notwithstanding 
 this information. The court held that the ecpiitable title vested 
 in the petitioner, and that, as the attaching creditors had notice 
 of the fact before the attachments were made, a court of equity 
 would protect her title. 
 
 Sec. 100. Pow^er of attorney to transfer, presumption arising from. — 
 Again, it has been held that where a holder of certificates of 
 shares of stock has an irrevocable power of attorney from the 
 former owner to transfer them, this is at least presumptive evi- 
 dence of the equitable ownership of the holder ; and if he is 
 further shown to be the holder for value without notice, his title 
 cannot be impeached, although the attorney's name is left in 
 blank.' The power of attorney in such "a case may be filled up, 
 and the transfer executed by any hona fide holder whose name is 
 inserted in the blank, and the power is not exhausted by the first 
 use, nor revoked by the maker's death, nor aiiected by passing 
 through any number of hands, until its execution by an actual 
 transfer of the stock under the power. The rules of the com- 
 pany as to the mode of making transfers of stock and requiring 
 the surrender of the certificate, although they may be insisted upon 
 by the company to protect its rights, yet they do not affect the 
 rights and interests of third persons who are ignorant of their 
 
 ' Leavitt v. Fisher, 4 Duer, 1.
 
 Members — Stockholders and Stock. 171 
 
 provisions ; and a transfer of stock upon tlie books of a company 
 to a honafide holder for value in such a case carries tlie title to 
 the stock, although the certificate previously issued was not surren- 
 dered at the time of the transfer.' And tlie transferee of shares 
 is not personally liable for unpaid installments due on such shares 
 to the company in the absence of any provision in the act of 
 incorporation making him liable under such circumstances, or any 
 stipulation to that eifect in his contract.' Subscriptions to the 
 stock of a corporation not paid are corporate property, and a 
 trust fund which can be reached by the creditors of the corpora- 
 tion," and, when a subscription is once perfected, the directors 
 have no power to release a subscriber from his engagement, to 
 the prejudice of such creditors,* not even by a purchase of his 
 shares,* consequently it would follow that they could not release 
 him by assenting to his selling the stock to a third person, so far 
 as the creditors of the company are concerned. 
 
 Sec. 101. Liability of assignees to the corporation. — The liability of 
 the assignee of stock to the corporation must depend upon the pro- 
 visions of his contract with the assignor, and the constating instru- 
 ments. If by these he is substituted to the rights of the assignor, 
 and subject to his liabilities, then there is sufficient mutuality 
 between the assignee and the corporation to make him liable on 
 such subscription. If the assignment is authorized by such 
 instruments, the liability to pay subsequent installments is 
 changed from the subscriber to the assignee, and the assignor of 
 the stock would be discharged from liability thereon. And 
 especially would this be the case if such assignment was made by 
 the express assent of the corporation." 
 
 ' New York, etc., R. Co. V. Schuyler, * Currier v. Lebanon Slate Co., 56 
 
 38 Barb. 534. N. II. 2U3; In re, County Palatine 
 
 * Palmer v. Ridge Mining Co., 34 Loan, etc., Co., L. li.,9 Ch. App. 691. 
 
 Penn. St. 288. « Mann v. Preutz, 2 Sandf. Cb. 258 ; 
 
 2 Bassett v. St. Albans, etc., Co., 47 Hudersfield Canal Co. v. Buckley,? T. 
 
 Vt. 313 ; Schaeffer v. Missouri, etc., R. 36 ; West Philadelphia Canal Co. 
 
 Ins. Co. , 46 Mo. 248. v. lunes, 3 Whart. 198 ; Mann v. Cur- 
 
 4 Hughes V Antietam Manuf. Co., 34 rie, 2 Barb. 294 ; Cowles v. Cromwell, 
 
 Md. 316 ; Putnam v. New Albany, 4 25 id. 413; Hall v. U. S. Ins. Co., 5 
 
 Biss. 365 ; Osgood V. King, 42 Iowa, Gill, 484; Bend v. Susquehanna 
 
 478; /n re Bachman, 12 Bankr. Reg. Bridge Co., 6 H. & J. 128; Hartford 
 
 223 ; Fisbkill v. Joliet Opera House, R. Co. v. Boorman, 12 Conn. 539. 
 
 79 111. 334; Melvin v. Lamar Ins. Co., "One who accepts a subscription 
 
 80 111. 446. made by another on his behalf, and
 
 172 
 
 Private Coeporations. 
 
 But a solvent and responsible party cannot, in case of the insol- 
 vency of the corporation or in anticipation of such an event, or 
 for the purpose of escaping liability for the unpaid amounts due 
 upon stock subscribed, assign the certihcates to another party, 
 and especially to an irresponsible person, and thereby be discharged 
 from liability.' And where the constating instruments or by-laws 
 require the substitution of the name on the books of the company, 
 the subscriber cannot without a compliance with such provisions 
 require the corporation to subrogate an assignee, and to look to 
 the assignee for payment of the amount due upon the subscription 
 of the original subscriber.^ 
 
 pays tlie calls made thereon and re- 
 ceives a certificate of ownership is 
 responsible as shareholders ; and it 
 makes no diflerence that his name does 
 not appear upon the transfer books 
 or the alphabetical li.stof stockholders 
 
 as a transferee of stock. And one 
 may become a shareholder without 
 receiving a certificate of stock." 1 
 Redf. on Rail., S] 53, par. 10 ; citing 
 Burr V. Wilcox, 6 Bosw. 198. 
 
 1 Mann v. Cooke, 20 Conn. 178 ; Ever- 
 hart V. West Chester, etc., R. Co., 28 
 Penn. St. 339 ; Graff v. Pittsburgh R. 
 Co., 31 id. 489 ; Hays v. Pittsburgh R. 
 Co., 38 id. 81. " If the former owner 
 was indebted to the corporation, and 
 the charter required all such indebt- 
 edness to be liquidated before trans- 
 fer of stock, such indebtedness will 
 remain a lien upon the stock in the 
 hands of the assignee." 1 Redf. on 
 Rail., i^§ 32-4. See, also. Union B'k v. 
 Laird, 2 Wheat. 390 ; Marlborough 
 Man. Co. v. Smith, 2 Conn. 579 ; Pitts- 
 burgh, etc., Co. v. Clark, 29 Penn. St. 
 146. 
 
 5 Ryder v. Alton, etc., R. Co., 13111. 
 516. See, silso, Ex parte Bennett, 18 
 Barb. 339 ; 5 De G. M. & G. 284 ; 27 
 Eng. L. & Eq. 572, where the court 
 say : " A subscriber for stock cannot 
 subrogate another person to his obli- 
 gation, without a substitution of his 
 name upon the books of the company, 
 or some equivalent act recognized by 
 the charter and by-laws of the com- 
 pany. * * * The principal diffi- 
 culty, in regard to liability for calls, 
 arises where there have been transfers, 
 and the name of the transferee not 
 entered upon the books of the com- 
 pany. For, whenever the name of the 
 vendee of shares is transferred to the 
 register of shareholders, the cases all 
 
 agree that the vendor is exonerated 
 (unless there is some express provision 
 of law by which the liability of the 
 original subscriber still continues), and 
 the vendee becomes liable for future 
 calls. And the vendee having made 
 such representation to the company, as 
 to induce them to enter his name upon 
 the register of shares, is estopped to 
 deny the validity of the transfer. And 
 even Avhere the party has represented 
 himself to the company as the owner 
 of shares, and sent in scrip certificates, 
 which had been purchased by him 
 claiming to be registered as proprietor, 
 in respect thereof, and had received 
 from the company receipts therefor, 
 with a notice that they would be ex- 
 changed for sealed certificates on de- 
 mand, he was held estopped to deny 
 his liability for calls, although his 
 name had not been entered upon the 
 register of shareholders, or any me- 
 morial of transfer entered as required 
 by the act. And where one has paid 
 calls on shares, or attended meetings 
 of the company, as the proprietor of 
 shares, he is estopped to deny such 
 membership." Citing Sheffield, etc., 
 R. Co. V. Woodcock, 2 Railw. C. 522 ; 
 S. C.,7 M. & W. 574; London and 
 Grand J. R. v. Freeman, 2 Railw. C. 
 468 ; S. C, 2 M. & G. 606 ; Chelten- 
 ham, etc., R. Co. V. Daniel, 2 Q. B.
 
 Members — Stockholders and Stock. 173 
 
 Sec. 102. Liability of purchasers from trustees. — It is a familiar 
 principle in equity jurisprudence tliat one who deals with a trus- 
 tee, in reference to property held in trust, must act in good faith ; 
 and if he is aware of the character in which the property is held, 
 he cannot purchase it, in satisfaction of an antecedent debt due 
 from the trustee to him, aior can he prejudice the rights of the 
 cestui que trust, by receiving the property as a pledge for the 
 payment of a personal debt due from the trustee, or for the re- 
 payment of money advanced for his personal benefit.^ 
 
 Sec. 103. Right of trustee to pledge In a recent case in Massa- 
 chusetts, the question presented was, whether the holder of a cer- 
 tificate of stock, in which his name W'as inserted as " trustee," 
 could pledge the same for his own personal debt so as to enable 
 the pledgee to have the benefit of the same, or whether the 
 pledgee was not put upon inquiry, from the character and limita- 
 tions of the certificate, and whether, if he take the same, he does 
 not do so at his peril, so far as any just rights of the cestui que 
 trust are concerned. On these questions, Foster, J., in deliver- 
 ing the oj^inion of the supreme court of that state, observes: 
 " Unless the word ' trustee ■ may be regarded as mere descriptio 
 personcB, and rejected as a nullity, there was plain and actual no- 
 tice of the existence of a trust of some description. A trust as to 
 personalty, or a chose in action, need not be expressed in writing, 
 but may be established by parol. And that the mere uses of the 
 word ' trustee ' in the assignment of a mortgage and note imports 
 the existence of a trust and gives notice thereof to all into whose 
 hands the instrument comes, has been expressly decided by this 
 
 281 ; Same v. De Medina, 3 Railw. C. Can. Co. v. Buckley, 7 T. R. 30 ; Ayles- 
 
 738 : London, etc., R. Co. v. Graham, bury R. v. Mount, 5 Scott N. R. 127 ; 
 
 id. 870; S. C, 1 Q. B. 271. West Phil. Canal Co. v. lunes, 3 
 
 If provisions are made for the trans- Whart. 198 ; Mann v. Currie, 2 Barb, 
 
 far of shares, and these are complied 294 ; Hall v. U. S. Ins. Co., 5 Gill, 484; 
 
 with, or waived by the corporation at Bend v. Susquehanna Br. Co., GH. &J. 
 
 the request of the assignee, his lia- 128; Aug. & Am. on Corp., chap. 15, 
 
 bility to calls is complete. Haddesfield § 534. 
 
 'Eland v. Eland, 4 M. & C. 420; of the trust, and the party who con- 
 
 Watkins v. Cheek, 2 Sim. & Stu. 199. curs in the sale is aware or has notice 
 
 Mr. Kent observes : " One obvious ex- of the fact that such is its object, for 
 
 ample of this is, where a devisee has in such a case they are coadjutors in 
 
 a right to sell, but he sells to pay his the fraud." 3 Story's Eq. Jur., g 1131«. 
 own debt, which is a manifest breach
 
 174 Private Corporations. 
 
 court.' It is insisted on behalf of the defendants, that even if 
 there was actual notice of the existence of a trust there was no 
 notice of its character, and that the trust might have been such as 
 to authorize the transfer which was made. * * ''' But in our 
 opinion the simple answer to this position is, that where one 
 known to be a trustee is found pledging tliat which is known 
 to be trust property to secure a debt due from the firm of which 
 he is a member, the act is owq prima facie unauthorized and un- 
 lawful, and it is the duty of him who takes such security to ascer- 
 tain whether the trustee has a right to give it. The appropria- 
 tion of corporate stock held in trust as collateral security for the 
 trustee's own debt, or a debt which he owes jointly with others, 
 is a transaction so far beyond the ordinary scope of a trustee's 
 authority, and out of the common course of business, as to be in 
 itself a suspicious circumstance, imposing upon the creditor the 
 duty of inquiry. This would hardly 'be controverted in a case 
 where the stock was held by ' A, B., trustee for C. D.' But the 
 effect of the word ' trustee ' alone is the same. It means trustee for 
 some one, whose name is not disclosed ; and there is no greater 
 reason for assuming that a trustee is authorized to pledge for his 
 own debt the property of an unnamed cestui que trust, than the 
 property of one whose name is known. In either case it is highly 
 improbable that the right to do so exists. The apparent differ- 
 ence between the two springs from the erroneous assumption that 
 the word ' trustee,' alone, has no meaning or legal effect. Inasmuch 
 as such an act of pledgingproperty is j^r/mfl'^y^c^'^ unlawful, there 
 would be little hardship in imposing on the party who takes the 
 security not only the duty of inquiry, but the burden of as- 
 certaining the actual facts at his peril. Where a partner assumes 
 to give for his own private debt the note of his firm, the creditor 
 who takes it must show that it was given with the assent of the 
 other partners, because it is an apparent misuse of the name of 
 the fii-m, and jyrima facie evidence of fraud. '^ But -we must not 
 go to that length in deciding the present case. Notice of the 
 existence of a trust is by all the authorities held to itnpose the 
 
 ' Sturtevant v. Jaques, 14 Allen, ^ Eastiuau v. Cooper, 15 Pick. 290. 
 523; Trull V. Trull, 13 id. 407. See, 
 also, Bancroft v. Consen, id. 50.
 
 Members — Stockholders and Stock. 175 
 
 duty of inquiring as to its character and limitations. And wliat- 
 ever is sufficient to put a person of ordinary prn<lence upon in- 
 quiry is constructive notice of every thing to which that inquiry 
 might have led." ^ 
 
 Sec. 104. Rights of cestui que trust against purchaser. — This doc- 
 trine is equally applicable to property in the capital stock of a 
 corporation as to other proj^erty. Where a person holding corpo- 
 rate stocks, as trustee for another, borrowed money on certificates, 
 by depositing them as collateral security for the repayment of 
 the money, and used the money in his own business, and they 
 were subsequently sold upon the failure of the trustees to repay 
 the loan ; and the certificates showed upon their face that they 
 were issued to him as trustee ; and the cestui que trust had never 
 given the trustee any authority to re invest the money, and did 
 not know that the certificates had been used as collateral security ; 
 under these facts, it was held by the supreme court of the United 
 States, that the parties who took the certificates had constructive 
 notice of the rights of the beneficiary, or cestui qxte trust, and 
 were liable to him to the full value of the stock." 
 
 But in California it has been held that the mere fact that a 
 person holding the certificates of stock and apparently having the 
 right of disposition of the same is styled " trustee," raises no 
 presumption that he has not authority to sell, or hypothecate it, in 
 
 iSliaw V. Spencer, 100 Mass. 383. ^ Duncan v. Jaudon, 15 Wall. 165. 
 See, also, Jones v. Smith, 1 Hare, 55 ; Where the court will declare a trust 
 Jones V. Williams, 24 Beav. 63 ; But- in shares, see Price v. Minot, 107 Mass. 
 trick V. Holden, 13 Mete. 355 ; Calais 49. A bank, whose certificate of stock 
 Steamboat Co. v. Van Pelt, 3 Black entitled the holder to so many shares 
 (U. S.), 377 ; Ashton v. Atlantic Bank, which are upon their face transfera- 
 3 Allen, 217; Hutching v. State Bank, ble on the books of the company, by 
 12 Mete. 431 ; Smith on Eq., tit. 1, attorney or in person, when the certi- 
 chap. 4, 10. Where an executor dis- ficates are surrendered, but not other- 
 poses of or pledges his testator's as- wise, and which allows a stockholder 
 Bets, in payment of, or as security for to transfer his stock on the books of 
 a debt of his own, the person to whom the bank, without producin"^ and sur- 
 they are sold or pledged will take rendering the certificates, is liable to a 
 them subject to the claims of the cred- bona fide transferee, for value, of the 
 itors of the legatees. Elliott v. Merry- same stock, who produces the certifi- 
 man, 1 Lead. Cas. in Eq. 89 ; Hill v. cates with properly executed power of 
 Simpson, 7 Ves. 153. See, also, Petrie attorney to transfer; and the fact that 
 V. Clark, 11 S. & R. 377 : Field v. the bank had no notice of the latter 
 Schieffelin, 7 Johns. Cli. 150 ; Walker transfer is immaterial. First Nat. 
 V. Tavlor, 4 Law Times (N. S.), 845 ; Bank v. Lanier, 11 Wall. 369. 
 2 Redf. on Wills, chap. 8, § 33.
 
 17 C) Private Corporations. 
 
 the usual course of business.' So, the corporation may be rospon- 
 sible to a cestui que trusty where it jiermits a transfer of its own 
 stock w'rongfull}" by an executor, by which the rights of innocent 
 ])arties are prejudiced. A corporation, whose stock is transferar 
 ble, is held to be the custodian of the shares, and is clothed with 
 the power to protect the riglits of every one from unauthorized 
 transfers. This trust is reposed in the cor])oration for the protec- 
 tion of individual interests; and like every other trustee the cor- 
 poration is bound to use due diligence and care in the execution 
 of the trust, and is responsible for any injury sustained by its 
 negligence or misconduct. As the corporation appoints the ofli- 
 cers before whom the transfers must be made, it is responsible for 
 their negligent acts, and must answer for their negligence or 
 default, wlienever the rights of third persons are concerned. Thus, 
 where a bank permitted a transfer of its stock, standing in the 
 name of a testator on its books, by the executor, it was held 
 chargeable with notice of the provisions of the will under which 
 he acted, and that'an omission to examine the will and the specific 
 bequests of the stock standing in the name of the testator, 
 amounted to negligence on the part of the bank, and rendered it 
 liable to the cestui que trust for any conversion of the stock thus 
 wrongfully transferred by the executor.^ 
 
 Sec, 105. Stockholder's right to vote. — Holding stock constitutes 
 membership in joint-stock corporations. 
 
 We have already referred to the riglit of members and stock- 
 holders, as such, to vote at all coi'porate meetings ; ° and we shall 
 hereafter have occasion to consider the right more fully when we 
 come to consider the subject of corporate and directors' meetings. 
 
 ' Brewster V. Sime, 42 Cal. 139. See, transfer on books, see Bond v. Mount 
 
 also, Albert v. Savings Bank, 1 Md. Hope Iron Co., 99 Mass. 505. In New 
 
 Cli. 407. But in Pennsylvania, one York, a valid gift, in view of death, 
 
 holding stock as " trustee of M. Ci.," it maybe made by simple delivery of 
 
 was held, could not insist upon its the certificates, with intent to transfer 
 
 transfer by the corporation, without the stock, even though the certificates 
 
 exhibiting his authority for so doing, contain a general restriction upon this 
 
 Bayard v. Farmers, etc., Bank, 52 mode of transfer. Walsh v. Sexton, 
 
 Penn. St. 232. 55 Barb. 251. See «n^e, p. 
 
 ** Lowrey v. Commercial, etc.. Bank, ^ But it does not appear always 
 
 Taney, 310. See, also, Shaw v. Spen- essential thatthe owners of stock have 
 
 cer, 100 Mass. 382. But see Albert v. a certificate thereof, to entitle them to 
 
 Savings Bank, 1 ]VId. Ch. 407. As to vote at au election for directors. Beck- 
 
 the right of an assignee to demand a ett v. Houston, 32 lud. 393.
 
 Members — Stockholders and Stock. 177 
 
 This right, we may here observe, is incident to the relation which 
 the corporators bear to the corporation ; and is one of those abso- 
 hite rights, to deprive him of which would be a violation of his 
 constitutional rights. 
 
 Sec. 106. Rights of stockholders to access to books. — It will be 
 evident from the relation which the stockholder sustains to the 
 corporate body, that he should have the right of access to, and 
 examination of, the books and records of the corporation, and be 
 restricted in this respect only by the charter, or such reasonable 
 rules and by-laws in reference thereto, as are adopted in con- 
 formity with the fundamental law of its institution, and public 
 policy. If he is not restricted by these, a stockholder should 
 have a right to inspect the books at reasonable and proper times ; 
 and if this right is denied he would be entitled to the compul- 
 sory process of Tnandannus to allow him so to do.' And if he is 
 refused such right he could maintain an action for damages sus- 
 tained by reason therefor. But, in an action against the corpora- 
 tion to recover a penalty provided by statute for such a refusal, it 
 was held that the complainant must show that the officer u]3on 
 whom the demand for inspection was made had notice that the 
 person making the demand was entitled to the inspection." 
 When a statute prescribes that the stock and transfer books of 
 incoi-porated companies shall be open to the examination of stock- 
 holders, a stockholder cannot be deprived of the right to inspect 
 them because they are kept in a particular way, or because they 
 contain, besides the information to which he is entitled, other in- 
 formation which he has no right to demand. If the corporation 
 in such a case does not keep the books or records in the manner 
 and form required, or as the statute prescribes, it is its duty to 
 permit an inspection of such as it does keep, for the puq^ose of 
 recording transactions, which the law gives the stockholders a right 
 to know. 
 
 And when such a statute provides that the books of transfer of 
 stock, and the books containing the names of the stockholders of 
 
 ' Cockburn v Union Bank, 13 La. ^Williams v. College, etc., R. Co., 
 Ann. 289; People v. Pacific Mail 45 Ind. 170 (1873). 
 Steamship Co , 3 Abb. Pr. (N. S.) 364 ; 
 34 How. Pr. 193. 
 
 23
 
 178 Pbivate Corporations. 
 
 such company shall be open to the examination of every stock- 
 holder for thirty days previous to any election for directors, a 
 stockholder has a right to inspect not only the book containing 
 the names of the stockholders, but to take memoranda or copies 
 of the names. And if an officer, having charge thereof, refuses 
 to permit such memoranda or copies to be made, he incurs the 
 penalty prescribed by the statute for a refusal to allow an inspec- 
 tion of such books by stockholders.^ 
 
 Sec. 107. Holders of preferred stock. — It frequently occurs that 
 by virtue of authority conferred upon the corporation or vested in 
 the directors preferred stock may be created and certificates 
 therefor disposed of by the corporation.^ The stock certificates, 
 issued therefor, usually show that the stockholder is entitled to 
 the application of the net earnings of the road, to the payment of 
 dividends or interest on such stock ; and the holders thereof are 
 entitled to the same general rights and privileges, and are subject 
 to the same liabilities as the holders of the original or common 
 stock, which we have already considered.^ But although the cer- 
 tificates of shares of preferred and guaranteed stock of a corpora- 
 tion contain a clause that the stock is entitled to dividends at a 
 certain rate per annum, out of the net earnings of the company, 
 and that the payment of dividends is guaranteed, the holder of a 
 certificate does not thereby become a creditor of the corporation, 
 and cannot maintain an action at law against the corporation for 
 a failure to declare and pay dividends.* 
 
 Sec. 108. when it can be issued ; dividends on. — It is generally 
 received doctrine that preferred shares of stock can only be issued 
 when the power so to do is expressly conferred upon the corpora- 
 
 1 Cotheal v. Brower, 10 Barb. 216 ; Coates v. Nottingham, etc., R. Co., 30 
 
 5 N. Y. 562. See, also, as to a custom Beav. 86. 
 
 of the company in such cases, to allow ^ For a construction of certificates of 
 
 such transfer to be made without the preferred stock, see Bailey v. The 
 
 consent of the board of directors, Hannibal, etc., R. Co., 1 Dill. (U. S. 
 
 where the by-laws provided for such C. C.) 174 ; Matthews v. Great North- 
 
 conseniw Chambersburg Ins. Co. v. ern, etc., R. Co., 28 L. J. Ch. 375; 
 
 Smith, 11 Penn. St. 120. Coey v. Belfast, etc., R. Co., Ir. Rep., 
 
 ^ Green's Brice's Ultra Vires, 145 and 2 C. L. 112. 
 
 notes ; Corry v. Londonderry, etc., R. ■* Williston v. M. S. & N. J. R. Co., 
 
 Co , 29 Beav. 263 ; 30 L. J. Ch. 290; 13 Allen, 400. See, also, Taft v. Hart- 
 ford, etc., R. Co., 8 R. I. 310.
 
 Members — Stockholders and Stock. 179 
 
 tion,' although it has sometimes been claimed to exist as an inci- 
 dent to the power to borrow money, it being considered as an 
 inducement to loans, and a method of security. This stock has 
 priority over the common stock, and is first entitled to dividends 
 from the profits. There is another distinction sometimes made 
 between preferred and common stock, namely, that in reference 
 to the latter the directors have a large discretion in reference to 
 declaring dividends on the same, and the court will seldom inter- 
 fere with this discretion unless the abuse is manifest. Whereas, 
 in the former the court will inquire into the affairs of the corpo- 
 ration with greater scrutiny, and require payment of the current 
 profits or net earnings on such stock, according to the terms of 
 the contract, whenever justice and equity may require it." But 
 it is held that payments of interest on preferred stock can only be 
 made out of profits bona fide earned ; that a corporation has no 
 power to pay such interest in excess of such earnings, and that 
 all contracts for such purposes would be void.' 
 
 If a power to issue preferred shares exists, it is held that it 
 must be exercised solely for the purpose of obtaining capital.* 
 
 Sec. 109. Scrip and preliminary subscriptions. — Scrip, in the sense 
 used here, is a kind of certificate sometimes issued in England by 
 the projectors of companies, entitling the holder to become a 
 member and stockholder of a future company, " The liability 
 imposed upon the scrip receiver," observes Mr. Brice, " will 
 principally depend upon the engagement he has entered into with 
 the projectors. He may negotiate the scrip, but he will, nevei- 
 
 ' Green's Brice's Ultra Vires, 145 ; ^ Pittsburg, etc., R. Co. v. Allegheny 
 
 Re National Patent Steam Fuel Co., Co., 63 Penn. St. 126 ; Lockhart v. Van 
 
 ex parte Worth, 4 Drew, 529 ; 28 L. J. Alstyne, not reported, Mich. ; Am. 
 
 Ch. 589 ; Hutton v. Scarborough Cliff L. Reg. (N. S.)180; Curran v. Arkan- 
 
 Hotel Co., 3 Dr. & Sm. 521. sas, 15 How. (U. S.) 304. 
 
 2 Bailey v. R. Co., 17 Wall. 96 ; St. * Herals v. Great Western R. Co., L. 
 
 John V. Erie R Co., 10 Blatchf. 271 
 affirmed, 22 Wall. 136 ; Bates v. An 
 droscoggin, etc., R. Co., 49 Me. 491 
 Hazlehurst v. Savannah, etc., R. Co. 
 43 Ga. 13; Thompson v. Erie, etc., R 
 
 R.. 3 Ch. 262. See, also, Henry v. Great 
 Northern R. Co., 4 K. & J. 1 ; 27 L. J. 
 Ch. 1 ; Corry v. Londonderry, etc., R. 
 Co., 29 Beav. 263 ; 30 L. J. Ch. 290 ; 
 
 Coates v., Nottingham Water- Works 
 
 Co., 45 N. Y. 468 ; Prouty v. Michigan Co., 30 Beav. 86. As to the rights of 
 
 S., etc., R. Co., 1 Hun, 655 ; McLough- holders in the different kinds of pre- 
 
 lin V. Detroit, etc., R. Co., 8 Mich, f erred shares, see Matthews v. Great 
 
 100; Williston v. Michigan S., etc., Northern R. Co., 28 L.J. Ch. 375; 
 
 R. Co., 13 Allen, 400 ; Barnard v. Ver- Coey v. Belfast, etc., R. Co., I. R., 2 
 
 mont & Massachusetts R. Co., 7 id. 512. C. L. 112.
 
 180 Private Cokporations. 
 
 theless, remain liable, if the company be formed, until the name 
 of the purchaser be entered upon the register.'" The consid- 
 eration for the issue of such scrip is usually the obligation of the 
 party receiving it to take shares in the future company. 
 
 In this country preliminary subscriptions may generally be 
 made, and in such cases the rights secured thereby become vested 
 in the corporation when formed, as the right to membership 
 thereby pledged is sufficient consideration for such subscription, 
 and the company generally may recover calls on such subscrip- 
 tions after its incorporation, the same as though they were made 
 after its complete organization. In fact, it is frequently required 
 in organizing, under general statutes, not only that preliminary 
 subscriptions be made, but that a certain percentage of the sum 
 be paid as a condition precedent to the organization, and these 
 subscriptions, if the corporation is finally organized, become bind- 
 ing upon the subscriber, whether scrip is issued therefor or not, 
 and they become a part of the assets of the corporation,'* 
 
 Sec. 110. stock defined, etc. — The term " stock," as applied to 
 joint-stock corporations, is the money or capital invested in the 
 business, and it is usually divided into shares of equal value, held 
 by owners or stockholders, the evidence of which is usually fur- 
 nished by certificates of the same, signed and authenticated by 
 proper officers of the corporation with the corporate seal attached. 
 
 The term " capital stock," as used in the act of incorporation in 
 New Jersey has been defined as the amount contributed or ad- 
 vanced by the stockholders as members of the company, and not 
 to refer to the property of the corporation.^ And, as we have al- 
 
 ' Green's Brice's Ultra Vires, 148; Hamilton, etc., R. Co. v. Rice, 7 Barb, 
 
 citing Midland G. W. R. Co. v. Gor- 157 ; Reformed, etc., Church v. Brown, 
 
 don, 16 M. &W. 804; 16 L. J Ex. 29 id. 335; S. C, 4 Abb. Ct. App. 
 
 166. But see Jackson v. Cocker, 4 Dec. 31 ; Penobscot, etc., R. Co. v. 
 
 Beav. 59. Dummer, 40 Me. 172 ; Watkins v. 
 
 2 On this subject see Anderson v. Eames, 9 Cush. 537; People's Ferry- 
 Newark, etc., R. Co., 12 Ind. 376; Co. v. Balch, 8 Gray, 303; Danbury, 
 Johnson v. Wabash, etc.,R. Co., 16 id. etc., R. Co. v. Wilson, 22 Conn. 435; 
 389 ; Heaston v. Cincinnati, etc., R. Taggart v. West Maryland R. Co. 24 
 Co., id. 275; Buffalo, etc., R. Co. v. Md. 563 ; Griswold v. Peoria Univ.', 26 
 Dudley, 14 N. Y. 336 ; Eastern P. R. 111. 41 ; Johnston v. Ewing Female 
 Co. V. Vaughan, id. 546; Lake On- Univ., 35 id. 518. 
 tario R. Co. v. Mason, 16 id. 451; ^ State v. Morristown Fire Ins. 
 Rensselaer P. R. Co. v. Barton, id. Assoc, 23 N. J. L. 195, 
 457 ; Stanton v. Wilson, 2 Hill, 153 ;
 
 Members — Stockholders and Stock. 181 
 
 ready seen, shares of stock of a corporation are personal prop- 
 erty.' The term " joint-stock " coi-poratiou means such a cor})ora- 
 tion as has for its object a dividend of profits among its stock- 
 holders. And such dividends are personal property.' 
 
 Sec. 111. Issuing certificates of shares. — Where a charter pro- 
 vided that the president and directors should cause a certificate to 
 be given to each shareholder, signed by them, and countersigned 
 by the treasurer, certificates issued by the president alone, signed 
 by him and countersigned by the treasurer, without authority of 
 the directors, and without consultation, were held void, and that 
 as the president in issuing such certificates acted without the scope 
 of his authority, the corporation were not liable for his act." But 
 in order to make one an owner of stock in a corporation, it is not 
 usually necessary that a certificate of his shares shall have been 
 issued, or that the fact of ovniership should appear on the books 
 of the corporation, but it may be shown by parol.'' And a certifi- 
 cate issued in the ordinary form of a certificate of stock, but con- 
 taining a promise in addition thereto on the part of the corpora- 
 tion to pay interest thereon until the happening of a certain event, 
 constitutes the person to whom it is issued a stockholder, and the 
 corporation cannot, by a vote of the stockholders, oblige him to 
 receive their bond instead of money for the interest upon such 
 certificate.* If a part of the capital stock remains untaken, the 
 right to issue it is a corporate franchise, and the property thus 
 held is in trust for the benefit of the corporators, and if disposed 
 of, it must be for the benefit of all the stockholders. If the di- 
 rectors disposed of it unequally to corporators, those injured 
 thereby may have an action against the corporation for the damage 
 
 ' Arnold v. Ruggles, 1 R. I. 165. the corporation to issue them, and a 
 
 ^ Tippets V. Walker, 4 Mass. 595. refusal so to do would justify a pro- 
 
 3 Holbrook v. Fauquier, etc., Turnp. ceeding in chancery to compel it to 
 
 Co., 3 Cranch (C. C), 425. issue them, and for want of them the 
 
 •• Chaffin V. Cummings, 37 Me. 76. stockholder should not be prejudiced. 
 
 And the making of a certificate and Chester Glass Co„ v. Dewey, 16 Mass. 
 
 mailing of it to a stockholder was re- 94 ; Field v. Pierce, 103 id. 353. See, 
 
 garded as the issuing of it. Jones also, Hoagland v. Bell, 36 Barb. 57. 
 
 V. Terre Haute, etc., R. Co., 17 How. ' McLaughlin v, Detroit, etc., R. Co., 
 
 Pr. 539 ; Agricultural Bank v. Burr, 8 Mich . 100. A corporation having 
 
 84 Me 356 ; Same v. Robinson, id. 375; stock not taken may issue certificates 
 
 Ellis V. Essex Merrimack Bridge Co., therefor, taking in payment its own 
 
 2 Pick. 343, If a party was entitled to bonds. Loham v. N< T., etc., R. Co., 
 
 the certificate it would be the duty of 3 Sandf. ^9.
 
 182 Private Cobporationb. 
 
 sustained. Thus, where a resolution of the directors, carried into 
 effect, provided for the distribution of such stock among all the 
 stockholders who were not in arrears on shares already taken by 
 them, and excluded those who were so in arrears, it was held to 
 be an unlawful imposition on those in arrear, and a violation of 
 the rights of a corporator who was ready and offered to take his 
 portion of the new shares.' 
 
 Sec. 112. Certificates unlawfully issued. — If stock certificates are 
 unlawfully issued, they will be valid in the hands of innocent 
 holders, although the consideration, as between the corporation 
 and the party to whom they are issued, may entirely fail. Thus, 
 where the president of a corporation, in pursuance of an agree- 
 ment by the directors, issued certificates of certain shares of stock 
 to contractors, upon entering into a contract to build the railroad 
 in which the corporation was interested, and as a consideration 
 therefor, and the action of the president was subsequently ap- 
 proved by the directors, and by a meeting of the stockholders ; it 
 was held that though the road was never built, and the stock 
 never paid for, so that the corporation was in equity entitled to 
 have it returned, this did not impair the validity of the stock or 
 the legality of an election of directors chosen by votes given upon 
 the stock so issued." 
 
 And where, by statute, the affixing of the treasurer's signature 
 to the certificates of shares of stock is required, this was held to 
 be a ministerial duty, merely, and that it might be performed by 
 him even after the dissolution of the corporation.' So certificates 
 of stock are not necessarily invalid because issued at a place out- 
 side of the state in which the corporation was organized and has 
 its principal place of business.* 
 
 A stock certificate, issued by a corporation having the power to 
 issue the same, is a continuing affirmation of the ownership of the 
 
 ' Reese v. Bank of Montgomery Co., "^ Savage v. Ball, 17 N. J. Eq. 142. 
 
 31 Penn. St. 78. But where an act of * Sewall v. Chamberlain, 16 Gray, 
 
 the legislature authorizes the issue of 581. See, also, as to the right -of a 
 
 preferred stock, if it is accepted by the stockholder to certificates of shares, 
 
 stockholders, it empowers the direct- Field v. Pierce, 103 Mass. 253 ; James 
 
 ors to issue the same, although indi- v. Cincinnati, etc., R. Co,, 2 Dis. (O.) 
 
 vidual stockholders may oppose it. 261. 
 
 Curry v. Scott, 54 Penn. St, 270. * Courtright v. Deeds, 37 Iowa, 508.
 
 Members — Stockholders and Stock. 183 
 
 specified amount of stock by the person mentioned therein, or his 
 assignee, until it is withdrawn in some manner recognized by 
 law ; and a purchaser in good faith has a right to rely thereon, 
 and to claim the benefit of an estoppel in his favor, as against the 
 corporation, in all cases where the original ownor could make such 
 claim.^ And a purchase from one other than the original holder 
 of the stock, with the usual assignment and power of attorney 
 executed in blank, in an action against the corporation for a re- 
 fusal to transfer the stock on its books, is not bound to show 
 aiBrmatively the title of his immediate vendor, and the presump- 
 tion is that the stock was transferred and the certificates delivered 
 in the usual course of business.' 
 
 Sec. 113. Fraud in issuing stock certificates. — The sale of Stock, 
 by the directors of a corporation, at a less rate than the price 
 fixed in the charter, is a fraud upon the stockholders ; and the 
 issuing of a bond convertible into stock is the same in effect as 
 the sale of so much stock, and the sale of such a bond is unlaw- 
 ful and void ; and stock thus taken is, in the hands of a party 
 with notice, subject to the right of prior subscribers to have it 
 reduced to the charter value of the shares.^ And the purchaser 
 of stock illegally issued by the directors of a company at less than 
 the charter price may rescind his contract and recover from his 
 vendor, who participated in the illegal issue of the stock, the 
 money paid for the same.* 
 
 Sec. 114. Shares and income, character and quality of, as property. — 
 
 "A share is a mere ideal thing — it is no portion of matter, it is 
 no portion of space, it is not susceptible of tangible and visible 
 possession actual or constructive. It is not, therefore, a chattel 
 personal susceptible of possession actual or constructive." ^ 
 
 Corporations may take and hold real or personal property, but 
 the members are not as such entitled to, or invested with the 
 
 ' Holbrook v. New York Zinc Co., eludes stock in corporations ; Field v. 
 
 57 N. Y. 616. Montmollin, 5 Bush, 455 ; and it is the 
 
 ' Id. subject of conversion like oth^er prop- 
 
 3 Sturges V. Stetson, 1 Biss. (U. S. erty. Kuhn v. McAllister, 1 Utah, 
 
 C. C.)246. 273. And the words "shares" and 
 
 * Arnold v. Rugglee, 1 R. I. 165. " stock " are synonymous terms. Har- 
 
 *Fosdicb V. Sturges, 1 Biss. (U. S. risen v. Vines, 46 Tex. 15. 
 
 C. C.) 255. The word " property " in-
 
 184 Private Corpoeations. 
 
 property thiis lield. " The interest of each individual shareholder 
 is a share of the net produce of both, when brouglit into one 
 fund." * It is not unusual for statutes to declare the shares and 
 dividends to be personal property ; and to be transferable like 
 other personal property.' But in the absence of any statutory 
 provision, it would be regarded as such, whether they arise out of 
 real or personal property. On this subject Baron Alderson in 
 a case before him observed : " In the first place, there is a cor- 
 poration to whose management the joint stock of money sub- 
 scribed by its individual corporators is intrusted. They have power, 
 at their pleasure, of vesting it in real estate, or in personal estate, 
 limited only as to amounts, and of altering fi'om time to time the 
 species of property they may choose to hold ; and in order to 
 give them greater facilities and advantages, certain powers are 
 intrusted to the undertakers, by the legislature, and that even 
 before they were constituted a body corporate, of laying down 
 pipes, and thereby occupying land for the purposes of their un- 
 dertaking. These powers render the use of joint stock by the 
 body corporate more profitable, but they form no part of their 
 joint stock itself ; and one decided test is this, that they belong 
 inalienably to the corporation ; whereas all joint stock is capable 
 expressly of being sold, exchanged, varied, or disposed of, at the 
 pleasure of the corporate body." ^ 
 
 Sec. 115. interest of stockholders in corporate property. — The inter- 
 est of the shareholder, and tiie character and quality of his inter- 
 est, was well stated in the opinion of Rogers, J., in a case in the 
 supreme court of Pennsylvania. He says : " Money due on bond 
 or note, or other contract, for the detention of chattels, or for 
 torts, is included under the head of title to things in action. Bank 
 shares would seem to be included in that class, as they merely en- 
 
 > Bradley v. Holdsworth, 3 M. & W. 268. See, also, Durkee v. Stringham, 
 
 422 ; Waltham Bank v. Wallham, 10 8 Wis. 1 ; Wordsworth on Joint-stock 
 
 Mete. (Mass.) 334 ; Tippets v. Walker, Companies, 288 ; Edwards v. Hall, 6 De- 
 
 4 Mass. 595. G. M. & G. 74 ; 35 Eng. L. & Eq. 433 
 
 2 Stat. Geo. 1, chap. 19, § 9; Wil- Wildman v. Wildman, 9 Ves. 174 
 liams'Lawof Personal Prop. 151. See, Kirby v. Potter, 4 id. 751 ; Planters 
 also, Union Bank of Tenn. v. State, 9 Bank v. Leavens, 4 Ala. 753 ; Denton 
 Yerg. 490. v. Livingston, 9 Johns. 96. 
 
 3 Blight V. Brent, 2 You. & C. (Ex.)
 
 Members — Stockholders and Stock. 185 
 
 title the holder to receive on demand a portion of the profits oi- 
 earnings of the bank, and never in this countr}' have been con- 
 sidered as other than chattels, giving no such interest to the holder 
 as that of a partner in a partnership transaction. I know of no 
 case in which the point has been directly adjudged, but in Giljpan 
 V. Howell ^ such would seem to be the opinion of the court. In 
 that case so far from treating stock as real estate, or as personal 
 property in possession (as a horse, for example), it is ruled, that 
 when one purchases stock for another, and takes a transfer on the 
 books of the bank in his own name, it is sufficient if he retains so 
 much of the same stock as will enable him to transfer to his princi- 
 pal on demand the whole amount purchased for him, and that it is 
 not necessary that he should retain the identical scrip or shares. 
 Although the bank shares may be said to indicate or represent the 
 portion of interest which the shareholder has in the property of 
 every kind belonging to the company, yet it cannot be said, with any 
 propriety, that he is in the actual possession of the common property 
 of the bank, any more than the owner of a bond or ' note is in 
 possession of the money of which it is the representative. The 
 only possession the holder has is the certificate, which is merely 
 the evidence of his interest, as title deeds are of title to lands, but 
 not of possession. That stock cannot be considered in the light 
 of a thing in possession, and personal estate, as distinguished from 
 a chose in action^ would also appear from this, that at common 
 law it could not be taken in execution and sold for debt." ^ 
 
 Sec. 116. How stockholder's interest is conveyed. — According 
 to the recognized principles of the law, personal chattels are 
 material things capable of actual and manual possession, such as 
 money, jewels, corn, etc. These are usually transferred on a sale 
 by actual delivery of the material thing. But a chose in action is 
 a right of action merely ; as money due on a note or other con- 
 tract or damages for a wrong.^ The learned Chief-Justice Shaw 
 has clearly illustrated this distinction of personal property, into 
 
 >5 Penn. St. 57. Albrecht, 13 Sim. 189 ; Hargreaves v. 
 
 2 Slaymaker v. Gettysburgh Bank,, Parsons, 13 M. & W. 561. 
 
 10 Penn. St. 373. See, also. Humble v. ^ 2 Kent's Com. 285 ; Long on 
 
 Mitchell, 11 A. & E. 205 ; Duncuft v. Sales, 2. 
 
 24
 
 186 Pbivate Corporations. 
 
 chattels and merely choses in action, in the following language : 
 " According to the modern decisions courts of law recognize the 
 assignment of a chose in action, so far as to vest an equitable in- 
 terest in the assignee, and authorize him to bring an action in the 
 name of the assignor and recover a judgment for his own benefit. 
 But in order to constitute such an assignment two things must 
 concur : first the party holding the chose in action must, by some 
 significant act, express his intention that the assignee shall have 
 the debt or right in question, and, according to the nature and 
 circumstances of the case, deliver to tbe assignee, or to some per- 
 son for his use, the security, if there be one, bond, deed, note, or 
 written agreement, upon which the debt or chose in action 
 arises ; and secondly, the transfer shall be of the whole or entire 
 debt or obligation, in which the chose in action consists, and, as 
 far as practicable, place the assignee in the place of the assignor, 
 so as to enable the assignee to recover. the full debt due, and to 
 give a good and valid discharge to the party liable. The transfer 
 of a chose in action bears an analogy, in some respects, to the 
 transfer of personal property ; there can be no manual extradition 
 of a chose in action, as there must be of personal property to con- 
 stitute a lien ; but there must be that which is similar, a delivery 
 of the note, certificate, or other document, if there is any, which 
 constitutes the chose in action, to the assignee, with full power to 
 exercise every species of dominion over it, and the renunciation 
 of any power over it, on the part of the assignor. The intention 
 is, as far as the nature of the case will admit, to substitute the 
 assignee in the place of the assignor as the owner." ^ 
 
 Sec. 117. Character and quality of certificates. — Certificates of 
 stock are not securities for money, nor are they, as we have seen, 
 possessed of the qualities of commercial obligations, and, there- 
 fore, subject to the rules and principles of the law merchant, re- 
 lating to negotiable notes or bills of exchange.^ T^hey are merely 
 the muniments of title, and evidence of the holder's right and 
 title to given shares in the property and franchises of the corpora- 
 
 ' Palmer V. Merrill, 6 Cush. 282. R. Co. v. Schuyler, 3 E. P. Smith 
 
 '' Mechanics' Bank v. New York, etc., (17 N. Y.), 592.' 
 R. Co., 13 N. Y. 600 ; New York, etc.,
 
 Members — Stockholders and Stock. 187 
 
 tion, of which such shares constitute him a member.' But the 
 delivery of the certificates with a proper assignment of tlie same, 
 on a sale thereof, usually renders the sale complete.' They 
 are in the nature of a chose in action, and like a note ' or 
 bill of exchange they may be transferred by assignment and 
 delivery, subject only to such reasonable rules as may be pre- 
 scribed therefor by the corporation, for mutual advantage and 
 protection; the assignee being substituted thereby in the place 
 of the assignor and entitled to all his rights and pri\aleges, 
 conferred by the certificate. The assignee, however, must take 
 the certificate subject to all the equities which the corporation 
 may have against the same. But the holder may transfer his 
 interest to a purchaser, though the transfer be not made as re- 
 quired by the rules or by-laws of the corporation.' 
 
 In such cases the assignee takes the stock subject to all equities 
 of the corporation and of every other person.* It is clear that 
 a certificate of stock transferred in blank is not a negotiable 
 instrument. Each of these certificates is expressed on its face 
 to be transferable only on the books of the company by the 
 holder thereof, in person, or by a conveyance in writing recorded 
 in said books, and a surrender of this certificate. iSIo commercial 
 usage can give such an instrument the attributes of negotiable 
 paper. However many intermediate hands it may pass through, 
 whoever would obtain a new certificate in his own name, must 
 fill out the blanks, so as to derive title to himself directly from 
 the last recorded stockholder, who is the only recognized and 
 legal owner of the shares." 
 
 ' Mechanics' Bank V. New York, etc.. And where the charter required a 
 
 R. Co., 14 N. T. 637 ; New York, transfer on the books of the cor- 
 
 etc. , R. Co. V. Schuyler, 17 id. 592. poration, it is under no obligation 
 
 See, also, Hutchins v. State Bank, 12 to permit a transfer to be made by a 
 
 Mete. (Mass.) 421 ; Slaymaker v. person claiming to be an assignee, 
 
 Gettysburgh Bank, 10 Penn. St. 373. where the assignment and power of 
 
 * Howe V. Starkweather, 17 Mass. attorney is executed to some person in 
 
 243 ; Sargent v. Franklin Ins. Co., 8 blank. Dunn v. Commercial Bank, 11 
 
 Pick. 98 ; United States v. Vaughan, Barb. 580. See, also, Gilbert v. Man- 
 
 3 Binn. 394 ; Munn v. Barnum, 24 Chester Iron Co., 11 Wend. 627. 
 
 Barb. 283; Noyes v. Spaulding, 27 * Stebbins v. Phoenix Fire Ins. Co., 
 
 Vt. 420 ; Orr V. Bigelow, 20 Barb. 21 ; 3 Paige's Ch. 350 ; Mechanics' Bank v. 
 
 14 N. Y. 556. New York, etc., R. Co.. 13 N. Y. 599 ; 
 
 2 Gilbert v. Manchester Iron Man. New York R Co. v. Schuyler, 34 id. 
 
 Co., 11 Wend. 627 ; Marblehead Social 30. 
 
 Ins. Co. V. Quiner, 10 Mass. 476; 'Greenwood v. Lake Shore R. Co., 
 
 Sargent v. Essex Marine R. Co., 9 10 Gray, 373. 
 Pick. 202.
 
 188 Private Cokporations. 
 
 Sec. 118. Transfer of shares ; how made. — We have already 
 alluded to the right of the holder of shares of capital stock to 
 sell and transfer the same, as any other personal property may be 
 sold and transferred, and shown that any restraint upon such 
 right would be unconstitutional and void. But it is usually pro- 
 vided by the articles of association or by-laws, that transfers of 
 shares of stock shall be recorded on the proper books of the 
 company, kept for that purpose. And where a deed of settle- 
 ment of a banking company provided that no person should be 
 entitled to become a transferee of a share, unless he was approved 
 by the directors, it was held that they must exercise their power 
 reasonably.' And the better opinion now seems to be, that 
 clauses in the acts of, or articles of incorporation, providing that 
 stock shall only be transferred on the books of the company, are 
 only for the security of the corporation, and do not prevent the 
 title from passing, as between the assignor to the assignee of the 
 stock.'' But in such a case, a purchaser without a transfer on the 
 books of the company acquires only the equitable rights of the 
 assignor ; ^ and the assignee would take the transfer of the same, 
 subject to the obligations of the assignor to the company and all 
 liens which they may have on the stock, and all rights of the 
 company to any assessments thereon, and all equities of the cor- 
 poration or any other person." 
 
 A power to regulate the transfer of stock by the corpora- 
 tion is sufficient to authorize a by-law that the stock shall 
 only be transferable at the bank of the coi'poration and on 
 its books ; and in that case, until such transfer the purchaser 
 coiild take only an equitable title, subject to any claims, or liens 
 of the corporation, by virtue of its charter or by-laws, or by 
 valid usage or agreement.^ In New York, where a stockholder 
 
 ' Robinson v. Chartered Bank, L. R., ■* Gilbert v. Manchester Iron Manuf. 
 
 1 Eq. 32. Co., 11 Wend. 627; Mechanics' Bank 
 
 ">■ Per GOLDWAITHE, J., in Duke v. v. New York, etc., R. Co., 13 N. Y. 599: 
 
 Cahawba Nav. Co., 10 Ala. 82. See, also, New York, etc., R. Co. v. Schuyler, 34 
 
 Chambersburg Ins. Co v. Smith, 11 id. 30; Geyer v. Western Ins. Co., 3 
 
 Penn. St. 120 ; Chouteau Spring Co. v. Pittsb. (Penn.) 41 . 
 
 Harris, 20 Mo. 382 ; Bargate v. Short- ^ Id. See, also, Lockwood v. Mechan- 
 
 ridge, 5 H. L. Cas. 297 ; 31 Eng. L. & ics' National Bank, 9 R. I. 308, where 
 
 Eq. 44 ; Eames v. Wheeler, 19 Pick, the doctrine is maintained. See, also, 
 
 442 ; Stone v. Hackett, 12 Gray, 227. as to the validity of the custom of the 
 
 ^ Mount Holly Tump. Co. v. Ferree, transfer in such cases by the secretary, 
 
 17 N. J. Eq. 117. Chambersburg Ins. Co. v. Smith, 11
 
 Members — Stockholders and Stock. 189 
 
 of a corporation transferred his stock in good faith, but did not 
 cause the transfer to be made upon the books of the company, 
 as required by the statute of iiicoii^oration ; and the company 
 had no transfer book ; and the certificate of the transfer re- 
 quired to be filed in the town clerk's office was not signed by the 
 officers of the company as required by its by-laws, but was 
 recorded by the direction of the company, who acquiesced in the 
 same and recognized the transferee as the owner of the stock, it 
 was held that the original stockholder was not liable to pay calls 
 upon the stock after the transfer.' But in Massachusetts, it has 
 been held that shares in a bank, whose charter provides that 
 they shall " be transferable only at its banking-house and on its 
 books," cannot be effectually transferred (as against a creditor of 
 the vendor who attaches them without notice of any transfer), by 
 a delivery of the certificates thereof, and a blank power of attor- 
 ney from the vendor to the vendee, to transfer the same on the 
 books of the company, even if notice of such transfer be given 
 to the bank before the attachment is executed.'' 
 
 Mr. Brice observes : " The capital stock is usually divided into 
 portions styled shares. Such shares may be of one description 
 only, being of one and the same amount, and conferring on all 
 holders thereof the same rights, privileges and liabilities ; or they 
 may be of various classes and with various denominations, the 
 possessors of shares of one class having rights and being under 
 liabilities differing widely from those belonging to the shares of 
 other classes.'' The shares of capital stock are now regarded as 
 personal property ; * and dividends when made on such shares 
 should be made on all the stock, so that each holder shall receive 
 
 Penn. St. 120 . As to what constitutes as to who is a bona fide holder of stock, 
 a legal transfer of corporate stock as see Weaver v. Barden, 49 N. Y. 286. 
 against one having a prior equity, and 
 
 ' Isham V. Buckingham, 49 N. Y. ton, 15 Vt. 519 ; Isham v. Bennington 
 
 216. Iron Works Co., 19 id. 230 ; Arnold v. 
 
 ^ Fisher v. Essex Bank, 5 Gray, Ruggles, 1 R. I. 165 ; Denton v. Liv- 
 
 B73. ingston, 9 Johns. 96 ; Johns v. Johns, 
 
 2 Green's Brice's Ultra Vires, 141. 1 Ohio St. 350; State v. Franklin 
 
 ■* Gilpin V. Howell, 5 Penn. St. 41 ; Bank, 10 id. 91 ; Heart v. State Bank, 
 
 Slaymaker v. Gettysburgh Bank, 10 2 Dev. Eq. Ill ; Planters', etc., Bank 
 
 id. 373 ; Waltham v. Waltham, 10 v. Leavens, 4 Ala. 753 ; Union Bank 
 
 Mete. (Mass.) 334 ; Hutchins v. State v. State, 9 Yerg. 440 ; Brightwell v. 
 
 Bank, 12 id. 421 ; Wheelock v. Moul- Mallory, 10 id. 196.
 
 190 Private Corporations. 
 
 his proportionate share ; and directors have no authority to de- 
 clare a dividend on any other principle,^ In reference to certifi- 
 cates of stock and their character and quality the supreme court 
 of the United States say : " Stock certificates of all kinds have 
 been construed in a way to invite the confidence of business men, 
 so that they have become the basis of commercial transactions in 
 all large cities of the country, and are sold in open market the 
 same as other securities. Although neither in form nor character 
 negotiable paper, they approximate to it as nearly as practicable."^ 
 
 Sec. 119. Eflfect of assignment and delivery. — The practice of 
 transferring such shares by delivery of the certificates with a 
 blank assignment and power of attorney is sanctioned by the au- 
 thorities ; and the purchaser acquires a perfect title thereto as 
 against the former holder, from whom he receives it. As against 
 the corporation he has a right of action against the corporation 
 for its value if they refuse to transfer it on a demand being made 
 therefor ; but if they have a lien upon the same, then the pui*- 
 chaser takes it subject to such lien. But the certificate of stock 
 of a corporation has none of the qualities of commercial or nego- 
 tiable instruments, and as a general rule, the purchaser acquires 
 no better title than the assignor had.^ And it has been held that 
 if it is transferred merely by delivery, with the blank assignment 
 and power of attorney above referred to, but without any trans- 
 fer on the proper books of the company, where such is required, 
 a subsequent hona fide purchaser from the assignor, in whose 
 name it stands upon the books, acquires a good title thereto, and 
 a transfer made on such books, with the permission of the 
 
 ' Jones V. Terre Haute, etc., R. Co., 57 N. Y. 616 ; Weaver v. Barden, 3 
 
 29 Barb. 353 ; S. C, 57 N. Y. 196 ; Lans. 338 ; S. C, 49 N. Y. 286 ; Me- 
 
 Ryderv. Alton, etc., R. Co., 13111.516; chanics' Bank v. New York, etc., R. 
 
 Atlantic, etc., R. Co. V. Commonwealth, Co., 13 id. 599; Dunn v. Commercial 
 
 3 Brewst. (Penn.) 366 ; State v. Balti- Bank, 11 Barb. 580 ; McNeil v. Tenth 
 
 more, etc., R. Co., 6 Gill, 363 ; Luling Nat. Bank, 46 N. Y. 325 ; S. C. 55 
 
 V. Atlantic Mut. Ina. Co., 45 Barb. 510. Barb. 50 ; Bridgeport Bank v. New 
 
 2 Bank V. Lanier, 11 Wall. 369. See, York, etc., R. Co., 30 Conn. 270 ; 
 
 also, Leitch v. Wells, 48 N. Y. 585 ; Broadway Bank v. McElrath, 13 N. J. 
 
 Salisbury Mills v. Townsend, 109 Mass. Eq. 24 ; Mt. Holly, etc., T. Co. v. Fer- 
 
 115. ree, 17 id. 117. 
 
 ' Holbrook v. New Jersey Zinc Co.,
 
 Members — Stockholders and Stock. 
 
 191 
 
 company, to such subsequent purcliaBer, cuts oflE all rights and 
 equities of the holder of the stock certihcates to the stock 
 itself.' 
 
 > People V. Elmore, 35 Cal. 653 ; 
 Naglee v. Pacific, etc, Wharf Co., 20 
 id. 529. And, until regularly trans- 
 ferred, it may be attached as the prop- 
 erty of the assignor by a creditor hav- 
 ing no knowledge of the assignment ; 
 Sliowegan Bank v. Cutler, 49 Me. 315 ; 
 but a creditor having knowledge of 
 the equitable transfer cannot hold the 
 stock upon attachment, although a 
 transfer upon the company's books has 
 not been made. Colt v. Ives, 31 Conn. 
 25 ; Broadway Bank v. McElrath, 13 
 N. J. Eq. 24. The rule is, that a bona 
 fide purchaser of stock which has not 
 been transferred on the books is never- 
 theless entitled to hold the same 
 against all the world against a bona 
 fide purchaser without notice. Parrot 
 V. Byers, 40 Cal. 614. 
 
 The buyer of stock, as between him 
 and the seller, acquires the right to 
 demand a transfer upon the books of 
 the company ; Webster v. Upton, 91 
 U. S. 65 ; and for a refusal of such de- 
 mand the company is liable as for a 
 conversion of the stock. Bank of 
 America v. McNiel, 10 Bush, 54. 
 
 The company may refuse to make 
 the transfer for a good and sufficient 
 reason, but by its refusal, it assumes 
 a perilous position, as the question as 
 to whether the reason is sufficient or 
 not is for the court, Comeau v. Guild 
 Farm Oil Co., 3 Daly, 218 ; State v. 
 Mclver, 2 S. C. 25; State v. Smith, 48 
 Vt. 266. 
 
 The measure of damages in such 
 cases is the value of the stock at the 
 time of demand, together with any 
 dividends which had accrued at that 
 time. Baltimore, etc., R. R. Co. v. 
 Lowell, 35 Md. 238. But the charter 
 of a company may invest the directors 
 with a discretion relative to transfers, 
 and if so, the company cannot be made 
 liable for their refusal to permit a 
 transfer, unless it is proved that they 
 acted capriciously and unfairly. Jn 
 re Gresham Life Assurance Co., L, R., 
 8Ch. App. 446. 
 
 In addition to any discretion ex- 
 pressly conferred on them by the 
 articles of association, the directors of 
 a company have vested in them a dis- 
 
 cretion to refuse to register a transfer 
 of shares, in cases where the proposed 
 transfer would be contrary to the in- 
 terests of the shareholders. Such 
 discretion is, however, not arbitrary, 
 but must be exercised in a just and 
 reasonable manner. Where, there- 
 fore, a company was in difficulties, and 
 a transfer was made to a person whose 
 address was incorrectly given in the 
 transfer, and who could not be found, 
 it was held that the directors were 
 justified in refusing to register the 
 transfer ; and the court refused, after 
 a winding-up order had been made, to 
 rectify the register by inserting the 
 name of the transferee, it appearing 
 that the transfer was made for the 
 purpose of avoiding liability, and that 
 the transferee was not a person of 
 means. Re Smith, L. R. , 6 Eq. Cas. 
 238. A transfer may be refused, when 
 the stock has been previously attached 
 as the property of the vendor. State 
 Ins. Co. V. Sase, 2 Tenn. Ch. 507 ; Wil- 
 liams v. Mechanics' Bank, 5 Blatchf. 
 59. But it cannot sustain its refusal 
 by proof that after the assignment of 
 the shares to the plaintiff' was made 
 and delivered, but before his demand 
 for a transfer, the company was served 
 with notice of attachment of the 
 share, as property of the assignor. 
 Comeau v. Guild Farm Oil Co., ante. 
 But see State Ins. Co. v. Saxe, ante, 
 where it was held that the company 
 was justified in a refusal to transfer 
 after a levy of execution had been 
 made, in a case involving similar facts. 
 
 A corporation should not be com- 
 pelled by mandamus to make transfers 
 upon its books of shares of its stock 
 to a purchaser thereof at a sale upon 
 attachment, where the same stock has 
 been transferred regularly and new 
 certificates issued to a person present- 
 ing a prima facie title, before the 
 issue of the attachment. State v. 
 Warren Foundry, etc., Co., 32 N. J. L. 
 439. 
 
 A mere notice to the officers of the 
 company, from parties having a bene- 
 ficial interest in the stock sought to be 
 transferred, that the right of the party 
 having the legal title to make the
 
 192 
 
 PkIVATE CoRPORA'nONS. 
 
 Sec. 120. Refusal of the corporation to transfer on its books. — Where 
 the provisions of the statute, articles of association, or by-laws, re- 
 quire that a transfer of the certificates of stock should be made 
 or recorded on the books of the company, a refusal of the com- 
 pany, or oflSeer, or agent, having charge of such books, to make 
 the requisite entry or record of a transfer on proper application, 
 and the furnishing of the necessary evidence for this purpose, 
 without a good reason therefor, would render the corporation 
 liable for all damages sustained by reason of such refusal. 
 And a certificate of stock in a corporation, with a power of 
 attorney authorizing the transfer of the stock to any person, is 
 prima facie evidence of equitable ownership in the holder, and 
 renders the stock transferable by the delivery of the certificate ; 
 and in such a case, when the party, in whose hands the certificate 
 is found, is shown to be the holder for value, and without notice 
 of any intervening equity, his title as owiier cannot be impeached.^ 
 And if the corporation has no secretary or clerk, and the presi- 
 dent has charge of its books, a right to have a transfer exists, 
 
 transfer is questioned and will be con- 
 tested, will not justify the officers in 
 delaying longer than to give a reason- 
 able time to the claimants to institute 
 legal proceedings. State v. Mclver, 2 
 S. C. 25. Nor can the company law- 
 fully withhold a transfer because, in 
 their judgment, the motives and pur- 
 poses of the party are improper, or 
 because the transfer may aifect in- 
 juriously the interests of the company. 
 State V. Mclver, 2 S. C. 25; State v. 
 Smith, 48 Vt. 266. 
 
 The stock of a corporation in Massa- 
 chusetts is so within the power of its 
 courts, having all proper parties be- 
 fore them, that their decree will 
 operate upon the title, and will be a 
 valid transfer of the stock to a third 
 person, notwithstanding the certificate 
 therefor is outstanding. And the cor- 
 poration will not be required to recog- 
 nize the title of one who, years after- 
 ward, produces the certificate, with 
 the signature of the former owner to a 
 blank assignment, although he proves 
 that, since such judicial proceedings, 
 he has advanced money on the faith 
 
 of the certificate. Sprague v. Cacheco 
 Manuf. Co., 10 Blatchf. 173. 
 
 If an attachment has been levied 
 and notified to the company, and it 
 has transferred the shares to a pur- 
 chaser at sheriff's sale, before demand 
 by a prior assignee for a transfer to 
 him, the company is protected. Wil- 
 liams v. Mechanics' Bank, 5 Blatchf. 
 (U. S. C. C.)59. 
 
 The purchaser under an attachment 
 sale takes the same title that the 
 judgment debtor had to the shares 
 when the attachment was levied, and 
 cannot compel a transfer where the 
 debtor himself would not have been 
 entitled to compel it. Geyer v. West- 
 ern Ins. Co., 3 Pittsb. (Peun.) 41. 
 
 The corporation is entitled to refuse 
 a demand of an equitable owner of 
 shares for a transfer, where he does 
 not offer to surrender the certificates, 
 but they are known to the officers of 
 the company to be in possession of 
 another person claiming to be the 
 lawful owner. National Bank v. Lake 
 Shore, etc., Ry. Co., 21 Ohio St. 221. 
 
 J Mount Holly Turnp. Co. v. Ferree, 17 N. J. Eq. 117.
 
 Members — Stockholders and Stock. 
 
 193 
 
 and the demand tlierefor may be made on tlic president. And 
 where the charter of a (corporation provides tliat shares shall be 
 transferable, in the manner prescribed by the by-laws of the cor- 
 poration, and no by-laws are made, but the certificates recite that 
 the stock is transferable only on the books of the company, on 
 surrender of the certificate, the officers of the company and not 
 the assignee of the stock should transfer the stock on the books. ^ 
 
 ' Green Mt. Turnp. Co. v. Bulla, 45 
 Ind. 1. When a court of last resort, 
 after a fair bona fide contest by the 
 corporation, has ordered stock to be 
 transferred to a purchaser at a sherifTs 
 sale, the corporation is liable to the 
 holder of the certificate of the stock, 
 who took no steps to protect himself. 
 Friedlander v. {Slaughter House Co., 
 81 La. Ann. 523. 
 
 In Tennessee it was held by a di- 
 vided court that the holder of certifi- 
 cates of stock, transferred to him in 
 f^ood faith, either absolutely or as 
 collateral security, possesses a valid 
 title as against the creditors of the 
 assignor, who have fixed no liens on 
 it previous to the assignment, although 
 no transfer has been made on the 
 books of the corporation, or no notice 
 of the assignment given to it. Cor- 
 nick V. Richards, 3 Lea (Tenn.), 1. 
 
 In Missouri it is held that in the 
 absence of a legislative enactment re- 
 stricting the transfer of stock to any 
 particular mode, the transfer is com- 
 j)lete on delivery of the certificate tcith 
 power to transfer, and payment of the 
 purchasC'^noney, not only between ven- 
 dor and vendee, but when the corpora, 
 tion has unjustifiably refused to make 
 the transfer on its books against a 
 creditor of the vendor, who, without 
 notice of the transfer, attaches the 
 stock. Merchants' Bank v. Richards, 
 6 Mo. App. 454. 
 
 In an Ohio case it appeared that in 
 1854 a railroad company issued to V. 
 certificates of stock, declaring on their 
 face that the stock was transferable 
 on the company's books on surrender. 
 Soon afterward V. sold the stock to 
 F., delivering to F. the certificates 
 with blank powers of attorney to en- 
 able him to have the stock transferred. 
 The certificates were mislaid by F., 
 and were not discovered until 1871. 
 In 1863, on application of V., the 
 25 
 
 directors issued to B., to whom V. as- 
 sumed to sell the stock, new certifi- 
 cates, believing the original ones to 
 have been lost by V. On the ground 
 of such issuance, the company refused 
 an a])plication of F.'s administrators 
 for a transfer of the stock to their 
 names, and for an account of the divi- 
 dends. The by-laws provided that no 
 new certificates should be issued in 
 place of any certificate previously 
 issued, until its surrender and cancel- 
 lation ; also that certificates might be 
 issued on the special order of the 
 board of directors, in place of certifi- 
 cates lost or destroyed, on proof of 
 such loss or destruction, and on receiv- 
 ing security to indemnify the company 
 against loss consequent upon the issu- 
 ance of such new certificates. It was 
 held: 
 
 1. That the company was liable to 
 replace the stock to which F. was en- 
 titled, or to account for its value. 
 
 2. That this liability to F. was not 
 aflFected by the by-law enabling per- 
 sons who had lost certificates to obtain 
 new ones. 
 
 3. That the company was not liable 
 for the dividends paid on the stock 
 before it had notice of the transfer of 
 the certificates to F. 
 
 4. That until the transfer of the 
 stock to the holders of the original 
 certificate was refused, or they had 
 notice of the transfer of the stock to 
 other parties, the statute of limita- 
 tions did not begin to run. Cleveland 
 & Mahoning R. R. Co. v. Robbins, 35 
 Ohio St. 483. 
 
 Transferees of stock which had 
 been improperly issued, on asking to 
 have it transferred to them on the 
 books, were refused, but were told 
 that they might return it and take cer- 
 tain securities, given as collateral to 
 the note of the original purchaser, 
 and the stock was afterward dealt
 
 194: 
 
 PkIVATE CoRPORA'nONS. 
 
 Althoiigli certificates of stock do not possess tlic qualities of 
 comniercial or negotiable paper, and even a hooia fide assignee 
 will take tlicni subject to all tlie equities which existed against 
 
 with, and some of it clianged hands 
 on that understanding. The assets 
 of the company afterward passed into 
 the hands of one who was not a bona 
 fide purchaser, who claimed the securi- 
 ties as part thereof. It was lield that 
 the transferees could file a bill to ob- 
 tain the securities on giving up their 
 stock. Snow V. Weber, 39 Mich. 143. 
 
 The purchaser at a sheriffs sale on 
 execution, of stock in a corporation 
 whose charter gave it a pre-emption 
 right to its stock, filed a bill in equity 
 against tiie corporation to compel a 
 transfer of the purchased stock with- 
 out first demanding such transfer as 
 such pre-emption, did not apply to 
 a sheriff's sale on execution. This 
 was held to afford no reason for dis- 
 missing the bill. Barrows v. National 
 Kubber Co., 12 R. I. 173. 
 
 In a New York case it appeared that 
 C.'s husband, without consideration, 
 executed in blank an assignment and 
 power of attorney indorsed on a cer- 
 tificate of shares of stock of a manu- 
 facturing corporation and delivered 
 the same to her. He afterward, for a 
 valuable consideration, executed an 
 assignment of the stock to B , and 
 caused a transfer to be made to B. on 
 the corporation's books, B., who was 
 an officer thereof, knowing of the as- 
 signment to C. By the terms of the 
 certificate the stock was only trans- 
 ferable upon the books on surrender 
 of the certificate. The court lield that 
 it being the corporation'sduty to resist 
 any transfer without such surrender, 
 the transfer to B. was no valid excuse 
 for the corporation's refusing C.'s de- 
 mand for a transfer. The fact that 
 the assignment to C. was without 
 consideration was immaterial. Such 
 demand need not be made by the one 
 whose name was inserted as attorney. 
 Equity will compel a transfer to the 
 owner of shares of stock on the books 
 of the corporation, if a recovery of 
 damages for a refusal to transfer 
 would furnish an inadequate compen- 
 sation. Cushman v. Thayer Mauuf. 
 Jewelry Co., 76 N Y. 365. 
 
 In Webb v. Graniteville Manuf. Co., 
 11 S. C. 396, certain stock stood on the 
 books of a corporation in the names 
 
 of two persons, " executors of A." It 
 was then transferred ou the books to 
 " B., guardian," and a certificate issued 
 iu B.'s name. B. was the guardian of 
 the minor children of A. B. indorsed 
 the certificate and intrusted it to C, 
 his attorney. C, by a petition in B.'s 
 name, procured an order from a circuit 
 judge for the sale of the stock and re- 
 investment of the money. C. then 
 hypothecated the stock to a bank for 
 money for his own use. C. failed to 
 redeem, and the stock was sold, the 
 bank purchasing and afterward trans- 
 ferring it to its president, E., also 
 president of the corporation, and to 
 F. In an action by the wards, held, 
 that the books of the corporation, the 
 certificate of stock, and order of the 
 judge were sufficient to put E. on in- 
 quiry, and charge him with a knowl- 
 edge of the trust and conversion ; that 
 his knowledge in the matter was the 
 knowledge of the corporation of which 
 he was president, and that the corpo- 
 ration, as well as B., the guardian, 
 was liable. 
 
 In Eraser v. Charleston, 11 S. C, 486, 
 a legal owner of a certificate of city 
 stock, transferable by its terms only 
 at the city treasurer's office, by appear- 
 ance in person or by attorney, indorsed 
 the certificate in blank, and delivered 
 it to another person, who hypothe- 
 cated it to a bank. The owner died, 
 and the certificate, by virtue of a trans- 
 fer written over his name by the 
 cashier, was transferred to the bank 
 on the books of the city treasurer. 
 It was held that the indorsement and 
 delivery was an equitable assignment, 
 and the transfer proper ; and that the 
 terms of the certificate as to transfer 
 were to protect the corporation itself 
 and purchasers without notice. 
 
 In Case v. Citizens' Bank, 100 U. S. 
 446, A., in order to secure the payment 
 of his note to B., pledged to the latter 
 certain shares of the capital stock of 
 a national bank in Louisiana, with 
 authority to sell them in default of 
 such payment. Default having been 
 made B. sold them, and in March, 
 1873, applied to the cashier of the 
 bank to have them transferred on its 
 books. That oflficer refused to allow
 
 Members — Stockiioldeus and Stock. 105 
 
 the assignor ; ' still, unless the right to transfer on the books 
 of tlie company should be prohibited by the conti-act of sub- 
 scription, or the constating instruments, the corporation could 
 not refuse to permit such transfer ; and in case of such refusal, 
 the corporation would be liable for all damages sustained thereby. 
 In a recent case where an action was brought against a bank to 
 recover damages for its refusal to permit a transfer of shares of 
 stock on its books, the facts were that two certificates had been 
 issued to one Culver ; that these certificates stated on their face 
 that the stock was transferable on the books of the bank only, 
 and on the surrender of the certificates ; that this limitation was 
 in accordance with the provisions of a by-law ; that Culver 
 pledged said stock to the bank as security, giving it a power of 
 attorney authorizing it to sell the same ; that under this power 
 fifty shares were sold by the bank ; that Culver was allowed to 
 retain the two certificates of said shares ; that he sold the shares 
 and assigned the certificates, and gave the usual power to the 
 assignee (Lanner), authorizing him to transfer the stocks on the 
 books of the bank ; and that the assignee bought the stock in 
 good faith. The supreme court of the United States, on these 
 facts, held that the assignee was entitled to recover." 
 
 In relation to such cei'tificates they say : " Although neither in 
 form or character negotiable paper, they approximate to it as near 
 as practicable. If we assume that the certificates in question are 
 not different from those in general use by corporations, and the 
 assumption is a safe one, it is easy to see why investments of this 
 
 the transfer on the ground that A. 1. That the action was not prescribed 
 
 was indebted to the bank. Before the by the limitation of one year, 
 
 transfer could be enforced the bank 2. That the cashier having been 
 
 failed, and C. was appointed a re- intrusted by the directors of the bank 
 
 ceiver, against whom B., February 34, with the transfers of stock, his re- 
 
 1876, brought an action to recover fusal to permit the transfer was the 
 
 damages for the loss sustained by him. refusal of the bank. 
 
 It did not appear that the bank ever 3. That, judgment having been ren- 
 
 adopted any by-law providing for a dered, the court below had power to 
 
 lien on the shares of a stockholder in- order C. to pay the claim, or certify it 
 
 debted to it, or that A.'s debt to it had to the comptroller. Case v. Citizens' 
 
 been contracted before his etock was Bank, 100 U. S. 446. 
 pledged to B. Held : 
 
 • New York R. Co. v. Schuyler, 17 ^ First National Bank v. Lanier, 11 
 N. Y. 592 ; Anderson v. Nicholas, 28 Wall. 369. 
 id. 600 ; New York R. Co. v. Schuyler, 
 34 id. 30.
 
 196 Pkivate Corporations. 
 
 character are sought after and relied upon. No better form could 
 be adopted to assure tlie purcliaser that he can buy with safety. 
 He is told, under the seal of the corporation, that the shareholder 
 is entitled to so much stock, which can be transferred on the books 
 of the corporation, in person or by attorney, when the certificates 
 are surrendered, but not otherwise. This is a notification to all 
 persons interested to know, that whoever in good faith buys the 
 stock, and produces to the corporation the certificates assigned 
 with power to transfer, is entitled to liave the stock transferred to 
 him. And the notification goes further, for it assures the holder 
 that the corporation will not transfer the stock to any one not in 
 possession of the certificates." ^ 
 
 Sec. 121. Contracts for the transfer of shares. — W here an owner 
 of shares contracts to convey or transfer the same at a future time, 
 on certain conditions, the same rules would be applicable as in 
 other contracts relating to personal property. But in case of a 
 contract to transfer, where the party so contracting, at the time, 
 has not such shares, but expects to purchase the same at some 
 future time in the market, for the purpose of carrying out his 
 contract, it has been the subject of contrary judicial opinions 
 whether such contracts were legal. It was intimated, at least, by 
 Lord Tenterden, in Ryan v. Lewis^^ that such contracts were 
 illegal. But this is not regarded, at this time, as sound law, how- 
 
 ' Id. Where a trustee under a wi]l States circuit court (Mass . ), by Shep- 
 
 had a certificate issued to him as trus- ley. J., in which it appeared, that a 
 
 tee, and he was afterward removed party borrowed money of a bank and 
 
 from his oflBce as trustee, and the gave as collateral security a certificate 
 
 court removing him ordered the mas- of stock in his name, which he had 
 
 ter in chancery to assign the trust fraudulently altered from two to two 
 
 property to a new trustee, which was hundred shares. The loan was repaid 
 
 done, and the corporation issued a new and the bank returned the certificate, 
 
 certificate to the new trustee, and the which had a transfer on it in blank, 
 
 plaintiff in good faith, having no no- signed in blank by the cashier. The 
 
 tice of the proceedings, lent money to holder then again borrowed money of 
 
 a holder of the old certificates, which the plaintiiF, and gave the same certifi- 
 
 had a transfer on it signed in blank cate, thus indorsed to him, as col- 
 
 by the old trustee, and he filled up the lateral security. The court held that 
 
 blank and demanded a transfer to him the bank, by indorsing the certificate, 
 
 and a new certificate, it was held that warranted the genuineness of it. 
 
 he could not maintain an action against Mathews v. Massachusetts Bank, 9 
 
 the corporation. A curious case was Am. L. Rev. 164. 
 
 recently determined in the United ^ Ry. & M. 386.
 
 Members — Stockholders and Stock. 
 
 19: 
 
 ever good sense or good morality it may seem to be.^ Contracts 
 of this character are now regarded as valid, and can be enforced 
 bj action. ' 
 
 Sec. 122. Liens of the corporation on stock. — It may be observed 
 that the company would not, in the absence of some express pro- 
 vision of the law of its constitution or other lawful regulations, 
 have any lien on the shares of its stockholders for amoimts due 
 thereon, or other indebtedness to the company ; but it is usually 
 provided, in such law or regulations, that it shall have such lien 
 for any balance on such stock which may be due or will become 
 due thereon to the corporation.^ The stockholders of the corpora- 
 tion and assignees of stock would be bound to take notice of such 
 a provision. The rights of the corporation in this respect, as we 
 have seen, are usually secured by a provision of its by laws or 
 articles of association, requiring a transfer of the stock to be made 
 on the books of the company, in order to be valid, at least, as 
 between the owners and the company." Such a provision is per- 
 
 11 Redf. on Rail .,§§ 33-4. 
 
 ^ On this question, ISHAM, J., in 
 Noyes v. Spalding, 27 Vt. 420, ob- 
 serves : " Contracts for the sale of 
 stock of this character on time are 
 valid at common law, and can be en- 
 forced by action. The statute 7 Geo. 
 2, chap. 8, made perpetual by 10 Geo. 
 2, chap. 8, has rendered some con- 
 tracts of that character illegal. They 
 are rendered void, so far as the public 
 stock of that country are concerned, 
 when the seller had no stock at the 
 time of making the contract, and none 
 that was ever intended to be trans- 
 ferred by the parties, but their inten- 
 tion was to pay the diiference merely 
 that may exist between the market 
 value of the stock at the time of the 
 transfer, and the price agreed to be 
 paid. Such contracts are rendered 
 void by that statute, and are treated 
 as wagering contracts ; the seller virtu- 
 ally betting that the stock will fall , 
 the buyer that it will rise. Chitty on 
 Bills, 112, note w. It has been held 
 that railroad stock is not within the 
 act. Hewitt v. Price, 4 M. & G. 355 ; 
 S. C, 3 Railw. C. 175 ; Fishery. Price, 
 11 Beav. 194. In the case of Mortimer v. 
 McCallan, 6 M. & W. 70, Lord Abinger 
 
 observed ' that the act was made for 
 the purpose of preventing what is de- 
 clared to be illegal trafficking in the 
 funds by selling fictitious stock merely 
 by way of differences ; but it was never 
 intended to affect bona fide sales of 
 stock.' Els worth v. Cole, 2 M. & W. 
 31 ; 2 Kent's Com. 468, note b. In the 
 case of Grizebood v. Blane, 20 Eng. 
 L. & Eq. 290, it was held that a toler- 
 able contract for the sale of railroad 
 shares, where no transfer is intended, 
 but merely ' differences,' amounting to 
 the rise or fall of the market, is gam- 
 ing within the 8 and 9 Vict., chap. 
 109, § 18 ; S. C, 11 Com. Bench, 538." 
 
 ^ Massachusetts Iron Co. v. Hooper, 
 7 Cush. 183 ; Heart v. State Bank, 2 
 Div. Ch. Ill ; Sargeant v. Franklin 
 Ins. Co., 8 Pick. 90. 
 
 * Fisher v. Essex Bank, 5 Gray 
 (Mass.), 373; Northrop v. Newtown 
 Turnpike Co., 3 Conn. 544 ; Guyer v. 
 Western Ins. Co., 3 Pittsb. (Penn.) 41 ; 
 Bryon v. Carter, 22 La. Ann, 98 ; In re 
 Stockton Iron Co., L. R., 2 Ch. Div. 
 101 ; In re General Exchange Bank, 
 L. R., 6 Ch. App. 818 ; Mechanics' 
 Bank v. Merchants' Bank, 45 Mo. 513 ; 
 German Security Bank v. Jefferson, 
 10 Bush, 326; 3 latter of Bigelow, 3
 
 198 
 
 Private Corporations. 
 
 haps usually intended to secure the corporation any sum due to it 
 by the stockholder, but this, as we have noticed, does not prevent 
 a transfer of the legal rights or equitable interests of the holder.^ 
 It has been held that a lieu on shares held by the company, by 
 virtue of such provisions, extends to and embraces dividends ; '^ 
 although it has also been held, in this country, that such a pro- 
 vision, giving a bank a lien upon the stock of a shareholder for 
 debts due the bank, does not, by implication, give a lien upon 
 dividends accruing after the death of the shareholder.'' And a 
 corporation, by assenting to an assignment made by a stockholder, 
 for the benefit of all his creditors, " with no other preference 
 than is or may be authorized by law," does not lose its lawful 
 lien on the stock for debts due by the assignor to the corporation.* 
 
 Sec. 123. Company may refuse to transfer, when. — Where a com- 
 pany has a lien on the stock standing upon its books in the name 
 of a judgment debtor, and such stock is sold under an execution 
 against the debtor, there is no obligation of the company to 
 
 Benedict, 469. But a corporation may 
 waive its right to insist upon this lien, 
 or by its acts may estop itself from in- 
 sisting upon it. Thus, in In re North- 
 ern, etc., Tea Co.,i.. R., 10 Eq. Cas. 
 458, the articles of association of a 
 company provided that the company 
 should have a primary lien on the de- 
 bentures of any member of the com- 
 pany who might be either absolutely 
 or contingently indebted to the com- 
 pany for any amount or on any ac- 
 count, and that the directors might, 
 after any such debt became absolutely 
 payable, sell and transfer any deben- 
 ture of the member so indebted or 
 liable. The holder of certain deben- 
 tures, who was also a shareholder, 
 transJferred his debentures in August, 
 1865, and the transferees were regis- 
 tered as the proprietors of the deben- 
 tures, and received certificates to that 
 efiFect from the company. In 1866 and 
 1867, calls were made on the shares 
 held by the transferrer, »which were 
 
 ' Marlborough Manuf. Co. v. Smith, 
 2 Conn . 579 ; Same v. Same, 5 id. 247 ; 
 Farmers' Bank v. Iglehart. 6 Gill, 50 ; 
 Stebbins v. Phoenix Ins. Co., 3 Paige, 
 350 ; Union Bank v. Laird, 2 Wheat. 
 
 unpaid . In December, 1867, the com- 
 pany fell into difficulties, and applied 
 to the transferee of the debentures to 
 renew them for a period of three years. 
 Held, that the company had precluded 
 themselves by their conduct from set- 
 ting up their lien for unpaid calls as 
 against the transferees. In another 
 English case the statute provided that 
 no shareholder shall be entitled to 
 transfer any share after any call has 
 been made in respect thereof until he 
 shall have paid such call, nor until he 
 shall have paid all calls for the time 
 being due on every share held by him, 
 was held to apply only to the transfer 
 of shares on which a call can be and 
 has been made, and not to shares on 
 which all the calls have been paid ; 
 and the company is therefore bound to 
 register a transfer of stock, although 
 the transferrer be the holder of other 
 shares on which there are unpaid calls. 
 Hubersty v. Manchester, etc., Ry. Co., 
 L. R., 2. Q. B. 471. 
 
 390; Black v. Zacharie, 3 How. 513; 
 Arnold v. Suffolk Bank, 27 Barb. 424. 
 
 '■^ Hague V. Dandeson, 2 Exch. 741. 
 
 3 Brent v. Bank. 2 Cranch (C. C), 517. 
 
 ^ Dobbins v. Walton, 37 Ga. 614.
 
 Members — Stockholders and Stock. 199 
 
 transfer the same to tlie purchaser, except upon the payment 
 by tlic latter of the amount secured by tlie lien.^ So, where 
 there was a provision in the charter declaring stock personal 
 property, and authorizing the board of directors to make rules 
 and regulations concerning the ' transfer of it, subject to the 
 general law of the State, and the board of dircetors adopted a 
 rule prohibiting the transfer of stock until all the debts due by 
 the owner of the same to the corporation wore paid, this was held 
 to be valid, although inconsistent with a genwal law of the 
 state relating to the transfer of property, and that a transfer con- 
 trary to such a rule, although good against the assignor, would 
 not be good as against the corporation, for either a debt due or to 
 become due from him, either as principal or surety.'' But, where 
 a person, owning shares in a bank, transferred them to another, 
 and the bank issued a new certificate to the transferee, making 
 the shares in the new certificates " transferable after the holder 
 pays all his liabilities to said bank," this was held to be a waiver 
 of the lien of the bank upon the shares thus transferred, for 
 amounts due or to become due from the assignor.' And, wmere a 
 corporation had by its charter a lien upon the shares of a stock- 
 holder for a debt due to it, and the stockholder caused his stock 
 to be transferred on the books of the company, w^hich was the 
 only manner in which it could be transferred, to a fictitious name, 
 which was known to the officers of the corporations and the origi- 
 nal o^vner afterward caused the stock to be transferred to an- 
 other person, by a person who claimed or w^as represented to be 
 the holder, as security for an antecedent debt due from the origi- 
 nal owner to him, but no money was paid on the transfer, it was 
 held that the lien of the corporation upon the stock for a debt 
 due from the original owner was not lost by said transfers.* 
 
 Sec. 124. instances where corporation has been held justified in refus- 
 ing to transfer. — The plaintiff being the assignee for value of a cer- 
 tificate of stock in a bank, which stock stood in the name of his 
 assignor, demanded a transfer to himself, which was refused on 
 
 ' Newberry v. Detroit, etc., E. Co., 'Hill v. Pine River Bank, 45 N. H. 
 
 17 Mich. 141. 300. 
 
 ^ St. Louis, etc., Ins. Co. v. Qoodfel- ^ Stebbins v. Pbcenix Fire Ins. Co., 
 
 low, 19 Mo. 149. 3 Paige, 350.
 
 200 Pkivate Corporations. 
 
 the gronnd that the assignor had not paid his original subscrip- 
 tion. The plaintiff brought his action for damages for the re- 
 fusal, and it was held that the bank had a right, by virtue of its 
 by-laws, to refuse a transfer while the original owner was indebted 
 to the bank.' And where the articles of association of a bank 
 provided that no stockholder should be permitted to transfer his 
 shares, or receive a dividend thereon, until his indebtedness to 
 the bank was paid, and authority was given to the bank, in case 
 any sum was past due and owmg to it, to sell the stock of the 
 owner to pay the same, these two provisions were held to create a 
 lien upon the stock in favor of the bank, for the holder's indebt- 
 edness to the bank.^ But where a stockholder died insolvent 
 and indebted to the corporation, and subsequently the directors 
 passed a resolution prohibiting the transfer of stock by any debtor 
 of the company until the debt should be paid or secured, and af- 
 terward the administratrix of the stockholders sold the stock to 
 a person who was ignorant of the indebtedness and the resolution, 
 without which a right of sale and transfer existed in the owner, 
 it was held that the corporation had no right to refuse to transfer 
 the stock on its books to the purchaser.^ 
 
 Sec. 125. Corporations may be compelled to allow a transfer. — 
 Where a purchaser or assignee of stock is entitled to a transfer of 
 the stock on the books of the company, he could undoubtedly 
 compel the corporation to have the same so made by the proper 
 officer, by mandaimis. And where, by tlie charter or rules and 
 regulations of the corporation, the transfer is thus required to be 
 made, an assignment of certificates of stock would, as we have 
 seen, be good as between the assignor and assignee, and the com- 
 pany could only claim the benefit of the lien for debts due from 
 the assignor. If the claims against him are satisfied, then the 
 
 ' McCready v. Ramsey, 6 Duer, 574. world except subsequent purchasers 
 
 2 Arnold V. Suffolk Bank, 27 Barb, in good faith, without notice. People 
 424. V. Elmore, 35 Cal. 653 ; Naglee v. Pa- 
 
 3 Steamship Dock Co. v. Heron, 53 cific Wharf Co., 20 id. 529. 
 
 Penn. St. 280. See, also, Weston v. But the assignee cannot maintain an 
 
 Bear River, etc., Mining Co., 5 Cal. action for a refusal of the corporation, 
 
 186. if the assignor has not paid for the 
 
 Transfers not entered upon the stock. McCready v. Rumsey, 6 Duer, 
 
 books of the company are, under the 574. 
 California statute, good against all the
 
 Members — Stockholders and Stock, 201 
 
 assignee may compel the transfer on its records'.' If the corpora- 
 tion demands of the stockliolder more tlian is due, the holder must 
 tender the amount actually due, to put the corporation in the 
 wrong, and enable him to compel the transfer.' But, in the 
 absence of fraud or collusion on the ])art of the company, a mere 
 transfer of stock on the books thereof, by direction of the vendor 
 to his vendee, does not make the company liable as a guarantor 
 of the vendor''s title to the stock.^ And, unless some specific 
 mode of transfer is required, any transfer of stock entitles the 
 transferee to vote at all meetings of the corporate body, and for 
 directors of the company." 
 
 Sec. 126. Stock subject to execution against the assignor until trans- 
 ferred. — Under the California statute (1852), a transfer of the 
 certificates of stock, though conveying the interest of the owner, 
 was held not to be a valid transfer against a honajide purchaser 
 without notice, who purchased the same at a sale on execution 
 against the assignor, unless there was also a transfer of the stock 
 on the books of the company, as provided by the statutes.* So, 
 in Maine, it has been held that under the statute of that state, 
 providing for a transfer of stock on the proper books of the cor- 
 poration," no transfer of the capital stock of a bank will secure it 
 from attachment, against a recorded owner.' But, in some of 
 
 ' Weston V. Bear River Mining Co., to the same; as for instance whether 
 
 5 Cal. 186. An action will lie against such transfer is entered on the proper 
 
 a corporation for a refusal to transfer books of the company as required by 
 
 stock upon its books, if it is its duty law. Pinkerton v. Manchester & L. 
 
 so to do Commercial Bank v. Kort- R Co., 43 N. H. 424. See, also, Fisher 
 
 right, 32 Wend. 348. v. Essex Bank, 5 Grav, 373; Sabin v. 
 
 •^ Pierson v Bank of Washington, 3 Woodstock, 21 Vt. 363 , Pittsburgh & 
 
 (.'ranch (C. C), 363. C. R. Co. v. Clarke. 29 Penn. St. 14G. 
 
 3 Central R. Co. v. Ward, 37 Ga. But see Broadway Bank v. McElrath, 
 
 515. 13 N. J. Eq. 24. As to the transfer of 
 
 ■* People V. Devin, 17111. 84. equitable interests, and the time for 
 
 " Naglee v. Pacific Wharf Co, 30 which the tran.sfer dates, see Rice v. 
 
 Cal 529. Courtis, 33 Vt 400 ; 1 Story's Eq. Jur. 
 
 ^ Rev. Stat. Me., chap. 46, § 11. 400, b. " A corporation has no implied 
 
 '' Skowhegan Bank V Cutler, 49 Me. lien upon stock for the liabilities of 
 
 315. See, also. First Nat. Bank v. the stockholders to the company." 1 
 
 Lanier, 11 Wall. 369. The question Redf. on Rail., i^ 33, par 5; citing 
 
 as to whether the sale and transfer of Mass. Iron Co. v. Hooper, 7 Cush. 183; 
 
 stock is complete so as to defeat the Heart v. State Bank, 3 Dev. Ch. Ill ; 
 
 rights of creditors to the same is Sargent v. Franklin Ins. Co., 8 Pick, 
 
 made in some cases to depend upon 90. 
 the provisions of the statutes relating 
 
 26
 
 202 Private Corporations. 
 
 the states, the equitable title acquired by assignment will be pro- 
 tected by a court of equity against cxery one, except those who 
 are not affected by notice of the assignment,' and in a recent case 
 in California it has been held that an assignee, even before trans- 
 fer, is entitled to hold the stock against all the world, except a 
 honafide ])urchaser without notice.'' In Michigan it is held that 
 an assignment of stock may operate to convey the interest of the 
 holder, even though not recorded upon the books of the company, 
 and that a judgment creditor buying such holders interest at a 
 sale on execution with notice of the assignment, gets no better 
 title than the holder had at the time of the sale.^ 
 
 Sec. 127. stockholder's right of action against a corporation. — We 
 
 have already referred to the right of a member to sue a corpora- 
 tion, in a case where, under the same circumstances, he could main- 
 tain an action against a natural person. 'And this right, in particu- 
 lar cases, we will now proceed to illustrate. Thus, a stockholder 
 of a corporation may maintain a bill against the corporation to 
 restrain it from paying a tax illegally assessed upon the property 
 of the company, the state treasurer, seeking to collect the tax, being 
 made a party defendant, and enjoined from collecting the same/ 
 A refusal by the directors of a bank to commence a suit to 
 test the legality of a tax upon the property of the bank is not a 
 breach of their duty for which a bill will he against them at the 
 suit of a stockholder.^ But any dissenting stockholder may 
 restrain the company from executing a contract which exceeds its 
 power " And it is well settled that a private corporation may 
 be sued by one of its own members, either at law or in equity, 
 under special circumstances ; as where it attempts to do acts which 
 it is not warranted in doing by its charter, it may be restrained 
 by injunction.'' So, any member of a corporation has a right of 
 action against the corporate body for any injury he sustains from 
 
 ' Colt V. Ives, a?j<e; Broadway Bank id 331; Mechanics' Bank v. Thomas, 
 
 V. McElrath, 13 N. J. Eq. 24. id. 384. 
 
 « 5 Id. 
 
 3 Newberry v. Detroit, etc., Manuf. ^Zabriskiev Cleveland, etc., R. Co., 
 
 Co., 17 Mich. 141. 23 How (U. S ) 381. 
 
 •» Mechanics', etc.. Bank v.Debolt, 18 ' Ex, parte Booker, 18 Ark. 338 
 How. (U. S.) 380; Dodge v. Wolsey,
 
 Members — Stockholders and Stock. 203 
 
 the wrongful acts of its agents or officers. ' So a minority of the 
 stockholders of a corporation may maintain a bill in equity in be- 
 lialf of themselves and the other stockJiolders against the officers, 
 for conspiracy and fraud, whereby their interests will be or have 
 been sacrificed." And in order to constitute an illegal application 
 of the funds or money of the corporation it is not necessary that 
 there should be any intentional wrong or actual fraud ; and to 
 give the court jurisdiction in equity in such a case, the plaintiff 
 need not allege or prove any actual and willful fraud or collusion 
 on the part of the company or the directors thereof.' A bill in 
 equity will also lie to compel the delivery of stock to one who has 
 already an equitable title to such stock, although a suit at law 
 might also be maintained therefor.* 
 
 Sec. 128. When stockholder may have injunction against corporation. — 
 An injunction against a corporation will be granted on the appli- 
 cation of a single stockholder when he can show that the corpora- 
 tion is employing the corporate powers and funds to accomplish 
 purposes not within the scope of the objects of the institution.* 
 But no corporation, or tax payer, individually, or on behalf of 
 himself or others, can sue for an injury to, or misapplication of, 
 the corporate property or franchises, except in cases of fraud, 
 corruption, or violation of law on the part of the functionaries 
 intrusted with the corporate powers and duties.^ A stockholder 
 may, however, have relief by injunction against a corporation of 
 which he is a member, which is about to use the funds of the 
 company for a different purpose entirely from that which was 
 designed by the act of incorporation.' And where a corporation, 
 
 'Gray v. Portland Bank, 3 Mass. bolder may be entitled to an injunction 
 
 385. See, also, Waring v. Catawba against the directors from misapply- 
 
 Co., 2 Bay (S. C), 109. ing the funds of the corporation, or 
 
 - Peabody v. Flint, 6 Allen, 52. from cbangiug the purpose for which 
 
 ^ Hill V. New Jersey R. Co., 10 N. J. it was created, yet an injunction will 
 
 Eq. 171. not be granted to restrain the general 
 
 * Hill V. Rockingham Bank, 4 N. H. management of the business unless a 
 
 567. clear violation of law, or a wide de- 
 
 ^ GiflFord v. New Jersey R. Co., 10 parture from the charter purposes is 
 
 N. J, Eq. 171. shown. Bach v. Pacific Mail Steam- 
 
 « Arkenburgh v. Wood. 23 Barb, ship Co., 12 Abb. Pr. (N. S.) 373; 
 
 360. Goodwin v. New York, etc., R. R. Co., 
 
 'Baltimore, etc., R. Co. v. Wheel- 43 Conn. 494, 
 iuor, 13 Qratt. 40. While a stock-
 
 204 Private Corporations. 
 
 of which the plaintiff was a member, obtained permission from the 
 leo-islatnre to extend their raih-oad beyond tlie terminus named in 
 the original charter, and accepted said act granting said extension 
 by a majority vote, against the wishes of the plaintiff, who was a 
 stockholder, it was held that this was a fundamental change in the 
 purposes for which the corporation was organized, which could 
 not be binding upon the individual corporators without their con- 
 sent, and that the plaintiff was entitled to have an injunction 
 against the appropriation by the defendant (the corporation) of 
 the funds or credits of the corporation, toward the construction of 
 the proposed extension of the road.^ And it has also been held 
 that if an individual stockholder has suffered damage in a contract 
 with a corporation through the fraudulent and illegal acts of the 
 directors, done by color of their office, his only remedy is against 
 the corporation ; and that he cannot maintain an action against the 
 directors, who are themselves liable to the corporation,* But a 
 minority of the stockholders in a corporation have a remedy m 
 chancery against the directors, and against the corporation and all 
 others, whether individuals or corporations, assisting or confede- 
 rating with them, to prevent such corporation and the directors 
 thereof from making any misapplication of their capital or profits, 
 which might result in lessening the dividends of the stockholders 
 or the value of their sliares, if the acts intended to be done consti- 
 tute in law a breach of trust or duty." The general rule, however, 
 is that the suit against a ministerial officer or agent, to account, or 
 for misconduct, must be brought in the name of the coi-poration ; 
 and that it cannot be maintained in the name of an individual 
 stockholder/ But, if justice cannot otherwise be obtained, or 
 where the directors, officers and managers; having the control of 
 the corpoi'ation and its affairs, are guilty of misconduct that 
 amounts to a breach of trust, it will be permitted to sue them/ 
 
 ' Stevens v. Rutland R. Co.. 29 Vt. ^ Smith v. Poor, 40 Me. 415. 
 
 545. See, also. Bliss v. Anderson. 31 •'' March v. Eastern, etc., R. Co., 40 
 
 Ala. 613 ; Neall v. Hill, 16 Cal. 145. JST. H. 548. See, also, Gardiner v. 
 
 But, in Connecticut, it has been held Pollard, 10 Bosw. 674 ; Vanderbilt v. 
 
 that an individual stockholder cannot Garrison. 5 Duer, 689. 
 
 maintain an action at law against the "Brown v. Vandyke, 8 N. J. Eq. 
 
 directors of a corporation for mis- 795. 
 
 managing its affairs or defrauding the ^ Id. 
 corporation. Allen v. Curtis, 26 Conn. 
 456.
 
 Members — Stockholders and Stock. 205 
 
 Sec. 129. Liability of the stockholders in equity to creditors. — In 
 
 eqnitj, the property of a corporation is regarded as held in trust 
 for the payment of its debts, and creditors may pnrsue it into the 
 hands of any person, not a hmia fide holder. And it is also well 
 settled that the stockholders of a corporation are not entitled to 
 any share of the capital stock or dividends of the profits, until 
 all the debts are paid. Therefore, a sale of the capital stock ot a 
 corporation and a division of the proceeds among the stockholders 
 will not defeat the rights of creditors ; but they may compel such 
 stockliolders to contribute pro rata to the payment of the cor- 
 porate debts out of the moneys so received.' This doctrine was 
 recently affinned in the supreme court of the United States. Mr. 
 Justice Clifford, in delivering the opinion of the court, observed : 
 " Equity regards the property of a corporation as held in trust 
 for the payment of the debts of the corporation, and recognizes 
 the right of creditors to pursue it into whosoever's possession it 
 may be transferred, unless it has passed into the liands of a bona 
 fide purchaser; and the rule is well settled that stockholders are 
 not entitled to any share of the capital stock, nor to any dividend 
 of the profits, nntil all the debts of the corporation are paid. 
 Assets derived from the sale of the capital stock of the corpora- 
 tion, or of its property, become, as respects creditors, the substi- 
 tutes for the things sold ; and as such they are subject to the same 
 liabilities and restrictions as the things sold were before the sale, 
 and while they remained in the possession of the coi-poration. 
 Even the sale of the entire capital stock of the company, and the 
 division of the proceeds of the sale among the stockholders, will 
 not defeat the trust, nor impair the remedy of the creditors, if 
 any debts remain unpaid ; as the creditors in that event may pur- 
 sue the consideration of the sale in the hands of the respective 
 stockholders and compel each one, to the extent of the fund, to 
 contribute ^:>7'c> rata toward the payment of their debts out of the 
 moneys so received and in their hands." 
 
 Yalid contracts made by a corporation survive even its disso- 
 lution by a voluntary surrender or sale of its corporate franchises, 
 
 ' See pos^, chap. 14. A creditor of the caused the insolvency of the corpora- 
 corporation cannot maintain an action tion. Winter v. Baker, 34 How. Pr. 
 against the directors for damages on 183; 50 Barb. 435. 
 the ground that their misconduct has
 
 206 Private Corporations. 
 
 and the creditors of the corporation, notwithstanding snch sui^ 
 render and sale, may still enforce their claims against tlie property 
 of the corporation, as if no such surrender had taken place. 
 Moneys derived from the sale and transfer of the franchises and 
 capital stock of an incorporated company are assets of the cor- 
 poration, and, as such, constitute a fund for the payment of its 
 debts ; and if held by the corporation itself, and so invested as to 
 be subject to legal process, the fund may be levied on by such 
 process ; but if the fund has been distributed among the stock- 
 holders, or passed into the hands of other than hona fide creditors 
 or purchasers, leaving any debts of the corporation unpaid, the 
 rule in equity is, that such holders take the fund charged with 
 trust in favor of creditors, which a court of equity will enforce, 
 and compel the application of the same to the satisfaction of their 
 debts.* Kcgarded as the trustee of the corporate fund, the cor- 
 poration is bound to administer the same in good faith for the 
 benefit of the creditors and stockholders, and all others interested 
 in its pecuniary affairs; and any one receiving any portion of the 
 fund by voluntary transfer, or without consideration, may be com- 
 pelled to account to those for whose use the fund is held. Cred- 
 itors are preferred to stockholders on accourit of the peculiar trust 
 in their favor, and because the latter, as constituent members of 
 the corporate body, are regarded as sustaining, in that respect, the 
 same relation to the former as that sustained by the corporation." 
 
 Sec. 130. Over-issued, and " watered stock." — Tlie constatiiig in- 
 struments, in this country, generally limit the capital stock of 
 corporations for pecuniary profit, and fix the number of shares 
 into which the same shall be divided. In other cases, and partic- 
 ularly under special charters, corporations, in this respect, are 
 only limited by the circumstances of the case, and may issue stock 
 and increase the capital to any extent required to carry out the 
 purijoses and objects of the enterprise, without any formal vote of 
 the stockholders.^ 
 
 ' Story's Eq. Jur., § 1252 ; Mumma ^ Paygon v. Stower, 2 Dill. (U. S 
 
 V. Potomac Co., 8 Pet. 286 ; Wood v. C. C.) 428. But see Eadman v. Bow- 
 
 Dummer, 3 Mason, 308 ; Vosev. Grant, man, 58 111. 444, wliere it was held 
 
 15 Mass. 522; Spear v. Grant, 16 id. that the increase must be authorized 
 
 14 ; Curran v. Arkansas, 15 How. 307. by votes of the stockholders. 
 
 "^ The Chicago, etc., R. Co. v. How- 
 ard, 7 Wall. 392.
 
 Membeks — Stock FioLDERS and Stock. 207 
 
 An over-issno of stock certificates generally operates to reduce 
 the value, in such cases, of the original stock legitimately issued 
 to existing stockholders, and such stock is usually issued by the 
 directors or other managers and agents, for selfish and fraudulent 
 purposes, and is a fraud upon such existing stockholders as do 
 not authorize it. The stock thus affected is frequently, by a 
 figure of speech, called " watered stock." 
 
 A variety of decisions have been rendered, in reference to such 
 over-isvsued stock and the obligations of the corporation therefor. 
 On the one hand it has been claimed that as such over-issue was 
 the act of the directors or other agents of the corporation, and that 
 although in excess of their authority or of the authority of the 
 corporation, still as the corporation select its agents, when they 
 act within the apparent scope of their authority, the corporation 
 should be liable, as the corporation fmniish such agents with the 
 means of imposing on innocent parties, and therefore it should 
 be bound by such acts of its agents.' And it has been further 
 maintained that, although such fraudulent over -issue of stock, or 
 a contract made by agents therefor, imposed no obligation upon 
 the corporation, in respect to it, still the corporation would be 
 responsible, for the fraud of the agents in issuing such spui'ious 
 stock, and for all damages sustained thereby by the purchaser; 
 and that his remedy for the tort would be as effectual and afford 
 him as complete indemnity as if the contract had been binding 
 on the part of the eorpora,tion.^ On the other hand it has been 
 held that such issue of stock on the part of the corporation or its 
 agents, in excess of the limitations of the constating instruments, 
 is tdtra vires and void ; that parties dealing with such agents are 
 bound to take notice of such limitations in the fundamental law 
 of the corporation ; ^ that if the company has authority to act in 
 a matter and appoints an agent for the purpose, but the agent 
 fraudulently exceeds his authority, the person dealing \v\i\\ the 
 agent in I'elation to stock can claim no advantage therefrom, or 
 against the corporation, if he has knowledge of' the fraudulent 
 
 • Mechanics' Bank v. New York & N. ler, 38 Barb. 534 ; Shotwell v. Mali, id. 
 H. R. Co., 4 Duer. 480. 44o ; Cazeaux v. Mali, 25 id. 578. 
 
 2 New York & N. H. R. Co. v. Schuy- ^ 2 Redf. on Rail. , g 234, par. 70 and 
 
 note.
 
 208 Pkivatk Corporations. 
 
 acts of tlie agent, or if lie acts in bad faith in the transaction ; 
 and that a hona Jide purchaser from him would be in no better 
 situation. 
 
 This is illustrated by a recent case in New York/ where the 
 facts were as follows : By the act creating a corporation, its 
 capital stock was limited to $3,000,000, and divided into shares of 
 $100 each, transferable in such a manner as the company should 
 direct ; the entire stock was taken, and certificates issued therefor 
 to the owners. The by-laws of the company prescribed that 
 transfers of stock should only be made on the transfer books of the 
 company, and required the certificate of ownership to be surren- 
 dered prior to the making of such transfer and the issue of a new 
 certificate. The company established a transfer agency, and 
 appointed their president a transfer agent, who was authorized 
 and accustomed to the transfer of stock on the books in his 
 charge, and on the surrender of the certificates therefor, to execute 
 and deliver to the transferee the usual certificate, stating that he 
 was entitled to the number of shares of stock specified therein, 
 transferable on the books of the company by him or his attorney, 
 on the surrender of the certificate. The agent fraudulently gave 
 to one Kyle a certificate in the usual form for eighty-five shares 
 of stock, when, in fact, the latter owned no stock, none stood on 
 the books in his name, and no certificate for such stock had been 
 surrendered. The plaintiffs in good faith, and relying upon the 
 certificate as regularly issued and valid, made a loan to Kyle, re- 
 ceiving from him as security the certificate, with an assignment of 
 the stock and a power of attorney to transfer the same. In an action 
 by the plaintiffs against the corporation for refusing to permit the 
 stock represented by the certificate to be transferred, it was held 
 by the court of appeals of that state, that the certificate was 
 void, and that the plaintiffs did not thereby acquire a right, legal 
 or equitable, to any stock ; that the corporation was not responsi- 
 ble to the plaintiffs for damages sustained by their reliance upon 
 the genuineness of the certificate ; that the certificate did not par- 
 take of the character of negotiable instruments ; that a hona fide 
 assignee of such an instrument takes it subject to the equities 
 
 I Mechanics' Bank v. New York & N. H. R. Co., 13 N. Y. 599.
 
 Members — Stockholders and Stock. 209 
 
 which exist against the assignor ; and that the doctrine of estop- 
 pel in pais was not applicable to snch a case.^ 
 
 On this subject Mr. Kedfield appropriately observes : " What- 
 ever may be said of the duty of corporations to ennploy only 
 reliable directors and transfer agents, and of the justice of the 
 company being bound by their acts, within the apparent scope of 
 their employment, all of which are in general terms most unde- 
 niable propositions ; still, something is due to common prudence 
 and reasonable caution, on the part of those who deal in stock, to 
 see at least what the charter and books of the company will at 
 once disclose to any one who will examine. And if, instead of 
 making a reasonable examination of matters obviously within his 
 reach, one sits down blindly to adventure millions upon a spurious 
 issue of stock in such sums and at such times as to induce most 
 prudent men to hesitate about its genuineness, it is perhaps not 
 unreasonable that he should be held bound by such facts as the 
 slightest examination must have disclosed. This is the rule in 
 regard to most commercial and business transactions, and we see 
 no special hardship in its application here within reasonable 
 limits." ^ 
 
 'See, also, Chicago City R. Co. v. Ernest v. Nicholls, 6 H. L. C. 401. But 
 
 Allerton, 18 Wall. 283 ; New York & see Greenwood's case, 3 De G., M. & 
 
 N. H. R. Co. V. Schuyler, 34 N. Y. 30; G. 471 ; Athenaeum Ass. Co. v. Foley, 
 
 Curran v. Arkansas. 15 How. (U. S.) 1 Giff. 102. 
 
 304 • Curry v. Scott, 54 Penn. St. 270, * 3 jje^f. on Rail., § 234, 11. 
 
 27
 
 210 Peivate Corporations. 
 
 CHAPTER YI. 
 
 DIRECTORS. 
 
 Sec. 131. Directors — election of . 
 
 Sec. 132. Relation of, to stockholders. 
 
 Sec. 133. Powers of directors. 
 
 Sec. 134. Same continued. 
 
 Sec. 135. Board of directors or managers. 
 
 Sec. 136. General powers of. and limitations thereon . 
 
 Sec. 137. Implied powers of. 
 
 Sec. 138. Acts not within the scope of their powers. 
 
 Sec. 139. Powers conferred by the fundamental law. 
 
 Sec. 140. Powers depend upon interpretation. 
 
 Sec. 141. Powers not conferred upon directors remain in the corporate 
 body. 
 
 Sec. 143. The directors cannot change the character and objects of the cor- 
 poration. 
 
 Sec. 143. Directors as agents. 
 
 Sec. 144. Distinction in Massachusetts. 
 
 Sec. 145. Rule in England as to the authority of directors. 
 
 Sec. 146. Delegation of authority. 
 
 Sec. 147. Ratification of agent's acts. 
 
 Sec. 148. Same continued. 
 
 Sec. 149. Effect of knowledge of unauthorized acts. 
 
 Sec. 150. Effect of ratification. 
 
 Sec. 151. Directors under the national banking law. 
 
 Sec. 152. Personal liability of directors. 
 
 Sec. 153. Same continued. 
 
 Sec. 154. The fiduciary character of directors- 
 
 Sec. 155. Same continued. 
 
 Sec. 156. They cannot manage the affairs of the corporation for their per- 
 sonal benefit. 
 
 Sec. 157. Contracts by directors with corporation . 
 
 Sec. 158. Instances where they are not personally liable. 
 
 Sec. 159. Where they act without authority. 
 
 Sec. 160. Liability as partners. 
 
 Sec. 161. Directora de facto . 
 
 Sec. 162. Compensation of. 
 
 Sec. 163. Cannot increase their own compensation. 
 
 Sec. 164. Meetings of directors.
 
 Directors. 211 
 
 Sec. 131. Election ofc— The directors and other elective officers 
 of a corporation must be chosen in the manner required by the 
 charter, or the general law under which the corporation is organ- 
 ized, and even where the charter or general law does not designate 
 the length or kind of notice to be given of the time and place of 
 the meeting for such election, it is obvious that a reasonable notice 
 to all the stockholders would be required, unless all the stock- 
 holders were present and gave their assent either personally or by 
 proxy. And this is the case even in relation to annual meetings, 
 and although the by-laws fix the time and place, of such meeting.' 
 If the meeting is required to be called by the clerk, in a certain 
 way, he alone has the power to call it, unless provision is made 
 for it being called by some other oificer in the case of the disability 
 or failure of the clerk to call it, and the mode specified must be 
 adopted. Thus where notice of an election was required to be 
 given by the directors of a corporation, it was held that a notice 
 signed by a, majority of the directors not stating that it was by 
 the order of the board, and not stating that the persons who signed 
 the call loere directors, it was held that the call was not sufiicient, 
 and could not be the basis of a legal meeting.* In the case last 
 cited, the strictness of this rule was well illustrated, and it was 
 held that, where the directors of a corporation are empowered to 
 designate the time for holdiDg an election, such designation 7m(st 
 he hy the hoard when laioftdly convened / and a determination by 
 the board or a majority of the directors that an election must be 
 held, without fixing a time, does not authorize one of them to 
 fix the time and give notice for such time. It was also held that, 
 when a charter directs that all elections of directors after the first 
 shall be held annually, at such times as the by-laws shall direct, 
 no second election can he held until hy-laios designating the time 
 have heen adoj^ted. Nor can there be an omission to hold an elec- 
 tion such as to authorize the directors to designate a day for it 
 provided for only in case of such omission. The notice for an 
 annual or other meeting of the corporation must designate the 
 day, hour and place where it is to be held, and the meeting can- 
 not be held until the hour designated in the notice, nor at any 
 
 'San Buenaventura, etc., Mfg. Co. ' Johustou v. Joues, 23 N. J. Eq. 216. 
 V. Vassault, 50 Cal. 534; People v. 
 Albany, etc., R. R. Co., 55 Barb. 344.
 
 212 Private Corporations. 
 
 other place, unless regularly adjourned. Thus, in a New York 
 case/ a part of the stockholders of a corporation met fifteen min- 
 utes before the hour for which an election was appointed, and 
 organized as a meeting of the corporation, and chose inspectors, 
 and precisely at the hour, as they claimed, they adopted resolu- 
 tions to proceed with the election, and confirming the selection of 
 inspectors, and thereupon held an election ; while another party 
 of stockholders, in another room, at or shortly after the hour ap- 
 pointed, organized as a meeting of the corporation, appointed in- 
 spectors, and proceeded also to an election. It was held that the 
 proceedings at the former meeting operated as a surprise and 
 fraud upon the stockholders who did not participate in the meet- 
 ing, and as to them was irregular and void ; and such irregularity 
 could not be cured by a reorganization of the meeting at the 
 proper time, where such meeting was in fact, and in legal effect, 
 but a continuation of the first meeting. The election at the sec- 
 ond meeting was held valid, although the polls were kept open 
 somewhat longer than the time fixed by the notice, it appearing 
 that such action was fairly within the exercise of a reasonable dis- 
 cretion, and for the purpose of giving the stockholders a fair 
 opportunity to vote. None but bona fide stockholders, or persons 
 holding the proxies of stockholders, can vote at an election of 
 officers of a corporation, and if the list of stockholders exhibited 
 and voted upon at such election was not a true list of the stock- 
 holders, and was made up fraudulently, and contained the names 
 of persons not entitled to vote, the election is not legal.* Where 
 
 ' People V. Albany, etc., R. R. Co., invalid, whether the restraining order 
 
 55 Barb. 344. Wliere the stockhold- did or did not bind the stockholders, 
 
 ers of a corporation were notified that State v. Bonnell, 35 Ohio St. 10. 
 
 the annual meeting for the election of ^ Johnston v. Jones, ante. But see 
 
 directors would be held at a certain People v. Albany, etc., R. R. Co.,a/iie, 
 
 hour of the day fixed by the charter, where it was held that a by-law of a 
 
 and the corporation was restrained corporation requiring that on an elec- 
 
 from holding an election on that day, tion day the secretary should produce 
 
 in consequence of which no meeting the transfer books and a list of the 
 
 was held until several hours after the stockholders entitled to vote, etc., and 
 
 time fixed in the notice, when a small that inspectors should be chosen from 
 
 number of stockholders, without the among the stockholders, is directory, 
 
 knowledge of the others, met, organ- and an omission to produce the books 
 
 ized, and adjourned until the next day, does not invalidate the election, al- 
 
 at which time an election was held by though it casts the burden of proof 
 
 a minority of the stockholders, with- upon the parties claiming under it, to 
 
 out notice to others, who were in the show that voters challenged were, or 
 
 vicinity for the purposes of the meet- appeared by the books to be, entitled 
 
 ing, and might have been readily noti- to vote . 
 fied. Held, that such election was
 
 DiKECTOES. 213 
 
 a meeting is legally convened for that purpose, unless the charter, 
 statute or by-laws otherwise provide, the persons receiving a ma- 
 jority of all the votes cast, although less than one-half the stock 
 was represented, are legally elected as directors, and clothed with 
 all the functions and powers, as well as duties and liabilities of 
 that office.^ 
 
 Sec. 132. Relation of, to stockholders. — The directors of a corporation 
 stand in the relation of trustees to the stockholders and also to 
 creditors of the coi'poration, and will not be permitted to speculate 
 with the funds or assets of the corporation for their own advan- 
 tage, or in any manner by means of the power reposed in them to 
 receive any advantage for themselves over other stockholders.* 
 There is an inherent obhgation implied in the acceptance of such 
 trust, not only that they will use their best efforts to promote the 
 interests of the stockholders, but that they will in no manner use 
 their position to advance their individual interests as distinguished 
 from that of the corporation or acquire interests that shall conflict 
 with the fair and proper discharge of their trust.^ They do not 
 represent any particular class of stockholders, but have a duty to 
 perform as to all,* and they will not be permitted unfairly to do 
 acts for the benefit of one class of its stockholders to the detriment 
 or disadvantage of another class. Thus, where a board of direct- 
 ors of a mining corporation makes a nominal lease of a mine 
 owned by the corporation, to a party really acting in the interests 
 of a minority of the stockholders, not in the ordinary course of 
 the business of the corporation, but for the purpose of with- 
 drawing the mine from the control of the board of directors about 
 to be elected at an approaching meeting of the stockholders, and 
 thereby perpetuating the control of the minority, a court of equity 
 will cancel the lease on a bill filed by the corporation for that purpose,* 
 and generally, where a director, by means of his position as such. 
 
 ' Brown V. Pacific Mail Steamship Md. 598 ; Hale v. Republicau Bridge 
 
 Co., 5 Blatchf. 525. Co., 8 Kans. 466. 
 
 2 Corbett v. Woodward, 6 Sawyer * Chase v. Vanderbilt, 62 N. Y. 307. 
 
 (U. S. C. C), 403 ; European & N. A. ^ Mahoney Mining Co. v. Bennett. 5 
 
 R. Co. V. Poor, 59 Me., 277. Sawyer (U. S. C. C), 141. 
 
 ^ Cumberland Coal Co. v. Parish, 42
 
 214 Private Corporations. 
 
 secures any undue advantage for himself over other stockholders, 
 either directly or indirectly, equity will treat the tranisaction as void,' 
 The president of a corporation, who is also a director, will not be 
 permitted to create such a relation between him and the trust 
 property as will make his own interest antagonistic to the bene- 
 ficiary, and where such an officer bought a small debt against the 
 corporation and took valuable property thereon, he was enjoined 
 from levying for the balance.^ 
 
 Sec. 133. Powers of directors. — The powers of directors are such 
 as are conferred upon them by the constating instruments or by- 
 laws of the body, and such as are implied from the nature of the 
 duties devolving upon them in the particular corporation whose 
 business they direct. But, as a general rule, they possess no 
 powers beyond those residing in the corporate body. And if 
 they should exceed the powers conferred upon them, or perform 
 acts exceeding their authority, they would be ultra vires and 
 void. 
 
 They are the agents of the corporation so far as authorized, 
 either expressly or impliedly, by the fundamental law of its be- 
 ing. But they do not possess powers not conferred upon it in this 
 manner, or such as do not come within the usual powers of such 
 agents by the common law. It has been held that the authority 
 to act as directors will be liberally construed in their favor, and 
 with a due consideration for the best interests of the company.* 
 Thus in a case where the directors had authority to sell the ships 
 of the company, it was held that they might sell all its ships.* 
 And where the general powers of the body of the corporation are 
 transferred to the properly constituted directors, they may, miless 
 restricted, do whatever the corporation might ; and by virtue of 
 this power they may dispose of the corporate property in whole 
 or in part ; but this general power is held not to extend to its 
 franchises, and unless they are expressly authorized by law so to 
 
 ' Corbett v. Woodward, ante; Farm- ^ Wilson v. Meiers, 10 C. B. (N. S.) 
 
 era and Merchants' Bank v. Downe, 348. 
 
 53 Cal. 466. * Wilson v. Meiers, 10 C. B. (N. S.) 
 
 '■* Brewster v. Stratman, 4 Mo. Anp. 348. 
 41.
 
 Directors. 215 
 
 do, they would not possess the power to dispose of them.* Where, 
 by the law of its constitution, the corporation has authority to 
 sell and transfer its property or franchises, or to consolidate with 
 any other company, this authority could be exercised by the 
 directors by virtue of their express or implied powers.' But a sale 
 and transfer of the rights of one company to another, without 
 legislative authority by the directors, is held to be against public 
 policy, and courts will not aid a transfer against such policy, or 
 in disregard of the duties and the obligations of the company.^ And 
 it seems well settled that no corporation can, without express leg- 
 islative authority, either sell or mortgage its franchises.* 
 
 Sec. 134. Same continued.— A provision in a bank charter, con- 
 ferring upon the directors power to make such by-laws, rules and 
 regulations as shall be needful, touching " the time, manner and 
 terms upon which discounts and deposits shall be made," will be 
 construed as giving to the directors power to make by-laws, etc., to 
 operate and control merely the internal conduct of the bank, and 
 to restrain and direct its own otBcers in the management of its 
 affairs and not to affect the public at large or prejudice the rights 
 and interests of third persons.^ But where a charter provided 
 that the capital stock " may be increased from time to time at the 
 
 'Wood V. Belford, etc., R. Co., 8 ^Hayesv. Ottaway, etc., R. Co., 61 
 
 Phil. (Penn.) 94 ; Middlesex R. Co. v. III. 432. 
 
 Boston, etc., R. Co., 115 Mass. 347 ; * York, etc., R. Co. v. Winans, 17 
 Enfield Toll Bridge Co. v. Connecticut, How. (U. S.) 39 ; Pullan v. Cincinnati, 
 etc., R. Co., 7 Conn. 29; Abbot v- etc., R. Co., 4 Biss. 35; Pierce v. 
 Hard Rubber Co., 33 Barb. 587 ; Fisher Emery, 32 N. H. 484 ; Commonwealth 
 V. Evansville, 7 Ind. 407 ; State v. v. Smith, 10 Allen, 448 ; Richardson v. 
 Bailey, 10 id. 46; Bruffett v. Great Sibley, 11 id. 65; Hendee v. Pinker- 
 Western R. Co., 25 111. 353; Hatcher ton, 14 id. 381 ; Troy, etc., R. Co. v. 
 V. Toledo, etc., R. Co., 42 id. 447 ; Kerr, 17 Barb. 601 ; Lauman v. Leba- 
 Mahaska, etc., R. Co. v. Des Moines, non Valley R. Co., 30 Penn. St. 43 ; 
 etc., R. Co., 28 Iowa, 437. Winchester T. Co. v. Vimont, 5 B. 
 
 '■^ Tread well v. Salisbury Manf. Co., Monr. 1 ; Arthur v. Commercial Bank, 
 
 7 Gray, 393 ; Lauman v. Lebanon, etc., 9 S. & M. 394 ; Coe v. Columbus, etc., 
 
 R. Co., 30 Penn. St. 42 ; New Orleans, R. Co., 10 Ohio St. 372. But compare 
 
 etc., R. Co. V. Harris, 27 Miss. 517. Shepley v. Augusta, etc., R. Co., 55 
 
 See, also. Black v. Delaware, etc., R. Me. 395; Kennebec, etc., R. Co. v. 
 
 Co., 24 N. J. Eq. 455, where it is held Portland, etc., R. Co., 59 id. 9 ; Miller 
 
 that in case of a lease or sale by vir- v. Rutland, etc., R. Co., 36 Vt. 452; 
 
 tue of legislative authority, unless Hall v. Sullivan R. Co., 2 Redf. Am. 
 
 provision is made for compensation to R. Cases, 621. 
 
 such stockholders as dissent, they may ^ Seneca County Bank v. Lamb, 26 
 
 prevent it. But see post, chaj). 16. Barb. 595.
 
 216 Private Ookpobations. 
 
 pleasure of said corporation," it was held that the directors alone 
 had no power to increase it, although it was further provided that 
 " all the corporate powers shall be vested in and exercised by a 
 board of directors and such officers and agents as said board shall 
 appoint." It was further held that such powers referred to ordi- 
 nary business transactions.^ 
 
 Sec. 135. Board of directors or managers. — We have Said that it 
 
 is usually provided by the fundamental or constatory regulations 
 of the body, for the election of directors and the exercise of their 
 powers and duties. In such cases these regulations must ordi- 
 narily be considered in the light of a power of attorney ; and 
 the general j^rinciiDles applicable to agency are applicable to a 
 board composed of such directors. Where their powers are spe- 
 cifically defined by such instruments, they are thereby limited, 
 and cannot claim, in respect to the powers thus regulated, to have 
 the common-law powers of such a body. To hold otherwise 
 would be, in the language of Mr. Justice Stoey, "to suppose 
 that the common law is superior to legislative authority ; and that 
 the legislature cannot dispense with forms, or confer authorities 
 which the common law attaches to general corporations." ' 
 
 Sec. 136. General powers of, and limitations thereon. — The 
 general powers conferred ujion the board of directors gives 
 them control of the property of the corporation ; ' but the 
 board would have no power, by an act or resolution, to 
 exclude a member from any common-law or statutory rights ; 
 such as to exclude him from an examination of the bank books 
 of the corporation, on the ground that he was hostile to its inter- 
 ests,* or indeed to do any act which is inconsistent with the posi- 
 tion he holds as trustee of the stockholders of the company." The 
 powers of the directors under a general authority will, of course, 
 depend upon the nature and character of the corporation. Thus, 
 the board of directors of a banking corporation may authorize its 
 
 'Railway Co. v. Allerton, 18 Wall. Northampton Bank v. Smith, 2 Cow. 
 
 233. 579. 
 
 '^Fleckner v. Bank of U. S., 8 « People v. Throop, 12 Wend. 183. 
 Wheat. 338. ^ Cumberland Coal Co. v. Parish, 
 
 2 See Spear v. Ladd, 11 Mass. 94; ara^e; Chase v . Yanderhilt, ante.
 
 Directors. 217 
 
 agents to borrow money ; ^ fix the rates and conditions of dis- 
 counts ; " pass resolutions authorizing the stockholders to transfer 
 their stock to the bank in payment of their debts to it ; ' and 
 authorize any one of their number to assign any securities belong- 
 ing to the bank.* 
 
 The board of directors may, ordinarily, do any act, in the gen- 
 eral management of the business, that the company can do, unless 
 restrained by the creating or constating instruments, or the by- 
 laws of the body.^ 
 
 Sec. loT. Implied powers of. — It will be manifest that the pow- 
 ers of directors of joint-stock, as well as many other corporations, 
 are mostly imphed, or to be inferred, from grants of authority in 
 general terms. In fact, the constitution of directors of a coi'porate 
 body would carry with it, by implication, a variety of duties and 
 powers, the details of which are seldom or never expressed in the 
 articles or by-laws of the institution. It is difficult to lay down 
 any universal rules relating to their powers, as they must largely 
 depend upon the nature, character and objects of the corporation. 
 It may be said, however, that they possess all the powers to act, 
 which the corporation would possess if it had no directors ; unless 
 they are restrained by some express law or by the by-laws of 
 the corporation, or from implication necessarily deduced there- 
 from. But they possess no powers by implication which were not 
 necessary for an economical and successful prosecution of the 
 purposes of the institution, and cannot engage in any business or 
 transactions foreign to the purposes and ordinary business of the 
 
 '"Ridgway v. Farmers' Bank, 12 S. Harr. Ch. 106; Lester v. Webb, 1 
 
 & R. 256 ; Leavitt v. Yates, 4 Edw. Allen, 34. 
 134. 6 Whitwell v. Warner, 20 Vt. 425; 
 
 '^Bank of U. S. v. Dunn, 6 Pet. 51 ; Bank of Middlebury v. Rutland, etc., 
 
 Bank of Metropolis v. Jones, 8 id. 16; R. Co., 30 id. 159. See, also, Augusta 
 
 Percy v. Millaudon, 3 La. 568 ; Bank Bank v. Hamblet, 35 Me. 491 ; Dispatch 
 
 of Pennsylvania v. Reed, 1 W. & S. Line, etc., v, Bellamy, 12 N. H. 225; 
 
 101. Bank of Middlebury v. Edgerton, 30 
 
 3 Taylor v. Miami Exporting Co., 6 Vt. 182; Miller v. 'Rutland, etc., R. 
 
 Ohio, 218 ; City Bank of Columbus v. Co., 36 id. 452 ; Burrill v. Nabant 
 
 Bruce, 17 N. Y. 507. Bank, 2 Mete. 163 ; Sargent v. Web- 
 
 * Spear v. Ladd, 11 Mass. 94; North- ster, 13 id. 497; Hoyt v. Thompson, 19 
 
 ampton Bank V. Pepoon, id. 288; Bank N. Y. 207; Gordon v. Preston, 1 
 
 Commissioners v. Bank of Brest, 1 Watts, 388. 
 
 28
 
 218 Private Corporations. 
 
 company.^ But the large increase of corporations, and the 
 almost infinite variety of business purposes for which they are 
 created, and the vast importance which they have assumed in the 
 conduct and management of enterprises and industries so essential 
 to the development of the resources of every country, and the 
 necessity for giving to the directors and officers large discretionary 
 powers, and the assumption of such powers from necessity, has in- 
 duced the courts to concede to them much more extensive implied 
 powers than they were formerly regarded as possessing, and it 
 may be said that they are treated as possessing all the powers re- 
 quisite for the successful prosecution of the business for which 
 they were created. 
 
 Sec. 138. Acts not TOithin the scope of their powers. — The di- 
 rectors of a corporation have full authority and power to act for 
 and in the place and stead of the corporation, in all matters 
 within the scope of the express or implied powers conferred upon 
 the corporation itself, in the prosecution of the business or pur- 
 poses for which it was established ; but, beyond that, they have 
 no power to bind the corporation, except where they are specially 
 authorized by the stockholders at a proper meeting for that 
 pui-pose. Thus, it has been held that they have no general 
 authority to apply to the legislature for any change or enlargement 
 of the corporate powers ; * nor to alienate property essentially 
 necessary for the transaction of the company's business ; ^ nor to 
 destroy the corporate existence, or give away its funds, or deprive 
 it of its means to acomplish the purposes of its creation.* 
 
 On this subject, Mr. Justice Story once observed : " Inde- 
 
 ' As to the general powers of direct- Where the directors of a company 
 
 ors unless restrained by the laws of release subscribers from their sub- 
 
 the institution, see Whitwel] v. War- scriptions, the subscribers still re- 
 
 ner, 20 Vt. 425 ; Bank of Middlebury main as contributories upon the wind- 
 
 V. Rutland, etc., R. Co., 30 id. 159; ing up of the corporation. In re 
 
 Augusta Bank V. Hamblet, 35 Me. 491; London, etc.. Coal Co., L. R., 5 Ch. 
 
 Dispatch Line, etc. v. Bellamy Manuf. Div. 525 ; White Mountain R. R. Co. 
 
 Co., 12 N. H. 225 ; Bank of Middle- v. Eastman, 34 N. H. 124. 
 
 bury V. Edgerton, 30 Vt. 182 ; Miller v. '^ Abbot v. American Hard Rubber 
 
 Rutland, etc., R. Co., 36 id. 452 ; Hoyt Co., 33 Barb. 587. 
 
 V. Thompson, 19 N. Y. 207 ; Gordon V. ^g^rke v. Smith, 16 Wall. 395; 
 
 Preston, 1 Watts, 385. Penobscot, etc., R. Co. v. Dunn, 39 Me. 
 
 ' Marlborough Manuf. Co. v. Smith, 587 ; Bedford, etc., R. Co. v. Bowser, 
 
 2 Conn. 579. 48 Penn. St. 29.
 
 • DiBEcroES. 219 
 
 pendent of some special and positive law, or provision in its 
 charter to such an effect, I do exceedingly doubt if any corpo- 
 ration, at least without the express assent of all the corporators, 
 can rightfully dispose of all its property by such a general assign- 
 ment, so as to render itself incapable in the future of performing 
 any of its corporate functions." * And where the organic law 
 vests in the directors all the corporate powers, this is construed to 
 relate to the ordinary transactions of tlie company and is held not 
 to extend to a reconstruction of the corporation, or to an enlarge- 
 ment of its capital/ And it has also been held that it is an 
 abuse of the trust of directors wholly unauthorized, and at war 
 with the design of the charter, to single out some of the sub- 
 scribers to the stock and release them from their liability.* Mr. 
 Justice Strong on this subject observes : "It has been settled by 
 very numerous decisions that the directors of a company are 
 incompetent to release an original subscriber to its capital, or to 
 make any arrangement with him by which the company, its 
 creditors, or the state, shall lose any of the benefits of his sub- 
 scription. Every such arrangement is regarded in equity not 
 merely ultra vires, but as a fraud upon other stockholders, upon 
 the public, and upon the creditors of the company." * 
 
 Sec. 139. Powers conferred by the fundamental law. — From what 
 has already been said, it is evident that the powers of directors 
 may not only be limited by the regulations or fundamental law of 
 the corporation, relating especially to them, but by the powers of 
 the corporate body itself. If the management of its affairs are 
 committed to them by the fundamental law of its existence, they 
 alone have the power to manage its concerns ; and may exercise 
 their discretion without being subject to the control of the corpo- 
 rate body.^ Nor have the stockholders any general right to inter- 
 
 ' Dissenting opinion of Story, J., ■* Burke v. Smith, 16 Wall. (U. S.) 
 
 concurred in by Justices Baxdwin and 395. See, also, Alford v. Miller, 32 
 
 McLe.vn, inBeaston v. Farmers' Bank, Conn. 543 ; Bank v. St. John, 25 Ala. 
 
 12 Pet. 102. (N. S.)566 ; Jones v. Terre Haute, etc., 
 
 » Railway Co. v. Allerton, 18 Wall. R. Co., 57 N. Y. 196. See, also, Howe 
 
 233. V. Duel, 43 Barb. 508. 
 
 3 Bedford R. Co. v. Bowser, 48 Penn. * Bank of the U. S. v. Dandridge, 12 
 
 St. 29. Wheat. 113.
 
 220 Private Coepokations. 
 
 fere with the management of the affairs of the company by the 
 directors, where they act in good faith, and within the scope of 
 the general powers of the corporation. The remedy of the stock- 
 holders for mismanagement, or a lack of ability or judgment on 
 the part of these agents, would be to make a change of them at a 
 proper meeting, held for that purpose, which is generally provided 
 for by the laws of the institution. In this way a change of man- 
 agement and of the business policy may be effected to suit the 
 interests or the wishes of a majority of the members. 
 
 On the subject of the exclusiveness of the authority of the 
 directors of a corporation, and their exemption from any inter- 
 ference on the part of the stockholders, and their right to control 
 and manage the corporate affairs, within the scope of the author- 
 ity conferred upon them, it was recently observed : " It might 
 well be doubted whether a general meeting of the stockholders of 
 the plaintiff [the corporation] could be legally held for any other 
 purpose than the selection of a board of directors. Such a meet- 
 ing as to any other purpose or object could only be in its purpose 
 and character advisory to the board of directors. It would have 
 no power to take under its charge or put under the charge of 
 others the affairs of the company. The president and directors of 
 such a corporation as the plaintiff have been said to be the agents 
 of the stockholders ; but this expression must be understood in 
 view of, and must be limited to, the subject under consideration. 
 In any thing like a general or universal sense, it will be readily 
 seen that it cannot be true. Indeed, so far as third persons and 
 especially the government or creating power of the corporation 
 are concerned, the president and the directors, and the stockhold- 
 ers may rather be considered as the members and limbs, each 
 acting within its appropriate sphere, of that artificial being or 
 entity, to which the name and powers of the corporation have 
 been assigned by the law of its creation. When, therefor,e, a 
 question arises, by whom the conferred powers are to be exercised, 
 it will be determined rather by the law of the creation of the com- 
 pany, showing in each case on whom the governing or controlling 
 power has been conferred, than by any consideration of the rights 
 and interests of those concerned in the corporation as among them-
 
 DlREOTORS. 221 
 
 selves." ' If the stockholders are dissatisfied with tlie manage- 
 ment of the affairs of the company they may apply to a court of 
 equity for relief in a proper case, or in the absence of any ground 
 upon which equitable interference can be invoked, they must 
 wait until an opportunity presents, and change the management. 
 They have no power, through stockholders' meetings or other- 
 wise, to take from the directors any of the express or implied 
 powers possessed by them. 
 
 Sec. 140. Powers depend upon interpretation. — The powers of di- 
 rectors must frequently depend upon the construction of the fun- 
 damental law of the corporation, and the questions most frequently 
 presented to the courts are those relating to tlie law creating and 
 constituting boards of directors, and the proper construction and 
 interpretation of the charter, articles of association, by-laws, or 
 constating instruments of the corporation. 
 
 DEC. 141. Powers not conferred on directors remain in the corporate 
 body. — As the directors of a corporation are, at least in one sense, 
 agents of the corporation, being the instruments through which tlie 
 corporation acts, and unlike agents not subject to the rd ers or 
 directions of the corporation — their principal — or liable to have 
 their powers revoked except by the methods provided by law, 
 and receive their powers from their appointment and the constat- 
 ing instruments, whatever power, in reference to the management 
 
 ' Opinion by Gholson, J., in Dayton, obvious from the charter, that the 
 
 etc., R. Co. V. Hatch, 1 Disn. 84. See, company could do no act except 
 
 also, Whitewell V. Warner, 20 Vt. 425; through the directors. When the 
 
 Com. V. Roman Cath. Soc, 6 S. & R. 508; charter prescribes the mode of its ac- 
 
 Ridgway V. Farmers' Bank, 12 id. 256; tion, its injunctions must be rigidly 
 
 Bank of Kentucky V. Schuylkill Bank, pursued. * * * The stockholders 
 
 IParis, Sal. Cas. 180 ; State v. Bank of in this case had no power to make a 
 
 Louisiana, La. 745 ; Salem Bank v. lease or do any other administrative 
 
 Gloucester Bank, 17 Mass. 29, where it act in the management of the affairs of 
 
 is held that, if the general power of the corporation. If a case could be 
 
 making by-laws is left by the charter made at all, it could be executed only 
 
 to the corporation at large, the power in pursuance of an act of the directors, 
 
 of the board of directors may be cir- who are appointed by the charter for 
 
 cumscribed by them. the management of its affairs. It is no 
 
 In Conro v. Port Henry Iron Co., answer that individual stockholders, 
 
 supra, a lease was made by the stock- who were present at the meeting when 
 
 holders instead of the directors, and the lease was ordered, were also direc- 
 
 the charter provided for a board of tors. They did not meet or act as di- 
 
 directors of the corporation with gene- rectors, but as stockholders." 
 ral powers ; the court say : " It is quite
 
 222 Private Cokpoeations. 
 
 of its affairs, does not, by virtue of these, vest in them, must 
 reside in the whole body ; and it has been held that in emergen- 
 cies, where the charter failed to prescribe the mode of procedure 
 so as to accomplish the objects of the corporation, the stockholders 
 have a right to act and exercise whatever power is necessary to 
 carry out the purposes of the company and preserve its corporate 
 existence.' Where the charter or by-laws are silent as to the 
 manner in which certain acts shall be done, and they cannot be 
 said fairly to come within the implied powers ot the directors, 
 they may acquire authority to do the acts by a vote of the stock- 
 holders of the corporation at a meeting legally called for that pur- 
 pose, provided they are acts which is within the power of the cor- 
 poration to perform, and authority can be acquired in no other 
 manner, and such an act performed by directors without this 
 special authority is illegal and void."^ Thus directors have no 
 authority, unless specially conferred, to sell the entire movable 
 property of the corporation, when such sale would prevent a con- 
 tinuance of its business, and such a sale, made without special 
 authority conferred upon them by the stockholders at a legal 
 meeting, would be void as to all stockholders who did not assent 
 thereto ; ' and in the Louisiana case cited supra^ the same doctrine 
 was held where the building committee of a corporation sold the 
 corporate property to the builder in liquidation of his claim, 
 without special authority. In an English case* it was held that 
 authority reposed in directors to sell or lease the works of the cor- 
 porations could not, without special authority, lease them, and give 
 the lessee the option of purchasing within a certain time ; that 
 they only had authority to lease or to sell, and that their author- 
 ity was exhausted by leasing the property, and the option given 
 the lessee to buy could only become valid by being ratified by the 
 members of the company. From these illustrations it will be seen 
 that the powers of directors are not unlimited and are circum- 
 scribed by the express provisions of the charter and the by-laws, 
 and must be exercised only to the extent warranted by the express 
 provisions of the charter, or the nature and chai*acter of the busi- 
 
 ^ In re Wheeler, 2 Abb. Pr. (N. S.) ^ Abbott v. American Hard Rubber 
 
 361. Co., 33 Barb. 578. 
 
 « African M. E. Church v. Duru, 19 * Clay v. Rufford, 5 De G. & S. 768. 
 La. Ann. 302.
 
 DlEEOTOKS. 223 
 
 ness, and when their acts are in excess of these powers, they are 
 void. 
 
 Sec. 142. The directors cannot change the character or objects of the 
 corporation. — The directors, by virtue of the power they possess, 
 cannot change the entire character or purposes of a corporation. 
 Any attempt of this character would be ultra vires, of which all 
 parties interested would be required to take notice. Such author- 
 ity is not involved in a general power to manage its business, and 
 could only be exercised with the consent of each stockholder, or 
 at least upon full satisfaction and compensation being made 
 to such as may dissent.' No majority, however large, have a 
 right to divert the joint capital to any purpose not consistent 
 with the objects of the corporation.* And any fundamental 
 change or alteration of the charter in respect to the original ob- 
 jects and purposes for which the corporation was created, cannot 
 be obligatory on any member who objects ; and increasing the 
 capital stock of a corporation by a board of directors beyond the 
 limits fixed by the charter would be ultra vires. If the power to 
 change the capital is expressly given to the corporation, it must 
 be exercised by the stockholders, and not by the directors. On 
 this question the supreme court of the United States say : " A 
 change so organic and fundamental as that of increasing the capi- 
 tal stock of a corporation beyond the limit fixed by the charter, 
 cannot be made by the directors alone, unless expressly authorized 
 thereto. The general power to perform all corporate acts refers 
 to the ordinary business transactions of the corporation, and does 
 not extend to a construction of the body itself, or to an enlarge- 
 ment of its capital stock, * * * Changes in the purpose and 
 object of an association, or in the extent of its constituency or 
 membership, involving the amount of its capital stock, are neces- 
 sarily fundamental in their character, and cannot, on general prin- 
 ciples, be made without the express or implied consent of the 
 members. The reason is obvious. First, as it respects the pur- 
 pose and objecto This may be said to be the final cause of the 
 
 ' Zabriskie v. Hackensack, etc., R. Black v. Delaware, etc., R. Co., 22 id. 
 Co., 18 N. J. Eq. 178. 130. 
 
 5 Kean v. Johnson, 9 N, J. Eq. 401 ;
 
 224 Private Corporations. 
 
 association, for the sake of which it was brought into existence. 
 To cliange this without the consent of the associates would be to 
 commit them to an enterprise which they never embraced, and 
 would be manifestly unjust. Secondly, as it respects the constit- 
 uency, or capital and membership. This is the next most impor- 
 tant and fundamental point in the constitution of a body corpo- 
 rate. To change it without the consent of the stockholders 
 would be to make them members of an association in which they 
 never consented to become such. It would change the relative 
 influence, control and profit of each member. If the directors 
 alone could do it, they could perpetuate their own power. Their 
 own agency does not extend to such an act, unless so expressed in 
 the charter or subsequent enabling act, and such subsequent act 
 would not bind the stockholders without their consent or assent to 
 it in some form." ^ 
 
 But, where authority in this respect is^ expressly conferred upon 
 the directors by the general law of its constitution, or to be in- 
 ferred from the charter or general acts of the legislature in exist- 
 ence at the time of the creation of the corporation, the directors 
 would possess the requisite power to accept an amendment of the 
 charter. And amendments of the charter, not in violation of its 
 objects, may be accepted by the shareholders, but the trustees or 
 directors have no powers in this respect, except such as may be 
 conferred upon them ; and where it is apparent that this authority 
 is by law vested in the directors, they could, undoubtedly, ac- 
 cept an amendment of the original charter or act of incorporation ; 
 for instance, an amendment authorizing a subscription in real 
 estate to be received by the company.^ 
 
 On this subject Turner, L. J., observes : " The great under- 
 taking of these {i. e., railway and similar) companies could 
 not be carried out by private enterprise, and parliament has, 
 therefore, with a view to public ' good, authorized the con- 
 stitution of large bodies, acting by directors, for the purpose 
 of carrying them out. But these bodies have no existence 
 independent of the acts which create them, and they are cre- 
 
 ^ Railway Co. V. Allerton, 18 Wall. 2 Dayton, etc., R. Co. v. Hatch, 1 
 233. See, also, Marlborough Man. Co. Disn. 84; State v. Adams, 44 Mo. 570. 
 V. Smith, 2 Conn. 579.
 
 DlRECTOKS. 225 
 
 atcd by parliament with special and limited powers, and for 
 limited purposes. Whether parliament has wisely limited their 
 powers for the purposes of their incorporation is not for us to 
 consider. The fact of their being endued with such powers, and 
 incoi-porated for such purposes, only shows that parliament did 
 not think fit to intrust them with more extended powers, or to 
 incorjiorate them for other purposes." ^ 
 
 Sec. 143. Directors as agents. — It is evident tliat the directors 
 of a corporation, in whatever manner constitnted, are the agents 
 of the corporation, and, within the scope of the authority con- 
 ferred by the laws or regulations of the company relating to 
 them, their acts are the acts of tlie company. The general princi- 
 ples in fact of the law of agency are applicable to the relations 
 between the company and its directors. But they are agents only 
 so far as they have authority, by virtue of powers conferred, and 
 of this authority and the extent or limit of it, parties dealing with 
 these or other agents of the corporation would be required to 
 take notice. These are open to public inspection, and constitute the 
 power of attorney, and instructions to these agents, accessible to all 
 parties dealing with them.* The familiar doctrine in such cases is, 
 that although the party dealing with an agent is not required to take 
 notice of private instructions communicated to him from the princi- 
 pal, in reference to his agency, he is required to take notice of a 
 written authority and power of attorney, which he should know, 
 from the circumstances of the case or the character of the agency, 
 must exist. And where there is a special authority to do a particular 
 act, or a general authority to do all acts relating to a particular 
 matter, the agent may use all the necessary and appropriate means 
 to carry out the purposes of the agency ; and any person dealing 
 with such an agent may rely upon the acts of such an agent, in 
 executing the authority thus conferred, as obligatory upon his prin- 
 
 ' Shrewsbury, etc., R. Co. V. London, 55; 22 L. J. Ex. 304; Green's Brice's 
 
 etc., R. Co., 22 L. J. Ch. 682. On the Ultra Vires, 28 et seq. 
 
 AociriuQ ot vltra vires in such cases, ^ Zabriskie v. Cleveland, etc. , R. Co., 
 
 see Salomons v. Laing, 12 Beav. 339; 23 How. 381; Bank of Augusta v. 
 
 East Anglian, etc., R. Co. v. Eastern, Earle, 13 Pet. 587; Pearce v. M. & I. 
 
 etc., R. Co., 11 C. B. 775; South York- R. Co., 21 How. 441. 
 shire R. Co. v. Great N. R. Co., 9 Ex. 
 
 29
 
 226 Private Corpokations. 
 
 cijxil.' All })ersons dealing with the agents of a corporation must be 
 supposed to know the provisions of the fundamental laws or con- 
 stating instrumentsof the corporation, and of the limitations therein 
 contained relating to the authority of its agents, as these laws are 
 usually accessible to all persons. But where agents act within the 
 apparent scope of the authority conferred upon them, it will be pre- 
 sumed that their acts were authorized by the body they represent." 
 It has, however, been held that the doctrine that authority to 
 make a contract, by an agent acting for an individual, will be 
 implied from former employment of the same agent for the same 
 purposes, has no application where the person assumes to act as 
 agent for a corporation.^ The reason of this distinction is, that 
 in the first case the extent of the authwity is generally known 
 only between the principal and agent, but in the latter the 
 authority is created by statute, or is a matter of record, to which 
 all may have access who have occasion to deal with its officers.'' 
 
 Sec. 144:. Distinction in Massachusetts. — In Massachusetts a dis- 
 tinction has been made between the provisions of the charter in 
 relation to the authority of directors and other officers, whicli 
 parties are bound to know, and of by-laws, of which actual notice 
 it is claimed should be brought home to the parties dealing with 
 the agents.* This doctrine is based upon the distinction, that in 
 the one case the means of knowledge is open and public, while 
 in the other, it is private. This would, however, we apprehend, 
 
 ' Story on Agency, § 73. and one which violates the provisions 
 ^Bissell V. Michigan Southern, etc., of this organic act. The deed of set- 
 R. Co.,22 N. Y. 258. In this case, tlement is the private act of the share- 
 SeldON, J., observes: " There are, in holders, and its provisions have re- 
 England, a class of corporations organ- spect solely to their private interests, 
 ized under general laws, which do not It is a mere power of attorney, and 
 provide the manner in which the ob- bears no resemblance to a law enacted 
 jects and purposes of the corporation with a view to the interests of the 
 are to be eifected, but leave this to be public. There is evidently no ques- 
 arranged by a deed of settlement be- tiou of public policy involved, when 
 tween the corporators themselves. By the question is, whether the officers 
 this deed the companies prescribe and have exceeded their authority." 
 limit the powers and functions of their ^ Wyman v.Hallowell Banik,14 Mass. 
 various officers, so far as they are left 58. 
 
 uncontrolled by the statute and the •* Salem Bank v. Gloucester Bank, 17 
 
 general laws of the kingdom. Now, Mass. 1. See, also. State v. Commer- 
 
 it is plain that there is no analogy be- cial Bank of Manchester, 14 Miss. 237. 
 
 tween an act which merely transcends ^ Fay v. Noble, 12 Cush. 1. 
 the limits of this deed of settlement.
 
 DiEEcroRS. 227 
 
 be limited to those cases wliere tlie by-laws were adopted by the 
 board of directors. But iti this country organizations are gener- 
 ally formed under general statutes, by signing articles or certifi- 
 cates of association, etc., and these may provide for, and prescribe 
 the duties of, officers and agents, and thereby such regulations 
 would become a part of its organic law. In some cases, however, 
 the general doctrine seems to have been maintained, that parties 
 dealing with an agent would be bound even to take notice of the 
 limitations of his authority contained in the by-laws, as being 
 matters of record, and subject to examination by those dealing 
 with the corporation.* But an examination of the cases will dis- 
 close the fact that this duty is only imposed upon third persons, 
 or as they may be called, strangers to the corporation, when the 
 act is one naturally incident to the powers of directors, or one not 
 usually executed by them, or when an act was done by some offi- 
 cer of the corporation, which is usually incident to the duties of 
 the directors. In such cases the party is fairly put upon inquiry 
 as to whether the act is authorized, and fails to make proper in- 
 quiry at his peril. This rule was well illustrated in a New York 
 case,' in which the plaintiff sought to recover $50,000 of the de- 
 fendant corporation for alleged services for obtaining for and in- 
 troducing to the Danville, etc., Railroad Company, contractors who 
 would undertake to build its road, and for the conversion of cer- 
 tain municipal bonds, alleged to have been agreed to be delivered 
 by said company in payment for said services. The defend- 
 ant corporation was formed in 1869, under the general laws 
 of Indiana and Illinois, by the consolidation of the Indianapolis, 
 Crawsfordsville and Danville Railroad Company and the Danville, 
 Urbank, Bloomington and Pekin Railroad Company. By the con- 
 solidation the defendant corporation assumed all the liabilities of 
 the constituent roads. The president of the Indiana and a direc- 
 tor of the Illinois corporation conducted the negotiation with the 
 plaintiff and the president of the Illinois corporation, and by 
 
 • Adriance V. Eoome, 53 Barb. 399; McCulloch v. Moss, 5 Denio, 567; 
 Wild V. Bank of Passamaquoddy, 3 Ma- Dabney v. Stevens, 40 How. Pr. 341; 
 son, 505 ; State v. Commercial Bank, Salem Bank v. Gloucester Bank, 17 
 14 Jliss.; Risley v. Indiana, etc., R. Maps. 1 ; Tjowell Savings Bank v. Win- 
 Co., 1 Hun, 202 ; North River Bank v. Chester, 8 Allen, 109. 
 Aymar, 3 Hill, 262; Mechanics' Bank V. '^Risley v. Indianapolis, etc., R. R. 
 New York, etc., R. Co., 13 N. Y. 599 ; Co. 1 Hun, 202.
 
 228 Private Corporations. 
 
 authority of the latter offered the plaintiff the sum named above 
 for the services. The defendants resisted the suit upon the ground 
 that the president had no authority to make the contract in ques- 
 tion. There was no evidence from which it could be inferred 
 that the company, whose officer he was, had ever held him out or 
 permitted him to represent himself as having authority of that 
 kind, and the court in reversing the judgment below for the 
 plaintiff, by Daniels, J., said: "The president with whom the 
 contract for the payment to the plaintiff was made had no special 
 or direct authority from the company to enter into any agreement 
 of that kind. * * The circumstance that he was president of 
 the company was not of itself evidence of the existence of such 
 authority, /br it does not ordinarily appertain to the duties of 
 persons acting in that capacity. He was at most the agent of the 
 company created and existing under a special legislative act de- 
 fining the rights and privileges of the body and the manner 
 in which they should be enjoyed. This the plaintiff is to be re- 
 garded as knowing. For all persons dealing with the officers or 
 agents of corporations are bound to know that they act either 
 under its charter or by-laws, or the usages which may be shown to 
 exist, defining the extent of their authority. They must, in doubt- 
 ful cases, acquaint themselves with the extent of that authority, or 
 otherwise submit to the consequences resulting from their omission 
 to do that.^ The charter of the company gave the immediate gov- 
 ernment and direction of its affairs to a board of thirteen directors, 
 having power to elect one of their number president, a majority 
 of whom constituted a quorum for the transaction of business. 
 But it conferred no authority on the person who should be elected 
 president to bind the company by his contracts. 
 
 His power in that respect appears to have been defined exclu- 
 sively by the by-laws enacted by the company. And it was re- 
 stricted to the management of all negotiations with other corpo- 
 rations, companies or individuals, touching their mutual interests 
 and the claims of either party on the other, and to entering into 
 or concluding all such agreements or contracts, with any of such 
 
 ' North River Bank v. Aymar, 3 Hill, Adriance v. Roome, 52 Barb. 399 ; Dab- 
 
 263; Mechanics' Bank v. New York & ney v. Stevens, 40 How. Pr. 341, 345, 
 
 N. H. R. R. Co., 13 N. Y. 599, 631, 634; 346. 
 McCulloch V. Moss, 5 Denio, 567 ;
 
 Directors. 229 
 
 parties as should be approved by the board of the executive com- 
 mittee. This entirely withheld the power to make contracts bind- 
 ing on the company, unless the approval of the executive connnittee 
 was first obtained for that pur2)ose. And it deprived him of the 
 power of entering into the agreement which the referee, upon 
 sufficient evidence, has found was made by him with the plaintifE 
 for the payment of the $50,000. The case of the Merchants^ 
 Bank V. State Bank ^ was relied upon as sustaining the validity 
 of all contracts entered into by officers of corporations. But it 
 clearly could not have been intended by that decision to sanction 
 so broad an extension of the law affecting transactions of this de- 
 scription. Yery broad propositions, it must be confessed, were 
 stated in the opinion, but perhaps none too much so for the facts 
 and evidence in the case which the court then decided. The one 
 chiefly relied upon to sustain the contract in this case states the 
 law to be, "that where a party deals with a corporation in good 
 faith, the transaction not being idtra vires, and he is unaware of 
 any defect of authority or other irregularity on the part of those 
 acting for the corporation, and there is nothing to excite suspicion 
 of such defect or irregularity, the corporation is bound by the con- 
 tract, although such defect or irregularity in fact exists." But 
 even this does not extend as far as the pm'poses of the plaintiff's 
 case require, in order to sustain his recovery, for the president of 
 the company was not invested with a defective or irregular au- 
 thority to bind the company by his contracts. He had no author- 
 ity whatever for that purpose. And where that is the case, and 
 the officer has not been permitted to act as though he had the 
 authority, there is nothing in that decision holding that he can 
 bind the company. 
 
 But this proposition is inapplicable to the present case, because 
 there was a circumstance brought to the plaintiff's knowledge, 
 according to his own evidence, which ought to have excited his 
 suspicions that the president had no power to bind the company by 
 the agreement ; for he says that Griggs, the president, and Wil- 
 son, one of the directors acting with him, had not brought with 
 them proper evidence of their authority to contract for the build- 
 
 > 10 Wall. 604.
 
 230 Private Corporations. 
 
 ing of this and the other road, and it was decided that the execu- 
 tion should be adjourned over for them to go home, convene their 
 boards of directors, and get them to do whatever was necessary to 
 be done about the contract for building the roads. If they could 
 not, for want of power, enter into contracts for the construction of 
 the road, which was a substantial part of what the corporation 
 was created to do, it is difficult to see how it could, with any pro- 
 priety, be assumed that the power existed without any action of 
 the board, which would authorize the president to make the con- 
 tract with the plaintiff upon which he has been allowed to recover. 
 The fact that the president could not, without specific authority, 
 bind the company by one agreement should have been accepted 
 as quite conclusive evidence of some w^ant of authority to render 
 the other obligatory upon it. One was a fair inference from the 
 other. 
 
 Sec. 145. Rule in Sngland as to the authority of directors. — The 
 English doctrine in reference to the authority of directors is, 
 " that persons dealing with a registered company are bound to ac- 
 quaint themselves with the limits imposed by the deeds of settle- 
 ment or articles of association, on the authority of the directors ; 
 yet, strangers to the company, dealing with directors, cannot be 
 affected by by-laws, which may, under the articles, be from time 
 to time made and varied by the directors, unless notice of such 
 by-laws is proved." ' 
 
 Sec. 146. Delegation of their authority.— The general principles 
 of the laws of agency in respect to the delegation of the authority 
 of the agent are applicable to the agents of corporations. Mr. 
 Story on this subject says : " One who has a bare power or 
 authority from another to do an act must execute it himself, and 
 cannot delegate his authority to another ; for this being a trust or 
 confidence reposed in him personally, it cannot be assigned to a 
 stranger whose ability and integrity might not be known to the 
 
 ^ Buckley, p. 427. See, also, Ernest by-laws are sometimes deemed direct- 
 V. Nicholls, 6 H. L. C. 401 ; Fountaine cry only. Bank of U. S. v. Dan- 
 V. Carmarthen R: Co., L. R., 5 Eq. 316; dridge, 12 Wheat. 64 ; U. S. v. Kirk- 
 Royal Bank of India's Case, L. R., 4 patrick, 9 id. 720 ; U. S. v. Van Zandt, 
 Ch. 252. Provisions of the charter and 11 id. 184.
 
 Directors. 281 
 
 principal, or who, if known, niiglit not be selected by liini." ' 
 And it has been held in reference to tlie powers of directors as 
 agents, that where power is conferred upon them involving the 
 exercise of personal judgment and discretion, they cannot, with- 
 out some express authority for the purpose, delegate this authority 
 to anotlier person. 
 
 In a case in New Hampshire, iuvolving the question, the court 
 says : " According to the uniform current of authorities, it would 
 seem quite clear that an agent cannot delegate to anotlier any 
 portion of his power requiring the exercise of discretion or judg- 
 ment, unless in the power conferred upon the agent is involved 
 the power of substitution by the agent, in express terms, or at 
 least by necessary implication. But no such power of substitu- 
 tion was conferred upon the directors in the present case. The 
 by laws to be sure allowed ' the exercise of a general superintend- 
 ence and control by the directors, or a majority of them, over the 
 affairs of the corporation.' But this did not include the right 
 to confer authority upon others to exercise the same power. 
 Here was clearly no express power of substitution given to the 
 directors, and there was nothing in the nature of the authority to 
 be exercised which could render the aid of others necessary. No 
 power of substitution is, therefore, to be implied." '' 
 
 But the question whether the authority conferred and delegated 
 calls for the exercise of such judgment or discretion, as comes 
 within the general rule in such cases, or is a merely ministerial 
 act, is frequently one that is difficult to determine. And in 
 Massachusetts it was held that : " A board of directors of the 
 banks of Massachusetts is a body recognized by law. By the by- 
 laws of these corporations, and by a usage so general and uniform 
 as to be regarded as a part of the law of the land, they have the 
 general superintendence and active management of all the concerns 
 of the bank, and constitute, to all purposes of dealings with otiiers, 
 the corporation. We think they do not exercise a delegated 
 authority, in the sense in which the rule applies to agents and 
 
 ' Story on Agency, § 13. power of discounting notes and bills 
 
 - Gills V Bailey, 31 N. H. 149. See, was vested iu the board of directors, 
 
 also, Re Leeds Banking, L. R., 1 Ch. they could not delegate this trust to 
 
 App. 563. In Percy v. Millaudon, 3 an agent. 
 
 La. 568, it was held that, where tlie
 
 232 Private Corporations. 
 
 attorneys, who exercise the powers especially conferred upon thera 
 and no others. We think, therefore, that a board of directors 
 may delegate authority to a committee of their own number, to 
 alienate or mortgage real estate." ' The charter or organic laws 
 of the corporation usually confers the exclusive power of manag- 
 ing its affairs upon a board of directors. This, however, does 
 not constitute it the corporation, and tlieir acts evidenced by their 
 votes, as shown by the record, are as complete authority to all its 
 agents as if the appointment were by deed or other written in- 
 strument and authenticated by the corporate seal.^ 
 
 Sec. 147. Ratification of directors' acts. — It is a familiar principle 
 of the law of agency, that the principal may ratify an unauthor- 
 ized act of an agent. This principle is also applicable to corpora- 
 tions and their agents. This ratification may be by a direct and 
 express sanction of it, or by such action and conduct on its part, 
 subsequent to the act, as to authorize the presumption that it has 
 accepted or ratified the agent's acts.^ But if the act done by the 
 agent is entirely beyond any authority of the corporation to per- 
 form, it would be ultra vires, and generally void.* The ratifica- 
 tion of the acts of an agent is, however, generally inferred from 
 the acts of the corporation and the circumstances of the case. 
 If the board of directors, or other agents on behalf of the cor- 
 poration, make a contract and the corporation receives the 
 benefits of such contract without objection, it would ordinarily be 
 treated as a ratification of it, and the contract of the corpora- 
 
 ' Burrill v. Naliant Bank, 2 Mete. Mass. 221 ; ThompsoQ v. Toung, 2 
 
 (Mass.) 163. See, also, Percy v. Mil- Ohio, 334. 
 
 laudon, 3 La. 568 ; Weston . Bank v. '^ Bank of the U. S. v. Dandridge, 12 
 
 Gilstrap, 45 Mo. 419 ; Commissioners Wheat. 64 ; Fleckner v. Bank of the 
 
 V. Bank of Buffalo, 6 Paige, 497. U. S., 8 id. 338. 
 
 Directors have authority to empower ^ Lowell's Case ; Re New Zealand 
 
 one of their number to assign any Banking Co., L. R., 3 Ch. 131. 
 
 securities belonging to the company. * Peterson v. Mayor, etc., 17 N. Y. 
 
 Stevens v. Hill, 29 Me. 133 ; Spear v. 449 ; Dill, on Corp.. §§ 385, 386. Rati- 
 
 Ladd, 11 Mass. 94 ; Northampton Bank fication may be by express assent or 
 
 V. Pepoon, id. 288. And where di- conduct of the principal, inconsistent 
 
 rectors have authority to appoint with any other supposition than that 
 
 agents their authority does not neces- he intended to adopt and own the act 
 
 sarily cease with the termination of done in his name. Story on Agency, 
 
 the authority of the board appointing §§ 239, 252. But no amount of ratifi- 
 
 them. Anderson v. Longden.l Wheat, cation can give validity to an act pro- 
 
 85; Exeter Bank v. Rogers, 7 N. H. hibited by law. Martin v. Zellerbach, 
 
 33; Brown v. County of Somerset, 11 38 Cal. 300.
 
 Directors. 
 
 233 
 
 tion.^ Thus, where the directors of a railroad company allowed 
 the president to purchase locouiotives, and give bills in payment 
 therefor, and they were used on the road of the company for 
 more than three years, during the management thereof by the 
 president, who had authority from the directors to manage the 
 same in his discretion, and the directors afterward resumed the 
 management, this acquiescence was held to be such a ratification as 
 to be evidence of authority in the president to bind the company 
 for the payment of the bills issued by the president in payment 
 for such locomotives." And in another case where a coqjoratioa 
 allowed its ofKcers to give notes for property, where the right to 
 do so was doubtful, still the property having been taken posses- 
 sion of by the corporation, who used the same for legitimate cor- 
 porate purposes, this was held to be a ratification of the acts of 
 the officers.' But a ratification of an act cannot be inferred un- 
 less the stockholders kneio what the act was. The rule is, that. 
 
 ' On the subject of ratification of 
 unauthorized acts of agents, see Trott 
 V. Warren, 11 Me. 227 ; Episcopal 
 Charitable Soc. v. Episcopal Church, 
 1 Pick. 372 ; Bank of Columbia v. Pat- 
 terson, 7 Cranch, 299 ; Randall v. Van 
 Vechten, 19 Johns. 60 ; Qooday v. The 
 Colchester, etc., R. Co., 15 Eng. L. & 
 E. 596 ; Magill v. Kauffman, 4 S. & R. 
 317 ; Canal Bridge v. Gordon, 1 Pick. 
 297 ; Bank of the U. S. v. Dandridge, 
 12 Wheat. 89; Union Bank of Mary- 
 land v. Ridgely, 1 Harr. & G. 392; 
 Barriugton v.The Bank of Washington, 
 14 S. & R. 421 ; Wild v. Passamaquod- 
 dy, 3 Mason (C. C), 505 ; Smith v. Gov- 
 ernor, etc., Bank of Scotland, 1 Dow. 
 (Pari.) 27 ; Perkins v. Washington Ins. 
 Co., 4 Cow. 645 ; Troy, T. & R. Co. v. 
 McChesney, 21 Wend. 296 ; Warren v. 
 Ocean Co., 16 Me. 429 : Badger v. Bank 
 of Cumberland, 26 id. 428; Davidson 
 V. Bridgeport, 8 Conn. 472 ; Farmers' & 
 M. Bank v. Chester, 6 Humph. 458 ; 
 Hall V. Carey, 5 Ga. 239 ; Litchfield 
 Iron Co. V. Bennett, 7 Cow. 234 ; Clark 
 V. Boston Man nf. Co., 15 Wend. 256; 
 Lohman v. New York, etc., R. Co., 2 
 Sandf. 39 ; City of Detroit v. Jackson, 
 1 Doug. (Mich.) 106 ; Bank of the State 
 V. Comegys, 12 Ala. 772. 
 
 5 Olcott'v. Tioga Railway Co., 27 N. 
 Y. 546. 
 
 30 
 
 3 Moss V. Averell, 10 N. Y. 449. See, 
 also. Corning v. Southland, 3 Hill, 552; 
 Moss V. Rossie Lead Co., 5 id. 137 ; 
 Conro V. Port Henry Iron Co., 12 Barb. 
 27 ; Clark's Ex'rs v. Van Riemsdyk, 9 
 Cranch, 158 ; Church v. Sterling, 16 
 Conn. 388; Chicago Building Soc. v. 
 Crowell. 65 111. 453 ; Williams v. St. 
 George's Harbor Co., 2 De G, & J.547 ; 
 Edwards V, Kilkennv, etc.,R. Co., 26 
 L. J. C. P. 224 ; Phosphate of Lime 
 Co. V. Green, L. R..7C. P. 43; Athe- 
 naeum Life Assurance Co. v. Poolev, 3 
 DeG. & J. 294; L. J. Ch. 119. 
 
 Whatever may be authorized by a 
 corporation to be done may be ratified 
 when done by an agent in excess of, or 
 without authority. McLaughlin v. 
 Detroit, etc., R. Co., 8 Mich. 100. 
 
 Ratification of the unauthorized acts 
 of the president, where he executed a 
 mortgage purporting to be on corpo- 
 rate property, individually, and sealed 
 it with his private seal without special 
 authority, may be presumed from the 
 knowledge of the members of the 
 board of directors, and their long con- 
 tinued acquiescence. Sherman v. 
 Fitch, 98 Mass. 59 ; Lyndeborough 
 Glass Co. v. Massachusetts Glass Co., 
 Ill id. 315; Brown v. Winnissimmet 
 Co.. 11 Allen, 326 ; Krider v. Western 
 College. 31 Iowa, 547.
 
 234 Private Corporations. 
 
 before an act can be treated as the ratification of anotlier, 
 the party acting must have some knowledge or information at 
 least of the existence of the act in all its essential details. 
 Thus, in a case the leading features of which are given in 
 a previous section,' one of the grounds upon which the plaint- 
 iff sought to enforce his claim was, that the president, at 
 the time the contract sought to be enforced was entered into, 
 accepted an order drawn by the contractors upon him, payable to 
 the plaintiff for county, city and township bonds, to the amount 
 of $S6,GGiJ.GQ, bearing ten per cent interest. The claim of the 
 plaintiff, and the rules applied thereto are clearly stated by 
 Daniels, J., and, as the case is well considered, and is believed 
 to embody the true rule in such cases, we give it here. He said : 
 " The plaintiff, however, insists that the making of the contract 
 for the construction of the road, and with the authority afterward 
 conferred for the purpose by the company, in effect adopted and 
 ratified the agreement which the president made with him for the 
 payment of the $50,000. But that cannot be so, because there 
 was nothing in the agreement made for building the road, by which 
 even the existence of the one made with him was assumed. It, 
 in no way, entered into the agreement for the construction of the 
 road, and was not brought to the notice of the board of directors 
 in any way whatever. And they cannot, with any propriety, be 
 held to have adopted or ratified, by that act, another of an entirely 
 different nature, which they knew nothing about. The fact that 
 it was brought to Wilson's notice, at the time when the agree- 
 ment with the plaintiff was made, was not notice to the company, 
 or the board of directors, for any such purpose. The board was 
 the body which acted, and no notice was given to it of the presi- 
 dent's attempt to bind the company for the payment of the money 
 to the plaintiff. Before one act can be accepted as the ratification 
 or confirmation of another, the party acting must have some 
 knowledge or information, at least, of its existence.'' Another 
 circumstance relied upon as a ratification of the act, by which the 
 agreement with the plaintiff was made, is the admission contained 
 
 'Risley V. Indianapolis, etc., R. R. 'Hays v. Stone, 7 Hill, 128, lol, 132; 
 Co., ante. Ke'eler v. Salisbury, 33 N. Y. G48 ; 
 
 ••'Brass v. Worth, 40 Barb. 648; Smith v. Tracy, 36 id. 79.
 
 Directors. 235 
 
 in tlic answer, that the order received hy liim was accepted by 
 the company. But this admission is not sufficient for the purpose, 
 because it in no way concedes that the order had any connection 
 with the agreement. It is not admitted that the order was drawn, 
 accepted or received to secure the performance of the agreement, 
 or that it had any rehition whatever to it, or that the company 
 knew any thing of it. The admission is that it promised, at the 
 request of the contractors, to deliver the plaintiff the bonds, pro- 
 vided they became entitled to them by the performance of their 
 contract; certainly no ratification of the agreement with the 
 plaintiff can be inferred from such a promise. And there is 
 nothing in the evidence extending its effect in that respect. The 
 order was drawn by the contractors who agreed to build the rail- 
 road, and it requested and directed the delivery to the plaintiff 
 of a portion of the bonds which they were, by their contract, to 
 receive by way of compensation for what they were to do in its 
 performance. It indicated a payment by them upon some obliga- 
 tion they had incurred to the plaintiff, instead of the securing or 
 settlement of a demand existing in favor of the plaintiff against 
 the railroad company. Neither by the import or terms of the 
 order could the company have inferred from it that it was given 
 or accepted to secure any debt the plaintiff claimed to have against 
 the company. And for that reason, as long as the conipany, or 
 its hoard of directors^ had no notice that it was to he held hy the 
 plaintiff as security for the payment of his demand^ its acceptance^ 
 or the promise admitted in the answer^ constituted no ratification 
 or confirmation of that demand. The circumstances under which 
 the order seems to have originated exclude the presumption that 
 notice of its purpose or use could not have been given to the 
 board of directors. Wilson, who aided the plaintiff in procuring 
 the contractors who were to build the road, and received an order 
 himself for $10,000 of the county, city and town bonds, and who 
 evidently had no motive to misrepresent the facts, was sworn and 
 examined as a witness on his behalf. And in the course of his 
 evidence, he stated that the contractors agreed at first to build 
 the railroad for $5,000 per mile, in county, city and town bonds, 
 in addition to the other compensation it was agreed they should 
 receive. And after that, without making any reduction in the
 
 236 Private Cokpokations. 
 
 other amount, tlie payment in those bonds was increased to $6,- 
 500 per mile. This, he said, was done at the instance of Clark 
 R. Griggs, who was the president of the company. And the 
 object was to charge the excess upon the company for building 
 its road, and through the contractors to divide the excess between 
 himself, Wilson, a director and president of the other railroad 
 company, the plaintiflP, and the contractors. And he stated that 
 the division was so far made, at that time, as to have orders 
 drawn for $120,000, in round numbers, by the contractors, one 
 being in his own favor for $10,000, and the residue for equal 
 amounts, one in favor of the president of the company, another 
 in favor of Wilson, one of its directors, and the other in favor of 
 the plaintiff. And these orders were then accepted by Mr. 
 Griggs, and delivered to the persons who were to receive them, 
 he receiving the one intended for himself. The witness was cor- 
 roborated in this statement, by the evidence of the defendant's 
 witness, Alton, who was one of the contractors. For he says that 
 the price in bonds was first fixed at $5,000 per mile for building 
 the road, and afterward advanced, on the contractors' learning 
 that the work would probably prove more expensive than at first 
 it was supposed to be, so that they should receive $200 or $300 
 more per mile in bonds. Then he said, that Griggs said they 
 could raise $6,500 per mile. That he understood how much the 
 contractors were to have net, and that they were to ipa-y a certain 
 amount for himself, the plaintiff and others, of the bonds, as a 
 commission or brokerage. And that it was arranged between 
 Griggs, Wilson and Risley, that a certain portion was to be 
 allowed to them. He then added that he was very confident, 
 that, in the arrangement he had with Griggs, it was not spoken 
 of, until it was arranged between them how it was to be divided. 
 To carry it out, he stated that an order was first drawn for the 
 entire $120,000, and accepted by Griggs. But that was afterward 
 divided into the four orders mentioned by Wilson, so that each 
 could have his own share at once, without being at all dependent 
 upon the honor which is supposed to exist in such cases, but 
 nevertheless, has sometimes proved to be disregarded. The cir- 
 cumstances very decidedly sustain the probabilities of these state- 
 ments. For, the orders were all made out by the plaintiff, signed
 
 Directors. 237 
 
 by the contractors, accepted by Grigpjs, and distributed in the 
 manner mentioned at the time when tlie contract was entered into. 
 The plaintiff, thougli afterward on the stand as a witness, made 
 no attempt to deny these statements, but simply left the case upon 
 his former evidence, in Avhich he said that he did not know 
 whether the contractors received any consideration for drawing 
 these orders ; and Griggs, while he denies being a party to any 
 such arrangement, still admits that the orders were drawn, accepted 
 and divided as the others stated they were, and tliat he received 
 one for between $36,000 and $37,000. He also says that he did 
 not inform the board of directors that he had received such an 
 order, neither was the counsel of the company, who was with him 
 in the city attending to the completion of the contract to build 
 the road, informed of it, or of the ai'rangement made for this 
 division of $120,000 of the bonds. In view of the great im- 
 probability that the contractors would voluntarily have proposed 
 to give away so large a portion of their compensation, if it had 
 even been designed they should receive it as such, and the reasons 
 which must have operated upon Mr, Griggs, by way of inducing 
 him to deny his complicity in this piece of inexcusable knavery, 
 the direct evidence of the two witnesses, swearing to the contrary, 
 and the inherent probability of the truth of their statements, no 
 reliance can be placed upon his denial. The whole weight of the 
 case is against him on this subject, and it must be concluded, that, 
 for a consideration he provided the contractors with, he enabled 
 them to compensate himself and Wilson for a shameless violation 
 of the duties which the confiding stockholders and directors had 
 intrusted them with performing. After being implicated in that 
 misconduct, no reason could exist for supposing that he would so 
 far explain the matter to the board of directors as to secure any 
 action of theirs amounting to a ratification of that portion of the 
 transaction in which the plaintiff was allowed even the appearance 
 of profiting. And certainly his acceptance of the orders as presi- 
 dent of the company could be attended with no such results, for, 
 as long as he had no authority to make the agreements to pay the 
 plaintiff the $50,000 for procuring the contractors, he was equally 
 without authority to bind the company by a ratification of it."
 
 238 Private Corporations. 
 
 Sec. 148. Instances of acts which amount to a ratification. — Where 
 an insurance company, whose capital was iixed hj its charter, 
 which, liowever, gave authority to tlie stockliolders to increase 
 the stock to a certain amount, and the directors issued the 
 additional amount without a formal or lawful vote of the stock- 
 holders, but they had received dividends upon the basis of the 
 additional stock, having knowledge thereof, it was held to 
 constitute a complete ratification of the issue. In a case in- 
 volving this question, Dillon, J., observes : " It is our opinion 
 that the original charter of the company contemplated that any 
 increase of the capital stock beyond $1,000,000 should be assented 
 to by the stockholders as distinguished from the directors. It 
 being admitted tliat the shares of stock owned by the defendant 
 were no part of the $1,000,000 first issued, but were part of the 
 stock issued by it in excess of the $1,000,000, and prior to the 
 amended charter of March 25, 1869, this" stock would not be legal, 
 and no action could be maintained to recover the price of it, 
 unless the stock had become legal stock by matters subsequently 
 occurring, or unless the defendant, under the facts proved, is 
 estopped to set up this objection. The legislature authorized a 
 capital of $5,000,000, but required the assent of the stockholders 
 to any increase beyond one million. The amount issued at no 
 time had reached the $5,000,000. No mode of procuring the 
 assent of the stockholders to the increase of stock is prescribed by 
 the charter. It is conceded that in a meeting of the stockholders 
 of the original million of stock, duly convened, a majority might 
 determine upon such increase and bind the minority. On Janu- 
 ary 9, 1868, the directors resolved upon an increase of the capi- 
 tal stock to $5,000,000. On November 6, 1868, the de- 
 fendant subscribed for his stock. On the 13th of January, 1869, 
 there was a regular annual meeting of the stockholders, to which 
 a report was made, showing that $3,000,000 of stock had up to 
 that time been issued, and $3,116,000 of stock was voted at that 
 meeting for directors. The evidence shows that over $800,000, 
 or, in round numbers, four-fifths of the first million of stock- 
 holders, were present in person or by proxy, and voted at this 
 meeting for directors. No objection then or ever was made to 
 the increase of stock, and the old stockholders and the new
 
 Directors. 239 
 
 voted indiscrimiiiatelj, and tlie proceeds of all sales of stock 
 were treated and invested by tlie directors as capital until tin; 
 company ceased to do business. Two dividends were made in 
 
 1869, and one in 1870, upon all the stock, which in each of those 
 years exceeded $4,000,000. The defendant in February, 
 
 1870, received two of these dividends. On the 25th of 
 March, 1869, tlie charter was amended, authorizing inter alia, the 
 directors to increase the stock. 
 
 After this, as well as before, the directors repeatedly and al- 
 ways recognized the validity of all the stock which had been 
 issued. The defendant, it may be admitted, had no personal 
 knowledge of any increase of capital stock, or of the passage of 
 the amended charter, until after this suit was brought, although 
 the agent who acted for him in his absence in respect to his stock 
 had such knowledge. * * * From the proof in this case we 
 find that at least four-fifths of the original million of stockholders 
 did know of and assent, as early as January, 1869, to this in- 
 crease of stock, and are of the opinion that the requisite assent 
 of the stockholders can be shown by their conduct and acqui- 
 escence, and need not be established by any formal vote or reso- 
 lution." 1 
 
 Sec. 14:9. Effect of knowledge of unauthorized acts. — It is a well- 
 settled rule of the law of agency, that where the agent exceeds his 
 authority, but the principal, with knowledge of the fact, neglects 
 to promptly disavow the act, it is a ratification of what has been 
 done, and is equivalent to an original authority to the agent ; and 
 this rule is as applicable in case a corporation is the principal as in 
 other cases.^ And where the president of a railroad company es- 
 tablished and advertised tariffs or rates of fare and freight on the 
 railroad, and the corporation received and appropriated the rates 
 tlnis established without objection, this was held to be a ratification 
 of the acts of the president, and equivalent to an original au- 
 
 » Parson v. Stoever, 2 Dill. (C. C.) St. 436; Bredin v. Dubarry, 14 S. & R. 
 
 427. See, also, New Hope& D. B. Co. v. 30; Gordon v. Preston, I'Watts. 387; 
 
 Phoenix Bank, 3 N. Y. 156; Salem Bank of Penn. v. Reed, 1 W. & S. 101; 
 
 Bank v. Gloucester Bank, 17 Mass. 1. Christian University v. .Tordon, 29 Mo. 
 
 - Kelsev v. National Bank, 69 Penn. 68.
 
 240 Private Corporations, 
 
 thority.^ A recent case in California illustrates the doctrine 
 of ratification of the acts of an agent by the directors. The presi- 
 dent of a ditching company, who was its general managing 
 agent, purchased, in the name of the company, a house for the 
 purpose of using it for offices and the meetings of the company, 
 and also as a boarding-house for its laborers ; and executed a 
 mortgage for the purchase -money in its name, sealed with the 
 corporate seal. As agent of the company, he took possession of 
 it, and it was used several times for the meetings of its directors 
 and for other corporate purposes. About six weeks after its pur- 
 chase, a resolution was offered at a meeting of the directors, de- 
 claring the contract of purchase legal and valid, but it failed to 
 be adopted. Subsequently, the house was consumed by fire, and 
 a suit was brought against the company to recover the balance of 
 the purchase-money. The court say : " The authority of Nixon 
 [the president] to make the contract, as the agent of the company, 
 we think sufficiently appears, and if this point were doubtful, the 
 acts of the company amounted to a ratification. Nixon, as agent 
 of the defendants, entered into possession immediately after the 
 purchase; the trustees held their meeting in the house, nothing 
 is said as to his want of authority till some six weeks afterwards 
 wdien, at a meeting held on the premises, the resolution approv- 
 ing the contract w^as offered and rejected. The entry of this reso- 
 lution comes in a very questionable shape, and is entitled to but 
 very little weight, * * * and is, at least, a very singular mode of 
 repudiating a contract. It would have been more in accordance 
 with correct notions of propriety and justice if a resolution refus- 
 ing to accept the contract had been passed, accompanied by an 
 offer to cancel the deed, which had not been recorded, and a re- 
 turn of the property of which they were in jjossession. " ^ 
 
 ' Hilliard v. Goold, 34 N. H. 230; If the principal enjoys tbe benefit 
 
 Pennsylvania, etc., Co. v. Dandridge, 8 of the agent's acts, it would not con- 
 
 G. & J. 248. stitute a ratification unless it was done 
 
 But ratification will not be presumed with a knowledge of the character of 
 
 unless the directors or trustees had them. Yellow Jacket Min. Co. v. 
 
 full knov^ledge of the act. Dedham Stevenson, 5 Nev. 224. See, also, Ris- 
 
 Savings Institute v. Slack, 6 Cush. ley v. Ind. R. R. Co., aiite. 
 
 408. "^ Shaver v. Bear River, etc., Co., 10 
 
 And an officer or agent cannot ratify Cal. 396. 
 his own act and thereby bind the prin- 
 cipal. Hotchiu V. Kent, 8 Mich. 526.
 
 DiRECTOKS. 241 
 
 Seo. 150. Effect of ratification. — Tlie general doctrine in refer- 
 ence to the unauthorized acts of agents is, that the ratification is 
 equivalent to original authority to act in the matter which has 
 been ratified. If a corporation ratify the unauthorized acts of its 
 agent, the ratification is equivalent to a previous authority, as in 
 case of natural persons. No maxim is better settled in reason and 
 law tlian the maxim omnis ratihdbitio retrotrahitur^ et mandato 
 priori equiparahir y at all events, when it does not prejudice the 
 rights of strangers.^ And this doctrine is equally applicable to the 
 directors as to other agents of a corporation. 
 
 The ratification operates as though the authority to do the act 
 had previously existed. But the intervening rights of third par- 
 ties cannot be affected by the subsequent ratification.* 
 
 Sec. 151. Directors under the national banking law. — Under our 
 national banking laws it is provided that the associations incor- 
 porated thereunder sliall have power " to elect or appoint direct- 
 ors, and by its board of directors to appoint a president, vice- 
 president, cashier and other officers, define their duties, require 
 bonds of them, and fix the penalties thereof, dismiss such officers, 
 or any of them, at pleasure, and appoint others to fill their 
 places." ' 
 
 They also provide that such a body corporate shall have power 
 " to prescribe, by its board of directors, by-laws not inconsistent 
 
 " Fleckner v. United States Bank, 8 156 ; Everett v. United States, 6 Port. 
 
 Wheat. 363; Essex T. Corp. v. Collins, (Ala.) 166; Medomak Bank v. Curtis. 
 
 8 Mass. 299; Hadeu v. Middlesex T. 24 Me. 38; Wbitwell v. Warner, 20 
 
 Corp., 10 id. 403; Salem Bank v. Vt. 425 ; City of Detroit v. Jackson, 1 
 
 Gloucester Bank, 17 id. 28 ; White v. Doug. (Mich.) 106; Merchants' Bank 
 
 Westport Cotton Man. Co., 1 Pick. v. Central Bank, 1 Ga. 428 ; Hoyt v. 
 
 220; Bulkley V. Derby Fishing Co., 2 Bridgewater, etc., Co., 6 N. J. Eq. 
 
 Conn. 252 ; White v. Same, id. 260; 253 ; Stuart v. London R. Co., 15 Beav. 
 
 Hoyt V. Thompson, 19 N. Y. 207 ; 513 ; 10 Eng. L. & Eq. 57 ; Maclae v. 
 
 Peterson v. Mayor of New York, 17 id. Sutherland, 3 E. & B. 1 ; 25 Eug. L. & 
 
 449; Baker v. Cotter, 45 Me. 236; Eq. 92 ; Renter v. flectric Tel. Co., 6 
 
 Church V. Sterling, 16 Conn. 388; Bank E. & B. 341 ; 37 Eng. L. & Eq. 189 . 
 
 of Pennsylvania v. Reed, 1 W. & S. Emmet v. Reed, 8 N.Y. 312. See, also, 
 
 101; Hay ward v. Pilgrim Society, 21 Baker v. Cotter, 45 Me. 236 ; Walworth 
 
 Pick. 270; Dispatch Line of Packets Co. Bank v. Farmers' L. & T. Co., 16 
 
 V.Bellamy Man. Co., 12 N. H. 205; Wis. 629. 
 
 Planters' Bank v. Sharp, 4 S. & M. 75; '^ Cook v. Tullis, 18 Wall. 332; Wood 
 Burrill v. Nahant Bank, 2 Mass. 167; v. McCann, 7 Ala. 806 , Taylor v. Rob- 
 Fox V. Northern laberties, 3 W. & S. inson, 14 Cal. 396 ; McCracken v. San 
 103 ; Bank of Kentucky v. Schuylkill Francisco, 16 id. 591. 
 Bank, 1 Pars. Sal. Cas. 267; New Hope » u. S. Rev. Stat., 1874, p. 999. 
 Bridge Co. v. Phoenix Bank, 3 N. Y. 
 31
 
 242 Private Corpokations. 
 
 with law, regulating the manner in which its stock shall be trans- 
 ferred, its directors elected or appointed, its officers appointed, its 
 property transferred, its general business conducted, and the privi- 
 leges granted to it by law exercised and enjoyed." ^ 
 
 They further provide that such corporations shall have power 
 '• to exercise, by its board of directors, or duly authorized officers 
 or agents, subject to law, all such incidental powers as shall be 
 necessary to carry on the business of banking, by discounting 
 and negotiating promissory notes, drafts, bills of exchange, and 
 other evidences of debt ; by receiving deposits ; by buying and 
 selling exchange, coin and bullion ; by leaving money on personal 
 security ; and by obtaining, issuing and circulating notes." * 
 
 Sec. 152. Personal liability of directors. — We have said that the 
 directors of a corporation are the agents of it. But as a general 
 rule they are only required in the management of its affairs to 
 keep within the limits of the powers conferred upon them, and 
 to exercise good faith and honesty. They only undertake, by vir- 
 tue of the duties which they assume, to perform these duties ac- 
 cording to the best of their judgment, and with reasonable dili- 
 gence ; and a mere error in judgment on the part of a director, 
 will not ordinarily subject him to personal liability therefor. And 
 unless there has been some violation of the charter or the con- 
 stating instruments of the company, or unless there is shown to 
 be a want of good faith, or a willful abuse of discretion, there will 
 be no personal liability, nor can the acts of such officers be con- 
 trolled by any court at the instance of a stockholder. ^ 
 
 1 U. S. Rev. Stat., 1874, p. 999. technical trustees. They can only be 
 
 ^ Id. regarded as mandataries, persons who 
 
 ^ Smith V. Prattville Manuf. Co., 29 have gratuitously undertaken to per- 
 Ala. 503. form certain duties, and who are, there- 
 
 in Spering's Appeal, 71 Penn. St, 11, fore, bound to apply ordinary skill and 
 Judge Sharswood observes : diligence, but no more. Indeed, as the 
 
 " It is by no means a well-settled directors are themselves stockholders, 
 point what is the precise relation interested as well as all others that the 
 which directors sustain to the stock- affairs and business of the corporation 
 holders. They are, undoubtedly, said should be successful, when we ascer- 
 in many authorities to be trustees, but tain and determine that they have not 
 that, as I apprehend, is only in a gene- sought to make any profit not common 
 ral sense, as we term an agent or any to all the stockholders, we raise a 
 bailee intrusted with the care and strong presumption that they have 
 management of the property of an- brought to the administration their 
 other. It is certain that they are not best judgment and skill. Ought they
 
 DiKEOTORS. 
 
 243 
 
 "Where the directors of an insurance corporation had fraud- 
 ulently permitted false statements to be officially made as to the 
 condition of the company, it was held that they were personally 
 liable to a party who had suffered damage thereby.' But it has 
 been held that a director was not liable for a representation false 
 in fact, made in published circulars of the corporation on which 
 his name appeared as a director, but which representation was 
 not known to him to be false. ^ 
 
 to be lield responsible for mistakes of 
 judgment or want of skill and knowl- 
 edge ? * * * We are dealing with 
 their responsibility to stockholders, not 
 to outside parties, creditors and depos- 
 itors. Upon a close examination of all 
 the reported cases, although there are 
 many dicta not easily reconcilable, yet 
 I have found no judgment or decree 
 which held directors to account, except 
 when they have themselves been per- 
 sonally guilty of some fraud on the 
 corporation, or have known and con- 
 nived at some fraud in others, or where 
 such fraud might have been prevented 
 had they given ordinary attention to 
 their duties. I do not mean to say by 
 any means that their responsibility is 
 limited to these cases ; there may exist 
 such a case of negligence or of acts 
 clearly ultra vires as would make per- 
 fectly honest directors personally lia- 
 ble. * * * While directors are per- 
 sonally responsible to the stockholders 
 for any losses resulting from fraud, 
 embezzlement, or willful misconduct, 
 or breach of trust, for their own bene- 
 fit and not for the benefit of the stock- 
 holders, for gross inattention and neg- 
 ligence, by which such fraud has been 
 perpetrated by agents, officers or direct- 
 ors ; yet they are not liable for mis- 
 takes of judgment, even though they 
 may be so gross as to appear to be ab- 
 surd and ridiculous, provided they are 
 honest, and provided they are fairly 
 within the scope of the powers and 
 
 'Salmon v. Richardson, 30 Conn. 
 360 ; Calhoun v. Richardson, id. 229 
 Peck V. Gurney, L. R., 6 H. L. 377 
 Cornell v. Hay, L. R., 8 C. P. 328 
 Hallows V. Fernie, L. R., 3 Eq. 520 
 Henderson v. Sacon, L. R., 5 Eq. 249 
 Stewart v. Austin, L. R., 3 Eq. 299 
 Ship Crosskill, L. R., 10 Eq. 73 
 Mabey v. Adams, 3 Bosw. 346. 
 
 And where a corporation has no 
 
 discretion confided to the managing 
 body. * * * Conceding that the 
 directors did violate the charter, it was 
 a question upon which with all due 
 care they might have made an honest 
 mistake, and, moreover, it appears that 
 they acted throughout by advice of 
 their counsel. It is well settled that 
 trustees will be protected from respon- 
 sibility under such circumstances." 
 
 The same doctrine is maintained in 
 Scott V. De Peyster, 1 Edw. Ch. 513. 
 See, also, Godbold v. Mobile Bank, 11 
 Ala. 191 ; Bank of St. M. v. St. John, 
 25 id. 566 ; Smith v. Prattville Man. 
 Co., 29 id. 503; Pontchartrain R. Co. 
 V. Paulding, 11 La. 41 ; Christ Church 
 V. Barksdale, 1 Strobh. Eq. 197; 
 Williams v. Gregg, 2 id. 316 ; Gratz 
 V. Redd, 4 B. Mour. 178; Lexington 
 R. Co. V. Bridges, 7 id. 559 ; Bayless 
 V. Orne, 1 Freem. (Miss.) Ch. 174; 
 Hodges V. New England Screw Co., 
 1 R. I. 312 ; Knowlton v. Congress 
 Spring Co., 57 N. Y. 518 ; Re European 
 C. R. Co., Syke's Case, L. R., 13 Eq. 
 255 ; Green's Brice's Ultra Vires, 408 
 et seq. 
 
 A cause of action against the officers 
 of a corporation individually is as- 
 signable. Bonnell v. Wheeler, 16 Abb. 
 Pr. (N. S.)81. 
 
 Where officers may maintain actions 
 for contribution from other officers, 
 see Nickerson v. Wheeler, 118 Mass. 
 295. 
 
 authority to borrow money, but the di- 
 rectors receive money, and give a re- 
 ceipt therefor as if lent to the corpo- 
 ration, they are personally liable 
 therefor. Richardson v. Williamson, 
 L. R., 6 Q. B. 276 ; Weeks v. Propert, 
 L. R., 8 C. P. 427. 
 
 2 Wakeman v. Dalley, 61 N. Y. 27. 
 See, also, Bruff v. Mali, 36 id. 200 ; 
 Arthur v. Griswold, 55 id. 400 ;
 
 244 
 
 Private Corporations. 
 
 Sec. 153. The directors are generally only bound in the man 
 agement of the affairs of the corporation to use reasonable dili- 
 gence and prudence, that is, to such diligence and prudence as 
 men usually exercise in the management of their own affairs of a 
 similar nature, and, if they act in good faith, they are not person- 
 ally responsible to the stockholders for a loss that may be sustained 
 thereby.^ But a director may be liable, personally, in damages 
 for his fraudulent acts ; ^ and he may be sued by one damaged 
 by his assent to a dividend amounting to more than the 
 profits, even without joining with him the company as a defend- 
 ant.' And it has been held that a director is personally respon- 
 sible, not only for fraud and willful malfeasance, but also for his 
 negligence, especially gross negligence. Thus, it has been held 
 that every director would be personally liable for the fraudu- 
 lent action of a board which he might have averted by an attend- 
 
 Cazeau v. Mali, 25 Barb. 578 ; New- 
 berry V. Garland, 31 id. 121 ; Cross v. 
 Sackett, 2 Bosw. 617; Mabey v. 
 Adams, 3 id, 346 ; Morse v. Swits, 19 
 How. Pr. 275. 
 
 As to tlie liability of directors to 
 stockholders and creditors in equity, 
 see post, chap. 16. 
 
 1 Scott V. De Peyster, 1 Edw, Ch. 
 (N. Y.) 513 ; Hodges v. N. E. Screw 
 Co.,3R. 1.9. 
 
 But they cannot benefit themselves 
 to the prejudice of creditors. Richards 
 V. New Hampshire Ins. Co., 3 Wend. 
 130 ; People v. Ballon, 12 id. 277 ; 
 Talmadge v. Fishkill Iron Co., 4 Barb. 
 882 ; Butts v. Wood, 38 id. 181. 
 
 The directors of a banking or other 
 corporation are, in the management of 
 its aifairs, only trustees for its credi- 
 tors and stockholders, and are bound 
 to administer its affairs according to 
 the term of its charter and in good 
 faith. If they fail in either respect 
 they are liable to the party in interest, 
 who is injured by it, for a breach of 
 trust, and may be required to account 
 to him in a court of chancery. 
 
 Hodges V. New Eug. Screw Co., 1 
 R. I. 312; Bank of St. Mary's v. St. 
 John, 25 Ala. 566. But see Patterson 
 V. Baker, 34 How. Pr. 180 ; Winter v. 
 Baker, id. 183. 
 
 The members of the governing body 
 are the agents of the corporation ; and 
 if they exercise their functions for the 
 purpose of injuring its interests and 
 
 alienating its property, they are per- 
 sonally liable for any loss occasioned 
 thereby. Attorney-General v. Wilson, 
 1 Craig & Ph. 1 ; 10 L. J. (N. S.) 53 ; 
 4Jur. 1174. 
 
 And if a director of a manufacturing 
 company has assented to a dividend of 
 more than the profits, he may be sued 
 for such violation of duty without 
 joining with him the company as co- 
 defendant . Hill V. Frazier , 22 Penn, 
 St. 320. See, also, Kimmel v. Stoner, 
 18 id. 155. 
 
 2 Crook v. Jewett, 12 How. Pr. 19. 
 
 If a director of a corporation know- 
 ingly issues or sanctions a prospectus 
 containing false statements of material 
 facts, the natural tendency of which is 
 to deceive and to induce the public to 
 purchase the corporate stock, he is lia- 
 ble to the damages sustained by one 
 who, relying upon and induced by the 
 statements, makes such a purchase. 
 And it is sufficient to sustain the ac- 
 tion that the false statements were one, 
 although not the sole inducement to 
 the purchase. Morgan v. Skiddy, 62 
 N Y, 319. 
 
 3 Hill v. Frazier, 22 Penn^St. 320.
 
 Directors. 245 
 
 ance at a board meeting, but by reason of liis negligence or will- 
 ful inattention to his duty, lie failed to do ; or if he attends the 
 meeting, but fails to use his best judgment in opposing fraudulent 
 acts, he would be liable for all the injurious consequences of his 
 failure of duty, and which he might with reasonable care have 
 averted. "Every absent director," observes Justice Martin, "is 
 equally responsible in case of extreme neglect in his attendance 
 at the board, or in case after the act comes or must have come to 
 his knowledge, had he used due diligence, he does not labor to 
 avert its injurious consequences." ' But, although directors may 
 be liable and required to indemnify parties injured on account of 
 their fraud and abuse of trust, they cannot be held personally 
 responsible, where the injury is the result of mere misjudgment, 
 or only unwise, extravagant, improvident, slightly negligent, or a 
 simple error in the performance of their duties. The only effect- 
 ual remedy in such cases is to change the board and thereby the 
 management of the corporate affairs. 
 
 Sec. 154. The fiduciary character of directors. — It will be appar- 
 ent from what has been said that the relation not only of princi- 
 pal and agent exists between the corporation and the directors, 
 but also the relation of trustee and cestui que trust exists 
 between them and the stockholders and creditors. Accordingly 
 
 ^ ' Per Martin, J., in Percy v. Mil- out any proof of actual warranty, as 
 
 laudon, 3 La. 575. See, also. United that would be implied from the ap- 
 
 Society v. Underwood, 9 Bush, 617. pointment of the agent. Colonial Bank 
 
 2 Sears V. Hotchkiss, 25 Conn. 171; v. Cherry & McDougall, 17 W. R. 
 
 Howe V. Duel, 43 Barb. 504 ; Belmont 1031. So, directors may be liable for 
 
 V Erie R. Co., 52 id. 637; Western the fraudulent acts of co-directors. 
 
 Bank of Scotland v. Baird3, L. R., which they might have prevented. 
 
 4 Ch. 381 ; Turquand v. Marshall, Joint-Stock Discount Co. v. Brown, 17 
 
 id.JS'6; Green's Brice's Ultra Vires, W. R. 1037. 
 
 406% ft'^q.; Spering's Appeal, 71 Pa. Where the directors of a railway 
 St. 11; Qodboldv. Mobile Bank, 11 Ala. assumed to act, by accepting bills 
 191 ; Smith v. Prattville Man. Co., 29 of exchanga, thev were held person- 
 Ala. 503 ; Bank of St. M. v. St. Johns, ally liable. Owen v. Van Ulster, IOC. 
 25 Ala. (N. S.) 566; Pon'chartrain, etc., B."318; Roberts v. Button, 14 Vt. 195. 
 R. Co. V. Paulding, 11 La. 41. See, also, Turquand v. Marshall, L. R., 
 
 It has recently been held in England 6 Eq. 112. As to personal liability of 
 
 that where directors assume to act for directors for a check drawn by them 
 
 a company, they impliedly warrant in the name of the company, and 
 
 their authority so to do ; and that signed by their individual names, 
 
 where they stated that they had where they were held personally lia- 
 
 appointed an agent with certain pow- ble, see Serrell v. Derbyshire, etc., R. 
 
 ers, they were personally liable with- Co., 19 L. J. 371; S. C, 9 C. B. 811.
 
 246 Private Cokporations. 
 
 they have no right to enter into or participate in any combination 
 the object of which is to divest the company of its property and 
 obtain it for themselves, to the prejudice of the members or cred- 
 itors.^ Nor are they entitled to any share of capital stock, or 
 to any dividends of the profits, until its creditors are paid. The 
 property of the corporation, in equity, is regarded as held in trust 
 for the payment of its debts ; and a sale of its capital stock, and 
 a division of the proceeds among the directors, will not defeat 
 the rights of creditors ; but they may proceed in equity to com- 
 pel the directors to contribute jpro rata out of the moneys so 
 received and in their hands. ^ On this subject the supreme court 
 of the United States say : " Equity regards the property of a 
 corporation as held in trust for the payment of the debts of the 
 corporation, and recognizes the right of creditors to pursue it into 
 whosoever possession it may be transferred, unless it has passed 
 into the hands of a hona fide purchaser ;- and the rule is well set- 
 tled that the stockholders are not entitled to any share of the 
 capital stock nor to any dividend of the profits, until all the debts 
 of the corporation are paid." 
 
 Sec. 155. Same continued. — This doctrine would, of course, be 
 applicable in all cases of fraudulent or wrongful disposition or 
 appropriation of the corporate funds or property, by directors. 
 For as agents and trustees of the corporation as well as the stock- 
 holders and creditors, they would be bound to perform their 
 duties and administ er the trust in good faith ; and any portion of 
 the corporate property wrongfully received by them would be 
 liable to the satisfaction of the claims of creditors and stockholders ; 
 and such directors would be required, in a proper proceeding, to 
 
 I Jackson v.Ludeling, 21 Wall. 616. '^ Story's Eq. Jur., § 1253; Mumma 
 
 But if a corporation fails to legally v. Potomac Company, 8 Pet. 286; Wood 
 
 organize under the provisions of a v. Dummer, 3 Mason, 308; Voce v. 
 
 statute, and does not become a corpo- Grant, 15 Mass. 522; Spear v. Grant, 
 
 ration (Ze/iire, and cannot legally issue 16 id. 14; Curran v. Arkansas, 15 
 
 stock, the issue of such stock by the How. 307. 
 
 directors will not alone make the ^ The Chicago, etc., R. Co. v. How- 
 directors liable for a fraudulent con- ard, 7 Wall. 392. See, also. Hale v. 
 spiracy to issue worthless stock . Nor Bridge Co., 8 Kaus. 466; Jones v. 
 can an intent to deceive be inferred Terre Haute E. Co., 29 Barb. 359; 
 from these circumstances, and the fact Barton v. Port Jackson R. Co., 17 id. 
 that the nominal is largely in excess 397. 
 of the actual capital. Nelson v. Lul- 
 ing, 62 N. T. 645.
 
 DiEEOTORS. 247 
 
 account for the same. They have no right to enter into or 
 participate in any combinations the object of which is to divest 
 the corporation of its property, and obtain it for themselves, to 
 the prejudice of the members or creditors. ' 
 
 Neither have they the power to give away the corporate funds, 
 or deprive the corporation of its means to accomplish the purposes 
 for which it was chartered ; ^ or dispose of the stock at less price 
 than fixed by the charter ; ' or in a manner not provided by the 
 charter ; * or to disregard a by-law imposing limitations on their 
 powers ; or to amend such by-laws or other regulations of the 
 corporate body, so as to confer greater authority upon them. 
 And a breach of duty in these respects would subject thera to 
 personal liability.'' And a resolution of a board of directors, the 
 design and effect of which is to transfer the property of the com- 
 pany to themselves, by way of inducement to pay their just debts 
 to the company, is void.' So, for any willful breach of their trust, 
 or misapplication of the corporate funds, or for any gross neglect 
 of or inattention to their duties as trustees or directors, they are 
 liable to any person who is damaged thereby.^ 
 
 Sec. 156. They cannot manage the a£fairs of the corporation for their 
 
 personal benefit.— The fiduciary character of directors referred to 
 is such that the law will not permit them to manage the affairs of 
 the corporation for their personal and private advantage, when 
 their duty would require them to work for, and use reasonable 
 efforts for the general interests of the corporation and its stock- 
 holders and creditors. The confidence reposed in them cannot be 
 thus abused with impunity; and they cannot use their position to 
 promote their own interest in respect to any thing thus intrusted 
 to thera , to the prejudice of creditors or other members. " Nor 
 is it possible to limit the duty of a director of a coi'poration, in 
 this respect, to the time while he was acting as director under any 
 
 ' Jackson v. Ludeling, 21 Wall. 616. ■" Robinson v. Smitli, 3 Paige. 233. 
 
 See post, chap. 14. See, also, Hodges v. New England 
 
 2 Bedford R. Co. v. Bowser, 48 Penn. Screw Co., 1 R. I. 313 ; Butler v. Corn- 
 
 St. 29. well Iron Co., 3 Conn. 335; Colquitt 
 
 ^ Sturges V. Stetson, 3 Phil. (Penn.) v. Howard, 11 Ga. 556 ; Percy v. Mil- 
 
 304. laudon. 3 La. 568 ; United Society v. 
 
 ♦ Royalton v. Turnp. Co., 14 Vt. 311. Underwood, 9 Bush, 617. See, also, 
 
 5 Stevens V. Davison, 18 Gratt. 819. cases cited under the two previous 
 
 « Hilles V. Parrish, 14 N. J. Eq. 380. sections.
 
 248 Private Corporations. 
 
 special delegation of power, or in attendance at meetings of the 
 board. He cannot, while director, divest himself of the knowl- 
 edge which he has acquired, in confidence, of corporate affairs, or 
 of the value of corporate property, nor be allowed to use it to his 
 own advantage.^ 
 
 Sec. 157. Contracts by directors with corporations. — CoUJ'ts of 
 equity will regard with great jealousy the contracts made be- 
 tween directors and the corporation. And as a general rule such 
 contracts are voidable at the instance of the company or stock- 
 holders ; and this rule has been held to apj^ly to cases where the 
 majority of the directors in one corporation contract with another 
 corporation, in which they are also directors.^ It is their duty to 
 act for the best interests of the company, and if they enter into 
 a contract with the company, their duty as officers is in conflict 
 with their duty as individuals. And the same doctrine has been 
 held to apply, whether they are a party to the contract in its in- 
 ception, or whether they subsequently acquire an interest in it ; ' 
 as the rule is, that directors cannot acquire an interest, directly 
 
 1 Hoyle V. Plattsburgb, etc., R. Co., Pr. (N. S.) 438 ; Buffalo, etc., R. Co. v. 
 
 54 N. Y. 314. See, also, Koebler v. Lampson, 47 Barb. 533; Fremont v. 
 
 Black River Falls Co., 2 Black (U. S. Stone, 42 id. 169; Cumberland Coal 
 
 C. C), 715 ; Risley v. Indiana, etc., R. Co. v. Sberman, 30 id. 553 ; Couro v. 
 
 Co., 1 Hun, 202 ; Gray v. N. Y. & V. Port Henry Iron Co.. 12 Baib. 64. 
 
 S. Co., 3 id. 383; Redmond v. Dicker- Nor can a stockholder, who is also 
 
 son, 1 Stockt. 597; Hoffman Steam a creditor of the corporation, in case 
 
 Coal Co. V. Cumberland Cual Co., 16 of the insolvency of the company, 
 
 Md. 456 ; Goodin v. Whitewater Canal or in the event that it is being 
 
 Co., 18 Ohio St. 169 ; Port v. Russell, wound up under the management of 
 
 36 Ind. 60 ; Buell v. Buckingham, 16 a receiver, be entitled to set off the 
 Iowa, 284 ; San Francisco R. Co. v. Bee, amount due him, against lawful calls, 
 48 Cal. 398 ; Drury v. Cross, 7 Wall, nor to set off against such calls, antici- 
 302 ; Chicago, etc., R. Co. v. Howard, pated or probable dividends. Green's 
 id. 392 ; Jackson v. Ludeling, 21 id. Brice's Ultra Vires, 553 ; Ex parte 
 616 ; Heath v. Erie R. Co., 8 Blatchf. Henry Winsor, 3 Story, 411 ; Cutler v. 
 347; European, etc., R. Co. v. Poor. Middlesex Factory Co, 14 Pick. 483; 
 59 Me. 277; Richards v. New Hamp- McLaren v. Pennington, 1 Paige, 102 ; 
 shire Ins. Co., 43 N. H. 263; Fuller v. Osgood v. Ogden, 4 Keyes, 70, 
 Dame, 18 Pick. 472 ; Peabody v. Flint, ^ San Diego v. San Diego, etc., R. 
 6 Allen, 52; Hodges v. New England Co., 44 Cal. 106 ; Abbot v. American 
 Screw Co., 1 R. I. 312; Butts v. Woods, H. R. Co., 33 Barb. 578 ; St. James' 
 
 37 N. Y. 317 ; S. C, 38 Barb. 181 ; Church v. Church of the Redeemer, 
 Coleman v. Second Ave. R. Co., 38 N. 45 id. 356 ; Polar Star Lodge v. Polar 
 Y. 201 ; Ogden v, Murray, 39 id. 207 ; Star Lodge, 16 La. Ann. 76 ; Paine v. 
 Bliss V. Matteson, 45 id. 22; S. C, 53 Lake Erie, etc., R. Co., 31 Ind. 283. 
 Barb. 348 ; Scott v. De Peyster, 1 Edw. ^ Poor v. European, etc. , R . Co. 59 
 Ch. 513; Blatchford v. Ross, 5 Abb. Me. 270.
 
 Directors. 
 
 •24-9 
 
 or indirectly, adverse to the corporation, and that, if they, taking 
 advantage of their knowledge and position, make an advantageous 
 bargain in the purchase of a claim against the corporation, tlie 
 profits thus made will be treated as held in trust for tlie company.' 
 
 ' European, etc., R. Co. v. Poor, 59 
 
 Me. 277. 
 
 The general principle is that no man 
 can faithfully serve two masters whose 
 interests are or may be in conflict. 
 The law, therefore, will not permit 
 one who acts in a fiduciary capacity 
 to deal with himself in his individual 
 capacity. It may be regarded as a 
 prevailing principle of the law, that 
 an agent must not put himself, during 
 his agency, in a position which is ad- 
 verse to that of his principal. For even 
 if the honesty of the agent is unques- 
 tioned, and if his impartiality between 
 his own interest and his principal's 
 might be relied upon, yet the princi- 
 pal has in fact bargained for the exer- 
 cise of all the skill, ability and in- 
 dustry of the agent, and he is entitled 
 to demand the exertion of all this in 
 his own favor. 
 
 The principle has found expression 
 in a large number of cases involving a 
 great variety of circumstances, and it 
 applies equally, whether one deals 
 .with himself, acting as sole trustee, 
 or with a board of trustees, of which 
 he is a member, or with the directors 
 of a corporation, of whom he is one. 
 
 Thus, in Dobson v, Racey, 3 Sandf. 
 Ch. 63, Dobson, being the owner of 
 certain real estate, mortgaged it to Ra- 
 cey, and then executed a power of at- 
 torney to him, authorizing him to sell 
 and convey the premises in such man- 
 ner as he might deem proper, and out 
 of the proceeds of the sale, after pay- 
 ing the mortgage debt, to pay over 
 the surplus to the wife of Dobson. 
 Dobson went abroad and died. Shortly 
 after Dobson left, Racey, by virtue of 
 the power of attorney, conveyed the 
 premises to one Harrison, who, with- 
 out paying or agreeing to pay any 
 thing therefor, two days thereafter re- 
 conveyed to Racey. Racey satisfied 
 the mortgage, and paid $100 
 to the widow of Dobson. The 
 action was commenced by the heirs of 
 Dobson, claiming that the sale to Har- 
 rison was inoperative and void. The 
 
 32 
 
 court, after declaring that it is now a 
 settled rule, both in England and in thi.s 
 country, that no party can be permitted 
 to jiurchase an interest when he has 
 a duty to perform which is inconsistent 
 with his character of purchaser, says: 
 " The law declares tlu; sale unwarrant- 
 able, on grounds of public policy, 
 irrespective of any proof of injury or 
 intentional wrong." See, also, Boyd 
 V. Blaukman, 29 Cal. 19. 
 
 In Pickett v. School District No. 1, 
 etc., 25 Wis. 552, the plaintiff, who 
 was the trustee of a school district, 
 entered into a contract with the other 
 two trustees, to build for the district 
 a school-house. The stipulated price 
 not being paid, he brought his action 
 on the contract. The court said: " We 
 think there is one fatal objection to 
 the plaintiflF's right to maintain this 
 action, which renders it unnecessary 
 to consider any of the other questions 
 discussed. That is, that, inasmuch as 
 it appears that the plaintiS" was liim- 
 self the director of the district at the 
 time the contract was let, and took 
 part as such in the proceedings to let 
 it, it was against public policy to 
 allow him, while holding that fiduciary 
 relation to the district, to place him- 
 self in an antagonistic position, and 
 obtain the contract for himself from 
 the board of which he was a member." 
 
 In Cumberland Coal Company v. 
 Sherman, 30 Barb. 553, the president 
 and secretary, in pursuance of a vote 
 of the directors of the corporation, sold 
 and conveyed to the defendant, who 
 was one of the directors, a large tract 
 of land. The action was commenced 
 to have the deed declared void aiid 
 canceled. After a very elaborate and 
 searching review of the authorities, 
 the court came to the conclusion that 
 the deed could not be sustained. 
 Among other things, it said : " There 
 can be no question, I think, at the 
 present time, that a director of a cor- 
 poration is the agent or trustee of the 
 stockholders, and as such has duties 
 to discharge of a fiduciary nature to-
 
 250 
 
 Private Corporations. 
 
 In a recent case in Pennsylvania, where a bill was filed by a 
 minority of stockholders to set aside a sale of property of an in- 
 solvent corporation, made to certain creditors, some of whom were 
 also directors, it was observed by Strong, J., as follows : " I come 
 then to consider the facts that the purchasers were the same per- 
 sons as those who as directors sold, and as stockholders authorized 
 the sale. It is often said, and truly, that the same persons cannot 
 be both buyers and sellers in the same transaction. They were 
 not strictly in this. All the purchasers were not directors who 
 made the sale. But I make no account of that. Still, why may 
 not directors of a corporation sell to themselves ? Each director 
 has an interest distinct and antagonistic to his interest as a mere 
 man. There is an identity of person but not of interest. There 
 must be many things which directors can do for their individual 
 benefit, which are binding upon a corporation of which they are 
 directors. If they have advanced money, I cannot doubt they 
 may pay themselves with the corporate fuiids. If they have 
 
 ward hia principal, and is subject to 
 the obligations and disabilities inci- 
 dental to that relation. 
 
 " Neither are the duties or obliga- 
 tions of a director or trustee altered 
 from the circumstance that he is one 
 of a number of directors or trustees, 
 and that this circumstance diminishes 
 his responsibility, or relieves him 
 from any incapacity to deal with the 
 property of his cestui que trust. The 
 same principles apply to him as one of 
 a number as if he was acting as a sole 
 trustee. It is not doubted that it has 
 been shown that the relation of the 
 director to the stockholders is the 
 same as that of the agent to his prin- 
 cipal, the trustee to \i\s cestui que trust, 
 and out of the identity of these rela- 
 tions necessarily spring the same du- 
 ties, the same danger, and the same 
 policy of the law." 
 
 In Aberdeen Railway Company v. 
 Blaikie, 1 McQueen, 461, the house of 
 lords held that a contract entered into 
 by a manufacturer for the supply of 
 iron furaisliings to a railway company, 
 of which he was a director, or the 
 chairman, at the date of the contract, 
 could not be enforced against the com- 
 pany. Lord Ckanworth, delivering 
 the opinion of the court, says: " A 
 corporate body can only act by agents, 
 
 and it is, of course, the duty of those 
 agents so to act as best to promote the 
 interests of the corporation whose 
 affairs they are conducting. Such an 
 agent has duties to discharge of a 
 fiduciary character toward his princi- 
 pal, and it is a rule of universal appli- 
 cation, that no one having such duties 
 to discharge shall be allowed to enter 
 into engagements in which he has 
 or can have a personal interest con- 
 flicting, or which may possibly conflict, 
 with the interests of those whom he 
 is bound to protect. So strictly is this 
 principle adhered to, that no question 
 is allowed to be raised as to 
 the fairness or unfairness of a con- 
 tract so entered into. It obviously 
 is, or may be, impossible to demon- 
 strate how far, in any particular case, 
 the terms of such a contract have been 
 the best for the cestui que trust which 
 it was possible to attain. It may some- 
 times happen that the terms on which 
 a trustee has dealt or attempted to 
 deal with the estate or interests of 
 those for whom he is a trustee have 
 been as good as could have been ob- 
 tained from any other person ; they 
 may even at the time have been bet- 
 ter. But still, so inflexible is the rule 
 that no inquiry on that subject is per- 
 mitted.
 
 Directors. 251 
 
 become liable as sureties for the corporation, they may provide 
 for their indemnity. And though ordinarily the law frowns upon 
 contracts made by them in their representative character witli 
 themselves as private persons, such contracts are not necessarily 
 void. They are carefully watched, and their fairness must be 
 shown. But I repeat the question, why may not directors sell 
 to themselves in any case ? It is because of the danger that the 
 interests of stockholders may suffer, if such sales be permitted, 
 for want of antagonism between the parties to the contract. But 
 such sales are supported in equity where the fiduciary relation of 
 the purchasers has ceased before the purchase, where the purchase 
 was made with the full consent of the stockholders, or where 
 stockholders have, by their acquiescence, debarred themselves from 
 questioning the transactions. I do not, however, deem it neces- 
 sary to decide that the rule in this case was absolutely indefeasi 
 ble. The utmost the complainants claim is that it was voidable. 
 Certainly nothing more can be claimed. Let it be, then, that it 
 might have been set aside at the instance of the corporation, or 
 even of a stockholder, as against the policy of the law and con- 
 structively fraudulent. Still, it was valid in equity as well as in 
 law, unless one or the other cjiose to avoid it ; and in all cases 
 in which an attempt is made to fasten a constructive trust upon 
 a purchaser, the attempt must fail unless made in a reasonable 
 time." ' The leading doctrine thus clearly set forth has been 
 also held by recent cases in other states, where contracts are made 
 with directors or officers of a railroad company for the purpose of 
 
 ' Ashurst's Appeal, 60 Penn. St. there was? a contract, not with a direc- 
 
 291. See, also, Chester v. Dickerson, tor or officer of the corporation, but 
 
 54 N. Y. 1 ; Getty v. Devlin, id. 403 ; with a member merely, for a payment 
 
 Barton v. Plankroad Co., 17 Barb, of a pecuniary consideration to such 
 
 397. corporation on the location of a depot 
 
 Where a contract in which two of in a specified place ; that such a con- 
 the directors were interested was made tract was aa^ainst public policy was 
 with the company, it was held "that held on tlie ground that the interests 
 nothing short of a ratification by tl'e of the corporation and the public were 
 board after a full explanation and identical ; that each member was re- 
 knowledge of their interest and all the quired to use his best and unbiased 
 circumstances, could render such a judgment upon the question of the fit- 
 contract binding upon the company." ness of the location without the influ- 
 Per Christiancy, J., in Flint, etc., ence which such arrangement might 
 R. Co. v. Dewey, 14 Mich. 477. have ; and that the question involved 
 
 This doctrine was carried to great was one of good faith, to be left to the 
 
 extremes in the case of Fuller v. jury. Starli Bank v. United States 
 
 Damp, 18 Pick. 472, in which case Pottery Co., 34 Vt. 144.
 
 252 
 
 Private Coeporations. 
 
 securing their influence or interest in attaining the location of 
 depots or machine shops, or the construction of the road so as to 
 promote private interests ; and especially would this be the case 
 where the interest of the director under the contract thus made 
 would depend upon the location as desired. The corporation, as 
 well as the stockholders and creditors, would be not only entitled 
 to the unbiased judgment of the director, which could not be 
 expected under the above state of facts, but also to the benefit of 
 his influence and argument in deciding such questions as a mem- 
 ber of the board, which, of course, would be unreasonable to ex- 
 pect under the facts supposed.' And such a course would tend 
 to sacrifice both the public rights and the interests of stock- 
 holders.' 
 
 ' Pacific R. Co. V. Seely, 45 Mo. 212 ; 
 Linder v. Carpenter, 62 111. 399 ; Ogden 
 V. Murray, 39 N. Y. 202 ; Re Union 
 Pacific R. Co., 1 Cent. L. .J. 582. 
 
 ^ In the case of European, etc., R. 
 Co. V . Poor, 59 Me. 277, Appleton, 
 C. J., said : "A trustee is one in 
 whom property is vested in trust for 
 others. Every person is to be deemed 
 a trustee to whom business and inter- 
 ests of others are confided, and to 
 whom the management of their affairs 
 is intrusted. The general rule is that 
 a trustee, so far as the trust extends, 
 can never become a purchaser of the 
 property embraced within the trust, 
 save with the consent of all parties in- 
 terested. The underlying principle is 
 that no man can serve two masters. 
 He who is acting for others cannot be 
 permitted to act adversely to his prin- 
 cipals. The agent to sell cannot be- 
 come a purchaser of that which he is 
 the agent to sell, for his position as 
 selling agent is adverse to and incon- 
 sistent with that of a purchaser. So, 
 the agent to purchase cannot, at the 
 same time, occupy the position of a 
 seller. It is not that in particular in- 
 stances the sale or the purchase may 
 not be reasonable. But to avoid temp- 
 tation the agent to sell is disqualified 
 from purchasing, and the agent to 
 purchase from selling. In all such con- 
 tracts the sales or the purchases may 
 be set aside by him for whom such 
 agent is acting. The cestui que trust 
 may confirm all such sales or pur- 
 chases if he deems it for his interest. 
 
 The affirmance or disaffirmance rests 
 with him, and the trustee, when buy- 
 ing trust property from or selling it to 
 himself, must assume the risk of hav- 
 ing his contracts set aside, if the cestui 
 gwe^rif.sf is dissatisfied with his action." 
 
 The directors are not sureties for the 
 fidelity of the oSicers of the corpora- 
 tion which they may be authorized to 
 appoint. If they exercise reasonable 
 diligence in the appointments of agents 
 and officers, this is all that is required. 
 But if they should knowingly appoint 
 a person of bad character to a place of 
 trust, they would be personally re- 
 sponsible. See Scott v. Depeyster, 1 
 Edw. Ch. 513. See, also, Burbridge 
 V. Morris, 34 L. J. (N. S.) 131. 
 
 The rule of equity is liberal, em- 
 bracing within its purview all fidu- 
 ciary relations, as those of principal 
 and agent, attorney and client, solici- 
 tors, executors, guardians, etc. 
 
 The president and directors of a cor- 
 poration must be held as occupying a 
 fiduciary relation to the stockholders, 
 for and on behalf of wliom they act. 
 " The relation between the directors 
 of a corporation and its stockholders," 
 observes Johnson, J., in Butts v. 
 Wood, 38 Barb. 188, " is that of trus- 
 tee and cestui que trust." " The direct- 
 ors," remarks RoMiLLY, M. R., in the 
 York & Midland Railway Co. v. Hud- 
 son, 19 Eng. L. & Eq. 365, " are per- 
 sons selected to manage the business 
 of the company for the benefit of the 
 shareholders. It is an office of trust, 
 which, if they undertake it, is their
 
 Directors. 
 
 253 
 
 Sec. 158. instances where they are not liable, etc. — But the mere 
 fact of being a director will not render a party personally liable 
 for the frands and misrepresentations of the active managers. 
 
 duty to perform fully and entirely." 
 Persons who become directors and 
 managers of a corporation place them- 
 selves in the situation of trustees ; and 
 the relation of trustees and cestui que 
 trust is thereby created between them 
 and the stockholders. Scott v. De- 
 peyster, 1 Edw. Ch. 518 ; Verplanck v. 
 Mercantile Ins. Co., id. 85. All acts 
 done by the directors officially should 
 be for the interests of the cestui que 
 trust. Holding a fiduciary relation, 
 they cannot be permitted to acquire 
 interests adverse to such relation. 
 
 In European, etc., R. Co. v. Poor, 
 supra, the court say : " The bill al- 
 leges that ' at a meeting of the di- 
 rectors of said company (the E. & N. 
 A. Railway Co.), holden on the 25th 
 day of August, 1865, a contract previ- 
 ously made between said company 
 and a certain firm, under the name of 
 Pierce & Blaisdell, and signed by said 
 defendant, as president of said com- 
 pany, and by Pierce & Blaisdell, for 
 the construction of said railroad, was 
 approved, adopted and confirmed. 
 That said Pierce & Blaisdell did pro- 
 ceed, under said contract, in the con- 
 struction of said railroad, and received 
 large sums of money under the same 
 contract,' and ' that there was an 
 agreement between said defendant 
 while he was president and director, 
 as aforesaid, and said firm of Pierce & 
 Blaisdell, or one of the members of 
 said firm, that said defendant should 
 receive a large sum of money for or on 
 account of said contract, or a part of 
 the profits which might be received by 
 said Pierce & Blaisdell, under and by 
 their performance of said contract 
 for the construction of said railroad.' 
 
 " To this portion of the bill the de- 
 fendant has demurred, thereby ad- 
 mitting, for the purposes of the present 
 argument, his interest in the contract 
 of Pierce & Blaisdell, with the corpo- 
 ration of which he was president and 
 a director, made when he was acting 
 as such, and in the profits of which 
 he was a participant while holding 
 those positions. As the agent to sell 
 cannot purchase what he is to sell, 
 nor the agent to purchase buy of 
 
 himself, so the agent to contract can- 
 not, as agent, contract with himself 
 as principal. The interest of the i)ar- 
 ties to a contract, whether of purchase, 
 a sale, or for work or labor, are ad- 
 verse and inconsistent with eacli other. 
 It is the duty of the directors of a cor- 
 poration to act for the best interests 
 of such corporation. If a director be 
 a party to a contract entered into with 
 himself, his duty as an officer is in 
 conflict with his interests as an indi- 
 vidual. This is equally so, whether 
 be enters into the contract on its in- 
 ception, or subsequently acquires an 
 interest in it. If he enters originally 
 into the contract as director with him- 
 self as a party, it is not difficult to 
 perceive who would have an advantage 
 in the bargain. If he subsequently 
 becomes a partner, he places himself 
 in a position in which, when any 
 questions arise as to its performance, 
 his interest as a party to the contract 
 conflicts with his duty as an officer. 
 The general rule is, that directors 
 cannot legitimately acquire an interest 
 adverse to the corpoi'alion, and that 
 if they purchase any claim against 
 the company it is in trust for the com- 
 pany." 
 
 In the Great Luxembourg Railway 
 Co. v. Magnay, 35 Beav. 586, the 
 master of the rolls says: "I have, 
 upon various occasions, stated what 
 I considered to be the duties and func- 
 tions of a director of a joint-stock 
 company. He is, in point of fact, not 
 merely a director, but he also fills tlie 
 character of a trustee for the share- 
 holders, and he is, in regard to all 
 matters entered into in their behalf, to 
 be treated as an agent ; therefore there 
 attaches to a director, for the benefit 
 of the shareholders, all the liabilities 
 and duties which attach to a trustee 
 or agent . Accordingly, if a director 
 enters into a contract for the company, 
 he cannot personally derive any bene- 
 fit from it. I accordingly held, in the 
 case of the Midland Railway Co. v. 
 Hudson, that the defendant, as di- 
 rector and trustee, was bound to give 
 to the company the benefit of a large 
 contract entered into by him for iron,
 
 254 
 
 Fkivate Corporations. 
 
 Without knowledge of, and participation in the fraudulent act, 
 as by lending his name and influence to promote the fraud, or 
 some willful or negligent violation of duty, he cannot be held 
 
 which had been used on the railroad , 
 and to render to them the pecuniary 
 advantage which he had derived from 
 it. If, as in the case of the North 
 Midland Railway Co. v. Hudson, a 
 director of a railway company enter 
 into a contract for the purchase of a 
 large quantity of iron in the shape of 
 rails, but before it is wanted and be- 
 fore it has been actually delivered (for 
 it took some time in that case to per- 
 form the contract with the iron master) 
 the price of iron should happen to 
 rise, the trustee is not at liberty to 
 put into his pocket the diiference be- 
 tween the market price of the iron 
 when delivered and that at which it 
 was purchased. He cannot sell it 
 again to the company as if it were 
 his own property. The whole benefit 
 must go to the shareholders and not 
 to the director." 
 
 In Benson v. Heathorn, 1 T. & Coll. 
 826, the defendant, being director of 
 a joint-stock company, established for 
 the building, purchasing, hiring, and 
 employment of steam vessels, pur- 
 chased a vessel for £1340, and after- 
 ward sold it to the company as from 
 a stranger, for £1500, charging the 
 company with commission at £1 per 
 cent, the broker's earnest money and 
 the expenses of a bill of sale to him- 
 self, there being but one bill of sale. 
 It was held that such a transaction 
 could not stand in equity. 
 
 In Flint & P. M. R. Co. v. Dewey, 
 14 Mich. 477, it appeared that the de- 
 fendant, the secretary, and another 
 director had been appointed a com- 
 mittee by the company for building 
 and equipping the road. The com- 
 mittee entered into a preliminary con- 
 tract with a certain party and on the 
 same day that party assigned to the 
 defendant's secretary three-eighths of 
 said agreement and four-tenths of a 
 contract to be thereafter entered into , 
 also, providing that they should be 
 at three-eighths the expense of nego- 
 tiating the bonds of the company 
 which were to be received by the con- 
 tractor. 
 
 In a suit by the complainant to com- 
 pel the delivery of said bonds, it was 
 held that the transaction under which 
 the defendant claimed was clearly 
 fraudulent and void as against the 
 complainant, that it was his duty 
 (with the other members of the com- 
 mittee) on letting the contract, to use 
 his best efforts and judgments to se- 
 cure the best terms he could for the 
 company; but in joining with the con- 
 tractor in taking this very contract 
 which they were employed to let, it 
 became his interest to let the contract 
 at the highest price. "It is possi- 
 ble," observes Christiancy, J. , " that 
 there may have been no actual fraud, 
 and that the contract would not have 
 been let on better terms ; but the prin- 
 ciple of law applicable to such a con- 
 tract renders it immaterial, under the 
 circumstances of the case, whether 
 there has been any fraud in fact, or 
 any inj ury to the company . Fidelity 
 in the agent is what is aimed at, and 
 as a means of securing it the law will 
 not permit the agent to place himself 
 in a situation in which he may be 
 tempted by his own private interest to 
 disregard that of his principal ; and 
 if such contracts were to stand until 
 shown to be fraudulent and corrupt, 
 the result, as a general rule, would be 
 that they must be enforced in spite of 
 fraud and corruption." 
 
 " The general rule of law," observes 
 Wayne, J., in Michoud v. Girod, 4 
 How. (IJ. S.) 555, "stands upon our 
 great moral obligation to refrain from 
 placing ourselves in relations which 
 ordinarily excite a conflict between 
 self-interest and integrity. It restrains 
 all agents, public and private." 
 
 To give eifect to these views in Eng- 
 land it is provided by the Companies' 
 Clause Consolidation Act, 8 and 9 
 Vict., chap. 16, that no person interested 
 in a contract with the company shall 
 be a director ; and if any director, 
 subsequent to his election, shall be- 
 come concerned in any contract, the 
 oiBce of director shall become vacant 
 and he shall cease to act as such.
 
 DlREOTORS. 255 
 
 personally responsible.^ But the relation they occupy to the com- 
 pany and its creditors will not prevent directors or other officers 
 and agents from protecting themselves as creditors of the com- 
 pany by the same means that are open to others. Thus, where 
 the president and two directors of a company constituted a 
 quorum, and they, being the only stockholders at the time, sold 
 corporate property to the president in consideration of past in- 
 debtedness, and an agreement by him to pay other specified debts 
 of the corporation, and a judgment debtor levied upon the prop- 
 erty thus sold, it was held that he might be enjoined from pro- 
 ceeding under his levy. Dillon, J., in an Iowa case, observes : 
 " Being an officer of the corporation did not deprive Buel [the 
 plaintiff] of the right to enter into competition with other credit- 
 ors, and run the race of vigilance with them, availing himself, in 
 the contest, of his superior knowledge, and of the advantage of 
 his position, to obtain security for or payment of his debt. The 
 act of Buel was not legally or constructively fraudulent, in con- 
 sequence of his being an officer or member of the company." * 
 
 Sec. 159. where they act without authority. — The general rule 
 of personal liability of agents, where they act without the author- 
 ity which they assume to have, has also been applied to persons 
 assuming authority in making contracts for a corporation which 
 liad no legal existence.^ The general principle is thus stated by 
 Mr. Story : " Wherever a party undertakes to do an act as the 
 agent of another, if he does not possess any authority from the 
 principal therefor, or if he exceeds the authority delegated to him, 
 he will be personally responsible therefor to the person with whom 
 he is dealing for or on account of his principal."* And whether 
 
 ' But it is lield in Blancliard v. Hay ward v. Pilgrim Soc, 21 Pick. 270; 
 
 Kaull, 44 Cal.^440, that the signing of Smith v. Lansing, 22 N. Y. 526; Strat- 
 
 a note by parties as trustees did not ton v. Allen, 16 N. J. Eq. 229 ; City 
 
 render them personally liable even of St. Louis v. Alexander, 23 Mo. 483; 
 
 where there was no corporation. As Murray v. Vanderbilt, 39 Barb. 140, 
 
 to fraudulent overissue of stock, see Van Hook v. Sonierville Mauuf. Co., 5 
 
 BruflF V. Mali, 36 N. Y. 200 ; Cazeaux N. J. Eq. 137, 633. 
 V. Mali, 25 Barb. 578; Shotwell v. * Herod v. Rodman, 16 Ind. 241. See, 
 
 Mali, 38 id. 445. also, Gratz v. Redd, 4 B. Monr. 178. 
 
 2 Buell V. Buckingham, 16 Iowa, 284. * Story on Agency, § 264 ; Paley on 
 
 See, also, Merrick v. Peru Coal Co., 61 Agency, by Lloyd, 386 ; 2 Kent's Com. 
 
 Ill . 472 ; Sargent v. Webster, 13 Mete. 629. 
 497 ; Whit well v. Warner, 20 Vt. 425;
 
 256 Private Corporations. 
 
 the assumed agency is honafide or Tnalafide^ the personal Habihty 
 would exist for damages sustained thereby, on the plain principle 
 not only of equity but of justice, that where one of two innocent 
 parties must suffer a loss, it ought to be borne by the one who in- 
 duced the other, by false assumptions and representations, to enter 
 into relations by which the loss is sustained.' The effect of acting 
 without authority in making contracts, etc., has already been con- 
 sidered. 
 
 Sec. 160. Liability of partners — It may also occur that parties, 
 assuming to act as directors of a corporation when they are not, 
 or where there is no corporation, may render themselves liable as 
 partners to those with whom they contract. But in such a case 
 it must appear, in order to hold any one of them as such, that he 
 was so acting at the time the contract was made.* 
 
 Sec. 161. Directors de facto.— It is a general principle of the 
 law, that persons acting as directors of a corporation, and generally 
 recognized as such, are at least directors de facto ; and their acts 
 are valid until they are ousted in some direct proceedings there- 
 for.' And a board of directors de facto, in possession of the fran- 
 chises of a corporation, may maintain an action against persons 
 claiming to constitute a board of directors, for any trespass relating 
 to the corporate property ; and the acts of such de facto officers 
 cannot be collaterally impeached.* 
 
 ' See ante, chap 9, g 199 et seq. See, « Fuller v. Rowe, 57 N. T. 23 ; S. C. 
 
 also, chap. 14. 59 Barb. 344; Wells v. Gates, 18 id. 
 
 The most effectual remedy in such 554. But see Blanchard v. Kaull, 44 
 
 cases is by injunction to restrain the Cal. 440. 
 
 wrongful act. Thus, where they have ' Vernon v. Hills, 6 Cow. 26 ; All 
 
 authority to issue convertible bonds Saints' Church v. Lovett, 1 Hall, 191. 
 
 for the legitimate purpose of com- * Atlantic, etc., R. Co. v. Johnston, 
 
 pleting and operating a railroad, they 70 N. C. 348. The regularity of an 
 
 will be restrained from issuing them organization that has for years acted 
 
 as a part of a fraudulent device to as a corporation cannot De questioned 
 
 increase the stock ; or when so issued, collaterally but only by quo icarranto 
 
 a person affected with notice thereof, or scire facias. Thompson v. Candor, 
 
 and that they do not represent & bona 60 111. 244. See, also, She waiter v. 
 
 fide indebtedness, may likewise be re- Pirner, 55 Mo. 218 ; Walker v. Flem- 
 
 strained by injunction. See, also, ing, 70 N. C. 483 ; Mahony v. East 
 
 where various other acts of directors Holyford, L. R., 7 H. L. 869 ; In re 
 
 will be restrained by injunction ; County Life Assurance Co., L. R., 5 
 
 Belmont v. Erie R. Co., 52 Barb. 637. Ch. App. 288.
 
 DiUECTORS. 
 
 257 
 
 Sec. 162. Compensation of.— Directors arc entitled to such com- 
 pensation as may be provided by the constitution or by-laws of 
 the association. But it has been held that e.xtra ami (jratuitous 
 service rendered by such officer does not raise any ini[)lied pronii.se 
 that they are rendered at the request of tlie party benefited by 
 them, or entitles him an action to maintain therefor.' It seems 
 to be the rule, that in the absence of any provision of the charter 
 or by-laws for the compensation of directors as sucli, the law 
 raises no implied promise to pay them therefor,* They stand in 
 the same position in this respect as trustees at connnon law, and 
 must, unless the charter or by-laws provide for their proper com- 
 pensation, see to it, that by contracts, their compensation is pro- 
 vided for, or they can recover none.^ \jwt,for the pei'formance 
 of duties not pertaining to the office of director, he is entitled to 
 recover compensation the same as any other agent." Thus, where 
 
 1 Loan Association v. Stonemetz, 29 
 Peun. St. 584. See, also, Barstow v. 
 City l\. Co., 42 Cal. 405. They are not 
 entitled to compen.sation, unless some 
 provision is made therefor in the con- 
 stitution or by-laws, or for extra ser- 
 vices, unless unquestionably beyond 
 the range of hi.s official duties. New 
 York, etc., R. Co. v. Ketchum, 27 
 Conu. 170. See, also, where there was 
 a delay in claiming for extra services, 
 Iltica Ins. Co. v. Bloodgood, 4 Wend 
 652. 
 
 '^ Qridley v. Lafayette, etc., R. R. Co., 
 71111.200; American, etc., R. R. Co. v. 
 Miles, 52 id. 174 ; Holder v. Lafayette 
 R. R. Co., 71 id. 105; Manx Ferry 
 Gravel Co. v, Branigan, 40 Ind. o61. 
 
 * American, etc., R. R. Co. v. Miles, 
 52 111. 174. 
 
 * Gridle v, Lafayette, etc , R. R. Co., 
 71111.206. In this case it appeared, 
 that about the month of September, 
 1867, appellant was elected president 
 of the board of directors of the defend- 
 ant company, and served in that capac- 
 ity until the last of January, 1873. 
 Neither prior to his election, nor at 
 any time afterward, did the board of 
 directors prescribe, by resolution or by- 
 law, what sum, if any, the president 
 should receive for services he should 
 render ; but it seems to have been 
 understood, at the time of his election, 
 that he should receive a fair compensa- 
 tion. An executive committee was ap- 
 
 33 
 
 pointed, with power to manage and 
 direct the business affairs of the com- 
 pany as they should deem best, in all 
 cases where no specific directions 
 should be given-by the board of di- 
 rectors, and to take a general super- 
 vision of the finances of the company ; 
 and it was imposed as a duty of the 
 committee to examine, and, if proper, 
 to audit all bills and accounts, or 
 vouchers paid or to be paid by the 
 treasurer, and, so far as practicable, 
 such examination was required to be 
 made before payment. Appellant was 
 appointed a member of that committee. 
 He was, at the organization of the com- 
 pany, elected a director, and was annu- 
 ally re-elected to that position, as well 
 as president, and continued a member 
 of the executive committee. During 
 the time appellant was president and a 
 member of the executive committee, he 
 made several trips to Ohio, and went to 
 New York, for the purpose of con- 
 tracting for the construction of the 
 road, and aided in leasing it at Toledo, 
 under which lease it was constructed. 
 He also made several trips in other 
 places and aided in procuring local 
 subscriptions, by carrying elections for 
 the purpose. He made out his ac- 
 count at .$5,000, which was audited by 
 the executive committee, of which he 
 was a member, but in which he seems 
 to have taken no part, and an order was 
 passed on the treasurer for that sum.
 
 258 
 
 Private Corporations. 
 
 a director of a railroad company was ay>poiiited, by resolution, an 
 agent to obtain subscriptions of stock, to procure a right of way, 
 and duties outside of his office as director, it was held that he 
 might recover a i-easonable compensation therefor, but for services 
 rendered by him as a member of an executive connnittee, or in efforts 
 
 and a warrant of attorney was given, 
 and a judgment was afterward con- 
 fessed, but, on a motion made by the 
 company, it was set aside, and the cor- 
 poration was let in to plead. It also 
 appears, that at the time the road was 
 leased, the sum of $25,000 was re- 
 served and set apart for the payment 
 of the salaries of the president, treas- 
 urer, secretary, and other officers of 
 the company. 
 
 A trial was had by the court, by con- 
 sent, without the intervention of a 
 jury. The issues were found for plaint- 
 iff and his damages assessed at $3,000, 
 and a j udgmeut rendered for that sum. 
 Both parties appeal the case to this 
 court and assign errors on the record, 
 and the two cases were consolidated 
 and considered as one, with assignment 
 of cross errors. 
 
 Walker, J., said : " In the case of 
 Holder v. The Lafayette, Bloomington 
 & Mississippi Railway Co., 71 111. 106, 
 it was held, upon a careful examina- 
 tion of the authorities, that the direct- 
 ors of such a company, having the con- 
 trol of its finances and property, were 
 not entitled to compensation for ser- 
 vices pertaining to the oifije, unless 
 the salary was fixed by the by-laws or 
 a resolution of the board before the 
 services were performed ; that in such 
 cases the directors were managers or 
 governors of the aifairs of the company 
 and occupied the position of trustees 
 of the fund, and as such were not, 
 under the common law, entitled to 
 make any profit or derive any advan- 
 tage from the position. And the presi- 
 dent, being a director and one of the 
 managers of the company, and when 
 acting as president only aiding the 
 board, of which he is the head, in 
 executing the trust, must, for the same 
 reason, fall within and be governed by 
 the same rule. * 
 
 " In the case of Kilpatrick v. The 
 Penrose Ferry Co., 49 Penn. St. 121, 
 which is must like this, it was held, 
 that the president and treasurer could 
 
 not recover on the quanhim meruit. 
 In the opinion, the court said : ' Com- 
 pensation of corporate otHcers is usual- 
 ly fixed by a by-law or resolution, 
 either of the directors or stockholders ; 
 but where no salary is fixed none can 
 be recovered. These offices are usual- 
 ly filled by the chief promoters of the 
 corporation, whose interest in the stock 
 or other incidental advantages is sup- 
 posed to be a motive for executing the 
 duties of the office without compensa- 
 tion, and this presumption prevails 
 until overcome by express pre-arrauge- 
 ment of salary.' And The Common- 
 wealth V. Crane, 6 Mete. (Mass.) 64, was 
 referred to, and it was held the rule 
 was just as applicable to the president 
 and treasurer, or other officers, as to 
 directors. And it was further said : 
 " That they may not consume what 
 they were appointed to preserve ; their 
 compensation must be expressly ap- 
 pointed before it can be recovered at 
 law." Th's, and the authorities re- 
 ferred to in Holder v. The Lafayette, 
 Bloomington & Mississippi Railway 
 Co. ,st/prn, establish beyond doubt that 
 the president, for the performance of 
 his duties as Ruch,has no claim for com- 
 pensation, as it was not fixed before he 
 discharged the duties. Nor does the 
 fact that the finance committee audited 
 the account and drew an order for its 
 payment, as was held in Duston v. 
 The Imp'l Gas Co., 3 B. & Aid. 125. 
 bind the company, as it was illegal to 
 allow the claim. 
 
 "It has been held, and the rule is rea- 
 sonable, that where such an officer per- 
 forms extraordinary duties not per- 
 taining to his office, he may recover a 
 reasonable compensation. Hall v. Vt. 
 & Mass. R. R. Co., 28 Vt. 401. But 
 the evidence shows no such service 
 performed. Or, had the president or 
 officers expended moneys of their own 
 while discharging the duties pertain- 
 ing to their office, there can be no 
 question but that they could recover 
 therefor."
 
 Directors. 259 
 
 to contract for tlie construction of the road, including time and 
 travel, lie cannot recover." But it seems that a direct<jr who 
 serves as treasu7'er, without a previous vote that he sliall have 
 compensation therefor, is not entitled to recover for such service, 
 even though there was an understanding with the other directors 
 that he should ultimately have compensation therefor, because the 
 directors have no power to fix the compensation of an officer, and 
 also, because the duties of treasurer, when so held by a director 
 without any vote fixing compensation, will be treated as incident 
 to his duties as director.^ But in Minnesota' it is held, that when 
 a director renders services as secretary under a resolution of 
 appointment which does not specify his compensation, he is, never- 
 theless, entitled to recover a reasonable compensation therefor, and 
 this certainly seems the most sensible and just rule. 
 
 It was held in Indiana, that where no provision is made in the 
 organic law or the by-laws of the corporation, nor any special con- 
 tract made relating to compensation for services, none could be 
 recovered ; and that, in the absence of any such provisions, where 
 the board of directors made an allowance to themselves for ser- 
 vices, and issued orders of the company therefor, these were 
 invalid." And where a board of directors, in addition to their 
 fixed salary, voted a certain compensation for all special services 
 performed by any director, it was held that a director could not 
 recover beyond the regular salary, provided the services could 
 have been performed by the party as such director.* 
 
 Sec. 1G3. Cannot increase their own compensation. — As one of the 
 relations between the director and the corporation, as we have 
 seen, is that of a trustee and cestui que trust, if a director claims 
 an increase of compensation beyond that provided by law, he is 
 disqualified from acting on the question, and if he is necessary to 
 
 ' Cheney v. Lafayette, etc., R. R. * Hodges v. Rutland, etc., R. Co., 29 
 
 Co., 68 111. 57. Vt. 220. See, also, New York, etc., K. 
 
 ■^ Holder v. Lafayette, etc., R. R. Co., Co. v. Ketchum, 27 Conn. 170; Henry 
 
 ante. v. Rutland, etc., R. Co., 27 Vt. 435; 
 
 s Rogers v. Hastings, etc., R. R. Shakelford v. N. 0. R. Co., 37 Miss. 
 
 Co., 22 Minn. 25. 202 ; Hall v. Vermont, etc., R. Co., 28 
 
 •* Maus Ferry Gravel Road Co. v. Vt. 401 ; Loan Association v. Stone. 
 
 Branegan, 40 Ind. 361. See, al.'^o, Hall metz, 29 Penn. St. 534. 
 V. Vermont, etc., R. Co., 28 Vt. 401 ; 
 Pierson v. Thompson, 1 Edw. Ch. 212.
 
 260 Private Corporations. 
 
 constitute II quorum, in the vote on such claim, the acts of the 
 board so constituted, increasing the compensation, would be in- 
 valid, and would not bind the corporation/ 
 
 In the absence of provisions in the charter or by-laws of the 
 body, or any regulation thereof, by custom, on the subject, 
 directors in England, it appears, are not entitled to recover any 
 compensation for services. 
 
 It has been held in Pennsylvania, that a director who 
 was elected to serve without compensation cannot recover for 
 such services, even though a resolution passed by the corpora- 
 tion, after they are rendered, provides that they shall be 
 paid.° The reason for this rule is two-fold, ^rs;^, because by accept- 
 ing the olBce without any promise of compensation, and occupying 
 to the stockholder and the creditors of the company the position 
 of trustee, he cannot be permitted to im_pair the trust property as 
 to either, without the consent of both, by taking compensation for 
 his own benefit and second^ because to permit him to use his position 
 as director to influence the stockholders to vote him compensa- 
 tion for services gratuitously rendered, might result in disastrous 
 consequences, not only to the corporation, but also to its creditors. 
 By accepting the office loithoiU any comjpensation l>eing fixed or 
 provided for^ no implied promise to pay can be raised, and any 
 
 ' Butts V. Wood, 37 N. Y. 317. And ing a corporation before its existence, 
 ■where a director of a railroad corpo the policy of the law wholly discoiin- 
 ratioa rendered special services in tenances such arrano:ements. New 
 procuring subscriptions to the stock of York, etc., R. Co. v. Ketchum. 27 Conn, 
 the company in its organization, which 170. See, also, Branch Bank Ala. v. 
 services were rendered by him in ex- Collins, 7 Ala. (N. S.) 95, 
 pectation of a compensation, and the In relation to the compensation of 
 stockholders, in consideration thereof, municipal officers, Mr. Dillon observes: 
 voted him a free pass over the road for " There is no such implied obligation 
 himself and family during his life ; on the part of municipal corporations, 
 which, although an inadequate com- and no such relation between them 
 pensatiou, was accepted by him as and officers, which they are required 
 such ; but some years afterward tiie by law to elect, as will oblige them to 
 stockholders rescinded the vote, and make compensation to such officers, 
 an action was brought by the company unless the right to it is expressly given 
 to recover the fares; it was held that by law." Dill, on Mun. Corp., § 169; 
 the services rendered created no in- Sikes v. Hatfield, 13 Gray, 347; Barton 
 debtedness, and could not constitute a v. New Orleans, 16 La. Ann. 317 ; Gar- 
 consideration for the contract ; that it nier v. St. Louis, 37 Mo. 554 ; Smith v. 
 would have made no difference if the Commonwealth, 41 Penn. St. 335 ; De- 
 services had been rendered upon an voy v. New York, 39 Barb. 169 ; Bladen 
 express understanding with his asso- v. Philadelphia, 60 Penn. St. 464; Phila- 
 ciates that he was to be paid by the delphia v. Given, id. 136. 
 company after its organization, as aside '■' Loan Ass'n v. Stonemetz, 29 Penn. 
 from the technical difficulty of bind- St. 534.
 
 Directors. 261 
 
 compensation subsequently voted is a naked gratuity not based 
 upon any legal consideration. The Connecticut case' heretofore 
 cited is illustrative of these propositions. In that case, the de- 
 fendant, who was a director of the jjlaintiff, had rendered valuable 
 services in procuring subscriptions to its stock, for which he had 
 never been paid and for which no promise to ])ay had ever been 
 made. In April, 1847, the board of directors ])a3sed resolutions 
 as follows : 
 
 " Resolved, unanimously, that this board do highly appreciate 
 the zeal, activity and perseverance evinced by Morris Ketchum, 
 Esq., a member of this board, in his efforts to secure subscriptions 
 to the capital stock of this company, and to commend the project 
 to the favorable consideration of the public, and that to his ex- 
 ertions we are, in a great degree, indebted for the filling up of 
 the stock and securing the immediate construction of the road at 
 so early a period. 
 
 " Resolved, unanimously, that as a permanent evidence of our 
 estimate of the services of Mr. Ketchum, and as a consideration 
 in some degree therefor, this board doth hereby assign and grant 
 to him the right to a free passage in the cars of this company over 
 its road, for himself and family, during his natural life. 
 
 " Resolved, that the secretary be directed to transmit to Morris 
 Ketchum, Esq., a copy of the foregoing resolutions." 
 
 A copy of these resolutions was soon afterward presented to 
 Mr. Ketchum. The free passage was not granted to him nor re- 
 ceived by him as a gratuity, but as a compensation, to some 
 extent, for his services. Before the passage of the resolutions, 
 conversation was had in relation to the subject between Mr. 
 Ketchum and the pi'esident and some of the directors, and it was 
 expressly understood that the consideration expressed in the 
 resolutions was the actual consideration upon which the grant 
 was made, and that the services of Mr. Ketchum were a full and 
 adequate consideration for the right and privilege granted. After 
 the passage of the resolutions, and in consequence thereof, Mr. 
 Ketchum made no other or further claim against the company 
 for his above-mentioned services. From the time when the road 
 went in operation in January, 1849, Mr. Ketchum and his wife, 
 
 ' New York & New Haven R. R. Co. v. Ketcliuiu, 27 Coun. 170.
 
 262 Private Corporations. 
 
 children and servants, were accustomed to travel upon it between 
 Westport and New Yoi'k, whenever they chose so to do, without 
 paying fare, claiming a right so to do by virtue of the resolutions 
 above set forth. This was done with the knowledge and consent 
 of the company until the time hereinafter mentioned, and with- 
 out any demand for fare by the company, and without any claim 
 by the company that any of those persons were liable to pay any 
 passage-money. The facts above stated were known to the stock- 
 holders, and were discussed at one of their meetings in which the 
 president explained to them that the privilege so granted to Mr. 
 Ketchum and his family had been given by way of compensation 
 for his valuable services, yet no action was then taken in refer- 
 ence to revoking the privilege. No further action was taken 
 upon the subject until the 10th day of May, 1855, when a meet- 
 ing of the stockholders passed the following vote : — 
 
 " Whereas, the board of directors of tlie New York and New 
 Haven Railroad Company, at some time prior to this date, granted 
 to Morris Ketchum and family, and to others, the right to pass 
 and repass upon the road of said company, free of charge, for all 
 time, or without limit — now, therefore, Resolved, that the 
 president of this company be instructed to annul all such grants, 
 and give notice to all persons claiming under such grants." 
 
 The fact of the passage of this resolution was not communi- 
 cated to Mr. Ketchum, and he had no knowledge of it, and no 
 action was taken by the president in relation to it. Mr. Ketchum 
 continued to enjoy the benefit of the free passage as before, until 
 after the 18th day of August, 1856, on which day the board of 
 directors passed the following vote : — 
 
 " Resolved, that the resolution of this board, passed the 8th day 
 of April, 1847, granting to Morris Ketchum, Esq., the right to a 
 free passage in the cars of this company over its road for himself 
 and his family during his natural life, be, and the same is hereby 
 rescinded and annulled, and this company will hereafter exact from 
 the said Ketchum and from the members of his family the usual 
 and ordinary fares for passage over said road." 
 
 This resolution was duly communicated to Mr. Ketchum, with 
 notice that it would be enforced against him from and after 
 August 25, 1856. From and after that day until the date of
 
 Directors. 
 
 2G3 
 
 the commencement of this suit, February 5, 1857, fare was de- 
 manded by the company from Mr. Ketchum for the passages of 
 himself and family and servants whenever they traveled upon the 
 road, but payment thereof was refused under tlie claim of a right 
 to pass without payment. 
 
 It was claimed by the plaintiff' that the grant of the free pass 
 for himself and friends was not a gratuity, but was in considera- 
 
 ' Ellsworth, J., said : " The plaint- 
 iffs say in the first place in support of 
 their view, that the defendant has at 
 no time rendered service to them, but 
 that whatever was done by him was 
 done in behalf of three or four indi- 
 viduals, who, together with himself, 
 undertook to accomplish certain ends 
 of their own, before the plaintiSs were 
 a c()r])oration, and for which the com- 
 pany was not liable, and in fairness to 
 those who afterward became stock- 
 holders ought never to be held liable, 
 either with or without a vote of the 
 directors. They say secondly, that if 
 it be otherwise, and the services were 
 rendered to the plaintiffs, they were 
 not performed under any agreement 
 or uuderstanding with the plaintiffs 
 that the defendant was to be paid for 
 them ; and that he was a mere di- 
 rector chosen because of his position, 
 experience and financial ability, and 
 especially his great pecuniary interest 
 in carrying the road through, and in 
 all that he did was merely acting as 
 such director. They insist that he did 
 nothing beyond what his official re- 
 lation to the company required him to 
 do, and no more than was expected of 
 a director. They say thirdly, that di- 
 rectors have no right by grants, free 
 tickets, commissions or otherwise to re- 
 munerate themselves for official ser- 
 vices. These objections, involving, as 
 they do, important questions of a 
 somewhat general nature, cover sub- 
 stantially the whole ground of contro- 
 versy, and, if sustained by the facts in 
 the case, make a decisive answer to 
 the defendant's claim. Let us then 
 look at the facts. 
 
 " It appears that from the 13th day 
 of August, 1844, when certain persons 
 attempted to form a company under 
 the charter granted by the legislature, 
 to December, 184G, when the stock 
 was really taken up by bona fide. 
 stockholders, and the company per- 
 
 fected, the corporation was in an 
 anomalous and inchoate state. Noth- 
 ing had been done that was binding 
 upon the so-called stockholders, be- 
 yond the payment of one dollar per 
 share. The proceedings, thus far, 
 seem to us to be open to very serious 
 objection in their relation to the exist- 
 ence of the corporation, if the legisla- 
 ture had seen fit to interfere in that 
 stage of the affair : but it did not do 
 so, and since we have no occasion to 
 inquire into the validity of these in- 
 cipient proceedings, we shall look at 
 them only in their relation to the 
 other objections already stated. 
 
 " The service for which it is claimed 
 that the plaintiffs were liable to pay 
 the defendant were rendered between 
 the first of October and the last of 
 December, 1846, at a time before the 
 stock was taken up in conformity to 
 the charter, and before the company 
 had a proper existence. Hence it is 
 not easy to see how they Could be 
 rendered for or at the request of the 
 company (or rather perhaps the first 
 bona fide stockholders, for they must 
 be looked at as the company), and 
 if they were not so rendered, then 
 how the company could be liable for 
 them, upon any known principle of 
 law. We are aware that it is no un- 
 common practice for corporations to 
 assume and pay these preliminary 
 and antecedent charges, after the 
 company has become organized, but 
 we do not see how the company, if it 
 should object, could be compelled to 
 pay them, and in some cases it would 
 be most inequitable to require it. Can 
 a few persons combine for their own 
 interest to get up a railroad — agree 
 with one of their number to give him 
 a large commission or bonus for every 
 stockholder he can allure into the 
 company, and privately make this 
 commission or bonus a cliarge on the 
 corporation when formed V This would
 
 264: 
 
 Private Cokporations. 
 
 tion of the services rendered by liiin for the company to an 
 amount niiicli greater than tlie nature of tlic thing granted, but 
 the court held that tlie grant of the pass was a mere gratuity, be- 
 
 be a breach of faith toward honest 
 and unsuspecting stockholders who 
 pay tlie charter-price for their stock, 
 and expect to take it clear of all 
 incumbrance. The effect would be the 
 same as if commissioners should 
 enter into a private bargain with sub- 
 scribers, to let them subscribe on 
 terms which the charter does not 
 allow. The getters- up of projects 
 to be carried by such means may 
 well be supposed, as is generally the 
 fact, to be influenced by a view to 
 their own special benefit, for certainly 
 they do not act in behalf of the corpo- 
 ration itself. We do not say that the 
 present is such a case, but such is the 
 natural consequence of the doctrine 
 claimed by the defendant's counsel, 
 and we cannot give it our approval 
 or countenance. It is soon enough 
 for corporate bodies to enter into con- 
 tracts incumbering their property, 
 when they are duly organized accord- 
 ing to their charters and have their 
 chosen and impartial directors to con- 
 duct their business. If a vote was 
 necessary in this case to make these 
 charges a debt against the company, 
 the grant for that very reason cannot 
 stand, for the directors had no power 
 to assume or to create such a debt for 
 such a service. 
 
 " But the next objection is still more 
 decisive. As we have said, the ser- 
 vices of the defendant were rendered 
 between the first of April and last of 
 December, while he was a director, 
 and exerting himself, together with 
 others, to get the company into being. 
 In what exactly his services consisted 
 beyond his advice and personal efforts 
 to induce gentlemen to take stock in 
 the company does not appear. We 
 see nothing of time spent, money 
 expended or travel or other labor, ex- 
 cept what may be implied from the 
 fact that Mr. Ketchum " was a 
 banker, and particularly accustomed 
 to financi.il and railroad operations, 
 and had an extensive and personal ac- 
 quaintance and much influence with 
 business and moneyed men," and his 
 having received from one of his associ- 
 ates, then acting as president of the 
 association, a blank subscription list, 
 
 accompanied with a request that he 
 would get subscribers, which he 
 promised to do, and accordingly made 
 application to per.sons and firms, and 
 got subscribers to the amount of nine 
 thousand four bundled and eighty 
 shares, which, as the report says, 
 were obtained " with difficulty and 
 only on personal application." Noth- 
 ing, however, was said in the inter- 
 view with his associates, so far as ap- 
 pears, as to this service being con- 
 sidered or treated as extra labor, or as 
 entitling him to a commission or re- 
 ward ; not a word appears to have 
 been said about compensation, nor 
 does it appear that it was so much as 
 alluded to ; still it is found that Mr. 
 Ketchum, himself, did not suppose 
 the services were to be gratuituous. 
 We suppose it may be so, but even he 
 himself does not state in what man- 
 ner he expected to be compensated. 
 Doubtless a director may perform ex- 
 tra labor, and for it be justly entitled 
 to a compensation for his time and 
 expenses, and this may be made out 
 even without an express promise, for a 
 promise may be implied from the 
 peculiar and extraordinary services 
 rendered, but then the services must 
 appear to be of an extraordinary 
 character, and this beyond all ques- 
 tion or doubt, for, as director, he 
 agrees to give his services, and is 
 entitled to make no charges, what- 
 ever, however severe and protracted 
 may be his labors. A different rule 
 would lead to great abuses and cor- 
 ruption. We cannot but think it im- 
 portant in every case that where a per- 
 son, holding the position of a director, 
 expects, or may be fairly entitled to 
 expect a compensation for his services, 
 the services should appear to have 
 been agreed for, or their nature and 
 extent should appear to be such as 
 clearly to imply that both parties un- 
 derstood they were to be paid for, and 
 not rendered gratuitously within the 
 scope of a director's duty. 
 
 "Mr. Ketchum, so long as he re- 
 mained a director, was bound, in good 
 faith, to make a proper use of his in- 
 fluence to induce persons to take stock 
 in the company, if thereby he could
 
 DiEECTOKS. 
 
 265 
 
 cause the defendant had rendered no services for wliich lie was 
 entitled to be paid. Ellsworth, J., in passing npon this question, 
 gave expression to the true rule in such cases, as stated in his 
 opinion given in the preceding note. 
 
 fairly promote the interests of the 
 company. He was chosen a director 
 because of his ability, at the outset of 
 this enterprise. Why did his asso- 
 ciates select a man of his character 
 and experience, but tliat he mipfht 
 bring tliese capabilities into the dis- 
 charge of his duties to the company. 
 If Mr. Ketchum thought his aid and 
 co-operation were too chea]ily pur- 
 chased by the incidental advantages 
 which he expected to receive by carry- 
 ing this road through, he should have 
 said so, and then he might or miglit 
 not have been chosen a director. Un- 
 doubtedly the other directors did 
 what they could, and whether it was 
 more, or less, than Mr. Ketchum did, 
 does not appear. They did what they 
 could, and we see no evidence that 
 any of them ag-reed for, or was to re- 
 ceive compensation from the com- 
 pany, when organized. All expected 
 to be benefited in some way, and we 
 cannot doubt that their expectations 
 were realized. One became president. 
 another was contractor and built the 
 road, another the financier, and an- 
 other perhaps had real estate on the 
 proposed line of the road, the value of 
 which would be enhanced. They all 
 had their several objects and ends, 
 and probably secured them, and so far 
 as this was properly done, the com 
 pany cannot complain, but then such 
 services, unaccompanied with a special 
 contract, fall quite short of creating 
 an indebtedness against the corpora- 
 tion 
 
 '■ The third objection, viz., that di- 
 rectors have no right to charge for 
 performing official duty is a principle 
 universally admitted to be sound law. 
 We find it so laid down in the ele- 
 mentary books, and in several decided 
 cases, and the reasons assigned most 
 forcit)ly commend themselves to our 
 approbation. In Collins v. Godfrey, 
 1 B. & Aid. 950, a director of a bank 
 was prevented from receiving a re- 
 ward offered by the bank for the 
 recovery of stolen property, because 
 he performed nothing but his duty in 
 
 34 
 
 endeavoring to recover it. In Dunstan 
 V. Imperial Gas-light Co., 3 B. 
 & Aid. 12-'5, a resolution formally 
 adopted, allowing the directors certain 
 compensation for attendance on courts, 
 etc., was held insufficient to give a 
 director a right to recover for such 
 services. The same doctrine is held 
 in the case of Loan Association v. 
 Stonemetz, 29 Penn. St. 534. There 
 a vote was passed by the directors to 
 pay the chairman of a committee on 
 short loans $200 for his services al- 
 ready rendered, but the court held 
 that it created no debt, it being in 
 favor of a director for services ren- 
 dered by him in his official capacity. 
 The court say : ' Although the di- 
 rector performed the work faithfully, 
 his laliors fell within the limit of his 
 duty as a director, and the fact that 
 he performed them with an exuber- 
 ance of good faith imposed upon the 
 corporation no moral duty to pay for 
 them. The legal obligation was as 
 defective as the moral. When the 
 resolution was passed the considera- 
 tion had been executed, for the ser- 
 vices compensated by this verdict had 
 been previously rendered, and there is 
 no proof of a precedent or contempo- 
 raneous request. It is quite true that 
 they were beneficial to the defendant, 
 and a request might, in the liberal 
 spirit of modern decisions, be implied, 
 but in the instance of gratuitous ser- 
 vices performed by a party in the line 
 of his legal duty, there is no case 
 which authorizes such an inference. 
 Our decision must be placed on yet 
 higher ground. We regard it as con- 
 trary to all sound policy to allow the 
 director of a corporation, elected to 
 serve without compensation, to re- 
 cover payment for services performed 
 by him in that capacity, or as inci- 
 dental to his office. It would be a sad 
 spectacle to see the managers of 
 any corporation * * assembling to- 
 gether, and parceling out, among 
 themselves, the obligations, or other 
 property of the corporation in pay- 
 ment of past services.' "
 
 266 Private Corporations. 
 
 Sec. 161. Directors' meetings.— A formal meeting of the direct- 
 ors is not necessary to enable them to transact any business 
 or do any act which is within their coi'porate powers.^ It is 
 sufficient if the prescribed quorum is present, whetlier there 
 has been any call for the meeting or not, although it is essen- 
 tial that a majority of the board be present and that they 
 act together as a board." The directors are not the corpora- 
 tion, but simply the officers and agents thereof, consequently the 
 place of their meeting is not material, and may be held out of the 
 state, as well as in it/ But, where the action of the directors 
 as a board is required, notice of a time and place for the meeting 
 should be given, and simply obtaining the assent of a majority 
 of the directors to an act, separately and at separate interviews, as 
 to a matter which calls for its action as a board, is insufficient.* 
 But it seems that it is sufficient presumptive proof for a stranger, 
 of the concurrence of the board of directors, to show that they 
 assented separately.^ 
 
 ^ Waite V. Windham County Mining ^ Arms v. Conant, 36 Vt. 744 ; Ohio, 
 
 Co.. 86 Vt. 18. etc., R. R.Co. v. McPherson, 3o Mo. 13; 
 
 •^ D'Arcy v. Tamar, etc., Railway Co., Bellows v. Todd, 39 Iowa, 209. 
 
 L. R., 2 Exch. 158; Cram v. Bangor * D'Arcy v. Tamar, etc., Railway Co., 
 
 House Proprietary, 12 Me. 354; Buell ante; Barcu.s v. Hannibal, etc., Plank- 
 
 V. Buckingham, 16 Iowa, 284. Ami- road Co., 26 Mo. 102; Wells v. Rah- 
 
 nority of a board cannot adjourn the way Rubber Co., 19 N, J. Eq. 402. 
 
 meeting to a place fifty miles away. » Tenney v. East Warren Lumber 
 
 State V. Smith, 48 Vt. 266. Co., 43 N. H. 343.
 
 Officers and Agents Generally. 207 
 
 CHAPTER YII. 
 
 OFFICERS AND AGENTS GENERAIiLV. 
 
 Sec. 165. Necessity for corporate agents. 
 
 Sec. 166. General limitations on the authority of agents. 
 
 Sec. 167. Directors as agents. 
 
 Sec. 168. Appointment of agents, use of seal, etc. 
 
 Sec. 169. What is within the scope of the agent's authority. 
 
 Sec. 170. Powers implied by virtue of an office. 
 
 Sec. 171. Powers of president. 
 
 Sec. 172. Autliority by usage. 
 
 Sec. 173. Apparent authority. 
 
 Sec. 174. Distinction between executed and unexecuted contracts, where 
 
 the agent exceeds his authority. 
 
 Sec. 175. Limitations of power as to time. 
 
 Sec. 176. Mode of executing contracts by agents. 
 
 Sec. 177. How contracts by, should be executed. 
 
 Sec. 178. Id. 
 
 Sec. 179. TTltra vires contracts by agents. 
 
 Sec. 180. Same continued. 
 
 Sec. 181. Parties dealing with an agent must take notice of his authority. 
 
 Sec. 183. Same continued. 
 
 Sec. 183. Delegation of authority by agents. 
 
 Sec. 184. Powers expressly conferred. 
 
 Sec. 185. Ratification of acts of agents. 
 
 Sec. 186. The doctrine of ratification applicable to corporations. 
 
 Sec. 187. Same continued. 
 
 Sec. 188. Personal liability of agents. 
 
 Sec. 189. Forms of executing power by agents. 
 
 Sec. 190. When agent personally bound. 
 
 Sec. 191. Where there is no principal. 
 
 Sec. 193. Liability of agent in case of misrepresentation of his authority. 
 
 Sec. 193. Matters of which parties dealing with agents are bound to take 
 
 notice. 
 
 Sec 194. Same continued. 
 
 Sec. 195. Liability of agents for violation of duties. 
 
 Sec. 196. Compensation of officers and agents. 
 
 Sec. 197. Frauds of officers and agents. 
 
 Sec. 198. Proof of agency. 
 
 Sec. 165. Necessity for corporate agents The principal part of 
 
 the general business of a corporation must necessarily be per- 
 formed by agents. All of its officers, as respects such corpora-
 
 268 Private Coeporations. 
 
 tion, are agents. In fact, no act can be directly done by snch 
 corporation, except throngli the voice or vote of its members, 
 who, in this respect, by a fiction of the law, are snpposed to rep- 
 resent the ideal and fictitious corporate body, of which they are 
 members. They may act, by a majority, as the act of the corjDO- 
 ration ; but all other acts, by or on behalf of the corporation, 
 must be performed by agents. The importance of the law of 
 agency in connection with corporations will, therefore, be mani- 
 fest. The general law of agency as applicable to the relations 
 between the corporation and its agents is of greater importance 
 than where mere private or natural persons only are concerned. 
 For corporations must necessarily employ tliein. They have no 
 other alternative. Each officer, including the directors, managers 
 or trustees, are agents of the corporation ; besides, it is usually 
 necessary, in carrying on the objects of private corporations, to 
 employ agents for special purposes. In -all acts of the corpora- 
 tion, by or through agents, the general doctrine applies that what 
 one does by the agency of another, he does himself, the familiar 
 maxim being, (pd facit 2)er alium,facitper se. 
 
 Sec. 166. General limitations on the authority of agents. — It may 
 be further observed that the authority of corporate agents can 
 never exceed the rights, powers and authority of the principal, 
 and is usually less. It is seldom that all the powers of the corpo- 
 ration are vested in the board of directors, although they are 
 usually the highest and most important officers and agents of a 
 corporation. The powers and authority of officers and agents 
 may be, and with the more important of them, usually are, 
 limited by either the fundamental law or the by-laws of the 
 organization. But the authority of minor and inferior agents 
 is usually prescribed and limited by acts and resolutions of the 
 corporation, or the immediate, and for most purposes general 
 agents, the board of directors, whose powers in this respect, as 
 well as others, may, as we have seen, be also Kmited by its organic 
 or constating laws. 
 
 Sec. 167. Directors as agents. — We have already considered the 
 agency of directors in treating of those officers.' They are the 
 
 ' See chap. 6, ante.
 
 Officers and Agents Generally. 269 
 
 most important of corporate agents, sis on tliem usually devolve 
 the manaivement of all the affairs of the corporation. In view 
 of the usual powers conferred upon them, ihej may almost be 
 said to be the corporation, the reserved powers of the corpo- 
 ration in a majority of cases being the mere right to annually ex- 
 press, through the members at large, the corporate will as to the 
 policy and management of the corporate affairs by an election of 
 such directors or managers as will execute such will. If the di- 
 rectors do not manage the affairs of the corporation intrusted to 
 them with prudence or discretion in the opinion of the majority 
 of the members representing a majority of the shares of stock, 
 such members may replace them with others, at any meeting of 
 the corporate body for such an election, provision for which is 
 usually made in the fundamental law of the corporation ; and 
 thereby the corporate will, in these respects, in theory at least, 
 may be executed. 
 
 Sec. 168. Appointment of agents, use of seal, etc. — The USe of the 
 seal for the appointment of many, if not most, of corporate 
 agents, as well as in the making of most of the various contracts, 
 required in the execution of the powers and objects of coi*pora- 
 tions created for various purposes, has, in modern times, been 
 practically abandoned. It is no longer regarded as the corporate 
 voice, or as an important evidence of corporate assent.^ In fact 
 the practice of using the seal has been almost abandoned. The 
 
 ' The strict rule of the ancient Eng-- ter Works Co. v. Bailey, 4 Bing'. 283; 
 
 lish law, requiring acts of a corpora- Edwards v. Grand Junction Canal Co., 
 
 tiou to be done by a sealed instrument, 1 Mylne & C. 659,672; Murray v. 
 
 was very early relaxed as respected East India Co., 5 B. & Aid. 204; Ar- 
 
 the appointment of corporate agents, nold v. Mayor of Poole, 4 Mann. & Q. 
 
 so far as to permit an agent to be ap- 893; Smith v. Cartwright, 6 Exch. 
 
 pointed without deed, in cases where 927 ; 6 Eng. L. & Eq. 528. For the 
 
 the service was unimportant or ordi- early rules relative to the mode of ap- 
 
 nary, where haste was required, etc., pointing an agent to demand rent 
 
 though it has been more strictly re- for a corporation, and to distress for 
 
 tained where the agency affected real non-payment, see Knap v. Jewelch, 
 
 property interests or matters of an im- 1 Brownl. 138; case of Master, etc., 
 
 portant character. Qn the history of of Emanuel College, 2 id. 175 ; Year 
 
 the modern relaxation of this rule in B. 1 Edw. 5 fol. 5, pi. 10 ; id. , 2 Eich. 
 
 England, consult Horn v. Ivy, 1 Ventr. 3, fol. 7, pi 13 ; 7 Hen. 7, fol. 10, pi. 2. 
 47; Cary v. Matthews, 1 Salk. 191; Bank of England may authorize a 
 
 Wilmot V. Mayor, etc. , of Coventrv, 1 person to sisfn notes, by mere vote. 
 
 Y. & C. 518 ; bumpor v. Syms, Cro. See Rex v. Bigg, 1 Strange, 18. 
 Eliz. 815; Cooper v. Gooderich, id. Where the act of incorporation em- 
 
 862; BailifiFs, etc., of Ipswich v. Mar- powers the directors to appoint and 
 
 tin, Cro. Jac. 411 ; Erneley v. Wal- displace any of the othcers of the 
 
 roud, Dyer, 102 &; East London Wa- company, the appointment of an at-
 
 270 Private Corporations. 
 
 record of the corporate will, either as expressed by tlic majority 
 of its members in attendance at a corporate meetini^, or by the 
 majority of tlie directors at a meetin<^^ duly called, is the highest 
 and best evidence, and agents for any and all purposes may be 
 thus a{)pointed and constituted, without any other written au- 
 thority", or any authentication thereof by the corporate seaL The 
 technical doctrine that a corporation could not contract except 
 under its seal, or in other words, could not make a promise, if it 
 ever had been fully settled, must have been productive of great 
 mischiefs. Indeed, as soon as the doctrine was established that 
 its regularly appointed agents could contract in their name with- 
 out seal, it was impossible to support it ; for, otherwise, the party 
 who trusted such contract would be without remedy against the 
 corporation. Accordingly, it would seem to be a sound rule of 
 law, that wherever a coF];>oration is acting within the legitimate 
 purposes of its institution, all parol contracts made by the au- 
 thorized agents are express promises of the corporation ; and all 
 duties imposed on them by law, and all benefits conferred at their 
 request, raise implied promises for the enforcement of which an 
 action will lie." * 
 
 The doctrine that every thing, or that even important acts 
 must be done by deed under the corporate seal, cannot be now 
 supported. On the contrary, it is well established that an agent 
 may be appointed merely by a vote of the corporation, or of the 
 boards of directors, and that his acts, within the scope of his 
 authority thus conferred, and within the powers of the corjDora- 
 tion, will bind the corporation.'^ 
 
 torney to the company need not be v. Patterson, 7 Cranch, 299, but, 
 
 under seal. See Reg v. Cumberland, also, that they may be appointed by 
 
 5 Dowl & L. 481. parol. City of Detroit v. Jackson, 1 
 
 In this country, it is not only well Mich. 106 ; Nicholas v. Oliver, 86 N. 
 
 established that the corporate seal is H. 218 ; Randall v. Van Vechten, 19 
 
 not necessary to indicate the appoint- Johns. 60. 
 ment of an agent, Bank of Columbia 
 
 ' Bank of Columbia v. Patterson, 7 Kitchen v. Cape Girardeau, etc., R. 
 
 Cranch, 299 ; Gray v. Portland Bank, Co., 59 Mo. 514. See, as to admissions 
 
 3 Mass. 3(14 ; Worcester T. Co. v. Wil- of superintendent of a street railway, 
 
 lard, 5 id. 80 ; Gilmore v. Pope, id. justifying an assault by one of its 
 
 491 ; Bank of Metropolis v. Gutt- drivers, Malecek v. Tower Grove R. 
 
 schlick, 14 Pet. 19. A corporation may Co., 57 Mo. 17. 
 
 employ an agent to perform services ^ The Bank of United States v. Dan- 
 consonant with its general design, dridge, 12 Wheat. 64 ; Green's Brice's 
 without any specific authority for that Ultra Vires, 356 et seq., and notes; 
 purpose conferred by the charter, Chesapeake, etc., Can. Co. v. Knapp,
 
 Officers and Agents Generally. 271 
 
 Sec. 169. what is within the scope of the agent's authority. — 
 Among the most difficult questions in tlie law of agency is the 
 one which involves the question, whether the acts of an agent are 
 within the scope of his authority.' The determination of this ques- 
 tion frequently involves a consideration of the objects and pur- 
 poses of the corporation ; a construction of the fundamental laws 
 of its being; a consideration of tlie customs in different countries 
 and states in reference to the general powers and duties of various 
 officers and agents; the general statutory provisions relating to 
 it ; and tlie general customs of the corporation, and of the com- 
 munity where it is established or does business. Authority con- 
 ferred upon an agent may be general or special, and the former 
 may be general, but limited to a particular matter. But whether 
 general or special, and whether conferred orally or by writing, 
 and authenticated with the corporate seal, the authority conferred 
 is always held to confer the usual means of accomplishing the 
 object. Thus if a general authority is given to collect, receive, 
 and pay all the debts due by, or to, the principal, it will occur to 
 every one, who reflects upon the nature of such a trust, that num- 
 berless arrangements may be required fully to accomplish the end 
 proposed ; such as settling accounts, adjusting disputed claims, 
 resisting unjust claims, answering or defending suits ; and these 
 subordinate powers (or as they are sometimes called mediate 
 powers) are, therefore, although not expressly given, understood 
 to be included in, and a part of, or incident to, the primary power.' 
 In accordance with this doetrine it has been held that authority 
 to procure a note to be discounted, implied an authority to indorse 
 
 9 Pet. 541 , Randall v. Van Vecliten, 1 H. & G.424; Lejrrand v. Hampden- 
 
 19 Johns. 65 ; Baptist Church v. Mul- Siduev College, 5 Munf. 3'24 ; Bates 
 
 ford, 8 Halst. 182 ; Perkins v. Wash- v. Ba'nk of Alabama, 2 Ala. 461 ; 
 
 iugton Ins. Co., 4 Cow. 645 ; Lathrop Stamford Bank v. Benedict, 15 Coun. 
 
 V. Bank of Scioto, 8 Dana, 115; Sav- 445; City of Detroit v. Jackson, 1 
 
 ings Bank v. Davis, 8 Conn. 191 ; Doug. (Mich.) 106 ; St. Andrew's Bay 
 
 Union Bank of Maryland v. Ridgeley, Land Co. v. Mitchell, 4 Fla. 193. 
 
 ' Blanchard v. Blackstone. 102 Mass. Lead. Cas. 603 ; Mott v. Hicks, 1 Cow. 
 
 343 ; Mechanics' Bank v. Bank of Col- 513. 
 
 umbia, 5 Wheat. 33i) ; Hopkins v. Me- '^ Howard v. Baillie, 2 H. Bl. 618; 
 
 hafly, 11 S. & R. 126 ; Regents, etc., v. Withington v. Herring, 5 Bing. 443 ; 3 
 
 Detroit, etc., 13 Mich. 138 ; Sweetzer Bell's Com. 387, art. 412 (4th ed.); Kog- 
 
 V. Mead, 5 id 107 ; Bank of Metropolis ers v. Kneeland, 10 Wend. 318; Peck v. 
 
 V. Guttschlick, 14 Pet. 19 ; Story on Harriott, G S. & R. 146 ; Sprague v. 
 
 Agency, §§ 154, 260, 266, 277 ; Bank of Giliett, 9 Mete. 91 ; Fowler v. Bledsoe, 
 
 Columbia v. Patterson, 7 Cranch, 399 ; 8 Humph, 509. 
 
 yon V. Adamson, 7 Iowa, 509; Am. ,
 
 272 PltlVATE CORPOBATIONS. 
 
 it in the name of the princijDal and bind him Ijj siicli indorsement, 
 as sncli a course would ordinarily be necessary in order to accom- 
 plish the purposes desired.' 
 
 So an authority to adjust a loss on a policy has been held to 
 confer the power to submit the matter to arbitration ; ' an au- 
 thority to sell lands includes an authority to receive the purchase- 
 money;" an authority to purchase grain includes the right to 
 waive or modify a contract made in reference to grain ; * an au- 
 thority to sell a horse carries, by implication, the authority to war- 
 rant, unless restricted in this respect.^ And it is also held that 
 the authority includes all the various means which, under the cir- 
 cumstances of the case, are allowed by the custom or the usages 
 of trade. Thus, if an agent is authorized to sell goods, this will 
 be construed to authorize the sale to be made upon credit, as well 
 as for cash, if this course is justified by the usages of trade, and 
 the credit is not beyond the usual period ; for it is presumed that 
 the principal intends to clothe his agent with the power of resort- 
 ing to all the customary means to accomplish the sale, unless he 
 expressly restricts him.® And where a municipal corporation 
 clothed its agents with full power and authority to make a con- 
 tract, wliich was made accordingly, it was held binding upon the 
 corporation, though there was no formal acceptance of the same 
 by vote, and even where it was afterward rejected by the corpora- 
 tion,'' 
 
 Sec. 170. Powers implied by virtue of office. — An ofiicer of a 
 corporation has usually, by virtue of his ofiice, the authority, in 
 the absence of express provisions conferring it or limitations con- 
 tained in the fundamental laws or other regulations by the cor- 
 poration, to perform all the duties usually belonging or appertain- 
 
 ' Andrews v. Kneeland, 6 Cow. 354. Thornton, 6 East, 17; 2 Kent's Com. 
 
 2 Goodson V. Brooke, 5 Camp. 163. 622; McKinstry v. Pearsall, 3 Johns. 
 
 3 Peck V. Harriott, 6 S. & R. 149. 319 ; Van Allen v. Vanderpool, 6 id. 69; 
 •* Anderson v. Cooulev, 21 Wend. 279. Goodenow v. Tyler, 7 Mass. 36 ; Clark 
 sFenn v. Harrison, 3 T. R. 757; 3 v. Van Northwick, 1 Pick. 348; Laus- 
 
 Chit. Com. and Man. 200 ; Paley on satt v. Lippincott, 6 S. & R. 386 ; Ger- 
 
 Agency, 209 ; 1 Bell's Com. 387, art. bier v. Emery, 2 Wash. (C. C.) 413 ; 
 
 412 (4th ed.). But the right to warrant Greely v. Bartlett, 1 Greenl. 173; For- 
 
 in such cases has been denied. See restier v. Bordman, 1 Story 43. 
 
 Gibson v. Colt. 7 Johns. 390 ; Nixton v. ' Davenport v. Hallowell, 10 Me. 317; 
 
 Hyserott, 5 id. 58. Junkins v. School District, 39 id. 220; 
 
 "Story on Agency, § 60 ; Paley on Willard v. Newburyport, 12 Pick. 227; 
 
 Agency, by Lloyd {3d ed.), 198, note ; 1 Kingsbury v. School District, 12 Mete. 
 
 Livermore on Agency 103 ; Newson v. 99.
 
 Officers and Agents Generally. 
 
 273 
 
 ing to the office. The usual power conferred upon tlie president, 
 virtute officii, where there are no limitations upon his rights, is 
 the authority to preside at meetings of the corporation or boards 
 of directors ; to sign contracts and execute deeds of the corpora- 
 tion ; and, perhaps, generally to have charge of the corporate seal. 
 So, there is an implied power, virtute offi^cii, conferred upon the 
 cashiers of banks to transfer and indorse negotiable securities held 
 by banks ; as by virtue of the office he is intrusted with tlie notes 
 and securities and other funds of tlie banks, and is usually held 
 out to the world as the general agent for the negotiation, man- 
 agement and disposal of them, l^o special authority for this 
 purpose is necessary to be shown, as such authority would be 
 presumed.' And where a cashiei* of a bank habitually exer- 
 
 • Wild V. Bank of Passamaquoddy, 
 3 Mason, 505. See, also, State v. Com- 
 mercial Bank, 6 S. & M. 337. 
 
 In Massachusetts it has been held 
 that neither a president nor a cashier 
 of a bank has, ex officio, authority to 
 transfer the property or other securi- 
 ties of the company, but must have ex- 
 press authority to that effect from the 
 corporation at large, or the directors, 
 as the case may be. Hallowell Bank v. 
 Hamlin, 14 Mass. 178 ; Hartford Bank 
 V. Barry. 17 id. 97. Neither, it is said, 
 can the president or cashier charge a 
 bank with any special liability for a 
 deposit contrary to its usage, without 
 the previous authority or subsequent 
 assent of the corporation . Foster v. 
 Essex Bank, 17 Mass. 505. In Massa- 
 chusetts, however, it is admitted that 
 a cashier has authority, ex officio, to 
 indorse a note, the property of the 
 bank, as a measure preliminary to 
 a suit, and to authorize a demand 
 upon the maker and notice to the 
 indorser ; Hartford Bank v. Barry, 17 
 Mass. 97 ; and to give new certifi- 
 cates of stock to a purchaser of shares 
 sold on a tax warrant, on its face good, 
 and issued by lawful authority, though 
 the tax might have been improperly 
 assessed. Smith v. Northampton Bank, 
 4Cush. 1. 
 
 These narrow limits on a cashier's 
 ex-officio power are, however, by no 
 means generally acknowledged. On 
 the contrary, it is said that a cashier is 
 usually intrusted with all the funds 
 of a bank, in cash, notes, bills, etc., to 
 be used from time to time for the ordi- 
 
 35 
 
 nary and extraordinary exigencies of 
 the bank. He receives, directly or 
 through the subordinate officers, all 
 moneys and notes. He delivers up all 
 discounted notes and other property 
 when payments have been made. He 
 draws checks, from time to time, for 
 moneys, whenever the bank has de- 
 posits. He acts as the arm of the bank 
 in carrying out the business arrange- 
 ments and agencies assumed by the 
 bank through the directors. In short, 
 he is considered the executive officer, 
 through whom and by whom the 
 whole moneyed operations of the bank 
 in paying or receiving debts, or dis- 
 charging or transferring securities, 
 are to be conducted. It does not seem 
 too much then to infer, in the absence 
 of all positive restrictions, that it is 
 his duty as well to apply the negotia- 
 ble funds, as the moneyed capital of 
 the bank, to discharge its debts and 
 obligations. Flecknerv. United States 
 Bank, 8 Wheat. 360 ; Lafayette Bank 
 V. State Bank of Illinois, 4 McLean (C. 
 C), 208 ; Ridgwav v. Farmers' Bank, 
 12 S. & R. 365 ; Bank of Ky. v. Schuvl- 
 kill Bank, 1 Pars. Sel. Cas. 243 ; Ever- 
 ett V. United States, 6 Port. (Ala.) 166; 
 Stamford Bank v. Benedict, 15 Conn. 
 445 ; Crocket v. Young, 1 S. & M. 241 ; 
 State V. Commercial Bank, G id. 237 , 
 Carey v. Giles, 10 Ga. 9 ; Ryan v. Dun- 
 lap. 17 111.40. 
 
 The inducement to the transfer 
 need not appear, but the courts will 
 presume the transfer to have been 
 properly made by the cashier, in the 
 absence of proof to the contrary. lb.
 
 274 Pkivate Corporations. 
 
 cises powers as such with the knowledge and acquiescence of 
 the directors, this entitles the public and persons dealing with the 
 bank to the benefit of a conclusive presumption that the party thus 
 acting is authorized so to act, provided it is not in violation of 
 the laws of its constitution, or contrary to the limitations of power 
 contained in its organic laws or constating instruments.' The 
 regular and lawful appointment of such an officer would be in- 
 ferred from the circumstances. And the bank, in such a case, 
 would be estopped, where the interests of third parties dealdng 
 with such bank required it, from denying the authority of such 
 officer, and his power to act and perform the duties usually per- 
 formed by such an officer. "If," says Justice Story, " he was 
 held out as an authorized cashier, that character was equally ap- 
 plicable to all who deal with the bank, in transactions beneficial 
 as well as onerous to the bank." "^ And this recognition and per- 
 mission of official acts is the same, whether the officer receives 
 his appointment or election from the corporate body at large, or 
 from a duly constituted board of directors.^ 
 
 Sec. 171. Powers of president. In relation to the powers and au- 
 thority of a president of a corporate body, it seems well settled 
 that he may, as incidental to the office, and the execution of the 
 trust reposed in him virtute officii, perform all the duties usually 
 incumbent upon such officer, or such as custom or necessity 
 has imposed upon the officer, or such as is imposed by the gen- 
 eral course of business of the corporation. In relation to this 
 
 ' Merchants' Bank v. State Bank, 10 Dunlap, 17 111. 40 ; State v. Commer- 
 Wall 604 ; Fleckner v. Bank of United cial Bank, 14 Miss. 218. 
 States, 8 Wheat. 338; Minor v. Me- ^ gank of United States v. Dan- 
 chanics' Bank,l Pet. 46; Bank of United dridge, 12 Wheat. 64. See, also, Bar- 
 States V. Dunn, 6 id. 51 ; United States gess v. Pue, 2 Gill, 254 ; Barrington v. 
 V. Bank of Columbus, 21 How. 256 ; Bank of Washington, 14 S. & R. 421 ; 
 Baldwin v. Bank of Newburgh, 1 Wall. Troy T. Co. v. McChesney, 21 Wend. 
 234; Badger V. Bank of Cumberland, 296; Warren v. Ocean Ins. Co., 16 
 26 Me. 428 ; Mussey v. Eagle Bank, 9 Me. 439 ; Badger v. Bank of Cumber- 
 Mete. 306 : Farmers' Bank v. Butchers' land, 26 id. 428 ; Davidson v. Borough 
 Bank, 4 Duer, 219 ; S. C, 16 N. Y. of Bridgeport, 8 Conn. 472; Waite v. 
 125 ; Cooke v. State Bank. 52 id. 96 ; Mining Co., 36 Vt. 18. 
 Bank of Pennsylvania v. Reed, 1 W. ^^ Conover v. Insurance Co., 1 N. Y. 
 & S. 101 ; Ridgway v. Farmers' Bank, 290 ; Lohman v. New York R. Co., 
 12 S. & R. 256; Merchants' Bank v. 2 Sandf. 39 ; Beers v. Phoenix Glass 
 Marine Bank, 3 Gill, 96 ; Sturges v. Co., 14 Barb. 358 ; Mead v. Keeler, 24 
 Bank of Circleville, 11 Ohio St. 153 ; id. 20. 
 Robinson v. Bealle, 20 Ga. 275 ; Ryan v.
 
 Officers and Agents Generally. 275 
 
 subject, in a recent case in Illinois, "Walker, J., observes : 
 " As we understand the law, a corporate body may, unless 
 otherwise provided by their charter, appoint any member of the 
 body, or other person, by their by-laws or by resohition, an agent 
 to transfer or dispose of their property or negotiable securities. 
 No officer of the body has that exclusive power unless given by 
 the charter. They may confer power on the president, treasurer, 
 secretary, or other officer or person. But in the absence of both 
 statutory authority and regulations of the body on the subject, 
 the presumption might be indulged that the president, as the head 
 of the organization, would have authority, if incident to the or- 
 ganization, or in conformity with the usage and custom of busi- 
 ness. The doctrine seems to be settled that the president of a 
 corporate body being its head, and through whom the corporate 
 affairs of the corporation are constantly pei-formed, and such acts 
 as are incident to the execution of the trust reposed in him, or such 
 as custom or necessity has imposed upon the office, he may perform 
 without express authority. And it is immaterial whether such 
 authority exists by virtue of his office, or is imposed by the course 
 of business of the company.'" But it has been held in Massa- 
 chusetts, that neither the president nor the cashier of a bank has, 
 ex officio, authority to transfer the property or securities of the 
 bank, but that for this purpose they must have an express author- 
 ity from the corporation or its directors.'' It has been held, also, 
 that the recei%ang teller of a bank, where there is one, is the only 
 proper officer to receive deposits, and that, if he receives the funds 
 of a stranger and promises to apply them to the payment of a 
 bill or note, he acts as the agent of the stranger, and not of the 
 bank, and that the bank is not liable therefor ; ' and that if he 
 exceeds his authority as a teller, and certifies a check upon the 
 bank as " good,' ' he cannot bind the bank in this way to pay the 
 amount of such check to any person who may afterward present 
 
 1 Mitchell V. Deeds, 49 111. 416 ; Chi- Pendleton v. Bank, 1 T. B. Monr. 179 
 
 cago, etc., R. Co. v. Coleman, 18 id. where it was held that a cashier had 
 
 297. See, also, Elwell v. Dodge, 33 no authority ex officio to accept bills 
 
 Barb. 336. of exchange. 
 
 ^ Hallowell Bank v. Hamlin, 14 Mass. ^ Thatcher v. Bank of New York, 5 
 
 178; Hartford Bank v. Barry, 17 id. Sandf. 121; Mussey v. Eagle Bank, 9 
 
 97 ; Foster v. Esses Bank, id. 94 ; Mete. 306.
 
 276 
 
 Private Cokpobations. 
 
 it, even where there is a usage of that kind.' But this doctrine 
 would appear unsound, and in New York it has been held that 
 if a teller has made it a practice to certify checks, and of entering 
 the same in a book, for the benefit of the officers of the bank, 
 the bank is liable for checks so certified, though the teller fails to 
 make the entry, and even though the bank has no funds of the 
 drawer, provided the person claiming the same is a hona fide 
 holder of them/ 
 
 ' Mussey v. Eagle Bank, 9 Mete . 
 (Mass.) 306. 
 
 ■^ Farmers' Bank v. Butchers' Bank, 
 16 N. Y. 125. 
 
 In this case the action was by a 
 hona fide holder of a negotiable check, 
 which had been certified to be good by 
 the paying teller of the bank (the de- 
 fendant) on which it was drawn, and 
 it was held that the bank under such 
 circumstances was liable, although the 
 drawer had no funds in the bank with 
 which to pay the check, and the teller 
 exceeded his authority in certifying 
 the check as good. It appeared in 
 this case that the teller was in the 
 habit of certifying the checks of cus- 
 tomers with the knowledge of the offi- 
 cers of the bank, and that he was fur- 
 nished with a book for the express 
 purpose of keeping a memorandum of 
 such checks. The court in this case ob- 
 serve: " His authority to certify, there- 
 fore, in a proper case, cannot be dis- 
 puted. But it is insisted that his 
 power extends only to cases where the 
 bank had funds in hand, he having 
 been expressly prohibited from certi- 
 fying in the absence of funds, and 
 hence that the bank is not bound. It 
 may be doubted whether such a pro- 
 hibition adds any thing to the restric- 
 tions which would otherwise exist upon 
 the powers of the agent. A teller, 
 acting under a general power to cer- 
 tify checks, would be guilty of an ex- 
 cess of authority and a clear violation 
 of his duty if he certified without 
 funds. * * * The bank selects its 
 teller and places him in a position of 
 great responsibility. The trust and 
 confidence thus reposed in him by 
 the bank leads others to confide in his 
 integrity. Persons having no voice in 
 his selection are obliged to deal with 
 the bank through him. If, therefore, 
 while acting in the business of the 
 
 bank and within the scope of his em- 
 ployment, so far as it is known or can 
 be seen by the party dealing with him, 
 he is guilty of misrepresentation, 
 ought not the bank to be held respon- 
 sible ? * * * It is conceded that 
 every one taking the checks in ques- 
 tion would be presumed to know that 
 the teller had no authority to certify 
 without funds. But this knowledge 
 alone would not apprise him that the 
 certificate was defective and unauthor- 
 ized. To discover that he must not 
 only have notice of the limitations of 
 the powers of the teller, but of the 
 extrinsic fact that the bank had no 
 funds ; and as to this extrinsic fact, 
 which he cannot justly be presumed 
 to know, he may act upon the repre- 
 sentation of the agent. There is a 
 plain distinction between the terms of 
 a power and facts entirely extraneous, 
 upon which the right to exercise the 
 authority conferred may depend. One 
 who deals with an agent has no right 
 to confide in the agent as to the ex- 
 tent of his powers. If , therefore, a 
 person, knowing a bank has no funds 
 of the drawer, should take a certified 
 check upon the representation of the 
 cashier, or other officer by whom the 
 certificate was made, but he was au- 
 thorized to certify without funds, the 
 bank would not be liable. But in. re- 
 gard to the extrinsic fact whether the 
 bank has funds or not the case is dif- 
 ferent. That is a fact of which a stranger 
 who takes a check certified by the 
 teller cannot be supposed to have any 
 means of knowledge. Were he held 
 bound to ascertain it, the teller would 
 be the most direct and reliable source 
 of knowledge, and he already has his 
 written representation upon the face 
 of the check. If, therefore, one who 
 deals with an agent can be permitted 
 to rely upon the representation of the
 
 Officers and Agents Generally. 
 
 277 
 
 Sec. 172. Authority by usage. — The exercise of powers by one 
 assuming to be an officer or agent, as president, cashier, or treas- 
 urer, with a knowledge by the corporation, or its immediate rep- 
 resentative, the board of directors, of such acts, witliin the scope 
 of the corporate powers, and such as usually pertaui to the office, 
 would justify third persons and parties dealing with such corpo- 
 ration, to treat such officer or agent as lawfully appointed, and 
 rightfully exercising the duties of the office.' And where officers 
 are acting generally within the apparent scope of their authority, 
 this will, as to third persons, raise a presumption that they have 
 been authorized by all the required formalities.' 
 
 Sec. 173. Apparent authority. — The doctrine frequently an- 
 nounced is, that where a corporation places a person in a position 
 which implies responsibility, and thereby leads others to confide 
 
 agent as to the existence of a fact, and 
 to hold the principal responsible in 
 case the representation is false, this 
 would seem to be such a case. It is, 
 I think, a sound rule, that where the 
 party dealing with an agent has ascer- 
 tained that the act of the agent cor- 
 responds in every particular in regard 
 to which such party has or is pre- 
 sumed to have any knowledge with 
 the terms of the power, he may take 
 the representations of the agent as to 
 any extrinsic fact which rests pecu- 
 liarly within the knowledge of the 
 agent, and which cannot be ascer- 
 tained by comparison of the power 
 with the act done under it. The fa- 
 miliar caseof the giving of a negotiable 
 partnership note by one of the partners 
 for his own individual benefit affords 
 an apt illustration of this rule. Each 
 of the partners is the agent of the 
 partnership as to all matters within 
 the scope of the partnership business, 
 and can bind the firm by making, in- 
 dorsing and accepting bills and notes 
 in such business ; but he has no more 
 authority than a mere stranger to exe- 
 cute such paper in his own business, 
 
 ' Merchants' Bank v. State Bank, 10 
 Wall. 604 ; Fleckner v. Bank of the U. 
 S., 8 Wheat. 338 ; Bank of U. S. v. 
 Dunn, 6 Pet. 51 ; United States v. Bank 
 of Columbns, 21 How. 356; Baldwin 
 V. Bank of Newburgh, 1 Wall . 384 ; 
 
 or for the accommodation of others. 
 If he gives the partnership note or ac- 
 ceptance for his own debt, it is void in 
 the hands of any party having knowl- 
 edge of the consideration for which it 
 is given ; but when negotiated to a 
 bona fide holder, the firm is precluded 
 from questioning the authority of the 
 partner, and is effectually bound. 
 Livingston v. Hastie, 3 Caines, 346 ; 
 Lansing v. Gaine, 3 Johns. 300; Laver- 
 ty V. Burr, 1 Wend. 539 ; Williams v. 
 Walbridge, 3 id. 415 ; Boyd v. Plumb, 
 7 id. 309 ; Qansevoort v. Williams, 14 
 id. 133; Joice v. Williams, id. 141 ; 
 Wilson V. Williams, id. 146 ; Catskill 
 Bank v. Stall, 15 id. 466 ; 18 id. 466. 
 * * * The fact of the agency, and 
 the trust and confidence reposed by the 
 principal in the agent, create a broad 
 line of distinction between them ; and 
 it is this trust and confidence which 
 constitute the foundation of the liabil- 
 ity, and which justify the party deal- 
 ing with the agent in relying upon his 
 representation in respect to facts es- 
 pecially within the agent's knowl- 
 edge." 
 
 Badger v. Bank of Cumberland, 36 Me." 
 428 ; Cooke v. State Bank, 53 N. T. 96. 
 '^Bissell V. Michigan, etc., R. Co., 
 23 N. T. 258 ; Green's Brice's Ultra 
 Vires, 437 et seq., and notes.
 
 278 Pkivate CoBPOBA'noNs. 
 
 in his integrity, especially in matters pertaining to the office or 
 ao-ency, and peculiarly within the knowledge of the officer or 
 ao-ent, the corporation shall be responsible for any misrepresenta- 
 tion, negligence or fraud of such officer or agent, whereby a party 
 actino- in good faith with such officer or agent has sustained a loss. 
 This is sometimes placed upon the familiar maxim in equity that 
 where one of two innocent persons must suffer by the acts of an- 
 other, he who has enabled such person to occasion the loss must 
 sustain the damage caused thereby. Or, in other words, " he who 
 without intentional fraud has enabled any person to do an act, 
 which must be injurious to himself or to another party, shall 
 himself suffer the injury rather than the innocent party who has 
 placed confidence in him." ^ But mere general reputation with- 
 out proof of acts of charge and management in the office is held 
 to be inadmissible to show that the officer assuming to act is the 
 officer he claims to be.- What has been' said in reference to cash- 
 iers of banks would, of course, be applicable to the treasurer of 
 a corporation for pecuniary emolument generally, and the general 
 principles and doctrine we have stated would also be equally ap- 
 plicable to all other officers of the corporation. 
 
 Sec. 174. Distinction betvreen executed and executory contracts in 
 case the agent exceeds his authority. — If the agent or corporation 
 wholly exceeds all authority conferred upon or existing in the cor- 
 poration, in entering into contracts with third parties, they are 
 ultra vires and usually void.^ 
 
 But this doctrine is limited to executory contracts. For 
 where the contract has been executed, and the corporation has 
 
 1 Story on Agency, p 127. See, also, 3 Hill, 262 ; Commercial Bank v. Kort- 
 
 1 Story on Eq. Jur., §§ 384-394 ; Fitz- right, 22 Wend. 348 ; Locke v. Stearns, 
 
 herbert v. Mather, 1 T. R. 12. Where 1 Mete. (Mass.) 560. 
 
 one of two innocent parties must suf- ^ Litchfield Iron Co. v. Bennett, 7 
 
 fer a loss, he should suffer it who by Cow. 234; Clark v. Benton Manuf. Co., 
 
 his own acts has occasioned the confl- 12 Wend. 218; Waite v. Mining Co., 
 
 dence and the loss. Neville v. Wilkin- 36 Vt. 18. If, however, a treasurer is 
 
 son, 1 Bro. Ch. 543; 3 P. Wms. 74 ; in the practice of accepting drafts, 
 
 Scott V. Scott, 1 Cos, .378; Evans v. with the knowledge and assent of the 
 
 Bicknell, 6 Ves. 173 ; Pearson v. Mor- directors, this is proof of his authority, 
 
 gan, 2 Bro. Ch. 388; Com. Dig., chap. Partridge v. Badger, 15 Barb. 146; 
 
 4 W. 28; Paley on Agency, by Lloyd, Mead v. Keeler, 24 id. 20; Williams v. 
 
 194, 200, 201 (3d ed.); Whitehead Cheeney, 3 Gray, 215 ; Lester v. Webb, 
 
 V. Tuckett, 15 East, 401; 3 Kent's 1 Allen, 34; Dougherty v. Hunter, 54 
 
 Com. 621 ; Guerreiro v. Peile, 3 B. & Penn. St. 380. 
 
 , Aid. 616 ; North River Bank v. Aymar, ^ See post, chap. 9.
 
 Officers and Agents Generally. 279 
 
 received the benefit of the same, it cannot usually avoid its obli- 
 gations incurred thereby, even though the agent entirely exceeded 
 the authority he possessed in making the contract. Thus, if one 
 assuming to act for a corporation, but without authority, em- 
 ploys another, and he renders service to it, with the knowledge of 
 the officers, especially such as would have authority to employ such 
 party, this would entitle the employed to recover of the corpora- 
 tion. But if the contract was merely entered into and not exe- 
 cuted, and the corporation refuses to execute the contract on its 
 part, it might successfully defend against any claims, on the 
 ground of a breach of contract on its part.^ But this question in- 
 volves the consideration of the doctrine of ultra vires, which we 
 propose to consider in a following chaptered 
 
 Corporations can usually be bound only by those contracts exe- 
 cuted by its agents that come within the scope of the agent's au- 
 thority, and do not exceed the powers of the corporation in refer- 
 ence to the contract. And it seldom happens that the corporation 
 confers all its powers upon an agent.' 
 
 Sec. 175. Limitations of power as to time.— The authority of a 
 corporate agent as to time may be limited in various ways. First, 
 if an officer, it would be limited to the time for which he was 
 appointed or elected, and his authority as an agent would cease 
 with the expiration of the term of his office.* Second, if the 
 agent is appointed for a special purpose, the authority of the 
 agent will cease when such special object is accomplished.^ 
 Third, it may be limited as to time by the very terms of the 
 appointment. Fourth, it may usually be terminated any time by 
 
 iPister V. La Rue, 15 Barb. 323; dridge. id. 83 ; Mount Sterling v . Loo 
 
 Parish v. Wheeler, 23 N. Y. 503; Tracy nay, 1 Mete. (Ky) 550 ; New Haven Co. 
 
 V. Talmage, 14 id. 163; De Groff v. v.Hayden.lO? Mass. 525; Essex T.Corp. 
 
 American Linen Thread Co., 31 id. 134 ; v, Collins, 8 id. 299; Washington Bank 
 
 Bissell V. Michigan, etc., R. Co., 23 id. v. Lewis, 22 Pick. 34 ; Hayward v. Pil- 
 
 258; White V. Franklin Bank, 33 Pick, grim Society, 21 id. 370; Steward v. 
 
 181 ; Gould V. Town of Oneonta, 3 Hun, Huntingdon Bank, 11 S. & R. 367; 
 
 401; Hazelhurst V. Savannah, etc., R. Stephenson v. New York R. Co., 3 
 
 Co., 43 Ga. 13 ; Southern Life Ins. Co. Duer, 341 ; Cos v. Midland R. Co., 3 
 
 V. Lanier, 5 Fla. 110. Exch. 368 ; Kelly v. Troy Ins. Co., 3 
 
 ^ See posf, chap. 9; Green's Brice's Wis. 354; Exchange Bank v. Mon- 
 
 TJltra Vires, 371 et seq., and notes. teath, 17 Barb. 171. 
 
 2 Mechanics' Bank v. Bank of Colum- ^ Curling v. Chalken, 3 M. & S. 510; 
 
 bia, 5 Wlieat. 337 ; Clark v. Washing- Peppin v. Cooper, 3 B. & Aid. 431. 
 
 ton, 13 id. 40; Bank of U. S. v. Dan- ^ Seton v. Slade, 7 Ves. 376.
 
 280 Private Corpokations. 
 
 the power which constituted the agent.' But where the authority 
 might be terminated in any of these ways, still if the agent con- 
 tinues to act, and the corporation continues to recognize his acts, 
 as such, or if the corporation still holds him out by any acts of 
 theirs as its agent, it would be estopped from denying the agency, 
 and, on general principles, would be held liable for his acts done in 
 the name of the company and within the scope of the original 
 authority.^ The doctrine of the law in reference to agents of nat- 
 ural persons is, that the agency is terminated by the death of the 
 principal. We have shown that the doctrine of the immortality of 
 corporations is not literally correct, for although they have the prop- 
 erty of perpetual succession, the life of the artificial person may 
 be terminated in various ways, and if terminated by any means, 
 the same consequences would result in respect to its agents as 
 though it were a natural person.' But, where an agent receives 
 his appointment from the board of directors, or other officers, or 
 general or special managers of the corporation, the expiration of 
 their office, or their removal for any cause, would not, jper se, 
 result in a termination of the agency. For, " though the power 
 of appointing a particular officer or agent of a corporation be 
 vested in a body, as the directors, managers, etc., existing within 
 it, it does not follow that the authority of the agent is determined 
 by the removal of the board which appointed him ; or that be- 
 cause they are appointed but for a year, his agency expires with 
 that period." Thus, where a letter of attorney was given by the 
 directors of a bank, it was held that the attorney might execute 
 his power under it, after the term for which the directors were 
 appointed had expired, since the constituent, to-wit, the corj)ora- 
 tion, still continued in existence.* And where the charter of a 
 bank empowered the directors for the time being to appoint a 
 cashier, and such other officers and servants under them as should 
 be necessary for executing the business of the corporation, it was 
 decided by the supreme court of Maryland, that the office and 
 
 1 Story on Agency, § 463 et seq. ■* Anderson v. Longden, 1 Wheat. 85; 
 
 * Northern Cent. R. Co. v. Bastian, Bown v. County of Somerset, 11 Mass. 
 
 15 Md. 494. See, also, Clark v. Pratt, 221 ; Northampton Bank v. Pepoon, 3 
 
 47 Me. 55; Ang. & Am. on Corp., Pick. 288; Dedham Bank v. Chicker- 
 
 §283. ing, id. 385. 
 
 3 Union Bank v. Ridgely, 1 H. & Q. ^ Id. 
 333 ; Ang. & Am. on Corp., § 289.
 
 Officers and Agents Generally. 281 
 
 power of the cashier did not cease with the office and power of 
 the directors who appointed him, nor was of annual duration only 
 because theirs was ; but that the duration of the cashier's office 
 was limited only by the duration of the charter of the bank, sub- 
 ject always to be terminated by the directors as occasion might re- 
 quire.^ The mere fact that an agent is, in some respects, the 
 deputy of the annual officers by no means proves that he is an 
 annual officer himself ; for it may be that his appointment was 
 made to remedy the inconvenience of annual officers and the 
 deficiency of service which may result from the casual interrup- 
 tion of an annual election." " 
 
 Sec. 176. Mode of executing contracts by agents. — It may be stated 
 as a universally recognized doctrine, that where the organic or 
 constating acts or instruments of a corporation provide in what 
 manner contracts in its behalf shall be executed, such require- 
 ments must be pursued, and all persons dealing or contracting 
 with such corporation would be required to take notice of such 
 provisions, otherwise the acts of agents or of the corporation 
 would be ultra vires and void,^ But in England it has been held 
 that, when the deed of settlement of a joint-stock company re- 
 quired the directors to use certain formalities in the transfer of 
 shares, but which for the period of ten years had been disregarded, 
 the corporation, after so long and universal a disregard of their 
 deed, could not set up a want of such formality to the prejudice 
 of third parties.^ This doctrine has also been recognized by the 
 supreme court of the United States, Campbell, J., observing : 
 " This principle does not impugn the doctrine that a corporation 
 cannot vary from the act of its creation, and that persons dealing 
 with a company must take "notice of whatever is contained in the 
 law of its organization. * * * But the principle includes 
 those cases in which a corporation acts within the range of its 
 general authority, but fails to comply with some formality or 
 regulation which it should not have neglected, but which it has 
 
 1 Union Bank v. Ridgely, 1 H. & Gf. - Curling v. Chalklen, 3 M. & S. 509. 
 
 431 ; Exeter Bank v. Rogers, 7 N. H. MVilliams v. Chester R. Co., 5 Eng. 
 
 38 ; Thompson v. Young, 2 Ohio, 334; L. & Eq. 497. 
 
 Dedham Bank v. Chickering, 3 Pick. ■* Bargate v. Shortridge, 5 H. L. C. 
 
 835. 297. 
 
 36
 
 282 Private Corporations. 
 
 chosen to disregard." ' But the contracts of corporations need 
 not necessarily be under seal ; * and it is not essential that the ap- 
 pointment of the agent be under the common seal, or even evi- 
 denced by a recorded vote, but may be inferred from circumstan- 
 ces, such as the adoption and recognition of the agent' s acts.^ 
 
 Sec. 177. How contracts by, should be executed. — In the execu- 
 tion of a contract of the corporation by an agent, the proper 
 way is to sign the corporate name to the instrument and the 
 name of the agent acting for it, and to seal it with the cor- 
 porate seal. It should appear on the face of the instrument 
 that the contract is the contract of the corporation and not 
 the personal act and contract of the agent. He should execute 
 the instrument, so as in form to bind the principal; and it 
 should show that the principal is intendjed to be bound by its 
 provisions and not the party who acts for him. For it has been 
 said, " that no person in making a contract is considered the agent 
 of another, unless he stipulates for his principal by name, stat- 
 ing his agency in the instrument which he signs. This principle 
 has been long settled, and has been frequently recognized, nor do 
 I know of an instance in the books of an attempt to charge a per- 
 son as the maker of any written contract, appearing to be signed 
 by another, unless the signer professed to act by procuration or 
 authority, and stated the name of the principal on whose behalf 
 he gave his signature. It is also held that whatever authority the 
 signer may have to bind another, if he does not sign as agent or 
 attorney he binds himself and no other person."* But this 
 doctrine has undoubtedly been much relaxed in modern times, 
 and even less formalities in the execution of instruments by agents 
 would undoubtedly serve to bind the principal, especially in the 
 various common contracts into which corporations may enter by 
 
 ' Zabriskie v. Cleveland, etc., R. Co., phia, 31 Penn. St. 175 ; Clark v. Wasb- 
 
 23 How. (U. S.) 381. See, also, Amey ington, 12 Wbeat. 40. 
 
 V. Allegheny City, 24 id. 864; Connec- "* Parker, J., in Stackpole v. Arnold, 
 
 ticut Ins. Co. V. Cleveland, 41 Barb. 9. 11 Mass. 27. See, also, Bradlee v. Bos- 
 
 2 See post, chap. 10. ton Glass Man., 16 Pick. 347 ; Alfrid- 
 
 3 Dill, on Corp., § 374; Story on sou v. Ladd. 12 Mass. 173; Savage v. 
 Agency, § 52 ; Fanning v. Gregorie, 16 Rice, 9 N. H. 263 ; Rice v. Gove, 22 id. 
 How. (U. S.)524; Abby v. Billups, 35 158; Minard v. Mead. 7 Wend. 68; 
 Miss. 618 ; Allton v. Mulledy, 21 HI. Pentz v. Stanton, 10 id. 271 ; Spencer 
 76 ; Western, etc., Society v.Philadel- v. Field, id. 87.
 
 Officers and Agents Generally. 
 
 283 
 
 its agents.* But whatever modification of the former rule there 
 may have been, it is evident that in the execution of a written 
 instrument the name of the party intended to be bound should 
 appear, and that when an agent executes an instrument he should 
 do it in the name of the party for whom he acts. But if from 
 the whole instrument it appears that the true object and intent is 
 to bind the principal and not the agent, or where the purpose to 
 act for the corporation is manifest from the whole paper, and 
 where it does not appear from it that there is an intention to 
 assume a personal responsibility on the part of the agent, the 
 corporation and not the agent will be bound thereby, even though 
 the agent only signs his own name and affixes his own seal." 
 
 ' See Higgins v . Senior, 8 M . & W . 
 834 ; Taintor v. Pendergrast, 3 Hill, 
 72 ; New England Ins. Co. v. De Wolf, 
 8 Pick. 56 ; 2 Kent's Com. 631. 
 
 '^Regents, etc., v. Detroit, 12 Mich. 
 138; Sweetzer v. Mead, 5 id. 107; 
 Bank of Metropolis v. Guttschlick, 14 
 Pet. 19 ; Story on Agency, § 154. 
 
 In such cases, in furtherance of 
 the public policy of encouraging 
 trade, if it can upon the whole in- 
 strument be collected, that the true 
 object and intent of it are to bind 
 the principal and not to bind the 
 agent, courts of justice will adopt that 
 construction of it, however informally 
 it may be expressed. Thus, where an 
 agent, duly authorized, made a prom- 
 issory note thus: ' I promise J. S. or 
 order,' etc., and signed the note 'Pro. 
 C. D. A. B.,' it was held to be the note 
 of the principal and not of the agent, 
 although the words were, ' I promise,' 
 So wliere A. and B. wrote a note in 
 these words, ' VVe jointly and severally 
 promise,' and signed it A. and B. forC, 
 it was held to be the note of C, and 
 not of A. and B. the agents. Rice v. 
 Gove, 22 Pick. 158 ; Long v. Colburu, 
 11 Mass. 97. So, where the note was 
 ' I promise,' etc., and it was signed by 
 the agent ' For the Providence Hat 
 Manufacturing Company,' A. B.. the 
 agent ; it was held to be the note of the 
 company and not of the agent. Emer- 
 son V. Prov. Hat Manuf. Co., 12 Mass. 
 237. So, a promissory note of the like 
 tenor, signed by the agent in this man- 
 ner, ' A. B., agent for C. D.,' has been 
 held to be the note of the principal 
 
 and not of the agent. Ballou v. Tal- 
 bot, 16 Mass. 461 ; Dispatch Line of 
 Packets v. Bellamy Manuf. Co., 12 N. 
 H. 229. So, where a promissory note 
 was in these words, ' I, the subscriber, 
 treasurer of the Dorchester Turnpike 
 Corporation, for value received, prom- 
 ise,' etc. , and it was signed ' A. B., treas- 
 urer of the Dorchester Turnpike Cor- 
 poration,' it was held to be the note of 
 the corporation and not of the treas- 
 urer. Mann v. Chandler, 9 Mass. 835. 
 See Hills v. Bannister, 8 Cow. 32; 
 Barker v. Mechanics' Fire Ins. Co., 
 3 Wend. 94; Mott v. Hicks, 1 Cow. 
 513 ; Brock way v. Allen, 17 Wend. 
 40. So, where a note purported 
 to be a promise by ' the president 
 and directors' of a particular cor- 
 poration and was signed 'A. B., presi- 
 dent,' it was held to be the note not of 
 A. B., but of the corporation. Mott 
 V. Hicks, 1 Cow. 513. See, also. 
 Bo wen v. Morris, 2 Taunt. 374 ; Slielton 
 V. Darling, 2 Conn. 435 ; Brockway v. 
 Allen, 17 Wend. 40. But if the note had 
 been ' I, A. B., president of the corpora- 
 tion (naming it), promise to pay,' etc., 
 it would (it seems) have been deemed to 
 be the personal note of A. B., and not of 
 the corporation. Barker v. Mechanics' 
 Fire Ins. Co. , 3 Wend. 94. So, where 
 the agent of a corporation drew a bill 
 of exchange upon the president of tlie 
 corporation, styling him such, and the 
 latter accepted the bill, it was held 
 that he was not personally liable if he 
 had authority to accept the bill, but 
 the corporation was alone liable. Laza- 
 rus V. Shearer, 2 Ala. (N. S.) 718. So,
 
 284 
 
 Private Coeporations. 
 
 Thus where a contract was entered into " between a committee 
 appointed by the corporation of the city of Albany for that 
 purpose, of the* first part, and John R., Jr., of the second 
 part ; " and the parties of the first part agreed to pay for the 
 work to be done, and signed their individual names and affixed 
 their individual seals to the agreement, the authority of the com- 
 mittee to act for the corporation in the premises being conceded, 
 it was held that the members of such committee were not per- 
 sonally liable, and that the remedy for a breach of the contract 
 should be against the corporation.' So, where a bill of exchange 
 directed to " A. B., cashier of F. & M. Bank," was accepted by 
 the cashier as follows : "Accepted, A. B., cashier," by writing 
 across the face of the bill ; this was held to be the bill drawn 
 
 where the agents of a corporation, 
 being duly authorized, made a written 
 contract, as follows : ' We hereoy 
 agree to sell,' etc., and signed it as 
 agents of the corporation, it was held 
 that they were not personally bound 
 thereby, but the corporation was. 
 Mary v. Beekman Iron Co., 9 Paige, 
 188; Evans v. Wells, 23 Wend. 325. 
 * * * So, where, on a sale of real 
 property by a corporation, a memoran- 
 dum of the sale was signed by the par- 
 ties, on which it was stated that the 
 sale was made to A.B.,the purchaser, 
 and that he and C. D., ' mayor of the cor- 
 poration on behalf of himself and the 
 rest of the burgesses and commonalty 
 of the borough of Ceermathen, do 
 mutually agree to perform and fulfill, 
 on each of their parts respectively, the 
 conditions of sale,' and then came the 
 signature of the purchaser, and of ' C. 
 D., mayor,' it was held that the agree- 
 ment was that of the corporation and 
 not that of the mayor, personally ; and 
 that consequently the mayor could not 
 sue them. So, where in articles of 
 agreement the covenants were in the 
 name of a corporation without men- 
 tion of any agent, but the instrument 
 was signed by the president of the cor- 
 poration, by his private name, on be- 
 half of the corporation, and sealed 
 
 with his private seal, it was held that 
 he was not personally liable thereon. 
 Hopkins v. Mehaffey, 11 S. & R. 126. 
 On the other hand, unless some agency 
 is apparent on the face of the instru- 
 ment, it has been not unfrequently held 
 that the principal is not bound, al- 
 though the agent had full authority to 
 make the contract. Story on Agency, >5 
 147, note. Thus, where a wife had full 
 authority to sign notes for her husband, 
 and she made a note in her own name, 
 not referring to her husband, either in 
 the body of the note or in the signature, 
 it was held that the husband was not 
 bound. Minard v. Mead, 7 Wend. 68. 
 So, where A., B. and C. made a note as 
 follows : ' We, the subscribers, jointly 
 and severally promise to pay D. , or 
 order, for the Boston Glass Manufac- 
 tory, the sum of — ,' and signed the 
 note in their own names, without say- 
 ing ' as agents,' it was held that they 
 were personally bound and not the 
 corporation. Bradley v. The Boston 
 Glass Manufactory, 16 Pick. 347. 
 And where an agent drew a bill for 
 the purchase of goods on account of 
 his principal, and signed the bill A. 
 B., agent, but did not disclose the 
 name of his principal, he was held 
 personally bound by the bill as drawer. 
 Pentz v. Stanton, 10 Wend 271. 
 
 ' Randall v. Van Vechten, 19 Johns. 
 60. See, also, Dubois v. Canal Com- 
 pany, 4 Wend. 285 ; Worrall v. Munn, 
 5 N. Y. 229 ; Ford v. Williams, 13 id. 
 577; Richardson v. Scott, etc., Co., 22 
 
 Cal. 150. But this doctrine seems to 
 have been denied in Bank of Columbia 
 v. Patterson, 7 Cranch, 299. See, also, 
 Damon v. Granby, 2 Pick. 345.
 
 Officers and Agents Generally. 
 
 285 
 
 upon and accepted by the bank, and tlic bank liable thereon and 
 not the cashier personally.^ And where a note payable to an 
 insurance company was indorsed, " Without recourse, J. S., 
 secretary," it was held to pass the legal title to the indorsee.' 
 
 ' Farmers' Bank v. Troy City Bank, 
 1 Doug. (Mich.) 457. See, also, Water- 
 vliet Bank v. White, 1 Den. 608 ; Jen- 
 kins V. Morris, 16 M. & W. 880; Thomp- 
 son V. Tioga R. Co., 36 Barb. 79; Bird 
 V. Daggett, 97 Mass. 495. 
 
 -El well V. Dodge, 33 Barb. 336; 
 Scott V. Johnson, 5 Bosw. 213; Mer- 
 chants' Bank v. McColl, 6 id. 473; 
 Nicholas v. Oliver, 36 N. H. 218; Davis 
 V. Bank of Mobile, 12 Ala. 463; Alex- 
 ander V. Sizer, L. R., Ex. 102; Sharpe 
 V. Bellis, 61 Penn. St. 69; Mclntire v. 
 Preston. 10 111. 48. See, also, Nichols 
 V. Frothingham, 45 Me. 220; Bruce 
 V. Lord, 1 Hilt. 247; Wright v. Boyd, 
 3 Barb. 523; Atlantic Mut. Fire Ins. 
 Co. V. Young, 38 N. H. 451 ; Dispatch 
 Line, etc., v. Bellamy Manuf. Co., 12 
 id. 205. 
 
 A note signed with the addition of 
 " agent " of a certain corporation, al- 
 though its terms may be that of an 
 individual promise, may nevertheless 
 be treated as a note of the corporation, 
 if the agent had authority in fact to 
 execute it, or if its execution by him 
 was subsequently ratified. Bank v. 
 Biningsville Cotton Co., 11 Rich.(S.C.), 
 L. 95 ; Dispatch Line of Packets v. 
 Bellamy Manuf. Co., 12 N. H. 205. 
 Thus where an agent gave a note in 
 the body of which were the words " I 
 promise to pay," the signature being 
 "A., agent for the M. M. Company," 
 and it appeared in evidence that it was 
 in the constant habit of signing notes 
 in this manner, which the company 
 regularly paid, it was held that he was 
 not personally liable. When an agent 
 duly authorized subscribes an agree- 
 ment in such a maimer as to manifest 
 an intent not to bind himself, but the 
 principal, and when by his subscrip- 
 tion he has actually bound the princi- 
 pal, then the contract cannot be bind- 
 ing on him personally. No precise 
 form of words is required to be used 
 in the signature ; every word must 
 have an effect, if possible ; and the in- 
 tention must be collected from the 
 whole instrument taken together. 
 Hovey v. Magill, 2 Conn. 680. 
 
 A bill dated at the office of the cor- 
 
 poration, signed with the name of the 
 president, with the addition of his title 
 of office, abbreviated, and directing the 
 contents to be charged "to motive 
 power and account," — held, to be on 
 its face the bill of the corporation, and 
 not that of the signer individually. 
 Olcott V. Tioga R. R. Co., 27 N. Y. 546. 
 So where bills were drawn by an agent 
 of the corporation and accepted by the 
 president, in the name of H. G. & Co. 
 that being the style of the copartner- 
 ship, merely as a convenient mode 
 adopted by the corporation for raising 
 funds. Held, that the company was 
 liable upon them. Evidence that such 
 was the object of the mode of accept- 
 ance is admissible in such case. A 
 corporation is bound by the acts of its 
 authorized agent, although the agent 
 contracts in his own name, and does 
 not disclose his principal, if the credit 
 be not given exclusively to the agent. 
 Conro V. Port Henry Iron Co. , 12 Barb. 
 27. 
 
 A note in the terms "The O. M. 
 Co. promise to pay, etc.," signed " J. 
 H., trustee," imports an intention to 
 bind the company only ; and cannot be 
 enforced against the agent personally. 
 Shaver v. Ocean Mining Co., 21 Cal. 
 45. 
 
 Where the words of the note were, 
 " I promise," and it was signed with 
 the words /or the company prefixed to 
 the name of the agent, — held, that it 
 was the note of the company, and not 
 of the agent. Emerson v. Providence 
 Hat Co., 12 Mass. 237. But a note in 
 the words " I promise to pay, etc., 
 signed by an individual with his own 
 name, may be treated as a contract 
 binding him personally, notwithstand- 
 ing he adds to his signature a desig- 
 nation of a corporate office held by him, 
 — e. g. "trustee," or " president " of 
 
 the company. Such description 
 
 is treated as merely a description of 
 the person. Fiske v. Eldridge, 12 
 Gray, 474 ; Haverhill Mut. Fire Ins. 
 Co. V. Newhall, 1 Allen, 129 ; Walker 
 V. Bank of N. Y., 9 N. Y. 582; Morell 
 V. Codding, 4 Allen, 403.
 
 286 Private Corporations. 
 
 Seo, 178. It has even been held that in cases of doubt, as to the 
 intention of the parties to a written instrument, that it was per- 
 missible to admit parol evidence to show the facts and the inten- 
 tion of the parties ; as that the principal and not the agent should 
 be bound. Thus, where a check was signed by the cashier of a 
 bank without the addition of the word " cashier " to his name, 
 but dated at the bank and made payable to its teller, as it was 
 doubtful whether it was the private or the official act of the 
 cashier, it was lield proper to show this by parol evidence.^ 
 
 The general principles applicable in case of the agents of a cor- 
 poration are the same as in case of the agents of natural persons ; 
 and reference may be had to special treatises on agency for a 
 fuller illustration of the law relating to the sufficiency of the 
 execution of contracts by agents to bind the principal. 
 
 Sec. 179. ultra vires contracts by agents., — We have already al- 
 luded to the familiar principle of law that a corporation cannot 
 engage in any business, do any act, or enter into any contract not 
 embraced within the scope of the powers conferred upon it. And 
 it cannot, of course, confer upon its agents any authority or power 
 which it does not itself possess. This doctrine rests upon the 
 soundest principles ; as otherwise acts might be done and obliga- 
 tions incurred, not only prejudicial to private rights, but inimical 
 to the interests of the public. It follows, therefore, that con- 
 tracts made by the agents of a corporation, that are beyond the 
 powers of the corporation, and unauthorized by law, are usually 
 null and void, in whosesoever hands they may be.'' 
 
 * Mechanics' Bank v. Bank of Co- ^BuflFett v. Railroad Company, 40 N. 
 
 lumbia, 5 Wheat. 326 ; Olcott v. Tioga Y. 168 ; Griggs v. Foote, 14 Allen, 195 ; 
 
 R. Co., 27 N. Y. 559; Bank of Utica v. Pearce v. Railroad Company, 21 How. 
 
 Magher, 18 Johns. 341 ; Northampton 441 ; Miners' Ditch Company v. Zeller- 
 
 Bank v. Pepoon, 11 Mass. 288; Far- bach, 37 CaL 543; Marsh v. Fulton 
 
 mers' Bank v. Height, 3 Hill. 494 ; Mc- County, 10 Wall. 676; Thomas v. Rich- 
 
 Whorter v. Lewis, 4 Ala. 198; Cahill mond, 12 id. 349; Bridgeport v. Hous- 
 
 V. Kalamazoo Ins. Co., 2 Doug. (Mich.) atonic Railroad Company, 15 Conn. 475; 
 
 124 ; Merchants' Bank v. Central Bank, Martin v. Mayor, etc., 1 Hill, 545; Over- 
 
 1 Ga. 418 ; Ghent v. Adams, 2 id. seers v. Mayor, etc., 18 Johns. 382 ; 
 
 214 ; Mare v. Charles, 9 E. & B. 978; Donovan v. New York, 33 N. Y. 291 ; 
 
 34 Eng. L. & Eq. 138 ; DeWitt v. Wal- Seibrecht v. New Orleans, 12 La. Ann. 
 
 ton, 9 N. Y. 571 ; Hicks v. Hinde, 9 496 ; Clark v. Des Moines, 19 Iowa. 199 ; 
 
 Barb. 528 ; Babcock v. Beman, 11 N. Y. Loker v. Brookline, 13 Pick. 343; Phil- 
 
 200. adelphia v. Flanigen, 47 Penn. St. 21 ; 
 
 For a further consideration of per- Trustees v. Cherry, 8 Ohio St. 564 ; 
 
 eonal liability of the agent in such Hague v. Philadelphia, 48 Penn. St. 527; 
 
 cases, see post, % 210 et seq. Albany v. Cunliff, 2 Comst. 165 ; Cuyler
 
 Officers and Agents Generally. 287 
 
 But we shall hereafter consider the doctrine of idi/ra vires 
 more fully in a chapter on contracts.^ 
 
 Sec. 180. If, under the English corporation acts, the law of its 
 constitution or the constating instruments confer upon boards of 
 directors the authority of acting for the corporation, or of man- 
 aging its affairs, they still have no authority beyond that confer- 
 red upon the corporation, nor can they bind the corporation by 
 any contract beyond the powers conferred on the corporate body 
 which they represent as agents.^ And where the powers of mak- 
 ing by-laws is in the corporate body, they may thereby limit 
 the power of the directors ; and the exercise of powers by 
 them beyond the power thus conferred would also be ultra vires? 
 
 Sec. ISl. Parties dealing with an agent must take notice of his real or 
 apparent authority. — It is a fundamental principle of the law of 
 agency, that the principal is bound only by the authorized acts of 
 his agent. But this authority may be shown not only by a written 
 instrument conferring the authority, or by a verbal authority 
 where that is sufficient, but by the acts of the principal in holding 
 the agent out to the world as having authority to act in the par- 
 ticular matter.* Strangers, dealing with the agent of a corpora- 
 tion, are not bound to inquire what the corporation has in fact au- 
 thorized him to do, but may deal with him in reference to those 
 powers which it has held him out to the world as being possessed 
 of. In other words, in reference to his apparent authority.'^ The 
 
 V Rochester, 12 Wend. 165 ; Hodges Smead v. Railroad Company, 11 id. 104; 
 
 V, BuflFalo, 2 Denio, 110; Vincent v. Brady v. Mayor, 20 N. Y. 312 ; Appleby 
 
 Nantucket, 12 Cush. 103; Stetson v. v. Mayor, etc., 15 How. Pr. 428; Estep 
 
 Kempton, 13 Mass. 272 ; Parsons v. In- v. Keokuk County, 18 Iowa, 199 ; Clark 
 
 habitants of Goshen, 11 Pick. 396; v. Polk County, 19 id. 248. And the de- 
 
 Spaulding v. Lowell, 23 id. 71; Mitchell fense ultra vires may be made though 
 
 V. Rockland, 45 Me. 496; S. C, 41 id. the corporate seal is attached. Leav- 
 
 363 ; Commissioners v. Cox, 6 Ind. 403; enworth v. Rankin, 2 Kans. 358. 
 
 'Seeposi, chap. 9. *CoMSTOCK, J., in Mechanics' Bank 
 
 2 Fleckner v. United States Bank, 8 v. New York, etc., R. Co., 13 N. Y. 
 
 Wheat. 356; Ridgway v. Farmers' 632; Farmers & Mechanics' Bank v. 
 
 Bank, 12 S. & R. 265 ; Salem Bank v. Butchers & Drovers' Bank, 16 id. 125. 
 
 Gloucester Bank, 17 Mass. 29 ; Bank of » galem Bank v. Gloucester Bank, 17 
 
 Kentucky v. Schuylkill Bank, 1 Par- Mass. 1 ; Magill v. Kauffman,4 S. & R. 
 
 sons' Sel. Cas. 227. 318 ; City of Covington v. Covington, 
 
 ^ Id. See, also, Green's Brice's Ultra etc.. Bridge Co., 10 Bush. 69. 
 
 Vires, 607 et seq.
 
 288 Private Corpokations. 
 
 same rules in this respect apply to corporations, as apply in the 
 case of individuals, and a person who is clothed with authority to 
 do an act for them at all is treated as being clothed with authority 
 to bind them in respect to all matters within the scope of his real 
 or apparent authority.^ Thus where an agent had authority to 
 sign contracts of shipment, and his name was signed to a particu- 
 lar contract as such agent of the clerk in his office, the execution 
 of such contracts being a part of his duties, it was held that the 
 defendants were bound thereby.'' The maxim facit per alium, 
 facitjpei' se, applies with equal force to corporations, as to indi- 
 viduals, and the rule is not a doubtful one, either in policy or 
 principle, that in transactions where one of two persons must 
 sustain a loss, the loss must fall upon him who has made it possi- 
 ble for the other, innocently, to be placed in a position where loss 
 might result to him except for the application of tliis rule. It 
 would be disastrous to commercial, as well as other interests, if a 
 person, by acting through the agency of another, could shield 
 himself from liability for such person's acts, ad libitum. Fortu- 
 nately, no such rule exists, and he who intrusts authority to 
 another, in whatever department of business, is bound by all 
 that is done by his agent within the scope of his apparent 
 power, and cannot screen himself from the consequences thereof 
 upon the ground that no authority in fact was given him to do 
 the particular act, unless the act was clearly in excess of his 
 apparent authority, or was done under such circumstances as put 
 the person dealing with him, upon inquiry, as to the agent's real 
 authority ; and no exception to this rule exists in the law relating 
 to corporations. It is always a question of fact whether the act 
 was done under such circumstances that the person dealing with 
 the agent had a right to believe that he was clothed with authority 
 to do the particular act in question. 
 
 The rule may be said to be that, unless notice is given to third 
 persons, or circumstances exist which should put them on inquiry, 
 that in respect of certain matters within the scope of his apparent 
 authorit}'-, certain limitations are imposed upon the agent, his acts 
 within the scope of such authority shall be treated as the acts of 
 
 ■*Bodmev. Exchange F. Ins. Co., 51 N. Rowley v. Empire Ins Co., 36 N. Y 
 Y. 117 ; Newell v. Smith, 49 Vt. 255 ; 550. 
 
 ^ Newell V. Smith, ante.
 
 Oeticers and Agents Generally. 289 
 
 his principal, and not the acts of the person with whom he deals 
 as the representative of the principal, even though the policy 
 declares him the agent of the assured.' The question is not what 
 the powers of the agent in fact were, but what power did the 
 company hold him out as possessing." From the business with 
 which the agent was intrusted, had the person dealing with him 
 a right to understand that he had authority to do the particular 
 act, in reference to which the principal denies his authority ?^ 
 
 But the general doctrine in reference to corporate agents, whether 
 general or special, has been held to be that parties dealing with 
 them must take notice of such authority as is conferred upon them 
 by the charter, organic act, articles of association or other constat- 
 ing instruments, and perhaps the by-laws adopted by the corporate 
 body, in accordance with the organic or fundamental laws of its con- 
 stitution, for such laws are supposed to be public ; and all parties 
 dealing with corporate agents are presumed to have notice of the 
 same." In a recent case where this question was involved, Daniels, 
 J., said : " The president is, at most, the agent of the company, 
 created under a special legislative act defining tlie rights and privi- 
 leges of the body, and the manner in which they should be enjoyed. 
 Tliis the plaintiff is to be regarded as knowing. For all persons 
 deahng with the officers or agents of corporations are bound to 
 know that they act either under its charter or by-laws, or the usages 
 which may be shown to exist defining the extent of their author- 
 ity. They must, in doubtful cases, acquaint themselves with the 
 extent of that authority, or otherwise submit to the consequences 
 resulting from their omission to do that."^ In support of this 
 doctrine it is claimed that all persons may acquaint themselves 
 with the general status of incorporation, and with the articles of 
 
 ' Wood's Law of Fire Insurance, 644 ; * Adriance v. Roome, 52 Barb. 399; 
 
 Commercial Insurance Co. v. Ives, 56 Wild v. Bank of Passamaquoddy, 3 
 
 111. 403 ; Columbia Ins. Co. v. Cooper, Mas. (U. S. C. C.) 505 ; State v. Com- 
 
 50 Penn. St. 331 ; Union Mut. Ins. Co. mercial Bank, 6 S. & M. 218. 
 
 V. Wilkinson, 13 Wall. 222. »Ilisley v. Ind., etc.,R. Co., 1 Hun, 
 
 -Eclectic Life Ins. Co. v. Fahren- 202. See, also, North River Bank v. 
 
 krug, 68 111. 463. Aymar, 3 Hill, 263; Mechanics' Bank 
 
 »^tna Ins. Co. v. Maguire, 51 111. v. New York, etc., R. Co., 13 N. Y. 
 
 342 ; Washington F. Ins. Co. v. David- 599 ; McCullough v. Moss, 5 Denio, 
 
 son, 30 Md. 91 ; Home Life Ins. Co. v. 567 ; Adriance v. Roome, 52 Barb. 399; 
 
 Pierce, 5 Ins. L. J. 290(111.; ; Farmers', Dabney v. Stevens, 40 How. Pr. 341 ; 
 
 etc., Ins. Co. v. Cheshunt, 50 111. Ill ; Salem Bank v. Gloucester, 17 Mass. 1 ; 
 
 Franklin F. Ins. Co. v. Murray, 73 Lowell Savings Bank v. Winchester, 
 
 Penn. St. 13. 8 Allen, 109. 
 
 37
 
 290 Private Corporations. 
 
 association, or other instruments by which parties may associate 
 and become incorporated under general statutes ; that if they fail 
 to acquaint themselves with them, and the authority of the cor- 
 porate agents provided for by such acts, articles or constating 
 instruments, it is their own fault ; and if they give credit to any 
 person not thereby authorized to act in reference to the particular 
 matter, they must be content to look to the agent only, and can- 
 not look to the company whom they represent.' Even a stranger 
 who deals with a corporate agent is bound to take notice of such 
 limitations of this authority as are contained in the organic or 
 constating laws or instruments of the body corporate. 
 
 Sec. 182. Delegation of authority by agents. — In the extended 
 and frequently complicated character of the business of many of 
 our various modern corporations for pecuniary gain, it must almost 
 necessarily follow that authority is conferred upon various officers 
 and agents, expressly or impliedly, to employ other agents and 
 sub-agents. The objects of corporations would seldom be attained 
 unless this power existed ; and in a majority of cases it rests upon 
 impKcation from the powers conferred on a class of agents, or a 
 particular agent of large powers and authority. We have already 
 briefly alluded to this subject in treating of directors.^ But a 
 furtlier consideration of it seems to be proper in this connection. 
 It may be said that the 'power to delegate authority may be 
 expressly provided for in the original appointment of the agent ; ' 
 but in the various and complicated affairs of moneyed corpora- 
 tions this seldom occurs, and the right is usually, perhaps, left to 
 be inferred from the nature and character of the agency. 
 
 Mr. Story, after affirming the general doctrine alluded to, 
 observes : " But there are cases in which the authority may be 
 implied, as when it is indispensable by the laws, in order to accom- 
 plish the end ; or it is the ordinary custom of trade ; or it is under- 
 stood by the parties to be the mode in which the particular busi- 
 ness would or might be done.* Thus, if a person should order 
 
 ' Earnest v. Nicholls, 6 H. L. 419 ; seg.; 1 Bell's Com. 387 et seq.; Shipley 
 
 Smith V. Hull Glass Co., 11 C. B. 936. v. Kymer, 1 M. & S. 484 ; Cockran v. 
 
 * See ante, chap. 6. Irlam, 2 M. & S. 301 ; Laussatt v. Lip- 
 
 3 1 Liv. on Agency, 54 et seq.; Com- pincott, 6 S. & R. 386 ; Johnson v. Cun- 
 mercial Bank v. Norton, 1 Hill, 505. ningham, 1 Ala. (N. S.) 249. 
 
 4 Coles V, Trecoothick, 9 Ves 234 et
 
 Officers and Agents Generally. 291 
 
 his goods to be sold by an agent at public auction, and the sale could 
 only be made by a licensed auctioneer, the authority to substitute 
 him in the agency, so far as the sale is concerned, would be 
 implied.' So where, by the custom of trade, a ship broker, or 
 other agent, is usually employed to procure a freight or charter- 
 party for ships, seeking a freight, the master of such a ship, who is 
 authorized to let the ship on freight, will incidentally have the 
 authority to employ a broker, or agent for the owner, for this pur- 
 pose. And the same principle will apply to a factor, where he is, 
 by the usage of trade, authorized to delegate to another the author- 
 ity to substitute another person to dispose of the property.'' In 
 short, the true doctrine, which is to be deduced from the decisions, 
 is (and it is entirely coincident with the dictates of natural justice), 
 that the authority is exclusively personal, unless from the lan- 
 guage used, or from the fair presumptions growing out of the 
 particular transaction, or of the usage of trade, a broader power 
 was intended to be conferred on the agent." " 
 
 ' Sec. 183. Same continued This doctrine of implied authority, 
 
 from the nature and character of the agency, is peculiarly ap- 
 plicable to corporate agents. For, as corporations can only act 
 by and through agents, it frequently occurs that some one must 
 be appointed a general agent, by the corporate body or by the 
 directors, to superintend a variety of matters, such as the superin- 
 tendents of various mattei's connected with the operations of rail- 
 roads and other corporations. And such appointment necessarily 
 contemplates the appointment of sub-agents. It necessarily fol- 
 lows in such cases, t^at they have implied authority to appoint 
 sub-agents for various purposes, and to remove the same at their 
 will, and these sub-agents may in turn be authorized by express 
 authority, or the requirements of the employment or business, to 
 employ other agents. The appointment in all these cases, if not 
 directly authorized by the corporate body or board of directors, 
 
 ' Laussatt v. Lippincott, 6 S. & R. ' Story on Agency, g 14. See, also, 
 
 386. 1 Bell's Com. 388, 482; Ersk. Inst., B. 
 
 2 Cockran v. Irlam, 2 M. & S. 301 ; 3, tit. 3, § 34 ; 2 Kent's Com. 633 (4th 
 
 Goswill V. Dankley, 1 Str. 680 ; Brom- ed.) ; 1 Domat, B. 1, tit. 16, ii 3 of art. 
 
 ley V. Coxwell, 2 B. & P. 438 ; Gray v. 2. 3 ; Cockran v. Irlam, 2 M.'& S. 301 ; 
 
 Murray, 3 Johns. Ch. 167; Story on Catlin v. Bell, 4 Camp. 183. 
 Agency, i^ 110.
 
 292 Private Corpoeations. 
 
 nor clearly to be inferred from the nature and character of the 
 duties, business, or objects of the corporation, is at least generally 
 ratified by the acts and conduct of the principal, in some manner, 
 so as to make the appointment equally as valid for all purposes 
 as though the authority originally emanated from the principal. 
 We have already considered the implied authority of an agent, 
 and the subject of ratification by the principal, in discussing the 
 subject of directors. 
 
 Sec. 184. Powers expressly conferred by law.— We have already 
 alluded to the powers expressly conferred upon ofiicers and agents 
 by statute or by the fundamental law. In such cases they may 
 exercise these powers unrestrained by the will of even the corpo- 
 rate body. The doctrine of authority to act within the scope of 
 the authority is here as applicable as ,where the appointment 
 comes from the corporate body or other appointing power. But 
 we have noticed the general principles applicable in such cases, 
 as well as the doctrine of implied powers, and a further considera- 
 tion of them in this connection is thereby rendered unnecessary. 
 
 But no authority can be conferred in excess of that possessed 
 by the corporate body, as such authority would be ultra vires, 
 and any contract made by them in excess of such powers would be 
 ultra vires and void. 
 
 Sec . 185. Ratification of acts of agents The doctrine of ratifica- 
 tion as applied to agency is that whereby the principal with full 
 knowledge of the agent's acts, doings or omissions, approves and 
 indorses the same, whereby he becomes bound by them, as though 
 express authority had been originally conferred upon such agent 
 in relation to the matters.' The general maxim is : Omnis 
 ratihabitio retrotrahitur, et Tnandato, priori, equiparatur. Thus, 
 if a contract is made by an agent acting for his principal, but with- 
 out authority, but is subsequently ratified by the principal, this 
 renders it valid so as to confer upon the other contracting party 
 the same rights and remedies as if the authority therefor had orig- 
 inally been conferred upon the agent.'' This ratification may be 
 
 ' Story on Agency, S§ 239, 445. Cain, 7 Ala. 806 ; Taylor v. Robinson, 
 
 2 Smith's Merc. L. 60; id. 108 (2d 14 Cal. 396; McCracken v. San Fran- 
 
 ed.); Story on Agency, § 445 ; Cook v. cisco, 16 id. 591. 
 
 Tullis, 18 Wall. 332; Wood v. Mc-
 
 Officers and Agents Generally. 293 
 
 made in various ways. It is not essential tliat there be a posi- 
 tive and direct adoption of the acts, but such ratification may be 
 inferred from the acts of tlie principal, and from the facts and 
 circumstances of the case. If there is an express ratification or 
 assent to an unauthorized act of an agent, there is no question of 
 the application of the doctrine, and a contract made by such un- 
 authorized agent thus ratified becomes obligatory on the part of 
 the corporation as well as the other j^arty." But in most cases of 
 this character the ratification becomes a matter of inference or im- 
 plication from the acts and conduct of the principal.' And slight 
 circumstances will sometimes be sufiicient to warrant the conclu- 
 sion of a ratification by the principal.^ Thus, if the principal, 
 when informed of a purchase by his agent in the name of 
 the principal, merely complains of the manner in which the 
 authority has been exercised, but does not deny the authority ; * 
 or if an agent exceeds his authority in the purchase of goods, but 
 the principal, with knowledge of the facts, receives the goods as 
 his own Avithout objection ; ^ or if an agent sells goods contrary to 
 his instructions, but the principal afterward receives the proceeds 
 witn knowledge of the facts ; and generally, where the principal 
 receives the fruits of what has been acquired by the wrongful act 
 of an agent, and does not restore it on being informed of the facts," 
 
 » Wilson V. Tumman, 6 M. & G. 336; 11 Mass. 98. The rule is that, when 
 
 Blood V. Goodrich, 9 Wend. 68; S. C, an a^ent does an act for the use of his 
 
 13 id. 565; Harford v. M'Nair, 9 id. 57; principal and the principal enjoys the 
 
 Chitty on Com. and Man. 179; 1 Liv. benefits and fruit of the act, he is es- 
 
 on Agency, 45 ; Story on Agency, topped from afterward saying that 
 
 §353. the act is illegal. Law v. Conn. R. 
 
 2 Terril V. Flower, 6 Mart. (La.) 584; R. Co., 46 N. H. 384; Ruggles v. 
 
 Loraine v. Cartwright, 3 Wash. (C. C.) Washington County, 3 Mo. 496 ; Raid 
 
 151; Story on Agency, § 353. v. Hibbard, 6 Wis. 175 ; Farmers', etc., 
 
 ^Paley on Agency, by Lloyd, 171 ; Bank v. Sherman, G Bosw. 181 ; Nar- 
 
 Conn. V. Penn., 1 Peters (C. C.), 496 ; ragansett Bank v. Atlantic Co., 3 Mete. 
 
 Richmond Man. Co. v. Starks, 4 Mason, (Mass.) 383, as where a person brings 
 
 396; Bank of Columbia v. Patterson, a suit based on the acts of a party 
 
 7 Cranch, 399 ; Rogers v. Kneeland, claiming to have acted as his agent, 
 
 13 Wend. 114. the bringing of such action is a rati- 
 
 * Johnson v. Jones, 4 Barb. 369. fication of the authority of the agent. 
 
 ^Odiorne v. Maxcy, 13 Mass. 178; Dodge v. Lambert, 3 Bosw. 570 ; S. P., 
 
 Clark V. Van Reimsdyk, 9 Cranch, Hamp.shire v. Franklin, 16 Mass. 76 ; 
 
 153. Sutton V. Cole, 3 Pick. (Mass.) 333; 
 
 « Willinks v. Hollingsworth, 6 Folger v. Mitchell, id. 396 ; Bank of 
 
 Wheat. 341 ; Forrestier v. Bordman, 1 Augusta v. Conrey, 38 Miss. 667 ; Wal- 
 
 Story, 43; Palmerton v. Huxford, 4 ker v Mobile, etc, R. R. Co., 34 id. 
 
 Denio, 166. See, also, Fenn v. Har- 345; Ham v. Boody, 30 N. H. 411 ; 
 
 rison, 4 T. R. 177 ; Long v, Colburn, Corser v. Paul, 41 id. 34 ; Bank of Be-
 
 294: Private Corpokations. 
 
 in these and similar cases the conduct of the principal would be 
 considered as an indorsement and ratification of the agent's acts. 
 It would be the duty of the principal in such cases to restore the 
 fruit of the unauthorized contract, as soon at least as the facts 
 came to his knowledge, and as far as possible place the other party 
 in staifd quo, otherwise he would be held liable on the contract. 
 
 Sec. 186. The doctrine of ratification applicable to corporations. — 
 This doctrine is peculiarly applicable to corporations for pecuni- 
 ary profit, and serves a valuable purpose in securing the ends of 
 justice. We have already seen that the authority of agents of 
 corporations may exist by the fundamental law of the institution, 
 by the action of the corporate body or board of directors, by im- 
 plication from the acts of the corporation, or be inferred from the 
 otfice of the agent who assumes to act. In the case of private 
 joint-stock corporations for pecuniary pro'fit they usually require 
 many agents and sub-agents. The appointment of these agents 
 may be inferred, not only where there is no appointment under 
 the corporate seal, but even where there is no actual record of 
 their appointment. These, in their turn, may be authorized to 
 appoint sub-agents, to make contracts in the name of the corpora- 
 tion. Proof of the authority to act may be diflicult or impossible, 
 except as it may be inferred from the acts of the body. If a sub- 
 agent is employed, and his acts are recognized by the company, or 
 if they receive the benefit of his contracts, knowing the facts, 
 this, as we have seen, would be a ratification of the agency ; and 
 if it takes the benefit of a contract made by such an agent, it 
 must take the same as made, with its disadvantages as well as ben- 
 
 loit V. Beale, 34 N. Y. 473; Franklin 12 Ga. 205; Mapp v. Phillips, 32 id. 
 
 V. Ezell. 1 Sneed (Tenn.), 497. Where 72 ; Mathews v. Hamilton, 23 111. 470 ; 
 
 a sale ia made of land, no one will be Tidrick v. Rice, 13 Iowa, 214; Dodge 
 
 permitted to receive both the money v. McDonnell, 14 Wis. 553 ; Fletcher 
 
 and the land ; and hence where one re- v. Dysart, 9 B. Monr. (Ky.) 413 ; Dick- 
 
 ceives the proceeds of the sale of land, inson v. Conway, 12 Allen (Mass.), 487 ; 
 
 this is an affirmation that his title has Coombs v. Scott, id. 493 ; Woodbury 
 
 passed to the purchaser, by virtue of v. Larned, 5 Minn. 339; Humphreys 
 
 the sale. Warden v. Eichbaum, 3 v. Havens, 12 id. 298 ; Seymour v. 
 
 Grant's Cas. 42. But the ratification of Wyckoif, 10 N. Y. (6 Seld.) 213 ; Brass 
 
 the acts of an unauthorized agent will v. Worth, 40 Barb. 648; Roach v. 
 
 not bind the principal, unless at the Coe, 1 E. D. Smith, 175 ; Pittsburgh, 
 
 time of ratification he was fully aware etc., R. B C'o. v. Gazzam, 32 Penn. 
 
 of all the circumstances. O wings v. St. 340. 
 Hall, 9 Pet. 607; Hardeman v. Ford,
 
 Officers and Agents Generally. 
 
 295 
 
 efits to them, and they could not, under such circumstances, claim 
 any benefit from portions of it in their favor, and reject it as to 
 those matters imposing obligations upon it. It must accept the 
 contract in toto, or not at all.^ 
 
 Sec. 187. Same continued. — The general doctrine we have re- 
 ferred to is illustrated by a recent case, where the directors of a 
 railroad company allowed its president to purchase locomotives 
 and to operate the road with them, and generally to manage the 
 affairs of the corporation in his discretion and without interfer- 
 ence, but afterward resumed the management of the road them- 
 selves. This was held a sufficient ratification of the president's 
 acts as to fiu-nish evidence of the president's original authority to 
 bind the corporation for the payment of bills issued by the pres- 
 ident in payment of the locomotives.^ And it is a generally 
 recognized principle of the law of agency that where the principal 
 neglects promptly to disavow the act of agency in case the agent 
 
 > See Moss v. Averell, 10 N. T. 449 ; 
 Church V. Sterling, 16 Conn. 388 ; Chi- 
 cago Building Soc. v. Crowell, Go 111. 
 453. In Mayor v. Ray, 19 Wall. 468, 
 Hunt, J., said : " Itis a general rule ap- 
 plicable to all persons and corporations, 
 and is a dictate of plain honesty, that 
 whoever, knowing the facts of the case, 
 retains and uses money received by an 
 agent for his account, cannot repudi- 
 ate the contract on which it is re- 
 ceived." See, also. Story on Agency, 
 § 239 et seq.; 1 Lind. on Part. (;3d ed.) 
 278, 805 ; Downing v. Mt. Washington 
 R. Co., 40 N. H. 230. In Al- 
 legheny City v. McClurkan, 14 Penn. 
 St. 81, Coulter, J., observes: "I 
 take it for granted that it (the char- 
 ter of the corporation) contains no 
 express authority to the corporation 
 to issue such notes as those embraced 
 in this action. But it does not follow 
 that the corporators are therefore not 
 answerable for them in their corporate 
 capacity. They have received value 
 for them in their various public works 
 and improvements erected and made 
 in the city through their instrumen- 
 tality, and it hardly comports well 
 with fair dealing that they should seek 
 to exonerate themselves from a debt 
 on this account, contracted bv and 
 
 through their accredited agents and 
 with their silent acquiescence." 
 
 ^Olcott V. Tioga R. Co., 27 N. Y. 
 546. See, also, Cushman v. Loker, 3 
 Mass. 106; Episcopal Charity Soc. v. 
 Episcopal Church, 1 Pick. 372. And 
 long acquiescence will amount to a pre- 
 sumption where it cannot otherwise 
 be accounted for. Courcier v. Ritter, 
 4 Wash. (C. C.) 549 ; Erick v. Johnson, 
 6 Mass. 193 ; Amory v. Hamilton, 17 
 id. 103 ; Towle v. Stevenson, 1 Johns. 
 Cas. 110 ; Pitts v. Shubert, 11 La. 
 288 ; Kingston v. Kincaid, 1 Wash. 
 (C. C.) 455. 
 
 If the agency actually exists the ac- 
 quiescence may well raise the pre- 
 sumption of a ratification. Courcier 
 V. Ritter, 4 Wash. (C. C.) 549; Amory 
 v. Hamilton, 17 Mass. 103 ; Erick v. 
 Johnson, 6 id. 193 ; Fitzsimmons v. 
 Joslin, 21 Vt. 129 ; Johnson v. Jones, 
 4 Barb. 369 ; Pickett v. Pearsons, 17 
 Vt. 470 ; Salem Bank v. Gloucester, 17 
 Mass. 1 ; Payson v. Stoever, 2 Dill. 427. 
 
 But where a director sells land to 
 himself, a majority of a corporation 
 cannot ratify the transaction so as to 
 bind a minority. Cumberland Coal 
 Co. v. Sherman, 30 Barb. 553. See, 
 also, Martin v. Zellerbach. 38 Cal. 
 300.
 
 296 Private Coepoeations. 
 
 has transcended his authority, he makes it his own act, and this 
 doctrine is as applicable to corporations as to natural persons.' 
 
 So it has been held that where the president of a railroad 
 openly establishes and advertises tariffs for fare and freight on 
 the road, and the company receives and appropriates the tolls thus 
 received without objection, this amounts to a ratification.^ 
 
 Sec. 188. Personal liability of agents, — It maybe affirmed as a 
 well-settled proposition of law, that persons, acting on behalf of 
 others, must act, and give the parties with whom they are deal- 
 ing to understand that they are acting as agents for another, or 
 they will be liable as principals.^ This rule is also as applicable 
 to corporations as to private persons.* In regard to all written 
 contracts made by agents of corporations, unless the contract in 
 form binds the corporation, there is a personal liability of the 
 agent. ^ " The difficulty is not in ascertaining the general princi- 
 ples which must govern cases of this nature, but in applying them 
 to the different forms and shades of expression in particular 
 instruments. In order to exempt an agent from liability upon 
 an instrument executed by him within the scope of the agency, 
 he must not only name his principal, but he must express by 
 some form of words that the writing is the act of the principal, 
 though done by the hand of the agent. If he does this the 
 principal is bound and the agent is not." ° 
 
 ' Kelsey V. National Bank, 69 Penn. Pumpelly v. Plielps, 40 N. Y. 59 ; Lee 
 
 St. 426; Bredin v. Dubarry, 14 S. & R. v. M. E. Churcli, 53 Barb. 116 ; Dean 
 
 30; Gordon v. Preston, 1 Watts, 387. v. Roesler, 1 Hilt. 420. 
 
 ^Hilliard v.Goold, 34 N. H. 230; « See Gray, J., in Tucker Manuf. Co. 
 
 Pennsylvania, etc., R. Co. v. Daudridge, v. Fairbanks, 98 Mass. 101. See, also, 
 
 8 G. & J. 248. Dutton v. Marsh, L. R., 6 Q. B. 361 ; 
 
 But a principal cannot ratify acts Lindus v. Melrose, 3 H. & N. 177; 27 
 
 which do not come within the powers L. J. Ex. 336 ; Alexander v. Sizer, L. 
 
 possessed by the corporation. R.,4 Ex. 102; Carpenter v. Farusworth, 
 
 2 Thompson V. Davenport, 2 Smith's 106 Mass. 561 ; Nichols v. Frothing- 
 
 Leading Cases (7th Am. ed.),358; Story ham, 45 Me. 220; Nicholas v. Oliver, 
 
 on Agency, § 266; Green's Brice's 36 N. H. 218; Slawson v. Loring, 5 
 
 Ultra Vires, 630. Allen, 340 ; Draper v. Massachusetts, 
 
 4 Paice V. Walker, L. R., 5 Ex. 173; etc., Co. , id. 338 ; Sharpe v. Bellis, 61 
 Kay v. Johnson, 2 H. & M. 118 ; Bar- Penn. St. 69; Means v. Swormstedt, 32 
 ker V. Allen,5H.&N. 61; 29 L. J. Ex. Ind. 87. But in Sherman v. N. Y. 
 100 ; Haddon V. Ayers, 1 E. & E. 118 ; Cent. R. Co., 22 Barb. 239, the contract 
 Hallett V. Dowdall, 18 Q. B. 2 ; 21 L. was so drawn as to bind neither the 
 J. Q. B. 98 ; Story on Agency, § 147. principal nor agent. 
 
 5 Seaver v. Coburn, 10 Cush. 324;
 
 Officers and Agents Generally. 297 
 
 Sec. 180. Forms of executing power by agents. — It is difficult to 
 furnish any general rule as to what is requisite in the form of an 
 instrument to bind the principal and when for the want of suffi- 
 cient form and substance in the contract to bind the principal the 
 agent is personally liable. But in such cases the general rule i.s, 
 that if the principal is bound, the agent is not, and if the agent is 
 bound, the principal is not.^ Where the name of the principal 
 appears in the body of the instrument, and to the signature of the 
 party acting there is annexed the word " agent," this would be 
 clearly the instrument of the principal, and bind him, and not 
 the agent. And it has been held that even the name of the cor- 
 poration printed upon the margin of the instrument, though it 
 did not appear in the body of the same, was sufficient.* So, it 
 was held where a note was made payable to one as an officer, as 
 for instance, to " A. B., treasurer," and he indorsed it in the same 
 way, this created no personal liability.' So, it is held that a 
 bill drawn to "A. B., cashier," is a bill payable to the bank of 
 which he is cashier, and that an indorsement in the same form is 
 an official indorsement, and does not make him personally liable. 
 In such a case in New York, Wright, J., observes : " Had there 
 been nothing in the case to connect the bill with the defendant's 
 bank, the cashier would have been regarded as the payee and in- 
 dorser individually, and the abbreviation ■ affixed to his name 
 would have been regarded as descripUo 2>&fsorue j but when his 
 official position is shown, connected with the fact that the bill 
 was the property of the bank, and in the regular course of busi- 
 ness was transmitted to its agent for collection, it is then shown 
 that the indorsement is an official one." * 
 
 ' Abbey v. Chase, 6 Cusli. 54 ; Ellis liability of the banlv in such cases, 01- 
 
 V. Pulsifer, 4 Alien, 165. cott v. Tioga, etc.. R. Co., 27 N. Y. 546; 
 
 " Fuller V. Hooper,3 Gray, 334; Slaw- Conro v. Port Henry Iron Co. . 12 Barb, 
 
 son V. Loring, 5 Allen, 340 ; Mott v. 27; Elwell v. Dodge, 33 id. 330; 
 
 Hicks, 1 Cow. 514; Carpenter v.Farns- Thompson v. Tioga, etc., R. Co., 36 id. 
 
 worth, 106 Mass. 561. 79 ; Merchants' Bank v. McCall, 6 
 
 3 Babcock v. Beman, 1 E. D. Smith, Bosw. 473 ; Mott v. Hicks, 1 Cow. 514 ; 
 
 597; S. C, 11 N. Y. 200. See, also, Brockway v. Allen, 17 Wend. 40; 
 
 as to the distinction made between an Bruce v. Lord, 1 Hilt, 247. But see, also, 
 
 agent as indorser and acceptor, Bab- Bank of New York v. Farmers' Bank, 
 
 cock V. Beman, supra ; Bruce v. Lord, 36 Barb. 332, where it was held that 
 
 1 Hilt. 247. an indorsement of a note by the cash- 
 
 * Bank of New York v. Bank of Ohio, ier did not render the bank liable as 
 
 29 N. Y. 619. See as to the admissi- indorsee, 
 bility of parol evidence to show the 
 
 38
 
 298 Pkivate C0KPOBATION8. 
 
 Sec. 190. When agent personally bound. — But on the other hand, 
 where the name of the principal is not named in the body of the 
 instniment, but it runs in the name of the agent, and is merely 
 sio'ned by him, with the addition " agent," or " agent for The 
 Churchman," or the like addition, this addition will usually be 
 treated as merely descriptio personoB, and surplusage, and the 
 agent held as personally liable.^ So, a bill of exchange drawn on 
 an insurance company by their agents, in which they say, " charge 
 the same to account of David Fairbanks & Co., Ag'ts, Piscataqua 
 F. & M. Ins.," binds F. & Co. personally as drawers, although 
 delivered by the agents of the Piscataqua Fire and Marine Insur- 
 ance Company, in payment of a loss on one of its policies.' So, 
 in England it was held that where four directors of a joint-stock 
 company signed their names to a promissory note, as follows : 
 "We, the directors of the Isle of Man Slate Company, do prom- 
 ise to pay," etc., and on one corner of the note was the company's 
 seal ; still it was held that the directors were personally liable 
 as makers of the note.^ 
 
 Sec. 191. When there is no principal. — In case a person assumes 
 to act as agent for a person as principal, when there is in fact no 
 such person in existence, the person thus assuming to be principal 
 would clearly be personally liable, as he would be held to have 
 acted on his own behalf, although by the form of the instrument 
 he professes to act as agent." Mr. Story observes, that " persons 
 contracting as agents are nevertheless ordinarily, although, as we 
 shall presently see, not universally held personally responsible, 
 where there is no other responsible principal to whom resort can 
 be had." " And in England it is held that if the ' promoters ' of 
 a corporation make on behalf of the future corporation an abso- 
 lute contract, and not merely one that is conditional on the future 
 completion of the organization, they will not be relieved from 
 
 1 Stackpole v. Arnold, 11 Mass. 27; sputton v. Marsh, L. R., 6 Q B. 361. 
 SlawsoQ V. Loring, 5 Allen, 340 ; Moss * Kelner v. Baxter, L. R.. 2 C. P. 174; 
 V. Livingston, 4 N. Y. 208 ; De Witt v. Story on Agency, §§ 287, 290, 274 ; Pa- 
 Waltou.'O id. 571 ; McClure v. Bennett, ley on Agency, by Lloyd, 374 ; 2 Kent's 
 1 Blackf. 189 ; Titus v. Kyle, 10 Ohio Com. 630. 
 
 St. 444. ^ Story on Agency, § 280. 
 
 2 Tucker Man. Co. v. Fairbanks, 98 
 Mass. 101.
 
 Officers and Agents Generally. 299 
 
 personal liability, even though the corporation when organized 
 adopts the contract.^ 
 
 But this doctrine does not apply where the agent had authority 
 to act for his principal, and where the agent acts in entire good 
 faith, but without the knowledge of either party, wlio have equal 
 means of ascertaining the fact, the principal has died." In such a 
 case, as either party has equal means of ascertaining the fact, they 
 are supposed to contract with reference to that contingency, and 
 the agent does not thereby become personally liable. 
 
 Sec. 192. Liability of the agent in case of misrepresentation of his au- 
 thority. — In case of the misrepresentation by the agent of his au- 
 thority, which he assumes to exercise, by which he secures the 
 execution of a contract between the corporation which he assumes 
 to represent and another party, and said contract is ultra vires, or 
 for any cause not enforceable against said corporation, and the 
 party with whom it is made is not aware of the limitations of the 
 agent's authority, such agent will be individually liable on such 
 contract. And this doctrine has, in England, been held to apply, 
 however innocent the agent, provided the principal fails to ratify 
 it.' He may also be held personally liable on the ground of fraud 
 and misrepresentation, or of implied warranty. The doctrine of 
 the supreme court of !N e w York on this question is thus stated : 
 " Whenever a person enters into a contract as the agent of an- 
 other, he warrants liis own authority, unless very special circum- 
 stances or express agreement relieve him from that responsibility. 
 An action upon such warranty must always be appropriate where 
 personal liability attaches to an agent, in consequence of his con- 
 tracting without authority. * * * If the act of the agent 
 were fraudulent, an action for the deceit would lie, but it would 
 be a concurrent remedy with the action on the contract itself, if 
 the cases which sustain such action can be regarded as correctly 
 decided."* 
 
 iRelner v. Baxter, L. R., 2 C. P. 10 C. B. (N. S.)348; Slim v. C'roucher, 
 
 174. See, also, Doubleday v.Muskett, 1 DeG. F. & J. 518; Edmunds v. Bush- 
 
 7 Bing. 110. nell, L. R., 1 Q. B. 97. 
 
 ^ Story on Agency, § 265a. and note; •'White v. Madison, 26 N. Y. 117. 
 
 Smout V. Ilbery, 10 M. & W. 1. See, also. Dung v. Parker, 52 id. 49-4 ; 
 
 ^Collea V. Wright, 8 E. & B. 647 ; Baltzen v. Nicolay, 53 id. 467 
 27 L. J . Q. B. 215 ; Wilson v. Miers,
 
 300 Private Corpoeations. 
 
 Where one acts as agent for another, through his culpable 
 ignorance, though in fact supposing that he has author- 
 ity, he is still liable, as for a deceit.^ Mr, Justice Suaw, on this 
 subject, thus expresses his views : " If one falsely represents that 
 he has authority, by which another relying on the representation 
 is misled, he is liable ; and by acting as agent for another, when 
 he is not, though he thinks he is, he tacitly and impliedly repre- 
 sents himself authorized, without knowing the fact to be trae, it 
 is in the nature of a false warranty and he is liable. But in both 
 cases the liability is founded on the ground of deceit, and the 
 remedy is by the action of tort,"^ If the agent believes he has au- 
 thority, when he has none, but affirms that he has, when m fact 
 he has not such authority, and thereby induces another to enter 
 into a contract with the agent, on behalf of the principal, it is 
 perhaps entirely just that he should be responsible to the party 
 with whom he deals, for the consequences of his mistake, and 
 that he should rather suffer than the other party, on the principle 
 that where two innocent parties must suffer a loss, the party 
 ought to bear it who was the immediate and active cause of it.^ 
 " There is no doubt," observes Baron Aldeeson, " that in the 
 case of a fraudulent misrepresentation of his authority, with an 
 intent to deceive, the agent would be personally responsible. But 
 
 ' Noyes v. Loring, 55 Me. 408; Mc- On the other hand it has been held 
 
 Curdy v. Rogers, 21 Wis. 197; Bartlett in New York, that an action may be 
 
 V. Tucker, 104 Mass. 3C6; Ogden v. maintained upon the instrument thus 
 
 Raymond, 22 Conn. 379 ; Taylor v. executed by -the agent, as though it 
 
 iShelton, 30 id. 123; Duncan v. Niles, were his personal contract. Dusen- 
 
 32 111. 532; Walker v. Bank of New bury v. Ellis, 3 Johns. Cas 70; White 
 
 York, 9 N. Y. 582; Ballou v. Talbot, v. Skinner, 13 Johns. 307 ; Meech v. 
 
 16 Mass. 461, Abbey v. Chase, 6 Cush. Smith, 7 Wend. 315; Cunningham v. 
 
 54; Draper v. Massachusetts Steam Soules id. 106 ; Stetson v. Patten, 3 
 
 Heating Co., 5 Allen, 338. Ga. 358 ; 2 Kent's Com. 631; Clay v. 
 
 2 Jefts V. York, 10 Cush. 392; Hege- Oakley, 5 Mart. (La.) 138; Perkins v. 
 
 man V. Johnson, 35 Barb. 200. See, Washington Ins. Co., 4 Cow. 469; 
 
 also, M. & W. 1; Jenkins v. Hutchin- Feeter v. Heath, 11 Wend. 477; White 
 
 son, 13 Ad. & EI. (N. S.) 744. v. Skinner, 13 Johns. 307 ; Lazarus v. 
 
 In reference to the form of the action Shearer, 2 Ala. (N. S-) 718; Hampton 
 
 in such cases, there seems to be some v. Speckenagle, 9 S. & R. 212. Where 
 
 diversity of opinion. In England it it was held that an agent in purchas- 
 
 has been held that it should be by ing goods exceeded his authority, he 
 
 special action on the case. This doc- might be treated as the purchaser, 
 trine has also been maintained in ^ Smout v. Ilbery, 10 M. & W. 1; 
 
 Massachusetts. Long v. Colburn, 11 Baring v. Corrie, 2 B. & A. 143; Paley 
 
 Mass. 97; Ballou v. Talbot, 16 id 461. on Agency, by Lloyd, 201; Story on 
 
 See, also, in Pennsylvania, in Hop- Agency, §§ 56, 264, and notes, 
 kins V. Mehaffy, 11 S. & R. 129.
 
 Officees and Agents Genp:eally. 301 
 
 independently of this, which is perfectly free from doubt, there 
 seems to be still two other classes of cases in which an agent, who, 
 without authority, makes a contract in the name of his principal 
 is personally hable, even where no proof of such fraudulent inten- 
 tion can be given. First, where he has no authority, and knows 
 it, but nevertheless makes the contract, as having such authority. 
 In that case on the plainest principles of justice he is liable, for 
 he induces the other party to enter into the contract on what 
 amounts to a misrepresentation of a fact peculiarly within his own 
 knowledge ; and it is but just that he who does so should be con- 
 sidered as holding himself out as one having competent authority 
 to contract and as guaranteeing the consequences arising from any 
 want of such authority. But there is a third class in which the 
 courts have held that, where a party making the contract as agent, 
 honafide believes that such authority is vested in him, but he has 
 in fact no such authority, he is still personally liable." ^ But an 
 agent, it is held, cannot be liable, either in contract or tort, for 
 falsely misrepresenting his authority, to make contracts on be- 
 half of another, where the principal would not be bound by the 
 contract entered into, on the ground that it is void by the statute 
 of frauds.^ 
 
 Sec. 193. Matters of which parties dealing vnth. agents are bound to 
 take notice.— An agent will not be personally liable, where he 
 exceeds his authority, if the person knew or had equal means of 
 knowing that he was exceeding his authority. Where the author- 
 ity of the oflBcers or agents who assume to act for a corporation 
 is provided for by statute, or the acts under which it is organized, 
 or by the fundamental law, or by the constating instruments of the 
 corporation, all persons dealing with such officers or agents, as we 
 have before observed, are bound to take notice of such provisions. 
 
 ' Smout V. Ilbery, 10 M. & W. 1. the wife and the plaintiflF. Suit was 
 
 In this case the decision turned upon brought against the wife for the meal 
 
 another question. A man, who was in thus furnished. It was held that the 
 
 the habit of purchasing meal of the wife was not liable. See, also. Blades 
 
 plaintiff for his house, went abroad v. Free,9 B. & C. 1G7; Story on Agencv. 
 
 leaving his wife and family resident i;^ 265, 265a; Hege man v.' Johnson, 35 
 
 in England, and died abroad. Meal Barb. 200. 
 
 was supplied after the death of the '^ Dung v. Parker, 52 N. T. 494; 
 
 husband, which was unknown to both Baltzen v. Nicolay, 53 id. 467.
 
 302 Private Corporations. 
 
 They have the means of knowing, and are supposed to know the 
 extent of the power of such agents, and having at least construct- 
 ive notice of the same, cannot consistently claim that they were 
 deceived by any implied representations, or even by the express 
 warranty of the agent with whom they deal, of the power of the 
 corjDoration as it would be shown by such provisions ; and hence 
 he could not hold the agent personally liable in such cases.* 
 
 Sec. 194. All parties dealing with corporate agents are bound 
 to take notice of acts of the agent that are ultra m7'es ; for the 
 powers of the agent cannot exceed those of the principal ; and the 
 powers of the corporation, as we have seen, are matters of public 
 knowledge, or capable of ascertainment.^ So an undertaking on 
 the part of an agent for a corporation, that some act shall be done 
 which is contrary to the public law, or against public policy, 
 would be void, and of this the contracting parties would be 
 required to take notice; and in such cases there could be no 
 recovery against the agent.^ For, as no contract prohibited by 
 the charter or the general laws of the State, can be made by a 
 corporation, it is evident that the agent could not make such a 
 contract. And of this prohibition parties dealing with agents 
 would be required to take notice.* 
 
 Sec. 195. Liability of agents for violation of duties. — It is a general 
 doctrine of the common law that agents are personally liable to 
 their principal for all violation of their duty and obligations to 
 their principals. These violations may consist either of positive 
 
 ' Ellis V. Coleman, 25 Beav. 662 ; ^ Green's Brice's Ultra Vires, 639 et 
 
 27 L. J. Ch. 611 ; Macgregor v. Dover, seq. 
 
 etc., R. Co., 18 Q. B. 618 ; 22 L. J. Q. =* Macgregor v. Deal R. Co., 18 Q. B. 
 
 B. 69 ; Kerr on Frauds (Am. ed.), 90 ; 618 ; 22 L. J. Q. B. 69 ; Mayor, etc., v. 
 
 Pitcher v. Hennessy, 48 N T. 415; Norfolk R. Co., 4 E. & B. 397; 
 
 Benj. on Sales (Am. ed.), § 414 et seq. Green's Brice's Ultra Vires, 231. 
 
 And if the agent may be excused * Thomas v. Richmond, 12 Wall. 349 ; 
 
 from liability in certain cases where Marsh v. Fulton, 10 id. 676 ; Leaven- 
 
 the facts relating to the agency are worth v. Rankin, 2 Kans. 357; Horn 
 
 known or may be presumed to be v. Baltimore, 30Md. 318; Bridgeport 
 
 known by both parties, it is evident v. Railroad Co., 15 Conn. 475; Haynes 
 
 that the rule would apply with even v. Covington, 13 S. & M. 408 ; Taft v. 
 
 greater force where the agent has Pittsford, 28 Vt. 286 ; Branham v. San 
 
 been induced to act on his supposed Jose, 24Cal. 602; Wallace v. San Jose, 
 
 agency, on the representations of the 29 id. 180 ; State v. Kirkley, 29 Md. 
 
 party with whom he is dealing. 85 ; State v. Haskell, 20 Iowa, 276. 
 Aspinwall v. Torrance, 1 Lans. 381.
 
 Officers and Agents Generally. 303 
 
 misconduct or of acts of negligence or omissions of their duty. 
 And in such cases the suit must generally be brought in the 
 name of the corporation and not in the name of a stockholder ; 
 as he is the agent of the corporation and not of the individual 
 corporators, and the injury thereby sustained must be considered 
 an injury to the corporate body, of which he is agent.' 
 
 Sec. 196. Compensation of ofl&cers and agents. — The compensation 
 of officers is usually fixed by the provisions of the by-laws ; but 
 in the absence of such provisions or any express contract, they 
 may generally recover so much as their services are reasonably 
 worth.' Or compensation may depend upon usage or custom.' 
 "Where, however, there is not only no compensation provided for 
 officers, but all allowance for compensation of them is prohibited 
 by the organic or by-laws of the corporation, no compensation 
 can be allowed. It is common, perhaps, to make no provision for 
 the compensation of directors as such, and it has been held that 
 they, in such cases, could not recover for such services.* The 
 right of directors and perhaps some other officers of private cor- 
 porations, to recover on a quantum meruit, has been questioned ; 
 and in Pennsylvania and some other states it has been held that 
 there must be an express contract for compensation of its officers, 
 or they cannot recover ; * and this is the universal rule in relation 
 to officers of municipal corporations.' 
 
 • Smith V. Poor, 40 Me. 415 ; Hersey Mete. (Mass.) 64 ; Waller v. Bank of 
 
 V Veazie, 24 id. 12; Hodges v. New Kentucky, 3 J. J. Marsh. 206; Elwes 
 
 Eng. Screw Co., 1 R. I. 312 ; Smith v. v. Ogle, 2 Eng. L. & Eq. 379 ; Bill v. 
 
 Hurd, 12 Mete. (Mass.) 371 ; Abbott v. Darenth, etc., R. Co., 1 H. & N. 305 ; 
 
 Merriam, 8 Cush. (Mass.) 588 ; Bay less 37 Eng. L. & Eq. 539 ; East Anglican 
 
 V. Orne, 1 Freem. (Miss.) Ch. 175; R. Co. v. Lythgoe, IOC B. 726. 
 
 Austin V. Daniels, 4 Den. 301 ; Brown * Fraylor v. Sonora Mining Co., 17 
 
 V. Vandyke, 8 N. J. Eq. 795 ; Denny v. Cal. 594. 
 
 Manhattan Co. , 2 Den. 115 ; S. C, 5 id . •• New York, etc., R. Co . v. Ketchum, 
 
 639; Franklin Ins. Co. v. Jenkins, 3 27 Conn. 170; Loan Association v. 
 
 Wend. 130; Lexington R. Co. v.Bidges, Stonemetz, 29 Penn. St. 534; Hodges 
 
 7 B. Monr. (Ky.) 559 ; Salem v. Richard- v. Rutland R. Co., 29 Vt. 220 ; Chand- 
 
 son, 30 Conn. 360 ; Calhoun v. Richard- ler v. Monmouth, 8 N. J. Eq. 101, 255. 
 
 son, id. 229; Richardson v. William- ^ Kilpatrick v. Penrose Ferry, etc., 
 
 son, L. R., 6 Q. B. 276; Weeks v. Co., 49 Penn. St. 118. See, also, 
 
 Propert, L. R., 8 C. P. 427; Mabey v. Scbackelford v. New Orleans R. Co., 
 
 Austin, L. R., 3 Q. B. 299; Peck v. 37 Miss. 202; Henry v. Rutland R. 
 
 Gurney.L. R., H. L. 377. But see chap- Co., 27 Vt. 485. 
 
 ters 6 and 14 where cases will be found ® Sikes v. Hatfield, 13 Gray (Mass.), 
 
 showing personal liability of agents 347 ; Barton v. New Orleans, 16 La. 
 
 and the right of stockholders to sue Ann. 317 ; Garnier v. St. Louis, 37 Mo. 
 
 them in certain cases. 554 ; Philadelphia v. Given, 60 Penn. 
 
 ' Commonwealth Ins. Co. v. Crane, 6 St. 136 ; Meagher v. County, 5 Nev. 244 ;
 
 304 
 
 Private Corpokations. 
 
 But the right of agents, aside from the officers of the corpora- 
 tion, to recover for services on a qua/ntum meruit, in the absence 
 of a stipulated salary or some express contract, has never been 
 questioned. Where services were rendered for the benefit of a 
 corporation before the completion of its organization, in obtain- 
 ing subscriptions and removing obstacles to its organization, which 
 were valuable, and at the request of parties who afterward be- 
 came members of it, and the corporation, after its organization, 
 accepted of such services and received the benefit and advantages 
 of the same, it was held that the person rendering them was en- 
 titled to recover of the company therefor in an action of assump- 
 sit upon an implied promise.^ 
 
 Baker v. City of Utica, 19 N. Y. 326 ; 
 United States v. Brown, 9 How. 487 ; 
 McClung V. St. Paul, 14 Minn. 420 ; 
 Smith V. Commonwealth, 41 Penn. St. 
 335 ; Boyden v. Brookline, 8 Vt. 284, 
 where Redfield, J., observes; "It is 
 very plain to us that a town officer, as 
 such, has no legal claim against the 
 town to recover pay for services ren- 
 dered, unless by an express vote of 
 the town, or a uniform usage to pay 
 thai particular officer, from year to 
 
 year, for his services. And in the 
 latter case, it would be very question- 
 able whether a recovery at law could 
 be had, if it had all along been left to 
 the town to make such compensation 
 as they should deem reasonable, after 
 the services had been rendered. * * 
 * The same principle has always 
 been recognized in this state, in re- 
 gard to all officers. If no law of the 
 state fixed their fees or pay, their ser- 
 vices must be gratuitous." 
 
 ' Low V. Connecticut, etc., R. Co., 45 
 N. H. 375. In this case Bellows, J., 
 observes : 
 
 "The great question is whether the 
 plaintiff is entitled to recover of the 
 corporation in any form fo" services 
 rendered by him antecedent to its or- 
 ganization, but which were necessary 
 to enable it to complete that organiza- 
 tion ; and if so, whether the action of 
 assumpsit can be maintained. 
 
 " In considering the first question, 
 it will be assumed, for the present, 
 that the services were necessary ; that 
 they were rendered at the request of 
 one or more of the original corporators, 
 or of those who were associated with 
 them ; and that the corporation ac- 
 cepted those services after its organi- 
 zation, and enjoyed the benefit of 
 them. Under such circumstances, we 
 are inclined to the opinion that it 
 would become the duty of the corpo- 
 ration to pay for such services ; and 
 that, in some form, tliis duty could be 
 enforced. 
 
 " Questions of a similar character 
 have repeatedly arisen in England, 
 
 where the projectors or promoters of 
 railway enterprises, who were about 
 to solicit acts of incorporation, had 
 agreed with the proprietors of land 
 over which such railways were des- 
 tined to pass, and who were prepared 
 to oppose such acts of incorporation, 
 to pay certain sums of money for the 
 land to be taken, and for residential 
 damages, in consideration that they 
 should withdraw their opposition. In 
 such cases where opposition was so 
 withdrawn, and the charters obtained, 
 and the companies organized, it has 
 been repeatedly held that a duty was 
 imposed upon the corporation to per- 
 form the contract of the projectors, 
 upon the principle, it would seem, that 
 a corporation is in equity bound by 
 the contracts of its projectors prelimi 
 nary to its incorporation, when it 
 afterward takes the benefit of such 
 contract. In Preston v. Liverpool, 
 Manchester & Newcastle-upon-Tyne 
 Railw. Co., 7 Eng. L. & Eq. 124, the 
 vice-chancellor lays down the doc- 
 trine thus : ' Where the projectors of 
 a company enter into contracts in be-
 
 Officers and xVgents Generally. 
 
 30i 
 
 But an agreement in respect to services of a. lobby-agent, or for 
 the personal influence of an individual to procure the passage of 
 
 half of a body not existing at the time, 
 but to be called into existence after- 
 ward, then if tlie body, for whom the 
 projectors assumed to act, does come 
 into existence, it cannot take the bene- 
 fit of the contract without performing 
 that part of it which the projectors 
 undertook that it should perform.' 
 
 " This was a case where the project- 
 ors agreed to pay the complainant 
 £5,000 for the land to be taken for the 
 railway, and residential damages, and 
 the plaintiff therefore assented that 
 his land should so be taken. This 
 agreement was in writing between the 
 plaintiff and the executive directors of 
 the Lancashire & North Yorkshire 
 Railway Company, which was after- 
 ward united with another and rival 
 enterprise, under the name of the de- 
 fendant corporation, and the two com- 
 panies agreed to adopt the contract 
 with the plaintiff. Upon a bill in 
 equity, the court held that the plaint- 
 iflF was entitled to relief against the 
 defendants, although the construction 
 of the contract was referred to a court 
 of law for an opinion. 
 
 " The same general doctrine is rec- 
 ognized in Qooday v. Colchester & 
 Stour Valley Kailw. Co., 15 Eng. L. & 
 Eq. 596 ; Edwards v. Grand Junc- 
 tion Railway, 1 My. & Cr. 650 ; and 
 Stanley v. Chester & Birkenhead Rail w. 
 Co., 9 Sim. 204; affirmed by the chan- 
 cellor in 3 My. & Cr. 793. These cases 
 are all suits in equity, and the doc- 
 trine of these is recognized in Red- 
 field on Railways, 638, § 5 ; and some 
 of them quoted and considered in § 7, 
 p. 641, ct seq. 
 
 "In the application of this doctrine 
 to cases of agreements to pay money 
 in consideration of withdrawing oppo- 
 sition to a charter, there might be seri- 
 ous objections, as suggested by Judge 
 Redpield, in section 15 of his work 
 on Railways, as being contrary to pub- 
 lic policy ; but in respect to agree- 
 ments not open to such objections — 
 that is, agreements that would bind 
 parties in existence, and capable of 
 contracting, — we think the principle 
 is sound and well sustained by author- 
 ity. If, then, this be a sound ])rinciple 
 in respect to agreements made before 
 the corporate existence commenced, it 
 
 39 
 
 must surely apply with increased force 
 to agreements made after the charter, 
 and before the organization, of the 
 corporation. 
 
 " Indeed, in the American courts, 
 agreements made with corporations 
 after their charter, but before organi- 
 zation, such as agreements to take and 
 pay for shares in the capital stock, 
 have been repeatedly enforced, and 
 even by suits at law. Such are the 
 cases of Chester Glass Co. v. Dewey, 
 16 Mass. 94, and Salem Milldam Co. v. 
 Ropes, 6 Pick. 23, where subscribers 
 for stock before organization were 
 held liable for assessments to pay pre- 
 liminary expenses incurred in obtain- 
 ing the act of incorporation, and ascer- 
 taining the practicability of the enter- 
 prise, but not for the general objects 
 of the corporation until all the shares 
 were subscribed for. So in Kennebec 
 & Portland Railw. Co. v. Palmer, 34 
 Me. 365; and Penobscott Railw. Co. 
 V. Dummer, 40 id. 172. The same 
 principle is recognized in Phillips Lim- 
 erick Academy v. D^ivis, 11 Mass. 116, 
 and VVallingford Manufacturing Co. 
 V. Fox, 12 Vt 304; Gleaves v. Turn- 
 pike Co., 1 Sneed, 491 ; Lake Ontario 
 Railw. Co. V. Mason, 16 N. Y. 451 ; 
 Tonica, etc., Railw. Co. v. McXeeley, 
 21 111. 71 ; Vermont Central Railw. Co. 
 V. Clares, 21 Vt. 30. 
 
 "These cases go upon the ground 
 that where such subscriber is received 
 and acts as a member of the corpora- 
 tion, after the organization, and as the 
 owner of the shares agreed to be taken, 
 he is liable on his subscription, though 
 made before the organization was ef- 
 fected ; for, having taken the benefit 
 of his subscription, he must also 
 take the burden along with it. This, 
 as it will be seen, is simply the con- 
 verse of the doctrine which binds the 
 corporation by a contract made by the 
 projectors, and of which the corpora- 
 tion afterward takes the benefit. In 
 a large proportion of cases, the sub- 
 scriptions for stock neces.^arily p'recede 
 the organization of the corporation and 
 the choice of officers, but, upon the 
 subscribers being received and acting 
 as members, they would be bound by 
 such subscriptions. 
 
 " The question then arises, whether
 
 306 
 
 Pkivate Corporations. 
 
 a public or private law by tlic legislaturo, is void, as prejudicial 
 to sound legislation and against public policy.' 
 
 a suit, at law can be maintained to re- 
 cover of tlie corporation the value of 
 these services. As before observed, 
 the English cases referred to are bills 
 in equity, and tlie reasoning of the 
 courts tend to exclude the idea of 
 suits at law. See, especially, Edwards 
 V. Grand Junction Railway,! Mylne & 
 Cr. 650. Where, however, the charter 
 provided that the cost of obtaining it 
 should be paid out of the first sums 
 subscribed, it was held that debt 
 would lie against the corporation by 
 an attorney, who had solicited and ob- 
 tained the charter, to recover for the 
 costs, charges, and expenses. Tilson 
 et al. v. Warwick Gas-light Co., 4 B. 
 & C. 962. See Chitty on Cont. 250, and 
 cases cited. 
 
 " In the case above cited, one count 
 of the declaration was special, setting 
 out the statute, and there were other 
 counts for work and labor, and the 
 court were inclined to hold that a re- 
 cove rv might be had on either count. 
 In Mall v. Vt. & Mass Ry. Co., 28 
 Vt. 401, it was decided that a suit at 
 law against a corporation would lie to 
 recover for the services of the plaintitf 
 in attending various meetings of the 
 corporation after the charter, and be- 
 fore the organization, he having been 
 one of the original corporators under 
 the charter, by which subscriptions 
 for five thousand shares were neces- 
 sary bt-fore an organization could be 
 perfected. The court held that the 
 duty rested upon the corporators to do 
 whatever was required by the charter 
 ,to effect that result ; that, although 
 the corporation might not be vested 
 with full corporate powers, yet it was 
 in esse, and had an inchoate existence, 
 and the corporators had the power, 
 and were so far the agent of the cor- 
 poration as to bind them by any act 
 which they were required to do, or 
 which was necessary to perfect their 
 organization under the charter ; and 
 
 the court held, that, under the circum- 
 stances, a promise to pay was implied. 
 That was an action of book debt, and 
 is an express authority, that, in Ver- 
 mont, a suit at law may be maintained ; 
 and it will be observed that in the case 
 before us the corporation was char- 
 tered by the legislature of that state, 
 and the road there located and built. 
 
 " Under these circumstances, we 
 think that the contract must be re- 
 garded as made m Vermont, and there 
 to be executed ; and, therefore, in its 
 nature, validity, and interpretation, to 
 be governed by the laws of Vermont ; 
 while in respect to the form of the 
 remedy, it is to be governed by our 
 own laws. Dyer v. Hunt et al., 5 N. 
 H. 401 ; Stevens v. Norris, 30 id. 466 ; 
 2 Kent's Com. 462. 
 
 " It may then safely be assumed, 
 that, under the laws of Vermont, the 
 corporation is liable in some form for 
 services necessary to perfect its organ- 
 ization, and which, when such organ- 
 ization was perfected, it accepted and 
 enjoyed the benefits arising therefrom. 
 Such would be the case in respect to 
 services in obtaining subscriptions to 
 the capital stock, rendered by a corpo- 
 rator or associate, and which subscrip- 
 tions were after the organization ac- 
 cepted by the corporation. Of course 
 to entitle the plaintiff to recover, such 
 services must have been necessary and 
 reasonable, and rendered not gratui- 
 tously, but with the understanding 
 and expectation that they were to be 
 paid for. 
 
 " The question, then, is whether an 
 action at law can be sustained in New 
 Hamjishire to enforce such claim; or 
 whether resort can be had to equity 
 alone, The objection to a recovery in 
 a suit at law is purely technical, but 
 it must, nevertheless, prevail if it be 
 well founded. We are inclined to 
 think, however, that it is no violation 
 of settled principle to hold that a suit 
 
 1 Powers V. Skinner, 34 Vt. 274. In 
 this case Kellogg, J., observes : 
 
 "Courts of justice have, with jeal- 
 ous care, endeavored to protect the 
 legislation of the government from all 
 illegitimate and sinister influences and 
 agencies ; and it has been settled by a 
 
 series of decisions, uniform in their 
 reason, spirit, and tendency, that an 
 agreement in respect to services as a 
 lobby-agent, or for the sale by an indi- 
 vidual of his personal influence and 
 solicitations, to procure the passage 
 of a public or private law by the legis-
 
 Officers and Agents Generally. 
 
 307 
 
 If the amount of salary of officers is fixed by the charter 
 or other fundamental law, allowance in excess of such salary 
 
 at law may be maintained to enforce 
 tlie obligation to pay for services ren- 
 dered in tlie manner described, and of 
 which the corporation, after its full 
 organization, has taken the l)enefit. 
 It it were true, that, at the time the 
 services were rendered, the corporation 
 had no cai)acity to make a contract, — 
 •which is by no means clear after the 
 charter has been accepted, — still, if 
 tlie services were rendered for the cor- 
 poration upon the promise of the cor- 
 porators that they should be paid for 
 by it when its organization was per- 
 fected, and after tiiat the corporation 
 had adopted the contract and received 
 its benefits, we think, that, upon the 
 maxim that a subsequent ratification 
 is equivalent to a prior request, it 
 may well be held that a promise to 
 pay will be implied. Upon this prin- 
 ciple, a person may sue on a contract 
 
 lature, is void as being prejudicial to 
 sound legislation, manifestly injurious 
 to the interests of the state, and in 
 express and unquestionable contra- 
 vention of public policy. Clippin- 
 ger v. Hepbaugh, 5 W. & S. 815 ; 
 Wood V. McCann, 6 Dana (Ky.), 
 366 ; Marshall v. Bait. & Ohio Ry. 
 Co., 16 Howard (U. S. Sup. Ct.), 314; 
 Harris v. Eoof's Ex'rs, 10 Barb. (Sup. 
 Ct.) 489 ; Rose et al. v. Truax, 21 id. 
 361 ; Bryan v. Reynolds, 5 Wis. 200. 
 The principle of these decisions has 
 no respect to the equities between the 
 parties, but is controlled solely by the 
 tendency of the contract ; and it mat- 
 ters not that nothing improper was 
 done, or was expected to be done, under 
 it. The law will not concede to any man, 
 however honest he may be, the privilege 
 of making a contract which it would 
 not recognize when made by designing 
 and corrupt men. A person may, with- 
 out doubt, be employed to conduct an 
 application to the legislature as well 
 as to conduct a suit at law, and 
 may contract for, and receive pay for 
 his services in preparing and present- 
 ing a petition or other documents, in 
 collecting evidence, in making a state- 
 ment or exposition of facts, or in pre- 
 paring and making an oral or written 
 argument, provided all these are used, 
 or designed to be used, either before 
 the legislature itself, or some com- 
 
 made in his name by one assuming to 
 have authority, but having none in 
 fact. feo the title of an adminis- 
 trator will relate back to the death of 
 the intestate, so as to entitle him to 
 sue for the price of goods sold by one 
 assuming to act for the administrator, 
 whoever might be afterward ap- 
 pointed, — Broom's Legal Maxinis(0T6), 
 and cases cited, — and still at the time 
 of such sale there was no one in 
 existence having capacity to make a 
 contract as administrator. See, also, 
 Foster v. Bates, 12 M. & W. 226. So 
 if one without authority buys goods for 
 another, but afterward the other re- 
 ceives them, this is equivalent to a 
 previous request. 1 Wms. Saund. 
 264, n. 1 ; Broom's Legal Maxims (596); 
 Story on Agency, ^§ 244, 250 ; Keyeer 
 v. School District, 35 N. H. 481, 482." 
 
 mittee thereof, as a body ; but he can- 
 not with propriety be employed to 
 exert his personal influence, whether 
 it be great or little, with individual 
 members, or to labor privatel}' in any 
 form with them, out of the legislative 
 halls, in favor of or against any act or 
 subject of legislation. The jiersonal 
 and private nature of the services to 
 be rendered is the point of illegality 
 in this class of cases. Sedgwick 
 V. Stanton, 14 N. Y. 289. Our 
 government, in theory, is founded on 
 the most exalted public virtue, and 
 the principle which forbids the legal 
 recognition of any contract for such 
 services is so essential to the purity of 
 the government, and is so firmly estab- 
 lished as a rule of public policy, that 
 it requires no vindication. It has not 
 been questioned by counsel in argu- 
 ment, and no member of the court has 
 liad any doubt in respect to its pro- 
 priety, or any hesitation in recogniz- 
 ing its authority. It is equally well 
 settled that where a contract is an en- 
 tire one, and contains an element 
 which is legal, and one which is void 
 as being against ]iublic policy, it can- 
 not be sifted, so that the legal service 
 rendered under it, or in its pursuit, 
 can be separated from the illegal ser- 
 vice, and a recovery had for so much 
 of the service as would, if considered 
 by itself, be adjudged to be legal. If
 
 308 Private Coepoeations. 
 
 cainiot be made by the corporation nor can it be made by the 
 board of directors.^ 
 
 Sec. 197. Frauds of officers and agents. — We shall hereafter con- 
 sider the liability of corporations for the frauds and other torts of 
 their officers and agents, merely premising here that in such cases 
 tke liability of the corporation is the same, in the absence of ex- 
 press provision of the law on the subject to the contrary, as would 
 be the liability of a natural person under similar circumstances, the 
 general principle being that they are liable in damages for frauds 
 and misrepresentations of their agents perpetrated and made in 
 the due course of their employment, and for such torts as occur 
 by their permission or express direction.* 
 
 Sec. 198. Proof of agency. — From what has been said in ref- 
 erence to corporate acts, either by the, corporate body, or by the 
 directors, it will be apparent that the best evidence of appoint- 
 ment of an agent and his authority to act is the books of the 
 company containing the entry of the resolution or act of appoint- 
 ment.^ As the secretary of the corporation would ordinarily be 
 the proper custodian of the books and records of the corporation, 
 he would be the proper person to prove the records to be those of 
 
 any part of an indivisible promise, or cannot relieve itself from its responsi- 
 
 any part of an indivisible considera- bility by voting the dissolution of the 
 
 tion for a promise, is illegal, the whole corporation, transferring its properly 
 
 is void, and no action can be main- to trustees for the purpose of closing 
 
 tained on it. Chitty on Contracts, up its concerns, and giving notice to 
 
 586, c. ; Filson's Trustee v. Himes, 5 the executive authority of the state 
 
 Penn. 452 ; Rose et al. v. Truax, ttbi that it claims no further interest in its 
 
 sripra." act of incorporation. 
 
 In the case of Revere v. The Boston If this is attempted the plaintiff is 
 
 Copper Co., 15 Pick. 351, it was held, thereby released from his obligation 
 
 that a corporation having made a con- to serve the corporation, and is entitled 
 
 tract with the plaintiff to serve its in- to an indemnity for the .loss which he 
 
 terests during his life, and promised has sustained in consequence of the 
 
 in consideration thereof the payment refusal of the company to employ him 
 
 of a fixed salary, so long as the service and pay the stipulated salary, 
 continued to be faithfully performed, 
 
 1 Carr v. City of St. Louis, 9 Mo. 191. Pick. (Mass.) 326 ; Narragansett Bank 
 
 See, also, Utica Ins. Co. v. Bloodgood, v. Atlantic Silk Co., 3 Mete. (Mass.) 283; 
 
 4 Wend. 652 ; Godbold v. Bank of Mo- Clark v. Benton Manuf. Co., 15 Wend, 
 
 bile, 11 Ala. 191; Carr v. Chartier's 256; Haven v. New Hampshire Asy- 
 
 Coal Co., 25 Penn. St. 337 ; St. Luke's lum, 13 N. H. 532 ; Owiugs v. Speed, 
 
 Church V. Mathews, 4 Dev. Ch. 578. 5 Wheat. 420; Methodist Chappel Co. 
 
 '^ See post, chap. 13. v. Herrick, 35 Me. 354. 
 
 ^ Thayer v. Middlesex Ins. Co., 10
 
 Officers and Aoknts Gknerally. SOS 
 
 the corporation, which would be necessary in onler to use the 
 same as evidence of the matters therein contained.' But we have 
 ah'eady considered the effect of the reco<^nition of tiie agent's acts 
 by the directors or the corporate body, as by accepting of the re- 
 sults or fruits of his agency, and as furnishing evidence of his 
 agency. 
 
 The principles of evidence applicable to the proof of agency, 
 generally, would be equally applicable where it is claimed that a 
 corporation is the principal. 
 
 ' Smitli V. Natchez Steamboat Co., 1 of appointment of tlie agent may be 
 How. (Miss.) 478. inferred from corporate acts. See ante. 
 
 But as we have already noticed, proof § 163.
 
 310 ■ Private Cokpokations. 
 
 CHAPTER VIII. 
 
 CORPORATE MEETINGS. 
 
 Sec. 199. How the will of the corporate body is expressed. 
 
 Sec. 200. Notice of corporate meetings. 
 
 Sec. 201. Common-law doctrine relating to notices. 
 
 Sec. 202. Waiver of notice —presumptions. 
 
 Sec. 203. Adjourned meetings. 
 
 Sec. 204. General and special meetings. 
 
 Sec. 205. Tlie majority at corporate meetings may express the corporate 
 will. 
 
 Sec. 206. Doctrine in case of a pledge of stock — right of pledgee or trus- 
 tee to vote. 
 
 Sec. 207. Meetings of directors . 
 
 Sec. 208. Acts of an irregular meeting may be valid. 
 
 Sec. 209. Can the directors only act as a board ? 
 
 Sec. 210. Same continued. 
 
 Sec. 211. What constitutes a qvorum. 
 
 Sec. 212. Same continued. 
 
 Sec. 213. Majority may act. 
 
 Sec. 214. The powers of directors. 
 
 Sec. 215. The mode of expressing assent by directors. 
 
 Sec. 216. Corporate meetings cannot be held outside the state. 
 
 Sec. 217. Directors may hold meetings outside tlie state . 
 
 Sec. 218. Jurisdiction of equity to restrain by injunction. 
 
 Sec. 199. How the will of the corporate body is expressed, — The 
 will of the corporation, it being only an artificial and ideal body, 
 can only be expressed by the corporators or other persons compos- 
 ing it. In order to secure an expression of this will, when neces- 
 sary, a meeting of the corporators would ordinarily be the most 
 convenient. At all such meetings the members should have an op- 
 portunity to be present, and a right to a voice or vote on any ques- 
 tion of corporate policy or action, in the absence of any limitation 
 of this right in the constitution of the corporate body ; the general 
 rule being, that the will of the majority is the will of the cor- 
 porate body. ' This doctrine applies, not only in reference to the 
 
 ' McBride v. Porter, 17 Iowa, 203; 2 etc., 7 S. & R. 517 ; Keyser v. Stansi- 
 Kent's Com. 293 ; St. Mary's Church, fer, 6 Ohio, 363.
 
 Corporate Meetings. 311 
 
 adoption of by-laws, for the general management of its concerns, 
 including the mode of a2)pointmeiit or election of officers and 
 agents, and the granting of special or general powers to them, 
 but the right to direct the management, in general, of the affairs 
 of the corporation. They may, in case there is no limitation of 
 power in the organic law, determine, by the vote of the majority, 
 all questions of policy that come within the general scope of the 
 power conferred upon the corporation. They may prescribe the 
 times of meetings, general or special, the manner of giving and 
 the time of notice required to be given to the members, provide 
 for the election of officers, agents and managers, and prescribe 
 the authority they possess, the duties imposed upon them, and the 
 mode of performing them. If a person signs articles of associa- 
 tion, which is required under the general incorporating statutes of 
 most of the states to effect an incorporation, or constitutes him- 
 self a member subsequently, by a purchase of its stock, it is with 
 the understanding that, in case no other provision is made, he 
 will, in the management of its affairs, submit to the will of the 
 majority ; the fundamental principle being, " that no one shall be 
 bound without his own consent, expressed by himself or his rep- 
 resentative ; but actual assent is immaterial, the assent of the 
 majority being the assent of all: this is not only constructively 
 but actually true ; for that the will of the majority shall in all 
 cases be taken for the will of the whole is an implied but essen- 
 tial stipulation in every compact of the sort ; so that every indi- 
 vidual who becomes a member assents, beforehand, to all measures 
 that shall be sanctioned by a majority of the voices." * 
 
 Sec. 200. Notice of corporate meetings. — In order to secure an 
 expression of the will of the members of a corporation, in relation 
 to various matters of concern to it, it is usually necessary to have 
 meetings of the members. And at all meetings the members 
 have a right to be present, and give 'an expression to their views 
 
 'Gibson, J., in Re St. Mary's Church Barb. 581 ; Horton v. Baptist Church, 
 
 in Philadelphia, 7 S. & R.517; Con- 34 Vt. 316; Luuman v. Lebanon K 
 
 gregation v. Johnston, 1 id. 9; 1 Kyd Co., 30 Penn. St. 46 ; East Tenn R. 
 
 on Corp. 422; 2 Kent's Com. 236; Dud- Co. v. Gammon, 5 Sneed, ."iOT ; Gifford 
 
 ley V. Kentucky High S., 9 Bush, 576; v. N. J. R. Co., 10 N. J. Eq. 172 ; Black 
 
 Mowrev v. Ind. C. R. Co., 4 Biss. 78; v. Delaware, etc., R. Co., 22 id. 130. 
 Troy & Rutland R. Co. v. Kerr, 17
 
 312 Private Corporations. 
 
 and judgment <as to corporate action and policy, and to enforce 
 them by their vote, unless restrained by the provisions of the 
 articles of association, express or implied. In order, therefore, to 
 secure such an expression of views, some notice is usually re- 
 quired by the organic law or the by-laws of tlie association, to be 
 given to the members composing it ; and in tlie absence of any 
 provisions in reference to notice, the general principles of the 
 common law would probably require reasonable personal notice 
 to be given.' And even by-laws, relating to notice, which are re- 
 pugnant to the fundamental laws of its constitution, will be con- 
 sidered as void." The faihire to give the notice required will 
 generally invalidate a corporate meeting.^ And it is held to be a 
 plain dictate of reason, that no function intrusted to, or existing 
 in a number of persons, can be rightfully or lawfully exercised 
 without a reasonable notice to all the members composing the 
 body." 
 
 If the articles of association or by-laws provide for the times 
 and places of holding meetings, it would, undoubtedly, be the 
 duty of members to take notice of the same ; and if they prescribe 
 the notice to be given, such notice as required as to the time and 
 mode of service may undoubtedly be given, and this would be 
 all that could be required.^ 
 
 ' Rex V. Langhorn, 4 Ad. & El. 538 ; not render the proceedings of a cor- 
 
 People V. Batchelor, 23 N. Y. 128 ; porate meeting invalid on account of 
 
 People's Ins. Co. v. Westcott, 14 Gray, a want of notice to him. Stebhins v. 
 
 440 ; State v. Ferguson, 31 N. J. L. Merritt, 10 Cush. 27. The pledgee 
 
 107. of stock is not generally entitled to 
 
 "^Tucker v. Rex, 3 Bro. P. C. 304; notice, McDaniels v. Flower Brook 
 
 Hoblyn v. Rex, id. 329. See, also, Manuf. Co., 22 Vt. 274. Where, by 
 
 Rex V. Attwood, 4 B. & Ad. 481 ; N. M. the records of a meeting, it appeared 
 
 286 ; Rex v. Westwood, 7 Bing. 1 ; 4 that a majority of the directors were 
 
 B. & C. 781 ; Rex v. Bird, 13 East, 367; present, it was held that it would be 
 
 Green v. Durham, 1 Burr. 127. presumed that all had requisite no- 
 
 3 Rex V. Chetwynd, 7 B. & C. 695; tice. Sargent v. Webster, 13 Mete. 
 Moore v. Hammond, 6 id. 455. 497 ; Lane v. Brainerd, 30 Conn. 565. 
 
 As to notice of adjourned meetings Nor can the validity of the acts of di- 
 
 required to be given to those who at- rectors be collaterally questioned on 
 
 tend the original one, see Willis v. the ground of a want of notice. Cham- 
 
 Murry, 4 Ex. 843 ; Warner v. Mower, berlain v. Painesville, etc., R. Co., 
 
 11 Vt. 385. 15 Ohio St. 225. 
 
 4 People V. Batchelor, 22 N. T. 128 ; ^ People v. Batchelor, 23 N. Y. 128. 
 People's ins. Co. v. Westcott, 14 Gray, The time and place of meeting, it is 
 440 ; 1 Redf. on Rail., § 20. And the claimed, may be fixed by usage, a tacit 
 absence of a member from home will understanding of the members, or in 
 not, ordinarily, excuse a want of no- other ways, of which members may be 
 tice. Jackson v. Hampden, 20 Me. required to take notice. Atlantic Ins. 
 37. But it has been held that the Co. v. Sanders, 36 N. H. 252. 
 mental imbecility of a member will
 
 Corporate Meetings. 
 
 313 
 
 Seo. 201. Common-law doctrine relating to notices. — The Coiniaou 
 law, in the absence of statutory or other regulations on the sub- 
 ject, would require such notice to be personally given ; ' that it 
 be in writing and signed by the proper officer of the corporation ;' 
 that it contain the time and place of meeting, unless there be 
 some standing rule or general custom, known to the members, 
 fixing these things ; ^ and state the business to be transacted, unless 
 it is a general meetmg for the transaction of business, or for a 
 particular object provided for by the articles or by-laws of the 
 corporation." 
 
 In the absence of any provision for the length of notice a rea- 
 sonable time is required, or the usual time, if a custom prevails.* 
 
 ' Stevens v. Eden Meeting House 
 Soc, 12 Vt. 688 ; Wiggins v. Freewill 
 Baptist Church, 8 Mete (Mass.) 301 ; 
 Stowev. Myse, 7 Conn. 214; Savings 
 Bank v. Davis, 8 id. 191, Taylor v. 
 Griswold, 2 Green, 222 ; Rex v. Lang- 
 horne, 6 N. & M. (N. C.) 203 ; Stow v. 
 Myse, 7 Conn. 219 ; Bethany v. Sperry, 
 
 10 id. 200. 
 
 * The summons must be from one 
 having authority to issue the same. 
 Evans v. O.sgood, 18 Me. 213 ; Stevens 
 V. Eden Meeting House Soc, 12 Vt. 
 688 ; Bethany v. Sperry, 10 Conn. 200. 
 See, also, in case of no officer author- 
 ized to give notice, Goulding v. Clark, 
 34 N. H. 148 ; Citizens' Mut. Fire Ins. 
 Co. v. Sortwell, 8 Allen, 217 ; Cham- 
 berlain v. Painesville, etc., R. Co., 15 
 Ohio St. 225. But it has been held 
 that the notice need not be in writing, 
 and that if the members are fully in- 
 formed of meetings by parol, it is suf- 
 ficient. Wile, on Corp. 46; Rex v. 
 Hill, 4 B. & C. 442. 
 
 ^ Re British Sugar Refining Co., 3 K. 
 & J. 408 ; 26 L. J. Ch. 369; Graham v. 
 Van Diemen's Land Company, 1 H. & 
 N. 541; 26 L. J. Ex. 73 ; Re Irrigation 
 Company of France ; Fox Case, L. R., 
 6 Ch. 176 ; Jones v. Milton & Rush T. 
 Co., 7 lud. 547; Warner v. Mower, 11 
 Vt. 385. 
 
 ■* Sampson v. Bowdoinham Steam 
 Mill Corp., 36 Me. 78; Warner v. Mower, 
 
 11 Vt. 385; Merritt v. Ferris, 22 111. 
 303 ; Brice's Ultra Vires, 354. 
 
 ° Wiggin v Freewill Baptist Soc, 
 8 Mete. (Mass.) 301; Long Island R. 
 Co., in rem, 19 Wend. 37; Rex v. 
 Hill, 4 B. & C. 442. 
 
 40 
 
 In reference to notice, Redfield, .T., 
 in Warner v. Mower, 11 Vt. 385, ob- 
 served; "It is to be borne in mind, 
 too, that a manifest distinction obtains 
 between general stated meetings of a 
 corporation, and special meetings. I 
 know that stated meetings may never- 
 theless be special ; i. e., limited to par- 
 ticular business. But stated meetings 
 of a corporation are usually general ; 
 i. e., for the transaction of all business 
 within the corporate powers. Unle.^s 
 the object of such meeting is restricted 
 by express provision of the by-laws, it 
 would ordinarily be understood to be 
 general; and so every corporator would 
 be bound to understand it. But if the 
 object of the meeting be limited by the 
 by-laws, it is then a special meeting, 
 and no other business could lawfully 
 be transacted at such meeting, unless 
 special notice was given. Where the 
 meeting is stated and general, no notice 
 is required, either of the time or place 
 of holding the meeting, or of the busi- 
 ness to be transacted. Such is the 
 general law of private corporations. 
 But as all corporations are entities 
 of the law merely, and exist and act 
 solely in conformity to their charter 
 and by-laws, it is obvious that the 
 force and effect of every act of any 
 particular corporation must depend 
 mainl_y upon the charter and by-laws 
 of that corporation. These are de- 
 nominated the constitution and laws 
 of the corporation, and, like every 
 other constitution and all other laws, 
 should receive such construction, as to 
 effect the probable intention of the 
 framers. That intention must be
 
 314 Private Corporations. 
 
 In reference to this, Mr, Dillon observes : " Dae notice of the time 
 and place of a corporate meeting is by the English law essential 
 to its validity, or its power to do any act wliicli shall bind the cor- 
 poration. Eespecting notice, the courts in England adopted cer- 
 tain rules which, since they form the basis of much of the statute 
 law in this country upon the subject, and have in the main been 
 followed by our courts, and as they are founded on reason, 
 may advantageously be here mentioned. All corporations are 
 presumed to know of the days appointed by the charter, statute, 
 usage, or by-laws, for the transaction of particular business, and 
 hence no notice of such meeting for the transaction of such busi- 
 ness is necessary, or for the transactions of mere ordinary affairs of 
 the corporation on such days, yet, if it is intended to proceed to any 
 other act of importance, a notice is necessary the same as at any 
 other time. A notice, when necessary, must, if practicable, be 
 given to every member who has a rigiit'to vote; where the act is 
 given to one to be done by a body consisting of a definite class or 
 classes, it must be given by or issued by order of some one who 
 has the authority to convene a corporate meeting. But notice 
 may be altogether dispensed with, or its necessity waived, by 
 the presence and consent of every one of those entitled to it. It 
 must be served personally upon every resident member, or left 
 at his house. If temporarily absent, it may be left with his 
 family, or at his home or last place of abode." ^ 
 
 jude^ed of, as in other cases, by the " Those by-laws provide for an an- 
 words used in reference to the sub- nual meeting of the corporation, to be 
 ject-matter and circumstances of each liolden at their counting room, on the 
 particahir corporation. first Wednesday in April of each year. 
 "The charter of this corporation Tlius far the time and place of the 
 provides for the first meeting of the meeting is fixed, and there being no 
 corporation specially, and that at that restriction in regard to business, any 
 meeting, and at all other meetings and all business pertaining to the in- 
 legally notified they may make and terest and powers of the corporation 
 alter such by-laws as may be thought may be transacted. The annual meet- 
 necessary. There being thus no re- ing of all others is the one when, not 
 striction in the charter in relation to only usually but always, all business 
 meetings of the corporation or the busi- is expected to be transacted. And the 
 ness to be transacted, that subject will custom of a country is of great force 
 be governed exclusively by the by- in the construction of statutes as well 
 laws. as contracts." 
 
 ' Dill, on Man. Corp , §§ 200, 201. necessary to state what business is to 
 
 He further states, " The notice must be done when tlie meeting relates only 
 
 state the time of meeting.and the place to the ordinary affairs of the cnrpora- 
 
 if it be not the usual place. It is not tion ; but when it is for the purpose of
 
 CoRPOuATE Meetings. 
 
 315 
 
 What is thus stated relates to municipal coii^orations, and the 
 notice required to be given to the members of the select or repre- 
 sentative body, denominated a council ; but it is equally applica 
 bletothe select body, in private corporations known as the execu- 
 tive committee or the board of directors. 
 
 Sec. 202. Waiver of notice — presumptions.— We have already 
 alluded to the fact that the right to notice of a corporate meeting 
 may be waived. If all the members assemble at any meeting and 
 it proceeds to business, this is a waiver of want of notice and the 
 action of the body is not affected thereby.' In some cases notice 
 will be presumed in the absence of proof to the contrary. Thus, 
 where it is shown by the records of a meeting of the directors of 
 a corporation that a quorum was present, notice to tlie others will 
 be presumed.^ And it has been held that the validity of the acts 
 of directors cannot be collaterally questioned on the ground of the 
 want of requisite notice of the meeting to all the members of the 
 board.' The want of irregularity of notice is generally held to 
 be waived, by the presence of all who have a right to attend a 
 meetino^.* 
 
 electing or removing officers, passing 
 ordinances, and the like, the fact 
 should be stated so that the members 
 may know that something more than 
 the usual routine of business will be 
 transacted. Such great, importance is 
 attached to notice that it can only be 
 waived by universal consent ; but if 
 every member of a select body be 
 present at a regular or stated meeting, 
 they may, if every one consents, but 
 not otherwise, transact any business, 
 ordinary or extraordinary , though no 
 notice was given, or an insufficient no- 
 tice ; but the unanimity of consent 
 
 'Rex V. Oxford, Palm. 453; Eex v. 
 Chetwvnd, 7 B. & C. 695 ; Re British 
 Sugar Refining Co., 3 K. & J. 408; 26 
 L. J. Ch. 369 ; Samuel v. Holliday, 1 
 Woolw. (C. C.) 400. 
 
 2 Sargent v. Webster,13 Metc.(Mass.) 
 497; Lane v, Brainard, 30 Conn. 565; 
 Middlesex, etc. v. Davis, 3 Mete. 133. 
 And if the by-laws provide for the 
 place of meetings and the records do 
 not show that the meetings were at a 
 different place, it would be presumed 
 that the meetings were held at the 
 
 should plainly appear from their re- 
 corded declaration, acts, or conduct. 
 This unanimity is only necessary to 
 enter upon the business ; once com- 
 menced , the rules which govern the 
 body and its actions apply." 1 Dill, on 
 Mun. Corp., § 202. 
 
 The old English doctrine in relation 
 to municipal corporations was, tliat 
 where corporate acts were to be done 
 not on a charter day, and by a select 
 body, there must be a summons of 
 every member, except such a.s have 
 absolute) V deserted the town. Bac. 
 Abr., tit. E.. i^ 8. 
 
 place designated by the by-laws. Mc- 
 Daniels v. Flower Brook Co ,22 Vt.274. 
 
 ^ Chamberlaine v. Painesville.etc, R. 
 Co., 15 Ohio St. 225. 
 
 ■« Stebbius v. Merritt, 10 Cush. 27 ; 
 People v. Peck, 11 Wend. 604 ; Jones 
 v. Milton T. Co., 7 Md. 547. And in 
 Ohio notice need not be jriven by those 
 named in the original articles of asso- 
 ciation, for the purpose of incorporat- 
 ing under a general law. Chamber- 
 laine v. Painesville, etc., K. Co., 15 Ohio 
 St. 325.
 
 316 Private Corporations. 
 
 But if one person is absent who has not received the required 
 notice, or if present refuses his consent to tlie proceedings, they 
 have been held invalid.' But a subsequent recognition by a 
 member, of an agent appointed at a meeting held without giving 
 a proper notice to him, has been held to be a waiver of such 
 notice.'' And it is well settled that where a board of directors 
 of a corporation, formed for pecuniary profit, orders an act to 
 be done, and the act is subsequently performed, its legality can- 
 not afterward be questioned by any director or stockholder on 
 account of the irregularity of the meeting where he made no 
 objection to the act at the time or afterward when he had an 
 opportunity to do so.' 
 
 Sec. 203. Adjourned meetings. — It is a general rule that corpo- 
 rate meetings may be adjourned, and if a corporate meeting is 
 regularly called any business that might have been lawfully trans- 
 acted at the original meeting may also be done at the adjourned 
 meeting. This is also in accordance with the general rule of 
 parliamentary proceedings." 
 
 On this subject Mr. Eedfield observes : " It is too well settled 
 to require comment that all corporations, whether municipal or 
 private, may transact any business at an adjourned meeting which 
 they could have done at the original meeting. It is but a con- 
 tinuation of the same meeting. Whether the meeting is con- 
 tinued without interruption for many days, or by adjournment from 
 day to day, or from time to time, many days intervening, it is 
 evident it must be considered the same meeting without any loss 
 or accumulation of powers." ^ 
 
 In the absence of particular regulations on this subject, the 
 power to adjourn corporate meetings is an incidental common- 
 law right, and adjournments may be made in the usual way to any 
 
 ' People's Ins Co. v. Westcott, 14 ■* 1 Dill, on Mun. Corp., § 226. 
 
 Gray, 440. ^ Warner v. Mower, 11 Vt. 385. See, 
 
 2 Bryand V. Goodman, 5 Pick. 228. also. Smith v. Law, 21 N. Y. 296; 
 
 3 Samuel v. Holliday, Woolw. (C.C.) People v. Batchelor,22 id. 128; Farrar 
 400. See. also, Leavitt v. Yates, 4 Edw. v. Perley, 7 Me. 404; Schoff v. Bloom- 
 Ch. 134 ; "Bank of Alabama v.Comegys, field, 8 Vt. 472 ; Field v. Field, 9 Wend. 
 12 Ala.(N.S.) 772; Williams V.Christian 394; Warner v. Mower, 11 Vt. 395; 
 Female College, 29 Mo. 250 ; Port of Hudson Co. v. State, 24 N.J. L. 718; 
 Lond. Assurance Co. Case 35 Eng. L. Insurance Co. v. Sanders, 36 N. H. 
 & Eq. 178 ; Hoyt v. Thompson, 19 N. 253. 
 
 Y. 207.
 
 Corporate Meetings. 317 
 
 future time the same day or any other clay, and even to another 
 place than the oi^e where it originally met, it within the territory 
 of its creation.^ 
 
 Sec. 204:. General aud special meetings.— The meetings of corpo- 
 rate bodies may be denominated general and special. The gene- 
 ral meetings are usually fixed by the constitution or Ijy-laws of 
 the body, and occur at stated times and places, such as the usual 
 annual or serai-annual meetings for the election of a board of 
 directors and the transaction of other important business. Spe- 
 cial meetings are such as are called on particular occasions, 
 and for special purposes. They differ in respect to the notice 
 required. In the former case, if notice is recpiired, it would not be 
 necessary ordinarily to specify the business to be transacted, as 
 members would be required to take notice of it if it was not re- 
 ferred to. But in the latter case, it would be necessary to partic- 
 ularly specify or call attention to the bnsiness to be transacted." 
 And it has been held that a notice of a meeting extraordinary in 
 respect to the time of holding it need not specify the business if 
 it is ordinary business.^ 
 
 On the other hand, if the time is that fixed by the laws of the 
 body, but business of an extraordinary character is to be trans- 
 acted, the notice should contain this special object.'' And although 
 a member is bound by the action of a majority in relation to mat- 
 ters coming within the scope of the authority of a general meet- 
 ing, still he is not bound by a notice of a special meeting, given 
 to the attending members of such general meeting ; for he would 
 not reasonably expect a notice of that kind to be thus given. 
 
 On the subject of general and special meetings, Redfield, J., 
 remarks : "It is to be observed that a manifest distinction obtains 
 between general stated meetings of a corporation and special 
 meetings. I know that stated meetings may, nevertheless, be 
 
 1 Chamberlain V. Dover, 13 Me. 466 ; 2 H. of L. Cas. 789; Dill on Mun. 
 
 People V. Martin, 5 N. Y. 22 ; Hubbard Corp., § 224. 
 
 V. Winsor, 15 Mich. 146 ; Kimball v. ^Savings Bank v. Davis, 8 Conn. 
 
 Marshall, 44 N. H. 466; Goodel v. 191. 
 
 Baker, 8 Cow. 286. * Zabriskie v. Railroad Co., 23 IIow. 
 
 * People V. Batchelor, 22 N. Y. 128 ; 381 ; Sampson v. Bowdoinham Steam 
 
 id. 146; Downing v. Ruger, 21 Wend. Mill Corp., 36 Me. 78; People's Ins. 
 
 178 ; Burgess v. Pue,2 Gill, 254 ; Stow Co. v. Westcott, 16 Gray, 440; Atlantic 
 
 T. Wyse, 7 Conn. 214 ; Smyth v. Darley, Delaine Co. v. Mason, 5 R. I. 463.
 
 318 Private Cokporations. 
 
 special, i. e., limited to particular business. But stated meetings 
 of a corporation are usually general, i. e., for the transaction of all 
 business within the corporate powers. Unless the object of the 
 meeting is restricted by express provisions of the by-laws, it would 
 ordinarily be understood to be general ; and so every corporation 
 would be bound to understand it. But if the object of the meet- 
 ing be limited by the by-laws, it is then a special meeting, and no 
 other business could laM'^fully be transacted unless special notice 
 was given. Where the meeting is stated and general, no notice 
 is required, either of the time or place of holding the meeting or 
 of the business to be transacted." ' 
 
 Sec. 205. The majority at a corporate meeting may express the corpo- 
 rate will. — Where no special provision is made in relation to the 
 matter, a majority of those present may express the corporate 
 will; and the whole body is bound by -their acts, whether the 
 number present be a majority of the whole number of members 
 or not.'' The whole are not only bound by a majority of the 
 members, but by a majority of those present at a lawful meeting. 
 I'he majority of those who appear constitute a body capable of 
 transacting business, m the absence of any limitation as to the 
 number who may act. And the will of the majority of the stock- 
 holders, who constitute members of the corporation, may adopt 
 by-laws that shall direct and control the directors, who are but the 
 agents of the corporation, appointed by the corporators. 
 
 It is a common-law principle that if an act is to be done by an 
 indefinite body, as the whole body of the corporators, it is valid, 
 if directed to be done by a majority of those present at a legal 
 meeting, no matter how small a portion they may constitute of the 
 whole number that may be entitled to be present, unless it is 
 otherwise provided by law.' But this is not the doctrine where 
 a definite body, as a board of directors, is authorized to act, which 
 we have already fully considered in treating of directors." 
 
 1 Warner v. Mower, 11 Vt. 385. See, S. & R. (Penn.) 517 ; Presbyterian 
 also, Redf. on Rail., chap. 4, § 4. Consf. v. Johns. 27 Miss. 517 ; Giflford 
 
 2 See pos<, chap. 10. ^ v. New Jersey R. Co., 10 N. J. Eq. 
 
 3 Damon v. Granby, 2 Pick. 345; 171; Sprague'v. Illinois River R. Co. 
 Commonwealth v. Ipswich, id. 70; 19 111.174; East Tenn. R. Co. v. Gam- 
 Williams V. Lunenburgh, 21 id. 75 ; mon, 5 Sneed, 567 ; Horton v. Baptist 
 Church Case. 5 Rob't 649 ; First Parish Church, 34 Vt. 81G. 
 
 V. Sterns, 21 Pick. 148; State v. Bind- •* See ante, chap. 6. 
 er, 38 Mo. 450 ; St. Mary's Church, 7
 
 Corporate Meetings. 319 
 
 Mr. Kent refers to this distinction and remarks : " There is a 
 distinction taken between a corporate act to be done l)y a select 
 and definite body, as by a hoard of directors, and one to be per- 
 formed by the constituent members. In the hitter case, a maj(jrity 
 of those who appear may act, but in the former, a majority of the 
 definite body must be present, and then a majority of the quorum 
 may decide. This is the general rule upon the subject ; and if 
 any corporation has a different modification of the expression of 
 the binding will of the corporation, it arises from the special pro- 
 visions of the act or charter of incorporation."^ 
 
 In California the power of electing directors of a railroad cor- 
 poration, by the statute of 1850, vested in the stockholders.' And 
 it has been held in that state that, the exercise of this power hav- 
 ing been regulated by the statute, a corporation could not by 
 by-laws, resolutions or contracts, either give or take away the 
 authority thus conferred.^ 
 
 Sec. 206. Doctrine in case of a pledge of stock — right of pledgee or 
 trustee to vote. — It has been held that where stock stood in the 
 name of a trustee, although he was a mere pledgee, he was enti- 
 tled to vote in the absence of any claim in that respect of the 
 pledgor ; and that the corporation was not obliged to recognize 
 the claim of the pledgor until it was established by the court; and 
 that after an election, where such pledgee was allowed to vote, 
 the result w^ould not be disturbed by a court on the application 
 of tlie pledgors.' But the doctrine generally recognized is, that 
 the pledgees or trustees of a corporation, holding the corporate 
 stock as such, cannot be allowed to vote on such stock. To 
 allow him so to do, it is maintained, would be against public 
 policy. In the case of J^x parte Willeocks, the supreme court 
 of New York remarks : " We do not hesitate to say that in a clear 
 case of hypothecation the pledgor may vote. The possession may 
 well continue with him, consistently with the nature of the con- 
 tract, and the stock remains in his name. Till enforced, and the 
 title made absolute in the pledgee, and the name changed on the 
 
 • 2 Kent's Com. 293. See, also, 1 * Stat. Cal. 1850. 
 Kyd on Corp. 308, 400, 424:1 Bl. s Brewster v. Hartley, 37 Cal. 15. 
 Com. 478 ; Dill, on Corp., § 215. * Hoppin v. Bnifura, 9 R. I. 513.
 
 320 Private Corporations. 
 
 books, he should be received to vote." ^ But it appears in this 
 case that the decision rested upon the case of Ex imrte Holmes^ 
 in which case the shares stood in tlie names of persons who were 
 the trustees of the corporation ; and it cannot be considered as 
 determining that a trustee, other than of the corporation, could 
 not vote on the shares thus held by him as such trustee.^ 
 
 In case of a pledgee or trustee of a corporation, the supreme 
 court of California remarks : " The question here is, not whether 
 the pledgee or trustee to whom stock has been pledged or retrans- 
 ferred by a stockholder, and who appears upon the books of the 
 corporation to be the owner, is entitled to vote, but it is, whether 
 the agent or trustee of the pledgee, who is described in the cer- 
 tificate book of the corporation as a trustee, and who holds as 
 such trustee or agent certain shares of stock which were pledged 
 by the corporation to its creditor, is entitled to vote such stock. 
 The designation of McLane as trustee was insufficient to show that 
 he did not hold the stock in his own right, and as the corporation 
 was one of the parties to the contract, its officers are chargeable 
 with notice of the manner in which he held the stock. 
 
 The case falls within the principle of Ex parte Holmes, in which 
 it was held that there could be no vote upon stock owned by the 
 company, though held by trustees ; that it was not stock to be 
 voted upon by any one within the meaning of the charter or the 
 general act relating to that subject. Subsequent cases, like Ex 
 parte Barker, though qualifying and restricting the broad 
 language of Ex parte Holmes, so as not to exclude the vote of a 
 trustee upon the stock held in trust for a stockholder, have not 
 questioned the doctrine that the stock belonging to the corpora- 
 tion, though held in the name of trustees, was not entitled to be 
 voted upon. This doctrine must command the assent of every 
 one, unless it can be shown that a corporation can become a stock- 
 holder, in the sense of the statute, of its own stock, receiving of 
 itself dividends and responding to itself for calls for assessments, 
 and being responsible for the debts of the corporation, first as a 
 corporation and second as a stockholder." * 
 
 » 7 Cow. 402. * Brewster v. Hartley, 37 Cal. 15 ; 
 
 ^ 5 Cow. 426. see, also, Ex parte Holmes, where 
 
 * See Barker, Ex parte rel. to Merc, the supreme court of New York 
 
 Ins. Co., 6 Wend. 509. in construing the statute of that
 
 Corporate Meetings. 
 
 321 
 
 Sec. 207. Meetings of directors. — It will hardly be necessary in 
 this treatise to consider the meetings of that class of corporations 
 which consist of various integral and definite j)arts. Our corpo- 
 rations, constituted for pecuniary gain, are mainly, if not entirely, 
 composed, as we have seen, of an indefinite number of members 
 who are stockholders, and by virtue of a law of their institution, 
 the affairs of the company are usually managed by a limited num- 
 ber of agents or directors who are elected at stated times by the cor- 
 porators. In this connection we will briefly refer to and consider the 
 subject ^of their meetings. In reference to these, we may observe, 
 that many rules and doctrines that we have considered as appli- 
 cable to the general meetings of the body would be applicable to 
 directors' meetings. Such meetings, if unusual, should be ap- 
 
 state relating to the rights of stock- 
 holders, which provided " that in all 
 cases where the right of voting 
 upon any share or shares of stock of 
 any incorporated company shall be 
 questioned, it shall be the duty of the 
 inspector of the election to require the 
 transfer books of said company, and 
 all such shares as may appear stand- 
 ing thereon in the name of any per- 
 son or persons shall be voted on by 
 such person or persons directly by 
 themselves or by proxy, subject to the 
 provision of the act of incorporation," 
 held that the provision literally was 
 broad enough to cover and include 
 parties who might hold such stock as 
 mere trustees. 
 
 The court remarks : " But the ques- 
 tion remains whether the latter are to 
 be deemed stockholders within the 
 spirit of the act. True, the stock on 
 which they voted in this case stands 
 in their name, but on the face of the 
 entry they are declared to be mere 
 nominal holders. The real owner of 
 the stock should vote, especially 
 where his name is truly expressed in 
 the books, though it might be other- 
 wise, if he chose to have the entry 
 simply in the name of another without 
 expressing any trust. Now, these 
 three persons, a majority of whom 
 claim the right to vote, are mere trus- 
 tees (they being trustees of the cor- 
 poration), and they are trustees not 
 
 41 
 
 for the directors but the company, the 
 corporation itself. If there could be 
 a vote at all upon such stock, one 
 would suppose that it must be by each 
 stockholder of the company in propor- 
 tion to his interest in it. 
 
 This brings us to the important dif- 
 ficulty in the case, which is, whether 
 stock thus held can vote at all. And 
 we think it is not to be considered as 
 stock held by any one for the purpose 
 of being voted upon. No doubt the 
 company may, from necessity, as in 
 this case take their own stock in 
 pledge or payment, and keep it out- 
 standing in trustees, to prevent its 
 merger, and convert it to their security. 
 But it is not stock to be voted upon, 
 within the meaning of the charter 
 or the general act upon which we 
 are proceeding. It is not to be toler- 
 ated that a company should procure 
 stock in any shape which its officers 
 may wield to the purposes of an elec- 
 tion, thus securing themselves against 
 the possibility of a removal." See, 
 also, American Railway Frog Co. v. 
 Haven, 101 Mass. 398. 
 
 In the case of Ex parte Holmes, 
 svpra, the stock was held in trust for 
 the corporation. But, as we have 
 seen, stock held by trustees for the 
 benefit of others may be voted upon. 
 See, also, Barker, ex parte, etc. G 
 Wend. 509 ; Hoppin v. BuflFum, 9 K. I. 
 513.
 
 322 Private Cokpoeations. 
 
 pointed by the directors, or some person duly authorized for that 
 pui'pose, and the requisite notice given to each director. 
 
 The notice and the mode of serving it is usually prescribed 
 by the articles, by-laws, or other regulations of the body or the 
 board. And, like meetings of the corporate body, the meetings 
 of the governing body will not be legal, unless the requirement 
 of the law in respect to notice is complied with.' And it has 
 been held in England, that if an advertisement is required, as a 
 notice to the members of the board, a circular will not be suffi- 
 cient.^ 
 
 Sec. 208. Acts at an irregrilar meeting may be valid. — It must not 
 be supposed, however, that all acts and proceedings at an irregu- 
 lar meeting of the board will, under all circumstances, be consid- 
 ered absolutely void. On the contrary, where the interests of 
 third parties are concerned, they have ' been held valid. Thus, 
 in a recent case, Mr. Justice Miller, on this question, expresses 
 himself thus: " The rule is very well settled, and is supported by 
 abundant reasons, that where, at a meeting of the board of direct- 
 ors of a corporation, formed for the purposes of pecuniary profit, 
 an act is ordered to be done without objection, either then or 
 subsequently made to the regularity of the meeting, by any di- 
 rector or stockholder, and the act thus authorized is afterward 
 performed, its legality cannot afterward be questioned in a suit in 
 equity, on the ground of irregularity. "^ 
 
 Sec. 209. Can the directors only act as a board 9 — Much contro- 
 versy exists as to whether the directors may act as directors or 
 agents of the corporation, except as a board, or whether they can- 
 not assent to matters relating to the corporation, separately, and 
 not at a regular meeting, in the capacity of a board. Mr. Red- 
 field, on this subject, observes : " The decision of a majority of 
 the board of directors is usually regarded as binding upon the com- 
 pany, and the assembling of a majority will be treated as a legal 
 quorura for the transaction of business, unless the charter or by- 
 
 ' Smyth V. Darley, 2 H. of L. 789. ^ Samuel v. Holladay, 1 Woolw. (C. 
 
 « Re British Sugar Ref. Co., 3 K. & C.) 400 ; With. Am. Corp. Cas. 139. 
 
 J. 408 ; 26 L. J. Ch. 369. See, also, Bank of Alabany v. 
 
 Comegys, 12 Ala. (N. S.) 772.
 
 Corporate Meetings. 323 
 
 laws contain some specific provision upon the subject, and notice 
 to the absent directors will be presumed unless the contrary 
 appear. 
 
 " The general rule upon this subject is that the act of a majority 
 of public officers is binding ; but that if they be of private ap- 
 pointment, all must act, and in general all must concur, unless there 
 is some provision to accept the decision of a majority. In this 
 respect railway directors certainly come under the former head. 
 The proper distinction upon the subject seems to be, that where 
 the matter is of public concern, and of an executive or ministerial 
 character, the act of a majority of the board will suffice, although 
 the others are not consulted. But where the function is judicial, 
 involving the determination of some definite question, the whole 
 body must be assembled and act together. If the matter is of 
 public concern, the decision of a majority will bind, but in 
 private concerns, as arbitrations, all must concur."^ Thus, in Eng- 
 land, where a quorum consisted of three directors, and the secre- 
 tary had affixed the seal of the corporation to a bond after 
 obtaining the written authority of only two of them at a private 
 interview and at another private interview the verbal promise 
 of another to sign the authority, the court held that there should 
 be at least a combined action.^ And in New Hampshire, it was 
 held that where the by-laws of a private corporation confer upon 
 the directors power to act in behalf of the corporation, without 
 special limitation as to the manner, a majority may act within 
 the scope of the authority given the board, and bind the corpora- 
 tion, either where there is a consultation of all together and a 
 concurrence of a majority, or where there is a regular meeting 
 at which all might be present and a majority actually meet 
 and act by a majority vote ; that the act of a majority does not 
 
 ' 1 Redf. on Rail., chap. 4, § 23 ; Dis- Yellow Jacket Mining Co. v. Steven- 
 patch Line, etc., v. Bellamy Man. Co., son, 5 Nev. 224. 
 
 12N.H 205, where a doubt is expressed ^ D'Arcy v. Tamar, etc., R. Co., L. 
 
 on this subject. See, also, Edgerly R., 2 Ex. 158 ; 36 L. J. Ex. 37 ; 4 H. 
 
 V. Emerson, 3 N. H. 555 ; Cammeyer & C. 463. But see Re Bonellis Tel. Co. 
 
 V. German Churches, 2 Saudf. Ch. 186; Collie's Claim, L. R., 12 Eq. 246, 260. 
 
 Corn Exchange Bank v. Cumberland See, also, Glover v. North-western R. 
 
 Coal Co., 1 Bosw. 436 ; Dey v. Jersey Co., 5 Ex. 66 ; 19 L. J. Ex. 172. 
 
 City, 19 N. J. Eq. 412 ; Schumm v. All acts of the board should be by 
 
 Seymour, 24 id. 153 ; Stoystown, etc. 
 T. Co. v. Craver, 45 Penn. St. 386 
 Ross V. Crockett, 14 La. Ann. 811 
 
 resolutions of the board while sitting 
 as such in consultation. Ross v. Crock- 
 ett, La. Ann. 811.
 
 324 Private Corpokations. 
 
 bind the corporation unless there is an assent of all the directors 
 at a meeting, or perhaps, separately obtained, or that there was 
 a meeting and consultation of the whole board and a vote of the 
 majority ; or a meeting held at some regular period, at which a 
 majority were present and acted by a majority vote ; or a meeting 
 regularly notified at which a majority assembled and acted by a 
 majority vote. But doubts are expressed as to the validity of acts 
 secured by the assent of directors separately obtained.' 
 
 Sec. 210. Same continued On the other hand it has been held 
 
 that they might act separately, or that for some purposes at least 
 they might act otherwise than at a board meeting. 
 
 Thus, the supreme court of Vermont observes : " The direct- 
 ors, in the absence of restrictions in the charter or by-laws, have 
 all the authority of the corporation itself in the conduct of its 
 ordinary business. And it is not important that this authority 
 be conferred at an assembly of the directors unless that is the 
 usual mode of their doing such acts. If they adopt the practice 
 of giving a separate assent to the execution of contracts by their 
 agents, it is of the same force as if done at a regular meeting of 
 the board. If this were not so, it would lead to very great injus- 
 tice, for it is notorious that the transactions of the ordinary 
 business of railways, banks, and similar corporations in this coun- 
 try, is without any formal meetings or votes of the board. Hence 
 there follows a necessity of giving effect to the acts of such cor- 
 porations according to the mode in which they choose to allow 
 them to be transacted." " 
 
 ' Dispatch Line, etc. V. Bellamy Man. sucli a kind that the action of the 
 
 Co., 12 N. H. 205; Edgerly v. Emerson, board by formal vote would be essen- 
 
 3 Fost. 555. tial to their validity. But, on the other 
 
 '■^ Bank of Middlebury v. Rutland, hand, it is not necessary that the whole 
 
 etc., R. Co., 30 Vt. 159. board should be consulted, or a vote 
 
 In a subsequent case in Vermont, taken upon every trifling detail of busi- 
 where this doctrine was followed, the ness. If a particular line of proced- 
 court say : " The question of law is ure has been resolved upon or is neces- 
 simply this, whether in all cases a sarily incident to the business of the 
 contract for services to the bank, bank, it is not essential that every ex- 
 concluded by two directors profess- penditure of money, or engagement of 
 ing to act for the bank, and sub- service, or other item, within the line 
 seq uently approved by a third, is so marked out, should receive the con- 
 unauthorized for want of a formal sideration of all the directors outside a 
 vote or conference with the other two meeting, or that a meeting of them 
 members of the board. It is very should act upon it." Bradstreet v. 
 true that there might be contracts of Bank of Royalton, 42 Vt. 128.
 
 Corporate Meetings. 325 
 
 Seo. 211. What constitutes a quorum. — What number shall consti- 
 tute a quorum of directors for the transaction of business is fre- 
 quently if not generally, as we have before observed, fixed by the 
 articles or by-laws of the association. And, wliere it was pro- 
 vided by the by-laws that the president and two directors should 
 constitute a quorum, it was held that a majority of the quorum 
 could bind the corporation ; and that where, at a meeting of the 
 president and two directors, the directors made a sale of lands of 
 the company to the president, it was not invalid for the want of 
 authority. 
 
 The supreme court of Iowa, after citing many authorities bear- 
 ing upon the subject, say : " It follows then, in the light of these 
 authorities, that since the president and two of the directors con- 
 stituted a quorum, it was competent for two, being a majority of 
 that quorum, to bind the corporation ; and if two were able to 
 act even as against the opposing vote of the other, they could, a, 
 fortiori, Q,ct without his concurrence. Again, the ordinary duties 
 of the president are to preside, determine questions of order, give 
 the casting vote in case of a tie, etc. ; and since the vote of the 
 directors was unanimous, there was no occasion or opportunity 
 for the president to cast his vote, even if he had not been dis- 
 qualified, and the contract of sale was made by just as many di- 
 rectors as were required by the by-laws, or as it was possible to 
 have in the corporation as constituted." ^ 
 
 Sec. 212. Same continued. — The general rule is, that if a quorum, 
 which is usually a majority of the whole number of directors, are 
 present, a majority of that quorum may act. But this would per- 
 haps be the rule only when the meeting was a regular one, of 
 which all the members would be required to take notice, or if a 
 special one, where all have been duly notified. 
 
 And where the directors consisted of seven persons, and only 
 four of the seven were duly assembled, and the meeting was not 
 a stated one, the court observed : " The meeting in question w^as 
 not a stated meeting, nor a meeting at which aU had been notified 
 
 ' Per Cole, J., in Buel v. Bucking- Wilcox, 7 Cow. 402 ; Rex v. Monday, 
 
 ham Co. ,16 Iowa,284. See, also, Sargent Cowper, 538; Sawyer v. Methodist 
 
 V. Webster, 13 Mete. (Mass.) 497; In re Episcopal Church, 18 Vt. 405. 
 Insurance Co., 22 Wend. 597; Ex parte
 
 326 Private Corporations. 
 
 to be present. Four only of the seven directors were present 
 and no others had been notified. The general principles appli- 
 cable to joint powers are well settled. When individuals or cor- 
 porations give an authority, jointly, to two or more persons, in 
 order to bind the principal, all must act. But where a number 
 of persons are by law intrusted with a power, not of mere private 
 convenience, but m some respects of a general nature, and all of 
 them are regularly assembled, the majority will conclude the 
 minority, and their act will be the act of the whole. There are, 
 however, many cases where an authority is granted to a board, or 
 to several persons, or a majority of them, or a certain limited 
 number, either more or less than a majority, who are thereby con- 
 stituted a quorum. Thus, in the usual form of bank charters, 
 there is a provision, that ' no less than four directors shall consti- 
 tute a board for the transaction of business,' etc. The effect of 
 this clause we deem the same as a provision, that the directors, or 
 any four of them, shall be competent to transact any business of 
 the bank. Four constitute a quorum, and, when assembled, pos- 
 sess all the powers of the entire board.'" 
 
 Sec. 213. Majoritymayact.— Where three assessors were appointed 
 under an English act for draining, but only two signed the appoint- 
 ment, but the other was present at all their meetings, it was held 
 that the concurrence and signatures of the majority were sufficient. 
 
 In tliis case, Lord Tenterden observed : " Perhaps it may not 
 be necessary that all should meet. In this case all three had met. 
 Where it is granted by a charter, that a corporation shall have so 
 many aldermen and so many capital burgesses, and that when 
 one of the latter shall die, depart, or be removed, another shall be 
 elected in his place by the ' mayor and aldermen,' and other capi- 
 tal burgesses then surviving or remaining, or a greater part of 
 them, the election must be made by a majority of the full num- 
 bers of aldermen and of capital burgesses, and a mere minority of 
 members of both bodies who happen to survive is not sufficient."'' 
 
 Sec. 214. The powers of directors. — It may, perhaps, be safely 
 affirmed as the settled law, that if the authority of the directors 
 
 1 Per Bell, J., in Edgerly v. Emer- "^ Rex v. May, 4 B. & Ad. 843. 
 son, 3 N. H. 556. See, also, Cram v. 
 Bangor House, 12 Me. 359.
 
 Corporate Meetings. 327 
 
 to manage and exercise a general superintendence and control 
 over the affairs of the corporation is conferred by the fundamen- 
 tal law of its constitution, it is an original corporate power con- 
 ferred on a definite number, and a majority of tlie whole number 
 assembled at a regular meeting may act by a majority vote of 
 those present ; and that where the by-laws of a private corpora- 
 tion confer upon the directors the power to act for it, without 
 special limitation as to the manner, a majority may act, within 
 the scope of the authority given to them, and bind the corpora- 
 tion, either in ease there is a consultation of all together and a 
 concurrence of a majority, or where there is a regular meeting at 
 which aU might be present, and a majority actually meets and 
 acts by a majority. 
 
 Sec. 215. The mode of expressing assent by the directors. — But 
 where, by the fundamental laws, or the by-laws, of a corporation, 
 the directors have power to act for the corporation, without limi- 
 tation as to the manner, the assent of such directors should, usu- 
 ally at least, be expressed by a vote at a meeting on consultation 
 of such directors, and the corporation be bound only by a major- 
 ity of such directors thus assembled ; * and to constitute such 
 meeting a lawful one, it must be one either fixed by law at some 
 definite time and place, or one lawfully called, and of which the 
 directors were notified and a majority assembled ; and when the 
 act purports to be the act of the 'board of directors, it may be 
 presumed to be the act of the majority, until the contrary is 
 shown. ^ 
 
 Sec. 216. Corporate meetings cannot be held outside the state. — 
 Some controversy has existed in reference to the right of corpo- 
 rators to hold corporate meetings outside the state where the 
 corporation was created. We have already alluded to the fact 
 that a corporation has a legal existence for most purposes, only in 
 the state where constituted ; and strictly corporate acts can only 
 be performed in such state, though by the comity of states it may 
 sue and be sued on contracts or for torts in other states ; and also, 
 through its agents, make contracts and do other acts within the 
 scope of its powers, like natural persons, in any state. 
 
 ^ See ante, chap. 6. * Dispatch Line, etc., v. Bellamy 
 
 Manuf. Co., 13 N. H. 205.
 
 328 Private Corporations. 
 
 But a distinction has been drawn in respect to the authority to 
 hold meetings outside the state, between strictly corporate meet- 
 ings, and meetings of the directors ; and this distinction seems to 
 be supported by at least a preponderance of authorities. The 
 question of the right of a corporation to hold strictly corporate 
 meetings outside the state where they are created, was recently 
 presented to the supreme court of Maine. The facts were as fol- 
 lows : A meeting of the corporators was called to organize under 
 its charter in the city of ISTew York, at which meeting the charter 
 was accepted and its officers elected ; and the question presented 
 was, whether the acts of the corporators were lawful. The court 
 says : " If the directors of the corporation legally chosen might 
 transact business as such by a vote of the board, at a meeting 
 held in another state, and might authorize persons to execute a 
 conveyance of real estate, yet it would be necessary to show that 
 such persons were legally chosen directors, before any conveyance 
 made by their direction would be considered as legally made. 
 All votes and proceedings of persons professing to act in the 
 capacity of corporators, when assembled without the bounds of 
 the sovereignty granting the charter, are wholly void. The 
 directors of a corporation are not a corporate body when acting 
 as a board, but a board of officers or agents, and they may exer- 
 cise their powers as agents beyond the bounds where the coi'pora- 
 tion exists. Whether the statute provisions of this state and 
 the intention of the legislative power, or the general rule of 
 law respecting corporations be examined, the conclusion must be 
 the same : that this corporation could hold no meeting for the 
 election of its officers, or for the regulation of its affairs without 
 the limits of this state, and all such meetings and proceedings 
 were without right or authority, and wholly void." ^ 
 
 The corporation can generally do no acts either within or with- 
 out the state, except such as are expressly authorized by the or- 
 
 iPerSHEPLET, J., in Miller V. Ewer, 34 N. Y. 208; Smith v. Alvord, 63 
 
 27 Me. 517. See, also. Freeman v. Ma- Barb. 415 ; New York Floating Der- 
 
 cliias Water Power,etc.,Co.,38 Me. 343; rick Co. v. New Jersey Oil Co. , 3 Duer, 
 
 Aspinwall v. Ohio, etc., R. Co., 20 648; Stoney v. American Life Ins. Co., 
 
 Ind. 497; Ormsby v. Vermont Cop- 11 Paige, 635; Bard v. Poole, 12 N. Y. 
 
 per Mining Co., 56 N. Y. 623; Merrick 495; Wood Hydraulic, etc., Co. v. 
 
 V. Brainard, 38 Barb. 574; S. C, King, 45 Ga. 34.
 
 COEPOEATE MeE'ITNGS. 
 
 329 
 
 ganic law of its being, or to be fairly inferred from the powers 
 granted, and the acts must be done in the manner and by the offi- 
 cers or agents indicated in such law. And if the organic law 
 does not grant the authority, either expressly or hy impHcation, to 
 hold corporate meetings without the limits of the sovereignty 
 creating it, it follows, that tliey could not thus lawfully meet, and 
 any acts or contracts, attempted to be executed while thus met, 
 would be ultra vires and absolutely void.' 
 
 Sec. 217. Directors may hold meetings out of the state. — 111 the 
 absence of statutory provisions, or conditions in the organic law of 
 corporations, the almost uniform current of authority is, tliat the 
 directors of corporations may hold meetings of the board outside 
 the limits of the state where it was constituted.' The directors 
 of a corporation are not the corporation itself, and if they meet 
 without the state of their creation, their proceedings will be valid, 
 for in this respect they are like the agents of a natural person.' 
 
 ' Bank of Augusta v. Earle, 13 Pet. 
 587. See, also, Hilles v. Parrish, 13 
 N. J. Eq. 380. It has been held in 
 New York that the statute, relative to 
 the observance of Sunday, does not ap- 
 ply to the proceedings of business 
 meetings of corporate benevolent so- 
 cieties held on that day ; and that such 
 society meetings are not on that ac- 
 count illegal. People v. Young Men's 
 etc., Soc, 65 Barb. 357. 
 
 " Bank of Augusta V. Earle, 13 Pet. 
 587. They are generally considered the 
 agents of the corporation. " Natural 
 persons, through the intervention of 
 agents, are continually making con- 
 tracts in countries in which they do 
 not reside, and where they are not per- 
 sonally present when the contract is 
 made, and nobody has ever doubted 
 the validity of these agreements. And 
 what greater objection can there be to 
 the capacity of an artificial person by 
 its agents, to make a contract within 
 the scope of its limited powers, in a 
 sovereignty in which it does not reside, 
 provided such contracts are permitted 
 to be made by them by the laws of 
 the place ? The corporation must, no 
 doubt, show that the law of its crea- 
 tion gave it authorityto make such con- 
 
 42 
 
 tracts through such agents. Yet, as 
 in the case of natural persons, it is not 
 necessary that it should actually exist 
 in the sovereignty in which the con- 
 tract is made. It is sufficient that its 
 existence as an artificial person, in the 
 state of its creation, is acknowledged 
 and recognized by the law of the na- 
 tion where the dealing takes place, 
 and that it is permitted by the laws of 
 the place to exercise there the powers 
 with which it is endowed. Every 
 power, however, of the description of 
 which we are speaking, which a cor- 
 poration exercises in another state, 
 depends for its validity upon the laws 
 of the sovereignty in which it is exer- 
 cised, and a corporation can make no 
 vested contract without their sanction, 
 express or implied." Id. 
 
 3 Ohio, etc., R. Co. v. McPherson, 85 
 Mo. 13. 
 
 Although another state cannot create 
 a corporation in New York, yet, it is 
 no objection to the corporate acts of a 
 foreign corporation, done in New York, 
 that they are authorized by a board of 
 directors held in the latter state, when 
 the acts so done are not repugnant to 
 the laws of the state. Smith v. Alvord, 
 63 Barb. 415.
 
 330 Pkivate Corporations. 
 
 Thus, where the directors of a corporation, created in Yermont, 
 held a meeting in Massachusetts, and authorized the execution of 
 a mortgage by an agent, and its vahdity was in question, the 
 supreme court of Yermont said : " The conferring of authority 
 by the directors of a corporation ujDon an agent to execute a deed 
 is not a corporate act. The directors act in such a case not as a 
 corporation, but as the agents of and in behalf of the corporation. 
 
 " And this authority may be conferred by a vote passed at a 
 meeting of the directors without the state where the corporation, 
 was created and exists. * * * ^^Q have no occasion now to 
 discuss or decide whether a corporation created in one state can 
 legally hold a corporate meeting and pass corporate votes in another. 
 There certainly seems to be strong reasons for holding that they 
 cannot act in a strictly corporate capacity where they have no 
 legal existence. But we do not regard this conferring authority 
 by the directors upon an agent, to execute a deed, as being a cor- 
 porate act, any more than any and every other act or contract they 
 do or make on behalf of the corporation. It is a mere question 
 of authority in the directors, and not one of corporate power ; and 
 when it is established that the power is vested in the directors, it 
 cannot, with any more propriety, be said that they are performing 
 a corporate act in conferring it, than in every other matter where 
 they bind the company by their official agency as directors. They 
 act, in neither case, as the corporation, but as the agents of and in 
 behalf of the corporation." ^ 
 
 A contract with a corporation cannot be void because executed 
 out of the state of its creation, for, although it seems well settled 
 that a corporation cannot as such and in its corporate capacity 
 hold meetings or transact business out of the sovereignty of its 
 creation, or migrate to another sovereignty, and retain its legal 
 existence as such, this does not prevent its directors or other 
 agents from doing business within another sovereignty, for by the 
 comity between states and nations they may sue and be sued, and 
 may contract and be contracted with, through their agents, the 
 same as natural persons. 
 
 "The mere place," observes the supreme court of Indiana, 
 
 1 Arms V. Conant, 36 Vt. 744. See, also, Galveston R. Co. v, Cowdrey, 11 
 Wall. 476.
 
 CoKPORATE Meetings. 331 
 
 " where the active agents of a corporation enter into a contract, 
 must in general be immaterial. The important question arising 
 must be one of power, not of place. The exercise of power has 
 relation to the place of their legal establislunent, where the con- 
 tract may be subsequently acted under. The meetings of direct- 
 ors of a business corporation are not analogous to the sessions of 
 a judicial tribunal. The coi'poration is organized by the election 
 of directors, but the mere organization of directors into a formal 
 meeting for business afterward is quite a different thing. States 
 cannot migrate, but by their agents they are daily making con- 
 tracts without their territorial boundaries." ' 
 
 Sec. 218. Jurisdiction in eqmty to restrain by injunction. — It is now 
 a generally received doctrine that courts of equity have jurisdic- 
 tion to enjoin corporate elections. The exercise of this power 
 and the law upon this subject is, however, of modern origin. 
 But, as we have already observed, the law relating to private cor- 
 porations has been the growth largely of the present century, and 
 due mainly to the rapid increase and vast importance of the 
 various enterprises which have called them into existence. Courts 
 of equity, in the exercise of their legitimate functions, have 
 adapted their remedies to meet the requirements occasioned by 
 the growth of various business interests and the complications of 
 modern enterprises ; and in modern times, in the exercise of its 
 powers, it has assumed to control the elections of private corpora- 
 tions where the principles of equity seemed to require it. This 
 power of the courts of equity jurisdiction has been recognized in 
 this country," and a succession of decisions have firmly established 
 this jurisdiction of the courts.^ 
 
 I Wright V. Sunday, 11 Ind. 404. missioners, restraining them from 
 
 '-' Haight V. Day, 1 Johns. Ch. 18 acting as inspectors of the election. 
 
 (1814). And in a case of imperious necessity, 
 
 ^ Walker V. Devereaux,4 Paige, 229 where the complainant did not know 
 
 (1833) ; Campbell v. Poultney, 6 G . & and could not ascertain the names of 
 
 J. 94; Hilles V. Parish, 13 N. J. Eq. the other stockholders, I might con- 
 
 380; Webb v. Eidgely, 38 Md. 364; sider it my duty to prevent a great 
 
 Brown v. Pacific Mail Steamship Co., and irreparable injury to him, although 
 
 5 Blatchf . (C. C.) 525. In the case of the effect of that interference might 
 
 Walker v. Devereaux, above cited, be to destroy the charter of the cor- 
 
 Chancellor Walworth observes : poration. But in the exercise of such 
 
 "This court unquestionably has the apower the court should require ample 
 
 power to prevent this election by an security from the complainant to pay 
 
 injunction operating upon the com- all damages other persons might sua-
 
 332 Pkivate Cokporations. 
 
 Although the right to restrain the holding of corporate meet- 
 ings seems to be fully recognized in the cases cited in the notes, 
 the exercise of this restraining power has been usually exercised 
 to restrain parties from casting illegal votes at such elections. 
 
 But, in Wisconsin, in a case where a complaint was filed by 
 a minority of the directors of a railroad company against the ma- 
 jority and one Jones, a stockholder, charging the directors with 
 having fraudulently conspired to obtain absolute control of the 
 affairs of the company ; with having fraudulently caused capital 
 stock to be issued to a large amount, for the purpose of using the 
 vote upon such stock for furthering their fraudulent purposes at 
 the election ; with having caused, by resolution, the subscription 
 book of the company to be closed until after the election, in order 
 to prevent hona fide subscriptions to the stock, which might 
 change the result of the election ; that such stockholder, Jones, 
 intended to vote on stock which he had fraudulently received 
 from the company, under an agreement with it to convey to it 
 certain lands, to a portion of which he was unable to give a good 
 title ; and that the corporation was entitled to a return of such 
 shares, in proportion as such defendant failed to furnish the title to 
 such lands. A preliminary injimction which was granted was 
 dissolved by the court below, and an appeal was taken to the 
 supreme court of that state, where the jurisdiction of the court in 
 the matter was not questioned, but the judgment of the court below 
 was sustained on other grounds. The opinion of the court was 
 dehvered by Mr. Justice Cole, who observes: "ISTow, upon 
 general principles, it would seem improper and most mischievous 
 to grant an injunction upon the complaint of a minority of the 
 board of directors to restrain a stockholder from voting upon an 
 alleged excess of stock held by him, before the company had 
 taken any steps to cancel the stock or declare it void. We have 
 
 tain by the granting of the injunction, to deny the allegation if it ia un- 
 
 if it should be subsequently ascer- founded, but it is not sufficient to jus- 
 
 tained that it was not warranted by tify the court in destroying or injur- 
 
 the real facts of the case. The oath ing the rights of others who have not 
 
 of the complainant that he is informed had an opportunity of being heard by 
 
 and believes the existence of a fact themselves, or by those who are under 
 
 may be sufficient ground to authorize a legal obligation to protect their 
 
 the issuing of an injunction against a rights." 
 defendant who has had an opportunity
 
 Corporate Meetings. 333 
 
 not been referred to any case where an interposition of the court 
 by injunction has been exercised for such purpose, and after some 
 research we have been able to find none. But from the allega- 
 tions of this complaint, it is not easy to perceive how it would 
 produce irreparable and permanent injury to the company, as 
 plaintiffs, even if Jones should vote upon this alleged excess of 
 stock. The complaint fails to show that imminent danger to the 
 property of the plaintiffs is treated by the contemplated acts, 
 nor does it present any other sufficient ground or reason for ar- 
 resting or restraining him from voting upon this stock." ' 
 
 * Reed v. Jones, 6 Wis. 680 (1857). See, also, post, as to injunction, § 408.
 
 334 Pkivate Corporations. 
 
 CHAPTER IX. 
 
 CORPORATE CONTRACTS. 
 
 Sec. 219. The power to contract, a corporate incident ; construction of the 
 power. 
 
 Sec. 220. Mode of exercising the power. 
 
 Sec. 221. Incidental powers of a corporation. 
 
 Sec. 222. Cases illustrating the subject. 
 
 Sec. 223. Contracts relating to bailments. 
 
 Sec. 224. What would and what would not be within the scope of an agent's 
 authority, in cases of bailments. 
 
 Sec. 225. Place of contracting by the corporation. 
 
 Sec. 226. Place of contracting by directors. 
 
 Sec. 227. Corporate bills and notes ; negotiable quality of corporate bonds. 
 
 Sec. 228. Coupons ; their incidents and qualities. 
 
 Sec. 229. Ultra vires ; doctrine of. 
 
 Sec. 230. DiflFerent senses in which the term is used. 
 
 Sec. 281. Are all contracts void, entered into by corporations, beyond the 
 powers conferred upon them ? 
 
 Sec. 232. Same continued. 
 
 Sec. 238. Distinction between executed and unexecuted contracts, in rela- 
 tion to ultra vires. 
 
 Sec. 234. Same continued. 
 
 Sec. 235. When neither party can avoid a contract, although ultra vires. 
 
 Sec. 236. Same continued. 
 
 Sec. 237. Form of action, in case of ultra vires contracts. 
 
 Sec. 238. The doctrine of ultra vires applied to agents. 
 
 Sec. 239. The doctrine of ultra vires, in cases of negotiable instruments. 
 
 Sec. 240. Necessary or implied powers, not ultra vires. 
 
 Sec. 341. Conclusion as to ultra vires contracts. 
 
 Sec. 219. The power to contract, a corporate incident ; construction 
 of the power. — We have noticed that it was one of the incidental 
 powers of a corporation at common law to make contracts the 
 same as natm-al persons, being limited in this resj)ect only by the 
 general laws, or its fundamental laws, or the provisions of the 
 constating instruments.' This right embraces also all matters that 
 
 'Barry v. Merchants' Exch. Co., 1 the same as an individual. .* * * 
 
 Sandf. Ch. 280 ; Brady v. Mayor, etc., And every such corporation has power 
 
 1 Barb. 584. In Barry v. Merchants* to make all contracts which are neces- 
 
 Exch. Co., supra, Sanford, V. C, ob- sary and usual in the course of the 
 
 serves: " Every corporation, as such, business it transacts, as a means to 
 
 has the capacity to take and grant enable it to eflFect such object, unless 
 
 property, and to contract obligations expressly prohibited by law."
 
 Corporate Contracts. 335 
 
 are not only within the express provisions of these laws and 
 instruments, but also the right to contract, in reference to all 
 matters and to any extent that comes within the scope of the 
 authority, as conferred by such laws and instruments, on a fair 
 construction of the same, they being interpreted in view of the 
 objects and purposes of its creation. The power to make con- 
 tracts and to sue and be sued thereon is usually conferred in gen- 
 eral terms in the incorporating act. Bat where the power is con- 
 ferred in this manner it is not to be construed as authorizing the 
 making of contracts of all descriptions, but only such as are neces- 
 sary and usual, and fit and proper to enable the corporation to 
 secure or carry into effect the purposes for which it was created, 
 and the extent of the power will depend upon the other provis- 
 ions of the charter defining matters in respect to which the cor- 
 poration is authorized to act. To the extent necessary to execute 
 the special powers and functions with which it is endowed by its 
 charter, there is indeed without special authority an implied inci- 
 dental authority to contract obligations and sue in the corporate 
 name,' in reference to any and every matter necessary or pertain- 
 ing even to the business for the prosecution of which it was 
 created.^ The rule may be stated to be that when the charter or 
 act of incorporation, or the statutory law, imposes no restraint, 
 and is silent as to what contracts it may make, it has general 
 power, as a general rule, to make all such contracts as are neces- 
 sary or usual in the course of its business, as a means to enable it 
 to attain the object for which it was created, and none other,^ 
 and like an individual is not only bound by, but may take the 
 benefit of the general laws where it is within the reason of them, 
 unless there be particular modifications in the charter, and their 
 
 1 1 Kyd on Corp. 69; 2 Kent's Com. 458 ; Miller v. Milwaukee, 14 Wis. 
 
 224 ; Chaffee v. Granger, 6 Mich. 51 ; 642. 
 
 Douglas V. Virginia City, 5 Nev. 147; ■' Strauss v. Eagle Ins. Co., 5 Ohio 
 
 Goodrich v. Detroit, 12 Mich. 279; St. 59 ; Wickler v. First Nat. Bank, 42 
 
 Bank of Columbia v. Patterson, 7 Md. 581 ; Brooklyn Grand Road Co. 
 
 Cranch, 299 ; Seibrecht v. New Or- v. Slaughter, 33 Ind. 185. 
 
 leans, 12 La. Ann. 496 ; Galena v. Com- ^ Broughton v. Manchester Water- 
 
 monwealth, 48 111. 423 ; Strauss v. Ins. works Co., 3 B. & Aid. 1 ; Old Colony 
 
 Co., 5 Ohio St. 59 ; Bateman v. Mayor, R. R. Co. v. Evans, 6 Gray, 25 ; Stur- 
 
 etc, 3 H. & N. 322 ; Rome v. Cabot, tevant v. Alton, 3 McLean, 393 ; Dun- 
 
 28 Ga. 50 ; Hale v. Houghton, 8 Mich, ning v. North-western Turnpike Road 
 
 Co., 6 Gratt. 160.
 
 336 Prfv^ate CoEPOKA^noNS. 
 
 rights and contracts are equally protected by the general or com- 
 mon law and all its processes and remedies.' 
 
 Sec. 220. Mode of exercising the power. — The Will or assent of 
 the corporation can be expressed only by the voice of the major- 
 ity, or in case of joint-stock corporations, by the will of those hold- 
 ing a majority of the shares of the capital stock. We have also 
 noticed, that the power of the corporate body in this respect, and 
 generally, for the control and management of the corporate busi- 
 ness, is vested in a board of directors, and that where such is the 
 case, the majority, or a quorum of them, may express the corporate 
 will or assent in the same manner as where the authority rests 
 with the body of the corporators. In this way contracts on the 
 part of the corporation may be either directly assented to, or 
 authority expressly conferred upon agents for this purpose. And 
 this authority thus conferred may be evidenced by an instrument 
 in writing signed by the president and secretary and authenticated 
 with the common seal annexed or stamped upon the instrument. 
 But this is not essential except in those cases where the execution 
 of the powers conferred upon the agent are required to be by in- 
 strument under seal, in which case the authority must be under 
 seal."^ It is sufficient in order to bind the corporation to show 
 
 1 State Bank v. Cape Fear Bank, 13 pay or tender money for his principal, 
 Ired. L. 75. A corporation, unless pro- to redeem land sold for taxes ; Qracie 
 hibited by its charter, has the power v. White, 18 Ark. 17 ; or to authorize 
 to borrow money to accomplish the an agent to sign the grantor's name to 
 purposes for which it was formed, a bill of sale of a mining claim, if the 
 Union Mining Co. v. Rocky Mt. Nat. grantor had previously agreed -with 
 Bank, 2 Cal. 248 ; Moss v. Haspeth the grantee as to the terms of the 
 Academy, 7 Heisk. 283. sale , Patterson v. Keystone, etc., Co., 
 
 2 A parol authority will support 30 Cal. 360 ; or to execute simple 
 a written contract made by an contracts, may be by parol. Stack- 
 agent. Welch V. Hoover, 5 Cranch, pole v. Arnold, 11 Mass. 27 ; Emer- 
 444 ; Webb v. Browning, 14 Mo. 354 ; son v. Providence Manuf. Co., 12 
 Bank of America v. Embury, 33 Barb. id. 237 ; New Eng. Ins. Co. v. 
 323 ; 21 How. Pr. 14 ; or authorize the DeWolf, 8 Pick. 56 ; Shaw v. Nudd, 
 performance of any act which is not id. 9 ; Small v. Owings, 1 Md. Ch. 
 of such a nature as to require that it 363. But an authority under seal 
 should be done under seal. A con- is necessary to authorize an agent 
 tract to sell land may be valid, and to sign a sealed instrument. Rowe v, 
 may transfer the equitable title. Ware, 30 Qa. 278 ; Mans v. Worthing, 
 although the writing, which evi- 4 111 . 26 ; Rhode v. Loutham, 8 
 dences the contract, may not be under Blackf. 413 ; McMenty v. Frank, 4 T. 
 seal ; Ledbetter v. Walker, 31 Ala. B. Monr. 39 ; Mitchell v. Sproul, 5 
 175 ; Johnson v. McGruder, 15 Mo. J. J. Marsh. 264 ; Wheeler v. Nevins, 
 365 ; Doughaday v. Crowell, 11 N. J. 34 Me. 54 ; Baker v. Freeman, 35 id. 
 Eq. 201 ; or to authorize an agent to 485; Shuetze v. Bailey, 40 Mo. 69 ;
 
 CoKPOKATE Contracts, 337 
 
 that the corporate assent is given, and this may be giv^en as above 
 stated. The formal execution of an instrnnient by the president 
 and secretary as such officers on behalf of tlie corporation and au- 
 thenticated by the common seal may be convenient and desirable 
 as evidence, but it is not usually essential.^ 
 
 Contracts are executed for the corporation by some authorized 
 agent. The requirements of the law to constitute a valid con- 
 tract in respect to the form and mode of its execution, applicable 
 in case natural persons are the contracting parties, are usually 
 equally applicable to corporations. If a verbal contract, relating 
 to the same subject, would be good between private persons, it 
 would be good between corporations, or between them and pri- 
 vate persons or copartnerships. If, under the same circumstances, 
 the contract should be in writing, it would be necessary in case a 
 corporation was a party. If it should be under seal, if natural 
 persons only were parties to it, under like circumstances it should 
 be under seal where a corporation is a party. But if the mode of 
 the execution of contracts is prescribed by the statute as the fun- 
 damental law of the institution, that mode should be followed. 
 
 On this subject, Marshall, C. J., observes : " The act of incor- 
 poration is to them an enabling act ; it gives them all the power 
 they possess ; it enables them to contract, and when it prescribes 
 to them a mode of contracting, they must observe that mode, or 
 
 Smith V. Perry, 29 N. J. L. 71 ; King (Peun.) 331 ; Blood v. Goodricli, 9 
 
 V. Brooks, 9 Ired. (N. C.) L. 218 ; Cain Wend. (N. Y.) 68 ; Cooper v. Kankin, 
 
 V. Heard, 1 Coldw. (Tenn.) 163 ; Hau- 5 Binn. 613: Bauorgee v. Hovey, 5 
 
 ford V. M'Nair, 9 Wend. (N. Y.) 54 ; Mass. 11. , 
 Gordon y. Bulkley, 14 Serg. & R. 
 
 ' Fanning y. Gregoire, 16 How. tlie old technical rule lias heeu con- 
 
 (U. S.) 524; Abby v. Billups, 35 demned as impolitic and essentially 
 
 Miss. 618 ; Alton y. Miilledy, 21 111. discarded. Indeed it seems to result 
 
 76 ; Western, etc., Society v. Phila- from the very structure of these arti- 
 
 delphia, 31 Penn. St. 175 ; Clark v, ficial beings that inasmuch as there 
 
 Washington, 12 Wheat. 40 ; Hamilton are two general modes in which they 
 
 v. Railroad Co., 9 Ind. 359; Ross y. may express their assent, there are 
 
 Madison, 1 id. 281 ; Story on Agency, two general modes in which they ex- 
 
 § 52. pressly contract, first by vote and 
 
 " In our own country where private secondly by their duly authorized 
 
 corporations for literary, religious and agents." Aug. & Am. on Corp., 
 
 commercial purposes have been multi- § 228. And this was the doctrine of 
 
 plied beyond any former example, the civil law. Ayliffe's Civ. L. Sup., 
 
 their facility in acting and contracting 12, 1,22. See, also, Fleckner v. U. S. 
 
 is involved with public prosperity it- Bank, 8 Wheat. 357 ; Union Springs 
 
 self ; and after mature consideration, Co. v. Jenkins, 1 Caines, 381. 
 
 43
 
 338 Private Corporations. 
 
 the instrument no more creates a contract than if the body liad 
 never been incorporated." ' 
 
 Where the acts incorporating an insurance company provided 
 that all policies and other instruments to bind the company must 
 be signed by the president or some other officer, it was held that 
 a contract to cancel a policy should be signed })y the president or 
 other of its officers.* But where the charter of a bank provided 
 that all contracts on behalf of the bank should be signed by the 
 president and countersigned by the cashier, and that the funds of 
 the bank should not be liable on any contract or engagement, 
 unless so signed, it was held that the provision did not cover con- 
 tracts implied in law ; and that a recovery might be had against 
 the bank, for money advanced upon a check, signed by the cashier, 
 only, but made in the usual course of its business.^ So, it has 
 been held, that a bank, authorized by its charter to contract in a 
 particular way, may nevertheless be liable on instruments execu- 
 ted in a different mode, where such a course has been com- 
 monly pursued by the bank, such provisions being considered 
 merely directory.* 
 
 Sec. 221. incidental powers of a corporation. — It is a familiar doc- 
 trine that corporations possess not only such powers as may be ex- 
 pressly conferred, but also such as are to be reasonably "inferred 
 from those expressly granted, and necessarily required in the prose- 
 cution of the objects and purposes of the corporation.^ These 
 incidental powers are such as are necessary for the purpose of car- 
 rying into effect the j^owers expressly gi-anted.° But the powers 
 
 ' Head v. Insurance Company, 2 See furtlier as to matters in cliar- 
 Cranch, 127 ; Fanning v. Gregoire, 16 ters, whicli are treated as merely 
 How. 524 ; White v. New Orleans, 15 directory, Mott v. U. S. Trust Corn- 
 La. Ann. 667 ; Dey v. Jersey City, 19 pany, 19 Barb. 568 ; Union Ins. Co. v. 
 N. .r. Eq. 412 ; Baltimore v. Reynolds, Keyes, 32 N. H. 313. 
 20 Md. 1 ; Matthews v. Skinker, 62 ^ Morris R. Co. v. Newark, 10 N. 
 Mo. 329. J. Eq. 352 ; Dartmouth College v. 
 
 ''Id. See, also, Davis V. North River ■\Voodvvard, 4 Wheat. 636; Beach v. 
 
 Ins. Co., 1 Cow. 462 , Hill v. Manches- The Fulton Bank, 3 Wend. 583; 
 
 ter Water- Works Co., 2 Hen. & M. Green's Brice's Ultra Vires, 28 et seq. 
 
 573 ; 5 B. & Ad. 860 ; Safford v. Wyck- « Bank of Augusta v. Earle, 13 Pet. 
 
 koff, 4 Hill, 446. 519 ; Dartmouth College v. Wood- 
 
 2 Mechanics' Bank v. Bank of Co- ward, 4 Wheal. 636; Trustees v. Peas- 
 
 lurabia, 5 Wheat. 326. lee, 15 N. H. 330; Downing v. Mt. 
 
 ^Bulkley v. Derby Fishing Cora- Washington R. Co., 40 id. 231 ; People 
 
 pany, 2 Conn. 254. v. Utica Ins. Co., 15 Johns. 357 ; Le
 
 Corporate Contracts. 
 
 339 
 
 claimed as incidental must be such as are directly and immediately 
 appropriate to the execution of the specific power granted, and 
 not merely such as have slight or remote relation to it.^ Nor is 
 the power or grant to be construed to carry as incident any au- 
 thority to agents, not possessed by the principal, nor actually ap- 
 purtenant to the business, or of a similar character.* It is also a 
 rule of construction of corporate statutes and constating instru- 
 ments, that they must be construed strictly, and most strongly 
 against the grantee and in favor of the public. And this will be 
 determined from the language of such statutes and instruments, 
 and not from some possible intentions of their framers. But the 
 language must be reasonably construed to carry out the general 
 purposes of the legislature, and of the framers of the instruments.' 
 
 Couteulx V. Cilv of Buffalo, 33 X. Y. Shawm ut Bank v. Plattsburpfh, etc., 
 383 ; Railroad V. Seeley, 45 Mo. 2-30 ; R. Co. , 31 Vt. 491 ; Mobile, etc., R. Co. 
 Vandal] v. S. S. F.,etc., Co., 40 Cal. 83; v. Franks, 41 Miss. 494. 
 
 ' Hood V. New York, etc., R. Co., 22 
 Conn. 1 ; Curtis v. Leavitt, 15 N. Y. 
 157; Buffett v. Troy, etc., R. Co., 40 
 N. Y. 17G. 
 
 ^ Beaty v. Knowler, 4 Pet. 152. See, 
 also, Cobuan v. Eastern, etc., R. Co., 
 
 10 Beav. 1 ; Salomons v. Lainp, 12 id. 
 339 ; Eastern, etc., R Co. v. Eastern, 
 
 11 C. B. 775 ; Shrewsbury, etc., R. Co. 
 V. London,' etc. , R. Co. . 22 L. J. Ch. G82 . 
 
 ^Charles River Bridsje v. Warren 
 Bridge, 11 Pet. 420 ; Providence Bank 
 V. Billings, 4 id. 514 ; Perrine v. Ches- 
 apeake, etc.. Canal Co., 9 How. 172 ; 
 Richmond R. Co. v. Louisa. R. Co., 13 
 id. 71; Pennock v. Coe, 23 id. 117; 
 Rice V. Railroad Co., 1 Black. 358; 
 Delaware Tax Cases, 18 Wall. 206 ; 
 Auburn Plankroad Co. v. Douglass, 9 
 N. Y. 444; Rensselaer, etc., R. Co. v. 
 Davis, 43 id. 137 ; In re New York, 
 etc.. R. Co. v. Kip, 46 id. 546; Black 
 V. United Cos., 22 N. J. Eq. 130; S. 
 C, 9 id. 455 ; Bradley v. New York, 
 etc., R. Co., 21 Conn. 294; Mohawk 
 Bridge Co. v. Utica, etc., R. Co., 6 
 Paige, 554; C. & A. R. Co. v. Brifftrs, 
 22 N. J. L. 623 ; Townsend v. Brown, 
 4 id. 80; Wright v. Carter. 27 id. 
 76 ; Bridge Prop. v. Hoboken, etc., Co., 
 13 N. J.^Eq. 81 ; S. C, 1 Wall. 116; 
 Bardstown, etc., R. v. Metcalfe, 4 Mete. 
 (Ky.) 199 ; Bank v. Comiuouwealth,19 
 Penn. St. 144; Penn. , etc., R. Co. v. 
 
 Canal Coms., 21 id 9 ; Commissioners 
 V. Erie, etc., R. Co., 27 id. 339. 
 
 A banking institution, created in one 
 state, may through its agents deal in 
 exchange in another, provided there 
 is nothing in the charter to restrict 
 such action within the state where 
 created. This right is among its inci- 
 dental powers. In Bank of Augusta 
 V. Earle, sujyra. Chief Justice T.\ney 
 observed : " It may be safeh- assumed 
 that a corporation can make no con- 
 tracts, and do no acts either within or 
 without the state which creates it, ex- 
 cept such as are authorized by its 
 charter; and those acts must also be 
 done, by such officers or agents, and 
 in such manner, as the charter author- 
 izes. And if the law creating a cor- 
 poration does not, by the true con- 
 struction of the words used in the 
 charter, give it the right to exercise 
 its powers beyond the limits of the 
 state, all contracts made by it in other 
 states would be void. 
 
 "The cliarter of the Bank of Au- 
 gusta authorizes it, in general terms, 
 to deal in bills of exchange ; and, con- 
 sequently, gives it the power to jiur- 
 chase foreign bills as well as inland ; 
 in other words, to purchase bills pay^ 
 able in another state. The ])ower thus 
 given clothed the corporation witli 
 the right to make contracts out of the
 
 340 
 
 Private Cokpora'iions. 
 
 Sec. 222. Oases illustrating the subject. — It has been lield tiiat 
 corporations for i-ailroad purposes have implied auth(ji'ity to erect 
 
 state, in so far as Georgia could con- 
 fer it. For whenever it purchased a 
 foreign bill, and forwarded it to an 
 agent to present for acceptance, if it 
 was honored by the drawee, the con- 
 tract of acceptance was necessarily 
 made in another state ; and the gene- 
 ral power to purchase bills without 
 any restriction as to place, by its fair 
 and natural import, authorizes the 
 bank to make such purchases, wher- 
 ever it was found most convenient and 
 profitable to the institution . And also 
 to employ suitable agents for that pur- 
 pose. The purchase of the bill in 
 question was, therefore, the exercise 
 of one of the powers which the bank 
 possessed under its charter ; and was 
 sanctioned by the law of Georgia creat- 
 ing the corporation, so far as that state 
 could authorize a corporation to exer- 
 cise its powers beyond the limits of its 
 own jurisdiction. 
 
 " But it has been urged in the argu- 
 ment, that notwithstanding the pow- 
 ers thus conferred by the terms of the 
 charter, a corporation, from the very 
 nature of its being, can have no author- 
 ity to contract out of the limits of the 
 state ; that the laws of a state can 
 have noextraterritorial operation ; and 
 that as a corporation is the mere crea- 
 ture of a law of the state, it can have 
 no existence beyond the limits in 
 which that law operates ; and that it 
 must necessarily be incapable of mak- 
 ing a contract in another place. 
 
 " It is very true that a corporation 
 can have no legal existence out of the 
 boundaries of the sovereignty by 
 which it is created. It exists only in 
 contemplation of law, and by force of 
 the law ; and where that law ceases 
 to operate, and is no longer obligatory, 
 the corporation can have no existence. 
 It must dwell in the place of its crea- 
 tion, and cannot migrate to another 
 sovereignty. But although it must 
 live and have its being in that state 
 only, yet it does not by any means fol- 
 low that its existence there will not be 
 recognized in other places ; and its 
 residence in one state creates no in- 
 superable objection to its power of 
 contracting in another. It is indeed 
 a mere artificial being, invisible and 
 intangible ; yet it is a person for cer- 
 
 tain purposes in contemplation of law, 
 and has been recognized as such by 
 the decisions of this court It was so 
 held in the case of TheUnited States 
 V. Amedy, 11 Wheat 413, and in Beas- 
 ton V. The Farmers' Bank of Delaware, 
 13 Peters, 135. Now, natural persons, 
 through the intervention of agents, 
 are continually making contracts in 
 countries in vrhich they do not reside ; 
 and where they are not piTsoually 
 present when the contract is made ; 
 and nobody has ever doubted the valid- 
 ity of these agreements. And what 
 greater objection can there be to the 
 capacity of an artificial person, by its 
 agents, to make a contract within the 
 scope of its limited powers, in a sover- 
 eignty in which it does not reside ; 
 provided such contracts are permitted 
 to be made by them by the laws of the 
 place ? 
 
 The corporation must no doubt show 
 that the law of its creation gave it 
 authority to make such contracts, 
 through such agency. Yet, as in the 
 case of a natural person, it is not nec- 
 essary that it should actually exist in 
 the sovereignty in which the contract 
 is made. It is sufficient that its exist- 
 ence as an artificial person, in the 
 state of its creation, is acknowledged 
 and recognized by the law of the na- 
 tion where the dealing takes place ; 
 and that it is permitted by the laws of 
 that place to exercise there the powers 
 with which it is endowed. 
 
 " Every power, however, of the de- 
 scription of which we are speaking, 
 which a corporation exercises in an- 
 other state, depends for its validity 
 upon the laws of the sovereignty in 
 which it is exercised ; and a corpora- 
 tion can make no valid contract with- 
 out their sanction, express or implied. 
 And this brings us to the question 
 which has been so elaborately dis- 
 cussed , whether, by the comity of 
 nations and between these states, the 
 corpoi'ations of one stale are permitted 
 to make contracts in another. It is 
 needless to enumerate here the in- 
 stances in which, by the general prac- 
 tice of civilized countries, the laws of 
 the one will, by the comity of nations, 
 be recognized and executed in another, 
 where the riffht of individuals is con-
 
 CoRPOIiATK CoNTKACTS. 
 
 341 
 
 refresliment rooms;' that a corporation authorized to erect a 
 market or buildings for any jmrpose can purchase hmd on which 
 to erect the same ; and an authority granted to borrow money, 
 
 cerned. The cases of contracts made 
 in a foreign country are familiar ex- 
 amples ; and courts of justice have 
 always expounded and executed them 
 according to the laws of the place in 
 which they were made, provided that 
 law was not repugnant to the laws or 
 policy of their own country. The 
 comity tlius extended to other nations 
 is no impeachment of sovereignty. It 
 is the voluntary act of the nation by 
 which it is offered; and is inadmissible 
 when contrary to its policy, or preju- 
 dicial to its interests. But it contrib- 
 utes so largely to promote justice 
 between individuals, and to produce a 
 friendly iutercour.se between the sov- 
 ereignties to which they belong, that 
 courts of justice have continually acted 
 upon it, as a part of the voluntary law 
 of nations. It is truly said, iu Story's 
 Conflict of Laws, 37, that 'In the si- 
 lence of any positive rule, affirming, 
 or denying, or restraining the opera- 
 tion of foreign laws, courts of justice 
 presume the tacit adoption of them 
 by their own government; unless they 
 are repugnant to its policy, or prejudi- 
 cial to its interest. It is not the com- 
 ity of the courts, but the comity of 
 the nation which is administered, and 
 ascertained in the same way, and 
 guided by the same reasoning by 
 which all other principles of munici- 
 pal law are ascertained and guided.' 
 
 " Adopting, as we do, the principle 
 here stated, we proceed to inquire 
 whether, by the comity of nations, 
 foreign corporations are permitted to 
 make contracts within their jurisdic- 
 tion; and we can perceive no sufficient 
 reason for excluding them, when they 
 are not contrary to the known policy 
 of the state, or injurious to its inter- 
 ests. It is nothing more than the 
 admissioii of the existence of an arti- 
 ficial person created by the law of 
 another state, and clothed with the 
 power of making certain contracts. It 
 is but the usual comity of recognizing 
 the law of another state. In England, 
 
 from which we have received our gen- 
 eral principles of jurisjjrudeuce, no 
 doubt ap])car3 to have been enter- 
 tained of the right of a foreia:n corpo- 
 ration to sue iu its cfiurt.s ; since the 
 case of Henriquez v. The Dutch West 
 India Company, decid(^d in 1721), 2 Ld. 
 Haym. 1532. And it is a matter of 
 history, which this court are bound to 
 notice, that corporations, created in 
 this country, have been in the open 
 practice, for many year.i past, of mak- 
 ing contracts iu England of various 
 kinds, and to very large amounts ; and 
 we have never seen a doulit suggested 
 there of the validity of these contracts, 
 b)' anj' court or any jurist. It is im- 
 possible to imagine that any court ia 
 the United Slates would refuse to exe- 
 cute a contract, by which an American 
 corporation had borrowed money in 
 England ; yet if the contracts of corpo- 
 rations, made out of the state by which 
 they were created, are void, even con- 
 tracts of that description could not be 
 enforced. 
 
 " It has, however, been supposed 
 that the rules of comity between for- 
 eign nations do not apply to the states 
 of this Union ; that they extend to 
 one another no other rights than those 
 which are given by the Constitution 
 of the United States; and tiiat the 
 courts of the general government are 
 not at liberty to presume, iu the ab- 
 sence of all legislation on the subject, 
 that a state has adopted the comity of 
 nations toward the other states, as a 
 part of its jurisprudence; or that it 
 acknowledges any rights but those 
 which are secured by the Constitution 
 of the United States. The court think 
 otherwise. The intimate union of 
 these states, as members of the same 
 great political family ; the deep and 
 vital interests which bind them so 
 closely together, should lead us, in 
 the absence of proof to the contrary, 
 to presuiue a greater degree of comity, 
 and friendship, and kindness toward 
 one another, than we should be author- 
 
 1 Flanagan v. Great Western R. Clark v. Cuckfield Union, 21 L. J, Q. 
 Co., L. R., 7 Eq. 116. See, also, B. 349.
 
 342 
 
 Private Corporations. 
 
 upon such terms as may be agreed upon between the parties, is 
 an authority to pay interest thereon, even beyond the sum author- 
 ized by law, or secure its payment by a mortgage upon its 
 property. ' 
 
 So, a banking corporation would, in the absence of limitations, 
 have power to perform the ordinary business of banking, and, of 
 course, to take negotiable paper.'* The rule that a corporation 
 
 ized to presume between foreign na- 
 tions. And when, as witliout doubt 
 must occasionally happen, the interest 
 or policy of any state recjuires it to 
 restrict the rule, it has but to declare 
 its will, and the legal presumption is 
 at once at an end. But until this is 
 done, upon what grounds could this 
 court refuse to administer the law of 
 international comity between these 
 states ? They are sovereign stales ; 
 and the history of the past, and the 
 events which are daily occurring, fur- 
 nish the strongest evidence that they 
 have adopted toward each other the 
 laws of comity in their fullest extent. 
 Money is frequently borrowed in one 
 state by a corporation created in an- 
 other. The numerous banks estab- 
 lished by different states are in the 
 constant habit of contracting and deal- 
 ing with one another. Agencies for 
 corporations engaged in the business 
 of insurance and of banking have been 
 established in other states, and suf- 
 fered to make contracts witliout any 
 objection on the part of the state au- 
 thorities. These usages of commerce 
 and trade have been so general and 
 public, and have been practiced for 
 so long a period of time, and so gen- 
 erally acquiesced in by the states, that 
 the court cannot overlook them when 
 a question like the one before us is 
 under consideration. The silence of 
 the state authorities, while these 
 events are passing before them, show 
 their assent to the ordinary laws of 
 comity which permit a corporation to 
 make contracts in another state. But 
 we are not left to infer it merely from 
 the general usages of trade, and the 
 
 silent acquiescence of the states. It 
 appears from the cases cited in the ar- 
 gument, which it is unnecessary to 
 recapitulate in this opinion, that it 
 has been decided in many of the state 
 courts, we believe in all of them wliere 
 the question has arisen, that a corpo- 
 ration of one state may sue in the 
 courts of another. If it may sue, why 
 may it not make a contract ? The 
 right to sue is one of the powers which 
 it derives from its charter. If the 
 courts of another country take notice 
 of its existence as a corporation, so far 
 as to allow it to maintain a suit, and 
 permit it to exercise that power, why 
 should not its existence be recognized 
 for other purposes, and the corporation 
 permitted to exercise another power 
 which is given to it by the same law 
 and the same sovereignty — where the 
 last-mentioned power does not come in 
 conflict with the interest or policy of 
 the state? There is certainly nothing 
 in the nature and character of a corpo- 
 ration which could justly lead to such 
 a distinction ; and which should ex- 
 tend to it the comity of suit, and re- 
 fuse to it the comity of contract. If it 
 is allowed to sue, it would of course 
 be permitted to compromise, if it 
 thought proper, with its debtor ; to 
 give him time ; to accept something 
 else in satisfaction ; to give him a re- 
 lease ; and to employ an attorney fur 
 itself to conduct its suit. These are 
 all matters of contract, and yet are so 
 intimately connected with the right to 
 sue, that the latter could not be effect- 
 ually exercised if the former were 
 denied." 
 
 ' Barry v. Merch'ts' Exchange, 1 
 Sandf. Ch. 280; Morrison v. Eaton, 
 etc., R. Co.,l4Ind. 110. 
 
 '■^ Dill. onMun. Corp.,^407,citingMc- 
 Collough V. Moss, 5 Denio, 567; Straus 
 
 V. Eagle Ins. Co., 5 Ohio, 59 ; Mott v. 
 Ilicks, 1 Cow. 518; Attorney-General 
 V. Insurance Co. , 9 Paige, 470; 3 Kent's 
 Com. 29t); 1 Pars, on N. and B. 165; 
 Clark V. Des Moines, 19 Iowa, 21:> ;
 
 CoRPORATi': Contracts. 343 
 
 has authority to do any act essential to effectuate tlic purposes 
 for which it was established, is well settled. Thus, where a cor- 
 poration is authorized to build a plankroad, it was held that the 
 act conferred an implied power upon the corporation to borrow 
 money necessary for the purposes of such construction, and to 
 issue its bonds therefor.^ So a reliii^ious corporation, empowered 
 by its charter to build and to hold property, has an implied 
 power to borrow money for that purpose,^ and i^enerally it may 
 be said that manufacturing, trading or any business corporations 
 have power to raise money by loan as necessarily incident to 
 their power to purchase stock and materials ; and as incident to 
 the power to purchase and borrow, they have authority to pledge 
 the property of the corporation as security.' The power to pur- 
 chase property necessarily carries with it the power to purchase 
 on credit and give tlie necessary obligations therefor, else the 
 power would be useless/ And it would appear to be a generally 
 recognized doctrine that private corporations for pecuniary gain 
 have incidental authority to borrow money for the legitimate 
 purposes of their business, unless restricted from so doing by the 
 organic laws of their creation ; and that they may give the usual 
 obligations therefor.^ Especially is this the case where they are 
 authorized to borrow money, because the giving of an obligation, 
 and even security for a loan, is one of the necessary incidents of 
 this exercise of such a power. 
 
 In determining the question of coi-porate powers in relation to 
 the execution of a contract, it is proper to consider, first, whether 
 there is any thing in the charter or statutes under which it is con- 
 Barry V. Merchants' Express Co., 1 356; Douglas v. Virginia City, 5 Nev. 
 Sandf. Ch. 280; Curtis v. Leavitt, 15 U7 ; Came v. Brighum, 39 Me. 39 ; 
 N. Y. 9 ; Smith v. Law, 21 id. 296; Goodnow v. Commissioners, 11 Minn. 
 Bank, etc., v. Cliillicothe, 7 Ohio, part 31. 
 2. 31 ; Ketchum v. Buffalo, 14 N. Y. 
 
 1 Ketchum v. City of Buffalo, 14 N. Nat. Bank, 2 Col. T. 248 : Burns v. 
 
 Y. 356. Plienix Glass Co., 14 Barb. 358 ; 
 
 -Davis V. Proprietors, etc., in Low- Partridge v. Badger, 25 id. 146; 
 
 ell, 8 Mete. (Mass.) 321 Mead v. Yeeder, 24 id. 30 ; Lucas v. 
 
 3Fay V. Noble, 12 Cush. (Mass.)l. Pitney, 27 N. Y. 221; Mobile & 
 
 ^ Barry v. Merchants' Exchange Cedar Point P. R Co. v. Talman, 
 
 Bank, I'Sandf. Ch . 280. 15 Ala. 472; Moss v. Haspeth Academy, 
 
 s Stratton v. Allen, 16 N. J. Eq. 229 ; 7 Heisk. 283. 
 Union Mining Co. v. Kocky Mountain
 
 344 Private Cokporations. 
 
 stituted which forbids or permits it to make such a contract ; and 
 if these ai'c silent on the subject ; second, whether the power to 
 make such a contract may not be implied as directly or incident- 
 ally necessary to enable it to fulfill the purposes of its existence, 
 or whether the contract is entirely foreign to that purpose.^ 
 
 Sec. 223. Contracts relating to bailments. — The general principles 
 and doctrines of the law of bailments, where individuals only are 
 parties, to the contract, are equally applicable where a corporation 
 is the. bailee.^ A full consideration of the liability of corpora- 
 tions in such cases would not be consistent with the limits of 
 this treatise. Most of the important questions on this subject, 
 affecting corporations, relate to railroad corporations, which are 
 the subject of special treatises.^ But in relation to the duties and 
 liabilities in general of bailees, there are also special treatises 
 which may be consulted.'* The liability in such cases would, of 
 course, depend upon the nature and character of the bailment. 
 It may, however, be proper to refer to some of the more common 
 cases of liability, for the acts of agents of a corporation in cases' 
 of bailment. In respect to the liability of the principal in such 
 
 ' Barnes V. Ontario Bank, 19 N. Y. privileges designed to be exercised 
 
 152 ; Curtis v. Leavitt, 15 id. 9 ; with special reference to their own 
 
 Leavitt v. Blatchford, 17 id. 521 ; advantage, although involving in their 
 
 Weckler v. First INational Bank, exercise incidental benefits to the com- 
 
 42 Md. 581. munity generally. The former are 
 
 On the subject of the construction to be expo^unded largely and benefi- 
 
 of statutes of incorporation the su- cially for the purposes for which they 
 
 preme court of Pennsylvania observe: were enacted; the latter liljerally, in 
 
 " When a state means to clothe a cor- favor of the public, and strictly as 
 
 porate body with a portion of her own against the grantees. The power in 
 
 sovereignty, and to disarm herself to the one case is original and inherent 
 
 that extent of the i>ower that belongs in the state or sovereign power and is 
 
 to her, it is so easy to say so, that we exercised solely for the general good 
 
 will never believe it to be meant when of the community ; in the other, it is 
 
 it is not said. * * * In the con- merely derivative, is special if not 
 
 struction of a charter, to be in doubt exclusive in its character, and is in 
 
 is to be resolved ; and every resolution derogation of common right, in the 
 
 which springs from doubt is against sense that it confers privileges to 
 
 the corporation." Pennsylvania li. Co. which the members of the community 
 
 V. Canal Commrs., 31 Penn. St. 22. at large are not entitled." Bradley v. 
 
 And on the same subject the su- New York, etc., E. Co., 21 Conn. 806. 
 
 preme court of Connecticut say : "The ** Foster v. Essex Bank, 17 Mass. 
 
 rules of construction which apply to 496. 
 
 general legislation in regard to those '^ See Redfield on Railways ; Bon- 
 eubjects in which the public at large ney's Am. Ry. Cas. ; Pierce on Rail- 
 are interested are essentially different ways ; Lacy's Dig. R. Cas. 
 from those wliich apply to private •* See Story on Bailments ; Edwards 
 grants to individuals of powers or on Bailments ; Redfield on Bailments.
 
 Corporate Contracts. 345 
 
 cases, it may be affirmed, as a general rule, tliat lie is liable in all 
 cases where the business is transacted by an agent, if such agent 
 acts in the matter, within the scope of the authority conferred 
 upon him ; and the practice or custom of the agent, to act in a 
 particular business for the corporation, and with the knowledge 
 and approbation of the principal, would furnish evidence, in that 
 respect, of his authority to act, generally, in a similar matter. 
 
 Sec. 224. what would and would not be within the scope of an 
 agent's authority in case of bailments. — An illustration of what is 
 within the scope of the authority of an agent may be found in 
 the business of banking. If a party deposits with a bank and 
 receives from the cashier or other proper agent or officer a cer- 
 tificate of his deposit, he should, in the usual course of busi- 
 ness, receive a credit for such deposit, and if such moneys should 
 afterward be fraudulently or feloniously appropriated or taken 
 by such officer or agent,' or other persons, the bank would be 
 liable for the deposit, as it would be within the scope of the au- 
 thority of such officer or agent to receive and credit the same ; 
 but, if such person should, by a personal and private arrangement 
 with such cashier or other officer or agent, make a special deposit 
 of money with him, from which the bank could receive no bene- 
 fit, this would not be within the usual scope of his authority ; and 
 if such agent should fraudulently or feloniously abstract such 
 special deposit from the vaults of the bank, without the gross 
 negligence of the bank, it would not be liable therefor. 
 
 In a case of this character the supreme court of Massachusetts 
 say: " The bank was no moi'e liable for this act of his (the cash- 
 ier) than they would be if he had stolen the pocket-book of any 
 person who might have laid it upon the desk while he was trans- 
 acting some business at the bank.*' ' But in this case the agent 
 did not act for the bank, nor bind the bank by any valid contract 
 in reference to the deposit. The officer, however, would be per- 
 sonally liable for the conversion. And the bank would also be 
 liable for the conversion if the act was authorized. ^ The general 
 
 1 Foster v. Essex Bank, 17 Mass. Knapp, 3 Pick. 96; Fulton Bank v. 
 479. See, also, Manhattan Co. v. New York Canal Co., 4 Paige, 127. 
 Lydig, 4 Johns. 377 ; Union Bank v. ''See post, chap. 13. 
 
 44
 
 346 Private Corporations. 
 
 principles of the law of agency are applicable to corporations ; as 
 for instance, where a note or other negotiable instrument is left 
 with a bank for collection. It would be the duty of the bank to 
 use due care and diligence in procuring a demand to be made of 
 parties liable thereon, and giving notice to the indorsers, and for 
 this purpose to secure the services of a notary. And a failure so 
 to do would render the bank liable for any damages caused by 
 such failure . ' 
 
 Sec. 225. Place of contracting by the corporation. — A corporation 
 can have a legal existence, only, within the state creating it.^ For 
 the purpose of determining questions relating to the jurisdiction 
 of courts it is also treated only as a citizen of the sovereignty by 
 whose authority it exists ; and acts of the corporate body, as such, 
 can only be performed within the limits of such sovereignty. 
 But it is also the genei'ally received- doctrine of the courts, that 
 such corporations may, by their agents, execute contracts without 
 the limits of the terrritory of its creation ; the only controversy 
 growing out of the proposition relates to the question whether the 
 party acting is an agent, or whether such party does not stand for 
 or represent practically the corporate body. This question arises 
 where the duly constituted directors of a corporation undertake 
 to act without the limits of such territory.^ It may be safely 
 assumed that a corporation can make no contracts, and do no acts 
 either within or without the State which creates it, except such 
 as are authorized by its charter ; and those acts must also be 
 done by such officers or agents and in such a manner as the 
 charter authorizes, xlnd if the law creating a corporation does 
 not, by the true construction of the words used in the charter, 
 give it the right to exercise its powers beyond the limits 
 of the state, all contracts made by it in other states would be void. 
 
 ' Agricultural Bank v. Commercial state by which it is incorporated ; but 
 
 Bank,? S. & M. 592; Frazier v. N. O. agents and otficera of a corporation. 
 
 Gas, etc., 2 Rob. (La.) 294; Bank chartered in one state, may bind it by 
 
 of Oswego V. Babcock, 5 Hill, 152 ; contracts and engagements, made in 
 
 Warren Bank v. Suffolk Bank, 10 another state, and the minutes of its 
 
 Cush. 582 ; Citizens' Bank v. Howell, board of directors, may be used as evi- 
 
 8 Md. 530. dence of the acts of the board, even 
 
 ^Aspinwall v. Ohio, etc , R. Co., 20 though the meetings appeared to have 
 
 Ind. 497 ; Freeman v. Machias Water been held out of the state. Wood 
 
 Power Co., 38 Me. 345. Hydraulic, etc., Co. v. King, 45 Ga. 
 
 ^ A corporation, acting as such, can 34. 
 do no acts outside the limits of the
 
 Corporate Contracts. 347 
 
 Natural persons, tlirougli the intervention of agents, are continu- 
 ally making contracts in countries in which they do not reside, 
 and where they are not personally present when the contract is 
 made, and nobody has ever doubted the validity of these agree- 
 ments. And what greater objection can there be to the capacity 
 of an artificial person, by its agents, to make a contract within the 
 scope of its limited ])0\vcrs, in a sovereignty in whicli it does not 
 reside ; provided such contracts are permitted to bo made by tlieni 
 by the laws of the place? The corporation must no doubt show 
 that the law of its creation gave it authority to make such con- 
 tracts through such agents. Yet, as in the case of a natural person, 
 it is not necessary that it should actually exist in the sovereignty 
 in which the contract is made. It is sufKcient that its existence as 
 an artificial person, in the state of its creation, is acknowledged 
 and recognized by the law of the nation where the dealing takes 
 place, and that it is permitted by the laws of the place to exercise 
 these, the powers with which it is endowed. Every power, 
 however, of the description of which we are speaking, which the 
 corporation exercises in another state, depends for its validity 
 npon the laws of the sovereignty in which it is exercised, and a 
 corporation can make no valid contract without their sanction, ex- 
 press or implied. There can be no sufficient reason for excluding 
 them, when they are not contrary to the known policy of the 
 state, or injurious to its interests. It is nothing more than the 
 existence of an artificial person created by the law of another 
 state, and clothed with the power of making certain contracts. 
 It is but the usual comity of recognizing tlie law of another 
 state." ^ By the comity of nations, a corporation chartered in 
 one county or state may, in the absence of any statute prohibiting 
 it, transact its corporate business and make contracts in another 
 state.^ The comity between states, so far as it relates to corpora- 
 
 ' Bauk of Augusta v. Earle, 13 Pet. may impose any conditions it plea^^es 
 
 587. " upon wliicli sucb corporations may 
 
 '■' Petroleum Co. v. Weare, 27 Ohio transact business within their limits. 
 
 St. 343 ; unless its acts are repuixnant Western Union Tel. Co. v. MavHr, 08 
 
 to the policy of its laws. Smith v Ohio St. 521 ; Farmers and Merchants' 
 
 Alvord, 63 Barb. 415. Such corpora- Ins. Co. v. Harrah, 47 Ind. 23(5 ; Ihnne 
 
 tious have no status in other states as Ins. Co. v. Davis, 29 Mich. 238 ; Wey- 
 
 citizens of the state creating them, mouth v. Washington R. R. Co.,lMc- 
 
 Ducatv. Chicago, 48 111. 172; Paull v. Arthur (U. S.), 19. 
 Virginia, 8 Wall. 1G8 ; and such states
 
 348 Private Cokporations. 
 
 tions, depends for its exercise upon the laws of the state in which 
 it is to be exercised, and the question as to whether it can exer- 
 cise all its functions there depends upon the laws of each state, 
 and not in any measure upon the laws of the state that gave it its 
 existence.^ In Tennessee it has been held that a savings bank 
 incorporated in and for the District of Columbia might do busi- 
 ness there, and that depositors in that state might proceed against 
 it there.^ But where a charter is granted in one state with a 
 provision that it may do business anywhere except in the state 
 in which the charter is granted, the courts will not be inclined to 
 extend the doctrine of comity to it, as no rule of comity allows 
 one state to send corporations chartered there into another state 
 to do business which they are forbidden to do in the state of their 
 origin.' The right of a corporation to do business in another 
 state or country, resting purely in comity, it follows that such 
 states may prescribe the terms and conditions upon which they 
 shall be permitted to exercise the corporate functions there, and 
 it has been held that a state may impose a license upon a foreign 
 corporation, as a condition precedent to the exercise by it of its 
 corporate powers there." Or that it shall aj^point a general agent 
 upon whom service of process may be made.* Or indeed any 
 reasonable condition it pleases, and until such condition is complied 
 with, it cannot enforce any contract made there by it.° Even if 
 the restriction imposed is unreasonable, unconstitutional and void.'' 
 Yet as each state has the right to deny to foreign corporations 
 the privilege of carrying on business within the state, the 
 courts cannot enjoin the officers of the state from revoking its 
 license, although the alleged reason of its revocation is its failure 
 to comply w^ith such law.* 
 
 ' Carroll v. City of East St. Louis, * In re Comstock, 3 Sawyer, 218. 
 
 67 111. 568 ; Williams v. Creswell, 51 « Lamb v.Lamb, 13 Bankr. Reg. 17 ; 
 
 Miss. 717 ; Second Nat. B'k v. Lavell, Western Union Tel. Co. v. Mayer, 
 
 2 Cin. (Ohio) 397 ; Thompson v. ante ; Home Ins. Co. v, Davis, 21 
 
 Waters, 25 Mich. 214. Mich. 238. 
 
 '■* Hadley v. Freedman's Savings B'k, ' Home Ins. Co. v. Morse, 20 Wall. 
 
 2 Tenu. Ch. 123. 445. 
 
 3 Land Grant R. R. Co. v. Coffey « Doyle v. Cont'l Ins. Co., 94 U. S. 
 
 County, 6 Kans. 245. 535. 
 
 ■* Liverpool Ins. Co. v. Massachusetts 
 10 Wall. 560.
 
 Corporate Contracts. 349 
 
 Sec. 226. Place of contracting by directors. — The question has 
 been presented whether the directors, with the usual powers and 
 authority of such othccrs and representatives of the corporate 
 person, are such agents of the corporation as will enable them to 
 hold meetings, appoint agents and make contracts acting as a 
 board for the corporation, outside the jurisdiction of the sover- 
 eignty, under which the corporation was instituted. 
 
 This question was presented to the supreme court of the United 
 States in a recent case where the directors of a railroad corpora- 
 tion, organized in Texas, met in the city of New York, and there 
 authorized the execution of the mortgages on which suit was 
 brought ; and one defense was a want of authority of the dii-ect- 
 ors to execute or authorize their execution in New York. The 
 court say : " It is next objected that the mortgages were not prop- 
 erly executed, because the meetings of the directors, by which the 
 mortgages were authorized to be executed, were held in the city of 
 New York, It is not denied that the mortgages were executed in 
 good faith under the corporate seal, and signed by the ])resident 
 and countersigned by the treasurer of the company, and duly 
 recorded in the proper offices of registry in the state of Texas. 
 No doubt it can be -true, in many cases, that the extra-territorial 
 acts of directors would be held void, as where a set of directors 
 of a New Jersey corporation met in Philadelphia, against a posi- 
 tive prohibitory statute of New Jersey, and improperly voted 
 themselves certain shares of stock. And other cases might be put 
 where their acts would be held void without a prohibitory statute ; 
 and it is generally true that a corporation exists only within the 
 territory of the jurisdiction that created it. But it is well settled 
 that a corporation may, by its agents, make contracts and transact 
 business in another territory and may sue and be sued therein." ^ 
 So in Vermont it has been held that the conferring of authority 
 by the directors of a corporation, upon an agent to execute a deed, 
 was not a corporate act ; that the directors in such cases do not 
 act as the corporation but as its agents, and that this authority may 
 be conferred by such directors, at a meeting held without the state 
 of the legal existence of the corporation ; that though the corpo- 
 ration as such cannot hold corporate meetings or pass corporate 
 
 1 Galveston R. Co. v. Cowdry, 11 Wall. 476.
 
 350 Private Corpokations. 
 
 acts ill another state, still, if the directors have authority to act, 
 they do not act as the corporation but as its agents, and may exe- 
 cute such authority outside the state where the corporation exists.^ 
 The general doctrine applicable to such cases is that the directors 
 are agents, and not the corporation, and according to the general 
 rule they may meet anywhere, and that their proceedings at such 
 meetings in the absence of fraud will be as binding upon the 
 corporation as though held in the state where it was organized.^ 
 But where the acts or constating instruments prohibit such a 
 meeting of the directors, this is conclusive, and no authority 
 would exist in such board to contract or authorize a contract to be 
 made binding upon the corporation, outside the limits of the sov- 
 ereignty of its legal existence. ^ 
 
 SPjC. 227. Corporate bills and notes — negotiable quality of corporate 
 bonds. — It is not unusLial for the eorpomte seal to be annexed to 
 negotiable instruments of a corporation, such as notes and bills. 
 The general doctrine in England and in this country is that such 
 seal does not affect the negotiable qualities of such instrument.* 
 In fact it has been held in this country that municipal bonds, as 
 well as the bonds of private corporations, issued and intended to 
 be passed from one to another by delivery merely, have the prop- 
 erties of negotiable paper, though under seal, and even although 
 they may not be made payable to bearer or order, but are trans- 
 ferred by indorsement in the usual way of negotiable instruments. 
 On this question the supreme court of the United States, through 
 Mr. Justice Grier, has said : '" This species of bonds is a modern 
 invention, intended to pass by manual delivery, and to have the 
 qualities of negotiable paper ; and their value depends mainly 
 upon this character. Being issued by states and corporations, they 
 
 1 Arms V. Conant, 36 Vt. 745. See, Poole, 13 N. Y. 495 ; Wood v. Hy- 
 also, Miller v. Ewer, 27 Me. 517 ; Mc- diaulic, etc., Co. v. Kin^, 45 Ga. 34. 
 Call V. Byram Man. Co., 6 Conn. 428. * See Ag-gs v. Nicholaou, 1 H. & N. 
 
 2 Ohio, etc., R. Co. v. McPherson, 85 1G5 ; 25 L. ,J, Eq. 248 ; Bateman v. 
 Mo. 13; Wright v. Buudy, 11 Ind. 398. Mid- Wales R. Co., L. R., 1 C. H. 499; 
 
 ^Ormsby v. Vermont, etc., Co., 56 Green's Brice's Ultra Vires, 1(53 ; New 
 
 N. Y. 623 ; Hilles v. Parriah, 14 N. J. Zealand Caulking Co. v. Blakely Or- 
 
 Eq. 380. See, also, Merrick V. Brain- dinance Co . L. R. , 3 Ch. 154; In re 
 
 ard, 38 Barb. 574 ; S. C, 34 N. Y. 208; Agra and Masterman Bank, ex parte 
 
 Smith V. Alvord, 63 Barb. 415 ; New Asiatic Banking Corp., L. R., 2 Ch. 
 
 York Floating Derrick Co. v. New 391 ; Myers v. York, etc., R. Co., 43 
 
 Jersey Oil Co., 3 Duer, 648 ; Bond v. Me. 232.
 
 Corporate Contracts. 351 
 
 are necessaril}^ under seal. But tliere is notliing immoral or coi- 
 trary to good policy in making them negotiable, if the necessities 
 of commerce require that they should be so. A mere technical 
 dogma of the courts or the common law cannot prohibit the cpm- 
 mercial world from inventing or using any species of security not 
 known in the last century. Usages of trade and commerce are 
 acknowledged by the courts as a part of the common law, although 
 they may have been unknown to Bracton or Blackstone. And 
 this malleability to suit the necessities and usages of the mercantile 
 and commercial world is one of the most valuable characteristics 
 of the common law. When a corporation covenants to pay bearer, 
 and gives a bond with negotiable qualities, and by this means ob- 
 tains funds for the accomplishment of the useful enterprises of 
 the day, it cannot be allowed toev'ade judgment by parading some 
 obsolete judicial decision that a bond, for some technical reason, 
 caimot be made payable to bearer. That these securities are 
 treated as negotiable b}' the commercial usages of the whole civ- 
 ilized world, and have received the sanctions of judicial recogni- 
 tion, not only in this court, but of nearly every state in the union, 
 is well known and admitted." ' 
 
 In the case of bank bills and notes and promissory notes made 
 payable to bearer, or if not so payable, still if by a blank or other 
 indorsement by the payee it is made so payable, the holder is 
 usually treated as the owner. By analogy the rule in such cases 
 has been applied to the ordinary bonds' of corporations, and they 
 are regarded by the almost uniform decisions of our courts as pos- 
 sessed of the qualities of negotiable instruments." This doctrine 
 
 'Mercer Co. v. Hackett, 1 Wall. 95. 8 Gray, 577 ; Haven v Grand Junction 
 See, also, Gelpcke V. City of Dubuque, R. Co., 109 Mass. 88; National Ex- 
 id. 175 ; Murray v. Lardner, 2 id. 110 ; change Bauk v. H. P., etc., R. Co., 8 R. 
 Thompson v. Lee Co., 3 id. 327 ; Au- I. 375; Society, etc., v. City of New 
 rora City v. West, 7 id. 82 ; Citv of London, 29 Conn. 174 ; State v. Dela- 
 Kenosha v. Lamson, 9 id. 481 ; Smith field, 8 Paige, 527 ; S. C, 2 Hill, 159 ; 
 V. Sac Co., 11 id. 150; Police Jury t*. Bauk of Rome v. Village of Rome, 19 
 Britton, 15 id. 566 ; Kenicott v. Super- N. Y. 20 ; Brainerd v. New York, etc., 
 visors, 16 id. 452 ; St. Joseph v. Rog- R. Co., 25 id. 490 ; S C, 10 Bos w. 332; 
 ers, 16 id. 644 ; Nugent v. Supervisors, Connecticut Mut. L. Ins. Co. v. Cleve- 
 19 id. 241 ; Clark v. Iowa City, 20 id. land, etc., R. Co., 41 Barb. 9; Blake 
 583; White V. Vermont, etc., R. Co., v. Living.ston Co., 01 id. 148; Morris 
 21 How. (U. S.) 575. Canal Co. v. Lewis, 12 N J. Eq. 323; 
 
 '^Durant v. Iowa Co., 1 Woolw. 69; Winfield v. City of Hudson, 28 N. J. 
 
 Miller V. Rutland, etc., R. Co., 40 Vt. L. 255; De Voss v. Richmond, 18 
 
 399 ; Chapin v. Verniout, etc., R. Co., Gratt. 338 ; Barrett v. Schuyler Co., 44
 
 352 
 
 Private Corporations. 
 
 has been aided not only by the tendencies of judicial opinions, 
 but sometimes by positive legislative enactments.^ 
 
 Mo. 197; Smith v. Clark Co., 54 id. 
 58 ; Porter v. McCollam, 15 Qa. 528 ; 
 Craig V. City of Vicksburg, 31 Miss. 
 217 ; Maddox v. Graham, 2 Mete. (Ky ) 
 5G ; New Albany P. R. Co. v. Smith, 
 2;J lud. 353 ; Johnson v. County, 24 111. 
 92 ; Clapp v. County of Cedar, 5 Iowa, 
 
 15 ; Clark v. City of Janesville, 10 
 Wis. 136 ; Langston V. South (Carolina, 
 etc., R. Co., 2 S. C. 248. See, also, 
 opinion of Mr. Justice Dillon upon 
 the legality of municipal railway aid 
 bonds, 1 Dill. (C. C.) 555. 
 
 ' An interesting statement and his- 
 tory of the law relating to corporate 
 bonds may be found in the opinion of 
 the court of appeals in New Jersey in 
 the case of the Morris Canal and Bank- 
 ing Co. V. Fisher, 9 N. J. Eq. 067. 
 The court say : " That under ordinary 
 circumstances the property of bank 
 notes and of bills and promissory 
 notes payable on their face, or by a 
 blank indorsement to a bearer, follows 
 the possession, has long been settled. 
 By analogy to this class of cases the 
 exigencies of business have from time 
 to time introduced other securities 
 into the same category. The court of 
 king's bench seems to have hesitated 
 to recognize India bonds as belonging 
 'to it. Glyn v. Baker, 13 East, 509. 
 But parliament immediately inter- 
 fered and declared them negotiable 
 instruments. Exchequer bills were 
 so regarded in Wookey v. Pole, 4 B. & 
 Aid. 1. In the case of Gorgier v. 
 Mieville, 3 B. & C. 45, bonds of the 
 king of Prussia, which were shown to 
 be ordinarily passed from hand to 
 hand by delivery and so designed, 
 were held to be like money bills, so 
 as to give a bona fide possessor the 
 legal title. And in the case of Lang 
 V. Smith, 7 Bing. 284, the same prin- 
 ciple was applied to the case of instru- 
 ments issued by the government of 
 Naples, although in that case they 
 were held not to be negotiable, be- 
 cause it was found that they did not 
 usually circulate without a certificate, 
 which did not accompany them. The 
 manner in which these bonds are en- 
 graved with coupons, making the in- 
 terest payable half yearly to the 
 bearer of them, and all the evidence 
 before us, conspire to show that the 
 company which issued them and 
 
 which now disputes the title of the 
 holder, on the ground that they put 
 them into the hands of the seller for a 
 special purpose, which did not author- 
 ize him to dispose of them as he did, 
 really intended them to circulate as 
 they do. 
 
 " This design is indeed quite as ap- 
 parent as if it was engraved on their 
 face in express words. The objection 
 now made, that the legal character of 
 the instrument is such as to frustrate 
 this design certainly comes with a bad 
 grace from the party which put them 
 in circulation. Even as between third 
 parties we suppose the common usage 
 to transfer them by delivery without 
 inquiry as to the title of the transferor 
 would justify us in holding these se- 
 curities to differ from common obliga- 
 tions, in being so far negotiable that 
 the bona fide possessor shall be held to 
 have a good title. But the case is still 
 stronger against the party which made 
 and issued them, with full knowledge 
 of the prevailing usage, and with 
 manifest design that they should be so 
 circulated. To permit such parties to 
 dispute this result of the usage would 
 be to permit them to take advantage 
 of their own wrong; and, besides, the 
 obvious interest of the companies is, 
 that these bonds should be salable free 
 from all questions of equity. They 
 are generally issued for the express 
 purpose of raising money by their sale. 
 To declare them subject to the equi- 
 ties existing in the case of ordinary 
 bonds upon every transfer of them, 
 would be to strike a blow at the credit 
 of the great mass of these securities 
 now in the market, the consequence of 
 which it would be impossible to pre- 
 dict."
 
 CoEPOKATE Contracts. 353 
 
 Sec. 228. Coupons ; their incidents and qualities. — It 18 USUal tO 
 have attached to corporution bonds, and executed in the same 
 manner as the bonds, coupons, or certificates of the amount of in- 
 terest to become periodically due on such bonds and a promise to 
 pay the same, and specifying the time and place of payment. 
 These are designated to be cut off and presented for payment 
 when due. 
 
 Interesting and important questions relating to the character 
 and qualities of such instruments have been presented to the 
 courts. May they be dissevered from the bonds, and transferred 
 like negotiable instruments ? Do they in turn draw interest, if 
 not paid when due ? Are they to be considered as secured by the 
 mortgage or other security given to secure the bond from which 
 they have been detached ? When are they barred by the statute 
 of limitations ? Do they lose their validity, if the bonds are paid 
 or canceled before maturity of the coupons ? 
 
 These and other questions relating to coupons have been deter- 
 mined and settled by the courts.^ 
 
 Thus, it has been held that coupons may be detached from the 
 bonds, and that thus detached they possess the same commercial 
 and negotiable qualities as the bonds themselves ;' that after they 
 are due they bear interest from the time of a demand of payment 
 and refusal ;^ that they are liens upon the land or other secu- 
 rities given to secure the bond ; ' that the right to recover on 
 the same is barred by the statute of limitations, by lapse of time, 
 sufficient therefor after the right of action accrued thereon, and 
 not on the bond itself; and that they, when detached from the 
 bonds, do not lose their virtue or validity, even when they are not 
 due, and the bonds are paid off or canceled before the coupons 
 are due. 
 
 ' City of Kenoslia v. Lamson, 9 Connecticut L. Ins. Co. v. C. C. R. Co., 
 
 Wall. 477 ; Thomson v. Lee Co., Sid. 41 Barb. 9; North Pennsylvania R. 
 
 337; Murrey v. Lardner, 2 id. 110; Co. v. Adams, 54 Penn. St. 94; 
 
 Spooner v. Holmes, 103 Mass. 503; Burroughs v. Richmond, 65 N. C. 234; 
 
 National Exchange Bank v. Hartford, Mills v. Jetferson, 30 Wis. 50. 
 
 etc., R. Co., 8 R. I. 375 ; Johnson v. '^ Sewall v. Brainerd, 38 Vt. 364 ; 
 
 County, 34 111. 75; San Antonio v. Miller v. Rutland, etc., R. Co., 40 id. 
 
 Lane, 33 Tex. 405 ; Arenta v. Commis- 399. 
 
 sioners, 18 Gratt. 750 ; Aurora City v. ^ City of Kenosha v. Lamson, 9 
 
 West, 7 Wall. 105 ; Gelpecke v. City Wall. 477 ; Lexington v. Butler, 14 id. 
 
 of Dubuque, 1 id. 105 ; Whitaker v, 383. 
 Hartford, etc., R. Co., 8 R. L 47; 
 
 45
 
 364 Pkivate Corporations. 
 
 On this subject the supreme court of the United States recently- 
 held : " Most of the bonds of municipal bodies and private corpo- 
 rations in this country are issued in order to raise funds for works 
 of large extent and cost, and their payment is, therefore, made at 
 distant periods, not unfrequently beyond a quarter of a century. 
 Coupons for the different installments of interest are usually 
 attached to these bonds, in the expectation that they will be paid 
 as they mature, however distant the period fixed for the payment 
 of the principal. These coupons, when severed from the bonds, 
 are negotiable and pass by delivery. They then cease to be inci- 
 dents of the bonds, and become, in fact, independent claims ; they 
 do not lose their validity, if for any cause the bonds are canceled 
 or paid before maturity ; nor their negotiable character ; nor their 
 ability to support separate actions ; and the amount for which 
 they are issued draws interest from their maturity. They then 
 possess the essential attributes of commercial paper, as has been 
 held by this court in repeated instances. Every consideration, 
 therefore, which gives efficacy to the statute of limitations, when 
 applied to actions on bonds after their maturity, equally requires 
 that similar limitations should be applied in actions upon the cou- 
 pons after their maturity. Coupons when severed from the bonds 
 to which they were originally attached, are, in legal effect, equiva- 
 lent to separate bonds for the different installments of interest. 
 The like action may be brought upon each of them, when they 
 respectively become due, as upon the bond itself, when the prin- 
 cipal matures ; and to each action, to that upon the bond and to 
 each of those upon the coupons, the same Hmitations must upon 
 principle apply. All statutes of limitations begin to run when 
 the right of action is complete ; and it would be exceptional and 
 illogical to hold that the statute sleeps with respect to claims upon 
 detached coupons, while a complete right of action upon such 
 claims exists in the holder."^ 
 
 ' Clark V. Iowa City, 20 Wall. 585. supreme court of United States, 
 
 See, also, De Cordovah v. Galveston, 4 above cited. 
 
 Tex. 470 ; Underbill v. Trustees, 17 But municipal warrants or orders, 
 
 Cal. 172. though negotiable in form and trans- 
 
 The holder may sue on the coupons ferable by delivery, so that the holder 
 
 without being interested in or pro- may sue thereon in his own name, do 
 
 ducing the bonds to which they were not possess the qualities of negotiable 
 
 originally attached. See decisions in paper, even in the hands of an inno-
 
 Corporate Contracts. 
 
 355 
 
 Sec. 229 Ultra vires — doctrine of.— The doctrme oi ul^a vi7'e8 
 is so frequently referred to in connection witli corporate contracts 
 that a particular consideration of it seems to have been required. 
 This doctrine, as applied at least to municipal corporations, is that 
 they cannot be bound by any contract executed by any of their ofl5- 
 cers or agents, which is entirely beyond the scope of their powers, 
 or entirely foreign to the purposes of their creation, or absolutely 
 immoral or against public policy ; ^ that contracts thus made are 
 absolutely void ; and that no recovery can be had thereon, when 
 the defense set up to the same is the want of power to so con- 
 tract." 
 
 cent holder, so as to preclude inquiry 
 into the legality of their issue, or pre- 
 clude defenses thereto. Clark v. Des 
 Moines, 19 Iowa, 199 ; Clark v. Polk 
 County, id. 248 ; People v. County, 11 
 Cal. 170 ; Sturtevaut v. Liberty, 46 Me. 
 457 ; Emery v. Mariaville, 56 id. 315 ; 
 Smith V. Cheshire, 13 Gray, 318 ; 
 Commissioner v. Keller, 6 Kans. 510. 
 But compare with the foregoing au- 
 thorities, Hyde v. Franklin, 27 Vt. 
 185 ; Dalrymple v. Whitingham, 26 id. 
 345 ; Bank v. Farmington, 41 N. H. 32 ; 
 Inhabitants v. Weir, 9 Ind. 224 ; Taft 
 V. Pittsford, 28 Vt. 286 ; Halstead v. 
 Mayor, etc., 3 N. Y. 430 ; The Floyd 
 Acceptances, 7 Wall. 666 ; People v. 
 Gray, 23 Cal. 125 ; School District v. 
 
 Thompson, 5 Minn. 280; Philadelphia 
 V. Lewis, etc., R. Co., 33 Penn. St. 38; 
 Commonwealth v. Pittsburgh , 34 id, 
 496; King v. Wilson, 1 Dill. (C. C.) 
 555. 
 
 In the case of Everston v. National 
 Bank of Newport, 13 Alb. L. J. 350, the 
 court of appeals of New York recently 
 held, that where coupons of a railroad 
 company were made payable to bearer, 
 they were negotiable and entitled to 
 all the incidents of negotiable paper, 
 such as days of grace ; and that a 
 6o?i«^(Ze purchaser of the same, after 
 the time fixed for payment, but be- 
 fore the days of grace had expired, 
 was entitled to recover on them, al- 
 though they had been stolen. 
 
 ' Martin v. Mayor, 1 Hill, 345 ; Boon 
 V. Utica, 2 Barb. 104 ; Cornell v. Guil- 
 ford, 1 Denio, 510 ; Boyland v. Mayor, 
 etc., 1 Sandf. 27 ; Dill v. Warebam. 7 
 Mete. 438 ; Parsons v. Inhabitants of 
 Goshen, 11 Pick. 396 ; Vincent v. Nan- 
 tucket, 12 Cush. 103; Stetson v. Kemp- 
 ton, 13 Mass 272 ; Spaulding v. Lowell, 
 23 Pick. 371; Clark v. Polk Co. 19 Iowa, 
 248 ; Estep v. Keokuk Co., 18 id. 199 ; 
 Mitchell V. Rockland, 45 Me. 496 ; S. 
 C, 41 id. 363 ; Anthony v. Cleveland, 
 12 Ohio, 375 ; Commissioners v. Cox, 6 
 Ind. 403 ; Inhabitants v. Weir, 9 id. 
 224; Smead v. R. Co., 11 id. 104; 
 Brady v. Mayor, etc., 20 N. Y. 312; 
 Appleby v. Mayor, etc., 15 How. Pr. 
 428 ; Ciiyler v. Rochester, 12 Wend. 
 165 ; Hodges v. Buffiilo, 2 Den. 110. 
 
 But it has been held that, where 
 money has been advanced to a muni- 
 cipal corporation on a contract void for 
 
 want of authority on the part of the 
 corporation to make it, and the corpo- 
 ration afterward refuses to fulfill the 
 contract, the party thus advancing the 
 money may without a demand of it 
 recover it back in an action for money 
 had and received. Dillon v. Ware- 
 ham, 7 Mete. 438. See, also, McCracken 
 V. San Francisco, 16 Cal. 571. 
 
 2 Dill, on Mun. Corp., ^ 381 ; Marsh 
 V. Fulton Co., 10 Wall. 676; Thomas 
 V. Richmond, 12 id. 349 ; Bridgeport v. 
 Housatonic, etc., R. Co., 15 Conn. 475 ; 
 Leavenworth v. Rankin, 2 Kans. 358. 
 But this doctrine seems to be some- 
 what qualified in Allegheny City v. Mc- 
 Clurkan, 14 Penn. St. 81, where it wag 
 held that a municipal corporation may 
 be liable for the unauthorized con- 
 tracts of its officers, when these are 
 publicly entered into with the knowl- 
 edge of the citizens and not objected
 
 356 
 
 Private Coepokations. 
 
 In favor of hona fide holders of securities, the corporation 
 may be estopped to avail itself of irregularities in the exercise of 
 power conferred, but it may always be shown that under no cir- 
 
 to, until the rights of third persons 
 have attached. Starting out with the 
 proposition that a corporation is a mere 
 creature of law, and possesses no 
 powers except such as are expressly 
 conferred upon it, or are necessarily 
 incident to the purpose for which 
 they are formed, Head v. Providence 
 Ins. Co., 3 Cranch C. C. 127 ; Dart- 
 mouth College V. Woodward, 4 Wheat. 
 636 ; Betts v. Menard, 1 111. 14 ; State 
 V. Stebbins, 1 Stew. 299; Beaty 
 V. Knowler, 4 Pet. 152; Beatty v. 
 Marine Ins. Co., 2 Johns. 109; 
 People v. Utica Ins. Co., 15 id. 358 ; 
 2 Cow. 657 ; Fuller v. Plainfield 
 Academic School, 6 Conn. 532 ; Gozzler 
 V. Corp. of Georgetown, 6 Wheat. 597; 
 State V. Mayor of Mobile, 5 Port. 
 279 ; City Council of Montgomery v. 
 Plankroad Co., 31 Ala. 76; Smith v. 
 Morse, 2 Cal. 524 ; Smith v. Eureka 
 Flour Mills, 6 id. 1 ; Winter v. Mus- 
 cogee Ry. Co., 11 Ga. 438 ; Kinzie v. 
 Chicago, 3 111. 187; President, etc., of 
 Jacksonville v. McConnel, 12 id. 188 ; 
 Petersburgh v. Matzker, 21 id. 205 ; 
 La. State B'k v. Orleans Nav. Co., 5 
 La. Ann. 294 ; Baltimore v. Baltimore, 
 etc., E. R. Co., 21 Md. 50 ; Whiman 
 Mining Co. v. Baker, 3 Nev. 386; 
 Downing v. Mt. Washington, etc., Co., 
 40 N. H. 230 ; Strauss v. Eagle Ins. 
 Co., 6 Ohio St. 59 ; While's Bank v. 
 Toledo Ins. Co., 12 id. 601 ; McMasters 
 v. Reed, 1 Grant's (Penn.) Cas, 36, it 
 would seem comparatively easy to de- 
 termine whether an act done by it was 
 nltra vires or not. But the great 
 difficulty that stands in the way is to 
 determine what acts are to be regarded 
 as incident to the powers granted. 
 Many powers are necessarily tacitly 
 annexed to a corporation, as it would 
 be impossible to embrace them speci- 
 fically in the charter or laws which 
 gives them a legal status, so that 
 ordinarily instead of specifically defin- 
 ing what a corporation may do, it is 
 more common to specify those things 
 which it may not do, leaving the courts 
 to regulate and determine the extent 
 of its powers in view of the grant and 
 of the nature, character and purposes 
 of the corporation. It is quite evident 
 
 that the implied powers of a corpora- 
 tion, instituted for the purposes of 
 manufacturing a certain class of goods, 
 would be quite different from those 
 established for the purpose of carry- 
 ing on the business of banking, and, 
 independently of any express pro- 
 visions in the law creating the two 
 classes of corporations, the nature of 
 the business suggests at once the 
 distinction as to the extent and scope 
 of the implied powers possessed by 
 either, and this distinction extends 
 through the whole catalogue of pur- 
 poses for which corporations are 
 formed. In determining then, in a 
 given case, whether an act done by a 
 corporation or a contract entered into 
 by it is ultra vires in the absence of 
 any express prohibition, two things are 
 to be looked to ; First, the laws under 
 which the corporation was formed ; 
 and second, the nature of the business 
 and the expressed purposes for which 
 it was formed. Thus, a turnpike com- 
 pany, incorporated for the purpose of 
 building and maintaining a turnpike, 
 and authorized to take tolls thereon, 
 as an incident to the grant, has author- 
 ity, although not expressly conferred, 
 to erect gates thereon, and toll-houses 
 at suitable and proper places for its 
 own protection, and under its authority 
 to take lands for the construction of 
 the road, would also have authority 
 to take such land as is necessary for 
 the erection and maintenance of such 
 toll-houses, and the reason is that the 
 grant would be valueless unless it 
 could adopt such reasonable precau- 
 tious for the collection of its tolls, and 
 every thing reasonably necessary, and 
 secure a beneficial exercise of the 
 grant, will be presumed to have been 
 impliedly granted. Wright v. Carter, 
 27 N. J. L. 76 ; Redge Turnpike Co. v. 
 Staener, 6 W. & S. (Penn.) 378. But a 
 corporation established for such a 
 purpose does not, as an incident to its 
 grant, possess the power to establish 
 a line of stages thereon, because by 
 no possible line of reasoning or con- 
 struction can the latter business be 
 said to be an incident of the former. 
 Wiswall V. Greenville, etc., Plankroad
 
 Corporate Contracts. 
 
 357 
 
 cumstances could the corporation lawfully make a contract of the 
 character in question. This was the early rule of the English 
 cases, in the application of the doctrine of ultra vires to private 
 
 Co., 3 Jones' (N. C.) Eq. 183 ; Dawning 
 V. Mount Washington Co., 40 N. H. 
 230. In construing a charter or law 
 under which a corporation is formed, 
 the courts will not generally be in- 
 clined to construe it either strictly or 
 liberally but rather according to the 
 fair and natural import of it with refer- 
 ence to the objects and purposes of 
 the corporation, Downing v. Mount 
 Washington, 40 N. H. 330 ; and such 
 as will give them full effect. The 
 Enfield Toll Bridge Company v. The 
 Hartford and New Haven R. R. Co., 17 
 Conn. 454. There is no rule or prin- 
 ciple by which an act creating a corpo- 
 ration for certain specific purposes is 
 to be strictly construed as prohibitory 
 of all other dealings or transactions 
 not coming within the exact scope of 
 those designated, nor on the other 
 hand that it shall be construed so 
 liberally, as to give it authority to 
 carry on business entirely foreign 
 thereto ; but its main business is to 
 be confined to that class of operations 
 which properly appertain to the gen- 
 eral purposes for which its charter 
 was granted, or for which, under the 
 general law relating to the forma- 
 tion of such companies, it was 
 formed. It may enter into transac- 
 tions which are incidental or aux- 
 iliary to its main business, or which 
 are or by the force of circum- 
 stances become necessary, expedient 
 or profitable in the prosecution of its 
 business, and the care and manage- 
 ment of the property which it was au- 
 thorized to hold under the law creat- 
 ing it. Brown v. Winnisimmet Co., 
 11 Allen, 326. Thus, in the case last 
 cited, where a corporation was estab- 
 lished with power to establish and 
 maintain a ferry, and to own and pos- 
 sess vessels, steamboats and other per- 
 sonal property, not exceeding a cer- 
 tain amount in value, it was held 
 that the court could not say that a 
 contract by the company to let one of 
 its steamboats at a certain rate per 
 day, to be used for no specified length 
 of time, and in no specified place, is in 
 excess of its corporate powers, if there 
 is no proof that the steamboat icas not 
 
 necessary or proper to be iised in the 
 prosecution of the business of the ferry 
 or that by reason of owning it the com- 
 pany exceeded the limits of property 
 which it teas authorized to hold. It 
 would be destructive to the purposes 
 for which corporations are formed, to 
 hold them up to a strict construction 
 of the grant of authority, and to hold 
 that they should not be permitted to 
 exercise all those powers fairly inci- 
 dent to the business which they are 
 organized to perform, and to say that 
 if they exceeded the express powers 
 conferred upon them their acts should 
 be ultra vires, and void ; and no such 
 rule obtains, and acts of a corporation 
 not entirely foreign to the purposes of 
 its institution are not void, although it 
 may, in some respects, have exceeded 
 its authority. Miners' Ditch Co. v. 
 Zellerbach, 37 Cal. 543 ; McPherson 
 V. Foster, 43 Iowa, 48 ; State Board 
 of Agriculture v. Citizens Street Rail- 
 way, 47 Ind. 407. For an abuse or an 
 excessive exercise of its power the state 
 may interpose and revoke the grant, 
 but a person, who was a party to such 
 a transaction or contract cannot avoid 
 his liability upon that ground. The 
 rule was clearly and forcibly ex- 
 pressed in a Massachusetts case, 
 Monument National Bank v. Globe 
 Works, 101 Mass. 57, substantially 
 that the doctrine of ultra vires has 
 full application to avoid only those 
 transactions which involve an attempt 
 to exercise a power ichich has not 
 been confurred on the corporation ; and 
 that the abuse in a particular instance 
 of a general power which a corpora- 
 tion does possess cannot be shown to 
 avoid a contract made by it, either by 
 the corporation or the person with 
 whom it dealt. Thus if a corporation 
 has power to borrow monej' for some 
 purposes, and has done so, it cannot 
 impeach the security or evidence of 
 debt given therefor upon the ground 
 that the money was applied to a pro- 
 hibited purpose. Thompson v. Lam- 
 bert, 44 Iowa, 239 ; Bradley v. Bal- 
 lard, 55 111. 413 ; Whitney Arms Co. 
 V. Barlow, 63 N. Y. 68. 
 
 In order to be operative as a defense.
 
 358 
 
 PjRIVATE C0KPOKATION8. 
 
 corporations, viz. : that such corporations have the powers only 
 which are conferred by the charter, the incorporating statutes or 
 the constating instruments, and that they can only be bound by 
 
 there must be a total want of power, 
 and where, on their face, the dealings 
 of a corporation are within the scope 
 of its charter, they will be presumed 
 to be legal and authorized until some 
 proof is given to the contrary. Like 
 individuals, corporations are entitled 
 to the benefit of the presumption that 
 Imputes innocence rather than wrong 
 to the conduct of their affairs. Mon- 
 tague V. Church School District, 34 N. 
 J. L. 218 ; Chautauqua County Bank v. 
 Risley, 19 N. Y. 369 ; De Graff v. Amer- 
 ican Linen Thread Co., 21 id. 124 ; 
 McDaniels v. Flower Brook Manuf. Co., 
 22 Vt. 274 ; Farmers' Loan and Trust 
 Co. V. Clowes, 3 N. Y. 470 ; N. Y. 
 Fireman's Ins. Co. v. Sturges, 2 Cow. 
 664 ; Safford v. Wyckoff, 4 Hill, 442 , 
 Bates V. State Bank, 2 Ala. 451 ; Bank 
 of Kentucky v. Schuylkill Bank, Pars. 
 Sel. Cas. 180 ; Ex parte Grady, 8 L. T. 
 (N. S.) 98. There are, as we have 
 seen, certain incidental powers pos- 
 sessed by corporations, but there can 
 be no incidental power that is not 
 appurtenant to the principal, and not 
 possessed of a similar character, nor can 
 there be any incidental power which 
 would have been refused as a principal, 
 or any thing on the most liberal con- 
 struction, which is not necessary and 
 proper to carry the principal express 
 powers into effect. Sumner v. Marcy, 
 3 Wood. & M. 105. And in the case 
 last cited it was held that the inci- 
 dental power of a businesBS corporation 
 to borrow money did not extend to 
 justify it in purchasing a controlling 
 interest in a bank so as to be able to 
 lend to themselves. If a corporation, 
 as a dock company, is clothed with 
 authority to buy, improve or dispose 
 of real property, the power to improm 
 will be treated as extending the powers 
 of the company to the performance of 
 any act whether on or off the land, 
 the direct and proximate tendency of 
 which will be to enhance its market 
 value. Vandall v. South San Fran- 
 cisco Dock Co., 40 Cal. 83. So the 
 building of saw-mills and a hotel for 
 those having business at the location 
 of the company was held to be within 
 
 the power of a corporation owning a 
 very large body of land and authorized 
 by their charter to aid in the develop- 
 ment of minerals and other materials 
 and to promote the clearing and settle- 
 ment of the country. Watt's Appeal, 
 78 Penn. St. 370. So it has been held 
 that the power to mortgage is so far 
 incidental to or implied from a power 
 to acquire and hold real estate, that an 
 agricultural society which has bor- 
 rowed money upon a mortgage of its 
 fair grounds, for money borrowed for 
 the erection of buildings thereon, is 
 estopped from repudiating the mort- 
 gage as ultra vires. West v. Madison 
 County Agricultural Board, 82 111. 205 
 But it has been held that for an agri- 
 cultural society to establish a horse 
 fair for the purpose of testing the 
 speed of horses by trotting, and to pay 
 premiums for such as excel, out of a 
 fund raised by assessments on the 
 owners of horses entered, and by an 
 admission fee to the grounds is ultra 
 mres and illegal. Bronson Agricul- 
 tural, etc. , Ass'n v. Ramsdell, 24 Mich. 
 441. And without stopping to enu- 
 merate the instances in which acts of 
 corporations have been valid or invalid 
 as being within or beyond the express 
 or implied powers conferred upon it 
 it may be said that in general a corpo- 
 ration created for a specific purpose can 
 make only such contracts as are neces- 
 sary, either directly or incidentally, to 
 enable it to answer that purpose. In 
 deciding, therefore, whether such a 
 corporation can make a particular con- 
 tract, the questions are, first, whether 
 its charter, or some statute binding 
 upon it, forbids or permits it to make 
 such a contract ; and if the charter 
 and valid statutory law are silent upon 
 the subject ; then second, whether the 
 power to make such a contract may 
 be implied on the part of the corpora- 
 tion as directly or incidentally neces- 
 sary to enable it to fulfil the purpose 
 of its existence ; or whether the con- 
 tract is entirely foreign to that pur- 
 pose. Weckler v. First Nat. Bank, 42 
 Md. 581.
 
 Corporate Contracts. 359 
 
 contracts by their agents or otherwise that are within the limits 
 of the powers thus possessed. And this seems to have been tlie 
 American doctrine.^ 
 
 Thus it was held that a company incorporated for the purpose 
 of establishing and conducting a line or lines of steamboats, ves- 
 sels and stages, or other carriages for the conveyance of passen- 
 gers between certain places, could not make a valid contract for 
 the breaking of ice for the passage of vessels, and the towing of 
 vessels through the track thus broken to a place other than desig- 
 nated, and that an action could not be maintained upon such a 
 contract against such corporation if the defense of a want of 
 power to contract was made f and it has also been held that a 
 corporation was not estopped from making a defense on the 
 ground of ultra vires, even though it had received the considera- 
 tion or benefits of the contract." \Yhat then is the present doc- 
 trine on the subject of ultra vires f Is a contract entered into on 
 the part of a corporation void under all circumstances if it exceeds 
 the powers conferred upon it ? Is it void if it exceeds the char- 
 tered powers of the corporation, provided the corporation has 
 received the consideration of the contract, or the benefits result- 
 ing from it ? Is it void if it is a promissory note or other nego- 
 tiable instrument in the hands of a honajide holder, given as 
 the consideration of a contract, or for property delivered? "Would 
 it be void if executed by an agent in excess of his authority, 
 where the corporation has received the consideration ? What 
 remedy exists in case of the attempt to act or contract on the 
 part of a corporation or its agents in excess of the powers con- 
 ferred upon it or them, and who is entitled to it ? These are 
 among the numerous questions presented by the doctrine of rdtra 
 vires, in its application to corporations. We will proceed to con- 
 sider them and the modem doctrine relating to that subject. 
 
 ^Earl of Shrewsbury v. North Staf- Agency Co., 24 Conn. 159 ; Berrv v. 
 
 fordshire R. Co., 85 L. J. Ch. 156; Yates, 24 Barb. 199. 
 
 Taylor v. Chichester, etc., R. Co., L. R., * Gage v. New Market R.Co., 18 Q. B. 
 
 2 Ex. 356. 457 ; 14 Eng. L. & Eq. 57; Preston v. 
 
 ' Pennsylvania Co. v. Dandridge, 8 laverpool R. Co.. 5 H. L. C. 605 ; Al- 
 
 G. & J. 24'8. See, also, Abbot v. Bal- bert v. Savings Bank, 1 Md. Ch. 407 ; 
 
 timore Steam Jack. Co., 1 Md. Ch. Ohio L. Ins. Co. v. Merchants' Ins. Co., 
 
 542; Mechanics' Bank v. Meriden 11 Humph. 1; Guest v. Poole R., L. 
 
 R., 5 C. P. 553.
 
 360 Private Corporations. 
 
 Sec. 230. Different senses in which the term ultra vires is used. — In 
 a recent case in California, the supreme court of that state has 
 referred to the different senses in which the term ultra vires is 
 used. Sawyer, C. J., observed: "An act is said to be ultra 
 vires when it is not within the scope of the powers of the corpo- 
 ration to perform it under any circumstances or for any purpose. 
 An act is also sometimes said to be ultra vires with reference to the 
 rights of certain parties, when the corporation is not authorized to 
 perform it without their consent ; or with reference to some specific 
 purpose when it is not authorized to perform it for that purpose, 
 although fully within the scope of the general powers of the cor- 
 poration, with the consent of parties interested, or for some other 
 purpose. And the rights of strangers dealing with corporations 
 may vary, according as the act is ult7'a vires in one or the other 
 of these senses. All these senses must be constantly borne in 
 mind in considering a question arising out of dealings with a 
 corporation. When an act is ultra vires in the first sense men- 
 tioned, it is generally, if not always, void in toto, and the corpo- 
 ration may avail itself of the plea. But when it is ultra vires in 
 the second sense, the right of the corporation to avail itseK of the 
 plea will depend upon the circumstances of the case.' 
 
 We will proceed to consider these two propositions, and to 
 determine, first, the effect of this doctrine of ultra vires in rela- 
 tion to contracts made by the corporation, but in so doing it 
 has exceeded the authority and power which it possesses by vir- 
 tue of the powers conferred upon it by law ; and, secondly, its 
 effect where contracts are made by its officers or agents in excess 
 
 ' The Miners' Ditch Co. v. Zeller- them out. But these bodies have no 
 bach, 37 Cal. 543. As to the doctrine existence independent of the acts 
 of ultra vires see, also, the English which create them, and they are 
 cases, East Anglian, etc., R. Co. v. created by parliament with special 
 Eastern, etc., R. Co., 11 C. B. 775 ; and limited powers, and for limited 
 Brice's Ultra Vires, 28 et seq. ; Shrews- purposes. Whether parliament has 
 bury, etc., R. Co. v. London, etc., R. wisely limited their powers for pur- 
 Co., 22 L. J. Ch. 682. In the latter poses of their incorporation is not for 
 case it is observed : " The great un- us to consider. The fact of their 
 dertakings of these (i. e., railway and being endued with such powers and 
 similar) companies could not be car- incorporated for such purposes only 
 ried out by private enterprises, and shows that parliament did not think 
 parliament has, therefore, with a view fit to intrust them with more extended 
 to public good, authorized the consti- powers, or to incorporate them for 
 tution of large bodies, acting by di- other purposes." 
 rectors, for the purpose of carrying
 
 Corporate Contracts. 361 
 
 of and beyond the authority confen-ed upon them for that pur- 
 pose, by the creating acts or constating instruments. 
 
 Sec. 231. Are all contracts void that are entered into by corporations, 
 which are ultra vires? — In considering this question it may be 
 proper to state that a distinction has been made between contracts 
 executed or partly executed, and those that are not either in 
 whole or in part executed. We will present the following hypo- 
 thetical case for illustration: Suppose a banking institution is 
 duly incorporated with the ordinary powers and privileges of 
 such a corporation, and it is finally resolved by such bank, in the 
 usual and authorized mode of corporate action, that it will 
 embark in the purchase of grain ; and that to such a course and 
 policy, on the part of the corporation, there is not a dissenting 
 stockholder, or other person having any interest in the same. 
 In carrying out this resolution, we will suppose that the corpora- 
 tion purchases, principally on time, a large quantity of wheat, for 
 which it pays the seller only a small portion of the consideration, 
 and gives its obligation in the form of a negotiable note or bill 
 for the balance. If the corporation should be successful in the 
 investment, a large sum may be realized and the stockholders 
 enriched thereby ; the obligation to pay for the wheat would be 
 canceled, and the members of the corporation pocket the divi- 
 dends thereby produced, with entire satisfaction. But suppose the 
 investment turns out unfortunate, and a large loss is sustained, 
 and that the obligation given for the wheat is repudiated, on the 
 ground that the corporation had no authority to make such a con- 
 tract and that the excess of power in this respect must be presumed 
 to be known by the other party to the contract and that the stat- 
 utes and by-laws are public acts and records, of which parties 
 dealing with it are required to take notice ; and that such acts or 
 instruments clearly show that the corporation was exceeding the 
 powers conferred upon it. Can such a defense be maintained in 
 an action against the bank on the obligation given ? 
 
 If maintainable against the payee, would it be against a hona 
 
 fide holder, without notice of the purposes for which the note or 
 
 bill was given ? Against the doctrine of ultra vires, in such cases 
 
 as a defense, Comstock, C. J., observes : " If the enterprise is 
 
 46
 
 362 Private Corporations. 
 
 successful, the corporation and its stockholders gain by the result. 
 If a depression occurs in the market, and disaster is threatened, 
 the doctrine that a corporation can never act outside of its charter 
 enables it to say, ' this is not our dealing,' and the money used in 
 the dealing may be unconditionally reclaimed from whatever par- 
 ties have received it for value ; while the injured dealer must seek 
 his remedy against agents, perhaps, irresponsible or unknown. 
 Corporations may thus (if the doctrine of ultra vires in such 
 cases is adopted) take all the chances of gain, without incurring 
 the hazard of loss. Familiar maxims of the law must be reversed. 
 In the relation of private principal and agent, the adoption of the 
 agent's unauthorized dealings is equivalent to an original author- 
 ity ; and the adoption is perfect when the principal receives the 
 proceeds of that dealing. Corporations may practically act in the 
 same manner. * * * But is it true that all contracts for pur- 
 poses not embraced in their charters are illegal, in the appropriate 
 sense of the term ? This proposition I must deny. Undoubtedly, 
 such engagements may have vices, which sometimes infect the 
 contracts of individuals. They may involve a malum in se, or a 
 malum prohibitum, and may be void for any cause which would 
 avoid the contract of a natural person. But where no sucli vices 
 exist, and the only defect is one of power, the contract cannot 
 be void because it is illegal or immoral. Such a doctrine may 
 have some slight foundation in the earlier English railway cases,' 
 but it was never establisUed, and is not now received in the Eng- 
 lish courts.' 
 
 " The books are full of cases upon the powers of corporations 
 and the effect of dealing in a manner and for objects not intended 
 in their charters ; but with the slight exception named, there is not 
 only an entire absence of adjudged cases, even of judicial opinion 
 or dicta, for the proposition that mere want of authority renders 
 a contract illegal. Such a proposition seems to me absurd. The 
 words ' ^lltra vires^ and ' illegality,' represent totally different 
 and distinct ideas. It is true that a contract may have both these 
 defects, but it may have one without the other. For example, a 
 
 'The East Anglian R. Co. v. The * Tj^g Mayor, etc., v. The Norfolk 
 
 Eastern Counties R. Co., 7 Eng. L. & R. Co., 30 Eng. L. & Eq. 120 ; Eastern 
 
 Eq. 509 ; Macgregor v. Deal, etc., R. Counties R. Co. v. Hawkes, 35 id. 8. 
 Co., 16 id. 180.
 
 Corporate Contracts. 
 
 363 
 
 bank has no authority to engage, and usually does not engage, in 
 benevolent enterprises. A subscription made by authority of the 
 board of directors and under the coi-porate seal, for the building 
 of a church or college, or an alms-house, would be clearly ultra 
 vires, but it would not be illegal.^ If every corporator should 
 
 ' The question as to wbetlier an act 
 done in a different mode from that 
 prescribed by the charter is legal, de- 
 pends upon the circumstance whether 
 by usage the company had adopted 
 such mode of executing its powers, 
 and if so, although the charter made 
 is not pursued, the company is bound. 
 This rule was well illustrated in Buck- 
 ley V. Derby Fishing Co., 2 Conn. 253. 
 In that case an action was brought 
 upon a policy of insurance signed by 
 the president of the company and 
 countersigned l>y the assistant. The 
 act authorizing the company to pursue 
 the business of insurance provided 
 that " all policies of insurance made 
 by said company, signed by the presi- 
 dent, or in his absence by the assistant, 
 and countersigned by the secretary, shall 
 be binding on said company according 
 to the terms and tenor thereof." The 
 defendants insisted that they were not 
 liable upon the policy, because the 
 secretary did not countersign it. The 
 plaintiff showed by the books and 
 records of the company, a practice on 
 its part to issue policies in this way, 
 and the court held that by such a 
 course of practice the company ren- 
 dered itself liable, aWiough the policy 
 was not executed in the mode required 
 by the charter. " I consider it to be 
 undoubted law," said Hosmer, J., 
 "that a corporation may incur a 
 liability different from the prescrip- 
 tions of its charter like [individuals ; 
 it is responsible for the manner in 
 which it permits its agents to hold it 
 out to the world * * * what is 
 usually done by the agents of a corpo- 
 ration in the transaction of the busi- 
 ness confided to them, it is a fair pre- 
 sumption that the stockholders are 
 cognizant of. Although they reside 
 in different places, they have an 
 interest in acquainting themselves 
 with the proceedings of the corpora- 
 tion. The office where the business 
 is done is open ; the books of the 
 company are subject to their inspec- 
 tion ; and it would be absurd to sup- 
 
 pose them ignorant of those public 
 facts, relating to the ordinary trans- 
 action of the corporate concerns, with 
 which mankind in general are ac- 
 quainted. In short, every transaction 
 of the company, established by proof 
 of direct authority from the stock- 
 holder, or implied from the usual 
 modes of doing their business, which 
 is not against law, or a prohibition con- 
 tained in their charter, is obligatory 
 upon them." 
 
 Gould, J., said : " It is observable, 
 that the company are not, in this case, 
 claiming a right, through the agency 
 of an individual, whose authority to 
 act for them is denied by the adverse 
 party. It is, therefore, unnecessary 
 to inquire whether in such a case evi- 
 dence, like the present, could be ad- 
 mitted in their favor or not. Here the 
 demand is against the company upon 
 a contract executed in their name by 
 Oillet, as president, and Wheeler, as 
 assistant ; and both of whom, it is 
 claimed, were the company's agents 
 for that purpose. But to this claim it 
 is replied, first, that by the terms of the 
 act of incorporation, the company can- 
 not be bound by any contract unless it 
 is signed by the president and counter- 
 signed by the secretary ; and, there- 
 fore, that this policy, not being so 
 executed, does not bind them, even 
 admitting that 'Wheeler, as assistant, 
 was, de facto, employed as their agent 
 for the purpose of countersigning. 
 
 A corporation certainly cannot, by 
 its own act, enlarge its own capacities, 
 powers or rights ; but it would be 
 strange to say that it cannot thus 
 voluntarily incur liabilities. If a cor- 
 poration, by a corporate act, appoints 
 an agent under any name or title what- 
 ever for the purpose of making, in its 
 own behalf, any contract which it has 
 a right to make, can the corporation 
 itself impeach such a contract made in 
 its name by that agent by alleging its 
 own want of power to make such an 
 appointment, or to contract by such an 
 agent? The present objection must, to
 
 364 
 
 Pkivate Corporations. 
 
 expressly assent to such an application of the funds, it would still 
 be ult/ra vires, but no wrong would be committed and no public 
 interest violated. So, a manufacturing corporation may purchase 
 
 avail the defendants, go to this extent. 
 But such a doctrine is in violation of 
 all principle. A corporate body, by 
 transgressing the limits of its charter, 
 may, doubtless, incur a forfeiture of 
 its privileges and powers ; but who 
 ever imagined that it could thus ac- 
 quire an immumty to the prejudice of 
 third persons ? The clause in which 
 the act of incorporation prescribes the 
 mode of signing contains no negative 
 words ; i. e. no provision that a con- 
 tract signed in any other mode than 
 that prescribed shall not bind the com- 
 pany. It would be highly unreason- 
 able, therefore, to construe that mode 
 SlS exclusive lo th.Q injury of strangers 
 — • especially as the statute is not in its 
 nature a public one, and third persons 
 are, of course, neither bound nor pre- 
 sumed to know its provisions. The 
 case Ex parte Meynot, 1 Atk. 196, 
 though not in point, contains a doctrine 
 which, I think, has an important bear- 
 ing upon the present question. That 
 was an application to the lord chancel- 
 lor to supersede a commission of bank- 
 ruptcy which had been taken out 
 against the petitioner — he being a 
 clergyman. The application was 
 founded upon the statute 21 Hen. 8, 
 by which clergymen are prohibited 
 under heavy penalties from trading ; 
 and their contracts, as traders, are de- 
 clared ' ' utterly void and of no effect." 
 Lord Hardwicke, however, dismissed 
 the petition ; and among other things 
 observed : " If a man with his eyes 
 open will break the law, that does not 
 make void the contract. It is, un- 
 doubtedly, very improper for a person 
 to say I have broke the law, and there- 
 fore, I am exempt from any remedy a 
 creditor may have against me." "I 
 am inclined to be of opinion that the 
 contract shall be void as to the parson 
 Jiimself only ; for it would be a most 
 extraordinary construction of the 
 statute that the bargain shall be void 
 for his own benefit ; and it would be 
 very mischievous to construe the act 
 in such a manner." " Shall the bar- 
 gain be void for the parson's benefit ? " 
 "This part of the act ought to be so 
 construed as to make it a penalty on 
 
 himself only." This reasoning, I re- 
 peat, applies strongly, by analogy, to 
 the question before the court. And if 
 the petitioner, in that case, was bound 
 by his contract, notwithstanding the 
 strong language of the statute of 21 
 Hen. 8, a fortiori, it would seem, ought 
 the policy, in the present case, to bind 
 the company if Wheeler was actually 
 their agent for the purpose of coun- 
 tersigning — whether the contract was 
 executed in the form prescribed by the 
 act of incorporation or not. 
 
 We come, then, to the second ob- 
 jection made by the defendants, to's. ; 
 that a corporation aggregate cannot 
 appoint an agent except by deed ; and 
 that, therefore, no other evidence than 
 that of a deed is admissible to prove 
 Wheeler's authority to countersign the 
 policy. The first proposition is gener- 
 ally, though not universally true, as to 
 express authorities ; but it applies to 
 no other. If, then, the plaintiffs were 
 attempting to prove a specific act of 
 the company, expressly conferring 
 upon Wheeler the authority, under 
 which he is claimed to have acted, 
 the defendants might properly insist 
 that the fact could be proved in no 
 other way than by proof of a corporate 
 act. But implied authorities, which 
 are almost as familiar in the law as im- 
 l^lied promises, and which rest upon 
 mere presumptions are always proved 
 by circumstantial or collateral facts 
 and can be proved in no other way. 
 Usual or frequent practice, in business, 
 is the ordinary evidence in such cases. 
 The general principle is that one per- 
 son, who by permitting another to act 
 ostensibly as his agent, has given him a 
 credit with the public as such, shall, 
 in favor of third persons, be pre- 
 sumed to have authorized the latter to 
 act in that character, and be precluded 
 from averring the contrary. This pre- 
 sumption is established by proof of 
 usage or practice. As that the one has 
 been in the habit of acting in the name 
 and in behalf of the other, and that 
 the latter, either by positive acts or by 
 acquiescence, impliedly recognized the 
 agency. And the presumption, to be 
 available to any purpose, necessarily
 
 Corporate Contracts. 
 
 365 
 
 ground for a school-house, or a place of worship for the intel- 
 lectual, religious and moral improvement of its operatives. It 
 may buy tracts and books of instruction for distribution among 
 them. Such dealings are outside of the charter ; but so far from 
 being illegal and wrong, they are, in themselves, benevolent and 
 praiseworthy. So, a church corporation may deal in exchange. 
 This, though itltra vires, is not illegal, because dealing in exchange 
 is not, itself, an unlawful act." ^ It is evident that by the plainest 
 principles of justice, corporations making contracts in such cases, 
 and receiving the consideration and the full benefits of the same, 
 should not be allowed to defeat the obligations made by them 
 therefor ; or, at least, should not be permitted with impunity to 
 appropriate the property of another received by virtue of such a 
 contract, and, under a plea of ultra vires, defeat any recovery 
 therefor. 
 
 embracea all legal requisites to the crea- 
 tion of a valid authority. Hence, a 
 deed, a by-law, or a record, may as well 
 be presumed as any other fact. The 
 Mayor of Kingston-upon-Hull v. Hor- 
 ner, Cowp. 103. 
 
 It may be objected that the usage in 
 this case, not being ancient, can afford 
 no evidence of WJieelefs authority. 
 But the rule requiring a usage to be 
 ancient to found a presumption is not 
 in pari materia. When a title or in- 
 terest is to be presumed from posses- 
 sion, enjoyment or user, lapse of time 
 is essential. But that rule has a dif- 
 ferent object, and is founded upon 
 different principles from any involved 
 in the present question. It is designed 
 to quiet long and uninterrupted posses- 
 sion, enjoyment or xiser, by discourag- 
 ing stale and dormant claims, and can 
 have no application at all to questions 
 like the present. 
 
 But how, it is asked, can the usage 
 of a corporation which is an invisible 
 body, existing only in contemplation 
 of law, be proved or even known ? I 
 answer, by the acts of its officers or ac- 
 knowledged agents, in the manage- 
 ment of its ordinary concerns. This 
 point was conceded by counsel and de- 
 cided by the court in Rex v. Bigg, 3 
 P. Wms. 419 ; and in the case of The 
 
 Mayor of Kingston-upon-Hull v. Hor- 
 ner, ante ; this species of evidence was 
 admitted to establish a claim in favor 
 of a corporation. Now, the evidence 
 offered in the present case, whether 
 sufficient to prove the fact or not, cer- 
 tainly conduces to prove that Wheeler 
 was in the habit of countersigning con- 
 tracts as agent for the company ; that 
 his acts, in that character, have been 
 recognized as valid by the proper 
 officers of that body ; and that the cor- 
 poration knowing or having in its own 
 books and records the means of know- 
 ing the fact, has acquiesced in his 
 agency and in the present instance 
 taken advantage of it by retaining the 
 premium note." In White v. The 
 Derby Fishing Co., 3 Conn. 26, it was 
 held that banks and other corporations 
 of similar nature, authorized by their 
 act of incorporation to contract in a par- 
 ticular mode, may by a course of prac- 
 tice render themselves liable on in- 
 struments executed in a different mode. 
 Thus where the statute provided that 
 all notes and contracts signed by the 
 president and countersigned by the 
 secretary should be valid, it was held 
 that an issue of notes and bills 
 signed by the president, bound the 
 corporation. 
 
 iBissel V. The Michigan, etc., R. Co., 22 N. Y. 264-269.
 
 366 Pkivate Corpokations. 
 
 Seo. 232. Same continued. — The right of recovery in such cases 
 is sometimes made to rest upon the unanimous consent and 
 approval of the stockholders. But in case this is not expressly 
 given, it would probably be presumed from an acceptance of the 
 fruits and profits of an enterprise thus entered upon ultima vires, 
 and of the benefits and consideration of a contract made by the 
 corporation in the prosecution of such enterprise. 
 
 This would, undoubtedly, be a ratification of the contract by 
 them. But if such corporation, by itself or its agents, engages in 
 such an enterprise, and in the usual way issues its obligations, 
 would the failure of a member to give his express or implied 
 assent thereto enable him or the corporation to make ultra vires 
 a defense to such an obligation, the consideration of which has 
 been received and appropriated by the corporation, for a purpose 
 foreign to the original objects and purposes of its creation ? If, 
 as has been suggested, the contract has-been executed and the 
 corporation has received the consideration of the same, and more 
 especially if the stockholder has, with a knowledge of the trans- 
 action, acquiesced therein, and received his share of the dividends 
 and profits of the enterprise, this would, undoubtedly, conclude 
 him and the corporation from a defense on the ground of ultra, 
 vires. But a member, under other circumstances, has an unques- 
 tioned right to restrain the execution of an undertaking, or a 
 contract clearly iiltra vires^ 
 
 Sec. 233. Distinction between executed and unexecuted contracts in 
 relation to the doctrine of ultra vires We have noticed that corpo- 
 rations may enter into contracts that will become binding, although 
 such contracts may exceed its authorized powers. Whether ab- 
 
 ' It may be the duty of tbe member well settled, but, in order to warrant 
 under such circumstances to restrain the interference, there must be a gross 
 the unlawful act in such cases, which abuse of its powers, or acts, clearly in 
 be may do by injunction ; and in the excess thereof, wJiich mil result injuri- 
 absence of such proceeding, be estop- oxisly to the com,plainant. Jones v. 
 ped from insisting upon the defense of Mayor, etc., of Little Rock, 25 Ark. 
 ultra vires as he might be presumed 301 ; Lane v. Schomp, 30 N. J. Eq. 
 to acquiesce in the execution of con- 82; Union Pacific, etc., R. R.Co. v. Lin- 
 tracts to which he expressed no dis- coin County, 3 Dill. (U. S. C. C.) 300 ; 
 sent, if executed in the usual manner. St. Louis v. Weber, 44 Mo. 547 ; 
 The power of a court of equity to re- Robinson v. Chartered Bank, L. R., 1 
 strain a corporation from doing acts Eq. 32 ; Bach v. Pacific Mail Steam- 
 which are in excess of its powers is ship Co., 12 Abb. Pr. (N. S.) 373.
 
 Corporate Contracts. 367 
 
 solutely void or not may depend upon the question whether such 
 contract is prohibited by tlie positive provisions of the statute or 
 public policy. If it exceeds the express or implied powers of the 
 corporation, it does not, from the preponderance of authority, 
 necessarily follow that it is void or even voidable. A stockholder 
 may, in such a case, restrain the act. But in the absence of such 
 proceeding, and especially where the act has received the unani- 
 mous assent of the corporators, it would be treated as valid and 
 binding. 
 
 Again, if the corporation, by virtue of a contract, has received 
 and appropriated the fruits of a contract, or appropriated property 
 acquired thereby, it would not usually be heard to object that it 
 had not authority to act. To allow such a plea as a defense to an 
 obligation would be to allow it to take advantage of its own 
 wrong. It has been replied to such a conclusion, that a party 
 dealing with a corporation is supposed to know of the extent of 
 its powers, and that, therefore, a contract entered into with the 
 corporation, in excess of such powers, makes him equally a wrong- 
 doer. But such acts in excess of corporate authority are not 
 tainted with criminality, nor are they necessarily illegal, as we have 
 seen, on that ground. 
 
 On the other hand they may be entirely laudable and praise- 
 worthy, although in excess of chartered powers. Can a corpora- 
 tion, then, receive the consideration of an obligation, or the 
 property of another, even for purposes foreign to its institution, 
 and appropriate the same, and refuse payment therefor? Or 
 can the corporation in case of an agreement, made in excess of 
 corporate powers, but not executed, no consideration having ac- 
 tually passed between the parties (such as a contract between a 
 railroad company and an individual, by which the latter is to con- 
 struct steamboats, to be operated by the company in a manner 
 not embraced within the powers conferred upon it), refuse to com- 
 ply with such agreement on its part, and make a successful de- 
 fense to any claim for damages thereon by the other party, by 
 reason of the breach of such contract, on the ground that such 
 contract is ultra vires f ^ 
 
 "In Morgan V. Donovan, 58 Ala. 241, railroad between Mobile and New 
 it appeared that an act chartering a cor- Orleans, empowered it to acquire and 
 poration to construct and operate a hold such real property as might be
 
 368 
 
 Private Corporations. 
 
 Sec. 234. Same continued. — In answer to the first question, and 
 to illustrate the law on the subject, we will suppose that a corpora- 
 tion is duly organized to construct and operate a railroad from 
 
 necessary therefor, and to obtain any 
 steamboats, piers, " wharves," and 
 the appurtenances thereunto belong- 
 ing that the directors might deem 
 necessary, profitable, and convenient, 
 to use and manage in connection with 
 said railroad. The corporation exe- 
 cuted certain deeds of trust of "the 
 lands occupied by said railroad," etc., 
 " in connection with said portion of 
 said railroad situate within the limits 
 of said cities," etc., or on the "line 
 thereof ; " also of " all depots, station- 
 houses, wharves," etc., " used in con- 
 nection with its said railroad, together 
 ■with all steamboats and personal 
 property," etc., " used exclusively for 
 constructing, maintaining, operating, 
 or conducting the business of said 
 railroad." It was held (1.) that, in 
 these deeds of trust, propei-ty acquired 
 and owned, and not used or to be used 
 in connection with the railroad, and in 
 promotion of the direct and proximate 
 purposes of its construction did not 
 pass; (2.) that property bought of an 
 opposition steamship line, not with a 
 mew of employing it in connection with 
 the business of the road, but to vyithdraw 
 it from business, thereby preventing 
 competition, was not authorized to be 
 acquired by the charter, a7id not con- 
 veyed by the granted clauses in said 
 deeds of trust. In a California case, 
 Mahouey v. Spring Valley Water 
 Works, 53 Cal. 159, it was held that 
 the California water corporation act 
 does not empower a water company, 
 after commencing proceedings for the 
 taking of private property, to sell and 
 transfer its right to another water 
 company, nor to prosecute proceedings 
 for the taking of private property in 
 the name of another company. The 
 rule seems to be, that parties dealing 
 with corporations are chargeable 
 with notice of the limitations im- 
 posed by the charter upon their 
 powers. And that in the United 
 States one corporation cannot hold or 
 deal in the stocks of another, unless 
 expressly authorized by law to do so. 
 Thus the trustees of a savings institu- 
 tion subscribed for $50,000 of the capi- 
 tal atock of the C. company, and the 
 
 trustees having no money to pay for 
 it, the F. company paid that amount 
 to the C, taking the notes of the 
 savings institution therefor, and a cer- 
 tificate of the stock in the F.'s own 
 name as collateral. Held, that the 
 subscription was ultra vires ; that the 
 F. was not a bona fide holder of com- 
 mercial paper ; and that the savings 
 institution, having received no benefit 
 from the transaction, was not estopped 
 to set up the defense of ultra vires. 
 Franklin Company v. Lewiston Insti- 
 tution for Savings, 68 Me. 43. It seems 
 that a corporation may make a valid 
 bond in a judicial proceeding under 
 bond made as to an appeal bond recit- 
 ing that S., " as superintendent of " a 
 certain " railroad company," and the 
 other persons whose names were 
 signed thereto, "are held and firmly 
 bound," etc., was held valid and bind- 
 ing upon the corporation. Collins v. 
 Hammock, 59 Ala. 438. And even where 
 an act is ultra vires, long acquiescence 
 therein by the corporation estops it 
 from setting it up to defeat rights ac- 
 quired under it. Thus in Sheldon Hat, 
 etc., Co. v. Eickmeyer Hat, etc., Co., 
 56 How. Pr. (N. Y.) 70, the plaintiflF 
 corporation was sued in the federal 
 courts for infringing the patents of 
 the defendant corporation. By flie de- 
 cree the plaintiff was perpetually en- 
 joined from using said patents, and 
 adjudged to pay $97,000 for the in- 
 fringement. The plaintifi" being un- 
 able to pay this sum, the trustees set- 
 tled with the defendant by transfer- 
 ring to the latter all the plaintiff's 
 patent-rights, which included valuable 
 patents apart from the process which 
 had been decreed to be an infringe- 
 ment. The plaintiff was engaged in 
 the business of blocking and stretch- 
 ing hats, and the patent-rights trans- 
 ferred, used in combination with the 
 process adjudged to be an infringe- 
 ment, were essential to the processes 
 employed by the plaintiff in its busi- 
 ness. It was held in an action brought 
 five years after the settlement in the 
 name of the corporation, seeking to set 
 aside the transfer as fraudulent and 
 ultra vires, that inasmuch as the value
 
 Corporate Contkacts. 369 
 
 Chicago to Cairo, in the state of Illinois, and that having completed 
 said road it proposes to connect the same with a Hue of steamboats, 
 to be constructed and operated on tlie Mississippi river, between 
 Cairo and New Orleans. To cany ont this entei'j)rise entirely for- 
 eign to the purposes of its organization, we will also suppose that 
 such corporation, in the usual way, enters into a contract with an 
 individual to construct a number of steamboats, and that pursuant 
 to said contract said steamboats are constructed and operated as 
 aforesaid by said company ; that the consideration for such boats, 
 given by said company, in pursuance of the provisions of the 
 agreement, was its bonds executed and issued in the usual way, 
 secured by a mortgage on its railroad ; that said boats were in- 
 sured by the company ; that subsequently said company received 
 the amount of the cost of such boats from insurance companies, 
 on account of a total loss of the same ; that the company failed to 
 pay such bonds when due ; that a suit is brought against the com- 
 pany to recover the same, and that the company interpose an an- 
 swer as a defense, that such a contract was ultra vires, and, there- 
 fore, absolutely void. Would this be a good defense under the 
 circumstances of the case ? Would the rights of the plaintiff be 
 different if he was a honafide holder of the bonds by assignment 
 of the same before due, having purchased, them of the payee, with- 
 out any actual notice of the consideration for which they were 
 given, or any knowledge of the corporate powers of the maker, 
 except such as may be presumed from the creating acts of the 
 corporation ? 
 
 In a recent case in Illinois, the questions we have presented 
 have been ably considered by Chief-Justice Lawrence. He says : 
 " It is said by counsel for the complainant that a corporation is 
 not estopped to say in its defense that it had not power to make 
 
 of the property transferred did not ap- Penn. St. 346, it was held that the 
 
 .pear to exceed the amount of damages provision of the Pennsylvania Const, 
 
 decreed, and as no offer had been or of 1874, art. 16, ^ 7, prescribing the 
 
 now was made to pay the damages, mode in which the indebtedness of 
 
 and in view of all the other circiim- corporations is to be incurred, and the 
 
 stances of the case, the transfer should act of 1874, carrying the same into 
 
 be sustained. The statutory provision effect,, do not preclude the collection 
 
 forbidding the assignment by a corpo- of a mortgage debt of a bank whose 
 
 ration of its property in contemplation charter of 1871 authorized such debt 
 
 of insolvency has no application to and mortgage, 
 such a case. In Lewis v, Jeffries, 86 
 
 47
 
 370 Pkivate Corporations. 
 
 a contract sought to be enforced against it, for the reason that if 
 thus estopped itsipowers might be indefinitely enlarged. While 
 the contract remains miexecuted on both sides, this is undoubtedly 
 true, but when, under cover of this privilege, a corporation seeks 
 to evade the payment of borrowed money on the ground that al- 
 though it had power to borrow money, it expended the money 
 borrowed in prosecuting a business which it was not authorized 
 to prosecute, it is pressing the doctrine of ultra vires to an extent 
 that can never be tolerated, even though the lender of the money 
 knew that the corporation was transacting a business beyond its 
 chartered powers, and that his money would be used in such 
 business, provided the business itself was free from any intrinsic 
 immorality or illegality. Neither is it correct to say that the ap- 
 plication to corporations of the doctrine of equitable estoppel, 
 where justice requires it to be applied (^as when under a claim of 
 corporate power, they have received benefits for which they refuse 
 to pay, from a sudden discovery that they had not the powers they 
 had claimed), can be made the means of enabling them indefinitely 
 to extend their powers. If it were true it would be an insupera- 
 ble objection to the application of the doctrine, even for the pur- 
 pose of preventing injustice in individual cases. But it is not 
 true. This doctrine is applied only for the purpose of compelling 
 corporations to be honest, and after whatever mischief may belong 
 to the performance of an act ultra vires has been accomplished. 
 But while a contract remains executory, it is perfectly true that 
 the powers of corporations cannot be extended beyond their proper 
 limits for the purpose of enforcing a contract. Not only so, but 
 on the application of stockholders, or any other person authorized 
 to make the application, a court of chancery would interfere and 
 forbid the execution of a contract ultra vires. So, too, if a con- 
 tract ultra vires is made between a corporation and another per- 
 son, and while it is yet wholly unexecuted, the corporation recedes, 
 the other contracting party would probably have no claim for 
 damages.^ But if such other party proceeds in the performance 
 
 • Such contracts, as are entirely for- enforced against it. Rock'River Bank 
 eign to the objects and purposes for v. Sherwood, 10 Wis. 230. But where 
 which the corporation was formed or a corporation contracts in reference to 
 which are outside its express or im- matters within its powers, but in do- 
 plied powers, are void and cannot be ing so exceeds its powers, the contract
 
 CORPOR AT I-: CV) N T U ACTS . 
 
 371 
 
 of tlio contract, expciidiiii^ liis iiKjuey :iiul his l;ilj(jr in the ])ro- 
 duction of values which tlie corporation appropriates, we can never 
 liold tliu corporation excused from paynient on tlie plea that the 
 
 is but void and tlie person with whom 
 the contract was made cannot set up 
 such violation of its corporate powers 
 to defeat the contract. Cannon v. Mc- 
 Nab, 48 Ala. This doctrine is well 
 stated and illustrated iu Litllewort v. 
 Davis, r)0 Miss. 40;j, which was a suit 
 iu et^uity to enforce an absolute deed 
 conveyin<^ lands as a mortgage to se- 
 cure a loan to the defendant. The ob- 
 jection urged to the suit was that the 
 trustees were only authorized to loan 
 money by statute, on promissory notes 
 with good personal securities, and con- 
 sequently that a loan secured by mort- 
 gage was void. SiMRALL, J., in pass- 
 ing upon this question, said : " A loan 
 of the school fund upon mortgage or 
 security other than that named in the 
 statute would have been a misapplica- 
 tion of the fund for which the trustees 
 would have been personally liable. 
 Lindsey v. Marshall, 13 S. & M. 590. 
 Whilst this is so, it does not necessa- 
 rily follow that the borrower can set 
 up, as a ground to defeat his security, 
 that the statute did not allow a loan 
 upon other than personal security. 
 
 * * * " If, " saidhe," acorijoration 
 makes a contract outside of the pur- 
 poses of its creation, it is void, because it 
 has no power over the subject in refer- 
 ence to which it acted ; but if it contracts 
 with reference to a subject within its 
 powers, but iu so doing, exceeds them, 
 the person with whom it deals cannot 
 set up such violation of the franchise 
 to avoid the contract. Haynes v. Cov- 
 ington, 13 S. & M. 411 ; Banks v. 
 Poitaux, 3 Rand. 136 ; Fleckner v. U. 
 S. Bank, 8 Wheat. 853 ; Com'l Bank 
 V. Nolan, 7 How. 5C8; Little v. O'Brien, 
 9 Mass. 423 ; Wade v. American Colo- 
 nization Society, 7 S. & M. 663. It 
 might be ground for the resumption 
 of the franchise by the state " In 
 The Bank of S. Carolina v. Hammond, 
 1 Rich. (S. C.) 281, a similar question 
 was raised. In that case the charter 
 of the plaintitf corporation directed 
 that loans upon a long time should be 
 secured by mortsjage ; but the loan 
 sought to be collected, which was for 
 a long time, was not secured by mort- 
 gage but by sureties, and the court 
 
 held that it was enforceable. In a 
 New York case, Mott v. United States 
 Trust Co., 19 Barb. 568, the charter of 
 a savings bank required that its funds 
 should be invested in or loaned on 
 public stocks, or other personal security 
 should be taken from the borrower, 
 but a loan made to the defendant wiili- 
 out any security was held binding. 
 See also to the same eflFect, U. S. Trust 
 Co. v. Brady, 20 id. 119. In Bank 
 of North Liberties v. Cresson, 12 S. 
 & R. 306, where the charter of the 
 bank required that a certain species of 
 security should be taken from its offi- 
 cers for the faithful performance of 
 their duties, a different kind of secu- 
 rity taken for that purpose was held 
 binding. So, where city bonds were 
 required to be made payable at the 
 city treasury, yet bonds made payable 
 elsewhere were held not to be thereby 
 invalidated, but only, that the provis- 
 ion making them payable elsewhere 
 was void. Sherlock v. Winnetka, 68 
 111. 530. In Hough v. Cook County 
 Land Co., 73 111. 23, a bill iu equity 
 was brought by the plaintiff against 
 the defendant, which claimed to be a 
 corporation established under the 
 laws of Illinois, with power to borrow 
 and lend money; to take lands and 
 mortgages as security ; to purchase 
 lands and make improvements thereon, 
 by erecting buildings for the purpose 
 of renting the same ; to hold build- 
 ings and lots for the purpose of im- 
 proving and renting the same, and to 
 do a general loan business and take 
 lands, mortgages and notes to secure 
 the loans. Appellant, believing that 
 appellee was possessed of the powers 
 it claimed, and that it was authorized 
 by its charter to buy land and issue 
 its stock in payment therefor, to loan 
 money, etc. , on the 24th day of May, 
 1873, contracted with it to sell and 
 convey to it certain lauds in Conk 
 county, which are particularly de- 
 scribed in the bill, in consideration 
 that appellee would issue to him three 
 hundred and sixty-five shares of its 
 stock and would, also, loan him eighty 
 per cent in money of tbe stock and 
 hold the stock as collateral security on
 
 372 
 
 PlilVATE CoKPORATIONS. 
 
 contract was bejoud its power. Take, for example, the case of a 
 corporation cliartered to build a railway from Chicago to Rock 
 Island. Under such a charter the company would have no power 
 
 the loan ; the loan to he for one year 
 from that date, with interest at ten per 
 cent per annum till due, and twelve per 
 cent per month after maturity, with 
 power on failure to pay, to sell, etc. 
 The land was conveyed, the money 
 loaned and the stock issued and 
 pledged as collateral security, iu con- 
 formity with the terms of the agree- 
 ment. Since the transaction occurred, 
 appellant has been advised, by coun- 
 sel, that appellee had no authority to 
 take the laud and issue the stock ; that 
 it professes to act under authority of 
 " an act to incorporate the Land Im- 
 provement and Irrigation Company," 
 approved March 1, 1867, and the change 
 of name to the Cook County Land 
 Company, by vote of its stockholders 
 ou the "20th of July, 1872, at which 
 time its capital stock was increased, in 
 accordance with an act of the legisla- 
 ture in regard to changing names and 
 iiicreasing stock of corporations, ap- 
 1^ roved March 26, 1872; that the change 
 of name and increase of stock was un- 
 authorized and void, and all the au- 
 thority appellee had, by its charter, 
 was to purchase lands for the purpose 
 of irrigation and improvement, for the 
 raising of crops thereon and the sale 
 and disposal thereof, when so improved. 
 It is alleged that the power vested in 
 appellee by its charter, which is made 
 part of the bill as an exhibit, was to 
 examine, survey and purchase lands 
 and interests therein, water-courses or 
 interests therein, for the purpose of 
 irrigating the lands that might be so 
 purchased, and facilitating crops in 
 dry seasons and to improve and culti- 
 vate such crops, chiefly as require irri- 
 gation to produce the largest returns, 
 and that appellee had no power to 
 purchase and hold lands for any other 
 purpose ; that appellee has not pur- 
 chased any lands for the purpose of 
 irrigation, or for any object contem- 
 plated by its charter, but that apjiellee 
 has purchased a large quantity of laud, 
 worth above $600,000, holds improved 
 and unimproved city real estate, an- 
 nounces its intention to erect buildings 
 on part of its vacant city property , 
 and that it has been, since its organi- 
 
 zation, and was at the time the bill 
 was brought, engaged in purchasing 
 lands, city lots, the improvement of 
 said lots for the purpose of sale and 
 rental, and in the purchase of tax cer- 
 tificates, and in loaning money on • 
 bonds and mortgages, etc. Appellant 
 insists that the purchase of the land 
 and the loaning of the money and tak- 
 ing notes therefor were contrary to 
 positive statutes and, therefore, void. 
 
 The act under which the defendant 
 first became incorporated, by its first 
 section, empowers — 
 
 The Land Improvement and Irriga- 
 tion Company to have, hold, possess and 
 enjoy, by themselves, successors and 
 assigns, forever, lands tenements, 
 hereditaments, goods, chattels, choses 
 in action and effects of every kind, and 
 the same to grant, sell, alien, invest, 
 loan and dispose of. 
 
 " And the fourth section of that 
 act is as follows : 
 
 " The chief objects of this association 
 shall be to examine, survey and pur- 
 chase lands or interests in lands, water- 
 courses or interests therein, which are, 
 as near as may be, adapted by nature 
 to the use of water to irrigate the same, 
 to facilitate the growth of crops in dry 
 seasons and to improve and cultivate 
 the same for such crops, chiefly, as re- 
 quire irrigation to produce the largest 
 returns. The statute under which 
 appellee changed its name and in- 
 creased its capital contains this pro- 
 viso : 'And provided, further, that any 
 corporation, other than corporations 
 for manufacturing purposes, availing 
 itself of, or accepting the benefit of, or 
 formed under this act (except the mere 
 change of name), shall be subject to 
 the general laws of this state, now in 
 force or which may hereafter be passed, 
 regulating corporations of like cliarac- 
 ter.' One of the general laws regulat- 
 ing the corporations provides that no 
 foreign or domestic corporation estab-^ 
 lished in any way for the pecuniary 
 profit of its stockholders shall 
 purchase or hold real estate in this 
 state, except as provided for in that 
 act. Section 10 of that act authorizes 
 corporations to own, possess and enjoy
 
 CoRi'OKAiE Contracts. 
 
 373 
 
 to build steamboats, for tlie purpose of running a line of such 
 vessels between Hock Island and St. Louis, liut suppose the 
 company, notwithstanding the want of power, should make a con- 
 
 so much real and personal estate as 
 shall be necessary for the transac- 
 tion of their business [and] to sell 
 and dispose of the same when not re- 
 quired for the uses of the corporation. 
 And it contains a proviso that all 
 real estate go acquired in satisfac- 
 tion of any liability or indebtedness, 
 unless the same may be necessary and 
 suitable for the business of such cor 
 poration, shall be ofiFered at public 
 auction, at least once every year, etc. 
 " In case any corporation shall fail to 
 sell such lands, it is made the duty of 
 the state's attorney, of the proper 
 county, to proceed against the corpora- 
 tion, by information, to the end that 
 such lands may be decreed to be sold. 
 And the first section authorizes corpo- 
 rations to be formed in the manner by 
 the act provided for any lawful pur- 
 pose, except banking, insurance, real 
 estate brokerage, the operation of rail- 
 roads, and the business of loaning 
 money." " Conceding that in determin- 
 ing the appellee's powers, these several 
 provisions must be construed together," 
 said Scholfield, J., " and that appellant's 
 construction that appellee has author- 
 ity only to examine, survey and pur- 
 chase lands, or interest in lands, water- 
 courses, or interest therein, which are, 
 as near as may be, adapted by nature 
 to the use of water to irrigate the 
 same, etc., is correct, does it follow 
 that the title to lands conveyed to and 
 held by it for other and different pur- 
 poses, is absolutely void and maybe so 
 declared at the instance of the grantee 
 seeking, for that cause, to repossess 
 himself of the property ? The authori- 
 ties cited in the brief for appellant. 
 Bank United States v. Owen, 2 Pet. 
 (U. S.) 538; Munsell v. Temple, S 
 Gilm. 9o ; Cin. Mut., etc., v. Rosenthal, 
 55 111. 91 ; Green v. Sevmour, 3 Sandf. 
 Ch. 292 ; Smith v. Bromley, Doug. 69G; 
 Browning v. Morris, Cowp. 790, recog- 
 nize the general doctrine that a contract 
 prohibited by statute, or against the 
 manifest policy of the law, is void ; 
 and in Carroll v. East St. Louis, G7 111. 
 5G8, also cited by appellant, the ques- 
 tion before us now, whether a corpora- 
 tion created in another state for the 
 
 sole purpose of buying and selling 
 lands has power to purchase and hold 
 title to lands in this state, and we lield 
 that it has not, because it would lend 
 to create perpetuities and is against 
 the general policy of our legislation. 
 In a more recent case. Starkweather v. 
 The Bible Society, 72 111. 59. the same 
 doctrine was reasserted." 
 
 There seems to us, however, to be 
 this important distinction between the 
 principle recognized in these authori- 
 ties and that applicable here. There, 
 by reason of the express or implied 
 prohibition of the law, the party is 
 absolutely denied the power to acquire 
 any rights through "the particular con- 
 tract. Here- there is power to ])ur- 
 chase, receive conveyances and hold 
 title to lands, but it is prohibited that 
 they shall be purchased and held for 
 other than a prescribed purpose. In 
 the one case, the principle affects 
 the power of acquisition ; in the other, 
 it affects simply the use to which 
 the acquisition shall be applied. 
 There can be no question of the right 
 of a stockholder to the aid of a court 
 of equity against a corporation, to pre- 
 vent it from misapplying its capital, 
 or from doing acts which would 
 amount to a violation of its charter ; 
 but the frame and prayer of the bill, 
 in the present case, do not contemplate 
 such relief, and we do not conceive it 
 could be granted without material 
 amendment, to make which, leave 
 should have been asked in the court 
 below. But the appellee being author- 
 ized to purchase and hold lauds, and 
 the appellant having sufficient capacity 
 to convey, the title was obviously 
 vested in the aj>pellee by the delivery 
 of the deed, and the question whether 
 the appellee has by its purchase and 
 use of lands exceeded the powers con- 
 ferred by its charter, is one between 
 the state and the appellee with which 
 the appellant, as a grantor gimply, has 
 no concern. Banks v. Poiteaux, 3*Kand. 
 (Va.) 141 ; Barrow v. N. & C. T. Co., 9 
 llumph. 304 ; Chambers v. St. Louis, 
 29 Mo. 576 ; Att'y-Qen'l v. Tudor Ice 
 Co., lot Mass. 239 : Whitman Mining 
 Co. V. Baker, 3 Xev. 291 ; Hay ward v.
 
 374 Private Corporations. 
 
 tract for the building of a vessel, and it is built by the contractor and 
 accepted and used by the railway, would any court permit the corpo- 
 ration, when sued for the value of the vessel, to excuse itself from 
 payment, on the ground that, althougli it has and uses tlie steamer, 
 it had no authority to do so by its charter ? Or, suppose that, in- 
 stead of having a vessel built by a contractor, it employs a super- 
 intendent to build it, and hires mechanics by the day, could it 
 escape the payment of their wages on the ground that it had em- 
 ployed them in a work ultra vires f In cases of 'such character, 
 courts simply say to corporations, you cannot, in this case, raise 
 the question of your power to make the contract. It is sufiicient 
 that you have made it, and by so doing have placed in your corpo- 
 rate treasury the fruits of others' labor, and every principle of jus- 
 tice forbids that you be permitted to evade payment by an ap- 
 peal to the limitations of your character. We are aware that cases 
 may be cited in apparent conflict with the principles here an- 
 nounced, but the tendency of recent decisions are in harmony with 
 them. While courts are inclined to maintain with vigor the lim- 
 itations of corporate action whenever it is a question of restraining 
 corporations in advance from passing beyond the boundaries of 
 their charters, they are equally inclined, on the other hand, to 
 enforce against those contracts, though ultra vires, of which they 
 have received the benefits."^ 
 
 Sec. 235. when neither party can avoid the contract, though ultra 
 vires. — If contracts between corporations and individuals are ab- 
 solutely void because ultra vires, then this defense could be set 
 up by the individual as well as the corporation ; and where it 
 would be greatly to the interest of the individual so to do, the 
 corporation, though suffering great pecuniary loss thereby, could 
 not avoid such a defense on the part of the other contracting 
 party. But it is settled, by the preponderance of authority, that 
 
 Davidson, 41 Ind. 212; Natoma W. & the possession of their property, in- 
 M. Co. V. Clarkin, 14 Cal. 544. It is quiries were permitted as to the neces- 
 well observed by Field, J., in Natoma sity of such property for tlie purposes 
 W. &M. Co. V. Clarkin, a?iie, that "it of their incorporation and the title 
 would lead to infinite embarrasssments made to rest upon the existence of that 
 if in suits by corporations to recover necessity." 
 
 'Bradley v. Ballard, 55 111. 417. See, also, Gas Co. v, San Francisco, 
 9 Cal. 453.
 
 CoRroEATE Contracts. 375 
 
 neither the corporation nor an individual, entering into a contract 
 with it, can avoid a contract of sale and purchase of property 
 where the property is delivered, nor can the individual reclaim the 
 property sold, or the corporation avoid the payment of the price 
 of the same, on tlie ground that it had no authority to make the 
 contract so long, at least, as it retains it and enjoys the benefit of 
 the contract.' 
 
 Seo. 236. Same continued — Common principles of justice would 
 require a corporation to pay for property actually received and 
 appropriated, to repay money borrowed and expended, and to])ay 
 for labor and services actually received. If tlie agents or officers, 
 make xiltra vires contracts, they may be personally responsible to 
 the stockholders for damages sustained, by reason of such con- 
 tracts, and they may be restrained from entering into or exe- 
 cuting such contracts by the stockholders, or perhaps creditors 
 interested in the matter. But when such a contract is once exe- 
 cuted, it would appear consonant with principles of justice and 
 equity to sustain the contract, where the corporation has received 
 the consideration, though executed on the part of the corporation 
 in excess of authority of either the agents executing the same, or 
 the corporation.^ 
 
 This doctrine seems well sustained by the current of modern 
 decisions. In many cases it has, it is true, been held that on 
 
 ' Parish V. Wheeler, 23 N. Y. 494; Kansas City Hotel Co. v. Harris, 51 
 
 Bissel V. The Michigan, etc., R. Co., Mo. 464; Williamette Freighting Co. 
 
 id. 258; Wiiite v. Franklin Bank, 32 v. Stannus, 4 Oregon, 261. And a cor- 
 
 Pick. 181; Tracy v. Talmage, 14 N. poration, which has borrowed money 
 
 Y. 163 ; De Groff v. American Linen, and used it for a purpose beyond its 
 
 etc., Co., 31 id. 124 ; Fester v. La Rue, corporate powers, is estopped from set- 
 
 15 Barb. 323; Gould v. Town of ting up in defense to an action to re- 
 
 Oneonta, 3 Hun, 401 ; Hazelhurst v. cover the loan, that the lender knew 
 
 Savannah, etc., R. Co., 43 Ga. 54; that the money was to be used for «^- 
 
 Southern L. Ins. Co. v. Lanier, 5 Fla. tra vires purposes, unless the use was 
 
 110. A stockholder who has ac- of an immoral or illegal character, 
 
 quiesced in an act done by the corpo- Bradley v. Ballard, 55 III. 413. 
 T&\.\on w\\\c\\ \s ultra vires simply be- - Zabriskie v. C. C, etc., R. Co., 23 
 
 cause in excess of its powers is estop- How. (U. S.) 381 ; Cary v. Cleveland, 
 
 ped from afterward denying the va- etc., R. Co., 39 Barb. 35; Argenti v. 
 
 lidity of the acts as, where he has San Francisco, 16 Cal. 255 ; McCluer 
 
 voted for an assessment which is ultra v. Manchester, etc., R. Co., 13 ^^ray, 
 
 vires, or with knowledge of the facts 124; Chapman v. M. R., etc. ,R Co., 
 
 made payments upon it. Ossipee Mf'g 6 Ohio St. 137 ; Hale v. Mutual Fire 
 
 Co. V. Cannev, 54 N. H. 29."i ; Macon, Ins. Co., 32 N. H. 297 ; Railroad v. 
 
 etc., R. R. Co. V. Vason, 57 Ga. 314 ; Howard, 7 Wall. 413.
 
 376 Private Cokpoeations. 
 
 technical grounds a recovery could not be had on the contract it- 
 self, where it was ultra vires of the corporation, but tliat a re- 
 covery might be had for the consideration of the contract thus 
 entered into. In other cases it has been maintained tliat where 
 corporations have received the beneht of such contracts, they 
 should be required to perforin them, if tliey are not against positive 
 law or public policy, ^ 
 
 It was observed by Bacon, J., in the ISTew York court of appeals, 
 on this subject, as follows : " If it be conceded that the defend- 
 ants had no power to enter into the contract of sale in this case, 
 and bind the company to perform the obligations assumed, viewed 
 as a mere question of corporate power, yet, having undertaken to 
 do so, and having received the full consideration agreed to be paid 
 by the plaintiff, and he having fulfilled his entire contract, they 
 cannot now be permitted to set up that excess of authority to 
 excuse them from that part of the contract which imposes an obli- 
 gation upon them. This principle lias been repeatedly held as 
 applicable to an individual attempting to screen himself from 
 liability when contracting with a corporation, as in the case of a 
 corporation when seeking to escape responsibility on the plea of 
 ultra vires for acts deliberately done witli all the usual and need- 
 ful formalities, and where they have received the entire benefit 
 they contracted for, such a defense should no longer be tolerated 
 in our courts. Where the question is merely as to the power to 
 contract, a party w^ho has had the benefit of the contract should 
 not be permitted, especially where there is no unlawful intent 
 charged upon the other party, and he is in no sense vo-jpari delicto^ 
 to question its validity. To deny relief to a plaintiff thus situated, 
 wouhl bo substantially to secure to the party deliberately violat- 
 ing one of tlie laws of its existence, and when no guilty complicity 
 can be charged upon the other party, the fruits of an illegal trans- 
 action, and operate as a premium upon repudiation and fraud." ^ 
 
 1 Chicago Building Soc'y v. Crowell, legal turpitude. It may be aa excess 
 65 111. 458. of power or a private breach of trust 
 
 2 DeGrafF V. American, etc., Co., 21 in respect to its stockholders. The 
 N. Y. 137. In Parish v. Wheeler, 23 latter may complain or the state may 
 id. 503, COMSTOCK, C. J., observes, interpose, but corporations themselves, 
 in relation to this question : " There like individuals, in dealing with other 
 is certainly no moral turpitude if a parties, must live up to the rules of 
 railroad corporation buys a steamboat common honesty * * *. Contracts 
 or builds a church, nor is there any with corporations, mado in excess of
 
 Corporate Contracts. 
 
 377 
 
 Seo. 237. Form of the action in case of ultra vires contracts. — It has 
 in some cases been held that where the eoiiti-act is ultra vires 
 
 tbeir powers, which are purely execu- 
 tory on both sides, aud where uo 
 wrong will be done if the parties are 
 left in their previous situation, I am 
 willing to agree, should not bo en- 
 forced, because such contracts con- 
 template an unauthorized diversion of 
 corporate funds, and therefore a breach 
 of private trust. 
 
 " Executed dealings of corporations 
 must be allowed to stand for and 
 against both parties, when the plainest 
 rules of good faith so require * * *. 
 The most favorable statement of the 
 particular matter now in question is, 
 that the railroad corporation, in excess 
 of the powers conferred upon it by its 
 charter, purchased and paid for a 
 steamboat and several canal boats ; 
 that being in possession and use of 
 the property, in connection with its 
 regular business, it mortgaged the 
 same property to its creditors, the 
 plaintiff, taking back charter-parties 
 for a limited period, and also a stipu- 
 lation for a reconveyance, if the debt 
 should not be paid at the time agreed 
 on ; that the plaintiff, taking the usual 
 course in such cases, caused a part of 
 the property to be sold after a default 
 had occurred, and received the pro- 
 cpeds of that sale, which nearly or 
 quite satisfied the debt. In all this I 
 can see nothing unlawful except the 
 want of legal power or right to buy 
 the property. 
 
 " But it was actually bought, paid for 
 and delivered, and, therefore, become 
 a part of the estate and assets of the 
 company. The company could sell or 
 pledge it to a creditor, and could re- 
 deem the pledge by paying the debt. 
 In acquiring the ownership of such 
 property, the corporation may have 
 usurped a right not granted by its 
 charter. But the acquisition was, 
 nevertheless, a fact which no legal 
 refinement can deny. It was a fact too, 
 having all the legal relations and in- 
 cidents of any other fact of ownership. 
 I think it wiU not be questioned, that 
 an execution creditor of the company 
 could levy on this property and sell it 
 for the satisfaction of its debt, and 
 having thus obtained a satisfaction, 
 I do not think that he could deny that 
 he was paid, upon any theory of ex- 
 
 48 
 
 ce.ss of corporate power, and levy 
 again upon other property. 
 
 " So, if the creditor, instead of pro- 
 ceeding to judgment and execution for 
 his debt, takes a pledge or mortgage, 
 and, by the exercise of the power of 
 sale, obtains tlie cash for his demand, 
 I do not see how he can raise the in- 
 quiry whether the corporation debtor 
 violated the trust duty, which it 
 owed to its shareholders in the pur- 
 chase of the chattels pledged or mort- 
 gaged. 
 
 " So long as no one else questions the 
 title thus acquired, and the property 
 is made productive in the satisfaction 
 of the debts, it would be strange if 
 the creditor can, upon such ground, 
 claim that the debt still exists. And 
 such is, in effect, this case. The 
 security of the plaintiff, as I have said, 
 was in the nature of a mortgage. The 
 stipulation to reconvey on payment of 
 his claims provided for nothing beyond 
 the legal result of the transaction. 
 The reconveyance, it is true, was to be 
 made to the appointee of the corpora- 
 tion ; but that clause considered by 
 itself involved nothing illegal, or even 
 ^dtra mres. The plaiutitl actually sold 
 a part of the property for the payment 
 of his debt, and he received the 
 money. No one but himself questions, 
 or can question, his right to make the 
 security available in that manner. Ho 
 does not pretend or suggest that he 
 cannot hold the money thus obtained. 
 On the contrary, he insists ujyon re- 
 taining it against all the world ; but 
 at the same time claims that his debt 
 is neither paid nor reduced. Jluch has 
 been said in the books (sometimes I 
 think without reflection), about the 
 ])owers of corporations and the conse- 
 quences of exceeding those powers. 
 But no authority can be found to 
 justify the position of the plaintiff in 
 respect to the matter here considered." 
 See, also, Bissel v. Michigan, etc., R. 
 Co., 23 N. Y. 258 ; Haaelhurst v. Savan- 
 nah, etc., R Co., 43 Ga. 54 ; Bradley v. 
 Ballard, 55 111. 413. In Bissel v. The 
 Michigan, etc., R. Co , 22 N. Y. 258, 
 Selden, J., in discussing the question, 
 makes a distinction based upon knowl- 
 edge, or want of knowledge, of tiie 
 party dealing with the corporation
 
 378 
 
 Private Corporations, 
 
 but the corporation has received property, or the consideration of 
 a contract, and refuses to fulfill its contract, or to pay its obli- 
 
 He observes: "There are, no doubt, 
 cases in which a corporation would be 
 estopped from setting up the defense, 
 allhough its contract might have been 
 really unauthorized. It would not be 
 available in a suit brought by a bona 
 fide indorsee of a negotiable promissory 
 note, provided the corporation was 
 authorized to give notes for any pur- 
 pose ; and the reason is, that the cor- 
 poration, by giving the note, has vir- 
 tually represented that it was given 
 for some legitimate purpose, and the 
 indorsee could not be presumed to 
 know the contrary. The note, how- 
 ever, if given by a corporation abso- 
 lutely prohibited by its charter from 
 giving notes at all, would be voidable 
 not only in the hands of the original 
 payee, but in those of any subsequent 
 liolder, because all persons dealing 
 with a corporation are bound to take 
 notice of the extent of its chartered 
 powers. 
 
 " The same principle is applicable 
 to contracts not negotiable. Where 
 the want of power is apparent upon 
 comparing the act done with the terms 
 of the charter, the party dealing with 
 the corporation is presumed to have 
 knowledge of the defect, and the de- 
 fense of ultra vires is available against 
 him. But such a defense would not 
 be permitted to prevail against a party 
 who cannot be presumed to have had 
 any knowledge of the want of authority 
 to make the contract. Hence, if the 
 question of power depends not merely 
 upon the law under which the corpora- 
 tion acts, but upon the existence of 
 certain extrinsic facts, resting pecu- 
 liarly within the knowledge of the cor- 
 porate officers, then the corporation 
 would, I apprehend, be estopped from 
 denying that which, by assuming to 
 make the contract, it had virtually 
 affirmed. 
 
 " A. question analogous to this arises, 
 where public officers who have done 
 something in contravention of the 
 statute under which they act are 
 afterward sought to be estopped from 
 setting up that their act was unauthor- 
 ized. It was insisted by counsel in the 
 case of Regina v. White, 4 Ad. & El. 
 (N. S.) 101, that for public reasons, 
 
 officers so situated were not estopped ; 
 but Lord Denman said : ' We liave 
 held that this is true only of a statute 
 the contents of which are publicly 
 known ; such a statute is to have 
 effect whatever dealings may take 
 place ; but when the persons acting, 
 whether trustees for public purposes 
 or not, have done any act which was 
 not known to the parties with whom 
 they were afterward dealing, such an 
 act cannot prevent the estoppel aris- 
 ing from that subsequent dealing, ' 
 This doctrine, which was also held in 
 the case of Doe, ex clem. Levy, v. Home, 
 3 Ad. & El. (N. S.) 757, will be found, 
 when carefully examined, to sustain 
 the exception which I have suggested 
 in the case of corporations. But aside 
 from these exceptional cases, it is, in 
 my judgment, not only entirely clear 
 upon principle, but abundantly settled 
 by authority, that the contract of a 
 corporation, if unauthorized by its 
 charter, is an illegal contract, and that 
 the corporation is not estopped from 
 setting up this illegality in defense to 
 an action brought upon it. 
 
 " In referring to the cases which 
 support these views, I will notice the 
 English cases first. There are three 
 classes of cases in England in which 
 the question of ultra vires arises, viz. : 
 first, cases in which one or more of the 
 shareholders seeks to restrain the offi- 
 cers of the corporation from engaging 
 in transactions unauthorized by the 
 charter ; second, actions brought by 
 third persons against corporations to 
 enforce their contracts, in which tlie 
 defense relied upon is, that in making 
 the contract the corporation exceeded 
 its corporate powers ; and third, simi- 
 lar actions, in which the defense is 
 that the directors had exceeded, not 
 the powers conferred upon the entire 
 corporation by law, but those conferred 
 by the shareholders upon the directors 
 or managing officers by deed. 
 
 " These three classes of cases differ 
 materially in their nature and princi- 
 ples, and if we would avoid confusion 
 must be kept entirely distinct in inves- 
 tigating the subject. Those of the 
 third class have no bearing upon the 
 question we are discussing. There
 
 CORT'ORATE CoXTR.VCTS. 
 
 379 
 
 gations, given as the consideration, no recovery can be had upon 
 such contract; but that the party thus contracting with tlic cor- 
 poration, and delivering such property or paying such considera- 
 tion, is entitled to recover tlie vahie of tlie ])roperty thus deliv- 
 ered or the consideration paid, on an implied undertaking on the 
 part of the corporation to pay for the value or amount of the 
 same, though the contract itself is void as being ultra vires. This 
 doctrine is entirely technical and can hardly be considered as 
 
 are in England a class of corporations 
 organized under general laws, which 
 do not specify the manner in which 
 the objects and purposes of the incor- 
 poration are to be effected, but leave 
 this to be arranged by a ' deed of set- 
 tlement ' between the corporators 
 themselves. By this deed the com- 
 panies prescribe and limit the powers 
 and functions of their various officers, 
 so far as they are left uncontrolled by 
 the statute and the general laws of 
 the kingdom. Now it is plain that 
 there is no analogy between an act 
 which merely transcends the limits of 
 this deed of settlement and one which 
 violates the provisions of the organic 
 act. The deed of settlement is the 
 private act of the shareholders, and its 
 provisions have respect solely to their 
 private interests. It is a mere power 
 of attorney, and bears no resemijlance 
 to a law enacted with a view to the 
 interests of the public. There is evi- 
 dently no question of public policy in- 
 volved, when the question is, whether 
 the officers have exceeded the authority 
 conferred by this deed. The case of 
 the Royal British Bank v. Turquand, 
 5 El. «& Bl. 248. is one of this class of 
 cases. By comparing the language of 
 Lord Campbell in tlais case with tliat 
 used by him upon another occasion, 
 we shall obtain a clear view of the 
 distinction here adverted to. In the 
 case cited, the action was upon a bond 
 signed by two of the directors, and the 
 question was, not whether the giving 
 of the bond exceeded the powers which 
 the corporation itself had a right to as- 
 sume, but whether it was authorized 
 as between the shareholders and the 
 directors by the deed of settlement. 
 Lord Campbell, in delivering his 
 opinion, said: 'A mere excess of 
 authority by the directors, we think, 
 would not amount to a defense.' Of 
 course, by this was meant merely an 
 
 excess of authority by the directors as 
 the agents of the stockholders, and not 
 an unauthorized assumption of power 
 as between the corporation and the 
 public. 
 
 " In the Mayor of Norwich v. The 
 Norfolk Railroad Company, 30 Eng. 
 Law & Eq. 120, the .same learned judge 
 fully recognizes the distinction I take, 
 and shows that by the remark just 
 quoted he by no means meant to say 
 that corporations were bound by con- 
 tracts which &.xfiultra vires, as between 
 them and the public. He then said: 
 'The mere circumstance of a covenant 
 by the directors in the name of the 
 company being idtra viren as between 
 them and the shareholders does not 
 necessarily disentitle the covenantee to 
 sue upon it * * *. But suppose 
 that the directors of a railway company 
 should purchase a thousand gross of 
 green spectacles as a speculation, and 
 should put the seal of tlie company to 
 a deed covenanting to pay for these 
 goods, here would be a ch-ar excess of 
 authority on the part of the directors 
 * * * ; this would.be an iller;t/l con- 
 tract to misapply the funds of the com- 
 pany, and the illegality might be set 
 up as a defense.' 
 
 " The phrase ' vltra vires' is applied 
 in the English cases both to acts which 
 simply exceed the powers conferred 
 by the deed of settlement upon the 
 officers as the agents of the share- 
 holders, and acts which transcend the 
 powers conferred by law upon the en- 
 tire corporation. This indiscriminate 
 use of the phrase is calculated to mis- 
 lead, unless the distinction referred to 
 is observed. It is evident that the 
 class of cases to which that of Royal 
 British Bank v. Turquand belongs 
 have no bearing upon the question 
 under consideration, and hence they 
 will be no further noticed."
 
 380 Private Corporations. 
 
 sound in principle. Such a doctrine only changes tlie form of 
 the remedy and does not affect the substantial rights of the 
 parties. In fact a claim in such a case, on a quantum meruit^ 
 or quantum 'valehat, might give the individual even more than on 
 the contract ; and if the same amount might be recovered 
 in eitlier form of action, no practical benefits would be 
 secured by tlie adoption of the doctrine, that the contract, being 
 in excess of authority, is void.^ But the distinction has, how- 
 ever, been frequently made, both in this country and in England. 
 
 Mr. Brice observes : " To say that a corporation cannot sue or 
 be sued upon an ultra vires agreement is one thing. To say that 
 it may retain the proceeds thereof which have come into its 
 possession, without making any compensation whatever to the 
 person from whom it has obtained them, is something very 
 different." ' 
 
 In an action by a corporation in New York, for money loaned, 
 where the defense was, the want of power in the company to 
 make loans, the supreme court of that state uses the following 
 language : " It ill becomes the defendants to borrow from the 
 plaintiff one thousand dollars for a single day, to relieve their 
 immediate necessities, and then to turn around and say, ' I will 
 not return 3'ou this money, because you had no power in your 
 charter to lend it.' Let them first restore the money, and then 
 it will be time enough for them to discuss with the sovereign 
 power of the state of Connecticut [where the corporation was 
 created] the extent of the plaintiff's chartered privileges. We shall 
 
 ' It is affirmed by Mr. Brice that, Ultra Vires, 371 ; East London W. 
 " tbough no action will lie against a Co. v. Bailey, 4 Bing. 283 , Mayoi-, 
 corporation merely on the ground that etc., v. Charlton, 6 M. & W. 815 ; Paine 
 it has received and adopted the benefit v. Strand Union, 8 Q. B. 326. See, also, 
 of a contract entered into without due Moss v. Rossie Min. Co., 5 Hill, 137 ; 
 formalities on its part, yet under cer- Peterson v. Mayor, etc., 17 N. Y. 44'J ; 
 tain exceptional circumstances it may Hooker v. Eagle Bank, 30 id. 83 ; 
 be used on the consideration so re- McCutcheon v. Steamboat Co., 13 Penn. 
 ceived, and, e cont7'ario, it seems that St. 13 ; Hague v. City of Philadelphia, 
 it may always maintain assumpsit or 48 id. 527 ; City of Baltimore v. Key- 
 debt against a person who has received nolds, 20 Md. 1; Richard v. Warren 
 from it the benefit of such a contract. Co., 31 id. ;'>81 ; Zottman v. San Fran- 
 * * * It was at one time thought cisco, 20 Cal.96; Thomas v. Dickenson, 
 that, though a corporation could not be 12 N. Y. 304 ; C-urtis v. Leavitt, 15 id. 
 sued on a contract whilst it remained 47; Bonesteel v. Mayor, etc., 23 iii. 
 executory, they might be so on one 1(52. 
 
 which had been executed ; but the '■' Brice's Ultra Vires, 618, 
 distinction does not now exist." Brice's
 
 Corporate Contracts. 381 
 
 lose our respect for the law when it so far loses its character for 
 justice as to sanction the defense here attempted." ^ 
 
 Sec. 238. But the doctrine we have been considering would 
 not be applicable where the power assumed by the corporation is 
 expressly prohibited by law or is against public policy.' 
 
 Thus, in an action on a note issued by a corporation, where such 
 act was expressly prohibited, it was said by Bronson, J., that, 
 "as the issuing of notes was expressly prohibited bylaw, it is 
 impossible to maintain that they are valid securities. To hold 
 that they can be enforced against the bank would be going very 
 far toward defeating the end which the legislature had in view. 
 * * * The legal liability on account of which the notes were 
 issued still remains ; but the notes themselves are void." ' 
 
 Sec. 239. The doctrine of ultra vires applied to agents. — It will 
 be evident, from what has been said in reference to the doctrine 
 of ultra vires, that the general principles of this docti-ine would 
 be applicable to all agents of corporations. Their authority to act, 
 as we have seen, cannot exceed the corporate powers, and may be 
 less ; but "where they are less, and where the agent exceeds the 
 authority conferred by law, the corporation, like any other prin- 
 cipal, may expressly or by its acts ratif}^ the acts of the agent.* 
 
 ' Steam Nav. Co. v. Weed, 17 Barb. How 381, where the facts were as fol- 
 378. See, also, Argenti V. City of San lows: By the general railway law in 
 Francisco, 16 Cal. 255; Bank v. Ham- Ohio, one railway company was al- 
 mond, 1 Rich. L. 281 ; Southern, etc., lowed to aid in the construction of 
 Co. V. Lanier, 5 Fla. 110; Silver Lake other lines, by subscriptions to the 
 Bank v. North, 4 Johns. Ch. 370 ; Pot- capital stock of the companies, pro- 
 ter V. Bank of Ithaca, 5 Hill, 490; vided that in a meeting of the stock- 
 Suydam v. Morris Canal, etc., id. holders, called for that purpose, two- 
 491 ; Sacketts Harbor Bank v. Lewis thirds of the stock represented should 
 Co. Bank, 11 Barb. 213 ; Tracy v. Tal- assent thereto. And by a subsequent 
 mage, 14 N. Y. 162. act, it was provided that any existing 
 
 '^ Curtis V. Leavitt, 15 N. Y. 94. company might accept this provision ; 
 
 2 Leavitt v. Palmer, 3 N. Y. 19. But and by filing a certificate of such ac- 
 
 see posi, § 270 ; State Board of Agri- ceptance with the secretary of state 
 
 culture v. Citizens' Street R. Co. ,47 make it a part of its charter. In this 
 
 Ind. 407; Kneeland v. Gilman, 24 case the defendants, without having 
 
 Wis. 39. complied with either of the foregoing 
 
 ■* The presumption against corpora- conditions, made a guarantee of $400,- 
 
 tions, on the ground of acquiescence 000, of the bonds of the Columbus, 
 
 or implied ratification, is illustrated by Piqua and Indiana Railway, 
 
 the case of Zabriskie v. Cleveland, A bill was brought by the plaintiff, 
 
 Columbus and Cincinnati Railway, 23 a member of defendants' company, to
 
 382 
 
 Private Cokpokatioks. 
 
 S EO. 240. The doctrine of ultra vires in cases of negotiable instruments. — 
 We have already indicated the effect of acts ultra vires, 
 on contracts made by private corporations, with otlier parties. 
 Would hona fide assignees of negotiable instruments, such as 
 bonds, coupons or notes, stand in any better position than the 
 payee or original holder of these instruments? If the corpora- 
 tion had authority to issue these instruments for any purpose, 
 although in respect to the particular issue it may have been in 
 excess of authority, the purchaser would be protected if he pur- 
 chased the same in good faith, for a valuable consideration and 
 without notice, actual or constructive, of the particular informaliry 
 or excess of authority on the part of the corporation or its agents. 
 If the corporation or its agents, having authority to issue its 
 notes or bonds, either by the express provisions of law or its con- 
 stating acts or implied authority derived therefrom, such notes or 
 bonds may still be issued for some unlawful purpose, and in that 
 respect be considered ultra vires. But in the hands of an inno- 
 
 restraiu tlieiu from paying the inter- 
 est on the bonds so guaranteed by 
 thein, upon the ground that the de- 
 fendants' directors had exceeded their 
 autliority in making the guaranty. 
 Some of the other stockholders by 
 permission of the court below became 
 defendants in the suit. The court 
 held, that, as between the parties to 
 the present suit, the acceptance of the 
 provisions of tiie general railway law 
 and of the subsequent statute might be 
 presumed from the conduct of the 
 corporators, in not sooner taking steps 
 to nullify the action of the directors 
 in making the guaranty ; and that it 
 was not competent for the corporation, 
 after having made such guaranty, re- 
 ceived the benefits of it, and allowed 
 the bonds to go into general circula- 
 tion on thrt faith of its responsibility, 
 now to repudiate them upon the 
 ground of their own omission to com- 
 ply with the requirements of the 
 statute. And especially were the 
 bonds binding upon the defendants 
 since the guaranty by the directors 
 had been expressly ratified by a reso- 
 lution of tlie stockholders at a meet- 
 ing held subsequently, and at this 
 meeting the plaintiff's stock was repre- 
 sented. 
 
 In Bargate v. Shortridge, 5 11. L. C. 
 297, Lord St. Leonards said : "It 
 does appear to me that if, by a course 
 of action, the directors of a company 
 neglect precautions which they ought 
 to attend to, and thereby lead third 
 persons to deal together as upon real 
 transactions, and to embark money or 
 credit in a concern of this sort, these 
 directors cannot, after five or six years 
 have elapsed, turn round, and them- 
 selves raise the objection that they 
 have not taken these precautions, and 
 that the shareholders ought to have 
 inquired and ascertained the matter. 
 * * * The way, therefore, in which 
 I propose to put it to your lordships, 
 in point of law, is this : the question 
 is not whether that irregularity can 
 be considered as unimportant, or as 
 being diff"erent in equity from what it 
 is in law, but the question simply is, 
 whether, by that continued course of 
 dealing, the directors have not bound 
 themselves to such an extent that they 
 cannot be heard in a court of justice 
 to set up, with a view to defeat the 
 rights of the parties with whom they 
 have been dealing, that particular 
 clause enjoining them to do an act 
 which they themselves have neglected 
 to do."
 
 CoRPOKATE Contracts. 
 
 383 
 
 cent holder, and especially as we have seen, where the corpora- 
 tion lias received the consideration therel'ur, they could not defeat 
 the claims of the holder, on the ground that they exceeded their 
 authority in executing it. If there is nothing on the face of ne- 
 gotiable instruments executed by a corporation to indicate that 
 they are ultra vires, and it had power to issue such instnnnents 
 in the conducting of its legitimate business, a defense ou that 
 ground could not be set up to defeat a recovery thereon hy 'Ahona 
 fide holder for value, without notice of the excess of authority in 
 issuing them for the particular purpose for which they were issued.' 
 But where two distinct railroad companies consolidated without 
 authority, and they were placed under the same management, it 
 was held that the indorsee of a note given by the managers of 
 the consolidated company for the purchase of a steamboat could 
 not recover on it." 
 
 ' Monument Bank v. Globe Works, 
 101 Mass. 57; Attorney-General v. In- 
 surance Co., 9 Paige, 470 ; Bissell v. 
 Michigan, etc., R. Co., 2a N. Y. 258; 
 Mechanics' Banking Association v. 
 White Lead Co., 85 id. 505; Lexing- 
 ton V. Butler, 14 Wall. 282 ; Morford 
 V. Farmers' Bank, 26 Barb. 568 ; Bridge- 
 port City Bank v. Empire, etc., Co., 30 
 id. 421 ; Central Bank v. Same, 26 id. 
 23 ; Bank of Genesee v. Patcbin, 13 
 N. Y. 309. ,As a general rule, a corpora- 
 tion, unless constrained by law or the 
 constating instruments, may, as inci- 
 dent to its business, receive and trans- 
 fer notes and bills. Buckley v. Briggs, 
 30 Mo. 452 ; Frye v. Tucker, 24 111. 
 180; Hardy V. Merri weather, 14 lud. 
 203; Lucas v. Pitney. 27 N. J. L. 
 221. 
 
 ^ Pearce v. Madison, etc., R. Co., 21 
 How. 441 . 
 
 In this case Justice Campbkll ob- 
 served : " Now, persons dealing with 
 the managers of a corporation must 
 take notice of the limitations imposed 
 upon their authority by the act of in- 
 corporation. Their powers are ccm- 
 ceded in consideration of the advan- 
 tage the public is to receive from their 
 discreet and intelligent employment, 
 and the public have an interest that 
 neither tlie managers nor stockholders 
 of the corporation shall transcend 
 
 their authority. In McGregor v. The 
 Official Manager of the Deal and Dover 
 Railway Co., IG L. & Eq. 180, it was 
 considered tliat u railway company in- 
 corporated by act of parliament was 
 bound to apply all the funds of the 
 company for the purposes directed and 
 provided for by the act, and for no 
 other purpose whatever, and that a 
 contract to do something beyond these 
 was a contract to do an illegal act, the 
 illegality of which, appearing by the 
 provisions of a public act of parlia- 
 ment, must be taken to be known to 
 the whole world. In Coleman v. The 
 Eastern Counties Railway Co., 10 
 Beav. 1, Lord L.\ngdale, at the suit of 
 a shareholder, restrained the corpora- 
 tion from using its funds to establish 
 a steam communication between the 
 terminus of the road (Harwich) and 
 the northern ports of Europe. The 
 directors of the company vindicated 
 the appropriation as beneficial to the 
 company, and that similar arrange- 
 ments were not unusual among rail- 
 way companies. Lord Laxgdale 
 said : ' Ample powers are given for 
 the purpose of constructing and main- 
 taining the railway, and for doing all 
 those things required for its proper 
 use when made. But I apprehend 
 that it has nowhere been stated that a 
 railway company, as such, has power
 
 384 
 
 Private Corporations. 
 
 Sec. 241 . Necessary or implied powders not ultra vires. — It lias 
 been affirmed tliat a power to make notes or bills, or to 
 accept bills, is not one of the incidents of a corporation ; that the 
 
 ment of the owner's interest. His 
 suit is instituted on the notes, as an 
 indorsee ; and tlie only question is, 
 had the corporation the capacity to 
 make the contract, in the fulfillment 
 of which they were executed ? The 
 opinion of the court is, that it was a 
 departure from the business of the 
 corporation, and that their officers ex- 
 ceeded their authority. 
 
 " In Rutland and Burlington Rail- 
 way Company v. Proctor. 29 Vt. 93, 
 where the plaiutiflfs, a railway com- 
 pany, chartered with the usual privi- 
 leges and limitations, in order to com- 
 pete in business and improve the 
 profits of their road, in all probability 
 in good faith, purchased the boats and 
 appurtenances of a corporation formed 
 for carrying freight and passengers on 
 Lake Champlain, and suljsequently 
 sold one of these boats and furniture 
 to the defendants, and after the sale 
 repaired the boat and furniture at a 
 machine shop purchased of the trant^- 
 portation company, and brought an 
 action for such furniture and repairs, 
 it was held that they could recover. 
 The court, Redfield, C. J., said ; 
 ' The defense is, that the contract of 
 purchase by which the plaintiffs' com- 
 pany acquired the title of this boat 
 and furniture, sold the defendants, 
 and of the shop at which the repairs 
 were done, was beyond their powers, 
 or as denominated in the books, ultra 
 vires. It does not appear that the 
 stockholders of the plaintiffs' company 
 have ever objected to their making 
 the purchase, or running the boats in 
 connection with their road. 
 
 " ' If we regarded the question prop- 
 erly befere the court for determina- 
 tion, we should not at lirst view, cer- 
 tainly, be inclined to question that 
 such a purchase is beyond the powers 
 of the company. And if the stock- 
 holders had applied to a court of 
 equity at the time, to have the direct- 
 ors enjoined from making the pur- 
 chase, the current of English decis- 
 ions would probably have justified the 
 injunction. And possibly had the 
 state interfered by w'ay of scire facias 
 or quo icarranto, the excess of power 
 thus exercised by the company might 
 
 to enter into all sorts of other transac- 
 tions. Indeed, it has been very prop- 
 erly admitted that railway companies 
 have no right to enter into new trades 
 or businesses not pointed out by the 
 acts. Bui it has been contended that 
 they have a right to pledge, without 
 limit, the funds of the company for 
 the encouragement of other transac- 
 tions, however various and exten- 
 sive, provided that the object of that 
 liability is to increase the traffic upon 
 the railway, and thereby to increase 
 the profit to the shareholders. 
 
 " ' There is, however, no authority 
 for any thing of that kind. It has 
 been stated that these things, to a 
 small extent, have been frequently 
 done since the establishment of rail- 
 w-ays ; but unless the acts so done can 
 be proved to be in conformity with 
 the powers given by the special acts 
 of parliament, under which those acts 
 were done, they furnish no authority 
 whatever. In the East Anglian Rail- 
 way Company v. The Eastern Counties 
 Railway Company, 11 C. B. 803, the 
 court say the statute incorporating the 
 defendants' company gives no author- 
 ity respecting the bills in parliament 
 promoted by the plaintifi's, and we are 
 therefore bound to say that any con- 
 tract relating to such bills is not justi- 
 fied by the act of parliament, and not 
 within the scope of the authority of 
 the company as a corporation, and is 
 therefore void.' 
 
 " We have selected these cases to 
 illustrate the principle upon which 
 the decision of this case has been 
 made. It is not a new principle in the 
 jurisprudence of this court. It was 
 declared in the early case of Head v. 
 Providence Insurance Company, 2 Cr. 
 127, and has been reaffirmed in a 
 number of others that followed it. 
 Bank of Augusta v. Earle, 18 Pet. 
 519; PerrineV. Ches. & Del. R. Co. 
 9 How. 172. 
 
 " It is contended, that because the 
 steamboat was delivered to the defend- 
 ants, and has been converted to their 
 use, they are responsible. It is enough 
 to say, in reply to this, that the plaint- 
 iff was not the owner of the boat, 
 nor does he claim under an assign-
 
 Corporate Contracts. 
 
 385 
 
 right to do so must be given eitlicr by the provisions of the law 
 or b}'' the constating instruments, although it may be conferred 
 either by express provisions or by implication ;' and this power 
 
 be regarded as sufficient reason for re- 
 voking their cnarter. We say this 
 may possibly be so regarded, but it is 
 not common in practice for the courts 
 to declare the forfeiture of a railway 
 charter when the directors have pro- 
 ceeded in good faith, and the property 
 of the company is not brought in 
 peril, but no such step has been taken, 
 nor is this an action by which the 
 company are sought to be charged for 
 a contract beyond the fair scope of 
 their charter. 
 
 " ' The defendants seek to make this 
 defense upon the ground that the 
 excess of power thus assumed by the 
 company is illegal, and renders all 
 contracts connected with the transac- 
 tion Inoperative by reason of such 
 illegality. 
 
 " ' If there had been a positive pro- 
 hibition of entering into a particular 
 class of contracts, and especially if 
 such contracts had been declared void 
 by the charter of the company, or the 
 general laws of the state, most un- 
 questionably no action would lie upon, 
 the prohibited contract. 
 
 " ' But when no such prohibition 
 exists, and it is only by construction of 
 the charter that a class of contracts 
 are declared to be beyond the powers 
 of the company, and when upon this 
 point there is such reasonable ground 
 of doubt as to induce a court to sup- 
 pose the directors may have acted in 
 good faith, and where the question is 
 raised by one having no interest in it, 
 except for purposes of unjust advant- 
 age, courts have never been inclined 
 to listen to the objections. 
 
 " ' In the present case, the most 
 favorable view for the defendants, as 
 it seems to us, is that the directors of 
 the plaintiffs' company exceeded their 
 powers in nuiking the purchase, and 
 that, therefore, the title of the boats 
 and apparatus did not vest in the com- 
 pany, and consequently, that the funds 
 which the directors appropriated for 
 
 ' Halford v. Cameron, etc., R. Co., 
 16 Q. B. 442 ; 20 L. J. Q. B. 160 ; Agges 
 V. Nicholson, 1 H. & N. 165 ; 25 L. J. 
 
 49 
 
 the purpose were misappropriated, 
 and the directors may be compelled to 
 account for them to the company, for 
 the benefit of the stockholders. And 
 possibly the funds so misapplied 
 might have been ])urflued into the 
 hands of the transportation com- 
 pany by showing the insolvency of 
 the directors ; but this must have 
 been done at once, and any consider- 
 able acquiescence in the transaction 
 will prevent the stockholders or the 
 company from pursuing the funds. 
 And in that case the title to the prop- 
 erty will have passed from the trans- 
 portation company, prima facie, into 
 the directors as natural persons. In 
 such a state of the title the directors 
 might most undoubtedly dispose of the 
 property, and collect the avails as a 
 legitimate mode of restoring the funds 
 misapplied to the company. And for 
 this purpose they might most unques- 
 tionably take the securities upon sale 
 of the property, payable to the com- 
 pany, or stipulate that the purchaser 
 should pay the company. And this, 
 so far from being a continuance of the 
 perversion of the charter powers, is 
 the surest and only obvious mode of 
 restoring the funds to their proper 
 channel. 
 
 " ' The only wrong in the directors 
 is in having exceeded their powers, 
 and the transaction with the defend- 
 ants, so far as it goes, will tend to 
 restore a portion of the money to its 
 rightful proprietor ; and of this the 
 defendants ought not to complain, as 
 they are confessedly solicitous to 
 bring the directors of the plaintifEs' 
 company back to their legitimate 
 functions. And if they should dis- 
 pose of all the property purchased in 
 this mode, in the mauiu'r this is sold 
 to the defendants, it will go far tore- 
 store them to their appropriate place, 
 — the treasury of the plaintiffs, — for 
 the benefit of the company and its 
 stockholders.' " 
 
 Ex. 348. See, also, Peruvian R. Co. 
 V. Thames, etc., Co. , L. R., 2 Ch. 617 ; 
 Brice's Ultra Vires, loo.
 
 386 Pkivate Corporations. 
 
 will always be imposed where the corporation is established for 
 the prosecution of any business which in any measure confers 
 upon it the qualities of a trading corporation, or contemplates the 
 contracting of debts by it in the prosecution of the business for 
 which it was established. 
 
 But in this country at least no question is better settled upon 
 authority than that a corporation not j^rohibited by law from do- 
 ing so, and without any express power in its charter for that pur- 
 pose, may make a negotiable promissory note, payable either at a 
 future time or on demand, when such note is given for any of the 
 legitimate purposes for which the company was incorporated.* 
 
 And it is also now well settled, that a power granted to a cor- 
 poration, to engage in a certain business, carries with it the au- 
 thority to act, precisely as an individual would act, in carrying 
 on such business, and that it would possess for this purpose the 
 usual and ordinary means of accomplishing the objects of its 
 creation in the same manner as though it were a natural person. 
 Thus, if incorporated for the purpose of building a bridge, it 
 may contract a debt for labor or materials to be used thereon, or 
 for the land on which it is to be built. And it may give as evi- 
 dence of its indebtedness therefor its note, bond or mortgage. Or 
 it may borrow money for this purpose, and execute a valid note 
 or bond and mortgage to secure the same.^ 
 
 But a corporation would ordinarily have no authority to assume 
 
 1 Police Jury v. Britton, 15 Wall. 566; Bills of Exch., § 79 ; Edwards on Bills, 
 Moss V. Averell, 10 N. Y. 449 ; Rich- 77. See, also, Munn v. Commission 
 mond, etc., R. Co. v. Snead, 19 Gralt. Co., 15 Johns. 44; Moss v. Oakley, 3 
 354; Story on Bills of Exch., ^ 79; Hill, 365 ; Mott v. Hicks, 1 Cow. 513 ; 
 Edwards on Bills, 77 ; Barry v. Mer- Mead v. Keeler, 34 Barb. 30; Par- 
 chants' Ex. Co.,1 Sandf. Ch. 380; Fay tridge v. Badger, 35 id. 146 ; Olcott v. 
 V. Noble, 13 Cash. 1 ; Munn v. Com- Tioga, etc., R. Co., 40 id. 179 ; Barker 
 mission Co., 15 Johns. 44; Olcott v. v. Mechanics' Ins. Co., 3 Wend. 94; 
 Tioga, etc., R., 40 Barb. 179 ; Mechan- Mechanics', etc., v. White Lead Co., 
 ics' Association v. White Lead Co., 35 35 N. Y. 505 ; Ketchum v. Buffalo, 14 
 N. Y. 505 ; Lucas v. Pitney, 3 Dutch, id. 356; Barnes v. Ontario Bank, 19 
 231 ; Oxford Iron Co. v. Spradley, 46 id. 153 ; Hardy v. Merriweather, 14 
 Ala. 98; Bradley v. Ballard, 55 111. Ind. 303; Union Bank v. Jacobs, 6 
 413 ; Union Bank v. Jacobs, 6 Humph. Humph. 515 ; Lucas v. Pitney, 37 N. 
 515. J. L. 331; Oxford Iron Co. v. Sprad- 
 
 2 Barry v Merchants' Ex. Co., 1 Sandf. ley, 46 Ala. 98 ; Commercial Bank, etc., 
 Ch. 380, It may also, without any v. Newport Manuf. Co., 1 B. Monr. 14; 
 special authority, make a note or draft. Bank of Chillicothe v. Chillicothe, 7 
 or accept a draft, for such a purpose, Ohio, 31 ; Hamilton v. New Castle R. 
 the indebtedness therefor being con- Co., 9 Ind. 359; Bradley v. Bullard, 
 tracted in the pursuit of the legitimate 55 111. 413; Rockwell v. Elkhoru Bank, 
 business of the corporation. Story on 13 Wis. 653.
 
 Corporate Contracts. 
 
 387 
 
 the debt of another, and issue a note therefor, nor to make or 
 indorse notes or bills merely for the accoMunodution of another.' 
 Nor can an insurance company issue bonds in order to lend its 
 credit.' 
 
 But the j)Ower to borrow money carries with it by implication 
 authority to mortgage the corporate property, except its franchises, 
 unless expressly restrained therefrom by the provisions of the 
 constating instruments.^ The power either to sell or mortgage 
 the franchises of the corporation is never, it has been held, to be 
 implied, but must be conierred by some express provision.' The 
 power to purchase lands has also been held to carry with it by 
 implication the power to mortgage the same to secure the pur- 
 chase-money.^ 
 
 ' Stark Bank v. U. S. Pottery Co., 34 
 Vt. 144 ; Smead v. ludianapolia, etc., 
 K. Co., 11 Ind. 104 ; Bank of Genesee 
 V. Patcliiu Bank, 13 N. Y. 309; Cen- 
 tral Hank v. Empire Stone Dressing 
 Co., 3(3 Barb. 23 ; Bridgeport City Bank 
 V. Empire Sione Dressing Co , 30 id. 
 421 ; Farmers' Bank v. Empire Stone 
 Dressing Co., 5 Bosw. 275. 
 
 ' Alabama L. Ins. Co. v. Smith, 4 
 Ala. (N. S.) 338. See, al.so, Attorney- 
 Gen. V. Insurance Co., 9 Paige, 470; 
 Saiford v. Wyckoff, 4 Hill, 442 ; Lex- 
 ington V. Butler, 14 Wall. 282 ; Sum- 
 mer V. Marcv, 3 Woodb. & M. 105. 
 
 3 Parish v." Wheeler. 22 X. Y. 494 ; 
 Nelson v. Eaton, 26 id. 410 ; Curtis v. 
 Leavitt, 15 id. 9 ; Barry v. Merchants' 
 Ex. Co., 1 Sandf. Ch. 3^0 ; Farmers' 
 Loan and Trust Co. v. Hendricksou, 25 
 Barb. 484; Holbrook v. Basset, 5 Bosvv. 
 147 ; Kiugv. Merchants' Ex. Co., 5 N. 
 Y. 547 , Miller v. Chance, 3 Edw. 399 ; 
 Peunock v. Coe, 23 How. 117; Rich- 
 ards V. Merrimack, etc., R. Co., 44 X. 
 H. 127 ; Burr v. McDonald, 3 Gratt. 
 206; Susquehanna Bridge Co. v. Gen- 
 era! Ins. Co.. 3 Md. 303; Bardstown.etc, 
 R. Co. V. Metcalf. 4 Mete. (Ky.) 199; 
 Coe V. Johnson, 18 Ind. 218. 
 
 "• Susquehanna Canal Co. v. Bonham, 
 9 W. & S. 27 ; Steiuers' Appeal, 27 
 Penn. St. 313 , Lauman v Lebanon 
 Valley, etc., R. Co., 30 id. 42 ; York 
 & Md. R. Co. V. Winans, 17 How. 39 ; 
 Pullan V. Cincinnati, etc., R. Co., 4 
 Biss. 35; Pierce v. Emery, 32 X^. H. 
 484 ; Commonwealth v. Smith, 10 Al- 
 len, 448 ; Richardson v. Sibley, 11 
 id. 65; Hendee v. Pinkerton, 14 id. 
 
 381 ; Troy, etc., R. Co. v. Kerr, 17 Barb. 
 601 ; Black v. Delaware, etc.. Canal 
 Co., 22 X. J. Eq. 130 ; Winchester.etc, 
 Turnp. Co. v. Vimout, 5 B. Monr. 1; 
 Arthur v. Commercial Bank, 9 S. &M. 
 394; Coe v. Columbus, etc., R. Co., 10 
 Ohio St. 372. See, however, Hall v. 
 Sullivan, etc., R. Co., 2 Redf. Ano. R. 
 Cas. 621 , Shepley v. A.& St. L. R. Co., 
 55 Me. 295 ; Kennebec, etc., R. C^o v. 
 Portland, etc., K. Co., 59 id. 9 ; Miller 
 V. Rutland, etc., R. Co., 36 Vt. 452. 
 If tlie mortgage is of the franchises as 
 well as the property, it will be void aa 
 to the former, but good as to the lat- 
 ter, unless otherwise provided by law. 
 Pullman v. Cincinnati, etc., R. Co., 4 
 Biss. 35. But see, under Massachu- 
 setts statutes, Richardson v. Siblev, 
 11 Allen, 65. 
 
 As to the power under statutes of 
 various states to form new corporations 
 by the purchasers on a foreclosure of 
 mortgages against old ones, with all 
 the powers of the old ones, but exempt 
 from its debts and liabilities, see 
 Wilcox's Ohio R. L. 209 ; X. Y. R. S. 
 (Edmuuds") 016, 912, Xixon's X. J. 
 Dig. (4lh ed.) 791 ; Purdon's Penn. Dig. 
 (9th ed.) 200; R.S.Wisi-on.,chap.79, 5^33; 
 Virginia Code, chap. 61.^ 27; Gen. Stat. 
 Xeb. (1873), 204, Swan & Sengluis' 
 Ohio Stat. 125. See, also. Green's 
 Brice's Ultra Vires, 123, et seq. 
 
 ^ Gordon v. Preston, 1 Watts, 385 ; 
 Taber v. Cincinnati, etc., R. Co., 15 
 Ind. 459 ; Jackson v. Brown, 5 Wend. 
 590. 
 
 And power expressly conferred to 
 mortgage for some particular purpose
 
 388 
 
 Private Cokporatioks. 
 
 Skc. 242. Right to mortgage.— And, as a general rule, corpora- 
 tions may mortgage or assign their property to secure or pay 
 their debts ; ^ and such mortgage may not only create a lien on 
 the existing propei'ty of the corporation, but by its terms be 
 made to cover subsequently acquired property, which it may be 
 necessary for it to acquire, in the prosecution of its legitimate 
 business." But frequently this right is expressly provided for by 
 statutes.' 
 
 Sec. 243. Conclusions as to ultra vires contracts. — From the fore- 
 going it is apparent that a contract may be ultra vires : 
 
 1st. When it is made by the corporation or its agents, but is 
 wholly beyond the power of such corporation, or is not within the 
 scope of the powers conferred upon the agent making it ; or 2d. 
 
 will not, it has been held, prevent 
 mortgaging the property to secure 
 creditors. Allen v. Montgomery, etc., 
 11. Co., 11 Ala. (N. S.)437; Mobile, etc., 
 
 » Pierce v. Emery, 33 N. H. 484; 
 Commissioners, etc., v. Troy, etc., R. 
 Co., 1 Redf. Am. R. Cas. 575 ; Com- 
 monwealth V. Smith, 10 Allen, 448 ; 
 Sljaw V. Norfolk, etc., R. Co., 5 Gray. 
 162 ; Lenox v. Roberts, 2 Wheat. 373 ; 
 Dana v. Bank U. S., 5 W. & S. 323 ; 
 State V. Bank of Md., 6 G. & J. 205 ; 
 Hopkins v. Gallatin Turnp. Co., 4 
 Humph. 403 ; Ex parte Con vvay, 4 Ark. 
 304 ; Haxtun v. Bishop, 3 Wend. 13 ; 
 De Ruyter v. St. Peter's Church, 3 
 Barb. Ch. 119 ; S. C, 3 Comst. 238 ; 
 Flint V. Clinton Co., 12 N. H. 431 ; 
 Warner v. Mower, 11 Vt. 385. 
 
 It is immaterial whether the instru- 
 ment is a mortgage or trust deed. 
 Whitewater & C. Co. v. Vallette, 21 
 How. 414; Pullan v. Cincinnati, etc., 
 R. Co., 4 Biss. 35; Coe v. McBrown, 
 22 Ind. 252 ; Coe v. Johnson, 18 id. 
 218. But see In re York, etc., R. Co., 
 50 Me. 552. 
 
 ^ Dunham v. Cincinnati, etc., R. Co., 
 1 Wall. 254 ; Galveston, etc., R. Co. v. 
 Cowdrey, 11 id. 483; United States v. 
 New Orleans, etc., R. Co., 12 id. 362 ; 
 Railroad Co. v. Soutter, 13 id. 517 ; 
 Pennock v. Coe, 23 How. 117; Wil- 
 liamson V. New Albany, etc., R. Co.,1 
 Biss. 198 ; Morrill v. 'Noyes, 56 Me. 
 458; Haven v. Emery, 33 N. H. 66; 
 
 R. Co. V. Talman, 15 id. 472. See, 
 also, Phillips v. Winslow,18 B. Monr. 
 431. 
 
 Seymour v. Canada, etc., R. Co., 25 
 Barb. 284; Stevens v. Buffalo, etc., R. 
 Co., 31 id. 590 ; Buffalo, etc., R. Co. v. 
 Lampson, 47 id . 533 ; Benjamin v. El- 
 mi ra, etc., R. Co., 49 id. 446 ; Fish v. 
 Potter, 2 Abb. Ct. App. Dec (N. Y.) 
 138 ; Stevens v. Watson, 4 id. 302 ; Phil- 
 adelphia, etc., R. Co. V. Woelpper, 64 
 Penn. St. 366 ; State v. Northern Cent. 
 R. Co.. 18 Md. 193 ; Ludlow v. Hunt, 
 
 I Disb. 552; Coe v. McBrown, 22 Ind. 
 252 ; Pierce v. Milwaukee, etc., R. Co., 
 24 Wis. 551. But compare Howe v. 
 Freeman, 14 Allen, 566; Moody v. 
 Wright, 13 xMetc. 17 ; Coe v. Columbus, 
 etc., R. Co., 10 Ohio St. 372 ; Brainerd 
 V. Peck, 34 Vt. 490 ; Bath v. Miller, 
 53 Me. 368 ; Williamson v. New Jer- 
 sey, etc., R. Co., 10 C. E. Green, 13 ; 
 Pierce V. Emery, 32 N. H. 484; Far- 
 mers', etc., Co. V. Commercial Bank, 
 
 II Wis. 207; Jesaup v. Trustees, 14 
 Iowa, 572 ; Phillips v. Winslow, 18 B. 
 Monr. 430. 
 
 3 Iowa Code (1873), § 1284. 
 
 If a railroad has authority to borrow 
 money and execute such securities as 
 it may deem expedient, it may mort- 
 gage its road and franchises, and all of 
 its property of every kind, including 
 future acquisitions and earnings. 
 Pierce v. St. Paul, etc., R. Co., 24 Wis.
 
 Corporate Contracts. ' 389 
 
 When it is contrary to the positive provisions of law or against 
 public policy. The same rules apply to a corporation that apply 
 to individuals, and if a contract is made by it which is jjrohibited 
 by law, it cannot enforce it, because the act is illegal and it is in 
 pari delicto with the otlier party. Thus in a New York case* 
 the plaintiff, a corporation created under a special act by %vlnch it 
 was authorized, among other things, " to grant, bargain, sell, buy 
 or receive all kinds of property, real, personal, or mixed, or to 
 hold the same in trust or otherwise * * * and to advance 
 moneys * * * upon any property, real or personal, on such 
 terms or commissions as may be established or approved by the 
 directors." The action was brought for the collection of two 
 notes for $8,000 each, executed by the defendants, and payable to 
 their own order, and indorsed by them to the plaintiff before they 
 became due. The answer alleged, substantially, that the ] laintiff 
 was a corporation, created by special act of the New York legis- 
 lature, and that it had engaged in the business of banking in vio- 
 lation of the laws of the state, and discounted the notes in suit in 
 the course of that business, and that the notes were made for the 
 purpose of raising money upon them, and that they were dis- 
 counted by the plaintiff and passed to the defendant's credit upon 
 the plaintiff's books. The general statutes of New York pro- 
 hibited any corporation, not expressly incorporated for that pur- 
 pose, from carrying on that business, and the constitution of the 
 state, section 4, article 8 of the state constitution, prohibited the 
 state legislature from passing any act granting a special charter 
 for hanking business. The court held that the transactions 
 between the plaintiff and defendants constituted hanMnghiisiness, 
 within the meaning of the statute, and that the defendant was not 
 estopped from setting up the invalidity of the notes, as the transac- 
 tion was one expressly forbidden by the laws of the state. Daniels, 
 J., in a very able opinion, among other things, says: "If the 
 
 551. And a mortgage given to the state, cliises, including all right to exist as a 
 by virtue of a provision of the statutes, corporation. St. Paul R. Co. v. Parcher, 
 and expressed to be on " roads, lands, 14 Minn. 297 ; Farmers' L. & T. Co. 
 and franchises," has been held on fore- v Commercial Bank, 15 Wis. 424 ; Par- 
 closure and sale to convey all the fran- ish v. Wheeler, 22 N. Y. 494. 
 
 * N. Y. Trust and Loan Co. v. Helmer, 12 Hun, 35.
 
 390 Pkivatk Corporations. 
 
 position urj^ed upon the consideration of the court (by the plaintiff) 
 should receive its sanction, the statute, whose restraint has been 
 violated, would be practically repealed. For it woidd be held that 
 what the legislature have declared that the plaintiff should not do 
 might safely be carried on under the sanction of the courts. That 
 would render the statute nugatory, which would violate the duty 
 and authority vested in the court, and rendered obligatory upon 
 it. The notes could not be discounted, and received in plain vio- 
 lation of the terras of the statute of the state." ^ In a late Pennsyl- 
 vania case'' the same rule was adopted in a case where a national 
 bank, contrary to the prohibition of the national banking act, 
 took a mortgage of real estate, partly to secure ?^ future loan, and 
 partly to secure the payment of pre-existing notes. The court 
 had previously held that a mortgage given to secure the payment 
 of future loans was ultra mres^ and in the case first cited they 
 held that as to the future loans, the mor-tgage was void, but was 
 good as to those existing when the mortgage was made. The doc- 
 trine of estoppel in jpais does not extend so far as to enable a coi^ 
 poration to do, in effect, what is forbidden by law, or what it is, 
 other mise, wholly incapable of doing, and, when a contract is 
 wholly ultra vires, it cannot acquire validity from the circum- 
 stance that it has been treated and acted upon by the parties as a 
 valid transaction." Thus, where a lease, made by a railroad com- 
 pany, of its property and franchises was made, which it had no 
 'power to make, it was held that it had no power to ratify it, by 
 accepting rent upon it.* 
 
 If a contract, which is ultra vires, is executed by a corporation 
 or by an agent on its behalf, and by virtue thereof it receives the 
 consideration and fruits of the same, and appropriates it, and all 
 the members receive the benefit of it and acquiesce therein, the 
 plea of ultra vires cannot be maintained by such corporation as a 
 defense to an action on the contract. 
 
 'Firemen's Ins. Co. v. Ely, 2 Cow. '^ Woods v. People's National Bank, 
 
 678; N. Y. Life Ins. and Trust Co. v. 83 Penn. St 57. 
 
 Beebe, 7 N. Y. 364; Seneca County spo^iery, Scully, 72 Penn. St. 456. 
 
 Bank v. Lamb, 26 Barb. 595; Barton '^ In re Comstock, 3 Saw. (U. S. C. 
 
 V. Port Jackson Plankroad Co., 17 id. C.) 218. 
 
 397; De Witt v. Brisbane, 16 N. Y. ^ Ogdensburgli, etc., R. R. Co. v. 
 
 508 ; Richie v. Aslabury Co., 7 Irish Vermont, etc., R. R. Co., 4 Hun, 268. 
 App. 653.
 
 Corporate Contracts. 391 
 
 If a contract is entered into by a corporation or its agents, wliich 
 is ultra vires so long as it remains wholly unexecuted, any stock- 
 holder, or, under certain circumstances, a creditor, may, by a proper 
 proceeding, restrain the execution of the same. 
 
 If a contract is ultra vires, because it is in violation of positive 
 law or against public policy, the execution of it may be restrained 
 upon proper proceedings in equity to that end, and instituted by 
 a stockholder or other interested party. 
 
 If a contract is ultra vires, it is held by some of the authorities 
 that this may be set up as a defense to an action on the contract ; 
 but in such a case the other party to such contract, or his assigns, 
 may, in all cases, recover the consideration of the contract, viz. : 
 the money advanced or the value of the property delivered 
 thereon. 
 
 That in all cases where money or property has been received 
 by a corporation, by virtue of a contract, and the act has received 
 the universal assent, either express or implied, of the corporators, 
 such contract will be binding, notwithstanding it may be ultra 
 vires : and if a defense by the corporation, of ultra vires, can be 
 successfully interposed to a recovery on such contract, it can- 
 not defeat the right of the other party to recover the amount of 
 money advanced or the value of property actually delivered by 
 him, and received and appropriated by such corporation. 
 
 The better doctrine would seem to be that where a contract in 
 excess or outside the corporate powers has been made by a corpo- 
 ration, and it has received the full consideration and appropriated 
 the same, so that it cannot be restored and the other party placed 
 in statu quo, and especially where no objection is interposed upon 
 the part of those who might have made it, the corporation will 
 generally be bound by the contract, the same as a natural person. 
 
 And it may also be said that, although a contract loholly out- 
 side the purposes of its creation is entered into, is void, yet, if 
 a corporation contracts with reference to matters within its 
 powers, but in doing so, exceeds them, the person with whom it 
 deals cannot set up such excessive exercise of its corporate pow- 
 ers to avoid the contract.- 
 
 1 Little-worth v. Davis, 50 Miss. 463 ; WhitDey Arms Co. v. Barlow, 63 N. 
 Y. 02 ; Ciinnou v. McNab, 48 Ala. 99.
 
 392 Private Corporations. 
 
 CHAPTER X. 
 
 THE CORPORATE SEAL. 
 
 Sec. 244. Definition ; history. 
 
 Sec. 245. History of private seals. 
 
 Sec. 240. How seals came into use. 
 
 Sec. 247. Incident of a corporation. 
 
 Sec. 248. Former doctrine as to corporate seals. 
 
 Sec. 249. Origin of the law relating to corporate seals. 
 
 Sec. 251. Corporate seals ; present doctrine in reference to. 
 
 Sec. 254, 255. What is a common seal. 
 
 Sec. 256. By whom the seal should be affixed. 
 
 Sec. 257. Whei-e an acknowledgment is required. 
 
 Sec. 258. Doctrine in relation to agents. 
 
 Sec. 260. The seal as evidence. 
 
 §244. Definition; history. — A seal lias been defined as an im- 
 pression upon wax, wafer, clay, or some other tenacious substance 
 capable of being impressed.' Lord Coke defined it as wax with 
 an impression ; sigillum est cera impressa, quia cera sine iin- 
 jpressione non est sigillum.'^ But the former practice of using 
 wax or wafers has grown into disuse with corporations, as well 
 as for private seals ; and with the former, at least, an impression 
 
 * 3 Inst. 169; Warren v. Lynch, 5 225. And in Vermont it has been held 
 
 Johns. 239. that a corporation might convey by 
 
 ^ 3 Inst. 169. See, also, Mill Dam the deed of their president, sealed 
 
 Foundry v. Hovey, ^1 Pick. 417 ; 4 with his private seal. Warner v. 
 
 Kent's Com. 452. But a distinct im- Mower, 11 Vt. 385. See, also, Lunney 
 
 pression of the seal upon paper i.s gen- v. East Warren Co., 43 N. H. 343; 
 
 erally held a sufficient seal, without Goddard's Case, 2 Coke, 5 ; Sutton's 
 
 wax or wafer. Carter v. Burley, 9 N. Hospital Case, 10 id. 30 5. But 
 
 H. 558. See, also. Mill Dam Foundry see Baxter v. State, 15 Wis. 488, where 
 
 V. Hovey, 21 Pick. 417; Hendee v. a seal composed of a piece of paper 
 
 Pinkerton, 14 Allen, 381. Ifthepresi- affixed to a contract made by a com- 
 
 deut of a corporation, which has mi.ssioner on behalf of the state was 
 
 adopted no corporate seal, executes a held to be simply the seal of the coni- 
 
 mortgage deed, and the trustees adopt missioner. Also, Regents of Uuiver- 
 
 a seal that he affixes opposite his sity v. Detroit, etc., Society, 12 Mich, 
 
 name as the seal of the corporation 138, where the individual seal of an 
 
 for the time being, such seal is suf- agent of a corporation to a corporate 
 
 ficieut. South Baptist Soc. v. Clapp, contract was held simply nugatory 
 
 18 Barb. 36. And a corporation may But in Porter v. Androscoggin, etc., 
 
 adopt the seal of another, or an ink R. R. Co., 37 Me. 349, a seal attached 
 
 impression as a seal. Crossman v. by an agent to a corporate contract is 
 
 Hilltown, etc., Co., 3 Grant (Penn.), treated as the seal of the corporation.
 
 The Corporate Seal. 393 
 
 on parchment or paper is generally considered as suflicient and 
 equivalent to an impression on wax or wafer. 
 
 § 245. History of private seals — The use of scals may be traced 
 to a very remote antiquity, and private signets and rings were 
 at an early period nsed for sealing in the place of signatures, 
 and as insignia of authority. Thus, w^e iind King Darius sealing, 
 " with his own signet and with the signet of his lords."' And 
 Ahasuerus said to Esther, the queen, " write ye also for the Jews 
 as it liketli you, in the king's naine, and seal it with the king's 
 ring ; for the writing which is written in the king's name and 
 sealed with the king's ring may no man reverse." ' 
 
 It seems, also, that private seals were in common use among 
 the Romans, and especially in attestation of testaments. ' 
 
 In the times of the early English Saxons, it does not appear 
 that seals were much in use in England. According to Black- 
 stone, it was the practice of the illiterate to affix to instruments a 
 cross instead of a signature ; and the French Normans used only 
 a seal. He says : " The method of the Saxons was for such as 
 could write to subscribe their name, and whether they could write 
 or not, to affix the sign of the cross, which custom our illiterate vul- 
 gar do, for the most part, to this day keep up, by signing their mark 
 when unable to write their names. And, indeed, this inabilitv to 
 write, and therefore making a cross in its stead, is honestly 
 avowed by Caedwalla, a Saxon king, at the end of one of his 
 charters. In like manner, and for the same insurmountable rea- 
 son, the Normans, a brave, but illiterate nation, at their first 
 settlement of France, used the practice of sealing only without 
 writing their names, which custom continued when learning made 
 its way among them, though the reason for doing so ceased ; and 
 hence the charter of Edward the Confessor to Westminster Abbey 
 himself being brought up in Normandy, was witnessed only by 
 his seal, and is generally thought to be the oldest sealed charter, 
 of any authenticity, in England. At the conquest, the Norman 
 
 ' Bible, Daniel G, v. 17. And it is esis, chap. 33, v. 18 ; Jeremiah, chap, 
 
 recorded that Jezebel, wife of Ahab, 23, v. 10, 11. 
 
 king of Samaria, " wrote letters and '■' Bible, Esther, chap. 8, v. 8. See, 
 
 sealed them with his seal." Bible, 1 also, Jeremiah, chap. '62. 
 
 Kings, chap. 21, v. 8. See, also, Gen- ^ 2 Bl. Com. 305 ; 4 Kent's Com. 453. 
 
 50
 
 394 Private Cokpokations. 
 
 lords brought over into this kingdom their own fasliions, and in- 
 troduced waxen seals only, instead of the English method of writ- 
 ing their names and signing with the sign of the cross. And in 
 tlie reign of Edward I, every freeman, and even such of the 
 more substantial villeins as were fit to be put upon juries, had their 
 distinct particular seals. * * * This neglect of signing, and 
 resting only upon the authenticity of seals, remained very long 
 among us ; for it was held, in all our books, that sealing alone was 
 sufficient to authenticate a deed ; and so the common form of 
 attesting deeds, sealed and delivered, continues to this day." 
 
 Sec. 246. How seals came into use.— From what has been said 
 it is evident that private seals came into use from the inability of 
 parties to write ; and that the practice is continued both with 
 natural persons as well as corporations, from a custom that would 
 perhaps be " more honored in the breach than the observance." 
 
 Sec. 247. incident of a corporation. — A right to have and use a 
 common seal is said to be incident to all corporations.^ The use 
 of the common or corporate seal by corporate bodies is supposed 
 to have originated like private seals, from the general inability of 
 persons to write, although Sir Wm. Blackstone attributes the use 
 of a common seal to the fact that " a corporation being an invis- 
 ible body cannot manifest its intentions by any personal act or 
 oral discourse, it, therefore, acts and speaks only by its common 
 seal."^ 
 
 This is not, however, literally correct, as the will of the corpo- 
 rate body can only be expressed by a vote or voice of the majority 
 of its members ; * and the common seal affixed to a corporate 
 
 1 3 Bl. Com. 305. 26 id. 438; Savings Bank v. Davis, 8 
 
 '^ Bac. Abr., title Corp. 3. Conn. 191 ; Poultney v. Wells, 1 Aik. 
 
 ^ 1 Bl. Com. 475. 180; Milledge v. Boston Iron Co., 5 
 
 4 Tlie ancient doctrine has been Cush. 158 ; Dan forth v. Schoharie 
 
 departed from, in the modern decis- Turnpike Co., 13 Johns. 337 ; Dunn v. 
 
 ions. Chesapeake, etc., Co. v. Kuapp, Rectorof St. Andrew's, 14 id. 118; Mott 
 
 Pet. 541; Fleckner v. Bank of United v. Hicks, 1 Cow. 513 ; Brady v. Mayor, 
 
 States, 8 Wheat. 338, where it was etc., of Brooklyn, 1 Barb. 584; St. 
 
 held that the acts of a corporation Mary's Church v. Cagger, 6 id. 576 ; 
 
 may be evidenced by a written vote as Peter.son v. Mayor, etc., of New York, 
 
 well as by the corporate seal. See 17 N. Y. 449 ; North Whitehall v. 
 
 Maine Stage Co. v. Langley, 14 Me. South Whitehall, 3 S. & R. 117 ; '-hest- 
 
 444; Badger v. Bank of Cumberland, nut Hill Turnpike Company v. Rutter,
 
 The Corporate Seal, 395 
 
 instnimcnt is only authenticated evidence of such corporate will. 
 If authority is by the corporators or by the fundamental law 
 of the corporation conferred upon a certain number of its mem- 
 bers, as a board of directors, they nuiy undoubtedly represent the 
 members and are supposed in their vote or acts to represent the 
 body of the corporators. And the annexation of a common or cor- 
 porate seal to any corporate conveyance or contract is evidence only 
 that the majority of the corporators have assented to such con- 
 veyance or contract ; and when it is used it is in attestation 
 of this will, although Blackstone observes in reference to the 
 corporate seal, that " it is the fixing of the seal, and that only, 
 which unites the several assents of the individuals who compose 
 the community and makes one joint assent of the whole." ^ But 
 it is evident that this idea of the corporate seal is imaginary and 
 rests upon no real foundation. It is a mere sign of the corporate 
 will — a mere evidence of corporate action ; and in this respect 
 possesses no higher qualities or virtue than the private seal of an 
 individual. The practice of using a corporate seal properly origi- 
 nated, as we have suggested, in an age of general ignorance of the 
 art of writing ; and like the private seal it has continued in use, 
 althouii'h the orio;inal reason for its use has ceased to exist. 
 
 Sec. 24:8. Former doctrine as to corporate seals. — It was formerly 
 
 held that the corporate assent, as we have stated, could only be 
 expressed by the corporate seal. But there has been a great re- 
 laxation of this rule, if it is not entirely discarded." And the gen- 
 
 4 id. IG ; Hamilton v. Lycoming Mu- Ind. 359; Smith v. Congregational 
 tual Insurance Company, JJPenn. St. o44; Meeting House, 8 Pick. 178 ; Abbott v. 
 Union Bank of Maryland v. Kidgelv, Hermon, 7 Me. 118; Watson v. Bennett, 
 1 H. & U. 329, 413 ; Elysville Man"u- 13 Barb. 196 ; American Ins. Co. v. 
 facturing Co. v. Okisko'Co., 1 Md. Ch. Oakley, 9 Paige, 496; Stone v. Berk- 
 Dec. 393 ; Petrie v. Wright, 6 S. & M. shire Congregational Society, 14 Vt. 
 647 ; Baptist Church v. Mulford, 3 86 ; Gasset v. Andover, 21 id. 342 ; 
 Halst. 182 ; Conmiercial Bank v. Xew- Sheldon v. Fairfax, id. 102; State v. 
 port Manufacturing Co., 1 B. I\Ionr. 13; Morris it Essex R. R. Co., 23 N. J. L. 
 Garvey v. Colcoke, 1 Nott & McC. 231; 360 ; Palm v. Medina Ins. Co., 20 Ohio, 
 Union Bank V. Jacobs, 6 Humph. 515 ; 529 ; Muir v. Louisville & Portland 
 Hamilton v. Newcastle R. R. Co., 9 Canal Co., 8 Dana, 161. 
 
 1 1 Bl. Com. 475. • Copper Mines v. Fox, 16 Q. B. 229 ; 
 
 ^Henderson v. Australian Royal Diggle v. Jjondon, etc., R. Co., 5Exch. 
 
 Mail, etc., Co., 5 E. & B. 40!> ; Same v. 442 ; Mayor of Ludow v. Charlton, 6 
 
 Marzetti, 11 Esch. 228 ; Fishmongers' M. & W. 815; Arnold v. Mavor of 
 
 Co. V. Robertson, 5 M. &Q. 131 ; Clark Poole, 4 M. & G. 860; Paine v. 
 
 V. Cucktield, 11 Eng. L. & E. 443; Strand Union, 8 Q. B. 226 ; Church v.
 
 396 PrIVATK CoKl'OliATIONS. 
 
 eral doctrine now recognized is, that the corporation may make con- 
 tracts, by the will of the majority of the corporators, or, which is the 
 same thing, by the action and will of the majority of those author- 
 ized to act for the body ; the corporate seal being only essential, 
 if at all, in case of the conveyance of lands or the more important 
 contracts. It has been truly said that " as the art of writing became 
 more common in England, tlie practice of concurring with the tenor 
 of every written instrument hy seal, an account of its inconven- 
 ience, grew into disuse with individuals, and was confined to those 
 writings of a peculiarly high and solemn kind, which were em- 
 ployed in the transfer of lands and acts of the like nature. The 
 practice, however, still continued with the old corporations of the 
 common law, perhaps from the natural inflexibility of bodies of 
 men, where many wills must concur to a change, and because 
 owing to the comparative paucity of their contracts and the num- 
 ber of their agents, the inconvenience of this mode of contracting 
 would be less sensibly felt by them than by individuals. It is 
 probable that in this way grew up the old rule, so long and so 
 well established in England, that except in the administration of 
 its internal affairs, as the election of officers and the like, cor- 
 porations aggregate could signify their assent only by their 
 common seal, and of course could act and contract only by deed." ^ 
 
 Imperial, etc., R. Co., 6 A. & E. 840 ; Columbia v. Patterson, 7 Crancli, 399 ; 
 
 Smart v. West Ham. Union, 10 Exch. Mott v. Hicks, 1 Cow. 513 ; Union B'k 
 
 867 ; Renter v. Elec. Tel. Co., 6 E. & v. Ridgely, 1 Harr. & G. 324 ; The 
 
 B. 341 ; 37 E. L. & E. 189 ; liow v. Banks v. Poitiaus, 3 Rand. (Va.) 136 ; 
 
 London, etc., R. Co., 18 Q. B. 633. Fleckner v. Bank of U. S., 8 Wheat. 
 
 The former doctrine seems to be 338 ; Danforth v. Schoharie Turnp. 
 
 entirely discarded in this country. Co., 12 Johns. 227. 
 
 Bank of Columbia v. Patterson, 7 If the common seal is affixed to an 
 
 Cranch, 299 ; Chestnut Hill Turnp. Co. instrument, and the signatures of the 
 
 V. Rutter, 4 S. & R. 16 ; School District proper officers, the courts will presume 
 
 V. Wood, 13 Mass. 199 ; Bank of U. S. that they did not exceed their author- 
 
 V. Dandridge, 12 Wheat. 64 ; Bank of ity. Morris v. Keil, 20 Minn. 531 . 
 
 ' An interesting article on the sub- in the bark ' or was, but recognized a 
 
 ject of seals may be found in the substantial and intelligible principle 
 
 American Law Review, vol. 1, p. 638. and distinction, viz., that the distinct- 
 
 The author among other things refers ive element of sealing is the solemn 
 
 to the antiquity of seals and observes : and formal authentication of an instru- 
 
 " It seems to us, moreover, that a ment by the impression of some per- 
 
 ])hilological and historical examination manent symbol or token besides the 
 
 of the question leads to the gratifying signature, and has never selected or 
 
 conclusion, that the common law, in prescribed any single material on 
 
 this as in other matters, did not ' stick which that symbol must be impressed.
 
 The Cokpokate Seal. 
 
 397 
 
 Sec. 249. Origin of the law relating to corporate seals. — Wc have 
 referred to the origin of the use of ])rivate as well as corporate 
 seals, and the doctrine of the common law that the corporate body 
 
 " It may not be uninteresting, witli- 
 out attempting to pursue the subject 
 through all history, to recur to some 
 of the most ancient illustrations of a 
 similar custom. Lord Coke and the 
 writers of his age would liardiy have 
 rejected the authority of Job(xxxviii, 
 14), where we find the words, ' It is 
 turned as clay to the seal.' 
 
 " Impressions of seals upon clay 
 have been discovered, which are 
 thought to be of great antiquity. 
 Smith's Diet, of tlie Bible, verb. Clay 
 and Seal. Mr. Layard, in his ' Dis- 
 coveries in the Ruins of Nineveh and 
 Babylon ' (Part 1), refers to such in- 
 stances. ' Other corroborative evi- 
 dence,' he says (p. 153), 'as to the 
 identity of the king who built the pal- 
 ace of Kouyunjik with Sennacherib is 
 scarcely less remarkable. In a chamber 
 or passage in the south-west corner of 
 this edifice were found a large number 
 of pieces of fine clay, bearing the im- 
 pressions of seals (resembling the 
 YV ^^/-tocvrpii [the sealing earth] of 
 the Greeks), which there is no doubt 
 had been affixed, like modern official 
 seals of wax to documents written on 
 leather, papyrus or parchment. Such 
 documents, with seals in clay still 
 attached, have been discovered in 
 Egypt, and specimens are preserved 
 in the British Museum. The writings 
 themselves had been consumed by the 
 fire which destroyed the building, or 
 had perished from decay. In the 
 stamped clay, however, may still be 
 seen the holes for the string, or strips 
 of skin, by which the seal was fast- 
 ened ; in some instances, the ashes of 
 the string itself remain (M. Botta also 
 found at Khorsabad the ashes of string 
 in lumpsof clay impressed with a seal, 
 without being aware of their origin), 
 with the marks of the fingers and 
 thumb.' And again (p. 156 n.) : ' Not to 
 instance the clay seals found attached 
 to the rolls of papyrus, containing let- 
 ters written in the time of the Ptole- 
 mies and Romans, there are in the 
 British Museum seals bearing the 
 name of Shashank or Shishak (No. 
 558"i), of Amasis II, of the twenty- 
 sixth dynasty (No. 5584), and of Naf u- 
 
 arut or Nepherophia, of the twenty- 
 ninth dynasty (No. 5585). Such seals 
 were, therefore, affixed by the Egyp- 
 tians to public documents ; and it was 
 in accordance with this principle, com. 
 mon to the two monarchies, that the 
 seal of the Egyptian king has been 
 found in Assyria.' So (p. 159), 'It 
 would seem, that, a peace having l)een 
 concluded between the pjgyptiatis and 
 one of the Assyrian monarchs, prol)- 
 ably Sennacherib, the royal signets of 
 the two kings, thus found together, 
 were attached to the treaty, which was 
 deposited amongst the archives of the 
 kingdom. Whilst the document itself, 
 written upon parchment or papyrus, 
 has completely j)erished, this singular 
 proof of the alliance, if not actual 
 meeting, of the two mouarchs, is still 
 preserved amidst the remains of the 
 state papers of the Assyrian Empire.* 
 The reader who has seen an English 
 patent, with its pendent seal, or the 
 cumbrous attachments of treaties, will 
 be struck with this evidence of the 
 antiquity of the custom thus pre- 
 served ; and the citations which fol- 
 low furnish evidence of its connection, 
 by a chain of legal and political usage, 
 with the present time. Sigillum is 
 the original word now translated into 
 seal, and the word used by ancient 
 writers, among them Lord Coke, 
 whose authority is ofteii cited and 
 relied upon in reference to this point. 
 Sigillum, signuin and sigmvculum mean 
 a mark, figure, or impression, on what- 
 ever material or substance. Leverett's 
 Latin Lexicon defines dgillum, the 
 diminutive of sigimm, as 'a little 
 image or figure,' while sigiium is said 
 to mean ' a mark or sign," and as a 
 derivative or secondary meaning, ' the 
 impression of a seal, seal.' And, in 
 the large Lexicon Totius Latinitatis of 
 Facciolatus and Forcellinus, the fol- 
 lowing definition is given : ' De imag- 
 ine, qute annulo signatorio in cera 
 aliave matcrin impriiuitur,obsignandis 
 litteris, amphoris, scriniis,' etc. It 
 does not seem necessary to inquire 
 when traces of a custom of such early 
 origin can first be found in the Middle 
 Ages. The pendent seals already
 
 398 Private Cokpokations. 
 
 could only act or express its action or assent by its common seal. 
 The early English doctrine on this subject was peculiar to the 
 common law, and not borrowed from the civil law, from whence 
 came most of the princij^les and doctrines relating to corporations. 
 For, according to Ayliffe, corporations might contract directly by 
 vote without the intervention of officers or agents, and of course 
 without the use of a seal.' 
 
 In relation to seals, it may with propriety be observed, that 
 their use having originated in the ignorance of people of the art 
 of writing, and this reason for the use of them having now been 
 generally removed by the general intelligence and ability of people 
 to write, there would seem to be no good reason for a continuance 
 of it, either as a private or corporate practice. And, accordingly, 
 we find it rapidly going into disuse ; and much of the former 
 technical doctrines relating to seals and sealed instruments prac- 
 tically disregarded, or at least greatly changed. . And although 
 JBlackstone affirmed that " a corporation being an invisible 
 body cannot manifest its intentions by any personal act or oral 
 discourse, it, therefore, acts and speaks only by its common seal. 
 For although the particular members may express their private 
 consents to any act by words or signing their names, yet this does 
 not bind the corporation ; it is the fixing of the seal, and that only, 
 which unites the assents of the individuals who compose the com- 
 munity, and makes one joint assent of the whole; " Mt is evident 
 
 mentioned were then used; and in the says they were used in France about 
 
 Glossary of Du Cange (Didot's ed. the ninth or tenth ; while it is stated 
 
 1846, with rtdditions by different hands, that the use of seals of any kind was 
 
 here referred to without distinction), entirely unknown in England in the 
 
 we find it stated in reference to these : beginning of the eleventh century. 
 
 ' Peusilium sigillorum, non nuperum (verb. SigiUum, p. 241.) On the con- 
 
 sed jierantiquum usum fuisse, licet tinent, gold, silver, and lead were 
 
 colligere et iis quae de Bullis observa- used. Sometimes lead was used ' loco 
 
 vimus, ubi 'plaiabens et aurens Bullas cer^e,' or with wax, and wax with gold, 
 
 primitus, filo aut serico tabulis appen- ' ut si aureum subriperetur remaneret 
 
 sas, docuimus.' ' Sed.' it is added, alter um.'" 
 
 ' quando cerea istiusmodi sigilla pe- (Du Cange, ) , ^ „ SiniLlum 
 
 rinde Uteris appendi cceperint non Cowel, \ ^^^'^- ^""*' ^^9Utum. 
 
 plane constat.' ' Dubius hseret ipsemet. Tomlin's Jacob's verb. Bull and 
 
 Cangius.' In one place he speaks of Seal.) 
 the twelfth century ; in another he 
 
 e 
 
 ' Ayliffe'a Civ. Law, B. 2, tit. 35, p. Wood's Civ. L. 136 ; Browne's Civ. 
 198. See, also, 2 Bl. Com. 805 ; 2 Law, B. 1, 104. 
 
 5 1 Bl. Com. 475.
 
 The Corporate Seal. 399 
 
 that the corporate seal did not unite, in fact, the wills of tlie 
 many members of a corporation aggregate, but that that will at all 
 times could only be expressed by the vote cast by its members, or 
 a majority of them ; and the common seal only furnished evidence 
 of that will, as thus expressed. 
 
 The seal did not make " one joint assent of the whole," but 
 was high, if not conclusive, evidence, of the corporate assent. 
 And it was never true that this assent could only be shown by 
 the common seal. The records of corporate action were always 
 evidence to show that by the votes of its members by-laws had 
 been adopted, certain officers elected, and agents appointed for 
 general or special purposes. And the agents thus appointed can 
 bind the corporation to any contract within the scope of tlie au- 
 thority thus conferred upon them by a mere corporate vote, with- 
 out the use of the common seal, and without any authority con- 
 ferred by a common seal. But where, by law, a valid contract 
 can only be executed by a seal of the parties, the seal of the cor- 
 poration may be required to constitute a valid contract.' 
 
 Sec, 250, Instead of affirming that "a corporation being an 
 invisible body cannot manifest its intentions by any personal act 
 or oral discourse," and that " it therefore acts and speaks only by 
 its common seal," it seems to me it would be more correct to say, 
 that as it is a mere ideal body, composed of members, a majority 
 of whose wills constitute the will of the corporate person, 
 this corporate will can only be evidenced by a fair expression 
 of the wills of this majority, of which the records of the corpora- 
 tion in this respect are the best evidence, and that the signatures 
 of officers or agents properly made, and the annexation of the cor- 
 porate seal, is but evidence and authentication of the corporate 
 will and action, expressed in some manner at a meeting of its 
 members,'' The truth is, that though in its decay, the Roman 
 
 ' The civil law, in the shape in wliicli tiona aggreojate at the common law ; 
 
 we have it, was instituted amongst a yet, we find that not only did they 
 
 ])eople more literate than that which appoint officers, capable of contracting 
 
 gave origin to the common law. From without seal, but themselves con- 
 
 the nature of the corporations and traded directly by vote, without the 
 
 communities existing under it, the intervention of any officers whatever, 
 
 same incapability, literally speaking, Aylitfe's Civ. L., B. 2, tit. 35, p. 118, 
 of personal act or of oral discourse, ^ See 1 Redf. on Kail., § 143. 
 wag attached to them as to corpora-
 
 400 Private Cokpokations. 
 
 empire was won back to ignorance by barbarous invaders;^ in 
 its better days, neither individuals nor corporations existing within 
 it were in general compelled to use seals by way of signature 
 from an ignorance of the art of writing, A common seal was 
 not, therefore, necessary to a corporation at the civil law to enable 
 it to make a written contract, and accordingly Wood tells us of 
 such a corporation, that ' it may have a common chest, and some- 
 times a common seal.' " * 
 
 Sec. 251. Corporate seal ; present doctrine in reference to. — it was 
 
 essential at common law, as we have seen, that the seal not only 
 of private persons, but of corporations, should be impressed upon 
 wax, wafer or other impressible and tenacious substance; but 
 this doctrine has been in modern times much relaxed. For in- 
 stance, it has been recently held that it was sufficient to impress 
 either private or corporate seals directly upon the paper or parch- 
 ment • upon which the instrument is written, and this mode of 
 impressing seals has in some of the states been authorized by 
 statutory provisions.' And, on general principles, any mode of 
 impression which would answer for private seals, in the absence 
 of other statutory regulations, would be good in case of corporate 
 seals. 
 
 The early doctrine required all important contracts and the ap- 
 pointment of agents of the corporation to be made in writing 
 under the corporate seal." But the tendency of the decisions of 
 our courts is to allow the same latitude in this respect as with 
 respect to the seals of private persons, and in all the more common 
 
 'Wood's Civ. L., chap. 2, p. 136; persons, can regularly do no act with- 
 
 Browne'a Civ. L. b. 1, 104. out writing ; therefore, gifts by them 
 
 * Wood's Civ. L., chap. 2, p. 136 ; must be by deed. 2 Bac. Abr. (Am. 
 
 Browne's Civ. L., B. 1, 104. ed ) tit. Corp. E. 3, p. 452. So it was 
 
 ^Corrigan V. Trenton, etc., Co., 5 Eng. formerly held that such a corporation 
 
 Eq 52 ; 4 Kent's Com. 445 ; 1 Dill, on could not, without a deed, command a 
 
 Mun. Corp., § 130; Woodman v. York, bailiff to enter into lands of a lessee 
 
 etc., R. Co., 50 Me. 549 ; Haven v. for years, for a condition broken. 1 
 
 Grand Junction R. Co., 12 Allen, 337. Roll. Abr. 514-699; Cro. Eliz. 815; 
 
 See, also, argument in this case, 1 Am. Cro. Jac. 411. Neither could they 
 
 L. Re\ . 638; Hendee v. Pinkerton, 14 without a deed properly sealed with 
 
 Allen, 381 ; Royal Bank of Liverpool the corporate seal appoint one to seize 
 
 V. Grand Junction R., 100 Mass. 444 ; goods as forfeited to the use of the 
 
 In re Sandilands, L. R., 6 C. P. 411. corporation. 2 Bac. Abr. (Am. ed.; 
 
 ■* Aggregate corporations, consisting 453. See, also, 2 Bac. Abr. (Am. ed.), 
 
 of a constant succession of various tit. Corp. E. 3, p. 453.
 
 The Corporate Seal. 
 
 401 
 
 transactions of tlie corporation it may act and contract by the will 
 of the body, as expressed by a vote of the majority or by a major- 
 ity of those that represent the body, as by the directors, and that 
 the corporate will as thus expressed may be executed by the ])roper 
 agents of the corporation, even without an appointment under the 
 common seal. And it is now well settled, that acts of a corpora- 
 tion evidenced by a vote are as binding upon it and are as com- 
 plete authority to its agents in the execution of the will of the 
 corporation, thus expressed, as if such will and authority was 
 authenticated by the corporate seal ; that it may be as well bound 
 by the acts of its agents thus authorized as by the corporate seal, 
 and that promises may as well be implied from its acts and the 
 lawful acts of its agents as if the principal was a natural person.^ 
 And the corporate will is now seldom expressed or authenticated by 
 the corporate seal, except in those cases where, under similar cir- 
 cumstances, it would be necessary to execute the instrument with 
 a seal if a natural person was the party executing it.^ 
 
 ' Board of Education v. Greenebaum, 
 39 111. 609 ; Ross v. Madison, 1 Ind. 
 381; Merrick v.Burliugton, 11 Iowa, 74 ; 
 Petrie v. Wright, 14 Miss. 647 ; Buck- 
 ley V. Briggs, 30 Mo. 453. 
 
 ^ Kyd on Corp. 3G3 ; Harper v. Char- 
 lesworth, 4 B. & C. 575; Union Bank 
 V. Ridgelv, 1 H. & G. 419 ; Bank of U. 
 S. V. Daudridge, 13 Wheat. 105; Wood 
 V. Tate, 5 B. & P. 347 ; Dillon on Mun. 
 Corp., § 133. 
 
 Mr, Kent observes; "It was the 
 ancient and technical rule of tlie com- 
 mon law that a corporation could not 
 manifest its intentions by any personal 
 act or discourse, and that it spoke and 
 acted only by its common seal. After- 
 ward the rule was relaxed, and, for 
 the sake of convenience, corporations 
 were permitted to act, in ordinary mat- 
 ters, without deed, as to retain a cook, 
 or a servant, or butler. ■* * * In 
 Eex v. Bibb, P. Wms. 419, the old 
 rule was further relaxed, and it seems 
 to have been established, that though 
 a corporation could not contract di- 
 rectly except under their corporate 
 seal, yet they might by mere vote or 
 corporate act, not under their corporate 
 seal, appoint an agent whose acts and 
 contracts, within the limits of his 
 authority, would be binding on the 
 
 51 
 
 corporation. In a case as late as 1783, 
 it was held, that the agreement of the 
 major part of a corporation, entered in 
 the corporation books, though not un- 
 der the corporate seal, should be de- 
 creed in equity. Maxwell v. Dulwich 
 College, 1 Fonb. Tr. 396 note. But 
 see, in Carter v. Dean of Ely, 7 Sim- 
 ons, 311, where it was held that the 
 agreement of the major part of a cor- 
 poration, entered in the corporation 
 books, though not under the corporate 
 seal, would be decreed in equity. In 
 Yarborough v. The Bank of England, 
 16 East, 6, it was admitted that the 
 corporation might be bound by the 
 acts of their servants, though not au- 
 thorized under their seal, if done 
 within the scope of their employment. 
 At last, after a full review of all the 
 authorities, the old technical rule was 
 condemned in this country, as impoli- 
 tic and essentially discarded, for it 
 was decided by the supreme court of 
 the United States, in the case of The 
 Bank of Columbia v. Patterson, 7 
 Crauch, 299, that whenever a corpora- 
 tion aggregate was acting within the 
 range of the legitimate purposes of 
 its institution, all parol contracts 
 made by its authorized agents were 
 express and binding promises of the
 
 402 Pkivate Coepokations. 
 
 Seo. 252. Rule as to use of seaL — Wherever the law requires a 
 natural person to attach a seal to the instrument executed by him, 
 in like cases only, would it be necessary for a corporation to exe- 
 cute a like instrument by a corporate seal. If in the former case 
 the instrument must be by deed, that is, executed or authenticated 
 by a seal, so, in the latter case, should it also be executed or au- 
 thenticated by the common seal of the corporation. 
 
 Sec. 253. Seal makes instriunent a specialty, when. — The execu- 
 tion of the corporate deed must, of course, he by an agent. 
 The 'corporation being but an incorporeal or ideal person, 
 it could not be supposed cajDable, as such, of performing a 
 physical act, but must in such matters act by its duly consti- 
 tuted agents in the corporate name, and, when so required, must 
 authenticate . the same by the common seal, the usual form of 
 authentication being : " In testimony whereof the common seal of 
 the corporation is hereby affixed," the name of the corporation 
 being signed by the agent, with his name as such agent, and the 
 common seal of the corporation attached or affixed thereto. 
 
 The common seal of a cor23oration affixed to an instrument pur- 
 porting to be executed by the proper agent, makes it a specialty 
 where such an instrument is required, and has the same eflEect as 
 if executed in a like case by a natural person.' 
 
 In the case of The City of Davenjjort v. The Peoria Marine 
 
 corporation, and all duties imposed form of contract is requisite to bind 
 upon them by law, and all benefits the company, unless where the charter 
 conferred at their request, raised im- expressly requires it. And although 
 plied promises, for the enforcement of there seems to be a failing effort in 
 which an action lay." 2 Kent's Com. the English courts to maintain the 
 288. necessity of the contracts of corpora- 
 Mr. Kent lurther observes: " The tions being under seal, it is certain 
 adjudged cases in England and in that the important business transac- 
 Massachusetts were considered as tions of daily occurrence, in both that 
 fully supporting this reasonable doc- country and here, where no such for- 
 trine, and that the technical rule that mality is resorted to by business cor- 
 a corporation could not make a promise porations, in matters of contract, and 
 except under seal would be productive where to look for any such solemnity 
 of great mischief. As soon as it was would be little less than absurd, al- 
 established that the regularly ap- most of necessity drive the courts of 
 pointed agent of the corporation could England to disregard the old rule of 
 contract in their name without seal, it requiring the contracts of corporations 
 was impossible to support the other to be made under the corporate seal." 
 position." 2 Kent's Com. 288 et seq. 1 Redf. on Railw. 409. 
 Mr. Redfield says : " No particular 
 
 •Clark V. Farmers', etc., Co.. 15 Benoist v. Carondelet, 8 Mo. 250; Stur- 
 Wend. 256; Steele v. Oswego, id. 265; tevants v. Alton, 3 McLean, 350.
 
 The Corporate Seal. 403» 
 
 and Fire Insurance Company^ the supreme court of Iowa, by 
 Cole, J., say : " The English rule that a corporation cannot ex- 
 pressly bind itself except by deed, unless the act establishing it 
 authorizing it to contract in another mode has been broken in 
 upon, and indeed entirely overturned, as a general proposition, 
 throughout the United States ; and it is here well settled that the 
 acts of a corporation, evidenced by vote, written or unwritten, 
 are as completely binding upon it, and are as complete authority 
 to its agents as the most solemn acts done under the corporate 
 seal ; that it may as well be bound by exj^ress promises through 
 its authorized agents as by deed ; and that promises may as well 
 be implied from the acts of its agents as if it had been an indi- 
 vidual." ' 
 
 And in England it has also been recently held that contracts 
 executed in pursuance of an oral agreement by a party with a cor- 
 poration, to do work or furnish supplies that are required in the 
 accomplishment of the purposes and objects of the corporation, 
 the party thus performing will be entitled to recover therefor, 
 either upon the common counts or the special contract. Wight- 
 man, J., observed : " I am disposed to think that wherever the 
 purposes for which a corporation is created render it necessary 
 that the work should be done, or goods supplied to carry such pur- 
 poses into effect, as in case of the guardians of a poor-law union, 
 and orders are given at a board regularly constituted, and having 
 general authority to make contracts for works or goods necessary 
 for the purposes for which the corporation was created, and the 
 work is done, or goods supplied and accejDted by the corporation, 
 and the whole consideration for payment executed, the corporation 
 cannot keep the goods or the benefit, and refuse to pay, on the 
 
 ' 17 Iowa, 276. See, also, Bank of Co- 10 Mass. 401 ; White r. The Westport 
 
 lumbia v. Patterson's Administrators, Cotton Man. Co., 1 Pick. 215; Bulkley 
 
 7 Cranch, 305; Fleckner v. The United v. The Derby Fishing Co., 2 Conn. 256; 
 
 States Bank. 8 Wheat. 357; The Bank Garvey v. Colcock.l N. & McC. 221; Pe- 
 
 of the United States v. Dandridge, 12 trie v. Wright, 6 S. & M. 647; Baptist 
 
 id. 68; Dunn v. The Rector of St. An- Church v. Mulford, 8 N. J. L. 182 ; Ab- 
 
 drew's Church, 14 Johns. 118 ; The bott v. Hermon, 7 Me. 118 ; Walker 
 
 American Insurance Co. v. Oakley, 9 v. Bank of Kentucky, 3 J. J. Marsh. 
 
 Paige, 496 ; Overseers, etc., v. Over- 201 ; Lee v. The Trustees, etc., 7 Dana, 
 
 seer, 3 S. &R. 117; Hamilton V. Lycom- 28; Eastman v. Coos Bank, i N. H. 
 
 ing Ins. Co., 5 Barr. 344 ; Legrand v. 26 ; Sheldon v. Fairfax, 21 Vt. 102 ; 
 
 Hampden Sidney College, 5 Munf. 824; Palmer v. Medina Ins. Co., 20 Ohio, 
 
 Union Bank v. Ridgely, 1 H. & G. 413; 537. 
 Hayden v. Middlesex Turnpike Corp.,
 
 404 Private Coepoeations. 
 
 ground that though the members of the corporation who ordered 
 the goods or the work were competent to make a contract and 
 bind the rest, the formality of a deed or of affixing the seal was 
 wanting, and then say : no action lies ; we are not competent to 
 make a parol contract, and we avail ourselves of our disability." ^ 
 But in England it has also been held that where work was done 
 or materials furnished by virtue of a contract not under seal, 
 which were not necessary nor incidental to the purposes for 
 which the corporation was created, no recovery thereon could be 
 had.^ 
 
 § 254. What is a common seal. — The Common seal of a corpora- 
 tion is the instrument or stamp adopted by it for the ^^urpose 
 of stamping or making an impression upon wax or wafer, or other 
 impressible substance annexed to instruments made by it, or upon 
 the paper or parchment upon which such instruments are written. 
 The impression thus made is also, in one sense, the corporate seal. 
 
 Like a private seal, it was formerly required that the impression 
 be made upon wax, wafer, or other impressible and tenacious sub- 
 stance attached to the paper or parchment upon which the instru- 
 ment was written."* But according to the current of modern au- 
 thorities, even in the absence of statutory regulations, the impres- 
 sion of the seal, when required at all, may be made directly upon 
 tlie paper or j^archment.* 
 
 § 255. Form of, not material. — It is ev'ident that the seal, either pri- 
 vate or corporate, has ceased to serve its original purpose as a sub- 
 stitute for a signature, and as an authentication of a corporate or 
 other instrument it possesses but little intrinsic value. The form 
 
 ' Clark V. Cuckfield Union, 21 L. J. ^ See Paine v. Guardians', etc., 
 
 Q. B. 349. See, also, Sanders v. Union, 8 Q. B. 326 ; 15 L. J. M. C. 89: 
 
 Guardians of St. Neat's Union, 8 Q. B. Lamprell v. Billericay Union, 3 Ex- 
 
 810, which was an oral order for iron ; 283 ; 18 L. J. Ex. 283 ; Homersham v. 
 
 De Grave v. Mayor, etc., 4 C. P. Ill, Wolverhampton, etc., Co., 6 Ex. 137 ; 
 
 which was for weights and measures 20 L. J. Ex. 193. 
 
 sent at the request of the defendant, ^ Bank of Rochester v. Gray, 2 Hill, 
 
 and accepted bv them ; Beverly v. Lin- 228; Farmers' Bank v. Haight, 3 id. 
 
 coin, etc., Co., 6 A. & E. 829, which was 493. 
 
 an action for gas meters supplied to ■* Hendee v. Pinkerton, 14 Allen, 381 ; 
 
 the defendants ; Nicholson v. Brad- Corrigan v. Trenton, etc., Co., 6 N. J. 
 
 ford Union, L. R., 1 Q. B. 620, which L. 53 ; Reg. v. St. Paul, etc., 7 Q. B. 
 
 was an action for coals supplied by 231 ; Davidson v. Cooper, 11 M. & W. 
 
 a contract not under seal. 778 : S. C, 13 id. 342.
 
 The Coepokate Seal. 405 
 
 of the instrument with which the impression is made, or the en- 
 graving or device on the seal, if any, would seem to be immaterial. 
 In fiict, where a seal is required, any thing which may be accepted 
 or adopted by a corporation with which to iin2)ress wax, wafer, or 
 even the paper itself, would seem to be sufficient. 
 
 Where a seal or some impression is required on wax, wafer, or 
 paper, it would appear quite immaterial as to the instrument used 
 to make the impression, provided it is something adopted by the 
 corporation or by the authorized agent, and is placed upon the 
 instrument by the proper agent, or even by his direction or au- 
 thority. Thus, it has been held that the corporate seal miglit be 
 stamped or printed by the printer of the blank instruments of a 
 corporation if done by the direction of the proper officers, and 
 that the seal thus made and placed upon the paper on which an 
 instrument was executed would be valid as a corporate seal.' 
 
 On this question the Supreme Court of Massachusetts say : 
 " The corporate seal having been affixed by the printer by direc- 
 tion of the officers of the corporation, and they having adopted 
 his act and subsequently signed and issued the bond, the sealing 
 was duly made, and the instruments became obligatory upon the 
 corporation. This is no more nor less than constantly takes place 
 when a scrivener prepares and affixes a seal to a deed, which the 
 grantor thereupon signs and delivers. The practice is of unques- 
 tionable validity, and the authorities for it are abundant. If a 
 stranger seal an instrument by the allowance or commandment, 
 precedent, or agreement subsequent, of the person who is to seal 
 it, that is sufficient.' ' '^ 
 
 ' Royal Bank, etc., v. Gr. Junction, It is not necessary for an agent in 
 
 etc., R. Co., 100 Mags. 444 ; Woodman executing a deed in behalf of a cor- 
 
 V. York, etc., R. Co., 50 Me. 549 ; Hen- poration, to use the corporate seal, 
 
 dee V. Pinkerton, 14 Allen, 381. Porter v Androscoggin, etc., R. Co., 
 
 It may be done with some perma- 37 Me 349. See, also, Clark v. Pratt, 
 nent instrument prepared for that pur- 47 id. 55 ; Reynolds v. Glasgow 
 pose, or it may be done by some tern- Academy, 6 Dana, 37. It has been 
 porary one, authorized or adopted by observed: "At common law, the cor- 
 the corporation. Bank of Middlebury porate seal cannot be impressed di- 
 V. R. & W. R. Co., 30 Vt. 159; Tenny rectly upon the paper, but must be 
 V. Lumber Co., 43 N. H- 343; Mill upon wax or wafer, or some other ten- 
 Dam Foundry v. Hovey, 21 Pick. 417 ; acious substance, or the instrument to 
 Porter v. Railroad, 37 Me. 349. which it is attached will not operate 
 
 ^ Royal Bank, etc., v. Grand Junction, as a sealed instrument, 
 etc. , R. Co., 100 Mass. 444 ; Bates v. In a recent case in New Jersey, how- 
 Boston, etc., R. Co., 10 Allen, 251. ever, a distinctive impression of the
 
 406 Private Cokpokations. 
 
 But the usual instrument with which the impression is made 
 is one prepared expressly for the purpose, and on which is 
 engraved the name of the corporation with the words " corporate 
 sfeal," or " seal." And it has been held that an instrument exe- 
 cuted by the proper agent or officer of the corporation and sealed, 
 'though by the im]3ression of the common desk seal of a merchant, 
 it will be presumed to be the seal of the corporation until rebut- 
 ted by competent evidence/ 
 
 § 256. By whom the seal should be affixed. — As all physical acts 
 of corporations must be done by agents duly appointed for that 
 purpose, it follows that the corporate seal must be affixed by an 
 agent duly authorized for that purpose. Such agent may be desig- 
 nated in the law creating or constituting the corporation ; but it is 
 usually annexed by an officer, duly authorized by the by-laws, or 
 by the president, by virtue of the implied authority conferred 
 upon him as such officer. 
 
 But it is evident that the majority of the members of a cor- 
 poration might direct and authorize any j^erson to not only exe- 
 cute an instrument for the corporation, but to affix the corporate 
 seal ; and this authority could be conferred by them or by the 
 fundamental law, as by the statute of its creation, or by the arti- 
 cles of association constituting the association, upon a limited 
 number of the corporators as a board of directors, who, in that 
 
 paper without the intervention of was acts of their legislatures. Though we 
 
 or wafer was held to be a lawful cor- know of no decision upon the subject, 
 
 porate seal. In the southern and west- yet we see no reason, unless the act 
 
 ern parts of the United States, from of incorporation expressly provides 
 
 Xew Jersey inclusive, a flourish of what the common seal shall be, why 
 
 the pen at the end of a name or a cir- the substitute allowed for the private 
 
 cle of ink or scroll has been allowed seals of an individual should not be 
 
 to be a valid substitute for a seal ; and allowed for the seal of a corporation." 
 in the states of Delaware, Illinois, For an interesting article on this 
 
 Missouri and Tennessee this substitute subject, see 1 Am. Law Rev. 649. 
 has, we believe, been introduced by 
 
 ' Moisea v. Thornton, 8 T. R. 303 ; To an indenture between a corpora- 
 
 Peake's Law of Ev. 48; Jackson v. tion and an individual the parties "set 
 
 Pratt, 10 Johns. 381 ; Mann v. Pentz, their hands," but there was no refer- 
 
 2 Saudf. Ch. 271 ; Foster v. Shaw, 7 ence to a seal. To the instrument, 
 
 S. & R. 156 ; Den v. Vreelaudt, 17 N. however, were attached seals consist- 
 
 J. L. 252; Darnell V. Dickens, 4 Yerg. ing of small bits of paper fastened 
 
 7; City Council, etc., V. Moorehead, 2 with wafers without any impression. 
 
 Rich. 450. See, also. Bank of Mid- Held to oe sufficient. Mill Dam Foun- 
 
 dlebury v. Rutland R. Co., 30 Vt. 159. dry v. Hovey, 21 Pick. 417.
 
 The Corporate Seal. 407 
 
 case, could duly authorize and appoint some officer or agent to 
 execute a contract on behalf of the corporation, and affix the 
 common seal thereto.' 
 
 The seal of a corporation affixed to an instrument, like the seal 
 of a natural person, makes it a specialty." 
 
 Sec. 257. Where an acknowledgment is required. — It is generally 
 
 necessary, not only to have certain instruments, especially deeds 
 and other writings relating to lands, executed by a corporation 
 through its duly constituted agent, and the corporate seal annexed 
 or impressed upon the parchment or paper upon which the instru- 
 ment or conveyance is written, but for the pui-j^oses of recording 
 to have the same acknowledged before a proper officer. Where 
 this is required, the proper officer or agent executing the instru- 
 ment may, generally, make the acknowledgment required by the 
 recording laws.^ 
 
 Sec. 258. Doctrine in relation to agents. — We have considered 
 the subject of corporate agents, generally ; but in this connection 
 we will observe that the recognized principle that the agent of a 
 natural person, in order to bind his principal by deed, must have 
 an authority so to do by deed, that is, by an instrument duly 
 executed under seal, has no application to the agents of corpora- 
 tions.* 
 
 'Jackson V. Campbell, 5 Wend. 572; sists of several, who all sign their 
 
 Damon v. Granby, 3 Pick. 345 ; Derby names, only one seal is necessary. 
 
 Canal Co. v.Wilmot, 9 East, 360 ; Bank Decker v. Freeman, 3 Me. 338. See, 
 
 of the U. S. V. Dandridge, 13 Wheat, also, Burrill v. Nahant Bank, 2 Mete 
 
 68,113; Burks & D. Turn. Bead v. 167. 
 
 Myers, 6 S. & R. 13 ; Clarke v. The The corporate seal affixed to an in- 
 Imperial Gas Co., 4 B. & A. 315 ; 1 N. strument does not render it a corpo- 
 & M. 306; Leggett v. New Jersey rate act, unless it is affixed by a duly 
 Banking Co., IN. J. Eq. 541; Clark authorized otBcer or other agent. Jack- 
 V. Woolen Manuf. Co., 15 Wend. 256. son v. Campbell, 5 Wend. 573. 
 See, also. Bank of Ireland v. Evans, But the seal is prima facie evidence 
 5 H. of L. Cas. 889 ; 33 Eng. L. & Eq. that it was so affixed. Lovett v. Steam 
 23. Saw Mill Association, 6 Paige's Ch. 
 
 2 Clark V. The Woolen Manuf. Co., 54. 
 
 15 Wend. -256; Benoist v. Carondelet, ^ Gordon v. Preston, 1 Watts (Penn.), 
 
 8 Mo. 250 ; City of Davenport v. The 385 ; Lovett v. The Steam Saw Mill 
 
 Peoria, etc., Ins. Co., 17 Iowa, 276; Ring Association, 6 Paige's Ch. 60. 
 
 V. Johnson Co., 6 id. 265 ; Dill, on ''Hopkins v. Gallatin Tump. Co., 4 
 
 Mun. Corp., i^ 133. Humph. 403; Beckwith v. Windsor 
 
 A vote authorizing a committee to Manuf. Co., 14 Conn. 594; Howe v. 
 
 sell lands empowers them to make the Keeler, 37 Conn. 538; Burr v. Mc- 
 
 necessary deeds in the name of the Donald, 3 Gratt. 315 ; Redf. on Rail., 
 
 corporation, and if the committee con- §§ 113, 143.
 
 408 Private Coepokations. 
 
 " The technical doctrine that a corporation could not contract, 
 except under its seal, or, in other words, could not make a promise, 
 if it ever had been fully settled, must have been productive of great 
 mischiefs. Indeed, as soon as the doctrine was established that 
 its regularly appointed agents could not contract in their name 
 without seal, it was impossible to support it ; for otherwise the 
 party who trusted such contract would be without remedy against 
 the corporation. Accordingly, it would seem to be a sound rule 
 of law, that whenever the corporation is acting within the scope 
 of the legitimate purposes of its institution, all parol contracts 
 made by its authorized agents are express promises of the corpo- 
 ration ; and all duties imposed on them by law, and all benefits 
 conferred at their request, raise implied promises for the enforce- 
 ment of which an action will lie."^ 
 
 And in the case of The United States Bank v. Dandridge^ 
 Mr, Justice Stoky, in delivering the majority opinion of the 
 supreme court of the United States, observes : " In ancient times, 
 it was held that corporations aggregate could do nothing but by 
 deed under their common seal. But this principle must always 
 have been understood with many qualifications, and seems inap- 
 plicable to acts and votes passed by such corporations at corporate 
 meetings. It was probably, in its origin, applied to aggregate 
 corporations at the common law, and limited to such solemn pro- 
 ceedings as were usually evidenced under seal, and to be done by 
 those persons who had the custody of the common seal, and had 
 authority to bind the corporation thereby as their permanent 
 ofiicial agent. Be this as it may, the rule has been broken in 
 upon in a vast variety of cases in modern times, and cannot now 
 as a general proposition be supported. And it is now firmly 
 established, both in England and America, that a corporation may 
 be bound by a promise, express or implied, resulting from the acts 
 of a corporate vote unaccompanied with the corporate seal," ^ 
 
 ' Bank of Columbia v. Patterson, 7 being speak or act otherwise than in 
 
 Cranch, 299. See, also, Gray v. Port- writing? Being destitute of the natu- 
 
 land Bank, 3 Mass. 364 ; Gilmore v. ral organs of man, being distinct from 
 
 Pope, 5 id. 491 ; Bank of Metropolis v. all its members, can it communicate 
 
 Guttschlick, 14 Pet. 19. its resolutions or declare its will, with- 
 
 '^ 12 Wheat. 64. out the aid of some adequate substi- 
 
 3 But in this case, Marshall, in his tute for those organs ? If the answer 
 
 dissenting opinion, says ; '• Can such a to this question must be in the nega-
 
 The Corporate Seal. 
 
 409 
 
 Sec. 259. Same continued. — Whatever may have been the 
 doctrine of the common law, it is now evident that the acts of the 
 directors of a corporate body, evidenced by a recorded vote, are 
 as bindiu<^ upon the corporation, and as complete autliority to 
 agents, as if such will was expressed in writing, authenticated by 
 the common seal.* 
 
 tive, what is that substitute ? I can 
 imagine no other than writing. The 
 will to be announced is the aggregate 
 will. The voice which utters it is the 
 aggregate voice. Human organs be- 
 long only to individuals. The words 
 they utter are the words of individ- 
 uals. These individuals must speak 
 collectively to speak corporately, and 
 must use a collective voice. They 
 have no collective voice and must 
 communicate this collective will in 
 some other mode. That other mode, 
 as it seems to me. must be in writing. 
 A corporation will generally act by its 
 agents, but those agents have no self- 
 existing power. It must be created by 
 law, or communicated by the body 
 itself. This can be done only by 
 writing. If, then, corporations were 
 novelties, and all were required to de- 
 vise the means by which they should 
 transact their affairs, or communicate 
 their will, we should, I think, from a 
 consideration of their nature, of their 
 capacities and disabilities, be com- 
 pelled to say, that when other means 
 were not provided by statute, such 
 will must be expressed in writing. 
 * * * According to the decisions 
 of the courts of England, as well as of 
 this court, a corporation, unless it be 
 in matters to which the maxim de min- 
 imis non curat lex applies, can act or 
 speak, and of course contract, only by 
 writing. This principle, which seems 
 to be an essential ingredient of its very 
 being, has been maintained by all the 
 judges who have ever discussed the 
 subject. Upon this principle, and the 
 authority of these cases, I have sup- 
 posed that a corporation cannot assent 
 
 ' Bank of U. S. v. Dandridge, 13 
 Wheat. 64. 
 
 The weight of authority in this coun- 
 try seems to be in favor of the position 
 that private corporations, or the boards 
 of directors as agents for, and lawfully 
 representing them, and through which 
 
 52 
 
 to a deed of any description unless 
 this assent be exi)ressed regularly in 
 writing. It ought to be entered on 
 the books of the corporation.'' 
 
 In Mayor of Ludlow v. Charlton, 6 M. 
 & W. 815, RoLFE, B., says . " The seal 
 is required as authenticating the con- 
 currence of the whole body corporate. 
 If the legislature, in creating a body 
 corporate, invest any member of it , 
 either expressly or impliedly, with 
 authority to bind the whole body by 
 his mere signature, or otherwise, then, 
 undoubtedly, the adding of the corpo- 
 rate seal would be matter purely of 
 form and not of substance. Every one 
 becoming a member of such a corpo- 
 ration knows that he is liable to be 
 bound in his corporate character by 
 such an act, and persons dealing with 
 the corporation know that by such an 
 act the body will be bound. But in 
 other cases the seal is the only authen- 
 tic evidence of what the corporation has 
 done or agreed to do. The resolution 
 of a meeting, however numerously at- 
 tended, is, after all, not the act of the 
 whole body. Every member knows 
 he is bound by what is done by the 
 corporate seal, and by nothing else. 
 It is a great mistake, therefore, to 
 speak of the necessity of a seal as a 
 relic of ignorant times. It is no such 
 thing. Either a seal, or some substi- 
 tute for a seal, which by law shall be 
 taken as conclusively evidencing the 
 sense of the whole body corporate, is 
 a necessity inherent to the very nature 
 of a corporation." See, also, Kidder- 
 minster V. Hard wick, L. R. , 9 Exch. 
 29. 
 
 the business of the corporation is 
 transacted, may appoint an agent for 
 the conveyance of even real estate by 
 vote, without an instrument under 
 the corporate seal. And that if the 
 formality of a sealed instrument was 
 required, it would not affect the au-
 
 410 
 
 Pkivate Cokporations. 
 
 And a valid appointment of an agent for any purpose may be 
 made without annexing to the authority or power of attorney a 
 common seal.^ 
 
 And the corporate will evinced by a vote recorded or unrecorded 
 is, generally, as completely binding upon it, and confers as com- 
 plete authority upon its agents as if authority was given under its 
 corporate seal/ 
 
 Sec. 260. The seal as evidence. — It is said that the common seal 
 of a corporation is not evidence of its own authenticity, but must 
 be proved if controverted.^ But this fact need not be shown by 
 the agent who did it, or other person who saw it done.^ It may be 
 shown by any one acquainted with the seal or the motto, or device 
 engraved thereon.* If the seal is affixed to an instrument by a 
 proper officer, this would he prima faoie^ but not conclusive evi- 
 dence of the corporate assent to the instrument.* The affixing of 
 the seal by a proper officer, as by the president, would, at least. 
 
 thenticity of the conveyance, if the 
 individual who acts as agent and af- 
 fixes the seal derives his authority 
 
 from a mere vote of the corporation. 
 Dispatch Line, etc., v. Bellamy Man. 
 Co., 12 N. H. 305. 
 
 * Bank of Alexandria v. Bank of Co- 
 lumbia, 5 Wheat. 326; O wings v. 
 Speed, id. 420 ; Osborn v. Bank of U. 
 S., 9 id. 738 ; Bank of Columbia v. Pat- 
 terson, 7 Cranch,299 ; Warren v. Ocean 
 Ins. Co., 16 Me. 439 ; Methodist Chapel 
 V. Herrick, 25 id. 354 ; Badger v. Bank 
 of Cumberland, 27 id. 428 ; Trundy v. 
 Farrar, 32 id. 225 ; Haven v. New 
 Hampshire Asylum, 13 N. H. 532 ; 
 Goodwin v. Union Screw Co. , 34 id. 
 378 ; Andover Turnpike Co. v. Hay, 7 
 Mass. 102 ; Thayer v. Middlesex Ins. 
 Co., 10 Pick. 326 ; Topping v. Bickford, 
 4 Allen, 120 ; Stamford v. Benedict, 15 
 Conn. 445 ; Dunn v. St. Andrew's 
 Church, 14 Johns. 118; Powell v. New- 
 burgh, 19 id. 284; Randall v. Van 
 Vechten, id. 60 ; Clark v. Benton Man. 
 Co., 15 Wend. 256 ; Baptist Church v. 
 Mulford, 3 Halst. 182 ; Wolf v. Qod- 
 dard, 9 Watts, 544 ; Elysville Manuf . 
 Co v. Okiso Co., 1 Md. Ch. 392 ; Union 
 Bank, etc., v. Ridgely, 1 H. & G. 424; 
 Kennedy v. Baltimore Ins. Co., 3 H. 
 & J. 367 ; Northern Central R. Co. v. 
 Bastian, 15 Md. 494; Bates v. Bank, 
 etc., 2 Ala. 461 ; St. Andrew's Bay 
 Land Co. v. Mitchell, 4 Fla, 192; 
 
 Lathrop v. Com. Bank, 8 Dana, 114 ; 
 Richardson v. St. Johns Ins. Co., 5 
 Blackf. 146 ; Legrand v. Hampden 
 Sidney Coll., 5 Munf. 324 ; Garrison v. 
 Coombs, 7 J. J. Marsh. 85 ; City of 
 Detroit v. Jackson, 1 Doug. 106. 
 
 2 Bank of U. S. v. Dandridge, 12 
 Wheat. 68; New York R. Co. v. New 
 York, 1 Hilt. 567 ; Merrick v. Burling- 
 ton, etc., R. Co., 11 Iowa, 75 ; Buckley v. 
 Briggs, 30 Mo. 452 ; Fleckner v. U, S. 
 Bank, 8 Wheat. 357 ; American Ins. 
 Co. V. Oakley, 9 Paige's Ch. 496. 
 
 3 Jackson v. Pratt, 10 Johns. 281 ; 
 Den V. Vreelaudt, 7 N J. L. 352 ; Fos- 
 ter V. Shaw, 7 S. & R. 163 ; Leazure v. 
 Hillegas, id. 318 ; Crossman v. Hill- 
 town, etc., Co., 3 Grant's Cas. 225 ; 
 Mann v. Pentz, 2 Sandf. Ch. 271 ; Far- 
 mers' Turnpike Co. v. McCuUough, 25 
 Penn. St. 203. 
 
 4 Foster v. Shaw, 7 S. & R. 163 : Dar- 
 nell V. Dickens, 4 Yerg. 7 ; Moises v. 
 Thornton, 8 T. R. 304. 
 
 ^ City Council v. Moorehead, 2 Rich. 
 430 ; Moises v. Thornton, 8 T. R. 304. 
 
 ^ Leggett V. New Jersey Manuf. Co., 
 1 N. J. Eq. 541 ; Reed v. Bradley, 17 
 111. 321.
 
 The Corporate Seal. 411 
 
 iwTm^jfyrima facie evidence of authority to so use it ; ' and the use 
 of the seal by such an oflScer, purporting to be the common seal, 
 would, at least, be presumptive evidence that it was the corporate 
 seal.^ 
 
 In a recent case where the concluding part of a deed was in the 
 following language : "In witness whereof the said B. 0. S. Bank 
 by J. S., thei7' treasurer, duly authorized for this purpose, have 
 hereunto set their name and seal," and signed "J. S., treasurer 
 B — C — S — Bank," and sealed, it was held to be the deed of 
 the bank.^ 
 
 ' Hopkins v. Gallatin Turnpike Co., See, also, Haven v. Adams, 4 Allen, 80 ; 
 
 4 Humph. 403. Sherman v. Fitch, 98 Mass. 59 ; Eureka 
 
 2 Mill Dam Foundry v. Hovey, 21 Co. v. Bailey Co., 11 Wall. 488 ; Ten- 
 Pick. 428 ; Flint v. Clinton Co., 12 N. ney v. Lumber Co., 43 N. H. 343. But 
 H. 434. See, also, Miller v. Ewer, 27 for contrary opinion, Hatch v. Barr, 1 
 Me. 509; Josey v. Railroad Co., 13 Ohio, 390 ; Brinley v. Mann, 2 Cash. 
 Rich. 134; Bowen v, Irish Presb. Cong., 337. See, also, Bank of the Metropolis 
 6Bosw. 263. V Guttschlick, 14 Pet. 19. 
 
 3 Hutchins v. Byrnes, 9 Gray, 367.
 
 412 Private Coeporations. 
 
 CHAPTEK XI. 
 
 Sec. 261. General principlea relating to by-laws. 
 
 Sec. 203. Eequisites of, and construction relating to by-laws. 
 
 Sec. 263. By-laws must be reasonable and not oppressive, nor contrary to the 
 
 laws of the state. 
 Sec. 264. By-laws in restraint of trade . 
 Sec. 265. By-laws, when adopted by the corporate body. 
 Sec. 266. By-laws adopted by the directors . 
 Sec. 267. Distinction between by-laws adopted by the corporation and those 
 
 adopted by directors. 
 Sec. 268. By-laws contrary to the general laws of the land void. 
 Sec. 270. Matters that may be regulated by by-laws. 
 Sec. 272. How by-laws are made. 
 Sec. 273. Repeal of by-laws. 
 
 Sec. 274. Functions of by-laws — eflFect on third i^ersons. 
 Sec. 275. By-laws regulating the transfer of stock. 
 Sec. 277, 278. Providing for a corporate lien on stock. 
 Sec. 279. Notice conferred by the by-laws. 
 Sec. 280. By-laws cannot enlarge or abridge the rights of stockholders. 
 
 Sec. 261. General principles relating to by-laws. — Incident to and 
 inherent in eveiy corporation is the right to make by-laws, to 
 regulate the management of its affairs and to fulfill the purposes 
 of its institution,^ The constating instruments seldom, if ever, 
 provide in detail for the mode of executing the powers, express 
 or implied, conferred upon a corporation, but such matters are 
 left to be regulated by the corporation itself. In the absence of 
 provisions in the constating instruments relating to by-laws, the 
 power primarily vests in the corporate body.'^ But these instru- 
 ments, especially in private corporations for pecuniary profit, usu- 
 
 1 Dunston v. Imperial Gas Co., 3 B. v. Westwood, 7 Bing. 90 ; Norris v. 
 
 &Ad. 125 ; Everett v. Grapes, 3 L. State, Hob. 21 . 
 
 T. (N. S.)669; Case of Sutton Hospi- ^p^opje y. Throop, 12 Wend. 183 ; 
 
 tal,- 10 Coke, 23 ; Kearney v. Andrews, Child v. Hudson Bay Co., 2 P. Wms. 
 
 9N. J. Eq. 70; Martin v. Nashville 209; Salem Bank v. Gloucester Bank, 
 
 Building Assoc'n, 2 Caldw. 418 ; City 17 Mass. 29; Morton Gravel R. Co. v. 
 
 of London v. Vanacker, 12 Mad. 270 ; W^song, 51 Ind. 4 ; Martin v. Nash- 
 
 Newling v. Francis, 3 T. R. 189 ; Rex ville Build. Assoc, 2 Coldw. 332.
 
 By-Laws. 
 
 413 
 
 ally provide for and vest the power of making by-laws in the 
 board of directors.^ 
 
 Sec. 262. Requisites of, and constiuction cf law relating to by-laws. 
 — It is a universally recognized doctrine that by-laws, whether 
 made by the corporate body or a duly constituted and select body 
 of persons, must not be repugnant to the constating instruments 
 or the laws of the land," nor in excess of the powers specifically 
 conferred in this respect.^ If the constating instruments provide 
 for and enable the company, or the directors, to make by-laws for 
 particular and certain specified purposes, this, on the maxim 
 exj)ressio unius est exclusio alterhts, would undoubtedly exclude 
 the making of by-laws for other purposes.* This doctrine is 
 equally applicable to municipal as to private corporations. Saw- 
 TEK, J., observes in relation to this rule of construction as appli- 
 cable to the latter class as follows : " The power to make by-laws 
 when not expressly given is implied as an incident to the very 
 existence of a corporation ; but in case of an express grant of the 
 
 1 2 Kent's Com. 296 ; ExpaHe Will- 
 cocks, 7 Cow. 403 , Cahill v. Kalama- 
 zoo Ins. Co., 3 Mich. 124; Rex v. 
 Westwood, 7 Bing. 1. 
 
 - United States v. Hart, 1 Pet. 390 ; 
 Bank v. Lanier, 11 Wall. 369 ; Case 
 of Phil. Sav. Bank, 1 Whart. 461 ; 
 Butchers' Association, 35 Penn. St. 
 151 ; Kennebec R. Co. v. Kendall, 31 
 Me. 470 ; Jay Bridge Co. v. Woodman, 
 id. 573; People v. Tibbets, 4 Cow. 
 382; Auburn Academy v. Strong, Hopk. 
 Ch. 278; Philips v. Wickham, 1 Paige, 
 590 ; Seneca Bank v. Lamb, 26 Barb. 
 595 ; Davis v. Meeting House, 8 Mete. 
 321 ; Carr v. St. Louis, 9 Mo. 190 ; 
 State V. Conklin, 34 Wis. 21. Under 
 the act incorporating a charitable asy- 
 lum which authorized the trustees to 
 make all proper and reasonable rules 
 and regulations for the government of 
 the corporation not inconsistent with 
 the constitution and laws of the 
 United States and of the state of New 
 York, — held, that by-laws adopted by 
 the trustees forbidding the inmates to 
 leave the premises without permission 
 from the governor of the asylum, or 
 one of his assistants, or indulging in 
 contention, or boisterous and disor- 
 derly conversation at table, on pain of 
 
 expulsion, were reasonable, proper and 
 valid ; and that for a breach thereof, 
 by an inmate, the governor was au- 
 thorized to dismiss the offender from 
 the institution, by the direction of the 
 executive committee ; after giving him 
 reasonable notice of the examination 
 and an opportunity of being heard, of 
 exculpating himself, and of disproving 
 the charge. People v. Sailors' Snug 
 Harbor, 54 Barb. 532. 
 
 3 Free School v. Flint, 13 Mete. 539 ; 
 Bullard v. Bank, 18 Wall. 594; Bank 
 v. Lanier, 11 id. 369. But see Lock- 
 wood V. Merchants' Nat. Bank, 9 R. I. 
 308 ; Dubois v. Augusta, Dudley (Ga.) 
 30 ; Williams v. Augusta, 4 Ga. 509 ; 
 Adams v. Mayor, etc., 29 id. 56. 
 
 They cannot contravene the consti- 
 tution. People V. Crockett, 9 Cal. 112. 
 Nor the fundamental rules of common 
 law. People v. Tibbets, 4 Cow. 382; 
 Kennebec, etc., R. Co. v. Kendall, 31 
 Me. 470 ; Hayden v. Noyes, 5 Conn. 
 891 ; Adley v. Whitestable Co., 17 Ves. 
 315; Taylor V. Griswold, 2 N. J. Eq. 
 222 
 
 "*"child V. Hudson Bay Co., 2 P.Wms. 
 207; 2 Kyd on Corp. 102; Rex v. 
 Spencer, 3 Burr. 1837 ; Dill on Mun. 
 Corp., § 250; Redf. on Rail., i^26,par.3.
 
 414 
 
 Private Cokporations. 
 
 power to enact by-laws limited to certain specified cases and for 
 certain purposes, the corporate power of legislation is confined 
 to the objects specified, all others being excluded by implication." ' 
 
 Sec. 263. By-laws must be reasonable, and not oppressive, nor con- 
 trary to the laws of the state. — Whether the power to make by-laws 
 is expressly conferred or implied from the constating instruments, 
 such power is always subject to the restriction, that such by-laws 
 must be reasonable, not oppressive, nor contrary to public policy, 
 or the laws of the State. And this doctrine is applicable, not 
 only to private but to municipal corporations.^ So, by-laws must 
 be fair and impartial and not in restraint of trade.^ Thus, it has 
 been held that a by-law, restraining a person from exercising the 
 art of painting in the city of London, unless free of the company 
 of painters, is void.* So, it has been held, that a by-law of a 
 
 ' State V. Ferguson, 33 N. H. 424. 
 See, also, Heisembittle v. Charleston, 
 3 McMull. 233 ; Wadleij^h v. Oilman, 
 12 Me. 403 ; State v. Clark, 8 N. H. 
 176 ; State v. Freeman, 38 id. 426 ; 
 Commonwealth v. Turner, 1 Cush. 
 493 ; Collins v. Hatch, 18 Ohio, 523 ; 
 New Orleans v. Philippi, 9 La. Ann. 
 44 ; State v. Morristown, 33 N. J. L. 
 57. 
 
 2 Kip V. Paterson, 26 N. J. L. 298; 
 Commissioners v. Gas Co., 12 Penn. 
 St. 318; Fisher v. Harrisburg,2 Grant's 
 Cas. 291; Commonwealth v. Robert- 
 son, 5 Cush. 438 ; Waters v. Leech, 3 
 Ark. 110 ; Mayor v. Winfield, 8 
 Humph. 767; People v. Throop, 12 
 Wend. 183; Mayor v. Beasley, 1 
 Humph. 232 ; State v. Freeman, 38 
 N. H. 426; White v. Mayor, etc., 2 
 Swan, 564; Pedrick v. Bailey, 12 Gray, 
 161 ; Dunham v. Rochester, 5 Cow. 
 4G2. They must be reasonable and 
 not oppressive or vexatious. Common- 
 wealth V. Gill, 3 Whart. 228; St.. 
 Luke's Church v. Matthews, 4 Des. 
 Ch. 578; People v. Crockett, 9 Cal. 
 112; Howard v. Savannah, T. Charlt. 
 173. See, also, Slee v. Bloom, 19 
 Jolins . 456 ; Davis v. Prop, of Meet- 
 ing-house, 8 Mete. 321 ; Amesbury v. 
 Insurance Co., 6 Gray, 596 ; Cooper v. 
 Frederick, 9 Ala. 738 ; Commissioners, 
 etc., V. Gas Co., 12 Penn. St. 318; 
 Green's Brice's Ultra Vires. 12 et seq.; 
 Mayor, etc., v. Winfield, 8 Humph. 
 
 707 ; Mayor, etc. , v. Beasly, 1 id. 232; 
 St. Louis V. Weber, 44 Mo. 547 ; Ken- 
 nebec, etc., R. Co. V. Kendall, 31 Me. 
 470. 
 
 ^ Tailors, etc., v, Ipswich, 11 Rep. 
 53 ; Chamberlain, etc., v. Compton, 7 
 D. & R. 601 ; King v. Coopers' Co., 7 
 T. R. 543 ; Clark v. Lecren, 9 B. & C. 
 52. But it has been held that a by- 
 law is not in restraint of trade, which 
 requires loaves of bread baked for 
 sale to be of specified weight and 
 properly stamped, or which requires 
 bakers in a city to be licensed. Mayor, 
 etc., V. Yuille, 3 Ala. 137. 
 
 Whether a by-law is reasonable is 
 to be decided by the court. Common- 
 wealth V. Worcester, 3 Pick. 473. 
 
 4 Clark V. Lecren, 9 B. & C. 52 ; 
 Chamberlain, etc., v. Compton, 7 D. & 
 R. 597. A provision in the by-laws of 
 a bank that its " shares shall be 
 transferable by indorsement in writing 
 by the holder in presence of the 
 cashier or two other witnesses," re- 
 quires that the cashier or two other 
 witnesses shall in writing attest the 
 signature of the holder in order to 
 render the transfer valid between the 
 parties. Dane v. Young, 61 Me. 160. 
 Membership in a cotton exchange con- 
 stitutes property which is subject to 
 be applied in payment of the debts 
 of the member, and restrictions in 
 the by-laws on the sale or assignment 
 of shares or right of membership will
 
 By-Laws. 
 
 415 
 
 bank, that all payments made or received by the bank must be 
 examined at the time, and mistakes corrected at the time, or the 
 bank would not be responsible therefor, was unreasonable 
 and invahd, and that a recovery might still be had, for an over- 
 payment discovered afterward. But in such a case, the regula- 
 tion being reasonable, it is evident that if known to the party 
 
 not destroy the character as property 
 of such shares or right of member- 
 ship. Ritterband v. Baggett, 42 N. Y. 
 Superior Ct. 5o6. An incorporated 
 company loaned money to a member 
 of the company upon its stock owned 
 by him, to be repaid in weekly install- 
 ments, and took a mortgage to secure 
 payment, by which he agreed to pay 
 such fines and penalties as might be 
 imposed upon him by the by-laws of 
 the company. He failed to pay an in- 
 stallment when due, but tendered the 
 amount on the succeeding day. The 
 secretary of the company refused to 
 receive it unless he would also pay the 
 fine imposed by a by-law of the cor- 
 poration upon those who neglected to 
 pay the weekly installments when 
 due. The mortgagor tendered each 
 week thereafter until the date of a de- 
 cree for the sale of the mortgaged 
 premises, the amount of the accrued 
 and accruing installments, but refused 
 to pay the fines claimed to be due. 
 Held, that while the mortgagor, by 
 his failure to pay punctually the 
 weekly installment when due, sub- 
 jected himself to the fine provided by 
 the by-law for such default, his ten- 
 der thereafter of the weekly install- 
 ments as the same fell due, exempted 
 him from liability to further fines. 
 His refusal to pay the first fine did not 
 give the right to impose additional 
 fines. Pentz v. Fire Ins. Co., 35 Md. 
 73. Under the rule that the by-laws 
 of corporations must be reasonable, 
 and that all which are vexatious, un- 
 equal, oppressive, or manifestly de- 
 trimental to the interests of the corpo- 
 ration, are void , a by-law of a benev- 
 olent association, providing, as a 
 penalty for the non-payment of dues, 
 that the delinquent should forfeit his 
 right to any benefits while in arrears, 
 and for a period of three months after 
 the payment of arrears, is invalid. 
 Cartan v. Father Matthew, etc., Soc, 
 3Daly (N. Y. C. P.), 20. 
 
 A by-law of a bank is a contract 
 
 between the stockholders ; and the 
 ordinary rules of construing contracts 
 apply: in its construction, and, if 
 possible, it should be so construed, ut 
 res magis valeat, quam pereat. Be 
 Dunkerson, 4 Biss. 227. 
 
 In quo icarranto to determine the 
 defendant's title to the office of treas- 
 urer of an incorporated benevolent 
 society, his answer averred that he 
 was duly elected in a meeting held and 
 called at a certain church and hour, 
 "the same as every other annual 
 meeting has been called and notified 
 since the organization of said society." 
 The complaint showed that at least 
 three annual meetings for such elec- 
 tion had been held before this one. 
 Held, that this was a sufficient aver- 
 ment under the Wisconsin Code, of a 
 usage of the kind, and that such 
 usage, if proven, would show a valid, 
 practical construction by the society 
 itself, of the by-law relating to hold- 
 ing the annual meeting and election. 
 State V. Conklin, 34 Wis. 21. 
 
 A by-law, which is a mere rule for 
 the government of the officers of the 
 corporation in conducting their own 
 business, can have no eflect upon the 
 contracts of the corporation with other 
 parties. Samuels v. Central, etc., 
 Exp. Co., McCahon, 214. 
 
 Where the by-laws of a corporation 
 express an individual liability of 
 members for company debts, and each 
 member subscribed the by-laws 
 merely to become a member, this is 
 not enough to sustain an action by a 
 creditor of the company against a 
 member for the amount due. The 
 office of a by-law is to regulate the 
 duties of members toward the corpo- 
 ration and among themselves. A 
 third party can enforce them only 
 when he shows some privity; as 
 where his claim is for value advanced 
 upon the credit of the by-law and the 
 signature, or the like. Flint v. Pierce, 
 99 Mass. 68.
 
 416 
 
 Private Corpokations. 
 
 depositing, it would impose on him the necessity of showing 
 clearly that the mistake occurred. ' 
 
 Sec. 264. By-laws in restraint of trade. — It has, however, been 
 held in England that by-laws even in restraint of trade will 
 be sustained, where the corporations are verj ancient, and they 
 
 ' Mechanics and Farmers' Bank v. 
 Smit, 19 Johns. 115; Gallatin v. Brad- 
 ford, 1 Bibb, 209 ; Hayden v. Noyes, 5 
 Conn. 391 ; Peck v. Lockwood, 5 Day, 
 22 ; Marietta v. Fearing, 4 Ohio, 427 ; 
 Mx parte Burnett, 30 Ala. 461 ; Austin 
 V. Murray, 16 Pick. 121 ; Milhau v. 
 Sharp, 17 Barb. 435 ; 27 N. 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. Under this rule 
 it is held that a corporation organized 
 under a statute which authorizes it to 
 make by-laws for " the management 
 of its property, the regulation of its 
 affairs, and the transfer of its stock," 
 and further provides, that the stock of 
 the company "shall be transferable in 
 such manner as shall be prescribed by 
 the by-laws of the company," has 
 power to make a by-law providing 
 that no transfer of stock shall be 
 made upon the books of the corpora- 
 tion, until after the payment of all 
 indebtedness to the corporation due 
 from the person in whose name the 
 stock stands on its books. Pendergast 
 V. Bank of Stockton, 2 Sawyer, 108. 
 So too a by-law of a New York manu- 
 facturing company, which assumes to 
 prohibit a transfer of stock by the 
 owner, because he is indebted to the 
 company, is ultra vires and void. The 
 statutory power of these companies 
 to make by-laws on that subject only 
 extends to prescribing the manner and 
 form in which transfers shall be 
 made. Driscoll v. West, etc., Manuf. 
 Co., 36 N. Y. Superior Ct. 488. A 
 national bank cannot, even by provis- 
 ions framed with a direct view to 
 that effect in its articles of association 
 and by direct by-laws, acquire a lien 
 on its own stock held by persons who are 
 its debtor ; and a by-law attempting 
 to create, in favor of the bank, a lieii 
 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, and, there- 
 fore, not such a regulation as, under 
 that act, national banks have a right 
 to make. Bullard v. Bank, 18 
 Wall. 589. And see Rosenback v. 
 Salt Springs Nat. Bank, 53 Barb. 495 ; 
 Conklin v. Second Nat. Bank, id. 512, 
 note ; 45 N. Y. 655. To the contrary, 
 Lockwood V. Mechanics' Nat. Bank, 9 
 R. I. 308. A by-law of a national 
 bank which declares that no transfer 
 of stock, the holder of which is at the 
 time indebted to the bank, shall be 
 made without the consent of the di- 
 rectors, attempts to create a lien upon 
 the stock for the debts of the holder, 
 and is contrary to the provision of the 
 act which forbids loans by such banks 
 upon the security of their own stock. 
 Evansville Nat. Bank v. Metropolitan 
 Nat. Bank, 2 Biss. 527. The right of 
 alienation is an incident of property ; 
 and a by-law of a bank prohibiting 
 the alienation of stock therein, or put- 
 ting restrictions thereon, is void, as 
 being in restraint of trade. Moore v. 
 Bank of Commerce, 52 Mo. 877. Un- 
 der the principle that a by-law of a 
 corporation which is clearly unreason- 
 able and contrary to public policy is 
 void, a by-law of a merchants'exchange 
 which requires members to submit 
 their controversies to arbitration, on 
 pain of expulsion if they bring suit, 
 is invalid. The law favors arbitration 
 when it is acceptable to both parties 
 to a difficulty. But every citizen 
 must be protected iu his right to resort 
 to the courts if he prefers. State v. 
 Union Merchants' Exchange, 2 Mo. 
 App. 96. A by-law of a chamber of 
 commerce, providing for the ex- 
 pulsion of a member for noucompli- 
 ance with the terms of any contract, 
 whether verbal or written, is reason- 
 able and valid, and enforceable, even 
 though the contract violated were 
 void by the statute of frauds, or as 
 not made "during a session of 
 'Change." Dickenson v. Chamber of 
 Commerce, 29 Wis. 45.
 
 By-Laws. 
 
 417 
 
 "arc supported by special customs wliicli suppose a former grant 
 of a moiKjpoly.'' ' But in such cases the custom must be strictly 
 proved to be in harmony with the by-laws • and the doctrine can- 
 not be applied to new corporations.' 
 
 Sec. 265. By-laws adopted by the corporate body. — If by-laws 
 are lawfully framed and adopted by tlie corporate body, relating 
 to the powers and duties of the directors, they become as to them 
 the fundamental law, and hence a board of directors can no more 
 disregard such by-laws of the corporate body than they could the 
 provisions of the incorporating statute or other constating instru- 
 ments.' 
 
 Sec. 266. By-laws adopted by directors. — Where the directors 
 have authority conferred upon them, to make by-laws, either by 
 the constating instruments or by the corporation, tliey may adopt 
 such as they deem proper, provided they come within tlie scope 
 of the authority conferred upon them. In the exercise of this 
 power they may do wliatever the corporate body itself might 
 
 ' Bos worth V. Budj^en, 7 Mod. 459 ; 
 Colchester v. Goodwin, Carter, 117; 
 Bricklayers and Plasterers, Palm. 395, 
 Hardres, 56 ; Player v. .Tones, 1 Vent. 
 21; Broadnox's Case, id. 196 ; Bosworth 
 V. Hearne, Andre, 97; 2 Stra. 1085; Cme 
 temp. Hardw. 408 ; Player v. Vere, T. 
 Raym. 288 ; Bodwic v. Fennell, 1 Wils. 
 233 ; Harrison v. Goodman, 1 Burr. 16; 
 Hesketh v. Braddock,3id. 1858; Wooley 
 V. Idle, 4 id. 1953; The King v. Coop- 
 ers' Co., 7 T. R. 543 ; The King v. Tap- 
 peuden, 3 East, 186; Chamberlain, etc., 
 V. Compton, 7 D. & R. 601 ; Clark v. 
 Denton, 1 B. & Ad. 92; Clark v. Le 
 Crean. 9 B. & C. 52. 
 
 2 Hesketh v. Braddock, 8 Burr. 1858; 
 Colchester v. Goodwin, Carter, 117. 
 But see Fazakerly v. Wiltshire, 1 
 Stra. 466, Bolton v. Throgmorton, 
 Skin. 55. But see Wile, on Corp. 
 146. See, also, as to ordinances of 
 municipal corporations in restraint of 
 trade, Dunham v. Rochester, 5 Cow. 
 462 ; Freeholders v. Barber, 7 N. J. L. 
 64. 
 
 On the subject of the reasonableness 
 of by-laws, see People v^. Medical Soc. 
 of Erie, 24 Barb. 570; S. C, 32 N. Y. 
 187. See, also. State v. Ferguson, 33 
 N. H.430; Phillips v. Allen, 41 Penn. 
 
 53 
 
 St. 481 ; Kirk v. Nowill, 1 T. R. 124 ; 
 White V. Tallman, 26 N. J. L. 07 ; Hart 
 V. Albany, 9 Wend. 588 ; Peoria v. Cal- 
 houn, 29 111. 317; St. Paul v. Coulter, 
 12 Minn. 41. But "in this country," 
 observes Mr. Dillon, " corporations 
 derive all their powers from legislative 
 acts of comparatively modern date, 
 and prescriptive customs, in restraint 
 of trade or against common right, are 
 unknown." Commonwealth v. Stodder, 
 2 Cush. 562 ; Herzo v. San Francisco, 
 33 Cal. 134. 
 
 3 See opinion of Justice Miller, in 
 Samuel v. Holladay, 1 Woolw. (C. C.) 
 400 ; Cummings v Webster, 43 Me. 
 192 ; Anacosta Tribe v. Murbach, 13 
 Md. 91 ; Brick Pres. Church v. Mayor, 
 etc., 5 Cow. 538; McDermott v. Board, 
 etc , 5 Abb. Pr. 443. But the legisla- 
 ture cannot authorize the making of a 
 by-law contravening, repealing, or in 
 any way changing the statutory or 
 common law of the land. Seneca 
 County Bank v. Lamb, 26 Barb. 595 ; 
 Kvnaston v. The Mayor, etc., 2 Stra. 
 1051 ; King v. Theodorick, 8 East, 
 543 ; Stow v. Wvse, 7 Conn. 214 ; War- 
 ner V. Mower, '11 Vt. 885; State v. 
 Ancker, 3 Rich. 245.
 
 il8 Private CoKroRAxioNS. 
 
 in tliis rospect have done, if the power had not been vested in 
 them. 
 
 If the authority is conferred upon them by the constating 
 instruments, it is exclusive of the authority of the corporate 
 body to act in the premises.^ 
 
 But, if the authority is conferred b}' the corporation upon them, 
 such authority may, like the authority of an agent generally, be 
 revoked at any time. But such revocation could not affect the 
 vested rights of parties, by virtue of the powers exercised by such 
 agents before such revocation. 
 
 The acts of such directors, however, will be in all cases subject 
 to such limitations and restrictions in the adoption of by-laws as 
 we have noticed is imposed upon the corporate body itself in this 
 respect. In fact the authority to the directors may be even more 
 limited than that possessed by the body itself, where the author- 
 ity proceeds from it.^ In such a case the px)wer to act must depend 
 upon the provisions of the act conferring it. But if it is one in 
 general to make such by-laws as may be necessary and proper to 
 regulate and conduct the business of the corporation, then it 
 would be construed as giving them complete authority in that 
 respect, limited only in the manner we have stated where they 
 are framed by the corporate body. But we have already consid- 
 ered this subject in treating of directors. 
 
 Sec. 267. Distinction between by-laws adopted by the corporation 
 and those adopted by directors. — The distinction between by-laws 
 
 ' Dana v. Bank of U. S,, 5 W. & S. for the management of its affairs. It 
 
 247; Mahshall, C. J., inBank of U. S. is no answer that individual stock- 
 
 V. Dandridge, 12 Wheat. 113 ; Dayton, holders who were present at the meet- 
 
 etc. R. Co. V. Hatch, 1 Dis. 84; Conro ing when the lease was ordered, were 
 
 V. Port Henry Iron Co., 12 Barb. 27, in also directors. They did not meet and 
 
 which the court say: "It is quite ob- act as directors, but as stockholders." 
 vious from the charter that the com- '■' If the general power of making 
 
 pany could do no act except through by-laws is by the provisions of the 
 
 the directors. When the charter pre- charter vested in the corporation itself, 
 
 scribes the mode of its action, its in- it may circumscribe the powers of the 
 
 junctions must be rigidly pursued. * board of directors. Salem Bank v. 
 
 * * The stockholders in this case Gloucester Bank, 17 Mass. 29. See, 
 
 had no power to make a lease, or do also, Fleckner v. United States Bank, 
 
 any other administrative act in the 8 Wheat. 338; State of Louisiana v. 
 
 management of the affairs of the cor- Bank of Louisiana, 6 La. 745 ; White- 
 
 poration. If a lease could be made well, Bond & Co. v. Warner, 20 Vt. 
 
 at all, it could be executed only in pur- 425; Ridgeway v. Farmers' Bank, 12 
 
 suance of the act of the directors, who S, & R, 256. 
 are the body appointed by the charter
 
 By-Laws. 419 
 
 adopted by the corporate body and those of tlie directors is pointed 
 out by Mr. Justice Millki* iu a recent case, in whirli it was at- 
 tempted to set aside a trust deed as void, because the meeting of 
 the board of directors at which the president of the company was 
 authorized to execute the instrument was held without the notice 
 prescribed for such meetings by a by-law adopted by the directors. 
 He says : '" Such a by-law, when made by the board of directors 
 for their government, cannot be extended to affect contracts witli 
 third persons. There are many cases in which it has been held 
 that notice of special meetings must be given as required by the 
 by-laws, or the meetings would be wholly without authority, and 
 all business attempted to be then done would be of no binding 
 force upon the corporation. But in all these cases, and in all 
 others in which the same rule is laid down, the by-laws were made 
 by the stockholders at the annual and stated meeting, under the 
 authority and direction of a provision of the charter. In such 
 cases the stockholder m^y be supposed to retain a control over the 
 management of their aliairs and intend to put a restraint upon 
 their agents. Their will, expressed in the by-laws, becomes a 
 rule to the directors. It cannot be disregarded any more than a 
 provision in the charter. But the reason for the rule fails when 
 the by-law is made by the directors for the government of them- 
 selves in the management of the business of the corporation. The 
 same power which enacts can repeal the law. It is a mere guide 
 for their own convenience, and for the orderly conduct of their 
 business. It cannot be extended to affect the validity of acts 
 done in disregard of it, especially when third parties are con- 
 cerned." ' 
 
 We have already considered the subject of notice as imparted 
 by the by-laws, and the acts, documents and instruments for in- 
 corporation, in treating of directors and agents.^ 
 
 ' Samuel V. Holladay, 1 Woolw. (C. mouwealtli v. The Mayor, etc., 5 
 
 C.) 400. See. also, Brick Presbyterian Watts, 153. 
 
 Church V. The Mayor, etc., 5 Cow. 538 ; * See chap. 6 and 7. See, also. Fay v. 
 
 The Mechanics', etc.. Bank v. Smith, Noble, 12 Cush. 1 ; Wyman v. Hallow. 
 
 19 Johns. 115 ; Seneca Co. B'k v. Lamb, ell, etc.. Bank, 14 Mass. 58 ; State v. 
 
 26 Barb. 595 ; Com. Dig., tit. By-law, Commercial Bank, 6 S. & M. 237 ; Kis- 
 
 chap. 2 ; Dodwell v. The University of ley v. Ind. B. &W. R. Co., 1 IIuu, 202 ; 
 
 Oxford, 2 Vent. 33 ; Vandine, Peti- Adriance v. Roome, 52 Barb. 399 ; 
 
 tioner, 6 Pick. 187 ; Sargeant v. The Lowell Sav. Bank v. Winchester, 8 
 
 Essex Marine R. Co., 9 id. 203 ; Com- Allen, 109.
 
 420 Private Cokporations. 
 
 SeO. 268. By-lavrs contrary to the general lavrs of the land, void. — 
 It has been noticed that by-laws contrary to tlie law of the land 
 were void ; but a fuller statement and illustration of the subject 
 may be required. 
 
 And first, we may say that a by-law of the directors, who re- 
 ceive their authority directly from the corporate body, in conflict 
 with any by-law or regulation of the body itself, would be void.^ 
 For, as in such a case the powers of the agents are subordinate, on 
 general principles, to the authority of the principal, the principal 
 may prescribe and limit the authority of the agent in any manner 
 that may be deemed proper. 
 
 Secondly, the by-laws of either the directors or of the corporate 
 body must not conflict with the provisions of the charter, corpo- 
 rate acts, articles of association, deed of settlement, certificate, or 
 other original and constating instrnments.^ These become, by 
 acceptance and adoption, the fundamental law of the institution, 
 the constitutional law of the body, and paramount to the by-laws 
 which may be adopted. 
 
 Thirdly, they must not conflict with the constitution of the 
 state or of the general government. For, as the legislature has 
 no authority to pass laws in conflict with such constitution, so it 
 of course follows that they cannot authorize others to do so ; and 
 any by-law in conflict with either, or that authorizes any infringe- 
 ment of personal rights or privileges secured to individuals by 
 either, would be mill and void. Therefore, no by-law can impair 
 the obligation of a contract, or provide for the taking of the 
 private property of a person for the use of the cori^oration, with- 
 out just compensation,^ or authorize the violation of any other 
 rights secured by constitutional provisions,^ or impose any personal 
 or individual liability beyond such as is specified in the charter, 
 
 ' Salem Bank v. Gloucester Bank, 17 ^ Aug. & Am. on Corp., § 333 ; Stuy- 
 
 Mass. 29. See, also, Wliitewell V. War- vesaut v. Mayor, 7 Cow. 585; New 
 
 ner. 20 Vt. 425 ; Bank of Middlebury York v. New York, 3 Duer, 119. 
 
 V. Rutland, etc., R. Co., 30 id. 159 ; * Id. See, also, Coates v. New York, 
 
 Augusta Bank v. Hamblet, 35 Me. 491 ; 7 Cow. 604 ; Qoszler v. Georgetown, 6 
 
 Hoyt V. Thompson, 19 N. Y. 207. Wheat. 593 ; Bank v. Lanier, 11 Wall. 
 
 '' Hoyt V. Shelden, 3 Bosw. 267 ; 369 ; Kennebec R. Co. v. Kendall, 31 
 
 Hoyt V. Thompson, 19 N. Y. 207; Rex Me. 470 ; Jay Bridge Co. v. Woodman, 
 
 V. Spencer, 3 Burr, 1839; King v. id. 573 ; Carr v. St. Louis, 9 Mo. 190 ; 
 
 Ginever, 6 T. R 735. See, also, State State v. Coukliu, 34 Wis. 21. 
 V. Curtis, 9 Nev. 325 (1874).
 
 By-Laws. 
 
 421 
 
 incorporating laws, or other constating instruments nnder which 
 it is constituted.' 
 
 Fourthly, by-laws infringing the laws of congress, made in 
 })ursuance of the constitution,^ the general statutes of a state, or 
 particular statutes relating to tlie corporation (provided these do 
 not impair the obligation of the charter), are void.' 
 
 Fifthly, they must not be contrary to the general principles of 
 the common law, as recognized in the state, or of general public 
 policy.' 
 
 Sec. 269. It is true, however, that the legislature, having 
 paramount authority, except so far as restrained by the constitu- 
 tion of the state, may authorize acts which interfere with rights 
 which may be said to be generally possessed by persons.' This 
 subject has .been illustrated by Mr. Justice Evans as follows : 
 " If there was no law interfering, the butcher might kill his hogs 
 and beeves in the street. If the butcher could do it any man 
 might, and it might, therefore, be said to be a common right ; but 
 when the law prohibited it, it was no longer a common right. A 
 legal restraint may be imposed on a few for the benefit of the 
 
 ^1 6 
 
 many. 
 
 » Tavlor V. Griswold, 2 N. J. Eq. 232 ; 
 Lee V. Wallis, 1 Key. 292; Sayer,262 ; 
 People V. Tibbets, 4 Cow. 882 ; Ken- 
 nebec R. Co. V. Kendall, 31 Me. 470. 
 And it has been held thai a by-law, 
 which assumes to prohibit the transfer 
 of stock by the owner, because he is 
 indebted to the company, is ^di)•a vires 
 and void. Driscoll v. West Bradley 
 Man. Co., 36 N. Y. Superior Court, 
 488. 
 
 •^ Free School v. Flint, 18 Mete. 539. 
 
 3 United States v. Hart, 1 Pet. (C. C ) 
 390. 
 
 ^Norris v. Staps, Hob. 211 , Clark's 
 Case, 5 Coke, 63. See by-laws, 3 Salk. 
 76 ; Rex v. Barber Surgeons, 1 Ld. 
 Ravm.585 ; Rex v. Miller, 6 T. R. 277; 
 Rex V. Haythorne, 5 B. & C. 425; 
 Williams v. Great Western R. Co., 10 
 Exch. 15; 28 Eng. L. & Eq. 439; 
 Butchers' Ben. Association, 35 Penn. St. 
 151 ; Auburn Academy v. Strong, 1 
 Hopk. Ch 278; Jay Bridge Co. v. 
 Woodman, 31 Me. 573 ; Connecticut R. 
 Co. V. Bailey, 24 Vt. 465. 
 
 ' Taylor v. Griswold, supra. See, 
 also, Philips v. Wickham, 1 Paige, 598. 
 
 ^ Citv Council v. Ahrens, 4 Strobh. 
 {^. C.) L. 241 ; City Council v. Baptist 
 Church, id. 306 ; Peoria v. Calhoun, 29 
 HI. 217; St. Paul v. Colter, 12 Minn. 
 41. As transceudiug the charter, by- 
 laws creating a new office, imposing 
 an oath of office where none is pro- 
 vided by the constitution [of the cor- 
 porate body], giving a vote to a person 
 or a casting vote to an officer who is 
 not entitled to it by the charter, re- 
 stricting the right of an officer to vote 
 to a mere casting vote in ca.se of a tie, 
 restricting or extending the right of 
 admission or eligibility to office, or re- 
 stricting the discretionary power of 
 removing a master or usher of a gram- 
 mar school vested in the governors, as 
 given by the charters, altering the pre- 
 scribed mode of election, or imposing 
 ne%v and additional tests or qualifica- 
 tions on members or voters ; delegat- 
 ing the power of laying assessments 
 to the directors when the charter or
 
 422 
 
 Private Corpobations. 
 
 Sec. 270. Matters that may be regulated by by-laws. — TllC term 
 " bj-iaw " is used to designate tliose regulations which a corporation 
 has a riglit to make, either directly as a corj^orate body, or by a 
 
 general law vests it exclusively in the 
 corporation, or changing the salaries 
 of officers, or imposing a personal 
 liability for the debts of the corpora- 
 tion not contemplated by the charter, 
 are void. And where a by-law confers 
 the right of voting by proxy, or im- 
 poses the ownersliip of a certain num- 
 ber of sliares as a qualification for office 
 or admission, there being nothing in 
 the charter expressed or implied speci- 
 ally authorizing such by-law, or, wliere 
 in cases of a " savings institution," a 
 by-law is passed, prescribing that per- 
 sons owning one share of the capital 
 required to be invested for the purpose 
 of security to the depositors should be 
 members, and should cease to be mem- 
 bers upon its transfer, the by-law is 
 held void, as invading the spirit and 
 meaning of the charter. So, where 
 the act incorporating an insurance com- 
 pany gave a vote for each share of 
 stock, but provided that no share 
 should entitle the holder to a vote 
 unless the stock should have been held 
 by him at least sixty days next and 
 immediately preceding an election, and 
 provided that the major part of the 
 directors should constitute a board, 
 with power to pass such by-laws as to 
 them should appear needful and proper 
 respecting elections, and they passed 
 a by-law requiring a trans^'er of stock 
 to be registered in order to be effectual, 
 it was held that a by-law requiring the 
 inspectors of elections, whenever they 
 should or might suspect that stock 
 voted on had been sold or bargained 
 for within the sixty days , but not trans- 
 ferred on the books, to oblige the per- 
 son proposing to vote on such stock to 
 adduce satisfactory proof, either by his 
 own oath or affirmation or otherwise, 
 that the stock had not been sold, or 
 the beneficial interest parted with by 
 any bar<rain or contract within the 
 sixty days, and in default of such proof 
 to reject the vote, was void ; and that 
 the vendor might vote, notwithstand- 
 ing the transfer within sixty days, the 
 same being unregistered ; tlie inspect- 
 ors having no right to require other 
 tests of a voter than those provided in 
 the act of incorporation, and it not 
 
 being competent to the directors to 
 pass any by-laws at variance with the 
 provisions of the same. An act incor- 
 porating a church provided that the 
 vestry should be elected " in the man- 
 ner accustomed," whicli was at a cer- 
 tain time and place, by the inhabitants 
 of the parish, being of the religion of 
 the church of England, and possessing 
 certain other enumerated qualificii- 
 tions. It was held that a by-law made 
 by the vestry, enacting that no person 
 should be admitted a member of the 
 church, or be entitled to the privilege 
 of a vote in the election of the vestry, 
 unless he should pay the sum of fifty 
 dollars, a qualification not named in 
 the charter, was void ; inasmuch as ' it 
 required a new qualification to entitle 
 persons otherwise entitled to vote, and 
 was therefore an attempt to transcend 
 the powers given, and to alter the qual- 
 ifications of the voters, and was a vio- 
 lation of the charter." 
 
 And generally, where the charter 
 vesta the admission of members in 
 the body at large, a power vested in 
 the directors, to provide for the admis- 
 sion of members, gives them only a 
 right to prescribe in their by-laws, the 
 time, place, and manner of holding the 
 election of members, and not the right 
 to pass a by-law imposing a test of 
 membership not contemplated by the 
 charter, as the ownership of a share in 
 the capital stock of a" savings institu- 
 tion." In a recent case in England, it 
 was decided, that a by-law of a navi- 
 gation company, that the navigation 
 should be closed on Sundays, except 
 for works of necessity, and for the 
 purpose of going to and returning 
 from any place of divine worship, was 
 not authorized by a charter empower- 
 ing the company to make by-laws for 
 the good government of the company 
 and for the good and orderly using of 
 navigation, and also for the well gov- 
 erning of the bargemen, watermen, 
 and boatmen, who should carry goods 
 on any part of the navigation, on the 
 ground, that the power of making 
 by-laws was vested in them solely for 
 the orderly use of the navigation, and 
 not for the purpose of controlling the
 
 By-Laws. 423 
 
 select body of its own members, by virtue of a power conferred 
 by the corporation, the statute or constating instruments. These 
 by-laws or regulations may, in fact, be a part of the constating 
 instruments. But they are usually, in cases of corporations for 
 pecuniary emolument, referred to the board of directors to fi-ame 
 and adopt ; and they may properly regulate all those internal 
 affairs of the corporation, in the prosecution and management of 
 the business for which it was organized, and for the management 
 of which there are no other regulations in the charter or constat- 
 ing instruments. 
 
 Sec. 271. The statute and other corporate and constating in- 
 struments are the suj)erior or constitutional law of the corpora- 
 tion ; by which the authority is conferred upon the corporate 
 body, or a select body of the corporators, to frame by-laws, for 
 the general management of the business of the corporation, sub- 
 ject to the limitations specifically prescribed, and such as we have 
 noticed as on general principles are applicable thereto. And 
 by-laws thus legally adopted have, in respect to the matters of 
 which they are appropriately the subject of regulation, the force 
 and effect of a legislative act.' 
 
 Thus, subject to the conditions before stated, they may provide 
 for the time and place of meeting of the stockholders; for the 
 time and manner of giving notice thereof ; how the directors shall 
 be elected ; in what way the will of the members shall be 
 expressed, as by ballot or otherwise ; how vacancies in the board 
 of directors may be filled ; how the other officers shall be appointed 
 
 moral or religious conduct of carriers parte Winsor, 3 Story, 411 ; Carr v. St. 
 
 along the navigation, which is to be Louis, 9 Mo. 191 ; Free Sch.,etc., v. 
 
 left to the general law of the land, Flint, 18 Mete. 539 ; Kennebec R. Co. v. 
 
 and to the laws of God. Rex v. Bird, Kendall, 31 Me. 470 ; Phillips v. Wici^- 
 
 13 East, 384; Rex v. Giuever, 6 T. R. ham, 1 Paige, 598; Taylor v. Griswold, 
 
 736; McCullough V. Annapolis R. Co., 3 N. J. Eq. 223; Co'mmonwealih v. 
 
 4 Gill. 58 ; Rex v. Coopers, etc., 7 T. Gill, 3 Whart. 228 ; Andrews v. Union 
 
 R. 548 ; Rex v. Atwood, 1 Nev. & M. Ins. Co., 37 Me. 256 ; People v. Tibbets, 
 
 286 ; Rex v. Weymouth, 7 Mod. 373 ; 4 Cow. 358 ; Rollins v. Columbia Ins. 
 
 Queen v. Governors, etc., 6 Q. B. 682 ; Co.. 5 Fost. 200 ; Calder Navigation Co. 
 
 Queen v. Sadlers' Co., 10 H. L. Cas. v. Pilling, 14 M. & W. 75. 
 ,414 ; 3 Ell. & E. 42 ; 4 B. & S. 570 ; Ex 
 
 ' Helland v. Lowell, 3 Allen, 407 ; Pr. 422 ; Taylor v. Carondelet, 22 Mo. 
 
 Church V. City, etc., 5 Cow. 548; 105; Hopkins v. Mayor, etc., 4 M. & 
 
 St. Louis V. Boffinger, 19 Mo. 13 ; W. 621. 
 McDermott v Board of Police, 5 Abb.
 
 424 Pkivate Corporations. 
 
 or elected, and their qualifications ; what number shall constitute 
 a quorum of meetings held by directors ; how vacancies in offices 
 shall be filled ; how committees shall be appointed, and their 
 powers and duties ; how special or general agents may be ap- 
 pointed, and their duties, qualifications and powers ; when and 
 where meetings of the board of directors, or of the corporate body 
 shall be held, or when called, and what notice of the same shall 
 be given ; what bond, if any, shall be required of officers, and 
 who shall approve of the same ; what books of the company 
 shall be kept, and by whom and how, and for what purpose ; how 
 the by-laws may be repealed or amended ; for the transfer of stock 
 from one to another ; and for securing to the corporation a lien 
 on all such stock, for all debts due the corporation. Of course 
 the by-laws, whether made by the corporate body or by the board 
 of directors, can confer no power upon themselves or their agents 
 not possessed by the corporation. And any attempt to exercise 
 such powers would be ultra vires and, as we have seen, void. 
 The distinction between a corporation and an individual in this 
 respect is, that a corporation is an artificial person created for a 
 specific purpose, and its powers are limited by the acts and instru- 
 ments of its creation, and it can only execute such contracts and 
 perform such acts as it is authorized to make and perform, in this 
 respect differing from a natural person who may perform all acts, 
 and execute all contracts which are not forbidden by some posi- 
 tive law.^ The rights of natural persons in this respect are 
 limited only by provisions of law, or public policy, which is a 
 part of the law. 
 
 A corporation authorized by statute to make by-laws for the 
 management of its property, the regulation of its affairs, and the 
 transfer of its stock, has power to make a by-law providing that 
 no transfer of stock shall be made upon the books of the corpora- 
 tion until after the payment of all indebtedness to the corporation 
 due from the person in whose name the stock stands on its books." 
 
 ' Root V. Wallace, 4 McLean (C. C), And ex post facto laws by corporations 
 
 8 ; Davis v. Bank, etc., id. 387 ; Gage are no more lawful for corporations 
 
 V. New Market R. Co., 18 Q. B. 457 ; than for states. Pulford v. Fire Dept. 
 
 14 Eng. L.& Eq. 57 ; Preston v. Liver- of Detroit, 31 Mich. 458. 
 
 pool R. Co., 5 H. L. Cas. 605. But ^ Pendergrast v. Bank of Stockton, 2 
 
 by-laws can have no retroactive effect. Saw. 108. And if the making of by-
 
 ByLaw8. 425 
 
 Sec. 272. How by-laws are made.— In treating of corporate 
 meetings we stated the manner in whicli the corporate will was 
 expressed, viz. : by the voice or vote of the majority, and that this 
 majority was, unless otherwise provided, the voice or vote of those 
 representing a majority of the stock ; each share entitling the 
 holder to a vote on all questions submitted at a meeting of tlie 
 corporate body. If the power to adopt by-laws is conferred upon 
 the directors, a majority of them, or of those constituting a quo- 
 rum for doing business, may ado])t or enact them.^ 
 
 But in whatever manner, either by tlie corporate body or by 
 the board of directors, they may be enacted, it should be done at 
 a meeting duly called and lawfully held. If there is a mode of 
 enacting by-laws prescribed by the constating instruments, that 
 mode must be pursued;^ but in the absence of any prescribed 
 mode, such by-laws are usually prepared by some committee ap- 
 pointed for that purpose by the corporate body or the board of 
 directors, as the case may be, and adopted by resolution or other- 
 wise, by such body or board, at a lawful meeting, and duly 
 recorded by the proper officer.^ 
 
 This is the usual and regular way of enacting or making by- 
 laws ; but it has been held that this mode of adopting them is not 
 absolutely essential. In fact, it appears from the adjudications 
 that by-laws may be inferred, without proof of their actual or 
 formal adoption in any manner by the corporation or the directors. 
 Thus, as it has been observed of a corporation, " that it may adopt 
 by-laws, as well by its own acts and conduct, and the acts and con- 
 duct of its officers, as by an express vote or an adoption in 
 writing." * 
 
 laws vests in tbe corporate body by them. Salem Bank v. Gloucester 
 it may confer the power on the board Bank, 17 Mass. 39. 
 of directors, and they may be limited 
 
 » Wilcocks, 7 Cow. 403 ; Cahill v. & G 334; Fairfield v. Thorp. 13 Conn. 
 
 Kalamazoo Ins. Co., 3 Mich. 134. 173 ; Langsdale v. Bonton, 13 Ind. 467, 
 
 " State V. Jersey City, 37 N. J. L. * In the case of the Union Bank of 
 
 493; Sower V. Philadelphia, 35 Penn. Maryland v. Ridgely, 1 H. & G. 334, 
 
 St. 331 ; Gas Co. v. San Francisco, 6 where it appeared that,by charter, the 
 
 Cal. 190 ; Municipality v. Cutting, 4 president and directors of the bank 
 
 La. Ann. 335; Cincinnati v. Gwynne, were authorized to make all such by- 
 
 10 Ohio, 193; Markle v. Akron, 14 id. laws and regulations for the govern- 
 
 586. meut of the corporation, its officers and 
 
 * Union Bank, etc. ,v. Ridgely, 1 Harr. membe.rs,as they or a majority of them 
 
 54
 
 426 
 
 Private Coepoeations. 
 
 Sec. 273. Repeal of by-laws.— It is a common doctrine relating 
 to legislative bodies, that where they have authority to make laws 
 they have also authority to repeal them ; and that the power to 
 make includes the power to repeal. This doctrine is applicable 
 to private corporations, and they or the boards of directors may 
 not only make by-laws for the regulation and management of 
 their affairs, but amend or repeal the same.^ 
 
 The general doctrine in reference to legislative bodies is, that 
 no such body can part with its privileges so as to prevent the 
 exercise of the same again, and hence that they may repeal or 
 modify any act passed by them. But this doctrine does not apply 
 to those cases of grant of rights and privileges to private corpora- 
 tions, which, as we have seen, have the character of contracts, 
 and become vested rights In the corporators. This doctrine is 
 applicable to corporate bodies, or boards of directors thereof, in 
 reference to by-laws. They have the power to repeal or modify 
 the same ; but this power cannot be used to impair the rights 
 of parties which have been conferred, and are vested in them, under 
 and by virtue of the repealed or amended by-law. " The repeal 
 
 sliould from time to time think fit ; 
 upon a certain writing being given in 
 evidence, headed ' By-laws,' and which 
 purported to have been the by-laws 
 of the bank, while its business was 
 transacted under articles of association, 
 and before the act incorporating it was 
 passed, it was objected that tliere was 
 no evidence that the writing produced 
 had been adopted as the by-laws of 
 tlie corporation, there being no entry 
 or memorandum of such adoption 
 among the minutes of its proceedings. 
 The court of appeals of Maryland, 
 however, decided that authority to 
 make by-laws being specially dele- 
 gated to the president and directors, 
 without the mode of exercising it be- 
 ing prescribed by the charter, it was 
 no more necessary that their adoption 
 should be in writing than that the 
 acts or contracts of any other duly 
 
 authorized agent ; and it being proved 
 by the cashier that the by-laws in 
 question were always reputed to be 
 the by-laws of the corporation, and 
 with the exception of two articles, 
 were so observed by iiim ; and by a 
 director, that they were delivered to 
 him as such, upon his election, and 
 that the decisions by the board of di- 
 rectors were made agreeably to them 
 in any question upon their conduct ; 
 this was held a sufficient adoption of 
 the by-laws by the president and di- 
 rectors, and sufficient proof of the 
 same, there being no record or minute 
 of the fact. As a corporation has a 
 legal existence only within the state 
 of its creation, all acts by it, including 
 the making of by-laws, must be within 
 such state. Mitchell v. Vermont Cop- 
 per Min. Co., 49 N. Y. Superior Ct. 
 406. 
 
 1 Rex V. Ashwell, 12 East, 22 ; 3 T. 230 ; Bigelow v. Hillnian, 37 Me. 52 ; 
 
 R. 198 ; State V. Pinto, City Clerk, etc., Reiif v. Connor, 11 Ark. 241 ; Road 
 
 7 Ohio St. 355; Stoddard v. Gilman, Cases, 17 Penn. St. 71 ; Rex v. West- 
 
 22 Vt. 568 ; Pond v. Negus, 3 Mass. wood, 4 B. & C. 806.
 
 By-Laws. 427 
 
 cannot operate retrospectively to disturb private riglits vested 
 under it." ' 
 
 Sec. 274. Function of by-laws— effect on third parties TllC proper 
 
 function of by-laws is to regulate the nuuiagenient and control of 
 corporate affairs and especially to regulate the conduct and define 
 the duties of the members toward the corporation and between 
 themselves. " So far as its provisions are in the nature of a con- 
 tract, the parties thereto are the members of the association as 
 between themselves, or the corporation on the one side and its 
 individual members upon the other." " They are not designed to 
 confer rights or privileges upon third parties, or strangers to the 
 corporation, but to protect rights and secure privileges to the cor- 
 porators. 
 
 Thus, where a by-law provided as follows: "The members of 
 this association pledge themselves in their individual as well as 
 their collective capacity to be responsible for all moneys loaned to 
 this association, and for the payment of which the treasurer may 
 have given his obligation agreeably to the direction of the direct- 
 ors," and a note was duly executed by the treasurer for the asso- 
 ciation on which payments had been made, but for the balance, 
 the association having failed to pay it, suit was brought against 
 the defendant as a member of the corporation, demand having 
 first been made of him, the supreme court of Massachusetts, Wells, 
 J., observing : " The note upon which this action is based is the 
 contract of the corporation. The defendant is not a party to that 
 contract, and the plaintiff does not seek by this suit to charge 
 him upon any statute liability as a stockholder. Kesponsibility 
 for the amount of the note is sought to be established through a 
 by-law of the corporation to which the defendant had attached 
 his signature. To become a member of the association it was re- 
 quisite to subscribe the by-laws. It does not appear that the defend- 
 
 • East Hartford v. Hartford Bridge ^ pii^t y Pierce, 99 Mass. C8 > 
 
 Co., 10 How. (U. S.)5Br); Debolt V. Ins. Mellen v. Whipple, 1 Gray, 317: 
 
 and Trust Co., 1 Ohio St. 564; Plank- Field v. Crawford, 6 id. 116 ;" Dow v. 
 
 road Co. v. Husted, 3 id. 578; Matheny Clark, 7 id. 198. See, also, Trustees of 
 
 V. Golden, 5 id. 375; Mott v. Pennsyl- Free Schools, etc., v. Flint, 13 Mete, 
 
 vania, etc., R. Co., 30 Penn. St. 9; 543. 
 Sedg. on Const, and Stat. Law, 616.
 
 428 Private Cokpoeations. 
 
 ant's signature was attached for any other purpose than to con- 
 stitute him a member of the corporation. It does not appear that 
 tlic plaintiff lent his money [for which the note was given] upon 
 the faith or credit of the individual pledge contained in the by- 
 law ; nor that the by-law was in any manner made known to him 
 or to the public as tlie basis of such credit. * * * The right 
 of any third party, stranger to the association, to establish a legal 
 claim through such a by-law, must depend upon the general prin- 
 ciples applicable to express contracts. * * * ]^o action can 
 be maintained by such third party, unless he can bring his case 
 within some of the recognized exceptions to that general rule. A 
 pledge like the one in question, if made for the purpose of enab- 
 ling the corporation to obtain a loan upon the faith of it and used 
 for that purpose, may perhaps give a right of action against the 
 subscribers in favor of a party who has been induced to advance 
 money upon its credit." ' 
 
 Sec. 275. By-laws regulating the transfer of stock.— The most im- 
 portant matters which by-laws may regulate are those relating to 
 the transfer of stock and securing to the corporation a lien on 
 the same for any indebtedness of the holder to the corporation. 
 For instance, it is sometimes provided by the by-laws of the cor- 
 poration that no transfer of stock shall be made unless it is regis- 
 tered upon the proper books of the company, kept for that pur- 
 pose. In such a case can the holder transfer or assign his stock 
 without a compliance with the provisions of the by-laws? Or can 
 he still transfer the interest in stock held by him, subject to the 
 equitable claims and liens of the corporation ? 
 
 On these questions there have been a variety of decisions. " A 
 very literal construction has been given in Connecticut to such 
 clauses, either in the charter or by-laws of a corporation ; the 
 scope and object of such provisions being, in the view of the 
 supreme court of that state, ' to render the purchase of stock secure 
 to any person, if at the moment of his purchase the company 
 books did not furnish evidence that it had been previously trans- 
 ferred.' The settled law of Connecticut is, that where such clauses 
 are found in the charter and by-laws, or either, the transfer 
 
 • Flint V. Pierce, 99 Mass. 68.
 
 By-Laws. 429 
 
 is invalid and of no effect for any purpose, unless made or regis- 
 tered on the books uf the company. The registry is there 
 deemed the original act in tlie change of title, and an entry by 
 the clerk on the deed, ' received for record,' is not considered 
 equivalent to a registry." ^ 
 
 Seo. 276. This, however, is not the general doctrine on this 
 subject ; the rule recognized being that such regulations are pri- 
 marily if not solely for the protection of the interests of the cor- 
 poration ; that it is important if not necessary for the cor])oration 
 to know who are the stockholders and members, not only to ena- 
 ble them to determine to whom dividends are to be paid, but also 
 to determine who are entitled to vote upon stock ; that this pro- 
 vision is necessary to enable the corporation to avail itself of a lien 
 upon the stock held, without prejudice to purchasers and assignees ; 
 but that as between the holder and the assignee an assignment 
 passes all the rights of the holder, at least his equitable fnterest, 
 subject to the rights of the corporation, and that such a provision 
 has application only to the relations between the stockholder and 
 the corporation.^ 
 
 Sec. 277. Providing for a corporate lien on stock. — The right of lien 
 of the corporation on shares owned by parties is held to be conferred 
 only by virtue of some provision of the statutes or by-law^s, and 
 not by common law.' A provision, howevei", is sometimes con- 
 tained in the statute of incorporation or other constating instru- 
 ments, but more frequently in the by-laws, to the effect that no 
 stockholder indebted to the corporation shall be authorized to 
 make a transfer or receive a dividend, until all indebtedness to the 
 corporation is discharged. And in case of such a pi'ovision it has 
 
 'Northrop v. Newtown T. Co., 3 v. Harris, 20 Mo. 382 ; Fisher v. Essex 
 Conn. 544 ; Marlborough Man. Co. v. Bank, 5 Gray, 373 ; Sargent v. Frank- 
 Smith. 2 id. 579 ; Northrop V. Curtis. 5 lin Ins. Co., 8 Pick. 90; Nesmith v. 
 id. 246 ; Oxford v. Bunnell, 6 id. 552. Washington Bank, 6 id. 324. 
 But see Colt V. Ives, 31 id. 25. ^ Union Bank v. Laird, 2 Wheat. 
 
 2 Farmers' Bank v. Iglehart, 6 Gill. 390; Rogers v. Huntington Bank, 13 S. 
 
 50; Stebbins v. Phenix Ins. Co.. 3 «& R. 77 ; Grant v. Mechanics' Bank, 15 
 
 Paige, 350; Union Bank v. Laird, 2 id. 140; Sewall v. Lancaster Bank, 17 
 
 Wheat. 390 ; Black v. Zacharie, 3 How. id. 285 ; Utica Bank v. Smalley, 2 Cow. 
 
 513; Quiner V. Marblehead Ins. Co.,10 770; Steamsliip Dock Co. v. Heron, 
 
 Mass. 476 ; Grant v. Mechanics' Bank, 52 Penn. St. 280. 
 15 S. & R. 143 ; Chouteau Spring Co.
 
 430 
 
 Private Corporations. 
 
 been held to embrace not only an amount dne for the original 
 subscription, but also any debt due from the stockholder on notes 
 discounted, where he is either principal or surety.-^ 
 
 Sec. 278, The lien thus created will also cover dividends as 
 well as the shares of stock, although only shares may be desig- 
 nated.^ But in New York, where a stockholder of a bank which 
 had such a by-law sold his stock to a purchaser who had no notice 
 of the by-law, and the bank gave the assignor credit before a trans- 
 fer of the stock was made on its books, and before notice of his 
 assignment, it was held that the purchaser had an equitable title 
 to the stock free from any lien on the part of the bank.' 
 
 ' Brent v. Bank of Washington, 10 
 Pet. 596 ; McDowell v. Bank of Wash- 
 ington, 1 Harr. (Del ) 27 ; St. Louis 
 Ins. Co. V. Goodfellovv, 9 Mo. 149 ; 
 Farmers' Bank v. Iglehart, 6 Gill. 50. 
 
 ** Hague V. Dandeson, 2 Exch. 741. 
 
 ^ Bank of Attica v. Manufacturers' 
 Bank, 20 N. Y. 501. Of the right of 
 banking corporations under such pro- 
 visions it has been observed " that it 
 is not defeated or prevented from 
 attaching by a transfer to a fictitious 
 holder, and subsequently by a person 
 represented by the indebted stock- 
 holder to be that holder to one who 
 pays no consideration for it ; nor does 
 it yield to a claim of priority on the 
 part of the general government. Such 
 lien being intended solely as a pro- 
 tection to the bank for debts due to it, 
 equity will not compel the bank to 
 enforce it in favor of the sureties on 
 such debts, on the ground that it was 
 intended for the benefit of sureties, 
 and giving precedence to debts prior 
 in date, although upon general prin- 
 ciples it might interpose at the suit of 
 the sureties to prevent an abuse by 
 the directors of the power conferred 
 upon them by the clause giving the 
 lien. And where the charter of a cor- 
 poration, authorized to lend money, 
 enacts that the stock shall be assign- 
 able on the books of the corporation 
 under such regulations as the board of 
 trustees shall establish, it is competent 
 for the trustees to enact a by-law that 
 ' no stockholder shall be permitted to 
 transfer his stock while he is in de- 
 
 fault.' If a stockholder borrow money 
 of a bank, with full knowledge of a 
 usage not to permit a transfer of his 
 stock whi-le he is indebted to the bank, 
 he is bound by such usage, and neither 
 he nor his assignee, under a voluutar}' 
 general assignment, can maintain an 
 action against the bank for refusing 
 to permit his stock to be transferred. 
 A by-law of a bank giving to the in- 
 stitution a lien upon the shares of a 
 stockholder, for debts due from him to 
 the bank, is a reasonable and valid by- 
 law, and under it a bank may defend 
 against a suit brought by a stock- 
 holder for a refusal to permit him to 
 transfer his stock on its books without 
 first paying the debts he owes to it. 
 Whether, however, a by-law of a cor- 
 poration, merely as such, can create a 
 general lien on the shares of a stock- 
 holder to the amount of the debts due 
 from him to the bank, so as to affect 
 the rights of creditors, or of a special 
 assignee for value, without notice of 
 the restriction, has been considered 
 questionable. See, also, Stebbins v. 
 Pheuix Ins. Co., 3 Paige, 350 ; Brent 
 V. Bank, etc., 10 Pet. 596 ; Cross v. 
 Phenix Bank, 1 R. I. 39 ; Cunningham 
 v. Alabama Ins. Co., 4 Ala. 652 ; St. 
 Louis Ins. Co. v. Good fellow, 9 Mo. 
 149 ; Morgan v. Bank of North Amer- 
 ica, 8 S. & R. 73 ; Nesmith v. Bank of 
 Washington, 6 Pick. 329; Plymouth 
 Bank v. Bank of Norfolk, 10 id. 454; 
 Steamship Dock Co. v. Heron, 52 Penn. 
 St. 280; Bank of Attica v. Manufac- 
 turers' Bank, 20 N. Y. 501.
 
 By-Laws. 431 
 
 Sec. 279. Notice contained in the by-laws. — It is a common doc- 
 trine that persons dealing with the agents and officers of a corpo- 
 ration are chargeable with notice not only of the authority con- 
 ferred upon them but of the restrictions and limitations of the 
 same contained in the by-laws, aiul that no authority to exercise 
 powers can be inferred by virtue of an office where the authority 
 of such officer is specifically provided for in the by-laws.^ But 
 there is a distinction made as to notice of the authority conferred 
 by by-laws between the by-laws of the corj)oi'ation, conferring or 
 restricting such authority, and the by-laws of the directors." 
 
 Sec. 280. By-laws cannot enlarge or abridge the rights of stock- 
 holders. ■ — Although a corporation may, subject to the limitations 
 wx have noticed, make all needful and convenient regulations for 
 the management of its internal affairs, it cannot, by resolutions or 
 by-laws, abridge or enlarge the privileges conferred npon the cor- 
 poration or the corporators by the incorporating statutes or in- 
 struments.' 
 
 ' Adriance v. Roome, 52 Barb. 399 ; ^ Brewster v. Hartley, 37 Cal. 14. 
 Wild V. Bank of Passamaquoddy, 3 In this case the court, per Rhodes, 
 Mason, 505; State v. Commercial J., say: "The power of electing the 
 Bank.O Sm. &M. 218; Risley v. Indian- directors of a railroad corporation is 
 apolis, etc., R. Co., 1 Hun, 202; Me- [by the statutes of California] lodged 
 chanics' Bank v. New York, etc., R. Co., in the hands of the stockholders. The 
 13 N. Y. 599; Adriance v. Roome, 52 exercise of this power having been 
 Barb. 599 ; Dabney .v. Stevens, 40 regulated by the statute, the corpora- 
 How. Pr. 341 ; Lowell Savings Bank tion cannot by its by-laws, resolutions 
 V. Winchester, 8 Allen, 109. or contracts either give or take it 
 
 ■•'See Samuel v. Holladay, Woolw. away." 
 (C. C.) 400. See, also, chap. 7.
 
 432 Private Corporations. 
 
 CHAPTER XII. 
 
 LIABILITY OF CORPOKATIONS FOR TORTS. 
 
 Sec. 281. General principles relating to the liability of, for torts. 
 
 Sec. 283. Corporations, when liable for torts. 
 
 Sec. 285. They may do wrongful acts, or direct them to be done. 
 
 Sec. 286. Frauds of corporations, or of their agents. 
 
 Sec. 288. Frauds of agents for which the corporation is liable. 
 
 Sec. 290. Particular acts of fraud by agents. 
 
 Sec. 291. Doctrine where the corporation is the occasion of the loss by the 
 
 fraudulent act of a servant. 
 Sec. 292. Corporations enjoying the benefit of contracts secured by the 
 
 frauds of agents will be responsible for such frauds. 
 Sec. 294. Right to repudiate a contract for fraud limited to the original 
 
 parties. 
 Sec. 295. Ratification of a contract effected by the fraud of the agent. 
 Sec. 297. Corporate liability for other wrongs. 
 Sec. 298. Assault and battery ; when committed in the line of duty of the 
 
 agent. 
 Sec. 300. Liability of corporations for trespasses to property. 
 Sec. 802. Liability of corporations in cases of the negligence of agents. 
 Sec. 303. Limitation of liability in case of negligence. 
 Sec. 807. Complications arising from successive negligence. 
 Sec. 811. Damages generally, in cases of torts. 
 Sec. 318. Exemplary damages. 
 
 Sec 315. Application of the doctrine to private corporations. 
 Sec. 316. Extreme doctrine of liability for exemplary damages. 
 Sec. 317. Gross negligence, which authorizes exemplary damages. 
 Sec. 318. Inconsistency of the rule in its application to corporations. 
 Sec. 819. Recent examination of the doctrine of exemplary damages. 
 Sec. 322. Conflict growing out of the diverse rules. 
 Sec. 323. Damages for an injury resulting in death. 
 Sec. 324. Elements of damages in case of death ; what it is competent to 
 
 show. 
 
 Sec. 281. Geueral principles relating to the liability of, for torts. — 
 When it is considered that a corporation is a mere ideal and 
 immaterial person, it may appear unreasonable that it can be 
 guilty of a wrong or tort ; but when we reflect that it must 
 always execute its will through agents, and that the principal 
 is always responsible for the torts of agents, committed in the per- 
 formance of the duties conferred upon them, it will be seen that, 
 after all, a corporation should be liable for torts done and com-
 
 Liability of Cokpouations for Torts. 433 
 
 iiiitted by agents while acting witliin the general scope of their 
 authority.' 
 
 In an English case Lord Oottenham said : " Strictly speaking, 
 a corporation cannot, itself, be guilty of fraud. But when a cor- 
 poration is formed for the purpose of carrying on a trading or 
 other speculation for profit, such as forming a railway, these ob- 
 jects can only beacconi])lished through the agency of individuals; 
 and there can be no doubt that if the agents employed conduct 
 themselves fraudulently, so that if they had been acting for pri- 
 vate employers, the persons for whom they were acting would 
 have been affected by their fraud, the same principles must pre- 
 vail where the principal under whom the agent acts is a corpo- 
 ration." " 
 
 Sec. 282. The common law in relation to the liability of the 
 principal for the tortious acts of the servant, generally, is equally 
 applicable to the relation between a corporation and its servants 
 and agents. In relation to this liability, it may be affirmed that the 
 master or principal, as the case may be, is liable for any negligence, 
 misfeasance, or omission of duty of the servant or agent, which 
 occurs in the discharge of the duty, or that comes within the scope 
 of the authority conferred upon him.' "And this liability," observes 
 
 ' Phil. & Read. R. Co. v. Derby, 14 create tlie liability is the fact of their 
 
 How. (U. S.) 4G8 ; Noyes v. Rut. & assuming such offices. So, too, for the 
 
 Burl. R. Co., 27 Vt. 110; Alabama & most part, in regard to injuries to 
 
 Ten. R. Co. v. Kidd, 29 Ala. 221 ; Yar- strangers and mere torts, it is not ex- 
 
 borou<rh v. The Bank of England, 16 pected that proof will be given of any 
 
 East, 6 ; Reg. v. Birmingham & Glouc. express authority to the servant or 
 
 R. Co., 3 Q. B. 223; Bloodgood v. M. employee to do the particular act." 
 
 & H. R. Co., 18 Wend. 9 ; Dater v. 1 Redf. on Rail. 513. See, also, Lowell 
 
 Troy & T. R. Co.. 2 Hill, G29 ; Hale v. v. Boston & Low. R. Co., 23 Pick. 24. 
 
 Union Mut. Fire. Ins. Co., 32 N. H. •'Ranger v. Great Western R. Co., 5 
 
 295. Mr. Redfield observes: " As rail- H. L. 72. See, also. Royal British B'k, 
 
 ways are, like other corporations, mere ex parte Nicol, 28 L. J. Ch. 257 ; Green 
 
 entities of the law, inappreciable to v. Loudon General Omnibus Co., 7 C. 
 
 the senses, we do not see why this B. (N. S.) 290; 29 L. J. C. P. 13; 
 
 mere abstraction should not be re- Brice's Ultra Vires, 240. 
 
 garded as always existing and present A corporation is liable for even the 
 
 in the discharge of its functions. It is, willful acts of the servants, if done in 
 
 indeed, a mere fiction, whether we re- relation to their legitimate duties. 1 
 
 gard the company as present or absent. Redf on Rail. 508 ; Whiteman v. Wil- 
 
 And it seems more just and reasonable mington & Susq. R. Co., 2 Harr. 514; 
 
 that this fiction should not be resorted Edwards v. Union B'k, 1 Fla. !',]{]. 
 
 to, to excuse just responsibility. It is ^ Story on Agency, j? 308 ; Paley on 
 
 certain we never require proof of any Agency by Lloyd, 396 ; Chitty on 
 
 organic action of the corporation to con- Com. and Man. 214; Story on Bailm., 
 
 stitute railway carriers of freight and t^ 400. 
 passengers. All that is required to 
 
 55
 
 434 Private Corporations. 
 
 Mr. Story, " is not limited to principals who arc mere private 
 persons, but extends also to private corporations, for the misfeas- 
 ances, negligences and omission of duty of their agents, in the 
 course of their employment, whenever they are duly appointed." ' 
 Upon tlie same principle that private persons are liable for the 
 wrongful acts of their servants and agents, so are private corpora- 
 tions, and for the same reasons, liable under the same circum- 
 stances as private persons.* 
 
 Sec. 283. Corporations, when liable for torts. — The liability of 
 corporations for the tortious acts of their agents and servants is 
 the same in all cases as though they were natural persons ; and 
 they are liable in the same manner and to the same extent.^ 
 Neither is the liability in such cases affected by the fact that the 
 acts done are not within the legitimate powers of the corporation, 
 if the acts are such as come within the scope of the powers at- 
 tempted to be conferred upon the agents." The doctrine of ultra 
 vires, it is claimed, has no application in such cases, for in exe- 
 cuting such acts the corporation is liable for the direct or conse- 
 quential injuries which others may sustain for every grade and 
 description of willful, malicious, or negligent tort or wrong which 
 it commits, however foreign to its nature or beyond its legitimate 
 powers the wrongful transaction or act may be.* 
 
 ^ Id. See, also, Yarborough v. Bank for the consequences of acts of its 
 
 of England, IG East, (i ; Smith v. Bir- oflBcers, done within the scope of their 
 
 luiugham Gas Co., 1 Ad. & El. 52G ; general powers, is not affected by the 
 
 Salem Bank v. Gloucester Bank, 17 fact that the act which the officer has 
 
 Mass. 1 ; Foster v. Essex Bank, id. assumed to do is one which the corpo- 
 
 479 ; Fowle v. Common Council, etc., ration itself could not rightfully do. 
 
 3 Pet. 398. A corporation may do wrong, through 
 
 '^ Stevens v. Boston, etc., R. Co., 1 its agents, as well as a private iudi- 
 
 Gray, 277 ; Blackstock v. N. Y.,etc., R. vidual." 
 
 Co., 1 Bosw. 77; Albert v. Savings ^ j^g^ York, etc., R. Co. v. Schuyler, 
 
 Bank, 1 Md. Cli. 407; Thatcher v. 34 N. Y. 30 ; Philadelphia, etc., R. Co. 
 
 Bank. 5 Sandf. 121 ; Thompson v. Bell, v. Quigley, 21 How. 209 ; Life Ins. Co. 
 
 10 Exch. 10; 20 Eng. L. & Eq. 536; v. Mechanics' Fire Ins. Co., 7 Wend. 
 
 Bargate v. Shortridge, 5 H. L. C. 297; 31 ; Bissell v. Michigan, etc., R. Co., 
 
 31 Eng. L. & Eq. 44. 22 N. Y. 258 ; Frankfort Bank v. 
 
 ^ Id. See, also. Merchants' Bank v. Johnson, 24 Me. 490 ; Thayer v. Bos- 
 State Bank, 10 Wall. 604. See as to ton, 19 Pick. 511 ; Goodspeed v. East 
 their liability for libel, Whitfield v, Haddam Bank, 22 Conn. 630. 
 South Eastern R. Co., 1 E. B. & E. A corporation may become responsi- 
 115; S. C, 4 Jur. (N. S.j 688. ble for the publication of a libel. 
 
 * Booth V. Farmers & Mechanics' Whitfield v. South Eastern R. Co., 
 
 Bank, 50 N. Y. 396, where the court 1 E. B. & E. 115 ; 1 Redf. on Rail, 
 
 say : " The liablity of the corporation 514.
 
 LfAI'.ILITY OF C0Ul'01iATIOiV8 FOR ToKTS. 
 
 435 
 
 SkC. 2S-i. Liability of principal for acts of agent— The general 
 doctrine applicable to private corporations as well as to natural 
 persons is thus stated by Mr. Story : " It is a general doc- 
 trine of law, that although the principal is not ordinarily 
 liable (for he sometimes is) in a criminal suit,^ for the acts 
 or misdeeds of his agent, unless, indeed, he has authorized or 
 co-operated in those acts or misdeeds ; yet, he is held liable to 
 third persons in a civil suit for the frauds, deceits, concealments, 
 representations, torts', negligences and other malfeasances or mis- 
 feasances and omissions of duty of his agent, in the course of his 
 employment, although the principal did not authorize, or justify, 
 or participate in, or, indeed, know of such misconduct, or even if 
 he forbade the acts, or disapproved of them.' In all such cases 
 the rule applies, respondeat superior y for in no other way could 
 there be any safety to third persons in their dealings, either 
 directly with the principal, or indirectly with him through the 
 instrumentality of agents.^ In every such case the principal 
 holds out his agent as competent and fit to be trusted, and 
 thereby, in effect, he warrants his fidelity and good conduct in all 
 matters within the scope of the agency." * 
 
 ^ Attorney-General v. Siddon, 1 
 Tyrwh. 41 ; Rex v. Gutcb, 1 Mood. 
 & Malk. 437; Paley on Agency, by 
 Lloyd, 294-298 ; id. 303, 306 ; 3 Chitty 
 on Com. and Man. 209, 210 ; Smith on 
 Merc. Law, B. 1, chap, o § 3, p. 130 
 (3d ed., 1843). 
 
 - Chitty on Com. and Man. 208- 
 210; Paley on Agency, by Lloyd, 
 294-290, 301-307; Smithon Merc. Law, 
 70.71 (2d ed.); id. B. 1, chap. 5. §3, pp. 
 127-130 (3d ed., 1843); Story on Kg., 
 §55 130, 217, 308-310; Doe v. Martin, 4 
 Term 11. 66, per Lord Kenyon ; Bush 
 V. Steinman, 1 Bos. & Pull. 404 ; At- 
 torney-General V. Siddon, 1 Tvrwli. 
 412; Story on Ag., §i^ 31 1, 315-319; 
 Milligau V. Wedge, 12 Ad. & El. 737, 
 742 ; C^uarman v. Burnett, 6 Mees. & 
 Wels. 499; Locke v. Stearns, 1 Mete. 
 (Mass.) 5'H); Penn. Steam Nav. Co. v. 
 Hungerford, G. & J. 291. 
 
 3 Story on Agency, § 308 ; 1 Bl. 
 Cora. 431, 432; Abbott on Shipp., 
 part 2, cliap . 2, § 11 ; Ellis v. Turner, 8 
 T. R. 533 ; Bush v. Steinman, 1 B. & 
 P. 404 ; Laugher v. Pointer, 5 B. & 
 
 C. 546 ; Randleson v. Murray, 8 Ad. 
 & El. 109 ; Milligan v. Wedge, 12 id. 
 737 ; Quarman v. Burnett, 6 M. & W. 
 499 ; Rapson v. Cubitt, 9 id. 7l0 ; 
 Winterbottom v. Wright, 10 id. 
 109. 
 
 •* Story on Agency, § 452, citing 
 Lane v. Cotton, 12 Mod. 490; 
 Paley on Ag., by Lloyd, 294,301-307 ; 
 4 Bac. Abr. , tit. Master and Servant, 
 K.; Story on Ag. , ^i^ 11-13, 315 310, 
 319; Herii v. Nichols, 1 Salk. 289. 
 
 Mr. Justice BLACKSTOKE,in liis Com- 
 mentaries, gives a different reason , and 
 says: ' ' We may observe that in all the 
 cases here put the master may be fre- 
 quently a loser by the trust reposed in 
 his servant, but never can be a gainer ; 
 lie may frequently be answerable 
 for his servant's misbehavior, but 
 never can shelter himself frmn punish- 
 ment, by laying the blame on liis 
 agent. The reason of this is still uni 
 form, and the same — that the wrong 
 done by the servant is looked upon in 
 law as the wrong of the master him- 
 self ; and it is a standing maxim, that
 
 436 Private Corporations. 
 
 Sec. 285. They may do wrongful acts or direct them to be done. — 
 It is sometimes said that a corporation, being an invisible and 
 artificial person, can execute directly no act, but for this purpose 
 must employ agents. But, as we have seen, the directors at 
 a lawful meeting may direct acts to be done, and they may be 
 supposed to very closely represent, if they do not practically con- 
 stitute, the corporate body itself. And if, at such a meeting, they 
 should direct a wrongful or tortious act to be done, this would 
 undoubtedly be considered the act of the corporate person, and 
 would make the corporation liable, on the general principle that 
 a party who directs an agent or any other person to commit a tres- 
 pass, or do any other wrongful act, is responsible to the party who 
 suffers damage thereby, the same as though the act was done by 
 the party himself.^ 
 
 Sec. 286. Frauds of corporations or their agents. — A COinmon 
 cause of liability of corporations is the frauds of their agents. 
 These consist, like those of natural individuals, of actual and 
 constructive frauds. Fraud in law has been defined as any trick 
 or artifice employed by one person to induce another to fall into 
 an error, or to detain him in it, so that he makes an agreement 
 contrary to his interest. It may consist in misrepresentation or 
 concealment of a material fact.'' 
 
 Corporations are, like individuals, liable for frauds committed 
 by their agents. An illustration of liability on the part of the 
 corporation, by approval of fraudulent acts of agents, is found in 
 the answer of Lord Chancellor Westburt to the question : 
 " Under what circumstances can fraud be imputed to the corpo- 
 ration itself ? " He says : " That if reports are made to the 
 
 no man shall be allowed to make any reverse of the truth in many cases ; 
 
 advantage of his own wrong." 1 Bl. for the master is liable for the wrong 
 
 Com. 43'-J. Mr. Story comments as and negligence of his servant, just as 
 
 follows on the above quotation from much, when it has been done contrary 
 
 Blackstone's Commentaries : '' It seems to his orders and against his intent, as 
 
 to me that the reason here given is he is, when he has co-operated in, or 
 
 artificial and unsatisfactory, and as- known the wrong." Story on Ag., 
 
 pumes as its basis a fact which is the § 453, note. 
 
 1 Glasgow V. Drew, 2 Macq. 103; ''Bouv. L. Die; Mansfield v. Wat- 
 Kerr on Fraud (Am. ed.), 117 ; Sharp eon, 2 Iowa, 111. 
 V. Mayor, etc., 40 Barb. 273 ; 40 N. Y. 
 454 ; Beach v. Fulton, 7 Cow. 485.
 
 Liability of Corpokations fok Torts. 
 
 437 
 
 shareholders of a company by their directors, and these reports 
 are afterward industriously circulated, misrepresentation con- 
 tained in those reports must undoubtedly be taken, after their 
 adoption, to be the representations and statements made with the 
 authority of the company, and, therefore, binding upon the com- 
 pany." 1 
 
 And in an English case it has been held that the acts of the di- 
 rectors were the acts of the corporation. Lord St. Leonards 
 observed : " If representations are made by a company fraudu- 
 lently, for the purpose of enhancing their stock, and tliey induce 
 a third person to purchase stock these representations so made by 
 them for that purpose do bind the company. I consider rep- 
 resentations by the directors of a company as representations 
 by the company, and although they may be representations made 
 to the company, it is their own representation." * 
 
 'New Brunswick, etc., R. Co. v. 
 Coiiybeare, 9 H. L. 725; Brice's Ultra 
 Vires, 244. 
 
 ^ National Exchange Co. v. Drew, 2 
 Macq. 103. See, also. Re National 
 Patent Steam Fuel Co., Ex j)urte 
 Worth, 4 Drew. 529 ; 28 L. J. Ch. 590 ; 
 Nicol's Case, 28 L. J. Ch. 257; Kerr 
 on Fraud (Am. ed.). 117. Mr. Brice 
 observes : " Frauds form the most im- 
 portant class of torts in connection 
 with the liability of corporations, and 
 they have given rise to many compli- 
 cated and difficult questions. The re- 
 quisites to support, at common law, an 
 action for fraud are well known — 
 first, defendant, i. c, the party guilty 
 of the fraud, which is the oftenest a 
 misrepresentation, and must be as to a 
 matter of fact, must bave committed 
 the fraud knowingly, recklessly, or 
 with negligence. Taylor v. Ashton, 11 
 M. & W. 4^5. 
 
 Secondly. He must have intended 
 some other to act upon it. Thorn, v. 
 Bigland, 8 Ex. 735. 
 
 Thirdly. The plaintiff must have 
 relied upon the fraud dolus dans locum 
 contractui, Attwood v. Small, 6 CI. & 
 F. 232, though it is sufficient if there 
 was a fraudulent representation as to 
 any part of that wliich induced him to 
 enter into the contract. Kennedy v. 
 Pan;una l.oyal Mail Company, L. R., 
 2 Q. 13. 580. 
 
 Fourthly. The plaintiff must have 
 sustained damage. 
 
 " These requisites should be care- 
 fully kept in mind when fexamining a 
 case of fraud at common law whether 
 it concerns a corporation or a private 
 individual. But chancery proceeds 
 upon somewhat diflerent considera- 
 tions, often holding that to be con- 
 structive fraud whicli would afford no 
 ground for an action at law, and very 
 frequently granting to a .suitor some 
 redress when he would be utterly 
 remediless at law, as by ordering the 
 wrong-doer to recoup the plaintiff, as 
 far as he (the wrong-doer) has bene- 
 fited by the wrong. In considering 
 the question of fraud, it will be con- 
 venient to take first, frauds and mis- 
 representations which can be imputed 
 to corporations, directly and imme- 
 diately, and secondly, those which 
 can be imputed to them only indirectly 
 and by implication. 
 
 " Corporations are liable, like other 
 individuals, for frauds committed di- 
 rectly by themselves or by their direc- 
 tion. 
 
 " Not a shadow of doubt now exists 
 either at law or in chancery as to a 
 corporation's liability, where the cir- 
 cumstances are such that the fraud 
 can be imputed to the corporation 
 itself. Wlifu will this be tlie case? 
 The answer given by Lord Chancellor
 
 438 
 
 PlilVATE COEPORATIONS. 
 
 Sec. 287. Doctrine of ultra vires not applicable to torts. — We liave 
 affirmed that the corporation, either by its direct action or 
 
 Westbury,9 H, L. 725, is: 'That if 
 reports are made to the shareliolders 
 of a company by their directors, and 
 the reports are adopted by the share- 
 holders at one of the appointed meet- 
 ing.-iof the company, and tliese reports 
 are afterward industriously circulated, 
 misrepresentation contained in those 
 reports must, undoubtedly, be taken 
 aiter their adoption, to be representa- 
 tions and statements made with tlie 
 authority of the company, and, there- 
 fore, binding on the company.' Simi- 
 larly in National Exchange Company 
 of (ilasgow V. Drew, 2 Macq. 10-i, 
 Lord St. Leo:j^ards said: '1 have 
 certainly come to this conclusion, that 
 if representations are made by a com- 
 pany fraudulently for the purpose of 
 enhancing the value of their stock, 
 and they induce a third person to pur- 
 chase stock, these representations so 
 made by them for that purpose do 
 bind the company.' 
 
 "I consider representations by the 
 directors of a company as representa- 
 tions by the company, and altliough 
 they may be representations made to 
 the company, it is their own represen- 
 tation. This was explained or rather 
 restated in a subsequent case. National 
 Patent Steam Fuel Compsinj, Ex parte 
 Worth, 4 Drew, 529, by Kindkksley, 
 V. C, thus: 'It was laid down in 
 the National Exchange Company v. 
 Drew (I do not say that the point was 
 actually decided, but the opinion of 
 some of the most eminent judges of 
 the present day was expressed) that 
 where there is a body like this con- 
 sisting of a great number of share- 
 holders, and the directors make a re- 
 port to the body at large in perform- 
 ance of their duty, then, if such report 
 contain a representation of the affairs 
 of the company which is false, and if 
 that is made to a public and general 
 meeting of the shareholders of the 
 company, and is adopted by the com- 
 pany as the report of the directors to 
 tiiat general meeting, although there 
 be no order to publish it, either by the 
 directors or tlie body at large, yet, 
 from the very nature of the case, it 
 must be regarded as the representa- 
 tion of the company.' 
 
 " As illustrating the liability at com- 
 
 mon law may be mentioned Denton 
 V. Great Northern Railway Company, 
 5 E. «& B. 860. This was an action 
 against the defendant for fraudulently 
 publishing in their time-tables a train 
 which had ceased to run, whereby the 
 plaintiff who had, relying on the 
 tables, left London for Peterborough 
 with the intention of going on thence 
 to Hull by the train which, on arriv- 
 ing at Peterborough, he learned had 
 been discontinued, was put to expense, 
 and it was unanimously held by the 
 queen's bench that the defendants 
 were liable for the expenses so in- 
 curred. 
 
 " These are such frauds as are com- 
 mitted by the agents of the corpora- 
 tion in the management and furtlier- 
 ance of its business. For these frauds 
 it is now fully established at common 
 law, that the corporation is liable, pro- 
 vided the agents guilty of the frauds 
 kept within the limits of their author- 
 ity. In Barwick v. English Joint-Stock 
 Bank, L. R., 2 Ex. 259, the court of 
 exchequer chamber, on a bill of ex- 
 ceptions, held the defendants responsi- 
 ble for the fraud of their manager. 
 No objection was taken — in fact the 
 point was not even raised by either 
 the counsel or the bench — to the ac- 
 tion itself, as being against a corpora- 
 tion. It wasassumed throughout that 
 a corporation, like any other principal, 
 is liable for the acts of its agents So, 
 in Kennedy V. Panama, etc., Mail'Com- 
 pany, L. R., 2 Q. B. 580, which was an 
 action brought on the ground of mis- 
 representation in a prospectus, issued 
 by the directors to recover calls paid 
 by plaintiff, the same liability was 
 assumed as beyond all argument. In- 
 deed the judgment of the court notices 
 it only incidentally. These would not 
 be legitimate consequences if there 
 had been fraud in those acting for the 
 company. Doubtless, in such a case, 
 the company must bear all the conse- 
 quences of the fraud of those they 
 employ." 
 
 But the authorities and dicta in 
 chancery are very conflicting, if not 
 absolutely irreconcilable. On the one 
 side it is urged that the agents of a 
 corporation are its agents for carrying 
 on its operations honestly and legally,
 
 Liability of Cokporations foe Torts. 
 
 439 
 
 through its agents, may be liable for wrongs done, even where 
 the acts constituting the wrong are ultra vires, the corporate 
 authority. 
 
 and cease to be so when they act 
 fraudiilcnfly and illeji;ally. On the 
 other sid(! it is urged.with equal justice, 
 that no distinction can be drawn be- 
 tween a principal, who is merely a 
 legal entity, and an ordinary human 
 being, and that as a corporation must 
 act by agents, so like otlier principals, 
 it ought, in common fairness, to be 
 responsible for the frauds as well as 
 the other acts of these. 
 
 In support of the former view we 
 have the following : 
 
 North of England Joint-stock Bank- 
 ing Co., E-i: parte Bernard, o De Gt. & Sm. 
 283 ; Dodgson Case, 885, per Paukek, 
 V. C. : " As to the argument that Mr. 
 Bernard was induced to take these 
 shares by incorrect representations, 
 that point was taken in Dodgsou's Case, 
 and Knight Bruce, V. C, said that 
 " whatever fraud there might be, if 
 fraud there was, it was cliarged against 
 the directors, who could not be the 
 agents of the body of shareholders to 
 commit a fraud. For the same reason 
 the motion must be refused." 
 
 'Re Athenieum Life Assurance Co., 
 Ex parte Sheffield, 28 L. J. Ch. 325, 
 per Paige- Wood, V. C: " With re- 
 gard to any fraud in misrepresent- 
 ing what the deed itself was, I ap- 
 prehend nothing can be made of 
 that ; of course the representation 
 luade by the secretary could have no 
 effect at all if the deed were different 
 from what it was represented to be ; 
 for, though companies have been held 
 to be bound, in some cases, by the act 
 of all the directors acting in the due 
 execution of their powers, it has never 
 yet been held that an officer of a com- 
 pany misrepresenting the effect of a 
 deed, it being no part of his functions 
 to explain or expound that deed, could 
 release a shareholder." 
 
 Duranty's Case, 26 Beav. 268, 274, 
 per RoMiLLY, M. R.: " The directors 
 are not the agents of the company to 
 commit a fraud." 
 
 Re Hull and London Life Assurance 
 Co., Ex parte Gibson, 2 De G. & J. 275. 
 28;!, where Lord Chelmsfokd, L. C, 
 expressed himself thus : " There is no 
 doubt that if a person has been drawn 
 in by the misrepresentation of an in- 
 dividual member of the company, he 
 
 cannot exonerate himself from liabil- 
 ity by reason of such false representa- 
 tion. If he has any remedy, it is against 
 the individual sharehokler who has 
 deceived him. With respect to mis- 
 representation by the company itself, 
 or its agents, the case would be differ- 
 ent ; but there has always appeared to 
 me to be great difficulty in establish- 
 ing such a case. The company is 
 represented by its directors who, for 
 certain purposes, are its agents; but 
 the ditBcultyis in saying that they are 
 its agents for the purpose of making 
 false representations." 
 
 In re Royal British Bank, Mixer's 
 Case, 4 De (i. & J. 575, 580, Lord CIamp- 
 BEM^, L. C: "Clearly there was fraud 
 and gross fraud on the part of the di- 
 rectors, and I have no doubt that he 
 {i. <•. ,the appellant) was induced by 
 fraud to take his shares. 1 think, 
 however, that it was a fraud on the 
 part of the directors, which cannot be 
 imputed to the company." 
 
 The above cases, however, cannot bo 
 considered binding at the present time, 
 at least, not to the full extent of the 
 language employed. It would, indeed, 
 have been strange if that could have 
 continued to be deemed fraud in a 
 court of law, which chancery refused 
 to recognize as such, and if a party 
 injured by the misrepresentations of 
 the agents of a corai)any would 
 have been compelled to apply to law 
 for the relief and redress which equity 
 denied him then., Three recent decis- 
 ions of the supreme court of appeal 
 have partiallv removed this anomaly 
 and have at length determined that a 
 corporation cannot, in chancery any 
 more than at common law, shield itself 
 from liability for the frauds of thost; 
 it employs, by the absurd fiction that 
 not possessing real existence, mental 
 or bodily, the mental element inten- 
 tion, requisite to constitute fraud, is 
 wanting. 
 
 In the first of these decisions. New 
 Brunswick Railwav Land Co. v. Conv- 
 beare. 9 H. L. 725; L. J. Ch. 307, 
 Lord Ckanwohtii said : " If the di- 
 rectors, or the secretary acting for 
 them, had fraudulently represented 
 something to him ((;". <;.,the i)laintitl') 
 which was untrue, he then adhered to
 
 440 Private CoRroKATioNS. 
 
 In Sharp v. Mayor, etc.^ the court say : "The suggestion that 
 a corporation cannot be liable for a fraud committed may be cor- 
 rect as to fraud not in any way connected with, or committed in 
 the course of, and tending to carry out some power or act which 
 it is authorized to perform. * * * The principal is liable for 
 the false representations of the agent, made in and about the mat- 
 ter for which he was appointed agent, not on the ground of ex- 
 press authority given to the agent to make the statement, but on 
 the ground that as to the particular matter for which the agent is 
 appointed, he stands in the place of the principal, and whatever 
 he does or says in and about the matter for which the agent is 
 appointed is the act and declaration of the principal, for which 
 the principal is just as liable as if he had personally done or made 
 the declaration. The power of the agent to render the principal 
 liable for representations flows from his mere appointment to do 
 the act or transact the business, in and' about which the represen- 
 tations are made. * * * 
 
 Where a corporation has power to do some act, and as incident 
 to that act, to render itself liable for representations made in and 
 about the doing of that act, it can appoint an agent to do that act, 
 and from the mere fact of such appointment the same powers will 
 flow to the agent as if he had been appointed by an individual, 
 provided only, that the powers so flowing could have been exer- 
 cised by the corporation itself." And in general principles, a 
 person, who, by false and fraudulent representations and induce- 
 ments held out to him by a corporation, has been deceived and 
 misled into making a contract whereby he suffers loss, may 
 
 tlie opinion which he expressed on rescind the contract on the ground of 
 
 former cases, that the company would fraud, the misrepresentations are im- 
 
 have been bound by that fraud." putable to the company, and the pur- 
 
 In the Western Bank of Scotland chaser cannot be held to his contract, 
 
 V. Addie, L. R., 1 S. <& D. 145, Lord because a company cannot retain any 
 
 Chelmsford laid down, that " Where benefit which they have obtained 
 
 a person has been drawn into a con- throua^h the fraud of their agents." 
 
 tract to purchase shares belonging to In Oakesv. Turquand, L. R.,2 H. L. 
 
 a company by fraudulent misrepre- 325, the same judge quoted this last 
 
 sentations of the directors, and the extract, and adhered to it as being a 
 
 directors, in the name of the company, correct exposition of the liability of a 
 
 seek to enforce that contract, or the corporation for the fraud of its agents, 
 
 person who has been deceived insti- Brice's Ultra Vires, 226 ct seq. 
 tutes a suit against the company, to 
 
 ' 40 Barb. 273 ; 40 N. Y. 454.
 
 Liability of Corporations for Torts. 
 
 441 
 
 maintain an action against tlie corporation to rescind the con- 
 tract.' 
 
 OEC. 288. Frauds of agents for which the corporation is liable. — It 
 is affirmed as a general principle, that corporations are liable at 
 common law for all damages sustained by others through the 
 frauds and misrepresentations of their agents, which ai'e perpetra- 
 ted in the exercise of their employment, and within the scope of 
 the authority conferred upon them. If the agents of tlie corpo- 
 ration, in the management of the business conferred upon it, are 
 guilty of frauds, the corporation is liable for damages sustained by 
 parties induced to deal with it in consequence thereof.' 
 
 ' Henderson v. Railroad Co., 17 Tex. 
 560. See, also. Kennedy v. Panama, 
 etc., Mail Co., L. R., 2 Q. B. 580. 
 
 ^ Barwick v. Enc^lisli Joint-stock 
 Bank, L. R., 2 Ex. 259; Swift v. Win- 
 terbotham, P. O., L. R , 8 Q. B 244; 
 Kennedy v. Panama, etc., ]Mail Co., L. 
 R., 2 Q. B. 580, in which the court re- 
 marks: "These would not be legiti- 
 mate consequence.^ if there had been 
 fraud in those acting for the company. 
 Doubtless in such a case the company 
 must bear all the consequences of the 
 fraud of those they employ." 
 
 On this subject Mr. Brice says: " It 
 must not here be forgotten that in de- 
 termining whether a company can hold 
 a shareholder to the contract into 
 which by their own fraud they have 
 induced him to enter, other equities 
 have to be considered, and a totally 
 different result will be arrived at than 
 when we are examining whether that 
 person will be liable to third parties, 
 the creditors of the company, for its 
 debts. Between the company and the 
 person whom they have duped the sub- 
 ject is clear, if we put the question on 
 the simple ground that no one can be 
 allowed to retain that which he has 
 acquired by fraud, but as regards third 
 parties, such person is a de facto share- 
 holder as long as he has not, from 
 whatever cause, taken measures to 
 denude himself of his shares, and it 
 has been consequently decided that as 
 such, as a member of the company, he 
 is subject to the companv lia1)ilities. 
 Oakes v. Turquand, L. R.', 2 TI. L.S25; 
 Peek V. Gurney, L. R., 13 Eq. 79; 
 Pawle's Case, L. R., 4 Ch. 497. 
 56 
 
 "Moreover, it isonly the party orig- 
 inally defrauded, with perhaps excep- 
 tions arising in very special cases, who 
 can repudiate the contract. For in- 
 stance, a person who buys shares from 
 one who could have repudiated these 
 shares as having been issued to him 
 under circumstances of fraud, cannot, 
 on the ground of the original fraud, 
 have such share canceled. Duraniv, 
 26 Beav. 268; Grisewood Case. 4 De (i. 
 & J. 544. At common law an action of 
 deceit may be brought at any time 
 against a corporation as against a pri- 
 vate individual, till the plaintiff's 
 right is barred by the statute of limi- 
 tations, but it is different when a share- 
 holder seeks the relief of the court of 
 chancery. A contract induced by fraud 
 is voidable, not void, and the injured 
 party will be deemed to have acqui- 
 esced i;nless he displayed ordinary 
 precautions and care at the making of 
 the contra<^t, and has been prompt in 
 appealing to the court on discovering 
 the fraud. Deposit and General Life 
 Assurance Company v. Ayscough, E. 
 & B. 761 ; Clark v. Dickson, 27 L. J., 
 Q. B., 22:5; Scholev v. Central K. Co., 
 L. R., 9 Eq. 266; "Hevmann v. Euro- 
 pean C. R. Co., L. R.,7 Eq. 154; 28 L. 
 J. Ch. 257 ; In re Reese River S. M 
 Co.; Smith v. Reese, L. R., 2 Eq. 264; 
 Central R.Co.v. Kisch.L. R.,2H. L.99. 
 
 " We may thus summarize the au- 
 thorities: 
 
 "I. At law: 
 
 "However the fraud be committed, 
 if it can be imputed to the corporation, 
 whether directly or indirectly, an ac- 
 tion for fraud may be brought against
 
 442 
 
 Private Corporations. 
 
 Sec, 2S9. Fraud, etc, of directors — If the constating instrument 
 confers iii:»on the board of directors all the powers of manage- 
 ment and control of the corporate business, which would, with- 
 out some special provision, vest in the corporate body, such board 
 practically represents the corporation, and, as an agent of the 
 corporation, its power is limited only by the powers conferred 
 upon the corporate body. They are the managing officers and 
 tlie only direct medium of communication between the corpora- 
 tion and other parties ; and from their peculiar relations to the 
 corporate body may, for all practical purposes, be treated as the 
 body itself.' Hence, any fraud or material misrepresentations of 
 the corporate business or the condition of the company, by them 
 or by their authorized agents, by which third parties relying upon 
 them sustain damage, would make the corporation liable for the 
 loss sustained thereby, the same as tliough it were a private person." 
 
 And a bank is liable for tlie fraud or mistakes of its clerks, 
 cashiers or other officers, consisting of errors or false accounts in 
 
 tlie corporation for the damage thereby 
 caused. 
 
 "II. In chancery : 
 
 " 1. If the fraud be imputable to the 
 corporation directly, that is, if it has 
 been done or ratified by tbe share- 
 liolders in general meeting, then the 
 corporation is liable for the conse- 
 quences resulting therefrom. 
 
 "3. If it be imputable only indi- 
 rectly, thfen the corporation can neither 
 take advantage of the fraud nor re- 
 tain, against tbe wish of the injured 
 party, any benefits that may have ac- 
 crued to it (the corporation) from such 
 fraud. But the person aggrieved may, 
 at his election, confirm or repudiate 
 the transaction. 
 
 "3. It seems that the corporation can- 
 not, by any proceedings in chancery, 
 be rendered liable for damages resu'lt- 
 
 1 Perkins v. New York, etc., E. Co., 
 24 N. Y. 213 ; Lee v. Village of Sandy 
 Hill, 40 id. 451. 
 
 "Brokaw v. New Jersey, etc., R. 
 Co., 33 N. J. L. 381, where it was held 
 that tlie corporation was liable for the 
 frauds of the agent where lie acted 
 within the a})pareut scope of his au- 
 thority. McCiellan v. Scott, 9 Wis. 
 81, where it was held that the corpo- 
 
 ing from fraud imputable to it indi- 
 rectly. 
 
 " If the limitation last inentioned be 
 correct, then it follows that in future 
 corporations will not be liable at law 
 for indirect fraud, since the supreme 
 court of judicature act of 1873 ex- 
 pressly provides that where the rules 
 of law and equity conflict, those of 
 equity are to prevail. 3(3 and 37 Vict., 
 chap. 66, § 2l). 
 
 " This result — the holding corpo- 
 ration not liable for the frauds of their 
 agents, will cause a considerable qual- 
 ification of the law as at present ex- 
 isting of principal and agent, and it 
 will be a strange exemplification of 
 the unexpected etfects produced 
 by sweeping legislative enactments 
 passed without a due consideration of 
 the matters affected thereby." 
 
 Brice's Ultra Vires, 238 et seq. 
 
 ration was liable for misrepresen- 
 tations of the agent as to the pecun- 
 iary condition of a railroad company. 
 Admissions and declarations of an 
 agent of a corporation have the same 
 effect and are useful as evidence in 
 the same way against the corporation, 
 as though made by natural persons. 
 Henderson v. Eailroad Co., 17 Tex. 
 500.
 
 Liability of Comporations foh Torts. 443 
 
 the books of the corporation, made by them, or for refusing to 
 allow a person entitled thereto to subscribe for or transfer stock.' 
 
 Sec. 200, Particular acts of fraud by agents. — AuiOUg the most 
 common acts of fraud perpetrated by agents are those which con- 
 sist of misrepresentations in soliciting subscriptions to the stock 
 of the company, not only verbally made, but by means of circu- 
 lars and other papers, wdiicli are not only extravagant, but false. 
 But in such cases, in order to entitle a party to recover damages 
 sustained thereby, or to set aside the contract, it must be made to 
 appear that the party seeking to take advantage of sncli fraud 
 used due diligence in the matter, and relied upon such false and 
 fraudulent misrepresentations in making the contract, and that 
 the misrepresentations related to matters materially affecting the 
 value and success of the enterprise in which the corporation was 
 engaged. And a mere commendation of the company or of its 
 objects, or an expression of opinion as to its success, or of the 
 dividends it would earn, would not be sufficient, either to base an 
 action for damages or to set aside the contract on the ground of 
 fraud." And if the subscriber has, for a long time, acquiesced in 
 his contract with the corporation, or if, by his laches, he has 
 induced the belief that his subscription is genuine, and especially 
 if the rights of creditors, or other persons acting bona fi<le, 
 are involved and must be prejudiced if the subscription is not sus- 
 tained, the subscriber will not be relieved.' And, under similar 
 
 ' Union Bank v. McDonongb.SLa 63; Oregon, etc., R. Co. v. Scoggin, 3 Oreg. 
 
 Ware V. Barataria Canal Co., 15 id. 169. 161. But it is not competent as evi- 
 
 '■^ See, on these propositions, Hughes dence, to prove dechirations made hy 
 
 V. Antietam Manuf. Co. , 34 Md. 316 ; the agent in his spet^ches and remarks 
 
 Vawter V. Ohio, etc., R. Co., 14 Ind., in ol)taining subscri[itions, as to tlie 
 
 174 ; Johnson v. Crawfordsville, etc., location of the road, the subscription 
 
 R. Co., 11 id. 280; Brownlee v. Ohio, being unconditional. On the question 
 
 etc., R. Co., 18 id. 68; Carey v. Cinciu- of proper evidence, in such cases, see 
 
 nati, etc., R. Co., 5 Iowa, 357 ; Waldo v. Buffalo, etc , R. Co. v. Dudley, 14 N. 
 
 Chicago, etc. ,R. Co., 14 VVis. 575; Fogg Y. 336 ; Thigpen v. Mississippi, etc., R. 
 
 V. Gritiin, '3 Allen, 1 ; Litchfield Bank Co., 32 Miss. 347 ; Vicksburgh, etc., 
 
 V. Peck, 29 Conn. 384; Kelsey v. R. Co. v. McKean, 12 La. Ann. 638; 
 
 Northern Light Oil Co., 54 Barb, 111 ; Mississippi, etc., R. Co. v. Cross, 20 Ark. 
 
 S. C, 45 X. Y. 505; Ri%'e9 v. Mont- 443; Piscataqua Ferry Co. v. Jones, 39 
 
 goniery, etc., R. Co., 30 Ala. 92 ; Hen- N. H. 491 ; Connecticut, etc., R. Co. v. 
 
 derson v. Railroad Co., 17 Tex. 560; Bailey, 24 Vt. 477 ; Kennebec, etc., R. 
 
 Mississippi, etc., R. Co. v. Cross, 20 Co. v. Waters, 34 Me. 369. 
 Ark. 443; Wight v. Shelby, etc., R. "Blodgett v. Morrill, 20 Vt. 509; 
 
 Co., 16 B. Monr. 5 ; Nugent v. Cincin- O^ilvMe v. Knox Ins Co , 22 How. 380 ; 
 
 nati, etc., R. Co., 2 Dis. (0.) 302 ; Upton v. Hansbrough, 3 Biss. 417.
 
 444 Private Corporations. 
 
 circumstances, a subscriber will not be relieved of his subscription 
 on the ground of misrepresentations made by the agent, that he 
 has authority to and will release the subscription, as it is unrea- 
 sonable for the subscriber to presume that the agent has such 
 authority.' 
 
 Sec. 291. Doctrine, where the corporation is the occasion of a loss by 
 the fraudulent act of a servant.— The familiar maxim in equity, that 
 where one of two innocent parties must suffer a loss by the acts 
 of another person, he should bear the loss who has enabled such 
 person to occasion it, is as applicable to corporations as to natural 
 persons. Thus, in the application of this maxim, coi-porations 
 have been held responsible for the fraudulent acts of their offi- 
 cers in over-issuing stock ; and, for the acts of cashiers and tellers, 
 in falsely certifying checks, etc., as such agents and officers are, 
 by the corporation, held out to the community as the proper par- 
 ties to perform these acts and to furnish information in reference 
 to such matters." 
 
 Where a paying teller of a bank, on which a check was drawn, 
 certified the same to be good, although his authority to certify in 
 that way was limited to cases where the bank had funds of the 
 drawer in hand sufficient to cover the check, it was held that a 
 hona fide holder for value of such check could enforce payment 
 of the same against the bank, altliough the drawer did not have 
 such funds ; and tliat this liability existed, even though the certifi- 
 cate by the teller was in violation of his duty, and for the mere 
 accommodation of the drawer, and made upon his promise that it 
 should never be presented for payment.' In the case above 
 referred to, Selden, J., in the ISTew York court of appeals, ob- 
 serves : " The act of certifying a check is simply answering the 
 supposed inquiry, of one about to take the check, whether the 
 bank has funds of the drawer to meet it ; and no other officer or 
 
 1 Custer V. Titusville Gas, etc., Co., 497 ; Barnet v. Smith, 30 IST. H. 256 ; 
 63 Penn. St. 381 ; Litchfield Bank v. Meads v. Merchants' Bank, 25 N. Y. 
 Peck, 29 Conn. 384 ; Railroad Co.. v. 143 ; New York, etc., R. Co. v. Scliuv- 
 Rodrigues, 10 Rich. (S. C.) 378. ler, 34 id. 30 ; Irvine Bank v. Wether- 
 
 2 Lickbarrow v. Mason, 2 T. R. 63; aid, 3^5 id. 335; Griavvold v. Haven, 
 Merchants' Bank v. Stale Bank, 10 25 id. 596. 
 
 Wall. 604 ; Uirard Bank v. Bunk, etc., ^ Fanners and Mechanics' Bank v. 
 
 39 Penn. St. 92 ; Roniida v. Smith. 42 Butchers and Drovers' Bank, 16 N. Y. 
 
 Ill 245; Bickford v. First National 125; S. C, 28 id. 425. 
 Bank, id. 238 ; Brown v. Leckie, 43 id.
 
 LiABiLTiY OF Corporations for Torts. 445 
 
 agent of the bank would seetn to be so competent to give an 
 answer as the paying teller. He is charged with all he pays out, 
 and if he ]jays a check without funds in hand, he is responsible 
 to the bank for the amount. His knowledge exceeds that of the 
 book-keeper, because to the information obtained from the latter 
 he adds a knowledge whether any deposits have been made or 
 cheeks paid since the last entry in the books. No doubt the 
 cashier, by virtue of his general powers, and his presumed knowl- 
 edge of the affairs of the bank, would bo competent to answer 
 the question ; but he could only do so by first inquiring of the 
 book-keeper and teller. Why should the applicant be compelled 
 to seek the information through this circuitous channel, instead 
 of going directly to the ultimate source of knowledge on that sub- 
 ject. The teller is put in the place of the cashier, to perform a 
 portion of his duties. His appointment is virtually a division of 
 the office of cashier ; and that branch of the office which the 
 teller fills embraces those duties which particularly require a 
 knowledge of the state of the accounts of the depositors. Why 
 then should he not be the organ of coniniiinication on that sub- 
 ject? * * * To certify a check when the bank has no funds 
 to meet it, is to make a false representation; and neither the inci- 
 dental power of the cashier, nor a general power conferred upon 
 any other officer could be construed to authorize that. Hence, if 
 a bank is holden, in any case, upon a certificate of its cashier that 
 a check is good when it has no funds of the drawer, it is not 
 because the cashier is deemed authorized to make such a certifi- 
 cate, but because the bank is bound by his representation, not- 
 withstanding it is false and unauthorized."^ 
 
 Sec. 292. Corporations enjoying the benefits of contracts secured 
 through the frauds of agents will be responsible for such frauds. — It is a 
 general principle, applicable alike to corporations as to private 
 persons, that the principal cannot enjoy the benefit of a contract 
 
 ' See, also, Butler v. Watkina, 13 chaser was deceived, it was held that 
 
 "Wall. (U. S.) 4o6 ; North River Bank the principal was liable. Lord Holt 
 
 V. Ayinar, 3 Hill, 262 ; Hern v. Nichols, observing : " Seeing somebody must 
 
 1 Salk. 289 ; in which case the agent be a loser by this deceit, it is more 
 
 was authorized to sell a quantity of reasonable that he that employs and 
 
 silk, and had made certain fraudulent puts a confidence in a deceiver should 
 
 representations, by which the pur- be a loser rather than a stranger."
 
 44:6 PkIVATK CoBl'OliATIONS. 
 
 secured by the fraudulent representations or acts of its agents 
 without at the same time incurring tlie responsibility of such 
 frauds. They cannot ratify and enjoy the fruits of a contract 
 and avoid responsibihty for fraudulent representations which 
 induced the making of the contract by the other party. On this 
 subject Mr. Story observes: " Where the principal, upon a full 
 knowledge of all the circumstances of the case, deliberately rati- 
 fies the acts, doings or omissions of his agent, he will be bound 
 thereby as fully to all intents and purposes as if he had originally 
 given him direct authority in the premises to the extent which 
 such acts, doings or omissions reach." ^ 
 
 Sec. 293. Rule in England. — The same doctrine has been held 
 by the English courts. Thus, in the case of The Western Bank of 
 Scotland n. Addie^ Lord Chelmsford said : " Where a person 
 has been drawn into a contract to purchase shares belonging to a 
 company by the fraudulent representations of the directors, and the 
 dii'ectors, in the name of the company, seek to enforce that con- 
 tract, or the person who has been deceived institutes a suit against 
 the company to rescind the contract on the ground of fraud, the 
 misrepresentations are imputable to the company, and the purchaser 
 cannot be held to his contract, because the company cannot retain 
 any benefit which they have obtained through the fraud of their 
 agents." ^ But it has been held that stockholders, who have been 
 induced to become such by fraudulent statements in relation to 
 the condition of the company, must take the earliest oj)portunity 
 after a discovery of the fraud to repudiate the contract, and they 
 cannot, as we have already noticed, unreasonably delay until the 
 
 1 Story on Agency, § 239. The 353 ; Hartshorn v. Day, 19 How. 211 ; 
 
 maxim of the common law is omnis Dorr v. Muusell, 13 Johns, 430 ; Cliam- 
 
 ratilutbitio retrotrdhitur, et mandato piou v. White, 5 Cow. 509 ; Hazard v. 
 
 priori (Bquiparatur. Concord Bank v. Dav, 18 Pick. 95; Dobson v. Pearce, 
 
 Uregg, 14 N. H. 331 ; Paley on Ag. by 12 'N. Y. 156 ; Despard v. Walbridge, 
 
 Lloyd, .324 ; Smith on Merc. L. 47; 15 id. 374; Weed v. Chase, 55 Barb, 
 
 Odiorue v. Maxcy, 13 Mass. 178; 534 ; Marsh v. Falker, 40 N. Y. 562 ; 
 
 Pratt V. Putnam, id. 361 ; Fisher v. Craiij v. Ward, 3 Keves, 387; Lefier 
 
 Willard, id. 379; Boynton v. Turner, v. Field, 52 N. Y. 621; Dubois v. 
 
 id. 391 ; Copeland v. Merchants' lus. Hermance, 56 id. 673. 
 Co., 6 Pick. 198 ; Conn. v. Penn. 1 ^ [^ r^ y p ^Sj D. 145. 
 Pet. (C. C.) 498; Den v. Wright, id. ^ gge, also, Oakes v. Turquand, L. 
 
 72 ; Breedlove v. Waraack, 2 Mart. R., 2 H. L. 325, 334 ; Barry v. Croskey, 
 
 (La. N. S.) 181 ; Buchanan v. Upshavy, 2 J. & H. 1 ; Peck v. Gurney, L. R., 6 
 
 1 How. 56 ; S. C, 17 Pet. 70 ; Crump H. L. 377, 390. 
 V. United States Mining Co., 7 (irait.
 
 LlABILITV OF COKPORATIONS FOR T0ET8. 
 
 447 
 
 rights of creditors have supervened, and then if the corporate 
 enterprise proves unsuccessful and losses must be sustained, avoid 
 the contract of subscription so as to prejudice the rights of cred- 
 itors, who had a right to rely upon the subscriptions. As between 
 the corporation itself and the subscribers where no intei'ests of 
 third persons are concerned, the right to repudiate a subscription 
 obtained by the fraud of the company is clear, but it may be quite 
 diiferent as to the rights of third parties.^ 
 
 1 Oakes v. Turquaad, L. II., 2 II. L. 
 325; Peck v. (iuiney. L. K., IS 
 Eq. 79 ; Upton v. Hausbrough, 6 Biss. 
 417 ; Gloucester Bank v. Salem Bank, 
 
 17 Mass. 'Sd ; Kelsey v. Northern Liglit 
 Oil Co., 4o N. Y. 505 ; Ex parte Booker, 
 
 18 Ark. S'SS ; Merchants' Bank v. State 
 Bank, 10 Wall. 604; Butler v. 
 Walkins, 1.'5 id. 456; Deposit, etc., 
 Assurance Co. v. Avscough, 6 E. & B. 
 761 ; 26 L. J. Q. B. 29 ; Clarke v. Dick- 
 son, 37 id. 223 ; Scholev v. Central, 
 etc., R. Co., L. R., 9 Eq. 266; Hey- 
 maun v. European, etc., R. Co., L. R., 
 7 Eq. 154. 
 
 On this subject Mr. Brice observes : 
 " In Barwick v. The English Joint- 
 stock Bank, L. R., 2 Ek. 259, the ex- 
 chequer chamber held unanimously 
 and in the most unqualified manner 
 that an action for fraud lies against a 
 corporation as against any private in- 
 dividual, whether the fraud be that of 
 the principal directly or of the agents 
 employed, provided only that the lat- 
 ter are acting within the ordinary 
 scope of their occupation. But in 
 Western Bank of Scotland v. Addie, 
 L. R.. 3 H. L. 325, the lord chancel- 
 tor said : ' But if the person, who has 
 been induced to purchase shares by 
 the fraud of the directors, instead of 
 seeking to set aside the contract, pre- 
 fers to bring an action for damages for 
 the deceit, such an action cannot be 
 maintained against the company, but 
 only against the directors personally.' 
 To the same effect was the decision of 
 Lord Gran WORTH, L. R., 1 S. & D. 
 167 ; 1 J. & H. 1 ; Peek v. Gurney, L. 
 R., 6 H. L. 370. An attentive con- 
 sideration of the case has convinced 
 me that the true principle is, that 
 tliese corporate bodies, through whose 
 agents so large a portion of the busi- 
 ness of the country is now carried on, 
 
 may be made responsible for the 
 frauds of those agents to the extent to 
 which the companies have i)rofited 
 from these frauds, but they cannot be 
 sued as wrong-doers, by imputing to 
 them the misconduct of those whom 
 they have employed. A person de- 
 frauded by directors, where the sub- 
 sequent acts and dealings of the par- 
 ties have been such as to leave him 
 no remedy but an action for the fraud, 
 must seek his remedy against the di- 
 rectors personally.' 
 
 " Most of the cases, however, which 
 have come before courts of equity, 
 have arisen from the attempts of per- 
 sons who, induced by liowery prospect- 
 uses and glowing reports, have taken 
 shares, to get themselves relieved from 
 their responsibilities upon the state- 
 ments put forth, and relied on by 
 them turning out incorrect. In all 
 such cases, if the fraud be imputable 
 to the corporation and the injured 
 party has not debarred himself by 
 laches, relief will be granted. 
 
 " Conybeare v. New Brunswick, 
 etc.. Land Company, 9 H. L. 711 ; 31 
 L. J. Ch. 297, 1 Dr. & M. 363 ; L. R., 
 3 Ch. 682, is a leading authority. 
 Here the house of lords, reversing the 
 decision of the lords justices, decided 
 that the plaintiff was not entitled to 
 have his name removed from the list 
 of shareholders, on the grounds, first, 
 that there had not been any conceal- 
 ment, inasmuch as an act of parlia- 
 ment, the absence of which, from a 
 certain report published by the com- 
 pany, was the concealment alleged, 
 was recited on the articles of associa- 
 tion, which he (plaintiff) must be held 
 to have perused, and, secondly, that 
 the misrepersentation complained of, 
 thus stated in the bill : ' The said re- 
 port of July, 1S58, referred to the lands
 
 448 
 
 Private Corporations. 
 
 Tlic doctrine univ^ersally recogiiizud in snch cases is tluit the 
 contract is voidable only, and hence tlie party entitled to avoid it 
 must be prompt in the exercise of his right in this respect ; and 
 he cannot, by his delay, induce innocent third parties to suppose 
 the contract a binding one, and entice them into contracts on the 
 strength of such subscriptions, and afterward take advantage of 
 it to the prejudice of creditoi's or other third parties. 
 
 of the said compauy in terms calcu- 
 lated to convey to the mind an impres- 
 sion that sucli lands were the absolute 
 and indefeasible property of the com- 
 pany,' was not a representation but an 
 inference that was left to be drawn 
 from the expressions used in the re- 
 port. Their lordships, however, threw 
 in doubt the liability of a corporation 
 for frauds which can be imputed to 
 itself directly. The general tenor of 
 their judgments is well expressed in 
 the foot note on the House of Lords 
 l^eports, viz. : ' If reports are made to 
 the shareholders of a company by their 
 directors, and the reports are adopted 
 by the shareholders and afterward in- 
 dustriously circulated, representations 
 contained in those reports must be 
 taken to be representations made with 
 the authority of the company, and, 
 therefore, binding the company ; and 
 if those reports having been industri- 
 ously circulated be clearly shown to 
 have been the proximate and imme- 
 diate cause of shares having been 
 bought from the company, the com- 
 pany cannot be permitted to retain the 
 benefit of the contract, and keep the 
 purchase-money that has been paid, 
 liepresentations made by the secretary 
 to a person in a general conversation, 
 without a view to any definite state- 
 ment by that person tliat he wants to 
 purchase shares, are not binding on 
 tlie company.' 
 
 Another very recent case is that of 
 Central Railway Company of Vene- 
 zuela Limited v. Kisch, L. R., 2 H, L. 
 99. The defendant, the original 
 plaintiff, filed a bill to have his name 
 removed from the list of shareholders 
 in the railway and to have the pay- 
 ments he had made on account of calls 
 returned him. He had taken the shares 
 on tlie faith of a prospectus which re- 
 ferred to a concession made by the 
 Venezuelan government to the com- 
 pany for making a railway, and stated 
 
 that the contractor had guaranteed a 
 dividend of 2^ per cent on the paid-up 
 capital, during the construction of the 
 works,while,in fact, this guarantee was 
 limited to £30,000, and that the con- 
 tract had been entered into ' at a price 
 considerably within the available capi- 
 tal,' when in reality — on account of 
 the company having paid £50,000 for 
 the concession, which payment was 
 not mentioned in the prospectus, and 
 which concealment the defendant al- 
 leged as a ground of ccnnplaint, it left 
 but a margin of £30,000 out of 
 £50,000. On these grounds of misrep- 
 resentation and concealment, and more 
 especially of the latter, the house of 
 lords granted the relief prayed. 8o, 
 in many other cases, shareholders 
 have been relieved of their shares on 
 the ground that they were induced to 
 take them by misrepresentation, the 
 false statements being on one occasion 
 with respect to the capital subscribed 
 or shares taken ; Ross v. Estates In- 
 vestment Company, L. R., 8 Ch. 682 ; 
 L. R., 5 Eq. 249 ; upon another, as to 
 the nature of the business to be under- 
 taken; Blackburn's Case, 3 Drew. 409 ; 
 or as to the value; Reese River Mining 
 Co. v Smith, L. R., 4 H. L. 64; 
 Denton v. Macneil, L. R., 2 Eq. 352 ; 
 or locality, Lawrence Case, L. R., 2 
 Ch. 412 ; L. R., 1 Ch. 575, of property 
 already or to be thereafter acquired by 
 the company. In a word, misleading 
 facts of any description, material to 
 the contract to take shares, and actu- 
 ally the inducement to such contract, 
 render such contract voidable on the 
 part of the person so induced to enter 
 into the same, always providing that 
 the misleading facts in question were 
 promulgated by the company itself or 
 its duly authorized agents. Frowd 
 case, 3*0 L. J. Ch. 322; Burnes v. 
 Penne, 2 H. L. 497." Green's Brice'a 
 Ultra Vires, 255-8.
 
 Liability of Corporations for Torts. 449 
 
 Sec. 294. Right to repudiate a contract for fraud limited to original 
 parties. — The right to repudiate a contract for stock on the ground 
 of fraud is limited to the party contracting for the same with the 
 company. But if such holder of stock, even where the subscrip- 
 tion has been obtained by fraud of the corporation, and where for 
 such fraud the subscriber might have the contract set aside, still, 
 if he transfers such stock to another, the purchaser cannot, as such 
 stockholder, set aside the original contract on the ground of the 
 fraud. ^ 
 
 But it may be observed that a right of action, even for a tort, 
 may now, under the provision of the statutes of many, if not 
 most of the states, be assigned so as to entitle the assignee to 
 maintain an action in his own name for the damages sustained by 
 the assignor thereby. 
 
 Sec. 295. Ratification of the contract effected by the fraud of the agent 
 
 We have had occasion to notice the effect of the ratification of 
 contracts made by agents in the name of the corporation, where 
 they exceed the authority conferred upon them ; "^ and the same 
 general principles are applicable, not only where the ratification 
 is of unauthorized contracts, but also of unauthorized torts. " In 
 all cases," observes Mr. Story, "if the principal subsequently rati- 
 fies the act he is bound by it, whether it be for his detriment or 
 for his advantage ; and whether it be founded upon tort or upon 
 a contract. And a ratification once deliberately made, Avith full 
 knowledge of all the material circumstances, cannot be recalled." " 
 But in case of ratification, as before observed,* it cannot be of a 
 part of the unauthorized or tortious act. If the princij)al adopts 
 it he must adopt the whole or none. And if he ratifies at all, it 
 operates as a ratification of the whole. But this rule, in reference 
 to torts in particular, must be received with the qualification that 
 the ratification is made with a full knowledge of the facts and all 
 
 ' Daranty's Case, 26Beav. 268 ; Oris- 173, 334, and note ; Wilson v. Poulter, 
 
 wold's Case, 4 De G. & J. 544 ; Peck 3 Str. 859 ; Taylor v. Plumer, 3 M. & 
 
 V. Guruey, L. R., 13 Eq. 79 ; Cross v. S. 5^2 ; 1 Liv. on Ag. 44-53 ; Rogers 
 
 Sackett, 3 Bosw. 617. v Kueeland, 10 Wend. 218 ; Lench v. 
 
 - Story on Agency, § 243. See, also, Leucli, 10 Ves. 517 ; Kelley v. Mun- 
 
 Lucena v. Crawford, 5 B. & P. 369; son, 7 Mass. 319. 
 
 Roiitli V. Thompson, 13 East, 274 ; ^ Story on Agency, § 250 and notes. 
 Paley on Ag., by Lloyd, 112-115, 171, '•See Story on Agency, § 253 et seq. 
 
 57
 
 450 Pbivate Corporations. 
 
 the material circumstances relating to it ; iu which case it becomes, 
 eo instantly obligatory upon the principal, and cannot afterward 
 be revoked. 
 
 Sec. 296. Ratification of torts. — In cases of contracts secured by 
 the fraud of corporate agents if, after knowledge of the fraud, 
 the corporation still insists upon the benelit of the contract thus 
 secured, it is evident that it would be liable not only for damages 
 thereby sustained, but that the other party might have the con- 
 tract set aside and canceled, for that reason. We have ah-eady 
 considered, in treating of agents, the acts and circumstances which 
 would be evidence of ratification.^ And we have also considered 
 the personal liability of corjjorate agents in cases where they ex- 
 ceed their authority in making contracts, and also in cases of torts 
 not only to the corporation but to parties injured thereby. 
 
 Sec. 297. Corporate liability for other wrongs. — Having consid- 
 ered the liability of corporations for the frauds of itself and its 
 agents, we will now proceed to consider its liability for other torts. 
 In this respect it may be affirmed that a corporation may be liable 
 in all cases for torts committed, by its direction or approval, the 
 same as a natural person. It will be liable for the tortious acts of 
 its servants or agents committed while engaged in the course of 
 his duties and within the scope of the authority conferred upon 
 them, either express or implied, and whether such acts come 
 within the designation of forcible, negligent, malicious or fraud- 
 ulent torts.^ Much doubt has been experienced by the courts 
 whether a corporation could be made liable for a tort committed 
 
 ' See Story on Agency, § 253 ei seq. want of skill of its agents in con- 
 
 '^ State V. Morris, etc., R. Co., 3 Zabr. structing public works, see City of 
 
 367 ; Brokaw v. New Jersey, etc., R. Dayton v. Pease, 4 Ohio (N. S.), 80. 
 
 Co., 33 N.J. L. 328 ; Albert v. Savings On the subject of liability of a cor- 
 
 Bank, 1 Md. Ch. 407; Thatcher v. Bank, poration for fraud, negligence or mis- 
 
 5 Sandf. 121 ; Thompson v. Bell, 10 takes of agents, see Salem Bank v. 
 
 Exch. 10; Bargate v. Shortridge, 5 Gloucester Bank, 17 Mass. 1 ; Glouces- 
 
 H. L. Cas. 297; National Exchange ter Bank v. Salem Bank, id. 33; Manhat- 
 
 Co. V. Drew, 32 Eng. L. & Eq. 1 ; tan Co. v. Lydig, 4 Johns. 377 ; Bank 
 
 Stevens v. Boston R. Co., 1 Gray, 277 ; of Kentucky v. Schuylkill Bank,l Pars. 
 
 Blackstock v. New York, etc., R. Co., Sel.Cas. 248; Ware v. Barataria Canal 
 
 1 Bosw. 77. Co., 15 La. 168 ; Union Bank v. McDon- 
 
 As to liability of municipal corpora- ough, 5 id. 63 ; Johnson v. South 
 
 tions for injuries resulting from a Western R. Bank, 3 Strobh. Eq. 263 ;
 
 Liability of Corporations for Torts. 
 
 451 
 
 by its officers or agents in the line of their duty where the gist of 
 the action is maUce, and many conflicting decisions upon this 
 question are to be found in the reports. But whatever may 
 
 Crump V. U. S. Miu. Co., 7 Gratt. 353 ; 
 Commercial Bank v. TTnion Bank, 11 
 N. Y. 203 ; Beers v. Housatouic R. 
 Co., 19 Conn. 566 ; Bradley v. Boston 
 R. Co., 2 Cush. 589 ; Baltimore K. Co. 
 V. Woodruff, 4 Md. 242; Sharrod v. 
 London R. Co., 4 Excli. .585 ; Gillen- 
 water v. Madison R. Co., 5 Ind. 339 ; 
 Marlatt v. Levee Steamboat Cotton 
 Co., 10 La. 583 ; Memphis v. Lasser, 9 
 Humph. 757 ; Green v. London Gen. 
 Omnibus Co., 7 C. B. (N. S.) 290. 
 
 What has been said with regard 
 to fraud will apply with proper quali- 
 fications to other torts. Corporations 
 are not created — it is no part of their 
 business — to commit torts. Neverthe- 
 less courts of law have decided that 
 they must be held liable for torts com- 
 mitted by their agents and servants 
 acting within their authority upon 
 the same principles and by precisely 
 analogous reasoning as they have been 
 made responsible for fraud. Thus, 
 an action for trespass to the person, 
 Seymour v. Greenwood, 7 H. & N. 
 355 ; 30 L. J. Ex. 327 ; Limpus v. Lon- 
 don General Omnibus Company, 1 H. 
 &C. 526; Goff V. Great Nortliern Ry. 
 Co., 30 L. J. Q. B. 148, or the property, 
 e. g., trover, Tattan v. Great Western 
 Railway Company, 29 L. J. Q. B. 184 ; 
 Mears v. London and South Western 
 Railway Company, 11 C. B. (N. S.) 850 ; 
 31 L.J. C. P. 220, will lie against a 
 corporation as against an individual. 
 The agent of a corporation must, of 
 course, be acting within his authority 
 and upon this point difficult questions 
 arise as to tlie extent of the agent's au- 
 thority and more especially of his im- 
 plied authority. In Edwards v. London 
 and North Western Railway Company, 
 L. R., 5 C. P. 445, it was decided that a 
 fireman porter in the service of a rail- 
 way company who, in the absence of 
 the station-master, is in charge of a 
 station, has no implied authority to 
 give in charge a person whom he sus- 
 pects to be stealing the company's 
 property, and consequently that if he 
 gives in charge on such suspicion an 
 innocent person, the company are not 
 liable. In Allen v. London and South 
 
 Western Railway Company, L. R., 6 
 Q. B, 65, a similar decision was come 
 to with regard to the arrest, by direc- 
 tion of a ticket distributor, of an in- 
 nocent person whom he had suspected- 
 wrongly of an attempt to rob tiie till. 
 The jury found that the ticket dis- 
 tributor acted in defense of the com- 
 pany's property, but the court unani- 
 mously held, that he had no implied 
 authority from the company to order 
 the arrest, and that consequently tlie 
 company were not liable for the same. 
 In this case, as in the former, the court 
 thought that the respective officials 
 concerned had an implied authority 
 to take such proceedings only as were 
 imperatively demanded for the imme- 
 diate protection of the property under 
 their charge; and that the moment any 
 attempt to injure or steal sucli prop- 
 erty was abandoned, this implication 
 ended any steps that they might then 
 direct, not being called for, for such pro- 
 tection would be of their own motion 
 and at their own peril . Lex ita scrijyta. 
 What a corporation cannot do ita 
 agent cannot do so as to bind it. From 
 this it necessarily follows that there 
 can be no authority to an agent, im- 
 plied or otherwise, to take proceedings 
 which would be ^iltra vires of the cor- 
 poration ; and that the corporation 
 cannot in any way be made amen- 
 able for torts committed by one of 
 their servants in the course of such 
 proceedings. This is well shown by 
 the case of Poulton v. London and 
 South Western Railway Company, L. 
 R., 2 Q. B. 534. The facts were these, 
 the plaintiff, who had taken a horse to 
 an agricultural show, oy the defendant's 
 railway, was entitled, under arrange- 
 ments advertised by the defendants, to 
 take the horse back free of charge on 
 the production of a certificate. The 
 plaintiff, accordingly, produced a cer- 
 tificate and the horse was put into a 
 box without payment or booking, and 
 the plaintiff having taken a ticket for 
 himself, proceeded by the same train. 
 At the end of the journey the station- 
 master demanded payment for the 
 horse, and the plaintiff refusing to
 
 452 
 
 Private Cokporations. 
 
 formerly have been the rule, it is now well settled that a corpora- 
 tion is liable in that class of actions as well as an individual ^ 
 
 as 
 
 pay, was detained in custody by two 
 policemeu under the orders of the 
 station-master, until it was ascertained 
 by telegraph that all was right. An 
 action having been brought by the 
 plaintift against the defendants for 
 false iiuprisouuient, it was held, that 
 though a railway company has power 
 to apprehend a person traveling on the 
 railway without having paid his own 
 fare, it can only detain the goods for 
 non-payment of the carriage, that as 
 the defendants themselves would have 
 had no power to detain the plaintiff, 
 on the assumption that he had wrong- 
 fully taken the horse by the train 
 without paying, there could be no au- 
 thority implied from them to the 
 station-master to detain the plaintifE 
 on this assumption, and that they 
 were, therefore, not liable for this act 
 of the station-master. This case de- 
 cides only that no implied authority as 
 to detention belonged to the station- 
 master. Of course, he might have had 
 express authority to act as he did, and 
 though such authority would have 
 been ultra vires of the company pur- 
 porting to confer it, yet they would 
 have been responsible for the result 
 thereof. Herein consists a great distinc- 
 tion between tortious and contractual 
 liability for acts ultra vires. It is no de- 
 fense to legal proceedings in tort that 
 the torts were ultra vires. If the torts 
 have been done by the corporation, or 
 by their direction, they are liable for 
 the results, however much in excess of 
 their powers such torts may be. 
 
 Other torts there are with respect 
 to which the liability of a corporation 
 may be fairly considered doubtful. 
 Ordinarily it is sufficient to render a 
 person responsible for a tort, whether 
 committed by himself or his agent, if 
 only there has been negligence, heed- 
 lessness or rashness. Sometimes, how- 
 ever, the mental ingredient , becomes 
 intention, actual or constructive. Can 
 a corporation be made amenable for 
 those torts, which require, on the part 
 
 1 N. 0. R. R. Co. V. Bailey, 40 Miss. 
 295 ; Goodspeed v. East Haddam B'k, 
 22 Conn. 530 ; Wheless v. Second Nat. 
 Bank, 1 Baxt. (U. S. C. C.) 469 ; 25 
 Am. Rep. 783 ; Philadelphia R. R. Co. 
 V. Quigley, 21 How. (U. S.) 202 ; Cop- 
 
 of the wrong-doer, knowledge or will- 
 fulness ? 
 
 In Stiles v. Cardiff Steam Naviga- 
 tion Company, 4 N. R. 483 ; 83 L. J. 
 Q. B. 310, it was determined that a 
 corporation would be liable for know- 
 ingly keeping a mischievous animal. 
 Mr. Justice Shee asserted broadly in 
 reference to the scienter, that " cor- 
 porations are, in this respect, in no 
 different position from private owners, 
 and if it could be shown that the mis- 
 chievous propensity of the dog was 
 known to any person having control 
 of the business or of the yard, or even 
 the dog, or whose duty it would be to 
 inform the company of what the dog 
 had done, it might do, but the evidence 
 fails on that point." 
 
 In Whitfield v. South Eastern Rail- 
 way Company, 1 E. B. & E. 115 ; 2/ L. 
 J. Q. B. 229. See Lawless v. Anglo- 
 Egyptian Cotton and Oil Company, L. 
 R.,4 Q. B. 262, it was held that a corpo- 
 ration was liable for publishing a libel 
 contained in a telegram which passed 
 over their wires ; and e converso, a cor- 
 poration, though intangible and with- 
 out personal incidents, may sue'for libel 
 upon it. Metropolitan Saloon Omni- 
 bus Company v. Hawkins, 4 H. & N. 
 87; 38 L. J. Ex. 201. 
 
 In respect of liability for torts it 
 makes no difference whether the cor- 
 poration is a trading one making profits 
 out of its undertaking, or exists merely 
 for public purposes. In the latter 
 case, as in the former, it is equally un- 
 der obligations to all persons with 
 whom it may come into contact, and 
 is bound so to carry on its affairs as to 
 keep within its powers, and not to 
 cause injury to others, failing this, it 
 is liable for the damage resulting. 
 Southampton and Itchin B. C. v. Local 
 Board of Southampton, 8 E. & B. 801 ; 
 28 L. J. Q. B. 41 ; Ruck v. Williams, 3 
 H.& N. 308; Brownlow v. Metropolitan 
 Board, 16 C. B. (N. S.) 546. 
 
 Under the same circumstances the 
 various boards of commissioners, and 
 
 ley V. Grover & Baker Sewing Machine 
 Co., 2 Woods. (U. S. C. C.)494 ; Vance 
 V. Erie R. R. Co., 32 N. J. L. 334 ; 
 First Nat. Bank of Carlisle v. Graham, 
 100 U. S. 699.
 
 Liability of Corporations for Torts. 
 
 453 
 
 for bringing vexatious suits/ for malicious prosecution/ for 
 fraudulent representations/ for a libel/ for vexatiously obstruct- 
 
 other similar bodies appointed to con- 
 duct and carry out public improve- 
 ments, and deriving therefrom no per- 
 sonal advantage whatever, will, in 
 their corporate or quasi-corpora.te 
 capacity, unless expressly by statutory 
 provision relieved, be responsible to 
 the parties injured. See the cases 
 cited above, and also the Mersey Docks 
 Trustee v. Gibbs, L. K., 1 H. L. 93. 
 
 The liability of corporations has 
 been extended to even some varieties of 
 crimes. The notion of crime, as usually 
 held, requires intent on the part of 
 the criminal, but this is not the view 
 taken by our law. Many acts, which, if 
 productive of harm to a single person, 
 are mere torts, become crimes when 
 they result in damage to a large num- 
 ber of people, and all proceedings, 
 which are invasions of the rights or 
 privileges not of some individual 
 specially, but of the public at large, 
 or which are detrimental to the general 
 well-being or to the interest of the 
 state, similarly fall under the cate- 
 gory of crimes. In such cases the in- 
 tent is notional and constructive, rather 
 than real; Reg. v. Stephens, L. R., 1 Q. 
 B. 702 ; it suffices if the wrong-doer 
 has caused, whether directly by his 
 own proceedings or indirectly by those 
 of his agents, the wrong in question. 
 Manifestly a corporation can commit 
 such wrongs, can have such an intent, 
 and by consequence at least to such 
 
 ^ Goodspeed v. East Haddam Bank , 
 ante. 
 
 - Williams v. Planters' Ins. Co., 57 
 Miss. 759 ; 34 Am. Rep. 494 ; Garter v. 
 Howe Machine Co., 51 Md. 290 ; Fen- 
 ton v. Sewing Machine Co. , 9 Phila. 
 189 ; Iron Mountain B'k v. Mercantile 
 B'k, 4 Mo. App. 505 ; Edwards v. 
 Midland Railway Co., 6 Q. B. Div. 287. 
 But contra, see Owlsey v. Montgom- 
 ery, etc., R. R. Co., 57 Ala. 560. In 
 Castro V. HoAve Machine Co., ante, the 
 court while holding that a corporation 
 
 ^ National Exchange Co. v. Drew, 
 2 Macq. 103; New Brunswick, etc.. 
 Railway Co. v. Couybeare, 9 H. L. 
 711. 
 
 extent render itself amenable to the 
 criminal law. Accordingly it has been 
 decided that a corporation may be in- 
 dicted for misdemeanors wliich are in 
 reality public torts, e. {/..tor disobedi- 
 ence to an order of ju^ticf^s requiring 
 them to execute works pursuant to a 
 statute, Reg. v. Birmingham and Glou- 
 cester Railway Company, 3 Q. B. 223; 
 for malfeasance in cutting through and 
 obstructing a public highway, Reg. 
 V. Great North of England Railway 
 Company, 9 Q. B. 315 ; Reg. v. Long- 
 ton Gas Company, 2 E. & E. 051 ; Reg. 
 V. United Kingdom Electric Telegraph 
 Co., 2 B. & S. G47, n.; 3 F. & F. 73 ; for 
 non-repair of a highway, and the like. 
 Reg. V. Mayor, etc., of Manchester, 7 
 E. & B. 453 ; 26 L. J. Sc. 65. 
 
 The authorities have gone only 
 so far as to render them liable crimi- 
 nally for a nonfeasance or misfeas- 
 ance, where the mental element is 
 negligence. Whether this can ever be 
 extended to felonies or misdemeanors, 
 the essence of which is malice, willful- 
 ness, or other such determinate fact, 
 is very doubtful. Reg. v. Great North 
 of England Railway Company, 9 Q. 
 B. 315 ; King of the Two Sicilies v. 
 Wilcox, 1 Sim. (N. S.) 334 ; 19 L. J. 
 Ch. 488. Being mere abstractions, 
 they cannot have actually the mental 
 element therein involved, and to raise 
 it by implication is directly opposed to 
 every principle of criminal law. 
 
 is liable for malicious prosecution by 
 its agents, yet held that in order to 
 charge them, either express authority 
 for the act of its agent or its subse- 
 quent ratification must be shown, but 
 the tenor of modern cases is against 
 any such requirement where the act 
 complained of comes within the scope 
 of the agent's apparent authority. 
 In Edwards v. Midland Railway Co., 
 43 L. T. (N. S.) G94, Fry, J., said : 
 " The question which I have to decide 
 is this, whether or no a railway com- 
 
 * McDermott v. The Evening Jour- 
 nal. 44 N. J. L. 488 ; 39 Am. Rep. 606; 
 Philadelphia R. R. Co. v. Quigley, 21 
 How. (U. S.) 202.
 
 454 
 
 Pkivate^'Coeporations. 
 
 ing one's trade,^ for a nuisance/ for false imprisonment/ and 
 generally for any and all torts, whether malicioxis or otherwise^ 
 which are committed by its agents or servants in the line of their 
 
 pany can be liable iu an action for 
 malicious prosecution ? The malice 
 which will support a cause of action 
 need not be express. It may be im- 
 plied from a wrongful act being done 
 without just cause or excuse, and it is 
 enough, therefore, if such malice can 
 be attributed to a railway company. 
 It is obvious that great evils would 
 arise if, on the ground that a corpora- 
 tion can have no mind, and therefore 
 can have no malice, a corporation 
 were able to escape from that liability 
 which if they were not incorporated 
 they would have to bear. Now how 
 do the authorities stand? They stand 
 in this way. The question came before 
 the court of exchequer in Stearns v. 
 Midland Railway Co., 10 Exch. 353, 
 and three judges expressed their 
 opinion in that case. Alderson, B., 
 went upon the proposition that in 
 order to support the action it must be 
 shown that the defendant was actuated 
 by animus in his mind, and that a cor- 
 poration has no mind. The two 
 other learned judges, Platt, B., and 
 Martin, B., without expressly dis- 
 senting from that proposition, declined 
 to enunciate it, and determined the 
 case upon the ground that there was 
 not sufficient evidence of authority to 
 affect the defendants, the railway 
 company. That case, therefore, so 
 far as it bears upon the present inves- 
 tigation, is the authority only of the 
 very eminent judge, Alderson, B. 
 Now, has that case been followed 1 
 Mr. Powell says it has been followed 
 by a case in Australia, in which the 
 chief judge, differing from his two 
 learned brethren, followed the decis- 
 ion of Alderson, B. Is that decis- 
 ion of Alderson, B., consistent with 
 other authorities which bear upon the 
 same question — I mean the question 
 of malice in a corporation ? Now, so 
 far back, I find, as the great trial on 
 qiio warranto of Rex v. City of Lon- 
 don, the point appears to have been 
 
 1 Green v. London Omnibus Co., 7 
 C. B. (N. S.) 290. 
 
 '■' First Baptist Church v. R. R. Co., 
 5 Barb. 79 ; Wood on Nuisances. 
 
 considered. There it appears Saund- 
 ers, L. C. J., allowed a demurrer, ac- 
 cording to the statement of the plead- 
 ings which I find in a note appended 
 to Whitfield v. South-Eastern Rail- 
 way Co. in 1 El. Bl. & Ell. 123, and 
 which no doubt, therefore, is correct, 
 and contemplated the proposition that 
 a corporation aggregate could be 
 charged with maliciously publishing 
 a libel. No doubt it may be said that 
 that decision is on some grounds not 
 of the greatest weight, that is to say, 
 it was a decision which is often con- 
 sidered to have been affected by politi- 
 cal as well as by legal considerations. 
 Still it was the decision of a very great 
 and very eminent judge. Then, again, 
 the question arose for decision in the 
 case of Yarborough v. Bank of Eng- 
 land, 16 East, 6. and there Lord Ellen- 
 borough referred to an earlier case, 
 I think in 1871, of Argent v. Dean and 
 Chapter of St. Paul's. There he 
 says the action was ' for a false return 
 to a mandamus respecting an election 
 to a verger's place in that cathedral, 
 and no objection was made that the 
 action would not lie. Vidian's Entries, 
 p. 1, is an action for a false return 
 against the mayor and commonalty of 
 the city of Canterbury, for a false re- 
 turn to a writ of mandamus to restore 
 an alderman to his precedency of place, 
 etc. It states the mayor and corpora- 
 tion as attached to the answer and the 
 return as falsely and maliciously 
 made. The instances of actions against 
 corporations for false returns to writs of 
 mandamus, which are so often directed 
 to them, must be numberless, though 
 I have not found many of them in the 
 books of entries.' The question again 
 came before the court for consideration 
 in the case of Whitfield v. South-East- 
 ern Ry. Co., 31 L. T. (0. S.)l]3; 27 
 L. J. Q. B. 339 ; 1 Ell. Bl, & Ell. 132, 
 where a count against a railway com- 
 pany as a corporation aggregate was 
 held good on demurrer, and there Lord 
 
 2 Owlsey V. Montgomery, etc., R. R. 
 Co.,57 Ala. 560.
 
 Liability of Corporations for Torts. 
 
 455 
 
 duty and witliin the scope of their apparent authority, and the 
 doctrine of ultra vires has no apphcation in such cases.^ 
 
 Campbell said : ' The demurrer to 
 the declaration in tliis case can only 
 be supported on the ground that the 
 action will not lie without proof of 
 express malice, as contradistinguished 
 from legal malice. But if we yield 
 to the authorities which say that in 
 an action for defamation malice must 
 be alleged (notwithstanding authori- 
 ties to the contrary), this allegation 
 may be proved by showing that the 
 publication of a libel took place by 
 order of the defendants, and was 
 therefore wrongful, although the de- 
 fendants had no ill-will to the plaint- 
 iffs, and did not mean to injure them. 
 Therefore the ground on which it is 
 contended that an action for a libel 
 cannot possibly be maintained against 
 a corporation aggregate fails. But 
 considering that an action of tort or 
 of trespass will lie against a corpora- 
 tion aggregate, and that an indictment 
 may be preferred against a corpora- 
 tion aggregate both for commission 
 and omission, to be followed up by 
 fine, although not by imprisonment, 
 there may be great difficulty in say- 
 ing that under certain circumstances 
 express malice may not be imputed 
 to and proved against a corporation.' 
 He held, therefore, that it clearly 
 might be implied, and therefore in 
 certain cases express malice might be 
 proved. Then, again, in Green v. 
 London General Omnibus Co. , 1 L. T. 
 (N. S.) 95 ; 7 C. B. (N. S.) 3>)0, a simi- 
 lar question came before the court of 
 common pleas. The marginal notes 
 to this effect : ' A corporation aggre- 
 gate may be liable to an action for in- 
 tentional acts of misfeasance by its 
 servants, provided they are sufficient- 
 ly connected with the scope and ob- 
 ject of its incorporation.' The alle- 
 gation there was that the placing and 
 driving of omnibuses in the manner 
 complained of was done wrongfully, 
 vexatiously and maliciously, and judg- 
 ment was delivered by Ehle, C. J. 
 He said : ' This is an action against 
 the defendants for wrongfully, vexa- 
 tiously and maliciously interfering 
 with the plaintiffs rights by causing 
 
 their vehicles to be driven in such a 
 manner as to obstruct and molest the 
 plaintiff in the use of the highway. 
 The declaration alleges various griev- 
 ances of that general character. To 
 this declaration there is a demurrer 
 raising for our decision the question 
 whether the action will lie. The 
 ground of the demurrer is, that the dec- 
 laration charges a willful and inten- 
 tional wrong, and that the defendants, 
 being a corporation, cannot be guilty of 
 such a wrong, and therefore the action 
 will not lie.' 1 pause to observe that to 
 my mind it is equally absurd to sup- 
 pose that a body corporate can do a 
 thing willfully, which implies will, in- 
 tentionally, which implies intention, or 
 maliciously, which implies malice. 
 They are all acts of the mind, and one 
 is no more capable of being done by 
 a corporation aggregate than the other; 
 so if there is absurdity in the one case 
 there is equal absurdity in all the 
 others. The judgment proceeds : ' But 
 the whole of the acts that are charged 
 against the defendants are acts con- 
 nected with driving vehicles, and the 
 defendants are a company incorporated, 
 for the purpose of driving omnibuses 
 and therefore the acts alleged to have 
 been done by them are all acts which 
 are within the scope and object of 
 their formation. Unless the acts 
 charged were wrongfully done the 
 plaintiff of course would have no 
 ground of complaint. We are clearly 
 of opinion that the action lies, and 
 there are abundan authorities to 
 warrant that opinion. The whole 
 course of the authorities, from the case 
 of Yarborough v. Bank of England, 16 
 East, G, down to Whitfield v. South- 
 Eastern llailway Co., 1 Ell. Bl. & Ell. 
 115 (which is the case I just now 
 referred to), which was in reality an 
 action against the Electric Telegraph 
 Company, shows that an action for 
 a wrong will lie against a cor- 
 poration where the thing that is com- 
 plained of is a thing done within the 
 scope of their incorporation, and is one 
 which would constitute an actionable 
 wrong if committed by an individual. 
 
 ' First National Bank of Carlisle v. Graham, 
 Railway Co., 1 E. B. & E. 115. 
 
 100 U. S. 699 ; Whitfield v.
 
 456 
 
 Private Corporations. 
 
 Sec. 298. Assault and battery when committed in the line of duty 
 
 of the agent. — We have affirmed the proposition generally, that 
 the principal is responsible for all positive misconduct, or for any 
 neo-lect or omission of agents done or committed ^\'hile acting 
 within the scope of the authority conferred upon them. But it 
 'is sometimes a matter of difficulty to determine the extent of the 
 agent's authority, and whether, in the particular act claimed to be 
 tortious, the agent was acting within the scope of his authority. 
 For instance, while thus acting, the agent may commit an assault 
 and battery. If the agent should, for the time being, leave the 
 business of his agency, and willfully and maliciously conunit an 
 assault and battery, the principal evidently would not be liable.^ 
 But if, in the performance of and within the scope of his sup- 
 posed duty, he inflicts an unwarranted injury upon another, the 
 principal would undoubtedly be liable thei^efor. Thus, if a 
 brakeman or other agent of a railroad company should leave his 
 employment, and without any connection with his duties as such 
 should commit an assault and battery upon another, it is evident 
 that the railroad company would not be responsible for the dam- 
 
 The doctrine relied on by Mr. Gififard 
 — that a corporation, having no soul, 
 cannot be actuated by a malicious in- 
 tention — is more quaint than sub- 
 stantial.' In other words, I under- 
 stand the court of common pleas in 
 that case to have disregarded as quaint 
 aud not substantial the ratio decidendi 
 of Alderson, B., in the case of Stevens 
 V. Midland Railway Co.j 10 Exch. c!52. 
 In my judgment, therefore, that 
 dictum or decision of his has been 
 overruled, or rather has not been fol- 
 lowed by a court of co-ordinate juris- 
 diction. Therefore I feel myself at 
 liberty in that condition of the author- 
 ities, and as at liberty I think I am 
 bound to decide according to wliat I 
 conceive to be the true view of the 
 law. That being so, it only remains 
 to inquire whether or no this was done 
 within the scope of the incorporation. 
 Now those great railway corporations 
 are bound to maintain, and in fact they 
 do maintain, jiolice for the purposes 
 of restricting the commission of crime 
 upon their railways, and the observ- 
 ations in the j udgment of Lord Black- 
 
 burn, then a member of the court of 
 queen's bench, in the case of Golf v. 
 Great Northern Railway Co., 3 L. T. 
 (N. S.) 850; 30 L. J. Q. B., 148, 
 show that in his view, at any rate, a 
 company would be responsible for the 
 arrest by their police of persons, sup- 
 posing the arrest was wrongfully 
 effected. Can it be said that if the 
 police whom they employ conduct a 
 prosecution in tlie performance of 
 their duties as oificers of the company, 
 it is not done in the scope of incorpora- 
 tion of the company ? The company 
 take to themselves, as a necessary part 
 of their business, the protection of 
 property which is intrusted to them 
 as common carriers and otherwise. 
 In my view it is within the scope of 
 their incorporation, and is not like a 
 thing entirely outside the objects of 
 their business. It is a thing which, 
 taking into account the nature of their 
 business, they could not reasonably 
 do without, and do not do without. If 
 so, it seems to me I am bound to hold 
 that the company may be responsible 
 for malicious prosecution." 
 
 ' See Edwards v. London, etc., R. 
 Co., L. R., 5 C. P. 445 ; L. R., 6 Q. B. 
 
 65 ; Owsley v. Montgomery R. Co., 87 
 Ala. (N. S.) 560.
 
 Liability of Corporations for Torts. 457 
 
 ages sustained tliereby ; but, if sucli agent, while acting for 
 such company, and within the line and ai^parent scope of liis 
 duty, should, though without authority of the company, unlaw- 
 fully assault and beat a passenger, the company would be respon- 
 sible for the damages sustained by such passenger.' 
 
 Sec. 299. Distinction between torts and contracts as to application of 
 doctrine of ultra vires. — x\ distinction has been made us to the lia- 
 bility of the principal between acts that are tortious, if done in the 
 execution of acts which are ultra vires, and mere contracts, in case 
 they are ultima vires. In the former case, it has been held that 
 corporations are liable if the act, though ultra vires, is done by 
 its direction whereas in the latter it would not generally be liable." 
 
 Sec. 300. Liability of corporations for trespasses to property. — The 
 liability of a corporation for an injury to the real or pei-sonal 
 property of another is the same as in case of a natural j)erson. 
 The only distinction between them being, not in the injury or 
 liability itself, but in the fact that, as a corporation is merely an 
 imaginary person, its trespasses must necessarily be committed 
 through its agents, while a natural person may commit them not 
 only by his agents, but by his own direct act. Wherever an 
 injury may be done through the agent, and an action therefor 
 sustained against an individual principal, under like circumstances 
 an action will lie against a corporation. 
 
 Thus, a corporation may be liable in trover or for the conver- 
 
 ' Philadelphia, etc., R. Co. V. Derby, As to injury re.sulting from negli- 
 
 14 How. (U. S.) 468 ; Jackson v. Second gence causing death, see Sbeanu. «& 
 
 Ave. R. Co. , 47 N. Y. 274; Hamilton v. Redf. on Neg., chap. 17, 27, 33. As to 
 
 Third Ave. R. Co. 35 N. Y. Superior the measure of damages in such cases, 
 
 Ct. 118; S. C.,o3 N. Y. 25 ; Moore v. see Field on Dam., chap. 21, § 626 
 
 Fitchburgh R. Co., 4 Gray, 465 ; Rams- et seq. 
 
 deu V. Boston, etc., R. Co., 104 Mass. As to the general liability in cases 
 117; Coleman v New York, etc., R. of trespass to the person, see, also, 
 Co., 106 id. 160; Crocker v. New the English capes, Sevmour v. Green- 
 London, etc., R. Co., 24 Conn. 249 ; wood, 7 H. & N. 355 ;'30 L. J. Ex. 327 ; 
 Brokaw v. New Jersey, etc., R. Co., 32 Limpus v. London Gen. Omnibus Co., 
 N. J. L. 328 ; Philadelphia, etc., R. Co. 1 H. & C. 526 ; 32 L. J. Ex. 34; Goff 
 v. Wilt, 4 Wbart. 143 ; Pennsylvania, v. Northern R. Co., 30 L. J. Q. B. 
 etc., R. Co. V. Vandiver, 42 Penn. St. 148. 
 
 365 ; Chicago & N. W. R. Co. v. Wil- - First National Bank of Carlisle v. 
 
 liams, 55 111. 185 ; Kline v. Central, Graham, 100 N. S. 699 ; Sharp v. 
 
 etc., R. Co., 39 Cal. 587; Evausville, Mayor, 40 Barb. 273 ; 40 N. Y. 454; 
 
 etc., R. Co. V. Baum, 26 Ind. 70 ; Jef- Beach v. Fulton Bank, 7 Cow. 485 ; 
 
 fersonville R. Co. v. Rogers, 38 id. 116. Bank of U. S. v. Davis, 2 Hill, 451. 
 
 58
 
 458 Private Corporations. 
 
 sion of personal property ; ' for trespass, in stopping water-courses ; 
 or for injury to property by the construction and use of canals ; by 
 blasting rocks ; entering upon the premises of another and carry- 
 ino- away the soil, or cutting timber; for nuisance; for eject- 
 ment ; and for negligence causing damage to person or property, 
 and in all these cases corporations will be liable to damages for 
 the injuries sustained, where the acts are committed by their 
 agents, acting within the scope of their authority, the same as 
 though the actions therefor were against individuals.'' So an 
 action may be maintained against a corporation for a libel ; ^ and 
 for false imprisonment ;^ for a nuisance, for which a corporation 
 may also be indicted ; ^ and also for a malicious prosecution/ 
 
 Sec. 301. Rule in Vance v. Erie R. R. Co., as to implied malice. — 
 
 In a recent case against a railway corporation for a malicious 
 prosecution the court say : "It must ' appear that the prose- 
 cution was instituted maliciously and without probable cause. 
 In a legal sense, any act done willfully and to the injury of an- 
 other, which is unlawful, is, as against that person, malicious, and it 
 is not necessary that the perpetrator of such act should be in- 
 fluenced by ill-will toward the individual, or that he entertain or 
 pursue any bad purpose or design. The proof of malice need 
 not be direct. It may be inferred by the jury from the want of 
 
 1 Tattan v. Great Western R. Co. , 29 514 ; Bloodgood v. Mohawk R. Co., 18 
 
 L J Q. B. 184 • Mears v. London, etc.. Wend. 9. See, also, Lyman v. Bridge 
 
 R. Co., 11 C. B.' (N. S.) 850; 31 L. J. C. Co., 2 Aik. (Vt.) 255 ; Watson v. Ben- 
 
 P. 220 ; Yarborough v. Bank of Eng- uett, 12 Barb. 196 ; Lee v. Sandy-Hill, 
 
 land, 16 East, 6 ; Duncan V. Surrey Ca- 40 N. Y. 442; Chestnut Hill Co. v. 
 
 nal Co. ,3 Stark. 50; Smith v. Birming- Rutter, 4 S. & R. 6 ; Delaware Canal 
 
 ham Canal Co. , 1 A. «& E. 526 ; Balti- Co. v. Commissioners, 60 Peun. St. 367 ; 
 
 more v. Norman, 4 Md. 352 ; Green's Whiteman v. Wilmington, etc., R. 
 
 Brice's Ultra Vires, 262; Brown v. Co., 2 Harr. 514; Humes v. Knoxville, 
 
 South Kennebec Ag. Soc, 47 Me. 275. 1 Humph. 403 ; Terra Haute Gas Co. 
 
 ^ Trespass will lie against a corpora- v. Teel, 20 Ind. 131. 
 
 tion. See Hay v. Cohoes Co., 2 N. Y. ^ pjjiiadelphia R. Co. v, Quigley, 21 
 
 159 ; Carman v. Steubenville R. Co., How. (U. S.) 202 ; Whitfield v. South 
 
 4 Ohio St. 399 ; Barnard v. Stevens, 2 Eastern R. Co., E. B. & E. 115 ; Law- 
 
 Aikins (Vt.), 429 ; Underwood v. New- less v. Anglo-Egyptian Co., L. R., 4 Q. 
 
 port Lyceum, 5 B. Monr. 130 ; Humes B. 262; Western Bank, etc., v. Addie, 
 
 V. Knoxville, 1 Humph. 403; Craw- 1 H. L. Sc. 145. 
 
 fordsville R. Co. v. Wright, 5 Ind. 252; ■* Goff v. Great Northern R. Co., 3 E. 
 
 Hazen v. Boston R. Co., 2 Grav. 574 ; & E. 672. 
 
 Chicago R. Co. v. Fell, 22 111. 333; ^ Delaware Canal Co. v. The Cora- 
 Same V. Whipple, id. 105 ; Illinois C. monwealth, 60 Penn. St. 367. 
 R. Co. V. Reedy, 17 id. 580 ; Edwards « Vance v. Erie R. Co., 32 N. J. L. 
 V. Union Bank, 1 Fla. 136; White- 334. See, also, Gillett v. Missouri, 
 man v. Wilmington R. Co., 2 Harr. etc., R. Co., 55 Mo. 315.
 
 Liability of CoRPORA'noNS foe Torts. 459 
 
 probable cause, and involves nothing more than a wrongful act 
 intentionally done. To hold a corporation amenable in this par- 
 ticular action is strictly in accordance with well-settled legal 
 principles. The wrong for which the action is the appropriate 
 remedy is susceptible of being committed by a corporation by 
 means of its agents and servants. No technical difficulties are in 
 the way of the institution of the suit, and, at the trial, the cause 
 can be conducted upon the established ndes of evidence. To 
 afford redress against a corporation for other intentional wrongs 
 done by them, aud deny it in this case, is an anomaly which can 
 only be justified because of the interposition of insurmountable 
 obstacles. No such obstacles stand in the way of the prosecution 
 or maintenance of the action." ^ The liability in such a case nmst 
 come within the rule, that tlie corporation has directly authorized 
 it, or the wrong must be done and performed within the scope of 
 the authority conferred upon the agent, as w^e have already 
 noticed or the corporation would not be liable. 
 
 OEC. 302. Liability of corporations in case of the negligence of 
 agents. — Corporations, like natural persons, are liable for the negli- 
 gence of their officers, agents and servants, while engaged in the 
 business of the corporation, by which others sustain a loss. The 
 general doctrine in reference to negligence is, " that for all in- 
 juries to a person, resulting from the negligence of another, and 
 to which the party injured has not, by his own act or negligence 
 materially contributed, the injured party may recover all such 
 damages as directly and naturally, or necessarily flow from the 
 negligence." ^ Although the general doctrine is that the principal 
 is not hable for the willful and malicious torts of his agents, still, 
 corporations have frequently been made responsible, where it would 
 
 lOpinioQ of Depue, J., in Vance v. W. R. Co., 3 B. & S. 106 ; 3 L. J. Q. 
 
 Erie R. Co., supra. See, also, Stevens B. 67 ; 3 B. & S. 119. A negligence 
 
 V. Midland R. Co., 10 Exch. 353; Mer- is the juridical cause of an injury, 
 
 rill V. Tariff Manuf. Co., 10 Conn. 384 ; when it consists of such an act or 
 
 Jeffersonville R. Co. v. Rogers, 28 omission on the part of a responsible 
 
 Ind. 1. human being [or a corporation], as in 
 
 '^ Field on Dam., § 660. See, also, ordinary natural sequence immedi- 
 
 Hill. on Torts, 115 et scq. ; Shearm. & ately results in such injury. Such in 
 
 Redf. on Neg. , § 594 ; Bridge v. Grand fact we may regard as the meaning of 
 
 Junction R. Co., 3 M. & VV. 244; Ellis the term ' proximate cause,' adopted 
 
 V. London, etc., R. Co., 2 H. & N. 434 ; by Lord Bacon, in his maxims." 
 
 26 L. J. Exch. 549; Thompson v. N. Whart. on Neg., §73.
 
 460 Private Corporations. 
 
 appear that tlie acts were willful and malicious, on the ground 
 that the corporation has been negligent in selecting or continuing 
 such agent, knowing his habits or incompetence, or in subse- 
 quently either directly or indirectly approving of, or indorsing his 
 conduct, which is the basis for the damages claimed. If the cor- 
 poration, by its acts, holds out an agent as competent and worthy 
 of coniidence, in the performance of the duties to which he is 
 intrusted, and as fit to be trusted, it has been held that it thereby 
 warrants his fidelity, competency, and good conduct, in all matters 
 within the scope of his agency. And as a general rule it will 
 not be permitted to set up, in defense of an action for negligence, 
 the intentional violation of duty on the part of an agent to whom 
 it has intrusted the performance of duties, if done within the 
 scope of his general authority ; and this rule might well rest upon 
 the familiar equitable doctrine, that where one of two parties 
 must suffer for a loss sustained, he should sustain the loss, who, 
 by his conduct, has created a confidence which produced or re- 
 sulted in an injury or loss. 
 
 Sec. 303. liimitation of liability in case of negligence. — There IS 
 a familiar maxim of the law that a party guilty of a negligence, 
 by which loss is sustained, shall only be liable for the proximate 
 consequences of his wrongful act, causa proxima et non remota 
 spectatur. But this maxim affords an imperfect guide in deter- 
 mining the near or even remote consequences of a wrongful act, 
 for which the wrong-doer should respond in damages. It is, 
 perhaps, impossible to frame any rule of universal application in 
 cases of negligence, to determine the question of liability on the 
 ground of such negligence as the proximate cause. ^ 
 
 The question of liability for losses more or less remote has 
 been illustrated as follows : " Suppose through the negligence 
 of a railroad company the house of A. near a railroad, is set on 
 fire witliout his fault, by sparks and cinders escaping from the 
 locomotive used by the company, and is consumed, and that the 
 adjoining buildings of B., C. and D. are thereby, and without their 
 
 1 Field on Dam., §§ 10, 48 et seq.; 664 et seq.
 
 Liability of Coeporations for Torts. 461 
 
 fault, successively consumed, is the company liable to B., C. and D. 
 respectively? On this question the authorities seem very conflict- 
 ing. * * * Thus, it has been held, that where, through the 
 defective condition of a locomotive of the defendant, a railroad 
 company, a quantity of wood was ignited in one of its sheds, 
 and the shed was consumed, and the fire therefrom set on fire and 
 consumed tlie house of the plaintiff, about one hundred and 
 thirty feet distant from the shed, the plaintiff could not recover 
 of the company for the loss he had thereby sustained.' So, where 
 a I'ailroad company, through its negligence, set fire to the house 
 of another, and the tire therefrom was communicated to the house 
 of a third party, whicli was consumed with its contents, it was 
 held that the railroad company was not liable for the loss of the 
 last building or its contents thus destroyed.^ * * *' On the 
 other hand, in several recent and well-considered cases, it has been 
 held that such losses may be recovered ; that such damages are 
 not too remote from the negligent cause ; that the casual connec- 
 tion between the negligence and the losses of the respective par- 
 ties is complete, and that the question of negligence of tlie com- 
 pany, and of the other parties, should be submitted to the jury 
 under all the circumstances of the case. Thus, in Illinois, where 
 it appeared that a locomotive, belonging to the defendant, in 
 passing through a village with a train of cars, threw out great 
 quantities of unusually large cinders, which set on fire a ware- 
 house near the track, the heat and flames from which ignited a 
 building of the plaintiff, which was situated about two hundred 
 and fifty feet from the warehouse, and which was thereby 
 destroyed ; it was held that the compau}"- was not exonerated 
 from liability merely because the plaintiff's house was not imme- 
 diately ignited by cinders thrown from the locomotive, but by 
 the burning of the warehouse ; that it was not a conclusion of 
 law, that the fire sent forth by the locomotive should be consid- 
 ered as the remote and not the proximate cause of injury to the 
 plaintiff, but a question of fact to be determined by the jury un- 
 der the instructions of the court. 
 
 And in a recent case, where the action was for damages caused 
 
 ' Ryan v. New York Cent. R. Co., 35 ° Pennsylvania R. Co. v. Kerr, 62 
 N. Y. 210. Penn. St. 353.
 
 462 Private Corporations. 
 
 by sparks emitted from the company's engine, kindled fires in 
 two different places on lands not belonging to the plaintiff, and 
 the two fires spread, and finally uniting passed over the lands of 
 several other parties and fijially reached the premises of the plaint- 
 iff, "about four miles distant from the point where it first started, 
 and there destroyed the property of the plaintiff ; the court held 
 that the loss was not too remote to allow a recovery.^ And the 
 same doctrine has been recently maintained in Wisconsin/ 
 
 Sec. 304. Rule in Illinois as to proximate cause. — The reasou in 
 
 support of the decisions on this question first above referred to 
 are assailed by Lawrence, C. J., of the supreme court of Illinois, as 
 follows : " It has been held by this and various other courts, 
 that if fire is communicated to the dried grass of an adjoining 
 field, through the carelessness of the persons managing a railway 
 locomotive, and spreads over the field, no matter to what ex- 
 tent, destroying hay stacks, fences and houses, the company is 
 liable. * * * But if these two decisions, in New York and 
 Pennsylvania,' are correct law, it must be held that if fire is com- 
 municated from the locomotive to the field of A., and spreads 
 through his field to the adjoining field of B., while A. must be reim- 
 bursed by the company, B. must set his loss down as due to a re- 
 mote cause, and suffer in uncomplaining silence. Would there not 
 be in such a decision a sense of palpable wrong, which would shock 
 the public conscience and impair the confidence of the community 
 in the administration of the law ? " ^ 
 
 1 Atchison T. & S. F. Co. v. Stanford, win, 24 E. C. L. 272 ; Lynch v. Nurdin, 
 
 12 Kans. 354 ; St. Jo. & D. C. R. Co. v. 41 id. 422 ; Rigby v. Hewitt, 5 Exch. 
 
 Chase, 11 id. 47. ' 240; Greenland v. Chaplin, id. 243; 
 
 ^ Kellogg V.Chicago & N. W. R. Co., Montoya v. London Ass. Co., 6 id. 451 ; 
 
 26 Wis. 223. See, also,Periey v. Eastern Ins. Co. v. Tweed, 7 Wall. 44 ; Powell 
 
 R. Co., 98 Mass. 415 ; Hart v. West. R. v. Deveny, 3 Cush. 300 , Vandenburgh 
 
 Co., 13 Mete. 99 ; Annapolis & E. R. Co. v. Truax, 4 Den. 464 ; Hart v. West. R. 
 
 V. Gantt, 39 Md. 115 ; Kellogg v. Mil- Co., 13 Mete. 99 ; Perley v. Eastern R. 
 
 waukee & St. P. R. Co., Cent. L. J., Co., 98 Mass. 414; Cleavelanda v. 
 
 vol. 1, 278; Opinions of Miller and Grand Trunk R. Co., 42 Vt. 449; Piggot 
 
 Dillon, JJ., U. S. C. C, Iowa, May v. Eastern, etc., R. Co., 54 E. C. L. 229 ; 
 
 T., 1874. Smith v. The London & S. W. R. Co., 
 
 3 Ryan v. The New York Cent. R. L. R.,5 C. P. 98; Atchison T. & S. 
 
 Co., 35 N. Y. 214; and The Pennsyl- F. R. Co. v. Sauford, 12 Kans. 354 
 
 vania R. Co. v. Kerr, 62 Penn. St. 353 (1874). 
 
 (1869). In the last case, which was an action 
 
 * Fent V. Toledo, P. & W. R. Co., 59 for damages, for the negligent setting 
 
 111. 349 (1871). See, also, Scott v. of a lire, Valentine, J., in delivering 
 
 Shepherd, 2 Wm. Black. 892, the the opinion of the supreme court of 
 
 famous squib case ; Illidge v. Good- Kansas, observes : " After a careful
 
 Liability of Corporations for Torts. 463 
 
 Sec. 305. Reason for rule as to prosiniate cause. :—Tlie reason 
 for holding a negligent party for the continuous, direct and 
 natural consequence of his wrongful act, though some of the 
 losses sustained thereby may, in respect to the successive causes 
 and effects, be remote from the first active producing cause, 
 has frequently been recognized and seems to be based upon the 
 soundest reasoning. It is true that the subject of causation 
 and tlie tracing of causes to results is, many times, one of great 
 difficulty. Every event is the result of certain causes, or com- 
 bination of causes, more or less remote. And there may be 
 great difficulty sometimes in tracing, or determining the legal 
 cause of a loss sustained, or in fixing a just rule of liability in such 
 cases. The law seems to permit the tracing back of the causes of 
 an injury to the party who first set in motion the dangerous 
 element which resulted in the damage.^ 
 
 Sec. 306. Same continued. — According to the reasoning in 
 some of the cases, a party whose building is ignited directly by cin- 
 ders, or fire sent forth by the neghgence of the agents of a railroad 
 company, may recover therefor ; but if the fire thus caused con- 
 tinues and burns another's buildings the company is not liable, onthe 
 ground that the latter loss is not the immediate or proximate result 
 of the first active and producing cause. But suppose the building first 
 
 examination of this question, we are the proximate cause, unless some new 
 satisfied, both upon reason and author- causes, independent of the first cause, 
 ity, that the damage is not too remote shall intervene between the first cause 
 to be recovered. We have already and the final injurious result. This is 
 decided that where the fire has run equally true where the successive 
 thirty rods from the place where it events are separated by clearer and 
 was first kindled, and there does better defined outlines than they are 
 damage, the plaintiff may recover. St. in the burning of ])rairie grass or a 
 Jo. & D. C. R. Co. V. Chase,ll Kans. stubble field. * * * Why should 
 47. Now, if the i:)laintiff may recover not every person, whether far away or 
 when the fire has run thirty rods, why near, recover for the wrongful acts of 
 may he not recover when the fire has another? Even if it should bankrupt 
 run forty rods, or a mile, or four miles ? the wrong-doer, would that be any rea- 
 Will it be claimed that the ownership son for not compensating an innocent 
 of the property over which the fire sufferer? As a question of ethics and 
 ]'uns can make any difference ? * * morals, as well as of law, where a 
 * The first efficient and adequate great loss is to be sustained by some- 
 cause, as well as every intermediate body, who should bear it, the innocent 
 cause, necessarily followed from the or the guilty ? " 
 first cause, is always held in law to be 
 
 'See opinioH of Shaw, Ch. J., in Wm. Black. 892 ; Big. L. Cas., L. T., 
 Marble v. City of Worcester, 4 Gray, note, p. 608. 
 365 ; Scott v. Shepherd, 3 Wils. 403 ; 3
 
 464 Pkivate Cokporations. 
 
 ignited by the carelessness of a railroad company or other person 
 is one of a continuous row of houses owned by A., B., C. and D.,. 
 and that the burning of the building of A., was througli the direct 
 act or negligence of sucli party, and that the destruction of tlie 
 others by the burning of the first was unavoidable, would B., C. 
 and D. be deprived of the right of recovery on the ground that 
 their loss was not the direct or proximate result of the wrongful 
 act of the railroad company or its agents ? Or, suppose that one 
 party owns fifty feet of a tenement, and another party owns 
 another fifty feet of the same, would a destrilction of the property 
 of the former by the willful act or the negligence of a party, and 
 the unavoidable destruction of the interests of the latter thereby, 
 exempt the wrong-doer from liability for the latter's loss, when he 
 in no manner contributed to the same and used due diligence to 
 avoid the loss ? We think, both upon the weight of authority 
 and of reason, that it would not ; and 'that the liability of the 
 wrong'-doer in such a case would be the same to the latter as the 
 former, whether it was an act of willful intention or of mere neg- 
 ligence. He should sustain the loss, who has set in motion the 
 dangerous element, or been the active cause of it. 
 
 Sec. 307 Complications arising from successive negligence. — Some 
 of the most complicated questions arising from the successive 
 negligence of different parties have been presented for adjudica- 
 tion. "Thus, suppose that through carelessness of a railroad 
 company, in not using a proper sj)ark arrester, sj^arks escape from 
 its locomotive, which, falling on dry rubbish, carelessly left by 
 another party scattered over his premises near the railroad, and, 
 fanned by the wind, it takes fire, and fed by the rubbish it is 
 driven by the wind to the buildings of another party, which are 
 thereby consumed, which party is liable for the loss ? " On this 
 question Mr. Wharton says : " Supposing that had it not been for 
 the intervention of a responsible third party, the defendant's neg- 
 ligence would have produced no damage to the plaintiff, is the 
 defendant liable to the plaintiff ? This question must be answered 
 in the negative, for the general reason that causal connection be- 
 tween negligence and damage is broken by the interposition of 
 independent responsible human action. I am negligent on a par-
 
 Liability of Corporations for Torts. 465 
 
 ticular subject-matter. Another person, moving independently, 
 comes in, and either negUgently or maliciously so acts as to make 
 my negligence injurious to a third person. If so, the person so 
 intervening acts as a non-conductor, and insulates my negligence, 
 so that I caimot be sued for the mischief which the person so 
 intervening directly produces. lie is the one who is liable to the 
 person injured. I may be liable to him for my negligence in 
 getting him into difficulty, but I am not liable to others for the 
 negligence which he alone was the cause of making operative." ' 
 The question here presented opens up to us the consideration 
 of the vast problems of causation. The chain of causation, 
 viewed in the light of philosophy and enlightened reason, is end- 
 less. All events are, when contemplated in this light, the results 
 of a combination of many antecedent causes. In the language of 
 Mr. Mill, " for every event there exists some combination of 
 objects or events, some given combination of objects and events, 
 some given concurrence of circumstances positive or negative, the 
 occurrence of which will always be followed by that phenomenon. 
 We may not have found out what this concurrence of circum- 
 stances may be, but we never doubt there is such a one, and that 
 it never occurs without having the phenomenon in question as its 
 effect or consequence. * * * It is seldom, if ever, between 
 a consequent and one single antecedent that this invariable 
 sequence subsists. It is usually between a consequent and the 
 sum of several antecedents, the concurrence of all of them being 
 requisite to produce, that is, to be certain of being followed by 
 the consequent. In such a case it is very common to single out 
 one only of the antecedents under the denomination of cause, 
 calling the others merely conditions." ' 
 
 Sec. 308. Rule of little practical value.— We may observe that 
 the maxim causa proxima et nan remota sjpectatui\ which 
 is frequently applied as a maxim to limit the liability of parties 
 for injuries or losses sustained, is an imperfect rule, and under 
 the decisions of the courts is practically disregarded in deter- 
 mining the limits of liability for a wrong done. We find 
 the chain of causation by successive links endless, and the 
 
 ' Wliart. on Neg. , § 134 et seq. ^ 1 Mill's Logic (2d Lond . ed.), 398. 
 
 59
 
 466 Private Corporations. 
 
 limitation of damages by the maxim to the proximate cause; 
 but we also find the courts, disregarding the literal interpre- 
 tation of the maxim, have extended the liability in numerous cases 
 to more remote consequences of a wrong. Is there a distinction, 
 as to approximate cause, between science and law ? Is there prac- 
 tically any line of limitation in respect to the remoteness of the 
 consequences of a wrong for wliich a wrong-doer is not liable ? 
 Or does this depend upon the motives of the wrong-doer, or the 
 deijrec or character of the wrong? 
 
 Take the famous Squib case, already cited, where the defend- 
 ant threw into the market place on fair day a squib, which differ- 
 ent parties, which we may designate as A,, B. and C, caught up, 
 and to avoid injury to themselves, threw away, until it struck and 
 destroyed the eye of the plaintiff. The whole movement of the 
 squib was, by a fiction of the law, or in a legal sense, considered 
 the act of the party wlio first threw it, although, but for the acts 
 of the other parties, the loss could not have happened. Again, 
 take the ease of Atchison, etc., R. Co. v. Stanford, ' where by the 
 negligence of a railroad company sparks emitted from a locomo- 
 tive of the railroad company set fire to grass, which sjDread over 
 the premises of several parties, and finally caught and consumed 
 the property of the plaintiff, and where the court held that the 
 loss was not too remote, and that the railroad company was liable." 
 
 Sec. 309. Same continued. — But a larger rule ot liability has 
 sometimes been recognized in case of the willful wrong-doing of 
 another, than in case of mere negligence. Thus, if a party should 
 willfully set fire to a building, he would undoubtedly be held to con- 
 template all the damages which legitimately followed therefrom, 
 and be responsible for all damages that resulted to any party, how- 
 ever remote or extended the result from the original act.^ And in 
 viewof this doctrine we have heretofore been led to affirm that the 
 rule of extended liability in such cases depends upon the motives of 
 the wrong-doer, or the degree of negligence manifested in the par- 
 ticular case ; * that the subject is too subtle to allow any definite line 
 
 1 12 Kans. 354. 3 Allison v. Chandler, 11 Mich. 542 ; 
 
 2 See, also, Kellogg V. Chicago, etc. , Field on Dam., §§53, 78 Mayne on 
 R. Co., 26 Wis. 223 ; Parley v. Eastern Dam. 25 et seq. 
 
 R. Co., 98 Mass. 415. * Field on Dam., § 53.
 
 Liability of Corporations for Torts. 467 
 
 of liability to be drawn,' and that '" there is a tendency to recognize 
 a rule on this subject of liability for the consequences of a wrong 
 somewhat flexible and elastic, varying in cases of torts, as we shall 
 have occasion to notice more fully hereafter, with the motives of 
 the wrong-doer, and covering more or less extended and remote 
 consequences depending on the character, grade or degree of the 
 wrong done." ^ And it has also been stated in a legal proposition 
 that, "in cases of oflicious interference with property, willful 
 wrongs, frauds or gross negligence, the liability may extend to 
 remote effects and losses, even those that are the result of a natu- 
 ral chain of effects, produced and caused by the original wrong." ' 
 
 Sec. 310. In cases of the positive negligence of a party, where 
 there is loss sustained, even though it immediately results from 
 the passive negligence of an intervening party, it seems to me 
 more consonant with principles of justice to hold the party 
 responsible who set in motion the dangerous element, that, al- 
 though affected by intervening causes, j^roduced the result ; that 
 where, except for the negligence of an intervening party, the 
 loss would not have occurred, still, if the negligence of such 
 party would not have resulted in any loss, except for the positive 
 and active negligence or willful act of another, who set in motion 
 or was the active creator of causes, but for which the passive 
 negligence of another would have resulted in no injury, but by 
 which and through such negligence or willful act a loss finally 
 results to another, the party negligently or willfully acting or 
 originally setting in motion the cause of injury, should be held 
 responsible for all the natural, probable and legitimate conse- 
 quences of such wrongful act and especially in cases of willful and 
 intentional wrong, for all the consequences thereof, however 
 remote/ 
 
 Sec. 311. Damages generally in cases of torts. — We have stated 
 that a corporation should be liable to damages for its torts the 
 same as a natural person. The measure of damages would, of 
 
 1 Field on Dam., g 33. 391 ; Saxton v. Bacon, 31 Vt. 540 ; 
 
 2 Field on Dam., J^ 18. West v. Forrest, 23 Mo. 344. 
 
 3 McDaniel v. Emanuel, 2 Rich. (S. •» Field on Dam., s>§ 52, 53, 78 ; Mayne 
 C.) 455 ; Strawbridg-e v. Turner, 9 La. on Dam. 25 et seq. 
 
 213; Powell v. Salisbury, 2 Y. & J.
 
 468 Private Corporations. 
 
 course, be the same ; but some ilhistrations of this subject may 
 be beneticial although it more appropriately belongs to a treatise 
 especially devoted to the law of damages.^ 
 
 In case of injury to the person of another from the negligence 
 of a railroad or other corporation, to which the plaintiff did not 
 in any material manner contribute, the elements of damages may 
 be summarized as follows : 
 
 1. Loss of services during the time the injured party is inca- 
 pacitated.^ 
 
 2. Expenses of medical, surgical and other attendance/ 
 
 3. Bodily pain and mental anguish/ 
 
 4. Permanent disability which the jury may take into consider- 
 ation in estimating the present damages/ 
 
 5. Exemplary damages where such are allowable by the law of 
 the locality where the trial is had and where the circumstances of 
 the case authorize it/ 
 
 Sec, 312. When injury is of permanent nature. — In relation tO 
 permanent injury as an element of damages it may be ob- 
 served that damages " although generally limited to the in- 
 juiy at or before the commencement of the suit, or to the 
 time of trial, yet it frequently occurs that in determining 
 the present injury matters of a prospective character must 
 also be considered, and particularly where the injury is of a per- 
 manent character, damages for the future injury should be allowed. 
 Thus, where the claim was for breaking a leg, it was held proper 
 to show the probable future condition of the limb but not the 
 
 ' Field on Damages, chap. 20 ; Sedg. anofuisli was a proper element of ae- 
 on Dam. 99 et seq. tual damages. 
 
 '^ Wade V. Leroy, 20 How. 34 ; Morse ^ Masters v. Warren, 27 Conn 293 ; 
 
 V, Auburn, etc., R. Co., 10 Barb. 621, Seger v. Barkhamstead, 22 id. 290; 
 
 Holyoke v. Grand Trunk R. Co.,48N. Wade v. Leroy, 20 How. 34 ; Curtis 
 
 H. 541. V. Rochester, etc., R. Co., 18 N. Y, 
 
 2 Peoria Bridge Association v. 534. 
 
 Loomis, 20 111. 235; Beardsley v. « vVi^ters v. Hannibal, etc, R. Co., 39 
 
 Swann, 4 McLean, 333, Ransom v. Mo. 468 ; Field on Dam., ^^^ 614, 667 fit 
 
 New York, etc., R. Co. , 15 N. Y. 415 ; seq., and notes; Mendelsohn v. Anaheim 
 
 Moody V. Osgood, 50 Barb. 628. Lighter Co.. 40 Cal. 657 ; Southern R. 
 
 * Ranson v. N. Y. & Erie R. Co., 15 Co. v. Keudrick,40 Miss. 374; Atlantic, 
 
 N. Y.41o; Curtissv. Rochester, etc.,R. etc., R. Co. v. Dunn, 19 Ohio St. 162 ; 
 
 Co., 20 Barb. 282 ; Linsley v. Bushnell, Goddard v. Grand T. R. Co., 57 Me. 
 
 15 Conn. 225 ; West v. Forrest, 22 Mo. 202 ; Belknap v. Boston, etc., R. Co., 49 
 
 844 ; McKinley v. The Chicatro & N. N. H. 358 ; Caldwell v. N. J. Steam 
 
 W. R. Co., 44 Iowa, 314, where it was B. Co., 47 N. Y. 283. 
 held, among other things, that mental
 
 Liability of Corporations for Torts. 
 
 469 
 
 consequences of a liypothctical second fracture.' In such a case 
 it is proper also to consider diiuiiiished capacity to work at the 
 plaintiffs trade, arising from the injury." " 
 
 Sec. 313. Exemplary damages. — The application of the doctrine 
 of exemplary damages to corporations has been attended with 
 much difficulty. The reason for allowing them assigned by its 
 advocates would hardly seem applicable to them, viz. : that of 
 punishing the wrong-doer. For wrong implies at least a mali- 
 cious intent, but how can it be said that an ideal and imaginary 
 person can have a mind which cherishes malice, or an evil or 
 wrongful intent. The general rule in reference to exemplary 
 damages has been thus stated : " For torts, under circumstances 
 of great aggravation, the jury, in addition to such actual damages 
 as they may iind the injured party entitled to, * * * may 
 fm'ther allow for an example to others and a punishment of the 
 wrong-doer, exemplary or punitive damages." ' The damages 
 
 1 Lincoln v. Saratoga R.Co.,23 Wend. 
 425. See, also, Johnson v. Perry, 2 
 Humph. 572; Curtiss v. Rochester, etc., 
 R. Co., 20 Barb. 282. 
 
 ^ Donell V. Sandford, 11 La. Ann. 
 645. See, also, Filer v. The N. Y. 
 Cent. R. Co., 49 N. Y. 43 ; Toledo, 
 etc., R. Co. V. Baddeley, 54 111. 19 ; 
 Frink v. Schroyer, 18 id. 416 ; Slater 
 V. Rink, id. 527 ; Passenger R. Co. v. 
 Donahue, 70 Penn. St. 119 ; Kansas 
 Pac. R. Co, V. Pointer, 9 Kans. 620 ; 
 City of Chicago v. Langlass, 52 111. 
 256; Fair v. Lond. & N. W. R. Co., 21 
 L. T. (N. S.) 326 ; Holyoke v. Railway 
 Co., 48 N. H. 541 ; Weisenberg v. 
 City of Appleton, 26 Wis. 56. 
 
 The same doctrine is held applicable 
 to injuries sustained by the negligence 
 of a municipal corporation. Peoria 
 Bridge Assoc, v. Loomis, 20 111. 235 ; 
 Hunt V. Hoyt, id . 544 ; Mason v. The 
 Inhabitants'of Ellsworth, 32 Me. 271 ; 
 City of Ripon v. Bittel, 30 Wis. 614; 
 Nebraska City v. Campbell, 2 Black. 
 590. See, also, Morse v. Auburn & S. 
 R. Co., 10 Barb. 621 ; Rawsou v. N. Y. 
 & Erie R. Co., 15 N. Y. 415 ; Keyes 
 V. Devlin, 3 E. D. S. 518 ; Bannon v. 
 Baltimore & 0. R. Co., 24 Md. 108 ; 
 Seger v. Barkhamsted, 22 Conn. 290 ; 
 Lawrence x. Housatonic R. Co., 29 
 id. 390; Fairchilds v. Cal. Stage 
 
 Co., 18 Cal. 599 ; Pennsylvania Canal 
 Co. V. Graham, 63 Penn. St. 290 
 Smith V. Holcomb, 99 Mass. 552 
 Holvoke V. Grand T. R. Co., 48 N. H 
 541 ; Stockton v. Frye, 4 Gill, 406 
 Matteson v. N. Y. C. R. Co., 62 Barb 
 364; Smith v. Overby, 30 Ga. 241 
 Cox V. Vanderkleed, 21 lud 164 
 McGrew v. Stone, 53 Penn. St. 436 
 Ballou V. Farnum.ll Allen, 73 ; Cald 
 well V. Murphy, 1 Duer, 233 ; 11 N. Y 
 416 ; Kinney v. Crocker, 18 Wis. 74 
 Hanover R. Co. v. Coyle, 55 Penn. St. 
 396; Aaron v. Second Ave. R. Co., 3 
 Daly, 127 ; Aldrich v. Palmer, 24 Cal. 
 513 ; Wheaton v. North Beach R. Co., 
 36 id. 590 ; Illinois C. R. Co. v. Barron, 
 5 Wall. 90 ; Page v. Mitchel, 13 Mich. 
 63 ; Joslyn v. McAllister, 22 id. 300. 
 
 * Field on Dam., ^ 32. In a note to 
 this section it is observed : ' 'Although 
 the author has felt compelled from the 
 preponderance of authority to thus 
 state the rule, he would also express 
 his convictions that the adoption of the 
 doctrine was a departure from the true 
 principles of the law of damages and 
 of public policy and a flaw in the 
 structure of our jurisprudence, involv- 
 ing much controversy, and resulting in 
 confusion and uncertainty. Nor is the 
 doctrine by any means so deeply rooted 
 in the common law, as to be placed
 
 470 Private Cokpokations. 
 
 awarded are perliaps in most cases the same whctlicr the doctrine 
 of exemplary damages as advocated by Mr. Sedgwick, or the doc- 
 trine of actual damages as maintained by Mr. Greenleaf, be 
 adopted. ' 
 
 Sec. 314. Same continued. — According to the doctrine of actual 
 damages only, tlie rule adopted would give adequate damages, not 
 only for those pecuniary losses sustained which may be capable of a 
 certain and definite pecuniary estimate, such as loss of time, clothing, 
 and expenses of medical and other attendance, necessarily sustained 
 and incurred by reason of the wrong of the defendant, but also 
 for those other indefinite and uncertain damages not capable of 
 definite pecuniary estimate, such as injury to the person, mental 
 agony, lacerated feelings, disappointed hopes, and paternal affec- 
 tions. These elements of damages also usually enter into the 
 estimate and determine the amount of exemplary damages allowed 
 by them. The general result, therefore, may be practically the 
 same ; or we may say, in the language of Mr. Justice Cole : 
 " The controversy on this subject between Prof. Greenleaf and 
 Mr. Sedgwick may, perhaps, after all the attention and discussion 
 it has excited, be found to be a controvers}^ as to the terminology 
 of the law rather than as to the extent of the right of recovery 
 or the real measure of damages. Prof. Greenleaf holds that, 
 while the plaintiff can only recover compensation, he is not con- 
 fined to the proof of actual pecuniary loss, but that the jury may 
 take into consideration every circumstance of the act which injuri- 
 ously affected the plaintiff not only in his property but in his per- 
 son, in his peace of mind, his quiet and sense of security in the 
 enjoyment of his rights ; in short, his happiness. But it must 
 affect his happiness and not his neighbor's ; and therefore to this 
 question alone the jury should be restricted. While Mr. Sedg- 
 wick holds that " wherever the elements of fraud, malice, gross 
 negligence or oppression mingle in the controversy, the law^, 
 instead of adhering to the system or even the language of com- 
 
 beyond the bounds of controversy." id., ^§ 73, 74,76,77. See, also. Fay 
 Field on Dam., § 83, note 1. See, also, v. Parker, 53 N. H. 342. 
 
 ' See Sedg. on Dam. (3d ed.) Appendix and note ; 2 Qreenl. on Ev., ^S 266, 
 267 ; Field on Uam., §§ 26, 73, 74, 76. 
 
 1
 
 Liability of Coeporations for Torts. 471 
 
 pensation, adopts a wholly different rule. It permits the jury to 
 give what it terms punitory, vindictive, or exemplary damages ; 
 in other words, blends together the interests of society and the 
 aggrieved individual, and gives damages, not only to recomnense 
 the sufferer, but to punish the offender." ^ 
 
 Sec. 315. Application of the doctrine to private corporations. — We 
 have already intimated that the doctrine of exemplary damages 
 loses much of its force when it is sought to apply it to corpora- 
 tions ; for as corporate acts, whether tortious or otherwise, must 
 be done by agents, and the corporate body is but an imaginary one, 
 without a physical or mental organization, it is a mere fiction of 
 the law which supposes them capable of a wrongful intent. But, 
 notwithstanding this, they are frequently held liable in a civil 
 action, like natural persons, for the negligence and even for the 
 wanton and malicious acts of their servants or agents, when com- 
 mitted in the line of their employment or within the scope of 
 their duty. 
 
 Great extremes of views are, however, held by various decis- 
 ions on the question of liability of coi-porations for exemplary 
 damages. But many cases which have been assumed to sustain 
 the doctrine are not clear as to the true basis of damages in such 
 cases ; and if it is evident that some of them rest upon the gross 
 negligence of the agents or persons that may be held to represent 
 the corporation in employing, or knowingly continuing incompe- 
 tent agents in their employment, and the liability in some cases 
 is made to rest upon grounds of public policy.^ 
 
 In others, the right to exemplary damages rests upon some 
 positive direction or authority of the company, or upon some 
 su])sequent indorsement or approval of the acts of the agent,' and 
 in others the doctrine is held to be applicable, even where the 
 tort is neither authorized nor ratified, as, unlike natural persons, 
 corporations can be subject to no other corrective influence than 
 pecuniary loss.* 
 
 ' Hendrickson v. Kingsbury, 31 Iowa, well v. N. J. Steamboat Co., 47 N. Y. 
 
 379. 282 ; Hagan v. Providence R Co., 3 R. 
 
 '' Field on Dam., § 87 ; Sbearm. & I. 88 ; Belknap v. Boston, etc., R. Co., 
 
 Redf. on Neg., $§ 60D, 601, and notes. 49 N. H. 358. 
 
 3 Field on Dam., § 85 et seq. ; Cald- ■* Field on Dam.. § 85.
 
 472 Private Corporations. 
 
 Sec. 316. Extreme doctrine of liability for exemplary damages. — 
 The application of rules relating both to ordinary and exemplary 
 damages against eoi'porations are most common in case of the negli- 
 gence of the servants and agents of railroad corporations. Their 
 servants and agents are generally very numerous, and their duties 
 are frequently important, and require the exercise of much care 
 and judgment. 
 
 In a recent case in Maine, where a brakeman grossly insulted a 
 passenger, and the railroad company was sued therefor, the 
 supreme court of that state held the following extreme doctrine 
 on this subject : " We confess that it seems to us that there is 
 no class of cases where the doctrine of exemplary damages can be 
 more beneficially applied than to railroad coi-porations, in their 
 capacity of common carriers of passengers, and might as well not 
 be applied to them at all, as to limit its application to cases where 
 the servant is directly or impliedly commanded by the corporation 
 to maltreat and insult a passenger, or to cases where such an act 
 is directly or impliedly ratified, for no such cases will ever occur. 
 A corporation is an imaginary being. It has no mind but the 
 mind of its servants. All of its schemes of mischief, as well as 
 its schemes of public enterprise, are conceived by human minds, 
 executed by human hands ; and these minds and hands are its ser- 
 vants' minds and hands. All attempts, therefore, to distinguish 
 between the guilt of the servant and the guilt of the corporation, 
 or the malice of the servant and the malice of the corporation, or 
 the punishment of the servant and the punishment of the corpo- 
 ration, is sheer nonsense, and only tends to confuse the mind and 
 confound the judgment. Neither guilt, malice, nor suffering, is 
 predicable of this ideal existence called a corporation. And yet, 
 under cover of its name and authority, there is as much that is 
 deserving of punishment as can be found anywhere else. And 
 since these ideal existences can neither be hung, imprisoned, 
 whipped, or put in the stocks — since no coercive influence can be 
 brought to bear upon them except that of pecuniary loss — it does 
 seem to us that the doctrine of exemplary damages is more bene- 
 ficial in its application to them than in its application to natural 
 persons." ^ 
 
 1 Walton, J., in Goddard v. Grand road Co. v. Hurst, 36 Miss. 660 ; Ptail- 
 T. R. Co., 57 Me. 202. See, also. Rail- road Co. v. Blocher, 27 Md. 277.
 
 Liability of Corporations for Torts. 473 
 
 But the weight of authority, in order to hold the corporation 
 liable for exeuiplary or punitive damages, would seem to require 
 that the corporation either consent to, or authorize, or ratify 
 the tort of the servant ; the same as would be required, if the 
 wrong were done by a natural person, in order to visit on him 
 exemplary damages.' Why punish the principal, who has not 
 done the injury, or had any such purpose, and is personally free 
 from fault; and especially where there are no circumstances indi- 
 cating any want of care, or any negligence in fact on his part." 
 But it has been held that the corporation may be guilty of gross 
 negligence, so as to authorize the imposition of exemplary damages 
 where it knowingly permits an incompetent or unfit agent to con- 
 tinue in the business of the corporation, and where the injury, 
 coming within the class of cases that authorizes exemplary dam- 
 ages, was the result of such incompetence and unfitness.' In 
 the case of Goddard v. Grand Trunk R. Co., the decision might 
 perhaps have rested upon the doctrine of indorsement of the acts 
 of the agent.'' On this subject the court of appeals of New York 
 observe : " For injuries by the negligence of a servant, while 
 engaged in the business of the master, within the scope of his 
 employment, the latter is liable for compensatory damages ; but 
 for such negligence, however gross or culpable, he is not liable to 
 be punished in punitive damages, unless he is also chargeable 
 with gross misconduct. Such misconduct may be established by 
 showing that the act of the servant was authorized or ratified, or 
 that the master employed or retained the servant, knowing that 
 
 •Caldwell v. New Jersey Steamboat Co., 49 N. H. 358; Bowler v. Lane, 3 
 
 Co., 47 N. Y. 282; Mendelsohn v. Mete. (Ky.) 311. 
 
 Anaheim Lighter Co. , 40 Cal. 657 ; ^ Field on Damages, g 86 ; Shearm. 
 
 Turner v. North Beach R. Co., 34 id. & Redf. on Neg., § 601. 
 
 594 ; Hill V. N. 0., etc., R. Co., 11 ^Id. See, also, Shearm. & Redf. on 
 
 La. Ann. 292; Milwaukee, etc., R. Negl., g^ 600. 601, and notes. 
 
 Co. V. Finney, 10 Wis. 388; Boulard ^See Field on Damages, § 87 and 
 
 V. Calhoun, 13 La. Ann. 445 ; Hagan notes. In a more recent and a more 
 
 V. Providence R. Co., 3 R. I. 88; temperate opinion, the same learned 
 
 Evansville, etc., R. Co. v. Baura, 26 judge maintains the views expressed 
 
 lud. 70; Clark v. Newsam, 1 Exch. in Goddard v. Grand T. R. Co., supra. 
 
 131 ; Ackerson v. Erie R. Co., 32 N. J. See opinion Walton, J., in Hanson v. 
 
 L. 254 : Belknap v. Boston, etc., R, Railroad Co., 62 Me. 84. 
 
 60
 
 474 Private Corporations. 
 
 he was incompetent, or from bad habits, unfit for the position he 
 occupied.'- ^ 
 
 Sec. 317. Gross negligence which authorizes exemplary damages. — 
 In order to authoiizc exemplary damages for negligence under 
 any circumstances, the negligence should be very flagrant and cul- 
 pable, or the circumstances must show a very reckless indifference 
 to duty or utter want of regard for persons or their property, 
 from which it has been held that malice may be well inferred or 
 imputed to the defendant.'^ Mere gross negligence is held not to 
 be sufficient to warrant exemplary damages, even where the gen- 
 eral doctrine is recognized ; but the negligence must be so gross 
 as to raise a presumption that the party in fault is conscious of 
 the probable consequences of his negligence or carelessness, and 
 is indifferent to the injury likely to follow.' And the corporation 
 cannot in any case be liable for punitive damages for the acts of 
 an agent where the agent liim.self would not be liable, were the 
 suit brought against the agent himself,* 
 
 Sec. 318. inconsistency of the rule in its application to corporations. — 
 
 The difficulty and inconsistency, if not the absurdity of the appli- 
 cation of the doctrine of exemplary damages, especially to cor- 
 porations, has been frequently referred to and maintained by the 
 
 'Clegliorn v. N. Y. Cpnt., etc., R. etc., R. Co., 56 N. Y. 44; Caldwell v. 
 
 Co.. 56 N. Y. 44. N. J. Steamboat R. Co., 47 id. 296. 
 
 ^ Field on Dam., §84. See, also, ''Ackerson v. Erie R. Co., 3 Vroom, 
 
 Welch V. Durand, 36 Conn. 182; 254 ; Hamilton v. Third Ave. R. Co., 53 
 
 Walker V. Erie R. Co., 63 Barb. 260; N. Y. 25 ; Townsend v. N. Y. Cent. 
 
 Farwell v. Warren, 51 111. 467 ; Green R. Co., 56 id. 295. See, also, further 
 
 V. Craig, 47 Mo. 90; New Orleans, on the subject of corporate liability for 
 
 etc., R. Co. V. Statham, 42 Miss. 607; exemplary damages, Hopkins v. A. & 
 
 Picket V. Crook, 20 Wis. 358 ; Holvoke St. R. Co. , 36 N. H. 9 : Taylor v. Rail- 
 
 V. Grand Trunk R. Co., 48 N. H. 544. way Co., 48 id. 304 ; Bannon v. Balti- 
 
 3 Wallace v. Mayor, etc., 2 Hilt. 440; more, etc., R. Co. , 24 Md. 108 ; Balti- 
 
 Heil V. Glanding, 42 Penu. St. 493 ; more, etc., R. Co. v. Blocher, 27 id. 
 
 Caldwell v. New Jersey Steamboat 277 ; Vicksburg, etc., R. Co. v. Patton, 
 
 Co., 47 N. Y. 282 ; Cochrane v. Miller, 31 Miss. 156 ; New Orleans, etc. , R. 
 
 13 Iowa, 128 ; Brannon v. Baltimore R. Co. v. Hurst, 36 id. 660 ; Hill v. New 
 
 Co., 47 N. Y. 280 : Vicksburg Railroad Orleans, etc., R. Co., 11 La. Ann. 445 ; 
 
 Co. V. Fatton, 31 Miss. 156. See, also, Jeffersonville, etc., R. Co. v. Rogers, 
 
 the English cases, Emblen v. Myers, 6 38 Ind. 116 ; Atlantic, etc., R. Co. v. 
 
 H. & N. 54 ; 3 L. J. Exch.71 ; Bell Dunn, 19 Ohio St. 162 ; Frink v. Coe, 
 
 V. Midland, etc., R. Co., 9 W. R. 612 ; 4 Greene (Iowa). 555 ; Perkins v. Mis- 
 
 10 C. B. (N. S.) 287 ; 3 L. J. C. P. 73. souri, etc. , R. Co., 55 xMo. 201 ; Sedg. 
 
 See, also, Cleghorn v. N. Y. Cent., on Dam. SCiQetseq.
 
 Liability of Corporations for Torts. 475 
 
 most conclusive reasoning. The doctrine is based upon the sup- 
 position of willful wrong, or wicked intention. It supposes the 
 purpose to do wrong. And the ground for the infliction of ex- 
 emplary damages is in the nature of a punishment for that wrong, 
 and also to thereby afford an example to others. But how can a 
 corporation be guilty of a moral wrong ? And on what princi- 
 ple can a corporation be held for exemplary damages for the 
 moral wrongs of its servant to which it has in no way contrib- 
 uted, nor of which it has in no manner approved? In the able 
 dissenting opinion of Mr. Justice Tapley, in Goddard v. Grand 
 Railroad Company (from which we have already quoted from 
 the opinion of the majority of the court, as given by Mr. Jus- 
 tice Walton), he observes : " The theory of punitive dam- 
 ages is the infliction of a punishment for an offense commit- 
 ted. It presupposes the existence of a moral wrong, an infraction 
 of the moral code ; a wrong in which the community has some 
 interest in the redress and in securing immunity from in the 
 future. It presupposes also an offender, and designs to punish 
 that offender. To punish one not an offender is against the whole 
 theory, policy and practice of the law and its administration. 
 * * * The idea of punishing one who is not particeps 
 criminis in the wrong done is so entirely devoid of the first 
 principles and fundamental elements of the law, that it can 
 never find place among the rules of action in an intelligent 
 community." ' 
 
 The absurdity thus presented and, in fact, the apparent want 
 of foundation of the doctrine on any sound principle, has recently 
 led to full and exhaustive consideration of the whole subject ; and 
 in a recent case in ]!^ew Hampshire, where there had been an 
 apparent if not a complete recognition of the doctrine, the 
 supreme court of that State entirely repudiated it, as unsound 
 in principle and entirely unnecessary in the measm-e of 
 adequate damages, even in cases of the most aggravated torts. 
 
 OEC. ol9. Recent examination of the doctrine of exemplsiry damages. 
 
 — In the case above referred to, there was a critical examination 
 of this doctrine and a review of the authorities beai-ing upon it, 
 
 ' See dissenting opinion of Tapley, J., in Goddard v. Grand Trunk R. Co., 
 57 Me. 203.
 
 476 Private Coepoeations. 
 
 and Mr. Justice Nelson, wlio delivci-ed the opinion, observes : 
 " Perhaps it would not be erroneous to say that the question has 
 not been thoroughly examined and very carefully considered, but 
 it has been suffered to lean upon and sustain itself by the sup- 
 posed weight of authorit}', rather than to stand upon principle 
 and inherent strength. At any rate, in view of the more recent 
 cases, wholly contradicting and irreconcilable as we have seen 
 them to be, * * * we are constrained to adopt the language 
 of Judge Gushing, in Symonds v. Carter, ^ and to say, * * * 
 ' The doctrine in regard to vindictive damages seems to be now in 
 such an unsettled condition as to justify and call for an examina- 
 tion of the authorities.' " "^ And after a review of various authori- 
 ties supposed to sustain the doctrine, he proceeds to observe : 
 " This review of some of the prominent cases touching the sub- 
 ject under consideration, it seems to me, must compel the conclu- 
 sion which has already been indicated, that the modern erroneous 
 idea of exemplary damages originated in, and is, in fact, the same 
 thing as damages for wounded feelings, as distinguished from 
 damages for an injury to the person or property. Damages for 
 lacerated sensibilities, insulted honor, tyrannical oppression, and so 
 forth, being much emphasized, and often being the principal 
 damage suffered by the plaintiff, and language being loosely used 
 and not preserving the true distinction carefully, or intemperately 
 used, in the heat of indignation, which judges often felt and 
 could not repress while contemplating an enormous outrage, it 
 finally came to be understood that damages might be given in a 
 civil suit, as a punishment for an offense against the public, an 
 idea that is certainly not plainly declared (as I think I have un- 
 mistakably shown) in the early cases. * * * The result is, 
 that the wholesale doctiine of damages for mental pain and 
 wounded feeling, expressed in inconsiderate language vehemently 
 announced, under circumstances and on occasions of judicial 
 anger, irritation and excitement, has come to be misunderstood 
 and mistaken for the doctrine of punitive damages, when, in fact, 
 it is but a branch of the law of compensatory damages. * * * 
 Thus, the doctrine of compensation for the plaintiff has become 
 the doctrine of punishment for the defendant, importing into 
 
 ' 32 N. H. 458. •' Fay v. Parker, 53 N. H. 342.
 
 Liability of Corporations for Torts. 477 
 
 civil suits that punishment which still remains in criminal proced- 
 ure ; and so, unfairly and unconstitutionally, as well as illogically, 
 punishing an ofiender twice for the same crime. * * '" What 
 is civ'il remedy but reparation for the wrong inflicted to the injury 
 of the party seeking redress, compensation for damages sustained 
 by the plaintiff ? How could the idea of punishment be deliber- 
 ately and designedly installed as a doctrine of civil remedies ? 
 Is not punishment out of place, irregular, anomalous, exceptional, 
 unjust, unscientific, not to say absurd and ridiculous, when classed 
 among civil remedies? What kind of a civil remedy for the 
 plaintiff is the punishment of the defendant ? The idea is wrong. 
 It is monstrous heresy. It is an unsightly and an unhealthy 
 excrescence, deforming the symmetry of the body of the law." ^ 
 
 Sec. 320. The conclusions, in the opinion of the court in the 
 case last referred to, are strongly supported by the doctrines, and 
 the principles and elements of damages, announced by the early 
 writers. It was, for instance, affirmed by Mr. Rutherford, over 
 a hundred years ago, that damages was every loss or diminution 
 of what was a man's own, occasioned by the fault of another ; 
 that a loss or diminution of a man's right to life, limbs, liberty, 
 character and reputation, through the fault of another, gives him 
 a right to demand reparation from him by whose fault they have 
 been lost or diminished ; that the person who has been maimed has a 
 right to enjoy the freedom from pain thus caused, and that he 
 has a right to demand smart money, that is, indemnity in money 
 for the smarts or pains caused by such wrongful act ; that he 
 should be entitled to recover such money, for blemishes which 
 remain after the original smart or pain is over ; that if a person 
 has been wounded without cause, he should recover, not only for 
 the loss of time and expense of cure, but for the pain he has felt ; 
 that if he has been beaten, but has sustained no loss of time, or 
 incurred no expense thereby, he is still entitled to recover smart 
 money, or satisfaction for the pain he has suffered ; and that, if he 
 has been unlawfully imprisoned, " the mere uneasiness ai'ising 
 from the situation under which he may include the disgrace at- 
 tendino; it is a damao-e to him." ^ 
 
 1 Fay V. Parker, 53 N. H. 343. - See Rutherford's Ins., B. l,chap. 17, 
 
 §§1,10.
 
 478 Private Corporations. 
 
 Sec. 321. The term '■^ smart money " has frequently been used 
 in modern decisions as synonymous with exemphiry or punitive 
 damages ; and to indicate damages given to punisli the offender^ 
 and as an example to others. But referring to the meaning con- 
 veyed by the term ''^ smart money ^'' as used by Mr. Rutherford, 
 we formerly observed : " We may here discover tlie origin of the 
 term " smart Tnoney^'' which was evidently used in England over 
 a hundred years ago, and especially by this distinguished author, 
 in a different legal sense from the one now conveyed by its use, 
 in connection with damages. It was then used to convey the idea 
 of mere compensation for suffering or smarts^ physical or mental, 
 which an injured person suffered, and not to indicate a punish- 
 ment of the wrong-doer, neither to make him smart for his wrong 
 done, nor to deter others from a repetition of similar wrongs. 
 The doctrine, even in cases of aggravated wrongs, was that of 
 reparation and compensation, and no't that of punishment or 
 example." ^ 
 
 Sec. 322. Conflict growing out of the diverse rvdes. — Considerable 
 conflict and inharmony has resulted in the adoption of different 
 views and rules for the measure of damages. On the grounds 
 and for the reasons to which we have referred, against the appli- 
 cation of the doctrine of exemplary damages, in general, its appli- 
 cation to corporations seems unnecessary. And the rejection of 
 mental suffering, resulting from indignity to the person or outrage, 
 under circumstances of aggravation, as an element of actual damages 
 presents the strange anomaly of the possibility of the most intense 
 and protracted mental suffering, caused by the wrongful act of an- 
 other, without any remedy therefor. But where the doctrine of 
 mere compensation for the losses sustained is only recognized, this 
 is extended to cover all those results of injury, and incidental losses, 
 such as injury to the feelings and affections, wounded pride, mental 
 agony and suffering, which are not susceptible of any exact pecun- 
 iary estimate ; and which, where the doctrine of exemplary damages 
 is recognized, is usually covered in a general way by an allowance 
 of exemplary damages, notwithstanding the jurors in estimating 
 
 > Field on Dam., § 74. See, also, 447 ; McKinley v. The Chicago & N. 
 Detroit Post Co. v. Mc Arthur, 16 Mich. W. R. Co., 44 Iowa [not published].
 
 Liability of Corporations for Torts. 479 
 
 these, in fact, take into consideration all the circumstances of 
 aggravation and suffering, in determining the proper amount of 
 them. 
 
 After some controversy and confusion in relation to this mat- 
 ter, there seems, however, to be a tendency of the courts, even 
 where the doctrine of exemplary damages is recognized, to allow 
 mental suffering as an element of actual damage.^ 
 
 Sec. 323. Damages for injuries resulting in death. — The generally 
 recognized common-law doctrine, that although a party miglit re- 
 cover full compensation at least for an injury to his person, still, if 
 the injury was so severe that death ensued, nothing could be recov- 
 ered, has recently been assailed as based npon a mere dictum of 
 Lord Ellenborough, and as unfounded in reason." 
 
 But not only in England, but in the various states, there are 
 statutes providing that actions may be maintained by the repre- 
 sentatives of deceased persons, for damages sustained by the 
 widow, next of kin, or estate of the deceased, or some of them, by 
 reason of the wrongful act of the defendant producing the 
 death.^ Under these statutes there hav^e been, on varions impor- 
 tant questions, presented for adjudication a great uniformity in the 
 decisions. For instance, in the absence of special statutory regu- 
 lations on the subject contained in these statutes, it has uniformly 
 been held that only actual and not exemplary damages can be 
 recovered ; that nothing can be recovered for the physical or 
 mental sufferings of the deceased, or for the sorrow, suffering or 
 grief of the parties entitled to the benefit of the statutes ; * that 
 
 ' See McKinleyv. The Chic. &N.W. & N. 653; S. C, Franklin v. S. E. 
 
 R. Co., 44 Iowa [not published]; Fay v. Railway Co., 3 H. & N. 311 ; Blake v. 
 
 Parker, supra. Mid. R. Co., 18 Q. B. 93 ; Gillard v. 
 
 '■'See opinion of Lord Ellenbor- The Lancashire, etc., R, Co., 13 L. T. 
 
 OUGH, in Baker v. Bolton, 1 Camp. 498. 356. 
 
 See opposing views, Dillon, J., in Sulli- For decisions under various statutes 
 
 van v.UnionP. R.Co.,3 Dillon, ;J34, U.S. of the states see Pennsylvania, etc., R. 
 
 C. C.,Dist. Neb.. Oct. T.,1874; 1 Cent. Co. v. McCloskey, 38 Penn. St. 536; 
 
 L. J. 595 ; Jones v. Perry, 3 Esp. 483: Same v. Zebe,33 id. 318; Same v.Kelly, 
 
 Cross V. Guthrey, 3 Root (Conn.), 90. 31 id. 373 ; Same v. Vandever, 36 id. 
 
 Also discussions in 1 Cent. L. J. 590, 398; Same v. Henderson, 51 id. 315; 
 
 614, 633; Field on Dam., § 626. North Pennsylvania R. Co. v. Robin- 
 
 ^ For copies of the various statutes son, 44 id. 175 ; Cleveland, etc., R. Co. 
 
 relating to this subject, see Field on v. Rowan, 66 id. 393; Whitford v. 
 
 Dam., gi^ 337, 338, 399 and notes. Panama R. Co., 23 N. Y. 465 ; Quinv. 
 
 ''See decisions under the English Moore, 15 id. 433 ; Mclntyre v. N. Y. 
 
 statutes, Duckworth v, Johnson, 4 H. Cent. R. Co., 47 Barb. 515; Lehman
 
 480 Private Corporations. 
 
 damages can only embrace those matters that are the sonrce of 
 pecuniary injury to tlie persons for wiiose benelit the statutes were 
 intended, but that the jury have great latitude in estimating such 
 damages ; ' that nothing can be allowed by way of solatium for 
 grief or loss of society ; ^ and that the jury cannot consider, in an 
 action for the death of a wife, the loss of her society, or the hus- 
 band's mental suffering, as an element of damages.* 
 
 Sec. 324. Elements of damages in case of death; what it is compe- 
 tent to show. — In case of liability under the statutes for the death 
 of a person, it has been held that it was competent to show the 
 value of the life of the deceased to the parties entitled to recover 
 therefor ; * the loss of personal care and training, and intellectual 
 and moral culture which would have been received had the 
 deceased lived; "the exact situation, annual earnings, habits, 
 health and estate of the deceased ; the profits of his labor or busi- 
 ness ; what he would have earned for the support of those en- 
 titled to recover, or for the estate, as the case may be, and the 
 probability or reasonable expectation of the life of the deceased 
 at the time of the injury, and which may be determined by refei'- 
 ence to the ' Carlisle ' or other tables of recognized scientific accu- 
 racy relating to the expectation of human life." ^ 
 
 V.Brooklyn, 29 id. 234; State of Mary- 45 id. 197; Chicago & Alt. R. Co. v. 
 
 land V. Baltimore, etc., R. Co., 24 Md. Shannon, 43 id. 338 ; City of Chicago 
 
 84 ; Central R. Co. v. Baches, 55 111. v. Major, 18 id. 349 ; Donaldson v. 
 
 379 ; Central R. Co. v. Weidon, 53 id. Miss.& Mo. R. Co., 18 Iowa, 280 ; Telfer 
 
 290 ; Chicago & N. W. R. Co. v. Swett, v. Northern R. Co., 30 N. J. L. 188. 
 
 ' Pennsylvania R. Co. v. Keller, 67 or others on the life of the deceased. 
 Penn. St. 300 ; Tilley v. Hudson R. R. Althorpf v. Wolfe, 22 N.Y. 355 ; Hard- 
 Co., 29 N. Y. 252 ; Duckworth v. John- ingv. Towushend,43 Vt.536; Pittsburg, 
 son, 4 H. & N. 653 ; Paulmier v. Erie etc., R. Co. v. Thompson, 56 111. 138; 
 R. Co., 34 N. J. L. 151. Field on Dam., § 587 et seq. and notes. 
 
 2 Pyne v. Great N. R. Co., 4 B. & S. ^ Field on Dam., § 631. See, also, in 
 396 ; Jour. (N. S.) 199 ; 32 L. J. Q. B. support of the proposilionsmade.Penn. 
 377; 11 W. R. 922;8 L. T. (N. S.) R. Co.v. Keller, 67 Penn. St. 300; Kres- 
 734. ter v. Smith, 66 N. C. 154 ; Mclntyre v. 
 
 3 Green v. Hudson River R. Co., 32 N. Y. Cent. R. Co., 37 N. Y. 287 ; 35 
 Barb. 25 ; Blake v. Midland R. Co., 18 How. Pr. 36 ; Quin v. Moore, 15 N. Y. 
 Q. B. 93; 21 L. J. Q. B. 233. See,also, 435; Sherman v. West Stage Co., 24 
 Donaldson v.Miss.& Mo. R. Co., 18 Iowa, Iowa,515; Illinois,etc.,R.Co. v. Weidon, 
 280. It may be observed that nodeduc- 53 ill. 290 ; Baltimore, etc., R. Co. v. 
 tion from the amount to which the State, 33 Md. 543 ; David v. South W. 
 parties may be entitled can be made R. Co., 41 Ga. 223. 
 
 on account of any insurance by them ^ Field on Dam., § 633.
 
 Suits at Law by and against Corporations. 481 
 
 CIlAPTEll XIII. 
 
 suits at law by and against C0EP0RATI0N8. 
 
 Sec. 325. The riglit to sue and the liability to be sued, common-law inci- 
 dents. 
 
 Sec. 336. In what name must sue or be sued. 
 
 Sec. 337. May sue and be sued by members. 
 
 Sec. 338. Same continued. 
 
 Sec. 329. Where suit may be brought. 
 
 Sec. 330. Foreign corporations not citizens. 
 
 Sec. 331. Same continued. 
 
 Sec. 333. Same continued. 
 
 Sec. 333. Same continued. 
 
 Sec. 334. When suits may be brought in the federal courts. 
 
 Sec, 335. A corporation may be an alien under the judiciary act. 
 
 Sec. 336. It may be a citizen under the constitution of the United States, 
 and the acts of congress relating to judicial powers and the 
 jurisdiction of the courts. 
 
 Sec. 337. Same continued. 
 
 Sec. 338. Corporations considered as citizens under the statutes of the 
 United States, for the removal of suits from the state to the 
 federal courts. 
 
 Sec. 839. Same continued. 
 
 Sec. 340. Same continued. 
 
 Sec. 341. Same continued. 
 
 Sec. 343. Rights in courts under the national banking law. 
 
 Sec. 343. Same continued. 
 
 Sec. 344. Same continued. 
 
 Sec. 345. Parties to a suit. 
 
 Sec. 346. Process. 
 
 Sec. 347. Pleadings, 
 
 Sec. 348. When a party dealing with a corporation is estopped to deny the 
 corporate existence. 
 
 Sec. 349. When the corporation ia estopped to deny its existence. 
 
 Sec. 350. Same continued. 
 
 Sec. 351. General denial. 
 
 Sec. 353. Proof of incorporation. 
 
 Sec. 353. Same continued. 
 
 Sec. 354. Corporate records. 
 
 Sec. 855. Same continued. 
 
 Sec. 356. Stockholders' rights in equity. 
 
 61
 
 482 PkIVATE CoRrOKATIONS. 
 
 Sec. 325. The right to sue and the liability to be sued a common-law 
 incident. — One of the cominou-law incidents of a corporation is 
 the capacity of suing and being sued, the same as a natural per- 
 son. This power is usually contained among the specified powers, 
 in general incorporating acts. It is evident that not only corpora- 
 tions, but natural persons, would, in many cases, be without 
 remedy for wrongs suffered, if this right did not exist. As cor- 
 porations may take, hold and convey property, make contracts, 
 and appoint agents, and in pursuit of their respective objects and 
 business, inflict and suffer wrongs and injuries, it is but reason- 
 able that they should have the capacity, not only to sue, but also 
 of being sued.^ 
 
 The remedy is quite as important as the legal right, and if 
 the law gives a right it should furnish a means to vindicate and 
 maintain it ; lex semper debet remedium^^ He who has a right 
 should have a remedy ; ubi jus ibi remedium / and this is en- 
 forceable only by means of proceedings in courts. The right of 
 a corporation to sue, and the liability to be sued is not only w^ell 
 settled as an incident of corporate capacity, but rests upon the 
 soundest principles of justice. And this remedy includes the 
 right, not only to ordinary proceedings in courts, but all those 
 extraordinary remedies provided by law, and which natural per- 
 sons may claim and enjoy. Where statutes give special or extra- 
 ordinary remedies to persons, this is usually held to include cor- 
 porations. And the statutes of some of the states of the Union 
 expressly provide that whenever the word " person " is used in 
 the statutes it includes corporations.* 
 
 ' And this right exists even though matters, in which case the remedy 
 
 the organization is defective. Heaton' there is exclusive of all others. Bas- 
 
 V. Cincinnati, etc., R. R. Co., 16 Ind. sett v. Carlton, 33 Me. 553. 
 
 275; Holmes v. Gilliland, 41 Barb. '^^ev Yloxn:, i.,\n Ashby v. White, 
 
 568 ; Bangor, etc., R. R. Co. v. Smith, 2 Lord Raymond, 953 ; Winsmore v. 
 
 47 Me. 34; South Bay Meadow Dam Greeubank, Willes, 577. 
 
 Co. V. Gray, 30 id. 547; Shrewsbury ^ But under the New York act of 
 
 V. Brown, 25 Vt. 197; Baltimore, 18G5, providing for incorporation for 
 
 etc., R. R. Co. V. Gallahue, 12 Gratt. certain purposes, it has been held that 
 
 655. The rule being that, where the capacity of suing and being sued 
 
 a right is given, by necessary infer- is subject to the qualification, that it 
 
 ence the right to enforce or defend it is in relation to some matter within 
 
 is also given. Tilden v. Metcalf, 2 the scope of the legitimate purposes 
 
 Day, 259. Unless, as may be the case, of the organization. Ancient City 
 
 the charter or statute provides a special Club v. Miller, 7 Lans. 412. 
 tribunal for the settlement of such
 
 Suits at Law by and against Corporations. 483 
 
 Sec. 326. in what name must sue or be sued. — The general rule is, 
 that a corporation can only sue or be sued in its coi-porate name,' 
 even though the action is upon a contract made for it by an 
 agent,'' or although it is upon subscriptions to its stock in terms 
 made payable to the commissioners appointed to receive subscrip- 
 tions,^ or is upon a contract entered into by and in the name of 
 its trustees,* or its treasurer.^ But, where a note or other obliga- 
 tion not uegotial)le is made payable to an individual " or his suc- 
 cessor," he being the treasurer or other officer of the corporation, 
 and it is really for the benefit of the corporation, it has been held 
 that the action should be brought in the name of the individual 
 and not in the name- of the corporation." But this is only the 
 rule in cases where the note or other obligation is not negotiable, 
 and therefore is put upon the same footing as a specialty, the 
 legal title remaining in the payees until they have conveyed it.'' 
 If the statute (as is sometimes the case) authorizes the corporation 
 to sue in the name of an officer thereof, as in the name of its 
 president, treasurer, directors, etc., suit can be brought in the 
 name of such officer or in its corporate name, at its election, un- 
 less the statute expressly restricts it to the former mode of suing.* 
 If, after a right accrues for or against a corporation, its name is 
 chana'ed, it should be sued in its new name.* 
 
 Sec. 327. May sue and be sued by members. — A corporation may 
 sue or be sued by any of its members, whether natural persons or 
 partnerships, or other corporate bodies ; for its members and con- 
 stituent parts are not, in a legal sense, the corporate body. Though 
 it is composed of these members, they are but the elements which 
 form the one artificial body. The rule that a partner cannot sue 
 
 1 Bradley v. Richardson, 2 Blatclif. ^Binney v. Plumley, ante; Timma 
 
 343 ; Curtiss v. Murry, 20 Cal. 6^3 ; v. Williams, 3 Ad. & El. 413 ; Haynes 
 
 Porter v. Necerrvis, 4 Rand. 3o9. v. Covington, 21 Miss. 408. 
 
 •■^ Binney v. Plumley, 5 Vt. 500; ' Chaplin v. Canada, 8 Conn. 286. 
 
 Garland v. Reynolds, 20 Me. 45 ; Com- « College of Physicians v. Lalbas, 
 
 mercial Bank v. French, 21 Pick. 486. 1 Ld. Raym. 153. See, also, Mauney v. 
 
 3 Delaware, etc., R. R. Co. v. Trick, Motz, 4 Ired. Eq. 195 ; Dart v. Hun- 
 
 23 N. J. L.. 321. ston, 22 Ga. 506 ; Williams v. Beau- 
 
 ■*Bundy v. Birdsall, 29 Barb. 31 ; mont, 3 Moore & S. 705. 
 
 Leonardsville Bank v. Willard, 25 N. ^^yfayor, etc., of Colchester v. Sea- 
 
 Y. 574. ber, 3 Burr, 1866 ; Madison College 
 
 ^Warner Academy v. Starrett, 15 v. Burke, 6 Ala. 494. 
 Me. 443.
 
 484 Private Corporations. 
 
 the partnership, or that a person cannot be both plaintiff and de- 
 fendant in the same suit, has no application to corporations ; and 
 it is a common practice not only for a person to sue the corpora- 
 tion of which he is a member, but for corporations to sue their 
 members.^ Such suits may be brought for all the variety of 
 causes, and in all the various forms, and in the same manner as 
 though the parties thereto were natural persons.' 
 
 Sec. 328. Same continued. — A corporation is an imaginary and 
 ideal person, and its contracts are not the contracts of its individual 
 members. " Being lawfully assembled, they represent but one 
 person, and may, consequently, make contracts, and by their col- 
 lective consent, oblige themselves thereunto." ^ It is, therefore, 
 evident that the persons composing a corporate body may sue or 
 be sued by a corporation, for any cause, and under any circum- 
 stances, the same as natural persons. Thus, it is held that, in case 
 of an incorporated company with a capital stock divided into shares 
 and held by individuals, the corporation and the shareholders are 
 distinct legal persons, and can sue and be sued by each other ; 
 that where the directors of a corporation have misapplied a portion 
 of its funds, the stockholders may recover the amount thus mis- 
 applied, and if such misapplication is threatened they may restrain 
 it by injunction ; that where a corporation is threatened with an 
 injury which it might restrain by injunction, but it refuses so to 
 do, a stockholder may maintain a bill in equity, for an injunction 
 to prevent the injury, in order to protect his own interests from 
 immediate danger ; but it has also been held that where a corpora- 
 tion has been injured by a tort or breach of contract, an individ- 
 ual stockholder will not be permitted to come into court and 
 
 ' Connell v. Woodward, 6 Miss, be sued on such contracts. Culbertson 
 
 665 ; Gray v. Portland Bank, 3 Mass. v. Wabash Navigation Co., 4 McLean, 
 
 3S5 ; Bac. Abr., tit. Corp. ; Merricli v. 554. 
 
 Peru Coal Co., 61 111. 472. » AvliflFe's Civ. Law, tit. 35, B. 2. p. 
 
 "^ Dill, on Corp., chap. 33. A corpo- 198 ; 1 Bl. Com. 475 ; Hayden v. Mid- 
 ration may not only contract with, but dlesex Turnpike Corporation, 10 Mass. 
 sue its stockholders, officials or cor- 403; The Proprietors of the Canal 
 porators, in their individual capacity. Bridge v. Gordon, 4 Pick. 304 ; Hart- 
 Wausau Broom Co. v. Plumer, 35 ford Bank v. Hart, 3 Day, 491 ; Water- 
 Wis. 374; Chicago, etc., R. Co. v. bury v. Clark, 4 id. 198; Ruby v. 
 Howard, 7 Wall. (U. S.) 393. Abyssinian Soc, 15 Me. 306; Whee- 
 
 A corporator may not only contract lock v. Moulton, 15 Vt. 519 ; Isham v. 
 
 with his corporation but may sue or Bennington Iron Co., 19 id. 249.
 
 Suits at Law by and against Corporations. 
 
 485 
 
 prosecute the cause of action, because the corporatioji fails or 
 refuses so to do.' 
 
 Sec. 329. Where suit may be brought. — A corporation, being an 
 artificial person created by the supreme authority of the state, is, 
 in a legal sense, a citizen of the state of its creation, and is gener- 
 ally entitled to all the rights and privileges in court, of a citizen 
 of the state where it is instituted. But a distinction has been made 
 between a corporation and a natural person, in respect to its abso- 
 lute right to sue in the courts of a state other than the state creat- 
 ing it." It is held that, outside of the territory of the sovereignty 
 creating it, it can only maintain a suit on the ground of the 
 comity existing between states. But, unless prevented on the 
 ground of public policy, a corporation may usually maintain a 
 suit in the courts of another state, the same as a natural person.'' 
 
 ' Samuel v. HoUaday, 1 Woolw. 
 (C. C.)400. 
 
 2 Lailirop V. Union Pacific R. Co. , 1 
 McArthur, 234. 
 
 3 Thompson v. Waters, 25 Mich. 
 214 ; 5 Cranch, 289 ; Second National 
 Bank v. Lovell, 2 Ciu. (0.) 397; 
 Henriques v. Dutch West India Co., 2 
 Ld. Raym. 1535; Chit, on Coat. 8(5 ; 
 National Bank St. Charles v. De Ber- 
 nales, 1 C. & P. 5(59 ; Beverly v. Lin- 
 coln Gas-light Co., 6 A. & E. 829. 
 
 As the right of a foreign corporation 
 to sue in the courts of a state outside 
 the one in which it was created de- 
 pends upon the comity of the state or 
 country where the suit is brought, 
 it follows that this comity may be 
 granted or denied in the discretion of 
 the tribunals of such other states or 
 countries, especially where the corpo- 
 ration was instituted for purposes hos- 
 tile to the interests of the state. 
 American Colonization Society v. Gar- 
 treil, 23 Ga. 448. But, except where 
 prevented by statute, the courts will 
 not generally deny the right, and it 
 may be said that generally foreign 
 corporations have the same capacity to 
 sue or be sued in the courts of another 
 state as domestic corporations, subject 
 to such terms and conditions as are 
 imposed by the local laws. Persse 
 and Brooks Paper Works v. Willett, 
 4 Abb. Pr. 119 ; British American 
 Laud Co. V. Ames, G Mete. (Mass.) 391; 
 
 Fisk V. Chicago, etc.. R. R. Co., 4 
 Abb. Pr. (N. S.) 378 ; Mutual Benefit 
 Life Ins. Co. v. Davis, 12 N . Y. 569; 
 New York Dry Docks v. Hicks, 5 
 McLean (U. S. C. C), 111 ; Halcomb 
 V. Illinois, etc.. Canal Co., 4 111. 236; 
 Hartford Baak v. Barry, 17 Mass. 97 ; 
 New York F. Ins. Co. v. Ely, 5 '"'onu. 
 605; Portsmouth Livery- Co. v. Wat- 
 son, 10 Mass. 91. Since a corporation 
 created by one state can transact busi- 
 ness in another state, with the assent, 
 expressed or implied, of the latter 
 state, a corporation acting in a state 
 foreign to its creation, under a law of 
 the latter state, which recognizes its 
 existence for the purpose of making 
 contracts within that state, and being 
 sued upon them through notice to its 
 contracting agents in that state, is 
 bound by such statute ; and a judg- 
 ment recovered against the corpora- 
 tion upon a notice given to its contract- 
 ing agents, according to the statute, is 
 valid. Lafayette Ins. Co. v. French, 
 18 How. (U. S.) 404. Where a cor- 
 poration is chartered in two separate 
 states, and exercises its franchises in 
 each, it may be restrained in either 
 from expending its funds for any other 
 than corporate purposes anywhere ; 
 and a plea to the jurisdiction of the 
 courts of either state is not tenable, 
 on the ground that part of the corpo- 
 rate property lies in a different state, 
 or that it owes its corporate existence,
 
 486 
 
 Pkivatb Coepokations. 
 
 The laws or institutions of other states will not be regarded where 
 it is manifestly against the laws of the state, or of the pnblic 
 
 in part, to another state. State v. 
 Northern Central R. R. Co., 18 Md. 
 19i}. The courts of a state may grant 
 a manda7iius to reinstate an officer of 
 a foreign corporation carrying on busi- 
 ness within the state, in the office of the 
 corporation ichieJi he was exercising 
 there, and from which he had been 
 ousted by the wrongful act of the di- 
 rectors ; for the court may recognize 
 the existence of a foreign corporation, 
 and it may determine the rights of 
 individuals, though it has no jurisdic- 
 tion over the corporation itself. Cur- 
 tis V. McCullough, 3 Nev. 303. In 
 New York , a foreign corporation who 
 have appeared as defendants in an ac- 
 tion in the supreme court are deemed, 
 for the purposes of the action, as much 
 within, and subjected to, the jurisdic- 
 tion of the court, as if they were a 
 corporation under the laws of the 
 state. It is true, that for the pur- 
 poses of certain provisions of the stat- 
 ute of limitations, they can never 
 come within the description of those 
 who are called residents, so as to allow 
 the statute to run against them ; but 
 their foreign origin does not prevent 
 actions against them for any cause, 
 when they can be brought within the 
 jurisdiction of the court. Dart v. 
 Farmers' Bank, 37 Barb. 337. 
 
 A corporation having property or 
 capable of being sued within a state, 
 though created by the laws of another 
 state, is a corporation ' ' witbin the 
 state " within the meaning of the laws 
 allowing attachments. Libbey v. 
 Hodgdon, 9 N. H. 394 ; St. Louis Per- 
 petual Ins. Co. V. Cohen, 9 Mo. 416 ; 
 Vogle V. New Granada Canal and Steam 
 Nav. Co. of New York, 1 Houst. 
 394. 
 
 The language of a statute, which 
 provides that " a corporation may be 
 summoned as garnishee." etc., is suf- 
 ficiently comprehensive to include for- 
 eign corporations and render them 
 equally subject, with domestic corpo- 
 rations, to the process of garnishment, 
 in all cases, where an original action 
 may be commenced against them in 
 the courts of the state to recover the 
 debt in respect to which the process 
 
 of garnishment is served. Brauser v. 
 New England Fire Ins. Co., 21 Wis. 
 606. 
 
 But unless the statute authorizes 
 the attachment of property and pro- 
 vides for service in case of absent de- 
 fendants, or provides for service on 
 corporations having no existence un- 
 der the laws of the state, there is no 
 way in which a foreign corporation 
 can be brought within the jurisdiction 
 of the courts of another state. La- 
 tlirop V. Union Pacific R. R. Co. , 1 
 Mc Arthur, 234; Camden, etc., Co. v. 
 Swede Iron Co., 33 N. J. L. 15. Thus, 
 in New Hampshire, a foreign corpora- 
 tion may be sued, provided effective 
 service can be made by the laws of the 
 state upon the corporation or its prop- 
 erty. Libbey v. Hodgdon, 9 N. H. 
 394. And in Vermont service may 
 be made under the statute by attach- 
 ment of property if any is to be found, 
 or upon its general agent if one has 
 been appointed, or if none has been 
 appointed, upon a special agent, if 
 there is any in the state. In Minne- 
 sota service cannot be made by publi- 
 cation. Sullivan v. La Crosse, etc., 
 Packet Co., 10 Minn. 38G. In New 
 Jersey, if a foreign corporation, when 
 the action is commenced, does not do 
 business, and has no office or place of 
 business in that state, the contract 
 sued on not having been entered into 
 in this state, such corporation, except 
 by its own consent, cannot be brought 
 within the jurisdiction of this or any 
 court of this state. And if sued un- 
 der such circumstances, the proper 
 remedy is by a plea to the jurisdic- 
 tion. The act of 1865, Pamph. 467, 
 simply appoints a method of bringing 
 corporations invested with a foreign 
 character into the courts of this state 
 when such courts have jurisdiction 
 over them. It has no scope beyond 
 this. Camden, etc., Co. v. Swede Iron 
 Co., 33 N. J. L. 15. And generally it 
 may be said that a foreign corporation 
 can only be sued when it can be 
 brought within the jurisdiction olf the 
 courts under the provisions of some 
 statute.
 
 Surrs AT Law by and against Corporations. 487 
 
 polic}' so to do.^ A corporation created in one state of tlie Union 
 is considered as a foreign corporation in every other state ; but 
 the doctrine of the comity of states, applicable in general to the 
 riglits in courts of foreign corporations, has still stronger force 
 when such corporations bring suit in the courts of a sister state of the 
 Union, from the fact of their natural, political and social, and the 
 extent and intimacy of their commercial relations/ It is evident, 
 however, that it is competent for a state to prohibit a foreign corpo- 
 ration, not only from doing business within its territorial limits, but 
 from maintaining suits in its courts. The legislature of the state, in 
 that respect, is supreme, and could prohibit a foreign corporation 
 from doing business therein, or impose such conditions thereon as 
 the public policy may seem to require. As the legislature may, 
 in the creation of private corporations, limit their powers and 
 franchises in such a manner as it may deem proper, it is, perhaps, 
 reasonable that they should have the power to limit or restrain 
 foreign corporations within the state. ^ 
 
 Sec. 330. Foreign corporations not citizens. — The constitution of 
 the United States provides that " the citizens of each state shall 
 
 ' Id. Tlie power of the corporation S. C, 1 With. Corp. Cas. 581 ; Holcomb 
 
 of one state to make contracts in v. 111., etc., Canal Co., 4 111. 228; 
 
 another state rests upon the comity Frazier v. Willcox, 4 Rob. (La.) 518 ; 
 
 between the states, and the comity Bank of Edwardsville v. Simpson, 1 
 
 thus extended is no impeachment of Mo. 184 ; Lewis v. Bank of Kentucky, 
 
 sovereignty, it being the voluntary act 12 Ohio, 133 ; Ely v. Fire Ins. Co., 5 
 
 of the state by which it is offered, but Conn. 560 ; Williamson v. Smoot, 7 
 
 inadmissible when contrary to its Mart. (La.) 31 ; President, etc., of 
 
 policy, or prejudicial to its interests. Lombard Bank v. Thorp, 6 Cow. 46 ; 
 
 Bank of Augusta v. Earle, 13 Pet. 519. Hartford Bank v. Barry, 17 Mass. 97 ; 
 
 Mr. Story, in his treatise on the Con- Marine, etc., Ins. Bank v. Jauncey, 1 
 
 flict of Laws, observes : "There is Barb. 486; Tombigbee, etc., R. Co. v. 
 
 then not only no impropriety in the Koeeland, 4 How. (U. S.) 16; Quaga 
 
 use of the phrase, ' comity of nations,' Iron Co. v. Dawson, 4 Blackf. 202; 
 
 but it is the most appropriate phrase Savage Man. Co. v. Armstrong, 19 
 
 to express the true foundation and ex- Me. 147. As to the doclrme of the 
 
 tent of the obligation of the laws of comity of states relating to contracts, 
 
 one nation within the territories of and the right to enforce them by cor- 
 
 another. It is derived altogether from porations as well as natural persons, 
 
 the voluntary consent of the latter; see id. See, also, Silver Lake Bank v. 
 
 and is inadmissible when it is contrary North, 4 Johns. Cli. 370. 
 
 to its known policy, or prejudicial to ^ Frazier v. Wilcox, 4 Rob. (Tia.)518 ; 
 
 its interests." Atterberry v. Knox, 4 B. Monr. 90; 
 
 ^ Bank of Marietta v. Pindall, 3 Marietta "v. Pindall, 2 Rand. 465 ; New 
 
 Rand. 465 ; Portsmouth Liverv Co. v. Hope, etc., Co. v. Poughkeepsie Silk 
 
 Wat.son, 10 Mass. 91; The State of Co., 25 Wend. 648. 
 liOuisiana v. Fosdick,21 La. Ann. 434;
 
 488 Private Corporations. 
 
 be entitled to all privileges and immunities of citizens of the sev- 
 eral states." ^ Is a corporation within the meaning of this pro- 
 vision a citizen, and entitled to all the rights and the remedies of 
 a natural person in a state other than the one where it was created 
 and has a legal existence? This question has been settled by 
 various adjudications, and we have already stated that a state had 
 the power to prohibit foreign corporations from doing any busi- 
 ness in the state, or of regulating the business, or of prohibiting 
 it from suing in its courts. And it has been repeatedly held that 
 corporations were not citizens within the foregoing constitutional 
 provision, so as to entitle them to all the rights and privileges of 
 natural persons. 
 
 Sec. 331. Same continued, — The term "citizen" has different 
 meanings in different parts of the constitution of the United States. 
 Where the constitution says that " the citizens of each state shall be 
 entitled to all the privileges and immunities of citizens in the several 
 states," the woi*d "citizens" has a different meaning from its use 
 in that part of the constitution where it says that " the judicial 
 power shall extend to all cases in law and equity, where the con- 
 troversy is between a state and citizens of another state, between 
 citizens of different states, between citizens of the same state 
 claiming lands under grants of diffei'ent states, and between a 
 state or citizens thereof and foreign states, citizens or subjects," ' 
 and that part of the judiciary act of congress where jurisdiction is 
 made to depend upon citizenship of one of the parties in another 
 state,' and the act providing for the removal of suits from the 
 state courts to the circuit courts of the United States.^ 
 
 Sec. 332. Same continued. — In the former case it is held that 
 corporations are not citizens in the sense of this constitutional 
 provision.' It has been ably maintained that, although the individ- 
 
 ' § 2, art. 4. Co. v. Letson, 2 id. 497 ; La Favette 
 
 « Art. 3, § 2. Ins. Co. v. French, 18 id. 404 ; War- 
 
 3 Act Sept. 24, 1798, Rev. Stat. (1874) ren Man. Co. v. The Etna Insurance 
 
 109. Co., 2 Paine, 501 ; Paul v. Virginia. 
 
 * Rev. Stat. (1874) 113, § 639. 8 Wall. 168; The Insurance Company 
 
 5 Drawbridge Co. v. Shepherd, 20 v. The Commonwealth, 5 Bush, 68. 
 
 How (U. S.) 227 ; Louisville, etc., R.
 
 Suits at Law by and against Corporations. 489 
 
 uals composing a corporation may be citizens under tlie pro- 
 vision of the constitution securing " the citizens of each state 
 the privileges and immunities of citizens of the several states," 
 such members of the corporation carrying on business in the 
 corporate name are subject to the liabilities and entitled to the 
 privileges of citizens under the constitution, but that this privi- 
 lege could have no application to an invisible, intangible and 
 artificial corporate person ; that where a corporation makes a 
 contract, it is the contract of the legal entity, of the artilicial 
 being created by the cliarter, and not the contract of the mem- 
 bers ; and that the only rights tlie corporation can claim are the 
 rights conferred by the charter, and not the rights which belong 
 to its members as citizens of a state.* 
 
 This view was recently ably maintained by Chief Justice Breese, 
 in delivering the opinion of tlie supreme court of Illinois, in 
 Ducat V. The City of Chicago.'' He says : " Corporations have no 
 status in states, as citizens of the state creating them, and when 
 they come to this state to do business and make profits, a discrim- 
 ination can rightfully be made between them and our domestic 
 corporations of the same character, and that if it should be deemed 
 good policy by the legislature they could be so taxed or otherwise 
 burdened as to compel them to leave the state. They may be 
 regarded as a benefit or a nuisance, according to the caprice of the 
 legislature, they not being citizens in any approved sense of that 
 term, which can be correctly understood in no other sense than 
 that in which it was understood in common acceptation, when 
 the constitution was adopted, and as it is universally explained by 
 writers on government, witliout an exception. A citizen is of the 
 genus homo, inhabiting and having certain rights in some state or 
 district. Such a being, if a citizen of New York, or of any other 
 state of this Union, is, for many purposes, a citizen of this state, 
 and of all the other states, and is entitled to all such privileges 
 and immunities within the purview of the constitution, as the cit- 
 izens of those states permanently residing therein are entitled to. 
 
 ' Bank of Augusta v. Earle, 13 Pe- court, U. S., 10 Wall. 410. See, also, 
 ters. 519. Corfield v. Coryell, 4 Wash. (C. C.) 
 
 MS 111. 173; affirmed in supreme 371. 
 
 62
 
 490 Prtvate Corpoeations. 
 
 These are personal privileges, and attach to him in every state 
 into whicli he may enter, as to a human being — as a person with 
 faculties to appreciate them, and enjoy them ; not to an intangi- 
 bility, a mere legal entity, an invisible artificial being, but to the 
 man made in God's ovs^n image. The individual citizen has the 
 power to move from place to place, as his business or his pleasure 
 may prompt. He has rights which are so important as to. make 
 it desirable that they should be uniform throughout this broad and 
 expanded Union, which, in order to promote mutual friendship 
 and free social or business intercourse among the people of the 
 several states, were placed by this clause of article four (of the 
 constitution) under the protection of the federal government. In 
 the case of corporations no such reasons exist. Corporations, in 
 the states of their creation, are not entitled to the privileges or 
 rights of the citizens of such states. , They cannot vote at elec- 
 tions ; they are ineligible to any public office ; thej^ cannot be 
 executors, administrators or guardians. They are artificial beings, 
 endowed only with such powers, and privileges, and rights, as 
 their creator thought proper to bestow upon them. They have 
 not the power of locomotion, and of course, are not fit subjects, in 
 the view above expressed, of the constitutional clause on which 
 this case turns. Not being able to go into the states of the Union 
 at their corporate will and pleasure, and exercise their faculties 
 therein, they cannot, by any reasonable and just view of that 
 clause, be deemed as coming within its spirit or object." ' 
 
 ' Liverpool Ins. Co. v. Massacliii- tlie citizens of those states in the ac- 
 setts, 10 Wall. 566 ; Paul v The Com- quisition and enjoyment of property 
 monwealth of Virginia, 8 id. 168. In and in the pursuit of happiness, and it 
 tlie latter case, Mr. Justice Field, on secures to them in other states the 
 the construction of this clause in the equal protection of their laws. It has 
 constitution, observes ; " It was un- been justly said that no provision in 
 doubtedly the object of the clause in the constitution has tended so strongly 
 question to place the citizens of each to constitute the citizens of the United 
 state upon the same footing of other States one people as this. Indeed, 
 states, so far as the advantages result- without some provision of the kind, 
 ing from citizenship in those states removing from the citizens of each 
 are concerned. It relieves them from state the disabilities of alienage in 
 the disabilities of alienage in other other states, and giving them equality 
 states ; it inhibits discriminating legis- of privilege with citizens of those 
 lation against them by other states ; states, the republic would have con- 
 it gives tliem the right of free ingress stituted little more than a league of 
 into other states, and eg-ress from states; it would not have constituted 
 tliem ; it insures to theiu^ in other tlie union which now exists. But the 
 States the same freedom possessed by privileges and immunities secured to
 
 Suits at Law by and against Corporations. 491 
 
 Sec. 333. Same continued. — It will be evident, from what has 
 been said, tliat foreign corporations have no absolute and consti- 
 tutional rights other than in the states where constituted, and can 
 only claim such privileges in the courts of a foreign state as are 
 permitted by the coniity of states, and not in derogation of the 
 express statutory or constitntional provisions of such states. 
 
 Sec. 334. When suits may be brought in the federal courts. — We 
 have observed that corpoi'ations have usually the same status as 
 natui-al persons in the courts of the state creating them, and that 
 they do not in foreign states enjoy the full capacity of a natural 
 person ; that they are not entitled to all those privileges and im- 
 munities which natural citizens of a foreign state would be enti- 
 tled to under the constitution of the United States, or, in other 
 words, that under the provisions of the constitution referred to 
 they are not citizens. But the term " citizen " has a different mean- 
 ing in other parts of the constitution, and especially in that part 
 of it which limits the judicial power of the courts of the United 
 States, where the term " citizen " is held to include corporations. 
 On this subject the constitution provides that the judicial power 
 of the United States courts shall extend to all cases of controversy 
 between a state and citizens of another state and between citizens 
 of different states.^ 
 
 Sec. 335. A corporation may be an alien under judiciary act. — The 
 judiciary act of congress, framed and adopted to carry into effect 
 
 citizens of each stale in the several which they confer must, therefore, be 
 states by the provision in question, enjoyed at home, unless the assent of 
 are those privileges and immunities other states to their enjoyment therein 
 which are common to the citizens in be given. Now, a grant of corporate 
 the latter states under their constitu- existence is a grant of special privi- 
 lion and laws, by virtue of their being leges to the corporators, enabling them 
 citizens. Special privileges enjoyed to act for certain designated purposes 
 by citizens in their own states are not as a single individual, and exempting 
 secured in other states by this pro- them (unless otherwise specially pro- 
 vision. It was not intended by the vided) from individual liability. The 
 provision to give to the laws of one corporation, being a mere creation of 
 state any operation in other states, local law can have no legal existence 
 They can have no such operation, ex- beyond the limits of the sovereignty 
 cept by permission, express or implied, where created." 
 of those states. The special privileges 
 
 'Const., art. 3, §2.
 
 492 Private Corporations. 
 
 this provision of the constitution, gives the circuit court of the 
 United States jurisdiction "of all suits of a civil nature at com- 
 mon law or in equity, where the matter in dispute, exclusive of 
 costs, exceeds the sum or value of five hundred dollars and an 
 alien is a party, or the suit is between a citizen of the state where 
 the suit is brought and a citizen of another state." ' In the con- 
 struction of this provision the courts have held that the term 
 " citizen " includes corporations, and that they might sue or be sued 
 in the circuit courts of the United States, in all cases the same 
 as a natural person. 
 
 Sec. 336. Corporations may be citizens under the constitution and 
 the acts of congress, relating to judicial powers and jurisdiction of the 
 courts of the United States. — In reference to citizenship under the 
 constitutional provision and the acts of congress relating to the 
 judicial powers and jurisdiction of tTie United States courts, 
 which we have referred to, it is held that a corporation has its 
 dwelling ]ilaee and residence in the state of its creation ; that as 
 an artificial legal person it has no existence beyond the territory 
 of the sovereignty creating it ; that for the purpose of conferring 
 jurisdiction a suit against a foreign corporation must be con- 
 sidered as a suit against a citizen of the state creating it ; that 
 there is a presumption in such cases that the members of the cor- 
 poration are citizens of the state creating it, and that no statute of 
 the state where such corporation may transact business, nor any 
 thing done by the corporation in regard to the manner of trans- 
 acting its business, can defeat the right of the corporation to sue, 
 or its liability to be sued in tlie circuit courts of the United States, 
 as though it were a natural person and a citizen of the state where 
 it was legally created and is located.^ In a recent case in the 
 supreme court of the United States, where the commonwealth of 
 Pennsylvania sued a corporation in the United States circuit court, 
 and the question of jurisdiction was presented under the constitu- 
 
 1 Rev. Stat. U. S. (1875), § 629; Bank 2 Manufacturers' National Bank y. 
 
 of the United States v. Devaux, 5 Baach, opinion by Blatchford, J., in 
 
 Cranch, 184 ; Inhabitants of Lincoln v. the circuit court of the United States, 
 
 Prince, 3 Mass. 544. See, also, Rex v. southern district of N, Y. ; 1 Witb . 
 
 Gardner, Cowp. 83 ; Sparenbufgli v. Corp. Cas. 93. 
 Bannatyne, 1 B. & P. 163.
 
 Suits at Law by and against CoKPORA'noNS. 493 
 
 tion and the act above referred to, the court held tliat a state 
 might bring suit in the circuit court of the United States against 
 a citizen of another state, but not one of her own citizens ; that it 
 did not sutiiciently appear, from any averment in the declaration, 
 that the defendant was a corporation created in Cahfornia ; and 
 that a state cannot bring a suit in the United States courts against 
 one of its own citizens.' 
 
 Sec. 337. Same continued. — In an action on certain bonds, issued 
 by the board of supervisors of Mercer county, Illinois, where the 
 question of the citizenship of the corporation and the jurisdiction 
 of the circuit court of the United States based thereon was pre- 
 sented, on error in the supreme court of the United States, Chief 
 Justice Chase, in delivering the opinion of the court, said : " The 
 record presents but one question which has not been heretofore 
 fully considered and repeatedly adjudicated. That question is, 
 whether the board of supervisors of Mercer county can be sued 
 in the circuit court of the United States by a citizen of another 
 state than Illinois. It presents but little difficulty. It has never 
 been doubted that a corporation, all the members of which reside 
 in the state creating it, is liable to a suit upon its contracts by the 
 citizens of other states, but it was for many years much contro- 
 verted whether an allegation, in a declaration that a corporation 
 defendant was incorporated by a state other than that of the 
 plaintiff and established within its limits, was a sufficient averment 
 of jurisdiction. And in all cases prior to 1844:, it was held neces- 
 sary to aver the requisite citizenship of the corporators. Then 
 the whole question underwent a thorough examination in the case 
 of the Louisville, Cinomnati <& Charleston Railroad Company 
 V. Letson^ and it was held that a corporation created by laws of 
 a state and having its place of business in that state, must, for the 
 purpose of suit, be regarded as a citizen within the meaning of 
 the constitution giving jurisdiction founded upon citizenship. 
 
 1 The Commonwealth of Pennsyl- monwealth of Penn. v. The Quicksilver 
 
 vauia v. The Quicksilver Mining Co., Mining Company, supra. 
 
 10 Wall. 55;5. See, also, Railway Co. ^ 3 How. 497. 
 V. Whitton, 13 id. 270 ; The Com-
 
 494 Private Corporations. 
 
 This decision has been since reaffirmed, and must now be taken 
 as the settled construction of the constitution."^ 
 
 Sec. 338. Corporations considered as citizens under the act of con- 
 gress for the removal of causes from the state to the federal courts. — It is 
 provided by the lievised Statutes of the United States as follows: 
 " Any suit commenced in any state court, wherein the amount in 
 dispute, exclusive of costs, exceeds the sum or value of $500, 
 to be made to appear to the satisfaction of said court, may be re- 
 moved for trial, into the circuit court, for the district where such 
 suit is pending, next to be held after the filing of the petition 
 for such removal hereinafter mentioned, in the cases and in the 
 manner stated in this section. 
 
 " First. When the suit is against an alien, or is by a citizen of 
 the state wherein it is brought, and is against a citizen of another 
 state, it may be removed on the petition of such defendant, filed 
 in the said state court at the time of entering his appearance in 
 said state court. 
 
 " Second. When the suit is against an alien and a citizen of the 
 state wherein it is brought, or is by a citizen of such state against 
 a citizen of the same, and a citizen of another state, it may be so 
 removed, as against said alien or citizen of another state, upon 
 the petition of such defendants, filed at any time before the trial 
 or final hearing of the cause, if, so far as it relates to him, it is 
 brought for the purpose of restraining or enjoining him, or is a 
 suit in which there can be a final determination of the contro- 
 versy, so far as concerns him, without the presence of the other 
 defendants as parties in the cause. But such removal shall not 
 take away or prejudice the right of the plaintiff to proceed at the 
 same time with the suit in the state court, as against the other 
 defendants. 
 
 " Third. When a suit is between a citizen of the state in which 
 it is brought and a citizen of another state, it may be so removed 
 on the petition of the latter, whether he be plaintiff or defendant, 
 filed at any time before trial or final hearing of the suit, if, before 
 or at the time of filing said petition, he makes and files in said 
 
 ' Cowles V. Mercer County, 7 Wall, the members of a corporation are citi- 
 118 (1868) ; 2 With. Sel. Corp. Cas. 1. zens of the state creating it. Lathrop 
 There is a concluBive presumption that v. Union Pac R. Co., 1 Mc Arthur, 234.
 
 Suns AT Law by and against Corporations. 495 
 
 court an affidavit, stating that lie has reason to believe and does 
 believe that, from prejudice or local influence, he will not be 
 able to obtain justice in such state court." * 
 
 Sec. 339. Same continued. — Under these provisions it is held, 
 that as a corporation is a creature of the state creating it, and has 
 no legal existence beyond the territory of the sovereignty by 
 which it is created ; that its domicile is within such territory ; 
 that a suit against a corporation by its corporate name is a suit 
 against a citizen of the state creating it ; and that for the pur- 
 poses of original jurisdiction as well as the removal of causes 
 from the state to the federal courts, under the act of congress 
 made for that purj)ose, there is a conclusive presumption that the 
 membei's of a corporation are citizens of that state. And it is 
 further held, that nothing done by a corporation in regard to the 
 place or manner of transacting its business, and no statutes of a 
 state in which it transacts such business can deprive the corpora- 
 tion of its right and privilege when sued in a state foreign to the 
 one in which it was created, to remove such action, in the manner 
 prescribed by the statutes, from the state court to the circuit 
 court of the proper district. But it is further held, that if the 
 foreign corporation is joined with other defendants, who are 
 residents of the state where the suit is brought, the suit cannot 
 be removed under the foregoing statute, from the state to the 
 federal courts, unless such residents are merely nominal parties ; 
 and that when the action is against the corporation and its officers, 
 and no relief is prayed for as to such officers, that is not prayed 
 for as against the corporation, and no relief is pi'ayed for against 
 any officer in his individual capacity, such officers are merely 
 nominal parties, and the action may be removed.' 
 
 1 Rev. Stat. U. S. (1874;, § 639, p. 232 ; Wormley v. Wormley, 8 Wheat. 
 
 113. 421; Carnea] v. Banks, 10 id. 188; 
 
 '2 Hatch V. The Chicago, Rock Island Pomeroy v. The New York, etc., R. 
 & Pacific R. Co., 6 Blatchf. (C. C.) Co.. 4 Blatchf . (C. C.) 120 ; Hobbs v. 
 105 ; Ward v. Arredondo. 1 Paiue (C. The Manhattan Ins. Co. , 56 Me. 417. 
 C), 410 ; Lathrop v. Union Pacific R. If the defendant files a proper peti- 
 Co., 1 McArthur, 234; Bank of Angus- tion for removal, it is a matter of right 
 ta V. Earle, 13 Pet. 519 : Ohio, etc., R. and the state court cannot prevent it. 
 Co. V. Wheeler, 1 Black, 286; The Gordon v. Longest, 16 Pet. 97; Car- 
 Louisville, etc., R. Co. V. Letson,2 neal v. Banks, 10 Wheat. 188, where 
 How. 497: Marshall v. The Baltimore, parties were made defendants to a suit 
 etc., R. Co., 16 id. 314. The Coving- in equity, who were citizens of the 
 ton Drawbridge Co. v. Shepherd, 20 id. same state with the plaintiff, and there
 
 496 Private Cokpokations. 
 
 Sec. 340. Same continued. — Where tlie declaration described the 
 phiiiitifis as an association of persons not incorporated, formed 
 for the purpose of carrying on the banking business at Omaha, 
 Nebraska, and who were engaged in such business at that place, 
 and the defendants, as a foreign corporation, formed under and 
 created by the laws of the state of New York, and the cause was 
 transferred to the circuit court of the United States ; on error, in 
 the supreme court of the United States, it was held, that although 
 there was no direct averment that the suit was between citizens 
 of different states, still it was the necessary consequence of the 
 facts stated that they were so ; that the averment that the 
 plaintiffs were a firm of natural persons, associated together at 
 Omaha, and were engaged in the banking business at said place, 
 is equivalent to saying they had their domicile there, as in this 
 comitry people usually have their domicile where they do busi- 
 ness ; that this is especially true of persons who are engaged in a 
 business requiring capital and involving risk, at a point remote 
 from the great centers of trade and commerce. And it was fur- 
 ther held that the citizenship of the defendant was sufficiently 
 averred ; that the obvious meaning of the allegation, that the 
 defendant was a foreign corj)oration, formed under and created 
 by the state of New York was, that the defendant was a citizen 
 of that state ; and that the averments were sufficient to show 
 that the plaintiff and defendant were citizens of different states. 
 
 Sec. 341. Same continued — The opinion of Blatchford, J., in 
 the case of Hatch v. The Chicago^ etc.^ R. Co.^ furnishes a clear 
 exposition of the law on this subject. He says : " It is settled, 
 by the decisions of the supreme court, that a corporation can 
 have no legal existence out of the bounds of the sovereignty by 
 which it is created ; that it exists only in the contemplation of 
 
 were defendants, citizens of another Where the cause of removal is com- 
 
 state, and it was held that the former plete, the power of the state court as 
 
 might be dismissed as they were im- to the cause is at an end. Hatch v. 
 
 properly made defendants, and that The Chicago, etc., R. Co., suprn. 
 
 they could not properly affect the juris- See, also, Ward v. Arredondo, 1 Paine 
 
 diction of the court as to the parties (C. C), 410. 
 who were properly before it. 
 
 » 6 Blatchf. (C. C.) 105 (1868).
 
 Surrs AT Law by and against Corpoeations. 
 
 497 
 
 law, and by force of tliat law ; that where that law ceases to 
 operate the corporation can liave no existence ; and that it must 
 dwell in the place of its creation. It is also settled, by like 
 decisions, that a suit against a corporation in its corporate name 
 must be regarded as a suit ai^ainst citizens of the state which ere- 
 ated it, the legal presumption being that its members are citizens 
 of that state, the only state in which the corporate body has a 
 legal existence; and the legal presumption, therefore, being, that 
 a snit against the corporation in its corporate name is a suit 
 against citizens of the state which created it, no averment or evi- 
 dence to the contrary being admissible to withdraw the snit from 
 any jm*isdiction which the court of the United States would other- 
 wise have over it. It follows, therefore, that for the purposes 
 of jurisdiction by the courts of the United States, these suits, so 
 far as they are suits against the company, are suits against citizens, 
 of the state which created the company." ^ 
 
 Sec. 31:2. Rights in court under the national banking lavr. — The act 
 
 of congress of June 3, 1864,^ relating to national banks, pro- 
 
 ' Hatch V. Chicago, etc.,R. Co., supra. 
 
 2 The Revised Statutes of the Uuited 
 States (1874), tit. 62, chap. 1, provide as 
 follows : 
 
 " Sec. 5133. Associations for carry- 
 ing on the business of banking under 
 this title may be formed by any num- 
 ber of natural persons not less, in any 
 case , than five . They shall enter into 
 articles of association, which shall 
 specify in general terms the object for 
 wliich the association is formed, aud 
 may contain any other provisions, not 
 inconsistent with lavv, which the asso- 
 ciation may see fit to adopt for the 
 regulation of its business and the con- 
 duct of its affairs. These articles 
 shall be signed by the persons uniting 
 to form the association , and a copy of 
 them shall be forwarded to the comp- 
 troller of the currency, to be filed and 
 preserved in his office. 
 
 ' ' Sec. 5134. The persons uniting to 
 form such an association. shall, under 
 their hands, make an organization cer- 
 tificate which shall specifically state : 
 
 " First. The name assumed by such 
 association ; which name shall be sub- 
 ject to the approval of the comptroller 
 of the currency. 
 
 63 
 
 " Second. The place where its opera- 
 tions of discount and deposit are to be 
 carried on, designating the state, ter- 
 ritory or district, and the particular 
 county and city, town or village. 
 
 " Third. The amount of capital stock 
 and the number of shares into which 
 the same is to be divided 
 
 ' ' FoartJi. The names and places of 
 residence of the shareholders, and the 
 number of shares held by each of 
 them. 
 
 " Fifth. The fact that the certificate 
 is made to enable such persons to avail 
 themselves of the advantage of this 
 title. 
 
 " Sec. 5135. The organization certi- 
 ficate shall be acknowledged before 
 some court of record or notary public ; 
 aud shall be, together with the ac- 
 knowledgment thereof, authenticated 
 by the seal of such court or notary, 
 transmitted to the comptroller of the 
 currency, who shall record and care- 
 fully preserve the same in his office. 
 
 "Sec. 5136. Upon duly making and 
 filing articles of association and organ- 
 ization certificate the association shall 
 become, as from the date of the exe- 
 cution of its organization certificate,.
 
 498 
 
 Private Coeporations. 
 
 vides that corporations sliall have power " to sue and be sued, com- 
 plain and defend, in any court of law or equity, as fully as natu- 
 ral persons." It has been held that when a corporation organized 
 under this act has been brought as suitor into a court which has 
 
 a body corporate, and as such, and in 
 the name designated in the organiza- 
 tion certificate it shall have power ; 
 
 " Mrst. To adopt and use a corporate 
 seal. 
 
 " Second. To have succession for the 
 period of twenty years from its organ- 
 ization, unless it is sooner dissolved 
 according to the provisions of its arti- 
 cles of association, or by the act of its 
 shareholders owning two-thirds of its 
 stock, or unless its franchises become 
 forfeited by some violation of law. 
 
 " Third. To make contracts. 
 
 " Fourth. To sue and be sued, com- 
 plain and defend, in any court of law 
 or equity, as fully as natural persons. 
 
 "Fifth. To elect or appoint directors, 
 and by its board of directors, to ap- 
 point a president, vice-president, cash- 
 ier, and other officers ; define their 
 duties ; require bonds of them and fix 
 the penalty thereof ; dismiss such offi- 
 cers, or any of them, at pleasure, and 
 appoint others to fill their places. 
 
 " Sixth. To prescribe, by its board of 
 directors, by -laws not inconsistent with 
 law, regulating the manner in which 
 its stock shall be transferred; its di- 
 rectors elected or appointed ; its offi- 
 cers appointed ; its property transfer- 
 red; its general business conducted, 
 and the privileges granted to it by law 
 exercised and enjoyed. 
 
 " Seventh. To exercise by its board of 
 directors, or duly authorized officers 
 or agents, subject to law, all such inci- 
 dental powers as shall be necessary to 
 carry on the business of banking ; by 
 discounting and negotiating promis- 
 sory notes, drafts, bills of exchange, 
 and other evidence of debt ; by re- 
 ceiving deposits ; by buying and sell- 
 ing exchange, coin and bullion ; by 
 loaning money on personal security ; 
 and by obtaining, issuing and circulat- 
 ing notes according to the provisions 
 of this ti de . 
 
 " But no association shall transact any 
 business, except such as is incidental 
 and necessarily preliminary to its 
 organization, until it has been author- 
 ized by the comptroller of the cur- 
 
 rency to commence the business of 
 banking. 
 
 " Sec. 5137. A national banking asso- 
 ciation may purchase, hold, and convey 
 real estate for the following purposes, 
 and for no others : 
 
 " First. Such as shall be necessary 
 for its immediate accommodation in 
 the transaction of its business. 
 
 "Fourth. Such as it shall purchase 
 at sales under judgments, decrees, or 
 mortgages held by the association, or 
 shall purchase to secure debts due it. 
 
 " But no such association shall hold 
 the possession of any real estate, 
 under mortgage, or the title and pos- 
 session of any real estate purchased to 
 secure any debts due to it, for a longer 
 period than five years. 
 
 " Sec. 5138. No association shall be 
 organized under this title with a less 
 capital than $100,000, except that with 
 a capital of not less than $50,000 it 
 may, with the approval of the secre- 
 tary of the treasury, be organized in 
 any place the population of which 
 does not exceed six thousand inhabit- 
 ants. No association shall be organ- 
 ized in a city the population of which 
 exceeds fifty thousand persons with a 
 less capital than $100,000- 
 
 " Sec. 5139. The capital stock of each 
 association shall be divided into shares 
 of $100 each, and be deemed per- 
 sonal property, and transferable on 
 the books of tbe association in such 
 manner as may be prescribed in the 
 by-laws or articles of association. 
 Every person becoming a shareholder 
 by such transfer shall, in proportion 
 to his shares, succeed to all the rights 
 and liabilities of the prior holder of 
 such shares ; and no change shall be 
 made in the articles of association by 
 which the rights, remedies, or security 
 of the existing creditors of the associa- 
 tion shall be impaired. 
 " Sec. 5140. At least fifty per cent of 
 the capital stock of every associatiou 
 shall be paid in before it shall be 
 authorized to commence business ; and 
 the remainder of the capital stock of 
 such association shall be paid in in-
 
 Suits at Law by and against Corporations. 499 
 
 jurisdiction of the suit, it lias tlics^une status, in respect to its own 
 rights or the rights of otliers against it, as a natural person ; and 
 that the presumption is that the members of a banking corporation 
 organized under such act are citizens of the state in which such 
 corporation is located, in all cases where jurisdiction of the court 
 depends upon citizenship ; and that the district court of the 
 United States has jurisdiction of a suit brought against an 
 inhabitant of the district by a national bank located in another 
 state. 
 
 Sec. 343. Same continued. — In a recent case under this act, on 
 the question of citizenship, Blackford, J., after referring to vari- 
 ous provisions of the banking act, observes : " It is quite apparent 
 from all these statutory provisions, that congress regards a national 
 banking association as being located at the place specified in its 
 organization certificate. If such place is a place in a state, the asso- 
 ciation is located in the state. It is indeed at but one place in the 
 state ; but when it is so located it is regarded as located in the state. 
 The requirement that at least three-fourths of its directors of 
 the association shall be residents, during their continuance in 
 ofiice, in the state in which the association is located, especially 
 indicates an intention on the part of congress to regard the asso- 
 ciation as belonging to the state. * * * Where a corporation 
 is created by competent authority — authority as competent, within 
 a given state, to create such corporation and to locate it witliin 
 such state, as is the state itself, and a location and habitat, within 
 such state and not elsewhere, is given by the creating authority 
 to such corporation, there is no reason why the legal presumption 
 should not be, that the members of such corporation are citizens 
 of such state, within the meaning of the second section of the 
 third article of the constitution, and the eleventh section of the 
 judicial act of 1789. The presumption in the case of a corpora- 
 tion created by a state is only arrived at by presuming the mem- 
 
 stdllments of at least ten per centum commence business ; and the payment 
 
 each, on the wliole amount of the cap- of each installment shall be certified 
 
 ilal, as frequently as one installment to the comptroller, under oath, by the 
 
 at the end of each succeeding month president or cashier of the associa- 
 
 from the time it shall be authorized tion." 
 by the comptroller of the currency to
 
 600 Petvate Cokpoeations. 
 
 bers of the corporation to be citizens of the United States, and to 
 be residents in the state, and therefore, under the decision in 
 Oassies v. Ballon^^ citizens of the state.'' * 
 
 It seems, therefore, from the foregoing, that a corporation is a 
 citizen of the state where it is created, in the sense in wliieh it is 
 used in that part of the constitution of the United States which 
 refers to the judicial powers of lier courts; and also in the statutes 
 of the United States providing for the jurisdiction of the circuit 
 courts, as well as the statutes providing for the removal of causes 
 from a state court to the circuit court of the United States, of the 
 district where the suit is instituted ; and that the same doctrine as 
 to citizenship applies under the statute relating to the national 
 banking law. 
 
 Sec. 344. Same continued — Where a corporation is created by 
 the laws of one of the states of the United States, or under general 
 laws provided therefor, or under the statutes of the United States, 
 where, by the provisions of the statutes, they have a location 
 within one of the states, this constitutes the corporation a citizen 
 of the state where created, within the meaning of the constitution 
 and the judiciary act, and the statutes providing for the removal 
 of a suit from tlie state' court to the circuit court of the United 
 States ; and it will be conclusively presumed that the members of 
 such a corporation are citizens of the state where such corporation 
 is located.^ 
 
 Sec. 345. Parties to a suit. — It is evident that where a corpora- 
 tion is a party to a suit the other parties should usually be the 
 same as though all were natural persons. But neither the bond- 
 holders nor the stockholders of a corporation are necessary parties 
 to a creditor's bill seeking to subject assets of the corporation to 
 
 »6Pet. 761. Wall. 410; S. C, 48 111. 172; The 
 
 2 Manufacturers' National Bank v. Liverpool Ins. Co. v. The Common- 
 
 Baach, Blatchf.; 1 With. Corp. Cas. wealth of Mass., 10 Wall. 566(1870); 
 
 93; Marshall v, Baltimore, etc., R. The State of Louisiana v. Fordick, 21 
 
 Co.. 21 How. 314. La Ann. 434. And it may hring suits 
 
 ** The Commonwealth of Pennsyl- in the courts of any other state. Park 
 
 vania v. The Quicksilver Mining Co., Bank v. Nichols, 4 Biss. 815 ; Insurance 
 
 10 Wall. 553 ; The Insurance Compa- Company v. The C. D., Jr., 1 Woods, 
 
 nies v. The Commonwealth, 5 Bush, 73(1874). 
 
 68 ; Ducat v. The City of Chicago, 10
 
 Surrs AT Law by and against Corporations, 501 
 
 the payment of debts, where they are represented l)y other parties 
 before the court.^ 
 
 And wliere the property of a corporation was conveyed to trns- 
 tees to secure the payment of debts, and it was sold witliout 
 judicial proceedings, in the execution of a power attempted to be 
 confeiTed by the terms of the deed, but which was invahd because 
 of a statute requiring that all such sales should be made by pro- 
 ceedings in court, it was held, first, that the purchaser was answer- 
 able for the proceeds of the property ; second, that the corpora- 
 tion was a necessary party to any proceeding for its recovery.* 
 So, also, wliere two directors of a corporation instituted an action 
 against the corporation and a preferred stockholder and another 
 dii-ector, to prevent the prefei'red stockholder from suing the cor- 
 poration for an accounting and for dividends, it was held that the 
 plaintiff could not maintain the action ; that the right to the relief 
 sought could not be determined in the suit by the preferred stock- 
 holder ; that the defendants were improperly joined, they having 
 no connnunity of interest ; and that, if such action was main- 
 tainable at all, the corporation only could maintain it.^ 
 
 Sec. 3-i6. Process. — In considering the capacity and incident of 
 a corporation to sue and be sued, it is proper also to notice the 
 general principles relating to process, pleadings, and evidence in 
 such suits. In relation to process it may be observed that, in 
 modern practice, it is the same as though the parties were natural 
 persons. The statutes of the various states generally, if not uni- 
 versally, provide what the original process shall contain, and how 
 it shall be served, not only on natural persons but on copartner- 
 ships and corporations. And jurisdiction of the person is usually 
 secured in case of a corporation, by the service of the process on 
 
 1 The Chicago, etc., R. Co. v. How- the corporation ; that if the suit should 
 
 ard, 7 Wall. 392; S. C., 1 With. Corp. be successful the property would be 
 
 Cas. 1. absorbed in the payment of debts, 
 
 - Samuel v. Holladay, 1 Woolw. leaving nothing to be distributed 
 
 (C. C.)400; S. C, 1 With. Corp. Caa. among its stockholders, and that the 
 
 139. In this case the court also held interest of the plaintiffs, by reason of 
 
 that where proceedings were instituted the small amount of stock held by 
 
 by the stockholders in behalf of them- them, was merely nominal, they would 
 
 selves and all others who might come not order the cause to stand over for 
 
 in and take part in the litigation, and service on the corporation. lb. 
 
 it appeared that the bill had been ^ Gould v. Thompson, 39 How. Pr. 
 
 pending six years without service on 5.
 
 502 Private Coepoeations. 
 
 some officer in the same manner as tliough it were a natural per- 
 son. Statutes usually provide tliat the original process against a 
 private corporation may be served in the usual way of service, on 
 the president or other officer, or on any general agent of such cor- 
 poration, or upon some local agent of the corporation, within the 
 jurisdiction of the court where the suit was brought ; especially is 
 the latter the case if the suit relates to matters growing out of or 
 connected with the business of the office or agency.* 
 
 Sec. 347. Pleadings In relation to pleadings, also, they are 
 
 generally required to be the same, in most if not all respects, as 
 though the parties to the suit were natural persons, and the suffi- 
 ciency of them must be adjudged as in ordinary cases between in- 
 dividuals. But in certain proceedings, owing to the peculiar 
 character of the corporate body, and the extent or limit of the 
 duties and powers of the corporation dependent upon the charter 
 or act under which it is instituted, matters may be required to be 
 pleaded that would have no pertinence except that a corporation 
 was a party. Thus, in an action by a foreign corporation, for an 
 alleged libel against it, on demurrer to the declaration, it was held 
 that the charter should be set out at length, in order that it might 
 be seen whether the publication was false in stating the mode in 
 which it authorized the business of the company to be done, and 
 which was the subject of the criticism which constituted the 
 alleged libel. 
 
 On this question, Mr. Justice Lawrence, who delivered the 
 opinion of the supreme court of Illinois, observed : " It would be 
 clearly against public policy to treat as libelous an article Mdiich 
 merely assumes that an insurance corporation proposes to do for 
 its own advantage, or that of its stockholders, whatever its charter 
 may expressly authorize it to do. If a charter is obtained by any 
 
 ' Code of Iowa (1873), §§ 2611-2613. such person. Oxford Iron Co. v. Sprad- 
 
 As to service upon an agent, under the ley, 42 Ala. 24 ; Talladega Ins. Co. v. 
 
 statutes of Illinois (1853), see St. McCullough, id. 667. 
 Louis, etc., R. Co. V. Dorsey, 47 111. And where tlie statute provided for 
 
 288. service of original notice, in certain 
 
 It must appear, in order to sustain cases, upon an agent or clerk, it was 
 a default against a corporation, that held that a service made upon a bag- 
 service of the requisite process and gage-master, or hack-master, would not 
 papers was made upon some person be a good service. Richardson & Co. 
 occupying a relation to the corporation v. The Burlington, etc., R. Co., 8 Iowa, 
 that they could legally serve upon 260; 8 How. Pr. 308.
 
 Suits at Law by and against Corporations. 503 
 
 corporation which seeks to secure for its own emoluments tlie con- 
 trol of the money of individuals, it is proper to call the attention 
 of the public to its provisions, and to take it for granted that the 
 incorporation proposes to avail itself of whatever privileges, in 
 dealing with the public, it has induced the legislature to bestow. 
 A free criticism of the character of an insurance company, or of 
 any other incorporation which claims the confidence of the public, 
 and seeks the possession of its funds, is to be encouraged rather 
 than repressed, as a means of public security ; and if an insurance 
 company has procured a charter which authorizes it to pay an 
 interest of thirty per cent per annum to its stockholders, before 
 laying by a fund for the security of its policy-holders, we certainly 
 cannot hold a publication libelous, merely because it assumes 
 that the company will do for the profits of its stockholders, that 
 which it has obtained an express power to do ; and because it 
 argues that a company, organized under such a charter, must 
 necessarily be unworthy of public confidence. ' This brings us to 
 the precise question upon this record, namely : Does the charter 
 of this company authorize it to do what the publication says it 
 proposes to do? If it does, the publication cannot be considered 
 libelous. It would be merely a just criticism upon an objection- 
 able charter, and a proper caution to the public against trusting 
 its money to a corporation which has obtained a legislative right 
 so to use that money as necessarily to make the public insecure. 
 If the charter contains no such authority, and the company does 
 not propose to do its business in that method, the publication may 
 be libelous. Herein contains the fatal detect in the declaration. 
 It nowhere purports to set out the charter, either in substance or 
 in liaec verba. * * * The plaintiff should have set out the 
 charter at length, that the court might determine whether the 
 publication was false in stating the mode in which it authorized 
 the business of the company to be done. The declaration, it is 
 true, has the usual formula, to the effect that the defendant falsely 
 and maliciously wrote, published, etc., but in a case of this charac- 
 ter it is not sufficient." ^ 
 
 Sec. 348. Same continued. — As a general rule, it is not necessary 
 for a corporation plaintiff to set forth in its declaration the articles, 
 
 ' The Halinemaunian Life Ins. Co. v. Beebe, 48 111. 87 ; S.C, 1 With. Corp. 
 Caa. 420.
 
 504 Private Cokpoeations. 
 
 or act of incorporation, if it be a private one ; it is sufficient to 
 aver the fact and prove tlie same on the trial if it is controverted.* 
 
 Sec. 349. When party is estopped to deny the corporate existence. — 
 "VVlien the action is brought by the corporation, on a contract exe- 
 cuted by the defendant to it, the general rule is that the plaintiff 
 need not aver or prove tlie corporate existence, and the defend- 
 ant is estopped from denying it, in the absence of fraud on the 
 part of the cor2)oration.^ But where there is fraud, on the part 
 of the corporation, in obtaining the contract, the party contract- 
 ing with it is not estopped from denying its corporate existence.^ 
 Thus, where a bill in chancery was filed to set aside a conveyance 
 of real estate, alleged to have been obtained by fraud and mis- 
 representation of the corporation, it was held that with proper 
 averments the fact whether said corporation ever had a corporate 
 existence, so as to enable it in its corpomte capacity and name to 
 take and hold property, might be inquired into ; that if a com- 
 pany professing to have a corporate existence, which it in fact 
 does not possess, acquires property for a particular purpose in its 
 corporate name, and conveys it to another, the sufficiency of such 
 conveyance or transfer may be inquired into collaterally.* And 
 where a party is estopped from denying the existence of the cor- 
 poration, at the time he recognized it as such, if he denies i;s ex- 
 istence subsequently, he must show how it ceased to exist.^ But 
 
 ' Selma, etc., R. Co. v. Tipton, 5 Ala. ingum Manuf . Co., 4 id. 2G7 ; Zioa 
 787 ; California Navigation Co. v. Church v. St. Peter's Church, 5 Watta 
 Wriglit, 6 Cal. 258 ; Frye v. Bank of & 8. 215 ; Lighte v. Everett Ins. C"o.,5 
 Illinois, 10 111.332; Spangler v. Indi- Bosw. 716; Union Mut. Ins. Co. v. 
 ana, etc., R. Co., 21 id. 276; Heaston v. Osgood, 1 Duer, 707; Kennedy v. Cot- 
 Cincinnati, etc., R. Co., 16 Ind. 275; ton, 28 Barb. 59 ; Lafayette Ins. Co. v. 
 United States v. Haskins, 1 Johns. Cas. Rogers, 30 id. 491; Phenix Bank v. 
 133 ; Utica Bank v. Smalley, 2 Cow. Dounell, 41 id. 571 ; Acome v. Am. 
 770; Dutchess Cotton Man. v. Davis, Min. Co., 11 How. Pr. 24; Shoe and 
 14 Jolins. 245; Bank of Michigan v. Leather Bank v. Brown, 9 Abb. Pr. 
 Williams,5 Wend. 482; Grays v. Turn- 218; Howe Machine Co. v. Snow, 83 
 pike Co., 4 Rand. 578. Iowa, 433. 
 
 ■^Dutchess Cotton Manuf. Co. v. ^ Stoops v. Greensburgh.etc, R. Co., 
 
 Davis, 14 Johns. 245; Hanitramck v. 10 Ind. 47; Ensey v. Cleveland, etc., 
 
 Edwardsville, 2 Mo. 169; Hughes v. R. Co.,id, 178; Fort Wayne Turnpike 
 
 Bank of Somerset, 5 Litt. (Ivy.) 47 ; Co. v. Deam, id. 563. 
 
 Searsburgh Turnpike Co. v. Cutler, 6 ^ Carey v. The Cincinnati, etc., R. 
 
 Vt. 315 ; Tar River Nav. Co. v. Neal, Co., 5 Iowa, 357. 
 
 3 Hawk. (N. C.) 520 ; Bennington Iron ^ Ensey v. Cleveland, etc., R. Co., 10 
 
 Co. V. Rutherford, 18 N. J. L. 105 ; Ind. 178; Fort Wayne Turnpike Co. v. 
 
 Richardson v, St. Joseph's Iron Co., 5 Deam, supra. 
 Blackf. (Ind.) 146; Harrison v. Musk-
 
 Suits at Law by and against Coeporationb. 
 
 505 
 
 it is held that a contractor with a corporation Is estopped from 
 setting up a fraudulent organization of the corporation in defense 
 of a suit brought by the company against him.' 
 
 Sec. 350. When the corporation is estopped from denying its corpo- 
 rate existence.— It is also a general doctrine, founded upon princi- 
 ples of justice and equity, that a corporation, dealing with others 
 as such, is estopjDed from denying its corporate existence,'' and 
 this rule has become a matter of statutory regulation and adop- 
 tion in various states.* 
 
 Sec. 351. General denial.— At common law it was well settled 
 that if, in a suit brought by a corporation, the defendant plead to 
 the merits, he admitted the capacity of the defendant to sue ; and 
 that if he merely made a general issue, it dispensed with the ne- 
 cessity of all proof of corporate existence and of their right to sue.* 
 
 ' State V. Bailey, 16 Ind. 46 ; Jones 
 V. Ciacinnati, etc., R. Co., 14 id. 89; 
 Hubbard v. Chappel, id. 601 ; Evans- 
 ville, etc., R. Co. v. Evansville, 15 id. 
 395 ; Meikel v. German Savings, etc., 
 Soc, 16 id. 181 ; Brovvnlee v. Ohio, 
 etc., R. Co., 18 id. 68 ; Commissioners 
 V. Bright, id. 93; Washington College 
 V. Duke, 14 Iowa, 14; Hamtramck v. 
 Bank of Edwardsville, 2 Mo. 169; 
 Camp V. Byrne, 41 id. 535; Congre- 
 gational Soc. V. Perry, 6 N. H. 
 164 ; Cochran v. Arnold, 58 Penn. St. 
 399. 
 
 Neither can it be sliown in defense 
 of an action by a corporation that it 
 lias forfeited its rights by misuser or 
 nonuser, as it is the privilege of the 
 state only in such cases to secure a 
 judgment of forfeiture by direct pro- 
 ceedings for that purpose. Cochran 
 V. Arnold. 58 Penn. St. 399 ; Center 
 Turnpike Co. v. McConaby, 16 S. & R. 
 140 ; Lehigh Br. Co. v. Lehigh Coal 
 Co., 4 Rawle, 9 ; Chester Glass Co. v. 
 Dewev, 16 Mass. 103 ; Searsborough 
 Turnpike Co. v. Cutler, 6 Vt. 315 : 
 Union Branch R. Co. v. East Tenn. R. 
 Co., 14 Ga. 337 ; Cleveland R. Co. v. 
 Erie, 37 Penn. St. 380. 
 
 And a payment of a portion of sub- 
 scription to the stock of a corporation 
 is sufficient to estop the subscribers 
 from denying the corporate existence 
 in an action to recover the balance, 
 
 64 
 
 Maltby v. North Western R. Co., 16 
 Md. 433; Black River R. Co. v. Clarke, 
 25 N. Y. 208. 
 
 2 Dooley v. Cheshire Glass Co., 15 
 Gray, 494 ; Merrick v. Reynolds En- 
 gine Co. , 101 Mass. 385. 
 
 *The Code of Iowa, tit. 9, chap. 1, 
 § 1089, provides : " No body of men 
 acting as a corporation under the pro- 
 visions of this chapter [relating to cor- 
 porations] shall be permitted to set 
 up the want of a legal organization as 
 a defense to an action against them 
 as a corporation ; nor shall any per- 
 son sued on a contract made with such 
 a corporation, or sued for an injury to 
 its property, or a wrong done to its 
 interests, be permitted to set up a 
 want of such legal organization in hia 
 defense." 
 
 * Alderman v. Finley, 10 Ark. 433 ; 
 Teaton v. Lynn, 5 Pet. 331 ; Mississippi, 
 etc., R. Co. V. Cross, 20 Ark. 443; 
 Phenix Bank v. Curtis, 14 Conn. 437 ; 
 Railsback v. Liberty, etc., Turnpike 
 Co., 2 Ind. 656; Jones v. Cincinnati, 
 etc., R. Co , 14 id. 89; Hardy v. Merri- 
 weather, id. 203 ; Hubbard v. Chappel, 
 id. 601 ; Harrison v. Martinsville, etc., 
 R. Co., 16 id. 505 ; Carpenter v. Mercan- 
 tile Bank, 17 id. 253; Commissioners 
 v. Bright, 18 id. 93 ; Penobscot Boom 
 Co. V. Lamson, 16 Me. 334; Savage 
 Manuf. Co. v. Armstrong, 17 id. 34 ; 
 Putnam Free School v. Fisher, 30 id.
 
 506 Private Corpokations. 
 
 This was, however, held not to apply in case of a foreign corpo- 
 ration.^ 
 
 Sec. 352. Proof of incorporation. — Where, in other cases, it be- 
 comes necessary to prove an incorporation this may be done by 
 an exemplification of the act under which it was constituted or 
 authorized, and proof of the acceptance of its provisions. This 
 proof of acceptance may be shown by the direct action of the 
 corporators, as shown by the records of the corporation, or by 
 acts of user under it. We have already considered what acts of 
 corporations will be considered as an acceptance of a charter or 
 act of incorporation.^ General statutes relating to incorporation 
 may be proved like any other public and general statutes pub- 
 lished by authority of the legislature, and i^rirria facie^ it is suf- 
 ficient to show that the book containing such statutes purports to 
 have been printed by public authority-; for it is almost if not 
 the universal course for the legislature of the various States as 
 well as the congress of the United States, to have the laws and 
 resolutions of each session of them printed by authorized parties ; 
 and it is also usually provided by them, that certain competent 
 persons shall compare the copies to be published as authority, 
 with the original enrolled acts of the legislature or of congress, 
 as the case may be, and it is but reasonable that general laws and 
 statutes so purporting to be printed should, at least, be received 
 as p?'ima facie evidence that they are authorized and correct. 
 
 Sec. 353. Same continued. — It is proper to say that the private 
 corporations in this country are almost invariably created under such 
 general laws, and that under the provisions of the same it would or- 
 dinarily be necessary only to prove that the corporators had com- 
 plied with the statutes in that respect. This may generally be 
 shown by the original articles of incorporation, signed by the 
 
 533; Roxbury v. Huston, 37 id. 43; Metropolis v. Orme, 3 Gill. 443 ; Whit- 
 People V. Turnpike and Bridge Co., 20 tingon v. Farmer.s' Bauls, 5 Harr. & J. 
 Barb. 518 ; Orono v. Wedgewood, 44 489 ; Methodist Episcopal Church of 
 Me. 49 ; Rheem v. Naugatuck Wheel Cincinnati v. Wood, 5 Ohio, 286. 
 Co.. 33 Penn. St. 356 ; Bank of the 
 
 ' Henriques v. Dutch W. I. Co., 3 United States Bank v. Stearns, 15 
 
 Ld. Raym. 1535; School District, etc., Wend. 314 ; Bank of Mich. v. Williams, 
 
 V. Blaisdell, 6 id. 198. See, also, 5 id. 483. 
 
 Lewis V. Bank of Ky., 13 Ohio, 132 ; * gge ante, § 28 et seq.
 
 Suits at Law by and against Corporations. 
 
 507 
 
 original persons desiring to organize a corporation, and wliich is 
 usually required to be filed and recorded in some one or more 
 public offices, or by a copy or transcript of the same duly authen- 
 ticated by the proper officer, having charge of the records of the 
 original articles or certificate of incorporation.^ 
 
 Sec. 354. Corporate records. — The organization of a corpora- 
 tion is of course a matter which may be proved by its records." 
 The acts of a corporation may, as we have seen, furnish evidence 
 of acceptance of a corporate charter, or the provisions of a general 
 act for incorporating, and the intention in this respect, as well as 
 the positive and direct acceptance by the will of the corporation, 
 may be most satisfactorily shown by its records, for neither 
 the private views nor the public declarations of individual mem- 
 
 ■ Printed copies of legislative acts 
 and of reports of the decisions of the 
 courts, purporting to ba published 
 by authority, are sufficient prima fa- 
 de evidence of the matters found 
 therein, and that the publication is 
 authorized. Young v. Bank of Alex- 
 andria, 4 Cranch, 388; Biddis v. 
 James, 6 Binn. 321 ; Eld v. Qorham, 
 20 Conn. 8 ; Watkina v. Holnian, 16 
 Pet. 25. Acts of incorporation were 
 by the statutes of Massachusetts to be 
 deemed public statutes, and may be 
 given in evidence without specially 
 pleading the same. Rev. Stats., chap. 2, 
 § 3. And in Ohio it is enacted that in 
 pleading a private statute , or a right 
 derived therefrom, it shall be suffi- 
 cient to refer to the statute by its title 
 and the day of its passage, and the 
 court shall thereupon take judicial 
 notice of the same. Rev. Stat, bv 
 Curwin (1854), vol. 3, p. 1956. The 
 acts printed by the king's printers are 
 always good evidence to a jury, though 
 they may not be good evidence upon 
 an issue of mil tiel record. Anon., 2 
 Seld. 566, opinion by Holt, C. J. The 
 laws revised and adopted by the ter- 
 ritorial legislature of Michigan in 1827, 
 were the statutes previously printed. 
 It was held that the printed book con- 
 taining these statutes was the best 
 evidence of what the statute was, and 
 that the original record of the statutes 
 was not admissible in evidence to 
 show that the revision was incorrect, 
 especially where the alleged error is 
 
 not discovered for a long time, and 
 the statute, as printed, has been 
 treated and considered as the actual 
 law. Pease v. Peck, 18 How, (U. S.) 
 595. 
 
 An act of congress, approved June 
 20, 1874, providing for the publication 
 of the Revised Statutes and the laws 
 of the United States, is as follows : 
 
 "Sec. 2. That the secretary of 
 state is hereby charged with the duty 
 of causing to be prepared for printing, 
 publication and distribution, the Re- 
 vised Statutes of the United States, 
 enacted at tliis present session of con- 
 gress ; that he shall cause to be com- 
 pleted the head-notes of the several 
 titles and chapters, and the marginal 
 notes referring to the statutes from 
 which each section was compiled and 
 repealed by said revision, and refer- 
 ences to the decisions of the courts of 
 the United States, explaining or ex- 
 pounding the same, and such decisions 
 of the state courts as he may deem 
 expedient, with a full and complete 
 index to the same. And when the 
 same shall be completed, the said sec- 
 retary shall duly certify the same un- 
 der the seal of the United States, and 
 when printed and promulgated, as 
 hereinafter provided, the printed vol- 
 ume shall be legal evidence of the 
 laws and treaties therein contained in 
 all courts of the United States and of 
 the several states and territories." 
 
 ■^ Duke V. Cahawba I^av, Co., 10 
 Ala. 83.
 
 508 Private Corpokations. 
 
 bers of the corporation can, as a general rule, furnish evidence of 
 this fact or of any corporate act.' But .the unrecorded acts of a cor- 
 poration, or of the directors, may sometimes be proved by parol, 
 unless otherwise provided in the charter.'' And omissions in the 
 corporate minutes may also be supplied by parol testimony.^ And 
 Avhere, on a j^rocceding for a mandmiius to compel a defendant 
 to deliver np to the relators certain account books of the corpora- 
 tors, it appeared that the defendant had acted as secretaiy of the 
 relators about two months ; that he had in his possession books, 
 in one of which he had written the minutes of the proceedings of 
 the meeting of the corj^orators and of the stockholders and 
 directors, and in another were contained the signatures of the sub- 
 scribers to the capital and the receipts of the relators, but that 
 each of these books was purchased with the defendant's own money, 
 it was held that the books were the property of the relators, and 
 were so as soon as the defendant, as secretary, began to put in 
 them the records of the relators ; that the defendant's possession 
 was the possession of the company, and that when he ceased to be 
 secretary he had no right to withhold the books from the relators.'* 
 And neither the bond nor stockholders of a corporation are neces- 
 sary parties to a creditor's bill seeking to subject assets to the pay- 
 ment of debts, where they are represented by the parties before 
 the court. ^ 
 
 Sec. 355. Same continued. — It is evident that the records of 
 corporations may be imjjortant, many times, as evidence both for 
 and against them. On the subject of such evidence. Prof. Green- 
 leaf remarks : " There are other records which partake both of a 
 public and private character, and are treated as one or the other, ac- 
 cording to the relation in w^iich the applicant stands to them. Thus, 
 the books of a corporation are public with respect to its members, 
 but private with respect to strangers.^ In regard to its members, 
 a rule for inspection of the writings of corporations will be granted, 
 
 > Bartlet.t v. Kinsley, 15 Conn. 327. Co., 7 Hare, 131 ; Holyoke Bauk v. 
 
 ^ Langsdale v. Bonton, 12 Ind. 467. Manufacturing Co., 9 Cush. 576 , Hall 
 
 s Vicksburgli Co. v. Ouchita, 11 La. v. Railroad, 21 L. R. 138 ; 1 Redf . on 
 
 Ann. 649. Railways, 578 ; Boon v. Chiles, 8 Pet. 
 
 * State V. Goll. 32 N. J. L. 285. 532 ; Story v. Livingston, 13 id. 359. 
 
 ' The Chicago, etc., R. Co. v. How- « Greenleaf on Ev. 116. 
 ard, 7 Wall. 392 ; Bagshaw v. Railway
 
 Suits at Law by and against Corporations. 509 
 
 of course, on their application, where such inspection is shown to 
 be necessary in regard to some particular matter in dispute, or 
 where the granting of it is necessary to prevent the applicant 
 from suiiering injury, or to enable him to perform his duties ; 
 and the inspection will then be granted, only so far as is shown to be 
 essential to that eud.^ But a stranger has no right to such rule, 
 and it will not be granted, even where he is defendant in a suit 
 brought by a corporation." * In this class of records are enume- 
 rated " parish books, transfer books of the East India Company, 
 public lottery books, the books of incorporated banking com- 
 panies, a bishop's registry of presentations, and some others of the 
 like kind." ' 
 
 Sec. 356. stockholder's rights in equity. — To warrant a stock- 
 holder to institute a suit in equity in his own name, against a 
 wrong-doer whose acts operate to the prejudice of the interests of 
 the stockholders, such as diminishing their dividends and lessen- 
 ing the value of their stock, application must first have been 
 made to the directors of the company to institute a suit in its 
 own name, and they must have refused. Such refusal is essential 
 to give the stockholder any standing in court, in case the charter 
 confers upon the directors the general management of the busi- 
 ness of the company.^ But we shall, in the following chapter, 
 consider the subjects of suits in equity by and against corpora- 
 tions and other parties. 
 
 1 Rex V. Merchant Tailors' Co. , 3 B. Farmer, 1 Str. 646 ; Brace v. Ormond, 
 
 & Aid. 115; The People v. Throop, 1 Merv. 409; Union Bank v. Knapp. 
 
 13 Wend. 183. 3 Pick. 96; McKavlin v. Bresslin, 8 
 
 -1 Greenl. Ev., § 474. See, also, Gray, 177; Mortimer v. McCallan, 6 
 
 Bank of Utica v. Hillard, 5 Cow. 419 ; M. & W. 58 ; Rex v. Bp. of Ely, 8 E. 
 
 S. C, 6 id. 63 ; Imperial Gas Co. v. & C. 113 ; Finch v. Same, 3 M. & Ry. 
 
 Clarke, 7 Bing. 95 ; Rex v. Justice of 137. 
 
 Buckingham, 8 B. & C. 375. ■» Memphis v. Dean, 8 Wall. 64 ; 18 
 
 sGeeryv. Hopkins, 3 Ld. Raym. How. (U. S.) 331. 
 851 ; S. C, 7 Mod. 139 ; Shelling v.
 
 510 Private Cokpoeations. 
 
 CHAPTER XIY. 
 
 SUITS IN EQUITY BY AND AGAINST COKPORATIONS AND DIRECTORS. 
 
 Sec. 357. Remedy iu equity by and against corporations. 
 
 Sec. 358. Rights, liabilities and remedies of various parties. 
 
 Sec. 359. Rights and liabilities of, and remedies against, directors. 
 
 Sec. 360. Same continued. 
 
 Sec. 361. Same continued. 
 
 Sec. 303. Same continued. 
 
 Sec. 363. Stockholders' liability in equity. 
 
 Sec. 364. Rights of stockholders to restrain acts ultra vires. 
 
 Sec. 365. Creditors' rights iu equity for a misappropriation of the corporate 
 
 fund. 
 
 Sec. 366. Same continued. 
 
 Sec. 367. Doctrine, generally, as to parties in -equitable proceedings. 
 
 Sec. 368. Same continued. 
 
 Sec. 369. Same continued. 
 
 Sec. 370. Where an injunction will be granted. 
 
 Sec. 371. Where an injunction will not be granted. 
 
 Sec. 372. Specific performance — right of way. 
 
 Sec. 35T. Remedy in equity by and against corporations. — We have 
 already treated of suits at law by and against private corporations 
 as a common-law incident, and shown where, under our laws and 
 the federal constitution, the suits may be brought ; the rights of 
 corporations as citizens ; their rights in court under the national 
 banking law ; the proper parties to such suits ; and referred to the 
 subject of parties, process, pleadings, evidence, etc., in connection 
 therewith. But we propose in this chapter to discuss those reme- 
 dies in equity which parties may possess, growing out of their 
 relations with corporations. It will be evident that the mere 
 legal abstract rights of parties, as frequently stated in the books, 
 would be of little consequence were it not for provisions made 
 to secure the enforcement of them. Hence the maxim, " that 
 wherever the law gives any thing to a person it also gives a 
 remedy for an injury thereto ; lex semper debet remedium / that 
 there is no wrong without a remedy ; uhi jus ihi rev%edium,. 
 If a person has a right, he must have a means to vindicate and 
 maintain it, and a remedy if he is injured in the exercise and 
 enjoyment of it."
 
 Suits in Equity by and against Corporations, etc. 511 
 
 Sec. 358. Rights, liabilities and remedies of various parties. — From 
 what has already been said it will be apparent that not only the 
 corporation has a right to sue and is subject to suit by members 
 and other persons, whose rights may l)e infringed l)y it, but also 
 that other parties related to the corporation as director, stock- 
 holder, bondholder, trustee, or creditor may have rights and be 
 subject to liabilities growing out of the corporate relation, which 
 requires a particular consideration. 
 
 Sec. 359. Rights and liabilities of, and remedies against, directors. — 
 It must be apparent that one of tlie most important relations 
 with private corporations for pecuniary profit is that of directors. 
 They usually have, under the constating instruments, full jiower 
 in most, if not all respects, to act for, if not as, the corporate 
 body, and to control and manage all tlie corporate business. 
 Hence, this authority cannot be controlled, nor their rights in 
 this respect infringed by the Corporation. If the constating in- 
 struments have conferred on the directors the power to control 
 and manage the coj'porate affairs, the corporate body have no 
 right to interfere with this management, nor can a majority of 
 the corporators require the board of directors to act in matters 
 left to their discretion, contrary to their judgment.' 
 
 On the other hand, the directoi'S are the primary agents of the 
 corporation, and, as we have already noticed,''' the relation of trus- 
 tee and cestui que trust may, and usually does, exist between 
 them on the stock and bondliolders and creditors, and the fiduciary 
 character of this relation requires of them the highest and most 
 scrupulous good faith in their transactions for the corporation and 
 these stock and bondholders and creditors. " The company have 
 a right to the services of their directors whom they remunerate 
 by considerable payments ; they have a right to their entire 
 services ; they have a right to the voice of every director, and to 
 the advice of every director in giving his opinion upon matters 
 which are brought before the board for consideration, and the gen- 
 eral rule that no trustee can derive any benefit from dealing with 
 those funds of which he is a trustee applies with still greater 
 
 ' Dana v. Bank of the U. S., 5 W. Henry Iron Co., 12 Barb. 27 ; State v. 
 & S 247 ; Commonwealth v. St. Mary's Bank of La., 6 La. 745. 
 Church, 6 S. & R. 508 ; Conro v. Port « See chap. 6.
 
 512 
 
 Pkivate Corporations. 
 
 force to the state of things in whicJi the interest of the tnistee 
 deprives the company of thebenelit of his advice and assistance." ' 
 
 Seo. 3G0. Same continued. — One of the niost effoctnal remedies 
 in such cases is by injunction to restrain the unlawful acts of the 
 directors, or in case of the proposed execution of a contract xiltra 
 vires, to restrain the execution of the same by the directors as 
 the agents, of the corporation. 'A shareholder may restrain any 
 mismanagement on the part of directors of a corjjoration as for a 
 
 1 Lord Chancellor Hatherley in Im- 
 perial, etc., Association v. Coleman, L. 
 R., 6 Ch. 567. See. also, Flint, etc., R. 
 Co. V. Dewey, 14 Mich. 477 ; ante, ^ 169 
 et seq. ; Dodge v. Woolsey, 18 How. 
 (U. S.) 331. In the case last cited the 
 plaintiff was a stockholder in a bank 
 incorporated and doing business in 
 the state of Ohio. The defendant, a 
 collector, was about to collect ^y dis- 
 tress certain illegal taxes from, the 
 bank, and the plaintiff requested the 
 bank to take legal steps to prevent 
 this proceeding, which it refused to do. 
 The supreme court of the United 
 States on these facts held that the 
 plaintiff could maintain his suit 
 against the collector for an injunction, 
 the bank being inade a party. 
 
 In Samuel v. Holladay, 1 Woolw. (U. 
 S. C. C.) 400, Justice Miller, in com- 
 menting on this decision, observes : 
 " I think I am correct in stating that 
 the propositions supposed by the court 
 to be established by this examination 
 may be stated thus : 
 
 "1. That in the case of an incorpo- 
 rated company with a capital stock di- 
 vided into shares and held by individ- 
 uals the corporation and the share- 
 holders are distinct legal persons, and 
 can sue and be sued by each other. 
 
 " 2. When the directors of a cor- 
 poration have misapplied a portion 
 of its funds to which a shareholder 
 has a distinct right, as, for instance, a 
 dividend, he may in an action recover 
 the amount misapplied, and when 
 such misapplication has not been ef- 
 fected, but is threatened, he may, by 
 bill in equity for an 'injunction, pre- 
 vent it. 
 
 " 3. When a corporation or its rights 
 of property are threatened with an in- 
 jury of such a nature as the court will 
 enjoin, but it refuses to take any legal 
 Steps to protect itself, a stockholder 
 
 may maintain a bill in equity against 
 the party threatening the mischief and 
 the corporation, to restrain by injunc- 
 tion the commission of the act, in or- 
 der thereby to protect his interest 
 from immediate danger. 
 
 " But no case is cited, nor does any 
 dictum in the opinion of the court go 
 to the length of asserting, that when 
 a corporation has been injured by a 
 tort or a breach of a contract, or has 
 any right of action, legal or equitable, 
 against a party, an individual share- 
 holder can come into court and prose- 
 cute that cause of action because the 
 
 corporation fails or refuses so to do. 
 * * * 
 
 " Again, the court says, that the ju- 
 risdiction at the instance of a share- 
 holder is to apply preventive remedies, 
 by injunction, to restrain those who 
 administer the affairs of the corpora- 
 tion from doing acts which would 
 amount to a violation of the charter, 
 etc. It also extends to inquiring con- 
 cerning, and enjoining, as the case 
 may require, individuals, in whatever 
 character they may assume to act, 
 from prosecuting any course of con- 
 duct which is in violation of a corpo- 
 rate franchise, or in denial of a right 
 growing out of it, when, for the in- 
 jury which will result, there is no ade- 
 quate remedy at law. We see here, 
 that where other parties are concerned, 
 the jurisdiction is limited to cases in 
 which the preventive remedies are ef- 
 ficient for the protection of rights en- 
 dangered by the neglect of the direc- 
 tors, and the threatened aggressions of 
 others. It would be a doctrine at- 
 tended with very serious consequences 
 if every individual shareholder, as- 
 suming the place of the corporation, 
 could decide for it when actions should 
 be brought to vindicate its supposed 
 right."
 
 Suits in Equity by and against Corporations, etc. 513 
 
 misappropriation of the corporate fimds.^ And he may com- 
 mence an action in equity for himself, and all others having a 
 common interest with him, to restrain unlawful acts of the direc- 
 tors by injunction, or to require such parties to account for funds 
 of such corporation, which have been misappropriated by such 
 directors to their own use, even though such action may be op- 
 posed by all the other stockholders." For although the general 
 doctrine is that the corporation is the proper party to institute a 
 suit for an injury to corporate rights, and to protect the stock- 
 holders, yet where the corporation refuses to sue, and the interests 
 of a stockholder require it, or where the wrong is done by the 
 directors, who are the primary agents, and may in some cases be 
 considered, so far as their acts are concerned, as the corporation 
 itself, or at least as having control of the corporate interests, a 
 stockholder may, in case of their refusal to act, or in some cases 
 without such refusal, as we shall hereafter notice, institute a suit 
 on behalf of himself and of all other stockholders, where the 
 protection of their rights require it, but in which case it would 
 usually be proper, if not necessary, to make the corporation itself 
 a defendant. ^ 
 
 ' Kean V. Johnson, 1 Stockt. 401; ever character they may profess to act, 
 
 Simpson v. Westminster, etc., R. Co., if the subject of complaint is an im- 
 
 8 H. L. 717; Ernest v. Nicholls, 6 id. plied violation of a corporate franchise, 
 
 401. or the denial of a right growing out 
 
 ^ On this subject it is observed by of it, for which there is not an ade- 
 
 the court in Dodge V. Woolsey, 18 How. quate remedy at law." See, also, 
 
 (U. S.) 381, as follows : " It is now no Davenport v. Dower, 18 Wall. 626; 
 
 longer doubted, either in England or Hersey v. Veazie, 24 Me. 9; Smith 
 
 the United States, that courts of eqitity v. Hurd, 12 Mete. 871 ; Allen v. Curtis, 
 
 in both have a jurisdiction over corpo- 26 Conn. 456 ; Western R. Co. v. 
 
 rations, at the instance of one or more Nolan, 48 N. Y. 513 ; March v. East- 
 
 of their members, to apply preventive ern R. Co., 40 N. H. 548 ; Same v. 
 
 remedies by injunction, to restrain Same, 43 id. 515 ; Lauman v. Lebanon, 
 
 those who administer them from doing 30 Penn. St. 46. 
 
 acts which would amount to a violation - See Dodge v. Woolsey, 18 How. (U. 
 
 of charters, or to prevent any misap- S.) 331 ; Samuel v. Holladay, 1 Woolw. 
 
 plication of their capitals or profits, 400; Heath v. Erie R. Co., 8 Blatchf. 
 
 which might result in lessening the 347 ; Brewer v. Proprietors, etc., 104 
 
 dividends of stockholders or the value Mass. 378 ; Brown v. Vandyke, 9 N. J. 
 
 of their shares; as either may be Eq. 795; Butts v. Woods, 37 N. Y. 
 
 practiced by the franchises of a cor- 817 ; Green's Brice's Ultra Vires, 
 
 .poration, if the acts intended to be 183, where it is said: "They — the 
 
 done create what is in the law denom- members complaining — cannot bring- 
 
 inated a breach of trust, and the juris- a suit either individually or as a class, 
 
 diction extends to inquiry into and to or in the name of some one or more 
 
 enjoin, as the case may require, any on behalf of themselves, etc., unless, 
 
 proceedings by individuals, in what- indeed the corporation — that is to say, 
 
 65
 
 514 
 
 Private Corporations. 
 
 Sec. 361. Same continued. — The protection of the rights of 
 shareholders in incorporated companies against the improper and 
 illegal action of other shareholders, or of the officers of the com- 
 pany, is a favorite branch of the jurisdiction of equity by injunction. 
 And it may be asserted as a general rule that courts of equity will 
 enjoin, on behalf of the stockholders of an incorporated company, 
 any improper alienation or disposition of the corporate property 
 for other than corporate purposes, and will restrain the commis- 
 sion of acts wliich are contrary to law and tend to the destruction 
 of the franchises, as well as the improper management of the 
 business of the company, or a wrongful diversion of its funds. 
 And in such a case equity will grant relief at the suit of a single 
 stockholder.^ 
 
 majority — are acting fraudulently to- 
 ward the members complained, by re- 
 fusing to the institute the necessary 
 
 proceedings." Citing At wood v. Mer- 
 ryweather, L. R., 5 Eq. 464, n. 
 
 ' Kean v. Johnson, 1 Stockt. 401 ; 
 Manderson v. Commercial Bank, etc., 
 28 Penn. St. 379 ; Sears v. Hotchkiss, 
 25 Conn. 171 ; Bagshawv. Eastern, etc., 
 R. Co., 7 Hare, 114 ; Colmau v. Same, 
 10 Beav. 1 ; Central, etc., R. Co. v. 
 Collins. 40 Ga. 582 ; Simpson v. West- 
 minster, etc., 8 H. L. 717; GiflFord v. 
 New Jersey, etc., 2 Stockt. 171. 
 
 It was held in Heath v. Erie R. Co., 
 8 Blatchf. 347, that where the acts com- 
 plained of are ultra vires, application 
 to and a refusal of the directors to in- 
 stitute a suit is not essential in order 
 to authorize a suit by a stockholder. 
 In this case it is said ; " Now so far 
 as the bill sets out acts ultra mres, in 
 issuing stock, and breaches of trust, 
 which are frauds on the stockholders, 
 such acts and breaches of trust are 
 beyond the power of the corporation 
 or its directors to affirm, or sanction, 
 or make good ; and in such case, 
 the authorities agree that the reason 
 for the rule for an application to the 
 corporation, or its board of directors, 
 to bring the suit does not exist. Such 
 reason is, that while the stockholder 
 is prosecuting his suit, the corporation, 
 through its board of directors, may 
 affirm and make good the acts com- 
 plained of. But the rule ceases when 
 the reason ceases." 
 
 In French v. GiflFord, 30 Iowa, 148, 
 Day, J., observes : " The doctrine best 
 sustained by authority, and most in 
 consonance with reason and justice, 
 seems to be, that courts of equity, aside 
 from statutory provisions, do not exer- 
 cise a jurisdiction over a corporation 
 as over a partnership, to dissolve it and 
 distribute its assets ; but that it will 
 aflFord a stockholder relief from the 
 malfeasance of those intrusted with 
 the management of the corporate busi- 
 ness." 
 
 Again, in Wright v. Oroville M. Co., 
 40 Cal. 20, the court say : " The cor- 
 porate authority is considered to have 
 been conferred by the stockholders 
 upon the trust and confidence that it 
 will be exerted at least with a view to 
 advance the interest of the stockhold- 
 ers, and not with a purpose to injure 
 and destroy that interest ; and it is 
 settled tha't courts of equity in this 
 country will, at the instance of a stock- 
 holder, control a corporation and its 
 officers, and restrain them from doing 
 acts even within the scope of corporate 
 authority, if such acta, when done, 
 would, under the particular circum- 
 stances, amount to a breach of the very 
 trust upon which, as we have seen, the 
 authority itself has been conferred."
 
 Suits in Equity by and against Corpokations, etc. 515 
 
 Sec. 362. Same continued. — In case, also, of an attempt on the 
 part of tlie majority of the stockholder:^, some of whom are direct- 
 ors, to unlawfully divest the corporation of its funds, or to fraudu- 
 lently mismanage the business, a minority or undoubtedly a single 
 stockholder wg>uld be entitled to an injunction to prevent the 
 same, provided he is diligent in tlie assertion of the right. ^ And 
 it seems now generally conceded, both in this country and in Eng- 
 land, that any stockholder is entitled to an injunction to prevent 
 a violation of a corporate franchise ; and that he may also main- 
 tain a bill in equity against the directors, and compel the company 
 to refund any of the profits improperly applied." 
 
 Sec. 363. stockholder's liability in equity. — We have already 
 noticed that the stockholders of a corporation are liable in equity 
 to account for dividends received on shares of capital stock, where 
 creditors remain unpaid.^ The doctrine on this subject now uni- 
 versally recognized is, that the stockholders are not entitled to 
 dividends of profits upon the capital stock, where there are exist- 
 ing creditors of the corporation ; and that such creditors may, in 
 equity, pursue the consideration in the hands of the stockholders, 
 and compel them to contribute pro rata toward the payment of 
 the claims of creditors, out of the money or property so received.* 
 
 Sec. 36-i. Bight of stockholders to restrain acts ultra vires. — The 
 right of stockholders to restrain, not only the directors, but the 
 corporation as a body, from acts ultra vires is generally recog- 
 nized. For although either the corporation or body of directors 
 may, unless restrained by the constating instruments, manage the 
 affairs of the corporation as they please, so long as they act hona 
 fide, and within the powers conferred upon them, still, if they 
 
 ' Manderson v. Commercial, etc. , 28 400. See, also, Walker v. Devereaus, 
 
 Penn. St. 379 ; Sears v. Hotclikiss, 25 4 Paige, 229. 
 
 Conn. 171, where it was held that the ^ Story's Eq. Jur. (9th ed), § 1252 ; 
 
 fact that a remedy at law exists by an Mumma v. Potomac Co., 8 Pet. 286 ; 
 
 action on behalf of the corporation or Wood v. Dummer, 3 Mason, 308 ; Vose 
 
 of the ao^grieved stockholders, against v. Grant, 15 Mass. 522 ; Spear v. Grant, 
 
 the wrong-doers, constitutes no bar to 16 id. 14 ; Curran v. Arkansas, 15 How. 
 
 an injunction in such a case. (U. S.)307 ; Railroad Company v. How- 
 
 2 Dodge V. Woolsey, 18 How. (U. S.) ard, 7 Wall. 392. 
 331; Samuel v. Holladay, 1 Woolw.
 
 516 Private Cokporations. 
 
 attempt to exceed such j^owers, they may be restrained at the suit 
 of a stockholder or creditor. ^ 
 
 Thus where the officers of a bank do acts contrary to law, and 
 esj^ecially if it endangers the rights of the corporation under the 
 charter ; or, where the majority of the stockholders attempt to 
 fraudulently mismanage the business or divert the funds from the 
 legitimate purposes for which the corj^oration was created, a stock- 
 holder may ask the aid of a court of equity and enjoin such acts." 
 As to every act which is ultra vires, any stockholder has a right 
 to restrain and to prevent a repetition of it, though every other 
 member may be arrayed against him.^ 
 
 " It is a settled rule of equity law," observes Mr. E-edfield, 
 " that a majority of the shareholders in a joint-stock corporation 
 may maintain a suit to restrain the directors of a company, or a 
 majority of the shareholders, from entering into a stipulation 
 whereby the business of the company is changed and directed 
 into channels and enterprises wholly diverse from those originally 
 contemplated and entered upon, and from which their emoluments 
 had been derived. But the court will not interfere to enjoin the 
 majority of the shareholders from applying surplus funds in the 
 hands of the corporation to an extension of the business within 
 its powers, because a minority dissent from such extension. So, 
 also, the court will not enjoin the minority of the shareholders 
 from extending the business of the corporation to kindred enter- 
 prises, beyond those contemplated in the charter, but sanctioned 
 by express legislative grant, and the vote of a majority of the 
 shareholders." * 
 
 ' Kerngbam v. Williams, L. R. , 6 Eq. 43G ; Colinan v. Eastern, etc. , R. Co., 
 
 228 ; Brice's Ultra Vires, 215 ; Attor- 10 Beav. 1 ; Salomons v. Laing, 12 id. 
 
 ney-General v. Eastlake, 11 Hare, 205; 339 ; Fish v. Chicago, etc., R. Co., 53 
 
 Same V. Norwich, etc., 16 Sim. 225- Barb. 513; Simpson v. Denison, 10 
 
 21 L. J. Ch. 141 ; Zabriskie v. Cleve- Hare, 62 ; Munt v. Shrewsbury, etc., 
 
 laud, etc., R. Co., 23 How. 381 ; Mem- 13 Beav. 1 ; Stevens v. South, etc.R. 
 
 phis V. Dean, 8 Wall. 64 ; Belmont v. Co., id. 49. 
 
 Erie R. Co.. 52 Barb. 637 ; Bliss v. An- ^ Brice's Ultra Vires, 593 ; Hoole v. 
 
 derson, 31 Ala. (N. S.) 613; Kean v. Great W. R. Co., L. R., 3 Ch. 262; 
 
 Johnson, 9 N. J. Eq. 401 ; Black v. Menier v. Hooper's Tel. Works, L. R., 
 
 Delaware, etc., R. Co., 22 id. 130; S. 9 Ch. 350; Bird v. Bird's Patent, etc., 
 
 C, 9 id. 455 ; Zabriskie v. Hackenaack, S. Co., id. 358. See, also, Allen v. 
 
 etc., R. Co., 3 id. 178 , Brice's Ultra Curtis, 26 Conn. 456 ; McAleer v. Mc- 
 
 Vires, 79-83, and notes : Balfour v. Murray, 58 Penn. St. 126. 
 
 Ernest, 5 C. B. (N. S.) 601 ; 28 L. J. C. •» 2 Redf. on Rail., ^ 211, p. 9. See, 
 
 P. 170. also, Kean v. Johnson, 9 N. J. Eq.401 ; 
 
 •2 Mayor, etc., v. Groshon, 30 Md. March v. Eastern R. Co., 40 N. H. 548;
 
 Suits in Equity by and against Corporations, etc. 517 
 
 Sec. 365. Creditor's rights in equity for misappropriation of corporate 
 funds. — It is a familiar principle in ecpiity, to which we iiavc 
 already referred, that the property of a corporation is held in trust 
 
 Pratt V. Pratt, 33 Conn. 446 ; Durfee 
 V. Old Colony & F. «.Co., 5 Allen, 230. 
 
 In Bissell v. Tlie Michigan, etc., R. 
 Co., 23 N. Y. 258, Selden, J., after 
 referring to the two classes of cases 
 of ultra vires, viz. : wliere the act is 
 in excess of the corporate powers, and 
 where it is in excess of the power of 
 the agent, observes as follows : 
 
 " In all the cases belonging to the 
 first class, the object of the action has 
 been to protect the private rights of 
 the shareholders ; upon the ground 
 that the action of the directors sought 
 to be restrained would, if permitted, be 
 a breach of trust. It would no doubt 
 be a bar to any relief upon this 
 ground, if it appeared that the parties 
 seeking such relief had themselves 
 assented to what the directors were 
 about to do. They clearly could not 
 be entitled, for their own sake, to pro- 
 tection against acts which they had 
 themselves authorized. But the courts, 
 in cases of this kind, have uniformly, 
 and no doubt properly, acted upon the 
 presumption that the shareliolders 
 liad not assented to a violation of the 
 charter, aud have interfered, if at all, 
 for the purpose of protecting them 
 from a breach of trust on the part of 
 the directors. 
 
 " Still it has been repeatedly said, 
 even in cases of this class, that there 
 was a question of public policy in- 
 volved, which would be sutRcieut of 
 itself to induce the courts to interfere. 
 The case of Coleman v. The Eastern 
 Counties Railway Company, 10 Beav. 
 1, decided in 1846, was one of this 
 class. It was an equity suit brought 
 by a shareholder in behalf of himself 
 and the other shareholders, against 
 the corporation and its directors, to 
 prevent the latter from entering into a 
 certain agreement with the Harwich 
 Steam Packet Company. The bill 
 prayed for a declaration that it would 
 be a breach of trust on the part of the 
 directors to make the proposed con- 
 tract, and for an injunction. Relief 
 was granted. Lord Langdale, be- 
 fore whom the case was heard, speak- 
 ing of the extensive powers of railway 
 companies, said : ' We are to look upon 
 
 their powers as given to them in con- 
 sideration of a benefit, which, notwith- 
 standing all other sacrifices, is on the 
 whole hoped to be attained by the pub- 
 lic.^ Again he says : ' In the absence 
 of legal decisions, I look upon the ac- 
 quiescence of shareholders, in these 
 circumstances, in these transactions, 
 as affording no ground whatever for 
 the presumption that they may be, in 
 themselves, legal.' Here, then, in one 
 of the earliest cases on the subject, in 
 the English courts, we have the very 
 doctrine for which t contend, distinctly 
 recognized aud asserted, viz., that the 
 object of every grant of corporate 
 powers is to obtain a public benefit ; 
 and that the powers granted are the 
 consideration which the public pays 
 for the benefit received or expected ; 
 aud we also have the inevitable conse- 
 quence stated, that every excess of 
 power by the corporation is illegal al- 
 though acquiesced in by every share- 
 holder. 
 
 " Three vears afterward the case of 
 Cohen v. Wilkinson, 12 Beav. 125 ; 13 
 Jurist, 641, came i)efore the same 
 judge. The complainant was a share- 
 holder in the Direct Portsmouth Rail- 
 way Company, and the object of the 
 suit was to restrain the directors from 
 proceeding to construct a portion only 
 of the road authorized by the charter, 
 without any preparation or intention to 
 construct the whole. The judge said : 
 ' If it were established that the com- 
 panies of this sort had authority, with- 
 out a view to the whole, or for the 
 purpose of performing the whole, to 
 complete such part only as they please, 
 or are able, of that which has been 
 called their contract or bargain tdth 
 the public, I think the consequences 
 would be very dangerous to the public 
 and to the shareholders, and probably 
 productive of very extensive deception 
 and fraud.' In a similar case which 
 arose shortly afterward, viz., Salomons 
 V. Laing, 12 Beav. 33!), Lord Laxg- 
 DALE said : ' Any application of, or 
 dealing with, the capital, or any funds 
 or money of the company, which may 
 come under the control or management 
 of the directors, or governing body of
 
 518 
 
 Pkivatb Corporations. 
 
 for the payment of its debts, and that creditors may pursue it in 
 case of a fraudulent transfer, into the hands of all persons, except 
 those of hona Jide purchasers : that directors have no right to 
 
 the company, in any manner not dis- 
 tinctly authorized by the act of par- 
 liament, is, in my opinion, an illegal 
 application or dealing.' 
 
 " Thus we find Lord Langdale, on 
 three different occasions, asserting, in 
 controversies between the sharehold- 
 ers and the corporation, that all acts 
 and dealings of the officers of such 
 corporation which were unauthorized 
 by their charters, were to be regarded, 
 not simply as breaches of trust, but as 
 illegal and, therefore, void. But Lord 
 Langdai.e is not the only English 
 judge who has held, in cases of this 
 class, that the unauthorized contracts 
 of corporations are illegal and void, as 
 against public policy. In the case of 
 Beman v. Rufford, 6 Eng. liaw & Eq. 
 106, which was an action brought by 
 a shareholder in a railway company, 
 to restrain the directors from carrying 
 into effect a certain agreement made 
 by them. Lord CliANWORTH, vice- 
 chancellor, after stating his reasons 
 for thinking the contract unauthor- 
 ized, said : ' And if that be the correct 
 view of the law, I am clearly of opin- 
 ion, on all the authorities and all 
 principle, that it is the province of this 
 court to prevent such an illegal con- 
 tract from being carried into effect; be- 
 cause, on the principle that has been so 
 often laid down, this court will not tole- 
 rate that parties having the enormous 
 powers which those railway com- 
 panies have obtained, shall lay out 
 one farthing of the funds, out of the 
 way in which it was provided hy the 
 legislature that they should be ap- 
 plied.' 
 
 " Now I understand those who differ 
 with me on this subject to concede the 
 principle of this case ; that is, they 
 admit, that for the directors to enter 
 into a contract which their charter 
 does not authorize would be a viola- 
 tion of their duty to the shareholders, 
 and that the latter may apply to a 
 court of equity and obtain an injunc- 
 tion restraining the directors from car- 
 rying the contract into effect. It 
 would be difficult to deny this. For 
 if we take the same view of the na- 
 ture of a corporation which they lake, 
 and consider the directors merely as 
 
 the agents of the shareholders, and 
 the charter as nothing more than their 
 power of attorney from the corpora- 
 tors, the latter, as the principals, 
 would have a right to repudiate and 
 prevent the execution of a contract, 
 made in their behalf by their agents, 
 without authority ; inasmuch as every 
 person dealing with such agents must, 
 as is well settled, be presumed to know 
 the extent of the powers which the 
 charter confers. 
 
 " The position then occupied by 
 some of my associates is this : They 
 admit that the shareholders in a cor- 
 poration have a right to restrain its 
 directors or managers, as their trus- 
 tees or agents, from entering into any 
 contract not authorized by the charter, 
 or from carrying such contract into 
 effect if made ; and yet they hold that 
 the directors are liable, not in their 
 individual, but their corporate charac- 
 ter, to the party with whom the con- 
 tract is made, for not carrying it into 
 effect. It is difficult to see how these 
 two propositions can stand together. 
 The directors are the mere representa- 
 tives of the corporators. The latter 
 constitute tlie corporation. Hence, by 
 the two propositions just stated, it is 
 maintained that the corporators have 
 a legal right to enjoin their represent- 
 atives against the performance of a 
 contract which they themselves are 
 legally bound to perform ; in other 
 words, they are liable for damages 
 because their representatives have not 
 performed a contract which they had 
 a right to restrain those representa- 
 tives from performing. This can 
 hardly be. It would seem to be a le- 
 gal impossibility. One or the other 
 of these propositions must, I think, be 
 false. Either it must be denied that 
 the shareholders can invoke the aid of 
 a court of equity to prevent the per- 
 formance of a contract entered into by 
 the directors, which the charter does 
 not authorize, — a principle established 
 by numerous authorities, — or it must 
 be admitted that they are not liable 
 for the refusal or neglect of the direct- 
 ors to perform it. It might be otlier- 
 wise if it could be shown either that 
 persons dealing with corporations are
 
 Suits in Equity by and against Corporations, etc. 519 
 
 make any dividend of the profits of a corporation among the 
 stockholders nntil all its debts are paid ; and that in case of such 
 dividends, or a sale of the capital stock and a division of the 
 proceeds among the stockholders, it will not defeat the rights of 
 creditors ; but that they may pursue the proceeds, if necessary 
 to secure their rights, into the hands of such stockholders, and 
 compel them to contribute jyro rata to the payment of the corpo- 
 rate debts out of tlie proceeds so received. In a recent case in- 
 volving this question, Mr. Justice Miller observes: "Equity 
 regards the property of a coi-poration as held in trust for the pay- 
 ment of the debts of the corporation, and recognizes the right of 
 creditors to pursue it into whosesoever possession it may be trans- 
 ferred, unless it has passed into the hands of a hona fide pur- 
 chaser; and the rule is well settled that stockholders are not 
 entitled to any share of the capital stock nor to any dividend of 
 the profits until all the debts of the corporation are paid. Assets 
 derived from the sale of the capital stock of the corporation, or 
 of its property, become, as respects creditors, the substitutes for 
 the things sold, and as such they are subject to the same liabilities 
 and restrictions as the things sold were before the sale, and while 
 they remained in the possession of the corporation. Even the 
 
 uot presumed to know the extent of " I shall cite but one additional case 
 the powers conferred by the charter, belonging to the first of the above 
 or that the corporators can be pre- classes, viz. , Winch v. The Birken- 
 sumed to have authorized the directors head, Lancashire and Cheshire Junc- 
 to transcend those powers. But the tion Railroad Company, 13 Eng. Law 
 contrary is the rule in respect to both. & Eq. 506. That was a suit in equity 
 " It would seem to follow that if we brought by a shareholder to restrain 
 look upon the unauthorized contracts the corporation from entering into an 
 of corporate officers as mere breaches agreement which amounted to a lease 
 of trust, and nothing more, the corpo- of the defendants' road to the Loudon 
 ration is not bound by them. This, and Northwestern Company. The 
 however, is not the ground upon which vice-chancellor, Sir J. Parker, in dis- 
 I have been endeavoring to maintain posing of the case, used the following 
 that corporations are exempt from language : ' It seems to me that it is 
 liability upon their contracts which not a question of simple incapacity on 
 &TQ ultra vires; nor is it the ground the part of the Loudon and North west- 
 upon which such defenses have in gen- ern Railway Company to undertake 
 eral been sustained in suits brought the working of this line, but that it is 
 by third persons against corporations against the policy oi these &cisoi parlia- 
 upon such contracts. I shall, there- ment, and I think, therefore, that the 
 fore, proceed further to show from the agreement for making over this prop- 
 authorities that such contracts are erty to them is an agreement savoring 
 illegal and void for public reasons, of illegalit}/, which any shareholder 
 entirely irrespective of the fact that in the Birkenhead Company has a 
 they constitute breaches of trust right to come to the court to re- 
 to ward the shareholders. strain.'"
 
 620 
 
 Private Corporations. 
 
 sale of the entire capital stock of the company and the division 
 of the proceeds of the sale among the stockholders will not 
 defeat the trust nor impair the remedy of the creditors, if any 
 debts remain unpaid, as the creditors in that event may pursue 
 the consideration of the sale in the hands of the respective stock- 
 holders, and compel each one, to the extent of the fund, to con- 
 tribute ^ro rata toward the payment of debts out of the moneys 
 so received, and in their hands." ^ 
 
 The general doctrine in such cases is, that the property of the 
 corporation is a trust fund : first, for the payment of its debts ; 
 secondly, for division among its shareholders. 
 
 And, "if the capital stock," observes Mr. Story, "should be 
 divided, leaving any debts unpaid, every stockholder receiving his 
 s^iare of the capital stock would, in equity, be held liable jpro rata 
 to contribute to the discharge of such debts out of the fund in his 
 own hands." 
 
 ' Story's Eq. Jur., § 1252. See, also, 
 Vose V. Grant, 15 Mass. 505 ; Wood v. 
 Dummer, 3 Mason, 308 ; Spear v.' 
 Grant, 16 Mass. 9 ; Carson v. African 
 Co., 1 Vt. 121 ; S. C, Skinner, 84. In 
 the case of Spear v. Grant, supra, the 
 defendant was a stockholder in a 
 bank, and withdrew from the bank 
 his stock, when the bank was indebted 
 on bills previously issued, some of 
 which came into the hands of the 
 plaintiff, and the bank failed, and the 
 corporation was dissolved. The action 
 was on the case, and the court held 
 that they were unable to discover any 
 mode by which, at common law, one 
 creditor could compel any stockholder 
 to pay him the amount of his stock, 
 unless there was a fraud on the part 
 of the person sued. But Justice 
 Jackson observed : " In the case of 
 this bank a court of chancery would 
 probably sustain a bill by one or more 
 creditors of the bank in behalf of all 
 who should choose to come in against 
 all the stockholders. In such a case 
 new plaintiffs and new defendants 
 m.ight be added after the commence- 
 ment of the suit, as might be found 
 necessary ; and the rights of all con- 
 cerned, on both sides, might be con- 
 sidered at once . It could then be ascer- 
 tained how much was due in the whole, 
 to all who should choose to adopt this 
 remedy, and what has been received 
 by each stockholder. The latter 
 
 might then be compelled to pay each 
 one his proportion of the whole debt, 
 provided it did not exceed the amount 
 of his dividend ; and the money thus 
 paid might be divided among the 
 plaintiffs in proportion to their re- 
 spective claims. If any of the stock- 
 holders had become insolvent, it 
 would be determined upon the same 
 principles as in a like case in a court 
 of common law, whether loss arising 
 from that circumstance should be 
 borne by the stockholders or creditors, 
 and this point being settled, the court 
 of chancery would proceed to appor- 
 tion the loss accordingly among the 
 respective parties. It might also be 
 ascertained, whether any of the pres- 
 ent holders of the bills had purchased 
 them at a greater discount, and at a 
 later period ; and if this circumstance 
 ought to have any influence in esti 
 mating the amount of the debt, or 
 in distributing the money to be 
 paid by the defendants, that the 
 court would be competent to make 
 the distribution accordingly." See, 
 also, Cooper v. Frederick, 9 Ala. 742 ; 
 Dudlev v. Price, 10 B. Monr. 84 ; Bank, 
 etc., V. Chambers, 8 Sm. & M. 49 ; 
 State V. La Grange R. Co., 4 Humph. 
 488; Banks, etc., v. St. John. 25 Ala. 
 566; Johnson v. State Marine Hosp., 
 2 Cal. 319 ; Scott v. Eagle Fire Co., 
 7 Paige, 198.
 
 Suits in EQurrr by and against Corporations, etc. 521 
 
 Sec. 366. Same continued. — If a stockholder has not fully paid 
 the amount stipulated for the shares he has subscribed for, the 
 Sinn remaining due may be reached by a creditor of the corpora- 
 tion if necessary to secure tlie amount due him from the corpora- 
 tion. All such creditors may, when their interests require it, ask 
 that the fund on which they rely shall really exist in money and 
 not merely on paper, and to be held sacred to the discharge of 
 such corporate liabilities.' 
 
 Sec. 367. Doctrine as to parties plaintiff generally, in equitable pro- 
 ceedings, relating to corporations. — We have sufficiently shown that 
 a stockholder or creditor may, under certain circumstances, main- 
 tain a suit not only for an injnnctiou but for an account ; but such 
 stockholder must, in fact, be one and not simply a person having 
 an inchoate right of membership,^ " And, therefore, a person 
 who has sold his shares, even though he may still remain under 
 disabilities, cannot institute proceedings." ' But it has been held 
 that an equitable owner of shares, or a scrip or policy-holder of an 
 insnrance company, may sue." And it has been claimed that a 
 trustee cannot sue, as "he is not actually concerned in the com- 
 pany." ^ 
 
 Sec. 36S. same continued. — The general doctrine, however, is, 
 that policy-holders cannot interfere with the management of the in- 
 ternal affairs of the insurance company issuing the same, or with 
 the business policy of the company, whether wise or unwise, as to 
 allow such interference would be extremely mischievous; but they 
 could undoubtedly interfere to restrain waste or a breach of trust.* 
 So, a shareholder, although allowed to enjoin the doing of acts en- 
 tirely or materially different from the objects and purposes of the 
 incorporation, and therefore ^clt7'a vires / yet he will not be per- 
 mitted to enjoin the doing of acts to carry out the objects of its crea- 
 tion, although they may be injurious to the party complaining in 
 
 ' Wood V. Pearce, 2 Dis. (O.) 411. ^ Doyle v. Muntz, 5 Hare, 509. 
 
 - Brice's Ultra Vires, 589, and notes. « Aldebert v. Leaf, 12 W. R. 462 ; 
 
 ^ Id. : Doyle v. Muntz, 5 Hare, 509 ; 2 N. R. 455 ; In re State Fire Ins. 
 
 Scaith V. Chad wick, 14 Jur. 300. Co., id. 565; 34 L. J. Ch. 436 ; 1 
 
 ■* Great W. R. Co. v. Rushout, 5 H. & M. 457; 1 DeG., J. & S. 634; 
 
 DeG. & Sm. 290 ; Baeehaw v. Eastern In re International L. & A. Soc, L. 
 
 U. R. Co., 7 Hare, 114 ; 2 McN. & G. R., 5 Ch. 424. 
 389. 
 
 66
 
 522 Private Corporations. 
 
 another capacity than that of stockholder, and although the public 
 generally may be injuriously affected thereby.^ 
 
 Where there are several owners of bonds secured by a con- 
 veyance by mortgage or trust deed to trustees, the question 
 whether the bondholder may maintain an action in his own 
 name has been the subject of judicial controversy and investiga- 
 tion. The general rule deducible from the authorities is, that 
 such individual stockholders cannot, independently of the trustees, 
 maintain the action, unless in case such trustee refuses to bring 
 suit after a request from such bondholder who is entitled to such 
 remedy ; or in case of fraud or violation of duty, or conduct, on 
 the part of such trustees, prejudicial or inimical to the rights of 
 the cestui que trust^^ 
 
 Sec. 369. Same continued. — On this Subject of parties it has been 
 appropriately observed : " Where there has been a waste or mis- 
 application of the corporate funds by the officers or agents of the 
 company, a suit in equity may be brought by and in the name of 
 the corporation, to compel them to account for such waste or mis- 
 application, the directors being regarded as trustees of the stock- 
 holders, and subject to the obligations and disabilities incidental 
 to that relation. But as a court of equity never permits a wrong 
 to go unredressed merely for the sake of form, if it appears that 
 the directors of a corporation refuse, in such case, to prosecute, by 
 collusion with those who had made themselves answerable by 
 their negligence or fraud, or if the corporation is still under the 
 control of those who must be the defendants in the suit, the stock- 
 holders, who are the real parties in interest, will be permitted to 
 
 'Baltimore, etc., v. Wheeling, 13 " The appointment of new trustees 
 
 Gratt. 40. See, also. High on Inj., is an ordinary remedy, enforced by 
 
 § 774. courts of equity in all cases where 
 
 2 Coal Co. V. Blatchford, 11 Wall, there is a failure of suitable trustees 
 
 172 ; Galveston v. Cowdrey, id. 459 ; to perform the trust, either from ac- 
 
 Knapp V. Railroad Co., 20 id. 117 ; cideut or from the refusal of the old 
 
 Alexander v. Central R. R. Co. (U. S. trustees to act, or from their original 
 
 C. C. Iowa) 1 Cent. L. J. 545; Van Doren or supervenient incapacity to act, or 
 
 V. Robinson, 16 N. J. Eq. 256 ; Wil- from any other cause." Story's Eq. 
 
 liamson v. N. J., etc., R. Co., 10 id. 1 ; Jur., § 1287. See, also, Ellison v. El- 
 
 Coe v. Columbus, etc., R. Co., 10 Ohio lison, 6 Ves. 663 ; 2 Fonbl. Eq., B. 2, 
 
 St. 410 ; Western R. Co. v. Nolan, 48 ch. 7, § 1, and note ; Lake v. De Lam. 
 
 N. Y. 518 ; Sturges v. Knapp, 31 Vt. 1 ; bert, 4'id. 592 ; 2 Madd. Ch. Pr. 133 ; 
 
 Shaw v. Norfolk Countv R. Co., 5 Millard v. Eyre, 2 Ves. 94 ; Buchanan 
 
 Gratt. 162 ; Ashton v. Atlantic Bank, v. Hamilton, 5 id. 722 ; Hibbard v. 
 
 3 Allen, 217. Lambe, Amb. 309.
 
 Suits in Equity by and against Cokpoeations, etc. 523 
 
 file a bill in their own names, making tlie corporation a party de- 
 fendant. And if the stockliolders are so numerous as to render 
 it impossible or very inconvenient to bring them all before the 
 court, a party may file a bill in behalf of themselves and all others 
 standing in the same situation." ' 
 
 The general doctrine in equity is that where the parties hav- 
 ing common interests are very numerous, and it is impractical^le 
 to bring all of them before the court, one or more may maintain 
 a suit. " The like doctrine," observes Mr. Story, " has been ap- 
 plied to a case where a bill was brought by some shareholders iii 
 a joint-stock company (the stock of which was divided into six 
 thousand shares), on behalf of all the shareholders, to compel the 
 directors of the company to refund moneys improperly withdrawn 
 by them from the stock of the company, and applied to their own 
 use. Upon the objection being taken to the want of proper par- 
 ties, the coui't overruled it, upon the ground that justice would, 
 be unattainable if all the shareholders were requii'ed to be made 
 parties to the suit ; and that a separate bill by each shareholder, 
 to recover his portion of the money, would produce enormous in- 
 convenience and multiplied litigation, and that the shareholders 
 had one common right and one common interest to be subserved 
 by the suit." ' 
 
 Sec. 370. Where an iiyunction will be granted. — An injunction 
 will always be granted, as we have seen, at the instance of a 
 stockholder or creditor where the corporation or its directors at- 
 tempt acts ultra vires^ as where it proposes to exceed the legiti- 
 mate scope of its authority, or in going beyond any power con- 
 ferred upon it." So, corporations may be restrained from any 
 use of their powers which must result in the injury of individu- 
 als, especially where the authority claimed by the corporation is 
 doubtful, and where the authority if exercised must place others 
 
 ' Ang. & Am. on Corp., § 312. See, Congreve, 4 Russ. 562 ; Crease v. Bab- 
 
 also, Robinson v. Smith, 3 Paige, 233 ; cock, 10 Mete. 532. 
 
 Baj-less v. Orne, 1 Freem. (Mass.) Ch. As to when the corporation is a nec- 
 
 173; Hodges V. New Eng. Screw Co., 1 essary party, Lyman v. Bonney, 101 
 
 R. I. 312; Hersev v. Veazie, 24 Me. Mass. 562. 
 
 12 ; Neall v. Hill,"l6 Cal. 145 ; Cumber- ^ Lane v. Scliomp, 20 N. J. Eq. 82 ; 
 
 land Coal k. Sherman, 30 Barb. Union Pacific R. R. Co. v. Lincoln 
 
 553 ; Butts v. Wood, 31 id. 181 ; 37 N. County, 3 Dill. (U. S. C. C.) 300. 
 
 y. 317. K'olman v. Eastern, etc., R. Co., 10 
 
 2 Story's Eq. PI., § 109 ; Hicljens v. Beav. 1 ; Salomons v. Laing. 12 id. 339.
 
 524 Pbivate Corpokations. 
 
 in great peril. ^ And even when a remedy at law may exist for 
 the fraudulent mismanagement of the business on the part of the 
 directors, or a majority of them, this may not always constitute a 
 bar to a claim for an injunction.* And where, by the fraudulent 
 or improper conduct of stockholders or directors, certain shares 
 have been transferred to them for the purpose of enabling them- 
 selves to retain office, an injunction will be granted to prevent 
 them from voting on such stock. "* So, a contemplated diversion 
 of the corporate funds to other purposes than those provided for 
 or contemplated by the constating instruments, or for which the 
 corporation was organized,* or attempts to misapply the funds to 
 carry out any radical change of the purposes of the organization, 
 will entitle a stockholder or creditor to an injunction to prevent 
 it.* So, an injunction will be issued to restrain an unjust or 
 unlawful election, or the casting of improper votes at such 
 election, or indeed from the gross abuse of any of its powers, 
 when the acts will result in such mischief as the stockholders or 
 parties seeking relief ought not to be subjected to.* 
 
 And this exercise of the equitable jurisdiction of the courts has 
 been disgracefully prostituted in some cases to the enjoining by 
 one court of the exercise of this power by another court of co- 
 ordinate jurisdiction.'' 
 
 Sec. 371. Where an injunction will not be granted. — It has been 
 held that an injunction should not be granted to restrain the 
 directors of a foreign corporation from the payment of a dividend 
 at the suit of one to whom the corporation is not indebted, and 
 where the only ground for the injunction is that the directors 
 have committed a mistake in making the dividend, as in such a 
 case the remedy should be in the state of its creation.* 
 
 1 Mayor, etc., v. Qroslion, 30 Md. ^ minois, etc., v. Cook, 29 111, 237. 
 
 436. ^ Laue v. Scliamp, ante ; Watson v. 
 
 ' Sears V. Hotclikiss, 25Conn. 171. Harlem Navigation Co., 52 How. Pr. 
 
 3 Hilles V. Parrish, 13 N. J. Eq. 380. 348 ; Matthews v. Trustees, 7 Phila. 
 
 And the bill is not demurrable, if 270. 
 the party to whom a fraudulent sale ■" See article entitled " The Erie Bail- 
 is to be made is not a party. Abbot v. road Row," 3 Am. L. Rev. 41 (October, 
 American, etc., 4 Blatchf. 489. See, 1868); ante, § 245, and authorities 
 also, 4 Nev. 138. cited. 
 
 ■» Kean v. Johnson, 9 N. J. Eq. 401 ; ^Howell v. Chicago, etc., R. Co., 51 
 
 Smith V. Bangs, 15 111. 399 ; Sears v. Barb. 378. 
 Hotchkiss, 25 Conn. 171.
 
 SriTS IN Equity by and against Cokporations, etc. 525 
 
 And where some of the stock issued by the directors is legal, 
 and some not, they can only be restrained from using the proceeds 
 of such of the stock as is illegally issued. "^ Nor will equity relieve 
 by injunction where the appropriate remedy is by action in the 
 nature of quo loarranto^^ nor where the ground of relief is for 
 fraud in the election of officers/ nor where the object of the suit 
 is the appointment of a receiver for the management of the affairs 
 of the corporation, will the directors or other officers be enjoined 
 from acting in their official capacity where this is not necessary 
 to accomplish the purposes of the suit/ nor where it appears that 
 the proceedings of a stockholder are not for the protection of his 
 own interests but to aid others/ nor to restrain a stockholder from 
 voting upon an alleged excess of stock in his possession, where no 
 steps have been taken by the company to cancel the excess," nor 
 where a shareholder who claims to be defrauded by the issue of 
 stock seeks to restrain the corporation from disposing of its prop- 
 erty leaving insiifiicient to indemnify him for his loss, as he stands 
 in no better position than a general creditor.'' 
 
 A party may also waive his rights to an injunction and be 
 estopped from such proceedings by his conduct. " Thus, where 
 a depositor in a savings bank has consented that his deposit may 
 be converted into stock, as a security for the debts of the corpo- 
 ration, and his conduct has been such as to amount to a voluntary 
 dedication of his stock for the purpose of securing the debts, he 
 is regarded as estopped from claiming relief in equity, and an 
 injunction will be refused." * Nor will a corporation be enjoined 
 from acting in its corporate capacity for the purpose of securing 
 legislative authority to change its objects and powers.* But an 
 injunction may be properly allowed in such a case where there is 
 an attempted use of corporate funds for defraying the expense of 
 
 1 Fisk V. Chicago, etc., 58 Barb. 513. ^ Keid v. Jones, 6 Wis. 680 ; High on 
 See. also, O'Brien v. Same, id. 568; Inj.,g779. 
 
 Blatchford v. Ross, 54 id. 42. '' Whelpley v. Erie R. Co., 6 Blatchf. 
 
 2 Hartt V. Harvey, 32 Barb. 55 ; Mick - 271 . 
 
 les V. Rochester, etc, R. Co., 11 Paige, ^Maryland, etc., v. Schroeder, 8 G. & 
 lis. J. 93. See, also, Gravestine's Appeal, 
 
 3 Id. 49 Penn. St. 310. 
 
 ^ Stevens v. Davison, 18 Gratt. 819. » Ware v. Grand, etc., R. Co., 2 R. & 
 5 Sparhawk v. Union, etc., R. Co., M. 470; Stevens v. South, etc., R. Co., 
 54 Penn. St. 401. 13 Beav. 49.
 
 526 Private Corporations. 
 
 procuring an extension of corporate powers beyond the legitimate 
 objects for which tlie corporation was instituted/ 
 
 Sec. 372. Specific performance — right of waj'. — A corporation 
 may be compelled by a court of equity to specifically perform a 
 contract entered into by it, in all instances where ecpiity and good 
 conscience require that it should specifically perform it/ in the 
 same manner and to the same extent that performance may be 
 decreed against an individual." Where a party agreed under 
 seal to permit a railroad corporation to construct a road over 
 his land, and to convey a right of way therefor for a cer- 
 tain sum, after the railroad should be definitely located, with a 
 condition in the deed of conveyance, that the deed should be void 
 when the road should be discontinued, it was held, that specific 
 performance of such an agreement should be decreed after the 
 road was constructed over it, although the corporation did not 
 expressly bind itself to take or pay for the land. And it was also 
 held in such a case, that, where the corporation located the road 
 over the land and continued to use the same, and was in actual 
 possession of it for more than three years, a bill filed by it for a 
 specific performance of the agreement would not be dismissed on 
 the ground of unreasonable delay in filing it.* But the same rules 
 ])revail as to the specific enforcement of contracts against corjjora- 
 tions as against individuals, and being a matter resting in the 
 sound discretion of the court/ it will not exercise this jurisdiction, 
 
 ' Munt V. Shrewsbury, etc., R. Co., Loveless, 21 Ala. 371 ; Hudson v. Lay- 
 
 13 Beav. 1 ; Stevens v. South., etc., R. ton, 5 Harr. 74 ; Auter v. Miller, 18 
 
 Co., id. 49 ; High on Inj., § 772. See, Iowa, 405 ; Waters v. Howard, 8 Gill 
 
 also. Ward v. Society, etc., 1 Coll. 370. (Md.), 262 ; Smoot v. Rea, 19 Md. 398; 
 
 ^ Inge V. Birmingiiam, etc., itailway Hester v. Hooker, 15 Miss. 768 ; Tobey 
 
 Co., 23 Eng. L. & Eq. 601; Marshall v. County of Bristol, 3 Story, 800; 
 
 V. Queenborough, 1 Sim. & S. 520. Pickering'v. Pickering, 38 N. H. 400 ; 
 
 3 Kay V. Johnson, 2 H. & M. 118. Young v. Daniels, 2 Iowa, 126; Rudolph 
 
 ''Western Railway v. Babcock, 6 v. Covell, 5 id. 126; Humbard v. 
 
 Mete. (Mass ) 346. Humbard, 3 Head, 100. It is not, how- 
 
 * Roundtree v. McLain, 1 Hempst. ever, dependent upon the arbitrary 
 
 245; Lloyd V. Wheatley, 2 Jones' Eq. pleasure of the court, but regulated 
 
 267; Duvall v. Myers, 2 Md. Ch. 401 ; by rules and principles. Rogers v. 
 
 Wads worth v. Manning, 4 Md. 59; Saunders, 16 Me. 92 ; Griffith v. F'reder- 
 
 Clarke v. Rochester, etc., R. R. Co., ick County Bank, 6 Gill & J. 424; 
 
 18 Barb. 350. The enforcement of the Pigg v. Corder, 12 Leigh, 69 ; Meeker 
 
 specific execution of a contract in a v. Meeker, 16 Conn. 403; Seymour v. 
 
 court of equity is not a matter of right, Delancey, 3 Cow. 445 ; 6 Johns. Ch. 
 
 but a matter of sound, reasonable dis- (N. Y.) 222 ; King v. Morford, 1 N. 
 
 cretion in the court . Blackwilder v. J. Eq.274; Anthony v. Leftwick, 3
 
 Suits in Equity by and against Coepokations, etc. 527 
 
 when adequate redress can be had at law," nor particularly in 
 the case of corporations where it is grossly improvident,' or in ex- 
 cess of the powers of the agent's or officer's j)ower3 to make. In 
 England it has been held that a contract to build a railroad is not 
 one of which equity will compel a specific performance.^ 
 
 Rand. 238 ; Prater v. Miller, 3 Ilawka, 
 629; Turner v. Clav, 3 Bibb, 52; 
 Frisby v. Ballance, 5 111. 287 ; Broad- 
 well V. Broadwell, G id. 599 ; McMur- 
 trie V. Bennett, Harr. 134 ; Dougherty 
 V. Hampston, 2 Blackf. 273 ; St. Jolin 
 V. Benedict, 6 Johns. Ch. Ill; Mc- 
 Whorterv. McMahan, 1 Clark (N. Y.), 
 400 ; Henderson v. Hays, 2 Watts, 
 148 ; Perkins v. White, 3 Ear. & M. 
 324; Leigh v. Crump, 1 Ired. Eq. 299; 
 Gould V. Womack, 2 Ala. 83 ; Pulliam 
 V. Owen, 25 id. 493 ; Ash v. Daggy, 6 
 Ind. 259; Howard v. Moore, 4 Sneed, 
 317. A bill in equity, for the specific 
 performance of a contract, is an appli- 
 cation to the sound discretion of the 
 court, which withholds or grants re- 
 lief, according to the circumstances of 
 each particular case ; and in the exer- 
 cise of its extraordinary jurisdiction in 
 such cases, the court, though not ex- 
 empt from the general rules and prin- 
 
 ciples of equity, acts with more free- 
 dom than when exercising its ordinary 
 powers. The plaintiff who seeks the 
 enforcement must make out a stronger 
 case than he who resists the decree. 
 Tyson v. Watts, 1 Md. Ch. 13. Where, 
 on a bill by a vendor, it appeared that 
 by the contract the vendee had the 
 right to relieve himself from the pur- 
 chase by paying a stipulated sum, 
 held, that the right to come into equity 
 for specific performance being clear, 
 the court, in refusing that decree, 
 might, under the rule that if jurisdic- 
 tion in equity once attaches, the court 
 may go on to do complete justice, de- 
 cree the payment by the vendee of the 
 stipulated sum to the vendor, although 
 the vendor might have recovered the 
 same at law. Cathcart v. Robinson, 
 5 Pet. 363 ; Stevenson v. Buxton, 4 
 Abb. Pr. 414. 
 
 ' Wadsworth v. Manning, ante. 
 
 ' Shrewsbury, etc., R. R. Co. v. 
 London, etc., Railway Co., 6 H. L. 
 Cas. 113. 
 
 ^ Heathcote v. North Staffordshire, 
 etc., Railway Co., 6 Eng. Rv. Cas. 
 658; 20 L. J. Ch. 82.
 
 528 Private Cokporations. 
 
 CHAPTER XV. 
 
 EXECUTION AND THE APPOINTMENT OP RECEIVERS. 
 
 Sec. 373. The common-law doctrine in reference to execution. 
 
 Sec. 374. Where the same doctrine provides for a sale on execution. 
 
 Sec. 375. Doctrine as to the subjection of stocks to execution. 
 
 Sec. 376. Statutes generally provide for the garnishment of stockholdera. 
 
 Sec. 377. Appointment of receivers. 
 
 Sec. 378. Judgment creditor's right to a receiver. 
 
 Sec. 379. Same continued. 
 
 Sec 380. Same continued. 
 
 Sec. 381, Functions, rights and duties of a receiver of a corporation. 
 
 Skc. 373. The common-law doctrine in reference to execution An 
 
 execution is said to be the end and fruit of the law ; exeoutio est 
 finis et fructiis legis. It makes the Judgment effective, and 
 usually all property and pecuniary interests of the defendant, not 
 exempt from execution, is subject to satisfaction of the judgment. 
 But, in reference to corporations, there is, at common law and in 
 the absence of any special statutory provisions on the subject, a 
 further exception, viz.: that the franchises of a corporation as 
 well as the means necessary to the existence and execution of the 
 corporate powers, and to carry out the purposes for which it was 
 instituted, are not the subject of levy and sale on execution.^ 
 Mr. Herman observes : " Corporations are not formed or created 
 by an execution sale, and until the proper and necessary steps are 
 taken by the state to forfeit its charter and terminate its existence 
 it still possesses the power granted it ; the lands, easements or 
 works appurtenant or essential to the practical use and occupation 
 of the franchise cannot be sold separate from the franchise, so as 
 to impair its value or impede its use." ^ 
 
 Keither are the tolls or products of the franchise subject to such 
 
 1 Hatcher v. T. W. & W. R. Co., 63 man v. Railroad Co., 65 Penn. St. 278 ; 
 
 111. 477 ; Bruffett v. G. W. R. Co., 35 Western Railroad Co. v. Johnston. 59 
 
 id. 353; Stewart v. Jones, 40 Mo. 140; id. 295 ; Canal Co. v. Bonham, 9 W. & 
 
 Thomas v. Armstrong, 6 Cal. 280 ; S. 27 ; Gue v. Canal Co., 24 How. 263. 
 
 Munroe v. Thomas, 5 id. 470 ; Wood '^ Herman on Executions, 551 ; Amant 
 
 v. Turnpike Co., 24 id. 474 ; James v. v. Turnpike Co., 13 S. &R. 210 ; Canal 
 
 Plank R. Co.. 8 Mich. 91 ; Coe v. Rail- Co. v. Bonham, 9 W. & S. 37 ; Coe v. 
 
 road Co., 10 Ohio St. 372 ; Seymour v. Railroad Co., 10 Ohio St. 372 ; Atkinson 
 
 Turnpike Co., 10 Ohio, 476 ; Atkinson v. Railroad Co., 15 id. 31; Common- 
 
 T. Railroad Co., 15 Ohio St. 21 ; Young- wealth v. Company, 5 Cush. 509; Young.
 
 Execution and the Appointment of Reoeivers. 529 
 
 levy and sale, so as to prevent the company from demanding and 
 receiving the same, or so as to divest it of its right of ownership 
 and possession.' 
 
 man V. Railroad Co.. 65 Penn. St. 278; 
 Plymouth R.Co.v. Colwell,39 id. 337. 
 Where a corporation, like a bridge 
 or turnpike company, has no tangible 
 property that can be subject to execu- 
 tion, and it has nothing but a mere 
 franchise or easement from which its 
 incoi»e and revenue are derived, there 
 is nothing that can be levied on or 
 taken by the otBcer in satiwfaction of 
 the writ ; in such cases, where no levy 
 can be made, the equitable powers of 
 the courts in those states where they 
 have abolished the distinctions be- 
 tween law and equity, and in others, 
 where the distinctions still prevail, a 
 court of equity will grant relief to the 
 creditor in the appointment of a re- 
 ceiver, to take possession, charge and 
 control of the franchises and revenues, 
 who as the officer of the court accounts 
 to it, and under its direction satisfies 
 the claim or judgment of the creditor. 
 Herm. on Execu., §361. See, also, 
 Covington, etc., R. Co. v. Shepherd, 21 
 How. 112 ; Macon, etc., R. Co. v. Par- 
 ker, 9 Qa. 393. In the case of Gue v. 
 Canal Co., supra, the United States 
 marshal for the district of Maryland 
 seized and advertised for sale, under 
 an execution, a house and lot, sundry 
 canal locks, a wharf, and sundry lots, 
 which belonged to the defendant. An 
 injunction was obtained against the 
 sale, which was made perpetual ; and 
 on appeal from the United States 
 circuit court for Maryland, was in the 
 supreme court of the United States 
 made perpetual. The court observes: 
 " Now it is very clear that the franchise 
 or right to take toll on boats going 
 through the canal would not pass to 
 the purchaser under this execution. 
 The franchise, being an incorporeal 
 hereditament, cannot, upon the settled 
 principles of the common law, be 
 seized under & fieri facias. If it can 
 be done in any of the states it must be 
 done under a statutory provision of 
 the state of Maryland, changing the 
 common-law rule in this respect. 
 
 " Indeed, the marshal's return and 
 the agreement of the parties show it 
 was not seized, and connequently, if 
 the sale had taken place, the result 
 would have been to destroy utterly the 
 value of the property owned by the 
 company, while the creditor himself 
 would, most probably, realize scarcely 
 any thing from the useless canal locks 
 and lots adjoining them. The record 
 and proceedings before us show that 
 there were other creditors of the cor- 
 poration to a large amount, some of 
 whom loaned money to carry on the 
 enterprise. And it would be against 
 principles of equity to allow a single 
 creditor to destroy a fund, to which 
 other creditors had a right to look for 
 payment, and equally against the 
 principles of equity to allow a single 
 creditor to destroy a fund to which 
 other creditors had a right to look for 
 payment, and equally against the 
 principles of equity to permit him to 
 destroy the value of the property of 
 the stockholders by dissevering from 
 the franchise property which was 
 essential to its useful existence. In 
 this view of the subject the court do 
 not deem it proper to express any 
 opinion as to the right of this creditor 
 in some other form of judicial proceed- 
 ing to compel a sale of the whole 
 property of the corporation, including 
 the franchise, for the payment of his 
 debt." So it has been held that neither 
 the turn-tables nor the freight cars 
 found on the road can be levied upon 
 and sold on execution against a rail- 
 road company, as they are part of the 
 realty, and cannot be severed and sold. 
 Titus V. Mabee, 25 111. 257 ; Seymour 
 V. Milford, etc, T. Co., 10 Ohio, 476 ; 
 Hunt V. Bullock, 23 111. 320 ; Palmer 
 V. Forbes, id. 302 ; Western Pa. R. Co. 
 V. Johnston, 59 Penn. St. 290 ; Leedora 
 V. Plymouth, etc., R. Co., 5 W. & S. 
 265 ; Susquehanna Canal Co. v. Bon- 
 ham, 9 id. 27 ; Wood v. Turnpike Co., 
 24 Cal. 478. 
 
 ' Rorer on Jud. Sales, § 1069. See, v. Colwell, supra; Youngman v. 
 also, Herm. on Executions, § 361 ; Gue Alexandria R. Co., 65 Penn. St. 278. 
 V. Canal Co., supra ; Plymouth R. Co. 
 
 67
 
 530 Pkivate Corporations. 
 
 But it is also held that tlio wood and iron of a railroad com- 
 pany may be taken on execution and sold, although such personal 
 property may be necessary to enable the corporation to carry out 
 the purposes of its creation, and without which it may be unable 
 so to do.^ And in New Hampsliire the locomotive engines, pas- 
 senger cars and freight cars of a railroad corporation are liable to 
 attachment or execution when not in actual use."'' The general 
 doctrine is, that the property of a corporation, real and personal, 
 may be taken on execution and sold, the same as in case of indi- 
 vidual defendants, and that the tangible property and estate is no 
 more exempt from execution than that of an individual.^ 
 
 Much controversy has existed in reference to the character of 
 rolling stock, and its liability to execution, depending upon the 
 question whether it belongs to the real estate, and is, therefore, 
 subject to mortgage and other lien on its real estate, or whether 
 it is personal property, and, therefore, not covered by such liens. 
 The courts seem to be divided on this question. But, from the 
 preponderance of authority, for most purposes, it is considered as 
 personal property, and that as such, and as against liens upon the 
 right of way, and other real estate of the corporation, it is subject 
 to execution, and may be taken and sold in the same way that 
 other personal property may be sold on execution.* 
 
 ' Herm. on Esecu., § 361. See, also, Barb. 591 ; Beardsley v. Ontario Bank, 
 
 State V. Rives, 15 Ired. 297; James id. 619; Hoyle v. Plattsburgh, etc., R. 
 
 V. Railroad Co., 6 Wall. 750. Co , 54 N. Y. 314 ; Herm. on Execu. 
 
 '•^ Boston, etc., R. Co. v. Gilmore, 37 5G1. See, also, 6 Am. Law Reg. 502; 1 
 
 N. H. 410 ; Rorer on Jud. Sales, 346. Dis. (0.) 552. The character of rolling 
 
 It8 property, real and personal, may stock as real or personal property, as 
 
 be sold as in case of individuals, well as its liability to execution, is' 
 
 Herm. on Execu 550. sometimes fixed by statute. Thus, in 
 
 ^ See Herm. on Execu., § 360 ; State Wisconsin it is provided by statute 
 
 of Maryland v. Bank of Md., 6 G. & that all rolling stock of any railroad 
 
 J. 219; Slee v. Bloom, 5 Johns. Ch. company, used and employed in con- 
 
 366; S. C, 19 Johns. 456; Pierce v. nection with its railroad, shall be a 
 
 Partridge, 3 Mete. 44; Perry v. Adams, fixture. Taylor's Stat., p. 1048, ^ 53. 
 
 id. 51; Reg. v. Queen, etc., Co., 1 A. See construction of this statute, Chi- 
 
 & E. (N. S.) 288 ; State v. Rives, 5 cago & N. W. R. Co. v. Borough of 
 
 Ired. 297. See, also, Regina v.Victoria, Fort Edward, 21 Wis. 44. It is also 
 
 etc., Co., 1 Q. B. 289; Boyd v. Chesa- provided by the constitution of Illi- 
 
 peake, 17 Md. 195. nois as follows : " The rolling stock 
 
 ^ Coe V. Railroad Co., 10 Ohio St. and all other valuable property be- 
 
 372; B. C. & M. R. Co. v. Gilmore, 37 longing to any railroad company or 
 
 N. H. 410 ; Randall v. El well, 52 N. Y. corporation in this state shall be con- 
 
 522 ; Hill v. La Crosse, 11 Wis. 214 ; sidered personal property, and shall 
 
 Pierce v. Emery, 32 N. H. 484 ; Min- be liable to execution and sale in the 
 
 nesota v. St. P. R. Co., 2 Wall. 609 ; same manner as the personal property 
 
 Stevens V. Buffalo, etc., R. Co., 31 of individuals, and the general assem-
 
 Execution and the Appointment of Receiveks. 531 
 
 Sec. 373. Where the statute provides for sale on execution We 
 
 have noticed that statutes sometimes provide for the sale of the 
 corporate franchise on execntion. In snch cases the statute must 
 be strictly followed; and no title will pass by the sale unless made 
 in such a manner as the statute prescribes.^ On the sale of shares 
 or of the franchise, under the provisions of a statute a distinction 
 is made between it and an ordinary sale of personal property. 
 In the former case there can be no tangible possession taken by 
 the office]" or delivered to the purchaser, as in the case of the lat- 
 ter, where it is held that the actual delivery of the property sold 
 gives the purchaser the title, although it may be irregularly con- 
 ducted by the officer, whereas in the other case, there being no 
 tangible property, the validity of the transfer must rest upon a 
 substantial compliance with the provisions of the statute.^ Thus, 
 if the officer has failed to give the notice retj[uired by the statute, 
 this will render the sale void.^ And where the statute gave 
 authority to sell the franchises of a plankroad on execution, it 
 was held that a sale could only be made in the manner ])ointed 
 out by statute ; and that an illegal sale under such circumstances 
 will not be rendered valid by the acquiescence of the stockholders 
 in the purchaser's possession, the payment of tolls to him, or by 
 the expenditure of money by him to repair the road, with the 
 knowledge of the stockholders.* 
 
 Sec. 374. Doctrine as to the subjection of stock to execution. — It 
 seems to be a common-law docrine that the stocks or shares held 
 
 bly shall pass no law exempting any a preponderance of authority as well 
 
 such property from execution and as the soundest reason, based upon 
 
 sale." Const. 111., art. xi, § 10, which the circumstanees under which, in the 
 
 took effect August 8, 1870. progress of railroad enterprise, we 
 
 Rolling stock of a railroad is, in find such stock used, personal prop- 
 
 the absence of statutory provisions, erty. See post, % iQI ■ Hoyle v. Platts- 
 
 and circumstances showing a purpose burgh, etc., R. Co., 54 N. Y. 314. 
 to treat it otherwise; and according to 
 
 'James v. Plankroad Co., 8 Mich. The return of the officer should 
 
 91 ; Gue v. Canal Co., 24 How. (U. S.) show a compliance with the require- 
 
 2o7; Stamford Bank v. Ferris, 17 Conn, ments of the statute. Davis v. May- 
 
 259. nard, 9 Mass. 242; Hammatt v.Wymau, 
 
 "Titcomb v. Union Ins. Co., 8 Mass. id. 138. See, also. State Bank v.Tutt, 
 
 326; Howe v. Starkweather, 17 id. 44 Mo. 367. 
 
 240; Taylor v Jenkins, 6 Jones' L. •* James v. Pontiac P. R. Co., 8 Mich. 
 
 316. . 91. See, also, Oakland R. Co. v. Kee- 
 
 ^ Howe V. Starkweather, 17 Ma.ss. nan, 56 Penn. St. 198. 
 240. See, also, Titcomb v. Union Ins. 
 Co., 8 id. 326.
 
 632 
 
 Private Corporations. 
 
 by a party in an incorporated company is a mere personal inter- 
 est ; that the certificates thereof are a mere evidence of owner- 
 ship, and have no vahie in themselves ; ^ and that such shares and 
 interests are not liable to levy and sale on execution, unless pro- 
 vision therefor is made by statute.^ " Where property is of so 
 intangible a nature," observes Mr. Brice, " that there can be no 
 change of possession, as shares in a corporation, and it cannot be 
 known whether they are attached or not, the sale of them on 
 execution is a mode of transfer not authorized at common law." ' 
 
 Sec. 375. statutes generally provide for garnishment of the interests 
 of stockholders. — The shares held by debtors not being liable to 
 levy and sale on execution at common law, it has in many, if not 
 most, of the states been provided by statute that the interest thus 
 owned may be attached by garnishment- of the corporation." But 
 in such cases the attachment is subject to any lien which the cor- 
 poration may have, by virtue of the by-laws or constating instru- 
 
 ' Redf. on Rail. 38 ; Gilpin v. How- 
 ell, 5 Penn. St. 57; Tippets V. Wal- 
 ker, 4 Mass. 595 ; Johns v. Johns, 1 
 Ohio St. 350 ; Arnold v. Ruggles, 1 
 R I. 1(55 ; Howe v. Starkweather, 17 
 
 2 See Uiie v. Canal Co., 24 How. (U. 
 S.) 257 ; Ross v. Rosa, 25 Ga. 297 ; Coe 
 V. Columbus, etc., R. Co., 10 Ohio St. 
 372 ; Western Pa. R. Co. v. Johnson, 
 59 Penn. St. 290 ; Stewart v. Jones, 40 
 Mo. 140: Denny V. Hamilton, 16 Mass. 
 402 ; Denton v. Livingston, 9 Johns. 
 96; Williamson v. Smoot, 7 Mart. 
 (La.) 31 ; 2 Kent's Com. 285 ; Long on 
 Sales, 2 ; New York v. Schuyler, 38 
 Barb. 534 ; S. C, 34 N. Y. 30; Ander- 
 son V. Nicliolas, 28 id. 600 ; Bank v. 
 Lainer, 11 Wall. 369. 
 
 ^ Green's Brice' s Ultra Vires, 562. 
 
 •* It is provided by the statute of 
 Massachusetts, that any share of a 
 stockholder, in any joint-stock com- 
 pany that is or may be incorporated, 
 may be attached by leaving an attest- 
 ed copy of the writ (without the decla- 
 ration), and of the return of the attach- 
 ment, with the clerk, treasurer or 
 cashier of the company, if there be 
 any such officer, otherwise, with any 
 officer or person who has at the time 
 the custody of the books and papers 
 
 of the corporation ; that any share of 
 interest so attached shall be held as 
 security to satisfy the final judgment 
 in the suit in like manner as any other 
 personal estate is held. Rev. Stat. 
 Mass., chap. 90, § 36. 
 
 In Iowa, it is provided by statute as 
 follows : 
 
 " Stock or interest owned by the de- 
 fendant in any company, and also 
 debts due him, or property of his held 
 by third persons, may be attached, and 
 the mode of attachment must be as 
 follows : 
 
 "1. By giving the defendant in the 
 action, if found within the county, and 
 also the person occupying or in posses- 
 sion of the property, if it be in the 
 hands of a third person, notice of the 
 attachment. 
 
 "2. If the property is capable of 
 manual delivery, the sheriff must take 
 it into his custody if it can be found. 
 
 " 3. Stock in a company is attached 
 by notifying the president or other 
 head of the company, or the secretary, 
 cashier, or other managing agent 
 thereof, of the fact that the stock has 
 been so attached." Iowa Code (1873), 
 § 2967. See, also, the same provisions 
 relating to stock interests apply to 
 executions. Id., § 3050.
 
 Execution and the Appointment of Receivers, 533 
 
 ments.^ It is evident that where there is a provision in the con- 
 stating instruments, that all debts due to the corpoi'ation from a 
 stockholder must be satisfied before anj transfer of the stock held 
 by him can be made, no creditor by attachment, or levy under an 
 execution, could defeat the rights of such corporation to such lien, 
 by vii-tue either of such attachment or levy, as the ]nn-chaser 
 evidently could acquire no better right than the judgment debtor 
 had, and his right, as we have heretofore observed, in case of a 
 sale and transfer of his interest would, in case of the limitation 
 we have referred to, only carry with it, like any other chose in 
 action, the equitable interest only of the assignor, such transfer of 
 stock would be subject to the liens of the corporation, provided 
 for by contract, by-laws, or by the constating instruments.''^ 
 
 On this subject Mr. Brice observes : " The right to subject 
 stock in a corporation to sale on execution, not being given at 
 common law, but being a statutory provision, the statute in such 
 cases directs the mode of seizure and sale on execution. Where, 
 by charter or statutory enactments, a stockholder who is indebted 
 
 ' Sewall V. Lancaster Bank, 17 S. & 
 R 285; Titcomb v. Union Ins. Co., 8 
 Mass. 326 ; Colemau v. Spencer, 5 
 Blackf. 197. 
 
 * " The rule tliat an assignor of stock 
 may convey a title without paying 
 what he owes to the company will 
 not of course hold, if by the charter of 
 the company it is provided that all 
 debts due the company from a stock- 
 holder must be satisfied before any 
 transfer of his stock shall be made." 
 Ang. & Am., § 570. 
 
 And where it was provided by stat- 
 ute, that " no stockholder, indebted to 
 the bank, shall be authorized to make 
 a transfer, or receive a dividend till 
 such debt shall have been discharged, 
 or security to the satisfaction of the 
 directors given for the same ; " and a 
 stockholder, who was indebted to a 
 bank, not only for a balance of sub- 
 scription to stock, but also for a dis- 
 counted note, gave a power of attorney 
 to the plaintiff to draw dividends and 
 transfer the stock, and also money to 
 pay the installments, which was thus 
 applied, the supreme court of Pennsyl- 
 vania held that the plaintiff was not 
 entitled to a transfer of the stock, nor 
 to a return of the money paid on in- 
 stallments, TiTMAN, (J. J., observing : 
 
 'The words (of the act) embrace all 
 debts, and there is good reason for 
 their extending to all. When the di- 
 rectors discount the note of a stock- 
 holder, they know that his stock ia 
 liable, and, therefore, may be less 
 attentive to the sufficiency of the in- 
 dorsers. The indorsers, too, have an 
 interest in the lien of the bank, and it 
 may be presumed that many persons 
 have been induced to indorse on the 
 strength of this lien." Rogers v. Hunt- 
 ingdon Bank, 12 S. & R. 77. 
 
 And in Grant v. The Mechanics' 
 Bank, 15 S. & R. 140, under a provision 
 of an act of the statt; of Pennsylvania, 
 which prohibited a transfer of stock 
 by a stockholder "indebted" to the 
 bank, it was held that a note given by 
 the stockholder to the bank was a 
 debt due from him to the bank before 
 as well as after it became due, as the 
 provision would fail of its intended 
 benefit, if a stockholder had an un- 
 restrained right to transfer at any time 
 before his note fell due ; and that the 
 lien would remain, though the stock 
 were levied upon by a judgment credi- 
 tor, for notes drawn before but falling 
 due after the levy, even though they 
 should be renewed.
 
 534 Private Coepoeations. 
 
 can make no transfer until his debt is discharged, there can be no 
 levy upon such stock unless it be subject to the lien of the corpo- 
 ration. The method presci'ibed in the charter or statute for the 
 sale of such stock must be pursued or the sale will be void. 
 Where shares of stock in a corporation are made liable to levy 
 and sale on execution, it is the interest the party has in the corpo- 
 ration that is sold, not the mere paper certificates, and if they are 
 sold by the register number and in the name of the owner, that 
 is a good sale."^ 
 
 Sec. 376. Appointment of receivers. — The appointment of a 
 receiver in various cases, where it is made apparent that the inter- 
 ests, especially of a judgment creditor, are in danger of being lost, 
 or materially endangered or impaired without it, and where the 
 interests of the adverse party will not be materially prejudiced 
 thereby, is now the common subject of statutory provisions and 
 regulations, and even without statutory provisions on the subject, 
 it is one of the most efficient remedies in such cases, and within 
 the proper jurisdiction of courts of equity, where an execution 
 against a corporation is returned unsatisfied, or where there 
 is nothing that can be levied upon but the mere franchise or 
 easement from which income and revenue can be derived, and 
 then only by the use of the same for the purposes for which the 
 corporation was instituted. 
 
 The receiver, on his appointment in such cases, takes possession, 
 charge, and control of the franchises and revenues, and apj)lie8 
 the same to the satisfaction of the claim of the judgment creditor.^ 
 
 On this subject, Mr. High, in his valuable treatise on Receivers, 
 observes : "In most of the states of this country, as well as in 
 England, the jurisdiction of courts of equity over corporations 
 has been extended by legislative enactments to the appointing of 
 receivers and the sequestering of the property of the corporation 
 in proper cases, and in some of the states this jurisdiction has 
 
 ' Green's Brice's Ultra Vires, 562, '^ Covington, etc., R. Co. v. Shep- 
 
 563. See, also, Sewall v. Lancaster herd, 21 How. (U. S.) 112 ; Macon, etc., 
 
 Bank, 17 S. & R. 285 , Mechanics' Bank R. Co. v. Parker, 9 Ga, 393. As to the 
 
 V. Merchants' Bank, 45 Mo. 513; West jurisdiction of courts of chancery to 
 
 Branch Bank v. Armstrong, 40 Penn. appoint, see High on Receivers, § 40 
 
 St. 278; Stanford v. Ferris, 17 Conn, et seq., &nd notes. 
 258 ; Howe v. Starkweather, 17 Mass. 
 240.
 
 Execution and the Appointment of Receivers. 535 
 
 been enlarged by statute to the extent of winding up tlie affairs 
 of the corporation, and the complete annihihition of its franchises. 
 * '^' * It is to be observed in the outset, that the general 
 jurisdiction of equity over corporate bodies does not extend to 
 the power of dissolving the corporation, or of winding up its 
 affairs and sequestering the corporate property and effects, in the 
 absence of express statutory authority. And courts of equity 
 will not, ordinarily, by virtue of their general equitable jurisdic- 
 tion, or of their visitatorial powers over corporate bodies, sequester 
 the effects of the corporation, or take the management of its 
 affairs from the hands of its own officers and intrust it to the con- 
 trol of a receiver of the court, upon the appliction either of 
 creditors or shareholders.^ * * * 'VVhere the jurisdiction of 
 courts of equity has been extended by legislation to the appoint- 
 ment of receivers over incorporated companies, the power thus 
 conferred is treated by the courts as a delegated authority, the 
 exercise of which requires the most careful consideration. The 
 effect of appointing a receiver being to take the property of the 
 corporation out of the control of its own officers, to whom it has 
 been intrusted by its stockholders, the courts proceed with extreme 
 caution in the exercise of so summary a power.^ And in con- 
 struing such statutes they are inclined to give them a strict con- 
 struction, and require the prescribed method of obtaining juris- 
 diction of the person and the subject-matter to be strictly followed."^ 
 
 Sec. 378. Ju dgment creditor's right to a receiver — We have Said 
 that a common exercise of the powers of a court of equity was 
 the appointment of a receiver. But this authority was not usu- 
 ally, if ever, exercised for the purpose of sequestering the effects 
 of the corporation and closing up its affairs, but merely for the 
 purpose of using the franchises, and, through the management and 
 
 1 Citing Bangs v. Mcintosh, 23 Barb, collusion on the part of the corporate 
 
 591 ; Howe v. Deuel, 43 id. 504 ; Wa- authorities. Waterbury v. Merchants' 
 
 terbury v. Merchants' Union Ex. Co., Union Ex. Co., 50 Barb. 157; Xeall v. 
 
 50 id. 157 ; Belmont v. Erie R. Co., 53 Hill, 16 Cal. 145 ; High on Inj., § 288 
 
 id. 637; Neall v. Hill, 16 Cal. 145; and notes. 
 
 Baker V. Administrator, etc., 32 111.79. - Oakley v, Paterson Bank, 1 N. J. 
 
 But a court of equity will generally Eq. 173. 
 
 refuse to appoint a receiver on the ap- * High on Receivers, 287-289. See, 
 
 plication of a stockholder on the also. Bangs v. Mcintosh, 23 Barb. 591. 
 ground of fraud, luismauagemeut or
 
 536 Private Corpoeations. 
 
 control of tlie corporate powers by the receiver, to secure the ap- 
 pHcation of the revenues and net profits of the corporate business 
 to the satisfaction of a judgment creditor, where satisfaction of 
 his judgment could not be otherwise secured, and of wliich fact 
 the return of the officer on an execution is usually sufficient evi- 
 dence. But the proceeding in such cases is usually a matter of 
 statutory regulation, and the power conferred thereby, as we have 
 observed, may extend to the sequestration of the corporate prop- 
 erty, and the closing up of the corporate business.^ 
 
 Sec. 379. Same continued. — The general right of creditors in 
 case of their inability to satisfy their claims by execution is illus- 
 trated by the opinion of the supreme court of the United States, 
 in the case of Covington Drawbridge Company v. Shepherd^^ 
 The corporation in this case was created by an act of the state of 
 Indiana, for the purpose of building 'a drawbridge over the 
 Wabash river, in that state. Judgments were obtained against 
 the corporation in the circuit court of the United States, in that 
 state, and on execution a judgment creditor became tlie purchaser 
 of the rents and profits of the bridge as real property, under the 
 statutes of that state, for one year. He afterward, with other 
 judgment creditors, filed a bill in the circuit court of the United 
 States, and secured the appointment of a receiver, with authority 
 to take possession of the bridge, collect the tolls and pay them 
 into court, to be applied in satisfaction of the judgments of such 
 creditors. 
 
 Upon appeal, in the supreme court of the United States, 
 Catron, J., in delivering the opinion of the court, observes : 
 " By the laws of Indiana, lands and tenements cannot be sold 
 under an execution until the rents and profits thereof for a term 
 not exceeding seven years shall have been first offered for sale at 
 public auction ; and if that term or a less one will not satisfy 
 the execution, then the debtor's interest or estate in the land may 
 be sold, provided it brings two-thirds of its appraised value. The 
 tolls, under the idea that they were rents and profits of the 
 bridge, were sold for one year, according to the forms of this law. 
 
 'High on Receivers, §§297,298; 480. See, also, cases cited in the pre- 
 Atlas Bank v. Nahant Bank, 23 Pick ceding section. 
 
 •^21 How. (U. S.)112.
 
 Execution and the Appointment of Keceivers. 537 
 
 The tolls of the bridge being a franchise and sole right in the 
 corporation, and the bridge a niei'e easement, the corporation not 
 owning the fee in the land on either bank of the river, or under 
 the water, it is difficult to say how an execution could attach to 
 either the franchise or the structure of the bridge, as real or per- 
 sonal property. This is a question that this court may well leave 
 to the tribunals of Indiana to decide on their own laws, should it 
 become necessary. One thing, however, is plainly manifest, that 
 the remedy at law of these execution creditors is exceedingly em- 
 barrassed, and we do not see how they can obtain satisfaction of 
 their judgments from this corporation (owning no corporate prop- 
 erty but this bridge), unless equity can alford relief. * * * 
 All that we are called upon to decide in this case is, that the 
 court below had power to cause possession to be taken of the 
 bridge, to appoint a receiver to collect tolls and pay them into 
 the court, to the end of discharging the judgments at law ; and 
 our opinion is that the power to do so exists, and that it was 
 properly exercised. It is, therefore, ordered that the decree below 
 be athrmed, and the circuit court is directed to proceed to execute 
 its decrees." 
 
 Sec. 380. Same continued. — Under the statutes of Wisconsin it 
 was held that a judgment creditor of a corporation may, after 
 execution is returned unsatisfied, in whole or in part, file a hill 
 on behalf of himself and other creditors against not only the cor- 
 poration but the delinquent stockholders, for an account of the 
 assets and the appointment of a receiver. ' 
 
 ' Adler v. Milwaukee Pat. Brick Man. the acting party and alone responsible 
 
 Co., 13 Wis. 57. See, also, Rev. Stat, to other parties who may receive in- 
 
 Wis., §§ 18, 19, chap. 148, and same juries by the transaction of the busi- 
 
 chap.,§ 15. ness of the company, either by omis- 
 
 Mr. Redfield observes in reference sion of duty or positive aggression, 
 
 to receivers as follows : "The rules of And, although the court will inmost 
 
 the courts of equity in regard to the instances interfere for the protection 
 
 office and agency of a receiver are very of the receiver, on his request, that is 
 
 strict and stringent. The property not always done, especially where, as 
 
 while in his custody is regarded in in some of the other states, railway 
 
 legal contemplation as in the custody corporations are kept in the hands of 
 
 of the court. The assets are thence- receivers through a succession of 
 
 forth in gremio legh, and cannot be years. 
 
 seized by process from any otlier court. And where the court of equity 
 And, as a general thing, while a rail- does not interfere to protect a re- 
 way corporation is in the hands of a ceiver from his ordinary responsibil- 
 receiver, the receiver is regarded as ity, measured by his acts, he will be 
 
 63
 
 538 
 
 Private Corporations. 
 
 In the case just cited Chief Justice Dixon, after maintaining 
 that the capital stock of a corporation, both that which is paid in 
 and that which remains unpaid, is a trust fund pledged for the 
 payment of the debts of the corporation, observes in reference 
 to the powers of a court of equity to afford the requisite relief in 
 such cases, as follows : " The practice in such cases, in those 
 states where the mode of closing up the affairs of non-paying 
 and insolvent corporations, and of distributing the proceeds of 
 their property and effects among their creditors, is governed by 
 the common law, as indicated by the authorities to which refer- 
 ence has been made,' precisely that which was adopted by the 
 
 held responsible for all the acts and 
 omissions of the corporation while 
 under his sole control and manage- 
 ment. 
 
 This subject underwent a very elab- 
 orate examination in the supreme 
 court of Indiana, and the following 
 propositions were maintained : That a 
 railway with all its appurtenances 
 was in the exclusive possession, use 
 and control of a receiver appointed by 
 a court of competent jurisdiction, who 
 had the employment and control of 
 all the hands upon the road ; that the 
 ])Ossession of the receiver could not 
 be regarded as the corporation, 
 
 neither could the company be held 
 responsible for the acts of any ser- 
 vant or employee of the servant. The 
 position of the corporation is more 
 completely obscured and extinguished, 
 so to speak, by the works being placed 
 under the control of a receiver by 
 compulsory proceedings in the courts 
 than by any voluntary surrender of 
 the road and its operations into the 
 hands of lessees or mortgagees, where 
 it has generally been held that the 
 corporation may still be held responsi- 
 ble." 2 Redf. on Rail. 362 ; Ohio & 
 Miss. R. Co. v. Davis, 23 lud. 553. 
 
 ' Spear v. Grant, 16 Mass. 9 ; Vose 
 V. Grant, 15 id. 505; Wood v. 
 Drummer, 3 Mason, 308. la Ward v. 
 Griswoldville Manuf. Co., 16 Conn. 
 598, the complainants, creditors of 
 the defendant corporation, brought a 
 bill asking the court to compel the 
 subscriber to pay into the hands of the 
 receiver sixty percent upon the stock, 
 being the sum then remaining unpaid. 
 Waite, J., in granting the relief 
 prayed for, said : " The resolve incor- 
 porating the Griswoldville Manufac- 
 turing Company provides, that "the 
 capital stock of the corporation shall 
 not exceed $50,000 " — " that a share 
 of the stock shall be $100 " — " and 
 that the directors may call in the sub- 
 scriptions to the capital stock by in- 
 stallments, in such proportions, and 
 at such times and places, as they may 
 think proper, giving such notice 
 thereof as the by-laws and regulations 
 of the company shall prescribe." 
 
 There is a furthe^ provision, that 
 " the stock, property and affairs of 
 the corporation shall be managed by 
 not less than three nor more than five 
 directors, one of whom they shall 
 appoint their president " — and they 
 shall have power " to make and estab- 
 lish such by-laws, rules and regula- 
 tions as they shall think expedient, 
 for the better management of the con- 
 cerns of the corporation, and the same 
 to alter and repeal." 
 
 1. The first inquiry arising in this 
 case is, what obligation did a stock- 
 holder assume upon himself, when be 
 subscribed for a share of the stock of 
 this company ? The answer obviously 
 is, that he agreed to pay the sum of 
 $100, in such installments and at such 
 times, as should be required by the 
 directors. There was no discretion 
 left to him as to times of payment, 
 nor as to the amount, except that it 
 should not exceed the sum of
 
 Execution and the Appointment of Receivers. 539 
 
 appellant in this case. The creditor is first to establish liis claim 
 by a judgment at law, and then after execution issued and returned 
 in whole or in part unsatisfied, he may file his bill in his own 
 
 He had indeed a voice in the election 
 of the directors; bat when they were 
 chosen they were clothed witii the 
 power of making by-laws, prescribing 
 the time and manner of paying the in- 
 stallments upon the shares, and 
 managing the affairs of the corpora- 
 tion. Were they now to call in the 
 balances due upon the shares, the 
 stockholders could not successfully re- 
 sist the demand. 
 
 This is not only apparent from the 
 terms of the act of incorporation, but 
 in conformity with principles settled 
 by this court in a very recent case. 
 Hartford and New Haven Kail- 
 road Company v. Kennedy, 13 Conn. 
 507. The defendant in that case had 
 subscribed to the stock of a railroad 
 company, and an action was brought 
 against him to recover the amount of 
 certain installments on his shares, 
 ordered by the directors to be paid. 
 The judge who gave the opinion of 
 the court, in that case, says, " Did the 
 defendant, by becoming and continu- 
 ing a stockholder, incur a personal 
 obligation to pay the installments re- 
 quired by the directors, in the manner 
 prescribed by the charter, on the 
 shares by him originally subscribed, 
 and held by him at the time such in- 
 stallments were called for and were 
 due ? We think such an obligation 
 was created ; and the law coinciding, 
 in this case, with justice and good 
 faith, will enforce it. It is true a 
 promise to pay, i a 2y)'ecise terms, doea 
 not appear to have been made. The 
 defendant has not affixed his signa- 
 ture to an instrument which contains 
 the words I promise to pay ; but he 
 has done an equivalent act. He has 
 contracted witli the plaintiff to become 
 a member of their corporation, and to 
 be interested in their stock, to the ex- 
 tent of $100 for each share assigned to 
 him, if that amount be required." 
 
 And in a subsequent case, it was 
 holden, that a stockholder who de- 
 rived his stock by a transfer from the 
 original subscriber, and received a 
 new certificate from tne company, 
 was personally liable to pay the in- 
 stallments called for after the trans- 
 
 fer. Hartford and New Haven Rail- 
 road Company v. Boorman et al., 13 
 Conn. 530. 
 
 The only difference between those 
 cases and the present is, that in the 
 former the subscriptions were to the 
 stock of a railroad company, and in 
 the latter, to that of the manufacturing 
 company. But the language used in 
 the two charters is, in this respect, 
 very much alike ; and we discover 
 nothing in the object of these com- 
 panies re(iuiring a construction to be 
 given in one case different from that 
 given in the other. The stockholders, 
 therefore, are equally liable, whether 
 they obtained their shares by pur- 
 chase, or by virtue of an original sub- 
 scription, 
 
 2. In the next place, does the amount 
 of the shares subscribed constitute 
 the capital stock of the company, or 
 only the amount actually paid in ? 
 Had these plaintiffs, when they dealt 
 with the company, and gave them 
 credit, a right to look to the former, as 
 a fund applicable to the payment of 
 their debts, or only to the latter? 
 
 The unpaid balances of the shares 
 are as much subject to the call of the 
 directors as any debts due the com- 
 pany. Payment can as well be en- 
 forced in the one case as in the other. 
 The directors can at any time collect 
 those balances, and if sufficient, pay 
 off the debts due the plaintitHs. And 
 why should they not do so V What 
 justice is there in withholding funds 
 at their command, and ap[)licable to 
 the payment of those debts ? 
 
 It is apparent that it is not for their 
 interest to do it. Tlie charter re- 
 quires them to be stockholders, and 
 the bill alleges that they are such, 
 and actually own a large amount of 
 the shares of the company. A call 
 upon the stockholders for funds to pay 
 off these debts of this insolvent com- 
 pany would be in part a call upon 
 themselves, and might materially 
 affect their own interests. They may, 
 therefore, prefer to let these creditors 
 suffer, rather than become sufferers 
 themselves. 
 
 But, have they a right to do this?
 
 540 
 
 Private Corporations. 
 
 behalf and in belialf of sucli other creditors of the corporation as 
 may elect to become parties thereto, against the corporation and 
 its delinquent or withdrawing stockholders, alleging the recovery 
 
 They, with others, have embarked in 
 a business, perhaps hazardous, and as 
 events have shown unfortunate, ex- 
 pecting to share in the profits ; and 
 why should they not also bear their 
 proportion of the losses ? 
 
 It is true the company was incor- 
 porated, and the members were not 
 made liable, in their individual capaci 
 ties, for the debts of the company, but 
 it was necessary for the company to 
 create a capital before they could 
 obtain credit. This was done by the 
 subscriptions to the capital stock. In 
 that, there was a limit fixed to their 
 liability, beyond which they could not 
 be compelled to go. No stockholder 
 can be compelled to pay more than 
 $100 on each share he owns, let the 
 amount of the debts of the company 
 be ever so great. All that is required 
 of the defendant, in the present case, 
 is, that the members shall discharge 
 the obligations which they assumed, 
 upon becoming stockholders, or at 
 least, so much as may be necessary to 
 pay off the debts of the company. 
 
 Some stress has been laid, in the 
 argument, upon the proviso in the act 
 of incorporation, requiring the com- 
 pany, within three months from the 
 passing of the act, to lodge a certifi- 
 cate with the town clerk of Wethers- 
 field, containing the amount of capital 
 stock actually paid in and belonging 
 to the company ; and directing that it 
 should not be withdrawn, so as to re- 
 duce the same below $5,000 ; and 
 further providing, that, if any part of 
 the capital paid in and certified 
 should be withdrawn, without the 
 consent of the general assembly, the 
 directors allowing it should become 
 liable, in case of the insolvency of the 
 corporation. Hence it is insisted that 
 the capital thus certified, and not the 
 amount of the shares subscribed, con- 
 stitutes the stock of the company. 
 
 The act does not prescribe the 
 amount of capital stock. It says, that 
 it shall not exceed $50,000; and the 
 fair inference to be drawn from the 
 proviso is, that it shall not be less than 
 $5,000. The company, therefore, might 
 
 commence business with any capital 
 between those sums. But that the 
 public might know the amount, it was 
 very proper that a certificate should be 
 lodged with the town clerk, for the 
 examination of those who might wish 
 to deal with them. Suppose the num- 
 ber of shares subscribed had been 
 five hundred ; the amount paid upon 
 each share, at the end of the 
 three months, $10 ; and the company 
 had lodged a certificate, stating that 
 the capital subscribed was $50,000, and 
 the amount then actually paid in 
 $5,000; would any one dealing with 
 the company hesitate in believing 
 that the amount subscribed constituted 
 the capital stock of the company ? — 
 He would know that but a small por- 
 tion of the capital had been paid in ; — 
 but, at the same time, he would know, 
 from the act of incorporation, that the 
 balance was at all times subject to the 
 call of the directors. And if he con- 
 sidered them honest men, he would 
 believe that they would call in the 
 remaining installments, whenever the 
 wants of the company required it. 
 
 The act does not prescribe the form 
 of the certificate, but it would be 
 natural for them to make it according 
 to the condition of the case. How it 
 was in fact made does not appear. 
 
 3. It is further claimed, on the part 
 of the defendants, that the power 
 conferred upon the directors to call in 
 the installments upon the shares is a 
 discretionary power, with the exercise 
 of which a court of chancery will 
 never interfere. But that discretion 
 is merely neodal, relating to the time 
 and manner of making the payments. 
 When the wants of the company re- 
 quire those payments, it becomes the 
 duty of the directors to cause them to 
 be made, as much so as to require 
 payment of debts due to the company. 
 We think it is not discretionary with 
 the directors to say whether the com- 
 pany debts shall be paid or not, when 
 they have the means at command. 
 
 Tlie case of Catlin v. The Eagle 
 Bank, 6 Conn. 233, has been cited as 
 an authority against this application.
 
 Execution and the Appointment of Keceivers. 541 
 
 and non-payment of his judgment, and praying tlie decree or 
 order of the court that an account of the assets and debts be 
 taken and a receiver appointed, and tliat the stockholders and 
 officers pay in and account to the receiver for so much of the 
 capital stock as will be sufficient to pay the debt of the plaintiff, 
 and those of such other creditors as may choose to join him and 
 come in under the decree ; and that the receiver be directed to 
 apply the same in discharge thereof." 
 
 But it has been held in New York that a mere common creditor 
 of a manufacturing corporation is not entitled to the appointment 
 of a receiver, in an action by him for a dissolution, and the 
 sequestration of the property of the corporation, on the ground 
 
 But that case is clearly distinguishable 
 from this. The question there was, 
 whether an insolvent corporation 
 might pay one creditor in preference 
 to others. Here the question is, 
 whether the corporation may refuse to 
 pay any of their creditors. 
 
 4. It is finally said, that if these 
 plaintiffs are entitled to any remedy, it 
 is not by a suit in chancery, but by a 
 writ of mandamus, requiring the 
 directors to make the necesssary calls 
 upon the stockholders. The Queen v. 
 The Victoria Park Company, 1 Ad. & 
 El. 288 ; The Queen v. Ledgard et al., 
 id. 616 ; The King v. St. Catharine 
 Dock Company, -1 B. & Ad. 360. 
 
 The authorities cited show that 
 there are cases where the officers of a 
 company may be compelled to make 
 calls upon the members, by a writ of 
 mandamus. Whether such a writ 
 could properly issue against the direc- 
 tors of this company, under any cir- 
 cumstances, we do not deem it neces- 
 sary to inquire ; because in the present 
 case such a writ would be wholly in- 
 adequate to give the relief prayed for 
 in this bill. 
 
 The debts of the plaintifiFs are not 
 such as the company is bound to pay 
 at all events. It is averred in the bill 
 that the company is entirely insolvent, 
 and has no visible property. The 
 stockholders are liable only to a cer- 
 tain extent. There may be other 
 creditors entitled to share in the funds 
 of the company, as well as these 
 
 plaintiffs ; and these funds may fall 
 short of the amount of the debts 
 against the company under such cir- 
 cumstances. 
 
 It is in the power of a court of 
 chancery to do more ample and com- 
 plete justice to the parties interested 
 than can possibly be done in a court of 
 law. 
 
 The bill shows that the plaintiffs 
 have proceeded as far as thej' can at 
 law. They have obtained judgments 
 against the corporation — made de- 
 mand upon the company for payment 
 of these executions — and these exe- 
 cutions have been returned wholly 
 unsatisfied. They are now remediless, 
 unless the corporate funds can be 
 reached, by the aid of a court of 
 chancery, on a writ of mandamus. 
 The former, in our opinion, is decided- 
 ly the more appropriate remedy. 
 
 Upon the whole, we think that the 
 plaintiffs, upon the allegations con- 
 tained in their bill, are entitled to re- 
 lief ; and that, consequently, the de- 
 murrer must be overruled." See Mann 
 V. Cooke, 20 Conn. 178, where it was 
 held that a public corporation could 
 not receive a subscription under a 
 private arrangement at less than the 
 par value of the stock subscribed for ; 
 and such subscriber was decreed to 
 pay up the unpaid balance. Mann v. 
 Pentz, 3 N. Y. 415 ; Nathan v. Whit- 
 lock, 9 Paige, 153 ; Henry v. V. 
 & A. R. Co., 17 Ohio, 187 ; Ogilvie v. 
 Knox Ins. Co., 33 How. (U. S.) 380.
 
 542 Private Corporations. 
 
 that there was an adequate remedy at law, and that in such a case 
 the creditor will be left to pursue his legal remedy." 
 
 Sec. 381. Functions, rights and duties of a receiver of a corporation. — 
 In relation to the functions, rights and duties of a receiver of a 
 private corporation, it may be observed that he, for certain pur- 
 poses, stands as the trustee of both, for creditors and stockholders,^ 
 and, in other respects, he represents the corporation. 
 
 In case of the appointment of a receiver on the application of a 
 judgment creditor, who is unable to obtain satisfaction by exe- 
 cution, it has been held that the receiver thus appointed becomes 
 a trustee, not only for the creditor who secures the appointment, 
 but of other creditors and the stockholders.^ But he is vested by 
 law for other purposes with the powers of the corporators, and 
 the estate of the corporation ; and, for the purpose of determining 
 the extent of his power and title, he represents the body itself.^ 
 In the case of Curtis v. Leavitt, just cited, in reference to the 
 powers and functions of the receiver, Comstock, J., observes : ''It 
 has been said, in this as in other cases, that lie represents the 
 creditors and stockholders, but for all the purposes of inquiring 
 into his title, he really represents the corporation. He is by law 
 vested with the estate of the corporate body, and takes his title 
 under and through it. It is true, indeed, that he is declared to 
 be a trustee for creditors and stockholders ; but this only proves 
 that they are the beneficiaries of the funds in his hands, without 
 indicating the sources of his title or the extent of his powers. 
 If then, in a controversy between the receiver and third parties, 
 in respect to the corporate estate, it is possible to form a concep- 
 tion of rights, legal or equitable, belonging to the shareholders as 
 
 1 Qalway v. United States Steam Atcliison v. Davidson, 2 Piuu . (Wis. 
 
 Sugar Ref. Co., 13 Abb. Pr. 211 ; 48. 
 
 Parmly v. Tenth Ward Bank, 3 Edw. ^ Id. 
 
 Ch . 395. 4 Hii,rb on Receivers, § 315. See, also, 
 
 •^ Gillet V. Moody, 3 N. Y. 479 ; Tal- Curtis v. Leavitt, 15 N. Y. 44 ; Hyde 
 
 mage v. Pell, 7 id. 347 ; Libbv v. Rose- v. Lvnde, 4 id. 887. See, also, Brouwer 
 
 krans,55 Barb. 217; Angell v."Silsbury, v. Hill, 1 Sandf.629; White v. Haight, 
 
 19 How. Pr. 48, vs^hich was a decision 16 N. Y. 310; Osgood v. Laytin, 48 
 
 under the statutes of New York. See, Barb. 464 ; Shaughnessy v. The Rens- 
 
 also, under the statutes of Ohio, in selaer Ins. Co., 21 id. 605 ; New Orleans 
 
 such a case, Lafayette Bank v. Buck- Gas-light Co. v. Bennett, 6 La. Ann. 
 
 ingham, 12 Ohio St. 419 ; State v. Clay- 457 ; Gas-light and Bank Co. v. Haynes, 
 
 pool, 13 id. 14 ; also, iu Wisconsin, 7 id. 114.
 
 Execution and the Api'oint>[ent of Receivers. 543 
 
 individuals, to which tlie corporation itself could not assent in its 
 own uaiucj the receiver does not rei)resent those rights. So far 
 as sliareholders are concerned, he can litigate respecting the fund 
 upon precisely the grounds which would be available to the cor- 
 poration, if it were still in existence, solvent, and no receivership 
 had been constituted." 
 
 Sec. 382. Same continued. — It is not our purpose, however, to 
 consider fully the subject of the functions, powers and duties of 
 receivers of corporations. The general subject has received the 
 attention of able writers ; and these particular topics have received 
 particular consideration by them. Besides, tliey have generally, 
 to a greater or less extent, been made the subject of statutory 
 regulations ; and where this is the case, the statutes must be con- 
 sulted in order to determine questions relating to the same. 
 
 In conclusion we may notice the following powers and duties 
 and effect of the appointment of the receiver. His appointment 
 does not change the rights of action, or the contract relations of 
 the corporation ; ^ he is the officer and agent of the court, and sub- 
 ject to its directions ; '^ and he cannot disaffirm a settlement made 
 by the corporation ; ' but he may disaffirm acts of the corporation 
 in fraud of creditors.* 
 
 Sec. 383. It is the duty of the receiver, as the trustee of the 
 various parties having an interest in the corporate affairs, and as 
 the agent and instrument of the court, to act prudently in the 
 
 1 Williams V. Babcock, 25 Barb. 109; by reason of the fraud or illegality in 
 
 Bell V. Shibley, 83 id. 610 ; Shaugh- its procurement or inception, passing 
 
 nessy v. The Rensselaer lus. Co., 21 into the hands of a receiver does not 
 
 id. G05 ; Savage v. Medbury, 19 N. Y. purge it of these defects." 
 
 32; Moise v. Chapman, 24 Ga. 249; -Booth v. Clark, 17 How. (U.S.) 
 
 Ddvendorf V. Beardsley, 23 Barb. 056. 322; Hunt v. Wolfe, 2 Daly, 303; 
 
 In the latter case Mr. Justice James Devendorf v. Dickinson, 21 How. Pr. 
 
 observes: "The plaintiff, as receiver 275 ; Corey v. Long, 43 id. 497; S. C, 
 
 of the American Mutual Insurance 12 Abb. Pr. (X. S.) 427 ; Skinner v. 
 
 Company, takes its notes and assets Maxwell, 66 X. C. 45; S. C, 68 id. 
 
 subject to all the conditions and legal 400; Battle v. Davis, 66 id. 252; 
 
 disabilities with which they were Hooper v. Winston, 24 111. 353 ; Kaiser 
 
 transacted in the bands of the corpora- v. Kellar, 21 Iowa, 95 ; Ellicott v. 
 
 tion itself; he cannot impeach or dis- Warford, 4 Md. 80. 
 
 affirm its authorized acts, nor the * High on Receivers, § 320. 
 
 authorized acts of its agents. If a ■* Gillet v Moody, 3 N. Y. 479 ; But- 
 
 note in the hands of the corporation terworth v. O'Brien, 24 How. Pr. 438. 
 was void, or incapable of enforcement,
 
 544: Private Cokporations. 
 
 management and settlement of the corporate affairs, acting 
 under the direction of the court for the best interests of all con- 
 cerned, according to the best of his ability.' And wlien there 
 are funds on hand to be divided among the creditors, this should 
 ordinarily be brought into court and distributed, under the direc- 
 tion of the court, to the parties entitled to it/ 
 
 " The first duty of receivers of insolvent corporations," observes 
 Mr. High, " is to faithfully collect and justly disburse the assets 
 of the corporation, which constitute the trust fund for the credi- 
 tors. In the discharge of this duty they are properly vested with 
 a certain degree of discretion, in the coniprgmising and settlement 
 of demands against the corporation ; but, in the exercise of their 
 discretionary powers, they should keep constantly in view the in- 
 terests of those whom they represent, and for whom they act." ^ 
 
 But for a fuller consideration of this subject reference must be 
 had to those treatises expressly devoted to it. 
 
 1 If there is any doubt in the mind Receivers may decline to ratify a 
 of the receiver as to tlie proper course contract made by a corporation after 
 of action or conduct, it is safe to apply its insolvency, if satisfied the ratifica- 
 to the court for directions. In re Van tion would result in loss. Id. ; Suydam 
 Alleu, 37 Barb. 335. v. Receivers, 3 Green's Ch. 114 ; S. C, 
 
 2 Benneson v. Bill, 63 111. 408. id. 376. See, also, Evans v. Trimount- 
 * High on Receivers, § 334. ain Mut. Fire Ins. Co., 9 Allen, 339.
 
 Amalgamation and CoNsoLroATioN. 545 
 
 CHAPTER XVI. 
 
 AMALGAMATION AND CONSOLIDATION. 
 
 Sec. 384. Amalgamation — meaning of . 
 
 Sec. 385. The Eagjish doctrine relating to amalgamation. 
 
 Sec. 386. Doctrine in this country. 
 
 Sec. 387. Consolidation must be authorized by legislative authority. 
 
 Sec. 388. Where legislative authority is conferred after the creation of the 
 
 corporation. 
 Sec. 389. Same continued. 
 
 Sec. 390. DitJiculty removed by the exercise of the right of eminent domain. 
 Sec. 391. Same continued. 
 Sec. 392. Where authority to consolidate exists at the time of the creation of 
 
 the corporation. 
 Sec. 393. Rule as to the requisite concurrence where no provision is made 
 
 therefor. 
 Sec. 394. The new corporation created by consolidation. 
 Sec. 395. Doctrine as to the creditors of the consolidating companies. 
 Sec. 396. Consolidation of companies organized in different states. 
 Sec. 397, Same continued. 
 
 Sec. 384. Amalgamation — meaning of, etc. — The term "amalga- 
 mation " seems in England to be generally used in the place of con- 
 solidation in this country, and it has there been said to consist in 
 making two companies into one ; as, where two companies mutu- 
 ally agree to abandon their organization or association and reor- 
 ganize a new one as one body. ' It is affirmed in relation to amalga- 
 mation in England, that there is no implied power in corporations 
 so to do, and, also, that a majority of the directors cannot authorize 
 and consummate an amalgamation under a general authority to 
 amalgamate, so as to bind the dissenting members to assume liabil- 
 ities in the new organization. In such a case it was observed by 
 the vice-chancellor In re Empire Assurance Corporation, exparte 
 Bagshaio, above cited, as follows : " It is possible that this author- 
 ity may go thus far ; it may empower the directors, without being 
 called to account for so doing in this court, or by any other juris- 
 diction, to sacrifice or to give up (which implies something more) 
 the whole of their business, and to transfer their assets, if they 
 
 1 In re Bank Hindustan, etc., 3 H. & 4 Eq. 341 ; 36 L. J. Ch. 663 ; 15 W. R. 
 M. 666. See, also, /«, re Empire As- 889; 16 L. T. (N. S.) 345; Era Ass. 
 surance Corp., exparte Bagshaw, L. R., Co., Williams' Case, 3 J. & H. 400. 
 
 69
 
 546 Pkivate Corporations. 
 
 think fit, to some other company to carry on the business on the 
 best terms they can make witli thein. In carrying out this the 
 directors may possibly be authorized to say, ' you who do not like 
 this arrangement must simply lose; we have amalgamated one 
 company with the other, * ^ * and we have placed all your 
 assets in the hands of another concern.' But that does not imply 
 that the dissentient shareholders, besides losing their assets, are 
 personally bound to take part and lot in the new concern. It is 
 one thing to say, ' Possibly you may find all the assets gone and 
 your share of no value ; ' but it is a prodigious step further, to 
 say, that the dissentient shareholder, having been concerned in an 
 insurance company, shall be obliged to become subject to all lia- 
 bilities of another company, which is not only an insurance com- 
 pany but a guaranty company, and a company for the purchase 
 of houses and various other things as well." 
 
 Sec. 385. The Snglish doctrine relating to amalgamation. — The 
 recognized English doctrine on the subject of amalgamation is, as 
 we have noticed, that a majority of the members cannot amalga- 
 mate, and transform shares from one association into another, as 
 such a proceeding would be uU7'a vires? But, it is there held, 
 that where amalgamation cannot be legally effected in a direct 
 manner, the object may be accomplished in an indirect manner. 
 Thus, Mr. Brice observes : " It may do so by transferring its 
 property, funds, rights and liabilities to the other contracting cor- 
 poration, and then voluntarily dissolving itself, usually by wind- 
 ing-uj). Generally the arrangement is supplemented by a proviso, 
 w^hereby a transferee, the purchasing company, indemnifies the 
 selling company against the liabilities which it may be under in 
 
 * Clinch V. Financial Corporation, L. It was held that there was no special 
 R., 4 Ch. 117 ; Higg's Case and Mar- power in the constitution of corpora- 
 tin's Case, 3 H. & M. 657 ; Los's Case, tion B., or in tlie provisions of the 
 34 L. J. Ch. 609 ; London, etc.. Bank, Euo^lish act (1862), relating to the 
 Drew's Case, 36 L. J. Ch 785. subject, to authorize such a proceed- 
 In the case first cited, B., a corpora- ing. See, also, Imperial Bank, etc., v. 
 tion, had agreed to purchase the good- Bank of Hindustan, etc., L. R., 6 Eq. 
 will of C, another corporation, and 91 ; London, etc., Corp., L. R., 4 Ch. 
 such agreement was confirmed at a 683 ; James v. Eve, L. R., 6 H. L. 335 ; 
 special meeting of B, But the plaint- Fremont v. Stone, 43 Barb. 169; Bliss 
 itf, one of the stockholders in the v. Matteson, 53 id. 335; S. C, 45 
 corporation B. , objected, and filed a N. Y. 33 ; Green's Brice's Ultra Vires, 
 bill against the other shareholders and 513. 
 directors to set aside the agreement.
 
 Amalgamation and Consolidation. 547 
 
 respect to claims, existing or prospective. This, after all, is not 
 an anuil<i;Hniati()n ; it is not a union of one corporation with 
 another, but is simply a transfer of assets, with attendant respcMi- 
 sibilities. It is, however, a sufficient amalgamation for all practi- 
 cal purposes, and it is, therefore, the process always adopted." ^ 
 
 Seo. 386. Doctrine in this country The term consolidation, in 
 
 this country, is generally used in the place of amalgamation in 
 Eny-land. It is sometimes an or«::anization or constitution of a 
 new company out of two or more old ones, or a conveyance of 
 the capital and rights of one or more to another, the latter con- 
 tinuing the business of all in its original corporate name, under 
 stipulated arrangements, and in accordance with statutory pro- 
 visions relating to the subject. In the case of the consolidation 
 of three companies, it has been observed that the effect of the 
 consolidation " was a dissolution of the three corporations named, 
 and at the same instant the creation of a new corporation, with 
 property, liabilities, and stockholders derived from those then 
 ])assing out of existence." '" So, again it has been observed, that 
 consolidation amounts to " a surrender of the old charters by com- 
 panies, the acceptance thereof by the legislature, and the forma- 
 tion of a new corporation out of such portions of the old as enter 
 into the new." ^ But where, by the provisions of the statute and 
 by agreement, one corporation conveys all its property to another 
 and is extinguished, this was held in Missouri not to be an amal- 
 gamation or consolidation of the two corporations into one." The 
 general doctrine in this country seems to be, as in England, 
 that there is no inherent power in a corporation, or implied 
 authority in constating instruments, to autliorize a corporation to 
 amalgamate or consolidate Math another or other companies. The 
 reasoning against this power is, that as the charter is a contract 
 between the state and the corporation, any alteration made there- 
 
 ' Green's Brice's Ultra Vires, 513; (X. S.) 283; Same v. Same, 6 Lans. 
 
 Anglo-Australian Co. v. British, etc., 25; Kelly v. Mariposa Mining Co., 4 
 
 Co., 3Giff. 521 ; 4 DeG., F. & J. 341. Hun, 632. 
 
 See, also, same principle in Hodges v. "■'McMahan v. Morrison, 16 Ind. 172. 
 
 N. E. Screw Co., 1 R. I. 312; S. C, 3 id. 3 i.auman v. Lebanon, etc., K. Co., 
 
 9 ; Booth V. Bunce, 33 N. Y. 130 ; Horke 30 Penn. St. 42. 
 
 V. Tiiomas, 56 id. 559; Barclay v. ^ Powell v. North Mo. R. Co., 42 Mo. 
 
 Quicksilver Mining Co., 9 Abb Pr. 63.
 
 548 
 
 Private Corpokations. 
 
 in must be assented to hj both parties, and lience tlie state must 
 assent to any cliange of its purposes and powers.^ 
 
 Sec. 387. Consolidation must be authorized by legislative authority. — 
 From what we have observed, it may be inferred that in order to 
 make consolidation effective and valid, it must in all cases receive 
 at least legislative assent. This may be given in the original 
 charter,^ or by general laws ; and provision therefor may be made 
 by general laws, or by a sjsecial act even after the organization of 
 the original corporations.^ But with what effect, where members 
 or creditors dissent from the consolidation, we shall hereafter 
 notice. The demand for the consolidation of railroad companies, 
 not only in the various states, but with connecting lines in other 
 states, has secured legislation for this purpose in most of the 
 states. And in view of the manifest interest of stockholders and 
 creditors, the American policy has favored general statutes on 
 this subject, providing for consolidation of continuous lines of 
 railroads owned by different companies, created even in different 
 states. And where such authority is not provided, the same 
 object has partially been accomplished by leasing such railroad 
 lines.* 
 
 ' The right to consolidate two or 
 more corporations into one can be ac- 
 quired by legislative authority to that 
 end. N. Y. & Sliaron Canal Co. v. 
 Fulton Bank, 7 Wend. 413 ; Black v. 
 Delaware, etc., Canal Co., 24 N. J. 
 Eq. 455. And a consolidation eiifected 
 without such special authority is ultra 
 vires and void. In re Era Insurance 
 Soc, 3 L. T. (N. S.) 314. And equity 
 will restrain a corporation under such 
 circumstances from consolidating with 
 another, at the suit of any stockholder. 
 Charlton v. Newcastle & Carlisle Rail- 
 way Co., 5 Jur. (N. S.) 1096. So, too, 
 in this country, the consent of the 
 stockholders is necessarv. Kean v. 
 Johnson, 9 N.J. Eq. 401; Fisher v. 
 Evansville, etc., R. R. Co., 7 Ind. 407; 
 Black v. Delaware, etc., Canal Co., 
 ante; Blatchford v. Ross, 54 Barb. 42 ; 
 In, re Empire Assurance Co., L. R., 4 
 Eq. 341; In re London, etc., Ins. Cor- 
 poration, L. R., 4 Ch. App. 682. 
 
 2 Clearwater V. Meredith, 1 Wall. 25; 
 Nugent V. Supervisors, 19 id. 241. 
 
 ^ Black v. Delaware, etc.. Canal Co., 
 24 N. J. Eq. 455; Bishop v. Brainerd, 
 23 Conn. 389. See, also, Pearce v. 
 
 Madison, etc., R. Co., 21 How. 441; 
 Fisher v. Evansville, etc., R. Co., 7 
 Ind. 407. 
 
 4 For general statutes of various 
 states on the subject of consolidation, 
 see Iowa Code (1873), 233, § 1275 ; 
 Wagner's Missouri Statute, 314, § 56; 
 Laws of Kansas (1870), chap. 92, t^ 1, 
 p. 195; California Code. 10; Rev. Stat. 
 Col., chap. 18, § 57, p. 137 ; Gen. Stat. 
 Neb. 196, S 114; Compiled- La ws Nev. 
 (1873). vol.' 2, p. 301, § 3465; Webb's 
 Railroad Laws of Me. 87 ; Edmonds' 
 N. Y. Stat, at Large, 529; Laws of 
 N. J. (1873), chap. 413, i^ 17, p. 98; 
 Brightlev's Purdon's Dig. (Laws of 
 Pa.) 1222-1226; Battle's Rev. Stat. N. 
 C. 749; Rev. Stat. S. C. 368; Sess. 
 Laws Ala. (1869-70) 318; Rev. Stat. 
 Ky. (Stanton^ vol. 2, p. 548; Stat. 
 Tenn. 1140; Rev. Stat. Ohio (Curwin). 
 pp. 1882, 2791 ; Wilcox's R. R. Laws. 
 Ohio, 134 ; Gen. Stat. Ind., vol. 3 
 (Davis' Supp.), 399 ; Rev. Stat. 111. 
 (1874), 294, 295 ; Gilbert's R. R. Laws 
 of 111. 229: Compiled Laws Mich., 
 chap. 75. p. 812, g 41 ; Rev. Stat. 
 Minn., chap. 34, p. 269; Edgerton's 
 R. R. Laws of Minn., 19.
 
 Amalgamation and Consolidation. 549 
 
 Seo. 388. Where legislative authority is conferred after the creation 
 of the corporation. — AVI le re tliu legLshitivo autliority is conferred 
 after the charters liave been granted to the consolidating compa- 
 nies, or after tliey liave organized under general laws, it has been 
 held that the constating instruments become an invi<>lable contract 
 not oidy between the state and the corporation, but between the 
 corporation and its members ; and that in the absence of authority 
 conferred at the time, or previously thereto, the corporation can- 
 not change the nature and purposes of the corporation, even with 
 the assent of the legislature subsequently given, without the 
 unanimous assent of the stockholders. The legislature carmot, 
 in such a case, authorize a majority of the corporation to make 
 a contract to consolidate with another corporation, against the will 
 of a minority, as it would impair, in such a case, the ol)ligation of 
 the contract. In relation to this subject and the rights of stock- 
 holders in such cases, in a recent case in the supreme court of 
 Maryland, it was observed : " As stockholders they own the road 
 in common, to be employed for specific uses. Each oXvns a share 
 in the whole, and is to have a proportionate share in its profits. 
 They have invested a portion of their capital in it, and in it alone. 
 They have a right in the road and in every dollar it earns. The 
 directors are their trustees to employ their joint capital in the 
 management of the road, and the road only, to the end that from 
 the investment the stockholders have chosen, they may reap the 
 contemplated profits. And this is the agreement of the stock- 
 holders among themselves. They each contract with the other 
 that the money shall be so employed. What the majority deter- 
 mine within the scope of this mutual contract they each agree to 
 abide by ; but there their mutual contract ends, and no majority, 
 however large, has a right to divert one cent of the joint capital 
 to any purpose not consistent with, and growing out of this origi- 
 nal fundamental joint intention. To sell the road, to abandon 
 the contemplated investment and embark in another scheme, 
 whether entirely different or only more extensive than the origi- 
 nal contemplation, as apparent on the face of the charter, is, it 
 seems to me, clearly contrary to the rights of the individual 
 stockholders." ' 
 
 ' Kean v. Johnson, 9 N. J. Eq. 401.
 
 550 Private Corporations. 
 
 Sec. 389. Same continued. — Tlie doctrine sustained by principle 
 seems to be that the corporate contract and the vested rights of 
 stockholders under the same cannot be affected by legislative au- 
 thority authorizing any change of its -original purposes or business. 
 The stockholders have entered into a contract, and assumed obli- 
 gations, under legislative sanction, to expend money in a manner 
 mutually agreed upon, and an objecting stockholder should not be 
 compelled to engage in a new and different enterprise;' and a 
 dissenting stockholder may prevent consolidation or amalgamation 
 of the corporation of which he is a member with any other, unless 
 such a condition is a part of the contract entered into by him. 
 
 Sec. 390. Difficiilty removed by the exercise of the right of eminent 
 domain. — The difficulty in effecting consolidations of railroad 
 companies under the circumstances indicated in the preceding 
 section has been, in some cases, obviated with corporations having 
 duties to perform to the public, by the exercise of the power of 
 eminent domain. On this subject, generally, Mr. Cooley observes : 
 " Every species of property which the public needs may require, 
 and which government cannot lawfully appropriate under any other 
 right, is subject to be seized and appropriated under the right of 
 eminent domain. Lands for the public ways ; timber, stone and 
 gravel with which to make or improve the public ways ; build- 
 ings standing in the way of contemplated improvements, or which 
 for any other reason it becomes necessary to take, remove or de- 
 stroy for the public good ; streams of water ; corporate franchise ; 
 and generally, it may be said, legal and equitable rights of every 
 description are liable to be thus appropriated." ^ 
 
 ' Black V. Delaware, etc., Canal Co., edy by due course of law, which the 
 
 24 N. J. Eq. 455. See, also, Lauman dissenting stockholder is entitled to, 
 
 V. Lebanon, etc., R. Co., 30 Penn. St. because of the departure or diversion 
 
 46, where LOWRIE, J., in considering of the association from its agreed pur- 
 
 the rights of a dissentient stockholder, poses; and would, besides this, change 
 
 says: " He may object that his co-cor- the essential nature of contracts, 
 
 porators have no power to make a new which even legislative power cannot 
 
 contract for him, and thereby consti- do, and much les.s legislative au- 
 
 tute him a member of a new and a thority." 
 
 different corporation. * * * He See. also, Clearwater v. Meredith, 1 
 
 may object even that the legislature Wall. 25 ; Nugent v. Supervisors, 3 
 
 caunot authorize this, for by so doing Biss. 105; S. C, 19 Wall. 241; McMa- 
 
 they would authorize the destruction han v. Morrison, 16 Ind. 172; Mowrey 
 
 of one private contract, aud the com- v. Ind. & Cin. R. Co.. 4 Biss. 78. 
 pulsory creation of another in its * Cooley on Const. J^im. 526. 
 etead, and would take away the rem-
 
 Amalg^uiation and Consolidation. 551 
 
 Sec. 391. Same continued. — It is claimed that the stock of an in- 
 dividual is just as subject to the claim of eminent domain as any 
 other property; that rail corporations have duties to perform to the 
 public, and that if one unwilling stockholder should be permitted 
 to obstruct the growth and development of every railroad enter- 
 prise in which he may have participated, and hinder their union 
 under one management, when the interests of commerce and of 
 the stockholders and creditors, and public convenience and policy 
 may require it, the government would fail to discharge its duty if 
 it should not exercise this right. On this subject in a recent case 
 in New Jersey, Yax Syckel, J., observed as follows : " In the 
 exercise of the right of eminent domain, the legislature may au- 
 thorize shares in corporations and corporate franchises to be taken 
 for public uses, upon just compensation. The title to this species 
 of property is no more secure against invasion when the public 
 use requires it than is the ownership of real estate. Under this 
 paramount right in the public, subject to which all private prop- 
 erty is held, the franchises of one corporation have been, and may 
 be taken and bestowed upon another. * * * When authority 
 is granted for the consolidation of existing connected routes, the 
 presumption flows, from the fact of the enactment being made, 
 that the legislature decided upon its necessity. This results from 
 the familiar rule that every intendment will be made in support 
 of the constitutionality of the acts of a co-ordinate branch of the 
 government." ' 
 
 But where this doctrine is recognized it is evident that a just 
 compensation should be allowed the party whose stock is taken 
 under such right.^ And it may be affirmed that in all cases where 
 
 ' Black V. Delaware, etc.. Canal Co., public use and benefit is to be sub- 
 
 9 C. E. Gieeu, 453. served. But what is a public benefit 
 
 - Lauman v. Lebanon, etc. , R. Co., or use? 
 30 Penu. St. 42; Fisher v. Evansviile, Ou this subject Mr. Cooley ob- 
 
 etc, R. , 7 Ind. 407; McCray v. June- serves : " We find ourselves at sea, 
 
 tioii R. C«., 9 id. o58 ; State v. Bailej', however, when we undertake to de- 
 
 16 id. 46; Shelbyville, etc., T. Co. v. fine, in the light of the judicial decis- 
 
 Barnes, 43 id. 408; Illinois G. T. R. ions, what constitutes a public use." 
 
 Co. V. Cook, 29 111. 2:37; Lauiuan v. Cooley on Const. Lim. 5ol. And 
 
 Lebanon Valley R. Co., 80 Penn. St. 42. Chancellor Watavortii has said : " If 
 
 It is generally conceded that the the public interest can be in any way 
 
 condemnation of property and inter- promoted by the taking of private 
 
 ests, under this power of eminent do- property, it must rest in the wisdom 
 
 main, is a right which exists in tlie of the legislature to determine wliether 
 
 sovereign power only where some the benefit to the public will be of
 
 552 
 
 Private Corporations. 
 
 a consolidation is effected, unless the power so to do existed at 
 the time the contract between the corporation and the stock- 
 holder was entered into, even tln-ough the exercise of the power 
 of eminent domain, it will relieve a dissenting stockholder from 
 his subscription, and must entitle him to recover the value of his 
 interest in the corporation, as i-t existed at the time of the exer- 
 cise of this power/ 
 
 Sec. 392. Where authority for consolidation exists at the time of the 
 creation of the corporation. — If authority is contained in the charter 
 or general act under which the corporation was organized, or 
 where authority is subsequently given either by a general or a 
 special statute, but before the contract of subscription is entered 
 into, it not only authorizes a consolidation according to the terms 
 and provisions of the act, but precludes any objection on the part 
 of the stockholders to tlie consolidation.' The terms and condi- 
 tions of the consolidation, and the rights and privileges of the 
 
 sufBcieut importance to render it ex- 
 pedient for them to exercise tlie rig:ht 
 of eminent domain, and to authorize 
 an interference with the private rights 
 of individuals for that purpose. It is 
 upon this principle that the legisla- 
 tures of several of the states have 
 authorized the condemnation of lands 
 of individuals for mill sites, when 
 from the nature of the country such 
 mill sites could not be obtained for the 
 accommodation of the inhabitants 
 ■without overflowing the lands thus 
 condemned. Upon the same principle 
 of public benefit, not only the agents 
 of the government, but also individu- 
 als and corporate bodies have been 
 authorized to take private property 
 for the purpose of making public 
 
 'Carlisle v. Terre Haute, etc., R. 
 Co., 6 lud. 316. 
 
 Where a public use or benefit is to 
 be accomplished , a change in the ob- 
 jects and purposes of the corporate 
 enterprise may be enforced by the 
 legislature, provided compen.sation is 
 made for the interest of dissenting 
 stockholders. Boston Water Power Co. 
 V. Boston, etc., R. Co., 23 Pick 360; 
 Springfield v. Connecticut River R. Co., 
 4 Cush. 63 ; Central Bridge Co. v. City 
 of Lowell, 4 Gray, 474 ; West River 
 Bridge v. Dix, 6 How. 507; Richmond 
 
 highways, turnpike-roads and canals, 
 of erecting and constructing wharves 
 and basins, of establishing ferries, of 
 draining swamps and marshes, and of 
 bringing water to cities and villages. 
 In all such cases the object of the 
 legislative grant of power is the 
 public advantage expected from the 
 contemplated improvement, whether 
 such improvement is to be effected 
 directly by the agents of the govern- 
 ment or through the medium of cor- 
 porate bodies or of individual enter- 
 prise." Beekman v. Saratoga & Sche- 
 nectady R. Co., 3 Paige, 73. See, also, 
 Cooley's Const. Lim. 532 et seq. ; also, 
 on the subject of public interest in 
 case of eminent domain , post, § 441 
 et seq. 
 
 R. Co. V. Louisa R. Co., 13 id. 71 ; 
 White River Turnp. Co. v. Vermont 
 Cent. R. Co., 21 Vt. 590; Piscataqua 
 Bridge v. New Hampshire Bridge, 7 
 N. H. 35; Crosby v. Hanover, 36 id. 
 404 ; Tide Water Canal Co. v. Coster, 
 3 C. E. Green, 521; Matter of Drain- 
 age, 6 Vroom, 497 ; Black v. Delaware, 
 etc., Co., 9 C. E. Green, 455 ; Chesa- 
 peake, etc., R. Co. V. Baltimore, etc., 
 R. Co., 4 Gill & J. 1 ; Newcastle R. Co. 
 V. Peru, etc., R. Co., 3 Ind. 464 ; En- 
 field Bridge Co. v. Hartford, etc., R. 
 Co., 17 Conn. 40.
 
 AmALGAMA^TION and CoNSOLTn.VTION. 
 
 553 
 
 stocklioldcr in such cases may depend upon the provisions of the 
 statute ur other constating instruments. Tliese may provide for 
 the concnrrence requisite to consummate a consolidation, either by 
 the corporators or the directors, and what the rights of stock- 
 holders shall be in that event.' 
 
 Sec. 393. Riile as to the concuirrence required Tvhere no provision is 
 made therefor. — If authority to consoUdatc is given, and no express 
 provision made as to the mode or the concurrence requisite to 
 accomjilish this purpose, it could undoubtedly be accomplished by 
 the corporate body in the usual way of corporate action, and in 
 such a case the concurrence of a majority of the members would 
 be sufficient to accomplish the purpose.'' 
 
 ' Tlie general rule, as well as the 
 distinction referred to, Las been illus- 
 trated by the opinion of the supreme 
 court of the United States in the case 
 of Nugent v. Supervisors, 19 Wall. 
 241, in which an attempt was made to 
 avoid a subscription on the part of a 
 county in the state of Illinois to the 
 stock of a corporation, on the ground 
 of a subsequent consolidation of such 
 company with another. But an au- 
 thority to consolidate existed at the 
 time of the creation of the company, 
 by an act of that state approved Feb. 
 28, 1854. The court say : " It must be 
 conceded as a general rule that a sub- 
 scriber to the stock of a railroad com- 
 pany is released from obligation to 
 pay his subscription by a fundamental 
 alteration of the charter. The reason 
 of the rule is evident. A subscription 
 is always presumed to have been 
 made in view of the main design of 
 the corporation, and of the arrange- 
 ments made for its accomplisiiment. 
 A radical change in the organieation 
 or purposes of the company may, 
 therefore, take away the motive which 
 induced the subscription, as well as 
 affect injuriously the consideration of 
 the contract. For this reason it is 
 held that such a change exonerates a 
 subscriber from his liability for his 
 subscription ; or, if the contract has 
 been executed, justifies a stockholder 
 in resorting to a court of equity to re- 
 strain a company from applying the 
 funds of the original organization to 
 any project not contemplated by it. 
 But while this is true as a general 
 
 70 
 
 rule, it has no application to a case 
 like the present. The consolidation 
 
 * * * was no departure from its 
 original design. The general statute 
 of the state * * * authorized all 
 railroad companies, then organized or 
 thereafter to be organized, to consoli- 
 date tlieir property and stock with 
 each other, and with companies out of 
 the state, whenever their lines connect 
 with the lines of such companies out 
 of the state * * * The American 
 authorities uniformly assert that the 
 subscriber for stock is released from 
 his subscriptions by a subsequent alter- 
 ation of the organization or purposes 
 of the company, only, when stich alter- 
 ation is both fundamental and not pro- 
 vided for or contemplated by either 
 the charter itself or the general laws 
 of the state." 
 
 See, also, Hanna v. Cincinnati, etc., 
 R. Co., 20 Ind. 30, where it was held 
 that, as one of the purposes for which 
 the corporation was organized was to 
 consolidate, it would be presumed 
 that the subscriber might have reason- 
 ably anticipated such a result, and he 
 was held bound by his subscription. 
 See, also, Hamilton v. Hobart, 2 (tray, 
 543 ; Gardner v. Hamilton Ins. Co., 33 
 N. Y. 421 ; Sparrow v. Evansville, 
 etc., K. Co., 7 Ind. 369 ; Bish v. John- 
 son, 21 id. 299 ; Mowrey v. Indiana, 
 etc., R. Co , 4 Biss. 78; Blatchford v. 
 Ross, 54 Barb. 42. 
 
 2 See Black V. Delaware, etc., Canal 
 Co., 7 C. E. Green, 130 ; Zabriskie v. 
 Hackeusack & N.Y. R. Co., 3 id. 178; 
 McVicker v. Ross, 55 Barb. 347. •
 
 554 
 
 Private Coeporations. 
 
 Sec. 394, The powers of the new corporation, created by consoli- 
 dation. — By consolidation the old companies cease and a new one 
 is created and usnally the property and the rights and liabilities 
 of each pass to the new company.' But it is evident that the 
 franchises, that would pass to the new company, would be only 
 such as would be necessary for the exercise of the powers and 
 privileges conferred npon it by the new organization.^ 
 
 ' Miller v. Lancaster, 5 Cold. 514 ; 
 Paine v. Lake Erie R. Co., 31 Ind. 
 283 ; Columbus, etc., R. Co. v. Powell, 
 40 id. 37. 
 
 ' As to effect of exemption from tax- 
 ation of one of the old companies, see 
 Philadelphia, etc., R. Co. v. Maryland, 
 10 How. (U. S.) 376; Tomlinsou v. 
 Branch, 15 Wall. 460. See, also, in 
 reference to special rights enjoyed by 
 cue of the original companies, Shaw 
 V. Norfolk, 16 Gray, 407 , Bishop v. 
 Brainerd, 28 Conn. 22!) ; Fisher v. 
 New York C. R. Co., 40 N. Y. 644; 
 Robertson v. Ryckford, 21 111. 457; 
 Commonwealth v. Atlantic, etc., R. 
 Co., 53 Penu. St. 9 ; New Jersey M. 
 R. Co. V. Strait, 35 N. J. L. 322. 
 
 Where two corporations chartered 
 before the passage of a general law of 
 the state reserving to the legislature 
 the right to alter or repeal all corpo- 
 rate charters, were consolidated by 
 virtue of an act passed after such law 
 took effect, it was held that the old 
 corporations were dissolved, and that 
 the new one formed by the consoli- 
 dation came into existence subject to 
 the general law. Shields v. Ohio, 95 
 U. S. 319. But where the corporations 
 were chartered after such a law ex- 
 isted, or where their charters authorize 
 consolidation, such consolidation does 
 not necessarily work a dissolution of 
 both, and the creation of a new corpo- 
 ration. The effect of the change de- 
 pends upon the legislative intent 
 manifested in the statute under which 
 the consolidation takes place. Central 
 R. R., etc., Co. V. Georgia, 92 U. S. 
 665 ; South-western R. R. Co. v. 
 Georgia, id. 676, note ; Muller v. 
 Dows, 94 id. 444. 
 
 Where a new corporation was 
 formed out of two or more previously 
 existing corporations, and, by the act, 
 was to " have the powers, privileges, 
 .and immunities possessed by each of 
 
 the corporations" united in it, and 
 these had somewhat different powers, 
 etc., the new corporation was adjudged 
 to have only the privileges, powers, 
 and immunities which each of the 
 previous corporations possessed. 
 
 The new corporation cannot claim 
 an immunity from taxation enjoyed by 
 the old companies, or either of them, 
 if it was dependent on conditions 
 which the new corporation is not able 
 to perform. State v. Maine Central 
 R. R. Co.. 66 Me. 488. 
 
 Generally speaking, however, when 
 a new corporation is formed by an 
 amalgamation, under the authority of 
 the state, of two or more distinct cor- 
 porations into one, the new body suc- 
 ceeds to all the rights and faculties of 
 the several components, and is sub- 
 ject to all the conditions and duties 
 imposed by the law of their creation, 
 except so far as the contrary may be 
 provided by the act. Zimmer v. State, 
 30 Ark. 677; Chicago, etc., R. R. Co. 
 V. MotEt, 75 111. 524. 
 
 Upon a legal consolidation of two 
 corporations the new one succeeds to 
 all the rights of the old. Thus the 
 act of the legislature of Vermont con- 
 solidating the University of Vermont 
 and the Vermont Agricultural College, 
 which were previously independent 
 corpcjrations, into a new corporation 
 under the name of The University of 
 Vermont and State Agricultural Col- 
 lege, passes to the new corporation all 
 the property, in the most extensive 
 sense, of the university, and in ex- 
 press terms gives the new corporation 
 the right to maintain actions in its 
 own name in relation to the real 
 property vested in it by the uni )n, but 
 is silent as to the right to Gue upon 
 choses in action. Held, nevertheless, 
 that as to all choses in r.^ction which 
 were transferred to the new cori)ora- 
 tiou, it was substituted for the original
 
 AmA-LGAMATION and CoNSOLroATION. 555 
 
 In a case where there was a lawful consolidation of two railroad 
 companies, under the laws of Indiana, and a suit was brought 
 against the consolidated company for an injury done by one of 
 the original companies, the supreme court of that state said: 
 " By the consolidation both the old companies ceased to exist 
 separately, and all their effects and franchises were vested in the 
 new company. The two corporations became merged in one. 
 We cannot imagine how the Indianapolis and Cincinnati Railroad 
 Company [the company originally liable] could afterward be 
 sued. Upon whom would process be served ? It ceased to have 
 any officers or agents. It ceased to be a separate legal entity. 
 Instead of two there was now but one corporation, made up of 
 the mingled elements of the two pre-existing companies, so com- 
 bined and merged that neither could be separately identified or 
 brought into court. But what are the rights of creditors and per- 
 sons upon whom torts have been committed by the vanished cor- 
 porations ? A dead man may have an administrator to represent 
 his estate and answer to suits, but a corporation, lawfully disap- 
 pearing thus, has no estate to be administered. Its assets must 
 have vested in the new consolidated corporation. Must lawful 
 claims be lost then ? That result cannot follow. The legislature 
 has chosen to make no provision upon the subject, and the in- 
 dustry of counsel as well as our own examination of the books has 
 failed to discover any direct authority upon the question before 
 us. The analogies of the law too afford little aid in its solution. 
 
 * * * Giving it, however, the best consideration we were 
 capable, under the circumstances, we have reached the conclusion 
 
 party without prejudice to tlie other contrary, whenever one corporation 
 
 party to the claim transferred, and goes entirely out of existence, by be- 
 
 liad the right to sue on such claims in iug annexed to or merged in another, 
 
 its own name. University of Vermont, the subsisting corporation will be 
 
 etc., V. Baxter, 43 Vt. 99. entitled to all the property, and 
 
 A consolidated corporation, formed answerable for all the liabilities of the 
 
 under an act which vested in the new extinguished one. Tliompson v. Ab- 
 
 corporation all the powers, rights, bott, 61 Mo. 176. 
 
 franchises, etc., of tlie old corpora- But when two corporations unite 
 tions, was held entitled, under the cir- their property, and form a new corpo- 
 cumstauces, to use a patented inven- ration, in which no money is paid by 
 tiou wiiich both the old corporations either party, the new corporation can- 
 had been licensed to use. Lightner v. not claim the position of a bond fide 
 Boston, etc., R. R. Co., 1 Low. (U. S. purchaser for value, but takes the 
 C. C ) 338. property subject to any existing liens. 
 
 The rule seems to be that in the ab- The Key City, 14 Wall. 653. 
 eence of any express provision to the
 
 556 
 
 Pkivatk Cokpokations. 
 
 that, for the purposes of answering for the liabilities of the con- 
 stituent corporatious, the consolidated company should be deemed 
 to be merely the same as each of its constituents, their existence 
 continued in it under the new form and name, their liabilities 
 still existing as before, and capable of enforcement against the 
 new company in the same way as if no change had occurred in 
 its or<i:anization or name."^ 
 
 ' Indianapolis C. & L. R. Co. v. 
 
 Jones, 29 lud. 4G5. Generally wliere 
 two corporations consolidate the new 
 corporation assumes all the debts and 
 liabilities of the old as well as all its 
 rights, and may be sued thereon, or 
 may enforce the rights of the old one. 
 Miller v. Lancaster, 5 Caldw, 514. 
 Thus in Bishop v. Banks, 28 Conn. 
 2d9, the New York and Boston Rail- 
 road Company, a cori)oratiou chartered 
 by the legislature of Connecticut, be- 
 came consolidated, under the same 
 name, with a railroad corporation of 
 the state of Rhode Island, the charter 
 of the latter corporation specially 
 authorizing such union, and that of 
 the former authorizing the company 
 " to connect and make joint-stock 
 common interest with any other rail- 
 road company." Tlie charter of the 
 Connecticut corporation was subject to 
 amendment by the legislature, which 
 afterward passed a resolution ratify- 
 ing and confirming the consolidation. 
 By the articles of union, the property 
 of the original corporatious was trans- 
 ferred to and vested in the new corpo- 
 ration, which was to pay the debts of 
 the old corporations. B. was an origi- 
 nal subscriber to the stock of the Con- 
 necticut corporation. A creditor of 
 that corporation , whose claim accrued 
 after the consolidation, factorized B. 
 as the debtor of the Connecticut cor- 
 poration. 
 
 Upon a scire facias afterward 
 brought by him against B., held (1) 
 that while it was very questli^nable 
 whether the charter of the Connecti- 
 cut corporation would have authorized 
 such a consolidation, yet that the 
 transaction was validated by the ratify- 
 ing act of the legislature, which was 
 to be considered as an amendment of 
 the charter as much as if it had been 
 expressly so declared. 
 
 (2) That the new corporation, being 
 legally established and having capac- 
 
 ity to receive an assignment of the 
 property of the original corporation, 
 and such assignment having been 
 made on valuable consideration, the 
 indebtedness of B. was legally trans- 
 ferred to, and became vested in, the 
 new corporation, and he was, there- 
 fore, no longer indebted to the original 
 corporation. 
 
 (8) Tbat such transfer was not in- 
 valid against the claim of the plaintiff 
 as a creditor of the original corpora- 
 tion, since his claim accrued after the 
 transfer, and, even if it had accrued 
 previously, yet the original corpora- 
 tion, in the absence of any fraudulent 
 intent, had a right, for a valid con- 
 sideration, to dispose of its property. 
 In Chase v. Vanderbilt, 62 N. Y. 
 307, it was held that where two or 
 more railroad corporations consoli- 
 dated and the new corporation assumed 
 the obligation of the old one, the 
 directors of the new corporation are 
 not necessary or even proper ])arties 
 to an action brought by the holder of 
 preferred and guaranteed stock of one 
 of the old corporations to enforce an 
 alleged contract made by it to pay 
 dividends upon such stock, but that if 
 the plaiutiti'had cause of action at all, 
 it was against the new corporation 
 alone. See, also, lure National, etc., 
 Assurance Co., L. R., 6 Ch.893. 
 
 But the question as to whether the 
 old corporation is absolved from 
 luibility depends largely upon the 
 provisions of the statute under which 
 the consolidation was effected. If the 
 act provides that neither corporation 
 by reason of the consolidation shall 
 thereby be relieved from any liability 
 then existing, the new corporation 
 does not become liable directly to tlie 
 creditors of the old for such liabili- 
 ties. Shaw V. Norfolk Co. R. R. Co., 
 16 Gray, 407. In a Georgia case, 
 Selma, etc., R. R. Co. v. Harbin, 40 
 Qa. 708, while an action was pending
 
 Amalgamation and Consolidation. 
 
 557 
 
 OEC. 395. Doctrine as to the rights of creditors of the consolidating 
 companies. — It is a general doctrine tlxat, where tiie power to con- 
 solidate exists, the right so to do, in accordance with the mode 
 
 against a corporation, it was consolida- 
 ted with another, the act providing 
 that each of the companies was to 
 continue liable for its liabilities iu- 
 curred before the consolidation, and 
 it was held that it was improper for 
 the plaiulifl: in the suit to take a judg- 
 ment agaiust the cousolidated com- 
 pany in Its new name, without proper 
 steps to bring the new company, as 
 such, before the court, and that a« 
 judgment so taken was void. 
 
 A section of an amalgamation act 
 provided that the conveyances, con- 
 tracts, bonds, etc., made or entered 
 into by the dissolved railway com- 
 panies should remain valid in favor of 
 the new company. Held, that under 
 this provision, a person who vvas 
 surety by bond to one of the com- 
 panies before amalgamation, for the 
 conduct of an employee, was liable to 
 the new company for breaches of tlie 
 bond committed after the amalgama- 
 tion. Eastern Union Railway Co. v. 
 Cochrane, 17 Jur, 1103. Where a 
 clerk to a railway company had exe- 
 cuted a bond, with surety, for the 
 faithful discharge of his duty to one 
 company, which was subsequently 
 amalgamated, by act of parliament, 
 with another company, saving to the 
 consolidated compauy all remedies 
 upon contracts to either, held, that 
 an action would lie upon such bond 
 for a breach committed before the 
 amalgamation, notwithstanding the 
 new company formed by the consolida- 
 tion possessed additional lines of road. 
 Loudon, etc., Railway Co. v. Goodwin, 
 SExch. o20, 7o(j. Defendant executed 
 a note to a corporation, containing an 
 agreement that " no change in the 
 name, character, or management" of 
 the corporation should affect the 
 liability of the maker. The plaintitf 
 corporation changed its name before 
 the action which was brought in its 
 new name, and the complaint stated 
 this fact, and that the note was the 
 plaintiffs property. Held, that a 
 good cause of action was slated, and 
 that a demurrer could not be sustained. 
 Cumberland College v. Ish, 22 Cal. 
 641 . Before the new corporation can 
 
 levy any assessments upon the stock- 
 holders of the old corporation, tlie 
 consolidation must be fully perfected 
 in every detail, as required by the 
 statute. Peninsular Railway Co. v. 
 Thorp, 28 Mich. oUG ; Mansheld, etc., 
 li. R. Co. v. Dunker, 80 id. 12-1. and it 
 seems an election of directors of the 
 new corporation must have been held. 
 Mansdeld, etc., R. R. Co. v. Dunker, 
 ante; Midland Great Western Rail- 
 way V. Leech, 8 H. L. Cas. 872. 
 
 Where the preliminary contracts by 
 which two railway companies would 
 necessarily interfere with each other's 
 business were set on foot, each pro- 
 vided, that tbe managing committees, 
 or directors, might " demise or sell the 
 undertaking, or any part thereof, or 
 amalgamate the same or any part 
 thereof, with any other railway, or 
 railways," and the directors of the two 
 companies made, and carried into 
 ehect, an amalgamation of the two 
 companies, held, that the amalga- 
 mation of the two companies came 
 fairly within the preliminary con- 
 tracts, and that an action for calls 
 might be maintained against any 
 shareholder in either compauy, who 
 had executed the preliminary con- 
 tracts. Cork & Youghal Railway Co. 
 V. Paterson, 18 C. B. 414. Two com- 
 panies competed for tender of leases 
 of railways in France. Each proposed 
 that half the capital should be sub- 
 scribed for in England, and English 
 committees were appointed. Neither 
 company complied with the require- 
 ments of the French government as 
 to deposits ; and they were afterward 
 united, and it was agreed that the 
 then expenses of each committee 
 should be separately paid by that 
 body. Being still unable to make up 
 the full amount of subscription, a 
 union was negotiated between the 
 united companies and a third com- 
 pany, and subsequently an agreement 
 was formed. The original united 
 compauy then determined to close 
 their affairs, and meetings were held, 
 at which (although the mode of the 
 appropriation was variously repre- 
 sented) certain shares were appro.
 
 558 Private Corporations. 
 
 authorized by law, cannot be defeated by the creditors of the con- 
 solidating cor[)orations. 
 
 And the general rule is, that the rights of creditors against the 
 old companies revive against the new one, created by the consoli- 
 dation, as we have just noticed, and that it becomes substituted 
 for the former ones. Provision is perhaps generally made by 
 statute or by articles of agreement, as provided by law, for the 
 payment of the creditors and the satisfaction of the obligations of 
 the consolidating companies ; ' and sometimes these provide that 
 such companies shall continue for the purpose of adjusting their 
 outstanding obligations, including their torts.' But even where no 
 such provision is made, but the consolidation is lawfully consum- 
 mated, the new company has been held liable to all obligations of 
 the former ones, from the very necessity of the case, and to pre- 
 vent the failure of justice;^ or as the trustee of the debtor cor- 
 poration, on account of having its funds, which must be held for 
 the payment of its debts, and which are properly chargeable in 
 wliosesoever hands they may be, except a horiajide holder for value, 
 with the satisfaction of the same.* 
 
 Sec. 39o. Consolidation of corporations organized in different states. 
 
 — Questions as to the status of the consolidated company have 
 
 priated and given to the cliairman general railroad law of Indiana of 
 of one of the English committees, who 11^53, which law was by its terms liable 
 sold them at a premium. Some mem- to " be amended or repealed at tlie 
 hers of the English committee of the discretion of the legislature." The de- 
 other of the two original companies fendant subscribed for stock in this 
 filed their bill, praying an account of company. Subsequently, an act au- 
 the produce of those shares, and for a thorizing the consolidation of railroad 
 division among those entitled after companies was passed ; and in pur- 
 payment of all expenses. Several ac- suance thereof the corporation in 
 counts were given of what passed at question consolidated with another, 
 the meeting at which the appropria- It appeared, from its articles of asso- 
 tion was made. The court, assuming ciation, that such consolidation was 
 that the persons present had power to merely carrying out the purpose of its 
 do what they did (there being no fraud organization. Held, that the defend- 
 proved), dismissed the bill. Rossmore ant was not exonerated from his sub- 
 V. Mo watt, 15 Jur. 238. A railroad scription. Hanna v. Cincinnati & 
 corporation was organized under the Fort Wayne R. R. Co., 20 Ind. 30. 
 
 ' Prouty V. Lake Shore, etc.. R. Co., R. Co., 31 id. 283 ; Columbus, etc., R. 
 
 52 N. Y. 3G3. Co. v. Powell, 40 id. 37. 
 
 2 Selma, etc., R. Co. v. Harbin, 40 ■'Eaton & Hamilton R. Co. v. Hunt, 
 
 Ga. 70(1. 20 Ind. 463; Powell v. North Mis- 
 
 * Indianapolis, etc., R Co. v. Jones, eouri R. Co., 42 Mo. 63. 
 29 lud. 465 ; Paine v. Lake Erie, etc..
 
 Amalgamation and CoNsoLroATioN. 559 
 
 been raised principall}^ in reference to its domicile and the juris- 
 diction of the federal courts in cases in which it is a party. 
 The general doctrine is, that for the purpose of conferring juris- 
 diction, it may be sued in the state where its principal office and 
 its records are kept.^ We have already considered the character 
 of corporations as citizens, and the question as to their domi- 
 cile, under the provision of the constitution of the United States, 
 and the acts of congress relating to the judicial powers and juris- 
 diction of its courts, and the removal of causes from the state to 
 the federal courts.^ In reference to this question it is held, that 
 in case of the lawful consolidation of corporations created in dif- 
 ferent states, " the jurisdictional eifect of the existence of such a 
 corporation, as regards the federal courts, is the same as that of a 
 copartnership of individual citizens residing in different states." ^ 
 
 Sec. 397. Same continued. — Where there was a consolidation of 
 the stock of a railroad company created in Wisconsin, with one 
 in Illinois, but in so consolidating they failed to pursue the terms 
 of their charters, but the contract of consolidation was subse- 
 quently confirmed by an act of the legislatui'e of the state of Il- 
 linois, it was held that it was recognized as a corporation of that 
 state, and that a mortgage subsequently executed by the directors 
 in the name of the consolidated company, conveying the property 
 of the corporation in the state of Illinois, was valid as a mortgage 
 of the Illinois corporation. 
 
 In reference to the effect of the consolidation in this case, Mr. 
 Justice Lawrence remarks : " While it created a community of 
 stock and of interest between the two companies, it did not con- 
 vert them into one company in the same way and to the same 
 degree that might follow a consolidation of two companies within 
 the same state. Neither Illinois nor Wisconsin, in authorizing 
 consolidation, could have intended to abandon all jurisdiction 
 over its own corporation created by itself. Indeed, neither state 
 
 ' Culbertson v. Wabash Nav. Co., 4 135 ; Edwards v. Union Bank, 1 Fla. 
 
 McLean, 544 ; Jenkins v. California 136 ; Cincinnati, etc., R. Co. v. Knowl- 
 
 Sla^e Co., 23 Cal. 537. ton, 11 Ind. 339 ; Thorn v. Central R. 
 
 The same rules generally prevail in Co., 26 N. J. L. 121. 
 
 reference to tlie venue of suits as in '■' See ante, chap. 13. 
 
 case of natural persons. See Central ^ Railroad Company v. Harris, 12 
 
 Bank of Georgia V. Gibson, 11 Ga. 453 ; Wall. 65. See, also, Railroad Co. v. 
 
 Speer v. Atlanta, etc., R. Co., 30 id. Whitton, 18 id. 270.
 
 560 
 
 Pkivate Corporations. 
 
 could take jurisdiction over tlie property or proceedings of the 
 corporation beyond its own limits. * * * A corporation can- 
 not be created by the co-operating legislation of two states so as 
 to be the same legal identity in both states ; and where two 
 states have each created a corporation with the same name, for 
 the same purposes, and composed of the same natural persons, it 
 must, nevertheless, be considered as a distinct corporation in each 
 state." ' 
 
 1 Racine, etc., R. Co. v. Farmers' 
 Loan & T. Co., 49 111. 331 ; McGregor 
 V. Erie R. Co., 6 Vroom, 115. See, 
 also, State v. Metz, 3 id. 199 ; Richard- 
 son V. Vermont, etc., R. Co., 44 Vt. 
 613 ; Attorney-General v. Boston, etc., 
 R. Co., 109 Mass. 99 ; Sprague v. Hart- 
 ford, etc., R. Co., 5 R. I. 233 ; Alle- 
 gheny Co. V. Cleveland, etc., R. Co., 51 
 Penn. St. 228 ; Cleveland, etc., R. Co. v. 
 Speer, 56 id. 325 ; Commonwealth v. 
 Pittsburgh, etc., R. Co., 58 id. 26 ; State 
 
 V. Northern Cent. R. Co., 18 Md. 193 ; 
 Baltimore, etc., R. Co. v. Glenn, 28 id. 
 287 ; Qoshoen v. Supervisors, 1 VV. Va. 
 308; Baltimore, etc., R. Co. v. Super- 
 visors, 3 id. 319 : Farmers' Bank v. 
 Gettinger, 4 id. 305 ; Baltimore, etc., 
 R. Co. V. Gallahue, 12 Gratt. 658 ; As- 
 pinwall V. Ohio, etc., R., 20 Ind 492 ; 
 Union,, etc., R. Co. v. East Tenn. R. 
 Co., 14 Qa. 327 ; Attorney-General v. 
 Railroad, 35 Wis. 425.
 
 Eminent Domain. 561 
 
 CHAPTER XVII. 
 
 EMINENT DOMAIN. 
 
 Sec. 398. What the right of eminent domain is. 
 
 Sec. 399. How the right can be enjoyed. 
 
 Sec. 400. The authority to grant the right is in the legislature. 
 
 Sec. 401. What are public uses which justify the exercise of the right. 
 
 Sec. 402. Who is to determine the question of public use. 
 
 Sec. 403. Limit of the right. 
 
 Sec. 404. Who is to determine in reference to the extent, amount or quan- 
 tity of property to be taken. 
 
 Sec. 405. Same continued. 
 
 Sec. 406. Where the corporation takes more land than is required. 
 
 Sec. 407. Compensation. 
 
 Sec. 408. Same continued. 
 
 Sec. 409. Damages — mode of estimating. 
 
 Sec. 410. Elements of damages which may be considered. 
 
 Sec. 411. Lands injuriously affected but not taken. 
 
 Sec. 398. What the right of eminent domain is. — The right of 
 eminent domain, as applicable to private corporations, is the 
 power which exists in the state as the sovereign authority, to 
 appropriate the property of individuals for the public benefit, 
 when the public safety, convenience, or welfare may require it, 
 and on due compensation being rendered therefor to the owner. 
 
 The doctrine is sometimes claimed to rest upon an implied res- 
 ervation in the sovereign authority, from which, so far as relates 
 to real estate, the individual rights are derived, to resume the 
 rights thus conferred in the contingencies referred to. And it 
 consists, not only in the authority to resume the whole estate, but 
 any right or interest therein. It is the rightful authoritv, which 
 exists in every sovereignty to control and regulate those rights of 
 a public nature which pertain to its citizens in common, and to 
 appropriate and control individual property as the public safety, 
 necessity, convenience or welfare may demand.' 
 
 > The right of taking private Paine (U. S. C. C), 688 ; and it is a 
 property for public purposes is in- necessary incident of every govern- 
 separably attached to national empire ment, and the necessity for the exer- 
 and sovereignty ; Jones v. Walker, 3 cise of the right is a matter of which. 
 
 71
 
 562 
 
 Private Corporations. 
 
 The constitution of tlie TJnited States and of the various states 
 inhibits the taking of private property for public purposes, 
 under the right of eminent domain, without just compensation ; ' 
 but the riglit of the sovereign to appropriate individual property, 
 under the circumstances referred to, seems to be generally recog- 
 nized, and to be acknowledged in the jurisprudence of all civil- 
 ized people." 
 
 This right of eminent domain, as we have seen, is not limited 
 to the real estate of individuals and natural persons, but may 
 extend to and be exercised in reference even to the property and 
 
 tlie government must judge; the only 
 restraint upon the exercise of the right 
 being, that just compensation must be 
 made for property taken. Bonaparte v. 
 Camden, etc., H. R. Co., Bald. (U. S. 
 C. C.) 205, 220; Cooper v. Williams, 4 
 Ohio, 253; Spring v. Russell, 7 Me. 273; 
 M'Masters v. Commonwealth, 3 Watts 
 (Penn.), 292. 294; Henry v. Underwood. 
 1 Dana (Ky.). 245, 247; O'Hara v. 
 Lexington, etc., R. R. Co., id. 232; 
 Perrv v. Wilson, 7 Mass. 393, 395; 
 De Varaigne v. Fox. 2 Blatchf. 95 ; 
 Parkham v. Decatur County. 9 Ga. 
 341; Donnaher v. State, 10 Miss. 649 ; 
 Brown v. Beatty, 34 Miss. 227; Coster 
 V. Tide Water Co., 18 N. J. Eq. 54; 
 Varick v. Smith, 5 Paige (N. Y.). 137; 
 Harris v. Thompson, 9 Barb. (N. Y.) 
 305. But, as previously intimated, 
 even the state itself cannot exercise 
 or delegate this power without making 
 just compensation for the property 
 taken. Hall v. Boyd, 14Gra. 1 ; Royston v. 
 Royston, 21 id. 161; Nesbitt v. Trumbo, 
 39 111.110; Bruning V. New Orleans, 
 etc.. Banking Co., 12 La. Ann. 541 ; 
 Hoye V. Swan, 5 Md. 237; Dickey v. 
 Teimison, 27 Mo. 373 ; Concord R. R. 
 
 V. Greely, 17 N. H. 47 ; Dunham v, 
 Williams, 36 Barb. (N. Y.) 136; Grim 
 V. Wissenberg S. Dist., 57 Penn. St, 
 433. 
 
 The provision in the constitution, 
 declaring that " private property 
 shall npt be taken for public uses 
 without just compensation," does not 
 prohibit the legislature from author- 
 izing a temporary exclusive occupation 
 of the land of an individual, as the in- 
 cipient proceeding to the acquisition of 
 a title to it, or to an easement in it for 
 a public use, although such occupa- 
 tion may be more or less injurious to 
 the owner. But suph occupation 
 becomes unlawful unless the title 
 or the easement is acquired 
 within a reasonable time ; otherwise 
 the occupiers become tresjjassers ab 
 initio. In the case of temporary oc- 
 cupation by a railroad company, two 
 years was held, under the circumstan- 
 ces of the case, not an unreasonable 
 time. Nichols v. Somerset, etc., R. 
 R. Co., 43 Me. 356; Pollard's Lessees 
 V. Hagen, 3 How. (U. S.) 223; Beek- 
 man v. Saratoga, etc., R. Co., 3 Paige, 
 45. 
 
 1 Amend. Const. U. S., art. 5; Vattel, 
 B. 1, chap. 20, ^ 244. 
 
 '^ Field on Dam., § 845. See, also. 
 Brown v. Beatty, 34 Miss. 227 ; Taylor 
 v. Porter, 4 Hill, 143; Hogebocm, J., 
 in People v. Mayor, etc., N. Y., 32 
 Barb. 113; Heyward v. Mayor, etc.,N. 
 Y..7 N. Y. 314. In the case of Beek- 
 man v. Saratoga, etc., R. Co., siijjra, 
 Chancellor Walworth observes: 
 " Notwithstanding the grant to indi- 
 viduals, the highest and most exact 
 idea of property remains in the govern- 
 
 ment, or in the aggregate body of the 
 people in their sovereign capacity ; 
 and they have a right to resume the 
 possession of the property in the man- 
 ner directed by the constitution and 
 laws of the state, whenever the public 
 interest requires it. This right of re- 
 sumption may be exercised not only 
 where the safety, but also where the 
 interest or even the expediency of the 
 state is concerned, or where the land 
 of the individual is wanted for a road, 
 canal or other public improvement."
 
 Eminent Domain. 
 
 ;03 
 
 Hg-lits, francliisGS and easements of corporations, liowever exclu- 
 sive the grant may be, provided, however, that in all cases, ade- 
 quate compensation Le Urst made therefor.^ 
 
 1 Piscataqua Bridge v. N. II. Bridge, 
 
 7 N. H. y5 ; Northern K. Co, v. C. K. 
 Co., 7 Fost. 188 ; State v. Canterbury, 
 
 8 id. 195 ; Crosby v. Hanover, oG N. 
 H. 404 ; Cooler on Const. Lim. 526 
 and notes. In relation to the condem- 
 nation of the rights of private corpo- 
 rations acquired under and by virtue 
 of the charter and contract with the 
 state, see West River Bridge Co. v. 
 Dix. GIIow. 507; S. C, 10 Vt. 446; 
 Richmond R. Co. v. Louisiana R. Co., 
 18 id. 71 ; Binghamton Bridge case, 3 
 Wall. 51; Boston & Lowell li. Co. v. 
 Salem & Lowell R. Co., 2 Gray, 1 ; 
 Bridge Co. v. Lowell, 4 id. 474 ; Bos- 
 ton Water Power Co. v. Boston & 
 Wor. R. Co., 23 Pick. 360; Springfield 
 V. Connecticut R. Co., 17 Coim. 40; id. 
 454; 1)1 re Kerr, 42 Barb. 11!) ; Bridge 
 Co. V. Hoboken Co., 2 Beas. 81; Shorter 
 V. Smith, 9 Ga. 529 ; Railroad Co, v. 
 Kenney, 39 Ala. (N. S.) 307 ; Califor- 
 nia Telegraph Co. v. Alta Telegraph 
 Co., 22 Cal. 393 ; Illinois & Mich. C. 
 Co. V. Chicago & R. I. R. Co., 14 111. 
 321. In the West River Bridge case, 
 supra, Daniel, J., says: *' No state, 
 it is declared, shall pass a law impair- 
 ing the obligation of contracts ; yet, 
 with this concession constantly 
 yielded, it cannot be justly disputed 
 that in every political sovereign com- 
 munity there inheres necessarily the 
 right and the duty of guarding its own 
 existence, and of protecting and pro- 
 moting the interests and welfare of 
 the community at large. This power 
 and this duty are to be exerted not 
 only in the highest acts of sovereignty 
 and in the external relations of gov- 
 ernment ; they reach and comprehend, 
 likewise, the interior polity and rela- 
 tions of social life, which should 
 be regulated with reference to 
 the advantage of the whole society. 
 This power, denominated the 
 eminent domain of the state, is, 
 as its name imports, paramount to 
 all private rights vested under the 
 government, and these last are, by 
 necessary implication, held in sub- 
 ordination to this power, and must 
 yield in every instance to its proper ex- 
 ercise. The constitution of the United 
 
 States, although adopted by the sover- 
 eign states of this union, and proclaimed 
 in its own language to be the supreme 
 law for their government, can, by no 
 rational interi)retation, be brought to 
 conflict with this attribute in the 
 states ; there is no express delegatir)a 
 of it l)y the constitution, and it would 
 imply an incredible fatuity in the 
 stales to ascribe to them the intention 
 to relinquish the power of self-gov- 
 ernment and self-preservation. A 
 correct view of this matter must de- 
 monstrate, moreover, that the right of 
 eminent domain in government in no- 
 wise interferes with the inviolability 
 of contracts ; that the most sanctimon- 
 ious regard for the one is perfectly 
 consistent with the possession and ex- 
 ercise of the other. 
 
 " Under every established govern- 
 ment, the tenure of property is derived 
 mediately or immediately from the 
 sovereign power of the political body 
 organized in such mode or exerted in 
 such way as the community or state 
 may have thought proper to ordain. 
 It can rest on no other foundation, can 
 have no other guarantee. It is owing 
 to these characteristics only in the 
 original nature of tenure that appeals 
 can be made to the laws, either for the 
 protection or assertion of the rights of 
 property. Upon any other hypothesis 
 the law of property would be simply 
 the law of force. Now, it is undenia- 
 ble that the investment of property in 
 the citizen by the government, whether 
 made for a pecuniary consideration or 
 founded on conditions of civil or polit- 
 ical duty, is a contract between the 
 state, or the government acting as its 
 agent, and the grantee; and both the 
 parties thereto are bound in good faith 
 to fulfill it. But into all contracts, 
 whether made between states and in- 
 dividuals, or between individuals 
 only, there enter conditions which 
 arise not out of the literal terms of 
 the contract itself; they are superin- 
 duced by the pre-existing and higher 
 authority of the laws of nature, of na- 
 tions, orof the community to which the 
 parties belong ; they are always pre- 
 sumed, and must be presumed to be
 
 564 
 
 PkIVATE CoRrORATIONS. 
 
 By virtue of tliis supreme power of the state, timber, gravel, or 
 stone may be taken,* and buildings removed or destroyed.^ So 
 
 known and recog:nized by all, are bind- 
 ing upon all, and need never, there- 
 fore, be carried into express stipula- 
 tion, for this could add nothing to 
 their force. Every contract is made in 
 subordination to them, and must yield 
 to their control as conditions inherent 
 and paramount wherever a necessity 
 for their execution shall occur. Such 
 a condition is the right of eminent 
 domain. This right does not operate 
 to impair the contract affected by it, 
 but recognizes its obligation in the 
 fullest extent, claiming only the ful- 
 fillment of an essential and inseparable 
 condition. Thus, in claiming the re- 
 sumption or qualification of an investi- 
 ture, it insists merely on the true nature 
 and cliaracter of the right invested. 
 The impairing of contracts inhibited 
 by the constitution can scarcely, by the 
 greatest violence of construction, be 
 made applicable to the enforcing of the 
 terms or necessary import of a con- 
 tract ; the language and meaning of 
 the inhibition were designed to em- 
 brace proceedings attempting the in- 
 terpolation of some new term or con- 
 dition foreign to the original agree- 
 ment, and, therefore, inconsistent with 
 and violative thereof. It then being 
 clear that the power in question not 
 being within the purview of the re- 
 striction imposed by the tenth section 
 of the first article of the constitution, 
 it remains with tlie states to the full 
 extent in which it inheres in every 
 sovereign government to be exercised 
 by them in that degree that shall by 
 them be deemed commensurate with 
 public necessity. So long as they 
 shall steer clear of the single predica- 
 ment denounced by the constitution ; 
 shall avoid interference with the obli- 
 gation of contracts, the wisdom, the 
 mode, the policy, the hardship of any 
 exertion of this power, are subjects 
 not within the proper cognizance of 
 this court. This is, in truth, purely 
 a question of power ; and conceding 
 the power to reside in the state govern- 
 
 1 Watkins v. Walker Co., 18 Tex. 
 585 ; Wheelock v. Young, 4 Wend. 
 647 ; Lyon v. Jerome, 15 id. 5G9 ; 
 
 ment, this concession would seem to 
 close the door upon all further contro- 
 versy in connection with it. The in- 
 stances of the exertion of this power in 
 some mode or other from the very 
 foundation of civil government have 
 been so numerous and familiar, that it 
 seems somewhat strange at this day to 
 raise a doubt or question concerning it. 
 In fact, the whole policy of the country, 
 relative to roads, mills, bridges, and 
 canals, rests upon this single power 
 under which lands have been always 
 condemned ; and without the exertion 
 of this power not one of the improve- 
 ments just mentioned could be con- 
 structed. In our country it is believed 
 the power was never, or at any rate 
 rarely, questioned until the opinion 
 seems to have obtained that the right 
 of property in a chartered corporation 
 was more sacred and intangiljle than 
 the same right could possibly be in 
 the person of the citizen ; an opinion 
 which must be without any grounds 
 to rest upon, until it can be demon- 
 strated either that the ideal creature 
 is more than a person, or the corporeal 
 being is less. For, as a question of 
 the .power to appropriate to public 
 uses the property of private persons 
 resting upon the ordinary foundations 
 of private right there would seem to be 
 room neither for doubt nor ditiaculty. 
 A distinction has been attempted in 
 argument between the power of a 
 government to appropriate for public 
 uses property which is corporeal, or 
 may be said to be in being, and the 
 like power in the government to re- 
 sume or extinguish a franchise. The 
 distinction thus attempted we regard 
 as a refinement which has no founda- 
 tion in reason, and one that, in truth, 
 avoids the true legal or constitutional 
 question in these causes ; namely, that 
 of the right in private persons in the 
 use or enjoyment of their private 
 property to control and actually to 
 prohibit the power and duty of the 
 government to advance and protect 
 
 Jerome v. Ross, 7 Johns. Cli. 315 ; 
 Bliss v. Hosmer, 15 Ohio, 44. 
 
 ^ Wells V. Somerset, etc., R. Co., 47 
 Me. 345.
 
 Eminent Domain. 
 
 565 
 
 may legal and equitable interests, streams of water/ coi-porate 
 franchises, and every species of pro])erty l>e appropriated under 
 this ri^lit." 
 
 the general good. Wo are aware of 
 nolliiiig peculiar to a franchise which 
 can class it higher, or naider it more 
 sacred than other property. A fran- 
 chise is pro|)erty and iioiliiug more; 
 it is incorporeal propeity, and is so 
 defined by J uslice Blackstone, when 
 treaiiagin his second volume, chap. IJ, 
 p. 2(j, of the ' Rights of Things.' It is 
 its character of property only which 
 imparts to it value, and ahme author- 
 izes in individuals a right of action for 
 invasions or disturbances of its enjoy- 
 ments. Vide Bl Com., voh 3, chap. 10, 
 p. 28(J, as to injuries to this descrip- 
 tion of private property, and the reme- 
 dies given for redressing them. 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 re- 
 gard as occupying the same position 
 with respect to the paramount power 
 and duty of the state to promote and 
 protect the public good as does the 
 right of the citizen to the possession 
 and enjoyment of his laud under his 
 patent or contract with the state, and 
 it can no more interpose any obstruc- 
 tion 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. The power 
 of a state in the exercise of eminent 
 domain to extinguish immediately a 
 franchise it had granted, appears 
 never to have been directly brought 
 here for adj udication, and consequently 
 has not been heretofore formally pro- 
 pounded from this court ; but in Eng- 
 land this power, to the fullest extent, 
 was recognized in the case of the 
 Governor and Company of the Cast 
 Plate Manufacturers v. Meredith, 4 
 T. li. 71)4, and Lord Kenyon, espe- 
 cially in that case, founded solely upon 
 this power the entire policy and au- 
 thority of all the road and canal laws 
 of the kingdom." 
 
 ' People V. Mayor, etc., of N. Y., 32 
 Barb. 102 ; Bailey v. Miltenberger, 31 
 Penn. St. 37 ; Gardner v. Newburgh, 2 
 Johns. Ch. 102. 
 
 -Springfield v. Connecticut Riv. R. 
 
 And in the same case Mr. Ju.stice 
 McLean says : " The state cannot 
 modify or repeal a charter for a bridge, 
 a turn])ike-road, or a bank, or any 
 other private charter, unless the power 
 to do so has been reserved in the orig- 
 inal grant. But no one doubts the 
 power of the state to take a banking- 
 house for public use, or any other real 
 or personal property owned by the 
 bank. In this respect, a corporation 
 holds property subject to the eminent 
 domain, the same as citizens. The 
 great object of an act of incorporation 
 is to enable a body of men to exercise 
 the faculties of an individual. Pecu- 
 liar privileges are sometimes vested 
 in the body politic, with the view of 
 advancing the convenience and inter- 
 ests of the public. 
 
 " The franchise, no more than a 
 grant for land, can be annulled by the 
 state. These muniments of right are 
 alike protected. But the property 
 held under both is held subject to a 
 public necessity, to be determined by 
 the state. In either case, the property 
 being taken, renders valueless the 
 evidence of right. But this does not, 
 in the sense of the constitution, impair 
 the contracts. The bridge and the 
 ground connected with it, together 
 with the right of exacting toll, are the 
 elements which constitute the value 
 of the bridge. The situation and pro- 
 ductiveness of the soil constitute the 
 value of laud. In both cases an esti- 
 mate is made of the value, under pre- 
 scribed forms, and it is paid when tlie 
 property is taken for public use. And 
 in these cases the evidences of right 
 are incidents tq the property. No 
 state could resume a charter, under 
 the power of appropriation, and carry 
 on the functions of the corporation. 
 A bank charter could not be thus 
 taken and the business of the bank 
 continued for public purposes. Nor 
 could this bridge have been taken by 
 
 Co., 4 Cush. (Mass.) 03. A franchise 
 to build and maintain a bridge may be 
 taken for a highway whenever the 
 legislature deems that a public exi- 
 gency for such new use exists. Cen-
 
 560 
 
 PkIVATI!; COKI'ORATIONS. 
 
 Sec. 399. How the right can be enjoyed. — The I'iglll of eminent 
 domain is an incident of sovereignty, and can only be enjoyed by 
 
 the state and kept by it as a toll- 
 briilgo. Tliis could not be called au 
 appropriation of private property to 
 public purposes. There would be no 
 change in tlie use, except the applica- 
 tion of the profits, and this would not 
 bring the act within the power. The 
 power must not only be exercised ?;««« 
 fide by a state, but the property, not 
 its product, must be applied to public 
 use. 
 
 " It is argued that if the state may 
 take this bridge, it may transfer it to 
 other individuals under the same or 
 different charter. This the state can- 
 not do. It would be, in effect, taking 
 
 the property from A. to carry it to B. 
 The public purpose for which the 
 power is exerted must be real and 
 not pretended. If, in the course of 
 time, the property, by a change of cir- 
 cumstances, should no longer be re- 
 quired for public use, it may be other- 
 wise disposed of. But this is a case 
 not likely to occur. The legality of 
 the act depends upon the facts and 
 circumstances under which it was 
 done. If the use of land taken by 
 the public for a highway should be 
 abandoned, it would revert to the orig- 
 inal proprietor and owner of the fee." 
 
 tral Bridge v. Lowell, 4 Gray, 474 ; 
 Young V. Harrison, 6 tra. 180. Indeed, 
 it may be stated, as a general rule, that, 
 although the charter of a corporation 
 is a contract between the state and the 
 corporators, yet it, like other contracts, 
 is made subject to the right of eminent 
 domain in the state ; and the property 
 of a corporation and its franchises may 
 therefore be taken for public uses, 
 like the property of individuals, with- 
 out violating the obligation of the con- 
 tract. West River Bridge Co. v. Dix, 6 
 How. (U. S.) 507 ; Alabama, etc., R. R. 
 Co. V. Kenny, 39 Ala. 307; State v. 
 Noyes, 47 Me. 189 ; Peirce v. Somers- 
 worth, 10 N. H. 369; Crosby v. Han- 
 over, 36 N. H. 404 ; Miller v. New York, 
 etc., R. R. Co., 21 Barb. 513; Red 
 River Bridge Co. v. Clarksville, 1 
 Sneed, 176; Armington v. Barnett, 15 
 Vt. 745 ; White River Turnpike Co. v. 
 Vermont, etc., R. R. Co., 21 Vt. 590 ; 
 James River, etc., Co. v. Thompson, 3 
 Gratt. 270. And the state may delegate 
 this power to a corporation either pub- 
 lic or private, either by special or gen- 
 eral laws. Backus v. Lebanon, 11 
 N. H. 19, and the right may even be 
 conferred upon a foreign corporation. 
 Matter of Townsend, 39 N. Y. 171 ; 
 Morris Canal, etc., Co. v. Townsend, 24 
 Barb. 658. The right may be granted 
 conditionally, and until the conditions 
 are performed, it does not exist, or if 
 the conditions are subsequent, and not 
 performed, the right ceases, Stanford 
 V. Worn, 27 Cal. 171 ; and under no 
 circumstances can the right be exam- 
 ined without making proper and just 
 
 compensation for the property taken. 
 Hamilton v. Annapolis, etc., R. R. Co., 
 1 Md. Ch. 107 ; Harness v. Chesapeake, 
 etc., R. R. Co., id. 248 ; Boston, etc., 
 R. R. Co. V. Salem, etc., R. R. Co., 2 
 Gray, 1 ; Petition of Mount Washing- 
 ton Road Co., 35 N. H. 134 ; Ten Eyck 
 V. Delaware, etc., Canal, 18 N. J. L. 
 200; Star v. Camden R. R. Co., 24 
 N. J. L. 592; Carson v. Coleman, 11 
 N. J. Eq. 106 ; Gardner v. Trustees of 
 Newburgh, 2 Johns. Ch. 162 ; Bona- 
 parte v. Camden, etc., R. R. Co., 1 
 Baldw. (U. S. C. C.)205; Haight v. 
 Aqueduct, 4 Wash. 601 ; People v. 
 White, 11 Barb. 26 ; Hartwell v. Arm- 
 strong, 19 id. 166 ; Buflfixlo Bayou, etc., 
 R. R. Co. V. Terris, 26 Tex. 588. 
 
 In the latter case the court held, that 
 it was competent for the legislature, 
 under the right of eminent domain, to 
 grant an authority to a railroad com- 
 pany to lay and maintain a railway over 
 a highway, longitudinally ; but that the 
 intention to grant laud, already appro- 
 priated to a public use, must be shown 
 by express words or by necessary im- 
 plication. 
 
 In this case Chief-Justice Shaw ob- 
 serves : 
 
 " We are then brought to the main 
 question, namely, whether the defend- 
 ants had authority, by the act of 1845, 
 chap. 170, § 1, granting them the right 
 to build this branch, to build it over 
 and along a public way previously 
 established. It is stated and admitted 
 that Front street, in Cabot ville, is 
 partly a highway, laid out and estab- 
 lished by the county commissioners,
 
 Eminent Domain. 
 
 507 
 
 the exorcise of legislative authority. The right may, however, 
 be conferred by the legisluture, representing the supreme author- 
 
 and partly a townvvay, laid out by the 
 selectmen, and the laying out ratified 
 by the vote of the town. These two 
 modes of establishing ways are both 
 legal ; and though one is called a high- 
 way, and the other a town way, yet, for 
 most purposes, both are regarded as 
 public ways, for obstructing whicli any 
 party is liable to indictment, as for a 
 nuisance, and for damage in conse- 
 quence of any defect in which the 
 town is liable to the sufferer. For 
 all purposes of this inquiry, there- 
 fore, there is no distinction between 
 them. 
 
 "As the giving of authority to build 
 and maintain a railroad is the grant of 
 a right to take private property for a 
 public use, and to deal with property 
 appropriated to other public easements 
 and uses, it is manifestly a high exer- 
 cise of the sovereign right of eminent 
 domain, and can only be effected by 
 the clear and unequivocal authority of 
 the legislature, who are constituted the 
 judges of what the public good re- 
 quires. 
 
 " It is somewhat remarkable that, 
 in a matter so deeply affecting private 
 rights and interests, the precise loca- 
 tion or line of railroad on the ground 
 is not fixed by the act granting the 
 power, nor is it provided that it shall 
 be fixed by any board of public ofiicers, 
 who may be supposed to act impar- 
 tially. In laying out highways, the 
 precise course of location is fixed by 
 the county commissioners, formerly 
 the court of sessions, a public body of 
 disinterested otficers, supposed to act 
 as impartial arbitrators between the 
 public and individual proprietors. 
 
 " But in railroads, the authority to 
 the corporation is to locate, construct, 
 and complete a railroad within certain 
 termini, giving the general direction, 
 but leaving the precise location to be 
 determined, not by the county commis- 
 sioners, but by the company. The cor- 
 poration must file their location with 
 the commissioners within one year, 
 defining the courses, distances, and 
 boundaries, but the commissioners 
 have no power of prescribing or alter- 
 ing it. Rev. Stats. , chap. 37, § 75. So, af- 
 ter having made a location, the corpora- 
 
 tion may vary it, and take other lands 
 within the limits prescribed by their 
 act of incorporation, and file a location 
 of such variations. Rev. Stats., chap. 
 3t), j^ 73. Aud.on the petition of any rail- 
 road corporation, the commissioners 
 may authorize an original location, or 
 an existing location, to be altered, 
 without the limits prescribed by the 
 charter of such corporation. Rev.fcjtats., 
 chap. 39, ^5 <4. Considering how large 
 the powers are which are thus ve.sted in 
 railroad corporations, the court are of 
 opinion that they ought to be con- 
 strued with a good degree^ of strict- 
 ness, and not enlarged by construc- 
 tion. 
 
 " The authority, under which the de- 
 fendants claim to have located and laid 
 out the railroad in question, is found 
 in the act of 1S15, chap. 170, which was 
 passed in addition to the act of 1842, 
 chap. 41, by which this company was 
 incorporated. The act of Iblo pro- 
 vides (§ 1) that the company may con- 
 struct and open for use a branch rail- 
 road from the main track of the road, 
 in Cabotville, to and near the mills in 
 said village, passing up the south bank 
 of Chicopee river, near the same, and 
 thence extending up said river to the 
 Chicopee Falls village ; the location of 
 that part of the branch now in question, 
 from the main road to the mills in 
 Cabotville, to be filed in one year from 
 the passage of the act, and that to 
 Chicopee Falls village in five years. 
 The act further provides (§ 3) that said 
 corporation, in the construction of 
 their railroad and branch, shall have 
 all the powers and privileges, and be 
 subject to all the duties, restrictions, 
 and liabilities set forth in the Rev. 
 Stats., chap. 44, and in that part of 
 cha)>. 39 wliich relates to railroads. 
 
 " It is the common case of an act, 
 authorizing the location and construc- 
 tion of a railroad between termini, one 
 of which, the j unction, as the terminus 
 a quo is fixed, and the other, the tei'- 
 viiuus ad quern, ' to and near the mills 
 in Cabotville ; ' and the course or line 
 is no more exactly designated than 
 by the terms ' passing up the south 
 bank of Chicopee river, and near the 
 same,' and thence extending up said
 
 5GS 
 
 Private Coepokations. 
 
 ity of the state ; and authority is usually conferred by it, by some 
 general statutes upon corporations, by means of which delegated. 
 
 river to Chicopee Falls village. The 
 beautiful and apparently accurate sur- 
 vey and a plan of a part of Cabotville, 
 and of the river, the streets, and the 
 track of the railroad, exhibit all these 
 localities to great advantage, and pre- 
 sent the question at a single glance. 
 
 " As no company or persons have 
 authority to lay out a railroad, except 
 so far as such power is conferred by 
 the legislature, the court are of opin- 
 ion, that by a grant of power by a 
 legislative act, to lay out a railroad 
 between certain termini, where the 
 precise course and direction are not 
 prescribed, but are left to the cor- 
 pora iion to be located between the 
 termini, no authority is given prima 
 facie to lay such railroad on and along 
 an existing public highway longitu- 
 dinally or, in other words, to take 
 the road-bed of such highway as 
 the track of their railroad. The 
 two uses are almost, if not wholly, in- 
 consistent with each other; so that 
 taking the highway for a railroad will 
 nearly supersede the former use to 
 which it had been legally appropriated. 
 The whole course of legislation, on 
 the subject of railroads, is opposed to 
 such a construction. The crossing of 
 public highways by railroads is ob- 
 viously necessary and, of course, war- 
 ranted; and numerous provisions are 
 industriously made to regulate such 
 crossings by determining when they 
 shall be on the same and when on dif- 
 ferent levels, in order to avoid collis- 
 ion ; and when on the same level, 
 what gates, fences and barriers shall 
 be made and what guards shall be 
 kept to insure safety. Had it been 
 intended that railroad companies, un- 
 der a general grant, should have i)ower 
 to lay a railroad over a highway 
 longitudinally, which ordinarily is not 
 necessary, we think that would have 
 been done in express terms, accom- 
 panied with full legislative provisions 
 for maintaining such barriers and 
 modes of separation as would tend to 
 make the use of the same road, for 
 both modes of travel, consistent with 
 the safety of travelers on both. The 
 absence of any such provisions affords 
 a strong inference that, under genera] 
 
 terras, it was not intended that such a 
 power should be given. 
 
 " But the court are of opinion that 
 it is competent for the legislature, un- 
 der the right of eminent domain, to 
 grant such an authority. The power 
 of eminent domain is a high preroga- 
 tive of sovereignty, founded upon pub- 
 lic exigency, according to the maxim : 
 Salus reipublicm lex mprema est, to 
 which all minor considerations must 
 yield and which can only be limited 
 by such exigency. The grant of land 
 for one public use must yield to that 
 of another more urgent. Land appro- 
 priated to a public walk or training- 
 field may, in case of war, be required 
 for a citadel when it is the only 
 ground which, in a military point of 
 view, will command all the defenses 
 of a place in case of a hostile attack. 
 Chesapeake & Ohio Canal Co. v. Balti- 
 more & Ohio Railroad Co., 4 G. & 
 J. 1 ; Boston Water-Power Co. v. 
 Boston & Worcester Railroad Corp., 
 23 Pick. 380 ; Wellington et al.. Peti- 
 tioners, 16 id. 87, 100. 
 
 " But when it is the intention of the 
 legislature to grant a power to take 
 laud already appropriated to another 
 public use, such intention must be 
 shown by express words or by neces- 
 sary implication. There may be such 
 a necessary implication. Every grant 
 of power is intended to be efficacious 
 and beneficial and to accomplish its 
 declared object ; and carries with it 
 such incidental powers as are requisite 
 to its exercise. If then the exercise 
 of the power granted draws after it a 
 necessary consequence, the law con- 
 templates and sanctions that conse- 
 quence. Take the familiar case of the 
 Notch of the White Mountains, a very 
 narrow gorge, which affords the only 
 practicable passage for many miles 
 through that mountain range. A turn- 
 pike road through it has already been 
 granted. Suppose the gorge not wide 
 enough to accommodate another road 
 but the legislature of New Hampshire, 
 in order to accommodate a great line of 
 public travel, should grant power to 
 lay a railroad on that line they would, 
 by necessary implication, grant a 
 power to take some portion of the road- 
 bed of the turnpike."
 
 Eminent Domain. 569 
 
 authority such corporations, constituted for various purposes, are 
 enabled to prosecute various enterprises of public as well as of 
 private interest.^ The right to delegate this authority rests upon 
 the supposed public benefit to be derived from the exercise of the 
 power by the corporation on which it is conferred. " Upon the 
 principle of public benefit," observes Chancellor Walworth, 
 ''not only the agents of the government but also individuals and 
 corporate bodies have been authorized to take private property 
 for the purpose of making highways, turnpike roads and canals ; 
 of erecting and constructing wharves and basins ; of establishing 
 ferries ; of draining swamps and marshes and of bringing water 
 to cities and villages. In all such cases the object of the legisla- 
 tive grant of power is the public advantage expected from the 
 contemplated improvement or enterprise, whether it be efiected 
 directly by the agents of the government, or through the medium 
 of corporate bodies or of individual enterprise." ^ 
 
 Sec. 400. The authority to grant the right is in the legislature. — 
 The authority to grant the exercise of the right of eminent domain 
 resides in the legislature as the representative of the state. It is 
 a legislative function to determine whether the enterprise under- 
 taken on the part of an individual or corporate body is of suffi- 
 cient pubHc interest and utility to justify the transferring of the 
 sovereign power to take private property for the purpose of 
 carrying out such enterprise.'^ 
 
 And, with the legislative determination in this respect, the 
 
 ' Buflfalo, etc., R. Co. V. Brainard, Dam v. Newman, 12 Pick. 464; Gil- 
 
 9 N. Y. 100 ; People v. Smith, 21 id. mer v. Lime Paint, 18 Cal. 229 : Arm- 
 
 595 ; Wilson v. Marsh Co., 2 Pet. 251 ; ingtou v. Barnet, 15 Vt. 750 ; White 
 
 Bloodgood V. Railroad Co., 18 Wend. River Turnpike Co. v. Central R., 21 
 
 9; West River Bridge Co. v. Dix, 6 id. 590 ; Bradley v. New York & N. 
 
 How. 507; Mercer v. Railroad Co., 36 H. R. Co., 21 Conn. 294 ; Olmstead v. 
 
 Penn. St. 99 ; Scudder v. Trenton, etc.. Camp, 33 id. 532 ; Eaton v. Boston C. 
 
 Falls Co., Saxt. (N. J.) 694 ; Swan v. & M. R. Co., 51 N. H. 504. 
 
 Williams, 2 Mich. 427; Embury v. • Beekman v. Saratoga, etc., R. Co., 
 
 Connor, 3 N. Y. 511; Alexander v. 3 Paige, 73 ; Rensselaer, etc., R. Co. v. 
 
 Baltimore, 5 Gill, 383; Sedgw. on Davis, 43 N. Y. 137; Railroad Co. v. 
 
 Const. Law, 517; Curry v. Mt. Ster- Kip, 46 id. 546; In re Fowler, 58 
 
 ling, 15 111. 320; West v. Blake, 4 id. 60 ; Kramer v. C. & P. R. Co., 5 
 
 Blackf. (Ind.) 234; Stevens v. Middle- Ohio St. 146. 
 
 sex Canal, 12 Mass. 466 ; Boston Mill =* People v. Smith, 21 N. Y. 595. 
 
 72 -- ■ ' '
 
 570 Pkivate Cokporations. 
 
 judiciary department oftiie government cannot interfere. Whether 
 the contemplated project, be it a matter of individual or of corpo- 
 rate action, is of sufficient public interest to authorize the con- 
 ferring of the right to exercise the power of eminent domain, is 
 for the legislature alone, and with the exercise of its discretion 
 the judiciary of the state has no right to interfere.^ But if 
 attempts are made under the authority granted to take property 
 under the claim of right of eminent doniain, when in fact it is 
 not warranted by the- circumstances of the case, or the appropria- 
 tion would not subserve public purposes or be of public utility, 
 the courts have power to interfere.^ If, however, the use for 
 which it is taken has been declared by the legislature to be of 
 public utility, the courts will hold it to be such unless the con- 
 trary clearly appears/ 
 
 Sec. 401. What are public uses which justify the exercise of the right. 
 
 — There is a class of pursuits, purposes and enterprises, usually 
 the object of private corporate undertakings, that are generally, 
 if not universally, conceded to be of such public use and utility 
 as to authorize the grant of the right of eminent domain to such 
 persons or associations as undertake to carry them out. Thus it 
 is held that the building or construction of turnpike and plank- 
 roads, canals, railroads, aqueducts, sewers, water-works, telegraph 
 lines and gas-works, are of public use and advantage, and that in 
 reference to these various objects, as well as many others, the 
 public have such an interest, although projected and under- 
 taken by private associations or corporations, as to authorize the 
 conferring upon such bodies the power to exercise the right of 
 eminent domain ; and under this power to condemn private prop- 
 erty of any kind that may be required to accomplish the object." 
 
 1 Tidewater Co v. Coster, 18 N. J. 452 ; Bankbead v. Brown. 25 Iowa, 540 ; 
 
 Eq. 518 ; S. C, id. 55 ; 2 Kent's Com. Spear v. Blairsville, 50 Penn. St. 150 ; 
 
 340; Sedgw. on Const. Law, 511, Sadler v. Langham, 34 Ala. 311. 
 
 514. 3 Bankhead v. Brown, 25 Iowa, 540 ; 
 
 •^Talbot V. Hudson, 16 Gray, 417 ; Olmstead v. Camp, 33 Conn. 551; 
 
 Water-Works Co. v. Burkbart, 41 Ind. Tyler v Beacber, 44 Vt. 648 ; Lough- 
 
 364 ; Scudder v. Trenton D. F. Co., bridge v. Harris, 42 Ga. 500. 
 
 Saxt. (N. J.) 694 ; Cottrill v. Myrick, •* Id. ; New York & H. R. R. Co. v. 
 
 13 Me. 222 ; Concord R. Co. v. Greely, Kip, 46 N. Y. 546 ; Buffalo, etc. , R. 
 
 17N. H.47; People v. Salem , 20 Mich. Co. v. Brainard, 9 id. 100; Olcott v.
 
 Eminent Domain. 
 
 571 
 
 On the other hand, there is a cUiss of private enterprises, in 
 relation to which tlie pubhc benefit to be derived from their prose- 
 cution is not so manifest. 
 
 Supervisors, 10 Wall. 078 ; Bonaparte 
 V. C. & A. K. Co., Bald. 2u5 ; Bradley 
 V. New York, etc., K. Co., 21 Coiiu. 
 391 ; Davis V. Tuscumbia, etc., II. Co., 
 4 S. & P. 421 ; Brown v. Beatty, 34 
 Miss. 227 ; Swan v. Williams, 2 Mich. 
 427; Weir v. St. Paul R. Co., 18 
 Minu. lo.j ; Harvey v. Thomas, 10 
 Walts, 05 ; New Central Coal Co. v. 
 CJeo/ge's Creek Coal, etc., Co., '37 Md. 
 537; Sau Francisco A. & S. 11. Co. v. 
 Caldwell, 31 Cal. 307; Gibson v. Ma- 
 son, 5 Nev. 283. 
 
 See, also, Bloomfield Gas Co. v. Bicb- 
 ardsou, 03 Barb. 437, where the ques- 
 tion of public use in relation to a gas 
 for illuminating a city is considered, 
 and the power to confer the right of 
 eminent domain upon a corporation 
 organized for the manufacture of gas 
 for such a purpose is discussed ; and 
 where it is lield that the legislature is 
 authorized to confer the right in such 
 cases. 
 
 All purely governmental purposes, 
 whether carried by the state itself 
 through some of its departments or by 
 local governments such as those of 
 counties and towns. Under tiiis class 
 are public school-houses; Williams v. 
 School District, 33 Vt. 271 ; forts; Gil- 
 mer V. Lime Paiut, 19 Cal. 229 ; and 
 this class would undoubtedly include 
 buildings for state-houses, capitols, 
 court-houses, public prisons and the 
 like. All means atid methods for the 
 transit of passengers or goods, whether 
 constructed by the state or by private 
 enterprise. This class includes public 
 highways, turnpikes, bridges, rail- 
 roads, canals, docks and wharves. 
 Measures of police, and especially 
 those designed to promote health. In 
 this class there are several particular 
 instances not resembling each other in 
 their outward and physical features, 
 but it will be seen that in all of them 
 the element which makes the use 
 "public" belongs to that brancli of 
 governmental functions termed " po- 
 lice," and in most of them this ele- 
 ment is purely sanitary. This class 
 includes water- works to supply cities 
 
 with water. Reddall v. Bryan, 14 Md. 
 444: Burden v. Stein, 27 Ala. 104; 
 liumbard v. Stearns, 4 Cush. 60; Mayor, 
 etc., v. Bailey, 2 Denio, 4.52 ; per Gar- 
 diner, President. Provision and means 
 for draining swamps, marshes and low- 
 lands. Harlwell v. Armstrong, 19 
 Barb. 100;* People v. Nearing, 27 
 N. Y . 300 ; Anderson v. Kerns Drain- 
 ing Co., 14 lud. 199, 202. This last 
 case expressly holds that draining for 
 sanitary purposes is a public use, but 
 for other purposes is not. Provisions 
 and means for removing dams and per- 
 mitting stagnant and offensive waters 
 to How otf , thus abating a great public 
 nuisance and rendering a whole dis- 
 trict salubrious which was before pes- 
 tilential. Miller v. Craig, 12 N. J. 
 Eq. 175 ; Talbot v. Hudson, IG Gray, 
 417 ; Dingley v. Boston, 100 Mass. 
 5-14. Drains and sewers in cities. 
 Hildreth v. Lowell, 11 Gray, 345. 
 Public burying-grounds. Edwards v. 
 Stonington Cemetery Assoc, 20 Conn. 
 400. The cases generally, that is 
 throughout the United States, gone 
 further than the foregoing. In Mas- 
 sachusetts, Connecticut, and perhaps 
 in a very few other state's, statutes 
 have existed from a very early day 
 known as the " flowage acts," by which 
 land is permitted to be taken for mill- 
 dams, etc. These statutes form part 
 of the j)eculiar local systems of those 
 states, and have been sustained on 
 the ground that the means of pro- 
 moting manufacture was a public 
 use. See Hazen v. Essex Co., 12 
 Cush. 475; Boston Mill Dam Co. v. 
 Newman, 12 Pick. 407, and many 
 other Massachusetts cases ; Olmstead 
 V. Camp. 33 Conn. 532 ; Todd v. Austin, 
 34 id. 78. In the latter case the neces- 
 sities of the position and the logic of 
 the judge force him to hold that 
 " whenever a person carries on any 
 business, and furnishes articles which 
 members of the community find it 
 convenient or advantageous to buy, 
 then his business is a public use." 
 This is the reductio ad ahsurdum. It 
 is saying tliat the legislature may
 
 572 Private Corpokatioxs. 
 
 Tims, in tlio case of companies or private corpoi-ations, organ- 
 ized for manufacturing purposes, the right to authorize them to 
 take private property, necessary or convenient for carrying out 
 their purposes, has been a question on which the authorities are 
 divided.^ Saw-mills, grist-mills, and various other manufactories, 
 are certainly a public necessity ; and while the country is new 
 and capital not easily attainable for their erection, it sometimes 
 seems to be essential that the government should offer large in- 
 ducements to parties who Avill sujiply this necessity. Before 
 steam came into use, water was almost the sole reliance for motive 
 power ; and, as i-eservoirs were generally necessary for this pur- 
 pose, it would sometimes happen that the owner of a valuable 
 mill- site was unable to render it available, because the owners of 
 lands which must be flowed to obtain a reservoir would neither 
 consent to the construction of a dam, nor sell their lands except 
 at extravagant and inadmissible prices. The legislatures in some 
 of the states have taken the matter in hand, and have surmounted 
 the difficulty, some by authorizing the land to be appropriated, 
 and at other times permitting the erection of the dam, but re- 
 quiring the mill-owner to pay annually to the proprietor of the 
 land the damages caused by the flowing, to be assessed in some 
 impartial mode. The reasons of such statutes have been growing 
 
 ipower a person to take private land doctrine has been expressly re- 
 operty to carry on every trade or pudiated in New York. Hay v. Co- 
 cupation conceivable. It, utterly hoes Co., 3 Barb. 42. The object, to 
 
 em} 
 proi 
 occupa 
 
 abolishes the word "public" from the be a public use, must either be, first, 
 constitutional provisions. These doc- something which ipso facto, by its 
 trines have not been followed to any mere existence and of necessity, pro- 
 extent in other states. In Alabama a duces some great common good to all 
 similar statute was recently declared the inhabitants of a particular district, 
 void, although it had stood for a long such as sanitary measures for drain- 
 time. Sadler v. Langham, 34 Ala. ing, water supply and the like ; or, 
 311. In Tennessee a very early case second, it must be something in whicli 
 had held that a grist-mill was a pub- the public at large — that is, every 
 lie use, but that a saw-mill or a paper- individual, if he please — has a legal 
 mill was not. Harding v. Goodlett, 3 interest or right such as a highway, 
 Yerg. 41. And even the former part railroad, and the like ; or, third, it 
 of this decision was recently overruled must be something directly govern- 
 in Memphis Freight Co. v. Memphis, mental, such as a fort, state-house and 
 4 Cold. 41D. Finally this New Eng- the like. 
 
 'Great Falls Man. Co. v. Fernald, 47 N. H. 444; French v. Braintree 
 Man. Co., 23 Pick. 220.
 
 Eminent Domain. 
 
 573 
 
 weaker, with the introduction of steam power and the progress 
 of improvement, but their validity has repeatedly been recognized 
 in some of the states, and probably the same courts would con- 
 tinue still to recognize it, notwithstanding the public necessity 
 may no longer appear to demand such laws.^ 
 
 ' ADf^ell on Water-Courses, cliap. 
 12 ; Wolcott Woolen Man. Co. v. 
 Uphani, 5 Pick. 294; Shaw, J., in 
 French v. Braintree Man. Co., 26 id. 
 220. 
 
 In Hay v. Colioes Co., 3 Barb. 47, 
 H.VND, J., observed : " Tlie legi^<lature 
 of New York, it is believed, lia.s never 
 exercised the right of eminent domain 
 in favor of mills of any kind ; sites 
 for steam engines, hotels, churches, 
 and other public conveniences, might 
 as well be taken by the exercise of 
 this extraordinary power." 
 
 But in the cape of Hazen v. Essex 
 Company, 12 Cash. 477, which was an 
 action to recover damages sustained 
 by the raining of a dam across the 
 Merrimac river, whereby a stream 
 emptying into that river above said 
 dam was set back and land over- 
 flowed, and a mill on said latter stream 
 was damaged and destroyed, and in 
 which the defendants claimed that 
 they were justified in so doing by vir- 
 tue of an act of the legislature of 
 Massachusetts authorizing such ap- 
 propriation and use of the rights and 
 privileges of the plaintitF, and that 
 the remedy of the plaintiff was a 
 claim of damages, under said act, and 
 not by action at common law, for the 
 wrongful encroachment upon and in- 
 jury to the plaiutitTs rights in the 
 premises. Chief Justice SriAW ob- 
 served as follows : " It is contended 
 that if this act was intended to author- 
 ize the defendant's company to take 
 the mill-power of the plaintiff it was 
 void because it was not taken for pub- 
 lic use, and is not within the power 
 of the government in the exercise of 
 the right of eminent domain. This is 
 the main question. In determining it, 
 we must look to the declared purpose 
 of the act ; and, if a public use is de- 
 clared, it will be so held, unless it man- 
 ifestly appears by the provisions of 
 the act that they can have no tendency 
 to advance and promote such public 
 use. The declared purposes are to 
 improve the navigation of the Merri- 
 
 mac river, and to create a large mill- 
 power for mechanical and manufactur- 
 ing purposes. 
 
 " In general, whether a particular 
 structure, as a bridge, or a lock, or a 
 canal, or road is for the public use, ia 
 for the legishiture, and which may be 
 presumed to have been correctly de- 
 cided by them. Commonwealth v. 
 Breed, 4 Pick. 468. Tliat the improve- 
 ment of the navigation of a river is 
 done for public use has been too 
 frequently decided and acted upon to 
 require authorities. And so to create 
 a wholly artificial navigation by ca- 
 nals. The establishment of a great 
 mill-power for manufacturing pur- 
 poses, as an object of great public in- 
 terest, especially as manufacturing 
 has come to be one of the great indus- 
 trial pursuits of the commonwealth, 
 and, in our judgement, rightly so, in 
 determining what is a public use, jus- 
 tifying the exercise of the right of 
 eminent domain." See Stat. Mass., 
 1825, chap. 148 ; Boston and Roxbury 
 Mill-Dam. Co. v. Newman, 13 Pick. 
 467 ; Hazen v. Essex Co., 12 Cash. 
 477 ; Harding v. Goodlett, 3 Yerg. 41 : 
 Newcomb v. Smith, 1 Chand. (Wis.) 
 71. See, also, Olmstead v. Camp, 33 
 Conn. 5o3 ; Jordan v. Woodward, 40 
 Me. 317; Miller v. Frost. 14 Minn. 
 365 ; Burgess v. Clark, 13 Ired. L. 109 ; 
 McAfee's Heirs v. Kennedy, 1 Litt. 
 93 ; Smith v. Connellv, 1 T. B. Monr. 
 58; Shackleford v.'CoflFey, 4 J. J. 
 Marsh. 40 ; Crenshaw v. State Riv. 
 Co., Rand. 245; Great Falls Man. 
 Co. V. Fernald, 47 N. H. 444 ; Ash v. 
 Cummings, 50 id. 591. But see con- 
 trary doctrine in Loughbridge v. Har- 
 ris, 42 Oa. 500; Newell v. Smith, 15 
 Wis. 101; Fisher v. Horicon Co., 10 
 id. 351. 
 
 Under the constitution of California, 
 and under the constitutions of other 
 states, substantially the same, rail- 
 roads, though operated by private com- 
 panies, are by mere legal conclusion 
 for puljlic use. The power of eminent 
 domain may therefore be exerted in
 
 574 
 
 Pkivate Coepoeations. 
 
 It is quite possible that in any state, in which this question 
 would be entirely a new one, and where it would not be embar- 
 rassed by long acquiescence, or by either judicial or legislative 
 
 behalf of railroads under legislativw 
 permission ; and, as fostering tlie pub- 
 lic use, aid may be extended To the 
 construction of such roads by means 
 of the power of eminent domain, or of 
 subscription to capital stock, and by 
 donations made by cities and other 
 political subdivisions of the state, un- 
 der the authority of the legislature 
 first given, or subsequently obtained. 
 Such is the purport of the judicial de- 
 cisions of the highest courts of Vir- 
 ginia, Connecticut, Pennsylvania, Ohio, 
 Indiana, Tennessee, Illinois, Kentucky, 
 New York, Georgia, Florida, Texas, 
 , Mississippi, Missouri, South Carolina, 
 and other states. Stockton, etc., R. 
 R. Co. V. Stockton, 41 Cal. 147. And 
 see Secombe v. Railroad Co., 23 Wall, 
 108. 
 
 A company formed for the purpose 
 of constructing and maintaining a line 
 or lines of tubing, for the purpose of 
 transporting petroleum or other oils, 
 through pipes of iron or other mate- 
 rials, to any railroad, navigable stream, 
 etc. ; and to transport from the ter- 
 mini of such pipes, petroleum, etc., in 
 tank cars, boats, or other receptacles 
 belonging to such company, is formed 
 for purposes of "internal improve- 
 ments," and may, therefore, under the 
 constitution of West Virgmia, be au- 
 thorized to appropriate lands neces- 
 sary for the corporate use, in virtue of 
 the righjt of eminent domain . West 
 Virginia Transp. Co. v. Volcanic Oil, 
 etc., Co., 5 W. Va. 382. As the right 
 of eminent domain is established in 
 Nev? Hampshire, the legislature have 
 power to authorize a corporation estab- 
 lished for manufacturing purposes to 
 flow back water on land in order to 
 improve their water-power, on miaking 
 compensation. This is a public use. 
 Great Falls Manuf. Co. v. Fernald, 47 
 N. H. 444. 
 
 A statute authorizing a corporation 
 to acquire the fee of private property 
 for the purpose of constructing a boom 
 upon the Mississippi river, is within 
 the constitutional powers of the legis- 
 lature of Minnesota. So held, in view 
 of the large logging and lumber inter- 
 
 ests of that state upon the Mississippi 
 river, and of special jjrovisions of tlie 
 charter of the boom company reserv- 
 ing legislative control over the com- 
 pany and its tolls and charges. Pat- 
 terson V. Mississippi, etc.. Boom Co., 3 
 Dill. 465. Some appropriation of the 
 bed of the stream being essential to 
 the reasonable operation of booming 
 companies, if the legislature author- 
 izes, by a general law, the organization 
 of sucli companies, and regulates their 
 operation, it must be deemed to have 
 waived the right of the public to com- 
 plain of any such appropriation which 
 is not unreasonable. Attorney-General 
 v. Evart Booming Co., 34 Mich. 402, 
 
 Land taken, in a city, for public 
 parks and squares, by authority of law, 
 whether advantageous to the public 
 for recreation, health or business, is 
 taken for a public use. N. Y. Supreme 
 Ct. , 1872, Matter of Commissioners of 
 Central Park, 63 Barb. 282. 
 
 The provisions of the Ohio law, 
 authorizing the construction of drains 
 in townships, come within the princi- 
 ple allowing private property to be 
 taken for public use, when the public 
 health, convenience, or welfare demand 
 it. Sessions v. Crunkilton, 20 Ohio St. 
 849. So, under the provisions of the 
 Code in Iowa, authorizing the con- 
 struction of ditches in counties, the 
 work is not to be undertaken for the 
 private advantage of land-holders or 
 residents of the neighborhood, but only 
 for the public good. The supervisors 
 can order the work only after a peti- 
 tion is presented, signed by a majority 
 of persons residing iu the county and 
 owning land adjacent to the proposed 
 improvements. Paterson v. Baumer, 
 43 Iowa, 477. 
 
 The power delegated, being in dero- 
 gation of common riglit, must be 
 strictly pursued. State v. Jersey City, 
 25N.J. L. 309; Doughty v. Hope,*3 
 Den. 249 ; Van Wickle v. Camden & 
 Amboy R. R. Co., 14 N. J. L. 162. The 
 rule may be said to be that persons or 
 corporations obtaining from the legis- 
 lature power to interfere with the 
 rights of property are bound strictly
 
 Eminfnt Domain. 575 
 
 precedents, it might be held tliat these laws are not sound in prin- 
 ciple, and that there is no such necessity, and, consequently, no 
 such imperative reasons of public policy, as would be essential to 
 support an exercise of the right of eminent domain.^ But the 
 question, whether the objects and purposes of a private corpora- 
 tion are of sufficient public use to warrant the exercise of the right 
 of eminent domain, is frequently a difficult one to determine. It 
 is generally held, that it may be granted to private corporations 
 for the manufacture of illuminating gas for cities, or those organ- 
 ized for the supply of such cities with water, on the ground of the 
 general public benefit and the sanitary advantages thereby afforded. 
 So, also, there seems to be no controversy as to the exercise of 
 this right, by railroad corporations, under authority conferred by 
 the legislature in order to enable them to accom])lish the objects of 
 their institution, on the ground that they are of public use. But, 
 where is the distinction to be drawn between such corporations 
 and those organized for manufacturing purposes ? Take, for in- 
 stance, those created to manufacture flour, or lumber. They are 
 usually of public benefit like gas and water-works companies, to 
 the inhabitants of the locality where the business is carried 
 on. Where shall the line be drawn, and who shall draw it ? 
 What is the distinction, resting upon principle, between the public 
 use and utility of corporations for the manufacture of gas in our 
 cities, and corporations, in the city or country, organized for the 
 grinding of the produce of the country for the general benefit in 
 various-ways of the people, at least, in the vicinity where such 
 business is carried on ? If, in the former case, the use of land may 
 be required for the erection of the necessary buildings and ma- 
 chinery and for the laying of pipes, so in the' latter case, the same 
 necessity may exist for the use of lands to carry on the business. 
 If there is any difference, it would seem to be one of degree and 
 not in principle. And under all the perplexing difficulties which 
 surround the exercise of this riojht in the various cases where it 
 
 to adhere to tlie powers so conceded to a court of equity, to restrain tlie viola- 
 
 them.to done more than the legislature tiou of such a contract with the legis- 
 
 has sauctioued, and to proceed only in lature, is bound to show that he has a 
 
 the mode which the legislature has private interest in the matter. Mayor 
 
 pointed out ; but (except in a proceed- of Liverpool v. Cborley Water- Works, 
 
 ingat the instance of the attoruey-geu- 3 De G., M. & G. 853. 
 eral), any one seeking the assistance of
 
 576 Pkivate Cokpoeations. 
 
 may be claimed or conferred, it would appear the most judicious 
 and practicable to allow the legislature to determine in its dis- 
 cretion those cases where it is proper to confer the power to exer- 
 cise it, and unless there is a manifest abuse of the discretion, to 
 allow no interference on the part of the courts with such dis- 
 cretion. That grist-mills are of public use and interest, and, 
 therefore, subject to legislative control in relation to the tolls 
 which may be taken by the ^proprietors of the same, is perhaps a 
 generally recognized doctrine of the courts. And statutory pro- 
 visions, relating to tolls, are quite common in the various states.^ 
 And in Alabama it has been held, that lands might under proper 
 legislative regulations be taken for grist-mills, which grind for 
 tolls, under the right of eminent domain.' 
 
 Sec. 402. Who to determine the question of public use. — Chancel- 
 lor Walworth, on this subject, makes the following observations : 
 " If the public interest can be in any way promoted by the taking 
 of private property, it must rest in the wisdom of the legislature 
 to determine whether the benefit to the public will be of sufficient 
 importance to render it expedient for them to exercise the right of 
 eminent domain and to authorize an interference with the private 
 rights of individuals for that purpose."' And Mr. Dillon, on 
 this subject, observes : " As the legislature is the sole judge of the 
 necessity which requires or renders expedient the exercise of the 
 power of eminent domain, without the owner's consent, so it is 
 the exclusive judge of the amount of land or the estate in land 
 which the public end to be subserved requires shall be taken. 
 But as the right originates in necessity, so it is limited by it." * 
 
 ^Fora discussion of the subject in '^Sadler v. Langham, 34 Ala. 311. 
 relation to the right to regulate the But see a contrary doctrine in Lough- 
 charges of even a private business, bridge v. Harris, 43 Ga. 500 ; Tj'ler v. 
 which is of general public interest, Beacher, 44 Vt. 648. 
 see aft^e, chap. 3, §89, and notes. As to ^ Beekman v. Saratoga and Sch. R. 
 the rii^ht of parties in Iowa, desiring Co., 3 Paige, 73. See, also, Wilson v. 
 to utilize water power, for the purpose Blackbird Creek Marsh Co., 2 Pet. 251; 
 of propelling any mill or machinery, Cooley on Const. Lim. 532 ; 2 Kent's 
 and of proceeding to exercise the right Com. 340. 
 of eminent domain, and to determine '*Dill on Corp., § 456. 
 the amount of damao-es in such cases, 
 see Code of Iowa (1873), chap. 10.
 
 Eminent Domain. 
 
 577 
 
 From the foregoing it would appear the appropriate if not 
 exchisive function of the legishiturc to determine the questioTi of 
 the necessity or expediency of exercising the right in favor of any 
 enterprise, or of conferring, in a general way, authority upon cor- 
 porations, to exercise the right, and that its determination is con- 
 clusive upon the question, as it is one of a political, and not 
 judicial character.' 
 
 But whether the appropriation sought by the person or corpo- 
 ration in a particular case, under the statutes providing for the 
 exercise of the right, and whether the use in such a case is one of 
 sufficient public interest, and required for corporate purposes, is 
 ordinarily a question to be determined by the courts." 
 
 •People V. Smith, 21 N. Y. 597; 
 Giesy v. Railroad Co., 4 Ohio St. 308 ; 
 Varick v. Smith, 5 Paige, 137. 
 
 ^ The legislature must determine in 
 the first instance whether the general 
 objects and purposes of a corporation 
 warrant the grant of the power to ex- 
 ercise the right of eminent domain on 
 the part of the corporation. But, in 
 relation to the particular circumstances 
 under which the exercise of the gen- 
 eral power is claimed, the courts may 
 properly determine the justice atid 
 sufficiency of the claim. 2 Kent's 
 Com. 340. But if the legislature de- 
 termine in a particular case that prop- 
 erty may be taken, this is, at least, 
 ordinarily, final. Varick v. Smith, 5 
 Paige, 137 ; Armington v. Barnet, 15 
 Vt. 745. 
 
 " But the question whether the speci- 
 fied use is a public use or purpose, or 
 such use or purpose as will justify or 
 sustain the compulsory taking of pri- 
 vate property, is perhaps ultimately 
 a judicial one, and if so the courts can- 
 not be absolutely concluded by the 
 action or opinion of the legislative de- 
 partment. But if the legislature has 
 declared the use or purpose to be a 
 public one, its judgment will be re- 
 spected by the courts, unless the use 
 be palpably private, or the necessity 
 for the taking is plainly without 
 reasonable foundation. But if the use 
 
 73 
 
 is public, or if it be so doubtful that 
 the courts cannot pronounce it not to 
 be such as to justify the compulsory 
 taking of private property the decision 
 of the legislature embodied in the en- 
 actment giving the power that a neces- 
 sity exists to take the property, is final 
 and conclusive." Rensselaer, etc., R. 
 Co. V. Davis, 43 N. Y. 137 ; Common- 
 wealth V. Breed, 4 Pick. 463 ; Bank- 
 head v. Brown, 25 Iowa, 540 ; Hanson v. 
 Vernon, 27 id. 28 ; Concord Railroad 
 V. Greely, 17 N. H. 47 ; 2 Kent's Com. 
 340 ; Memphis Freight Co. v. 3Iem- 
 phis, 4 Cold. (Tenn.) 419 ; Taylor v. 
 Porter, 4 Hill, 143 ; Hazen v. Essex 
 Co., 12 Gush. 477, where Shaw, J., 
 said : " It is contended that if this act 
 was intended to authorize the de- 
 fendant company to take the mill- 
 power and mill of the plaintiff it was 
 void because it was not taken for pub- 
 lic use, and it was not within the 
 power of the government in the ex- 
 ercise of the right of eminent domain. 
 This is the main question. In de- 
 termining it we must look to the de- 
 clared purpose of the act, and if a pub- 
 lic use is declared it will be so held, 
 xinless it manifestly appears by the 
 provisions of the act that they can 
 have no tendency to advance and pro- 
 mote the public use." See, also, 
 Talbot V. Hudson, 16 Gray, 417.
 
 578 Private Cokpokations. 
 
 Sec. 403, Limit of the right. — That tlie sovereign power to ex- 
 ercise the right of eminent domain is universally recognized, we 
 have already noticed. But this right is limited to the actual 
 necessities of the case, and no more property or rights can be 
 thereby acquired than is essential to accomplish the purposes 
 intended.' And where the circumstances only require the j)artial 
 use of land, as a limited quantity of soil, or stone, or other mate- 
 rials, such quantity may be taken. But a railroad or other coi"- 
 poration cannot acquire, by virtue of statutes conferring this right, 
 an interest in lands, soil, stone or other material, for the purpose of 
 speculation, or any other object than that of the execution of the 
 enterprise or business for which it was erected.''' I^or can the right, 
 as a general rule, be exercised, except to promote objects that are 
 useful, as contra- distinguished from such as are merely ornamen- 
 tal.^ The line, however, between such cases may be indefinite 
 and difficult to determine, for it is sometimes the case that those 
 objects which are really ornamental may also include those which 
 are useful. And so, vice versa^ those which are strictly useful 
 may also include those which are ornamental. It has been said, 
 since pubhc necessity is the basis of the right of eminent do- 
 main, that the right cannot be exercised except where the pur- 
 pose is useful, and, therefore, that property cannot be compulso- 
 rily acquired against the owner's consent when wanted merely for 
 ornamental purposes." 
 
 ' Stacey V. Vermont Cent. R. Co., 27 with precise localities, not difficult to 
 Vt. 39; Hill v. Western Vermont R. be provided for without the power of 
 Co., 32 id. 68 ; Rensselaer & Saratoga eminent domain, and in places where 
 R. Co. V. Davis, 43 N. Y. 137 ; Lance's it would only be convenient but not 
 Appeal, 55 Penn. St. 16 ; Oregon Cas- necessary, I entertain strong doubts 
 cade Co. V. Bailey, 3 Or. 164; Giesyv. of its applicability." See, also, Bos- 
 Cincinnati, etc., R. Co., 4 Ohio St. ton Mill Co. v. Newman, 12 Pick. 
 308; Miami Coal Co. v. Wigton, 19 476; Bankhead v. Brown, 25 Iowa, 
 id. 560; Union Bridge Co. v. Troy, etc., 540; Eldridge v. Smith, 34 Vt. 484. 
 R. Co., 7 Lans. 240. ^ Angell on Highwavs, §85 ; Smith's 
 
 2 Aldrich v. Drury, 8 R. I. 554; Com. on Stat, and Const. Law, § 335. 
 Blake v. Rich, 34 N. H. 282; Chapin See, also, Memphis Freight Co. v. 
 v. Sullivan R. Co., 39 id. 564 ; Henry Memphis, 4 Coldw. (Tenn.)4l9. 
 
 V. Dubuque & Pac. R. Co. , 2 Iowa, 288. But the whole fee may be taken. 
 
 3 Woodstock V. Gallup, 28 Vt. 587; In New York, under the general 
 S. C, 29 id. 347 ; West River Bridge railroad act, the corporation has a 
 Co. v. Dix, 6 How. 545. In the case large discretion in reference to the 
 last cited, Woodbury, J., after a measure of its wants. In re N. Y. 
 learned consideration of the subject, Central, etc., v. Metropolitan Gas-light 
 says : ' ' When we go to other public Co., 63 N. Y . 826. 
 
 uses, not so urgent, not connected
 
 Eminent Domain. 579 
 
 If only a portion of another's premises are required for public 
 use, tliis will not justify taking the whole ; but if, under the 
 claim of eminent domain, premises are taken and compensa- 
 tion provided for the taking, and the owner accepts the compen- 
 sation without objection, he will not be permitted to say after- 
 ward that more was taken than was required for the public's use. 
 And he would be estopped from reclaiming the premises thus 
 taken, as his assent thereto would be presumed.' Although suffi- 
 cient land may be taken, by virtue of this right, that is not only 
 absolutely necessary for the accomplishment of the object, and 
 also such as will be incidentally convenient, but, if only part of 
 a lot is required for the purpose, a whole lot cannot bo appropri- 
 ated, even though compensation be made therefor. Thus, in New 
 York, where a statute provided that, whenever a pai't of a lot 
 was required for a street in a city, the whole lot luight be valued, 
 and that after its valuation and compensation made as provided 
 by law, the title should vest in the city, which might appropriate 
 the same to a public use, or sell the same, it was held by the 
 supreme court of that state that such appropriation was not jus- 
 tified by any principles which relate to the right of eminent 
 domain.^ 
 
 ' Embury v. Conner, 3 N. Y. 511. in violation of the letter of the consti- 
 
 ' Matter of Albany Street, 11 Wend, tution, it is of its spirit and cannot be 
 
 151. In this case Savage, C. J., re- supported. This power has been sup- 
 
 fers to the provision of the statute posed to be convenient when the 
 
 under which the claim to take the greater part of a lot is taken, and only 
 
 property was based, and observes : a small part left, not required for pub- 
 
 ' ' If this provision was intended lie use, and that small part of little 
 
 merely to give the corporation capacity value in the liands of the owner. In 
 
 to take property under such circum- such case the corporation has been 
 
 stances with the consent of the owner, supposed best qualified to take and dis- 
 
 and then to dispose of the same, there pose of such parcels, or gores, as 
 
 can be no objection to it ; but if it is they have sometimes been called ; and 
 
 to be taken literally, that the commis- probably this assumption of power 
 
 sioners may, against the consent of the has been acquiesced in by the proprie- 
 
 owner, take the whole lot when only tors. I know of no case where the 
 
 a part is required for public use, and power has been questioned, and where 
 
 the residue to be applied to private it has received a deliberate sanction of 
 
 use, it assumes a power which with this court. Suppose a case where 
 
 all respect the legislature did not pos- only a few feet, or even inches, are 
 
 sess. The constitution, by authorizing wanted from one end of a lot to widen 
 
 the appropriation of property to public a street, and a valuable building 
 
 use, impliedly declares that for any stands upon the other end of such lot, 
 
 other use private property shall not be would the power be conceded to exist 
 
 taken from one and applied to the to take the whole lot, whether the 
 
 private use of another. It is in viola- owner consented or not? The quan- 
 
 tion of natural right ; and if it is not tity of the residue of any lot cannot
 
 580 Private Corporations. 
 
 Sec. 404:. who is to determine, as to the extent, amount or quzintity 
 of land or other property that may be taken. — It has already been said 
 that the legislature may, by general laws, provide that corpora- 
 tions or other persons may take lands or other private property, 
 for the execution of their private puq^oses, provided they are of 
 public interest and benefit ; and that it is the appropriate func- 
 tion of the legislature, as the representative in this respect of the 
 state and of the public interests, to determine, generally, the ques- 
 tion as to the public use of any private enterprise ; and that unless 
 there is a manifest and flagrant abuse of the discretion of the leg- 
 islature in this respect, the courts will not interfere with it. But 
 the question may arise, as we have seen, as to the right as well as 
 the extent of the right of condemnation, in particular cases. 
 
 The legislature may provide by general statutes for the con- 
 demnation, and allow private corporations to take such property, 
 to carry out the purposes for which they were organized, provided 
 they are also of public use, of which it is the principal if not the 
 sole judge, provided they render compensation therefor. But who 
 shall determine what quantity or amount of property or interests 
 may be taken under such general laws, for the purpose of carry- 
 ing out corporate objects ? 
 
 Under the general laws referred to, corjDorations may proceed 
 to take private property by having the same appraised as provided 
 by the statute and on the payment of the value thereof. But where 
 is the limit to the property which may be taken 1 And who shall 
 determine the amount or extent of the same ? And what is the 
 nature and extent of the interest acquired by such corporations ? ^ 
 
 vary the principle. The owner may pose of private property, whether feet 
 
 be very unwilling to part with only or acres are the subject of this assumed 
 
 a few feet ; and I hold it equally in- power." 
 competent for the legislature to dis- 
 
 ' In Beekman v. Saratoga, etc., R. was competent for the legislature to 
 
 Co., 3 Paige's Ch. (N. Y.) 45, it was authorize the company to agree with 
 
 held that it rested in the sound discre- the owners of land through which the 
 
 tion of the legislature to determine road was to run for a conveyance or 
 
 whether the benelit to the public would donation of the lands necessary for 
 
 be of sufficient public importance to that purpose ; and it would be both 
 
 render it expedient for them to exer- inequitable and unjust for an individ- 
 
 cise the right of eminent domain. In ual who had consented to give the site 
 
 this case. Chancellor Walworth ob- of the road, provided it should run 
 
 served: "There is no doubt that it through his land, to retract that
 
 Eminent Domain. 
 
 581 
 
 Sec. 405. Same continued. — Under these general statutes, the 
 title in fee-simple is not, perhaps, generally transferred to, or 
 vested in, the corporation, Ijj its express provisions ; but the gen- 
 eral principles applicable to the measure of damages for the 
 
 consent after the company had, in ref- 
 erence to such agreement, contracted 
 with the owners of other lands on 
 that particular route. And if such 
 consent was not in fact retracted be- 
 fore the directors of the company had 
 made their certificate of location, so 
 as to preclude themselves from laying 
 out the road elsewhere, it would be 
 the duty of this court to compel a 
 specific performance of the verbal 
 agreement made with them before 
 that time. I infer, however, from the 
 affidavits in this case, that the com- 
 plainant altered his mind, and re- 
 tracted his consent to the location of 
 the road on his premises at any place 
 west of the barn, before the second of 
 September, when the certificate of lo- 
 cation was signed by the directors. 
 
 "The constitution of the United 
 States does not come in question in 
 this cause. It is admitted that the 
 complainant held the laud in fee ; and 
 probably under a title derived from 
 the crown, to the riglits of which the 
 people have now succeeded. A law 
 declaring the grant from the crovvu 
 void, and divesting his title on that 
 ground, would impair the obligation 
 of the contract. But it was no part of 
 the contract between the crown and 
 its grantees or their assigns, that the 
 property should not be taken for pub- 
 lic use, upon paying a fair compensa- 
 tion therefor, whenever the public 
 interest or necessities required that it 
 should be so taken. All separate in- 
 terests of individuals in property are 
 held of the government under this 
 tacit agreement or implied reservation. 
 Notwithstanding the grant to individ- 
 uals, the eminent domain, the highest 
 and most exact idea of property, re- 
 mains in the government, or in the 
 aggregate body of the people in their 
 sovereign capacity ; and they have a 
 right to resume the possession of the 
 property, in the manner directed by 
 the constitution and laws of the state, 
 whenever the public interest requires 
 it. This right of resumption may be 
 exercised not only where the safety, 
 but also where the interest or even 
 
 the expediency, of the state is con- 
 cerned; as where tlie land of the indi- 
 vidual is wanted for a road, canal, or 
 other public improvement. The only 
 restriction upon this posver, in cases 
 where the public or the inhabitants of 
 any particular section of the state 
 have an interest in the contemplated 
 improvement as citizens merely, is 
 that the property shall not be taken 
 for the public use without just com- 
 pensation to the owner, and in the 
 mode prescribed by law. Tlie right 
 of eminent domain does not, however, 
 imply a right in the sovereign power 
 to take the property of one citizen 
 and transfer it to another, even for a 
 full compensation, where the public 
 interest will be in no way promoted 
 by such transfer. And if the legisla- 
 ture should attempt thus to transfer 
 the property of one individual to an- 
 other, where there could be no pre- 
 tense of benefit to the public by such 
 exchange, it would probably be a vio- 
 lation of the contract by which the 
 land was granted by the government 
 to the individual, or to those under 
 whom he claimed title, and repugnant 
 to the constitution of the United 
 States. But if the public interest can 
 be in any way promoted by the taking 
 of private property, it must rest in 
 the" wisdom of the legislature to de- 
 termine whether the benefit to the 
 public will be of sufficient importance 
 to render it expedient for them to ex- 
 ercise the' right of eminent domain, 
 and to authorize an interference with 
 the private rights of individuals for 
 that purpose. 3 Kent's Com. 340. It 
 is upon this principle that the legisla- 
 tures of several of the states have 
 authorized the condemnation of the 
 lands of individuals for mill-sites, 
 where from the nature of the country 
 such mill-sites could not be obtained 
 for the accommodation of the inhabit- 
 ants without overflowing the lands 
 thus condemned. Upon the same 
 principle of public benefit, not only 
 the agents of the government, but 
 also individuals and corporate bodies, 
 have been authorized to take private
 
 582 
 
 Private Coepoeations. 
 
 taking contemplate a valuation of the entire interest. And it is 
 probable, at least, that the interest or estate vested in the eoi-pora- 
 tion, bj virtue of the statutes, is the whole estate for any purpose 
 required by the corporation in carrying out the objects of its crea- 
 tion, subject, however, in most cases, to a reversion to the original 
 owner, or his heirs or assigns, in case such corporation shall cease 
 to use or occupy such property for corporate purposes.* 
 
 property for the purpose of making 
 public highways, turnpike roads, and 
 canals ; of erecting and constructing 
 wharves and basins ; of establishing 
 ferries ; of draining swamps and 
 marshes ; and of bringing water to 
 cities and villages. In all such cases 
 the object of the legislative grant of 
 power is the public benefit derived 
 from the contemplated improvement, 
 whether such improvement is to be 
 effected directly by the agents of the 
 government, or through the medium 
 of corporate bodies, or of individual 
 enterprise. And according to the 
 opinion of Chief Justice Marshall, in 
 the case of Willson v. The Black Bird 
 Creek Marsh Company, 2 Pet. 251, 
 measures calculated to produce such 
 benefits to the public, though eifected 
 through the medium of a private in- 
 corporation, are undoubtedly within 
 the powers reserved to the states, pro- 
 vided they do not come in collision 
 with those of the general government. 
 It is objected, however, that a railroad 
 differs from other public improve- 
 ments, and particularly from turn- 
 pikes and canals, because travelers 
 cannot use it with their own carriages, 
 and farmers cannot transport their 
 produce in their own vehicles ; that 
 the company in this case are under no 
 obligation to accommodate the public 
 with transportation ; and that they are 
 unlimited in the amount of tolls 
 which they are authorized to take. If 
 the making of a railroad will enable 
 the traveler to go from one place to 
 another without the expense of a car- 
 riage and horses, he derives a greater 
 benefit from the improvement than if 
 he was compelled to travel with his 
 own conveyance over a turnpike road 
 at the same expense. And if a mode 
 
 of conveyance has been discovered by 
 which the farmer can procure his pro- 
 duce to be transported to market at 
 half the expense which it would cost 
 him to carry it there with his own 
 wagon and horses, there is no reason 
 why the public should not enjoy the 
 benefit of the discovery. And if any 
 individual is so unreasonable as to 
 refuse to have the railroad made 
 through his lands for a fair compensa- 
 tion, the legislature may lawfully ap- 
 propriate a portion of his property for 
 this public benefit, or may authorize 
 an individual or corporation thus to 
 appropriate it, upon paying a just 
 compensation to the owner of the land 
 for the damage sustained. The ob- 
 jection that the corporation is under 
 no legal obligation to transport pro- 
 duce or passengers upon this road, 
 and at a reasonable expense, is un- 
 founded in fact. The privilege of 
 making a road and taking tolls thereon 
 is a franchise, as much as the estab- 
 lishment of a ferry or a public wharf, 
 and taking tolls for the use of the 
 same. The public have an interest in 
 the use of the railroad, and the own- 
 ers may be prosecuted for the damages 
 sustained, if they should refuse to 
 transport an individual, or his prop- 
 erty, without any reasonable excuse, 
 upon being paid the usual rate of 
 fare. The legislature may also from 
 time to time regulate the use of the 
 franchise and limit the amount of 
 toll which it shall be lawful to take, 
 in the same manner as they may regu- 
 late the amount of tolls to be taken 
 at a ferry, or for grinding at a mill, 
 unless they have deprived themselves 
 of that power by a legislative contract 
 with the owners of the road." 
 
 ' See 1 Redf. on Rail.,§ 69; Connect!- of the various states, giving the power 
 cut, etc., R. Co. V. Holton, 33 Vt. 43. to exercise the right of eminent domain, 
 J The provisions of the general statutes are perhaps quite similar ; and the
 
 Eminent Domain. 
 
 583 
 
 In Massacliusetts the supreme court of that state in one case 
 say: "The right acquiredby the corporation, although technically 
 an easement, yet requires for its enjoyment a use of the land per- 
 
 rights acquired thereby, as well as the 
 extent of the same, would be similar 
 under the various statutes. 
 
 The Code of Iowa on this subject 
 provides : 
 
 "§ 1241. Any railroad corporation 
 organized in this state may take and 
 hold, under the provisions of this 
 chapter, so much real estate as may be 
 necessary for the location, construc- 
 tion, and convenient use of its rail- 
 way, and may also take, remove and 
 use for the construction and repair of 
 said railway and its appurtenances 
 any earth, gravel, stone, timber or 
 other materials, on or from the laud so 
 taken ; and the land so taken other- 
 wise than by the consent of the own- 
 ers, shall not exceed one hundred feet 
 in width, except for wood and water 
 stations, unless where greater width 
 is necessary for excavation, embank- 
 ment, or depositing waste earth. 
 
 " § 1243. It may also take and hold 
 additional real estate at its water sta- 
 tions, for the purpose of constructing 
 dams and forming reservoirs of water 
 to supply its engines. Such real es- 
 tate shall, if the owner requests it, be 
 set apart in a square or rectangular 
 shape, including all the overflowed 
 land, by the commissioners, as herein- 
 after provided ; but the owner of the 
 land shall not be deprived of access to 
 the water or the use thereof in com- 
 mon with the company on his own 
 land. And the dwelling-house, out- 
 house, orchards and gardens of any 
 persons shall not be overflowed or 
 otherwise injuriously affected by any 
 proceeding under this section. 
 
 " § 1243. Any such railway corpora- 
 tion may lay down pipes through any 
 land adjoining the track of the rail- 
 way, not a greater distance than three- 
 fourths of a mile therefrom, unless by 
 consent of the owners of the land 
 through which the pipes may pass 
 beyond that distance, and maintain and 
 repair such pipes, and thereby conduct 
 water for the supply of its engines from 
 any running stream, and shall, without 
 unnecessary delay, after laying down 
 or repairing such pipes, cover the 
 same so as to restore the surface of 
 , the land through which tlie same may 
 
 pass to its natural grade, and shall, as 
 soon as practicable, replace any fence 
 that it may be necessary to open in 
 laying down or repairing such pipes, 
 and the owner of the land, through 
 which the same may be laid, shall 
 have a right to use the land through 
 which such pipes pass in any manner 
 so as not to interfere therewith ; said 
 pipes shall not be laid to any spring, nor 
 be used so as injuriously to witlidraw 
 the water from any farm ; provided, 
 that such corporation shall be liable to 
 the owner of any such lands for any 
 damages occasioned by laying down, 
 regulating, keeping open, or repairing 
 such pipes, such damages to be recov- 
 erable from time to time as they may 
 accrue in any ordinary action in any 
 court of competent jurisdiction. Otlier 
 provisions of the statute point out the 
 mode in which the compensation to 
 the owner must be ascertained, and 
 for an appeal from the determination 
 of the commissioners, selected by the 
 sheriff for that purpose. The report 
 of the commissioners, where not ap- 
 pealed from, and the amount of dam- 
 ages assessed is deposited with tbe 
 sheriff, may be filed with and recorded 
 in the office of the recorder of deeds 
 in the county wbere the lands are 
 situate, and such record is presump- 
 tive evidence of title in the corporation 
 to the property so taken, and is con- 
 structive notice of the rights of the 
 corporation therein." Iowa Code (1873), 
 ^ 1253. 
 
 Mr. Kedfield thinks it very question- 
 able, whether a railroad company in 
 such cases is entitled to the herbage 
 growing upon the land, or to cultivate 
 the same, or dig for stone or minerals 
 in the land beyond what is necessary 
 for their purposes in construction. 
 Redf. on Rail., § 69. And the express 
 provision of the English statute on 
 tbis subject is to the same effect. 8 and 
 
 9 Vict., chap. 20, § 17. See, also. Baker 
 V. Johnson, 2 Hill, 342 ; Preston v. 
 Dubuque, etc., R. Co., 11 Iowa, 15. But 
 see Chicago, etc., R. Co. v. Patchin, 
 
 10 111. 198. 
 
 In Evans v. Haefner, 29 Mo. 141, it 
 was held that earth and minerals above 
 grade might be used by the company.
 
 584 
 
 Private Cokporations. 
 
 manent in its nature and practically exclusive." ^ And in another 
 case, in reference to the riglits of raih-oad corporations, Shaw, C. 
 J., observes: " The railroad company are authorized to do all acts 
 
 but that those below belonged to the 
 owuer. 
 
 lu Hill V. Western Vermont Rail- 
 way Company, 33 Vt. 68, the facts 
 were as follows: The Western Ver- 
 mont Railway Company, before their 
 road was laid out or surveyed, pro- 
 cured a bond from B. to sell them 
 such lands owned by him as should 
 be required for their road. Their 
 charter provided that the directors 
 might cause such surveys of the 
 road to be made as they deemed neces- 
 sary and fix the line of the same, and 
 that the company might enter upon 
 and take possession of such lands 
 as were necessary for the construction 
 of their road and requisite accommoda- 
 tions. The survey of the road, made 
 by order of the directors, designated 
 certain land belonging to B. as depot 
 grounds, and the company paid him 
 for and took the same, but never 
 received any conveyance thereof from 
 him. The plaintiff, having recovered 
 a judgment against the company, lev- 
 ied his execution upon a portion of 
 this land and brought ejectment 
 against the company to recover pos- 
 session thereof. The referee, to whom 
 the case was referred, found that a 
 part of the land embraced in the levy 
 was never necessary to the company 
 for railroad purposes and would not 
 become so prospectively. It was held 
 that by B.'s contract with the company 
 he was not bound to convey to them 
 any greater quantity of, or estate in, 
 his laud than they required for depot 
 accommodations ; that under their 
 charter the company could not com- 
 pulsorily acquire any more land, or 
 any greater estate therein, for the 
 purposes of a road-bed or stations than 
 was really requisite for such uses ; 
 that the estate so requisite was not 
 one in fee-simple, but merely an ease- 
 ment, and was, therefore, not subject 
 to be levied upon by the creditors of 
 the company ; that when taken for 
 such purposes the rule was the same, 
 whether the land was taken compul- 
 sorily by condemnation and the award 
 
 of commissioners, as to its extent and 
 price, or under the agreement of the 
 parties as to one or both of these par- 
 ticulars ; that under their charter the 
 directors had power to lay out their 
 road and stations as they saw fit, and 
 that so long as they acted in good 
 faith, and not recklessly, their decision 
 as to the quantity of land required for 
 depot accommodations would be re- 
 garded as conclusive. 
 
 Redfield, C. J., said: " This is an 
 action of ejectment to recover posses- 
 sion of certain lands which the defend- 
 ants purchased of one Burton for 
 depot purposes about one of their 
 stations and which the referee, in this 
 case, has'found were not necessary for 
 the present or prosjiective use of the 
 company for that purpose ; the excess, 
 according to the opinion of the referee, 
 being some acres. The plaintiff, 
 being a creditor of the company, levied 
 upon this excess together with a con- 
 siderable number of acres more which 
 the referee finds are necessary for the 
 use of the company for the purposes 
 for which they were procured. The 
 appraisal and levy was upon the en- 
 tire portion of land, both that which 
 was and that which was not necessary 
 for the uses of the company. 
 
 " The company, before they sur- 
 veyed their road, contracted with Bur- 
 ton for the conveyance of ' such lands ' 
 owned by him ' as shall be required ' 
 for the company's road ' on reasonable 
 request.' The land was subsequently 
 designated by metes and bounds, and 
 the money paid for the piece, but the 
 land has never been conveyed to the 
 company. 
 
 " The first question arising in the 
 case is as to the extent of estate which 
 Burton is bound to convey to the com- 
 pany. The plaintiff claims that this is 
 an estate in fee-simple as the contract 
 binds him to convey such lands 
 ' owned by him ' as shall be required 
 by the company. This is no doubt 
 the fair and natural construction of 
 such a contract between ordinary par- 
 ties. If the land is to be conveyed 
 
 ' Hazen v. Boston, etc., R. Co., 3 Gray, 574.
 
 Eminent Domain. 
 
 585 
 
 within five rods, which by law constitute their limits in taking 
 away or leaving gravel, trees, stones or other objects, which in their 
 judgment may be necessary and proper to the grading and level- 
 
 and is defined as land ' owned ' by the 
 obligor nothing less could be fairly 
 intended, in ordinary cases, than an 
 estate in fee-simple. But here the land 
 is purchased and to be conveyed to 
 the company for their use 'such as 
 shall be required by them.' We do 
 not understand by this all the lands 
 they might ask for but such as their 
 powers and functions and business re- 
 quired. We do not think the scope of 
 the bond could fairly be made to ex- 
 tend beyond this. It would be very 
 unreasonable, as it seems to us, to con- 
 strue this bond as extending beyond 
 this, and including at the election of 
 the defendants, all the land owned by 
 Burton and lying near the line of the 
 railway. 
 
 " So, too, it seems to us, that as Bur- 
 ton, by the fair construction of the 
 bond, was only bound to convey such 
 lands as were reasonably required for 
 the legitimate uses of the company so 
 he was only bound to convey such es- 
 tate therein as they required for those 
 uses. If the extent of territory could 
 fairly be defined and limited by the 
 general objects and purposes of the 
 contract, which is a general rule of 
 construing all contracts, and as applied 
 to a case of this character, a most sig- 
 nificant and unquestionable one, we 
 think the same rule also applies with 
 equal force to the estate to be con- 
 veyed. A contract to convey land for 
 a particular use or to a party having 
 capacity to acquire a certain estate in 
 land for a particular use, must, of ne- 
 cessity, carry the implication of such 
 limitation upon the estate to be con- 
 veyed. 
 
 " We think, therefore, that the bond, 
 as orignally given, would not have 
 bound the party to convey more laud 
 than the company fairly required for 
 their legitimate uses under tlieir char- 
 ter or any greater estate in the land 
 than such uses justly required. That 
 is just what the company were em- 
 powered to take conipulsorily. And 
 their charter, as we think, was not in- 
 tended to give them power to acquire 
 any more land or any greater estate 
 in such land, for the purpose of a 
 
 74 
 
 road-bed or stations, than was really 
 requisite for such uses under their 
 charter. We do not intend to say tliat 
 if they purchased and took the con- 
 veyance of the fee of land for tlie.se 
 purposes, they could not hold it or con- 
 vey it, although some courts have so 
 held. Nor do we intend to intimate 
 any decided opinion that they may do 
 this. The general provisions of the 
 charter of this company are much like 
 other charters in this and the other 
 states, and similar to the general rail- 
 way act, and seem to have reference 
 to acquiring the right to such an estate 
 in the necessary lands as is requisite 
 for the road-bed and other incidental 
 use and accommodation of the com- 
 l^any in their prescribed and necessary 
 business. 
 
 " The company may purchase lands 
 for wood and timber for their ordinary 
 uses and may, no doubt, purchase, 
 take and hold and also convey the fee- 
 simple of such lands. We are not 
 inclined here to question the right of 
 this company to take the fee of lands 
 by way of gift or in payment of debts 
 due them, either by voluntary convey- 
 ance or by levy, in invitum. It is not 
 important to discuss these propositions 
 here. They may all be conceded. 
 
 " But they do not aSect the question 
 what extent of land and what estate 
 the company were expected to take, 
 by purchase or gift or by condemna- 
 tion, for their road-bed and depots. 
 We think it very obvious, from this 
 charter and many others we have ex- 
 amined where the quantity of estate 
 is not defined, that it should be con- 
 strued as we have already intimated 
 in regard to the bond of Burton, ac- 
 cording to the object and purport of 
 the grant, and the necessities or wants 
 of the corporation thereby created. It 
 seems to us to be leaving all just limits 
 of construction to go beyond this. It 
 is certain, as already intimated, that 
 this is the ordinary rule of construing 
 contracts. And statutes are generally 
 construed much after the same rules as 
 contracts and especially statutes of this 
 character which are much in tlie nature 
 of contracts between the sovereignty
 
 686 
 
 Private Corporations/ 
 
 iiig of the road, in adjusting and adapting it to other roads, 
 brid^'-es, buildings, and the like, so as to render it most conducive 
 to the public uses which the railway is intended to accomplish. 
 
 and the slaareholders, or, strictly 
 speaking, between the sovereignty and 
 the corporation. In other words, the 
 charter is a grant of certain franchises 
 and immunities, upon certain terms 
 and conditions, and with certain speci- 
 fied or implied limitations. These con- 
 ditions and limitations are the consid- 
 eration and the counterpart, so to 
 speak, of the grant. By accepting the 
 grant the corporation bind themselves 
 to perform the obligations and duties 
 reasonably and fairly implied by the 
 conditions of the grant, so that the 
 charter should receive the same con- 
 struction as any other contract of a 
 similar character. 
 
 " One of the important franchises of 
 railway corporations, and the one 
 which distinguishes corporations of 
 this public character from ordinary 
 business corporations, on account of 
 its sovereign or prerogative character, 
 is that right which in the sovereign is 
 called eminent domain, which is the 
 power to invade private property and 
 appropriate it to its own purposes. 
 The right to exercise this function is 
 made dependent upon rendering an 
 equivalent in money, and the implied 
 compact not to acquire more land than 
 they need. And the charters or gen- 
 eral laws, in most of the American 
 states, allow the details of the appro- 
 priation of lands to the use of railways 
 to be arranged either by the judgment 
 of certain public functionaries desig- 
 nated for thai purpose, or by the con- 
 sent of the land-owner. But in the 
 latter mode even the proceeding is, in 
 some sense, compulsory. The land- 
 owner does not stand precisely in the 
 position of an ordinary proprietor in 
 the market. He has no election 
 whether he will part with his land or 
 not, but only whether he will fix the 
 terms by negotiation or by the ap- 
 praisal of the commissioners or the 
 court. In either mode of appropriat- 
 ing land for the purposes of the com- 
 pany, where they have by their char- 
 ter the power to take it compulsorily, 
 there is this implied limitation upon 
 the power that the company will take 
 only so much land or estate therein as 
 
 is necessary for their public purposes. 
 It does not seem to us to make much 
 diflfereuce in regard to either the quan- 
 tity or the estate, whether the price is 
 fixed by the commissioners or by the 
 parties. For under this charter it is 
 the act of the directors which desig- 
 nates the extent of land to be taken, 
 and thus far the taking is compulsory 
 and strictly under the powers granted 
 by the charter. 
 
 "In regard to the mode of appro- 
 priating land to the purposes of the 
 road-bed and depots of a railway com- 
 pany, it is obvious that it should be 
 done in some way which shall be 
 judicial and final, for the time at least. 
 This is necessary both for the com- 
 pany and the land-owner, and when 
 done in the mode pointed out in the 
 charter, it must be final, or should be 
 so, unless some power is reserved, 
 either expressly or impliedly, to 
 change the location of the road, as in 
 the defendants' charter seems to be 
 given, or to enlarge its facilities with 
 the advancement of business, which 
 this charter does not give in terms. 
 This is not ordinarily reserved to rail- 
 ways. When once located, the loca- 
 tion is commonly regarded as final. 
 They must take such lands as will be 
 likely to accommodate their business, 
 both present and prospective. In do- 
 ing this it would not be wonderful if 
 they should take more, sometimes, 
 than every one regarded as necessary. 
 The same may be true of their road- 
 bed. A jury or referee might well 
 consider, in many cases, no doubt, that 
 at many points four or five rods, or 
 even three rods in width, was just as 
 beneficial for all the purposes of the 
 road as six rods, which some of the 
 early chartered roads in this state are 
 allowed to take and do take. The 
 same may be often true of the land 
 taken for depot accommodations. 
 
 " But if the road-bed or land for sta- 
 tions is taken in the mode prescribed 
 in the charter and general law of the 
 state, whether by the judgment of the 
 commissioners, as to its extent as well 
 as the land damages, or by the act of 
 the directors through their surveyors
 
 Eminent Domain. 
 
 587 
 
 Whatever acts, therefore, are requisite to the safety of passengers 
 on the railway, to the agents, servants, and persons employed by 
 the company, and to the safe passage of travelers on and across 
 highways and roads connected with it, and wliicli can be done 
 within the five rods, the company have a right, under their act of 
 incorporation, to do. Tiiis is embraced in the idea of taking land 
 for public use." ^ 
 
 But it may be affirmed that the current of decisions in tliis 
 
 and engineers, as to its extent, and 
 the appraisal of the commissioners as 
 to its value, or by the directors as to 
 its extent, or the agreement of parties 
 as to the price, as in this case, when 
 once taken in the mode prescribed in 
 the charter, as this land was taken, it 
 is regarded as well settled that the 
 land so taken is not subject to the levy 
 of an execution. This is put upon the 
 ground, and justly, we think, that the 
 estate, being a mere easement for a 
 particular use, is not of the quality 
 and character which by the statute is 
 made subject to a levy. This is not 
 an estate in fee, or for life, or years, 
 or indefinitely, or an equity of redemp- 
 tion, which are the estates defined in 
 the statute. But it is an easement, a 
 right to use the land in a particular 
 mode for a particular purpose, and 
 which cannot be transferred to an or- 
 dinary person having no right to use 
 it in that mode or for that purpose, 
 since the estate would cease and the 
 land revert the moment it was put to 
 any other use than the one designated 
 in the charter or statute by or under 
 which the appropriation was made. 
 
 " So that whether the company take 
 more or less, if taken for these pur- 
 poses and no other, and only an ease- 
 ment is acquired by the company, it is 
 not an estate which can be transferred 
 by a levy to the creditors of the com- 
 pany, or by any conveyance, in par- 
 cels, probably. But of this we need 
 not speak. It is certain the statute 
 has not provided for levying upon any 
 such estate. And this, we think, is 
 tlie only estate for which the company 
 contracted with Burton, or which he 
 is bound to convey to them. 
 
 " And as to the quantity of land 
 taken, if the directors of the company 
 have power to lay out their own road 
 in any place they choose, and to tlie 
 extent of five rods in width, and to 
 take such lands for depot purposes as 
 they deem expedient, and they have 
 acted in good faith, we do not see very 
 well how their proceedings can be 
 brought in question by any one. It 
 may have been the folly of the legisla- 
 ture to grant any such power to the 
 directors of the company, but if they 
 have done so, and this power is alto- 
 gether unlimited, unless they act rashly 
 or in bad faith, it is not very obvious 
 how they are to be controlled in the 
 matter. No doubt if they act reck- 
 lessly or extravagantly, so as to indi- 
 cate either utter incompetence, or cor- 
 ruption, or undue influence, or bad 
 faith, a court of equity, at the suit of 
 the land-owner or the stockholders, 
 would set the matter right. But this 
 would thus be done in such a mode as 
 to settle it definitely and not to leave 
 it subject to the confusion consequent 
 upon subjecting it to the action of in- 
 dependent tribunals, in regard to por- 
 tions of the land taken for the same 
 purpose, whose decisions would al- 
 most inevitably produce more or less 
 confusion and uncertainty. But so 
 long as the land is appropriated to the 
 road-bed and depot purposes in the 
 very mode prescribed in the statute, 
 w'e do not very well comprehend how 
 it can be appropriated in parcels to the 
 payment of the debts of the company, 
 by means of levies, even if the fee 
 had been conveyed to the company." 
 
 ' Brainard v. Clapp, 10 Cush. 
 chin, 16 111. 198. 
 
 6. See, also, Chicago, etc., R. Co. v. Pat-
 
 588 
 
 Private Corporations. 
 
 country as well as in England, in regard to the title acquired by 
 the exercise of the right of eminent domain, is that the former 
 owner retains the title, subject to the proper use of the corporation 
 for the purposes for which it was authorized to be taken, and that 
 the owner may still maintain an action of trespass for any use or 
 injury of the freehold, not authorized by the proper use or exercise 
 of corporate powers or any injury to the freehold by a stranger.^ 
 It is a matter which is usually the subject of statutory regula- 
 tion, and the (|uestion depends largely upon the construction 
 put by the courts upon such local statutes. The rights acquired 
 by corporations under such statutes must depend upon such local 
 construction. But it would appear reasonable that, where under 
 such provisions the corporations are required to pay the full value 
 of the propei'ty taken for corporate purposes, they should be 
 vested with the whole interest subject- to reversion in case of 
 abandonment as before stated.^ 
 
 1 Dovaston v. Payne, 2 H. Bl. 527; 2 
 Roll. Abr. 566, p. 1 ; Rust v. Low, 6 
 Mass. 90; Jackson v. Rutland, etc., R. 
 Co., 25 Vt. 151 ; Redf . on Rail., § 69, 
 and notes. But see Nicoll v. New 
 York & Erie R. Co., 12 Barb. 460, 
 where a more extended doctrine of the 
 rights of railroad corporations on this 
 question is held, viz. : "Corporations 
 have a fee-simple for purposes of 
 alienation, but they have only a deter- 
 minable fee for purposes of enjoy- 
 ment " 
 
 •^ In Blake v. Rich, 34 N. H. 285, it is 
 held that a railway takes but a mere 
 easement in lands. Fowx,ER, J., says: 
 "Does the railroad corporation ac- 
 quire any such higher, more extensive 
 and more exclusive right V " (than the 
 public and the public authorities gain 
 by the laying out of such lands as a 
 public highway.) "A careful exami- 
 nation of the various statutes authoriz- 
 ing the taking of lands for railroads, 
 and a comparison of the language with 
 that of those statutes providing for the 
 taking of land for highways, satisfies 
 us it does not, and we see nothing in 
 the use to which the land is appro- 
 priated in the one case, and the other 
 requiring the same phraseology to be 
 differently construed in the two cases. 
 By the theory as well as the letter of 
 the law the taking in both cases is 
 for the public use, and that use is no 
 
 more inconsistent with the continuance 
 of the fee in the original owner in the 
 case of a railroad than in that of a 
 highway." But in Railroad Company 
 V. Davis, 2 Dev, & Bat. 467, Rufpin, 
 C. J., says: " The doctrine of the com- 
 mon law is, that the public has only 
 an easement in the land over which a 
 road passes, and that the right of soil 
 is undisturbed thereby. The reason 
 is, that ordinarily the interest of the 
 public requires no more. Every bene- 
 ficial use is included in the easement, 
 in respect at least to such highways as 
 exist at the time the principle was 
 adopted, and to which it had reference. 
 But if the use requisite to the public 
 be such a one as requires the whole 
 thing, the same principle which gives 
 to the public the right to any use 
 gives the right to the entire use, upon 
 paying adequate compensation for the 
 whole. It is for the legislature to 
 judge in cases in which it map be for 
 the public interest to have the use of 
 private property, whether in fact the 
 public good requires the property, 
 and to what extent. From the great 
 cost of this road (a railway), from its 
 nature and supposed utility, it seems 
 to be contemplated to preserve it per- 
 petually, or for a great and indefinite 
 period. All persons are excluded from 
 going on it, unless in the vehicles pro- 
 vided by the public or its agents ; and
 
 Eminent Domain. 
 
 589 
 
 Sec. 40G. Where the corporation takes more land than is required. — 
 Under various statutes provided for tlie mode of proeeediiig to 
 secure the lands of others for corporate purposes, under the right of 
 eminent domain, it is evident that the corporation may claim the 
 condemnation of more land than is required for the corporate pur- 
 pose, and if allowed to proceed unrestrained and an appraisement is 
 made, the value paid and the proper papers in the case recorded as 
 provided by the statutes,^ the corporation would thereby secure a 
 prima facie right to all the lands thus appraised. "What then 
 would be the remedy where the claim was for more land than 
 
 to enforce that provision and ade- 
 quately protect the erections from in- 
 juries, it may be requisite to divest 
 the property out of individuals." See, 
 also, Giesey v. Cincinnati, Wilm. &Z. 
 Railway, 4 Ohio (N. S.), 308. 
 
 In Nicoll V. The New York & Erie 
 Railway, 12 N. Y. 128, it was objected 
 that because by the act of incorpora- 
 tion there was given to the defendant 
 only a term of existence of fifty years, 
 therefore the grant of land in question, 
 which was a piece six rods in width 
 across the grantor's farm for the site 
 of the defendants' railway, should be 
 deemed to have conveyed an estate 
 for years, not in fee. But the court 
 said that the unsoundness of that 
 position was easily shown; that it was 
 never yet held that a grant in fee in 
 express terms could be restricted by 
 the fact that the grantee had but a 
 limited term of existence. And " it is 
 erroneous to say that an estate in fee 
 cannot be fully enjoyed by a natural 
 person, or by a corporation of limited 
 duration. It is an enjoyment of the 
 fee to possess it, and to have the full 
 control of it, including the power of 
 alienation, by which its full value may 
 at once be realized." 
 
 It is well settled that corporations, 
 though limited in their duration, may 
 purchase and hold a fee, and they may 
 sell such real estatewhenever they shall 
 find it no longer necessary or conven- 
 ient. 2 Preston on Estates, 50. Kent 
 says : " Corporations have a fee-sim- 
 ple for the purpose of alienation, but 
 they have only a determinable fee, 
 for the purpose of enjoyment. On the 
 dissolution of the corporation, the re- 
 
 verter is to the original grantor or 
 his heirs, but the grantor will be 
 excluded by the alienation in fee, 
 and in that way the corporation may 
 defeat the possibility of a reverter. 
 2 Kent, 282; 5 Denio, 389; 1 Comst. 
 509. Large sums of money are ac- 
 cordingly expended by railroad com- 
 panies in erecting extensive station- 
 houses and depots and by banking 
 corporations in erecting banking- 
 houses, because, holding the land in 
 fee, they may be able to reimburse 
 themselves for the outlay by selling 
 the fee before the termination of their 
 corporate existence." 
 
 But the right of a railway company 
 to the exclusive possession of the land, 
 taken for the purposes of their road, 
 differs very essentially from that of 
 the public in the land taken for a com- 
 mon highway. The railway com- 
 pany must, from the very nature of 
 their operations, for the security of 
 their passengers, workmen, and the 
 enjoyment of the road, have the right 
 at all times to the exclusive occupancy 
 of the land taken, and to exclude all 
 concurrent occupancy, by the former 
 owners in any mode and for any pur- 
 pose. Jackson v. R. & B. R. R., 25 Vt. 
 150; Conn. & Pass. Rivers R. R. v. 
 Holton, 32 Vt. 47. 
 
 Thomas, J., says, in Hazen v. Bos- 
 ton & M. R. R., 2 Gray, 580: " The 
 right acquired by the corporation " (a 
 railway company) " though technically 
 an easement, yet requires for its en- 
 joyment a use of the land, permanent 
 in its nature, and practically exclu- 
 sive." 
 
 ' See Code of Iowa, supra.
 
 500 
 
 Private Corporations. 
 
 is required ( The corporation, as we have seen, would only be 
 entitled to take so much as is necessary to accomplish the contem- 
 plated purpose.' And if, under color of the powers conferred 
 npon them for this purpose, a corporation attempts to take more 
 tlian is required, it could undoubtedly be restrained by injunction, 
 and the question as to the proper extent or amount be determined 
 in court.'' 
 
 The remedy by injunction in sucli a case would be the most 
 effectual of any, and the modern practice would enable the com- 
 plainant to have the extent of the rights of the corporation in the 
 land claimed, determined in the same proceedings. " It has be- 
 come a well-settled head of equity, that any company authori;5ed 
 by the legislature to take compulsorily the land of another for a 
 definite purpose, wnll, if attempting to take it for any other ob- 
 ject, be restrained by the injunction of a court of chancery from 
 sodoinof." ' 
 
 1 Stacey v. Vermont Cent. R. Co., 27 
 Vt. 39 ; Hill v. Western Vt. R. Co., 
 '62 id. 68 ; Rensselaer, etc., R. Co. v. 
 Davis, 43 N. Y. 137 ; Lance's Appeal, 
 55 Penn. St. 16. 
 
 ^ See ante, % 444, note 3. 
 
 ^ Green's Brice's Ultra Vires, 285 ; 
 citing L. R., 1 H. L. 43 ; Crossman v. 
 Bristol, etc., R. Co., 1 H. & M. 531. 
 This principle is, witk the qualification 
 mentioned below, strictly enforced. 
 Whatever be the purposes for which 
 special powers and authorities are 
 given to the attainment of these pur- 
 poses alone can they be devoted, no 
 deviation therefrom being permitted, 
 however slight and however much 
 the corporation would thereby be bene- 
 fited. Brice's Ultra Vires, 286. He 
 further says : In Bentinck v. Norfolk 
 Estuary Company, 8 De G., M. & G. 
 714; 26 L. J. Ch. 404; Webb v. 
 Manchester, etc., R. Co., 4 N. Y. Sup. 
 Ct. 116 ; Cothier v. Midland R. Co., 
 17 L. J. Ch. 235; Flower v. London, 
 etc., R. Co., 34 id. 450; Edinburgh, 
 etc., R. Co. V. Campbell, 9 L. T. (N. S.) 
 H. L. 157. See Eversfield v. Mid- 
 Sussex, etc., R. Co., 3 D. G. & J. 286 ; 
 28 L. J. Ch. 107, the defendants had 
 power to make and maintain certain 
 cuts and works with authority to take 
 and use such of certain lands " as 
 might be necessary or proper for them 
 to enter for the purpose of executing 
 
 these works." Within the limits of 
 their line of deviation they proceeded 
 to take lands for the purpose not of 
 forming works, but of digging ma- 
 terials for the same. It was held by 
 Page- Wood, V. C, that they had no 
 authority to do so ; and this judgment, 
 on appeal, was affirmed, and, there- 
 fore, an injunction granted by the 
 Vice-chancellor against them was 
 made perpetual. * * * There have 
 been many subsequent decisions on 
 this subject. The latest is that of 
 Lord Carrington v, Wycombe Railway 
 Company, L. R., 2 Eq. 825; L. R., 3 
 Ch. 277 ; Beauchamp v. Great West- 
 ern Railway Company, id. 745. The 
 defendant's company gave to land- 
 owners notice to treat in respect to a 
 close of land containing one acre, 
 twenty-seven perches, part of the C. 
 estate. The price was settled between 
 the parties, and the land conveyed to 
 the company by a deed not in the 
 statutory form, including the mines 
 and all the estate of the vendors. The 
 company used about three perches of 
 the land for their railway ; and about 
 two years after their purchase they, 
 in pursuance of a contract which, be- 
 fore the notice to treat, they had made 
 with Mr. Terry to convey to him all 
 such part of the C. estate as lay be- 
 tween his land and the railway, con- 
 veyed the remaining one acre, twenty-
 
 Eminent Domain. 
 
 591 
 
 Other modes may be adopted to secure parties from the wrong 
 referred to. But it is not properly within the scope of this 
 treatise to consider very fully the subject of remedies by or against 
 corporations. 
 
 Sec. 407. Compensation. — The authority to take land for jiub- 
 lic purposes under the right of eminent domain can only be con- 
 ferred by the legislature in this country, or by parliament in Great 
 Britain, and this right can only be exercised on making full com- 
 pensation for the land or other property taken. The constitution 
 of the United States inhibits the taking of private property for 
 public use without just compensation/ which would render any 
 authority the states might attempt to confer, for the taking of 
 private property under the right of eminent domain without just 
 compensation, null and void. And the powers of parliament in 
 this respect are equally limited.* 
 
 four perches to him by a deed, which, 
 recited that it was superfluous land. 
 The landwas situate within the limits 
 of a borough, but was at some distance 
 from the mass of houses forming the 
 town. There were two cottages upon it. 
 The lords justices held, that apart 
 from other considerations, the vendors 
 would have been entitled to relief on 
 the ground that the company had 
 taken the land, not for the purposes of 
 their act, but in order to enable them 
 to fulfill their coutract with Terry. 
 Lord Justice Cairns, in his judgment, 
 said : " There is no controversy as to 
 the facts ; and it appears to me that a 
 more distinct and more openly avowed 
 case of the use of parliamentary 
 powers for purposes not intended by 
 parliament never has been presented 
 to the court ; and this is exactly one 
 of those cases which were described bv 
 
 Lord Cranworth in Galloway v. 
 Mayor and Commonalty of London, 
 L. R., 1 H. L. 34, 43, where his lord- 
 ship said : ' The principle is this, that 
 when persons embarking in great un- 
 dertakings for the accomplishment of 
 which those engaged in them have 
 received authority from the legisla- 
 ture to take compulsorily the lands of 
 others, making to the latter proper 
 compensation, the persons so author- 
 ized canuot be allowed to exercise the 
 powers conferred on them for any col- 
 lateral object.' The land here, in my 
 opinion, was taken, and is avowed to 
 have been taken for that which was 
 an object entirely collateral, namely, 
 to give to Mr. Terry that which he 
 had bargained for as part of the con- 
 sideration for the sale of the £20,000 
 stock." 
 
 ' Amendment to Const. U. S., art. 5. 
 
 " The Queen v. The Eastern Coun- 
 ties Railway, 2 Q. B. 347; 2 Rail. C. 
 736. On this subject of the power in 
 the sovereignty to exercise the right 
 of eminent domain and the necessity 
 of compensation in such cases, to the 
 parties whose property is taken. Red- 
 field. J., observes : " It seems to have 
 been accurately defined,, and distinctly 
 recognized, in the Roman Empire, in 
 
 the days of Augustus, and his imme- 
 diate successors, although from con- 
 siderations of policy and personal in- 
 fluence and esteem, they did not always 
 choose to exei'cise the right to demolish 
 the dwellings of the inhabitants, either 
 in the construction of public roads or 
 aqueducts or ornamental columns, but 
 to purchase the right of way." 
 
 " But in the states of Europe and in 
 the written constitution of the United
 
 592 
 
 Private Corporations. 
 
 The constitutions of most, if not all, of the various states con- 
 tain similar provisions. The duty of making compensation in 
 such cases seems to be in accordance with reason and principles of 
 natural justice; and is recognized in the jurisprudence of all 
 civilized people. On this subject Mr. Redfield observes : 
 
 " The duty to make compensation for property, taken for pub- 
 lic use, is regarded by the most enlightened jurists as founded in 
 the fundamental principles of natural right and justice, and as 
 lying at the basis of all wise and just government, independent 
 of all written constitutions or positive law." * 
 
 Sec. 408. Same continued. — The mode of proceeding to deter- 
 mine the amount of compensation is also usually, if not univer- 
 sally, provided for by statute ; and where it is thus provided for 
 it is treated as not only directory but exclusive of any other 
 mode ; and no rights can be obtained by the proceedings to con- 
 demn property for the public use, unless the provisions of the 
 statute are complied with in this and all other respects.'^ 
 
 States, and in those of most of the 
 American states an express limitation 
 of the exercise of the right makes it 
 depend upon compensation to the 
 owner. But this provision in the 
 
 United States constitution is intended 
 only as a limitation upon the exercise 
 of that power by the government of 
 the United States." 1 Kedf. on Kail., 
 §63. 
 
 • 1 Redf. on Rail., § 65 ; Gillinwater 
 V. The Miss. & A. R. Co., 13 111. 1 ; 
 Reitenbaugh v. Chester Valley R. 
 Co., 21 Penn. St. 100; Atlantic, etc., 
 R. Co. V. Sullivant, 5 Ohio (N. S.), 
 276. 
 
 ** As to the compensation for lauds 
 taken, and the right to enter, lor the 
 purposes of a survey, see Bloodgood v. 
 Mohawk, etc., R. Co., 18 Wend. 9; 
 Cushman v. Smith, 34 Me. 247. 
 
 In the former case Chancellor Wal- 
 worth says; 'Another very impor- 
 tant question which arises in this 
 case is, whether the legislature in fact 
 authorized the defendants to enter 
 upon the private property of the plain- 
 tiff and to construct their railroad 
 thereon before his damages were ac- 
 tually assessed and paid or offered to 
 be paid to him ; and if such is the 
 construction of the law, whether such 
 a power is authorized by the constitu- 
 tion. In the case of Rogers v. Brad- 
 shaw, 20 Johns. 735, this court decided 
 that where private property was taken 
 
 for public use it was not necessary 
 that the amount of the compensation 
 should be actually ascertained and 
 paid before such property was appro- 
 priated to the public use ; that it was 
 sufficient if a certain and adequate 
 remedy was provided by which the in- 
 dividual could obtain such compensa- 
 tion without any unreasonable delay. 
 This decision has been followed by the 
 courts of several of our sister states. 
 To this extent the opinion of Chan- 
 cellor Kent, in the case of Rogers v. 
 Bradshaw, must be considered as the 
 settled construction of the constitu- 
 tional provision on this subject, at 
 least in this state . I cannot, however, 
 agree with my learned predecessor in 
 his subsequent reasoning in that case, 
 upon which he afterward acted in 
 the case of Jerome v. Ross , 7 Johns. 
 Ch. 344, that it is not necessary to 
 the validity of a statute authorizing 
 private property to be taken for the 
 public use that a remedy for obtaining 
 compensation by the owner should be
 
 Eminent Domain. 
 
 593 
 
 Ko titla. can vest under the provisions of statutes authorizing 
 the condemnation of property under the right of eminent domain, 
 
 provided. On the contrary, I hold that 
 before the legislature can authorize 
 the agents of the state and others to 
 enter upon and occupy, or destroy or 
 materially injure the private property 
 of an individual, except in cases ojf 
 actual necessity which will not admit 
 of any delay, an adequate and certain 
 remedy must be provided whereby the 
 owner of such property may compel 
 the payment of his damages, or com- 
 pensation ; and that he is not bound to 
 trust to the justice of the government 
 to make provision for such compensa- 
 tion by future legislation. I do not 
 mean to be understood that the legisla- 
 ture may not authorize a mere entry 
 upon the laud of another for the pur- 
 pose of examination, or of making pre- 
 liminary surveys, etc., which would 
 otherwise be a technical trespass, but 
 no real inj ury to the o vvner of the land, 
 although no previous provision was 
 made by law to compensate the indi- 
 vidual for his property if it should 
 afterward be taken for the public 
 use. But it certainly was not the in- 
 tention of the framers of the consti- 
 tution to authorize the property of a 
 citizen to be taken and actually appro- 
 priated to the use of the public, and 
 thus to compel him to trust to the 
 future justice of the legislature to 
 provide him a compensation therefor. 
 The compensation must be either as- 
 certained and paid to him before his 
 property is thus appropriated, or an 
 appropriate remedy must be provided 
 and upon an adequate fund, whereby 
 he may obtain such compensation 
 through the medium of the courts of 
 justice if those whose duty it is to 
 make such compensation refuse to do 
 so. lu the ordinary case of lands 
 taken for the making of public high- 
 ways, or for the use of the state canal, 
 such a remedy is provided , and if the 
 town, county, or state officers refuse 
 to do their duty in ascertaining, rais- 
 ing, or paying such compensation in 
 the mode prescribed bylaw, the owner 
 of the property has a remedy by man- 
 damus to compel them to perform 
 their duty. The public purse, or the 
 property of the town or county upon 
 which the assessment is to be made, 
 may justly be considered an adequate 
 fund. He has no such remedy, how- 
 
 75 
 
 ever, against the legislature to compel 
 the passage of the necessary laws to 
 ascertain the amount of compensation 
 he is to receive, or the fund out of 
 which he is to be paid. In the case 
 under consideration, if this company 
 were authorized to take possession of 
 the plaintifiTs property and complete 
 the construction of their road before 
 his damages were assessed and paid, 
 or offered to be paid to him, he might 
 have been wholly without redress, as 
 he has no power to compel the assess- 
 ment of damages, and no adequate 
 fund was provided for the payment of 
 the damages when ascertained. The 
 citizen whose property is thus taken 
 from him without his consent is not 
 bound to trust to the solvency of an 
 individual, or even of an incorporated 
 company, for corporations as well as 
 individuals are sometimes unable to 
 pay all their just debts ; especially 
 those corporations which are author- 
 ized to incur heavy responsibilities in 
 anticipation of the payment of their 
 capital by the subscribers for tlie 
 stock ; and if the true construction of 
 this charter was such as is contended 
 for by the defendants' counsel, I 
 should hold that the provision, which 
 authorized the appropriation of the 
 plaintiffs property to the use of the 
 corporation before the damages had 
 been ascertained and paid, was uncon- 
 stitutional and void. 
 
 " I cannot, however, agree with the 
 learned judge who delivered the opin- 
 ion of the supreme court in this case, 
 that such is the fair and legitimate 
 construction and meaning of the de- 
 fendants' charter. It is a primary rule 
 in the construction of statutes in those 
 countries where the limits of the leg- 
 islative power are restricted by the 
 provisions of a written constitution, 
 to endeavor, if possible, to interpret 
 the language of the legislature in such 
 a manner as to make it consistent with 
 the constitution or fundamental law. 
 Applying that principle to the statute 
 under consideration, and having as- 
 certained that it would be inconsistent 
 with the fundamental law of the state 
 to authorize the defendants to take 
 possession of the lands of an individ- 
 ual without having made an adequare 
 and certain provision for the recovery
 
 694 
 
 Private Corporations. 
 
 and providiii^i^forcoiupensiition, until the provisions of the statute 
 in reference to compensation are complied with.^ And it may 
 
 of the damages wliicli he would nec- 
 essarily sustain by such permanent 
 occupjition of his property for the 
 purposes of the road, there appears to 
 be no dilKculty in giving such a con- 
 struction to this statute as will be 
 consistent with the constitution and 
 also with the ])robable intention of 
 the legislature. This may be done 
 effectually by considering what is very 
 iuartificially appended as a proviso to 
 the seventh section, as in the nature 
 of a condition precedent, not only to 
 the acquisition of the legal title to the 
 land, but also to the riglit to enter and 
 take the permanent possession of the 
 land for the use of the corporation. 
 Indeed, such appears to me to be the 
 more reasonable and fair construction 
 of this section, independent of any 
 constitutional difficulty in the way of 
 a different construction. For, upon 
 the supposition that no injustice was 
 intended l)y the legi'slature, it can 
 hardly be presumed they meant to au- 
 thorize the com[)any to enter upon the 
 lands of individuals, pull down their 
 buildings, etc., and then take their 
 own time to get the damages appraised 
 and to pay the same, leaving the in- 
 dividuals injured thereby to seek for 
 
 ' Baltimore & Susquehanna li. Co. v. 
 Nesbit, 10 How. 393 ; Compton v. Sus- 
 quehanna R. Co., 3 Bland, 386; Van 
 Wickle V. Railway Co., 14 N. J. L. 
 163; Stacey v. Vermont C. R. Co., 27 
 Vt. 39; Levering V. Railway Co., 8 W. 
 & S. 4.-)9 ; 1 Redf. on Rail., § 65. 
 
 In Cushman v. Smith, 34 Me. 247, 
 Chief Justice Shapley says : " There 
 has been a serious difference of opinioia 
 respecting the requirements and con- 
 struction of those constitutional pro- 
 visions, which declare in the same or 
 similar terms that ' private property 
 shall not be taken for public uses 
 without just compensation. ' How far 
 legislation may proceed to authorize 
 acts to be done without first making 
 or tendering compensation, and where 
 it becomes arrested by the provision, 
 has been considered by many of the 
 ablest men and most distinguished 
 jurists of the country. And yet there 
 is an indication arising out of the con- 
 
 sorae uncertain remedy by action, if 
 the company neglected to get the 
 damages assessed within a reasonable 
 time. 
 
 " The conclusion at which I have 
 arrived, therefore, in that the defend- 
 ants" plea is imperfect in not averring 
 that the damages had been regularly 
 assessed and paid before the defend- 
 ants entered upon the plaintiff's land 
 and appropriated it to the use of the 
 road ; and that if they in fact entered 
 and commenced the construction of 
 the road before the damages were 
 actually assessed and paid, the plain- 
 ti!f has a technical right to recover in 
 this action for all damages which he 
 really sustained by such unauthorized 
 entry, although these requisites of the 
 statute were afterward complied with. 
 In that case the defense arising from 
 the subsequent assessment and pay- 
 ment of the damages can only be 
 pleaded to that part of the declaration 
 which charges a continuance of the 
 trespass after the damages were 
 assessed and paid as required by the 
 statute." 
 
 In Cushman v. Smith, supra, Shep- 
 LEY, C. J., says : " The exclusive 
 occupation of that estate temporarily, 
 
 flict of opinion, and the difficulty of 
 reconciling the positions attempted to 
 be established with each other, and 
 with any sound and pervading princi- 
 ple, that the whole truth has not been 
 reached. The most thoroughly it has 
 been examined in connection with 
 legislative enactments, the more 
 clearly has it been perceived that 
 serious difficulties or inconveniences 
 or losses may arise in the rigid and 
 uniform application of any suggested 
 construction to the proceedings re- 
 quired in all classes of public im- 
 provements. How can a construc- 
 tion be correct which will allow acts 
 to be done for the purpose of mak- 
 ing one kind of public improvement, 
 and prohibit the like acts to be 
 df)ne under like circumstances for the 
 purpose of making another kind of 
 public improvement ; which will au- 
 thorize acts for the purpose of mak- 
 ing a public highway, and prohibit
 
 Eminent Domain. 
 
 595 
 
 be afRnnecl, as a general principle, that no right or title to prop- 
 erty can be acquired under tins right, until compensation for the 
 
 as an initiatory proceeding to an ac- 
 quisition of a title to it, or to an ease- 
 ment in it, cannot amount to a taking 
 of it in that sense. The title of the 
 owner is thereby in no degree extin- 
 guished. He can convey that title 
 while thus exclusively occupied as he 
 could have done before. Should he 
 do so by a conveyance containing a 
 covenant that it was free of all in- 
 cumbrances, that covenant would not 
 make him liable for such an exclusive 
 occupation unless it be admitted that 
 a title to the land or to an easement in 
 it can be acquired without making 
 compensation, and this is denied. 
 
 " A construction of the provision 
 which would permit legislation au- 
 thorizing private property to be exclu- 
 sively occupied without first making 
 compensation as an incipient proceed- 
 ing to the acquisition of a title to it, 
 or to au easement in it, and which 
 would not authorize the title of the 
 owner to be established or impaired 
 without compensation, may be some- 
 what novel, but it will not be found 
 to be unsupported by positions as- 
 
 them for the purpose of making a rail- 
 way ; which will authorize them for 
 the purpose of making a canal or rail- 
 way, when made by a state, county, 
 city, or town, and prohibit them when 
 the same public improvement is made 
 by a private corporation? And yet such 
 may be the eti'ect of many, if not of 
 most, of the constructions suggested 
 or insisted upon. If, upon principle 
 and sound reasoning, the provision 
 must operate alike upon the construc- 
 tion of all classes of public im- 
 provements made by the appropriation 
 of private property to public use, the 
 effect of any proposed construction of 
 the clause may be examined in its 
 practical operation, to ascertain if 
 such could have been the intention of 
 the framers of the constitution. 
 
 •' If the construction be such as to 
 require payment in all cases for pri- 
 vate property so taken before it can 
 be exclusively occupied for public use, 
 the result must be that no such im- 
 provement can be effectually or bene- 
 ficially commenced even by a state, 
 county, city, or town, without waiting 
 
 serted and maintained in judicial 
 opinions. It is generally admitted in 
 them, that examinations and surveys 
 may be authorized by legislative en- 
 actments without a violation of the 
 constitutional provision, and without 
 provision for previous compensation, 
 passes is to be found the limit of the 
 legislative power to authorize tres- 
 Whereof a more extensive and injuri- 
 ous character, which do not extin- 
 guish or intrench upon the title of the 
 owner? Does that provision of the 
 constitution permit the legislative 
 power to authorize trespasses not 
 very injurious to private property 
 without providing for previous com- 
 pensation, and prohibit it from au- 
 thorizing those of a little more or 
 much more injurious character, which 
 do not in any degree impair or affect 
 the title of the owner? It was not the 
 intention to make the exercise of the 
 legislative power depend upon the ex- 
 tent of the injury, which the author- 
 ized acts might occasion, if the title 
 was not invaded. 
 
 " There are cases in which an opin- 
 io have an assessment of damages first 
 made for each person, whose estate is 
 in some degree to be occupied upon 
 the whole line of the contemplated 
 improvement. 
 
 " Such a construction would prevent 
 the laying out and making of high- 
 ways and streets over private estates 
 believed to be benefited and not in- 
 jured thereby, before there had been 
 an adjudication obtained, that no dam- 
 ages were occasioned; and it would de- 
 prive persons thinking themselves ag- 
 grieved by such an adjudication or by 
 one estimating the damages to be too 
 little in their judgment, from having 
 such adjudications revised and finally 
 determined by some other tribunal 
 without delaying the progress of the 
 public improvement. 
 
 " It is believed to have been the long 
 established course of proceeding, in 
 this part of the country at least, to 
 authorize the exclusive occupation of 
 land required for such public uses as 
 the laying out of highways and streets, 
 by making provision by law for com- 
 pensation to the owner, to be subse-
 
 596 
 
 Private Corporations, 
 
 property taken is made. If proceedings under the statute have 
 been had, and the vahie of the land assessed, the amount must 
 
 ion ig expressed that all injuries to 
 private property authorized by the 
 legislative power can only be author- 
 ized by the exercise of the right of 
 eminent domain ; and that a temporary 
 injury or occupation amounts to a tak- 
 ing of the property. 
 
 " If it be admitted that such an in- 
 jury or occupation of the property 
 amounts to a taking of it, in the sense 
 in wliich the word taken is used in the 
 constitution, it will follow that meas- 
 ures must be taken to ascertain the 
 damages occasioned thereby, and that 
 compensation must be actually made 
 before it can be so injured or occupied, 
 or that the right to do it without com- 
 pensation first made must be admit- 
 ted, leaving the party injured to the 
 chance of obtaining compensation as 
 he may best be able. If the former 
 alternative be adopted, private prop- 
 erty cannot be injured or temporarily 
 occupied, however urgent and imme- 
 diate may be the public necessity, 
 without waiting for the final comple- 
 tion of all proceedings to ascertain the 
 compensation. And how the amount 
 
 quently paid, and in many cases 
 authorizing the damages to be finally 
 ascertained as well as paid subse- 
 quently. This course of proceeding 
 existed, so far as is known, without 
 complaint, long before the Revolution, 
 whicii cast off the British dominion ; 
 and of course was well known to the 
 framers of the constitution which first 
 contained this prohibitory clause for 
 the protection of private property. 
 Was it the intention to interrupt such 
 course of proceeding and to provide a 
 remedy for a grievance already expe- 
 rienced, or only to prevent private 
 property from being taken from the 
 owner and permanently appropriated 
 to public use without compensation? 
 Constitutional provisions are often and 
 legitimately explained by consider- 
 ing the actual state of facts at the 
 time of their adoption. Thus the 
 provision in the constitution of the 
 United States for the regulation of 
 commerce is explained to include navi- 
 gation, by reference to the state of 
 facts existing at the time. By these, 
 or other considerations, many minds 
 
 of compensation can be satisfactorily 
 ascertained before the acts occasion- 
 ing damages have been performed, it 
 is not easy to perceive. 
 
 " If the latter alternative be adopted 
 and the right to cause a temporary 
 occupation or injury be admitted be- 
 fore compensation is made, the party 
 injured must depend upon a legisla- 
 tive provision for his compensation, 
 and the prohibitory clause of the con- 
 stitution will fail to secure to him, 
 with entire certainty, a compensation. 
 In other words, it will of itself afford 
 him no protection against such tem- 
 porary injury or occupation, and 
 would leave him in the position iu 
 which he would be by a construction 
 of that clause, which woitld only pro-, 
 tect him against a permanent appro- 
 priation of his property, or an extin- 
 guishment or diminution of his title 
 to it. 
 
 " Many of the judicial opinions ur- 
 gently restrictive of the legislative 
 power assert that the title to land 
 taken or to an easement in it cannot 
 be transferred from the owner to oth- 
 
 appear to have been led to the conclu- 
 sion that private property might be 
 absolutely taken and permanently ap- 
 propriated to public use without com- 
 pensation being first made, when pro- 
 vision was made by law for compen- 
 sation to be subsequently made from 
 the treasury of the state, or of a coun- 
 ty, city, or town. 
 
 " Does experience teach that the 
 owner in such cases will always be 
 certain to obtain compensation ? His- 
 tory informs us that kingdoms and 
 states have not always paid their just 
 debts in full, that they have often 
 ])aid them only in promises which 
 would not command gold or silver 
 without a large discount. 
 
 " When the private property of citi- 
 zens residing in a county, city or town, 
 may be taken to pay the debts of the 
 corporation, there may be reason to 
 expect that its debts will be certainly 
 paid. But the law making private 
 property liable to bo taken for pay- 
 ment of the debts of such corporations 
 may at any time be repealed or al- 
 tered ; and the corporation in its cor-
 
 Eminent Domain. 
 
 597 
 
 be paid, or deposited for the use of the owner as provided by law. 
 " Tlie payment or deposit of the money awarded is a condition 
 
 ers for public use witliout compensa- 
 tion actually made, that the acts of 
 payment and of transfer are simnlta- 
 ueous. If this be true, it is immaterial, 
 so far as it respects the acquisition of 
 a title to laud, or to au easement in it 
 for public use, when compensation is 
 made. It can only be material to in- 
 sist that compensation shall be made 
 before an exclusive occupation is per- 
 mitted, to prevent a temporary incon- 
 venience and loss. An attempt has 
 already been made to show that such 
 was not the design of the prohibitory 
 clause. 
 
 " In the case of Callander v. Marsh, 
 1 Pick. 430, the opinion states that the 
 clause ' has ever been confined in judi- 
 cial application to the case of property 
 actually taken and appropriated by 
 the government.' 
 
 " In the case of Hooker v. The New 
 Haven and Northampton Co., 14 Conn. 
 146, Williams, C. J., says, that the 
 canal being made in the place desig- 
 nated ' and the damages assessed and 
 ]iaid, it became a canal legally author- 
 ized, and the company became vested 
 
 porate capacity may not have property 
 from which payment can be obtained. 
 " Is the distinction attempted to be 
 made between taking private property 
 without first making compensation, 
 when provision is made for payment 
 by a state, county, city or town, and 
 when it is made for payment by a 
 private corporation, a sound one? 
 Can that be a correct construction of the 
 provision which would authorize legis- 
 lation by which the owner of an estate 
 might be deprived of it without being 
 first paid, whenever in the judgment 
 of some court or tribunal it might be 
 morally certain that he could after- 
 ward obtain compensation, and which 
 would not authorize it whenever in 
 the judgment of such court or tribunal 
 it was not so certain that he could ob- 
 tain it ? That would make the title 
 pass from the owner to the public use, 
 not upon payment of compensation, 
 but upon the opinion of certain offi- 
 cial persons that a fund or other 
 means had been provided from which 
 he might obtain payment. If such be 
 a correct construction, it would follow 
 
 with the legal rights to the enjoyment 
 of their property.' And Siikuman, J., 
 says, ' that the only limitation at com- 
 mon law or by any constitution to the 
 legislative power over individual prop- 
 erty is that what is taken must be paid 
 for.' 
 
 " In the case of Bradshaw v. Rogers, 
 20 Johns. 103, SPENCEK, C. J., says, 
 ' It is true that the fee-simple of the 
 land is not vested in the people of the 
 state until the damages are appraised 
 and paid, but the authority to enter is 
 absolute, and does not depend on the 
 appraisal and payment.' 
 
 "In the case of Bloodgood v. The 
 Mohawk and Hudson Railroad Co., 18 
 "Wend. 9, Maison, Sen., insists that an 
 entry and possession of the land taken 
 in defiance of the rights of the owner, 
 is a taking of it in the legal sense, 
 and yet he admits that the ' legal fee 
 may not be in them.' 
 
 " In the case of Baker v. Johnson, 2 
 Hill, 342, the opinion states, ' Although 
 the absolute fee did not pass to the 
 state until the appraisement of dam- 
 ages, yet the right to enter and use the 
 
 that the title to private property may 
 be made to pass from the owner to a 
 private corporation for public use, 
 when that corporation should be found 
 to possess the means or to furnish se- 
 curity which would render it as cer- 
 tain that compensation could be sub- 
 sequently obtained from it as from 
 the treasury of a state, county, city or 
 town. 
 
 "These and other considerations 
 present themselves as serious objec- 
 tions to a construction which would 
 permit an owner of property to be de- 
 prived of it without compensation 
 actually paid or tendered to him, 
 whether it be taken for public use by 
 a state, county, city, town or private 
 corporation. 
 
 " If such a construction be inadmis- 
 sible, as well as one which would pre- 
 vent an exclusive occupation of a 
 temporary character, without payment 
 of compensation, the inquiry is sug- 
 gested, whether by a correct construc- 
 tion such results may not be avoided. 
 
 " This provision of the constitution 
 was evidently not intended to prevent
 
 598 
 
 Private Coepokations. 
 
 precedent to tlie ri<:jlit of tlie company to enter upon the land for 
 tlie pnrposes of construction, and without compliance with it they 
 
 property was perfect the moment the 
 appropriaiiou was made." It is sub- 
 jiiitted tliat a payment as well as an 
 appraisement should have been re- 
 quired to pass the title. 
 
 " In the case of the People v. Hay- 
 den, 6 Hill, 359, the opinion states 
 ' the statute places the right to have 
 compensation made where the princi- 
 ple of the constitution places it, viz., 
 upon the forcible divestment of the 
 use and enjoyment of private property 
 for the public benefit.' If the divest- 
 ment intended was of a permanent 
 character there would be no objection 
 made to it. 
 
 " In the case of Smith v. Helmer, 7 
 Barb. 416, the opinion states, ' It is 
 sufficient for this case that the settled 
 construction of the constitution which 
 prohibits private property to be taken 
 for public use without just compensa- 
 tion, actual compensation need not 
 precede the appropriation.' 
 
 " In the case of Rubottom v. Mc- 
 Clure, 4 Black, 505, it was decided 
 that private property might be taken 
 for public use, upon provision being 
 made for a subsequent compensation. 
 
 the exercise of legislative power to 
 prescribe tlie course of proceeding to 
 be pursued to take private property 
 and appropriate it to public use ; nor 
 to prevent its exercise to determine 
 the manner in which the value of 
 such property should be ascertained 
 and payment made or tendered. The 
 legislative power is left entirely free 
 from embarrassment in the selection 
 and arrangement of the measures to 
 be adopted to take private property 
 and appropriate it to public use, and 
 to cause a just compensation to be 
 made therefor. 
 
 " The provision was not introduced 
 or intended to prevent legislation au- 
 thorizing acts to be done which might 
 be more or less injurious to private 
 property not taken for public use. It 
 is not unusual to find that private 
 property has been greatly injured by 
 public improvements when there has 
 been no attempt to take it for public 
 use. The records of judicial proceed- 
 ings show that private property in 
 railroads, turnpike road, toll bridges 
 and ferry ways has been often greatly 
 
 " In the case of Thompson v. Grand 
 Gulf R. R. Co., 3 How. 240, it was 
 decided that compensation must be 
 first made, the constitution of that 
 state requiring that it shall not be 
 taken 'without a just compensatiori 
 made therefor.' 
 
 " In the case of Pittsburgh v. Scott, 
 1 Peun. St. 309, it was decided that it 
 was not necessary that compensation 
 should be actually ascertained and. 
 paid before private property is appro- 
 priated to public use, that it was 
 sutficient that an adequate remedy 
 was provided by which compensation 
 could bo obtained without any un- 
 reasonable delay. To the construction 
 of the prohibitory clause proposed it 
 may be objected that it will not pre- 
 vent the exercise of legislative power 
 to authorize the commission of serious 
 injuries upon private property without 
 making provision for compensation. 
 
 " A construction so broad as to pre- 
 vent this would greatly limit the leg- 
 islative power, and bring it within a 
 much narrower sphere of action than 
 it was accustomed to claim and exer- 
 cise without complaint before the con- 
 injured, and sometimes quite de- 
 stroyed, by acts authorized by legisla- 
 tion, which, according to judicial de- 
 cisions, did not violate any provision 
 of the constitution. 
 
 "Private property is often injured 
 by the construction and grading of 
 highways and railways when no at- 
 tempt has been made to change its 
 character from private to public prop- 
 erty. The cases of Day v. Stetson, 8 
 Greenl. 3G5; Callender v. Marsh, 1 
 Pick. 418; Canal Appraisers v. The 
 People, 17 Wend. 571; and Susque- 
 hanna Canal Co. v. Wright, 9 Watts & 
 Serg. 9, present examples of it. 
 
 " The provision was not designed, 
 and it cannot operate to prevent legis- 
 lation which should authorize acts 
 operating directly and injuriously, as 
 well as indirectly, upon private prop- 
 erty when no attempt is made to ap- 
 propriate to public use. An instance 
 of this kind of legislative action will 
 be found in the case of the Common- 
 wealth v. Tewksbury, 11 Mete. 55, 
 where a person was held indictable for 
 the removal of gravel from his own
 
 Eminent Domain. 
 
 599 
 
 may be enjoined by a court of equity, or prosecuted iu trespass at 
 law for so doing. The right of the huid-owncr to the damages 
 
 stitutions containing this clause were 
 framed. Reliance must be placed 
 upon the justice of legislation, and 
 upon the administration of the laws 
 for a lecompense for such injuries, 
 and not upon a provision of the con- 
 stitution not designed for such a pur- 
 pose. 
 
 '•Another objection to this construc- 
 tion may be that the owner will not 
 be able to recover compensation for 
 the exclusive occupation of his land, 
 and for the iujuri(!S thereby occa- 
 sioned, when the proceedings are not 
 so completed and compensation made 
 as to transfer any title to land, or to 
 an easement in it for public use. 
 
 " This objection is believed to be 
 founded upon an incorrect position. 
 If compensation be not made within a 
 reasonable time after the land has 
 been exclusively occupied, the right 
 to continue thai occupation will be- 
 come extinct. It being authorized 
 ■only as a part of the proceedings per- 
 mitted for the acqtiisition of title, 
 when it becomes manifest by an un- 
 
 land contrary to a statute provision, 
 which did not assume to appropriate 
 to public use or to make compensation 
 for it. 
 
 "The design ajipears to have been 
 simply to declare that private property 
 shall not be changed to public prop- 
 erty, or transferred from the owner 
 to others for pitblic use without com- 
 pensation ; to prevent the personal 
 property of individuals from being 
 consumed or destroyed for public use 
 without compensation, not to protect 
 sucli property from all injury by the 
 construction of public improvements; 
 not to prevent its temporary posses- 
 sion or use without a destruction of it 
 or a change of its character. It was 
 designed also to prevent the owner of 
 real estate from being deprived of it, 
 or of an easement in it, and to prevent 
 any permanent change of its character 
 and use without compensation. While 
 it was not designed to prevent legisla- 
 tion which might authorize acts upon 
 it which wotild by the common law be 
 denominated trespasses, including an 
 exclusive possession for a temporary 
 
 reasonable delay that the avowed pur- 
 pose is not the real one, or that, if 
 real, it has been abandoned, the meas- 
 ures permitted for that purpose will 
 no longer be authorized, and if the 
 occu[)ation be continued after that 
 time tl»e occupants will be trespassers, 
 and liable to be prosecuted as such. 
 The damages occasioned before the 
 right of exclusive occupation became 
 extinct may be recovered by an action 
 of trespass, or by an action on the case, 
 containing in the declaration aver- 
 ments tliat the exclusive occupation 
 was autliorized for the purpose of ac- 
 quiring title for public use, and that 
 no such proceedings have taken place 
 as would transfer any title within a 
 reasonable time, with other suitable 
 averments. If the occupants should 
 be regarded as trespassers ab initio, it 
 would not be, as has been supposed, 
 because they had omitted to make 
 compensation, but because they had 
 continued to occupy or commit tres- 
 passes after it hid become manifest 
 that their avowed was not their real 
 
 purpose, where there was no attempt 
 to appropriate it to public use. Sucli 
 acts of legislation might be very un- 
 just, and it may be presumed that no 
 legislative body would make such en- 
 actments without making provision 
 for the compensation of injuries to 
 private property occasioned by acts 
 designed to promote the pttblic good. 
 ******* 
 
 " This leads to a further inquiry to 
 ascertain the sense iu which the word 
 taken was used in the constitution. 
 
 " That word is used in a variety of 
 senses, and toconimitnicate ideas quite 
 different. Its senses, as used in a par- 
 ticular case, is to be ascertained by 
 the connection in which it is used, and 
 from the context the whole being ap- 
 plied to the state of facts respecting 
 which it was used. 
 
 " It cannot well be denied, and it is 
 generally admitted to have been used 
 in constitutions containing this clause 
 to require compensation to be made 
 for private property appropriated to 
 public use, by the exercise on the part 
 of the government of its superior
 
 600 
 
 PlilVATE COKPOKATIONS. 
 
 awarded is a correlative right to that of the company to the hind. 
 If the company has no vested right to the land, the land-owner 
 has none to the price of the land." ' 
 
 purpose, or after their real purpose 
 had been abandoned. 
 
 "It is not necessary to decide 
 whether such an action could be 
 maintained, for the distinction be- 
 tween the actions of trespass and case 
 has been abolished in this state. 
 
 " After some difference of opinion, it 
 may now be regarded as settled, that 
 enactments which authorize private 
 property to be taken for public use 
 must provide the means or course to 
 be pursued to have compensation 
 made for it. 
 
 " The conclusions to which this dis- 
 cussion leads are : 
 
 " 1. The clause in constitutions 
 which prohibits the taking of private 
 property for public use was not de- 
 signed to operate, and it does not 
 operate, to prohibit the legislative de- 
 partment from authorizing an exclu- 
 sive occupation of private property 
 temporarily, as an incipient proceed- 
 ing to the acquisition of a title to it, 
 or to an easement in it. 
 
 "2. It was designed to operate, and 
 it does operate, to prevent the acquisi- 
 tion of any title to land, or to an ease- 
 ment in it, or to a permanent appro- 
 priation of it from an owner for pub- 
 lic use, without the actual payment or 
 tender of a just compensation for it. 
 
 " 3. That the right to such tem- 
 porary occupation as an incipient pro- 
 ceeding will become extinct by an 
 unreasonable delay to perfect proceed- 
 ings, including the actual payment or 
 tender of compensation to acquire a 
 title to the land, or of an easement in 
 it. 
 
 "4. That an action of trespass <7Ma?'e 
 clausum may be maintained to recover 
 damages for the continuance of such 
 occu])ation, unless compensation, or a 
 tender of it, be made within a reason- 
 able time after the commencement of 
 such occupation. 
 
 " 5. That under such circumstances 
 an action of trespass, or an action on 
 the case-, may be maintained to re- 
 cover damages for all the injuries oc- 
 casioned by the prior occupation. 
 
 " In this case, as no compensation or 
 tender of it was made to the plaintiff 
 within a reasonable time after his es- 
 tate was occupied by the corporations, 
 no title to it, or to an easement in it, 
 has been acquired, and the occupation, 
 although legally commenced, has 
 ceased to be legal. 
 
 " As the corporation acquired no title 
 to the land, or to any easement in it, 
 the defendant could acquird none by 
 his conveyance from that corpora- 
 tion." 
 
 title to all property required by the 
 necessities of the people to promote 
 their common welfare. 
 
 " This appears to have been denom- 
 inated the right of eminent domain, 
 of supereminent domain, of transcen- 
 dental propriety. These terms are of 
 importance only to disclose the idea 
 presented by them, that the right to 
 appropriate private property to public 
 use rests upon the position that the 
 government or sovereignty claims it by 
 virtue of a title superior to the title of 
 
 the individual, and that by its exer- 
 cise the individual and inferior title 
 becomes wholly or in part extin- 
 guished — extinguished to the extent 
 to which the superior title is exercised. 
 To take the real estate of an individ- 
 ual for public use is to deprive him of 
 liis title to it, or of some part of his 
 title, so that the entire domain over it 
 no longer remains with him. He can 
 no longer convey the entire title and 
 dominion." 
 
 ' Stacey v. Vermont Cent. R. Co. , 27 
 Vt. 39. See, also, 1 Redf. on Rail., 
 §65. 
 
 In Stacey v. Vermont Cent. R. Co., 27 
 Vt. 39, it was held that the payment 
 or deposit of the money awarded for 
 
 damages was a condition precedent 
 to the right to enter upon the land 
 for the purpose of building the rail- 
 road and without which the company 
 might be enjoined, or prosecuted for 
 the trespass; and that Jf the company
 
 Eminent Domain. 
 
 601 
 
 Sec. 409. Damages — mode of estimating. We liavc heretofore 
 stated tlie rule of dainao-es in such cases as follows : " The stat- 
 
 lias no vested riglit to the land, the 
 owner has none to the damages 
 awarded him. 
 
 In this case Isiiam, J., says: 
 
 " This action is brought to recover 
 damages wliicli were appraised by 
 commissioners for taking tlie plaintiffs 
 land for the use and construction of 
 the Vermont Central railroad. The 
 survey of the road was made on the 
 4th of June, 1847, and was recorded 
 in the town clerk's office, on the 5th 
 of August in the same year. 
 
 " The appraisal of damages by the 
 commissioners was made on the 5th of 
 January, 1849, and was recorded on the 
 6th of February, afterward. No ap- 
 peal having been taken within ninety 
 days, as limited by the eighth section of 
 the charter, that appraisal has become 
 conclusive as to the amount of dam- 
 ages sustained, and, if the plaintiff is 
 entitled to recover, will prevent any 
 further litigation of that matter. 
 
 " It appears from the case also, that 
 in February, 1850. the defendants 
 changed their line of road by locating 
 the same on other laud than that of 
 the plaintiff, and upon which their 
 road has been constructed. That al- 
 teration of their line of the road has 
 superseded the necessity of taking the 
 plaintiff's land on which the road was 
 first surveyed. The right of the cor- 
 poration to change the lineof theirroad 
 is given them by the fifteenth section 
 of their charter, which provides that 
 if the directors of that company, for 
 any cause, shall deem it expedient, 
 they may change the location of such 
 parts of their road as they shall deem 
 proper. That change in the line of 
 their road, however, will operate as an 
 abandonment of their former survey 
 on the plaintiffs laud, so that the com- 
 pany can no longer claim any right or 
 interest in the land itself, or to any 
 easement growing out of it, in conse'- 
 quencH of that survey having been 
 made. That doctrine has been ex- 
 pressly held in Massachusetts, in rela- 
 tion to highways Commonwealth v. 
 Westborough, 3 Mass. 406, and Same 
 v. Cambridge, 7 id. 1(J3, and the same 
 effect, we tliink, will follow in cases 
 of this character. The result is, that 
 the plaintiff retains his land free from 
 
 70 
 
 any incumbrance arising from that 
 location or survey of the road. That 
 abandonment of the line of the road 
 over the plaintiff's land, however, 
 does not necessarily supersede his 
 claim for damages. The right to re- 
 cover those damages, whether liciui- 
 dated by the agreement of the parties 
 or by commissioners, is not necessarily 
 defeated by that act of the company. 
 If the land has once been taken, if the 
 company, for any period of time, have 
 been seized and possessed of the laud 
 so appraised, or if the plaintiff has 
 had, at any time, a perfected right to 
 the damages awarded by the commis- 
 sioners, a subsequent abandonment of 
 that location, and the establishment of 
 a new line for the road, will have no 
 effect to defeat the plaintiff's claim for 
 the damages which have been awarded 
 to him. Westbrook v. North, 2 Greenl. 
 179 ; Hampton v. Coffin, 4 N. H. 517; 
 Harrington v Comm'rs of Berkshire, 23 
 Pick. 267; Hawkins v. Rochester, 1 
 Wend. 53. Under such circumstances 
 the plaintiff would be entitled, on the 
 abandonment of that location, to the 
 land free from any incumbrance of 
 that character, and also to the dam- 
 ages which were allowed to him. 
 
 " The important question in the case 
 therefore arises, whether the Vermont 
 Central Railroad Company have ever 
 been seized or possessed of this land 
 of the plaintiff, and for which the 
 award of the commissioners was made; 
 or has the plaintiff ever had a vested 
 right to the damages which were 
 awarded on that survey of the road ? 
 The determination of these questions 
 depends upon the construction which 
 is to be given to the seventh section of 
 the charter of this company. We obvi- 
 ously can derive but little aid on this 
 subject from adjudged cases in other 
 states, unless they have arisen upon 
 soipe statutory provision, embracing 
 substantially the specific provisions 
 of that section of this charter. By 
 that section it is provided, that when 
 land or other real estate is taken by 
 the corporation for the use of their 
 road, and the parties are unable to 
 agree upon the price of the land, the 
 same shall be ascertained and deter- 
 mined by commissioners, together
 
 602 
 
 Pkivate Corporations. 
 
 utes of the states generally make some provision in reference to 
 damai^es in such cases, such as tliat in estimating tlie same no 
 
 with the charges and costs accruing 
 thereon, and upon the payment of the 
 same, or by depositing tJie amount in a 
 hank as shall be ordered by the commis- 
 sioners, the company .shall be deemed 
 to he seized and jjossessed of all such 
 lands as shall have been a,ppraised. 
 This provision is quite specific in 
 stating what act on the part of the 
 corporation vests in them a riglit to 
 the laud. Tliey derive no title to the 
 land or any easement growing out of 
 it, from the fact of their having sur- 
 veyed the road across the plaintiffs 
 land, or having placed that survey on 
 record, nor by having the damages 
 appraised by commissioners, and caus- 
 ing their award to be recorded. The 
 statute is express, that the y)aymeut 
 or deposit of the money according to 
 the award must be made before any 
 such riglit accrues. Until that pay- 
 ment is made, the company have no 
 right to enter upon the land to con- 
 struct the road or exercise any act of 
 ownership over the same. A court of 
 equity would enjoin them from exer- 
 cising any such right, or they might 
 be prosecuted in trespass at law. The 
 ourvey and appraisal of damages are 
 merely preliminary steps to ascer- 
 tain the terms upon which the land 
 can be taken for such purposes, if 
 the company shall see fit to use the 
 same for the construction of their 
 road. If it is accepted, and the com- 
 pany conclude to take the laud, that 
 acceptance and that taking is con- 
 summated only by a payment or de- 
 posit of the money, for the use of 
 the owner of the land, as awarded 
 and directed by the commissioners. 
 The case of the Baltimore & Sus- 
 quehanna R. Co, V. Nesbil et al., 10 
 Howard, 895, is very decisive on this 
 question. In that case land was taken 
 by the company under a charter 
 granted by the state of Maryland 
 Under a provision in th(4r charter, the 
 damages were assessed by a jury, and 
 that assessment was confirmed by the 
 court. In that case, as in this, the road 
 was located, and the damages conclu- 
 sively determined and settled, so that 
 no further litigation could arise on 
 that matter. In that case, as in this 
 also, the charter provided, that tlie 
 payment, or tender of payment of such 
 
 valuation, should entitle the company 
 to the estate or laud as fully as if it 
 had been conveyed. The charter of 
 that company and of this, in all par- 
 ticulars important upon this question, 
 are substantially similar. The court 
 remarked, ' that it is the payment or 
 tender of the value assessed by the 
 inquisition which gives the title to the 
 company, and, consequently, without 
 such payment or tender no title could, 
 by the very terms of the law, have 
 passed to them.' They further ob- 
 served : ' that it can hardly be ques- 
 tioned, that without acceptance in the 
 mode presa'ibed the company were not 
 bound; that if they had been dissatis- 
 fied with the estimate placed upon the 
 laud, or could have procured a more 
 eligible site for the location of their 
 road, they would have been at liljerty, 
 before such acceptance, wholly to re- 
 nounce the inquisition. The proprie- 
 tors of the land could have no author- 
 ity to coerce the company into its 
 adoption.' The same doctrine was 
 sustained in the case of Bloodgood v. 
 Mohawk & Hud. R. R. Co., 18 Wend. 
 10, 19. In that case the company were 
 authorized to enter upon the land and 
 make such examinations and surveys 
 as were necessary to determine the 
 most advantageous route for the road, 
 and to take the same for that purpose; 
 ])rovided, that all land so taken shall 
 be purchased by the company of the 
 owner, and in case of a disagreement 
 as to the price or value of the land, 
 commissioners were to be appointed 
 to determine the same, and upon pay- 
 ment of Hitch damages toith tlie costs, 
 or depositing the same in a hank in 
 tlie city of Albany, then the corpoi'a- 
 tion shall he deemed to be seized and 
 possessed oj the land so appraised. It 
 will at once be perceived, that the pro- 
 visions of that charter are not only 
 similar in this respect to that of the 
 Vermont Central Railroad Company, 
 but that they are expressed in very 
 similar language. The chancellor re- 
 marked ' that this provision should be 
 considered in the nature of acondilion 
 precedent, not only to the acquisition 
 of the lesral title to the land, but also 
 to the right to enter and take the per- 
 manent posses^^ion of the land for the 
 use of the corporation.' It is very
 
 Eaunent Domain. 
 
 603 
 
 account shall be taken of the benefits conferred by the con- 
 templated iniproveinent for which the land is taken. ^ The i^en- 
 
 clear, from these cases, that as the 
 Verinout Central Railniad Company 
 have never paid or deposited the 
 amount of that award of the commis- 
 sioners for tlie benefit of the plaintiff, 
 as ordered by them, that the company 
 have never acquired any right or tithi 
 to the land appraised, or to any ease- 
 ment growing out of it ; and that none 
 can now be acquired under those pro- 
 ceedings. The abandonment of tliat 
 lo(!atiou, and the adoption of a new 
 route, and the construction of their 
 road thereon, will prevent the acqui- 
 sition of any such title or the perfec- 
 tion of any such right. 
 
 " It is insisted, however, that 
 though the corporation have no right 
 to the land, and have never been 
 seized or possessed of the same, yet 
 that the plaintiff, under the provisions 
 of that act, has acquired a vested right 
 to the damages awarded by the com- 
 missioners, and that that right became 
 vested in him when the award was 
 made and recorded. The statute re- 
 quires ' that the commissioners shall 
 determine the damages which the 
 owner of the land may have sustained, 
 or shall he likely to sustain, by the oc- 
 cupation of the same for the purposex 
 aforesaid.' The actual taking and oc- 
 cupation of the same for such pur- 
 poses is the foundation upon which 
 the binding character of that award is 
 made to rest. It is those circum- 
 stances which the commissioners are 
 to take into consideration in ascertain- 
 ing the amount of damages. If, there- 
 fore, the land has never been taken 
 by the company in a manner in which 
 they can legally occupy the same, no 
 damages have arisen, or can arise, from 
 that cause. When the corporation 
 obtains a vested right to the land, or 
 to the easement, the landholder has a 
 vested right to the damages ; that 
 specific art, which vests the right in 
 them, gives also a vested right to the 
 owner of the land. These respective 
 rights are correlative, and have a recip- 
 rocal relation; the existence of one 
 depends upon the existence of the 
 other. If the corporation have no 
 vested right to the land, the owner of 
 
 the land has no vested right to the 
 price which was to be paid for it. Tliis 
 is the very ground upon which the 
 cases were sustained to which we were 
 referred in the 2 Me. 179 ; 4 X. H. 
 517; and I Wend. 58. Two of these 
 cases were in assumpsit, and the other 
 in debt for the recovery of a sum 
 awarded for land taken for similar 
 purposes. The land-owner was al- 
 lowed to recover his damages, and 
 was treated as having a vested right 
 to them, as a vested right to the ease- 
 ment in the laud had been acquired, for 
 which those damages had been given 
 as a compensation That is also the 
 doctrine of the case in 10 How. 395, for 
 on that ground alone was sustained 
 the constitutionality of the act of 
 Maryland, in causing to be vacated the 
 firht appraised, and ordering a new in- 
 quisition to be taken. As there had 
 been no payment or tender of the 
 damages assessed, there was no vested 
 riglit to the land, and for that reason 
 the act was held constitutional in va- 
 cating the first inquisition. On the 
 same ground, and for that reason spe- 
 cifically assigned, the court, in the case 
 of Harrington v. Berkshire, 23 Pick. 
 267, granted a mandamus to enforce 
 the payment of damages awarded to 
 the landholder. The road had been 
 laid, the title to the easement under 
 their statute had vested, and, for that 
 reason, tlie party had a vested right to 
 the damages awarded. We know of 
 no case, neither haive we been referred 
 to any, in which such damages have 
 been recovered, or in which the owner 
 of the laud has been c<nisiiiered as 
 having a vested right to the same, 
 wlieu the corporation hud acquired no 
 right to the land, or to an easement 
 growing out of it. There is no pro- 
 priety or consistency in saying, that 
 the plaintiff shall recover this com- 
 pensation for land which has never 
 been taken or purchased from him ; 
 that this company shall pay for a right 
 or an easement, whicli they never had, 
 and which they never could legally 
 enjoy. If the line of this road had 
 been so varied as to run over another 
 portion of the plaintiffs land, it would 
 
 Const. Iowa, art. 1, § 18.
 
 604 
 
 PjKivATE Corporations. 
 
 eral rale is, that tlie party whose land is taken maj recover the 
 market value of the land thus taken, and, in the absence of statu- 
 tory provisions, no allowance should be made on account of the 
 general advantage which the owner enjoys in connnon with the 
 
 hardly be contended that he would be 
 entitled to a double compensation ; 
 yet such would be the result if this 
 action can be sustained. 
 
 " The cases in England have no 
 definite bearing upon this subject, nor 
 are they in conflict with the construc- 
 tion we have given to the provisions 
 of this charter. In that country, gen- 
 erally, the railroad is located, and its 
 courses definitely defined, when the 
 application is made to parliament for 
 a charter. When a charter is granted, 
 it is based upon that location, and 
 authority is granted to take that spe- 
 cific land for that purpose. The 
 owner of the land is required to spe- 
 cify the sum he demands for it, and if 
 not assented to, inquisition is to be 
 made to determine the value of the 
 laud. Burkiushaw v. Birmingham & 
 Oxford Railway Co., 4 Eng. Law & Eq. 
 492. Under those charters it has been 
 held that, if no inquisition is made, 
 the company are bound to pay the 
 sum specified, and not only has pay- 
 ment been enforced by mandamus, 
 but the company have, by the same 
 process, been compelled to carry into 
 effect all the powers delegated to them 
 by their charter. Blakeniore v. Gla- 
 morganshire Canal Navigation, 1 
 Mylne & Keene, 1G2, 163; Regina v. 
 The Eastern Counties R. Co., 10 Ad. 
 & Ell. 531 ; Regina v. The York North 
 Midland R. Co., 16 Eng. Law & Eq, 
 299. That doctrine, however, has 
 since been overruled in the exchequer 
 chamber, to which the last cited case 
 was carried on a writ of error. York 
 & N. Midland Railway Co. v. Regina, 
 18 Eng. Law & Eq. 206,207,208. Those 
 charters are now treated as conferring 
 conditional powers to take the land on 
 making compensation for it. The ob- 
 servations of Jeuvis, C. J., in the 
 last case, are very appropriate and ap- 
 plicable to the rights of the parties 
 under this charter. ' The company 
 may take land ; if they do, they must 
 make full compensation. The words 
 of the statute are permissive, and only 
 impose the duty of making full com- 
 
 pensation to each land-holder, as the 
 option of taking the land of each is 
 exercised.' This case as well as the 
 case of Burkinshaw v. The Birming- 
 ham & Oxford R. Co., 4 Eng. Law & 
 Eq. 489, establishes the correlative 
 and reciprocal relation existing be- 
 tween the right of the company to the 
 laud, and the right of the owner of 
 the laud to the damages awarded. If 
 the land has been taken in such a 
 manner as to vest in the company a 
 right to the use and occupancy of it, 
 compensation is to be made ; but no 
 rigiit to such compensation can exist 
 where the laud has not been taken. 
 
 ' ' The authorities upon the questions 
 involved in this case, we think, are 
 more than ordinarily clear and decis- 
 ive, and fully establish the principle 
 that the plaintiff has no claim to these 
 damages, as the land has never been 
 taken or occupied by the corporation 
 for the purposes mentioned in their 
 charter ; and that the payment of the 
 money, as awarded by the commission- 
 ers, is necessary, and is to be treated 
 as a condition precedent to the right 
 of the company to the land, or to any 
 easement growing out of it." 
 
 In Neal v. Pittsburgh & Connells- 
 ville Railway Company, 31 Penn. St. 
 19, it is held that, where a railway 
 company had located their road 
 through a man's land, and had the 
 damages assessed by viewers and con- 
 firmed by the court, the owner of the 
 land was entitled to execution for the 
 amount as upon a judgment in hia 
 favor, although the company had not 
 taken possession, and had instituted 
 proceedings to ascertain the advant- 
 ages of another route with a view to 
 change the location. 
 
 The court say, "Though railroad 
 companies may make experimental 
 surveys at pleasure before finally lo- 
 cating their road, yet certainly it has 
 never been granted to them to have 
 experimental suits at law as a means 
 of chaffering with the land-owner for 
 the cheapest route."
 
 Eminent Domain. 
 
 605 
 
 public generally by reason of the public improvement. And 
 wliero damages are assessed for a railroad, it should include coiri- 
 pensation for all actual loss to whieli the owner will be sul>ject by 
 reason of the proper construction and operation of the road. The 
 proper mode of ascertaining damages for a right of way of a road 
 across lands is to determine the market value of the premises be- 
 fore the right is set apart, and then again immediately after, and 
 the difference will be the true measure of damages. Present 
 values and the immediate and necessary consequence of parting 
 with the right conferred being alone proper to be considered, and 
 future benefits, abuse of privilege and unwillingness of the owner 
 to part with the I'ight should be disregarded. The condition in 
 which the premises will be left after the right of wax is taken, 
 together with the damages assessed, should be equal to the value 
 of the premises immediately before the right of way is taken,* 
 Present depreciation, and not anticipated injuries, .is the measure 
 of damages,^ although future exposure to fire may be proper to 
 be considered by a jury in estimating them, as it M'ould tend to 
 reduce the present value." * 
 
 1 Jacob V. City of Louisville, 9 Daua 
 (Ky.), 114 ; 2 Keut'a Com. 3o9 and 
 notes ; Isreal v. Jewett, 29 Iowa, 4T5 ; 
 Fleming v. The Chicago, etc., R. Co., 
 34 id. 353. 
 
 2 Watson V. The Pittsburgh, etc., R. 
 Co., 37 Penn. St. 469; Schuylkill Nav. 
 Co. V. Thoburn, 7 S. & R. 411; Deaton 
 V. Polk Co., 9 Iowa, 594, Preston v. Du- 
 buque, etc., R. Co., 11 id. 15; Henry v. 
 Dubuque, etc., R. Co., 2 id. 288; Sater 
 V. Burlington, etc., R. Co., 1 id. 386. 
 
 3 Wilmington, etc., R. Co. v. Stauf- 
 fer, 60 Penn. St. 374. 
 
 4 Field on Dam., i^ 846; citing Col- 
 ville V. Railway, 19 Minn. 282. See, 
 also, Pottstowu Gas Co. v. Murphy, 39 
 Penn. St. 257 ; Hornstein v. Atlantic, 
 etc., R. Co., 51 id. 87; Buckwalter v. 
 Black rock Bridge Co., 38 id. 281; Dear- 
 born v. The Boston, etc., R. Co.,4 Fos- 
 ter (N.H.), 179; Mt. Washington R. Co.'s 
 Petition,' 35 N. H. 134; Minnesota 
 Cent. R. V. McNamara, 13 Minn. 508; 
 Winona, etc., R. Co. v. Waldron, 11 
 id. 515; Fleming v. Chicago, etc., R. 
 Co., 34 Iowa, 558; Deaton v. County of 
 Polk, 9 id. 594; East Penn. R. Co. v. 
 Hottenstine, 47 Penn. St. 28 ; Searl v. 
 The Lackawanna, etc., R. Co., 33 id. 
 
 57; Patten v. North Cent. R. Co., id. 
 426; Dorian v. East Brandvwine, etc., 
 R. Co., 46 id. 520 ; Town o"f Lambert- 
 ville v.Clevinger,30 N.J. L. 53; Amsden 
 V. Dubuque, etc., R. Co., 28 Iowa, 542; 
 San Francisco, etc., R. Co. v. Caldwell, 
 31 Cal. 367; Tingley v. City of Provi- 
 dence, 8 R. I. 493 ; Bangor R. Co. v. 
 McConib, 60 Me. 290 ; Thompson v. 
 Grand Gulf R. Co., 3 How. (Miss.) 240; 
 Bonaparte v. Camden, etc., K. Co., 1 
 Bald. (U. S. C. C.)~05; Rexford v. 
 Knight. 11 N. Y. 308; Bloodgood v. 
 Mohawk, etc., R. Co., 18 Wend. 9 ; 
 Baker v. Johnson, 2 Hill, 342; People 
 V. Hayden, 6 id. 359. 
 
 Mr. Redtield observes in reference to 
 the uiode of estimating damage as fol- 
 lows . " But this is most readily and 
 fairly ascertained by determining the 
 value of the whole land, without the 
 railway and the portion remaining 
 after the railway is built. The dif- 
 ference is the true compensation to 
 which the partv is entitled." 1 
 Redf. on Rail , §"71. This gives the 
 owner the benefit anticipated from 
 the building of the road, from which 
 others in close proximity to the road 
 may be equally benefited. And the
 
 606 Pkivate Corporations. 
 
 Skc. 410. Elements of damages which may be considered. — In esti- 
 mating the damages sustained, the appraisers, however selected, or 
 the jury, where it is submitted to a jury, may consider not only 
 the present, but the prospective injury which the party will sus- 
 tain by a prudent construction and operation of the road. Thus, 
 they may take into account the effect which a proper construction 
 of tl)e road will have in diminishing deposits of sediment on the 
 balance of the land ; ' the deterioration of the balance of the land ; 
 the additional risk by fire and care of family and stock, in con- 
 sequence thereof ; the inconvenience of embankments, excavations 
 and otiier obstructions to the free use of the land or buildings ; '^ 
 the increase or decrease in value of the remaining lands, and the 
 additional expense of fencing." But these elements and consid- 
 erations should be considered as afEecting the present damages for 
 the taking of the land ; the true rule bemg, as we have stated it, 
 viz., the difference between the value of the land before and im- 
 mediately after the appropriation, as affected by the various cir- 
 cumstances which we have indicated. But where the whole land 
 of a party is taken, the measure of damages would be the whole 
 value of the land at the time of the taking, without regard to the 
 anticipated benefits which may result from the construction and 
 operation of the road." 
 
 Sec. -ill. Land injuriously aflfected but not taken. — It is a gen- 
 erally recognized doctrine of the common law, that railroad cor- 
 porations are not liable for the incidental damages occurring to 
 premises not taken, under the exercise of the right of eminent 
 domain, provided they exercise proper care in the construc- 
 tion and operation of their roads. Such damage is dainnuin 
 absque injuria, and no action can be maintained therefor.^ But 
 
 right to consider benefits to be derived reduce the amount of compensation 
 in common with others has been ques- for the appropriation of lands, by rail- 
 tioned iu many cases, as an element to road corporations. 
 
 ' Concord R. Co. v. Greely, 21 N. H. cific R. Co. v. Chrystal, 25 Mo. 544. 
 
 237. See, also, in case of woodlands, Ryder 
 
 ■^ Somerville, etc., R. Co. V. Doughty, v. Striker, 63 N. Y. 136. The value 
 
 22 N. J . L. 495. should be fixed at the time proceed- 
 
 •* Greenville, etc., R. Co. v. Partlow, ings are commenced. Graham v. Con- 
 
 5 Rich. (S. ('.) 428. nersville R. Co., 36 Ind. 463 ; 10 Am, 
 
 * See notes, supra ; Little Miami R. Rep. 56. 
 Cx). V. Collett, 6 Ohio (N. S.), 182 ; Pa- ' Field on Dam., § 43.
 
 Eminent Domain. 
 
 607 
 
 tlicy would be liable for diverting a stream of water from its 
 natural course, whereby a person sustains damage,' or doing any 
 other damage to the adjoining lands which, by the exercise of 
 
 ' Hatch V. Vermont Cent. R. Co., and 
 Wliitcomb V. Same, 25 Vt. 49. 
 
 In reference lo such cases. Red- 
 field, C. J., observed : 
 
 " The important question in the case 
 is, how far this railway company is 
 liable for consequential damage to 
 lands near their track, but no part of 
 which is taken, by tliem, for any pur- 
 pose. It seems to be conceded in the 
 argument for the plaintiff, and as- 
 sumed on all hands, that nothing in 
 the company's charter, or in any gen- 
 eral statute of the state, in force at 
 the time, in terms made them liable 
 for such damage. Indeed, this as- 
 sumption seems indispensable to en- 
 able the plaintiff to get along with his 
 case. For, if such remedy is given by 
 statute, it is probably exclusive, or 
 at all events it would doubtless often 
 have been resorted to long before 
 this. But no such claim has ever been 
 made, by any one; and this may be 
 regarded as pretty satisfactory proof 
 that no such express provision exists. 
 The English courts seem to consider 
 a provision in the charter for assess- 
 ing damages, in a summary way, ex- 
 clusive and not a cumulative remedy. 
 East and West India Docks, etc., v. 
 Qattke, ;". Eng. Law & Eq.59; Wat- 
 kins V. Great Northern Railway, 6 id. 
 179. 
 
 " It must be conceded, then, that so 
 far as a general, unqualified grant of 
 the legislature will enable the defend- 
 ants to build the road, and continue 
 its operation, without liability for con- 
 sequential damage to the proprietors 
 of the land, not taken, they are acquit 
 of all such liability There is no 
 doubt the legislature might have 
 granted the charter with this liability 
 attached to the company, or any other 
 which they saw fit to attach. The 
 accepting of the charter was not im- 
 perative upon the company. But hav- 
 ing accepted it, they are bound by its 
 conditions, and entitled to all its priv- 
 ileges. And it seems to us fair to as- 
 sume that no such obligation being 
 imposed upon the company, in the 
 charter, or by the general statutes of 
 the state then in force, it was the pur- 
 pose of the legislature to exempt them 
 
 from such obligation, so far as they 
 had th(i power to do so. The reason 
 for doing this it is scarcely needful to 
 discuss, it was, doubtless, esteemed 
 some object to encourage such com- 
 panies to build their roads. The ex- 
 tent of such injuries had not been 
 much considered, perhaps, at that 
 time, and almost all our citizens 
 then esteemed a desideratum to bring 
 a railway as near them as possi- 
 ble, the nearer the better. I siiould 
 not probably be able to give much 
 force to an argument, which is said to 
 intlueuce some minds, that it would 
 be impossiblo for any company to 
 stand up unfler such a burden. I 
 should probably think, if such was 
 tlie statute or the law, that they must 
 stand up under it, or fall before it. 
 And it seems to me, that such a statute 
 regulation, which exists in England, 
 and in Massachusetts, and perhaps in 
 some of the other states, is highly 
 equitable and just. And if these pub- 
 lic works cannot be maintained upon 
 fair and just grounds, by individual 
 enterprise, they must be fostered by 
 public grants, or delayed till they can 
 be thus maintained. But if, instead 
 of this, the legislature sees tit to an- 
 nex no such condition to the charter, 
 and thus virtually, so far as they have 
 the power, exempt them from any 
 such obligation, the company are en- 
 titled to have their rights fairly and 
 fully vindicated, in the tribunals of 
 the state, the same as other citizens. 
 Nor should this be done grudgingly, 
 or by compulsion, but justly and equit- 
 ably, the same as in other cases of 
 like character. If the character of 
 parties should come to be the measure 
 of their rights, and this to be deter- 
 mined by the fallible judgments of 
 imperfect humanity, swayed or se- 
 duced by the conceits, the passions, 
 and the prejudices of the moment, 
 men might almost as well resort at 
 once to their ultimate rights, before 
 civil government existed. 
 
 " If, then, the legislature have pur- 
 posely exempted this company from 
 such an obligation, we do not well 
 perceive how the plaintiff will be 
 fairly able to deprive them of the
 
 608 
 
 Private Corporations. 
 
 due care, and tlie adoption of proper methods might luive been 
 avoided. The presumption in all cases is, that the grant only 
 contemplates such injury from its exercise as inevitably results 
 
 benefit of the exemption, unless he 
 can show that such an exemption is a 
 violation of the constitutional restric- 
 tions upon tlie power of the legisla- 
 ture, or else that it is exempting a 
 particular person from the general 
 liability, by law attaching to all other 
 persons, similarly situated, and in 
 such case, the exemption would be 
 void, probably, as an act of special 
 legislation, upon general principles of 
 reason and justice, like a particular 
 act, allowing one citizen perpetual 
 exemption from punishment for all 
 ofifenses, or from all liability for torts. 
 
 " Perhaps it may be useful to con- 
 sider this latter ground first. It 
 should be premised, in the very out- 
 set, that it is no fair test of the gen- 
 eral liability of a railway company for 
 their acts, to argue from what natural 
 persons may lawfully do, and what, 
 if done by them, becomes a nuisance. 
 There is no doubt, that if an individ- 
 ual, or a mere partnership, should do 
 all that the defendants' company do 
 daily, in the village of Burlington, 
 they would become indictable for the 
 continuance of a common nuisance, 
 and a mere statute of exemption from 
 liability to prosecution for crime would 
 not affect their liability. And any 
 citizen suffering special damage, by 
 means of such nuisance, might have 
 his action, or enjoin the offenders or- 
 dinarily, in equity. 
 
 " But here the sovereignty of the 
 state have seen fit to confer upon this 
 company an important franchise, a 
 considerable portion of that sover- 
 eignty which themselves possess, the 
 right to construci and continue a rail- 
 way, almost from one extreme of the 
 state to the other, with slight limita- 
 tions as to its course, and providing no 
 tribunal but their own engineers to 
 determine its location. The location 
 which they adopt, then, is conclusive 
 of their rights to build the road in 
 that place as to every one, unless re- 
 sisted by some proceeding, taken at 
 the time of the location, and brought 
 to bear directly upon the question of 
 the location of the road. If the plaint- 
 iff", or others interested in the location 
 
 of this road, would insist that it is im- 
 properly located, inasmuch as it is in 
 a too populous portion of the village, 
 to allow of such a work, this should 
 have been done, by mandamus, or in- 
 junction, or some proper process, to 
 arrest and correct the evil, at the time 
 of its being built. But it is now too 
 late to bring this matter in discussion, 
 perhaps, in any form, or at any time, 
 since the decisions in Lexington and 
 Ohio R. R. V. Applegate, 8 liana, 289, 
 reversing the decision of Chancellor 
 Bibb, Philadelphia and Trenton R. R. 
 Co., 6 Wharton, 25, and many other 
 cases, and especially tlie discussions 
 in regard to the railways in the city 
 of New- York, and the fact that in the 
 largest cities upon the continent the 
 efforts of the constituted authorities 
 have hitherto been found almost pow- 
 erless for the regulation merely of the 
 operation of railways, and locomotive 
 engines, in her principal thorougli- 
 fares, and have made no approach to- 
 ward an exclusion of them even there. 
 " It will, therefore, scarcely be 
 claimed that the operations of the de- 
 fendants, in the village of Burlington, 
 are a mere nuisance. There was noth- 
 ing in the proof tending to show that 
 they were so conducted as to be made 
 such by reason of mismanagement as 
 to the time and manner of carrying on 
 their operations, as seems to have been 
 held in some of the New York cases, 
 where the operation of engines, near 
 a church, on Sunday, during the time 
 of public worship, was regarded as 
 actionable, as a common nuisance, 
 causing special damage to this church 
 as a corporation. The First Baptist 
 Church, etc., v. Sch. & Troy R. R. 
 Co., 5 Barb. 79. But the precise con, 
 trary doctrine was held, it seems, in 
 The First Baptist Church, etc., v. 
 Qtica R. R., etc., 6 Barb. 313. And in 
 Drake v. Hudson R. R., etc., 7 Barb. 
 508, it was held generally, that a road 
 running through streets in a city does 
 not amount to the infringement of pri- 
 vate rights, x'rovided the passage is 
 left free to travel. The owners of 
 property bounded on streets have no 
 exclusive right of property in them.
 
 Eminent Domain. 
 
 609 
 
 from the doing of the act at all, and that of these two methods by 
 which the act may be done, one of whicli, if pursued, will result 
 in damage to others, and the other not, that the legislature con- 
 templated only the doing of the act by the method which would 
 produce no damage. 
 
 It belongs to the corporation, the legal 
 owners of the soil, to manage and reg- 
 ulate the use of the streets. See note 
 to 7th ed. Kent's Com., vol. 2, p. 398, 
 by Kent and Eaton. It is said, in the 
 last case, that for any injury done to 
 the adjoining proprietors they may 
 have an action on the case. 
 
 " The question still recurs, what is 
 to be regarded as a legal injury ? If 
 the operations of the railway in that 
 place are to be regarded as altogether 
 legal, and the adjoining proprietors 
 have no interest in the soil under the 
 street, as in the case of an ordinary 
 highway in the country, which seems 
 to be the view taken by the court 
 here, then the ordinary carrying for- 
 ward of the business of the railway, 
 although it may cause annoyance and 
 damage to the dwellers along the 
 street, could scarcely be regarded as a 
 legal injury, for which an action will 
 lie. In the language of the law, it is 
 damnum absque injuria. If the com- 
 pany constructed their road in an im- 
 proper manner, thus causing needless 
 damage to the adjoining proprietors, 
 or if they wantonly or negligently run 
 their cars, or carry on their operations, 
 so as in any manner to cause needless 
 damage to such proprietors, they 
 would be entitled to a remedy, by ac- 
 tion. 
 
 "But, upon general principles, the 
 defendants may conduct their lawful 
 business, in a reasonable and prudent 
 manner, 'with as little injury to 
 plaintiffs premises as was consistent,' 
 etc., in the language of the bill of ex- 
 ceptions in this case. It seems to be 
 well-settled law, that fehe first occu- 
 pier of land acquires no right (within 
 
 77 
 
 the period of prescription for presum- 
 ing a grant) to exclude an adjoining 
 proprietor from the free use of his 
 land, in any proper mode, by erections 
 or excavations. A building, which 
 has stood more than twenty years, is 
 presumed to have a grant to have its 
 walls supported by the adjoining land, 
 and that its ancient lights shall not 
 be darkened. 1 Bac. Abr. 77, citing 23 
 H. 6, 15; 9 Co. 59 ; Bland's case, cited 
 Bulstrode,115; 2 Rolle's Abr. 107, 143; 
 3 Leon. 93. The same rule is laid 
 down in all the elementary writers, 
 and generally recognized in the Eng- 
 lish reports. But, in some of the 
 American states, this doctrine of an- 
 cient lights is questioned, or denied. 
 Parker & Edgarton v. Foote, 19 Wend. 
 309. But when no such question 
 arises, the adjoining proprietors may 
 excavate or put up erections to any 
 extent, with impunity, using proper 
 precautions to cause no unnecessary 
 damage. Prior occupancy gives no 
 exclusive rights. Panton v. Holland, 
 17 Johns. 92; Thurston v. Hancock, 
 12 Mass. 220, where the subject is 
 very elaborately discussed and satis- 
 factorily determined. It is here held, 
 that if one, by digging into his own 
 soil, cause the surface of his neigh- 
 bor's land to slide into the pit, or cause 
 damage to his neighbor's erections, by 
 not using proper and reasonable pre- 
 cautions in making his excavations, 
 for such damage an action will lie, 
 but not for removing his earth in a 
 prudent manner, whereby his neigh- 
 bor's soil or erections caved and fell, 
 by reason of extraordinary weight put 
 upon the land."
 
 610 Private Corporations. 
 
 CHAPTER XYIIl. 
 
 QUO WARRANTO. 
 
 Sec. 412. The writ of quo warranto at common law. 
 
 Sec. 413. Proceedings in the nature of quo warranto. 
 
 Sec. 414. The remedy regulated by constitutional and statutory provisions. 
 
 Sec. 415. As a remedy against private corporations. 
 
 Sec. 416. The fact of non-user or mis-user must be clear. 
 
 Sec. 417. Aa a remedy for an unlawful usurpation of an oifice in a private 
 corporation . 
 
 Sec. 418. Possession and user of the assumed office, essential. 
 
 Sec. 419. Xon-user as a ground for forfeiture. 
 
 Sec. 420. Destruction of the objects of a corporation, as a ground of for- 
 feiture. 
 
 Sec. 421. Pleadings. Evidence. 
 
 Sec. 422. Judgment. 
 
 Sec. 423. Nothing forfeited to the state but the franchise. 
 
 Sec. 412. The writ of quo warranto at common law. — The extraor- 
 dinary remedies by injunction, mandamus^ prohibition, quo 
 warranto, etc., may be used by and against corporations, as well 
 as natural persons. But as special treatises are devoted to these 
 subjects we do not deem it necessary fully to consider any of 
 them, except quo warranto, which relates more intimately and 
 excliTsively to corporate rights and franchises. A writ of quo 
 warranto is in the nature of a writ of right, against one claiming 
 or usurping an office or franchise, to inquire by what authority he 
 supports his claim, in order to determine the right. It lies also 
 in case of non-user or long neglect of a franchise, or mis-user or 
 abuse of it, and it commands the defendant to show by what 
 warrant he exercises such a franchise, having never had any grant 
 of it, or having forfeited it by neglect or abuse. ^ The operation 
 of the writ was extended by a statute of Edward I, but the 
 antiquity of its origin is such as to afford only matter for profit- 
 less speculation. It is not even clearly known when it fell into 
 disuse, being superseded by tlie information filed in the court of 
 
 13B]. Com. 262.
 
 Quo Warranto. 611 
 
 king's bench by the attorney-geueral, iu the nature of a writ of 
 quo warranto. The judgment upon the writ was final and con- 
 chisive, when against the crown.' It was purely of a civil charac- 
 ter, and its process was tedious. 
 
 The proceeding by information, though criminal in form, and 
 designed to punish the usurper by a fine, as well as to oust him, 
 or to seize the franchise, has long been applied to the mere pur- 
 pose of trying the civil right, the fine being nominal only.' 
 
 The terms " quo warranto,''^ and " information in the nature 
 of quo warranto " are generally used synonymously. ' As, for 
 instance, where the constitutions of certain of the states authorize 
 the issue of the " writ of quo warranto^'' it has been held in 
 Wisconsin,* in Florida,* and in the earlier Missouri cases,' that 
 jurisdiction was also given of the information in the nature of 
 the writ ; although later Missouri decisions,' as well as those of 
 Arkansas,^ assert a contrary doctrine, the rule is believed to be 
 nearly invariable. Some of the states have substituted a statu- 
 tory process in the place of the common-law proceeding, designa- 
 ted to be shorter and simpler than the latter, but partaking of its 
 general nature, both in form and in the objects to be attained, and 
 governed by the same general rules. Although the object of the 
 proceeding is to inquire into the legality of the acts of a coi-pora- 
 tion, and, if necessary, to declare its franchises forfeited to the 
 sovereignty conferring them, it is not every act of non-user or 
 mis-user for which a forfeiture will be decreed. It will not be 
 decreed for mistakes or unintentional errors. The M-rong com- 
 plained of must relate to the essence of the corporate grant, and 
 the violation of duty must be manifest. An act done which 
 wholly destroys the objects and purposes for which the charter 
 was given, affords ground for forfeiture.^ If non-user is com- 
 
 1 1 Sid. 86. ^ State v. IVIerry. 3 Mo. 278 ; State v. 
 
 2 3 Bl. Com. 263 ; State v. Gleasoa, McBride, 4 Mo. 303. 
 
 12 Fla. 190 ; Res v. Francis, 2 D. & ' State v. St. Louis Ins. Co. , 8 Mo. 
 
 E. 484 ; State Bank v. State, 1 Blackf. 330 ; State v. Stone, 25 id. 555. 
 
 267 ; 2 Kyd on Corp. 439. « State v. Ashley, 1 Ark. 279, 513 ; 
 
 2 Attorney -General v. Utica Ins. Co., State v. Real Estate Bank, 5 id. 595 ; 
 
 2 Johns. Ch. 371. 376 ; State v. West State v. Johnson, 26 id. 281. 
 
 Wisconsin Ry. Co., 34 Wis. 213, ^ State v. Real Estate Bank, 5 Ark. 
 
 * State V. West, Wisconsin Ry. Co., 595 ; People v. Hudson Bank, 6 Cow. 
 
 34 Wis. 197. 217. 
 
 5 State V. Gleason, 12 Fla. 190.
 
 612 Private Cokporations. 
 
 plained of, it must be a total non-usei* , not a mere refusal to act, 
 or a mere refusal to pay, resulting from insolvency.^ 
 
 A breach of the implied duties to which a corporation is clearly 
 subject may be visited with the same penalty as a breach of 
 those expressed.'' The charter of an insurance company has been 
 declared forfeited upon proceedings in quo warranto where the 
 company, without authority, engaged in a general banking busi- 
 ness.^ Also where a bank, prohibited by its charter from making 
 loans at more than a stipulated rate of intei'est, and from dealing 
 in promissory notes, willfully violated these restrictions.* Quo 
 warranto will not lie against a railroad company in behalf of a 
 stockholder, merely because the corporation issued stock below 
 its par value, and began to construct its road before the requisite 
 amount of stock was subscribed ; it not appearing that the peti- 
 tioner's private right or interest was thereby put in hazard.^ It 
 was maintained against a turnpike company for violating its 
 charter in not annually exhibiting its accounts to the governor and 
 council.* 
 
 It has been held to be the proper method of testing the con- 
 stitutionality of the charter of a private corporation.'' Quo war- 
 ranto has been held to be necessary, where there is a body corpo- 
 rate de facto^ which assumes to act, but which, from a defect in 
 its constitution, cannot legally exercise the power assumed." In 
 Pennsylvania, it has been held, that quo warranto may be main- 
 tained against the trustees of an incorporated church ; but that 
 the court will refuse or grant leave to file the information, accord- 
 ing to circumstances.^ In the same state it has been held that an 
 information will not be granted against the minister of a religious 
 society, where the relator and the defendant do not claim under 
 
 1 People V. Niagara Bank, 6 Cow. town R. R. Co., 9 Cusli. 596. See, 
 196 ; People v. Hudson Bank, id. 217 ; also. Commonwealth v. Allegheny 
 Rex V. Stacey, 1 T. R. 1 ; DeCamp v. Bridge Co., 20 Penn. St. 185. 
 
 Al ward, 52 liid. 468 ; Importing, etc., ''Commonwealth v. Tenth Mass. 
 
 Co. of Georgia v. Lock, 50 Ala. 332 ; Turnpike, 11 Cush. 171. 
 
 i2e Franklin Tel. Co., 119 Mass. 447. 'People v. Marshall, 1 Gilm. (111.) 
 
 2 Attorney-General v. Petersburgh 672 ; Williams v. Illinois Bank, id. 
 & Roanoke R. R. Co., 6 Ired. 461. 667. 
 
 3 People V. Uticalns. Co., 15 Johns, » Baker v. Backus, 32 111. 79 ; Crys- 
 358. tal Lake Ice Co. v. Backus, 32 111. 116. 
 
 ■* Commonwealth v. Commercial ^ Commonwealth v. Arrison, 15 S. & 
 Bank of Penn., 28 Penn. St. 383. R. 127 ; Commonwealth v. Graham, 
 
 * Hastings v. Amherst «& Belcher- 64 Penn. St. 339.
 
 Quo Warranto. 613 
 
 the same charter.^ In New York, quo warranto has been main- 
 tained against the trustees of a college, who usurped the franclii»e 
 of estabHshing a branch, and appointing professors, at a place 
 other than that of the location of the college.'^ An information 
 against a turnpike company lias been i-efused, when the wrong 
 complained of consisted in opening a road through private land, 
 without making compensation ; another remedy existing.^ So it 
 has been held to be not the proper remedy for the recovery of 
 land, except when the hind has esciieated or been forfeited to the 
 state, for its use.* 
 
 It was formerly a disputed question whether the proceeding 
 was available against one intruding himself into an office of a 
 private corporation. The question, however, has for some time 
 been settled in favor of the jurisdiction. In a Pennsylvania case, 
 decided in 1827,^ the point was fully argued, and the cases learn- 
 edly reviewed. TiLGHMAN, C. J., said: "I find no instance of 
 an information in the nature of a quo warranto in England, ex- 
 cept in a case of a usurpation of the king's prerogative, or of one 
 of his franchises, or when the public, or at least, a consideraljlo 
 number of people, were intended.'' * * * "I incline to the 
 oijinion, that in all cases where a charter exists, and a question 
 arises concerning the exercise of an office claimed under that 
 charter, the court may, in its discretion, grant leave to file an in- 
 formation. Because in all such cases, although it cannot strictly 
 be said that any prerogative or franchise of the commonwealth 
 has been usurped, yet, what is much the same thing, the privilege 
 granted by the commonwealth has been abused. The party 
 against whom the information is prayed has no claim but from 
 the grant of the commonwealth, and an unfounded claim is an 
 usurpation, under pretense of a charter, of a right never granted." 
 There is nothing in the English authorities inconsistent with the 
 foregoing, and in the courts of the various states the question is 
 no longer an open one.* 
 
 ' Commonwealth v. Murray, 11 S. & ^ Commonwealth v. Arrison, 15 S. 
 
 R. 73. & R. 127. 
 
 ^ People V. Geneva College, 5 Wend. * Commonwealth v. Union Ins. Co., 
 
 211 . 5 Mass. 231 ; State v. Buchanan, 
 
 3 People V. Hillsdale & Chatham Wright (Ohio), 233 ; Murphy v. Farm- 
 Turnpike Co., 2 Johns. 190. ers' Banii, 20 Penn. St. 415 ; Commou- 
 
 4 State V. Shields, 56 Ind. 521. wealth v. Graham, 64 Penn. St. 339.
 
 614 Private Coeporations. 
 
 The usurper, however, must be an ofReer, strictly speaking, and 
 not a mere servant. As, for instance, quo warranto lias been re- 
 fused against the secretary and treasurer of a railroad company, 
 on the ground that he was a servant only, holding at the will of 
 the directors.^ It has been refused also, when resorted to against 
 the trustees of an insurance company, to forfeit their offices, on 
 the ground that they held subordinate employments under the 
 corporation, such as solicitor and traveling agent ; the latter not 
 being officers of the company.'' 
 
 As the information is in form criminal, process must run in 
 the name of the people.'' At common law, private individuals, 
 without the intervention of the crown officer or attorney-general, 
 cannot file an information.* An information by the attorney- 
 general ex officio is filed on his own authority. Under the English 
 practice, an individual specially affected or injured by a usurpa- 
 tion of office, or other wrong or injury to the public, may file in 
 the court of king's bench an application for a direction to the 
 master of the crown office to file an information to redress the 
 public wrong of which the relator complains, whereupon, security 
 for costs being given, notice usually issues to the party com- 
 plained of, and probable cause being shown, the master of the 
 crown office is directed to file an information at the suit of the 
 king, but naming the relator, after which the suit is conducted 
 by the relator at his own expense, much in the nature of a civil 
 suit. In Massachusetts, it has been held that, except in the 
 limited number of cases in which it is provided by statute that an 
 individual may, upon leave of court, file an information, the dis- 
 cretion of the attorney-general will not be controlled, nor will 
 the court direct or advise him as to his duties in the premises.' 
 In Ohio, on the contrary, the court held that if, in a proper case, 
 the prosecuting attorney declines to apply for a rule to show cause 
 why the writ should not issue, the court will order him to make 
 it peremptorily, or will direct it to be made by another person 
 according to circumstances.* In this case, the application was 
 
 ' People V. Hills, 1 Lans. 202. » Qoddard v. Smitbett, 3 Gray. 116 : 
 
 "^ Commonwealth v. McBride, 4 Leg. Rice v. Commonwealth Bank, 126 Mass. 
 
 Qaz. (Penn.) 338. 300. 
 
 3 Donnelly v. People, 11 111. 552; « i2e Mount Pleasant Bank, 5 Ohio, 
 
 Hay V. People, 59 id. 94. 249. 
 
 ^"Qoddard v. Smithett, 3 Gray, 116.
 
 Quo Wabranto. 615 
 
 made by an attorney of the court, in the name of a private indi- 
 vidual. 
 
 Where leave is required, it will usually be granted^ if the right, 
 or the fact on which the right depends, is disputed and doubtful.^ 
 But not when another remedy exists, either at common law ' or 
 under a statute ; ^ or if tlic right has already been determined by 
 mandamus ; * or if it depends on the right of those who voted 
 for defendant, and this right has not been settled ; or if the 
 right has been acquiesced in for a length of time ; ^ or if it ap- 
 pear that the official term of the incumbent of the office will expire 
 before a determination upon the proceedings can be had ; ° or 
 where the party moving has waived his right or forfeited his 
 claim to assert it ; as where, knowing the illegality of an election, 
 he participates in corporate meetings, and recognizes and acqui- 
 esces in the result.' 
 
 The conduct or motive of the relator may properly be consid- 
 ered upon the application to grant leave to file the information ; 
 leave has been refused, where the relator was a stranger, showing 
 no interest in himself and failing to show that the public interest re- 
 quired that the proceeding be instituted ; * where he was shown 
 to be the tool of one to whom the application would have been 
 refused ; ' when the application is made to obtain, indirectly, a 
 decision upon liis own case, which he might bring directly before 
 the court.^" 
 
 In those of the United States where the jurisdiction is not con- 
 ferred by constitutional or statutory provisions in analogy to the 
 
 1 Rex V. Latham, 3 Burr. 1485. * People v. Sweeting. 3 Johns. 184 ; 
 
 "^ State V. Marlow, 15 Ohio St. 114 ; Commonwealth v. Athearn, 3 Mass. 
 
 State V. Taylor, id. 137 ; People v. 285; Commonwealth v. Sparks, 6 
 
 Hillsdale, etc., Co., 3 Johns. 190; State Wharton (Peun.), 416; Commonwealth 
 
 V. Wadkins, 1 Rich. 43. v. Smith, 4.5 Penn. St. 59; this rule 
 
 3 Updegraff v. Evans, 47 Penn. St. does not prevail in Enjjland ; though 
 
 103; Hullman V. Honcomp, 5 Ohio St. there can be no judgment for the 
 
 237. ouster, judgment may be rendered for 
 
 * 2 Hawk. P. C. chap. 26, § 9. the fine. Rex v. Payne, 3 Chitty, 367. 
 
 'Bac.Abr., Informations. The length ■" State v. Lehre, 7 Rich 234; Rex v. 
 
 of time of the acquiescence was form- Stacy, 1 T. R. 1. 
 
 erly indefinite, varying with each case. =* Rex v. Grant, 11 Mod. 229 ; Rex v. 
 
 In England, it was finally fixed by Stacey, 1 T. R. 3; Miliary. English, 
 
 the courtat twenty years, then reduced 1 N. J. 217. 
 
 to six, which last period was con- ' Rex v. Stacey, 1 T. R. 3 ; Rex v. 
 
 firmed by act of 33 Geo. Ill, stat. 58 ; Cudlipp, 6 id. 503; Rex v. Trevenen, 
 
 in Ohio the statute period of limitation 3 B. & Aid. 344, 482. 
 
 is three years. '" Rex v. Anderson, 3 Q. B. 740.
 
 QIQ Private Corporations. 
 
 Eno:lisli practice, the process usually issues from the highest court 
 of orii^inal jurisdiction. It has been held that it cannot issue from 
 an appellate court, or from a court whose subjects of jurisdiction 
 are defined by law, and which do not include quo warranto} 
 
 In quo warranto and proceedings in the nature thereof, the 
 ordinary rules of pleading prevail.^ If for mis-user, the facts 
 necessary to show the mis-user must be set forth with the exact- 
 ness of pleading required in a penal action.^ 
 
 The usual process is a venire facias in the first instance, fol- 
 lowed by a distringas* Siderfin,' after comparing the precedents 
 in Coke' s Entries, declares the process upon the information to 
 be as above stated, while that upon the writ he declares to be a 
 summons in the first instance, and that for default of appearance, 
 the liberties shall be seized.* 
 
 The judgment seems to be the same upon the information as 
 upon the writ.' In a New York case,* Savage, C. J., thus states 
 the distinction between the judgfiient against the individuals and 
 that against the corporation. " Whenever individuals or a corpo- 
 ration shall be found guilty, either of usurping or intruding into 
 any office or franchise, or of unlawfully holding, judgment of 
 ouster shall be rendered, and a fine may be imposed ; but when 
 the proceeding is against a corporation, and a conviction ensues 
 for mis-user, non-user or surrender, judgment of ouster and of dis- 
 solution shall be rendered; which is equivalent to judgment of 
 seizure at common law." An English case * thus states the dis- 
 tinction : " When it clearly appears to the court that a liberty is 
 usurped by wrong, and upon no title, judgment only of ouster 
 shall be entered. But when it appears that a liberty has been 
 granted, but has been mis-used, judgment of seizure into the 
 king's hands shall be given." 
 
 1 State V. Asliley,! Ark. 279; Ex2)arte Hertford, 1 Salk. 374 ; S. C, Carthew, 
 Attorney-General,! Cal. 85. 503; Com. Dig., Quo Warranto; State 
 
 2 People V. Clark, 4 Cow. 95. For Bank v. State, 1 Blackf. 273. 
 
 tlie form of the information, see ^ Note to Le Roy v. Trinity House, 
 
 People V. Utica Ins. Co., 15 Johns. 1 Sid. 86. 
 
 362; Commonwealth v. Fowler, 10 ^ Kyd and some other writers speak, 
 
 ^lass. 290 ; for the substance, see State probably erroneously, as though the 
 
 V. Tudor, 5 Day, 329 ; see also English venire facias and distringas were used 
 
 precedents in 6 Wentworth's Plead- indifferently with the subpoena and 
 
 ings, 28-234, and an outline of the attachment. 
 
 English form in 2 Kydon Corp. 403. "^ 2 Kyd on Corp. 406. 
 
 ^ People V. Kingston, etc., Turnpike ^ People v. Saratoga & Rensselaer 
 
 Co. , 23 Wend. 193. R. R. Co., 15 Wend. 128. 
 
 4 2 Kyd on Corp. 438; King v. » Rex v. London, 2 T. R. 523.
 
 Quo Warranto. 617 
 
 The form of the judgment at common law was formerly the 
 subject of some discussion and dispute, as to whether it should 
 be of seizure, ouster, or mixed of both.' The question is no 
 longer of much })r;ictical importance, having been set at rest l>y 
 statutes or decisions in most of the states. 
 
 At common law neither party could recover costs. In England 
 this rule was changed by the statute 9 Anne, chap. 20. In Penn- 
 sylvania, when the statute of Aime had not been re-enacted, it was 
 held that costs were not recoverable. In most of the states, how- 
 ever, costs follow the judgment, as in suits generally. 
 
 The common-law process after judgment of forfeiture was a 
 writ of seizure to the sheriff, which, after reciting the proceedings, 
 commanded him to seize the liberties, etc.'' The judgment of 
 forfeiture may be the same for non-user, where no property has 
 been held or rights exercised, as for mis-user, after the acquisition 
 of property and the exercise of power,^ and the forfeiture is of 
 the franchises, not of the property of the corporation. This dis- 
 tinction was learnedly and fully discussed in an Indiana case,* in 
 which the English authorities were reviewed. 
 
 Sec. 413. Proceedings in the nature of quo warranto. — In mOSt of 
 the states proceedings are autliorized by statute in the nature of 
 quo warranto. The proceeding is authorized for substantially the 
 same purpose, namely : to correct usurpations in office or abuse 
 of corporate franchises. iVnd the term quo warranto is frequently 
 used in constitutions and statutes when proceedings in the nature 
 of quo warranto are meant.^ 
 
 1 The English cases on this head Commonwealth v. Fowler, 11 Mass. 
 
 are collected in 2 Kyd on Corp. 407- 339. 
 
 409. Kyd, citing Co. Ent. 535 5, 537, - Kyd on Corp. 410, citing Co. Eut. 
 
 a ; Rast. 540 h, gives the following as 539, h. 
 
 the form of entry when judgment is ^ State Bank v. State, 1 Blackf. 281 ; 
 
 for the defendant : " It is considered King v. Amery, 2 T. R. 515. 
 
 that the liberties, etc., be allowed to ^ State Bank v. State, ante. 
 
 the said ; " or thus : " the said ^ See Bouv. Law Die. (^uo warranto 
 
 may use, have and enjoy all the is not issuable by a court whose juris- 
 
 said, etc. ; and the said , as to diction, as defined by the constitution 
 
 the said premises, may be dismissed of the state, is strictly appellate. 
 
 from this court, saving always the State v. Ashley, 1 Ark. 279 ; Ex, parte 
 
 right of the said lord, the king, if Attorney-General, j Cal. 85. Nor is 
 
 hereafter," etc. Forms of judgment its issue a matter of right, but rests 
 
 are given in 6 Wentw. Plead . 13, 89, in the sound discretion of the court, 
 
 161 and 242. A form will be found in Comm. v. Arrison, 15 S. & R. 127, and 
 
 78
 
 618 
 
 Private Corporations. 
 
 Mr. Justice Spencer, in relation to this question and the use of 
 the term in the constitution of New York, observes : " An infor- 
 mation in the nature of quo warranto is a substitute for that an- 
 cient writ wliich has fallen into disuse, and the information which 
 has superseded the old writ is defined to be a criminal method of 
 prosecution, as well to punish the usurper by fine for the usurpa- 
 tion of the franchise, as to oust him, and seize it for the crown. 
 It has for a long time been applied to the mere purpose of trying 
 the civil right, seizing the franchise or ousting the wrongful pos- 
 sessor, the fine being nominal only." ^ 
 
 And Dixon, C. J., observes : " Xow it was with the view of 
 this well-known jurisdiction, then and long before exercised only 
 in the proceeding bj"^ information, that the framers of the consti- 
 tution gave or reserved the power to this court, using for con- 
 venience and brevity merely the words ^ writ of quo warranto,^ 
 just as those words were used by Chancellor Kent in Attorney-^ 
 General v. Utica Insurance Company, 2 Johns. Ch. 371, 376, 
 and as they had been used in our own statute, * * •* as 
 
 it will only issue in favor of a relator 
 having an interest to be affected, 
 Comm. V. Cluley, 56 Penn. St. 370 ; 
 consequently it will not be issued at 
 the suit of a private relator who has 
 no interest, to perfect the charter of a 
 private corporation. Comm. v. Alle- 
 ghany Bridge Co., 20 Penn. St. 185 ; 
 Comm. V. Farmers' Bank, 2 Grant's 
 Cas. (Penn.) 393. Nor even in Penn- 
 sylvania will the writ be maintained 
 to dissolve a corporation unless upon 
 the relation of the attorney-general or 
 Bome authorized agent of the state. 
 Murphy v. Farmers' Bank, etc., 20 
 Penn. St. 415. In Massachusetts, un- 
 der the practice act of 1852, § 42, 
 which is still in force, which enacts 
 that any person whose private right 
 or interest has been injured, or is put 
 in hazard, by the exercise, by any pri- 
 vate corporation or any persons claim- 
 ing to be a private corporation, of a 
 franchise or privilege not conferred 
 by law, whether such person be a 
 member of such corporation or not, 
 may apply to the supreme judicial 
 court for leave to file an information 
 in the nature of a quo warranto — the 
 
 rule stated in the text no longer pre- 
 vails in that state ; Boston & Provi- 
 dence R. R. Co. V. Midland R. R. Co., 
 1 Gray, 340 ; but a religious society is 
 not within the meaning of this act. 
 Goddard v. Smithett, 3 Gray, 116. But 
 in Massachusetts it is held that an in- 
 formation in the nature of a quo war- 
 ranto will not lie without the inter- 
 vention of the attorney-general, against 
 a corporation regularly organized un- 
 der the statute of 1870, chap. 224, if 
 the forms of law in the organization 
 of the corporation have been com- 
 plied with and the certificate has been 
 issued by the secretary of the com- 
 monwealth, although the certificate 
 was obtained by fraud. Rice v. Com- 
 monwealth Bank, 126 Mass. 300. In 
 New Jersey substantially the same 
 provisions as the statute, 9 Anne, 
 chap. 20, is in force and is construed 
 in the same manner. Individuals may 
 be permitted, as in Pennsylvania, for 
 an usurpation of an office in a corpo- 
 ration, but, even by leave of court, 
 cannot file a writ to dissolve it. State 
 v. Paterson, etc., Turnpike Co., 21 N. 
 J. L. 9. 
 
 1 People V. Utica Ing. Co. , 15 Johns. 358.
 
 Quo Wakkanto. 619 
 
 meaning the same thing and intended to convey the same general 
 idea of the words ' information in the nature of quo %oarranto.' " ^ 
 
 Skc. 414. The remedy regulated by constitutional and statutory pro- 
 visions. — The constitutions and statutory provisions of the various 
 states, usually fix the courts that are authorized to administer this 
 remedy and the mode and effect of the remedy in different cases. 
 And usually, the proceeding by quo warranto^ as well as by the 
 other extraordinary remedies by injunction and mandamus^ is not 
 authorized when tlie party claiming it has an adequate remedy 
 by ordinary proceedings.' It can only be used to test the actual 
 right to an office or franchise, and not the legality of the official 
 action of corporate officers.' And the statute provides for this 
 remedy, to test the right to exercise a franchise, it is held to be 
 exclusive of all other remedies for that purpose." 
 
 Sec. 415. As a remedy against private corporations. — Uaving con- 
 sidered, briefly, the origin and liistory of tlie writ of quo war- 
 ranto^ and the modern substitute for the remedy, by information 
 in the nature of quo warranto^ and some of the general principles 
 applicable to the remedy, we will now proceed to discuss the remedy 
 more particularly in its application to private corporations.* 
 
 ' State V. West Wis. R. Co., 34 Wis. with 'information in the nature of 
 
 197. quo xcarrmito,' which had so long been 
 
 Dixon, C. J., in this case, con- the complete and unqualified substi- 
 
 struing a clause in the constitution of tute for the writ." State v. West 
 
 Wisconsin, giving power to the su- Wisconsin R. Co., 34 Wis. 197. See, 
 
 preme court of that state "to issue also, State v. Gleason, 12 Fla. 190; 
 
 writs of habeas corpus, mandamus. State v. Merrv, 3 Mo. 278; State 
 
 injunction, quo warntnio, certiorari," v. St. Louis Ins. Co., 8 id. 330 ; State 
 
 etc., further observes : v. Stone, 25 id. 555; Commonwealth 
 
 " It is as impossible to believe that v. Burrell, 7 Penn. St. 34 , Murphy v. 
 
 the framers of the constitution were Farmers' Bank, 20 id. 415: State v. 
 
 looking back over a period of three or Ashley, 1 Ark. 279, 513; State v. 
 
 four hundred years, into the middle Johnson, 26 id. 281. 
 ages, designing to give this court such ^People v. Hillsdale & C. Turnp. 
 
 jurisdiction and only such as was then Co. , 2 Johns. 190 ; State v. Wadkins, 
 
 exercised in virtue of the writ of quo 1 Rich. 42 ; State v. Marlow, 15 Ohio 
 
 «car?'a?i<o, as it is that they intended to St. 114; State v. Taylor, id. 137. 
 confine the court to that antiquated ^ People v. Whitcomb, 55 111. 172 ; 
 
 and useless process. The framers of Dart v. Houston, 22 Ga. 506. 
 the constitution were practical men * UpdegratF v. Evans, 47 Penn. St. 
 
 and were aiming at practical and use- 108 ; Hullman v. Honcomp, 5 Ohio St. 
 
 ful results. They used the words 237. 
 
 'writ of quo warranto,' just as they ^ It is held in Arkansas that the 
 
 had been used in common parlance, ancient writ is the proper remedy to 
 
 and by courts, lawyers and writers for resume a corporate franchise. State 
 
 hundreds of years, as synonymous v. Real Estate B'k, 5 Ark. 595.
 
 620 
 
 Private Corporations. 
 
 From what has ah'eady been said, it is ev-ident that a corporate 
 franchise is a special privilege or imrauiiity proceeding from the 
 sovereign power, and conferred by a grant from such power. 
 And it is a doctrine universally recognized, that the sovereignty 
 conferring the franchise may, at any time, through the courts 
 it has constituted, inquire into the manner in which the franchise 
 is used. And if the person or association on which the privilege 
 is conferred has been guilty of mis-user or non-user; or if such 
 party has assumed tiie right of franchise where none exists, the 
 courts may, by the proceedings in the nature of quo warranto^ 
 declare a forfeiture, or render a judgment of ouster as the circum- 
 stances of the cases require.^ But it is not every act of non-user 
 or mis-user that will justify a judgment of forfeiture. In such 
 cases it is held that these wrongs nmst, in order to constitute 
 grounds for forfeiture, relate to the essence of the corporate grant, 
 and the contract thereby created between the sovereign and the 
 corporators. But willful and repeated violations of duty in this 
 respect would usually warrant a judgment of forfeiture.'' 
 
 ' An information in the nature of 
 quo warranto lies against a corporation 
 for carrying on banking business 
 without authority, People v. Utica 
 Ins. Co., 15 Johns. 358, or against a 
 person who has usurped the office of a 
 director therein. People v. Tibbitts, 
 4 Cow. 358, or of trustee. Coram, v. 
 Graham, 64 Penn. St. 339. Indeed an 
 information lies against a corporation 
 for any cause of seizure or dissolution. 
 People V. Bristol, etc., Turnpike Co, 
 23 Wend. 222. The use of an abbre- 
 viation of its corporate name is not an 
 usurpation for which quo warranto 
 will lie. People v. Bogart, 45 Cal. 73. 
 
 '■'Commonwealth v. Commercial B'k, 
 28 Penn. St. 383 ; People v. Kingston 
 «& Middletown Turnpike Co., 23 Wend. 
 193. 
 
 In the former case the proceeding 
 was in the nature of quo warranto to 
 procure a forfeiture of the charter of 
 the bank for mis-user on the ground 
 of its having dealt in promissory 
 notes contrary to the express provis- 
 ions of its charter, and loaned money 
 at rates of interest not authorized by 
 it. The court, by Lewis, C. J., say : 
 " These acts are expressly prohibited 
 by the charter. The question then 
 
 arises, do these constant and willful 
 violations of the fundamental condi- 
 tions upon which the charter was 
 granted entitle the commonwealth to 
 demand its forfeiture '? The question 
 is not whether a single act or even 
 a series of acts of mis-user, through 
 inadvertence or mistake, may work a 
 forfeiture, but whether the constant 
 and willful violation of these impor- 
 tant conditions of the grant produces 
 that effect ? 
 
 "Mr. Justice Story, in delivering 
 the judgment of the supreme court of 
 the United States in Mumma v. Poto- 
 mac Company, held that ' a corporation, 
 by the very terms and nature of its 
 political existence, is subject to disso- 
 lution by forfeiture of its franchises 
 for willful mis-user or non-user.' 8 
 Pet. 287. 
 
 *' Many years before that decision 
 was pronounced the same principle 
 was fully recognized by the same 
 high authority in Terrett et al. v. Tay- 
 lor et al., 9 Cranch, 43, where the right 
 of forfeiture for mis-user or non-user 
 was held to be ' the common law of 
 the land, and a tacit condition annexed 
 to the creation of every corporation.' 
 
 " It is now well settled by numerous
 
 Quo Wakranto. 
 
 621 
 
 Sec. 416. The fact of non-user or mis-user must be clear. — It will 
 occur to every one, on tho least retlectioii, that in the pursuit of 
 the main objects and purposes of coi'porations organized for 
 
 autliorities that it is a tncit condition 
 of a grant to a corporation tiiat the 
 grantees shall act up to the end or de- 
 sign for which they were incorporated, 
 and hence, through neglect or abuse 
 of its franchises, a corporation may 
 forfeit its charter, or for a condition 
 broken or for a breach of trust. See 
 Ang. & Ames on Corp., i^ 776, and 
 the cases there cited. 
 
 " In the Attorney-General v. Peters- 
 burgh & Roanoke R. Co.,G Iredell, 
 461, it was held that the omission of 
 an express duty prescribed by charter 
 is a cause of forfeiture, and that, as 
 implied powers are as much protected 
 by the law as those which are ex- 
 pressed, implied duties are equally 
 obligatory with duties expressed, and 
 their breach is visited by the same 
 consequences. It may be affirmed 
 as a general principle, that where there 
 has been a mis-user or non-user in re- 
 gard to matters which are of the 
 essence of the contract between the 
 corporation and the state, and the acts 
 or omissions complained of have been 
 repeated and willful, they constitute 
 just ground of forfeiture." 
 
 It is considered a mis-user per se at 
 common law to neglect the perform- 
 ance of conditions contained in 
 the charter. But will such neglect 
 always constitute grounds for forfeit- 
 ure ? Nelson, C. J., in considering 
 the above question, in People v. Kings- 
 ton & Middletown Turnpike Co., 23 
 Wend. 193, observes ; " But grant- 
 ing this to be the general principle, 
 the question still comes up for con- 
 sideration, what departure from the 
 provisions of the charter will work a 
 forfeiture ? Shall every omission or 
 non-performance of a condition of the 
 grant have this effect? Though the 
 proceeding by information be against 
 the corporate body, it is the acts or 
 omissions of the individual corpora- 
 tors that are the subject of the judg- 
 ment of the court. The powers and 
 privileges are conferred and the con- 
 ditions enjoined upon them, they ob- 
 tain the grant and engage to perform 
 the conditions, and when charged 
 with a breach I do not perceive any 
 
 reason against holding them account- 
 able upon principles applicable to an 
 individual to whom valualjle grants 
 have been made upon conditions pre- 
 cedent or subsequent. As to him, per- 
 formance is indispensable to the vest- 
 ing or continued enjoyment. If a 
 feoff'ment be made of lauds upon con- 
 dition of paying rent, building a 
 house or planting an orchard, and a 
 failure to perform, the feoffer may 
 enter ; so, if an office be granted, a con- 
 dition is implied tliat the party shall 
 faithfully execute it, and for neglect 
 the grantor may discharge him. 1 
 Bacon, 639; 15 Wend. 291; 1 id. 
 388 ; 3 id. 498 ; 13 id. 530. 
 
 " Placing corporate grants upon this 
 footing there can be no great ditHculty 
 in ascertaining the principles that 
 should govern conditions annexed to 
 them. The analogous cases of individ- 
 ual conditional grants will give the 
 rule. In these a reasonable and sub- 
 stantial performance according to the 
 intent of the grantor is required. Shep. 
 Touch. 133 ; 15 Wend. 291. 
 
 " In cases of conditions subsequent, 
 if impossible to be performed, or 
 rendered impossible by the act of 
 God, the grantee is excused, and the 
 estate is absolute. 2 Bacon, 676, tit. 
 Condition ; Shep. Touch. 133, 157. 
 
 " So if waste be committed by a 
 stranger it shall not be a breach of the 
 condition of the lease. 2 Bacon, 652. 
 The whole law on the subject will be 
 found reasonable, and nothing will be 
 found unreasonable, and nothing is 
 required but what is within the means 
 and ability of the party to comply 
 with. It is emphatically denied with 
 respect to corporators, for we all know 
 the nature of the conditions in their 
 characters depends very much upon 
 themselves ; they usually settle the 
 terms of the grant, and therein con- 
 sult their own as well as the public 
 interests. 
 
 " I have said that the whole law on 
 the subject of performance of condi- 
 tions precedent or subsequent is reason- 
 able and within the ability of the 
 company to perform. A substantial 
 performance according to the intent of
 
 622 
 
 Private Corporations. 
 
 pecuniary gain, mistakes and unintentional errors will naturally 
 occur that may be in violation of the charter or constating instru- 
 ments, and that not unfrequently the line between such acts as 
 may be authorized and those which are not will be indistinct. 
 
 The courts, therefore, especially in proceedings by quo warranto 
 for a forfeiture of the grant on account of mis-user or non-nser, 
 exercise great caution and seldom adjudge a forfeiture unless 
 there is a manifest violation of the grant.^ But where the viola- 
 tion of the charter is clear, and especially if frequently repeated, 
 or where there is an exercise of powers beyond those conferred, 
 as where a corporation authorized to do an insurance business 
 enwasfes in a sreneral banking business, on an information filed 
 against it therefor, in a court of proper jurisdiction, it will render 
 a judgment of forfeiture or ouster against such corporation.'' 
 
 the charter is all that is required. 
 Under the issues that are presented 
 this will be a question on the trial. 
 If such a performance is shown the 
 defendants will be entitled to a ver- 
 dict. 
 
 "The law in respect to individual 
 grants on condition will afford familiar 
 principles to guide the court and jury. 
 
 Slight departures are overlooked. The 
 learning of the law is against the 
 party claiming the forfeiture, and if 
 the failure is such as cannot be re- 
 garded in' a court of law upon settled 
 principles, and has arisen from mis- 
 take or accident, the legislature will 
 apply the remedy. They and not the 
 court possess the dispensing power." 
 
 ' High on EKtra. Leg. Rem., § 649 ; 
 State v. Commercial Bank, 10 Ohio, 
 535. 
 
 '^ People V. Utica Ins. Co., 15 Johns. 
 358. 
 
 In a case where an information 
 was filed by the prosecuting officer of 
 the state on its behalf, against the de- 
 fendants, a railway corporation in the 
 state of New Hampshire, alleging a 
 usurpation on the part of the defend- 
 ants, of the exercise of corporate func- 
 tions within the state of Vermont in a 
 manner inconsistent with the sover- 
 eignty of the state, and claiming pro- 
 cess against the state in the nature of 
 quo warranto. It appeared that the 
 defendants, a railroad corporation, hav- 
 ing a line of railroad through the state 
 of New Hampshire, to line of the state 
 of Vermont at Wells river, erected a 
 bridge across the Connecticut river, 
 in order to connect with certain Ver- 
 mont railroads, which connection was 
 authorized by express statutes of that 
 slate, and purchased about fifteen 
 
 acres of land, for the use of the former 
 road.useful in doing business at the line 
 of the state, if they should not unite at 
 the line of the state, and indispen- 
 sable, if they should thus unite. The 
 question presented was, whether the 
 purchase by, and conveyance to them, 
 of the land in Vermont was a usurpa- 
 tion of sovereign powers of the state. 
 On this question Redfield, J., ob- 
 serves : 
 
 " By their charter, it is admitted, 
 this corporation have permission to 
 hold real estate, for the accommoda- 
 tion of their business, greatly exceed- 
 ing what they now hold. The ques- 
 tion then is, whether the having pur- 
 chased and taken a conveyance of this 
 land, in this slate, is to be regarded 
 as any usurpation upon the sovereignty 
 of this state ? And it seems to us very 
 obvious that they have committed no 
 such usurpation ; that they have as- 
 sumed no franchises which are strictly 
 of a prerogative character. By that 
 I mean, such acts as neither natural or
 
 Quo Warranto. 
 
 623 
 
 Sec. 417. As a remedy for an unlawful usurpation of an office in a pri- 
 vate corporation.- It has bucii a disj)uted (j[ucsti(ni whether an 
 information in the nature of quo warranto was a lawful remedy, 
 in case of an intrusion into an office of a private corporation. 
 
 artificial persons can exercise without 
 special grant of the legislature. All 
 the fuuctions of a corporation are, in 
 one sense, franchises. The right to 
 hold property in the corporate name, 
 to sue and be sued in that capacity, 
 to have and use a corporate seal, and 
 by that to contract, and some others, 
 perhaps, are franchises, which con- 
 stitute the very definition of a corpora- 
 tion . And whenever and wherever 
 the corporation is recognized, for any 
 purpose, the existence and exercise of 
 tliese franchises must all be recog- 
 nized. But the right to build and run 
 a railroad, and take tolls, or fares, is a 
 franchise of the prerogative character, 
 which no person can legally exercise, 
 without some special grant of the 
 legislature. And we should not, of 
 course, be expected to suffer a foreign 
 niilroad to usurp the exercise of any 
 franchises of this character. This dis- 
 tinction exists in regard to some other 
 classes of corporations. It is only the 
 i^ssuing of notes to be the represen- 
 tative of specie, and to form a por- 
 tion of the currency, and the other 
 local operations of hanking — mak- 
 ing discounts and receiving depos- 
 its, and the like — which are of a 
 prerogative character. But there are 
 many other franchises of foreign 
 banks, and other business corpora- 
 tions, of which it is of daily occur- 
 rence to allow the exercise, in every 
 state in the union. They are allowed 
 to sue and collect their debts, to levy 
 their executions upon land, and take 
 land in payment of debts, when mort- 
 gaged, or otherwise. And of all this 
 110 doubt is entertained. Mr. Justice 
 McKiNLEY was the only judge who 
 ever had the boldness to hold the con- 
 trary, and his decision was speedily 
 reversed by the supreme court. Bank 
 of Augusta V. Earle, 13 Pet. 519, 588. 
 " This point is expressly decided in 
 the state of New Hampshire, in the 
 case of Lumbard v. Aldrich, 8 N. H. 
 31, where it was held that " a corpora- 
 tion, created by the laws of another 
 state, has power to take and hold 
 
 lands in this state." P.\rkeii, J., 
 says: "If they may sue, they may 
 satisfy their judgment, by levy upon 
 lauds ; and of course hold the land 
 and convey it. And if they can do 
 this, they may take title by deed, in 
 satisfaction of a debt, by agreement, 
 or upon any other consideration." The 
 same point is decided in The Silver 
 Lake Bank v. North, 4 Johns. Ch. 370, 
 and in most of the American slates. 
 Our own reports are filled with cases 
 in favor of and against foreign cor- 
 porations. Day V. The Essex County 
 Bank, 13 Vt. 97; Grafton Bank v. 
 Doe, 19 id. 4G3 ; Claremont Bank v. 
 Wood, 10 id. 582, occur to me at the 
 moment, and there are, doubtless, 
 twenty other cases of the kind. All 
 the chartered bridge coinjianies across 
 Connecticut river are, of course, incor- 
 porations, in most cases the charters 
 having been granted by the legisla- 
 ture of New Hampshire ; and it was 
 shown to us, in the trial of this cause, 
 that in very few instances has any 
 grant been obtained from this state. 
 But these bridges, like the railroad 
 bridge in question, must rest at their 
 western termini upon the soil of this 
 state. And all this has been acqui- 
 esced in for fifty years and more. 
 This will not indeed settle the rights 
 of this railroad corporation by pre- 
 scription, as their own existence is of 
 a more recent date. But it goes very 
 far, in my apprehension, toward set- 
 tling the law of the state, in regard to 
 road and bridge corporations in the 
 states conterminous with this state ; 
 and especially when corporations have 
 been created in this state, with ex- 
 press permission to unite with this 
 railroad, or any other New Hampshire 
 road at this point, should I regard it 
 as decisive of the right of the New 
 Hampshire corporation to build their 
 road to the very line of the state, if 
 they could obtain the land for that 
 purpose, without coercive measures. 
 They could not, perhaps, compel the 
 land-owners to yield them the right 
 of way, or even space to sustain the
 
 624 
 
 Private Corporations, 
 
 But it seems now settled in this country that the court may per- 
 mit tlie information to be filed in such cases where the claim is 
 only for the benefit of a private citizen.^ And as the abuse of the 
 
 western abutment of their bridge, 
 without a grant from the legislature, 
 of the prerogative power to exercise 
 the right of eminent domain over lands 
 in tliis state. 
 
 " But, having obtained the permission 
 of the land-owners, I should not re- 
 gard the bringing of their road to the 
 very limits of this state, under the 
 circumstances, as any infringement of 
 the sovereignty of the state, or as any 
 exercise of a prerogative franchise. 
 It is the settled law of England, in 
 regard to aliens even, that if they pur- 
 chase land by royal license, they may 
 hold it. And in the present case, we 
 could scarcely regard the permission 
 given the Vermont roads by their acts 
 of incorporation, or acts amendatory 
 of such acts, to unite with this or any 
 other New Hampshire roads at the 
 line of the state, at this point, as any 
 
 thing less than an implied permission 
 to the New Hampshire roads to build 
 their superstructure to the very line 
 of the state. And as this line, at this 
 point, is the ' westernmost bank of 
 the Connecticut river,' the bridge 
 must, of course, in order to bring tiie 
 rails to the line of the state, rest more 
 or less upon Vermont soil. Allowing 
 them then no prerogative right to emi- 
 nent domain in the soil, we cannot 
 regard the long practice of bridge 
 companies across the Connecticut river, 
 the actual license of the legislature, 
 and the reason of the case, as justify- 
 ing any interference with their quiet 
 possession of the lajid, for the pur- 
 pose of erecting a bridge, by permis- 
 sion of the owners of the fee of the 
 laud, or by means of obtaining the fee 
 in themselves." State of Vermont v. 
 Boston, etc., R. Co., 25 Vt. 433. 
 
 ^ In Murphy v. Farmers' Bank, 20 
 Penn.St. 415, Woodwakd,J., observes: 
 "The usurpation of an office estab- 
 lished by the constitution, under color 
 of an executive appointment, and the 
 abuse of a public franchise under color 
 of a legislative grant, are public wrongs 
 and not private injuries, and the rem- 
 edy by qu.0 'Warranto, in this court at 
 least, must be ou the suggestion of 
 the attorney-general or some author- 
 ized agent of the commonwealth. * * 
 In questions involving merely the 
 administration of corporate functions, 
 or duties which touch only individual 
 rights, such as the election of officers, 
 admission of a corporate officer or 
 member, and the like, the writ may 
 issue at the suit of the attorney-gen- 
 eral, or of any person or persons de- 
 siring to prosecute the same. What 
 is a corporation ? A franchise. And 
 Blackstone defines a franchise to be a 
 part of the royal prerogative, existing 
 in the hands of the subject. The 
 sovereignty of every state must be 
 lodged somewhere. Limited by such 
 concessions as popular violence has 
 from time to time wrung from reluct- 
 ant mouarchs, it resides, in England, 
 in the crown. In Pennsylvania, it re- 
 
 sides in the whole mass of the people, 
 and the three co-ordinate departments 
 of government are the trustees ap- 
 pointed by the people for the exercise 
 of so much of their sovereignty as 
 they have not, by the bill of rights, 
 denied them, nor by the constitution 
 of the United States yielded to the 
 general government. The legislature 
 of Pennsylvania may establish a cor- 
 poration, that is, grant out a part of 
 the sovereignty of the state, because 
 being a general trustee for the people, 
 and not forbidden, they are qualified 
 to do so. The general government 
 being a government of derivative pow- 
 ers, congress cannot establish a cor- 
 poration, because the power to do so 
 is not granted. Our legislature can, 
 because the power is not withheld. A 
 corporation then exists in Pennsylva- 
 nia by virtue of a constitutional ex- 
 ercise of the sovereign power. Its 
 existence is proof of the public will, 
 which is nothing else than the will of 
 the majority. Can one man so em- 
 ploy any of the departments of the 
 government as to tear down the fabric 
 of a majority ? 
 
 " Regarding the judiciary as one of 
 the trustees of the sovereignty of the
 
 Quo Warranto. 
 
 625 
 
 franchise is a public wrong, it has been lield that the proceedings, 
 in tlie absence of other statutory regulations on the subject, should 
 be instituted in the name of the public prosecutor or other agent 
 authorized by the supreme authority of the state, and that a pri- 
 vate citizen is not entitled to the remedy even though he be a 
 creditor of the corporation.^ 
 
 people, by which I mean the whole 
 people, how can its functions be called 
 into exercise against the existence of 
 a public institution, except upon the 
 suggestion of some agent of the whole 
 people ? If they may, if individual 
 caprice, passipn, prejudice, or interest 
 may use the judicial arm of the gov- 
 ernment to overthrow what the legis- 
 lative or executive arms have erected, 
 the sovereignty of the majority is ex- 
 tinguished, and the departments of 
 the government intended to work in 
 harmony are brought into fatal con- 
 flict. A house divided against itself 
 cannot stand, and no more can a state. 
 If quo loarranto be given to individ- 
 uals to dissolve corporations, power 
 will cease to steal from the many to 
 the few, for here will be a transfer of 
 it bodily. With a corrupt judiciary, 
 which the history of other countries 
 teaches us is not an impossible sup- 
 
 ' State V. Patterson & Hamb. Turnp. 
 Co., 1 Zabr. 9 ; Commonwealth v. 
 Farmers' Bank, 2 Grant's Cas. 393; 
 Commonwealth v. Philadelphia, etc., 
 R. Co., 20 Penn. St. 518 ; Same v. 
 Alleghany Bridge Co., id. 185; Murphy 
 V. Farmers' Bank, id. 415. 
 
 And it is said that there is no in- 
 stance in England where informations 
 have been allowed by leave of court 
 against persons, for usurping a fran- 
 chise merely private in its nature, 
 and not of a public character. High 
 on Extra. Leg. Rem., ^^ 653 ; King v. 
 Ogden, 10 B. & C. 230. See, also, 
 Gay lord v. Fort Wayne, etc., R. Co., 
 (5 Biss. 286. 
 
 On this subject Chief Justice Tilgh- 
 MAN, in Commonwealth v. Arrison, 
 15 S. & R. 127, says : " I find no in- 
 stance of an information in the nature 
 of quo loarranto in that country (Eng- 
 land), except in a case of a usurpation 
 of the king's prerogative, or of one of 
 his franchises, or where the public, or 
 at least a considerable number of 
 
 79 
 
 position, acting as the instrument of 
 private passions, any institution estab- 
 lished by the immediate representa- 
 tives of the people, and existing by 
 will and consent of the people, and 
 for their convenience and benefit, may 
 be frustrated without appeal or re- 
 course. These are general views which 
 harmonize with the doctrine of the 
 cases. And, therefore, whilst I recog- 
 nize the right of any relator to have a 
 quo warranto in the supreme court 
 who is desirous to prosecute the same 
 to redress any private grievance that 
 falls within that remedy, I deny the 
 right of any party except the attorney- 
 general, or other officer of the com- 
 monwealth, to sue for it to dissolve a 
 corporation." See, also, High on Extra. 
 Leg. Rem., § 653 ; Commonwealth v. 
 Graham, 64 Penn. St. 339 ; The People 
 V. Tibbets, 4 Cow. 358. 
 
 people, were interested. Neither do 
 I find any case in which it has been 
 denied that the court may, in its dis- 
 cretion, grant it, where an office is 
 exercised in a corporation contrary to 
 the charter. In England the number 
 of corporations is very small, indeed, 
 compared witli the United States of 
 America. Consequently the quantity 
 of that kind of business which may 
 be brought into our courts will be 
 much greater than theirs. But that 
 alone is not sufficient reason for re- 
 jecting it. We are now to decide a 
 general question on the right of the 
 court ; not on the expediency of exer- 
 cising that right, either on the present, 
 or any other case. 
 
 " Now to establish it as a principle 
 that no information can be granted in 
 cases of what the counsel call private 
 corporations might lead to very seri- 
 ous consequences. Perhaps it may be 
 said that banks, and turnpike, canal 
 and bridge companies are of a public 
 nature ; but yet they have no concern
 
 G26 
 
 Private Corporations. 
 
 And in all cases where he is authorized, a private party must 
 show tliat he is interested in the matter, before the court w^ill 
 allow him to file an information. But a corporation is regarded 
 as having such interest. Such a party may, liowever, by his acts, 
 waive his rights or forfeit his claim to the proceeding ; as where 
 he, knowing the illegality of an election, participates in proceed- 
 ings at corporate meetings, and recognizes and acquiesces in the 
 result.^ The privilege of filing an information, on the part of a 
 private prosecutor, rests in the sound discretion of the court.^ 
 
 Sec. 418. Possession and user of the usurped office, essential. — No 
 information will lie unless there is a possession or user of the 
 corporate ofiice, and a usurped possession must be shown as a 
 condition precedent to the filing of an information.^ 
 
 Sec. 419. Non-user as a ground for forfeiture. — It is held that to 
 constitute grounds for forfeiture for non-user it should be a total 
 
 with the government of the country 
 or the administration of justice. They 
 are no further public than as they 
 have to do with great numbers of 
 people. But if the number alone is 
 the criterion, it will often be difBcult 
 to distinguish public from private cor- 
 porations. Let us consider churches, 
 for example. In some the congrega- 
 tion is very small. How is the court 
 to make the line of distinction ? If 
 you say the court has the right in 
 both cases to grant or deny the infor- 
 mation, according to its opinion of 
 the expediency, there is no difficulty 
 as to the right. But if it be alleged 
 that there is a right in one case and 
 not the other, the difficulty will be 
 extreme, I strongly incline to the 
 
 opinion that in all cases where a char- 
 ter exists, and a question arises con- 
 cerning the exercise of an office 
 claimed under that charter, the court 
 may, in its discretion, grant leave to 
 file an information. Because, in all 
 such cases, although it cannot be 
 strictly said that any prerogative or 
 franchise of the commonwealth baa 
 been usurped, yet, what is much the 
 same thing, the privilege granted by 
 the commonwealth has been abused. 
 The party against whom the informa- 
 tion is prayed has no claim but from 
 the grant of the commonwealth, and 
 an unfounded claim is a usurpation, 
 under pretense of a charter of a right 
 never granted . " 
 
 ' State V. Lehre, 7 Rich. 234 ; King 
 V. Stacey, 1 T. R. 1. In England, so 
 far as relates to municipal offices, this 
 is regulated by act of parliament. 9 
 Anne, chap 20(1711). 
 
 2 Guuton V. Ingle, 4 Cranch (C. C), 
 438. 
 
 3 Queen v. Pepper, 7 Ad. & E. 745 ; 
 People V. Thompson, 16 Wend. 6o5. 
 
 It is not sufficient to allege that the 
 defendant has accepted the office 
 
 without specifying the mode of ac- 
 ceptance . High on Extra. Leg. Rem., 
 § 655. But if the party has acted in 
 the office this is sufficient. Id. See, 
 also. Queen V. Slatter, 11 Ad. & E. 505 ; 
 Queen v. Quale, id. 508 ; People v. 
 Thompson, 16 Wend. 655. 
 
 Every presumption will be made in 
 favor of long possession and use of a 
 franchise. Queen v. Archdall, 8 Ad. 
 & E. 381.
 
 Quo Waeranto. 627 
 
 non-user, and not a mere refusal to act as a corporation, or a mere 
 refusal to pay arising from insolvency.^ 
 
 Sec. 420. Destruction of the objects of the corporation as a ground of 
 forfeiture. — It is a general doctrine that whenever a corpoi-ation 
 does an act or suii'ers an act to be done which entirely destroys 
 the objects and purposes for which the corporation was instituted, 
 it is a ground of forfeiture.^ 
 
 Sec. 421. Pleadings — evidence. — It is not within the proper 
 scope of this treatise to consider thr subject of pleadings, practice 
 and evidence in their relation to proceedings in the nature of 
 quo warranto. Special treatises are devoted to these subjects, in 
 which the student may find these matters fully presented, not 
 only in so far as they relate to private corporations, but also gen- 
 erally to all proceedings of that nature. 
 
 Sec. 422. Judgment. — It may be proper, however, to briefly 
 consider the form, nature and effect of the judgment in such 
 cases where the proceedings relate to private corporations. On 
 this subject Mr. High observes : "At common law the judgment 
 upon the ancient writ of qtio warranio^ii for the respondent, was 
 that he be allowed his oflice or franchise. And in case of judg- 
 ment for the king for a usurpation of the franchise, or for its 
 mis-user or non-user, a judgment of seizure into the king's hands 
 was rendered if the franchise was of such a nature as to subsist 
 in the hands of the crown ; if not of such a nature, there was 
 merely a judgment of ouster for the purpose of dispossessing the 
 party. In case of judgment for a seizure of the franchises in the 
 king's hands, all franchises incident and subordinate thereto, and 
 held by the same grant, were also forfeited."^ 
 
 Under proceedings in the nature of quo warranto the form of 
 the judgment must depend upon the nature and character of the 
 
 ^ People V. Bank of Niagara, 6 Cow. * State v. Real Estate Bank, 5 Ark. 
 
 196 ; People v. Bank of Hudson, id. 595 ; People v. Bank of Hudson, 6 
 
 217 ; Kin^ v. Stacey, 1 T. R. 1. See, Cow. 217. See, also, pos^ chap. 20. 
 
 also, De Camp v. Alward, 53 Ind. 468 ; * High on Extra. Leg. Rem., § 745; 
 
 Importing, etc., of Ga. v. Locke, 50 3 Bl. Com. 263. 
 Ala. 332 ; Re Franklin Tel. Co., 119 
 Mass. 447.
 
 628 Private Corporations. 
 
 proceedings. In a case of €[110 wan^anto in N^ew York, Chief 
 Justice Savage observes : " Whenever individuals or a corpora- 
 tion shall be found guilty either of usurping or intruding into 
 any office or franchise, or of unlawfully holding it, judgment of 
 ouster shall be rendered, and a fine may be imposed ; but where 
 the proceeding is against a corporation, and a conviction ensues 
 for mis-user or non-user, or surrender, judgment of ouster and of 
 dissolution shall be rendered, and it is equivalent to judgment of 
 seizure at common law. If, tlierefore, tlie information in this 
 case had for its object to oust the defendants from acting as a cor- 
 poration and to test the fact of their incorporation, it should have 
 been tiled against individuals ; if the object was to effect the dis- 
 solution of a corporation which had had an actual existence, or to 
 oust such corporation of some franchise which it unlawfully 
 exercised, then the information is correctly filed against the cor- 
 poration." ^ 
 
 Sec. 423. Nothing forfeited to the state but the franchise. — Where 
 there is a proper case for a judgment of forfeiture, and such judg- 
 ment is entered, the rights and franchises of the corporation are 
 remitted to the custody of the state. But it does not follow that 
 the state is entitled to the property of the corporation. On the 
 other hand, it has been held to be error to award it to the state.** 
 And " the judgment of seizure does not of itself work a disso- 
 lution." ' 
 
 ' People V. Saratoga & Rensselaer casions a forfeiture of lands or goods, 
 
 R. Co., 15 Wend. 113. See, also, rights or credits, or, in fact, occasions 
 
 People V. Bartlett, 6 id. 422 ; Smith any other forfeiture but the franchises 
 
 V. The State, 21 Ark. 294. themselves. The consequence of a 
 
 2 State Bank v. The State, 1 Blackf. breach of the implied condition on 
 
 207. In this case, Holman, J., ob- which their liberties were granted 
 
 served : was not that they should forfeit their 
 
 "There are but two grounds on property or possessions if they abused 
 which it can be contended that the their franchises, but only that tiiey 
 corporate effects fall into the hands of should forfeit tlieir franchises. That 
 the state ; 1st, as a forfeiture for abus- which comes out of the hands of the 
 ing the franchises, or 2d, for the want king (or sovereign power) is the 
 of an owner by the dissolution of the proper subject of forfeiture ; the king, 
 corporation. When we examme the by the seizure, resuming what origin- 
 first of these grounds we find nothing ally fiowed from his bounty." 
 in the books to support the idea that ^ High on Extra. lieg. Rem. , § 577 ; 
 the abuse of corporate franchises oc- 2 Kyd on Corp. 409.
 
 Liens on Corporate Property and their Priority. 629 
 
 CHAPTEK XIX. 
 
 LIENS ON corporate PROPERTY' AND THEIR PRIORITY. 
 
 Sec. 424. Corporate mortgages and bonds secured thereby. 
 
 Sec. 425. Can the corporation by mortgage or trust deed give a lien on 
 
 property to be thereafter acquired ? 
 
 Sec. 426. What may be conveyed by mortgage. 
 
 Sec. 427. Rolling stock, character and quality of. 
 
 Sec. 428. Id. 
 
 Sec. 429. Mechanics and constructers' liens. 
 
 Sec. 430. Id. 
 
 Sec. 431. Not assignable. 
 
 Sec. 432. Priority between mortgage and mechanics' liens. 
 
 Sec. 433. Id. 
 
 Sec. 434. Id. 
 
 Sec. 435. Id. 
 
 Sec. 424. Corporate mortgages and bonds secured thereby. — The 
 statutes of various states provide that corpoi*ations, especially rail- 
 road corporations, may borrow money, and for that purpose may 
 issue bonds and execute mortgages or deeds of trust to secure the 
 same, and that said mortgages or deeds of trust may by their terms 
 include and cover not only the property owned by them and in 
 esse at the time of the execution of such mortgages or trust deeds, 
 but subsequently-acquired property. Provision is also usually 
 made by statute in reference to the recording of such instruments 
 in order to give the mortgagees, or cestui que trust, liens on such 
 property. The expedient of raising money in this way is fre- 
 quently resorted to, in order to enable railroad companies to com- 
 plete their undertakings, where their paid-up capital is not 
 adequate for the purpose. The practice of issuing preferred stock 
 in such cases amounts to about the same thing. The power in 
 either ease is liable to great abuse on the part of the managers of 
 such corporations and has led to apprehensions of the most serious 
 character.
 
 630 
 
 Private Corporations. 
 
 Mr. Redfield suggests legislative action as a means of prevent- 
 ing the evils frequently resulting therefrom.^ The right to mort- 
 gage its estate is incident to the right of a corporation to borrow 
 money, therefore, where by the charter of a corporation, or by 
 the general law, it is clothed with the power to borrow money 
 to prosecute its business, it nva.j, without any other or further 
 legislation, mortgage its lands and property as security for its 
 
 1 On this subject Mr. Eedfield ob- 
 serves : 
 
 " In this country these mortgages 
 have usually been so framed as to 
 create successive liens, in the order 
 of their being issued, as first, second, 
 and third mortgage bonds. These 
 are issued in large, general sums, 
 subdivided to suit the w^ants of pur- 
 chasers in the market, and when sold 
 at par and above, are perhaps the 
 most unobjectionable mode of com- 
 pleting an enterprise that otherwise 
 must stop in modo. But when sold, 
 as they commonly are, at reduced 
 prices, in proportion to the waning 
 fortunes of the company, they must 
 of course destroy at once the credit of 
 the stock and operate harshly upon 
 its holders. This is not the place, nor 
 are we disposed to read a homily 
 upon the wisdom of legislative grants, 
 or the moralities of moneyed specula- 
 tions in stocks or on the exchange or 
 elsewhere. But it would seem that 
 legislation upon this subject should be 
 conducted with sufficient deliberation 
 and firmness so as not to invest such 
 corporations with such unlimited 
 powers as to operate as a net to catch 
 the unwary, or as a gulf in which to 
 bury oitt of sight the most disastrous 
 results to private fortunes, which has 
 justly rendered American investments, 
 taken as a whole, a reproach, where- 
 ever the name has traveled. Expe- 
 rience will show that desperate enter- 
 prises require desperate means for 
 their accomplishment, and will always 
 find men for their management whose 
 characters will conform more or less 
 to the necessities of their position. 
 And if by legislative restrictions they 
 are precluded from the more obvious 
 devices and expedients for the relief 
 of their straightened fortunes, they 
 will only be forced to the adoption of 
 such as are more complex, less super- 
 
 ficial and consequently the more likely 
 to seduce capitalists into their invest- 
 ments. 
 
 " But even this is no apology for 
 such unrestricted powers as are often 
 given to these companies. And the 
 mode in which sucli things are here 
 carried through the legislature, by 
 means of agents who have, where 
 there are no rival interests, very much 
 their ovvn way, without even the ne- 
 cessity of subjecting their plans to any 
 permanent board of supervision, who 
 shall have such matters under control 
 and devote such time to their study, 
 as not to be misled by the devices of 
 the interested ; this mode of accom- 
 plishing such things sufficiently ex- 
 plains why, in this country, no restric- 
 tions are placed upon such companies. 
 
 "If some reliable estimate of the 
 cost of such undertakings were ob- 
 tained by means of a board of trade or 
 railway commissioners, and no work 
 allowed to go forward until a large 
 proportion, or the whole of the requi- 
 site capital, were obtained by stock 
 subscriptions, it wpuld afford great 
 security. And, if all mortgages, at 
 whatever time given, were placed 
 upon the same footing as to priority, 
 it would give far less temptation to 
 speculations in mere bubble invest- 
 ments, which is too much the case in 
 this country. But there is perhaps no 
 remedy for this incautious legislation 
 in this country but the severe and 
 hard discipline of that most painful, 
 but surest teacher, experience. It is, 
 we think, rather creditable to the pro- 
 moters of railways in this country 
 that with such unlimited powers as 
 their charters confer they have been 
 so little abused, and this in the main 
 not by design or for private ends, but 
 through inexperience and want of 
 skill." SRedf. onRaiL, §234.
 
 - Liens on Corpoeatb Pkopeety and their Priokity. 631 
 
 loans.^ So it lias been held that a power given in a charter " to 
 sell and dispose of its property clearly gives a power to mort- 
 gage/ and a power given to jnortgage, for the purpose of build- 
 ing on its lands, gives authority to mortgage for materials and 
 labor in erecting a building/ A power expressly given to a cor- 
 poration to mortgage for one purpose does not abridge its gen- 
 eral authority to mortgage for another, as for the security of its 
 creditors/ 
 
 Sec. 425. Can the corporation by mortgage or trust deed give a lien 
 on property thereafter to be acquired ?— The question whether a cor- 
 poration can execute a mortgage that will be effectual as a lien on 
 property not in esse, or on property thereafter acquired, has been 
 the subject of controversy, but it seems now well settled that 
 such liens attach under such circumstances at least under the pro- 
 visions of statutes providing for such liens. 
 
 ' Richards v. Merrimack , etc. , R. R. 
 Co., 44 N. H. 127; Susquehanna 
 Bridge, etc., Co., v. General Ins. Co., 
 3 Md. 305 ; Bardstowu, etc., li. R. 
 Co. V. Metcalfe, 4 Mete. (Ky.) 199. 
 
 2 Gordon v. Preston, 1 Watts, 385. 
 In Leggett v. The N. J. Banking Co., 
 1 N. J. Eq. 541, the charter authorized 
 the company to hold real estate neces- 
 sary for the immediate accommodation 
 of the corporation in its business, and 
 to convey the same for its use, and it 
 was held that this conferred upon the 
 corporation authority to mortgage its 
 estate for the use of the corporation, 
 and that the question as to whether it 
 was given in payment of a debt, or as 
 security, either direct or collateral, 
 was immaterial. 
 
 3 Miller v. Chance, 3 Edw. Ch, (N. 
 Y.) 399. 
 
 * Mobile, etc., R. R. Co. v. Talman, 
 15 Ala. 472 ; Allen v. Montgomery, 
 etc., R. R. Co., 11 id. 437. 
 
 ^ In Willing v. Morris Canal & Bank- 
 ing Co., 4 N J. Eq. 377, it was held 
 where by virtue of a statute passed for 
 such purposes, a mortgage of a canal 
 was executed,' in which the canal was 
 described by its extreme termini, and 
 all the accompanying works of the 
 company, such as locks, aqueducts, 
 bridges, privileges, etc., were in-, 
 eluded ; that the instrument conveyed 
 
 " A mortgage given 
 
 tJie entire canal when completed, al- 
 though a portion of it teas constructed 
 upon land acquired after tlie execution 
 of the mortgage, and was built after the 
 date of the mortgage, and that the 
 feeder of the canal passed as a part and 
 parcel thereof. Pierce v. Emery, 33 
 N. H. 484; Coe v. Pennock, 14 Ohio 
 (N. S.), 187 ; Pennock v. Coe, 23 How. 
 (U. S.) 117; Dunham v. Cincinnati, 
 etc., R. Co., 1 Wall. (U. S.) 254 ; Gal- 
 veston R. Co. V. Cowdrey, 11 id. 483 ; 
 United States v. New Orleans R. Co., 
 12 id. 362 , Railroad Co. v. Soutter. 13 
 id. 517 ; Williamson v. New Albany, 
 etc., R. Co., 1 Bisa. 198 ; Coe v. Colum- 
 bus, etc., 10 id. 372; How v. Free- 
 man, 14 Gray, 566 ; State v. Northern 
 R. Co., 18 Md. 193; Morrill v. Noyes, 
 56 Me. 458 ; Haven v. Emery, 33 N. 
 H. 66 ; Seymour v. Canada, etc., R. 
 Co., 25 Barb. 284; Stevens v. Buffalo 
 & N. Y. R. Co., 31 id. 590 ; Buffalo & 
 N. Y. R. Co. V. Lampson, 47 id. 533 ; 
 Benjamin v. Elmira R. Co., 49 id. 441 ; 
 Pbiiadelphia, etc., R. Co. v. Woelpper, 
 46 Penn. St. 369; Ludlow v. Hard, 1 
 Dis. (Ohio) 552; Coe v. McBrown, 33 
 Ind. 252 ; Pierce v. Milwaukee, etc., 
 R. Co., 24 Wis. 551 ; Jessup v. Bridge, 
 11 Iowa, 573 ; Dunham v. Isett, 15 id. 
 284. But generally mortgages do not 
 cover after-acquired property. Bath 
 V. Miller, 53 Me. 308. In "Farmers'
 
 633 Private Corporations. 
 
 on the entire property of a railway, including future receipts for 
 transportation, with an agreement that property on the roail sub- 
 sequently acquired shall be bound, and a conveyance of it be duly 
 executed, gives an equitable lien on property subsequently ac- 
 quired to the holders of the bonds secured by the mortgage." * 
 The question as to whether after-acquired property passes under 
 a mortgage by a corporation of its corporate property depends 
 entirely upon the circumstances whether the property is so Gon- 
 nected with the husiness of the corporation that it may he said to 
 he a neoessary incid.ent thereof and attached thereto. If so, it 
 is treated as passing under a mortgage of the real and personal 
 estate, otherwise not. Thus, in a Yermont case,^ a first mortgage 
 of a railroad company contained the following words as descrip- 
 tive of the property conveyed : "And all other personal property 
 belonging to said company, as the same now is in use by said 
 company, or as the same may be hereafter changed or renewed 
 by said company." It was held that these words did not embrace 
 certain machinery for " burnetizing " ties and timber so as to 
 render them more durable, it having appeared that such machinery 
 was not in existence at the time of the mortgage, and took the 
 place of nothing that was therein specified, but was constructed 
 subsequent to its execution as an experiment. 
 
 In the conveyance of property acquired subsequently to this 
 first mortgage, the following words of description were used : 
 "All the articles of personal property acquired by the company 
 since the date of the mortgage, consisting, among other things, 
 of the following, to-wit," and then followed an enumeration, by 
 name, of several engines, and by number of several difiPerent 
 
 Loan, etc., Co. v. Commercial Bank of ing to convey materials acquired sub- 
 Racine, 15 Wis. 424, it was held that sequently to its execution, does not 
 a railroad mortgage for the purpose of acquire any validity as to such mate- 
 raising money to complete the road, rials from its general nature and ob- 
 which contains no language purport- ject. 
 
 ' 2 Redf . on Rail , § 235. out the knowledge of the company or 
 
 2 Braiuerd v. Peck, 34 Vt. 496. the grantee ; and the property, upon 
 
 Where an ofBcer of a corporation the execution of the deed, becomes at 
 
 purchases property with the money once subject to any mortgage upon the 
 
 of the corporation, and takes the deed general property of the corporation. 
 
 in the name of an individual director, Buffalo, N. Y. & Erie R. R. Co. v. 
 
 the title vests in the corporation , al- Lampson, 47 Barb. 533. 
 though the transaction was done with-
 
 Liens on Corporate Property and their Priority. G33 
 
 Iviuds of cars. It was held that the general words were to be 
 construed as referring to articles of the same nature and kind as 
 those specifically named. 
 
 In a Massachusetts case,' a railroad corporation, empowered by 
 law to mortgage their franchise and property, after making a 
 mortgage of all their lands, franchises and privileges, and " all 
 the locomotive engines, cars and other articles of personal ])rop- 
 erty whatsoever, now owned or used by the corporation, or which 
 they may hereafter own or use," authorized their directors to 
 issue bonds to a large amount to pay debts contracted in building 
 and furnishing their road, and to secure such bonds by " an addi- 
 tional or second mortgage of the road, franchise and property of 
 every description, including cars and engines," subject to the first 
 mortgage, and "as full and complete" as that. Bonds were 
 issued pursuant to this authority, and a second mortgage made of 
 all the lands, franchises, etc., of the corporation, "and the prop- 
 erty and premises whatsoever mentioned, described, or referred 
 to " in the first mortgage. It was held that the second mortgage, 
 as against a subsequent attachment, conveyed engines and cars 
 acquired by the corporation after the first and before the second 
 mortgage. 
 
 In a later case in the same state,* the directors of a railroad 
 corporation, authorized by vote of its stockholders " to execute a 
 mortgage of the road with all its franchises," made a mortgage 
 which recited this vote and in terms conveyed their road, houses, 
 lands and superstructure, and all their locomotives, cars, tools and 
 implements, " with all improvements made upon such property, 
 and all additions thereto, by adding new locomotives, cars and 
 other things ; " and the legislature afterward ratified and con- 
 firmed their " proceedings, whereby they conveyed, agreeably to 
 the vote of the stockholders, their railroad and property in mort- 
 gage." It was held that cars subsequently purchased by the cor- 
 poration were included in the mortgage, although the mortgagees 
 had not taken possession for foreclosure. 
 
 In a Wisconsin case,' a mortgage was executed of a " railroad 
 
 ' Hensbaw v. Bellows Falls Bank, ' Farmers' Loan, etc., Co. v. Com- 
 10 Gray, 568. mercial Bank, 11 Wis. 207. 
 
 ^ Howe V. Freeman 14 Gray, 566. 
 
 80
 
 634 Pkivate Cokporations. 
 
 witli its superstructure, track and all other appui-teiiances made 
 or to he made, together with its furniture, m.aterials and every 
 other kind of 'personal jprojperty which should he used for ope- 
 rating said road / and it was held that property thereafter ac- 
 quired by the couipany did not pass by the niortga<^e, excejjt so 
 far as it should heconie appurtenant to, or he used in operating 
 the road, and therefore that chairs subsequently acquired, but 
 never used, did not pass under the mortgage. A similar rule was 
 adopted in Maine,^ and in a case where a railroad corporation by 
 virtue of a special act of the legislature mortgaged not only all 
 the property then owned by both the new and old portions of the 
 road, but " all the property of said extension subsequently to be 
 acquired," it w^as held that wood subsequently purchased with the 
 earnings and for the use of the whole road would not pass by said 
 mortgage, and was attachable. 
 
 These cases illustrate the doctrine stated sufficiently, and no 
 difiiculty, with the rule stated in view, will be experienced in de- 
 termining, in a given case, whether after-acquired property is cov- 
 ered by a mortgage or not. 
 
 Sec. 42G. What may be conveyed by mortgage. — It was formerly 
 a mooted question whether, in the absence of statutory provisions 
 expressly authorizing it, a corporation could assign or convey by 
 mortgage or otherwise its franchises.^ But it is now a common 
 provision of the statutes that franchises, as well as all other kinds 
 of property and interests, may be mortgaged by railroad corpora- 
 tions, and in such cases at least the franchises may be conveyed by 
 mortgage as security.' And, independent of any statutory pro- 
 vision, there can be no doubt that a mortgage of all the cor- 
 porate property, under competent authority, carries xoith it, as a 
 necessary incident, all its franchises so far as necessary to make 
 
 1 City of Bath v. Miller. 53 Me. 308. N W. R. Co., 4 De G., M. & G. 115 ; 
 
 2 2 Kedf. on Rail., ^235, 12, note 22 ; Troy, etc, R. Co. v. Kerr. 11 Barb. 
 Wheelock v. Moulton, 15 Vt. 519; 581; State v. Rives. 3 Ired. 297 ; Coe 
 Isham V. Benuino:ton Iron Co., 19 id. v. McBrown, 22 Ind. 252; Pennock v. 
 230; Winch v Railway Co., 5 De G. Coe, 23 How. (U S ) 117. 
 
 & S. 562 ; S. C, 13 E. L. & E. 506 , ^ First Mort. Bondholders v. Mays- 
 
 S. Y. R. Co. V. Great N. R. Co., 3 ville & L. R. Co., 9 Am. L. Times, No. 
 
 De G., M. & G. 576 ; S. C. , 19 E. L. & 31 ; cited 2 Redf. on Rail., i^ 235. 14, 
 
 E. 513; Beman v. Rufford, 1 Sim. note 26. See, also, Pierce v. Emory, 
 
 (N. S.) 550; S. C. 6 Eng. L. & Eq. 32 N. H 484, Phillips v. Winslow, 18 
 
 106; The S. & B. R. Co. v. The L. & B. Monr. 430.
 
 Liens on Corpokate Pkopkety and tiieik Priority. G35 
 
 tlie property available / ^ as, in the language of the court in the 
 case first cited in tlie last note, " an authority to mortgage a rail- 
 road and its property must design a transfer of the right to ope- 
 rate the road," as otlierwise tlie property would be unavailable 
 and useless in the hands of the mortgagees, and when it came 
 into their possession they would find that the security they had 
 obtained for their money was a myth. The law does not con- 
 template any such result, and the courts would not for a moment 
 give countenance, upon any technical grounds, to any such device 
 for cheating hona fide creditors under the mortgage. Strictly 
 speaking, at the common law, a railroad or other corporation has 
 no authority to mortgage its franchises ; " and in one case"' it has 
 been held that authority conferred by the charter of a corpora- 
 tion to mortgage " its road, income and other ptroperty^^ does not 
 authorize a mortgage of its franchise. In another case in the 
 United States circuit court arising in New Hampshire,* the court 
 say : "Among the franchises of a corporation is that of being a 
 body politic, with rights of succession of members, and of acquir- 
 ing, holding and conveying property, and suing and being sued 
 by a certain name. Such an artificial being only the law can cre- 
 ate, and when created it cannot transfer its own existence into 
 another body, nor can it enable natural persons to act in its name, 
 save as its agents, or as members of the corporation, acting in 
 conformity with the modes required or allowed by its charter. 
 
 ' Bardstown, etc., R. R. Co. v. Met- and for the public benefit, either in 
 
 calfe, 4 Mete. 199. In Eldridge v. tlieir own or any otlier name ; and 
 
 Smith, 34 Vt. 484, it was held that a consequently that when the mort- 
 
 mortgage by a railroad company of its gagees take possession of the road 
 
 road and francliises as security for a under their mortgage, the personal 
 
 debt does not convey its corporate ex- property then left thereon cannot be 
 
 istence or its general corporate pow- taken by a creditor of the corporation 
 
 ers, but only the franchise necessary upon a judgment against the corpora- 
 
 to make the conveyance beneficial to tion. 
 
 the grantees, and to maintain and - Comm. v. Smith, 10 Allen, 448. In 
 
 manage the railroad and receive the Steiner's Appeal, 27 Penn. St. 313, a 
 
 profits thereof for their own benefit, canal company was held not to have 
 
 This doctrine was also adopted in an authority without the consent of the 
 
 Illinois case, Palmer v. Forbes, 23 legislature to mortgage either its tolls 
 
 111. 300, where it was held that the or such real estate as is necessary for 
 
 mortgage of a railroad company under the enjoyment of its franchises, 
 
 legislative authority necessarily car- ^ Pullam v. Cincinnati, etc., R. R. 
 
 ries with it authority, on the part of Co., 4 Biss. 35. 
 
 the trustees, to exercise the franchise ** Hall v. Sullivan R. R. Co., 11 Law 
 
 of the road to satisfy the mortgage Reporter (N. S.), 138.
 
 636 Private Corpobations. 
 
 The franchise to be a corporation is, therefore, not a subject of 
 sale and transfer, unless the law by some positive provision has 
 made it so, and pointed out the modes in which such sale and 
 transfer may be effected. But the franchise to build, own and 
 manage a railroad, and to take tolls thereon, are not necessarily 
 corporate rights ; they are capable of existing in and being en- 
 joyed by natural persons, and there is nothing in their nature 
 inconsistent with their being assignable. Whether when they 
 have been granted to a corporation created for the purpose of 
 holding and using them, they may legally be mortgaged by such 
 corporation, in order to obtain means to carry out the purpose of 
 its existence, must depend upon the terms xcpon which they are 
 granted / or, in the absence of any thing special in the grant 
 itself, upon the intention of the legislature to he deduced from the 
 general purposes it had in view, the means it intended to have 
 employed to execute those purposes, and the course of legislation 
 on the same or similar subjects i or, as it is sometimes compendi- 
 ously exj^ressed, upon the public policy of the state." 
 
 This seems to us to embody the true rule in relation to this 
 question, to-wit, that the question whether or not under authority 
 conferred by statute upon a corporation to mortgage its prop- 
 erty authority to mortgage its franchises is conferred depends 
 upon the evident intention of the legislature to be gathered from 
 the lano-uao-e of the statute, and the nature and character of the 
 cor23orate property and pui-poses, and that such a right may be 
 implied, where, under such rule, such was the intention of the 
 legislature. In Jesup v. Bridge, Lowe, C. J., observes : "As a 
 matter of fact, it is well known that railroads are built with capi- 
 tal. To obtain this, companies are compelled to conform to the 
 laws and customs which regulate its use. They are de- 
 pendent, in a great measure, upon the negotiation of their 
 bonds for the means, carrying forward their enterprises. These 
 bonds can only be negotiated by indemnifying, as best they 
 can, the creditors for the principal debt, and secure the pe- 
 riodical payment of the accruing interest. For this purpose 
 and as a means to an end, it becomes essential frequently 
 for the company to mortgage all its property and franchises, and
 
 Liens on Cokporate Pkopekty and their Priority. G37 
 
 even the future earnings after paying the necessary operating ex- 
 penses." ' 
 
 Sec. 427. Rolling stock — character and quality of. — It may be 
 appropriate to notice the controversy which has occurred in refer- 
 ence to tlie character and nature of that property, necessary to 
 the operation of raih-oads, and usually denominated " rolling 
 stock." This term embraces all the carnages, cars, engines and 
 other vehicles, that move on wlieels on railroad tracks. Is such 
 property personal or real ? Does it pass by a conveyance of the 
 real estate ? May it be sold and transferred as real property ? Do 
 the recording laws relating to real, or personal property, apply to 
 it ? Various decisions have been given in tlie various states on 
 these questions. It has been, in many cases, both in the federal 
 and state courts, a perplexing question, and of great interest to 
 parties ; and their remedy frequently turns upon the solution of 
 it. The legislation of many of the states has settled the question 
 and determined its character in this respect by statutory provisions.* 
 But in others it is an open one, and the subject of controversy. 
 In JSTew Hampshire, in the absence of any statutory provisions 
 on the subject, it has been held not to be a fixture or belong to 
 the real estate ; and this seems to be the doctrine in Massachusetts, 
 Maryland, Wisconsin and Missouri.^ But a contrary or some- 
 
 ' 11 Iowa, 573. In Vermont, also, there is a statutory 
 
 2 Rolling stock is made personal regulation on the subject. Vt. Gen. 
 
 property by a constitutional provision Stat. (I860) 237. §§ 101, 102 ; Miller v. 
 
 in Illinois. See Const. 111., art. 11, j^ Rutland, etc., R. Co., 36 Vt. 4.02. 
 
 10. The statutes of Neb. (1873) 197, ^ Boston, etc., R. Co. v. Gilmore, 37 
 
 provide, that " any mortgage or deed N. H. 410; Pierce v. Emory, 32 id. 485; 
 
 of trust made upon the lands, roads, Howe v. Freeman, 14 Gray, 5G6 ; Mc- 
 
 or other property of any railroad com- Kim v. Mason, 3 Md. Ch. 201 ; Wells 
 
 pany, shall Ijind all the property men- & Miller v. Canton Co., 3 Md. 231; 
 
 tioned in such deed or mortgage, in- Denraead v. Bank of Bait., 9 id. 179 ; 
 
 eluding rolling stock, and that to Coe v. Columbus Piqua, etc., R. Co., 10 
 
 secure the rights of mortgages and Ohio St. 372 ; Ludlow v. Hurd, 1 Dis. 
 
 parlies interested under deeds of trust, (O.) 552 ; Pacific R. Co. v. Cass Co., 53 
 
 the rolling stock, personal property Mo. 17 ; Hill v. Lacrosse, etc., R. Co., 16 
 
 and material necessary for operating Wis. 214. 
 
 the road, belonging to the road and As to the construction of the pres- 
 
 appertaining thereto, shall be deemed ent statutes of Wisconsin ou this ques- 
 
 a part of the road, and said mortgages tion, see Chicago, etc., R. Co. v. 
 
 and deeds, when recorded, shall have Borough of Fort Howard, 21 Wis. 
 
 the same eifect both as to notice and 44. 
 otherwise, as to the real estate con- 
 veyed by them."
 
 038 Pkivate Corporations. 
 
 what qualified doctrine lias been adopted in various other 
 states.^ In a recent case in New York, Commissioner Johnson, 
 in reviewing the decisions on this question in that state, observes : 
 " The first question necessarily to be decided in this case is, 
 whether the rolling stock of a railroad is personal property, or 
 whether it is to be, deemed constructively annexed to the road 
 upon which it runs, so as in law to be I'egarded as a part of the 
 realty. If it be determined that rolling stock retains its charac- 
 ter of personal pro]3erty, then the question arises whether a mort- 
 gage of a railroad and its equipment needs to be filed imder the 
 statute of 1833, requiring mortgages of personal property to be 
 filed when the possession of the property is not innnediately deliv- 
 ered to the mortgagee.'^ * * * "pj^g questions thus presented 
 are not authoritatively determined in this state. The opinion of 
 the supreme court has been given in four reported cases. The 
 earliest was that of The Farineri Loan <& Trust Co. v, Hendrick- 
 son, 25 Barb. 484, in which the judgment rendered in October, 
 1857, by Justices S. B. Strong, Bibdseye, and Davies, declared 
 that as between the mortgagees and judgment creditors, the rolling 
 stock was to be deemed fixtures, and, consequently, that such a 
 mortgage did not need to be filed under the act of 1833. In 
 this case the mortgage specified engines, tenders, cars, etc., as a 
 part of the property mortgaged, and the rights of the plaintiffs 
 might have been sustained by holding either that the chattel 
 mortgage law did not apply to raih^oad mortgages, or that the 
 engine and cars were fixtures. The court rejected the former 
 ground, and placed the decision on the position that the rolling 
 stock was part of the realty.^ * * ■sf Looking now at the 
 
 ■ ' Covey V. Pittsburg, etc., R. Co., 8 poses of taxation. Louisville, etc., R. 
 
 Phila. 173 ; Ammant v. New Alexan- Co. v. State, 25 Ind. 177. 
 
 dria, etc., R. Co., 13 S. & R. 210; ^ Laws 1833, chap. 279, p. 403. 
 
 Applegate v. Eruest, 3 Busli, 649; ^ The learned judge proceeds to 
 
 Winchester T. Co. v. Viuionnt, 5 B. refer to numerous cases in that state, 
 
 Mour. 2 ; Palmer v. Forbes, 23 111. 301 ; viz.; Beardsley v. Ontario Bank, 31 
 
 Hunt V. Bullock, id. 320 ; Titus v. Barb. 619 ; Hoyle v. Plattsburgh, etc, 
 
 Mabee, 25 id. 257 ; Titus v.Ginheimer, Co. (same as now under con.sidera- 
 
 27 id. 462. But these decisions in tion), 51 Barb. 45 ; Murdock v. Cilif- 
 
 Illinois were, before the constitution ford, 18 N. Y. 30 ; Mott v. Palmer, 1 
 
 was adopted fixing the character of id 564 : Leroy v. Piatt, 4 Paige, 
 
 rolling stock as personal property, 77 ; as well as Pierce v. Emory, 32 N. 
 
 alone referred to. In Indiana rolling H. 484 ; and Pennock v. Coe, 23 How. 
 
 stock ia treated as realty for the pur- (U. S.) 117.
 
 '' Liens on Couporate Pkopkrty and their Priority. G39 
 
 rolling stock of a railroad, it is originally personal in its charac- 
 ter, it is subservient to a mere personal trade, the transportation 
 of freight and passengers. The track exists for the use of the 
 cars rather than the cars for the use of the track. There is no 
 annexation, no immobility from weight, there is no localization in 
 use. The only element on which an argument can be based to 
 support the character of realty is adaptation to use, with and 
 upon the track. Even in respect to this, were the same contri- 
 vances adopted by a tenant for the use in his trade upon leased 
 lands, his right to remove both cars and track would be beyond 
 question. It is j)erhaps fortunate that this question was not 
 finally adjudicated in the early days of railroad enterprise, for 
 then unity of ownership in track and cars and independence of 
 roads of each other seemed to render it possible to consider roll- 
 ing stock part of the realty without introducing great inconven- 
 ience. At the present time independent companies exist owning 
 no tracks, whose trains run through state after state on the rail- 
 road track of other companies. It is no uncommon sight to see 
 the cars of half a dozen companies formed into a single train and 
 running from New York to Illinois and Missouri. It is impos- 
 sible to deal with such property as a part of the realty without 
 introducing anomalies and uncertainties of the gravest char- 
 acter." ^ 
 
 Sec. 428. The opinions of the supreme court of the United 
 States have left this question in a state of uncertainty." In Min- 
 nesota Company v. St. Paul Company,^ Nelson, J., says : " We 
 
 ' Hoyle V. Pittsburg, etc., R. Co., 54 484, bad held that tlie rolling .stock of a 
 
 N. Y. 314. See, also, Benjamin v. railway was accessory to real estate, 
 
 Elmira, etc., R. Co., id. 675. and would pass by a deed of mortgage 
 
 - See Farmers' Loan, etc., Co. v. St. of the railway, and that such a mort- 
 
 Joseph, etc., R. Co. (U. S.C.C. Kansas, gage need not be filed as a chattel 
 
 June Term, 1875, not reported.) mortgage, under the recording laws of 
 
 » 3 Wall. 609. See.also, Railroad Co. the state. In this case Mr. Justice 
 
 V. James, 6 Wall. 750. But see, also, Strong observed : 
 
 PuUan V. Cincinnati, etc., R. Co. ,4 "The property of a railroad com- 
 
 Biss. 35 ; Galveston R. Co. v. Cowdrey, pany consists mainly of the road-bed, 
 
 11 Wall. 450; United States v. New the rails upon it, the depot erections 
 
 Orleans, etc., R. Co., 12 id. 363. and the rolling stock, and the fran- 
 
 Previous to the decision of the court chise to hold and use them. The road- 
 
 of appeals of New York, iu Hoyle v. bed, tlie rails fastened to it, and the 
 
 Plattsburgh, etc., R. Co., supra, the buildings at the depots are clearly real 
 
 supreme court of that state, in the property. That the locomotives and 
 
 case of The Farmers' Loan and Trust passenger, baggage and freight cars 
 
 Company v. Hendricksou, 35 Barb, are a part and a necessary part of the
 
 640 
 
 Private Corpokations. 
 
 agree that the rolHng stock upon this road is covered by the sev- 
 eral mortgages, and as respects any other valid liens upon the 
 
 entire establishment there can be no 
 doubt. Are they so permanently and 
 inseparably connected with the more 
 substantial realty as to become con- 
 structively fixtures '? 
 
 " Railways being a modern inven- 
 tion and of a novel character, we have 
 no decisions upon this question, and 
 those relating to and governing old 
 and familiar subjects do not absolutely 
 control us, although we must neces- 
 sarily resort to them as guides. J udge 
 Weston well remarks, in Farrar v. 
 Stockpole, 6 Greenl. 157, that modern 
 times have been fruitful of inventions 
 and improvements for the more secure 
 and comfortable use of buildings, as 
 well as of many other things which 
 administer to the enjoyment of life. 
 Venetian blinds, which admit the air 
 and exclude the sun, whenever it is 
 desirable so to do, are of modern use ; 
 so are lightning rods, which have 
 now become common in this country 
 and in Europe. Those might be re- 
 moved from buildings without dam- 
 age ; yet, as suited and adapted to the 
 buildings upon which they are placed, 
 and as incident thereto, they are 
 doubtless part of the inheritance, and 
 would pass by a deed as appertaining 
 thereto. The general principles of 
 the law must be applied to new kinds 
 of property, as they spring into exist- 
 ence in the progress of society, accord- 
 ing to their nature and incidents, and 
 the common sense of the community. 
 It may be that if an appeal should 
 be made to the common sense of 
 the community, the term ' fixtures ' 
 could not well be applied to such 
 movable carriages as railway cars. 
 But such cars move no more rapidly 
 than do pigeons from a dovecote, or 
 fish in a pond, both of which are 
 annexed to the realty. Judge COWEN 
 admits, in Walker v. Sherman, that 
 a machine, movable in itself, may 
 become a fixture, from being connected 
 in its operations by boards, or in any 
 other way, with the permanent ma- 
 chinery. It results from many cases 
 that it is not absolutely necessary that 
 things should be stationary in any one 
 place or position, in order that they 
 should be technically deemed fixtures. 
 
 The movable quality of these cars has 
 frequently, if not generally, induced 
 the opinion that they are personal 
 property. Hence, railway mortgages 
 of rolling slock have, as 1 understand, 
 been generally filed in the offices of 
 the clerks of all the towns through 
 which the roads pass. That was un- 
 doubtedly the more prudent course, 
 as it saved any question as to the char- 
 acter of the property. Even the 
 learned counsel has gone no further 
 than to denominate the cars ' quasi ' 
 fixtures. Public opinion, however, 
 although respectable in matters of 
 fact, is an unsafe guide as to legal dis- 
 tinctions. 
 
 " That railway cars are a necessary 
 part of the entire establishment, with- 
 out which it would be inoperative and 
 valueless, there can, of course, be no 
 doubt. Their wheels are fitted to the 
 rails, they are constantly upon the 
 rails, and except in cases of accidents, 
 or when taken off for repairs, nowhere 
 else ; they are not moved off the land 
 belonging to the company. [This 
 claim is not justified by the facts in 
 modern times. See opinion of JoiiN- 
 SON, J., in Hoyle v. Plattsburgh, etc., 
 R. Co., sup7-a.] They are peculiarly 
 adapted to the lase of the railway, and 
 in fact cannot be applied to any other 
 purpose, they are not like farming 
 utensils, and possibly the machinery 
 in factories and many of the movable 
 appliances in stores and dwellings, the 
 object of general trade; they are per- 
 manently used on the particular road 
 where they are employed, and are sel- 
 dom, if ever, changed to any other. 
 Many of these are strong characteris- 
 tics of the realty ; some of them have 
 often been deemed conclusive. * * * 
 If railroad cars were used in any other 
 place than upon the lands belonging 
 to the company, or for any other pur- 
 pose than in the execution of its busi- 
 ness, or were constructed in such shape 
 and so extensively as to become ob- 
 jects of general trade, or were not a 
 necessary part of the entire establish- 
 ment, I might consider myself as com- 
 pelled by the weight of authority to 
 decide, that as they are not physically 
 annexed to what is usually denomi-
 
 Liens on Corporate Property and their Priority. 041 
 
 same, is inseparably connected with the road ; in other words, is 
 in technical language a lixture of the road, so far as in its nature 
 and use it can be called a lixture." 
 
 Sec. 429. Mechanics' and constructors' liens. — It has been a com- 
 mon provision of the statutes of many if not ijiost the states that 
 mechanics, laborers and the furnisher of materials might secure 
 a hen upon the building, erection or improvement upon which 
 the labor was bestowed or for which the material was furnished, 
 and the land on which the erection or improvement is located, for 
 the labor done or material furnished upon complying with certain 
 provisions of the statute in relation thereto. 
 
 Sec. 430. The legislature of various states have extended 
 these liens, and by express provisions of statutes, they embrace 
 the w^ork and labor done, and material furnished on or about any 
 work of internal improvement, including the construction of rail- 
 roads, and give to the laborer or furnisher of material on such 
 works the same remedy formerly limited to buildings and other 
 improvements of private individuals. The general principles 
 and doctrines of the courts in the interpretation of such statutes 
 and their application, relating to natural persons, would be equally 
 applicable to corporations. These must necessarily depend upon 
 
 nated real estate, they must be deemed mortgage, if it should be deemed 
 
 personal property ; but as each and all personal property, and few, if any, 
 
 of these characteristics or incidents would be willing to loan their money 
 
 are wanting, the considerations which upon such an uncertainty, but it would 
 
 I have mentioned, or to which I have be otherwise if the additions should 
 
 alluded, leading to an opposite conclu- be considered as made to the real 
 
 sion, require us to determine that they estate." See, also, same doctrine in 
 
 are included as fixtures or necessary Palmer v. Forbes, 23 111. 300; Hunt v. 
 
 incidents in a conveyance of real estate. Bullock, id. 320; Pennock v. Coe, 28 
 
 In thus deciding we shall unquestion- How. 117. 
 
 ably carry out the intention of the The reasoning of the learned judge 
 
 parties, as it could not have been the in this case is ba.sed upon certain 
 
 design of such parties — certainly not facts. But the facts themselves can- 
 
 of the mortgagees — that the security not be assumed to be correct, as shown 
 
 should be diminished by the wear by the court in the subsequent case in 
 
 and tear of the machinery, and the the court of appeals in the same state, 
 
 inevitable accidents to which it is sub- See Hoyle v. Plattsburgh, etc., R. Co., 
 
 jected. Possibly the substituted ma- supra. 
 chiuery might not be included in the 
 
 81
 
 (542 
 
 Private Corporations. 
 
 the language and provisions of the statutes, and hence no general 
 rules can be laid down as applicable to cases generally.' 
 
 Sec. 431. Not assignable. — A carrier's lien, like all other liens 
 arising by operation of law, applies only to the goods trans- 
 ported, and is not assignable unless made so by a well-established 
 usage, or by statute. The right is a personal one, and does not 
 pass by an assignment or a sale or pledge of the goods, and cannot 
 be set up by any other person as against the true owners.' 
 
 SeO. 432. Priority between mortgage and mechanics' liens. — Contro- 
 versies have recently arisen between mortgagees and the labor- 
 ers, contractors and builders of railroads, in reference to the pri- 
 ority of their respective liens. The question must depend upon 
 the language and construction of the provisions of the statutes in 
 reference to such liens. 
 
 ' A provision of statute of Iowa will, 
 perhaps, indicate the general scope 
 and purpose of such statutes. It is 
 as follows : " Every mechanic, or other 
 person who shall do any labor upon 
 or furnish any materials, machinery 
 or fixtures for any building, erection 
 or other improvement upon land, in- 
 cluding those engaged in the construc- 
 tion or repair of any work of internal 
 improvement by virtue of any contract 
 with the owner, his agent, trustee, 
 contractor or sub-contractor, upon com- 
 plying with the provisions of this 
 chapter, shall have for his labor done 
 or materials, machinery or fixtures 
 furnished, a lien upon such building, 
 erection or improvement, and upon 
 the land belonging to such owner on 
 which the same is situated, to secure 
 the payment of such labor done or 
 materials, machinery or fixtures fur- 
 nished." Iowa Code (187^^ chap, 14, 
 § 2130. 
 
 It is provided by other sections for 
 the filing of such liens with the clerk 
 of the district court of the county, and 
 giving notice of the same. It is 
 further provided in reference to the 
 priority of such liens as follows: 
 
 " The liens for labor done or things 
 
 furnished shall have priority in the 
 order of the filing of the accounts 
 thereof as aforesaid, and shall be pre- 
 ferred to all other liens and incum- 
 brances which may be attached to or 
 upon such buildings, erection or other 
 improvement, and to the land on 
 which the same is situated, or either 
 of them, made subsequent to the com- 
 mencement of said building, erection 
 or other improvement." Id., i^ 2139. 
 
 "The lien for the thing aforesaid, 
 or work, shall attach to the buildings, 
 erections or improvements for which 
 they were furnished or done, in prefer- 
 ence to any prior lien or incumbrance, 
 or mortgage, upon the land upon 
 which the same is erected or put, and 
 any person enforcing such lien may 
 have such buildings, erections or 
 other improvements for which they 
 were furnished or done in preference 
 to any prior lien, or incumbrance, or 
 mortgage upon the land upon which 
 the same is erected or put, and any 
 person enforcing such lien may have 
 such building, erection or other im- 
 jirovement sold under execution, and 
 the purchaser may remove the same 
 within a reasonable time thereafter," 
 Id.,§ 2141. 
 
 ' Everett v. Saltus, 15 Wend. 474 ; Ames v. Palmer, 42 Me. 197.
 
 Liens on Corporate Property and their Priority. 643 
 
 Sec. 433. The statutes of Iowa ])n:)vide in reference to railroad 
 mortgages and trust deeds, that " said mortgages or deeds of trust 
 may, by their terms, inchide and cover not only the property of 
 the corporation making them at the time of their date, but ])rop- 
 erty, both real and personal, which may thereafter be acquired, 
 and shall be as valid and eftectual for that purpose as if the 
 property were in possession at the time of the execution thereof." 
 And in reference to the liens of parties " who shall do any hibor 
 or furnish any materials, machinery or fixtures for any building, 
 erection or other improvement u])on land, including those 
 engaged in the construction or repair of any work of internal 
 improvement," that " the lien for the things aforesaid, or work, 
 shall attach to the building, erections or improvements for which 
 they were furnished or done, in preference to any prior lien or 
 incumbrance or mortgage upon the land upon which the same is 
 erected or put, and any person enforcing such lien may have such 
 building, erection or other improvement sold under execution, 
 and the purchaser may remove the same within a reas6nable time 
 thereafter;" that " the liens for labor done or things furnished 
 shall have priority in the order of the filing of the accounts 
 thereof as aforesaid, and shall be preferred to all other liens and 
 incumbrances which may be attached to or upon such building, 
 erection or other improvement, and to the land on which the 
 same is situated, or either of them, made subsequent to the com- 
 mencement of said building, erection or other improvement." 
 Under these provisions it has been held that the mechanic's, labor- 
 er's or furnisher's lien, dates from the commencement of the struc- 
 ture, and is paramount to a mortgage executed after the com- 
 mencement of the same, though before the particular work was 
 done or materials furnished for which the lien is claimed.^ 
 
 I Iowa Code (1873), §§ 3131, 2133- utes of Iowa. The intervenors alleged 
 
 2139, 2140, 3141 ; Nelson et al. v. The that they were the holders of bouils of 
 
 Iowa Eastern R. Co., defendant and the company secured by a mortgage 
 
 others, intervenors. West Jur., V. 10, upon the road, and entitled to priority 
 
 No.l0.i).604 (to be reported in 44 Iowa), by virtue of such mortgage over the 
 
 In thia case Nelson and others lien of the plaintiffs. The court gave 
 
 claimed of the railroad company $3,- judgment for the claim against the 
 
 180.83 on account of ties furnished the company subject to the lien of the in- 
 
 company for the construction of its tervenors. On appeal to the supreme 
 
 road, and asked that a lien therefor court of that state, Adams, J., deliver- 
 
 inight be established under the stat- lug the opinion, observed as follows :
 
 644 
 
 Private Cokporations. 
 
 Sec. 434. The same doctrine was held in construing a similar 
 statute in Montana, which provided : " The liens for work and 
 labor done or things furnished, as specified in this act, shall have 
 
 " It is claimed by tlie plaintiffs that 
 the intervenors' mortgage was exe- 
 cuted after the commencement of the 
 improvement. It is claimed by the 
 intervenors that it was executed be- 
 fore. The fact is, the mortgage was 
 executed after the road was com- 
 menced, but before the ties were fur- 
 nished. We have only to determine 
 then what is the ' improvement' with- 
 in the meaning of the statute. If it 
 is the road, the mechanics' lien has 
 priority. If it is the ties, the mort- 
 gage has priority. * * * * 
 The idea that the mechanics' lien 
 attaches only from the commencement 
 of the particular work is wrought out 
 through the supposition that the word 
 ' improvements,' as used in the stat- 
 ute, denotes the several distinct and 
 successive jobs of work performed by 
 the different mechanics. But this con- 
 struction is precluded by the use of 
 the word ' other ' before ' improve- 
 ments.' The lien is to attach from 
 the commencement of ' the building, 
 erection or other improvements.' The 
 statute implies that a building is an 
 improvement and that there may be 
 others still. We understand by ' other 
 improvements,' the results of mechan- 
 ical labor or materials fu'-uislied other 
 than buildings or erections upon real 
 estate. But suppose ' other improve- 
 ments ' to mean the different parts of 
 a building. It follows that a building 
 is one improvement, its walls another, 
 and its doors a third. But the walls 
 of a building are not other than the 
 building. The words ' other improve- 
 ment,' as used in the statute, cannot 
 properly mean either buildings, erec- 
 tions or constituent parts thereof. 
 
 " Besides a constituent part of a 
 thing is not an improvement of a thing, 
 in any proper sense of the word. How 
 can we say that the walls of a house 
 are an improvement of the house ? 
 The house could have no antecedent 
 existence. Ties and rails are not an 
 improvement of a railroad for the 
 same reason. Yet whatever is an im- 
 provement is an improvement of some- 
 thing. A house is an improvement of 
 the premises on which it ia situated. 
 
 A railroad is an improvement of the 
 country which is benefited thereby. 
 That which enters into the original 
 construction of a liouse or railroad is 
 a part of an improvement and nothing 
 more. * * * But it is said that it 
 would be unjust to the mortgagee who 
 has taken a mortgage upon a partially 
 constructed building, erection or other 
 improvement, to make his mortgage 
 subject to mechanics' liens for work 
 subsequently commenced. It is argued 
 that the mechanic may always know 
 what incumbrances rest upon the 
 property by mortgage, but that the 
 mortgagee cannot know what incum- 
 brances may come to rest upon the 
 property by mechanics' liens. To this, 
 it may be said that where a person 
 takes a mortgage ujjon a partially con- 
 structed building, erection, or other 
 improvement, the possibility of me- 
 chanics' liens attaching upon the prop- 
 erty is distinctly foreshadowed by 
 the condition of the property. It is 
 true, the mortgagee cannot know the 
 amount. He cannot know, indeed, 
 at the time the mortgage is executed, 
 whether the building, erection, or 
 other improvement, will be com- 
 pleted by the mortgagor. But we 
 think that the mortgagee may prop- 
 erly be required to rely upon the 
 good faith and prudence of the person 
 whom he elects to make his mort- 
 gagor. Furthermore, the increased 
 value of the security may be presumed 
 to be somewhat in proportion to the 
 expense incurred upon the property. 
 Without denying that the statute, as 
 we construe it, may sometimes work 
 a hardship, the danger to be appre- 
 hended is not such as to exert much 
 influence in the construction of the 
 statute, the language employed being 
 almost, if not entirely, free from am- 
 biguity. Another objection urged 
 against this construction of the stat- 
 ute is, that it may be impracticable 
 oftentimes for the mortgagee to de- 
 termine whether a building, erection, 
 or other improvenaent, has or has not 
 been commenced upon the premises. 
 It has been askt^d in argument, 
 whether a mortgagee o f a rail road shaU
 
 Liens on Cokporate Property and their Priority. 045 
 
 priority in the order of filing the accounts thereof, as aforesaid, 
 and shall be prior to all other liens and incumbrances which may 
 be attached to or upon the building, erection or other improve- 
 ment, and to the land upon "vvhich the same is situated, to the 
 extent aforesaid, or either of them, made subsequent to the com- 
 mencement of said building, erection or other improvement." 
 
 In construing this statute the supreme court of the United States 
 (per Bradley, J.) observe : " The liens secured to the mechanics 
 and material men have ])recedence over all other incumbrances put 
 upon the property after the commencement of the building. And 
 this is just. Why should a purchaser or lender have the benelit 
 of the labor or materials which go into the property and give it 
 its existence and value ? At all events, the law is clear." ' The 
 
 take notice that tlie construction of 
 the road has been commenced if only 
 a shovelful of dirt has been thrown. 
 "This objection, whether great or 
 small, applies equally to the construc- 
 tion contended for by the intervenors. 
 If the statute should not be construed 
 as requiring notice to be taken of the 
 commencement of a railroad, because 
 that may consist in the throwing of a 
 shovelful of dirt, it should not, for 
 the same reason, be understood as re- 
 quiring that notice should be taken of 
 the commencement of any particular 
 job of work upon the railroad, for that, 
 too, must be equally small. It is 
 further objected, that abuilding, erec- 
 tion, or other improvement, when 
 partially constructed, is sometimes 
 abandoned and the work is afterward 
 resumed. If, in the mean time, a 
 mortgage has been executed upon the 
 premises, the mortgagee having no rea- 
 son to suppose that the work would 
 be resumed, he might, it is said, be 
 virtually deprived of his security 
 without any fault or negligence on his 
 part. What should be the rule ia 
 such a case it is not proper for us now 
 to determine. It is sufficient for us 
 to say that we do not think that such 
 a case would involve any great ditii- 
 culty. If a partially erected structure 
 is in a condition to be completed, we 
 
 , Davis V. Bilsland, 18 Wall. 659. 
 See, also, Dubois v. Wilson, 21 Mo. 
 214; American Fire Ins. Co. v. Prin- 
 gle.2 S. & R. 138 : Wells v. Canton Co., 
 3 Md. 234; Getchell v. Allen, 34 Iowa, 
 559, where it is observed by Beck, J., 
 
 be justified in presuming that a cessa- 
 tion of the work, however long con- 
 tinued, was an absolute abandonment. 
 " In regard to the policy of the stat- 
 ute, as we construe it, this may be 
 said : It is not desirable that the exe- 
 cution of a mortgage upon the land, 
 upon which a building or other im- 
 provement is in process of construc- 
 tion, should arrest the work and pre- 
 vent its completion. Both mortgagor 
 and mortgagee are iuterestfed in its 
 completion. Without it, the money 
 already expended must ordinarily to 
 a great extent be lost. Take the pres- 
 ent case as an illustration. The inter- 
 venors are holders of mortgage bonds 
 upon a road, sixteen miles of which 
 had been graded at the time the mort- 
 gage was made. The value of their 
 security depended upon the further 
 construction of the road ; they fore- 
 saw that work and materials must be 
 furnished by somebody, or nothing 
 could be realized from what had been 
 done. Yet, the construction of the 
 statute they contended for would re- 
 quire the mortgagor to keep a fund on 
 baud for the daily payment of the 
 laborers and material men, or that 
 the work and material should be prac- 
 tically furnished without security." 
 
 that "the word 'improvement,' as 
 here used, does not mean an addition 
 to or betterment of a building, but is 
 applied to some independent erection 
 on the land."
 
 6i6 
 
 Private Coeporations. 
 
 same question was recently presented to the United States circuit 
 court for the district of Iowa, where the controversy was between 
 the mortgagees of a railway company and the builders, laborers 
 and material men, as to the priority of their respective liens under 
 the Iowa statute ; and where it was held that the liens of the 
 latter, following the decisions of the state court, dated from the 
 commencement of the building of the railway and not from the 
 time when the particular work was done or the material fur- 
 nished.^ 
 
 1 Taylor et al., Trustees, v. The Bur- 
 lington C. R. R. & M. Co., West. Jur., 
 vol. 11, No. (), p. 336 (May Term, 
 1877). 
 
 Ill this case, Dillon, J., observes: 
 "The trustees m these mortgages re- 
 sist the right to any lien whatever iu 
 many cases [then pending in the court 
 involving the same question] and par- 
 ticularly resist the establishment of a 
 mechanics' lien in any case where the 
 labor was done or the materials were 
 furnished after the recording of the 
 mortgage, which shall have priority 
 over the mortgage. There are also 
 questions as to the lien for repairs af- 
 ter the road has been completed as 
 distinguished from the right to a lien 
 for original construction ; and ques- 
 tions also as to limitation of the lien 
 of the mechanic. * * * The me- 
 chanics' lien statute (Code. §^ 3130- 
 2132) extends i/ite?' (ilia to all persons 
 ' who construct or repair any work of 
 internal improvement,' including rail- 
 ways, and gives a lien ' for labor done 
 or materials, machinery or fixtures 
 furnished ' upon ' such building, erec- 
 tion or improvement, and upon the 
 land belonging to the owner on which 
 the same is situated.' ***** 
 Section 3139 first provides for the pri- 
 ority of mechanics' liens as among 
 themselves, making the same depend 
 upon the order of filing, and then pro- 
 ceeds to enact that such liens 'sliall 
 be preferred to all other liens and in- 
 cumbrances which may be attached to 
 or upon such building, erection or 
 other improvement and to the land on 
 which the same is situated, or either 
 of them, made subsequent to the com- 
 mencement of said building, erection 
 or improvement.' The lien extends to 
 the entire land to th«} extent of the in- 
 
 terest of the person for whom the me- 
 chanic did the work or furnished the 
 materials, and to a leasehold interest, 
 as to which the provision is that the 
 forfeiture of the lease shall not impair 
 the mechanics' lien as to the build- 
 ings, but the same may be sold to sat- 
 isfy the lien and be moved off' within 
 thirty days after the sale (i^ 2140) 
 
 " Section 2141 provides for still an- 
 other case, in these words: 'The lien 
 for the things aforesaid, or work, shall 
 attach to tlie buildings, erection, or 
 improvements for which they were 
 furnished or done, in preference to 
 any prior lien, or incumbrance, or 
 mortgage upon the land upon which 
 the same is erected or put, and any 
 person, enforcingeuch lien, may have 
 such building, erection or other im- 
 provement sold under execution, and 
 the purchaser may remove the same 
 within a reasonable time thereafter.' 
 (§2510.) We hold as follows: 1. 
 Section 2139 contemplates and pro- 
 vides for a case where at the time of 
 the commencement of the building or 
 railway, there is no recorded lien or 
 incumbrance thereon, and where such 
 lien or incumbrance is created subse- 
 quent to the commencement of the 
 building of the railway ; in which case 
 the mechanic has a lien which relates 
 back to the commencement of the 
 building or railway, although the par- 
 ticular work of that mechanic was 
 done or his materials were furnished 
 after a mortgage was recorded or lien 
 created." 
 
 In Ohio & Miss. R Co. v. Davis. 23 
 Ind. .'553, the supreme court of Indiana 
 held, in reference to the appointment 
 of a receiver, that it did not operate 
 to derange the priority of legal or 
 equitable liens; that money or prop-
 
 Liens on Corporate Property and theik Priority. 647 
 
 Sec. 435. These decisions relate to the construction of local 
 statutes. But as the statutes of various states have similar pro- 
 visions, we have deemed it a matter of sufficient interest to refer 
 to the decisions where the statutes have been construed, and to 
 set forth the reasoning and determination of the courts, both state 
 and national, in relation thereto. 
 
 erty in his hands was in tlie custody 
 of the law, and that he held it for 
 whoever was entitled to it ; that where 
 there are various mortgagees, if prior 
 mortgagees do not assume possession 
 of the property or take steps to fore- 
 close their mortgages, any subsequent 
 incumbrancer may have a receiver ap- 
 pointed to take the rents and profits 
 
 for his benefit, until those who have a 
 prior right claim them by some pro- 
 ceeding for that purpose ; but that a 
 subsequent incumbrancer who has re- 
 ceived rents and profits will not be 
 compelled to refund to a prior incum- 
 brancer who subsequently takes pos- 
 session or brings suit
 
 64:8 Private Corporations. 
 
 CHAPTER XX. 
 
 DISSOLUTION. 
 
 Sec. 436. Cause for which corporations may be dissolved or which consti- 
 tute a dissolution. 
 
 Sec. 437. Reserved power in the legislature to dissolve. 
 
 Sec. 438. Id. 
 
 Sec. 439. Where the reserved povrer is subject to a condition. 
 
 Sec. 440. Expiration of the time limited for its continuance. 
 
 Sec. 441. Neglect or abuse of powers. 
 
 Sec. 442. Id. 
 
 Sec. 443. Mode of proceeding in such cases. 
 
 Sec. 444. Id. 
 
 Sec. 445. Dissolution by the voluntary act of members. 
 
 Sec. 446. When the majority may surrender the franchise. 
 
 Sec. 447. Dissolution under statutes providing for the winding-up of cor- 
 porations. 
 
 Sec. 448. Id. 
 
 Sec. 449. Dissolution by the death of all the members. 
 
 Sec. 450. Effect of dissolution generally at common law. 
 
 Sec. 451. Effect of dissolution upon creditors. 
 
 Sec. 453. Forfeiture, not the subject of collateral inquiry. 
 
 Sec. 453. When corporate existence may be inquired into, collaterally. 
 
 Sec. 436. Causes for ■which corporations may be dissolved, or which 
 constitute a dissolution. — There are various modes in wliich moneyed 
 corporations may be dissolved, and various causes for such disso- 
 lution. They may be dissolved: 1. By virtue of a power re- 
 served in the legislature, by the act or general law, by or under 
 which they were created, or by other general lawsorconstitntional 
 provisions. 2. By expiration of the time limited for their continu- 
 ance, either by the special or general statutes, by or under which 
 they were created. 3. For neglect or abuse of their franchises. 
 4. By the voluntary acts of the members. 5. By proceedings 
 under statutes relating to dissolution and the winding-up of the 
 affairs of the corporation. 
 
 Sec. 437. Reserved power in the legislature to dissolve. — The power 
 of parliament, according to the British constitution, being om- 
 nipotent, it could dissolve any public or private corporation. The 
 power could be exercised in an arbitrary manner, but it has, " to
 
 Dissolution. 649 
 
 the honor of the British nation," seldom been exercised. And 
 those instances of arbitrary exercise of it have been cliaracterized 
 by ijord Thuklow as " an atrocious violation of private property, 
 which cut every Englishman to the bone." But in this country, 
 although the power of our legislatures in the various states is, un- 
 less restrained by our written constitutions, as omnipotent as the 
 parliament of Great Britain, yet in respect to repealing or 
 amending charters, they are restrained at least by that provision 
 of the federal constitution, which prohibits any state law, im- 
 pairing the obligation of contracts.* The doctrine, as we have 
 seen in this country, is, that the provisions of a charter or of 
 general statutes providing for incorporation, when once accepted 
 by the corporators, becomes a contract between the state and them, 
 and the state cannot violate this contract or in anv manner chansre 
 or avoid it by legislative action, without the consent of the cor- 
 porators.* 
 
 But this doctrine has no ap])lication where the right to resume, 
 alter or amend the franchises or charter conferred upon a corpora- 
 tion was contained in the special or general statutes under which 
 it was constituted, or in the constitution or general laws of the 
 state, at the time of its creation. And where such a power exists 
 in any of these ways, the legislature in its discretion, and by 
 virtue of its paramount authority, may exercise it in respect to 
 any of the reserved powers, and such use of its powers will not 
 violate the original contract.' 
 
 » Coust. U. S , art. 1 , § 10. Michip:an B'k v. Hastings, 1 Doug. 
 
 ' See a»<e, 1^ 35, 36; Dartmouth Col- 225; Yarmouth v. North Yarmouth, 
 
 lege V. Woodward, 4 Wheat. 518; 2 34 Me. 411 ; City of Louisville v. Uni- 
 
 Kent's Cora. 305 et seq. ; Green v. versity of Louisville, 15 B. Monr. 642; 
 
 Bidde, 8 Wheat, 1; Fletcher v. Peck, Boston R. Co. v. Salem K. Co., 2 Gray, 
 
 6 Cranch, 88; State v. Wilson, 7 id. 1; Commonwealth v. New Bedford 
 
 164; Terret v. Taylor, 9 id. 43; Town Br., id. 339 ; Aurora T. Co. v. Holt- 
 
 of Pawlett V. Clark, id, 292; Brook- house, 7 id. 59; Enfield Toll Br. Co. 
 
 lyn C. R. Co. v. Brooklyn City R. Co., v. Connecticut Riv. Co., 7 Conn. 53. 
 82 Barb. 358, McLaren v. Pennington, ^ See ante, chap. 3. See, also, Bailey 
 
 1 Paige, 107; Wales v. Stetson, 2 Mass. v. Methodist Epis. Ch., 6 R. I. 491 ; 
 
 143; Regents, etc., V. Williams, 9 G. Hyatt v. Whipple, 87 Barb. 595; 
 
 & J. 402; Payne V. Baldwin, 3 S. & M. Miners' Bank v. United States, 1 
 
 661; Aberdeen Female Acad. v. Aber- Morris (Iowa.), 482; Erie R. Co. v. 
 
 deen, 13 id. 645 ; Young v. Harrison, 6 Casey, 26 Penn. St. 287; Sherman v. 
 
 Ga. 130; Bush v. Shipman, 4 Scam. Smith, 1 Black, 587. In the Matter of 
 
 190 ; People v. Marshall, 111. G72 ; the Reciprocity Bank, 29 Barb. 369 ; 22 
 
 Bruffet v. Great W. R. Co., 25 id. 3")3; N. Y. 9 ; Suydam v. Moore, 8 Barb. 
 
 People V. Jackson, P. R. Co., 9 Mich. 358; Massachusetts Gen. Hosp. v. 
 
 285 ; State v. Com. B'k, etc., 7 Ohio, State Asso. Co., 4 Gray, 227 ; Bangor 
 
 125 ; State v. Wash.Soc. Lib., 9 id. 96; R. Co. v. Smith, 47 Me. 34. 
 
 82
 
 650 Private Corporations. 
 
 Sec. 438. id. — The reserved power in such cases may exist, as 
 we have suggested, either in the charter granting the franchise or 
 in the general acts for incorporation, or in the general laws of the 
 state applicable to all cases, or in the constitution of the state. 
 And this power may be absolute and unqualified, or it may be 
 limited and qualified. Thus, it is sometimes provided, only that 
 the power may be exercised in case the corporation shall fail to 
 go into operation, or in case it shall abuse or misuse its franchises.' 
 
 Sec. 439. Where the reserved power is subject to a condition. — 
 Where the right to exercise the reserved power is unqualified, the 
 legislature may repeal the act at any time in their discretion ; and 
 even a creditor who may be thereby prejudiced cannot interpose 
 to prevent the exercise of it, even though he may have a suit 
 pending against the corporation and property attached therein.' 
 
 When the right is qualified, in the manner we have noticed, 
 the legislature, it seems, may determine the questions as to the 
 sufficiency of the cause under the qualifying provisions, and re- 
 peal or amend the charter according to the power reserved.' 
 Under a statute of Massachusetts which provided that every act 
 of incorporation shall, at all times, be subject to amendment, 
 alteration or repeal, at the pleasure of the legislature, provided 
 that no act of incorporation shall be repealed unless for some 
 violation of its charter or other default, when the duration of the 
 
 ' Dartmouth College v. Woodward, mercial Bank, 28 Penn. St. 383 ; Com- 
 
 4 Wheat. 518 ; Terrett v. Taylor, 9 monwealth v. Pittsburgh, etc., R. Co., 
 
 Cranch, 51 ; 4 Wheat. 661 ; Mumniav. 58 id. 26 , State v. Commercial Bank, 
 
 Potomac Co., 8 Pet. 281 ; Penobscot 33 Miss. 474; Washington, etc., R. v. 
 
 Boom Co. V. Lamson, 16 Me. 224; State, 19 Ind. 239; Canal Co. v. Rail- 
 
 Hodsdon V. Copeland,id.314 ; Paschall road Co., 4 G. & J. 1 ; Atchafalaya 
 
 V. Whetsett, 11 Ala. (N. S.) 472 ; Mo- Bank v. Dawson, 13 La. 497 ; State v. 
 
 bile, etc., R. Co. v. State, 29 id. 573 ; Pawtuxet T. Co., 8 R. 1. 183,521 , Mc- 
 
 State V. Bradford, 32 Vt. 50 ; Common- lutire Poor School v. Zanesville Canal 
 
 wealth V. Union Ins. Co., 5 Mass. 230; Co., 9 Ohio, 203 ; John v. Farmers' 
 
 Charles Riv. Br. v. Warren Bridge, 7 Bank, 2 Black, 367. 
 
 Pick. 371; People v. Manhattan Co., ' Read v. Frankfort Bank. 23 Me. 
 
 9 Wend. 351; People v. Kingston, 318 ; Crease v. Babcock, 23 Pick. .334 , 
 
 etc., T. Co., 23 id. 193 ; People v. Bank ErieR. Co. v. Casey. 26 Penn. St. 287 ; 
 
 of Niagara, 6 Cow. 195 ; People v. Miners' Bank v. United States, 1 
 
 Washington Bank, id. 211 ; People v. Greene (Iowa.), 553 ; State v. Curran, 13 
 
 Bank of Hudson, id. 217; People v. Ark. 321. 
 
 Dispensatory, etc., Soc, 7 Lans. 305 ; ^ Crease v. Babcock, and Erie R. Co. 
 
 Lehigh Bridge Co. v. Lehigh Coal Co.. v. Casey, supra. 
 4 Rawle, 9 ; Commonwealth v. Com-
 
 Dissolution, 651 
 
 same is limited by some express provision, it has been held that 
 the legislature may determine in what manner a railroad shall 
 exei'cise its franchises, and may provide for changes in the level, 
 grade and connections thereof ; direct the construction of a new 
 connecting track, and in what manner and under whose super- 
 vision the work shall be done and how paid for ; ' that it may re- 
 quire a station-house to be built ;it a particular place, " and require 
 several railroad corporations, having tracks terminating in a city, 
 to unite at one station/ 
 
 But it has been further held that the legislature is not the final 
 judge of the existence of the conditions upon which the right to 
 declare a forfeiture depends, and that, whether the facts warrant 
 the exercise of the power or not, is for the determination of the 
 courts ; that the (;ourts must declare a forfeiture and not the leg- 
 islature ; * and that the courts can inquire into tlie facts and deter- 
 mine for them whether there are grounds for forfeiture, and 
 according to such finding and determination of the courts, the 
 act of the legislature on the subject is valid or void.^ 
 
 Sec. 440. Expiration of the time limited for its continuance. — An- 
 other mode in which a corporation may be dissolved is by expira- 
 tion of the time for which it was created. This time is fre- 
 quently, if not generally, fixed in the constating instruments, or 
 by some general law. If the limit of corporate power is thus 
 fixed, when the time arrives the corporation is dissolved with all 
 the consequences of a dissolution by any other niode.^ But if the 
 continuance beyond a certain time is made to depend npon the 
 performance of a certain condition, the non-performance of it has 
 been held a mere ground of forfeiture, and not an absolute disso- 
 lution.' 
 
 ' Fitchburg R. Co. v. Grand June- etc., R. Co., 58 Penn. St. 26; Erie R. 
 
 tion R. Co., 4 Allen, 198. Co. v. Casey, 26 id. 387. 
 
 ■'' Commonwealth v. Eastern R. Co., * Id. See, also, Commonwealth v. 
 
 103 Mass. 254. Essex Co., 13 Gray, 239 ; Delaware R. 
 
 3 Mayor, etc. , of Worcester v. Nor- Co. v. Tharp, 5 Harr. 454 : Cur ran v. 
 
 wich R. Co., lOi! Mass. 103. See, also. State, 15 How. (U. S.) 304 ; Flint, etc., 
 
 Parker v. Metropolitan, etc., R. Co, P. R. Co. v. Woodhi^ill, 25 Mich. 99. 
 
 id. 506; Commissioners v. Holyoke ^ Bank of Mississippi v. Wrenn, 3 
 
 Water Power Co., 104 id. 446"; af- S. & M. 791; Commercial Bank v. 
 
 firmed, Ilolvoke, etc., Co. v. Lyman Lockwood, 2 Harr. 8; Wilson v. 
 
 15 Wall. 500. Tesson, 12 Ind. 285. 
 
 * Brutl'eit V. Great West. R. Co., 25 '' La Grange, etc., R. Co. v. Rainey, 
 
 111. 353 ; Commonwealth v. Pittsburg, 7 Cold. 420.
 
 652 Pkivate Coeporations. 
 
 The comtnoTi remedy for avoiding in such cases the reversion 
 or forfeiture of property, the loss of debts and otlier ordinary 
 consequences of a dissolution, where the statute does not provide 
 for a continuance of corporate powers for the purpose of closing 
 up its affairs, is to make a transfer of the property and interests 
 of the corporation to a trustee for the benefit of stockholders or 
 creditors, before the period for dissolution occurs.' 
 
 But it has been held, in reference to municipal corporations 
 dissolved by repeal of charters, that the rights of creditors will be 
 protected from invasion, by the constitution of the United States, » 
 
 Sec. 441. Neglect or abuse of powers. — This is one of the most 
 common causes for dissolution. The contract between the state 
 and the corporators, on the acceptance of the provisions of the 
 statute relating to incorporation for private and pecuniary pur- 
 poses, becomes, as we have seen, inviolable. But the condition 
 imposed upon the corporators is, that they shall carry out the pur- 
 poses of the corporation on their part and not assume powers not 
 conferred upon them by virtue of the authority given. A neglect 
 of duty or abuse of the power, or an assumption of authority not 
 conferred, is ground of forfeiture of the franchise.' But in these 
 cases it can only be dissolved by the judicial determination of a 
 court, on an inquiry into charges made in this respect, and which 
 authorize a decree of dissolution." 
 
 'Id. See, also, Cooper v. Curtia, 30 Wheat. 658; Penobscot Boom Co. v. 
 
 Me. 488; Ingraliam v. Terry, 11 Lainson, IG Me. 234; Hodsdon v. 
 
 Humph. 572 ; Nicoll v. New York R. Copeland, id. 314 ; All Saints Church 
 
 Co., 13 Barb. 460 ; People v. Walker, v. Lovett, 1 Hall, 198 ; John v. Farm- 
 
 17 N. Y. 503, as to construction. ers' Bank, 3 Blackf. 367 ; Hamtramck 
 
 '■'Lansing v. Treasurer, etc., 1 Dill. v. Bank of Edwardsville, 3 Mo. 169; 
 
 (C. C.)523; Butz V. Muscatine, 8 Wall. Day v. Stetson, 8 Me. 372; State v. 
 
 575 ; Gelpcke v. Dubuque, 1 id. 175; New Orleans Gas L. Co., 2 Rob. (La.) 
 
 Thomson V. Lee, 3 id. 337 , Soutter v. 539; Commonwealth v. Commercial 
 
 Madison, 15 Wis. 30 ; Smith v. Apple- Bank, 28 Penn. St. 383. 
 ton, 19 id. 468; Blake V. Railroad Co., *Id. See, also, Turnpike Co. v. 
 
 39 N. H. 435. State, 3 Wall. 310 ; People v. Society, 
 
 » 3 Kyd on Corp. 474 ; Wilcoc on etc., 1 Paine (C C), 660 ; State v. 
 
 Corp. 334 ; 1 Blackst. Com. 485 ; 2 Bradford, 33 Vt. 50 ; Lea v. American 
 
 Kent's Com. 312 et seq. ; Taylors of Canal Co.. 3 Abb. Pr. (N.S.) 1 ; Kisha- 
 
 Ipswich V. Sherring, 1 Roll. 4; Res v. coquillas T. R. Co. v. McConaby. 16 S. 
 
 Orosvenor, 7 Mod. 199 ; Rex v. Saund- & R. 145; Canal Co. v. Railway Co., 4 
 
 ers, 3 East, 119 ; Rex v. Pasmore, 3 G. & J. 1 ; University of Maryland v. 
 
 T. R. 246 I Eastern Archipelago Co. v. Williams, 9 id. 365 ; Washington & 
 
 Reginam,3 E. & B. 857; Story, J., B. T. R. v. Maryland, 19 Md. 239; 
 
 in Ferrett v. Taylor, 9 Craach, 51 ; State v. Cincinnati, 23 Ohio St. 445 ; 
 
 Dartmouth College v. Woodward, 4 Baker v. Backus, 33 HI, 79 ; Liudell 
 
 1
 
 Dissolution. 653 
 
 Sec. 442. Same continued. — The dissolution in sucli cases must 
 be decreed bj a court of competent jurisdiction, and for the right 
 to claim a forfeiture, it may be waived by the state.^ 
 
 On this subject the supreme court of New York observe j 
 " Where a corporation has abused its power, or committed acts 
 whicli are unlawful, it nevertheless continues legally to exist as a 
 corporate body until the state or government which created it 
 shall, by a proper proceeding, procure an adjudication and enforce 
 a forfeiture of the charter. But all such proceedings are at the 
 instance or on behalf of the state or government. Acts which 
 are improper do not of themselves work a dissolution." ''' And in 
 all such cases the state may M^aive its right to forfeiture for the 
 failure of the corporation fully to perform its contract with it, in 
 the same way as an individual may w^aive breaches of contract. 
 This may be, by some act of the legislature, recognizing the cor- 
 poration after previous acts which would warrant a judgment of 
 forfeiture ; ' or it may be by a refusal or neglect to prosecute the 
 delinquent corporation for the purpose of obtaining a judgment 
 of forfeiture by a competent court.^ But in order to infer a 
 waiver of the default of a corporation and of the conditions of a 
 charter, by legislative action, the intention in this respect must be 
 distinctly declared by the legislature, or it must be clearly infer- 
 able from its acts.^ 
 
 V. Benton, 6 Mo. 361; Attorney-General cial Bank, 33 Miss. 474; State v. Ur- 
 
 V. Tudor Ice Co., 104 Mass. 239; At- bana Ins. Co., 14 Ohio, 6; Common^ 
 
 torney-General v. Bank of Niagara, 1 wealth v. Fitchburg R. Co., 13 Gray, 
 
 Hopk. 324 ; Slee v. Bloom, 5 Johns. 180; Ward v. Sea Ins. Co., 7 Paige,294; 
 
 Ch. 303 ; S. C, 19 Johns. 456; Ver- Jackson v. Marine Ins. Co., 4 Sandf, 
 
 planck V. Mercantile Ins. Co., 1 Edw. Ch. 559; People v. Washington Bank, 
 
 Ch. 84 ; Doyle v. Peerless, etc., Co., 44 6 Cow. 211 ; People v. Bristol T. Co. , 
 
 Barb. 239 ; State v. Merchants' Ins., 23 Wend. 222 ; State v. Fa veil, 24 N. 
 
 etc.. Co., 8 Humph. 235 ; Baker v. J. L. 370. 
 Backus, 32 111. 79 ; State v. Commer- 
 
 ' State V. Paterson, etc., T. Co., 21 20 Ark. 495; State v. Fourth N. H. 
 
 N. J. L. 9. Turnpike Co., 15 N. H. 162 ; People 
 
 ^ Ormsbv v. Vermont Copper Mining v. Manhattan Co., 9 Wend. 351; Same 
 
 Co., 65 Barb. 360; People v. Manhat- v. Fishkill P. R. Co., 27 Barb. 445; 
 
 tan Co., 9 Wend. 351 ; Bank of Niag- Baltimore, etc., R. Co. v, Marshall 
 
 ara v. Johnson, 8 id. 645 ; Bear Camp Co., 3 W. Va. 319. 
 
 River Co. v. Woodman, 2 Me. 404; * (^Qj^^onwealth v. Union Ins. Co., 5 
 
 Mickles v. Rochester City Bank, 11 Mass. 230 ; Chester Glass Co. v. Dewey, 
 
 Paige, 118 ; People v. Hillsdale T. Co., 16 id. 94 ; Boston Glass Man. v. Lang- 
 
 23 Wend. 254. don, 24 Pick. 52; Quincy Canal v. New- 
 
 2 State V. Paterson, etc., R. Co., 1 comb, 7 Mete. 276 ; Kuowlton v. Ack- 
 
 Zabr. 9. ley, 8Cush. 95; Heard v. Talbot, 1 
 
 4 State V. Mississippi, etc., R. Co., Gray, 120; Brookville T. Co. v.
 
 654 
 
 Private Corpokations. 
 
 Skc. 443. Mode of proceeding in such cases. — We liave observed 
 that in certain cases the corporation may be dissolved without 
 any adjudication to that effect, as where the time of its linuta- 
 tion has expired, and there is no condition annexed to the charter 
 in this respect.' 
 
 But in other cases, an adjudication may be necessary, in order 
 to determine its rights and prevent future action. 
 
 The ancient common-law modes of procedure for this purpose 
 were by scire facias or quo warranto. The former, it has been 
 considered, ^vas the proper mode of proceeding, where a corpora- 
 tion had a legal existence and was capable of acting, but by rea- 
 son of neglect or abuse of its powers it should no longer be 
 permitted so to do ; the latter, where an association or body cor- 
 porate de facto undertakes to act as a lawful corporate body, but 
 
 McCarty, 8 Ind. 393 ; Cleveland, etc., 
 R. Co. V. City of Erie, 27 Perm. St. 380 ; 
 Commonwealth v. Alles^lieny, etc., Co , 
 20 id. 185 ; Dyer v. Walker, 40 id. 157; 
 Vermont, etc., R. Co. v. Vermont C. R. 
 Co. , 34 Vt. 57 ; Connecticut R. Co. v. 
 Bailey, 24 id. 465 ; Silver Lake Bank 
 V. North, 4 Johns. Ch. 379 ; Slee v. 
 Bloom, 5 td. 366 ; 19 Johns. 456 ; 
 Vernon Society v. Hills, 6 Cow. 23 ; 
 Thompson v. New York R. Co., 3 
 Sandf. Ch. 652 ; Caryl v. McElrath, 3 
 Sandf. 176; Enfield Toll ^r. Co. v. 
 Connecticut Riv. Co., 7 Conn. 46; 
 Pearce v. Olney, 20 id. 544.; Kishaco- 
 quillas T. Co. v. McConaby, 16 S. & R. 
 145, Dyer v. Walker, 40 Perm. St. 
 157 ; Brookville T. Co. v. McCarty, 8 
 Ind. 392 ; John v. Farmers' Bank, 2 
 Blackf. 367 ; Pierce v. Somerswortli, 
 10 N. H. 875, per Parker, C. J. ; 
 State V. Fourth N. H. Turnp. Co., 15 
 id. 162 , Cahill v. Kalamazoo Ins. Co., 
 2 Doug. (Mich.) 124, 141 ; Bohannon v. 
 Binns, 31 Miss. 355 ; Cramp v. United 
 States Min. Co., 7 Gratt. 352; Canal 
 Co. v. Railroad Co., 4 G. & J. 1 ; 
 Planters' Bank v. Bank of Alexandria, 
 10 id. 346 ; University of Md. v. Wil- 
 liams, 9 id. 365 ; Hamilton v. An- 
 napolis R. Co. , 1 Md. Ch. Dec. 107 ; 
 Atchafalaya Bank v. Dawson, 13 La. 
 
 497 ; State v. N. 0. Gas. L. Co., 2 Rob. 
 (La.) 529; Webb v. Moler, 8 Ohio, 
 548 ; Bank of Cir. v. Renick, 15 id. 
 322 ; Johnson v. Bentley, 16 id. 97 ; 
 Myers v. Manhattan Bank, 20 id. 283 ; 
 Bank of Mo. v. Merchants' Bank, 10 
 Mo. 123 ; Bank of Galliopolis v. Trim- 
 ble, 6 B. Monr. 599 ; Harrison v. Lex- 
 ino^ton R. Co., 9 id. 470; Young v. 
 Harrison, 6 Ga. 130 ; Salem R. Co. v. 
 Tipton, 5 Ala. 805 ; Duke v. Cabawba 
 Xav. Co., 16 id. 372 ; State v. Center- 
 ville Br. Co., 18 id. 678; Smith v. 
 Plankroad Co., 30 id. 650 ; Bayless 
 V. Orne, Freem. (Miss.) 173; Smith v. 
 Mississippi R. Co., 6 S. & M. 179; 
 Grand Gulf Bank v. Archer, 8 id. 151 ; 
 Rex V. Slaverton, Yelv. 190 ; Rex v. 
 Carmarthen, 1 W. Bl. 187 ; 2 Burr. 
 809 ; Rex v. Amery, 2 T. R. 515 ; Rex 
 v. Pasmore, 3 id. 244 ; Terrett v. Tay- 
 lor, 9 Cranch, 51 ; 2 Kent's Com. 313 ; 
 Brice's Ultra Vires, 647 et seq. ; 
 People V. Kingston T. Co., 23 Wend, 
 193; People v. Phoenix Bank, 24 id. 
 431. And this doctrine of waiver does 
 not apply where, by the express terms 
 of the charter, the franchise absolutely 
 determines on failure to perform cer- 
 tain conditions. People v. Manhattan 
 Co., 9 Wend. 351 ; Commonwealth v. 
 Union Ins. Co., 5 Mass. 232 
 
 ' Bank, etc., v. Wrenn, 3 S. & M. 
 791 ; Commercial Bank v. Lockwood, 
 
 2 Harr. (Del.) 8; Ang. & Am. on Corp., 
 
 S 778.
 
 Dissolution. 055 
 
 has no legal authority to exercise such powers.^ But the iiK^d- 
 ern proceeding in such cases is in the nature of <iuo %oarranto? 
 For, as we have before noticed, although the ancient writ of quo 
 warranto Avas the method whereby legal incpiiry was made, as to 
 the authority of a body of persons assuming to act as a corporate 
 body, to legally perforin such functions,^ information in the 
 nature of quo warranto is a modem mode of correcting not only 
 tlie usurpations, but the mis-user or non-user of a corporate fran- 
 chise/ For various reasons the ancient proceedings in England, 
 by writ, fell into disuse, and the modern remedy by information 
 in the nature of quo warranto was substituted/ Informations 
 of this character may be hied by the attorney-general or the 
 attorney representing the state, or by any other erson, by leave 
 of the court. 
 
 " The principle is now firmly established," observes Mr. High, 
 " that the granting or withholding leave to file an information, at 
 the instance of a private relator, to test the right to an office or 
 franchise, rests in the sound discretion of the court to which the 
 application is made, even though there be a substantial defect in 
 the title by which the office or franchise is held." In the exer- 
 cise of this discretion, upon the application of a private relator, it 
 is proper for the court to take into consideration the necessity and 
 policy of allowing the proceedings, as well as the position and 
 motives of the relator in proposing it, since this extraordinary 
 remedy will not be allowed merely to gratify a relator who has 
 no interest in the subject of inquiry.' The court will also weigh 
 
 ' See opinion of AsnURST, J., inRex ing by information in tlie nature 
 
 V. Pasraore, 3 T. R. 244 ; Regents, etc., thereof. See.also, 3 Blackst. Com. 263; 
 
 V. Williams, 9 tt. & J. 365; Brice's Attorney-General v. Barstow, 4 Wis. 
 
 Ultra Vires, 589. 659. 
 
 n Blackst. Com. 485; 2 Kyd on Corp. « People v. Waite, 111. (1874). Chic. 
 
 474; ante, ^453; People v. Bank of Leg. News, 175; State v. Tolan,33N. 
 
 Niao'ara, 6 Cow. 196 ; People v. Bank J. Eq. 195 ; State v. Schnierle, 5 Rich, 
 
 of Huddon, id. 217; Same V. Washing- 299; State v. Fisher, 28 Vt. 714; 
 
 ton, etc., Bank, id. 211; 3 Blackst. Com. Commonwealth v. Reigart, 14 S. & 
 
 262; Commonwealth V. Small, 26 Peun. R. 216; State v. Brown, 5 R. I. 1. 
 
 St. 31 ; State v. Ashley, 1 Ark. 279. See, also, Stone v. Wetmore, 44 Ga. 
 
 3 High on Extra. Leg. Rem., § 593 495 ; Commonwealth v. Cluley, 56 
 
 etseq , and notes. Penn. St. 270 ; People v. Sweeting, 2 
 
 •* Id., § 601 et seq., and notes. Johns. 184. But see State v. Burnett, 
 
 5 See id , § 591 et seq., for a history 2 Ala. 140. 
 
 of quo warranto, and of the proceed- "^ State v. Brown, 5 R. I. 1.
 
 656 
 
 Private Corporations. 
 
 tlie considerations of public convenience involved, and will com- 
 pare them with the injmy complained of, in determining M'hether 
 to grant or refuse the application." ' It is not within the proper 
 scope of this treatise to consider f idly the various ordinary and 
 extraordinary remedies, whicli may be had by and against corpora- 
 tions, or those related to them as stockholders and creditors. 
 Special treatises are devoted to these matters, especially the com- 
 mon-law remedies, by mandamus, quo warranto, injunction, etc., 
 the general principles relating to which are as applicable to cor- 
 porations as to individuals.'' 
 
 Sec. 414. "We have already noticed, that to warrant a judg- 
 ment of forfeiture against a corporation on the ground of neglect 
 or abuse of corporate powers, such neglect must be more than 
 the result of mere omission to use certain powers possessed or a 
 mere accident, and such abuse must be willful and not the result 
 of mistake.' Thus, it is not a cause of forfeiture for a corporation 
 to neglect to enforce its rights against a delinquent stockholder 
 
 1 Hig-li on Extra. Leg. Rem., § 60o. 
 See, also, State v. Scbnierle, 5 
 Rich. 299. In former times it was 
 rather a common occurrence for pro- 
 ceedings to be instituted by the crown 
 against corporations for misusing their 
 franchises or against individuals for 
 usurping such principles. State 
 reasons were generally the motive 
 cause. The municipal corporations 
 during the middle ages, and till a 
 period at least as late as the Revolu- 
 tion of 1688, formed one of the main 
 stays of English liberty. The sover- 
 eigns encouraged them as the centers 
 of trade, and repressed them by every 
 means, when they attempted to make 
 subservient to political objects the 
 great power which the union and 
 periodical meetings of their members 
 gave them. Other incentives there 
 were, too, which prompted the almost 
 continual interference of the crown 
 with the corporations. Every addition 
 to the importance and strength of them 
 was assumed to be an encroachment 
 upon and a diminution of the preroga- 
 tive. Moreover, the fines imposed 
 upon corporative bodies, and often 
 upon the luckless corporators them- 
 
 selves, were a lucrative source of 
 revenue. However, with the increase 
 of individual freedom, and the pro- 
 tection for the expression of individual 
 opinions, the political importance of 
 these bodies has greatly diminished ; 
 consequently seldom, if ever, does the 
 crown now attack them for an en- 
 croachment upon its own privileges, or 
 for any other reason of offense to it- 
 self. Brice's Ultra Vires, 649. 
 
 ■^ See ante, chap. 18 ; also High on 
 Extra. Leg. Rem., tit. Mandamus and 
 Quo Warranto ; Tapping on Man- 
 damus; High on Injunctions; also, 'post, 
 chap. 21, for a treatment of mandamus. 
 
 ^ A neglect to elect proper officers, or 
 the death of officers, does not usually 
 constitute a cause of dissolution. Vin- 
 cennes Univ. v Indiana, 14 How. (U. 
 S.) 2G8; Russell v. McClelland, 14 
 Pick. 63 ; Kuowlton v. Ackley, 8 Cush. 
 94 ; Evarts v. Killing worth Co., 20 
 Conn. 447 ; Phillips v. Wickham, 1 
 Paige, 590; Rose v. Turnpike Co., 3 
 Watts, 46 ; Commonwealth v. Cullen, 
 13 Penn. St. 133 ; Blake v. Hinkle, 10 
 Yerg. 218 ; Nashville Bank v. Petway, 
 3 Humph. (Tenn.) 524 ; Cahill v. Kala- 
 mazoo Ins. Co. , 2 Doug. 140.
 
 Dissolution. 657 
 
 by omitting to sell his shares of stock in the company, or to sue 
 such stockliolder for iiupiiid calls,' or for the refusal of an insur- 
 ance company to insure in certain cases,'' or for refusing to insure 
 in any case, and discontinuing all ordinary business (except set- 
 tling up its affairs) for the period of a year ; ' nor, generally, that 
 proceedings have been instituted against the corporation under 
 insolvent laws,^ or that a receiver has been appointed/ 
 
 " In general, to work a forfeiture, there must be something 
 wrong, arising from willful abuse or improper neglect ; something 
 more than accidental negligence, excess of power, or mistake in 
 the mode of exercising an acknowledged power. A single act of 
 abuse or willful non-feasance in a corporation may be insisted on 
 as a ground of total forfeiture, but a specific act of non-feasance^ 
 not committed willfully or negligently^ not producing nor 
 having a tendency to produce mischievous consequences to any 
 one, and not being contrary to any particular recpiisition of the 
 charter, willnot work a forfeiture." ' Slight deviations from the 
 provisions of a charter would not necessarily be either an abuse 
 or mis-use of it and ground for its annuUment, although it would 
 be competent, by apt words, to make the continuance of the 
 charter conditional upon the strict and literal performance of 
 them.'' The duties assigned by an act of incorporation are con- 
 ditions annexed to the grant of the franchises conferred. Hence 
 non-compliance with the requirements of an act incorporating a 
 turnpike company as to the construction of the road is, per se, a 
 
 » Commercial Bank, etc., v. State of Conn. 233 ; Pondville Co. v. Clark, 25 id. 
 
 Miss., 6 S. & M. 615. 97 ; Hoyt v. Sheldon, 3 Bosw. 267 ; 
 
 " State v.Urbana Ins. Co., 14 Ohio, 6. Nimiuons v. Tappan, 2 Sweeney, 652. 
 
 Acts of neglect do not work a disso- But see, under the National Banking 
 
 lution ipso facto, but entitle a stock- Statutes, National Bank v. Colby, 21 
 
 holder or creditor to take proceedings Wall. 609. 
 
 to have it judicially declared. Mickles ^Taylor v. Franklin Ins. Co., 115 
 
 V. Rochester City Bank, 11 Paige, 118. Mass. 278. 
 
 3 Jackson Marine Ins. Co., In the * People v. Bristol T. R., 23 Wend. 
 
 Matter of, 4 Sandf . Ch. 550. 222 ; Bank Commissioners v. Bank, 
 
 * Coburn v. Boston Papier Mache etc., 6 Paige, 497 ; Ward v. Sea Ins. 
 
 Manuf. Co., 10 Gray, 248; Rollins v. Co., 7 id. 294; Paschall v. Whitsett, 
 
 Clay, 33 Me. 132 ; Brandon Iron Co. v. 11 Ala. 472 ; State v. Merchants' Ins. 
 
 Gleason, 24 Vt. 228 ; State Nat. Bank Co., 8 Humph. 235 ; Frederick Female 
 
 V. Robadoux, 57 Mo. 446; Piatt v. Seminary v. State, 9 Gill, 379 ; State v. 
 
 Archer, 9 Blatchf. 559 ; Boston Glass Coll. & H. P. R. Co.. 2 Sneed, 254. 
 Manuf. V. Langdon, 24 Pick. 49 ; Coburn ''Eastern Archipelago Co. v. Regi- 
 
 V. Boston Papier Mache Manuf. Co., 10 nam, 2 Ellis & B. 857. 
 Gray, 248 ; Catlin v. Eagle Bank, 6 
 
 83
 
 658 Pkivatk Corpokations. 
 
 mis-user, subjecting the privileges and franchises of tlic company 
 to forfeiture.' 
 
 Indeed the non-performance of a particular act required by the 
 charter, whether for the benefit of an individual or the state, is, or 
 may be, a cause of forfeiture, although not especially declared to 
 be such by the charter itself.'^ The non-payment of the portion 
 of the capital required by the charter for the beginning of busi- 
 ness, and the sending in by the directors of a false certificate that 
 it was paid and thereupon commencing business, is, as a breach 
 of the conditions of the charter or an abuse of its franchises, 
 cause of forfeiture.^ 
 
 " A suhstantial performance of conditions, however, is all that 
 is required whether they be conditions precedent or subsequent.'''' * 
 
 Sec. 445. Dissolution by the voluntary act of members. — The doc- 
 trine that a private moneyed corporation may be dissolved by the 
 voluntary action of a majority of its members, in thfe absence of 
 positive provisions to the contrary, contained in the constating 
 instruments, seems generally received in England. On this sub- 
 ject Mr. Brice says : " The majority of a corporation may, against 
 the wishes of the minority, dissolve by winding up, and the more 
 generally received opinion is, that they can do so by any otlier 
 process which is purely voluntary." ^ And in this country the 
 
 1 People V. Kingston T. Co.. 23 poration therefor." Code (1873), § 
 
 Wend. 193. And see Lumbard v. 1086. 
 
 Stearns, 4 Cusli. 60 ; People v. Jack- ^ Brice's Ultra Vires, 651 ; Ward v. 
 
 son T. Co. , 9 Mich. 285. Society of Attorneys, 3 Coll. 370; 
 
 ^ Attorney-Gen. v. Petersburgh R. Bank of Switzerland v. Bank of Tur- 
 
 Co., 6 Ired. (N. C.) 456. key, 5 L. T. (N. S.) 549. In England 
 
 * Eastern Archipelago Co. v. Regi- it is now expressly provided liy act of 
 nam, 2 Ellis & B. 857 ; 22 Eng. L. & parliament (Companies Act, 1862, 25 & 
 Eq. 328 ; 13 id. 167. 26 Vict., chap. 89, § 79), that a corpora- 
 
 * People V. Thompson, 21 Wend, tion may be wound up in the following 
 235 ; S. C. in error, Thompson v. cases : 
 
 People, 23 id. 537 •, Commonwealth v. 1. Whenever the company has 
 
 Alleglif;ny Co., 20 Penn. St. 185. If a passed a special resolution requiring 
 
 railroad corporation should suffer their the company to be wound up by the 
 
 road to be sold on execution, it would court. 
 
 be cause of forfeiture. State v. 3. Whenever the company does not 
 
 Rives, 5 Ired. (N. C.) 309. But in commence its business for the space of 
 
 Iowa it is provided: " The franchises a whole year. 
 
 of a corporation may be levied upon 3. Whenever the members are re- 
 
 under execution and sold, but the cor- duced in number to less than seven. 
 
 poration shall not become thereby dis- 4. Whenever the company is unaljle 
 
 solved, and no dissolution of the origi- to pay its debts. 
 
 nal corporation shall affect the fran- 5. Whenever the court is of opinion 
 
 chise, and the purchaser becomes that it is just and equitable that it 
 
 vested with all the powers of the cor- should be wound up.
 
 Dissolution. 659 
 
 right of a private corporation for peciuiiary gain to voluntai-ilj 
 dissolve seems generally conceded, notwithstanding the charter 
 constitutes a contract, to which there must necessarily be. at least 
 two parties and the assent of both parties is essential to the 
 abroo^ation of the contract.^ 
 
 But it has sometimes been held in this country that such 
 voluntary surrender must, in order to be effective, be accepted 
 by the state/ In some cases surrender has been presumed 
 merely from the neglect to use the corporate powers ; ' and in 
 others that neither non-user, suspension of business, nor the sale 
 or assignment of the corporate property, will necessarily constitute 
 a surrender of the corporate francliises/ But acts which destroy 
 the end for which the corporation was created have been 
 held to be a surrender of its corporate rights and powers/ And 
 it is evident that such conduct on the part of the corporation 
 would be ^oltra vires, and be just ground for a judgment of for- 
 feiture against it. In this country it has been held that cor- 
 porations for pecuniary gain may, by a vote of a majority of its 
 members, wind up their affairs ; or they may sell the whole of 
 their property to a new corporation and take shares of its stock 
 
 ' Riddle v. Locks, etc., Co., 7 Mass. Y. 93 ; State v. Bank of Md., 6 G. & 
 
 185 ; Hampshire v. Franklin, 16 id. 86 ; J. 205 ; University of Md. v. Williams, 
 
 Savage v. Walshe, 26 Ala. 619; Mo- 9 id. 365; Town v. Bank of River 
 
 bile, etc., R. Co. v. State, 29 id. 573 ; 2 Raisin, 2 Dougl. (Mich.) 541 ; Bruffett 
 
 Kent's Com. 310 ; Mumma v. Potomac v. Great Western R. Co., 25 111. 353. 
 
 Co., 8 Pet. 281 ; Penobscot Boom Co. * Id. ; Penobscot Boom Co. v. Lam- 
 
 V. Lamson, 16 Me. 234; Hodsdou v. son, 16 Me. 224; Brandon Iron Co. v. 
 
 Copeland, id. 314; Enfield Toll Br. Gleason, 24 Vt. 328 ; Newton, etc., Co. 
 
 Co. V. Connecticut, etc., R. Co., 7 v. White, 43 Ga. 148. 
 
 Conn. 45; Slee v. Bloom, 19 Johns. =- Strickland v. Prichard, 37 Vt. 834; 
 
 456; McLaren v. Pennington, 1 Paige, Slee v. Bloom, 19 Johns. 456; Penni- 
 
 107 : Canal Co. v. Railroad Co., 4 G. & man v. Briggs, 1 Hopk. 300; S. C, 
 
 J. 1 ; Attorney-Gen. v. Clergy Soc, 10 S Cow. 387 ; People v. Hudson, 6 id. 
 
 Rich. Eq. 604 ; Mclntire v. Zanesville 317 ; Moore v. Whitcomb, 48 Mo. 543. 
 
 Canal Co., 9 Ohio, 203; 1 Kyd on Mr. Dillon observes in relation to 
 
 Corp. 1, 9, 10 ; Res v. Amery, 3 T. R. municipal corporations: "Since all 
 
 531 ; Rex v. Gray, 8 Mod. 361. our charters of incorporation come 
 
 ^ Revere v. Boston Copper Co., 15 from the legislature, there can be no 
 
 Pick. 351 ; Boston Glass Co. v. Lang- dissolution of a municipal corporation 
 
 don, 24 id. 49 ; Enfield Toll Br. Co. v. by a surrender of its franchise * * * 
 
 Connecticut, etc., R. Co., 7 Conn. 45. If there could be any such thing, it 
 
 ^ Brandon Iron Co. v. Gleason, 24 Vt. would, from necessity, have to be made 
 
 238 ; Brinkerhoif v. Brown, 7 Johns, to the legislature, and its acceptance 
 
 Ch. 217; Barclay v. Talman, 4 Edw. would have to be manifested by appro- 
 
 Ch. 123; People V. Bank of Hudson, priate legislation." Dill on Mun. Corp., 
 
 6 Cow. 217 ; Bradt v. Benedict, 17 N, § 111.
 
 C)<50 
 
 Pkivate Corporations. 
 
 ill paynieiit, to be distributod ainoug the members of tlie old com- 
 pany who are willing to take them.' And under an existing stat- 
 ute of Massachusetts a majority of members, or those represent- 
 ing a majority of shares, may, by application to the supreme 
 court, setting forth reasonable grounds therefor, secure a dissolu- 
 tion of the corporation." 
 
 Sec. ttiG. When the m^ority may surrender the franchise. — The 
 question as to the nnanimity required by the corporators in order 
 to accomplish a voluntary surrender of corporate franchises may 
 depend upon the provisions of the charter. If there is no pro- 
 vision upon this subject, and no definite period of limitation to 
 corporate existence, it has been uniformly held that a majority 
 may, by resolution, surrender its charter ; ^ but if it is other- 
 wise provided in the constating instruments, or if the duration of 
 the coi-poration is fixed by them, unanimity of the stockholders is 
 held essential to a surrender * 
 
 • Wilson V. Central Br. Co., 9 R. I. 
 590; Tread well v. Salisbury Man. Co., 
 7 Gray, 393. 
 
 ^ (ien. Stat. Mass., chap. 68, § 35. 
 See, also, Stat. 1852, chap. 55 ; Pratt v. 
 Jewutt, 9 Gray, 34. The Code of Iowa, 
 § 103G (1873). provides : "No corpora- 
 tion shall be dissolved prior to the 
 period fixed in tlie articles of incor- 
 poration, except by unanimous consent, 
 unless a different rule has been adopted 
 in their articles." A private corpora- 
 tion may surrender its franchise. The 
 People V. The President, etc., of the 
 College of California, 38 Cal. 166 ; 1 
 With. Corp. Cas. 161. 
 
 ^ See authorities already cited on 
 the question. See, also, Treadwell v. 
 Salisbury Man. Co., 7 Gray, 393 ; Wil- 
 son v. iProprietors, etc., 9 R. I. 590; 
 Zabriskie v. Hackensack R. Co., 18 N. 
 J. Eq. 193; Black v. Delaware, etc., 
 Canal Co., 7 id. 404, McCurdy v. Myers, 
 44 Penn. St. 435. But see Kean v. 
 Johnston, 1 Stockt. 401 ; Revere v. 
 Boston Cop. Co., 15 Pick. 351; Curien 
 V. Santiui, 16 La. Ann. 27; Polar Star 
 Lodge v. Polar Star Lodge, id. 53. 
 
 * Von Schmidt V. Huntington, 1 Cal. 
 55. 
 
 Chancellor Zabriskie in Black v. 
 Delaware, etc.. Canal Co., supra, ob- 
 serves : " But there is no case that 
 holds that a majority of corporators, 
 where a time is not specified for which 
 the enterprise must be continued, may 
 not abandon the enterprise and sell out 
 the property of the company. * * * 
 Becoming incorporated for a specified 
 object without any specified time for 
 tlie continuance of the business is no 
 contract to continue it forever any 
 more than articles of partnership with- 
 out stipulations as to time." Corpora- 
 tions cannot be compelled to use their 
 powers where their interests will not 
 be subserved thereby. People v. Al- 
 bany, etc., R. Co.. 24 N. Y. 261; Tread- 
 well v. Salisbury Man. Co., 7 Gray, 398. 
 
 And provision is frequently made 
 by statute that, in case of dissolution 
 either by expiration of the time fixed 
 by law or by tlie voluntary act of the 
 stockholders, corporate functions con- 
 tinue for the purpose of winding up 
 the corporate concerns. Iowa Code 
 (1873), § 1080. In Revere v. The Bos- 
 ton Copper Co., 15 Pick. 351, the de- 
 fendant had made a contract with the 
 plaintiff to serve its interest during
 
 Dissolution. 
 
 G61 
 
 Sec. 447. Dissolution under statutes providing for the winding-up of 
 corporations. -There are, perhaps, generally, statutory j^rovisions 
 
 life, and promised in consideration 
 thereof the payment of a fixed salary 
 so long as the services contiuued to be 
 faithfully performed. The court say: 
 "The defendant corporation was es- 
 tablished by the legislature iu P'ebru- 
 ary, 1825, and about a month after its 
 incorporation made the contract on 
 which the question arises. 
 
 "That agreement was made in 
 March 15, 1825, and the cause depends 
 upon its construction. It purports to 
 be a mutual agreement between the 
 corporation on the one part and the 
 plaiiititf and another individual on the 
 other ])art. It is contended by the de- 
 fendants that by the proceedings stated 
 in the case this corporation was dis- 
 solved and determined, and so by the 
 limitation in the contract itself the 
 term for which the plaintiff was en- 
 gaged had ceased. Without deter- 
 mining whether such a voluntary dis- 
 solution of the corporation was the 
 event contemplated by the parties in 
 the clause alluded to, we are of the 
 opinion that by the acts disclosed this 
 corporation was not dissolved. By a 
 reference to the act of incorporation, 
 Stat. 1824, chap. 61, amended as to the 
 name by Stat. 1825, chap. 124, it ap- 
 pears, that the company was not incor- 
 porated for any determinate time, and 
 was, therefore, iu its nature, perpet- 
 ual. We think such a corporation can- 
 not dissolve itself , and terminate its own 
 existence, at its own will, by a bare 
 notice to the executive department of 
 the government. It may be asked, 
 then, what could have been contem- 
 plated by the clause in the contract, 
 Umiting the term of the plaintiff's en- 
 gagement to the time for which the 
 corporation was established ; or how a 
 corporation not limited in its duration 
 can be dissolved and terminated. I 
 suppose no reasonable doubt can exist, 
 that the power to create, by the con- 
 sent of parties, may with the like con- 
 sent dissolve a corporation. An act 
 of incorporation is deemed to be a con- 
 tract, between its members and the 
 sovereign, formed by the consent of 
 both parties; and it is conformable to 
 
 the spirit of the law of contract, that 
 with the like consent, it may be abro- 
 gated and discharged, and, therefore 
 it would be competent for the legisla- 
 ture, by a formal act, to acce))t such a 
 surrender, and thereupon dissolve the 
 corporation. This would afTord a se- 
 curity to the public and to all those 
 who might have an interest in the con- 
 cerns of such corporation, that no dis- 
 solution would be sanctioned by the 
 legislature, which would, in its conse- 
 quences, impair their rights. But 
 there is another circumstance which 
 may be deemed sufficient to give a 
 meaning and effect to this part of the 
 agreement. Although this act of in- 
 corporation had no provision limiting 
 its duration to any certain time, yet it 
 was made subject in all respects to 
 the provisions of the general act regu- 
 lating manufacturing corporations, 
 Stat. 1808, chap. 65, § 7, by which it 
 is provided, that the legislature shall 
 have power at any time afterward 
 to modify or wholly repeal any 
 act of incorporation thereafterward 
 to be made. This provision is, there- 
 fore, substantially embodied into the 
 act of incorporation and made part of 
 it. In consec[uence of this provision, 
 the act was in efiect held at the pleasure 
 of the legislature, and had they passed 
 an act, repealing it after a certain time, 
 the period thus limited would deter- 
 mine the time for which it was incor- 
 porated, and fix a limit to the term of 
 the plaintiff's engagement. But as no 
 such act was passed, and no act 
 was done which in our opinion would 
 dissolve the corporation, the time for 
 which the plaintiff engaged has not 
 been limited or fixed by the clause in 
 question. The question then recurs, 
 upon the construction and legal effect 
 of this contract. 
 
 " The first and fundamental rule in 
 the construction of a contract is to as- 
 certain the meaning and intent of the 
 parties; and the second is to look at 
 every clause and word of the instru- 
 ment in which they have embodied 
 their contract, to ascertain that mean- 
 ing. The engagement of the plaintiff to
 
 GG2 
 
 Pkivate Cokpokations. 
 
 in the varioiis states, for tlic dissolution of corporations and tlie 
 ^vinding np of tlieir affairs by j)roceedings in court. These fre- 
 quently provide when, for what causes, imd in what mode corpo- 
 
 perform services, being for the time 
 tor wliich the corporation was estab- 
 lished, when applied to a corporation, 
 constituted as already stated, is for an 
 Indefinite time, determinable by the 
 dissolution of the corporation in a 
 mode fixed by law. The stipulation 
 of the corporation is to pay the sala- 
 ries to the plaintiff and the other indi- 
 vidual, so long as they shall continue 
 to perform their part of this agree- 
 ment. They, without any further 
 provision, must render the contract de- 
 terminable by the death of the plaint- 
 iff, or by any failure to perform his 
 part of the contract. But this is not 
 left to inference. The next and last 
 clause provides that, in case of the 
 death or refusal to perform the agree- 
 ment of the said Revere, or other in- 
 dividual, the corporation is to be dis- 
 charged from all obligation except to 
 the survivor or party continuing to 
 perform. This clause, to my mind, 
 carries a necessary implication that, 
 until the death of the plaintiff or his 
 refusal to perform his agreement, the 
 corporation is not discharged, but the 
 obligation to pay continues, and fur- 
 ther, that upon the death or refusal to 
 perform of one, the obligation of the 
 corporation is to continue as to the 
 other. This makes it essentially a 
 contract with each, for life. For al- 
 though this term is not used, yet a 
 contract with a corporation, which is 
 in its nature perpetual, but determin- 
 able by some contingent event, is a 
 contract for an indefinite time, and a 
 stipulation by the corporation to pay 
 so long as the other party shall per- 
 form, with a proviso that, by the death 
 of the party contracting to perform 
 services, the corporation shall be dis- 
 charged, is in legal effect a contract 
 for life. Such, it appears to the court, 
 was the contract in the present case. 
 
 "In opposition to this view, it is 
 contended, in the able argument for 
 the defendants, that this could not 
 have been the meaning and intent of 
 tlie parties, because it would be un- 
 equal ; in case of the ill success of the 
 contemplated enterprise, injurious and 
 ruinous to the company ; and as the 
 
 obvious intent and expectation of 
 the company, of whom the plaintiff 
 was one, was to carry on a useful, and 
 successful, and profitable business, 
 the contract must be taken to have 
 been made with the necessary limita- 
 tion, that, if the business proved un- 
 profitable, the defendants must be at 
 liberty to bring it to a close, that 
 should terminate their obligation to 
 employ and pay the plaintiff for ser- 
 vices. They contend, that the parties 
 contemplated, not the legal dissolu- 
 tion of the corporation, but the det^■r- 
 mination of its business existence, and 
 this they had a right to determine 
 whenever they should find the enter, 
 prise unsuccessful, after a full and 
 fair trial, and should in good faith 
 for that cause judge it expedient to 
 bring its business to a close. These 
 views would certainly deserve great 
 consideration, and a more thorough 
 investigation, if the terms of the 
 contract were doubtful or ambiguous, 
 and if it were open to construction. 
 But if the terms of the contract are 
 plain and perspicuous, it is not enough 
 to say, that the parties could not have 
 intended what their language has 
 plainly expressed. The bargain may 
 have been hasty or improvident, or 
 one of which we cannot see the rea- 
 sons or ground. Still, if such was the 
 contract, and entered into fairly, it is 
 not for a court of law to vary or alter 
 it, or change its legal effect, upon 
 vague notions of improvidence or ine- 
 quality, or on account of its being 
 founded upon expectations which 
 have not been realized. But, although 
 in the result it may have proved un- 
 profitable to the corporation, the court 
 cannot perceive that it was unequal 
 as between the parties. It is to be 
 presumed that the plaintiff had skill 
 and experience in his business, and 
 was so considered by the company. 
 They require him to stipulate that he 
 will devote the whole of his time, 
 skill and attention to their business 
 for his life, and will engage in no 
 other business. The court are not 
 informed what business the plaintiff 
 and Blake were in before, what good-
 
 Dissolution. 
 
 663 
 
 rations may be wound np.^ In the absence of statutory regula- 
 tions, which frequently provide for the continuance of the corpo- 
 rate functions, after dissolution, for the purpose of saving the 
 
 will or run of custom, or profitable 
 concern, they gave up and in effect 
 brought to the corporation by this 
 agreement, or what offers or expecta- 
 tions they might have had from rival 
 companies. Whatever they were 
 they were relinquished forever by 
 this contract. Tlie corporation se- 
 cured to themselves the exclusive 
 benefit of the services of these indi- 
 viduals ; and, although it may not 
 have been beneficial to the corporation, 
 it may have deprived the plaintiff and 
 his associate of profitable engagements 
 elsewhere. 
 
 " One other ground of defense sug- 
 gested, but I think not very confidently 
 urged by the defendants' counsel, is, 
 that the plaintifi himself was one of 
 the corporation, and as such was bound 
 by its acts ; and that, when a major- 
 ity of the corporation voted to dissolve 
 and wind up the business of the com- 
 pany, he was bound by it, though he 
 individually dissented. 
 
 " But we think it clear that this 
 argument cannot be sustained. So 
 far as his rights, duties and obliga- 
 tions as a corporator were concerned, 
 no doubt he is bound by the acts of a 
 majority, but no further. Here he 
 claims, not as a corporator, but upon a 
 contract in which he is one party 
 and the corporation the other. One of 
 the main purposes and principal 
 effects of incorporation is to create a 
 separate person in law, capable of 
 acting and contracting in a separate 
 capacity ; and such conventional per- 
 son and body politic has a legal 
 existence independent of that of all 
 
 1 See Gen. Stat. 3Iass. (1860), 388, p§ 
 35-39 ; N. Y. Stat, at Large (Edmonds' 
 ed.), vol. I, 557 ; vol. II, 48S ; Curwin's 
 R. S. Ohio, chap. 592, §§ 1-2, p. 1153 ; 
 Swan k Saylor's Sup. p. 243 ; Statutes 
 of 111. (1871), p. 577, § 25 ; Wagner's 
 Stat.. Mo., p. 293, §ii 21-22; Bright- 
 lev's Purdon's Dig. Penn. (1862). p. 197 ; 
 Code of Iowa (1873), i? 1074. Accord- 
 ing to the provisions of the Iowa Code 
 intentional fraud, in failing to comply 
 
 its members, and, therefore, may as 
 well contract with one of its own 
 members, as with other persons. It 
 follows, as a necessary consequence, 
 that such contracts must be construed 
 and carried into effect in the same 
 manner as contracts between other 
 parties, and that the votes and acts of 
 the corporation can have no effect to 
 deprive the plaintiff of rights which 
 he claims, not as a corporator, but as 
 a contractor with the corporation. 
 
 " As the damages are not assessed, 
 it may be proper to say a few words 
 upon that subject. We consider the 
 true effect of this agreement to be 
 this, to employ the plaintiff and to 
 pay him an annual salary during such 
 employment ; and the action is 
 brought for a breach of that promise. 
 The defendants have broken up their 
 establishment, and given the plaintiff 
 formal notice that they have no 
 further occasion for his services. 
 This discharges the plaintiff from his 
 obligation to serve them and to engage 
 in no other business, and puts him in 
 a condition to engage in any other 
 employment at his pleasure. This 
 being in violation of the defendants' 
 contract with the plaintiff, to employ 
 and pay him, gives him a claim for 
 damages. The measure of his dam- 
 ages is an indemnity for the loss he 
 has sustained by reason of not being 
 thus employed and paid, and the 
 damages are to be assessed on that 
 principle." See, also, Curran v. 
 State of Arkansas, 15 Uow. (U. S.) 
 304. 
 
 with the articles of incorporation, or 
 in deceiving the public or individuals 
 in reference to the means and liabili- 
 ties of the corporation, shall cause a 
 forfeiture of all the privileges con- 
 ferred by incorporation, and the courts 
 may proceed to wind up its business, 
 by an information in the manner pre- 
 scribed by law. Id. See, also, §g 1071, 
 1072.
 
 ()G4c 
 
 PltlVATK COKI'OKATIONS. 
 
 rii^litsof interested parties, and closing up of its affairs, tlio rights 
 of creditors would, perhaps, in most cases, he saved and protected 
 by the application of the liberal equitable doctrine now generally 
 recoo'iiized in such cases," that the property and funds of a cor-, 
 poration are held in trust for the j)ayment of creditors, and that 
 they may be followed for this purpose into the hands of any 
 party, save such as are hona fide purchasers without notice/ 
 
 Sec. 448. The act of congress in relation to national banks 
 provides in reference to dissolution as follows : "Any association 
 \i. e., banking association organized under the statutes of the 
 United States] may go into liquidation and be closed by the vote 
 of its shareholders owning two-thirds of the stock." ^ 
 
 This act provides in detail as to the mode of proceeding in case 
 of a dissolution ; the duties of the receiver appointed in such cases,* 
 and what is required to wind up a natioilal banking association.* 
 
 ^ Id. See, also, Pomerov v. Bank, 1 
 Wall. 23 ; McGoon v. Scales, 9 id. 23 ; 
 Muscatine Turn Verein v. Funck, 18 
 Iowa, 469 ; Crease v. Babcock, 10 Mete. 
 525 ; Grew v. Breed, id. 5G9 ; Lea v. 
 American, etc., R. Co , 3 Abb.Pr. (N.S.) 
 1 ; Stetson v. City Bank, I'd Ohio St. " 
 577; Herrou v. Vance, 17 Ind. 595; 
 Franklin Bank v. Cooper, 36 Me. 179 ; 
 Mariners' Bank v. Sewall, 50 id. 220 ; 
 Blake v. P. & C. R. Co., 39 N. H. 435. 
 
 2 Chicago, R.I. & P.R. Co. v. Howard, 
 7 Wall. 392 ; The People v. The Presi- 
 dent and Trustees of the College of 
 California, 38 Cal. 166 ; Wood v. Dum- 
 mer, 3 Mason, 308 ; Mumnia v. Poto- 
 mac Co., 8 Pet. 281 ; Currau v. State, 
 15 How. (U. S.) 304 ; Bacon v. Robert- 
 son 18 id. 480 ; Sum v. Robertson, 6 
 Wall. 277 ; Read v. Frankfort Bank, 
 23 Me. 318 ; Nathan v. Whitlock, 9 
 Paige, 152; Tinkham v. Borst. 31 
 Barb. 407 ; Gillett v. Moody, 3 N. Y. 
 479 ; State V. Bailey, 16 Ind. 46 : Adler 
 V. Milwaukee, etc., Co., 13 Wis. 57; 
 Hightower v. Thornton, 8 Ga. 486; 
 Nevitt V. Bank, etc., 6 S. & M. 513 ; 
 Paschall v. Whitsett, 11 Ala.(N.S.)471. 
 
 3 Rev. Stat of Q. S., 1873-4, tit. 62. 
 chap. 4, § 5220. The English Act, 25 
 & 26 Vict., chap. 89 ; Buckley, p. 263, 
 provides as follows : 
 
 "A company under this act may be 
 wound up voluntarily ; 
 
 " 1. Whenever the period, if any, 
 
 fixed for the duration of the company 
 by the articles of association expires, 
 or whenever the event, if any, occurs, 
 upon the occurrence of which it is 
 provided by the articles of association 
 that the company is dissolved, and the 
 company in general meeting has passed 
 a resolution requiring the company to 
 be wound up voluntarily. 
 
 * ' 2. Whenever the company has 
 passed a special resolution requiring 
 the company to be wound up volun- 
 tarily. 
 
 "3. Whenever the company has 
 passed an extraordinary resolution to 
 the effect that it has been proved to 
 their satisfaction that the company 
 cannot, by reason of its liabilities, 
 continue its business, and that it is 
 advisable to wind up the same." 
 
 * Id. See ii 234 et seq. ; Kennedy v. 
 Gibson, 8 Wall. 498 ; Bank of Bethel 
 V. Pahquioque Bank, 14 id. 383; 
 Bank v. Kennedy, 16 id. 19 ; In re 
 Piatt, Receiver, etc., 1 Ben. 534. 
 
 ^ It is provided for the winding up 
 of such associations as follows . 
 
 " Sec. 5226. Whenever any national 
 banking association fails to redeem in 
 lawful money of the United States 
 any of its circulating notes, upon de- 
 mand of payment duly made during 
 the usual hours of business, at the of- 
 fice of such association, or at its desig- 
 nated place of redemption, the holder
 
 Dissolution. 
 
 665 
 
 Sec. 449. Dissolution by the death of all the members. — Tt 18 a 
 recognized common-law doctrine tliat private cor])()rations become 
 
 may cause tlie same to be protested, 
 in oue package, by a notary public, 
 unless the president or cashier of the 
 association whose notes are presented 
 for payment, or the president or cash- 
 ier of the association at the place at 
 which they are redeemable, otTers to 
 waive demand and notice of the pro- 
 test, and, in pursuance of such offer, 
 makes, signs, and delivers to the party 
 making such demand an admission in 
 writing, statiug the time of the de- 
 mand, the amount demanded, and the 
 fact of the non-payment thereof. The 
 notary public, on making such protest, 
 or upon receiving such admission, shall 
 forthwith forward such admission or 
 notice of protest to the comptroller of 
 the currency, retaining a copy thereof. 
 If, however, satisfactory proof is pro- 
 duced to the notary public that the 
 payment of the notes demanded is 
 restrained by order of any court of 
 competent jurisdiction, he shall not 
 protest the same. When the holder 
 of any notes causes more than one 
 note or package to be protested on 
 the same day, he shall not receive pay 
 for more than one protest. 
 
 " Sec. 5237. On receiving notice that 
 any national banking association has 
 failed tj redeem its circulating notes, 
 as specified in the preceding section, 
 the comptroller of the currency, with 
 the concurrence of the secretary of 
 the treasury, may appoint a special 
 agent, of whose appointment imme- 
 diate notice shall be given to such as- 
 sociation, who shall immediately pro- 
 ceed to ascertain whether it has re- 
 fused to pay its circulating notes, and 
 if in default, be shall, within thirty 
 days after he has received notice of 
 such failure, declare the bonds depos- 
 ited by such association forfeited to 
 the United States, and they shall 
 thereupon be so forfeited. 
 
 " Sec. 5338. After default on the part 
 of an association to pay any of its cir- 
 culating notes has been ascertained 
 by the comptroller, and notice of for- 
 feiture of the bonds has been given by 
 him to tbe association, it shall not be 
 lawful for the association suffering 
 the same to pay out any of its notes, 
 discount any of its bills, or otherwise 
 prosecute the business of banking, ex- 
 
 84 
 
 ^cept to receive and safely keep money 
 belonging to it, and deliver special 
 deposits. 
 
 " Sec. 5229. Immediately upon de- 
 claring the bonds of an association 
 forfeited for the non-payment of its 
 notes, the comptroller sliall give no- 
 tice, in such manner as the secretary 
 of the treasury shall, by general rules, 
 or otherwise, direct, to the holders of 
 the circulating notes of such associa- 
 tion, to present them for payment at 
 the treasury of the United States ; 
 whereupon the comptroller may, in 
 liis discretion, cancel an amount of 
 bonds pledged by such association 
 equal at current market rates, not ex- 
 ceeding par, to the notes paid. 
 
 "Sec. 5330. Whenever the comp- 
 troller has become satisfied, by the 
 protest or the waiver and admission 
 specified in section 5236, or by the 
 report provided for in section 5337, 
 that any association has refused to 
 pay its circulating notes, he may, 
 instead of canceling its bonds, cause 
 so much of them as may be neces- 
 sary to redeem its outstanding notes 
 to be sold at public auction in the 
 city of New York, after giving 
 thirty days' notice of such sale to 
 the association. For any deficiency 
 in the proceeds of all the bonds of an 
 association, when thus sold, to reim- 
 burse to the United States the amount 
 expended in paying the circulating 
 notes of the association, the United 
 States shall have a paramount lien 
 upon all its assets, and such deficiency 
 shall be made good out of such assets 
 in preference to any and all other 
 claims whatsoever, except the neces- 
 sary costs and expenses of administer- 
 ing the same. 
 
 "Sec. 52ol The comptroller may, if 
 lie deems it for the interest of the 
 United States, sell at private sale any 
 of the bonds of an association shown 
 to have made default in paying its 
 notes, and receive therefor either 
 money or the circulating notes of the 
 association. But no such bonds shall 
 be sold by private sale for less tban 
 par, nor for less than the market value 
 thereof at the time of sale, and no 
 sales of any such bonds, either public 
 or private- shall be complete until the
 
 666 Pkivate Corporations. 
 
 dissolved, ipso facto, by the loss of all their members by death. 
 "A corporation," observes Mr. Brice, " perishes whether the whole 
 of its nicinl)crs have died out, or the whole of those wlio consti- 
 tute an integral essential part, provided there is no means of re- 
 pairing' the breach." ^ 
 
 The doctrine of dissolution in case of a destruction of an in- 
 tegral part has little, if any, application to private corporations 
 for pecuniary gain as created under general statutes in this coun- 
 try. It has been justly observed in reference to them, that " the 
 stockholders compose the company, and the managers, or direct- 
 ors and officers, are their agents, necessary for the management 
 of the affairs of the company, but not essential to its existence as 
 such, and not forming an integral part. The corporation exists 
 jye?' se so far as it is requisite to the maintenance of perpetual suc- 
 cession and the holding and preserving of its franchises. The 
 non-existence of the managers does not suppose the non-existence 
 of the corporation. The latter may be dormant ; its functions 
 may be suspended for want of the means of action, but the capac- 
 ity to restore its functionaries by means of new elections remain. 
 When, therefore, the election of its managers, directors or other 
 officers, is by charter to be conducted solely by the stockholders, 
 the charter or act of incorporation not requiring the managers, 
 directors or other officers to preside at or do any act in rela- 
 tion to the election, a failure to elect such officers on the charter 
 day will not dissolve the corporation, but the election may take 
 place on the next charter day without any new legislative aid." ^ 
 
 transfer of the bonds shall have been sixty-two, fifty-one hundred and sixty- 
 made with the formalities prescribed three, and fifty-one hundred and sixty- 
 by sections fifty -one hundred and four." Rev. Stat., U. S., 1874. 
 
 ' Brice's Ultra Vires, 655, 65G ; cit- (Miss.) 478 ; Phillips v. Wickham, 1 
 
 ing Rex v. Morris, 4 East, 17. See, Paige, 590; Evarts v. Killing worth 
 
 also, American authorities; Penobscot Man. Co. ,20 Conn. 447; Commonwealth 
 
 Boom Co. v. Lamson, 16 Me. 224 ; Bos- v. Culien, 13 Penu. St. 133 ; Lowber v. 
 
 toil Glass Man. Co. v. Langdon, 24 New York, 5 Abb. Pr. 325 ; Clarke v. 
 
 Pick. 52; Phillips v. Wickham, 1 City of Rochester, id. 107 ; Russell v. 
 
 Paige, 596 ; Canal Co. v. Railroad Co., McLellan, 14 Pick. 63 ; Knowltou v. 
 
 4 G. & J. 1 ; Mclntire Poor School v. Ackley, 8 Cush. 94; Caliill v. Kalama- 
 
 Zanesville C. Co., 9 Ohio, 203. zoo Ins. Co., 2 Doug. (Mich.) 140. Mr. 
 
 Mlose V. Turnpike Co., 3 Watts, Dillon observes :" In tliis respect [the 
 
 46 ; Wier v. Bush, 4 Little, 433; Nash- failure to elect officers] municipal cor- 
 
 ville Bank v. Patway, 3 Humph. 524 ; porations resemble ordinary private 
 
 Smith v. Natchez Samb. Co., 3 How. corporations which exist per se, and
 
 Dissolution. fi6T 
 
 The death of all the nieiubers can hardly be possible with a 
 joint-stock corporation, as the stock would on the decease of the 
 owner be represented by and vested in some one who would 
 become a member of the corporation by virtue of such stock, and 
 entitled to all the rights and privileges of such former member. 
 
 Sec. 450. Effect of dissolution generally at common law. — According 
 to the common law a corporation of any kind that was dissolved, 
 or ceased as such to exist for any cause, was considered as civilly 
 dead, and could no more act by its agents or otherwise than a 
 natural person under the same circumstances. The result, too, of 
 such civil death by the ancient common law was that all lands 
 held b}' it at the time reverted to the grantor or his heirs, as it was 
 held to be a condition implied in all grants to corporations that if 
 for any cause the grant failed, by death or otherwise, the lands 
 granted should revert ; ' and debts due to or from it were ex- 
 tinguished, as there were no heirs or representatives of a corpora- 
 tion. Leases were rendered void because of the reversion of the 
 lands ; ^ lands held in trust for charitable purposes were lost ; 
 suits pending by or against it were abated ; and the personal 
 property became vested in the king,^ and, in this country, in the 
 people.* 
 
 " These consequences of the dissolution of a corporation," ob- 
 serves Mr. Dillon, " attached to all corporations, eleemosynary, 
 municipal and private ; and since this doctrine has, in this coun- 
 try, been generall}' rejected as to private corporations organized 
 for pecuniary profit, and rests upon no foundation in reason or 
 justice, it may perhaps be safely affirmed that it Avould not, on 
 full consideration, be applied to the dissolution of a municipal 
 
 consist of the stockholders wlio com- may suspend the functions, but will 
 
 pose the company. The officers are not dissolve the corporation." Dill, 
 
 their agents or servants, but do not on Mun. Corp. ,§110; People v. Fair 
 
 constitute an integral part of their cor- bury, 51 111. 149. 
 poration, the failure to elect whom 
 
 1 Co. Litt. 13 b, 103 b; Knight v. Greeley v. Smith, 3 Story, 657 ; Mer- 
 
 Wells, 1 Sut. 519 ; Rex v. Pasmore, 3 rill v Suffolk Bank, 31 Me. 57 ; Ingra- 
 
 T. R. 199; White v. Campbell, 5 ham v. Terry, 11 Humph. 573; Salt- 
 
 Humph. 38 ; Bingham ■■". Weiderwax, marsh v. Planters' Bank, 17 Ala. 761. 
 
 1 N. Y. 509; 2 Kyd on Corp. 516; 2 Contra, Lindell v. Benton, 6 Mo. 361. 
 Kent's Com. 307; 4Blackst. Com. 484. 3 jd. 
 
 '^ Ang. & Am. on Corp. ,§ 779 ; citing ■* 3 Kent's Com. 307.
 
 668 
 
 Private Corpokations. 
 
 corporation by an absolute and unconditional repeal of its charter, 
 or (if that may be done) to the case where tlic charter of such 
 corporation is forfeited by judicial sentence." ^ If in the case of 
 municipal corporations, a court of chancery will treat the corpo- 
 rate assets as a trust fund, in case of the dissolution of a corpora- 
 tion by legislative action, and will assume the execution of the 
 trust, or see that it is properly executed, as has been noticed," the 
 same rule ought to prevail in cases of private corporations I'or 
 pecuniary gain. And the tendency of recent opinions seems to 
 support this view ; and to sustain the doctrine that the sui-plus 
 assets, after the satisfaction of the claims of creditors and the 
 payment of expenses, even in the absence of statutory provisions 
 on the subject, belong to the stockholders ; that lands conveyed to 
 such a corporation for a full consideration in fee do not revert to 
 the o-rantor : and that the doctrine of the old common law, in 
 such cases as to reversion and forfeiture of the corporate property, 
 if applicable at all, is not apjDlicable to private corporations for 
 pecuniary emolument.^ 
 
 1 Dill, on Mun. Corp., § 113; Bacon 
 V.Robertson. 18 How. (U. S.) 480; 
 Girard v. Philadelphia, 7 Wall 1 ; 
 Mumma v. Potomac Company, 8 Pet. 
 281 ; Curran v. Arkansas, 15 How. (U. 
 S.) 312 ; 2 Kent's Com. 307, note ; Coul- 
 ter V. Robertson, 24 Miss. 278 ; County 
 Commissioners v. Cox, 6 Ind. 403 ; 
 State V. Trustees, etc., 5 id. 77 ; Vin- 
 cennes University v. Indiana, 14 How. 
 (U.S.) 268; Owen' V.Smith, 31 Barb. 641; 
 Commonwealth v. Roxbury, 9 Gray, 
 510, note. 
 
 2 Girard v. Philadelphia. 7 Wall. 1 ; 
 Moutpelier v. East Montpelier, 29 Vt. 
 12; 27 id. 74. 
 
 ^ Bacon v. Robertson, 18 How. (U. 
 S ) 480, in which Mr. Justice Camp- 
 BEi.L observes : "The common law of 
 Great Britain was deficient in supply- 
 ing the instrumentalities for a speedy 
 and just settlement of the affairs of au 
 insolvent corporation, whose charter 
 had been ibrfeited by judicial sentence 
 The opinion usually expressed as to 
 the effect of such a sentence was un- 
 satisfactory and questioned. There 
 had been instances in (?reat Britain of 
 the dissolution of public or ecclesias- 
 tical corporations i)y the exertion of 
 public authority, or as a consequence 
 of the death of their members, and 
 parliament, and the courts had af 
 
 firmed, in these instances, that the 
 endowments they had received from 
 the prince of pious founders would 
 revert in such a case." See, also, Stat. 
 deterris Templariorum, 17 Edw. II.; 
 Dean and Canons of Windsor, Godb. 
 211 ; Johnson v. Norway, Winch. 37; 
 Owen, 73; 6 Vin. Abr. 280. Mr. 
 Green, in his note to Brice's Ultra 
 Vires, p. 85, observes . "Modern leg- 
 islation has modified the odious rule of 
 the common law, that upon the disso- 
 lution of a corporation, its remaining 
 real estate unsold reverts to the grantor 
 and his heirs, and the courts in simi- 
 lar spirit hold that where a corpora- 
 tion is authorized to acquire a fee- 
 simple to lands belonging to private 
 persons, for public use, and such ac 
 quisition is had and compensation ac- 
 cepted, no reversionary estate remains, 
 but tbe property may be used for any 
 purpose, or may be disposed of by the 
 corporation." Heyward v. Mayor, 
 7 N. Y. 314 ; Rexford v. Knight,' 11 
 id. 308 ; Brooklyn Park Com. v. Arm- 
 strong, 3 Lans.'429 ; S. C, 45 N. Y. 
 234; Dinirley v. City of Boston, 100 
 Mass. 544 ; DeVaraigne v. Fox, 2 
 Blatchf. 95 ; Commonwealth v. Fisher, 
 1 P. & W. 463 ; Plitt V. Cox, 43 Penu. 
 St. 486 ; Haldeman v. Peun. li. Co., 50 
 id. 425.
 
 Dissolution. C69 
 
 Sec. 451. Effect of dissolution upon creditors. —Can the locrisla- 
 tiire, by a repeal of tlic charter of a prix-ate corporation, nnder 
 authority so to do, affect the rights of creditors of such corpora- 
 tion ? ' The modern doctrine on tliis question is, tliat the disso- 
 lution either by legislative act or by judicial sentence cannot im- 
 pair the obligations of a contract between the corporation and its 
 creditors, any more than the death of a private and natural per- 
 son can affect his contracts with others. " This doctrine," ob- 
 serves Mr. Dillon, " is based npon two grounds : First. Tlie 
 obligation survives, and the creditors may enforce their claims 
 against the property belonging to the corporation which has not 
 passed into the hands of hona fide purchasers. Second. Every 
 creditor is presumed to contract with refei-ence to a possibility of 
 a dissolution of the corporate body." The former common-law 
 doctrine in reference to the disastrous effects of a dissolution, and 
 the civil death of ^ corporation, has been the subject of just criti- 
 cism ; and it is doubtful if it would now be applied to any class of 
 corporations.'' The doctrine now, as we have frequently observed, 
 is, that the property and assets of a corporation are held in 
 trust. First. For the payment of creditors. Secondly. For divis- 
 ion among the stockholders.' This right of creditors and stock- 
 holders is based not only upon natural justice and manifest equity, 
 
 1 Dill, on Mun. Corp., § 115, note 1 ; Eq. 345 ; Hopkins v. Whitesides, 1 
 
 citing Mumma v. Potomac Company Head (Tenn.), 31 ; Bank v. Lockwood, 
 
 (holding that on sci. fa. a judgment 2 Harr. (Del.) 8; Robinson v. Laue^ 
 
 could not be revived, or costs ad- 19 Ga. 337 ; Muscatine Turn Verein v. 
 
 judged against a corporation legisla- Funck, 18 Iowa, 4(59; Owen v.Smith, 31 
 
 tively annulled), 8 Pet. (U. S.) 281, Barb. 641; Welch v. Ste. Genevieve, 1 
 
 1834. In the case of Port Gibson v. Dill. (C. C.) 130. 
 
 Moore, 13 Sm. & Marsh, 157 (1849), it '^ Id. See, also, James v. Woodruflf, 
 
 was held, indeed, that the repeal of 2 Den. 574; Tinkham v. Borst, 31 
 
 the charter of an indebted municipal Barb. 407 ; Butterworth v. O'Brien, 24 
 
 corporation dissolved it; that such How. Pr. 438; Adler v. Milwaukee, 
 
 dissolution extinguished debts to and etc., Co., 13 Wis. 57; Lum v. Robert- 
 
 from the corporation ; and that a sub- son, 6 Wall. 277 ; New Albany v. 
 
 sequent act reincorporating the place Burke, 11 id. 96 ; Burke v. Smith, 16 
 
 did not make it liable for a debt exist- id. 390 ; Sawyer v. Hoag, 17 id. 610 ; 
 
 ing anterior to the act repealing its State v. Bailey, 15 Ind. 46 ; Bacon v. 
 
 charter. The court overlooked the Robertson, 18 How. 480; Curran v. 
 
 constitutional provision protecting con- State of Arkansas, 15 id. 312. 
 tracts, and the case as to the effect of ^ See ante, chap. 19. For additional 
 
 a dissolution upon the rights of credit- authorities see Lum v. Robertson, 6 
 
 ors seems to conflict with those above Wall. 277 ; New Albany v. Burke, 11 
 
 cited. See, further, as to extinguish- id. 96; Burke v. Smith, 16 id. 390; 
 
 ment of debts by dissolution of cor- State v. Bailey, 16 Ind. 46 ; Bank of 
 
 poration, Malloy v. Mallett, 6 Jones Salem v. Caldwell, id. 469.
 
 670 Pkivatb Coeporations. 
 
 but it has recently lieen held that it is protected by the provisions 
 of the constitution of the United States.' And it may be ob- 
 served generally, that in case of a lawful contract resting upon 
 authority conferred by statute, the repeal of such statute in a 
 lawful manner could not affect the validity of such contract. If 
 such contracts are legal when made, they could not be affected by 
 such a repeal.'' And this doctrine has application to contracts 
 entered into by private corporations, by virtue of authority vested 
 in them, and the corporations are subsequently dissolved by the 
 legislature, by a repeal of the charter or other revocation of the 
 franchise conferred, where authority for this purpose is reserved 
 in such legislature. 
 
 Sec. 452. Forfeiture not the subject of collateral inquiry. — The 
 general doctrine is, that grounds of forfeiture or for dissolution of 
 a corporation cannot be shown in a collateral proceeding. The 
 question as to the right to exercise corporate functions, or to con- 
 tinue the use of corporate powers, is generally held to be one jn 
 which the state only is interested, and that she may waive the 
 right of forfeiture ; and if proceedings are had to determine this 
 particular question, they must be instituted by the legal officer of 
 the state ; or, if l)y another person, leave of court is usually re- 
 quired, as we have seen ; and that this is granted only on a show- 
 ing of facts, which authorize such proceeding. But the mode of 
 proceeding in such cases is usually a matter of statutory regula- 
 tion. If a party contracts with a corporation, in the absence of 
 fraud or bad faith in the matter, he is usually estopped from de- 
 nying its legal existence.^ 
 
 ' Curran v. State of Arkansas,lo How. Dill. (C. C.) 523; Muscatine v. Railroad 
 (U. S ) 312 ; 2 Kent's Com. 307, note a; Co., id. 536; Soutter v. Madison, 15 
 Hightovver v. Thornton, 8 Ga. 486; Wis. 30; Western Sav. Bank v. Phil- 
 Bacon V. Robertson, 18 id. 480; Liim adelphia, 31 Penn. St. 175 : Curran v. 
 V. Robertson, 7 Wall. 277 ; New Al- Arkansas, 15 How. (TJ. S.) 312 ; Bacon 
 bany v. Burke, 11 id. 96; Burke v. v. Robertson, 18 id. 480; Coulter v. 
 Smith, 16 Ind. 390. See, also, Salem Robertson, 24 Miss. 278; Gelpcke v. 
 V. Caldwell, 17 id. 469, where it was Dubuque, 1 Wall. 175 ; Welch v. Ste. 
 held that a subscriber to an insurance Genevieve, 1 Dill. (C. C.) 130 ; Smith 
 company could not, in a suit by an v. Appleton, 19 Wis. 468 ; Blake v. 
 assignee on his subscription note, offset Railroad Co., 39 N. H. 435 ; 2 Kent's 
 a claim against the company purchased Com. 307. 
 by him. " s Wood v. Coosa, etc., R. Co., 32 Ga. 
 
 2 Van Hoffman v. Quincy, 4 Wall. 273 ; Bank of Mo. v. Snelling, 35 Mo. 
 
 535 ; Woodruff v. Trapnall, 10 How. 190 ; State v. Fourth New Hampshire 
 
 (U. S.) 206 ; Lansing v. County Tr., 1 Turnp. Co., 15 N. H. 162 ; S. P., Peirce
 
 Dissolution. 671 
 
 Sec. 453. When corporate existence maybe inquired into collaterally. 
 
 In certain cases, liowever, it has been lield tliat the corporate ex- 
 istence maybe inquired into in a collateral proceeding. Thus, in 
 a proceeding in cliancery against a corporation, to set aside a con- 
 veyance of real estate alleged to have been obtained by the fraud 
 and misrepresentation of the company in relation to its existence 
 as a corporation, it has been held that the fact whether or not the 
 company ever had a corporate existence so as to enable it to take 
 and hold property may be inquired into ; and that if a company 
 professing a corporate existence which it does not possess fraudu- 
 lently acquires for a particular pur})0se the propert}^ of another, 
 and conveys the same, the sufficiency of such conveyance or 
 transfer ma}^ be inquired into collaterally. And that if a corpo- 
 ration by its own acts has ceased to exist, or has suffered or per- 
 mitted acts which destroy its existence, it is as fully and entirely 
 dissolved as if declared so to be by the judgment of a competent 
 court ; that where a corporation has ceased to have an existence 
 as a legal and necessary consequence of certain acts, and a party 
 claims that he has been injured thereby, or that certain benefits 
 result to him therefrom, he may have his remedy without first 
 instituting direct legal proceedings to have the corporation de- 
 clared dissolved by the court.' 
 
 V. Somersworth, lOid. 369, Mechanics' v. Bank of Alexandria, 10 G. & J. 346; 
 
 Building Assoc, v, Stevens, 5 Duer, Hamilton v. Annapolis, etc., K. Co., 1 
 
 676; Duke v. Caliawba Nav. Co., 16 Md. Ch. 107; Cahill v. Kalamazoo 
 
 Ala. 373; Pearce v. Olney, 20 Conn. Mut. Ins. Co., 2 Doug. 121 ; Sevvall's 
 
 544; Young v. Harrison. 6 Ga. 130; Falls Bridge v. Fisk, 23 N. H. .171 ; 
 
 Baker v. Backus. 32 111. 79 ; Williams Towar v. Hale, 46 Barb. 361 ; McCon- 
 
 V. Bank of 111., 6 id. 667; Brookville, aliy v. Centre Turnp. Co., 1 Penn. 426; 
 
 etc., Co. V. McCarty, 8 Ind. 392 ; Stoops 16 S. & R. 140 ; Dyer v. Walker, 40 
 
 V. Greensburgh Plank. R. Co , 10 id. Penn. St. 157 ; Crump v. U. S. Mining 
 
 47; Bank of Galliopolis v, Trimble, 6 Co., 7 Gratt. 352; Arthur v. Commer- 
 
 B. Monr. 599; Bank of Mo. v. Mer- cial Bank, 17 Miss. 394; Bohanuon v. 
 
 chants' Bank, 10 Mo. 132 ; Johnson v. Binns, 31 id. 355. 
 Bentley, 16 Ohio, 97 ; Planters' Bank 
 
 * Carey v. The Cincinnati, etc., R. cannot thus relieve itself (by merger 
 
 Co., 5 Iowa, 357. See, also, Phillips in a new organization), or perhaps the 
 
 V. Wickham, 1 Paige, 595 ; Briggs v. corporators individually, from respon- 
 
 Penniman, 8 Cow. 387; Canal Co. v. sibility to those to whom it or they 
 
 Railroad Co.. 4 G. & J. 1 ; Slee v. may be indebted, but it may by the 
 
 Bloom, 19 Johns. 456 ; 2 Kyd on Corp. act become so situated as to be es- 
 
 467; King v. Passmore, 3 T. R. 244; topped from claiming that it remains 
 
 1 RoUe's Abr. 514, 4 Com. Dig. 273. undissolved." But see Anderson v. 
 
 In the case first above cited the court Newcastle R. Co., 12 Ind. 376; Barrett 
 
 say : "It is true that it may not, and v. Mead, 10 Allen, 337.
 
 672 Private Corporations. 
 
 CHAPTER XXL 
 
 MANDAMUS. 
 
 Sec. 454. The writ, and its functions. 
 
 Sec. 455. The writ in this country. 
 
 Sec. 456. When issued, discretion of the court. 
 
 Sec. 457. Practice and proceedings. 
 
 Sec. 458. Office of the writ to compel the performance of duty. 
 
 Sec. 459. Concurrence necessary to authorize the issuing of the writ. 
 
 Sec. 460. When it will not be issued. 
 
 Sec. 461. Resemblance and distinction between, and injunction. 
 
 Sec. 462. Against private corporations or its officers. 
 
 Sec. 463. Corporations may invoke its aid. , 
 
 Sec. 464. To compel inspection or delivery of corporate books and papers. 
 
 Sec. 465. As a remedy against corporations. 
 
 Sec. 466. To whom the writ should be directed, and service. 
 
 Sec. 454. The writ, and its functions. — A writ oi mandamus was, at 
 common law, a prerogative writ, issuing from the court of queen's 
 bench, in which, by a fiction of law, the sovereign was considered 
 to be personally present. It commanded a duty to be performed, 
 and was instituted to prevent a failure of justice, as where the law 
 enjoined a duty upon a corporation or a corporate officer, in the 
 performance of which the party claiming the writ was interested, 
 and by the non-performance of which he would be injured, and 
 where the law furnished no other specific or adequate remedy ; in 
 which case the writ might be obtained, commanding the party, 
 in the name of the sovereign authority, to perform the duty re- 
 quired by law and particularly pointed out in the writ.^ 
 
 Sec. 455. The writ in this country. — The early practice, at com- 
 mon law, relating to this writ and its return, has been considera- 
 bly changed and regulated by statutory provisions ; but wliere it 
 is regulated by statute the general principles of the common law 
 
 1 Add. on Torts (Wood's ed.), ^ 1505; wich, etc., 1 Str. 55; Reg. v. Powell. 1 
 
 Reg. V. Chichester, etc., 29 L. J. Q. B. Q. B. 360; Rex v. Curghev, 2 Burr 
 
 23; Briggs, ex parte, 28 id. 272 ; Rex 782 ; Reg. v. Hereford, 3 Salk. 701. 
 V. Barker, 3 Burr, 1265; Rex v. Nor-
 
 Mandamus. 673 
 
 relating to it are usually retained. The remedy under statutes 
 can, generally, only be resorted to, as at common law, to prevent 
 a failure of justice, as where there is no other adequate legal rem- 
 edy, to enforce the performance of the duty, in the performance 
 of which the complaining party is interested.^ 
 
 The writ is issued in the name of the sovereign authority and 
 as will be shown more particularly hereafter, on an application 
 made therefor, under oath, by petition or declaration, setting forth 
 the facts that entitle the party to the writ. All the original ad- 
 vantages and benefits of the writ, as a remedy at common law, 
 are usually provided for by statute ; and it issues as a command 
 from sovereign authority.'' 
 
 Sec. 45 6. when issued ; discretion of the court.— At common law 
 the writ was not a matter of absolute right, but was only issued 
 at the discretion of the court. Such is still the general doctrine, 
 or at least, even under statutory provisions, the issuing of it rests, 
 in a measure, in the discretion of the court. In order to entitle a 
 party to the writ, it must appear that there is a right to demand 
 it ; and especially that there is no other adequate or specific rem- 
 edy. But if a party shows himself entitled to it, it would be an 
 error for the court to refuse it, which would be corrected on ap- 
 peal. If, however, it does not appear that the claimant has a legal 
 right to the remedy, it should not be granted ; nor should it be 
 granted by consent, if there is reason to believe that there has 
 been a collusion between the parties to secure it.^ 
 
 Sec. 457. Practice and proceedings. — The earlier practice to secure 
 the benefit of this remedy was by motion based upon affidavit, 
 for an order to show cause why the writ should not issue. The 
 
 ' Arrint^ton v. Van Houton, 44 Ala. Police, 26 N. Y. 316 ; School Inspectors 
 
 284; Reading v. Commissioners, 11 v. The People, 20 111. 580 ; The People 
 
 Penn. St. 196; People v. Thompson, v. Hatch, 83 id. 134; City of Ottawa 
 
 25 Barb. 75; Fitch v. McDiarmid, v. The People, 48 id. 240. 
 
 26 Ark. 482 ; State v. McCrillus, 4 * State v. Burbank, 22 La. Ann. 379 ; 
 Kans. 2.30. Parker v. Anderson, 2 P. & H. (Va.) 
 
 '^Commonwealth v. Dennison, 24 38; People v. Supervisors, 12 Barb. 
 
 How. (U. S.)66; Ex parte Gonw&y , '^ 217; Trustees v. State, 11 Ind. 205. 
 
 Ark. 802 ; Arberry v. Beavers, 6 Tex. See, also, Arrington v. Van Houton, 
 
 457; Oilman v. Bassett, 33 Conn. 298 ; 44 Ala. 284 ; Reading v. Commission, 
 
 Kendall V. The United States, 12 Pet. ers, 11 Penn. St. 196; People v. 
 
 527. But in New York and Illinois it Thompson, 25 Barb. 73 ; Fitch v. Mc- 
 
 has been held to retain its prerogative Diarmid, 26 Ark. 482 ; McBane v. The 
 
 character. People v. Board of Met. People, 50 111. 503. 
 
 85
 
 674 Private Corpoeations. 
 
 hearing on the motion was usually ex parte, and without any 
 notice to the party against whom it was sought. The order, if al- 
 lowed, was served upon the defendant or respondent, and required 
 him to ajjpcal at a certain time and show cause against the issuing 
 of the writ, at which time the respondent had an opportunity to 
 be heard, and to controvert the relator's statements by counter 
 affidavits. 
 
 The general American practice is to file a petition or complaint, 
 under oath, in the manner of commencing a common suit, asking 
 for the writ, and in which, as at common law, the plaintiff must 
 aver facts sufficient to entitle him to the writ. These may be con- 
 troverted by the defendant. 
 
 The proceeding is in many states like an ordinary civil action, 
 the process only issuing after a hearing of the case and a judgment 
 of the court to that effect ; but it is, -perhaps, usually provided 
 by statute that the court or judge may make such temporary 
 orders as may be necessary to protect the rights of the plaintiff 
 until the case is finally decided. The practice, however, varies 
 under the statutes of the different states. In some, the practice is 
 to grant an alternative writ on an ex jparte hearing, if a prima 
 facie case therefor is made out, in which case the alternative writ 
 stands in the place of a petition or declaration under the other 
 practice; and in either case they would be subject to a motion 
 to quash, or a demurrer, according to the practice in those respects 
 prevailing in the different states.' 
 
 Sec. 4-58. Office of the writ, to compel the performance of duty. — 
 It may be affirmed as a principle universally recognized, that the 
 proper office and function of the writ is only to compel the per- 
 formance of duties that are manifest. Where there is a discretion 
 vested in an individual, officer, or corporation, as to the mode or 
 manner of acting in the performance of a duty imposed b\' law, 
 the writ cannot be obtained to interfere with that discretion, 
 althongli it may require it to be exercised." 
 
 ' Moses on Mandamus, 203. 5 Ga. 522; Weeden v. Town Council. 9 
 
 3 Appling- V. Bailey, 44 Ala. 3B3; Li V- R. I. 128 ; Mayor v. Rainwater, 47 
 
 insrstoa V. Dorg-enois, 7 Cranch (U. S.), Miss. 547 ; People v. Judge, etc., 24 
 
 577 ; Ek parte Crane, 5 Pet. 190 ; Mat- Mich. 408 ; Ex parte Newman, 14 Wall. 
 
 ter of Xabor, 7 Ala. 459 ; Dixon v. 152. 
 
 Field, 10 Ark. 243 ; Manor v. McCall,
 
 Mandamus. G75 
 
 And in some cases corporations and officers liave been reqiiired 
 by mandamus to perform their duties as required by law, even 
 where there was another remedy.* But this, as will hereafter 
 be noticed, is not the general I'ulo. 
 
 Nor will the fact that proceedings in a court of equity have 
 been commenced for the same purpose, or that relief might be 
 obtained in that court, necessarily defeat the right of a party to 
 proceed at law, or furnish a reason for denying the writ.^ But it 
 will not be issued where the officer, corporation, or tribunal, 
 against which it is claimed, has not the means to do the act 
 required; or to compel the doing of an act, the doing or not doing 
 of which rests in the discretion of the officer, corporation, or tri- 
 bunal, against which it is claimed ; or where they have not the 
 means or power to do the act required ; ' or where the doing of 
 the act is physically or legally impossible; or where the power to 
 perform it is not complete, but depends upon the action or 
 approval of some other person or authority ; * or where it will 
 involve the party in litigation, the result of which may be doubt- 
 ful ; ^ or where the act would be unlawful.^ 
 
 But, where a discretion is allowed to such officer, corporation, 
 or inferior tribunal, the refusal to exercise such discretion may 
 constitute a proper case for the granting of the writ, which will 
 compel action, but not direct the mode of action or interfere in 
 any manner with the discretion which the party may be author- 
 ized to exercise." It may issue to compel a municipal cor- 
 poration to levy a tax to pay a judgment against it;* to 
 
 ' Mansfield v. Fuller, 50 Mo. 338; 11 Pick. 189; State v. Lynah,3 McCord 
 
 State V. Bridgman,8 Kans.4o8; Buck v. (S. C), 170. 
 
 Lockport, 6 Lans. 253. '' Ball v. Lappius, 3 Ore^. 55; Silver- 
 
 - People V. Chicago, 53111.424; Hard- thorne v. Railroad Co., 33 N. J. 173 ; 
 
 castle V. Maryland, etc., R. Co.,33Md. Ackerman v. Desha Co.. 27 Ark. 457. 
 
 y2. * State V. Perrine, 34 N. J. 255. 
 
 3 State V. Burbank, 33 La. Ann. 318; ^ joi^QgoQ y. Lucas, 11 Humph. 
 
 Ex parte South, etc., v. Railroad Co., (Tenn.) 306. 
 
 44 Ala. 64; Ex parte Farrington, 3 ' McDiarmid v. Fitch, 37 Ark. 106; 
 
 Cow. 407 ; Black v. Auditor, 36 Ark. McMuUin v. State, 36 id. 613 ; State v. 
 
 237; State v. Warmoth, 33 La. Ann. Wannoth, 33 La. Ann. 76; East Bos- 
 
 76 ; Swan v. Gray, 44 Miss. 393 ; People ton Ferry Co. v. Boston. 101 Mass. 488; 
 
 V. Easton,13 Abb. Pr. (X. S.) 159 ; Sey- Commissioners v. Philadelphia, 3 
 
 mour V. Ely, 37 Conn. 103; Wells v. Brewst. 596; Ex parte South, etc., 
 
 Stackhouse. 17 N. J. 311 ; Ex parte R. Co., 44 Ala. 654 ; 3 Add. on Torts 
 
 Decker,6 Cow. 59 ; People v. Jameson, (Wood's ed.), 731. n. 1. 
 
 40 111 93; St Louis v. Kean, 18 B. « U. S. v. Keokuk, 6 Wall. 514; 
 
 Monr. 9: Glasscock v. Commission- Walkley v. Muscatine, id. 481. 
 era, etc., 3 Tex. 51 ; Gray v. Bridge,
 
 676 Pkivate Corporations. 
 
 compel assessors to correct an erroneous assessment ; * to compel 
 a railroad company to build and keep in repair bridges where tlie 
 railroad crosses a highway;'' to make the crossing of rivers or 
 other water-courses, or perform any acts in the construction of 
 their road, prescribed by the charter, and affecting public or indi- 
 vidual rights ; ^ to restore an officer to his office when he has been 
 removed therefrom, and the facts do not justify such removal, or 
 are, not clearly established ; * to restore a member of any society 
 to his menibership, from which he has been wrongfully expelled ; 
 to compel an officer to keep his office at tlie place designated by 
 law ; ° to compel an officer who by law is required at the close 
 of his duties to return his books to another officer to discharge 
 that duty ; ' to compel the incumbent of an office to deliver up 
 papers, property and insignia of his office to his successor when 
 the claim of the successor thereto is clear ; * to compel any public 
 officer to discharge a ministerial duty imposed upon him by 
 law ; * to compel the registrar of deeds to record a deed required 
 to be recorded in his office ; ^^ to compel a town committee to pay 
 the land damages to land-owners whose land may be taken for a 
 highway ; ^^ to compel commissioners appointed to assess taxes for 
 a specific purpose to assess such tax ; '^ to compel a city council to 
 appropriate money to pay certain expenses authorized by the legisla- 
 ture ; ^^ to compel the mayor and aldermen, or other board clothed 
 with the requisite power, to carry out the specified purposes and 
 perform the specific duties imposed upon them by law;^* to 
 compel trustees to admit children, entitled so to do, to attend the 
 public schools ; '^ to compel a board of canvassers to meet 
 
 'People V. Olmsted, 45 Barb. 644. « Salter v. Belding, 24 Vt. 658; 
 
 « People V. Troy, etc., R. Co., 37 Church v. Slack,? Cush. 226 ; Sudbury 
 
 How. Pr. 437. v. Stearns, 21 Pick. 148. 
 
 3 State V. North Eastern R. Co., 9 » Ney v. Richards, 15 La. Ann. 603; 
 
 Rich. (S. C.j 247. Page v. Hardin, 8 B. Monr. 648: 
 
 * Dew V. Judges, 3H. & M. (Va.) 1 ; United States v. County Co., 1 Morris 
 People V. Board of Police, 35 Barb. (Iowa), 31. 
 
 531 ; State v. Common Council, 9 Wis. '" Strong's Case, Kirby (Conn.), 345. 
 254. 11 Miuhiunah v. Haines, 29 N. J. L, 
 
 * Barrows v. Massachusetts Med. 388. 
 
 Soc, 12 Cush. 402 ; Roehler v. Aid i^ People v. Williams, 51 111. 57. 
 
 Soc, 22 Mich. 86. And see People i^ Commissioners v. Philadelphia, 3 
 
 V. Medical Society of Erie, 32 N. Y. Brewst. (Penn.) 596. 
 
 187. 1* East Boston Ferry Co. v. Boston, 
 
 « State V. Saxton. 4 Wis. 27. 101 Mass. 488. 
 
 ' McDiarmid v. Fitch, 27 Ark. 106. '^ State v. Duffy, 7 Nev. 342.
 
 Ma^^'daaius. 677 
 
 and make complete cauvass of all the returns received by them ; ' 
 to compel a judge of an inferior court to sign a bill of excei> 
 tions in a case tried before him,^ or to make up a record and give 
 a judgment thereon, so that a writ of error may be brought ; ' to 
 compel a judge to sign a judgment rendered by his predecessor;* 
 to compel a judge to enter a judgment on the report of a referee ; * 
 to compel a clerk to issue execution on a judgment ; ° and to 
 compel all officers, corporations and inferior tribunals, to perform 
 all ministerial duties and specific acts imposed upon or required 
 of them by law.' 
 
 Sec, 459. Concurrence necessary to authorize the issuing of the writ. — 
 
 The general rule in reference to mandamus is, that to warrant 
 the nse of the remedy there must be a concurrence of the follow- 
 ing things, namely, that there is no otiier adequate legal remedy 
 by which the specific performance of the duty, imposed npon the 
 officer, corporation, or inferior tribunal, can be enforced ; ^ that 
 the duty can be enforced in a manner not to interfere with the 
 discretion of the party against whom it is sought, when such dis- 
 cretion is vested in such j)arty ; ' and that the plaintiff or relator 
 has a clear legal right to the performance of the duty sought to 
 be enforced.^" 
 
 Sec. 460. where it will not be issued. — We have referred to the 
 circmnstances and cases where it would be proper to allow the 
 
 * Florida v. Gibbs, 13 Fla. 55. not be issued wliere the claim is dis- 
 2 Porter v. Harris, 4 Call. (Va.) 485 ; puted and its validity controverted. 
 
 People V. Judges, etc. , 1 Caines (N. ''King v. Water- Works Co., 6 Ad. 
 
 Y.), 511; State v. Hull, 3 Coldw. & E. 355; People v. Supervisors, etc., 
 
 (Tenn.)255; People v. Pearson, 3 111. 13 Barb. 27 ; Tarver v. Commission- 
 
 189 ; Ex parte Crane, 5 Pet. 190. ers' Court, 17 Ala. 527 ; Commonwealth 
 
 '^ Ex parte Bradstreet, 7 Pet. 634. v. Rosseter, 2 Binn. 360. 
 
 * Life Ins. Co. v. Wilson, 8 Pet. ^ State Nicholson Pavement Co. v. 
 291. Mayor. 35 N. J. 396; People v. Eas- 
 
 s Russell V. Elliott, 2 Cal. 245. ton, 13 Abb. Pr. (X. S.) 159; Peo- 
 
 « People V. Loucks, 28 Cal. 68. pie v. Supervisors, 12 Barb. 217 ; Rail- 
 
 ' Nelson v. Justices, etc., 1 Coldw. road Co. v. Clinton Co., 1 Ohio St. 77. 
 
 (Tenn.) 207; Chase v. Blackstone '« People v. Thompson, 25 Barb. 73. 
 
 Canal Co., 10 Pick. 244 ; Strong, Peti- See. also. People v. Head, 25 111. 325 ; 
 
 tioner, 20 id. 484; People v. Judge, People v. Hilliard, 29 id. 418 ; People 
 
 etc., 1 Mich. 359 ; People v. Green, 64 v. Corporation of Brooklyn, 1 Wend. 
 
 N. Y. 499 ; People v. Supervisors, id. 318 ; People v. Supervisors, 64 N. Y. 
 
 600, where it was held that it should 600.
 
 678 Private Cokpobations. 
 
 writ ; but it maybe proper to notice tliose wliere it may be prop- 
 erly refused. Tlie writ sliould not be issued to command an act 
 which is physically or practically impossible ; ^ or to compel the 
 doing of an act which is prohibited by injunction ; '" or where the 
 defei]dant has no power to perform the act ; ^ or where it would 
 be fi'uitless and ineffectual ; '^ or where the act is not required to 
 be performed as incident to the defendant's duties ; ^ or generally 
 to enforce a mere contract,^ or to compel the doing of an unlaw- 
 ful act ; ^ or where there is a lawful reason for not doing the act, 
 as where a party refuses to discharge a mortgage, on the ground 
 that the certificate is insufficient, or to record a deed, not projjerly 
 acknowledged or attested, or for any cause not entitled to go upon 
 the records ; ^ or to admit a person to a medical society, where he 
 would be immediately liable to expulsion ; ° or generally, when 
 the right claimed depends upon holding an act of the legislature 
 unconstitutional and void ; ^^ or to try the title to an office ; ^^ or 
 to compel the payment of liquidated damages ; ^^ or to prevent an 
 anticipated error, or defect of duty." 
 
 The remedy by the writ of inaiulamus was strictly a legal rem- 
 edy in contra-distinction from an equitable one. And it may per- 
 haps be safely affirmed that in modern practice the remedy by 
 nnandamnus can only be used to enforce a legal duty where such 
 duty is free from reasonable doubt and where the rights and in- 
 
 ' Silvertborne v. Warren R. Co., 33 ^ State v. County Judge, 1 Iowa, 
 
 N. J. 173 ; State v. Perrine, 34 id. 254 ; 425 ; Pickett v. White, 22 Tex. 559. 
 
 State V. Police Jury, 22 La. Ann. 611 ; ^ State v. Zanesville, etc., Co., 16 
 
 Ackerman v. Desha Co., 27 Ark. 457 ; Ohio St. 278. 
 
 Ball V. Lappins, 30reg. 55 ; People v. ' Gillespie v. Wood, 4 Humpli. 437; 
 
 Salomon, 54 111. 39 ; Commissioners v. Johnson v. Lucas, 11 id. 306 ; Ross v. 
 
 Baroux, 36 Penn. St. 262 ; People v. Lane, 11 Miss. 695. 
 
 Supervisors, 15 Barb. 607; Commis- >* People v. Minor, 32 Barb. 613. 
 
 sioners v. Supervisors, 29 id. 129; ^ £!c ;;«?'<« Paine, 1 Hill, 665. 
 
 People V. Tremain, id. 96; People '"Hall v. Supervisors, 20 Cal. 591; 
 
 V. Mayor of New York, 10 Wend. People v. Stephens, 2 Abb. Pr. (N. 
 
 393. S.) 348. 
 
 2 Railroad Co. v. Wyandot Co., 7 "People v. Stevens, 5 Hill, 615; 
 Ohio St. 278; Ex parte Fleming, 4 People v. Detroit, 18 Mich. 338 ; Bon- 
 Hill, 581. But see Briggs v. Johnson ner v. State, 7 Ga. 473. 
 Co., 6 Wall. 166 ; post, % 505. No. '^ Haygood v. Justices, etc., 19 Ga. 97. 
 
 ^ People v. Supervisors, 15 Barb. 607. "'State v. Carney, 3 Kans. 88; 
 
 * Commissioners v. Supervisors, 29 State v. Burbank, 22 La. Ann. 298; 
 
 Penn. St. 121. State v. Dubuclet, 24 id. 16.
 
 Mandamus. 679 
 
 terests of the party seeking it are clear, and where tlie remedy 
 will be effectual, and not of trilling consequence or importance.^ 
 
 Sec. 461. Resemblance aud distinction between, and injunction. — 
 This extraordinary process in some respects resembles the writ of 
 injunction. Each are oidy granted in extraordinary emergencies, 
 aud in each tlie right depends upon the discretion of the court. 
 But while the former is the right arm of courts of law to com- 
 mand a duty to be performed, the latter niay be considered the 
 right ann of courts of equity to prohibit unlawful and inequi- 
 table acts and things from being done. The former is a positive 
 remedy to redress an existing grievance, while the latter is a nega- 
 tive one, and usually, at least, is only invoked to restrain a future 
 or contemplated injury.^ 
 
 OEC. 462. Mandamus against private corporations or its officers. — 
 We have considered the rules and practices relating to inandamus^ 
 generally, but it may be proper to consider, especially, some cases 
 where the writ may be used against a private corporation for pecun- 
 iary gain, and its officers. In such cases it is an efficient remedy 
 to enforce the performance of duty. Thus, where the charter im- 
 poses upon the corporation or some officer the duty of keeping a 
 register and inserting therein the names of the sliareholders, this 
 duty may be compelled by mandamus.^ It would also be an ap- 
 propriate function of the writ to require the directors of a corpo- 
 ration to admit and swear in, as director, one who has been duly 
 elected as such ; * to require the admission of members to all the 
 privileges of membership;^ to compel the master of a hospital, 
 incorporated for charitable purposes, to put the common seal to an 
 
 1 Hall V. Crossman, 27 Vt. 297; ^ Board of Liquidation v. McComb, 2 
 
 People V. Tremain, ante. A manda- Otto (U. S.), 581. 
 
 mus will issue to an inferior court to ^ Norris v. Irish Land Co., 8 El. & 
 
 compel the specific performance of an Bl. 52o ; Swan v. North British, etc., 
 
 official duty to wliicli a party is clearly Co., 31 L. J. Ex. 425. 
 
 entitled, aud which is refused to him, * 2 Str. 696; 2 Add. on Torts (Wood's 
 
 when no other effectual remedy exists, ed.), § 1496, n. 
 
 but the particular mode of its exercise ^ Dacosta v. The Russia Co., 2 Str. 
 
 must be left free from coercion or re- 783 ; Rex v. March, 2 Burr. 1000 ; 
 
 straint. Seymour v. Ely, 37 Conn. 103 ; Reg. v. Saddlers' Co., Bail Court Cas. 
 
 McMillen v. Smith, 26 Ark. 613; 183. 
 People v. Judge, etc., 1 Mich. 359.
 
 680 Private Corpokations. 
 
 instriiinent of presentation ; ' to place a minister in possession of 
 a pul{)it of which he has been unjustly deprived;^ to compel a 
 railroad or canal company, to build or repair when such duty is 
 imposed upon them by law; ^ and to so grade a railroad track so as to 
 make the streets, alleys and crossings convenient of access and prac- 
 tically useful ; * to complete its railroad when by law it is required 
 60 to do ; ^ to pursue the course prescribed by its charter in 
 crossing streams and water-courses, so as not to interfere with 
 navigation ; ° and to compel a cashier of a bank to allow a director 
 to examine the books.' And it may be afhrmed as a general 
 doctrine of the law that a mandamus will issue in all cases to com- 
 pel a corpoi'ation, or any particular officer, to perform any plain 
 duty required by law, in favor of a member or other interested 
 party, whether such duty is imposed either by statute, charter, 
 custom or contract/ The general doctrines in relation to the 
 functions of this process and the practice of such cases are eluci- 
 dated and illustrated by the supreme court of Massachusetts in 
 the case of Strong, Petitioner,^ although the proceeding in this 
 case related to a municipal corporation. The general principles, 
 relating to the remedy, are applicable to either class of corpora- 
 tions. The petitioner in this case was duly elected count}^ com- 
 missioner, but the board of examiners refused to give him a cer- 
 tificate and ordered another election at which another person was 
 chosen. It was held, that inandatnus would lie to the board of 
 examiners to compel them to give a certificate, notwithstanding 
 he might be compelled to proceed, subsequently, by ^?^c> '?/J«rra;?,2!f>, 
 to remove the incumbent of the office, chosen at the second elec- 
 
 ' Reg. V, Kendall, 1 Q. B. 366. People, 56 111. 365 ; Indianapolis, etc., 
 
 2 Runkle v. Wiueuieler, 4 H. & J. H. Co. v. State, 37 lud. 489 ; State v. 
 897 ; People v. Steele, 2 Barb. 377. Southern Minn. K. Co., 18 Minn. 40; 
 
 3 People V. Troy, etc., R. Co., 37 Burton, In re, 31 L. J. Q. B. 6'3 ; Rex v. 
 How. Pr. 427 ; Habersham v. Canal Merchant Tailors' Co., 2 B. & Ad. 115; 
 Co., 26 Ga. 665. Rex v. Hotsman of Newcastle, 2 Str. 
 
 4 Chicago, etc., R. Co. v. People, 56 1223 , Reg. v. London, etc., R. Co., 13 
 111. 365. Q. B. 998; Reg. v. Wing, 17 id. 645; 
 
 5 State V. Southern Minn. R. Co., 18 Reg. v. Gen. Cem. Co., 6 El. & Bl. 
 Minn. 40. 415 ; Norris v. Irish L. Co., 8 id. 512 ; 
 
 8 State V. Northern R. Co., 9 Rich. Reg. v. Midland, etc., R. Co., 15 Ir. Cr. 
 
 (S. C.)247. L. R. 525. 
 
 'People V. Throop, 12 Wend. 183 ; » Strong, Petitioner, 20 Pick. 494. 
 
 People V. Mott, 1 How. Pr. 247. See, also, Curtis v. McCullough, 3 Nev. 
 
 * Insurance Company v. Mayor, 23 302. 
 Md. 296 ; Chicago, etc, R. Co. v.
 
 Mandamus. 
 
 G81 
 
 tion. The opinion of tlie court may be found in the annexed 
 note.' 
 
 ' In this case the court say : 
 
 " It has been contended for the re- 
 spondents, that the petitioner has mis- 
 taken his remedy, and tliat ma/id'iniiis 
 will not lie. It was said that his ap- 
 propriate remedy, if he has any, is by 
 quo icarranto and not by manddmnn, 
 or, at any rate, that a quo warranto 
 should precede a mandamus . 
 
 " In every well-constituted govern- 
 ment the highest judicial authority 
 must necessarily have a supervisory 
 power over all inferior or subordinate 
 tribunals, magistrates, and all others 
 exercising public authority. If they 
 commit errors, it will correct them. 
 If they refuse to perform their duty, 
 it will compel them. In the former 
 case by writ of error, in the latter, by 
 mandamus. And generally in all cases 
 of omissions or mistakes, where there 
 is no other adequate specific remedy, 
 resort may be had to this high judicial 
 writ. It not only lies to ministerial, 
 but to judicial officers. In the former 
 case it contains a mandate to do a 
 specific act, but in the latter only to 
 adjudicate, to exercise a discretion, 
 upon a particular subject. Springfield 
 V. County Commissioners, etc., 10 
 Pick. 59. 
 
 " Mandamus is the proper process 
 for restoring a person to an office from 
 which he has been unjustly removed. 
 White's case, 2 Ld. Rayni. 959, 
 1004 ; Regina v. Baines, 1265 ; Res 
 V. Chancellor, etc., of Cambridge, id. 
 1334; Rex v. London, 2 T. R. 177; 
 Rex V. Field, 4 id. 125. So, also, it 
 lies to admit any one to an office, a ser- 
 vice or a franchise from which he is 
 unlawfully excluded. 6 Dane's Abr. 
 323 ; Rex v. Surgeons' Company, 2 
 Burr. 892; Rex v. Barker, 3 id. 
 12G5 ; S. C, 1 W. Bl. 300 ; Rex v. Bed- 
 ford Level Corp., 6 East, 356; Rex 
 V. York, 4 T. R. 699, and 5 id. 66. But 
 it is strongly argued by the respond- 
 ents' counsel, that inasmuch as the 
 office claimed by the petitioner is now 
 filled by another, who can be removed 
 only by a quo icarranto, a mandamus 
 will not lie. And, certainly, many of 
 the authorities cited by them support 
 the position, that a mandamus will 
 not lie to place one in an office actually 
 
 86 - 
 
 filled by another, until the incumbent 
 has been removed by a quo warranto. 
 The case from 3 Jolins. Cas. 79, The 
 People V. New York, is directly in 
 point. The court there say, that 
 ' where the office is already filled by a 
 person who has been admitted and 
 sworn and is in by color of right, a 
 mandamus is never issued to admit an- 
 other person.' — ' The proper remedy, in 
 the first instance, is by an information in 
 the nature of a quo icarranto by which 
 the rights of the parties may be tried.' 
 " But notwithstanding the respecta- 
 bility and weight of this and the 
 other authorities cited, there certainly 
 are very many the other way ; of 
 which the case of Dew v. The Judges 
 of the Sweet Springs District Court, 3 
 Hen. & Munf. 1, is one. Dew applied 
 for a mandamus to the judges, to ad- 
 mit him to the office of clerk. It was 
 objected among other things, that the 
 office was already filled and the only 
 remedy was by a quo warranto against 
 the incumbent. But all the judges 
 of the supreme court of appeals of 
 Virginia ' agreed clearly that man- 
 damus was the best remedy.' See, 
 also, 6 Dane, 335, and the cases there 
 cited. Mr. Dane, with whom we con- 
 cur, says ; ' On the whole the authori- 
 ties, English and American, are much 
 in favor of the mandamus, especially 
 the more modern cases.' But the 
 cases relied upon by the respondents, 
 if in nowise shaken or overruled, 
 are clearly distinguishable from the 
 one before us, and may stand as 
 sound law, and yet form no obstacle 
 to the petitioner's application. The 
 cases referred to were applications to 
 be admitted to an office. The peti- 
 ticmer only seeks for a certificate of his 
 election. This, if he obtains it, will 
 not necessarily oust the incumbent or 
 give the petitioner possession of the 
 office. For these purposes he may still 
 have to resort to a quo icarranto, and 
 possibly before he can get qualified, to 
 another mandamus. Two processes 
 may be necessary to enable the peti- 
 tioner to get possession of the office, 
 the one to establish the legality of his 
 own election, the other to set aside 
 that of the incumbent. They are in-
 
 682 
 
 Pjbitatk Coepoeations. 
 
 A judgment creditor of a corporation for pecuniary gain may 
 also compel the corporation, by inandainus^ to give him an inspec- 
 
 dependent of eacli other. Both might 
 have been applied for at the same time 
 and proceeded 'pari passu. Had the 
 petitioner first caused the incumbent 
 to be removed by a quo 'loarrunto, still, 
 without the evidence of his own elec- 
 tion, he could not enter into the office. 
 So, if a mandamus be now issued and 
 complied with, he may still be obliged 
 to resort to other legal proceedings be- 
 fore he can get regularly inducted. 
 The King v. The Mayor etc., of York, 
 4 T. 11. 099, and 5 id. 66, is analogous 
 to the case at bar. An election of a 
 recorder of the city of York was 
 holden, and a certificate was given to 
 Sinclair that he was duly elected. The 
 certificate was to be presented to the 
 king for the purpose of obtaining his 
 approbation of the election. Whithers, 
 the other candidate, applied for a 
 mandamus to the corporation to give 
 him a certificate, he having, as he 
 alleged, a majority of the legal votes, 
 and his opponent having gained the 
 election only by the votes of persons 
 not qualified to vote. An alternative 
 mandamus issued, and afterward, the 
 return to that being insufficient, a per- 
 emptory one was ordered. Many other 
 cases to the same effect might be cited, 
 but without a further reference to 
 authorities we are clearly of opinion 
 that a mandamus is the proper remedy 
 in this case. We are aware that this 
 is not a writ of right, but grantable at 
 the discretion of the court ; Rex v. 
 Commissioners of Excise, 2 T. R. 385 ; 
 that inasmuch as it is final and cannot 
 be revised, on error or otherwise, the 
 court will proceed with great caution 
 in the exercise of so high a j urisdiction ; 
 Selwyn's IS. P. (6th ed.) 1063 ; 1 Chit. 
 Gen. Prac. 79 1; and that they will not 
 grant it where there is any other ade- 
 quate specific remedy. 1 Chit. Gen. 
 Prac. 790; Rex v. Bp. of Chester, 1 T. R. 
 896 ; Rex v. Abp. of Canterbury, 8 East, 
 219. But we have no doubt that the 
 present is the proper case for the exer- 
 cise of our discretion ; and that td refuse 
 to grant the writ would be doing 
 palpable injustice to the petitioner 
 and defeating the will of a majority of 
 the voters of the county clearly mani- 
 fested by their votes, duly and legally 
 
 evinced before the proper tribunal. 
 No other remedy can reach the error. 
 Although a quo warranto might re- 
 move the illegal occupant, it could not 
 put the legal officer in his place. No 
 civil action could be maintained by the 
 petitioner, because tliere is no reason 
 to doubt that the examiners acted bona 
 fide and with a sincere desire to per- 
 form their duty correctly and legally. 
 And if it could, it would be a very 
 imperfect and partial remedy. It 
 cannot be maintained that the decision 
 of the examiners was an act within 
 their legal discretion. Whether their 
 determination as to the reception or 
 rejection of returns would be deemed 
 ajudicial decision may well be doubted. 
 But nothing can be clearer than that 
 the counting of the votes, and ascer- 
 taining the majority, and giving cer- 
 tificates of the result, are mere minis- 
 terial acts. They have no discretion 
 in determining which of the candidates 
 shall be elected. It must be the 
 result of pure, inflexible mathematical 
 calculation. 
 
 " We are, therefore, all of opinion, 
 that the practitioner, in first seeking 
 to have tlie validity of his own election 
 inquired into, pursued a wise and legal 
 course, that tlie proper remedy is by 
 mandamus, and that justice clearly re- 
 quires that such a writ be issued. But 
 the usual, if not invariable practice is, 
 in the first instance, to grant it in the 
 alternative form, giving the examiners 
 a further opportunity either to give 
 the certificate or to return the reasons 
 for refusing it. As the case has been 
 fully heard, they will doubtless adopt 
 the first branch of the alternative, un- 
 less facts or reasons occur to them 
 which have not been presented to the 
 court." In Woodstock v. Gallup, 28 
 Vt. 587, the proper office and practice 
 upon writs of certiorari and man- 
 damus, in the nature of a procedendo, 
 was carefully considered, and the 
 court (Redfield, C. J.) say : "The 
 statute, chap. 28, >5 5, gives this court 
 power to issue writs of ' error, certio- 
 rari, mandamus, prohibition, and quo 
 warranto, and all other writs and pro- 
 cesses to courts of inferior jurisdic- 
 tion, to corporations and individuals.
 
 Mandamus. 
 
 G83 
 
 tion of tlio register of sliarcliolders ; ' and the riglit to a transfer of 
 shares on the entry of the probate of the will of a deceased share- 
 
 that shall be necessary to the further- 
 ance of justice,' etc. 
 
 " The authority thus conferred hag 
 been rei^arded as co-exteusive with the 
 authority, in this respect, exercised by 
 the court of king's bench in England, 
 so far as applicable to our condition and 
 wants. And it has generally been the 
 purpose of this court to adopt substan- 
 tially, the forms used in the king's 
 bench. But the organization and course 
 of proceeding in the superior courts, in 
 reference to actions pending in the in- 
 ferior courts, is essentially different in 
 England from what it is in this state. 
 As this court is now constituted, we 
 have no general original jurisdiction, 
 either civil or criminal, and no jury 
 trials. And it has never been the 
 practice to bring cases from the infe- 
 rior courts into this court for trial, 
 which is the principal use of the writ 
 of certiorari, in England, where it is 
 more generally confined to criminal 
 proceedings ; 4Blackst. Com. 320-321 ; 
 5 Petersdorffs Abr. lU [149]; 1 Bac. 
 Abr.. tit. Certiorari; F. N. B. 245. 
 But the cases reported under the title 
 Certiorari in 5 Pet. Abr. 149 et seq., 
 shows that the certiorari is the sub- 
 stitute for a writ of error, in cases 
 where the proceedings are not accord- 
 ing to the course of the common law, 
 and where, by consequence, no writ of 
 error lies ; and it extends to such 
 proceedings as laying highways, and 
 other judicial proceedings and mat- 
 ters, in the sessions and other inferior 
 tribunals. But in our practice, we 
 never, upon writs of error, remand a 
 case which is brought into this court 
 and judgment reversed, where further 
 proceedings are required, unless an 
 issue of fact, proper to be tried by the 
 jury, arises, but the case in all other 
 respects is finished in this court. In 
 analogy to this, we have never, that I 
 am aware of, brought up a sessions 
 matter into this court, until it was 
 finished in the inferior court, by a de- 
 cision upon its merits. Rand v. Towns- 
 hend, supra ; Paine v. Leicester, 22 
 Vt. 44. It seems to us that the more 
 appropriate remedy in cases like the 
 present, where the inferior court dis- 
 
 poses of the matters upon some inci- 
 dental question, and declines to hear 
 the case upon its merits, is a writ of 
 mandamus, in the nature of a procc- 
 deudo, as was held by the supreme 
 court of the United States, in Living- 
 ston v. Dorgenois, 7 Crauch, 577; 2 
 Curtis, G77 ; and as was virtually done 
 in Er parte Crane, 5 Pet. 190, where a 
 mamhnaas was issued to the judge of 
 the circuit court, in thedistrict of New 
 York, requiring him to sign a bill of 
 exceptions. The writof ??/rt;((ZamMS is 
 the supplementary remedy, so to 
 speak, where the party has a clear right, 
 and no otlier appropriate redress to 
 prevent a failure of justice. 3 Blackst. 
 Com. 1 10 ; 12 Pet. Abr. 438 (309). It is 
 the absence of a specific legal remedy, 
 which gives the court jurisdiction ; 2 
 Sel. N. P., title Mandamus. But the 
 party must have a specific legal right. 
 Rex V. Barker, 3 Burrow, 12G5 ; El- 
 LENBonouon, C. J., 8 East, 219. The 
 remedy extends to the control of all in- 
 ferior tribunals, corporations, public 
 officers, and even private persons, in 
 some cases ; but more generally the 
 English court of king's bench de- 
 clines to interfere, by mandamus, to 
 require a specific performance of a 
 contract where no public right is con- 
 cerned. Lord Mansfield, in King v. 
 Barker, 3 Barrow, 1265-1270 ; Angell 
 & Ames on Corp. 761 ; The King v. 
 The Mayor of Colchester, 3 Term, 260 ; 
 The King v. Corporation of Bedford 
 Level, East, oTtij. There is almost 
 no end to the cases upon this subject. 
 They will be found digested, under the 
 title of Mandamus in PetersdorfiTs 
 Abr. and Bacon's Abr. 
 
 " The case of Walker v. The London 
 & Blackwall Railway, 3 Q. B. 744, is a 
 case almost precisely in point. The 
 sheriff was required to hold inquisi- 
 tion upon petitions for land damages 
 against railways. Upon the trial of 
 the plaintiff's case, the sheriff directed 
 the jury to find a verdict for the de- 
 fendants, on the ground that the plain- 
 tiff" was not entitled to compel the 
 company to purchase his property. 
 The queen's bench, on application for 
 a peremporty mandamus, decided that 
 
 ' Reg. V. Derbyshire, etc., R. Co., 3 Ell. & Bl. 784.
 
 684 Private Corporations. 
 
 lioldei', on tlie i)roper books of the company, may be enforced by 
 mandamus} So, in England, it has been held that where a corporate 
 body is clothed M'ith authority to make contracts, and to make calls, 
 from time to time, on the shareholders, and contracts a)-e made 
 with the corporation on the expectation that it will exercise these 
 powers, and it is clear that the corporation is attempting to evade 
 the payment of its debts and satisfaction of a judgment rendered 
 against it, claiming that it has no corporate assets wherewith to 
 satisfy the same, the court will, by rnandainus, compel it to 
 exercise its powers for the raising of funds to answer the de- 
 mands of the creditor.^ 
 
 Sec. 463. Corporations may invoke its aid. — The Writ may also 
 be issued in favor of corporations, in all those cases where a -pvi- 
 vate person might, under the same circumstances, invoke the aid 
 of the same to secure a private and individual right. Thus, a 
 board of supervisors may be compelled by mandamus to subscribe 
 for stock in a railroad company, or issue county bonds to such 
 company when, by the provisions of the statute, it is their duty 
 
 tlie writ must issue, requiring the a clear lesral right in the relator, a 
 
 sheriff to proceed aud assess the dam- corresponding duty in the defendants, 
 
 ages, disregarding his former judg- and a want of any other adequate and 
 
 meut aud the verdict of the jury. The specific remedy, presents a fit case for 
 
 form, of the writ there issued was a a wa^fZawiMS ; that it is the proper and 
 
 mandamus, in the nature of a proce- appropriate remedy to compel a muni- 
 
 dendo, as in the present case. But cipal corporation to make provision for 
 
 very likely the same thing might only the payment of interest, due upon 
 
 be done by mandamus, in regard to bonds issued by it in payment of a 
 
 those tribunals to which the superior subscription to the stock of a railway 
 
 court had power to issue the writ of company, but the assessment and col- 
 
 certiorari. For if that were taken lection of the necessary taxes — that 
 
 away, by st>atute, it would be regarded the writ need not set forth when the 
 
 as an evasion to accomplish the same principal will become due, nor when 
 
 thing, more directly, \>y mandamus, or where the interest is to be paid. 
 
 Rex V. Justices of Yorkshire, 1 Adol. The averment of the petitioner's 
 
 & El. 5G3. See In re Edmundson, 24 ownership is sufficient without setting 
 
 Eng. L. & Eq. 169. forth the particulars of his title, and 
 
 "In Coram., ea; rel. Hamilton, v. Se- that the defendants have refused to 
 
 lect and Common Councils of Pitts- make provision for the payment of the 
 
 burg, 34 Peun. St. 496, it is held that interest without averring a demand." 
 
 1 Reg. V. London, etc. , R. Co., 1-3 Q. » Rex v. St. Katharine Dock Co., 4 B. 
 
 B. 998 ; Reg. v. Wing. 17 id. 645 ; Reg. & Ad. 360. But a mandainus will not 
 
 V. Gon. Cem. Co., 6 Ell. & Bl. 415; issue merely because the execution 
 
 Rex V. Worcester Can Co., 1 M. & Ry. may produce no fruits. Reg. v. Vic- 
 
 539. toria Park Co., 1 Q. B. 293.
 
 Mandamus. 685 
 
 so to do ; • and it may be used to compel a state treasurer to return 
 municipal bonds, where tliej liave been illegally voted aud issued 
 in aid of a railway ; ' to compel the commissioner of a land office 
 to issue certificates for lauds to* which a railroad corporation is 
 entitled,' and it has been held proper to compel county ufficers to 
 levy tax on a county to satisfy a judgment, in a circuit court of the 
 United States, rendered on the bonds issued, as provided by law, 
 to a railroad corporation, even where, previous to the application 
 to the circuit court for the writ, but subsequent to the rendition 
 of the judgment, the officers have been enjoined by a state court 
 from making such levy.* 
 
 The decision of the supreme court of the United States, in this 
 case, rested upon the ground that the jurisdiction of the circuit 
 court in the matter was prior to that of the state court ; that the 
 jurisdiction of the circuit court continued after the judgment ren- 
 dered, for the purposes of the mandamus, and that it could not be 
 ousted of it, as the powers of the court would be useless if its 
 judgments could not be enforced by the requisite and necessary 
 process.* Mandamus is also a proper remedy for a private cor- 
 poration, against persons wrongfully claiming to hold its offices/ 
 
 Sec. 464. To compel inspection or delivery of corporate books and 
 papers. — The remedy by mandamus is frequently resorted to, to 
 compel the production, inspection, or surrender, of books and 
 records of private corporations, to persons entitled thereto. Thus, 
 where the term of office of an officer of a private corporation has 
 expired by lapse of time, removal, or otherwise, aud his successor, 
 duly appointed and qualified, is entitled to the custody of such 
 books and records, which right is refused by the former officer, it 
 is a proper case for the remedy by mandamus, to compel the per- 
 formance of the duty.' 
 
 ' Napa Valley R. Co. v. Napa Co., 30 Lord, 9 Wall . 409 ; Supervisors v, 
 
 Cal. 435; California, etc., R. Co. v. Du rant, id. 736. 
 
 Butte Co., 18 id. 671. * See, also, Wayman v. Southard, 10 
 
 'Bay City v. State Treasurer, 23 Wheat. 23 ; Siiydam v. Willianisou, 20 
 
 Mich. 499. How. 437 ; 2 Tidd's Pr. 1134. 
 
 * Houston, etc., R. Co. v. Commis- ^American Railway Frog Co. v. 
 
 Bioner, 36 Tex. 382. Haven, 101 Mass. 398 ; 3 Am. Rep. 377. 
 
 4 Rio-o'S V. Johnson County, 6 Wall. 'American Railway Frog Co. v. 
 
 (U. sTl66. See, also, Weber V. Lee Haven, 101 Mass. 398 ;"State v. Goll, 33 
 
 County, id. 210 ; United States v. N. J. L. 285 ; St. Luke's Ch. v. Slack, 
 
 Council of Keokuk, id. 514 ; Mayor v. 7 Gush. 226.
 
 686 Pkivate Corporations. 
 
 And where a stockholder shows a right to the inspection of 
 books and records of a corporation, which right is refused, 
 proceedings bj mandamus is an appropriate remedy to enforce 
 the right. ^ In this way the cashier of a bank may be compelled 
 to submit the books of the bank to the inspection of one of the 
 directors.^ 
 
 But the aid of this extraordinary remedy will not be granted 
 except some laudable or beneficial purpose is to be subserved. 
 And a member of a private corporation could not claim the 
 benefits of the process merely to gratify malice, or caprice, or an 
 idle curiosit3\ "And, unless, observes Mr. High, "there is 
 some particular matter in dispute between the members of the 
 corporation, or between the corporation and its individual mem- 
 bers, or some specific purpose for which the inspection is neces- 
 sary, mandaTYius will not lie, since the courts will not permit the 
 use of the writ upon merely speculative grounds, or to gratify a 
 spirit of curiosity." ^ 
 
 Nor can a stockholder claim this process to compel the company 
 to keep its books of account at the principal office or place of 
 business of the corporation, unless he shows that some personal 
 injury will res\ilt to him by the keeping of the books elsewhere.* 
 
 And it is not a sufficient answer to a just claim for the in- 
 spection of books, that they were purchased by the officer having 
 charge of them with his own private funds, and that the corpora- 
 tion has not refunded the money thus expended, and is indebted 
 to the officer for his salary.^ Nor is it good ground for 
 refusing a m^andamus^ that the books are books of account 
 between the corporation and its stockholders, and that, therefore, 
 these should be regarded as confidential ; or that they might be 
 used for purposes not strictly proper, or such as would justify 
 the issuing of the writ.* A judgment creditor is entitled to the 
 
 ' People V. Tliroop, 13 Wend. 183 ; and records at a proper time and place 
 
 People V. Pacific Mail Steamship Co., and of the prov)er party. People v. 
 
 50 Barb. 380. Walker, 9 Mich. 828 ; King v. Wilts. 
 
 2 People V. Throop, supra. Canal Co., 3 Ad. & E. 477. 
 
 3 Hififh on Extra. Leg. Rem., § 310. '•Pratt v. Meriden Cutlery Co., 35 
 See, also, People v. Walker, 9 Mich. Conn. 36. 
 
 o'iS ; Hatch v. City Bank, 1 Rob. (La.) ^ State v. Goll, 32 N. .T. L. 285 . 
 
 470; King V. Merchant Tailors' Co., 2 "People v. Pacific Mail Steamship 
 
 B. & Ad' 115. lu such a case there Co., 50 Barb. 280. 
 should also be a demand of the papers
 
 Mandamus. 687 
 
 process where he is entitled to an execution against stockholders 
 who have not paid their shares, and an inspection of the books 
 of the corporation becomes necessary in order to ascertain who 
 are the shareholders and the amount of the subscription remain- 
 ing unpaid, and which inspection is refused.^ And it is also an 
 appropriate remedy, where it is the duty of an officer of a 
 corporation, on the presentation of a certificate of sale of shares 
 of capital stock under execution, to give the purchaser evidence 
 of title to tlie stock thus purchased, \vliich he refuses to do;' 
 or, where it is the duty of the corporation to enter npon the 
 proper books of the company, a record of the probate of the 
 will of a deceased stockholder, showing the disposition of his 
 stock, and the corporation refuses so to do;' and, especially, 
 where it is the duty of a corporation to record all the names of 
 the owners of the stock, and it refuses so to do/ 
 
 Sec. 465. As a remedy against railroad corporations. — The remedy, 
 by mandamus^ agaiust railroad corporations is frequently appro- 
 priate ; and it may be invoked to compel a railroad corporation to 
 carry out or execute the objects and purposes for which it was 
 created. 
 
 Thus, it has been held proper to compel a railroad company to 
 transport passengers to a particular terminus, in accordance with 
 the requirements of its charter ; ^ to compel the replacement of 
 certain portions of its track, taken up, where its charter provided 
 that the public should have the right to use the railway upon the 
 payment of certain rates of fare and freight ; * to compel the com- 
 pany to have damages for the taking of lands under the right of 
 eminent domain, assessed in the manner provided by law, and in 
 the absence of other specific remedy, to compel payment of the 
 amount of damages awarded ; ' to construct and keep in repair 
 
 1 Queen v. Derbysliire, etc. , R. Co., = State v. TUe Hartford, etc R Co 
 
 3 El. & Bl. 784. 29 Conn. 538. 
 
 - Bailey v. Strohecker, 38 Ga. 259. * Kiuff v. Swem, etc., R. Co., 2 B. 
 
 " Rex V. Worcester, etc., Co., 1 M. & A. 644. 
 
 & R. 53. ' Queen v. Eastern Counties R. Co., 
 
 •*Norri3 V. The Irish LandCo., 8 El. 2 Q. B. 347; Kinjr v. Water- Works 
 & Bl. 512. But see where it will not be Co. , 6 Ad. & E. 355 ; Queen v. Trust- 
 issued for this purpose, State v. War- ees.etc, 8 id. 439 ; Queen v. Deptford 
 ren, etc., Co., 82 N. J. L. 439. Pier Co., id. 910.
 
 688 Peivate Corporations. 
 
 bridges as required by tlieir charters, and so as not to obstruet the 
 navigation of streams ; ' to maintain all necessary crossings and cul- 
 verts at the crossing of streets and alleys of a city, and make them 
 safe and convenient for passage as provided by the conditions of 
 the right of way, granted by the city to the company ; ^ and in 
 general to compel them to construct and maintain suitable cross- 
 ings and .approaches where the railroad crosses public streets and 
 highways.^ 
 
 Sec. 466. To whom the writ should be directed — service. — It is 
 not within the scope of this treatise to consider the practice and 
 proceedings, in mandamus, generally. Special treatises are de- 
 voted to the treatment and elucidation of the law in general re- 
 lating to it. We will, however, observe that the writ should 
 be directed to and served upon the person who is shown to be 
 delinquent. If the proceeding is to obtain the books and records 
 of the corporation or their inspection, the proper course would 
 seem to be, to direct the process to the person in whose custody 
 they are, even though they may be held by the party as the otticer 
 or agent of the corporation, as cashier, treasurer or secretary.* 
 The common-law mode of service was by delivering a copy of 
 the writ, and showing the respondent the original ; '" but the mode 
 of service in this country is generally regulated by statutes in the 
 various states. 
 
 1 State V. Wilmington Bridge Co., 3 ^ People v. Chicago, etc., R. Co., 57 
 
 Harr. (Del.) 313; State v. North-east- 111. 436 (1873); Indianapolis, etc., R. 
 
 ern R. Co., 9 Rich. 247; Habersham Co. v. State, 37 Ind. 489. 
 V. Savannah, etc., Canal Co., 26 Ga. •'People v. Throop, 12 Wend. 183. 
 665. ^ Reg. V. Birmingham, etc., R. Co , 1 
 
 ^ Indianapolia, etc., R. Co. v. State, El. & Bl. 293; 23 L. J. Q. B. 195; 
 
 37 Ind. 489. Corner's Crown Pr. 227.
 
 Taxation. 689 
 
 CHAPTER XXII. 
 
 TAXATION. 
 
 Sec. 467. Taxation defined and necessity of. 
 Sec. 468. Should be equitably imposed. 
 Sec. 469. Difficulty attending taxation of railroad property. 
 Sec. 470. Statutes regulating taxes on corporate property. 
 Sec. 471. Id. 
 
 Sec. 472. What corporate property is taxable — double taxation. 
 Sec. 473. Corporate property subject to and exempt from taxation. 
 Sec. 474. Exemption statutes sustained. 
 Sec. 475. Indications that the doctrine will not be extended. 
 Sec. 476. Where corporate property is used in dififerent states. 
 Sec. 477. Exemption of United States stocks. 
 
 Sec. 478. Exemption from taxation under the national banking law. 
 Sec. 479. Municipal subscriptions in aid of corporate enterprises, and taxa- 
 tion therefor. 
 
 Sec. 467. Taxation defined — necessity of. — Taxation is defined as 
 " the act of laying a tax, or imposing taxes, on the subjects of a 
 state by government, or on the members of a corporation or com- 
 pany by the proper authority." ' Tax is any contribution im- 
 posed by the government upon individuals or corporations for 
 the use of the state, and embraces tolls, tribute, impost, duty, cus- 
 tom, excise, aid or supply. But in a stricter or more limited sense, 
 it is a levy or sum imposed by the state upon persons, or real or 
 personal property and occupations, as distinguished from customs, 
 duties and excises,^ Taxation is one of the fiscal prerogatives and 
 inherent powers of sovereignty, and essential to the maintenance 
 of government and the security of the rights of the citizen.^ 
 
 Sec. 468. Should be equally imposed. — The wisdom of legisla- 
 tors is taxed in adopting means to levy and collect taxes in such 
 
 ^ Webst. Die. order and proportion." Burr. L. Die, 
 
 ' 2 Bouv. L. Die, tit. Taxes; 2 Burr. tit. Tax. 
 
 L. Die, tit. Tax ; Story on the Const. Mr. Cooler defines taxes as " the en- 
 
 14. Mr. Burrill observes in reference forced proportional contribution of 
 
 to the word " tax " as follows: " Liter- persons and property, levied by the 
 
 ally, or according to its derivation, an authority of the state for the support 
 
 imposition laid by government upon of the government, and for all public 
 
 individuals, according to a certain needs." Cooley on Taxation, 1. 
 
 ' 1 Bl. Com. 307 et seq.
 
 690 
 
 Private Coepokations. 
 
 a manner as that the burden shall be borne equally and equitably 
 by all citizens.' The usual method of imposing this burden is to 
 require the assessment of taxes according to the value of prop- 
 erty, and to levy and collect for governmental purposes annually 
 a certain per centum of the valuation of all property, real and 
 personal, owned by individuals, partnerships or corporations.^ 
 It will be manifest that corporations should contribute to this 
 public demand as well as individuals, as they, equally with natu- 
 ral persons, enjoy the benefits of civil government and the pro- 
 tection thus afforded to its pecuniary interests, and they should 
 be subject to the same burdens, unless they are exempted there- 
 from by the provisions of their charter.^ The legislature of the 
 state, as the representative of the people, is supreme, unless re- 
 strained by provisions of its constitution, and may exempt corpo- 
 rations or individuals, or their property, from taxation ; but 
 where there is no such exemption, all owners of property should 
 equally contribute, according to its value, to the necessities of the 
 government.^ 
 
 1 2 Kent's Com. 250. Perfect equal- 
 ity and uniformity is practically im- 
 possible. Kirby v. Shaw, 19 Penn. 
 St. 258 : Mill. Pol. Econ., B. 5, chap. 2, 
 § 2 ; Lowell v. Oliver, 8 Allen, 247 ; 
 buld V. Richmond, 23 Gratt. 464; 
 Allen V. Drew, 44 Vt. 174. 
 
 "^ The constitution of Massachusetts 
 provided that the legislature might 
 "impose and levy reasonable duties 
 and excises upon any produce, goods, 
 wares, merchandise and commodities 
 whatsoever, brought into, produced, 
 manufactured or being within the 
 same." Under this constitutional pro- 
 vision the supreme court of that state 
 held that the legislature might impose 
 a specific tax on the stock of an in- 
 corporated bank. Portland Bank v. 
 Apthorp, 13 Mass. 252. See, also, 
 Commonwealth v. Lowell Gas Co., 12 
 Allen, 75 ; Commonwealth v. Hamil- 
 ton Man. Co., id. 298; Same v. New 
 England Slate Co., 13 id. 391; Same v. 
 Carey Improvement Co., 98 Mass, 19 ; 
 Attorney-Gen. v. Bay State Min. Co., 
 99 id. 148 ; Oliver v. Liverpool Ins. 
 Co., 100 id. 531 ; 10 Wall. 566 ; Boston 
 R. Co. V. Commonwealth, 100 Mass. 
 399 ; Dudley v. Jamaica Aqueduct 
 
 Pond Co., id. 183. And in Massachu- 
 setts domestic corporations cannot be 
 required to pay a portion of all divi- 
 dends of the non-resident owners into 
 the treasury of the state where there 
 is no such tax on the dividends of 
 resident owners. Oliver v. Washing- 
 ton Mills, 11 Allen, 268. 
 
 3 Harvard College v. Aldermen of 
 Boston, 104 Mass. 470 ; Troy v. Mutual 
 Bank, 20 N. Y. 387 ; People v. Brook- 
 lyn, 4 Comst. 419 ; Bulowe v. Charles- 
 ton, 1 N. & McC. 527 ; Shitz v. Berks 
 Co., 6 Penn. St. 80 ; Duunell Man. Co. 
 v. Pawtucket, 7 Gray, 277. But the 
 right to exempt corporate property 
 from taxation has been questioned on 
 the ground of public policy, and that 
 it is inimical to the security of govern- 
 ment. The reasons would be equally 
 applicable to all exemptions. Thorpe 
 V. The Rutland, etc., R. Co., 27 Vt. 
 140 ; Brewster v. Hough, ION. H. 138. 
 ■.■» See West River Co. v. Dix, 6 How. (U. 
 S.) 507; Bank of Commerce v. New York, 
 2 Black , 720 ; Duer v. Small, 4 Blatchf. 
 263, where it is held that the power 
 extends to all the property and busi- 
 ness within the state. People v. 
 Pacheco, 27 Cal. 175 ; De Pauw v. New
 
 Taxation. 691 
 
 Seo. 469. Difficulty attending taxation of railroad property and inter- 
 ests. — Some difficulty has been experienced, relating to the taxa- 
 tion of corporate property, and especially the property of railroad 
 corporations. The operation of railroads usually requires the use 
 and ownership of property in v^arious localities, not only within 
 the territory of the sovereignty of its creation, but frequently in 
 different states. Besides, the capital stock of such corporations 
 may be held not only by the corporation itself, but by its numer- 
 ous members, having a residence and domicile in various locali- 
 ties, not only within the state where the corporation is created, 
 but in other states. Where shall such property and interests be 
 taxed ? If it may be assessed and taxed according to value in 
 more than one place for the same purpose, the burdens of taxa- 
 tion would fall unequally. And in the case of specific taxation 
 of property or business, the tax should be imposed so as to fall 
 equally upon all persons, whether natural or artificial.* 
 
 Seo. 470. statutes regulating taxes. — The difficulty attending the 
 imposition of taxes for various municipal and state purposes upon 
 railroads, on account of the various kinds of property and interests 
 held by them in various localities and states, has secured statutory 
 regulation on the subject in most, if not all, the states and terri- 
 tories of the Union ; and the constitutions of various states guard 
 the rights of citizens against legislative abuse, in this respect. - 
 
 But in the absence of statutory regulations, how and where 
 shall corporate property of a railroad company be valued and 
 
 Albany, 22 Ind. 204 ; Union Co. v. Bank v. Debolt, 1 Ohio St. 591 ; 2 
 Eordelon, 7 La. Ann. 193; Williams Kent's Com. 331 andjjotes. 
 V. Detroit, 2 Mich. 560; Mechanics' 
 
 ' The tax levied by a city must not v. Mathis,21 Ark.40. See, also, State v. 
 
 be oppressive or unequal. Columbia Lalhrop, 10 La. Aun. 398 ; State v. Og- 
 
 V. Beasly, 1 Humph. (Tenn.) 232; den,id. 402; Yeatman v. Crandall.ll id. 
 
 Hamilton v. St. Louis County Court, 220 ; Jamison v. New Orleans, 12 id. 
 
 15 Mo. 3. But in Arkansas, where the 346; Selby v. Levee Coms., 14 id. 434 ; 
 
 constitution provided for equal taxa- Lowell v. Oliver, 8 Allen, 247 ; State 
 
 tion according to the value of prop- v. Warren County, 19 Penn. St. 258 ; 
 
 erty, it was held that this provision re- Slaughter v. Commonwealth, 13 Gratt. 
 
 lated to ordinary state and county tax- 767; Kneeland v. Milwaukee, 15 Wis. 
 
 ation, and did not affect a statute 454 ; Fire Department v. Helfenstein, 
 
 authorizing a special tax on alluvial 16 id. 136. 
 lands for building a levee. McQehee * See 2 Kent's Com. 331 et seq.
 
 692 Private Corporations. 
 
 taxed ? Shall the land and improvements thereon, including the 
 erections and fixtures, and rolling stock, be assessed and taxed as 
 an entirety or separately ? Should they be taxed at the location 
 of the general office or place of business of the corporation, or 
 in the various places where they may be located or used ? 
 
 As to the mode of taxing the property of railroad companies, 
 it has been ably maintained, that the only just and equitable way 
 is that based upon profits. In the case of Paine v. Wright and 
 The Indianapolis cfc Bellefontaine R. Go.^^ the court say: 
 
 " Railroads have contributed more to the facilities of inter- 
 course, the interest of agricultm-e, to build up towns and extend 
 our inland commerce, than all other improvements. But in the 
 construction of these works, heavy expenditures have been incur- 
 red, and large debts contracted by way of loans of money and 
 otherwise, so that the companies are ill able to bear the pressure 
 of a heavy taxation. The expense of running the cars, making 
 repairs and meeting contingencies is very great ; and when to this 
 shall be added the interest on debts incurred, little or no profit 
 can be realized to the stockholders for some years after the road 
 is in operation. Lands, of necessity, are often received in pay- 
 ment of stock. These lands are taxed the same as lands held by 
 an individual, on the plausible ground that the lands of a corpora- 
 tion should be taxed the same as the lands of an individual. But 
 these lands are never held by the corporation for the purposes of 
 culture, but to be converted into money, or for the occupancy of 
 the road. They do not, in general, as the lands of an agricul- 
 turist, afford a profit by an increase of value. But the cor- 
 poration is taxed for the lands, and also for the structures made 
 by borrowed capital. This, in effect, is a taxation on borrowed 
 money, and is an addition to the interest. In all enterprises 
 intimately connected with the public interest, such as railroads, 
 banks, etc., which require a large investment of capital, there is 
 no mode of taxation so equal or just as a tax upon the profits. 
 Such investments are subject to many contingencies which do not 
 affect real estate. No estimate can show the expenditure required 
 on a railroad, nor the losses of a bank. As common carriers, the 
 railroad is responsible for injuries done to persons and property, 
 
 ' 6 McLean, 395. See, also, People v. Mayor of Brooklyn, 6 Barb. 209.
 
 Taxation. 693 
 
 through the neglect or want of skill in its agents ; and experience 
 has shown that juries are incUned most liberally to compensate 
 all who suffer by finding liberal if not extravagant damages. 
 Banks are liable to imposition and losses, through the failures of 
 borrowers, and counterfeit notes and drafts, which no one can fore- 
 tell. These casualties place at greater hazard the moneys invested 
 in railroads and banks than in real estate ; and although these estab- 
 lishments may be owned by individuals, yet they are so intimately 
 connected with the ])ublic interest and welfare, that stockholders 
 are distinguishable from the owners of other property." 
 
 Sec. 471. The statutes of the various states usually provide 
 for the levy of general taxes on personalty at the place of resi- 
 dence of the owner, and of real estate in the city or county where 
 located. In the case of ownership of railroad corporations, the 
 place of residence of the corporation within the state sometimes 
 becomes an important question for the purposes of taxation. For 
 such purposes what is the situs of the company ? The same 
 question is frequently presented in relation to the jurisdiction of 
 the courts, based upon the residence of the corporate person. In 
 the case of the Connecticut and Passumpsic Rivers Railroad 
 Company v. Cooper,^ the supreme court of Vermont, by Red- 
 field, J,, in discussing the question of the situs of the company, 
 observe : " We think it safe, as a general rule, to say that a rail- 
 way company, if it have any place of residence, inust be limited 
 to the range of its legally defined route. This is certainly in 
 analogy to all other corporate companies. They are held to have 
 their situs or residence where their principal business is trans- 
 acted. This is so in the case of banks, manufacturing companies, 
 and many others ; and, although these companies may, for some 
 purposes, transact business out of the range of their ordinary 
 locality, as they sometimes do even in other states and countries, 
 they are still regarded as having a fixed situs at the place where 
 their principal business is done." 
 
 '30Vt. 476. See, also. The People also, Sangamon & Morg. R. Co. v. 
 
 V. Peirce, 31 Barb. 138 ; South-western County of Morgan, 14 111. 163 ; State 
 
 R. Co. V. Paulk, 24 Ga. 356 ; and the v. Illinois Cent. R. Co., 27 id. 64; 
 
 English doctrine in Garton v. Great Mohawk & Hud. R. Co. v. Clute, 4 
 
 Western R. Co., E. B. & E. 837. See, Paige, 384.
 
 694 Pbivate Corpobations. 
 
 And in New Hampshire it has been held that if a railroad cor- 
 poration is located in another state, and all its property is taxed 
 in such state, the same as the property of natural persons, a stock- 
 holder in New Hampshire would not be liable to be taxed for his 
 stock in the company. ^ 
 
 Sec. 472. What corporate property is taxable ; double taxation.— 
 The real estate of a corporation is, as we have seen, generally 
 taxable in the localities where it is located, but the personal 
 property at the place of the location of its principal place of 
 business.'' This is in accordance with the doctrine of general 
 application to natural persons. Natural persons are generally 
 subject to taxation on personalty, at the place of their domicile. 
 But it has been maintained that the capital stock of a corporation 
 cannot be assessed and taxed, and also the real and personal 
 property in which the capital or its proceeds have been invested, 
 unless expressly so provided by statute, as this would be a double 
 taxation. Mr. Cooley, on this subject, observes: 
 
 "But the general principle would undoubtedly be that all 
 the property of a corporation, like that of a natural person, would 
 be liable to an ad valore7n tax, imposed upon property, and that 
 where the term 'citizen' or 'inhabitant,' is used in the revenue 
 laws of the various states, it includes private corporations for 
 pecuniary gain." ^ 
 
 Sec. 473. Corporate property and interests subject to, and exempt from, 
 tax. — It is perhaps a general rule, that the capital stock of a corpo- 
 ration, if taxable at all, is taxable at the place where the principal 
 office or place of business is located ; * and its real estate, where it 
 
 ' Smith V. Exeter, 37 N. H. 556. where the jurisdiction of the court 
 
 Rails, sleepers, bridges, etc., of a over the person depends upon the 
 
 railroad corporation, together with question of residence. See Andros- 
 
 the easement in the lands, within the coggiu, etc., R. Co. v. Stevens, 28 Me. 
 
 limits of a railroad, are real estate. 434 ; Bristol v. Chicago, etc., R. Co., 
 
 Providence, etc., R. Co. v. Wright, 3 15 111. 436 ; Rhodes v. Salem T., etc., 
 
 R. I. 459. See, also, Louisville, etc., R. Co., 98 Mass. 95. 
 
 R. Co. v. Commonwealth, 7 B. Monr. ^ Coo\ej on Tax. : Bangor, etc. R. Co. 
 
 160. V. Harris, 21 Me. 533. But see Cum- 
 
 '^ Sangamon, etc., R. Co. v. County, berland, etc , R. Co. v. Portland, 37 
 
 14 111. 163 ; State v. 111. Cent. R. Co., id. 444. 
 
 27id. 64; Mohawk, etc., R. Co. v.Clute, ■•Mohawk, etc., R. Co. v. Clute, 4 
 
 4Paige,384. The principle is the same Paige, 384 ; ante, § , and note 3.
 
 Taxation. 695 
 
 is located.' In Conwell v. Town of Connersville^ the supreme 
 court of Indiana held that a corporation can be taxed in the place 
 where the corporation is located, only upon the corporate property 
 as distinguished from the interests of the individual stockholders 
 therein ; and that, as to these interests, they were taxable in the 
 places where the stockholders respectively resided.' And it has 
 been held in New Hampshire, that wood, timber, logs and lum- 
 ber, and other articles or materials, distributed along the line of a 
 railway, for use in the construction and operation of the road, 
 should be treated as a part of the road, and taxed in the same 
 manner.* 
 
 But, as before observed, corporate taxation, and the place and 
 parties to be taxed, are now usually matters of statutory reg- 
 ulation subject to constitutional provisions, and the decisions 
 in reference to these questions in the various states are gene- 
 rally on the construction of these statutes and constitutional pro- 
 visions. 
 
 Thus, it has been held that a general statutory provision, 
 exempting corporate property from taxation, embraced only such 
 property as was essential in the execution of its purposes, and 
 did not cover property held by the corporation, as a mere conven- 
 ience ; " that the statute or charter of a railway corporation, 
 exempting its stock from taxation, covers gross income ; * that 
 where a specific mode of taxation is provided in the charter, this 
 is exclusive of all other modes ; ' that where there is a provision 
 for the payment of a tax on condition, as that the corporation 
 shall pay a certain tax when their net profits shall reach a certain 
 amount, it is exclusive of liability for taxes under other circum- 
 
 ' Carbon Iron Co. v. Carbon County, '" In Pennsylvania, see Lehigli Co. v. 
 
 39 Penn. St. 351. In this case it was Northampton, 8 W. & S. 334; Railway 
 
 held that the tax for state purposes v. Berks Co., 6 Penn. St. 70; Carbon 
 
 required to be paid at the auditor- Iron Co. v. Carbon County, 39 id. 231 ; 
 
 general's office was a tax on the cor- Lackawanna Iron Co. v. I.iuzerne 
 
 porate franchise, and not intended as County, 43 id. 434. Massachusetts, 
 
 an exemption from ordinary taxation. Worcester v. Western R. Co., 4 Mete. 
 
 - 15 Ind. 150. (Mass.) 564; Meeting House v. Lowell, 
 
 ^ See, also, McKeen v. Countv of lid. 588. New Jersey, State v. Mans- 
 
 Northampton, 49 Penn.St.519; White- field, 3 N. J. L. 510; Gardner v. State, 
 
 sell V. Same, id. 526; Bridgeport v. 1 id. 557. 
 
 Bishop, 33 Conn. 187 ; Union Bank v. « State v. Hood, 15 Rich. L. 177. 
 
 State, 9 Yerg. 490. "^ New York and Erie R. Co. v. 
 
 4 Fitchburg R. Co. v. Prescott, 47 Sabin, 26 Penn. St. 243; Iron Bank v. 
 
 N. H. 63. Pittsburgh, 37 id. 340.
 
 696 Private Cokpoeations. 
 
 stances, and that taxes can only be imposed when the condition is 
 fulfilled ; ' that a general exemption of property of the corporation, 
 but subjecting the stock in the hands of stockholders to taxa- 
 tion exempts the surplus funds and lands of the corporation ; " 
 that exemption of capital stock exempts property of the com- 
 pany, necessary to carry on business ; ' that where the charter of 
 a railroad corporation subjects it to certain specified taxation, but 
 exempts it from all further or other taxes or imposts, this exempts 
 the company perpetually from all taxation except that specified ; * 
 that where a railroad corporation, exempt from taxation, consoli- 
 dates with another not enjoying that immunity, such property of 
 the consolidated corporation is subject to taxation ; " and that, 
 where statute provided that a railroad corporation should be 
 exempt from taxation, except that portion of the permanent and 
 fixed works of the company as is within the state, and that as 
 regards such works no greater tax should be levied than in pro- 
 portion to the general taxes throughout the state at the same 
 time, it was held that such portion of the fixed works of the 
 company as was within the state was still subject to general 
 taxation for state and county taxes." But in all such cases the 
 exemption may be repealed by the legislature, under a special 
 reservation of the right so to do, or under a general statutory right, 
 to alter or amend charters.' 
 
 Under the statute of New York, of 1855, which provided that 
 all persons and associations doing business in the state and non- 
 resident thereof should be assessed and taxed on all sums invested 
 in any manner in said business, the same as if they were residents, 
 it was held that the statute applied to corporations, and that a 
 foreign insurance company was liable on securities, deposited un- 
 der the requirements of a statute with the comptroller of the state, 
 for the security of the policy-holders of the insurance company.* 
 
 1 State V. Minton, 23 N. J. L. 529. Delaware Railroad Tax, 18 Wall. 
 
 2State V. Tunis, 23N. J. L. 546. 206. 
 
 3 The Rome R. Co. v. Rome, 14 Ga. « Philadelphia, etc., R. Co. v. Bay- 
 
 275. less, 2 Gill, 355. 
 
 * State Bank v. Knoop, 16 How. ' Morris, etc., R. Co. v. Miller, 81 
 
 386; Woolsey v. Dodge, 6 McLean (C. N. J. L. 521 ; Jersey City, etc., R. Co. 
 
 C), 142. V. Jersey City, id. 575 ; Common- 
 
 " Philadelphia & Wilmington R. wealth v. Fayette County R. Co., 55 
 
 Co. V. State of Md., 10 How. (U. S.) Penn. St. 452. 
 
 876 ; Baltimore v. Baltimore & O. R. ^ International Life Ins. Co. v. Corn- 
 Co. , 6 Gill, 288 . See, also, In the missioners of Taxes, 10 Penn. St. 442.
 
 Taxation. 6H7 
 
 And under a statute of Massachusetts it was lield that a manu- 
 facturing corporation was taxable for its real estate in the place 
 where it was located, but that its personal property about its 
 manufactory should be assessed to the several individual mem- 
 bers, they being liable to be taxed for their several shares in such 
 property.^ 
 
 The decisions in these cases are perhaps important only as re- 
 cognizing the general doctrine that parties should not be twice 
 taxed on the same property ; that it cannot bo assessed lirst as the 
 property of the corporation, and, secondly, as the property of the 
 member." 
 
 On the subject of taxes on corporations Mr. Cooley observes : 
 " These are imposed in so many forms that an enumeration is 
 difficult. The following may be mentioned : 1. A specific tax 
 on the franchise. 2. A tax on the property by valuation. 3. A 
 tax on the capital stock. 4. A tax on the business done. 5. A 
 tax on dividends or on profits. Sometimes the franchise is taxed 
 and also the capital stock or the property, but to tax tlie capital 
 stock and also the property in which tlie capital is invested would 
 be imposing the burden twice on the same property, and, conse- 
 quently, unjust, if not illegal." ' 
 
 Sec. 474. Exemption statutes sustained.— Notwithstanding pub- 
 lic policy would seem to disfavor exemption from taxation, stat- 
 utes providing therefor are, perhaps, generally, held to be legal 
 by the courts. 
 
 And if a compensation has been paid to the state for the fran- 
 chise of a corporation and in lieu of taxes on the franchise, this 
 exempts the franchise from future taxation by the state, but it 
 would not exempt the corporate property from taxation. 
 
 On this question the supreme court of the United States say : 
 *'A franchise for banking is in every state of the Union recognized 
 
 1 Salem Iron Factory v. Danvers, 10 308, ~^ SX it was held that a corporation 
 Mass. 514 ; Amesbury Woolen Man. for making and supplying gas may be 
 Co. V. Inhabitants of Amesbury, 17 taxed in tlae town or city where it car- 
 id. 461. ries on its business, for all excess of 
 
 "^ See. also. Smith v. Burley, 9 N. H. the value of its stock over the value 
 
 423 ; Bank of Cape Fear v. Edwards, 5 of its real estate and machinery other- 
 
 Ired. 516 ; Gordon V. Baltimore, 5 Gill, wise taxable. Commonwealth v. 
 
 231 ; Cases of Taxation, 12 G.& J. 117. Lowell Gas-light Co., 12 Allen, 75. 
 
 3 Cooley on Taxation, 392. Under a See, also, Same v, Hamilton Man. Co., 
 
 statute of Massachusetts (1864, chap. id. 298. 
 88
 
 698 Private Corpokations. 
 
 as property. The banking capital attached to the franchise is 
 another property, owned in its parts by persons, corporate or 
 natural, for which they are liable to be taxed as they are for all 
 other property, f cr the support of the government." ^ 
 
 The general rule is, that a legislative body cannot limit the legis- 
 lative powers of its successors, and that all laws passed by the one 
 may be changed or abolished by another ; and it is only when the 
 revenue acts of such a body rise to the character of a contract, 
 as where stipulations are made in the charter of a corporation, in 
 relation to taxation of the corporate franchise or property, and 
 which charter is accepted, that the state can be bound thereby. 
 In such cases the provision would constitute a part of the contract, 
 and the corporation would be protected against the imposition of 
 more taxes, under the provision of the constitution of the United 
 States, inhibiting the states from passing any law impairing the 
 obligation of contracts. 
 
 Thus, where the incorporating act of a bank required the pay- 
 ment of a tax of twenty-five cents annually, on each share of 
 stock, in lieu of all tax and bonus, this was held to be a contract 
 between the state and the stockholders, and that such stock in 
 the hands of a stockholder was exempt from other taxation." 
 
 Taxation, being essential to the maintenance of a government, 
 the right of the legislature as its representative to levy taxes, it 
 has been held by some of the state courts, cannot with safety be 
 abridged or taken away by any stipulation or contract on its 
 part.' 
 
 But the general doctrine we have stated is supported by the 
 current of judicial decisions in the states, and by the uniform 
 
 ' 1 Gordon v. Appeal Tax Court, 3 same doctrine in Bank of 111. v. The 
 
 How. ( a. S.) 133 But see, qualifica- People, 6 111. 304; Home of the 
 
 tion or limitation of the doctrine, Friendless v. Rouse, 8 Wall. 430; 
 
 Baltimore v. Baltimore K. Co., 6 Gill, McGee v. Mathis, 4 id. 143; Gordon 
 
 288; Cases of Taxation, 13 Gill & J. v. The Appeal Tax Court. 3 How. (U. 
 
 117 ; State v. Powers, 4 N. J. 400; S ) 133; Pacific R. Co. v. Maguire, 20 
 
 Gordon v. The Appeal Tax Court, and id. 36. Bnt see Trask v. Maguire, 18 
 
 Cheston v. Same, 3 How. (U. S.) 133 ; id. 391. 
 
 Branch State Bank v. Knoop, 16 id. ^ Brewster v. Hough, 10 N. H. 138 ; 
 
 386 ; Jefferson, etc.. Bank v. Skelly, 1 Mott v. Penn. R. Co. . 30 Penn. St. 9 ; 
 
 Black, 436 ; Hardy v. Waltham, 7 Sandusky Bank v Wilbor, 7 Ohio St. 
 
 Pick. 108. 481 ; Skelly v. Jefferson Branch Bank, 
 
 ^ Johnson v. Commonwealth of Ky., 9 id. 606. But see Iron City Bank v. 
 
 7 Dana, 338 ; Central R., etc., v. Plattsburg,37 Penn. St. 340. 
 Georgia, 2 Otto (U. S.), 665. See, also,
 
 Taxation. 699 
 
 decisions of the federal courts.' lu Home of the Friendless v. 
 Roiise^^ the question presented to the supreme court of the 
 United States was, whether a statute to incorporate a charitable 
 institution, and declaring that the property of the corporation 
 should be exempt from taxation, and that a statutory provision 
 existing at the time, that every charter of incorporation should 
 be subject to alteration, suspension or repeal, at the discretion of 
 the legislature, should not apply to such corporation, became, 
 after the corporation had organized under such act, sucli a con- 
 tract as prevented the state from subsequently imposing taxes 
 upon it, and whether a statute, afterward passed by the legislature 
 taxing its corporate property, was a violation of the contract, and, 
 therefore, void. 
 
 The court say : — 
 
 " The validity of this contract is questioned at the bar, on the 
 ground that the legislature had no authority to grant away the 
 power of taxation. The answer to this position is, that the ques- 
 tion is no longer open for argument here, for it is settled by the 
 repeated adjudications of this court that a state may, by contract 
 based upon a consideration, exempt the property of an individual 
 or corporation from taxation either for a specified period or per- 
 manently. And it is equally well settled that the exemption is 
 presumed to be on sufficient consideration, and binds the state if 
 the charter containing it is accepted." ' 
 
 The doctrine of exemption by virtue of provisions contained in 
 a charter was extended by the supreme court of the United States 
 in Washington University v. Rouse* In this case, a charter was 
 
 ^ But in McCulloch v. State of Mary- '^ 8 Wall. 430. 
 land, 4 Wheat. 316, Marshall, C. J., ^ gee, also, New Jersey v. Wilson, 7 
 in bis opinion, maintains that the Cranch, 1G4 ; Gordon v. Appeal Tax 
 general doctrine of exemption did not Court, 3 How. (U. S.) 133; Piqua 
 prohibit states from taxing the real Bank v. Knoop, 16 id. 369; Ohio L. 
 property of the Bank of the United & T. Co. v. Debolt, id. 416; Dodge v. 
 States, in common with other real Woolsey, 18 id. 831 ; Mechanics and 
 property within the state, nor the in- Traders' Bank v. Thomas, id. 384 ; 
 terests which a citizen of the state Mechanics and Traders' Bank v. De- 
 may hold in the bank, in common bolt, id. 380; McGee v. Mathis, 4 Wall, 
 with other property of the same char- 143. 
 
 acter throughout the state. But it •» 8 Wall. 439. See, also, JeflFerson 
 
 was subsequently held in W^eston v. v. Skelly, 1 Black, 436 ; Illinois Cent. 
 
 The City of Charleston, 2 Pet. (U. 8.) R. Co. v. County, 17 111. 291 ; O'Don- 
 
 449, that owners of government stock uell v. Bailey, 24 Miss. 386; Sey- 
 
 of the United States were not liable to niour v. Hartford, 21 Conn. 481. 
 
 state taxation upon the stock. But exemptions are temporary.
 
 700 Private Corporations. 
 
 granted bj the legislature of Missouri to the Washington Uni- 
 versity, as an institution of learning. The court was divided in 
 this case as well as the case from which we have just quoted from 
 the opinion. Mr. Justice Davis, in delivering the opinion, refers 
 to the two cases, and says : " The object of the cliarter in the one 
 case was to promote a charity, in the other, to encourage learning. 
 Both were public objects of advantage to the country, and which 
 every government is desirous of promoting. Whether the en- 
 dowment of a charity is of more concern to the state than the 
 endowment of a university for learning, is within the power of the 
 legislature to determine. If the legislature has acted in a man- 
 ner to show that it considered the objects equally worthy of favor, 
 it is not the province of this court to pass on the wisdom of the 
 measure . " 
 
 But these cases were decided by a divi'ded court, Chase, C. J., 
 and Miller and Field, JJ., dissenting ' The dissenting opinion 
 by Mr. Justice Miller maintains the general doctrine of the 
 inviolability of contracts made between a state and its citizens, 
 where it is within the scope of the power of the state to act in 
 the matter, and the contract is not against general public policy. 
 But he held that a legislative body, sitting under a state constitu- 
 tion of the usual character, had no right to sell, give, or bargain 
 away forever, the taxing power of the state ; that this power is 
 absolutely essential to the perpetuity of the government ; that no 
 civilized government has ever existed that did not depend upon 
 taxation in some form for the continuance of its existence ; and 
 that to allow legislators to deprive the state forever, of the power 
 of taxation, would render it possible for them to destroy the 
 government they were appointed to serve.* 
 
 unless contained in the charter. South- of stockholders is exempt. Gor- 
 
 ern R. Co. v. City of Jackson. 38 Miss, don v. Appeal Tax Court, 3 How. (U. 
 
 334 ; Ohio Trust Co. v. Debolt, 16 How. S.) 133. So is the franchise. Wilming- 
 
 (U. S.) 416 ; Christ's Church v. Phila- ton R. Co. v. Reid, 13 Wall. 264. And 
 
 delphia, 24 id. 300. Under a general an exemption for a term of years is 
 
 exemption of corporate property from valid. Raleigh, etc., R. Co. v. Reid, 
 
 taxation, corporate stock in the hands id. 269. 
 
 ' And in the Delaware Railroad tax, to a contract so as to prevent a subse- 
 
 18 Wall. 206, it was held that an act quent legislature from imposing a 
 
 of the legislature, consolidating two further and a diflFerent tax. 
 
 railroads, which provided that the new ^ The argument against the power of 
 
 corporation should pay a certain tax the legislatures to exempt property 
 
 annually to the state, did not amount perpetually from taxation, in any case.
 
 Taxation. 
 
 701 
 
 If the question was an open one, there would be little doubt 
 that the enlightened judicial mind, seeing the danger to the 
 permanency of governments, by contracts, which take from 
 them the right of taxation, would declare such contracts void as 
 
 IB so well presented by the learned 
 judge that I insert it in this note. 
 He says : " It is the settled doctrine 
 of this court that it will, in every 
 case atfectiug personal rights, where, 
 by the course of judicial proceedings, 
 the matter is properly presented, decide 
 whetlier a state law impairs the obli- 
 gation of contracts; and if it does, will 
 declare such law ineffectual for that 
 purpose. And it is also settled beyond 
 controversy that the state legislatures 
 may, by the enactment of statutes, 
 make contracts which they cannot 
 impair by any subsequent statutes. 
 It may be conceded that such contracts 
 are so far protected by the provis- 
 ions of the federal constitution that 
 even a change in the fundamental law 
 of the state, by the adoption of a new 
 constitution, cannot impair them, 
 though provisions to that effect are 
 incorporated in the new constitution. 
 We are also free to admit that one of 
 the most beneficial provisions of the 
 federal constitution, intended to secure 
 private rights, is the one which pro- 
 tects contracts from the invasion of 
 state legislation. And that the manner 
 in which this court has sustained the 
 contracts of individuals has done 
 much to restrain the state legislatures, 
 when urged by the pressure of popu- 
 lar discontent, under the sufferings of 
 great financial disturbances, from 
 unwise as well as unjust legislation. 
 In this class of cases, when the va- 
 lidity of the contract is clear, and the 
 infringement of it by the legislature 
 of a state is also clear, the duty of 
 this court is equally plain But we 
 must be permitted to say that in de- 
 ciding the first of these propositions, 
 namely, the validity of the contract, 
 this court has in our judgment been 
 at times quick to discover a contract 
 that might be protected, and slow to 
 perceive that what are claimed to be 
 contracts were not so, by reason of 
 the want of authority in those who 
 profess to bind others. This has been 
 especially apparent in regard to con- 
 tracts made by the legislatures of 
 
 states, and by those municipal bodies 
 to whom, in a limited measure, some 
 of the legislative function has been 
 confided. In all such cases, where 
 the validity of the contract has been 
 denied, the question of the power of 
 the legislative body to make it neces- 
 sarily arises ; for such bodies are but 
 the agents and representatives of the 
 greater political body — the people, 
 who are benefited or injured by such 
 contracts, and who must pay, when 
 any thing is to be paid, in such cases. 
 That every contract fairly made ought 
 to be performed is a proposition which 
 lies at the basis of judicial education, 
 and is one of the strong desires of 
 every well-organized judicial mind. 
 That, under the intiuence of this feel- 
 ing, this court may have failed in some 
 instances to examine, with a judgment 
 fully open to the question, into the 
 power of such agents, is to be re- 
 gretted, but the error must be at- 
 tributed to one of those failings which 
 leans to virtue's side. In our judg- 
 ment, the decisions of this court, re- 
 lied upon as conclusive of these cases, 
 belong to the class of errors which we 
 have described. 
 
 " We do not believe that any legis- 
 lative body, sitting under a state con- 
 stitution of the usual character, has a 
 right to sell, to give, or to bargain 
 away forever, the taxing power of the 
 state. This is a power which, in 
 modern and political societies, is abso- 
 lutely necessary to the continued ex- 
 istence of every such society. While 
 under such forms of government the 
 ancient chiefs or heads of the govern- 
 ment might carry it on by revenues 
 owned by them personally, and by the 
 exaction of personal services from 
 their subjects, no civilized govern- 
 ment has ever existed that did not de- 
 pend upon taxation in some form for 
 the continuance of that existence. To 
 hold, then, that any one of the an- 
 nual legislatures can, by contract, de- 
 prive the state forever of the power of 
 taxation, is to hold that they can de- 
 stroy the government which they are
 
 702 Private Cokpoeations. 
 
 against public policy, and the security and existence of the gov- 
 ernment, which is paramount to every other political or social 
 object. No agent or representative of the sovereign authority 
 should be permitted, in any manner, to contract or stipulate to 
 suspend perpetually so important a function of government. If 
 the power is recognized in any case, it may be extended to divest 
 the government of all power in this respect ; and this possibility 
 is a sufficient reason for denying the power in any case. 
 
 Sec. 4Y5. indications that the doctrine will not be extended 
 
 After the many protests against the doctrine of exemption 
 of corporations for pecuniary gain from taxation, based 
 upon the stipulations contained in charters, or general statutes 
 providing for their incorporation, there seems to be a disposition 
 of some of the courts to limit rather than extend it. In a re- 
 cent case in the supreme court of the United States the facts 
 were as follows : The act of incorporation of a railroad company 
 exempted the capital stock of the company, and further provided 
 that the works, fixtures, workshops, warehouses, vehicles of trans- 
 portation and other appurtenances of the company, should be ex- 
 empt from taxation for ten years after the completion of the road 
 
 appointed to serve, and that their taxation, and cast all the burden of 
 action in that regard is strictly lawful, the support of the government, and the 
 " It cannot be maintained that this payment of its debts, on those who are 
 power to bargain away for an un- too poor or too honest to purchase such 
 limited time the right of taxation, if immunity. With as full respect for 
 it exists at all, is limited in reference the authority of former decisions, as 
 to the subjects of taxation. In all the belongs from teaching and habit to 
 discussions of this question, in this judges trained in the common-law 
 court and elsewhere, no such limita- system of jurisprudence, we think 
 tion has been claimed. If the legisla- that there may be questions touching 
 ture can exempt in perpetuity one the powers of legislative bodies, 
 piece of land, it can exempt all land, which can never be finally closed 
 If it can exempt all land, it can exempt by the decisions of a court, and 
 all other property. It can as well ex- that the one we have here considered 
 empt persons as corporations. And is of this character. We are strength- 
 no hindrance can be seen, in the prin- ened in this view of the subject, by 
 ciple adopted by the court, to rich cor- the fact that a series of dissents from 
 porations, as railroads and express this doctrine, by some of our prede- 
 companies, or rich men, making con- cessors, shows that it has never re- 
 tracts with legislatures, as they best ceived the full assent of this court ; 
 may, and with such appliances as it is and referring to those dissents for 
 known they do use, for perpetual ex- more elaborate defense of our views, 
 emption from the burdens of support- we content ourselves with thus re- 
 ing the government. The result of newing the protest against a doctrine 
 such a principle, under the growing which we think must finally be aban- 
 tendencyto special and partial legisla- doned.'' 
 tion, would be to exempt the rich from
 
 Taxation. 703 
 
 within the limits of the state. The company was also authorized 
 to borrow, from time to time, such sums of money as might be 
 required to construct the road, and to execute bonds and mort- 
 gages therefor on the property and franchise of the road. By 
 virtue of such authority money was borrowed and mortgage 
 bonds given therefor ; and the company having failed to pay its 
 bonds, held by the plaintiff, judgment was obtained thereon, and 
 a foreclosure of the mortgage was had, and the property and 
 franchise were sold to satisfy the same, and purchased by the 
 plaintiff in error. This action was brought by the state of 
 Louisiana against the purchaser to recover certain taxes. 
 
 The question presented was, whether, imder the circumstances, 
 the property and franchise was exempt from taxation. The 
 court held, that immunity from taxation did not accompany 
 the property in its transfer to the purchaser ; that exemption in 
 such cases was a personal privilege ; that the franchises of a rail- 
 road corporation are rights or privileges which are essential to the 
 operations of the corporation, such as to run cars, to take tolls, to 
 appropriate earth and gravel for the bed of its road, or water for 
 its engines, and without which its roads and works would be of 
 little value ; but, that immunity from taxation was not itself a 
 franchise of a railroad corporation which passes as such to a pur- 
 chaser of its property.^ Mr. Justice Field, in delivering the 
 opinion of the court, observes : " The question presented is, 
 whether, under the designation of franchise, the immunity from 
 taxation upon its property possessed by the railroad company ac- 
 companied the property, in its transfer to the defendant, and 
 whether that immunity was a mere personal privilege of the com- 
 pany, and, therefore, not transferable to others ? The supreme 
 court of the state took the latter view, and held that the exemp- 
 tion did not attach to the property of the corporation so as to fol- 
 low it into the hands of third parties. In this view M'e agree 
 with the state court. The greater part of the property outside of the 
 capital stock was liable to constant waste, deterioration and destruc- 
 tion, and, according to the ordinary course of business, would be 
 disposed of by the company as new works were required. It can 
 
 I Morgan v. Louisiana, 3 Otto, 217.
 
 704 Private Corporations. 
 
 hardly be supposed that the legislature intended that the exemp- 
 tion should follow the fixtures and vehicles of the company after 
 they had passed out of its control, so that, wherever found, the 
 power of taxation could not touch them ; or that workshops and 
 warehouses, ceasing to be the property of the company, should 
 carry to its subsequent possessors a privilege intended only for the 
 benefit of the corporation. The language of the statute requires 
 no such construction, and intendments will not be indulged to 
 enlarge the operation of a clause restraining the exercise of a sov- 
 ereign attribute of a state." ' In Illinois, where it was provided, 
 in a general act for the incorporation of banks, for the assessment 
 of taxes in a certain way, this was held not to be a contract on 
 the part of the government with the corporations organized under 
 it, so as to prevent the mode of assessment from being changed 
 by subsequent legislation.^ So, where the legislature of South 
 Carolina, in 1851, chartered a railroad company, but did not ex- 
 empt its property from taxation, but in 1855 amended the charter, 
 in which it exempted its property from taxation, and in 1863 it 
 passed an act, conferring all the powers, rights, and privileges 
 formerly granted to such company, to another corporation, which 
 had been incorporated in 1849 to build a railroad, it was held by 
 the supreme court of the United States, that the act of 1863 ex- 
 empted the last-named road from taxation, and that the legislature 
 could not repeal such act so as to subject it to taxation.^ In this 
 case the court observed : " It is said that the. power of taxation 
 is among the highest powers of a sovereign state ; that its exercise 
 is a political necessity, without which the state must cease to 
 
 ' See, also, The Delaware Railroad premium of ten cents a bushel on 
 
 Tax, 18 Wall. 206. every bushel of salt, made from 
 
 '^ Bank of the Republic v. County of water obtained by boring within the 
 
 Hamilton, 21 111. 5.3. state, and exemption from taxation 
 
 2 Humphrey V. Pegues, 16 Wall. 244. of the land used for such purposes, 
 
 But where an act of the legislature it was held that it was not an ir- 
 
 provided that the real property of an revocable contract, but a mere act 
 
 existing hospital should be thereafter of general legislation, and that it 
 
 exempt from taxes, and this was re- could be repealed at the will of 'the 
 
 pealed by a subsequent act, the last legislature, even after parties relying 
 
 act was held to be constitutional, upon the provisions of the act had 
 
 Christ's Church v. Philadelphia, 24 entered upon the business, which it 
 
 How. 300; 24 Penn. St. 229. And was the purpose of the act to encourage, 
 
 where the statute of a state offered a Salt Co. v. East Saginaw, 13 Wall. 373.
 
 Taxation. 705 
 
 exist; and that it is not competent for one legislature, by binding 
 its successors, to compass the death of the state. It is too late to 
 raise this question in this court. It has been held that the legis- 
 lature has power to bind the state in relinquishing its power to 
 tax a corporation. It has been held that such a provision in the 
 charter of an incorporation constitutes a contract, which the state 
 may not subsequently impair." ' 
 
 Sec. 476. Where corporate property is used in different states. — It IS 
 common for corporate property to be used for corporate purposes, 
 in two or more states, and the question has arisen in such cases as 
 to the place where it should be assessed and taxes be levied and 
 collected. If it is subject to taxation for general purposes in more 
 than one place, the corporation owning it "would be subject to an 
 unequal and unjust burden, which the law should not allow. This 
 question was recently presented to the supreme court of the 
 United States, in the case of St. Louis v. The Ferry Co.'' 
 
 The defendants were a corporation organized under the laws of 
 Illinois, and their ferry boats ran from that state across the Mis- 
 sissippi river to St. Louis, remaining there only a short time each 
 trip ; and the question was whether the city of St. Louis, by vir- 
 tue of a statute of the state, authorizing the city to tax all property 
 within it, could tax such property. The supreme court of the 
 United States held that the defendants were notliable to taxation 
 in St. Louis, although the boats were enrolled in that city in pur- 
 suance of the navigation acts, and the company had an office there, 
 and the principal officers lived there, and the directors held their 
 meetings there, and the corporate seal was kept there. The court 
 say : " In the jurisprudence of the United States, a corporation is re- 
 garded as in effect a citizen of the state which created it. It has 
 no faculty to migrate. It can exercise its franchises extra-terri- 
 torially, only, so far as ma}^ be permitted by the policy or comity 
 of other states. * * * When there is jurisdiction of neither 
 
 • See, also, Providence Bank v. Bil- v. Woodward, 4 Wheat. 518 ; The 
 lings, 4 Pet. 514 ; Dartmouth College Binghamton Bridge, 3 Wall. 51. 
 
 -' il Wall. 433. 
 
 89
 
 706 Private Cokporations. 
 
 the person nor property, the imposition of a tax wonld be ultra 
 vires and void. If the legislature of a state should enact that 
 the citizens or the property of another state or country should be 
 taxed in the same manner as the persons and property within its 
 own limits, and subject to its authority, or in any other manner 
 whatsoever, such a law would be as much a nullity, as if in con- 
 flict with the most explicit constitutional inhibition. Jurisdiction 
 is as necessary to valid legislation as to valid judicial action." 
 
 Sec. 477. Exemption of United States stocks, etc.— Within the SCOpe 
 of the powers conferred upon congress, by the provisions of the 
 federal constitution, the acts of congress are the supreme law 
 of the land, and with the exercise of such express powers as 
 are conferred upon that body, or such as are incidental to the 
 proper execution of such powers, the legislatures of the several 
 states have no right to interfere. Under the powers thus con- 
 ferred upon congress they possess the exclusive right of legisla- 
 tion in relation to various matters within even the territorial 
 limits of the states. 
 
 In McCulloch V. State of Maryland,^ it was observed by Chief 
 Justice Marshall, in relation to this subject, as follows : 
 
 " If any one proposition could command the universal assent 
 of mankind, we might expect it would be this, that the govern- 
 ment of the Union, though limited in its powers, is supreme within 
 its sphere of action. This would seem to result necessarily from 
 its nature. It is the government of all ; its powers are delegated 
 by all ; it represents all, and acts for all. Though any one state 
 may be willing to control its operations, no state is willing to 
 allow others to do so. 
 
 " But the question is not left to mere reason ; the people have 
 in express terms decided it, by saying : ' the constitution and laws 
 of the United States made in pursuance thereof shall be the su- 
 preme law of the land,' and by requiring that the members of the 
 state legislatures and the officers of the executive and legislative de- 
 partments of the states shall take the oath of fidelity to it. The 
 government of the United States, then, though limited in its pow- 
 ers, is supreme, and its laws when made in pursuance of the con- 
 
 ' 4 Wheat. 316.
 
 Taxation. Y07 
 
 stitution form the supreme law of the land, ' any thing in the 
 constitutions or laws of the states to the contrary notwith- 
 standing.' 
 
 " Among the enumerated powers we do not find that of estab- 
 lishing a bank or creating a corporation. But there is no phrase in 
 the instrument, which, like tlic articles of confederation, excludes 
 incidental or implied })owers, and which requires that every thing 
 granted shall be expressly and minutely described. * * * It 
 cannot be denied that the powers given to the government imply 
 ordinary means of execution. That, for example, the power of 
 raising revenue, and applying it to national purposes, is admitted 
 to imply the power of conveying money from place to place, as 
 the exigencies of the nation may require, and of employing the 
 usual means of conveyance. * * * The government which 
 has a right to do an act and has had imposed on it the duty of 
 performing that act, must, according to the dictates of reason, be 
 allowed to select the means ; and those who contend that it may 
 not select any appropriate means, that one particular mode of ef- 
 fecting the object is excepted, take upon themselves the burden of 
 establishing that exception. * * * 
 
 "After the most deliberate consideration it is the unanimous 
 and decided opinion of the court that the act to incorporate the 
 Bank of the United States is a law made in pursuance of the con- 
 stitution and is a part of the supreme law of the land. The 
 branches, proceeding from the same stock, and being conducive 
 to the complete accomplishment of the object are equally consti- 
 tutional. * * * That the power of taxation is one of vital 
 importance ; that it is retained by the states ; that it is not 
 abridged by the grant of a similar power to the government of 
 the Union; that it is to be concurrently exercised by the two 
 governments, are truths which have never been denied. But 
 such is the paramount character of the constitution, that its capac- 
 ity to withdraw any subject from the action of even this power 
 is admitted. The states are expressly forbidden to lay any duty 
 on imports or exports, except what may be absolutely necessary 
 for executing their inspection laws. If the obligation of this 
 prohibition must be conceded — if it may restrain a state from the 
 exercise of its taxing power on imports and exports, the same par-
 
 708 Private Corporations. 
 
 amount character wonld seem to restrain, as it certainly may re- 
 strain, a state from such other exercise of this power, as in its 
 nature incompatible with, and repugnant to, the constitutional laws 
 of the Union. * * * 
 
 " That the power of taxing it [the bank] by the states may be 
 so exercised as to destroy it is too obvious to be denied. But 
 taxation is said to be an absolute power, which acknowledges no 
 other limits than those expressly prescribed in the constitution, 
 and, like sovereign power of every other description, is trusted to 
 the discretion of those who use it. 
 
 " But the very terms of this argument admit that the sover- 
 eignty of the state, in the article of taxation itself, is subordinate 
 to, and may be controlled by, the constitution of the United States. 
 How far it has been controlled by that instrument is a question 
 of construction. In making this construction no principle, not 
 declared, can be admissible, which would defeat the legitimate 
 operations of the supreme government. It is of the very essence 
 of supremacy, to remove all obstacles to its action within its own 
 sphere, and so to modify every power vested in subordinate gov- 
 ernments, as to exempt its own operations from their own in- 
 fluence. * * * 
 
 " The people of a state give to their government a right of tax- 
 ing themselves and their property, and as the exigencies of govern- 
 ment cannot be limited, they prescribe no limits to the exercise of 
 this right, resting confidently on the interest of the legislator 
 and on the influence of the constituents over their representatives 
 to ffuard them ao-ainst its abuse. 
 
 "But the means employed by the government of the Union 
 have no such security, nor is the right of a state to tax them sus- 
 tained by the same theory. Those means are not given by the 
 people of a particular state, not given by the constituents of the 
 legislature, which claim the right to tax them, but by the people 
 of all the states. They are given by all for the benefit of all, and 
 upon theory, shonld be subjected to that government only, which 
 belongs to all." ' 
 
 1 See, also,Westonv. City of Charles- Bank, 9 Wheat. 732; Bank of Corn- 
 ton, 3 Pet. 449 ; Osborn v. United States merce v. New York City, 2 Black, 620.
 
 Taxation. 709 
 
 In the case of Bank of Commerce v. New York Citij^ the 
 question involved was whether the stock of the United States, 
 constituting most of the capital stock of the bank, incorporated 
 under the laws of New York, was subject to a tax according to 
 its value, under the revenue laws of that state. On this question 
 Mr. Justice Nelson, after referring to various authorities bear- 
 ing upon the question and sustaining exemption in such cases, 
 observes : 
 
 " The conclusive answer to the attempted exercise of state 
 authority in all these cases is, that the exercise is in derogation 
 of the powers granted to the general government, within which, 
 it is admitted, it is supreme. That government whose powers, 
 executive, legislative or judicial, wliether it is a government of 
 enumerated powers like this one or not, are subject to another 
 distinct government, cannot be sovereign or supreme, but subor- 
 dinate and inferior to the other. This is so palpable a truth that 
 argument would be superfluous. Its functions and means essen- 
 tial to the administration of the government, and the employment 
 of them, are liable to constant interruption and possible annihi- 
 lation. The case in hand is an illustration. The power to borrow 
 money on the credit of the United States is admitted. It is one 
 of the most important and vital functions of the general gov- 
 ernment, and its exercise a means of supplying the necessary 
 resources to meet exigencies in times of peace or war. But what 
 avail is the function or the means, if another government may tax 
 it at discretion. It is apparent that the power, function, or means, 
 however important and vital, are at the mercy of that govern- 
 ment. And it must be always remembered, if theright to im- 
 pose a t;ix at all exists on the part of the other government, ' it 
 is a right which in its nature acknowledges no limits.' And the 
 principle is equally true of every power or function of a gov- 
 ernment subject to the power or control of another." 
 
 It will be apparent that it is difficult, in the somewhat com- 
 plicated structure of our state and national governments, to fix 
 the exact boundary line between the two ; and this question of 
 taxation lias been one of the prolific sources of embarrassment 
 in tliis respect. Their powers are so closely and intimately 
 
 ' 2 Black (U. S.), 630.
 
 710 Private Coepoeations. 
 
 related, that where tlie limits of the one is fixed the other ends, 
 and the whole coniplicated structure may become harmonious, 
 only, by application of the fundamental principle that each is 
 sovereign and independent within the proper sphere and scope of 
 its powers, and may exercise the functions of sovereignty as 
 provided by the federal constitution, in the one case, and subject 
 only to the limitations of the constitutions of the respective states, 
 and of the federal constitution, in the other. 
 
 Sec. 478. EKemption from taxation under the national banking lavr. — 
 
 The national banking law, on the subject of taxation, provides 
 as follows : — 
 
 " Sec. 5214. In lieu of all existing taxes, every association shall 
 pay to the treasurer of the United States, in the months of 
 January and July, a duty of one-half of one per centum each 
 half-year upon the average amount of notes in circulation, and a 
 duty of one-quarter of one per centum, each half-year, upon the 
 average amount of its deposits, and a duty of one-quarter of one 
 per centum, each half-year, on the average amount of its capital 
 stock, beyond the amount invested in United States bonds. * * 
 
 "Sec. 5219. Nothing herein shall prevent all the shares in any 
 association from being included in the valuation of the personal 
 property of the owner or holder of such shares, in assessing taxes 
 imposed by authority of the state within which the association is 
 located ; but the legislature of each state may determine and direct 
 the manner and place of taxing all the shares of national banking 
 associations located within the state, subject only to the two 
 restrictions, that the taxation shall not jbe at a greater rate than 
 is assessed upon other moneyed capital in the hands of individual 
 citizens of such state, and that the shares of any national banking 
 associations owned by non-residents of any state shall be taxed 
 in the city or town where the bank is located, and not elsewhere. 
 Nothing herein contained shall be construed to exempt the 
 real property of associations from either state, county, or muni-
 
 Taxation. 711 
 
 cipal taxes, to tlie same extent, according to its value, as other 
 real property is taxed." ^ 
 
 Uuder the foregoing provisions it was held, in Van Allen v. 
 The Assessors,'' that the shares of banking associations, organized 
 under said act and in the liands of the sliareholdcrs, were subject 
 to taxation by the state in which the association is formed, sub- 
 ject to the restrictions mentioned, although the wliole capital of 
 such association may be invested in national securities, which are 
 declared by an act of congress to be " exempt from taxation by 
 or under state authority." ' 
 
 Sec. 522. Municipal subscriptions in aid of corporate enterprises and 
 taxation therefor. — According to many authorities, the public inter- 
 est is so much identified with railroad and other corporate enter- 
 prises, as to authorize a subscription of towns, cities or counties, 
 to the corporate stock, by virtue of a power conferred upon tliem 
 by statute, especially where such roads are constructed tlu'ough, 
 or such enterprises are organized and carried on within, such towns, 
 cities or counties.* Subscriptions made by the proper agents of 
 such towns, cities or counties, duly authorized therefor, have, 
 perhaps, usually been held binding upon tlie municipal corpora- 
 tions whom they represent; and if the authority to make such 
 subscriptions on the part of such corporations exists, it would be 
 the manifest duty of the proper authorities, in the absence of 
 other provisions, to levy and collect a special tax for the purpose 
 
 1 Rev. Stat. U. S. 1874 ; Act June 3, * Sharpless v. The Mayor of Pliila- 
 
 1864. delpliia,21 Penn. St. 147 ; Moers v. The 
 
 '■'3 Wall. 573. City of Reading, id. 188; Cincinnat-i, 
 
 'See, also, the same doctrine in etc., R. Co. v. Commissiouers, 1 Ohio 
 
 Lionberirer v. Rouse, 9 Wall. 408 ; Na- (N. S.), 77 ; Case v. Dillou, 3 id. 607 ; 
 
 tioaal Bauk v. Commonwealth, id. New Orleans, etc., R. Co. v. Succession, 
 
 353; Minizerv. County of Montgomery, etc., 8 La. Ann. 341, Slack v. Mays- 
 
 54 I'enn. St. 139 ; Monroe Co. Sav. ville, etc., R. Co , 13 B. Monr. 1 ; Cov- 
 
 Bank v. Rochester, 37 N. Y. 365 ; So- ington, etc., R. Co. v. Kenton Co. Ct., 
 
 ciety, etc., v. Coite, 6 Wall. 594 ; Prov- 13 id. 144 ; Talbot v. Dent, 9 id. 526 ; 
 
 ident Inst. v. Massachusetts, id. 611. Justices, etc., v. Turupike Co., 11 id. 
 
 But see Bank Tax Case, 2 id. 200. 145; Shaw v. Deunis, 10 111. 405; 
 
 United States certificates of indebted- People v. Mayor, etc., 4 N. ¥. 419; 
 
 ness, under the act of March 1, 1863, Bridgeport v. Housatonic R. Co., 15 
 
 are not exempt from taxation. People Conn. 475 ; Stein v. City of Mobile, 24 
 
 V. Hoffman, 37 N. H. 9. And under Ala. 591 ; Nichol v." Nashville, 9 
 
 the act of February 25, 1863. legal Humph. 252; Augusta Bank v. Au- 
 
 teuder notes are not exempt. People gusta, 49 Me. 507; Parker v. Scogin, 
 
 V. Board of Supervisors, 37 N. Y. 21. 11 La. Ann. 639.
 
 712 Pkivate Corporations. 
 
 of meeting sucli obligations. But, on this subject, there has been 
 a great diversity of views and decisions, and in the same states, 
 the decisions have fluctuated.* 
 
 Mr. Redfield, on this subject, observes : " It is not now import- 
 ant to discuss the principle of these conflicting decisions, since the 
 tide of judicial opinion is almost all in one direction and not in 
 concurrence with the latter determinations. For ourselves, we 
 are free to confess that we could never comprehend tlie basis upon 
 which so many able jurists in this country have professed to per- 
 ceive, clearly, the reason for giving municipal corporations the 
 power to become stockholders in railway companies. We have 
 always felt that it was one of those cases in jurisprudence where 
 the wish was father to the thought." ^ 
 
 And Mr. Dillon says : " The most noted of extraordinary 
 powers conferred upon municipal corporations is the authority to 
 aid in the construction of railways by subscription to their stock, 
 and taxing the inhabitants or the property within their limits to 
 pay the indebtedness thereby incurred. Legislation of this kind 
 had its origin within a period comparatively recent, and has been 
 more or less resorted to, at times, by almost every state in the 
 Union. As it is the author's duty, in a work of this character, to 
 state what the law is, rather than what, in his judgment, it ought 
 to be, he feels constrained to admit that a long and almost un- 
 broken line of judicial decisions in the courts of most of the 
 states, has established the principle that, in the absence of special 
 restrictive constitutional provisions, it is competent for the legis- 
 lature to authorize a municij)al or public corporation to aid, in the 
 manner above indicated, the construction of railways running 
 near, or to, or through them. * * * Notwithstanding the 
 opinion of so many learned and eminent judges, there remain seri- 
 ous doubts as to the soundness of the principle, viewed simply as 
 one of constitutional law. Eegarded in the light of its effects, 
 however, there is little hesitation in affirming that this invention 
 
 ' See, against tliis doctrine, Stokea St. Louis v. Alexander, 23 Mo. 483 ; 
 
 V. County of Scott, lOTowa, 166 ; State Thorpe v. Rutland, etc., R. Co., 27 Vt. 
 
 of Iowa y . County of Wapello, 13 id. 140 ; Thompson v. Lee County, 3 Wall. 
 
 3^8 ; (xi-iffith v. Commissioners, etc., 327. The contrary authorities will be 
 
 20 Ohio, 609; Pennsylvania R. Co. v. cited hereafter. 
 
 City of Philadelphia, 47 Penu. St. 189; ^ j Redf. on Rail., § 280, note 1. 
 Taylor v. Newberne, 2 Jones' Eq. 141 ;
 
 Taxation. T13 
 
 to aid the enterprises of private corporations, has proved itself 
 baneful in the last degree." ' 
 
 Notwithstanding the reasons adduced against the doctrine, based 
 upon fundamental principles of the law, the authorities have 
 constantly been multiplying in support of the right of municipal 
 corporations to subscribe for the stock, and thereby aid in the 
 construction of railroads and other corporate enterprises. 
 
 " The tide rolls on with tlie general approbation, and the only 
 hope now is to be able to fix such limits to railway extension, by 
 means of municipal aid, that the entire property of the country 
 may not be thrown into public and official administration by 
 means of the unlimited power of extension of taxation." ' 
 
 Where there is no special constitutional limitation on the sub- 
 ject, and authority is conferred for this purpose, on the town, city, 
 or county, it seems settled by at least the greatest number of 
 authorities, that they may subscribe for railroad or other corporate 
 stock, borrow money to pay for the same, and levy a tax to pay 
 the subscription or repay the loan ; and that this authority may 
 be exercised without a submission of tlie matter to the citizens, or 
 an approval of the same by a popular vote.^ 
 
 The consideration of this question, in this connection, is pertinent 
 and important only as it involves the question of taxation. It is 
 evident that if a municipal corporation may subscribe for, or bor- 
 row money to pay a subscription to, a railroad or other private 
 
 ' Dill, on Man. Corp., t$ 104. acquiescence in the validity of bonds 
 '■'I Redf. on Raihv., ^ 3o0. See, issued by a municipal corporation 
 however, recent decisions against the would raise a presumption that tliere 
 legality of municipal aid in sucli cases, was a compliance with the requisite 
 Fisk V City of Kenosha, 26 Wis. 33 ; formalities in issuing them. See. also, 
 English V. Chicot Co. , 2(5 Ark. 454; the same general doctrine in New 
 Hanson v. Vernon, 27 Iowa. 28 ; Whit- York. People v. Mitchell, 35 N. Y. 
 ing V. Sheboygan R. Co., 25 Wis. l')7 ; 551 ; Wiiite v. Syracuse & U. Q. Co., 14 
 People V. Saiem, 20 Midi. 452; Thorpe B:irb 55y ; Copes v. Charlestown, 10 
 V. Rutland, etc., R. Co., 27 Vt. U ) ; Hicix. (S. C.) 491 ; Clark v. City of Ro- 
 State V. ('onlin, id. 318 ; Lincoln v. Chester, 24 Barb. 440 ; Grant v. Court- 
 Smith, id. 328 ; State v. Parker, 26 id. er, id. 232 ; Benson v. Mayor of Al- 
 357; Walker V. City of Cincinnati, 21 banv, id. 248; Starin v. Genoa. 23 
 Jhio St. 14; Beckel v. Uniim Tp., 15 N. Y. 439; Winn v. Macon, 21 Ga. 
 id. 437. 275, where it was held that the legis- 
 ^ la addition to the authorities al- lature might ratify a subscription 
 ready cited in support of this view, made without authority. And the 
 see, also, Thomson v. Lee County, 3 same doctrine was held in Butler v. 
 Wall. ;127 ; Bnty v. City of Muscatine, Dunham, 27 111. 474. and Common- 
 8 id. 575 ; Pendleton v. Army, 13 id. wealth v. Perkins, 43 Penn. St. 400. 
 297, where it was also held that long 
 
 90
 
 714 Private Corporations. 
 
 corporation, the money requisite to liquidate such indebtedness 
 imist be raised in the usual way, by a levy and collection of taxes 
 therefor. And such levy and collection would not only be a duty 
 imposed upon the proper officers of the corporation, but the obli- 
 gation in .this respect could be enforced by mandamus} 
 
 ' State V. City of Davenport, 12 Iowa, 5 id. 705 ; Butz v. City of Muscatine, 8 
 
 335 ; Von Hoffman v. City of Quincy, id. 575 ; Mayor v. Lord, 9 id. 409. See 
 
 4 Wall. 535; Supervisors v. United Mandamus. 
 States, id. 435 ; City of Galena v. Amy,
 
 Negligence and Wrongful Acts of Agents, etc. 715 
 CHAPTER XXIII. 
 
 NEGLIGENCE AND WKONGFUL ACTS OF AGENTS OR 8EUVANT8. 
 
 Sec. 480. Corporate liability for negligence and wrongful acts of agents 
 
 and servants. 
 Sec. 481. Illustration of the rule. 
 Sec. 483. Tlie maxim quifdcit per alium facit per se, especially applicable 
 
 to corporations. 
 Sec. 483. Cases illustrating the maxim. 
 Sec. 484. Id. 
 Sec. 485. Id. 
 Sec. 486. Id. 
 
 Sec. 487. Real test of liability. 
 Sec. 488. Implied powers of agents. 
 Sec. 489, Matters to be considered in determining whether the act is 
 
 within the scope of the agent's authority. 
 Sec. 490. Contractor's and contractee's liability. 
 Sec. 491. Liability in case of a nuisance attaches only when a nuisance 
 
 necessarily results. 
 Sec. 492. Corporations bound to the same degree of care as natural per- 
 sons — degree of care. 
 Sec. 493. Not insurers against all casualties. 
 Sec. 494. Care required of railroad corporations in relation to engines, 
 
 cars, track, etc. 
 Sec. 495. Id. 
 
 Sec. 496. Instances of negligence where the corporation was eld liable. 
 Sec. 497. Duty of railroad corporations. 
 Sec. 498. Id. 
 
 Sec. 499. Injuries received in getting upon a train. 
 Sec. 500. Accommodations — contributory negligence. 
 Sec. 501. Duty to passengers. 
 Sec. 502. Id. 
 
 Sec. 503. Liability for willful wrongs of agents. 
 
 Sec. 504. Liability of railroad corporations for delay in running trains. 
 Sec. 505. Liability for negligence in constructing or repairing railroads, 
 
 or for nuisances. 
 Sec. 506. Engines and machinery. 
 
 Sec. 507. Application of the maxim sic utere tuo ut alienum non Imdas. 
 Sec. 508. Contributory negligence. 
 Sec. 509. Consequential damages. 
 
 Sec. 510. Injury to persons and property by running of trains. 
 Sec. 511. Trespassers on the tracks. 
 Sec. 512. Different rule as to children. 
 Sec. 518. Injuries to animals. 
 Sec. 514. Id.
 
 716 
 
 Private Corporations. 
 
 Sec. 515. Inatances of liability for other torts of servants. 
 Sec. 51G. Liability to indictment. 
 
 Sec. 480. Corporate liability for negligence and wrrongful acts of agents 
 or servants.— A corporation being an artificial person must neces- 
 sarily discharge its functions through agents and servants, and as 
 a result, is necessarily and justly held chargeable for the manner 
 in which their duties are discharged. It is liable for the negligent 
 or tortious acts of its servants or agents w^ithin the scope of their 
 authority, upon the same grounds, in the same manner and to the 
 same extent as an individual, and that, too, without any reference 
 to the objects or purposes for which it was established or the 
 powers conferred or restrictions imposed upon it by law. The 
 defense of xdtra vires does not generally apply in cases of tort.^ 
 Tlie law never authorizes an unlawful act. A corporation has no 
 authority from its charter or from the general law to publish 
 
 ' " Corporations," says the court in 
 Bissell V. Southern, etc., R. R. Co., 23 
 N. Y. 258, " like natural persons have 
 the capacity to do wrong ; and toheii, 
 ih their dealings, they break over the re- 
 straint imposed upon them, an exemp- 
 tion from liability cannot he claimed on 
 the mere ground that they have no 
 power to aety Green v. London, etc.. 
 Omnibus Co,, 7 C. B. (N. S.) 290 ; Lim- 
 pus V. General Omnibus Co., 1 H. & 
 C. 528. Where a corporati'^n intrusts 
 an agent with a duty that does or tnay 
 involve the use of force and personal 
 violence to others, if the servant, in 
 the discharge of such duty, goes 
 beyond the proper limits in its use, 
 the corporation is answerable for the 
 consequences. Hewett v. Swift, 3 
 Allen (Mass.), 420 ; Moore v. Fitch- 
 burgh R. Co., ante. So where the 
 act may result in a nuisance. Rex v. 
 Medlev, ante; Ellis v. Sheffield Gas 
 Co., 18 Jur. 146. The liability of a 
 corporation for the wrongful acts of its 
 agents stands upon the same ground 
 as that of a natural person, and it is 
 liable for the consequences of wrong- 
 ful acts committed by them, within 
 the scope of their authority, however 
 foreign to its nature, or however much 
 the same may be in excess of its 
 irranted powers. N. Y. & New Haven 
 R. Co. V. Schuyler, 34 N. Y. 30; 
 Kaeass v. Schuylkill Bank, 4 Wash. 
 
 (U. S. C. C.) 9; Goodspeed v. East 
 Haddam Bank, 22 Conn. 530. The 
 ground upon which this liability is 
 predicated is, that, as a corporation 
 necessarily acts by agents, by com- 
 mitting «n?/ authority to them, it must 
 be made chargeable for any abuse of 
 the power so intrusted to them, 
 rather than an innocent party, nowise 
 in fault. Thus, where tbe officers 
 of a corporation issue fraudulent 
 stock and permit its transfer, it is 
 liable to the party receiving such 
 stock, precisely the same as it would 
 be if the stock was genuine. The 
 transaction is fraudulent and is the 
 cause of the injury and the basis of 
 recovery. The court, under such cir- 
 cumstances, will not hear the party 
 upon its assertion that the act is ^dtra 
 vires. N. Y. & N. H. R. Co. v. 
 Schuyler, ante; Aldrich v. Press Print- 
 ing Co.. 9 Minn. 133; Whitfield v. S. 
 E.^R. Co., 31 L. T. 113 ; Terre Haute 
 Gas Co. v. Teel, 20 Ind. 131 ; Taylor 
 V. Boston Water Power Co., 12 Gray 
 (Mass.), 415 ; Moore v. Fitchburgh R. 
 Co., 4 id. 465; St. Louis, etc., R. 
 Co. v. Dalby, 19 111. 353; Foote v. 
 Cincinnati, 9 Ohio, 31 ; Duncan v. Sur- 
 rey Canal, 3 Starkie, 50; Stevens v. 
 Boston, etc., R. Co., 1 Gray, 277 ; Rex 
 v. Medlev, 6 C. & P. 292; State v. Vt. 
 Cent. R. Co., 27 Vt. 103 ; Hewett v. 
 Swift, 3 Allen, 420 ; Thayer v. Boston
 
 Negligence and Wrongful Acts of Agents, etc. 717 
 
 a libel^ to commit an assault, or to erect or maintain a nuisance, 
 yet it may, through its servants or agents, commit these, as 
 well as other offenses, and be answerable therefor, either civilly 
 or criminally, the same as an individual would be.' They 
 are liable for the torts of their agents as well as for their con- 
 tracts,"'' but in order to establish a ground of recovery the act 
 must be one that was within the scope of the authority of such 
 agent or servant.' 
 
 Sec. 481- illustration of the r\Ue. — Thus, if an agent of the 
 corporation commits an assault, unless it was fairly within the 
 scope of his duty, the corporation cannot be held chargeable 
 therefor, as where an officer of a bank assaults a person who 
 goes there upon business ; * but if the duty committed to the 
 agent was such that the assault was an incident thereof, that is, if 
 it was committed in the discharge of such duty and in further- 
 ance thereof, the corporation is liable therefor tlie same as an 
 individual would be. Thus, a railroad company, by placing a 
 conductor in charge of a train of cars to collect fares, is liable 
 for an assault committed by him or by his direction in discharg 
 ing that duty, even though the act is ill-advised, unnecessary 
 and entirely unlawful.' 
 
 19 Pick. (Mass.) 511 ; Thatcher v. Lvman ■». White River Bridge Co., 2 
 Bank, 5 Sandf. (N. Y.) 121 ; Beach v. Aiken (Vt.), 255 ; Whiteman v. R. Co., 
 Fulton Bank, 7 Cow. (N. Y.) 485; 2 Harr. (Del.) 514; Underwood o. New- 
 Edwards V. Union Bank, 1 Fla. 136 ; port Lyceum, 5 B. Monr. (Ky.) 129. 
 
 ' First Baptist Church v. Schenec- * Wood's Law of Master and Serv- 
 
 tady, etc., R. R. Co.,5 Barb. (N. Y.) ant, 548-580. In Ramsden v. Boston 
 
 79 ;" Rhodes v. Cleveland, 10 Ohio, 159 ; & Albany R. Co., 104 Mass. 117; 6 Am. 
 
 Thompson ■«. New Orleans & Carrolton Rep. 117, the female plaiutiflf was a 
 
 Co., 10 La. Ann. 403; Little Miami pa.ssenger upon the defendants' rail- 
 
 R. R. Co. V. Stevens, 20 Ohio, 415. road, and upon being called upon for 
 
 ^ Beach v. Fulton Bank, 7 Cow. (N. her fare paid it to the conductor. 
 
 Y.) 485 ; Hawkins v. Dutchess, etc.. Soon after he called upon her again 
 
 Steamboat Co., 2 Wend. (N. Y.) 452; for her fare, and she declined to pay 
 
 Lyman v. White River Bridge Co., 2 him, informing him that slie had al- 
 
 Aik. (Vt.) 255 ; Moore v. Fitchburgh R. ready paid it to him. This the con- 
 
 R. Co., 5 Gray (Mass.), 465. ductor denied, and used very abusive 
 
 ^Orr V. Bank of United States, 1 and ins alting language to her, and de- 
 Ohio, 36. manded that she should give him her 
 
 * Orr 13. Bank, ante parasol to keep as security for hel
 
 718 
 
 Private Cokpokations. 
 
 Sec. 482. The maxim, qui facit per alium facit per se, specially appli- 
 cable to corporations. — The rule IS, that " when a person puts 
 another in his phice to do certain acts in his absence, he necessarily 
 leaves him to determine for himself, according to his judgment 
 and discretion, according to circumstances and exigencies that may 
 arise, when and how the act is to be done, and trusts him 
 for its proper execution ; consequently he is liable for the 
 wrongful execution of the act, both in the manner and occasion of 
 doing it, provided it is done hona fide in the prosecution of his 
 business and within the scope of the servant's express or implied 
 authority, and not from mere caprice and wantonness, and wholly 
 
 fare, which she refused to do, and the 
 conductor thereupon took hold of the 
 parasol and forcibly wrenched it from 
 her possession. The lower court held, 
 as a matter of law, that no recovery- 
 could be had, because no authority, 
 express or implied, existed on the part 
 of the conductor to seize the property 
 of a passenger for the payment of 
 fare. But, upon appeal, this ruling 
 was reversed. Gray, J., remarking: 
 " The use of unwarrantable violence 
 in attempting to collect fare of the 
 plaintiff was as much within the scope 
 of the conductor's employment as the 
 exercise or threat of unjustifiable 
 force in ejecting a passenger from the 
 cars. Neither the corporation nor the 
 conductor has any more lawful au- 
 thority to needlessly kick a passenger 
 or make him jump from the cars when 
 in motion than to wrest from the 
 hands of a passenger an article of 
 apparel or personal use, for the pur- 
 pose of compelling payment of fare. 
 Either is an unlawful assault ; bat, if 
 committed in the exercise of the gen- 
 eral power vested by the corporation 
 in the conductor, the corporation as 
 well as the conductor is liable to the 
 party injured." 
 
 In another case. Holmes v. Wake- 
 Qeld ei al., 12 Allen (Mass.), 580, it 
 was held that even though the plain- 
 tiff was a trespasser at the time when 
 the injury was inflicted, yet, if in 
 ejecting him from the train the con- 
 ductor uses more force than is reasona- 
 ble or necessary to accomplish his re- 
 moval, or removes him under improper 
 circumstances, the company would be 
 liable for the injury. Thus, in this 
 case, the plaintiff got upon a f reighv 
 
 train, and, after it had started, the 
 conductor told him to get off. The 
 plaintiff offered to pay his fare, but 
 the conductor declined to receive it, 
 and, while the train was in motion, 
 gave him a push, so that to save him- 
 self he had to jump, and thus was seri- 
 ously injured. It appeared that the 
 company had issued printed instruc- 
 tions as follows : " The conductor will 
 not allow any person to ride in any 
 freight car attached to their train." of 
 which instruction the conductor was 
 aware ; and this was the only authori- 
 ty or instruction under which the con- 
 ductor acted. The court held that the 
 company were liable for the injury. 
 
 In an Indiana case (Jeffersonville R. 
 Co. V. Rogers, 38 Ind. Il6) it appeared 
 that, by a regulation of the defend- 
 ant — a railroad company — an addi- 
 tional sum was charged of passengers 
 who had not procured tickets before 
 entering the cars. The plaintiff ap- 
 plied at the ticket office of defendant 
 for a ticket to C, but, without fault 
 on his part, failed to procure it. On 
 the cars he informed the conductor of 
 his attempt to procure a ticket, and 
 tendered the sum required to purchase 
 a ticket. The conductor demanded 
 an additional sum, which the plaintiff 
 refused to pay. The conductor there- 
 upon ejected him from the car, and 
 the court held that the defendants 
 were not only liable for the injury, 
 hut that, if the jury found that the 
 act was done through " oppressive 
 malice or wantonness," exemplary 
 damages might be given, and a ver 
 diet for $1,000, under the circum 
 stances, was held not excessive.
 
 Negligence and Wrongful Acts of Agents, etc. 719 
 
 outside the duties imposed upon him by the master." ' And tliis 
 rule applies with equal, even more force, to corporations that in 
 the very nature of things must act through employees, and ex- 
 tends to every agent employed, from the highest to the lowest, 
 the simple test of liability being, whether the act was done in the 
 discharge of a duty committed to such agent by the corporation 
 and within the scope of his authority, express or implied." 
 
 Sec. 483. Oases illustrating the maxim. — In Limpus V. General 
 Omnihus CornjMny, it was held, that the driver of an onmibus, 
 employed to pick up passengers for a corporation, who drove his 
 horses against a rival coach in order to obtain passengers, was 
 treated as doing an act within the scope of his authority, although 
 he had been expressly directed not to do such an act^ The 
 defendants had given instructions to their driver not to ob- 
 struct any omnibus. It was contended upon the hearing in 
 the Exchequer Chamber that no recovery could be had, because 
 the act was willfully and jpurposely done by the servant in di- 
 rect disobedience of the master's orders, and Mellish, in his argu- 
 ment for the defendants, contended, upon the authority of Croft 
 V. Alison (4 B. & Aid. 590), that no recovery could be had be- 
 cause the driver was pursuing a purpose of his own, and not his 
 master's business, when he did the act complained of, and cited 
 the rule laid down in the case last referred to, viz. : " If a servant 
 driving a carriage, in order to effect some purpose of his own, 
 wantonly strikes the horses of another and produces the accident, 
 the master will not be liable. But if, in order to perform his 
 master's orders, he strikes, but injudiciously, and in order to ex- 
 tricate himself from a difficulty, that will be negligent and care- 
 less conduct, for which the master will be liable, being an act 
 done in pursuance of the servant's employment." Williams, J., 
 interrupting the counsel, said : " If a driver, in a moment of pas- 
 sion, vindictively strikes a horse with a whip, that would not be 
 an act done in the course of his employment ; but in this case 
 
 1 Wood's Law of Master and Serv- H. & C. 538. See, also, S P. Green v. 
 
 ant, 562 ; Weed v. Panama R. Co. London Omnibus Co., 7 C. B. (N. S.) 
 
 « Wood's Law of Master and Ser- 290;Goffu. Great Northern R. Co., 3 
 
 vant, 5()3 ei seq. EL & EL 673. 
 
 ^ Limpus V. General Omnibus Co., 1
 
 T20 Pkivate Coeporations. 
 
 the servant was pursuing the purpose for which he was employed, 
 viz., to drive the master's omnibus. Suppose a master told his 
 coachman not to drive when he was drunk, but he nevertheless 
 did so, would not the master be responsible ? " To which Mr. 
 Mellish responded: " Here tbe defendants' driver recklesdy and 
 furposcly obstructed the plaintiff's omnibus. That was not an 
 act within the scope of his employment, and was contrary to the 
 orders given to him by his master." Crompton, J., said : " Was 
 not the driver carrying out his master's purposes in attempting to 
 get before the other omnibus and pick up passengers % " Wil- 
 liams, J., said : " Suppose the driver of an omnibus saw a passen- 
 ger waiting at a distance, and, in order to reach him before an- 
 other omnibus, drove at full speed and thereby drove over a per- 
 son, would not the master be liable ? " It was held by the court 
 (WictHtman, J., dissenting) that the defendants were liable, and 
 the doctrine of Lyons v. Martin (8 Ad. & El. 515), that, in 
 order to render the master liable, the act done by the servant 
 must be lawful, was directly impugned by Crompton, J., in the 
 course of his opinion, and it may be regarded as settled, beyond 
 question, that the question of the lawfulness or unlawfulness of 
 the servant's act does not affect the question of the master's lia- 
 bility ; but if the act was done in the course of his employment, 
 and in furtherance of the master's business, and is within the 
 authority of the servant, express or implied, the master is liable, 
 even though the act is unlawful, willful, wanton or malicious. * 
 On the trial of the action Martin, B., instructed the jury that, if 
 the defendants' driver, being irritated, acted carelessly, recklessly^ 
 wantonly, or improperly, hut in the course of his employment, 
 and in doing that which he believed to be for the interest of the 
 defendants, then the defendants were responsible, and that the 
 instructions given by them to the driver not to obstruct other 
 omnibuses, if he did not observe them, were immaterial as to the 
 
 1 Howe v. Newmarch, 13 Allen Bush (Ky.), 147 ; 8 Am. Rep. 451 ; 
 
 (Mfiss.), 49 ; Ramsden o. Boston and Goddard v. Grand Trunk R. R. Co., 57 
 
 Albany R. R. Co., ante ; Holmes v. Me. 202 ; 2 Am. Rep. 39 ; Jackson o. 
 
 Wakefield, an^e ; Rounds ®. Del. and The Second Av. R. R. Co., 47 N. Y. 
 
 Lackawanna R. R. Co., aftjJe ; Moore 274; 7 Am. Rep. 448; Hicrgins v. 
 
 V. Fitcliburg R. R. Co., 4 Gray (Mass.), Watervliet Turnpike Co., 46 N.' Y. 23 : 
 
 465 ; Hewett v. Swift, 3 Allen (Mass.), 7 Am. Rep. 293 ; Duggins v. Watson, 
 
 420 ; Br.yant 71. Rich, 106 Mass. 180 ; 8 15 Ark. 118. 
 Am. Rep. 311 ; Sherley v. Billings, 8
 
 Negligence and Wrongful Acts of Agents, etc. '^^21 
 
 question of the master s liability, but that if the true character of 
 the driver's act was, that it was an act of his own, and in order 
 to effect a purpose of his own, then the defendants were not re- 
 sponsible. Upon this direction being excepted to, the Exchequer 
 Chamber held that it was correct. In the course of his judgment, 
 Willes, J., said : " It appears clearly to me that this was (and it 
 was treated by my brother Maetin as) a case of improper driving, 
 and not a case in which the servant did any thing altogether in- 
 consistent with the discharge of his duty to his master, and out 
 of the course of his employment, a fact upon which it appears to 
 me that the case turns. This omnibus of the defendants was 
 driven in before the omnibus of the plaintiff. Now, of course, 
 one may say that it is no part of the duty of a servant to ob- 
 struct another omnibus, and that in this case the servant had dis- 
 tinct orders not to obstruct the other omnibus. I beg to say, in 
 my opinion, those instructions were perfectly immaterial. If 
 they were disregarded, the law casts upon the master the liability 
 for the acts of his servants, in the course of his employment, and 
 the law is not so futile as to allow the master, by giving secret 
 instructions to a servant, to set aside his liability. I hold it to 
 be perfectly immaterial that the master directed the servant not 
 to do the act which he did. As well might it be said that if a 
 master, employing a servant, told him that he should never break 
 the law, he might thus absolve himself from all liability for any 
 act of the servant, though in the course of the employment." 
 Btles, J., puts the case very pertinently. He says : "I am alsc 
 of opinion that my brother Martin's direction in this case was 
 correct. He uses the words ' in the course of his employment,' 
 which, as my brother "Willes has pointed out, are expressions di- 
 rectly justified by the decisions. His direction, as I understand 
 it, amounts to this, that if a servant acts in the prosecution of liis 
 master's business, with the intention of benefiting his master, and 
 not to benefit or gratify himself, then the master is responsible, 
 although it were in one sense a willful act on the part of the 
 servant. Now, it is said that this was contrary to the master's in- 
 structions. That might be said in ninety-nine cases out of a 
 hundred, where actions are brought against the master to recover 
 damages for the reckless driving of a servant. It is said that it 
 91
 
 722 Private Cokporations. 
 
 was an illegal act. So, in almost every case of an action against 
 the master for tlie negligent driving of a servant, an illegal act is 
 imputed to the servant." 
 
 Sec. 484. implied powers of servant.— In Rounds V. Delaware 
 & Lackawanna Railroad Company^ a New York case, the ques- 
 tion of the implied powers of a servant was ably discussed and con- 
 sidered, and what we conceive to be tlie true rule announced. In 
 that case,' the plaintiff, a boy twelve years old, jumped on the bag- 
 gage car of the defendants' passenger train, to ride down to the 
 round-house. A quantity of wood was pitched along the track. 
 While the train was being backed down, and when it arrived at the 
 wood-pile, the baggageman in charge of the train discovered the 
 boy on the car and ordered liim off. The boy responded that he 
 could not, because the wood was right tliere. The baggage-master, 
 with an oath, kicked the plaintiff off the car, and, falling against 
 the wood, one of his legs was thrown under the car and crushed. 
 A notice, as follows, was posted in the baggage-car : " No person 
 will be allowed to ride in this baggage-car except the regular train- 
 men employed thereon. Conductors and baggagemen must see 
 this order strictly enforced." Still another notice was printed in 
 the posted time cards, as follows : " Train baggagemen must not 
 permit any person to ride in the baggage car except the conduc 
 tor and news agent connected with the train. Conductors and 
 baggagemen will be held alike accountable for a rigid enforce- 
 ment of this rule." In an action to recover for the damages 
 inflicted by the injury, the court held that the defendants were 
 liable. Countryman, J., in a very able and carefully-considered 
 opinion, reviewed the cases bearing upon these questions, and, 
 among other things, said : " The servant, in thus removing the 
 plaintiff, was engaged in the line of his duty and obeying the 
 instructions of the defendant, and to shield it from liability the 
 instructions must have been reasonable and proper with refer- 
 ence to the rights of plaintiff, and must have been executed, 
 under all the circumstances, in a reasonable and proper manner. 
 Having made suitable regulations, the defendant was also bound 
 
 ' Rounds t). Del. & Lackawanna R. R. Co., 5 T. & C. (N. T.) 475, affirmed by 
 court of appeals.
 
 Negligence and Wrongful Acts of Agents, etc. 723 
 
 to 6ee that they were properly executed. The principal must 
 necessarily be answerable within reasonable limitations for the 
 manner in which his instructions are carried into effect. * * 
 * And the principal must necessarily be bound by any lack of 
 judgment or discretion of the agent, whereby he acts improperly 
 and inflicts unnecessary injury." ' 
 
 Sec. 485. injury to trespasser, by servant.— In Lovett V. Salem^ 
 etc., Railroad Company, it was held, that a driver of horse cars, 
 whose duty it is to keep trespassers from riding on the platform, 
 would naturally be expected to execute the order in a proper and 
 lawful manner, but if he in foct executes it in an improper and 
 unlawful manner, the master is liable therefor, because he takes the 
 risk upon himself, by reposing any authority at all in the servant 
 to do an act which, if improperly done, may result in injury to 
 others. In a case of this character,^ the plaintiff, a boy of ten 
 years of age, wrongfully got upon the defendants' street railway 
 car while it was in motion ; and was permitted to ride some dis- 
 tance, when, while the car was running at such a rate of speed 
 as to make it unsafe for him to do so, he was ordered by the 
 driver to jump off, which he did, and in doing so was thrown 
 down, and his right arm being thrown under the car was run 
 over and crushed, so that amputation was rendered necessary, 
 and the court held that the defendant was responsible for the 
 
 ' Lovett m. Salem, etc., R. R. Co., 9 the orders of the station master, etc., 
 
 Allen (Mass.), 557; Holmes v. Wake- and do all in their power to promote 
 
 field, ante; Kline «. Central Pacific R. the comfort of the passengers and the 
 
 R. Co., 37 Cal. 400; Sanford -y. Eighth interests of the company. It was held 
 
 Ave. R. R. Co., 23 N. Y. 343. by the court that the act of the porter, 
 
 A doctrine similar to this was held in pulling the passenger out of the 
 
 in Bayley 'o. The Manchester, etc., carriage, was an act within the course 
 
 Railway Co.,L.R.,7C. P. 415. In of his employment as the defendants' 
 
 that case the plaintiff was a passenger servant for which they were responsi- 
 
 upon the defendants' train, and sus- ble. In another case (Walker v. The 
 
 tainHd injuries in consequence of being South-Eastern Railway Co., 39 L. J. C. 
 
 violently pulled oat of a railway car- P. 346), the plaintiff, on arriving at the 
 
 riage by one of the defendants' porters, defendants' station, took part in a dis- 
 
 who acted under an erroneous impres- pute going on between some other 
 
 sion that the plaintiff was in the wrong passengers and the defendants' aer- 
 
 carriage. The defendants' by-laws did vants relative to a railway ticket, 
 
 not expressly authorize the company's whereupon the defendants' servants 
 
 servants to remove any person being seized him, ran him down an incline, 
 
 in a wrong carriage, but they provided pushed liim out of the station, and as 
 
 that no person should be allowed to he passed through the door, gave him 
 
 enter any carriage or to travel therein a kick. In an action for the assault, 
 
 without having first paid his fare and the defendants were held liable, 
 
 taken a ticket. They likewise pro- * Lovett d. Salem, etc. . R. R. Co., 9 
 
 vided that the porters should act under Allen (Mass. ), 557 .
 
 724 Private Corporations. 
 
 injury, the order of the driver to " jump off," considering 
 the age of the plaintiff, being equivalent to a forcible ejec- 
 tion.^ 
 
 Sec. 486. Liability vrhen servant acts contrary to instruction. — In 
 Garretzen v. Duenckel^ a Missouri case,' the application of this rule 
 was well illustrated. In that case the defendant was the proprie- 
 tor of a gun store, and his clerk upon one occasion, when showing 
 a gun to a customer, at his request, and being informed by the 
 purchaser that he would not purchase the gun unless it was loaded, 
 loaded the gun, and, while being examined by the customer, it 
 was accidentally discharged and injured the plaintiff, who was 
 sitting at a window on the opposite side of the street, the master 
 had expressly instructed the servant not to load any of the 
 fire-arms, and it was urged in defense -that the act of the ser- 
 vant being in conflict with and contrary to the master's orders, 
 was not an act within the scope of the servant's authority, and 
 the master could not be held liable therefor. But the court held 
 that, notwithstanding the express order of the defendant, the act 
 was one done in the prosecution of his business and in furtherance 
 thereof, and was within the scope of the servant's employment. 
 
 Sec. 4.87- Real test of liability — It is of no account that the 
 master did not direct the doing of the act,^ or even that it was 
 done contrary to his instructions, or without his knowledge ; 
 the simple question is, whether it was done in the prosecution 
 of his business and as an incident thereto.* It is of no impor- 
 tance whether the act is necessary to the prosecution of the 
 master's business or not. Liability attaches if it was done in 
 
 In Shea «. Sixth A v. R. R. Co., 62 '^ Garretzen -y. Duenckel, 50 Mo. 104; 
 
 N. Y. 180, one of the defendants' 11 Am. Rep. 405. 
 
 horse cars was standing at the corner ^ Storey «. Ashton, L. R., 4 Q. B. 
 
 of a street in New York, so as to pre- 476 ; Barwick'?). Joint-Stock Co., L. R., 
 
 vent persons from passing across the 3 Exch. 265 ; Seymour v. Greenwood, 
 
 street on the walk. The plaintiff, be- ante; Tuberville v. Stamp, Raym. 
 
 ing desirous of passing, stepped upon 266; Pilliter v. Phippard, 11 Ad. & El. 
 
 the platform of the car for that pur- 347. 
 
 pose, when the driver pushed her off, ■* Hamilton v. Third Av. R. R. Co., 
 
 and in falling she broke her arm. The 53 N. Y. 25 ; Barwick v. Joint-Stock 
 
 court held that, inasmuch as it was the Co., ante ; Howe v. Newmarch, ante ; 
 
 duty of the driver to keep trespassers Ramsden v. Bost. & Alb. R. R. Co., 
 
 off the platform, he was acting in the a72te ; Goff «. Gt. Northern R. R. Co. 
 
 scope of his employment, and that 3 El. & El. 672; Ewbank «. Nutting, 7 
 
 the defendants were liable for the as- C. B. 797. 
 eault.
 
 Negligence and Wrongful Acts of Agents, etc. '?^25 
 
 the prosecution of the work, and in furtherance thereof, even 
 tliough the act was ill-advised and contrary to the master's 
 orders. The test is, whether the act was done in the course of 
 the master's business and in furtherance of it. If so, the master 
 is responsible for the consequences, without any reference to the 
 manner of the execution of the work.' 
 
 The fact that the order is proper and only contemplates a 
 proper execution on the part of the servant does not change the 
 rule of liability. Having clothed the servant with authority to 
 do the act at all, the employer is hound, at his peril^ to see that 
 it is lyroperly executed, and is liable alike for mistakes of judg- 
 ment, or infirmity of temper on the part of his servant." 
 
 The fact that he has expressly directed the servant how to do 
 the act, or not to do a jparticular thing, is in no measure a defense. 
 If the act is within the scope of the servant'' s employinent, liability 
 attaches for the consequences of a wrongful execution of the 
 duty, without any reference to the degree of care exercised by 
 the master to prevent it. It is not the instructions of the master 
 that determine the extent and limit of the agent's authority, 
 but the nature of the employment, the character of the service re- 
 quired, and the character of the act done, and the circumstances 
 under, and the purpose for which it was done. Geover, J., illus- 
 trated the matter thus : ' " If," said he, " the owner of a building 
 employs a servant to remove the roof from his house, and directs 
 him to throw the materials upon his lot where no one would be 
 endangered, and the servant, disregarding this direction, should 
 carelessly throw them into the street, causing an injury to a pas- 
 senger, the master would be responsible therefor, although done 
 in violation of his instructions, because done in the business of 
 the master. But should the servant, for some purpose of his own, 
 intentioncdly throw materials upon a passenger, the master would 
 not be responsible for the injury, because it would not be an act 
 done in his business, but a departure therefrom by the servant to 
 serve some purpose of his own." In determining the question of 
 authority, we must regard the object, purpose and end of the em- 
 ployment. When a person employs another to drive his carriage, 
 
 ' Minter v. Pacific R. R. Co., 41 Mo. * Wood's Law of Master and Set' 
 503 ; Croft v. Alison, 4 B. & Aid. 590. vant, 566. 
 
 3 Cosgrove v. Ogden, 49 N. Y 255
 
 726 Private Cokpoeations. 
 
 it is not to be presumed that he employs him to drive it purposely 
 and intentionally against the carriage of another when such act is 
 wholly unnecessary to carry out any purpose of his master ; but, 
 if the servant, in driving the carriage, finds himseK involved in 
 a position of danger, either to himself or the team, and in extri- 
 cating himself pui-posely drives against the carriage of another 
 and overturns it, this is most certainly within the line of his duty, 
 and is within the scope of his authority, because he is presumed to 
 be clothed with authority to do every thing essential to effectuate 
 the purpose and ends of his employment/ Blackburn, J., in a 
 recent case heard in the Queen's Bench," very aptly illustrated the 
 rule thus : " The question is," said he, " whether there is any 
 evidence of an authority given by the defendants to the booking 
 clerk to arrest the plaintiff, under the circumstances of this case. 
 It is quite clear that there was no evidence of an express author- 
 ity. Then can such authority be implied ? The facts from which 
 an authority can be implied are, that the person who arrested the 
 plaintiff is a ticket distributor in the employ of the defendants ; 
 that he gives out tickets to persons intending to travel by the 
 railway, and receives the money, and that the money received on 
 behalf of the defendants is put into a till, of which he has the 
 charge and custody. On these facts it may be fairly said that 
 the booking clerk has an implied authority to do all acts which 
 are necessary for the protection of the money intrusted to him. 
 I am inclined to think that if a man in charge of a till should 
 find a man attempting to rob it, and he could not prevent it 
 otherwise than by taking him into custody, the person in charge 
 of the till might have an implied authority to arrest the offender ; 
 or if the clerk had reason to believe that the money had been 
 actually stolen and he could not get it back except by taking the 
 thief into custody, and he took him into custody with a view to 
 a recovery of the money taken away, it might be that that also 
 might be within the authority of a person in charge of the tUl. 
 * * * There is an implied authority to do all those 
 things that are necessary for the protection of property intrusted 
 to a person, or for fulfilling a duty which the person has to per- 
 
 ' Limpus V. General Omnibua Co., ' Allen v. London and South West 
 ante ; Seymour v. Greenwood, 6 H. & ern Railway Co., L. R., 6 Q. B. 68. 
 N. 359.
 
 Negligence and Wrongful Acts of Agents, etc. 727 
 
 form. * * * p^Qi- instance, where a company have, 
 under a by-law, a power to arrest a man if he does not pay his 
 fare, the primary object of the by-law is to enforce the payment 
 of fares to the company and to protect their interest, and it has 
 been rightly held that when a company leaves a servant in charge 
 of a station he has an implied authority to decide that the by-law 
 shall or shall not be enforced ; but if the servant in charge of the 
 station does an act in no way connected with the business of the 
 company, there would be no implied authority for the act, and 
 the company would not be liable." * In Edwards v. The London 
 c& South Western Railway Co., ante, Smith, J., enunciated the 
 rule of hability from an implied authority, thus : " No doubt if, 
 in furtherance of the particular business of the company, it is 
 necessary to arrest a person, the servants of the company have an 
 implied authority to do it. Thus, if there is a by-law of the com- 
 pany, and authority is given to arrest any person infringing it, it 
 must be presumed that the company give authority to any one they 
 put in charge of the station so to enforce it, since this can only 
 be done by the company's servants on the spot." In Seymour v. 
 Greenwood, 6 H. & N. 359, Baron Pollock said : " Suppose a 
 servant, in driving along a road, in order to avoid danger, inten- 
 tionally drove against the carriage of another, would not the 
 master be liable % " Without stopping to give further illustra- 
 tions from the modern cases, it may be said to be well settled 
 that the master is not only responsible for the negligence or mis- 
 feasance or malfeasance of the servant in respect of the discharge 
 of duties expressly imposed upon him, but also in all cases where 
 the act of the servant is within the scope of his impKed author, 
 ity, and in determining this, the nature of the employment and 
 the ends and purposes sought to be attained are material elements, 
 and the real test of liability.' Prima facie, when the act is one 
 which the master himself might have done, it will be presumed 
 that it was an act within the scope of the servant's authority, and 
 the burden of proving want of authority rests upon the defend- 
 
 1 Poulton V. Railway Co., ante; Ed- Shea v. Eailroad Co., ante; Goddard 
 
 wards i). Railway Co., L. R., 5 C. P. d. Grand Trunk R. Co., 57 Me. 202 ; 
 
 445. Rounds t. Lackawanna, etc., R. Co., 
 
 » Ramsden ■». Boston & Albany R. ante; Peck v. H. R. & N. Y. C. R. Co., 
 
 Co., ante; Howe xi. Newmarcb, ante; ante.
 
 728 Private Corporations. 
 
 ant.' In the first case cited in the last note the plaintiff brought 
 an action for an assault committed upon him by the defendants' 
 servant, a brakeman, in forcibly ejecting him from one of their 
 passenger cars. It appeared that the defendants set apart a car 
 for ladies and gentlemen accompanied with ladies. The servant 
 was stationed at the entrance of the cars to direct passengers what 
 cars to take. Tlie plaintiff, not being accompanied by a lady, 
 entered the car reserved for ladies, and the servant directed him 
 to get into another car. This the plaintiff refused to do, and the 
 assault complained of was committed in forcibly removing him. 
 In defense it was urged that the servant exceeded his powers, and 
 was not authorized to remove the plaintiff from the car, but only 
 to direct him what car to take. Upon this question James, J., 
 said : " That a master is not liable for the wrongful acts of 
 his servant, unless done in his service and within the scope of 
 his employment, will not be disputed. If the employee who 
 removed the plaintiff is to be regarded as a brakeman, unauthor- 
 ized to perform any duties other than such as pertained to that 
 office, and volunteered the act in question without other authority 
 or direction, then the defendant was not liable in this case. But 
 as brakeman he was an employee of the company, subject to its 
 authority and the direction of its officers, and as such employee 
 he was directed, by the person in charge, to see that gentlemen 
 without ladies did not enter that car, and it was in the perform- 
 ance of that service he did the act complained of. It is true he 
 was not ordered to remove persons from the car ; his orders were 
 to notify gentlemen not in charge of ladies that such car was 
 reserved, and direct them to cars forward ; so that in removing 
 plaintiff he clearly exceeded the orders given him. But this fact 
 the plaintiff could not know ; as between him and the company 
 it was enough that the act was done in the prosecution of his 
 master's business, and if he deviated from or exceeded his instruc- 
 tions, that fact did not excuse the master from responsibility. 
 The order to the brakeman, and his performance, warrants the 
 conclusion, even as a matter of law, that he was acting within the 
 scope of the employment he was then set to perform, if per- 
 
 ' Peck V. H. R. R. Co., 6 T. & C. (N. Turnpike Co., 46 id. 23; Cosgrove ». 
 Y.) 436; Jackson v. Second Av. R. Co., Ogden. 49 id. 225. 
 ■17 N. Y. 274 ; Higgins v. Watervliet
 
 Negligence and Wrongful Acts of Agents, etc. 729 
 
 flons disregarded his directions and persisted in entering that car, 
 Tlie defendant had the right to set apart a car for lady passengers, 
 and exclude other persons from it ; if other persons, after notice, 
 persisted in entering it, the defendant had the right to enforce 
 their removal, using no more force than necessary for that pur- 
 pose. The brakeman did no more than the master had the right 
 to do under the circumstances, and the presimiption is that in 
 doing it he was acting within the scope of his then employment." ' 
 
 Sec. 488. if act is within implied power of servant liability exists. — 
 
 It is not necessary, in order to fix the liability of the corporation, 
 that the agent should, at tlie time of the injury, have been acting 
 under its orders or directions, or that the officers of the corpora- 
 tion should know that the servant was to do the particular act 
 that produced the injury in question. It is enough if the act was 
 within the scope of his employment, and if so, it is liable, even 
 though the agent acted willfully and in direct violation of his 
 orders. 
 
 This is upon the principle that a master cannot screen himself 
 from liability for an injury committed by his servant within the 
 line of his employment, by setting up private instructions or orders 
 given by him, and their violation by the servant. " By putting 
 the servant in his place," says Mr. Wood in his work up©n The 
 Law of Master and Servant, p. 585, " he becomes responsible for 
 all his acts within the line of his employment, even though they 
 are willful and directly antagonistical to his orders. The simple 
 test is, whether they were acts within the scope of his employ- 
 ment ', not whether they were done while prosecuting the master's 
 business ; hut whether they were done hy the servant in further- 
 ance thereof, and were such as may fairly he said to have heen 
 authorized hy him^ By authorized is not meant authority ex- 
 pressly conferred, but whether the act was such as was incident 
 to the performance of the duties intrusted to him by the master, 
 even though in opposition to his express and positive orders. 
 Thus, to illustrate : where a horse-car conductor who forcibly 
 and violently pushes a passenger from a car which is being run 
 by him, because the passenger refuses to leave the car until it comes 
 to a full stop, it being no part of his duty to assist passengers in 
 
 •Isaacs V. Third Ave. R. Co., 47N.T.122. 
 
 92
 
 730 Private Corpokations. 
 
 getting on and off the cars, the company is held not liable for 
 the injuries resulting from the act, hecause it is not within the 
 SGojye of the conductor's duties or employment, and is not such 
 as can be said to have been within the centemplation of the em- 
 ployer, or as to have been authorized by him. But, if the assist- 
 ing of passengers on or off of the cars had been a part of his duty, 
 either by the express direction of the master, or by a well-estab- 
 lished usage, the act, although willful and wanton, would have been 
 within the scope of his employment, and the master would have 
 been liable therefor. Thus, when a horse railroad company, 
 among other things, requires its drivers to keep trespassers off 
 from the platform, it is liable for the act of tlie driver in expelling 
 a person therefrom, even though his act is willful and wanton, 
 and although the person expelled by him is not a trespasser.' 
 
 The master can never escape liability for an ahuse of authority 
 by the servant ; "^ therefore, the question always is, whether there 
 was any authority, express or implied, on the part of the servant 
 to do the act.' If so, the master is liable ; if not, he is not lia 
 ble, even though the act was done by the servant while perform 
 ing his master's service." In ascertaining this fact, the nature oi 
 the service, its character and incidents, as well as the orders of the 
 master, if any, are all to be considered. To illustrate : a person 
 employed as a conductor upon a railroad, whose duty it is to col- 
 lect the fares of passengers, is, even though not specially directed 
 so to do by his employment and the very nature of his duties, 
 impliedly clothed with authority to eject a person from the cars, 
 
 ' Shea ■». Sixth Ave. R. Co., 62 N. firing of the gun. The court held 
 
 Y. 180. that, inasmuch as the servant was 
 
 * Higgins D. Watervliet Turn. Co., authorized to discharge the gun by 
 
 46 N. Y. 23 ; Shea t\ Sixth Ave. E. the defendants, they were liable for 
 
 Co., ante; Phila. & Read. R. Co. •». the Wi«?<?ier in which he discharged it, 
 
 Derby, 14 How. (U. S.) 468 ; Phila., whether in violation of their instruc- 
 
 etc. , Pi. Co., -y. Steam Tow Boat Co. tions or not. Enos v. Hamilton, 24 
 
 23 id. 209. Wis. ()58 ; Horner «. Lawrence, 87 N. 
 
 3 Shea -y. Sixth Ave. R. Co., ante; J. L. 46 ; Case «. Mechanics' Bank, 4 
 
 Baldwin b. Casella, 21 W. R. 16. N. Y. 166 ; Hynes «. Jungren, 8 Kan. 
 
 ■^ In Oliver i). Northern Transporta- 391; Cosgrove «. Ogden, 49 N. Y. 
 
 tion Co., 3 Oregon, 84, the defendants' 255 ; Tucker ®. Woolsey, 64 Barb. (N. 
 
 servant injured the plaintiff by the Y.) 142; Ryan v. H. R. R. Co., 83 
 
 careless discharge of a signal gun. N. Y. Sup. Ct. 137 ; North River Bank 
 
 The defendants claimed that they -y. Aymar, 3 Hill (N. Y.), 262 ; Mc- 
 
 were not liable, because the servant Clanathan «. R. Co., 1 T. & C. (N. Y.) 
 
 disobeyed their instructions as to the 501.
 
 Negligence and Wrongful Acts of Agents, etc. 731 
 
 who sliall neglect or refuse to pay his fare, and it is one of his 
 duties, implied from the very nature of the employment and the 
 character of the service ; therefore, if in the performance of this 
 duty, he uses more force tlian is necessary ; ' or if he assaults or 
 insults a person who has in fact paid his fare, and is lawfully en- 
 titled to be upon the train ; * or if he ejects a person from the 
 train at a place where, by law, he has no right to eject him, the 
 corporation is liable for his acts as much as though the act had 
 been specially directed and authorized by it. 
 
 Sec. 48y. Matters to be considered in deternxining whether the act 
 is within the scope of the agent's authority. — In determining whether 
 the act was one within the scope of the agent's authority, the char- 
 acter of the business and its probable consequences are to be looked 
 to. Thus, if a canal company employs a person to attend a draw- 
 bridge,^ it is liable for injuries inflicted by him in raising the draw. 
 So, if a person is employed to blast in a quarry, the principal is liable 
 for injuries resulting from the agent's failure to adopt proper precau- 
 tions.* So, where a person is employed to drive an omnibus and 
 pick up passengers, the employer is liable for injuries inflicted by 
 him either upon individuals or the property of rival companies 
 by improper driving.^ So, where a railway company employs a 
 conductor to rnn a train and collect fares, it is liable for an assault 
 committed by the conductor upon a pssenger in a wrongful 
 attempt to collect or secure the fare,' or where a brakeman is 
 posted at the entrance to cars to direct passengers which car to 
 take, for an assault committed by him upon a passenger in remov- 
 ing him from a car ; ' or where a station agent commits an assault 
 npon a person in attempting to eject him from the station ; * and 
 so, generally, where the act is one done in doing that which the 
 servant or agent was authorized to do, and is within the scope of his 
 authority, the principal is answerable for the consequences.' In 
 
 'Jackson v. Second Ave. R. Co., 47 ' Limpus v. General Omnibus Co. , 1 
 
 N. Y. 274 ; 7 Am. Rep. 448 ; Hijrgins H. & C. 526. 
 
 ■». Watervliet Turnpike Co., 46 N. Y. " Ramsden v. Boston & Albanv R 
 
 23 ; 7 Am. Rep. 293. Co., 104 Mass. 104. 
 
 *Goddard v. Grand Trunk R. Co., ' Peck v. R.Co., 6 T. & C. (N. Y.) 436, 
 
 57 Me. 202 ; 2 Am. Rep. 39. » Hewett y. Swift, 3 Allen (Mass.),423. 
 
 3 Hunter v. Glasgow, etc., Canal Co., ' Brown v. McGregor, 17 F. C. (Sc.) 
 
 14 S. (Sc). 717. 233 ; Baird v. Graliam, 1 Stuart (Sc), 
 
 * Sword V. Cameron, 1 D. (Sc.) 439. 578; Green v. London, etc., Omnibus
 
 732 Private Corpokations. 
 
 order, liowever, to impute liability to the corporation, the relation 
 of master and servant must have existed, that is, the servant or 
 agent must either have been employed or controlled by the cor- 
 poration, or the right of control must have existed in it, or it 
 must have assented to the performance of the service by him, or 
 have been notified of it after it vs^as performed.' 
 
 Seo. 490. Contractor's and contractee's liability. — If the service was 
 performed by an independent contractor, who performed it in his 
 own way without being subject to the direction of the corpora- 
 tion, liability does not exist, unless the injury is a necessary result 
 of doing the work at all." 
 
 In a Connecticut case ^ a railroad company undertook to remove 
 a cargo or coal from a vessel to its freight cars, and, having had 
 some difficulty with the gang of shovelei"s who were on a strike, 
 made an arrangement with its weigh-master to allow him a certain 
 sum per ton for shoveling and dumping the coal, and that he 
 should employ the shovel ers, and if he could employ them for 
 less than the sum allowed him, the difference should be his per- 
 quisite, independent of his regular wages as weigh-master. The 
 weigh-master then hired a gang of shovelers, made his returns 
 weekly to the company of the number of tons shoveled, received 
 the amount allowed him and paid the shovelers. The regular 
 pay-rolls of the employees of the company, including the weigh- 
 master, did not embrace the shovelers. It was held that the 
 shovelers were not the servants of the company. 
 
 So, w^iere certain persons were authorized to construct a public 
 sewer at their own expense, and they employed a person to do 
 the work at an agreed price, it was held, in an action for injuries 
 
 Co,, 7 C. B. (N. S.) 290; Garretzen Whatman v. Pearson, L. R,, 3 C. P. 
 
 «. Duenckel. 50 Mo. 104 ; Goff c. Gt. 428. 
 
 Western R. Co., 3 El. & El. 672; '^ Hunt v. R. Co., 51 Pa. St. 475; 
 
 Moore v. Fitchburg R. Co., 4 Gray Hilliard ■!). Richardson, 3 Gray (Mass.), 
 
 (Mass.), 465; Ramaden v. Boston & 349; Schular v. Hudson R. Co., 38 
 
 Albany R. Co., 104 Mass. 117; Adams Barb. (N. Y.) 653 , Potter ®. Seymour, 
 
 t. Cole, 1 Daly (N. Y. C. P.), 147; Cor- 4 Bosw. (N. Y.) 140; Painter v. Pitts- 
 
 rigan -c. Union Sugar Refinery Co., 98 burg, 46 Pa. St. 213 ; Brackett v. 
 
 Mass. 577 ; Cosgrove v. Ogden ; Hill v. Lubke, 4 Allen (Mass.), 138. 
 Morey, 26 Vt. 178. 3 Burke v. Norwich, etc., R. Co., 34 
 
 • McGuire v. Grant, 25 N. J. r56 ; Conn. 474 ; Murphy v. Caralli, 3 H. «S 
 
 Kimball ■». Cushman, 103 Mass. 194; C. 462 ; Murray «. Currie, L. R., 6 C. P 
 
 24.
 
 Negligence and Wrongful Acts of Agents, etc. 733 
 
 received by reason of the negligent manner in which the sewer 
 was left at night, that the contractor could not be held responsi- 
 ble therefor.' The rule is that where an employee is exercising 
 a distinct, an independent employment, and is not under the imme- 
 diate control, direction or supervision of the employer, the latter 
 is not responsible for the negligence or carelessness of the em- 
 ployee. Thus, where a public licensed drayman was employed to 
 haul a quantity of salt from a warehouse, and deliver it at the 
 store of the employer at so much per barrel, and while in the act 
 of delivering the salt one of the barrels, through the carelessness 
 of the drayman, rolled against and injured a person passing on 
 the sidewalk, it was held that the employer was not liable for the 
 injury." 
 
 Where an employer made a bargain with his employee to cut 
 all the logs the employer had on certain land, and to deliver them 
 to the employer at a place named, the employer having no inter- 
 est in the running of the logs until they reached the point of de- 
 livery, nor was he to render any assistance, pecuniary or otherwise, 
 in the cutting or running of the logs, — it was held, that the relation 
 of master and servant did not exist, and that the employee alone 
 was liable for any injury occasioned to others by his conduct in 
 performing his contract.' So, where the plaintiff was injured by 
 being thrown from his" wagon by collision with a car owned by the 
 defendant, but drawn by horses owned by a contractor with whom 
 they had contracted to draw their cars and furnish horses and 
 drivers, the horses at the time of the injury being driven by a man 
 employed by the latter, it was held, that the contractor alone was 
 liable.* In a case where a railway company, by agreement under 
 seal, engaged a contractor to build the railway, reseiwing powder to 
 the company to watch the progress of the work, and to dismiss any 
 incompetent workmen employed by the contractor. In construct- 
 ing a viaduct on parts of the railway over a public highway, a 
 stone, through tiie negligence of the workmen, fell upon the 
 plaintiff's husband, who was passing along the road underneath, 
 and caus.^d his death, — it w^as held, that the company was not 
 
 1 Blake v. Ferris, 5 N. Y. 48. * Moore v. Sanborne, 3 Micb. 519. 
 
 ' De Forrest v. Wright, 2 Micb. * Weyant v. New York & Harlem 
 368. Railroad, 3 Duer (N. Y.) , 360.
 
 734 Private Cokporations. 
 
 liable for the damages/ and that a mere reservation of the right to 
 discharge any of the workmen did not affect their liability, unless 
 the defendant also reserved and exercised control over the work 
 itself. And this is held to be the rule even as to municipal cor- 
 porations, unless they have the exclusive control and care over 
 the subject-matter of the contract. In a Pennsylvania case," 
 Judge Strong, in commenting upon the policy of the rule, said : 
 " It is difficult to discover any substantial reason or good policy 
 for holding the present defendants responsible. The negligence 
 complained of was not theirs. It does not appear that they knew 
 of it. The verdict determines that the fault was on the contract- 
 ors. Over them the defendants had no more control than the 
 plaintiff's husband had. They were not in a subordinate relation 
 to the defendants, neither were they his agents. They were in an 
 independent employment, and sound policy requires that in such 
 a case the contractor alone should be held liable. In making a 
 sewer he has necessarily the temporary occupancy of the street in 
 which the work was done, and it must be exclusive." 
 
 A railroad corporation is not liable for injuries to buildings in 
 the vicinity of its road caused by blasting done by those who have 
 contracted to grade the road or persons in their employ, although, 
 under the contract, the corporation reserves the right to retain in 
 its hands sums sufficient to pay all damages that are not adjusted 
 within thirty days from the time they are inflicted." 
 
 So, where A contracted with B and C to build her a house, to 
 be finished complete, B and C employed D, a blacksmith, to make 
 and place a grating in the area. The hole, over which the grating 
 was to be placed, was left uncovered, and E fell into it and broke 
 his leg. It was held that B and C, the first contractors, were lia- 
 ble to E.^ 
 
 Where work was done for a railroad company under a contract, 
 it was held that the company were not responsible for injury re- 
 sulting to a third person from the negligent manner of doing the 
 
 ' Reedie v. London & Northwestern ^ Tibbets ■». Knox & Lincoln R. R. 
 
 R'way Co., 6 Rallw. Cas. 184 ; 20 L. J. Co., 63 Me. 437. 
 
 Exch. 65; 4 Exch. 244; Hobbitt v. •« McCleary v. Kent, 3 Duer (N. T.), 
 
 Same, id. 244 27. 
 
 ^ Painter v. Mayor of Pittsburg, 46 
 Pa. St. 213.
 
 Kbgligence and Wrongful Acts of Agents, etc. 735 
 
 work, though they employed their own surveyor to superintend 
 it, and to direct what should be done.' 
 
 Generally, a sub-contractor is not, in law, regarded as the serv- 
 ant of the person employing him. Thus, where the defendant, a 
 builder, was employed by the committee of a club to execute cer- 
 tain alterations at the club-house, including the preparation and 
 fixing of gas-fittings, he made a sub-contract with B, a gas-litter, to 
 execute this part of the work. In the course of doing it, through 
 B's negligence, the gas exploded and injured the plaintiff. It was 
 held that the defendant was not liable for the injury.' In a 
 Scotch case,' it was held that the same rule applies as between a 
 contractor and sub-contractor, as applies between the original con- 
 tractee and contractor, the court remarking, that where a person 
 contracts with one man to do a piece of work, and the latter sub- 
 contracts with another, the sub-contractor alone is liable for any 
 damage committed in the course of the work by him.* 
 
 In a recent English case " an interesting question was raised as 
 to the liability of a sub-contractor for the act of his servant, to a 
 third person, between whom and the master there was no privity, 
 when the liability in any measure depends upon a contract. In 
 that case, by an agreement between the Smithfield Club and the 
 defendants, who were proprietors of a building and premises at 
 Islington, called the Agricultural Hall, the club were to have the 
 exclusive use of the hall during the period of their annual show 
 of stock, etc., the defendants providing and paying a sufficient 
 staff (who were to be under the sole control of the secretary and 
 stewards of the club), to receive, take care of, and redeliver the 
 stock, etc., exhibited, and also paying the club £1,000, in consid- 
 eration of which the defendants were to receive certain fees or 
 admission money from the visitors. The stock and articles to be 
 exhibited were received at the gate of the defendants' premises by 
 one Sharman (upon orders signed by the secretary of the Smith- 
 field Club), who contracted with the defendants for a lump sum, 
 amongst other things, to receive them and to re-deliver them at 
 
 ' Steel 1). Southeastern R'way Co., ' McLean v. Russell, 22 Jiir. 39-4. 
 
 32 En^. L. & Eq. 366. ■* Shield v. Edinbursrh & Glasgow R 
 
 2 Rapson v. Cubitt, 9 M. & W. 710 ; R. Co., 28 Jur. 539 ; Richmond v. Rus- 
 
 1 Car. & M. 64 ; 6 Jur. 606. But see sell, 22 Sc. Jur. 394. 
 
 McCleary v. Kent, 3 Duer (N. Y.), 27, "Goslin v. Agricultural Hall Co., L. 
 
 contra R, 1 C. P. D. (_C. A.) 482.
 
 736 Private Corporations. 
 
 the end of the show upon like orders, the defendants in no way 
 interfering. One Stilgoe, who exhibited a pen of three sheep at 
 the show in 1873, sold them to the plaintiff, and upon the plain- 
 tiff's drover producing an order for their removal signed by Stil- 
 goe, Sharman, or one of his men, delivered him by mistake sheep 
 from another pen. These the plaintiff rejected, and he brought 
 an action against the defendants for converting his sheep, and it 
 was held that the defendants were not responsible under the cir- 
 cumstances for the acts or defaults of Sharman or his men. And 
 this decision was sustained on appeal, the court on appeal holding 
 that, as between the plaintiff and the defendants, there was no priv- 
 ity of contract, and no duty on the part of the latter to re-deliver 
 the stock, etc., at the close of the show. 
 
 Sec. 491. Liability in case of a nuisance- attaches only when a nui- 
 sance necessarily results. — Where a person lets work to be done 
 by another, by contract or job, which is innocent and lawful 
 in itself, but which Tinay^ if carelessly or negligently done, 
 result in injury to another, he is not charged with liability 
 if such work is in fact carelessly and negligentjy performed. 
 He is only liable in such cases when the work to be done 
 necessarily creates a nuisance. When it is lawful in and of 
 itself in all its details he is not liable for the acts of the con- 
 tractor or his servants unless he retains control over the work 
 and the instruments of its performance. He may personall}^, 
 or by an agent, superintend the work, or direct as to what shall 
 be done, provided he does not retain control over the method and 
 means of its accomplishment. Thus, where a person, in erecting 
 a building upon a public street, lets out the stone work to be done 
 by a contractor, under the direction and to the satisfaction of a 
 sujperintendent employed hy him, this reservation is not such a 
 reservation of control over the method and instruments of accom- 
 plishing the work, as renders him liable for an injury resulting 
 from the negligent execution of the work by the contractor.' 
 
 But when the work is, of itself, in any of its details, unlawful, 
 or necessarily results in the creation of a nuisance, the employer 
 
 >Chambera v Ohio Life Ins. and ■». Hooper, 11 Allen (Mass.), 419 ; Huni 
 Trust Co., 1 Dis. (Ohio) 337; Forsyth v. Penn. R. Co., 51 Pa. St. 475.
 
 Negligence ani> Wrongful Acts of Agents, etc. 737 
 
 having the power to abate it, and it being his duty to do so, he is 
 liable if an injury results from a nuisance created by the contractor 
 with the assent of the employer, express or implied.' So, too, he is 
 liable if he retains control over the method and means of doing the 
 work. Thus, where the defendant let a contract for re-paving the 
 streets of a city,but reserved entire control over the manner of doing 
 the work, it was held that the relation of master and servant 
 existed, and that the defendant was liable for injuries resulting 
 from the negligent or improper execution of the work,' or if he 
 interferes and directs hoio the work shall be done, and injury 
 results to others while his orders are being executed.' " When," 
 says Appleton, J.,* " the contract is to do an act in itself lawful, 
 it is presumed it is to be done in a lawful manner. Unless, there- 
 fore, the relation of master and servant exists, the party contract- 
 ing is not responsible for the negligent or tortious acts of the 
 person with whom the contract is made, especially if those acts 
 are outside of the contract. If the injury was the natural result 
 of work contracted to be done, and it could not be accomplished 
 without causing the injury, the person contracting for doing it 
 would be held responsible." 
 
 " The authority is implied from the employment, and is a natural 
 and legitimate incident of the service. Thus, where a brakeman 
 was stationed at the entrance of railway cars at a depot, to direct 
 passengers which car to take, and one car was set apart for ladies, 
 or gentlemen accompanied with ladies, and a gentleman without 
 a lady entered the ladies' car, and the brakeman forcibly and vio« 
 lently ejected him fi'om the car, it was held that the company was 
 liable for the injury so inflicted, because, having placed the 
 brakeman in that position to see that the rules of the company 
 were observed, he must be regarded as being impliedly clothed 
 with authority to enforce obedience thereto by force." ' 
 
 1 Clark <€. Fry, 8 Oliio St. 358 : Car- " Peck v. N. Y. C. E. Co., 6 T. & C. 
 man v. Steubenville, etc., R. Co., 4 (N. Y.) 436. James, J., in delivering 
 id. 399 ; Dygert v. Schenck, 23 Wend, tlie opinion of the court, very aptly 
 (N. Y.) 44G ; Vanderpool v. Husson, 28 expressed the rule thus: "If the em- 
 Barb. (N. Y.) 196 ; Matheny ■». "SVolffs, ployee, who removed the plaintiff, is 
 2 Duv. (Ky.) 137. to be regarded as a brakeman, uiiau- 
 
 * Cincinnati v. Stone, ante. thorized to perform any duties other 
 
 ^Heffernan v. Benkard, 1 Robt. (N. than such as pertained to that office, 
 
 Y.) 433. and volunteered the act in question 
 
 ■* Eaton V. European & Northern R. without other authority or direction 
 
 Co., 59 Me. 520 ; 8 Am. Rep. 430. then the defendant was not liable 
 
 93
 
 738 Private Corporations. 
 
 Sec. 492. Corporations bound to the same degree of care as natural peiw 
 sons — degree of care. — From what has been said it will be seen that 
 corporations are bound to the same degree of care in the conduct 
 of their business, and are subject to the same rules of liability for 
 wrongful acts committed by them in the Une of their duty, as in- 
 dividuals are, and, being liable for the tortious or wrongful acts of 
 their servants or agents, it follows as a natural and legitimate result 
 that they are hable for the manner in which their duties are dis- 
 charged, or, in other words, for the negligence of their officers^ 
 agents or servants in the discharge of their duties, in whatever 
 department they are employed. The question of liability for acts 
 claimed to be negligent must depend largely upon the powers 
 and pui-poses of the corporation and the agencies employed in 
 the conduct of its business.' The rule is that a degree of care 
 must be observed commensurate with the character of the agen- 
 cies employed, and tJie risk to others from their improper or 
 negligent employtnent?' 
 
 Thus, while a railroad company is bound to exercise the highest 
 degree of care in the selection of its machinery, cars, servants and 
 other appliances, and in the construction of its road-bed, and in 
 keeping the same in repair, yet it is not liable for the result of 
 an accident which could not have been prevented by the exercise 
 of such care. In other words, when an injury results from, 
 causes that the exercise of the highest degree of ca/re could not 
 
 But, as brakeman, he was an em- plaintiff could not know, as between 
 
 ployee of the company, subject to its him and the company it was enough 
 
 authority and the control of its offi- that the act was done in the prosecu- 
 
 cers, and, as such employee, he was tion of the piaster's business ; and if 
 
 directed by the person in charge to he deviated from or exceeded his in- 
 
 see tliat gentlemen without ladies did stritctions, that fact did not excxise the 
 
 not enter that car, and it was in the master from Wibility. The order to 
 
 performance of that service he did the the brakeman and his performance 
 
 act complained of. It is true he was warrants the conclusion, even as a 
 
 not ordered to remove persons from matter of law, that he was acting 
 
 the car ; his orders were to notify gen- within the scope of the employment 
 
 tlemen not in charge of ladies that he was set to perform." Limpus «. 
 
 Buch car was reserved, and direct them Geul. Omnibus Co., anie/ Seymour v. 
 
 to cars forward ; so that in removing Greenwood, ante; Moore v. Railway 
 
 the plaintiff he clearly exceeded the Co., 21 W. R. 145 ; Bayley v. Railway 
 
 orders given him. But this fact the Co., L. R., 7 C. P. 415. 
 
 ' Philadelphia, etc., R. Co. v. Derbey, ^ Wood's Law of Master and Ser- 
 14 How. (U. S.) 468. vant, 688, 788.
 
 Negligence and Wrongful Acts of Agents, etc. 739 
 
 have prevented, it is not liable, as such injuries are the result of 
 inevitable accident.* 
 
 Sec. 493. Not insurers against all casualties. — A railroad corpora- 
 tion is not an insurer against every possible casualty, but only for 
 such as result in spite of the highest degree of vigilance." While 
 it is bound to construct its road-bed and maintain it and its 
 bridges in a safe condition for the use of its passengers,' yet, it is 
 not liable for injuries resulting from defects therein that no de- 
 gree of care or vigilance could have detected. Thus, while it is 
 undoubtedly bound to construct them in such a manner as to 
 withstand the effects of ordinary freshets, or, possibly, extra- 
 ordinary freshets, yet it is not responsible for not securing them 
 against unprecedented freshets, such as could not have been rea- 
 sonably foreseen or guarded against.* In the case last cited, 
 an action was brought for an injury received by the plaintiff while 
 riding over the defendants' road. The case disclosed that the 
 road-bed was constructed some five years prior to the accident, and 
 ran through a marshy country subject to floods; that it was con- 
 structed on a low embankment composed of a sandy sort of soil 
 likely to be washed away by water, and that the cidverts vaere in- 
 s^ifficient to carry off the water. It was not shown, however, that 
 the soil of the line had heen washed away hefore, or that the water 
 had ever come up to the enibanhtnent. It also appeared that, on the 
 day upon which the accident occurred, an extraordinary storm, 
 attended with very violent rain, had been raging for over sixteen 
 hours, and that in consequence of this a stream near to the spot at 
 which the accident occurred had swollen to a torrent and washed 
 away a bridge, and passed down with great force upon the line. By 
 midnight the water had worn away the earth under the sleepers, 
 in some places leaving the rails unsupported and exposed, but it 
 did not appear that the water had at any part of the line caused 
 the evil, or that the condition of the line could he perceived. The 
 train upon which the plaintiff was injured was the express, and 
 upon the whole went at the ordinary rate of an express train, 
 
 ' Kansas Pacific R. Co, u. Miller, ^ Pittsburg & Fort Wayne R. Go. 
 
 2 Col. 443. ■». Gilleland, 56 Pa. St. 445. 
 
 '■* Chicago, etc., R. Co. «. Stumps, * Withers ®. No. Kent. R. Co., 27 
 
 69 111. 409. L. J.. Ex. 417.
 
 740 Pkivate Corporations. 
 
 although there was some evidence that A was being driven at a 
 faster rate at the time when the accident occurred, to make up 
 for lost time. The train had passed over the line safely until 
 the accident occurred, by reason of the undermining of the 
 sleepers and the consequent giving away or settling of the rails, 
 which threw the train down an embankment and seriously injured 
 the plaintiff. The jury returned a verdict for the plaintiff for 
 £1,500 damages, which, upon hearing in Exchequer, was set aside 
 upon the ground that there was no sufficient evidence of negli- 
 gence on the part of the defendants to sustain it. Bramwell, B., 
 said : " It is said that the construction of the line was such as 
 to make it dangerous in a flood, and that, therefore, the defend- 
 ants' servants must have known that it was dangerous to drive at 
 an express rate of speed. But negligence must he shown hy the 
 plaintiff. It is not enough to show that an accident arose from 
 certain extrinsic or external causes. Where is the evidence of 
 negligence ? It is contended on the part of the plaintiff that the 
 company's servants were hound to know the consequences which 
 were likely to follow from the flood. That is not so. They were 
 hound only to know that which could he known hy the exercise of 
 ordinary skill and prudence^ otherwise they would be made 
 insurers of the safety of the passengers. There was no engineer- 
 ing or other skilled evidence to show that water would wash 
 away the soil of which the embankment was made. So far from 
 there being any evidence to show that there was negligence, there 
 was evidence to negative the negligence imputed. The very ex- 
 istence of the line for five years, notwithstanding that the dis- 
 trict was subject to floods, tended to negative the only negligence 
 that was set up. There was nothing to show that, until the 
 accident occurred, there had been any thing to indicate danger, 
 or to warn the company's servants to cease running the trains. 
 The verdict was wholly unwarranted.'''' * The track must 
 he in a safe condition so far as human foresight can ac- 
 complish that result, but unless negligence in some respect 
 contributing to an injury resulting from defects therein can be 
 
 ' In Pittsburg, Fort Wayne, etc., Birmingham Water Works Co., \\ 
 
 B. Co. «. Gilleland, 56 Pa. St. 445, Exch. 781 ; Fast v. Third A v. R. 
 
 a similar doctrine was held. See, Co.. 1 Daly (N. Y. C. P), 148. 
 also, similar in principle, Blyth ■».
 
 Negligence and Wrongful Acrrs of Agents, etc. 741 
 
 attributed to the company it is not liable.' No precise rule of 
 diligence can be stated, but the company is bound to construct its 
 roadway in such a manner as to be able to resist all such action 
 of the weather, from floods or whatever cause arising, that may 
 be expected to occur, although only at long intervals, and as a 
 necessary sequence, if extraordinary or unprecedented floods have 
 once occurred, it must redouble its vigilance, and place its embanic- 
 ments in such a condition as to resist another of similar severity 
 or intensity.' 
 
 Sec. 494. Care required of railroad corporations in relation to engines, 
 cars, track, etc. — The same degree of care is required in the selec- 
 tion of engines and cars, and other appliances for the prosecution 
 of the business.^ The company is not exonerated from liability 
 for injuries resulting from defects in its vehicles, because it pur- 
 chased them from competent manufticturers, but is responsible for 
 defects therein resulting from the negligence of the manufactur- 
 ers, precisely the same as it would be if it manufactured them 
 itself.* It is not responsible for all defects therein, but only for 
 such as could have been ascertained by the exercise of the highest 
 degree of vigilance,^ or, in other words, for defects which could not 
 have been detected by any degree of care or skill, either in the 
 course of manufacture or afterward.* In New York a different 
 rule of liability has been held, and the company is held to be 
 bound at its peril to provide safe cars, and is responsible for in- 
 juries resulting from defects therein, irrespective of the question 
 of negligence.' 
 
 The rule in reference to the degree of vigilance to be observed 
 was well expressed in an English case, previously cited.* In that 
 
 ' Toledo, etc., R. Co. v. Apperson, * Readhead v. Midland R. Co. Jj. R., 4 
 
 49 111. 480 ; Reed v. K Y. Cent. R. Q. B. 379. 
 
 Co., 56 Barb. (N. Y.) 493 ; Gonzales v. ' Alden u. N. Y. Cent. R. Co., 26 N. 
 
 N. Y. Cent. R. Co., 39 How. Pr. (N. Y.) Y. 102. 
 
 407. In Hegeman v. Western R. R. Co., 
 
 - Great Western R. Co. of Canada v. 13 N. Y. 9, the plaintifif" was injured 
 
 Fawcett, 1 Moore's P. C. C. (N. S.) 101. by the breaking of an axle, from a 
 
 ^ Readhead v. Midland R. Co., L. R. latent defect vliicli could not have 
 
 2 Q. B. 412 ; Burns v. Cork, etc., R. teen discovered hy the most vigilant ex- 
 
 Co., 13 I. R. C. L. 543 ; Grotet). Chester, amination, and the company was held 
 
 etc., R. Co., 2 Exch. 251. chargeable. 
 
 ■* Burns v. Cork, etc., R. Co., ante. * Manser v. Eastern Counties R. Co, 
 
 5 Stokes V. Eastern Counties R. Co., 81 L. T. (N. S.) 585. 
 2 F. & F. 691; Mauser «. Eastern Coun- 
 ties R. Co., 31 L. T. (N. S.) 585.
 
 742 Private Cokpokations. 
 
 case, an action was brought by the plaintiff to recover damages for 
 injuries sustained by him whilst traveling on the defendants' rail- 
 way, as he alleged, from the negligence of the company. It 
 arose from an imperfect weld in the formation of a wheel — in 
 this case the driving-wheel. It appears in this case, that driv- 
 ing wheels are usually formed in the first instance with a thick- 
 ness of about 2^ inches. They are allowed to run some time, 
 and then ground down or re-turned for the purpose of making 
 them again smooth ; and this operation is performed about three 
 times. Ultimately the thickness of the wheel is reduced from 
 about 2J or 2J inches to about 1^. If it happens to be below 1\ 
 it is considered worn out, and should not be continued in the use. 
 About three times a wheel may be re-turned ; or it may be re- 
 turned only twice, but with three different thicknesses. Before 
 it is used the first time it should be hammered all round and all 
 over to test its soundness, and to ascertain, as far as it is possible 
 to ascertain, if it be perfect, whether it will ring, and is sound 
 in every part. This wheel had been so tried before it was used. 
 It had run many thousands of miles, and had been reduced ^ or 
 •| an inch of its thickness. But although the wheel had been 
 tested by the universal hammering in the first instance, it had not 
 been subjected to that test after it had been reduced in thickness 
 by wear. The wheel was defective, it gave way, and hence the 
 accident. 
 
 The cause was tried in London before the Lord Chief Bnron, 
 when the jury returned a verdict for the plaintiff, for £2,000, 
 damages. 
 
 Channell, B., said : " This was an action brought to recover 
 compensation in damages for injuries sustained by the plaintiff, 
 owing to the alleged negligence of the defendants. * * * 
 
 " The Lord Chief Baron, in summing up, appears to me 
 (if I may take the liberty of saying so) to have left the case 
 at the trial to the jury very fairly toward the company. There 
 were certain passages selected by Mr. Bovill, and strongly com- 
 mented on, but there were other passages in the summing up to 
 which the attention of the court was called, and to which it will 
 be necessary, I think, we should advert. His Lordship, after stat- 
 ing the nature of the action, said : ' With respect to the law there
 
 Negligence and Wkonoful Acts of Agents, etc. 743 
 
 is really no doubt whatever. If every part of the case was as clear 
 aud undoubted as the legal questions that arise, there would be 
 very little difficulty indeed in disposing of the case, without any 
 trouble whatever. There can be no doubt that in point of law 
 the defendants are bound to provide carriages and other appli- 
 ances which shall present every reasonable prospect of safety. 
 They are bound to guard against every source of danger that they 
 can foresee. But if the case stated by Mr. Bovill for the defend- 
 ants be made out in point of fact, as to which there is contradict- 
 ory testimony, which it is for you to decide — if that case be 
 made out in fact, then undoubtedly the defendants would be enti- 
 tled to your verdict. The defendants are not liable for any cause 
 of danger that cannot be foreseen by the exercise of reasonable 
 care and caution in preparing for the journey ; and if, therefore, 
 the entire cause of accident was this defective weld, which was 
 not known, and could not, by any reasonable skill, care or pru- 
 dence, be discovered, then the defendants are entitled to your ver- 
 dict.' The law in that respect was laid down as favorably to the 
 company as the company had a right to expect. That was his 
 Lordship's observation at the commencement of the summing up ; 
 at the end of the summing up, in substance, that direction is re- 
 peated, his Lordship saying, it is important that every attention 
 should be paid to the machinery, ' in order that the lives of the 
 passengers may be placed in as much safety as possible.' He goes 
 on to say : ' The company, however, are not bound to do that 
 which is impossible ; they are not bound to see that which is invis- 
 ible, but they are bound to take every precaution. It is entirely, 
 gentlemen, for you to decide whether in your judgment they 
 have done every thing which their situation in providing conven- 
 iences for passengers required of them, and whether there was any 
 deficiency, or whether they entirely and perfectly discharged that 
 duty. If they entirely performed it, I think they are entitled to 
 your verdict. If they did not, if there was any thing that might 
 reasonably be required of them under the circumstances which in 
 your judgment they did not perform, I think they would be lia- 
 ble, and it would be entirely for you to say what damages the 
 plaintiff would be entitled to in the event of your thinking him 
 entitled to your verdict.' Now, it is impossible, I think, that the
 
 744 Priyate Coepokations. 
 
 rule could be laid down more correctly than it was, both at the 
 commencement and the conclusion of his Lordship's summing-up. 
 But there were particular passages in the course of the summing-up, 
 which were excepted to. This passage was excepted to. Mr, 
 Bramwell," an engineer, had been called on the part of the plain- 
 tiff, and in the course of his cross-examination he said : 
 * I know of no mode of discorering the defect ; if the 
 tire be struck that may or may not detect it.' Now, it 
 is quite clear, looking at the cross-examination of Mr 
 Bramwell, and of all the other witnesses, what was meant to be 
 stated was this : there was no test that was absolutely fixed — no 
 test that, in every instance, would turn out to be sure and success- 
 ful ; but it cannot be contended a test ought not to be adopted, 
 if it is a useful one, and may reasonably be expected to bring 
 about the result, because it is not absolutely fixed. Now, the par- 
 ticular remark that was objected to was this : ' In all probability, 
 if this tire had undergone the process not merely of ringing it 
 with a hammer to see whether it was sound, but of hammering 
 it all round and all over, the defect would have been discovered, 
 because there can be no doubt, in regard to a bell which is now 
 silent (but which we heard for some time as if the whole material 
 of the clock at Westminster were perfect), it was cracked, but 
 continued to strike ; and nobody was aware of it. Somebody ob- 
 served on a rainy day^ when the bell was struck and the water 
 trickled down, it had a tremulous motion on each side, and the 
 vibrations were not perfectly equal. The man called somebody 
 to watch it, and then they discovered that the bell was cracked. 
 So that there can be no doubt that merely going to a tire and 
 striking it with a hammer will not tell you.' That is the sub- 
 stance of my Lord's observation. It was an observation founded 
 on experience — that the test of the hammer upon the tire would 
 enable you to see whether the tire would ring where it was 
 cracked in one part. But what was contended for on the part of 
 the plaintiff was, the tire should have been hammered all over ; 
 and there was a body of evidence and an important witness to 
 that point. There was abundant evidence to show, when the 
 tire had been re-turned, as it is called, if it had been hammered 
 all over, in all probability this defect would have been discovered.
 
 Negligence and "Wrongful Acts of Agents, etc, 745 
 
 It appears tliat there is nothing in my Lord's observations that 
 can warrant any objection on the score of misdirection, * * * A 
 witness had said : ' It should have been hammered all round.' 
 My Lord goes on to explain what is meant by that : — ' What he 
 means by that, I suppose is, that they should not merely strike it 
 with a hammer to see whether it would ring, which, no doubt, a 
 cracked piece of metal would, but they should have hammered 
 it all round to ascertain ; and certainly, as the iron becomes less 
 and less, no doubt that is a sort of care which should be taken, 
 because by the hammering you may stumble upon some particu- 
 lar spot that is defective. One of the witnesses for the defend- 
 ants told us to-day, that there was a thickness as of a piece of 
 paper — a thickness over the imperfection in the weld, and if you 
 came to hammer there, there is no doubt, I think, that you would 
 discover that.' Now, my Lord certainly expresses his own opin- 
 ion ; if the weld had been reduced to this thinness, as appeared 
 from one of the defendants' witnesses, in his judgment, if it had 
 been hammered all over, the defect would have been discovered. 
 Though my Lord expresses that opinion, he does not withdraw it 
 from the consideration of the jury, but he goes on to say : ' You 
 must judge for yourselves. I have no doubt, gentlemen, that if 
 not all of you, a great many of you, must have the means of 
 judging upon that subject quite as well as any of the witnesses, 
 and probably much more than myself.' That was an opinion 
 certainly given by my Lord as to a point that arose in the course 
 of the evidence — an opinion in which few would disagree ; but 
 whether it be right or wrong is not the question we have to de- 
 termine. The matter was not submitted to the jury as a matter 
 of law — it was not decisive of the evidence ; but the question 
 was left to the jury that they might exercise fully and freely their 
 judgment upon the subject. JSTow, the only other passage that 
 was objected to was a passage to this effect : — 'I cannot help 
 saying, in passing, that it appears to me, before an old tire is ever 
 sent to be re-turned, and put in use for the purposes of a leading 
 wheel, it ought really to be hammered all over ; because there 
 may be (and this is an illustration of it) a wheel that has per- 
 formed thousands of miles with perfect safety, which has appar- 
 ently got the best character that a wheel can have, but it turns 
 
 94
 
 746 Private Corporations. 
 
 out to have been ground down until you came to within, accord- 
 ins- to the case of the defendants, a surface not thicker than 
 paper, that separated you from an imperfect weld. You are quite 
 as well able to judge as I am. If that were accurately tested by 
 hammering over every part of it, you would say whether that 
 would not certainly be discovered. If there was nothing but the 
 thickness of a piece of paper to separate you it might not be vis- 
 ible to the eye, but it must be ascertainable by a hammer, which 
 would certainly give a different sound when you came to that 
 spot.' Again : my Lord expresses an opinion in which I entirely 
 concur, and it appears to me to have been correct upon the evidence. 
 But my Lord did not express his opinion at all to the contrary, or 
 fetter the jury ; the question was left fully and freely to them to 
 exercise their own judgment upon. It appears to me there is no 
 ground whatever for saying there was any misdirection of which 
 the defendants have a right to complain, and it really was hardly 
 insisted on that there was no evidence to go to the jury ; it is 
 enough to say, the evidence of Mr. Bramwell, the evidence of 
 Sir C. Fox, the evidence of Mr. Braithwaite, and the evidence of 
 Mr. May, formed a strong case on the part of the plaintiff to go 
 to the jury, which my Lord could not have refused to leave to 
 them. I am clearly of opinion that, had he done so, the plain- 
 tiff would have had good ground for excepting that the evidence 
 had not been submitted to the jury as it ought to have been. 
 Then, as to the case of the verdict being against the weight of 
 evidence, no doubt there was a strong body of evidence on the 
 part of the defendants. JSTo doubt many witnesses were called, 
 witnesses of experience and respectability, and one would not 
 necessarily be dissatisfied if the jury had found upon the evidence 
 a verdict for the defendants. On the other hand, there was 
 strong and positive evidence on the part of the plaintiff. I can- 
 not say the jury have come to a wrong conclusion. I am not 
 called on to say I should have found the same verdict myself. I 
 can see no ground for expressing any judicial dissatisfaction with 
 the verdict of the jury. I would refer to one witness as a wit- 
 ness of very considerable importance — Sir Charles Fox — who 
 gave evidence having a most material bearing upon the case. He 
 was engaged largely in the manufacture of wheels of all descrip-
 
 Negligence and Wrongful Acts of Agents, etc. 747 
 
 tions, and he was asked whetlier he adopted any process to test 
 the tire. He was asked, ' Do you hammer it ? ' and he says : 
 ' The process upon which I have manufactured all my wheels 
 has been this, to let all the different parts of the work be done by 
 piecework, so that if a man found a defective bar he did not get 
 paid for bending. If a man had to bend a defective bar, or bend 
 a good bar, and bent it improperly, we did not pay for them, so 
 that every man was looking back through the whole process of 
 the manufacture up to the last ; and then we have a gentleman 
 to whom we pay 300Z. a year to examine every wheel.' So that 
 this gentleman kept a person in his employ at a considerable sal- 
 ary for no other purpose than to test wheels when they were 
 made. He says they are tapped with a hammer, and when he is 
 asked how tires are tested, he says no defect would be passed over 
 with the hammer. No witness pretended to say it was an abso- 
 lute and positive test, but there is no excuse for not adopting it, 
 if it can be reasonably expected to produce a satisfactory result. 
 This was the universal process adopted by this gentleman at a 
 considerable cost and expense. He is asked this question : ' Have 
 you found any returned to you after being passed by you as com- 
 plete?' 'We guaranteed all the wheels we made for twelve 
 months, and having turned out 20f000 wheels for several years, I 
 think the whole amount of our guarantee has been twenty-four.' 
 Now, the w^heel in question had been reduced a considerable size ; 
 it was reduced to a small thinness ; it was blocked and re-turned, 
 and if this process had been adopted, not to hammer any one part 
 to see whether it would ring, but to hammer it all over, as was 
 the universal practice on the part of Sir Charles Fox, a practice 
 carried out at a considerable expense, it was for the jury to say 
 whether the defect might not have been discovered. I repudiate 
 the notion altogether that a process ought not to be adopted, be- 
 cause of necessity you would not arrive at a positive test. It 
 seems to me there is no ground for saying the verdict is against 
 the weight of evidence, and that a new trial should be granted. 
 Therefore, having at my Lord's request gone carefully through 
 the evidence, I repeat the opinion I was prepared to give when 
 the rule was moved, that the verdict ought to stand." 
 
 Pollock, C B., said : " I entirely agree with the rest of the
 
 748 Private Corporations. 
 
 court on the subject of refusing the rule why there should not 
 be a new trial. "When Mr. Bovill moved this rule, he certainly 
 took a very strong view of the case on the part of the defendants, 
 it appeared to me it was desirable that the matter should be 
 looked into with very great care, in order that no mistake might 
 be made. I am very much obliged to my learned brothers who 
 have taken the trouble of going through the short-hand writer's 
 notes which Mr. Bovill furnished us with. A very strong state- 
 ment made by Mr. Bovill I own rather startled me. I certainly 
 did not recognize, in his statement of the matter, any thing like 
 what I remember to have been said in the course of the trial. 
 According to his statement, certainly, at one time, there was no 
 evidence whatever to support the view that had been presented to 
 the jury, as he said, under the authority of the Bench. On turn- 
 ing to the evidence, certainly it appeared there was abundant ma- 
 terial for the remark that was presented to the jury by me, but 
 which was left entirely to them, not at all pressing my opinion 
 upon them, but stating, it appeared to me, that any person con- 
 versant with machinery, and the ordinary business connected with 
 such matters, would probably be far better able to judge than I 
 was of the point. There was much other important matter upon 
 which the jury might have decided, and very likely did decide, 
 the case ; but as far as this point was concerned the question was 
 this — about the nature of the accident there was no doubt what- 
 ever, it arose from an imperfect weld in the formation of a 
 wheel — that was the driving-wheel. A driving-wheel is formed 
 in the first instance with a thickness of 2^ inches ; it is allowed 
 to run some time, and is then ground down, or re-turned, for the 
 purpose of making it again smooth, and this operation is per- 
 formed about three times ; ultimately the thickness of the wheel 
 is reduced from 2^ or 2^ to IJ ; if it happens to be below 1 J they 
 consider it is worn out, and do not continue it in the service. 
 About three times is the number of times that a wheel may be 
 re-turned, or twice it may be re-turned, so that it is put into use 
 with three difEerent thicknesses. Now, the first time, before it is 
 used at all, it is hammered all over. I cannot understand the ex- 
 pression, but the expression in the evidence was, 'hammered all 
 round ; ' which I apprehend to be testing with the hammer not
 
 [Negligence and AVrongfcl Acts of Agents, etc. 749 
 
 merely whether it will ring, but whether it is sound in every 
 part. jSTow, if it be worth while to do that when the wheel is 
 first in its state of newness, in order to test it by applying the 
 hammer to every part of it, to see whether it be sound or not, it 
 surely must be worth while, every time you take away from it a 
 quarter or half an inch of its thickness, in order to prepare it for 
 a fresh journey. That was the question the jury had to decide ; 
 and I agree with my learned brothers that the law was laid down 
 correctly, and as favorably for the defendants as it could be. 
 The question then would be — Did they use any reasonable pre- 
 caution in order to discover whether the wheel in its last condi- 
 tion was fit for service f Why it appeared to be perfectly clear 
 upon the evidence that, though they had tested the wheel by the 
 universal hammering in the first instance of applying it to the 
 purposes of a locomotive, it had never been subjected to it since, 
 and an imperfect weld, which may be imperceptible to the ham- 
 mer when the wheel is 2^ inches thick, may be quite perceptible 
 wlien the wheel is reduced to 1^. Therefore it was a question 
 for the jury. There was evidence that they actually applied the 
 test when the wheel was new ; there was evidence that they had 
 not applied it when the wheel was turned the first time, and when 
 it was turned the second, time ; and I think it is no answer in 
 fact or law to say that the test is not decisive. It might have 
 escaped the discovery, notwithstanding the test had been applied, 
 because at the time of the accident all parties were perfectly 
 agreed that it was an imperfect weld, which gradually came to 
 the surface at the time of the accident. The witnesses for the 
 plaintiff said in their judgment it was apparent that the thinness 
 of paper had been worn through. By the evidence of the wit- 
 nesses for the defendants, the thickness was no more than the 
 thickness of a bit of paper, and the question is whetlier, if it liad 
 been hammered, it would not have disclosed by the sound, im- 
 mediately, that there was some imperfection below, and that it 
 was not sound. Under these circumstances I perfectly concur in 
 the opinion expressed by my learned brothers, that there sliould 
 be no rule in this case." 
 
 This rule seems to be more consistent with principle, and bet 
 ter calculated to subserve public interests than that adopted m
 
 750 Private Corpokations. 
 
 New York ;' particularly when coupled with another rule, that 
 the mere fact that the vehicle was defective, jprima facie, raises a 
 presumption of negligence." 
 
 But this rule seems to have been essentially modified by later 
 decisions in that state, and there would seem to be no question 
 that some negligence is now required to be shown in order to 
 uphold a recovery.^ 
 
 There seems to be an inconsistency in holding the company up 
 to such a rigorous rule of liability as to cars, when no such rule 
 prevails as to the track over which tlie cars are propelled. If it 
 be said that the reason results from the fact that the cars are 
 manufactured, and therefore the company is bound, at its peril, 
 to know of the existence of latent defects, it may be answered 
 that the same is true of the track. It is manufactured so to 
 speak, and the same rule should apply to that, as applies to the 
 cars. Yet, the courts of Kew York hold that as to the track and 
 its management, the company is exonerated from liability, if it 
 has exercised the highest degree of care in respect to it.* 
 
 So, it has been held that an accident resulting from the mis- 
 placement of a switch, by " some evil-disposed person," not 
 connected with the company, the company being chargeable with 
 no fault, is an inemtahle accident for which the company is not 
 responsible.^ 
 
 In the selection of railc, and other materials of which its track 
 is composed, as well as in the construction of its roadway and 
 bridges, it is bound to exercise the highest degree of care, and 
 apply all those tests usually applied for ascertaining their suitable- 
 ness, and, having done that, aii(i keeping up the same degree of 
 vigilance in ascertaining whether it subsequently becomes de- 
 fective, it is not responsible for injuries resulting from defects, in 
 spite of such mgilance." It is difficult to conceive how a person 
 or corporation can be held chargeable with negligence, when he 
 has exercised the highest degree of care to prevent the injury.'' 
 
 1 Frink v. Potter, 17 111. 406 ; Ingalls » Frink v. Potter, 17 111. 406 ; Deyo 
 
 c. Bills, 9 Mete. (Mass.) 1. v. N. Y. C. R. Co., 84 N. Y. 9. 
 
 '^Dawson ■». Manchester, etc., R. Co., « Nashville, etc., R. Co. v. Messino, 
 
 5L. T.(N.S.)683; Brignoli ®. Chicago, 1 Sneed (Tenn.), 220; Deyo v. N. Y., 
 
 etc., R. Co., 4 Daly (N. Y. C. P.), 183. C. R. Co., ante. 
 
 3 Deyo V. N. Y. C. R. Co., ante. ' In Frink v. Potter, ante, where a 
 
 * Keeley v. Erie, etc., R. Co., 47 How. passenger was inj ured by the breaking 
 
 Pr. (N. Y.) 256. of an axle from the effect of frost,
 
 Negligence and Wrongful Acts of Agents, etc. 751 
 
 It must exercise tlie highest degree of care in all respects involv- 
 ing the safety of passengers, and if guilty of any, even the slight- 
 est negligence, it is responsible for all injurious consequences.' 
 
 Sec. 4:95. Duty of railroad company as to stations. — It is bound to 
 keep its stations and premises in proper repair, so as to prevent 
 injuries to passengers going to them to take, or arriving there 
 u;pon, their trains,* and a passenger arriving at the station con- 
 tinues to be a passenger until he has left their premises. So, too, 
 a person honafide at the station for the purpose of taking pas- 
 sage upon a train, is a passenger, although he has not in fact pur- 
 chased his ticket.' 
 
 Sec. 496. Instancesof negligence, where the corporation W£is held liable. 
 — Actions have been upheld for injuries sustained from defective 
 platforms;* from a failure to provide suitable lights to enable pas- 
 
 tbe court held that, if the defendant 
 •was guilty of any, even the slightest 
 negligence in not providing against 
 such a result, it was liable. This is 
 equivalent to holding that, if by the 
 exercise of any reasonable precaution 
 the result could have been averted, 
 the defendant was bound to exercise 
 such precaution, and failing to do so, 
 was liable for negligence. See, also, 
 Dawson v. Manchester, etc., R. Co., 
 ante; Toledo, etc., R. Co. v. Apperson, 
 49 111. 480 ; Reed «. N. Y. C. R. Co., 56 
 Barb. (N. T.) 493 ; Gonzales v. N. Y. 
 C. R. Co., 39 How. Pr. (N. Y.) 407. 
 
 1 Gay nor v. Old Colony R. Co., 100 
 Mass. 208. 
 
 ^McPadden v. N. Y. C. R. Co., 44 
 N. Y. 478. 
 
 The fact that the vehicle or track is 
 defective and an injury results, is 
 prima facie, evidence of negligence. 
 Brignoli «. Chicago, efrc.,R. Co., 4 Daly 
 (N. Y. C. P.), 183. 
 
 3 Buffett V. Troy and Boston R. Co., 
 40 N. Y. 168. 
 
 ''As where the flaps were improperly 
 turned back. Bramwell, B., in Corn- 
 man v. Eastern Counties R. Co., 
 4 H. & N. 784. 
 
 In McDonald i;. Chicago, etc., R. Co., 
 26 Iowa, 134, the plaintiff, in company 
 with her husband, purchased a ticket 
 at Cedar Rapids upon the defendants' 
 line of railway to Fulton, 111. In 
 attempting to get aboard the train 
 Bome twenty minutes before it waa 
 
 time for it to leave, and at a point some 
 distance from the usual place, she 
 stepped upon the end of a plank in 
 the platform which, being loose and 
 out of place at one end, gave way, and 
 let her down upon the track headfore- 
 most under the train, breaking her leg 
 and otherwise injuring her. It was 
 so dark that the plaintiff could not see 
 the condition of the plank. The 
 defendants showed that the point at 
 which the injury happened was some 
 300 feet from the station, and that the 
 usual place for passengers to get on 
 or off the train was at a point imme- 
 diately iH front of the station. 
 
 It was also shown by the defendant, 
 that it was customary when the train 
 arrived, as in this instance, from the 
 west, to run back so as to bring the 
 baggage and express cars to a point 
 opposite the freight depot for the 
 purpose of discharging and receiving 
 baggage and express matter. This 
 movement, on the evening on which 
 the accident in question happened; 
 placed the passenger coaches west of 
 the west end of the platform, so that 
 the nearest passenger car was about 
 one car-length beyond the steps at the 
 west end of the platform. It was 
 while the cars were thus standing 
 that the plaintiff, without waiting for 
 them to be drawn up to the platform 
 in front of the passenger depot, started 
 for them, walking the whole length of 
 the platform, and in descending the
 
 752 
 
 Pkivate Cokpokations. 
 
 sengers safely to leave the premises; * from defective steps to plat* 
 form;" from pits or unfenced holes in the station ground/ from the 
 slipperiness of stairs leading to the station;* from allowing articles to 
 
 Bteps the injury for which this action 
 was brought happened. Defendant also 
 produced evidence to the effect " that 
 there was plenty of room to get on 
 and oif the trains from the platform ; 
 and that there was no necessity for 
 any one to go down these steps to get 
 on. Before leaving trains always draw 
 up in front of the passenger depot 
 and stop to take on passengers. The 
 accident happened fifteen or twenty 
 minutes before ths leaving time 
 of the train. The steps are not 
 intended or used for passengers to 
 get on the trains." 
 
 The defendant asked the court 
 to give the following instructions, 
 viz. : 
 
 "1. If the jury believe from the 
 
 ' Patten ■». Chicago, etc., R. Co., 32 
 Wis. 524; Nicholson v. Lane. & 
 Yorkshire R. Co., 34 L. J. (Exch.) 
 84; Birkett v. Whitehaven June. , 4 H. & 
 N. 730; Martin v. Gt. Northern R. 
 Co., 16 C. B. 180; Cornman v. East- 
 ern Counties R. Co., 4 H. &N. 781; 
 Toomey v. London, etc., R. Co., 3 C. B. 
 (N. S.) 146 ; Foy v. London, etc., R. Co., 
 18 id. 225. 
 
 ^ McDonald v. The Chicago, etc.,R. 
 Co., ante. 
 
 ' Burgess v. R. Co., 95 Eng. Com. 
 Law, 923. 
 
 In Tobin v. Portland, Saco & Ports- 
 mouth R. Co., 59 Me. 183, the liability 
 of railroad companies to persons com- 
 ing to their stations upon business, 
 and not as passengers, for injuries 
 caused by defects in station platforms 
 was adjudicated, and it was held that 
 a hackman could recover of a railroad 
 company for an injury received while 
 carrying a passenger to their depot for 
 transportation, by stepping, without 
 fault, into a cavity in the platform 
 negligently left in a defective condi- 
 tion. It is the well-settled rule that 
 railroad companies are bound to keep 
 their platforms and landing places safe 
 and convenient for all who make use 
 of their cars as a means of convey- 
 ance. But it is not so clear what tlie 
 liability of the company is, in this 
 respect, to persons not passengers. 
 But AppletoNjC. J., in delivering the 
 
 evidence that the defendant, at the 
 time of the alleged injury at the sta- 
 tion at Cedar Rapids, was provided 
 with a safe and suitable platform in 
 front of and adjacent to the passenger 
 rooms of said station, so that passen- 
 gers could safely and conveniently 
 pass from said room to the trains, and 
 that passenger trains stopped at said 
 platform for the purpose of receiving 
 passengers, and if said plaintiff, in 
 attempting to get upon said train by 
 a different and unusual way and at a 
 different and unusual place, met 
 with said accident, then the plaintiff 
 ig not entitled to recover in this 
 action. 
 
 " 2. That if the plaintiff", Margaret 
 McDonald, attempted to enter said 
 
 opinion of the court in this case, said: 
 " The hackman, conveying passengers 
 to a railroad depot for transportation, 
 and aiding them to alight upon the 
 platform of the corporation, is aa 
 rightfully upon the same as the pas- 
 sengers alighting. It would be absurd 
 to protect the one from the conse- 
 quences of corporate negligence and 
 not the other. The hackman is there 
 in the course of business ; but it is a 
 business important to and for the con- 
 venience and profit of defendants. 
 The general principle is well settled 
 that a person injured, without neglect 
 on his part, by a defect or obstruction 
 in a way or passage over which he is 
 induced to pass, for a lawful purpose, 
 by an invitation, express or implied, 
 can recover damages for the injury 
 sustained against the individual so 
 inviting and being in fault for the 
 defect." Barrett "u. Black, 56 Me. 
 498 ; Carleton v. Franconia Iron and 
 Steel Company, 99 Mass. 216. From 
 the general duty which railroad com- 
 panies owe to persons thus apparently 
 invited, such as friends and com- 
 panions of passengers, porters and 
 hackmen, it would seem that they 
 are responsible for injuries resulting 
 from a neglect of that duty in re- 
 spect to platforms, station approaches 
 etc. 
 
 * Davis V. London, etc., R Co., 2 F. 
 & F. 588.
 
 Negligence and Wrongful Acts of Agents, etc. 7." 3 
 
 stand or lie upon the platform obstructing and endangering travel 
 over it, as a switch handle ; ' and generally the company is bound, 
 as to its passengers or persons upon its premises " by invitation," 
 to see to it that its premises are in such a condition, in all reapectSy 
 that a person in the exercise of ordinary care can leave them 
 without injury, and this extends to and embraces proper and suit- 
 able platforms, steps and walks, as well as suitable lights.''' 
 
 train at a place not prepared or 
 designed by the defendant for receiv- 
 ing passengers on trains, there being 
 no paramount necessity for so doing, 
 and in making such attempt she 
 received the said injury, then her 
 own fault contributed to tlie same, 
 and the plaintiflf cannot recover. 
 
 " 3. Tlie liability of the defendant as 
 a common carrier did not commence 
 as to the plaintiffs until the train 
 which they were to take was drawn 
 up to the usual place for receiving 
 passengers, unless they were directed 
 by some authorized agent of defend- 
 ant to go upon the train at another 
 and different place or before the train 
 reached the usual place." 
 
 Each of these was refused, and the 
 defendant excepted. 
 
 The court, after referring to the 
 issues made by the pleadings, charged 
 the jury as follows : 
 
 " The principal question for you to 
 determine is, by whose fault or negli- 
 gence did the accident occur? If one 
 of the steps was loose and not nailed 
 down, by reason of which the accident 
 happened, it is such a want of care as 
 would render the defendant liable, 
 unless you find that the accident hap- 
 pened, or was contributed to, by the 
 want of ordinary care and prudence on 
 the part of the plaintiff. It is for 
 you to determine from the evidence 
 whether the plaintiff used ordinary 
 care and prudence in leaving the 
 depot and going to the cars by the 
 way and at the time she did, and by 
 ordinary care is meant such care and 
 prudence as an ordinarily prudent 
 person would exercise under like cir- 
 cumstances. If you find that an ordi- 
 narily prudent person would not have 
 gone down the steps of the platform 
 
 ' Martin v. Great Northern Railway 
 Co., 16 C. B. 179. 
 
 95 
 
 where the accident occurn^d, but 
 would have waited until the jjassenger 
 cars were opposite the passenger depot, 
 then the defendant is not liable. And 
 if you find that the plaintiff went by 
 a way which was not used or traveled 
 over by passengers to enter the cars, 
 and that a person of ordinary pru- 
 dence would not have gone by that 
 way, you may fairly infer that there 
 was a want of ordinary care on her 
 part. Passengers must exercise ordi- 
 nary care in approaching and entering 
 the cars. If, however, you find that 
 the defendant backed its train up to 
 the place where it stood when the 
 accident happened ; that persons could 
 conveniently and safely approach the 
 train where it then stood but for the 
 defective step, aud there was no rule 
 or regulation of the company prohib- 
 iting persons from approaching the 
 cars by that way, and that an ordinar- 
 ily prudent person would have ap- 
 proached the train by that way, the 
 defendant is liable, if the accident 
 occurred by reason of the defective 
 step." 
 
 The defendant excepted to thia 
 charge, and it was fully sustained on 
 apjx'al by the supreme court of Iowa. 
 
 Actions have been upheld for inju- 
 ries resulting from defective depot, 
 floors. Liscombe v. Jersey, etc., R. Co., 
 6 Lans. (N. Y.) 75 ; from defective plat- 
 forms. Tobin r>. Portland, etc., R. Co., 
 59 Me. 183 ; Sevmour «. Chicaaro, etc., 
 R. Co., 3 Biss. (U. S C. C.) 43 ; Mc- 
 Donald V. Chicago, etc., R. Co., 26 
 Iowa, 124 ; and generally for injuries 
 resulting upon their premises without 
 the fault of the passenger, from de- 
 fects thereon, or obstructions thereon. 
 Burgess v. Railroad Co., 95 Eng. Com, 
 Law, 923. 
 
 ' Cornman v. Eastern Co. Railway 
 Co., 4 H. &N. 781. 
 
 In Beard ». Conn. «& Pass R. Co., 48
 
 754 
 
 Private Cokporations. 
 
 Sec. 497. Duty of railroad corporations as to stopping of trains. — 
 The trains must also be stopped at the station so that passengers 
 can ahght upon the platform, and if they are stopped at any other 
 place, and the station is called, so that passengers are required, or 
 have a i-ight to understand that they are required to stop there, 
 the company is liable for injuries received in leaving such place, 
 to the same extent and upon the same ground that it would be 
 liable for injuries received by the defectiveness of its own preni- 
 i 
 
 iscs. 
 
 Vt. 101, the plaintiff was at the defend- 
 ant's depot for the purpose of taking 
 the train. There was a platform ex- 
 tending from the east side of the depot 
 to the track over which passengers 
 passed in going to and from the cars. 
 There were stairs leading through the 
 center of the depot to the street on the 
 opposite side which was several feet 
 lower than the track, and there were 
 also stairs at either end of the depot, 
 leading from the platform to the street. 
 The stairs at the north end of the de- 
 
 ' Columbus, etc., R. Co. v. Farrell, 
 31 Ind. 408 ; Memphis, etc., R. Co. v. 
 Whitfield, 44 Miss. 466. 
 
 In Delamatyri). The Milwaukee, etc., 
 R. Co., 24 Wis. 578, the plaintiff re- 
 ceived an injury while descending from 
 the defendant's train at Hanover Junc- 
 tion, as was alleged, by reason of the 
 defendant not having furnished a safe 
 and proper means of descent. The 
 train consisted of only two cars, of 
 which the one in the rear was the 
 ladies car, and the other a gentleman's 
 car, immediately in front of which was 
 a baggage car. When the train 
 stopped at the junction the plaintiff 
 was seated in the ladies' car. By direc- 
 tion of the hrakeman she passed through 
 the gentleman's car to the car plat- 
 form at its front end, for the purpose 
 of descending them. The steps at- 
 tached to this platform had not been 
 drawn up opposite to the station walk 
 or platform. The platform was only 
 a few inches above the rail, and nearly 
 two and a half feet below the lower 
 car step, and was over three feet from 
 the rail horizontally. The plaintiff 
 could not reach the station platform, 
 by stepping down in the usual man- 
 ner, but was obliged to jump some 
 distance obliquely. The ground im- 
 mediately opposite the steps was 
 
 pot were open at the top, and there 
 was nothing to indicate that they were 
 not for the use of passengers. In fact 
 they were built by and were intended 
 for the sole use of the express com- 
 pany, but they were on the defendant's 
 premises. The plaintiff'in attempting 
 to iDass down these stairs in the dark 
 from the- iipper platform to the street, 
 without fault on her part, fell from 
 the lower platform to the ground and 
 was injured. It was held that the de- 
 fendant was responsible for the injury 
 
 muddy and slanted away rapidly from 
 the ends of the ties, so as to make a 
 kind of pit, unsuitable for a landing 
 place. The sister of the plaintiff had 
 got off at this point, safely, immedi- 
 ately before the plaintiff attempted to 
 do so. The plaintiff descended to the 
 lower step holding a sunshade and 
 basket in one hand, and her skirts 
 with the other, hesitated, and made 
 some remarks about the impracticabil- 
 ity of alighting there, but being en- 
 couraged by her sister, took the hand 
 of the latter and sprang for the plat- 
 form. As she sprang, her skirts caught 
 upon a part of the brake, and she fell 
 in such a way that her head and 
 shoulders and a considerable portion 
 of her body rested upon the station 
 platform, and in the fall, broke her 
 arm. No officer or employee of the 
 company was present to aid her in 
 alighting. tJnder this state of facts 
 it was held that the plaintiff was en- 
 titled to recover. In commenting up- 
 on the question whether the plaintiff, 
 under the circumstances, was guilty 
 of such contributory negligence as 
 would prevent a recovery by her, 
 Cole, J., very pertinently said : " As 
 a matter of law, to cliaracterize this 
 conduct of hers as careless and negli- 
 gent, would seem to be manifestly un-
 
 Negligence and "Wkongful Acts of Agents, etc. 7."5 
 
 So, too, it is the duty of the company to stop its train at a 
 station long enough to give all passengers desiring to stop there 
 time to get out of the cars, and failing to do so, if a passenger 
 while the cars are in motion, but before tliey have acquired 
 rapid motion, jumps from the cars and is injured, the company 
 is liable therefor.' 
 
 warranted," and it was left for tlie 
 jury to say, whether in fact the con- 
 duct of the plaintiff was so negligent 
 as to estop her from a recovery. 
 
 A similar doctrine was held in Rob- 
 son v. The N. E. R. Co., L. R., 10 Q. B. 
 271, where a passenger of a railway is 
 invited to alight at a spot where there 
 is no platform, so that usual means of 
 descent are absent, the duty of the 
 railway company not to expose the 
 passenger to undue danger requires 
 them to provide some reasonably fit 
 and safe substitute ; and, in tlie case 
 of a female passenger, a jury may 
 reasonably find that the company fails 
 in this duty where the only means of 
 alighting provided are tlie usual iron 
 step and footboard, with no attendants 
 to assist the passenger in alighting. 
 Plaintitl', a female, was a passenger by 
 defendant's railway to B.,a very small 
 station ; on the arrival of the train at 
 the station tiie engine and part of the 
 carriage in wliich plaintift' was riding 
 were driven past the end of the plaL- 
 forin, which is short, and came to a 
 standstill, the door of the plaintiff's 
 compartment being beyond the end of 
 the platform. Upon the train stop- 
 ping, plaiutifl^rose and opened the door, 
 and stepped on to the iron step ; she 
 looked out and saw the station-master, 
 who is the only attendant kept there, 
 taking luggage out of or putting lug- 
 gage into a van. She did not see the 
 guard or any other railway servant, 
 and she stood on the step looking for 
 somebody to help until she became 
 afraid of the train moving away ; and, 
 no one then coming, she tried to alight 
 by getting on to the footboard ; slie 
 had her back to the carriage, and she 
 liad hold of the door with her right' 
 hand, and got one foot on to the foot- 
 board, and whilst endeavoring to get 
 the other foot on to the footboard she 
 
 lost her hold of the carriage door, and 
 slipped, and fell, and was injured. 
 ■She had a small bag on her left arm, 
 and an uml)rella and two small ar- 
 ticles in her left hand, but nothing in 
 lier right hand. Tlie judge liaving 
 nonsuited the plaintiff on the above 
 evidence, with leave to enter a verdict 
 for the plaintiff, /«^W, first, that there 
 was evidence from wliiclia jury might 
 have properly found tliat the plaintiff 
 was invited or liad reasonable ground 
 for supposing she was invited to alight 
 by the company's servants ; and that 
 the defendants had failed in their duty 
 toward the plaintiflf", and had not pro- 
 vided a reasonable substitute for a 
 platform. Also, that the jury might 
 not improperly have found that tlie 
 expectation of being carried beyond 
 the B. station was reasonably enter- 
 tained by the plaintiff, and that the 
 inconvenience would have been such 
 as not to render it imprudent on lier 
 part to expose herself to the danger 
 incurred in alighting; and that the 
 defendants were, therefore, liable fur 
 the injury resulting from the plain- 
 tiffs act, which had been caused by 
 their negligent breach of duty. And 
 that the nonsuit was therefore wrong, 
 and the verdict ought to be entered 
 for the plaintiff. 
 
 In Indianapolis "R. Co. v. Farrell, 31 
 Ind. 408, the train ran beyond the plat- 
 form where passengers were usually 
 landed and stopped over a culvert, and 
 the railroad hands, whose duty it was 
 to announce the stations, announced 
 the station. The plaintiff, without 
 fault on his part, in getting off from 
 the train (it being so dark that he 
 could not see where the train was),, 
 fell into the culvert and was injured, 
 and it was held that he was entitled 
 to recover. 
 
 1 Filer v. N. Y. C. R. Co., 49 N. Y. Mo. 509 ; Illinois Cent. R. Co. v. Able 
 47 ; Loyd v. Hannibal, etc., R. Co., 53 59111. 131.
 
 756 Pkivate Coeporations. 
 
 " It is the duty of railway passenger carriers," say the court in 
 McDonald v. Chicago, etc., R. Co., ante, " to provide comfortable 
 rooms for the accommodation of passengers, while waiting at sta- 
 tions, and to enforce such regulations, in regard to smoking therein, 
 as to enable passengers to occupy them in reasonable comfort. If 
 this is not done, it will afford reasonable excuse for passengers to 
 enter the cars before they are drawn up in front of the platform 
 in preparation for immediate de]3arture. And, if in so doing a 
 passenger sustains injury through a defect in the platform, against 
 or opposite which the cars are standing, * * * the company 
 will be held responsible. Railway passenger carriers have power 
 to make reasonable rules and regulations, in regard to the con- 
 duct of passengers, extending to the time and mode of entering 
 the cars ; but such rules and regulations must, in some way, be 
 made known to passengers^ or they will not be in fault for not 
 conforming to them." It was, accordingly, held, in this case, 
 that the female plaintiff, who found the passenger room unfit for 
 occupation, by reason of tobacco smoke and other impurities, and at- 
 tempted to enter the cars which liad not yet been drawn up to 
 the platform, and was injured by the giving away of the steps at 
 the end of the platform, was entitled to recover. Dillon, C. J., 
 laid down the following rule as applicable to all cases of injury 
 
 But it seems that no recovery can be company is bound to stop the train, or 
 
 had if the cars are under such motion because it is very important that the 
 
 as to render it obviously dangerous for passenger should stop at that particu- 
 
 a person to attempt to leave them, lar time. The company, in such case, 
 
 Damout v. N. 0., etc., R. Co., 9 La. Ann. is bound to respond in damages for its 
 
 441; Jeffersonville, etc., R. Co. «. Hend- breach of duty in not stopping, 6?/.^ ia 
 
 ricks, 26 Ind. 228; R. Co. «. Aspell, 23 not liable for ivjuries received by the 
 
 Pa. St. 147 ; Gavett v. Manchester, passenger in attempting to leave when 
 
 etc., R. Co., 16 Gray (Mass.), 501 ; and it is dangerous for him, to do so. 
 
 under sucli circumstances it is not suf- Georgia R. Co. v. McCurdy, 45 Ga. 288. 
 
 licient to charge the company that the But in all cases the question of liabil- 
 
 conductor advised the passengers to ity must necessarily be determined by 
 
 make the attempt. It is the duty of the facts and circumstances of each 
 
 the passenger to exercise his own case. Whether the train was in rapid 
 
 judgment, and if the danger was so motion, whether the train was started 
 
 great that a man of ordinary prudence while the passenger was attempting 
 
 would not have attempted it, he is to leave, and whether the real danger 
 
 guilty of such contributory negligence was obvious. Jetfersonville R. Co. v. 
 
 as bars a recovery. Chicago, etc., R. Hendricks, ante. But see Burrows v. 
 
 Co. «. Randolph, 53 111 . 510 ; Jefferson- Erie R.Co., 3 T.& C. (N. Y.) 44, in which 
 
 ville.etc ,R.Co. v.'^vf\ti,ante ; Chicago, it was held tliat no recovery could be 
 
 etc., R. Co. 1). Hazzand, 26 111. 373. had where the injury was brought 
 
 W^hen the danger is apparent it must about by the action of a person not in 
 
 not be braved simply because the the employ of the company.
 
 Negligence and AVkongfl'L Acrs of Ackxts, etc. 757 
 
 about stations and in entering cars : " Railway companies are 
 bound to keep in a safe condition all portions of tlieir platfonna 
 and approaches thereto, to which tiie public do or would naturally 
 resort, and all portions of their station grounds reasonably near 
 to the platforms, where passengers, or those who have purchased 
 tickets, with a view to take passage on their cars, would naturally 
 or ordinarily be likely to go." ' 
 
 Railway companies are bound to bring their trains to a halt at 
 places convenient for passengers to alight.^ In CocHe v. South- 
 eastern Railway Company^ ante^ it ai)peared that the car in which 
 the plaintiff rode, being the last car, remained about four feet 
 from the platform when the train had stopped, and the plaintiff, 
 
 ' Barges v. R. Co., 95 Eng. Com. 
 L. 923 ; Martin v. R. Co., 81 id. 179. 
 
 In Shepperd ^. The Midland Railway, 
 20 W. R. 705, the plaintiff, while wait- 
 ing for the train, it being cold, walked 
 back and forward on the platform in 
 front of the station, and slipping on a 
 strip of ice, fell, dislocating his shoul- 
 der. Held that he could recover. 
 
 In Caswell «. Boston h Wor. R. Co., 
 98 Mass., it was held that where a pas- 
 senger had stepped upon the platform 
 in front of the station to wait for a 
 train, and by the negligent misplace- 
 ment of a switch, an engine appeared 
 to be approaching directly toward the 
 platform, and the passenger had cause 
 to apprehend danger, and, while run- 
 ning to avoid it, was injured, the com- 
 pany was liable. 
 
 In Lougmore v. G. W. Ry. Co., 115 
 Eng. C. L. 183, it appeared that a rail- 
 way company, for the more convenient 
 access for passengers between two 
 platforms of a station, erected across 
 the line a wooden bridge which the 
 jury found to be dangerous. Held, 
 that the company were liable for the 
 death of a passenger through the 
 faulty construction of the bridge, al- 
 though there was a safe one, about 
 one hundred yards further around 
 which the deceased might have used. 
 
 In Cockle ■«. S. E. Railway Co., 27 
 L. T. (N. S.) 320, a railway train in 
 which the plaintiff was a passenger, 
 on arriving at the station of the plain- 
 tiffs destination, was drawn up with 
 the body of the train alongside the 
 platform, but with the last carriage, 
 
 in which the plaintiff rode, opposite a 
 receding part of the platform, at which 
 persons could not aligiit — a apace of 
 about four feet intervening between 
 it and the train. Arriving trains were 
 not usually drawn up at this spot, but 
 at a point farther on, where the plat- 
 form was well lighted with gas lanipa 
 It was a dark night, and there were no 
 lamps lighted near the place wheie 
 the plaintiff's carriage stopped. !N*o 
 express invitation to the passengers to 
 aliglit, and no warning of danger in 
 alighting was given by the company's 
 servants, but the train had come to a 
 final standstill. The plaintiff" opened 
 the door of her carriage, stepped out, 
 and fell, and tliereby sustained in- 
 juries in respect of which she brought 
 her action against the company. Held, 
 by the court (athrniing the judgment 
 of the court of coinnian pleas, and fol- 
 lowing Pneger n. The Bristol and Ex- 
 eter Railway Co.. 24 L. T. R. [N. S.] 
 105), that the action was maintainable; 
 for the leaving a carriage which has 
 been brought up to a place at which 
 it is unsafe for a passenger to alight, 
 under circumstances which warrant a 
 passenger in believing that it is in- 
 tended ehe shall get out, and that she 
 may, therefore, do so with safety, 
 without any warning of her danger, 
 amounts to negligence on the part of 
 the company, for which, at least in 
 the absence of contributory negligence 
 on the part of the passenger, an action 
 may be maintained. 
 
 * Delamatyr v. Railroad Co., 24 Wi^ 
 518.
 
 758 
 
 PllIVATE COKPOKATIONS. 
 
 in attempting to aliglit, believing she was about to step on the 
 platform, fell, in conse'][uence of the insufficiency of light at that 
 point, and was injured. Held, that plaintiff could recover. In 
 this case, Cooicbuun, C. J., said : " An invitation to passengers to 
 alight on the stojjping of a train, without any warning of danger 
 to a passenger, who is so circumstanced as not to be able to alight 
 without danger, such danger not being visible and apparent, 
 amounts to negligence, * * * and it appears to us that the 
 bringing up of a train to a final stand-still, for the purpose of the 
 passengers' alighting, amounts, to an invitation to alight, at all 
 events, after such a time has elapsed that the passenger may 
 reasonably infer that it is intended he should get out if he 
 proposes to alight at the particular station." ' 
 
 Reasonable time for leaving the cai*s should be allowed, and if 
 the time-tables do not allow sufficient time for all passengers, 
 whether young or old, to leave the cars in safety, and an injury 
 
 'Prseger v. The Bristol and Exeter 
 Eailway Co., 24 L. T. Rep. (N. S.) 
 105, was a case exactly similar, and 
 the plaintiff recovered. 
 
 In Colorado & Indiana Central 
 Railroad Co. v. Farrell, 31 Ind. 408, 
 where- the train passed beyond the 
 platform and stopped, leaving one of 
 the cars over a culvert, the conductor 
 announcing the name of the station, 
 and a passenger in attempting to alight 
 was injured by reason of darkness 
 and not being able to see where the 
 car was, the company was held liable. 
 Whittaker v. Manchester & Sheffield 
 R. Co., Law Rep., 5 C. P. 464, note 3 
 was a case precisely similar, and the 
 plaintiff was allowed to recover. But 
 in Bridges v. North London R. Co., 24 
 L. T.Rep. (N. S.) 835; L. R., 6 Q. B. 
 377, it was held that where a passen- 
 ger alighted from the last car of a 
 train, while such car was standing 
 in a tunnel in the vicinity of a station, 
 a recovery could not be had for the 
 death of the passenger in consequence, 
 there being no evidence that the train 
 had come to a final stand-still, or to a 
 place where the company designed 
 the passenger should alight. 
 
 See, also, Siner v. Great Western 
 Railway Co., Law Rep., 4 Ex. 117. 
 
 In Frost v. Grand Trunk Railway Co., 
 
 10 Allen, 387, it was held, that " if a 
 railroad train is stopped at night, 
 merely for the purpose of allowing a 
 train, which is expected from the op- 
 posite direction, to pass by, and no 
 notice is given by the servants of the 
 company to passengers that they may 
 leave the cars, one who leaves the 
 cars and walks into an open cattle- 
 guard, and receives personal injury 
 thereby, cannot maintain an action 
 against the company to recover dam- 
 ages therefor ; and it is immaterial 
 that he was misinformed by some per- 
 son not in the employment of the com- 
 pany that he must go and see to having 
 his baggage passed at a custom-house, 
 supposed to have been reached by the 
 train, or that the train was near a pas 
 senger station, which was not the 
 place of his destination." 
 
 In Forsyth d. Boston, etc., R. Co., 
 103 Mass. 510, where a passenger, on 
 alighting from a car at night, instead 
 of walking along the platform to the 
 end steps, voluntarily stepped off the 
 side into a cattle-guard, although 
 knowing where the highway crotised 
 the railroad track, it was held tluit he 
 was not in the exercise of due care, 
 and could not recover for injuries thus 
 occasioned.
 
 Kegligence and AYkoxgful Acts of Agents, etc. 7."'9 
 
 is thereby occasioned, the company will be liable.' But sick per 
 sons, and persons unable to take care of themselves should pro- 
 vide themselves M'ith proper assistants while traveling in railroad 
 cars ; and if a person is sick and unable to walk without assist- 
 ance, thereby requiring longer delay at the station than usual, he 
 should give timely notice to the conductor." 
 
 Passengers at intermediate stations, where trains stop for 
 refreshments, have the same rights in reference to safe egress and 
 ingress and proper station accommodations and platforms as at 
 the termini of the passage.^ But the rights of the passenger 
 while a train is stopping at an intermediate station for the pur-. 
 poses of the railroad alone, and not for the refreshment of the 
 passenger^ are not so extended.* 
 
 From the decisions it is apparent that passengers are allowed 
 considerable latitude in traveling by railroad : that the responsibil- 
 ity of railroad companies is made commensurate with the general 
 duties which they owe the passengers, such as safe, convenient 
 and comfortable modes of ingress and egress from trains, plat- 
 forms, station approaches and passenger rooms ; and that the ap- 
 plication of the rules of law, both in this country and in England, 
 has been thus far characterized with a due regard both for the 
 rights of the railways and the public. 
 
 In an action against a railroad company, for injuries, resulting 
 from attempting to leave the train when in motion, an impor- 
 tant element in the case is, whether the train was in fact stopped 
 
 ■ Railroad Company v. Baddeley, 54 ^ McDonald v. Chicago & N. W. R, 
 
 111. 19 ; 5 Am. Rep. 71. Co., ante. 
 
 - New Orleans, etc., R. Co. i\ Stat- * Frost v. Grand Trunk R. Co., ante. 
 
 ham, 42 Miss. 607. In Illinois Central In State v. Grand Trunk R. Co., 4 Am. 
 
 R. Co. V. Slatton, 5 Am. Rep. 100 ; o4 Rep. 258 ; 58 Me. 17G, the rule was 
 
 111. 13o, it appeared that the train upon laid down that a i>assenger on a rail- 
 
 which the passenger was traveling, way, who purchases a ticket for a dis- 
 
 having stopped at a station, remained tant station and gets off the train 
 
 a reasonable time for passengers to temporarily, and without notice, invi- 
 
 alight, but he, not availing himself of tation or objection, while it is stopping 
 
 the opportunity, waited until the train at an intermediate station, dees no il- 
 
 began to move, wlien, in attempting legal act, but, for the time, he surren- 
 
 to leave the cars, he was fatally in- ders his place and rights as a passen- 
 
 jured. Held, that the company was ger ; but he may return and resume 
 
 not liable, there being no proof of his place and rights as a jiassenger on 
 
 mismanagement of the train or care- the train before it starts, and the offi- 
 
 less conduct of the employees. cers of the railway are bo'ind to give 
 
 reasonable notice of the starting of 
 the train.
 
 7<10 Peivate Cokpokations. 
 
 a sufficient time, reasonably, to enable the passengers to get off. 
 If so, it cannot be said to have been guilty of negligence in the 
 management of its train, and no recovery can be had. ' In the 
 last cited case, the court held that the defendant was entitled 
 to an instruction, that " if the train had stopped a sufficient time 
 to enable the plaintiff to' leave it safely, and had then again 
 started on its course, and passed the platform, and the plaintiff 
 then left the platform of the car while the train was in motion, 
 rather than be carried by, he was guilty of carelessness and could 
 not recover for the injuries sustained by him ; " also, that " if the 
 defendant stopped its train a sufficient time to allow the plaintiff 
 to leave it safely, it was not guilty of negligence." The train 
 must be stopped a sufficient time reasonably to enable all persons 
 desiring to stop at the station to do so, and the question as to 
 whether it did so in a given case is one of fact for the jury. " 
 
 Sec. 499 . injuries received in getting upon a train- — The same duty 
 and the same rule of liability exists on the part of a railroad com- 
 pany, in reference to stopping its trains sufficiently long to enable 
 passengers to get on to it. Generally, it may be said, a person 
 attempting to get aboard a train while it is in motion, is guilty of 
 such contributory negligence as will bar a recovery for an injury 
 received while attempting to do so. And the fact that pressing 
 business requires that he should take the train, or any otJter ex- 
 cuse, will not excuse his negligence, or entail the consequences 
 thereof upon the company. If he was in fact guilty of contrib- 
 utory negligence, although the company was also negligent, no 
 recovery can be had. ' But while, as previously stated, generally, 
 an attempt to get aboard a train in motion will be treated as evi- 
 dence of negligence jper se on the part of the passenger, yet, in- 
 stances may exist when it is not so, and the passenger is justified 
 
 ' Davis ». Chicago, etc., R. Co., 18 Pa. St. 203 ; Fairraount, etc., R. Co. 
 
 Wis. 175. v. Statler, 54 id. 375; Toledo, etc., 
 
 ^ Penusylvania, etc., R. Co. v. Kil- R. Co. v. Baddesley, 54 111. 19 ; 
 
 gore, 32 Pa. St. 292 ; Paulk v. S. Southern R. Co. v. Kendrick. 40 Miss. 
 
 W R. Co., 24 Ga. 356; Illinois, etc.. 374; Inhoff v. Chicago, etc., R. Co., 
 
 R. Co. ■». Statton, 54 111. 123 ; Lam- 20 Wis. 344. 
 
 peth V. North Carolina R. Co., 66 ^ jjabner «. New Orleans, etc., R. 
 
 N. C. 494 ; Evansville, etc., R. Co. v. Co., 23 La. Ann. 492 ; Keating «. N. Y. 
 
 Duncan, 28 Ind. 441 ; Lloyd v. Hanni- C. R. Co., 8 Lans. (N. Y.) 409 ; 
 
 bal, etc., R. Co., 53 Mo. 509; Pen- Knight v. Pontchartrain K, Co., 23 
 
 neylvania R. Co. v. Kilgore, 32 La. Ann. 462.
 
 Negligence and "Wrongful Acts of Agents, etc. 701 
 
 in malving tlie attem])t, but in such cases, liability arises if at all 
 because of the fact that the danger was not obvious ; ' or because 
 the agents of the company directed the passenger to make the 
 attempt." But, even where the agents of the company direct the 
 passenger to do so, the company is not liable, if it 'was gi^oss negli- 
 gence on the part of the passenger to make the attertipt, in view 
 of all the circumstances, and whether it was so or not, is a ques- 
 tion for the jury. ' 
 
 Sec. .500. Accommodations — contributory negligence. — A railroad 
 company is bound to furnish its passengers reasonable and proper 
 accommodations for traveling, and if it has an insufticient num- 
 ber of cars, so that passengers are compelled to ride upon the 
 flatform, it is liable for injuries received by them while rid- 
 ing there, ^ but for injuries received while tmnecessarily riding 
 there the company is not responsible, * nor while passing 
 from one car to another unnecessarily. ' The fact that the don.- 
 dnctor permits a passenger to ride upon the platform, when there 
 is no necessity for his doing so, does not render the company lia- 
 ble for injuries received by him ; no person has a right to 
 charge another with the consequences of his own negligence, 
 simply because such persons permitted him to do the act. ^ In 
 all cases, when questions of liability under such circumstances 
 arise, it is a question for the jur}'' whether the plaintiff was guilty 
 of such contributory negligence as will prevent a recovery, and 
 this must be determined in view of all the facts, and if upon the 
 whole it is found that the negligence of the 'company was the 
 proximate cause of the injury, the fact that the plaintiff was neg- 
 ligent in being where he was will not prevent a recovery. * 
 
 ' Curtis 1?. Detroit, etc., R. Co., 27 'Higgins v. N. T. & Harlem R. 
 
 Wis. 158 ; Johnson v. Westchester, Co., 2 Bosw. (N. Y.) 132. 
 
 etc., R. Co., 70 Pa. St. 357. » Zemp v. Wilmington, etc., R. Co., 
 
 « Detroit, etc., R. Co. v. Curtis. 23 9 Rieli (S. C.),84; Edgerton «. N. Y. 
 
 Wis. 152. & Harlem R. Co., 35 Barb. (N. Y.) 389 ; 
 
 3 Phillips V. R. & S. R. Co., 49 N. Y. Sheridan v. Brooklyn, etc., R. Co., 36 
 
 177; Curtis ». Detroit, etc., R. Co., «//<e. N. Y. 39; Willis v' Long Island R. 
 
 * Willis V. Long Island R. Co.,34N. Co., 34 id. 670; Clark v. 8th Ave. R. 
 Y. 670. Co., 36 id. 135 ; Meesel v. Lynn, etc., 
 
 * Hickey v. Boston, etc., R. Co., 14 R. Co., 8 Allen (Mass.), 234. So for 
 Allen (Mass.), 429 ; Quin «. HI. Cent. R. injuries received while riding in the 
 Co., 51 HI. 495. baggage car, if by consent of con- 
 
 ^ Macon, etc., R. Co. v. Johnson, ductor. O'Donnel v. AUeghanr R. 
 38 Ga. 409. Co., 50 Pa. St. 490. So where a' paa- 
 
 '96
 
 7G2 
 
 Private Cokporatioxs. 
 
 Sec. 501. Duty to passengers — implied obligations. — Xot only 
 is a railroad company or other carrier of passengers bound 
 to exercise proper care to prevent injury to its passengers 
 while upon its jpreviises^ in going to or from its trains^ hut it 
 is also hound to exercise reasonahle care and diligence in pro- 
 tecting them, from insults or injury from other passengers, while 
 riding thereon, as well as from its own se7"vants. It is not held 
 to the same degree of care in this respect as it is held to in the 
 selection of the agencies of its business, but it is bound to exer- 
 cise that degree of care that a prudent man would exercise under 
 similar circumstances in the conduct of his own business. The 
 mere fact that one passenger is injured by an assault committed 
 by another does not of itself even constitute a. prima facie cause 
 of action, but if it is also shown that the person who committed 
 the injury was improperly admitted iipon the train, being 
 druiik and disorderly at the time / or was improperly permitted 
 to remain there hecause of his riotous or improper conduct 
 after he got upon the train, the company is liable for all the 
 consequences. ' 
 
 Benger leaps from the car to avoid in- 
 jury, if tlie danger was such as to 
 justify the step, the company is re- 
 sponsible for the consequences. S. 
 West. R. Co. ». Paulk, 24 Ga. 356 ; R. 
 Co. «. Aspell, 26 Pa. St. 167 • Frink v. 
 Potter, 17 111. 406 ; Eldridge v. Long 
 
 Island R. Co., 1 Sandf. (N. Y.) 89. So 
 for injuries received from sudden 
 movements of the train, either in 
 starting or stopping. Stimson d. N. 
 Y. Cent. R. Co., 82 N. Y. 383 ; Gordon 
 v. R. Co., 40 Barb. (N. Y.) 546 ; Brown 
 V. N. Y. Ceut. R. Co., 32 N. Y. 597. 
 
 'Goddard-y. Grand Trunk Railway 
 Co., 57 Me. 202; 2 Am. Rep. 39 ; Rail- 
 road Co. V. Finney, 10 Wis. 388 ; Moore 
 v. Railroad Co., 4 Gray (Mass.), 465; 
 Ramsden «. Boston and Albany R. Co., 
 104 Mass. 117 ; 6 Am. Rep. 200; Phila. 
 & Reading R. Co. ■;;. Derby, 14 How. 
 (U. S.) 468 ; Sherley «. Billings, 8 Bush 
 (Ky.), 147; 8 Am. Rep. 451; Bryant ». 
 Rich, 105 Mass. 180 ; 8 Am. Rep. 311 ; 
 Holmes ». Wakefield, 12 Allen (Mass.), 
 580 ; Duggins v. Watson, 15 Ark. 118 ; 
 Passenger R. Co. -y. Young, 31 Ohio St. 
 518 ; 8 Am. Rep. 78 ; Railroad Co. ■«. 
 Blocher, 27 Md. 277 ; Nieto -u. Clark, 1 
 Clifford (U. S. C. C), 145; F.lint v. 
 Trans. Co., 34 Conn. 554 ; Seymour v. 
 Greenwood, 7 H. & N. 355; Railroad 
 Co. v. Vandiver, 42 Pa. St. 865 ; Land- 
 reauxu.Bel, 5 La. {(). S.)434; Rail- 
 road Co. «. Hinds, 58 Pa. St. 512 ; The 
 
 Atlantic and Qt. Western R. Co. v. 
 Dunn, 19 Ohio St. 162; 2 Am. Rep. 382; 
 The Little Miami R. Co. b. Wetmore, 
 19 Ohio St. 110 ; 2 Am. Rep. 373 ; Jef- 
 ferfeOnvilleR. Co. ». Rogers, 88 Ind. 116; 
 10 Am. Rep. 103; Craker v. The Chi- 
 cago and North Western R. Co., 86 
 Wis. 657; 17 Am. Rep. 504; Chamber- 
 lain y. Chandler, 4 Mas. (U. S.) 242 ; 
 Stephen ». Smith, 29 Vt. 190 ; Railroad 
 Co. «. Anthony, 48 Ind. 183 ; Bayley -y. 
 Railroad Co., L. R., 7 C. P. 415*; Cole 
 man v. R. Co., 106 Mass. 160 ; Maroney 
 v. R. Co., id. 153; Brand v. Railroad 
 Co., 8 Barb. (N. Y.) 368 ; Weed -y. 
 Panama R. Co., 17 N. Y. 362. 
 
 lu Brand v. Railroad, 8 Barb. 368 
 the court say : "A passenger ou board 
 a stage-coach or railroad car, and a 
 person on foot in the street, do not 
 stand in the same relation to the car-
 
 Kegligenck and "Wkoxgful Acts of Agents, etc. 7C3 
 
 OKC. 503. Ground upon which liability is predicated. — The lia- 
 bility of a railroad company to its ])asseng(.'rs is predicated 
 upon a different ground from its liability to its own or ser- 
 vants' agents, or others who do not occnpy that relation to it. 
 The rule is, that where a person or corporation by contract or 
 statute is bound to do certain things, they are absolutely responsi- 
 ble for the manner in which the duty is performed, and cannot 
 excuse themselves from liability because they have committed 
 the duty to others who were believed to be possessed of supej-ior 
 qualiUcations for performing such duties. Mr. Wood, in his 
 Law of Master and Servant (pp. 645-652), in commenting upon 
 this question, says : " lie is bound to discharge his legal obli- 
 gation to the latter, and if he commits this duty to another, 
 he does it at his peril." ' For instance," he adds, " and to illus- 
 trate the application of the rule, a carrier of passengers for hire — 
 as a railroad company — by the sale of a ticket, or the receipt of 
 the price for transportation from one point to another expressly 
 contracts to carry such person to the point covered by the con- 
 tract. In addition to that, the 'aw impliedly raises a contract on 
 his part to carry such person safel}'^, so far as human foresight 
 can guard against disaster ; to carry him in the usual and ordi- 
 nary mode, incident to such travel ; to treat him respectfully, 
 and protect him, so far as due care on his part can do so, 
 from injury from other persons riding by the same conveyance. 
 These are among the imjjlied obligations imposed, and they are 
 absolute duties that cannot be shirked or evaded, and for a failure 
 in the observance of which he is liable to the passengers whether 
 such failure results from his own act or the act of those to whom 
 
 rier. Toward the one the liability of expelled from the platform of a car by 
 the carrier springs from a contract, ex- the defendants' servants was held en- 
 press or implied, and upheld by an titled to recover damages for the same, 
 adequate consideration. Toward the So, where a person is rightfully ex- 
 other he is under no obligation but pelled, if excessive force is used, or an 
 that of justice and humanity. Hence improper place is selected.liability at- 
 a passenger who is injured by a ser taches. Hibbard «. R. Co., 15N. Y. 
 vant of the carrier may have a right 455 ; Hilliard v. Qoold, 3-1 N. 11. 2;50 ; 
 of action against him, when one not a Johnson v. Concord R. Co., 4G id. 213 ; 
 passenger, for a similar injury, would ISandford v. Eighth Av. R. Co., 23 N.Y. 
 not. 343 ; Terre Haute, etc., R. Co. v. Van- 
 In Meyer «. Second Av. R. Co., 8 atta, 21 111. 188; Stephen v. Smith, 29 
 Bos. (N. Y.) 305, affirmed 17 N. Y. Vt. IGO. 
 362, a passenger who was wrongfully 
 
 ' Goddard •«. Grand Trunk Railway Moore v. R. Co., 4 Gray (Mass.), 
 Co.. 57 Me. 202 ; 2 Am. Rep. 3!) ; Rail- 465. 
 road Qo. V. Finney, 10 Wis. 388 ;
 
 rcJ: 
 
 PltlVATE COKPOEATIONS. 
 
 he committed the diit}'.' In a Pennsylvania case" tliis question 
 was ably considered. In that case an action was brought for an 
 injury to the plaintiff's wife by the lighting of passengers among 
 themselves. It appeared that drunken and quarrelsome men 
 intruded themselves into the ladies' car in large numbers at one 
 of the stations, and a fight ensued, during which the plaintiff's 
 arm was broken. In passing upon the question of liability 
 of the railroad company therefor, Woodakd, C. J., said : 
 
 'In K. Co. V. Finney, 10 Wis. 388, 
 the plaintiff was unlawfully put out of 
 a car by the conductor. In Seymour 
 V. Greenwood, 7 H. & N. 355, a pas- 
 senger was assaulted and put out of 
 the defendant's omnibus by one of its 
 servants. In Moore v. Railroad Co., 4 
 Gray (Mass.), 465, the plaintiff, a pas- 
 senger, was forcibly expelled from the 
 defendants' train by the conductor, and 
 in all these cases the company was 
 held responsible. So, in Railroad v. 
 Vandiver, 42 Pa. St. 365, a passen- 
 ger received injuries, of which he 
 died, by being thrown from the plat- 
 form of a railroad car because he re- 
 fused to pay his fare or show his 
 ticket, he averring he had bought 
 one but could not find it. TLe evi- 
 dence showed he was partially intoxi- 
 cated. It was urged in defense that 
 if the passenger's death was the result 
 of force and violence, and not the re- 
 sult of negligence, then (such force and 
 violence being the act of the agents 
 alone without any command or order 
 of the company) the company was not 
 responsible therefor. But the court 
 held otherwise. " A railway com- 
 pany," said the court, " selects its own 
 agents at its own pleasure, and it is 
 bound to employ none except capable, 
 prudent and humane men. In the 
 present case the company and its 
 agents were all liabl» for the injury 
 done to the deceased." 
 
 In Weed v. Railroad, 17 N. Y. 362, 
 the jury found specially that the act 
 of the servant by whicli the plaintiff 
 was injured was willful. The court 
 held the willfulness of the act did 
 not defeat the plaintiffs right to 
 look to the railroad company for 
 redress. 
 
 In Railroad v. Derby, 14 How. 468, 
 where the servant of a railroad com- 
 
 pany took an engine and run it over 
 the road for his own gratification, not 
 only without consent, but contrary to 
 express orders, the supreme court of 
 the United States held that the railroad 
 company was responsible. 
 
 In Railway «. Hinds, 53 ta, St. 512, a 
 passenger's arm was broken in a fight 
 between, some drunken persons tliat 
 forced their way into tlie car at a station 
 near an agricultural fair, and the com- 
 pany was held responsible, because 
 the'conductor went on collecting fares, 
 and did not stop the train and expel 
 the rioters, or demonstrate, by au 
 earnest effort, that it was impossible 
 to do so. 
 
 In Flint v. Transportation Co., 34 
 Conn. 554, where the plaintiff was in- 
 jured by the discharge of a gun 
 dropped by some soldiers engaged in 
 a scuffle, the court held that passenger 
 carriers are bound to exercise the ut- 
 most vigilance and care to guard tliose 
 they transport from violence from 
 whatever source arising ; and the 
 plaintiff recovered a verdict for 
 $10,000. 
 
 In Landreaux v. Bel, 5 La. (0. S.) 
 434, the court say that carriers are re- 
 sponsible for the misconduct of their 
 servants toward passengers to the 
 same extent as for tlieir misconduct 
 in regard to merchandise committed 
 to their care; that no satisfactory 
 distinction can be drawn between the 
 two cases. 
 
 In Chamberlain v. Chandler, 3 
 Mason, 242, Judge Story declared, in 
 language strong and emphatic, that a " 
 passenger's contract entitles him to 
 respectful treatment ; and he expressed 
 the hope that every violation of thia 
 right would be visited, in the shapa 
 of damages, with its appropriata 
 punishment. 
 
 ' Pittsburgh & Fort Wayne R. Co. v. Hinds, 53 Pa. St. 503.
 
 Negligence and AVkongfcl Acts of Agents, etc. TG5 
 
 "There is no such privity between the conipaiiy and the dis- 
 orderly passenger as to make them liable on the principle of 
 respondeat superior. The only ground on which they can be 
 charged is a violation of the contract they made with the injured 
 party. They undertook to carry the plaintiff safely, and so neg- 
 ligently performed this contract that she was injured. This is 
 the ground of her action ; it can rest upon no other. The negli- 
 gence of the company or of their officers in charge of the train is 
 the gist of the action, and so it is laid in the declaration. And 
 this question of negligence was submitted to the jury in a manner 
 of which the company have no reason to complain. The only 
 question for us as a court of error, therefore, is whether the case 
 was, upon the whole, one that ought to have been submitted. 
 The manner of the submission having been unexceptionable, 
 was there error in the fact of submission ? 
 
 " The learned judge reduced the case to three propositions. lie 
 said the plaintiff claims to recover, 
 
 " 1st. Because the evidence shows that the conductor did not do 
 his duty at Beaver station, by allowing improper persons to get 
 on the cars. 
 
 " 2d. Because he allowed more persons than was proper under 
 the circumstances to get on the train, and to remain upon it. 
 
 " 3d. That he did not do what he could and ought to have done 
 to put a stop to the fighting upon the train which resulted in the 
 plaintiffs injury. 
 
 " As to the first of the above propositions, the judge referred the 
 evidence to the jury especially with a view to the question whether 
 the disorderly character of the men at Beaver station had fallen 
 under the conductor's observation so as to induce a reasonable 
 man to apprehend danger to the safety of the passengers. 
 
 "The evidence on this point was conflicting, but it must be 
 assumed that the verdict has established the conclusion that the 
 
 la Nleto V. Clark, 1 Cliflnrd, 145, ness and everv wanton interference 
 
 where the steward of the ship with their persons from all those in 
 
 assaulted and grossly insulted a charge of the ship ; tliat the conduct 
 
 female passenger, ,Judge Cmfford of the steward disqualified him for 
 
 declares, in language equally em- his situation, and justified the master 
 
 phatic, that the contract of all pas- in immediately discharging him, ul- 
 
 sengers entitles them to respectful though the vessel was then in a foreigt 
 
 treatment and protection against rude- port. Railroad v. Blocher, 27 ^Id. 277
 
 766 PlilVATE CORPOKATIONS. 
 
 conductor knew that drunken men were getting into tlie cars. 
 Let it be granted also as a conclusion of law that a conductor ia 
 culpably negligent who admits drunken and quarrelsome men 
 into a passenger car. What then ? 
 
 " The case shows that an agricultural fair was in progress in 
 the vicinity of Beaver station ; that an excited crowd assembled 
 at the station rushed upon the cars in such numbers as to defy the 
 resisting power at the disposal of the conductor, and that the 
 man who commenced the fight sprung upon the platform of the 
 hindmost car after they were in motion. 
 
 " Of what consequence, then, was the fact that the conductor 
 knew these were improper passengers ? It is not the case of a 
 voluntary reception of such passengers. If it were, there w'ould 
 be great force in the point, for more improper conduct could 
 scarcely be imagined in the conductor of a train than voluntarily 
 to .receive and introduce among quiet passengers, and particularly 
 ladies, a mob of drunken rowdies. But the case is that of a mob 
 rushing with such violence and in such numbers, upon the cars, 
 as to overwhelm the conductor as well as the passengers. 
 
 " It is not the duty of railroad companies to furnish their trains 
 with a police force adequate to such emergencies. They are 
 bound to furnish men enough for the ordinary demands of trans- 
 portation, but they are not bound to anticipate or provide for 
 such an unusual occurrence as that under consideration. 
 
 " When passengers purchase their tickets and take their seats 
 they kuQw that the train is furnished with the proper hands for the 
 conduct of the train, but not with a police force sufficient to quell 
 mobs by the wayside. No such element enters into the implied 
 contract. It is one of the incidental risks which all who travel 
 must take upon themselves, and it is not reasonable that a passen- 
 ger should throw it upon the transporter. 
 
 " These observations are equally applicable to the second prop- 
 osition. The conductor did not ' allow ' improper numbers, any 
 more than improper characters, to get upon the cars. He says 
 he took no fare from them, and in no manner recognized them as 
 passengers. To allow undue numbers to enter a car is a great 
 wrong, almost as great as knowingly to introduce persons of im- 
 proper character, and, in a suitable case, we would not hesitate to
 
 Negligence and Wrongful Acts of Agents, eic. 707 
 
 cliastise the practice severely. But this is not a case in which the 
 conductor had any volition whatever in respect either to ninu- 
 bers or characters. He was simply overmastered ; and the only 
 ground upon which the plaintiil; could charge negligence upon 
 the company would be in not furnishing the conductor with a 
 counter force sufficient to repel the intruders. This was not the 
 ground assumed by the plaintiff, and it would scarcely have been 
 maintainable had it been assumed. Taking the case as it is pre- 
 sented in the evidence, we think it was error for the court to sub- 
 mit the cause to the jury on these two grounds. But upon the 
 third ground we think the cause was properly submitted. If the 
 conductor did not do all he could to stop the fighting , there was 
 negligence. Whilst a conductor is not provided with a force suffi- 
 cient to resist such a raid as was made upon the train in this in- 
 stance, he has, nevertheless, large powers at his disposal, and, if , 
 properly used, they are generally sufficient to preserve order 
 within the cars, and to expel disturbers of the peace. His offi- 
 cial character and position are a power. Then he may stop the 
 train and call to his assistance the engineer, the firemen, all the 
 brakemen, and such passengers as are willing to lend a helping 
 hand, and it must be a very formidable mob, indeed, more formid- 
 able than we have reason to believe had obtruded into these cars, 
 that can resist such a force. Until at least he has put forth the 
 forces at his disposal, no conductor has a right to abandon the 
 scene of conflict. To keep his train in motion and busy himself 
 wath collectiu": fares in forward cars whilst a general fij^ht was 
 raging in the rearmost car wdiere the lady passengers had been 
 placed, was to fall far short of his duty. Nor did his exhortation 
 to the passengers to throw the fighters out come up to the 
 demands of the hour, lie should have led the way, and no doubt 
 passengers and hands would have followed his lead. He should 
 have stopped the train and hewed a passage through the intrusive 
 mass until he had expelled the rioters, or have demonstrated, by 
 an earnest experiment, that the undertaking was impossible." 
 
 Sec. 503. Liability for willful wrongs of agents. — In a Maine 
 case,' the liability of a railway company for an injury inflicted 
 
 • Goddard v. Grand Trunk, etc , R. Co., 57 Me. 203.
 
 7G8 Private Cokpokations. 
 
 upon a passenger by one of its servants was discussed. In 
 that case it appeared that the plaintiff was a passenger in the de- 
 fendant's train, and that, on request, he surrendered his ticket to 
 a brakeman employed on tlie train, wlio, in the absence of the con- 
 ductor, was authorized to demand and receive it; that the brake- 
 man afterward approached the plaintiff, and, in language coarse, 
 profane and grossly insulting, denied that he had either sur- 
 rendered or shown him his ticket ; that the brakeman called 
 the plaintiff a liar, charged him with attempting to avoid the pay- 
 ment of his fare, and with having done the same thing before, 
 and threatened to split his head open and spill his brains right 
 there. on the spot ; that the brakeman stepped forward and placed 
 his foot upon the seat on which the plaintiff was sitting, and, 
 leaning over the plaintiff', brought his list close down to his face, and, 
 shaking it violently, told him not to yijp^ if he did, he would spot 
 him ; that he w^as a damned liar ; that he never handed him his 
 ticket ; that he did not believe he paid his fare either way ; that 
 this assault was continued some fifteen or twenty minutes, and 
 until the whistle sounded for the next station ; that there were 
 several passengers present in the car, some of whom were ladies, 
 and that they were all strangers to the plaintiff ; that the plaintiff 
 was at the time in feeble health, and had been for some time un- 
 der the care of a physician, and at the time of the assault was 
 reclining languidly in his seat ; that he had neither said nor done 
 any thing to provoke the assault ; that, in fact, he had paid his 
 fare, had received a ticket, and had surrendered it to this very 
 brakeman who delivered it to the conductor only a few minutes 
 before, by whom it was afterward produced and identified ; that 
 the defendants were inmiediately notified of the misconduct of the 
 brakeman, but, instead of discharging him, retained him in his 
 place ; that the brakeman was still in the defendants' employ when 
 the case was tried and was present in court during the trial, but 
 was not called as a witness, and no attempt was made to justify or 
 excuse his conduct. Upon this evidence the defendants contended 
 that they were not liable, because the brakeman's assault upon the 
 plaintiff was willful and malicious, and was not directly nor im- 
 pliedly authorized by them ; that " the master is not respcnsi-
 
 Negligence and Wrongful Acts of Agents, etc. 769 
 
 ble as a trespasser, unless, by direct or implied authority to the 
 servant, he consents to the unhiwful act," 
 
 " The falhicy of this argument, when applied to the common 
 carrier of passengers," said Walton, J., "consists in not discrim- 
 inating between the obligation which he is under to his passenger, 
 and the duty which he owes a stranger. It may be true that if 
 the carrier's servant willfully and maliciously assaults a stranger, 
 the master will not be liable ; but the law is otherwise when he 
 assaults one of his master's passengers. The carrier's obligation 
 is to carry his passenger safely and properly, and to treat him 
 respectfully, and if he intrusts the performance of this duty to 
 his servants, the law holds him responsible for the maimer in which 
 they execute the trust. The law seems to be now well settled 
 that the carrier is obliged to protect his passenger from violence 
 and insult, from whatever source arising. He is not regarded as 
 an insurer of his passenger's safety against every possible source 
 of danger ; but he is bound to use all such reasonable precautions 
 as human judgment and foresight are capable of to make his 
 passenger's journey safe and comfortable. He must not only 
 protect his passenger against the violence and insults of strangers 
 and co-passengers, but, a fortiori, against the violence and insult 
 of his own servants. If this duty to the passenger is not per- 
 formed, if this protection is not furnished, but, on the contrary, 
 the passenger is assaulted and insulted, through the negligence or 
 the willful misconduct of the carrier's servant, the carrier is neces- 
 sarily responsible. 
 
 " And it seems to us it would be cause of profound regret if the 
 law were otherwise. The carrier selects his own servants and can 
 discharge them when he pleases, and it is but reasonable that he 
 should be responsible for the manner in which they execute their 
 trust. To their care and fidelity are intrusted the lives and limbs 
 and comfort and convenience of the whole traveling public, and it 
 is certainly as important that these servants should be trustworthy 
 as it is that they should be competent. It is not sufficient that 
 they are capable of doing well, if in fact they choose to do ill ; 
 that they can be as polite as a Chesterfield, if, in their intercoui-se 
 with the passengers, they choose to be coarse, brutal and profana 
 The best security the • traveler can have that these servants will 
 
 97
 
 770 Peivate Cokpokations. 
 
 be selected with care is to hold those by whom the selection is made 
 responsible for their conduct." 
 
 Still further on in the course of his opinion, he summarizes 
 the rule of liability thus : " The law requires the common 
 carrier of passengers to exercise the highest degree of care that 
 human judgment and foresight are capable of, to make his pas- 
 senger's journey safe. Whoever engages in the business impliedly 
 promises that his passengers shall have this degree of care. In 
 other words, the carrier is conclusively presumed, we say con- 
 clusively presumed, for the law will not allow the carrier, by notice 
 or special contract even, to deprive his passenger of this degree 
 of care. If the passenger does not have such care, but on the 
 contrary is unlawfully assaulted and insulted by one of the very 
 persons to whom his conveyance is intrusted, the carrier's implied 
 promise is broken, and his legal duty is left unperformed, and he 
 is necessarily responsible to the passenger for the damages he 
 thereby sustains. The passenger's remedy may be either in 
 assumpsit or tort, at his election. In the one case, he relies upon 
 a breach of the carrier's common-law duty in support of his 
 action ; in the other, upon a breach of his implied promise. 
 The form of the action is important only upon the question of 
 damages. In actions of assumpsit, the damages are generally 
 limited to compensation. In actions of tort, the jury are 
 allowed greater latitude, and, in proper cases, may give exem- 
 plary damages." 
 
 The liability of a carrier of passengers for insults inflicted upon 
 its passengers was ably discussed in a Wisconsin case.' 
 
 In that case the plaintiff, a young lady, was a passenger upon 
 the defendants' road, and, for a portion of the way, -was the only 
 passenger in the car, and while so pursuing her journey the con- 
 ductor of the train, without her consent, forcibly kissed her. In 
 an action against the railroad company, to recover for the injury, a 
 verdict for $1,000 was rendered in her favor, which was sustained 
 upon appeal. Ryan, C. J., remarking upon the question ^vhether 
 the master is generally liable for the willful or wanton acts of his 
 servant, said : " However that may be in general, there can be no 
 doubt of it in those employments in which the agent performs a 
 
 ? Craker v. The Chicago & N. W. R. Co., 36 Wis. 657 ; 17 Am. Rep. 504
 
 Negligence and Wrongful Acts of Agents, etc. 771 
 
 duty of the principal to third persons, as between such third per- 
 sons and the principal. Because the principal is responsible for the 
 duty, and if he delegates it to an agent, and the agent fails to per- 
 form it, it is inunaterial whether the failure be accidental or will- 
 ful, in the negligence or in the malice of the agent. It would 
 be cheap and superficial morality to allow one owing a duty to 
 another to commit the performance to a third person, without 
 responsibility for the malicious conduct of the substitute in the 
 performance of the duty. If one owe bread to another, and 
 appoints an agent to furnish it, and the agent, of malice, furnishes 
 a stone, instead, the principal is responsible for the stone and its 
 consequences." 
 
 " If," says Mr. Wood (Law of Master and Servant, p. 648 et 
 seq.), " a carrier of goods for hire should commit the carriage of the 
 goods to a servant, and the servant should steal them, or wantonly 
 destroy them, or, through his negligence, injure, or suffer them 
 to be injured, there is no question but that the master would be 
 liable therefor,' and it would be a singular rule, and an absurd 
 one, that did not hold the carriers of passengers, intrusted not 
 only with their comfort, but the safety of their persons, and their 
 lives, during the journey, to as strict performance of this duty as 
 of the other, and it will be seen by an examination of the cases 
 that they are. They are bound to look out for the comfort of 
 their passengers, and, as far as possible, save them from annoy- 
 ance." This rule has been held to extend to cover an implied 
 stipulation that such carriers are bound to protect passengers 
 against " obscene conduct, lascivious behavior, and every 
 immodest and libidinous approach,' and this has been held to 
 amount to a contract duty. In the language of Story, J. : * 'It 
 is a stipulation not for toleration, but for respectful treatment, 
 for that decency of demeanor which constitutes the charm of 
 social life, for that attention which mitigates evil without 
 reluctance, and tliat promptitude which administers aid to 
 distress. In respect to females, it proceeds yet further; it 
 includes an implied stipulation against general obscenity, that 
 
 ' Alden v. Pearson, 3 Gray (Mass.), ' Day v. Owen, 5 Mich. 520. 
 
 342 ; Klauber v. Am. Ex. Co.. 21 Wis. » Nieto v. Clark. 1 Cliff. (U. S.) 145 
 
 21 ; Am. Ex. Co. v. Sands, 55 Pa. St. '' Chamberlain v. Chandler, 3 Mas 
 
 140. (U.S.) 343.
 
 772 Pkivate Corporations. 
 
 immodesty of approach that borders on lasciviousness, and that 
 wanton disregard of the feelings which aggravates every evil.' 
 In commenting upon the rights and duties of carriers of passen- 
 gers, Shaw, C. J.,' said: ' An owner of a steamboat or railroad 
 is in a condition somewhat similar to that of an innkeeper, whose 
 premises are open to all guests, yet he is not only empowered, 
 hut he is hound so to regulate his house, as well with regard to 
 the peace and comfort of his guests, who there seek repose, as to 
 the peace and quiet of the vicinity, as to repress and prohibit all 
 disorderly conduct therein ; and, of course, he has a right, and is 
 bound to exclude from his premises all disorderly persons not 
 conforming to the regulations necessary and proper to secure such 
 quiet and good order." ' 
 
 From these brief extracts from the opinions of eminent jurists, as 
 well as from an examination of the cases referred to in the notes to 
 this section, it/ will be seen that, in all cases where the master owes 
 a duty to third persons, or the public, he cannot shirk or evade it 
 by committing its performance to another, but is bound absolutely 
 to perform the duty, and is liable for a failure so to do, in any re- 
 spect, whereby injury results to others, whether such failure results 
 from the negligence or from the willful, wanton, or criminal 
 conduct of the agent to whom the duty is committed.' This 
 rule was well illustrated in the case referred to in the last note. 
 In that case the plaintiff, with his wife, took passage on the 
 defendants' train, and, through the willful conduct of their 
 conductor and servant, the train was detained over night in an 
 unhealthy locality, and the passengers were thereby exposed to 
 great dangers and hardships. The plaintiff's wife, in consequence 
 of such exposure and hardships, was taken ill during the night 
 and suffered greatly. In an action to recover for the injury, the 
 defendants were held liable, notwithstanding the injury arose 
 from the willful act of the conductor, the court very properly 
 holding that the defendants were bound to discharge their con- 
 tract with the plaintiff absolutely, and could not defend upon 
 the ground that they had committed its performance to an 
 
 iCom. V. Power, 7 Mete. (Mass.) 601. » Weed v. Panama R. Co., 17 N. Y 
 ^ See, also, Markham v. Brown, 8 N. 363. 
 H.533.
 
 l^EGLIGENCE AND WRONGFUL AcTS OF AgENTS, ETC. 773 
 
 agent, who had wantonly disregarded the duty. In reference 
 to the application of this rule, so far as railroad companies and 
 carriers of passengers are concerned, it may be said that they are 
 not only bound to protect their passengers against injury and 
 unlawful assault by third persons riding upon tlie same convey- 
 ance, so far as due care can secure that result, but they are bound 
 absolutely to see to it that no unlawful assault or injury is inflicted 
 upon them by their own servants, in the one case their liability 
 depends upon the question of negligence, whether they improp- 
 erly admitted the passenger inflicting the injury upon the train,' 
 while in the other, the simple question is, whether the act was 
 unlawful, and the question of negligence is not an element of 
 liability.^ In a Massachusetts case' the plaintiff was a passenger 
 upon the defendant's steamboat from Boston to Gardiner, Maine, 
 and while upon the trip he was unlawfully assaulted by the 
 steward of the boat and some of the table waiters. In an action 
 to recover for the injuries, the plaintiff had a verdict for $8,000 
 which was upheld on appeal, Chapman, J., remarking : " As a 
 general rule, the master is liable for what his servant does in the 
 course of his employment ; but, in regard to matters wholly dis- 
 connected from the service to be rendered, the master is under 
 no responsibility for what the servant does or neglects to do. 
 The reason is that, in respect to such matters, he is not a ser^ 
 vant.* If, therefore, any of the oflficers or men, connected with 
 the running of the defendants' boat, had met the plaintiff in the 
 street or elsewhere, in a position wholly discoTinected with their 
 duties to the defendants, and committed an assault and battery 
 upon him, it is clear that the defendants would not have been 
 liable. 
 
 " There are two views which may be taken in the present case. 
 One is the view which was taken by the court in Philadelphia 
 and Reading Railroad Co. v. Derby." The plaintiff in that 
 action was riding gratuitously, and the court held that the 
 company were liable to him, not on the ground of a contract 
 
 ' R. Co. V. Hinds. 53 Pa. St. 512; 'Bryant «. Rich, 106 Mass. 180; 8 
 
 Stephen v. Smith, 2!) Vt. 160. Am. Rep. 311. 
 
 5 Goddard v. Grand Trunk Railway, "'Aldrich v.The Boston & Worcestei 
 
 ante ; Sherley y. Billings, a/i^e / Bryant R. Co. , 100 Mass. 31. 
 
 V. Rich, ante. » 14 How. 468.
 
 774 Private Cokpobations. 
 
 between the parties, but because he was injured by their care- 
 lessness when he was where he had a lawful right to be. But 
 as the plaintiff in this case was a passenger for hire, we think it 
 better to consider what the contract was between them. This 
 has been discussed in the following eases. ' It has also been 
 thoroughly discussed in Goddard v. Grand Trunk Railway^ 
 These cases were cited by Clittobd, J., in Pendleton v. Kins- 
 ley^ Rhode Island Circuit, June, 1870, not yet reported, and 
 the terms of the contract for carriage by water are well 
 stated by him in conformity with the authorities, as follows: 
 'Passengers do not contract merely for ship-room and trans- 
 portation from one place to another, but they also contract 
 for good treatment, and against personal rudeness and every 
 wanton interference with their persons, either by the carrier 
 or his agents employed in the management of the ship or 
 other conveyance. " In respect to such treatment of passen- 
 gers, not merely the officers, but the crew, are the agents of 
 the carriers.' In Chamberlain v. Chandler^ cited above, Stoey, 
 J., says : ' That kindness and decency of demeanor is a duty 
 not limited to the oiHcers, but extends to the crew.' 
 
 "The interpretation of the contract of the carrier, which is given 
 in the cases above cited, is not unreasonable. It is not more 
 extensive than the necessities of passengers require. Nor is it 
 difficult to perform. The cases in which it is violated by ser- 
 vants, even of the lowest grade, on board a ship or engaged in the 
 management of a railroad train, and the carrier rather than the 
 passenger ought to take the risk of such exceptional cases, the 
 passenger being necessarily placed so much within the power of 
 the servants. 
 
 "In this case, the servants who committed the wrong, being the 
 steward and table waiters, were those who were engaged in pro- 
 viding meals, waiting on the tables and collecting the pay for 
 meals. They were treating the plaintiff's relative with gross 
 
 'Chamberlain b. Chandler, 3 Mas. yard and Nantucket Steamboat Co., 97 
 
 242 ; Nieto ri. Clark, 1 Cliff. 145 ; Bal- Mass. 361, and 100 id. 34; Milwaukee 
 
 timore & Ohio R. Co. ■». Blocker, 27 & Mississippi R. Co. v. Finney, 10 
 
 Md. 277; Pittsburgh, Fort Wayne & Wis. 388. 
 
 Chicago R. Co. v. Hinds, 53 Pa. St. ^ Bupra, 57 Me. 202 ; 2 Am. Rep. 39. 
 
 512 ; Simmons «. New Bedford, Vine- ' 3 Mason, 242.
 
 Negligence and Wrongful Acts of Agents, etc. 775 
 
 rudeness in connection with this business, and the plaintiff 
 interfered only by a remark that was proper, whereupon the 
 assault was committed. It was not as if a quarrel had occurred 
 on shore and disconnected with the duties of persons on ship- 
 board. It vioLated the contract of the defendants, as to how 
 the plaintiff should be treated by their servants, who were 
 employed on board the ship and during the passage. For a 
 violation of such a contract either by force or negligence, the 
 plaintiff may bring an action of tort, or an action of con- 
 tract." 
 
 Sec. 504 . Liability of railroad corporations for delay in running trains. 
 — A railroad company is held chargeable with damages for delay 
 in the running of its trains according to schedule time, and any 
 person sustaining damage from a failure on its part to run its trains 
 u2)on such time is entitled to recover the same.' By issuing its 
 
 ' Sears v. Eastern R. Co., 14 Allen 
 (Mass.), 433. 
 
 In England the same doctrine is 
 held ; thus in Buckraaster^. The Great 
 Eastern Railway Co., 23 Law J. Rep. 
 (N. S.) Exch. 471, an action was brought 
 for damages sustained by the plaintiff 
 by reason of the company not starting 
 a train as advertised in their time bills, 
 and in which the plaintiff obtained a 
 verdict, Baron Martin said : " That it 
 was mere nonsense for companies to 
 say, as, in effect, the company in that 
 case had said, ' We will be guilty of 
 any negligence we think fit, and we 
 will not be responsible ; ' " and with 
 respect to the notice in this case the 
 learned judge of the Marylebone 
 county court thus concludes : " I am 
 of opinion that it is ultra vires so far 
 as it professes to attach to the right of 
 traveling on their own line the con- 
 dition that the company will not be 
 responsible for any shortcomings of 
 their servants not amounlingto willful 
 misconduct, whatever that term may 
 mean." In this view as to the invalidity 
 of the stipulation in question I fully 
 concur. It seems to me to be a mon- 
 strous proposition that the railway 
 companies, who are bound by their 
 special Acts and the Railway Clauses 
 Consolidation Act, 1845, section tSO, to 
 carry passengers at rates fixed within 
 certain limits, should be able to affix 
 
 to their contracts with the passengers 
 a stipulation which, if valid, would 
 deprive the passengers of their com- 
 mon-law right to the performance 
 with due diligence of the company's 
 contract with them. Tiiere is one 
 other remark I would wish to add, 
 viz., that the restrictions as to the 
 company's liability for not correspond- 
 ing with other trains contained in the 
 notice and regulation in question only 
 extends to cases where their trains fail 
 to correspond witli trains of other com- 
 panies and not with other trains of 
 their own, which is the present case. 
 Having stated my opinion as to the 
 liability of the company at common 
 law and of the invalidity of the above 
 notice and regulation so far as it 
 restricts such liability in the present 
 case, it still remains for me to consider 
 the last point raised by the defendants, 
 viz. : Whether, if the notice and regu- 
 lation were valid, and the plaintiff was 
 bound by it to show willful misconduct 
 on the part of the defendants' servants, 
 he has shown it in the present case ; in 
 other words, whether the absence of 
 the porters through their own fault, or 
 by the orders of superior servants of 
 the company, was, under all the circum- 
 stances of the present case, in point of 
 law. ' willful miscouduct,' and 1 think 
 with some doubt that it ougl. t to be 
 ao held, and on this point I wish to
 
 776 
 
 PkIVATE C0KPOEATION8. 
 
 time tables it is treated as contracting with its passengers that its 
 trains shall leave and arrive at its stations at the time named 
 therein, and failing to perform in this respect it is chargeable with 
 the damages that ensue in consequence thereof.' It may change its 
 schedule time, but, as to the holders of season tickets, it is bound 
 to give reasonable notice of such change, and a me:-e advertise- 
 ment of such change in public journals, or posting notice thereof 
 in its stations or cars, is held not sufficient to relieve it from 
 liability." 
 
 The company is liable even though the delay resulted from the 
 willful acts of its servants.^ The issue of a time table, indicating 
 the time of the arrival and departure of trains, is held to amount 
 to an express promise to run to the places and at the times named, 
 and nothing but accidents resulting from causes which reason- 
 able care could not have provided against, will excuse liability.* 
 
 refer once more to the judgment of the 
 learned judge of the Marylebone coun- 
 ty court in Turner v. The Great Wes- 
 tern Railway Company, and the author- 
 ities therein cited, as to the legal 
 interpretation of the words ' willful 
 misconduct.' The only case that lam 
 aware of that militates against my 
 view is that of Russell v. The Great 
 Western Railway Company, before the 
 learned judge of the Bath county 
 court — to whom I have already refer- 
 red — in which he held that the altered 
 notice or regulation was valid and 
 
 operative to restrict the defendants, 
 liability to cases of proved willful 
 misconduct on the part of their ser- 
 vants, but from what I have said it 
 will be seen that I cannot concur in 
 his view. Upon the whole, I am in 
 favor of the plaintiif on all the points 
 of law and facts involved in this case, 
 and a verdict will, therefore, be en- 
 tered for the plaintiff for the amount 
 claimed, with costs, and with liberty 
 to the defendants to appeal within one 
 month.' " 
 
 * Gordon v. Manchester, etc., R. Co., 
 52 N. H. 596. 
 
 " Sears «. Eastern R. Co., ante. 
 
 3 Weed v. Panama R. Co., 17 N. Y. 
 362. 
 
 ''Denton v. Great Northern R. Co., 5 
 El. & Bl. 860. 
 
 In Turners. Great Western Railway 
 Company, decided in the Marylebone 
 county court (England), in May, 1874, 
 Wheeler, J., said : " The question of 
 reasonable time is no longer left at 
 large, but is, in fact, fixed by the com- 
 panies themselves, subject, of course, 
 to accidents which reasonable care 
 could not provide against. In the 
 present case it is quite clear that the 
 absence of porters at the Reading sta- 
 tion, which reasonable care might (as 
 far as appears) have prevented, occa- 
 
 sioned the detention of the plaintiff at 
 Twyford, and as he was able to pro- 
 cure a conveyance by which he got to 
 Henley, substantially half an hour 
 sooner than the railway company were 
 prepared to convey him by the next 
 train, I think that he was justified in 
 hiring it, and that (subject to the next 
 question) he is entitled to recover its 
 cost against the defendants. The next 
 question which remains for me to con- 
 sider is, whether the notice and regu- 
 lation contained in the defendants' 
 tables deprive the plaintiff of his right 
 to recover against the defendants. 
 Now, this notice and regulation aa 
 altered came before the learned j u ige 
 of the Marylebone county court in the 
 case I have already referred to, and he 
 there commented upon it so fully and
 
 Negligence and Wrongful Acts of Ac!knt8, etc. 777 
 
 Sec. 505. Liability for negligence in constructing or repairing rail- 
 roads, and for nuisances. — A niilroad compHiiy is bouiul U> exerciftt; 
 ordinaiy care to prevent injury either to the person or property 
 
 so ably that I cannot do better than 
 quote his remarks. Referring to the 
 notice and regulation which cauie be- 
 fore him in Mr. Forsyth's case, he ob- 
 serves : ' The company's notice of 
 August commenced with tliese words, 
 ' Every attention will be paid to insure 
 punctuality as far us practicable.' This 
 really is all that the law requires. 
 ' But,' continued the notice, ' the di- 
 rectors do not undertake that the trains 
 shall arrive at the time specified in the 
 time table.' Here I may remark that, 
 irrespective of any notification by the 
 company, the law does not imply any 
 such undertaking, its requisitions be- 
 ing simply that there shall be no fail- 
 ure of punctuality for want of reason- 
 able care and diligence. The notice 
 then adds, ' Nor will the directors be 
 accountable for any loss, inconvenience 
 or injury which may arise from delay 
 or detention ; ' and subject to their 
 paying every reasonaljle attention 
 they have eypressly fixed on, which, 
 if not ao fixed, juries may determine. 
 Before the introduction of railways 
 there were frequently coach proprie- 
 tors who agreed to perform their 
 promises in so many hoars, and, there- 
 fore, to use every reasonable means 
 and diligence for that purpose ; and if, 
 by reason of their neglect of such 
 means or want of such diligence, they 
 failed to complete their contracts, 
 there can be no doubt that actions 
 must have lain against them. Of 
 course the condition of the roads, 
 which were not under their control, 
 and many other circumstances, and 
 especially sudden accidents, would 
 have been valid defenses to such ac- 
 tions; and, therefore, they were often 
 very difficult to try. Moreover, the 
 proprietors seldom, if ever, entered in- 
 to these special contracts as to time 
 excepting when there was great com- 
 petition, and then they used their best 
 endeavors, as did also their servants 
 (who were often stimulated by a sys- 
 tem of premiums or fines), to perform 
 these contracts vpith the greatest ex- 
 actitude. Actions for the breach of 
 Buch contracts were consequently very 
 are, and I have not been able to find 
 
 98 
 
 a report of any case of the kind. In 
 most cases, liowever, the coach pro- 
 prietors merely contracted to convey 
 would not be accountable for the con- 
 sequences of any delay or detention. 
 Since August the notice has been ma- 
 terially changed. The passage about 
 paying every attention to insure 
 punctuality is omitted, and the com- 
 pany expressly promise nothing ; but 
 the omission is immaterial, because 
 what they do not promise the law im- 
 plies against them. The next change 
 is the addition to the stipulation that 
 they will not be responsible for delay, 
 in the words, ' unless upon proof that 
 it arose from the willful misconduct 
 of their servants.' Upon the faith of 
 their present notice, the defendants 
 contend in effect that they are unfet- 
 tered as to times of starting and 
 arrival, notwithstanding their time 
 tables, in the absence of proof of will- 
 ful misconduct on the part of their 
 servants. To such a proposition it is 
 somewhat difficult to listen with pa- 
 tience.' " 
 
 See, also, Burke v. Great Western 
 Railway Co., London Law Jour, for Oc- 
 tober 24, 1874, in which the court con- 
 sidered the questions involved as to 
 the actual contract of the company and 
 their liability under it. The court 
 said : " I will consider, firstly, the con- 
 tention of the defendants that the con- 
 tract between them and the iiliiiutiff 
 was merely to convey him to Henley 
 in a reasonable time, and the contract 
 was not broken by a delay at Twyford, 
 inasmuch as there was another train 
 to Henley at the expiration of an hour 
 which would have conveyed him there 
 in a reasonable time. Now, 1 at once 
 concede that the contract between the 
 defendants and the plaintitl' was to 
 convey the latter to Henley in a reason- 
 able time. Such was the liability of 
 carriers of passengers at common law, 
 and railway companies have only the 
 same liabilities. This is expre.-^^ly de- 
 clared by section 89 of the Railway 
 Clauses Act, 1845 (which, I presume, is 
 incorporated in the Great Western 
 Railway Act ; at all events, so far aa 
 the Henley Branch l\ailway) ; but, in-
 
 778 Private Oobporations, 
 
 of any person. Deriving its authority to exercise its ftmctions 
 from the legislature, and its rights being in derogation of pri- 
 vate rights, it is bound so to prosecute its business that in- 
 jury shall not result to others by reason of its own fault or 
 negligence. The same rigid degree of care required to be ex- 
 ercised toward its passengers is not called for, but it must con- 
 duct its business as a man of ordinary prudence would conduct 
 a similar business, and whether it has done so or not in a given 
 case is essentially one of fact for the jury,' and the question is to 
 be determined in view of the agencies employed, and the conse- 
 quences of their negligent use or management.' In the construc- 
 tion of its road it is liable for all injurious consequences that 
 ensue from a negligent or improper execution of the work. 
 Authority given for the construction of its road does not carry 
 with it authority to construct it in any manner it pleases, but 
 simply to construct it in such a manner as to do the least injury 
 to others. 
 
 Mr. AYood, in his treatise upon the Laws of Nuisances (p. 
 783), has very carefully treated this question, and lays down 
 what we conceive to be the true doctrine warranted by the cases. 
 He says : — 
 
 " The question as to how far legislative authority to do an act, 
 which otherwise would be a nuisance, operates to shield those to 
 
 dependeutly of that clause, I do not their contracts, I think that they are 
 think that railway companies would clearly liable in the same manner aa 
 be further liable than any other car- coach proprietors under similar cou- 
 riers of passengers at common law. tracts. Having the absolute control of 
 What, then, is the liability of carriers their lines, and their lines being less lia- 
 of passengers at common law ? Sim- ble to be affected by the weather than 
 ply to use all reasonable means to the roads, they have in these respects 
 convey passengers to their destina- much less difficulty in performing their 
 tions in the reasonable times which the express contracts than coach proprie- 
 passengers to a particular place desire, tois. On the other hand, they are open 
 without specifying any time, and were probably to more numerous and serious 
 only bound to perform their contract accidents as to their engines and carri- 
 within a reasonable time, which, as I ages than the coach proprietors were as 
 have already said, was for a jury to de- to their coaches and horses. But, hoxo- 
 termine, regard being had to all the ever this may be, the effect of weather 
 circumstances of the case. Railway on the lines and accidents of many 
 companies, on the other hand, have in- kinds will doubtless constitute valid de- 
 variably fixed their own times of ar- fenses to actions brought against them, 
 rival, and thereby fixed what are as they did against actions brought 
 reasonable times, and if they fail, against coach proprietors under sim- 
 from want of due diligence, to perform ilar circumstances.''' 
 
 » Davis V. R. R. Co., ante. 2 phila.. etc., R. R. Co. «. Derby, ante.
 
 Negligence and "Wrongful Acts of Agents, etc. 779 
 
 whom the aiitliority is given, from liability for damages sustained 
 by others therefrom, is one of great importance, and one which 
 has often engaged the attention of courts, and which is now far 
 from being definitely settled. 
 
 "It may, however, be stated that a person or corporation author- 
 ized by law to do a particular thing, as to build a railroad,' a 
 turnpike," a bridge across a navigable stream,' or to carj-y on a 
 particular class of business, as for the manufacture of gas to sup- 
 ply the people of a town or city therewith,* so long as they keep 
 within the scope of the power granted, are completely protected 
 from indictment and punishment for a public nuisance, and from 
 proceedings either at law or in equity in behalf of the public 
 therefor,* But this is subject to this qualification, that the 
 nuisance arises as a natur^al and probable result of the act 
 authorized, so that it may fairly be said to be covered in Ugal 
 contemplation by the legislature conferring the power." If the 
 
 1 Rex v. Pease, 4 B. & A. 30; Rex v. 
 Morris, 1 id. 441. 
 
 ' State v. Williamstown Turnpike 
 Co., 4 Zabr. (N. J.) 247 ; State v. Clarks- 
 ville R. & T. Co., 2 Sneed. (Tenn.) 8^; 
 Com. V. Hancock Free Bridge, 2 Gray 
 (Mass.), 58 ; State v. Scott, 2 Swan. 
 (Tenn.) 332; Beckett v. Upton, 33 
 Eng. L. & Eq. 108. 
 
 ^ Jolly V. Terre Haute Drawbridge 
 Co., 6 McLean (U. S.), 237; Attorney- 
 General v. Hudson River R. Co., 1 
 Stark. (N. J.) 526; State v. Parrott, 71 
 N. C. 311. 
 
 ■» People V. Gas-light Co., 64 Barb. 
 (N. Y.) 55; Broadbent v. Imperial Gas 
 Co., 7 H. L. 605 ; Carbart v. Auburn 
 Gas-light Co., 22 Barb. (N. Y.) 294. 
 
 5 People V. Law, 34 Barb. (N. Y.) 
 294; People v. N. Y. Gas-light Co., 64 
 id. 55 ; Carhart v. Auburn Gas-light 
 Co., 22 id. 297; People v. Piatt, 17 
 Johns. (N. Y.) 195; Davis v. Mayor, 
 14 N. Y. 506 ; Com. v. Reed, 34 Pa. 
 St. 275 ; Harris v. Thompson, 9 Barb. 
 (N. Y.) 350 ; Rex v. Pease, 4 Brad. 30. 
 
 * In Attorney-General v. Bradford 
 Navigation Co., 6 B. & S. 631, the de- 
 fendants were authorized to construct 
 and maintain a canal, which tbey pro 
 ceeded to do in 1774. In 1802 they 
 erected a dam across a stream calle<l 
 Bradford Beck, and made a reservoir 
 of stone at the head of the canal, into 
 «hich the water was, and held in re- 
 
 serve to supply the canal when the 
 water therein was low. The water 
 thus turned into the canal was im- 
 pregnated with sewage, and by stand- 
 ing in the canal emitted noxious and 
 unwholesome odors to the nuisance of 
 tho.se living in the vicinity of the canal. 
 This action was brought to restrain 
 the company from turning into this 
 canal any further sewage or other 
 matter calculated to create a nuisance. 
 The defendants admitttd that the nui- 
 sance existed, but iut<isted that as they 
 had the right to use the water of 
 Bradford Beck for the purposes of 
 their canal, and that, as they did not 
 pollute the water of the stream or 
 impregnate it with sewage, they could 
 not be made answerable for the nui- 
 sance resulting from its use. It ap- 
 peared that when the canal was built, 
 and down to within three or four 
 years before the commencement of 
 the action, the water of Bradford Beck 
 had been pure, and that the impurity 
 arose from leading into the 13tck the 
 sewage from the town of Bradford, 
 which, within a few years, had largely 
 increased in population, so that, al- 
 though the water was impure, no de- 
 posit of an offensive kind took place. 
 The water in the canal was stagnant, 
 and there was no current or flow of 
 water, and the sewage was deposited 
 in the canal, so that when bouts passed
 
 T80 
 
 Pkivate Cokpokations. 
 
 nuisance is not the necessary result of the act or worh authorized^ 
 or if it might he exercised in such a way as to obviate the nui- 
 sance^ legislative authority will not he inferred from the grant to 
 create the nuisance^ and will not operate as a ^protection or excuse 
 therefor either against an indictment or a suit in hehalf of the 
 ■puMic at law or in equity to abate the miisance. ' Hence it is 
 only when the nuisance is a necessary and probable result of the 
 act done in pursuance of legislative authority that the grant 
 operates as a protection against indictment or suit therefor. Other- 
 wise it cannot be said to have been contemplated by the grant, 
 and, therefore, is not authorized by it." ^ 
 
 The rule seems to be, as stated by Mr. "Wood in the same 
 work (p. 784), that " if negligence can in any measure he pre- 
 dicated of their acts, they are liable for all the consequences re- 
 sulting therefrom.''^ And he proceeds to illustrate this proposition 
 thus : " Where a railroad company are authorized to make excava- 
 
 through it it emitted very offensive 
 smells aud gases. The court held that 
 although the company was authorized 
 by parliament to construct the canal, 
 and feed it with the water from Brad- 
 ford Beck, yet, as at that time the 
 water was clear and pure, it could not 
 be held as having been contemplated 
 
 ' Attorney-General -y. Metropolitan 
 Board of Work, 1 H. & M. 320 ; Clark 
 «. R. Co., 36 Mo. 203. in which it was 
 held that an action would not lie for 
 damages arising from the overflow 
 of laud, occasioned by the proper con- 
 struction of their roadbed. But this 
 applies to only inj uries sustained by one 
 whose land is taken and whose dam- 
 ages have been assessed. Attorney- 
 General V. Birmingham, 4 K. & J. 528 ; 
 Imperial Gas Co. v. Broadbent, 7 H. L. 
 Cas. 605 ; Stainton v. Woolrych, 23 
 Beav. 225 ; Hutton v. R. Co., 7 Ha. 
 259 ; R. Co. v. Archer, 6 Paige (N. Y.), 
 83 ; Sandford v. R. Co., 24 Pa. St. 378, 
 while companies acting under legisla- 
 tive power are the best judges of the 
 manner in which their works are to 
 be constructed, yet, if they are pro- 
 ceeding to execute them in such a 
 manner as to do unnecessary damage, 
 or inflict unnecessary injury, they are 
 liable therefor. London, etc., R. Co. 
 v. Canal Co., 1 Ra. Cas. 225 ; Coates v. 
 Clarence R. Co., 1 R. & M. 181 ; Rex 
 
 by parliament that the water would 
 become so impure as to make its use 
 in the canal a public nuisance, and the 
 use of the water was enjoined, as well 
 as a use of the canal in any way so aa 
 to create a public nuisance by reason 
 of noxious smells emitted from the 
 water used therein. 
 
 V. East and West India Docks R. Co., 3 
 Ra. Cas. 380. 
 
 ' See, also, Attorney-General v. Brad- 
 ford Navigation Co., 6 B. & S. 631; 
 People V. Gas-light Co., 64 Barb. (N. 
 Y.) 55. 
 
 In Clark v. Mayor of Syracuse, 13 
 Barb. (N.Y.) 32, the legislature declared 
 a stream navigable, and afterward au- 
 thorized the plaintiff to erect a dam 
 upon it. It was held by the court that 
 this authority only protected the plain- 
 tiff from the consequences of the nui- 
 sance to navigation, and was no pro- 
 tection for nuisances occasioned by the 
 dam in other respects. 
 
 In Richardson -y. Vermont Central 
 R. Co., 25 Vt. 465, it was held that 
 where the defendant in the erection of 
 its railroad made an excavation upon 
 its own land so near to the plaintiff's 
 land adjoining, that his land slid into 
 the excavation, the defendants were 
 liable for the injury, the court holding 
 that their charter gave them no author 
 ity to remove the plaintiff's soil.
 
 Negligence and Wkongful Acts of Agents, etc. 781 
 
 done for their road-bed, it is liuld that they nre hound to make 
 them with reasonable regard to the rights of adjoiinvig owners / 
 and if they attempt to perform the work without taking reason- 
 able precautions in that regard, a court of e<j[uity will restrain 
 them from proceeding until such reasonable precautions are taken.' 
 When the company can exercise its rights in a way that will not 
 he productive of injury to private rights, it is hound so to ex- 
 ercise it, and a court of equity will always interfere to prevent 
 their exercise in a vexatious or careless way." " 
 
 If there are two modes in ivhich the work can he done, one of 
 which would create a nuisance and the other not, they are hound 
 to choose the mode that would obviate the nuisance^ 
 
 ' Rickett -». Metropolitan Railway, 
 L. R., 2 H. L. 175. 
 
 ^ R. Co. ij. Canal Co., 1 Railway Cas. 
 225. 
 
 ^ In the Freehold General Invest- 
 ment Co. v. The Metropolitan R. Co., 
 Weekly Notes, 186G,p. 66, the defend- 
 ants in the construction of their road 
 were building tunnels under valuable 
 houses, and among the rest, under the 
 plaintiff's house. Upon a bill for an 
 injunction to restrain them from pro- 
 ceeding until they had provided proper 
 means for securing the house from 
 further injury — the walls having al- 
 ready begun to crack — the Vice Chan- 
 cellor in disposing of the question 
 said : " The legislature has given 
 power to the defendants to make their 
 works by means of a tunnel, close to 
 and through the midst of valuable 
 houses, and must have foreseen that 
 Bome damage would be done. * * * 
 But the company are not only bound 
 to make compensation for the dam- 
 age sustained, but are bound to prose- 
 cute the work skillfully, and, if there 
 are two ways of doing the work, to 
 choose the one that will do the least 
 injury." 
 
 In North Staffordshire R. Co. «. Dale, 
 8 E. & B. 836, it was held that a 
 railroad company, having carried a 
 highway over its road by a bridge, 
 was bound at all times not only to 
 keep the bridge in repair, but also all 
 approaches thereto. 
 
 In Hamdeu v. N, H. R. Co , 27 Conn. 
 158, it was held that a railroad com- 
 pany, altering a highway for the pur- 
 
 poses of its road, is bound to restore it 
 to its former condition, and that this 
 liability continues until it is so re- 
 etored, and, until that is done, that it 
 remains a continuing nuisance render- 
 ing it liable for all damages, either to 
 the town or individuals. 
 
 In Eegina ■». Train, 2 B. & S. 640, an 
 iron tramway laid in a highway so as 
 to cause the wheels of vehicles to skid 
 and to frighten horses, hitting their 
 feet on them, is a nuisance, and that 
 no degree of public benefit will op- 
 erate as a defense. 
 
 In Johnson v. Atlantic R. Co., 35 N. 
 H. 509, it was held that it is the duty 
 of a railroad company to construct 
 culverts and ditches sufficiently low to 
 carry off water set back upon lands by 
 the construction of its road, when this 
 can be done without difficulty. 
 
 In S^bin i\ Vermont Central R. Co., 
 25 Vt. 363, defendant held liable for 
 not removing stones thrown upon 
 laud in process of blasting for their 
 road-bed. 
 
 In Pittsburgh, etc., R. Co. v. Gielle- 
 land, 56 Pa. St. 445, it was held that a 
 culvert, so unskillfully constructed as 
 to be insufficient to carry off the water 
 of a stream in ordinary high water, 
 renders the company liable for all in- 
 juries resulting therefrom. Terre 
 Haute, etc., R. Co. v. McKinley, 
 33 Ind. 274; Taylor v. Grand Trunk 
 R. Co., 48 N. H. 304; Attorney-Ueu- 
 eral d. Metropolitan Board of Works, 
 1 H. & M. 320; and the quej^tiou 
 of proper execution of the works 
 is a question of fact. Ware v. Regents
 
 T82 
 
 Private Cokpoeations. 
 
 Sec. 506. Engines and machinery.— A railroad company, fronj 
 its grant to operate the road by steam, does not thereby acquii-e 
 authority to use engines thereon that are defective in construction 
 so as to scatter coals along the line of its road, endangering the 
 property of those through whose land it passes,* nor with smoke- 
 stacks so defectively constructed as to permit the free escape of 
 sparks from its engines, thus exposing property on the line of its 
 road to imminent danger from fire ; ^ but in this respect it is 
 bound to adopt the latest improvements in screens or spark pro- 
 tectors, and exercise the highest degree of care to prevent disas- 
 trous consequences ; ' and it is held by a very respectable class of 
 cases that the very fact, that a fire results from sparks emitted 
 from the engine, hj)rima facie evidence that the spark protector 
 
 Canal Co., .3 De Gex & Jones, 227 ; Coats 
 «. Clareuce E. Co., 1 R. & M. 181. 
 
 In Matthews v. West London Water 
 Works Co., 3 Camp. 402, the defend- 
 ants were authorized to make excava- 
 tions in the street to lay their water 
 pipes. In doing so they threw up 
 rubhish without properly guarding the 
 same, whereby a stage coach, which 
 the plaintiff was driving, was over- 
 turned and injured, and he, plaintiff, 
 severely injured. Lord Ellenbor- 
 OUGH held that the company was 
 clearly liable, even though the work 
 was done by a contractor. 
 
 In Waterman v. Conn. & Pass. River 
 R. Co., 30 Vt. 610, damages were 
 allowed for injuries from surface 
 water, through the unskillful manner 
 in which the road was constructed. 
 But see Henry -u.Vt. Central R. Co., 30 
 id. 638, where injury to land resulting 
 from change in the course of a river 
 by a railroad company in necessary 
 erection of their road, was held not 
 recoverable, though such erections 
 were unskillfully made. Robinson ». 
 
 ' King v. Morris and Essex R. Co., 
 18 N. J . Eq. 397 ; Cleavelands v. Grand 
 Trunk R. Co., 42 Vt. 449. 
 
 •^ Bedell v. L. L R. Co., 44 N. Y.367; 
 Gandy v. Chicago, etc., R. Co., 30 Iowa, 
 420 ; Kellogg v. Chicago, etc., R. Co., 26 
 Wis. 223 ; Case v. Northern Cent. R. 
 Co., 59 Barb. (N. Y.) 644; Rood 
 f}. N. Y. Cent. R. Co., 18 id. 80; 
 Jackson v. Chicago, etc., R. Co., 31 
 Iowa, 176 ; Kansas, etc.. R. Co. ■». Butts, 
 
 N. Y. & Erie R. Co., 27 Barb. (N. Y.) 
 512. 
 
 It must lay its track skillfully in a 
 public street, and is liable for injuries 
 resulting from unskillfulness in that 
 respect. Worster v. Fortv-second 
 Street R. Co., 50 N . Y. 203. 
 
 It must not let down the lands of an 
 adjoining owner, whether by skillful 
 or unskillful prosecution of its work. 
 Richardson v. Vt. Central R. Co., 25 
 Vt. 
 
 Authority to erect a bridge over a 
 navigable stream, if the navigation is 
 not impeded, does not authorize it 
 even temporarily to obstruct it while 
 erecting the bridge. Memphis «& Ohio 
 R. Co. «. Hicks, 5 Sneed (Tenn.), 427. 
 
 In Lawrence v. Great Northern R. 
 Co., 4 Eng. Law & Eq. 265, held liable 
 for not providing proper flood-gates 
 for escape of water, which by erection 
 of its road-bed were prevented from 
 spreading as former!}', even though 
 the act did not provide for their being 
 made. 
 
 7 Kans. 308 ; Spaulding v. Chicago, 
 etc., B. Co., 30 Wis. 110; 111., etc., R. 
 Co. V. McClelland, 42 111. 355; Huyett 
 v. Phila., etc., R. Co., 23 Pa. St. 373 ; 
 Fero V. Buffalo, etc., R. Co., 22 N, Y. 
 209. 
 
 ^ It must employ the best precau- 
 tions in use. Fraukford, etc.. Turn- 
 pike Co. V. Phila,, etc., R. Co., 54 Pa. 
 St. 345.
 
 Negligence ai^d Wrongful Acts of Agents, etc. 783 
 
 is defective and throws the burden upon the company of proving 
 the contrary.' 
 
 But there is considerable conflict upon this question, and in 
 several of the states it is held that negligence will not be inferred 
 from the mere fact that a fire is set f j-oni sparks.' And even 
 in those states where such a presumption is raised, it is held 
 that the presumption may be overcome by slight evidence of 
 diligence in this respect.' 
 
 Sec. 507. Application of the maxim, sic utere tuo ut alienum, non 
 leedas. — The time-honored maxim, sic utcre tuo lit alieniun, noti 
 Icedas, has the same application to railway companies and other 
 corporations that it has to individuals, qualified in some respects by 
 the grant of authority to It and extended in others because of the 
 dangerous agencies employed and the consequent disaster from 
 their negligent management. The application of this maxim can- 
 not, perhaps, be better illustrated than in the case of fires resulting 
 from the accumulation of dry grass and other combustibles in the 
 vicinity of railroads. Because the company employs fire as one of 
 the agencies of its business, and because by its employment the 
 property of all persons upon its line is placed in peril of being 
 destroyed by fire, it is held bound, at its peril, to exercise great 
 care to prevent such consequences. Thus, it has been held that, 
 if in dry times it permits the accumulation of grass and weeds 
 upon its roadway, and by reason of their ignition fire spreads to 
 adjoining premises, it ia liable for the injuries that ensue there- 
 from,* even though the plaintiif has permitted such vegetation to 
 accumulate or grow upon his own land, and that such vegetation 
 is a secondary cause of the damage done thereby. The owners of 
 land adjoining railways have a right to presume that the railway 
 company will discharge its duty, and it is not negligence ^^rse on 
 their part to assume that he is not exposed to dangers that can only 
 
 * Bedell v. L .1. R. Co., ante; St. Louis, ' Spaulding v. Chicago, etc. , R. Co., 
 etc., R. Co. V. Montgomery, 39 111. ante. 
 
 335 ; Case v. R. Co., ante; Spaulding^. ■• Webb v. Rome, Watertown, etc., 
 
 Chicago, etc., R. Co., 30 Wis. 110; R. Co., 49 N. Y. 420 ; Kellogg t'Chica- 
 
 Clemens^. Hannibal, etc., R. Co., 53 go, etc., R. Co., ff//<f; Bass r. Chicago 
 
 Mo. 366 ; Cleavelands v. Gd. Trunk R. etc., R. Co., 28 111. 9 ; Flynn v. Pan 
 
 Co., 42 Vt. 449. Francisco, etc., R. Co., 40 Cal. 14 • M. 
 
 * Indianapolis, etc.. R. Co. c. Para- Central R.Co. c. Nunn, 51 111. 78 ; Fiich 
 more, 31 Ind. 143 ; Gandy v. Chicago, v. Pacific R. Co., 45 Mo. 322. 
 
 etc., R. Co., 30 Iowa, 420.
 
 784 Private Coepoeations. 
 
 occur as a result of a neglect of duty on the part of the company.' 
 It is not, perhaps, proper to say that the com]3any is guilty of 
 negligence per se, to permit the accumulation of such vegetation 
 and combustible materials along its road, as some of the cases 
 would seem to hold, but it is evidence to go to the jury to estab- 
 lish negligence, and will sustain a verdict, if, from all the facts 
 and circumstances, they shall find it negligence in fact. " 
 
 So, too, in the use of fuel for its engines, the company is bound 
 to exercise due care, and employ that which is the least likely to 
 produce ill results ; ' and the question as to whether the employ- 
 ment of certain kinds of fuel is negligent, or whether it was 
 negligently used, is for the jury in view of the circum- 
 stances. ■* 
 
 Sec, 508. Contributory negligence. — The question, as to whether 
 the plaintiff has been guilty of such contributory negligence as 
 disentitles him to a recovery, is a question of fact for the jury in 
 view of all the circumstances, as in leaving stubble and dry grass 
 standing in his fields along the track of the railway,* and the 
 question is to be determined in view of the circumstances, the uses 
 to which the field is devoted, and as to what is usual and ordinary 
 under such circumstances.' It is held in some of the cases, that 
 the owner of adjoining lands, in dry times, is bound to plough 
 around them to guard against the destruction of his property by 
 fires originating from the company's negligence,' and that the 
 jury are to say which was the most negligent, the plaintiff" or de- 
 fendant,* but this doctrine is not believed to be predicated upon 
 principle or to be consistent with sound public policy. The idea 
 that a person devoting his property to its ordinary and usual pur- 
 poses, is bound to devote it to some other use, or to devote it to 
 
 ' Kellogg v. Chicago, etc., R. Co., 26 * Lackawanna, etc., R. Co. v. Doak, 
 
 Wis. 223; Webb v. Rome, etc., R. Co., 52 Pa. St. 379. 
 
 ante ; Flynn v. San Francisco, etc., R. * Flynn -o. San Francisco, etc., R 
 
 Co., ante; Fitch «. Pacific, etc., R. Co., Co., 40 Cal. 14; 111. Cent. R. Co. ■». 
 
 ante. Nunn, 51 111. 78. 
 
 ^ Webb •». Rome, etc., R. Co., ante; * Kellogg s. Chicago, etc., R. Co., 26. 
 
 111. Central R. Co. «. Nunn, ante; Wis. 223. 
 
 Fitch «. Pacific, etc., R. Co., ante; ' Keese v. Chicago, etc., R. Co., 30 
 
 Spaulding «. Chicago, etc., R. Co., Iowa, 78; 111., etc., R. Co. u. Nunn, 
 
 ante. 51 111. 78. 
 
 * Chicago, etc., R. Co. v. Quaintance, ^ 111., etc. , R. Co. ■». Nunn, ante. See 
 
 58 111. 390. ' also. Field on Dam., eh.
 
 Negligence and "Wrongful Acts of Agents, etc. 785 
 
 no use at all, because possibly by devoting it to its usual lawful 
 purposes, through the negligence of some other person owning 
 adjoining lands it may be injured, is imposing burdens upon inno- 
 cent parties, that the law is not accustomed to impose, and, not- 
 withstanding the fact that some courts have seen fit to hold a 
 different rule, there can be no question that that is the soundest 
 and most consistent doctrine, that permits adjoining owners to 
 presume that railroad companies will exercise due care in the 
 management of their business, and that negligence cannot be pre- 
 dicated against him because he relies upon such presumption.' 
 
 Sec. 509 . Consequential damages. — For merely consequential 
 damages, from constructing or maintaining their works, where 
 corporations are vested with the right of eminent domain, 
 and the injury is the natural and probable result thereof, 
 no liability exists,'' except so far as the charter or the statute 
 gives a remedy.' But if they are not invested with the 
 right of eminent domain they are liable for injuries result- 
 ing to others either from the erection of their works or the 
 prosecution of their business.* So, it has been held, that where 
 a corporation is authorized to erect factories and mills, the act 
 does not shield it from liability for injuries resulting from the 
 improper blasting of rocks in excavating to lay the foundation 
 of their buildings ; ^ nor where it is authorized to erect and 
 maintain dams, from the injuries resulting to upper owners from 
 the flooding of their lands.' So, a religious corporation, having 
 authority to erect and maintain a church, does not thereby acquire 
 the right to maintain unsafe buildings alongside a public street ; ' 
 and so, generally, in all cases, a corporation is liable for any act 
 done by it, or by its agents, within the scope of their authoritv, 
 precisely the same as an individual is, except so far as the act 
 is fairly covered by the grant of authority to it by the 
 legislature. 
 
 'Kellogg V. Chicago, etc., .R. Co., *Pottstown Gas Co. «. Murphy 39 
 
 ante. See, also, Field on Dam., § 604. Pa. St. 257. 
 
 « N. Y. & Erie R. Co. v. Young, 33 » jjay v. Cohoes Co., 2 N. Y. ICO. 
 
 Pa. St. 175. 6 Hooksett v. Amoskeag Man. Co., 44 
 
 * Monongahela Bridge Co. v. Kirk, N. H. 105. 
 
 46 Pa. St. 112. ' Church of the Ascension v. Buck 
 
 hart, 3 Hill (N. Y.),. 193. 
 
 99
 
 786 Private Corporations. 
 
 Sec, 510. Iiyury to persons and property by running of trains. — 
 A railroad company, irrespective of any statute, is bound to 
 exercise due care in the running of its trains, and, while it may- 
 run its trains at any rate of speed it deems necessary, either at 
 road-crossings or elsewhere, and at common law is not absolutely- 
 bound to ring the bell or blow the whistle of its engine, yet, if, 
 in consequence of a neglect on its part to take proper precautions 
 to signal its approach to a highway crossing, a person, in the 
 exercise of due care, himself, is injured, it is liable in damages 
 therefor. It is bound to do no specific act, hut 7nust, at its peril, 
 do every thing that ordinary prudence requires should be done by 
 it, to prevent injury to parties not in fault. Therefore, while, 
 as previously stated, by the common law there is no absolute duty 
 imposed upon it to signal its approach to a road crossing, yet, 
 if ordinary prudence required that it should do so, and because 
 of a failure to do that or som.e other equally effective act to indicate 
 the approach of its trains, a person in the exercise of due care 
 is injured, the jury may, from its failure in these respects, find 
 it guilty of negligence and it becomes liable for the conse- 
 quences.' 
 
 Even where the statute requires that it shall ring the bell or 
 blow the whistle of the engine within a certain distance of a road 
 crossing, a neglect to comply with such regulation is not of itself 
 suflicient to establish its liability for an injury inflicted at the cross- 
 ing,* nor, on the other hand, does a compliance with such statutory 
 requirement necessarily constitute the full measure of its duty in 
 a given case, and absolve it from liabihty. It is bound to exercise 
 due care, and if, under the circumstances, ordinary prudence re- 
 quired that it should take other precautions, it is bound to do 
 so.^ It must exercise due care, and as to what is due care, is a 
 question for the jury, in view of the circumstances, taking into 
 
 ' Penn. R. Co. «. Barnett, 59 Pa. St. Allyn v. Boston and Albany R. Co. 
 
 259. 105 Mass. 77; Chicago, etc., Co. v. 
 
 2 Butterfield «. Western R. Co., 10 McKean, 40 111. 218 ; Hanover R. Co. «. 
 
 Allen (Mass.), 532 ; Spencer i). 111. Cent. v. Coyle, 55 Pa. St. 396. 
 R. Co., 29 Iowa, 55 ; Toledo, etc., R. Co. » Richardson «. N.Y.Cent. R.Co., 45 N. 
 
 v. Goddard, 25 Ind. 185 ; North. Penn. Y. 846 ; O'Mara «. Hudson R. Co., 38 
 
 R. Co. w. Heilman,49 Pa. St. 60; Galena, id. 445 ; Dufly v. Chicago, etc., R. Co, 
 
 etc., R. Co. V. Dill, 22 111. 264 ; Warner 32 Wis. 269. 
 r. N. Y. Cent. R. Co., 44 N. Y. 465 :
 
 Negligence and Wkongful Acts of Agents, etc. 787 
 
 consideration the location of the crossing and its surroundings, 
 the situation of the track in reference to the highway, and all the 
 attendant circumstances.* Greater caution is required in tlie 
 streets and at crossings of cities and villages than in rural dis- 
 tricts,* and at crossings where the track is obstructed or hidden 
 from view of a person approaching it from the highway, than 
 where an approaching train can be seen.' 
 
 Because the legislature has conferred authority upon the com- 
 pany to build and operate its road across highways, it does not 
 thereby acquire the exclusive right to a free passage which makes 
 it incumbent upon travelers upon the liighway to keep off the 
 track at their peril, but its franchise is restricted by public neces- 
 sity and convenience and must be exercised with due regard 
 thereto,* and the rights of the company and of travelers are cor- 
 relative, and neither has a right superior to the other,* and both 
 must exercise due care in the exercise of their respective 
 rights. In order to entitle a person to recover he must show 
 due care on his own part, and a want of due care on the part 
 of the company.' The mere fact that the company was 
 negligent, that it omitted to give the signals required by 
 statute, or to take other proper precautions, will not entitle 
 the plaintiff to a recovery, if he was also guilty of negli- 
 gence contributing to the injury. The duty of being careful 
 rests upon hoth, the company and the traveler. The rule seems to 
 be well established that a traveler approaching a crossing is bound 
 to exercise ordinary care, such care as is fairly commensurate 
 with the nature of the risk. If he can see for a long distance up 
 and down the track he is hound to look to see whether a train 
 is approaching^ and if the track can only be seen for a short 
 distance, he is hound to look and listen, for an approaching 
 train, and where, hy the exercise of the senses of hearing 
 
 ' West -B. New Jersey, etc., R. Co., 32 T. C. 'R.Qo.,ante; Allyn «. Boston, 
 
 N. J. 91 ; Milwaukee, etc., R. Co. v. etc., R. Co., 105 Mass. 77; Brendell v. 
 
 Hunter, 11 Wis. 160. Buflalo, etc., R. Co., 27 N. Y. 5^4. 
 
 « Warner v. N. Y. C. R. Co., 4-4 N. Y. ^ Pittsburg, etc.. R. Co. v. Dunn, 58 
 
 465. Pa. St. 280; Toledo, etc., R. Co. v. God- 
 
 3 Mackay v. N. Y. C. R. Co., 35 N. Y. dard, 25 Ind. 185. 
 
 75 ; Duffy v. Chicago, etc., R. Co., 32 * Galena, etc., R. Co. v. Dill, ante. 
 
 Wis. 269 ; Chicago, etc. , R. Co. v. Trip- « Grippen c. N. Y. C. R. Co., 40 N. Y 
 
 lett, 38 111. 482 ; Milwaukee, etc.. R. 34. 
 Co. ■». Hunter, <tnte; Richardson v. N.
 
 788 Private Cokpoeations. 
 
 and seeing, he might have avoided the injury, no recovery 
 can be had. No person has a right to depend entirely upon 
 the care and prudence of others ; but is bound himself to 
 exercise due care, which must be measured by the nature ol the 
 risk and the consequences of inattention to his duty. If after hav- 
 ing exercised his senses, without hearing or seeing an approaching 
 train near the crossing, he is injured, by reason of the negligence 
 of the company to blow the whistle or ring the bell, or to sig- 
 nal its approach in some equally efficient manner, the com- 
 pany is responsible therefor.* Every person is bound to know 
 that a railroad crossing over a highway over which trains are 
 often running is a place of more than ordinary danger, and is 
 bound to exercise a degree of care commensurate therewith,* and 
 no presumption can be drawn in favor of the plaintiff, but he 
 must show due care on his part.^ But if negligence on the 
 defendant's part is established, the court will not presume that 
 the plaintiff was negligent, but will leave it for the jury to say 
 whether there is any evidence of his negligence.* He is bound 
 to look out for the crossing, and the fact that he did not see it, or 
 know that he was approaching it, will not excuse him.^ But if he 
 was a stranger in that section and did not know that there was a 
 crossing over the road, and the company neglected to signal its 
 approach, the rule would be otherwise,* as would also undoubtedly 
 
 » Artz V. Chi cago, etc., R. Co., 34 ton v. Erie R. Co., 45 N.Y. 660 ; Rothe 
 
 Iowa, 153; St. Louis, etc., R. Co. v. v. Milwaukee R. Co., 21 Wis. 256; 
 
 Manly, 58 111. 300; Dodge v. R. Co., Eaton v. Erie R. Co., 51 N.Y. 545; 
 
 34 Iowa, 279 ; McCall v. N. Y. C. R. Mentz v. Second Av. R. Co., 3 Abb. 
 
 Co.. 54 N. Y. 642 ; Haight «. N Y. C. App. Cas. (N. Y.) 274; Sweeney 
 
 R. Co., 7 Lans. (N. Y.) 11 ; Gonzales v. v. Old Colony R. Co., 10 Allen (Mass.), 
 
 N. Y. & Harlem R. Co., 38 N. Y. 440; 368; Morse v. Erie R. Co., 65 Barb. 
 
 Warner v. N. Y. C. R. Co., 44 N. Y. (N. Y.)491 ; Detroit v.V&n Steinburgh, 
 
 465; Spencer v. 111. Cent. R. Co., 29 17 Mich. 99; Beisiegel v. R.Cc, 40 N. 
 
 Iowa, 55 ; Wilcox v. Rome, etc., R. Co., Y. 9 ; Baxter v. T. & B. R. Co., 41 id. 
 
 89 N. Y. 358; W heelock v. Boston, 502. 
 
 etc., R. Co., 105 Mass. 203; Ernst «. « ^ Ce^t jj q^ ^ Baches, 55 III. 
 
 Hudson R. Co., 39 N. Y. 61 ; Illinois, 379. 
 
 etc., R. Co. V. Baches. 55 111. 379; To- » Warner v. N. Y. Cent. R. Co., 44 
 
 ledo, etc., fi. Co. v. Goddard, 25 Ind. N. Y. 146. 
 
 185 ; Allyn v. Boston & Albany R. Co., * Lehigh, etc., R. Co. v. Hall, ante. 
 105 Mass. 77; Lehigh, etc., R. Co. i). ^ Allyn v. Boston, etc., R. Co., 105 
 
 Hall, 61 Pa. St. 361 ; Mackey v. N. Y. Mass. 77; Butterfield v. Western, etc., 
 
 C. R. Co., 35 N. Y. 75 ; Cleveland, etc., R. Co., 10 Allen (Mass.), 532 ; Hanover 
 
 R. Co. V. Terry, 8 Ohio St. 570 ; Wilds R. Co. v. Covle, 55 Pa. St. 396. 
 V. N. Y. C. R. Co., 29 N. Y. 315 ; Cen- « Hanover R. Co. v. Coyle. ante; 
 
 tral R. Co. v. Dixon, 42 Ga. 327 ; Gor- Butterfield v. Western R. Co., ante
 
 Negligence and Wkongful Acts of Agents, etc. 789 
 
 be the case if the injury happened at night, or upon a very foggy 
 day, when, from the darkness or fog, the traveler was unable to see 
 the crossing.' If he exercises his senses the best he can, and can 
 neither see nor hear an approaching train, lie has a right to pre- 
 sume that none is approaching, because he has a right to presume 
 that the company would discharge its duty by giving the necessary 
 signals,' The traveler must use his eyes and ears as a prudent 
 man would do ; ' but if the company has built its track in such a 
 way, or has erected obstructions, or left cars standing in such a 
 manner as to prevent the traveler from seeing an approaching 
 train, he is excused from looking, because the law does not 
 require a person to do a useless act, and if he listens and does not 
 hear the train, he cannot be charged with contributory negli- 
 gence/ But if the proper signals are given, if he ventures upon 
 the track, although he miscalculated as to the chances of crossing, 
 the risk is his, unless negligence in some other respect is charge- 
 able to the company," as if the train is being run at a greatly 
 increased rate of speed." But if a view of the track can be had, 
 the mere fact that no signals of the approach of the train were 
 given will not excuse the traveler fi'om looking and listening.'' 
 If the company is required by statute or municipal ordinance to 
 keep a flagman at a crossing, or if it has usually done so, to warn 
 travelers of the approach of trains and when it was unsafe to pass, 
 its neglect to do so, or the giving of a false signal by the flagman 
 will rendea" it liable for injuries resulting, although the train is 
 approaching in plain sight.* If a person, in the exercise of due 
 care in attempting to cross a railway, through no fault of his gets 
 the wheels of his vehicle caught in the track so that he cannot 
 extricate them in season to avoid an injury, he is not precluded 
 
 1 Hackford v. N. Y. Cent. R. Co., 13 ^ Van Scbaick v. Hudson R. Co., 
 Abb. Pr. (N. S. N. Y.) 18. 43 N. Y. 527 ; Chicago, etc., R. Co. v. 
 
 ■ Tabor v. Missouri Valley R. Co., 46 Fears, 53 111. 115. 
 Mo. 353 ; Kennayde v. Pacific R. ^ Madison, etc., R. Co. v. TaflFe, 37 
 
 Co., 45 id. 255; Eagan v. Fitchburg Ind. 364; Ricbardson v. N. Y. Cent. R. 
 
 R. Co., 101 Mass. 315 ; James v. Great Co., 45 N. Y. 846. 
 
 Western R. Co., L. R.,2 C. P. 634 ;t.,- ''Gorton v. Erie R. Co., antej 
 
 Kennayde v. Pacific R. Co., 45 Mo. 255. Havens v. Erie R. Co., 41 N. Y. 296. 
 
 2 Nicholson v. Erie R. Co., 41 N. Y. « Newson v. N. Y. C. R. Co., 29 N.Y 
 525; Baxter v. T. & B. R. Co., 41 id. 383; Sweeny «. Old Colony R. Co.,lC 
 502 Allen (Mass. ), 368 ; Spencer v. 111. C«iit 
 
 •»McQuire v. H. R. Co., 2 Daly R. Co., 29 Iowa, 55. 
 (N. Y. C. P.), 76.
 
 790 Private Cobpoeations. 
 
 from a recovery, if by due care on the company's part the injury 
 could have been avoided/ and where the railway is carried across 
 the highway in such a manner that a person approaching can 
 neither see nor hear the train distinctly, until too late to avoid the 
 injury, the company is liable.'' The mere fact that a person sees 
 or hears an approaching train does not preclude him from an at- 
 tempt to cross if he had ample time to do so, except for the fact 
 that the train was being run at an unusual rate of speed. The 
 simple question is whether, hnowing the usual length of tune it 
 took the train to reach the crossing, as a jprudent man, he was 
 justified in making the attempt.' A person is not bound to stop 
 his team to look and listen,^ as is held in Pennsylvania,^ but is 
 merely bound to do that which is suggested by common prudence 
 in view of the peril to which he may be exposed. If he hears 
 the signal, but does not see the train and does not know the dis- 
 tance at which it is from the crossing, as a prudent man there 
 would seem to be no doubt that it would be his duty to wait until it 
 passed, and if he is induced to attempt to pass by reason of a false 
 signal given by a flagman, he cannot be charged with negligence ; , 
 nor can he be charged with negligence if he knows the distance 
 at which the law requires the signal to be given by the train 
 before it reaches the crossing, but is injured by reason of the 
 unusual speed at which the train is being driven, if, except for 
 that, he would have had ample time to pass, or if the signal was 
 not given as early as it should have been," unless the plaintiff 
 knew, or could have known by the exercise of due care, that the 
 train was being run at an unusual rate of speed.' The mere fact 
 that he confidently believed that he had ample time to cross,* or 
 that he might have done so except that his horse became fright- 
 ened does not excuse him. The question is whether he was in 
 
 ' Milwaukee R. Co. «. Hunter, 11 the plaintiff is not bound to prove 
 
 Wis. 160 ; Pittsburg, etc., R. Co. v. atRrmatively . that he stopped and 
 
 Dunn, 50 Pa. St. 280. looked and listened, but that the jury 
 
 ^Richardson v. N. Y. Cent. R. Co., may say from (ill the circumstances 
 
 45 N. Y. 846 ; Gillett w.Western R. Co., whether he exercised due care. Peun. 
 
 8 Allen (Mass.), 560. R. Co. v. Weber, 72 Pa. St. 27. 
 
 ^ Detroit, etc., R. Co. v. Van Stein- * Spencer v. 111. Cent. R. Co., 27 Iowa, 
 
 burg, 17 Mich. 99. 55 ; Havens v. Erie R. Co., afite; De- 
 
 ■» Davis ». N. Y. Cent. R. Co., 47 N. Y. troit, etc., R. Co. -y. Van Steinburg, 
 
 400 ; Duffy v. Chicago, etc. , R. Co., 33 ante. 
 
 Wis. 269. ' Langhoff v. Milwaukee, etc., R. Co., 
 
 * Lehigh Valley R. Co. v. Hall, 61 Pa. 23 Wis. 43. 
 
 St. 361 ; Pittsburg, etc., R. Co. v. Dunn, » Wilds v. Hudson R. Co., 29 N. Y. 
 
 56 id. 280. But it is now held that 315.
 
 Negligence and Wkongful Acts of Agents, etc. 791 
 
 tlie exercise of such care as a prudent man would have exercised 
 under the same circumstances.' 
 
 The liability of the company depends upon the question 
 whether the act producing the injury was nef^ligent, and whether 
 the plaintiff . was free from fixult contributory thereto, and this 
 question is for the jury in view of all the circumstances material 
 to the issue.^ 
 
 Sec. 511. Trespassers on the tracks. — The fact that a person is 
 a trespasser on its track does not absolve the company from pre- 
 venting the infliction of an injury upon him, if possible. They 
 cannot run over a person or cattle or horses upon its track, simply 
 because they have no right there, or because they do not leave 
 the track when signals for that purpose are made ; but, as to per- 
 sons, at least, they have a right to presume that they will obey 
 the ordinary instincts of humanity and self-preservation, and avoid 
 impending danger if possible, but if he exhibits no inclination to 
 do so, and there is time to stop the train^ o/tid it can he done 
 without danger to those upon it, after it becomes patent that the 
 person or animals will not leave the track, they are bound to stop. 
 What is due care under such circumstances is a question depend- 
 ent upon the facts of each case, and is essentially one for tlic jury. 
 From all the facts and circumstances of the case the jury must 
 say %vhether the company failed to discharge its duty.' In such 
 cases the negligence of the company must be so gross as to imply 
 
 1 Eagan v. Fitchburg R. Co., 101 bell v. St. Joseph, etc., R. R. Co., GO 
 
 Mass. 315. " Mo. 475. The company is bound to 
 
 '^ McGuire v. Hudson R. Co., 2 Daly use reasonable care to prevent injury 
 
 (N. Y. C. P.), 76 ; Baltimore, etc.. R. to persons on its track, and as to what 
 
 Co. V. The State, 29 Md. 252. is reasonable care is a question for 
 
 ^ In Houston, etc., R. R. Co. v. the jury in view of all the circum- 
 
 Sympkins, 51 Tex. 615, the defend- stances ; Baltimore, etc., R. R. Co. 
 
 ant was held liable for running over v. State, 33 Md. 542; and even if he 
 
 a person who was lying on the track is intoxicated the same rule prevails, 
 
 in plain sight of approaching trains, Weymire v. Wolf, 52 Iowa, 533 ; as 
 
 he having fallen there in a fit while it also was with reference to children 
 
 walking on the track, the court saying, playing on the track; Kansas, etc., 
 
 however, that the rule would be dif- R. R. Co. v. Fitzsimmons, 22 Kan. 
 
 ferent if he had fallen there from in- 686 ; Finlason v. Chicago, etc., R. 
 
 toxication, as in the latter event the Co., 1 Dill. (U. S. C. C.) 579; Stout 
 
 person injured would be treated as v. Sioux City, etc., R. Co., 2 id. 294; 
 
 guilty of contributory negligence. Toledo, etc., R. Co. v. Riley, 47 111. 
 
 Herring v. Wilmington, etc., R. R. 408; Brand v. Troy, etc., R. Co., 8 
 
 Co., 10 Ired. (N. C.) 402; Houston, etc.. Barb. 368. 
 R. R. Co. V. Smith, 52 Tex. 178 ; Isa-
 
 792 Pkivate Corporations. 
 
 a disregard of consequences and a willful disregard of duty, and 
 that to such an extent as to entirely overcome the effect of the 
 contributory negligence of the person injured,^ under the rule that 
 the party guilty of the greatest wrong must be considered the 
 aggressor.'' But to have that effect, the negligence of the company 
 must be so much greater than that of the person injured, as to 
 clearly preponderate.' 
 
 Sec. 512. Different rule as to children. — The same rule as to con- 
 tributory negligence does not apply to children that is applied to 
 adults, but in actions in their own name, or for their own benefit, 
 their age is to be considered,* although in some states it is held 
 that no distinction exists on account of age,* and in others, that 
 contributory negligence cannot be imputed to a child, too 
 young to appreciate or comprehend the danger.* 
 
 But when an action is brought in the name of a parent^ no 
 recovery can be had if negligence can be imputed to him in per- 
 mitting the child to be at large at the place where the injury 
 happened,' but the negligence of the parent cannot be imputed to 
 the child.* The question whether a railroad company is guilty 
 of negligence for injuries inflicted upon a child is one of fact, to 
 be determined according to the circumstances of each case. It is 
 for the jury to say whether the injury resulted from the omission 
 by the defendant of any duty. If so, liability attaches ; if not, it 
 does not." 
 
 'Lafayette, etc., R. Co. v. Adams, R. Co, 49 Barb. 539; Bannon v. 
 
 26 Ind. 76 ; Illinois Central R. Co. v. Baltimore, etc., R. Co., 24 Md. 108. 
 
 Hutchinson, 47 111. 408. « Chicago, etc., R. Co. v. Gregory, 58 
 
 2 Macon, etc., R. Co. v. Davis, 27 111. 226; Mahouey v. Railr. Co., ante; 
 Qa. 113. Schmidt V.Milwaukee, etc., R. Co., 23 
 
 3 Chicago, etc., R. Co. v. Payne, 49 Wis. 186; Kav v. Peun., etc., R. Co., 
 111. 499 ; State v. Manchester, etc.R. 65 Penn. St. 269; Glassey v. Railr. Co., 
 Co., 52 N. H. 528: Macon, etc., R. 57 id. 172. 
 
 Co. v. Winn, 26 Ga. 250. ■> Jeffersonville, etc., R. Co. v. Bo wen, 
 
 ■*Bellefontaiue, etc., R. Co. v. Sny- 40 Ind. 545 ; Pittsburg etc.R. Co. v. 
 
 der, 18 Ohio St. 399; Warner v. R. Pearson, 72 Penn. St. 169 ; Ihl v.42dSt. 
 
 Co., 6 Phila. (Penn.) 537 ; Railr. Co. Railw. Co., 47 N. Y. 317. 
 
 V. Stout, 17 Wall. (U. S.) 657 ; Daley » Glassey v. Railr. Co., ante; Daley 
 
 v. Norwich, etc., R. Co., 26 Conn. v. Norwich, etc., R. Co., 26 Conn. 591; 
 
 591; Boland V. Missouri, etc., R. Co., Bellefontaine, etc., R. Co. v. Snyder, 
 
 36 Mo. 484. 18 Ohio St. 399 ; Field on Dam.. § 195. 
 
 ^Honegsbergerv. Railr. Co., 1 Keyes * Glassev v. Railr. Co., ante ; Kay v. 
 
 (N. Y.), 570; IBurke v. Broadway, etc., Penn. R. Co.. 65 Penn. St. 269; Meyer 
 
 V. Midland, etc., R. Co., 2 Neb. 319.
 
 Negligence and Weongful Acts of Agents, etc. 793 
 
 Sec. 513. injuries to animals. — For injuries to animals tres- 
 passing upon its track, through no fault of the company, the com- 
 pany is not liable, unless the injury was inflicted through gross 
 negligence of its servants, or willfully,' but if the injury was the 
 result of accident,'' or tlie plaintiff contributed thereto by permit- 
 ting his cattle to run at large, no recovery can be had unless the 
 negligence of the company was gross.' 
 
 But if by statute the company is required to erect cattle-guards 
 at highway crossings ' or fences to keep cattle off its track, it is 
 liable for injuries resulting from a failure on its part to erect and 
 maintain the same.^ 
 
 But its neglect to erect and maintain fences only inures to the 
 benefit of adjoining owners, or those ha%'ing cattle upon his prem- 
 ises by his consent, and does not enable one whose cattle have 
 escaped upon his land from the highway or from adjoining prem- 
 ises, to maintain an action.' In Missouri it is held that when 
 the statute requires the company to maintain a fence, and it 
 neglects to do so, the adjacent owner is entitled to recover irre- 
 spective of the question of negligence,'' 
 
 Sec. 514. We have thus briefly reviewed the liability of rail- 
 road corporations for the negligent or wrongful acts of its agents, 
 because such corporations are the most prominent in litigation 
 involving these questions. The same pi-inciples apply to all cor- 
 porations with different degrees of intensity, according to the 
 purposes of the corporation, and the consequences of negligent or 
 improper conduct on the part of its agents. Corporations must 
 
 'Indianapolis, etc., R. Co. v. Petty, * Bradly v. Buffalo, etc., R. Co. 34 
 
 SOInd. 361; Antisdell v. Chicago, etc., N. Y. 427 ; McDowell v N. Y C 'r 
 
 26 Wis. 145; Jackson v. R. & B. R. Co., 37 Barb. 195; Tracy v N Y 
 
 Co., 25 Vt. 150; Quimby v. Vt. Central C. R. Co.,38N. Y. 4;^3. 
 
 R. Co., 23 id. 387 ; Pittsburgh, etc., « Shepard v. Buffalo, etc., R. Co 35 
 
 R. Co. V. Methoen, 21 Ohio St. 586; N. Y. 041 ; Tallman v. Syracuse, etc. 
 
 Tower v. Providence, etc., R. Co., 2 R. R. Co , 4 Keyes, 128. ' ' 
 
 1.404; Stearns v. Old Colony, etc., R. ^ Town v. Cheshire, etc., R. Co., 21 
 
 Co., 1 Allen (Mass.), 493; Knight v. N. H. 363; Horn v. Atlantic, etc.',' R. 
 
 New Orleans, etc., R. Co., 15 La. Ann. Co., 35 id. 169 ; Jackson v R. k B. R. 
 
 105; New Albany, etc., R. Co. v. Mc- Co., 25 Vt. 150. Contra, see Browne 
 
 Namara, 11 Ind. 543. v. Providence, etc., R. Co., 12 Gray 
 
 '^ Garris v. Portsmouth, etc., R. Co., (Mass.), 55. 
 
 2 Ired. (N. C.) 324. ' Powell v. Hannibal, etc., R. Co., 
 
 3 Trow V. Vt. Central R. Co. , 24 Vt. 35 Mo. 457 ; Bigelow v. Northern Mo 
 
 487; Hance v. Cayuga, etc., R. Co., R. Co., 48 id. 510. 
 36N. Y. 428. 
 
 100
 
 794 Pkivate Cobpokations. 
 
 necessarily act through agents, and the acts of those agents within 
 the scope of their express or implied authority are binding upon 
 them, whether arising out of contracts or tortious acts. The 
 agents, within the line of their duty, are treated as the corpora- 
 tion itself, and the corporation is liable therefor as much as 
 though the officers of the corporation had themselves performed 
 the act. The principal conflict in the cases has arisen mainly 
 from the fact that a proper distinction has not always been taken 
 between the agents of corporations and individuals. In the very 
 nature of things corporations can only discharge their functions 
 through agents ; that is contemplated by the law creating them, and 
 in the peculiar sphere of his duty each agent, from the highest to 
 the lowest, stands in the place of and represents the corporation. 
 His acts are the acts of the Gorj)orat{on itself. For all ^practical 
 purposes as to such duties he is the corporation. Potter, J., in 
 a very able opinion in a New York case,' which is approvingly 
 cited by Mr. Wood in his Law of Master and Servant (p. 887), 
 gives expression to the real distinction. He says : " A corporation 
 cannot act personally. It requires some person to superintend 
 structures, to purchase and control the running of cars, to employ 
 and discharge men and provide all needful appliances. This can 
 only be done by agents. When the directors themselves person- 
 ally act as such agents, they are the representatives of the corpo- 
 ration ; they are the executive head or master ; their acts are the 
 acts of the corporation ; the duties above described are the duties 
 of the corporation. When these directors appoint some other 
 person than themselves to superintend and perforin all these 
 executive duties for them^ then such appointee equally with 
 themselves represents the corporation as master in all these 
 respects.'''' The real test of the liability is, whether the act was one 
 within the scope of the agenfs authority, real or apparent. Was 
 it an act done in doing that which he was authorized to do and as 
 an incident to it ? "^ The principal in all cases takes the risk of 
 all the consequences of a wrongful execution of duties on the part 
 of any person whom he employs in whatever capacity.^ 
 
 ' Brickner v. Railr. Co., 3 Lans. (N. * Ramsden v. Bost. & Alb. R. Co., 
 
 T.) 506, and affirmed, 49 N. Y. 673. ante ; Passenger R. Co. v. Young, 21 
 
 2 Wood's Law of Master and Serv- Ohio St. 518 ; 8 Am. Rep. 78 ; Little 
 
 ant, chap. 13. Miami R. Co. v. Wetmore, 19 Ohio St.
 
 Negligence and Wrongful Acts of Agents, etc. 795 
 
 " The question usually presented," saj's Mr. Wood (Law of 
 Master and Servant, p. 533), " is whether, as a matter of fact, or 
 of law, the injury was received under such circumstances that, 
 under the employment, the master can be said to have authorized 
 the act, for if he did not, either in fact or in law^ he cannot be 
 made chargeable for its consequences, because, not having been 
 done under authority from him, express or implied, it can, in no 
 sense, be said to be liis act, and the maxim qui facit per alium 
 facit per se does not apply. The test of liability in all cases 
 depends upon the question whether the injury was committed by 
 the autliority of the master expressly conferred, or fairly implied 
 from the nature of the employment and the duties incident to 
 it."^ 
 
 Sec. 515. instances of liability for other torts of servants. — A 
 corporation may be held chargeable for a trespass commit- 
 ted by its servants or agents upon the lands of another ; ' for 
 
 131 ; Limpus v. Gen. Omnibus Co., 1 
 H. & C. 5-11; Higgins v. VVatervliet 
 Turnpike Co., 46 N. Y. 23 ; Slierley v. 
 Billings, 8 Bush (Ky.), 147; 8 Am. 
 Rep. 541 ; Howe v. Newmarch, 12 
 Allen (Mass.), 49 ; Bryant v. Rich, 106 
 Mass. 180; 8 Am. Rep. 311 ; Jefferson- 
 ville R. Co. V. Rogers. 38 Ind. 116; 10 
 Am. Rep. 103 ; Hewett v. Switt, 3 
 Allen (Mass.), 420 ; Holmes v. Wake- 
 field, 12 id. 580 ; Moore v. Fitcbburg 
 R. Co., 4 Gray (Mass.), 465; Seymour v. 
 Greenwood, 7 H. & N. 356; Sauford v. 
 Eighth Ave. R. Co., 23 N. Y. 343 ; 
 Gotf V. Gt. Northern R. Co., 3 El. & 
 El. 672; Poulion v. London, etc., R. 
 Co., L. R., 2 Q. B. 534; Pickens v. 
 Diecker, 21 Ohio St. 212 ; 8 Am. Rep. 
 
 ' Reedie v. London, etc., Railway 
 Co., 4 Exch. 244 ; Bartonshill Coal Co. 
 V. Reid, post ; Cosgrove v. Ogden, 49 
 N. Y. 255; O'Conuell v. Strong, Dud- 
 ley (S. C), 265 ; Audrus v. Howard, 36 
 Vt. 248 ; Luttrell v. Hazen, 3 Sneed 
 (Tenn.), 20; Drew v. Sixth Av. R. Co., 
 26 N. Y. 49 ; Brown v. Purviance, 2 H. 
 &G. (Md.)316; Howe v. Newmarch, 
 12 Allen (Mass.), 49 ; Southwick v. 
 Estes, 7 Cush. (Mass.") 385 ; Duggins v. 
 Watson, 15 Ark. 118; Armstrong v. 
 Cooley, 10 111. 509; Weed v. Panama 
 K. Co., 17 N. Y. 362; Wanstall v. 
 
 55. The master is liable for what his 
 servant does in the course of his em- 
 ployment, but not for acts entirely dis- 
 connected with it, for, in the first in- 
 stance, the act is the act of the mas- 
 ter, while in the latter it is the act of 
 the servant ; Aldrich v. Boston, etc., 
 R. Co., 100 Mass. 31 ; and the difficulty 
 in determining who is liable is in de- 
 termining whose act produced the in- 
 jury. That is, whether the act is 
 properly chargeable to the master or 
 is purely that of the servant. Bryant 
 V.Rich, ante. No precise rule for de- 
 termining this question can be given 
 and in each case it is a question for 
 the jury in view of the facts and cir- 
 cumstances. 
 
 Pooley, 6 CI. & F. 910 n; Priester v. 
 Augley, 5 Rich. (S. C.) 44 ; Jones v. 
 Glass, 13 Ired. (N. C.) 305; Patten v. 
 Rea, 2C. B. (X. S.) 606; Yates v. 
 Squires, 19 Iowa, 26 ; Qoss v. Coblens, 
 43 Mo. 377 ; Page v. Defries, 7 B. & S. 
 137; Wilson v. Peverly. 2 N. H. 548; 
 McKeon v. Citizens' R. Co., 42 Mo. 80; 
 Haack v. Fearing, 4 Abb. N. S. (N. Y.) 
 297; Goodman v, Kennell, 3 C. & P. 
 167. 
 
 ■•' Louisville R. Co. v. Faulkner, 3 
 Head (Tenn.), 65 ; How v. Canal Co., 
 5 Harr. (Del.) 245.
 
 796 Pktvate Corpoeations. 
 
 false imprisonment ; ' for a libel published by its servants ; ' for 
 a nuisance committed by them ; ' for a conversion of the goods 
 of another by them;* or for any act done by them within the 
 scope of their authority; but the question of liability always 
 depends upon the circumstance, whether or not the act was within 
 the scope of the servants' authority, express or implied. 
 
 Sec. 516. Liability to indictment. — A corporation is liable crim- 
 inally for the acts of its agents, wlien the acts done are within the 
 scope of the authority delegated to the agent. Thus, where the 
 servants or agents of a corporation, in the operations of its works, 
 pollute the waters of a stream," or obstruct a highway,* or commit 
 any nuisance that is a legitimate result of doing that which they 
 were employed to do, the corporation, as well as the servants or 
 agents, are liable to indictment therefor.l So a corporation may 
 be indicted for an assault committed by its servants,* or a libel 
 published by its orders,^ or for any non-feasance, by the omission 
 by its servants to perform a duty imposed upon it by statute, or 
 by the common law,'" or for a misfeasance by doing that which 
 they are intrusted to do, contrary to statute, or in violation of the 
 common law.^' Thus, a turnpike company is liable to indictment 
 for permitting its turnpike to be and remain out of oi*der.'^ So a 
 railroad company authorized to obstruct a highway in a certain 
 mode is liable to indictment for obstructing it in any other mode." 
 ' And, generally, when the act done is made an offense by statute or 
 the common law, and is within the scope of the powers conferred 
 upon its officer, agent or servant doing it, the corporation is crim- 
 inally liable therefor, 
 
 ' Owsley V. Montgomery, etc., R. Co., ^ Whitfield v. S. E. Railway Co., E. 
 
 37 Ala. 560. B. & E. 115. 
 
 ^ Aldricli V. Press Printing Co., 9 i" Regina v. Birmingham R. Co., 9 C. & 
 
 Minn. 133. P. 469; Com. v. Nashua & Lowell R. 
 
 3 Terre Haute Gas Co. v. Teel, 20 Co., 2 Gray (;Mass.), 54; Regina v. G. 
 Ind. 131; Taylor v. Boston Water N. of England Railway Co., 9 Q. B. 
 Power Co., 12 Gray (Mass.), 415. 315. 
 
 4 Beach v. Fulton Bank, 7 Cow. (N. " State v. Vt. Central R. Co., 27 Vt. 
 Y.)485. 103; Regina v. North of England R. 
 
 ^ Rex V. Medly, 6 C. & P. 437 ; Re- Co., 9 Q. B. 315; Com. v. New Bedford 
 
 gina V. Stephens, L. R.. 1 Q. B. 701. Bridge Co., 2 Gray (Mass.), 339. 
 
 6 Regina v. Sheffield Gas Co. ; Louis- "^ Red River Turnpike Co. v. State, 1 
 
 ville, etc., R. Co. v. State, 3 Head Sneed (Tenn.), 474 , Waterford, etc. , 
 
 (Teun.), 523 ; State v. Morris & Essex Turnpike Co. v. People, 9 Barb. (N. Y.) 
 
 R, Co., 23 N. J. 360. 161. 
 
 'Rex V. Medly, ante; Regina v, '^ Regina v. Scott, 3 Q. B. 543. See 
 
 Stephens, ante. also § 549 and notes. 
 
 ® Eastern Counties R. Co. v. Broom, 
 6 Exch. 314.
 
 INDEX. 
 
 Refers to Sections. 
 
 A. 
 
 ACCEPTANCE (see Private Corporations) : Sec. 
 
 of a grant of incorporation 23 
 
 mode of acceptance 24 
 
 formal acceptance not necessary n. 3, 24 
 
 unconditional 26 
 
 under general laws 27 
 
 may be inferred n. 1, 25, n. 2, 27 
 
 the doctrine has no application to municipal corporations, 23, n. 4, 30 
 of charter of private corporation constitutes a contract which the 
 
 state cannot violate 32 
 
 corporate act need not be 32 
 
 ACCOMMODATIONS : 
 
 duty of railroad companies to furnish reasonable and safe 500 
 
 ACKNOWLEDGMENT: 
 
 corporate instruments, by whom made 257 
 
 AGENTS (see Officers; Directors; Corporations; Torts ; 
 Negligence ; Contracts) : 
 
 directors as 143 
 
 authority of , 145 
 
 ratification of acts as 147 
 
 implied when 148, 150 
 
 effect of 150 
 
 when personally liable for acts as 152, 153, 190 
 
 when not, for acts of other agents 193 
 
 compensation of 196 
 
 meetings 164, 207 
 
 corporate liability for negligence of, generally 480 
 
 wrongful acts of 480 
 
 illustration of doctrine of liability in such cases 481 
 
 maxim applicable to 483
 
 798 Index. 
 
 AGENTS — (Continued). Sec. 
 
 corporate liability, illustration oi 483-487 
 
 test of liability for 487 
 
 matters to be considered in determining 489 
 
 as contractors 490 
 
 in case of contractees 490 
 
 nuisances 491 
 
 liability, the same care as natural persons 492 
 
 for, in relation to engines, cars, track, etc 494, 495 
 
 instances of negligence when the corporation was held liable, 496 
 
 neglect of duty in case of 497 
 
 in case of injuries received in getting upon a train 499 
 
 as affected by the duty of passengers 501 
 
 willful wrongs, when 503 
 
 negligence of, in constructing works 505 
 
 repairing 505 
 
 nuisances - 505 
 
 corporate, necessity for 165 
 
 general law of agency applicable to 165 
 
 officers are 165 
 
 limitations on authority of 166 
 
 directors as 167 
 
 appointment of 168 
 
 may be appointed without the use of the corporate seal 169 
 
 what is within the scope of their authority 170 
 
 powers imjDlied by virtue of office 171, 174 
 
 where he exceeds his authority in the execution of contracts 174 
 
 limitations of authority as to time 175 
 
 mode of executing contracts by 176 
 
 contracts tdtra vires, executed by 179, 180, 229-241 
 
 parties dealing with, must take notice of authority 181, 182 
 
 delegation of authority by 183 
 
 powers expressly conferred upon 184 
 
 ratification of acts of 185-187 
 
 personal liability of 188 
 
 Avhere there is no principal 191 
 
 in case of no authority 192-194 
 
 for violation of duties 195 
 
 compensation of 196 
 
 frauds of 197 
 
 proof of 198 
 
 corporate liability for negligence of, in relation to engines and ma- 
 chinery 494, 506 
 
 application of maxim, sic utere tuo ut alienum non Icedas, to 507 
 
 negligence of, as affected by the doctrine of contributory negli- 
 gence 508 
 
 consequential injury by 509
 
 Index. 799 
 
 AGENT8 — (Continued). Sec. 
 
 negligence of, in running trains 510 
 
 in case of trespassers upon the track of railroads 511 
 
 in case of injury to children^ 512 
 
 animals 513 
 
 of, for various torts 514 
 
 AMALGAMATION (see Consolidation) : 
 
 meaning of 384 
 
 English doctrine relating to 385 
 
 doctrine of, in this country 386 
 
 must be authorized by statute 387 
 
 when authority of, is conferred after the creation of the corpora- 
 tion 388, 389 
 
 result sometimes effected by the exercise of the right of eminent 
 
 domain 390, 391 
 
 when authority to, exists at the time of the creation of a corporation, 392 
 rule as to requisite concurrence where no statutory authority is 
 
 given 393 
 
 the rights and powers of the new organization in case of 394 
 
 doctrine as to creditors in case of 395 
 
 of corporations organized in different states 396 
 
 ANIMALS (see Negligence ; Torts) : 
 
 injuries to, by negligence of corporations 513 
 
 care of corporations in ct to 514 
 
 B. 
 
 BANKS: 
 
 national, taxation of, under the act for - 478 
 
 BANKING: 
 
 insurance companies cannot engage in 47 
 
 (See Corporations ; Contracts.) 
 
 BILLS AND NOTES (see Corporate Contracts): 
 
 corporate, negotiable quality of 227 
 
 BRIDGE : 
 
 charter for, when it does not prevent the legislature from granting 
 
 another charter for another bridge, across the same river 38 
 
 case of Charles River Bridge 38 
 
 Warren Bridge 38 
 
 Binghamton Bridge n. 2, 38 
 
 BY-LAWS: 
 
 general principles relating to 261 
 
 requisites of, and construction 262
 
 800 Index. 
 
 BY-LAWS — (Continued). Sec. 
 
 must be reasonable 263 
 
 not be oppressive 263 
 
 contrary to the laws of the state 263 
 
 in restraint of trade, void 264 
 
 when adopted by the corporate body 265 
 
 directors 266 
 
 distinction between 257 
 
 void, when contrary to the general laws of the land 268 
 
 matters that may be regulated by 269, 270 
 
 how they are made 272 
 
 repeal of 273 
 
 functions of 274 
 
 effect on third persons 274 
 
 regulating the transfer of corporate stock 275 -278 
 
 providing for a lien on stock 277, 278 
 
 notice conferred by , 279 
 
 cannot affect rights secured by the incorporating instruments . . . , 280 
 
 c. 
 
 CARS (see Railroad Corporations ; Negligence) : 
 
 railroad, liability of, for defects in 494 
 
 for negligence in construction of 494, 495 
 
 instance where held liable for 496 
 
 CASHIER (see Officers) : 
 
 powers of, implied notes, 170 
 
 CERTIFICATES (see Stock ; Stockholders ; Shares) : 
 
 of shares, nature of 56a 
 
 income on 96 
 
 character and quality of 114 
 
 transfer, how made 118 
 
 corporation may be compelled to transfer on books 125 
 
 right of action against corporation for failure to transfer , 127 
 
 CHARTERS: 
 
 of private corporations a contract irrevocable 3 
 
 of public corporations revocable by the state 3 
 
 not necessarily public because of public interest n. 2, 3 
 
 repeal of, by the legislature under statutory provisions 33, 44 
 
 CHILDREN (see Negligence) : 
 
 corporate liability for injuries to, by the negligence of agents. . . 512 
 
 doctrine as to contributory negligence of 512 
 
 distinction between action by the parent and action for 
 the child notes, 512
 
 Index. 801 
 
 CITIZENS (see Suits at Law) : Sec. 
 
 corporations not included in the constitutional provision of the U. 
 S. conferring upon citizens of each state certain privileges and 
 
 immunities 330-334 
 
 corporations are, under the provisions of the constitution of the U. 
 
 S. relating to judicial powers 33o-337 
 
 corporations are, under the provisions of the U.S. judiciary acts, 338-341 
 under the act of congress for the removal of causes from 
 the state to the federal courts 342-345 
 
 COMMON SEAL (see Seal; Corporate Seal): 
 
 incident of a corporation 247 
 
 former doctrine in relation to 248 
 
 origin of law relating to 249 
 
 present doctrine relating to 251 
 
 what is 254, 255 
 
 by whom it should be affixed 256, 257 
 
 relating to agents 258 
 
 as evidence 260 
 
 COMPENSATION (see Eminent Domain) : 
 
 for land taken under right of eminent domain 407, 408 
 
 mode of i^roceeding to determine 409 
 
 estimating damages 409 
 
 elements which may be considered 410 
 
 CONDITIONAL SUBSCRIPTIONS (see Stock ; Stockholders) : 
 
 condition in constating instruments 67 
 
 conditions in writing 70 
 
 may be waived 72 
 
 when void 73, 74 
 
 CONDITIONS (see Stock ; Stockholders) : 
 
 to subscriptions provided by the constating instruments 67 
 
 provided by the contract of subscription 70 
 
 may be waived 72 
 
 of the contract of subscription, when void 73 
 
 which avoid the whole contract 74 
 
 CONSOLIDATION (see Amalgamation) : 
 
 meaning of, same as amalgamation in England 384 
 
 English doctrine relating to 385 
 
 doctrine of, in this country 386 
 
 must be authorized by statute 387 
 
 where authority is conferred after the creation of the corpora- 
 tion 388, 389 
 
 in the absence of legislative authority the same result is sometimes 
 
 accomplished by the exercise of the right of eminent domain, 390, 391 
 when the right exists at the time of the creation of the corporation, 393 
 101
 
 802 Index. 
 
 CONSOLIDATION — (Continued). Sec. 
 rule as to requisite concurrence in the absence of statutory provis- 
 ions therefor 393 
 
 the powers and privileges of the consolidated corporation 394 
 
 rights of creditors of the consolidating corporations in case of . . . 395 
 
 of companies organized in different states 396 
 
 CONSTATING INSTRUMENTS: 
 
 use and meaning of the term. . . n. 3, 28 
 
 CONSTRUCTIOJT (see Contracts): 
 
 of corporate power to make contracts 219 
 
 incidental 221, 222 
 
 scope of authority 224 
 
 CONTRACTS (see Corporate Contracts) : 
 
 the power to make, a corporate incident 219 
 
 mode of executing tlie power 220 
 
 executed by agents 220 
 
 when necessary to be in writing -. . , 220 
 
 generally not necessary to be in writing notes, 220 
 
 construction of instruments relating to 221, 222 
 
 relating to bailments 223 
 
 depends upon its character ' 223 
 
 what would not be within the scope of the agent's authority in 
 
 relation to 224, 225 
 
 place of making, by the corporation 225 
 
 by the directors 226 
 
 corporate bills and notes 227 
 
 bonds, negotiable quality of 227 
 
 coupons, their incidents and qualities 228 
 
 ultra vires 229-241 
 
 doctrine of 229 
 
 different senses in which the term is used 230 
 
 are all such contracts void 231, 233 
 
 distinction in case of, between executed and unexecuted con- 
 tracts 233, 234 
 
 form of action In case of 237 
 
 doctrine of, applied to agents 238 
 
 in case of negotiable instruments 239 
 
 as to implied powers ... 240 
 
 conclusion as to 241 
 
 CONTRACTORS (see Contracts; Negligence; Torts; Agents): 
 
 when liable for negligence 480 
 
 CONTRACTBES : 
 
 liability for negligence, etc 490 
 
 CONTRIBUTORY NEGLIGENCE (see Negligence ; Torts) : 
 
 effect of, in case of negligence 508
 
 Index. 803 
 
 CONTRIBUTORY NEGLIGENCE — (Continued). Sec. 
 
 question of, usually for the jury 508 
 
 in case of fire, originated by negligence 508 
 
 in case of negligence of railroad companies, by which a fire is 
 
 started 302-311 
 
 CORPORATIONS (see Private Corpokations ; Public Corpora- 
 tions ; Railroad Corporations ; Torts ; Damages) : 
 
 how defined ... 1 
 
 various kinds 2, 3 
 
 distinction between public and private 3 
 
 quasi corporations 4 
 
 origin and early history of private corporations 5 
 
 variety and importance of modern corporations for pecuniary gain, 5 
 
 creation of, an act of sovereignty 6 
 
 by royal charter 6 
 
 act of parliament 8 
 
 by prescription, and at common law 9 
 
 how created in this country 10 
 
 power of congress to create 11 
 
 legislatures to create 12 
 
 general statutes of incorporation 13 
 
 advantage of 13 
 
 of the general power to delegate authority to create 15 
 
 of territorial legislatures 16 
 
 by prescription in this country 17 
 
 foreign joint-stock companies may be. 18 
 
 the name of 19 
 
 the location of 20 
 
 words of, in royal grants 21 
 
 common-law incidents of 22 
 
 acceptance of the grant of incorporation 23 
 
 mode of acceptance of grant 24 
 
 acceptance must be unconditional 26 
 
 under general laws 28 
 
 implied powers of, under general or special statutes 45 
 
 powers conferred or limited by statutes 46 
 
 powers limited to those conferred by charter n. 3, 46 
 
 powers limited to the objects of the grant ... 47 
 
 insurance corporations cannot engage in banking 47 
 
 confined to business for which they were created 47 
 
 distinction between, and partnerships 48 
 
 composition of private 51 
 
 private, government may constitute member of 52 
 
 admission and election of members and oflQcers of 53 
 
 disfranchisement and expulsion of members of 54 
 
 quasi, what are 55
 
 804 Ikdex. 
 
 CORPORATIONS — (Continued). Sec. 
 
 private, membership of, under general statutes 56 
 
 management of, by directors 57 
 
 shareholders are members of 58 
 
 right to vote 58 
 
 by proxy 61 
 
 must take notice of vphat 62 
 
 what they are presumed to know 62 
 
 personal liabilities of, under statutes 63 
 
 general liabilities of, on subscriptions 66 
 
 under conditions in the constating instruments 67 
 
 conditional subscriptions 70 
 
 conditions, waiver of 72 
 
 when void 73 
 
 subscriptions, when conditions avoid the whole contract, 74, 75 
 
 in contemplation of incorporation 77 
 
 fraud in relation to 78 
 
 rules depend upon statutes or constating instruments 79 
 
 defense to 80 
 
 assessment and calls for 82 
 
 stock, forfeiture of ... . 85 
 
 assessment of 86 
 
 notices of, assessments of 90 
 
 sufficiency of 91 
 
 dividends, right to 92 
 
 may sue for 95 
 
 in trust 96 
 
 right to sell and assign shares 98 
 
 liability of assignees to corporation. . 101 
 
 purchasers from trustees 102 
 
 stockholders, right to vote 105 
 
 liability in equity to creditors 129 
 
 right of access to books . .' 106 
 
 action against corporation 127 
 
 preferred stock, rights of holders of 108 
 
 when it can be issued 108 
 
 dividends on 107 
 
 scrip and preliminary subscriptions 109 
 
 stock of, defined 110 
 
 issuing certificates of shares of Ill 
 
 fraud in 112, 113 
 
 shares and income 114 
 
 character and quality of 114 
 
 certificates 117 
 
 transfer of 118 
 
 how made 118
 
 Index. 805 
 
 CORPORATIONS — (Continued). Sue. 
 
 stock of, refusal of corporation to transfer 120 
 
 liens of corporation on 122 
 
 corporation may be compelled to transfer 125 
 
 when subject to attachment in hands of assignee 126 
 
 over-issued and watered stock 130 
 
 when liable for torts 283 
 
 general principles, relating to 281 
 
 may do, or cause to be done, wrongful acts 285 
 
 frauds of 286 
 
 frauds of agents, for wliich they are liable 286, 288, 290 
 
 when the corporation is the occasion of a loss 291 
 
 enjoying the benefit of a contract secured by fraud 292 
 
 right to repudiate a contract for, limited to original party 294 
 
 ratification of contract, secured by fraud of agent 295 
 
 liability for other wrongs of agents 297 
 
 assault and battery of agents 298 
 
 trespass to property . 300 
 
 in case of negligence of agents 302 
 
 limitation of, in certain cases 303-307 
 
 in case of successive negligence, when 307 
 
 complications arising from 307 
 
 torts, damages generally 311-324 
 
 exemplary . 313 
 
 exemplary damages not applicable to corporations 315 
 
 damages, extreme doctrine of 316 
 
 for gross negligence, damages 317 
 
 not consistently applicable to corporations 318 
 
 for exemplary, recent examination of the doctrine 319 
 
 conflict 322 
 
 damages resulting in death 328 
 
 elements of 324 
 
 what is competent to show 324 
 
 foreign, not citizens 330 
 
 private, causes for which they may be dissolved 436 
 
 which constitute a dissolution of 436 
 
 dissolution of, reserved power in the legislature to dissolve. . 437, 438 
 
 where the reserved power is subject to a condition 439 
 
 on expiration of the time limited for their continuance 440 
 
 for neglect or abuse of powers 441, 442 
 
 mode of proceeding in such cases 443, 444 
 
 dissolution by the voluntary acts of its members 445 
 
 where the majority may surrender its franchise 446 
 
 under statutes providing for the winding up of corporations. 447, 448 
 by the death of all of its members 449
 
 806 Index. 
 
 CORPORATIONS — (Continued). Sec. 
 
 effect of, generally at common law 450 
 
 effect of, upon creditors 451 
 
 under proceedings for forfeiture, by quo warranto 452 
 
 under proceedings not the subject of collateral inquiry 452 
 
 under certain circumstances may be inquired into collaterally .... 453 
 
 liability for negligence 480 
 
 illustration of the doctrine of 481 
 
 maxim, relating to 482 
 
 cases relating to 483^86 
 
 real test of 487 
 
 implied powers of agents in such cases 488 
 
 matters to be considered in determining 488 
 
 whether the act is within the scope of agent's authority, 488 
 
 of contractors, stated 490 
 
 of contractees, when 490 
 
 in case of nuisance 491 
 
 bound to same degree of care as natural persons 492 
 
 not insurers against all casualties 493 
 
 railroad, duty required in relation to engines, cars, track, etc. . . . 494 
 
 instances where held liable for negligence 496 
 
 duty of 497 
 
 when liabilities for injury received in getting upon the train, 499 
 
 duty to furnish reasonable accommodations 500 
 
 passengers 501, 502 
 
 liability for wrongs of agents generally 503 
 
 railroad, liability for delay in running trains 504 
 
 negligence in constructing road 505 
 
 repairing 505 
 
 nuisances 505 
 
 defects in engines and machinery 506 
 
 application of maxim sic utere tuo ut alienum non Icedas to. . . . 507 
 
 liability, in case of contributory negligence 508 
 
 for consequential damages 509 
 
 damages in the running of trains 510 
 
 in case of injuries to trespassers upon tracks 511 
 
 children 512 
 
 animals 513 
 
 other cases 515 
 
 CORPORATE MEETING (see Dikectoks) : 
 
 mode by which the will of the corporation is expressed 199 
 
 members should have an opportunity to be present 199 
 
 right to a voice on all questions of corporate policy 199
 
 Index. 807 
 
 CORPORATE MEETING — (Continued) . Sec. 
 
 members' will, the will of the corporation 1 J>9 
 
 doctrine applies to by-laws 1*J9 
 
 when they may prescribe the time and place of meeting 1*J'J 
 
 no one bound without consent li)0 
 
 notice of 200 
 
 when required to be personally given 200 
 
 not required wiien time and place of meeting are provided 
 
 in the constating instruments 200 
 
 by-laws relating to, void when repugnant to the fundamental 
 
 law 200 
 
 absence of members from home no excuse for failure togive,n.4, 200 
 
 but mental imbecility might be n. 4, 200 
 
 may not be required when they are fixed by usage n. 5, 200 
 
 common-law doctrine relating to 201 
 
 in the absence of any provision as to the length of notice, it 
 
 should be reasonable 201 
 
 not required where the meetings are stated and general, n. 5, 201 
 
 should state the time and place of 201 
 
 waiver of 202 
 
 presumptions ii- 2, 202 
 
 presumed by attendance of all 202 
 
 required where business of an extraordinary character is to 
 
 be done 204 
 
 validity of acts depend upon . . . '. 202 
 
 distinction between general and special as to 204 
 
 adjourned meetings 203 
 
 incidental common-law right 203 
 
 general and special ~'"'^ 
 
 where business of an extraordinary character is to be done 204 
 
 special meetings, notice of, given at general meetings 204 
 
 majority present may express corporate will 205 
 
 rights of stockholders under statutes cannot be divested by by- 
 laws, resolutions or contracts 205 
 
 right of the trustee or pledgee of stock to vote at 206 
 
 of directors 207 
 
 if unusual, notice must be given 207 
 
 notice usually prescribed by the by-laws or constating instru- 
 ments 207 
 
 acts at an irregular meeting may be valid 208 
 
 can they only act as a board ? 209 
 
 what constitutes a quorum 211 
 
 majority of the quorum may bind the corporation 211, 212 
 
 if a quorum are present, a majority of that quorum may act. . 213
 
 808 Index. 
 
 CORPORATE MEETING — (Continued). Sec. 
 
 of directors, general powers of, at meetings 214 
 
 mode of expressing their assent 215 
 
 cannot be held outside the state creating them 216 
 
 directors may 215, 216 
 
 equity jurisdiction of the courts to enjoin corporate elections. . . . 218 
 
 CORPORATE PROPERTY (see Corporations ; Private Corpora- 
 tions ; Taxation) : 
 
 subject to taxation 467-479 
 
 of railroads, diiScult of taxation 469 
 
 taxation of, statutes regulating 470, 471 
 
 what is subject to taxation 472 
 
 exempt 472 
 
 contracts exempting from taxation sustained 473 
 
 against public policy 473 
 
 taxation, doctrine exempting from, will not be extended 474 
 
 exemption of U. S. bonds from 477 
 
 under the national banking law 478 
 
 CORPORATE SEAL (see Seal ; Contracts): 
 
 definition of, history 244 
 
 history of private seals 245 
 
 how they came into use 246 
 
 incident of a corporation 247 
 
 former doctrine as to 248 
 
 origin of the law relating to 249 
 
 present doctrine in reference to 251 
 
 what is 254, 255 
 
 by whom it sliould be affixed 256 
 
 where an acknowledgment is required 257 
 
 doctrine of, in relation to agents 258 
 
 authority may be conferre"d without 259 
 
 as evidence 260 
 
 COUPONS (see Contracts): 
 
 their incidents and qualities 288 
 
 may be detached from the bonds 288 
 
 may be transferred like negotiable instruments 288 
 
 are secured by the mortgage given to secure the bond 288 
 
 statute of limitations in reference to 288 
 
 do not lose their validity if bonds are paid off before their maturity. . 288 
 
 CREDITORS: 
 
 rights in equity for misappropriation of the corporate funds 365 
 
 may pursue corporate funds into the hands of any person not a 
 'bonafide holder 365
 
 Index. 809 
 
 CEEDITORS — (Continued). Sec. 
 
 dividends to stockholders cannot defeat rights of 365 
 
 division of proceeds among stockholders on sale of stock cannot 
 
 defeat rights of 365 
 
 property of the corporation held in trust for their payment 365 
 
 in equity, may reach unpaid subscriptions to satisfy claims 366 
 
 D. 
 
 DAMAGES (see Torts ; Corporations ; Fraud ; Contracts ; Neg- 
 ligence) : 
 
 generally in cases of torts 311-324 
 
 exemplary 318-323 
 
 whether applicable to private corporations 315, 316 
 
 consideration of the doctrine 315, 316 
 
 extreme cases 316 
 
 for gross negligence 317 
 
 inconsistency of, in its application to corporations 317 
 
 recent examination of the doctrine of 318-322 
 
 conflict growing out of 322 
 
 for injury resulting in death 323 
 
 elements in case of death 324 
 
 in case of the exercise of the right of eminent domain 409 
 
 mode of estimating in case of 409 
 
 elements of . 410 
 
 in case of lands not taken but damaged 411 
 
 DEATH (see Torts ; Damages ; Negligence) : 
 
 damages for injury resulting in 323 
 
 elements of damages in case of 324 
 
 exemplary damages not generally allowable, what it is competent 
 
 to show 324 
 
 dissolution of a corporation by death of all its members 449 
 
 DEFINITIONS (see Corporations) : 
 
 of corporations 1 
 
 various kinds of corporations 2 
 
 constating instruments 28 
 
 DESCRIPTION (see Definitions; Corporations): 
 
 of corporations 1 
 
 of various kinds of corporations 2 
 
 DISTINCTION (see Corporations) : 
 
 between public and private corporations 3 
 
 DIRECTORS (see Corporations ; Agents ; Private Corporations ; 
 Corporate Meetings) : 
 
 management of corporations by 57 
 
 102
 
 810 Index. 
 
 DIRECTORS — (Continued). Skc. 
 
 election of 131 
 
 powers of, provided by the fundamental laws 133, 134, 136 
 
 implied powers of 137 
 
 acts not within the scope of their powers 138 
 
 powers, when they depend upon interpretation of instruments. . . 140 
 corporate powers not conferred upon, remain in the corporate body, 141 
 
 cannot change the character and objects of the corporation 142 
 
 as agents 143 
 
 doctrine in England as to authority of directors 145 
 
 delegation of authority of 146 
 
 ratification of acts of 147, 148 
 
 when implied 147, 148 
 
 implied from knowledge, when. 149 
 
 effect of 150 
 
 under the national banking law 151 
 
 personal liability of 152, 153 
 
 fiduciary character of 154, 155 
 
 cannot manage affairs for their personal benefit 156 
 
 contracts with corporations viewed with suspicion 157, 158 
 
 when not personally liable for frauds of other agents 158 
 
 generally liable where they act without authority 159 
 
 most effectual remedy in such cases is by injunction n. 1, 159 
 
 liability of, as partners, in certain cases 160 
 
 de facto, acts of, cannot be collaterally impeached 161 
 
 compensation of 161 
 
 cannot be increased by themselves 162 
 
 meetings of 163 
 
 cannot benefit themselves to the prejudice of creditors n. 3, 154 
 
 in case of the insolvency of the corporation cannot set off against 
 a claim due the corporation, an amount due from the corpora- 
 tion to him n. 1, 156 
 
 cannot gain, by taking advantage of their position to the prejudice 
 
 of the corporation, stockholders, or creditors, notes, 157, notes 158 
 deal with the corporation for his own benefit, n. 1, 157, 158, and 
 
 notes, 364 
 
 as agents 167 
 
 meetings of 207 
 
 acts of an irregular meeting of, may be valid 208 
 
 can they act only as a board? . 309 
 
 what constitutes a quorum at a meeting 311 
 
 their powers 314 
 
 the mode of expressing their assent 315
 
 Index. 811 
 
 DIRECTORS — (Continued). Sec. 
 
 may hold meetings outside the state of their creation 216 
 
 place of contracting by 226 
 
 rights and liabilities of 359 
 
 remedies against 359 
 
 trustees of bondholders and creditors 359 
 
 corporation, right to services of 359 
 
 opinion of ... , 359 
 
 injunction to restrain unlawful acts of 370 
 
 in favor of shareholders 371 
 
 DISSOLUTION (see Quo Warranto) : 
 
 causes for which corporations may be dissolved 436 
 
 whicb constitute 436 
 
 reserve power in the legislature to dissolve 437, 438 
 
 where it is subject to a condition 439 
 
 on the expiration of the time limited for its continuance 440 
 
 for neglect or abuse of powers 441, 442 
 
 mode of proceeding in such cases 443, 444 
 
 by the voluntary act of members 445 
 
 by the voluntary surrender of the franchise 446 
 
 under statutes for winding up of corporations 447, 448 
 
 by the death of all the members 439 
 
 effect of, at common law 450 
 
 upon creditors 451 
 
 for forfeiture, not the subject of collateral inquiry 452 
 
 when the corporate existence may be inquired into collaterally. . . 453 
 DOMAIN (see Eminent Domain) : 
 
 eminent, what is 398 
 
 how right can be enjoyed 399 
 
 authority of legislature to grant 400 
 
 what public uses justify it 401 
 
 who to determine the question of public use 402 
 
 limit of the rigiit of 403 
 
 extent of right 404, 405 
 
 amount or quantity of land to be taken 404 
 
 where, under general laws, a corporation takes more land than 
 
 required 406 
 
 compensation in case of 407, 408 
 
 damages, mode of estimating 409 
 
 elements of 410 
 
 where lands are damaged but not taken 411 
 
 E. 
 
 ELECTIONS (see Corporate Meetings ; Stock) : 
 
 members' right to vote at 58-61 
 
 of members and corporate officers 53
 
 812 Index. 
 
 ELE CTIONS — (Continued). Sec. 
 
 members' right to vote at 199 
 
 how the will of the corporation is expressed at 199 
 
 notice of 200 
 
 common-law doctrine in reference to 201 
 
 rights of pledgee and jiledgor at 206 
 
 of corporation cannot be held outside the state where it is created, 216 
 
 jurisdiction of courts of equity to restrain 218 
 
 EMINENT DOMAIN (see Domain) : 
 
 what it is, right of 398 
 
 how it can be enjoyed 399 
 
 authority to grant rights of, vested in the legislature 400 
 
 what are public uses which justify the exercise of it 401 
 
 who is to determine the question of public use 402 
 
 limit of the right of 403 
 
 who to determine in reference to the extent of the right 404 
 
 amount or quantity to be taken '. 404 
 
 where the corporation takes more than is required 404, 406 
 
 compensation in case of exercising 407, 408 
 
 damages 409 
 
 mode of estimating 409 
 
 elements of 410 
 
 lands injured by, but not taken 411 
 
 EQUITY (see Suits in Equity ; Injunction) : 
 
 suits in, by and against corporations 857 
 
 remedies of various parties in 358 
 
 in, against directors 359-363 
 
 stockholders' rights in, for misappropriation of corporate funds. . 365 
 
 doctrine as to proper parties in suits in 367-369 
 
 where an injunction will be granted in 370 
 
 not be granted 371 
 
 suits in, for specific performance 372 
 
 ESTOPPEL: 
 
 doctrine of, in case of party dealing with a corporation 348 
 
 when the corporation denies its corporate existence 349 
 
 corporate records an 354, 855 
 
 EVIDENCE: 
 
 of incorporation 29 
 
 in qvx) warranto 421 
 
 in mandamus 457, 465, 466 
 
 estoppel, in case of a party dealing with corporations 348 
 
 corporation denying its existence 349 
 
 corporate records as 354, 355 
 
 EXECUTION (see Process) : 
 
 common-law doctrine in reference to 373
 
 Index. 813 
 
 EXECUTION — (Continued). Sec. 
 
 where the state provides for a sale of the corporate franchise on . . 374 
 
 subjection of stocks to, doctrine 375 
 
 statutory provisions for the garnishment of interests of stock- 
 holders 376 
 
 where returned unsatisfied — appointment of a receiver, when. . . . 377 
 
 where returned unsatisfied, creditor's right to receive 378, 379 
 
 unsatisfied, rights and duties of a receiver 381 
 
 EXEMPTION : 
 
 of corporate property from taxation 472 
 
 statutes sustained by the current of -legal decisions 473 
 
 compensation in lieu of corporate taxation 473 
 
 contract for, apparently against public policy 473 
 
 many respectable authorities and protests against the doctrine of. 473 
 dissenting opinions of the supreme court of the U. S. against the 
 
 policy 473 
 
 doctrine sustaining in case of corporate contracts, not likely to be 
 
 extended 474 
 
 recent decision of the supreme court of the U. S. relating to . 474, 475 
 
 of U. S. stocks, etc 476 
 
 under the national banking law 477 
 
 provisions of the banking act of U. S 477 
 
 decisions relating to, under U. S. banking act 477 
 
 F 
 
 FIDUCIARY CHARACTER (see Directors ; Suits in Equity) : 
 
 of directors 154 
 
 FORFEITURE (see Stock ; Stockholders ; Members) : 
 
 of corporate rights, not usually the subject of collateral inquiry . . 452 
 
 453 
 of stock in corporations 85 
 
 FRAUD (see Stockholders ; Directors ; Suits in Equity ; Torts ; 
 Negligence) : 
 
 in relation to subscriptions 78 
 
 in issuing stock certificates 95 
 
 liability of corporations for 281-283 
 
 for frauds of agents 286 
 
 particular acts of fraud 290 
 
 loss occasioned by 291 
 
 where they enjoy the benefit of contracts secured by 292 
 
 right to repudiate contract for, limited to original parties 294 
 
 ratification of contract secured by , 295
 
 814 Index. 
 
 G. 
 
 GROSS NEGLIGENCE (see Torts ; Negligence) : Sec. 
 
 which authorizes exemplary damages 317 
 
 I. 
 
 INJUNCTION (see Suits in Equity ; Equity) : 
 
 an effectual remedy to restrain the unlawful acts of agents. , n. 1, 159 
 
 shareholders' right to, against directors 360 
 
 as a remedy for stockholders, to prevent directors from divest- 
 ing the corporation of its funds 364 
 
 to prevent a violation of the corporate franchise 364 
 
 to act ultra vires 366 
 
 where it will be granted 370 
 
 not be granted 371 
 
 INJURY (see Negligence ; Fraud ; Torts) : 
 
 by agent, liability of corporations for 480-516 
 
 INSURANCE : 
 
 companies cannot engage in banking 47 
 
 are limited to business for which they were incorporated 47 
 
 J. 
 JUDGMENT : 
 
 in proceedings by quo warranto 432 
 
 JUDGMENT CREDITOR (see Receiver ; Execution) : 
 
 his right to a receiver 378-381 
 
 L. 
 
 LAW (see Suits at Law) : 
 
 suits at 325-356 
 
 LEGISLATURE (see Corporations ; Private Corporations ; 
 Charter) : 
 
 power of, to regulate charges of railroads 31-39 
 
 reservation of power in. . . . 39 
 
 rights to resume grants, based upon abuse of franchise 40 
 
 power of, cannot be exhausted 41 
 
 general statutes, reserving power of 43 
 
 power of, to amend charters 43 
 
 to repeal charters 44 
 
 reserved power iu, to dissolve corporations 437 
 
 where it is subject to a condition 439 
 
 LEGISLATIVE CONTROL (see Private Corporations) : 
 
 over public corporations 28 
 
 private 39
 
 Index. 815 
 
 LEGISLATIVE CONTROL — (Continued). Sec. 
 
 power of legislature to regulate charges of railroad and rights of 
 public interest 31-39 
 
 LIENS (see Liens on Corporate Property ; Priority op Liens) : 
 
 of the corporation on stock 122 
 
 of corporate mortgages and bonds secured thereby 424 
 
 on corporate property, can they be given on property thereafter to 
 
 be acquired ? 425 
 
 what may be conveyed by corporate mortgages 426 
 
 rolling stock, how considered as subject to 427 
 
 of mechanics' and constructors' ... 429 
 
 priority between a mortgage and a mechanic's or contractor's, 432-435 
 
 provisions of statutes in reference to 424, 425 
 
 as an expedient for raising money 424 
 
 practice of issuing preferred stock in lieu of 424 
 
 corporations may mortgage property thereafter to be acquired. . . . 425 
 
 by mortgage, what liens created by 426 
 
 on rolling stock, character of, and how liens created on .... 427, 428 
 
 M. 
 
 MANAGEMENT (see Members ; Corporate Meetings) : 
 
 by directors 57 
 
 MANDAMUS (see Suits at Law ; Writ ; Remedy) : 
 
 the writ and its functions 454 
 
 in this country 455 
 
 when issued 456 
 
 in the discretion of the court 456 
 
 practice and proceedings in case of 457 
 
 office of 458 
 
 to compel the performance of duty 458 
 
 corporations and officers to 458 
 
 when proceedings have been commenced in equity for the same 
 
 purpose 458 
 
 will not issue where the duty cannot be performed 458 
 
 the party will be thereby involved in doubtful litigation, 458 
 
 to control a discretion 458 
 
 instances where it would be a proper remedy 458 
 
 concurrence of facts necessary to authorize it 459 
 
 when it will not be issued 460 
 
 resemblance and distinction between, and injunction 461 
 
 the right arm of law ^ 461 
 
 against private corporations and officers 462 
 
 to compel the keeping of a register of the names of stockholders . . 462 
 the admission of a director 462
 
 816 Index. 
 
 MANDAMUS — (Continued). Sec. 
 
 to compel the admission of members to privileges of 463 
 
 the performance of any specific duty 463 
 
 corporations may invoke its aid 463 
 
 to compel supervisors to subscribe for stock in a railroad corpora- 
 tion 463 
 
 to issue county bonds, as required by law 463 
 
 the return of bonds unlawfully issued 463 
 
 commissioners of lands to issue certificates 463 
 
 county officers to levy a tax 463 
 
 inspection or delivery of corporate books or papers 464 
 
 will not be granted except for beneficial purposes 464 
 
 against an officer, no excuse that he purchased the books 464 
 
 as a remedy against railroad corporations 465 
 
 to compel railroad corporations to transport passengers to a 
 
 particular terminus 465 
 
 in various cases 465 
 
 writ, to whom it should be directed 466 
 
 common-law doctrine as to sei-vice 466 
 
 services regulated by statute 466 
 
 MAXIMS: 
 
 lex sempei' debet remedium 825 
 
 ubi jus ibi remedium 825 
 
 executio est finis etfructus legis 373 
 
 quifacit per aliumfacit per se 482 
 
 applicable to corporate agent 482 
 
 illustration of 481 
 
 sic utere tuo ut alienum non Icedas 507 
 
 damnum absque injuria 507 
 
 MEMBERSHIP (see Stock ; Stockholdeks ; Meetings) : 
 
 under general statutes 57 
 
 MECHANICS (see Liens) : 
 
 and constructors' liens 429, 430 
 
 priority between, and mortgages 431 
 
 MEETINGS (sec Corpokate Meetings) : 
 
 corporate, how will of the members of, is expressed 199 
 
 notice of 200 
 
 common-law doctrine relating to 201 
 
 waiver of 202 
 
 presumption of , 203 
 
 adjourned 203 
 
 general and special 204 
 
 majority at, may express the corporate will 205 
 
 right of pledgee or trustee to vote at 206
 
 Index. 817 
 
 MEETINGS — (.Continued). Sec. 
 
 of directors 207 
 
 irregular, may be valid 208 
 
 can they only act as a board? 209, 210 
 
 what constitutes a quorum at 211, 213, 213 
 
 powers of directors at 214 
 
 mode of expressing their assent at 215 
 
 corporate cannot be held outside the state where created 216 
 
 of directors may be held outside the state where the coi-poration 
 
 was created 216 
 
 jurisdiction of courts of equity to restrain 217 
 
 MEMBERS (see Stockholders; Corporations; Private Corpora- 
 tions) : 
 
 under general statutes 56 
 
 stockholders in joint-stock corporations are 58 
 
 right to vote , 58 
 
 by proxy 62 
 
 the state may constitute a member 52 
 
 admission and election of members and officers 53 
 
 disfranchisement and expulsion of , 54 
 
 MORTAGE (see Liens) : 
 
 corporate to secure bonds 424 
 
 on property thereafter to be acquired 425 
 
 what may be conveyed by 426 
 
 how rolling stock is to be treated in reference to 427 
 
 priority between, and mechanics and constructors 229 
 
 MUNICIPAL SUBSCRIPTIONS (see Taxation) : 
 
 iu aid of corporate enterprises 
 
 NAME (see Corporations) : 
 
 corporations should have 19 
 
 NEGLIGENCE (see Torts ; Private Corporations ; Railroad Cor- 
 porations) : 
 
 corporate liability for 480 
 
 wrongful acts of 480 
 
 corporate liability for agents' assault 481 
 
 battery 481 
 
 maxim quifacit per alium facit per se considered 482 
 
 liability of principal for acts of, within the scope of agent's author- 
 ity 482 
 
 maxim illustrated 483-486 
 
 real test of liability for 487 
 
 implied powers of agent in case of 488 
 
 ^ 103
 
 818 Index. 
 
 NEGLIGENCE — (Continued). Sec. 
 
 not necessary that the agent should have acted under directions . . 488 
 liability for, if the agent acted within the scope of the authority 
 
 conferred 488 
 
 matters to be considered in case of, whether the act is within the 
 
 scope of agent's authority 489 
 
 liability of contractors and contractees in case of 490 
 
 corporate liability in case of a nuisance, when liable 491 
 
 corporations bound to same care as natural persons 4!;2 
 
 railroad corporations not insurers against all casualties 493 
 
 care required of railroad corporations to exempt from negligence 
 on account of injuries from defects in engines, cars, track, etc. 495 
 
 are bound to keep stations and premises in good repair 496 
 
 instances where the corporation was held liable 497 
 
 duty of railroad corporations, in order to avoid liability for 497 
 
 duty in relation to the stopping of trains 499 
 
 to allow a reasonable time for passengers to leave cars at 
 
 stations . . .' 499 
 
 railroad liability, for injuries received in getting on train 499 
 
 in not affording reasonable accommodations 500 
 
 in case of contributory negligence 500 
 
 duty to passengers 501 
 
 implied obligations of . . 501 
 
 liability for willful wrongs of agents 503 
 
 for insults inflicted 503 
 
 delay in running trains 504 
 
 in constructing or repairing road 505 
 
 nuisances 505 
 
 defects of engines and machinery by which injury is sus- 
 tained 506 
 
 application of the maxim, sic titere tuo tit allenum non Icedas, in 
 
 case of 507 
 
 contributory, cases relating to , 508 
 
 consequential damages resulting from 509 
 
 in railroad corporations, in the running of the trains. . 510 
 
 in case of injury to persons trespassing upon railroad tracks 511 
 
 children » 512 
 
 animals 513 
 
 in various other cases 515 
 
 NOTICE (see Cokporate Meetings) : 
 
 of meetings to be given members 200 
 
 when required to be given personally 200 
 
 note not required, when the time and place of, is fixed by the 
 
 constating instruments 200 
 
 by-laws void, when repugnant to the fundamental law . , 200
 
 Index. 819 
 
 NOTICE — (Continued). Sec. 
 
 absence of members from liome no excuse of notice n. 4, 200 
 
 common-law doctrine relating to ... . 201 
 
 in absence of regulation by the constating instruments as to time, 
 
 it should be reasonable 201 
 
 not required where the meetings are stated and general n. 5, 201 
 
 should state the time and place of 201 
 
 waiver of 202 
 
 when presumed n. 2, 202 
 
 presumed by attendance of all 202 
 
 conferred by by-laws 279 
 
 distinction between those made by the corporation and those 
 
 mad« by directors 279 
 
 NON-USER (see Quo Waukanto; Dissolution): 
 
 as a ground of forfeiture of corporate rights 419 
 
 o. 
 
 OFFICERS (see Agents; Dikectors; Corporations; Private Cor- 
 porations) : 
 
 implied jjowers by virtue of the office 170 
 
 of a president 170 
 
 cashier 170 
 
 contracts of, ultra vires, when void 179, 180 
 
 distinction between executed and unexecuted contracts in this 
 
 respect 174 
 
 P. 
 
 PARTIES: 
 
 to a suit at law 345 
 
 PARTNERSHIPS: 
 
 distinction between, and corporate associations 48 
 
 PARTNERS: 
 
 each generally liable for partnership obligations 48 
 
 are agents for the partnership 48 
 
 distinction between, and corporators 48 
 
 PASSENGERS (see Nkgligknce) : 
 
 duty of 501 
 
 PERPETUAL SUCCESSION (see Corporations) : 
 
 incident to corporations 50-53 
 
 not strictly immortal 50 
 
 duration generally limited 50 
 
 continuance of legal identity 51 
 
 benefits of 52 
 
 members may change but the corporate identity remains 63 
 
 advantages of, in various entenir^ses 53
 
 820 Index. 
 
 PERSONAL LIABILITY (see Stockholders; Members; Agents; 
 
 DiKEOTORS): Sec, 
 
 of stockholders under statutes 63 
 
 in equity to creditors 129. 
 
 of directors, where there is want of good faith 152, 153 
 
 wliere there is abuse of discretion n, 1, 1 52 
 
 for permitting false statements 150 
 
 for want of diligence and prudence 153 
 
 where they purposely injure the interests of the corporation . . .notes, 153 
 
 where they act without authority 153 
 
 for property of the corporation acquired to the prejudice of stock- 
 holders or creditors 154 
 
 for the proceeds of stock wrongfully sold, and received by them. 154 
 
 to creditors, for dividends received by them notes, 154 
 
 for any fraudulent or wrongful appropriation of corporate funds 
 
 or property 155 
 
 for giving away corporate funds or property 155 
 
 for disposing of the stock of the corj^oration at a less sum than 
 
 fixed by the charter 155^ 
 
 or in a manner contrary to tlie provisions of the charter 155 
 
 where they disregard by-laws 155 
 
 where they manage the affairs of the corporation for their personal 
 
 benefit 156 
 
 as trustees, for funds or property notes, 157 
 
 in case of misrepresentation of their authority 192 
 
 PLAINTIFF (see Suits at Law; Suits in Equity; Injunction; Quo 
 Warranto; Mandamus): 
 
 in suits against the corporation, may be a member 367 
 
 may be a stockholder or creditor 367 
 
 PLEADINGS (see Suits at Law ; Suits in Equity ; Mandamus) : 
 
 in suits at law 347 
 
 in quo warranto 421 
 
 in mandaimis 457 
 
 PRACTICE (see Quo Warranto ; Mandamus) : 
 
 in proceedings by quo warranto 421 
 
 mandamus 457 
 
 PRESIDENT (see Officers; Agents): 
 
 powers of 170, and notes, 171 
 
 PRIORITY (see Liens) : 
 
 between mortgage and mechanics' and contractors' liens 229 
 
 PRIVATE CORPORATIONS (see Corporations; Railroad Corpora- 
 tions) : 
 
 distinction between, and public ^» ^^
 
 Index. 821 
 
 PRIVATE CORPORATIONS — (Continued). Sec. 
 
 charter of, a contract 3 
 
 history of 5 
 
 variety and importance of modern 5 
 
 objects embraced in 5 
 
 nature and character of 30-48 
 
 distinction between, and public corporations 30 
 
 legislative control over, doctrine of 32 
 
 immunity of corporate contract does not exempt property of, from 
 
 legislative control 33 
 
 power of legislature to regulate charges of railroads 34 
 
 grant of franchises to, does not prevent future grants 38 
 
 construction of charters of 38 
 
 charters of, reserved power to amend, alter or repeal 39, 42, 45 
 
 in case of mis-use or abuse of 40 
 
 cannot be exhausted 41 
 
 under general statutes 42 
 
 implied jjowers conferred by 45 
 
 powers conferred or limited by statutes 46 
 
 limited by the object of the grant 47 
 
 distinction between, and copartnership associations 48 
 
 composition of 51 
 
 government may constitute a member of 52 
 
 admission and election of members of 53 
 
 disfranchisement and expulsion of members of 54 
 
 membership of, under general statutes 56 
 
 management of, by directors 57 
 
 shareholders of, are members of 58 
 
 right to vote 58 
 
 by proxy 61 
 
 what they are presumed to know 63 
 
 personal liability of, under statutes 63 
 
 general liability of, on subscriptions 66 
 
 liability under the constating instruments 68 
 
 on conditional subscriptions 70 
 
 stockholders, conditional subscriptions, waiver of 72 
 
 when void 73 
 
 when the whole contract is void 74 
 
 subscriptions in contemplation of incorporation 77 
 
 fraud in relation to 78 
 
 as affected by statutes or constating instruments 79 
 
 defense to claim for 80 
 
 assessments and calls for 83 
 
 stock, forfeiture of 85
 
 822 Index. 
 
 PRIVATE CORPORATIONS— (Gout) nued). Sec. 
 
 stockholders, stock, assessments of 86 
 
 notice of assessments of 90 
 
 sufficiency of 91 
 
 dividends, right to 93 
 
 may sue for 95 
 
 stock in trust , 96 
 
 right to sell and assign shares 98 
 
 liability of assignee to corporation ,■ 101 
 
 purcliaser from trustee 103 
 
 right to vote 105 
 
 liability in equity to creditors ^ 129 
 
 right to access to books 106 
 
 of action against the corporation 127 
 
 preferred stock, rights of holders of 107 
 
 when it can be issued 108 
 
 dividends on ^ 108 
 
 scrip and preliminary subscriptions 109 
 
 stock of, defined 110 
 
 issuing certificates of shares of „ Ill 
 
 fraud in 113 
 
 shares, and income of , 114 
 
 character and quality of ... 114 
 
 transfer of 118 
 
 transfer refused by company 120 
 
 liens of corporation on 123 
 
 corporation may be compelled to transfer on the books. . 125 
 
 overissued and watered 130 
 
 liability for torts, when 281-285 
 
 frauds 286 
 
 of agents 288 
 
 particular acts of 290 
 
 where it is cause of injury 291 
 
 in case of fraudulent act of an agent, they accept the con- 
 tract thereby secured 292, 486 
 
 torts, real test of 487, 488 
 
 of agents, implied powers of 488 
 
 matters to be considered in 488 
 
 whether the act is within the scope of authority 488 
 
 of contractors 489 
 
 nuisances 491 
 
 negligence 492 
 
 not insurers against all casualties. 493 
 
 relating to engines, cars, etc 494
 
 Index. 823 
 
 PRIVATE CORPORATIONS — (Continued). * Sec. 
 
 liability for negligence in case of injury received in getting 
 
 on and off a train , 499 
 
 negligence, railroad, duty to furnish reasonable accommodations. 500 
 
 of passengers 501, 503 
 
 liability for wrongs generally 503 
 
 of railroads for delays 504 
 
 in construction of road 505 
 
 repairing of ; 505 
 
 nuisances 505 
 
 defects in engine and machinery , 506 
 
 application of maxim sic utere tuo, etc., to case of 507 
 
 application of doctrine of contributory negligence in case of 508 
 
 for consequential damages 509 
 
 in running trains 510 
 
 liability in case of injury to trespassers upon the track 511 
 
 children 512 
 
 animals 513 
 
 in other cases 515 
 
 PROCESS (see Suits at Law ; Suits in Equity ; Injunction ; Execu- 
 tion ; Mandamus) : 
 against coi'porations, general principles relating to 346 
 
 PROOF (see Evidence ; By-Laws ; Corporate Seal) : 
 
 of corporation 352 
 
 corporate records 354 
 
 PUBLIC CORPORATIONS : 
 
 distinction between, and private 3, 30 
 
 charter of, no contract with the state 3 
 
 legislative control of 31 
 
 instituted without consent of members 30 
 
 powers confeiTcd upon, are not vested rights as against the state. . 31 
 laws which establish, are not contracts but ordinary acts of legis- 
 lation 31 
 
 PUBLIC USE (see Eminent Domain) : 
 
 what is, in case of eminent domain 441 
 
 who to determine the question in case of the exercise of the right 
 of eminent domain 442 
 
 Q. 
 
 QUASI CORPORATIONS (see Corporations) : 
 
 provisions in reference to 4 
 
 condition to exempt members 4 
 
 QUO WARRANTO (see Dissolution) : 
 
 writ of, at common law 443
 
 g2'4 Index. 
 
 QUO WARRANTO — (Continued). Sec. 
 
 proceedings in the nature of 413 
 
 remedy regulated by constitutions and statutes 414 
 
 as a remedy against private corporations 415 
 
 for non-user and mis-user of the franchises 416 
 
 in case of unlawful usurpation of an office in a private corpo- 
 ration 417 
 
 possession and user of an office essential 418 
 
 on the ground of forfeiture 419 
 
 in case of the destruction of the objects of a corporation 420 
 
 pleadings and evidence 421 
 
 judgment in case of 422 
 
 R. 
 
 RAILROAD CORPORATIONS (see Cokporations ; Torts ; Negli- 
 gence ; Contracts ; Agents) : 
 
 negligence, general doctrine of liability for. .- 480 
 
 of servants , 480 
 
 illustration of doctrine 481 
 
 maxim relating to 482 
 
 illustration of 483-487 
 
 real test of liability for 487 
 
 implied powers of agents in case of 488 
 
 matters to be considered in determining liability for 489 
 
 of contractors 490 
 
 of contractees 490 
 
 liability for nuisances, when 491 
 
 bound to same degree of care as natural persons 492 
 
 degree of care required of them 492 
 
 not insurers against all casualties 493 
 
 care required of them, relating to engines, cars, tracks, etc 494 
 
 instances of negligence, where held liable 495 
 
 duty of 496 
 
 when liable for injuries in getting on the train of 499 
 
 duty of, as to accommodations 500 
 
 liability, as affected by contributory negligence 500 
 
 duty to passengers 501 
 
 liability for willful wrongs of agents 503 
 
 duty in relation to the running of trains 504 
 
 liability for delay in 505 
 
 negligence in constructing road 506 
 
 repairing 506 
 
 defects in engines and machinery 506 
 
 application of the maxim sic utero tuo ut alienum non loRdas, to. 507 
 
 as afiected by contributory negligence 508
 
 Index. 825 
 
 RAILROAD CORPORATIONS — (Continued). Sec. 
 
 liability for consequential damages 509 
 
 for injuries iu the running of trains 510 
 
 in case of injuries resulting to trespassers ujjon the track .... 511 
 
 injuries to children 513 
 
 animals 513 
 
 for torts of servants in other cases 515 
 
 RECEIVER (see Execution) : 
 
 ■when appointed 377 
 
 duty on appointment 377 
 
 judgment creditor's right to, when 378 
 
 general right to, of judgment creditors 379 
 
 where an execution is returned unsatisfied 380 
 
 functions, powers, and duties of 381 
 
 REMEDY (see Suits at Law ; Suits in Equity ; Injunction ; Man- 
 damus) : 
 
 at law, by and against corporations and others 325-356 
 
 in equity 357-373 
 
 general principles relating to 357 
 
 against corporations 357 
 
 by and against various parties 358 
 
 directors 359 
 
 at law 325-356 
 
 in equity 356, 357-373 
 
 of various parties 358 
 
 against stockholders in equity 363 
 
 of stockholders to restrain acts vXtra vires 364 
 
 of creditors in eqviity for misappropriation of corporate funds .... 365 
 
 where an injunction will be granted 370 
 
 not be granted 371 
 
 specific performance : 373 
 
 by injunction 364 
 
 to restrain unlawful acts of directors 364, 365 
 
 in equity against directors 
 
 of stockholders 364 
 
 of creditors for misapplication of corporate funds 365 
 
 for unpaid subscriptions 366 
 
 where an injunction will be granted 370 
 
 not be granted 371 
 
 for si^ecific performance of a contract for a right of way 373 
 
 receiver, right of creditor to 378 
 
 by execution 373-377 
 
 where more land is taken under right of eminent domain than 
 
 is necessary 406 
 
 104
 
 826 Index. 
 
 REMEDY — (Continued). Sec. 
 
 by quo warranto 412-423 
 
 proceedings in the nature of 411 
 
 regulated by law 412 
 
 against private corporations 415 
 
 for mis-user and non-user of the franchises 416 
 
 for unlawful usurpation of an oflBce in a private corpora- 
 tion 417 
 
 possession of the assumed office essential 418 
 
 non-user as a ground of forfeiture 419 
 
 in case of the destruction of the objects of the corporation, 420 
 
 pleadings and evidence in case of 421 
 
 judgment in case of 423 
 
 by mandamus 454 
 
 the writ and its functions 454 
 
 in this country 455 
 
 when issued 456 
 
 in the discretion of the court 456 
 
 practice and proceedings in case of 457 
 
 the writ and its functions, office of 458 
 
 to compel the performance of duty 458 
 
 corporations and officers to 458 
 
 when proceedings have been commenced in equity for 
 
 the same purpose 458 
 
 will not issue where the duty cannot be performed 458 
 
 the party will be thereby involved in doubtful liti- 
 gation 458 
 
 to control a discretion 458 
 
 instances where it would be a proper remedy 458 
 
 concurrence of facts necessary to authorize it 459 
 
 ■when it will not be issued 460 
 
 resemblance and distinction between, and injunction 461 
 
 the right arm of the law 461 
 
 against private corporations and officers 463 
 
 to comjDel the keeping of a register of the names of stockholders, 462 
 
 the admission of a director ... 462 
 
 the admission of a member to the privileges of 462 
 
 the performance of any specific duty 462 
 
 corporations may invoke its aid 463 
 
 to compel supervisors to subscribe for stock in a railroad cor- 
 poration 463 
 
 to issue county bonds, as required by law 463 
 
 the return of bonds unlawfully issued 463 
 
 ^ commissioners of lands to issue certificates 463 
 
 county officers to levy a tax , 463
 
 Index. 827 
 
 REMEDY — (Continued). Sec. 
 
 by mandamus, to compel inspection or delivery of corporate books 
 
 or papers 464 
 
 will not be granted except for beneficial purposes 464 
 
 against an officer, no excuse that he purchased the books 464 
 
 as a remedy against railroad corporations 465 
 
 to compel railroad corporations to transport passengers 
 
 to a particular terminus 465 
 
 in various cases 465 
 
 writ, to whom it should be directed 466 
 
 common-law doctrine as to service 466 
 
 service regulated by statute 466 
 
 RESERVATIOIST (see Private Cobporations ; Taxation) : 
 
 of the powers of the legislature in resjject to corporate grants .... 39 
 
 power cannot be exhausted 41 
 
 general statutes of 42 
 
 of right to amend charter 43 
 
 general laws relating to 44 
 
 RESERVED POWER (see Corporation; Charters; Dissolution): 
 
 in the legislature to alter or amend charters 89-40 
 
 resume 42^4 
 
 dissolve 437 
 
 RIGHT OF WAY (see Suits in Equity) : 
 
 where specific performance of contract for, may be enforced in 
 equity 372 
 
 ROLLING STOCK: 
 
 what is 427 
 
 character and quality of 427-429 
 
 how considered, as to mortgage liens 424-427 
 
 S. 
 
 SEAL (see Corporate Seal ; Contracts) : 
 
 corporate, definition and history of 244 
 
 private history of 245 
 
 how it came into use 246 
 
 corporate, incident Of a corporation 247 
 
 former doctrine relating to 248 
 
 origin of the law relating to 249 
 
 present doctrine , . 251 
 
 what is 254 
 
 by whom it should be affixed 256 
 
 where an acknowledgment is required 257 
 
 doctrine as to, in the appointment of agents 258
 
 828 Index. 
 
 SEAL — (Continued). Sec. 
 
 corporate authority may be conferred without 259 
 
 as evidence 260 
 
 not necessary in the appointment of agents 258, 259 
 
 SERVANTS (see Agents; Officebs; Negligence; Tobts; Con- 
 tracts) : 
 liability of corporations in case of negligence of 480-615 
 
 SHARES. (See Stock; Shabeholders ; Private Cobpoeations.) 
 SHAREHOLDERS (see Stockholders ; Membebs) : 
 
 are members ; right to vote 58-61 
 
 SOLE CORPORATION (see Cobpobations ; Definitions) : 
 
 description of 2 
 
 the king is 2 
 
 an English invention 2 
 
 SPECIFIC PERFORMANCE (see Suits in Equity) : 
 
 in case of a contract for a right of vray -. 372 
 
 STOCK (see Corporations; Private Corporations; Stockholders): 
 
 ownership of, constitutes membership 58 
 
 right to vote 58 
 
 by proxy 63 
 
 forfeiture of 85 
 
 assessments of 82, 86 
 
 notice of 90 
 
 sufficiency of 91 
 
 dividends, owners' right to 92 
 
 may sue for 95 
 
 on, in trust 96 
 
 right to sell and assign shares 98 
 
 liability of assignee of, to the corporation 101. 
 
 purchase from a trustee 102 
 
 owners in equity to creditors 129 
 
 preferred, rights of holders of 107 
 
 when it can be issued 108 
 
 dividends on 108 
 
 defined 110 
 
 certificates of shares of 111 
 
 of, fraud in issuing 113 
 
 income of 114 
 
 character and quality of 114 
 
 transfer of, and how made 118 
 
 remedy where the corporation refuses to transfer 120, 125 
 
 liens of corporation on 122 
 
 when subject to attachment against an assignor 126
 
 Inbrx. 829 
 
 STOCK — (Continued). Sec. 
 
 overissued and watered 130 
 
 by-laws regulating transfer of 275, 276 
 
 providing for a corporate lien on 277, 278 
 
 STOCKHOLDERS (see Stock Corpouations ; Private Corpora- 
 tions) : 
 
 generally no personal liability of ^,. 48 
 
 liable on obligations to the corporation 48, 66 
 
 distinction between, and partners 48 
 
 are members of the corporation 58 
 
 right to vote 58 
 
 by proxy 61 
 
 what they are presumed to know , . 63 
 
 personal liability of, under statutes 63 
 
 general liability of, on subscriptions 66 
 
 liability under statutes and constating instruments 67 
 
 on conditional subscriptions 67-76 
 
 where the condition is waived 73 
 
 void 73, 74 
 
 on subscriptions in contemplation of incorporation 77 
 
 subscriptions of, obtained by fraud, generally void 78 
 
 as affected by statutes or constating instruments 79 
 
 cases where defense to, may be made 80 
 
 assessments on and calls for 86-91 
 
 stock, when it may be forfeited 85 
 
 notice of assessment of 90 
 
 sufficiency of 91 
 
 dividends, his right to them 92 
 
 may sue for 95 
 
 on stock held in trust 96 
 
 right to sell and assign shares 98 
 
 liability of assignee to the corporation 101 
 
 to the cestui que trust 102-1 04 
 
 right to vote at corporate meetings 105 
 
 when liable in equity to creditors 129 
 
 right of access to books 106 
 
 action against the corporation when 127 
 
 preferred stock, rights of 107 
 
 when it may be issued 108 
 
 dividends on 108 
 
 scrip and preliminary subscriptions 109 
 
 rights in equity 355 
 
 may restrain by injunction unlawful acts of directors 360-363 
 
 may commence action for himself and others having a common 
 
 interest .... 360 
 
 rights of, in equity, where the corporation refuses to sue 360
 
 830 Indkx. 
 
 STOCKHOLDERS — (Continued). _ Sec. 
 
 rights against rlie illegal acts of other stockholders 361 
 
 to prevent acts ultra vires notes, 361 
 
 shares and income, character and quality of 114 
 
 certificates, transfer of, how made 118 
 
 ■when refused on the books of the corporation 120 
 
 when the corporation may be compelled to transfer 125 
 
 of overissued and watered stock 130 
 
 lien of the corporation on their stock 122 
 
 stock when subject to attachment or execution against the assignor, 126 
 
 right of action against the corporation 127 
 
 injunction may restrain unlawful disposition of the fimds by 
 
 directors 364 
 
 may enjoin a violation of the corporate franchise 364 
 
 liability in equity for dividends received on shares, where cred- 
 itors remain unpaid 365 
 
 in such cases may be compelled to pay pro raSa ». 365 
 
 right of, to restrain directors from acts ^dtra vires 366 
 
 the corporation 366 
 
 change of the business 366 
 
 SUCCESSION (see Perpetual Succession) : 
 
 consideration of ' 49, 50 
 
 SUITS AT LAW (see Suits in Equity; Mandamus; Quo Warranto): 
 
 right of a corporation to sue 325 
 
 liability to be sued 325 
 
 corporation liable to be sued by members. 327, 328 
 
 where suit may be brought . . . , 329 
 
 in case of foreign corporations, not citizens 330 
 
 when they may be brought in the federal courts 334 
 
 corporation may be an alien under the judiciary act 335 
 
 a citizen under the U. S. constitution 336, 337 
 
 and under act of congress for the removal of causes . . 338-342 
 rights of corporations in case of, under the national banking law, 
 
 342-344 
 
 parties to suit 345 
 
 process in 346 
 
 pleadings in 347 
 
 general denial, effect of 351 
 
 in, when corporation is estopped to deny its existence 349 
 
 when party dealing with the corporation is 348 
 
 SUITS IN EQUITY (see Injunction): 
 
 by and against corporations 357 
 
 remedies of various parties in .' 358 
 
 against directors 359- 863 
 
 stockholders' liability in 363
 
 Index. 831 
 
 SUITS IN EQUITY — (Continued). Seo. 
 
 stockholders' rights to restrain contracts ultra vires 804 
 
 creditors' rights in, for misappropriation of corporate funds. 3G5, 366 
 
 doctrine as to parties in , 367-3G9 
 
 where an injunction will be granted 370 
 
 not be granted 371 
 
 for specific performance, right of way 373 
 
 T. 
 
 TAXATION: 
 
 defined, necessity of 467 
 
 should be equally imposed 468 
 
 difficulty of, attending railroad property 469 
 
 statutes regulating 470, 471 
 
 what corporate property is taxable ; double taxation 473 
 
 corporate property and interest subject to 473 
 
 exempt from 473 
 
 exemption statutes sustained . 474 
 
 compensation paid in lieu of 474 
 
 where a sum is agreed upon in lieu of 474 
 
 the right to, cannot with safety be contracted away 474 
 
 but the current of judicial decisions sustains the right to contract 
 
 in reference to 474 
 
 the right of the legislature to contract for exemption from, danger- 
 ous to the government 474 
 
 exemptions from, indications that the doctrine will not be ex- 
 tended 475 
 
 recent doctrine of the supreme court of the United States 
 
 on the subject 475 
 
 where corporate property is used in diflferent states 476 
 
 exemption of U. S. stocks from 477 
 
 from, under the national banking law 478 
 
 on account of municipal subscriptions to corporate enterprises. .. . 479 
 TELLER (see Officers) : 
 
 of a bank, authority of notes, 171 
 
 may receive deposits 171 
 
 authority to certify deposits and checks 171 
 
 paying, of a bank, authority to certify to checks notes, 170 
 
 TORTS (see Negligence ; Damages ; Railroad Corpokations ; 
 Fraud) : 
 
 corporate liability for 281 
 
 general principles relating to 281, 283 
 
 of corporations, when liable for 283 
 
 may do wrongful acts, or cause them to be done 285
 
 832 Index. 
 
 TORTS — (Continued). Sec. 
 
 of corporations, frauds of, or their agents 286, 288 
 
 by agents 288 
 
 particular acts of 290 
 
 occasion of loss 291 
 
 in securing contracts 292 
 
 when responsible for, on contracts 292, 293 
 
 right to repudiate contracts for, limited to original 
 
 parties 254 
 
 ratification of contract eflEected by the fraud of the agent, 
 
 295, 296 
 
 liability for other wrongs 297 
 
 assault and battery of agents 298, 299 
 
 trespass to property 300, 301 
 
 negligence of agents 302 
 
 limitation of, in certain cases 303-307 
 
 complications arising from successive negligence . . . 307 
 
 damages in case of 311 
 
 exemplary damages in case of 313 
 
 are they applicable to ? 815 
 
 fextreme doctrine of 316 
 
 gross negligence of, and exemplary damages 317 
 
 inconsistency of the doctrine of, as applicable to 318 
 
 recent examination of tlie doctrine as applicable to 319 
 
 conflict growing out of the doctrine 323 
 
 damages against, for injuries resulting in death 323 
 
 elements of damages in such cases , 324 
 
 liability of corporation for agents 480-516 
 
 instances of 481, 515 
 
 TRAIN: 
 
 railroad, duty of corporation in reference to stopping 497, 498 
 
 liability for injuries in getting on 499 
 
 duty of passengers in reference to 501 
 
 liability for delay in running 504 
 
 injury in running 510 
 
 injury to trespassers on the tracks by 511 
 
 children 512 
 
 animals 513 
 
 TRESPASSERS (see Negligence; Touts; Contributory Negli- 
 gence) : 
 
 upon railroad tracks, how affects rights of, for injury 511 
 
 in the case of children 513 
 
 in case of animals 513 
 
 TRUSTEE (see Directors; Injunction; Suits in Equity): 
 
 directors are, of stockholders and creditors 359
 
 Index. 833 
 
 TURNPIKE CORPORATIONS: Sec. 
 
 grant to, for the construction of a road between two places, does 
 not prevent grant to other companies on different routes 38 
 
 u. 
 
 ULTRA VIRES (see Contracts; Corporate Contracts; Injunc- 
 tion ; Suits in Equity) : 
 
 doctrine of 229-241 
 
 different senses in which the term is used 230 
 
 contracts, not always void, or voidable 231-241 
 
 distinction between executed and unexecuted contracts in the ap- 
 plication of the doctrine 233, 234 
 
 when neither party can avoid the contract though 235 
 
 common principles of justice require its execution 236 
 
 form of action in case of. 237 
 
 applied to agents 238 
 
 doctrine of, in case of negotiable instruments 239 
 
 necessary or implied powers not 240 
 
 summary of the law relating to 241 
 
 w. 
 
 WRIT (see Quo Warranto ; Mandamus ; Injunction) : 
 
 of quo warranto, at common law 412 
 
 proceedings in the nature of . 413 
 
 remedy regulated by constitutions and statutes 414 
 
 as against private corporations 415 
 
 on the ground of mis-user and non-user must be clear . . 416 
 for unlawful usurpation of an office in a private corpora- 
 tion 417 
 
 on the ground of assumed office possession and user, es- 
 sential 418 
 
 non-user of the franchise as ground of forfeiture 419 
 
 on the ground of destruction of the object of the corporation. . . 420 
 
 pleadings in case of 421 
 
 judgment in case of 422 
 
 mandamus 454 
 
 its functions 454 
 
 in this country 455 
 
 when issued, discretion of the court 456 
 
 practice and proceedings in case of 457 
 
 office of the writ 458 
 
 what necessary to authorize it 459 
 
 when it will not be issued , 460 
 
 resemblance and distinction between, and injunction 461 
 
 105
 
 s34 Iptoex. 
 
 WRIT — rContlnuuflX - Sec, 
 
 ^ against private corporations and its officers 462 
 
 corporations may invoke its aid 4G3 
 
 to compel inspection of corporate books and papers 4G4 
 
 as a remedy against corporations 465 
 
 to whom directed and service 466 
 
 WRONGS (see Nkgligence ; Torts ; Fraud ; Agents) : -. 
 
 of corporation by agent, liability for 480-515 
 
 willful 503 
 
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