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A TREATISE
ON THE
MODERN LAW OF CORPORATIONS
WITH REFERENCE TO
FORMATION AND OPERATION
UNDER GENERAL LAWS
ARTHUR W-%ACHEN, Jr.
OF THE BALTIMORE BAK
IN TWO VOLUMES
Volume I.
BOSTON
LITTLE, BROWN, AND COMPANY
1908
•T '8 "a 'KOMoa "00 v i'iras«Ta 't 'a
P91U399J SfllBtU ]jy
'8061 'jhSuMoq
Onus si tantum opinione prima concipere potuissem quanta me premi
forens sentio, maturius consuluissem vires meas. Sed initio, pudor omit-
tendi quae promiseram tenuit : max, quamquam per singulas prope partes
labor cresceret, ne perderem quae jam effecta erant, per omnes difficultates
animo me sustentavi. Quare nunc quoque, licet major quam umquam moles
premat, tamen prospicienti Jiriem mihi constitutum est vel dejicere potius
quam desperare. — Quintil* De Inst. Orat., Lib. XII, prooem.
PREFACE
In these volumes I have aimed to approach the law of our
ordinary business corporations from a point of view more pecu-
liarly appropriate to companies incorporated under general
laws than has heretofore been customary. It seemed to me
desirable to reject as obsolete much of the old law of corpora-
tions formed under royal charters in England, together with
its terminology, and to treat the modem law upon a plan
which should recognize incorporation under general laws,
rather than incorporation under royal charters or under
special acts of the legislature, as the normal method of incor-
poration. In the second place, I have aimed to treat fully and,
so far as possible, exhaustively, those topics which the rapid
development of the law of incorporated companies both in
Great Britain and in the United States has but recently brought
into practical importance, and also any other topics which for
any other reason seemed to me to need fuller or further treat-
ment than is accorded in the serviceable text-books with which
American lawyers are famiUar.
Among the topics which an attempt has been made to analyze
with especial thoroughness may be mentioned the law of the
preparation, construction, and filing of incorporation papers,
the law of promoters, of underwriting agreements, the law of
preferred shares, of increase and reduction of capital, of trans-
fers of shares, of directors' and shareholders' meetings, of by-
laws, and of dividends, and many subdivisions of the law of
botids and mortgages.
I have regarded the corporation as a living organism, and
have not attempted to treat, except incidentally, those parts
of the law which relate to its death, or winding-up and disso-
lution, or those parts of the law which existing American
text-books have treated so fully and satisfactorily as to render
any other treatment both presumptuous and unnecessary.
PREFACE
The branches or sub-divisions of corporation law which have
been altogether excluded embrace (1) the entire topic of the
relation of corporations to the state or to the public, including
all questions as to the constitutional powers of the legislature
under our American state and federal constitutions in dealing
with corporations and their affairs, and also including the right
of the state, or of the attorney-general as its representative, to
interfere in corporate management by qiio warranto, scire facias,
injunction or otherwise, and also the criminal liabilities of cor-
porations and their officers, and also the topic of taxation of
corporations and corporate securities, (2) the topic of foreign
corporations, which may fairly be considered a branch of the^
subject of conflict of laws, and (3) the topic of winding-up and
dissolution and the related topics, including especially the
various statutory liabilities of shareholders and directors to
creditors, which remain dormant so long as the company is
prosperous and awake into practical importance only when
winding-up or liquidation is imminent, and also' including con-
solidation and reorganization, both of which involve, at least
in a qualified sense, a dissolution of the old corporation.
The only important exceptions to these rules of exclusion
will be found in the chapters on bonds and mortgages, in con-
nection with which it became necessary to deal with certain
branches of the law of winding-up and of reorganization.
In dealing with topics which, although within the general
scope of the work as outlined above, have yet for many years
attracted attention from American courts, lawyers, and text-
writers, I have tried to avoid useless threshing over of old straw,
and therefore have not descended into detail except where I
hoped to present some new or different aspect of the subject or
some particular novel points. To take a concrete instance, a
very large proportion of all the corpioration cases which have
been decided in this country have related to liability upon un-
paid subscriptions to capital. These numerous cases have been
carefully digested and explained in text-books with which
every lawyer is acquainted. Consequently, I have tried to
avoid mere repetition of matter which is already easily accessi-
ble to every reader; and instead, I have summarized the general
currents of authority, pointing out or emphasizing certain new
ways of looking at the subject, and elaborating fully some par-
PKEFACE
ticular points which have been heretofore overlooked or slighted
— such, for example, as the peculiarities of subscriptions to
shares entered into by signing the incorporation paper or cer-
tificate, or articles, of incorporation.
After the citation of a case, the words "headnote inadequate"
■"will not infrequently be found in parenthesis. These words
do not indicate an opinion that the case is badly reported. On
the contrary, no headnote can, consistently with that brevity
which is indispensable, call attention to all the points or fea-
tures of a case; and by using the words "headnote inade-
quate," I design simply to guard the reader against rejecting
a case as not in point merely because the headnote does not in-
dicate that the decision involves the particular proposition
for which the case is cited.
References are given to the National Reporter System, the
Lawyers' Reports Annotated, the American Reports, American
State Reports and American Decisions, as well as to the official
state reports. Wherever references are given to two or more
reports of the same case, the report which follows immediately
after the name of the case — usually, with the exception of
very recent cases, the official report — is that which I have
examined and used in the preparation of this book and to
which alone, therefore, comments with respect to the head-
note are applied.
A. W. M., Jr.
Bai/timore, June 17th, 1908.
TABLE OF CONTENTS
VOL. I
Page
Table of Cases xiii
Addenda ccxxv
CHAPTER I
Sections
1-30. Historical and Intboductort 1
CHAPTER II
31-162. The Incorporation Paper 27
CHAPTER III
I 163-260. Organization and Issue op Shares .... 144
CHAPTER IV
261-294. Irregular Incorporation — Proof of Incor-
poration 217
CHAPTER V
295-306. Incorporation for Illegal Purposes . . . 256
CHAPTER VI
307-415. Promoters 268
CHAPTER VII
416-446. Underwriting 344
CHAPTER VIII
447-468. Corporate Names 367
iz
TABLE OF CONTENTS
CHAPTER IX
Sectioits Page
469-492. CoEPOKATE Seals 389
CHAPTER X
493-573. Capital and Shakes — Classes of Shares . 410
CHAPTER XI
574-677. Increase, Reduction, and Other Modifica-
tions OF Capital 476
CHAPTER XII
678-738. Bt-laws and Internal Regulations. . . . 550
CHAPTER XIII
739-807. Payment for Shares 597
CHAPTER XIV
808-831. Forfeiture of Shares 656
CHAPTER XV
532-1011. Transfer and Transmission of Sharss . . . 671
VOL. II
CHAPTER XVI
1012-1072. Ultra Vires Contracts and Torts .... 817
CHAPTER XVII
1073-1089. One-Man Companies 871
CHAPTER XVin
1090-1117. Pdblicitt in Corporate Affairs — Inspection
of Books and Records 888
X
TABLE OP CONTENTS
CHAPTER XIX
Sections PikOE
1118-1133. Proof of Corporate Matters — Books and
Records as Evidence 911
CHAPTER XX
1134-1189. Judicial Intervention in Management of
Corporations — Shareholders' Bills . . 926
CHAPTER XXI
1190-1295. Shareholders' Meetings 988
CHAPTER XXII
1296-1315!. Powers op Majority — Relation op Share-
holders TO the Company 1075
CHAPTER XXIII
1313-1398. Dividends 1087
CHAPTER XXIV
1399-1488. Directors — Their Appointment, Qualifica-
tions, Resignation and Removal, their
Powers and the Manner op Exercise
thereof 1158
CHAPTER XXV
1489-1509. Rights and Emoluments of Directors . . 1236
CHAFrER XXVI
1510-1651. Liabilities and Disabilities of Directors . 1253
CHAPTER XXVII
1652-1673. Officers and Agents 1361
CHAPTER XXVIII
1674-1825. Bonds and Mortgages — In General . . 1384
xi
TABLE OF CONTENTS
CHAPTER XXIX
Sbctionb Pao£
1826-1958. Bonds and Mortgages {continued) — The
Secubitt 1478
CHAPTER XXX
1959-2069. Bonds and Mortgages {continued) — Enfobce-
MENT OF THE SeOUEITT 1676
CHAPTER XXXI
2070-2110. Bonds and Mortgages {continued) — Reor-
ganization— Powers of Majority — In-
come Bonds 1657
Index 1685
xn
TABLE OF CASES
[The references are to pages]
A 1 Biscuit Co., W. N. (1899)
115 1241
Aaron's Reefs v. Twiss (1896),
A. C. 273 179, 184
Aaronson v. David Meyer
Brewing Co., 26 N. Y.
Misc. 655; 56 N. Y. Supp.
387 85, 1373, 1375
Abbot V. Jewett, 25 Hun
(N. Y.) 603 1634
Abbott V. American Hard
Rubber Co., 33 Barb.
(N. Y.) 578 1188, 1306
V. Hapgood, 150 Mass.
248; 22 N. E. 907; 15
Am. St. Rep. 193; 5 L.
R. A. 586 311, 311, 311
V. Omaha Smelting Co.,
4 Nebr. 416 123, 238, 246, 251
Abby V. Billups, 35 Miss. 618;
72 Am. Dec. 143 68
Abeles v. Cochran, 22 Kans.
405 ; 31 Am. Rep. 194 517, 1354
Abercrombie v. Riddle, 3 Md.
Ch. 320 iri5, 1156
Aberdeen Ry. Co. v. Blailde, 1
Macq. H. L. 461 1179,1296,
1296, 1297, 1300, 1304, 1314
Abemethy v. Church of the
Puritans, 3 Daly (N. Y.) 1 914
Aberthaw Const. Co. v. Ran-
some, 192 Mass. 434; 78
N. E. 485 879
Abraham v. New Orleans
Brewing Ass'n, 110 La.
1012; 35 So. 268 1460, 1460
Abraham, S., & Sons (1902), 1
Ch. 695 1498
Abstainers, etc. Insurance Co.
Re (1891), 2 Ch. 124 536
Acadia Loan Corp. v. Went-
worth, 40 Nova Scotia 525 156, 170
Accidental, etc. Ins. Corp. v.
Davis, 15 L. T. 182 215
Accles, Re, 51 W. R. 57 1491
Accountant's Ass'n, 5 Pa.
Dist. Rep. 699 116
Acker, Merrall & Condit Co.
V. McGaw (Md.), 68 Atl. 17
1272, 1341
Ackerman v. Halsey, 37 N. J.
Eq. 356 960, 1285
Adamant Plaster Co., 137
Fed. 251 1505, 1520
Adamantine Brick Co. v.
Woodruff, MacA. & Mack.
(D. C.)318. 1183
Adams v. Adams, 139 Mass.
449; 1 N. E. 746 1443
V. Boston, etc. R. R. Co.,
1 Fed. Cas. 90 23
V. Burke, 201 111. 395; 66
N. E. 235 982, 1321
V. Clark (Colo.), 85 Pac.
642 623
V. Cross Wood Printing
Co., 27 111. App. 313 1371
V. Empire Laundry Ma-
chinery Co., 4 N.Y.Supp.738 280
Adams, etc. Co. v. Deyette, 5
S. Dak. 418; 59N.W.214;
49 Am. St. Rep. 887 518
Adams' Case, 13 Eq. 474 159, 196,
417, 525
Adams Express Co. v. Harris,
120 Ind. 73; 21 N. E. 340;
16 Am. St. Rep. 315; 7
L. R. A. 214 383
Adamson's Case, 18 Eq. 670 642,
1300, 1325
Addams v. Ferick, 26 Beav.
384 789
Addinell's Case, 1 Eq. 225 165,
509, 510
Addison v. Lewis, 75 Va. 701 1559,
1561, 1562, 1566, 1566, 1568, 1571
Addison v. Pacific Coast Mill-
ing Co., 79 Fed. 459 612
Addison's Case, 5 Ch. 294 191,
191, 523
Addlestone Linoleum Co., 37
Ch. D. 191 178, 632
TABLE OP CASES
[The references are to pages]
215
979
863
Adlets V. Progressive Shoe
Co., 84 Mo. App. 288 1237, 1247
Adley v. Reeves, 2 M. & S.
53 582
Adriance v. Roome, 52 Barb.
(N. Y.) 399 592, 1369
Aerators, Ltd. v. ToUitt
(1902)i 2 Ch. 319 369, 371,
375, 376
Aetna Ins. Co. (1871), Ir.
Rep. 6 Eq. 298
V. Albany, etc. R. Co.,
156 Fed. 132
Aetna Nat. Bank v. Charter
Oak Life Ins. Co., 50 Conn.
167
Africa v. Duluth News-Tri-
bune Co., 82 Minn. 283 ; 84
N. W. 1019; 83 Am. St.
Rep. 424 1328, 1381, 1382
African M. E. Church, 28 Pa.
Super. Ct. 193 1068
V. Conover, 27 N. J. Eq.
167 302, 303, 304
Agar V. Atheneum Life Soc,
3 C. B. N. s. 725 1220
Agency Land & Finance Co.,
20 Times L. R. 41 658, 1545
Agnew V. Bank of Gettysburg,
2 H. & G. (Md.) 478
Agricultural Bank v. Burr, 24
Me. 256
V. Wilson, 24 Me. 273
Agricultural Branch R. R. Co.
V. Winchester, 13 Allen
(Mass.) 29
Agricultural Cattle Ins. Co. v.
Fitzgerald, 16 Q. B. 432
Agudath Hakehiloth, 18 N. Y.
Misc. 717; 42 N. Y. Supp.
985 113, 1010
Ainsworth v. Evans (Ariz.),
80 Pac. 344 936, 985, 985
A. J. Cranor Co. v. Miller
(Ala.), 41 So. 678
Alabama v. Montague, 117
U. S. 602; 6Sup. a. 911
228
154
701
529
229
339
1512,
1512
Alabama Coal, etc. Co. v.
Shackelford, 137 Ala. 224;
34 So. 833; 97 Am. St. Rep.
23 957
Alabama Foundry, etc. Works,
V. Dallas, 127 Ala. 513; 29
So. 459 181, 185
Alabama Marble, etc. Co. v.
Chattanooga Marble Co.
(Tenn.), 37 S. W. 1004 1118,
1122, 1413
1515
518
Alabama Nat. Bank v. Mary
Lee, etc. Co., 108 Ala. 288;
19 So. 404
Alabama, etc. Imp. Co. v.
Hall (Ala.), 44 So. 592
Alabama, etc. Mfg. Co. v.
Robinson, 56 Fed. 690; 6
C. C. A. 79 1462, 1469
V. Robinson, 72 Fed. 708;
19 C. C. A. 152 1625
Alabama, etc. R. R. Co. v.
Rowley, 9 Fla. 508 603, 604,
893, 895
Alabama, etc. Ry. Co. v. Annis-
ton, etc. Trust Co., 57 Fed.
25; 6 C-C. A. 242 1648, 1651
Albany Fertilizer Co. v.
Arnold, 103 Ga. 145; 29
S. E. 695 1121, 1121
Albert v. Merchants' Ex-
change, 39 Mo. App. 583 558,
560, 560, 582
Albert v. Savings Bank, 2 Md.
159 792, 798, 799, 850, 1329
Albes V. Keith, Simmons &
Co. (Ala.), 44 So. 693
Albion Steel Co. v. Martin, 1
Ch. D. 580
Albright V. Lafayette, etc.
Ass'n, 102 Pa. St. 411
Albro, etc. Co. v. Chinn(Colo.)
77 Pac. 1097
Alden Speare's Sons Co. v.-
Casein Co., 106 N. Y. Supp.
980
Aldham v. Brown, 7 E. &. B.
164; 2E. &. E. 398
Aldine Mfg. Co. v. Phillips,
118 Mich. 162; 76 N. W.
371; 74 Am. St. Rep. 380;
42 L. R. A. 531
Aldrioh V. Bingham, 131 Fed.
363
V. Chemical Nat. Bank,
176 U. S. 618; 20 Sup. Ct.
498
Aldridge v. Pardee, 24 Tex.
av. App. 254; 60 S. W.
789
Alexander v. Atlanta, etc.
R. R. Co., 113 Ga. 193; 38
S. E. 772; 54 L. R. A. 305
V. Atlantic, etc. R. R.
- Co., 67 N. Car. 198
V. Automatic Telephone
Co. (1899), 2 Ch. 302
V. Automatic Telephone
Co. (1900), 2 Ch. 56 599, 625,
935, 939
1553
326
112
880
778
343
776
708
841
1510
983
1472
205
TABLE OF CASES
[The references are to pages]
Alexander v. Cauldwell, 83
N. Y. 480 822
v. Central R. R. Co., 3
Dill. 487 1584, 1586
V. Relfe, 74 Mo. 495 529, 534
870
V. Searcy, 81 Ga. 536; 8
S. E. 630; 12Am. St. Rep.
337 966, 971
V. Simpson, 43 Ch. D.
139 1001, 1001, 1002, 1002
V. ToUeston Club, 110
111. 65 303, 848
i;. Williams, 14 Mo. App.
13 1306
V. Winters, 23 Nevada
475; 49 Pac. 116 283
Alexander's . Timber Co., 70
L. J. Ch. 767 1309, 1321, 1369,
1370
Alexandra Palace Co., Re, 21
Ch. D. 149; 46 L. T. 730 462,
1091, 1108, 1125, 1289
Alexandria, etc. R. R. Co. v.
Burke, 22 Gratt. (Va.) 254 809,
1439
Alexandria, etc. Ry. Co.'s
Trustee v. Graham,31Gratt.
(Va.) 769 1509
Alfred Shaw & Co., 21 Vict.
L. R. 599 765, 765
Alianza Co. v. Bell (1906),
A. C. 18 1099
Allan r. Manitoba, etc. Ry . Co. ,
10 Manitoba 106 1584, 1598,
1603, 1606
Allemong v. Simmons, 124
Ind. 199; 23 N. E. 768 1708,
1196
Allen V. Alston (Ala.), 41 So.
159 1374
r- "• Am. Bldg. & Loan
N.'Ass'n, 49 Minn. 544; 52
W. 144; 32 Am. St. Rep. 574 666
V. Brown, 6 Kans. App.
704; 50 Pac. 505 394, 408
V. Central R. R. Co., 42
Iowa 683 1610, 1616
V. Curtis, 26 Conn. 456 928,
1350
V. Dallas, etc. R. R. Co.,
3 Woods 316 1603, 1604
V. Dillingham, 60 Fedi
176; 8 C. C. A. 544 1619
V. Dubois, 117Mich. 115;
75 N. W. 443; 72 Am. St.
Rep. 557 418
V. Freedman's Sav. &
Trust Co., 14 Fla. 418 855
Allen V. Gold Reefs of West
Africa (1900), 1 Ch. 656 568,
578, 579, 584, 586, 586, 605, 999,
999
V. Hill, 16 Cal. 1 13 1017, 1024
V. Jackson, 122 111. 567;
13 N. E. 840 1358
V. Londonderry, etc. Ry.
Co., 25 W. R. 524 462
V. Luke, 141 Fed. 694
1285, 1287
V. Montgomery R. R. Co.,
11 Ala. 437 65, 667, 1406, 1497
V. New Jersey Southern
R. R. Co., 49 How. Pr.
(N. Y.) 14 975
v.- North Des Moines
M. E. Church, 127 Iowa 96;
102N.W.808; 109 Am. St.
Rep. 366; 69 L. R. A. 255
141, 386
V. South Boston R. R.
Co., 150 Mass. 200; 22
N. E. 917; 15Am. St. Rep.
185; 5 L. R. A. 716 730, 731,
734, 735
V. Stewart, 7 Del. Ch.
287; 44 Atl. 786 693, 715
V. Windham, etc. Mfg.
Co., 87 Fed. 786 1503
V. Woonsocket Co., 11
R. I. 288 80
Alliance Marine Ass.' Co.
(1892), 1 Ch. 300 136
AUibone v. Hager, 46 Pa. St.
48 , 176
Ailing V. Wenzel, 133 111. 264;
24 N. E. 551 521, 524
Allison V. Coal Co., 87 Tenn.
60; 9 S. W. 226 1359
Allman v. Havana, etc. R. R.
Co., 88 111. 521 152, 553, 607
Allnutt V. Subsidiary High
Court, 62 Mich. 110; 28
N. W. 802
Allsop & Sons, 51 W. R. 644
657
537,
544
Ahnada and Tirito Co., 38 Ch.
D. 415 628
Almy V. Ome, 165 Mass. 126;
42 N. E. 561 1347, 1348
Alpha Co. (1903), 1 Ch. 203 1587,
1590
Alston's Case, 22 Vict. L. R.
243 n 616
Alta Silver Mining Co. v. Alta
Placer Mining Co., 78 Cal.
629; 21 Pac. 373 1371. 1376,
1377
TABLE OF CASES
[The references are to pages]
585
901
972
397
99
602
Altenberg v. Grant, 85 Fed.
345; 29 C. C. A. 185 339, 355,
645
Alters V. Joumeymen, etc.
Ass'n, 19 Pa. Super. Ct. 272
Althause v. Giroux, 107 N. Y.
Supp. 191: 56 N. Y. Misc.
608 899, 904
V. Giroux, 107 N. Y.
Supp. 193; 56 N. Y. Misc.
511
Alton V. Curtis, 26 Conn. 456
Altschul V. Casey, 45 Oreg.
182; 76 Pac. 1083
Amalgamated Syndicate
(1897), 2 Ch. 600
Ambergate Ry. Co. v. Nor-
cli£fe, 20 L. J. Ex. 234
Ambergate, etc. Ry. Co. v.
Mitchell, 4 Exch. 540 547, 611,
1187, 1189
V. Mitchell, 6 Eng. Ry.
Cas. 235 611
Ambrose Lake Tin Co., 14 Ch.
D. 390 330, 1290
American Alkali Co. v. Kurtz,
134 Fed. 663 621
V. Salom, 131 Fed. 46;
65 C. C. A. 284 177, 182, 182,
419
American Alkili Co. v. Camp-
bell, 113 Fed. 398
American BIdg., etc. Ass'n v.
Merrick, 39 Nebr. 413; 58
N. W. 107
American Bridge Co. v. Hei-
delbach, 94 U. S. 798 1515, 1516
American Car & Foundry Co.
V. Alexandria Water Co.
(Pa.), 67 Atl. 861
American Central Ry. Co. v.
Miles, 52 111. 174
American Circular Loom Co.
V. Wilson (Mass.), 84 N. E.
133 1341, 1341
American Clay Mfg. Co. v.
American Clay Mfg. Co.,
198Pa. St. 189; 47 Atl. 936
373, 378, 379
American Exchange Bank v.
First Nat. Bank, 82 Fed.
961; 27 C. C. A. 274 1198,
1210
American Exch. Nat. Bank
V. Oregon Pottery Co., 55
Fed. 265 1370, 1373, 1378
American Exch. Nat. Bank
V. Woodlawn Cemetery,
. 105 N. Y. Supp. 305 731
601
918
1370
1237
American File Co. v. Garrett,
110 U. S. 288; 4 S. Ct. 90
624,
1438
American Fruit Co. v. Ward,
99 N. Y. Supp. 717; 113
N. Y. App. Div. 319 1072
American Ins. Co. v. Oakley,
9 Paige (N. Y.) 496; 38
Am. Dec. 561 1373
American Loan, etc. Co. v.
Central Vt. R. R. Co., 84
Fed. 917 1617
V. Minnesota, etc. R. R.
Co., 157 111. 641; 42 N. E.
153 243
V. St. Louis, etc. Ry. Co.,
42 Fed. 819 1436
V. Union Depot Co., 80
Fed. 36 1466, 1623
American Matinee Ass'n v.
Secretary of State, 104
N. W. 141; 140 Mich. 579 23
American Mortgage Co. v.
Tennille, 87 Ga. 28; 13 S.
E. 158; 12 L. R. A. 529 847
American Nat. Bank v. Amer-
ican Wood Paper Co., 19
R. L 149; 32 Atl. 305; 61
Am. St. Rep. 746; 29' L.
R. A. 103 1420, 1423, 1466
V. Nashville Warehouse,
etc. Co. (Tenn.), 36 S. W.
960 1124, 1124
V. Oriental Mills, 17 R.
I. 551; 23 Atl. 795 689, 693,
698, 777, 999, 1006, 1021
American Novelty & Mfg. Co.
V. Manufacturing Electrical
Novelty Co., 36 N. Y. Misc.
450; 73 N. Y. Supp. 755 373
American Or^er Scottish
Clans V. Merrill, 151 Mass.
558; 24N. E. 918; 8 L. R.
A. 320 225, 374
American Paper Bag Co. v.
Van Nortwick, 52 Fed. 752 ;
3 C. C. A. 274 309
American Pastoral Co. v.
Gumey, 61 Fed. 41 603, 613
American Press Ass'n v.
Brantingham, 75 N. Y.
App. Div. 435; 78 N. Y.
Sujjp. 305 684
American Refrigerating, etc.
Co. V. Linn, 93 Ala. 610;
7 So. 191 1026, 1026
American Ry. Frog. Co. v.
Haven, 101 Mass. 398 1027,
1249
TABLE OF CASES
tThe references are to pages]
American Salt Co. v. Heiden-
heimer, 80 Tex. 344; 15
S. W. 1038; 26 Am. St. Rep.
743 120, 125, 125, 222, 240
American Silk Works v. Salo-
mon, 4 Hun 135 302
V. Salomon, 6 T. & C.
(N. Y.) 352 264, 304
American Soda Foimtain Co.
V. Stolzenbash (N. J.), 68
Atl. 1078 1366
American Spirits Mfg. Co. v.
Easton, 120 Fed. 440 1259,
1304
American Steel, etc. Co. v.
Bearse (Mass.), 80 N. E. 623 1359
V. Eddy, 130 Mich. 266;
89 N. W. 952 449, 514, 529
V. Eddy, 138 Mich. 403;
101 N. W. 578 1094, 1127,
1129
V. Wire Drawers', etc.
Unions, 90 Fed. 608 262
American Tube Works v.
Boston Machine Co., 139
Mass. 5; 29 N. E. 63 438, 444,
493, 1003, 1032
American Waterworks Co. v.
Farmers' L. & T. Co., 73
Fed. 956; 20 C. C. A. 133 1628,
1628
American Wire Nail Co. v.
Gedge, 96 Ky. 513; 29 S.
W. 353 1134
American, etc. Trust Co. v.
East & West R. Co., 46
Fed. 101 1566
V. Toledo, etc. Ry. Co.,
29 Fed. 416 1603, 1604
Ames V. Birkenhead Docks,
20 Beav. 332 1515, 1605, 1677
V. New Orleans, etc. R.
R. Co., 2 Woods 206 1669, 1669,
1670
V. Union Pac. R. Co., 4
Interst. Comm. Rep. 625 1620
V. Union Pac. Ry. Co.,
60 Fed. 674 1620
V. Union Pac. Ry. Co.,
60 Fed. 966 1612, 1612
V. Union Pac. Ry. Co.,
62 Fed. 7 1620
v. Union Pac. Ry. Co.,
73 Fed. 49 1642
V. Union Pac. Ry. Co.,
74 Fed. 335 1570, 1641,
Ames's Case, W. N.
79
6
1642,
1642
(1896)
639, 641
Amesbury v. Bowditch Mut.
Fire Ins. Co., 6 Gray (Mass.)
696 561, 677, 677, 594
A. Mitchell's Case, 4 A. C.
548 746, 800, 800
Anacosta Tribe v. Murbach,
13 Md. 91 ; 71 Am. Dec. 625 577
Ancient City Sportsman's
Club V. Miller, 7 Lans.
(N. Y.) 412 45
Ancient Order v. Brown, 112
Ga. 646; 37 S. E. 890 590
Anderson v. Butler's Wharf
Co., 48 L. J. Ch. 824 1504
V. Condict, 93 Fed. 349;
35 C. C. A. 335; 94 Fed.
716; 36 C. C. A. 437 1633, 1633,
1643, 1666
V. First Nat. Bank, 5
N. Dak. 451 ; 67 N. W. 821 53
V. Midland Ry. Co.,
(1902), 1 Ch. 369 928, 961
V. Nicholas, 28 N. Y.
600 720, 726, 767
V. Railroad, 91 Tenn.
44; 17 S. W. 803 127, 138, 608,
609
V. Shawnee Compress
Co. (Okl.), 87 Pac. 315 71
V. South Chicago Brew-
ery Co., 173 111. 213; 60
N. E. 655 1373
V. Waco State Bank, 92
Tex. 506; 49 S. W. 1030;
71 Am. St. Rep. 867 711
V. War Eagle, etc. Co.,
8 Idaho 759; 72 Pac. 671 876
V. W. J. Dyer & Bro., 94
Minn. 30; 101 N.W. 1061
Anderson's Case, 7 Ch. D. 76
1112
639,
639
184
763
, 17 Ch. D. 373
, 8 Eq. 509
Andes v. Ely, 168 U. S. 312;
16 Sup. Ct. 964
Andres v. Fry, 113 Cal. 124;
46 Pac. 634
V. Morgan, 62 Oh. St.
236; 56N. E. 876; 78 Am.
St. Rep. 712
Andress's Case, 8 Ch. D. 126
Andrews v. Gas Meter Co.
(1897), 1 Ch. 361 431, 440, 441,
584
V. Nat. Foundry, etc.
Works, 76 Fed. 166; 22 0.
C. A. 110; 36 L. R. A. 139;
77 Fed. 774; 23 CCA.
454 620, 645, 1402, 1520, 1521
248
1213
297
643
TABLE OF CASES
[The references are to pages]
Andrews v. Ohio, etc. R. E.
Co., 14 Ind. 169
V. Smith, 5 Fed. 833
V. Union Mutual Fire
Ins. Co., 37 Me. 256 563, 565
• V. Worcester, etc. R. R.
Co., 159 Mass. 64; 33 N. B.
1109
Andrews Co. v. Nat. Bank of
Columbus (Ga.), 58 S. E.
633
Angelo, Re, 5 De G. & Sm.
278
Anglesea Colliery Co., 1 Ch.
555
Anglo-American Land, etc.
Co. V. Dyer, 181 Mass. 593;
64 N. E. 416; 92 Am. St.
Rep. 437
Land, etc. Co. v. Lom-
bard, 132 Fed. 721 58, 619,
832, 834
Anglo-American Leather
Cloth Co., 43 L. T. 43
Anglo-American Provision
Co. V. Davis Provision Co.,
112 Fed. 574
Anglo-American Tel. Co. v.
Spurling, 5 Q. B. D. 188
Anglo-Austrian Printing
Union (1895), 2 Ch. 891
1514, 1599
Anglo-Califomian Bank v.
Field, 146 Cal. 644; 80 Pac.
1080 233, 384
V. Grangers' Bank, 63
Cal. 359 572
Anglo-Colonial Syndicate, 65
L. T. 847 641, 641
Anglo-Continental Corpora-
tion (1898), 1 Ch. 327 435, 437
Anglo-Danubian, etc. Co., 20
Eq. 339 , 1400
Anglo-French Exploration Co.
(1902), 2 Ch. 845 533, 539
Anglo-Greek Steam Co., 2
Eq. 1
Anglo-Oriental Carpet Mfg.
Co. (1903), 1 Ch. 914
Anglo-Universal Bank v. Bar-
agnon, 45 L. T. 362 932, 996,
1195
Anonymous, 1 Ventr. 257
Anonymous, 12 Mod. 423
Ansley Land Co. v. H. Wes-
ton Lumber Co., 152 Fed.
841
Anthony v. Campbell, 112 Fed
212; 50 C. C. A. 195 1636, 1669
603
1619
716
963
414
434
607
1511
1315
758
1514,
295
1396
401
401
1372
84
120
Anthony v. Household Sew-
ing Machine Co., 16 R. I.
571; 18 Atl. 176; 5 L. R.
A. 675 444, 483, 484, 494
Antietam Paper Co. v. Chron-
icle Pub. Co., 115 N. Car.
143 1542
Apperly v. Page, 1 Phill. Ch.
779 342
Appleton V. American Malt-
ing Co., 65 N. J. Eq. 375;
54 Atl. 454 944, 945, 946,
966, 1127, 1128, 1185, 1359
Appleton V. Citizens' Central
Nat. Bank, 116 N. Y. App.
Div. 404; 101 N. Y. Supp.
1027
Appleton V. Citizens' Nat.
Bank, 190 N. Y. 418; 83
N.E. 470 841,856
Application for Charter, Re,
27 Wkly. Notes Cas. (Pa.)
399
Apthorpe v. Peter Schoen-
hofen Brewing Co., 80 L. T.
395 878, 879
Aransas Pass., etc. Co. v.
Manning, 94 Tex. 558; 63
S. W. 627 992, 1069
Arapahoe Investment Co. v.
Piatt, 5 Colo. App. 515; 39
Pac. 584 288
Arapahoe, etc. Co. v. Stevens,
13 Colo. 534; 22 Pac. 823 591,
635
Arauco Co., 79 L. T. 336 1548
Arbuckle v. Woolson Spice
Co., 21 Oh. Circ. a. 347 890
V. Woolson Spice Co.,
21 Oh. Circ. Ct. 356 890
Archer v. American Water
Works Co., 50 N. J. Eq. 33;
24 Atl. 508 751, 958, 1062
Archer's Case (1892), 1 Ch. 322
328, 1263, 1337, 1338
Archibald D. Dawney, Ltd.,
iJe, 83 L.T. 47 205,642
Ardesco Co. v. North Am., etc.
Co., 66 Pa. St. 375 1188
Arents v. Commonwealth, 18
Gratt. (Va.) 750 1437, 1461
Argus Co., Re, 138 N. Y. 557;
34 N. E. 388 922, 1020,
1023, 1065, 1200, 1201
Argus Printing Co., Re, 1 N.
Dak. 434; 48 N. W. 347;
26 Am. St. Rep. 639 998, 1017,
1017, 1021, 1021, 1022, 1056,
1060, 1176, 1176, 1117
TABLE OF CASES
[The references are to pages]
853
1122
Arkadelphia Lumber Co. v.
Posey (Ark.), 85 S. W. 1127
Arkansas Stables v. Samstag
_ (Ark.), 94 S. W. 699 1167, 1359
Arkansas Valley, etc. Co. v.
Lincoln, 56 Kans. 145; 42
Pac. 706 853
Arkansas, etc. Society v.
Eichholtz, 45 Kans. 164;
25 Pac. 613 1269, 1318
Armant v. New Orleans, etc.
R. R. Co., 41 La. Ann. 1020;
7 So. 35
Armington v. Palmer, 21 R. I.
109; 42 Atl. 308; 79 Am.
St. Rep. 786; 43L.R.A.95
373, 387
Armitage v. Gamett (1893),
3 Ch. 337 1154
Arms V. Conant, 36 Vt. 744 1208
Armstrong v. Burnet, 20
Beav. 424 789, 789
V. Karshner, 47 Oh. St.
276; 24 N. E. 897 609,609
V. Merchants' Mantle Co. ,
32 Ont. R. 387 659, 660
Arnold v. Ruggles, 1 R. I.
165 420, 422, 678
V. Searing (N. J. Ch.),
67 Atl. 831 331, 339, 627, 961,
964 972
V. Suffolk Bank, 27
Barb. (N. Y.) 424 197, 197,
769, 769, 771, 776
Amot V. Erie Ry. Co., 67 N.
Y. 315
V. Union Salt Co., 186 N.
Y. 501; 79 N. E. 719
V. United African Lands
(1901), 1 Ch. 518
Amot's Case, 36 Ch. D. 702
155, 171, 199, 632, 639
Arthur v. Griswold, 55 N. Y.
400
V. Oakes, 63 Fed. 310;
25 L. R. A. 414; 11 C. C.
A. 209
V. Weston, 22 Mo. 379
Artisans' Land & Mortgage
Co. (1904), 1 Ch. 796 541, 1123
Ashbuiy v. Watson, 30 Ch. D.
376 111, 441, 445, 445
Ashbury Ry. Carriage Co. v.
Riche, L. R. 7 H. L. 653 10,
11, 12, 32, 41, 94, 97, 665, 824,
829, 830, 830
Ashby V. Blackwell, 2 Eden
299; Ambler 503 743, 754,
755, 758, 759
1437
1468
1058
1356
1621
254
Asher v. Sutton, 31 Kans. 286;
1 Pac. 535 1372
Ashley v. Kinnan, 2 N. Y.
Supp. 574 1299
Ashley Wire Co. v. Illinois
Steel Co., 164 111. 149; 45
N. E. 410; 56Am. St. Rep.
187 1200, 1200, 1207, 1218, 1222
Ashley's Case, 9 Eq. 263 177
Ashpitel V. Sercombe, 19 L. J.
Ex. 82 341, 342
Ashtabula, etc. R. R. Co. v.
Smith, 15 Oh. St. 328 147, 175,
188
Ashton V. Atlantic Bank, 3
Allen (Mass.) 217 799
V. Burbank, 2 Dillon
435 . 610, 667
V. Heggerty, 130 Cal.
616; 62 Pac. 934 754, 765, 791
V. Heydenfeldt, 124 Cal.
14; 66 Pac. 624 424
V. Zeila Mining Co., 134
Cal. 408; 66 Pac. 494 ,791, 1130
Ashuelot Mfgl Co. v. Marsh,
1 Cush. (Mass.) 607 1371
Ashuelot R. R. Co. v. Elliot,
57 N. H. 397 1582, 1582
Ashurst V. Field, 26 N. J.
Eq. 1 1149
V. Mason, 20 Eq. 225 1279,
1280, 1349
Ashurst's Appeal, 60 Pa. St.
290 1309, 1311, 1312
Aspen Water, etc. Co. v. As-
pen, 5 Colo. App. 12; 37
Pac. 728 148, 149, 278, 302
Aspinwall v. Butler, 133 U. S.
696; 10 Sup. Ct. 417 490
V. Ohio, etc. R. R. Co.,
20 Ind. 492; 83 Am. Dec.
329 1008, 1009
V. Sacchi, 67 N. Y. 33 1 250
Assignment Mut., etc. Ins.
Co., 107 Iowa 143; 77 N.
W. 868; 70 Am. St. Rep.
149 851, 865
Associate Presbyterian Con-
gregation V. Hanna, 113 N.
Y. App. Div. 12; 98 N. Y.
Supp. 1082 381
Astley V. New Tivoli (1899),
1 Ch. 161 1168, 1179, 1365
Aston, Re, 27 Beav. 474;
affirmed in 4 De G. & J.
320 7
Atchison, etc. R. R. Co. v.
Fletcher, 35 Kans. 236; 10
Pac. 596 1433, 1437
TABLE OF CASES
[The references are to pages]
Atchison, etc. Ry. Co. v.
Cunningham, 59 Kans. 722;
54 Pac. 1055 1635
V. Osborn, 148 Fed. 606;
78 G. C. A. 378 1561, 1568,
1633
V. Young, 3 Ind. Ty. 60;
53S. W. 481; 1634
Atheneum Life Ass. Co. v.
Pooley, 3 De G. & J. 294 1421
Atheneum Society, Re, 4 K. &
J. 558 1073
Atherton v. Sugar Creek, etc.
Co., 67 Ind. 334 147, 147
Athol Music Hall Co. v.
Carey, 116 Mass. 471 209
Athol, etc. R. R. Co. v. Pres-
cott, 110 Mass. 213 661
Atkin & Co. v. Wardle, 61
L. T. 23 369
Atkins V. Albree, 12 Allen
(Mass.) 359 502
V. Gamble, 42 Cal. 86;
10 Am. Rep. 282 418, 419
V. Wabash, etc. Ry. Co.,
29 Fed. 161 1602
Atkins, etc. Co. v. Petersburg
R. R. Co., 3 Hughes 307
1561, 1570
Atkinson v. Atkinson, 8 Allen
(Mass.) 15 686
V. Foster, 134 111. 472;
26 N. E. 528 718, 804
V. Foster, 27 111. App.
63 1065
V. St. Croix Mfg. Co., 24
Me. 171 1379
Atlantic & Pae. Tel. Co. v.
Union Pac. Ry. Co., 1 Fed.
745 833, 837
Atlantic Coast Line Dividend
Cases, 102 Md. 73; 61 Atl.
295 1151
Atlantic Cotton Mills v.
Abbott, 9 Cush. (Mass.)
423 600
Atlantic DeLaine Co. v.
Mason, 5 R. I. 463 652, 1003
Atlantic Fire Ins. Co. v. San-
ders, 36 N. H. 252 1198
Atlantic Mut. Life Ins. Co., 2
Fed. Cas. 168 416
Atlantic Nat. Bank v. Harris,
118 Mass. 147 1346
Atlantic Trust Co. v. Chap-
man, 208 U. S. 360 1640
V. Crystal Water Co., 72
N. Y. App. Div. 539; 76
N. Y. Supp. 647 1468
Atlantic Trust Co. v. Dana, 128
Fed. 209; 62 C. C. A. 657
1516, 1517, 1568, 1641
V. New York City, 75
N. Y. App. Div. 354; 78
N. Y. Supp. 120 1637
V. Woodbridge Canal,
etc. Co., 79 Fed. 842 1402
V. Woodbridge Canal,
etc. Co., 86 Fed. 975 1565,
1571
Atlantic, etc. R. R. Case, 4
Hughes 125 1623, 1624
Atlas Assurance Co. v. Atlas
Insurance Co. (Iowa), 112
N. W. 232 376, 379
Atlas Loan Co., 9 Ont. L. R.
468 651
Atlas Nat. Bank v. Gardner
Co., 8 Biss. 537 1176, 1225,
1227
Attalla Iron Ore Co. v. Vir-
ginia Coal, etc. Co., Ill
Tenn. (3 Gates) 527; 77 S.
W. 774 1296
Attaway v. Third Nat. Bank,
93 Mo. 485; 5 S. W.
16 1347
Attorney-General, Opinion of,
18 Pa. Go. Gt. 492 120
Attorney-General v. Albion
Academy, 52 Wise. 469; 9
N. W. 391 1063, 1249
V. American Tobacco
Co., 55 N. J. Eq. 352; 36
Atl. 971 ; affirmed in 56 N.
J. Eq. 847; 42 Atl. 1117 261,
262 264
V. Appleton (1907), 1 Ir.
252 263, 267, 370
V. Boston & Maine R. R.
109 Mass. 99 500
w. Chicago, etc. Ry. Co.,
35 Wise. 425 232, 380
V. Jameson (1904), 2 Ir.
644 575, 575, 677
V. Looker, 111 Mich. 498;
69 N. W. 929; 56 L. R. A.
947 1249
V. Manchester Corpora-
tion (1906), 1 Ch. 643 41
V. Mayor of Brecon, 10
Ch. D. 204 88
V. Mayor, etc, of Liver-
pool (1902), 1 K. B. 411 1416
— V. Mersey Ry. Co. (1907),
1 Ch. 81 35, 37, 91
— V. Mersey Ry. Co. (1907),
A. C. 415, 417 4, 62
TABLE OF CASES
[The references are to pages]
Attorney-General v. Middle-
ton, 2 Ves. Sr. 327 588
V. Montefiore, 21 Q. B. D.
461 423
V. Myddletons (1907),
1 Ir. 471 263, 267
V. Regent's Canal &
Dock Co. (1904), 1 K. B.
263 1668
V. Stevens, Saxt. Ch.
(1 N. J. Eq.) 369 245
V. Whorwood, 1 Ves. Sr.
534 54
Attorney-General ex rd.
Hurley v. Bridgman, 134
Mich. 379; 96 N. W. 438 1016
Attorney-General Miner v.
Lorman, 59 Mich. 157; 26
N. W. 311; 60 Am. Rep.
287 39, 43
Attorney-General ex rel. Wol-
verine Fish Co. V. A. Booth
& Co., 143 Mich. 89; 106
N. W. 868 263
Attree v. Hawe, 9 Ch. D. 337 1439
Atwater v. American Ex-
change Bank, 152 111. 605;
38 N. E. 1017 1079, 1082,1382
Atwood V. Shenandoah Val-
ley R. R. Co., 85 Va. 966;
9 S. E. 748 1411, 1414, 1416
Atwool V. Merryweather, 5
Eq. 464 n 935, 935, 1312
Auburn Bolt Works v. Shultz,
143 Pa. St. 256; 22 Atl.
904 202
Audain, Ex parte, 42 Ch. D. 1
346, 347, 353, 362
Audenried v. East Coast
Milling Co., 59 Atl. (N. J.),
577 115, 189, 511, 1211, 1218
Auerbach v. Le Sueur Mill Co. ,
28 Minn. 291 ; 41 Am. Rep.
285; 9 N. W. 799 110, 862,
1409
Augir V. Ryan, 63 Minn. 373;
65 N. W. 640 261
Augusta Bank v. Augusta, 49
Me. 507 1425, 1451
Augusta Trust Co. v. Federal
Trust Co., 140 Fed. 930;
153 Fed. 157 1416
Aultman's Appeal, 98 Pa. St.
505 617, 618
Aurora City v. West, 7 Wall.
82 1449, 1460
Aurora, etc. R. R. Co. v. City
of Lawrenceburgh, 56 Ind.
80, 87 245
Aurora, etc. Society v. Pad-
dock, 80 111. 263 1074
Austin V. M. Ferst's Sons &
Co. (Ga.), 58 S. E. 318 384
Austin V. Murdock, 127 N. Car.
454; 37 S. E. 478 183
V. Tecumseh Bank, 49
Nebr. 412; 68 N. W. 628;
59 Am. St. Rep. 543; 35
L. R. A. 444 297
Austin Mining Co. v. Gemmel,
10 Ont. Rep. 696 1004, 1011,
^ 1251
Austin's Case, 24 L. T. 932 658,
1218
Australian Producers & Trad-
ers, 31 Vict. L. R. 511 191, 193
Australian Widows' Fund Life
Ass. Soc, 24 Vict. L. R.
613 135
Automatic Self-Cleansing Fil-
ter Syndicate Co. v. Cun-
ninghame (1906), 2 Ch. 34 992,
993, 1161, 1193, 1194
Avegno v. Citizens' Bank, 40
La. Ann. 799; 5 So. 537 490
Averill v. Barber, 6 N. Y.
Supp. 255 1340
Avery v. Ryan, 74 Wise. 591 ;
43 N. W. 317 786
Avon Springs Sanitarium Co.
V. Weed, 104 N. Y. Supp. 58 209,
212 215
A. W. HaU & Co., 37 Ch. D.
712 647, 648
Ayer v. Seymour, 15 Daly
(N. Y.)249; 5N. Y. Supp.
650 1064
Ayers v. South Australian
Banking Co., L. R. 3 P. C.
548 830
Ayre v. Skelsey's Adamant
Cement Co., 20 Times L. R.
587; affirmed in s. c. 21
Times L. R. 464 495, 1318
B
Babcock v. Schuylkill, etc.
R. R. Co., 133 N. Y. 420;
31 N. E. 30 428
Bachman, Re, 2 Fed. Cas. 310 571,
701, 767, 771
, 2 Cent. L. J. 119 571
Backer v. United States Gas
Fixture Co., 84 N. Y. Supp.
149 408
Bacon v. Mississippi Ins. Co.
(1856), 31 Miss. 116 63, 1371
TABLE OF CASES
[The references are to pages]
591
1246
Badesch v. Congregation
Bros., 23 N. Y. Misc. 160;
50 N. Y. Supp. 958
Badger Paper Co. v. Rose, 95
Wis. 145; 70N.W.302; 37
L. R. A. 162 147, 169, 209, 278
Bagaleyu. Pittsburgh, etc. Co.,
146 Pa. St. 478 ; 23 Atl. 837 1320
Bagby & Rivers Co. v. Rivers,
87 Md. 400; 40 Atl. 171;
67 Am. St. Rep. 357; 40
L. R. A. 632 296, 377
Baggot V. Turner, 21 Wash.
339; 58 Pac. 212 1226
Baglan Hall Colliery Co., 5
Ch. 346 97, 205, 634, 634
Bagley v. Carthage, etc. R. R.
Co., 165 N. Y. 179; 58
N. E. 895
-■ V. Reno Oil Co., 201 Pa.
78; 50 Atl. 760; 56 L. R.
A. 184 583, 1003
Bagnall v. Carlton, 6 Ch. D.
371 272, 293, 320, 320, 320, 321
Bagnalstown & Wexford Ry.
Co., Ir. Rep. 4 Eq. 505 63, 831,
1400, 1409
Bagot Pneumatic Tyre Co. v.
Clipper Pneumatic Tyre
Co. (1902), 1 Ch. 146 289, 465,
1099
Bagshaw v. Eastern Union
Ry. Co., 7 Hare 114 963
V. Eastern Union Ry.
Co., 2 Mac. & G. 389 73, 963
Bagshaw, Ex parte, 4 Eq.
341 _ 59, 59
Bahamas, etc. Plantation v.
Griffin, 14 Times L. R. 139 1415
Bahia & San Francisco Ry.
Co., L. R. 3 Q. B. 584 728, 730,
731
Baile v. Calvert College, etc.
Soc, 47 Md. 117 95, 603, 606,
646, 1204
Bailey v. Birkenhead, etc. Ry.
Co., 12 Beav. 433 607, 931,
977, 977
V. Chaipplain, etc. Co.,
77 Wise. 453; 46 N. W.
539 487, 492
V. Farmers' Nat. Bank,
97 111. App. 66 84
V. Macaulay, 13 Q. B.
815 306, 308, 309
V. Railroad Co., 17
Wall. 96 457, 457, 458, 460
V. Railroad Co., 22 Wall.
604 496, 496, 1114
Bailey v. Tillinghast, 99 Fed.
801; 40 C. C. A. 93 165, 489,
489, 490
Bailey & Co., Joel T., v.
Snyder Bros., 61 111. App.
472 407, 1371, 1376, 1377
Baillie v. Edinburgh Oil Gas
Light Co., 3 CI. & Fin. 639 611,
611
Baillie's Case (1898), 1 Ch.
110
Baily v. British Equitable As-
surance Co. (1904), 1 Ch.
374
V. Burgess, 48 N. J. Eq.
411; 22 Atl. 73
Baily's Case, 3 Ch. 592
Bain v. Whitehaven, etc. Ry.
Co., 3 H. L. Cas. 1 922, 925
Bainbridge v. City of Louis-
ville, 83 Ky. 285; 4 Am.
St. Rep. 153 1461, 1463, 1472
' V. Smith, 41 Ch. D. 462 1177,
1177, 1251
Baines v. Coos Bay Nav.
Co., 41 Oreg. 135; 68 Pac.
397
V. Coos Bay, etc. Co., 45
Oreg. 307; 77 Pac. 400
187
587
309
213
1248
Baird v. Bank of Washington,
11 S. & R. (Pa.) 411
V. Ross, 2 Macq. H. L. 61
880,
1276
1224
341,
342
Baird's Case, 5 Ch. 725 622, 789
Baker v. Administrator of
Backus, 32 111. 79
V. Beach, 85 Fed. 836
V. Consolidated Gas, etc.
Co., 42 N. Y. Misc. 95; 85
N. Y. Supp. 1030 1467, 1468
V. Drake, 66 N. Y. 518;
23 Am. Rep. 80
V. Guarantee Trust, etc.
Co., 31 Atl. Rep. 174
(N. J.)
V. Marshall, 15 Minn.
177
v.. Meloy, 95 Md. 1 ; 51
Atl. 893 1455, 1455, 1461
V. Neff, 73 Ind. 68 248
V. Reeves, 85 Fed. 837 619
Baker Furniture Co. v. Hall
(Nebr.), 107 N. W. 117, re-
versed on rehearing, 111
N. W. 129 298, 298
Baker's Appeal, 108 Pa. St.
510; 1 Atl. 78; 56 Am.
Rep. 231 745
219
791
809
1408
429
TABLE OF CASES
[The references are to pages]
Baker's Case, 1 Dr. & Sm. 55
1245, 1310, 1318, 1318
Balaghat Gold Mining Co.
(1901), 2 K. B. 665 904
Baloh V. Hallet, 10 Gray
(Mass.) 402 1110, 1155
Baldwin v. Canfield, 26 Minn.
43; IN. W. 261 875, 963, 974,
1069, 1071, 1071, 1072, 1211
V. Miller & Lux (Cal.),
92 Pac. 1030 513, 1091
Bale V. Michigan Tontine In-
vestment Co., 132 Mich.
479; 93 N. W. 1071 850
Balfour v. Baker, etc. Co., 27
Oreg. 300; 41 Pac. 164 212
Balfour-Guthrie Co. v. Wood-
worth, 124 Cal. 169; 56
Pac. 891 1201, 1224
Balkis Consolidated Co. v.
Tomkinson (1893), A. C.
396 730, 736) 738, 738
Ball V. Rutland R. R. Co., 93
Fed. 513 955, 969
Balliet v. Brown, 103 Pa. St.
546 1188
Ballou V. Famum, 9 Allen
(Mass.) 47 1582
Baltimore Bldg., etc. Ass'n v.
Alderson, 90 Fed. 142; 32
C. C. A. 542 1650
Baltimore City Pass. Ry. Co.
V. Hambleton, 77 Md. 341 ;
26 Atl. 279 157, 502, 506
V. Sewell, 35 Md. 239;
6 Am. Rep. 402 430, 753, 753
Baltimore Humane Impartial
Soc. V. Pierce, 100 Md. 520;
60 Atl. 277; 108 Am. St.
Rep. 450; 70 L. R. A. 485 1504
Baltimore Marine Ins. Co. v.
Dalrymple, 25 Md. 269 808
Baltimore Retort, etc. Co. v.
Mali, 65 Md. 93; 3 Atl. 286;
57 Am. St. Rep. 304 694, 713,
751
Baltimore Trust, etc. Co. v.
Atlanta Traction Co., 69
Fed. 358 1619
V. Hofstetter, 85 Fed.
75; 29 C. C. A. 35 1543, 1633
Baltimore, etc. R. R. Co. v.
Baltimore, etc. Relief Ass'n,
77 Md. 566; 26 Atl. 1045 585
V. Burris, 111 Fed. 882;
50 C. C. A. 48 1610
V. Fifth Baptist Church,
137 U. S. 568; 11 Sup. Ct.
185 241, 381
188
463
101
614
422
76
Baltimore, etc. R. R. Co. v. Pum-
phrey,74 Md.86; 21 Atl.'559
V. State, 36 Md. 519
Baltimore, etc. Tel. Co. v.
Morgan's, etc. Co., 37 La.
Ann. 883
Baltimore, etc. Turnpike Co.i;.
Barnes, 6 H.&J. (Md.) 57
Baltzen v. Nicolay, 53 N. Y.
467
Bancroft & Sons Co., Joseph,
V. Bloede, 106 Fed. 396; 52
L. R. A. 754; 45 C. C. A.
354
Banet v. Alton, etc. R. R. Co.,
13 111. 504 603, 1214, 1215
Bange v. Supreme Council
(Mo.), 105 S. W. 1092 604
Bangor El. Light, etc. Co. v.
Robinson, 52 Fed. 520 726, 727
Bangor Slate Co., 20 Eq. 59 442,
469
Bangs V. Nat. Macaroni Co.,
15 N. Y. App. Div. 522; 44
N. Y. Supp. 546 67, 1377
Banigan v. Bard, 134 U. S.
291; 10 Sup. Ct. 565
Bank v. Bellington Coal, etc.
Co., 51W. Va. 60; 41 S. E.
390
V. Flour Co., 41 Oh. St.
552
V. HoUingsworth, 135 N.
Car. 556 ; 47 S. E. 618 298, 298
V. Lanier, 11 Wall. 369 526,
572, 732
V. Lumber Co., 32 W. Va.
357; 9 S. E. 243; 3 L. R.
A. 583 302
V. Railroad Co., 5 S. Car.
156; 22 Am. Rep. 12 403
Bank of America v. McNeil,
10 Bush. (Ky.) 54 774, 775
Bank of Ashland v. Jones, 16
Oh. St. 145 1400, 1437
Bank of Atchison Co. v. Dur-
fee, 118 Mo. 431; 24 S. W.
133; 40 Am. St. Rep. 396 571,
573
Bank of Attica v. Manufactur-
ers, etc. Bank, 20 N. Y. 501 110,
575, 755
Bank of Barnwell v. Sixth
Nat. Bank, 28 Pa. Super. Ct.
413
Bank of China v. Morse, 168
N. Y. 458; 85Am. St. Rep.
676; 61 N. E. 774; 56
L. R. A. 139
444
635
1210
84
607
TABLE OF CASES
[The references are to pages]
Bank of Columbia v. Patter-
son, 7 Cranch 299
Bank of Commerce v. Bank of
Newport, 63 Fed. 898; 11
C. C. A. 484 694, 699, 732, 733,
773, 773
V. Central Coal, etc. Co.,
115 Fed. 878; 53 C. C. A.
334
V. Hart, 37 Nebr. 197;
55 N. W. 631; 40 Am. St.
Rep. 479; 20 L. R. A. 780
398
1656
75,
424
Bank of Commerce's Appeal,
73 Pa. St. 59 694, 1130
Bank of CuUoden v. Bank of
Forsyth, 120 Ga. 575; 48
S. E. 226; 102 Am. St.
Rep. 115 572, 574
Bank of England v. Cutler
(1907), 1 K. B. 889 743, 758, 759
Bank of Forrest v. Orgill
Bros., etc. Co., 82 Miss. 81;
34 So. 325 280
Bank of Fort Madison v.
Alden, 129 U. S. 372; 9
Sup. Ct. 332 " 634, 634
Bank of Hindustan v. Alison,
L. R. 6 C. P. 222 193, 493
Bank of Holly Springs v. Pin-
son, 58 Miss. 421; 38 Am.
Rep. 330 571, 574, 588, 588,
589, 593, 773
Bank of Ireland v. Trustees of
Evans' Charities, 5 H. L.
Cas. 389 407, 728, 729
Bank of Kentucky v. Bonnie
Bros., 102 Ky. 343; 43
S. W. 407 775
V. Schuylkill Bank, 1
Pars. Eq. Cas. (Pa.) 180 702,
730, 730, 731, 760, 760, 760,
760, 761, 911, 912, 914, 924
■». Winn, 110 Ky. 140;
61 S. W. 32 797
Bank of LeRoy v. Purdy, 100
N. Y. App. Div. 64; 91
' N. Y. Supp. 310 1295
Bank of Little Rock v. Mc-
Carthy, 55 Ark. 473; 18
S. W. 759; 29 Am. St.
Rep. 60 1199, 1200
Bank of Louisville v. Gray
84 Ky. 565; 2 S. W. 168
Bank of Manchester v. Allen,
11 Vt. 302
Bank of Md. v. Ruff, 7 G. & J.
(Md.) 448
1122,
1122
230
1204
392
862
1373
142
Bank of the Metropolis v.
Guttsohlick, 14 Pet. 19
Bank of Michigan v. Niles, 1
Doug. (Mich.) 401; 41 Am.
Dec. 575
Bank of Middlebury v. Rut-
land, etc. R. R. Co., 30 Vt.
159 397, 1210
Bank of Minneapolis v. Grif-
fin, 168 111. 314; 48 N. E.
154
Bank of Monroe v. Gifford, 72
Iowa 750; 32 N. W. 669
Bank of Montreal v. Chicago,
etc. R. R. Co., 48 Iowa 518
1651, 1652, 1653
V. Maritime Sulphite
Fibre Co., 2 New Brunsw.
Eq. 328 1598, 1608
V. Sweeny, 12 A. C. 617 798
V. Thayer, 7 Fed. 622 1616,
1652, 1652
Bank of Mutual Redemption
V. Hill, 56 Me. 385; 96 Am.
Dec. 470
Bank of National City v.
Johnston, 133 Cal. 185;
65 Pac. 383
Bank of New South Wales v.
Goulbum Valley Butter Co.
(1902), A. C. 543
Bank of San Luis Obispo v.
Wickersham, 99 Cal. 655;
34 Pac. 444 516, 520, 523
Bank of South Australia v.
Abrahams, L. R. 6 P. C.
265 65, 1513
Bank of Turkey v. Ottoman
Co., 2 Eq. 366
Bank of U. S. v. Dandridge,
12 Wheat. 64
V. Dunn, 6 Pet. 51
Bank of Utica v. Smalley, 2
Cow. (N. Y.) 770; 14 Am.
Dec. 526 ' 381, 767
Bank of Washington v. Bar-
rington, 2 Pen. & W. (Pa.)
27
Bank of Wilmington v. Wol-
laston, 3 Harr. (Del.) 90
Bank Commissioners v. Bank
of Brest, Harr. Ch. (Mich.)
106
Bankers' Mut. Casualty Co. v.
First Nat. Bank (Iowa),
108 N. W. 1046
Banks v. Poitiaux, 3 Rand.
(Va.) 136; 15 Am. Dec.
706 392, 847
xxiv
1165
1198
1328
294
392
1372
1368
594
1188
47
TABLE OF CASES
[The references are to pages]
1108
1223
580
Bannatyne v. Direct Spanish
Telegraph Co., 34 Ch. D.
287 532, 537, 545, 545
Banque Franco - Egyptienne
V. Brown, 34 Fed. 162 1419, 1556
Banwen Iron Co., 8 C. B. 406 221
Barber, Re, 15 Jur. 51 158, 164
Barber's Case, 5 Ch. D. 963 1171
Barclay v. Wainwright, 14
Ves. 66 1141
Barcus V. Gates, 89 Fed. 783;
32 C. C. A. 337 182, 182, 970
Bardstown, etc. R. R. Co. v.
Metcalfe, 4 Mete. (Ky.)
199; 81 Am. Dec. 541 1521,
1521, 1584, 1623, 1635
Bardwell v. Sheffield Water-
. works Co., 14 Eq. 517
Bargate v. Shortridge, 5 H. L.
Cas. 297
Barker v. Great Hive, etc. of
Maccabees, 135 Mich. 499;
98 N. W. 24
V. Montana Gold, etc.
Co. (Mont.), 89 Pac. 66 752, 801
' V. Stead, 3 C. B. 946 308, 308
,Be, 6 Wend. (N. Y.)
509 1020, 1022, 1046
Barna v. Kirczow (N. J.), 63
Atl. 611 1249, 1250
Barnard v. Fitzgerald, 23
N. Y. Misc. 181; 50 N. Y.
Supp, 309
V. Norwich, etc. R. R.
Co., 4 CUff. 351
V. Vermont, etc. R. R.
Co., 7 Allen (Mass.) 512
464, 464, 465, 1114
, Re, 61 Fed. 531 1617, 1618
Bamed's Banking Co., 3 Ch.
105 56, 57, 400, 400, 407, 709
Barnes v. Brown, 80 N. Y.
527 632, 1183, 1343
V. Chicago, etc. Ry. Co.,
122 U. S. 1; 7 Sup. a.
1043
V. Mobile, etc. R. R. Co.,
12 Hun (N. Y.) 126
V. Ontario Bank, 19 N.
Y. 152 66, 394
V. Suddard, 117 m. 237;
7 N. E. 477
Barnes Bros. v. Coal Co., 101
Tenn. 354; 47 S. W. 498
Bamett v. Lambert, 15 M. &
W. 489
Barnett's Case, 18 Eq. 507
Baron de • Beville's Case, 7
Eq.ll 207,207
1661
1503
457
1637
1413
848
591
308
196
Barr v. New York, etc. R. R.
Co., 125 N. Y. 263; 26 N.
E. 145 1310, 1316
V. Pittsburgh Plate Glass
Co., 67 Fed. 86; 6 C. C. A.
260 1312, 1340
Barrell v. Lake View Land
Co., 122 Cal. 129; 54 Pac.
594 917, 918, 1201, 1222,
1224
Barrett v. King, 181 Mass.
476; 63 N. E. 934 571, 777
V. Twin City Power Co.,
118 Fed. 861 1486
Barrie v. United Rys. Co.
(Mo.), 102 S. W. 1078 1306
Barron v. Burrill, 86 Me. 66;
29 Atl. 939 «, 154
Barrow v. Nashville, etc.
Turnpike Co., 9 Humph.
(Tenn.) 304 843, 848
Barrow's Case, 14 Ch. D. 432 643,
647, 648, 648
, 3 Ch. 784 614
Barrow Haematite Steel Co.,
Re, 39 Ch. D. 582 537, 545,
545, 545, 545
Barrow Haematite Steel Co.
(1900), 2 Ch. 846; af-
firmed (1901), 2 Ch. 746 536,
537, 539
Barrow-in-Furness Land Co.,
14 Ch. D. 400 642, 642
Barrows v. Natchang Silk Co.,
72 Conn. 658; 45 Atl. 951 492
V. Nat. Rubber Co., 12
R. L 173 777
Barry v. Coffeen, etc. Co., 52
111. App. 183 1237
V. Merchants' Exchange
Co., 1 Sandf. Ch. 280 482, 496,
1113, 1432, 1447,1452
V. Missouri, etc. Ry. Co.,
22 Fed. 631 1683
V. Missouri, etc. Ry. Co.,
27 Fed. 1 1676, 1678, 1679,
1681
V. Missouri, etc. Ry. Co.,
34 Fed. 829 1669, 1679
V. Missouri, etc. Ry. Co.,
36 Fed. 228 1679
V. Moeller, 59 Atl. (N. J.)
97 960, 974, 978, 982, 1285
Barse Live Stock Co. v. Range
Valley Cattle Co., 16 Utah
59; SO Pac. 630 715,803
Barstow v. Pine Bluffs, etc.
Ry. Co., 57 Ark. 334; 21
S. W. 652 1440, 1566
TABLE OF CASES
[The references are to pages]
71
713
1014
995,
Barstow v. Savage Min. Co., 64
Cal. 388; ■ 1 Pac. 349; 49
Am. Rep. 705 682, 726
Barter v. Wheeler, 49 N. H.
9; 6 Am. Rep. 434 1582
Bartholomay Brewing Co. v.
Wyatt (1893), 2 Q. B. 499 424,
878, 883
Bartholomew v. Bentley, 1
Oh. St. 37 1176, 1177, 1180,
1182
V. Derby Rubber Co., 69
Conn. 521; 38 Atl. 45; 61
Am. St. Rep. 57
V. Menzies (1902), 1 Ch.
680
Bartlett v. Fourton, 115 La.
Ann. 26; 38 So. 882
V. Gates, 118 Fed. 66
1063, 1194
V. Hipkins, 76 Md. 5; 23
Atl. 1089; 24 Atl. 532 15
V. Keim, 50 N. J. Law
260; 13 Atl. 7 1615, 1618
V. Mystic River Corp.,
151 Mass. 433; 24 N. E
780
V. Northumberland Ave,
Co., 53 L. T. 611
V. Wilbur, 53 Md. 485 126, 22 1
Bartling-i). Edwards, 84 111.
App. 471 662
Barto V. Nix, 15 Wash. 563;
46 Pac. 1033 517, 526
Barton v. Barbour, 104 U. S.
126
V. International Frater-
nal Alliance, 85 Md. 14; 36
Atl. 658
V. London & N. W. Ry.
Co., 38 Ch. D. 144
V. London, etc. Ry. Co.,
24 Q. B. D. 77 679, 727, 728,
747, 789, 790, 791, 796, 813
V. North Staffordshire
Ry. Co. , 38 Ch. D. 458 727, 755
V. Port Jackson, etc.
Plank Road Co., 17 Barb.
(N. Y.) 397 517
Barton's Case, 4 De G. & J. 46 200,
' 200, 657
Barton's Trust, Re, 5 Eq. 238
496, 1139
Barwick v. English Joint
Stock Bank, L. R. 2 Ex. .
259 1362
Bash V. Culver Gold Mining
Co., 7 Wash. 122; 34 Pac.
462 280
1246
1598
1617
1260
755
Bason v. King's Mountain
Mining Co., 90 N. Car. 417 400,
401, 408
Bassett v. Atwater, 65 Conn.
355; 32 Atl. 937; 32
L. R. A. 575 996
V. Fairchild, 132 Cal.
637; 64 Pac. 1082; 52 L.
R. A. 611 1203, 1246, 1247, 1248
Basshor v. Dressel, 34 Md.
503 232
Basshor Co. v. Carrington, 104
Md. 606 1556
Bastian v. Modem Woodmen,
166 111. 595 ; 46 N. E. 109Q 1008,
1009
Batard v. Hawes, 2 E. & B.
287 274, 337, 337
Batchelder v. Council Grove
Co., 131N. Y.42; 29 N. E.
801 1467, 1467
Bateman v. Straus, 86 N. Y.
App. Div. 540; 83 N. Y.
Supp. 785 786
Bates V. Androscoggin, etc.
R. R. Co., 49 Me. 491 155, 457,
458, 463, 463, 466, 1114, 1131,
1132, 1136
V. Coronada Beach Co.,
109 Cal. 160; 41 Pac. 855 80,80
V. Great Western Tel.
Co., 134 111. 536; 25 N. E.
521 163
V. Keith Iron Co., 7
Mete. (Mass.) 224 1381, 1382
V. Mackinley, 31 Beav.
280 1137
V. N. Y. Ins. Co., 3 Johns
Cas. (N. Y.) 238 773, 1124
V. Wilson, 14 Colo. 140;
24 Pac. 99 105, 122
Bath's Case, 8 Ch. D 334 92, 525,
525
Bath Gas Light Co. v. Claffy,
151N. Y.24; 45N.E. 390;
36 L. R. A. 664 852, 855, 863
Bath Savings Institution v.
Sagadahoc Nat. • Bank, 89
Me. 500; 36 Atl. 996 692
Bathe t). Decatur County Agri-
cultural Soc, 73 Iowa 11;
5 Am. St. Rep. 651; 34
N. W. 484 870
Battelle v. Northwestern Ce-
ment, etc. Co., 37 Minn. 89;
33 N. W. 327 280, 280, 284,
287, 1309, 1310
Batten v. Wedgewood Coal
Co., 28 Ch. D. 317 1655
TABLE OF CASES
[The references are to pages]
Battle's Case, 39 L. J. Ch.
391 764, 766
Baty V. Keswick, 85 L. T.
N. s. 18 360
Bauer v. Samson Lodge, 102
Ind. 262; 1 N. E. 571 576,
593, 948
Bauernschmidt v. Bauem-
schmidt, 101 Md. 148; 60
Atl. 437 884
V. Md. Trust Co., 89 Md.
507; 43 Atl. 790 1412
Bauernschmidt's Estate, Re,
, 97 Md. 35; 54 Atl. 637 873, 884
Baueitsmith v. Extreme Gold,
etc. Co., 146 Fed. 95 354
Baugher v. Merryman, 32
Md. 185 812
Baumhoff v. St. Louis, etc. R.
R. Co. (Mo.), 104 S. W.
5 199, 786
Bausman v. Kimiear, 79 Fed.
172; 24 C. C. A. 473 612
Bauter v. Superior Court
(Cal.), 91 Pac. 749 906, 1367
Bay City Bridge Co. v. Van
Etten, 36 Mich. 210 1259, 1285,
1285
Bay City Irrigation Co., 135
Fed. 850 44
Bayard v. Farmers', etc.
Bank, 52 Pa. St. 232 748, 792,
797, 799
Bayles v. Kansas Pac. Ry.
Co., 13 Colo. 181; 22 Pac.
341; 5 L. R. A. 480 1610, 1643
V. Vanderveer, UN. Y.
Misc. 207; 32 N. Y. Supp.
1117 1270
Bayless v. Bybee, 1 Freem.
Ch. (Miss.) 161 928, 1183, 1184
Bayliss v. Lafayette, etc. Ry.
Co., 9 Biss. 90 1567
Bayou Cook, etc. Co. v.
DouUut, 111 La. 517; 35
So. 729 46, 113
Beach v. Fulton Bank, 3
Wend. (N. Y.) 573 86
V. McKinnon, 148 Fed.
734 1296, 1327
V. Miller, 130 111. 162;
22 N. E. 464; 17 Am. St.
Rep. 291 1315
V. Smith, 30 N. Y. 116 645
V. Stouffer, 84 Mo. App.
395 912, 917, 1238, 1322
V. Wakefield, 107 Iowa
'567; 76 N. W. 688; 78
N. W. 19':' 109, 852, 867, 1503
Beacon Trust Co. v. Souther,
183 Mass. 413; 67 N. E.
345 86
Beaconsfield Heights Estate
Co., 22 Vict. L. R. 97 524, 524,
1074, 1190
Beadleson v. Knapp, 13 Abb.
Pr. N. s. 335 1493
Beal V. Dillon, 5 Kans. App.
27; 47 Pac. 317 66
Beale v. Mouls, 10 Q. B. 976 309
Beals V. Illinois, etc. R. R.
Co., 133 U. S. 290; 10 Sup.
Ct. 314 _ 1485
V. Illinois, etc. R. R. Co.,
27 Fed. 721 1485
Bean v. Am. L. & T. Co.,
122 N. Y. 622; 26 N. E.
11 733, 802
Bear River, etc. Co. v. Han-
ley, 15 Utah 506; 50 Pac.
611 854
Bear Valley Land, etc. Co. v.
Savings & Trust Co., 117
Fed. 941 833
Beardslee v. Shickler (Pa.), 68
Atl. 44 511
Beardsley v. Beardsley, 138
U. S. 262; 11 Sup. Ct. 318 787,
1081, 1084
V. Johnson, 121 N. Y.
224; 24 N. E. 380 998, 1035,
1167
Beasleyv. Aberdeen, etc. R.
R. Co. (N. Car.), 59S. E.
60 822
Beaver Knitting Mills, 154
Fed. 320 86, 1187
Becher v. Wells Flouring
Mill Co., 1 Fed. 276 1062
Bechuanaland Exploration
Co. V. London Trading
Bank (1898), 2 Q. B. 658 1423,
1424, 1425, 1429
Beck's Case, 9 Ch. 392 171
Becker v. Berlin, etc. Soc, 144
Pa. St. 232; 22 Atl. 699;
27 Am. St. Rep. 624 684
V. Farmers' Mut. Ins.
Co., 48 Mich. 610; 12N.W.
874 _ 584
Becket v. Uniontown Bldg. •
Ass'n, 88 Pa. St. 211 112
Beckett v. Houston, 32 Ind.
393 1014, 1017
Beckhanson & Gibbs v. Ham-
blet (1901), 2 K. B. 73 779
Beckwith v. Galice Mines Co.
(Oreg.), 93 Pac. 453 _ 723
TABLE OF CASES
[The references are to pages]
Beckwith v. Trustees of Hart-
ford, etc. R. R., 29 Conn.
268; 76 Am. Dec. S99 1441
V. Windsor Mfg. Co., 14
Conn. 594 399
— — , Ex parte (1898), 1 Ch.
324 1241
Bedford v. American Alumi-
num Co., 61 N. Y. App. Div.
537 ; 64 N. y . Supp. 856 429, 430
Bedford R. R. Co. v. Bowser,
48 Pa. St. 29 189,
191, 516, 524
Bedford Springs Co. v. Mc-
Meen, 161 Pa. St. 639; 29
Atl. 99 1250
Bedford, etc. Ry. Co. v. Stan-
ley, 2 Johns. & H. 746 281
Beebe v. George H. Beebe &
Co., 64 N. J. Law, 497; 46
Atl. 168 1370, 1373, 1382
V. Richmond Power Co.,
13N.y.Misc.737;35N.Y.
Supp. 1 1503, 1586
Beeoher v. Marquette, etc. Co.
45 Mich. 103 ; 7 N. W. 695 1007,
1073
Beekman v. Hudson River,
etc. Ry. Co., 35 Fed. 3 1587,
1588, 1593
Beers v. Bridgeport Spring Co.
42 Conn. 17 1112, 1116, 1120,
1121
V. New York Life Ins.
Co., 66 Hun 75; 20 N. Y.
Supp. 788 593, 1189, 1238,
1299, 1299
V. Phoenix Glass Co., 14
Barb. (N. Y.) 358 1377
V. Wabash, etc. Ry. Co.,
34 Fed. 244 1621
Behlow V. Fischer, 102 Cal.
208; 36 Pac. 509 777
Belch V. Big Store Co. (Wash.),
89 Pac. 174 80
Belden v. Burke, 147 N. Y.
542; 42 N. E. 261 1556
Belfast, etc. Plank Road Co.
V. Chamberlain, 32 N. Y.
651 101, 148
Belfast, etc. R. R. Co. v. Bel-
fast, 77 Me. 445 ; 1 Atl. 362 453,
453, 457, 459, 466, 1104, 1110
Belknap v. Adams, 49 La.
Ann. 1350; 22 So. 382
Belknap Savings Bank
Lamar Land, etc. Co.,
Colo. 326; 64 Pac. 212
521
V.
28
1646,
1650
Bell V. Chicago, etc. R. R. Co.,
34 La. Ann. 785 1503
1). City of Louisville
(Ky.), 106 S. W. 862 877
V. Standard Quicksilver
Co., 146 Cal. 699; 81 Pac.
17 1197, 1200
Bell & Coggeshall Co. v. Ky.
Glass-Works Co., 20 Ky.
Law Rep. 1684; 50 S. W. 2 65,
109, 110, 115, 142, 859, 1408,
1409
Bell Bros., 65 L. T. 245 764, 765,
765, 765, 765, 795
Bell's Appeal, 115 Pa. St. 88;
8 Atl. 177; 2 Am. St. Rep.
532 617
Bell's Case, 4 A. C. 547 800
Bell's Gap R. R. Co. v. Christy,
79Pa. St. 54; 21 Am. Rep.
39 293, 294
Bellerby v. Rowland, etc. S. S.
Co. (1902), 2 Ch. 14 521, 524,
524, 524
Bellina, etc. Tramway Co.
(1888), 21 L. R. Ir. 497 1171
Bellona Company's Case, 3
Bland (Md.) 442
Bellows V. Todd, 39 Iowa 209
873
1008,
1208
Belmont v. Erie Ry. Co., 52
Barb. (N. Y.) 637 485, 485, 485,
957, 965, 974
Benbow v. Cook, 115 N. Car.
324; 20 S. E. 453; 44 Am.
St. Rep. 454 147, 406, 911,
1005, 1005, 1006, 1006
Bend v. Susquehanna Bridge
Co.,6H. &J. (Md.)128; 14
Am. Dec. 261 617, 622, 812
Benedict v. Denton, Walker
Ch. (Mich.) 336 408
V. St. Joseph, etc. R. R.
Co., 19 Fed. 173 1496, 1604
Benevolent Society, 10 Phila.
(Pa.) 19 113, 267
Benjamin v. Ehnira, etc. R. R.
Co., 49 Barb. (N.Y.) 441
Bennett v. Milville Imp. Co.,
67 N. J. Law 320; 61 AtL
706
Bennett's Case, 5 De G. M. &
G. 284 766, 1327
Bensiek v. Thomas, 66 Fed.
104; 13 C. C. A. 457 1317
Benson v. Heathom, 1 Y. &
C. Ch. 326 1331, 1332
V. San Diego, 100 Fed.
158 1554, 1587
1420
1113
TABLE OF CASES
[The references are to pages]
Bent V. Priest, 86 Mo. 475 1333,
1346
V. TJnderdown, 156 Ind.
516; 60 N. E. 307 111, 115, 142,
628
Bentham Mills Co., 11 Ch. D.
900 679, 793
Bentinck v. Fenn, 12 App.
Cas. 652 315, 323, 323, 327,
328, 1263, 1345
, Ex parte, 1 Megone 23 764
, Ex parte, 1 Megone 12 642,
642, 1230
Bentley, Ex parte, 12 Ch. D.
850 642, 1325
Benzinger v. Kantzler, 112
111. App. 293 1163
Bercich v. Marye, 9 Nevada
312 683, 694
Berg V. San Antonio Street
Ry. Co., 17 Tex. Civ. App.
291;42S.W. 647;43S.W.
929 486
BergdoU v. BergdoU Brewing
Co., 10 Pa. Dist. Rep. 173 1321,
1322
Bergen v. Porpoise Fishing
Co., 41 N. i. Eq. 238; 3
Atl. 404 279
V. Porpoise Fishing Co.,
42N.J.Eq.397; 8 Atl. 523 1406
V. Valentine, 63 How. Pr.
(N. Y.) 221 1446
Berger v. U. S. Steel Corp., 63
N. J. Eq. 809; 53 Atl. 68 519,
534, 534, 542, 542
Bergeron v. Hobbs, 96 Wise.
641; 71 N. W. 1056; 65
Am. St. Rep. 85 123, 124, 246,
251
Bergman v. St. Paul, etc.
Bldg. Ass'n, 29 Minn. 275;
13 N. W. 120 562, 565
Berkhout v. Royal Arcanum,
62 N. J. Law 103 ; 43 Atl. 1 580
Berks & Dauphin Turnpike
Road V. Myers, 6 S. & R.
(Pa.) 12; 9 Am. Dec. 402 380,
407, 525
Berkson, Hughes & Co. v.
Anderson, 115 Iowa 674;
87 N. W. 402 . 128
Berlin v. New Britain, 9 Conn.
175 (1832) 827
Bernard v. Union Trust Co.,
159 Fed. 620 1641, 1646, 1651
Bemheimer v. Converse, 27
Super. Ct. 755 43
Bernstein v. Kaplan (Ala.), 43
So. 581 103, 134, 139
Berry v. Rood, 168 Mo. 316;
67 N. W. 644 628, 629, 635,
647, 649
V. Yates, 24 Barb.(N. Y.)
199 76
Berryville Land, etc. Co. v.
Lewis, 19 S. E. Rep. 781
(Va.) 183
Berwind v. Canadian Pac.
Ry. Co., 98 Fed. 158 941
— : — V. Van Home, 104 Fed.
581 1354
Besch V. Western Carriage
Mfg. Co., 36 Mo. App. 333 1211
Besley, Ex parte, 3 Mac. & G.
287 309
Best V. British & Am. Mort-
gage Co., 131 N. Car. 70;
42 S. E. 456 1365
Best Brewing Co. v. Klassen,
185 111. 37; 57 N. E. 20;
76 Am.St. Rep. 26; 50 L. R.
A. 765 42, 84, 851
Bestor v. Wathen, 60 111. 138 1348
Bethune v. Wells, 94 Ga. 486;
21 S. E. 230 972
Bevan v. Waterhouse, 3 Ch.
D. 752 815
Beveridge v. New York
Elevated R. R. Co., 112
N. Y. 1; 19 N. E. 489; 2
L. R. A. 648 1107, 1110, 1187
Bevier, etc. Coal Co. v. Wat-
son, 107 Mo. App. 451 ; 80
S. W. 287 1321
Bianki v. Greater-American
Exhibition Co., 3 Nebr.
(Unof.) 656; 92 N. W.
615 1355
Bibb V. Hall, 101 Ala. 79; 14
So. 98 1234
V. Montgomery Iron
Works, 101 Ala. 301; 13
So. 224 1401, 1527
Bibber-White Co. v. White
River, etc. R. Co., 110 Fed.
473 1607, 1623
V. White River, etc. Co.,
115 Fed. 786; 53 C. C. A.
282 1646, 1651
Bickford v. Grand Junction
Ry. Co., 1 Can. Sup. Ct.
Rep. 696 65
Biddle v. Bayard, 13 Pa. St.
150 726
Biddle's Appeal, 99 Pa. St.
278 502
TABLE OF CASES
[The references are to pages]
Bidwell V. Pittsburgh, etc.
Ry. Co., 114 Pa. St. 535; 6
Atl. 729 651
Bidwell Bros., Be (1893), 1
Ch. 603 1036, 1044
Bigbee, etc. Packet Co. v.
Moore, 121 Ala. 379; 25 So.
602 846, 1133
Big Creek, etc. Iron Co. v.
American L. & T. Co., 127
Fed. 625; 62 C. C. A. 351 986,
1399
Bigelow V. Calumet, etc. Min-
ing Co., 155 Fed. 869 57, 78,
947, 949, 1026, 1063
V. Gregory, 73 lU. 197 123,
128 251
Bigg's Case, 1 Eq. 309 ' 660
Biggerstaff v. Rowatt's
Wharf (1896), 2 Ch. 93
1370, 1545
Biglin V. Friendship Ass'n,
46 Hun (N. Y.) 223 430
Bignold, Ex parte, 22 Beav.
143 1291
Bill V. Darenth Valley Ry. Co.,
1 H. & N. 305 1223, 1228
V. Western Union Tel.
Co., 16 Fed. 14 931, 943, 1080,
1306, 1313
Billingham v. Gleason Mfg.
Co., 43 N.Y. Misc. 681; 88
N. Y. Supp. 398 908, 908
V. Gleason Mfg. Co., 101
N. Y. App. Div. 476; 91
N. Y. Supp. 1046 1114, 1116
Bills V. Silver King Mining
Co., 106 Cal. 9; 39 Pac. 43 1122
Bimber v. Calivada Coloniza-
tion Co., 110 Fed. 58 969
Binney's Case, 2 Bland Ch.
(Md.) 99 70, 382
Birch V. Cropper, 14 A. C. 525 433,
436, 471
Bird V. Dagett, 97 Mass. 494 95,
862
V. People's, etc. Co., 158
Fed. 963 1587
Bird Coal & Iron Co. v.
Humes, 157 Pa. St. 278; 27
Atl. 750; 37 Am. St. Rep.
727 972, 1079, 1335
Bird's Case, 1 Sim. N.s. 47 221,223
Birdsall v. Russell, 29 N. Y.
220 1435, 1530
Birkenhead, etc. Ry. Co. v.
Brownrigg, 4 Ex. 426 922
Birmingham Banking Co.,
36 L. J. Ch. 150 897
Birmingham Drug Co. v. Free-
man, 15 Tex. Civ. App. 451 ;
39 S. W. 626
Birmingham Fire Ins. Co. v.
Comm., 92 Pa. St. 72
Birmingham Nat. Bank v.
Roden, 97 Ala. 404; 11 So.
883
Birmingham Ry., etc. Co.
V. Birmingham Traction
Co., 128 Ala. 110; 29 So.
187
Birmingham Trust, etc. Co. v.
East Lake Land Co., 101
Ala. 304; 13 So. 72
V. Louisiana Nat. Bank,
99 Ala. 379; 13 So. 112; 20
L. R. A. 600 769, 774, 775
Birmingham, etc. Ry. Co. v.
Locke, 1 Q. B. 256
V. White, 1 Q. B. 282
Bimey v. Toronto Milk Co.,
5 Ont. L. Rep. 1
Biron's Case, 26 W. R. 606
Bisgood V. Nile Valley Co.
(1906), 1 Ch. 747 72, 78, 654
Bishop V. American Preser-
vers Co., 157 111. 284; 41
N. E. 765; 48 Am. St. Rep.
317
V. Globe Co., 135 Mass.
132 761, 771, 772
V. Kent & Stanley Co., 20
R. I. 680; 41 Atl. 255
V. McKillican, 124 Cal.
321; 57 Pac. 76; 71 Am.
St. Rep. 68
V. Smyrna, etc. Ry.
(1895), 2 Ch. 265 471, 1101
V. Smyrna, etc. Ry.
Co., No. 2 (1895), 2 Ch.
596 472, 472
Bissell V. Bradford Tramway
Co., W. N. (1891) 51
V. Michigan Southern
R. R. Co., 22 N. Y. 258
Bjorgaard v. Goodhue County
Bank, 49 Minn. 483; 52
N. W. 48
Black V. First Nat. Bank, 96
Md. 399; 54 Atl. 88 844,853
V. Hobart Trust Co., 64
N.J. En. 415; 53 Atl. 826;
affirmed in 65 N. J. Eq.
769; 56 Atl. 1131 451, 452
V. Homersham, 4 Ex. D.
24 1134
V. Wiedersheim, 143 Fed.
359 1489
1188
751
195
912
776
925
895
391
1171
79
1221
1495
1603
869
1080
TABLE OP CASES
[The references are to pages]
Black i>. Zacharie, 3 How. 483
697,
716
Black & Co.'s Case, 8 Ch. 254 191,
612, 634
Black & White Smiths' Soc. v.
Vandyke, 2 Whart. (Pa.)
309; 30 Am. Dec. 263 577
Black River, etc. R. R. Co. v.
Clarke, 25 N. Y. 208 237, 238
Blackburn Bldg. Soc. v. Cun-
liffe. Brooks & Co., 22
Ch. D. 61 831
V. Cunliffe, Brooks &
Co., 29 Ch. D. 902 831
Blackwell v State, 36 Ark.
178 1164
Blackwell's Durham Tobacco
Co. V. Am. Tobacco Co. (N.
Car.), 59 S.' E. 123 371, 372,
379
Blair v. City of Chicago, 201
U. S. 400; 26 Sup. Ct. 427 107,
836, 837
V. Metropolitan Savings
Bank, 27 Wash. 192; 67
Pac. 609 70, 588
V. St. Louis, etc. Ry. Co.,
20 Fed. 348 1603, 1621
V. St. Louis, etc. Ry. Co.,
20 Fed. 351 1567, 1621
V. St. Louis, etc. R. Co.,
22 Fed. 471 1559, 1561, 1564,
1572
V. St. Louis, etc. Ry. Co.,
23 Fed. 521 1567, 1572
D.'St. Louis, etc. Ry. Co.,
23 Fed. 524 1416, 1670
V. St. Louis R. Co., 25
Fed. 232 1564, 1629
V. St. Louis, etc. R. R.
Co., 25 Fed. 684 910
V. Telegram Newspaper
Co., 172 Mass. 201; 51
N. E. 1080 955, 979
Blair Town Lot, etc. Co. v.
Walker, 50 Iowa 376 1348
Blaisdell v. Bohr, 68 Ga. 56 754,
755, 757
Blake v. Bayley, 16 Gray
(Mass.) 531 918, 1166
V. Buffalo Creek R. R.
Co., 56 N. Y. 485 1340
V. Domestic Mfg. Co.
(N. J.), 38 Atl. 241 1379, 1380
V. Ray (Ky.), 62 S. W.
531 _ 1318
V. Supervisors of Living-
ston Co., 61 Barb. 149 1424
Blake's Case, 34 Beav. 639 176
Blakely Ordnance Co., 3 Ch.
154 1420, 1421
Blaker v. Herts, etc. Water-
works Co., 41 Ch. D. 399 1605,
1606
Blalock V. Kemsville Mfg. Co.,
110 N. Car. 99; 14 S. E.
501 517, 519
Blanchard v. Cooke, 144 Mass.
207; 11 N. E. 83 1504
V. KauU, 44 Cal. 440 252
Bland's Case (1893), 2 Ch.
612 319, 320, 329
Blanks v. Farmers' L. & T.
Co., 122 Fed. 849; 59 C. C.
A. 59 1636, 1637
Blanton v. Kentucky Distil-
leries, etc. Co., 120 Fed. 318 917
Blatchford v. Ross, 54 Barb.
(N. Y.) 42 1189
V. Ross, 37 How. Pr.
(N.Y.)llO 976
Blen V. Bear River, etc. Co.,
20 Cal. 602; 81 Am. Dec.
132 1374
Bligh V. Brent, 2 Y. & C. Ex.
268 420
Blinn v. Gillett, 208 111. 473;
70 N. E. 704; 100 Am. St.
Rep. 234 1144, 1154, 1156
V. Riggs, 1 10 111. App. 37 1080,
1250
Bliss V. Harris (Colo.), 87 Pac.
1076 407, 408, 408, 1376
V. Kaweah, etc. Co., 65
Cal. 502 ; 4 Pac. 507 407, 408,
1372
Bloede Co., Victor G., v.
Joseph Bancroft & Sons Co., -
98 Fed. 175 890
V. Bloede, 84 Md. 129 ; 34
Atl. 1127; 57 Am. St. Rep.
373; 33L. R. A. 107 571,679
Blood V. La Serena, etc. Co.,
113 Cal. 221; 41 Pac. 1017;
45 Pac. 252 299, 408,
408
V. Marcause, 38 Cal. 590;
99 Am. Dec. 435 1377
Bloom V. Nat. Saving, etc. Co.
152N.Y. 114;46N.E. 166 1278,
1350, 1351
Bloomenthal v. Ford (1897), ,
A. C. 156 649
Bloomer v. Union Coal, etc.
Co., 16 Eq. 383 1504
Blooming-Grove Cotton Oil
Co. V. First Nat. Bank, 56
S. W. 552 (Tex.) 695, 1130
TABLE OF CASES
[The references are to pages]
Blount V. Hipkins, 7 Sim. 51 789
Bloxam v. Metropolitan Ry.
Co., L. R. 3 Ch. 337 968, 1104
Bloxam's Case, 33 Beav. 529 166
Bluck V. Mallalue, 27 Beav.
398 199
Bluehill Academy v. Witham,
13 Maine 403 280
Blue Mt. Forrest Ass'n v.
Borrowe, 71 N. H. 69; 51
Atl. 670 562, 571, 573, 575, 576
Blum V. Whitney, 185 N. Y.
232 330
Blumenf eldt v. Korschuck, 43
111. App. 434 948
Blumentnal v. Brainerd, 38
Vt. 402; 91 Am. Dee. 349 1616
Blumer v. Ubner (Miss.), 44
So. 161 949, 1355
Blundell v. Winsor, 8 Sim. 601 7
Blyth's Case, 4 Ch. D. 140 154,
640, 640
Board of Comm'rs v. Shields,
62 Mo. 247 244
Board of Comm'rs of Hamil-
ton Co. V. State ex rel.
Cottingham, 115 Ind. 64; 4
N. E. 589; 17 N. E. 855 1514
Board of Comm'rs of Ouray
County V. Geer, 108 Fed.
478; 47 C. C. A. 450 1449
Board of Supervisors v. Min-
eral Point R. R. Co., 24
Wise. 93 1421, 1485, 1533
Board of Trustees v. Piedmont
Realty Co., 134 N. Car. 41;
46 S. E. 723 853
Board of Trustees of Seventh
St., etc. Church v. Campbell,
48 La. Ann. 1543; 21 So.
. 184 117
Boardman v. Boardman, 78
Conn. 451; 62 Atl. 339 1144
V. Cutter, 128 Mass. 388 422
V. Lake Shore, etc. Ry.
Co., 84 N. Y. 157 " 447, 457, 458,
459, 459, 460, 465, 466, 467,
467, 1131, 1132, 1136
Boatmen's Bank v. Gillespie
(Mo.), 108 S. W, 74 1208
Boatmen's Ins. & Trust Co. v.
Able, 48 Mo. 136 702, 781
Boca, etc. R. R. Co. v. Sierra
Valley Ry. Co., 84 Pac. 298
(Cal.) 138, 141, 250
BodegaCo. (1904), 1 Ch. 276 1168,
1179, 1179, 1240, 1240, 1319
Bodman, Re (1891), 3 Ch. 135 414,
454, 1397
Bodwic V. Fennell, 1 Wils. 233 595
Bogardus v. Trinity Church, 4
Paige (N. Y.) 178 849
Bogart V. New York, etc. R.
Co., 102 N. Y. Supp. 1093 1246,
1373
Boggs V. Boggs & Buhl (Pa.),
66 Atl. 105 573, 786
V. Lakeport, etc. Ass'n,
111 Cal. 354; 43 Pac. 1106 917
Bohm V. Loewer's, etc. Brew-
ery Co., 9 N. Y. Supp. 514;
16 Daly's Rep. (N. Y.) 80 592
Bohmer v. City Bank, 77 Va.
445 770, 773, 773
Bohn V. Boone Bide. & Loan
Ass'n (Iowa), 112 N. W. 199 63
Bohrer v. Adair, 61 Nebr. 824;
86 N. W. 495 625
Boice V. Jones, 106 N. Y. App.
Div. 547; 94 N. Y. Supp.
896 336, 336
Bolckow V. Heme Bay Pier
Co., 1 E. & B. 74 1528, 1528
Boldenwick v. BuUis (Colo.),
90 Pac. 634 967, 971
Boley V. Sonora Development
Co. (Mo.), 103 S. W. 975 192
Bolt & Iron Co., 14 Ont. 211 1238,
1247
Bolton V. Natal Land Co.
(1892), 2 Ch. 124 1092, 1096,
1098
V. Nebraska Chicory Co.,
69 Nebr. 681 ; 96 N. W. 148 43
V. Prather, 35 Tex. Civ.
App. 295; 80 S. W. 666 143
Bolton & Co., R. (1894), 3 Ch.
356 1172, 1173
Bombay Burmah Trading
Corp. V. Dorabji Cursetji
Shroff (1905), A. C. 213 1041,
1043
Bomer v. Am. Spiral, etc. Co.,
81 N. Y. 468 286, 288
Bon Aqua Imp. Co. v. Stand-
ard Fire Ins. Co., 34 W. Va.
764; 12 S. E. 771 233
Bond V. Barrow Haematite
Steel Co. (1902), 1 Ch. 353 464,
465, 1091, 1099, 1102, 1102
V. Bean, 57 N. H. 340 712
1). Gray Imp. Co., 102
Md. 426; 62 Atl. 827 938, 984
V. Mount Hope Iron Co.,
99 Mass. 505; 97 Am. Dec.
49 748
V. Pike (Minn.), Ill
N. W. 916 287, 287, 294
TABLE OP CASES
[The references are to pages]
Bond V. Terrell, etc. Mfg. Co.,
82 Tex. 309; 18 S. W. 691
852,
867
847
452
1433
1030
1206
904
1621
157
914
Bondholders of York & Cum-
berland R. R. Co., Be, 50
Me. 552 1493, 1495
Bone V. Delaware, etc. Canal
Co. (Pa.), 5 Atl. 751
Boney v. Williams, 55 N. J.
Eq. 691; 38 Atl. 189
Bonner v. City of New Orleans,
2 Woods 135
Bonnet v. First Nat. Bank, 24
Tex. Civ. vApp. 613; 60
S. W. 325 501, 507
Bonsall v. Piatt, 153 Fed. 126 309
Bonta V. Gridley, 77 N. Y.
App. Div. 33; 78 N. Y.
Supp. 961
Booker V. Crocker, 132 Fed. 7;
65 C. C. A. 627 1524, 1529
V. Young, 12 Gratt. (Va.)
303
Boord V. African Consolidated,
etc. Co. (1898), 1 Ch. 596
Booths. Brown, 62 Fed. 794
V. Campbell, 37 Md.
522
V. Dexter Steam Fire
Engine Co., 118 Ala. 369;
24 So. 405
V. Land Filling, etc. Co.,
59 Atl. (N. J.) 767 966, 1083,
1312
V. New Afrikander Gold
Mining Co. (1903), 1 Ch.
295 352, 354, 355
V. Robinson, 55 Md. 419 63,
65, 75, 76, 974, 976, 1161,
1271, 1274, 1274, 1306
V. Wonderly, 36 N. J.
Law 250 245, 246, 252
Booth Bros. v. Baird, 83 N. Y.
App. "Div. 495; 82 N. Y.
Supp. 432
Booz's Appeal, 109 Pa. St.
592; 1 Atl. 36
Borax Co. (1901), 1 Ch. 326
Borden v. Crook, 131 111. 68;
22 N. E. 793; 19 Am. St.
Rep. 23
Borland's Trustee v. Steel
Bros. & Co. (1901), ICh. 279
421, 564, 575, 575, 576,
677, 994, 1010
Bornstein v. District Grand
Lodge (Cal.), 84 Pac. 271
586, 587
Borough of Portsmouth, etc.
853
565
1548
1502
54,
Tramways Co. (1892), 2
Ch. 362 1529
Bosanquet v. St. John D'el
Rey Mining Co., 77 L. T.
206 1104, 1545
Boschoek Proprietary Co. v.
Fuke (1906), 1 Ch. 148 588,
996, 1004, 1177, 1320
Bosher v. Land Co., 89 Va.
455; 16S. E. 360; 37 Am.
St. Rep. 879 182, 342
Bostock V. Blakeney, 2 Bro.
Ch. 653 1156
V. Edgar, 24 Vict. L. R.
677 662, 961, 962
Boston V. Simmons, 150 Mass.
461; 23 N. E. 210; 15 Am.
St. Rep. 230; 6L.R.A.629 1270
Boston Acid Mfg. Co. v. Mor-
ing, 15 Gray (Mass.) 211 558
Boston Deep Sea, etc. Co. v.
Ansell, 39 Ch. D. 339 1183,
1241, 1305, 1333
Boston Music Hall v. Cory,
129 Mass. 435 715
Boston Rubber Shoe Co. ■;;.
Boston Rubber Co., 149
Mass. 436; 21 N. E. 875
372, 373
Boston Tailoring House v.
Fisher, 59 111. App. 400
1373, 1382
Boston, etc. R. R. Co. v.
Coffin, 50 Conn. 150 1511
V. Graves, 80 Fed. 588 1285
V. Richardson, 135 Mass.
473 738, 758, 759
V. Wellington, 113 Mass.
79 608
Boston, etc. R. R. Corp. v.
Haven, 8 Allen (Mass.) 359 1490,
1490, 1491
Boston, etc. Trust Co. v.
Chamberlain, 66 Fed. 847;
14 C. C. A. 363 1621, 1621
Boswell V. Buhl, 213 Pa. 450;
63 Atl. 56 573
Bosworth V. Allen, 168 N. Y.
157; 61 N. E. 163; 85 Am.
St. Rep. 667; 55 L. R. A.
751 1161, 1161, 1181, 1259,
1262, 1337
Botsford V. New Haven, etc.
R. R. Co., 41 Conn. 454 1539
Bottomley's Case, 16 Ch. D.
681 1205
Bouch V. Sproule, 12 A. C. 385
498, 498, 1139, 1139, 1139, 1139,
1140, 1141, 1142
TABLE OF CASES
[The references are to pages]
629
337
1560
1560
907
260
528
230
618
1329
1527
Bouchard ■». Prince's Hall
Restaurant, 20 Times L. R.
574
Boulter v. Peplow, 9 C. B. 493
Boulton Carbon Co. v. Mills,
78 Iowa 460; 43N.W.290;
5 L. R. A. 649 612, 635
Bound V. South Carolina Ry.
Co., 47 Fed. 30
V. South Carolina Ry.
Co. 50 Fed. 312
V. South Carolina Ry.
Co., 58 Fed. 473; 7C. C. A.
322 1563, 1624, 1625, 1631
Bourdette v. Sieward, 107 La.
258; 31 So. 630
Bousfield V. Wilson, 16 M. &
W. 185
Bouton V. Dement, 123 111.
142; 14 N. E. 62
Bow V. AUenstown, 34 N. H.
351; 69 Am. Dec. 489
Bowden v. Johnson, 107 U. S.
251; 2Sup. Ct. 246
Bowditch V. New England Life
Ins. Co., 141 Mass. 292 ; 4 N.
E.798; 55 Am. Rep. 474
Bowen v. Brecon Ry. Co., 3
Eq. 541
V. Kuehn, 79 Wise. 53 ;
47 N. W. 374 433, 602
V. Needles Nat. Bank, 94
Fed. 925; 36 C. C. A. 553 84,
838
Bowers v. Hechtman, 45
Minn. 238 ; 47 N. W. 792 405, 409
V. Male, 186 N. Y. 28 1266
Bowlby V. Bell, 3 C. B. 284 422
Bowler v. American Box
Strap Co., 22 N. Y. Misc.
335; 49 N. Y. Supp. 153
Bowling Green Trust Co. v.
Virginia Pass. etc. Co., 132
Fed. 921 1585, 1587
V. Virginia Pass. etc. Co.,
133 Fed. 186
Bowman v. Foster, etc. Hard-
ware Co., 94 Fed. 592 834, 835
Bowman Dairy Co. v. Mooney,
41 Mo. App. 665 95, 854, 854
Bowne v. Smith, 44 N. Y.
Misc. 575; 90 N. Y. Supp.
204
Bowring V. Shepherd, L. R. 6
Q. B. 309
Box, Re, 1 Hem. & Mill. 552
789, 816
Boyce v. Augusta Camp, 14
OM. 642; 78 Pac. 322 384
1238
1602
942
782
1432
1288
Boyce v. Continental Wire
Co., 125 Fed.740; 60 C. C.
A. 508 1518, 1638
V. Trustees Towsontown
Sta. of M. E. Church, 46
Md. 359 221, 236, 238, 241
Boyd V. American Carbon
Black Co., 182 Pa. St. 206;
37 Atl. 937 79, 852
V. Chesapeake, etc. Canal
Co., 17 Md. 195; 79 Am.
Dec. 646 1551
V. Conshohocken Worsted
Mills, 149 Pa. St. 363; 24
Atl. 287 810, 811, 1131
V. Keimedy, 38 N. J. Law
146
V. Mutual Fire Ass'n, 116
Wise. 155; 90 N. W. 1086;
94 N. W. 171
V. Peach Bottom Ry. Co.
90 Pa.,jSt. 169 189, 191
V. ReSd, 120 N. Car. 335;
27S.E.35; 58 Am. St. Rep.
792 768, 775
V. Schneider, 131 Fed.
223; 65 C. C. A. 209 1285, 1357
Boyer, Ltd., Paul,'». Edwardes,
17 Times L. R. 16 355, 356
Boylan v. Huguet, 8 Nevada
345
V. Kelly, 36 N. J. Eq. 331
Boyle V. Farmers' L. & T. Co.,
88 Fed. 930; 32 C. C. A.
142
Boyle's Case, 54 L. J. Ch.
550
Boynton v. Roe, 114 Mich.
401; 72 N. W. 257 1187, 1201
Bracken v. Nicol (Ky.), 99
S. W. 920 616, 696
Brackett v. Persons Un-
known, 53 Me. 228
Braddock v. Philadelphia, etc.
R. R. Co., 45 N. J. Law 363
418
1397
1631
168
924
602,
604
Braddock Borough v. Penn
Water Co., 189 Pa. St. 379;
42 Atl. 15 123, 147
Bradford v. Frankfort, etc.
R. R". Co., 142 Ind. 383; 40
N. E. 741; 41 N. E. 819 1224
V. Harris, 77 Md. 153 ; 26
Atl. 186 343
Bradford Banking Co. v.
Briggs, 12 A. C. 29 769, 774, 796
Bradlee v. Warren Five Cent
Sav. Bank, 127 Mass. 107;
34 Am. Rep. 351 1380
TABLE OF CASES
[The references ate to pages]
Bradley v. Ballard, 55 111. 413 ;
8 Am. Rep. 656 861
V. Chester Valley R. R.
Co., 36 Pa. St. 141 1581, 1601
V. Carritt (1903), A. C.
253 1029
V. Holdsworth, 3 M. &
W. 422 420
Bradley Fertilizer Co., 19 Pa.
Co. Ct. 271 129, 375, 379
Bradley Fertilizer Co. v. South
Pub.Co.,17N.Y.Supp.587 298
V. South Pub. Co., 4
N. Y. Misc. 172; 23 N. Y.
Supp. 675 236, 246, 247, 279
Bradshaw, Ex parte, 15 Ch.
D. 465 1499, 1513, 1639
Brady v. Johnson, 75 Md.
445; 26 Atl. 49; 20 L. R.
A. 737 1508, 1551
V. State, 26 Md. 290
1515, 1551
Brainerd v. New York, etc.
R. R. Co.,25N. Y. 496 1423,
1432
V. Peck, 34 Vt. 496 1512,
1513, 1551
Braintree Water Co. v. In-
habitants of Braintree, 146
Mass. 482; 16 N. E. 420 219
Bramblet v. Commonwealth
Land, etc. Co., 26 Ky. Law
Rep. 1176; 83 S. W. 599;
27 Ky. Law Rep. 156; 84
S. W. 545 1165, 1166, 1304,
1342
Brampton & Longtown Ry.
Co., Re, 10 Ch. 177 295
Branch v. Augusta Glass
Works, 95 Ga. 573; 23
S. E. 128 1211
V. Jesup, 106 U. S. 468;
1 Sup. Ct. 495 444, 450,
450, 1507
Branch, Sons & Co. v. Atlan-
tic, etc. R. R. Co., 3 Woods
481 1495
Branch of the Bank v. Collins,
7 Ala. 95 1316, 1321, 1322
Brand v. Godwin, 15 Daly
(N. Y.H56; 8N. Y. Supp.
339; 9 N. Y. Supp. 743 1365
Brandenstein v. Hoke, 101
Cal. 131; 35 Pac. 562 244
Brander v. Brander, 4 Ves.
800 1141, 1143
Brandreth, Re, 58 N. Y. App.
Div. 575; 69 N. Y. Supp.
142 679, 679
Brannin v. Loving, 82 Ky. 370 1357
Brant v. Ehlen, 59 Md. 1 634, 647
Brass v. Worth, 40 Barb.,
(N. Y.) 648 808
Brassey v. N. Y., etc. R. R.
Co., 19 Fed. 663 1604
Brassfield v. Quincy, etc.
R. R. Co., 109 Mo. App.
710; 83 S. W. 1032 380
Bratten v. Catawissa R. R.
Co., 211 Pa. 21; 60 Atl.
319 494, 1474, 1475
Breck v. Barney, 183 Mass.
133; 66 N. E. 643 645
Breeze v. Lone Pine Sur-
prise, etc. Co., 39 Wash.
602; 81 Pac. 1050 966
Breinig v. Sparrow (Ind.), 80
N. E. 37 80, 853
Bremen Savings Bank v.
Branch-Crookes Saw Co.,
104 Mo. 425; 16 S. W. 209 297
Brendon v. Worley, 8 N. Y.
Misc. 253; 28 N. Y. Supp.
557 590
Brennan v. Emery-Bird-
Thayer Dry Goods Co., 99
Fed. 971 300
Brent v. Bank of Washington,
10 Pet. 596 768, 769, 774, 1124
V. Bank of Washington,
2 Cranch C. C. 517 768, 1124
Brewer v. Boston Theatre,
104 Mass. 378 935, 944, 945,
945, 976, 978
V. Chelsea Mutual Fire
Ins.Co.,14Gray(Mass.)203 589
V. State, 7 Lea (Tenn.)
682 127
Brewer Brewing Co. v. Bod-
die, 181 111. 622; 55 N. E.
49 861
Brewster v. Hartley, 37 Cal.
15; 99 Am. Dec. 237 191, 1022,
1027, 1031
V. Hatch, 122 N. Y. 349;
25 N. E. 505; 19 Am. St.
Rep. 498 311, 340
V. Lathrop, 15 Cal. 21 1136
V. Sime, 42 Cal. 139 799
Brick V. Brick, 98 U. S. 614 812
Brick & Stone Co., W. N.
(1878) 140 994, 1186
Bridge Co. V. Mayer, 31 Oh.
St. 317 1009
Bridgeport Bank v. New
York, etc. R. R. Co., 30
Conn. 231 685, 685, 714, 718,
730, 749
TABLE OF CASES
[The references are to pages]
Bridgeport Sav. Bank v. Eld-
redge, 28 Conn. 556; 73
Am. Dec. 688
Bridgeport, etc. Ice Co
Header, 72 Fed. 115;
C. C. A. 451
Bridget's Case, 5 Ch. 305
Bridgers and Neill's Case, 4
Ch. 266
Bridges V. Nat. Bank of Troy,
185 N. Y. 146 572, 773, 1124
Bridgewater Iron Co. v. Liss-
berger, 116 U. S. 8; 6 Sup.
Ct. 241
Bridgewater Navigation Co.
(1891), 2 Ch. 317
Bridgman v. City of Keokuk,
72 Iowa 42; 33 N. W. 355
1371
V.
18
286, 1007
633
668
716
471
421,
424
Briggs V. McCuUough, 36 Cal.
542 231, 384
V. Spaulding, 141 U. S.
132; 11 Sup. Ct. 924 1181,
1182, 1182, 1262, 1274, 1276,
1276, 1278, 1279, 1281
V. Traders Co., 145 Fed.
254 970
, Ex parte, 1 Eq. 483 181
Bright V. Hutton, 3 H. L. C.
341 275, 275, 276, 307
V. Lord, 51 Ind. 272;
19 Am. Rep. 732 1135, 1135
V. Metairie Cemetery Co.,
33 La. Ann. 58 1372
Brighton Brewery Co., 37
L. J. Ch. 278 1336
Brill Co., J. G., V. Norton, etc.
St. Ry. Co., 189 Mass. 431;
75 N. E. 1090 863
Brinckerhoff v. Bostwick, 99
N. Y. 185; 1 N. E. 663 981,1288
V. Roosevelt, 143 Fed.
478; 74 C. C. A. 498 967
Brinkerhoff v. Holland Trust
Co., 159 Fed. 191 1354
Brinkerhoff-Farris Trust, etc.
Co. V. Home Lumber Co.,
118 Mo. 447; 24 S. W. 129 571,
571, 574, 589, 712, 752, 773
Brinkerhoff Zinc Co. v. Boyd,
192Mo. 597; 91S. W. 523 1211,
1268, 1360
Brinkley v. Hambleton, 67
Md. 169; 8 Atl. 904 617, 782,
783
Brinkley Car, etc. Co. v. Curf-
man (Iowa), 114 N. W. 12 102
Brinley v. Grou, 50 Conn. 66;
47 Am. Rep. 618 503, 1138
Brinley v. Mann, 2 Cush.
(Mass.) 337; 48 Am. Dec.
669 398
Brisbane v. Delaware, etc.
R. R. Co. , 94 N. Y. 204 732, 753,
755, 756, 1130
Bristol County Sav. Bank v.
Keavy, 128 Mass. 298 1379
Bristol Creamery Co. v. Til-
ton, 47 Atl. Rep. 591; 70
N. H. 239 _ 169, 195
Bristol United Breweries v.
Abbot (1908), 1 Ch. 279 1396
Bristol, etc. Trust Co. v.
Jonesboro, etc. Trust Co.,
101 Tenn. 545; 48 S. W.
228 123, 226, 298, 1169, 1169,
1365
British & American, etc.
Corp. V. Couper (1894),
A. C. 399 532, 534, 534, .534
British Asbestos Co. v. Boyd
(1903), 2 Ch. 439 1230, 1230,
1230, 1231
British Equitable Ins. Co. v.
Baily (1906), A. C. 35 584, 587
British Flax, etc. Co., 60 L. T.
215 1038
British Guardian Co., 14 Ch.
D. 335 1261, 1264, 1267, 1285
British India, etc. Co. v. In-
land Revenue Comm'rs, 7
Q. B. 165 1392
British Linen Co. v. South
American, etc. Co. (1894),
1 Ch. 108 • 1598
British Nation Life Ass. Ass'n,
8 Ch. D. 679 77
British Oil & Coke Mills v.
Inland Revenue Comm'rs
(1903), 1 K. B. 689 1495
British Power Traction, etc.
Co. (1906), 1 Ch. 497 1643, 1647,
1648
British Power Traction Co.
(No. 2) (1907), 1 Ch. 528 1643,
1647, 1647
British Seamless Paper Box
Co., 17 Ch. D. 467 24
British Sugar Co., 3 K. & J.
408 604, 1007, 1007
British Vacuum Cleaner Co.
V. New Vacuum Cleaner
Co. (1907), 2 Ch. 312 369, 371,
375, 375, 376
Briton Medical, etc. Ass'n v.
Jones, 61 L. T. 384 1230
Brittan v. Oakland Bank of
Savings, 124 Cal. 282; 57
TABLE OF CASES
[The references are to pages]
Pac. 84; 71 Am. St. Rep.
58 723, 808, 809, 1329
Broadway Bank v. McElrath,
13 N. J. Eq. 24 715
Broadway Nat. Bank v.
Baker, 176 Mass. 294; 57
N. E. 603 70
Broadwell v. Merritt, 87 Mo. 95 302
Brockert v. Central Iowa Ry.
Co., 82 Iowa 369; 47 N. W.
1026 1609
Brocklebank v. East London
Ry. Co., 48 L. J. Ch. 729 1616
ifoockway v. Gadsden, etc.
Land Co., 102 Ala. 620; 15
So. 431 602, 611, 614, 1208
Brockway Mfg. Co., Re, 89
Me. 121; 35 Atl. 1012; 56
Am. St. Rep. 401 1290, 1357
Bronson v. LaCrosse, etc.
R. R. Co., 2 Wall. 283 932, 984,
985
Bronson Electric Co. v. Rheu-
♦ bottom, 122 Mich. 608; 81
N. W. 563 572
Brooke v. Day (Ga.), 59 S. E.
769 147, 148, 237
Brooklyn Heights Realty Co.
V. Kurtz, 115 N. Y. App.
Div. 74 1262
Brooklyn, Queens County,
etc. R. R. Co., 185 N. Y. 171 141
Brooklyn Union Gas Co. v.
City of New York, 115
N. Y. App. Div. 69 890
Brooklyn, etc. R. R. Co. v.
Strong, 75 N. Y. 591 1270, 1332
Brooks V. Railway Co., 101
U. S. 443 1542
V. Vermont Central
R. R. Co., 14 Blatchf. 463 1493,
1585, 1588
V. Vermont Central R. R.
Co., 22 Fed. 211 1622
Brooks, Jenkins & Co. v.
Mayor, etc. of Torquay
(1902), 1 K. B. 601 403, 404
Broome v. Galena, etc. Packet
Co., 9 Minn. 239 25
Brophy v. American Brewing
Co., 211 Pa. 596; 61 Atl. 123 1245
Brotherhood of Railroad
Trainmen v. Newton, 79
111. App. 500 577, 577, 578, 590
Broughton v. BroUghton, 5
De G. M. & G. 160 1325
V. Manchester Water-
Works Co. (1819), 3 B. &
Aid. 1 828
Brown v. Adams, 5 Biss. 181 696
V. Andrew, 13 Jur. 938 308
V. Black, 8 Ch. 939 708, 783
V. Bokee, 53 Md. 155 424,
678
V. Bradford, 103 Iowa
378; 72 N. W. 648 1188
V. Brown (N. J.), 65 Atl.
739 503, 1149
Brown v. Chesapeake, etc.
Canal Co., 73 Md. 567 1682
V. Citizens' Ice, etc. Co.
(N. J.), 66 Atl. 181 64
— — V. (ility of Atchison, 39
Kans. 37; 17 Pac. 465; 7
Am. St. Rep. 515 855, 859
V. Commonwealth, 3
Grant Cas. (Pa.) 209 1040
V. Commercial Fire Ins.
Co., 21 App. D. C. 325 402, 402,
403
V. Corbin, 40 Minn. 508;
42 N. W. 481 47
V. Creston Ice Co., 113
Iowa 615; 85 N. W. 750 1246
V. Crown Gold MiUing
Co. (Cal.), 89 Pac. 86 1234, 1235
V. De Young, 167 111. 549;
47 N. E. 863 982, 982
V. Dibble, 65 Mich. 520;
32 N. W. 656 1005
V. Duluth, etc. Ry. Co.,
53 Fed. 889 645, 962, 1402
V. Florida Southern Ry.
Co., 19 Fla. 472 509
V. Galveston Wharf Co.,
92 Tex. 520; 50 S. W. 126 1240,
1383
V. Gellatly, 2 Ch. 751 1136
V. Grand Fountain, 28
App. D. C. 200 134, 141, 142
V. Howard Fire Ins. Co.,
42 Md. 384; 20 Am. Rep.
90 728, 735, 736, 738, 759
V. Lehigh Coal Co., 49
Pa. St. 270 1133
V. Maryland Tel., etc.
Co., 101 Md. 574; 61 Atl.
338 141
V. Morton, 71 N. J. Law
26; 58 Atl. 95 616
V. New York, etc. R. R.
Co., 19 How. Pr. (N. Y.) 84 1571,
1572
V. Pacific Mail, etc. Co.,
5 Blatchf. 525 1048, 1050, 1053,
1061, 1064, 1064, 1064, 1064
V. Republican Silver
Mines, 17 Colo. 421; 30
TABLE OF CASES
[The references are to pages]
Pac. 66; 16 L. R. A. 426 1237,
1245, 1247, 1248, 1322
V. Republican Silver
Mines, 55 Fed. 7 554, 1001, 1199
V. Schleier, 118 Fed. 981;
194 U. S. 18; 24 Sup. Ct.
558 107, 836
V. Scottish-American
Mortgage Co., 110 111. 235 232
V. Smith, 122 Mass.
589 781
V. Tillinghast, 84 Fed.
71; 93 Fed. 326; 35
C. C. A. 323 489
V. Toledo, etc. R. Co., 35
Fed. 444 1611
V. Utopia Land Co., 103
N. Y. Supp. 50 978, 979
V. Ward, 3 Duer (N. Y.)
660 808, 1439
V. Warner, 78 Tex. 543;
14 S. W. 1032; 22 Am. St.
Rep. 67; 11 L. R. A. 394 1611
V. Weymouth, 36 Me.
414 1378, 1379, 1379
V. Winnisimmet Co., 11
Allen (Mass.) 326 68, 91
V. Wyandotte, etc. Ry.
Co., 68 Ark. 134; 56 S. W.
862 140, 219, 531
Brown & Gregory, Ltd.
(1904), 1 Ch. 627; (1904)
2 Ch. 448 1430
Brown & Lamed, Re, 14 R. I.
371 ; 51 Am. Rep. 397 1144, 1152
Brown's Case, 9 Ch. 102 1171
Brown, Ex parte, 18 S. Car. 87 1654
, Ex parte, 19 Beav. 97 1223,
1276
Browne v. La Trinidad, 37 Ch.
D. 1 34, 285, 996, 1184, 1232
V. Monmouthshire Ry.
Co., 13 Beav. 32 951, 1109
V. St. Paul Plow Works,
62 Minn. 90; 64 N. W. 66
Brownell v.
Mass. 442 :
Anthony, 189
75 N. E. 746
Browning v. Hinkle, 48 Minn.
544; 51 N. W. 605; 31
Am. St. Rep. 691
V. Kelly, 124 Ala. 645;
27 So. 391
Broyles v. McCoy, 5 Sneed
(Tenn.) 602
Bruce v. Piatt, 80 N. Y. 379
V. Smith, 44 Ind. 1
192,
527
1153,
1155
649
1661
309
1182,
1182
781
286
851
1500
1421
1370
363
1547
809
Brundage v. Brundage, 60
N. Y. 544 496, 1156
Brundred v. Rice, 49 Oh. St.
640; 32N. E. 169; 34 Am.
St. Rep. 589 245, 261
Brunner v. Brown, 139 Ind.
600; 38 N. E. 318
Brunswick Gas Light Co. v.
United Gas, etc. Co., 85 Me.
532
Brunswick, etc. R. R. Co. v.
Hughes, 52 Ga. 557
Brunton's Case, 19 Eq. 302
Brush Electric Light, etc. Co.
V. City Council of Mont-
gomery, 114 Ala. 433; 21
So. 960
Brussels Palace of Varieties v.
Prockter, 10 Times L. R. 72
Bruton v. Electrical Engineer-
ing Corp. (1892), 1 Ch. 434
Bryan v. Baldwin, 52 N. Y. 232
V. Sturgis Nat. Bank
(Tex.), 90 S. W. 704 793, IIU,
1134
Bryant v. D. C. Dental Soc,
26 App. D. C. 461 577, 580
Bryant's, etc. Mill Co. v.
Felt, 87 Me. 234; 32 Atl.
888; 47 Am. St. Rep. 323;
33 L. R. A. 593 209, 209
Bryon v. Carter, 22 La. Ann. 98 770
Bryson v. Rayner, 25 Md.
424; 90 Am. Dec. 69 803, 811
Buchan's Case, 4 A. C. 549 622,
788, 789, 790
Bucher v. Dillsburg, etc. R. R.
Co., 76 Pa. St. 306
Buck V. Buck, 1 Campb. 547
V. Jones, 18 Colo. App.
250; 70 Pac. 951
V. Seymour, 46 Conn.
156 1502, 1510
V. Troy Aqueduct Co., 76
Vt. 75; 56 Atl. 285 588, 1205,
1210, 1318
Buckhannon, etc. R. Co. v.
Davis, 135 Fed. 707; 68
C. C. A. 345 . 1616, 1617
Buckmaster v. Consumers' Ice
Co., 5 Daly (N. Y.) 313 751
Bucksport, etc. R. R. Co. v.
Brewer, 67 Me. 295 193
V. Buck, 68 Me. 81 191, 386,
1007, 1007
Budd V. Multnomah St. Ry.
Co., 15 Greg. 413; 15 Pac.
659; 3 Am. Rep. 169 579, 606,
607, 657, 666, 1187
203
259
635
TABLE OP CASES
[The references are to pages]
Budd V. Munroe, 18 Hun (N.
Y.) 316 799, 1177
V. "Walla Walla, etc. Pub.
Co., 2 Wash. Ty. 347; 7
Pac.'896 1197, 1201, 1298, 1299
Buel V. Baltimore, etc. Ry.
Co., 24 N.Y. Misc. 646; 53
N. Y. Supp. 749 1677, 1678,
1679, 1679, 1683
Buell V. Buckingham, etc.
Co., 16 Iowa 284; 85 Am.
Dec. 516 1187, 1205, 1296, 1315
Buffalo German Ins. Co. v.
Third Nat. Bank, 19 N. Y.
Misc. 564; 43 N. Y. Supp.
550 574, 751
V. Third Nat. Bank, 162
N. Y. 163; 56 N. E. 521;
48 L. R. A. 107 571
Buffalo Loan, etc. Co. v.
Medina Gas Co., 12 N. Y.
App. Div. 199; 42 N. Y.
Supp. 781 1407, 1450
Buffalo, etc. R. R. Co. v.
Gary, 26 N. Y. 75 119, 247, 248,
249
V. Clark, 22 Hun (N. Y.)
359 209, 609, 609
V. Gifford, 87 N. Y. 294 174,
■ V. Hatch, 20 N. Y. 157
609
101,
240
Buffett V. Troy, etc. R. R. Co.,
40 N. Y. 168 870
BuflS^ngton v. Bardon, 80
Wise. 635 ; 50 N. W. 776 280, 307
Buford V. Keokuk Northern
Lme Packet Co., 69 Mo. 611 952
Bugg, Ex parte, 2 Drewry &
Sm. 452 175, 620
Buker v. Leighton Lea Ass'n,
164 N. Y. 557; 58 N. E.
1085; s. c. 18 N. Y. App.
Div. 548; 46 N. Y. Supp.
35 663
Bulawayo Market & OfiSces
Co. (1907), 2 Ch. 458 1161, 1167
Bulkeley v. Stephens, 10 L. T.
N. s. 225 1136, 1156
V. Stephens , (1896), 2
Ch. 241 1156, 1157
V. Worthington Ecc.
Soc, 78 Conn. 526; 63 Atl.
351 1154, 1155
BuUard v. Bank, 18 Wall.
589 112, 572
Bullen V. Milwaukee Trading
Co., 109 Wise. 41 ; 85 N. W.
115. 408
198
229
1072
1423
Bullock V. Falmouth, etc. Co.,
85 Ky. 184; 3 S. W. 129
Bultfontein Sun Diamond
Mine, 12 Times L. R. 461 ;
13 Times L. R. 156 351, 363
Buncombe Turnpike Co. v.
McCarson, 1 Dev. & B.
(N. Car.) 306
Bundy v. Iron Co., 38 Oh. St.
300 1069, 1071
Bunting's Admrs. v. Camden,
etc. R. R. Co., 81 Pa. St.
254
Burbank v. Dennis, 101 Cal.
90; 35 Pac. 444 322, 322, 329
Burbidge v. Morris, 3 H. & C.
664 276, 308
Burden v. Burden, 159 N. Y.
287; 54 N. E. 17 966, 1110,
1211, 1305, 1312, 1313,
1313
V. Burden Iron Co., 39
N. Y. Misc. 559; 80 N. Y.
Supp. 390 1341
Burdett v. Standard Explora-
tion Co., 16 Times L. R.
112 428, 429, 430, 430
Burdick v. Dillon, 144 Fed.
737; 75 C. C. A. 603 44
Burgess v. Seligman, 107
U. S. 2O7 2 Sup. Ct. 10 191, 622,
622, 623
V. St. Louis County R. R.
Co., 99 Mo. 496; 12 S. W.
1050 966, 967
Bureess's Case, 15 Ch. D. 507 179
Burham v. San Francisco
Fuse Mfg. Co., 76 Cal. 26;
17 Pac. 939
Burke v. Concord Railroad, 61
N. H. 160
V. Dillingham, 60 Fed.
729; 9 C. C. A. 255
V. Lechmere, L. R. 6
Q. B. 297 166, 210, 213
V. Lincoln- Valentine Co.,
28 N. Y. Misc. 202; 58
N. Y. Supp. 1077, 1124
V. Short, 79 Fed. 6; 24
C. C. A. 422
V. Sidra Bay Co., 116
Wise. 137; 92 N. W. 568
V. Smith, 16 Wall. 390
359, 705
Burkhead v. Independent
School District, 107 Iowa
29; 77N. W. 491 1189
BurMnshaw v. Nicolls, 3 A. C.
1004 647, 647, 648
666
79
1619
297
1452
1006
191,
TABLE OF CASES
[The references are to pages]
Burland v. Earle (1902), A. C.
83 75, 324, 930, 936, 936, 1110,
1332
Burlington City Loan, etc.
Co. V. Princeton Lighting
Co. (N. J.), 67 Atl. 1019 1669,
1669
Buriington Voluntary Re-
lief Dept. V. White, 41
Nebr. 547; 69 N. W. 747;
43 Am. St. Rep. 701 577, 577,
577, 589
Burmeister v. Koster, 107
N. Y. Supp. 636 1553
Bum V. London & South
Wales Coal Co., 7 Times
L. R. 118 897, 904, 1252
Bumes v. Bumes, 137 Fed.
781; 70C. C. A. 357 517
V. Pennell, 2 Ho. Lds.
Cas. 497 763
Bumham v. Bowen, 111 U. S.
776; 4 Sup. Ct. 675 1562, 1570,
1571
, Re, 140 Fed. 926 1553
Bums V. Beck, 83 Ga. 471 ; 10
S. E. 121 160, 1240
V. Commencement Bay,
etc. Co., 4 Wash. 558; 30
Pao. 668, 709 1237
V. St. Paul St. Ry. Co.
(Minn.), 112 N. W. 412 961
Bumside v. Dayrell, 3 Ex.
224 276, 342
Burr V. M'Donald, 3 Gratt.
(Va.) 215 63, 1079, 1185, 1224
V. Sherwood, 3 Bradf.
(N. Y.) 85 678, 791, 792
V. Wilcox, 22 N. Y. 551 154,
156
Burrill V. Nahant Bank, 2
Mete. (Mass.) 163; 35 Am.
Dec. 395 1186, 1213
Burroughs v. North Carolina
R. R. Co., 67 N. Car. 376;
12 Am. Rep. 611 1132, 1135
Burrows v. Interborough Met.
Co., 156 Fed. 389 57, 968, 969
V. Matabele, etc. Co.
(1901), 2 Ch. 23 354, 626
V. Niblack, 84 Fed. Ill;
28 C. C. A. 130 517, 520
V. Smith, 10 N. Y. 550 198
Burt V. Batavia Paper Mfg.
Co., 86 111. 66 300
V. British Nation Life Ass.
Ass'n, 4 De G. & J. 158 966, 973
V. Bull (1895), 1 Q. B.
276 1614, 1615
618
1057
723
784
1242
Burt V. Rattle, 31 Oh. St.
116 451,456
V. Real Estate Exchange,
175 Pa. St. 619; 34 Atl.
923; 52 Am. St. Rep. 85»
Burton V. St. George's Soc,
28 Mich. 261
Burton's Appeal, 93 Pa. St.
214
Burton, etc. Co., 31 L. J. Q. B.
62 893, 894
Burwash v. Balkju, 82 N. E.
355 (111.)
Busell Trimmer Co. v. Cobum,
188 Mass. 254; 74 N. E.
334; 69 L. R. A. 821
Busenback v. Attica, etc.
Gravel Road Co., 43 Ind.
265 105, 117
Busey v. Hooper, 35 Md. 15;
6 Am. Rep. 350 156, 156
Bush's Case, 6 Ch. 246 1223, 1325
, 9Ch. 554 154
Bushee v. Freeborn, 11 R. I.
149 501, 503, 1152
Bushnell v. Consolidated Ice
Machine Co., 138 111. 67;
27 N. E. 596 124, 124, 126, 149,
250
Butchers' Beneficial Ass'n,
35 Pa. St. 151
Butchers', etc. Bank, 130
Mass. 264
Butler V. American Toy Co.,
46 Conn. 136
V. Cornwall Iron Co., 22
Conn. 335
V. Eaton, 141 U. S. 240;
11 Sup. Ct. 985
V. Montgomery Grain
Co., 85 Mo. App. 50
V. Murphy, 80 S. W. 337
(Mo.)
V. Rahm, 46 Md. 541
1503, 1523, 1551, 1553, 1588',
1588
Butler Paper Co. v. Cleveland,
220 111. 128; 77 N. E. 99;
110 Am. St. Rep. 230
Butler University v. Scoon-
over, 114Ind.381; 16N.E.
642; 5 Am. St. Rep. 627
Butt V. MacNichol Construc-
tion Co., 140 Fed. 840; 72
C. C. A. 252
V. Monteaux, 1 K. & J.
98 256, 343
Butterfield v. Cowing, 112
N. Y. 86; 20 N. E. 3694 1433
113
248
79
1210
490
694
786
1498,
161
156
44
TABLE OF CASES
[The references are to pages]
Butterfly-Terrible Gold Min-
ing Co. V. Brind (Colo.), 91
Pac. 1101 751, 900
Butterworth v. Kritzer Mill-
ing Co., 115 Mich. 1; 72
N. W. 990 867
Button V. Hoffman, 61 Wise.
20; 20N. W. 667; 50 Am.
Rep. 131 874
Button r.Wightman, Cro. Eliz.
338 - 102
Buttrick V. Nashua, etc. R. R.
Co., 62 N. H. 413; 13 Am.
St. Rep. 578 716, 1235
Butts r.Wood, 37 N.Y. 317 1203,
1319
Buvinger v. Evening Union
Printing Co. (N. J.), 65
Atl. 482 1239, 1248, 1511, 1512,
1553
Bwlch-y-plwm Mining Co. v,
Baymes, L. R. 2 Ex. 324 182
Byam v. Bickford, 140 Mass.
31; 2N. E. 687 254
Byers v. Rollins, 13 Colo. 22;
21 Pac. 894 485, 974, 1065
Byers Bros. v. Maxwell (Tex.),
73 S. W. 437 184
Byram v. Sovereign Camp,
108 Iowa 430; 79 N. W.
144; 75 Am. St. Rep. 265 948
Byrne v. Schuyler, etc. Mfg.
Co., 65 Conn. 336; 31 Atl.
833; 28L. R. A. 304 71, 75
V. Supreme Circle (N. J.
Sup. Ct.), 65 Atl. 839 580
Byronville Creamery Ass'n v.
Ivers, 100 N. W. 387; 93
Minn. 8 124
C
Cable Co. v. Rathgeber (S.
Dak.), 113 N. W. 88 386
Cackett v. Keswick (1902), 2
Ch. 456 340
Cady V. Potter, 55 Barb.
(N. Y.) 463 714, 714, 754, 754
Cahill V. Kalamazoo Mut. Ins.
Co., 2 Doug. (Mich.) 124;
43 Am. Dec. 457 581, 1185,
1205
V. Maryland Life Ins.
Co., 90 Md. 333; 45 Atl.
180; 47 L. R. A. 614 394
V. Original Big Gun, etc.
Ass'n. 94 Md. 353; 89 Am.
St. Rep. 434; 50 Atl. 1044 613
Caho V. Norfolk, etc. Ry. Co.
(N. Car.), 60 S. E. 640 1192
Caimey v. Back (1906), 2
K. B. 746 1375, 1546
Cake V. Woodbury, 3 App.
Cas. (D. C.) 60 1621, 1621, 1643,
1644
Calculagraph Co. v. Wilson,
132 Fed. 20 1356
Calder Nav. Co. v. Pilling, 14
M. & W. 76 566
Caldwell v. Mutual Reserve
Fund Life Ass'n, 65 N. Y.
Supp. 826 1215, 1215
Caledonian Ry. Co. v. Helens-
burgh, 2 Maeq. H. L. 391
V. Solway Ry. Co., 49
L. T. 526
Calgary & Edmonton Land
Co. (1906), 1 Ch. 141
Calho\in v. Memphis, etc.
R. R. Co., 2 Flippin 442
281,
281
87
542
1502,
1511
xU
V. St. Louis, etc. Ry.
Co., 14 Fed. 9 1562, 1570
California Bank v. Kennedy,
167 U. S. 362; 17 Sup. Ct.
831 76, 77, 833, 833, 834, 846
California Consolidated Min-
ing Co. V. Manley, 10 Idaho
786; 81 Pac. SO 300
California, etc. Hotel Co. v.
Callender, 94 Cal. 120; 29
Pac. 859; 28 Am. St. Rep.
99 154, 428, 600, 625
Callahan v. Chilcott Ditch Co.
(Colo.), 86 Pac. 123 998, 1007
Callanan v. Edwards, 32 N. Y.
483 544
Callender v. Painesville &
Hudson, etc. R. R. Co., 11
Oh. St. 516 95, 236
Caloric Engine Co., 52 L. T.
846 1036, 1044
Calumet Paper Co. v. Haskell
Show, etc. Co., 144 Mo. 331 ;
45S. W..1115; 66 Am. St.
Rep. 425 1211, 1217
V. Stotts Investment
Co., 96 Iowa 147; 64 N. W.
782; 59 Am. St. Rep. 362 74,
74, 279, 297, 298
Calvert v. Idaho Stage Co., 25
Oreg. 412; 36 Pac. 24 70, 80
Cambria Iron Co. v. Union
Trust Co., 154 Ind. 291; 48
L. R. A. 41; 55N. E. 745;
56 N. E. 665 1564
Camden v. Stuart, 144 U. S.
104; 12 Sup. Ct. 585 634, 634
TABLE OF CASES
[The references are to pages]
Camden Land Co. v. Lewis,
101 Me. 78; 63Atl. 523 314,
1310, 1311, 1322, 1340
Camden Safe Deposit, etc.
Co. V. Burlington Carpet
Co., 33 AtL Rep. 479
(N. J. Ch.) 1175, 1178, 1496
Camden Safe, etc. Co. v.
Citizens' Ice, etc. Co. (N. J.
Ch.), 61 Atl. 529 1342, 1408
Camden, etc. R. R. Co. v.
Mays Landing, etc. R. R,
Co., 48 N. J. Law 530
Came v. Brigham, 39 Me. 35
853
229,
593
Cameron v. Tome, 64 Md
507; 2 Atl. 837 1456, 1456
Cameron, etc. Ry. Co., 18
Beav. 339 1303
Cameron Town, etc. Ins. Co.,
96 Fed. 756 44
Cammack v. Levy (La.), 45
So. 925 548
Cammell, Ex parU (1894), 2
Ch. 392 925, 1172, 1173
Cammeyer v. United German
Lutheran Churches, 2
Sandf. Ch. (N. Y.) 186 993,
1211
Camp V. Barney, 4 Hun (N.
Y.) 373 1615, 1617
V. Byrne, 41 Mo. 525 161, 235
Campbell v. American Alkili
Co., 125 Fed. 207; 61
C. C. A. 317 601, 616, 618
i;. Am. Zylonite Co., 122
N. Y. 455; 25 N. E. 853;
11 L. R. A. 596 440, 440
V. Argenta, etc. Co., 51
Fed. 1 1006, 1007
V. Compagnie de Belle-
garde, 2 Ch. D. 181 1598
V. Harrison, 3 N. So.
Wales State Rep. 432 1395
V. London & Brighton
Ry. Co., 5 Hare 519 1475, 1476
V. Maund, 5 A. & E. 865 1038,
1039, 1039
V. McPhee, 36 Wash.
593; 79Pac. 206 630
V. Merchants', etc. Ins.
Co., 37 N. H. 35; 72 Am.
Deo. 324 592
V. Pittsburgh, etc. Ry.
Co., 137 Pa. St. 574; 20
Atl. 949 1632
V. Poultney, 6 G. & J.
(Md.) 94; 26 Am. Dec. 559
954, 974, 1014
Campbell v. Railroad Co., 1
Woods 368 1485, 1584, 1585
V. Santa Maria, etc. Co.
(Colo.), 95 Pac. 39 1232
V. Texas, etc. R. R. Co.,
2 Woods 263 1625, 1625
V. Upton, 66 N. Y. App.
Div. 434; 73 N. Y. Supp.
1084 1328
V. Watson, 62 N. J. Eq.
396; 50 Atl. 120 . 588, 1267,
1274, 1274, 1278
V. Woodstock Iron Co.,
83 Ala. 351; 3 So. 369
803, 804
Campbell & Zell Co. v. Amer-
ican Surety Co., 129 Fed.
491 233, 382
Campbell's Case, 4 Ch. D. 470
1317, 1319, 1400
Campbell's Case, 9 Ch. 1 193, 487,
492, 493
Canada-Atlantic, etc. Co. v.
Flanders, 145 Fed. 875; 76
C. C. A. 1 1215, 1215
Canada Life Ass. Co. v. Peel
Gen. Mfg. Co., 26 Grant
(Ont.) 477 76
Canada Southern Ry. Co. v.
Gebhard, 109 U. S. 527; 3
Sup. a. 363 1671, 1672
Canadian Imp. Co. i;. Lea
(N. J.), 69 Atl. 455 1023
Canadian Tin Plate Co., 12
Ont. L. R. 594 166, 166, 169
Canal Company's Case, 83 Md.
549; 35 Atl. 161, 354, 581
1676, 1682, 1682
Canal, etc. Co. v. Paas, 95
Mich. 372; 54 N. W. 907 230
Canal, etc. R. R. Co. v. St.
Charles, etc. R. R. Co., 44
La. Ann. 1069; 11 So. 702 853
Canal Co. v. Sansom, 1
Binney (Pa.) 70 660.
Canandarqua Academy v.
McKechnie, 19 Hun (N.
Y.) 62 404
Candelaria Mining Co. v.
Juarez Co., 157 Fed. 315 1260
Canfield v. Gregory, 66 Conn.
9; 33 Atl. 536 142, 235
V. Knights of Maccabees,
87 Mich. 626; 49 N. W.
875; 24 Am. St. Rep. 186;
13 L. R. A. 625; 577
Cann v. International Trust
Co. , 40 Nova Scotia, 65 936, 1409
V. Rector, etc. of Church
xlii
TABLE OF CASES
[The references are to pages]
of Holy Redeemer (Mo.), 98
S. W. 781 1205
Cannon v. Brush Electric Co.,
96 Md. 446; 54 Atl. 121;
94 Am. St. Rep. 598 253, 1081
V. Farmers' Mut. Fire
Ass'n, 58 N. J. Eq. 102;
43 Atl. 281 594
V. Trask, 20 Eq. 669 948,
954, 996, 1014, 1020, 1062
Ex parte, 30 Ch. D. 629 1241
Cantwell v. Columbia Lead
Co. (Mo.), 97 S. W. 167 959
Cantwell v. Stockmen's Bldg.,
etc. Union, 88 111. App.
247 925
Cape Breton Co., Be, 29 Ch.
D. 795 323
Cape May, etc. Nav. Co., 51 N.
J. Law 78; 16 Atl. 191 1024,
1024, 1066
Cape Sable Company's Case,
3 Bland Ch. (Md.) 606 64, 394,
420
Capital City Brick Co. v.
Jackson, 59 S. E. 92 (Ga.)
1328
Capper's Case, 1 Sim. N. S.
178
Capper's Case, 3 Ch. 458
Capps V. Hastings Prospect-
ing Co., 40 Nebr. 470; 58
N. W. 956; 24 L. R. A.
259; 42 Am. St. Rep. 677
Car Advertising Co. v. New
York City Advertising Co.,
107 N. Y. Supp. 547
Caraher v. Royal Ins. Co., 63
Hun (N. Y.) 82; 17 N. Y.
Supp. 85S
Caratal (New) Mines (1902),
2*Ch. 498
Card V. Moore, 68 N. Y. App.
Div. 327; 74 N. Y. Supp.
18; 173 N. Y. 598; 66 N.
E. 1105 126, 246, 253
Cardan v. General Cemetery
Co., 5 Bins. N. C. 253
Cardiff Workmen's Cottage
Co. (1906), 2 Ch. 627
Carey v. Des Moines, etc. Min-
ing Co., 81 Iowa 674; 47
N. W. 882
V. Houston, etc. Ry. Co.,
45 Fed. 438 1629, 1670
V. Mayer, 79 Fed. 926;
25 C. C. A. 239 624
V. Williams, 79 Fed. 906;
25 C. C. A. 227 921
343
708
216
371
1344
1058
295
1396
280
Cargill V. Bower, 10 Ch. D.
502 1350
Caridad Copper Mining Co.
(1902), 2 K. B. 44 1238
Carting's Case, 1 Ch. D. 115
1338, 1338, 1338, 1340
Carling, Ex parte, 56 L. J. Ch.
321 179, 184
Carlisle v. Cahawba, etc R.
R. Co., 4 Ala. 70 603
V. South Eastern Ry.
Co., 1 Mac. & G. 689 977
Carlsbad Water Co. v. New,
33 Colo. 389; 81 Pac. 34 43
Carmel, etc. Co. v. Small, 150
Ind. 427; 47 N. E. 11; 50
N. E. 476 1250, 125-1
Carmichael's Case (1896), 2
Ch. 643 362
Carmichael and Hewett's Case,
30 W. R. 742 168, 1175
Carmody v. Powers, 60 Mich.
26; 26 N. W. 801 306
Carney v. N. Y. Life Ins. Co.,
162N. Y.453; 57N. E.78;
76 Am. St. Rep. 347; 49
L. R. A. 471 592, 1189
Carolina Coal, etc. Co. v.
Southern Ry. Co. (N. Car.),
57 S. E. 444
Carpenter V.Am. Bldg.& Loan
Ass'n, 54 Minn. 403; 56 N.
W.95; 40 Am. St. Rep. 345
666, 667
V. Black Hawk Gold
Mining Co., 65 N. Y. 43 1408,
1495 1523
V. Catlin, 44 Barb. 75 ' 1664
V. Chicago, etc. Ry. Co.,
104 N. Y. Supp. 152 1476, 1476
V. New York, etc. R. R.
Co., 5 Abb. Pr. 277 973, 1105
V. Rommel, 5 Phila. 34 1423
Carr v. Carr, 1 C. B. n. s. 197 660,
663
V. Griffith, 12 Ch. D. 655
24, 1157
V. Le Fevre, 27 Pa. St.
413 1423
V. National Bank, etc.
Co.,167N.Y. 375;60N.E.
649; 82 Am. St. Rep. 725 850
Carriage Co-operative Sup-
ply Co., 27 (Jh. D. 322 1337,
1340, 1346
Carrick v. Wigan Tramways
Co., W. N. (1893) 98 1591
Carrington v. Turner, 101 Md.
437; 61 Atl. 324 1374
1522
xliii
TABLE OF CASES
[The references are to pages]
Carroll v. Mullanphy Sav.
Bank, 8 Mo. App. 249 558,
560, 693, 744
Carson v. Arctic Mining Co.,
5 Mich. 288 667, 667
V. Iowa City Gaslight Co.,
80 Iowa 638; 45 N. W.
1068 962, 963, 965, 968
Carson City Sav. Bank v.
Carson City Elevator Co.,
90 Mich. 550; 51 N. W.
641; 30 Am. St. Rep. 454 113,
852
Carswell v. Farmers' L. & T.
Co., 74 Fed. 88; 20C. C. A.
282 1611, 1612, 1612
Carter v. Gray (Ark.), 96 S.
W. 377 300
V. Sanderson, 5 Bing. 79
582, 582
V. Union Printing Co.,
54 Ark. 576; 16 S. W. 579
518, 520
Carter's Case, 31 Ch. D. 496 1363
Carter, etc. Co. v. Hazzard,
65 Minn. 432; 68 N. W. 74
154, 168, 198, 200, 209, 213
Cartmell's Case, 9 Ch. 691 1214
Cartwright v. Dickinson, 88
Tenn. 476; 12 S. W. 1030;
17 Am. St. Rep. 910; 7 L.
R. A. 706 195, 516, 610, 702
Carver Co., E., v. Manufac-
turers' Ins. Co., 6 Gray
(Mass.) 214
Case V. Bank, 100 U. S. 446
- V. Hawkins, 53 Miss. 702
1379
749,
750
1374
V. Kelly, 133 U. S. 21;
10 Sup. a. 216 836
V. New York Mut. Sav.
etc. Ass'n, 88 N. Y. App.
Div. 538; 85 N. Y. Supp.
104 980
Case Mfg. Co. v. Soxman, 138
U.S. 431; 11 Sup. Ct. 360
307, 310
Case Plow Works, J. I. v.
Finks, 81 Fed. 529; 26 C.
C. A. 46 1617
Case of the Deane and Chap-
ter of Femes, Davis 43 400,
401
Casey v. Galli, 94 U. S. 673 225,
235, 237
■ V. Northern Pac. R. R.
Co., 48 Pac. 53; 15 Wash.
450 1611
xliv
Cass V. Manchester, etc. Co.,.
9 Fed. 640 1188, 1192
V. Pittsburg, etc. Ry.
Co., 80 Pa. St. 31 194, 606
Cassatt V. Mitchell Coal, etc.
Co., 150 Fed. 32 890
Cassell V. Lexington, etc. Co.,
10 Ky. Law Rep. 486; 9
S. W. Rep. 701 998, 1185
Cassidy v. Uhlmann, 163 N.
Y. 380; 57 N. E. 620; 79
Am. St. Rep. 596 1355
Castellan v. Hobson, 10 Eq. 47 783
Castle V. Belfast Foundry Co.,
72 Me. 167 1381, 1382, 1382
Castle Braid Co., 145 Fed.
224 518, 519
Castner v. Twitchell-Champ-
lin Co., 91 Me. 524; 40
Atl. 558 1011, 1011, 1012
Gates V. Baxter, 97 Tenn. 443;
37 S. W. 219 716
Catholic Church v. Tobbein,
82 Mo. 418 244, 304
Catlin V. Green, 120 N. Y.
441; 24 N. E. 941 192
Catskill Bank v. Gray, 14
Barb. (N. Y.) 471 80
Cattron v. First Universalist
Soc, 46 Iowa 106 1372,
1376, 1377
Caulkins v. Gas Light Co.,
85 Tenn. 683; 4 S. W. 287;
4 Am. St. Rep. 786 798,
798, 814
Cavanaugh v. Patterson
(Colo.), 91 Pac. 1117 1360
Cawley & Co., 42 Ch. D. 209 600,
603, 745, 766, 767
Cayley v. Coburg, etc. Ry.
Co., 14 Grant Ch. (Can.)
571 r476
Caylus V. New York, etc. R.
R. Co., 10 Hun (N. Y.) 295 1494
Cayuga Lake R. R. Co. v.
Kyle, 64 N. Y. 185 95, 110,
204
Cazelais v. Picotte, 18 Que-
bec Sup. Ct. 538 148
Cazier v. Mackie-Lovejoy
Mfg. Co., 138 Fed. 654; 71
C. C. A. 104 1356
C. D. & M. Co. V. Keisel, 43
Iowa 39 387
Cecil, Re, 36 How. Pr. (N. Y.)
477 1043
Cedar Grove Cemetery Co.,
Be, 61 N. J. Law 422; 39
Atl. 1024 922, 1017, 1067
TABLE OF CASES
[The references are to pages]
Ceeder v. Loud & Sons Lum-
ber Co., 86 Mich. 541; 49
N. W. 575; 24 Am. St.
Rep. 134 1380
Celluloid Mfg. Co. v. Cellonite
Mfg. Co., 32 Fed. 94 373
Center Creek Water, etc. Co.
V. Lindsay, 21 Utah 192;
60 Pac. 559 1344
Central Agricultural, etc. Ass'n
V. Alabama Gold Life Ins.
Co., 70 Ala. 120 118,
126, 232, 619
Central Bank v. Knowlton,
12 Wise. 624; 78 Am. Dec.
769 226
Central City Savings Bank v.
Walker, 66 N. Y. 424 252
Central De Kaap Gold Mines,
69 L. J. Ch. 18 1241, 1242
Central Electric Co. v.
Sprague Electric Co., 120
Fed. 925; 67 C. C. A.
197 917
Central of Georgia Ry. Co.
V. Paul, 93 Fed. 878; 35
C. C. A. 639 1659
V. Union Springs, etc.
Ry. Co., 144 Ala. 639; 39
So. 473 250
Central Land Co. v. Oben-
chain, 92Va. 130; 22 S. E.
876 320
Central Lumber Co. v. Kel-
ter, 201 111. 503; 66 N. E.
543 85
Central Nebraska Nat. Bank
V. Wilder, 32 Nebr. 454; 49
N. W. 369 806, 1131
Central Ohio Natural Gas &
Fuel Co. V. Capital City
Dairy Co., 60 Oh. St. 96;
53 N. E. 711; 64 L. R. A.
395 68
Central Park Fire Ins. Co. v.
Callaghan, 41 Barb. 448 291
Central R. R. Co. v. Collins,
40 Ga. 582 ' 76, 965
V. Pennsylvania R. R.
Co., 31 N. J. Eq. 475 120, 121,
121
Central R. R. & Banking Co.
V. Ward, 37 Ga. 515 741, 743
Central R. R., etc. Co. v.
Farmers' L. & T. Co., 79
Fed. 158 1611, 1634
V. Fanners' L. & T. Co.,
116 Fed. 700 836, 1433, 1436,
1436,. 1472
Central R. R., etc. Co. v.
Farmers' L. & T. Co., 114
Fed. 263 ; 52 C. C. A. 149 85, 836
1). Smith, 76 Ala. 572; 52
Am. Rep. 353 80, 869, 870
Central Ry. Co. v. Kisch, L. R.
2 H. L. 99 177, 184, 184, 186
Central Transportation Co. v.
Pullman's, etc. Co., 139
U. S. 24; 11 Sup. Ct. 478
37, 839, 839, 840
Central Trust Co. v. Bridges,
57 Fed. 753; 6 C. C. A.
539 1082, 1535
V. Central Iowa Ry. Co.,
38 Fed. 889 1543
V. Central Trust Co. of
Illinois, 149 Fed. 789 375, 375,
379
V. Charlotte, etc. R. R.
Co., 65 Fed. 264 1568
V. Chattanooga, etc. R.
R. Co., 69 Fed. 295 1661, 1564
V. Chattanoogar, etc. R.
R. Co., 94 Fed. 275; 36
C. C. A. 241 1503, 1517
V. Cincinnati, etc. Ry.
Co., 58 Fed. 500 1621, 1628,
1667, 1667
1). Clark, 81 Fed. 269; 26
.C. C. A. 397 1571
V. Columbus, etc. Ry.
Co., 87 Fed. 815 85
V. Condon, 67 Fed. 84;
14 C. C. A. 314 1007, 1221,
1371, 1562
V. Continental Iron
Works, 51 N. J. Eq. 605;
28 Atl. 595; 40 Am. St.
Rep. 539 1497
V. Continental Trust
Co., 86 Fed. 517; 30 C. C.
A. 235 1611
V. Denver, etc. R. Co., 97
Fed. 239; 38 C. C. A. 143
1635, 1654
V. East Tennessee Land
Co., 116 Fed. 743 322
V. East Tennessee, etc.
Ry. Co., 30 Fed. 896 1568
V. East Tennessee, etc.
Ry. Co., 69 Fed. 363,
357 1619
V. East Tennessee, etc.
Ry. Co., 69 Fed. 658 1561
V. East Tennessee, etc.
Ry. Co., 70 Fed. 764 1543
V. East Tennessee, etc.
Co., 79 Fed. 19 1611, 1611
xlv
TABLE OF CASES
[The references are to pages]
Central Trust Co. v. East Ten-
nessee, etc. R. R. Co., 80
Fed. 624; 26 C. C. A. 30
1568,
■ V. Georgia Pac. Ry. Co.,
87 Fed. 288; 30 C. C. A.
648
V. Hennen, 90 Fed. 593;
33 C. C. A. 189
V. Indiana, etc. R. Co.,
98 Fed. 666
V. Kneeland, 138 U. S.
414; 11 Sup. a. 357
1538,
V. Lappa (Pa.), 65 Atl.
1111
V. Louisville Trust Co.,
87 Fed. 23
V. Louisville, etc. Ry.
Co., 70 Fed. 282
V. Louisville, etc.Ry.Co.,
81 Fed. 772
V. Marietta, etc. R. R.
Co., 48 Fed. 14
V. Marietta, etc. Ry.
Co., 73 Fed. 589
V. Marietta, etc. Ry. Co.,
75 Fed. 209; 21 C. C. A.
307; 75 Fed. 193; 21
C. C. A. 291
V. New York, etc. R. R.
Co., 110 N. Y. 250; 18 N.
E.92; 1L.R.A.260 1617,
V. New York, etc. Water
Co., 74 N. Y. Supp. 135;
176 N. Y. 546; 68 N. E.
1115
V. Ohio Central R. Co.,
23 Fed. 306
V. Peoria, etc. Ry. Co.
(Chamberlin's Case), 104
Fed. 418; 43 C. C. A. 613
V. Peoria, etc. Ry. Co.
(Baldwin's Case), 104 Fed.
420; 43 C. C. A. 616
V. Seasongood, 130 U. S.
482; 9Sup. Ct. 575
V. Sloan, 65 Iowa 655;
22 N. W. 916
V. St. Louis, etc. Ry. Co.,
41 Fed. 551 1561,
V. St. Louis, etc. Ry. Co.,
40 Fed. 426
V. Texas, etc. Ry. Co., 23
Fed. 846
V. Texas, etc. Ry. Co., 27
Fed. 178
V. Thurman, 94 Ga. 735;
20 Sup. Ct. 141 1558,
1562,
1572
1633
1552
1437
1508,
1539
332
1490
1497
1543
985
1669
1650
1618
1438
1611
1636
1636
1646
1655
1617
1617
1593
1559
1560
xlvi
Central Trust Co. v. Unadilla
Valley Ry. Co., 72 N. Y.
Supp. 189; 35 N. Y. Misc.
604 1585, 1585
V. U. S. Rolling Stock
Co., 56 Fed. 5 1628
V. Utah Central Ry. Co.,
16 Utah 12; 50 Pac. 813 1566,
1572
V. Wabash, etc. Ry. Co.,
23 Fed. 863 1612
V. Wabash, etc. R. Co.,
24 Fed. 98 1567
V. Wabash, etc. Ry. Co.,
25 Fed. 693 1599
V. Wabash, etc. Ry. Co.,
26 Fed. 11 1617
V. Wabash, etc. Ry. Co.,
30 Fed. 332 1569
V. Wabash, etc. Ry. Co.,
32 Fed. 187 ' 1621
V. Wabash, etc. Ry. Co.,
32 Fed. 566 1568
V. Wabash, etc. Ry. Co.,
36 Fed. 622 1490
V. Warren, 121 Fed. 323;
-58 C. C. A. 289 45
V. Washington Co. R. R.
Co., 124 Fed. 813 984, 1503,
1585, 1629
V. Western N. C. R. Co.,
89 Fed. 24 833
V. Worcester Cycle Mfg.
Co.,93Fed. 712; 35 CCA.
547 1501, 1501, 1594, 1595
V. Worcester Cycle Mfg.
Co., 114 Fed. 659 1608, 1608
Central Turnpike Corp. v. Val-
entine, 10 Pick. (Mass.) 142 189
Chable v. Nicaragua Canal,
etc. Co., 59 Fed. 846 898, 898
Chadwick v. Old Colony R. R.
Co., 171 Mass. 239; 50
N. E. 629 1521
Chaffe II. Ludeling, 27 La.
Ann. 607 252
Chaffee v. Middlesex R. R.
Co., 146 Mass. 224; 16
N. E. 34 1463, 1464, 1475,
1476, 1476
V. Quidneck Co., 14
R. I. 75 963
V. Rutland R. R. Co., 55
Vt. 110 450, 450, 452, 1118,
1122, 1416, 1421
V. Rutland R. R. Co., 53
Vt. 345 1582, 1582, 1582, 1582
Chamberlain v. Bromberg, 83
Ala. 576; 3 So. 434 1187
TABLE OF CASES
[The references are to pages]
Chamberlain v. Connecticut
Central R. R. Co., 54 Conn.
472;9Atl. 244 1469
V. New York, etc. R. R.
Co., 71 Fed. 636 1609, 1609
V. Painesville, etc. R. R.
Co., 15 Oh. St. 225 189, 191,
191, 193, 994
Chamberlin v. Mammoth Min-
ing Co., 20 Mo. 96
Chambers v. Chambers &
McKee, 185 Pa. St. 105;
39 Atl. 822
V. Falkner, 65 Ala.
448
V. Manchester, etc. Ry.
Co., 5 B. & S. 588
Chambersburg Ins. Co. v.
Smith, 11 Pa. St. 120
Chandler v. Bacon, 30 Fed.
538 274, 1338, 1338
V. Hoag, 2 Hun (N. Y.)
613; s. c. 63 N. Y. 624
V. Monmouth Bank, 13
N. J. Law 255
Chandler Mtge. Co. v. Loring,
113 111. App. 423
Chapin v. Vermont, etc. R. R.
Co., 8 Gray (Mass.) 575
Chapleo v. Brunswick Bldg.
Soc, 6 Q. B. D. 696
Chaplin v. Clarke, 4 Ex. 402
Chapman v. Atlantic Trust
Co., 119 Fed. 257; 145
Fed. 820
V. Bates, 61 N. J. Eq.
658; 47 Atl. 638; 88 Am.
St. Rep. 459 1029, 1048, 1052,
1053
V. Iron Clad Rheostat
Co., 62 N. J. Law 497; 41
Atl. 690 518, 520, 852
V. Lynch, 156 N. Y. 551.;
51 N. E. 275
Chapman's Case (1895), 1 Ch.
771 634, 637, 639, 639
Chappelle v. Chappelle (Ky.),
99 S. W. 959 420, 1115
Chappell's Case, 6 Ch. 902 766
Chantable Corp. v. Sutton, 2
Atk. 400 1161, 1259, 1264,
1273, 1281, 1281, 1285, 1349
Charles River Bridge v. War-
ren Bridge, 11 Pet. 420
Charles S. Higgins Co. v.
Higgins Soap Co., 144
N. Y. 462; 39 N. E. 490;
43 Am. St. Rep. 769; 27
L. R. A. 42 376, 387
1373
1187
86
64
699, 763
1182
1246
958
1432
831
342
1640
856
35
Charlestown Boot, etc. Co. v.
Dunsmore, 60 N. H. 85
Charlotte, etc. R. R. Co. v.
Blakely, 3 Strob. (S. Car.)
245 157, 197
V. Chester, etc. R. R. Co.,
118 N. Car. 1078; 24 S. E.
Rep. 769
Charlottesville v. Southern
Ry. Co., 97 Va. 428; 34
S. E. 98
Charlton v. Newcastle, etc.
Ry. Co., 5 Jur. N. S. 1096
Charter Acknowledgments,
Be, 28 Pa. Co. a. Rep. 187
1192
1612
25
79
119,
121
Charter Gas Engine Co. v.
Charter, 47 111. App. 36 998,
1228, 1268, 1317
Chase v. Lord, 77 N. Y. 1 150, 151
151, 416
V. Mich. Tel. Co., 121
Mich. 631; 80 N. W. 717 512,
879
V. Sycamore, etc. R. R.
Co., 38 111. 215 157, 920, 921
V. Tuttle, 55 Conn. 455;
12 Atl. 874; 3 Am. St.
Rep. 64 1178, 1199, 1201,
1212 1212
V. Vanderbilt, 62 N. Y. '
307 465, 474, 977, 1354
Chaytor v. Horn (1905), 1 Ch.
233 1136
Cheale v. Kenward, 3 De G. &
J. 27 785, 787, 787
Cheever v. Meyer, 52 Vt. 66 716
Chemical Nat. Bank v. Col-
well, 132 N. Y. 250; 30 N.
E. 644 695, 1168, 1176, 1262
V. Wagner, 93 Ky. 525;
20 S. W. 535; 40 Am. St.
Rep. 206 1328, 1378
Chenango Co., 19 Wend. (N.
Y.) 635 1038, 1059, 1059, 1065,
1065
Chenowith v. Pac. Express
Co., 93 Mo. App. 185 853, 867
Chequasset Lumber Co., 112
Fed. 56 393
Cheraw, etc. R. R. Co. v.
White, 14 S. Car. 51 162, 230
Cherry v. Frost, 7 Lea (Tenn.)
1 694, 723
Chesapeake Oyster, etc. Co.,
112 Fed. 960 44
Chesapeake & Ohio Canal
Co. V. Blair, 45 Md. 102 1413,
1414
xlvii
TABLE OF CASES
[The references are to pages]
Chesapeake, etc. Ry. Co. v.
Deepwater Ry. Co., 57
W. Va. 641; 50 S. E. 890 305,
913, 914, 915
V. Miller, 114 U. S. 176;
5 Sup. a. 813 1521, 1522, 1522
Cheshire Banking Co., 32 Ch.
D. 301 170
Chester v. Buffalo Car Mfg.
Co., 70 N. Y. App. Div.
443; 75 N. Y. Supp. 428 1151
Chester Glass Co. v. Deevey,
16 Mass. 94; 8 Am. Dec.
128 853
Chesterfield, etc. Colliery Co.
V. Black, 37 L. T. 740 1311
Chestnut Hill, etc. Co. v.
Rutter, 4 Serg. & R. (Pa.)
6; 8 Am. Dec. 675 869
Chetlain v. RepubUc Life Ins.
Co., 86 111. 220 196
Chew V. Bank of Baltimore,
14 Md. 299 709, 754, 755
V. Keck, 4 Rawle (Pa.)
163 404, 405
Chewacla Lime Works v. Dis-
mukes, 87 Ala. 344; 6 So.
122; 5 L. R. A. 100 851, 856
Chicago V. Cameron, 120 111.
447; 11 N. E 899 952, 972
V. Mills, 204 U. S. 321 970
Chicago Bldg. & Mfg. Co. v.
Talbotton Creamery, etc.
Co., 106 Ga. 84; 31 S. E.
809 280, 280, 310
Chicago Deposit Vault Co. v.
McNulta, 153- U. S. 554;
14 Sup. Ct. 915 _ 1644
Chicago Dock Co. v. Garrity,
116 111. 155; 3N. E. 448 ' 25
Chicago Edison Co. v. Fay,
164 111. 323; 45 N. E.
534 728, 729, 729, 754, 754, 755
Chicago Hansom Cab Co. v.
Yerkes, 141 111. 320; 30
N. E. 667; 33Am. St. Rep.
315 1080, 1083, 1312
Chicago-Joplin Lead & Zinc
Co., 104 Fed. 67 22
Chicago Macaroni, etc. Co. v.
Boggiano, 202 111. 312; 67
N. E. 17 982, 1016, 1056
Chicago Mut. Life, etc. Ass'n
V. Hunt, 127 111. 257;
20 N. E. 55; 2 L. R. A.
549 1025
Chicago Pneumatic Tool Co.
V. Munsell, 107 111. App.
344 1372
xhiii
Chicago Tire Co. v. Chicago
Nat. Bank, 176 111. 224; 52
N. E. 52 1382
Chicago Title, etc. Co. v.
State Bank of Ambia, 86
Fed. 863; 30 C. C. A. 443 663
Chicago, etc. Co. v. Biddison,
46 111. App. 423 1237
Chicago, etc. Granaries Co.
(1898), 1 Ch. 263 1419, 1463
Chicago, etc. R. R. Co. v.
Coleman, 18 111. 297; 68
Am. Dec. 544 1374
V. Fosdick, 106 U. S. 47;
1 Sup. Ct. 10 1461, 1462, 1462,
1465, 1466, 1466, 1467, 1467,
1468, 1484, 1595, 1623, 1624,
1625, 1638, 1675
Chicago, etc. R.R. Co. v. Iowa,
94 U. S. 155 33
V. Keegan, 185 111. 70;
56 N. E. 1088 848
V. Lewis, 53 Iowa 101 ; 4
N. W. 842 406, 848
V. Marseilles, 84 111. 145 517
V. McCammon, 61 Fed.
772; IOC. C. A. 50 1635
V. Pyne, 30 Fed. 86 1420, 1472
V. Stafford Co., 36 Kans.
121; 12 Pac. 593 147, 149
V. Towle, 10 Ind. App.
540; 37 N. E. 358
Chicago, etc. Ry. Co. v.
Ayres, 140 111. 644; 30
, N. E. 687
V. James, 22 Wise. 194
V. Lowenthal, 93 111. 433
1534, 1540
V. McGuire (Ind.), 65
N. E. 932
V. Southern Indiana
Ry. Co. (Ind.), 70 N. E.
843
V. State (Ark.), 106 S.
W. 199
V. Tice (111.), 83 N. E.
818
V. Union Pac. Ry. Co.,
47 Fed. 15 992, 1003, 1003
Chickering, Re, 56 Vt. 82 1592
Chicora Co. v. Crews, 6 S. Car.
243 258, 259
Chiera v. Brevoort, 97 Mich.
638; 57 N. W. 193
Chilberg v. Siebenbaum, 41
Wash. 663 ; 84 Pac. 598
Chilcott V. Washington, etc.
Colonization Co. (Wash.),
88 Pac. 113 288
1632
80
1374
1510
868
220
1510
1061
614
TABLE OF CASES
[The references are to pages]
Child V. Hudson's Bay Co.,
2 P. Wms. 207 567, 571, 660,
774
V. Hugg, 41 Cal. 519 808
V. New York, etc. R. R.
Co., 129 Mass. 170 1453, 1457,
1461, 1665
Childers v. Shepherd, 142 Ala.
385; 39 So. 235 1402
Childs v.Smd, 32 W. Va. 66;
9 S. E. 362 123, 126, 254
Chillington Iron Co., 29 Ch.
D. 159 1038
Chiniquy v. Bishop of Chi-
cago, 41 111. 148
Chorley, Ex parte, 11 Eq. 157
249
1420,
1421
Chott V. Tivoli Amusement
Co., 114 111. App. 178 924
Chouteau v. Allen, 70 Mo. 290
1425, 1436
Chouteau Ins. Co. v. Floyd, 74
Mo. 286 606
Chouteau Spring Co. v. Har-
ris, 20 Mo. 382 695, 701, 745
Choutteau Ins. Co. v.
Holmes's Adm'r, 68 Mo.
601; 30 Am. Rep. 807 1201
Chrisman-Sawyer Banking
Co. V. Independence Wool
Mfg. Co., 168 Mo. 634; 68
S. W. 1026 521, 524
Christensen v. Eno, 106 N. Y.
97; 12 N. E. 648; 60 Am.
Rep. 429 601, 630
Christian v. Atlantic & North
Carolina R. R. Co., 133
U. S. 233; 10 Sup. Ct.
260 804
Christian, etc. Grocery Co. v.
Fniitdale Lumber Co., 121
Ala. 340; 25 So. 566 239, 245
Christian Union v. Yount, 101
U. S. 352 837, 837
Christie v. Taunton, etc. Co.
(1893), 2 Ch. 175 1440, 1440
Christopher v. Nor veil, 201
U. S. 216; 26 Sup. Ct.
502 708
Christopher v. Noxon, 4 Ont.
672 1005, 1007, 1058, 1226,
1232 1309
Chubb V. Upton, 95 U. S. 665 ' 248,
483, 492
Church V. Church Cementico
Co., 75 Minn. 85; 77N.W.
548 287, 297, 1238
V. Citizens' St. R. Co., 78
Fed. 526 941, 969, 980
Church, M. E. v. Picketts, 19
N. Y. 482 229
Church of the Holy Com-
munion, 14 Phila. 121 127
Church of St. Stanislaus v.
Algemeine Verein, 31 N. Y.
App. Div. 133; 52 N. Y.
Supp. 922; 164 N. Y. 606;
58 N. E. 1086 303, 304
Cincinnati Mut., etc. Ass. Co.
V. Rosenthal, 55 111. 85; 8
Am. Rep. 626 865
Cincinnati Volksblatt Co. v.
Hoffmeister, 62 Oh. St.
189; 56 N. E. 1033; 78
Am. St. Rep. 707; 48 L. R.
A. 732 902, 902, 903, 904, 905,
907
Cincinnati, etc. R. R. Co. v.
Danville, etc. Ry. Co., 75
111. 113 250
V. Duckworth, 1 Oh. Circ.
Dec. 618 957,958,958
Cincinnati, etc. Ry. Co. v.
Citizens' Nat. Bank, 56
Oh. St. 351; 47 N.E. 249:
43 L. R. A. 777 734, 738, 741
V. Third Nat. Bank, 1
Oh. Circ. Ct. 199 734, 741
Citizens' Bank v. Kalamazoo
Co. Bank, 111 Mich. 313;
69 N. W. 663 772, 776, 776
Citizens' Bldg., etc. Ass'n v.
Coriell, 34 N. J. Eq. 383 1264,
1274, 1274
Citizens' Life Ass. Co. v.
Brown (1904), A. C. 423 1362
Citizens' Loan Ass'n v. Lyon,
29 N. J. Eq. 110 1259
Citizens' Mutual Fire Ins. Co.
V. Sortwell, 8 Allen (Mass.)
217 994, 996, 1012
Citizens' Nat. Bank v. El-
liott, 55 Iowa 104; 7N. W.
470; 39 Am. Rep. 167 1237,
1247
Citizens' State Bank v. Haw-
kins, 71 Fed. 369; 18
C. C. A. 78 834
Citizens' Trust, etc. Co. v.
Tompkins, 97 Md. 182; 54
AtL 617 1345, 1602
Citizens', etc. Trust Co. v.
Union Mining, etc. Co., 106
Fed. 97 985
City V. Lamson, 9 Wall. 477
1447, 1448, 1448, 1449
City Bank v. Bruce, 17 N. Y.
507 517, 523, 526, 1187
xlix
TABLE OF CASES
[The references are to pages]
City Council v. Jane Moore-
head, 2 Rich. Law (S. Car.)
430 406
City Electric St. Ry. v. First
Nat. Bank, 62 Ark. 33; 34
S. W. 89; 31 L. R. A. 535;
54 Am. St. Rep. 282 1370, 1376,
1377
City Nat. Bank v. Merchants',
etc. Nat. Bank (Tex.), 105
S. W. 338 1306, 1306, 1307
City of Atlanta v. Gate City
Gas Light Co., 71 Ga. 106 6
City of Chicago v. Cameron,
22 111. App. 91 964, 968, 971
City of Defiance v. Schmidt,
123 Fed. 1 ; 59 C. C. A. 169 397
City of Elizabeth v. Force, 29
N. J. Eq. 587 1435
City of Franklin v. Caldwell
(Ky.), 96 S. W. 605 1126
City of Goodland v. Bank of
Darlington, 74 Mo. App.
365 37, 75, 846, 852
City of Indianapolis v. Con-
sumers' Gas Trust Co.,
144 Fed. 640; 75 C. C. A.
442 71
City of Kalamazoo v. Kala-
mazoo, etc. Power Co., 124
Mich. 74; 82 N. W. 811 39
Qty of Kansas v. Hannibal,
etc. R. R. Co., 77 Mo. 180 399,
406
Gty of Lincoln v. Lincoln St.
Ry. Co., 67 Nebr. 469; 93
N. W. 766 1497
City of London Brewery v.
Inland Revenue Comm'rs
(1899), 1 Q. B. 121 1495
City of London El. Lighting
Co. V. London Corporation
(1901), 1 Ch. 602 1305, 1309
City of Louisville v. Louisville
Water Co., 26 Ky. Law
Rep. 425; 81 S. W. 698 876
Qty of Madison v. Madison
Gas, etc. Co. (Wise), 108
N. W. 65 961
City of Quincy v. Burlington,
etc. R. R. Co., 94 111. 537 1503,
1521
City of South St. Paul v.
Lamprecht Bros. Co., 88
Fed. 449; 31 C. C. A. 585 1464
City of Spokane v. Amster-
damsch Trustees Kantoor,
22 Wash. 172; 60 Pac. 141 844,
963
I
Claflin V. South Carolina R. R.
Co., 8 Fed. 118 1456, 1473, 1531
1531
Clancy v. Onondaga Fine Salt
Mfg. Co., 62 Barb. (N. Y.)
395 261
Chandler v. Bacon, 30 Fed.
Rep. 538 274
Clap V. Interstate Ry. Co., 61
Fed. 537 1602
Clapp V. Astor (N. Y.), 2 Edw.
Ch. 379 1114, 1137
V. Peterson, 104 111. 26 518
Clark V. Am. Coal Co., 86
Iowa 436; 53 N. W. 291;
17 L. R. A. 557 680, 969, 1298,
1320
V. Balm, Hill & Co.
(1908), 1 K. B. 667 1395
V. Bever, 139 U. S. 96;
11 Sup. Ct. 468 631
V. Brown (Tex.), 108
S. W. 421 1189
ij.Campbell, 23 Utah 569 ;
65 Pac. 496; 90 Am. St.
Rep. 716; 54 L. R. A. 508 1135
V. Central R. R. etc. Co.,
66 Fed. 803; 14 CCA. 112
1561, 1562
V. Clark (Mich.), 115
N. W. 416 517
V. Continental Imp. Co.,
57 Ind. 135 163
V. Farmers Mfg. Co., 15
Wend. (N. Y.) 256 402, 1423
V. German Mut. Fire Ins.
Co., 7 Mo. App. 77 384
V. German Security
Bank, 61 Miss. 611 715
V. Iowa aty, 20 WaU.
583 1449, 1459
V. Jones, 87 Ala. 474; 6
So. 362 384
1;. Lexington Stoveworks,
24 Ky. Law Rep. 2247; 73
S. W. 788 645
V. National Linseed Oil
Co., 105 Fed. 787; 45
C C A. 53 957
V. Rhode Island Locomo-
tive Works, 24 R. I. 307;
53 Atl. 47 890
V. St. Louis, etc. R. R.
Co., 58 How. Pr. (N. Y.) 21
1472, 1601
V. Turner, 73 Ga. 1 483
Clark Co., James v. Colton,
91 Md. 195; 46 Atl. 386;
49 L. R. A. 698 1276, 1305
TABLE OF CASES
[The references are to pages]
Clark's Case, 7 Eg. 550 612, 1242
Clarke v. Central R. R., etc.
Co., 50 Fed. 338; 15 L. R.
A. 683 1026
V. Central R. R., etc. Co.,
54 Fed. 556 1641
V. Central R. R., etc. Co.,
66 Fed. 16 1602, 1660
V. City of Janesville, 1
Biss. 98 1449, 1451
V. Eastern Bldg. etc.
Ass'n, 89 Fed. 779 890, 890,
904 969
V. Hart, 6 H. L. Cas. 633 '658,
661, 665
V. Lexington Stove-
works, 24 Ky. Law Rep.
1755; 72 S. W. 286 645
V. Lincoln Lumber Co.,
59 Wise. 655; 18N.W.492 632
V. O. & S. W. R. R., 5
Nebr. 314 294
V. Richmond, etc. Co.,
62 Fed. 328; 10 C. C. A.
387 1026, 1026
V. Thomas, 34 Oh. St. 46 490,
492
Clarke's Case, 27 L. T. 843 662
, 8 Ch. D. 635 154, 159
Clarke & Helden's Case, 37
L. T. 222 568, 1334
Clarkson v. Clarkson, 18
Barb. (N. Y.) 646 1150, 1154
Clarkson Homei). Chesapeake,
etc. Ry. Co., 92 N. Y. App.
Div. 491; 87 IST. Y. Supp.
348; 182 N. Y. 507; 74
N. E. 1118 1431, 143'1, 1432
V. Missouri, etc. Ry. Co.,
182N. Y. 47; 74N. E. 571
758, 758, 1431, 1431, 1432
Clawson v. Clayton (Utah), 93
Pac. 729 899, 902, 904, 905
Clay V. East Tennessee, etc.
R. R. Co., 6 Heisk. (Tenn.)
421 1503, 1515, 1519, 1551
V. Selah Valley, etc. Co.,
14 Wash. 543; 45 Pac. 141
1493, 1586, 1586, 1587, 1594
Clayton v. Gresham, 10 Ves.
288 1141
Clayton Engineering & Elec-
trical Const. Co., 90 L. T.
283 1639, 1640
Cleaveland v. MuUin, 96 Md.
598; 54 Atl. 665 147, 209, 211
Clegg V. Hamilton, etc. Co.,
61 Iowa 121; 15 N. W.
865 128
Clem V. Newcastle, etc. R. R.
Co., 9 Ind. 488; 68 Am.
Dec. 653 185
Clemens v. Hecksher, 185 Pa.
St. 476; 40 Atl. 80 799
Clement v. City of Lathrop,
18 Fed. 885 379
«. U.S., 149 Fed. 305; 79
C. C. A. 243 107, 225
V. Young-McShea Amuse-
ment Co. (N.,J.), 60 Atl. 419 1071
V. Young-McShea Amuse-
ment Co. (N. J.), 67 Atl. 82
1078, 1196
Clements v. Bowes, 17 Simons
167; 1 Drewry 684 342
V. Sherwood-Dunn, 95
N. Y. Supp. 766; 108
N. Y. App. Div. 327 786,786
Clergue v. Humphrey, 31 Can.
Sup. Ct. 66 307
Cleveland Iron Co., 16 W. R.
95 178
Cleveland Paper Co. v.
Courier Co., 67 Mich. 152;
34 N. W. 556 79
Cleveland Rolling-Mill Co. v.
Texas, etc. Ry. Co., 27 Fed.
250 600
Cleveland, etc. Co. v. Taylor
Bros. Co., 54 Fed. 82 1006
Cleveland, etc. R. R. Co. v.
Knickerbocker Trust Co.,
64 Fed. 623 1574
V. Robbins, 35 Oh. St. 483
732,732,753,753,755,1130
Clevenger v. Moore, 71 N. J.
Law 148; 58 Atl. 88 172
Clews V. Friedman, 182 Mass.
555; 66 N. E. 201 717
Clews & Co. V. First Mortgage
Bondholders, 51 Ga. 131 1452
Clifton Heights Land Co. v.
Randell, 82 Iowa 89; 47
N. W. 905 254
Clinch V. Financial Corpora-
tion, 4 Ch. 117 967, 972, 977
Clinton Novelty Iron Works
V. Neiting (Iowa), 111 N. W.
974 128
Clive V. Clive, Kay 600 815, 1137,
1157
Clokey v. Bvansville, etc. R.
R. Co., 16 N. Y. App. Div.
304; 44 N. Y. Supp. 631
Close V. Glenwood Cemetery,
107 U. S. 466; 2 Sup. Ct.
267
1450,
1452
237
TABLE OF CASES
[The references are to pages]
Clowe V. Imperial Pine Prod-
uct Co., 114 N. Car. 304;
19 S. E. 153 394
Clowes V. Brettell, 11 M. & W.
461 295
V. Miller, 60 N. J. Eq.
179; 47 Atl. 345 1051, 1052
Clyde V. Richmond, etc. R. R.
Co., 55 Fed. 445 1585, 1587
V. Richmond, etc. R. R.
Co., 63 Fed. 21 1612
Clyde Tin Plate Co., 47 L. T.
439 1513
Coal Co. V. Land Co., 106
Tenn. 41; 60S. W. 502 1525
Coal Belt Electric Ry. Co. v.
Peabody Coal Co. (111.), 82
N. E. 627 • 876
Coalport China Co. (1895), 2
Ch. 404 765
Coats, Re, 73 N. Y. App. Div.
178; 76 N. Y. Supp. 730 895
, Re, 75 N. Y. App. Div.
469; 78 N. Y. Supp. 425 430
, Re, 75 N. Y. App. Div.
567; 78 N. Y. Supp. 429
893,
894
Coats, J. & P. V. Crossland, 20
Times L. R. 800 1355
Cobb V. Bryan, 83 S. "W. 887
(Tex.) 239, 239, 239, 380
V. Fant, 36 S. Car. 1; 14
S. E. 959 1154
V. Lagarde, 129 Ala. 488 ;
30 So. 326 894, 902, 906
Cobbett V. Woodward, 5
Sawy. 403 1161
Coble V. Beall, 130 N. Car.
533; 41 S. E. 793 960
Cochran v. Arnold, 58 Pa. St.
399 222, 240, 245, 261
V. MoGee, 53 S. W. 519 1122
V. Pittsburg, etc. R. Co.,
150 Fed. 682 1587, 1594, 1595
Cockburn v. Peel, 3 De G. F. &
J. 170 1445
V. Union Bank, 13 La.
Am. 289 894, 903, 905
Cockrill V. Abeles, 86 Fed.
505; 30 C. C. A. 223 91, 489,
497, 1265
V. Cooper, 86 Fed. 7; 29
C. C. A. 529 1259, 1266
Cocksedge v. Metropolitan,
etc. Ass'n, 64 L. T. 826 178
Coddington v. Canaday, 157
Ind. 243; 61 N. E. 567 634,
1274, 1284, 1286
V. Gilbert, 17 N. Y. 489 1413
lii
Codman v. Vermont, etc. R. R.
Co,. 16 Blatchf. 165 1433
Coe V. Columbus, etc. R. R.
Co., 10 Oh. St. 372; 75 Am.
Dec. 518 1400, 1490, 1503,
1635
V. Delaware, etc. R. R.
Co., 34 N. J. Eq. 266 1535
V. East & West R. R. Co.,
52 Fed. 531 1069, 1306, 1309,
1402
V. Johnson, 18 Ind. 218 1495,
1551
V. Knox County Bank,
10 Oh. St. 412 1551
V. McBrown, 22 Ind.
252 1551
V. New Jersey Midland
Ry. Co., 31 N. J. Eq. 105 405,
1245, 1466, 1564, 1639
Coffey V. Coffey, 179 111. 283;
53 N. E. 590 683, 721
Coffin V. Collins, 17 Me. 440 915,
917
Cogan V. Conover Mfg. Co.
(N. J.), 60 Atl. 408 1570
V. Conover Mfg. Co.
(N. J.), 65 Atl. 484 1372
Cogswell V. Second Nat.
Bank, 78 Conn. 75; 60 Atl.
1059 541, 543
Cohen v. Wilkinson, 1 Mac. &
G. 481 73
Coit V. Gold Amalgamating
Co., 119 U. S. 343; 7 Sup.
Ct. 231 635, 636
Colbum V. Riley, 11 Colo. App.
184; 52 Pac. 684 811
Colby V. Equitable Trust Co.,
106 N. Y. Supp. 801; 55
N. Y. Misc. 355 1307
Cole V. Millerton Iron Co., 59
Hun (N. Y.) 217; 13 N. Y.
Supp. 851 1315, 1328
Coleman v. Coleman, 78 Ind.
344 253
V. Columbia Oil Co., 51
Pa. St. 74 517, 521, 1134
V. Howe, 154 111. 458; 39
N. E. 725; 45 Am. St. Rep.
133 636, 636
V. Llanelly Ry., etc. Co.,
17 L. T. Rep. 86 1528
V. San Rafael, etc. Co.,
49 Cal. 517 845, 862
V. Second Ave. R. R. Co.,
38 N. Y. 201 1297
V. Spencer, 5 Blackf.
(Ind.) 197 157, 716
TABLE OF CASES
[The references are to pages]
Coler V. Grainger County, 74
Fed. 16; 20 C. C. A. 267 66
V. Tacoma Ry., etc. Co.,
65 N. J. Eq. 347; 54 Atl.
413; 103 Am. St. Rep. 786 71,
646, 1026
Coleridge Creamery Co. v.
Jenkins, 66 Nebr. 129; 92
N. W. 123 861
Coles V. Bank of England, 10
Ad. & E. 437 ■ 728
V. Iowa State, etc. Ins.
Co., 18 Iowa 425 593
V. Kennedy, 81 Iowa
360; 46 N. W. 1088; 25
Am. St. Rep. 503 185
Colgate V. U. S. Leather Co.
(N. J.), 67 Atl. 657 140, 141,
447, 447, 968, 971, 1081, 1307
College Park Electric Belt
Line v. Ide & Son, 15 Tex.
Civ. App. 273; 40 S. W. 64
1276, 1318, 1324
Collie's Claim, 12 Eq. 246 1209
Collier v. Consolidated Ry.,
etc. Co., 57 Atl. 417; 70
N. J. Law Rep. 313 1186, 1226
V. Doe ex dem. Alexan-
der, 142 Ala. 422 ; 38 So. 244 408
CoUingham v. Sloper (1893), 2
Ch. 96 1555, 1556
V. Sloper (1901), 1 Ch.
769 1672
Collingwood v. Berkeley, 15
C. B. N. 8. 145 308, 308
Collins V. Collins, 12 Eq. 455 424
CoUum, Ex parte, 9 Eq. 236 200
Colman v. Oil Co., 25 W. Va.
148 1373, 1375
Colmer, James, Ltd., Re
(1897), 1 Ch. 524 544
Colonial Bank v. Cady, 15
A. C. 267 682, 687, 687, 694,
722, 722, 725, 788, 790
V. Hepworth, 36 Ch. D.
36 722
v. Whinney, 11 App.
Cas. 426 422, 423, 685, 732,
747, 748
V. Willan, 5 P. C. 417 1073
Colonial Dames of America
V. Colonial Dames of New
York, 29 N. Y. Misc. 10; 60
N. Y. Supp. 302 ; 63 N. Y.
App. Div. 615; 71 N. Y.
Supp. 1134 371
Colonial Investment &
Agency Co., 19 Vict. 381
520,
620
Colonial Trust Co. v. McMil-
lan, 188 Mo. 547; 87 S. W.
933; 107 Am. St. Rep. 335 622,
628
Colonist Printing & Pub. Co.
V. Dunsmuir, 32 Can. Super.
Ct. 679 474
Colorado Land, etc. Co. v.
Adams, 5 Colo. App. 190;
37 Pac. 39 284, 286
Colorado Springs Co. v. Amer-
ican Pub. Co., 97 Fed. 843;
38 C. C. A. 433 87, 861, 992,
1193
Colorado Trading, etc. Co. v.
Acres Commission Co., 18
Colo. App. 253 ; 70 Pac. 954 298
Colpe V. Jubilee Mining Co.
(Cal.), 84 Pac. 324 594
Colquitt V. Howard, 11 Ga.
556 304
Colt V. Ives, 31 Conn. 25; 81
Am. Dec 161 715
Coltman v. Coltman, 19 Ch.
D. 64 1260
Coltness Iron Co. v. Black, 6
A. C. 315 1099
Colton V. Williams, 65 111.
App. 466 698, 702, 712
Colton Improvement Co. v.
Richter, 26 N. Y. Misc. 26;
55 N. Y. Supp. 486 328, 1300
Coltrane v. Templeton, 106
Fed. 370; 45 C. C. A. 328 973
Columbia Bank v. Gospel
Tabernacle, 127 N. Y. 361 ;
28 N. E. 29 1210, 1379, 1379
Columbia Bldg., etc. Ass'n v.
Junquist, 111 Fed. 645 593
Columbia Bottom Levee Co.
V. Meier, 39 Mo. 53 1032
Columbia Iron Works v. Na-
tional Lead Co., 127 Fed.
99; 62 C. C. A. 99 43
Columbia Nat. Bank v.
Mathews, 85 Fed. 934; 29
C. C. A. 491 489, 492, 1045
Columbia Nat. Bank's Ap-
peal, 16 Wkly. Notes Cas.
(Pa.) 357 1006
Columbia Nat. Sand Dredg-
ing Co., 136 Fed. 710 958
Columbia, etc. Trust Co. v.
Kentucky Union Ry. Co.,
60 Fed. 794; 9 C. C. A.
264 1457, 1507, 1624, 1627
Columbian Bank's Estate,
147 Pa. St. 422; 23 Atl.
625, 626, 628 518
liii
TABLK OF CASES
[The references are to pages]
1107
523
422
894
214
1319
1613
715
Coliunbus Trust Co. v. Mo-
sher, 100 N.Y.Supp. 1066;
61 N. Y. Misc. 270 .
Columbus, etc. R. R. Co.'s
Appeals, 109 Fed. 177; 48
C. C. A. 275 1450, 1508, 1534,
1539, 1634, 1634, 1669, 1669
Colville's Case, 48 L. J. Ch.
633
Colvin V. Williams, 3 H. & J.
(Md.) 38; 5 Am. Dec. 417
Colwell V. Col well Lead Co.,
76 N. y. App. Div. 615; 78
N. Y. Supp. 607
Comanche Cotton Oil Co. v.
Browne (Tex.), 92 S. W.
450
Combina,tion Trust Co. v.
Weed, 2 Fed. 24
Combs V. Smith, 78 Mo. 32
Comeau v. Guild Farm Oil
Co., 3 Daly (N. Y.) 218
Commercial Bank v. Chatfield,
121 Mich. 641; 80 N. W.
712 1283, 1368
V. Chatfield, 127 Mich.
407; 86 N. W. 1015 1283, 1368
V. French, 21 Pick.
(Mass.)486;32Am.Dec.280 380
V. Kortright, 22 Wend.
(N. Y.) 348; 34 Am. Dec.
317 685, 694, 749, 753,
807, 808
V. Nolan, 7 How. (Miss.)
508 865, 868
V. Pfeiffer, 108 N. Y.
242; 15N. E. 311
V. Warthen, 119 Ga. 990;
47 S. E. 536
Commercial Bank of Canada
V. Great Western Ry. Co.,
13 L. T. 105
Commercial Fire Ins. Co. v.
Board of Revenue of Mont-
gomery County, 99 Ala. 1;
14 So. 490; 42 Am. St
Rep. 17
Commercial Life Ass., 27
L. J. Ch. 803
Commercial Nat. Bank v.
Brill, 37 Nebr. 626; 56
N. W. 382 1377
V. Burch, 141 111. 519;
31 N. E. 420; 33 Am. St.
Rep. 331 518
V. Gibson, 37 Nebr. 750;
56 N. W. 616 617
■ V. Vine, 82 Fed. 799; 27
C. C. A. 171 84
248
601
1221
75,77
1240
Commercial Nat. Bank v.
Wemhard, 192 U. S. 243;
24 Sup. Ct. 253 1191
Commercial Wood, etc. Co. v.
Northampton Portland Ce-
ment Co. (N. Y.), 82 N. E.
730 1216
Commissioners of Craven v.
Atlantic, etc. R. R. Co., 77
N. Car. 289 66, 1401
Commissioners of Douglas
County V. BoUes, 94 U. S. 104 241
Commissioners of Johnson '
Co. V. Thayer, 94 U. S. 631
Commissioners of Knox Co. v.
Aspinwall, 21 How. 539
1434,
1486
1220,
1448
368
1249
1435
1040
1031
1522
Hv
Common v. McArthur, 29
Can. Sup. Ct. 239 241, 663
Commonwealth v. American
Snuff Co. (Ky.), 101 S. W.
364
V. Arrison, 15 Serg. & R.
(Pa.) 127; 16 Am. Dec. 531
V. Bank, 98 Mass. 12
V. Boston & Albany R.
R. Co., 142 Mass. 146; 7
N. E. 716 496, 497, 523
V. Bringhurst, 103 Pa.
St. 134; 49 Am. Rep. 119
V. Cain, 5 Serg. & R.
(Pa.) 510
V. Central Pass. Ry. Co.,
52 Pa. St. 506
V. Christian, 9 Phila. 556
1363, 1364
V. Conover, 10 Phila. 55
1013, 1013, 1014
V. Compton, 137 Pa. St.
138; 20 Atl. 417 695, 712
V. CuUen, 13 Pa. St. 133;
53 Am. Dec. 450 1068, 1186
V. Dalzell, 152 Pa. St.
217; 25 Atl. 535; 34 Am.
St. Rep. 640 1020, 1021, 1023
V. Det wilier, 131 Pa. St.
614; 18 Atl. 990; 7
L. R. A. 357 1013, 1015,1025,
1040, 1167, 1168, 1184
V. Eagle Fire Ins. Co.,
14 Allen (Mass.) 344 1239
V. Empire Pass. Ry.
Co., 134 Pa. St. 237; 19
Atl. 629 901, 904
V. Graham, 64 Pa. St. 339 1249
V. Keystone Electric
Light, etc. Co., 193 Pa. St.
245; 44 Atl. 326 43
TABLE OF CASES
[The references are to pages]
Commonwealth v. Lehigh Ave.
Ry. Co., 129 Pa. St. 405; 18
Atl. 414, 498 ; 5 L. R. A. 367 108
V. Licking Valley Bldg.
Ass'n, 26 Ky. Law Rep.
730; 82 S. W. 435 107, 133, 141
V. Monongahela Bridge
Co. (Pa.), 64 Atl. 909 877
V. New York, etc. R.
Co., 132 Pa. St. 591; 19
Atl. 291; 7L. R. A. 634 419,
846, 877
V. Patterson, 158 Pa. St.
476; 27 Atl. 998 1017, 1023,
1056
V. Phoenix Iron Co., 105
Pa. St. Ill; 31 Am. Rep.
184 894, 894, 895, 905
Pittsburg, etc. Ry. Co.,
74 Pa. St. 83
V. Reinoehl, 163 Pa. St.
287; 29 Atl. 896; 25
L. R. A. 247
V. Smith, 45 Pa. St. 59
V. Smith, 10 Allen
(Mass.) 448; 87 Am. Deo.
672 63, 66, 1408, 1532
V. Stevens, 168 Pa. St.
582; 32 Atl. Ill 1064, 1249
V. Stevenson, 200 Pa.
509; 50 Atl. 91 1169
V. Susquehanna, etc.
R. R. Co., 122 Pa. St. 306;
15 Atl. 448; 1 L. R. A. 225
1527, 1530
'■ V. Watmough, 6 Whart.
117 715
V. Wickersham, 66 Pa.
St. 134 1032, 1206
V. Woelper, 3 Serg. & R.
(Pa.) 29; 8 Am. Dec. 628 913,
1012, 1037, 1059, 1059
V. Woodward, 4 Phila.
124 1023, 1024
V. Wyman, 8 Mete.
(Mass.) 247 1365
Commonwealth of Virginia v.
Chesapeake, etc. Canal Co.,
35 Md. 1 1670
V. State of Md., 32 Md.
501 1450, 1455, 1456, 1457,
1457, 1677, 1680
Commonwealth for Mercer
County Court v. Spring-
field, etc. Turnpike Co., 10
Bush (Ky.) 254 1122
Commonwealth ex rel. Atty.-
Gen. V. Mononghela Bridge
Co. (Pa.), 64 Atl. 909 873
495
25
1249
Commonwealth ex rel. Jack-
son V. Smith, 45 Pa. St. 59
996,
1231
Commonwealth ex rel. Lacko-
vic V. Jankovic (Pa.), 65
Atl. 1099 930
Commonwealth ex rel. Nick-
erson v. Conover, 30 Leg.
Int. (Pa.) 200 116
Commonwealth Roofing Co.
V. North American Trust
Co., 135 Fed. 984; 68
C. C. A. 418 1614
Components Tube Co. v. Nay-
lor (1900), 2 Ir. 1 184
Compton V. Jesup, 167 U. S.
1; 17 Sup. Ct. 795 1625, 1629
V. Railway Co., 45 Oh.
St. 592; 16 N. E. 110 1500
V. Van Volkenburgh, 34
N. J. Law Rep. 134 569
Conant v. Millaudon, 5 La.
Ann. 542 1014, 1014, 1020,
1058, 1065, 1066, 1167
Conant, Ellis & Co. v. Seneca
County Bank, 1 Oh. St. 298 774
Concord First Nat. Bank v.
Hawkins, 174 U. S. 364;
19 Sup. a. 739 75, 834
Cone V. Russell, 48 N. J. Eq.
208; 21 Atl. 847 1029, 1029
Congregational Society of
Bethany v. Sperry, 10
Conn. 200 994
Conklin v. U. S. Shipbuilding
Co., 140 Fed. 219 1598, 1599
■— — V. U. S. Shipbuilding Co.,
143 Fed. 631 1242
Conley v. Mathieson Alkali
Works, 190 U. S. 406; 23
Sup. Ct. 728 878
Connecticut Mut. Life Ins.
Co. V. Cleveland, etc. R. R.
Co., 41 Barb. (N. Y.) 9 1449,
1450, 1452
Connecticut River Sav. Bank
V. Fiske, 60 N. H. 363 110, 868,
1409
Connell v. Stalker, 21 N. Y.
Misc. 609; 48 N. Y. Supp.
77 585, 588
Conner v. Bramble, 6 Oh.
N. P. 195 1639
Connor v. Tennessee Central
Ry. Co., 109 Fed. 931; 48 C.
C. A. 730 ; 54 L. R. A. 687 1629
Conro V. Port Henry Iron Co.,
12 Barb. (N. Y.) 27 387, 1193,
1211
Iv
TABLE OF CASES
[The references are to pages]
Consett Iron Co. (1901), 1 Ch.
236 42, 135
Consolidated Copper Co. v.
Peddie, 5 Rettie 393 98, 189,
193, 1175
Consolidated Fruit Jar Co. v.
Wisner, 103 N. Y. App.
Div. 453; 93 N. Y. Supp.
128 1329
Consolidated Gas Co., 106
N. Y. Supp. 407 107
Consolidated Land Co., 20
W. R. 855 1415
Consolidated Plaster Co. v.
Wild (Colo.), 94 Pac. 285 1344
Consolidated Rendering Co.
(Vt.), 66 Atl. 790 891, 891
Consolidated Rendering Co.
V. Vermont, 28 Sup. Ct.
178 891, 891
Consolidated Tel., etc. Co., 43
Atl. Rep. 433 (N. J.) 922, 1017
Consolidated Vinegar Works
V. Brew, 112 Wise. 610; 88
N. W. 603 1259
Consolidated Water Co. v.
City of San Diego, 89 Fed.
272; 92 Fed. 759 1485, 1554,
1585
Consolidated Water Power
Co. V. Nash, 109 Wise. 490;
85 N. W. 485 1188
Consols Ins. Ass'n v. Newall,
3 Fost. & F. 130 203
Constant v. St. Alban's
Church, 4 Daly (N. Y.)
305 1210
Consterdine v. Consterdine,
31 Beav. 330 794, 813
Consumers' Gas Trust Co. v.
Quinby, 137 Fed. 882; 70
C. C. A. 220 46, 469, 982
Continental Fire Ass'n v.
Masonic Temple Co. (Tex.),
62 S. W. 930 853
Continental Ins. Co. v. New
York, etc. R. R. Co., 187
N. Y. 225 ; 79 N. E. 1026 1306,
1311, 1312
Continental Ins. Co. v. New
York, etc. R. R. Co., 103
N. Y. App. Div. 282; 93
N. Y. Supp. 27 1307, 1312
Continental Nat. Bank v.
Eliot Nat. Bank, 7 Fed. 369 684,
715
Continental Nat. Bldg., etc.
Ass'n V. Miller, 44 Fla. 757;
33 So. 404 957
1622
538,
1633
55
1402
1570
134,
1455
Continental Oxygen Co.
(1897), 1 Ch. 511
Continental Securities Co. v.
Northern Securities Co., 66
N.J. Eq. 274; 57 Atl. 876
542, 637
Continental Trust Co. v.
American Surety Co., 80
Fed. 180; 25 C. C. A. 364
V. Peterson (Nebr.), 107
N. W. 786
V. Toledo, etc. R. Co.,
59 Fed. 514 1602, 1620, 1620
Continental Trust Co. v. Tole-
do, etc. R. R. Co., 82 Fed.
642
V. Toledo, et8. R. R.
Co., 93 Fed. 532
Continental Varnish, etc. Co.
V. Secretary of State, 128
Mich. 621; 87 N. W. 901
149, 442, 486
Contracting, etc. Bldg. Co.
V. Continental Trust Co.,
108 Fed. 1; 47 C. C. A.
143
Converse v. Hood, 149 Mass.
471; 21 N. E. 878; 4 L.
R. A. 521 1030, 1063
V. United Shoe Machin-
ery Co., 185 Mass. 422; 70
N. E. 444 928, 947
Conway v. John, 14 Colo. 30;
23 Pac. 170 716
Conyngham's Appeal, 57 Pa.
St. 474 808, 809, 1329
Cooch V. Goodman, 2 Q. B.
580 396
Cook V. Am. Tubing, etc. Co.
(R. I.), 65 Atl. 641 84, 393
V. Berlin Woolen Mill
Co., 43 Wise. 433 944, 1312,
1335, 1367
V. Carpenter, 212 Pa.
177; 61 Atl. 804 616, 618,
697, 746
V. Carpenter, 212 Pa. 165 ;
61 Atl. 799; 108 Am. St.
Rep. 854 614
V. Chittenden, 25 Fed.
544 193, 196
V. Climber Co., 75 Miss.
121; 21 So. 795
V. Detroit, etc. Ry. Co.,
43 Mich. 349; 5 N. W. 390
319
— V. Equitable Bldg., etc.
Ass'n, 104 Ga. 814; 30 S.
E. 911
1632
465
TABLE OF CASES
[The references are to pages]
Cook I). Monroe, 45 Nebr. 349;
63 N. W. 800 1130, 1134, 1134
V. Sherman, 20 Fed. 167 1348
V. Sterling Electric Co.,
150 Fed. 766; 80 C. C. A.
502 281
Cook County Brick Co. v.
Kaehler, 83 111. App. 448 1120
Cook Mfg. Co., Louis v. Ran-
dall, 62 Iowa 244; 17 N.
W. 507 297, 297
Cooley V. Brainerd, 38 Vt. 394 1582
V. Curran, 104 N. Y.
Supp. 424
V. Curran,
Supp. 751
. Coolgardie, etc.
Times L. R. 277
, 76 L. T. N. s. 269
761
104 N. Y.
426, 761, 1356
Mines, 14
640
96, 98, 99
Coombs V. Barker, 31 Mont.
526; 79 Pac. 1 1323, 1344
V. Harford, 99 Me. 426;
59 Atl. 529 1012
Cooney v. Booth Packing Co.,
169 111. 370; 48 N. E. 406 848
Cooper t>. Dismal Swamp Canal
Co., 6 N. Car. 195 420, 750, 751
V. Frederick, 9 Ala. 738
517, 524
V. Griffen (1892), 1 Q.
B. 740 1177, 1177
V. Hill, 94 Fed. 582; 36
C. C. A. 402 92, 1259, 1265,
1284, 1288
— '■ — V. Illinois Central R. R.
Co., 38N. Y. App. Div. 22;
57 N. Y. Supp. 925 791, 1429,
1430, 1431, 1431
Coopers & Clark v. Wolf, 15
Oh. St. 523 1503, 1551, 1553
Copeland v. Copeland, 7
Bush (Ky.) 349 420
V. Johnson Mfg. Co., 47
Hun (N. Y.) 235 1316
V. North Eastern Ry.
Co., 6 E. & B. 277 679
Coppage V. Hutton, 124 Ind.
401; 24 N. E. 112; 7 L. R.
A. 591 ■ 202, 209, 211, 212
Copper Miners' Co. v. Fox, 16
Q.B.229(1851);15 Jur.703 825
Coppes V. Union Nat., etc.
Loan Ass'n (Ind.), 69 N. E.
702 920
V. Union Nat., etc. Ass'n
(Ind.), 67 N. E. 1022 918
Coppin V. Greenlees, etc. Co.,
38 Oh. St. 275 ; 43 Am. Rep.
425 517, 858
Coquard v. Nat. Linseed Oil
Co., 171 111. 480; 49 N. E.
563 907
V. St. Louis Cotton, etc."
Co., 7 S. W. Rep. 176 (Ma.)
519, 542
Corbett v. Woodward, 5 Sawy.
403 1199, 1200, 1207, 1276
Corbin v. E. Taussig & Co.,
132 Fed. 662 372
Corbus V. Alaska, etc. Mining
Co., 187 U. S. 455; 23 Sup.
Ct. 157 938, 946, 947, 949,
950
Corcoran v. Chesapeake, etc.
Canal Co., 1 Mac A. (D. C.)
358; 94 U. S. 741 1449, 1460,
1485, 1485, 1678
V. Snow Cattle Co., 151
Mass. 74; 23 N. E. 727 1380
V. Sonora Mining, etc.
Co., 71 Pac. 127; 8 Idaho
651 658, 913, 919
Cordova Union Gold Co.
(1891), 2 Ch. 580 633
Corey v. Morrill, 61 Vt. 598;
17 Atl. 840 120
Corgan v. George F. Lee Coal
Co. (Pa.), 67 Atl. 655 1111,
1134
Corinne Mill, etc. Co. v. To-
ponce, 152 U. S. 405; 14
Sup. Ct. 632
Cork, etc. Ry. Co. v. Caze-
nove, 10 Q. B. 935 173, 173
V. Goode, 13 C. B. 826 601,
615
Cork & Youghal Ry. Co., 4 Ch.
748 63
Com V. Skillem, 87 S. W. 142
(Ark.) 519, 1127
Cornbrook Brewing Co. v.
Law Debenture Corp.
(1904), 1 Ch. 103
Cornell v. Massey, L. R. 8 C.
P. 328
Cornell University!). Fiske, 136
U. S. 152; 10 Sup. Ct.
775
Comick V. Richards, 3 Lea
(Tenn.) 1 684, 715
Cornwall Minerals Ry. Co., 48
L. T. N. s. 41
, (1897) 2 Ch. 74
Cornwall, etc. Mining Co.
V. Bennett, 5 H. & N. 423
1246
1396
1365
848
1644
1447
Corporation of Barnstable v.
Lathey, 3 T. R. 303
Ivii
912,
914
TABLE OF CASES
[The references are to pages]
Corry v. Londonderry, etc.
Ry. Co., 29 Beav. 263 459,
459, 1103, 1104
Cortes Co. v. Thannhauser, 45
Fed. 730 314, 316
Corwith V. Culver, 69 111. 502
154, 608
Costa Rica Ry. Co. v. For-
wood (1900), 1 Ch. 756;
(1901) 1 Ch. 746 1305, 1308,
1333, 1334
Costello V. Outterson, 112 N.
Y. App. Div. 680; 98 N.
Y. Supp. 880 1359
V. Portsmouth Brewing
Co., 69 N. H. 405; 43 Atl.
640 572
Coster V. Parkersburg Branch
R. R. Co., 131 Fed. 115 1617
Cotheal v. Brouwer, 5 N. Y.
562 899, 904, 908
Cottam V. Eastern Counties
Ry. Co., IJ. & H. 243 1430
Cotter V. Butte, etc. Smelt-
ing Co., 31 Mont. 129; 77
Pac. 509 154
Cotterell, Ex parte, 32 L. J.
Ch. 66 1175
Cotting V. New York, etc. R.
R. Co., 54 Conn. 156; 5
Atl. 851 455, 1098
Cotton V. Imperial, etc. Cor-
poration (1892), 3 Ch. 454
51, 51
Cotton Jammers, etc. Ass'n
V. Taylor, 23 Tex. Civ. App.
367; 56 S. W. 553 580, 596
Couch V. City Fire Ins. Co.,
38 Conn. 181 ; 9 Am. Rep.
375 868
CoughUn V. Knights of Co-
lumbus (Conn.), 64 Atl. 224 588
County Court v. B. & O. R. R.
Co., 35 Fed. 161 1206, 1210,
1217
County of Beaver v. Arm-
strong, 44 Pa. St. 63 1449,
1451, 1460
County of Gloucester Bank v.
Rudry Methyr Colliery
Co. (1895), 1 Ch. 629 1222
County of Leavenworth v.
Barnes, 94 U. S. 70 248
County of Macon v. Shores,
97 U. S. 272 219
County Life Ass. Co., 5 Ch.
288 1225
Court of Honor v. Hutchens
(Ind.), 82 N. E. 89 584
Iviii
Covenant Mut. Life Ass'n v.
Kentner, 188 111. 431; 58
N. E. 966 584
Coventry and Dixon's Case,
14 Ch. D. 660 1170, 1227, 1261
Covert V. Rogers, 38 Mich. 363 ;
31 Am. Rep. 319 1199, 1201
Covington, etc. Plank-Road
Co. V. Moore, 3 Ind. 510 150,
152, 1227
Covington, etc. R. R. Co. v.
Bowlers' Heirs, 9 Bush
(Ky.) 468 1342, 1343
Cowan V. Caledonian Club, 46
N.Y. App. Div. 288; 61 N.
Y. Supp. 714 1032
Cowdrey v. Gralveston, etc.
R. R. Co., 93 U. S. 352 1642,
1436
V. Railroad Co., 1 Wood.s
331 1621, 1621, 1643
Cowell V. City Water Supply
Co., 130 Iowa 671; 105 N.
W. 1016 1662
V. Springs Co., 100 U. S.
55 113, 837
Cox V. Dublin City Distil-
lery Co. (1906), 1 Ir. 446 1547
V. First Nat. Bank, 119
N. Car.302;26S. E.22 792,814
V. National Coal, etc. Co.
(W. Va.), 56 S. E. 494 177, 271
V. Paul, 175 N. Y. 328;
67 N. E. 586 908
V. Robinson, 82 Fed. 277;
27 C. C. A. 120 1375
V. Stokes, 156 N. Y. 491 ;
51 N. E. 316 1661, 1663
V. Terre Haute, etc. R.
R. Co., 133 Fed. 371; 66
C. C. A. 433 838, 1612
Cox's Case, 33 L. J. Ch. 145 618
Coxe V. Hunteville Gas Co.,
106 Ala. 373; 17 So. 626 1288
V. State, 144 N. Y. 396,
409; 39 N. E. 400 244, 250
Coy V. Title Guarantee, etc.
Co., 157 Fed. 794 1607
Coyote, etc. Co. v. Ruble, 8
Oreg. 284 123, 150, 150, 209,
280
Cozart V. Hemdon, 114 N.
Car. 252; 19 S. E. 158 166
Craft V. Indiana, etc. Ry.
Co., 166 111. 580; 46 N. E.
1132 1496, 1600
V. South Boston R. R.
Co., 150 Mass. 207 ; 22 N E
920; 5 L. R. A. 641 1378, 1380
TABLE OF CASES
[The references are to pages]
Craig V. Benedictine Sisters
Hospital Ass'n, 88 Minn.
535; 93 N. W. 669 22, 39
V. First Presbyterian
Church, 88 Pa. St. 42; 32
Am. Rep. 417 1011, 1202
V. Hesperia, etc. Co.,
113 Cal. 7; 45 Pac. 10; 54
Am. St. Rep. 316; 35 L. R.
A. 306 749, 771
V. Vicksburg, 31 Miss.
216 1423
Medicine Co.«. Merchants
Bank, 59 Him (N. Y.)
561; 14 N. Y. Supp. 16 1206
Cram v. Bangor House Pro-
prietary, 12 Me. 354 912, 1210
Cramer v. Bird, 6 Eq. 143 977,
1260
Crampton v. Varna Ry. Co.,
7 Ch. 562 395, 395
Crandall v. Lincoln, 52 Conn.
73; 52 Am. Rep. 560 516, 519,
519, 520, 620, 520, 520, 525
Cranor Co., A. J., v. Miller
(Ala.), 41 So. 678 339
Cratty v. Peoria Law Library
Ass'n, 219 ni. 516; 76 N.
E. 707 451, 464, 465, 466
Cravens v. Eagle Cotton Mills
Co., 120 Ind. 6; 21 N. E.
981; 16 Am. St. Rep. 298 188,
193
Crawford v. Albany Ice Co.,
36 Oreg. 535; 60 Pac. 14 1371,
1376, 1377
V. Northeastern Ry. Co.,
3 Jur. N. S. 1093 458
V. Prairie Creek Ditching
Ass'n, 44 Ind. 361 94
V. Provincial Ins. Co., 8
Up. Can. C. P. 263 692, 751
V. Roney (Ga.), 55 S. E.
499 522, 600
V. Roney (Ga.), 61 S. E.
117 1129
V. State, 52 Oh. St. 62 1249
Crawley's Case, 4 Ch. 322 167, 171
Credit Assurance, etc. Co.
(1902), 2 Ch. 601 536, 537
Credit Co., 11 Ch. D. 256 904
V. Arkansas, etc. R. R.
Co., 15 Fed. 46 1485, 1649
V. Howe Machine Co., 54
Conn. 357; 8 Atl. 472; 1
Am. St. Rep. 123 862
Credit Foncier of England,
Re, L. R.-11 Eq. 3S6 534
Creek v. State, 77 Ind. 180 1249
342
811
lix
Crenshaw v. Columbian Min-
ing Co., 110 Mo. App. 355;
86 S. W. 260 752
Crescent City Brewing Co. v.
Flanner, 44 La. Ann. 22 ; 10
So. 384 1299
Cressona Sav. Fund, etc.
Ass'n, 1 Leg. Rec. (Pa.) 245 139
Cresswell v. Oberly, 17 111.
App. 281 123, 246, 253
Creyke's Case, 5 Ch. 63 668
Crichton v. Webb Press Co.,
113 La. 167; 36 So. 926;
104 Am. St. Rep. 500; 67
L. R. A. 76 1082, 1111, 1112
Crichton's Oil Co. (1902), 2
Ch. 86 471, 1101
Crickmer's Case, 10 Ch. 614
640, 641
Cridland v. De Mauley, 1 De
G. & S. 459
Crimp V. McCormick Co., 71
Fed. 356; 18 C. C. A. 70
Crissey v. Cook, 67 Kans. 20 ;
72 Pac. 541 658, 661, 661, 665
Crittenden v. Southern Home
Bldg., etc. Ass'n, 111 Ga.
266; 36 S. E. 643 586, 593
Crittenden, etc. Co. v. Cowles,
66 N. Y. App. Div. 95; 72
N. Y. Supp. 701
Crocker-Wheeler Co. v. Bul-
lock, 134 Fed. 241
Cromie's Heirs v. Louisville
Orphans Home, 3 Bush
(Ky.) 365
Cromwell v. County of Sac, 96
U. S. 51 1433, 1434, 1436,
1441, 1442, 1450, 1460
D.Willis, 96Md. 260; 53
Atl. 1116
Cronin v. Patrick County, 89
Fed. 79
Crook V. Scott, 65 N. Y. App.
Div. 139 ; 72 N. Y. Supp. 516 ;
174N.Y.520;66N.E. 1106
V. Seaford, 6 Ch. 551-
Crosby v. Morristown, etc. R.
R. Co. (Tenn.), 42 S. W. 507
1647, 1648, 1656
V. New London, etc. R.
R. Co., 26 Conn. 121 1448
V. Stratton, 17 Colo. 212 ;
68 Pac. 130 507, 509, 509
Crosky v. Bank of Wales, 4
Giff. 314 295, 625, 633
Cross V. Eureka Lake, etc. Co.
73 Cal. 302; 14 Pac. 885;
2 Am. St. Rep. 808 811
1341
890
848
1366
1432
1106
395
TABLE OF CASKS
[The references are to pages]
Cross V. Evans, 86 Fed. 1; 29
C. C. A. 523 1643
V. Phoenix Bank, 1 R.
I. 39 769, 770, 774
V. Pinckneyville Mill Co.,
17 111. 54 126, 239, 239
V. West Va., etc. Ry.
Co., 37 W. Va. 342; 16
S. E. 587; 18 L. R. A. 582,
1167, 1169
Ciossman v. Hilltown Turn-
pike Co., 3 Grant's Cas.
(Pa.) 225 404, 405, 406
Crossman's Estate, 14 Fa.
Dist. Rep. 40 1148
Crouch V. Credit Foncier of
England, L. R. 8 Q. B.
374 1423
Crow V. Florence Ice, etc. Co.,
143 Ala. 541; 39 So. 401 946,
1250
V. Green, 111 Pa. St. 637;
5 Atl. 23 337
Crowley v. Genesee Mining
Co., 55 Cal. 273 392
V. Sandhurst, etc. Co.,
23 Vict. L. R. 661 56, 70
Crown Bank, Be, 44 Ch. D. 634
94, 99, 383
Crown Lease Proprietary Co.,
14 Times L. R. 47 356
Crown Slate Co. v. Allen, 199
Pa. 239; 48 Atl. Rep. 968 618
Crumlish v. Central Imp. Co.,
38 W. Va. 390; 18 S. E.
456; 45 Am. St. Rep. 872;
23 L. R. A. 120 1247
Crump V. U. S. Mining Co., 7
Gratt. (Va.) 352; 56 Am.
Dec. 116 1374
Cud V. Rutter, 1 P. Wms. 570 785
Culberson v. Ala. Const. Co.
(Ga.), 56 S. E. 765 298, 298
Cullen V. Coal Creek, etc. Co.,
42 S. W. Rep. 693 (Tenn.) 967,
968, 1288
CuUerne v. London, etc. Bldg.
Soc, 25 Q. B. D. 485 1264,
1267, 1281
Cullman Fruit & Produce
Ass'n, 155 Fed. 372 408, 1372
Culp V. Mulvane, 66 Kans.
143; 71 Pac. 273 717
Culver V. Third Nat. Bank, 64
111. 528 916
Cumberland Coal Co. v. Sher-
man, 30 Barb. 553 (N. Y.) 300,
1045, 1298, 1300, 1303, 1304
1311, 1312
1299
1061
833
249
1626
594
831
Cumberland Coal, etc. Co. v.
Parish, 42 Md. 598
V. Sherman, 20 Md. 117
Cuinberland Land Co. v.
Daniel, 52 S. W. 446
(Tenn.) 301, 302
Cumberland Tel., etc. Co. v.
Evansville, 127 Fed. 187
V. St. Louis, etc. Ry.
Co., 117 La. 199; 41 So.
492
Cumming v. Metcalfe's Lon-
don Hydro, 2 Hanson 418
Cummings v. Webster, 43 Me.
192
Cunliffe, Brooks & Co. v.
Blackburn Bldg. Soc, 9
A. C. 857
Cunningham v. Ala. Life Ins.,
etc. Co., 4 Ala. 652 671, 767,
776
V. German Ins. Bank,
101 Fed. 977; 41 C. C. A.
609 109, 492, 497, 511, 631,
992
V. Holly, Mason, Marks
&Co., 121 Fed. 720; 58
C. C. A. 140
V. Vermont, etc. R. R.
Co., 12 Gray (Mass.) 411
V. Wechselberg, 105
Wise. 359; 81 N. W. 414
Cunningham's Appeal, 108
Pa. St. 546 500, 507
Cunninghame v. City of Glas-
cow Bank, 4 A. C. 607 706, 812
Cunyus v. Guenther, 96 Ala.
564; 11 So. 649
Cupit V. Park City Bank, 20
Utah 292; 58 Pac. 839
628
1114
960
384
1179,
1225
877
786
1035
502,
Ix
Curran v. Arkansas, 15 How.
304
Currie v. Jones, 138 N. Car.
189; 50 S. E. 560
V. Mutual Ass. Soc, 4
Hen. & Munf. (Va.) 315;
4 Am. Dec 517
V. White, 45 N. Y. 822
502, 1135
Currie's Case, 11 W. R. 46 206,
1340
Chirrier v. Continental Life
Ins. Co., 53 N. H. 538 588, 589
V. Lebanon Slate Co., 56
N. H. 262 517, 518, 534, 534
^ V. N. Y., etc. R. R. Co.,
35 Hun (N. Y.) 355 944, 961,
1527, 1554
TABLE OF CASES
[The references are to pages]
Curry v. Scott, 54 Pa. St. 270
157,
509
V. Woodward, 53 Ala,
371 614
Curtice v. Crawford County
Bank, 110 Fed. 830 770, 775
V. Crawford County
Bank, 118 Fed. 390 769
Curtin v. Salmon River, etc.
Co., 130 Cal. 345; 62 Pac.
552; 80 Am. St. Rep. 132 993,
1203
Curtis V. McCullough, 3 Ne-
vada 202 1249, 1326
V. Meeker, 62 111. App.
49 126, 248
V. Natalie Anthracite
Coal Co., 89 N. Y. App. Div.
61; 85 N. Y. Supp. 413;
affirmed in 181 N. Y. 543;
73 N. E. 1122
V. Osborn (Conn.), 65
Atl. 968 503, 1154, 1446, 1446
V. Piedmont Lumber,
etc. Co., 109 N. Car. 401;
13 S. E. 944
V. Tracy, 169 HI. 233;
48 N. E. 399; 61 Am. St.
Rep. 168
Curtiss V. Leavitt, 15 N. Y. 1
66, 856, 861, 865, 867
Cushing Sulphite Fibre Co. v.
Cushing, 2 New Brunsw.
Eq. 539 1259, 1273, 1332
Cushman v. Bonfield, 36 111.
App. 436
V. Cloverland Coal, etc.
Co. (Ind.), 83 N. E. 390
V. Thayer Mfg. Jewelry
Co., 76 N. Y. 365; 32 Am.
Rep. 315 700, 732, 751, 751,
752
Cussons, Re, 73 L. J. Ch. 296 304
Cutter V. Iowa Co., 128 Fed.
505 1626, 1660
Cutting V. B. & O. R. R. Co.,
35 N. Y. Misc. 616; 72
N. Y. Supp. 27 1636
V. Damarel, 88 N. Y. 410 616,
696, 699
V. Florida, etc. Co., 43
Fed. 747 1618
V. Taveres, etc. R. R.
Co., 61 Fed. 150; 9C. C. A.
401 1561, 1563
Cutting, Ex parte, 94 U. S. 14 984,
986
Cuykendall v. Douglas, 19
Hun (N. Y.) 577 118, 1005, 1032
854
394
254
63,
1659
1382
Cuyler v. City Power Co., 74
Minn. 22; 76 N. W. 948 31, 43
Cyclists' Touring Club (1907),
1 Ch. 269 135, 135
D
Dabney v. Stevens, 2 Sweeney
(N. Y.) 415; 40 How. Pr.
(N. Y.) 341 592
Dacovich v. Canizas (Ala.), 44
So. 473 . 522
Dadson's Case, 12 Times L. R.
482 351, 360, 522
Dady v. Georgia, etc. Ry. Co.,
112 Fed. 838 982
Daily Telegraph Newspaper
Co. V. Cohen, 5 New So.
Wales State Rep. 520 730, 731,
731
Dain Mfg. Co. v. Trumbull
Seed Co., 95 Mo. App. 144;
68 S. W. 951 616, 692
Dale V. Hayes, 40 L. J. Ch. 244 1141
Dale & Plant, Re, 43 Ch. D.
255 1241
, Ee, 61 L. T. 206 283, 285,
286
Dallas, etc. Cold Storage Co.
V. Crawford, 18 Tex. Civ.
App. 176; 44 S. W. 875 1382
Dalrymple v. Lauman, 23 Md.
376 1419, 1526
Dalton Time Lock Co. v. Dal-
ton, 66 L. T. 704 149, 205
Daly V. New York, etc. Ry.
Co., 55 N. J. Eq. 595; 38
Atl. 202 1539
Dame v. Crochiti, etc. Imp.
Co. (N. Mex.), 79 Pac. 296 1465
Dana v. American Tobacco
Co. (N. J.), 65 Atl. 730 ; 69
Atl. 223 788, 789, 999
V. Bank of U. S., 5 Watts
& Serg. (Pa.) 223 1187
V. Brown, 1 J. J. Marsh
(Ky.) 304 684
Danbury, etc. R. R. Co. v.
Wilson, 22 Conn. 435 605, 1378
Dancy v. Clark, 24 App. D. C.
487 45, 46, 47, 105, 114, 123,
150, 1175
Dane v. Young, 61 Me. 160 512,
513, 576, 762
Danforth v. Nat. State Bank,
48 Fed. 271 869
Daniell v. Royal British Bank,
1 H. & N. 681 925
Daniels v. Hart, 1 18 Mass. 543 1582
Ixi
TABLE OF CASES
[The references are to pages]
Daniher v. Grand Lodge, 10
Utah 110; 37 Pac. 245 576
Dannebroge Gold, etc. Co. v.
Ailment, 26 Cal. 286 118
Dannmeyer v. Coleman, 11
. Fed. 97 956, 970, 982
Danville, etc. R. R. Co. v.
Brown, 90 Va. 340; 18
S. E. 278 1165, 1166
D'Arcy v. Tamar, etc. Ry.
Co., L. R. 2 Ex. 158 1209, 1209
1209
Damall v. Dickens, 4 Yerg.
(Tenn.) 7 407
Darrah v. Wheeling Ice, etc.
Co., 50 W. Va. 417; 40
S. E. 373 593, 594
Darrin v. Hoff, 99 Md. 491;
58 Atl. 196 561, 1012
Dartmouth College v. Wood-
ward, 4 Wheat. 518 3, 33, 1251
Dashwood v. Cornish, 13
Times L. R. 337 1238
D. A. Tompkins Co. v. Ca-
tawba Mills, 82 Fed. 780 958,
1485, 1586
V. Chester Mills, 90 Fed.
37 1492
Davenport v. Crowell, 65 Atl.
557 (Vt.) 966
V. Dows, 18 Wall. 626 974
V. Lines, 77 Conn. 473 ;
59 Atl. 603 1095, 1268, 1268
V. Piano Implement Co.,
70 111. App. 161 429, 429
V. Receivers, 2 Woods
519 164
Davey & Co. i7. Williamson &
Son (1898), 2 Q. B. 194 1546
David Bradley Mfg. Co. v.
Chicago, etc. Traction Co.
(111.), 82 N. E. 210 60, 113, 133
David Ireland & Co. (1905),
1 Ir. 133 1264
David Lloyd & Co., 6 Ch. D.
339 1598
David Payne & Co. (1904), 2
Ch. 608 861, 1235, 1235, 1407
David Reus, etc. Co. v. Con-
rad, 101 Md. 224; 60 Atl.
737 1274
Davidson v. Grange, 4 Grant
(Can.) 377 954, 1250
V. Hobson, 59 Mo. App.
130 245
V. Old People's, etc.
Soc, 39 Minn. 303; 39
N. W. 803; 1 L. R. A. 482 589,
592
1175
848
196
1222
1605
807
172
1211
948
950
Ixii
Davidson v. State, 20 Fla. 784 1249
V. Westchester Gas-
Light Co., 99 N. Y. 558; 2
N. E. 892
Davidson College v. Cham-
bers' Extrs., 3 Jones Eq.
(N. Car.) 253
Davidson's Case, 4 K. & J. 688
Davies v. Harvey Steel Co., 6
N. Y. App. Div. 166; 39
N. Y. Supp. 791 1373, 1381
V. Monroe Water Works
Co., 107 La. 145; 31 So.
694 965, 1245
V. R. Bolton, etc. Co.
(1894), 3 Ch. 678
V. Vale of Evesham Pre-
serves, 73 L. T. 150
Davies' Case, 33 L. T. 834
, 41 L. J. Ch. 659
Davis V. Brown County Coal
Co. (S. Dak.), 110 N. W.
113
V. Commercial Pub. Co.,
1 State Rep. (N. So. Wales)
Eq. 37
V. Congregation Tephilas
Israel, 40 N. Y. App. Div.
424; 57 N. Y. Supp. 1015
V. Dexter Butter, etc.
Co., 52 Kans. 693; 35 Pac.
776 286, 288
V. Duncan, 19 Fed. 477 1669,
1615, 1620
V. Edwards, 41 Wash.
480; 84 Pac. 22 1372
V. Flagstaff Silver Mining
Co., 2 Utah 74 1117, 1189
V. Gemmell, 70 Md. 356;
17 Atl. 259 944
V. Gemmell, 73 Md. 530;
21 Atl. 712 983, 986
V. Georgetown Bridge
Co., 1 Cranch, C. C. 147 1379
V. Hardwicke (Tex.), 94
S. W. 359 807
V. Haycock, L. R. 4 Ex.
373 782
V. Hofer, 38 Oreg. 150;
63 Pac. 56 1350
V. Jackson, 152 Mass. 58 ;
25 N. E. 21; 23 Am. St.
Rep. 801 502, 1140, 1147, 1147
V. Maysville Creamery
Ass'n, 63 Mo. App. 477 280
V. Mempliis City Ry. Co.,
22 Fed. 883 1240
V. Miller Signal Co., 105
111. App. 657 684
TABLE OF CASES
[The references are to pages]
526
280
1317
592
244,
Davis V. Mills, 194 U. S. 451;
24 Sup. Ct. 692 1359
V. Nat. Eagle Bank
(R. I.), 50 Atl. 530 792
V. Old Colony R. R. Co.,
131 Mass. 258; 41 Am.
Rep. 221 81, 851, 853
V. Proprietors of Meet-
ing-House, 8 Mete. (Mass.)
321
V. Ravenna Creamery
Co., 48 Nebr. 471; 67
N. W. 436
V. Rock Creek, etc. Co.,
65 Cal. 359; 36 Am. Rep.
40
V. Rockingham Invest-
^ ment Co., 89 Va. 290; 15
S. E. 547
V. Stevens, 104 Fed. 235
251, 252
V. Thomas & Davis Co.,
63 N. J. Eq. 572; 52 Atl.
ri7 1322, 1322
V. U. S. Electric, etc. Co.,
77 Md. 35; 25 Atl. 982 76, 959,
1026, 1306
V. Valley Electric Light
Co., 61 N. Y. Supp. 580 288
V. West Saratoga Bldg.
Union, 32 Md. 285 66
Davis Bros. v. Montgomery
Furnace, etc. Co., 101 Ala.
127; 8 So. 496 636, 1415
Davis Mill Co. v. Bennett, 39
Mo. App. 460 918, 919, 1034,
1322
Davis, etc. Co. v. Hillsboro
Creamery Co., 10 Ind. App.
42; 37 N. E. 549 286, 289
Davis, etc. Wheel Co. v.
Davis, etc. Wagon Co., 20
Fed. 699 300
Davison v. Gillies, 16 Ch. D.
347 n. 1099, 1100
Davoue v. Fanning, 2 Johns.
Ch. (N. Y.) 252 1307
Dawes' Case, 6 Eg. 232 669
Dawney, Archibald D., Ltd.,
Be, 83 L. T. 47 205, 642
Dawson v. African, etc. Co.
(1898), 1 Ch. 6 1168, 1168,
1230, 1230
V. Braime's Tadcaster
Breweries (1907), 2 Ch. 359
Day V. Day, 1 Dr. & Sm. 261
- V. Holmes, 103 Mass. 306
1558
789,
789
807,
807
138
Day V. Mill Owners' Mut.
Fire Ins. Co., 75 Iowa 694;
38 N. W. 113
V. Ogdensburgh, etc. R.
R. Co., 107 N. Y. 129; 13
N. E. 765 1676, 1680
V. Postal Tel. Co., 66 Md.
354; 7 Atl. 608 121, 882
V. Spiral Springs Buggy
Co., 57 Mich. 146; 58 Am.
Rep. 352; 23 N. W. 628 854,
855, 856
V. Sykes & Co., 55 L. T.
763
V. Worcester, etc. R. R.
Co., 151 Mass. 302; 23
N. E. 824
Day, Ex parte, 1 Ch. D. 699
Dayton Hydraulic Co. v. Fil-
senthall, 116 Fed. 961; 54
C. C. A. 537
Dayton Ins. Co. v. Kelly, 24
Oh. St. 345; 15 Am. Rep.
612 394, 868
Dayton Nat. Bank v. Mer-
chants' Nat. Bank, 37 Oh.
St. 208
Dayton, etc. R. R. Co. v.
Hatch, 1 Disney (Oh.) 84
634, 636, 1191
Deaderick v. Wilson, 8 Baxt.
(Tenn.) 108
Dean v. Baldwin, 99 111. App.
582
V. Biggs, 25 Hun (N. Y.)
122
Deane v. Hodge, 35 Minn.
146; 27 N. W. 917; 59
Am. Rep. 321
Dearborn v. Washington Sav.
Bank, 18 Wash. 8; 50 Pac.
575 658, 661, 768, 769
Dearie v. Hall, 3 Russ. 1 684
Deaton Grocery Co. v. Inter-
national Harvester Co.
(Tex.), 105 S. W. 556 86, 851
De Bardeleben v.
Land, etc. Co.,
621; 37 So. 511
Debenture Corp. v.
8 Times L. R. 496
De Betz's Petition, 9 Abb.
N. c. (N. Y.) 246 1585, 1671
De Beville's Case, Baron, 7
Eq. 11 207, 207
De Host V. Palmer Co., 1
How. Pr. N. s. (N. Y.) 501 592
De Camp v. Alward, 52 Ind.
468 1188
1607
1476
260
1613
810
189,
1351
635
1514
1244
Bessemer
140, Ala.
Marietta,
1340
1592
Ixiii
TABLE OF CASES
[The references are to pages]
De Camp v. Dobbins, 29 N. J.
Eq. 36 ; s. c. 31 N. J. Eq. 671 54,
847
De Caumont v. Bogert, 36
Hun (N. Y.) 382 687, 712
Decker v. Gardner, 124 N. Y.
334; 26 N. E. 814; 11
L. R. A. 480 1597, 1599, 1610,
1613
Dedham Institution for Sav-
ings V. Slack, 6 Cush.
(Mass.) 408 _ 1379
Deepwater Council v. Renick
(W- Va.), 53 S. E. 552 408
Deering v. Hibernian Banking
Co., 16 W. R. 578 769
Deffell V. White, L. R. 2 C. P.
144 405
Degnan v. Thoroughman, 88
Mo. App. 62 408
De Graff v. Thompson, 24
Minn. 452 1516
De Graffenried v. Brunsv\-ick,
etc. R. R. Co., 57 Ga. 22 1616
De Koven v. Alsop, 205 111.
309; 68 N. E. 930; 63
L. R. A. 587 503, 1143, 1144
De la Cuesta v. Ins. Co., 136
Pa. St. 62; 20 Atl. 505; 9
L. R. A. 631 508
Delacy v. Neuse Nav. Co., 1
Hawks (N. Car.) 274; 9
Am. Dec. 636 427, 658, 666
Deland v. Williams, 101 Mass.
571 1146
Delaney v. Delaney, 175 111.
187; 51 N. E. 961 589
Delano v. Case, 121 111. 247;
12 N. E. 676; 2 Am. St.
Rep. 81 ; s. c. 17 111. App.
531 1357
V. Smith Charities, 138
Mass. 63 1034, 1166
De la Vergne, etc. Co. v. Ger-
man Savings Inst., 175
U. S. 40; 20 Sup. Ct. 20 76
838, 840, 1069
Delaware, etc. Canal Co. v. Pa,
Coal Co., 21 Pa. St. 131
Delaware, etc. R. R. Co. v.
Irick, 23 N. J. Law Rep.
321
V. Oxford Iron Co., 38
N. J. Eq. 340
Deloach v. Jones, 18 La. 447
Demarest v. Flack, 128 N. Y
205; 28 N. E. 645; 13
L. R. A. 854
1225,
1226
386
572
87
120
Lxiv
Demarest v. Spiral Riveted
Tube Co., 71 N. J. Law 14;
58 Atl. 161 880, 1069, 1211
Deming v. Beatty Oil Co., 72
Kans. 614; 84 Pac. 385 975,
975
Dempster v. Rosehill Ceme-
tery Co., 206 111. 261; 68
N. E. 1070 430
Dempster Mfg. Co. v. Downs,
126 Iowa 80; 101 N. W.
735; 106 Am. St. Rep. 340 115
Den ex dem. American Primi-
tive Soc. V. Pilling, 24
N. J. Law 653 1008
Den ex dem. Tours v. Vreelandt,
2 Halst (N. J.) 352 404, 404
Denham & Co., 25 Ch. D. 752 1276
1278, 1280
Denney v. Cleveland, etc.
R. R. Co., 28 Oh. St. 108 190,
1475, 1475
Dennis v. Joslin Mfg. Co., 19
R. I. 666; 36 Atl. 129; 61
Am. St. Rep. 805 912, 917, 919,
1069, 1071
Deunison v. Austin, 15 Wise.
334 1211
V. Keasbey (Mo.), 98
S. W. 546 786
Denniston v. Chicago, etc.
R. R. Co., 4 Biss. 414 1559
Denny v. Lyon, 38 Pa. St. 98;
80 Am. Dec. 463 723, 724
Denny Hotel Co. v. Schram, 6
Wash. 134; 32 Pac. 1002;
36 Am. St. Rep. 130 121, 607
Densmore Oil Co. v. Densmore,
64 Pa. St. 43 123, 150, 312, 322,
323, 325, 329
Dent V. London Tramways
Co., 16 Ch. D. 344 465, 1100
Denton v. Macniel, 2 Eq. 352 . 337,
342
Denver Fire Ins. Co. v Mc-
Clelland, 9 Colo. 11; 9 Pac.
771; 59 Am. Rep. 134 142,
852, 855
Denver Hotel Co., Be (1893),
1 Ch. 495 534, 534, 538
Denver, etc. R. Co. v. U. S.
Trust Co., 41 Fed. 720 1412,
1412
Depew V. Colton (N. J.), 46
Atl. 728 1371
De Peyster v. American Fire
Ins. Co., 6 Paige (N. Y.) 486 1093
Derby Canal v. Wilmot, 9
East 360 401, 401
TABLE OF CASES
[The references are to pages]
Deringer's Admr. v Deringer's
Admr., 5 Houst. (Del.) 416;
1 Am. St. Rep. 150 56
Dermatine Co. v. Ashworth,
21 Times L. R. 510 369
De Rosaz's Case, 21 L. T. 10 166
Derry v. Great Hive, etc. of
Maccabees, 135 Mich. 494;
98 N. W. 23 580
— V. Peek, 14 A. C. 337 340
De Ruvigne's Case, 5 Ch. D.
306 629, 1169, 1336, 1339, 1340
Desinge v. Beare, 37 Ch. D.
481 423
Des Moines Gas Co. v. West,
44 Iowa 23 1605
Des Moines Nat. Bank v.
Warren County Bank, 97
Iowa 204; 66 N. W. 154 574
Des Moines, etc. R. R. Co. v.
Wabash, etc. Ry. Co., 135
U.S. 576; lOSup. Ct. 753 1500
Des Moines, etc. Trust Co. v.
Des Moines Bank, 97 Iowa
668; 66 N. W. 914 772
Despatch Line of Packets v.
Bellamy Mfg. Co., 12 N. H.
205; 37 Am. Dec. 203 1168,
1210, 1217, 1225
D'Esterre v. City of Brooklyn,
90 Fed. 586 1432, 1432
Detroit v. Dean, 106 U. S.
537; 1 Sup. Ct. 560 970, 970
V. Detroit Citizens' Ry.
Co., 184 U. S. 368; 22 Sup.
Ct. 410 107
Detroit Driving Club v. Fitz-
gerald, 109 Mich. 670; 67
N. W. 899 39, 261, 608
Detroit Schuetzen Bund v.
Detroit Agitations Verein,
44 Mich. 313; 6N. W. 675;
38 Am. Rep. 270 258, 267
.Devaux, Re, 54 Ga. 673 96
Development Co. of Central
& West Africa (1902), 1 Ch.
547 533
Deverges v. Sandeman, Clark
& Co. (1902), 1 Ch. 579 809, 811
Devine v. Frankford Steel, etc.
Co., 205 Pa. St. 114, 54Atl.
57,8 957, 966
Dewey r. St. Albans Trust Co.,
57 Vt. 332 652
• — — V. Toledo, etc. Ry. Co.,
91 Mich. 351; 51 N. W.
1063 852
Dewing v. Perdioaries, 96 U.
S. 193 741
De Witt V. Hastings, 69 N. Y.
518 216, 247
v. San Francisco, 2 Cal.
289 69, 70
Dexine Patent Packing &
Rubber Co., 88 L. T. 791 113,
131, 480, 555
Dexter v. Phillips, 121 Mass.
178; 23 Am. Rep. 261 1443
Dexter Horton & Co. v. Mc-
Cafferty (Wash.), 84 Pac.
733 804
Dexter Savings Bank v.
Friend, 90 Fed. 703 1374
Dexterville, etc. Boom Co., Re,
4 Fed. 873 1568
Diamond Drill, etc. Co. v.
Kelley Bros., 130 Fed. 893 310
Dicido Pier Co., Re (1891), 2
Ch. 354 545
Dick V. Lehigh Valley R. R.
Co., 4 Pa. Dist. Rep. 56 1063
V. State (Md.), 68 Atl. 826 230
Dickenson v. Central Nat.
Bank, 129 Mass. 279; 37
Am. Rep. 351 717, 717
V. Chamber of Commerce,
29 Wise. 45 ; 9 Am. R-p. 544 566
Dickerman v. Northern Trust
Co., 176 U.S. 181; 20 Sup.
Ct. 311 261,262,322,628,1404,
1424, 1470, 1624, 1625, 1626
Dickinson v. Consolidated
Traction Co., 114 Fed. 232;
119 Fed. 871; 56 C. C. A.
401 949, 949, 951, 969
Dickson v. McMurray, 28
Grant Ch. (Up. Can.) 533 1059,
1059
V. Swansea- Vale Co.,
L. R. 4. Q. B. 44 1420
Dieterle v. . Ann Arbor Paint,
etc. Co., 143 Mich. 416; 107
N. W. 79 ISO, 205
Dietrich v. Rothenberger, 25
Ky. Law Rep. 338 ; 75 S. W.
271 1357
Dillaway v. Boston Gaslight
Co., 174 Mass. 80; 54 N. E.
359 963, 1493
Diller v. Brubaker, 52 Pa. St.
498; 91 Am. Dec. 177 808
Dillingham v. Hawk, 60 Fed.
494; 9 C. C. A. 101; 23
L. R. A. 517 1617, 1618
V. Scales, 24 S. W. 975
(Tex.) 1619
Dillon V. Barnard 21 Wall.
430 1557
Ixv
TABLE OF CASES
[The references are to pages]
Dimmick v. Stokes (Ala.), 43
So. 854 1251
Dimock v. Central Rawdon
Mining Co., 36 Nova Scotia
337 984
Dimpfel v. Ohio, etc. Ry. Co.,
110 U. S. 209; 3 Sup. Ct.
573 970
Dingeldein v. Third Ave. R. R.
Co., 9 Bosw. (N. Y.) 79 298
Dinkier v. Baer, 92 Ga. 432;
17 S. E. 953 ^ 779, 781
Dinsmore v. Racine, etc. R. R.
Co., 12 Wise. 649 1503, 1520
Discoverers' Finance Corp.
(1908), 1 Ch. 141 618, 618
Dissette v. Lawrence Pub. Co.,
9 Oh. Circ. Ct. Rep. N. s.
118 962, 971
Distilling, etc. Co. v. People
ex rel. Malony, 156 111. 448;
41 N. E. 188; 47 Am. St.
Rep. 200 263
District of Columbia v. Cam-
den Iron Works, 181 U. S.
453; 21 Sup. Ct. 680 397, 398
District Grand Lodge v. Cohn,
20 111. App^ 335 557, 588
Dittman v. Distilling Co., 54
Atl. Rep. 570 (N. J. Ch.) 57, 57,
79
Dixie Cotton Oil Co. v. Morris
(Ark.), 94 S. W. 933 1372
Dixon V. Evans, L. R. 5 H. L.
606 665
V. Kennaway & Co.
(1900), 1 Ch. 833 720, 737, 737,
737, 738, 1279
Doak V. Bank of the State, 6
Ired. Law (N. Car.) 309 803
Doan V. Vestry of Parish
of Ascension (Md.), 64 Atl.
314 380
Dobbins v. Walton, 37 Ga.
614; 95 Am. Dec. 371 771
Dock V. Schlichter Jute Cord-
age Co., 167 Pa. St. 370; 31
Atl. 656 496, 498, 517
Dockstader v. Y. M. C. A.
(Iowa), 109 N. W. 906 1196
Doctor V. Harrington, 196
U. S. 579; 25 Sup. Ct. 355 975
Dodd V. Pittsburg, etc. R. R.
Co. (Ky.), 106 S. W. 787 936,
1085
Dodds V. Hills, 2 Hem. &
Mill. 424 710, 711, 711, 814
Dodge V. Woolsey, 18 How.
331 950
Dodge Stationery Co. v.
Dodge, 145 Cal. 380; 78
Pac. 879 372, 376, 377
Doe V. Northwestern Coal, etc.
Co., 78 Fed. 62 82, 1272, 1319,
1328
Doe ex dem. Bank of England
V. Chambers, 4 Ad. & El.
410 405
Doe Kings College v. Kennedy,
5Up. Can. Q.B. 577 404
Doembecher v. Columbia City
Lumber Co., 21 Oreg. 573;
28 Pac. 899; 28 Am. St.
Rep. 766 1210, 1210
Doherty v. Mercantile Trust
Co., 184 Mass. 590; 69N.E.
335 956
Dole V. Wooldredge, 135 Mass.
140 274, 336
Domestic Telegraph Co. v.
Newark, 49 N. J. Law 344;
8 Atl. 128 59
Dominion of Canada Co., 55
L. T. 347 1674
Donald v. American Smelt-
ing, etc. Co., 62 N. J.
Eq. 729; 48 Atl. 771 488, 630,
635
V. Manufacturers' Export
Co., 142 Ala. 578; 38 So.
841 957
Donaldson, Cobum & Knox,
6 New So. Wales St. Rep.
725 534
V. Orchard Crude Oil Co.
(Cal.), 92 Pac. 1046 1377
Donelly v. Pancoast, 15 N. Y.
App. Div. 323; 44 N. Y.
Supp. 104 1227
Donnell v. Herring-Hall-
Marvin Co., 208 U. S. 267 377,
388, 1085
Donovan v. Purtell, 216 111.
629; 75 N. E. 334 874, 886'
D'Ooge V. Leeds, 176 Mass.
658; 57 N. E. 1025 1142,
1144, 1145
Dooley v. Cheshire Glass Co.,
15 Gray (Mass.) 494 119, 127,
228, 228, 240, 369, 370
V. Gladiator, etc. Co.
(Iowa), 109 N. W. 864 749, 753
V. Wolcott, 4 Allen
(Mass.) 406 233
Doolittle, Re, 23 Fed. 544 1620
Domes v. Supreme Lodge, 75
Miss. 466; 23 So. 191 552, 556,
583. 585
bcvi
TABLE OF CASES
[The references are to pages]
Dorr V. Life Ins. Clearing Co.,
71 Minn. 38; 73N.W. 635;
70 Am. St. Rep. 309
Dorris V. French, 4 Hun 292
V. Sweeney, 60 N. Y. 463
770
331
214,
216
925
230
1411,
1467
72
1381
51
Dorsey Harvester Revolving-
Rake Co. V. Marsh, 7 Fed.
Cas. 939 147, 382
Dorsey Machine Co. v. Mc-
Caffrey, 139 Ind. 545; 38
N. E. 208; 47 Am. St. Rep.
290 182, 183
Dossett V. Harding, 1 C. B.
N. s. 524
Dotson V. Milliken, 27 App.
D. C. 500
Doty V. Oriental Print Works
Co. (R. I.), 67 Atl. 586
1495, 1520
V. Patterson, 155 Ind.
60; 56 N. E. 668 241, 243, 249
Dougan v. Evansville, etc. R.
R. Co., 15 N. Y. App.
Div. 483; 44 N. Y. Supp.
503
Dougan's Case, 8 Ch. 540
Dougherty v. Hunter, 54 Pa.
St. 380
Doughty V. Lomagunda Reefs
(1902), 2 Ch. 837
Douglass V. Cline, 12 Bush.
(Ky.) 608 1517, 1559, 1565, 1602
V. Merchants' Ins. Co.,
118 N. Y. 484; 23 N. E.
806; 7 L. R. A. 822 594,1276
Dousman v. Wisconsin, etc.
Co., 40 Wise. 418 507, 948
Douthitt V. Stinson, 63 Mo.
268 254, 303
Dover Coalfield Extension
(1907), 2 Ch. 76; (1908), 1
Ch. 65 1242
Doveyr. Cory (1901), A.C.477
769, 1101, 1102, 1104,
1262, 1268, 1278
Dow V. Gould, etc. Mining Co.,
31 Cal. 629
V. Iowa Central Ry. Co.,
70 Hun 186; 24 N. Y. Supp.
292
V. Memphis, etc. R. R.
Co., 20 Fed. 260 1562, 1584,
1600, 1603
V. Memphis, etc. R. R.
Co., 32 Fed. 185 1491
V. Memphis R. R. Co.,
124 U. S. 652; 8 Sup. Ct.
673 1516, 1600, 1603
709
1664
Dowagiac Mfg. Co. v. Higin-
botham, 15S. Dak.547; 91
N. W. 330 228
Dowling V. Wheeler, 117 Mo.
App. 169; 93 S. W. 924 778
Downer's Adm'r v. Zanesville
Bank, Wright (Oh.) 477 771, 774
Downing v. Marshall, 23 N. Y.
366; 80 Am. Dec. 290 68
V. Mount Washington
Road Co., 40 N. H. 230 42, 851,
854, 859
V. Potts, 23 N. J. Law 66
157, 1016, 1017, 1019, 1019
V. Thompson, 103 Va. 58;
48 S. E. 506 732
Downs V. Farmers' L. & T.
Co., 79 Fed. 215; 24 C. C.
A. 500 1517, 1631
Doyle V. Douglas Machinery
Co., 73 111. 273 230
V. Mizner, 42 Mich. 332;
3N. W. 968 118,238,242
Drake v. Herndon (Ky.), 91
S. W. 674 147
V. Hudson River R. R.
Co., 7 Barb. (N. Y.) 508 556
Draper v. Blackwell, 138 Ala.
182; 35 So. 110 523, 526
V. Manchester, etc. Ry.
Co., 3 De G. F. & J. 23 890
Dreeben v. First Nat. Bank
(Tex.), 99 S. W. 850 1374, 1379
Drennen v. Mercantile Trust,
etc. Co., 115 Ala. 592; 23
So. 164; 67 Am. St. Rep.
72; 39 L. R. A. 623 1559,
1560, 1562, 1570
Dressel v. North State Lumber
Co., 107 Fed. 255 103
Driffield Gas Light Co. (1898),
1 Ch. 461 434, 435
DriscoU V. West Bradley, etc.
Co., 59 N. Y. 96 571, 593
Driver v. Broad (1893), 1 Q. B.
744 1393, 1439
Droege v. Emery (Ky.), 105
S. W. 374 234
Drogheda Steam Packet Co.
(1903), 1 Ir. 512 1123
Droitwich Patent Salt Co. v.
Curzon, L. R. 3 Ex. 35 512
Dronfield Silkstone Coal Co.,
17 Ch. D. 76 516, 657, 830
Drummond's Case, 4 Ch. 772 205,
206, 634
Drury v. Cross, 7 Wall. 299 1637
V. Midland R. R. Co.,
127 Mass. 571
1632
Lxvii
TABLE OF CASES
[The references are to pages]
933
613
928,
Dublin Drapery Co., 13 L. R.
Ir. 174 1396, 1504, 1504
Dublin, etc. Ry. Co. v. Ack-
erman, 59 S. E. 10 (Ga.) 1382
Dubuque Female College v.
Township District, 13 Iowa
555 283,286
Duck V. Tower Galvaniz-
ing Co. (1901), 2 K. B. 314 1224,
1406
Duckett V. Grover, 6 Ch. D.
82
Duckworth, Re, 2 Ch. 578
Dudley v. Armenia Ins. Co.,
115 N. Y. App. Div. 380
962, 1350, 1353
V. Kentucky High School,
9 Bush (Ky.) 576 1076
Dueber, etc. Mfg. Co. v.
Dougherty, 62 Oh. St. 589;
57 N. E. 455 711, 712
Duffield V. Barnum Wire, etc.
Works, 64 Mich. 293; 31
N. W. 310 177
Duggan V. Colorado Mort-
gage, etc. Co., 11 Colo. 113;
17 Pac. 105 117, U8, 229, 245
Duke V. Cahawba Nav. Co.,
10 Ala. 82; 44 Am. Dec:
472 148, 221, 229, 915
V. Cahawba Nav. Co., 16
Ala. 372
v. Markham, 105 N. Car.
131; 10 S. E. 1017; 18
Am. St. Rep. 889
V. Taylor, 37 Fla. 64;
19 So. 172 ; 53 Am. St. Rep.
232; 31 L. R. A. 484
251, 1009
Duke's Case, 1 Ch. D. 620 111,
207
Dunbar v. American Tel., etc.
Co., 224 111. 9; 79 N. E.
423 57, 58, 954, 1026
Dunbar Box, etc. Co. v. Mar-
tin, 103 N. Y. Supp. 91;
53 N. Y. Misc. 312 1372
Duncan v. Atlantic, etc. R.
R. Co., 88 Fed. 840 1623, 1624
V. Maryland Sav. Inst.,
10 G. & J. (Md.) 299
V. Mobile, etc. R. R. Co.,
2 Woods 542
V. Trustees, 3 Cent. L. J.
579
Duncomb v. New York, etc.
R. R. Co., 84 N. Y. 190;
s. c. 98 N. Y. 1 67, 1317, 1342,
1405
Ix
222
1068
162,
423
1565
1559
Duncuft V. Albrecht, 12 Sim.
189 422, 785, 785, 787
Dunham v. Cincinnati, etc.
Ry. Co., 1 Wall. 254 1452,
1465, 1503, 1534, 1537, 1550
V. City Trust Co., 101
N. Y. Supp. 87 761
V. Earle, 8 Fed. Cas. 41,
No. 4, 149 1520, 1551
V. Isett, 15 Iowa 284 1515,
1551
Dunlop V. Dunlop, 21 Ch. D.
583 768, 768, 770, 772
■ V. Mercer, 156 Fed. 545
864, 866
Dunlop Pneumatic Tyre Co.
V. Dunlap Motor Co. (1907),
A. C. 430 376, 377, 377
Dunn V. Howe, 107 Fed. 849;
47 C. C. A. 13 621
V. New Orleans Bldg.
Co., 8 La. 483 1005
Dunn's Adm'r v. Kyle, 14
Bush (Ky.) 134 1276, 1278
Dunning v. Bates, 186 Mass.
123; 71 N. E. 309 302, 1661
Dunphy v. Traveller News-
paper Ass'n, 146 Mass. 495;
16 N. E. 426 938, 941, 942,
943, 967, 980
Dunsrauir v. Colonist Printing
& Pub. Co., 9 British Co-
lumbia 290 560, 932, 992, 1193,
1194
Dunsterv. Bernards Land, etc.
Co. (N. J.), 65 Atl. 123 1003, 1003
Dunster's Case (18 4), 3 Ch.
473 206, 1178
Dunston v. Imperial Gas
Light Co., 3 B. & Adol. 125 553,
1237
Dupee V. Boston Water Power
Co., 114 Mass. 37 517
V. Chicago Horse Shoe
Co., 117 Fed. 40; 54 C. C.
A. 426 202
Dupignac v. Bemstrom, 83
N. Y. Supp. 350 1120
Du Pont V. Bushong, 1 Wkly.
Notes Cas. (Pa.) 378 1527
V. Tilden, 42 Fed. 87 629, 647
Dupuy V. Eastern Bldg., etc.
Ass'n, 93 Va. 460; 25 S. E.
537; 35 L. R. A. 215 563
V. Terminal Co., 82 Md.
408; 33 Atl. 889; 34 Atl.
910 72, 958
Duquesne College Charter,
Re, 12 Pa. Co. Ct. Rep. 491 376
TABLE OF CASES
[The references are to pages]
912
1064
307
751
Du Quoin Star, etc. Co. v.
Thorwell, 3 111. App. 395
Durant v. Iowa County, 1
Woolw. 69 1435, 1448
Durfee v. Harper, 22 Mont.
373; 56Pac. 589
Durgin v. Smith, 133 Mich.
331; 94N. W. 1044
Durham v. Monumental Silver
Mining Co., 9 Oreg. 41
Durham Bldg. Soc, 12 Eq.
516 830, 831, 832, 862
Durkee v. People, 155 111. 354;
40 N. E. 626; 46 Am. St.
Rep. 340 474, 1031
Durlatcher i>.Frazer,8 Wyom.
59;55Pac. 306; 80 Am. St.
Rep. 918
Duryea v. Zimmerman, 106
N. Y. Supp. 237
Dutchess, etc. R. R. Co. v.
Mabbett, 58 N. Y. 397 104, 104,
131, 203, 203
Dutenhofer v. Adirondack Ry.
Co., 14 N. Y. Supp. 558 1663,
1672, 1674
Du Vivier v. Gallice, 149 Fed.
118; 80 C. C. A. 556
Dwight V. Smith, 9 Fed. 795
297
340
■ V. Smith, 13 Fed. 50
298
1438,
1489
1447,
1489
Dwinnell v. Minneapolis Fire
etc. Ins. Co., 97 Minn. 340;
106 N. W. 312 483
Dyerti.Drucker,108N.Y.App.
Div. 238 ; 95 N. Y. Supp. 749 383
V. Rich, 1 Mete. (Mass.)
180 302
Dykers v. Allen, 7 Hill
(N. Y.) 497; 42 Am. Dec.
87 ■ . 418,419
Dykman v. Keeney, 154 N.
Y. 483; 48 N. E. 894 1259,
1285
E
Eagle Iron Co. v. Colyar, 156
Fed. 954 932, 985, 1011
Eagle, etc. Mfg. Co. v. Browne,
58 Ga. 240 1238
Eakins v. Am. White Bronze
Co., 75 Mich. 668; 42
N. W. 982 1248
Eakwright v. Logansport, etc.
R. R. Co., 13 Ind. 404 105, 604
Bales V. Cumberland Black-
lead Mine Co., 6 H. & N.
481 1296, 1299, 1300, 1321
Earl of Lindsey v. Great
Northern Ry. Co., 10 Hare
664 281, 395
Earl of Shrewsbury v. North
Staffordshire Ry. Co., 1 Eq.
593 281, 281
Earle v. Carson, 188 U. S. 42;
23 Sup. Ct. 254 616, 619, 619,
695
V. Coyle, 97 Fed. 410; 38
C. C. A. 226 695, 696, 763
V. Seattle, etc. Ry. Co.,
56 Fed 909 942, 958, 969, 971
Earp'sAppeal,28Pa.St.368 1137,
1147, 1149
Earp's Will, 1 Pars. Eq. (Pa.)
453 1137, 1149, 1443
East Anglian Rys. Co. v. East-
ern Counties Ry. Co., 11
C. B. 775 828, 829
East Birmingham Land Co.
V. Dennis, 85 Ala. 565; 5
So. 317; 7Am. St. Rep. 73;
2 L. R. A. 836 682, 683, 727
East Gloucestershire Ry. Co.
V. Bartholomew, L. R. 3
Ex. 15 155, 157, 159
East New York, etc. R. R. Co.
V. Lighthall, 36 How. Pr.
(N. Y.) 481 637, 1381
East Norway Church v.
Froislie, 37 Minn. 447; 35
N. W. 260 249
East Pant Du, etc. Co. v.
Merryweather, 2 Hem. &
Mill. 254 932, 933, 933, 1080,
1312
East St. Louis Connecting Ry.
Co. V. Jarvis, 92 Fed. 735 838,
874
East Tennessee, etc. R. R.
Co. V. Evans, 6 Heisk.
(Tenn.) 607 386
V. Gammon, 5 Sneed
(Tenn.) 567 586
East Wheal Mining Co., 33
Beav. 119 748
Easterly v. Barber, 65 N. Y.
252 1225, 1227
Eastern Bldg., etc. Ass'n v.
Williamson, 189 U. S. 122;
23 Sup. Ct. 527 832, 838
Eastern Cable Co. v. Great
Western Mfg. Co., 164
Mass. 274; 41 N. E. 295 1413
Eastern Counties Ry. Co. v.
Broom, 6 Exch. 314 869
V. Hawkes, 5 H. L. C.
331 283, 861
Ixix
TABLE OF CASES
[The references are to pages]
1672
1607
1365
Eastern Plank Road Co. v.
Vaughan, 20 Barb. (N. Y.)
155 604
V. Vaughan, 14 N. Y.
546 112, 208
Eastern R. R. Co., Re, 120
Mass. 412 1493
Eastern Townships Bank v.
St. Johnsbury, etc. R. R.
Co., 40 Fed. 423 1437, 1450,
1452
Eastern Tube Co. v. Harrison,
140 Fed. 519 352, 357, 359, 366
Eastern & Midlands Ry. Co.,
45 Ch. D. 367, 386 1574, 1606,
1644
, 67 L. T. N. 8. 711
(No. 2), 66L. T. 153
Eastham v. York State Tele-
phone Co., 86 N. Y. App.
Div. 562; 83 N. Y. Supp.
1019
Eastman v. Parkinson
(Wise), 113 N. W. 649 63, 65,
1221
Easton v. Houston, etc. Ry.
Co., 38 Fed. 12 1568
V. Houston, etc. Ry. Co.,
38 Fed. 784 1611
V. Houston, etc. Ry. Co.,
40 Fed. 189 1490, 1491, 1621,
1621
Easton Nat. Bank v. Am.
Brick & Tile Co. (N. J.), 64
Atl. 917; 8. c. 60 Atl. 54
(N. J.) 627, 628, 647, 1234
V. Am. Brick & Tile Co.
(N. J.), 64 Atl. 1095 635
Eastwick's Case, 34 L. T. 84 1289,
1340
Easun v. Buckeye Brewing
Co., 51 Fed. 156 71, 72, 76
Eaton V. Aspinwall, 19 N. Y.
119 241, 250
V. New England Tel. Co.,
68 Me. 63 729, 729
V. Robinson, 19 R. I.
146; 31 Atl. 1058; 32 Atl.
339; 29 L. R. A. 100 982, 1240
V. Walker, 76 Mich. 579;
43 N. W. 638 ; 6 L. R. A. 102 244
Eaton, etc. R. R. Co. v. Hunt,
20 Ind. 457 1584, 1588
Ebbett's Case, 5 Ch. 302 173
Ebbw Vale Steel, etc. Co., 4
Ch. D. 827 532, 540
Ebelhar v. German Am. Sec.
Co. (Ky.), 91 S. W. 262 1128,
1268
Ixx
Ebenezer Timmins & Sons
(1902), 1 Ch. 238 149, 155, 205,
642
E. Carver Co. v. Manufac-
turers' Ins. Co., 6 Gray
(Mass.) 214 1379
Eckman v. Chicago, etc. R. R.
Co., 169 111. 312; 48 N. E.
496; 38 L. R. A. 750 852
Eckstein v. Downing, 64 N. H.
248; 9 Atl. 626; 10 Am.
St. Rep. 404 787
Eclipse Mining Co., 17 Eq.
490 433, 434
Ecuadorian Ass'n v. Ecuador
Co. (N. J.), 65 Atl. 1051 188,
198, 630
V. Ecuador Co., 61 Atl.
481 632
Eddleman v. Union County
Traction, etc. Co., 217 111.
409; 75 N. E. 510 249
Eddy V. Co-operative Dress
Ass'n, 3 N. Y. Gv. Proc.
Rep. 442 1242
Eddystone Marine Ins. Co.
(1893), 3 Ch. 9 637, 639
Edelhoff V. Homer-Miller
Mfg. Co., 86 Md. 595; 39
Atl. 314 1553
V. State, 5 Wyom. 19;
36 Pac. 627 228
Edelstein v. Schuler & Co.
(1902), 2 K. B. 144 1423, 1425,
1425
Eden v. Ridsdale, etc. Co., 23
Q. B. D. 368 1333, 1334, 1338,
1339
Edgerly v. Emerson, 3 Foster
(23 N. H.) 555; 55 Am.
Dec. 207 912, 912, 917, 1205,
1210, 1211
Edgerton v. Electric Imp. Co.,
50 N. J. Eq. 354; 24 Atl.
540 199, 632
Edgewood Borough v. Scott,
29 Pa. Sup. Ct. 156 35, 61
Edinburgh, etc. Ry. Co. v.
Hebblewhite, 6 M. & W.
707 661, 668
Edison v. Edison United
Phonograph Co., 52 N. J.
Eq. 620; 29 Atl. 195 958
Edison Storage Battery Co.
V. Edison Automobile Co.,
67N.J. Eq. 44; 56 Atl. 861 374,
376, 377
Edmonds v. Blaina Furnace
Co , 36 Ch. D. 215 1392
TABLE OF CASES
[The references are to pages]
Edmonds v. Company of
Watermen & Li^termen,
24 L. J. Magistrate Cases,
124 564
Edward Nelson & Co. v.
Faber & Co. (1903), 2 K. B.
367 1545, 1548
Edwards v. Bates County, 99
Fed. 905; 40 C. C. A. 161 1440
V. Bates County, 163
U.S. 269; 16Sup. Ct. 967 1448
V. Bates County, 117
Fed. 526 916, 1434, 1436
V. Bay State Gas Co., 91
Fed. 942 957, 976
V. Bay State Gas Co., 91
Fed. 946 1679
V. Bay State Gas Co.,
130 Fed. 242 983
V. Fairbanks, 27 La. Ann.
449 844
V. Grand Junction Ry.
Co., 1 Myl. & C. 650 281
V. Mercantile Trust Co.,
124 Fed. 381 956, 956, 967,
969,979
V. Michigan Tontine In-
vestment Co., 132 Mich. 1 ;
92 N. W. 491 850, 856
V. National Window
Glass, etc. Ass'n (N. J.), 58
Atl. 527
V. Standard Rolling
Stock Syndicate (1893), 1
Ch. 574
, Ex parte, 64 L. T. 561
Eells V. Johann, 27 Fed. 327
Efland v. Southern Ry. Co.
(N. Car.), 59 S. E. 355
Egilbert v. Superior Court
(Cal.), 91 Pae. 748 906, 1367,
1376
Ehle V. Chittenango Bank, 24
N. Y. 548 1118, 1119
Ehrmann Bros. (1906), 2 Ch.
697
Eichbaum v. City of Chicago
Grain Elevators (1891), 3
Ch. 459
V. Sample, 213 Pa. 216;
62 Atl. 837
Eidman v. Bowman, 58 111.
444; 11 Am. Rep. 90 487, 499,
1189
Einstein v. Rochester Gas, etc.
Co., 146 N. Y. 46; 40 N. E.
631 482
Eisfeld V. Kenworth, 50 Iowa
389 128
979
1604
181
1551
25
1396
524
786
Ixxi
Elder v. New Zealand Co., 30
L. T. 285 160, 189, 608
Eldred v. American Palace
Car Co., 105 Fed. 457; 44
C. C. A. 554 969, 975
V. American Palace Car
Co., 99 Fed. 168; s. c. 96
Fed. 59; 103 Fed. 209; 105
Fed. 455; 45 C. C. A. 1;
105 Fed. 457; 44 C. C. A.
554 969, 975
- — V. Ripley, 97 111. App.
503 928, 1350
Eldridge v. Smith, 34 Vt. 484 1520,
1522
Electric Co. v. Edison Elec-
tric, etc. Co., 200 Pa. 516;
50 Atl. 164 499, 507
Electric Fireproofing Co. v.
Smith, 113 N. Y. App. Div.
615 339, 1347
Electric Welding Co. v. Prince
(Mass.), 81 N. E. 306 175, 178,
348, 350, 351, 356, 356,
356, 358, 363, 363, 364
Elevator, etc. Co. v. Memphis,
etc. R. R. Co., 85 Tenn.
703; 5S. W. 52; 4 Am. St.
Rep. 798
Eley V. Positive Life Ass. Co.,
1 Ex. D. 20
V. Positive, etc. Ass. Co.,
1 Ex. D. 88
Elgin Nat. Watch Co. v.
Loveland, 132 Fed. 41 123, 371,
373 373
Elias, Re, 40 N. Y. Supp. 910;
17 N. Y. Misc. 718 1025, 1176
Elizabethtown Gas Light Co.
V. Green, 46 N. J. Eq. 118;
49 N. J. Eq. 329 ; 24 Atl. 560
Elk Brewing Co. v. Neubert,
213 Pa. 171; 62 Atl. 782
Elkhom Land, etc. Co. v.
Childers (Ky.), 100 S. W.
222
Elkington's Case, 2 Ch. 511
Elkins V. Camden, etc. R. R.
Co., 36 N. J. Eq. 5
V. Camden, etc. R. R. Co.,
36 N. J. Ea. 233 459, 467, 467
V. Camden, etc. R. R.
Co., 36 N. J. Eq. 467 954, 1194,
1194, 1326
V. Chicago, 119 Fed. 957 969
EUerman v. Chicago Grand
Junction Rys., etc. Co., 49
N. J. Eq. 217; 23 Atl. 287 39,
52, 62, 76, 86, 94, 95
452
285
34
245
1307
420
633
57
TABLE OF CASES
[The references are to pages]
1133
1650
Elliot V. Richardson, L. R 5
C. P. 744 1029
Elliott V. Baker (Mass.), 80
N. E. 450 510, 1271
V. Farmers' Bank (W.
Va.), 57 S. E. 242 1317, 1318
V. Sibley, 101 Ala. 344;
13 So. 500 1250
Ellis V. Barfield, W. N.
(1891) 84 . 1140
V. Boston, etc. R. R. Co.,
107 Mass. 1 1517, 1517, 1550
V. French Canadian, etc.
Ass'n, 189 Mass. 566; 76
N. E. 207 1126,1359
V. Howe Machin ■ Co., 9
Daly (N. Y. 78 852, 880
V. N. C. Institution, 68
N. Car. 423 593, 594, 1224
V. Proprietors of Essex
Merrimack Bridge, 2 Pick.
(Mass.) 243
V. Vernon, etc. Water
Co., 86 Tex. 109; 23 S. W.
858
V. Ward, 137 111. 509; 25
N. E. 530 1265, 1288, 1360
Ellison V. Branstrator, 153
Ind. 146; 54 S. E. 433 406, 407
V. Mobile, etc. R. R. Co.,
36 Miss. 572 151, 185
Ellsworth V. Dorwart, 95
Iowa 108; 63 N. W. 588;
58 Am. St. Rep. 427 894, 894
899, 901, 904, 907
V. St. Louis, etc. R. R.
Co., 98 N. Y. 553 1403
Ellsworth, etc. Mfg. Co. v.
Faunce, 79Me. 440; lOAtl.
250 1011, 1225, 1225
Elmira, etc. Mill Co. v. Erie
Ry. Co., 26 N. J. Eq. 284 1617
Eisner and McArthur's Case
(1895), 2 Ch. 759 640, 640, 641
Elve V. Boynton (1891), 1 Ch.
501 20, 20
Elwell V. Fosdick, 134 U. S.
500; lOSup. Ct. 598
V. Grand Street, etc. R.
R. Co., 67 Barb. (N. Y.) 83
Ely V. Hanford, 65 111. 267
V. Sprague, 1 Clarke Ch.
(N. Y.) 351
Elyea v. Lehigh Salt Mining
Co., 169 N. Y. 29; 61 N.
E. 992
Elyton Land Co. v. Dowdell,
113 Ala. 177: 20 So. 981;
59 Am. St. Rep. 106 72, 78
1485
1509
324
1114
1023
Emerson B. European, etc. Ry.
Co:, 67 Me. 387; 24 Am.
Rep. 39 1503, 1512, 1515, 1519
V. Gaither, 103 Md. 564
1125, 1259, 1263,
1285, 1288, 1289
Emerson Co. v. Nimocks, 88
Fed. 280 226
Emery v. Parrott, 107 Mass.
95. 274, 336, 1270, 1346
Emlen v. Lehigh Coal, etc. Co.,
47 Pa. St. 76; 86 Am. Dec.
518 1472
Emma Silver Mining Co., 10
Ch. 194 890, 891
V. Grant, 11 Ch. D. 918 293,
320, 321
V. Grant, 17 Ch. D. 122
327, 1284, 1346, 1346
V. Lewis, 4 C. P. D. 396
271, 273, 274, 318, 320
Emmerling v. First Nat. Bank,
97 Fed. 739; 38 C. C. A.
399 841
Emmitt v. Springfield, etc. R.
R. Co., 31 Oh. St. 23 609, 625
Empire Mfg. Co. v. Stuart, 46
Mich. 482; 9 N. W. 527 248
Empire Mills v. Alston Gro-
cery Co., 4 Willson Civ.
Cas. (Tex.) § 221 252
Empire Steam, etc. Co. v.
DeLavel Dairy, etc. Co.
(N. J.), 67Atl. 711 1362
Empress Engineering Co., Re,
16 Ch. D. 125 283
Engel V. South Metropolitan
Brewing Co. (1892), 1 Ch.
442 1513, 1599
Engelhardt v. Fifth Ward
Loan Ass'n, 148 N. Y. 281;
42 N. E. 710; 35 L. R. A.
289 586
England v. Dearborn, 141
Mass. 590; 6 N. E. 837 880,
1381
Englefield Colliery Co., 8 Ch. '
D. 388 295
English & Colonial Produce
Co. (1906), 2 Ch. 435 289, 293,
294, 296
Englisli, etc. Investment Co.
V. Brunton (1892), 2 Q. B.
700 1534, 1547
Ennis Cotton Oil Co. v. Burke,
39 S. W. 966 (Tex. Gv.
App.) 287, 307, 309
Ennis & West Clare Ry. Co.,
3 L. R. Ir. 94 224
Ixxii
TABLE OF CASES
[The references are to pages]
Enterprise Ditch Co. v. Mof-
fitt,58Nebr.642; 79N.W.
560; 45 L. R. A. 647; 76
Am. St. Rep. 122 650, 652
Enterprise Mut. Beneficial
Ass'n, 10 Phila. 380 103, 120
Eppright V. Nickerson, 78
Mo. 482 66, 1188
Equitable Endowment Ass'n
V. Fisher, 71 Md. 430; 18
Atl. 808 592, 594
Equitable Gas Light Co. v.
Baltimore Coal Tar, etc. Co.,
65 Md. 73; 3 Atl. 108 1375
Equitable Reversionary Int.
Soc. V. Fuller, 1 J. & H. 379
Equitable Securities Co.' v.
Johnson (Cal.), 85 Pac.
840
Erd V. Bavarian, etc. Ass'n,
67 Mich. 233; 34N. W. 555
1446
695
580
Erie City Iron Works v. Bar-
ber, 106 Pa. St. 125; 51
Am. Rep. 508 869
Erie Lumber Co., 150 Fed.
817 1650
Erie Printing Co. v. Erie
Lithographmg & Printing
Co., 31 Pa. Co. Ct. 1 371, 375
Erie, etc. R. R. Co. v. Patrick,
2 Keyes (N. Y.) 256 176
Erlanger v. New Sombrero
Phosphate Co., 3 App. Gas.
1218 271, 316, 316, 316, 329
Ernest V. Croysdill, 29 L. J.
Gh. 580 1260
V. Loma Gold Mines
(1897), 1 Ch. 1 1036, 1036,
1044, 1044
V. NichoUs, 6 H. L. Gas.
401 1305
Ernst V. Elmira Mun. Imp.
Co.,24N.Y. Misc. 583; 54
N. Y. Supp. 116 441
Emy V. G. W. Schmidt Co.,
197 Pa. St. 475; 47 Atl.
877 969, 980
Erskine v. Loewenstein, 82
Mo. 301 648, 736
V. Mcllrath, 60 Minn. 485 ;
62 N. W. 1130 1615
Erskine, Oxenard & Co. v.
Sachs (1901), 2 K. B. 504 809
Ervin V. Oregon, etc. R. R.
Co., 22 Hun (N. Y.) 566 889
V. Oregon Ry., etc. Co.,
28 Hun (N Y.) 269 968
Ervin v. Oregon, etc. Naviga-
tion Co. , 27 Fed. 625 1082, 1082
Esgen V. Smith, 113 Iowa 25;
84 N. W. 954 626
Esparto Trading Co., 12 Ch.
D. 191 525, 664, 665, 1173,
1175
Esper V. Miller, 131 Mich.
334; 91N. W. 613 287
Espuela Land, etc. Co., W. N.
(1900) 139 1000, 1002
Essex Turnpike Corp. v. Col-
lins, 8 Mass. 292 169
Estabrook, Ex parte, 8 Fed.
Gas. 794; 2 Lowell 547 862,
1380
Estell V. University of the
South, 12 Lea (Tenn.) 476 70
Estes V. German Nat. Bank,
62 Ark. 7; 34 S. W. 85 1211
Estey Mfg. Co. v. Runnels, 55
Mich. 130; 20 N. W. 823
234 237
E. Swindell & Co. v. Bain-
bridge State Bank (Ga.),
60 S. E. 13 866
Etna Coal, etc. Co. v. Marting
Iron, etc. Co., 127 Fed. 32 1583
Etna Ins. Co., Re (1871), Ir.
Rep. 6 Eq^298 178
Ettlinger v. Persian Rug, etc.
Co., 142 N. Y. 189; 36
N. E. 1055; 40 Am. St. Rep.
587 1587
Etty V. Bridges, 2 Y. & Colly
Ch. 486 801
Eureka Fire Hose Co. v. Eu-
reka Rubber Mfg. Co. (N.
J.), 60 Atl. 561 373
European Central Ry. Co.,
4 Ch. D. 33 1442
European, etc. Ry. Co. v.
Poor, 59 Me. 277 1303, 1334,
1335
Eustace v. Dublin Trunk Ry.
Co., 6 Eq. 182 200, 201
Euston V. Edgar (Mo.), 105 S.
W. 773 262, 628
Evans v. Boston Heating Co.,
157 Mass. 37; 31 N. E.
698 1004
V. Chapman, 86 L. T. 381
132, 589
V. Davies (1893), 2 Ch.
216 423
V. Johnson, 149 Fed.
978; 79 C. C. A. 488 84, 838
V. Lee, 11 Nevada. 194 407,
1376
bcxiii
TABLE OF CASES
[The references are to pages]
Evans v. Smallcombe, L. R. 3
H. L. 249 665
V. Southern Turnpike
Co., 18 Ind. 101 • 231
V. Union Pao. Ry. Co., 58
Fed. 497 970, 971
Evans' Case, 2 Ch. 427 203
Evansville Nat. Bank v. Met-
ropolitan Nat. Bank, 2
Biss. 527 571, 769
Evansville Public Hall Co.
V. Bank of Commerce, 144
Ind. 34; 42 N. E. 1097 1306
Evansville, etc. R. R. Co. v.
Evansville, 15 Ind. 395 244,
1109
Evarts V. Killingsworth Mfg.
Co., 20 Conn. 447 873, 875,
875, 924, 924, 1367, 1375
Evenson v. EUingson, 67
Wise. 634; 31 N. W. 342
244
Everet v. Williams, 9 Law
Quarterly Review 197 258
Everitt V. Automatic Weigh-
ing Machine Co. (1892), 3
Ch. 506 769
Evertson v. Nat. Bank of
Newport, 66 N. Y. 14; 23
Am. Rep. 9 1451, 1451, 1461,
1463, 1464
Excelsior Ins. Co., 38 Barb.
(N. Y.) 297 1163, 1191
Excelsior Petroleum Co. v.
Lacey, 63 N. Y. 422 1358
Excelsior Water Co. v. Pierce,
90 Cal. 131; 27 Pac. 44 416,
416, 1098, 1099, 1099, 1100,
1103, 1104, 1104, 1104, 1109,
1117
Exchange Bank v. Macon
Construction Co., 97 Ga. 1;
25 S. E. 326; 33 L. R. A.
800 873, 878, 1569, 1570
Exchange Drapery Co., 38
Ch. D. 171 435
Exeter, etc. Ry. Co. v. BuUer,
5 Eng. Ry. & Can. Cas. 211 ;
16 L. J. Ch. 449 930, 933
Ex-Mission Land Co. v.
Flash, 97 Cal. 610; 32
Pac. 600 272, 321, 327
Exter V. Sawyer, 146 Mo. 302 ;
47 S. W. 951 322, 326
Eyre's Case, 31 Beav. 177 766,
1327
Eyster v. Centennial Board of
Finance, 94 U. S. 500 425, 1091 ,
1099
Ixxiv
Factors, etc. Ins. Co. v. Har-
bor Protection Co., 37 La.
Ann. 233 121
V. Marine Dry Docks,
etc. Co., 31 La. Ann. 149 732
Fadness v. Baunberg, 73 Wise.
257; 41 N. W. 84 302
Fahrney v. Kelly, 102 Fed.
403 716
Fairbank «.. Merchants' Nat.
Bank, 132 111. 120; 22 N.
E. 524 806, 806, 810, 812,
1135, 1136
Fairfield County Turnpike
Co. V. Thorp, 13 Conn. 173
1078, 1231
Fairtitle ex dem. Mytton v.
Gilbert (1787), 2 T. R. 169
828, 829
Falcone v. Societa Sarti, 61
N. Y. Supp. 873 562
Fallon V. United States Direct-
tory Co., 86 N. Y. App.
Div. 29 ; 83 N. Y. Supp. 359 957
Falls City Tinware Co.'s
Trustee v. Levine (Ky.),
104 S. W. 716 520
Famous Shoe, etc. Co. v.
Eagle Iron Works, 51 Mo.
App. 66 1377
Faneuil Hall Bank v. Bank
of Brighton, 16 Gray
(Mass.) 534 863
Fanning v. Insurance Co., 37
Oh. St. 339; 41 Am, Rep.
517 174
Farley v. St. Paul, etc. Ry.
Co., 4 McCrary 138 1636
Farmers' Bank v. Diebold
Safe, etc. Co., ,66 Oh. St.
367; 64N. E. 518; 90 Am.
St. Rep. 586; 58 L. R. A.
620 726, 739
V. McKee, 2 Pa. St. 318
1372
Farmers' Bank of Md. v. Igle-
hart, 6 Gill (Md.) 50 770
Farmers' Bank of Maryland's
Case, 2 Bland (Md.) 394
768, 769, 776
Farmers' Bank of Vine Grove
V. Smith, 49 S. W. 810;
105 Ky. 816; 88 Am. St.
Rep. 341 293
Farmers' L. & T. Co. v. Amer-
ican Waterworks Co., 107
Fed. 23 1516, 1638
TABLE OF CASES
[The references are to pages]
Farmers' L. & T. Co. v. Bank-
ers, etc. Tel. Co., 148 N. Y.
315; 42N. E. 707; 51 Am.
St. Rep. 690 ; 31 L. R. A. 403 1570
V. Cape Fear, etc. R. R.
Co., 62 Fed. 675 1602, 1602
V. Cape Fear, etc. Ry.
Co., 71 Fed. 38 1585
V. Cary, 13 Wise. 110 1515
V. Central R. R. Co., 17
Fed. 758 1634
V. Central R., etc. Co.,
120 Fed. 1006 120
V. Central R. R. of Iowa,
7 Fed. 537 1615, 1620, 1633
V. Central R. R. of Iowa,
8 Fed. 60 1621
V. Centralia, etc. R. Co.,
96 Fed. 636 1646, 1646, 1647
. V. Chicago, etc. R. Co.,
118 Fed. 204 1617
V. Chicago, etc. R. R. Co.,
68 Fed. 412 1494
V. Chicago, etc. Ry. Co.,
27 Fed. 146 1593, 1602, 1623,
1626, 1672, 1675
■». Chicago, etc. Ry. Co.,
42 Fed. 6 1612, 1612
V. Chicago, etc. Ry. Co.,
44 Fed. 653 1634, 1634
■ V. Clowes, 3 N. Y. 470 87
' V. Commercial Bank, 11
Wise. 207 1503
> V. Commercial Bank, 15
Wise. 424; 82 Am. Dec.
689 1532
'■ V. Denver, etc. Ry. Co.,
126 Fed. 46 1538, 1538
V. Detroit, etc. R. R.
Co., 71 Fed. 29 1496, 1516,
1517, 1518, 1548,
1568, 1568, 1573
V. Farmers' L. & T. Co.
of Kansas, 1 N. Y. Supp. 44 375
— ' — V. Grape Creek Coal Co.,
65 Fed. 717; 13 C. C. A. 87
1465, 1465
V. Green Bay, etc. R. R.
Co., 6 Fed. 100; 10 Biss.
203 1628, 1628, 1628, 1630
V. Green Bay, etc. Ry.
Co., 45 Fed. 664 1568
V. Hendrickson, 25 Barb.
(N. Y.) 484 1396
■». Housatonic R. R. Co.,
152 N. Y. 251; 46 N. E.
504 1248
• -v. Iowa Water Co., 78
Fed. 881 1456, 1466, 1627
Farmers' L. & T. Co. v. Kansas
City, etc. R. R. Co., 53 Fed.
182 1563, 1572
V. Lake St. Elevated R.
Co., 122 Fed. 914 1581
V. Louisville, etc. Ry.
Co., 103 Fed. 110 1659
V. Madison Mfg. Co., 153
Fed. 310 1343, 1434
V. Mann, 4 Robt. (N. Y.)
356 1373
V. Meridian Waterworks
Co., 139 Fed. 661 1498, 1521,
1552, 1604
V. Missouri, etc. Ry. Co.,
21 Fed. 264 1659
V. New England Water-
works Co., 137 Fedi 729;
70 C. C. A. 163 1456
V. New York, etc. Ry.
Co., 94 N. Y. Supp. 928 1595
V. New York, etc. Ry.
Co., 150 N. Y. 410; 44
N. E. 1043; 55 Am. St.
Rep. 689; 34 L. R. A. 76 1082,
1595, 1593
V. Northern Pae. R. R.
Co., 58 Fed. 257 1612
V. Northern Pac. R. R.
Co., 60 Fed. 803 1621
V. Northern Pac. R. R.
Co., 61 Fed. 546 1602, 1602
V. Northern Pac. R. R.
Co., 66 Fed. 169 1585, 1587, 1595
V. Northern Pac. R. R.
Co., 68 Fed. 36 1565, 1567
V. Northern Pac. R. R.
Co., 70 Fed. 423 1585, 1587
V. Northern Pac. R. R.
Co., 71 Fed. 245
V. Northern Pae.
Co., 74 Fed. 431
1567
R. R.
1561, 1565,
1568
V. Northern Pac. R. R.
Co., 79 Fed. 227
— V. Nova Scotia, etc. Ry.
Co., 24 Nova Scotia 542
— V. Oregon Pac. R. R. Co.,
SlOreg. 237; 48 Pae. 706;
65 Am. St. Rep. 822; 38
L. R. A. 424
V. Oregon, etc. R. R. Co.,
40 Pae. 1089; 28 Oreg. 44
— V. Oregon, etc. R. R. Co.,
67 Fed. 404
— V. Penn Plate Glass Co.,
186 U.S. 434; 22 Sup. Ct.
842
1568
1584
1640
1627,
1629
1453
1483
Ixxv
TABLE OF CASES
[The references are to pages]
Farmers' L. & T. Co. v. Perry,
3 Sandf. Ch. (N. Y.)'339 75, 87
V. Rockaway Valley
R. R. Co., 69 Fed. 9 1400
V. San Diego St. Car Co.,
45 Fed. 518 1080, 1310,
1402, 1406
V. San Diego, etc. Co., 49
Fed. 188 1510, 1608
V. Stuttgart, etc. R. R.
Co., 92 Fed. 246 1566
V. Toledo, etc. R. R.
Co., 54 Fed. 759 67, 1405, 1405,
1435
V. Toledo, etc. Ry. Co.,
67 Fed. 49 109, 492, 986, 1525,
1526, 1624
V. Vicksburg, etc. R. R.
Co., 33 Fed. 778 1565, 1570
V. Winona, etc. Ry. Co.,
59 Fed. 957 1593, 1603
Farmers' Mfg. Co. v. Spruks
Mfg. Co., 119 Fed. 594 1356
Farmers' Nat. Bank v. Sutton
Mfg. Co., 52 Fed. 191; 3 C.
C. A. 1; 17L. R. A. 595 862,
867
716
V. Wilson, 58 Cal. 600
Farmers' & Mech. Bank v.
Nelson, 12 Md. 35
Farmers', etc. Bank v. Bald-
win, 23 Minn. 198; 23 Am.
Rep. 683
V. Champlain, 18 Vt. 131
V. Downey, 53 Cal. 466;
31 Am. Rep. 62
V. Haney, 87 Iowa 101;
54 N. W. 61 572, 770
V. Iglehart, 6 Gill (Md.)
50 773, 791
V. Mosher, 100 N. W.
133; 94 N. W. 1003; 68
Nebr. 713
V. Waco Electric Ry.
Co. (Tex.), 36 S. W. 131
175
845
517
1334
715
1435,
1562
V. Wasson, 48 Iowa 336;
30 Am. Rep. 398 571, 1335, 1335
V. Wayman, 5 Gill (Md.)
336 814, 814
Farmers', etc. Ins. Co. v.
Chase, 56 N. H. 341 1214, 1215
Farmers', etc. Trust Co. v. St.
Joseph, etc. Ry. Co., 3
Dill. 412 1396
Farmers', etc. Turnpike Co.,
25 Pa. St. 303 404
Farmington Sav. Bank v.
Fall, 71 Me. 49 868
Famesworth v. Robbins, 36
Minn. 369; 31 N. W. 349
518,
524
Ixxvi
Famham v. Benedict, 107
N. Y. 159; 13 N. E. 784 245
Famsworth v. Drake, 11 Ind.
101 251
Farrar v. Walker, 13 Nat. B.
Reg. 82 177
Farrell v. Gold Flint Mining
Co., 32 Mont. 416; 80 Pac.
1027 1210
V. Union Trust Co., 77
Mo. 475 1582
Farrington v. Putnam, 90 Me.
405; 37 Atl. 652; 38 L. R.
A. 339 847
V. South Boston R. R.
Co., 150 Mass. 406; 23
N. E. 109; 15Am. St. Rep.
222; 5L. R. A. 849 736,741
Farwell v. Babcock, 27 Tex.
Civ. App. 162; 65 S. W.
509 969, 1076
V. Colonial Trust Co., 147
Fed. 480; 78 C. C. A. 22 777
V. Great Western TeL
Co., 161 111. 522; 44 N. E.
891 1617
V. Houghton Copper
Works, 8 Fed. 66 913, 914,
1042, 1199, 1210, 1223
V. Tweddle, 10 Abb. n. c.
(N. Y.) 94 1446
Farwell, John V. Co. v. Wolf,
96 Wise. 10; 70N. W. 289;
71 N. W. 109; 65 Am. St.
Rep. 22; 37 L. R. A. 138 844
Fatman v. Lobach, 1 Duer
(N. Y.) 354 723
Faulds V. Yates, 57 111. 416;
11 Am. Rep. 24 1029
Faure Electnc, etc. Co., 40
Ch. D. 141 354, 1274
V. Phillipart, 58 L. T.
525 600, 614, 1205, 1205, 1232
Fawcett v. Charles, 13 Wend.
(N. Y.) 473 1183
V. New Haven Organ
Co., 47 Conn. 224 1376
Fay V. Gray, 124 Mass. 500 . 418,
807, 812
V. Noble, 7 Cush. (Mass.)
188 252, 252
V. Noble, 12 Cush.
(Mass.) 1 591, 1370
Fayette Land Co. v. Louis-
ville, etc. R. R. Co., 93 Va.
274; 24 S. E. 1016 393, 847
TABLE OF CASES
[The references are to pages]
Fayetteville, etc. Ry. v. Aber-
deen, etc. R. R. Co. (N.
Car.), 55 S. E. 345 147, 160
Fear v. Bartlett, 81 Md. 435;
32 Atl. 322; 33 L. R. A.
721 180, 181
Fearing v. Glenn, 73 Fed. 116;
19 C. C. A. 388 1181, 1182,
1182
Featherstone v. Cooke, 16 Eq.
298 943, 958
Featherstonebaugh v. Lee
Moor, etc. Co., 1 Eq. 318 97
Feckheitner v. Nat. Exchange
Bank, 79 Va. 80 571, 751
Fee V. Nat. Masonic Accident
Ass'n, 110 Iowa 271; 81
N. W. 483 553, 562, 1214, 1216
Feige v. Burt, 118 Mich. 243;
77 N. W. 928; 74 Am. St.
Rep. 390 807, 808
Feitel v. Dreyfous, 117 La.
756; 42 So. 259
Felgate's Case, 11 L. T. 613
Felker v. Sullivan (Colo.), 83
Pac. 213
Felton V. West Iron, etc. Co.,
16 Mont. 81; 40 Pac. 70
Ferguson v. Toledo, etc. R. R.
Co., 85 N. Y. App. Div.
352; S3 N. Y. Supp. 283;
183 N. Y. 557
Femschild v. Yuengling
Brewing Co., 154 N. Y. 667;
49 N. E. 151
Ferrao's Case, 9 Ch. 355
Ffooks V. South Western Ry.
Co., 1 Smale & G. 142 965, 969,
972
Fidelity & Deposit Co. v.
National Bank of Com-
merce (Tex.), 106 S. W.
782 833, 1354
Fidelity Insurance Co. v.
German Savings Bank, 127
Iowa 591; 103 N.W. 958 74,
91, 846
V. Shenandoah Valley R.
Co., 32W. Va. 244; 9 S. E.
180
Fidelity Ins., etc. Co. v. Nor-
folk, etc. R. R. Co., 72 Fed.
704
V. Norfolk, etc. R. R.
Co., 88 Fed. 815
V. Norfolk, etc. R. Co.,
90 Fed. 175
V. Roanoke Iron Co., 68
Fed. 623
208
202
627
1247
1632
1659
642
407
1536
1632
1542
1650
Fidelity Ins., etc. Co. v. She-
nandoah Valley R. R. Co.,
33 W. Va. 761; 11 S. E. 58
1416, 1473, 1669
V. Shenandoah Valley
R. R. Co., 86 Va. 1; 9 8. E.
759; 19 Am. St. Rep. 858 1457,
1664, 1567, 1569, 1570,
1571
Fidelity Mutual Aid Ass'n, 12
Wkly. Notes Cas. (Pa.) 269 134
Fidelity Trust Co. i). Hobo-
ken, etc. R. Co. (N. J.), 63
Atl. 273 1554, 1555, 1601
V. Lehigh Valley R. R.
Co. (Pa.), 64 Atl. 829 458, 460,
462
V. Louisville Gas Co., 26
Ky. Law Rep. 401; 81
S. W. 927 63, 66, 70
V. Staten Island Clay Co.
(N. J. Ch.), 67 Atl. 1078 1507,'
1509
Fidelity Trust, etc. Co. v.
Mobile Street-Railway Co.,
53 Fed. 850 1489
Fidelity, etc. Co. v. Roanoke
Iron Co., 81 Fed. 439 1426,
1439, 1542
V. United, etc. Canal Co.,
36 N. J. Eq. 405 1472, 1601
V. West Pa., etc. R. R.
Co., 138 Pa. St. 494; 21
Atl. 21; 21 Am. St. Rep.
911 1408, 1450
Fidelity, etc. Vault Co. v.
Mobile Street Ry. Co., 54
Fed. 26 1660
Field V. Eastern, etc. Loan
Ass'n, 117 Iowa 185; 90
N. W. 717 584
V. Field, 9 Wend. (N. Y.)
394 1011, 1056
V. Girard College, 54 Pa.
St. 233 1363
V. Lamson, etc. Mfg. Co.,
162 Mass. 388; 38 N. E.
1126; 27 L. R. A. 136 450, 450,
464, 466
V. Union Box Co., 2
Wkly. Notes Cas. (Pa.) 426 1247
Fielden v. Lancashire, etc.
Ry. Co., 2 De G. & Sm. 531 443
Fields V. Cook, 16 La. Ann.
153 123
V. United Brotherhood,
60 III. App. 258 659
V. U. S., 27 App. D. C.
433 230
Ixxvii
TABLE OF CASES
[The references are to pages]
Fifth Ave. Bank v. Forty-sec-
ond St., etc. R. R. Co., 137
N. Y. 231; 33 N. E. 378;
33 Am. St. Rep. 712; 19
L. R. A. 331 730, 736, 739, 740
743, 784
Fifth Nat. Bank v. Navassa
Phosphate Co., 119 N. Y.
256; 23 N. E. 737 1370
V. Pittsburgh, etc. R. R.
Co., 1 Fed. 190 960
Fifth Ward Sav. Bank v.
First Nat. Bank, 48 N. J.
Law 5 13 ; 7 Atl. 3 18 63, 66, 1378
Fifty-four First Mortgage
Bonds, Re, 15 S. Car. 304 1473,
1531, 1607
Figge V. Bergenthal (Wise),
109 N.W. 581; 110 N. W.
798 1076, 1243, 1288
Fillebrown v. Hayward, 190
Mass. 472; 77 N. E. 45 1186,
1321, 1328
Fillmore v. Great Camp, 66
N. W. 675; 109 Mich. 13 948
Finance Co. v. Charleston, etc.
R. R. Co., 45 Fed. 436 1602
V. Charleston, etc. R. R.
Co., 46 Fed. 508 1610, 1613
V. Charleston, etc. R. R.
Co., 52 Fed. 524 1563
V. Charleston, etc R. R.
Co. (Moon, intervenor), 52
Fed. 526 1561, 1567
V. Charleston, etc. R. R.
Co., 62 Fed. 205; 10 C. C.
A. 323 1561, 1563, 1567, 1571
Finance & Issue v. Canadian
Produce Corp. (1905), 1 Ch.
37 160, 194, 525
Financial Corporation, 28
W. R. 760 77
,2Ch.714 100,547,547,547,
548, 549, 659, 664
Finck V. Schneider Granite
Co., 187 Mo. 244; 86 S. W.
213; 106 Am. St. Rep. 452 261,
263
Fine v. Homsby, 2 Mo. App.
61, 64 422
Fine Cotton Spinners, etc..
Ass'n V. Harwood Cash &
Co. (1907), 2 Ch. 184 376, 377
Finletter v. Acetylene Light
Co., 215 Pa. 86; 64 Atl.
429 617, 636, 645
Finley Rubber, etc. Co. v.
Finley, 32 Atl. Rep. 740
(N. J. Ch.) 1240
Finley Shoe & Leather Co. v.
Kurtz, 34 Mich. 89 488, 494,
1069, 1190
Finn v. Brown, 142 U. S. 56;
12 Sup. Ct. 136 705, 706, 706,
921, 1127, 1128, 1173,
1276
Finnegan v. Noerenberg, 52
Minn. 239; 53 N. W. 1150;
38 Am. St. Rep. 552 44, 45,
104, 243, 246, 247
Finney's Appeal, 59 Pa. St.
398 715
Finucane's Case, 17 W. R.
813 167
Firemen's Ins. Co., Ex parte,
6 Hill (N. Y.) 243 751
Firestone v. First Slavish, etc.
Church, 215 Pa. 8; 63 Atl.
1038 557
Firestone Tire, etc. Co. v.
Vehicle Equipment Co., 155
Fed. 676 103
First Ave. Land Co. v. Hilde-
brand, 103 Wise. 530; 79
N. W. 753 317
V. Parker, 111 Wise. 1;
86 N. W. 604; 87 Am. St.
Rep. 841 730, 731
First Baptist Church v.
Harper, 191 Mass. 196; 77
N. E. 778 915, 915
FirstBaptist Soc. v. Rapalee,
16 Wend. (N. Y.) 605 118
First Church of Christ, Scien-
tist, Re, 205 Pa. St. 543;
65 Atl. 536; 97 Am. St.
Rep. 753; 63 L. R. A. 411 261,
267
First Division of St. Paul, etc.
R. R. Co. V. Parcher, 14
Minn. 297 1521, 1522, 1522
First Nat. Bank, 152 Fed. 64
V. Abilene Hotel Co.
(Tex.), 103 S. W. 1120
V. Alexander (Ala.), 44
So. 866
V. American Nat. Bank,
173 Mo. 153; 72S.W. 1059
193
V. Anderson, 75 Va. 250
V. Armstrong, 42 Fed.
44
1377
853
84,
833
1551
301
- V. Asheville, etc. Lumber
Co., 116 N. Car. 827; 21
S. E. 948 1202, 1210, 1381
— V. Bacon, 113 N. Y. App.
Div. 612; 98 N. Y. Supp.
717 804
bcxviii
TABLE OF CASES
[The references are to pages]
First Nat. Bank v. Benning-
ton, 16 Blatchf. 53 1449
V. Brigg's Estate, 70 Vt.
599; 41 Atl. 586 1285
V. Christopher, 40 N. J.
Law 435; 29 Am. Rep. 262 1235
V. Church Federation,
129 Iowa 268; 105 N. W.
578 291, 306
V. Converse, 200 U. S.
425; 26 Sup. Ct. 306 22, 74, 80,
834
V. Council Bluffs, etc.
Co., 56 Hun (N. Y.) 412; '
9 N. Y. Supp. 859 1378, 1378
V. County Comm'rs of
Scott Co., 14 Minn. 77; 100
Am. Dec. 194 1436, 1461
V. Davies, 43 Iowa 424 126
V. D. Kieffer Milling Co.,
95 Ky. 97; 23 S. W. 675 109,
110, 142, 859, 1409
V. De Morse (Tex.), 26
S. W. 417 1124
V. Dovetail, etc. Gear Co.,
143 Ind. 534; 42 N. E. 924 227
V. Drake, 29 Kans. 311;
44 Am. Rep. 646 1238, 1247,
1277, 1311, 1321, 1331
V. Drake, 35 Kans. 564;
11 Pac. 445 1210
V. East Omaha Box Co.,
2 Nebr. (Unofficial Rep.)
820; 90 N. W. 223 1206, 1222
V. Ewing, 103 Fed. 168;
43 C. C. A. 150 1542, 1542, 1566,
1633, 1654, 1655
V. Garretson, 107 Iowa
196; 77N. W. 856 1379
V. Gifford, 47 Iowa 575 689,
701, 711
V. Greenville Oil Co., 24
Tex. Qv. App. 645; 60
S. W. 828 833
V. Grosshans, 61 Nebr.
575; 85 N. W. 542 867
V. Hartford, etc. Ins. Co.,
45 Conn. 22 769, 770, 776
V. Hastings, 7 Colo. App.
129; 42 Pac. 691 697, 716
V. Hogan, 47 Mo. 472 1377
V. Holland, 99 Va. 495;
39 S. E. 126; 86 Am. St.
Rep. 898; 55 L. R. A. 155 423,
712, 712
V. Lamon, 130 N. Y. 366;
29 N. E. 321 1185
V. Lucas, 21 Nebr. 280;
31 N. W. 805 1372
Ixxix
First Nat. Bank v. National
Broadway Bank, 156 N. Y.
459; 51 N. E. 398; 42 L.
R. A. 139 748, 798
V. Nat. Exchange Bank,
92 U. S. 122 74, 75, 77
V. New, 146 Ind. 411 ; 45
N. E. 597 1381
V. Orinoco Shipping, etc.
Co., 21 Times L. R. 39 1471, ,
1474
V. Peavey, 69 Fed. 455 628
V. Peoria Watch Co., 191
111. 128; 60 N. E. 859 521, 521
V. Pierson, 24 Minn. 140 ;
31 Am. Rep. 341 844, 845
V. Radford Trust Co., 80
Fed. 569; 26C. C. A. 1 1586,
1669, 1669
V. Rockefeller, 195 Mo.
15; 93 S. W. 761 118, 129, 221,
240
V. Root, 107 Ind. 224; 8
N. E. 105 810
V. Salem Capital, etc.Co.,
39 Fed. 89 517, 519
V. Shedd, 121 U. S. 74;
7 Sup. Ct. 807 1625,1671
V. Sioux City Terminal,
etc. Co., 69 Fed. 441 1496
V. Stribling, 16 Okl. 41 ;
86 Pac. 512 690, 732
V. Taliaferro, 72 Md. 164 ;
19 Atl. 364 701, 723, 1436
V. Tisdale, 84 N. Y. 655 920,
1372
V. Tisdale, 18 Hun
(N. Y.) 151 1276
V. Trebein Co., 59 Oh.
St. 316; 62 N. E. 834 296, 298,
886
V. William R. Trigg Co.
(Va.), 56 S. E. 158 43, 1624
V. Winchester, 119 Ala.
168; 24 So. 351; 72 Am.
St. Rep. 904 835, 874, 1071,
1072
V. Wyman, 16 Colo. App.
468; 66 Pac. 456 1560, 1570,
1671
V. Wyoming Valley Ice
Co., 136 Fed. 466 43, 491, 492,
1323
First Nat. Bank of Charlotte
V. Nat. Exchange Bank, 39
Md. 600 74
First Nat. Fire Ins. Co. v.
Salisbury, 130 Mass. 303 1584,
1586, 1594
TABLE OF CASES
[The references are to pages]
First Parish v. Stearns, 21
Pick. 148 1065
Fishel V. Goddard, 30 Colo.
147; 69 Pac. 607 1315, 1343,
1357
Fisher v. Black & White Pub-
lishing Co. (1901), 1 Ch. 174 40,
465, 466
V. Bush, 35 Hun (N. Y.)
641 1030, 1030
V. Essex Bank, 5 Gray
(Mass.) 373 677, 694, 716
V. Graves, 80 Fed. 590 1280,
1281
V. HuU, etc. Ry. Co., 25
Sol. J. 353 1108
V. Jones, 82 Ala. 117; 3
So. 13 698, 699
V. Parr, 92 Aid. 245; 48
Atl. 621 1259, 1279, 1281,
1285, 1286
, Ex parte, 20 S. Car. 179 1084
Fisk V. Potter, 2 Abb. Ct. App.
Dec. (N. Y.) 138 1535, 1540
Fitch V. Constantine Hydrau-
Uc Co., 44 Mich. 74; 6
N. W. 91 1373, 1378
V. Wetherbee, 110 111.
475 451
Fitchburg Savings Bank v.
Torrey, 134 Mass. 239 695
Fitchett V. Murphy, 46 N. Y.
App. Div. 181; 61 N. Y.
Supp. 182 941, 962
V. North Pa. R. R. Co.,
5 Phila. 132 1463
Fitzgeorge', Re (1905), 1 K. B.
462 1470
Fitzgerald v. Equitable, etc.
Life Ass'n, 18 N. Y. St. Rep.
914; 3 N. Y. Supp. 214 592
— — V. Fitzgerald, etc. Mal-
lory Co., 44 Nebr. 463; 62
N. W. 899 1196, 1306, 1307
V. Missouri Pac. Ry. Co.,
45 Fed. 812 874, 876
V. Persse (1908), 1 Ir.
279 1474
Fitzgerald, etc. Co. v. Fitz-
gerald, 137 U. S. 98; 11
Sup. Ct. 36 1246, 1381
Fitzgerald's Estate v. Union
Sav. Bank, 65 Nebr. 97; 90
N. W. 994 607, 614
Fitzhugh V. Bank of Shep-
herdsville, 3 T. B. Monr.
(Ky.) 126; 16 Am. Dec. 90 427
Fitzpatrick v. Dispatch Pub.
Co., 83 Ala. 604; 2 So. 727 497
Ixxx
Fitzpatrick v. Rutter, 160 111.
282; 43 N. E. 392 248
Fitzroy Bessemer Steel Co.,
Re, 50 L. T. n. s. 144 327, 1339
Fitzsimmons v. Lindsay, 205
Pa. 79; 54 Atl. 488 573
Fitzwater v. Nat. Bank of
Seneca, 62 Kans. 163; 61
Pac. 684 984
FitzwilUam v. Travis, 65 111.
App. 183 341, 342
Flagg V. Stowe, 85 111. 164 254
Flagler Engraving MachineCo.
V. Flagler, 19 Fed. 468 331
Flagstaff Co. v. Patrick, 2
Utah 304 1214
Flaherty v. Benevolent Soc,
99Me. 253; 59 Atl. 58 585,588
Flanagan v. G. W. Ry. Co., 7
Eq. 116 1300
V. Lyon, 54 N. Y. Misc.
372; 105 N. Y. Supp. 1049 301
Flanagan Bank v. Graham, 42
Oreg. 403 ; 71 Pac. 137, 790 1503
Fleener v. State, 58 Ark. 98;
23 S. W. 1 230
Fleishman v. Woods, 135 Cal.
256; 67 Pac. 276 786
Fleming v. Wallace, 2 Yeates
(Pa.) 120 915, 916, 924
Fletcher v. Ann Arbor R. R.
Co., 116 Fed. 479; 53 C. C.
A. 647 1485, 1636
V. Chicago, etc. Ry. Co.,
67 Mmn. 339; 69 N. W.
1085 1206
V. Eagle (Ark.), 86 S. W.
810 1279
V. McGill, 110 Ind. 395;
10 N. E. 651 ; 11 N. E. 779 428
Fletcher & Sons Co., George
N.. V. Alpena Circuit Judge,
136 Mich. 511; 99 N. W.
748 869, 951
Fletcher's Case, 17 I;. T. 136 168
Flinn v. Bagley, 7 Fed. 785 628
Flint V. Pierce, 99 Mass. 68;
96 Am. Dec. 691 595, 595, 651
Flippin V. Kimball, 87 Fed.
258; 31 C. C. A. 282 1617
Flitcroft's Case, 21 Ch. D.
519 1094, 1161, 1261, 1265,
1287, 1289
Floating Dock, etc. Co., In Re
(1895), 1 Ch. 691 530, 536, 536
Florence Land, etc. Co., 10
Ch. D. 530 1499, 1504
, 29 Ch. D. 421 149, 155,
155, 159, 196, 199, 199, 200
TABLE OF CASES
[The references are to pages]
Florida Sav. Bank v. Rivers,
36 Fla. 575; 18 So. 850
1169,
1366
Florsheim & Co. v. Fry, 109
Mo. App. 487; 84 S. W.
1023 233
Flour City Nat. Bank v. Shire,
88N. Y. App. Div. 401; 84
N.Y. Supp.810; 179 N.Y.
587; 72 N. E. 1141 156, 635
Flynn v. Brooklyn City R. R.
Co., 158 N. Y. 493 936
V. Columbus Club, 21
R. I. 534; 45 Atl. 551 1246
V. Third Nat. Bank, l22
Mich. 642; 81 N. W. 572 960
Fogg V. Blair, 139 U. S. 118;
11 Sup. a. 476 631
FoUit V. Eddystone Granite
Quarries (1892), 3 Ch. 75 1674
Folsom V. Detrick Fertilizer,
etc. Co., 85 Md. 52; 36 Atl.
446 885
Fontana v. Pacific Can Co.,
129 Cal. 51 ; 61 Pac. 580 451
Foote V. Anderson, 123 Fed.
659 921
V. Illinois Trust, etc.
Bank, 194111.600; 62N.E.
834 784
, Appellant, 22 Pick.
(Mass.) 299 1114, 1137, 1155
Forbes v. Memphis, etc. R. R.
Co., 2 Woods 323
Forbes' Case, 19 Eq. 353
973
1174,
1175
206
Forbes & Judd's Case, 5Ch. 270
Force v. Age-Herald Co., 136
Ala. 271; 33 So. 866
Ford V. Central Trust Co., 70
Fed. 144; 17 C. C. A. 31
V. Easthampton Rubber
Co., 158 Mass. 84; 32
N. E. 1036; 35 Am. St.
Rep. 462; 20 L. R. A. 65
V. Hill, 92 Wise. 188; 66
N. W. 115 ; 53 Am. St. Rep.
902 394, 1382
V. Kansas City, etc. Ry.
Co., 52 Mo. App. 439
Ford River Lumber Co. v.
Perron (Mich.), Ill N. W.
1074
Forde, Ex parte, 30 Ch. D. 1 53
Fordyce v. Kansas City, etc.
R. R. Co., 145 Fed. 566
■ V. Omaha, etc. R. R. Co.,
145 Fed. 544 1561, 1563, 1563
1564
1357
1571
1121
958
910
640
1543
Foreign & Colonial Govern-
ment Trust Co. (1891), 2
Ch. 395 136, 136
Foreman v. Bigelow, 4 Cliff.
508 628, 647
V. Central Trust Co., 71
Fed. 776; 18 C. C. A. 321 1617,
1641
Fore-Street Warehouse Co.,
59 L. T. N. s. 214 533
Forest Land Co. v. Bjorkquist,
110 Wise. 547; 86 N. W.
183 273
Forrest v. Manchester, etc.
Ry. Co., 30 Beav. 40; 4
DeG. F. & J. 125 91, 965
Forrest of Dean Coal Co., 10
Ch. D. 450 1283
Forrest Glen Brick Co. v.
Gade, 55 111. App. 181 918, 1005
1342
Forrest's Executors v. Lud-
dington, 68 Ala. 1 1623
Forrester v. Boston, etc. Min-
ing Co., 21 Mont. 544; 55
Pac. 229, 353 72, 965, 968, 971
V. Boston, etc. Mining
Co., 29 Mont. 397; 74 Pac.
1088; 76 Pac. 211 983,983
Forsyth v. Brown, 33 Wkly.
Notes Cas. (Pa.) 72 995, 1016,
1045, 1061, 1163, 1163
Fort Madison Lumber Co. v.
Batavian Bank, 71 Iowa
270; 32N.W.336; 60 Am.
Rep. 789 716
Fort Miller, etc. Co. v. Payne
17 Barb. (N. Y.) 567 191
Fort Payne Rolling Mill v.
Hill, 174 Mass. 224; 54
N. E. 532 1299, 1321
Fort Pitt B. & L. Ass'n v.
Model Plan B. & L. Ass'n,
159 Pa. St. 308 ; 28 Atl. 215 134
139, 140, 371, 371, 385
Fort Smith Wagon Co. v.
Baker (Ark.), 105 S. W.
591 1372
Fort Wayne Gas Co. v. Nie-
man, 33 Ind. App. 178; 71
N. E. 59 383
Fort Wayne, etc. R. R. Co. v.
Mellett, 92 Ind. 535 1617
Fortier v. New Orleans Nat.
Bank, 112 U. S. 439 ; 5 Sup.
Ct.234 382
Fortin v. TJ. S. Wind, etc.
Pump Co., 48 m. 451; 95
Am. Dec. 560 228
/
Ixxxi
TABLE OF CASES
[The references are to pages]
Fosdick V. Car Co., 99 U. S.
256 1536, 1569'
V. Schall, 99 U. S. 235 1393,
1535, 1536, 1539, 1540, 1558,
1562, 1566, 1569
Foss V. Harbottle, 2 Hare 461 928,
929, 934, 943, 944, 994, 997,
1231
Foster v. Bank of Abingdon,
88 Fed. 604 1357
V. Bank of England, 8 Q.
B. 689 893
V. Bear Valley, etc. Co.,
65 Fed. 836 1310
V. Borax Co. (1901), 1
Ch. 326 51, 73
V. Greenwich Ferry Co.,
5 Times L. R. 16 1183, 1251
V. Mansfield, etc. Co., 146
U. S. 88; 13 Sup. Ct. 28 1311
V. Mansfield, etc. E. R.
Co., 36 Fed. 627 1636, 1637
V. Moulton, 35 Minn. 458;
29 N. W. 155 254
V. Mullahphy, etc. Co.,
92 Mo. 79; 4 S. W. 260 1315
V. New Trinidad Lake
Asphalt Co. (1901), 1 Ch.
208 1093
V. Ohio-Colorado, etc.
Mining Co., 17 Fed. 130 1380
V. Oxford Ry. Co., 13
C. B. 200 1179, 1296, 1296
V. Seymour, 23 Fed. 65 331,
1290, 1291
V. Shaw, 7 S. & R. (Pa.)
156 404
V. Tyne Pontoon, etc.
Co., 63 L. J. Q. B. 50 737, 737,
742, 742, 757
V. White, 86 Ala. 467;
6 So. 88 901, 902, 902, 904
V. "White Cloud City Co.,
32 Mo. 505 229
Fothergill'sCase,8Ch.270 205,641
Foulke V. San Diego, etc. R. R.
Co., 51 Cal. 365 394
Foulkes V. Quartz Hill, etc.
Mining Co., Cababe &
Ellis 156 181
Fountain Spring Park Co. v.
Roberts, 92 Wise. 345; 66
N. W. 399; 53 Am. St.
Rep. 917 273, 327, 1333
Fountaine v. Carmathen Ry.
Co., 5 Eq. 316 1221, 1528
Fowler v. Broad's Patent
Night Light Co. (1893), 1
Ch. 724 1514, 1599
622
559
Ixxxii
Fowler v. Go wing, 152 Fed.
801
V. Great Southern Tel.,
etc. Co., 104 La. 751; 29
So. 271
V. Jarvis-Conklin Mge.
Co., 63 Fed. 888 1602, 1602,
1660
Fox V. Mackay, 125 Cal. 57;
57 Pac. 670 1079
V. Martin, 64 L. J. Ch.
473 686, 696, 722
V. Robbins (Tex.), 62
S. W. 815 1324
V. Robbins (Tex.), 70
S. W. 697 , 884, 1324
V. Seal, 22 Wall. 424 1542
Fox's Case, 5 Eq. 118 179, 525
Frames v. Bultfontein Min-
ing Co. (1891), 1 Ch. 140 471
Frances. Clark, 26 Ch.D. 257 690,
691, 691, 722, 722, 807, 807
Francis v. New York, etc.
R. R. Co., 108N. Y. 93; 15
N. E. 192
Francklyn v. Sprague, 121
U. S. 215; 7 Sup. Ct. 951
Franco-Texan Land Co. v.
Laigle, 59 Tex. 339 1008, 1009,
1045, 1225, 1225
Franey v. Warner, 96 Wise.
222; 71 N. W. 81
V. Wauwatosa Park Co.,
99 Wise. 40; 74 N. W. 548
Frank v. Denver, etc. Ry. Co.,
23 Fed. 123 1538, 1539, 1644
V. Drenkhahn, 76 Mo.
508 304
V. Morrison, 55 Md. 399 613,
613, 633
V. Morrison, 58 Md. 423 557
Franke v. Mann, 106 Wise.
118; 81N. W. 1014; 48 L.
R. A. 856
Frankfort Bank v. Johnson,
24 Me. 490
Frankfort, etc. Turnpike Co.,
V. Churchill, 6 T. B. Monr.
(Ky.) 427; 17 Am. Dec.
159
Frankland's Case, Leigh &
Cave Cr. Cas. 276 230, 230
Franklin Ave., etc. Sav. Inst.
V. Board of Education, 75
Mo. 408
Franklin Bank v. Commer-
cial Bank, 36 Oh. St. 350;
38 Am. Rep. 594 709, 845
V. Johnson, 24 Me. 490 1204
182
299
336
181
118
1187
288
844
TABLE OF CASES
[The references are to pages]
Franklin Co. v. Lewiston In-
stitution, 68 Me. 43; 28
Am. Rep. 9 74, 854, 856, 862
Franklin Fire Ins. Co. v.
Hart, 31 Md. 59 280
V. Jenkins, 3 Wend. (N.
Y.) 130 1285, 1286, 1287
Franklin Nat. Bank v. New-
combe, 1 N. Y. App.
Div. 294; 37 N. Y. Supp.
271 808
Franklin Trust Co. v. Ruth-
erford, etc. El. Co., 57 N.
J. Eq. 42; 41 Atl. 488; 58
N. J. Eq. 584 ; 43 Atl. 1098 917,
919, 1012, 1045, 1400
Franz v. Teutonia Bldg. Ass'n,
24 Md. 259 233
Fraser v. Cooper, 21 Ch. D.
718 1592
V. Whalley, 2 Hem. &
Mill. 10 943, 965
Fraser River Mining, etc. Co.
V. Gallagher, 5 Britt. Co-
lumb. 82 647, 928
Eraser's Adm'r v. Richmond,
etc. R. R. Co., 81 Va. 388
1516, 1517
Frayter v. Old Nat. Bank, 101
Fed. 391; 42 C. C. A. 133 810
Frazier v. Ry. Co., 88 Tenn.
138; 12 S. W. 537 6, 1543
■». Simmons, 139 Mass. 531
2 N. E. 112 781
Freckmann v. Supreme Coun-
cil, 96 Wise. 133; 70N. W.
1113 660
Fred Macey Co. v. Macey, 143
Mich. 138; 106 N. W. 722 315,
316, 331
Frederick EI. Light, etc. Co.
V. Mayor, etc. of Frederick
City, 84 Md. 599; 36 Atl.
362; 36 L. R. A. 130 43
Frederick Milling Co. v. Fred-
erick, etc. Co. (S. Dak.),
106 N. W. 298 985, 1374
Freeman v. Appleyard, 32
L. J. Ex. 175 423
V. Machias Water, etc.
Co., 38 Me. 343 161
V. Sea View Hotel Co.,
57 N. J. Eq. 68; 40 Atl.
218 71, 1302
Frellsen v. Strader Cypress
Co., 110 La. 877; 34 So.
857 1276
Freman v. Whitbread, 1 Eq.
266 1156, 1156
Fremont Carriage Co. v.
Thomsen, 65 Nebr. 370;
91 N. W. 376 192, 517, 527
French v. Donohue, 29 Minn.
Ill; 12 N. W. 354 233, 844
V. Fuller, 23 Pick. (Mass.)
108 1120, 1354
V.' Jones, 191 Mass. 522;
78 N. E. 118; 7 L. R. A.
N. s. 525
V. White (Vt.), 62 Atl. 35
1522
690,
793
751
228
104
Ixxxiii
Frenkel v. Hudson, 82 Ala.
158; 2 So. 758; 60 Am.
St. Rep. 736 154, 158
Freon v. Carriage Co., 42 Oh.
St. 30; 51 Am. Rep. 794
Fresno Canal, etc. Co. v.
Warner, 72 Cal. 379; 14
Pac. 37
Frick Co. V. Norfolk, etc. R.
R. Co., 86 Fed. 725; 32 C.
C. A. 31
Fricker v. Americus Mfg., etc.
Co., 124 Ga. 165; 52 S. E.
65 1339, 1343
Fripp V. Chard Ry. Co., 11
Hare 241 1603, 1606
Frishmuth v. Farmers' L. &
T. Co., 107 Fed. 169; 46 C.
C. A. 222 ; s. c. 95 Fed. 5 1487,
1488, 1488, 1488, 1489, 1489,
1489
Fritze v. Equitable Bldg., etc.
Soc, 186 111. 183; 57 N. E.
873 583, 1322
Front St., etc. Ry. Co. v.
Drake, 84 Fed. 257 1568
Frost & Co., S. (1899), 2 Ch.
207 640, 640
Frostburg Mining Co. v. Cum-
berland, etc. R. R. Co., 81
Md. 28; 31 Atl. 698
Frye v. Tucker, 24 111. 180
Fuches V. Hamilton, etc. Pub.
Co., 10 Ont. 497 529,1190
Fudickar v. East Riverside,
etc. Dist., 109 Cal. 29; 41
Pac. 1024
Fugure v. Mutual Society, 46
Vt. 362
Fulgam V. Macon, etc. R. R.
Co., 44 Ga. 597 154, 198, 428
Fuller V. Alexander Hol-
lander & Co., 61 N. J. Eq.
648; 47 Atl. 646; 88 Am.
St. Rep. 456 890, 891, 898, 905,
907
V. Rowe, 57 N. Y. 23 252
107
1378
129.8
586
TABLE OF CASES
[The references are to pages]
Fuller V. Venable, 118 Fed.
543 ; 55 C. C. A. 309 1664, 1665
V. White Feather Re-
ward (1906), 1 Ch. 823 72
Fullerton v. Fordyce, 121 Mo.
1; 25 S. W. 587; 42 Am.
St. Rep. 516 1617
Funsten v. Funsten Co., 67
Mo. App. 559 1300, 1320
Furber v. National Metal Co.,
103 N. Y. Supp. 490 808
Furbush, etc. Co., M. A., v.
Liberty Woolen Mills, 81
Fed. 425 1473
Furdonjee's Case, 3 Ch. D.
264 623
Furness v. Catherham Ry.
Co., 27 Beav. 358 1546
Furness's Estate, 12 Phila.
(Pa.) 130 1446
G
Gabert v. Olcott (Tex.), 22 S.
W. Rep. 286 1608
Gade v. Forest Glen Brick
Co., 165 111. 367; 46 N. E.
286 131, 534
Gaehle's Piano Mfg. Co. v.
Berg, 45 Md. 113 192
Gaff V. Flesher, 33 Oh. St. 107
244
Gaffney v. Colvill, 6 Hill (N.
Y.)567 1128,1268,1268,1286,
1286, 1287, 1287, 1359, 1360
Gage V. Fisher, 5 N. Dak. 297;
65 N. W. 809; 31 L. R. A.
557 1029, 1030
V. Pontiac, etc. R. R. Co.,
105 Mich. 335; 63 N. W.
318 1633
V. Riverside Trust Co.,
156 Fed. 1002 970, 975
Gager v. Paul, 111 Wise. 638;
87 N. W. 875 112.7
Gaines v. Bank of Mississippi,
12 Ark. 769 233
V. Supreme Council, 140
Fed. 978 586
Gaither v. Bauemschmidt
•(Md.), 69 Atl. 425 1286, 1349
Galbraith v. People's Bldg. &
Loan Ass'n, 43 N. J. Law
389 751
V. Shasta Iron Co., 143
Cal. 94; 76 Pac. 901 231, 1221
Galena, etc. R. R. Co. v. Bar-
rett, 95 111. 467 1415
. V. Menzies, 26 111. 121 1515,
1551
Ixxxiv
Gallery v. Nat. Exchange
Bank, 41 Mich. 169; 32
Am. Rep. 149 1296
Galveston City Co. v. Sibley,
56 Tex. 269 430
Galveston Hotel Co. v. Bol-
ton, 46 Tex. 633 607
Galveston R. R. Co. v. Cow-
drey, 11 Wall. 459 1208, 1515,
1534, 1550, 1589, 1590, 1592,
1625
Galvanized Iron Co. v. Wes-
toby, 8 Ex. 17 608
Gamble v. Queens County
Water Co., 123 N. Y. 91;
25 N. E. 201 ; 9 L. R. A. 527
1079, 1080, 1299,
1312, 1400, 1404
Gamewell, etc. Co. v. Fire &
Police, etc. Co., 116 Ky.
759; 76S. W. 862 876
Gansey v. Orr, 173 Mo. 532;
73 S. W. 477 425
Garcin v. Trenton Rubber
Mfg. Co. (N. J.), 60 Atl.
1098 895, 904
Garden City Sand Co. v.
American, etc. Crematory
Co., 205 m. 42; 68 N. E.
724 648
Garden Gully Mining Co. v.
MoLister, 1 A. C. 39 658, 665,
1069, 1163, 1226, 1226, 1231
Gardner v. Butler, 30 N. J.
Eq. 702 1247, 1295, 1316
V. Canadian Mfg. Co., 31
Ont. 488 1310
V. Hope Ins. Co., 9 R. I.
194; 11 Am. Rep. 238 651
V. London, etc. Ry. Co.,
2 Ch. 201 1605, 1676, 1677
Gardner Sav. Bank v. Taber-
Prang Art Co., 189 Mass.
363; 75N. E. 705 459
Garey v. St. Joe Mining Co.
(Utah), 91 Pac. 369 33, 34, 101
Garling v. Baechtel, 41 Md.
305 609
Garmany v. Lawton, 124 Ga.
876; 53 S. E. 669; 110
Am. St. Rep. 207 917, 992,
1073, 1192
Garmire v. Am. Mining Co., 93
111. App. 331 1170, 1250
Garnett v. Richardson, 35 Ark.
144 123, 126, 251, 274
Garretson v. Equitable Mut.
etc. Ass'n, 93 Iowa 402;
61 N. W. 952 331, 1214
TABLE OF CASES
[The references are to pages]
Garretson ■?;. Pacific Crude Oil
Co., 146 Cal. 184; 79 Pac.
838 330
Garrett v. Belmont Land
Co., 94 Tenn. 459; 29 S.
W. 726 392
V. Burlington Plow Co.,
70 Iowa 697; 29 N. W.
395; 59 Am. Rep. 461 109
V. Dillsburg, etc. R. R.
Co., 78 Pa. St. 465 202
V. Kansas City Coal Min.
Co., 113 Mo. 330; 20 S. W.
965; 35 Am. St. Rep. 713 199,
339,632
V. May, 19 Md. 177 1677
Garrison Canning Co. v. Stan-
ley (Iowa), 110 N. W. 171 87,
857, 1329
Gartside v. Silkstone, etc. Co.,
21 Ch. D. 762 401, 401, 1410,
1530, 1532
Gartside Coal Co. v. Maxwell,
22 Fed. 197 245
Garwood v. Ede, 1 Ex.
264 341
Gary v. York Mining Co., 9
Utah 464; 35 Pac. 494 652
Gashwilerr. Willis, 33 Cal. 11;
91 Am. Dec. 607 706, 993,
1193, 1211
Gaskell v. Chambers (No. 3),
26 Beav. 360 1320
Gasquet v. Crescent City
Brewing Co., 49 Fed. 496 649
Gastonia Cotton Mfg. Cq. v.
W. L. Wells Co., 128 Fed.
369; 63C. C. A. Ill 249
Gates V. Boston, etc. R. R.
Co., 53 Conn. 333; 5 Atl.
695 1468, 1671
Gatling Gun Co., Re, 43 Ch.
D. 628 534, 534
Gaty V. HoUiday, 8 Mo. App.
118 806, 806
Gause v. Commonwealth
Trust Co., 106 N. Y. Supp.
288 78, 346, 854
Gauthier, etc. Co. v. Ham, 3
Colo. App. 559; 34 Pac.
484 230
Gavin v. Pacific Coast, etc.
Union (Cal.), 84 Pac. 270 905
Gay V. Kohlsaat, 223 111. 260;
79 N. E. 77 1359
G. E. B., Re (1903), 2 K. B.
340 612, 613
Geisse v. Taylor (1905), 2 K.
B. 658 1546
Gellerman v. Atlas Foundry,
etc. Co. (Wash.), 87 Pac.
1059 433, 584, 918
Gelpcke v. Blake, 19 Iowa
263 525
Gemmell v. Bavis, 75 Md. 546 ;
23 Atl. 1032; 32 Am. St.
Rep. 412 768, 773, 806, 805
811, 1124, 1124, 1134
General Auction, etc. Co. v.
Smith (1891), 3 Ch. 432 1317
General Electric Co. v. La
Grande, etc. Co., 79 Fed. 25 1586
V. La Grande, etc. Co.,
87 Fed. 590; 31 C. C. A.
118 1586
V. West Ashville Imp.
Co., 73 Fed. 386 961, 984
General Exchange Bank, 6
Ch. 818
V. Homer, 9 Eq. 480
773
1320,
1333
1364
922
Ixxxv
General Provident Ass. Co.,
Re, 14 Eq. 507
General South American Co., '
2 Ch. D. 337 1393, 1396
Geneva Mineral Springs Co.
V. Steele, 111 N. Y. App.
Div. 706; 97 N. Y. Supp.
996
Genoa v. Woodruff, 92 U. S.
502 1449, 1460
Gent V. Manufacturers, etc.
Ins. Co., 107 111. 652 278, 280
Gentel v. Raps (1902), 1 K. B.
160 564
George v. Central R. R., etc.
Co., 101 Ala. 607; 14 So.
752 942, 960, 1026, 1063, 1082
V. Nevada Central R. R.
Co., 22 Nevada 228; 38
Pac. 441
George E. Lloyd & Co. v.
Matthews, 223 111. 477; 79
N. E. 172; 7 L. R. A. n. s.
376
George N. Fletcher & Sons
Co. V. Alpena Circuit Judge,
136 Mich. 511; 99 N. W.
748 869, 951, 1401
George Newman & Co. (1895),
1 Ch. 674 83, 1069, 1283, 1321
George Routledge & Sons
(1904), 2 Ch. 474 1418, 1473
George Whitechurch, Ltd., v.
Cavanagh (1902), A C. 117
649, 703, 743, 744^
George's Creek Co. v. Detmold
1 Md. Ch. 371 393, 394
822
1373
TABLE OF CASES
[The references are to pages]
Georgetown College, Pres.,
etc. of, V. Browne, 34 Md.
450 55
Geoi^etown Water Co. v.
Central, etc. Co., 17 Ky.
Law Rep. 1270; 34 S. W.
435; 35 S. W. 636 1221
V. Fidelity Trust, etc. Co.,
117 Ky. 325; 78 S. W. 113 1405,
1424, 1517
Georgia Co. v. Castleberry,
43 Ga. 187 298, 298
Georgia Co-op., etc. Ass'n v.
Borchardt, 123 Ga. 181; 51
S. E. 429 383
Georgia Ice Co. v. Meakin,
70 Ga. 637 279
Georgia Southern, etc. R. R.
Co. V. Mercantile Trust,
etc. Co., 94 Ga. 306; 21 S.
E. 701; 47 Am. St. Rep.
153 ; 32 L. R. A. 208 244, 246,
249, 1401, 1503
Georgia, etc. Ry. Co. v. Bar-
ton, 101 Ga. 466; 28 S. E.
842 1503, 1515
German Aged People's
Home V. Hammerbacker,
64Md. 595; 3 Atl. 678; 54
Am. Rep. 782 853
German Bank v. Stumpf, 6
Mo. App. 17 235
German Date Coffee Co., 20
Ch. D. 169 98
German Ins. Co. v. Strahl, 13
Phila. (Pa.) 512 ' 222
German Land Ass'n v. Schol-
ler, 10 Minn. 331 254, 255
German Nat. Bank v. Ky.
Trust Co., 19 Ky. Law Rep.
361; 40 8. W. 458 772
German Savings Bank v. Des
Moines Nat. Bank, 122
Iowa 737; 98 N. W. 606 1328
V. Renshaw, 78 Md. 475 ;
28 Atl. 281 701, 723, 808, 808
V. Wulfekuhler, 19 Kans.
60 517, 526
German Security Bank v.
Jefferson, 10 Bush (Ky.)
326 769
German Union, etc. Ass'n v.
Sendmeyer, 50 Pa. St. 67 752
Germania Iron, etc. Co. v.
King, 94 Wise. 439; 69
N.W. 181; 36L. R. A. 51
Germania Sangerbund, 12 Pa.
Co. Ct. Rep. 89
603,
605
104
868
1007
1029
1316
183
274,
Ixxxvi
Germantown Passenger Ry.
Co. V. Fitler, 60 Pa. St.
124; 100 Am. Dec. 546 658,
658, 662
Germantown, etc. Ins. Co. v.
Dhein, 43 Wise. 420; 28
Am. Rep. 549
Germer v. Triple State Oil
Co. (W. Va.), 54 S. E.
509
Germicide Co., 65 Hun (N. Y.)
606; 20 N. Y. Supp. 495
Gemsheim v. Central Trust
Co., 61 Hun (N. Y.) 625;
16 N. Y. Supp. 127; 40 N.
Y. St. 967 1662, 1662, 1662,
1663
Gerry v. Bismark Bank, 19
Mont. 191; 47 Pac. 810
Getchell v. Dusenbury
(Mich.), 108 N. W. 723
Getty V. Devlin, 54 N. Y. 403
310, 336
Gettysburg Nat. Bank v.
Brown, 95 Md. 367; 52 Atl.
975 490, 490, 548, 609
Geyer v. Western Ins. Co., 3
Pittsburg (Pa.) 41 571, 770,
773
Geyser-Marion Co. v. Stark,
106 Fed. 558; 45 C. C. A.
467 797, 797, 798
Gibbes v. G. & C. R. R. Co.,
13 S. Car. 228 1457, 1669
Gibbons v. Anderson, 80 Fed.
345 - 1279
V. Mahon, 136 U. S. 549;
10 Sup. Ct. 1057 1144, 1151
Gibbs V. Long Island Bank,
83 Hun (N. Y.) 92; 31
N. Y. Supp. 406 111, 572, 574
775
Gibbs & West's Case, 10 Eq.
312 66, 1245
Gibert v. Washington City,
etc. R. R. Co., 33 Gratt.
(Va.) 586 1449, 1460, 1508,
1586, 1607, 1629, 1670
Gibson v. Barton, L. R. 10
Q. B. 329 1213, 1214, 1227, 1233
V. Goldthwaite, 7 Ala.
281 ; 42 Am. Dec. 592 408, 1371
V. Lenhardt, 101 Pa. St.
522 1423
Giesen v. London, etc. Mge.
Co., 102 Fed. 584; 42
C. C. A. 515 576, 616, 697, 697
Gifford V. Thompson, 115
Mass. 478 1153
TABLE OP CASES
[The references are to pages]
1265
848
381
84
744
1423,
1397
393
663
1517
1671
Gilbert v. Erie BIdg. Ass'n,
184 Pa. St. 554; 39 Atl.
291 723, 808
V. Finch, 173 N. Y. 455;
66 N. E. 133; 93 Am. St.
Rep. 623; 61 L. R. A. 807
V. Hole, 2 S. Dak. 164;
49 N. W. 1
V. Nantucket Bank, 5
Mass. 97
V. Seatco Mfg. Co., 98
Fed. 208
Gilbert's Case, 5 Ch. 559
Gilbough V. Norfolk, etc.
R. R. Co., 1 Hughes 410
1436, 1461
Gilchrist V. CoUopy, 26 Ky.
Law Rep. 1003; 82 S. W.
1018 1010, 1011, 1163, 1250
V. Helena, etc. R. R. Co.,
47 Fed. 593
Gildersleeve v. Wolf Islan
Ry., etc. Co., 3 Ch. Chamber
Rep. (Ont.) 358
Giles V. Hutt, 3 Ex. 18
V. Stanton, 86 Tex. 620;
26 S. W. 615
GilfiUan v. Union Canal Co.,
109 U. S. 401; 3 Sup. Ct. 304
Gilkey v. Paine, 80 Me. 319;
14 Atl. 205 1143, 1145
V. Town of How, 105
Wise. 41 ; 81 N. W. 120 241
Gilkinson v. Third Ave. R. R.
Co.,47N.Y.App.Div.472;
63 N. Y. Supp. 792 712, 751
Gill V. Balis, 72 Mo. 424 525
V. New York Cab Co., 48
Hun (N. Y.) 524; 1 N. Y.
Supp. 202
Gill's Adm'x v. Ky., etc. Min-
ing Co., 7 Bush (Ky.) 635
Gillespie v. City of Glascow
Bank, 4 A. C. 632 795, 813
Gillett V. Dodge (Oreg.), 89
Pac. 741 333
V. Missouri Valley R. R.
Co., 55 Mo. 315; 17 Am.
Rep. 653 870, 870
V. Whiting, 120 N. Y.
402; 24 N. E. 790; s. c.
141N. Y. 71; 35N. E. 939;
38 Am. St. Rep. 762
Gillette v. Aurora Ry. Co.,
228111.261; 81 N. E. 1005
244, 250
Gillig, Mott & Co. V. Inde-
pendent Gold, etc. Co., 1
Nevada 247 24, 25
Gillis V. Bailey, 21 N. H. 149
1248
147
808
243,
1213,
1214
Gilman v. Des Moines, etc.
R. R. Co., 41 Iowa 22
V. Gross, 97 Wise. 224;
72 N. W. 885
V. Illinois, etc. Tel. Co.,
91 U. S. 603
V. Sheboygan, etc. R. R.
Co., 37 Wise. 317
Gilman, etc. R. R. Co. v.
Kelly, 77 111. 426 1331, 1335
Gilman's Case, 31 Ch. D. 420 206
Gilmer v. Morris, 43 Fed. 456
V. Morris, 80 Ala. 78; 60
Am. Rep. 85
Gilpin V. Howell, 5 Pa. St. 41 ;
45 Am. Dec. 720
Ginz V. Stumph, 73 Ind. 209
Gipson V. Morris, 36 Tex. Civ.
App. 593; 83 S. W. 226;
73 Tex. 85 1034, 1057
Girard Ins. Co. v. Cooper, 162
U.S. 529; 16Sup. Ct. 879
Girard Life Ins. Co. v. An-
nuity, etc. Iron Co., 20 Pa.
Sup. Ct. 304
Girard Life Ins., etc. Co. v.
Loving (Kans.), 81 Pac. 200
Girard Trust Co. v. Cooper,
51 Fed. 332; 2 C. C. A. 245
V. McKinley-Lanning,
etc. Trust Co., 143 Fed. 355
V. Mellor, 156 Pa. St.
579; 27 Atl. 662
V. Summit Branch Coal
Co., 22 Pa. Sup. Ct. 495
Gitzhoffen v. Sisters of Holy
Cross Hospital Ass'n
(Utah), 88 Pac. 691 22, 39
Giveen v. Gans, 91 N. Y. App.
Div. 37; 86 N. Y. Supp.
450; 181 N. Y. 538; 73
N. E. 1124 1310, 1313
Given v. Times-Republican
Printing Co., 114 Fed. 92;
52 C. C. A. 40 875
Glasdir Copper Mines (1906),
1 Ch. 365 1614, 1615, 1655,
1656
Glass V. Basin, etc. Mining Co.,
77 Pac, 302; 31 Mont. 21
V. Pioneer Rubber
Works, 31 Vict. L. R. 754
1033, 1330
V. Tipton, etc. Co., 32
Ind. 376 381
Gleadow v. Hull Glass Co., 19
L. J. Ch. 44 1244
1492
166
1516
1632
811
811
418
812
1644
1490
921
1612
1492
804
1416
1163
34,
Ixxxvii
TABLK OF CASES
[The references are to pages]
Gleason v. Canterbury, etc.
Ins. Co., 73 N. H. 583; 64
Atl. 187 1224
GledhiU's Case, 3 DeG. F. &
J. 713 169
Glen V. Breard, 35 La. Ann.
875 47
Glen Iron Works, 17 Fed. 324;
20 Fed. 674 600
Glen Salt Co., 17 N. Y. App.
Div. 234; 45 N. Y. Supp.
568 1019, 1050, 1053
Glengary Consolidated Min-
ing Co. V. Boehmer, 28
Colo. 1; 62 Pac. 839 1082,
1083
771
238
208
624
Glenn v. Abell, 39 Fed. 10
V. Bergman, 20 5to. App.
343
V. Busey, 5 Mack.( D. C.)
233
V. Clabaugh, 65 Md. 65;
3 Atl. 902
V. Hatohett, 91 Ala. 316;
8 So. 656 517, 524
V. Howard, 81 Ga. 383;
8 S. E. 636; 12 Am. St. Rep.
318 614
V. Howard, 65 Md. 40; 3
Atl. 895 623, 623, 624, 793,
1514
V. Liggett, 47 Fed. 472 915,
916, 920, 921
V. Liggett, 135 U. S. 533;
10 Sup. Ct. 867
V. Macon, 32 Fed. 7
V. Marbury, 145 U. S.
499; 12 Sup. Ct. 914
V. Porter, 73 Fed. 275;
19 C. C. A. 503
V. Springs, 26 Fed. 494
V. Williams, 60 Md. 93'
Glenwood Coal Co., 6 Pa. Co.
Ct. Rep. 575
Glenwood Mfg. Co. v. Syme,
109 Wise. 355; 85 N. W.
432 1342, 1342
Globe Blocks Gold Mining Co.,
12 Times L. R. 92 362, 364
Globe Mutual Benefit Ass'n,
iJe, 135N. Y.280; 32 N. E.
122; 17L.R.A. 547
Globe Publishing Co. v. State
Bank, 41 Nebr. 175; 59
N. W. 683; 27 L. R. A.
854
Gloninger v. Pittsburgh, etc.
R. R. Co., 139 Pa. St. 13;
21 Atl. 211
614
614
614
617
921
614
95
120
252
64
Ixxxviii
Glossop V. Glossop (1907), 2
Ch. 370 1182, 1182, 1182, 1367,
1367
Glover v. Giles, 18 Ch. D. 173 222
V. Manila, etc. Milling
Co. (S. Dak.), 104 N. W.
261 944, 959
Gluckstein v. Barnes (1900),
A. C. 240 315, 324, 328, 329
Glucose Sugar Refining Co. v.
American Glucose Sugar
Refining Co. (N. J.), 56 Atl.
861 369, 371, 372
Glymont, etc. Co. v. Toler, 80
Md. 278; 30 Atl. 651 141, 147,
278
Godbold V. Branch Bank, 11
Ala. 191; 46 Am. Dec. 211
1264, 1286
Goddard v. Chicago, etc. Ry.
Co., 202 111. 362; 66 N. E.
1066 25, 25
V. Merchants' Exchange,
9 Mo. App. 290; 78 Mo.
609 565
Godfrey v. McConnell, 151
Fed. 783 1271
V. Ohio, etc. Ry. Co., 116
Ind. 30; 18 N. E. 61 1609
Goetz V. Knie, 103 Wise. 366;
79 N. W. 401 1187
Gogebic Investment Co. v.
Iron Chief Min. Co., 78
Wise. 427; 47 N. W. 726;
23 Am. St. Rep. 417 628
Gold V. Paynter, 101 Va. 714;
44 S. E. Rep. 920 601
Gold Bluff Mining, etc. Corp.
V. Whitlock, 75 Conn. 669;
55 Atl. 175 1006, 1062, 1062,
1164, 1181, 1183
Gold Co., 11 Ch. D. 701 627
Gold Mining Co. v. National
Bank, 96 U. S. 640 866, 868
Gold Reefs of Western Aus-
tralia V. Dawson (1897), 1
Ch. 115 933
Golden Age, etc. Co. v. Lang-
ridge (Colo.), 88 Pac. 1070 1379
Goldshear v. Barron, 42 N. Y.
Misc. 198; 85 N. Y. Supp.
395 1330
Goldsmith v. Swift, 25 Hun
(N. Y.) 201 1150, 1151
Good V. Ash, 3 Keb. 307 401
Good Land Co. v. Cole (Wise.),
110 N. W. 895 117, 120
Goodale Lumber Co. v. Shaw,
41 Greg. 544; 69 Pac. 546 123
TABLE OF CASES
[The references are to pages]
Gooday v. Colchester, etc. Ry.
Co., 17 Beav. 132 281, 283
Goodell V. Verdugo Canon
Water Co., 138 Cal. 308; 71
Pac. 354 1296, 1330
Gooderham v. Toronto, etc.
Ry. Co., 8 Ont. App. Rep.
685 1574
Goodin v. Cincinnati, etc. Co.,
18 Oh. St. 169 1305, 1311, 1332
1333
Goodman v. Am. Writing
Paper Co. (N. J.), 66 Atl.
607 627, 1096, 1096
. V. Cincinnati, etc. R. R.
Co., 2 Disn. (Oh.) 176 1623
Goodwin v. Hardy, 57 Me.
143; 99 Am. Dec. 758 1107,
1131
V. McGehee, 15 Ala. 232 612
V. Ottawa, etc. Ry. Co.,
13 Up. Can. C. P. 254 747, 751
V. Robarts, 1 A. C. 476;
L. R. 10 Ex. 337 1423
V. U. S. Annuity, etc. Co.,
24 Conn. 591 912, 918, 923
V. Wilbur, 104 111. App.
45 340
Goodwin Gas Stove, etc. Co.'s
Appeal, 117 Pa. St. 514; 12
Atl. 736; 2 Am. St. Rep.
696 786
Goodyear's India Rubber
Glove Mfg. Co. V. Goodyear
Rubber Co., 128 U. S. 598;
9 Sup. a. 166 371
Gorder v. Plattsmouth, etc.
Co.,36Nebr.548; 54N.W.
830 407, 1317, 1318
Gordon v. Newman, 62 Fed.
686; 10 C. C. A. 587 1653
V. Parker, 10 La. 56 782
V. Preston, 1 Watts (Pa.)
385; 26 Am. Dec. 75 409, 1080,
1210, 1217, 1218
V. Sea Fire Life Ass. Soc, -
1 H. & N. 599 109, 831, 862,
1409
V. Tweedy, 71 Ala. 202 923
Gordon's Exrs. v. Richmond,
etc. R. R. Co., 78 Va. 501 443,
451, 451, 455, 462, 463
Gorest). Day, 99Wisc.276; 74
N. W. 787 961, 1357
V. Elliott, 108 Wise. 465;
84 N. W. 865 1357
V. Field, 109 Wise. 408;
84 N. W. 867; 85 N. W.
411 1288
Gorman- Wright Co. v. Wright,
134 Fed. 363; 67 CCA
345 422, 963
Gorrissen's Case, 8 Ch. 507 171,
347, 347
Gosden v. Dotterill, 1 Myl. &
K. 56 421
Gosling V. Gaskell (1897), A. C
575 1580
Gottschalk v: Stover, 85 Mo.
App. 566 619
Goulburn Valley Butter, etc.
Co. V. Bank of New South
Wales, 26 Vict. L. R. 351 873,
874
Gould V. Fuller, 79 Minn. 414;
82 N. W. 673 22
V. Head, 41 Fed. 240 751, 752
V. Olympic Min. Co., 49
N. Y. Misc. 612; 96 N. Y.
Supp. 455 908, 908
V. Oneonta, 71 N. Y. 298 428,
— V. W. J. Gould & Co., 134
Mich. 515; 97 N. W. 576
613
1372,
1377
995
187
48,
Goulding v. Clark, 34 N. H.
148 ,
Gourlie v. Chandler, 41 Nova
Scotia 341
Governments Stock Invest-
ment Co. (1891), 1 Ch. 649
136, 383
Governments Stock Invest-
ment Co. (No. 2), (1892), 1
Ch. 597 136, 137
Governments Stock Invest-
ment Co. V. Manila Ry. Co.
(1897), A. C 81 1546, 1548
Gow V. Collin, etc. Lumber
Co., 109 Mich. 45; 66N.W.
676
Gowdy Gas, etc. Co. v. Patti-
son, 29 Ind. App. 261; 64
N. E. 485
Gowen's Appeal, 10 Wkly. N.
Cases (Pa.) 85
Gower's Case, 6 Eq. 77
Goy & Co. (1900), 2 Ch. 149
1426, 1429
Goyer, etc. Co. v. Wildberger,
71 Miss. 438; 15 So. 235 716
Graebner v. Post, 119 Wise.
392; 96 N. W. 783; 100
Am. St. Rep. 890 557, 605
GrafBin v. Robb, 84 Md. 451;
35 Atl. 971 798, 799
Grafflin Co. v. Woodside; 87
Md. 146; 39 Atl. 413 572, 573
237
492
1011
665
1426,
Ixxxix
TABLE OF CASES
[The references are to pages]
381
578
Grafner v. Pittsburg, etc. Ry.
Co., 207 Pa. St. 217; 56
Atl. 426 1238, 1319
Grafton Grocery Co. v. Home
Brewing Co. (W. Va.), 54
S. E. 349
Graftstrom v. Frost Council,
19 N. Y. Misc. 180; 43
N. Y. Supp. 266
Graham v. Birkenhead, etc.
,Ry. Co.,2Mac. &G. 146 73,966
V. Boston, etc. R. R. Co.,
118 U. S. 161; 6 Sup. Ct.
1009 1625, 1637
V. Dubuque Specialty
etc. Works (Iowa), 114
N. W. 619 983, 983
V. First Nat. Bank, 84
N. Y. 393 ; 38 Am. Rep. 528 792
V. House-building, etc.
Ass'n, 52 S. W. 1011
(Tenn.) 580, 582
V. Partee, 139 Ala. 310;
35 So. 1016; 101 Am. St.
Rep. 32 407, 408
V. Piatt, 28 Colo. 421 ; 65
Pac. 30 624
V. Railroad Co., 102 U. S.
148 ■ 1315
V. Van Diemen's Land
Co., 1 H. & N. 541 660, 793,
1002, 1004
Gramophone & Typewriter v.
Stanley (1906), 2 K. B. 856
Granby Mining Co. v. Rich-
ards, 95 Mo. 106; 8 S. W.
246
Grand Central Lodge v. Gro-
gan, 44 111. App. Ill
Grand Lodge v. Graham, 96
Iowa 592; 65 N. W. 837;
31 L. R. A. 133 371, 372, 374
V. Reneau, 75 Mo. App.
402 589
V. Waddill, 36 Ala. 313 86, 857
Grand Rapids, etc. R. R. Co.
V. Sanders, 54 How. Pr.
(N. Y.) 214 1461
Grand Rapids Furniture Co.
V. Grand Hotel, etc. Co., 11
Wyom. 128; 70 Pac. 838;
72 Pac. 687 296, 300, 1186
Grand Rapids Safety Deposit
Co. V. Cincinnati Safe, etc.
Co., 45 Fed. Rep. 671 272, 319
319, 1338, 1339
Grand River Bridge Co. v.
Rollins, 13 Colo. 4; 21 Pac.
897 279, 293
878
219
949
Grand River Colleger. Robert-
son, 67 Mo. App. 329 141
Grand Tower Mfg. Co. v.
UUman, 89 111. 244 1582
Grand Trunk Ry. Co., 88
Fed. 636 1642
V. Central Vermont R.
Co., 78 Fed. 690 1562
V. Central Vermont R.
Co., 81 Fed. 60 1643
V. Central Vermont R.
Co., 81 Fed. 541 1611
V. Central Vermont R.
Co., 88 Fed. 620 1573
V. Ctentral Vermont R.
Co., 88 Fed. 622 1584, 1585
V. Central Vermont R.
Co., 90 Fed. 163 1568
V. Central Vermont R.
Co., 91 Fed. 569 ' 1654
V. Central Vermont R.
Co., 103 Fed. 740 1635
V. Central Vermont R.
Co., 105 Fed. 411 1449, 1453,
1460
Grand Valley, etc. Co. v. Fruita
Imp. Co. (Colo.), 86 Pac.
324 688, 604, 666, 879
Granger v. Bassett, 89 Mass.
462 1157
V. Grubb, 7 Phila. (Pa.)
350 559, 560, 566, 569,
569, 992, 1005, 1011
Grangers' Ins. Co. v. Turner,
61 Ga. 561 182
Grangers' Life, etc. Ins. Co.
V. ICamper, 73 Ala. 325 111,
112, 480, 483
Granite Roofing Co. v.
Michael, 54 Md. 65 629
Grant v. East & West R. R.
Co., 54 Fed. 569; 4C. C. A.
511 645
V. Langstaff, 52 111. App.
128 948
V. Mechanics Bank, 15 S.
& R. (Pa.) 140 774, 775
V. Norway, 10 C. B. 665 739
V. Ross, 100 Ky. 44; 37
S. W. 263 1128
V. Southern Contract Co.,
104 Ky. 781; 47S.W. 1091
— V. United Kingdom,
etc. Co., 40 Ch. D. 135
V. Winona, etc. Ry. Co.,
85Minn.422;89N.W. 60
1127
1310,
1332
1494,
1639, 1639
TABLE OF CASES
[The references are to pages]
Grape Creek Coal Co. v.
Farmers' L. & T. Co., 63
Fed. 891; 12 CCA. 350 1465
1466, 1507, 1625, 1625
Grape Sugar, etc. Co. v.
Small, 40 Md. 395 278, 281
Graton & Knight Mfg. Co. v.
Redelsheimer, 28 Wash.
370; 68 Pao. 879 844
Gratz V. Redd, 4 B. Monr.
(Ky.) 178 1094, 1104, 1105,
1259
Graves ». Colby, 9 Ad. &E. 356 595
V. Mono Lake, etc. Co.,
81Cal.303; 22Pac. 665 1298,
1813, 1317, 1319
Gray v. Christian Soc, 137
Mass. 329; 50 Am. Rep.
310 580, 1003
V. Fuller, 17 N. Y. App.
Div. 29; 44 N. Y. Supp.
883 1285, 1286
1). Monongahela Nav.
Co., 2 Watts & S. (Pa.) 156;
37 Am. Dec. 500 381, 386
V. Portland Bank, 3
Mass. 364; 3 Am. Dec. 156
481, 499, 500, 500, 507, 508
: V. South & North R. R.
Co., 43 So. 859 956, 985, 986
V. Stevenson, 25 Vict. L.
R. 476
V. Stone, 69 L. T. 282
659
771,
771
Graydon's Exrs. v. Graydon,
23 N. J. Eq. 229 424
Graye v. Turnpike Co., 4
Rand. (Va.) 578 229
Great Central Freehold Mines
V. Brandon, 30 Vict. L.
R. 97 992, 1192
Great Falls, etc., Ins. Co. v.
Harvey, 45 N. H. 292 563
Great Falls, etc. R. R. v.
Copp, 38 N. H. 124 650
Great Luxembourg Ry. Co.
V. Magnay, 25 Beav. 586 1316,
1332
Great North of England Ry.
Co. V. Biddulph, 7 M. & W.
243 603
Great Northern Ry. Co. v.
Coal Co-operative Soc.
(1896), 1 Ch. 187 26, 1395
V. Kennedy, 4 Exch.
417 667, 769
Great Northern Salt, etc.
Works, 44 Ch. D. 472 911,
1213
Great North-West Central
Ry. Co. V. Charlebois (1899),
A. C 114 829
Great Western, etc. Mfg. Co.
V. Harris, 128 Fed. 321; 63
C C A. 51 1128
Great Western Ry. Co. v.
Birmingham, etc. Ry. Co.,
2 Phill. 597 283, 951
V. Rushout, 5 DeG. &
Sm. 290 87, 946, 950, 962
Great Western Tel. Co. v.
Bumham, 79 Wise. 47; 47
N. W. 373; 24 Am. St.
Rep. 698 433, 602
V. Gray, 122 111. 630; 14
N. E. 214 614
V. Haight, 49 111. App.
633 191
V. Purdy, 83 Iowa 430;
50N. W. 45; 162 U. S. 329
16 Sup. Ct. 810 614
Great Wheal Polgroth, 49 L.
T. 20 272, 1363
Greater Pittsburg Real Es-
tate Co. V. Riley, 210 Pa.
St. 283; 59 Atl. 1068 208
Greathouse v. Martin (Tex.),
94 S. W. 322 1248, 1316,
1322
Greeley v. Provident Savings
Bank, 98 Mo. 458; 11 S.
W. 980 1617
Green v. Abietine Medical
Co., 96 Cal. 322; 31 Pac.
100 428, 627, 653
V. Barrett, 1 Simons 45 ■ 342
V. Bissell (Conn.), 65
Atl. 1056 1137, 1146
V. Board of Trade, 174
111. 585; 51 N. E. 599; 49
L. R. A. 365 580, 580
V. Coast Line R. R. Co.,
97 Ga. 15; 24S. E. 814; 54
Am. St. Rep. 379; 33 L. R.
A. 806 1568
V. Compton, 41 N. Y.
Misc. 21; 83 N. Y. Supp.
588 974
V. Felton (Ind.), 84 N. E.
166 1080, 1312
V. Grigg, 98 N. Y. App.
Div. 445; 90 N. Y. Supp.
565 238
V. Hedenberg, 159 111.
489; 42N. E. 851; 50 Am.
St. Rep. 178 944, 963
V. London General Om-
nibus Co., 7 C B. N. s. 290 869
TABLE OF CASES
[The references are to pages]
Green w. Seymour, 3 Sandf. Ch.
(N. Y.) 285 1032
Green Mount, etc. Co. v.
Bulla, 45 Ind. 1 700, 750
Green's Case, 18 Ecj. 428 1166
Greenbrier Industrial Exposi-
tion V. Ocheltree, 44 W. Va.
626; 30 S. E. 78 490
V. Rodes, 37 W. Va. 738;
17 S. E. 305 118, 130, 202,
202, 214
Greene v. Buckley, 120 Fed.
955 1356
V. Dennis, 6 Conn. 292 54,
54, 230
V. Dispeau, 14 R. I. 575 803,
811, 811
V. Hereford (Ariz.), 95
Pac. 105 918
V. Middlesborough Town
& Lands Co. (Ky.), 89
S. W. 228; 28 Ky. Law
Rep. 303 84, 97, 851
V. Sigua Iron Co., 88
Fed. 203; 31 C. C. A. 458 706,
706
V. Smith, 17 R. I. 28;
19 Atl. 1081 503, 1152
Greenfield Savings Bank v.
Simons, 133 Mass. 415 1272
Greenleaf v. Ludington, 15
Wise. 558; 82 Am. Dec. 698
732, 732, 756
Greenough v. Alabama, etc.
R. R. Co., 64 Fed. 22 1170,
1170
Greenpoint Co. v. Whitin,
69 N. Y. 328 1011
Greensboro, etc. Turnpike
Co. V. Stratton, 120 Ind.
294; 22 N. E. 247 1244, 1246
Greenville Compress, etc. Co.
V. Planters Compress, etc.
Co., 70 Miss. 669; 13 So.
879; 35 Am. St. Rep. 681 852,
854
Greenville Gas Co. v. Reis, 54
Oh. St. 549; 44N. E. 271 1276,
1277
Greenwell v. Porter (1902), 1
Ch. 530 1029, 1029, 1348
Greenwood v. Algeciras Ry.
Co. (1894), 2 Ch. 205 1645,
1649
V. Freight Co., 105 IT. S.
13 939, 945
Greenwood Ice Co. v. Georgia
Home Ins. Co., 72 Miss.
46; 17 So. 83 1306
Greer v. Chartiers Ry. Co., 96
Pa. St. 391; 42 Am. Rep.
548 164, 166, 170
Gregg V. Granby Mining, etc. .
Co. (Mo.), 65 S. W. 312 6
V. Mercantile Trust Co.,
109 Fed. 220; 48 C. C. A.
318; 124 Fed. 721; 59C. C.
A. 637; 197 U. S. 183; 25
Sup. Ct. 415 1559, 1562, 1567
1567, 1567, 1568
V. Metropolitan Trust
Co., 197 U.S. 183; 25 Sup.
Ct. 415; 109 Fed. 220; 48
CCA. 318; 124 Fed. 721;
59 C C. A. 637 1564
Gregg's Case, 15 W. R. 82 168
Gregory v. Patchett, 33 Beav.
595 966, 975
Gresham v. Island City Sav-
ings Bank, 2 Tex. Civ. App.
52; 21 S. W. 556 650, 749,
751
Greymouth Point, etc. Coal
Co. (1904), 1 Ch. 32 1203
Gridley v. Lafayette, etc. Ry.
Co., 71 111. 200 1237
Grier v. Hazard, Hazard &
Co., 13 N. Y. Supp. 583 293
Grifiin v. Clinton Line, etc. R.
R. Co., 11 Fed. Cas. 27 118,
233, 233, 238, 242
V. Inman, Swann & Co.,
57 Ga. 370 1306
V. Knoblock (Colo.), 77
Pac. 370 713
V. Macon County, 36
Fed. 885; 2 L. R. A. 353 1459
Griffing v. Griffing Iron Co.,
61 N. J. Eq. 269; 48 Atl.
910 1113
V. Griffing Iron Co., 96
Fed. 577 957
Griffing Bros. Co. v. Winfield
(Fla.), 43 So. 687 392, 404,
406
Griffing Iron Co., Re, 63 N. J.
Law Rep. 168; 41 Atl. 931 ;
63 N. J. Law Rep. 357; 46
Atl. 1097 560, 992, 1002,
1006, 1164, 1183, 1183, 1192
Griffith V. Blackwater Boom,
etc. Co., 48 S. E. 442; 55
W. Va. 604; 69 L. R. A.
124; 46 W. Va. 56; 33 S.
E. 125 1300, 1310, 1316
V. Paget, 6 Ch. D. 511 469
Griffiths Cycle Corp., 85 L. T.
675; 85 L. T. 776 1642
TABLE OF CASES
[The references are to pages]
Grimbly v. Harrold, 125 Cal.
24; 57 Pac. 558; 73 Am.
St. Rep. 19
Grimwade v. Mutual Society,
52.L. T. 409
Grissell's Case, 1 Ch. 528
612, 613
Groel V. United Electric Co.,
132 Fed. 252
V. United Electric Co.
(N. J.), 61 Atl. 1061
Groeltz v. Armstrong Real
Estate Co., 115 Iowa 602;
89 N. W. 21
Groh's Sons, M., v. Groh, 80
N. Y. App. Div. 85; 80 N.
Y. Supp. 438
Groton Bridge, etc. Co. v. Am.
Bridge Co., 151 Fed. 871
Grover v. Cavanaugh (Ind.),
82 N. E. 104 163, 184, 448
Grubb V. Mahoning Naviga-
tion Co., 14 Pa. St. 302
Gnibbs-Wiley Grocery Co.,
96 Fed. 183
Gruber v. Washington, etc.
R. R. Co., 92 N. Car. 1
Grundy v. Pine Hill Coal Co.,
10 Ky. Law Rep. 833; 9 S.
W. Rep. 414
Grymes v. Hone, 49 N. Y. 17;
10 Am. Rep. 313
Guarantee Co. v. East Rome
Town Co., 96 Ga. 511; 23
S. E. 503; 51 Am. St. Rep.
150 797, 806, 806, 811, 1131
Guarantee Trust, etc. Co. v.
Philadelphia, etc. R. Co.,
52 N. Y. Supp. 116; 31 N.
Y. App. Div. 511 1561, 1571
Guaranty Trust Co. v. Atlan-
tic Coast El. R. R. Co., 138
Fed. 517; 71 C. C. A. 41 876,
1509, 1509, 1510
V. Chicago, etc. Co., 158
Fed. 1015 1649
' V. Galveston City R. R.
Co., 107 Fed. 311; 46 CCA.
305 451, 451, 1540, 1571, 1572
V. Green Cove, etc. R. R.
Co., 139 U. S. 137; 11 Sup.
Ct. 512 1433, 1593, 1593, 1593
1596
V. North Chicago, etc.
Co., 130 Fed. 801; 65 C C
A. 65
V. Troy Steel Co., 33
N. Y. Misc. 484; 68 N. Y.
Supp. 915
949
1282
612,
975
939
34
1069
866
229
1239
870
1238
712
960
1528
1029
844
Guardian Trust, etc. Co. v.
Fisher, 200 U. S. 57; 26
Sup. Ct. 186 1543, 1552
Guardian Trust Co. v. White
CUffs, etc. Co., 109 Fed.
523 1584, 1593, 1593, 1596,
1600
Guckert v. Hacke, 159 Pa. St.
303; 28 Atl. 249 123, 231,
248, 251, 384
Guernsey v. Cook, 120 Mass.
501
Guffey Petroleum Co. v. Chai-
son TownsiteCo. (Tex.), 107
S. W. 609
Guilford v. Minneapolis, etc.
Ry. Co., 48 Minn. 560; 51
N.W. 658; 31Am. St. Rep.
694 1420, 1423, 1425, 1528
V. Western Union Tel.
Co., 43 Minn. 434; 46 N. W.
70 431, 431
V. Western Union Tel. Co.
59 Minn. 332; 61 N. W.
324; 50 Am. St. Rep. 407 431,
431, 732, 733
Guillaume v. K. S. D. Fruit
Co. (Greg.), 86 Pac. 883 1196
Guinness ?;. Land Corporation,
22 Ch. D. 349 40, 97, 111, 431,
452, 564
Guinzberg v. H. W. Downs
Co., 165 Mass. 467; 43 N.
E. 195; 52 Am. St. Rep. 525
Gulliver v. Roelle, 100 111. 141
Gumaer v. Cripple Creek, etc.
Co. (Colo.), 90 Pac. 81 969, 1203
1205, 1247, 1371
Gump V. Sibley, 79 Md. 165 849
Gund V. Ballard (Nebr.), 103
N. W. 309 1323, 1329
Gunderson v. Illinois Trust,
etc. Bank, 199 111. 422; 6'5
N. E. 326
Gundlach v. Germania, etc.
Inst., 49 How. Pr. (N. Y.)
190
Gunn V. Central R. R. etc. Co.,
74 Ga. 409 79, 870
— ■ — V. London, etc. Fire Ins.
Co.,12C B. N. s. 694 280,284
Gunn's Case, 3 Ch. 40 166
Gunnison Gas & Water Co. v.
Whitaker, 91 Fed. 191
Gunther & Bro. v. Baskett
Coal Co., 107 Ky. 44; 52
S. W. 931
Guriey v. Reed, 190 Mass. 509 ;
77 N. E. 642 683, 711
809
416
984
590
843
1354
TABLE OP CASES
[The references are to pageB]
512
643
1220,
Gumey v. Atlantic, etc. Ry.
Co., 58 N. Y. 358 1567
Custard's Case, 8 Eq. 438 165,
548, 782
Guthrie V. Harkness, 199 U. S.
148; 26 Sup. Ct. 4 894, 896
Gutta Percha Corp., 15 Times
L. R. 183 350, 364, 750
Gutterson v. Lebanon Iron,
etc. Co., 151 Fed. 72 1616
G. V. B. Mining Co. v. First
Nat. Bank, 95 Fed. 23; 36
C. C. A. 633 397, 860
H
Haacke v. Knights of Liberty,
etc. Club, 76 Md. 429; 25
Atl. 422 222, 261
Haas V. Bank of Commerce,
41 Nebr. 754; 60 N. W. 85 229,
231 249
Haas Co., 131 Fed. 232; 65
C. C. A. 218
Habershon's Case, 5 Eq. 286
Hackensack Water Co. v. De
Kay, 36 N. J. Eq. 548
1225, 1408
Hackett v. Multnomah Ry.
Co., 12 Oreg. 124; 6 Pac.
659; 53 Am. Rep. 327 70, 80
V. Northern Pac. Ry. Co.,
140 Fed. 717 457
V. Northern Pac. Ry. Co.,
36 N. Y. Misc. 583; 73
N. Y. Supp. 1087 192, 443, 527,
1190
Hackettstown Nat. Bank v.
Yuenling Brewing Co., 74
Fed. 110; 20 C. C. A. 327 1527,
1672
Hadden v. Linville, 86 Md.
210; 38 Atl. 37, 900 1373, 1381
Haden v. Farmers', etc. Fire
Ass'n, 80 Va. 683
Hadleigh Castle Gold Mines
(1900), 2 Ch. 419
Hadley &'Co. v. Hadley, 77
L. T. 131
Haebler v. N. Y. Produce
Exchange, 149 N. Y. 414;
44 N. E. 87
Hagar v. Union Bank, 63 Me.
509 773, 1122, 1124
Hager v. Cleveland, 36 Md.
476 608, 913, 915
Hagerman v. Ohio Bldg. etc.,
Ass'n, 25 Oh. St.- 186 119, 248,
557, 581, 590, 595, 624
592
1058
1310
581
Hagerstown Mfg. Co. v. Keedy,
91Md. 430; 46 Atl. 965
Hagerstown Turnpike Road
Co. V. Creeger, 5 H. & J.
(Md.) 122; 9 Am. Dec. 495
844,
1306
230,
380
Haggert Bros. Mfg. Co., 19
Ont. App. 582 199, 203, 204,
614
Hahn's Appeal, 7 Atl. Rep.
482 (Pa.) 490
Haines v. Kinderhook, etc.
Ry. Co., 33 N. Y. App. Div.
154; 53 N. Y. Supp. 368 1050,
1053, 1054, 1054, 1176
Haines Mercantile Co. v.
Highland Gold Mines Co.
(Oreg.), 88 Pac. 865 884
Hair v. Burnell, 106 Fed. 280 429,
716, 750
Halbert v. San Saba, etc.
Ass'n (Tex.), 34 S. W. 636 120
Hale V. Burlington, etc. Ry.
Co., 13 Fed. 203 1542
V. Cheshire R. R. Co.,
161 Mass. 443; 37 N. E. 307
V. Frost, 99 U. S. 389
470
1566,
1572
V. Henkel, 201 U. S. 43;
26 Sup. a. 370 891, 891
V. Mason, 160 N. Y. 561 ;
55 N. E. 202 1270
1). Nashua, etc. R.R. Co.,
60 N. H. 333 1493, 1493, 1586,
1640
Haley v. Halifax Street Ry.
Co., 25 Nova Scotia L. R.
140 1603, 1607
Halifax Sugar Refining Co. v.
Francklyn,59 L. J. Ch. 591 1198,
1199, 1222
Hall V. Alabama, etc. Imp.
Co., 143 Ala. 464; 39 So.
385
V. Carey, 5 Ga. 239
V. Henderson, 126 Ala.
449; 28 So. 531; 85 Am. St.
Rep. 53; 61 L. R. A. 621
520, 520, 1276, 1276
V. Herter Bros., 83 Hun
19; 31N.Y. Supp. 692; 90
Hun 280; 35 N. Y. Supp.
769; 157 N. Y. 694; 51
N. E. 1091 290, 297
V. MuUanphy Planing
Mill Co., 16 Mo. App. 454 1542
V. Nieukirk (Idaho), 85
Pac. 485 959
518
915
518,
TABLE OF CASES
[The references are to pages]
Hall V. Old Talaigooh Lead
Mining Co., 3 Ch. D. 749 183
V. Publishing Co., 180 Pa.
St. 561; 37 Atl. 106 1224
V. Rose Hill, etc. Road
Co., 70 111. 673 739
V. Sullivan R. R. Co., 1
Brunner Coll. Cas. 613; 11
Fed. Cas. 257 1521, 1584, 1584,
1635
V. U. S. Ins. Co., 5 Gill
(Md.) 484 604, 612, 767, 771
V. Vermont, etc. R. R.
Co., 28 Vt. 401 278, 293, 1237,
1246
V. Wagner, 111 N. Y.
App. Div. 70; 97 N. Y.
Supp. 570 727,727
Hall & Co., A. W., 37 Ch. D.
712 647, 648
Hall Mfg. Co. V. Am. Ry.
Supply Co., 48 Mich. 331 852
HaU's Case, S Ch. 707 524, 663,
664
Hall's Safe Co. v. Herring-
Hall-Marvin Safe Co., 146
Fed. 37; 76 C. C. A. 495 377
Hallam v. Indianola Hotel Co.,
56 Iowa 178; 9 N. W. Ill 1324,
1344
Hallenborg v. Corre Grande
Copper Co. (Ariz.), 74 Pac.
1052 958
Hallett, Ex parte, 1 Manson
380 793
Hallmark's Case, 9 Ch. D.
329 1276
Hallowell, etc. Bank v.
Hamlin, 14 Mass. 178 925
Halpin v. Mutual Brewing
Co., 20 N. Y. App. Div. 583;
47 N. Y. Supp. 412 1166, 1180
Halsey v. Ackerman, 38 N. J.
Eq. 501 1259
Halstead v. Dodge, 1 How.
Pr. N. s. (N. Y.) 170 1227, 1359
Hambleton v. Central Ohio
R. R. Co., 44 Md. 551 736, 738,
742 759
V. Glenn, 72 Md. 351 ; 20
Atl. 121 602
V. Glenn, 72 Md. 331 ; 20
Atl. 115 602, 606, 613, 613
V. Rhind, 84 Md. 456;
36 Atl. 597 ; 40 L. R. A. 2 16 277
Hambro v. Hull, etc. Fire Ins.
Co.,3H. &N. 789 379
Hamburger v. Miller, 48 Md.
317 403
Hamill v. Royal Arcanum, 152
Pa. 537; 25 Atl. 645 919
Hamilton v. Clarion, etc.
R. R. Co., 144 Pa. St. 34;
23 Atl. 53; 13 L. R. A. 779 250
V. Desjardins Canal Co.,
1 Grant (Can.) 1 932, 943
V. Grant, 30 Can. Sup.
Ct. 566
V. Smith, 5 Jur. n. s. 32
Co.
696
275,
276
173
V. Vaughan, etc.
(1894), 3 Ch. 589
Hamilton, etc. Co. v. Rice, 7
Barb. (N. Y.) 157 208, 607, 914
Hamilton Nat. Bank v.
American Loan, etc. Co.,
66 Nebr. 67; 92 N. W. 189 37,
383
Hamilton Road Co. v. Town-
send, 13 Ont. Rep. 534 117, 120,
120, 221
Hamilton Trust Co. v. Clemes,
17 N. Y. App. Div. 152; 45
N.Y. Supp. 141; 163 N.Y.
423; 57 N. E. 614 152, 1175,
1225, 1499
1176
1510
1509
1210
1564
Hamilton's Case, 8 Ch. 548
Hamlin v. European, etc. Ry.
Co., 72 Me. 83
V. Jerrard, 72 Me. 62
V. Toledo, etc. R. R. Co.,
78 Fed. 664; 24 C. C. A.
271 ; 36 L. R. A. 826 415, 450,
450, 451, 451, 452, 469, 474,
977, 984, 1028
V. Union Brass Co., 68
N. H. 292; 44 Atl. 385
Hammerly v. Mercantile
Trust, etc. Co. 123 Ala.
596; 26 So. 646
Hammock v. Loan & Trust
Co., 105 U. S. 77 1496, 1627,
1630
Hammond v. Edison Illumi-
nating Co., 131 Mich. 79;
90 N. "W. 1040; 100 Am.
St. Rep. 582 499, 500, 507
V. Hastings, 134 U. S.
401; 10 Sup. Ct. 727 680, 770,
773
V. Port Royal, etc. Ry.
Co., 15 S. Car. 10 1632
V. Straus, 53 Md. 1 160, 219,
220 921
, Be, 139 Fed. 898 998, 1035
Hamor v. Taylor-Rice En-
gineering Co., 84 Fed. 392 518,
518, 520
TABLE OF CASES
[The references are to pages]
1221
82
249
620
1568
847
1134
1312
1659
1614
Hampshire Land Co. (1896),
2 Ch. 743
Hampson v. Price's Patent
Candle Co., 45 L. J. Ch. 437
Hampton v. Clinton Co., 65
N.J. Law 158; 46 Atl. 650
V. Foster, 127 Fed. 468
V. Norfolk, etc. Ry. Co.,
127 Fed. 662
Hamsher v. Hamsher, 132 111.
273; 23 N. E. 1123
Hanchett v. Blair, 100 Fed.
817; 41 C. C. A. 76 875, 1081,
1083
Hancock v. Clark, 68 Vt. 302;
36 Atl. 317
V. Holbrook, 40 La. Ann.
53; 3 So. 351
V. Toledo, etc. R. R. Co.,
9 Fed. 738
Hand v. Blow, 82 L. T. 750
V. Evans Marble Co., 88
Md. 226; 40 Atl. 899 298, 298
V. Savannah, etc. R. R.
Co., 21 S. Car. 162 1591
V. Savannah, etc. R. R.
Co., 12 S. Car. 314 1535, 1670
V. Savannah, etc. R. R.
Co., 17 S. Car. 219 1456, 1640,
1643, 1670
Handley v. Stutz, 139 U. S.
417; 11 Sup. Ct. 530 492, 627,
628, 630, 630, 911, 1006, 1009
Handy v. Cleveland, etc. R. R.
Co., 31 Fed. 689 1602, 1618
Hankins v. Newell (N. J.), 66
Atl. 929 1041, 1249
Hanly, Ex parte, 41 Ch. D. 215 278,
295
Hanna v. Lyon, 179 N. Y. 107;
71 N.'E. 778 944, 962, 974
V. People's Nat. Bank, 71)
N. Y. App. Div. 224; 78
N. Y. Supp. 516; 76 N. Y.
Supp. 224 1282, 1350
V. State Trust Co., 70
Fed. 2; 16 CCA. 586; 30
L. R. A. 201 1650, 1650, 1650,
1651
Hannan's King Mining Co.,
14 Times L. R. 314 764, 764
Hanson v. Little Sisters of the
Poor, 79 Md. 434; 32 Atl.
1052; 32 L. R. A. 293'
V. Minnesota Scandina-
vian, etc. Ass'n, 59 Minn,
123; 60 N. W. 1091
Hapgoods V. Lusch, 107 N. Y,
Supp. 331
847
590
175
890
1201
495
1210
621
1259
Harbaugh v. Middlesex Secu-
rities Co., 110 N. Y. App.
Div. 633; 97 N. Y. Supp.
350
Harben v, Phillips, 23 Ch. D.
14 1040, 1042, 1058, 1194,
1207, 1230, 1251
Hardin v. Iowa Ry., etc. Co.,
78 Iowa 726; 43N.W.543;
6 L. R. A. 52
Hardin County v. Louisville,
etc. R. R. Co., 92 Ky. 412;
17 S. W. 860
Harding v. American Glucose
Co., 182 111. 551; 55 N. E.
577; 74 Am. St. Rep. 189;
64 L. R. A. 738 940, 951
V. Vanderwater, 40 Cal.
77
Hardoon v. Belilios (1901),
A. C 118
Hardy v. Metropolitan Land
Co., 7 Ch. 427
Hare v. L. & N. W. Ry. Co.,
Johns. 722 729, 962, 968
Harpending v. Dutch Church,
16 Pet. 455 848
V. Munson, 91 N. Y. 650 1324,
1344, 1636, 1636
Harper v. Smith, 93 N. Y.
App. Div. 608; 87 N. Y.
Supp. 516
Harpold v. Stobart, 46 Oh. St.
397; 21N. E. 637; 15 Am.
St. Rep. 618
Harriman v. Northern Secu-
rities Co., 197 U. S. 244; 25
Sup. a. 493
V. Southam, 16 Ind. 190
V. Wobum Electric
Light Co., 163 Mass. 85; 39
N. E. 1004 1496, 1503
Harrington v. Victoria, etc.
Dock Co., 3 Q. B. D. 549
Harris v. Bank of Mobile, 5
La. Ann. 538
V. Franklin Bank, 77 Md.
423; 26 Atl. 523
— — V. Gateway Land Co.,
128 Ala. 652; 29 So. 611
599, 614
V. Independence Gas
Co. (Kans.), 92 Pac. 1123
1063
699
542
244
320
717
810
250,
V. Leming Harris, etc.
Works, 43 S. W. Rep.
(Tenn.) 869
V. McGregor, 29 Cal. 124
858,
867
1247
103,
103, 104, 246
TABLE OF CASES
[The references are to pages]
Harris v. Muskingum Mfg. Co.,
4 Blackf. (Ind.) 267; 29
Am. Dec. 372 383, 1078
V. Quincy, etc. Ry. Co.
(Mo.), 101 S. W. 601 1609, 1609
V. Runnels, 12 How. 79 864
V. San Francisco Sugar
Ref. Co., 41 Cal. 393 497, 1111,
1119
V. Stevens, 7 N. H. 454 1135
V. Union Pac. Ry. Co., 13
Fed. 522 1342
V. Youngstown Bridge
Co., 90 Fed. 322; 33 C. C. A.
69; 93 Fed. 355; 35 CCA.
341 1535, 1536, 1537, 1537, 1628
Harris's Appeal, 12 Atl. Rep.
743 (Pa.) 804
Harris's Case, 7 Ch. 587 167, 1216
Harrison v. Annapolis, etc.
R. R. Co., 50 Md. 490 1496
■ V. Heathorn, 6 Man. &
Gr. 81 7
V. Mexican Ry. Co., 19
Eq. 358 439, 441, 441, 442
V. Morton, 83 Md. 456;
35 Atl. 99 915, 916, 916
V. Piyse, Barnard. Ch.
324 757
V. Remington Paper Co.,
140 Fed. 385; 72 CCA. 405 921
V. St. Etienne Brewery
Co. (1893), W. N. 108 1514,
1599
V. Thomas, 112 Fed. 22;
50 C C A. 98 941, 1259, 1316,
1316
V. Union Trust Co., 144
N. Y. 326; 39 N. E. 353 1493
V. Vermont Manganese
Co., 1 N. Y. Misc. 402; 20
N. Y. Supp. 894 278
, Ex parte, 69 L. T. 204 350,
364
, Ex parte, 28 Ch. D. 363 767,
767, 793
Harrison's Case, 3 Ch. 633 166
, 6 Ch. 286 766
Harrod v. Hamer, 32 Wise.
162 123, 127, 220
Harrogate's Estates (1903), 1
Ch. 498 1396, 1497
Harrold v. Plenty (1901), 2
Ch. 314 805, 809
Hart V. American Cotton Co.,
41 N. Y. Misc. 436; 84
N. Y. Supp. 1065 890
V. Evanson (N. Dak.),
105 N. W. 942 1357, 1357
g xc
Hart V. Frontino Gold Mining
Co., L. R. 5 Ex. Ill 736, 742, 742
V. Globe Ins. Co., 113
Fed. 307 620
V. Ogdensburg. etc.
- R. R. Co., 89 Hun (N. Y.)
316; 35 N. Y. Supp. 566 968,
1312
V. Seymour, 147 Jll. 598;
35 N. E. 246 254
V. St. Charles St. R. R.
Co., 30 La. Ann. 758 504, 507
Hart's Case, 6 Eq. 512 173
Harter v. Eltzroth, 111 Ind.
159; 12N.E. 129 784
Hartford v. Co-operative
Homestead Co., 128 Mass.
494 590
Hartford, etc. R. R. Co. v.-
Croswell, 5 Hill (N. Y.) 383 610
Hartley v. Pioneer Iron
Works, 181 N. Y. 73; 73
N. E. 576 523, 523
Hartley's Case, 10 Ch. 167 642
Hartman v. Pennsylvania
Range Boiler Co., 24 Pa.
Co. a. Rep. 324 222
Hartridge v. Rockwell, R. M.
Charlt. (Ga.) 260 509, 517, 522
Harts V. Brown, 77 111. 226 1317,
1317, 1344, 1344
Hartt V. Harvey, 32 Barb. 55
(N. Y.) 1057, 1058, 1065, 1250
Harvard College v. Amory, 9
Pick. (Mass.) 446 413, 1091,
1143
Harvey v. Board of Trustees,
142 Cal. 391; 75 Pac. 1086 398
V. Grand Lodge, 50 Mo.
App. 472 593, 663
V. Linville Improvement
Co., 118 N. Car. 693; 24
S. E. 489; 54 Am. St. Rep.
749 1052
V. Schuylkill Real Es-
tate, etc. Co., 24 Pa. Co. Ct.
Rep. 593 592
V. West Side Elevated
(Patented) Ry. Co., 13 Hun
(N. Y.) 392 1379
Harvey-Watts Co. v. Wor-
cester Umbrella Co. (Mass.),
78 N. E. 886 645
Harwood v. Railroad Co., 17
Wall. 78 1637, 1637
Hasbrouck v. Rich, 113 Mo.
App. 389; 88 S. W. 131 1552
V. Vandevoort, 4 Sandf.
(N. Y.) 74 803, 811
TABLE OF CASES
[Tj^ references are to pages]
Eascard v. Somany, Freem.
504 1011, 1202, 1203
Hasenritter v. Kirchhoffer, 79
Mo. 239 235
Haskell v. Read, 68 Nebr. 107 ;
93 N. W. 997; 96 N. W. »
1007 1022, 1056, 1250
V. Worthington, 94 Mo.
560; 7 S. W. 481 98, 185, 214,
214, 607
Haskins v. Albany, etc. Ry.
Co., 74N. Y. App. Div. 31;
76 N. Y. Supp. 667 1448
Haslett V. Wotherspoon, 2
Rich. Eq. (S. Car.) 395 297, 309
Hassall v. Wilcox, 130 U.
S. 493; 9 Sup. Ct. 590
Hasselman v. TJ. S. Mtge. Co.,
97 Ind. 365
Hastings v. Blue Hill, etc.
Corp., 9 Pick. (Mass.) 80
V. Brooklyn Life Ins. Co.,
138N.Y.473; 34N.E.289
1542,
1552
237
1225,
1226
1377,
1381
1127
V. Drew, 76 N. Y. 9
Hastings Lumber Co. v. Ed-
wards, 188 Mass. 587; 75
N. E. 57 606, 1190
Hastings, Re, 105 N. Y. Supp.
834 901
, 106 N. Y. Supp. 938 901
Hatch V. City Bank, 1 Rob.
(La.) 470 894, 897, 905
V. Coddington, 95 U. S.
48 67
V. Dana, 101 U. S. 205 600
V. Lucky Bill Mining Co.,
25 Utah 405; 71 Pac. 865 1185,
1210
Hatcher v. Toledo, etc. R. R.
Co., 62 111. 477 1522
Hattersley v. Earl of Shel-
bume, 31 L. J. Ch. 873 87, 931,
951, 965
Haun V. Mulberry, etc. Co., 33
Ind. 103 607
Hause v. Mannheimer, 67
Minn. 194; 69 N. W. 810 248
Havana Electric Ry. Co. v.
Central Trust Co., 107 N. Y.
Supp. 680 1557
Havemeyer v. Havemeyer, 43
N.Y. Sup. Ct. 506 1029
V. Havemeyer, 45 N. Y.
Sup. Ct. 464 1030
V. Havemeyer, 86 N. Y.
618 1030
Haven v. Adams, 4 Allen
(Mass.) 80 1549
V. Emery, 33 N. H. 66 1486
V. Grand Junction, etc.
Co., 109 Mass. 88 1449, 1451,
1456
Haven Gold Mining Co., 20
Ch. D. 151 98
Havens v. Bank of Tarboro,
132 N. Car. 214; 43 S. E.
639; 95 Am. St. Rep. 627 731,
739, 741
V. Hoyt, 6 Jones Eq.
(N. Car.) 115 1312
Hawes v. Anglo-Saxon Petro-
leum Co., 101 Mass. 385 147,
149 150 417
V. Oakland, 104 U. S. 450 '945,
970
Hawkeye Co. v. Bank, 157
Fed. 253 294
Hawkins v. Citizens Real Es-
tate, etc. Co. (Oreg.), 64
Pac. 320 189, 613
V. Glenn, 131 U. S. 319;
9 Sup. Ct. 739 614, 620
V. Maltby, 4 Ch. 200 782
Hawley v. Gray Bros., etc.
Co., 106 Cal. 337; 37 Pac.
609 1382
V. Upton, 102 U. S. 314 154,
154, 166, 167, 198,
615, 628
Hax V. Davis Mill Co., 39 Mo.
App. 453 1202, 1205, 1223,
1248
Hay V. Swedish, etc. Ry. Co.,
5 Times L. R. 460 1674
V. Swedish, etc. Ry Co.,
8 Times L. R. 775 1612
V. Washington, etc. R.
• R. Co., 4 Hughes 327 1638 .
Hay's Case, 10 Ch. 593 1333,
1337, 1340, 1340
Haycraft Gold Reduction,
etc. Co. (1900), 2 Ch. 230
996,
1209
Hayden v. Atlanta Cotton
Co., 61 Ga. 233
V. Brown, 94 Fed. 15
V. Charter Oak Driving
Park, 63 Conn. 142; 27 Atl.
232
V. Official Hotel Red
Book Co., 42 Fed. 875 1310, 1313
V. Thompson, 36 U. S.
App. 361; 71 Fed. 60; 17
C. C. A. 592 1128, 1129, 1129,
1259
922
1259
735
TABLE OF CASES
[The references are to pages]
Hayden v. Williams, 96 Fed.
279; 37 C. C. A. 479 912, 920,
1128
Hayes v. Columbus, etc. Ry.
Co., 67 Fed. 630 1616
V. Fidelity Ins., etc. Co.,
105 Fed. 160 621
V. Jasper Land Co.
(Ala.), 41 So. 909 959
V. Morgan's La., etc. Co.,
117 La. 593; 42 So. 150 6
V. Pierson, 65 N. J. Eq.
353;45Atl.l091;58Atl.728 1315
V. Shoemaker, 39 Fed.
319 616, 695
V. Stirling, 14 Ir. C. L.
Rep. 277 341, 342
Haynes v. Brown (Okl.), 89
Pac. 1124 689, 781
Hays V. Franklin Co. Lumber
Co.,35Nebr.511; 53N.W.
381 661
V. Pittsburgh, etc. R. R.
Co., 38 Pa. St. 81 173, 603
Hayt, iJe, 39 N. Y. Misc. 356;
'79 N. Y. Supp. 845 430
Hayward v. Leeson, 176 Mass.
310; 57 N. E. 656; 49
L. R. A. 725' 320, 320, 326, 328,
329, 330, 1338, 1338, 1339
V. Pilgrim Society, 21
Pick. (Mass.) 270 913
Haywood v. Lincoln Lumber
Co., 64 Wise. 639; 26N.W.
184 958, 1299, 1315
Hazard v. Durant, 11 R. L
195 937, 939, 944, 955
Hazeltine v. Belfast, etc. R.
R. Co., 79 Me. 411; 10 Atl.
328; 1 Am. St. Rep. 330 464,
466, 1104
Hazelton Boiler Co. v. Hazel-
ton Tripod Boiler, Co. 137
lU. 231; 28 N. E. 248 371
V. Hazelton Tripod
Boiler Co., 142 111. 494; 30
N. E. 339 377
Hazlehurst v. Savannah, etc.
R. R. Co., 43 Ga. 13 76, 440,
558, 1169
Head v. Providence Ins. Co.,
2 Cranch 127 394, 827
, Ex parte, 15 L. T. 262 782,
787
Heald v. Owen, 79 Iowa 23;
44 N. W. 210 253
Heard v. Eldridge, 109 Mass.
258; 12 Am. Rep. 687 1091,
1155
Hearst v. Putnam Mining Co.,
28 Utah 184; 77 Pac. 753;
107 Am. St. Rep. 698; 66
L. R. A. 784 972, 981
Heart v. State Bank, 2 Dev.
Eq. (N. Car.) Ill 744, 768
Heartt v. Sherman, 82 N. E.
417(111.) 1171
Heaston v. Cincinnati, etc.
R. R. Co., 16 Ind. 275; 79
Am. Dec. 430 202, 604
Heath v. Erie Ry. Co., 8
Blatchf. 347 949, 962, 1354
V. Silverthom,etc.Co.,39
Wise. 146 161, 1009, 1022, 1023
Hebb's Case, 4 Eq. 9 167
Hebberd v. Southwestern
Land Co., 55 N. J. Eq. 18;
36 Atl. 122 1404
Hebgen v. KoefBer, 97 Wise.
313; 72 N. W. 745 313, 316
Hecht, Liebmann & Co. v.
Phoenix Woolen Co., 121
Fed. 188 172
Heck V. Bulkeley (Tenn.), 1
S. W. 612 1123
V. McEwen, 12 Lea
(Tenn.) 97 113, 253
Heckman's Estate, 172 Pa.
St. 185; 33 Atl. 552 291, 310
Hecla, etc. Mining Co. v.
O'Neill, 19 N. Y. Supp. 592 282,
289, 303
Hedges v. Paquett, 3 Oreg. 77 1320,
1325
Heggie v. People's Bldg. &
Loan Ass'n, 107 N. Car.
581; 12 S. E. 275 518
Heights of Maribymong Es-
tate Co., 22 Vict. L. R. 432 700,
782
Heineman v. Marshall, 117
Mo. App. 546; 92 S. W.
1131 1337
Heinig v. Adams, etc. Mfg.
Co., 81 Ky. 300 128
Heinze v. South Green Bay,
etc. Co., 109 Wise. 99; 85
N. W. 145 1224, 1382
Heinzelman v. Druids Relief
Ass'n, 38 Minn. 138; 36
N. W. 100 558, 560, 914, 1032
Heironimous v. Sweeney, 83
Md. 146; 34 Atl. 823; 55
Am. St. Rep. 333; 33
L. R. A. 99 63, 853
Helton V. Waverly Hydro-
pathic Co., 4 Rettie Sc. 830 1068,
1221
TABLE OF CASES
[The references are to pages]
Heller v. Nat. Marine Bank,
89 Md. 602; 43 Atl. 800;
73 Am. St. Rep. 212; 45 L.
R. A. 438 425, 455, 1398
Hellman v. Forty-second St.,
etc. R. R. Co., 74 Hun 529;
26 N. Y. Supp. 553; 148
N. Y. 727; 42 N. E. 723 740
V. Pennsylvania Electric
Vehicle Co. (N. J.), 67 Atl.
834
Helm V. Swiggett, 12 Ind. 194
469
752,
775
Helmore v. Smith (No. 2), 35
Ch. D. 449 1620
Helping Hand Marriage
Ass'n, 15 Phila. 644 117, 267
Hemenway v. Hemenway, 134 '
Mass. 446 1444, 1445, 1446
V. Hemenway, 181 Mass.
408; 63 N. E. 919 1092, 1144,
1154
Heminway v. Heminway, 58
Conn. 443; 19 Atl. 766 897
Hempfling v. Burr, 59 Mich.
294; 26 N. W. 496 808
Hendee v. Pinkerton, 14 Allen
(Mass.) 381 1187, 1189
Henderson v. Bank of Aus-
tralasia, 40 Ch. D. 170 82, 82
V. Bank of Australasia,
45 Ch. D. 330 954, 1004, 1004,
1034, 1034, 1056
V. Lacon, 5 Eq. 249 162
V. Royal British Bank,
7 E. & B. 356
V. Virden Coal Co., 78
111. App. 437 .
V. Walker, 55 Ga. 481
, Ex parte, 19 Beav. 107
Henderson Woolen Mills v.
Edwards, 84 Mo. App. 448
Hendon v. North Carolina
R. R. Co., 127 N. Car. 110;
37 S. E. 155
V. North Carolina R. R.
' Co., 125 N. Car. 124; 34
S. E. 227
Hendricks v. Montagu, 17 Ch.
D. 638
Hendrickson v. Bradley, 85
Fed. 508 ; 29 C. C. A. 303 938, 980
Hendrie, etc. Mfg. Co. v.
Parry (Colo.), 86 Pac. 113
Hennell v. Strong, 25 L. J. Ch.
407
Hennesey v. Muhleman, 40
N. Y. App. Div. 175; 57
N. Y. Supp. 854 1188
925
847
1619
1223
309
430
430
373
1640
815
298
338
458
588
1246
1246
306
1581
226
Hennessy v. Griggs, 1 N. Dak.
52; 44 N. W. 1010
Henriech v. Lidberg, 105 111.
App. 495
Henry v. Great Northern Ry.
Co., 1 DeG. & J. 606
V. Jackson, 37 Vt. 431
V. Michigan Sanitarium,
etc. Ass'n (Mich.), 110
N. W. 523
V. Rutland, etc. R. R.
Co., 27 Vt. 435
V. Simanton, 64 N. J. Eq.
572; 54 Atl. 153
Henry Pound, Son & Hutch-
ins, 42 Ch. D. 402
Herald Shoe Co. v. Okla-
homa Pub. Co. (Okl.), 79
Pac. Ill
H. E. Randall, Ltd. v.
British & American Shoe
Co. (1902), 2 Ch. 354 387, 387
Herbert v. Kenton, etc. Ass'n,
74 Ky. 296 563
Herbert Kraft Co. v. Bank of
Orland, 133 Cal. 64; 65
Pac. 143 665, 666, 754, 807
Hercules Oil Ref. Co. v.
Hocknell (Cal.), 91 Pac.
341
Hercules Mut. Life Ass. Soc,
12 Fed. Cas. 12
Hercynia Copper Co. (1894),
2 Ch. 403
Herdegen v. Cotzhausen, 70
Wise. 589; 36N.W.385 744,771
Hereford Waggon Co., Re, 2
Ch. D. 621 293, 335
Heritage, Ex -parte, 9 Eq. 5 705, 705
Herman v. Rhode, 34 Hun
(N. Y.) 161
V. Supreme Lodge, 66
N. J. Law 77; 48 Atl.
1000
Hermann v. Hodges, 16 Eq.
18
V. Maxwell, 47 N. Y.
Sup. a. 347
Heme Bay Waterworks Co.,
10 Ch. D. 42
Herrick v. Humphrey Hard-
ware Co. (Nebr.), 103 N. W.
685 744, 753, 768
Herring v. New York, etc.
R. R. Co., 105 N. Y. 340;
12 N. E. 763
V. Ruskin, etc. Ass'n
(Tenn.), 52 S. W. Rep. 327
1280
23
1172
1250
923
1415
806
1683
1598
571,
572, 573
TABLE OP CASES
[The references are to pages]
Herring-Hall-Marvin Co. v.
Hall's Safe Co., 208 U. S.
554 377, 388
Herrington v. Lisbon, 47 Iowa
H 1210
Hersey v. Tully, 8 Colo. App.
110; 44 Pac. §54 306, 307
V. Veazie, 24 Me. 9; 41
Am. Dec. 364 928, 944, 974
Hershey v. Welch, 96 Mian.
145; 104 N.W. 821 810
Heslin v. Eastern Bldg., etc.
Ass'i, 28 N. Y. Misc. 376;
59 N. Y. Supp. 572 577
Hess V. Sloane, 66 N. Y. App.
Div. 522; 73 N. Y. Supp.
313; 173 N. Y. 616; 66
N. E. 1110 85
V. Tnimbo, 27 Ky. Law
Rep. 320; 84 S. W. 1153 648
Hess Manufacturing Co., 23
Can. Sup. Ct. 644; 21 Ont.
App. 66 272, 322, 634
Heuer v. Carmichael, 82 Iowa
288; 47 N. W. 1034 108, 253
Hewel V. Hogin (Cal.), 84 Pac.
1002 1450
Hewitt's Case, 25 Ch. D. 283 1170,
1171, 1172
Hey V. Dolphin, 92 Hun
(N. Y.) 230; 36 N. Y.
Supp. 627 1030, 1048, 1053
Hiatt V. Griswold, 5 Fed. 573 807
Hibblewhite v. McMorine, 6
M. & W. 200 685, 685
Hibbs V. Brown, 190 N. Y.
167; 82 N. E. 1108 1448
Hibernia Bldg. Ass'n v.
McGrath, 154 Pa. St. 296;
26 Atl. 377; 35 Am. St.
Rep. 828 1367
Hibernia Fire, etc. Co. v.
Commonwealth ex rel. Har-
rison, 93 Pa. St. 264 569, 569
Hichens v. Congreve, 4 Sim.
420; 4Russ. 562 319,320
Hicks V. Steel, 126 Mich. 408;
85 N. W. 1121 1299
V. Steel, 142 Mich. 292;
105 N. W. 767 _ 1272
Higgins V. California Petro-
leum, etc. Co., 122 Cal. 373;
55 Pac. 155 296
V. California Petroleum,
etc. Co., 147 Cal. 363; 81
Pac. 1070 296
V. Fidelity Ins., etc. Co.,
108 Fed. 475; 46 C. C. A.
509 621, 807
Higgins V. Hopkins, 3 Ex. 163
306,
310
V. Illinois Trust, etc.
Bank, 193 111. 394; 61
N. E. 1024 648, 784
V. Lansingh, 154 111. 301 ;
40 N. E. 362 439, 1295, 1342,
1405
Higgins Co., Chas. S., v. Hig-
gins Soap Co., 144 N. Y. .
462; 39N. E. 490; 43 Am.
St. Rep. 769; 27 L. R. A.
42 376, 387
Higgins, Ex parte, 60 L. T. 383 628
, Ee, 27 Fed. 443 1620
Higgs V. Northern Assam Tea
Co., L. R. 4 Ex. 387 1421
High Court v. Zak, 136 111.
185; 26 N. E. 593; 29
Am. St. Rep. 318 917
Highett V. Highett, 22 Vict.
L. R. 352 806
Highland Turnpike Co. v.
McKean, 10 Johns. (N. Y.)
154; 6 Am. Dec. 324 915, 9-23,
923
Hightower v. Ansley (Ga.),
54 S. E. 939 422
Highway Advertising Co. v.
Ellis, 7 Ont. L. R. 504 322
Hilder v. Dexter (1902), A. C.
474 354, 626
Hildyard v. South Sea Co., 2
P. Wms. 76 728, 738, 754, 757,
758, 759
Hiles V. Case, 9 Biss. 549; 14
Fed. 141 1559, 1568
Hill V. Atlantic, etc. R. R. Co.
(N. Car.), 55 S. E. 854 107, 966,
1005, 1006, 1008, 1060
V. Atoka Coal, etc. Co.
(Mo.), 21 S. W. 508 713, 753,
1111, 1116, 1130
— V. Beach, 12 N. J. Eq. 31 254
V. Frazier, 22 Pa. St. 320 1342
V. Gould, 129 Mo. 106;
30 S. W. 181 1305, 1313
— — ■ V. Great "Western Ry.
Co., 10 C. B. N. s. 148 SSQ'
V. Jewett Publishing Co.,
154 Mass. 172; 28 N. E.
142; 26 Am. St. Rep. 230;
13 L. R. A. 193 740
V. Manchester, etc.
Water Works Co., 5 B. &
Ad. 866 400, 914
V. Newichawanick Co., 8
Hun 459; 71 N. Y. 593 806,
1131, 1135
TABLE OF CASES
[The references are to pages]
Hill V. Nisbet, 100 Ind. 341 76,
604, 659, 966, 1312
V. Pine River Bank, 45
N. H. 300
V. Rich Hill, etc. Co., 119
Mo. 9; 24 S. W. 223
V. Weidinger, 110 N. Y.
App. Div. 683; 97 N. Y.
Supp. 473
Hill Co., T. E., 148 Fed. 832;
78 C. C. A. 522
Hill's Case, 20 Eq. 597
Hilles V. Parrish, 14 N. J. Eq.
380 1.008, 1063, 1208, 1208
Hilliard v. Lyman, 138 Fed.
469
Hilton Bridge, etc. Co. v.
Foster, 26 N. Y. Misc. 338;
57 N. Y. Supp. 140
Hinchman v. Point Defiance
Ry. Co., 14 Wash. 349; 44
Pac. 867 1509
Hinckley v. Pfister, 83 Wise.
64; 53 N. W. 21 1130, 1402,
1403
1;. Schwartzsohild, etc.
Co., 45 N. Y. Misc. 176; 91
N. Y. Supp. 893
i;. Union Pac. R. R. Co.,
129 Mass. 52; 37 Am. Rep.
297 1461, 1463, 1463
Hindley's Case (1896), 2 Ch.
121 171, 171, 350, 352
Hindman v. Great Western
Coal, etc. Co. (Wash.), 92
Pac. 139
Hinds V. Buenos Ayres Tram-
ways Co. (1906), 2 Ch. 654
1108, 1680
Montgomery
771
1197
1359
44
813
1359
1649
1538
441
1585
1104,
Hingston v.
(Mo.), 97 S. W. 202
Hinkley v. Sac Oil, etc.
(Iowa), 107 N. W. 629
595, 942,
962, 1320
Co.
177, 180,
294
Co.
612
Hiram Maxim Lamp
(1903), 1 Ch. 70
Hirsch v. Bums, 77 L. T. 377 172,
189, 197, 197
V. Jones, 115 N. Y. App.
Div. 156 1242
, Be, 116 N. Y. App. Div.
367 1021, 1242
Hirsche v. Sims (1894), A. C.
654 1266, 1269, 1326, 1339
Hirth, Be (1899), 1 Q. B. 612 886
Hiscock V. Lacy, 9 N. Y.
Misc. 578; 30 N. Y. Supp.
860 1112
Hitchcock V. Galveston, 96
U. S. 342
V. Midland R. R. Co., 33
N. J. Eq. 86
V. Midland R. R. Co., 37
N. J. Eq. 549
Hitchings v. St. touis, etc.
Transportation Co., 68
Hun (N. Y.) 33; 22 N. Y.
Supp. 719
Hite«. Hite, 93 Ky. 257; 20
S. W. 778; 40 Am. St. Rep.
189; 19 L. R. A. 173 502, 1092,
1151, 1151, 1152, 1446
Hix V. Edison Electric Co., 10
N. Y. App. Div. 75; 41
N. Y. Supp. 680
Hoadley v. County Comm'rs,
105 Mass. 519
Hoag V. Lamont, 16 Abb. Pr.
N. s. (N. Y.) 91
Hoagland v. Beall, 36 Barb.
(N. Y.) 57
Hoare & Co. (1904), 2 Ch. 208
536, 1101/ 1105, 1106
Hoare's Case, 30 Beav. 225 832
Hobbs V. Dane Mfg. Co., 5
Allen (Mass.) 581
Hobgood V. Ehlen (N. Car.),
53 S. E. 857'
Hoboken Beef Co. v. Hand,
104 N. Y. App. Div. 390;
93 N. Y. Supp. 834
Hodge V. U. S. Steel Corp., 64
N.J. Eq. 807; 54Atl. 1;60
L. R. A. 742 328, 578, 962, 965,
969, 1296, 1309, 1311, 1312, 1313
Hodge's Excrs. v. First Nat.
Bank, 22 Gratt. (Va.) 51 1371
Hodgens v. United Copper
Co. (N. J.), 67 Atl. 756 898,
903, 905
— , Ex parte (1847), 11 Ir.
Eq. 99 1141
Hodges V. New England
Screw Co., 1 R. I. 312; 53
Am. Dec. 624 ; 3 R. I. 9 75, 944,
951, 1259, 1268
V. Planters' Bank, 7 G.
& J. (Md.) 306 771
V. Rutland, etc. R. R.
Co., 29 Vt. 220 1247, 1248,
1371
V. Schuler, 22 N. Y. 114 1530
Hodgson V. Duluth, etc. R. R.
Co., 46 Minn. 454; 49
N. W. 197 941, 942, 1008, 1010
Hodgson V. Powis, 12 Beav.
392 73
838
1665
1665
1381
1033
16
287
921
435,
985
635
1262
TABLE OF CASES
[The references are to pages]
398
492
Hodson V. Tea Co., 14 Ch. D.
859 1426, 1470, 1547
Hoe V. Lee, 3 New So. Wales
St. Rep. 30
Hoeft V. Kock, 123 Mich. 171 ;
81 N. W. 1070; 81 Am. St.
Rep. 159
Hoenev. PoUak, 118 Ala. 617;
24 So. 349; 72 Am. St. Rep.
189 1041, 1044
Hoffman v. Reichert, 147 111.
274; 35N. E. 527; 37 Am.
St. Rep. 219 1323, 1343
Hoffman, etc. Co. v. Cximber-
land, etc. Co., 16 Md. 456;
77 Am. Dec. 311 300, 886, 1295,
1304, 1311, 1311, 1333
Holbrooki). Holbrook (N. H.),
66 Atl. 124 503, 1150
V. New Jersey Zinc Co.,
57 N. Y. 616 683, 684, 733
Holcomb V. Cable Co., 119 Ga.
466; 46 S. E. 671
Holden v. Phelps, 135 Mass.
61
i;. Trust Co., 100 U. S.
72
V. Upton, 134 Mass. 177
Holden's Case, 8 Eq. 444 612, 1400
Holder v. Lafayette, etc. Ry.
Co., 71 111. 106; 22 Am.
Rep. 89 1247, 1321
Holdsworth V. Davenport, 3
Ch. D. 185
Holladay v. Elliott, 8 Oreg. 84
Holland v. Ball (Mass.), 78
N. E. 772
V. Cruft, 3 Gray 162
V. Dickson, 37 Ch. D.
669 900, 901, 907
V. Lee, 71 Md. 338; 18
Atl. 661 306, 1522, 1600
V. Lewiston Falls Bank,
52 Me. 564
Hollingshead v. Woodward,
35 Hun (N. Y.) 410
HoUis V. Allan, 14 W. R. 980
HoUister v. DeForest Wire-
less Tel. Co., 47 N. Y.
Misc. 674; 94 N. Y. Supp.
504 692, 900
V. Stewart, 111 N. Y.
644; 19 N. E. 782 1453, 1456,
1486, 1488, 1560
Holloway & McRaney v.
Brame, 83 Miss. 335; 36
So. 1
Hollywood V. First Parish in
Brockton, 19? Mass. 269
383
1379
1441
1380
1439
176
790
304
1237
494
1141
300
71
Holm V. Atlas Nat. Bank, 84
Fed. 119; 28 C. C. A. 297 1329
Holman v. State ex rel. Gib-
son, 105 Ind. 569; 5 N. E.
702 240
Holmes v. Gilliland, 41 Barb.
(N. Y.) 568 127, 248
V. Higgins, 1 B. & C. 74 274
V. Newcastle-upon-Tyne
Abattoir Co., 45 L. J. Ch.
N. s. 383 , 512, 513
V. Newcastle-upon-Tyne
Freehold Abattoir Co., 1
Ch. D. 682 1127
V. Royal Loan Ass'n
(Mo.), 107 S. W. 1005 1007
V. Salamanca Gold, etc.
■ Co. (Cal.), 91 Pac. 160 402
V. Seashore Electric Ry.
Co., 57 N. J. Law 16 ; 29 Atl.
419 1528
V. Willard, 125 N. Y. 75;
25N. E. 1083; 11 L. R. A.
170 86, 86, 1161, 1290, 1368
Holmes, Booth & Haydens v.
Holmes, Booth & Atwood
Mfg. Co., 37 Conn. 278; 9
Am. Rep. 324 372, 373
Holmes, etc. Mfg. Co. v.
Holmes, etc. Metal Co.,
127 N. Y. 252; 27 N. E.
831; 24 Am. St. Rep. 448 75,
75, 846
Holmes, Ex parte, 5 Cow.
(N. Y.) 426 526, 526, 977,
1020, 1027
Holomany v. Nat. Slavonic ,
Soc, 39 N. Y. App. Div.
673; 57 N. Y. Supp. 720 948
Holophane v. Hesseftine, 13
Times L. R. 7 364, 364
Holt V. Dewell, 4 Hare 446 684
V. Winfield Bank, 25
Fed. 812 838, 839, 1354
Holyford Mining Co., Ir. R. 3
Eq. 208 437
Holyoke, etc. Ass'n v. Lewis,
1 Colo. App. 127; 27 Pac.
872 684
Holyoke Envelope Co. v. U. S.
Envelope Co., 182 Mass.
171 ; 65 N. E. 54 285, 286
Home Fire Ins. Co. v. Barber,
67 Nebr. 644; 93 N. W.
1024; 60L. R. A. 927; 108
Am. St. Rep. 716 971, 971
Home Mixtiire Guano Co. v.
Tillman, 125 Ga. 172; 53
S. E. 1019 1245, 1247
TABLE OP CASES
[The references are to pages]
1321
1352
Home Savings, etc. Bank v.
Peoria Agricultural, etc.
Soc.,206111.9; 69N.E. 17;
99 Am. St. Rep. 132 1235
Home Stock Ins. Co. v. Sher-
wood, 72 Mo. 461 697
Homer Gold Mines, 39 Ch. D.
546 1201
Honeyman v. Haughey (N.
J.), 66 Atl. 582 628, 635
Hood V. Eden, 36 Can. Sup.
Ct. 476 635
Hook V. Bosworth, 64 Fed.
443; 12 C. C. A. 208 1517, 1608
Hooke V. Financier Co., 99
N. Y. App. Div. 186; 90
N. Y. Supp. 1012
Hooker v. Midland Steel Co.,
215 111. 444; 74 N. E. 445;
106 Am. St. Rep. 170
Hoole V. Great Western Ry.
Co., 3 Ch. 262 497, 497, 972,
977, 977, 1117
V. Speak (1904), 2 Ch.
732 1282
Hooley, Be (1899), 2 Q. B.
579 190, 198, 199, 347, 624
Hooper v. Central Trust Co.,
81 Md. 559; 32 Atl. 505;
29 L. R. A. 262 1533, 1650
V. Herts (1906), 1 Ch.
549 760, 760
V. Kerr, Stuart & Co., 83
L. T. 729 997, 1001
V. Rossiter, McCl. 527 1141
Hoopes V. Basic Co. (N. J.),
61 Atl. 979 963, 1177
Hoover v. Mbntclair, etc. Ry.
Co., 29 N. J. Eq. 4 1653
Hopcroft V. Parker, 16 L. T.
N. s. 123 306
Hope V. Croydon Tramways,
34 Ch. D. 730 1638
V. International Finan-
cial Soc, 4 Ch. D. 327 516, 568,
576, 657
V. Valley City Salt Co.,
25 W. Va. 789 1309, 1315
Hopkins v. Gallatin Turn-
pike Co., 4 Humph. (Tenn.)
403 399, 407
V. Roseclare Lead Co.,
72 111. 373 1078
V. Worcester, etc. Canal
Proprietors, 6 Eq. 437 1464,
1464, 1603
Hopkins County v. St. Ber-
nard Coal Co., 24 Ky. Law
Rep. 942; 70S. W. 289 844
1141
409
1344
1366
1036,
Hopkins' Trust, Be, 18 Eq.
696
Hopper V. Lovejoy, 21 Atl.
298; 47 N. J. Eq. 573; 12
L. R. A. 588
V. Sage, 112 N. Y.
530; 20 N. E. 350; 8 Am.
St. Rep. 771 1132, 1135
Hoppin V. Buffum, 9 R. I.
513; 11 Am. Rep. 291 1020,
1021, 1021, 1022, 1022
Hopson V. Aetna Axle, etc.
Co.," 50 Conn. 597 64, 1317
Horbach v. Marsh, 37 Nebr.
22; 55 N. W. 286
V. Tyrrell, 48 Nebr. 514;
67 N. W. 485
Horbury Bridge Co., 11 Ch. D.
109 1013, 1013, 1034,
1036, 1038, 1058
Horn Silver Mining Co. v.
Ryan, 42 Minn. 196; 44
N. W. 56 1286, 1286
Homblower v. Crandall, 7 Mo.
App. 220; 78 Mo. 581 274, 310
Home V. Hellard, 29 Ch. D.
736 1548
Home & Sons, W. C. (1906),
1 Ch. 271 1591, 1621, 1621
Hornsby v. Eddy, 56 Fed.
461; 5 C. C. A. 560 1619
Horowitz V. Broads Mfg. Co.,
104 N. Y. Supp. 988 287, 300
Horsey's Claim, 5 Eq. 561 91
Horst V. Lewis, 103 N. W. 460
(Nebr.); 98 N. W. 1046 85
Horton v. Morgan, 19 N. Y.
170; 75 Am. Deo. 311 418, 807
V. Wilder, 48 Kans. 222;
29 Pac. 566 1066
Hoskins v. Seaside Ice, etc.
Co. (N. J.), 59 Atl. 645 519, 1423
Hotchkiss V. Brainerd Quarry
Co., 58 Conn. 120; 19 Atl.
521
V. National Banks, 21
Wall. 354
V. Norwood Park Bldg.,
etc. Ass'n (111.), 82 N. E.
257
Hotchkiss, etc. Co. v. Union
Nat. Bank, 68 Fed. 76; 15
C. C. A. 264 697, 774, 775
Hotel Co. V. Wade, 97 U. S.
13 1309, 1484, 1484, 1586, 1587
Ho Tung V. Manon Insurance
Co. (1902), A. C. 232 554, 557
Hough V. Cook County Land
Co., 73 111. 23 843, 847
1144
1435
919
TABLE OP CASES
[The references are to pages]
Houghton V. Hubbell, 91 Fed.
453; 33 C. C. A. 574 621
Houldsworth V. City of Glas-
cow Bank, 5 A. C. 317 183
V. Evans, L. R. 3 H.
L. 263 622, 665, 789, 789
House of Mercy v. Davidson,
90 Tex. 529; 39 S. W. 924 848
Household, etc. Ins. v. Co.
Grant, 4 Ex. D. 216 167
Houser v. Richardson, 90 Mo.
App. 134 684, 684, 801, 1134
Houston V. Thornton, 122 N.
Car. 365; 29 S. E. 827; 65
Am. St. Rep. 699 1355
Houston, etc. Ry. Co. v. Bell
(Tex.), 42 S. W. 772 1634
V. Crawford, 88 Tex. 277;
31S.W.176;53Ain.St.Rep.
752; 28 L. R. A. 761 1633, 1634
V. Keller, 90 Tex. 214;
37 S. W. 1062 1666
V. Kelley, 35 S. W. Rep.
878 (Tex.) 1633
V. McFadden, 91 Tex.
194; 40 S. W. 216; 42
S. W. 593 1633
V. Strycharski (Tex.),
35 S. W. 851 1610, 1633
V. Van Alstyne, 56 Tex.
439 734, 735, 738
Howard v. Glenn, 85 Ga. 238;
11 S. E. 610; 21 Am. St. .
Rep. 156 177, 180, 180, 386
V. Hatch, 29 Barb.
(N Y.) 297 1379
V. Iron & Land Co., 62
Minn. 298; 64 N. W. 896 1499
V. Patent Ivory Co., 38
Ch. D. 156 286
V. Sadler (1893), 1 Q.
B. 1 1177, 1177
V. Turner, 155 Pa. St.
349; 26 Atl. 753; 35 Am.
St. Rep. 883 180, 180
Howard's Case, 1 Ch. 561 1214
Howbeach Coal Co. v. Teague,
5 H. & N. 151 608, 1203, 1213,
1213, 1226, 1232
Howe V. Boston Carpet Co.,
16 Gray (Mass.) 493 74
V. Freeman, 14 Gray
(Mass.) 566 1551
V. Harding, 76 Tex. 17;
13 S. W. 41; 18 Am. St.
Rep, 17 1611, 1612
V. Keeler, 27 Conn. 538 400
V. Sanford Fork & Tool
Co., 44 Fed. 231 1316
Howe Grain & Mercantile Co.
V. Jones, 21 Tex. Civ. App.
198; 61 S. W. 24 517, 572
Howe, Re, 1 Paige (N. Y.) 214 54
Howe Scale Co. v. Wyckoff,
Seamans & Benedict, 198
U. S. 118; 25 Sup. Ct. 609 377
Howell V. Chicago, etc. Ry.
Co., 51 Barb. (N. Y.) 378 463,
463, 473, 495, 497
V. Western R. R. Co., 94
U. S. 463 1409, 1465, 1466,
1623, 1624
Howell Lithographic Co. v.
Brethour, 30 Ont. R. 204 369,
369
Hower v. Weiss, etc. Co., 55
Fed. 356; 5 C. C. A. 129 786,
811
Howie V. Scarbrough, 138
Ala. 148; 35 So. 113 1167
Hoyle V. Plattsburgh, etc. R.
R. Co., 54 N. Y. 314 1300, 1323,
1343
Howling's Trustees v. Smith,
7 Frazer (Sc.) 390 1011
Hoyt V. Am. Exchange Bank,
1 Duer (N. Y.) 652 890
V. Shenango Valley
Steel Co., 207 Pa. 208; 56
Atl. 422 505
V. Thompson, 5 N. Y.
320 1372
V. Thompson's Ex'r, 19
N. Y. 207 1203, 1214
Hub Construction Co. v.
New England Breeders'
Club (N. H.), 67 Atl. 574 891,
899, 901, 905
Hub Publishing Co. v. Rich-
ardson, 13 N. Y. Supp. 665 306
Hubbard v. Bank of U. S., 12
Fed. Cas. 777 694, 715, 751
V. International Meiv
eantile Agency (N. J.), 59
Atl. 24 185
V. Manhattan Trust Co.,
87 Fed. 51 ; 30 C. C. A. 520 201,
764, 801, 1418
■». New York, etc. R. R.
Co., 36 Barb. (N. Y.) 286 1432
V. New York Investment
Co., 14 Fed. 675 1262, 1299
V. Weare, 79 Iowa 678;
44 N. W. 915 1092, 1095
Hubbard & Co., 68 L. J. Ch.
54 1524, 1546, 1548
Hubbell V. Drexel, 11 Fed.
115 418, 418, 807
TABLE OF CASES
[The references are to pages]
1601
617
424
915
244
Hubbuck V. Helms, 56 L. J.
Ch. 536 1545, 1548
Hubinger v. Central Trust
Co., 94 Fed. 788; 36 C. C.
A. 494
Huddersfield Canal Co. v.
Buckley, 7 T. R. 36
Huddleston v. Gouldsbury, 10
Beav. 547
Hudson V. Carman, 41 Me. 84
■ V. Green Hill Cemetery,
113 111. 618
V. Parker Machine Co.,
173 Mass. 242; 53 N. E.
867 912, 1227
V. West, 189 Pa. St. 491 ;
42 Atl. 190 341, 342
Hudson Real Estate v. Tower,
161 Mass. 10; 36N. E. 680;
42 Am. St. Rep. 379; 156
Mass. 82; 30N. E. 465; 32
Am. St. Rep. 434 169, 209, 209,
210
Hudson River, etc. Co. v.
Hanfield, 36 N. Y. App.
Div. 605; 55 N. Y. Supp.
877 1373, 1402
Hudson River, etc. R. R. Co.
V. Hay, 14 Abb. Pr. n. s.
(N. Y.) 191 932, 1229, 1251
Hudson Valley Ry. Co. v.
O'Connor, 95 N. Y. App.
Div. 6; 88 N. Y. Supp. 742
358, 1458
Huffaker v. Krieger's As-
signee, 107 Ky. 200; 53
S. W. 288; 46L. R. A. 384 83
Hughes V. Antietam Mfg. Co.,
34Md.316 95,100,106,131,
202, 600, 603, 603, 604, 607
V. Chicago, etc. Ry. Co.,
47 N. Y. Super. Ct. 531
V. Drovers', etc. Bank,
86 Md. 418; 38 Atl. 936
V. Parker, 19 N. H. 181
V. Parker, 20 N. H. 58 998,
1035, 1250
V. Vermont Copper Min-
ing Co., 72 N. Y. 207 1130, 1131
V. Wisconsin, etc. Ins.
Co., 98 Wise. 292; 73N. W.
1015
Hughes County v. Livingston,
104 Fed. 306; 43 CCA. 541
Hughesdale Mfg. Co. v. Van-
ner, 12 R. I. 491
Huguenot Mills v. Jempson
& Co., 68 S. Car. 363; 47
S. E. 687 844
1493
815
1035
559
1460
219
Huguenot Nat. Bank v. Stud-
well, 6 Daly (N. Y.) 13
1185,
1186
Hukle V. Atchison, etc. Ry.
Co. (Kans.), 80 Pac. 603
Hulett's Case, 2 Johns. &
Hem. 306
Hulitt V. Bell, 85 Fed. 98
V. Ohio Valley Nat.
Bank, 137 Fed. 461; 69
C. C. A. 609
Hullman v. Honcomp, 5 Oh.
St. 237
Humaston v. Telegraph Co.,
20 Wall. 20
Humbert v. Trinity Church,
24 Wend. (N. Y.) 587
Humble v. Langston, 7 M. &
W. 517
Humboldt Driving Park
Ass'n V. Stevens, 34 Nebr.
528; 52N.W.568; 33 Am.
St. Rep. 654 487, 499, 1250
Humboldt Mining Co. v. Am.
Mfg., etc. Co., 62 Fed. 356;
10 C. C. A. 415 84, 838
Humboldt Township v. Long,
92 U. S. 642
Hume V. Eagon, 83 Mo. App.
576
Humphrey v. Patrons' Mer-
cantile Ass'n, 50 Iowa 607
1634
1421
1191
621
1250
163
84S
782
1220
912
110,
139
V. Tatman, 198 U. S. 91;
25 Sup. Ct. 567 1506
Humphreys v. Allen, 100 111.
511 1529
V. McKissock, 140 U. S.
304; 11 Sup. Ct. 779 1073, 1510
V. Minnesota Clay Co.,
94 Minn. 469; 103 S. W.
338 749
V. Mooney, 5 Colo. 282 101,
113, 119, 120, 124, 126,
252, 1009
V. Morton, 100 111. 592 1449,
1452, 1453, 1460
V. N. Y., etc. R. R. Co.,
121 N. Y. 435; 24 N. E.
695 1541
Hun V. Cary, 82 N. Y. 65; 37
Am. Rep. 546 1259, 1273, 1275,
1284, 1286, 1289
Hunt V. American Grocery
Co., 81 Fed. 532 71
V. Bay State Iron Co.,
97 Mass. 279 1537
V. Bullock, 23 111. 320 1396,
1503
TABLE OF CASES
[The references are to pages]
Hunt V. Hauser Malting Co.,
90 Minn. 282; 96 N. W. 85 846
■!;. Hauser Malting Co.,
95 Minn. 206; 103 N. W.
1032 846
V. Kansas, etc. Bridge
Co., 11 Kans. 412 147, 148, 150,
608
V. Laconia, etc. Ry. Co.,
68 N. H. 561; 39 Atl. 437 810
V. O'Shea, 69 N. H. 600;
45 Atl. 480 1121
V. Seeger, 91 Minn. 264 ;
98 N. W. 91 616, 695
Hunt & Bro. v. Memphis, etc.
Co.,95Tenn. 136; 31 S. W.
1006 1405, 1564
Hunter v. Burlington, etc.
Ry. Co., 76 Iowa 490; 41
N. W. 305 1632
V. Robbins, 117 Fed. 920 928
V. Roberts; Throp & Co.,
83Mich. 63; 47N.W. 131 1111,
1112
V. Sun Mutual Ins. Co.,
26 La. Ann. 13 593, 593, 594,
1276, 1364
Huntington v. Palmer, 104
U. S. 482 950
Huntington Fuel Co. v. Mc-
Dwaine (Ind.), 82 N. E.
1001 1078, 1079, 1196, 1383
Huntington Mfg. Co. v. Scho-
field, 28 Ind. App. 95; 62
N. E. 106 127
Hurd V. Hotchkiss, 72 Conn.
472; 45 Atl. 11 917
Hurlburt v. Arthur, 140 Cal.
103; 73 Pac. 734; 98 Am.
St. Rep. 17 616, 623
Hurlbut V. Tayler, 62 Wise.
607; 22 N. W. 855 1128
Hurt V. Salisbury, 55 Mo. 310 123,
127, 242, 252, 306
Hussey v. Gallagher, 61 Ga.
86 . 580, 998, 1250
V. Manufacturers', etc.
Bank, 10 Pick. (Mass.) 415
156,
752
V. Norfolk, etc. R. R.
Co., 98N. Car. 34; 3 S. E.
923; 2 Am. St. Rep. 312 869
Hutchins v. Byrnes, 9 Gray
(Mass.) 367 399, 400
V. State Bank, 12 Met.
(Mass.) 421 _ 792
Hutchinson v. American
Palace Car Co., 104 Fed.
182 957
Hutchinsonc.Colorado United
Mining Co., 3 Times L. R.
265 722
V. Curtiss, 45 N. Y.
Misc. 484; 92 N. Y. Supp.
70 1110, 1125, 1283
V. Green, 91 Mo. 367; 1
S. W; 853 1187
V. Simpson, 92 N. Y.
App. Biv. 382; 87 N. Y.
Supp. 369 325, 326, 330
V. Sutton Mfg. Co., 57
Fed. 998 1265
V. Western, etc. R. R.
Co.; 6 Heisk. (Tenn.) 634
869, 877
Hutchinson's Case (1895), 1
Ch. 226 1170, 1171, 1172,
1172, 1172, 1172
Huter V. Union Trust Co.
(Ind.), 51 N. E. 1071 852
Hutter V. DeQ. Bottle Stop-
per Co., 128 Fed. 283 1356
Hutton V. Bancroft & Sons
Co., 83 Fed. 17 950, 951
V. Scarborough Hotel
Co., 2 Dr. & Sm. 521 431, 440,
441, 442, 583
V. Scarborough Hotel Co.,
4DeG.J.&S.672; 2Dr.&
Sm. 514 440
V. Thompson, 3 H. L. C.
161 274
V. Upfill, 2 H. L. C. 674 275
V. West Cork Ry. Co.,
23 Ch. D. 654 82, 82, 1237
Hutzler v. Lord, 64 Md. 534;
3 Atl. 891 782, 782
Huylar v. Cragin Cattle Co.,
40 N. J. Eq. 392 ; 2 Atl. 274 ;
42 N. J. Eq. 139; 7 Atl.
521 894, 898, 900
Hyatt V. Allen, 56 N. Y. 553;
15 Am. Rep. 449 1135
V. Van Riper, 105 Mo.
App. 664; 78S. W. 1043
Hyde v. Doe, 4 Sawy. 133
252
126
V. Holmes (Mass.), 84
N. E. 318 1146
V. Larkin, 35 Mo. App.
365 1381, 1382
Hyderbad Co., 75 L. T. 23 530,
536, 537, 545, 546
Hygeia . Water Ice Co. v.
New York Hygeia Ice Co.,
140 N. Y. 94; 35 N. E. 417 373
Hynes v. Illinois Trust, etc.
Bank, 226 111. 95; 80N. E.
753 1426
TABLE OF CASES
[The references are fo pages]
Hyslop V. Morrel Bros., W.
N. (1891) 19
175
I. C. Johnson & Co. (1902), 2
Ch. 101 1497, 1498, 1525
Ide V. Bascomb, 72 Pac. 62 931
Ijams V. Andrews, 151 Fed. 725 305
Ikelheimer v. Consolidated
Tobacco Co. (N. J.), 59
Atl. 363 1674, 1674
Ilfracombe Permanent Mut.
Benefit Bldg. Soc. (1901),
1 Ch. 102 257
Ilion Bank v. Carver, 31 Barb.
(N. Y.) 230 1288
lUingworth v. Houldsworth
(1904), A. C. 355 1393, 1396,
1547
Illinois, etc. Bank v. Pacific
Ry. Co., 117 Cal. 332; 49
Pac. 197 840, 861, 1402,
1409, 1414, 1531
Illinois Central R. R. Co. v.
Barrett, 23 Ky. Law Rep.
1755; 66S.W. 9
Illinois Linen Co. v. Hough,
91 111. 63
Illinois State Hospital v.
Higgins, 15 111. 185
Illinois Steel Co. v. O'Donnell,
156 111. 624; 41 N. E. 185;
47 Am. St. Rep. 245; 31 L.
R. A. 265
Illinois Trust, etc. Bank v.
Doud, 105 Fed. 123; 44
C. C. A. 389; 52 L. R. A.
481 73, 1455, 1566
V. Minton, 120 Fed. 187
1484, 1554
V. Seattle El. Ry., etc.
Co., 82 Fed. 936; 27 C. C.
A. 268 1495
Illinois Watch Case Co. v.
Pearson, 140 111. 423; 31
N. E. 400; 16 L. R. A. 429
125, 222, 372, 385
Imperial Gas Co. v. Clarke, 7
Bing. 95 890
Imperial Hydropathic Hotel
Co. V. Hampson, 23 Ch.
D. 1 1162, 1183, 1183
Imperial Land Corporation,
16 W. R. 1191 189
Imperial Land Co. of Mar-
seilles, 10 Eq. 298 1364
, 11 Eq. 478 1420, 1422,
, 1422, 1426, 1441
920
1238
381
1317
Imperial Mercantile Ass'n v.
Coleman, L. R. 6 H. L. 189
1179, 1179, 1296, 1300, 1309,
1331, 1333
Imperial Mercantile Credit
Ass'n V. London, etc. Ry.
Co., 15W. R. 1187 65
Imperial Mercantile Credit
Co., 5 Eq. 264 1266
Imperial Mfg. Co. v. Schwartz,
105 111. App. 525 371, 373/384
Imperial Starch Co., 10 Ont.
L. R. 22 571, 744
Importing & Exporting Co. v.
Locke, 50 Ala. 332 259, 261
Ince Hall, etc. Co., 23 Ch. D.
545 n 628
Ind's Case, 7 Ch. 485 417
Independent Order v. Hag-
gerty, 86 111. App. 31 589
Inderwick v. Snell, 2 Mac. &
G. 216 1184
Indian Mechanical Gold Ex-
tracting Co. (1891), 3 Ch.
538 137
Indian Zoedone Co., 26 Ch.
D. 70 1042, 1042, 1043, 1057,
1058
Indiana Bermudez, etc. Co. v.
Robinson, 29 Ind. App. 59;
63 N. E. 797 1212
Indiana Bond Co. v. Ogle, 22
Ind. App. 593; 54 N. E.
407; 72 Am. St. Rep. 326 45,
111, 238, 244
Indiana, etc. R. R. Co. v.
Swannell, 157 111. 616; 41
N. E. 989; 30 L. R. A. 290
1661, 1661, 1664
Indianapolis, etc. Co. v. Her-
kimer, 46 Ind. 142 127, 232,
233, 242
Indianapolis, etc. R. R. Co.
V. Morganstem, 103 111.
149 407
Indianapolis Rolling Mill v.
St. Louis, etc. R. R. Co.,
120 U. S. 256; 7 Sup. a.
542 1373, 1382
Industrial Land Develop-
ment Co. V. Post, 55 N. J.
Eq. 559; 37 Atl. 892 1468
Industrial Mutual Deposit Co.
V. Central Mutual Deposit
Co., 112 Ky. 937; 66 S. W.
1032 371
Industrial, etc. Trust v. Tod,
180N. Y.215; 73 N. E. 7 1660,
1662, 1663
TABLE OP CASES
[The references are to pages]
Inglehart v. Thousand Island
Hotel Co., 109 N. Y. 454;
17 N. E. 358 1315
Inglis V. Great Northern Ry.
Co., 1 Macq. H. L. Cas. 112
667, 667
V. Trustees of Sailors'
Snug Harbour, 3 Pet. 99 302
Ingraham v. National Salt Co.,
130 Fed. 676; 65 C. C. A.
54 440, 440, 452
Inhabitants of Anson, 85 Me.
79; 26 Atl. 996 1493, 1493,
1493, 1494, 1586
Inman v. Ackroyd & Best
(1901), 1 K. B. 613 1241
Innes & Co. (1903), 2 Ch.
254 24, 330, 627, 629, 635,
1290, 1340
Inns of Court Hotel Co., 6
Ch. 82 1399
Instone v. Frankfort Bridge
Co., 2 Bibb (Ky.) 576; 5
Am. Dec. 638 667
Insurance Bank v. Bank of
U. S., 4 Clark (Pa.) 125 992,
1193
Insurance Co. v. Connor, 17
Pa. St. 136 584
Insurance Press v. Montauk,
etc. Wire Co., 103 N. Y.
App. Div. 472; 93 N. Y.
Supp. 134 324
Interior Woodwork Co. v.
Prassar, 108 Wise. 557; 84
N. W. 833 85
International Bank v. Faber,
86 Fed. 443; 30 C. C. A
178 1182, 1367
International Boom Co. v.
Rainy Lake River Boom
Co., 97 Minn. 513; 107
N. W. 735 21, 39, 60
International Cable Co., 66 L.
T. 253 1170, 1170, 1170
International Coal Mining Co.
V. Pennsylvania R. Co., 152
Fed. 557 _ 891
V. Pennsylvania R. Co.,
152 Fed. 551 _ 1514
International Committee Y.
W. C. A. V. Y. W. C. A., 194
111. 194; 62 N. E. 551; 66
L. R. A. 888 371
International Fair, etc. Ass'n
V. Walker, 83 Mich. 386;
47 N. W. 338 212, 601, 608
International Life Ass. Soc,
39 L. J. Ch. 271 1244
International Savings, etc.
Co. V. Stenger, 31 Pa. Super.
Ct. 294 140, 386
International Silver Co. v.
Simeon, etc. Rogers Co.,
110 Fed. 955 377
V. William G. Rogers Co.,
113 Fed. 526 377
International Trust Co. v.
Davis, etc. Mfg. Co., 70
N. H. 118; 46 Atl. 1054 110,
859, 1497, 1498
V. Decker Bros., 152
Fed. 78 1606, 1625, 1560
V. International L. & T.
Co., 153 Mass. 271; 26
N. E. 693 ; 10 L. R. A. 758 375,
377
V. Townsend Brick, etc.
Co., 95 Fed. 850; 37 C. C.
A. 396 1564, 1566
International Wrecking, etc.
Co. V. McMorran, 73 Mich.
467; 41 N. W. 510 1080
International, etc. Ry. Co. v.
Herndon, 11 Tex. Civ. App.
465; 33 S. W. Rep. 377 1643
V. Wentworth, 8 Tex.
Civ. App. 5; 27 S. W. 680 1643
Interoceanic Ry. of Mexico, 3
Hanson 162 1672
Interstate Hotel Co. v. Wood-
ward, etc. Amusement Co.,
103 Mo. App. 198; 77S.W.
114 856
Investment Co. v. Eldridge, 2
Pa. Dist. Rep. 394 895, 897
V. Ohio, etc. R. R. Co.,
36 Fed. 48 1649, 1649, 1650
V. Ohio, etc. R. R. Co.,
46 Fed. 696 1490, 1591
Iowa Lumber Co. v. Foster,
49 Iowa 25; 31 Am. Rep.
140 517
Iowa Nat. Bank v. Cooper
(Iowa), 107 N. W. 625 810
V. Sherman, 17 S. Dak.
396; 97 N. W. 12; 106
Am. St. Rep. 778 1372
Iowa, etc. R. R. Co. ■;;. Per-
kins, 28 Iowa 281 609
Ipswich Taylor's Case, 11
Coke 53 569
Ireland v. Globe Milling Co.,
19 R. L 180; 32 Atl. 921;
61 Am. St. Rep. 756; 29
L. R. A. 429 567
V. Globe Milling, etc. Co.,
20 R. I. 190; 38 Atl. 116 301
TABLE OP CASES
[The references are to pages]
Ireland v. Globe Milling Co., 21
R. I. 9; 41 Atl. 258; 79
Am. St. Rep. 769 567, 571, 573
V. Hart (1902), 1 Ch. 522
696, 710, 711, 718, 747
V. Palestine, etc. Turn-
pike Co., 19 Oh. St. 369 652
Ireland & Co., David (1905),
1 Ir. 133 1264
Iron Clay Brick Mfg. Co., 19
Ont. 113 1343
Iron Ship Coating Co. •;;.
Blunt, L. R; 3 C. P. 484 1178,
1179
Irvine Co. v. Bond, 74 Fed.
849 266, 882, 884
Irving V. Houstoun, 4 Paton
Sc. App. 521 1141, 1142
Irving Park Ass'n v. Watson,
410reg. 95; 67Pac. 945 803
Irwin V. McKechnie, 58 Minn.
145; 59N.W.987; 49 Am.
St. Rep. 495; 26 L. R. A.
218 1617, 1618
Isaac's Case (1892), 2 Ch. 158
1172, 1175
Isbell V. Graybill, 19 Colo.
App. 508; 76 Pac. 550 716, 747
Isbester v. Murphy Mfg. Co.,
95 lU. App. 105 ' 579, 666
Isham V. Bennington Iron Co.,
19 Vt. 230 409
V. Buckingham, 49 N. Y.
216 696
Isle of Wight Ry. Co. v.
Tahourdin, 25 Ch. D. 320 993,
997, 997, 1062, 1062,
1164, 1193
Ismon V. Loder, 135 Mich.
345; 97 N. W. 769 392, 398,
409, 912
J. & P. Coats V. Crossland,
20 Times L. R. 800 1355
Jackson v. Bassford (1906), 2
Ch. 467 1396
V. Campbell, 5 Wend.
(N. Y.) 572 407
V. Cannon, 10 Brit.
Columb. 73 1223
V. Crown Point Mining
Co., 21 Utah 1 ; 81 Am. St.
Rep. 651 ; 59 Pae. 238 138, 140,
1181, 1226, 1232
— - V. Dickinson (1903), 1
Ch. 947 813
V. Ludeling, 21 Wall. 616
1344, 1590, 1636
Jackson v. Munster Bank, 13
L. R. Ir. 118 82, 89, 954, 1004,
1062, 1062
V. Munster Bank, 15
L. R. Ir. 356 1282, 1282
V. Myers, 43 Md. 452 398,
403, 406
V. Newark Plank Road
Co., 31 N. J. Law 277 1120
V. N. Y. Central R. R.
Co., 2 Thomp. & C. (N. Y.)
653; 58 N. Y. 623 1246
V. Rainford Coal Co.
(1896), 2 Ch. 340 66
. V. South Omaha Live
Stock Exchange, 49 Nebr.
687; 68 N. W. 1051 580
V. Traer, 64 Iowa 469;
20N.W. 764; 52 Am. Rep.
449 630, 631
V. Turquand, L. R. 4 H.
L. 305 165, 170, 184, 501, 509,
510, 510
V. Vieksburg, etc. R. R.
Co., 2 Woods 141 . 1410, 1425
V. Y. & C. R. R. Co., 48 ■
Me. 147 1423, 1451
Jackson & Co. (1899), 1 Ch.
348 640, 640, 642
Jackson, etc. Co. v. Burling-
ton, etc. R. Co., 29 Fed. 474 1441,
1592, 1624
Jackson, etc. Ins. Co. v,
Walle, 105 La. 89 ; 29 So. 503 613
Jackson Brewing Co. v. Can-
ton (La.), 43 So. 454 1372
Jackson ex dem. Ballou v.
Campbell, 5 Wend. (N. Y.)
572 1379, 1380
Jackson ex dem. Donally v.
Walsh, 3 Johns. (N. Y.) 226 399
Jackson ex dem. Lynch v.
Hartwell, 8 Johns. (N. Y.)
422 55
Jackson ex dem. Martin v.
Pratt, 10 Johns (N. Y.) 381 404
Jackson ex dem. Walton v.
Leggett, 7 Wend. (N. Y.)
377 228
Jacksonville Cigar Co. v.
Dozier (Fla.), 43 So. 523 1341
Jacksonville, etc. Ry. Co. v.
Hooper, 160 U. S. 514; 16
Sup. Ct. 379 68, 397, 404, 406,
1233
Jacobs V. Mexican Sugar Re-
fining Co., 104 N. Y. App.
Div, 242; 93 N. Y. Supp.
776 975
TABLE OF CASES
[The references are to pages]
Jacobs V. Mexican Sugar, etc.
Co., 112 N. Y. App. Div.
655; 98 N. Y. Supp. 541 890
V. Mexican Sugar Ref.
Co., 112 N. Y. App. Div.
657 393
Jacobs Pharmacy Co. v.
Southern Banking, etc. Co. ,
97 Ga. 573; 25 S. E. 171 862
Jacobson v. Brooklyn Lumber
Co., 181 N. Y. 152; 76
N. E. 1075 ' 942, 1322
Jacques v. Chambers, 4 Eng.
Ry. & Canal Cas. 205 788
V. Chambers, 4 Eng. Ry.
& Canal Cas. 499 789
Jamaica Ry. Co. v. Atty.-Gen.
of Jamaica (1893), A. C.
127 1679, 1679, 1679, 1681
James v. Boythorpe Colliery
Co., 2 Megone 55 1530
V. Buena Ventura Ni-
trate Syndicate (1896), 1
Ch. 456 501, 505, 788
V. Cowing, 82 N. Y. 449 1487,
1667, 1668
i). Eve, L. R. 6 H. L. 335 1106,
1163
V. Railroad Co., 6 Wall.
752 1636
— , Re, 146 N. Y. 78; 40
N. E. 876; 48 Am. St. Rep.
774 1136, 1144, 1154, 1155
James Clark Co. v. Colton, 91
Md. 195; 46 Atl. 386; 49
L. R. A. 698 1276, 1305
James Colmer, Ltd., Re
(1897), 1 Ch. 524 544
Jameson v. Caldwell, 25 Oreg.
199; 35 Pac. 245 1347
Jamieson & McFarland v.
Heim (Wash.), 86 Pac. 165 68
Jarvis v. Manhattan Beach
Co., 53 Hun (N. Y.) 362;
6 N. Y. Supp. 703; 148
N. Y. 652; 43N. E. 68; 31'
L. R. A. 776; 51 Am. St.
Rep. 727 734, 740, 743,
784, 784
V. Rogers, 13 Mass. 105 723
V. State Bank, 22 Colo.
309; 45 Pac. 505 1542
Jan^is's Case (1899), 1 Ch.
193 149, 205, 642
Jasper Land Co. v. Wallis,
123 Ala. 652; 26 So. 659 958
Jay Bridge Co. v. Woodman,
31 Me. 573 600
Jaycox, Re, 12 Blatchf. 209 864
Jefferson County Sav. Bank,
115 Ala. 317; 23 So. 48 972
Jegon, Ex parte, 12 Ch. D.
'503 1106
Jellenik v. Huron Copper, etc.
Co., 177 U. S. 1; 20 Sup.
Ct. 559 423
Jemison v. Citizens' Sav.
Bank, 122 N. Y. 135; 25
N. E. 264; 9 L. R. A. 708;
19 Am. St. Rep. 482 854
Jenkins v. Baxter, 160 Pa. St.
199; 28 Atl. 682 1250
V. John Good Cordage,
etc. Co., 56 N. Y. App. Div.
573; 68 N. Y. Supp. 239 1416
Jenner Institute of Preven-
tive Medicine, 15 Times L.
R. 394 999, 1000, 1001
Jenner's Case, 7 Ch. D. 132 1171
Jennings v. Bank of Califor-
nia, 79 Cal. 323; 21 Pac.
852; 12 Am. St. Rep. 145;
5 L. R. A. 233 573, 573, 574,
771, 775
V. Hammond, 9 Q. B. D.
225 260
, Re (1851), 1 Ir. Ch. 236 605,
608, 609, 610, 623, 769, 915
Jermain v. Lake Shore, etc.
Ry. Co., 91 N. Y. 483 1132, 1136
Jerome v. Cogswell, 204 U.
S. 1 540, 541, 543
V. McCarter, 94 U. S. 734 1439
Jersey City Gas Co. v. Dwight,
29 N. J. Eq. 242 .148, 149, 222,
245
Jersey City Paper Co., 69
N. J. Law 594 ; 55 Atl. 280 1066
Jessup V. Bridge, 11 Iowa
672; 79 Am. Dec. 513 1503,
1553, 1677
Jesup V. City Bank, 14 Wise.
331 1405, 1409, 1466, 1638
V. Illinois Central R. R.
Co., 43 Fed. 483 1306, 1306,
1310
Jewett v.- Valley Ry. Co., 34
Oh. St. 601 607, 607
V. West Somerville, etc.
Bank, 173 Mass. 54; 54 N.
E. 1085; 73 Am. St. Rep.
259 1380
J. G. Brill Co. V. Norton, etc.
Street Ry. Co., 189 Mass.
431 ; 75 N. E. 1090 84, 863
J. F. White Co. V. Carroll
(N. Car.), 59 S. E. 678 1503
Jhons V. People, 25 Mich. 499 126
TABLE OF CASES
[The references are to pages]
J. I. Case Plow Works v.
Finks, 81 Fed. 529; 26
C. C. A. 46 1617
Joel T. Bailey & Co. v. Snyder
Bros., 61 111. App. 472 407,
1371, 1376, 1377
Johannesburg Hotel Co.
(1891), 1 Ch. 119 643
John A. Roebling's Sons Co.
V. Barre, etc. Power Co., 76
Vt. 131; 56Atl. 530 1213, 1215
John Bridge & Co. v. Magrath,
4 New So. Wales State Rep.
441 85
John Hancock, etc. Ins. Co. v.
Worcester, etc. R. R. Co.,
149 Mass. 214; 21 N. E. 364 1476
John Moriey Bldg. Co. v. Bar-
ras (1891), 2 Ch. 386 1201, 1212,
1213, 1231
John V. Farwell Co. v. Wolf,
96 Wise. 10; 70N. W. 289;
71 N. W. 109; 37 L. R. A.
138; 65 Am. St. Rep. 22 844
Johns V. Johns, 1 Oh. St.
350 420
V. McLester, 137 Ala.
283; 34 So. 174; 97 Am.
St. Rep. 27 931, 943
Johnson v. Albany, etc. R. R.
Co., 54 N. Y. 416; 13 Am.
Rep. 607 428, 428, 615
V. Amberson, 140 Ala.
342; 37 So. 273 798
V. Bridgewater Iron Mfg.
Co., 14 Gray (Mass.) 274 1132,
1137
V. Bush, 3 Barb. Ch. 207 405
V. Corser, 34 Minn. 355;
25 N. W. 799 252, 252, 254
■». Crawfordsville, etc.
R. R. Co., 11 Ind. 280 229
V. Hume, 138 Ala. 564;
36 So. 421 422, 678
V. Kessler, 76 Iowa 411;
41 N. W. 57 149, 160
V. Langdon, 135 Cal.
624; 67 Pac. 1050; 87 Am.
St. Rep. 156 901, 906
V. Lyttle's Iron Agency,
5 Ch. D. 687 613, 657, 659, 663
V. Okerstrom, 70 Minn.
303; 73N. W. 147 117, 124,
229, 246, 247, 248, 917
V. Sage, 4 Idaho 758;
44 Pac. 641 1371, 1376, 1377
V. Somerville Dyeing
etc. Co., 15 Gray (Mass.)
216 616
Johnson v. Stoughton Wagon
Co. , 1 18 Wise. 438 ; 95 N. W.
394 1278, 1279
V. Stratton, 109 111.
App. 481 786
V. Underhill, 52 N. Y.
203 697, 782
V. Wabash, etc. Co., 16
Ind. 389 211
Johnson & Co., I. C. (1902),
2 Ch. 101 1497, 1498, 1525
Johnston v. Allis, 71 Conn.
207; 41 Atl. 816 176
V. Crawley, 25 Ga. 316;
71 Am. Dec. 173 398, 399
V. Elizabeth, etc. Ass'n,
104 Pa. St. 394 1378
V. Ewing Female Uni-
versity, 35 III. 518 119
V. Grumble, 19 So. Rep.
100 (Miss.) 297
V. Jones, 23 N. J. Eq.
216 996, 1000, 1210, 1212,
1225, 1250
V. Laffin, 103 U. S. 800 519,
694, 701
V. Renton, 9 Eq. 181 728,
747, 754, 755, 755, 757
Johnston Foreign Patents
Co. (1904), 2 Ch. 234 80
Johnston Harvester Co. v.
Clark, 30 Minn. 308 233, 233
Joint Stock Discount Co., 36
L. J. Ch. 150 898
V. Brown, 3 Eq. 139; 8
Eq. 381 75, 77, 97, 1265, 1280,
1282, 1282, 1283, 1368
Joliet Electric Light, etc.
Co. V. Ingalls, 23 111. App.
45 1371
Joliet Iron Co. v. Scioto Fire
Brick Co., 82 111. 548 1439
Jones V. Arkansas Mech., etc.
Co., 38 Ark. 17 1276
V. Aspen Hardware Co.,
21 Colo. 263; 40 Pac. 457;
52 Am. St. Rep. 220; 29
L. R. A. 143 147, 238, 238,
246, 247, 302
V. Atchison, etc. R. R.
Co., 150 Mass. 304; 23
N. E. 43; 5 L. R. A.
538 791
V. Bank of Leadville, 10
Colo. 464; 17 Pac. 272 1188
V. Bonanza Mining, etc.
Co. (Utah), 91 Pac. 273 652,
1166, 1226, 1227
V. Brinley, 1 East 1 421
TABLE OF CASES
[The references are to pages]
Jones V. Central Trust Co., 73
Fed. 568; 19 C. C. A. 569 1490,
1567
V. Cincinnati Type Foun-
dry Co., 14 Ind. 89 232, 384
V. Concord & Montreal
R. R. Co., 67 N. H. 119; 38
Atl. 120 469, 473, 488, 499,
563, 1039
V. Concord & Montreal
R. R. Co., 67 N. H. 234;
30 Atl. 614; 68 Am. St.
Rep. 650 469, 473, 488, 500,
1004
V. Dana, 24 Barb. (N. Y.)
395 222
V. Guaranty, etc. Co. 101
U. S. 622 65, 835
— ^ V. Habersham, 107 U. S.
174; 2 Sup. Ct. 336
V. Hale, 32 Oreg. 465;
52 Pac. 311
V. Hanna, 24 Tex. Civ.
App. 550; 60 S. W. 279
V. Harrison, 2 Ex. 52
V. Hilldale Cemetery Soc.
(Ky.), 65 S. W. 838 998, 1069
V. Imperial Bank, 23
Grant (Can.) 262 965, 968
V. Jolmson, 86 Ky. 530;
6 S. W. 582
V. Milton, etc. Turnpike
Co., 7 Ind. 547
V. Missouri-Edison Elec-
tric Co., 144 Fed. 765; 75
C. C. A. 631 240, 245. 263,
962, 979,' 1083
V. Morrison, 31 Minn.
140; 16N.W.854 81,496,499
504, 509, 517, 1001, 1199,
1299, 1319, 1322
V. Nassau Suburban
Home Co., 103 N. Y. Supp.
1089; 53 N. Y. Misc. 63
V. Pearl Mining Co., 20
Colo. 417; 38 Pac. 700
V. Schlapback, 81 Fed.
274 1616, 1617
V. Seligman, 81 N. Y. 190
1582
V. Sisson, 6 Gray (Mass.)
288 604
V. Smith (Tex.), 87 S. W.
210 289, 293
V. Terre Haute, etc. R.R.
Co., 57 N. Y. 196 497, 501, 746,
1116, 1132, 1133, 1477
V. Vance Shoe Co., 92 111.
App. 158 593, 594, 1242, 1247
837
1317
1328
341
1274
1045
1064
940
Jones V. Williams, 139 Mo. 1 :
39S.W.486; 40S.W.353;
61 Am. St. Rep. 436; 37
L. R. A. 682 880, 1078, 1213,
1251, 1348, 1374
, Ex parte (1900), 1 Ch.
220 167
, Ex parte, 27 L. J. Ch.
666 417, 524, 525, 664, 702,
702
Jones, Lloyd & Co., 41 Ch. D.
159 642
Jones's Case, 6 Ch. 48 205
Jordan v. Richmond Home
for Ladies (Va.), 56 S. E.
730 380, 380
Jordan, etc. Co. v. Collins, etc.
Co., 107 Ala. 572; 18 So.
137 1069, 1211
Joseph V. Holroyd, 22 W. R.
614 783
V. Raff, 82 N. Y. App.
Div. 47; 81 N. Y. Supp.
546; 176 N. Y. 611; 68
N. E. 1118 519, 521
Joseph Bancroft & Sons Co. v.
Bloede, 106 Fed. 396; 45
C. C. A. 354 ; 52 L. R. A. 734 76
Josephs V. Prebber, 3 B. & C.
639 7, 259
Joshua Stubbs, Ltd. (1891), 1
Ch. 475 1581, 1598
Joslyn V. St. Paul Distilling
Co., 44 Minn. 183 ; 46 N. W.
337 693, 733, 733, 733
Journal Pub. Club, 30 N. Y.
Misc. 326; 63 N. Y. Supp.
465 1249
Journalists Fund of Phila-
delphia, Be, 8 Phila. 272 94
Joy V. Jackson, etc. Plank
Road Co., 11 Itoch. 155 1521
Judah V. American, etc. Ins.
Co., 4 Ind. 333 147, 175, 219,
606
Juker V. Com. ex rel. Fisher, 20
Pa. St. 484 1008, 1011, 1249
Julian V. Central Trust Co.,
193 tJ. S. 93; 24 Sup. Ct.
399 1632
JuUard v. Walker, 54 111. App.
517 1379
Junction R. R. Co. v. Bank of
Ashland, 12 Wall. 226
V. Cleneay, 13 Ind. 161
V. Reeve, 15 Ind. 236
Jung Brewing Co. v. Comm.
(Ky.), 96 S. W. 476
1400,
1401
1423
211
•
368
cxiu
TABLE OF CASES
[The references are to pages]
Just V. State Bank, 132 Mich.
600; 94 N. W. 200 572, 771
J. W. Butler Paper Co. v.
Cleveland, 220 111. 128; 77
N. E. 99; 110 Am. St. Rep.
230 161
K
Kadish v. Garden City, etc.
Bldg. Ass'n, 151 111. 531;
38 N. E. 236; 42 Am. St.
Rep. 256
Kaemmerer v. Kaemmerer
(111.), 83 N. E. 133
Kaeppler v. Redfleld Creamery
Co., 12 S. Dak. 483; 81
N. W. 907 287, 288
Kahn v. Bank of St. Joseph,
70 Mo. 262
Kain v. Smith, 80 N. Y. 458
Kaiser v. Lawrence Savings
Bank, 56 Iowa 104; 8
N. W. 772; 41 Am. Rep.
85 31, 117, 118, 242, 246, 251
Kalamazoo Novelty Mfg. Co.,
36 Mich. 327
Kalamazoo Spring etc. Co. v.
Winans, 106 Mich. 193; 64
N. W. 23
Kalbach v. Clark (Iowa), 110
N. W. 599
Kampman v. Tarver, 87 Tex.
491; 29 S. W. 768
Kane v. Bloodgood, 7 Johns.
Ch. (N. Y.) 90 1120, 1122
, Re, 64 N. Y. App. Div.
566; 72 N. Y. Supp. 333
852
590
767
1615
1379
1069
1151
484
1137,
1157
Kansas City v. Vineyard, 128
Mo. 75; 30 S. W. 326
Kansas City Hay Press Co. v.
Devol, 72 Fed. 717 592, 1210
Kansas City Hotel Co. v.
Harris, 51 Mo. 464
V. Hunt, 57 Mo. 126
Kansas City Southern Ry. Co.
V. King (Ark.), 85 S.W. 1131
Kansas Loan, etc. Co. v.
Electric Ry. etc. Co., 108
Fed. 702
Kansas Pac. Ry. Co. v. Bayles,
19 Colo. 348; 35 Pac. 744
1614, 1616, 1644
V. "Wood, 24 Kans. 619 1609
Kansas Valley Nat. Bank v.
Rowell, 2 Dillon 371 835, 859
Kansas, etc. Ry. Co. v.
Dorough, 72 Tex. 108; 10
S. W. 711 1609
25
483
492
1634
1563
1607,
Kantzler v. Bensinger, 214
111. 589; 73 N. E. 874 1030
Karberg's Case (1892), 3 Ch. 1 182,
184, 187, 279
Karn v. Rorer Mining Co'.,
86 Va. 754; 11 S. E. 431 1650
Karnes v. Rochester, etc.
R. R. Co., 4 Abb. Pr. n. s.
(N. Y.) 107 1110, 1351
Karsch v. Pottier, etc. Co., 82
N. Y App. Div. 230; 81
N. Y Supp. 782 1377
Karuth'a Case, 20 Eq. 506 1170,
1171, 1175
Kassler v. Kyle, 28 Colo. 248;
65 Pac. 34 540
Katama Land Co. v. Jemegan,
126 Mass. 155 600
Katz V. H. & H. Mfg. Co., 109
N. Y. App. Div. 49; 95
N.Y. Supp. 663; 183 N.Y.
578 585
Kaufman v. Charlottesville
Woolen Mills, 93 Va. 673;
25 S. E. 1003 1135, 1144
Kavanaugh v. Commonwealth
Trust Co., 181 N. Y. 121;
73 N. E. 562; 103 N. Y.
App. Div. 95; 92 N. Y.
Supp. 543 937, 943, 956, 978,
979
Kaye v. Croydon Tramways
Co. (1898), 1 Ch. 358 82, 1004
Kean v. Johnson, 9 N. J. Eq.
401 52, 949
V. Union Water Co., 52
N. J. Eq.813; 31AtL282;
46 Am. St. Rep. 538 1250,
1250
Keane v. Moffly (Pa.), 66 Atl.
319 1664
Keans v. New York, etc.
Ferry Co., 17 N. Y. Misc.
272; 40 N. Y. Supp. 366 1296
Keatinge v. Paringa Con-
solidated Mines (1902),
W. N. 15 354
Keeler v. Atchison, etc. Ry.
Co., 92 Fed. 545; 34
C. C. A. 523 1632
Keen v. Whittington, 40 Md.
489 235
Keene v. Van Reuth, 48 Md.
184 234, 241
Keene Five Cent Savings
Bank v. Lyon County, 90
Fed. 523 1432
Keeney v. Converse, 99 Mich.
316; 58 N. W. 325 967, 1263
TABLE OP CASES
[The references are to pages]
Keller v. Eureka, etc. Mfg.
Co., 43 Mo. App. 84; 11
L. R. A. 472 427, 430
, Re, 116 N. Y. App. Div.
58 1001, 1006
Kellerman v. Maier, 116 Cal.
416; 48 Pac. 377 631, 1313
Kelley v. Biddle, 180 Mass.
147; 61N. E. 821
V. Collier, 11 Tex. Civ.
App. 353; 32 S. W. 428
Kelley, Maus & Co. v. O'Brien
Varnish Co., 90 111. App. 287
Kellock V. Enthoven, L. R. 9
Q. B. 241 783, 783
Kellogg V. Stookwell, 75 111.
68 697, 782
Kelly V. Browning, 113 Ala.
420; 21 So. 928
V. Calhoun, 95 U. S. 710
V. Ning Yung Benev.
Ass'n (Cal.), 84 Pac. 321
V. Receiver, 10 Biss. 151
80
1353
84
1661
409
V. Trustees of Ala., etc.
R. R. Co., 58 Ala., 489
853
1573,
1573
1603,
1603
278,
Kelner v. Baxter, 2 C. P. 174
280, 280, 306, 307, 309
Kelsey v. Nat. Bank, 69 Pa.
St. 426 1235
V. New England Street
Ry. Co., 62 N. J. Eq. 742;
48 Atl. 1001 1303, 1334
V. Sargent, 40 Hun
(N. Y.) 150 1298, 1321
Kemble v. Milville, 69 N. J.
Law 637; 56 Atl. 311 108
V. Wilmington, etc. R. R.
Co., 13 Phila. 469 1401
Kemmerer v. Haggerty, 139
Fed. 693 _ 956, 970
Kempson v. Saunders, 4 Bing.
6 784
Kennebec, etc. R. R. Co. v.
Kendall, 31 Me. 470 600
V. Portland, etc. R. R.
Co., 54 Me. 173 1627
Kennedy v. Acadia Pulp, etc.
Co., 38 Nova Scotia 291 185
V. California Sav. Bank,
101 Cal. 495; 35 Pac. 1039;
40 Am. St. Rep. 69 846
V. I. C. & L. R. Co., 3
Fed. 97 1616
V. St. Paul, etc. R. R. Co.
2 Dill. 448 1604
V. St. Paul, etc. R. R. Co.,
. 5 Dill. 519 1649, 1649
Kennedy v. Thompson, 97 N.
Y. App. Div. 296; 89 N. Y.
Supp. 963 786
, Be, 75 N. Y. App. Div.
188; 77 N. Y. Supp. 714 895
Kennett v. Woodworth-Mason
Co., 68 N. H. 432; 39 Atl.
585 103
Kent V. Freehold Land Co., 3
Ch. 493 178
V. Lake, etc. Co., 144 U. S.
75; 12 Sup. Ct. 650 1485, 1646
V. Quicksilver Mining
Co., 78 N. Y. 159 439, 439, 439,
440, 441, 444, 445, 454,
584, 966
Kent County Agriculture Soc.
V. Houseman, 81 Mich. 609;
46 N. W. 15 1185
Kent Tramways Co., Re, 12
Ch. D. 312 295
Kent's Case, 39 Ch. D. 259 643
Kenton Furnace, etc. Co. v.
McAlpin, 5 Fed. 737 999, 1005,
1006, 1006, 1007, 1024, 1025,
1123
Kenton Ins. Co. v. Bowman,
84Ky. 430; 1 S. W. 717 768,
772, 772
Kentucky Mutual, etc. Co. ■;;.
Schaefer, 27 Ky. Law Rep.
657; 85 S. W. 1098 180
Kentucky Tobacco Ass'n v.
Ashby, 9 Ky. Law Rep. 109
1373
Kenyon v. Fowler, 155 Fed.
107 618, 706
Keokuk, etc. R. R. Co. v.
Missouri, 152 U. S. 301; 14
Sup. Ct. 592 1552
Ker's Case, 4 A. C. 549 705, 800
Kem V. Arbeiter, etc. Verein,
139 Mich. 233; 102 N. W.
746 935
V. Chicago, etc. Ass'n, 40
111. App. 356; affirmed
s. c. 140 111. 371 228
V. Day, 45 La. Ann. 71 ;
12 So. 6 1174, 1177
Kern's Estate, 176 Pa. St.
373; 35 Atl. 231 701,719,723,
808
Kemoohan, Re, 104 N. Y. 618 ;
11 N. E. 149 ■ 502, 1137, 1137,
1143, 1150, 1156
Kerr v. Urie, 86 Md. 72; 37
Atl. 789; 63 Am. St. Rep.
493; 38 L. R. A. 119 620, 708
KerridgeD.Hesse,9C.&P.200 307
TABLE OP CASES
[The references are to pages]
Kessler v. Ensley Co., 123
Fed. 546 936, 938, 952, 967
Kessler & Co. ■». Ensley Co.,
129 Fed. 397 938, 939, 967
V. Ensley Co., 141 Fed.
130; 148 Fed. 1019 1302
Ketchum v. Duncan, 96 U. S.
659 1343, 1451, 1452, 1452,
1455, 1455, 1456, 1622, 1628
V. Mobile, etc. R. R. Co.,
2 Woods 532 1493
V. St. Louis, 101 U. S.
306 1500, 1677
Kettle River Mines «. Bleasdel,
7 Brit. Columb. 507 650
Key & Son, W. (1902), 1 Ch.
467 428, 771, 793
Keystone Nat. Bank v. Palos
Coal, etc. Co. (Ala.), 43 So.
570 1554
Kharaskhoma Syndicate
(1897), 2 Ch. 451 640, 640
Kidd V. New Hampshire
Traction Co., 72 N. H. 273;
56 Atl. 465 974
■!;. New Hampshire Trac-
tion Co. (N. H.), 66 Atl. 127
1083, 1164, 1189, 1325
Kidwelly Co. v. Raby, 2 Price
93 210
Kiely v. Kiely, 3 Ont. App.
438 1164, 1165
Killen v. Barnes, 106 Wise.
546; 82 N. W. 536 1274, 1285,
1355, 1357
Killingsworth v. Portland
Trust Co., 18 Oreg. 351 ; 23
Pac.66; 7L.R.A.638; 17
Am. St. Rep. 737 53
Kik)atrick v. Penrose, etc.
Co., 49 Pa. St. 118; 88 Am.
Dec. 497 1237
Kimball v. City of Cedar
Rapids, 99 Fed. 130 970
V. Goodbum, 32 Mich.
10 1378
V. New England, etc.
Grate Co., 168 Mass. 32; 46
N. E. 432 1239
V. Union Water Co., 44
Cal. 173; 13 Am. Rep. 157 751
Kimbell v. Hydraulic Press
Brick Co., 119 Fed. 102; 55
C. C. A. 162 967
Kimber v. Gunnell Gold, etc.
Co., 126 Fed. 137; 61
C. C. A. 203 1527
Kincaid's Case, 11 Eq. 192 1173,
1175
King V. FoUet, 3 Vt. 385 1134,
1156
V. Housatonic R. R. Co.,
45 Conn. 226 1515
V. Marshall, 33 Beav. 565 66,
1513, 1519
V. Ohio, etc. Ry. Co., 7
Biss. 529 1620
Paterson, etc. R. R. Co.,
29 N. J. Law 82; 29 N. J.
Law 504 1120, 1121, 1123
V. Tuscumbia R. R. Co.,
7 Pa. L. J. 166; 14 Fed.
Cas. 554 1499, 1589
King's Case, 6 Ch. 196 618, 621
Kingsbury Collieries and
Moore's Contract (1907), 2
Ch. 259 35, 37, 60, 61, 70, 97
Kingston Cotton Mills (1896),
1 Ch. 6 1363
(No. 2), (1897) 2 Ch.279 1363
Kingstown Yacht Club (1888),
21 L. R. Ir. 199 425, 613, 768
Kinnan v. Forty-second St.,
etc. Ry. Co., 140 N. Y.
183; 35 N. E. 498 429, 430,
430, 748
V. Sullivan County Club,
26 N. Y. App. Div. 213; 50
N. Y. Supp. 95 571, 1031
Kinney v. Crocker, 18 Wise. 74 1617
Kinsman v. Fisk, 83 Hun
(N. Y.) 494; 31 N. Y.
Supp. 1045 1317
Kinston, etc. R. R. Co. v.
Stroud, 132 N. Car. 413; 43
S. E. 913 221
Kipling V. Todd, 3 C. P. D.
350 196, 1174
Kirby's Case, 46 L. T. 682 641
Kirk V. Bell, 16 Q. B. 290 1205
V. Nowill, 1 T. R. 118 580,
581, 657
Kirkcaldy St am Laundry
Co., 6 Fraser (Sc.) 778 137
Kirkman v. Carlstadt Chemi-
cal Co., 36 N. Y. Misc. 822;
74 N. Y. Supp. 865 908
Kirkpatrick v. American
Alkali Co., 140 Fed. 186 449
V. Eastern Milling, etc.
Co. (1), 135 Fed. 144 408
V. Eastern Milling &
Export Co., 137 Fed. 387;
69 C. C. A. 579 366
Kirkpatrick's Will, Re, 22
N. J. Eq. 463 55
Kirkstall Brewery Co., 5 Ch.
D. 535 532
TABLE OF CASES
[The references are to pages]
992
1437
Klrwin v. Washington Match
Co., 37 Wash; 285; 79 Pao.
928
Kissel V. Chicago, etc. R. R.
Co., 44 N. Y. Misc. 156; 89
N. Y. Supp. 796
Kisterbock's Appeal, 127 Pa.
St. 601; 18 Atl. 381; 14
Am. St. Rep. 868 683, 735
Kitchens v. J. H. Teasdale
Commission Co., 105 Mo.
App. 463; 79 S. W. 1177 1260,
1302, 1328
Kittel V. Augusta, etc. R. R.
Co., 84 Fed. 386; 28
C. C. A. 437 1323
Klaus, In re, 67 Wise. 401 ; 29
N. W. 582 562, 571, 745
Klein v. Funk, 82 Minn. 3;
84 N. W. 460
V. Independent Brewing
Ass'n (111.), 83 N. E. 434
V. Jewett, 26 N. J. Eq.
474 1616, 1618
Klopp V. Lebanon Bank, 46
- Pa. St. 88
Knabe v. Ternot, 16 La. Ann.
13
Knapp V. Publishers, etc. Co.,
127 Mo. 53; 29 S. W. 885
V. S. Jarvis Adams Co.,
135 Fed. 1008; 70 C. C. A.
536 1110, 1111
Kneeland v. American Loan,
etc. Co., 136 U. S. 89; 10
Sup. Ct. 950 1560, 1565, 1612,
1612
V. Brass Foundry, etc.
Works, 140 U. S. 592; 11
Sup. Ct. 837 1640
Knickerbocker Importation
Co. V. State Board of As-
sessors (N. J.), 65 Atl.
913 518, 522
Knickerbocker Investment
Co. V. Voorhees, 100 N. Y.
App. Div. 414; 91 N. Y.
Supp. 816 1054
Knickerboker Trust Co. v.
Davis, 143 Fed. 587 348, 352,
356
V. Myers, 133 Fed. 764;
139 Fed. Ill 618
V. Oneonta, etc. Ry. Co.,
101 N. Y. Supp. 241 1595, 1626
V. Penacock Mfg. Co.,
100 Fed. 814 1495
Knight V. Barber, 16 M. & W.
66 423
cxvii
1314
1312
769
1312
497
Knight V. Knight, 2 Giff. 616 424
V. Old Nat. Bank, 3
Cliff. 429 571, 572
Knight's Case, 2 Ch. 321 658, 667,
911
Knights, etc. of America v.
Weber, 101 111. App. 488 557,
557
Knights of Maccabees v.
Searle (Nebr.), 106 N. W.
448 374, 379
Knights Templars', etc. Co.
V. Jarman, 104 Fed. 638;
44 C. C. A. 93 587, 590
Knoop V. Bohmrich, 49 N. J.
Eq. 82; 23 Atl. 118 944, 966
Knowles v. Sandercock, 107
Cal. 629; 40 Pac. 1047 74, 75,
75,77
Knowles Loom Works v. Ryle,
97 Fed. 730; 38 C. C.
A. 494 1537
Knowlton v. Conrees, etc.
Spring Co., 57 N. Y. 518 632
Knox V. Childersburg Land
Co., 86 Ala. 180; 5 So. 578 211,
213 632
V. Eden Musee, 148 N. Y.
441; 42N. E. 988; 51 Am.
St. Rep. 700; 31 L. R. A.
779 741
Knox County v. Aspinwall, 21
How. 539 1220, 1448
Koch V. Nat. Union Bldg.
Ass'n, 35 III. App. 465;
B.C., 137 111. 497; 27 N. E.
530 1372
V. North Ave. Ry. Co.,
75 Md. 222; 23 Atl. 463;
15 L. R. A. 377 232
Kodak, Ltd. v. Clark (1903),
1 K. B. 505 879
Koebel v. Landlords' Pro-
tective Bureau, 210 111.
176; 71 N. E. 362 372
Koehler v. Black River,
etc. Co., 2 Black 715 407, 408,
1317
Kolff V. St. Paul Fuel Ex-
change, 48 Minn. 215; 50
N. W. 1036 562, 566
Koppel V. Mass. Brick Co.,
192 Mass. 223; 78 N. E.
128 283, 290
Koster v. Pain, 41 N. Y. App. .
Div. 443; 58 N. Y. Supp.
865 319, 1347
Kozminsky, Re, 16 Vict. L. R.
137 603
TABLE OF CASES
[The references are to pages]
Kraft V. Grififon Co., 82 N. Y.
App. Div. 29; 81 N. Y.
Supp. 438 628, 630, 1404
V. West Side Brewery-
Co., 219 ni. 205; 76 N. E.
372 86
Kraniger v. People's Bldg.
Soc, 60 Minn. 94; 61
N. W. 904 109, 142, 859, 1377
Kreissl v. Distilling Co., 61
N. J. Eq. 5; 47Atl. 471 1050,
1052, 1053, 1053
Krisch v. Interstate Fisheries
Co., 39 Wash. 381; 81 Pao.
855 524
Kroegher v. Calivada Coloni-
zation Co., 119 Fed. 641;
56 C. C. A. 257 1245, 1318,
1324, 1340, 1341, 1344
Kropholler v. St. Paul, etc.
Ry. Co., 2 Fed. 302 1628, 1660
Krotz V. Louisiana Const. Co.
(La.), 45 So. 276 1596
Kuser v. Wright, 52 N. J. Eq. '
825; 31 Atl. 397 1222, 1225
Kyle V. Wagner, 45 W. Va.
349; 32 S. E. 213 974, 1188
Kyshe v. Alturas Gold, 4
Times L. R. 331 1251
Lacaff V. Dutch Miller, etc.
Co., 31 Wash. 566; 72 Pac.
112 428
Lacaze & Reive v. Creditors,
46 La. Ann. 237 ; 14 So. 601 1375
Lackawanna, etc. Co. *.
Fanners' L. & T. Co., 176
U. S. 298; 20 Sup. Ct. 363 1567,
1571
Lackey v. Richmond, etc. R.
Co., 17 B. Monr. (Ky.) 43 613,
614
La Compagnie de Mayville v.
Whitley (1896), 1 Ch. 788 932,
932, 934, 1002, 1164, 1200,
1201
Ladies' Dress Ass'n v. Pul-
brook (1900), 2 Q. B. 377 223,
531, 667, 668
Lady Bryan Mining Co., 14
Fed. Cas. 926; 1 Sawy.
349; 2 Abb. (U. S.) 537 416
Lady Forrest (Murchison)
Gold Mine (1901), 1 Ch. 582 322,
323, 329
Ladywell Mining Co. v.
Brooks, 35 Ch. D. 400 323
LaFayette Club, 21 Pa. Co.
Ct. Rep. 243 94
Lafayette Co. v. Neely, 21
Fed. 738 960, 960
Lafferty's Estate, 154 Pa. St.
430; 26 Atl. 388 1054
Laflin, etc. Powder Co. v.
Sinsheimer, 46 Md. 315; 24
Am. Rep. 522 221, 222
Lagarde v. Anniston Lime,
etc. Co., 126 Ala. 496; 28
So. 199 1340
Lagrone v. Timmerman, 46
S. Car. 372; 24 S. E. 290 79
Lagunas Nitrate Co. v. La-
gunas Syndicate (1899), 2
h. 392 272, 274, 277, 316, 316,
329, 330, 330, 334, 1259,
1275, 1326
V. Schroeder & Co., 85
L. T. 22 1121
Lail V. Mt. Sterling Coal Road
Co., 13 Bush (Ky.) 32 609
Laing v. Burley, 101 111. 591 696
V. Queen City Ry. Co.
(Tex.), 49 S. W. 136 1639
Laird v. Birkenhead 'Ry. Co.,
Johns 500 395
Lake Erie, etc. Ry. Co. v.
Griffin, 92 Ind. 487 1632
Lake Ontario Shore R. R.
Co. V. Curtiss, 80 N. Y. 219 208,
209
Lake Ontario, etc. R. R. Co.
V. Mason, 16 N. Y. 451 116,
119, 202, 604, 604
Lake St. El. R. Co. v. Ziegler,
99 Fed. 114; 39 C. C. A.
431 645, 1672
Lake Superior Bldg. Co. v.
Thompson, 32 Mich. 293 230
Lake Superior Iron Co. v.
Drexel, 90 N. Y. 87 636
Lake Superior Navigation Co.
V. Morrison, 22 Up. Can.
C. P. 217 158
Lakewood Gas Co. v. Smith,
62 N. J. Eq. 677; 51 Atl.
152 754
Lallande v. Ingram, 19 La.
Ann. 364 804
Lamar Land, etc. Co. v. Bel-
knap Sav. Bank, 28 Colo.
344; 64 Pac. 210 1503, 1650
Lamb & Sons v. Dobson, 117
Iowa 124; 90 N. W. 607 138
Lamb Knit Goods v. Lamb
Glove & Mitten Co., 120
Mich. 159; 78 N. W. 1072 387
TABLE OP CASES
[The references are to pages]
Lambert v. Neuchatel As-
phalts Co., 51 L. J. Ch. 882 1099
V. Northern Ry., 18 W.
R. 180 1238, 1240, 1243
Lambertville Nat. Bank v.
MoCready, etc. Co. (N. J.),
15 Atl. 388 1586
Lamkin v. Baldwin, etc. Co.,
72 Conn. 57; 43 Atl. 593,
1042; 44 L. R. A. 786 297, 299
Lamm v. Port Deposit Co., 49
Md. 233; 33 Am. Rep.
246 1362
Lamonby v. Carter (1903), 1
Ch. 352 24
Lamphear v. Buckingham, 33
Conn. 237 1582
Lamson v. Hutchings, 118
Fed. 321 619
Lamson Store Service Co., Re,
1 Ch. 875 542
Lanaux, Succession of, 46 La.
Ann. 1036; 15 So. 708; 25
L. R. A. 577 804
Lancashire Cottonspinning
Co. V. Greatorex, 14 L. T.
N. 8. 290 898
Lancaster v. Amsterdam Imp.
Co., 140 N. Y. 576; 35
N. E. 964; 24 L. R. A. 322 244,
848, 861
Lancaster Starch Co. v.
Moore, 62 N. H. 671 652
Land Credit Co. v. Fermory,
5 Ch. 763 1279, 1280
Land, Log & Lumber Co. v.
Mclntyre, 100 Wise. 245;
75 N. W. 964 961, 984
Land Mortgage Bank of
Florida, 3 Manson 164 1672
Land Title, etc. Co. v. As-
phalt Co., 127 Fed. 1; 62
C. C. A. 23 984
Landers v. Frank Street
M. E. Church, 114 N. Y.
626; 21 N. E. 420 1035
Landis v. Saxton, 105 Mo.
486; 16S. W. 912; 24 Am.
St. Rep. 403 1288
V. Sea Isle, etc. Co., 53
N. J. Eq. 654; 33 Atl. 964 982,
982
V. Western Pa. R. R. Co.,
133 Pa. St. 579; 19 Atl. 556 1664
Landman v. Entwistle, 7 Ex.
632 306, 310
Landowners', etc. Drainage
Co. V. Ashford, 16 Ch. D.
411 64, 1221
Lands Allotment Co. (1894),
1 Ch. 616 74, 1265, 1280, 1282,
1283, 1288
Lane v. Brainard, 30 Conn.
565 189, 192, 1201
V. fiaughman, 17 Oh.
St. 642; 93 Am. Dec. 653 1561
V. Macon, etc. Ry. Co.,
96 Ga. 630; 24 S. E. 157 1612
Lang V. Lang, 57 N. J. Eq.
325; 41 Atl. 705 1137, 1149,
1149, 1149, 1149
V. Louisiana Tanning
Co., 56 Fed. 675 960
V. Mayor, etc. of Bay-
onne (N. J.), 68 Atl. 90 244
Langan v. Francklyn, 29
Abb. N. C. (N. Y.) 102;
20 N. Y. Supp. 404 976, 1000,
1042, 1058, 1227
Langdon v. Fogg, 14 Abb.
N.-C. (N. Y.) 435 n 969, 1290
V. Vermont, etc. R. R.
Co., 54 Vt. 593 1622, 1640, 1640
Lange v. Reservation Mining,
etc. Co. (Wash.), 93 Pac.
208 1188
V. Royal Highlanders
(Nebr.), 106 N. W. 224 586
Langham v. East Rose Wheal,
etc. Co., 37 L. J. Ch. 253 186
Langhome v. Richmond City
Ry. Co., 91 Va. 364; 22
S. E. 357 380
Langley v. Langley, 31 Ont.
Rep. 254 1239
Langolf V. Seiberlitch, 2 Pars.
Eq. Cas. (Pa.) 64 949, 957,
974, 1068
Langston v. Greenville, etc.
Imp. Co., 120 N. Car. 132;
26 S. E. 644 1079
V. S. Car. R. R. Co., 2
S. Car. 248 1423, 1441, 1449,
1460, 1472
Lanier Lumber Co. v. Rees,
103 Ala. 622; 16 So. 637;
49 Am. St. Rep. 57 775
Lanigan v. North, 69 Ark.
62; 63 S. W. 62 788
Lankershin Ranch Land, etc.
Co. V. Herberger, 82 Cal.
600; 23 Pac. 134 768
Lantry v. Wallace, 182 U. S.
536; 21 Sup. a. 878 521
Lapham v. Philadelphia, etc.
R. R. Co., 4 Pennewill's
Rep. (Del.) 421; 56 Atl.
366 381
TABLE OF CASES
[The references are to pages]
Lapsley v. Merchants' Bank,
105 Mo. App. 98; 78 S. W.
1095 1109
Laredo Imp. Co. v. Stevenson,
66 Fed. 633; 13 C. C. A.
661 484
Larimer v. Beardsley, 130
Iowa 706; 107 N. W. 935 712
Larking, Ex parte, 4 Ch. H.
566 1263, 1276, 1343
Larkworthy's Case (1903), 1
Ch. 711 669
Laroque v. Beauchemin
(1897), A. C. 358 642, 645
Larsen v. U. S. Mortgage, etc.
Co. 104 N. Y. App. Div. 76;
93 N. Y. Supp. 610 1616
Larwill v. Burke, 19 Ohio
Circ. a. 513 1122
Lasell V. Thistle Gold Co., 11
Brit. Columbia 466 1347
Lassell v. Hannah, 37 Can.
Sup. a. 324 1347
Lathom v. Greenwich Ferry
Co., 72 L. T. 790 1647, 1648,
1655
Lathrop v. Kneeland, 46
Barb. (N. Y.) 432 483, 493
Latimer v. Bard, 76 Fed.
536 489, 492
V. Citizens' State Bank,
102 Iowa 162; 71N.W.225 74
V. Herzog Teleseme Co.,
75N. Y.App. Div. 522; 78
N. Y. Supp. 314 894, 904
La Tosca Club v. La Tosca
Club, 23 App. B. C. 96 371
Laughlaud v. Miller, Laugh-
land & Co., 6 Fraser (Sc.)
413 . 1348
Laughlin v. U. S. Rolling
Stock Co., 64 Fed. 25 1646
Laugier v. Victorian, etc.
Power Co., 16 Vict. L. R. 64 160
Lauman's Appeal, 68 Pa. St.
88 811
Laurel Springs Land Co. v.
Fougeray, 50 N. J. Eq.
756; 26 Atl. 886 1112
Law V. Alley, 67 N. H. 93 ; 29
Atl. 636 502
V. Fuller (Pa.), 66 Atl.
754 942, 1318, 1344
Law Guarantee Soc. v. I3ank
of England, 24 Q. B. D.
406 69, 796, 813, 814
Law Guarantee, etc. Soc. v.
Russian Bank (1905), 1 K.
B. 815 1552
Law Guarantee & Trust Soc.
V. Mitcham, etc. Brewery
Co. (1906), 2 Ch. 98 1557, 1557
Lawford v. Billericay Rural
Dist. Council (1903), 1 K.
B. 772 391, 395, 826
Lawrence v. Curtis, 191 Mass.
240 947, 1353
V. Fox, 20 N. Y. 268 1508
V. Maxwell, 53 N. Y. 19 807
w. Steams, 79 Fed. 878;
83 Fed. 738 1288
Lawrence's Case, 2 Ch. 412 177,
214
Lawrie v. Silsby, 76 Vt. 240;
56 Atl. 1106; 104 Am. St.
Rep. 927 117, 148
Lawshe v. Royal Baking Pow-
der Co., 104 N. Y. Supp.
361 901
Lawson v. Black Diamond,
etc. Co. (Wash.), 86 Pac.
1120 1078
Lawton v. Hickman, 9 Q. B.
563 423
Lawyers Advertising, etc. Co.
V. Consolidated Ry., etc.
Co., 187N.Y.395; 80N.E.
199 89, 89, 90, 1000
Laxon & Co. (1892), 3 Ch. 555
120, 223, 241
Lazear v. Nat. Union Bank,
52 Md. 78 ; 36 Am. Rep. 355 844
Lea V. Iron Belt Mercantile
Co. (Ala.), 42 So. 415 628, 880
Leach v. Forbes, 11 Gray
(Mass.) 506; 71 Am. Dec.
732 786
Leader Printing Co. v. Lowiy,
9 Oy. 89; 59 Pac. 242 246
Leahy v. Lobdell, 80 Fed. 665 ;
26 C. C. A. 75 810
Leary v. Blanchard, 48 Me.
269 1377
V. Columbia River, etc.
Co., 82 Fed. 775 1111
V. Interstate Nat. Bank
(Tex.), 63 S. W. Rep. 149 1203
Leas Hotel Co. (1902), 1 Ch.
332 1520, 1606
Leathers v. Janney, 41 La.
Ann. 1120; 6 So. 884; 6 L.
R. A. 661 72
Leavengood v. McGee (Oreg.),
91 Pac. 453 _ 241
Le^ivenworth v. Chicago, etc.
Ry. Co., 134 U. S. 688; 10
Sup. a. 708 225, 225, 1324,
1324
TABLE OF CASES
[The references are to pages]
Leavitt v. Fisher, 4 Duer
(N. Y.) 1 719, 721
V. Oxford, etc. Ry. Co.,
3 Utah 265; 1 Pac. 356 651,
1201, 1205, 1213, 1303
Leazure v. Hillegas, 7 S. & R.
(Pa.) 313 404, 404, 846
Lelsanon, etc. Co. v. Adair, 85
Ind. 244 1225, 1228
Le Blanc, Be, 14 Hun (N. Y.)
8; 75N. Y. 598 1121
Le Bosquet v. Myers (Ind.
Ty.), 103 S. W. 770 1249
Ledoux V. La Bee, 83 Fed. 761
1617
Ledwich v. McKim, 53 N. Y.
307 1410, 1425
Lee V. Neuchatel Asphalte
Co., 41 Ch. D. 1 1096, 1099,
1100
V. Pennsylvania Trac-
tion Co., 105 Fed. 405 1559,
1563
Lee Mut. Fire Ins. Co. v. State,
60 Miss. 395 25
Leeds Banking Co, 1 Ch. 231
501, 622, 624, 790
Leeds Estate, etc. Co. v.
Shepherd, 36 Ch. D. 787 1094,
1241, 1241, 1264, 1265, 1267,
1268, 1268, 1279, 1284
Leeds and Hanley Theatres
(1902), 2 Ch. 809 322, 332, 334
Leeds, etc. Ry. Co. v. Feam-
ley, 4 Ex. 26 623
Lees Brook Spinning Co.
(1906), 2 Ch. 394 542
Leffingwell v. Elliott, 8 Pick.
(Mass.) 455; 19 Am. Dee.
343 304
Lefroy v. Gore, 1 Jo. & Lat.
571 309, 337, 337, 337
Legal Aid Society v. Co-
operative Legal Aid Soci-
ety, 41 N. Y. Misc. 127; 83
N. Y. Supp. 926 372
Legendre & Co. v. Brewing
Ass'n, 45 La. Ann. 669; 12
So. 837; 40 Am. St. Rep.
243 908, 908
Legg V. Mathieson, 2 Giff.
71 1546
Legg & Co. V. Dewing, 25 R.
1.568; 57Atl. 373 1360
Leggett V. Bank of Sing Sing,
24 N. Y. 283 774, 775
V. New Jersey, etc. Bank-
ing Co., 1 N. J. -Eq. 541; 23
Am. Dec. 728 407
Legrand v. Manhattan Mer-
cantile Ass'n, 80 N. Y. 638
227,
278
Lehigh Coal, etc. Co. v. Cen-
tral R. R. Co., 34 N. J. Eq.
88 1466, 1678
V. Central R. R. Co., 35
N. J. Eq. 349
V. Central R. R. Co., 42
N. J. Eq. 591; 8 Atl. 648
Lehigh Valley Coal Co. v.
Hamblen, 23 Fed. 225
Lehman v. Clark, 174 111.
279; 51 N. E. 222; 43 L.
R. A. 648
Le Hote v. Boyet, 85 Miss.
636; 38So. 1
Leicester v. YoUand, Husson
& Birkett (1908), 1 Ch. 152
1396, 1524
Leigh V. National Hollow, etc.
Co., 224 111. 76; 79 N. E.
318
Leighty v. Pres., etc. of Turn-
pike Co., 14 Serg. & R. (Pa.)
434
Leinster Contract Corp.
(1902), 1 Ir. 349 627, 629, 635,
639
Leitch V. Grand Trunk Ry.
Co., 13 Ont. Pract. Rep.
369
V. Wells, 48 N. Y. 585
Leland v. Hayden, 102 Mass.
542 499, 502, 1143, 1145, 1147
Le Marchant v. Moore, 150
N. Y. 209; 44 N. E. 770 810
Lemars Shoe Co. v. Lemars
Shoe Mfg. Co., 89 111. App.
245 297, 1069, 1210
Lembeck v. Jarvis, etc. Stor-
age Co. (N. J.), 64 Atl. 126 1402,
1433
Lenoir v. Linville Imp. Co.,
126 N. Car. 922; 36 S. E.
185; 5 L. R. A. 146 1239, 1242
Leominster Canal Nav. Co. v.
Shrewsbury, etc. Ry. Co.,
3 K. & J. 654 281
Leonard v. Draper, 187 Mass.
536; 73 N. E. 644 517
V. Lent, 43 Wise. 83 1210
Leonards ville Bank v. Willard,
25 N. Y. 574 126
Leonhardt v. Citizens Bank,
56 Nebr. 38; 76 N. W. 452
995
1618
379
660
1560
1027
645
1364
693
Le Roy v. Globe Ins. Co. (N.
Y.), 2 Edw. Ch. 657
1297
1121
CXSl
TABLE OF CASES
[The references are to pages]
Leroy, etc. Co. v. Sidell, 66
Fed. 27; 13 C. C. A. 308 1374
Leslie, Re, 58 N. J. Law 609;
33Atl. 954 1176,1177,1178
Lesseps v. Architects' Co., 4
La. Ann. 316 562, 657
Lester v. Bemis Lumber Co.,
71 Ark. 379; 74 S. W. 518 76,
601, 636, 637
V. Howard Bank, 33 Md.
558; 3 Am. Rep. 211 1329
Letheby & Christopher (1904),
1 Ch. 815 748
Level Land Co. No. 3 v. Hay-
ward, 95 Wise. 109; 69 N.
"W. 567 198
Levering v. Mayor, etc. of
Memphis, 7 Humphr.
(Tenn.) 553 402, 407
Levisee v. Shreveport City R.
R. Co., 27 La. Ann. 641 1248
Levita's Case, 3 Ch. 36 167
, 5 Ch. 489 166, 167, 175
Levitt V. Hamblet (1901), 2
K. B. 53 779
Levy V. Abercorris Slate Co.,
37 Ch. D. 260 1391, 1392
Le Wame v. Meyer, 38 Fed.
191 262
Lewey's Island R. R. Co. v.
Bolton, 48 Me. 451; 77 Am.
Dec. 236 658, 659,
Lewis V. Brainerd, 53 Vt. 519
90
• V. Eastern Bank, 32 Me.
661
894,
908
1187
825
1297
1382
1093,
V. Mayor, etc. of Roch-
ester, 9 C. B. N. 8. 401
V. Meier, 14 Fed. 311
V. Puhtzer Pub. Co., 77
Mo. App. 434
Lexington, etc. Co. v. Page,
17 B. Monr. (Ky.) 412; 66
Am. Dec. 165 1079,
1105, 1127, 1128, 1128, 1129
1193
Lexington, etc. R. R. Co. v.
Bridges, 7 B. Monr. (Ky.)
556; 46 Am. Dec. 528 1127,
1266, 1288
Liberator Bldg. Soc, 10
Times L. R. 537
Licausi v. Ashworth, 78 N. Y.
App. Div. 486; 79 N. Y.
Supp. 631
Licking Valley Bldg. Ass'n
i;.Comm. (Ky.),89S.W.682
Liebhardt v. Wilson (Colo.),
88 Pac. 173
1364
382
140
879
Liebke v. Knapp, 79 Mo. 22;
49 Am. Rep. 212 634
Lite Ass'n v. Levy, 33 La. Ann.
1203 87
Life & Fire Ins. Co. v. Me-
chanics Fire Ins. Co., 7
Wend. (N. Y.) 31 87, 827, 1370
Lighthall Mfg. Co., 47 Hun
(N. Y.) 258 1041, 1060
Lillard v. Oil Paint & Drug
Co. (N. J.), 56 Atl. 254 967,
1113, 1320
V. Oil, Paint, etc. Co (N.
J.), 58 Atl. 188 982
Lime City Bldg., etc. Ass'n
V. Black, 136 Ind. 544; 35
_N. E. 829 662
Limer v. Traders Co., 44 W.
Va. 175; 28 S. E. 730 1196
Limited Invpstment Ass'n v.
Glendale Investment Ass'n,
99WUc. 54; 74N.W. 633 313,
321
Lincoln v. New Orleans Ex-
press Co., 45 La. Ana. 729;
12 So. 937 493, 784
V. State, 36 Ind. 151 1018,
1018
Lincoln Bldg., etc. Ass'n v.
Graham, 7 Nebr. 173 114, 258
Lincoln Park Chapter v. Swa-
tek, 204 111. 228; 68 N. E.
429 237, 253
Lincoln Shoe Mfg. Co. v.
Sheldon, 44 Nebr. 279; 62
N. W. 480 163
Lincoln Tp. v. Kansas City,
etc. R. Co. (Nebr.), 108 N.
W. 140 1632
Lindauer v. Delaware Mut.
Safety Ins. Co., 13 Ark.
461 394
Lindemann v. Rusk, 125 Wise.
210; 104 N. W. 119 1285
Linder v. Carpenter, 62 111. 309 1349
». Hartwell R. R. Co., 73
Fed. 320 1515, 1554,1595
Lindsay v. Arlington Co-op.
Ass'n, 186 Mass. 371; 71
N. E. 797 192
Lindsay, etc., Co. v. Mullen,
176 U. S. 126; 20 Sup. Ct.
325 20, 47
Lindsay Petroleum Co. v.
Hurd, L. R. 5 P. C. 221 317
Lindsay's Estate, 210 Pa. St.
224; 59 Atl. 1074 573
Lingke v. Wilkinson, 57 N. Y.
445 1307
TABLE OF CASES
[The references are to pages]
Linkauf v. Lombard, 137 N.
Y. 417; 33 N. E. 472; 33
Am. St. Rep. 743; 20 L. R.
A. 48 822, 852, 1354
Lintott, Ex parte, 4 Eq. 184 614
Lionberger v. Broadway Sav-
ings Bank, 10 Mo. App. 499 66
Lippencott v. Shaw Carriage
Cfo., 25 Fed. 577 1316
Lippitt V. American Wood
Paper Co., 15 R. I. 141 : 23
Atl. Ill; 2 Am. St. Rep.
886 694
Lipscomb v. Condon, 66 W.
Va. 416; 49 S. E. 392;
107 Am. St. Rep. 938; 67
L. R. A. 670 422, 687,
715, 891
Liquidators of British Na-
tion Life Ass. Ass'n, Ex
parte, 8 Ch. D. 679 8, 76, 79,
80 830
Lishman's Claim, 23 L. T. 40 'l429
Liskeard & Caradon Ry. Co.
(1903), 2 Ch. 681 1545
Lister v. Henry Lister &
Sons, 62 L. J. Ch. 568 1473,
1531, 1531
Litchfield Bank v. Church,
29 Conn. 137 222
Litchfield Sav. Soc. v. Dibble
(Conn.), 67 Atl. 476 349
Little V. Dusenbury, 46 N. J.
Law 614; 50 Am. Rep. 445
1616
Little Rock, etc. R. R. Co. v.
Perry, 37 Ark. 164 280, 281,
284, 287
Little Rock, etc. Ry. Co. v.
Page, 35 Ark. 304 1296, 1503,
1507
Littledale, Ex parte, 9 Ch. 257
763, 766, 1325
Littlewort v. Davis, 50 Miss.
403 868
Liverpool Household Stores,
62 L. T. 873 1215, 1261, 1261,
1263, 1264, 1267, 1274, 1280
Livesey v. Omaha Hotel Co.,
5 Nebr. 50 161, 607
Lloyd V. Chesapeake, etc. R.
R. Co., 65 Fed. 351 1575, 1602
V. Preston, 146 U. S. 630;
13 Sup. Ct. 131 620, 635
V. Supreme Lodge, 98
Fed. 66; 38 C. C. A. 654 578,
590, 918
Lloyd & Co., George E. v.
Matthews, 119 111. App. 546 ;
223 111. 477; 79N.E. 172;
7 L. R. A. N. s. 376 70, 1373
Lloyd & Co., David, 6 Ch. D.
339 1598
Lloyd, Ex parte, 1 Sim. n. s.
. 248 276, 308
Loan Ass'n v. Stonemetz, 29
Pa. St. 534 1237, 1319, 1322
Lock V. Queensland Land Co.
(1896), A. C. 461 433, 626,
1108
Locke V. Leonard Silk Co., 37
Mich. 479 231
Lockhart v. Van Alstyne, 31
Mich. 76; 18 Am. Rep. 156 444
450, 451
Lockwood V. Mechanics Nat.
Bank, 9 R. I. 308; 11 Am.
Rep. 253 557,571,1166,1202,
1205
V. Town of Weston, 61
Conn. 211 ; 23 Atl. 9 413, 415,
420
Loeffler v. Modem Wood-
men, 100 Wise. 79; 75 N.
W. 1012 948
Loewenstein v. Diamond
Soda Water, etc. Co., 94 N.
Y. App. Div. 383; 88 N. Y.
Supp. 313 946, 982, 1358
Loewenthal v. Rubber Re-
claiming Co., 52 N. J. Eq.
440; 28 Atl. 454 34, 134, 585,
992
'Logan County Nat. Bank v.
Townsend, 139 U. S. 67;
11 Sup. Ct. 496 841
Logan, Ex parte, 9 Eq. 149 1242
Londesborough v. Somerville,
19 Beav. 295 1156
London v. Bynum, 136 N.
Car. 411; 48 S. E. 764 299
London & Birmingham Ry.
Co. V. Winter, Cr. & Ph. 57 395
London & Colonial Finance
Corp., 77 L. T. 146 162, 187
London & County Ass. Co.,
30 L. J. Ch. 373 1404
London & General Bank
(1895), 2 Ch. 166 1363
, 72 L. T. N. s. 227 1095,
1110, 1117
London & Globe Finance
Corp. (1903), 1 Ch. 728 19
London & N. Y. Investment
Co. (1895), 2 Ch. 860 442, 536,
536
London & N. W. Ry. Co. v.
Price, 11 Q. B. D. 485 91
TABLE OF CASES
[The references are to pages]
London & Provincial Coal
Co., 5 Ch. D. 525 204
London & Provincial Starch
Co., 20 L. T. 390 1346
London & Provincial Tel. Co.,
9 Eq. 653 793
London & Staffordshire Fire
Ins. Co., 24 Ch. D. 149 177, 184
London & Westminster Sup-
ply Aiss'n V. Griffiths, 1
Cababe & Ellis 15 763
London, Birmingham, etc.
Banking Co., 34 Beav. 332 774
London County Coxmcil v.
Atty.-Gen. (1902), A. C.
165 824
London Financial Ass'n v.
Kelk, 26 Ch. D. 107 38, 39, 40,
78, 97, 1161, 1290
London Founders' Ass'n v.
Clarke, 20 Q. B. D. 676 779,
781, 781
London Grand Junction Ry.
Co., 2 Man. & Gr. 606 925
London India Rubber Co., 5
Eq. 519 469
London Joint Stock Bank v.
Simmons (1892), A. C. 201 1433
London, Paris & American
Bank v. Aronstein, 117 Fed.
601; 54 C. C. A. 663 771, 790
London, Paris Financial, etc.
Corp., 13 Times L. R. 569 346,
352, 355, 355, 362
London Pressed Hinge Co.
(1905), 1 Ch. 576 1393, 1505,
1574, 1604
London Speaker Printing Co.,
Pearce's Case, 16 Ont.
App. 508 209
London Tobacco Pipe-Mak-
ers' Co. V. Woodrufife, 7
B. & C. 838 1012, 1166
London Trust Co. v. Mac-
kenzie, 62 L. J. Ch. 870 1129,
1261, 1268, 1280, 1282,
1290
London, etc. Co. v. New Ma-
shonaland, etc. Co., W. N.
(1891) 165 1178
London, etc. Ass. Co. v. Red-
grave, 4 C. B. N. s. 524 608
London, etc. Ry. Co. v.
Fairclough, 2 M. & Gr. 674 602,
605
V. M'Michael, 5 Exch.
855 602
London, etc. Society, 31 Ch.
D. 223 1200, 1213, 1213
Long V. Citizens' Bank, 8
Utah 104; 29 Pac. 878 280, 307
V. Georgia Pac. Ry. Co.,
91 Ala. 519; 8 So. 706; 24
Am. St. Rep. 931 843, 848
V. Guelph Lumber Co.,
31 Up. Can. C. P. 129 192, 444,
450
Long Dock Co. v. Mallery, 12
N. J. Eq. 431 1604
Long Island Ferry Co. v. Ter-
bell, 48 N. Y. 427 1239
Long Island R. R. Co., 19
Wend. (N. Y.) 37; 32 Am.
Dec. 429 657, 1001, 1017,
1049, 1066
Long Island, etc. Trust Co. v.
Columbus, etc. Ry. Co., 65
Fed. 455 1411, 1436
Longdendale, etc. Co., 8 Ch.
D. 150 1598, 1599
Longman v. Bath Electric
Tramways (1905), 1 Ch. 646 733,
733
Longmont Supply Co. v. Coff-
man, 11 Colo. 551; 19 Pac.
508 1210
Loomis V. Chicago, etc. Ry.
Co., 102 Fed. 233; 42
C. C. A. 290 1476
V. Davenport, etc. R. R.
Co., 3 McCrary 489 1535, 1540,
1632
Lord V. Brooks, 52 N. H. 72
V. Equitable Life Ass.
Soc, 96 JSr. Y. Supp. 10;
109 N. Y. App. Div. 252
V. Equitable Life Ass.
Soc, 108 N. Y. Supp. 67
1150,
1154
133
1050,
1165
V. Essex Bldg. Ass'n, 37
Md. 320 100, 229
V. Governor & Co. of
Copper Miners, 2 Phillips
Ch. 740 973, 977, 994
Lord Inchiquin, Ex parte
(1891), 3 Ch. 28 1170, 1172,
1173, 1174
Lord Lurgan's Case (1902), 1
Ch. 707 203, 204
Lorillard v. Clyde, 86 N. Y.
384 339, 1107, 1163
Loring v. Davis, 32 Ch. D. 625 780,
— V. Salisbury Mills, 125
Mass. 138
Lothrop Pub. Co. v. Lathrop,
etc. Co., 191 Mass. 353
782
797
388
TABLE OF CASES
[The references are to pages]
Lothrop Pub. Co. v. Williams,
191 Mass. 361 1513
Loucheim v. Clawson Print-
ing, etc. Co., 12 Pa. Super,
a. 55 1242
Loubat V. Le Roy, 40 Hun
(N. Y.) 546 1207
Loudenslager v. Benton, 4
Phila. 382 1551
V. Woodbury Heights
Land Co., 58 N. J. Eq. 556 ;
43 Atl. 671 322, 327, 1346
Louis Cook Mfg. Co. v. Ran-
dall, 62 Iowa 244; 17
N. W. 507 297, 297
Louisiana Nat. Bank v. Hen-
derson, 116 La. 413; 40
So. 779 238
Louisiana Navigation, etc. Co.
V. Doullut, 114 La. 906; 38
So. 613 45
Louisiana Paper Co. v.
Waples, 3 Woods 34 1195
Louisville Banking Co. v.
Eisemnan, 94 Ky. 83; 21
S. W. 531, 1049; 42 Am. St.
Rep. 335; 19 L. R. A. 684 872,
873, 874, 881
Louisville Bridge Co. v.
Dodd, 27 Ky. Law Rep.
454; 85S. W. 683 982,983
Louisville School Board v.
Kin^ (Ky.), 107 S. W. 247 847
Louisville Tobacco Ware-
house Co. V. Stewart (Ky.),
70 S. W. 285; 24 Ky. Law
Rep. 934 844
LouisviUe Trust Co. v. Cin-
cinnati Inclined-Plane Ry.
Co., 91 Fed. 699 1507, 1520
V. Louisville, etc. Ry.
Co., 174 U. S. 674; 19
Sup. Ct. 827 1636, 1636, 1659
Louisville Water Co. v. Ful-
lenlove, 12 Ky. Law Rep.
556 1379
Louisville, etc. R. R. Co. v.
Carson, 151 111. 444; 38
N. E. 140 1298, 1310
V. Central Trust .Co., 87
Fed. 500; 31 C. C. A. 89 1568
V. Hart County, 25 Ky.
Law Rep. 395; 75 S. W.
288 495, 921
V. Hemdon's Admr.
(Ky.), 104 S. W. 732 _ 56
V. Memphis Gaslight
Co., 125 Fed. 97; 60 C. C.
A. 141 1560
Louisville, etc. R. R. Co. v.
Neal, 128 Ala. 149; 29 So.
865 941, 942
V. Ohio Valley Imp. Co.,
69 Fed. 431 1221, 1426
— - V. Schmidt (Ky.), 107
S. W. 745 1484, 1490
V. Schmidt, 21 Ky. Law
Rep. 556; 52 S. W. 835 1452,
1533, 1584, 1586
Louisville, etc. Ry. Co. v.
Flanagan, 113 Ind. 488;
14 N. E. 370; 3 Am. St.
Rep. 674 38, 852
V. Louisville Trust Co.,
174 U. S. 552; 19 Sup. Ct.,
817 84, 876, 891, 1221, 1407,
1437
Love V. Holmes (Miss.), 44 So.
835 6
Lovelace v. Anson (1907), 2
Ch. 424 503, 538, 542
Lovell V. Westwood, 2 Dow.
& CI. 21 559, 560
Loveman v. Henderson, 1
Tenn. Ch. App. 749 686, 715, 805
Loverin v. McLaughlin, 161
111. 417; 44 N. E.'99 126, 127,
251, 252
Lovett V. Steam Saw Mill
Ass'n, 6 Paige (N. Y.) 54 393,
405, 409
Low V. Blackford, 87 Fed.
392; 31 C. C. A. 15 1420, 1452,
1629, 1630
V. Connecticut, etc. R.
R. Co., 45 N. H. 370 152, 278,
281, 293, 295
V. Connecticut, etc. R. R.
Co., 46 N. H. 284 283
Lowe V. Pioneer Threshing
Co., 70 Fed. 646 519
V. Ring, 115 Wise. 575;
92 N. W. 238 1246
V. Ring, 123 Wise. 370;
101 N. W. 698 1247
Lowene v. American Fire Ins.
Co., 6 Paige (N. Y.) 482 1121
Lowenfeld, Ex parte, 70 L. T.
3 436, 437
Lowndes v. Gamett Gold
Mining Co., 33 L. J. Ch.
418 1245, 1245, 1297, 1298
Lowry v. Commercial, etc.
Bank, Taney 310 756, 791,
792, 797, 798, 799
V. Farmers' L. & T. Co.,
172 N. Y. 137; 64 N. E.
796 ; 56 N. Y. App. Div. 108 1151
TABLE OF CASES
[The references are to pages]
Lowville, etc. R. R. Co. v.
Elliot, 101 N. Y. Supp.
328 211, 214
Lozier v. Saratoga Gas, etc.
Co., 59 N. Y. App. Div.
390; 69 N. Y. Supp. 247 907,
908
Lozier Motor Co. v. Ball, 104
N. Y. Supp. 771; 53 N. Y.
Misc. 375 1331
Lubbock V. British Bank of
South America (1892), 2
Ch. 198 1092
Lubroline Oil Co. v. Athens
Sav. Bank, 104 Ga. 376; 30
S. E. 409 1515
Lucas V. Bank of Georgia, 2
Stew. (Ala.) 147 230, 233
■». Beach, 1 Man. &Gr. 417 274
V. Coe, 86 Fed. 972 622
V. Fitzgerald, 20 Times
L. R. 16 1128, 1268, 1280,
1280, 1283
V. Friant, 111 Mich. 426;
69 N. W. 735 1344
V. Milliken, 139 Fed. 816 787,
1024, 1063, 1064
V. White Line Transfer
Co., 70 Iowa 541; 30N.W.
771; 59 Am. Rep. 449 851,
861, 869
Lucile Dreyfus Mining Co. v.
Willard (Wash.), 89 Pac.
935 735, 741
Luclqr Queen Mining Co. v.
Abraham, 26 Oreg. 282; 38
Pac. 65 1231, 1382
Ludington v. Thompson, 4
N. Y. App. Div. 117; 38
N. Y. Supp. 768 1378
Ludlow V. Clinton Line R. R.
Co., 1 Flip. 25 1397, 1629
V. Kurd, 1 Disn. (Oh.)
552 1551, 1553
Luetzke v. Roberts (Wise),
109 N. W. 949 183
Luling V. Atlantic Mut. Ins.
Co.. 45 Barb. (N. Y.) 510;
30 How. Pr. 69 1116
Lum V. McBwen, 56 Minn.
278; 57 N. W. 662 1347
Lumbard v. Aldrich, 8 N. H.
31; 28 Am. Dec. 381 918
Lumsden's Case, 4 Ch. 31 708, 708
Lund V. Blanshard, 4 Hare 9 939,
976
V. Wheaton Roller Mill
Co., 50 Minn. 36; 52 N. W.
268; 36 Am. St. Rep. 623 715
1240
Lundy Granite Co., 20 W. R.
519; 26 L. T. 673
Lungren v. Pennell, 10 W. N.
C. (Pa.) 297 336
Lurgan's Case, Lord (1902),
1 Ch. 707 203, 204
Luse V. Isthmus Transit Co.,
6 Oreg. 125; 25 Am. Rep.
506 1381
Lusk V. Riggs, 70 Nebr. 713 ;
97 N. W. 1033 124, 127, 239,
246
Luther v. C. J. Luther Co.,
118 Wise. 112; 94 N. W.
69; 99 Am. St. Rep. 977 510,
1063, 1319
Lydney, etc. Co. v. Bird, 33
Ch. D. 85 272, 272, 293, 313,
319, 320, 320, 321,
353
Lyman v. Central Vermont
R. R. Co., 59 Vt. 167; 10
Atl. 346
.V. HiUiard, 154 Fed. 339
V. Kansas City, etc. R.
Co., 101 Fed. 636
V. Pratt, 183 Mass. 58;
66 N. E. 423 497, 1147
V. State Bank of Ran-
dolph, 81 N. Y. App. Div.
367; 80 N. Y. Supp. 901;
179 N. Y. 577; 72 N. E.
1145
Lynde v. Anglo-Italian, etc.
Spinning Co. (1896), 1 Ch.
178
Lyndon Mill Co. v. Lyndon
Institution, 63 Vt. 581,
585; 25 Am. St. Rep. 783;
22 Atl. 575
Lyndon Sav. Bank v. Inter-
national Co., 75 Vt. 224;
54 Atl. 191
Lynn v. Freemansburg, etc.
Ass'n, 117 Pa. St. 1; 11
Atl. 537; 2 Am. St. Rep.
639 581, 582
Lyon V. Am. Screw Co., 16
R. I. 472; 17 Atl. 61 893, 894,
900
j7.Bower,30N.J.Eq.340 1259
V. Citizens' Loan Ass'n,'
30 N. J. Eq. 732 1259
V. First Nat Bank, 85
Fed. 120; 29 C. C. A. 45 86, 838
V. James, 97 N. Y. App.
Div. 385; 90 N. Y Supp.
28; 181 N. Y. 512; 73
N. E. 1126 1350, 1355
1617
1359
1671
114
187
1370
591
TABLE OP CASES
[The references are to pages]
Lyon Potter & Co. v. First
Nat. Bank, 85 Fed. 120; 29
C. C. A. 45 838
Lyon's Case, 35 Beav. 646 1203
Lysaght v. St. Louis Opera-
tive, etc. Ass'n, 55 Mo.
App. 538 580
Lysaght, Re (1898), 1 Ch. 115 24
Lyster's Case, 4 Eq. 233 667, 1202
M
McAfee v. Zettler, 103 Ga.
579; 30 S. E. 268 972
McAleer v. McMurray, 58 Pa.
St. 126 928
McAIester Mfg. Co. v. Flor-
ence Cotton, etc. Co., 128
Ala. 240; 30 So. 632 78
McAUen v. Woodcock, 60 Mo.
174 1343
McAllister v. Plant, 54 Miss.
106 1584
McAIpin V. Universal Tobacco
Co. (N. S.), 57 Atl. 418 974
McArthur v. Times Printing
Co., 48 Minn. 319; 51
N. W. 216; 31 Am. St.
Rep. 653 283, 287, 290, 290
McAvity V. LincoIBTeJB^CB?^'^^'"
82 Me. 504; 20 Atl. 82 1247
McBryan v. Universal Ele-
vator Co., 130 Mich. Ill;
89 N. W. 683; 97 Am. St.
Rep. 453 619
McCabe v. Father Matthew,
etc. Soc, 24 Hun (N. Y.)
149 1010
McCall V. Byram Mfg. Co., 6
Conn. 428 1167, 1185, 1208,
1208 1229
McCalla v. Clark, 55 Ga. 53 ' 812
McCallimi v. Pursell Mfg. Co.,
1 N. Y. Supp. 428 279, 300
McCampbell v. Fountain
Head R. R. Co., Ill Tenn.
55; 77 S. W. 1070; 102
Am. St. Rep. 731 966, 969, 969
McCandless v. Inland Acid
Co., 112 Ga. 291; 37 S. E.
419 303, 304
V. Inland Acid Co., 115
Ga. 968; 42 S. E. 449 303
McCann v. First Nat. Bank,
112 Ind. 354; 14 N. E. 251 540,
■ 541, 543
V. First Nat. Bank, 131
Ind. 95; 30 N. E. 893 540,
541, 543
McCartee v. Orphan Asylum
Soc, 9 Cow. (N. Y.) 437;
18 Am. Dec. 516 68
McCarter v. Ketcham, 72
N. J. Law 247; 62 Atl. 693 203
V. Ketcham (N. J.), 67
Atl. 610 204
McChesny v. Batman (Ky.),
89 S. W. 198 104, 125
McCIanahan v. Ivanhoe Land,
etc. Co., 96 Va. 124; 30
S. E. 450 182, 183
McClelland v. McKane, 154
Fed. 164 975
V. Norfolk Southern
R. R. Co., 110 N. Y. 469;
18 N. E. 237; 6 Am. St.
Rep. 397; 1 L. R. A. 299 1425,
1448, 1451, 1675
M'Clelland v. Whiteley, 15
Fed. 322 175
McClintock v. Central Bank,
120 Mo. 127; 24 S. W.
1052 717
McCloskey v. Snowden, 212
Pa. 249; 61 Atl. 796; 108
Am. St. Rep. 867 938
McClure v. Central Trust Co.,
165 N. Y. 108; 58 N. E.
777; 53 L. R. A. 153 784
V. Central Trust Co., 28
N. Y. App. Div. 433; 53
N. Y. Supp. 188 782
V. Law, 161 N. Y. 78;
55 N. E. 388; 76 Am. St.
Rep. 262 1337
V. Trask„161 N. Y. 82;
55 N. E. 407 1338
McConey v. Belton Gas, etc.
Co., 97 Minn. 190; 106
N. W. 900 619
McConnell v. Camors-MoCon-
nell Co., 152 Fed. 321 262
V. Combination Mining,
etc. Co., 30 Mont. 239; 76
Pac. 194; 104 Am. St.
Rep. 703; 31 Mont. 563;
79 Pac. 248 924, 983, 1208,
1247, 1322
McConnell's Claim (1901), 1
Ch. 728 1180, 1180, 1238,
1241, 1243
McCord V. Ohio, etc. R. R.
. Co., 13 Ind. 220 493
McCord-CoUins Co. v. Pritch-
ard (Tex.), 84 S. W. 388 380
McCormick v. Market Bank,
165 U. S. 538< 17 Sup. Ct.
433 838
TABLE OF CASES
[The references are to pages]
McCornaok v. Salem Ry. Co.,
34 0reg. 543; 56 Pac. 518,
1022 1567
McCourt V. Singers-Bigger,
145 Fed. 103; 76 C. C. A.
73 300, 983, 983, 1341
McCoy V. Washington
County, 3 Wall. Jr. C. C.
381 1451
V. World's Columbian
Exposition, 186 111. 356;
57 N. E. 1043; 78 Am. St.
Rep. 288 601, 607, 613
McCraoken v. Halsey Fire-
Engine Co., 57 Mich. 361;
24 N. W. 104 1240
V. Robison, 57 Fed. 375;
6 C. C. A. 400 1314
McCrea v. McClenahan, 114
N. Y. App. Div. 70 972, 978,
979, 982
McCreary v. Chandler, 58 Me.
537 8
McCuUough V. Annapolis, etc.
R. R. Co., 4 Gill (Md.) 58 1207
V. Moss, 5 Denio (N. Y.)
567 992, 1193
V. Sutherland, 153 Fed.
418 1086
V. Talledega Ins. Co.,
46 Ala. 376 236
McCutchen v. Dittman, 23
N. Y. App. Div. 285; 48
N. Y. Supp. 360 808
McCutcheon v. Merz Capsule
Co., 71 Fed. 787; 19 C. C.
A. 108; 31 L. R. A. 415 834,
843
McDaniels v. Flower Brook
Co., 22 Vt. 274 999, 1005,1008
McDermott Mining Co. v. Mc-
Dennott, 27 Mont. 143; 69
Pac. 715 1341
McDonald v. Chisholm, 131
111. 273; 23 N. E. 596 408
V. Dewey, 134 Fed. 528;
67 C. C. A. 408 618
V. Dewey, 202 U. S. 510;
26 Sup. Ct. 731 619, 619
V. Houghton, 70 N. Car.
393 1342
V. Ross-Lewin, 29 Hun
(N. Y.) 87 660
V. Williams, 174 U.
S. 397; 19 Sup. Ct. 743
McDonnell v. Ontario, etc. R.
R. Co., 11 Up. Can. Q. B.
267
1128,
1128
553
McDonough v. Bank of Hous-
ton, 34 Tex. 309
V. Hennepin, etc. Ass'n,
62 Minn. 122; 64 N. W. 106
McDowall V. Sheehan, 129 N.
Y. 200; 29 N. E. 299
286
590
1175,
1318
McDowell V. Bank of Wil-
mington, 1 Harr. (Del.) 27
511, 572
V. Chicago Steel Works,
124 111. 491; 16N. E. 854;
7 Am. St. Rep. 381 809
V. Lindsay, 213 Pa. 591 ;
63 Atl. 130 631, 646
McElhenny's Appeal, 61 Pa.
St. 188 317
McElrath v. Pittsburg, etc. R.
R. Co., 68 Pa. St. 37 1484,
1485
McElroy v. Minn. Percheron
Horse Co., 96 Wise. 317;
71 N. W. 652 852, 880
McElwee Mfg. Co. v. Trow-
bridge, 62 Hun 471; 17-N.
Y. Supp, 3 300
McEuen v. London Wharves
Co., 6 Ch. 655 201, 688
McEwan v. Campbell, 2 Macq.
H. L. 499 276, 307
McEwen v. Harriman Land
Co., 138 Fed. 797; 71 C. C.
A. 163 1667
McFadden v. Mays Landing,
etc. R. R. Co., 49 N. J. Eq.
176; 22 Atl. 932 1465, 1584,
1589, 1623
McFall V. Buckeye, etc. Ass'n,
122 Cal. 468; 55 Pac. 253;
68 Am. St. Rep. 47 700, 717
'V. McKeesport, etc. Co.,
123 Pa. St. 259; 16 Atl. 478 280,
307
McFarlan v. Triton Ins. Co.,
4 Denio (N. Y.) 392 915
McFarlin v. First Nat. Bank,
68 Fed. 868; 16 C. C. A.
46 492, 493
McFell Electric & Tel. Co. v.
McFell Electric Co., 110
111. App. 182 377
McGannon v. Central Bldg.
Ass'n, 19 W. Va. 726 582
M'George v. Big Stone Gap
Imp. Co., 57 Fed. 262 1595
McGourkey v. Toledo, etc.
Ry. Co., 146 U. S. 536; 13
Sup. Ct. 170 1358, 1536, 1538,
1538, 1538
TABLE OF CASES
[The references are to pages]
McGraw v. Memphis, etc. R.
R. Co., 5 Coldw. (Tenn.)
434 1366, 1515
, i?e. Ill N. Y. 66; 19 N.
E. 233; 2 L. R. A. 387 848, 849
McGregor v. Home Ins. Co.,
33 N. J. Eq. 181 469, 469
McGrew v. City Produce Ex-
change, 85 Tenn. 572; 4 S.
W. 38; 4 Am. St. Rep. 771 261
McGue V. Rommell (Cal.), 83
Pac. 1000 781
McHenry v. New York, etc.
R. R. Co., 22 Fed. 130 963,
964, 965, 970
Mcllhenny v. Binz, 80 Tex. 1 ;
13 S. W. 655; 26 Am. St.
Rep. 705 918
Mcllquham v. Taylor (1895),
1 Ch. 53 779, 779
Mcllrath v. Snure, 22 Minn.
391 1608
McIIwraith v. Dublin Trunk
Ry. Co., 7 Ch. 134 200, 200
Mclntyre v. Ajax Mining
Co. (Utah), 77 Pac. 613 1342
V. E. Bement's Sons
(Mich.), 109 N. W. 45 192, 527
McKain and Canadian Bir-
beck, etc. Co., 7 Ont. L. R.
241 555, 572, 574, 574
McKay's Case, 2 Ch. D. 1 329
(1896), 2 Ch. 757 649
McKee v. Cunningham (Cal.),
84 Pac. 260 408
V. Grand Rapids, etc.
Ry. Co., 41 Mich. 274; 1
N. W. 873; 50N. W. 469 1542
V. Home Savings & Trust
Co., 122 Iowa 731; 98 N.
W. 609 1040, 1040, 1045
McKeen v. County of North-
ampton, 49 Pa. St. 519; 88
Am. Dec. 515 420
McKeen's Appeal, 42 Pa. St.
479 1149
McKees Rocks', etc. Relief
Ass'n, 6 Pa. Dist. Rep. 477 96
McKenney v. Diamond State
Loan Ass'n, 8 Houst. (Del.)
557; 18 Atl. 905 589, 593
McKim V. Glenn, 66 Md. 479;
8 Atl. 130 620
V. King, 58 Md. 502; 42
Am. Rep. 340 1461
V. Odom, 3 Bland Ch.
(Md.) 407 3
McKinley v. Mineral Hill, etc.
Co. (Wash.), 89 Pac. 495 1374
McLane v. Placerville, etc. R.
R. Co., 66 Cal. 606; 6 Pac.
748 1436, 1495, 1600, 1603,
1606, 1623, 1640
McLaran v. Crescent Planing
Mill Co., 117 Mo. App. 40;
93 S. W. 819 1116, 1121
V. Fisken, 28 Graiit
(Can.) 352 1198, 1204
McLaughlin v. Bank of Victo-
ria, 20 Vict. L. R. 433 774, 796
V. Daily Telegraph News-
paper, 1 Comm. L. R.
(Australia) 243 709, 754, 758
774, 796
M'Laughlin v. Detroit, etc.
Ry. Co., 8 Mich. 100 450, 456,
463, 466, 1113
McLean v. Lafayette Bank, 3
McLean 587 772, 865, 868
V. Medicine Co., 96
Mich. 479; 56 N. W. 68 695,
753
V. Pittsburgh Plate Glass
Co., 159 Pa.. 112; 28 Atl.
211 464
McLean-Bowman Co., 138
Fed. 181 191
McLean's Case, 55 L. J. Ch.
36 1336, 1338
McLeary v. Dawson, 87 Tex.
524; 29 S. W. 1044 304
V. Erie Telegraph, etc.
Co., 38 N. Y. Misc. 3; 76
N. Y. Supp. 712 1076
McLellan v. Detroit File
Works, 56 Mich. 579; 23
N. W. 321 297, 298, 822, 1381
McLennan v. Hopkins, 2 Kans.
App. 260; 41 Pac. 1061 246,
251
McLeod V. Lincoln Medical
College, 69 Nebr. 550; 98 N.
W. 672 23, 1083, 1306
McLouth V. Hunt, 154 N. Y.
179; 48 N. E. 548; 39 L.
A. 230 1150, 1445
McMahon v. Macy, 51 N. Y.
155 622, 812
V. North Kent Ironworks
Co. (1891), 2 Ch. 148 1604
V. Supreme Tent, 151
Mo. 522 ; 52 S. W. 384 576, 589
, Re (1900), 1 Ch. 173 623,
624, 624
McMichael v. Brennan, 31 N.
J. Eq. 496 911, 912, 918
McMillan v. Le Roi Mining
Co. (1906), 1 Ch. 331 1038, 1038
TABLE OF CASES
[The references are to pages]
McMurray v. Moran, 134 U.
S. 150; 10 Sup. Ct. 427
1526,
1526
V. St. Louis Oil Mfg. Co.,
33 Mo. 377 1371
McMurrich v. Bond Head Har-
bor Co., 9 Up. Can. Q. B.
333 4, 692, 753, 753
McMurtiy v. Montgomery
Masonic Temple Co., 86 Ky.
206; 5 S. W. 570 1324, 1344
McNab V. McNab & Harlin
Co., 62 Hun (N. Y.) 18;
16N. Y. Supp. 448; 133 N.
Y. 687; 31 N. E. 627 966,
1299 1300
McNeely v. Woodruff, 13 N. '
J. Law 352 1027, 1065
McNeil V. Boston Chamber of
Commerce, 154 Mass. 277 ;
28 N. E. 245; 13 L. R. A.
559 1215
V. Fultz, 38 Can. Super.
Ct. 198 337
V. Tenth Nat. Bank, 46
N. Y. 325; 7 Am. Rep.
341 694, 723, 808
McNulta V. Com Belt Bank,
164 111. 427; 45 N. E. 954;
56 Am. St. Rep. 203 494, 571,
852, 854, 858, 1190, 1239
V. Lochiidge, 141 IT. S.
327; 12 Sup. Ct. 11 1615, 1615,
1617
McRae v. Corbett, 6 Mani-
toba 426 396
McRee v. Mexican Gulf Oil,
etc. Co. (Ga. ) , 56 S. E. 451 1287
McShane v. Howard Bank, 73
Md. 135; 20 Atl. 776 1368, 1368
M'Tighe v. Keystone Coal Co.,
99 Fed. 134; 39 C. C. A.
447 1453, 1453
McVicker v. Cone, 21 Oreg.
353; 28 Pac. 76 148, 148, 278
McVity V. Albro Co., 90 N. Y.
App. Div. 109; 86 N. Y.
Supp. 144; 180N. Y. 554;
73 N. E. 1126 450, 451, 451
Maas V. Missouri, etc. Ry. Co.,
83 N. Y. 223 1411
Macalester's Admr. v. Mary-
land, 114U. S. 598; 5 Sup.
Ct. 1065 1515, 1677
Macauly v. Robinson, 18 La.
Ann. 619 667
Macbeth v. Vanfield, 78 Pac.
693; 45 Oreg. 553; 106
Am. St. Rep. 670 636, 636
MacDonald, Sons
(1894), 1 Ch. 89
& Co.
155, 155, 632,
639, 702
MacDougall v. Gardiner, 10
Ch. 606 994, 995
V. Gardiner, 1 Ch. D.
13 943, 1060
V. Jersey, etc. Hotel
Co., 2 Hem. & Mill. 528 160,
1108
Macey Co., Fred, v. Macey,
143 Mich. 138; 106 N. W.
722 315, 316, 331
MacGinness v. Boston, etc.
Mining Co., 29 Mont. 428;
75 Pac. 89 965
Macgregor v. OflBcial Manager
of the Deal, etc. Ry. Co.
(1852), 22 L. J. Q. B. 69 828
Machinists' Nat. Bank v.
Field, 126 Mass. 345 730, 737
Mack V. DeBardeleben, etc.
Co., 90 Ala. 396; 8 So. 150;
9 L. R. A. 650 941, 942, 1014
V. Latta, 178 N. Y. 525;
71 N. E. 97; 67 L. R. A.
126 182, 183
Mack's Claim, W. N. (1900)
114
Mackay v. Commercial Bank
of New Brunswick, L. R. 5
P. C. 394
V. St. Mary's Church, 15
R. L 121; 23 Atl. 108; 2
Am. St. Rep. 881
Mackenzie, Ex parte, 7 Eq. 240
Mackey v. Bums, 16 Colo.
App. 6; 64 Pac. 485 968, 1069,
1310, 1340
Mackie v. Clough, 17 Vict. L.
R. 493 1126, 1358, 1368
Mackintosh v. Flint, etc. R.
R. Co., 32 Fed. 350 443
V. Flint, etc. R. R. Co.,
34 Fed. 582 76, 464, 466, 468,
1083, 1092, 1099, 1101, 1103,
1105
Mackley's Case, 1 Ch. D. 247 204
Maclagan's Case, 51 L. J. Ch.
841 1215
Maclaren v. Stainton, 3 DeG.
F. &J. 202 1141,1156
Macon, etc. R. R. Co. v.
Georgia R. R. Co., 63 Ga.
103 849, 1493, 1583, 1583
V. Shailer, 141 Fed. 585;
72 C. C. A. 631 979
V. Vason, 57 Ga. 314 603,
634, 661, 1226, 1227
1180
1362
403
1426
TABLE OF CASES
[The references are to pages]
Macoun v. Erskine, Oxenard,
etc. Co. (1901), 2 K. B. 493 809
MacVeagh v. Denver City
Waterworks Co., 107 Fed.
17; 46 C. C. A. 118 962
MacVeigh v. Wild, 96 Fed. 84
1359
Madden v. Dimond, 12 Brit.
Columb. 80 1270
Maddick v. Marshall, 17 C. B.
N. s. 829; 16 C. B. n. s.
387 276, 308
Madison Ave. Baptist Church
V. Baptist Church, 5 Rob.
(N. Y.) 649 1011
Madison Ins. Co. v. Griffin, 3
Ind. 277 1381
Madison, etc. Co. v. Wateiv
town, etc. Co., 5 Wise. 173 87
V. Watertown, etc. Co.,
7 Wise. 59 84, 849
Madison, etc. R. R. Co. v.
Norwich Sav. Soc, 24 Ind.
457 1433
Madrid Bank v. Pelly, 7 Eq.
442 1334
Maeder v. Buffalo Bill's Wild
West Co., 132 Fed. 280 890,
907, 969, 1112
M. A. Furbush, etc. Co. v.
Liberty Woolen Mills, 81
Fed. 425 1473
Magdalena Steam Nav. Co.,
Johnson 690 832
Magowan v. Groneweg, 16 S.
Dak. 29; 91 N. W. 335 1211
Magruder v. Colston, 44 Md.
349; 22 Am. Rep. 47 619
Mahaney v. Walsh, 16 N. Y.
App. Div. 601; 44 N. Y.
Supp. 969 687, 694, 714, 791
Maher, Re, 18 Vict. L. R.
519 380
Mahoney v. Butte Hardware
Co., 27 Mont. 463; 71 Pac.
674 91
Mahonyw. East Holjrford Min- ,
ing Co., L. R. 7 H. L. 869 554,
1224, 1230
Main v. Mills, 6 Biss. 98 1128,
1129
Maine v. Midland Invest-
ment Co. (Iowa), 109 N.
W. 801 181, 181, 185
Maine Mut., etc. Ins. Co. v.
Neal, 50 Me. 301 1189
Maine Products Co. ■». Alex-
ander, lis N. Y. App. Div.
475 962, 1064, 1065
Majors v. Taussig, 20 Colo.
44; 36 Pac. 816 984, 985
Malam v. Kitchens (1894), 3
Ch. 578 498, 502, 1140, 1147
Malleson v. National Ins.
Corp. (1894), 1 Ch. 200 586
Mallett V. Simpson, 94 N. Car.
37; 56 Am. Rep. 594 68, 848
Mallory v. Hanaur Oil Works,
86 Tenn. 598; 8 S. W. 396 79,
854, 864
V. Mallory Wheeler Co.,
61 Conn. 131; 23 Atl. 708
1311, 1321, 1322
V. Maryland Glass Co.,
131 Fed. Ill 1511
V. West Shore, etc. R. R.
Co., 36 N. Y. Super. Ct. 174 1467
Mallory's Case, 3 Ont. L. Rep.
562 166
Maltby v. Northwestern Va.
R. R. Co., 16 Md. 422; 10
Cyc. 496 603
Man V. Boykin (S. Car.), 60 S.
E. 17 492, 695, 782
Manahan v. Vamum, 11 Gray
405 ■ 304
Manchester Brewery Co. v.
North Cheshire & Man-
chester Brewery Co. (1898),
1 Ch. 639 373
Manchester Locomotive
Works V. Truesdale, 44
Minn. 116; 46 N. W. 301;
9 L. R. A. 140 1667
Manchester St. Ry. Co. v.
Williams, 71 N. H. 312;
62 Atl. 461 156
Manchester, etc. R. R. Co. v.
Concord R. R., 66 N. H.
100; 20 Atl. 383; 49 Am.
St. Rep. 682; 9 L. R. A.
689 856
Mandel v. Fidelity Trust
Co., 107 S. W. 776 (Ky.) 1375
V. Swan Land, etc. Co.,
154111. 177; 40N. E. 462;
45Am. St. Rep. 124; 27 L.
R. A. 313 608, 667
Mandelbaum v. North Amer-
ican Mining Co., 4 Mich. 465 734
Manderson v. Commercial
Bank, 28 Pa. St. 379 951
Mandeville v. Courtright, 142
Fed. 97; 73 C. C. A. 321 252
Manhattan Beach Co. v.
Hamed, 27 Fed. 484 737
Manhattan Brass Co. v. Web-
ster, 37 Mo. App. 146 1192
cxxxi
TABLE OF CASES
[The references are to pages]
Manhattan Hardware Co. v.
Phalen, 128 Pa. St. 110;
18 Atl. 428 1221
V. Roland, 128 Pa. St.
119; 18 Atl. 429 919, 1221
Manhattan Life Ins. Co. v.
Forty-second St., etc. R.
R. Co., 139 N. Y. 146; 34
N. E. 776 740
Manhattan Sav. Inst. v. Nat.
Exchange Bank, 42 N. Y.
App. Div. 147 1432
Manhattan Trust Co. v.
Seattle Coal Co., 16 Wash.
499; 48 Pac. 333, 737 1396,
1496, 1533, 1560
V. Seattle Coal & Iron
Co., 19 Wash. 493; 53
Pac. 951 1560
V. Sioux City Cable Ry.
Co., 76 Fed. 658 1539, 1565,
1570
V. Sioux City, etc. R. R.
Co., 81 Fed. 50 1633
V. Sioux City, etc. Ry.
Co., 102 Fed. 710 1569
Manhattan Web Co. v. Aquid-
neck Nat. Bank, 133 Fed.
76 1328
Manice v. Hudson River R. R.
. Co., 3 Duer (N. Y.) 426 456
Manisty's Case, 17 Sol. J.
745 664
Manley v. Mayer, 68 Kans.
377; 75 Pac. 550 1323
Mann v. Anderson, 106 Ga.
818; 32 S. E. 870 1114, 1137
V. Cooke, 20 Conn. 178 191
V. Edinburgh Northern
Tramways Co. (1893), A. C.
69 295, 332, 1280
V. Pentz, 2 Sandf. Ch.
(N. Y.) 257 404, 406, 520
Mann's Case, 3 Ch. 459 n 708
Manners v. St. Davids Gold,
etc. Co. (1904), 2 Ch. 593 72,
654
Manning v. Berdan, 135 Fed.
159 182, 890
V. Norfolk Southern R.
Co., 29 Fed. 838 1449, 1528
V. Quicksilver Mining
Co., 24 Hun (N. Y.) 360
Manns v. Brookville Nat.
Bank, 73 Ind. 243
Manton v. Ray, 18 R. I. 672;
29 Atl. 998; 49 Am. St.
Rep. 811
1132,
1136
803
786
Manufacturers', etc. Bank v.
Big Muddy Iron Co., 97
Mo. 38; 10 S. W. 865 969, 1272
Manufacturers' Exhibition
Bldg. Co. V. Landay, 219
111. 168; 76 N. E. 146 559, 560,
585, 993, 1200
Manufacturers' Land, etc. Co.
V. Cleary, 89 S. W. 248 1076
Manufacturers' Paper Co. v.
Allen Higgins Co., 154 Fed.
906 444, 444, 492
Manufacturing Co. v. Bradley,
105 U. S. 175 1299, 1301, 1317
Manville v. Belden Mining Co.,
17 Fed. 425 841
Mapes V. Scott, 94 ni. 379 833, 833
Mapleton Bank v. Standrod,
8 Idaho 740; 71 Pac. 119;
67 L. R. A. 656 715
Marble Co. v. Harvey, 92
Tenn. 115; 20 S. W. 427;
18 L. R. A. 252; 36 Am.
St. Rep. 71 76, 844, 851
Marbuiy v. Ehlen, 72 Md.
206; 19 Atl. 648; 20 Am.
St. Rep. 467 792, 797, 798,
798, 799
V. Kentucky Union
Land Co., 62 Fed. 335; 10
C. C. A. 393 92, 876, 876, 1433
March v. Eastern R. R. Co.,
43 N. H. 515 1134, 1134, 1275
V. Fairmount Creamery
Co., 32 Pa. Super. Ct. 517 582,
657
i). Romare, 114 Fed. 200 1673,
1675
Marchand v. Loan & Pledge
Ass'n, 26 La. Ann. 389 293
Mare v. Anglo-Indian S. S.
Co., ,3 Times L. R. 142 191
Marine Bank v. Biays, 4 H. &
J. (Md.) 338 812
V. Clements, 3 Bosw.
(N. Y.) 600 1372
V. Ogden, 29 Dl. 248 79, 80
Marine Construction, etc. Cb.,
130 Fed. 446; 64 C. C. A.
648 43
, 144 Fed. 649; 75 C. C.
A. 451 1505, 1553
Marine Ins. Co. v. Young, 1
Cranch 332 402
Marine Mansions Co., 4 Eq.
601 1188, 1513, 1514, 1599
Marine Products Co. v. Alex-
ander, 115 N. Y. App. Div.
475 1064
TABLE OF CASES
[The references are to pages]
1186
921
Marino's Case, 2 Ch. 596 557, 707,
707
Marion Savings Bank v.
Dunkin, 54 Ala. 471 237
Marion Trust Co. v. Bennett
(Ind.), 82 N. E. 782 484, 484
V. Blish (Ind.), 79 N. E.
415 180
V. Crescent Loan, etc.
Co., 27 Ind. App. 451; 61
N. E. 688 862
Market Street Ry. v. Hellman,
109 Cal. 571; 42 Pac. 225 57,
1011, 1017, 1020, 1020,
1024, 1026, 1032, 1040, 1044
Markham v. Jandon, 41 N. Y.
235 808, 809, 811
Markham & Darter's Case
(1899), 2 Ch. 480 640, 640
Mariborough Ass'n v. Peters,
179 Mass. 61; 60 N. e.
396
Marlborough Branch R. R.
Co. V. Arnold, 9 Gray
(Mass.) 159; 69 Am. Dec.
279
Marlborough Mfg. Co. v.
Smith, 2 Conn. 579 699, 700,
1189
Maroney v. Cole, 103 N. Y.
Supp. 560; 52 N. Y. Misc.
451 1379
Marquand v. Federal Steel
Co., 95 Fed. 725 114, 449, 1115
Marr v. Marr (N. J.), 66 Atl.
182 1323, 1344
Marriage, Neave, etc. Co.
(1896), 2 Ch. 663 1542
Marseilles Extension Ry. Co.,
7 Ch. 161 1234
Marsh v. Mathias, 19 Utah
350; 56 Pac. 1074 557, 1032
Marshall v. Columbia Street
Ry. Co., 73 S. Car. 241; 53
S. E. 417 _ 1374
V. Corporation of
Queensborough, 1 Sim. &
Stu.520 395
V. Industrial Federation,
14 N. Y. Ann. Cas. 100;
' 84 N. Y. Supp. 866 1215, 1319
i>. Keach (111.), 81 N. E.
29 784
V. Rogers, etc. Co., 14
Times L. R. 217 1519
V. Savings Bank, 85 Va.
676; 8 S. E. 586; 17 Am.
St. Rep. 84; 2 L. R. A.
534 1267, 1278
Marshall v. South Staffordshire
Tramways Co. (1895), 2 Ch.
36 1590, 1606
Marshall Nat. Bank v. O'Neal,
11 Tex. Civ. App. 640; 34
S. W. 344 867
Marson v. Deither, 49 Minn.
423; 52 N. W. 38 154, 198
Marsters v. Umpqua Valley
Oil Co. (Oreg.), 90 Pac. 151 1315
Marten v. Burns Wine Co., 99
Cal. 355; 33 Pac. 1107 181,
181, 182
Martin v. Deetz, 102 Cal. 55;
36 Pac. 368; 41 Am. St.
Rep. 151 127, 148, 247
V. Eagle Development
Co., 41 Oreg. 448; 69 Pac.
216
V. Fewell, 79 Mo. 401
1012
251,
306
393
890
857
V. Martin & Brown Co.,
27 App. D. C. 59
V. Nashville Bldg. Ass'n,
2 Coldw. (Tenn.) 418 553, 563
■ V. Ne^ Trinidad Lake
Asphalt Co., 87 N. Y. App.
Div. 472 ; 84 N. Y. Supp. 71 1
V. Niagara Falls Paper
Co., 122 N. Y. 165; 25
N. E. 303
V. Remington-Martin
Co., 95 N. Y. App. Div. 18;
88 N. Y. Supp. 573 282, 495
V. Santa Cruz, etc. Co.,
4 Ariz. 171 ; 36 Pac. 36 1310,
1310, 1322
V. Zellerbach, 38 Cal.
300; 99 Am. Dec. 365
Martin & Merryweather v.
Mobile, etc. R. R. Co., 7
Bush (Ky.) 116
Martin, Re, 62 Hun (N. Y.)
557 ; 17 N. Y. Supp. 133 904, 907
Martindale v. Wilson-Cass Co.,
134 Pa. St. 348; 19 Atl.
680; 19 Am. St. Rep. 706
416
1527
Martino v. Commerce Fire Ins.
Co., 47 N. Y. Super. Ct. Rep.
520
Marvin v. Anderson, 111
Wise. 387; 87 N. W. 226
1237,
1238
588
517,
1221
Marx V. Raley & Co. (Cal.),
92 Pac. 519 232
Maryland Agricultural Col-
lege V. Baltimore, etc. R. R.
Co., 43 Md. 434 670, 670
TABLE OF CASES
[The references are to pages]
808
Maryland Fire Ins. Co. v.
Dalrymple, 25 Md. 242; 89
Am. Dec. 779
Maryland Hospital v. Fore-
man, 29 Md. 524 849, 856
Maryland Steel Co. v. Gettys-
burg Electric Ry. Co., 99
Fed. 150 1566
Maryland Trust Co. v. Nat.
Mechanics Bank, 102 Md.
608; 63 Atl. 70 192, 516, 866,
1214
Maryland Tube Works v.
West End Imp. Co., 87 Md.
207; 39 Atl. 620; 39 L. R.
A. 810 147, 227, 232, 241, 247
Maryland, etc. Iron Co. v.
Wingert, 8 Gill. (Md.) 170
Marysville, etc. Co. v. Johnson,
93 Cal. 538; 29 Pac. 126;
27 Am. St. Rep. 215
Marzett's Case, 28 W. R.
541
Marzetti's Case, 42 L. T. 206
Maskelyne British Tjrpewriter
(1898), 1 Gh. 133 .
Mason v. Davol Mills, 132
Mass. 76
V. Equitable League, 77
Md. 483; 27 Atl. 171; 39
Am. St. Rep. 433
V. Harris, 11 Ch. D. 97
940, 996
V. Henry, 152 N. Y. 529;
46 N. E. 837 1259, 1285, 1288
V. Moore, 73 Oh. St. 275;
76 N. E. 932 1276, 1278, 1355
V. Motor Traction Co.
(1905), 1 Ch. 419 78, 1062
V. York & Cumberland
R. R. Co., 52 Me. 82 1413, 1583,
1586, 1625
Masonic Temple Ass'n v.
Channell, 43 Minn. 353,
354; 45 N. W. 716 161, 608
Masonic, etc. Ass'n v. Sever-
son, 71 Conn. 719; 43 Atl.
192 557, 912
Massachusetts Const. Co. v.
Kidd, 142 Fed. 285 933, 1164
Massachusetts Iron Co. v..
Hooper, 7 Gush. (Mass.)
183 154, 157, 768
Massey & Giffin's Case
(1907), 1 Gh. 582 618, 621, 709
Massey Mfg. Co., 13 Ont.
App. 446 486
Mast Buggy Co. v. Litchfield
Imp. Co., 55 111. App. 98 1210
393
208
1265
1280
1581
508
958
935,
Master & Company of Frame-
workers V. Green, 1 Ld.
Raym'd 113 569, 582
Master, etc. of Feltmakers, 1
B. & P. 98 583, 596
Master, etc. of Gunmakers v.
Fell, Willes 384 570
Masury v. Arkansas Nat.
Bank, 93 Fed. 603; 35
C. C. A. 476 715
Mather Humane, etc. Co. v.
Anderson, 76 Fed. 164; 22
C. C. A. 109 1568, 1569
Mathias v. White Sulphur
Springs Ass'n, 19 Mont.
359; 48 Pac. 624 1371
Mathiason Mfg. Co., P. B.
(Mo.), 99 S. W. 502 1006, 1013,
1015, 1016, 1037, 1039,
1040, 1046, 1060
Mathls V. Morgan, 72 Ga. 517;
53 Am. Rep. 847 873
V. Pridham, 1 Tex. Civ.
App. 58; 20 S. W. 1015 631
Matteson v. Dent, 176 U. S.
521; 20 Sup. Ct. 419 788, 791
Matthews v. Associated Press,
136 N. Y. 333; 32 N. E.
981; 32 Am. St. Rep. 741 570,
580
V. Columbia Nat. Bank,
79 Fed. 558 995, 1006
V. Great Northern Ry.
Co., 28 L. J. Ch. 375 459, 467
V. Hoagland, 48 N. J.
Eq. 455; 21 Atl. 1054 695, 712
V. Massachusetts Nat.
Bank, 16 Fed. Cas. 1113 784
Mattingly v. Roach, 84 Cal.
207 420, 423
Mattox V. State, 115 Ga. 212;
41 S. E. 709 383
Maude, Ex parte, 6 Ch. 51 435,
436
Maugham v. Sharpe, 17 C. B.
N. s. 443 254
Maund v. Monmouthshire
Canal Co., 4 Man. & Gr.
452 869
Maunsell v. Midland, etc. Ry.
Co., 1 Hem. & Miller 130 88
Maury v. Chesapeake, etc. R.
R. Co., 27 Gratt. (Va.) 698 1492,
1493
Mausert v. Christian Feigen-
span (N. J.), 63 Atl. 610 1371
Mauthey v. Wyoming, etc.
Ins. Co., 76 N. Y. App. Div.
579; 78 N. Y. aupp. 596 890
TABLE OF CASES
[The references are to pages]
Maux Perry, etc. Co. v. Brane-
gan, 40 Ind. 361 1237, 1319
Mawhinney v. Converse, 102
N. Y. Supp. 279 1661, 1661
Maxwell v. Akin, 89 Fed. 178 47,
235, 838
V. Dulwich College, 7
Sim. 222 m
V. Nat. Bank of Green-
ville, 70 S. Car. 532; 50 S.
E. 195
V. Port Tennant Co., 24
Beav. 495
V. Wilmington Dental
Mfg. Co., 77 Fed. 938
1520, 1520
Maxwell Cattle Co. v. Hender-
son, 12 Colo. App. 425; 66
Pac. 67
Maxwell's Case, 20 Eq. 585
May V. Cleland, 117 Mich. 45;
75 N. W. 129; 44 L. R. A.
163
V. Genessee County Sav-
ings Bank, 120 Mich 330;
79 N. W. 630 623, 691, 812
Mayer v. Denver, etc. R. Co.,
38 Fed. 197
Maynard v. Consolidated
Kent Collieries Corp.
(1903), 2 K. B. 121
V. Eaton, 9 Ch. 414
Maynard's Case, 9 Ch. 60
206, 206
Maynards, Be (1898), 1 Ch.
515 640, 640, 641, 642
Mayo V. Knowlton, 134 N. Y.
250; 31 N. E. 985
Mayor of Lynn v. Denton, 1
T. R. 89
Mayor, etc. of Baltimore v. B.
& O. R. R. Co., 21 Md. 50
V. Ketchum, 57 Md. 23
V. Norman, 4 Md. 352
V. United Rys., etc. Co.
(Md.), 69 Atl. 436
Mayor, etc. of Boonton v.
Boonton Water Co. (N. J.),
61 Atl. 390
Mayor, etc. of Jersey City v.
North Jersey, etc. Ry. Co.
(N. J.), 63 Atl. 906
Mayor, etc. of Merchants of
Staple V. Bank of England,
21 Q. B. D. 160 401, 401, 407,
728, 1010
Mayor, etc. of Newcastle-
upon-Tyne V. Atty.-Gen.,
12 CI. & Fin. 402 121
395
811
313
1507,
1669
651
716
962
744
783
205,
418
889
91
756
756
1485
1632
107
Mayor, etc. of Norwich v.
Norfolk Ry. Co., 4 E. & B.
397 403, 403, 861
Mayor, etc. of Salford v.
Lever (1891), 1 Q. B. 168 320
Mayor, etc. of Southampton
V. Graves, 8 T. R. 590 889
Mead v. Keeler, 24 Barb.
(N. Y.) 20 _ 63, 66, 104
Means v. Cincinnati, etc. R.
R. Co., 2 Disney (Oh.)
465 1413
Meara's Admr. v. Holbrook,
20 Oh. St. 137; 5 Am.
Rep. 633 1615, 1617
Mears v. Moulton, 30 Md. 142 304
V. Western Canada Pulp.
Co. (1905), 2 Ch. 353 160, 644
Mechanics Bank v, Earp, 4
Rawle (Pa.) 384 767, 768, 776
V. Merchants Bank, 45
Mo. 513; 100 Am. Dec. 388 770
V. N. Y., etc. R. R. Co.,
13 N. Y. 599 424, 731, 740
V. Seton, 1 Pet. 299 751, 751,
774, 787, 1235
, Re, 2 Barb. (N. Y. ) 446 1493
Mechanics' Banking Ass'n v.
Mariposa Co., 3 Rob. (N. Y.)
395 700, 705
V. New York, etc. Lead
Co., 35 N. Y. 505 862
Mechanics Bldg., etc. Ass'n v.
Conover, 14 N. J. Eq. 219 803
V. King, 83 Cal. 440; 23
Pac. 376 776
Mechanics, etc. Ass'n v.
Doisey, 15 S. Car. 462 563
Mechanics, etc. Bank v.
Smith, 19 Johns. (N.Y.) 115 594
-B. Stetheimer, 101 N. Y.
Supp. 513; 116N. Y. App.
Div. 198 1355
M. E. Church v. Picketts, 19
N. Y. 482 229
Meckles v. Rochester City
Bank, 11 Paige (N. Y.) 118;
42 Am. Dec. 103 1079
Medical College of Phila-
delphia, 3 Whart. (Pa.) 445 113
Medill V. Collier, 15 Oh. St.
599 252
Medway Cotton Manufactory
V. Adams, 10 Mass. 360 380
Meeker v. Winthrop Iron Co.,
17 Fed. 48 983, 1083, 1312
Meen v. Pioneer Pasteurizing
Co., 90 Minn. 501; 97N.W.
140 43
TABLE OF CASES
[The references are to pages]
MeUy Co. v. London, etc. Fire
Ins. Co., 148 Fed. 683; 79
C. C. A. 454
Melbourne Banking Corp. v.
Brougham, 4 A. C. 156
Melbourne Brewery & Dis-
tillery (1901), 1 Ch. 453
Melbourne Locomotive, etc.
Works, 21 Vict. L. R. 442
875
395
1468,
1470
524,
1190
Melendy v. Barbour, 78 Va.
544 1615, 1616
Melhado v. Hamilton, 28
L. T. N. s. 578; 29 L. T.
N. s. 364 442
V. Porto AUegre Ry. Co.,
9 C. P. 503 293, 294
Meloy V. Central Nat. Bank, 7
Mack. (D. C.) 69 1372
Melvin d. Lamar Ins. Co., 80
111. 446; 22 Am. Rep. 199 191
Memphis, etc. Plank Road Co.
V. Rives, 21 Ark. 302 230
Memphis, etc. R. R. Co. v.
Dow, 120 U.S. 287; 7 Sup.
Ct. 482 1400, 1401, 1402, 1490,
1491
V. Glover, 78 Miss. 467;
29 So. 89 1618
V. Grayson, 88 Ala. 572 ;
7 So. 122; 16 Am. St. Rep.
69 851, 952, 966, 980
V. Hoechner, 67 Fed.
456; 14 C. C. A. 469 1609
V. Railroad Commis-
sioners, 112 U. S. 609; 5
Sup. a. 299 1521, 1522, 1522,
1522
D.Woods, 88 Ala. 630; 7
So. 108; 16 Am. St. Rep.
81; 7 L. R. A. 605 941,955,
1026, 1026, 1063
V. Stringfellow, 44 Ark.
322; 51 Am. Rep. 598 1609
Menasha v. Milwaukee, etc.
R. R. Co., 52 Wise. 414; 9
N. W. 396 1632
Mendel v. Boyd, 3 Nebr. (Un-
official) 473; 91N.W.860 1328
Mendenhall v. West Chester,
etc. R. R. Co., 36 Pa. St.
145 n, 150 n. 1584
Menier v. Hooper's Tel.
Works, 9 Ch. 350 935
Mercantile Investment, etc.
Co. V. International Co.
(1893), 1 Ch. 484 1672, 1673,
1673, 1674, 1674, 1674
Mercantile Investment, etc.
Co. V. River Plate Trust Co.
(1894), 1 Ch. 578 1674
Mercantile Library Hall Co.
V. Pittsburg Library Ass'n,
173Pa. St. 30; 33Atl. 744 1188,
1200, 1201, 1305
Mercantile Nat. Bank v.
Parsons, 54 Minn. 56; 55 N.
W. 825 ; 40 Am. St. Rep. 299 300
Mercantile Statement Co. v.
Kneal, 51 Minn. 263; 53
N. W. 632 133, 134
Mercantile Trust Co. v. Balti-
more, etc. R. R. Co., 79
Fed. 389 1566, 1608
■ V. Baltimore, etc. R. R.
Co., 82 Fed. 360 . 449, 450, 450
V. Baltimore, etc. R. R.
Co., 89 Fed. 606 1466
V. Baltinfore, etc. R. R.
Co., 94 Fed. 722 1529, 1585
V. Chicago, etc. Ry. Co.,
61 Fed. 372 1593
V. Kanawha, etc. Ry. Co.,
58 Fed. 6; 7 C. C. A. 3 1634,
1635, 1646, 1653, 1653
— ' — V. Kings County, etc. Ry.
Co., 40 N. Y. App. Div. 141 ;
57 N. Y. Supp. 892 1561
V. Lamoille Valley R. R.
Co., 16 Blatchf. 324 1587
V. Missouri, etc. Ry.
Co., 36 Fed. 221 1593,1593,1603
V. Missouri, etc. Ry. Co.,
41 Fed. 8 1567, 1607, 1647
V. Pittsburgh, etc. R. R.
Co., 29 Fed. 732 1535, 1543
V. Portland, etc. R. R.
Co., 10 Fed. 604 1586
' V. Southern Iron Car
Line, 113 Ala. 543; 21 So.
373 1643, 1644
V. St. Louis, etc. Ry. Co.,
71 Fed. 601 1611
V. Texas, etc. Ry. Co., 51
Fed. 529 1554
V. United States Ship-
building Co., 130 Fed. 725 1585
Mercantile Trust, etc. Co. v.
Low, 87 Fed. 241; 30-
C. C. A. 621 1666
Mercer v. Buchanan, 132 Fed.
501 1138, 1151, 1151, 1154
Mercer County v. Hackett, 1
Wall. 83 1403, 1423, 1424
Mercer County Court v.
Springfield, etc. Turnpike
Co., 10 Bush. (Ky.) 254 429
TABLE OF CASES
[The references are to pages]
Merchant Banking Co. of
London v. Merchants Joint-
Stock Bank, 9 Ch. D. 560 373
Merchants' Ad.-Sign Co. v.
Sterling, 124 Cal. 429; 57
Pac. 468; 71 Am. St. Rep.
94; 46 L. R. A. 142 421
Merchants' Bank v. Living-
ston, 74 N. Y. 223 723
V. Moore, 106 Ala. 646;
17 So. 705 1560
V. Shouse, 102 Pa. St.
488 768, 773
V. State Bank, 10 Wall.
604 870
Merchants Bldg., etc. Co. v.
Chicago Exchange Bldg.
Co., 106 111. App. 17; 210
111. 26; 71 N. E. 22; 102
Am. St. Rep. 145 81
Merchants' Nat. Bank v.
Citizens Gas Light Co., 159
Mass. 505; 34 N. E. 1083;
38 Am. St. Rep. 453 1380
V. Glendon Co., 120
Mass. 97 221, 227
V. Goddin, 76 Va. 503 1374,
1525
V. Hanson, 33 Minn. 40;
53 Am. Rep. 5 833, 844
V. Minnesota Thresher
Mfg. Co., Receivership of,
90 Minn. 144 ; 95 N. W. 767 35,
39,43
■ V. Nichols & Shepard Co.,
223 111.41; 79N. E. 38; 7
L. R. A. N. s. 752 1362
V. Wehrmann, 202 U. S.
295; 26 Sup. Ct. 613 74, 80,
834, 835, 839
Merchants', etc. Co. v. Chicago
Rys. Co., 158 Fed. 923 1649
Merchants', etc. Line v.
Waganer, 71 Ala. 581 250
Meredith v. New Jersey Zinc
& Iron Co., 55 N. J. Eg. 211 ;
37 Atl. 539; 56 N. J. Eq.
454; 41 Atl. 1116 499, 500,
501, 507
V. New Jersey Zinc, etc.
Co., 59 N. J. Eq. 257; 44
Atl. 55 134, 138
Meredith Village Savings
Bank v. Marshall, 68 N. H.
417; 44 Atf. 526 806
Merrick v. Consumers Heat,
etc. Co., Ill 111. App. 153, 210
V. Peru Coal Co., 61 111.
472 1247
Merrick v. Reynolds Engine,
etc. Co., 101 Mass. 381 123, 219,
247
V. Trustees, etc. of Bank
of the Metropolis, 8 Gill
(Md.) 59
Merrill v. Farmers' L. & T. Co.,
24 Hun (N. Y.) 297
V. Hurley, 6 S. Dak. 592;
62 N. W. 958; 55 Am. St.
Rep. 859
V. Montgomery, 25 Mich.
73
V. Suffa (Colo.), 93 Pac.
1099
Merrimac Mining Co. v.
Bagley, 14 Mich. 501 667, 668
Merryweather v. Nixan, 8
T. R. 186
Mersey Ry. Co., 64 L. J. Ch.
623
(1895), 2 Ch. 287
Messchaert v. Kennedy, 4
McCrary 133; 13 Fed. 242
381
1487
1381
409
906
1349
1645
1531
1588,
1589, 1636
Messer v. Grand Lodge
United Workmen, 180
Mass. 321; 62 N. E. 252 583
Metcalf V. American School
Furniture Co., 108 Fed. 909 979
V. American School
Furniture Co., 122 Fed. 115
72, 951, 1303, 1312
Methodist Episcopal Soc. v.
Lake, 51 Vt. 353 230
Meton & Sons, Thomas F., v.
Isham Wagon Co., 4 N. Y.
Supp. 215 1364
Metropole Bath Co. v. Garden
CityFanCo.,50Ill.App.681 591
Metropolitan Aoc. Ass'n v.
Froiland, 161 111. 30; 43
N. E. 766; 52Am. St. Rep.
359 589
V. Windover, 137 111. 417;
27 N. E. 538 662
Metropolitan Bank v. Heiron,
5 Ch. D. 319 . 1346
Metropolitan Coal, etc. Ass'n
V. Scrimgeour (1895), 2
Q. B. 604 354
Metropolitan Lead & Zinc Co.
V. Webster, 193 Mo. 351 ; 92
S. W. 79 204
Metropolitan Life Ins. Co. v.
Anderson, 79 Md. 375; 29
Atl. 606 403, 406
V. Dempsey, 72 Md. 288;
19 Atl. 642 . 232
TABLE OF CASES
[The references are to pages]
Metropolitan Rubber Co. v.
Place, 147 Fed. 90; 77
C. C. A. 262 1238
Metropolitan Sav. Bank v.
Mayor, etc. of Baltimore,
63 Md. 6 736
Metropolitan Stock Exch. v.
Lyndonville Nat. Bank, 76
Vt. 303; 57 Atl. 101 851, 870
Metropolitan Tel. Co. v.
Domestic Tel. Co., 44 N. J.
Eq. 568; 14 Atl. 907 1215,1305
Metropolitan Trust Co. v.
Columbus, etc. R. R. Co.,
93 Fed. 702 1401
V. Dolgeville Electric Co.,
35 N. Y. Misc. 467; 71 N. Y.
Supp. 1055 1502, 1505
V. Tonawanda, etc. R. R.
Co., 103N. Y.245; 8N. E.
488 1559, 1640, 1643, 1649
Metropolitan, etc. Co. v.
Hawkins, 4 H. &. N. 146 889
Metropolitan, etc. R. R. Co. v.
Manhattan, etc. R. R. Co.,
11 Daly (N. Y.) 373 1186, 1188,
1298, 1305, 1305
Metropolitan, etc. Ry. Co. v.
Kneeland, 120 N. Y. 134;
24 N. E. 381; 17 Am. St.
Rep. 619; 8 L. R. A. 253 1263,
1280
Metz V. Buffalo, etc. Co., 58
N. Y. 61; 17 Am. Rep. 201
1522, 1632
Mexican, etc. Co., 4 De G. & J.
544 7
Meyer v. Blair, 109 N. Y. 600;
17 -N. E. 228; 4 Am. St.
Rep. 500 778
V. Bristol Hotel Co., 163
Mo. 59; 63 S. W. 96 984, 985
V. Hornby, 101 U. S. 728 1543
V. Johnston, 53 Ala. 237;
64 Ala. 603 1204, 1204, 1509,
1522, 1522, 1536, 1566, 1606,
1629, 1646, 1647, 1649, 1649,
1649, 1655
V. Page, 112 N. Y. App.
Div. 625 960
V. Richards, 163 U. S.
385; 16 Sup. Ct. 1148 1440
V. Ruby Trust, etc. Co.,
192 Mo. 162; 90 S. "W. 821
V. Utah, etc. Ry. Co., 3
Utah 280; 3 Pao. 393
Meyers v. New York, etc.
R. R. Co., 43 Me. 232
628,
635
1637
1451
902
1069
1251
213
Meysenberg v. People, 88 111.
App. 328
M. Groh's Sons v. Groh, 80
N. Y. App. Div. 85; 80
N. Y. Supp. 438
Michel V. Betz, 108 N. Y. App.
Div. 241; 95 N. Y. Supp.
844 1323, 1324
Michigan Trust Co. v. Lansing
Lumber Co., 103 Mich. 392;
61 N. W. 668 1581
V. State Bank, 111 Mich.
306; 69 N. W. 645 767, 774,
775
Mickey v. Stratton, 5 Sawy.
475 • 396, 407
Mickles v. Rochester City
Bank, 11 Paige (N, Y.) 118;
42 Am. Dec. 103
Middlecoft Hotel Co. v. Yeo-
mans, 89 111. App. 170
Middleton v. Arastraville Min-
ing Co., 146 Cal. 219; 79
Pac. 889 147, 152, 918, 1080
Middletown v. Boston, etc.
R. R. Co., 53 Conn. 351; 5
Atl. 706 ■ 475, 1107
Midland Counties Dist. Bank
V. Attwood (1905) 1 Ch. 357 1242
Midland Electric, etc. Co., 37
W. R. 471 627, 628
Midland Railway Co. v. At-
torney-General (1902), A. C.
171
Midland Steel Co. v. Citizens
Nat. Bank, 34 Ind. App.
107; 72N. E. 290
Midland, etc. Ry. Co. v.
Gordon, 16 M. &. W. 804
201, 214, 610
Migotti's Case, 4 Eq. 238 206, 207
Milbank v. New York, etc.
R. R. Co., 64 How. Pr.
(N. Y.) 20 76, 846, 846, 1026
Milbome v. Royal Benefit
Soc, 14 N. Y. App. Div.
406; 43 N. Y. Supp. 1026 852
Milburn v. Wilson, 31 Can.
Sup. Ct. 481 310, 311
Miles V. Bough, 3 G. & D. 119 603,
604, 915
V. Roberts, 76 Fed. 919 1411,
1411
V. Vivian, 79 Fed. 848 ; 25
C. C. A. 208 ' 1487
Miles' Case, 4 De G. J. & S.
471 169, 169
Mill Dam Foundry v. Howey,
21 Pick. (Mass.) 417 397, 406
481
379
200,
TABLE OF CASKS
[The references are to pages]
591
1371
183
975
1222
1659
557
Milledgeville Water Co. ■;;.
Edwards, 121 Ga. 555; 49
S. E. 621
Milleni). Guerrard, 67 Ga. 284;
44 Am. Rep. 720 1143, 1145
'Miller v. Bank of British
Columbia, 2 Oreg. 291
V. Barber, 66 N. Y. 558
V. Barlow, 78 N. Y. App.
Div. 331; 79 N. Y. Supp.
964
V. Bradish, 69 Iowa 278;
28 N. W. 594 425, 1098, 1109,
1117
V. Chance, 3 Edw. Ch.
(N. Y.) 399
». Dodge, 28 N. Y.
Misc. 640; 59 N. Y. Supp.
1070
V. Eschbach, 43 Md. 1
V. Ewer, 27 Me. 509; 46
Am. Dec. 619 161, 1008, 1009
V. Farmers' Milling, etc.
Co. (Nebr.), 110 N. W. .
995 571, 571, 679
V. Flemingsburg, etc.
Turnpike Co., 22 Ky. Law
Rep. 1039; 59 S. W. 512
V. Grand Lodge, 72 Mo.
App. 499
V. Higginbotham (Ky.),
93 S. W. 655
•». Houston City, etc. Ry.
Co., 55 Fed. 366; 5 C. C. A.
134 753, 807
V. Houston City Ry. Co.,
69 Fed. 63; 16 C. C. A. 128 735
V. Illinois Central R. R.
Co., 24 Barb. (N. Y.) 312 500,
501, 509
V. Insurance Co., 92
Tenn. 167; 21S. W. 39; 20
L. R. A. 765 142, 851, 855
V. Kitchen (Nebr.), 103
N. W. 297 957
V. Matthews, 87 Md. 464;
40Atl. 176 1073,1233
V. Oregon City, etc. Mfg.
Co., 3 Oreg. 24 1323, 1373
V. Murray, 17 Colo. 408;
30 Pac. 46 943, 971
V. Pittsburgh, etc. R. R.
Co., 40 Pa. St. 237; 80 Am.
Dec. 570 456
v: Ratterman, 47 Oh. St.
141; 24 N. E. 496 449, 450,
450, 451, 451, 451, 1028
V. Rutland, etc. R. R.
Co., 36 Vt. 452 1486, 1639
847
664
635
Miller v. Rutland, etc. R. R.
Co., 40 Vt. 399; 94 Am.
Dec. 413 1452, 1456, 1472, 1666
V. State, 15 Wall. 478 33
V. Tod, 95 Texas 404;
67 S. W. 483 45, 113
V. Wild Cat Gravel Road
Co., 52 Ind. 51 104
V. Wild Cat Gravel Road
Co., 57 Ind. 241 205
Miller's Dale Co., 31 Ch. D.
211 492
Millhiser, etc. Co. v. Gallego
Mills Co., 101 Va. 579; 44
S. E. 760
Milliken v. Steiner, 56 Ga. 251
1413
1185,
1226
1201
Mills V. Boyle Mining Co., 132
Cal. 95; 64 Pac. 122
V. Britton, 64 Conn. 4;
29 Atl. 231; 24 L. R. A.
536 1143, 1144, 1145
V. City of Chicago, 143
Fed. 430 970
V. Hendershot (N. J.),
62 Atl. 542 1128, 1129, 1129,
1240, 1241, 1284, 1288
V. Northern Ry. of Bue-
nos Ayres Co., 5 Ch. 621 961,
962, 1103, 1103, 1103, 1104, 1117
V. Potter, 189 Mass. 238;
75 N. E. 627
V. State, 23 Tex. 295
V. Stewart, 41 N. Y. 384
Mills County Nat. Bank v.
Perry, 72 Iowa 15 ; 33 N. W.
341; 2 Am. St. Rep. 228
Millsaps V. Chapman, 76 Miss.
942; 26 So. 369; 71 Am. St.
Rep. 547 1262, 1316
MillviUe Traction Co. v. Good-
win, 53 N. J. Eq. 448; 32
Atl. 263
Millward-Cliffe Cracker Co.'s
Estate, 161 Pa. St. 157; 28
Atl. 1072 592, 1378, 1379
Milroy v. Lord, 4 De G. F. &
J. 264 713
Miltenberger v. Logansport
Ry. Co., 106 U. S. 286; 1
Sup. a. 140 1559, 1567, 1646
Milward v. Avill, 4 Manson 403 1648
Milwaukee Cold Storage Co.
V. Dexter, 99 Wise. 2-14;
74 N. W. 976; 40 L. R. A.
837 322, 323, 325, 327, 353, 354
Milwaukee Light, Heat &
Traction Co. (Wise), 112
N. W. 663 95, 305
1662
25
667
866
1371
TABLE OF CASES
[The references are to pages]
Milwaukee, etc. R. R. Co. v.
Field, 12 Wise. 340 456
V. Soutter, 2 Wall. 510 1602,
1626
Milwaukee, etc. Ry. Co. v.
Brooks Locomotive Works,
121 U. S. 430; 7 Sup. Ct.
1094 1515
V. Milwaukee & Western
R. R. Co., 20 Wise. 174; 88
Am. Dec. 740 1631
Miner v. Belle Isle Ice Co., 93
Mich. 97; 53 N. W. 218;
17 L. R. A. 412 935, 940, 1082,
1269
Mineral Water Bottle, etc.
Soc. V. Booth, 36 Ch. D. 465 568,
570
Miners' Ditch Co. v. Zeller-
bach, 37 Cal. 543; 99 Am.
Dec. 300 407, 861
Mining Co. v. Anglo-Califor-
nian Bank, 104 U. S. 192 1220,
1224, 1225, 1233
Minneapolis Threshing Co. v.
Davis, 40 Minn. 110; 41
N.W. 1026; 3L.R.A. 796;
12 Am. St. Rep. 701 209
Miimeapolis Trust Co. v.
Clark, 47 Minn. 108; 49
N. W. 386 297
Minneapolis, etc. Suburban
Ry. Co. (Minn.), 112 N. W.
13 60,383
Minnehaha Driving Park
Ass'n V. Legg, 50 Minn. 333 ;
52 N. W. 898 657, 661
Minnesota Loan & Trust Co.
V. Beebe, 40 Minn. 7; 41
N. W. 232; 2 L. R. A. 418 56
Minor v. Mechanics Bank of
[Alexandria, 1 Pet. 46 148, 1368,
1368
Minot V. Mastin, 95 Fed. 734;
37 C. C. A. 234 1617
V. Paine, 99 Mass. 101 ;
96 Am. Dec. 705 1144
Mirage Irrigation Co. (Nebr.),
108 N. W. 977 651
Miser Gold, etc. Co. v. Moody
(Colo.), 86 Pac. 335 282
Mississippi Valley Co. v.
Chicago, etc. Co., 58 Miss.
896; 38 Am. Rep. 348 1502, 1512
Mississippi Valley, etc. Ry. Co.
V. U. S. Express Co., 81 111.
534 1515, 1515, 1551
Mississippi, etc. R. R. Co. v.
Caster, 20 Ark. 455 601, 604
1009
1374
1619
Missouri Lead, etc. Co. v.
Reinhard, 114 Mo. 218; 21
S. W. 488; 35Am. St. Rep.
746
Missouri Pac. Ry. Co. v. Sidell
67 Fed. 464; 14 C. C. A.
477
V. Texas Pac. Ry. Co.,
30 Fed. 2
V. Texas, etc. Ry. Co.,
33 Fed. 701 82, 1575, 1608,
1642
V. Texas, etc. Ry. Co., 41
Fed. 319 1575, 1642
Missouri River R. R. Co. v.
Richards, 8 Kans. 101 1238,
1246, 1247
Missouri, etc. Ry. Co. v.
Faulkner, 88 Tex. 649; 32
S. W. 883
V. Lacy, 13 Tex. Civ.
App. 391; 35 S. W. Rep.
505
V. Union Trust Co., 156
N.'Y. 592; 51 N. E. 309
1472, 1474
V. Wood (Tex.)" 52 S. W.
93 1609, 1610
V. Wylie (Tex.), 33 S. W.
Rep. 771 1610, 1620
Mitcalfe's Case, 13 Ch. D.
169 1339, 1339
Mitchell, N., v. City of Glas-
cow Bank, 4 A. C. 624
Mitchell V. Colorado Fuel, etc.
Co., 117 Fed. 723
V. Lycoming Mut. Ins.
Co., 51 Pa. St. 402
V. Rome R. R. Co., 17
Ga. 574 175, 667, 668
V. Rubber Reclaiming
Co. (N. J.), 24 Atl. 407 898, 904
• V. St. Andrew's Bay
Land Co., 4 Fla. 200
V. United Box Board,
etc. Co. (N. J.), 66 Atl. 938
1374
1633
1471,
746
1018
593
398
cxl
1305,
1313
V. Vermont Copper Min-
ing Co., 40 N. Y. Super. Ct.
406; 67 N. Y. 280 558, 660, 662,
662, 1373
Mitchell's Case, 9 Eq. 363 620, 620
A., 4 A. C. 548 746, 800, 800
Mitchell, Ex parte, 12 S. Car.
83 1646
— Re, 6 Ch. D. 655 1439
Mix V. Nat. Bank of Bloom-
ington, 91 111. 20; 33 Am.
Rep. 44 221, 227
TABLE OF CASKS
[The references are to pages]
Mobile Land, etc. Co. v. Gass,
142 Ala. 520; 39 So. 229 1296,
1310
Mobile Mut. Ins. Co. v. Cul-
lom, 49 Ala. 558 767, 776
Mobile, etc. R. R. Co. v.
Davis, 62 Miss. 271 1610, 1619
V. Nicholas, 98 Ala. 92;
12 So. 723 1031, 1048, 1052,
1053, 1054
V. Tennessee, 153 U. S.
486; 14 Sup. Ct. 968 1091, 1104,
1104
V. Yandal, 5 Sneed
(Tenn.) 294 428
Mobile, etc. Ry. Co. v. Steiner,
61 Ala. 559 1523, 1633
Mock V. Supreme Council, 106
N. Y. Supp. 155 586
Modem Woodmen v. Deters,
65 111. App. 368 580
V. Jameson, 48 Kans.
718; 30 Pac. 460 663
V. Wieland, 109 111. App.
340 578, 590
Modstock Mining Co. v. Har-
ris, 40 Nova Scotia 336 1225,
1227, 1228
Moench & Sons Co., 130 Fed.
685 1187
Moffat V. Farquahar, 7 Ch. D.
591 765, 1014
V. Smith, 101 Fed. 771;
41 C. C. A. 671 875
Mogridge, Re, 57 L. J. Ch.
932 193
Mohawk & Hudson Ry. Co.,
19 Wend. (N. Y.) 135 998, 1020,
1021, 1059
Mohawk Nat. Bank v. Sche-
nectady Bank, 78 Hun
(N. Y.)90; 28N. Y. Supp.
1100 111, 574
Moises V. Thornton, 8 T. R.
303 404, 406
Mokelvmine Hill Mining Co.
V. Woodbury, 14 Cal. 424;
73 Am. Dec. 658 126, 220
Molineaux v. London, etc.
Ins. Co. (1902), 2 K. B. 589 1168,
1170, 1171, 1172
MoUer v. Fibre Co., 187 Pa.
St. 553; 41 Atl. 478 1217, 1218
Moller V. Maclean, 1 Megone
274 152, 1162
Monarch Co., M. V., v. Farm-
ers', etc. Bank, 20 Ky.
Law Rep. 1351; 49 S. W.
317 84
Monmouth Investment Co. v.
Means, 151 Fed. 159; 80
C. C. A. 527 1322
Monmouth, etc. Ins. Co. v.
Lowell, 59 Me. 504 1214
Monongahela Bridge Co. v.
Pittsburgh, etc. Traction
Co., 46 Atl. 99; 196 Pa. 25;
79 Am. St. Rep. 685 873, 877
Monroe Mercantile Co. v. Ar-
nold, 108 Ga. 449; 34 S. E.
176 1196, 1211
Monroe Republican Club, 6
Pa. Dist. Rep. 515 94, 116
Montclair v. N. Y. & Green-
wood Lake Ry. Co., 45
N. J. Eq. 436; 18 AtL 242 6
Montclair Military Academy
V. State Board of Assessors,
65 N. J. Law 516; 47 Atl.
558 59
Monterey, etc. R. R. Co. v.
Hildreth, 53 Cal. 123 212
Montgomerie's Brewery Co.
V. Blyth, 27 Vict. L. R. 175 1279,
1288
Montgomery v. Forbes, 148
Mass. 249; 19 S. E. 342 103,
240, 240, 245, 266; 881
V. Petersburg, etc. Ins.
Co., 70 Fed. 746; 17 C. C.
A. 360 1621, 1621
V. Seaboard Air Line Ry.
Co., 73 S. Car. 503; 53 S. E.
987 223
V. Whitehead (Colo.), 90
Pac. 509 1127
Montgomery Iron Works v.
Roman (Ala.), 41 So. 811 1404
Montgomery Light Co. v.
Lahey, 121 Ala. 131; 25
So. 1006 943, 968, 968
Montgomery Traction Co. v.
Harmon, 140 Ala. 505; 37
So. 371 942, 977, 1083
Montreal, etc. Power Co. v.
Robert (1906), A. C. 196 591,
591, 1222
Monument Nat. Bank v.
Globe Works, 101 Mass.
57; 3 Am. Rep. 322 862
Moore v. Bank of Commerce,
52 Mo. 377 771, 772
V. Ensley, 112 Ala. 228;
20 So. 744 1046
V. Marshalltown Opera-
House Co., 81 Iowa 45; 46
N. W. 750 699
V. Moore, 18 Eq. 474 713
cxli
TABLE OF CASES
[The references are to pages]
Moore v. New Jersey Lighter-
age Co., 57 N. Y. Super. Ct.
1;5N. Y. Supp. 192 650
V. New Jersey Lighterage
Co., 25 Jones & S. (N. Y.)
1 666
V. North Western Bank
(1891), 2 Ch. 599 695, 695, 710,
711
V. Order of Railway Con-
ductors, 90 Iowa 721; 57
N. W. 623 663
V. Peruvian Corp. (1908),
1 Ch. 604 1529, 1547
. V. Rawlins, 6 C. B. n. s.
289 98, 660
V. Silver Valley Mining
Co., 104 N. Car. 534; 10
S. E. 679 967, 971
V. Wheal Byjerkemo Tin
Mining Co., 17 Vict. L. R.
680 604, 661, 668
Moore, etc. Hardware Co. v.
Towers Hardware Co., 87
Ala. 206; 6 So. 41; 13 Am.
St. Rep. 23 296, 297
Moores v. Citizens' Nat. Bank,
1 1 1 U. S. 156 ; 4 Sup. a. 345 735
Moosbrugger v. Walsh, 89
Hun 564; 35 N. Y. Supp.
550 487
Moran v. Pittsburgh, etc. Ry.
Co., 32 Fed. 878 • 1508
V. Strau8s,:6 Ben 249; 17
Fed. Cas. 123 1187
Morelock v. Westminster
Water Co. (Md.), 4 Atl. 404 1078
Morey v. Fish Bros. Wagon
Co., 108 Wise. 520; 84
N. W. 862 1112
Morgan v. Donovan, 58 Ala.
241 1510
V. Hedstrom, 164 N. Y.
224; 58 N. E. 26 1390
V. Howland, 89 Me. 484;
36 Atl. 990 647
V. Independent Order,
etc. of Jacob (Miss.), 44 So.
791 565
V. Kansas Pac. Ry. Co.,
15 Fed. 55 1586, 1586
V. King, 27 Colo. 539;
63 Pac. 416 967, 1288, 1295,
1312
V. Lehigh Valley Coal
Co. (Pac), 64 Atl. 633 924
V. Lewis, 46 Oh. St. 1 ;
17 N. E. 558 525, 525
V. Louisiana, 93 La. 217 1521
cxlii
Morgan v. Morgan, 16 Abb. Pr.
N. s. (N. Y.)'291 889
V. Struthers, 131 U. S.
246; 9 Sup. a. 726 778
V. Union Pacific Ry. Co.,
11 Fed. 692 1679
V. United States, 113
U. S. 476; 5 Sup. Ct. 588 1435,
1436, 1436
Morgan's Case, 28 Ch. D.
620 898
Morgan County v. Thomas, 76
III. 120 1510, 1514, 1522, 1523
Morgans', etc. Co. v. Farmers'
L. & T. Co., 79 Fed. 210;
24 C. C. A. 495 1567
V. Moran, 91 Fed. 22;
33 C. C. A. 313 1633
V. Texas Central Ry.
Co., 137 U.S. 171; 11 Sup.
Ct. 61 1467, 1562, 1570, 1593
Morisette v. Howard, 62 Kans.
463; 63 Pac. 756 1217, 1222
Morley Bldg. Co., John, v.
Barras (1891), 2 Ch. 386 1201,
1212, 1213, 1231
Morrice v. Aylmer, L. R. 7
H. L. 717 414, 414
Morrill v. Little Falls Mfg.
Co., 53 Minn. 371; 55 N.
W. 547; 21 L. R. A. 174 1010,
1011, 1017
V. Noyes, 56 Me. 458;
96 Am. Dec. 486 1502
Morris v. Cheney, 51 111. 451 66, 66,
1514
V. Elyton Land Co., 125
Ala. 263; 28 So. 513 952, 959
V. Griffith & Wedge Co.,
69 Fed. 131 1375
V. Keil, 20 Minn. 531 400
V. Metalline Land Co.,
164 Pa. St. 326; 30 Atl.
240; 44 Am. St. Rep. 614;
27 L. R. A. 305 604, 604, 658,
658, 660
V. Stevens, 178 Pa. St.
563; 36 Atl. 151 499, 508, 509
V. Third Nat. Bank, 142
Fed. 25; 73 C. C. A. 211 53
V. Union Bank, 31 Can.
Sup. Ct. 594 645
Morris Canal, etc. Co. v.
Fisher, 9 N. J. Eq. 677; 64
Am. Dec. 423 1423
V. Lewis, 12 N. J. Eq.
323 1423, 1439
Morris, etc. R. R. Co. v.
Ayres, 29 N. J. Law 393 569
TABLE OF CASES
[The references are to pages]
Morrison v. Dorsey, 48 Md. 461 557,
562, 633
V. Eaton, etc. R. R. Co.,
14 Ind. 110 1401
V. Forman, 177 111. 427;
53 N. E. 73 250, 1607
V. Grand Trunk Ry. Co.,
5 Ont. L. R. 38
V. Indianapolis, etc. Ry.
Co. (Ind.), 76 N. E. 961
V. Savage, 56 Md. 142
V. Snow, 26 Utah 247;
72 Pac. 924
V. Trustees, etc. Corp.,
79 L. T. 605
V. Wilder Gas Co., 91 Me.
492; 40 Atl. 542; 64 Am.
St. Rep. 257
V. Wisconsin Odd Fel-
lows, etc. Ins. Co., 59
Wise. 162; 18 N. W. 13 584, 589
, Re, 10 N. B. R. 105 769
Morrison- Wentworth Bank v.
Kirdolff, 75 Mo. App. 297
Morrow v. Nashville Iron &
Steel Co., 87 Tenn. 262; 10
S.W. 495; 10 Am. St. Rep.
658; 3 L. R. A. 37 193, 627,
1404
V. Peterborough Water
Co., 4 Ont. L. R. 324 433,471
Morse v. Bay State Gas Co.,
91 Fed. 938
V. Bay State Gas Co., 91
Fed. 944
V. Chicago, etc. R. R.
Co., 84 N. Y. App. Div.
406; 82 N. Y. Supp. 698
V. Pacific Ry. Co., 93 111.
App. 33 620, 623
Morshead v. Southern Pac.
Co., 123 Fed. 350
Mortgage Ins. Corp. v. Cana-
dian Agricultural, etc. Co.
(1901), 2 Ch. 377
Mortimer v. Potter, 213 111.
178; 72N. E. 817
Morton v. Cowan, 25 Ont. 529
1364
250
614
1352
668
1196
574
1679
979
1557
974
1591
679
423,
715
V. Hamilton College, 100
Ky. 281; 38 S. W. 1; 35
L. R. A. 275 293
V. New Orleans, etc. Ry.
Co., 79 Ala. 590 1436, 1436,
1591
Morton Boarding Stables, 108
Fed. 791 44
Morton Gravel Road Co. v.
Wysong, 51 Ind. 4 558, 561
Morton Trust Co. v. Home
Tel. Co., 66 N. J. Eq. 106;
57 Atl. 1020 1452, 1455, 1456,
1456
Morville v. Am. Tract Soc,
123 Mass. 129; 25 Am. Rep.
40 855
Moseley v. Cressey's Co., 1
Eq. 405 342, 343
V. Koffyfontein Mines
(1904), 2 Ch. 108 1404
Moses V. Ocoee Bank, 1 Lea
(Tenn.) 398 494,614, 1240,
1265, 1273, 1342, 1345
V. Scott, 84 Ala. 608; 4
So. 742 1029, 1030
V. Tompkins, 84 Ala.613 ;
4 So. 763 948, 1035, 1164, 1226,
1250
Moshannon Land, etc. Co. v.
Sloan, 109 Pa. St. 532 1376
Mosher v. Sinnott, 79 Pac. 742
(Colo.) 630, 979, 979, 1187, 1300,
1318
Moss V. Averill, 10 N. Y. 449
V. Geddes, 28 N. Y. Misc.
291; 59 N. Y. Supp. 867
V. Syers, 32 L. J. Ch. 711
Moss Tie Co., T. J., v. Com-
monwealth (Ky.), 105 S. W.
163
Moss's Appeal, 83 Pa. St. 264;
24 Am. Rep. 164
Mostyn v. Calcott Hall Min-
ing Co., 1 Fos. & Fin. 334
Mott's Case, 23 W. R. 405
Mottu V. Primrose, 23 Md. 482
996, 1163, 1194, 1326
Mount Carmel Tel. Co. v.
Mt. Carmel & Flemingsburg
TelCo. (Ky.),84S.W.515
912
1637
442
368
502
233
1011
955,
cxliii
274,
302
Mount Holly, etc. Co. v. Ferree,
17 N. J. Eq. 117 723, 752, 754
Mount Holly Paper Co.'s
Appeal, 99 Pa. St. 513 731, 731,
775
Mount Morgan Gold Mine, 3
Times L. R. 556 181, 182
Mount Sterling, etc. R. R. Co.
V. Looney, 1 Mete. (Ky.)
550 1370
Mount Sterling Carload Co.
V. Little, 14 Bush (Ky.)
429 198
Mount Washington Hotel Co.
V. Marsh, 63 N. H. 230 1310
Mount Vernon Bank ti.Porter,
148 Mo. 176; 49 S. W. 982 1345
TABLE OF CASES
[The refereaces are to pages]
Mousseaux v. Urquhart, 19
La. Ann. 482 1017, 1021, 1027
1043, 1047, 1047
Mowatt V. Castle Steel, etc.
Co., 34 Ch. D. 58 402, 1410,
1524
V. LondesboTOUgh, 4
E. & B. 1 342
Mowbray v. Antrim, 123 Ind.
24; 23 N. E. 858 1367
Mowry v. Farmers' L. & T.
Co., 76 Fed. 38; 22 C. C. A.
52 1402, 1669
Moxham v. Grant (1900), 1
Q. B. 88 1127,1265
Moxie Nerve Food Co. v.
Bamnbach, 32 Fed. 205 120
Moyer v. East Shore Terminal
Co., 41 S. Car. 300; 19
S. E. 651; 44 Aim. St. Rep.
709; 25 L. R. A. 48 591, 593, 594
Moyle V. Landers (Cal.), 21
Pac, 1133 964, 978
Mozley v. Alston, 1 Phillips
Ch. 790 931, 972
Mudeett v. Horrell, 33 Cal. 25 921
Mueller V. Madison Bldg., etc.
Ass'n, 11 S. Dak. 43; 75
N. W. 277 657, 661
Muhlenberg v. Philadelphia,
etc. R. R. Co., 47 Pa. St. 16 1476
Muir V. City of Glascow
Bank, 4 A. C. 337 ^95
Muirhead v. Forth, etc.
Mutual Ins. Ass'n (1894),
A. C. 72 557, 561, 662
Mulheran v. Gebhardt, 93
N. Y. App. Div. 98; 86
N. Y. Supp. 941 978
MulhoUand v. Washington
Match Co., 35 Wash. 315;
77 Pac. 497 177, 181
MuUanphy Sav. Bank v.
Schott, 135 HI. 655; 26
N. E. 640; 25 Am. St. Rep.
401 407, 917, 1315
Mulvihill V. Vicksburg Ry.,
etc. Co. (Miss.), 40 So. 647 963
Mumf ord v. Ecuador Develop-
ment Co., Ill Fed. 639
V. Hawkins, 5 Denio
(N. Y.) 355
Muncy Traction Engine Co. v.
Green, 143 Pa. St. 269; 13
Atl. 747
Municipal Freehold Land Co.
V. Pollington, 63 L. T. 238
976,
1082
1382
202
1182,
1189, 1265, 1288
cxliv
Munson v. Syracuse, etc.
R. R. Co., 103 N. Y. 58; 8
N. E. 355 280, 282, 290, 1297,
1298, 1298
Munster v. Cammell Co., 21
Ch. D. 183 1164, 1164, 1164,
1182, 1193, 1251
Munt V. Shrewsbury, etc. Ry.
Co., 13 Beav. 1 88
Murdoch v. Strange, 99 Md.
89; 57 Atl. 628 1032, 1206
Murdock v. Woodson, 2 Dill.
188 1484
Murphy v. Arkansas, etc. Imp.
Co., 97 Fed. 723 84
V. Pacific Bank, 130 Cal.
542; 62 Pac. 1059 687
V. Patapsco Ins. Co., 6
Md. 99 661
V. Penniman (Md.), 66
Atl. 282 1259, 1280, 1284, 1287
V. Wheatley, 102 Md.
501 ; 63 Atl. 62 219
, Ex parte, 7 Cow. (N. Y.)
153 1065
, Be, 51 Wise. 619; 8
N. W. 419 716
Murray v. Beal, 23 Utah 548;
65 Pac. 726 912
D. Bush, L. R. 6 H. L. 37 707,
1095, 1178, 1230, 1230, 1230,
1325
V. Dayo, 10 Hun (N. Y.)
3 1516
V. Farmville, etc. R. R. >
Co., 101 Va. 262; 43 S. E.
563 1510, 1523
V. Lardner, 2 Wall. 110 1434
V. Nelson Lumber Co.,
143 Mass. 250; 9 N. E.
634 1277
V. Stevens, 110 Mass. 95 761
Murray's Executors' Case, 6
De G. M. & G. 746 1310
Musgrave v. Morrison, 54 Md.
161 609, 613, 626
Muskingum Valley Turnpike
Co. V. Ward, 13 Oh. 120; 42
Am. Dec. 191 605, 619, 709
Mustard v. Union Nat. Bank,
86 Me. 177; 29 Atl. 977 541,
1122
Muth V. Dolfield, 43 Md. 466 398,
403, 406
Mutoscope and Biograph
Syndicates (1899), 1 Ch.
896 437
Mutter V. Eastern, etc. Ry.
Co., 38 Ch. D. 92 902, 903
TABLE OF CASES
[The references are to pages]
Mutual Accident, etc. Ass'n v.
Kayser (Pa.), 14 Wkly.
Notes Gas. 86 578
Mutual Aid, etc. Soc. v.
Monti, 59 N. J. Law 341;
36 Atl. 666 585
Mutual Bldg. Fund v. Bos-
seiux, 3 Fed. 817 1259, 1291
Mutual Fire Ins. Co. v. Far-
quhar, 86 Md. 668; 39 Atl.
527 557, 991, 1194
Mutual Life Ins. Co. v. Forty-
second St., etc. R. R. Co.,
74 Hun 505; 26 N. Y.
Supp. 545 740, 743
V. McCurdy, 103 N. Y.
Supp. 829 1227, 1287
V. McCurdy, 103 N. Y.
Supp. 840 1287
V. McSherry, 68 Md. 41;
II Atl. 577 593
V. Wilcox, 8 Hiss. 203 838,
844, 868
Mutual Mercantile Agency,
III Fed. 152 44
Mutual Savings, etc. Ass'n v.
Meriden Agency Co., 24
Conn. 159 77
M. V. Monarch Co. v.
Farmers', etc. Bank, 20 Ky.
• Law Rep. 1351; 49 S. W.
317 84
Myar ■». Foe (Ark.), 95 S. W.
1005 557, 1375
Myer v. Car Co., 102 U. S. 1 1536,
1539, 1540, 1612
N
Nabring v. Bank of Mobile, 58
Ala. 204 808, 811
Naglee v. Pac. Wharf Co., 20
Cal. 529 716, 716
Nankivell v. Benjamin, 18
Vict. L. R. 543 939, 976
Nanney v. Morgan, 37 Ch. D,
346 421, 677, 695, 800
Nantasket Beach, etc. Co. v.
Shea, 182 Mass. 147; 65
N. E. 57 847
Nant-y-Glo, etc. Iron Works
Co. V. Grave, 12 Ch. D. 738 273,
1261, 1289, 1338, 1338, 1339
Narragansett Bank v. Atlantic
Silk Co., 3 Mete. (Mass.) 282
Nashua Savings Bank v.
Anglo-American Co., 189
U.S. 221; 23 Sup. Ct. 517
J
230,
1380
601,
607
cxlv
Nashua Savings Bank v. Bur-
lington El. Light Co., 99
Fed. 14 1588
Nashville Bank v. Petway, 3
Humph. (Tenn.) 522 1185, 1185
Nassau Bank v. Jones, 95
N. Y. 115; 47 Am. Rep. 14 74,
76, 858, 859
Nassau Phosphate Co., 2 Ch.
D. 610 120, 223
Nassau Steam Press v. Tyler,
70 L. T. 376 369
Natal Investment Co., 3 Ch.
355 1421
Natal Land, etc. Co. v. Pauline
Colliery, etc. Syndicate
(1904), A. C. 120 282, 283, 284
Nathan v. Thompkins, 82 Ala.
437; 2 So. 747 935, 939, 940,
1167, 1183, 1250
V. Uhlmann, 101 N. Y.
App. Div. 388; 92 N. Y.
Supp. 13; 184 N. Y. 606 1355
Nation's Case, 3 Eq. 77 746, 766
National Bank v. Case, 99 TJ.
S. 628 74, 74, 618, 623, 812, 834
V. Graham, 100 U. S. 699 870
V. Johnson, 104 U. S. 271 869
V. Lake Shore, etc. Ry.
Co., 21 Oh. St. 221 747
V. Matthews, 98 U. S. 62 1 835
V. Watsontown Bank,
105 U. S. 217 698, 699, 701,
771, 772
V. Whitney, 103 U. S. 99 835,
867
National Bank of Augusta v.
Carolina, etc. R. R. Co, 63
Fed. 25 1568
National Bank of Brunswick
V. Sixth Nat. Bank, 212
Pa. St. 238; 61 Atl. 889 84
National Bank of Commerce
V. Allen, 90 Fed. 545; 33
C. C. A. 169 86, 1023, 1085
V. Shumway, 49 Kans.
224; 30 Pac. 411 1199, 1199
V. Wade, 84 Fed. 10 1259,
1266, 1267
National Bank of Jefferson v.
Texas Investment Co., 74
Tex. 421; 12 S. W. 101 47, 148,
1356
National Bank of New Lon-
don V. Lake Shore, etc. Ry.
Co., 21 Oh. St. 221 426
National Bank of Newport v.
H. P. Snyder Mfg. Co., 102
N. Y. Supp. 478 84
TABLE OF CASES
[The references are to pages]
National Bank of North
America v. Kirby, 108
Mass. 497 1436
National Bank of the Republic
V. Rochester Tumbler Co.,
172 Pa. St. 614; 33 Atl.
748 767, 773
V. Young, 4l N. J. Eq.
531 862
National Bank of Wales
(1899), 2 Ch. 629 769, 1101,
1262
National Bank of Xenia v.
Stewart, 107 U. S. 676; 2
Sup. Ct. 778 522, 835
National Bldg. Soc, 5 Ch. 309 830,
831, 832
National Boiler Ins. Co.
(1892), 1 Ch. 306 136, 137
National Bolivan Nav. Co. v.
Wilson, 5 A. C. 176 1555
National Commercial Bank v.
McDonnell, 92 Ala. 387; 9
So. 149 176
National Conduit Go. v. Con-
necticut Pipe Mfg. Co., 73
Fed. Rep. 491 300
National Debenture, etc. Corp.
(1891), 2 Ch. 505 223, 236, 241
National Docks Ry. Co. v.
Central R. R. Co., 32 N. J.
Eq. 755 245, 245, 250
National Dwellings Soc. v.
Sykes (1894), 3 Ch. 159 1055,
1056, 1056
National Endowment Co., 142
Pa. St. 450; 21 Atl. 879 222
National Exchange Bank v.
Hartford, etc. R. R. Co., 8
R. I. 375; 91 Am. Dec.
237; 5 Am. Rep. 582 1448,
1449, 1449, 1449, 1451
National Express, etc. Co. v.
Morris, 15 App. D. C. 262 921
National Financial Co., 3 Ch.
791 1244
National Fire Ins. Co. v.
Yeomans, 8 R. I. 25; 86
Am. Dec. 610 230
National Funds Ass. Co., 10
Ch. D. 118 1108, 1265, 1268,
1268, 1284, 1290
National Gross Loge v. Jung,
65 111. App. 313 588
National Hollow, etc. Co. v.
Chicago Ry., etc. Co., 226
111. 28; 80 N. E. 556 1073
National Home Bldg. Ass'n v.
Home Sav. Bank, 181 111.
cxlvi
35; 54 N. E. 619; 64 L. R.
A. 399; 72 Am. St. Rep.
245 851, 861
National Ins. Co. v. Egleson,
29 Grant (Can.) 406 159, 417,
604, 605, 606, 1231
National Ins., etc. Ass'n, 4 De
G. F. & J. 78 187
National Lead Co. v. Dickin-
son, 70 N. J. Law 596; 57
Atl. 138; affirmed 62 Atl.
1135 107, 137
National Literary Ass'n, 30
Pa. St. 150 96
National Loan, etc. Co. v.
Rockland Co., 94 Fed. 335;
36 C. C. A. 370 83, 1238, 1248,
1321
National Mechanical Direc-
tory Co., 121 Fed. 742; 58
C. C. A. 24 39
National Mutual Life Ass'n,
26 Vict. L. R. 490 136
National Park Bank v. Ger-
man-American, etc. Co.,
116 N. Y. 281; 22 N. E.
567; 5 L. R. A. 673 863
National Pemberton Bank v.
Porter, 125 Mass. 333; 28
Am. Rep. 235 844
National Salt Co. v. Ingram
ham, 143 Fed. 805; 74C.C.
A. 479 57, 1485
National State Bank v. Sand-
ford Fork, etc. Co., 157
Ind. 10; 60 N. E. 699 1211,
1381
V. Vigo County Nat.
Bank, 141 Ind. 352; 50
Am. St. Rep. 330; 40 N. E.
799 1370
National Trustees, etc. Co.,
21 Vict. L. R. 75 813
National Waterworks Co. v.
Kansas City, 78 Fed. 428 1486,
1488
National, etc. Trust Co. v.
Gray, 12 D. C. App. Cas.
276 683, 723
Native Iron Co., 2 Ch. D.
345 1396
Natoma Water, etc. Co. v.
Clarkin, 14 Cal. 544 847
Navajo, etc. Co. v. Cuny, 147
Cal. 581; 82 Pac. 247; 109
Am. St. Rep. 176 1006
Neafle's Appeal (Pa. Sup^
a.), 12 Atl. 271 1648, 1650
Neale v. Turton, 4 Bing. 149 1377
TABLE OF CASES
[The references are to pages]
Neall V. Hill, 16 Cal. 145; 76
'Am. Dec. 508 935, 958, 1179
Neath Bldg. Soc. v. Luce, 43
Ch. D. 158 831, 832, 832, 832
Nebraska Chicory Co. v. Led-
nicky (Nebr.), 113 N. W.
245 174, 210, 212
Nebraska Nat. Bank v. Fer-
guson, 49 Nebr., 109; 68
N.W.370; 59 Am. St. Rep.
522 253
Nebraska Shirt Co. v. Horton,
3 Nebr. (Unofficial) 888;
93 N. W. 225 77, 858
Neff V. Wolf River Boom Co.,
50 Wise. 585; 7 N.W. 553 1632
Negley v. Hagerstown Mfg.
Co., 86 Md. 692; 39 Atl.
506 182
Neiler v. Kelley, 69 Pa. St.
403 809
Neilson v. James, 9 Q. B. D.
546 780
Nelson v. Anglo-American
Land Co. (1897), 1 Ch. 130 903
V. Bank of Fergus
County, 157 Fed. 161 1359
V. Gibson, 92 III. App.
595 584
V. Hubbard, 96 Ala. 238;
11 So. 428; 17L. R. A. 375 488,
1005, 1007, 1399, 1402,
1403, 1486, 1581, 1581,
1600, 1671
V. Keith-O'Brien Co.,
(Utah), 91 Pao. 30 111, 131
V. Owen, 113 Ala. 372;
21 So. 75 723, 811
V. Spence (Ga.), 58 S. E.
697 407, 408
V. U. S., 201 U. S. 92; 26
Sup. Ct. 358 890
Nelson Coke Co. v. Pellatt, 4
Ont. L. R. 481 169, 439
Nelson, Edward & Co. v.
Faber & Co. (1903), 2
K. B. 367 1545, 1548
Nemaha Coal Co. v. Settle,
54 Kans. 424; 38 Pac. 483 213
Nesbit V. North Georgia Elec-
tric Co., 156 Fed. 979 1371
Nesmith v. Washington Bank, '
6 Pick. (Mass.) 324 769, 774
Nesne v. Sundet, 93 Minn.
299; 101 N. W. 490 373
Nether Providence Ass'n, 12
Pa. Co. Ct. 666 368
Nettles V. McConnell (Ala.),
43 So. 838 899
cxlvii
Nettles V. Marco, 33 S. Car. 47;
11 S. E. 595 4^4
Neubert v. Armstrong Water
Co., 211 Pa. St. 582; 61
Atl. 123 894, 905
New Albany v. Burke, 11
Wall. 96 525, 625
New Albany, etc. Co. v.
Smith, 23 Ind. 353 ' 1423
New Albany, etc. R. R. Co. v.
Fields, 10 Ind. 187 194
V. McCormick, 10 Ind.
499; 71 Am. Dec. 337 166, 188
New Albany Waterworks v.
Louisville Banking Co.,
122 Fed. 776 957, 970, 972
New Balkis Eerstelling v.
Randt Gold Mining Co.
(1904), A. C. 165 668, 668
New Boston Fire Ins. Co. v.
Upton, 67 N. H. 469; 36
Atl. 366 1196
New Brighton, etc. R. R. Co.
V. Pittsburgh, etc. R. R.
Co., 105 Pa. St. 13 305
New Brunswick, etc. Co. v.
Muggeridge, 1 Dr. & Sm.
363 184
New Brunswick, etc. Ry. Co.
V. Muggeridge, 4 H. & N.
580 174, 615
New Castle, etc. Ry. Co. v.
Simpson, 21 Fed. 533 840, 842,
1402, 1402
New Chile Gold Mining Co.,
38 Ch. D. 475 537
, 45 Ch. D. 598 666, 666
, 68 L. T. 15 647
New Clydach Sheet & Bar
Iron Co., 6 Eq. 514 1507,
1619
New Eberhardt Co. i>. Men-
zies, 43 Ch. D. 118 632, 640
New England Fire Ins. Co. v.
Haynes, 71 Vt. 306; 45
Atl. 221; 76 Am. St. Rep.
771 614
New England Fire, etc. Ins.
Co. V. Robinson, 25 Ind.
536 394
New England Marine Ins.
Co. V. DeWolf, 8 Pick.
(Mass.) 56 1378
New England, etc. Ins. Co. v.
Phillips, 141 Mass. 535; 6
N. E. 534 1250
New England Iron Co. v.
New York Loan, etc. Co.,
55 How. Pr. (N. Y.) 315 890
TABLE OF CASES
[The references are to pages]
New England R. Co. v. Car-
negie Steel Co., 75 Fed. 54;
21 C. C. A. 219 1517, 1560,
1564, 1570
New England Trust Co. v.
Abbott, 162 Mass. 148; 38
N. E. 432; 27 L. R. A. 271 517,
573
V. Eaton, 140 Mass. 532;
4 N. E. 69; 54 Am. Rep.
493 1446, 1446, 1446
New Hampshire Central R.
R. V. Johnson, 30 N. H.
390; 64 Am. Dec. 300 601,607,
609
New Hampshire Sav. Bank
V. Richey, 121 Fed. 956;
58 C. C. A. 294 1128
New Haven Trust Co. v.
Doherty, 74 Conn. 353; 50
Atl. 887 1368
V. Gaffney, 73 Conn. 480;
47 Atl. 760 627
V. Nelson, 73 Conn. 477;
47. Atl. 753 528
New Jersey Midland Ry.
Co. V. Strait, 35 N. J. Law
322 1415
New Lambton Land, etc. Co.
V. London Bank, 1 Comm.
L. R. (Australia) 524 765, 765,
765, 766
New London Bank v. Brockle-
bank, 21 Ch. D. 302 774, 796
New Mashonaland Co. (1892),
3 Ch. 577 1261, 1263, 1274
New Memphis Gas Light Co.
Cases, 105 Tenn. 268; 60
S. W. 206; 80 Am. St. Rep.
880 1304, 1317, 1324, 1344
New Orleans Bldg. Co. v.
Lawson, 11 La. 34 1210, 1371
New Orleans Debenture, etc.
Co. V. Louisiana, 180 U. S.
320; 21 Sup. Ct. 378 46, 59,
241, 258, 258
New Orleans , Nat. Banking
Ass'n V. Wiltz, 10 Fed. 330 114,
571
New Orleans Pac. Ry. Co. v.
Parker, 143 U. S. 42; 12
Sup. a. 364 1510, 1529, 1589,
1590, 1592
New Orleans, etc. Co. v.
Brown, 36 La. Ann. 138;
51 Am. Rep. 5 1246
New Orleans, etc. R. R. Co. v.
Frank, 39 La. Ann. 707;
2 So. 310
101
cxlviii
New Orleans, etc. S. S. Co. v.
Ocean Dry Dock Co., 28
La. Ann. 173; 26 Am. Rep.
90 42, 76, 77
New Transvaal Co. (1896), 2
Ch. 750 437
New York Automobile Co. v.
Franklin, 49 N. Y. Misc. 8;
97 N. Y. Supp. 781 1263, 1341
New York Cable Co. v. New
York, 104 N. Y. 1; 10
N. E. 332 249
New York Cable Ry. Co., 109
N. Y. 32; 15 N. E. 882 131
New York Car Oil Co. v.
Richmond, 6 Bosw. 213 229
New York Car Wheel Works,
141 Fed. 430 876
New York Central Ins. Co. v.
Nat. Protection Ins. Co., 14
N. Y. 85 1296
New York Commercial Co. v.
Francis, 83 Fed. 769; 28
C. C. A. 199 715, 717
New York Economical Print-
ing Co., 110 Fed. 514; 49
C. C. A. 133 1221, 1397
New York Electrical Workers'
Union v. Sullivan, 107 N. Y.
Supp. 886 998, 1011
New York Firemen Ins. Co.
V. Eley (1825), 5 Conn.
560; 13 Am. Dec. 100 827
V. Eley (1824), 2 Cow.
678 826
New York Grape Sugar Co. v.
Buffalo Grape Sugar Co.,
24 Fed. 604 1263
New York Guaranty, etc. Co.
V. Tacoma Ry. Co., 83 Fed.
365; 27 C. C. A. 550 1563, 1572
New York, Lackawanna, etc.
Ry. Co., 99 N. Y. 12; 1
N. E. 27 122, 229
New York, Lake Erie, etc.
Ry. Co. V. Haling, 47 N. J.
Law 137; 54 Am. Rep.
123 870
New York Life, etc. Co. v.
Kane, 17 N. Y. App. Div.
542; 45 N. Y. Supp. 543 1446,
1446
New York Security, etc. Co.
V. Louisville, etc. R. Co.,
102 Fed. 382 1509, 1641, 1669
V. Saratoga Gas Co., 88
Hun 569; 34 N. Y. Supp.
890; 157 N. Y. 689; 51
N. E. 1092 1505, 1553
TABLE OF CASES
[The references are to pages]
New York Security, etc. Co.
V. Saratoga Gas, etc. Co.,
159 N.Y. 137; 45 L. R. A.
132; 53N.E. 758 1518, 1519
New York, etc. Bank v. Crow-
ell, 177 Pa. St. 313; 35
Atl. 613 252
New York, etc. Canal Co. v.
Fulton Bank, 7 Wend.
(N. Y.) 412 79, 80
New York, etc. Ice Lines, Be,
147 Fed. 214; 77 C, V. A.
440 44
New York, etc. R. R. Co. v.
Davies, 38 Hun (N. Y.) 477 807
V. Dixon, 114 N. Y. 80;
21 N. E. 110 1310, 1378
V. Ketchum, 27 Conn.
170 294
V. New York, etc. R. R.
Co., 58 Fed. 268 1568, 1611,
1611, 1612
V. Nickals, 119 U. S.
296; 7 Sup. Ct. 209 464, 465,
1100, 1101
V. O'Brien, 106 N. Y.
Supp. 909 95
V. Offield, 78 Conn. 1 ; 60
Atl. 740 917
V. Schuyler, 34 N. Y. 30 681,
711, 714, 731, 739, 1324
V. State, 50 N. J. Law
303; 13 Atl. 1 1633
New York, etc. Trust Co. v.
Capital Ry. Co., 77 Fed.
529
V. Helmer, 77 N. Y. 64
1537
845,
865
V. Louisville, etc. R. R.
Co., 79 Fed. 386 1567, 1568
New York, etc. Water Co., 98
Fed. 711 22, 44
New Zealand Gold, etc. Co.
V. Peacock (1894), 1 Q. B.
622 58, 605
New Zealand Midland Ry.
, Co. (1901), 2 Ch. 357 1591
New Zealand Trust & Loan
Co. (1903), 1 Ch. 403 414
Newberry v. Detrcit, etc. Iron
Co., 17 Mich. 141 715, 752, 781
Newbiggin-by-the-Sea Gas
Co. V. Armstrong, 13 Ch.
D. 310 933
Newbold v. Peoria, etc. R. R.
Co., 5 111. App. 367 1455, 1651
Newby v. Oregon Central
R. R. Co., 1 Sawy. 63 373, 961,
1554
Newby v. Oregon Central Ry.
Co., Deady 609 373, 961
Newcastle, etc. Co. v. Bell,
8 Blackf. (Ind.) 584 160, 1250
Newcomb v. Reed, 12 Allen
(Mass.) 362 219, 1227
V. Re, 42 N. Y. St. Rep.
442; 18 N. Y. Supp. 16 1225
Newell V. Smith, 49 Vt. 255 1616,
1618
V. Williston, 138 Mass.
240 690, 691, 698, 699
Newgass v. Atlantic, etc. Ry.
Co., 56 Fed. 676 1540, 1542
V. Atlantic, etc. Ry. Co.,
72 Fed. 712 1574
Newhaven Local Board v.
Newhaven School Board,
30 Ch. D. 350 1164
Newland Hotel Co. v. Lowe
Furniture Co., 73 Mo. App.
135 76
Newlands v. National Em-
ployers, etc. Ass'n, 54 L. J.
Q. B. 428 186, 1377
Newman & Co., George
(1895), 1 Ch. 674 83, 1069,
1283, 1321
Newport News Shipbuilding,
etc. Co. V. Jones (Va.), 54
S. E. 314 ' 62
Newport, etc. Bridge Co. v.
Douglas, 12 Bush. (Ky.)
673 1455, 1469
Newry, etc. Ry. Co. v.
Coombe, 3 Ex. 565 173, 173,
601
Newton v. Anglo-Australian,
etc., Co. (1895), A. C. 244 66
V. Belcher, 12 Q. B. 921 309
V. Birmingham Small
Arms Co. (1906), 2 Ch. 378 909,
909
V. Fay, 10 Allen (Mass.)
505 811, 812
V. Liddiard, 12 Q. B.
925 309
V. Wooley, 105 Fed.
541 786
Newton Mfg. Co. v. White, 42
Ga. 148 873, 874
Newton Nat. Bank v. New-
begin, 74 Fed. 135; 20
C. C. A. 339; 33 L. R. A.
727 177, ISO, 180
Neyens v. Worthington
(Mich.), 114 N. W. 404 865
Niagara Shoe Co. v. Tobey,
71 111. App. 250 534
cxlix
TABLE OF CASES
[The references are to pages]
Nichols V. Burlington, etc.
Co., 4 G. Greene (Iowa) 42 160,
608
V. Mass, 94 N. Y. 160 1496,
1503
Nicholson v. Nicholson, 30
L. J. Ch. 617 1141
V. Rhodesia Trading Co.
(1897), 1 Ch. 434 1115
Nicholson- Watson, etc. Co. v.
Urquhart, 32 Tex. Gv.
App. 527; 75 S. W. 45 666
Nicholstone City Co. v. Smal-
ley, 21 Tex. Civ. App. 210;
51 S. W. 527 1068
Nickalls V. Merry, L. R. 7
H. L. 530 779, 782
Nickals v. New York, etc. Ry.
Co., 15 Fed. 575 466
Nickerson v. Atchison, etc. R.
Co., 17 Fed. 408 1549
V. English, 142 Mass.
267; 8N. E. 45 632
Nickum v. Burckhardt, 30
Oreg. 464; 47 Pao. 788;
48 Pac. 474; 60 Am. St.
Rep. 822 156, 161, 215, 234
Niool's Case, 3 De G. & J.
387 521, 706, 764
NicoU V. aark, 13 N. Y. Misc.
128; 34 N. Y. Supp. 159 230
V. New York, etc. R. R.
Co., 12 N. Y. 121 107
Nicollet Nat. Bank v. City
Bank, 38 Minn. 85; 35
N. W. 577; 8 Am. St.
Rep. 643 572, 716, 752
V. Frisk-Turner Co., 71
Minn. 413; 74 N. W. 160;
70 Am. St. Rep. 334 22, 43
NicoUs V. Reid, 109 Cal. 630;
42 Pac. 298 712, 781
Niemeyer v. Little Rock Junc-
tion Ry. Co., 43 Ark. Ill 121,
240, 245
Nightingal v. Devisme, 5
Burr. 2589 421
Niles V. Edwards, 90 Cal. 10;
27 Pao. 159 810
V. New York, etc. R. R.
Co., 176 N. Y. 119; 68 N.
_E. 142 928, 947, 1350
Niles Tool Works v. Louis-
ville, etc. Ry. Co., 112 Fed.
561; 50C. C. A. 390 1567
Nimmo v. Jackson, 21 111. App.
607 1211
Ninneman v. Pox (Wash.), 86
Pac. 213 928, 929
cl
Nippenose Mfg. Co. v. Stadon,
68 Pa. St. 256
Nisbit V. Macon Bank, etc. Co.,
12 Fed. 686 804, 805
Niven v. Spickerman, 12
Johns. (N. Y.) 401
Nixon V. Brownlow, 3 H. & N.
686
V. Clear Creek LvimberCo.
(Ala.), 43 So. 805
V. Goodwin (Cal.), 85
Pac. 169 • 917, 925, 1262
Nixon's Navigation Co., Be
(1897), 1 Ch. 872
N. Mitchell v. City of Glascow
Bank, 4 A. C. 624
Noah V. German-American
Bldg. Ass'n, 31 Ind. App.
504; 68 N. E. 615
Noakes v. Noakes & Co.
(1907), 1 Ch. 64 1557, 1558
Noble V. Euler, 20 N. Y. App.
Div. 548; 47 N. Y. Supp.
302
V. Garden, 146 Cal. 225;
79 Pac. 883
V. Learned (Cal.), 87
Pac. 402
V. Turner, 69 Md. 519;
16 Atl. 124 694, 716
Nockells V. Crosby, 3 B. & C.
814
Noel V. Drake, 28 Kans. 265;
42 Am. Rep. 162
NoUer v. Wnght, 138 Mich.
416; 101 N. W. 553
Norbury's Case, 3 De G. &
Sm. 423
Norfolk, etc. R. R. Co. v.
Pendleton, 86 Va. 1004; 11
S. E. 1062
Norman v. Loomis-Manning
Filter Co., 108 N. Y. Supp.
261
V. Mitchell, 5 De G. M. &
G. 648
Normandy v. Ind, Coope & Co.
(1908), 1 Ch. 84 937, 946, 953.
954, 1003, 1004, 1161, 1243r,
1319, 1321, 1364
Norris V. Cottle, 2 H. L. C.
647
North V. Forest, 15 Conn. 400
North & South Rolling Stock
Co. V. People, 147 111. 234;
35 N. E. 608; 24 L. R. A.
462
North American, etc. Trust
Co. V. Colonial, etc. Mort-
625
8
214
393
542
746
853
1182
713
713
341
1347
1018
337
1633
1373
1175
276
422
1167
TABLE OF CASES
[The references are to pages]
297
1235
1517
87
1246
1002
gage Co., 83 Fed. 796; 28
C. C. A. 88
North British Ins. Co. v.
Hallet, 7 Jur. n. s. 1263
North Carolina R. R. Co. v.
Drew, 3 Woods 691
V. Moore, 7 N. Car. 6
North Charterland Explora-
tion Co. V. Riordan, 13
Times L. R. 80, 281 350, 351
North Eastern Ry. Co. v.
Jackson, 19 W. R. 198
North of England S. S. Co.
(1905), 2 Ch. 15 ,
North Hudson Bldg., etc.
Ass'n V. Childs, 82 Wise.
460; 52N.W.600; 33 Am.
St. Rep. 57 1228, 1259, 1286,
1369
North Milwaukee Town Site
Co. V. Bishop, 103 Wise.
492; 79 N. W. 785; 45
L. R. A. 174 556, 558, 558, 560
603, 605
North Missouri R. R. Co. v.
Miller, 31 Mo. 19 193
North Pa. R. R. Co. v. Adams,
54 Pa. St. 94; 93 Am. Dec.
677 1459, 1460
North River Ins. Co. v.
Lawrence (1830), 3 Wend.
(N. Y.) 482
North River Meadow v.
Shrewsbury Church, 22 N.
J. Law 424; 53 Am. Dec.
258 613, 914
North Shore, etc. Ferry Co.,
63 Barb. 556 1020, 1024
North Stafford Steel, etc. Co.
V. Ward, L. R. 3 Ex. 172 608,
609
North Sydney Investment,
etc. Co. V. Higgins (1899),
A. C. 263 285, 642
North West Argentine Ry.
Co. (1900), 2 Ch. 882 469
North-West Electric Co. v.
Walsh, 29 Can. Sup. a. 33 579,
627, 629
North Western Ry. Co. v.
M'Michael, 5 Ex. 114 173, 173,
174
Northage, Be (1891), 60 L. J.
Ch. 488 1140
Northampton Bank v. Pepoon ,
11 Mass. 288 1186, 1213
Northern Ala. Ry. Co. v.
Hopkins, 87 Fed. 505; 31
C. C. A. 94 1642
827
Northern Assam Tea Co., 10
Eqr. 458
Nortnem Central Mich. R. R.
Co. V. Eslow, 40 Mich. 222
Northern Central Ry. Co. v.
Keighler, 29 Md. 572
1421
169
1492,
1600
1364
1544
V. Rider, 45 Md. 24
V. State, 17 Md. 8
V. Walworth, 193 Pa. St,
207; 44 Atl. 253; 74 Am.
St. Rep. 683 786
Northern Electric Wire, etc.
Co., 2 Megone 288 172
Northern Nav. Co. v. Long, 11
Ont. L. R. 230 1126, 1126
Northern Pacific Ry. Co. v.
Am. Trading Co., 195 U.
S. 439; 25 Sup. a. 84 1618,
1644
V. Heflin, 83 Fed. 93; 27
C. C. A. 460 1613
Northern Pac. R. Co. v.
Lamont, 69 Fed. 23; 16
C. C. A. 364 1566, 1570, 1572
Northern Securities Co. v.
U. S., 193 U. S. 197; 24
Sup. Ct. 436 57, 264
Nortnem Trust Co. v. Snyder,
113 Wise. 516; 89 N. W.
460; 90 Am. St. Rep. 867 949,
951
Northrop V. Bushnell, 38
Conn. 498 177, 525, 528
V. Curtis, 5 Conn. 246
699,
700
V. Newtown, etc. Turn-
pike Co. , 3 Conn. 544 699
Northside Ry. Co. v. Worth-
ington, 88 Tex. 562; 30
S. W. 1055; 53 Am. St.
Rep. 778 1403
Northumberland Ave. Hotel
Co., Re, 33 Ch. D. 16 285, 286,
1314
Northumberland & Durham
Dist. Banking Co., 2 De G.
& J. 357 224
Northwestern, etc. Ass'n v.
Schauss, 148 111. 304; 35
N. E. 747 660
V. Wanner, 24 111. App.
358 584
Northwestern Land Ass'n v.
Grady, 137 Ala. 219; 33
So. 874 1259
Northwestern Life Ins. Co. v.
Erlenkoetter, 90 111. App. 99
582, 592
eli
TABLE OF CASES
[The references are to pages]
Northwestern Mut. Life Ins.
Co. V. Cotton Exoh., etc.
Co., 46 Fed. 22 628, 635
V. Cotton Exch., etc. Co.,
70 Fed. 155 628
Northwestern Packing Co. v.
Whitney (Cal.), 89 Pac.
981 592
Northwestern Transportation
Co. V. Beatty, 12 A. C. 589 1080,
1297, 1311, 1312
Northwestern Union Packet
Co. V. Shaw, 37 Wise. 655;
19 Am. Rep. 781 849, 855, 858
Northwood Union Shoe Co. v.
Pray, 67 N.H. 435; 32Atl.
770 625
Norton V. Alabama Nat.
Bank, 102 Ala. 420; 14 So.
872 1372
V. Derby Nat. Bank,
61N. H. 589; 60 Am. Rep.
334 851, 855
V. State, 74 Ind. 337 230, 383
V. Yates (1906), 1 K. B.
112 1546
Norwich, etc. Navigation v.
Theobald, 1 Moody & M.
151 608
Norwich Pharmacal Co. v.
Abaly (Wise), 113 N. W.
963 393
Norwich Yam Co., 22 Beav.
143 394, 395
Nourse v. Prime, 4 Johns. Ch.
(N. Y.) 490; 8 Am. Dec.
606; 7 Johns. Ch. 69; 11
Am. Dec. 403
Noyes v. Marsh, 123 Mass. 286
B.Rich, 52 Me. 115
1;. Spaulding, 27 Vt. 420
Noyes Bros., 136 Fed. 977
418
786
1029
1515
781
698,
810
Nugent V. Supervisors, 19
Wall. 241 162, 173
Nute V. Hamilton Mut. Fire
Ins. Co., 6 Gray (Mass.)
174 577, 594
Nutter V. Lexington, 'etc.
R. R. Co., 6 Gray (Mass.)
85 490
Nye V. Storer, 168 Mass. 53;
46 N. E. 402 1309, 1312
O
Oak Grove, etc. Cattle Co. v.
Foster, 7 New Mex. 650; 41
Pac. 522 1379
Oakbank Oil Co. v. Crum, 8
A. C. 65 433
Oakes v. Cattaraugus Water
Co., 143 N. Y. 430; 38
N. E. 461 ; 26 L. R. A. 544 290,
1381
V. Oakes, 9 Hare 666 414
V. Turquand, L. R. 2
H. L. 325 178, 184, 186, 223
Oakford v. Fischer, 75 111.
App. 544 912
Oakland Bank v. Wilcox, 60
Cal. 126 1264
Oakland, etc. Bank v. State
Bank, 113 Mich. 284; 71
N. W.453; 67 Am. St. Rep.
463 772
Oakley v. Working Men's
Union Benev. Soc, 2 Hilton
(N. Y.) 487 _ 1382
Oban & Aultmore-Glenlivet
Distilleries, 5 Eraser (Sc.)
1140 111, 547
O'Beime v. Allegheny, etc.
R. R. Co., 151 N. Y. 372;
45 N. E. 873 1587
O'Brien v. Blaut, 17 N. Y.
App. Div. 288; 45 N. Y.
Supp. 217 1285
V. Champlain Construc-
tion Co., 107 Fed. 338 1354
V. Cummings, 13 Mo.
App. 197 111, 114, 571
V. Fulkerson, 75 Mich.
554; 42 N. W. 979 204
Occidental Bldg. etc., Ass'n v.
Sullivan, 62 Cal. 394 590
O'Connor v. International
Silver Co. (N. J.), 59 Atl.
321; 62 Atl. 408 878,936,962,
1027
V. Virginia Pass., etc. Co.,
184 N. Y. 46; 76 N. E.
1082 942, 942, 944, 978
V. Virginia Pass, etc. Co.,
46 N. Y. Misc. 530; 92
N. Y. Supp. 525 971
O'Connor, etc. Mfg. Co. v.
Coosa Furnace Co., 95 Ala.
614; 10 So. 290; 36 Am.
St. Rep. 251 1306, 1315
Odessa Tramways v. Mendel,
8 Ch. D. 235 199, 602, 606, 632
Odessa Waterworks Co.
(1901), 2 Ch. 190 n 471
Odessa Waterworks Co.,
W. N. (1897) 166 469
O'Donnell v. Johns, 76 Tex.
362 387
clii
TABLE OF CASES
[The references are to pages]
O'Duffy V. Jaffe (1904), 2 Ir.
27 267
O'Dwyeri). Verdon, 115 N. Y.
App. Div. 37 757, 757
Oelbermann v. New York, etc.
Ry. Co., 77 Hun (N. Y.)
332; 29 N. Y. Supp.,545 76,
1026, 1063
Off V. Jack, 204 lU. 79; 68
N. E. 427 1323, 1323
Ogdensburgh, etc. R. R. Co.
V. Frost, 21 Barb. 541 121, 601
Ogilvie V. Knox Ins. Co., 22
How. 380 177, 180, 181
Ogle V. Knipe, 8 Eq. 434 424, 424
Oglesby v. Attrill, 105 U. S.
605 981
O'Herron v. Gray, 168 Mass.
573; 47N. E. 429; 60 Am.
St. Rep. 411; 40 L. R. A.
498 683, 726
Ohio V. Frank, 103 U. S. 697 1441
Ohio Central R. R. Co. v.
Central Trust Co., 133 U. S.
83; 10 Sup. Ct. 235 1453, 1465,
1522, 1623
Ohio Coal Co. v. Whitcomb,
123 Fed. 359 1620, 1629
Ohio College v. Rosenthal, 45
Oh. St. 183; 12 N. E. 665 450,
451
Ohio Ins. Co. v. Nunemacher,
15Ind. 294; 10 Ind. 234 499,
500
Ohio Valley Nat. Bank v.
Hulitt, 204 U. S. 162 617, 621
V. Walton Architectural
Iron Co., 30 Wkly. Law
Bull. (Oh.) 382 1034, 1203,
1217
Ohio, etc. R. R. Co. v.
McPherson, 35 Mo. 13; 86
Am. Dec. 128 1009, 1208, 1224,
1227
Ohio, etc. Ry. Co. v. Russell,
115 111. 52; 3N. E. 561 1609
Oil City Land, etc. Co. v.
Porter, 99 Ky. 254; 35
S. W. 643 186
Oil Creek, etc. R. R. Co. v.
Pa. Transportation Co., 83
Pa. St. 160 852, 854
Olathe Silver Mining Co., 27
Ch. D. 278 1529
Old Bushmills Distillery
(1897), 1 Ir. R. 489 1547
Old Colony Trust Co. v. City
of Wichita, 123 Fed. 762 248,
833, 1484
969
331
Old Colony Trust Co. v. Du-
buque, etc. Traction Co.,
89 Fed. 794
V. Standard Beet Sugar
Co., 150 Fed. 677 1504, 1520,
1550
Old Dominion Copper Co. v.
Lewisohn, 136 Fed. 915;
affirmed 148 Fed. 1020
Old Dominion Copper Min-
ing, etc. Co. V. Bigelow, 188
Mass. 315; 74 N. E. 653;
108 Am. St. Rep. 479 312, 314,
315,327,331,334,335
Oldham Corporation v. Bank
of England (1904), 2 Ch.
716
Oldknow V. Wainwright, 1
Wm. Bl. 289; 2 Burr. 1017
Oldtown, etc. R. R. Co. v.
Veazie, 39 Me. 571 609, 610
Oler V. Baltimore, etc. R. R.
Co., 41 Md. 583 154, 195, 198,
221
Oliphant v. Bank of Commerce
60 Ark. 198; 29 S. W. 460
Oliver v. Oliver, 118 Ga. 362;
45 S. E. 232
V. Rah way Ice Co., 64
N. J. Eq. 596; 54Atl. 460
794
1206
770
1352
1316,
1316
Oliver's Estate, 136 Pa. St.
43; 20 Atl. 527; 20 Am.
St. Rep. 894; 9 L. R. A.
421 1092, 1148
Olmstead v. Vance, etc. Co.,
196111.236; 63 N. E. 634 191,
192, 518, 526
Olney v. Chadsey, 7 R. I. 224 914,
920, 1246, 1248, 1372
Olsen V. Homestead Land Co.,
87 Tex. 368; 28 S. W. 944 542,
1091, 1119
Olson V. State Bank, 67 Minn.
267; 69N. W.904 492
Olympia, Ltd. (1898) 2 Ch.
153 324, 324, 328
Olympia Mining Co. v. Kerns
(Idaho), 91 Pac. 92 214
Olyphant v. St. Louis, etc. Co.,
23 Fed. 465 1629
V. St. Louis, etc. Co., 28
Fed. 729 1611
Omaha Law Library Ass'n v.
Connell, 55 Nebr. 396; 75
N. W. 837 650, 651
Omaha Water Co. v. City of
Omaha, 147 Fed. 1; 77
C. C. A. 267 1521
cliii
TABLE OF CASES
[The references are to pages]
O'Mara v. Newoomb (Colo.),
88 Pac. 167 723, 808
Omnium Investment Co., Re,
(1895), 2 Ch. 127 537
O'Neal V. F. A. Neider Co., 25
Ky. Law Rep. 2279; 80
S. W. 451 1183, 1183
Oneida Bank v. Ontario
Bank, 21 N. Y. 490 866
O'Neile v. Temes, 32 Wash.
528; 73 Pac. 692 1351
O'Neill V. Webb, 78 Mo. App.
1 786
, Be, 47 N. Y. Misc. 495;
95 N. Y. Supp. 964 894
Onslow's Case, 3 Times L. R.
551 1171
Ontario Ladies College v.
Kendiy, 10 Ont. L. R. 324 166
Ontario Salt Co. v. Merchants
Salt Co., 18 Grant Ch.
(Up. Can.) 540 80
Ooregum Gold Mining Co. v.
Roper (1892), A. C. 125 627,
627, 639
Opdyke v. Marble, 44 Barb.
(N. Y.) 64 890
Opera, Ltd. (1891), 3 Ch. 260 1546
Ophir Consol. Mines Co. v.
Brynteson, 143 Fed. 829;
74 C. C. A. 625 526
Opinion of Atty.-Gen., 18 Pa.
Co. Ct. 492 120
Oppenheimer v. Boatman
(1907), 1 Ch. 399 1157
Order of Chosen Friends v.
Austerlitz, 75 111. App. 75 662
Oregon Ry. Co. v. Oregonian
Ry.Co., 130U.S. 1; 9 Sup.
a. 409 36, 52, 836
Oregon Trust & Savings
Bank, 156 Fed. 319 20
Oregon, etc. Nav. Co. v.
Balfour, 90 Fed. 295; 33
C. C. A. 57 300
Oreffon & Transcontinental
Co. V. Hilmers, 20 Fed. 717 808
O'Reiley v. Kankakee Valley •
Draining Co., 32 Ind. 169 94
Oriental, etc. Steam Co. v.
Briggs, 4 De G. F. & J. 191 165
Ormerod's Case, 25 W. R. 765 1337
(1894), 2 Ch. 474 363
, 5 Eq. 110 200
Ormsby v. Vermont Copper
Mining Co., 56 N. Y. 623 665,
1008, 1208
Ornamental Pyrographic Co.
V. Brown, 2 H. & C. 63 608
232
Oroville, etc. R. R. Co. v.
Palmas County, 37 Cal. 354
Orr V. South Amboy Terra
Cotta Co., 113 N. Y. App.
Div. 103 1302, 1328
Orrick School Dist. v. Dorton,
125 Mo. 439; 28 S. W.
765 249
Ortigosa v. Brown, 38 L. T.
145 686, 707, 707, 718, 762
Osbom V. Gilliams, 33 N. Y.
Misc. 312; 68 N. Y. Supp.
470
Osborne v. Tunis, 25 N. J.
Law 633
Osborne Park Land & Invest-
ment Co., 18 Vict. L. R. 515
Oscar Bonner Oil Co. v.
Pennsylvania Oil Co.
(Cal.), 89 Pac. 613
Osceola Tribe v. Schmidt, 57
Md. 98
Osgood V. King, 42 Iowa 478
Ossipee, etc. Mfg. Co. v.
Canney, 54 N. H. 295 109, 117,
652, 868, 1408, 1409
Otis V. Cullum, 92 U. S. 447 1440
V. Gardner, 105 111. 436 723
Ottawa Dairy Co. v. Sorley,
34 Can. Sup. Ct. 508
Ottawa Union Bldg. Soc. v.
Scott, 24 Up. Can. Q. B. 341
1262
398
215
1377
577
528
211
Ottawa, etc. R. R. Co. v.
Black, 79 lU. 262
Otter V. Brevoort Petroleum
Co., 50 Barb. (N. Y.) 247
583,
590
163
163,
649
cliv
Otter View Land Co.'s Re-
ceiver V. Bowling's Extx.,
24 Ky. Law Rep. 1157; 70
S. W. 834 614
Otto Electrical Mfg. Co.
(1906), 2 Ch. 390 293
Ottoman Cahvey Co. v. Dane,
95 111. 203 379
Ottos Kopje Diamond Mines
(1893), 1 Ch. 618 730, 731, 747,
749, 752
Ottumwa Screen Co. v. Stodg-
hill, 103 Iowa 437; 72
N. W. 669 716
Oudin, etc. Mfg. Co. v.
Conlan, 34 Wash. 216; 75
Pac. 798 1167
Overend & Gumey Co. v. Gibb,
L. R. 5 H. L. 480 1273, 1274
Overton v. Memphis, etc. R.R.
Co., 10 Fed. 866 957
TABLE OF CASES
[The references are to pages]
Ovid Elevator Co. v. Secretary
of State, 90 Mich. 466; 51
N. W. 536 134
Owen V. Shepard, 59 Fed. 746;
8 C. C. A. 244 231, 231, 251
Owen & Ashworth's Claim
(1901), 1 Ch. 115 1205, 1222,
1259 1343
Owen & Co. v. Cronk (1895), '
1 Q. B. 265 1580
Owens V. Atlanta Trust, etc.
Co.,122Ga.521;50S.E.379 770
Oxford Bldg. Society, 35 Ch.
D. 502 1109, 1110, 1241, 1284,
1333
Oxford Turnpike Co. v. Bun-
nell, 6 Conn. 552 716
Pabst V. Goodrich (Wise),
113 N. W. 398 522, 1145
Pacific Bank v. Stone, 121
Cal. 202; 53 Pac. 634 1372
Pacific Fruit Co. v. Coon, 107
Cal. 447; 40 Pac. 542 524
Pacific Mill Co. v. Inman,
Poulsen & Co. (Oreg.), 90
Pac. 1099 491, 493
Pacific Nat. Bank v. Eaton,
141 U. S. 227; 11 Sup. Ct.
984 154, 490
Pacific Northwest Packing Co.
V. Allen, 116 Fed. 312; 54
C. C. A. 648 1627, 1630
Pacific R. R. Co. v. Ketchum,
101 U. S. 289 1636
V. Missouri Pac. Ry. Co.,
Ill U. S. 505; 4 Sup. Ct.
583 968, 987, 1636
V. Seeby, 45 Mo. 212;
100 Am. Dec. 369 862, 864
V. Wade, 91 Cal. 449;
27 Pac. 768; 13 L. R. A.
754; 25 Am. St. Rep. 201 1616
Pacific Trust Co. v. Dorsey,
72 Cal. 55; 12 Pac. 49 645
£acific Vinegar, etc; Works v.
Smith, 93 Pac. (Cal.) 85 1276,
1277
V. Smith, 145 Cal. 352;
78 Pac. 550; 104 Am. St.
Rep. 42 1296, 1310, 1311
Packard v. Old Colony R. R.
Co., 168 Mass. 92; 46N. E.
433 161, 230
Padstow Total Loss & Colli-
sion Ass. Ass'n, 20 Ch. D.
137 258
Paducah Land, etc. Co. v.
Hayes, 15 Ky. Law Rep.
517; 24 S. W. 237 1334, 1338,
1339
Paducah, etc. R. R. Co. v.
Parks, 86 Tenn. 554; 8 S.
842 193, 633
Page V. Austin, 10 Can. Sup.
Ct. 132 483, 483
V. International, etc.
Trust, 62 L. J. Ch. 610 1514
Page Belting Co. v. Prince
(N. H.), 67 Atl. 401 806, 810,
1130
Pagin and Gill's Case, 6 Ch.
D. 681 643
Paige V. Smith, 99 Mass. 395 1617
Pain V. Soci6t6 St. Jean
Baptiste, 172 Mass. 319;
52 N. E. 502; 70 Am. St.
Rep. 287 586
Paine v. Hutchison, 3 Ch. 388 782,
785, 787, 787
V. Lake Erie, etc. R. R.
Co., 31 Ind. 283 1335
Painesville, etc. R. R. Co. v.
King, 17 Oh. St. 534 451, 1108
Pakenham Pork Packing Co.,
6 Ont. L. R. 582 178
, 12 Ont. L. R. 100 1214
Palliser v. Home Telephone
Co. (Ala.), 44 So. 575 488, 488
Palmer v. Bank of Zumbrota,
72 Minn. 266; 75N.W.380 480
483, 486
V. Forbes, 23 111. 301 1496,
1502, 1606
V. Hawes, 73 Wise. 46;
40 N. W. 676 • 1350, 1353
25
V. Pinkham, 33 Me. 32
V. Ring, 113 N. Y. App.
Div. 643
Palmer's Decoration, etc Co.
(1904), 2 Ch. 743
Palys V. Jewett, 32N.J.Eq.302
Panama, etc. Mail Co., 5 Ch.
318 1393, 1395, 1519
Pancoastv. Travelers' Ins. Co.,
79 Ind. 172
Panhandle Nat. Bank v.
Emery, 78 Tex. 498; 15
S. W. 23
Panmure, Ex parte, 24 Ch. D.
367
Pannebaker v. Tuscarora
Valley R. Co. (Pa.), 67 Atl.
923
Panton and the Cramp Steel
Co., 9 Ont. L. R. 3
1071
1429
1616
852
86
175
853
746
civ
TABLE OF CASES
[The references are to pages]
Panzl V. Battle Island, etc.
Co., 132 Fed. 607; 138 Fed.
48 1356
Parbury's Case (1896), 1 Ch.
100 650, 650
Pardee v. Aldridge, 189 U. S.
429; 23 Sup. Ct. 514 1510
Paris V. Paris, 10 Ves. 185 1141,
1145, 1148
Parish V. Wheeler, 22 N. Y.
494 844, 1510
Park V. Grant Locomotive
Works, 40 N. J. Eq. 114; 3
Atl. 162 1110, 1186, 1188
V. Modem Woodmen of
America, 181 111. 214; 54
N. E. 932 282
V. New York, etc. R. Co.,
57 Fed. 799 1612, 1612
V. New York, etc. R. R.
Co., 64 Fed. 190
V. Zwart, 92 Iowa 37; 60
N. W. 220
Park Hotel Co. v. Fourth Nat.
Bank, 86 Fed. 742; 30 C. C.
A. 409
Parker v. Bethel Hotel Co.,
96Tenn.252; 34S.W.209;
31 L. R. A. 706 694, 1072
V. Dupree, 28 Tex. Civ.
App. 341; 67 S. W. 185
V. Mason, 8 R. I. 427
V. McKenna, 10 Ch. 96
V. New Orleans R. R. Co.,
33 Fed. 693 1502, 1511, 1520
V. Nickerson, 112 Mass.
195 1306, 1331, 1332, 1332
V. Northern Central
Mich. R. R. Co., 33 Mich.
23 169
V. River Dam Nav. Co.,
1 De G. & Sm. 192 976
V. Thomas, 19 Ind. 213;
81 Am. Dec. 385 185, 193
V. U. S. Bldg., etc. Ass'n,
19 W. Va. 744 595
, Ex parte, 2 Ch. 685 744
Parkhurst v. Mexican, etc.
R. R. Co., 102 111. App. 507 172
V. Northern Central
R. R. Co., 19 Md. 472; 81
Am. Dec. 648 1515, 1551
Parkin v. Fry, 2 C. & P. 3 11 309
Parkinson v. West End Street
Ry. Co., 173 Mass. 446; 53
N. E. 891 1475, 1476
Parks V. Gates, 84 N. Y. App.
Div. 534; 82 N. Y. Supp.
1070 337
1574
108
84
1619
543
1335
Parmelee «. Associated Plr^si-
cians, etc., 9 N. Y. Misc.
458; 30 N. Y. Supp. 250 1379
Parmelee Library, 120 Fed.
235; 56 C. C. A. 583 44
Parrott v. Byers, 40 Cal. 614 962,
964
Parsons v. Hayes, 14 Abb.
N. C. 419 (N. Y.) 331, 969, 1290
V. Jackson, 99 U. S. 434 1410,
1424, 1434, 1436
V. Little, 28 App. D. C.
218 1585
V. Tacoma Smelting, etc.
Co., 25 Wash. 492; 65 Pac.
765 57, 71, 1026, 1203, 1305,
1312
Partridge v. Badger, 25 Barb.
(N. Y.) 146 63, 917
Patent File Co., 6 Ch. 83 65
Patent Invert Sugar Co., 31
Ch. D. 166 487
Patent Ventilating Co., Be, 12
Ch. D. 254 534
Paton V. Northern R. R. Co.,
85 Fed. 838 1659
Paton's Case, 5 Ont. L. R. 392 83,
705
Patrick V. Reynolds, 1 C. B.
N. s. 727 308
Pattberg v. Pattberg Bros.,
55 N. J. Eq. 604; 38 Atl.
205 1639
Patterson v. Arnold, 45 Pa. St.
410 222, 240, 245, 245, 252,
261
V. Robinson, 116 N. Y.
193; 22N. E. 372 1373
V. Smelting Works, 35
Oreg. 96; 56 Pac. 407 1214,
1215, 1296, 1317, 1344
V. Turner, 3 Ont. L. Rep.
373 215
Pattison v. Albany Bldg., etc.
Ass'n, 63 Ga. 373 222
Paul Boyer, Ltd.,?).Edwardes,
17 Times L. R. 16 355, 356
Paulino v. Portuguese Bene-
ficial Ass'n, 18 R. I. 165;
26 Atl. 36; 20 L. R. A. 272 374
Pauly V. Coronada Beach Co.,
56 Fed. 428 76, 77
V. Pauly, 107 Cal. 8; 40
Pac. 29; 48 Am. St. Rep.
98 855, 1210, 1303, 1307, 1316,
1377
V. State Loan, etc. Co.,
165 U. S. 606; 17 Sup. Ct.
465 622, 623, 810
clvi
TABLE OF CASES
[The references are to pages]
Pawle's Case, 4 Ch. 497 179
Paxton V. Bacon Mill, etc. Co.,
2 Nev. 257 280, 282
V. Heron (Colo.), 92 Pac.
15 918, 1203, 1322
Paxton Cattle Co. v. First
Nat. Bank, 21 Nebr. 621;
33 N. W. 271; 59 Am. St.
Rep. 852 288, 290
Payn v. Mutual Relief Soc, 17
Abb. N. C. (N. Y.) 53 659
Payne I). BuUard, 23 Miss. 88;
55 Am. Dec. 74 518, 524
V. New South Coal Co.,
10 Ex. 283 280
Payne & Co., David (1904), 2
Ch. 608 861, 1235, 1235, 1407
Payne's Case, 9 Eq. 223 763, 766
Payson v. Stoever, 2 Dillon
427 486, 1074, 1189
V. Withers, 5 Biss. 269 492,
1189
P. B. Mathiason Mfg. Co.
(Mo.), 99 S. W. 502 1006,
1013, 1015, 1016, 1037, 1039,
1040, 1046, 1060
Peabody v. Flint, 6 Allen 52
(Mass.) 935, 967
Pearce v. Madison, etc. R. R.
Co., 21 How. 441 838
Pearly v. Smith, 3 Atk. 260 1442
Pearson v. Concord R. R.
Corp., 62 N. H. 537; 13 Am.
St. Rep. 590 57, 58, 75, 76, 944,
959, 1082, 1306, 1312, 1326
V. London & Croydon
Ry. Co., 14 Sim. 541 504
V. Tower, 55 N. H. 215 1378
Pearson's Case, 3 De G. M. &
G. 241 309
■ , 5 Ch. D. 336 1337, 1338, 1339
Peat V. Clayton (1906), 1 Ch.
659 713, 714, 714
Peatman v. Centreville Light,
etc. Co., 100 Iowa 245; 69
N. W. 541 1408
Pecku. Elliott, 79 Fed. 10; 24
C. C. A. 425; 38 L. R. A.
616 481, 492, 529, 631
V. New London Mut. Ins.
Co., 22 Conn. 575 1378
V. New York, etc. Ry. Co. ,
85 N. Y. 246 1637
«. Peck, 33 Colo. 421; 80
Pac. 1063 974, 982
Peck Bros. & Co. v. Peck
Bros. Co., 113 Fed. 291;
51 C. C. A. 251 377, 377, 378,
388
clvii
Peckham v. Dutchess Co. R. R.
Co., 145 N. Y. 385; 40
N. E. 15 1613
V. Mason, 8 R. I. 427 1144
V. Newton, 15 R. I. 321;
4 Atl. 758 380
V. Van Wagenen, 83 N. Y.
40; 38 Am. Rep. 392 1116
Pedlar v. Road Block Gold
Mines (1905), 2 Ch. 427 98, 99,
99
Peel V. London & N. W. Ry.
Co. (1907), 1 Ch. 5 89, 89
Peel's Case, 2 Ch. 674 130, 177,
214, 223
Pegge V. Neath, etc. Tram-
ways (1898), 1 Ch. 183 1416
Peirce v. Burroughs, 58 N. H.
302 502
V. Com., 104 Pa. St. 150 1016
V. Morse-Oliver Bldg.
Co., 47 Atl. 914 1196, 1210
V. New Orleans Bldg.
Co., 9 La. 397; 29 Am. Dec.
448 1010, 1068
V. Van Dusen, 78 Fed.
693 1618, 1619
Pell's Case, 5 Ch. 11 205, 206,
634, 634
Pellatt's Case, 2 Ch. 527 191, 634
Pelly, Ex parte, 21 Ch. D. 490 294
Pelton V. Spider Lake Saw-
mill, etc. Co. (Wise), 112
N. W. 29 1379, 1379
Pender v. Lushington, 6 Ch.
D. 70 933, 943, 947, 1014,
1020, 1080, 1192
Pendergast v. Bank of Stock-
ton, 2 Sawy. 108 572
Pendery v. Carleton, 87 Fed.
41 ; 30 C. C. A. 510 199
Pendleton v. Harris-Emery
Co., 124 Iowa 361.; 100
N. W. 117 447
Penfold V. Charlevoix Sav.
Bank, 140 Mich. 126; 103
N. W. 572 749
Peninsular Iron Co. v. Eells,
68 Fed. 24 ; 15 C. C. A. 189 1497
Peninsular Ry. Co. v. Dimcan,
28 Mich. 130 208, 211, 212,
213
Penn v. Calhoun, 121 U. S.
251; 7Sup. a. 906 1570
Penn Match Co. v. Hapgood,
141 Mass. 145; 7 N. E. 22 284,
285, 301
Pennell v. Lathrop, 191 Mass.
357 282, 283, 284
TABLE OF CASES
[The references are to pages]
1356
713
1502
1598
70
1126
1625
Penney v. Biyant, 70 Nebr.
127; 96 N. W. 1033
Pennington v. Gittings, 2 Gill
& J. (Md.) 208
Pennock v. Coe, 23 How. 117
1527, 1556
Pennsylvania Co. v. Jackson-
ville, etc. Ry. Co., 55 Fed.
131; 5C. C. A. 53
V. Jacksonville, etc. Ry.
Co., 93 Fed. 60; 35 C. C. A.
202 1641, 1642
V. Philadelphia, etc.
R. R. Co., 36 Wily. Notes
Cas. (Pa.) 534 1461, 1596
Pennsylvania Co. for Ins. v.
Bauerle; 33 N. E. 166
Pennsylvania Iron Works v.
Mackenzie, 76 N. E. 228
Pennsylvania R. R. Co. v.
Allegheny Valley R. R. Co.,
42 Fed. 82
V. Allegheny, etc. R. R.
Co., 48 Fed. 139 1457, 1623
V. Jones, 155 U. S. 333;
15 Sup. a. 136 1583
V. Pennsylvania Co. for
Ins., etc., 205 Pa. St. 219;
54 Atl. 783 1021, 1022
V. St. Louis, etc. R. R.
Co., 118 U. S. 290; 6 Sup.
a. 1094 838, 839, 841
Pennsylvania R. R. Co.'s
Appeal, 86 Pa. St. 80 720, 727,
757
Pennsylvania Transporta-
tion Company's Appeal, 101
Pa. St. 576 1632, 1659
Pennsylvania, etc. Navigation
Co. V. Dandridge, 8 G. & J.
(Md.) 248; 29 Am. Dec. 543
822, 826
Penny, Ex parte, 8 Ch. 446 764,
764, 764, 764, 764, 765
Penobscot R. R. Co. v.
Dummer, 40 Me. 172; 63
Am. Dec. 654 608, 610, 921
r. White, 41 Me. 512; 66
Am. Dec. 257 606, 608, 921,
1213
Penobscot, etc. R. R. Co. v.
Dunn, 39 Me. 587 600, 611, 1038,
1201, 1224
Penrose v. Martyr, E. B. & E.
499
Pentelow's Case, 4 Ch. 178
People V. Ah Sam, 41 Cal. 645
V. Albany Hospital, 61
Barb. (N. Y.) 397
369
165
230
996
People V. Albany Medical Col-
lege, 26 Hun 348; 89N. Y.
635 1200
V. Albany, etc. R. R. Co.,
55 Barb. (N. Y.) 344 998, 998,
998, 1055, 1055, 1059
V. Am. Bell Tel. Co., 117
N. Y. 241; 22 N. E. 1057 878
V. Am. Ice Co., 104 N. Y.
Supp. 858 890
V. American Inst., 44
How. Pr. 468 1034
V. Ballard, 134 N. Y. 269;
32 N. E. 54; 17 L. R. A.
737 51, 71
V. Batchelor, 22 N. Y.
128 998
V. Bumham, 104 N. Y.
Supp. 725; 106 N.Y. Supp.
57 920
V. Carter, 122 Mich. 668;
81 N. W. 924 250
V. Cataract Bank, 5
N. Y. Misc. 14; 25 N. Y.
Supp. 129 897
V. Chicago Board of
Trade, 45 111. 112 566
V. Commissioners of
Taxes, 23 N. Y. 192 416
V. Conklin, 7 Hun (N. Y.)
188
V. Crossley, 69 111. 195
1206
1040,
1057
V. Cummings, 72 N. Y.
433
— V. Devin, 17 111. 84
— V. Dole, 122 Cal. 486; 55
Pac. 581; 68 Am. St. Rep.
50
— V. Duffy-Mclnnery Co.,
106 N. Y. Supp. 878
V. Ehnore, 35 Cal. 653
V. Equitable Life Ass.
Soc, 109 N. Y. Supp. 453
1285, 1287
— V. Globe Mut. Life Ins.
Co., 91 N. Y. 174
— V. Kip, 4 Cow. (N. Y.)
382 re.
— V. La Rue, 67 Cal. 526
996
1024
230
163
716
1280,
1242
clviii
1031
249,
250
— V. Lyon, 104 N. Y. Supp.
319 1184, 1184
— V. Milk Exchange, 77
Hun (N. Y.) 436; 29 N. Y.
Supp. 259 263
V. Montecito Water Co.,
97 Cal. 276; 32 Pac. 236;
33Am.St.Rep.l72 118,119,219
TABLE OP CASES
[The references are to pages]
People V. North River Sugar
Refinery, 121 N. Y. 582;
24 N. E. 834; 16 Am. St.
Rep. 843; 9 L. R. A. 33
V. Oakland County
Bank, 1 Doug. (Mich.) 282
79
914,
916
V. Peck, 11 Wend. (N. Y.)
604; 27 Am. Deo. 104 999, 1000
— — V. Phillips, 1 Denio
(N. Y.) 389 1066
V. Rose, 188 111. 268; 59
N. E. 432 23, 113
V. Rose, 219 111. 46; 76
N. E. 42 114, 374, 387
V. Runkle, 9 Johns.
(N. Y.) 147 1035, 1185, 1231
V. Selfridge, 52 Cal. 331 104
V. Sterling Mfg. Co., 82
111. 457 559, 992, 993, 1232
V. Stockton, etc. R. R.
Co., 45 Cal. 306; 13 Am.
Rep. 178 219, 645
V. Throop, 12 Wend.
(N. Y.) 183 579, 906, 1251
V. Tibbets, 4 Cow.
(N. Y.) 358 1022, 1024, 1031,
1249, 1249
V. Tuthill, 31 N. Y. 550 1065
V. Twaddell, 18 Hun
(N. Y.) 427 994, 998, 1010,
1012, 1040, 1185
i;. White, 11 Abb. Pr.
(N. Y.) 168 1037
People ex rel. Althause v.
Giroux Consol. Mines Co.,
107 N. Y. Supp. 188 899, 901,
904
People ex rel. Barney v.
Whalen, 104 N. Y. Supp.
555 53, 114, 114
V. Whalen, 106 N. Y.
Supp. 434 53, 114
People ex- rel. Belknap v.
Beach, 19 Hun (N. Y.) 259 46,
46, 47, 95, 103
People ex rel. Bernard v.
Cheeseman, 7 Colo. 376; 3
Pac. 716 106, ll9, 219
People ex rel. Bishop v.
Walker, 9 Mich. 328 894, 907
People ex rel. Blossom v.
Nelson, 46 N. Y. 477 114, 125
People ex rel. Board of Chari-
ties V. N. Y. Soc. for Pre-
vention, etc., 161 N. Y. 233 ;
55 N. E. 1063 22
People ex rel. Bosqui v. Crock-
ett, 9 Cal. 112 578, 744
clix
People ex rel. Brooklyn Gas
Co. V. Morgan, 114 N. Y.
App. Div. 266 1103
People ex rel. Callanan v.
Keeseville, etc. R. R. Co.,
106 N. Y. App. Div. 349;
94 N. Y. Supp. 555 895, 901
People ex rel. Cantrell v. St.
Louis, etc. R. R. Co., 176
111. 512; 52 N. E. 292; 35
L. R. A. 656 449
People ex rel. Clason v. Nassau
Perry Co., 86 Hun (N. Y.)
128; 33 N. Y. Supp. 244 903
People ex rel. Coliunbia
Chemical Co. v. O'Brien,
101 N. Y. App. Div. 296;
91 N. Y. Supp. 649 373, 374,
375
People ex rel. Copland v.
Minong Min. Co., 33
Mich. 2 1184
People ex rel. Davenport v.
Rice, 68 Hun (N. Y.) 24;
22 N. Y. Supp. 631 125, 128,
221
People ex rel. Deverell v.
Musical, etc. Union, 118
N. Y. 101; 23 N. E. 129 580
People ex rel. Dodson v. Board
ofTrade,79N. E. 611; 224
111. 370 580
People ex rel. Doyle v. N. Y.
Benevolent Soc, 3 Hun 361
(N. Y.) 427, 580
People ex rel. Elliott v. N. Y.
Cotton Exchange, 8 Hun
216 (N. Y,) 576
People ex rel. Erie R. R. Co. v.
Board of R. R. Comm'rs,
105 N. Y. App.- Div. 273;
93 N. Y. Supp. 584 119
People ex rel. Famimi v. San
Francisco Sav. Co., 72 Cal.
199; 13 Pac. 498 1105, 1109
People ex rel. Felter v. Rose,
225 111. 496; 80 N. E. 293 125,
374
People ex rel. Gales v. Mo-
Donough, 28 N. Y. Misc.
652; 60 N. Y. Supp. 45 105
People ex rel. Hamman v.
Paton,20Abb.N.C.(N.Y.)
172 901, 902
People ex rel. Harriman v.
Paton, 20 Abb. N. C.
(N. Y.) 195 901,906
People ex rel. Hart v. Phillips,
1 Denio (N. Y.) 389 1031
TABLE Of" CASES
[The references are to pages]
People ex rel. Hatch v. Lake
Shore, etc. R. R. Co., 11
Hun (N. Y.) 1 893, 894, 903,
906
People ex rel. Home Life Ins.
Co. V. Home Life Ass. Co.,
Ill Mich. 405; 69 N. W.
653 379
People ex rel. Hunter v. Nat.
Park Bank, 107 N. Y. Supp.
369 901
People ex rel. Jenkins v.
Parker, etc. Coal Co., 10
How. Pr. (N. Y.) 543 483
People ex rel. Leach v. Central
Fish Co., 101 N. Y. Supp.
1108 897, 897
People ex rel. Long Island
R. R. Co. V. Board of R. R.
Comm'rs, 75 N. Y. App.
Div. 106; 77 N. Y. Supp.
380 118
People ex rel. Lorge v. Con-
solidated Nat. Bank, 105
N. Y. App. Div. 409; 94
N. Y. Supp. 173 899, 901, 903,
904
People ex rel. Loy v. Mount
Shasta Mfg. Co., 107 Cal.
256; 40 Pac. 391 49, 50, 99
People ex rel. McDonald v.
United States Mercantile
Rep. Co. 20 Abb. N. C.
(N. Y.) 192 901, 904, 906
People ex rel. Mcllhany v.
Chicago Live Stock Exch.,
170111.556; 48N. E. 1062;
62 Am. St. Rep. 404; 39
L. R. A. 373 570
People ex rel. Mclnnes v.
Columbia Bag Co., 103
N. Y. App. Div. 208; 92
N. Y. Supp. 1084 896, 904,
905
People ex rel. Meads v. Alpha
Lodge, 13 N. Y. Misc. 677;
35 N. Y. Supp. 214 580, 1003
People ex rel. Moloney v. Pull-
man Car Co., 175 111. 125;
51 N. E. 664; 64 L. R. A.
366 76, 91
People ex rel. Muir v. Throop,
12 Wend. (N. Y.) 183 896, 906
People ex rel. New York, etc.
R. R. Co. V. Public Service
Commission, 106 N. Y.
Supp. 968 645
People ex rel. N. Y., etc. R. R.
Co. V. R. R. Comm'rs, 81
clx
N. Y. App. Div. 242; 81
N. Y. Supp. 20; 175 N. Y.
516; 67 N. E. 1088 137, 645
People ex rel. Onderdonk v.
Mott, 1 How. Pr. 247 897
People ex rel. Peabody v.
Chicago Gas Trust Co., 130
ni. 268; 22 N. E. 798; 17
Am. St. Rep. 319; 8 L. R.
A. 497 47, 49, 57, 57, 75, 76, 76,
114, 258, 263
People ex rel. Piatt v. Oak-
land Co. Bank, 1 Doug.
(Mich.) 282 905
People ex rel. Plumas County
V. Chambers, 42 Cal. 201 645
People ex rel. Probert v.
Robinson, 64 Cal. 373; 1
Pac. 156 1010, 1017, 1023
People ex rel. Richmond v.
Pac. Mail S. S. Co., 50
Barb. 280 900
People ex rel. Schmitt v.
St. Franciscus Benev. Soc,
24 How. Pr. (N. Y.) 216
566, 580
People ex rel. Schurtz v. Cook,
110 N. Y. 443; 18 N. E.
113 1523
People ex rel. S. Cohn & Co. v.
Miller, 180 N. Y. 16; 72
N. E. 525 448
People ex rel. Stephens v.
Greenwood Lake Ass'n, 18
N. Y. Supp. 491 1200
People ex rel. Stewart v.
Young Men's, etc. Soc, 41
Mich. 67 579
People ex rel. Stobo v. Eadie,
63 Hun 320; 18 N. Y.
Supp. 53; 133 N. Y. 573;
30 N. E. 1147 893, 903
People ex rel. Thacher v. N. Y.
Commercial Ass'n, 18 Abb.
Pr. (N. Y.) 271 566, 580
People ex rel. Traders' Fire
Ins. Co. V. Van Qeave, 183
ni. 330; 55 N. E. 698; 47
L. R. A. 795 379
People ex rel. Union Trust Co.
V. Coleman, 126 N. Y. 433;
27 N. E. 818; 12 L. R. A.
762 416
People ex rel. U. S. Grand
Lodge V. Payn, 161 N. Y.
229; 55 N. E. 849 125, 370
People ex rel. Van Norman v.
Central Car, etc. Co., 41
Mich. 166; 49 N. W. 925 1120
TABLE OP CASES
[The references are to pages]
People ex rel. Venner v. N. Y.
LUe Ins. Co., Ill N. Y.
App. Div. 183; 97 N. Y.
Supp. 465 893
People ex rel. Wallace v.
Sterling Mfg. Co., 82 111.
457 562
People ex rel. Ward v. Green,
116 Mich. 505; 74 N. W.
714 134, 138
People ex rel. Weatherly v.
Golden Gate Lodge, 128
Cal. 257; 60 Pac. 865 117
People's Bank v. Gridley, 91
ni. 457 716
V. Kurtz, 99 Pa. St. 344;
44 Am. Rep. 112 784
V. National Bank, 101
U. S. 181 70
V. St. Anthony's Church,
109 N.Y. 512; 17 N. E.
408 1210, 1371, 1376, 1377,
1379
V. Superior Court, 104
Cal. 649; 38 Pac. 452;
43 Am. St. Rep. 147; 29
L. R. A. 844 1041
People's Bank of Talbotton v.
Exchange Bank, 116 Ga.
820; 43 S. E. 269; 94 Am.
St. Rep. 144 775, 775
People's Bldg., etc. Ass'n
V. Purdy (Colo.), 78 Pac.
465 593
People's Home Sav. Bank v.
Rauer (Cal.), 84 Pac. 329 622
People's Home Savings Bank
V. Rickard, 139 Cal. 285;
73 Pac. 858 619, 763, 763
People's Home Sav. Bank v.
Sadler (Cal.), 81 Pac. 1029 567,
601, 625
V. Stadtmuller (Cal.), 88
Pac. 280 616, 782, 791
People's Inv. Co. v. Crawford
(Tex.), 45 S. W. 738 957, 958
People's Mutual Ins. Co. v.
Westcott, 14 Gray (Mass.)
440 1003, 1226
People's Trust Co. v. Brook-
lyn, etc. R. R. Co., 106
N.Y. Supp. 782; 121 N. Y.
App. Div. 604 1503, 1510
People's Trust Co. v. Papst,
113 N. Y. App. Div. 375;
98 N. Y. Supp. 1045 1329
V. Schenok, 106 N. Y.
Supp. 782; 121N. Y. App.
Div. 604 1503, 1510
Peoria Star Co. v. Cutright,
115 111. App. 492 853
Peoria, etc. R. R. Co. v.
Thompson, 103 111. 187 1403,
1437, 1496, 1627
Peoria, etc. Ry. Co. v. Coster,
97 Fed. 519 1666
Pepe V. City, etc. Bldg. Soc.
(1893), 2 Ch. 311 578, 586
Pepper v. Addioks, 153 Fed.
383 1331
V. Chambers, 7 Ex. 226 889
Percival v. Wright (1902), 2
Ch, 421 1351, 1351, 1352
Percy v. Millaudon, 3 La. 568 ■ 516,
519, 1286
V. Millaudon, 8 Martin
N. 8. (La.) 68 1274
Pere Marquette R. R. Co. v. .
Graham, 136 Mich. 444;
99 N. W. 408 1503
Perkins v. Bradley, 24 Vt. 66 1379
v. Hatch, 4 Hun (N. Y.)
137 250
1). Lyons, 111 Iowa 192;
82 N. W. 486 695, 698, 699, 699,
716
V. Northern Pac. Ry.
Co., 155 Fed. 445 937, 969
V. Rouss, 78 Miss. 343;
29 So. 92 306
V. Trinity Realty Co.
(N. J. Ch.), 61 Atl. 167 857
Perkins Co. v. Shewmake, 119
Ga. 617; 46 S. E. 832 383
Perkins, Be, 24 Q. B. D. 613 775,
795, 796, 797
Perrett, Ex varte, 15 Eq. 250 171,
385
Perris Irrigation District v.
Thompson, 116 Fed. 832 1343
Perry v. Barnet, 15 Q. B. D.
388 780
V. Council Bluffs, etc.
Co., 67 Hun (N. Y.) 456;
22 N. Y. Supp. 151 591
V. House of Refuge, 63
Md. 20; 52 Am. Rep. 495 869
V. Little Rock, etc. Ry.
Co., 44 Ark. 383 293
V. Oriental Hotels, 12
Eq. 127 1599
V. Oriental Hotels, 5 Ch.
420 1598
V. Tuskaloosa, etc. Co.,
93 Ala. 364; 9 So. 217 1040,
1206, 1250, 1331
Perry's Case, 34 L. T. 716 1279,
1280, 1336
clxi
TABLE OF CASES
[The references are to pages]
Person & Riegel Co. v. Lipps
(Pa.), 67 Atl. 1081 416, 486, 489
Perth Electric -Tramways
(1906), 2 Ch. 216 1410, 1418,
1432, 1473, 1473
Peru Plow, etc. Co. v. Harker,
144 Fed. 673; 75 C. C. A.
475 833
Peruvian Guano Co. (1894),
3 Ch. 690 1241
Peruvian Ry. Co., 19 L. T. 803 76,
1215, 1370
Peruvian Rys. Co. v. Thames,
2 Ch. 617 97, 1187
Peshtigo Co. v. Great West-
em Tel. Co., 50 111. App.
624 77
Peter v. Union Mfg. Co., 56
Oh. St. 181; 46 N. E. 894 627
Peterborough R. R. Co. v.
Nashua, etc. R. R. Co., 59
N. H. 385 629
Peters v. Union Biscuit Co.,
120 Fed. 679 1356
Petersburg, etc. Ins. Co. v.
Dellatorre, 70 Fed. 643; 17
C. C. A. 310 1655
V. Lumsden, 75 Va.
327 769, 770, 771
Peterson v. Chicago, etc. Ry.
Co., 205 U. S. 364 878
Petty V. Hayden, 115 Iowa
212; 88 N. W. 339 228
Peveril Gold Mines (1898),
1 Ch. 122 563
Pew V. First Nat. Bank, 130
Mass. 391 1248
Pfeiffer v. Landsberg Brake
Co., 44 Mo. App. 59 1247, 1248
Pfister V. Gerwig, 122 Ind.
567; 23 N. E. 1041 560, 561,
571, 593
V. Milwaukee, etc. Ry.
Co., 83 Wise. 86; 53 N. W.
27
Phelan v. Hazard, 5 Dillon 45
Phelps V. Farmers', etc. Bank,
26 Conn. 269 1133, 1156
V. Lyle, 10 A. & E. 113 1180
V. Town of Lewiston, 15
Blatchf. 131
Philadelphia Construction Co.
V. Cramp, 138 Fed. 999; 71
C. C. A. 253
Philadelphia Loan Co. v.
Towner, 13 Conn. 249
Philadelphia Lying-in Charity
V. Maternity Hospital, 29
Pa. Super. Ct. 420 129
1402
634
1460
352
865
Philadelphia Nat. Bank v.
Smith, 195 Pa. St. 38; 45
Atl. 655 730
Philadelphia Trust, etc. Co.
V. Philadelphia Trust Co.,
123 Fed. 534 369, 372, 379, 387
Philadelphia Trust, etc. Co.'s
Appeal (Pa.), 16 Atl. 734 1147
Philadelphia, etc. Ferry Co.
V. Intercity Link Ri R. Co.
(N. J.), 62 Atl. 184 140
Philadelphia, etc. R. R. Co.
V. Cowell, 28 Pa. St. 329;
70 Am. Bee. 128 1122, 1351
V. Fidelity Ins. Co., 105
Pa. St. 216 1447
V. Hickman, 28 Pa. St.
318 188, 525, 634, 921
V. Johnson, 54 Pa. St.
127 1459. 1528
V. Knight, 124 Pa. St.
58; 16 Atl. 492 1449,1450,1460
V. Lewis, 33 Pa. St. 33;
75 Am. Dec. 574 1409
V. Smith, 105 Pa. St. 195 1449,
1450, 1451, 1460
V. Woelpper, 64 Pa. St.
366 ; 3 Am. Rep. 596 1503, 1527,
1551
Philadelphia, etc. R. R. Co.'s
Appeal, 4 Am. & Eng. R. R.
Cases 118 (Pa.) 68, 1398
Philadelphia, etc. Ry. Co. v.
Quigley, 21 How. 202 869
Phillips V. Coffee, 17 111. 154;
63 Am. Dec. 357 406
V. Eastern R. R. Co., 138
Mass. 122 451, 1107
V. Melbourne, etc. Candle
Co., 16 Vict. L. R. Ill 1095,
1098, 1101
V. Providence Steam En-
gine Co., 21 R. I. 302; 43
Atl. 598 ; 45 L. R. A. 560 72, 1076
V. Southern Division, etc.
R. R. Co., 22 Ky. Law Rep.
1630; 60 S. W. 941 1594
V. Wickham, 1 Paige
(N. Y.) 590 ■ 1040, 1066
V. Winslow, 18 B. Monr.
(Ky.) 431; 68 Am. Dec.
729 1503, 1520, 1551
Phillips Academy v. King, 12
Mass. 546 54
Phinizy v. Augusta, etc. R. R.
Co., 62 Fed. 678 1187
V. Augusta, etc. R. R.
Co., 62 Fed. 771 1575, 1641,
1642
cbdi
TABLE OF CASES
[The references are to pages]
Phinizy v. Augusta, etc. R. R.
Co., 63 Fed. 922 1543
II. Augusta, etc. R. Co.,
98 Fed. 776 1490, 1492
Phoenix Bessemer Co., 44 L. J.
Ch. 683 66
Phoenix Electric Light Co., 31
W. R. 398 1039
Phoenix Iron Co. v. Com., 113
Pa. St. 563; 6 Atl. 75 894, 895,
904
Phoenix Iron Works v. New
York Security, etc. Co.,
83 Fed. 757: 28 C. C. A.
76 1637
Phoenix Life Ass. Co., 2 Johns.
& H. 441 830, 862
Phoenix Warehousing Co
Badger, 67 N. Y. 294
V.
600, 609,
633
V.
526
V.
315,315
Phosphate of Lime Co.
Green, L. R. 7 C. P. 43
Phospliate Sewage Co.
Hartmont, 5Ch.D.394
Picard v. East Tennessee, etc
R. R. Co., 130 U. S. 637; 9
. Sup. Ct. 640 1521
Picard v. Hughey, 59 Oh. St.
577; 51 N. E. 133 133, 141, 141
Pickens Tp. v. Post, 99 Fed.
659 1434, 1435
Pickering v. Stephenson, 14
Eq. 322 1267
Pickering v. Townsend, 118
Ala. 351; 23 So. 703 1566
Pierce v. Emery, 32 N. H. 484 1520,
1537, 1549, 1550, 1550
Pierce v. Old Dominion, etc.
Smelting Co., 67 N. J. Eq.
399; 58 Atl. 319 1305
Pierson v. Morgan, 17 N. Y.
Civ. Proc. Rep. 124; 4
N. Y. Supp. 898 1284, 1285
V. Morgan, 20 Abb. n. c.
(N. Y.) 428 1288
Pietsch V. Krause, 116 Wise.
344; 93 N. W. 9 154, 979
V. Milbrath, 101 N. W.
388; 102 N. W. 342; 123
Wise. 647 ; 107 Am. St. Rep.
1017 274, 322, 327, 330, 331,
981
Pike V. Bangor, etc. R. R. Co.,
68 Me. 445 602, 602, 1214
Pike Co. V. Rowland, 94 Pa.
St. 238 1210
Pilbrow V. Pilbrows Atmos-
pheric, etc. Co., 5 C. B.
440 235, 240
1493
918
700
591
378
clxiii
Pillsbury v. Consolidated, etc.
Ry. Co., 69 Me. 394
Pinchback v. Bessemer Min-
ing, etc. Co., 137 N. Car.
171; 49S. E. 106
Pine V. Western Nat. Bank,
63 Kans. 462; 65 Pac. 690
Pine Beach, etc. Corp. v. Co-
lumbia Amusement Co.
(Va.), 56 S. E. 822
Pinet et Cie v. Maison Louis
Pinet (1898), 1 Ch. 179
Pinkerton v. Manchester, etc.
R. R. Co., 42 N. H. 424 423, 699,
717
V. Pa. Traction Co.,
193 Pa. St. 229; 44 Atl.
284 123 123
Pinkett v. Wright, 2 Hare 120 ' 765
Pinkney & Sons S. S. Co., Re
(1892), 3 Ch. 125
Pinkus V. Minneapolis Linen
Mills, 65 Minn. 40; 67 N. W.
643
Pinney v. Nelson, 183 U. S.
144; 22 Sup. Ct. 52
Pioneer Paper Co., 36 How.
Pr. (N. Y.) Ill 1025, 1027
V. 36 How. Pr. (N. Y.)
105 1055, 1055, 1056
Piper V. Chappell, 14 M. & W.
624
— — V. Rhodes, 30 Ind. 309
Pitcher v. Lone Pine-Surprise,
etc. Co., 39 Wash. 608; 81
Pac. 1047
Pitchford v. Davis, 5 M. &
W. 2
Pitot V. Johnson, 33 La. Ann.
1286 684, 715, 770
Pitts V. Steele Mercantile Co.,
75 Mo. App. 221 271, 287, 289
Pittsburgh Const. Co. v. West
Side Belt R. R. Co., 154
Fed. 929
Pittsburg Mining Co. i;.
Spooner, 74 Wise. 307; 42
N.W.259; 17Am. St. Rep.
149 326, 326
Pittsburg Sheet Mfg. Co. v.
Beale, 204 Pa. St. 85; 53
Atl. 540
Pittsburgh, etc; Mining Co.
V. Quintrell, 91 Tenn. 693;
20 S. W. 248 280, 284, 287,
287
Pittsburgh, etc. R. R. Co. v.
Applegate, 21 W. Va. 172 921
V. Biggar, 34 Pa. St. 455 191
544
966
103
582
107
968
608
865
253
TABLE OF CASES
[The references are to pages]
- Pittsburgh v. Clarke, 29 Pa. St.
146 600, 620, 767, 774, 912,
912, 917
V. County of Allegheny,
63 Pa. St. 126 456, 456, 457,
1108
Pittsburg, etc. Ry. Co. v.
Dodd, 72 S. W. 822; 74
S. W. 1096; 115 Ky. 176;
24 Ky. Law Rep. 2057; 25
Ky. Law Rep. 255 938, 1082,
1306
Pittsburgh, etc. Ry. Co. v.
Fierst, 96 Pa. St. 144 1523, 1634
Pittsburgh Ry. Co. v. Keokuk,
etc. Bridge Co., 131 U. S.
371; 9Sup. Ct. 770 1233
Pittsburgh, etc. Ry. Co. v.
Lightheiser (Ind.), 78 N. E.
1033 226
V. Long Island, etc.
Trust Co., 172U. S. 493; 19
Sup. Ct. 238 1497
V. Lynde, 55 Oh. St. 23;
44 N. E. 596 1410, 1424, 1436,
1437, 1530
V. Plummer, 37 Pa. St.
413 614
Pittston Engine, etc. Co., 11
Pa. Co. Ct. 182 124
Pixley V. Western Pac. R. R.
Co., 33 Cal. 183; 91 Am.
Dec. 623 867
Place V. People, 87 111. App.
527 1208
Plank Road Co. v. Young, 12
Md. 476 228
Plankinton v. Hildebrand, 89
Wise. 209 ; 61 N. W. 839 683, 809
Plant Seed Co. v. Michel
Plant & Seed Co., 37 Mo.
App. 313 371
Planters', etc. Bank v. Pad-
gett, 69 Ga. 159 237, 252
Planters', etc. Ins. Co. v.
Selma Sav. Bank, 63 Ala.
585 775
Plaquemines, etc. Co. v. Buck,
52 N. J. Eq. 219; 27 Atl.
1094 319, 322
Plaskynaston Tube Co., 23
Ch. D. 542 628
Piatt V. Birmingham Axle Co.,
41 Conn. 255 651, 775
V. New York, etc. Ry.
Co.,63N.Y.App.Div.401;
71 N. Y. Supp. 913 1515, 1599
V. Philadelphia, etc. R.
R. Co., 65 Fed. 660 1621
Piatt V. Philadelphia, etc.
R. R. Co., 65 Fed. 872 1660
V. Philadelphia, «tc. R.
R. Co., 84 Fed. 535; 28
C. C. A. 488 1612, 1612
Platte Valley Bank v. Hard-
ing, 1 Nebr. 461 237
PlimsoU's Case, 24 L. T. 653 155
Plumb V. Bank of Enterprise,
48 Kans. 484; 29 Pac. 699 616,
618, 693, 698, 699
Plumbe V. Neild, 29 L. J. Ch.
618 1141, 1141
Plymouth Bank v. Bank of
Norfolk, 10 Pick. (Mass.)
454 696, 700
Pneumatic Gas Co. v. Berry,
113 U. S. 322; 5 Sup. Ct.
525 1267, 1301, 1346
Pochelu V. Kemper, 14 La.
Ann. 308 ; 74 Am. Dec. 433 234
Pocono Spring, etc. Co. v.
Am. Ice Co., 214 Pa. 640;
64 Atl. 398 • 43
Pokrefky v. Firemen's Fund
Ass'n, 121 Mich. 456; 80
N. W. 240 584
Poland V. Lamoiville Valley
R. R. Co., 52 Vt. 144 1517, 1542,
1559, 1669
Polhemus v. Fitchburg R. R.
Co., 123 N. Y. 502; 26
N. E. 31 1509
V. Holland Trust Co.,
61 N. J. Eq. 654, 47 Atl.
417 1412, 1412
V. Polhemus, 114 N. Y.
App. Div. 781; 100 N. Y.
Supp. 263 936, 941, 1271, 1287
Polish Nat. Catholic Church,
31 Pa. Super, a. 87 129, 129
PoUitz V. Farmers' L. & T.
Co., 53 Fed. 210 1486
Pollock V. National Bank, 7
N.Y.274; 57 Am. Dec. 520 754,
755 755
V. Pollock, 18 Eq. 329 1157
Pond V. Nat. Mtge & Deben-
ture Co., 6 Kans. App. 718;
50 Pac. 973 1375
V. Vermont, etc. R. R.
Co., Fed. Cas. No. 11, 264
(p. 975) 998, 1250
V. Vermont, etc. R. R.
Co., 19 Fed. Cas. 968 1326
Pontet V. Basingstoke Canal
Co., 3 Bing. N. c. 433 1528
Poock V. Lafayette Bldg.
Ass'n, 71 Ind. 357 852
ebmv
TABLE OP CASES
[The references are to pages]
Pool's Case, 35 Ch. D. 579 641
Poole V. Middleton, 29 Beav.
646 767, 785, 787, 787
V. National Bank of
China (1907), A. C. 229 530, 530,
532, 533, 535, 536, 537,
539
V. West Point, etc. Ass'n,
30 Fed. 513 108, 109, 492, 838
Pooley Hall Colliery Co., 18
W. R. 201 1244
Poor V. Iowa Central Ry. Co.,
155 Fed. 226 938, 969
Pope V. Merchants' Trust Co.
(Tenn.), 103 S. W. 792 140, 490,
492
Pope's Case, 30 Fed. 169 1618,
1619
Porch V. Agnew Co. (N. J.
Ch.), 61 Atl. 721 293, 1497
Porstewart Tramway Co.
(1896), 1 I. R. 265 1601
Port V. Russell, 36 Ind. 60;
10 Am. Rep. 5 1295
Port Edwards, etc. Ry. Co. v.
Arpin, 80 Wise. 214; 49
N. W. 828 138
Port Huron, etc. Ry. Co. v.
. Judge, 31 Mich. 456 958
Port Townsend Nat. Bank v.
Port Townsend Gas, etc.
Co., 6 Wash. 597; 34 Pac.
155 715
Portage, etc. Ins. Co. v. Wet-
more, 17 Oh. Rep. 330 1378
Portal V. Emmons, 1 C. P. D.
664 1173, 1175
Porter v. Androscoggin, etc.
R. R. Co., 37 Me. 349 397, 402
V. Lassen, etc. Co., 127
Cal. 261; 59 Pac. 563 1203,
1205, 1205, 1217, 1298
V. Pittsburg Bessemer
Steel Co., 120 U. S. 649; 7
Sup. Ct. 741 1084, 1566
V. Plymouth Gold Min-
ing Co., 29 Mont. 347; 74
Pac. 938; 101 Am. St. Rep.
569 191, 517
V. Robinson, 30 Hun
(N. Y.) 209 1199
V. Sabin, 36 Fed. 475 960
V. Sabin, 149 U. S. 473;
13 Sup. Ct. 1008 960, 960
Portland, etc. Turnpike Co. v.
Bobb,88Ky.226; lOS.W.
794 126
Portsmouth Tramways Co.
(1892), 2 Ch. 362 1598
Portuguese Consolidated
Mines, 42 Ch. D. 160 1175,1198,
1206, 1230
Portuguese Consolidated
Copper Mines, 45 Ch. D. 16 1218
Posner v. Southern Exhaust,
etc. Co., 109 La. 658; 33
So. 641 425, 1110
Possell V. Smith (Colo.), 88
Pac. 1064 288, 1235
Post V. Beacon, etc. Co., 84
• Fed. 371; 28 C. C. A. 431 72,
966
Postage Stamp, etc. Co.
(1892), 3 Ch. 566 1336, 1339
Potomac Mfg. Co. v. Evans,
84 Va. 717; 6 S. E. 2
Pott V. Schmucker, 84 Md.
535; 36 Atl. 592; 57 Am.
St. Rep. 415; 35 L. R. A.
392 882, 884
Potter V. N. Y. Infant Asylum,
44 Hun (N. Y.) 367
Potts V. Rose Valley Mills, 167
Pa. St. 310; 31 Atl. 655
1461
1373
1185,
1239
V. Wallace, 146 U. S. 689;
13 Sup. Ct. 196
- — • V. Wallace, 32 Fed. 272
Pottsville Bank v. Minersville
Water Co., 211 Pa. 566; 61
Atl. 119
Poughkeepsie, etc. Co. v.
Griffin, 24 N. Y. 150 209, 2l2
Poultney v. Bachman, 31
Hun (N. Y.) 49 586, 586, 948
Pound, Son & Hutchins,
Henry, 42 Ch. D. 402
Powell V. Blair, 133 Pa. St.
550; 19 Atl. 559
V. Georgia, etc. Ry. Co.,
121 Ga. 803; 49 S. E.759
V. London & Provincial
Bank (1893), 2 Ch. 555
761, 762
V. Murray, 3 N. Y. App.
Div. 273; 38 N. Y. Supp.
233
V. Murray, 157 N. Y. 717;
53 N. E. 1130
Powers V. Blue Grass Bldg.,
etc. Ass'n, 86 Fed. 705 958, 959,
1183, 1188
V. Schlicht Heat, etc. Co.,
23N. Y. App. Div. 380; 48
N.Y. Supp. 237; 165 N.Y.
662; 59 N. E. 1129 591
Powis V. Harding, 1 C. B. N. s.
533 925
526
430
732
1581
629
277
685,
43
43
clxv
TABLE OF CASES
[The references are to pages]
Powles V. Page, 3 C. B. 16 1235
Prairie Lodge v. Smith, 58
Miss. 301 113, 852
Prall V. Tilt, 28 N. J. Eq. 479 723,
725, 798
Pratt V. American Bell Tel.
Co., 141 Mass. 225; 5N. E.
307; 55 Am. St. Rep. 465
V. Douglas, 38 N. J. Eq.
516
— V. Eaton, 79 N. Y. 449
V. Merriden Cutlery Co.,
35 Conn. 36
V. Oshkosh Match Co., 89
Wise. 406; 62N.W.84
501,
1477
1149
87
905
285,
290
V. Pratt, Read & Co., 33
Conn. 446 1110, 1111
V. Taunton Copper Co.,
123 Mass. 110; 25 Am. Rep.
37 754, 757
V. Short, 79 N. Y. 437;
35 Am. Rep. 531 87, 865
Pray v. Mitchell, 60 Me. 430 422
V. Todd, 71 N. Y. App.
Div. 391; 75 N. Y. Supp.
947 692, 695
Prefontaine v. Grenier (1907),
A. C. 101 1273, 1278
Prendergast v. Turton, 1 Y. &
C. Ch. 98 665
Prentiss Tool & Supply Co. v.
Godchaux, 66Fed. 234; 13
C. C. A. 420 917, 918
Presbyterian Congregation v.
Carlisle Bank, 5 Pa. St. 345 813
Prescott Nat. Bank v. Butler,
157 Mass. 548; 32 N. E.
909 845, 851
Preservation Syndicate (1895),
2 Ch. 768 644
President,, etc. of Georgetown
College V. Browne, 34 Md.
450 55
President, etc. of Hanover
Savings Fund v. Suter, 1
Md. 502 381
Preston v. Grand Collier Dock
Co., 11 Sim. 327 176, 620
V. Liverpool, etc. Ry. Co.,
5 H. L. C. 605 281, 281
V. Loughran, 58 Hun
(N.Y.)210; 12N.Y. Supp.
313 1318, 1324, 1344
V. Melville, 16 Sim. 163 1141
V. Northwestern Cereal
Co., 67Nebr. 45; 93 N. W.
136 84
Preston Nat. Bank v. Smith,
etc. Purifier Co., 84 Mich.
364; 47 N. W. 502 1381
Price V. Anderson, 15 Sim.
473 1141
V. Gover, 40 Md. 102 418, 807
V. Grand Rapids, etc.
R. R. Co., 13 Ind. 58 1202,
1217
V. Holcomb, 89 Iowa 123;
56 N. W. 407 1018
V. Morning Star Mining
Co., 83 Mo. App. 470 514, 1130,
1131, 1134, 1507
V. Price, 6 Dana (Ky.)
107
Price's Appeal, 106 Pa. St. 421
420
653,
653
Priest V. Citizens Mut. Fire
Ins. Co., 3 Allen (Mass.)
602 589
V. Glenn, 51 Fed. 400; 2
C. C.A. 305 386
Prince Investment Co. v. St.
Paul, etc. Land Co., 68
Minn. 121; 70 N. W. 1079 697,
774, 775
Prince of Wales Co. v. Hard-
ing, E. B. & E. 183 395, 1221
Printing Telegraph News Co.
V . Brantingham, 77 N. Y.
App. Div. 280; 79 N. Y.
Supp. 190 714, 733
Pritchard's Case, 8 Ch. 956 640,
641, 641
Pritchett v. Nashville Trust
Co.,96Tenn.472; 36S. W.
1064; 33L. R.A. 856 1150
Proctor Coal Co. v Finley, 98
Ky. 405 ; 33 S. W. 188 998, 998,
1013, 1015, 1015, 1039
Produce Exchange Trust Co.
V. Bieberbach, 176 Mass.
577; 58N. E. 162 592
Pronick v. Metropolitan Trust
Co., 67 N. Y. App. Div. 616;
74 N. Y. Supp. 577 1487
V. Spirits Distributing
Co., 58 N. J. Eq. 97; 42
Atl. 586 134, 138, 446
Proprietors of Cabot, etc.
Bridge V. Chapin, 6 Cush.
(Mass.) 50 607
Proprietors of City Hotel v.
Dickinson, 6 Gray (Mass.)
586 610
Proprietors of Stourbridge
Canal v. Wheeley, 2 B. &
Ad. 792 35
clxvi
TABLE OF CASES
[The references are to pages]
Prospect Worsted Mills, 126
Fed. 1011 84
Protection Life Ins. Co. v.
Osgood, 93 111. 69 753
Prouty V. Michigan, etc. R.R.
Co., 1 Hun (N. Y.) 655 443, 460,
467, 475
Provident BIdg. & Loan Ass'n,
Be, 62 N. J. Law 590; 41
Atl. 952 1025
Provident Institution v. Bum-
ham, 128 Mass. 458 230, 233
Provident, etc. Trust Co. v.
Saxon, 116 La. 408; 40 So.
778 238
Provincial Grocers, Ltd., 10
Ont. L. R. 705 169
Provision Merchants Co., 26
L. T. 862 435
Provost V. Morgan's, etc. R. R.
Co., 42 La. Ann. 809; 8 So.
584 254
Pudsey Coal Gas Co. v. Corpo-
ration of Bradford, 15Eq. 167 961
Pueblo Sav. Bank v. Richard-
son (Colo.), 89 Pac. 799 693,
697, 752
Pugh and Sharman's Case, 13
Eq. 566 176, 621
Pulbrook V. Richmond Con-
solidated Min. Co., 9 Ch. D.
610 1167, 1177, 1251
Pulford V. Fire Dept., 31
Mich. 458 565, 578, 657, 658
PuUan V. Cincinnati, etc. R. R.
Co., 4 Biss. 35 1495, 1512, 1523,
1555, 1603
Pullis V. Pullis, 157 Mo. 565;
57 S. W. 1095 392
Pullman v. Upton, 96 U. S.
328 483, 492, 620, 622
Pullman's, etc. Co. v. Ameri-
can, etc. Co., 84 Fed. 18 ; 28 .
C. C. A. 263 1568
V. Central Transporta-
tion Co., 171 U. S. 138; 18
Sup. Ct. 808 837, 840, 841
Pulsford V. Richards, 17 Beav.
87 184, 184
Punt V. Symons & Co. (1903),
2 Ch. 506 584, 584, 585, 587,
1019, 1062
Purcell's Case, 29 W. R. 170 1171
Purdy V. Bankers' Life Ass'n,
lOlMo. App. 91; 74S. W.
486 580, 657
Pusey V. New Jersey, etc.
R. R. Co., 14 Abb. Pr. N. s.
(N. Y.) 434 1474
Putnam v. Jacksonville, etc.
R,y. Co., 61 Fed. 440 1573
V. Sweet, 1 Chand. (Wise.)
286; 2 Finn. (Wise.) 302 972,
974, 1250
Pyle Works Co., 44Ch;iD. 534 1514
Pyle Works (No. 2) (1891), 1
Ch. 173 1371, 1397
Q
Quackenboss v. Globe, etc.
Ins. Co., 177 N. Y. 71; 69
N. E. 223 408
Quebrada Ry. Co., 40 Ch. D.
363 536
Quee Drug Co. v. Plaut, 55
N. Y. App. Div. 87; 67
N. Y. Supp. 10 297
Queen Anne's Ferry, etc. Co.
V. Queen Anne's R. R. Co.,
148 Fed. 41 1568, 1573, 1582
Queen City Furniture, etc. Co.
V. Crawford, 127 Mo. 356;
30 S. W. 163 274, 283, 306
Queen's Hotel Co. (1900), 1
Ch. 792
Queensland Land & Coal Co.
(1894), 3 Ch. 181
Quentell v. N. Y. Cotton Ex-
change, 106 N. Y. Supp.
228
Quimby Freight Forwarding
Co., 121 Fed. 139 22, 44
Quin V. Havenor, 118 Wise.
53; 94N. W. 642
Quin's Case, 2 Megone 360
Quinby v. Consumers' Gas
Trust Co., 140 Fed. 362
Quincy v. Steel, 120 U. S. 241 ;
7 Sup. Ct. 520
Quincy Granite Quarries Co.,
147 Fed. 279
Quincy, etc. R. R. Co. v.
Humphreys, 145 U. S. 82;
12 Sup. Ct. 787 1564
1611, 1612, 1612
Quinn v. Madigan, 65 N. H. 8;
17 Atl. 976 1150
V. Safe Deposit, etc. Co.,
93 Md. 285; 48 Atl. 835;
53 L. R. A. 169 1150, 1152
Quintance v. Farmers' Mut.
Aid Ass'n, 25 Ky. Law
Rep. 1379; 77 S. W. 1121 1319
1591
1417
948
950
1419
838
969
44
1611,
clxvii
R
Rabe v. Dunlap, 51 N. J. Eq.
40; 25 Atl. 959
967
TABLK OF CASES
CThe references are to pages]
Racine County Nat. Bank v.
Ayers, 12 Wise. 512 66, 189,
1109
Eacine, etc. R. R. Co. v.
Farmers' L. & T. Co., 49 111.
331; 95 Am. Dec. 595 1487,
1624, 1626
Radebaugh v. Tacoma, etc. R.
R. Co., 8 Wash. 570; 36
Pac. 460 1396
Rafferty v. Donelly, 197 Pa.
St. 423 ; 47 Atl. 202 982, 1351
Raht V. Attrill, 106 N. Y. 423 ;
13N. E. 282; 60 Am. Rep.
456 1646, 1649
V. Sevier Mining, etc. Co.,
18 Utah 290; 54 Pac. 889
Railroad v. Knoxville, 98
Tenn. 1; 37 S. W. 883
V. Sneed, 99 Tenn. 1 ; 41
S. W. 364; 47S. W. 89
658,
665
440
483,
493
Railroad Co. v. Brown, 17
Wall. 445 1610
V. EUerman, 105 U. S. 166
961
V. Howard, 7 Wall. 392 1659
V. Orr, 18 Wall. 471 1590
V. Smith, 48 Oh. St. 219;
31 N.E. 743 449
V. Soutter, 13 Wall.
517 1637
Railroad Cos. v. Schutte, 103
U. S. 118 1434
Railroad Gazette v. Wherry,
58 Mo. App. 423 308
Railway Co. v. AUerton, 18
Wall. 233 487, 1189, 1189
V. Ailing, 99 U. S. 463 932
V. Iron Co., 46 Oh. St.
44; 18 N. E. 486; 1 L. R.
A. 412; 843,857
V. Sprague, 103 U. S. 756
1343, 1420, 1436, 1436,
1436, 1467
V. State, 49 Oh. St. 668;
32 N. E. 933 1052, 1163
Railway Equipment, etc. Co.
V. Lincoln Nat. Bank, 82
Hun (N. Y.) 8; 31 N. Y.
Supp. 44 592
Railway Time Tables Co., 62
L. J. Ch. 935 1404
Railway Timetables Co., 42
Ch. D. 98 171, 628
Railways Company General
V. Nevvtown El. St. Ry., 32
Pa. Co. Ct. 38 1528, 152S
733
1343
1239
1604
526,
1602
1396
485
clxvili
Rainford v. James Keith &
Blackman Co. (1905), 1 Ch.
296
V. James Keith & Black-
man Co. (1905), 2 Ch. 147
81, 87
Raleigh v. Fitzpatrick, 43 N.
J. Eq. 501; 11 Atl. 1
Raley v. Victor Co., 86 Minn.
438; 90 N. W. 973
Ralph V. Wisner, 100 Mich.
164; 58 N. W. 837
Ralston v. Bank of California,
112 Cal. 208; 44 Pac. 476
753, 1122
V. Washington, etc. Ry.
Co., 65 Fed. 557
Ramsdell v. Citizens EL, etc.
Co., 103 Mich. 89; 61N.W.
275
Ramsey v. Erie Ry. Co., 38
How. Pr. (N. Y.) 193
V. Gould, 57 Barb. (N.
Y.) 398 422,968
V. Peoria, etc. Ins. Co.,
55 111. 311 232, 233, 248'
V. Thompson Mfg. Co.,
116 Mo. 313; 22 S. W. 719
180, 180,182
V. Tod, 95 Tex. 614; 69
S.W. 133; 93 Am. St. Rep.
875 45, 47
Ramsgate Victoria Hotel Co. .
V. Montefiore, L. R. 1 Ex.
109 168
Ramskill v. Edwards, 31 Ch.
D. 100 1282, 1283, 1285,
1289, 1349, 1349, 1350, 1350
Ramwell's Case, 50 L. J. Ch.
827 630, 642, 642, 668
Ranee's Case, L. R. 6 Ch. 104 1093,
1265
Rand v. Columbia Nat. Bank,
94 Fed. 349; 36 C. C. A.
292 165
V. Hubbell, 115 Mass.
461; 15 Am. Rep. 121 497, 1146
Randall v. Van Vechten, 19
Johns. (N. Y.) 60; 10 Am.
Dee. 193
Randall Co. v. Glendenning
(Okl.), 92 Pac. 158
Randall, H. E., Ltd., ^^. Brit-
ish & American Shoe Co.
(1902), 2 Ch. 354 387, 387
Randolph v. Middleton, 26 N.
J. Eq. 543 1623
V. New Jersey, etc. R.
:i. Co., 23 N. J. Eq. 49 1639
398
406
TABLE OF CASES
[The references are to pages]
Randolph v. Wilmington, etc.
R. R. Co., U Phila. 502 (U. S.
C. C.) 1509
Randt Gold Mining Co.
(1904), 2 Ch. 468 669
V. New Balkis Eerstell-
ing, 85 L. T. 780; (1903) 1
K. B. 461; (1904) A. C. 165 668
V. Wainwright (1901), 1
Ch. 184 669, 1018
Ranger v. Champion Cotton-
Press Co., 51 Fed. 61 890,
894, 896, 907
Rankin v. Bush, 108 N. Y.
App. Div. 295; 95 N. Y.
Supp. 718 1368
V. Cooper, 149 Fed. 1010 1262,
1262, 1276, 1278, 1281, 1288
V. Fidelity Trust Co., 189
U. S. 242; 23 Sup. a. 553
V. Hop, etc. Exchange
Co., 20 L. T. 207
V. McCuUough, 12 Barb.
(N. Y.) 103
V. Southwestern Brew-
ery, etc. Co. (N. Mex.), 73
Pac. 612
V. Southwestern Brew-
ery, etc. Co. (N. Mex.), 73
Pac. 614
Rannels v. Rowe, 145 Fed.
296; 74C. C. A. 376
Ransom v. Stonington Sav.
Bank, 2 Beasl. (N. J.) 212
Raphael v. Rio Grande West-
em Ry. Co., 132 Fed. 12;
65 C. C. A. 632
Rapid Transit Ferry Co., 43
N. Y. Supp. 538; 19 N. Y.
Misc. 409
, Re, 15 N. Y. App. Div.
530; 44 N. Y. Supp. 539
699,
807
193
808
952
971
237
393
1637
1011
1011,
1032
Rascover v. American Lin-
seed Co., 136 Fed. 341; 68
C. C. A. 11 88, 89
Rassbeck v. Desterreicher, 55
How. Pr. (N. Y.) 516 126
Rathbone v. Ayer, 105 N. Y.
Supp. 1041 203, 205, 636
V. Tioga Nav. Co., 2
Watts & Serg. (Pa.) 74 278, 302
Rathbun v. Snow, 123 N. Y.
343; 25 N. E. 379; 10 L.
R. A. 355 591
Rau V. Seidenberg, 53 N. Y.
Misc. 386; 104 N. Y. Supp.
798 786
Rau V. Union Paper Mill Co.,
95 Ga. 208; 22 S. E. 146 304
Raub V. Blairstown Creamery
Ass'n, 56 N. J. Law 262;
28 Atl. 384 408, 1371
Ravenswood, etc. Ry. Co. v.
Woodyard, 46 W. Va. 558;
33 S. E. 285 1259, 1298
Raymond v. Clark, 46 Conn.
129 1510, 1512
V. Farmers', etc. Ins. Co.,
114 Mich. 386; 72 N. W.
254 577
Rayner v. Rayner (1904), 1 Ch.
176 424
Raynolds v. Diamond Mills
Paper Co. (N. J.), 60 Atl.
941 979, 1112, 1113, 1321,
1322
R. Bolton & Co. (1894), 3
Ch. 356 1172, 1173
Read v. Buffum, 79 Cal. 77;
21 Pac. 555; 12 Am. St.
Rep. 131 1376
V. Head, 6 Allen (Mass.)
174 1091, 1155
V. Joannon, 25 Q. B. D.
300 1395
V. Memphis Gayoso Gas
Co., 9 Heisk. (Tenn.) 545 490,
491, 1197
Reading Trust Co. v. Reading
Iron Works, 137 Pa. St.
282; 21 Atl. 169, 170 507, 508
Ready v. Smith, 170 Mo. 163;
70 S. W. 484 1315
Reagan v. First Nat. Bank,
157 Ind. 623; 61 N. E. 575 452
Real Estate Trust Co. v.
Bird, 90 Md. 229; 44 Atl.
1048 499, 501, 504, 505, 505,
507, 695, 751
V. Perry County R. R.
Co., 213 Pa. 57; 62 Atl.
25 1628
V. Union Trust Co., 102
Md. 41; 61 Atl. 228 1452
Receivership of (Merchants
Nat. Bank v.) Minnesota
Thresher Mfg. Co., 90 Mum.
144; 95 N. W. 767
Rectorw. Hartford Deposit Co.
190 111.380; 60N. E. 528
Redfield v. Baltimore, etc. R.
R. Co., 124 Fed. 929
Redhead v. Iowa Nat. Bank,
123 Iowa 336; 98 N. W.
806
35,
39,43
845
975
1116
clxix
TABLE OF CASES
[The references are to pages]
Redhead v. Iowa Nat. Bank,
127 Iowa 572; 103 N. W.
796 1110,1116,1116,1122,1123,
1135
Redkey Citizens, etc. Co. v.
Orr, 27 Ind. App. 1; 60 N.
E. 716 , 650, 651
Red Men's Mutual Relief
Ass'n, 10 Phila. 546
Red River Line, 115 La. 867;
40 So. 250
Reed v. Bank of Newburgh,
6 Paige (N. Y.) 337
V. Boston Machine Co.,
141 Mass. 454; 5 N. E. 852
V. Copeland, 50 Conn.
472; 47 Am. Rep. 663
V. Fleming, 102 111. App.
668
V. Helois Carbide, etc.
Co., 64 N. J. Eq. 231; 53
Atl. 1057
V. Jones, 6 Wise. 680
V. Richmond Street R.
R. Co., 50 Ind. 342 ' 104, 105
V. Schmidt, 24 Ky. Law
Rep. 1889; 72 S. W. 367
V. State, 15 Oh. Rep. 217
Reed & McCormick v. Gold,
102 Va. 37; 45 S. E. 868
Reed Bros. Co. v. First Nat.
Bank, 46Nebr. 168; 64 N.
W. 701
Reed's Appeal, 122 Pa. St.
565; 16 Atl. 100 1408, 1497
Reeder v. Lewis & Mason, etc!
Co., 7 Ky. Law Rep. 363 1370
Reese v. Bank of Commerce,
14 Md. 271; 74 Am. Dec.
536 770, 773, 775, 776
V. Bank of Montgomery
County, 31 Pa. St. 78; 72
Am. Dec. 726 503, 507, 510
Reese River Mining Co. v.
Smith, L. R. 4 H. L. 64 178, 184
Reeve v. Harris (Teim.), 50
S. W. Rep. 658 1238, 1247
Regent's Canal Ironworks
Co., 3 Ch. D. 43 1400, 1405,
1524, 1526
3 Ch. D. 411 1599, 1646
Regents of Univ. of Md. v.
Calvary M. E. Church, 104
Md. 635 849
V. Williams, 9 G. & J.
fMd.') 365; 31 Am. Dec.
72 1179, 1182
Regester v. Medoalf, 71 Md.
528; 18 Atl. 966
31
1371
1047
444
712
408
452
1063
1665
230
154
297
307
clxx
Regina v. Aldham, 15 Jur.
1035 996
V. Amaud, 9 Q. B. 806 419
V. Government Stock In-
vestment Co., 3 Q. B-. D.
442 1039, 1045, 1249
V. Grand Canal Co., 1 Ir.
L. R. 337 902
V. Langton, 2 Q. B. D.
296 230
V. Liverpool, etc. Ry.
Co., 21 L. J. Q. B. 284 751
V. London, etc. Docks
Co., 44 L. J. Q. B. 4 901, 906
V. Maiiquita, etc. Min-
ing Co., 1 E. & E. 289 895, 899
V. Saddlers' Co., 10 H. L.
Cas. 404 1167
V. Staples, 19 Vict. L. R.
47 915
V. Tankard (1894), 1 Q.
B. 548 260
— — V. Wilts, etc. Navigation,
29 L. T. 922 902
Regina ex rel. Blackbom v.
Midland Counties, etc. Ry.,
15 Ir. Com. L. 514 708, 708, 708
Regina ex rel. Crea v. Midland
Counties, etc. Ry., 15 Ir.
Com. L. 525 745
Regina ex rel. May v. Darling-
ton Free Grammar School,
14 L. J. Q. B. 67 565
Rehbein v. Rahr, 109 Wise.
136; 85 N. W. 315 39, 120,
121, 203
Rehbei;g v. Tontine Surety
Co., 131 Mich. 135; 91 N.
W. 132 853
Reichwald v. Commercial
Hotel Co., 106 m. 439 286,
286, 1187, 1208
Reid V. Bank of Mobile, 70
Ala. 199 1423, 1433
V. DeJarnette, 123 Ga.
787; 51S. E. 770 617
V. Detroit Ideal Paint
Co., 132 Mich. 528; 94 N.
W. 3 494
V. Eatonton Mfg. Co., 40
Ga. 98; 2 Am. Rep. 563 650,
1129
V. Explosives Co., 19 Q.
B. D. 264 1242, 1609, 1613,
1614
V. Silke, 31 Vict. L. R.
641 1142
Reilly v. Oglebay, 25 W. Va.
36 1000, 1006, 1083
TABLE OF CASES
[The references are to pages]
Reilly v. Union Protestant In-
firmary, 87 Md. 664; 40
Atl. 894 380
Reinach v. Meyer, 55 How.
Pr. (N. Y.) 283 1672, 1673
Reinhard v. Virginia Lead
Mining Co., 107 Mo. 616;
18 S. W. 17 254
Reinhardt v. Interstate Tel.
Co. (N. J.), 63 Atl. 1097 1529,
1593, 1594, 1596
Reinehart v. Augusta, etc. Co.,
94 Fed. 901; 36 C. C. A.
541 1573
Relender v. Riggs (Colo.), 79
Pac. 328 1323, 1344
Remington Automobile &
Motor Co., 139 Fed. 766;
153 Fed. 345 631, 636, 647,
649
Remington Paper Co. v. Lon-
don Ass. Co., 12 N. Y. App.
Div. 218; 43 N. Y. Supp.
431 1196, 1381
Rendall v. Crystal Palace Co.,
4 K. & J. 326 825
Renn v. United States Ce-
ment Co. (Ind.), 73 N. E.
269 105, 111
Rennie v. Clarke, 5 Ex. 292 308
Reno Oil Co. v. Culver, 60 N.
Y. App. Div. 129; 69N.Y.
Supp. 969 735, 1263
Reno Water Co. v. Leete, 17
Nevada, 203; 30 Pac. 702
1373, 1382
Rennsalaer, etc. Co. v. Barton,
16 N. Y. 457 601
Renssellaer, etc. R. R. Co. v.
Miller, 47 Vt. 146 1490
Republic Life Ins. Co. v.
Swigert, 135 111. 150; 25
N. E. 680; 12 L. R. A. 328 517
Reuss V. Bos, L. R. 5 H. L.
176 120, 262, 688
Reversionary Interest Soc.
(1892), 1 Ch. 615 136
Rex V. Amery, 1 T. R. 575 1011
V. Ashwell, 12 East 22 569,
569, 583
V. Babb, 3 T. R. 579 889
V. Bank of England, 2 B.
& Aid. 620 894,1113
V. Bank of England, 2
Doug. 525 749
V. Bumstead, 2 B. & Ad.
699 565
V. Capper, 5 Price 217 423
V. Clear, 4 B. & C. 899 901
Rex V. College of Physicians,
5 Burr. 2740 562
V. Company of Fisher-
men, 8 T. R. 352 561, 561,
570, 580, 580
V. Cutbush, 4 Burr. 2204 103 1
V. Dodd, 9 East 616 7
V. Merchant Tailors' Co.,
2 B. & Ad. 115 892, 894
V. Registrar Joint Stock
Cos. (1904), 2 Ir. 634 59, 114,
267, 370, 370
V. Theodorick, 8 East
543 1212
V. Wardens of Coopers'
Co., 7 T. R. 543 570
V. Webb, 14 East 406 7
V. Windham, Cowp. 377 1376
V. Wilts, etc. Navigation,
3 Ad. & El. 477 907, 907, 908
Reyburn v. Consumers' Gas
Co., 29 Fed. 561 1560, 1566
Reynal v. Thebaud, 3 N. Y.
Misc. 187; 23 N. Y. Supp.
615 1446
Reynell v. Lewis, 15 M. & W.
517 274, 275, 276, 308, 308
Reynolds v. Bank of Mt. Ver-
non, 6 N. Y. App. Div. 62;
39N. Y. Supp. 623; 158 N.
Y. 740 ; 53 N. E. 1 131 574, 745,
1111, 1331
V. Bridenthal, 57 Nebr.
280; 77N.W.658 1017,1022,
1250
V. Georgia State Bldg.,
etc. Ass'n, 102 Ga. 126; 29
S. E. 187 562
V. Supreme Council, 192
Mass. 150; 78N. E. 129; 7
L. R. A. N. s. 1154 586
V. Touzalin Imp. Co., 62
Nebr. 236; 87 N. W. 24 754
Reynolds, etc. Co. v. Eacock,
27 Ind. App. 459; 61 N. E.
732 1560
Rhawn v. Edge Hill Furnace
Co., 201 Pa. 637; 51 Atl.
360 875, 1453
Rhey v. Ebensburg, etc. Co.,
27 Pa. St. 261 198
Rhinelander v. Farmers' L. &
T. Co., 172 N. Y. 519; 65
N. E. 499 1488, 1489
Rhoads v. Hoernerstown
Bldg., etc. Ass'n, 82 Pa. St.
180 117
Rhode Island Locomotive
Works V. Continental Trust
clxxi
TABLE OP CASES
[The references are to pages]
Co., 108 Fed. 5; 47 C. C. A.
147 1564, 1567
Rhodes v. Piper, 40 Ind. 369 107
Ribon V. Railroad Cos., 16
WaU. 446 977, 1660
Rice V. Gilbert, 173 111. 348;
50 N. E. 1087 803
V. National Bank, 126
Mass. 300 222
V. Rockefeller, 134 N. Y.
174; 31N. E. 907; 30 Am.
St. Rep. 658; 17 L. R. A.
237 745, 745, 751, 801
V. Shealey, 71 S. Car.
161; 50 S. E. 868 1449
V. St. Paul, etc. R. R.
Co., 24 Minn. 464 1584, 1602
Rice's Appeal, 79 Pa. St. 168 315,
1416
Rich V. Boyce, 39 Md. 314 807
Richard Smith & Co. (1901),
1 Ir. 73 1430
Richards v. Attleborough
Nat. Bank, 148 Mass. 187;
19 N. E. 353; 1 L. R. A.
781 1176, 1298
V. Chesapeake, etc. R. R.
Co., 1 Hughes 28 1587
V. Dover, 61 N. J. Law
400; 39 Atl. 705 59
V. Home Assurance
As?'n, L. R. 6 C. P. 591 167, 168
V. Merrimack, etc. R. R.
Co., 44 N. H. 127 1496
V. Minnesota Sav. Bank,
75 Minn. 196; 77 N. W.
822 132, 387
V. Overseers of Kidder-
minster (1896), 2 Ch. 212 1395
Richardson v: Buhl, 77 Mich.
632; 43 N. W. 1102; 6
L. R. A. 457 263
V. Delaware Loan Co., 9
Houst. (Del.) 354; 32 Atl.
980 427, 742
V. Devine (Mass.), 79 N.
E. 771 571, 593
V. Emmett, 61 N. Y.
App. Div. 205; 70 N. Y.
Supp. 546 690, 713
V. Green, 133 U. S. 30;
10 Sup. a. 280 1317, 1405,
1413
V. Longmont Supply
Ditch Co., 19 Colo. App.
483; 76 Pac. 546 687, 750, 803
V. Pitts, 71 Mo. 128 254
V. Richardson, 75 Me.
570; 46 Am. Rep. 428 1143
Richards v. St. Joseph Iron
Co., 5 Blackf. (Ind.) 146;
33 Am. Dec. 460 912
V. Treasure Hill, etc. Co.,
23 Utah 366; 65 Pac. 74 635
V. Union Congregational
Soc, 58 N. H. 187 585
V. Vermont, etc. R. R.
Co., 44 Vt. 613 433, 457, 465,
466, 1003, 1008
Riche V. Ashbury Ry., etc.
Co., L. R. 9 Ex. 224 824
Richelieu Hotel Co. v. Inter-
national, etc. Encamp-
ment Co., 140 111. 248; 29
N. E. 1044; 33 Am. St.
Rep. 234 81, 166, 167, 209
Richie v. Cralle, 108 Ky. 483;
56 S. W. 963 1424
Richmond v. Irons, 121 U. S.
27; 7 Sup. Ct. 788 696, 746
V. Richmond, 108 N. Y.
Supp. 298 503, 1150
Richmond Factory Ass'n v.
Clarke, 61 Me. 351 128, 215
Richmond Guano Co. v.
Farmers' Cotton, etc. Co.,
126 Fed. 712 ; 16 C. C. A. 630 840
Richmond Street R. R. Co. v.
Reed, 83 Ind. 9 215
Richmond, etc. R. R. Co. v.
Snead, 19 Gratt. (Va.) 354 1373
Richmond's Case, 4 K. & J.
305 492, 663
Richmondville Mfg. Co. v.
Prall, 9 Conn. 487 588, 700
Richter v. Jerome, 123 U. S.
233; 8 Sup. Ot. 106 1485
Ricker v. American L. & T.
Co., 140 Mass. 346; 5N. E.
284 1541
1). Hall, 69N. H. 592; 45
Atl. 556 1279
V. Larkin, 27 111. App.
625 123
Rickerson Roller Mill Co. v.
Farrell, etc. Co., 75 Fed.
554; 23 C. C. A. 302 627, 628,
630
Rickert v. White, 105 N. Y.
Supp. 653 1333
Rickett V. Sharps, 45 Ch. D.
286 24
Riddle v. County of Bedford,
7 S. & R. (Pa.) 386 1228
Rider v. Alton, etc. R. R. Co.,
13 111. 516
V. Morrison, 54 Md. 429
1116
528,
619
oljpcii
TABLE OF CASES
[The references are to pages]
Rider v. Union Rubber Co.,
5 Bosw. (N. Y.) 85 1244
Ridgefield, etc. R. R. Co. v.
Reynolds, 46 Conn. 375 189
Ridgely v. Richard, 130 Fed.
387 890
Ridgway v. Farmers' Bank,
12Serg. &R. (Pa.) 256; 14
Am. Dec. 681 913, 917
Ridley v. Plymouth Baking
Co., 2 Ex. 711 395, 860, 1213,
1222
Rielle v. Reid, 26 Ont. App.
54 882, 887
Rieger, Kapner & Altmark,
157 Fed. 609 1085, 1086
Riemami v. Tyroler, etc.
Verein, 104 111. App. 413 380,
381
Riesterer v. Horton Land, etc.
Co., 160 Mo. 141; 61 S. W.
238 1006, 1069
Rigg V. Reading, etc. Ry. Co.,
191 Pa. St. 298; 43 Atl.
212 786
Riggs V. Cragg, 26 Hun (N.
Y.) 89 1150, 1151
V. Pennsylvania R. R.
Co., 16 Fed. 804 1400, 1499
Riker v. Leo, 133 N. Y. 519;
30 N. E. 598 35
Riley v. Hampshire, etc.
Bank, 164 Mass. 482; 41
N. E. 679 810
V. Loma Vista Ranch
Co. (CaL), 82 Pac. 686 1310
V. Packington, 2 C. P.
536 308
Rio Grande Cattle Co. v.
Burns, 82 Tex. 50; 17S.W.
1043 753, 753
Ripley v. Paper Bottle Co., 57
L. J. Ch. 327 662
Risley v. Indianapolis, etc.
R. R. Co., 62 N. Y. 240 1342,
1307
Ritchie v. McMullen, 79 Fed.
522; 25 C. C. A. 50 1350, 1353
V. Vermillion Mining Co.,
4 Ont. L. R. 588 71, 1080
Ritso's Case, 4 Ch. D. 774 169
Rivanna Nav. Co. v. Daw-
sons, 3 Gratt. (Va.) 19 524
Riverhead, etc. R. R. Co., 36
N. Y. App. Div. 514; 55
N. Y. Supp. 938 134
Rives V. Montgomery South
Plank-Road Co., 30 Ala. 92 994,
1195
1634
783
394
Roanoke Street Ry. Co. v.
Hicks, 96 Va. 510; 32
S. E. 295 393, 1557
Robbins v. Bangor Ry., etc.
Co., 100 Me. 496; 62 Atl.
136; 1 L. R. A. n. s. 963 284
Robert Watson & Co. (1899),
2 Ch. 509 640, 640
Roberts v. Central Trust Co.,
128 Fed. 882; 63 C. C. A.
220
V. Crowe, L. R. 7 C. P. 629
V. Deming Woodworking
Co., Ill N. Car. 432; 16
S. E. 415
V. Denver, etc. R. R. Co.,
8 Colo. App. 504; 46 Pac.
880 1515, 1528, 1528, 1551,
1551
V. Roberts-Wicks Co.,
102 N. Y. App. Div. 118;
92 N. Y. Supp. 387 541, 546
V. Roberts- Wicks Co.,
184N.Y.257; 77N. E. 13;
112 Am. St. Rep. 607 439, 469,
537, 543, 546, 1092
V. Stanton Co., 94 Pac.
647
V. Sykes, 30 Barb. (N.
Y.) 173
V. Washington Nat.
Bank, 11 Wash. 550; 40
Pac. 225
Ex parte, 1 Drewry 204
Roberts Mfg. Co. v. Schlick,
62 Minn. 332; 64 N. W.
826 307-, 309
— — V. Wright, 62 Minn. 337;
64 N. W. 827 307, 309
Robertson v. Bucklen & Co.,
107 111. App. 369 1083, 1310
■!). Bullions, 11 N. Y. 243 1184
V. De Brulatour, 188
N. Y. 301; SON. E. 938 503,
1132, 1151, 1445, 1446
V. Parks, 76 Md. 118; 24
Atl. 411 234
Robinson v. Alabama, etc.
Mfg. Co., 48 Fed. 12 1585, 1587,
1593, 1593
V. Blood (CaL), 91 Pac.
258
V. Bumell's Vienna Bak-
ery Co. (1904), 2 K. B. 624
V. Chartered Bank, 1 Eq,
32 764, 765, 765
V. Dolores, etc. Canal
Co., 2 Colo. App. 17; 29
Pac. 750 1407
1239
811
1311
165
1201
1546
clxxiii
TABLE OF CASES
[The references are to pages]
Robinson v. First Nat. Bank
(Tex.), 79 S. W. 103 386, 387
V. FirstNat. Bank (Tex.),
82 S. W. 505 379, 380
V. Holbrook, 148 Fed.
107 78, 79
V. Iron Ry. Co., 135 U. S.
522; 10 Sup. Ct. 907 1485
V. Jenkins, 24 Q. B. D.
275 423
■». Kirkwood, 91 111. App.
54 1617, 1618
V. Montgomeryshire
Brewing Co. (1896), 2 Ch.
841 1405, 1524, 1524
V. Muir (Cal.), 90 Pac.
521 511
V. National Bank of New
Berne, 95 N. Y. 637 695, 753,
1122, 1130, 1131
V. Philadelpliia, etc. R.
R. Co., 28 Fed. 340 1660, 1660
V. Smith, 3 Paige (N. Y.)
222; 24 Am. Dec. 212 974
V. Southern Nat. Bank,
180 U. S. 295; 21 Sup. Ct.
383 74
V. West Virginia Loan
Co., 90 Fed. 770 970
Robinson Mineral Spring Co.
V. DeBautte, 50 La. Ann.
1281; 23 So. 865 1074
Robinson Printing Co. v.
Chic (1905), 2 Ch. 123 1580
Robinson Reduction Co. v.
Johnson, 10 Colo. App. 135;
50 Pac. 215 912, 912, 1196
Robinson's Case, 4 Ch. 322 166,167
Robinson's Trust, Be (Pa.),
67 Atl. 775 1137
Robotham v. Prudential Ins.
Co., 64 N. J. Eq. 673; 53
Atl. 842 57, 58, 75, 77, 1306,
1326
Robson V. Smith (1895), 2
Ch. 118 1546, 1547, 1547
Rochester Distilling Co. v.
Rasey, 142 N. Y. 570; 37
N. E. 632; 40 Am. St. Rep.
635 1503
Rochester District Tel. Co.,
40 Hun (N. Y.) 172 1015, 1039,
1064
Rochester Trust, etc. Co. v.
Oneonta, etc. R. R. Co., 107
N. Y. Supp. 237 1646, 1649,
1653
Rochester, etc., Land Co. v.
Raymond, 158 N. Y. 576;
clxxiv
53 N. E. 507; 47 L. R. A.
246 617, 619
Rochester, etc. R. R. Co., 110
N. Y. 119; 17 N. E. 678 76
Rock River Bankv. Sherwood,
10 Wise. 230; 78 Am. Dec.
669 865, 868
Rockford, etc. R. R. Co. v.
Sage, 65 111. 328; 16 Am.
Rep. 587 293, 1237, 1246
Rockhold V. Canton Masonic
Benev. Soc, 129 111. 440;
21 N. E. 794; 2 L. R. A.
420 35, 42, 851
Rockwell V. Elkhom Bank, 13
Wise. 653 63, 66
Rockwith ex rel. Kerns v.
State Road Bridge Co., 108
N. W. 785 (Mich.) 107
Rodger Ballast Co. v. Omaha,
etc. R. Co., 154 Fed. 629 1561,
1563, 1563, 1564, 1567
Rodney v. Southern R. R.
Ass'n, 3 N. Y. St. Rep. 564;
14 Daly 70 1239
Roebling's Sons Co., John A.
V. Barre, etc. Power Co., 76
Vt. 131 ; 56 Atl. 530 1213, 1215
Roedde v. News-Advertiser
Pub. Co., 4 Brit. Columbia
7 80
Roehler v. Mechanics' Aid So-
ciety, 22 Mich. 86 580
Rogers v. Burr, 105 Ga. 432;
31 S. E. 438; 70 Am. St.
Rep. 50 174
V. Citizens' Nat. Bank,
93 Md. 613; 49 Atl. 843 455
V. Gladiator, etc. Co.
(S. Dak.), 113 N. W. 86 197, 645
V. Hastings, etc. Ry. Co.,
22 Minn. 25 1247
V. Huntingdon Bank, 12
Serg. & R. (Pa.) 77 776, 776
V. Jewell Belting Co.,
184 111. 574 84
V. Mobile, etc. R. R. Co.,
12 Am. & Eng. R. R. Cases
442 (Tenn.) 1609
V. Nashville, etc. Ry.
Co., 91 Fed. 299; 33 C. C.
A. 517 836, 935, 942, 951, 1026
1077, 1522
V. N. Y., etc. Land Co.,
134N. Y. 197; 32N. E. 27 288
V. Oxford, etc. Ry. Co.,
2 De G. & J. 662 965, 966
V. Pell, 154 N. Y. 518;
49 N. E. 75 1187, 1315, 1374
TABLE OF CASES
[The references are to pages]
Sogers V. Penobscot, 154 Fed.
606 338, 338
V. Southern Fiber Co.
(La.), 44 So. 442 737, 739
V. Stevens, 8 N. J. Eq.
167 716
V. Wheeler, 43 N. Y.
598 1582, 1582, 1582
Rogers & Co. v. British &
Colonial Ass'n, 68 L. J. Q.
B. 14 1529, 1594
Rogers Co., R. W. v. Wm.
Rogers Mfg. Co., 70 Fed.
Rep. 1017; 17 C. C. A. 576 376
Rogers' Case, 3 Ch. 633 166, 189
Rogers, Re, 161 N. Y. 108;
55 N. E. 393 471, 1154
Rogers' Trusts, Re, 1 Dr. &
Sm. 338
Rogers, etc. Works v. South-
em R. R. Ass'n, 34 Fed,
278
Rogersville, etc. R. R. Co. v,
Kyle, 9 Lea (Tenn.) 691
1443
1433
1522,
1597
Roland v. Lancaster, etc.
BaAk, 135 Pa. St. 598; 19
Atl. 951
Rolling Stock Co. v. Atlantic,
etc. R. R. Co., 34 Oh. St.
450; 32 Am. Rep. 380
Rollins V. Clay, 33 Me. 132
V. Co-operative Bldg.
Bank, 98 N. Y. App. Div.
606; 90 N. Y. Supp. 631
V. Shaver Wagon, etc.
Co., 80 Iowa 380; 45N. W.
1037; 20 Am. St. Rep. 427
1206, 1323
Romare v. Broken Arrow, etc.
Mining Co., 114 Fed. 194
811
1306
1188
584
517,
1486,
1603
Rome, etc. R. R. Co. v. Sibert,
97 Ala. 393; 12 So. 69
Romford Canal Co., 24 Ch. D.
85 1068, 1407
Rommel v. Summit Branch
Coal Co., 18 Pa. Super. Ct.
482
Rondot V. Rogers Tp., 99 Fed.
202; 39 C. C. A. 462
1567
1416
1433,
1440
Roney, Ex parte, 33 L. J. Ch.
731 173
Rood V. Railway Pass., etc.
Ass'n, 31 Fed. 62 577, 660
V. Wharton, 67 Fed. 434 647
Roofing Contractors' Ass'n,
200 Pa. St. 1 1 1 ; 49 Atl. 894 46
1359
1248
919
clxxv
Roosevelt v. Nashville, etc.
Ry. Co., 128 Fed. 465 70, 85
Roots V. Williamson, 38 Ch.
D. 485 696, 707, 710, 710
Roper V. Castell & Brown
(1898), 1 Ch. 315 1534, 1547
Rorke v. Thomas, 56 N. Y.
559
Rose V. Carbonating Co., 60
Mo. App. 28
V. Independent Chevra
Kadisho (Pa.), 64 Atl. 401
V. Merchants' Trust Co.,
96 N. Y. Supp. 946 361, 361
Rose Hill, etc. Co. v. People
exrel. Lawless, 115 111. 133;
3 N. E. 725 147, 219, 230, 231,
231, 553
Rose Hill Cemetery Co. v.
Dempster, 223 111. 567; 79
N. E. 276 1073, 1310, 1323
Roseborough v. Shasta River
Canal Co., 22 Cal. 556
Rosemond v. Northwestern,
etc. Register Co., 62 Minn.
374; 64 N. W. 925
Rosenback v. Salt Springs
Nat. Bank, 53 Barb. (N. Y.)
495
Rosenfeld v. Einstein, 46 N. J.
Law 479 894, 897, 907
Rosenkranz v. Lafayette, etc.
Ry. Co., 18 Fed. 513
Ross V. Crockett, 14 La. Ann.
811'
V. Estate Investment Co.,
3 Eq. 122
V. Sayler, 104 111. App. 19
V. Southwestern R. R.
Co., 53 Ga. 514
Ross Oil, etc. Co. v. Eastham
(Kans.), 85 Pac. 531
Ross, Ex parte, 59 L. T. 291
Rotch's Wharf Co. v. Judd,
108 Mass. 224
Roth Tool Co. V. Champ
Spring Co., 93 Mo. App.
530; 67 S. W. 967
Rothchild v. Memphis, etc.
R. R. Co., 113 Fed. 476; 51
C. C. A. 310
Rotherham Alum Co., Re, 25
Ch. D. 103 282, 293
Rouede ti. Jersey City, 18 Fed.
719 1436
Rough V. Breitung, 117 Mich.
48; 75 N. W. 147 1071, 1072
Roundwood Colliery Co.
(1897), 1 Ch. 373 1547, 1548
1383
1382
571
1475
1167
186
354
711
1377
1205
302
304
1081
TABLE OF CASES
[The references are to pages]
"^
Rouse V. Harry, 55 Kans. 589;
40 Pac. 1007
V. Redinger, 1 Kans.
App. 355; 41 Pao. 433 1618
Routledge, George & Sons
(1904), 2 Ch. 474 1418, 1473
Rowe V. White, 112 N. Y. App.
Div. 688; 98 N. Y. Supp.
729
-^, Re (1904), 2 K. B. 489
Rowe's Trustee's Claim
(1906), 1 Ch. 1
Rowland v. Header Furniture
Co., 38 Oh. St. 269 250, 250, 251
V. P. P. Carroll Loan, etc.
Co.(Wash.), 87 Pac. 482
Rowley v. Unwin, 2 K. & J. 138
Roxburg Press (1899), 1 Ch.
210
Roxbury Lodge v. Hocking,
60 N. J. Law 439; 38 Atl.
693 590, 949
Roy & Co. V. Scott, Hartley,
etc. Co., 11 Wash. 399; 39
Pac. 679
Royal Bank v. Grand Junction
R. R. Co., 100 Mass. 444;
97 Am. Dec. 115
V. Grand Junction R. R.
Co., 125 Mass. 490
Royal Bank of India'a Case, 4
Ch. 252 74, 74, 77, 91, 117, 591,
705, 706, 707
Royal British Bank, 26 L. J.
Ch. 545 763
V. Turquand, 6 E. & B.
327 739, 1219, 1220, 1220
Royal Trust Co. v. Washburn,
etc. Ry. Co., 113 Fed. 531 1617,
1629, 1629
V. Washburn, etc. Ry.
Co., 120 Fed. 11; 57
C. C. A. 31 1646
Rozecrans Gold Mining Co. v.
Morey, HI Cal. 114; 43
Pac. 585 1169, 1225, 1343
Ruben v. Great Fingall Con-
solidated (1906), A. C. 439 739,
740
Rubino v. Pressed Steel Car
Co. (N. J.), 53 Atl. 1050 78, 78,
78
Ruby Chief, etc. Co. v. Gurley,
17 Colo. 199; 29 Pac. 668
V. Prentice, 25 Colo. 4;
52 Pac. 210
Ruck V. Caledonia Silver
Mining Co. (Cal.), 92 Pac.
194
1619
1135
768
624
1374
815
642
1314
403
1311
298
1246
603
338
998
304
1569
665
1371
Rudd V. Robinson, 126 N. Y.
113; 26N.E. 1046; 22 Am.
St. Rep. 816; 12 L. R. A.
473 914, 920, 1276
Rudigeri). Coleman, 112 N. Y.
App. Div. 279
Rudolph V. So. Beneficial
League, 23 Abb. N. C.
(N. Y.)199; 7N. Y. Supp.
135
, Ex parte, 11 W. R. 806
600, 766, 767
Ruettell V. Greenwich Ins.
Co. (N. Dak.), 113 N. W.
1029
Ruhlender v. Chesapeake, etc.
R. Co., 91 Fed. 5; 33 C. C.
A 299
Rule V. Jewell, 18 Ch. D. 660
Rumball v. Metropolitan
Bank, 2 Q. B. D. 194 201, 688
Rumbough v. Southern Imp.
Co., 112 N. Car. 751; 17 S.
E. 536; 34 Am. St. Rep.
528
Rumsey v. People's Ry. Co.,
91 Mo. App. 202 1515, 1608
Ruse V. Bromberg, 88 Ala.
619; 7 So. 384 625
Rush V. Halcyon Steamboat
Co., 84 N. Car. 702 234
Russell V. Bristol, 49 Conn.
251 176, 1093
V. Cassidy, 108 Mo. App.
577; 84 S. W. 171 844
V. East Anglian Ry. Co.,
3 Mac. & G. 124 1393, 1500
V. Easterbrook, 71 Conn.
50; 40 Atl. 905 616, 748
V. McLellan, 14 Pick.
(Mass.) 63
V. North American
Benefit Ass'n, 116 Mich.
699; 75N. W. 137
V. Rock Run Fuel Gas
Co., 184 Pa. St. 102; 39
Atl. i21 174, 1079, 1083
V. Temple, 3 Dane's
Abridgment (Mass.) 108
V. Wakefield Water-
works Co., 20 Eq. 474
V. Washington Sav.
Bank, 23 App. D. C. 308
873
577
420
976
clxxvi
Russian Petroleum, etc. Co. v.
London Investment Trust
(1907), 2 Ch. 540
Russian Spratt's Patent
(1898), 2 Ch. 149
591,
1372
1473
1514
TABLE OF CASES
[Tbe references are to pages]
Rutherford v. Hill, 22 Oreg.
218; 29 Pac. 546; 29 Am.
St. Rep. 596; 17 L. R. A.
549
Rutherford's Case, 4 A. C. 548
Rutland Electric Light Co. v.
Bates, 68 Vt. 579; 35 Atl.
480; 54Am. St. Rep. 904
252
800
1345,
1345
Rutland, etc. Co. v. Proctor,
29 Vt. 93 847
Rutland, etc. R. R. Co. v.
Thrall, 35 Vt. 536 438, 602,
603, 610, 611, 626, 658, 661,
667, 1108
Rutledge, Ex parte, 1 Harp.
Eq. (S, Car.) 65; 14 Am.
Dec. 696 1114, 1137, 1147
Rutten V. Union Pac. Ry. Co.,
17 Fed: 480 1677
R. W. Rogers Co. v. Wm.
Rogers Mfg. Co., 70 Fed.
Rep. 1017; 17 C. C. A. 576 376
Ryan v. Farmers' Bank, 5
Kans. 658
V. Hays, 62 Tex. 42
226
1610,
1620
V. Leavenworth, etc. Ry,
Co., 21 Kans. 365 963, 1134
1304, 1333 1346,
V. Martin, 91 N. Car. 464 233
V. McLane, 91 Md. 175;
46 Atl. 340; 80 Am. St.
Rep. 438; 50 L. R. A. 501 786
V. Williams, 100 Fed. 172 947
1298, 1299
Ryland v. HoUinger, 117 Fed.
216 151, 220, 274
Rylander v. Sheffield, 108 Ga.
Ill; 34 S. E. 348 1324, 1344
S. Abrahams & Sons (1902), 1
Ch. 695 1498
Sabin v. Bank of Woodstock,
21 Vt. 353 775
Sabine Tram Co. v. Bancroft
& Sons, 16 Tex. Civ. App.
170; 40S.W.837 79
Sabre v. United Traction, etc.
Co., 156 Fed. 79 876, 963, 967,
976
Sacramento Bank v. Copsey,
133 Cal. 663; 66 Pac. 8,
205 , 1296
Sacramento, etc. R. R. Co. v.
Superior Court, 55 Cal. 453 1600
Sadgrove v. Bryden (1902), 1
Ch. 318
1041
Sadler v. Worley (1894), 2 Ch.
170 1622
Sage V. Central R. R. Co., 99
U. S. 334 1558, 1622, 1623,
1625, 1628, 1675
V. Culver, 147 N. Y. 241;
41 N. E. 513 935
V. Memphis, etc. R. R.
Co., 125 U. S. 361; 8 Sup.
Ct. 887 1517 1517, 1528
V. Shore Line Ry. Co., 2
New Brunsw. Eq. 321 1649
— — , Be, 70 N. Y. 220 903, 906
Sagory V. Dubois, 3 Sandf . Ch.
(N. Y.) 466 162, 1128
Sajilgaard v. Kennedy, 2 Fed.
295 1636
-^ — ti. Kennedy, 13 Fed. 242 1588,
1589
Sahlgreen & Carrall's Case, 3
Ch. 323 166, 196
St. Charles Mfg. Co. v. Britton,
2 Mo. App. 290
St. Clair v. Rutledge, 115
Wise. 583; 92 N. W. 234
St. Helen Mill Co., 3 Sawy. 88
992, 1210
St. James Parish v. Newbury-
port, etc. R. R. Co., 141
Mass. 500; 6 N. E. 749
St. Joe, etc. Mining- Co. v.
First Nat. Bank, 10 Colo.
App. 339; 50 Pac. 1055
1317, 1328
St. John V. Erie Ry. Co., 22
Wall. 136 449, 450
St. John's Electric Light Co.
(1897-1903), Newfound-
land 440
St. Johns Nat. Bank v. Steel,
135 Mich. 165; 97 N. W.
704
St. Joseph, etc. R. R. Co. v.
Humphreys, 145 U. S. 105;
12 Sup. Ct. 795 1611, 1611,
1612
St. Joseph, etc. Ry. Co. v.
Shajtabaugh, 106 Mo. 567;
17 S. W. S81
V. Smith, 170 Mo. 327;
70 S. W. 700
St. Joseph Union Depot Co.
V. Chicago, etc. Ry. Co.,
131 Mo. 291; 31 S. W. 908
V. Chicago, etc. Ry. Co.,
89 Fed. 648; 32 C. C. A.
284 1632
609
392
917,
400
1317,
135
1302
250
1503
1632
I
clxxvii
TABLE OF CASES
[The references are to pages]
St. Joseph's, etc. Soc. v. St.
Hedwig's Church, 3 Pen.
(Del.) 229; 50 Atl. 535 392
St. Joseph's, etc. Soc. v. St.
Hedwig's Church, 4 Pen.
(Del.) 141; 53 Atl. 353 860
St. Ladislaus Beneficial Ass'n,
19 Pa. Co. Ct. Rep. 25 104, 108,
120
St. Lawrence Steamboat Co.,
44 N. J. Law 529 955, 1014,
1041, 1041, 1041, 1043, 1059,
1066, 1066, 1169, 1176, 1178
St. Louis Breweries v.
Apthorpe, 79 L. T. 651 878,
879
St. Louis Car Co. v. Stillwater
St. Ry. Co., 53 Minn. 129;
54 N. W. 1064 1598, 1598, 1599
St. Louis Colonization Ass'n
V. Hennessy, 11 Mo. App.
555 47, 244, 258, 1202
St. Louis Mfg. Co. V. Hilbert,
24 Mo. App. 338 517, 520
St. Louis Rawhide- Co. v. HiH,
72 Mo. App. 142 517, 526, 919
St. Louis 'Trust Co. v. Des
Moines, etc. Ry. Co., 101
Fed. 632 1659
«. Riley, 70 Fed. 32 • 1568
St. Louis, etc. Ins. Co. v.
Goodfellow, 9 Mo. 149 774
St. Louis, etc. R. R. Co. v.
Chenault, 36 Kans. 51; 12
Pac. 303 1342
V. Cleveland, etc. Ry.
Co., 125 U.S. 658; 8 Sup.
Ct. 1011 1559, 1562, 1564
V. O'Hara, 177 111. 525;
52N. E. 734; 53N. E. 118
1247, 1564, 1569
V. Southwestern Tel.
etc. Co., 121 Fed. 276; 58
C. C. A. 198 121
V. Terre Haute, etc.
R. R. Co., 145 U. S. 393;
12 Sup. a. 953 836, 841, 843
V. Tieman, 37 Kans. 606;
15 Pac. 544 82, 312, 330, 918,
1320
St. Louis, etc. Ry. Co. v.
Continental Trust Co., Ill
Fed. 669; 49 C. C. A. 529 1566,
1568
V. Holbrook, 73 Fed.
112; 19 CCA. 385 1617,1618,
1634, 1643
V. Jackson, 95 Fed. 560;
37 C C A. 165 1633
clxxviii
St. Louis, etc. Ry. Co. v. Stark,
55 Fed. 758 ; 5 C C A. 264 1634
V. Whitaker, 68 Tex. 630;
5 S. W. 448 1551
St. Luke's Church v. Mat-
thews, 4 Desaus. (S. Car.)
578; 6 Am. Dec. 619 1031, 1227
St. Mary's Benevolent Ass. v.
Lynch, 64 N. H. 213; 9
Atl. 98 1003
St. Nicholas Greek Catholic
Society, 29 Pa. Co. Ct. 193 996
St. Paul Nat. Bank v. Life Ins.
Clearing Co., 71 Minn. 123;
73 N. W. 713 772
St. Paul "ntle, etc. Co. v.
Diagonal Coal Co., 95 Iowa
551; 64 N. W. 606 1542,1655
St. Paul Trust Co. v. Wam-
pach Mfg. Co., 50 Minn. 93;
52 N. W. 274 75
St. Pavd, etc. R. R. Co. v.
Robbins, 23 Minn. 439 198, 198
St. PeteiB R. C Congregation
V. Germain, 104 lU. 440 848
St. Romes v. Levee Steam
Cotton Press, 20 La. Ann.
381 1122
Salem Mill Dam Corp. v.
Ropes, 6 Pick. (Mass.) 23 607,
608
Salina Nat. Bank v. Prescott,
60 Kans. 490; 57 Pac. 121 1306,
1323, 1324
Salisbury v. Metropolitan Ry.
Co., 22 L. T. 839 1265
Salisbury Gold Mining Co. v.
Hathom (1897), A. C 268 1056,
1057
Salisbury Mills v. Townsend,
109 Mass. 115 711, 738, 756,
799, 1130
Salomon v. Salomon & Co.
(1897), A. C. 22 148, 226, 262,
266, 317, 330, 872, 881, 882,
882, 883, 1085
Salomons v. Laing, 12 Beav.
339 92, 951
Salt Lake City v. HoUister,
118U.S. 256; eSup.Ct. 1055 870
Salt River Canal Co. v. Hickey,
36 Pac. 171; 4 Ariz. 240 426,
427
Saltmarsh v. Spaulding, 147
Mass. 224; 17 N. E. 316 1208,
1315, 1344
Salton V. New Beeston & Co.
(1899), 1 Ch. 775 1170, 1172,
1228, 1241
TABLE OF CASES
[The references are to pages]
Sampson v. Bowdoinham, etc.
Corp., 36 Me. 78 912, 1004,
1211, 1224
V. Fox, 109 Ala. 662;
19 So. 896; 55 Am. St. Rep.
950 1370
Samuel v. Holladay, 1 Woolw.
400 559, 588, 938, 946, 950,
975, 1000, 1200, 1222
V. Jarrah Timber, etc.
Corp. (1904), A. C. 323 1405
San Antonio, etc. Ry. Co. vi
Adams, 87 Tex. 125; 26 S.
W. 1040 1203
V. Barnett (Tex.), 44 S.
W. 20 1644
San Buenventura, etc. Co. v.
Vaasault, 50 Cal. 534 998
San Diego v. San Diego, etc,
R. R. Co., 44 Cal. 106
San Diego Gas Co. v. Frame,
137 Cal. 441; 70Pac.295
1305,
1306
124,
125
San Diego, etc. R. R. Co. v.
Pacific Beach Co., 112 Cal.
53; 44 Pac. 333; 33 L. R.
A. 788 1306, 1306, 1310, 1310
San Francisco Water Co. v.
Pattee, 86 Cal. 623 ; 25 Pac.
135 1343, 1344
San Joaquin, etc. Co. v.
Beecher, 101 Cal. 70; 35
Pac. 349 154, 209, 212, 1227
V. West, 94 Cal. 399; 29
Pac. 785 213, 303
San Jose Savings Bank v.
Sierra Lumber Co., 63 Cal.
179 1225
San Pedro Lumber Co. v. Rey-
nolds, 121 Cal. 74; 53
Pac. 410 1288
Sanborn v. Clough, 64 N. H.
315; 10 Atl. 678 1451
Sanders v. Bromley, 55 L. T.
N. s. 145 502
Sanderson v. Aetna Iron, etc.
Co., 34 Oh. St. 442 520
Sands v. Sanders, 26 N. Y. 239
604
Sandusky Coal Co. v. Walker,
27 Ont. 677 307, 337
Sandy River R. R. Co. v.
Stubbs, 77 Me. 594; 2 Atl.
9 1341
Sanford Fork & Tool Co. v.
Howe, Brown & Co., 157
U.S. 312; 15 Sup. Ct. 621
1309
1310, 1315
Sanger v. Upton, 91 U. S. 56 154
Sangster v. Netter, 9 Times
L. R. 441 354
Sanitary Can Co. v. MuUins,
86 N. Y. App. Div. 450;
83 N. Y. Supp. 918 694
Sankey, Brook Coal Co. (No.
1), 9 Eq. 721 66, 1513
(No. 2), 10 Eq. 381 65, 1513,
1513
Santa Clara Mining Ass'n v.
Meredith, 49 Md. 389; 33
Am. Rep. 264 1237
Santa Cruz R. R. Co. v.
Spreckles, 65 Cal. 193; 3
Pac. 661, 802 651, 653
Santa Fe Pac. R. R. Co. v.
Davidson, 149 Fed. 603 890
Santa Rosa R. R. v. Central
Street Ry. Co., 38 Pac.
986 (Cal.) 304
Sanxey v. Iowa City Glass
Co., 63 Iowa 707; 17 N.
W. 429 1622, 1628
Saragossa, etc. Ry. Co. v. Col-
lingham (1904), A. C. 159 1672
Sargent v. Essex Marine Ry.
Corp., 9 Pick. (Mass.) 202 1131
V. Franklin Ins. Co., 8
Pick. (Mass.) 90; 19 Am.
Dec. 306 571, 695, 716, 744,
' 753, 813, 1124
V. Kansas, etc. R. R. Co.,
48 Kans. 672; 29 Pac.
1063 1347
V. Sargent Granite Co., 3
N. Y. Misc. 325; 23 N. Y.
Supp. 886 1246
V. Webster, 13 Mete.
(Mass.) 497; 46 Am. Dec.
743 1178, 1201, 1202, 1204,
1205
, Ex parte, 17 Eq. 273 686,
686, 747, 807
Sarmiento v. Boat & Oar Co.,
105 Mich. 300; 63 N. W.
205; 55 Am. St. Rep. 446 397,
398, 1382, 1382
Sasser v. State, 13 Oh. Rep.
453 230
Saunders v. Farmer, 62 N. H.
572 113
V. Sun Life Ass. Co. of
Canada (1894), 1 Ch. 537
Saup V. Morgan & Co., 108 111.
326
Savages. Bartlett, 78 Md. 561 ;
28 Atl. 414
375,
378
420
180
clxxix
TABLE OF CASES
[The references are to pages]
Savage v. Madelia, etc. Ware-
house Co. (Minn.), 108 N.
W. 296 1244
V. People's Bldg., etc.
Ass'n, 45 W. Va. 275; 31
S. E. 991 584
Savannah Mills v. Cvmning-
ham, 100 Ga. 468; 28 S. E.
435 1182
Savannah, etc. Bldg. Co. v.
Silverberg, 108 Ga. 281; 33
S. E. 9b8 456
Savannah, etc. R. R. Co. v.
Jacksonville, etc. Ry. Co.,
79 Fed. 35; 24 C. C. A.
437 • 1612
V. Lancaster, 62 Ala. 555
392, 1429, 1462, 1466
Savin v. Hoylake Ry. Co., L.
R. 1 Ex. 9 294, 295
Savings Bank v. Bums, 104
Cal. 473; 38 Pac. 102 1329
V. Bavis, 8 Conn. 191 397,
398, 912, 1200
Savings Bank of Cincinnati v.
Benton, 2 Met. (Ky.) 240 1373,
1382
Savings Bank of Louisville's
Assignee v. Caperton, 87
Ky. 306; 8 S. W. 885; 12
Am. St. Rep. 488 1275, 1278,
1278
Savings & Trust Co. v. Bear
Valley Irr. Co. , 93 Fed. 339 1585
V. Bear Valley Irr. Co.,
112 Fed. 693 833
Sawyer v. Hoag, 17 Wall. 610 628,
612, 612
V. Pawners' Bank, 6
Allen (Mass.) 207 1237
Saxlehner v. Eisner, 147
Fed. 189; 77 C. C. A. 417 1356
Sayles v. Bates, 15 R. I. 342;
5 Atl. 497 692
V. Blane, 14 Q. B. 205 782
V. Brown, 40 Fed.
Rep. 8 492, 1010
V. White, 18 N. Y. App.
DiV. 590; 46 N. Y. Supp.
194 1285
Saylor v. Commonwealth In-
vestment, etc. Co., 38
Oree. 204; 62 Pac. 652 1299,
1328
Sayre v. Glenn, 87 Ala. 631 ;
6 So. 45 623, 624
Sayward v. Gardner, 5 Wash.
247; 31 Pac. 761; 33 Pac.
389 302
clxxx
Scadden Flat, etc. Co. v.
Scadden, 121 Cal. 33; 53
Pac. 440 280, 290
Scanlan v. Snow, 2 App. D.
C. 137 583, 585, 962, 963,
966, 973, 998, 1040, 1041
Scarlett v. Academy of Music,
43 Md. 203 603
V. Academy of Music, 46
Md. 132 166, 605
Schaefer v. Scott, 40 N. Y.
Apik Div. 438; 57 N. Y.
Supp. 1035 1372
Schaeffer Piano Mfg. Co. v.
Nat. Fire Extinguisher Co.,
148 Fed. 159; 78 C. C. A.
293 85
Schaffhauser v. Amholt, etc.
Brewing Co. (Pa.), 67 Atl.
417 1322
Schallard v. Eel River Nav.
Co., 70 Cal. 144; 11 Pac.
590 1490, 1490
Schantz v. Oakman, 10 N. Y.
App. Div. 151; 41 N. Y.
Supp. 746 274, 336
Schell V. Alston Mfg. Co., 149
Fed. 439 429, 1111
Schenectady, etc. Co. v.
Thatcher, 11 N. Y. 102 605,
607, 617, 1007, 1227, 1232,
1232
Scherck v. Montgomery, 81
Miss. 426; 33 So. 507 697,
751, 787
Schickel v. Berryville Land
Co., 99 Va. 88; 37 S. E.
813 1238, 1320
Schierenbei;g v. Stephens, 32
Mo. App. 314 493
Schmidt v. Hennepin County
Barrel Co., 35 Minn. 611;
29 N. W. 200 776
V. Louisville, etc. Ry. Co.,
84 S. W. 314; 27 Ky. Law
Rep. 21 1449, 1678, 1679,
1679, 1679
V. Mitchell, 101 Ky. 570;
41 S. W. 929; 72 Am. St.
Rep. 427 1024, 1025, 1044,
1046, 1046, 1047, 1047, 1176, 1250
V. Nelke Art Lithograph
Co., 16 N. Y. Misc. 300; 37
N. Y. Supp. 1138 293
V. Pritchard (Iowa), 112
N. W. 801 506, 607, 609,1039
1260
Schneider v. Sellers, 98 Tex.
380; 84 S. W. 417 860, 1235
, TABLE OF CASES
[The references are to pages]
Schnittger v. Old Home, etc.
Co., 144 Cal. 603; 78
Pac. 9 1298, 1299, 1311, 1317
Schoenfeld v. American Can
Co. (N. J.), 55 Atl. 1044 950
Schoening v. Schwenk, 112
Iowa 733; 84 N. W. 916 944,
1320, 1365
Schofield V. Goodrich Bros.
Banldng Co., 98 Fed. 271;
39 C. C. A. 76 75, 76, 834
V. Nat. State Bank, 97
•ii-Fed. 282; 38 C. C. A. 179 1305
Scholefield v. Redfern, 32 L.
' J. Ch. 627; 2 Dr. & Sm.
173 1156, 1444
Scholey v. Central Ry. Co., 9
Eq. 266 181
Sohraedem. HeinzelmanBros.,
51 111. App. 31 1342
Schreyer v. Turner Flouring
Mills Co., 29 Oreg. 1; 43
Pac. 719 283, 284, 288
Schuetz V. German-American
Real Estate Co., 21 N. Y.
App. Div. 163; 47 N. Y.
Supp. 500 666
Schufeldt V. Smith, 131 Mo.
280; 31 S.W. 1039; 52 Am.
St. Rep. 628; 29 L. R. A.
830 . 1318
V. Smith, 139 Mo. 367;
40 S. W. 887 297, 298, 299
Schultze V. Van Doren, 64 N.
J.Eq.465; 53 Atl. 815; 65
N. J. Eg. 764; 55 Atl. 1133 1586
Schurr v. Omaha, etc. Ry. Co.,
98 Iowa 418; 67N.W.280 1609
Schuyler County v. Coquard,
9 Mo. App. 592 230
Schuyler Nat. Bank v. Gads-
den, 191 U. S. 451; 24
Sup. Ct. 129 835, 835
Schwab V. Frisco Mining, etc.
Co., 21 Utah 258; 60 Pac.
940 1226
Schwartz V. State, 61 Oh. St.
497; 56 N. E. 201 1015
Schwind v. Boyce, 94 Md. 510;
51 Atl. 45 . 804
Scinde, etc. Bank Corpora-
tion, 6 Ch. 53 n 434
ScoUans v. Rollins, 173 Mass.
275 1430
Scots Charitable Soc. v.
Shaw, 8 Mass. 532 304
Scott V. B. & O. R. R. Co., 93
Md. 475; 49 Atl. 327 457, 460,
461
clxxxi
Scott, V. Bankers' Union
(Kans.), 85 Pac. 604 851, 1407
V. Central R. R. etc. Co.,
52 Barb. 45 1119, 1123
V. Clinton, etc. R. R.
Co., 6 Biss. 529 1503
■!). Colburn, 26 Beav. 276 ' 65
V. Depeyster, 1 Edw. Ch.
(N. Y.) 513 1268, 1275,
1728
V. Deweese, 181 U. S.
202; 21 Sup. Ct. 585 489, 492
V. Eagle Fire Ins. Co.,
7 Paige (N. Y.) 198 1112, 1112
V. Farmers' L. &. T. Co.,
69 Fed. 17; 16 C. C. A.
358 1608
V. Farmers', etc. Nat.
Bank, 97 Tex. 31; 75 S.
W. 7 1317, 1334, 1497
«. Houpt, 73Ark. 78; 83
S. W. 1057 702, 716
V. Latimer, 89 Fed. 843;
33 C. C. A. 1 180, 491
V. Lord Ebury, 2 C. P.
255 283, 310
V. Pequonnock Nat.
Bank, 21 Blatchf. 203 715
V. Rainier, etc. Ry. Co.,
13 Wash. 108 ; 42 Pac. 531 161 1,
1611
V. Scott, 68 N. H. 7; 38
Atl. 567 1014,1053,1177
V. Superior Sunset Oil
Co., 144 Cal. 140; 77 Pac.
817 1222
Scott & Horton v. Godfrey
(1901), 2 K. B. 726 779
Scottish N. E. Ry. Co. v. Stew-
art, 3 Macq. H. L. 382 283
Scottish Petroleum Co., 23
Ch. D. 413 178, 179, 184, 1205
Scottish Security Co.'s Re-
ceiver V. Starks, 25 Ky.
Law Rep. 1722; 78 S. W.
455 204
Scovill V. Thayer, 105 U. S.
143 483, 486, 492, 612, 614
Screven Hose Co. v. Philpot,
53 Ga. 625 858
Scripture v. Prancestown
Soapstone' Co., 50 N. H.
571 715, 717
Scruggs V. Cotterill, 67 N. Y.
App. Div. 583; 73 N. Y.
Supp. 882 _ 786
Seaboard Air Line Ry. v.
Knickerbocker Trust Co.,
125 Ga. 4G3; 54 S. E. 138 1568
TABLE OF CASES
[The references are to pages]
Seacoast R. R. Co. v. Wood,
65 N. J. Eq. 530; 56 Atl.
337 303, 332
Seaoord v. Pendleton, 55 Hun
(N.Y.)579; 9N.Y. Supp.
46 252
Searles v. Gebbie, 115 N. Y.
App. Biv. 778; 101 N. Y.
Supp. 199 979, 1120, 1121, 1354
Sears v. Illinois Wesleyan
University, 28 HI. 183 1377
Seaton v. Grant, 2 Ch. 459 965,
965, 968
V. Grimm, 110 Iowa 145;
81 N. W. 225 127, 237
Seattle, etc. Ry. Co., 61 Fed.
541 1614
V. Union Trust Co., 79
Fed. 179; 24 C. C. A. 512 1623,
1638, 1638
Seattle Trust Co. v. Pitner,
18 Wash. 401; 51 Pac.
1048 464, 613, 1114
Sebastian v. Covington Bridge
Co., 21 Oh. St. 451 1371
Second Ave. R. R. Co. v. Cole-
man, 24 Barb. (N. Y.) 300 1378
Second Nat. Bank v. First Nat.
Bank, 8 N. Dak. 50; 76 N.
W. 504 753
Second Universalist Church v.
Colegrove, 74 Conn. 79;
49 Atl. 902 1099, 1144, 1154
Secor V. Toledo, etc. Ry. Co.,
7 Biss. 513 1620
Securities, etc. Corp. v.
Brighton Alhambra, 62 L.
J. Ch. 566; 68 L. T. 249 1590,
1650
Security Nat. Bank v. St.
Croix Power Co., 117 Wise.
211; 94N. W. 74 833
Security Trust Co. v. Ford
(Oh.), 79 N. E. 474 115, 143
V. Goble R. R. Co., 44
Oreg. 370; 74 Pac. 919; 75
Pac. 697 1543, 1560
Sedalia, etc. Ry. Co. v. Wil-
kerson, 83 Mo. 235 209, 209, 212
Sedgwick, Ex parte, 2 Jur.
N. 8. 949 1244
See V. Heppenheimer (N. J.),
61 Atl. 843 634, 635
Seebeck v. King, 34 N. Y.
Misc. 483; 70 N. Y. Supp.
322 1185
Seeley v. New York Nat. Ex-
change Bank, 8 Daly (N.
Y.) 400; 78 N. Y. 600 541
715
1517
1641
1173
1231
clxxxii
Seeligson v. Brown, 61 Tex.
114
Seibert v. Minneapolis, etc.
Ry. Co., 52 Minn. 246; 53
N. W. 1151
Seignouret v. Home Ins. Co.,
24 Fed. 332 529, 529
Seller v. Union Mfg. Co., 50
W. Va.208; 40 S. E. 547
Self-Acting Sewing Machine
Co., 54 L. T. 676
Seligman v. Prince (1895), 2
Ch. 617 1308, 1399
Sellar v. Charles Bright & Co.
(1904), 2 K. B. 446 415, 1397
Sellers v. Greer, 172 111. 549;
50 N. E. 246; 40 L. R. A.
589 1069, 1071, 1072, 1073,1078
V. Phoenix Iron Co., 13
Fed. 20 935, 1313
Selley v. American Lubricator
Co., 119 Iowa 591; 93
N. W. 590 918, 1276
Selma, etc. R. R. Co. v. Tip-
ton, 5 Ala. 787; 39 Am.
Dec. 344
Selover v. Isle Harbor Land
Co., 91 Minn. 451; 98
N. W. 344 199, 287
V. Isle Harbor Co.
(Minn.), Ill N. W. -155 199
Semple v. Glenn, 91 Ala. 245;
6 So. 46; 9 So. 265; 24 Am.
St. Rep. 894 614, 615
Seneca County Bank v. Lamb,
26 Barb. (N. Y.) 595
Senn v. Levy, 23 Ky. Law
Rep. 662, 1331; 63 S. W.
776
V. Union, etc. Mercantile
Co., 115 Mo. App. 685; 92
S. W. 507 745, 752, 752, 752
Senour Mfg. Co. v. Church
Paint, etc. Co., 81 Minn.
294; 84 N. W. 109 35, 39
Seventeenth Ward Bank v.
Smith, 51 N. Y. App. Div.
259; 64 N. Y. Supp. 888
Seventh Nat. Bank v. Shen-
andoah Iron Co., 35 Fed.
436
Severn & Wye Ry. Co. (1896),
1 Ch. 559 1122, 1123
Severson v. Bimetallic, etc.
Co., 18 Mont. 13 ; 44 Pac. 79 1247
Sewall V. Boston Water Power
Co., 4 Allen (Mass.) 277;
81 Am. Dec. 701 729, 755, 755,
755, 755
594
141
1368
1560
TABLE OF CASES
[The references are to pages]
Sewall V. Eastern R. R. Co., 9
Gush. (Mass.), 5 505, 507
V. Lancaster Bank, 17
S. & R. (Pa.) 285 424, 424, 774,
774
Sewell V. Brainerd, 38 Vt.
364 1453
Sewell's Case, 3 Ch. 131 142, 486,
491
Sexton V. Snyder, 119 Mo.
App. 668; 94S. W. 562 129,252
Seyberger v. Calumet Drain-
ing Co., 33 Ind. 330 94
Seymour v. Bridge, 14 Q. B.
D. 460 780
V. Canandaigua, etc. R.
R. Co., 25 Barb. 284 1503,1520
V. Spring Forest, etc.
Ass'n, 144 N. Y. 333; 39
N. E. 365; 26 L. R. A. 859 286,
331, 1341, 1342, 1342, 1342
S. Frost & Co. (1899), 2 Ch.
207 640, 640
Shackleford v. New Orieans,
etc. R. R. Co., 37 Miss. 202 1246,
J 1248
Shackleford, Ford & Co. v.
Dangerfield, L. R. 3 C. P.
407 385, 386, 606
Shackleford's Case, 1 Ch. 567 166
Shakopee Mfg. Co., 37 Minn.
91; 33 N. W. 219 219
Shamokin Valley R. R. Co. v.
Livermore, 47 Pa. St. 465;
86 Am. Dec. 552 1520
Shannon v. Howard Mut.
Bldg., Ass'n, 36 Md. 383
Sharp V. Dawes, 2 Q. B. D. 26
580
1010,
1202
1285,
Sharpe, Be (1892), 1 Ch. 154
1287, 1289
Sharpley v. South Ry. Co., 2
Ch. D. 663
Shattuck V. American Cem-
ent Co., 205 Pa. St. 197;
54 Atl. 785; 97 Am. St.
Rep. 735
V. Oakland, etc. Co., 58
Cal. 551
Shaw V. Benson, 11 Q. B. D.
563
V. Bentley & Co., 68 L.
T. 812
-, — V. Bill, 95 U. S. 10
V. Cordis, 143 Mass. 443;
• 9 N. E. 794
V. Davis, 78 Md. 308;
28 Atl. 619; 23 L. R. A.
294 1076, 1079, 1080, 1081
177
727
1295
260
363
1472
1446
Shaw V. Gilbert, 111 Wise. 165:
68 N. W. 188 425
V. Holland (1900), 2 Ch.
305 1339
V. Nat. German-Ameri-
can Bank, 132 Fed. 658;
65 C. C. A. 620; 199 U. S.
603; 26 Sup. Ct. 750 75, 834
V. Norfolk, etc. R. R.
Co., 5 Gray 162 (Mass.) 1486,
1495, 1584, 1586, 1600
V. Port Philip Mining
Co., 13 Q. B. D. 103 730, 731,
740, 1362
V. Railroad Co., 100
U. S. 605 1485, 1649, 1671
V. Spencer, 100 Mass.
382; 97 Am. Dec. 107; 1
Am. Rep. 115 720, 798
Shaw'g Case, 34 L. T. 715 189, 192
Shea V. Mabry, 1 Lea (Tenn.)
319 918, 1275
Shearman, Be, 66 L. J. Ch. 25 177,
181
Shears v. Jacobs, L. R. 1 C. P.
513 383, 405
Sheffield v. Johnson County
Sav. Bank (Ga.), 58 S. E.
386 393
Sheffield Corporation v. Bar-
clay (1905), A. C. 392 758, 759
Sheffield Gas, etc. Co. v. Har-
rison, 17 Beav. 294 199
Sheffield Nickel Co. v. Unwin,
2 Q. B. D. 214 526
Sheffield, etc. Ry. Co. v.
Woodcock, 7 M. & W. 574 602,
605, 1180
Sheldon Canal Co. v. Miller
(Tex.), 90 S. W. 206 912, 1006
Shellenberger v. Altoona, etc.
R. R. Co., 212 Pa. St. 413;
61 Atl. 1000; 108 Am. St.
Rep. 876 1433
V. Patterson, 168 Pa. St.
30; 31 Atl. 943 509, 509, 1228
Shellington v. Howard, 53
N. Y. 371 697
Shelmerdine v. Welsh, 20
Phila. 199 1053
Shenandoah Valley R. R. Co.
V. Griffith, 76 Va. 913 717
Shepard v. Richardson, 145
Mass. 32; 11 N. E. 738 1622
Shepaug Voting Trust Cases,
60 Conn. 553; 24 Atl. 32 801,
966, 1048, 1050, 1053, 1053
Shepheard v. Bray (1906), 2
Ch. 235 1349
clxxxiii
TABLE OF CASES
[The references are to pages]
Shepherd v. Gillespie, 3 Ch.
764 706, 782, 1349, 1350
V. Harris (1905), 2 Ch.
310 700, 701
Sheppard v. Scinde, etc. Ry.
Co., 56 L. J. Ch. 866; 36
W. R. 1 433
Sheridan Brick Works v. Ma-
rion Trust Co., 157 Ind. 292
61 N. E. 666; 87 Am. St.
Rep. 207 958
Sheridan, etc. Co. v. Chatham
Nat. Bank, 127 N. Y. 517;
28 N. E. 467 1214, 1215
Sherman v. Am. Stove Co.,
85 Mich. 169; 48 N. W. 537 182
Sherman, etc. Town Co. v.
Morris, 43 Kans. 282; 23
Pac. 569; 19 Am. St. Rep.
134 109, 111, 852
V. Swigart, 43 ICans. 292;
23 Pac. 569; 19 Am. St.
Rep. 137 1376, 1377
Sherrard v. Sherrard, 3 Atk.
502 1442
Sherwood v. Alvis, 83 Ala.
115; 3 So. 307 866
V. Atlantic, etc. R. R.
Co., 94 Va. 291; 26 S. E.
943 1632
V. Illinois Trust, etc. Co.,
195 111. 112; .62 N. E. 835;
88 Am. St. Rep. 183 616, 623
V. Meadow Valley Min-
ing Co., 50 Cal. 412 682, 726
Shick V. Citizens' Enterprise
Co., 15 Ind. App. 329; 57
Am. St. Rep. 230 113, 195, 213,
214, 216
Shickle v. Watts, 94 Mo. 410;
7 S. W. 274 635
Shields v. Clifton Hill Land
Co., 94 Tenn. 123; 28 S. W.
668; 45 Am. St. Rep. 700;
26 L. R. A. 509 118, 237, 251,
306, 309
Ship's Case, 2 De G. J. & S.
544 215, 215
Shipley v. Mechanics Bank,
10 Johns. (N. Y.) 484 751
Shipman v. Aetna Ins. Co.,
29 Conn. 245 717
Shively v. Eureka, etc. Min-
ing Co. (Cal.), 89 Pac. 1073 1318
Shoemaker v. Nat. Mechanics
Bank, 2 Abb. (U. S.) 416 74, 866
V. Nat. Mechanics'
Bank, 21 Fed. Cas. 1331; 1
Hughes 101 866
clxxxiv
Shoemaker v. Washbvim Lum-
ber Co., 97 Wise. 585; 73
N. W. 333 517, 531, 534
Shoknecht v. Milwaukee
Brick, etc. Co., 108 Wise.
457; 84 N. W. 838 1196, 1196
Short V. Stevenson, 63 Pa.
St. 95 340
Shoun V. Armstrong (Tenn.),
59 S. W. 790 113
Shrewsbury, etc. Ry. Co. v.
North-Western Ry. Co.,
6 H. L. Cas. 113, 137 41, 828
Shropshire Union Rys., etc.
Co. V. Queen, L. R. 7 H. L.
496 747
Shufeldt V. Carver, 8 111. App.
545 416
Shulman v. Star Suburban
Realty Co., 113 N. Y. App.
Div. 759; 99 N. Y. Supp.
419 1251
Shumaker v. Davidson, 116
Iowa 569; 87 N. W. 441 298
Sias V. Consolidated Lighting
Co., 73 Vt. 55; 50Atl. 554 1196
Sibley v. Quinsigamoud Nat.
Bank, 133 Mass. 515 716, 717
Sickles V. Richardson, 23 Hun
(N. Y.) 559 1405, 1413
Sidney's Case, 13 Etj. 228 203, 204
Siegman v. Electric Vehicle
Co. (N. J.), 65 Atl. 910 939, 952,
1091, 1290
V. Electric Vehicle Co.,
140 Fed. 117 939
V. Maloney, 63 N. J. Eq.
422; 51 Atl. 1003; 54 Atl.
405, 1125; 65 N. J. Eq.
372 947, 1125, 1265
Siemens-Halske Electric Co.
V. Duncan, 142 Fed. 157;
73 C. C. A. 375 296
Sierra Land, etc. Co. v.
Bricker (Cal.), 85 Pac. 665 228,
228, 233, 384
Sigua Iron Co. v. Brown, 171
N. Y. 488; 64 N. E. 194 601,
617, 913
V. Greene, 88 Fed. 207 705,
921
V. Greene, 104 Fed. 854;
44 C. C. A. 221 705
Silber Light Co. v. Silber,
12 Ch. D. 717 933, 933
Silk Mfg. Co. ■». Campbell, 27
N. J. Law 539 932
Silsby V. Strong, 38 Oreg. 36;
62 Pac. 633 1168, 1202, 1206
TABLE OF CASES
[The references are to pages]
Silver Hook Road v. Greene,
12 R. I. 164 1216
Simis V. Davidson, 54 N. Y.
Super. Ct. 235 1381, 1382
Simm V. Anglo-American Tel-
egraph Co., 5 Q. B. D. 188 736,
738
Simmons v. Burlington, etc.
Ry. Co., 159 U. S. 278; 16
Sup. a. 1 1405, 1433, 1436,
1627
V. Hill, 96 Mo. 679; 10
S. W. 61; 2L. R. A. 476
V. London Joint Stock
Bank (1891), 1 Ch. 270;
(1892) A. C. 201
V. Taylor, 23 Fed. 849
705,
716
689
1405,
1627
V. Taylor, 38 Fed. 682 1401,
1433, 1436, 1627
Simmons v. Troy Iron Works,
92 Ala. 427; 9 So. 160 40
Simon v. Calfee (Ark.), 95
S. W. 1011 226
Simons v. Vulcan Oil Co., 61
Pa. St. 202; 100 Am. Dec.
628 325, 329
Simonson v. N. Y., etc. Ins.
Co., 141 N. Y. 12; 35N. E.
969 1239
Simpson v. Building, etc.
Ass'n, 38 Oh. St. 349 851
V. Heaton's, etc. Co., 19
W. R. 614 193
V. Molson's Bank (1895),
A. C. 270 4, 796, 798
V. Moore, 30 Barb.
(N. Y.) 637 1150, 1154
V. Palace Theatre, 69
L. T. N. s. 70 470
V. Westminster, etc.
HotelCo.,8H.L.Cas.712 91,97
Simpson's Case, 4 Ch. 184 171, 189
Sims V. Comm., 114 Ky. 827;
71 S. W. 929 127
V. Petaluma Gas, etc.
Co., 131 Cal. 656; 63 Pac.
1011 1295, 1304, 1316
Simultaneous Colour Printing
Syndicate v. Fowerbaker
(1901), 1 K. B. 771 1416, 1546
Sinclair v. Dwight, 9 N. Y.
App. Div. 297; 41 N. Y.
Supp. 193 1262
Singer v. Salt Lake, etc. Mfg.
Co., 17 Utah 143; 53 Pac.
1024; 70 Am. St. Rep. 773 1199,
1201, 1210, 1299
tlxxxv
Singer Mfg. Co. v. Peck, 9 S.
Dak. 29; 67 N. W. 947 123, 150,
151
V. Wright, 33 Fed. 121 25, 25
1). Wright, 97 Ga. 114;
25 S. E. 249; 35 L. R. A.
497 , 25
Sioux City, etc. Co. v. Trust
Co. of North America, 52
Fed. 191 838
V. Trust Co. of North
America, 82 Fed. 124; 27
C. C. A. 73 109, 1408
V. Trust Co. of North
America, 173 U. S. 99; 19
Sup. a. 341 832
Sioux City, etc. Ry. Co. v.
Manhattan Trust Co., 92
Fed. 428; 34 C. C. A. 431 1402,
1625
Sivin V. Mutual Match Co.
(N. J.), 66 Atl. 921 628
Skelly V. Private Coachmen's
etc. Soc, 13 Daly (N. Y.)
2 - 561
Skiddy v. Atlantic, etc. R. R.
Co., Re Stewart's Petition,
3 Hughes 320 443, 451, 451,
1562, 1592, 1652
Skiff V. Stoddard, 63 Conn.
198; 26 Atl. 874; 28 Atl.
104; 21 L. R. A. 102 418, 807,
807
Skillman, Re, 24 Abb. N. C.
(N. Y.) 41; 9 N. Y. Supp.
469 1155
Skinner v. City of London
Marine Ins. Corp., 14 Q. B.
D. 882 750, 781
Skinner Dry Dock Co. v.
Mayor, etc. of Baltimore,
96 Md. 32; 53 Atl. 416 102
Skinner Mfg. Co. v. Dowville,
44 So. 1014 (Fla.) 1374
Skowhegan Bank v. Cutler,
49 Me. 315 716, 923
Slater Woollen Co. v. Lamb,
143 Mass. 420; 9N.X823 850,
856
Slattery v. North End Sav.
Bank, 175 Mass. 380; 56
N. E. 606 1373, 1379, 1379
V. St. Louis, etc.. Trans-
portation Co., 91 Mo. 217;
4 S. W. 79 978
Slayden v. Seip Coal Co., 25
Mo. App. 439 1122
Slaymaker v. Bank of Gettys-
burg, 10 Pa. St. 373 422, 678
TABLE OF CASES
[The references are to pages]
1355
1407
1646
V. Broom, 19 Johns.
(N. Y.) 456; 10 Am. Dec.
273 18, 664
Slipher v. Earhart, 83 Ind.
173 154, 189, 198
Sloan V. Central Iowa Ry. Co.,
62 Iowa 728; 16N. W. 331 1655
V. Clarkson (Md.), 66
Atl. 18 936
Slobodinsky, Be (1903), 2 K.
B. 517 300
Slocum V. Head, 105 Wise.
431; 81 N. W. 673; 50 L.
R. A. 324 124
V. Providence Steam, etc.
Co., 10 R. I. 112 235, 242
V. Warren, 10 R. I. 116 235
Small V. Herkimer, 2 N. Y.
330 667, 769
V. Smith, 10 A. C. 119 92
Smalley v. McGraw (Mich.),
Ill N. W. 1093
Smead v. Indianapolis, etc.
R. R. Co., 11 Ind. 104
Smiley v. Sioux Beet Syrup
Co. (Nebr.), 99 N. W. 263
Smith V. Alabama Fruit Grow-
ing, etc. Ass'n, 123 Ala. 538 ;
26 So. 232 451, 452, 1106
V. American Coal Co., 7
Lans. (N. Y.) 317 715, 748, 756
V. Automatic Photo-
graphic Co., 118 m. App.
649
V. Bank of New England,
72 N. H. 4; 54 Atl. 385
1234, 1277
V. Bank of Nova Scotia,
8 Can. Sup. Ct. 558 616, 696,
744, 746
V. Becker (Wise), 109
N. W. 131 418, 807
V. Brown (1896), A. C.
614 641, 642
V. Bulkley, 18 Colo. App.
227; 70Pac. 958 951, 955, 955
V. Burns Boiler & Mfg.
Co. (Wise), 11 N. W. 1123
157, 213, 214, 215, 215
V. Chicago, etc. Ry. Co.,
18 Wise. 17
V. City of Janesville, 52
Wise. 680; 9N. W. 789
V. Cleveland, etc. Ry. Co.
(Ind.), 81 N. E. 501
V. Cork, etc. Ry. Co. , 3 Ir.
Rep. Eq. 356; 5 Ir. Rep.
Eq. 65 457, 458, 466, 467, 467,
467, 467, 1057, 1123
750
1234,
1632
25
250
Smith V. County of Clark, 54
Mo. 58
V. Dana, 77 Conn. 543;
60 Atl. 117; 69 L. R. A.
76; 107 Am. St. Rep. 51
1451
1144,
1155
1182
371
493
578
529
154,
clxxxvi
V. Danzig, 64 How. Pr.
(N. Y.) 320
V. David H. Brand &
Co., 67 N. J. Eq. 529; 58
Atl. 1029
V. Dom, 96 Cal. 73; 30
Pac. 1024 944, 1197, 1211
V. Eastern R. R. Co., 124
Mass. 154 1515
V. Eastwood Wire Mfg.
Co., 58 N. J. Eq. 331; 43
Atl. 567 138
V. Erb, 4 Gill (Md.) 437 1231,
1249
V. Franklin Park, etc.
Co., 168 Mass. 345; 47 N.
E. 409
V. Galloway (1898), 1
Q. B. 71
V. Goldworthy, 4 Q. B.
430
V. Gower, 63 Ky. 17
154, 156, 198
V. Hooper, 95 Md. 16;
51 Atl. 844; 64 Atl. 95 1156
V. Hurd, 12 Mete. (Mass.)
371; 46 Am. Dec. 690 928
- V. Law, 21 N. Y. 296 66,
1198, 1203
- V. Law Guarantee, etc.
Soc. (1904), 2 Ch. 569 1454,
1454
- V. London United Brew-
eries (1907), 2 Ch. 511 1643,
1647, 1647, 1655
- V. Los Angeles, etc.
Ass'n, 78 Cal. 289; 20
Pac. 677 1206, 1299, 1328
V. Martin Anti-Fire, etc.
Co., 47 N. Y. St. Rep. 26;
19 N. Y. Supp. 285
V. Mayfield, 163 111.
447; 45N. E. 157
V. McCuUough, 104 U. S.
25
V. Natchez Steamboat
Co., 1 How. (Miss.) 479
916, 924, 1375
V. New Hartford Water
Co., 73 Conn. 626; 48 Atl.
754 294, 1296
V. Paringa Mines (1906),
3 Ch. 193 997, 1212
591
230
1511
914,
TABLE OF CASES
[The references are to pages]
Smith V. Parker, 148 Ind. 127;
45 N. E. 770 309, 311
V. People's Mut., etc.
Soc, 64 Hun 534; 19 N.
Y. Supp. 432 589
V. Plank Road Co., 30
Ala. 650 604
V. Poor, 40 Me. 415; 63
Am. Dec. 672 1350
V. Prattville Mfg. Co.,
29 Ala. 503 1110, 1274
V. Prosser (1907), 2 K.
B. 735 727
V. Putnam, 61 N. H.
632 1237
V. Reese River Co., 2 Eq.
264 184
V. RogeiB, 30 Ont. Rep.
256 722, 723
V. San Francisco, etc. Ry.
Co., 115 Cal. 584; 47 Pac.
582; 56 Am. St. Rep. 119;
35 L. R. A. 309 1017, 1021,
1029, 1042, 1050
V. Savin, 141 N. Y. 315;
36 N. E. 338 244, 687, 723
V. Sheeley, 12 Wall 358 248
V. Silver Valley Mining
Co., 64 Md. 85; 20 Atl.
1032; 54 Am. Rep. 760 161,
1009
V. Smith, 3 Besaus. (S.
Car.) 557 1188
V. Smith, 62 111. 493 406,
591, 1373, 1375
V. Smith, 117 Mass. 72 407
V. Supreme Lodge, 83
Mo. App. 512 584
V. Tallahassee, etc.
Plank Road Co., 30 Ala.
650 194, 368, 380, 381
V. Walkerville Malleable
Iron Co., 23 Ont. App. 95 733
V. Wells Mfg. Co., 148
Ind. 333; 46 N. E. 1000 1192
Smith & Co., Richard (1901),
1 Ir. 73 1430
Smith's Estate, 140 Pa. St.
344; 21 Atl. 438; 23 Am.
St. Rep. 237 1147, 1148
Smith's Extx. V. Washington
City, etc. R. R. Co., 33
Gratt. 617 1492
Smith, Be (1896), 2 Ch. 590 20
Smith, S. P., Lumber Co., 132
Fed. 618 518
, 132 Fed. 620 85, 838
Smithson's Case, 68 L. J. Ch.
46 642
Smyth V. Darley, 2 H. L. Cas.
789 997, 999, 1069
Smythe v. Chicago, etc. R.
Co., 22 Fed. Cas. 711, No.
13, 135 1534
Sneath v. Valley Gold Co.
(1893), 1 Ch. 477 1673, 1674,
1675
Snediker v. Ayers, 146 Cal.
407; 80 Pac. 511 1323, 1344
Snider's Sons v. Troy, 91 Ala.
224; 8 So. 658; 11 L. R.
A. 515; 24 Am. St. Rep.
887 248
Snively v. Loomis Coal Co.,
69 Fed. 204 1560
Snow V. Boston Blank Book
Mfg. Co., 158 Mass. 325; 33
N. E. 588 967
V. Church, 13 N. Y. App.
Div. 108; 42 N. Y. Supp.
1072 1029, 1347
V. Thompson Oil Co., 59
Pa. St. 209 297
Snow, Church & Co. v. Hall, 19
N. Y. Misc. 655; 44 N. Y.
Supp. 427 53
Snyder v. DeForest Wireless
Tel. Co., 113 N. Y. App.
Div. 840; 99 N. Y. Supp.
644 890
V. Philadelphia Co., 54
W. Va. 149; 46 S. E. 366;
102 Am. St. Rep. 941; 63
L. R. A. 896 383
V. Studebaker, 19 Ind.
462; 81 Am. Dec. 415 236,
243, 244
Snyder & Johnson Co., 133
Fed. 806 44
Snyder, Re, 29 N. Y. Misc. 1;
59 N. Y. Supp. 993 1402
Soci6t6 Anonyme v. Panhard-
Levassor Motor Co. (1901),
2 Ch. 513 310, 373, 378
Soci6t6 G^n^rale de Paris v.
Tramways Union Co., 14
Q. B. D. 424 796, 1356
V. Walker, 11 A. C. 20 685,
685, 697, 697, 713, 747, 747, 748
Society of Accountants & Au-
ditors V. Goodway (1907),
1 Ch. 489 372
Society of Practical Knowl-
edge V. Abbot, 2 Beav.
559 627, 627, 1290
Society for the Propagation of
the Gospel v. Town of Paw-
let, 4 Pet. 480 226
clxxxvii
TABLE OF CASES
[The references are to pages]
Society for Savings v. New-
London, 29 Conn. 174 1423
Society Perun v. Cleveland,
43 Oh. St. 481; 3 N. E.
357 249, 251
Sodus Bay, etc. R. R. Co. v.
Hamlin, 24 Hun (N. Y.)
390 119
Solomon v. Bates, 118 N. Car.
311; 24S. E. 478; 54 Am.
St. Rep. 725 1355
V. First Nat. Bank, 72
Miss. 854; 17 So. 383 1124
Somerset, etc. R. R. Co. v.
Gushing, 45 Me. 524 481, 547, 609
Somerset Nat. Banking Co. ■».
Adams, 24 Ky. Law Rep.
2083; 72 S. W. 1125 174,
204, 612
Somerset Ry. v. Pierce, 88 Me.
86; 33Atl. 772
Somerville's Case, 6 Ch. 266
1658
171,
171
1033
870
1239
848
Soper V. Littlejohn, 31 Can.
Super. Ct. 572
Sorrentino v. Ciletti, 75 N. Y.
App. Div. 507; 78 N. Y.
Supp. 322 556, 588
South & North Ala. R. R.
Co. ■». Chappell, 61 Ala. 527
■». Falkner, 49 Ala. 115
V. Highland Ave., etc. R.
R. Co., 119 Ala. 105; 24 So.
114
South African Supply, etc.
Co. (1904), 2 Ch. 268 58, 468,
1473
South African Tys. v. Wal-
Ungton (1898), A. C. 309 1414,
1414, 1415
South Baptist" Soc. i>. Oapp,
35 Barb. (N. Y.) 35
South Bay Meadow Dam
Co. V. Gray, 30 Me. 547
South Bend Chilled Plow Co.
V. George C. Cribb Co., 97
Wise. 230 ; 72 N. W. 749
South Carolina v. Port Royal,
etc. Ry. Co., 89 Fed. 565
397
233
961
South Carolina Mutual Ins.
Co. V. Price, 67 S. Car. 207;
45 S. E. 173
South Carolina R. R. Co. v.
Wilmington, etc. R. R. Co.,
7 S. Car. 410
South Covington, etc. Ry.
Co. V. Gest, 34 Fed. 628
1644,
1654
386
1632
1456,
1457
clxxxviii
South Dakota v. North Caro-
lina, 192 U. S. 286; 24 Sup.
Ct. 269 154
South Durham Brewery Co.,
31 Ch. D. 261 431, 439, 441
South Georgia, etc. R. R.
Co. V. Ayres, 56 Ga. 230 609,
610
South Joplin Land Co. v. Case,
104 Mo. 572; 16 S. W. 390 322
South London Fish Market,
39 Ch. D. 324 1181
South Milwaukee Co. v. Mur-
phy, 112 Wise. 614; 88 N.
W. 583; 58L. R. A. 82 600,
605
South Missouri, etc. Co. v.
Crommer (Mo.), 101 S. W.
22 271, 273
South School Dist. v. Blakes-
lee, 13 Conn. 227 998
South Staflfordshire Ry. Co. v.
Burnside, 5 Ex. 129 624, 624
South St. Louis Ry. Co. v.
Plate, 92 Mo. 614; 5 S. W.
199 1636
South Texas Nat. Bank v.
Texas, etc. Lumber Co., 30
Tex. Civ. App. 412; 70 S.
W. 768 • 705, 705
South Western R. R. Co. v.
Thomason, 40 Ga. 408 420,
792
South Western, etc. Ry. Co.
V. Hays, 63 Ark. 355; 38
S. W. 665 1627
South Western of Venezuela
Ry. Co. (1902), 1 Ch. 701 1240
South Yorkshire Ry., etc.
Co. V. Great Northern Ry.
Co., 9 Ex. 55 824, 1107
South Yorkshire Wine Co., 8
Times L. R. 413 791
Southampton Dock Co. v.
Richards, 1 Man. & Gr. 448 614,
915, 923, 925, 925
Southampton, etc. Steam
Boat Co., 4 De G. J. & S.
200 175
Southern Bank v. Williams,
25 Ga. 534 245
Southern Bldg., etc. Ass'n v.
Casa Grande Stable Co.,
128 Ala. 624 ; 29 So. 654 844
Southern Brazilian, etc. Ry.
Co. (1905), 2 Ch. 78 40, 63, 67,
1470
Southern Counties Bank v.
■ Rider, 73 L. T. 374 996
TABLE OP CASES
[Tlie references are to pages]
Southern Counties Bank v.
Kirkwood, 11 Times L. R.
563 996
Southern Development Co. v.
Farmers' L. & T. Co., 79
Fed. 212; 24 CCA. 497 1570
Southern Electric Securities
Co. V. State (Miss.), 44 So.
785 57, 263, 265, 1063
Southern Life, etc. Co. v.
Lanier, 5 Fla. 110; 58 Am.
Dec. 448 868
Southern Loan Co. v. Morris,
2 Pa. St. 175; 44 Am. Dec.
188 865
Southern Pac. Co. v. Block, 84
Tex. 21; 19 S. W. 300 381
Southern Pac. R. R. Co. v.
Doyle, 11 Fed. 253 1495, 1543
Southern Plank Road Co. v.
Hixon, 5 Ind. 165 994, 1062
Southern Ry. Co. v. Adams,
76 Fed. 504 ; 22 C. C. A. 300 1570
V. American Brake Co.,
76 Fed. 502; 22 C C A.
298 1570
V. Bouknight, 70 Fed.
442; 17 C C. A. 181 1543
V. Carnegie Steel Co., 76
Fed. 492; 22 C C A. 289;
176 U. S. 257; 20 Sup. a.
347 1517, 1560, 1562, 1564,
1565, 1567, 1570, 1571, 1572
V. Carnegie Steel Co., 176
U. S. 257 ; ^0 Sup. Ct. 347 1562,
1565, 1567, 1570, 1571, 1572
V. Chapman Jack Co.,
117 Fed. 424; 54 C C. A.
598 1570, 1572
V. Dunlop Mills, 76 Fed.
505; 22 C. C A. 302 1570
V. Ensign Mfg. Co., 117
Fed. 417; 54 C C A- 591 1570
V. North Carolina Corp.
Comm., 104 Fed. 700 891
V. Tillett, 76 Fed. 507;
22 C C A. 303 1562, 1567
Southern Trust, etc. Co. v.
Yeatman, 134 Fed. 810; 67
C C A. 456 646
Southport, etc. Banking Co.,
55 L. J. Ch. 497 191, 193
Sovereen, etc. Co. v. Whitside,
12 Ont. L. R. 638 994, 997,
1165, 1165, 1204
Spackman v. Evans, L. R. 3
H. L. 171 665
V. Lattimore, 3 Giff. 16 629,
962
Spader v. Mural Decoration
Mfg. Co., 47 N. J. Eq. 18;
20 Atl. 378 1242
Spangler v. Indiana, etc. Ry.
Co., 21 111. 276 607
Spargo's Case, 8 Ch. 407 642, 642
Sparks ■1). Company-, etc. of the
Liverpool Waterworks, 13
Ves. 428 581, 662
V. Dispatch Transfer Co.,
104 Mo. 531; 15 S. W. 417;
24Am. St. Rep. 351; 12 L.
R. A. 714 1381
V. Dunbar, 102 Ga. 129;
29 S. E. 295 874, 875, 878
V. Farmers' Bank, 3 Del.
Ch. 274 1185
V. Lower Payette Ditch
Co., 2 Idaho 1030; 29
Pac. 134 652
V. Woodstock Iron, etc.
Co., 87 Ala. 294 ; 6 So. 195 130,
220
Sparrow v. E. Bement &
Sons, 142 Mich. 441; 105
N. W. 881 1660
Spaulding v. North Milwaukee
Town Site Co., 106 Wise.
481; 81 N. W. 1064 322,
982, 1331
Spear v. Crawford, 14 Wend.
(N. Y.) 20; 28 Am. Dec.
513 156
V. Grant, 16 Mass. 9 1127
Speer v. Bordeleau (Colo.), 79
Pac. 332 630, 645
V. Colbert, 200 U. S. 130;
26 Sup. Ct. 201 1186
Speight Mfg. Co., Boultbee's
Case, 16 Ont. App. 508,
519 212
Speir, Re, 69 N. Y. App. Div.
149; 74 N. Y. Supp. 555 430
Spellissy v. Cook & Bem-
heimer Co., 58 N. Y. App.
Div. 283; 68 N. Y. Supp.
995 748, 798
Spence v. Mobile, etc. Ry. Co.,
79 Ala. 576 1416, 1433, 1437
Spencers. Brooks, 97 Ga. 681 ;
25 S. E. 480 1611, 1614
V. James, 10 Tex. Civ.
App. 327; 31 S. W. 540;
43 S. W. 556 751
Spering's Appeal, 71 Pa. St.
11; 10 Am. Rep. 684 1268,
1274, 1278
Sperry v. Dransfield, 2 New
Zeal. (Sup. Ct.) 319 588
clxxxix
TABLE OF CASES
[The references are to pages]
Spier V. Hyde, 92 N. Y. App.
Div. 467; 87 N. Y. Supp.
285 335
Spies V. Chicago, etc. R. Co.,
30 Fed. 397 1529, 1586, 1679
V. Chicago, etc. R. Co.,
40 Fed. 34; 6L.R.A. 565
1679,
1680
Spiller V. Paris Skating Rink
Co., 7 Ch. D. 368
Spinney v. Meloon (N. H.), 68
Atl. 410 1502, 1534, 1534
Spinning v. Home Building,
etc. Ass'n, 26 Oh. St. 483
Spiral Globe (1902), 2 Ch. 209
Spitzel V. Chinese Corp., 15
Times L. R. 281
Spokes V. Grosvenor Hotel,
etc. Co. (1897), 2 Q. B. 124
286
138
1396
193
974,
975
1144
16
337
733
Spooner v. Phillips, 62 Conn.
62; 24 Atl. 524; 16L.R.A.
461
Spotswood V. Morris (Idaho),
85 Pao. 1094
Spottiswoode's Case, 6 De G.
M. & G. 345
Sprague v. Cocheco Mfg. Co.,
10 Blatchf. 173
V. National Bank of
America, 172 111. 149; 50
N. E. 19; 64 Am. St. Rep.
17; 42 L. R. A. 606 620, 647
V. Smith, 29 Vt. 421 ; 70
Am. Dec. 424 1582, 1582
Spreckels v. Gorrill (Cal.), 92
Pac. 1011 181, 184
V. Nevada Bank, 113 Cal.
272; 45 Pac. 329; 33 L. R.
A. 459; 54 Am. St. Rep.
348 807, 810
Sprigg V. Commonwealth
Title Ins., etc. Co., 206 Pa.
St. 548; 56 Atl. 33 1412
Spring Co. v. Knowlton, 103
U. S. 49 493, 493, 632
Spring Valley Water Works,
17 Cal. 132 103
V. San Francisco, 22 Cal.
434 228, 304
Springer v. Bigford, 55 111.
App. 198
V. Chicago Real Estate,
etc. Co., 202 ni. 17; 66
N. E. 850
Springfield Wagon Co. v.
Bank of Batesville, 68 Ark.
234; 57S. W. 257
Sproat V. Porter, 9 Mass. 300
408
848
770
308
Sproul V. Standard Glass Co.,
201 Pa. 103; 50 Atl. 1003 767,
768, 1284
S. P. Smith Lumber Co., 132
Fed. 618 518
, 132 Fed. 620 85, 838
Squair v. Lookout Mountain
Co., 42 Fed. 729 941
Squires v. Brown, 22 How. Pr.
(N. Y.) 35 202, 205, 1181, 1182,
1262, 1359
Stace and Worth's Case, 4 Ch.
682 193, 1163, 1164
Stackpole v. Seymour, 127
Mass. 104 751
Stacy V. Bank of Illinois, 5 111.
91 1298
V. Cherokee, etc. Works,
70 S. Car. 178; 49 S. E. 223 1321
V. Glen EUyn Hotel, etc.
Co., 223 ni. 546; 79 N. E.
133 81
Stafford v. Produce Exchange
Banking Co., 61 Oh. St. 160 ;
55 N. B. 162; 76 Am. St.
Rep. 371 574, 775
V. Produce Exchange
Banking Co., 16 Oh. Cire.
Ct. 50 557
V. St. John, 164 Ind. 277;
73 N. E. 596 1359
Stafford Bank v. Palmer, 47
Conn. 443 252
Stafford Springs St. Ry. Co.
V. Middle River Mfg. Co.
(Conn.), 66 Atl. 775 1199, 1200
Staffordshire Gas & Coke Co.,
66 L. T. 413 1227, 1230
Stainback v. Junk Bros., etc.
Co.,98Tenn.306; 39S. W.
530 1489
Stainsby v. Frazer's Metallic,
etc. Co., 3 Daly (N. Y.) 98
Standard Bank of Australia,
24 Vict. L. R. 304
Standard Gold Mining Co. v.
Byers, 31 Wash. 100; 71
Pac. 766
Standard Mfg. Co. (1891), 1
Ch. 627
Standard Oil Co. v. Comm.
(Ky.), 91 S. W. 1128
Standard Telephone &
Electric Co., 157 Fed. 106
Standing v. Bowring, 31 Ch. D.
282
Stanford Land Co. v. Steidle,
28 Wash. 72; 68 Pac. 178
283,
287
1191
1250
1395
232
1553
704
230
TABLE OF CASES
[The references are to pages]
Stanley v. Chester, etc. Ry.
Co., 3 Myl. & C. 773 281
V. Luse, 36 Oreg. 25; 58
Pao. 75 1296, 1312
V. Moore, 17 Vict. L. R.
285 , 928
r V. Sheffield Land, etc.
Co., 83 Ala. 260; 4 So. 34 1372
Stanley's Case, 33 L. J. Ch.
535 65, 1513
Stanton v. Alabama, etc. R.R.
Co., 31 Fed. 585 1651, 1652
V. Alabama, etc. R. R.
Co., 2 Woods 506 1651, 1652,
1653
V. Alabama, etc. R. R.
Co., 2 Woods 523 1489, 1494,
1525, 1530
V. Gilpin, 38 Wash. 191;
80 Pac. 290 1262
■». New York, etc. Ry. Co.
59 Conn. 272; 22 Atl. 300;
21 Am. St. Rep. 110 283
Stanwood v. Sterling Metal
Co., 107 m. App. 569 239, 247
Staples V. Eastman's Photo-
graphic, etc. Co. (1896), 2
Ch. 303 459
Star Loan Ass'n v. Moore, 4
Penn. (Del.) 308; 55 Atl.
946 557
Stark Bank v. U. S. Pottery
Co., 34 Vt. 144 92, 1187, 1296
Stark, Ex parte (1897), 1 Ch.
575 350, 350, 351, 351, 353,
354, 362, 363, 364, 364
Starkey v. Bank of England
(1903), A. C. 114 701, 758
Starkweather v. American
Bible Soc, 72 HI. 50; 22
Am. Rep. 133 69
Starr v. Shepard (Mich.), 108
N. W. 709 . 946
Starrett v. Rockland, etc. Ins.
Co., 65 Me. 374 210
State V. Baltimore, etc. R. R.
Co., 6 Gill (Md.) 363 498, 1103,
1111, 1116, 1119, 1119, 1119,
1122
V. Bank of Charleston,
Dud. (S. Car.) 187; 35
Am. Dec. 135 500
V. Bank of Louisiana, 6
La. 745 . 1111
V. Bank of Louisiana, 5
Mart. N. 8. (La.) 327 1111, 1112
V. Bank of Ogalalla, 65
Nebr. 20; 90 N. W. 961;
91 N. W. 497 518, 520, 520, 529
998
6
429
1633
94
263
480
1583
State V. Bonnell, 35 Oh. St. 10
V. Brown, 64 Md. 199; 1
Atl. 54; 6 Atl. 172 1436, 1583,
1624
V. Brown, 73 Md. 484;
21 Atl. 374 1673, 1682, 1682
V. Brown (Utah), 93 Pac.
52 230, 231
V. Cape Girardeau, etc.
Road Co. (Mo.), 105 S. W.
761
V. Carpenter, 51 Oh. St.
83; 37 N. E. 261; 46 Am.
St. Rep. 556
V. Central Iowa Ry. Co.,
71 Iowa 410; 32N.W.409;
60 Am. Rep. 806
V. Central Ohio, etc.
Ass'n, 29 Oh. St. 399
V. Chute, 34 Minn. 135;
24 N. W. 353 1032, 1057, 1060
V. Collins (R. I.), 67 Atl.
796
V. Consolidated Gas, etc.
Co. (Md.), 65 Atl. 40
V. Consolidated Ry. Co.,
67 Me. 479
V. Consolidation Coal Co.,
46 Md. 1 42, 867
V. Cowen, 94 Md. 487;
51 Atl. 171 1682
V. Curtis, 9 Nevada 325 557,
561, 1206, 1225, 1225, 1227
V. Debenture Guarantee,
etc. Co. (La.), 26 So. 600 46,
258
V. Ferguson, 33 N. H.
424 567
V. Ferris, 42 Conn. 560 1017,
1024,'ll76, 1176, 1178
V. Florida Central R. R.
Co., 15 Fla. 690 393, 986, 1500
V. Franklin Bank, 10 Oh.
St. 91 499, 516, 525
V. Glenn, 18 Nevada 34;
1 Pac. 186
K.Harris, 3 Ark. 570; 36
Am. Dec. 460
V. Home Co-operative
Union, 63 Oh. St. 547; 59
N. E. 220
V. How, 1 Mich. 512
V. Hunton, 28 Vt. 594
V. Kupferle, 44 Mo. 154;
100 Am. Dec. 265 1226, 1231
V. Leete, 16 Nevada 242 1019,
1176, 1177
V. Lehre, 7 Rich. Law
(S. Car.) 234 1065
1512
1231
23
252
1025
TABLE OF CASES
[The references are to pages]
State V. MoDaniel, 22 Oh. St.
354 1031, 1066, 1169, 1249
V. McGrath, 86 Mo. 241- 1006
V. Marchant, 37 Oh. St.
2.51 1059, 1059, 1062
V. Mead, 27 Vt. 722 25
V. Morristown Fire Ass'n,
23 N. J. Law 195 416
• V. Nebraska Distilling
Co., 29 Nebr. 700; 46
N. W. 155 263
V. New Orleans, etc.
R. R. Co., 20 La. Ann. 489 1027,
1066, 1067
V. New Orleans Water
Supply Co., Ill La. 1049;
36 So. 117 39, 261
V. Northern Central Ry.
Co., 18 Md. 193 1510, 1604,
1676
V. Oberlin Bldg., etc.
Ass'n, 35 Oh. St. 258 517, 525
V. Overton, 24 N. J. Law
435; 61 Am. Dec. 671 569
V. Pan American Co.
(Del.), 61 Atl. 398 895, 906
V. Patterson, 159 Mo. 98;
59 S. W. 1104 384
V. Perkins, 90 Mo. App.
603 1203, 1210
V. Pettineli, 10 Nevada
141 994, 1006, 1023, 1056
V. Pittam, 32 Wash. 137 ;
72 Pac. 1042 231
V. Port Royal, etc. Ry.
Co., 45 S. Car. 470; 23
S. E. 383 958, 968, 1646, 1647
V. Port Royal, etc. Ry.
Co., 84 Fed. 67 1615, 1617
V. Railroad Commis-
sioners, 41 N. J. Law 235 1618
V. Rohlffs, 19 Atl. Rep.
1099 (N. J.) 1042
V. Scott County, etc.
Road Co. (Mo.), 105 S. W.
752 106
V. Smith, 15 Oreg. 98;
14 Pac. 814; 15 Pac. 137,
386 1018, 1022, 1058, 1066,
1176, 1217
V. Spartansburg, etc.
R. R. Co., 8 S. Car. 129 1452,
1453, 1465
V. Stockley, 45 Oh. St.
304; 13 N. E. 279 1016
V. Stone, 118 Mo 388;
24 S. W. 164; 25 L. R. A.
243; 40 Am. St. Rep. 388 25, 25
V. Stormont, 24 Kan. 686 106
State V. Taylor, 55 Oh. St. 61;
44 N. E. 513 47, 125, 133, 134
V. Topeka Water Co., 61
Kans. 547; 60 Pac. 337 1521
V. Tudor, 5 Day (Conn.)
329; 5 Am. Dec. 162 1040, 1040,
1249
V. Wright, 10 Nevada
167 996
State ex inf. Atty.-Gen. v.
Hogan, 163 Mo. 43; 63
S. W. 378 240
State ex inf. Hadley v. Delmar
Jockey Club (Mo.), 92 S. W.
185 262
V. Meramec Rod, etc.
Club (Mo.), 98 S. W. 815 262
State ex rel. Atty.-Gen. v.
Conklin, 34 Wise. 21 590, 591
V. Lee, 21 Oh. St. 662 119
V. Wood, 13 Mo. App.
139 219, 645
State ex rel. Bellamore v.
Rombotis (La.), 45 So. 43 1007
State ex rel. Benedict v.
Southern Mineral, etc. Co.,
108 La. 24; 32 So. 174 431
State ex rel. Bergenthal v.
Bergenthal, 72 Wise. 314;
39 N. W. 566 900, 906
State ex rel. Biddle v. Superior
Court (Wash.), 87 Pac. 40 175,
921
State ex rel. Bomefield v.
Rombauer, 46 Mo. 155 751
State ex rel. Bourdette v. Gas-
light Co., 49 La. Ann. 1556;
22 So. 815 892, 898, 900, 902
State ex rel. Bradford v. West-
ern Irrigating Co., 40 Kans.
96; 19 Pac. 349; 10 Am.
St. Rep. 166 18, 388
State ex rel. Brun v. Oftedal,
72Miun. 498 ; 75 N. W. 692 1 162
State ex rel. Bruning v. Hobo-
ken Printing, etc. Co., 67
N. J. Law 119; 50 Atl. 906 895,
905
State ex rel. Bugbeeu. Holmes,
60 Nebr. 40 984
State ex rel. Burke v. Citizens'
Bank, 51 La. Ann. 426; 25
So. 318 896, 903, 904, 904
State ex rel. Canal Bank v.
North American, etc. Co.,
112 La. 441; 36 So. 488 807
State ex rel. Carolina Iron Co.
V. Abernethy, 94 N. Car.
545 228
TABLE OF CASES
[The references are to pages]
State ex rel. Carroll v. Coriiing
State Savings Bank (Iowa),
113 N. W. 500 864
State ex reL Clapp v. Critoh-
ett, 37 Minn. 13; 32 N. W.
787 117, 137, 137
State ex rel. CoUings v. Beck,
81 Ind. 500 , 117
State ex rel. Columbia R. R.
Co. V. Superior Court,
(Wash.), 88 Pac. 332 175, 921
State ex rel. Corey v. Curtis,
9 Nevada 325 557, 561, 1206,
1225, 1225, 1227
State ex rel. Cuppel v. Mil-
waukee Chamber of Com-
merce, 47 Wise. 670; 3
N. W. 760 580
State ex rel. Dent v. HoUoway,
1 Oh. arc. Dec. 90 1016
State ex rel. Donnell Mfg. v.
McGrath, 86 Mo. 239 488
State ex rd. Doyle v. Laugh-
lin, 53 Mo. App. 542 895, 903
State ex rel. Elliot v. Guer-
rero, 12 Nevada 105 429
State ex rel. Ely, etc. Co. v.
Swanger, 195 Mo. 539; 93
S. W. 932 487
State ex rel. English v. Laz-
arus (Mo.), 105 S. W. 780 894,
895, 906
State ex rd. Fears v. New
Orleans, etc. Exchange,
112 La. 868; 36 So. 760 906
State ex rd. Frank v. Swanger,
190 Mo. 561; 89 S. W. 872 473,
473, 1028
State ex rel. Gorman v. Nich-
. ols (Wash.), 82 Pac. 741 114
State ex rel. Grimm v. Man-
hattan Rubber Co., 149 Mo.
181; 50 S. W. 321 1198, 1212,
1328
State ex rel. Higby v. Higby
Co. (Iowa), 106 N. W. 382 55,
56, 527
State ex rel. Home Bldg.,
etc. Ass'n ■e. Rotwitt, 17
Mont. 537; 43 Pac. 922 125,
488
State ex rel. Howe v. Shelby-
ville, etc. Turnpike Co., 41
Ind. 151 100
State ex rel. Howerton v.
Tate, 70 N. Car. 161 1228
State ex rel, Hutchinson v.
McGrath, 92 Mo. 355; 5
S. W. 29 . 125, 374, 376
State ex rel. Jackson v. New-
man, 51 La. Ann. 833; 25
So. 408; 72 Am. St. Rep.
476 1026
State ex rel. Johnson v. St.
Louis Transit Co. (Mo.),
100 S. W. 1126 894, 895, 904
State ex rd. Jurgens v. Con-
sumers' Brewing Co., 115
La. 782; 40 So. 45 750
State ex rel. Kennedy v. Union
Merchants' Exchange, 2 Mo.
App. 96 576, 581
State ex rel. Koons v. First
Nat. Bank, 89 Ind. 302 716
State ex rel. Lawrence v. Mc-
Gann, 64 Mo. App. 225 1061,
1065
State ex rel. Le Blanc &
Railey v. Michel, 113 La. 4;
36 So. 869 53, 54
State ex rel. Lederer v. Inter-
National Investment Co.,
88 Wise. 512; 60 N. W.
796; 43 Am. St. Rep. 920 47,
113
State ex rel. Mallinckrodt v.
McGrath, 75 Mo. 424 368
State ex rel. Martin v. Bien-
ville Oil Works Co., 28 La.
Ann. 204 894, 896, 904
V. New Orleans, etc. R.
R. Co., 30 La. Ann. 308 576, 747
State ex rel. McCay v. New
Orleans Stock Exchange,
114La. 324; 38SO.204 430,431
State ex rel. Mitchell v.
Horan, 22 Wash, 197; 60
Pac. 135 1015, 1249
State ex rel. Newark, etc. R.
R. Co. V. GoU, 32 N. J.
Law 285 1376
State ex rel. Norvell-Shapleigh
Hardware Co. v. Cook, 178
Mo. 189; 77 S. W. 559 488, 1006
State ex rel. O'Brien v. Beth-
lehem, etc. Gravel Road Co.,
32 Ind. 357 124
State ex rel. O'Hara v. Na-
tional Biscuit Co. (N. J.),
54 Atl. 241 901
State ex rel. Osborne, etc. v.
Nichols, 38 Wash. 309; 80
Pac. 462 114, 136, 386
State ex rel. Padgett v.
Foulkes, 94 Ind. 493 125
State ex rel. Page v. Smith,
48 Vt. 266 499, 509, 523, 745,
1027, 1210, 1210
cxcui
TABLE OF CASES
[The references are to pages]
State ex rel. Phillips v. New
Orleans, etc. Co., 25 La.
Ann. 413 429, 431
State ex rel. Plock & Co. v.
Cobb, 64 Ala. 127 1530
State ex rel. Rosenfeld v.
Einstein, 46 N. J. Law 479 1252
State ex rel. Ross v. Ander-
son, 31 Ind. App. 34; 67
N. E. 207 116
State ex rel. Ryan v. Cronan,
23 Nevada 437; 49Pac.41 1017,
1020, 1056, 1056, 1249, 1249
State ex rel. Sanche v. Webb,
110 Ala. 214; 20 So. 462 232
State ex rel. Schroeder v. Per-
kins, 90 Mo. App. 603 1234
State ex rel. Spinney v.
Sportsmen's Park Ass'n,
29 Mo. App. 326 902, 905, 905
State ex rel. Thompson v.
Cheraw, etc. R. R. Co., 16
S. Car. 524 415, 429, 450, 450,
455
V. Colias (Ala.), 43 So.
190 137
State ex rel. Tozer v. Probate
Court (Minn.), 113 N. W.
888 679, 816, 882
State ex rel. Voyles v. French
Lick Springs Hotel Co.
(Ind.), 82 N. E. 801 263
State ex rel. Walker v. Cork-
ins, 123 Mo. 56; 27 S. W.
363 47
State ex rel. Walkins v. Don-
nell Mfg. Co. (Mo.), 107
S. W. 1112 903, 905
State ex rel. Watkins v. North
Am. Land, etc. Co., 105 La.
379; 29 So. 910 906
State ex rel. Wilson v. St.
Louis, etc. Ry. Co., 29 Mo.
App. 301 902, 902, 903, 905
State use M. E. Church v.
Warren, 28 Md. 338 255, 303
State use Murray v. Murray,
24 Md. 310; 87 Am. Dec.
608 799
State Bank v. Cox, 11 Rich.
Eq. (S. Car.), 344 723
State Bank of Ohio v. Fox, 3
Blatchf. 431 522, 526
State Board of Agriculture v.
atizens' Ry. Co., 47 Ind.
407; 17 Am. Rep. 702 852
State Council, etc. v. Na-
tional Council, etc. (N. J.),
64 Atl. 561 378
844
1007
1381
1208
996, 1007
91
1517
State Ins. Co. v. Fanners'
Mut. Ins. Co., 65 Nebr. 34;
90 N. W. 997
V. Gennett, 2 Tenn. Ch.
100 699, 715
V. Sax, 2 Tenn. Ch. 507 715
State Nat. Bank v. Duncan,
35 So. 569
V. John Moran Packing
Co., 68 111. App. 25
V. Union Bank, 168 111.
519; 48 N. E. 82
State of Wyoming Syndicate
(1901), 2 Ch. 431
State Savings Ass'n v.
Nixon-Jones Printing Co.,
25 Mo. App. 642 558, 574
State Security Bank v. Hos-
kins, 130 Iowa 339; 106
N. W. 764
State Trust Co. v. Kansas
City, etc. R. Co., 120 Fed.
398
V. National Land, etc.
Co., 72 Fed. 575 1602, 1602
Steacy v. Little Rock, etc.
R. R. Co., 5 Dillon 348 647
Steam Dredge No. 1, 87 Fed.
760 1238, 1247
SteamNavigationCo. v. Weed,
17 Barb. (N. Y.) 378 853
Steamship Dock Co. v. Her-
on's Adm'x, 52 Pa. St. 280 578,
579, 768
Stebbins v. Merritt, 10 Cush.
(Mass.) 27 397, 406, 995, 999,
1055
Steel V. Island City, etc. Co.
(Oreg.), 83 Pac. 783
Steele v. Gold, etc. Co. (Colo.),
95 Pac. 349
V. Lawyer, 91 Pac.
958
Steele's Case, 1 Megone 246
Steger v. Davis, 8 Tex. Civ.
App. 23; 27 S. W. 1068
Stein V. Howard, 65 Cal. 616
4 Pac. 662
V. Indianapolis, etc.
Ass'n, 18 Ind. 237; 81 Am,
Dec. 353
V. Marks, 44 N. Y. Misc.
140^ 89 N. Y. Supp. 921
Steinmetz v. Versailles, etc.
Turnpike Co., 57 Ind. 457
117,
1227
Steinway, Re, 159 N. Y. 250;
53 N. E. 1103; 45 L. R. A.
461 894, 895, 903
1131
1322
1079
1203
556
630
383
552
TABLE OF CASES
[The references are to pages]
Stendell v. Longshoremen's,
etc. Ass'n, 116 La. 974; 41
So. 228 90
Stenton v. Jerome, 54 N. Y.
480 808
Stephens v. FoUett, 43 Fed.
842 165, 172
V. Mysore Reefs (Kan-
gundy) Mining Co. (1902),
1 Ch. 745 38, 98, 99
Stephenson v. Yokes, 27 Ont.
691 (Can.) 560, 560, 584, 1043
1183
Stephenson's Case (19"00), 2
Ch. 442 642
Stem V. Kirkby Lumber Co.,
134 Fed. 509 184
V. McKee, 70 N. Y. App.
Div. 142; 75 N. Y. Supp.
157 98, 213
V. Wisconsin Central
R. R. Co., 1 Fed. 555 1587
Sternberg v. Wolff, 56 N. J.
Eq. 389; 39 Atl. 397; '67
Am. St. Rep. 494; 39
L. R. A. 762 958
Stetson V. Northern Invest-
ment Co., 104 Iowa 393;
73 N. W. 869 1228, 1309, 1311
Stettauer v. N. Y., etc. Con-
struction Co., 42 N. J. Eq.
46; 6 Atl. 303 907
Stevedore's Beneficial Ass'n,
14 Phila. (Pa.) 130 111, 111,
116
Stevens v. Atchison, etc. Ry.
Co., 87 Mo. App. 26 1609
V. Buffalo, etc. R. R. Co.,
31 Barb. 590 1396
V. Carp River Iron Co.,
57 Mich. 427; 24 N. W. 160 1379
V. Davison, 18 Gratt.
(Va.) 819; 98 Am. Deo.
692 559, 560, 957, 958, 959,
959
V. Eden Meeting House
Soc, 12 Vt. 688 . 1000
V. Eldridge, 4 CliSe 348
1586
V. Hurlbut Bank, 31
Conn. 146 808
7 V. New York, etc. R. R.
Co., 13 Blatchf. 104 1617
V. New York, etc. R. R.
Co., 13 Blatchf. 412 l453, 1453
V. South Devon Ry. Co.,
9 Hare 313 450
V. South Devon Ry. Co.,
20 L. J. Ch. 491 87
Stevens i>. Union Trust Co., 57
Hun 498; 11 N. Y. Supp.
268 1586, 1688, 1590, 1645
V. U. S. Steel Corp.
(N. J.), 59 Atl. 905 nil, 1112,
1112, 1113
V. Watson, 4 Abb. Ct.
App. Dec. (N. Y.) 302 1503,
1520
Stevens Hospital v. Dyas, 15
Ir. Ch. 405 395
Stevens, Re, 187 N. Y. 471; '
80 N. E. 358 1154, 1446
Stevenson v. Dubuque, etc.
Mining Co., 34 Iowa 577 1320
Stevenson's Case, 2 Megone
360 1416, 1419
Stewart v. Austin, 3 Eq. 299 182,
187, 342, 343
V. Chesapeake, etc.
Canal.Co., 1 Fed. 361 1586
V. Chesapeake, etc.
Canal Co., 5 Fed. 149 1679,
1683, 1683, 1683
V. Erie, etc. Transporta-
tion Co., 17 Minn. 372 966
V. Firemen's Ins. Co.,
53 Md. 565 792, 797, 798, 814
V. Harris, 69 Kans. 498;
77 Pac. 277; 66 L. R. A.
261 1351, 1352
ti. Lehigh Valley R. R.
Co., 38 N. J. Law 505 1300,
1300, 1315
V. Mahoney Mining Co.,
54 Cal. 149 1010, 1021
V. Rutherford, 74 Ga.
435 177, 182, 187, 213
V. St. Louis, etc. Rail
Co., 41 Fed. 736 1309, 1320
V. Walla Walla, etc.
Pub. Co., 1 Wash. St. 521;
20 Pac. 605 617, 696, 698, 699
V. Washington, etc. S. S.
Co., 187 U. S. 466; 23 Sup.
Ct. 161 • 949
V. Wisconsin Central R.
Co., 95 Fed. 577 1569
Stewart Paper Mfg. Co. v.
Rau, 92 Ga. 511; 17 S. E.
748 236
Stewart's Appeal, 72 Pa. St.
291 1632
Stewart's Case, 1 Ch. 574 143, 214
Stickel V. Atwood, 25 R. I.
456; 56 Atl. 687 1355
Stickney's Will, Re, 85 Md.
79; 36 Atl. 654; 35L.R.A.
693; 60 Am. St. Rep. 308 847
TABLE OF CASES
[The references are to pages]
Stiewell v. Webb Press Co.
(Ark.), 94 S. W. 915 1199
Stiilman v. Dougherty, 44
Md. 380 608
Stobart V. Forbes, 13 Mani-
toba 184 54
Stobo V. Davis Provision Co.,
54 lU. App. 440 1212
Stock, Ex parte, 33 L. J. Ch.
731 915, 1174
Stoeken's Case, 3 Ch. 412 614, 667
Stooker v. Wedderbum, 3 K.
& J. 393 338
Stockholders i>. Louisville,
etc. R. R. Co., 12 Bush
(Ky.) 62 1000
Stockton V. Harmon, 32 Fla.
312; 13 So. 833 1207
Stockton, etc. Works v.
Houser, 109 Cal. 1 ; 41 Pac.
809 1200, 1201
Stockton Iron Co., 2 Ch. D.
101 774
Stoddard v. Bell & Co., 100 N.
Y.App. Div.389; 91 N. Y.
Supp. 477 980
V. Shetucket Foundry
Co., 34 Conn. 542 1122
Stoehlke v. Hahn, 158 111. 79;
42 N. E. 150 1193
Stoever v. Whitman's Lessee,
6 Binney (Pa.) 416 925
Stohr V. Musical Fund Soc,
82 Cal. 657; 22 Pac. 1125 578,
586
Stokes V. Continental Trust
Co., 186 N. Y. 285; 78
N. E. 1090 500, 500, 500, 501,
501, 506, 506, 507, 507
■». Findlay, 4 McCrary
205 147, 220
V. Lebanon, etc. Turn-
pike Co., 6 Humph. (Tenn.)
241 664
V. N. J. Pottery Co., 46
N. J. Law 237 880, 1373
Stone V. Great Western Oil
Co., 41 111. 85 1232
V. Kellogg, 165 111. 192;
46 N. E. 222; 56 Am. St.
Rep. 240; 62 111. App. 444 894,
896, 900, 902
V. Meredith, 78 L. T.
492 1157
V. Pontiac, etc. R. R. Co.,
139 Mich. 265; 102 N. W.
752 978
V. Rottman, 183 Mo. 552;
82 S. W. 76 1279, 1288
Stoney v. American Life Ins.
Co., 11 Paige Ch. (N. Y.)
635 1407
Storey, Ex parte, 6 Times L.
R. 357; 62L.T. 791 178
Storrow v. Texas, etc. Mfg.
Ass'n, 87 Fed. 612; 31 C.
C. A. 139 464, 466
Stouffer V. Smith-Davis Hard-
ware Co. (Ala.), 45 So. 621 863
Stout V. Security Trust, etc.
Co., 82 N. Y. App. Div.
129 ; 81 N. Y. Supp. 708 1245,
1247, 1248
V. Zulick, 48 N. J. Law
599; 7 Atl. 362 118, 241, 243
Stoutimore v. Clark, 70 Mo.
471 237
Stovell V. Alert Gold Mining
Co. (Colo.), 87 Pac. 1071 917
Stowe V. Flagg, 72 111. 397 129, 253
Stoystown, etc. Co. v. Gra-
ver, 45 Pa. St. 386 1196, 1196
Straker v. Wilson, 6 Ch. 503 1141
Strand Music Hall Co., 3DeG.
J. & S. 147 1416
Strang v. Camden Lodge (N.
J.), 64 Atl. 93 586
V. Montgomery, etc. R.
R. Co., 3 Woods 613 1631,
1631
— ^, Ex parte, 5 Ch. 492 613
Strange v. Houston, etc. R.
R. Co., 53 Texas 162 723, 732,
732 733
Strapp V. Bull (1895), 2 Ch. 1 1655
Stratford v. Mallory, 70 N. J.
Law 294; 58 Atl. 347 1066
Stratford, etc. Ry. Co. v.
Stratton, 2 B. & Ad. 518 611
Stratton v. Allen, 13 N. J. Eq.
229 1323
V. European, etc. Ry., 74
Me. 422 1582, 1582, 1582
V. European, etc. Ry. Co.
76 Me. 269 1582, 1582
Straus V. Eagle Ins. Co., 5
Oh. St. 59 845
V. United Telegram
Co., 164 Mass. 130; 41 N.
E. 57 1430, 1675
Stray v. Russell, 1 E. & E.
888 779, 781
Streatham & General Estates
Co. (1897), 1 Ch. 15 1513
Streator Independent Tel.,
etc. Co. V. Continental Tel.
Const. Co., 217 111. 577;
75 N. E. 546 288
TABLE OP CASES
[The references are to pages]
Street v. Maryland, etc. Ry.
Co., 59 Fed. 25 1560
Street & Co., 17 Vict. L. R.
717 115, 629
Streeten v. Robinson, 102 Cal.
542; 36 Pac. 946 1375, 1382
Streight v. Junk, 59 Fed. 321;
8 C. C. A. 137 960, 967
Strickland v. Nat. Salt Co.
(N. J.), 64 Atl. 982 440, 452, 635
Stringer, Ex parte, 9 Q. B. D. /
436 767, 776
Stringer's Case, 4 Ch. 475
1094,
1117
Strobel v. Brownell, 16 N.
Y. Misc. 657; 40 N. Y.
Supp. 702 1296
Strong V. Brooklyn Cross-
Town R. R. Co., 93 N. Y.
426 532, 540, 540, 541, 542
V. Cariyle Press (1893), 1
Ch. 268 1699
Strop V. Hughes (Mo.), 101
S. W. 146 392
Stroud V. Royal Aquarium,
etc. Soc, 89 L. T. 243 82
Strouse v. Sylvester, 134
Cal. xx; 66 Pac. 660 611
Stuart V. Hayden, 169 U. S.
1; 18Sup. Ct. 274 619
V. Valley R. R. Co., 32
Gratt. (Va.) 146 168, 209, 922
Stuart's Trusts, Re, 4 Ch. D.
213 1107
Stubbs, Ltd., Joshua (1891),
1 Ch. 475 1581, 1598
Studdert v. Grosvenor, 33 Ch.
D. 528 89
Studebaker Bros. Mfg. Co. v.
Montgomery, 74 Mo. 101 237
Stufflebeam v. De Lashmutt,
83 Fed. 449 620
— — ■ ■». De Lashmutt, 101
Fed. 367 777
Stunt V. Newark Weldless,
etc. Co., 22 Oh. Circ. Ct.
120 191, 191
Sturdevant v. Farmers', etc.
Bank, 62Nebr. 472; 87 N.
W. 156 84, 853, 861
— — - V. Farmers', etc. Bank,
69 Nebr. 220; 95 N. W.
819; 62 Nebr. 472; 87 N.
W. 156 84
Sturges V. Knapp, 31 Vt. 1 1487,
1622, 1671
V. Stetson, 1 Biss. 246 1404
V. Vanderbilt, 73 N. Y.
384 1180, 1185, 1185
Sturtevants v. City of Alton,
3 McLean 393 403
Succession of Lanaux, 46 La.
Ann. 1036; 15 So. 708 804
Succession of Thomson, 46
La. Ann. 1074; 15 So. 379 667
Suffell V. Bank of England, 9
Q. B. D. 555 1435
Sugden v. Alsbury, 45 Ch. D.
237 1142
Sullivan v. Detroit, etc. Ry.
Co., 135 Mich. 661; 98 N.
W. 756; 64 L. R. A. 673;
106 Am. St. Rep. 403 293
— — V. Parkes, 69 N. Y. App.
Div. 221; 74 N. Y. Supp.
787 1043, 1050
V. Portland, etc. R. R.
Co., 94 U. S. 806 454
Sullivan County Club v.
Butler, 26 N. Y. Misc. 306;
56 N. Y. Supp. 1 650, 651, 653
Summet v. City Realty, etc.
Co. (Mo.), 106 S. W. 614 848
Sumner v. Marcy, 3 Woodb. &
M. 105 77
Sumter Tobacco Warehouse
Co. V. Phoenix Ins. Co. (S.
Car.), 56 S. E. 654 228, 302
Sun Printing, etc. Ass'n v.
Moore, 183 U. S. 642; 22
Sup. Ct. 240 1277, 1380
Sunken Vessels Recovery Co.,
3 De G. & J. 85 189, 193
Supply Ditch Co. v. Elliott,
10 Colo. 327; 15 Pac. 691;
3 Am. St. Rep. 586 732, 747
Supreme Commandery v.
Ainsworth, 71 Ala. 436 586
Supreme Lodge v. Knight, 117
Ind. 489; 20 N. E. 479;
3 L. R. A. 409 552, 583, 586
V. Kutscher, 179 111. 340;
53 N. E. 620; 70 Am. St.
Rep. 115 552, 560, 585
V. Robbins, 70 Ark. 364;
67 S. W. 758 91S
V. Simering, 88 Md. 276;
40 Atl. 723; 71 Am. St.
Rep. 409; 41 L. R. A. 720 947,
1250, 1251
V. Trebbe, 179 111. 348;
53 N. E. 730; 70 Am. St.
Rep. 120 585
Supreme Lodge Knights of
Pythias v. Improved Order
Knights of Pythias, 113
Mich. 133; 71 N. W. 470;
38 L. R. A. 658 371
TABLE OF CASES
[The references are to pages]
Supreme Tent v. Volkert, 25
Ind.App.627; 57N.E.203
Supreme Tiibe v. Hall, 24 Ind.
App.316; 56N. E. 780; 79
Am. St. Rep. 262
Surety Guarantee & Trust
Co., 121 Fed. 73; 56 C. C.
A. 654
Susquehanna Bridge, etc.
Co. V. General Ins. Co., 3
Md. 305; 56Am. Dec. 740
589
662
44
65,
406
589
1625
481,
Susquehanna Mut. Fire Ins.
Co. V. Elkins, 124 Pa. St.
484; 17 Atl. 24
Sutherland v. Lake Superior,
etc. Co., 23 Fed. Cas. 459,
No. 13, 643
V. Olcott, 95 N. Y. 93
486, 487, 494, 529
Sutliff V. Cleveland, etc. R.
R. Co., 24 Oh. St. 147 1477
Sutton V. English & Colonial
Produce Co. (1902), 2 Ch.
502 745, 793, 793, 1177,
1177, 1177
Sutton's Hospital Case, 10
Co. 1 102, 824, 825, 825, 1273
Swan V. North British Aus-
tralasian Co. , 2 H. & C. 1 75 ; "
7 H. & N. 603 685, 685, 724
, Ex parte, 7 C. B. n. s.
400
Swann v. Oark, 110 U; S.
602; 4 Sup. Ct. 241
Swansea Dock Co. v. Levien,
20 L. J. Ex. 447
Swartley v. Oak Leaf Cream-
ery Co. (Iowa), 113 N. W.
496
Swartwout v. Michigan Air
Line R. R. Co., 24 Mich.
389 191, 193
Swazey v. Choate Mfg. Co.,
48 N. H. 200
Sweatt V. Boston, etc. R. R.
Co., 23 Fed. Cas. 530
Swedish, etc. Mission Soc. v.
Lawrence, 79 Minn. 124;
81 N. W. 756
Sweeney v. Tenn., etc. R. R.
Co. (Tenn.), 100 S. W.
732 193, 194, 609
Sweeny v. Sugar Co., 30 W.
Va. 443; 4 S. E. 431; 8
Am. St. Rep. 88
Sweet V. Montpelier Savings,
etc. Co., 69 Kans. 641; 77
Pac. 538 1355, 1357
685
1651
1000
1359
196
23
589
1315
Sweet V. Montpelier Savings,
etc. Co. (Kans.), 84 Pac.
542
Sweetland v. Quidnick Co., 11
R. I. 328
Sweney Bros. v. Talcott, 85
Iowa 103; 52 N. W. 106
1355
777
127,
160
Swentzel v. Penn. Bank, 147
Pa. St. 140; 23 Atl. 405,
415; 30 Am. St. Rep. 718;
15 L. R. A. 305 1274
Sweny v. Smith, 7 Eq. 324 666,
948, 952
Swift V. Smith, 65 Md. 428; 5
Atl. 534; 57Am. Rep. 336 873,
873, 1072, 1072, 1072
V. State ex rel. Richard-,
son, 7 Houst. (Del.) 338;
6 Atl. 856; 32 Atl. 143; 40
Am. St. Rep. 127 894, 903,
906
, Re, 105 Fed. 493 785
Swim V. Wilson, 90 Cal. 126;
27 Pac. 33; 25 Am. St. Rep.
110; 13 L. R. A. 605 683
Swindell & Co., E. v. Bain-
bridge State Bank (Ga.), 60
S. E. 13 866
Swing V. Consolidated Fruit
Jar Co. (N. J.), 63 Atl.
899 226
Swisshelm v. Swissvale Laun-
dry Co., 95 Pa. St. 367 290
Sword V. Wickersham, 29
Kans. 746 120
Sydney Harbour Collieries Co.
V. Grey, 14 Times L. R.
373; 13 Times L. R. 564 356
V. Brighton Brewery
Co., 13 W. R. 220 73
Sykes V. Beadon, 11 Ch. D.
170 260
V. People, 132 111. 32; 23
N. E. 391 387
Sylvania, etc. R. Co. v. Hoge
(Ga.), 59 S. E. 806 692, 795,
797, 996, 1011, 1012, 1049,
1068, 1164, 1185, 1205
Symon's Case, 5 Ch. 298 708
Synnott v. Cumberland Bldg.
Loan Ass'n, 117 Fed. 379;
54 C. C. A. 553 1005, 1044,
1046
V. Gumming, 1 16 Fed. 40 1085
Syracuse City Bank v. Davis,
16 Barb. (N. Y.) 188 232
Syracuse, etc. R. R. Co., 91
N. Y. 1 1251
TABLE OF CASES
[The references are to pages]
Syracuse, etc. R. R. Co. v.
Gere, 4 Hun (N. Y.) 392 301,
645
T
Taber v. Cincinnati, etc. Ry.
Co., 15 Ind. 459 1465, 1623
Tabor v. Bank of Leadville
(Colo.), 83 Pac. 1060
Tafift V. Presidio, etc. R. R.
Co., 84 Cal. 131; 24 Pac.
436; 11 L. R. A. 125; 18
Am. St. Rep. 166
Taft V. Brewster, 9 Johns (N.
Y.)334; 6 Am. Dec. 280
V. Harrison, 10 Hare 489
V. Hartford, etc. R. R.
Co., 8 R. I. 310; 5 Am.
Rep. 575
Tagart v. Northern Central
Ry. Co., 29 afd. 557
Taggart v. Western Md. R.
R. Co., 24 Md. 563; 89
Am. Dec. 760 175, 188, 188,
614
Tahourdin v. Weston-Super-
Mare Grand Pier Co., 4
Times L. R. 124
Tailby v. Official Receiver, 13
A. C. 523
Tait V. Pigott, 32 Wash. 344;
73 Pac. 364 518, 520
V. Pigott, 38 Wash. 59;
80 Pac. 172 517, 520, 520
Tait's Case, 3 Eq. 795 177
Talahasse Mfg. Co., Be, 64
Ala. 667 1423
Taliaferro v. First Nat. Bank,
71 Md. 200; 17 Atl. 1036 694,
701, 723, 724
Talladega Ins. Co. v. Peacock,
67 Ala. 253
Tallmadge v. Fishkill Iron
Co., 4 Barb. (N. Y.) 382
Talmage v. Pell, 7 N. Y. 328
845, 851
Tanner v. Nichols, 25 Ky.
Law Rep. 2191; 80 8. W.
225 235
Tanner's Case, 5 De G. & S.
182 275, 308, 309
Tapley v. Martin, 116 Mass.
275
Tar River Nav. Co. v. Neal,
3 Hawks (N. Car. )~ 520
1078
687
398
766
450
1476
1174
1504
1377
1359
77,
228
222,
601
Tarbell v. Page, 24 111. 46 126
Tasker & Sons, W. (1905), 2
• Ch. 587 1418, 1473, 1473, 1524
Tate V. Bates, 118 N. Car.
287; 24S. E. 482; 54 Am.
St. Rep. 719 1355, 1357
Taunton v. Royal Ins. Co.,
2 Hem. & Mill. 135 81, 931
V. Sheriff of Warwick-
shire (1895), 2 Ch. 319 1546
Taurine Co., Re, 25 Ch. D.
118 707, 763, 1215, 1215
Taussig V. St. Louis, etc. R. R.
Co., 186 Mo. 269; 85 S.
W. 378 293, 1246
Tavaglini v. Societa Italiane,
5 Pa. Dist. R. 441 222
Tayler v. Great Indian
Peninsula Ry. Co., 4 De G.
6 J. 559 685
Taylor v. Atlantic, etc. Ry.
Co., 55 How. Pr. (N. Y.)
275 1672
V. Atlantic, etc. R. R.
Co., 57 How. Pr. (N. Y.)
26 1485, 1494
V. Burlington Cotton
Mills, 8 Hun (N. Y.) 1 22
V. Cummings, 127 Fed.
108; 62C. C. A. 108 635
V. Decatur Mineral, etc.
Co., 112 Fed. 449 957, 969
V. Griswold, 2 Green 222
(14 N. J. Law); 27 Am.
Dec. 33 1000, 1013, 1013,
1014, 1015, 1040, 1040
V. Heggie, 83 N. Car.
244 398
V. Miami Exporting Co.,
6 Ohio 176 517, 526
V. Modem Woodmen, 72
Kans. 443; 83 Pac. 1099 590
V. Philadelphia, etc. R.
R. Co., 7 Fed. 377 1659, 1649
V. Philadelphia, etc. R.
R. Co., 7 Fed. 381 1062
V. Philadelphia, etc. R.
R. Co., 7 Fed. 386 68
V. Philadelphia, etc. R.
R. Co., 9 Fed. 1 1541, 1649
V. Pilsen Joel El. Light
Co., 27 Ch. D. 268 516
V. Portsmouth, etc. Ry.
Co., 91 Me. 193; 39 Atl.
560; 64 Am. St. Rep. 216 226
V. R. D. Scott & Co.
(Mich.), 113 N. W. 32 1068,
1199, 1210, 1212
V. South, etc. R. R. Co.,
13 Fed. 152 444
V. Southerlin-Meade To-
bacco Co. (Va.), 60 S. E. 132 1379
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TABLE OF CASES
[The references are to pages]
Texas, etc. R. R. Co. v.
Barber, 31 Tex. Civ. App.
84; 71 S. W. 393 381
Texas, etc. Ry. Co. v. Bledsoe,
2 Tex. Civ. App. 88; 20 S.
W. 1135 1609
i>. Bloom, 60 Fed. 979;
9 C. C. A. 300 1610
1). Cox, 145 U.S. 593; 12
Sup. Ct. 905 1615, 1617
V. Gaal, 14 Tex. Civ.
App. 459; 37 S. W. 462 1610
V. Geiger, 79 Tex. 13; 15
S. W. 214 1610, 1619
V. Huffman, 83 Tex. 286;
18 S. W. 741 1609, 1610
V. Johnson, 151 U. S. 81;
14 Sup. Ct. 250 1609, 1610,
1617, 1619
V. Marlor, 123 U. S. 687;
8Sup.a.311; 19 Fed. 867 1458,
1528, 1675
V. Watts (Tex.), 18 S. W.
Rep, 312 1610
Thames Haven, etc. Co. v. '
Rose, 4 Man. & G. 552 1205
Thames Tunnel Co. v. Sheldon,
6 B. & C. 341 162
Thatcher v. Consumers' Gas,
etc. Co. (N. J.), 66 Atl. 934 64
Thayer v. Butler, 141 U. S.
234; 11 Sup. Ct. 987 490
V. Herrick, 23 Fed. Cas.
899 560
V. Wathen, 17 Tex. Glv.
App. 382; 44 S. W. 906 424
Theis V. Durr, 125 Wise. 651 ;
104 N. W. 985; 110 Am.
St. Rep. 880; 1 L. R. A.
N. 8. 571 529, 534, 534, 534,
538, 951
Thellusson v. Valentia (1907),
2 Ch. 1; (1906) 1 Ch. 480 73, 133
Thew V. Porcelain Mfg. Co., 5
S. Car. 415 394, 1371
Thigpen v. Mississippi Central
R. R. Co., 32 Miss. 347 194, 625
Third Avenue R. R. Co. v.
Ebling, 12 Daly (N. Y.) 99 1215,
1372
Third Nat. Bank v. Buffalo
German Ins. Co., 193 U. S.
581; 24 Sup. Ct. 524 114, 572,
573, 714
V. Eastern R. R. Co., 122
Mass. 240 1405
Third Street, etc. Ry. Co. v.
Lewis, 79 Fed. 196; 24
C. C. A. 482 1641
cci
Thistle V. Jones, 45 N. Y. Misc.
215; 92 N. Y. Supp. 113 282,
302, 304
Thomas v. Brownville, etc.
R. R. Co., 109U. S. 522; 3
Sup. Ct. 315 1303, 1316, 1433
V. Cincinnati, etc. Ry.
Co., 62 Fed. 17 1620
V. Cincinnati, etc. Ry.
Co., 62 Fed. 669 1621
V. Cincinnati, etc. Ry.
Co., 77 Fed. 667 1612
V. City of Richmond, 12
Wall. 349 840
V. East Tennessee, etc.
Ry. Co., 60 Fed. 7 1575, 1642
V. Gregg, 78 Md. 545; 28
Atl.565;44Am.St.Rep.310 1150
V. Musical, etc. Union,
121N. Y. 45; 24 N. E. 24;
8 L. R. A. 175 583, 948
V. New York, etc. Ry.
Co., 139N. Y. 163; 34N.E.
877 1500, 1679, 1679
V. Penniman (Md.), 66
Atl. 291 1280
V. Railrd^d Co., 101 U. S.
71 52, 836
V. Societa Italiena, 10
N. Y. Misc. 746; 31 N. Y.
Supp. 816 591
V. Western Car Co., 149
U. S. 95; 13 Sup. a. 824 1568,
1612, 1643, 1654
Thomas F. Meton & Sons v.
Isham Wagon Co., 4 N. Y,
Supp. 215
Thomas, Re, 14 Q. B. D. 379
Thomasson v. Grace M. E.
Church, 113 Cal. 558; 45
Pac. 838
Thompson v. Alexander
(1905), 1 Ch. 229
V. Commercial, etc. Ass.
Co. (Colo.), 78 Pac. 1073
V. Erie Ry. Co., 11 Abb.
Pr. N. 8. 188
V. Erie Ry. Co., 9 Abb.
Pr. N. 8. 212
V. Erie Ry. Co., 45 N. Y.
468
V. Fairbanks, 196 U. S.
516; 25 Sup. a. 306
V. Huron Lumber Co., 4
Wash. 600; 30 Pac. 741;
31 Pac. 25
V. Lambert, 44 Iowa 239
1364
260,
301
1377
70
237
448
890
475
1506
1553
63,
65, 854, 861, 1407
TABLE OF CASES
[The references are to pages]
Thompson v. Lee County, 3
Wafl. 327 1448
V. Natchez Water Co., 68
Miss. 423 ; 9 So. 821 1187, 1208,
1208
V. N. Y., etc. R. R. Co.,
3 Sandf. Ch. (N. Y.) 625,
651 251
V. Perrine, 106 U. S.
589; 1 Sup. Ct. 564 1451
V. St. Nicholas Nat.
Bank, 146 U. S. 240; 13
Sup. Ct. 66 866
V. Scott, 4 Dill. 508 1616,
1616
V. Swoope, 24 Pa. St. 474 69
V. Toland, 48 Cal. 99 799, 812
V. Trustees, etc. Corpora-
tion (1895), 2 Ch. 454 511
V. White Water Valley
R. R. Co., 132 U. S. 68; 10
Sup. Ct. 29 1537
V. Williams, 76 Cal. 153;
18 Pac. 153 ; 9 Am. St. Rep.
187 1198
Thompson Co. v. Brook, 37
N. Y. St. Rep. 50ff; 14
N. Y. Supp. 370 - 1238
Thompson's Estate, 33 Barb.
(N. Y.) 334 55
Thompson-Houston, etc. Co.
V. Dallas, etc. Ry. Co., 54
Fed. 1001; 5 C. C. A. 11 628
Thomson, Succession of, 46
La. Ann. 1074; 15 So. 379 667
Thomson's Case, 4 De G. J. &
S. 749 159, 633
, 34 L. J. Ch. 525 169
Thomson's Estate, 153 Pa. St.
332; 26 Atl. 652, 653 503
Thorington v. Gould, 59 Ala.
461 ' 1185
Thorn v. City Rice Mills, 40
Ch. D. 357 1462, 1472
V. Nme Reefs, 67 L. T. 93
1416, 1603, 1604
Thornsburgh v. Newcastle, etc.
R. R. Co., 14 Ind. 499 194
Thornton v. Balcom, 85 Iowa
198; 52N. W. 190 108, 131, 149
V. Marginal Freight Ry.
Co., 123 Mass. 32 232
V. Martin, 116 Ga. 115;
42 S. E. 348 751, 787
V. Wabash Ry. Co., 81
N. Y. 462 1664
Thorpe v. Pennock Mercantile
Co. (Minn. ), 108 N. W. 940 155,
298, 299
Thrasher v. Pike R. R. Co., 25
111. 393 198
Thruston v. Big Stone Gap
Imp. Co., 86 Fed. 484 1585
Thunder Hill Mining Co., 4
Brit. Columb. 61 492
Thurber v. Crump, 86 Ky. 408 ;
6 S. W. 145 715
Ticonic Water, etc. Co. ■».
Lang, 63 Me. 480 171
Tiessen v. Henderson (1899),
1 Ch. 861 953, 1002, 1003
Tift V. Quaker City Nat.
Bank, 141 Pa. St. 550; 21
Atl. 660 280, 288
Tilbury Portland Cement Co.,
62 L. J. Ch. 814 11, 66
Tilford V. Atlantic Match Co.,
134 Fed. 924 1510, 1536
Tilley v. Coykendall, 69 N. Y.
App. Div. 92; 74 N. Y.
Supp. 631 874
Tillinghast v. Bailey, 86 Fed.
46 489, 492
V. Troy, etc. R. R. Co.,
48 Hun (N. Y.) 420; 1
N. Y. Supp. 243 1585, 1596, 1624
Tillyer v. Hero Jar Co., 17
Phila. (Pa.) 153
Tilson V. Warwick Gas Light
Co., 4 B. & C. 962
Timberlake v. Shippers' Com-
press Co., 72 Miss. 323; 16
So. 530 718, 1134
Timmins & Sons, Ebenezer
(1902), 1 Ch. 238 149, 155, 205,
642
Timolat v. Held Co., 17 N. Y.
Misc. 556; 40 N. Y. Supp.
692
Tinker v. Ifler, 195 Mo. 183;
94 S. W. 501
Tinsdale v. Harris, 20 Pick. 9
(Mass)
Tippecanoe County v.
Reynolds, 44 Ind. 509; 15
Am. Rep. 245
Tippets V. Walker, 4 Mass.
595
Titus V. Cairo, etc. R. R. Co.,
37 N. J. Law 98
V. Great Western Turn-
pike Road, 61 N. Y. 237
■». Mabee, 25 111. 257
T. J. Moss Tie Co. v. Common-
wealth (Ky.), 105 S. W. 163
Tobey v. Hakes, 54 Conn. 274;
7 Atl. 551; 1 Am. St. Rep.
114 751
881
295
1181
185
422
1352
398
1370
741
1503
368
TABLE OF CASES
[The references are to pages]
Tobin V. Roaring Creek, etc.
R. R. Co., 86 Fed. 1020
917,
1371
Tobin Canning Co. v. Fraser,
81 Tex. 407; 17 S. W. 25 1343
Tod V. Kentucky Union Ry.
Co., 57 Fed. 47; 6 C. C. A.
685 77, 875, 876, 877, 1106,
1408, 1433
Todd V. Moorehouse, 19 Eq.
69 815
V. Taft, 7 Allen (Mass.)
371 ."■ 786
Toledo Portland Cement Co.,
156 Fed. 83 44
Toledo, etc. R. R. Co. v. Con-
tinental Trust Co., 95 Fed.
497; 36 C. C. A. 155 244, 444,
468, 469, 645, 1260, 1329,
1404, 1628
V. Hamilton, 134 U. S.
296; 10 Sup. Ct. 546 1508,
1538, 1539, 1542, 1550,
1566
Toler V. East Tennessee, etc.
Ry. Co., 67 Fed. 168 1051,
1585, 1589, 1689, 1592,
1592, 1593, 1593
Tombler v. Palestine Ice Co.,
17 Tex. dv. App. 596; 43
8. W. 896 715
Tome V. King, 64 Md. 166; 21
Atl. 279 1641
V. Parkersbuig Branch
R. R. Co., 39 Md. 36; 17
Am. Rep. 540 593, 740
Tomlin v. Farmers', etc. Bank,
52 Mo. App. 430 1016, 1029,
1030, 1067
Tomlin's Case, 14 Times L. R.
53 189
(1898), 1 Ch. 104 181
Tompkins v. Sperry, 96 Md.
560; 64 Atl. 254 330, 331, 331,
1006
Tompkins Co., D. A. v.
Catawba Mills, 82 Fed. 780 958,
1485, 1586
V. Chester Mills, 90 Fed.
37 1492
Tomkinson v. South Eastern
Ry. Co., 35 Ch. D. 675 81, 949
Tontine Surety Co., 116 Fed.
401 22, 44
Toppan V. Cleveland, etc.
R. R. Co., 1 Flippin 74 1437
Toppin V. Lomas, 16 C. B. 145 1439
Topping V. Bickford, 4 Allen
(Mass.) 120 233
1606
1447
1380
944
173
456
1598
286
791
698
Torbett v. Eaton, 49 Hun
(N. Y.)209; 1 N. Y. Supp.
614 1365
Torbeck v. Westbuiy (1902),
2 Ch. 871 1004
Toronto Brewing Co. v. Blake,
2 Ont. 175 994, 996, 1015, 1205
Toronto Gen. Trusts Corp. v.
Central Ontario Ry. Co., 6
Ont. L. R. 1
V. Central Ont. Ry. Co.,
6 Ont. L. R. 534
Torrey v. Dustin Monument
Ass'n, 5 Allen (Mass.) 327
V. Toledo Portland
Cement Co. (Mich.), 113
N. W. 680
Tothill's Case, 1 Ch. 85
Totten & Co. v. Tison, 64 Ga.
139
Tottenham v. Swansea Zinc
Ore Co., 63 L. J. Ch. 776
Touche V. Metropolitan Ware-
housing Co., 6 Ch. 671
Tourtelot V. Finke, 87 Fed.
840
V. Stoleben, 101 Fed.
362
Towers v. African Tug Co.
(1904), 1 Ch. 558 951, 966, 966,
1101
Town of Eagle v. Kohn, 84
ni. 292 1451
Town of East Rome v. City of
Rome (Ga.), 58 S. E. 854 107,
381, 382
Town of Pawlet'v. Clark, 9
Cranch 292 302
Townes v. NichoUs, 73 Me.
515 429
Townsend v. Mclver, 2 S. Car.
25 744, 745, 749, 750
V. Oneonta, etc. Ry. Co.,
88 N. Y. App. Div. 208; 84
N. Y. Supp. 427
Townsend's Case, 13 Eq. 148
Tracy v. Tahnage, 14 N. Y.
162; 67 Am. Dec. 132 856,861,
865, 867
Traders' Mut. Life Ins.' Co. v.
Humphrey, 109 111. App.
246; affii-ming, 69 N. E.
875
Traders' Nat. Bank v. Law-
rence Mfg. Co., 96 N. Car.
298 ; 3 S. E. 363 1401, 1542,
1642
Tradesman Pub. Co. v. Car
Wheel Co., 96 Tenn. 634;
1649
167
591
TABLE OP CASES
[The references are to pages]
32 S. W. 1097; 31 L. R.
A. 593; 49 Am. St. Rep.
943 1094
Traer v. Lucas Prospecting
Co., 124 Iowa 107; 99
N. W. 290 52, 57, 72
Trainor v. German-American
Bldg. Ass'n, 204 lU. 616; 68
N. E. 650 914, 920
Trammell v. Pennington, 45
Ala. 673 150
Transport, Ltd., v. Schon-
berg, 21 Times L. R. 305 996,
1182, 1231
Transvaal Exploring Co. v.
Albion Gold Mines (1899),
2 Ch. 370 640
Travers v. Leopold, 124 111.
431; 16 N. E. 902 812
V. North Carolina R. R.
Co., 133 N. Car. 322; 45
S. E. 651 430
Trawick v. Peoria, etc. Ry.
Co., 68 III. App. 156 591
Treadway v. Johnson, 33 Mo.
App. 122 782
Treadwell v. Clark (N. Y.), 82
N. E. 505 810
V. Clark, 114 N. Y. App.
Div. 493; 100 N. Y.
Supp. 1 722, 724
V. Salisbury Mfg. Co., 7
Gray (Mass.) 393; 66 Am.
Dec. 490 72
Treasurer v. Commercial
Mining Co., 23 Cal. 390 786, 786
Tres Palacios, etc. Co. v. Eid-
man (Tex.), 93 S. W. 698 592
Trevor v. Whitworth, 12 App.
Cas. 409 51, 516, 516, 516, 523,
524, 564, 657, 830
Triesler v. Wilson, 89 Md.
169; 42 Atl. 926 577, 578, 1060
Trimble v. Am. Sugar Ref.
Co., 61 N. J. Eq. 340; 48
Atl. 912 907, 969, 1113
V. Union Nat. Bank, 71
Mo. App. 467 735, 737, 738
Trinder v. Trinder, 1 Eq. 695 414
Triplett v. Fauver, 103 Va.
123; 48 S. E. 875 1203, 1246
Tripp V. Northwestern Nat.
Bank, 41 Minn. 400;' 43
N. W. 60
Troup's Case, 29 Beav. 353
Trowbridge v. Scudder, 11
Cxish. (Mass.) 83
Troy Mining Co. v. White, 10
1188
831,
832
252
S. Dak. 475; 74N.W.236;
42 L. R. A. 549 1197, 1199,
1199, 1207, 1212, 1212, 1299
Troy Steam Laundering Co.,
132 Fed. 266 43
Troy, etc. R. R. Co. v. Tib-
bits, 18 Barb. (N. Y.) 297 155, 209
Truman's Case (1894), 3 Ch.
272 169, 169, 169
Trust & Deposit Co. v. Spar-
tanburg, etc. Co., 91 Fed.
324 1603, 1605
V. Spartanburg, etc. Co.,
97 Fed. 409 1240, 1640, 1671
Trust & Savings Co. v. Home
Lumber Co., 118 Mo. 447;
24 S. W. 129 571, 571, 574, 589,
712, 752, 773
Trust Co. of Georgia v. State,
109 Ga. 736; 35 S. E. 323;
48 L. R. A. 520 57
Trustees, etc. v. Gibbs, 2
Cush. (Mass.) 39 1065
Trustees of Free Schools v.
Flmt, 13 Mete. (Mass.) 539 650
Trustees of N. C. Endow-
ment Fund V. Satchwell, 71
N. Car. Ill 258
Trustees of Smith Charities
V. Connolly, 157 Mass. 272;
31 N. E. 1058 1382
Trusts & Guarantee Co. v. Ab-
bott Mitchell & Co., 11 Ont.
L. R. 403 1549
Tryber v. Girard Creamery,
etc. Co., 67 Kans. 489; 73
Pac. 83 289, 296
Tschetinian v. City Trust Co.,
97 N. Y. App. Div. 380;
89 N. Y. Supp. 1053; 186
N. Y. 432; 79 N. E. 401 1412,
1488
Tschumi v. Hills, 6 Kans.
App. 649; 51 Pac. 619 481,493,
547, 549
Tucker v. Curtin, 148 Fed.
929; 78 C. C. A. 557 708, 712
V. Mulligan, 28 Vict.
L. R. 1 747, 782
V. Russell, 82 Fed. 263 1183
V. Wilson, 1 P. Wms. 261 808
Tufts i;. Plymouth Gold Min-
ing Co., 14 Allen (Mass.)
407 913
Tulare Irrigation Dist. v.
Kaweah Canal, etc. Co.,
44 Pac. Rep. 662 (Cal.) 523
V. Shepard, 185 U. S. 1;
22 Sup. Ct. 531 241, 243
TABLE OF CASE8
[The references are to pages]
Tulare Sav. Bank v. Talbot,
131 Cal. 45; 63 Pac. 172 627
Tiilley V. Citizens' Nat. Bank,
18Ind. App. 240; 47N. E.
860 1371
Tunis V. Hestonville, etc.
R. R. Co., 149 Pa. St. 70;
24Atl. 88; 15 L. R. A. 665 1025,
1054, 1055, 1063
Turnbull v. Payson, 95 U. S.
418 921
V. West Riding, etc.
Club, 70 L. T. 92 1179, 1184
Turner v. Conant, 18 Abb.
N. C. (N. Y.) 160 1666
V. Cowan, 34 Can. Sup.
Ct. 160 645
V. Cross, 83 Tex. 218;
18 S. W. 578; 16 L. R. A.
262 1619
V. Fidelity Loan Con-
cern (Cal.), 83 Pac. 62 1201
V. Grangers', etc. Ins.
Co., 65 Ga. 649; 38 Am.
Rep. 801 177, 180
V. Indianapolis, etc. Ry.
Co., 8 Diss. 380 1627, 1629
-; V. Indianapolis, etc. Ry.
Co., 8 Biss. 527 1615, 1618
V. Peoria, etc. R. R. Co.,
95 111. 134; 35 Am. Rep.
144 1651, 1651
Turpin's Estate, 21 Wkly.
Notes Cas. (Pa.) 542 1147
Turquand v. Marshall, 4 Ch.
376 1094
Tussaud V. Tussaud, 44 Ch.
D. 678 373, 374, 376
Tuthill Spring Co. v. Smith,
90 Iowa 331 ; 57 N. W. 853 622
Tuttle V. George H. Tuttle
Co. (Me.), 64 Atl. 496 293, 294
V. Michigan, etc. R. R.
Co., 35 Mich. 247 999, 1000,
1000, 1003
V. Walton, 1 Ga. 43 572, 770
Twelfth Street Market Co. v.
Jackson, 102 Pa. St. 269 592,
1215, 1381
Twigg V. Thunder Hill Min-
ing Co., 3 Brit. Columbia
101 115, 492, 587
Twin-Lick Oil Co. v. Marbury,
91 U. S. 587 1301, 1311, 1324,
1344
Twycross v. Grant, 2 C. P. D.
469 271, 271, 273, 274
Tyler v. Savage, 143 U. S. 79;
12 Sup. Ct. 340 182, 183
Tyler, Re, 149 U. S. 164; 13
Sup. Ct. 785 1617
Tyne, etc. Ass'n v. Brown,
74 L. T. 283 1230
Tyrrell v. Bank of London, 10
H.L.Cas.26 318,320,322,1338
V. Cairo, etc. R. R. Co.,
7 Mo. App. 294 1451
Tyson v. Wabash Ry. Co., 8
Biss. 247 1602, 1603
U
Ulmer i>. Lime Rock R. R.
Co., 98 Me. 579; 57 Atl.
1001; 66 L. R. A. 387 877
Ulster Ry. Co. v. Bainbridge,
Ir. Rep. 2 Eq. 190 620, 1245
Underhill v. Santa Barbara,
etc. Co., 93 Cal. 300; 28 Pac.
1049 407, 407, 593, 1376, 1391
Underwood v. London Music
Hall (1901), 2 Ch. 309 111, 446
V. Newport Lyceum, 5
B. Monr. (Ky.) 129; 41
Am. Dec. 260 861
Union Agricultural, etc.
Ass'n v. Neill, 31 Iowa 95
130,
214
Union Bank v. Jacobs, 6
Humph. (Tenn.) 515
V. Laird, 2 Wheat. 390
772, 773, 776
V. Ridgely, 1 H. & G.
(Md.) 324 107, 392, 392, 657
Union Cattle Co. v. Inters
national Trust Co., 149
Mass. 492; 21 N. E. 962
Union Compress Co. v. Doug-
lass, 60 Ark. 591; 31S. W.
455
Union Fraternal League v.
Johnston, 124 Ga. 902; 53
S. E. 241
Union Insurance Co., 22
Wend. (N. Y.) 591
Union Loan, etc. Co. v. South-
em Cal., etc. Road Co., 49
Fed. 267
V. Southern Cal., etc.
Road Co., 51 Fed. 106
Union Mills v. Harder, 116
N. Y. App. Div. 22
Union Mutual Fire Ins. Co.
D. Keyser,32N. H.313; 64
, Am. Dec. 375
Union Mutual Life Ins. Co.
V. Union Mills, etc. Co., 37
Fed. 286; 3 L. R. A. 90
66
770,
1405
1239
677
1163
1642
1642
388
692
1462,
1604, 1604
TABLE OF CASES
[The references are to pages]
Union Mutual Life Ins. Co. v.
White, 106 111. 67 591, 1373
Union Nat. Bank v. Hill, 148
Mo. 380; 49 S. W. 1012;
71 Am. St. Rep. 615 960, 1214,
1276, 1279, 1357
V. Scott, 53 N. Y. App.
Div. 65 ; 66 N. Y. Supp. 145 156,
921, 1182, 1227
Union Pac. Lodge v. Bank-
ers' Surety Co. (Nebr.),
^ 113 N. W. 263 237
Union Pac. Ry. Co. v. Chi-
cago, etc. Ry. Co., 163
U. S. 564; 16 Sup. Ct. 1173 107,
992, 1192
V. Credit Mobilier, 135
Mass. 367 1306, 1307
Union Plate Glass Co., Be, 42
Ch. D. 513 534, 536
Union Savings Bank v. Leiter,
145 Cal. 696; 79 Pac. 441 564,
614, 614, 633
V. Willard (Cal.), 88 Pac.
1098 620, 621
Union Trust Co. v. Carter,
139 Fed. 717 116, 993, 1188,
1194, 1299, 1299
V. Chicago, etc. R. R.
Co., 7 Fed. 513 1651, 1652, 1652
V. Cuppy, 26 Kans. 754 1583,
1609
V. Illinois Midland Ry.
Co., 117 U. S. 434; 6 Sup.
a. 809 1629, 1640, 1640, 1646,
1647, 1647, 1649, 1649, 1651,
1653, 1655, 1655
V. Mercantile Library'
Hall Co., 189 Pa. 263; 42
Atl. 129 109, 1501
V. Missouri, etc. Ry. Co.,
26 Fed. 485 1465
V. Monticello, etc. Ry.
Co., 63 N. Y. 311; 20 Am.
Rep. 541 1456, 1456
V. Morrison, 125 U. S.
591; 8Sup. Ct. 1004 1549,
1551, 1567
V. Nevada, etc. R. R.
Co., 10 Sawy. 122 - 1526
V. Souther, 107 U. S.
591 ; 2 Sup. Ct. 295 1562, 1565,
1566
V. St. Louis, etc. R. R.
Co., 4 Dill. 114 1603
V. St. Louis, etc. Ry. Co.,
5 Dillon 1 1463, 1465, 1468
V. Thomas (Md.), 66
Atl. 450 1470, 1583, 1584
1626
1570
1496
86
1211
957
Union Trust Co. v. Union,
etc. Ry. Co., 26 Fed. 485
V. Walker, 107 U. S.
596; 2 Sup. Ct. 299
V. Ward, 100 Md. 98;
59 Atl. 192
Union Water Co. v. Murphy's
Flat, etc. Co., 22 Cal. 620
Union, etc. Bank v. Farring-
ton, 13 Lea (Tenn. ) 333 807, 1023
Union, etc. Trust Co. v.
Southern Cal., etc. Co., 51
Fed. 840 1343, 1403, 1403,
1409, 1496
United Brethren Church v.
Vandusen, 37 Wise. 54
United Electric Securities Co.
V. Louisiana Electric Light
Co., 68 Fed. 6?3
United Fire Ass'n v. Bense-
man, 4 Wkly. Notes Cas.
(Pa.) 1 558, 559
United Fruit Growers Co. v.
Eisner, 22 N. Y. App. Div.
1; 47 N.Y. Supp. 906 604,607,
924, 1165, 1197, 1197, 1199
United German Bank v.
Katz, 57 Md. 128 844, 853
United Gold Mining Co. v.
Rocky Mountain Nat.
Bank, 2 Colo. 565 917, 923,
923, 1193
United Gold, etc. Co. v.
Smith, 44 N. Y. Misc. 567;
90 N. Y. Supp.' 199 1003, 1021,
1046, 1084
United Lines Tel. Co. v.
Boston Safe Deposit, etc.
Co., 147 U. S. 431; 13 Sup.
Ct. 396 1540, 1549
United Ports, etc. Ins. Co.,
20 W. R. 88 172
United Society v. Eagle Bank,
7 Conn. 456 517, 518
United Society of Shakers v.
Underwood, 9 Bush. (Ky.)
609; 15Am. Rep. 731
United States v. Columbian
Ins. Co., 2 Cranch. C. C.
266
V. Debs, 64 Fed. 724
V. Flint, etc. Ry. Co.,
95 Fed. 551; 37 C. C. A.
156
V. Harris, 177 U. S. 305;
20 Sup. Ct. 609
V. Kane, 23 Fed. 748
V. McKelden, MacA. &
Mack. (D. C.) 162 998, 998, 1250
1356
1027
1620
1634
1618
1620
TABLE OP CASES
[The references are to pages]
United States v. Means, 42
Fed. 599 1365
V. New Orleans, etc.
R. R. Co., 12 Wall. 362 1535,
1537, 1539, 1540
V. Union Pac. R. R. Co.,
91 U. S. 72 1463
V. Vaughan, 3 Binn.
(Pa.) 394; 5 Am. Dec. 375 715
United States Cast Iron Pipe,
etc. Co., 65 Atl. 849 (N! J.) 698,
1017
United States Express Co.
V. Bedbury, 34 111. 459 383
United States Hotel Co. v.
Niles, 134 Fed. 225; 67
C. C. A. 153 44
United States Mercantile,
etc. Agency, 115 N. Y.
176; 21 N. E. 1034 386
United States Mineral Co. v.
Camden (Va.), 56 S. E. 561 192,
517, 527
United States Mortgage Co.
V. Sperry, 138 U. S. 313;
11 Sup. Ct. 321 1449
United States Mortgage, etc.
Co. V. Eastern Iron Co.,
105 N. Y. Supp. 291 1504
United States Nat. Bank v.
First Nat. Bank, 79 Fed.
296; 24 C. C. A. 597 1374
V. Forstedt, 64 Nebr.
855; 90N. W. 919 1236
United States Rolling Stock
Co., 57 How. Pr. 16 1652
V. Atlantic, etc. R. R.
Co., 34 Oh. St. 450; 32
Am. Rep. 380 1296, 1299
United States Savings &
Loan Co. v. Convent of St.
Rose, 133 Fed. 354; 66
C. C. A. 416 834, 835, 838
United States Savings, etc.
Co. V. Shain, 8 N. Dak. 136;
77 N. W. 1006 562
United States Steel Corp. v.
Hodge, 64 N. J. Eq. 807;
54 Atl. 1 1080, 1081, 1115, 1115
United States Trust Co. v.
Mercantile Trust Co., 88
Fed. 140; 31 C. C. A. 427 1611
V. New York, etc. R. R.
Co., 25 Fed. 800 1564
V. New York, etc. R. R.
Co., lOlN. Y. 478; 5 N. E.
316 1602, 1621
V. Omaha, etc. Ry. Co.,
63 Fed. 737 1620
261, 261
Y.
222, 261
V.
1661
1663
1663
590
1486
United States Trust Co. v.
Wabash, etc. Ry. Co.', 38
Fed. 891 1532
V. Wabash, etc. Ry. Co.,
150 U. S. 287; 14 Sup. Ct.
86 1515, 1517, 1611, 1611
1612,1612
V. Western Contract Co.,
81 Fed. 455; 26 CCA. 472 1570
United States, etc. Trust Co.
v. Young (Tex.), 101 S. W.
1045 1623, 1623
United States Vinegar Co. v.
Foehrenbach, 148 N. Y.
58; 42N. E. 403
V. Schlegel, 143 N.
537; 38 N. E. 729
United Waterworks Co.
Omaha Water Co., 21 N. Y.
Misc. 594; 48 N. Y. Supp.
817
V. Omaha Water Co., 164
N.Y. 41; S8N. E.58
V. Stone, 127 Fed. 587
United Workmen v. Haddock,
72 Kans. 35
Unity Co. v. Equitable Trust
Co., 204 111. 595; 68 N. E.
654
Unity Ins. Co. v. Cram, 43
N. H. 636 117, 128
University of Louisville v.
Hammock (Ky.), 106 S. W.
219 381, 869
Uptegrove v. Schwartzwael-
der, 46 N. Y. App. Div. 20;
61N.Y. Supp. 623; 167 N.
Y. 587; 60 N. E. 1121 103
Upton V. Bumiiam, 3 Hiss. 431
696, 699
V. Tribilcock, 91 U. S.
45 177, 177, 185, 483, 492
Umer v. SoUenberger, 89 Md.
316; 43 Atl. 810 317,984,
1313, 1314
Uruguay Central, etc. Ry. Co.,
11 Ch. D. 372 1527, 1529
Usher v. New York Central,
etc. R. R. Co., 76 N. Y.
App. Div. 422; 78 N. Y.
Supp. 508 853, 1189
Utah Optical Co. v. Keith, 18
Utah 464; 56 Pac. 155 302
Utica Fire Alarm Co., 115 N.
Y. App. Div. 821 1017, 1017,
1019, 1022
Utica Ins. Co. v. Bloodgood, 4
Wend. (N. Y.) 652 1248
V. Scott, 19 Johns. (N.Y.) 1 827
TABLE OF CASES
[The references are to pages]
Utica Ins. Co. v. Tilman, 1
Wend. (N. Y.) 555 229
Utley V. Union Tool Co., 11
Gray (Mass.) 139 230, 247
Uvalde Paving Co. v. City of
New York, 99 N. Y. App.
Div. 327; 91 N. Y. Supp.
131 400
Vail V. Hamilton, 85 N. Y. 453
1021,
1022
520
616
Vale of Neath & South Wales
Brewery Co., 3 De G. &
Sm. 96
Vale Mills v. Spaulding, 62
N. H. 605
Valk V. Crandall, 1 Sandf. Ch.
(N. Y.) 179 121, 122, 137, 301
Valletort v. Sanitary Steam
Laundry Co. (1903), 2 Ch.
654 1394, 1547
Valpy, Ex parte, 7 Ch. 289 1364
Van Allen v. Illinois Central
R. E. Co., 7 Bosw. (N. Y.)
515 188, 190, 200, 200, 1474,
1475, 1477, 1477
Van Amburgh v. Baker, 81 N.
Y. 46 1185
Van Atten v. Modem Brother-
hood (Iowa), 108 N. W.
313 583, 585
Van Brocklin v. Queen City
Printing Co., 19 Wash. 552;
53 Pac. 822
Van Cleve v. Berkey, 143
Mo. 109; 44S. W. 743; 42
L. R. A. 593
Van Cott V. Van Brunt, 82 N.
Y. 535
Van Diemen's Land Co. v.
Cockerell, 1 C. B. n. s. 732
661, 661, 662
Van Doren v. Olden, 19 N. J.
Eq. 176
Van Dyck v. McQuade, 86
N. Y. 38
Van Frank v. Brooks, 93 Mo.
App. 412; 67S. W. 688
V. Missouri Pac. Ry. Co.,
89 Mo. App. 460 1562, 1567,
1572
V. St. Louis, etc. Ry. Co.,
89 Mo. App. 489 1564, 1565
Van Hook v. Somerville Mfg.
Co., 5 N. J. Eq. 137 1203, 1204
Van Home v. State, 6 Ark. 349 24
Van Pelt v. Gardner, 54 Nebr.
701; 75N. W. 874 112
518
645
1335
659,
1149
1104
1542
Van Pelt v. Home Bldg., etc.
Ass'n, 79 Ga. 439; 4 S. E.
501 96, 382
Van Poucke v. Netherland,
etc. Society, 63 Mich. 378;
29 N. W. 863 577
Van Schaick v. Third Ave.
R. R. Co., 49 Barb. 409 291,
303
Van Siclen v. Bartol, 95 Fed.
793 1661
Van Weel v. Winston, 115 U.
S. 228; 6 Sup. a. 22 1556
Van Winkle Gin, etc. Co. v.
Mathews (Ga.), 58 S. E.
396 384
Vance v. Phoenix Ins. Co., 4
Lea (Tenn.) 385 1275
Vandeburg v. Broadway Ry.
Co., 29 Hun (N. Y.) 348 1163,
1186
Vanderbilt v. Central R. R.
Co., 43 N. J. Eq. 669; 12
Atl. 188 1615, 1615, 1616, 1643
Vanderpoel v. Gorman, 140
N. Y. 563; 35 N. E. 932;
24 L. R. A. 548; 37 Am.
St. Rep. 601 1187
Vanderveer v. Asbuiy Park,
etc. Ry. Co., 82 Fed. 355 109,
838, 1408
Vanderwerken v. Glenn, 85
Va. 9; 6 S. E. 806 614
Vane v. Cobbold, 1 Ex. 798 341
Vanneman v. Young, 52 N.
J. Law 403; 20 Atl. 53 123,
126
Vansands v. Middlesex
County Bank, 26 Conn. 144
572,574
Vardeman v. Penn. Mut. Life
Ins. Co., 125 Ga. 117; 54
S. E. 66 1364
Varner v. St. Louis, etc. R. R.
Co., 55 Iowa 677; 8 N. W.
634 , 1632
Varney v. Baker (Mass.), 80
N. E. 524 894, 904, 904
Vatable v. New York, etc. R.
R. Co., 96 N. Y. 49 1664, 1664,
1664
Vaughn v. Ala. Nat. Bank,
143 Ala. 572; 42 So. 64 631,
645
Vaught V. Ohio, etc. Fair Co.,
20 Ky. Law Rep. 1471; 49
S. W. 426 1210, 1218
Vaupell V. Woodward, 2
Sandf. Ch. (N. Y.) 143 809
TABLE OF CASES
[The references are to pages]
Vawter v. Franklin College, 53
Ind. 88 124, 396, 604, 915, 924
V. Griffin, 40 Ind. 593 422
Veatchij. American, etc. Trust
Co., 79 Fed. 471; 25 C. C.
A. 39; 84 Fed. 274; 28 C.
C. A. 384 1517, 1518, 1559,
1568
Veeder v. Horstmann, 85 N.
Y.App. Div. 154; 83N. Y.
Supp. 99 1328
V. Mudgett, 95 N. Y. 295 492,
645
Venable v. Ebenezer Baptist
Church, 25 Kans. 177 241
Venner v. Atchison, etc. R.
Co., 28 Fed. 581 968, 969,
1189, 1191
V. Denver Union Water
Co. (Colo.), 90 Pac. 623 1179,
1182, 1375, 1614, 1659,1660
V. Farmers' L. & T. Co.,
90 Fed. 348; 33 C. C. A.
95 884, 1455, 1503, 1535,
1632
V. Fitzgerald, 91 Fed.
335 1661
V. Great Northern Ry.
Co., 153 Fed. 408; 209
U. S. 24 970, 971, 975
Vent V. Duluth Coffee, etc.
Co., 64 Minn. 307; 67 N.
W. 70 191, 192, 527
Verooutere v. Golden State
Land Co., 116 Cal. 410; 48
Pac. 375 558, 561, 564
Vermont & Canada R. R. Co.
V. Vermont Central R. R.
Co., 60 Vt. 500 1668
Vermont, etc. Co. v. Declez,
etc. Co., 135 Cal. 579; 67
Pac. 1057; 87 Am. St. Rep.
143; 56L. R. A. 728 704
Vermont Central R. R. Co. v.
Clayes, 21 Vt. 30 278
Vemer v. General & Commer-
cial, etc. Co. (1894),. 2 Ch.
239 1091, 1098, 1098
Vernon, Re, 1 Pennewill (Del.)
202; 40Atl. 60 1028
Vernon Society v. Hills, 6
Cow. (N. Y.) 23; 16 Am.
Dec. 429 1226
Vertue v. East Anglian Rys.
Co., 19 L. J. Ex. 235 1426, 1426
Vicksburg, etc. R. R. Co. v.
McCutchen, 52 Miss. 645 1551
Vicksburg, etc. R. R. v. Mc-
Kean, 12 La. Ann. 638 175,194
Vicksburg «. Vicksburg Water-
works Co., 202 U. S. 453;
26 Sup. Ct. 660 1606
Victor G. Bloede Co. v.
Bloede, 84 Md. 129; 34 Atl.
1127; 57 Am. St. Rep. 373;
33 L. R. A. 107 571, 679
V. Joseph Bancroft &
Sons Co., 98 Fed. 175 890
Victoria Steamboats (1897),
1 Ch. 158 1598, 1604, 1606
Victorian Mtge, etc. Bank
V. Australian, etc. Co., 19
Vict. L. R. 680 74, 621
Vidal V. Girard's Ex'rs., 2
How. 127 64,55
Vierling v. Mechanics', etc.
Ass'n, 179 111. 524; 63 N.
E. 979 582
Vigers v. Pike, 8 CI. & Fin. 562 316
Vigilancia, The, 73 Fed. 452;
19 C. C. A. 528 1224
Vilas V. Milwaukee, etc. Ry.
Co., 17 Wise. 497 1523, 1632
V. Page, 106 N. Y. 439;
13 N. E. 743 1643, 1654, 1655
Villamil v. Hirsch, 138 Fed.
690; 143 Fed. 654 954, 955,
1025, 1063, 1064
Vimbos, Ltd. (1900), 1 Ch.
470 1580
Vincenheller v. Reagan, 69
Ark. 460; 64 S. W. 278 1363
Vint & Sons (1905), 1 Ir.
112 1405
Violet Consolidated Gold
Mining Co., 80 L. T. n. s.
684 746
Virginia v. Chesapeake, etc.
Canal Co., 35 Md. 1 1670
Virginia-Carolina , Chemical
Co. V. Provident Sav., etc.
Soo. (Ga.), 64 S. E. 929 485
Virginia Pass., etc. Co. v.
Fisher, 104 Va. 121; 51 S.
E. 198 942, 942, 1586
Virginia, etc. Coal Co. v.
Central R. R. Co., 170 U. S.
■ 356; 18 Sup. Ct. 657 1659,
1562, 1563, 1565, 1669, 1572
Visalia Gas, etc. Co. v. Sims,
104 Cal. 326; 37 Pac. 1042;
43 Am. St. Rep. 105 863
Visalia, etc. R. R. Co. v.
Hyde, 110 Cal. 632; 43
Pac. 10; 52 Am. St. Rep.
136 606, 616, 617, 618
Vivian & Co. (1900), 2 Ch.
664 1545, 1548
TABLE OF CASES
[The references are to pages]
Vogeler v. Punch (Mo.), 103
S. W. 1001 633, 634, 955
Yokes V. Eaton, 27 Ky. Law
Rep. 358; 85 S. W. 174 47
Voluntary Relief Dept. v.
Spencer, 17 Ind. App. 123;
46 N. E. 477 576, 949
Von Arnim v. American Tube
"Works, 188 Mass. 515; 74
N. E. 680 941, 982, 1284,
1285, 1286
Von Schmidt v. Huntington,
1 Cal. 55 , 16
Von Thodorovich v. Franz
Joseph Beneficial Ass'n,
154 Fed. 911 370
Vonnoh v. Sixty-seventh St.
Atelier Bldg., 105 N. Y.
Supp. 155 1327
Voorhees v. Nixon (N. J.), 66
Atl. 192 1307, 1332
Vose V. Bronson, 6 Wall. 452 1417,
1484
V. Grant, 15 Mass. 505 1127
Vowell V. Thompson, 3 Cranch
C. C. 428 1021, 1022
Vredenburg v. Behan, 33 La.
Ann. 627 244, 252
Vreeland v. New Jersey Stone
Co., 29 N. J. Eq. 188 174, 176,
183
Vrooman v. Vansa;nt Lumber
Co.,215Pa. St. 75; 64 Atl.
394 517, 528, 1006
Vulcan Detinning Co. v. Am.
Can Co. (N. J.), 67 Atl. 339 1263
W
1620
Wabash R. Co., 24 Fed. 217
Wabash R. R. Co. v. Adelbert
College, 208 U. S. 38; 28
Sup. Ct. 182 1591, 1619, 1630
Wabash, etc. Ry. Co. v. Cen-
tral Trust Co., 22 Fed. 138
V. Central Trust Co., 22
Fed. 269
V. Central Trust Co., 22
Fed. 272
V. Ham, 114 U. S. 587;
5 Sup. a. 1081 1416, 1500
V. Stewart, 41 111. App.
640
Wachtel v. Noah Widows, etc.
Society, 84 N. Y. 28; 38
Am. Rep. 478
Wade V. Chicago, etc. R. R.
Co., 149 U.S. 327; 13 Sup.
Ct. 892 1434, 1508
1629
1611
1598
1633
580
1497
1196
1379
184
Wade V. Donau Brewing Co.,
10 Wash. 284; 38 Pac,
1009
V. Kendrick, 37 Can. Sup,
Ct. 32 1304, 1333
Wadham v. Litchfield, etc.
Turnpike Co., 10 Conn. 416 1210
Wadlinger v. First Nat. Bank,
209 Pa. 197; 58 Atl. 359 751, 807
Wagg-Anderaon Woolen Co.
V. Lester & Co., 78 111. App.
678 406, 1373, 1375, 1381
Wagner v. Marple, 10 Tex.
CSv. App. 505; 31 S. W.
691 805, 873, 874
■». St. Peter's Hospital,
32 Mont. 206; 79 Pac.
1054
Wahlig V. Standard Piunp
Mfg. Co., 9 N. Y. Supp.
739
Wainwright, Ex parte, 59 L. J.
Ch. 281 182, 184
Wainwright's Case, 63 L. T.
429
Wait V. Nashua Armory Ass'n
66 N. H. 581; 49 Am. St.
Rep. 630; 23 Atl. 77; 14
L. R. A. 356 1370, 1372
V. Smith, 92 HI. 385 594
Waite V. Littlewood, 41 L. J.
Ch. N. s. 636 1446
V. Windham, etc. Mining
Co., 36 Vt. 18 1005, 1012,
1203, 1210
V. Windham, etc. Co., 37
Vt. 608 1201, 1228, 1321
Wakefield Rolling Stock Co.
(1892), 3 Ch. 165 432, 434, 435
Wakefield Water Co. v. New
England Trust Co., 175
Mass. 478; 56 N. E. 703
Walden Nat. Bank v. Birch,
130 N. Y. 221; 29 N. E.
127; 14 L. R. A. 211
Waldoborough v. Knox, etc.
R. R. Co., 84 Me. 469; 24
Atl. 942
Walker v. Ai^o-American,
etc. Co., 72 Hun 334; 25
N. Y. Supp. 432
V. Bartlett, 18 C. B. 845
V. Detroit Transit Ry.
Co., 47 Mich. 338; IIN.W.
187 723, 1379
V. Elmore's, etc. Metal
Co., 85 L. T. 767 1674, 1674
V. Granite Bank, 44
Barb. (N. Y.) 39 890
1416
522
1671
277
782
TABLE OF CASES
[The references are to pages]
Walker v. Hacking, 57 L. T. 763 524
V. Johnson, 17 App.
Cas. (D. C.) 144 656, 557, 579,
954, 1039, 1040, 1063, 1066
V. London Tramways
Co., 12 Ch. D. 705 585
V. Montclair, etc. Ry.
Co., 30 N. J. Eq. 525 1637
V. Pike County Land
Co., 139 Fed. 609; 71
C. C. A. 593 322
V. Shelbyville, etc.
Turnpike Co. 80 Ind. 452 228
V. Walker, 68 N. H. 407;
39Atl. 432 502,1110,1154,1155
Walker & Smith, Re, 88 L. T.
792 531
Walker, Ex parte, 1 Tenn.
Ch. 97 374
Wall V. London & Northern
Assets Corp. (1898), 2 Ch.
469 951, 1005, 1060, 1060
V. London, etc. Assets
Corp. (1899), 1 Ch. 550 1058
V. Mines, 130 Cal. 27; 62
Pac. 386 118, 228
V. Utah Copper Co.
(N. J.), 62 Atl. 533 499, 500,
1474
Wall's Case, 15 Eq. 18 167
Wallace v. Burdell, 24 Hun
(N. Y.) 379 809
V. Carpenter, etc. Mfg.
Co., 70 Minn. 321; 73
N. W. 189; 68 Am. St.
Rep. 530 636, 648
V. Evershed (1899), 1 Ch.
891 1393
1). Hood, 89 Fed. 11 180,182,
183, 521
V. Lincoln Sav. Bank,
89 Tenn. 630; 15S.W.448;
24 Am. St. Rep. 625 938, 982,
1125, 1263, 1273, 1274, 1276,
1278, 1288, 1350
V. Long Island R. R. Co.,
12 Hun (N. Y.) 460 1312
V. Loomis, 97 U. S. 146 20,
227, 1646, 1649
V. Oceanic Packing Co.,
25 Wash. 143; 64 Pac. 938 1296
V. Universal Automatic,
etc. Co. (1894), 2 Ch. 547 1470,
1598, 1604
V. Walsh, 125 N. Y. 26;
25 N. E. 1076; 11 L. R. A.
166 1229
Wallace's Case (1900), 2 Ch.
671 164, 169, 170
Wallamet Falls Co. v. Kitt-
redge, 5 Sawy. 44 1193
Wallasey Brick & Land Co.,
Re, 63 L. J. Ch. 415 538
Wallbridge v. Farwell, 18
Can. Sup. a. 1 1574, 1582
Wallerstein v. Ervin, 112
Fed. 124; 50 C. C. A.
129 835
Wallscourt's Case, 7 Manson
235 523, 703
Wain's Assignees v. Bank of
N. America, 8 S. & R.
(Pa.) 73; 11 Am. Dec. 575 557,
571 752
Walnut V. Wade, 103 U. S.
683 1460
Walsenburg Water Co. v.
Moore, 5 Colo. App. 144; 38
Pac. 60 992
Walsh V. Barton, 24 Oh. St.
28 847
V. Goulden, 130 Mich.
631; 90 N. W. 406 1352
V. Sexton, 65 Barb.
(N. Y.) 251 696, 712
Walsham v. Stainton, 1 De G.
J. & S. 678 1352
Walstab v. Spottiswoode, 15
M. & W. 601 274, 276, 341
Walter v. F. E. McAlister Co.,
21 N. Y. Misc. 747; 48
N. Y. Supp. 26 960
V. King, 13 Times L. R.
270 809
Walters v. Anglo-American
Mtge., etc. Co., 60 Fed.
316 1371
V. Porter (Ga.), 59 S. E.
452 517, 521
Walton V. Oliver, 49 Kans.
107; 30 Pac. 172; 33 Am.
St. Rep. 355 148
V. Riley, 85 Ky. 413;
3 S. W. 606 125, 126, 127
Walworth v. Brackett, 98
Mass. 98 161
Walworth County Bank v.
Farmers' L. & T. Co., 14
Wise. 326 1371
Wandsworth, etc. Co. v.
Wright, 18 W. R. 728 932, 1057
Ward V. Brigham, 127 Mass.
24 253, 274, 274, 276
V. Combe, 7 Sim. 634 114r
V. Davidson, 89 Mo. 445 ;
1 S. W. 846 1184, 1295, 1322
V. Johnson, 95 111. 215 63, 667
66, 691, 862
TABLE OF CASES
[The references are to pages]
Ward V. Joslin, 186 U. S. 142;
22 Sup. a. 807
V. Minnesota, etc. R. R.
Co., 119 111. 287; 10 N. E.
365
V. Royal Exchange
Shipping Co., 58 L. T. 174
840
249
1546,
1547
1234
109
118
230
1355
1002,
V. Sea Ins. Co., 7 Paige
(N. Y.) 294 1194
Ward's Case, 10 Bq. 659 166, 172
Warden v. Railroad Co., 103
U. S. 651 1295, 1305
Warden, etc. of Mercers v.
Hart, IC. &P. 113 230
Wardens of Christ Church v.
Pope, 8 Gray (Mass.) 140 1036,
1065, 1065
Wardlaw v. Troy Oil Mill, 74
S. Car. 368; 54 S. E. 658
Warfield v. Marshall County
Canning Co., 72 Iowa 666;
34 N. W. 467; 2 Am. St.
Rep. 263
Warner v. Callander, 20 Oh.
St. 190
V. Daniels, 1 Wood. &
Min. 90
V. James, 88 N. Y. App.
Div. 567; 85 N. Y. Supp.
153
V. Mower, 11 Vt. 385
1002, 1004, 1005
V. Penoyer, 91 Fed. 587;
33 CCA. 222; 44L.R.A.
761 1278, 1282
V. Rising Fawn Iron Co.,
3 Woods 514 1406, 1406, 1461,
1462, 1603, 1603
Warren v. Davenport Fire Ins.
Co., 31 Iowa 464; 7 Am.
Rep. 160 421
V. King, 108 IT. S. 389;
2 Sup. Ct. 789 449, 449, 449,
450, 450
V. Louisville Leaf, etc.
Co. (Ky.), 55 S. W. Rep. 912 566
V. Para Rubber Shoe
Co., 166 Mass. 97; 44N. E.
112 956, 1259, 1259, 1284, 1309
1310
1;. Pim, 66 N. J. Eq.
353; 59 Atl. 773 1030, 1052,
1052, 1053
V. Robinson, 19 Utah
289; 57 Pac. 287; 75 Am.
St. Rep. 734 1275, 1279
V. Robinson, 21 Utah
429; 61 Pac. 28 1285, 1289
Warren's Estate, 11 N. Y.
Supp. 787 1143, 1153
Washburn v. National Wall-
Paper Co., 81 Fed. 17; 26
C. C. A. 312 634, 1096, 1098,
1392, 1398
Washer v. Allensville, etc.
Turnpike Co., 81 Ind. 78
Washington County Nat.
Bank v. Lee, 112 Mass.
521
Washington Diamond Min-
ing Co. (1893), 3 Ch. 95
228
381
Washington Irrigation Co. v.
California, etc. Co., 115
Fed. 20; 52 C. C. A. 614
Washington Mill Co. v.
Sprague Lumber Co., 19
Wash. 165; 52 Pac. 1067
612,
1241
1631
84,
142
Washington Nat., etc. Ass'n
V. Buser (W. Va.), 57 S. E.
40 394
Washington Trust Co. v.
Morse Iron Works, 106
N. Y. App. Div. 195; 94
N. Y. Supp. 495 1503, 1504, 1536
Washington, etc. R. R. Co.
V. Alexandria, etc. R. R.
Co., 19 Gratt. (Va.) 592;
100 Am. Dec. 710 1493
V. Cazenove, 83 Va.
744; 3 S. E. 433 1625
Wasser v. Western Land, etc.
Co., 97 Minn. 460; 107 N.
W. 160 284
Waterford, etc. Ry. Co. v.
Dalbiac, 6 Eng. Ry. Cas.
753; 6 Ex. 443 608
Waterhouse v. Comer, 55 Fed.
149; 19 L. R. A. 403 1620
V. Jamieson, L. R. 2 H.
L. (Scotch) 29 647, 648
Waterloo Organ Co., 134
Fed. 341; 67 C. C A. 255 837,
838, 1402
, 134 Fed. 345; 67 C. C
A. 327 1402
, 147 Fed. 814 1492, 1492
Waterman v. Alden, 42 111.
App. 294; 144 111. 90; 32
nTe. 972 1143,1145,1146
V. Brown, 31 Pa. St.
161 811
V. Chicago, etc. R. R.
Co., 139 111. 658; 29 N. E.
689; 32 Am. St. Rep. 228;
15 L. R. A. 418 1225, 1228
TABLE OF CASES
[The references are to pages]
Waterman v. Troy, etc. R. R.
Co., 8 Gray (Mass.) 433 438, 450,
450, 457, 1108
Waterman's Appeal, 26 Conn.
96 297, 297
Waterous Engine Works Co.
V. McLean, 2 Manitoba 279 369
Waters v. American Finance
Co., 102 Md. 212; 62 Atl.
357 1246
Waters-Pierce Oil Co. v. U. S.
etc. Trust Co. (Tex.), 99 S.
W. 212 1564
Watkinsij. Glas (Cal.),89Pac.
840 407, 408
V. Robertson (Va.), 54
S. E. 33 786
Watson t). Bendigo Bldg. Soc,
10 Vict. Rep. (Cases at
Law) 26 588
V. Black, 16 Q. B. D.
270 420
V. Bonfils, 116 Fed. 157;
53 C. C. A. 535 886, 1071
V. Cave, 17 Ch. D. 19 1592
V. Eales, 23 Beav. 294 659,
763
V. Spratley, 10 Ex. 222 420,
423
V. Woody Printing Co.,
56 Mo. App. 145 558, 560
Watson & Co., Robert (1899),
2 Ch. 509 640, 640
Watson, Ex parte, 54 L. T.
233 204, 204, 204
Watt V. Hestonville, etc.
Pass. R. R. Co., 1 Brewst.
(Pa.) 418
Watts V. Bucknall (1902), 2
Ch. 628
V. Equitable Mut. Life
Ins. Co., Ill Iowa 90; 82
N. W. Rep. 441
V. Port Deposit, 46 Md.
500
B. Salter, 10 C. :?• 477
Watts's Appeal, 78 Pa. St.
370 63, 64, 966, 1268
Waukon, etc. R. R. Co. v.
Dwyer, 49 Iowa 121 157, 600
Wausau Boom Co. v. Plumer,
35 Wise- 274 1296
Way V. American Grease Co.,
60 N. J. Eq. 263; 47 Atl.
44 409, 948, 1063
Waycross, etc. R. R. Co. v..
Offerman, etc. R. R. Co.,
109 Ga. 827; 35 S. E. 275 874,
1086
1555
315
589
386
341
486
940
Waymire v. San Francisco,
etc. Ry. Co., 112 Cal. 646;
44 Pac. 1086
Wayne Pike Co. v. Hammons,
129 Ind. 368; 27 N. E. 487
W. C. Home & Sons (1906), 1
Ch. 271 1591, 1621, 1621
Weatherford, etc. Ry. Co. v.
Granger, 86 Tex. 350; 24
S.W. 795; 40 Am. St. Rep.
837 280, 289, 293, 294
Weatherly v. Medical, etc.
Soc, 76 Ala. 567 1010, 1035
Weaver v. Barden, 49 N. Y.
286 680, 681, 682
Webb V. Baltimore, etc.
R. R. Co., 77 Md. 92; 26
Atl. 113; 39 Am. St. Rep.
396 154, 174, 188, 198, 421,
422
V. Earle, 20 Eq. 556 458
V. Ridgely, 38 Md. 364 1014
V. Rockefeller, 195 Mo.
57; 93 S. W. 772 142, 240, 252
V. Shropshire Rys. Co.
(1893), 3 Ch. 307 830, 1400
V. Vermont Central
R. R. Co., 20 Blatchf. 218;
9 Fed. 793
Webb, Hale & Co. v. Alex-
andria Water Co., 93 L. T.
339
Webber v. Williams College,
23 Pick. (Mass.) 302
Weber v. Delia, etc. Co.
(Idaho), 94 Pac. 441
V. Fickey, 52 Md. 500
912, 921
V. Spokane Nat. Bank,
64 Fed. 208; 12 C. C. A. 93 109,
109, 867, 868, 1408
V. Wallenstein, 111 N. Y.
App. Div. 693; 97 N. Y.
Supp. 846
Websteri). Howe Machine Co.,
54 Conn. 394; 8 Atl. 482
V. Upton, 91 U. S.
65 601, 617, 706, 781
V. Whit worth (Tenn.),
63 S. W. 290
— — V. Ypsilanti Canning
Co. (Mich.), 113 N. W. 7
Webster's Case, 2 Eq. 741
1586
689
1380
1030
646,
962
862
1410
1317
143,
214
, 32 L. J. Ch. 135 661, 667
Wechselberg v. Flour City
Nat. Bank, 64 Fed. 90; 12
C. C. A. 56 ; 26 L. R. A. 470 148,
150, 151, 151, 152, 251
TABLE OF CASES
[The references are to pages]
WecHer v. First Nat. Bank,
42 Md. 581; 20 Am. Rep.
95 870
Weed V. Gainesville R. R. Co.,
119 Ga. 576; 46 S. E. 885 1400,
1404, 1626
Weedon's Case, 22 Vict. L. R.
235 521
Weeks v. Esler, 68 Hun (N.
Y.) 518; 22 N. Y. Supp. 54 403
V. International Trust
Co., 125 Fed. 370; 60'
C. C. A. 236 107
V. Silver Islet Consol.
Mining Co., 55 N. Y. Super.
Ct. 1 651
V. Silver Islet, etc. Min-
ing Co., 23 Jones & S.
. (N. Y.) 1 191, 660, 661, 662
Weetjen v. St. Paul, etc.
R. R. Co., 4 Hun (N. Y.)
529 1550, 1554
V. Vibbard, 5 Hun
(N. Y.) 265 1489, 1586
Wehr V. German Ev. Luth.,
etc. Congregation, 47 Md;
177 1215
Weidenfeld v. Northern Pac.
Ry. Co., 129 Fed, 305; 63
C. C. A. 537 501, 508, 521, 976,
977
V. Sugar Rim R. R. Co.,
48 Fed. 615 939, 1214
Weigand v. Fraternities Ac-
cident Order, 97 Md. 443;
55 Atl. 530 948
Weihenmayer v. Bitner, 88
Md. 325; 42 Atl. 245; 45
L. R. A. 446 899, 902, 905, 906
Weikersheim's Case, 8 Ch. 831 925
Weinburgh v. Union Street
Ry. Ad. Co., 55 N. J. Eq.
640; 37 Atl. 1026 1006, 1015
Weir V. Bay State Gas Co., 91
Fed. 940 890, 969, 978
V. Metropolitan Street
Ry. Co. (Mo.), 103 S. W.
583 8, 16
Welch V. Gillelen, 147 Cal.
571; 82 Pac. 248 155, 156, 692,
705
V. Sage, 47 N. Y. 143;
7 Am. Rep. 423 1433, 1435
Welker v. Anheuser-Busch
Brewing Ass'n, 114 N. W.
745 1227
Welland Canal Co. v. Hatha-
way, 8 Wend. (N. Y.) 480;
24 Am. Dec. 51 230, 233, 238
610
151
250
563
Welland Ry. Co. v. Berrie, 6
H. & N. 416
Wellersburg, etc. Plank Road
Co. V. Hoffman, 9 Md. 559
Wellin^on, etc. R. R. Co. v.
Cashie, etc. Lumber Co.,
114 N. Car. 690; 19 S. E.
646
Wells V. Black, 117 Cal. 157;
48 Pac. 1090; 59 Am. St.
Rep. 162; 37 L. R. A. 619
V. Dane, 101 Me. 67; 63
Atl. 324 928, 929, 947
V. Gates, 18 Barb. (N.
Y.) 554 252
V. Green Bay, etc. Co.,
90 Wise. 442; 64 N.W. 69 429,
429, 650
V. Northern Trust Co.,
195 lU. 288; 63 N. E. 136 1624
V. Rahway White Rub-
ber Co., 19 N. J. Eq. 402 911,
912, 923, 925, 1205
V. Rodgers, 50 Mich.
294; 15N. W. 462
V. Rodgers, 60 Mich. 525;
27 N. W. 671
V. Tyler, 25 N. H. 340
Wells & Co. V. Thompson
Mfg; Co., 54 Mo. App. 41
Wells & McComas Council v.
Littleton, 100 Md. 416; 60
Atl. 22 948, 949
Wells Co. V. Gastonia Cotton
Mfg. Co., 198 U. S. 177; 25
Sup. Ct. 640
Wells, Fargo & Co. v. Enright,
127 Cal. 669; 60 Pac. 439
V. Northern Pac. Ry. Co.,
23 Fed. 469
Wellsborough, etc. Plank-
Road Co. V. Griffin, 57 Pa.
St. 417
Welsbach Incandescent Gas
Light Co. (1904), 1 Ch. 87
111, 131, 446, 546
Welsh V. First Div. St. Paul,
etc. R.R. Co., 25 Minn. 314 1448,
1449, 1460, 1469, 1528,
1638
Welsh Flannel Co., 20 Eq.
360 614, 614
Welsh Whiskey, etc. Co., 16
Times L. R. 246 432, 436
Welton V. Saffory (1897), A.
C. 299 564, 627, 639
Wemple v. St. Louis, etc. R. R.
Co., 120 111. 196; 11 N. E.
906 156, 163
66
1201
792
702
249
1382
45
1523
.94,
TABLE OF CASES
[The references are to pages]
465
95
1659
Wemyss Collieries Trust v.
Melville, 8 Fraser (Sc.) 143
Wendel v. State, 62 Wise. 300 ;
22 N. W. 435
Wengerv. Chicago, etc. R. Co.,
114 Fed. 34; 51 CCA. 660
Wenlock v. River Dee Co., 19
Q. B. D. 155 831, 831, 832
V. River Dee Co., 36 Ch.
D. 675 n 824
V. River Dee Co., 38 Ch.
D. 534 223
V. River Dee Co., 10 App.
Cas. 354 41, 64, 109
Wenstrom Consol., etc. Co. v.
Purnell, 75 Md. 113; 23
Atl. 134
Wentworth v. Chevell, 3 Jur.
N. s. 805
Wentworth Co. v. French, 176
Mass. 442; 57 N. E. 789
1023, 1067
Werle v. Northwestern Flint,
etc. Co., 125 Wise. 534; 104
N. W. 743 1181, 1225
Wert V. Crawfordsville, etc.
Turnpike Co., 19 Ind. 242
West V. BuUskin Prairie
Ditching Co., 32 Ind. 138
V. Camden, 135 U. S.
507; 10 Sup. Ct. 838
V. Crawford, 80 Cal. 19;
21 Pao. 1123
V. Topeka Sav. Bank, 66
Kans. 524; 72Pac. 252; 97
Am. St. Rep. 385; 63 L. R.
A. 137
West Branch Bank v. Arm-
strong, 40 Pa. St. 278
V. Chester, 1 1 Pa. St. 282 ;
51 Am. Dec. 547
West Chester, etc. R. R. Co. v.
Jackson, 77 Pa. St. 321 445, 458
464, 466
West Coast, etc. Co. v. Wulff,
133 Cal. 315; 65 Pac. 622;
85 Am. St. Rep. 171
West Cornwall Ry. Co. v.
Mowatt, 17 L. J. Ch. n. s.
366
West Devon Great Consols
Mine, 27 Ch. D. 106 889, 904
West End, etc. Co. v. Nash,
51W. Va.341; 41 S. E. 182
West of England Bank, 14
Ch. D. 317
West of England Paper Mills
V. Gilbert, 61 L. J. Ch. 92
185
789
1017,
204
94
1347
211
614
769
1528
716
1409
213
92
1360,
1360
West London Ry. Co. v.
Bernhard, 1 Dav. & Mer.
397 915
West Manayunk, etc. Co. v.
New Gas Light Co., 21 Pa.
Co. Ct. Rep. 393 46
West Nashville PJaning-Mill
V. Nashville Sav. Bank, 86
Tenn. 252; 6 S. W. 340; 6
Am. St. Rep. 835 648
West Norfolk Lumber Co.,
112 Fed. 759 43
West Point Foundry Ass. v.
Brown, 3 Edw. Ch. (N. Y.)
284 274
West Point Tel., etc. Co. v.
Rose, 76 Miss. 61; 23 So.
629 294, 1247
West Winsted Sav. Bank v.
Ford, 27 Conn. 282; 71 Am.
Dec. 66 237
Westchester Trust Co., 186
N. Y. 215 105, 139, 141,
1181
Westcott V. Minnesota Min-
ing Co., 23 Mich. 145 658, 1000
Westerfield v. Radde, 7 Daly
(N. Y.) 326 1372
Western Bank v. Addie, L. R.
1 H. L. (Sc.) 185 181
Western Boatmen's, etc.
Ass'n V. Kribben, 48 Mo. 37 86
Western Counties Steam Bak-
eries, etc. Co. (1897), 1 Ch.
617 1363, 1363
Western Improvement Co. v.
Des Moines Nat. Bank, 103
Iowa 455; 72 N. W. 657 517,
522, 602, 603, 603, 648,
1197
Western Investment Co. v.
Davis (Ind. Ty.), 104 S. W.
573 237
Western Md. R. R. Co. v.
Blue Ridge Hotel Co., 102
Md. 307; 62 Atl. 351; 111
Am. St. Rep. 362 81, 84, 851
V. Frankhn Bank, 60 Md.
36 740, 741, 1458
Western Mining, etc. Co. v.
Peytona Coal Co., 8 W. Va.
• 406 1078
Western Nat. Bank v. Arm-
strong, 152 U. S. 346; 14
Sup. Ct. 572 483, 492, 1382
Western Pa. Hospital v.
Mercantile Library Hall Co.,
189 Pa. St. 269; 42 Atl. 183
1527, 1528
TABLE OF CASES
[The references are to pages]
Western Pa. R. R. Co. v.
Johnson, 59 Pa. St. 290 1535
Western R. R. Co. v. Avery,
64 N. Car. 491 601, 614
Western Screw, etc. Co. v.
Consley, 72 111. 531 280
Western Supply, etc. Co. v.
V. S., etc. Trust iDo. (Tex.),
92 S. W. 986 1402, 1405, 1626,
1626
Western Union Tel. Co. v.
Burlington, etc. R. R. Co.,
3 McCrary' 130 1537
Western, etc. R. Co. v. Penn
Refining Co., 137 Fed. 343;
70 C. C. A. 23 1620
Western, etc. Trust Co. v.
Ogden (Tex.), 93 S. W.
1102 381
Westinghouse v. Grerman Nat.
Bank, 188 Pa. St. 630; 41
Atl. 734 . 807, 808
V. German Nat. Bank,
196 Pa. St. 249; 46 Atl.
380 723
Westinghouse Air Brake Co.
V. Kansas City, etc. Co., 137
Fed. 26; 71 C. C. A. 1 1542,
1563, 1571, 1572
Westinghouse El., etc. Co. v.
New Paltz, etc. Co., 32
N. Y. Misc. 132; 65 N. Y.
Supp. 644 1535, 1633
V. Reed (Mass.), 80 N. E.
621 1359
Westminster Nat. Bank v.
New England El. Works,
73 N. H. 465; 62 Atl. 971;
111 Am. St. Rep. 637 74, 91,
730, 730, 751
Weston V. Bear River, etc.
Co., 5 Cal. 186; 63 Am. Dec.
117 716
V. Bear River, etc. Co.,
6 Cal. 425 716, 716
Weston's Case, 4 Ch. 20 744, 745
, 10 Ch. D. 579 1334, 1339
Wetherell v. Thirty-first St.,
etc. Ass'n, 153 111. 361 ; 39
N. E. 143 571, 768, 775
Wetmore v. St. Paul, etc.
R. R. Co., 3 Fed. 177 1636, 1637
Weymouth, etc. Steam
Packet Co. (1891), 1 Ch. 66 627
Whaley Bridge, etc. Co. v.
Green, 5 Q. B. D. 109 271, 272,
273, 319
Wheal Buller Consols., Re, 38
Ch. D. 42 1172
Wheat V. Bank of Louisville,
9 Ky. Law Rep. 738; 5
S. W. 305 1372
Wheatcroft's Case, 42 L. J.
Ch. 853 171, 189
Wheatley v. Silkstone Coal
Co., 29 Ch. D. 715 1546
Wheeler v. Abilene Nat. Bank,
159 Fed. 391 ^ 1083
V. Aiken, etc.* Bank,
75 Fed. 781 1266, 1274
V. Everett Land Co., 14
Wash. 630; 45 Pac. 316 85
V. Mineral Farm, etc. Co.,
31 Colo. 110; 71 Pac. 1101 524
V. Northwestern Sleigh
Co., 39 Fed. 347 1132, 1134,
1135
V. Perry, 18 N. H. 307;
29 Am. Dec. 664 1154, 1155
V. Smith, 81 Fed. 319 1617
Wheeler, etc. Mfg. Co. v.
Lawson, 57 Wise. 400; 15
N. W. 398 1304
Wheeler, Re, 2 Abb. Pr. N. s.
(N. Y.) 361 499, 508, 1059
Wheeling Ice, etc. Co. v.
Connor (W. Va.), 55 S. E.
982 1328
Wheeling, etc. Ry. Co. v.
Reymann Brewing Co., 90
Fed. 189 ; 32 C. C. A. 571 1628
Wheelock v. Kost, 77 111.
296
V. Moulton, 15 Vt. 519
235
1070,
1071
Wheelwright v. St. Louis, etc.
Co., 56 Fed. 164 1405, 1586,
1590
Whetstone v. Crane Bros. Mfg.
Co., 1 Kans. App. 320; 41
Pac. 211 278
Whetstone v. Ottawa Uni-
versity, 13 Kans. 320 81
Whightsel v. Felton, 95 Fed.
923 1613
Whipple V. Parker, 29 Mich.
369 251, 254
Whitaker v. Gnunmond, 68
Mich. 249; 36 N. W. 62 525,
528
V. Hartford, etc. R. R.
Co.,8R. L47; 5 Am. Rep.
547 1449, 1460
—^v. Kilby, 106 N. Y. Supp.
511 509, 510
White V. Carmathen Ry. Co.,
1 Hem. & Miller 786 87, 972,
972
TABLE OF CASES
[The references are to pages]
White V. Commercial, etc.
Bank, 66 S. Car. 49 1 ; 45 S. E.
94; 97 Am. St. Rep. 803 616
— — V. Elgin Creamery Co.,
108 Iowa 522; 79 N. W.
283 1373
V. Franklin Bank, 22
Pick. (Mass.) 181 856, 865, 867
V. Marquardt, 105 Iowa
145; 74 N. W. 930 617
V. Mount Pleasant Mills
Corp., 172 Mass. 462; 52
N. E. 632 173
V. New York, etc. Soc,
45 Hun (N. Y.) 580 1041, 1041,
1041
V. Salisbury, 33 Mo. 150 689,
781
786
933
1030,
1662
918
1503
647
634
1670
44
191
44
80
775
643
V. Schuyler, 1 Abb. Pr.
N. s. (N. Y.) 300
V. Shaw, 21 Vict. L. R.
559
V. Thomas Tire Co., 52
N. J. Eq. 178; 28 Atl. 75
1030, 1052
V. Vermont & Massachu-
setts R. R. Co., 21 How.
575 1423, 1432
V. Westport Cotton Mfg.
Co., 1 Pick. (Mass.) 215; 11
Am. Dec. 168 297, 297
V. Wood, 129 N. Y. 527;
29 N. E. 835
White Chimney, etc. Co. v.
McMahan, 21 Ky. Law Rep.
41; 50 S. W. Rep. 836
White Co., J. F. v. Carroll
(N. Car.), 59 S. E. 678
White, Corbin & Co. v. Jones,
167 N. Y. 158; 60 N. E.
422
V. Jones, 79 N. Y. App.
Div. 373; 79 N. Y. Supp.
583
White, Ex parte, 2 S. Car. 469
White Mountain Paper Co. v.
Morse, 127 Fed. 643; 62
C. C. A. 369
White Mts. R. R. Co. v. East-
man, 34 N. H. 124
V. White Mts. (N. H.)
R. R., 50 N. H. 50 1636, 1637
White Oak Grove Benev. Soc.
V. Murray, 145 Mo. 622; 47
S. W. 501 235, 254, 304
White River, etc. Bank v.
Capital, etc. Trust Co., 77
Vt. 123; 59 Atl. 197; 107
Am. St. Rep. 754 775
ccxvii
White Star Laundry Co., 117
Fed. 570
White Star Line v. Star Line
of Steamers, 141 Mich. 604;
105 N. W. 135; 113 Am.
St. Rep. 551
White Water, etc. Canal Co. v.
Vallette, 21 How. 414 1395,
1400, 1401, 1401, 1416, 1499
White's Bank v. Toledo Ins.
Co., 12 Oh. St. 601
White's Case, 12 Ch. D. 511
Whitechurch, Ltd., George v.
Cavanaugh (1902), A. C.
117 649, 703, 743, 744
Whitehaven Joint Stock
Banking Co. v. Reed, 54 L.
T. 360 1405, 1411
Whitehead v. American
Lamp & Brass Co. (N. J.
Ch.), 62 Atl. 554
V. Hamilton Rubber Co.,
52 N. J. Eq. 78; 27 Atl.
897 1198, 1200
Whitehead & Co. (1900), 1
Ch. 804
Whitehouse & Co., 9 Ch. D.
595
Whitehouse's Case, 3 Eq. 790
Whiteley v. Central Trust Co.,
76 Fed. 74; 22 C. C. A. 67;
34 L. R. A. 303
Whiteley's Case, 1 Megone
154 196, 200
(1900), 1 Ch. 365 178
Whiting V. Commonwealth
(Mass.), 82 N. E. 670
V. Hovey, 13 Ont. App. 7
Whiting Safety Catch Co. v.
Western, etc.XJo., 148 Fed.
396 879, 1356
Whitley Partners, 32 Ch. D.
337 118, 121, 122
Whitman v. Granite Church,
24 Me. 237
V. National Bank of
Oxford, 83 Fed. 288; 28 C.
C. A. 404
Whitney v. Hazzard, 18 S.
Dak. 490; 101 S. W. 346
V. Robinson, 53 Wise.
309; 10 N. W. 512 235, 237
V. Wyman, 101 U. S. 392
283, 309
Whitney Arms Co. v. Barlow,
63 N. Y. 62; 20 Am. St.
Rep. 504 853, 854
Whitt V. Blount, 124 Ga. 671;
53 S. E. 205 383
853
642
612
181
1567
1366
1187
923
385
937
TABLE OF CASES
[The references are to pages]
Whittaker v. Amwell Nat.
Bank, 52 N.J. Eq. 400; 29
Atl. 203 1100, 1165, 1199
Whittenton Mills v. Upton, 10
Gray (Mass.) 582; 71 Am.
Dec. 681 79
Whittington v. Farmers' Bank,
5 H. & J. (Md.) 489 912, 1123,
1201, 1204
Whittle V. Vanderbilt Mining
Co., 83 Fed. 48 158, 1329
Whittmore v. Beekman, 2
Dem. (N. Y.) 276 1444, 1446
Whitwam v. Watkin, 78 L. T.
188 966, 1288
Whitwell V. Warner, 20 Vt.
425 297
Whitwham v. Piercy (1907),
1 Ch. 289 511, 533, 533, 1143,
1153, 1155
Whitworth v. Erie R. R. Co.,
5 Jones & S. (N. Y.) 437 889
Wiarton Beet Sugar Co., 12
Ont. L. R. 149 620
Wiberg v. Minnesota, etc. Re-
lief Ass'n, 73 Minn. 297;
76 N. W. 37 589
Wickersham v. Brittan, 93
Cal. 34; 28 Pac. 792; 29
Pac. 51; 15 L. R. A. 106 1251
V. Crittenden, 93 Cal.
17; 28 Pac. 788 972, 1322'
V. Crittenden, 110 Cal.
332; 42 Pac. 893 1217, 1238,
1312
Wickham and Bullock Island
Coal Co., 5 New So. Wales
State Rep. 365 100
Widener v. Railroad Co., 1
Wkly. Notes Cas. (Pa.) 472 1528
Wiedynska v. Pulaski Polish
Benev. Soc, 110 N. Y.
App. Biv. 732; 97 N. Y.
Supp. 413 584
Wiegand v. Lewis Lumber
Co., 158 Fed. 608 1400, 1402,
1403
Wier V. Bush, 4 Litt. (Ky.)
429 1185
Wiggin V. Freewill Baptist
Church, 8 Met. (Mass.) 301 1000
Wight V. Shelby R. R. Co., 16
B. Monr. (Ky.) 4; 63 Am.
Dec. 522 175, 194
Wilbur V. Linde, 49 Cal. 290;
19 Am. Rep. 645 1296
V. Stoepel, 82 Mich. 344;
46 N. W. 724; 21 Am. St.
Rep. 568 1347
Wilcox V. Foley, 64 Conn. 101 ;
29 Atl. 303; 42 Am. St.
Rep. 159; 25 L. R. A. 90 320
Wilde V. Jenkins, 4 Paige
481 (N. Y.) 873
Wildy V. Mid-Hants Ry. Co.,
18 L. T. 73 1546, 1604
Wiley V. Board of Education,
11 Minn. 371 398
V. Borough of Towanda,
26 Fed. 594 290, 301, 309
Wilhite V. Convent of Good
Shepherd, 25 Ky. Law
Rep. 1375; 78 S. W. 138 381,
386, 386
Wilkins v. Davies, 16 Vict.
L. R. 70 274
:?>. Thome, 60 Md. 253 974,975
Wilkinson v. Fleming, 30 111.
353 ' 1582
V. Providence Bank, 3
R. L 22
Wilkinson's Case, 2 Ch. 536
751
177,
214
Wilks V. Georgia Pac. R. Co.,
79 Ala. 180 858
Willamette Freighting Co. v.
Stannus, 4 Oreg. 261 148, 562,
608
Willamette Mfg. Co. v. Bank
of British Columbia, 119
V. S. 191; 7 Sup. Ct. 187 1521,
1521
Willcocks, Ex parte, 7 Cow.
(N. Y.) 402; 17 Am. Dec.
525 1011, 1022, 1059, 1202,
1203
Willcox V. Trenton Potteries
Co., 64 N. J. Eq. 173; 53'
Atl. 474
Willett V. Farmers' Sav. Bank,
107 Iowa 69; 77 N. W.
519
Willey V. Crocker Woolworth
Nat. Bank. (Cal.), 72 Pac.
832
— — V. Parratt, 3 Ex. 211
William Firth Co. v. South
Carolina, etc. Co., 122 Fed.
569; 59 C. C. A. 73 1402, 1402
William Radam Microbe Kil-
ler Co., 110 N. Y. App.
Div. 329; 97 N. Y. Supp.
76
Williams v. Bank of Michigan,
7 Wend. (N. Y.) 539 233, 233,
234
V. Boice, 38 N. J. Eq. 364
1127, 1128, 1129
448
851
844
341
1493
TABLE OF CASES
tThe references are to pages]
■Williams v. Brewster, 117
Wise. 370; 93 N. W. 479 645
V. Cheney, 3 Gray (Mass.)
215 232, 1370
i;. Chester, etc. Ry. Co.,
15 Jur. 828 1376
V. Citizens' Enterprise
Co., 153 Ind. 496; 55 N.
E. 425 216
^ V. Citizens' Enterprise
Co., 25 Ind. App. 351; 57
N. E. 581 45, 47, 113
V. Citizens' Ry. Co., 130
Ind. 71; 29 N. E. 408; 30
Am. St. Rep. 201; 15 L.
R. A. 64 244,250
V. Colby, 53 Hun (N. Y.)
637; 6N. Y. Supp. 459 297
V. Colonial Bank, 38 Ch.
D. 388 423
V. Erie Mountain, etc. Co.
(Wash.), 91 Pac. 1091 940
V. Fullerton, 20 Vt. 346
1120, 1354
V. Gaylord, 186 U. S. 157 ;
22 Sup. Ct. 798 1221
V. Hewitt, 47 La. Ann.
1076; 17 So. 496; 49 Am.
St. Rep. 394 110, 238, 242,
246, 251
V. Little Falls, etc. Co.
(Minn.), 108 N. W. 289 1321
V. Matthews, 103 Va.
180; 48 S. E. 861 600, 615
V. McDonald, 42 N. J.
Eq. 392; 7Atl. 866 1264
V. McKay, 40 N. J. Eq.
189; 53 Am. Rep. 775 1259,
1273, 1276, 1281, 1281,
1286, 1288
V. Mechanics' Bank, 5
Blatchf. 59 693, 700, 716
V. Montgomery, 148
N. Y. 519; 43 N. E. 57
— V. Morgan, 111 U. S. 684;
4 Sup. Ct. 638
V. Page, 24 Beav. 654
673,
1030
1592
342,
343
— V. Parker, 136 Mass. 204 443
450, 451, 455
— V. Pigott, 2 Ex. 201 308
— 1). Prince of Wales, etc
Co., 23 Beav. 338 889
— V. Riley, 34 N. J. Eq^98 1288
— V. St. George's Har-
bor Co., 2 De G. & J. 546 288
V. Salmond, 2 Kay & J.
463 342
Williams v. Savage Mfg. Co., 3
Md. Ch. 418 522, 522, 526, 526
V. Taylor, 99 Md. 306;
57 Atl. 641 614
V. Union Bank, 2 Humph.
(Tenn.) 339 232
V. Western Union Tel.
Co., 93 N. Y. 162 416, 496,
511, 1092, 1096, 1117, 1119
Williams Co. v. U. S. Baking
Co., 86 Md. 475; 38 AtL
990 393, 394
Williams' Case, 1 Ch. D. 576 620
, 9 Eq. 225 n 763, 766
Williams, Ex parte, 17 S. Car.
396 1607
Williamsburg, etc. Ins. Co. v.
Frothingham, 122 Mass.
391 232, 384
Williamsburgh Sav. Bank v.
Town of Solon 136 N. Y.
465 1 32 N. E. 1058 1450
Williamson v. Eastern Bldg.,
etc. Ass'n, 54 S. Car. 582;
32 S. E. 765; 71 Am. St.
Rep. 822 593
V. Kokomo Bldg., etc.
Ass'n, 89 Ind. 389 127, 249
V. Krohn, 66 Fed. 655;
13 C. C. A. 668; 62 Fed.
869 340, 1351, 1353
V. New Albany, etc. R.
R. Co., 1 Biss. 198 1584,
1603, 1603
V. New Jersey Southern
R.R.Co.,25N.J.Eq. 13 1503,
1585
V. New Jersey Southern
R. R. Co. , 26 N. J. Eq. 398 423,
1397, 1511
V. New Jersey Southern
R.R.Co.,29N.J.Eq.311 1496
1535, 1539
Williamson County Bank v.
Roberts-Buford, etc. Co.
(Tenn.), 101 S. W. 421 1239,
1242
Williamson's Adm'r v. Wash-
ington City, etc. R. R. Co.,
33 Gratt. (Va.) 624 1559,
1562, 1572
Willink V. Morris Canal, etc.
Co., 4 N. J. Eq. 377 1503, 1585,
1606
Willis V. Jermin, Cro. Eliz.
167; 2 Leon 97 400,401,402
V. Philadelphia, etc. R.
R. Co., 6 Wkly. N. Cas.
(Pa.) 461 731
TABLE OF CASES
[The references are to pages]
466
981
1364
1197
507
1511
1354
844
1020
Williston V. Michigan, etc. R.
R. Co., 13 Allen (Mass.) 400
Willpughby v. Chicago Junc-
tion Rys., etc. Co., 50 N.
J. Eq. 656; 25 Atl. 277
V. Comstock, 3 Hill (N.
Y.) 389
Wills V. James Rowland & Co.,
102 N. Y. Supp. 386
V. Murray, 4 Ex. 843
Wilmer v. Atlanta, etc. Ry.
Co., 2 Woods 409 1600, 1603
V. McNamara, etc. Co.
(1895), 2 Ch. 245 1096, 1099,
1099
Wilmott V. London Celluloid
Co., 34 Ch. D. 147 1315, 1323,
1545
Wilson V. Atlantic, etc. R. R.
Co., 2 Fed. 459 431, 793
V. Bank of Montgomery
County, 29 Pa. St. 537
V. Boyce, 92 U. S. 320
V. Bury, 5 Q. B. D. 518
V. Carter Oil Co., 46 W.
Va. 469; 33 S. E. 249
V. Central Bridge, 9 R. I.
590
V. Curzon, 15 M. & W.
532 275, 309
V. Duplin Telephone Co.,
139 N. Car. 395; 52 S. E.
62 662, 666
V. Hotchkiss, 2 Ont. L.
Rep. 261 274, 307, 310, 311
V. Hundley, 96 Va. 96;
30 S. E. 492; 70 Am. St.
Rep. 837 180, 183
D. Little, 2 N.Y. 443; 51
Am. Dec. 307 803, 808
V. Metropolitan Elevated
Ry. Co., 120 N.Y. 145; 24
N. E. 384; 17Am. St. Rep.
625 1343
V. Miers, 10 C. B. n. s.
348 71, 1188
V. Parvin, 119 Fed. 652;
56 C. C. A. 268 439, 440, 472
V. Stevens, 129 Ala. 630;
29 So. 678; 87 Am. St. Rep.
86
V. St. Louis, etc. Ry. Co.,
108 Mo. 588; 18 S. W. 286;
32 Am. St. Rep. 624
V. West Hartlepool Ry.
Co., 2 De G. & Sm. 475
Wilson Sewing Machine Co. v.
Spears, 50 Mich. 534; 15
N. W. 894
1357
716
395
230
Wilson, Ex parte, 8 Ch. 45 1265
Wilson's Case, 20 L. T. 962 169,
169, 171, 171
Wiltbank's Appeal, 64 Pa.
St. 256; 3 Am. Rep. 585 499,
503, 1147
Winboum's Case, 30 Fed. 167 1618
Winch V. Birkenhead, etc.
Ry. Co., 5 De G. & Sm.
562 978
Winchester v. Howard, 136
Cal. 432; 64 Pae. 692 1280
Winchester, etc. Turnpike
Co. V. Wicliffe, 100 Ky. 531 ;
38 S. W. 866; 66 Am. St.
Rep. 356 1122, 1122, 1123
Windmuller v. Standard Dis-
tilling, etc. Co., 114 Fed.
491 1080, 1080, 1081
V. Standard Distilling
Co., 115 Fed. 748 1080
V. Standard Distilling
Co., 106 N. Y. App. Div.
246; 94 N.Y. Supp. 52 86
Windram v. French, 151 Mass.
547; 24 N. E. 914; 8 L.
R. A. 750 730
Wineburgh v. U. S. Steam,
etc. Ad. Co., 173 Mass. 60;
53 N. E. 145; 73 Am. St.
Rep. 261 1285
Wing V. Charleroi Plate Glass
Co., 112 Fed. 817 1335
Winnipeg, etc. Ry. Co. v.
Mann, 7 Manitoba 81 1399
Winona, etc. R. R. Co. v. St.
Piaul, etc. R. R. Co., 23
Minn. 359 873, 874,877
Winslow V. Minnesota, etc. R.
R. Co., 4 Minn. 313; 77
Am. Dec. 519 1484, 1585
Winsor, Ex parte, 3 Story 411 993
1123, 1125, 1195
V. Bailey, 55 N. H. 218 968,
972, 980
Winsted Hosiery Co. v. New
Britain Knitting Co., 69
Conn. 565; 38 Atl. 310
1376, 1379
Winston v. Dorsett, etc. Co.,
129 111. 64; 21 N. E.
514; 4 L. R. A. 507 620
Winstone's Case, 12 Ch. D.
239 102, 111
Winter v. Baldwin, 89 Ala.
483; 7 So. 734 899, 906, 906,
906
V. Belmont Mfg. Co., 53
Cal. 428 682
TABLE OF CASES
[The references are to pages]
1543
23
47
Winter v. Iowa Central Ry.
Co., Ill Iowa 342; 82 N. W.
760
V. Iowa, etc. Ry. Co., 2
Dill. 487
V. Montgomery Gas-
Light Co., 89 Ala. 544; 7
So. 773 710, 711
Winters v. Armstrong, 37 Fed.
508 490, 493
V. Hub Mining Co., 57
Fed. 287 280
Wisconsin Lumber Co. v.
Greene, etc. Co., 127 Iowa
350; 101 N. W. 742; 109
Am. St. Rep. 387; 69 L. R.
A. 968 192, 527, 952
Wisconsin Tel. Co. v. City of
Oshkosh, 62 Wise. 32; 21
N. W. 828
Wishard v. Hansen, 99 Iowa
307; 68N.W. 691; 61 Am.
St. Rep. 238 648, 648
Wist V. Grand Lodge, 22
Oreg. 271; 29 Pac. 610;
29 Am. St. Rep. 603 584, 590
Witham v. Cohen, 100 Ga.
670; 28 S. E. 505
Withers v. Edwards, 26 Tex.
Civ. App. 189; 62 S. W.
795
V. Lafayette County
Bank, 67 Mo. App. 115 430, 749
Witmer v. Schlatter, 2 Rawle
(Pa.) 359
Witters v. Foster, 26 Fed.
737
Wittmer Lumber Co. v. Rice,
23 Ind. App. 586
Witts V. Steere, 13 Ves. 363
W. Key & Son (1902), 1 Ch.
467 428, 771, 793
W. L. Wells Co.' I). Gastonia
Cotton Mfg. Co., 198 U. S.
177; 25 Sup. Ct. 640
Wolf V. Davenport, etc. R. R.
Co., 93 Iowa 218; 61 N. W.
847
V. Pennsylvania R. R.
Co., 195 Pa. St. 91; 45
Atl. 936 941, 946, 1081
Wolfe V. Simmons, 75 Miss.
539; 23 So. 586 1356
V. Underwood, 96 Ala.
329 889, 1111, 1112
Wolverhampton, etc. Co. v.
Hawksford, 7 C. B. n. s.
795; Ex. Ch. 11 C. B. n. a.
456 923, 926, 925
1024
1029
310
1285
852
1141
249
1376
Woman's Foreign Missionaiy
Soc. V. Mitchell, 93 Mdf.
199; 48 Atl. 737; 63 L. R.
A. 711 380
Wood V. Chamber of Com-
merce, 119 Wise. 367; 96
N. W. 835 566, 580
V. Coosa, etc. R. R. Co.,
32 Ga. 273 175, 914
V. Corry Water Works
Co., 44 Fed. 146; 12 L. R.
A. 168 110, 1006, 1408
V. Drummer, 3 Mason
308 1127
V. Dubuque, etc. R. R.
Co., 28 Fed. 910 1633
V. Goodwin, 49 Me. 260;
77 Am, Dec. 259 1627
V. Guarantee Trust Co.,
128 U. S. 416; 9 Sup. Ct.
131 1453, 1466, 1467, 1457,
1461, 1659, 1562, 1566
V. Hammond, 16 R. I.
98; 17 Atl. 324; 18 Atl.
198 848
V. Holly Mfg. Co., 100
Ala. 326; 13 So. 948; 46
Am. St. Rep. 66 1637, 1640
V. Jefferson County
Bank, 9 Cow. (N. Y.) 194 230
V. Lost Lake Mfg. Co.,
23 Oreg. 20; 23 Pac. 848;
37 Am. St. Rep. 661 1237, 1238,
1320, 1321
V. Mott Iron Works, 114
N. Y. App. Div. 108 890
V. New York, etc. R. R.
Co., 70 Fed. 741 1561, 1563
V. Odessa Woodworks,
42 Ch. D. 636 1117
V. Sheldon, 42 N. J.
Law 421; 36 Am. Rep.
623 784, 785
V. Union Gospel Church
Bldg. Ass'n, 63 Wise. 9;
22 N. W. 756 124, 493, 1063,
1364
V. What Cheer Lodge,
20 R. I. 795; 38 Atl. 895 948
V. Whelen, 93 111. 153 283,
290, 1186, 1187, 1190, 1409
V. Wiley Construction
Co., 56 Conn. 87; 13 Atl.
137 127, 221, 228, 912, 1006
Wood's Appeal, 92 Pa. St.
379; 37 Am. Rep. 694 723, 725
Wood's Case, 15 Eq. 236 189
Wood's Ship, etc. Co., 62
L. T. 760 1238. 1242
TABLE OF CASES
[The references are to pages]
Wood's Sons Co. v. Sohaefer,
173 Mass. 443; 53 N. E.
881 ; 73 Am. St. Rep. 305 1379
Woodberry v. McCluig, 78
Miss. 831; 29 So. 514 57,113,258
Woodbury v. Allegheny, etc.
Ry. Co., 72 Fed. 371 1587
Woodbury Heights Land Co.
V. Loudenslager, 55 N. J.
Eq. 78; 35 Atl. 436 322
Woodhaven Bank v. Brooklyn
Hills Imp. Co., 69 N. Y.
App. Div. 489; 74 N. Y.
Supp. 1023 924
Woodhill v.- Sullivan, 14 C. P.
(Up. Can.) 265 396, 408
Woodman v. York, etc. R. R.
Co., 50 Me. 549 406
Woodroof V. Howes, 88 Cal.
.184; 26Pac. Ill 978,979
Woodruff V. Dubuque, etc.
R. Co., 30 Fed. 91 1047
V. Erie Ry. Co., 93 N. Y.
609 852, 863, 1611
V. New York, etc. R. R.
Co., 129 N. Y. 27; 29 N. E.
251 1490, 1490
V. Wentworth, 133 Mass.
309 1029, 1030
Woodruff's Estate, 1 Tuck.
(N. Y.) 58 1150
Woods V. Pittsburgh, etc. Ry.
Co., 99 Pa. St. 101 1533
Woods Motor Vehicle Co. v.
Brady, 181 N. Y. 145; 73
N. E. 674 212, 214, 215
V. Brady, 39 N. Y. Misc.
79; 78 N. Y. Supp. 203 209
Woodside Coal Co., 105 Fed.
56 44
Woodson V. Murdock, 22
Wall. 351 1484
Woolf V. East Nigel Gold Min-
ing Co., 21 Times L. R. 660
152,
1228
967
616
592
418,
Woolaston's Case, 4 De G. &
J. 437 660
Wooten 1). Wilmington, etc.
R. Co., 128 N. Car. 119; 38
S. E. 298; 56L. R. A. 615 792,
798, 798, 814, 814
Worcester Med. Inst. v. Hard-
ing, 11 Cush. 285 237
WorkinCTnen's Accommoda-
tion Bank v. Converse, 29
La. Ann. 369 241, 247
World's Fair Excursion Co.
V. Gasch, 162 111. 402; 44
N. E. 724 528
Wormser v. Metropolitan St.
Ry.Co., 184N. Y. 83; 112
Am. St. Rep. 596 966, 967, 967
V. Metropolitan St. Ry.
Co., 98 N. Y. App. Div.
29; 90 N. Y. Supp. 714
Worrall v. Judson, 5 Barb.
210
Worthington v. Schuylkill El.
Ry. Co., 195 Pa. St. 211;
45 Atl. 927
V. Tormey, 34 Md. 182
785 809
Wragg, Re (1897), 1 Ch. 796 '634,
635, 639
Wray v. Wray (1905), 2 Ch.
349 254
Wrexham, etc. Ry. Co.
(1899), 1 Ch. 440 831, 832, 1455
Wright V. Bundy, 11 Ind. 398 1495,
1584
V, Central, etc. Co., 67
Cal. 532; 8 Pac. 70 1016, 1250
V. Com., 109 Pa. St.
560; 1 Atl. 794 1015, 1015,
1016, 1163
— V. First Nat. Bank, 52
N. J. Eq. 392; 28 Atl. 719 1164,
1205, 1222
— V. Horton, 12 A. C. 371 1396,
1396
— V. Hughes, 119 Ind. 324;
21 N. E. 907; 12 Am. St.
Rep. 412 63, 65, 852, 862
— V. Incorporated Synod,
11 Can. Sup. Ct. 95 586
— V. Knoxville Livery, etc.
Co. (Tenn.), 59 S. W. 677 1244
— V. Lee, 2 S. Dak. 596;
51 N. W. 706 1009, 1009, 1187,
1208, 1224
— V. Ohio, etc. '^. R. Co.,
1 Disney (Oh.) 465
— V. Pipe Line Co., 101 Pa.
St. 204; 47 Am. Rep. 701
1451
— V. St. Louis Sugar Co.
(Mich.), 109 N. W. 1062
— V. Springfield, etc. R. R.
Co., 117 Mass. 226; 19 Am.
Rep. 412
V. Tuckett, IJ. & H. 266
V. Vermont, etc. R. R.
Corp., 12 Cush. (Mass.) 68
846,
862
293
1169
1137,
1156
457,
1108
Wright-Caesar Tobacco Co.
V. A. Hoen & Co. (Va.), 54
S. E. 309 141, 386
TABLE OF CASES
[The references are to pages]
"Wright Lumber Co. v. Hixon,
105 Wise. 153; 80 N. W.
1110, 1135 770, 773
Wright's Appeal, 99 Pa. St.
425 735
Wright's Case, 7 Ch. 55; 20
W. R. 45 179, 179, 625
Wright's Estate, 24 Pa. Co.
Ct. Rep. 376 503
W. Tasker & Sons (1905), 2
Ch. 587 1418, 1473, 1473, 1524
Wyeth V. Renz-Bowles, 23
Ky. Law Rep. 2337; 66
S. W. 825 158
Wylie V. Missouri Pac. Ry.
Co., 41 Fed. 623 1435, 1435
Wylly-Gabbett Co. v. Wil-
Uams (Fla.), 42 So. 910 1553
Wyman v. American Powder
Co., 8 Cush. (Mass.) 168 430
V. Bowman, 127 Fed.-
257; 62 C. C. A. 189 189, 702,
1296, 1316, 1317, 1318
V. Citizens' Nat. Bank,
29 Fed. 734 866
V. Wallace, 201 U. S.
230; 26 Sup. Ct. 495 63
Wynne v. Price, 3 De G. & S.
310 783, 785
Wynne's Case, 8 Ch. 1002 165, 171
Wyoming Coal Mining Co.
V. State ex rel. Kennedy
(Wyo.), 87 Pac. 337 896, 905
Wyoming Valley Ice Co., 153
Fed. 787 1400, 1402, 1403,
1403
Wyss-Thalman v. Beaver Val-
ley Brewing Co. (Pa.), 68
Atl. 187 919, 924, 1223
X
X. Company (1907), 2 Ch. 92 1364
Xantha Beneficial, etc. Ass'n,
8 Pa. Dist. Rep. 142 40
Yager's Adm'r v. Bank of
Kentucky (Ky.), 100 S. W.
848 815
Yale Gas Stove Co. v. Wilcox,
64 Conn. 101; 29 Atl. 303;
42 Am. St. Rep. 159; 25
L. R. A. 90 318, 319, 320
Yanish v. Pioneer Fuel Co.,
64 Minn. 175; 66 N. W.
198 407
Yarborough v. Bank of Eng-
land, 16 East 6 869
Yates V. Jones Nat. Bank
(1907), 27 Sup. Ct. Rep.
638; 206 U. S. 158 1355, 1359
V. Jones Nat. Bank
(Nebr.), 105 N. W. 287 1355
V. Utica Bank, 206 U. S.
181 1355, 1359
Yeager v. Bank of Kentucky
(Ky.), 106 S. W. 806 814
Yeaton v. Eagle Oil, etc. Co.,
4 Wash. 183; 29 Pac. 1051 517
Yeiser v. U. S. Board, etc. Co.,
107 Fed. 340; 46 C. C. A.
567; 52L. R. A. 724 322,324,
326
Yelland's Case, 4 Eq. 350 1242
Yellow Jacket, etc. Co. v.
Stevenson, 5 Nevada 224 1235,
1372
Yeoland Consols, 58 L. T. 922 173
Yetts V. Norfolk Ry. Co., 3
De G. & Sm. 293 931, 946
Yoakum v. Selph, 83 Tex.
607; 19 S. W. 145 1619
Yonkers Gazette Co. v. Taylor,
30 N. Y. App. Div. 334; 51
N. Y. Supp. 969 209, 209, 214
York V. Mathis, 68 Atl. 746 1374
York Glass Co., Re, 60 L. T.
744 534
York Tramways Co. v. Wil-
lows, 8 Q. B. D. 685 1164, 1165,
1175, 1182, 1212, 1230, 1232
York & North Midland Ry. v.
Hudson, 16 Beav. 485 1320
York, etc. R. R. Co. v.
Ritchie, 40 Me. 425 658, 1214
Yorkshire Ry. Wagon Co. v.
Maclure, 21 Ch. D. 309 64, 1545
Young V. Commissioners of
Mahonning Co., 53 Fed.
895 971
V. Equitable Life Ass.
Soc, 112 N. Y. App. Div.
760 944, 979, 1285
V. MacNider, 25 Can.
Sup. a. Rep. 272 1436
V. Montgomery, etc. R.
R. Co., 2 Woods 606 1485, 1588
V. Naval, Military, etc.
Soc. (1905), 1 K. B. 687 1245,
1281, 1283, 1300
V. Plattner Lmplement
Co. (Colo.), 91 Pac. 1109 237
V. New Standard Con-
centrator Co. (Cal.), 83
Pac. 28 797
V. South African Syndi-
cate (1896), 2 Ch. 268 1004
TABLE OF CASES
[The references are to pages]
Young V. South Tredegar Iron
Co., 85 Tenn. 189; 2 S. W.
202; 4 Am. St. Rep. 752 381,
386, 386, 715
V. Vough, 23 N. J. Eq.
325 571, 572, 769, 774
Young Reversible Lock-Nut
Co. V. Young Lock-Nut Co.,
72 Fed. 62 127, 300
Young Women's Christian
Ass'n V. St. Louis Women's
Christian Ass'n, 115 Mo.
App. 228; 91 S. W. 171 129,
369
Yoimgblood v. Comer, 97 Ga.
152; 23S. E. 509; 25 S. E.
838 1619
Younglove v. Steinman,' 80
Cal. 375; 22 Pao. 189 652
Youree v. Home Town Mut.
Ins. Co., 180 Mo. 153; 79
S. W. 175 1185
Yuruari Co., 6 Times L. R.
119 764, 765
Zabriskie v. Cleveland, etc.
R. R. Co., 23 How. 381 86, 972,
1221, 1221
Zaiesky v. Iowa, etc. Ins. Co.,
102 Iowa 512; 70 N. W.
187; 71 N. W. 433 912
Zang V. Adams, 23 Colo. 408;
48 Pac. 509; 58 Am. St.
Rep. 249 213
Zartman v. First Nat. Bank,
189N.Y.267; 82N.E. 127
1503, 1505, 1605, 1506, 1553
Zearfoss v. Farmers', etc.
Inst., 154 Pa. St. 449; 26
Atl. 211; 35 Am. St. Rep.
848 1224
Zebley v. Farmers' L. & T.
Co., 139 N. Y. 461; 34
N. E. 1067 1488
Zeigler v. Valley Coal Co.
(Mich.), 113 N. W. 775 300
Zelaya, etc. Co. v. Meyer, 8
N. Y. Supp. 487; 28 N. Y.
St. Rep. 759 627
Zellerbach v. Allenberg, 99
Cal. 57; 33 Pac. 786 809, 1111
Zeltner v. Zeltner Brewing
Co., 174 N. Y. 247; 66
N. E. 810; 95Am. St. Rep.
574 1183
Zihlman v. Cumberland Glass -
Co., 74 Md. 303; 22 Atl. 271 400
Zimmerman v. ICansas City,
etc. R. Co., 144 Fed. 622;
75 C. C. A. 424 1543, 1635
V. Masonic Aid Ass'n,
75 Fed. 236 917, 918
Zinc Carbonate Co. v. First
Nat. Bank, 103 Wise. 125;
79 N. W. 229; 74 Am. St.
Rep. 845 327, 870, 1346
Zinn V. Baxter, 65 Oh. St. 341 ;
62 N. E. 327 962, 972, 974, 982
V. Germantown, etc.
Mut. Ins. Co. (Wise), 111
N. W. 1107 1131
ADDENDA
CASES OF ESPECIAL INTEREST REPORTED WHILE
THIS BOOK WAS GOING THROUGH THE
PRESS.
National Life Ins. Co. of the United States v. National Life
Ins. Co., 209 U. S. 317, modifying or supplementing the law as
stated in § 456, holds that where a corporation has engaged in
business under a certain name at a certain city before the incor-
poration of another company under substantially the same name,
the courts will not supervise the discretion of the post ofHce
authorities, so as to enjoin them from delivering to the former
company mail matter addressed to the common name at the
city in question, without any distinguishing street or number,
merely because a vastly larger proportion of such matter may
have been found by experience to be intended for the second
company.
Richardson v. Shaw, 209 U. S. 365, and Thomas v. Taggart,
209 U. S. 385, are important cases, although laying down no
novel propositions of law, upon the subject of purchases of
shares on margin and of the mutual rights of pledgors and
pledgees of shares.
MODERN CORPORATION LAW
CHAPTER I
HISTORICAL AND INTRODUCTORY
Section
Formation of corporations at common law 1
Common law rule in America 2
Dissimilarity of American statutory corporations and corporations
formed by royal charter . . 3
Development of modem corporation or company law in England 4-13
Incorporation by royal charter 4
Incorporation by special Act of Parliament — "Companies
Clauses Consolidation Act" 5
Development of unincorporated joint-stock companies — The
Bubble Act 6
General incorporation laws — 7-13
The Statute 39 EUz., c. 5 7
Companies Act of 1844 8
Companies Act of 1856 9
Companies Act of 1862 10-12
The "Memorandum of Association" 10
The "Articles of Association" 11
"Table A" 12
Amendments and Supplements to Companies Act of 1862 —
Companies Act of 1900 13
Development of modern corporation law in the United States . . . 14-18
In general 14
Growth of system of general incorporation laws 15
Constitutional prohibition of incorporation by special act ... 16
Unincorporated joint-stock companies 17
Modem general- incorporation laws 18
Effects of modern liberal incorporation laws 19-22
Right to incorporate no longer a franchise or special privilege . 19
Early judicial recognition of this principle 20
Liberal construction of modem incorporation laws 21
Frauds perpetrated under cover of liberal laws 22
Classification of corporations 23-29
Distinction between corporations formed under general laws and
corporations created by special act 23
Under what statute corporation is deemed to be formed . 24
Classification with respect to liability of members . ... 25
Classification with respect to objects . 26-29
Ancient classification . 26
VOL. I. — 1 1
§ 1 HISTORICAL AND INTRODUCTORY [ChAP. I
Classification of corporations {continued) Section
How objects determined for purposes of classification ... 27
Municipal corporations, religious corporations, business
corporations, public-service corporations, financial
corporations, etc 28
"Public" and "private" corporations 29
Nomenclature — " Corporations" and "Companies" 30
§ 1. Formation of Corporations at Common Law. — By the
common law of England, corporations could be formed in only
one way — by a special charter granted by the crown. To
be sure, the legislature by special act might create a corpora-
tion ; but an act of the legislature involves a change in the law,
so that a corporation formed by special act of the legislature
could not properly be said to be organized under the common
law. No sufficient sound economic reason applicable to modern
conditions can be adduced to support this common law doc-
trine. For, in a free commercial country, individuals should
have the power by mere private contract or agreement to asso-
ciate themselves together as a corporation for any merely private
lawful object. They should enjoy the same freedom in the
formation of corporations that Anglo-Saxon jurisprudence has
always accorded in the formation of partnerships or voluntary
associations. To be sure, safeguards should be provided against
fraud, and particularly against abuse of that immunity from
individual Uability of the members for the debts of the company
which in popular estimation constitutes the most valuable, if
not the most essential, characteristic of a commercial corpora-
tion. But subject to all needful restrictions of this sort, the
organization of corporations in any country that prides itself
on freedom of contract and on the right of its citizens to co-
operate in the most effective manner in any lawful enterprise,
should be as free as the formation of unincorporated associa-
tions; and most certainly the benefits of doing business under
the corporate form should not be dependent on the caprice of
a monarch or of a minister, or upon the special favor of the
legislature.
§ 2. Common Law Rule in America. — Nevertheless, the com-
mon law prohibition of corporations except by royal charter
was carried by our ancestors across the Atlantic, and became
part of the jurisprudence of the United States. In colonial
times, the king did occasionally erect corporations in America
§ l-§ 30] THE COMMON LAW § 3
by his charter, as witness the well-known instance of Dartmouth
College.^ In some of the colonies, notably in Maryland ^ and
Pennsylvania,^ this prerogative of the crown was delegated in
part or in whole to the lord proprietary or viceroy, and by him
sparingly exercised ; but if in any colony the prerogative extended
to the incorporation of business corporations, no instance is
known in which it was exercised for that purpose.
After the Declaration of Independence, the prerogative
perished altogether; and was not renewed or vested by the
various state constitutions in the executive. Accordingly, the
royal charter, the only common law method of forming cor-
porations, having become impracticable, persons desiring to
become incorporated were obliged in each case to apply to the
legislature for a special act of incorporation. Thus, the separa-
tion from the mother country, the abolition of the royal prerog-
ative, and the endeavor to preserve and even to increase the
individual liberties previously enjoyed by the colonists as British
subjects, resulted, curiously enough, in depriving the American
people of the only mode of incorporating known to the common
law, and thus in still further restricting the already too limited
power of organizing corporations.
§ 3. Dissimilarity of American Statutory Corporations and
Corporations formed by Royal Charter. — In the United States,
although royal charters of incorporation have been obsolete for
' See Dartmouth College v. Wood- city of Annapolis was incorporated
ward, 4 Wheat. 518. by a deputy of Queen Anne during
^ See Charter of Maryland, § 14 the suspension of the proprietary
(Kilty's Laws of Md. ; Md. Code Pub. government, and the charter was
Gen. Laws of 1904, p. 100), where confirmed with modifications by Act
the Lord Proprietary was invested of Assembly, Laws of Md. of 1708,
with the power "Villas item in Chap. 7.
Burgos et Burgos in Civitates ad ' Charter of Pennsylvania, § 10
Inhabitantium Merita et Locorum (Charters and Provincial Laws of Pa.,
Opportunitates cum Privilegiis et ed. of 1762, p. 3), where Charles 11
Immunitatibus congruis erigendi et granted to Penn and his heirs power
incorporandi." Perhaps the only "to erect and incorporate towns into
exercise of this power was the grant boroughs and boroughs into cities."
of a charter by Lord Baltimore in In pursuance of this power, the pro-
1667, incorporating the "Mayor, Re- prietary granted a charter of in-
corder. Aldermen, and Common corporation in 1701 to the city of
Council of the City of St. Mary's Philadelphia, and subsequently
City." See McKim v. Odom, 3 erected a number of boroughs.
Bland Ch. (Md.), 407, 416, note. Charters and Provincial Laws of
where a recital of some of the terms Pa., ed. of 1762, pp. 10 et seq. See
of the charter will be found. The also 3 Wilson's Lectures, 409.
3
§ 4 HISTORICAL AND INTRODUCTORY [ChAP. I
more than a century, the old terminology has to a great extent
survived, and is applied to the wholly different statutory corpora-
tions of to-day. Thus, special acts of incorporation are, in
America, commonly called "charters," although this use of the
term is perhaps inappropriate and is certainly not in vogue in
England. There, "charter" still means a royal charter, and is
very rarely applied to a special act of parliament creating a cor-
poration.' Indeed, the American law of corporations is not
merely in terminology but to some extent in substance an out-
growth of the old law of corporations formed under royal charter.
This is certainly unfortunate ; for what law there is relating to
the old corporations chartered by the crown — and the cases
on the subject are comparatively few and meagre — is of an
antiquated nature, totally inapplicable to modern joint-stock
business corporations. The greatest harm that has come from
assimilating modern incorporated companies to old-fashioned
chartered corporations is the notion that the right to be a cor-
poration is a special franchise. To be sure, this was true at
common law; but as stated above this feature of the common
law was an anomaly in the jurisprudence of a free country, and,
as will be more fully explained below,^ it is now completely
abrogated both in England and in most of the United States,
where the right to incorporate for any lawful object is free to
everybody, on observing certain statutory formalities.
§ 4-§ 13. DEVELOPMENT OF CORPORATION OR COM-
PANY LAW IN ENGLAND
§ 4. Incorporation by Royal Charter. — Even in England the
formation of corporations by royal charter, although always pos-
sible, was never frequent, and is perhaps at the present day
even rarer than ever. The corporations organized in this way
have been chiefly for municipal, charitable, educational, or re-
ligious purposes, and have but little in common with the ordi-
' In Simpson v. Molson's Bank uses the word in that sense. For an
(1895), A. C. 270, the reporter in his instance of similar use of the word
statement of the facts of the case in Canada, see McMurrich v. Bond
refers to a special act of incorpora- Head Harbour Co., 9 Up. Can. Q. B.
tion as a "charter," and in Attorney- 333, 336.
General v. Mersey Ry. Co. (1907), ' See infra, § 19-§ 20.
A. G. 415, 417, Lord Macnaghten
§ l-§ 30] COMPANIES CLAUSES ACTS § 5
nary business corporation of to-day. Some famous historic
organizations, formed partly for private gain and partly for
public governmental' objects, such as the East India Company,
were incorporated in this way. The Bank of England was in-
corporated by royal charter but in pursuance of a special act
of parliament.'
§ 5. Incorporation by Special Act ot Parliament — The "Com-
panies Clauses Consolidation Act." — In England, partly be-
cause the crown was for some reason so very chary in granting
charters of incorporation, applications to parliament for special
acts of incorporation became more and more frequent as
business conditions developed and the desirability of incor-
porating becarae constantly greater.^ Special acts of incorpora-
tion particularly for canal and railway companies accordingly
multiplied apace. A general resemblance pervaded all of these
special acts; but each was characterized by its own peculiar
features. As the general scheme or constitution of all such
corporations was the same or nearly so, the same language to
a great extent was employed in all such special acts; and, in
order to avoid this repetition, parliament in 1845 adopted a
code or system of provisions which should be taken as em-
bodied in all subsequent special acts of incorporation,' except
in so far as expressly excluded. This code is known as the
"Companies Clauses Consolidation Act," sometimes abbre-
viated to "Companies Clauses Act." At the same session of
parliament, a statute was passed, known as the "Railway
Clauses Consolidation Act," containing certain provisions as
to the construction of railways which in hke manner were to
be taken as embodied in all subsequent special acts for the in-
corporation of railway companies.^ These statutes, it will be
' Stat. 5 & 6 W. & M., c. 20. are the "Companies Clauses Act,
See 1 Black. Comm. 473. 1863," the "Companies Clauses
' As Blackstone points out, spe- Act, 1869," the "Companies Clauses
cial acts of parliament creating cor- Consolidation Act, 1888," and the
porations had become common only "Companies Clauses Consolidation
in his own time. 1 Black. Comm. Act, 1889."
473. * 8 & 9 Vict:, o. 20. See the
'8 & 9 Vict., c. 16. See also "Lands Clauses Consolidation Act,"
"Companies Clauses Consolidation 8 & 9 Vict., c. 18, containing pro-
Act (Scotland)," 8 & 9 Vict., c. 17, visions to apply to companies upon
a similar act applicable to Scotland, which the power of condemning
Later "Companies Clauses Acts" land should be conferred.
§ 5 HISTORICAL AND INTRODUCTOEY [ChAP. I
observed, are not general incorporation laws, and do not apply
to companies organized under general laws or "Companies
Acts," the first of which had been passed in the preceding
year.
This separation between matters so distinct as a general
enabling act and the establishment of regulations for companies
thereafter incorporated by special act certainly avoids confu-
sion; and the example might perhaps profitably be followed
in those American states where special acts of incorporation are
still resorted to. Much trouble has been occasioned by en-
deavoring to combine in one act or code general provisions
for the formation of corporations and for the regulation of the
companies formed thereunder, with provisions for the regula-
tion of such companies as the legislature had previously incor-
porated or might subsequently see fit to incorporate by special
act, the only object of which latter provisions is avoidance of
the necessity of inserting in each special act a complete system
of corporation law.' This trouble and confusion might be ob-
viated, it would seem, by the passage of a " Companies Clauses
Act " ; although this opinion must be expressed with diffidence,
inasmuch as some English lawyers advocate, as tending to
greater simplicity, a consolidation of the Companies Clauses
Acts with the Companies Acts.^
' Cf . Qregg v. Granby Mining, etc. granted by the act of incorporation, "
Co. (Mo.), 65 S. W. 312 (a constitu- held not to apply to ccporations
tional provision making all charters created by special act of the legisla-
of incorjSoration subject to amend- ture but only to those formed under
ment or repeal by the legislature the general law) ; Love v. Holmes
held to apply both to companies in- (Miss.), 44 So. 835 (municipal cor-
corporated under general laws and poration created by special act, held
companies created by special act) ; not subject to a limitation of munici-
Montdair v. N. Y. & Greenwood pal indebtedness prescribed by the
Lake By. Co., 45 N. J. Eq. 436, 441- general statutes applicable to mu-
442 ; 18 Atl. 242 ; Hayes v. Mor- nicipalities) ; State v. Cape Girar-
gan's La., etc. Co., 42 So. 150; 117 deau, etc. Road Co. (Mo.), 105 S. W.
La. 593 ; Frader v. Railway Co., 88 761 (where the question was decided
Terni. 138 (headnote 8) ; 12 S. W. whether a turnpike company incor-
537; City of Atlanta v. Gate City porated by special act was subject
Gas Light Co., 71 Ga. 106 (pro- to a provision in a statute applica-
vision in general incorporation law ble to corporations generally, or to
that "no charter shall have any force a different provision in a general
or effect for a longer period than law for incorporation of turnpike
two years unless the incorporators companies).
within that time shall in good faith ' Rawlins & Macnaghten on
commence to exercise the powers Companion, preface, pp. v-vi.
.6
§ l-§ 30] UNINCORPORATED COMPANIES § 6
§ 6. Development of Unincorporated Joint-stock Companies.
— The Bubble Act. — Side by side with the constantly in-
creasing frequency of incorporation by special statutes, which
occasioned the Companies Clauses Consolidation Act, there
developed in England out of the ordinary partnership a form
of association known as joint-stock companies, which, although
unincorporated, much more closely resemble the ordinary stock
corporations of to-day than do the common law corpora-
tions chartered by the crown. These joint-stock companies
originated in an attempt to secure so far as practicable by mere
mutual agreement among the members the same advantages
that would be obtained by incorporation. Parliament unwisely
frowned upon this endeavor, and the Bubble Act ' sought alto-
gether to repress it. That statute, however, never proved very
effective in accomplishing its purpose,^ and in 1825 was re-
pealed.' Notwithstanding this repeal, some judges continued
to look askance at these associations ; * but other judges evinced
a more liberal disposition,^ and the number of such companies
constantly increased.
Although these unincorporated joint-stock companies were,
in legal contemplatipn, nothing but huge partnerships distin-
guished from ordinary firms only by the number of their mem-
bers, yet the ingenuity of the cleverest solicitors was taxed
in order to give them, practically, all the most important
attributes of corporations. Every member or shareholder
was required to sign and seal the company's deed of settle-
ment, which contained elaborate provisions for the govern-
ment of the concern. Particularly, it provided that the
partnership should not be dissolved by the death of a member
but that his personal representative should on executing the
deed of settlement become a member in his room. Transfers of
shares inter vivos were also provided for. Moreover, the manage-
ment of the company was vested in a board of directors, and the
deed always stipulated that a mere private member or partner
should have no power to act as agent for the concern. The
' 6 Geo. I, c. 18, § 18. ° Harrison v. Heathom, 6 Man. &
■' Cf. Rex V. Webb, 14 East 406 ; Gr. 81 ; Be Aston, 27 Beav. 474,
Rex V. Dodd, 9 East 516 ; Josephs affirmed, 4 De G. & J. 320 ; Mexican,
V. Prebber, 3 B. & C. 639. etc. Co., 4 De G. & J. 544. Cf. cases
' 6 Geo. IV, c. 91. cited, infra, § 17.
* Blundell v. Winsor, 8 Sim. 601.
7
§ 7 HISTORICAL AND INTRODUCTORY [ChAP. I
capital of the company was to consist of a certain amount divided
into shares, very much as in the modern stock corporation.
Sometimes it was sought to approximate limited liability by pro-
viding that all the company's contracts should contain a clause
by which the contractor should agree to look only to the capital
of the company for his damages in case of breach.' How to
avoid the necessity of making all of the shareholders parties to
any action or suit by the company was a serious problem. Some-
times special acts of parliament were obtained authorizing the
association to sue and be sued in the name of some officer, and
in 1835 a general statute authorized the crown to grant to unin-
corporated companies the right to sue and defend in the name
of an officer.^ Sometimes the legal title to the company's prop-
erty and choses in action was vested in trustees, who would thus
be entitled to sue in their own names for any breach of contract
or injury to the company's property.^ Of course, the members
of such companies were not greatly concerned in facilitating
actions against the companies; and, moreover, failure to join
all the members as defendants in actions of tort was no
irregularity at all, and even in actions of contract could not
be availed of except by plea in abatement.*
§ 7-§ 13. General Incorporation Laws.
§ 7. The Statute of 39 Elizabeth Chapter 6. — As loiig ago
as the reign of Elizabeth a general statute for the incorporation of
hospitals and similar charities had been enacted by parliament.'
This act provided that any person seised of land in fee simple
might by deed enrolled in the High Court of Chancery create
a corporation to hold the land for the purpose of a "hospital,
maison de dieu, abiding place or house of correction." ° By its
' E. g. Ex parte Liquidators of held that an unincorporated com-
British Nation Life Ass. Ass'n, 8 pany could not sue in the names of
Ch. D. 679. its "trustees," who, however, do not
^ 4 & 5 Wm. IV, c. 94. appear to have been invested with
^ Cf. Weir v. Metropolitan Street legal title, but seem to have been
Ry. Co. (Mo.), 103 S. W. 583 (where mere directors,
a similar device was held not to * Cf. McCreary v. Chandler, 58
obviate the necessity for making all Me. 537.
the shareholders parties). It would ' 39 Eliz., c. 5.
seem that the case last cited mis- " See 2 Coke Inst., 720-725, where
applies Niven v. Spickerman, 12 the statute is commented upon and
Johns. (N. Y.) 401, where it was a form of a deed is given.
8
§ l-§ 30] THE COMPANIES ACTS § 8
terms the act was to continue in force for only twenty years ;
but a few years after its expiration it was revived and made per-
petual.' Notwithstanding the interest attaching to this statute
as the first general incorporation act in a common-law jurisdic-
tion, its effect upon the history of English law has been neg-
ligible. Modern English general incorporation laws were not
suggested by this statute of Elizabeth but were evolved from
the statutes mentioned in the last paragraph, which removed
impediments in the way of the formation and operation of joint-
stock companies.
§ 8. Companies Act of 1844. — In 1844, Parliament, which
by the above mentioned Acts of 1825 and 1835 had already aban-
doned the policy of discouraging combinations of men and
money for legitimate business purposes, definitively embarked
upon the enlightened course of facilitating rather than thwart-
ing all such enterprises. In that year, the first English general
incorporation law, or companies act, was passed -i- the "Joint
Stock Companies Registration Act," or Companies Act of 1844.^
This statute, after providing as to companies to be organized
under it for a preliminary embryonic period of "provisional
registration," ' went on to enact that the subscribers to the
capital of the projected company should sign and seal a "deed
of settlement" stating among other things the business or pur-
pose of the company, the amount of its capital and the number
of shares into which it should be divided, the amount authorized
to be raised by loan, etc. The deed was also to contain a cove-
nant by each shareholder to pay all instalments of his subscrip-
tion to the capital and perform all engagements resting upon
him as shareholder. Upon the due execution of this deed, it
was to be recorded, after which a "certificate of complete regis-
tration" might be obtained. Thenceforth, the company was
incorporated for the purpose of carrying on the trade or business
for which it was formed, but without restriction of liability of
the shareholders' under any judgment or decree. With this im-
portant exception, the act conferred all advantages of doing
business under a corporate form. Finally, by an amendatory
statute passed some ten years later,* the privilege of limited
liability was conferred upon members of all companies organ-
■ Stat. 21 Jac. 1, c. 1. » See infra, § 312.
' 7 & 8 Vict., c. 110. ♦ 18 & 19 Vict., c. 133.
§ 9 HISTORICAL AND INTRODUCTORY [ChAP. I
ized under the Act of 1844 whose deed of settlement should
provide therefor and whc»Be name should contain the word
"Limited."
§ 9. Companies Act of 1856. — In the year following, that
is to say, in 1856, the Act of 1844 with its amendments was re-
pealed, and a new and more progressive system was adopted
known as the Companies Act of 1856.' This statute provided
for the formation of corporations with either limited or un-
limited liability. It was in its main features similar to the Com-
panies Act of 1862 ^ by which six years later it was superseded
and which, being still the basis of the company law of England
and having given rise to many leading cases, demands some-
what detailed examination.
§ 10. Compames Act of 1862. — The Memorandum of Asso-
ciation. — Under the Companies Act of 1862,^ the method of
forming corporations and the general nature of their constitu-
tion is as foUews : First, at least seven persons sign a document
known as the "memorandum of association," which must state
where the company is formed on the principle of having the lia-
bility of its members limited to the amount, if any, unpaid on
their shares, the company's name, the location of its office, its
objects, the fact that the liability of its members is limited,
and the amount of its capital divided into shares of a certain
fixed amount. Each subscriber to the document shall write
opposite his name the number of shares he takes, and must take
at least one. This memorandum of association is then lodged
for record with the registrar of joint-stock companies, who after
its registration issues a certificate stating that the company is
incorporated; and thenceforth the company is a corporation.
The memorandum of association, it will be observed,
embodies the fundamental constitution of an English com-
pany. It must state the company's objects, and any object
not therein contained is idtra vires of the corporation.* It
corresponds to the instrument that in some American states is
' 19 & 20 Vict., e. 47. shareholders may make such regu-
' 25 & 26 Vict., c. 89. lations for their own govermnent as
» 25 & 26 Vict., c. 89. they thinl? fit." Per Lord Cairns in
* "The memorandum of associa^ Ashbury Ry. Carriage Co. v. Biche,
tion, is, as it were, the area beyond L. R. 7 H. L. 653. 671 See also
which the action of the company infra, p. 11 note 2.
cannot go; inside that area the
10
§ l-§ 30]
THE COMPANIES ACTS
§11
called a "certificate of incorporation," and in others "articles
of association." '
§ 11. The Articles of Association. — Contemporaneously
with the filing of the memorandum of association, the incor-
porators under the Companies Act of 1862 may file for record
what are known as "articles of association," containing regula-
tions for the management of the company and the conduct of its
business. These partake of the nature of by-laws according
to American terminology; but, inasmuch as they are recorded,
all who deal with the company are chargeable with notice of
their contents. They must be carefully distinguished from the
memorandum of association, to which they are distinctly sub-
ordinate.^ As a learned judge has said, "the memorandum of
association is the constitution of the company," while the articles
are "merely the machinery for carrying that into effect." ^ And,
of course, the English articles must not be confused with what
in some American states are known by the same name, — arti-
cles of association, — which as stated in the last paragraph
' See infra, § 31. the rights and the powers of the gov-
' In Ashbury By. Carriage Co. v. eming body as between themselves
Riche, L. R. 7 H. L. 653, 667-668, and the company at large, and the
Lord Calms said : " I will ask your mode and form In which the busi-
Lordshlps to observe * * * the marked ness of the company is to be carried
and entire difference there is be- on, and the mode and form in which
tween the two documents which changes in the internal regulations
form the title deeds of companies of the company may from time to
of this description — I mean the time be made. With regard, there-
Memorandum of Association on the fore, to the memorandum of associa-
one hand and the Articles of Associa- tion, if you find anything which
tion on the other hand. With re- goes beyond that memorandum, or
gard to the memorandum of is not warranted by it, the question
association, your Lordships will will arise whether that which is so
find, as has often been pointed out, .done is idtra vires, not only of the
although it appears to have been directors of the company, but of
somewhat overlooked in the present the company itself. With regard to
case, that that is, as it were, the the articles of association, if you
charter, and defines the limitation find anything which, still keeping
of the powers of a company to be within the memorandum of asso-
established under the act. With elation, is a violation of the articles
regard to the articles of association, of association, or in excess of them,
those articles play a part subsidiary the question will arise whether that
to the memorandum of association, is anything more than an act extra
They accept the memorandum of vires the directors, but intra vires
association as the charter of the the company."
company, and so accepting it, the ' Tilbury Portland Cement Co.,
articles proceed to define the duties, 62 L. J.*Ch. 814, 815.
11
§ 12 HISTORICAL AND INTRODUCTORY [ChAP. I
correspond to the memorandum of association of an English
company. The articles cannot add to or subtract from the
memorandum. For instance, a power that is not conferred
upon the company by the memorandum is ultra vires even
though expressly authorized by the articles.^
But so great latitude is allowed by the statute, and so few
particulars as to the company's constitution are required to be
stated in the memorandum, that many matters of deep concern
to the company are left to be regulated by the articles. For ex-
ample, the articles may regulate the number and powers of
directors, their term of office, the manner of their appointment
or election, the method of conducting general meetings of the
company, the number of votes to which each shareholder shall
be entitled, the manner of transferring shares, calls for unpaid
subscriptions to capital, the forfeiture of shares, and many
other matters of equal or greater importance. Parliament has
undertaken to prescribe no hard and fast rules on sirch subjects
of internal management, but has wisely left each corporation
to regulate them for itself according to its own conceptions of
its needs. The result is a freedom of regulation which is prob-
ably obtainable nowhere in the United States. In the not dis-
tant future, however, some state legislature may perceive that
these matters, at least in the case of industrial corporations, are
of purely private concern and should accordingly be committed
entirely to the parties interested. The prediction may be ven-
tured that when one state shall have taken the lead in this direc-
tion, others will fast follow the example.
§ 12. " Table A." — As already stated, the promoters of
an English company may prepare for their corporation such
articles of association as they please, so long as no rule of law
or of public policy is contravened. But the act provides, in a
schedule annexed thereto known as "Table A," a very complete
set of articles, which are to apply to any company "limited by
shares " unless other articles be adopted. Accordingly, any such
company may be registered without articles, and in that event
Table A will constitute its articles. Moreover, even where
Table A is not thus adopted in toto, it serves as a convenient
model for such articles as may be desired ; and often the articles
adopt or embody some of the provisions of Table A, but modify
' Ashbury Ry. Carriage Co. v. Riche, L. R. 7 H. L. 653, 671.
12
§ l-§ 30] THE COMPANIES ACTS § 13
or exclude the remainder. An English writer questions the de-
sirability of providing by statute any such form or model of
articles of association.' But all who have experienced the diffi-
culties that are occasioned in America by the frequent failure
of corporations to adopt any by-laws will readily perceive the
advantages to be derived from a complete statutory code of in-
ternal regulations which is to govern every company except in
so far as other regulations may be adopted by the company itself.
§ 13. Amendments and Supplements to Companies Act of
1862 — Companies Act of 1900. — The Companies Act of 1862
is still in force in Great Britain, and its main features remain
unaltered. A number of amendatory or supplemental acts,
however, have been passed.^ Of these, the only one that makes
any very substantial inroads on the general scheme for the
formation 'and constitution of British corporations is the Com-
panies Act of 1900. This statute, which has been criticised by
some English lawyers as a bungling piece of legislation, pro-
vides, inter alia, that although a conipany becomes incorporated
upon the issuance by the registrar of a certificate of due regis-
tration, yet no allotment of shares shall be made until a certain
amount of capital shall have been subscribed, payable in cash,
and that the company shall not commence business until a cer-
tain amount of capital has been allotted and other conditions
complied with. Any contract made by a company before
it is entitled to commence business shall be provisional only,
and shall not be binding on the company until that date, when
it shall become binding. It will be seen that these provisions,
although making serious changes in the law governing the
organization of corporations, leave untouched the fundamental
scheme for incorporation by registration of a memorandum
and articles.
' Palmer's Company Precedents, panies Act, 1880," 43 Vict., c. 10 ;
9th ed., Appendix on "Revised "Companies (Colonial Registers)
Table A," p. 5. Act, 1883," 46 & 47 Vict., c. 30;
' See "Companies Seals Act, "Companies Act, 1886," 49 Vict.,
1864," 27 Vict., c. 19; "Companies c. 23; "Companies (Winding-up)
Act, 1867," 30 & 31 Vict., c. 131; Act, 1890," 53 & 64 Vict., c. 63;
"Joint Stock Companies Arrange-" "Companies Act, 1898," 61 & 62
ment Act, 1870," 33 & 34 Vict., c. Vict., c. 26; "Bodies Corporate
104 ; "Companies Act, 1877," 40 & (Joint Tenancy) Act," 62 & 63 Vict.,
41 Vict., c. 26; "Companies Act, c. 20; "Companies Act, 1900," 63
1879," 42 «Sc 43 Vict., c. 76; "Com- & 64 Vict., c. 48.
13
§ 14 HISTORICAL AND INTRODUCTORY [ChAP. I
Witliin the last year, another statute, the Companies Act of
1907,^ has made important changes in British company law,
some of which will be noted from time to time below; but this
act like its predecessors is a mere amendment or supplement
to the Act of 1862 and not a substitute for it. Some of its
provisions, as well as some of those of the Companies Act of
1900, display a tendency to multiply arbitrary statutory re-
strictions and thus to break in upon the freedom of internal
company management allowed by the Act of 1862. Other
provisions, however, are intended to remove, subject to cer-
tain conditions, hampering restrictions which had been im-
posed by judicial decision.
§ 14^§ 18. Development of Modern Corporation
Law in the United States.
§ 14. In general. — In America, corporation or company
law has developed along somewhat the same lines as in
England. In both countries, the same economic forces have
been at work, and very similar results have been reached. In-
deed, the development has been along converging rather than
parallel lines; for the resemblance between American corpora-
tion law and English company law is closer at the present time
than fifty years ago. The methods of incorporating in colonial
times have been indicated briefly above. Before the Declara-
tion of Independence, incorporation for business purposes had
not even made a beginning. After the Revolution, the develop-
ment has in each state pursued a course pecuhar in many re-
spects to the local jurisprudence, so that the history of this
branch of the law throughout the nation cannot be traced ex-
cept by the tedious and for present purposes profitless labor
of investigating the course of legislation in each state. And to-
day the law has attained very different stages of development
in different states.
§ 15. Growth of System of General Incorporation Laws. —
Everywhere, however, during the first half of the nineteenth
century, incorporation .by special act became increasingly fre-
quent; and everywhere the necessity was felt of relieving the
legislatures from the pressure of this business as well as of free-
' 7 Edw. VII, c. 50.
14
§ l-§ 30] GROWTH OF AMERICAN LAW § 15
ing them from the temptation to corruption which such business
was too apt to bring. As in England, general incorporation
laws were the means adopted for attaining this result. TChe
earUest general incorporation laws or enabling acts provided for
the formation of religious corporations/ the need for which was
experienced as soon as the Revolution had brought about dis-
establishment. The earliest general law for the formation of ^
business corporations was passed in New York in 1811, pro-
viding for the incorporation of manufacturing companies.^ As|
this law antedates the Companies Act of 1844 by more thanl
thirty years, general incorporation laws may fairly be claimed [
as an American invention. To be sure, the statute of Elizabeth
for the incorporation of hospitals preceded the New York statute
by more than two centuries ; but there is every reason to suppose
that the New York statute was an original invention and was
not even suggested by the long-forgotten statute of Elizabeth.
By the middle of the century, general enabling acts for the
formation of manufacturing and mining corporations had be-
com.e common throughout the United States. Gradually, the
purposes for which companies could be incorporated under
these general laws were extended, until at the present time,
in all except a few ultras-conservative states, corporations may
' See Laws of N. Y. of 1784 (7th poration laws, see Laws of Pa., Sess.
session), Chap. 18; Laws of Del. of of 1835-36, Chap. 194; Laws of
1787, Chap, cxliv 6 (Laws of Del., N. Car. 1836 (2 Rev. Stats, of 1837,
ed. of 1797, Vol. II, p. 878) ; Laws of p. 214) ; 2 Kent Comm. 272, note (6),
Pa. of 1791, Chap, mdxxvi (provid- referring to a law of Massachusetts,
ing for incorporation for literary or and to laws of Connecticut and
charitable as well as for religious Michigan of 1837, as well as to the
purposes) ; Laws of Md. of 1802, New York law above cited.
Chap. 111. Cf. Laws of Md. of 1798, A statute of North Carolina,
Chap. 24, providing for the incorpo- Laws of 1795, Chap, iii (Revised
ration of vestries of the Protestant Laws, ed. of 1821, Vol. I, p. 769),
Episcopal Church which had been sometimes referred to as a general
disestablished in 1776. Although incorporation law, provided that
the last mentioned statute has been whenever a number of subscribers
held not to be a "public general should have formed themselves into
law," Bardett v. Hipkins, 76 Md. 5, a company for the purpose of cutting
25-26, 34-37 (headnote inadequate) ; a canal they should have the power
23 Atl. 1089; 24 Atl. 532, yet to condemn private property and
it did certainly provide for the to sue and be sued in the company
formation of an indefinite number name, but does not expressly, nor it
of corporations. would seem by implication, make
' Laws of N. Y., Sess. 34, Chap, the companies corporations.
67. For other early general incor-
15
§ 16 HISTORICAL AND INTRODUCTORY [ChAP. I
be organized under general laws for the conduct of any lawful
business, with usually some few named exceptions. Even where
the objects for which incorporation can be had are not expressed
in these sweeping terms, they are so numerous and varied as
to include all the usual forms of business enterprise.
§ 16. Constitutional Prohibition of Incorporation by Special
Act. — Not merely have the legislatures voluntarily evolved
this system of incorporation under general laws, but also the
framers of state constitutions have undertaken to accelerate the
process. In almost every recent state constitution some pro-
hibition, more or less stringent, is directed against incorporation
by special act. Consequently, incorporation under general laws
has everywhere become the rule, and incorporation under special
act the exception. Although much of the law governing cor-
porations formed by special act is also applicable to those or-
ganized under general laws, yet the two kinds of associations
are in many respects very different from one another; and these
differences are or should be attended with important legal
consequences.
§ 17. Unincorporated Joint-stock Companies in America. —
Unincorporated joint-stock companies have played a much
less important part in the development of incorporated com-
panies in America than in England. Nevertheless, in some
states such unincorporated associations have been at times very
common,' and are probably everywhere in the United States
legally possible.^ These unincorporated bodies are, however,
in America a by-product. The general trend of American law
has not been influenced by such unincorporated joint-stock
companies as have existed in this country. The only influence
of unincorporated joint-stock companies upon American law
has been indirect through the connection between English
unincorporated companies and the modern English company
law.
§ 18. Modem General Incorporation Laws. — Obviously,
even cursory summaries of the general laws now in force in all
the various states of the Union would be both tedious and, for
■' For illustrations, see Von Street By. (Mo.), 103 S. W. 583 (as
Schmidt V. Huntington, 1 Cal. 55; to Adams Express Company).
Hoadley v. County Comm'rs, 105 ' See Spotswood v. Morris (Idaho),
Mass. 519 ; Weir v. Metropolitan 85 Pac. 1094.
16
§ l-§ 30] EFFECTS OF LIBERAL LAWS § 19
present purposes, useless.' The statutes in some states Consist
of a jumble of old acts thrown together almost indiscriminately
with more recent amendments. In other states, the legislatures
have intended to display the utmost liberality; but unfortu-
nately this disposition has often been evinced by removing
salutary restrictions and at the same time, in order to make a .
show of legislative regulation, by imposing vexatious and un-
reasoning restraints. The New Jersey Law has proved one
of the most popular of the general incorporation laws, and has
served as a model in many other states. It is not, however,
altogether free from the faults above referred to.
In general, it may be said that the liberal incorporation laws
that are in force in most states authorize incorporation for any
lawful purpose by the mere execution and registration of a docu-
ment setting forth the objects of the company and certain other
particulars as to its proposed business and constitution.
§ 19-§ 22. Effects of Modem Liberal Incorporation Laws.
§ 19. Right to Incorporate no longer a Franchise or Special
Privilege. — • When individuals may incorporate themselves by
these simple means, the notion that the right to be a corpora-
tion is a franchise is manifestly baseless. The right was formerly
a franchise, when it could be secured only by the special favor
of the crown or of the legislature. But a franchise is a special
privilege, and any right that can be obtained by anybody merely
by going through a few statutory forms cannot properly be
designated by that term. As well might it be said that the right
to make a conveyance of real estate is a franchise because the
deed must be signed and sealed by the grantor with certain
formalities and recorded in the registry of deeds. The require-
ments for the formation of a corporation are scarcely less simple.
More than twenty years ago, Mr. Morawetz with his accus-
tomed accuracy and insight said, "The right of forming a cor-
poration and of acting in a corporate capacity, under the general
incorporation laws, can be called a 'franchise' only in the sense
in which the right of forming a limited partnership or of execut-
' The various statutes will be poration and Organization of
found analyzed in Frost on Incor- Corporations.
VOL. I.— 2 17
§ 20 HISTORICAL AND INTRODUCTORY [ChAP. I
ing a conveyance of land by deed can be called a franchise." *
The progress of events and the development of jurisprudence
in recent years make this statement more profoundly true and
more imjKjrtant to be borne in mind than when it was uttered.
To be sure, many corporations do hold franchises. For instance,
the right to condemn private property or the right to operate
a railway along the public streets or highways is a franchise,
and these rights are frequently enjoyed by corporations. But
the mere right to be a corporation for some purely private pur-
pose is no longer of this character. We may call it a franchise if
we choose, and we sometimes speak of taxes on the business of cor-
porations as franchise-taxes; but in all such cases we are using
the term with a new meaning. Always should the fact be recog-
nized that nowadays when the right to organize a corporation is
almost as free as the right to execute a deed of real estate, cor-
porations are very different things from what they were when
that right was confined to a few favorites of king or parliament.
§ 20. Early Judicial Recognition of this Principle. — These
principles respecting the nature of the right to be a corporation
under modern incorporation acts were recognized and stated
in an early New York case where the court was deaUng with,
perhaps, the very first general incorporation law ever enacted
for the formation of business corporations. The court, speak-
ing by, Chief Justice Spencer, said: "The object and intention
of the legislature in authorizing the association of individuals
for manufacturing purposes, was, in effect, to facilitate the
formation of partnerships, without the risk ordinarily attending
them, and to encourage internal manufactures. There is noth-
ing of an exclusive nature in the statute; but the benefits from
associating and becoming incorporated, for the purposes held
out in the act, are offered to all who will conform to its requisi-
tions. There are no franchises or privileges which are not com-
mon to the whole community. In this respect, incorporations
under the statute differ from corporations to whom some ex-
clusive or peculiar privileges are granted." ^
' 2 Morawetz on Priv. Corps., " Slee v. Broom, 19 Johns. (N. Y.)
2d ed., § 923. Approved : State 456, 473-474 ; 10 Am. Dec. 273, re-
el rel. Bradford v. Western Irri- ferring to the N. Y. Act of 1811,
gating Co., 40 Kans. 96, 99 (head- cited above, § 15.
note inadequate) ; 19 Pac. 349 ; 10
Am. St. Rep. 166.'
IS
§ l-§ 30] EFFECTS OF LIBERAL LAWS § 22
§ 21. Liberal Construction of Modern Incorporation Laws.
— In construing modern general incorporation laws, these
principles should always be borne in mind. We should never
forget that the object of such laws is to further the prosperity
of the country by promoting commercial enterprise, and that
this object should not be thwarted by a narrow construction
diilerent in spirit from that in which the laws themselves are
conceived. Fraud should be effectively punished; but in order
to prevent frauds, the courts should not discourage enterprise.
It is easy to prevent fraud by stopping commercial intercourse ;
but the remedy, if not worse, is more disastrous than the disease.
An attempt to prevent the growth of fraudulent schemes and
unlawful "trusts" by a strict construction of the general incor-
poration laws may perhaps hinder, somewhat, monopolistic
schemes, but it will certainly absolutely prohibit many legiti-
mate business enterprises.
§ 22. Frauds perpetrated under cover of Liberal Incorpora-
tion Laws. — Moreover, the fact that frauds are committed
by abuse of the incorporation laws should not be allowed to
obscure the fact that such frauds are snjall in comparison with
the amount of good that is accomplished by liberal laws Uberally
construed. As was said by a learned English judge in a recent
case, "The statutes relating to limited liability have probably
done more than any legislation of the last fifty years to further
the commercial prosperity of the country. They have, to the
advantage as well of the investor as of the public, allowed and
encouraged the aggregation of small or comparatively small
sums into large capitals which have been employed in under-
takings of great public utility, largely increasing the wealth of
the country. But at the same time in this branch of the law the
apathy of the public in setting the law in motion has, I will not
say encouraged, but has at least failed to repress, grievous frauds
which have been committed and too often have gone unpunished.
Relatively, I think, compared with the advantages which have
accrued from the law of limited liability, the mischief of such
frauds has been small, but when regarded not relatively, but
absolutely, the frauds which have been committed under cover
of these acts have no doubt been great." '
' London & Globe Finance Corp. (1903), 1 Ch. 728, 731-732, per
Buckley, J.
19
§ 23 HISTORICAL AND INTRODUCTOBT [ChAP. I
§ 23-§ 29. CLASSIFICATION OF CORPORATIONS.
§ 23. Distinction between Corporations formed under Oen-
eral Laws and Corporations created by Special Act. — The
most obvious classification of ordinary business corporations
merely distinguishes corporations incorporated by special act
from corporations organized under general laws. The gulf
between these two classes of corporations is s6 great that little
difficulty can be experienced in distinguishing between them;
but occasionally some peculiar company is encountered which
is hard to classify. Moreover, ambiguous expressions may
sometimes be used in statutes, wills, contracts, and so forth,
which leave a doubt whether they were intended to apply to
both or to one only of these two great divisions of corporations.
For instance, in England, it is held that a company incorporated
under a general law is not within a power given to trustees to
invest in the securities of a "company incorporated by Act of
Parliament." ^ But in America, a corporation organized under
a general enabling act has been held to be a company "chartered
by law." ^ The provision in the National Bankruptcy Act ex-
empting from its provisions "banks incorporated under state
or territorial laws" clearly applies to a company incorporated
for banking purptoses under a state statute providing for the
formation of corporations for any lawful purpose but contain-
ing no particular provisions for the regulation of banks.' Where
an act of the legislature consolidating two corporations does not
create a new corporation, but merely enables one of the old com-
panies to absorb the other, the amalgamated company is not
"incorporated by Act of Parliament." *
§ 24. Under what Statute Corporation is deemed to be formed.
— Where corporations are classified with respect to the statutes
under which they are respectively incorporated, a company
' Re Smith (1896), 2 Ch. 590. 501, 508. Compare the American
But see EVoe v. Boynton (1891), cases on the question whether a
1 Ch. 501. special act amendatory of a com-
' Lindsay, etc. Co. v. Mullen, pany's charter is within a constitu-
176 U. S. 126, 136-137 ; 20 Sup. Ct. tional provision prohibiting incor-
325. poration by special act: WdUqce v.
' Oregon Trust & Savings Bank, Loomis, 97 U. S. 146, and 1 Clark &
156 Fed. 319. Marshall on Priv. Corps., pp. 108,
* Elve v. Boynton (1891), 1 Ch. 109.
20
§ l-§ 30] CLASSIFICATION OF CORPORATIONS § 25
whose incorporation paper states that the organization is under
one statute whereas the objects as set forth in the instrument
bring the company within another statute, is to be classed as
a company incorporated under the last mentioned statute/
§ 25. Classification with respect to Liability of Members. —
Another classification — more useful in England than in the
United States — is based on the extent of the members' lia-
bility for the company's debts. The British law permits, in the
first place, the incorporation of companies with unlimited lia-
bility; but, as may readily be understood, companies of this
sort are rarely formed. The same statute authorizes the forma-
tion of "companies limited by guarantee" — that is, compa^
nies in which the liability of their members is limited to such
amount as the members respectively undertake to contribute
to the assets of the company in the event of the same being
wound-up. Companies of this class are also comparatively
uncommon. In by far the most usual class of companies, even
in England, the liability of the members is limited to the amount,
if any, unpaid on the shares respectively held by them. Com-
panies of this class are called in England "companies limited
by shares." The first of these three classes of corporations —
that is, companies with unlimited liability — may exist in some
few of the United States ; but in this country generally they are
not met with, and their number is not likely to increase. The
second class, or companies limited by guarantee, are nearly if
not quite unknown in America. The great majority of business
corporations, in the United States as well as in England, belong
to the third class, or companies limited by shares. Corpora-
tions of this sort are in this country called joint-stock corpora-
tions. This term is, to be sure, somewhat indefinite, since
it would include joint-stock companies incorporated without
limited liability; but it is convenient and sufiiciently accurate
for all practical purposes. In America, some liability in addi-
tion to the liability to contribute to the capital the amount, if
any, unpaid on the shares, is frequently imposed by statute;
but these statutory liabilities are always limited in amount so
that they do not destroy the character of the corporations as
limited liability companies.
' International Boom Co. v. Rainy Lake River Boom Co., 97 Minn. 513 ;
107 N. W. 735. Cf. infra, § 63.
21
§ 26 HISTOHICAL AND INTRODUCTORY [ChAP. I
§ 26-§ 29. Classification with respect to Objects.
§ 26. Ancient Classification. — The old classification of
corporations with reference to their objects as civil and elee-
mosynary, ecclesiastical and lay/ may now be regarded as
obsolete, at least in America; but the purposes or objects of
corporations still constitute convenient criteria for classifying
corporations and for distinguishing between them.
§ 27. How Objects determined for Purposes of Classifica-
tion. — When a classification of corporations with respect to
their objects or purposes is employed, reference may be had
either to the objects which the company is actually pursuing
or to those which it is authorized to pursue. Thus, in order
to determine whether a corporation is within the classes of com-
panies which are subject to the United States Bankrupt Act of
1898, regard must be had to the business which the company
is in fact carrying on and not to that which it is authorized to
carry on by its charter or incorporation paper.^ On the other
hand, in order to determine whether a, company is a manufactur-
ing company within the Minnesota laws which exempt the
shareholders in such companies from liability to creditors, the
terms of the incorporation paper and not the business which
the company in fact conducts must control.' So the question •
whether a certain corporation is a charitable corporation within
the meaning of the rule which exempts charitable corporations
from liability for the torts of their servants must be determined
exclusively from the incorporation paper.*
§ 28. Municipal Corporations, Religious and Charitable Cor-
porations, Public-service Corporations, Financial Corporations, etc.
— In classifying corporations with respect to their objects,
■ 1 Black. Comm. 470. Frisk-Turner Co., 71 Minn. 413;
' Tontine Surety Co., 116 Fed. 74N. W. 160; 70 Am. St. Rep. 334.
401 ; New York, etc. Water Co., 98 * Gitzhoffen v. Sisters of Holy
Fed. 711 ; Chicago-Joplin Lead & Cross Hospital Ass'n (Utah), 88 Pac.
Zinc Co., 104 Fed. 67. 691, 694-695; Craig v. Benedictine
But see Quimby Freight Forward- Sisters Hospital Ass'n, 88 Minn. 535 ;
ing Co., 121 Fed. 139 (where the 93 N. W. 669.
court refused to regard an ultra Cf. People ex rel. Board of Chari-
vires business as the main business), ties v. N. Y. Society for Prevention,
' First Nat. Bank v. Converse, etc., 161 N. Y. 233, 239-240; 55
200 U. S. 425 ; 26 Sup. Ct. 306 ; N. E. 1063 (as to what corporations
Oould V. Fuller, 79 Minn. 414 ; 82 are subject to visitation as charitable
N. W. 673 ; Nicollet Nat. Bank v. corporations).
22
§ l-§ 30] CLASSIFICATION OF CORPOHATIONS § 29
municipal corporations, or corporations formed to act as
governmental agents of the state, may for our present purpose
be put on one side. So, too, religious and charitable cor-
porations belong in a class to themselves, and are rarely or
never formed on the joint-stock principle. The only class of
corporations with which we are now directly concerned con-
sists in companies incorporated for the acquisition of gain for
their members, or, to use a popular term, "business corpora-
tions." ' Even of these, those that are organized for carrying
on some public calling, such as railway and canal companies,
gas, electric light, and telegraph companies — in a word public
service corporations — are governed, in some respects, by rea-
son of their semi-public character, by principles of law in many
respects peculiar to themselves. From these pecuHar features
of the law of public-service corporations, the general law of
corporations is quite distinct. Furthermore, some corporations
that cannot fairly be classified as public-service companies are
organized for the transaction of a financial business,^ such as
banks and trust companies, and in a less degree insurance and
guaranty companies, so that some peculiar regulations to secure
their depositors, cestuis que trust, and policy-holders are and
should be imposed upon them ; and with these peculiar regula-
tions we shall have nothing to do. Our consideration shall be
confined to the principles of law applicable to all joint-stock
corporations, limited by shares, and organized for the acquisi-
tion of gain.
§ 29. " Public " and " Private " Corporations. — A classifica-
_ tion of corporations which is much used in America divides
them into public and private corporations. Public corporations
include municipal corporations, and others formed as govern-
' The term " business corpora- Sweatt v. Boston, etc. R. R. Co., 23
tions " includes railway companies, Fed. Cas. 530, 535.
Adams v. Boston, etc. R R. Co., 1 As to what is a corporation formed
Fed. Cas. 90 ; Winter v. Iowa, etc. for profit, see Staie v. Home Co-
iJ)/. Co., 2 Dill. 487 (headnote inade- operative Union, 63 Ohio St. 547;
quate) ; and also insurance com- 59 N. E. 220 ; People v. Rose, 188
panies, Hercules Mut. Life Ass. Soc, 111. 268 ; 59 N. E. 432 ; Am,erican
12 Fed. Cas. 12 ; but not educa- Matinee Ass'ti v. Secretary of State,
tional corporations even though 104 N. W. 141 ; 140 Mich. 579.
they charge for tuition, McLeod v. ^ For cases construing the phrase
lAncoln Med. College (Nebr.), 96 "moneyed corporations," see that
N. W. 265, 266. A railroad com- title in Words and Phrases Judicially
pany is a "commercial corporation." Defined, Vol. V, p. 4569.
23
§ 30 HISTOKICAL AND INTRODUCTORY [ChAP. I
mental agents of the state. Private companies, on the other
hand, are all corporations organized in whole or in part for pri-
vate objects or under the control of private individuals. In
this sense, all railroad and other public service companies are
private corporations. In England, the terms "public" and
"private" are not applied to corporations in this sense. For
example, any company incorporated under the Companies
Acts, its constitution being matter of record and open to
public inspection, may in one sense be deemed a public com-
pany.' But the term public, as distinguished from private,
company has acquired in popular English usage a quite differ-
ent signification. A private company, iuvthis popular sense, is
a company whose shares are not intended for public subscrip-
tion ; any other company is a public company.^ This meaning
is not attached to these terms anywhere, in the United States.
§ 30. Nomenclature — "Corporations" and "Companies." —
In America, we speak of any association of individuals, in-
cprporated or unincorporated, as a company. In England, the
latter term is generally applied to associations organized for
the transaction of some ordinary business. It is the usual namie
for what in America would be more commonly termed a private
corporation.
Of course, in America we recognize that our ordinary cor-
porations are companies;^ and indeed the word "company"
' Cf. RickettY. Sharpe, 45 Ch. D. the words "public company" in the
286; Be Lysaght (1898), 1 Ch. 115. Apportionment Act of 1870 were
' Palmer's Company Law, 3d ed., held to include an unincorporated
260-261 ; British Seamless Paper Box joint-stock company established in
Co., 17 Ch. D. 467, 479. 1843, before the passage of the first
Cf. Lamonby v. Carter (1903), 1 Companies Act, under a deed of
Ch. 352 (where the phrase "public settlement). See also Companies
companies" in a will of an English Act, 1907, § 37, where a legislative
testator was held to refer exclu- definition or interpretation of the
sively to British companies) ; Innes words " private company " will be
<fe Co. (1903), 2 Ch. 254, 266 (where found.
Cozens-Hardy, L. J., said: "On ' Ci. Van Home v. State, 5 Aik.
principle, it is not easy to appreciate 349, 352 (headnote inadequate) ;
the distinction between a private Gillig, Mott & Co. v. Independent
company and a public company") ; Gold, etc. Co., 1 Nev. 247.
Carr v. Griffith, 12 Ch. D. 655 (where
24
§ l-§ 30]
NOMENCLATURE
§30
has been thought to import a corporation * although a large
number of American cases, supported by legal reasoning as well
as by literary and popular usage, hold that the word is equally
applicable to some unincorporated associations.^ A municipal
corporation is not properly included within the term "incor-
porated company." ^
So, Englishmen recognize that their companies are corpora-
tions. But as a matter of popular nomenclature the term cor-
poration is in more general use here, while the term company
is in more general use in England. For instance, we speak
in America of corporation law while an Englishman calls the
same branch of jurisprudence company law. It has been held
' Broome v. Galena, etc. Packet used in this sense or as indicating
Co., 9 Minn. 239 ; Commonwealth v.
Reinoehl, 163 Pa. St. 287; 29 Atl.
896; 25 L. R. A. 247.
Cf. Staie V. Stone, 118 Mo. 388,
397-399 ; 24 S. W. 164 ; 25 L. R. A.
243 ; 40 Am. St. Rep. 388 ; Goddard
V. Chicago, etc. Ry. Co., 202 111. 362,
369; 66 N. E. 1066.
» Singer Mfg. Co. v. Wright, 33
Fed. 121, 127 (headnote inade-
quate) ; State v. Stone, 118 Mo. 388 ;
24 S. W. 164; 25 L. R. A. 243;
Bradley Fertilizer Co. v. South Pub-
lishing Co., 4 N. Y. Misc. 172, 176
(headnote inadequate) ; 23 N. Y.
Supp. 675; Lee Mvt. Fire Ins. Co.
V. State, 60 Miss. 395 (where the
words "company'' and "associa-
tion" were declared to be syn-
onymous) ; State v. Mead, 27 Vt.
722; Gillig, Mott & Co. v. Inde-
pendent Gold, etc. Co., 1 Nevada, 247,
249.
Cf. Mills V. State, 23 Tex. 295
(construing the word "company"
in a statute as applying only to
associations composed of a large
number of persons and acting
through officers and not to an ordi-
nary co-partnership) ; Palmer v.
Pinkham, 33 Me. 32, 36. ("The
proper signification of the word
'company,' when applied to persons
engaged in trade, denotes those
united for the same purpose or in a
joint concern. It is so commonly
a partnership that," etc.)
The word "company" has even
been held to apply to an individual.
Efland v. Southern By. Co., 59 S. E.
355, 357 ; Singer Mfg. Co. v. Wright,
97 Ga. 114, 119-122 (headnote in-
adequate); 25S. E. 249; 35L. R.A.
497 ; Singer Mfg. Co. v. Wright, 33
Fed. 121, 127 (semble) ; Chicago
Dock Co. V. GarrUy, 115 111. 155, 164
(headnote inadequate) ; 3 N. E. 448.
But this meaning is quite foreign to
the word itself and can only be
adopted in order to carry out the
intent as collected from the context.
Cf. Goddard v. Chicago, etc. Ry. Co.,
202 111. 362, 369; 66 N. E. 1066.
' Kansas City v. Vineyard, 128
Mo. 75 ; 30 S. W. 326.
Cf. Smith V. City of Janesville,
52 Wise. 680, 682 (headnote inade-
quate); 9 N. W. 789 (where the
phrase "corporations and com-
panies " was held not to include mu-
nicipal corporations on the ground
that "companies" could only de-
note private associations of persons
for the prosecution of some enter-
prise, while the generality of the
word "corporations" should be re-
strained by the principle of noscitur
a sociis) ; Charlottesville v. Southern
Ry. Co., 97 Va. 428, 431 (headnote
inadequate); 34 S. E. 98.
25
§ 30 HISTORICAL AND INTKODUCTORT [ChaP. I
in England that an "industrial and provident society," although
a corporation, is not a company.^ On the other hand, Buckley, J.,
in a recent case gave a definition of a company which is equally
applicable in the United States. "The word 'company,'" said
he, "has no strictly technical meaning. It involves, I think,
two ideas — namely, first that the association is of persons so
numerous as not to be aptly described as a firm ; and secondly,
that the consent of all the other members is not required to
the transfer of a member's interest. It may * * * include
corporation." ^
' Great Northern By. Co. v. Coal ' Tennant v. Stanley (1906), 1
Co-operative Soc. (1896), 1 Ch. 187, Ch. 131, 134.
194.
26
CHAPTER II
THE INCORPORATION PAPER
Sectioa
Name of instrument 31
Function of instrument 32-36
In general ; . . . . 32
Bual nature of instrument — a statutory condition and a private
contract 33
Instrument as a contract 34
As a contract with the State 35
As a contract by the subscribers and shareholders .... 36
Rules for construction of instrument 37-44
In general 37
Applicability of rules for construction of special acts of
incorporation 38-40
In general 38
Whether instrument should be construed most strongly in
favor of state 39
Oregon Ry. Co. v. Oregonian Ry. Co., 130 U. S. 1 . . 40
Construction neither strict nor liberal 41
Liberal construction to carry out ascertained objects 42
Entire instrument to be construed together 43
Parol evidence — contemporaneous internal regulations as aid in
construction 44
Division of instrument into paragraphs or clauses 45
Object clause 46-108
Function of object clause 46
Comparative advantages of broad and narrow statements of
objects 47
What objects are authorized by incorporation law to be expressed
in the object clause as the purpose of incorporation . . 48-63
Under statutes specifying objects for which alone companies
may be incorporated . . . . 48
Under statutes permitting incorporation for any lawful
purpose 49-63
In general 49
Whether more than one object may be specified ... 50
Insertion of subsidiary objects or powers 51
People V. Chicago Gas Trust Co., 130 111. 268 . . 52
Objects must be consistent with nature of a corporation 53
Sale of company's entire business as one of objects . . 54
American cases 55
Acting as agent or attorney 56
Acting as trustee 57
Acting as executor, guardian, etc 58
Owning shares injanpther corporation 59
27
THE INCORPORATION PAPER [ChAP. II
Object clause (continued). Section
Ownership of shares with ulterior illegal intent . 60
Amalgamation with other corporations 61
Unlawful objects, how illegality determined ... 62
Incorporation for a purpose provided for by a different
statute 63
What powers implied without express mention in object
clause 64-102
In general 64
Caution as to reliance on implications of law 65
Caution as to express mention of powers that might be
implied — maxim of expressio unius, etc. . .... 66
Necessity for draftsmen of incorporation paper to consider
what objects may be implied — scope of treatment ... 67
General rules as to implied powers 68
Power to borrow 69-74
In general 69
Evasion of prohibition of borrowing 70
Power to secure indebtedness by mortgage 71
Power to mortgage uncalled capital 72
Power to issue notes, bonds, etc., as evidence of in-
debtedness ... 73
Power to issue perpetual or irredeemable bonds or
debentures 74
Power to acquire and hold prdperty 75-76
In general . 75
Power to hold as joint-tenant or in common .... 76
Power of alienation 77-79
In general 77
Sale of entire property, business, etc 78
Sale of business in exchange for shares in another cor-
poration 79
Power to abandon some of company's objects 80
Power to become member of another corporation, to pur-
chase shares in another company 81-84
In general 81
When power may be implied 82
When not implied . . 83
Effect of clause specifying acquisition of shares in other
corporations as one of company's objects 84
Power to promote other corporations 85
Power to become member of partnership 86
Power to contribute to public objects, recognize moral
obligations, etc 87-90
In general . 87
Gratuities to directors .... 88
Payment of gratuities out of capital 89
Whether desirable to supplement implied powers of this
kind by express provisions 90
Power to guarantee 91
Power to lend 92
Power to advertise 93
Power to promote or oppose bills in the legislature .... 94
28
*-'
§ 31-§ 162] sTNOPSis
Object clause (continued). Section
Power to inform shareholders of facts likely to influence
their votes 95
Power to take measures to bring out full vote at share-
holders' meeting 96
Power to pay counsel fees in internal contest 97
Power to make best of a situation 98-102
In general 98
Power to utilize surplus property 99
Power to compromise 100
Limits of powers of this kind 101
Whether desirable to supplement these powers .... 102
Provisions prohibiting exercise of powers that' might otherwise
be implied 103
General statements of objects 104-108
What particularity requisite in stating objects 104
Construction of general words accompanied by particu-
lars 105-108
Particular objects followed by general words which
standing alone would be too indefinite ... . 105
General words followed by particulars 106
General words which, although accompanied by par-
ticulars, are not too indefinite to stand alone . . . 107
Limits of maxim noscyitur a sociis 108
Capital clause 109-113
Statement of amount of capital and number of shares .... 109
Division of shares into preferred and common, etc 110
Statement as to liability of shareholders Ill
Statement of time and manner of payment for shares .... 112
Combination of joint-stock plan with non-stock plan 113
Chief office, or place of business, clause . . . ' 114
Directors' clause 115
Duration of corporate existence clause 116
Name clause 117
Indebtedness clause 118
Effect of failure to state all particulars required by law 119
Insertion of provisions in addition to those required by law . . 120-122
Right to insert such additional provisions 120
Unauthorized as distinguished from unnecessary provisions —
effect of inserting : 121
What provisions are unauthorized 122
Incorporation of other documents into the instrument by reference 123
Execution of instrument 124-131
In general — signature, number of subscribers, etc 124
Sealing of instrument 125
Acknowledgment of instrument 126
Place of execution ' . . 127
Execution of duplicate instruments 128
Execution and delivery in escrow 129
Who may act as subscriber of instrument 130
Signature by agent or attorney 131
Function of subscribers as shareholders or otherwise 132
Registration of instrument 133-137
29
§ 31 THE INCURPORATION PAPER [ChAP. II
Registration of instrument (continued). Section
Necessity for registration 133
What must be registered — copy or original 134
Wliat amounts to registration 135
Powers and duties of registrar 136
Registration in more than one office 137
Publication in newspaper 138
Submission of instrument to public officer for approval . . . 139-142
Examination of instrument by registrar when paper filed for
record . . . . . 139
Submission to some other officer before filing for record ... 140
Submission by way of petition to officer for issue of "charter" 141
Issue of certificate of approval by registrar or other officer after
registration of instrument . . 142
Alteration of instrument after execution and before registration . . 143
Alteration after registration . 144-160
Alteration of instrument generally impossible without enabling
statute . 144
Reformation for mistake . 145
Historical outline of statutes authorizing alteration 146
What alterations are authorized by enabling statutes . . . 147-149
In general 147
Under British Act of 1890 and similar statutes . ... 148
Amended provision must be such as might have been in-
serted in original instrument at the time of amendment 149
Necessity for accompanying amendment by change of name
where old name would be misleading 150
Fees payable on amendment ... 151
Effect of alteration upon instrument originally void or upon pre-
vious invalid amendment . . 152
Alteration against opposition of minority shareholders .... 153
Statute allowing amendment unless prohibited by original in-
strument 154
Formalities required in making alteration . 155
Whether alteration should be made by directors or shareholders 156
Irregular alteration 157
Amendment not retroactive . 158
Creation of new corporation by means of amendment 159
Legislative alteration 160
Constructive notice of contents of instrument 161-162
In general 161
Limits of doctrine of constructive notice 162
§ 31. Name of Instrument. — All, or almost all, general
laws for the formation of incorporated joint-stock companies
resemble each other in this, that the formal organization of a
corporation thereunder is commenced by the promoters by sign-
ing and depositing for record a document which states the name
and purposes of the company, the amount of its capital, and in
some other particular outlines the fundamental constitution of
30
§ 31-§ 162] NAME OF INSTRUMENT § 31
the corporation. This document is variously termed in different
localities. Under the first English general incorporation law
it was called a " deed of settlement " ; but this term is no longer
in use on either side of the Atlantic. In some of the American
states it is called "articles of association"; but that term is
ambiguous and objectionable, because in England it bears a
totally different signification, designating, as already stated, reg-
ulations for the company's management which partake of the
nature of mere by-laws.^ The terni "articles of incorporation"
is sometimes used, but this likewise is objectionable, because
the word "articles" may lead to confusion with the English
"articles of association," — a phrase popularly abbreviated in
England to " articles," — which, as just mentioned, have a very
different nature and office. In some of the United States the
document is called a "certificate of incorporation"; but that
name too is unfortunate, for it is applied also — and with much
appropriateness — to a certificate issued by some public officer
stating or certifying that the requirements of the law have been
complied with in the formation of a certain company, and that
the company is therefore a corporation. The term "charter"
is sometimes used in America ; ^ but this use is popular rather
than legal,^ and is not to be commended. A-t3harter, in Eng-
lish law, properly denotes an instrument which confers special
privileges ; and while in America it is perverted from its original
meaning so as to include a legislative grant of corporate privileges
by a special act of incorporation^ as well as a royal charter, —
its primary signification, — yet it cannot, except by a figure of
speech, be applied to a paper drawn up in pursuance of a general
law that offers the same privileges to all persons upon the same
terms. The name which is now used in England is "memo-
randum of association." It does not seem to have gained cur-
rency in America ; but it is unambiguous and appropriate. The
only objection that might be urged against the propriety of this
designation is that the word "memorandum" may seem to
' Supra, § 11, and infra § 683. ter" is the name used by the legis-
' See New Orleans Nat. Banking lature in the incorporation law. See
Ass'n V. Wiltz, 10 Fed. 330 ; Cuyler Kaiser v. Lawrence Sav. Bank, 56
V. City Power Co., 74 Minn. 22; 76 Iowa, 104, 105; 8 N. W. 772; 41
N.' W. 948 ; Red Men's Mutual Be- Am. Rep. 85.
lief Ass'n, 10 Phila. 546. * Cf. supra, § 4, as to English
' In some states, however, "char- usage.
31
§ 32 THE INCORPORATION PAPER [ChAP. II
imply a less formal document than one which constitutes the
-very foundation and charter of a corporation's existence, and
which is or should be drawn up with the greatest possible care
and formality. A colorless and unobjectionable name is "in-
corporation paper." As this term does not seem to have been
used in any state or country as a special designation of the in-
strument under the local laws, it commends itself by virtue of
its very generality, and is accordingly used throughout this
work.
I
§ 32-§ 36. Function of Instrument.
§ 32. In general. — The importance of this paper can hardly
be exaggerated. It takes the place of, and in America, as we
have seen, is sometimes called, a charter of incorporation. It
delineates the limits of the company's powers, and the exercise
of any power for which authority, express or implied, cannot be
found in this instrument is ultra vires of the corporation. It
marks out not merely the powers and objects of the company,
but also in some measure the means by which those objects may
be pursued. Thus, it prescribes the amount of the capital stock
and the number of shares into which it is divided. It is the con-
stitution of the corporation, and, subject only to the laws of the
land, the supreme law of its government and being. "The
memorandum of association is as it were the area beyond which
the action of the company cannot go." '
§ 33. Dual Nature — A statutoiy Condition and a private Con-
tract. — An incorporation paper, or memorandum of associa-
tion, has a double function. In the first place, it operates
as a compliance with the statutory conditions necessary to secure
the benefits of corporate existence; it is a talisman, an open-
sesame. required by sheer force of positive-lajy. In the second
place, it is a private contract between the members of the Com-
pany, and performs the same function as the articles of partner-
ship of an ordinary firm, or, to use a still closer analogy, of an
unincorporated joint-stock company. In this aspect, the in-
strument derives its efficacy, not from the incorporation law
or companies act, but from the common law of contracts, of
copartnerships and joint enterprises; and accordingly its pro-
visions are effective to the same extent as similar provisions in
* Ashbury Ry. Carriage Co. v. Riche, 7 H. L. 653, 671, per Lord Cairns.
32
§ 31- § 162] FUNCTION OF INSTRUMENT § 36
the articles of agreement of a copartnership or unincorporated
joint-stock company, except in so far as the statute under which
the company is incorporated may otherwise provide. This
second aspect and function of a memorandum of association
or incorporation paper is sometimes lost from sight; and in
consequence of such a one-sided view there arises a narrowness
of construction which deprives the people of that elasticity in
corporate organization which modern incorporation laws, fairly
construed, ought to secure. Happily this one-sided, partial
view of the subject, which is a survival of the old conception of
all corporations as chartered monsters, is much less common
now than formerly. The English courts have never confused
the modern incorporated partnerships formed under general
incorporation laws with the old chartered corporations; and
but few of the American courts still fail to recognize the true
breadth and significance of this distinction. The dual nature
of a memorandum of association or incorporation paper is
fundamental.
§ 34. Instrument as a Contract. — An incorporation paper
is, therefore, properly referred to as a contract. Indeed, it is
a bundle of contracts.
§ 35. As a Contract with the State. — In the first place, it
is said to be a contract by the State with the corporators. This
notion originated with royal charters of incorporation, which
might not inaptly be deemed grants or contracts by the sovereign,^
and was then applied to special acts of incorporation, and has
finally been extended to incorporation papers under general
laws.^ With almost equal propriety, ordinary articles of partner-
ship might be said to be a contract between the state and the
partners. However, the aspect of an incorporation paper as a
contract between the corporators and the state pertains to the
domain of constitutional law, and therefore need not be further
considered in this work.
§ 36. As Contract between Subscribers or Shareholders. —
In the second place, every incorporation paper is indubitably
a contract in the strictest sense between the several signatories,
' Dartmouth College v. Woodward, v. State, 15 Wall. 478, 492 (semble) ;
4 Wheat. 618. Garey v. St. Joe Mining Co. (Utah),
" Chicago, etc. R. B. Co. v. Iowa, 91 Pac. 369.
94 U. S. 155, 161 (semble) ; Miller
VOL. I. — 3 33
§ 37 THE INCORPORATION PAPER [ChAP. II
and between the persons who may subsequently become share-
holders.' A section of the English Companies Act, which has
been referred to above, provides that the several members of
the company shall be bound by the memorandum of associa-
tion to the same extent as if they had signed and sealed it, and
as if it had contained a covenant on their part to abide by its
terms. But this express provision is declaratory merely, except
in so far as by virtue of its provisions the several shareholders
are bound as by a specialty whereas otherwise they would be
bound by simple contract merely. But even according to this
emphatic and express provision of the British statute, the share-
holders are bound, probably, only in their capacity as share-
holders. At all events, the document is only a contract between
the shareholders inter sese, and gives no right of action to a
stranger against the company.^
§ 37-§ 44. RULES FOR CONSTRUCTION OF INSTRUMENT.
§ 37. In general. — The general principles of construction
applicable to these incorporation papers are not very fully
worked out in the decisions, probably because those principles
do not greatly differ from the rules for the interpretation of other
written instruments or contracts. Thus, as in the case of other
written instruments, the construction of an incorporation paper
is for the court rather than the jury.^
§ 38-§ 40. Applicability of Rides for Constrvction of Special
Acts of Incorporation.
§ 38. In general. — As an incorporation paper stands in the
place of a special act of incorporation, either one being a com-
pany's fundamental constitution and marking out the objects
and purposes of its existence, the rules of construction which
' Loewenthal v. Rubber Redaivv- Rubber Works, 31 Vict. L. R. 754.
ing Co. 52 N. J. Eq. 440; 28 Atl. These cases related to "articles of
454 ; Garey v. St. Joe Mining Co. association " ; but precisely the
(Utah), 91 Pac, 369, where it was same principles in this respect would
said that the instrument is a con- apply to a memorandum of associa-
tract between the corporation and tion or incorporation paper. For the
the stockholders. similar rule with regard to by-laws
" Cf. Eley V. Positive, etc. Ass. Co., see infra, § 737.
1 Ex. D. 88 ; Browne v. La Trinidad, ' Grodtz v. Armstrong Real Estate
37 Ch. D. 1, 13; Glass v. Pioneer Co., 89 N. W. 21; 115 Iowa 602.
34
§ 31-§ 162] RULES FOR CONSTRUCTION § 39
have become established with reference to special acts of incor-
poration, will naturally be looked to as authority for the con-
struction of incorporation papers under general laws.' This is
not merely natural but also justifiable and indeed necessary.
Yet the differences between the two classes of instruments
should not be disregarded.^ A special act of incorporation is a
statute; an incorporation paper under general law is a private
contract. Th£!-Qnp is tjip language of the state, speaking by its
l^?}§iVLre; the other is the language of the individual cor-
porators or promoters. Consequently, In the construction of
the former the intention of the legislature so far as ascertainable
from the language employed should govern; in the construc-
tion of the latter, theintention of the corpQjators is in Jike
manner- controhing.^
§ 39. Whether Instrument should be construed most strongly
in Favor of State. — Now, the well-settled and cardinal rule for
the construction of special acts of incorporation is that they
are to be taken most strongly in favor of the public* Nothing
passes from the sovereign by implication. And the reason for
this rule is that the state in conferring a special act of incor-
poration is granting special privileges, and that the language of
the legislature must always be taken most strongly in favor of
their cestuis que trust, the people. On principle, it is difficult to
see how this rule can be applicable to an incorporation paper.
For the promoters by whom it is framed are not public servants,
are under no duty to safeguard the interests of the public ; and
yet as we have seen it is their intention which the courts in con-
' See 1 Morawetz on Priv. Corps., quoted below p. 37 note 4) ; Kings-
2d Ed., § 318, where the learned bury Collieries and Moore's Contract
author asserts broadly that "the (1907), 2 Ch. 259, 266-267.
same rules of construction apply to ' Cf. Biker v. Leo, 133 N. Y. 519 ;
articles of incorporation adopted 30 N. K 598 ; Receivership of {Mer-
pursuant to general laws, as to char- chants Nat. Bank v.) Minnesota
ters of incorporation granted by Thresher Mfg. Co., 95 N. W. 767;
special acts of the legislature." Cf. 90 Minn. 144 ; Senour Mfg. Co. v.
Rockhold V. Canton Masonic Benev. Church Paint, etc. Co., 81 Minn. 294,
Sbc, 129 111. 440, 455-456 (where 298; 84 N. W. 109 ("The intention
the language of the court is more of the corporation must control ").
cautious and less sweeping than the * Charles River Bridge v. Warren
headnote would indicate); 21 N. E. Bridge, 11 Pet. 420; Proprietors of
794 ; 2 L. R. A. 420. ' Stourbridge Canal v. Wheeley, 2 B>
' Cf. Atty.-Oen. v. Mersey Ry. Co. & Ad. 792 ; Edgewood Borough v.
(1907), 1 Ch. 81, 101 (a passage Scott, 29 Pa. Super. Ct. 156.
35
§ 40 THE INCORPORATION PAPER [ChAP. II
struing the instrument must endeavor to ascertain. How can
the construction of such a document, dependent upon the
intention of mere private individuals, be either favorable or
unfavorable to the public? It is a private matter with which
the public have no concern. As well might one say that articles
of partnership should be taken most strongly against the part-
ners and in favor of the state.
§ 40. Oregon Railway Company v. Oregonian Railway
Company. — A case of high authority which may be thought to
miHtate against the views advocated in the last paragraph is
Oregon Railway Company v. Oregonian Railway Company}
There Mr. Justice Miller in delivering the judgment of the
court, after stating the rule that special acts of incorporation
shall be construed most strongly in favor of the state and against
the corporation, added, "How much more, then, should this
rule be applied, and with how much more reason should a court,
called upon to determine the powers granted by these articles o|
association, construe them rigidly, with the stronger leaning in
doubtful cases in favor of the public and against the private
corporation." And the reporter in the headnote states as one of
the leading propositions for which the case stands that "this
rule of construction applies with still greater force to articles of
association organizing a corporation under general laws."
Nevertheless, a careful examination of the case will reveal that
the decision really stands for nothing of the sort. The case was
this: a corporation had been formed in England under the
Companies Act of 1862 by the name of the Oregonian Railway
Company, having power according to its memorandum of asso-
ciation to construct, own, operate, and to lease, sell, or purchase
lines of railway in the State of Oregon. Another company,
known as the Oregon Railway Company, was formed under the
general laws of Oregon, which provided for the organization of
corporations for any "lawful enterprise, business, pursuit or
occupation," that might be specified in the "articles of incor-
poration." The articles of incorporation of this latter company
purported to clothe it with power to construct, purchase, or
lease railways in the State of Oregon. Accordingly, the English .
company, having built a line of railroad in Oregon leased the
same for a term of years to the Oregon company; and the
> Oregon By. Co. v. Oregonian By. Co., 130 U. S. 1 ; 9 S. Ct. 409.
36
§ 31-§ 162] RULES FOR CONSTRUCTION § 40
question was whether this lease was lawful and valid. As the
incorporation papers of both the English company and the
Oregon company purported expressly to confer the power to
make or take leases of railways, no question arose or could have
arisen in the case as to the proper rules for the construction of
incorporation papers; and the only question was whether the
clauses in the incorporation papers which attempted to confer
these powers upon the corporations were vaUd and operative
under the laws of Oregon. As the court itself said: "The
memorandum made under the Companies' Act of 1862 by the
plaintiff and the articles of association made under the laws of
Oregon by the [defendant both contain declarations of the
powers of these companies and of each of them to buy or sell or
lease railroads. The only question, therefore, to be considered
is whether this declaration of power is authorized by the laws
of Oregon." ' Hence, anything that may have fallen from the
court to the effect that an incorporation paper should be con-
strued most strongly against the company and in favor of the
public was altogether and confessedly obiter.^ The proposition
for which the case really stands is' that a general incorporation i^
law, like other statutes, is to be taken most strongly in favor of
the state.' For reasons already mentioned, it is submitted that
this rule, which is quite proper in the interpretation of statutes,
is wholly inapplicable in the construction of an incorporation
paper.*
' 130 U. S. 24-25. Ry. Co. (1907), 1 Ch. 81, 106, where
' The dictum was, however, re- Vaughan Williams, J., said, "You
ferred to with approval in Central ought to give a wider construction
Transportation Co. v. Pullman's, etc. to the words of a memorandum of
Co., 139 U. S. 24, 49; '11 S. -Ct. association creating and defining the
478. powers of a purely commercial com-
See also Hamilton Nat. Bank v. pany having no compulsory powers
American Loan, etc. Co., 92 N. W. and no monopoly than you would
189, 192 ; 66 Nebr. 77 ; City of give to the words of a statute creat-
Ooodland v. Bank of Darlington, 74 ing a company, like a railway com-
Mo. App. 365, 370. pany, having compulsory powers of
' In support of this proposition, land purchase and a practical monop-
which is clearly sound, see also. City oly." This language was quoted
of Goodland v. Bank of Darlington, with approval in Kingsbury Col~
74 Mo. App. 365. leries arid Moore's Contract (1907),
* Cf. Attorney-General v. Mersey 2 Ch. 269, 266-7.
37
§ 41 THE INCORPORATION PAPER [ChAP. II
§41. Construction neither Strict nor Liberal. — At any rate,
the general principle is settled, on the one hand, that no
extension of the terms of the instrument is permissible by con-
struction, and on the other hand that its meaning is not to be
restricted by a narrow interpretation. Said Vice-Chancellor
Bacon in an important case upon this subject: "I wholly re-
pudiate the notion that I am at liberty to adopt what has some-
times been called a ' liberal' construction. I have no more right
to do that on the one hand than I am at liberty on the other to
adopt a more rigorous or strict construction than the express
stipulations of the instruments require. What the law requires
and what I am called upon to do is to put a just construction,
and no other, upon these instruments." '-
§ 42. Liberal Construction to carr^ out ascertained Objects.
— Although when a court is endeavoring to ascertain from the
incorporation paper the objects for which a corporation is
formed, the construction, as we have just seen, should be neither
strict nor liberal, but just ; yet when the objects of the company
Jiave been determined, the tendency of the courts is, and should ^
be, to allow the greatest possible latitude to the company in the \\
choice of the means by which those objects are to be attained. '
The general rule being that all means that are reasonably con-
ducive to the objects of the incorporation and not prohibited
are permitted, the courts will not incline to extend any restric-
tions that the incorporation paper may contain in respect to the
means that may be employed in prosecuting the company's ends.
To that extent, the construction of an incorporation paper will
be "liberal to carry out the purposes of the company's forina-
tion," ^ but this " liberal " construction cannot be resorted to
where the object of the interpretation is to discover what these
purposes are.
§ 43. Entire Instrument to be" cons'trued together. - — The
entire instrument must be construed together. Hence, the cor-
porate name may be considered in the construction of the clause
' London Financial Ass'n v. Swinfen Eady, J., in Stephens v.
Kdk, 26 Ch. D. 107, 134. Mysore Reefs (Kangundy) Mining
" " It is right to give a liberal con- Co. (1902), 1 Ch. 745, 749. Cf.
struction to these subsidiary para- Louisville, etc. Ry. Co. y. Flanagan,
graphs to enable the main object of 113 Ind. 488, 495, 14 N. E. 370; 3
the company to be carried out," per Am. St. Rep. 674.
38
§ 31-§ 162]
PAROL EVIDENCE
§44
prescribing the company's objects.' A fortiori, "the general
object of the corporation is to be gathered not from any one of
the specifications but from the whole of the paragraph " which
states the objects or purposes of the company.^
§ 44. Parol Evidence — Contemporaneous Internal Regula-
tions as Aid in Construction. — To aid in the construction of an
incorporation paper, parol evidence it seems is admissible to
the same extent and with the same restrictions as in the case of
other documents formally drawn up and recorded.* Thus,
parol evidence is not admissible to show that the objects of the
company were in fact incorrectly or inadequately set out in the
incorporation paper.* To be sure, English judges have gone so
far as to declare that in construing a memorandum of associa-
tion contemporaneous articles of association "may be properly
considered for the purpose of explaining the terms and expres-
' See infra § 62, § 117 and § 462.
But cf. International Boom Co. v.
Rainy Lake River Boom Co., 97
Minn. 513 ; 107 N. W. 735.
' EUerman v. Chicago Junction
Rys., etc. Co., 49 N. J. Eq. 217, 239;
23 Atl. 287.
' "If any doubt arises as to the
true intent and meaning of the words
employed, it is essentially requisite
that the subject to which the words
relate should be distinctly under-
stood ; and to this end it may at all
times be convenient, and in some
cases necessary, to have regard to
the circumstances attending and
relating to the subject, to the inter-
ests comprised in it, to the parties
to it, and most especially to its
avowed, expressed and of necessity
implied, objects. Upon these prin-
ciples and rules I am called upon to
construe this memorandum." Per
Bacon, V. C, in London Financial
Ass'n V. Kelk, 26 Ch. D. 107, 134.
Cf. Receivership of {Merchants'
Nat. Bank v.) Minnesota Thresher
Mfg. Co., 95 N. W. 767; 90 Minn.
144 ; Senour Mfg. Co. v. Church
Paint, etc. Co., 81 Minn. 294; 84
N. W. 109; National Mechanical
Directory Co., 121 Fed. 742; 58
C. C. A. 24 ; Rehhein v. Rahr, 109
Wise. 136, 145-146; 85 N. W. 315.
* Craig v. Benedictine Sisters Hos-
pital Ass'n, 88 Minn. 535 ; 93 N. W.
669; Gitghoffen v. Sisters of Holy
Cross Hospital Ass'n (Utah), 88 Pac.
691, 694-695; City of Kalamazoo
V. Kalamazoo, etc. Power Co., 124
Mich. 74, 81-82 (attempt to limit
by parol evidence general objects
expressed in incorporation paper).
Doubtless this rule would not apply
in a proceeding by the state to oust
the company from its franchises on
the ground that the real objects
were unlawful. See infra, § 300.
Cf. Attorney-General ex rd. Miner
V. Lorman, 59 Mich. 157 ; 26 N. W.
311; 60 Am. Rep. 287; State v.
New Orleans Water Supply Co., 36
So. 117, 122; 111 La. 1049 ("The
question whether a corporation has
been organized for an illegal purpose
must be determined by the provisions
of its charter. and jiot by the declara-
tions of its officers or agents ") ;
Detroit Driving Club v. Fitzgerald,
109 Mich. 670, 675 ; 67 N. W. 899
("The purposes of the corporation
or association are to be determined
by the statement in its articles of
association. ").
39
§ 45 THE INCORPORATION PAPKR [ChAP. II
sions of the memorandum whenever it is just and reasonable so
to refer." ' But, as it is well settled that the articles of an Eng-
lish corporation cannot in any way add to or control the memo-
randum, any resort to the articles to aid in its construction is
dangerous in the extreme, and has been disapproved by one of
the ablest of modern English judges.^ A recent case intimates
that reference to the contemporaneous articles is permissible
only for the purpose of construing those parts of the memoran-
dum of association which relate to matters not required by the
statute to be stated in that instrument.^ Tlje question is per-
haps of but little practical importance in the United States ; for
the by-laws of an American company which perform in some
ways the same functions as English articles of association are
not, like the latter, matter of public record; and therefore,
whatever may be the case with respect to English articles, it will
hardly be contended that by-laws, even if drawn up contem-
poraneously with the incorjKjration of the company, can be used
in any way as a key to the meaning of the incorporation paper.*
§ 45. Division of Instrument into Paragraphs or Clauses. —
An incorporation paper is usually divided into paragraphs or
clauses, each of which contains some statutory requirement.
Thus, we may distinguish the object clause, the capital clause,
the chief-offiee clause, and so forth.
' London Financial Ass'n v. Kelk, introduced for the benefit of the
26 Ch. D. 107, 135, 138; Fisher v. creditors, and the outside pubUc
Black & White Publishing Co. {l^Vj, as well as the shareholders. The
1 Ch. 174, 180-182 (per Vaughan articles of association are the inter-
Williams, J.). nal regulations of the company.
^ "I shall only say a few words How can it be said that in all cases
as to how far, in my opinion, the the fundamental conditions of the
articles of association may be looked charter of incorporation, and the in-
at and read together with the mem- ternal regulations of the company
orandum of association. . . . There are to be construed together." Per
is an essential difference between Bowen, L. J., in Guinness v. Land
the memorandum and the articles. Corporation, 22 Ch. D. 349, 381.
The memorandum contains the fun- ' Southern Brazilian, etc. By, Co.
damental conditions upon which (1-905), 2 Ch. 78, 84.
alone the company is allowed to be ' See Xantha Beneficial, etc. Ass'n,
incorporated. They are conditions 8 Pa. Dist. Rep. 142,
40
§ 31-§ 162] THE OBJECT CLAUSE § 46
§46-§108. THE OBJECT CLAUSE.
§ 46. Function o£ Object Clause. — No part of an incorpo-
ration paper is more important or deserves greater attention
than the object clause, in which the purposes or objects of the
company are set forth. In England, it is held that common law
corporations — that is, corporations created by royal charter —
have power to do, anything that an ordinary individual may do
except in so far as they may be restrained or restricted by direct
prohibition;^ but on the other hand, it is held that corpora-
tions incorporated by special act of the legislature possess such
powers only as are authorized expressly or impliedly by the
special act in question,^ and that corporations incorporated
under general laws possess only such powers as are conferred
by the general law or are necessary to the attainment of the
objects specified in the incorporation paper.* There has been
some difference of opinion in England whether this doctrine as
to companies incorporated under general laws is due to the fact
that a company of that class is a corporation only for the pur-
poses stated in its incorporation paper or to the fact that the
exercise of any power which is not incidental to the objects as
expressed in the incorporation paper is either expressly or im-
pliedly prohibited by the legislature ; * but this question, which
is known as the question of general or special capacijjy, is largely
if not altogether a matter of words.^ At any rate, the doctrine
as to common law or royal-charter corporations (which with
the exception of one or two survivals, such as Dartmouth Col-
lege, are non-existent in America), is a matter of only antiqua-
rian and academic ifaterest in the United States; and as to
' Attorney-Genercd v. Manchester the railway company has no author-
Corporation (1906), 1 Ch. 643 (head- ity given to it by its incorporation
note inadequate). See also infra, to enter into contracts not connected
§ 1022-§ 1026. with its corporate duties, or that it
' Werdock v. River Dee Co., 10 is impliedly .prohibited from so do-
A. C. 354. ing because by necessary inference
' Ashbury Ry., etc. Co. v. Riche, the legislature must be considered
L. R. 7 H. L. 653. to have intended that no such con-
* 1 Palmer's Company Precedents, tracts should be entered into." Per
9th ed., 370-371 ; Pollock on Con- Lord Cranworth in Shrewsbury, etc.
tracts, 6th ed., 674-683. Ry. Co. v. NoHh-Western Ry. Co.,
= "Practically, it makes very 6 H. L. Cas. 113, 137.
little difference whether we say that
41
§ 47 THE INCORPORATION PAPER [ChAP. II
corporations created by special act of the legislature or formed
under general laws the American cases are in entire accord
with the English authorities and hold that the corporations
possess such powers only as are conferred upon them, expressly
or impliedly, by the statute or the incorporation paper.'
§ 47. Comparative Advantages of Broad and Narrow Statements
of Objects. — In the preparation of the object clause of an
incorporation paper the fact should be borne in mind that any
objects hot mentioned therein will be ultra vires of the corpora-
tion and cannot be pursued against the opposition of a single
shareholder and, in theory at least, not even by unanimous
consent. Hence, if the object clause is too narrow the company
may find its operations seriously hampered. On the other hand,
if thd objects are stated too broadly, the power of the majority
is almost unHmited and may serve to deter conservative in-
vestors from putting their capital in the concern. Yet, at least
from the point of view of the promoters, who usually expect to
constitute the majority of the corporation, the balance of incon-
venience lies decidedly in having the objects too closely circum-
scribed.^ Accordingly, in recent years the approved practice
has been to use a very broad and elaborate and often rather
verbose statement of objects.' On the other hand, as will be
more fully explained below, a very general statement of objects
may be too indefinite to satisfy the law.*
§ 48-§ 63. WHAT OBJECTS ARE AUTHORIZED BY INCORPORA-
TION LAW TO BE EXPRESSED IN OBJECT CLAUSE AS
PURPOSE OF INCORPORATION.
§ 48. Under Statutes Specifying Objects for which alone Com-
panies may be incorporated. — The objects of the company as
' Downing v. Mount Washington Dry Dock Co., 28 La. Ann. 173;
Road Co., 40 N. H. 230 ; State v. Best Brewing Co. v. Klassen, 185 111.
Consolidation Coed Co., 46 Md. 1, 9 37; 57 N. E. 20; 76 Am. St. Rep.
(where the rule was expressly laid 26; 50 L. R. A. 765.
down by a statute which was pro- ' "The balance of disadvantage
nounced declaratory merely) ; Rock- decidedly attaches to too narrowly
hold V. Canton Masonic Benev. Soc, defined objects." Dill on New Jersey
129 111. 440; 21 N. E. 794; 2 L. R. Corporations (3d ed.), § 8, p. 19.
A. i20; Simmons V.Troy Ironworks, ' Cf. Consett Iron Co. (1901), 1
92 Ala. 427 ; 9 So. 160 (corporation Ch. 236 (headnote inadequate),
formed imder general law) ; New See also infra, § 65.
Orleans, etc. Steamship Co. v.- Ocean * Infra, § 104-§ 106.
42
§ 31-§ 162]
THE OBJECT CLAUSE
§48
expressed in the incorporation paper must, of course, be autho-
rized by the general law or enabling act under which the
company is organizing. The earlier American statutes autho-
rizedjthejqrmation of corporations of certain particular kinds
or classes only. Under such statutes, j.t„was, — or rather is,
for the^ stiU remain_j.n Joj£a,ia .someJes^^ — JIDfc-.
per atively necessary that the qbj ects ,.Qf .thg„ pr opposed,, corpora-
tion should be broua^Ltjvithiii_some of these^asses. Thus, if
a statute-aulBorized the formation of manufacturing corpora-
tions, the organization of a company to engage in the business
of buying and selling merchandise would be impossible.' A
' Cf. Meen v. Pioneer Pasteuriz-
ing Co., 90 Minn. 501 ; 97 N. W. 140
(where a company formed for "buy-
ing, manufacturing and dealing in
milk, cream, butter, cheese, and
other dairy products and pasteuriz-
ing and treating said milk," etc., was
held not to be an exclusively manu-
facturing or mechanical corpora-
tion). As to what is a "manufac-
turing corporation," see further,
Bolton V. Nebraska Chicory Co., 96
N. W. 148 ; 69 Nebr. 681 ; Rec&iver-
ship of {Merchants' Nat. Bank v.)
Minnesota Thresher Mfg. Co., 95
N. W. 767; 90 Minn. 144; Bern-
heimer v. Converse, 27 Sup. Ct. 755 ;
Cuyler v. City Power Co., 74 Miim.
22; 76 N. W. 948; Nicollet Nat.
Bank v. Frisk-Turner Co., 71 Minn.
413 ; 74 N. W. 160 ; 70 Am. St. Rep.
334 ; Carlsbad Water Co. v. New, 33
Colo. 389 ; 81 Pac. 34 ; West Nor-
folk Lumber Co., 112 Fed. 759;
Attorney-General ex rd. Miner v.
Lorman, 59 Mich. 157; 26 N. W.
311; 60 Am. St. Rep. 287; Com-
monwealth V. Keystone Electric, etc.
Co., 193 Pa. St. 245; 44 Atl. 326;
Powell V. Murray, 3 N. Y. App. Div.
273; 157 N. Y. 717; 53 N. E. 1130
(manufacturing company no power
to deal in products manufactured by
other companies) ; Frederick Elec-
tric Light, etc. Co. v. Mayor, etc. of
Frederick City, 84 Md. 599; 36
Atl. 362; 36 L. R. A. 130 (electric
light company distinguished from
manufacturing company) ; First Nat.
Bank v. William B. Trigg Co. (Va.),
56 S. E. 158.
As to what is a "trading corpora-
tion," see Pocono Spring, etc. Co. v.
Am. Ice Co., 64 Atl. 398; 214 Pa.
640. ,
As to what is a manufacturing,
mercantile, or trading (or, after
1901, mining) corporation, consult
the cases as to what corporations
may be adjudged bankrupts under
the Bankrupt Act of 1898 and the
amendatory statute of 1901. In the
following cases corporations have
been held to be within the Act : First
Nat. Bank v. Wyoming Valley Ice
Co., 136 Fed. 466 (company dealing
in ice partly of its own harvesting
and partly bought from other per-
sons, held to be engaged chiefly in
trading and mercantile pursuits) ;
Troy Steam Laundering Co., 132 Fed.
266 (laundry company the largest
part of whose business consists in
laundering coUa^rs and cufFs for man-
ufacturers held to be engaged prin-
cipally in manufacturing) ; Marine
Construction & Dry Dock Co., 130
Fed. 446 ; 64 C- C. A.. 648 (company
engaged in constructing boats and
also boilers, masts, desks, etc., for
vessels held engaged principally in
manufacturing) ; Columbia Iron-
works v. National Lead Co., 127 Fed.
99 ; 62 C. C. A. 99 (corporation en-
gaged in building iron vessels held
engaged in manufacturing and mer-
§ 48
THE INCORPORATION PAPER
[Chap. II
statute providing for incorporation for purposes "of trade or of
carrying on any lawful mechanical, manufacturing, or agri-
cultural business," will authorize the formation of a corporation
to buy, sell, improve, and lease real estate.' Under a law au-
thorizing the formation of corporations for "hunting, fishing,
bathing or lawful sporting purposes," a company cannot be
cantile pursuits) ; White Mountain
Paper Co., 127 Fed. 643 ; 62 C. C. A.
369 (corporation formed for manu-
facturing paper held engaged in
manufacturing although it had never
completed the manufacture of any-
paper) ; Muiual Mercantile Agency,
111 Fed. 152 (mercantile agency
publishing a book for ratings);
Tecopa Mining & Smdting Co., 110
Fed. 120 (Mining and smelting held
to be manufacturing. But compare
Act of 1901 which expressly added
"mining" to the classes of corpora-
tions within the act) ; Morton
Boarding Stables, 108 Fed. 791
(company keeping a "boarding
stable" held engaged in trading or
mercantile pursuits) ; Quincy Granite
Quarries Co., 147 Fed. 279 (quarry
company held engaged in mining
and manufacturing) ; Burdick v.
DiUon, 144 Fed. 737; 75 C. C. A.
603 (quarrying held to be included
within the term mining) ; First Nat.
Bank, 152 Fed. 64 (building concrete
arches and bridges, and dressing
stone held to be manufacturing).
In the following cases companies
have been held not to be within the
Act : V. S. Hotel Co. v. NUes, 134
Fed. 225; 67 C. C. A. 153 (hotel
company) ; Bay City Irrigation Co.,
135 Fed. 850 (company for irriga-
tion of rice fields) ; Butt v. Mac-
Nichol Construction Co., 140 Fed.
840 ; 72 C. C. A. 252 (company for
construction of bridges, wharves,
etc.) ; Snyder & Johnson Co., 133
Fed. 806 (company soliciting adver-
tisements for newspapers) ; Surety
Guarantee & Trust Co., 121 Fed. 73;
56 C. C. A. 654 (buying and selling
stocks, bonds, and other securities,
not trading or mercantile pursuit) ;
Quimby Freight Forwarding Co., 121
Fed. 139 (forwarding company also
engaged in buying alid selling);
Parmdee Library, 120 Fed. 235 ; 56
C. C. A. 583 (circulating library
company) ; White Star Laundry Co.,
117 Fed. 570 (laundry company) ;
Tontine Surety Co., 116 Fed. 401
(corporation authorized to deal in
diamonds which had contracted
to deliver a diamond on payment of
a certain sum, but which had never
purchased, owned, or delivered a
diamond, not engaged in trading or
mercantile pursuits) ; New York, etc.
Water Co., 98 Fed. 711 (water-supply
company) ; Cameron Town, etc. Ins.
Co., 96 Fed. 756 (insurance com-
pany) ; Chesapeake Oyster, etc. Co.,
112 Fed. 960 (saloon and restaurant
company) ; Woodside Coal Co., 105
Fed, 66 (Coal mining company.
Note that mining corporatioivs are
now expressly included by Act of
1901) ; New York, etc. Ice Lines, 147
Fed. 214 ; 77 C. C. A. 440 (ice com-
pany selling ice of its own harvest-
ing) ; T. E. Hill Co., 148 Fed. 832
(building of concrete piers and abut-
ments for bridges held not manu-
facturing) ; Toledo Portland Cement
Co., 156 Fed. 83 (corporation which
was formed to manufacture cement
but which had not completed its
buildings nor its railroads from
them to the marl beds from which
it was to obtain its materials, held
not "engaged" in manufacturing
cement).
As to classification of corpora-
tions with reference to their objects,
see also supra, § 26-§ 29.
' Finnegan v. Noerenherg, 512
Minn. 239, 245; 53 N. W. 1150; 38
Am. St. Rep. 552.
44
§ 31-§ 162] THE OBJECT CLAUSE § 4S
organized to enforce the game laws and, as informer, collect
fines for their violation.' A corporation for the purpose of buy-
ing and selling bonds cannot be formed under a statute au-
thorizing incorporations "for the purpose of buying and selling
merchandise and conducting mercantile operations." ^ A cor-
poration cannot be formed to deal in rice as an article of com-
merce under a statute authorizing the formation of corporations
for growing, purchasing, and selling seeds for agricultural
purposes.' Laws providing for the incorporation of companies
to aid in the industrial or productive interests of the country
have been held, by a rather liberal construction, to authorize
the formation of street railway or tramway companies.* When
the objects for which corporations could be formed were few,
it was a comparatively easy matter to determine whether the
objects of the proposed company were, or were not, within the
statute, even where the act allowed incorporation for certain
specified purposes only. But the statutes based on this scheme
which remain in force have been repeatedly amended by en-
larging the permissible objects, so that although these permis-
sible objects now embrace all the more usual forms of business
activity, yet when some novel enterprise is being launched great
difficulty may be experienced in deciding whether or not it falls
within the statute.
Where a statute enumerated a number of different objects
for which corporations might be formed, it was held in Texas
that one corporation could not be formed for two of such ob-
jects or purposes ; ^ and a fortiori this result is reached where the
enumerated objects are separated in the statute by the dis-
junctive "or." ° On the other hand, the objects of a corporation
may be more circumscribed than any one of the classes named
' Ancient City Sportsman's Club 474-475 (case of an express com-
V. MiUer, 7 Lans. (N. Y.), 412. pany).
2 Indiana Bond Co. v. Ogle, 22 » Ramsey v. Tod, 95 Tex. 614;
Ind. App. 593 ; 54 N. E. 407. 69 S. W. 133 ; 93 Am. St. Rep. 875.
' MiUer v. Todd (Tex.), 67 S. W. Cf. Dam:y v. Clark, 24 App. D. C. 487.
483 ; 95 Tex. 404. But see Finnegan v. Noerenberg,
* Central Trust Co. v. Warren, 52 Minn. 239, 245; 53N. W. 1150;
121 Fed. 323; 58 C. C. A. 289. As 38 Am. St. Rep. 552; Louisiana
to the meaning of the word "Indus- Navigation, etc. Co. v. Doullut, 114
trial" as applied to corporations, La. 906; 38 So. 613.
see further, Wdls, Fargo & Co. v. ° Williams v. Citizens' Enterprise
Northern Pac. Ry. Co., 23 Fed. 469, Co., 25 Ind. App. 351 ; 57 N. E. 581 ;
45
§ 49 THE INCORPOEATION PAPER [ChAP. II
in the statute. For instance, if one of the objects for which
companies may be incorporated is manufacturing, a corporation
may be formed for engaging in one particular kind of manu-
facturing.' Moreover, it is permissible to combine two or more
objects all of which are within one of the classes designated in
the statute, such as the mining of both gold, silver, and lead,
where mining in general is one of the objects mentioned in the
statute for which corporations may be formed.^
§ 49-§ 63. Under Statutes permitting Incorporation for any
Lawful Purpose.
§ 49. In general. — The statutes now in force in most parts
of America as well as in Great Britain provide for the forma-
tion of corporations for any lawful purpose or objects.' From
these sweeping terms, express exception is usually made of bank-
ing, insurance, railroad purposes, etc.; but these exceptions
are generally few and of a kind that does not call for extended
consideration here.* Some statutes, after mentioning a number
of specific purposes for which corporations may be formed, add
"or other lawful business," or, "other lawful purpose" or the
like. It has been held that such general expressions cannot be
confined in their operations to objects ejusdem generis with those
West Manayunk, etc. Co. v. New contracts for maintaining and ope-
Gas Light Co., 21 Pa. Co. Ot. Rep. rating railways," provided that the
393; Consumers' Gas Trust Co. v. company should "not operate any
Quiriby, 137 Fed. 882 ; 70 C. C. A. railroad, engage in the business of a
220 ; People ex rel. Belknap v. railroad, or do anything in the prem-
Beach, 19 Hun (N. Y.), 259, 260 ises prohibited to corporations of
(semble). this character," was held not proper
Cf. Bayou Cook, etc. Co. v. Dotdlut, to be recorded under a statute pro-
35 So. 729; 111 La. 517. hibiting the formation of corpora-
' Cf. Roofing Contractors' Ass'n, tions for the operation of railroads) ;
200 Pa. St. Ill ; 49 Atl. 894. State v. Debenture Guarantee, etc. Co.,
' People ex rel. Belknap v. Beach, 26 So. 600 (formation of corpora-
19 Hun (N. Y.), 259. tion to deal in debentures not per-
' As to incorporation for an un- missible under statute providing for
lawful purpose, or purpose contrary incorporation for any lawful purpose
to public policy, see infra, § 62 and provided that no corporation should
Chap. v. engage in "stock-jobbing"), affirmed
* Cf. Dancy v. Clark, 24 App. D. as to federal questions in A'^ewOrieans
C. 487, 505-506 (where an incorpo- Debenture, etc. Co. v. Louisiana, 180
ration paper which, after mention- U. S. 320; 21 Sup. Ct. 378.
ing as one of the objects "to perform
46
§ 31-§ 162] THE OBJECT CLAUSE § 50
specifically mentioned.' Moreover, where the statute authorizes
incorporation " for the purpose of engaging in any lawful enter-
prize, business, pursuit or occupation," the words cannot be
restricted to schemes for making money, but authorize incor-
poration for the purpose of aiding a certain educational insti-
tution by guaranteeing its bonds.^
§ 50. Whether more than one Object may be specified. —
Where the statute authorizes the organization of companies for
any lawful purpose, business, or the like, in the singular, doubt
has been entertained whether a corporation may be formed for
two or more distinct objects, or whether there must not be some
one main purpose to which everything else is ancillary.^ To
guard against all question of this sort, some statutes use a plural
as well as the singular noun — " for any lawful purpose or pur-
poses." * But the doubt is probably Unfounded.^ Thus, the
British law provides that " any seven or more persons associated
for any lawful purpose" may, by subscribing, etc., form an in-
corporated company." Yet neither the English lawyers nor their
courts have ever denied that a corporation might lawfully be
organized under this statute for two or more disconnected pur-
' Brown v. Corbin, 40 Minn. 508 ; limited by the ejusdem generis rule
42 N. W. 481 ; Cflen v. Breard, 35 and that a corporation could accord-
La. Ann. 875; State ex rd. Walker ingly be formed to insure against
V. Corkins, 123 Mo. 56 ; 27 S. W. burglary) ; St. Louis Colonization
363; National Bank v. Texas Irv- Ass'n v. Hennessy, 11 Mo. App. 555,
vestment Co., 74 Tex. 421 ; 12 S. W. 559 (headnote inadequate).
101 (distinguishing Texas, etc. Navi- ' Maxwell v. Akin, 89 Fed. 178.
gation Co. v. County of Galveston, 45 ' See People ex rd. Peabody v.
Tex. 272) ; Yokes v. Eaton, 85 S. W. Chicago Gas Trust Co., 130 111. 268,
174 ; 27 Ky. Law Rep. 358 ; Lindsay, 290 ; 8 L. R. A. 497 ; 22 N. E. 798 ;
etc. Co. V. MvUen, 176 U. S. 126, 138- 17 Am. St. Rep. 319 (stated and
139 (headnote inadequate) ; 20 Sup. criticised infra, § 52) ; Ramsey v.
Ct. 325. Tod, 95 Tex. 614 ; 69 S. W. 133 ;
But see contra: State ex rel. 93 Am. St. Rep. 875; Williams v.
Lederer v. International Investment Citizens' Enterprise Co., 25 Ind.
Co., 88 Wise. 512; 60 N. W. 796; App. 351,355; 57N. E. 581; Dancy
43 Am. St. Rep. 920 (with which v. Clark, 24 App. D. C. 487, 500-
compare Wisconsin Telephone Co. 504 (a strong but, it is submitted, a
V. City of Oshkosh, 62 Wise. 32, 38 ; questionable decision) ; State v.
21N.W.828.) Taylor, 55 Ohio St. 61, 67-68; 44
Of. Banker's MiU. Casualty Co. v. N. E. 513.
First Nat. Bank (Iowa), 108 N. W. * New Jersey Laws, 1899, chap.
1046 (holding that a statute provid- 176.
ing for incorporation of companies ° Cf. People ex rd. Bdknap v.
for insurance against damage by fire Beach, 19 Hun (N. Y.), 259.
"or other casualty" should not be ° Cbmpanies Act, 1862, § 6.
47
§ 51 THE INCORPORATION PAPER [ChAP. II
poses. Thus, an English text-writer of authority declares:
"There is no rule, for instance, that the principal or leading
object must be stated, and that all the other objects must be
conducive or auxiliary thereto. On the contrary, it is permissi-
ble to have any number of objects alternative, concurrent, or
substitutional, provided they are legal and are specified. Thus,
the objects clause may commence by declaring that the company
is formed to carry on the business of a brewery company ; but
there is not the slightest objection in point of law to stating that
another object is to carry on the business of a mining company." '
To be sure, the British act directs that the memorandum of asso-
ciation or incorporation paper shall state the "objects" of the
company ; ^ but this use of a plural noun has never been thought
to enlarge the singular term, " purpose," which is found in a pre-
ceding section of the same statute.' In some of the United States
the general rule of statutory construction has been laid down
that the singular number shall include the plural unless a con-
trary intention clearly appear; and this rule of construction
would remove all difficulty arising from the use of a singular
instead of a plural noun.
§ 51. Insertion of Subsidiary Objects or Powers. — Under
statutes allowing incorporation for any lawful purposes, it seems
abundantly clear on principle that the incorporation paper may
in addition to the company's main object mention as subsidiary
objects the exercise of any powers that the promoters may deem
conducive thereto although not perhaps such as the law would
have implied as incidental to the prime objects. This proposi-
tion is so thoroughly supported by the liberal policy of the law
that one should be surprised to find it questioned. In England,
no doubt ever appears to have been entertained. Thus, although
' Palmer's Company Law, 17. hotel company, 'The object of this
Cf. Governments Stock Investment company is to carry on the business
Co. (1891), 1 Ch. 649, 655, where of an hotel'; and you may go down
Chitty, J., said: "The legislature, from that in a manner which will
no doubt, was aware that according surprise the uninitiated, and find
to the way in which the Limited Lia- out what the hotel company may,
bility Act has been worked, the fram- according to the ingenious framer
ers of memoranda of association in- of the memorandum of association,
sert sometimes, under letters which do — things which I think would as-
exhaust the alphabet, what they are tonish any ordinary hotel keeper."
pleased to call the ' objects' of the ' Companies Act, 1862, § 8 (3).
company. You may get as to an ' § 6.
48
§ 31-§ 162] THE OBJECT CLAUSE § 52
the English courts will not readily imply the power to issue nego-
tiable paper, express provisions making the issue thereof a sub-
sidiary object of the company in question are frequent and
undoubtedly efficacious. The English books are full of similar
instances in which promoters have inserted in incorporation
papers clauses mentioning this, that, or the other, as one of the
company's objects, merely in order to remove any possible
doubt as to whether the power would be implied as incidental
to the main objects; and the American reports contain similar
instances.' The validity of such provisions is fundamental in
modern corporation law, and ought not to admit of question.
§ 52. People v. Chicago Gas Trust Company. — An Illinois
case, decided in 1890,^ which is somewhat confused and re-
actionary, yet deserves detailed examination, lest it should prove
misleading upon this truly fundamental subject. A company
was incorporated under an Illinois statute which provided for
the formation of corporations "for any lawful purpose." Its
incorporation paper, or, to use the name in vogue in Illinois, its
articles of incorporation, provided that the object of the com-
pany should be to engage in the manufacture, sale, and distribu-
tion of illuminating gas, and, to "purchase and hold or sell the
capital stock, or purchase or lease or operate the property, plant,
good-will, rights and franchises, of any gas works, or gas com-
pany or companies." In fact, the corporation was organized
to acquire the majority of the shares of the four competing gas
companies which were then in operation in the city of Chicago ;
and did accordingly carry out that purpose. It never established
any gas works of its own. Upon a proceeding in the nature of
quo warranto to test the company's right to hold the controlling
interest in the subsidiary corporations, the court held that the
right did not exist. One ground relied upon by the court and
broad enough to support the decision was that, the unlawful
design having been entertained of creating a virtual monopoly,
the company was not organized for a lawful purpose. If the
opinion had rested here, no fault need have been found with
the case ; but various other propositions were advanced. In the
' See People ex rd. Loy v. Mount ' People ex rd. Peabody v. Chi-
Shasta Mfg. Co., 107 Cal. 256; 40 cago Gas Trust Co., 130 111. 268;
Pac. 391. 22 N. E. 798; 17 Am. St. Rep. 319;
8 L. R. A. 497.
VOL. I. — 4 49
§ 53 THE INCORPORATION PAPER [ChAP. II
first place, it was said that the power to hold the shares could
not be implied as incidental to the power to manufacture and
sell illuminating gas; and upon this point the case is certainly
in accord with the weight of authority.' As to the clause in the
incorporation paper purporting expressly to confer the power,
the court reasoned that if the clause were viewed as ancillary
to the power to operate gas works, it would not be effective since
the promoters could not by express stipulation augment the im-
plied or incidental powers. If this obiter dictum were correct,
it would indeed be laying the axe at the root of the tree ; but as
we have shown in the last paragraph it is believed to be opposed
both to authority and to reason.^ The legislature, by enabling
the promoters to organize a corporation for any lawful purpose
that they might mention in their incorporation paper indicated
a liberal policy ; and why should not the intention of the pro-
moters that a certain power should be exercisable be carried
out if possible? Why should they not have the right under a
statute of this liberal sort to say what shall be deemed in their
case incidental powers? It is submitted that if the power to
hold shares in other companies might be made the principal
object, or one of the principal objects, of the company, then only
one who delights m unjust technicalities could think that the
same power should not be exercisable if given as merely ancil-
lary to some other object. The court, however, proceeded to
decide that the holding of a controlling interest in the other gas
companies could not be made the company's principal or only
object because of the unlawful intention of creating a monopoly.
With this latter position, as applied to the particular facts of the
case, we have, as already stated, no disposition to quarrel. The
court adverted to the fact, as specially indicative of monopoly,
that the power sought to be conferred was to acquire and hold
not certain shares of stock, but "the capital stock " — that is, all
the shares.^
§ 53. Objects must be eonsistent with Nature of a Corpora-
tion. — Under any statute, however liberal, the objects of the
company must be legal * and must not be obnoxious to the gen-
' Infra, § 83. ' 130 111. 290-291.
' Cf. People ex rel. Lay v. Mount * See infra, § 62 and Chap. v.
Shasta Mfg. Co., 107 Cal. 256; 40
Pac. 391.
SO
§ 31-§ 162] THE OBJECT CLAUSE § 55
eral spirit pervading the act or to accepted principles of cor-
poration or company law. Thus, in any jurisdiction where the
purchase by a corporation of its own shares is deemed foreign
to the nature of a limited company, a clause in the incorporation
paper purporting to confer a power to make such purchase is
illegal and void.' The same thing would be true of an attempt
to authorize the payment of dividends out of capital, the giving
of a preference to shareholders over creditors in the distribution
of assets in a winding-up, or any other transaction which is
regarded as contrary to the spirit of the statute and to the
statutory conception of a corporation.^
§ 54. Sale of Entire Business as one of the Objects. — The
sale of a business or undertaking is a perfectly lawful object ;
and hence, according to English authorities, a clause in an in-
corporation paper mentioning the sale of the company's whole
business or undertaking as one of its objects is entirely valid
under a statute allowing incorporation for any lawful purpose.^
So, also, the incorporation paper may properly provide for a
transfer of the company's business and undertaking in exchange
for shares in another corporation,* or other property. A sale
or transfer of all the corporation's assets, in pursuance of such
a provision, is to be deemed a transfer in the ordinary course of
business, so that upon the consummation of the transaction, the
company does not necessarily cease to be a going concern.^
» § 55. American Cases. — The American cases on the sub-
jects treated in the last paragraph are neither numerous nor
conclusive. In respect to corporations formed by special act,
the law was well settled that no power of selling or leasing their
whole property and business, or franchises, existed unless par-
' Trevor v. Whitworth, 12 App. out without a winding-up, but where
Cas. 409, 436-437 (semble, per Lord [pp. 840-841] the judge doubted
Macnaghten). whether on principle, an incorpora-
' Cf. infra, § 122 and § 624. tion paper should be permitted to
' Cotton V. Imperial, etc. Corpora- state any but the "living objects"
tion (1892) 3 Ch. 454, 458 (head- which the company is to carry out
note inadequate). as a " living concern"). A power of
* Cotton v. Imperial, etc. Corporon sale or exchange such as is referred
tion (1892), 3 Ch. 454, 458 (head- to in the text is not readily implied,
note inadequate) ; Doughty v. Loma- People v. Ballard, 134 N. Y. 269 ;
gunda Reefs (1902), 2 Ch. 837 (where 32 N. E. 54 ; 17 L. R. A. 737. See
the incorporation paper was held to also infra, § 78-§ 79.
authorize a contract of sale, the ° Foster v. Borax Co. (1901), 1
terms of which could not be carried Ch. 326.
-. 51
§ 55 THE INCORPORATION PAPER [ChAP. II
ticularly conferred by statute. Especially, was this true with
respect to public-service corporations such as railroads.' But
manifestly, these cases have no appKcation to companies which
are incorporated under general laws authorizing incorporation
for any lawful purpose. Surely, the English cases are right in
holding that to build up a business for the purpose of selling it
at a profit is a lawful object. In a case stated above at consider-
able length, the United States Supreme Court held in substance
that the leasing, or taking a lease, of a railway was not a lawful
object for incorporation under the Oregon general laws, which
provided that companies might be incorporated for " any lawful
business, pursuit or occupation." ^ But railroad corporations
even when organized under general laws are very different from
companies having no public duties to perform. A railway com-
pany enjoys the power of condemning private property; and
sometimes provision is made for a judicial investigation into the
fitness of the corporation to be entrusted with this delicate fran-
chise, so that perhaps public policy might be thought to pro-
hibit a complete transfer of its line into other hands by sale or
lease. Moreover, even where general laws provide for the incor-
poration, construction, and operation of railways, the sale or
lease of a completed road, involving, as it generally does, a
transfer of control from small local capitalists to some great
foreign corporation or syndicate, may be deemed contrary to
the policy of the law. At all events, the case with respect to a
railroad differs materially from that of mere industrial corpo-
rations with no public duties to perform. Consequently, while
one should expect Oregon Railway Company v. Oregonian Rail-
way Company to be followed in America, yet its doctrine ought
not to be and probably would not be, extended or applied so as
to prohibit the organization of an industrial corporation for the
purpose of selUng or otherwise disposing of its whole business
and property or, in other words, its " undertaking." ' To, build
'See, for example, Kean v. iJj/s., eic. Co., 49 N. J. Eq. 217, 241;
Johnson, 9 N. J. Eq. 401; Thomas 23 Atl. 287 (where the court said,
V. Railroad Co., 101 U. S. 71. obiter: " The Corporation Act per-
' Oregon Ry. Co. v. Oregonian mits incorporations not only for ob-
Ry. Co., 130 U. S. 1 ; 9 Sup. Ct. 409. jects specified therein, but for 'any
' TraefT v. Lucas Prospecting Co., lawful business or purpose whatso-
99 N. W. 290 ; 124 Iowa, 107. ever,' which general clause is not,
Cf. EUerman v. Chicago Junction however, to be construed as embrac-
52
§ 31-§ 162] THE OBJECT CLAUSE § 56
up a private business for the purpose of selling it advantageously
is, for individuals, a very usual and perfectly lawful aim. Why
should not the formation of a corporation for the same object be
equally legitimate under any incorporation law providing for the
organization of companies for any lawful purpose or business?
Where the statutes restrict the right to incorporate to certain
named classes of companies, it is, however, probably true that no
corporation can be organized for the purpose of seUing its busi-
ness and undertaking : for, however numerous the specified ob-
jects for which such statutes permit incorporation, this is not
one of them.'
§ 56. Acting as Agent or Attorney as one of Objects. — To
act as agent or attorney in fact for other persons is a lawful
business, and therefore a corporation may be organized for that
object.^ The objection that a torporation can act only by agents,
and therefore cannot be itself an agent, since delegata potestas
non potest delegari, is wholly unsubstantial ; for any person who
employs a corporation as agent necessarily consents that it shall
in the course of its agency act through sub-agents.' And like-
wise the objection that a corporation cannot as agent execute
deeds of real estate on the principal's behalf, since, being an
impersonal entity, it cannot make an acknowledgment, is unten-
able ; for the corporation can make the acknowledgment in the
same way as if it were a principal, namely, by its officers. Con-
sequently, a corporation may even be formed to act as agent or
ing powers to do those things which R. A. 638 ; 17 Am. St. Rep. 737 ;
would deprive the corporation of its State ex rel. Le Blanc & Bailey v.
ability to carry out the objects for Michel, 36 So. 869 ; 113 La. 4.
which it was formed, or discharge Cf. Morris v. Third Nat. Bank,
any duties which it might, under its 142 Fed. 26 ; 73 C. C. A. 211 (where
charter, owe to the public, or which under peculiar circumstances a na-
are contrary to the policy of the tional bank was held to have implied
law"); People ex rel. Ba/rney v. power to act as representative of
Whalen, 104 N. Y. Supp. 555 (pro- other persons) ; Anderson v. First
vision for sale of entire property Nat. Bank, 5 N. Dak. 451 ; 67 N. W.
held to be in conflict with a statute 821 (also relating to the powers of
expressly conferring a more limited national banks as agents),
power of the same general kind) ; ' Snow, Church & Co. v. Hall, 19
People ex rel. Barney v. Whalen, 106 N. Y. Misc. 655; 44 N. Y. Supp.
N. Y. Supp. 434 (similar decision to 427 (a corporation formed to carry
last case). on a collection agency may employ
' See infra, § 78. attorneys at law to collect claims and
" Killingsworth v. Portland Trust charge their fees against its client).
Co., 18 Oreg. 351; 23 Pac. 66; 7 L.
53
§ 57 THE INCORPORATION PAPER [ChAP. II
broker in the purchase or sale of its own shares.' A corporation
may be formed to carry on the business of acting as agents of
other persons even though a statute' provides that no corporation
shall act as administrator or guardian, or fill "any other office
of personal trust " ; ^ for the words last quoted refer to offices of
personal trust ejiisdem generis as those specially mentioned and
not to mere private agencies.
§ 57. Acting as Trustee. — To act as trustee is a lawful
object ; and therefore under statutes providing for the formation
of corporations for any lawful purpose, there is no reason why
acting as trustee should not be mentioned in the object clause of
an incorporation paper as an object of the proposed company,
unless indeed the acting as trustee be contrary to the very nature
of a corporation. Now, under the Statute of Uses the doctrine
was established in early times that* a corporation could not be a
trustee or feoffee to uses; for how, it was said, can trust be re-
posed in a being which has no soul or conscience ? The force of
this reasoning has, of course, long since ceased to be felt ; ^ and
ever since the growth of modern trusts, the courts have held that
a corporation may act as trustee whenever so to do is a reason-
able method of attaining the objects for which it was formed.*
Indeed, it would seem that to-day in America a corporation may
be seised to a use under the Statute of Uses, and may accord-
ingly convey land by a deed of bargain and sale.* Even if the
corporation which is appointed trustee by deed or will have no
corporate power so to act, nevertheless equity will not permit the
trust to fail but will compel the corporation or whoever holds
1 Borland's Trustee v. Sted Bros. * Attorney-General v. Whorwood,
& Co. (1901), 1 Ch. 279, 293 (head- 1 Ves. Sr. 534, 536 (per Lord Hard-
note inadequate). wicke) ; Re Howe, 1 Paige (N. Y.)
' State ex rel. Le Blanc & Railey 214 ; Vidal v. Girard's Ex'rs, 2 How.
V. Michd, 36 So. 869 ; 113 La. 4. 127, 187 ; Stobart v. Fcyrhes, 13 Mani-
' Cf . Bacon on Uses, p. 57, where toba, 184 ; De Cam/p v. Dobbins, 29
a less scholastic reason is assigned N. J. Eq. 36, 39-40; PhiUips Acad-
for the doctrine. "A corporation," emyv. King, 12 Mass. 546; Lewinon
says the author, "cannot be seised Trusts, 11th ed., 30; Perry on
to an use . . . chiefly because of the Trusts, 5th ed., § 42.
letter of the Statute which in any Cf. Greene v. Dennis, 6 Conn. 292,
clause when it speaketh of the feoffee 304.
resteth only upon the word person, ' Angell & Ames on Corps., 2d
but when it speaketh of cestui que ed., 153-154.
■use, it addeth person or body But see Greene v. Dennis, 6 Conn,
politic." 292, 304 (semble).
64
§ 31-§ 162] THE OBJECT CLAUSE § 58
the legal title to convey the trust property tO the person whom
the chancellor may appoint to execute the trust.' The conclu-
sion necessarily follows that under the modern liberal laws,
acting as trustee may be mentioned in an incorporation paper
as an object for which the company is formed.^ Sometimes
general incorporation laws provide that trust companies cannot
be incorporated under them; and where such statutes are in
force there may be a question whether a company can be incor-
porated for the purpose of acting as trustee. In other cases it
may be inadvisable to mention the acting as trustee as one of the
objects of the corporation lest the company be subjected to
burdensome statutory regulations applicable to trust companies.
§ 58. Acting as ]Bxecutor, Guardian, etc. — Whether a cor-
poration may be formed to act as executor or administrator or
as guardian of an infant or committee of a lunatic, is a different
question. It is settled that a corporation has no implied power
to act in any of those capacities. For instance, where a statute
provides that in case a will appoints no executor, administration
shall be granted to the residuary legatee, a charitable or educa-
tional corporation which is named as residuary legatee cannot
be appointed administrator.' It would follow that such a cor-
poration, although named as executor, would have no right to
letters testamentary.* It has even been held in Nebraska that an
order of a probate court appointing a corporation administrator
is void, and subject to collateral attack.^ The reason for this
doctrine is that statutory provisions requiring executors and
administrators to make oath to this, that, and the other, in the
■ Vidd V. Girard's Ex'rs, 2 How. patrick's WiU, 22 N. J. Eq. 463 (hold-
127, 188. ing that in such a case administra-
Cf . Jackson ex dem. Lynch v. tion should be granted to one of the
Hartwell, 8 Johns. (N. Y.) 422 (deed members of the corporation),
to corporation in trust held not to * Cf . 1 Williams on Executors, 9th
pass legal title when corporation ed., 183, 184 (where early English
has no power to execute the trust, authorities, pro and con, are referred
with a query whether a court of to) ; 1 Woemer's Am. Law of Ad-
equity would prevent the trust from ministration, § 233, p. 509 (where the
failing for want of a trustee). author expresses the opinion that
' State ex rd. Higby v. Higby Co. the modern trend of authorities in
(Iowa), 106 N. W. 382. the United States ia in favor of the
^ President, etc. of Georgetown capacity of corporations to act as
College v. Browne, 34 Md. 450, 455 executors).
(sembie) ; Thompson's Estate, 33 ° Continental Trust Co. v. Peter-
Barb. (N. Y.) 334. Cf. Re Kirk- son (Nebr.), 107 N. W. 786.
55
§ 59 tHE INCORPORATION PAPER [ChAP. II
course of the administration show that natural persons alone
are contemplated.' As res Integra it might be doubted whether
this reasoning is altogether conclusive. Nevertheless, wherever
such reasoning has been accepted, it would necessarily seem to
follow that a corporation cannot be formed, even though the
statute authorize incorporation for any lawful object, for the
purpose of acting as executor or administrator, and that any
provision in an incorporation paper purporting to empower the
company tp act in either of those capacities would be ineffective.^
According to this view, affirmative legislative sanction is neces-
sary in order that a corporation may act as executor or adminis-
trator. This legislative sanction is, nowadays, not infrequently
granted.^
§ 59. Owning Shares in another Corporation. — The forma-
tion of a corporation for the purpose of controlling another
corporation by means of ownership of shares in the latter com-
pany is often highly desirable. Such a purpose is not in itself
unlawful unless it be foreign to the nature of a corporation to
become a member of another corporation. It would seem clear
that this is not so, and that in the absence of some direct statu-
tory prohibition, the ownership by one business company of
shares in another business corporation, even though possibly
ultra vires, is not illegal or against public policy. "There is no
reason at common law, so far as I know," said Lord Cairns,
"why one corporate body should not become a member of an-
other corporate body."* This is rendered abundantly clear by
several groups of cases, in which corporations are allowed to
' A corporation, says Blackstone, poration not qualified under domes-
" cannot be executor or administra- tic law); Crowley v. Sandhurst, etc.
tor, or perform any personal duties ; Co., 23 Vict. L. R. 661 (holding that
for it cannot take an, oath for the a corporation which by act of Par-
due execution of the office." 1 Black, liament is authorized to act as trus-
Comm. 477. tee may act as co-trustee with
^ Cf. State ex rel. Higby v. Higby individuals, as to which point see
Co. (Iowa), 106 N. W. 382. also infra, § 76) ; LouisviUe, etc. R. B.
' E. g. Minnesota Loan & Trust Co. v. Herndon's Adm'r (Ky.), 104
Co. V. Beebe (Minn.), 41 N. W. 232; S. W. 732 (holding that a corpora-
40 Minn. 7 ; 2 L. R. A. 418 (corpora- tion which is authorized by statute
tions as guardians) ; Deringer's to act as administrator may be ap-
Adm'r v. Deringer's Adm'r, 5 Houst. pointed public administrator).
(Del.) 416; 1 Am. St. Rep. 150 * Earned' s Banking Co., 3 Ch.
(validity of foreign appointment of 105, 113.
corporation recognized, although cor-
56
§ 31- §162] THE OBJECT CLAUSE § 60
become members of other corporations without any express
authority.' Since, therefore, the ownership by one corporation
of shares in another corporation is not necessarily contrary to
the policy of the law, it follows that under statutes which au-
thorize the incorporation of companies for any lawful purposes,
a corporation may legally be organized with the acquisition and
ownership of shares in other corporations as one of its objects as
expressed in its incorporation paper.^ Indeed, the so-called
"holding-companies," which have become not infrequent in
these latter days, are based on this principle.
§ 60. Ownership of Shares with ulterior Illegal Intent. — Of
course, in any particular case the ownership of shares of stock
by a corporation may be unlawful because of some ulterior
illegal intent,' such as the creation of a monopoly, restraint of
trade, or the practical consolidation of competing lines of rail-
way in fraud of some prohibitory statute ' or in violation of what
is deemed the public policy of the state.* Indeed, some cases
apparently hold that the acquisition by one company of shares
of stock in another corporation for the purpose of controlling
the latter's business is prima facie at least contrary to public
' See infra, § 82. ing any such intent, see National
' Barned's Banking Co., 3 Ch. Salt Co. v. Ingraham, 143 Fed. 805;
105 ; Dittman v. DistiUing Co., 54 74 C. C. A. 479.
Atl. Rep. 570 (N. J. Ch.); Market * Northern Securities Co. v. U.S.,
Street Ry. v. HeUman, 109 Cal. 571, 193 U. S. 197; 24 Sup. Ct. 436;
589-590; 42 Pac. 225; Traer v. People v. Chicago Gas Trust Co.,
Lucas Prospecting Co., 99 N. W. 290 ; 130 111. 268 ; 22 N. E. 798 ; 17 Am.
124 Iowa, 107; Robotham v. Prii^ St. Rep. 319; 8 L. R. A. 497 (stated
dential Ins. Co., 64 N. J. Eq. 673, and criticised, supra, § 52) ; Dunbar
696; 53 Atl. 842. v. American Tel., etc. Co. (111.), 79
But see People v. Chicago Gas N. E. 423 ; 224 111. 9 ; Bigelow v.
Trust Co., 130 111. 268 ; 22 N. E. 798 ; Calumet, etc. Mining Co., 155 Fed.
17 Am. St. Rep. 319 ; 8 L. R. A. 497 869 ; Southern Electric Securities Co.
(stated and criticised supra, § 52); v. State (Miss.), 44 So. 785; Burrows
Woodberry v. McClurg, 29 So. 514; v. Interborough Metropolitan Co., 156
78 Miss. 831 (decided under a Mis- Fed. 389 (where the general statute
sissippi statute, known as the anti- expressly authorized formation of
trust law, expressly prohibiting cor- corporations to acquire stock in
porations from owning stock of other other companies but also prohibited
companies) ; Parsons v. Tacoma monopolies).
Smelting, etc. Co., 65 Pac. 765; 25 Ci.Dittmanv. DistiUing Co. Qi.i.),
Wash. 492. , 54 Atl. Rep. 570 ; Trust Co. of Georgia
" Of. Pearson v. Concord R. R. v. Stote,,35 S. E. 323; 109 Ga. 736;
Ctyrp., 62 N. H. 537 ; 13 Am. St. 48 L. R. A. 520.
Rep. 590. , ° Elkins v. Camden, etc. R. R.
As to the impossibility of presum- Co., 36 N. J. Eq. 5.
57
§ 61 THE INCORPORATION PAPER [ChAP. II
policy.' At all events, a scheme by which one corporation ac-
quires a majority of the shares of another which at the same
time acquires a majority of the shares of the former company is
illegal ; inasmuch as its effect would be to lodge permanent con-
trol of both companies in the men who happen at the time to be
the directors, and to deprive the persons beneficially interested in
the companies, namely, the other shareholders, of all power
or control over their own property.^ Where the ownership of
shares in another company is not vitiated because of some illegal
intent, the question whether the power exists is purely a question
of construction of the incorporation paper.
§61. Amalgamation with other Corporations. — The stat-
utes of Great Britain and of most of the United States contain
express provisions authorizing a consolidation or amalgamation
of corporations formed under them with other corporations of a
similar nature. These provisions, at least in the United States,
commonly provide for a consolidation in the technical sense in
which that word is used in this country — that is to say, a
coalescing or merger of the two with the result that a new cor-
poration is formed which is distinct from either of the old ones
and yet which in a certain sense is composed of both. In order
to bring about a union of this sort, recourse must be had to ex-
press statutory authority; for without such authority not even
the most express authorization in an incorporation paper would
enable such a consolidation to be effected. On the other hand,
where such statutory authority exists there is ordinarily no need
of inserting in the incorporation paper any special clause sanc-
tioning its exercise. But sometimes it is desirable to accomplish
substantially the same end in a somewhat different way from
that provided by the statute ; and in such cases a clause may be
inserted in the incorporation paper authorizing a consolidation
or amalgamation, and such a clause is valid.* The term amal-
gamation is difficult to define * although it is of very frequent use
especially in England. Sometimes, the provision simply au-
thorizes a sale of the company's assets, business, and under-
' Pearson v. Concord R. R. Co., ' Robotfiam v. Prudential Ins. Co.,
62 N. H. S37; 13 Am. St. Rep. 590; 64 N. J. Eq. 673; 53 Atl. 842.
Anglo-American Land, etc. Co. v. ' New Zealand Gold, etc. Co. v.
Lombard, 132 Fed. 721, 736-737; Peococfc (1894), 1 Q. B. 622.
Dunbar v. American Tel., etc. Co., * Cf. South African Supply, etc.
79 N. E. 423 ; 224 111. 9. Co. (1904), 2 Ch. 268.
58
§ 31-§ 162] THE OBJECT CLAUSE § 63
taking in exchange for shares in the purchasing company, which
provision is quite valid/ No provision for such a sale or ex-
change or for an amalgamation will be construed to authorize
an arrangement whereby the shares in the purchasing company
which constitute the consideration for the transfer are to be
distributed among those who are shareholders in the vendor
company, and who upon the consummation of the scheme are
to become members of the purchasing company whether they
will or not ; ^ although it seems to be conceded that if express
authority for such an arrangement be embodied in the incor-
poration paper, it will be efficacious.^
§ 62. Unlawful Objects — How Illegality determined. — The
determination of the question what is a lawful object does not,
in general, depend at all on matters of corporation law. To lie,
to steal, to kill are unlawful objects but their illegality does not
depend on questions pertinent in a treatise on corporation law.
The matter of incorporation for illegal purposes is, moreover,
the subject of detailed consideration below.* Suffice it here to
say that the illegality may appear from other parts of the incor-
poration paper than the object clause. For instance, if the pro-
posed name of the company involves a false representation, the
company is not formed for a lawful purpose, however innocent
the objects as specified in the object clause may be.® The ques-
tion whether the purpose of incorporation is lawful is ordinarily
a question of state rather than of federal law.'
§ 63. Incorporation for a Purpose provided for by a differ-
ent Statute. — Where one statute authorizes incorporation for
any lawful purpose and another statute provides for the incor-
poration of certain kinds of corporations — such as railway,
telegraph, telephone, or gas companies — it would seem that no
company can be incorporated under the more general statute
for purposes which are covered by the other statute.' The legis-
' Supra, § 54-§ 55. note inadequate) ; 21 Sup. Ct.
" Ex parte Bagshaw, 4 Eq. 341. 378.
' Ex parte Bagshaw, 4 Eq. 341, ' Richards v. Dover, 61 N. J. Law
348. 400 (headnote inadequate), 89 Atl.
* Infra, Chapter V. 705. Cf. Montdair Military Acad-
' Eex V. Registrar Joint Stock emy v. State Board of Assessors, 65
Companies (1904), 2 Jr. 634, 640. N. J. Law 516; 47 Atl. 558; Do-
' New Orleans Debenture, etc. Co. mestic Telegraph Co. v. Newark, 49
V. Louisiana, 180 D. S. 320 (head- N. J. Law 344, 348 ; 8 Atl. 128.
59
§ 64 THE INCOEPOEATION PAPER [ChAP. II
lature is taken to have intended that, notwithstanding the gen-
eral language of the former statute, no corporation should be
formed for the purposes mentioned in the other statute without
subjecting itself to the provisions of the last mentioned act. In
any such case, the courts will if possible refer the attempted
incorporation to the statute under which the company might
have been organized rather than to that under which the cor-
poration purported to be acting.*
§ 64-§ 102. WHAT POWERS IMPLIED WITHOUT EXPRESS
MENTION IN OBJECT CLAUSE.
§ 64. In general. — In drawing up the object clause of an
incorporation paper, much may safely be left to implication.
The old list of implied powers given by Blackstone and other
early writers — the power to sue and be sued, to have perpetual
succession, to make and use a common seal, etc., — is far too
limited. Moreover, such so-called implied powers are usually
expressly conferred by the general enabling act upon all cor-
porations organized under it. There are many other powers,
not enumerated in the text-books on the subject, and indeed so
many and various as almost to defy enumeration, which are
incidental to almost every modern corporation — certainly to
every corporation framed on the joint-stock plan. Such powers
need not be expressly mentioned in the incorporation paper in
specifying the objects of the company.^
§ 65. Caution as to Reliance upon Implications of Law. — -
But although much may safely be left to implication, a few
pregnant phrases carrying a world of meaning, yet the part of
wisdom is to rely comparatively little on important powers being
read into the incorporation paper by construction or imphcation.
A learned and experienced English lawyer and text-writer has
' Minneapolis, etc. Surburban Ry. under a law for incorporation of
Co. (Minn.), 112 N. W. 13; Inter- commercial steam railroads, the
national Boom Co. v. Rainy Lake word " street " should be disregarded
River Boom Co., 97 Minn. 513 ; 107 in the incorporation paper, which
N. W. 735. set forth as the object of the com-
But of. David Bradly Mfg. Co. v. pany the construction of a street
Chicago, etc. Traction Co. (111.), 82 railway).
N. E. 210 (where the court said that ' Kingsbury Collieries and Moore's
where a corporation is organized Contract (1907), 2 Ch. 259.
60
§ 31-§ 162] POWERS IMPLIED § 66
said on this subject : " A very concise statement of objects may,
by implication, as the lawyer is aware, cover a great deal, but a
memorandum of association is a popular document intended
not merely for lawyers, but for the guidance of shareholders,
directors, and of the general public, and, accordingly, it is not
expedient to rely too much on implication. Experience shows
that it is better to be explicit, and thus to preclude as far as
practicable the doubts and dijBBculties which inevitably arise
on the construction of a very concise statement of objects.
Hence the somewhat elaborate statements of objects now so
commonly found. These clauses may err by excess of detail;
but over-elaboration is better than over-conciseness. Nothing
is more irritating to those who have to manage a company than
to find that the powers of the company are fettered or ques-
tioned, and its business impeded or prejudiced simply because
the framer of the memorandum of association has framed it
without sufficient foresight or judgment, and has, contrary to
the fact, assumed that the ordinary business man is familiar
with the legal and somewhat conflicting decisions as to the
powers which may be implied by a concise statement of
objects." ^
§ 66. Oaution as to express Mention of Powers that might
be implied — Maxim of Expressio Vnius. — One danger lurks
in over-elaboration and the statement of unnecessary details:
that is, that the express mention of certain powers which would
ordinarily be implied should be held an inferential exclusion of
all other similar powers that would likewise ordinarily be im-
plied. Expressio unius exclusio alterius? Thus, an express
power to borrow up to a certain amount would probably operate
as an implied prohibition of borrowing to a greater amount,^
although, had nothing been said on the subject, the corpora-
tion would have possessed an unlimited power of borrowing.
This danger may be averted by an express provision that the
mention among the company's objects of certain powers shall
not be deemed to exclude by inference the exercise of any powers
' Palmer's Company Law, 3d unius is "not applicable to the con-
ed., 16. struction of charters"); Kingsbury
' But see Edgewood Borough v. Collieries and Moore's Contract
Scott, 29 Pa. Super. Ct. 156 (where (1907), 2 Ch. 259, 267-268.
a somewhat misleading headnote ' Infra, § 69.
states that the maxim expressio
61
§ 67 THE INCORPORATION PAPER [ChAP. II
that might have been implied if no such express mention had
been made.
§ 67. Necessity for Draftsman to consider what Objects may
be implied — • Scope of Treatment. — In order to determine what
objects or powers must be expressly mentioned in preparing an
incorporation paper, and what need not,' it is necessary to con-
sider somewhat in detail what powers and objects may be im-
plied. This consideration will not be permitted, however, to
extend to a thoroughly exhaustive examination of the subject
of the implied or incidental powers of corporations, but will be
confined to such points as may be useful to draftsmen of incor-
poration papers.
§ 68. General Rules as to Implied Powers. — The general
rules with reference to implied powers are well established.
First, all powers not affirmatively granted, either expressly or
impliedly, are denied. A corporation has such powers, and such
only, as are conferred upon it by the act of incorporation or its
incorporation jpaper ; all powers not either expressly or impliedly
given are impliedly prohibited.^ Secondly, a corporation may
exercise all powers that are fairly incidental, or reasonably
adapted, to the attainment of its expressed objects;^ and even
a statute which provides that no corporation shall exercise any
powers except such as are "necessary" to the exercise of the
powers, or attainment of the objects, set forth in the incorpo-
ration paper does not alter this rule.* It is in the application of
the rule that doubts and difficulties are encountered ; for the ap-
plication of the rule involves "either a question of fact or at
least a mixed question of law and fact," so that former adju-
dicated cases often furnish an unsatisfactory guide.* The rule
itself is settled beyond peradventure both in England and
America. But the uncertainties of its application give rise, as
already stated, to the desirability of mentioning expressly in
the incorporation paper all powers that the company may
desire to exercise, even though they might be thought imphed
or incidental to the attainment of its other objects.
' For an excellent and concise * EUerman v. Chicago Junction
summary, see Palmer's Company Rys., etc. Co., 49 N. J. Eq. 217, 241-
Law, 3d ed., pp. 46, 47. 243 ; 23 Atl. 287.
' See supra, § 46. » Attorney-General v. Mersey Ry.
' Newport News Shipbuilding, etc. Co. (1907), A. C. 415, 416, per
Co. V. Jones (Va,), 54 S. E. 314. Lord Loreburn.
62
§ 31-§ 162] POWERS IMPLIED § 69
§ 69-§ 74. Power to Borrow.
§ 69. In general. — Take for instance the power to borrow
money.' It is well settled both in England and America that
a corporation, having power, as of course it has as incidental to
its very existence, to purchase any property or rights that may
reasonably be deemed proper for its business, may purchase the
same on credit; and in like manner may order work and labor
to be done for it on credit.^ In America, it may accomplish the
same result by borrowing money to expend for its purposes;^
but in England this is indisputably true only in the case of trad-
ing companies, other corporations having perhaps no such
power.* The validity of a loan, wherever borrowing is intra
vires, cannot be impeached because of an intention on the
company's part, unknown to the creditor, to misapply the
moneys and divert them to some vltra vires object.* Conse^
quently, there is in the United States no necessity to express in
an incorporation paper the power of borrowing money as one
of the company's objects. Moreover, any provision that may
be inserted on the subject must either be regarded as surplusage,
put in out of abundant caution, or else as restrictive in character.
The latter alternative has received judicial approval.' Thus,
' In Southern Brazilian, etc. Ry. Barb. (N. Y.) 20 ; Fifth Ward Sav.
Co. (1905), 2 Ch. 78, 84, it was said Bank v. First Nat. Bank, 48
that the power to borrow is not N. J. Law 513; 7 Atl. 318 (a sav-
properly an "object," and there- ingsbank); Partridge y. Badger, 25
fore need not be mentioned in the Barb. (N. Y.) 146; Burr v. Mc-
incorporation paper. Donald, 3 Gratt. (Va.) 215; Thonvp-
' Bagnalstown & Wexford Ry. Co., son v. Lambert, 44 Iowa 239 ; Wright
It. Rep. iEq. 505; Cork and Youghal v. Hughes, 119 Ind. 324; 21 N. E.
%. Co., 4 Ch. 748, 757 (semble). 907; 12 Am. St. Rep. 412; Ward v.
" WaUs's Appeal, 78 Fa,. St. 370; Johnson, 95 III. 215; Curtiss v.
Booth V. Robinson, 55 Md. 419, 436 ; Leavitt, 15 N. Y. 1 ; Eastman v. Park-
Fidelity Trust Co. V. Louisville Gas inson (Wise), 113 N. W. 649.
Co., 81 S. W. 927 ; 26 Ky.L. Rep., 401; But see Bacon v. Mississppi
RockweU V. Elkhorn Bank, 13 Wise. Ins. Co. (1856), 31 Miss. 116 (in-
653; Wyman v. Wallace, 201 U. S. surance company no power to bor-
230; 26 Sup. Ct. 495 (as to powers row to pay liabilities).
of national banks) ; Bohn v, Boone * 1 Lindley on Companies, 6th
& Loan Ass'n (Iowa), 112 ed., 284, et seq.
' See infra, § 1061.
" In addition to cases cited below,
see Commonwealth v. Smith, 10
33 L. R. A. 99 ; Mead v. Keeler, 24 Allen (Mass.), 448 ; 87 Am. Dec. 672.
63
N. W. 199 (a building society)
Heironimus v. Sweeny, 83 Md. 146
34 Atl. 823 ; 55 Am. St. Rep. 333
§ 70 THE INCORPORATION PAPER [ChAP. II
where a special act of incorporation provided that the company
should have power to borrow on mortgage to an amount not
exceeding one third of the company's paid-up capital, any other
borrowing was held to be ultra vires} Indeed, express authority
to a railway company to borrow on mortgage has been declared
to be an impUed prohibition of borrowing without security.^
On the other hand, a clause in an incorporation paper pur-
porting to empower the company "to issue bonds secured by
mortgage or mortgages upon the property and franchises of said
corporation, and to sell the same for the purpose of raising
money with which to erect machinery " has been held not to be
an implied prohibition of borrowing money on mortgage other-
wise than by the issue of bonds and for a purpose other than
the erection of machinery.' This last cited case evinces what
is submitted to be the proper attitude towards such questions.
§ 70. Evasion of a Prohibition of Borrowing. — Even where
a corporation is expressly prohibited from borrowing, it may
often accomplish virtually the same result by an outright sale
of its property coupled with an agreement for a lease back to
the company for a period of years at a rental equal in the aggre-
gate to the purchase price and interest thereon, the title at the
end of the term to revert to the company.' Moreover, even where
a loan is effected in violation of a prohibition, valuable rights
may be acquired by the lender either upon the express contract
or quasi ex contractu?
§ 71. Power to Mortgage. — The power to bort-ow, wher-
ever it exists, or to create an indebtedness, carries with it the
power to secure the indebtedness by mortgage of some or all
of the company's property." The only qualification upon this
' Landowners' , etc. Drainage Co. Cf. Thatcher v. Consumers' Gas &
V. Ashford, 16 Ch. D. 411, 43&- Fuel Co. (N. J.), 66 Atl. 934 (where
437 (headnote inadequate) ; Wen- a statute purporting to empower
lock v. River Dee Co., 10 App. Cas. corporations to increase their bonded
354. indebtedness was held not to restrict
' Chambers v. Manchester, etc. Ry. by implication such corporations as
Co., 5 B. & S. 588. Cf. Cape Sable already enjoyed a more extended
Company's Case, 3 Bland Ch. (Md.), power of issuing bonds than was al-
606. A power to mortgage includes lowed in the statute).
power to borrow on mortgage * Yorkshire Ry. Wagon Co. v.
bonds. Oloninger v. Pittsburgh, etc. Maclure, 21 Ch. D. 309.
R. R. Co., 139 Pa. St. 13. » Cf. infra, § 118.
' Brown v. Citizens' Ice, etc. Co. ' Watts's Appeal, 78 Pa. St. 370 ;
(N. J.), 66 Atl. 181. Hopson v. Mna Axle, etc. Co., 50
64
§ 31-§ 162] POWERS IMPLIED § 72
statement is in the case of railways and other public service cor-
porations which, having no right to disable themselves from
performing their public duties by aliening their road-bed or
other necessary property, cannot lawfully create incumbrances
upon the same which in case of foreclosure may result in aliena-
tion.* Even a railway company, however, has implied power
to mortgage its surplus lands.^ A corporation that has power
to mortgage its property may execute a mortgage to secure future
advances.^ The extent to which express provisions conferring
a power to borrow on mortgage can be construed as prohibit-
ing any other or further mortgaging has been considered in a
former paragraph in connection with the power to borrow. An
express power to execute mortgages to secure the repayment
of borrowed money does not by implication exclude the power
to create mortgages to secure debts contracted otherwise than
for money lent.* Where the directors of a company have power
to mortgage but are prohibited from issuing bills of exchange,
a mortgage securing a bill of exchange representing an antece-
dent debt will be enforceable.'
§ 72. Power to mortgage uncalled Capital. — While the power
of a company to mortgage all its property and rights is in general
incident to the power to borrow, an exception has been thought
to exist in the case of one very peculiar right — the right to call
up unpaid capital. In a comparatively early English case, the
power of a corporation to create a charge upon future calls was
denied ; ° and while subsequent cases clearly hold that such a
charge is legal if authorized by the company's memorandum
Conn. 597 ; Booth v. Robinson, 55 acquired property, see infra, § 1853-
Md. 419, 436; Patent File Co., 6 § 1858.
Ch. 83 ; Bickford v. Grand Junction ' See Short on Railway Bonds
Ry. Co., 1 Can. Sup. Ct. Rep. 696, and Mortgages, §142.
729-732; Stisquehanna Bridge, etc. ' Imperial Mercantile Credit Ass'n
Co. V. General Ins. Co., 3 Md. 305; v. London, etc. Ry. Co., 15 W. R.
56 Am. Dec. 7 iO; BeU & Coggeshall 1187.
Co. V. Ky. Glass Works Co. (Ky.), " Jones v. Guaranty, etc. Co.,
50 S. W. 2 ; 20 Ky. Law Rep. 1684 ; 101 U. S. 622.
Thompson v. Lambert, 44 Jowa 239; * Allen v. Montgomery R. R. Co.,
Wright V. Hughes, 119 Ind. 324; 21 11 Ala. 437, 454.
N. E. 907 ; 12 Am. St. Rep. 412 ; « Scott v. Colburn, 26 Beav. 276.
Ward V. Johnson, 95 111. 215 ; East- ' Stanley's Case, 33 L. J. Ch. 535.
man v. Parkinson (Wise), 113 Cf. Sankey Coal Co. (No. 2), 10
N. W. 649. Eq. 381 ; Bank of South Australia
As to power to mortgage after- v. Abrahams, L. R. 6 P. C. 265.
VOL. I. — 5 65
§73
THE IXCOnrORATION' PAPER
[Chap. II
of association,' yet no case has decided that the power exists
in the absence of any express authority therefor in the com-
pany's constitution.^ In the United States, the question has
not often arisen.^ This is natural enough; for the practice of
carrying on business with a portion of the issued capital unpaid
is much rarer than in Great Britain. It has been held that no
power exists to mortgage an unpaid subscription to the com-
pany's capital where a statute empowers the company to mort-
gage its franchises and certain named kinds of property, not,
however, mentioning unpaid subscriptions.* At ail events, a
call which has been already determined upon but which is still
unpaid may be mortgaged to the same extent as any other debt
due to the company.^
§ 73. Power to issue Notes, Bonds, etc. — Another con-
comitant of the power to borrow is the power to give the lender
some written evidence of the debt, such, for instance, as a bond ; "
and, on principle, this evidence may be put in the most conven-
ient and available shape, that is, in the shape of a promissory
note or other negotiable instrument.' In England, however.
' Newton v. Anglo-Australian,
etc. Co. (1895), A. C. 244.
Cf. Phcenix Bessemer Co., 44 L. J.
Ch. 683; Tilbury Portland Cement
Co., 62 L. J. Ch. 814.
= But teee Jackson v. Rainford
Co. (1896), 2 Ch. 340, where a trad-
ing company whose memorandum
of association was silent on the sub-
ject of borrowing and whose articles
of association recognized a power to
borrow on bonds, debentures, "or in
such other manner as the company
may determine," was held to have
power to charge uncalled capital.
Cf. Coler V. Grainger County, 74
Fed. 16; 20 C. C. A. 267; Beal v.
Dillon, 5 Kans. App. 27; 47 Pac.
317; Lionberger v. Broadway Sav-
ings Bank, 10 Mo. App. 499; Epp-
right v. Nickerson, 78 Mo. 482;
Racine County Bank v. Ayers, 12
Wise. 512.
' See, however, American cases
cited in last note.
* Morris v. Cheney, 51 111. 451.
» Sankey Coal Co., 9 Eq. 721 ;
Gibbs <fc West's Case, 10 Eq. 312;
Wells V. Rodgers, 50 Mich. 294 ; 15
N. W. 462.
But see King v. Marshall, 33
Beav. 565; Morris v. Cheney, 51
111. 451.
' Smith V. Law, 21 N. Y. 296,
298-299 ; Commissioners of Craven
V. AUantic, etc. R. R. Co., 77 N. Can
289; Rockwell v. Elkhorn Bank, 13
Wise. 653 ; Barnes v. Ontario Bank,
19 N. Y. 152, 156 (headnote inade-
quate) ; Commonivealth v. Smith, 10
Allen (Mass.), 448; 87 Am. Dec.
672 ; Curtiss v. Leavitt, 15 N. Y. 1
(where the giving of certain forms
of evidences of indebtedness was
prohibited by statute).
' Fidelity Trust Co. v. Louisville
Gas Co., 81 S. W. 927, 26 Ky. L. Rep.
401 ; Dams v. West Saratoga Bldg.
Union, 32 Md. 285 ; Union Bank ■^.
Jacobs, 6 Humph. (Tenn.) 515;
Mead v. Keeler, 24 Barb. (N. Y.)
20 ; Fifth Ward Sav. Bank v. First
Nat. Bank, 48 N. J. Law 513 ; 7 Atl.
318; Ward v. Johnson, 95 111. 215.
GO
§ 31-§ 162] POWERS IMPLIED § 74
it is held that in general no corporation has the power to issue
negotiable paper unless expressly so authorized by statute or
by its memorandum of association ; although to this rule an
exception exists ex necessitate rei, in the case of companies en-
gaged in trade/ But in America the reasoning of these decisions
has been criticised, and the rule adopted that every corporation
that has power to borrow, whether it be organized for trading
purposes or not, has power to evidence the debt by its promis-
sory note, bill of exchange, or other negotiable instrument. Ac-
cordingly, we are relieved from considering the numerous de-
cisions in England and the British colonies upon the question
whether certain corporations are entitled to emit negotiable
paper or not. Where an express statute gives power to a rail-
way company to borrow money for construction of its road and
to secure the debt by mortgage of its property and franchises,
it may issue mortgage bonds as security for an indebtedness
antecedently incurred for that purpose.^ Where a corporation
has power to borrow by a sale of its bonds, it may borrow by
pledge of the bonds.'
§ 74. Power to issue Irredeemable Bonds or Debentures. —
The power to "borrow" on perpetual or irredeemable bonds
or other securities cannot readily be implied. In England, it
is held that perpetual debenture-stock * cannot be issued with-
out express authority in the company's memorandum of asso-
ciation. Indeed, a clause in the memorandum of association
expressly authorizing the company to borrow money by the issue
of debentures or debenture-stock will not justify the issue of
irredeemable debenture-stock; and hence the issue of such
security is ultra vires even though expressly sanctioned by
articles of association adopted and recorded contemporaneously
with such a. memorandum.^ The word "borrow" implies that
the money borrowed is sooner or later to be repaid. In Penn-
Note, however, that authority to ' 1 Lindley on Companies, 6thi
an agent to borrow money does not ed., 242, 243.
empower him to execute a negoti- ' Duncomb v. New York, etc. R. R.
able instrument in the principal's Co., 84 N. Y. 190, 200.
I ame for the amount borrowed; ' Farmers' L. & T. Co. v. Toledo,
Bangs v. Nai. Macaroni Co., 15 N. etc. R. R. Co., 54 Fed. 759.
Y. App. Div. 622; 44 N. Y. Supp. < See infra, § 1687.
546. Cf. Hatch v. Coddington, 95 ' Southern Brazilian, etc. Ry. Co,
U. S. 48. (1905), 2 Ch. 78.
67
§ 75 THE INCORPORATION PAPER [ChAP. II
sylvania, on the other hand, it has been held that irredeemable
bonds may be issued without express authority.'
§ 75- § 76. Power to acquire and hold Property.
§ 75. In general. — The power to acquire and hold such
real and personal property as may be advantageous for the
company's business is suflBciently implied by the law without
express mention either in the incorporation act or in the incor-
poration paper.^ The amount of property which the company
may acquire and hold is not at all limited by the- nominal
amount of its capital.^ The power extends to the acquisition
and holding of property in the customary and most beneficial
manner. Thus, a corporation, the period of whose existence is
limited to a term of years, may acquire the fee-simple title to
land.* And a railway corporation having occasion to take a
lease of real estate for its use may make the usual covenant to
insure the premises, and if it fail to do so may be held respon-
sible in case of fire for the amount of the loss.* To be sure,
the Statute of Wills," which first permitted testamentary dispo-
sition of legal title to real estate, by its express terms excepted
devises to corporations so that such devises remained void as
at common law.' Although this exception was maintained in
some of the early statutes of wilk in the United States,' it
^ Philaddphia, etc. R. R. Co.'a Ap- shares in other companies, Bee infia,
peal, 4 Am. & Eng. R. R. Cases, 118 § 81-§ 84.
(Pa.). ' Infra, § 577.
Contra: Taylor v. Philadelphia, * Infra, § 116.
etc. R. R. Co., 7 Fed. 386. » Jacksonville, etc. Ry. Co. v.
' Central Ohio Natural Gas & Hooper, 160 U. S. 514 ; 16 S. Ct. 379.
FiiM Co. V. Capital, etc. Dairy Co., As to the power of corporations to
60 Ohio St. 96; 53 N. E. 711; 64 make the usual covenants in leases,
L. R. A. 395 (manufacturing com- see Abby v. BUlups, 35 Miss. 618;
pany held to have power to purchase 72 Am. Dec. 143 (covenant to repair
entire business of an existing concern and to rebuild in case of fire),
including a claim for damages for a ° 34 Hen. YIII, c. 5.
tort) ; Jamieson & McFarland v. ' Grant on Corporations, 112.
Heim (Wash.), 86 Pac. 165 (power • McCartee v. Orphan Asylum
to purchase commercial paper); Soc., 9 Cow. (N. Y.), 437 (holding
Brown v. Winnisimmet Co., 11 Allen that statutory power to "purchase"
(Mass.), 326 (ferry company au- land does not confer power to take
thorized to acquire boats not needed by devise) ; Downing v. Marshall, 23
for present use) ; MaUett v. Simpson, N. Y. 366 (holding also that express
94 N. Car. 37 (real estate). statutory power to acquire land by
As to the power to purchase "purchase or qtherwise" puts the
68
§ 31- § 162] POWERS IMPLIED § 76
has been omitted in the English Wills Act of 1837 ' and gener-
ally in the statutes of wills now in force in America,^ so that
corporations are now as competent to acquire land by devise as
in any other way. The restriction upon devises to corpora-
tions wherever it exists is absolute and could hardly be de-
feated even by an express clause in the incorporation paper
mentioning the acquisition of real estate by devise as one
of the objects of the company. Indeed, the incapacity under
the Statute of Wills was not so much that of the corporation
as of the testator. Equitable interests in real estate have
always been devisable ^ without the aid of any statute, and
therefore might always be devised to corporations;* and so
also personal property including chattels real might always be
bequeathed to corporations.
§ 76. Power to hold as Joint-tenant or in Common. — It
is generally suMj^ed that at common law a corporation could
not hold propH^in joint tenancy either with another corpora-
tion or with an individual.' The essential characteristic of joint
tenancy — namely the right of survivorship — cannot exist in
the case of corporations. This rule has been abolished in Eng-
land by express statute." Where no such statute exists, it would
seem useless to express in an incorporation paper the holding
of property as joint tenant as one of the objects of the company.
The objection is inherent in the nature of a corporation, and
not even under the most liberal incorporation laws can a com-
pany be incorporated for the purpose of doing what the law re-
gards as an impossibility. There is no objection to a corporation
corporation on the same footing as tions, § 178; 1 Morawetz on Priv.
natural persons in respect to capac- Corps., § 331.
ity to take by devise). ' Law Guarantee Soc. v. Bank of
As to the effect of such provisions England, 24 Q. B. D. 406 ; Bacon
upon devises of land in a state whose Abr. Tit. "Joint-tenants and Ten-
laws permit devises to corporations ants in Common," B ; DeWitt v.
which are authorized to take, see San Francisco, 2 Cal. 289, 297
Starkweather v. Am. Bible Soc, 72 (semble) ; Telfair v. Howe (S. Car.),
III. 50 ; Thompson v. Swoope, 24 Pa. 3 Rich. Eq. 235 ; 55 Am. Dec. 637 ;
St. 474. Freeman on Cotenancy and Parti-
' 1 Vict., c. 26. tion, 2d ed., § 15 (questioning reason
' Stimson's Am. Stat. Law, § of rule).
2610. » "Bodies Corporate Joint Ten-
' 1 Sanders on Uses, 64. ancy Act, 1899," 62 and 63 Vict.,
' Cf. Angell & Ames on Corpora- c. 20.
§77
THE INCOHPORATION PAPER
[Chap. II
owning property as tenant in common.' Indeed, in America,
it is not uncommon for a trust company to become a co-trustee
with an individual,^ and upon the death of the individual trustee
the trust is generally supposed to devolve exclusively upon the
corporation by survivorship.
§ 77- § 79. Power of Alienation.
§ 77. In general. — Except in the case of public-service cor-
porations^ the implied powers of alienation are ample without
any supplement from express provisions.' The only qualifica-
tion to this statement, with respect to ordinary industrial cor-
porations, is the case ^^^^aleof the entire property, business,
a,nd undertaking of th^^i^H^^M^^^^case has been con-
sidered above at some length^^MmH^^^Mter treated pres-
ently." The implied power to alien ateesSJI^^^^e most usual
method of transfer. Thus, a corporation w^^^Hkis negotiable
paper may transfer the same by indorsement, T^^^ fortiori may
couple the sale with an express guarantee of payment.' So, a
corporation on assigning a mortgage may guarantee payment
of the mortgage debt.* Moreover, a corporation may lease its
' De Witt V. San Francisco, 2
Cal. 289 ; Estell v. University of the
South, 12 Lea (Tenn.), 476; Hackett
V. Mvltrwmdh Ry. Co., 12 Oreg. 124 ;
6 Pac. 659 ; 53 Am. Rep. 327 (co-
ownership of a ferry-franchise).
Cf. Calvert v. Idaho Stage Co., 25
Oreg. 412 ; 36 Pac. 24.
' Cf. Thompson v. Alexander
(1905), 1 Ch. 229 (holding that, in
consequence of the "Bodies Corpo-
rate Joint Tenancy Act," a corpora-
tion may be appointed co-trustee
with an individual) ; Crowley v.
Sandhurst, etc. Co., 23 Vict. L. R. 661
(holding that corporation may act
as co-trustee with individuals in con-
sequence merely of parliamentary
authority to act as trustee and with-
out any authority to act as joint-
tenant). Cf. Pennsylvania Co. for
Ins. V. Bauerle, 143 111. 459.
' As to this, see Baldwin's Am.
Railroad Law, 448 et seq.
* KingsburyCollieries and Moore's
Coniraci (1907), 2 Ch. 259; Binney's
Case, 2 Bland Ch. (Md.) 99.
' Supra, § 54-§55.
' Infra, § 78.
' People's Bank v. National Bank,
101 U. S. 181 ; Fidelity Trust Co. v.
LouisoiUe Gas Co., 81 S. W. 927; 26
Ky. L. Rep. 401 ; Roosevelt v. Nash-
ville, etc. Ry. Co., 128 Fed. 465 (head-
note misleading) ; Lloyd & Co. v.
Matthews, 119 111. App. 546 (in-
dorsement of note of debtor for the
purpose of enabling the latter to
obtain money for payment of debt
by negotiating or discounting the
note), affirmed in 223 111. 477; 79
N. E. 172; 7 L. R. A., n. s., 376;
Broadway Nat. Bank v. Baker, 176
Mass. 294 ; 57 N. E. 603.
Cf. infra, § 91.
' Blair v. Metropolitan Savings
Bank (Wash.), 67 Pac. 609; 27
Wash. 192.
70
§ 31-§ 162] POWERS IMPLIED § 78
surplus real estate and agree to pay the lessee at the end of the
term the reasonable value of any buildings erected by him on
the demised premises.'
§ 78. Sale of entire Property and Business. — We have seen
above that a sale of the entire business or undertaking and of
all the property of a corporation which has no public duties to
perform is a lawful purpose and may therefore properly be
specified as one of the objects of a company incorporated under
the liberal modern laws.^ It would seem clear, however, that
even under the modern liberal general incorporation laws a sale
of the company's entire business (unless it be necessary to secure
creditors) will be vltra vires unless the incorporation paper speci-
fies such a sale as one of the objects of^the company.^ This
conclusion would seei^^^o^^M^flPiy from the well estab-
lished rule tha^^^^^^Hpi^porated by special acts have
no implied po^^^BpB^^r all their business and property ex-
cept for the J^^Hrof creditors. It has been held that a pro-
vision in anii|PP^oration paper authorizing a sale of all the
company's property will not justify a sale of all the company's
property and "franchises" except the franchise to be a corpora-
tion.* This limitation or qualification upon the general implied
power of alienation is, however, very narrowly restricted, for
a company has the implied power to sell out its works or plant
for the purpose of acquiring others.^ Thus, a hotel company
has the implied power to sell its hotel and purchase another."
■ Hollywood V. First Parish in sumers' Gas Trust Co., 144 Fed. 640;
Brockton, 192 Mass. 269, 277. 75 C. C. A. 442 ; Anderscm v. Shaw-
' Supra, § 54-§55. nee Compress Co. (Okl.), 87 Pac. 315
' People V. Ballard, 134 N. Y. (lease of all company's property held
269; 32N. E.54; 17L. R. A. 737; to be authorized by implication
Parsons v. Tacoma Smdting, etc. Co. where continuation of the business
65 Pac. 765 ; 25 Wash. 492 (lease is not profitable),
instead of sale) ; Hunt v. American * Coler v. Tacoma By., etc. Co.
Grocery Co., 81 Fed. 532; Byrne v. (N. J.), 54 Atl. 413; 65 N. J. Eq.
Schuyler, etc. Mfg. Co., 65 Conn. 336; 347; 103 Am. St. Rep. 786 (note
31 Atl. 833 ; 28 L. R. A. 304. Cf. that this company was a public-
Easun v. Buckeye Brewing Co., 51 service corporation).
Fed. 156. " In addition to cases cited below,
But see Wilson v. Miers, 10 C. B., see Ritchie v. Vermillion Mining Co.,
N. s., 348; Bartholomew v. Derby 4 Ont. L. R. 588 (sale by mining
Rubber Co., 69 Conn. 521; 38 Atl. company of its mine).
45 ; 61 Am. St. Rep. 57 (lease with ° Freeman v. Sea View Hotel Co.,
privilege of purchase sustained). 57 N. J. Eq. 68 ; 40 Atl. 218.
Cf. City of. Indianapolis v. Con-
71
§ 79 THE INCORPORATION PAPER [ChAP. II
So, a sale by a steamboat company of its only boat is intra vires
although there be no express power of alienation/ Moreover,
as already intimated, a corporation in failing circumstances
has implied power to make a general assignment for the benefit
of creditors,^ or may sell all its property and business for the
purpose of obtaining money to pay creditors.^
§ 79. Sale of Business in exchange for Shares in purchasing-
Corporation. — - A clause authorizing a sale of the company's
business and undertaking does not justify a transfer of the busi-
ness in exchange for shares in the purchasing company, certainly
not if the shares are to be issued not to the vendor corporation
but to its several members.* Such an arrangement is not a sale
but is more in the nature of a consolidation or amalgamation.*
Even an express provision in an incorporation paper authoriz-
ing a sale of the company's business and undertaking in ex-
change for shares in another company will^ot sustain an
agreement whereby the sale is to be made in e^^Bge for partly
paid shares in the vendee company with a s^Hation that, in
the event of a winding-up of the vendor company involving a
distribution of the partly paid shares among the shareholders of
the old company, any of the partly paid shares which should be
distributable to a shareholder in the vendor company and which
he should refuse to accept should be sold and applied in pay-
ment of debts of the vendor company, which by the terms of
the contract the purchasing company was to assume."
' Leathers v. Janney, 41 La. Ann. the transferee company) ; Taylor v.
1120; 6 So. 884; 6 L. R. A. 661. Burlington Cotton Mills, 8 Hun
' Cf. Du-puy V. Terminal Co., 82 (N. Y.) 1 ; Elyton Land Co. v. Dow-
Md.408. See also infra, § 1435, as to deU, 113 Ala. 177; 20 So. 981; 59
the powers of directors to authorize Am. St. Rep. 105.
such an assignment. But see Traer v. Lucas Prospect-
' Phillips V. Providence Steam En- ing Co., 99 N. W. 290 ; 124 Iowa 107 ;
jineCo.,21R. I. 302. Cf. infra, §1435. Treadwell v. Salisbury Mfg. Co., 7
* Dougan's Case, 8 Ch. 540. Gray (Mass.) 393, 404-406; 66 Am.
Cf . Forrester v. Boston, etc. Mining Dec. 490 ; Metcalf v. A merican
Co., 21 Mont. 544, 560-564; 55 Pac. School FurnitMre Co., 122 Fed. 115.
229, 353 ; Easun v. Buckeye Brewing .See also supra, § 61.
Co., 56 Fed. 156; Post v. Beacon, = See supra, § 61.
etc. Co., 84 Fed. 371 ; 28 C. C. A. 431 " Manners v. St. Davids Gold, etc.
(where complainant shareholders Co. (1904), 2 Ch. 593.
had waived their right to object, by Cf. Fuller v. White Feather Re-
subscribing, though under protest, ward (1906), 1 Ch. 823 ; Bisgood v.
to their proportion of the shares of Nile Valley Co. (1906), 1 Ch. 747.
72
§ 31-§ 162] POWERS IMPLIED § 81
§ 80. Power to abandon some of Company's Objects. —
Somewhat akin to the sale of a company's business is the aban-
donment of part of its objects for the purpose of devoting its
funds exclusively to the remainder. This is generally permis-
sible even without any explicit authorization in the incorpora-
tion paper.* Thus, where the objects of a company were stated
to be the erection and maintenance of a brewery or breweries
in Brighton and also the purchase of a brewery known as the
North Street Brewery, the company may purchase a brewery
known as the Brighton Brewery, although the consummation
of such purchase will so deplete its funds as to preclude forever
the purchase of the North Street Brewery.^ On the other hand,
a corporation which was formed under a special act for the pur-
pose of constructing a railway from E. to P. and which was con-
templating constructing only a small portion of that line —
namely, from E. to L. — was enjoined, on a shareholder's bill,
from applying its funds to the construction of that portion only,
— that is, without any intention of completing the whole line.'
Moreover, a corporation cannot by contract bind itself not to
exercise powers conferred upon it by its incorporation paper : *
to do so would limit and therefore alter the incorporation paper.
If any such contract were clearly authorized by the incorpora-
tion paper itself, this objection would vanish; unless indeed
such a provision should be held invalid under the principle that
a clause in the incorporation paper authorizing the company
to alter the instrument otherwise than as by statute allowed is
void.^
§ 81- §84. Power to become Member of another Corporation —
to purchase Shares in another Company.
§ 81. In general. — Another power which it is often de-
sirable to exercise and about the existence of which question
' Illinois Trust, etc. Co. v. Doud, Cf. Hodgson v. Poms, 12 Beav.
105 Fed. 123, 128-129 ; 44 C. C. A. 392 ; Graham v. Birkenhead, etc. Ry.
389; 52 L. R. A. 481; Thellussonv. Co., 2 Mac. & G. 146; Bagshawe v.
Viscount Valentia (1906), 1 Ch. 480, Eastern Union By. Co., 2 Mac. &
affirmed in (1907), 2 Ch. 1. G. 389.
' Syers v. Brighton Brewery Co., * Foster v. Borax Co. (1901), 1
13 W. R. 220. Ch. 326, 342 (semble) ; per Vaughan
' Cohen v. Wilkinson, 1 Mac. & Williams, L. J.
G. 481. « See infra, § 144.
73
§ 82 THE INCORPORATION PAPER [ChAP. II
is often raised is the power to acquire and hold shares in another
corporation. Although the cases on this subject are far from
harmonious, yet certain principles in regard to it are established
by the substantial consensus of authority. We have seen above
that this power may lawfully be enjoyed by a corporation, and
hence may be made one of the expressed objects of incorpora-
tion under laws which allow companies to be incorporated for
any lawful purposes. Whether the power exists, and to what
extent, is entirely a question of construction of the incorpo-
ration paper.
§ 82. When the Power may be implied. — It is clear that
in some cases the power may be implied without express lan-
guage. In the first place, any corporation having power to lend
money may accept shares in another corporation as collateral
security,' and may in order to render the security as effective as
possible become the registered holder of the shares either before ''
or after ' default on the borrower's part. Secondly, any cor-
poration may accept shares in another company in discharge
of a debt for which satisfaction can be obtained in no other way,*
and that too even though a statute expressly prohibits the pur-
' Royal Bank of India, iCh. 252; Cf. Franklin Co. v. Lewiston
National Bank v. Case, 99 U. S. 628, Institution, 68 Me. 43 ; 28 Am.
633 (headnote inadequate) ; Knowles Rep. 9.
\. Sandercock, 107 Cal. 629, 643; ' National Bank v. Case, 9Q U.S.
40 Pac. 1047 (semble) ; Calumet 628 (headnote inadequate).
Paper Co. y. Investment Co., 96 lowB. * First Nat. Bank v. Nat. Ex-
147 ; 64 N. W. 782 ; 59 Am. St. Rep. clmnge Bank, 92 U. S. 122, 128
362 ; Shoemaker v. Nat. Mechanics (semble) ; Fidelity Insurance Co. v.
Bank, 2 Abb. (U. S.) 416. German Savings Bank, 127 Iowa 591 ;
But there is a presumption 103 N. W. 958; Westminster Nat.
against any intent on the part of the Bank v. New England Electric Works,
creditor corporation to make itself 62 Atl. 971 ; 73N. H. 465; 111 Am.
owner of the hypothecated shares: St. Rep. 637; Howe v. Boston Car-
Robinson V. Southern Nat. Bank, 180 pet Co., 16 Gray (Mass.) 493; Lati-
V. S. 295 ; 21 S. Ct. 383. mer v. Citizens' State Bank, 102 Iowa
A bank on making a loan cannot 162 ; 71- N. W. 225 ; First Nat.
accept shares as a bonus: Nassau Bank of Charlotte v. Nat. Exchange
Bank v. Jones, 95 N. Y. 115 ; 47 Am. Bank, 39 Md. 600.
Rep. 14. See also Lands Allotment Co.
' Royal Bank of India, 4 Ch. 252; (1894), 1 Ch. 616; Merchants' Nat.
Calumet Paper Co. v. Slotts Invest- Bank v. Wehrmann, 202 U. S. 295 ;
ment Co., 96 Iowa 147; 64 N. W. 26 S. Ct. 613.
782 ; 59 Am. St. Rep. 362 ; Victorian But see First Nat. Bank v. Con-
Mtge., etc. Bank y. Australian Finan- verse, 200 U. S. 425; 26 S. Ct.
cial, etc. Co., 19 Vict. L. R. 680. 306.
74
§ 31-§ 162] POWERS IMPLIED § 83
chasing of stock in other corporations.' Moreover, in com-
promise of a disputed claim any corporation may pay a larger
sum than would otherwise be exacted in consideration of the
transfer to it of shares in another company, that arrangement
being reasonably deemed the most advantageous settlement
practicable.^ Moreover, a corporation has incidental or implied
power to insure its property with a mutual insurance company
and thus become a member of the latter corporation.^ So, too,
a corporation may perhaps have power to invest any surplus
funds in some safe stocks, not for speculation, but merely for
safe-keeping at a fair interest.* For if a company has on hand
surplus funds which for the time being are not needed in its
business, is it bound to keep them on deposit at its bankers?
May it not invest them temporarily in any safe securities?
And if so, why not in shares of stock in other corpora-
tions? The only reason that can be assigned is that the
transition to mere speculation is so easy.
§ 83. When not implied. — Except in the instances above
enumerated, and in similar cases, the power to purchase shares
in other companies is not readily implied. According to some
courts, if their language is to be construed literally, the power
does not exist unless conferred by express language ; ^ but this
' Holmes, etc. Mfg. Co. v. Holmes, American Bank, 132 Fed. 658 ; 65
etc. Metal Co., 127 N. Y. 252; 27 C. C. A. 620; affirmed short in 199
N. E. 831; 24 Am. St. Rep. 448. U. S. 603; 26 S. Ct. 750; Scho-
' First Nat. Bank v. Nat. Ex- field v. Goodrich Bros. Banking Co.,
change Bank, 92 U. S. 122. 98 Fed. 271 ; 39 C. C. A. 76 ; Bank
--y ' St. Paul Trust Co. v. Wampach of Commerce v. Hart, 37 Nebr. 197 ;
/aT/j. Co., 50 Minn. 93; 52N.W.274. 55 N. W. 631; 40 Am. St. Rep.
* Cf. Joint Stock Discount Co. v. 479 ; 20 L. R. A. 780 ; City of Good-
Brown, 3 Eq. 139, 147-148; Pear- land v. Bank of Darlington, 74 Mo.
son V. Concord R. R. Co., 62 N. H. App. 365 (semble). People v. Chi-
637, 549; 13 Am. St. Rep. 590; cofiro Gas Tresi Co., 130 111. 268, 283-
Burland v. Earle (1902), A. C. 83, 284; 22N. E. 798; 17 Am. St. Rep.
95-97 (headnote inadequate) ; Booth 319 ; 8 L. R. A. 497 ; Concord First
V. Robinson, 65 Md. 419, 433; Nat. Bank v. Hawkins, 174 U. S.
Knowles v. Sandercock, 107 Cal. 364; 19 Sup. Ct. 739.
629, 643 ; 40 Pac. 1047 ; Robotham ' Knowles v. Sandercock, 107 Cal.
V. Prudential Ins. Co., 64 N. J. Eq. 629, 642; 40 Pac. 1047; Holmes,
673, 687-689, 696; 53 Atl. 842; etc. Mfg. Co. v. Holmes, etc. Metal
Farmers' L. & T. Co. v. Perry, 3 Co., 127 N. Y. 252,257; 27 N. E.
Sandf. Ch. (N. Y.) 339, 347-348; 831; 24 Am. St. Rep. 448 ; Commer-
Hodges v. New England Screw Co., dial Fire Ins. Co. v. Board of Revenue
1 R. I. 312, 347. Montgomery County, 99 Ala. 1 ; 14
But see Shaw v. Nat. German- So. 490 ; 42 Am. St. Rep. 17 ; Byrne
75
83
THE INCOEPORATION PAPER
[Chap. II
view seems to lay undue stress on mere phraseology, and is op-
posed to the weight of authority. Thus, where one of a com-
pany's objects is to assist in forming other corporations, it may
furnish assistance by purchasing shares of their capital.' Some
cases seem to go to the extent of holding that any corporation
(unless positively prohibited) may purchase shares in other
companies having the same or connected objects ; ''■ but the
weight of authority does not support this extreme position.*
Indeed, it has been held that power to purchase the business of
other companies does not include power to accept a transfer of
V. Schuyler, etc. Mfg. Co., 65 Conn.
336; 31 Atl. 833; 28 L. R. A. 304;
Oelbermann v. New York, etc. Ry.
Co., 77 Hun (N. Y.), 332; 29 N. Y.
Supp. 545.
Authority to purchase "the capi-
tal stock" of certain corporations
includes authority to purchase shares
of stock in those companies. People
v. Chicago Gas Trust Co., 130 111. 268,
281 (semble) ; 22 N. E. 798 ; 17 Am.
St. Rep. 319 ; 8 L. R. A. 497.
1 Peruvian Ry. Co., 19 L. T. 803.
' Booth V. Robinson, 55 Md. 419;
Davis V. U. S. Electric, etc. Co., 77
Md. 35 ; 25 Atl. 982 ; Joseph Barw
croft & Sons Co. v. Bloede, 106 Fed.
396; 45 C. C. A. 354; 52 L. R. A.
734; Canada Life Ass. Co. v. Peel
Gen. Mfg. Co., 26 Grant (Can.) 477.
Cf. HUl V. Nisbet, 100 Ind. 341 ;
Rochester, etc. R. R. Co., 110 N. Y.
119, 125; 17 N. E. 678.
As to purchasing the stock of a
rival company to prevent competi-
tion, see Ellerman v. Chicago Junc-
tion Rys., etc. Co., 49 N. J. Eq. 217,
245, 246 ; 23 Atl. 287 and supra, § 60,
and infra, § 302.
° California Bank v. Kennedy,
167 U. S. 362 ; 17 Sup. a. 831 ; De
La Vergne, etc. Co. v. German Sav-
ings Institution, 175 U. S. 40 ; 20
Sup. Ct. 20; People v. Chicago Gas
Trust Co., 130 111. 268; 22 N. E.
798; 17 Am. St. Rep. 319; 8 L. R.
A. 497 (stated supra, § 52) ; Pearson
V. Concord R. R. Co., 62 N. H. 537;
13 Am. St. Rep. 590 ; Central R. R.
Co. V. Collins, 40 Ga. 582 ; Easun v.
Buckeye Brewing Co., 51 Fed. 156;
Lester v. Bemis Lumber Co., 74 S. W.
518; 71 Ark. 379; Schofield v. Good-
rich Bros. Banking Co., 98 Fed. 271 ;
39 C. C. A. 76; Berry v. Yates, 24
Barb. (N. Y.) 199, 210-213; Mil-
bank V. New York, etc. R. R. Co., 64
How. Pr. (N. Y.) 20; Marble Co. v.
Harvey, 92 Tenn. 115 ; 20 S. W. 427 ;
18 L. R. A. 252 ; New Orleans, etc.
S. S. Co. V. Ocean Dry Dock Co., 28
La. Ann. 173 ; 26 Am. Rep. 90 ; Peo-
ple ex rel. Moloney v. Pullman Car
Co., 175 111. 125; 51 N. E. 664; 64
L. R. A. 366; Newland Hotel Co. v.
Lowe Furniture Co., 73 Mo. App.
135 ; Ex parte Liquidators of British
Nation Life Ass. Ass'n, 8 Ch. D. 679,
704 ("The more or less similarity of
the objects, or even the absolute
identity of the objects, does not
affect the principle").
Cf . Mackintosh v. Flint, etc. R. R.
Co., 34 Fed. 582, 614-615.
See also Hadehurst v. Savannah,
etc. R. R. Co., 43 Ga. 13, 57-58 (hold-
ing that a company organized to
construct and operate a railway from
M. to B. has no implied power to
purchase shares in a railway having
different termini) ; Pauly v. Coro-
nado Beach Co., 56 Fed. 428 (com-
pany formed to develop real estate
no power to subscribe to shares in a
manufacturing company) ; Nassau
Bank v. Jones, 95 N. Y. 115 ; 47 Am.
Rep. 14 (bank without power to sub-
scribe to shares of railway company).
76
§ 31-§ 162] POWERS IMPLIED § 84
their shares.' On the other hand, a power to effect a "tem-
porary or permanent " consoUdation with ■ any railway com-
pany justifies a purchase of all the shares of capital stock of a
railway company.^ Moreover, an express power to assist and
participate in financial, commercial, and industrial operations
and undertakings both singly and in connection with other
persons, firms, companies, and corporations will authorize the
purchase of shares in other companies.^ A bank has no power
to aid in the incorporation of a correspondent by subscribing to
its shares, although thereby it is hoped to benefit, indirectly, the
subscribing bank by increasing the prosperity of the correspond-
ent.' A corporation which has power to borrow money has no
implied power to subscribe to stock in a building and loan asso-
ciation for the purpose of obtaining a loan.^ Probably, all au-
thorities agree that a corporation cannot engage in speculation
in stocks, unless such speculation is one of the expressed objects
for which the company is incorporated." From these various
cases, it is apparent that a wise draftsman of an incorporation
paper will often insert a clause mentioning the purchase of
shares in other companies as one of the express objects of the
company.
§ 84. Efiect of Clause specifying Acquisition of Shares in other
Corporations as one of Objects. — Even an express power to
purchase shares in other companies must be confined to the
purchase of shares from their former owners and will not au-
thorize a subscription to new shares.' If the corporation has
' British Nation Life Ass. Ass'n, Royal Bank of India's Case, 4 Ch.
8 Ch. D. 679. 252, 262 (semble) ; Peshtigo Co. v.
' Tod V. Kentucky Union Ry. Co., Great Western Tel. Co., 50 111. App.
57 Fed. 47 ; 62 Fed. 335 ; 6 C. C. A. 624 ; New Orleans, etc. S. S. Co. v.
47. Ocean Dry Dock Co., 28 La. Ann.
' Financial Corp., 28 W. R. 760. 173; 26 Am. Rep. 90; Nebraska
' Joint Stock Discount Co. v. Shirt Co. v. Horton, 93 N. W. 225 ;
Brown, 3 Eq. 139 (headnote inade- 3 Nebr. (Unof.) 888; Sumner v.
quate), afiBrmed 8 Eq. 381. Marcy, 3 Woodb. & M. 105 ; Knowhs
Cf. Pavly V. Coronado Beach Co., v. Sandercock, 107 Cal. 629 ; 40 Pac.
56 Fed. 428. 1047.
« Mutual Savings, etc. Ass'n v. Cf. Talmage v. Pell, 7 N. Y. 328
Meridan Agency Co., 24 Conn. 159. (dealing by a bank in public stocks).
' First Nat. Bank v. Nai. Ex- ' Robotham v. Prudential Ins.
change Bank, 92 U. S. 122, 128 (sem- Co., 64 N. J. Eq. 673, 685-687, 696;
ble) ; California Bank v. Kennedy, 53 Atl. 842 ; Commercial Fire Ins.
167 U. S. 362; 17 Sup. Ct. 831; Co. v. Board of Revenue Montgomery
77
§ 85 THE INCOEPOKATION PAPER [ChAP. II
power to subscribe for or in any way acquire shares in another
company, it may subscribe for or purchase shares to which a
liability is attached,' and consequently a shareholder cannot
enjoin the company from subscribing for shares to be issued
as fully paid upon payment of less than the par value.^ A power
to purchase shares or to "take stock" in other companies does
not authorize a sale of the entire business to another corporation
in exchange for shares in the latter company to be distributed
fro rata among the shareholders of the former company.^ The
power to acquire shares carries with it the power to exercise
such rights of ownership as the right to vote.* But it does not
authorize such manipulation of the subsidiary company as will
make it the dominant or holding company,^ nor does it author-
ize the acquisition of shares in pursuance of a scheme to create
a monopoly."
§ 85. Power to Promote other Corporations. — Somewhat akin
to the power to purchase or subscribe for shares in other
companies is the power to promote other corporations.^ The
latter power may be implied from authority to engage in general
monetary or financial enterprises,' or perhaps from the expres-
sion of dealing in securities of other companies as one of the
objects of the corporations ; " but the part of caution is to men-
tion it expressly among the objects of the company, if its exercise
County, 99 Ala. 1 ; 14 So. 490 ; 42 ' Bigelow v. Calumet, etc. Mining
Am. St. Rep. 17 (where the power Co., 155 Fed. 869. And see supra,
Was to invest in stocks). § 60, and infra, § 302.
But see Rubino v. Pressed Steel ' McAlester Mfg. Co. v. Florence
Car Co. (N. J.), 53 Atl. 1050. CoUon, etc. Co., 128 Ala. 240 ; 30 So.
'■ Mason v. Motor Traction Co. 632 (as to becoming an original sub-
(1905), 1 Ch. 419; Bisgood y. Nile scriber for shares in a new corpor-
Valley Co. (1906), 1 Ch. 747, 758 ation).
(semble), per Kekewich, J. ' London Financial Ass'n v.
= Rvbino v. Pressed Sted Car Co. Kdk, 26 Ch. D. 107.
(N. J.), 53 Atl. 1050. But see Cause v. Commonwealth
' Elyton Land Co. v. Dowddl, 113 Trust Co., 106 N. Y. Supp. 288
Ala. 177 ; 20 So. 981 ; 59 Am. St. (where a contract in the nature of a
Rep. 105. Cf. supra, § 79 and § 61. contract of underwriting was held
* Infra, § 1231. ultra vires of a trust company).
' Robinson v. Holbrook, 148 Fed. " Rubino v. Pressed Steel Car Co.
107, stated infra, § 85. (N. J.), 53 Atl. 1050. Cf. supra, § 84.
78
§ 31-§ 162] POWERS IMPLIED § 86
is thought desirable. A corporation formed for the purpose of
manufacturing and of selHng its products, and authorized to
hold shares in other corporations, may, it has been held, organize
subsidiary corporations to act as distributing agencies.' The
opinion has been judicially expressed that a power to acquire
shares in another corporation does not justify the use of the
controlling interest in a subsidiary corporation for the purpose
of largely increasing the capital of the subsidiary company by
the issue of new shares to be offered to the shareholders of the
controlling company in exchange for their shares in the latter
company :^ the effect of consummating the scheme would be to
convert the subsidiary company into a holding company and to
vest in it the control of the originally dominant company.
§ 86. Power to become Member of Partnership. — The
power to become a member of a partnership is one which in
general is foreign to the nature of a corporation; for the other
partner would have the power to bind the corporation in the
course of its business and thus virtually to supersede the ma-
chinery provided by law, consisting of directors, officers, and
shareholders, for the management of the corporate business.
Consequently, one may well dpubt whether even under the;
most liberal incorporation laws, a clause specifying the forma-
tion of partnerships as one of the objects of the company would
be legal. At any rate, without clear affirmative authority, no
corporation has power to become a member of a partnership,^
' Ditmann v. Distilling Co., 54 Canal Co. v. Fvlton Bank, 7 Wend.
Atl. Rep. 570 (N. J. Ch.). (N. Y.) 412 (semble) ; Sabine Tram
But cf. Lagrone v. Timmerman, Co. v. Bancroft & Sons, 16 Tex. CSv.
46 S. Car. 372, 410-411; 24 S. E. App. 170; 40 S. W. 837; Ex parte
290. Liquidators of British Nation Life
2 Robinson v. Holbrook, 148 Fed. Ass. Ass'n, 8 Ch. D. 679, 704 ; Peo-
107. pie V. North River Sugar Refinery,
' WhUtenton Mills v. Upton, 10 121 N. Y. 582 ; 24 N. E. 834 ; 18
Gray (Mass.) 582 ; 71 Am. Dec. Am. St. Rep. 843 ; 9 L. R. A. 33.
681 ; MaUory v. Hanaur Oil Works, Cf. Charlton v. Newcastle, etc. Ry.
86 Term. 598; 8S. W. 396; Gunny. Co., 5 Jur. N. S. 1096; Butler v.
Central R. R., etc. Co., 74 Ga. 509; American Toy Co., 46 Conn. 136
Marine Bank v. Ogden, 29 111. 248; (where the corporation was author-
Bishop V. American Preservers Co., ized to form the partnership by the
157 111. 284 ; 41 N. E. 765 ; 48 Am. special act of incorporation) ; Cleve-
St. Rep. 317; Boyd v. American land Paper Co. v. Courier Co., 67
Carbon Black Co., 182 Pa. St. 206; Mich. 152; 34 N. W. 556 (where it
37 Atl. 937; Burke v. Concord Rail- was said that "a corporation may,
road, 61 N. H. 160 ; New York, etc. in furtherance of the object of its
79
§87
THE INCORPORATION PAPER
[Chap. II
or to accept, even in satisfaction of a debt, shares in an unin-
corporated company, which in the eye of the law is a mere part-
nership.^ These objections do not apply to a temporary
partnership formed by the creditors of an insolvent debtor for
the purpose of minimizing their loss by carrying on the debtor's
business so as to realize as much as possible from his assets,^ or
to an agreement for pooling of earnings and expenses,^ or to a
mere joint contract in a single transaction,^ or to a contract to
give an employee a share in the company's profits in lieu of
salary.^
§ 87- § 90. Power to contribvte to Public Objects, recognize
Moral Obligations, etc.
§ 87. In general. — As all business corporations are formed
for the acquisition of gain, they have no power, out of mere gen-
creation, contract with an individ-
ual, though the effect of the contract
may be to impose upon the com-
pany the liability of a partner " ) ;
Ontario Salt Co. v. Merchants Salt
Co., 18 Grant Ch. (Up. Can.) 540
(agreement between manufacturing
companies to sell exclusively to
trustees of a syndicate held not
vltra vires) ; Allen v. Woonsocket
Co., 11 R. I. 288; Calvert v. Idaho
Stage Co., 25 Oreg. 412 ; 36 Pac. 24
(holding that a corporation has im-
plied power "to become a co-owner
with an individual in a business or
enterprise within the scope of its
corporate powers ") ; Hackett v.
Multnomah Ry. Co., 12 Oreg. 124;
6 Pac. 659 ; 53 Am. Rep. 327 (joint
ownership and operation of a ferry) ;
Breinig v. Sparrow (Ind.), 80 N. E.
37 (as to liability to third persons) ;
Roedde v. News- Advertiser Pub. Co.,
4 Brit. Columb. 7 (where only one
of the judges held that a partner-
ship was vltra vires).
A fortiori, a corporation has no
power to enter into a partnership
for carrying on a business that would
be ultra vires if conducted by the
corporation itself. Central R. R.,
etc. Co. v. Smith, 76 Ala. 572; 52
Am. Rep. 353.
' Merchants' Nat. Bank v. Wehr-
mann, 202 U. S. 295; 26 Sup. Ct.
613.
Cf. Ex parte Liquidators of Brit-
ish Nation Ldfe Ass. Ass'n, 8 Ch.
D. 679.
= Kdley v. Biddle, 180 Mass. 147 ;
61 N. E. 821.
But cf. First Nat. Bank v. Con-
verse, 200 U. S. 425 ; 26 Sup. a. 306.
' White Star Line v. Star Line
(Mich.), 105 N. W. 135 ; 141 Mich.
604 ; 113 Am. St. Rep. 551 (semble).
Cf. Catskill Bank v. Gray, 14
Barb. (N. Y.) 471 ; Bates v. Coro-
nado Beach Co., 109 Cal. 160, 162-
163 ; 41 Pac. 855.
* Marine Bank v. Ogden, 29 111.
248 (semble).
Cf. Bates v. Coronado Beach Co.,
109 Cal. 160, 162-163; 41 Pac. 856;
Chicago, etc. Ry. Co. v. Ayres, 140
111. 644; 30 N. E. 687 (indebted-
ness contracted jointly by connect-
ing railways) ; New York, etc. Canal
Co. V. Fulton Bank, 7 Wend. (N. Y.)
412 (deposit in bank in joint names
of two corporations) ; Johnston For-
eign Patents Co. (1904), 2 Ch. 234
(where three companies undertook
to issue joint debentures).
» Bdch V. Big Store Co. (Wash.),
89 Pac. 174.
80
§ 31-§ 162] POWERS IMPLIED § 87
erosity or public spirit, to expend their funds for charitable or
philanthropic objects; and this is true although, as from a
casting of their bread upon the waters, a hope of indirect benefit
to the company is indulged.^ Thus, it is ultra vires of a railway
company to make a donation to a fair or public exhibition to be
set up along its line, although the establishment will increase
the traffic over the line.^ But although business corporations
cannot contribute to charity or benevolence, yet they are not
required always to insist on the full extent of their legal rights.
They are not forbidden from recognizing moral obligations of
which strict law takes no cognizance. They are not prohibited
from establishing a reputation for broad, liberal, equitable
dealing which may stand them in good stead in competition
with less fair rivals. Thus, an incorporated fire insurance com-
pany whose policies except losses from explosions may never-
theless pay a loss from that cause when other companies are
accustomed to do so, such liberal dealing being deemed con-
ducive to the prosperity of the corporation.'
The extent of this power of corporations has been questioned
most frequently with respect to gifts and gratuities to servants
and agents. It is settled that a corporation may bestow reason-
able gratuities on its employees in addition to the compensation
to which they may be legally entitled.* Thus, a manufacturing
company may give a gratuity of one week's extra pay to each of
its laborers who have worked for the company faithfully for more
^ But cf. Whetstone v. Ottawa 140 111. 248 ; 29 N. E. 1044 (where
University, 13 Kan. 320 (donation an hotel company was held to have
to procure erection of a school near power to contribute to the expense of
company's land) . a public gathering) ; Merchants' Bldg. ,
As to power to dedicate property etc. Co. v. Chicago Exchange Bldg. Co.,
of the corporation as a highway, see 106 111. App. 17 ; 210 111. 26 ; 71 N. E.
Stacyv. Glen Ellyn Hotel, etc. Co., 79 22; 102 Am. St. Rep. 145 (holding that
N. E. 133 ; 223 111. 546. a corporation owning a large office
^ Tomkinson v. South Eastern building may contribute to a fund to
By. Co., 35 Ch. D. 675 ; Davis v. Old secure the location of the public stock
■Colony R. B. Co., 131 Mass. 258 ; 41 exchange in that vicinity).
Am. Rep. 221 ; Western Md. B. B. ' Taunton v. Boyal Ins. Co., 2
Co. V. Blvs Bidge Hotel Co., 102 Md. Hem. & Mill. 135.
307; 62Atl. 351; 111 Am. St. Rep. * Cf. Bainford v. James Keith &
362 (railway company without power Blackman Co. (1905), 2 Ch. 147
to contribute to erection of a sum- (where the gratuity took the shape
mer hotel on its line). of a loan to the employee).
But see Biehelieu Hotel Co. v. But see Jones v. Morrison, 31
International, etc. Encampment Co., Minn. 140 ; 16 N. W. 854.
VOL. I. — 6 81
§ 88 THE INCOKPOBATION PAPER [ChAP. II
than a year.' So, a bank may grant a five years' pension to the
family of one of its officers.^ In all cases of these sorts, the
amount of the gratuity rests entirely within the discretion of the
company,^ unless indeed it be altogether out of reason and fitness.
But where the company has ceased to be a going concern, this
power to make gifts or presents is at an end. Thus, where a
company has sold out its business and undertaking, and is
about to be wound-up, a general meeting has no power to vote
a portion of its funds to its directors, officers, and servants, in
consideration of their past services and loss of positions.* The
reason for this is that where the company is about to discontinue
its business those interested in it cannot be benefited by such
gratuities, for no reputation for fair-dealing and generosity can
further advantage them. As many American courts would say,
the assets have become a "trust-fund" for the benefit of
creditors and shareholders. Lord Bowen, with a homely Shake-
spearean phrase, has tersely indicated the reason of the law
thus: "The law does not say that there are to be no cakes and
ale, but there are to be no cakes and ale except such as are
required for the benefit of the company." ^
§ 88. Gratuities to Directors. — The same principles apply
where the directors are the recipients of the company's bounty
as in the case of inferior agents and servants," except that the
gift must be made or approved by the shareholders; for of
course the directors have no right to make themselves a present
with the company's money.' The question whether or not the
gift should be authorized should be fairly and distinctly sub-
mitted to the shareholders.^ Indeed, some American cases
seem to hold that the giving of a pure gratuity to directors is
ultra vires of the corporation, so that it could not be legalized
' Hampson v. Price's Patent Can- to gratuities paid by a receiver of a
(Be Co., 45 L. J. Ch. 437. company).
' Henderson v. Bank of Austral- ' Hutton v. West Cork Ry. Co., 23
asia, 40 Ch. D. 170. Ch. D. 654, 673.
' Henderson v. Bank of Austral- ' Cf. St. Louis, etc. B. R. Co. v.
asia, 40 Ch. D. 170, 181 (headnote Tiernan, 37 Kan. 606; 15 Pac.
inadequate). 544.
* Hutton v. West Cork Ry. Co., 23 ' See Doe v. Northwestern Coal,
Ch. D. 654; Stroud v. Royal Aqua- etc. Co., 78 Fed. 62.
rium, etc. Soc, 89 L. T. 243. ' Kaye v. Croydon Tramways
Cf. Missouri Pac. Ry. Co. v. Co. (1898), 1 Ch. 358; Jackson v.
Texas, etc. Ry. Co., 33 Fed. 701 (as Munster Bank, 13 L. R. Ir. 118.
82
§ 31-§ 162] POWERS IMPLIED § 90
even by the approval of the shareholders; but this position has
no sound reason to support it, and is opposed to the weight of
authority.'
§ 89. Payment of Gratuities out of Capital. — There seems
on principle no reason to doubt that gifts or gratuities wherever
they are lawful may be paid out of capital as well as out of
profits. For the theory on which they are allowed is that they
are proper payments in the prosecution of the company's busi-
ness. Nevertheless, in an English case, it was said that although
a corporation by a majority of its members in general meeting
could make a present to its managing director for the mainte-
nance of his private residence on the theory that the support of
his social position would benefit the company, yet such a pres-
ent could be made only out of profits which might be divided
among the shareholders, and not out of capital.^ It is doubtless
true that if all the shareholders consent, money that might be
divided among them as dividends may, instead, be applied to
that or any other innocent purpose under the sun ; but no reason
is perceived why any payment to which the majority may bind
the minority may not be made out of capital as well as out of
accumulated profits.
§ 90. Whether desirable to supplement implied Powers of
this kind by express Provisions. — Enough has been said to
show that the implied powers of a corporation to give gratuities
to its servants and officers, as well as to strangers, are ample,
so that there is therefore no need to supplement them by express
provisions. Indeed, any express power to make gifts or gratui-
ties that should go beyond the power implied by the law would
be very dangerous. Possibly, it might be well in some cases to
confer expressly the power to make donations to fairs, exhibi-
tions and similar enterprises that may be thought likely in-
directly to benefit the company.
' Huffaker v. Krieger's Assignee, ' George Newman & Co. (1895),
53 S. W. Rep. 288; 107 Ky. 200; 1 Ch. 674, 686, per Lindley, L. J.,
46 L. R. A. 384. approved in Patau's Case, 6 Ont. L.
Cf. National Loan, etc. Co. v. R. 392.
Rockland Co., 94 Fed. 335; 36 C. C.
A. 670.
' 83
§91
THE INCORPORATION PAPER
[Chap. II
§ 91. Power to Guarantee. — The power to guarantee
performance of contracts, etc., by customers of the company
may often be found convenient in practice to exercise. It is
not a power easily implied,' add yet to insert as one of the
' Sturdevant v. Farmers', etc.
Bank, 87 N. W. 156; 62 Nebr.
472; 95 N. W. 819; 69 Nebr. 220
(bank acting as surety for cus-
tomer on a replevin bond) ; Bailey
V. Farmers' Nat. Bank, 97 111. App.
66; National Bank of Brunswick
V. Sixth Nat. Bank, 212 Ea. St.
238; 61 Atl. 889 (bank guarantee-
ing drafts on customer for latter's
accommodation) ; Bank of Barnwell
V. Sixth Nat. Bank, 28 Pa. Super.
Ct. 413 (same point) ; J. G. Brill Co.
V. Norton, etc. Street By. Co., 189
Mass. 431; 75 N. E. 1090 (accom-
modation endorsement by railway
company of note of contractor);
Greene v. Middlesborough Town and
Lands Co. (Ky.) 89 S. W. 228 (at-
tempt by a company formed for de-
veloping and dealing in real estate
to guarantee dividends on stock of
investment company) ; First Nat.
Bank v. American Nat. Bank, 173
Mo. 153 ; 72 S. W. 1059 (guarantee
by bank of draft on customer) ;
Bowen v. Needles Nat. Bank, 94
Fed. 925; 36 C. C. A. 553 (agree-
ment by bank to honor overdrafts
by third person) ; Park Hotel Co. v.
Fourth Nat. Bank, 86 Fed. 742 ; 30
C. C. A. 409 ; Commercial Nat. Bank
V. Pirie, 82 Fed. 799; 27 C. C. A.
171 (bank guaranteeing account of
customer with a merchant) ; Rogers
V. Jewell Belting Co., 184 111. 574
(where the surety corporation was
composed of the same shareholders
as the principal corporation) ; Best
Brewing Co. v. Klassen, 185 111. 37 ;
57 N. E. 20; 76 Am. St. Rep. 26
(appeal bond) ; M. V. Monarch Co.
v. Farmers' etc. Bank (Ky.), 49 S. W.
317 ; 20 Ky. L. Rep. 1351 (accommo-
dation paper) ; Madison, etc. Co. v.
Watertown, etc. Co., 7 Wise. 59;
Preston v. Northwestern Cereal Co.
(Nebr.), 93 N. W. 136; 67 Nebr.
45 ; Louisville, etc. Ry. Co. v. Louia-
mUe Trust Co., 174 U. S. 552, 567-
568 ; 19 Sup. Ct. 817 (semble) ; Pros^
pect Worsted Mills, 126 Fed. 1011;
Kelley, Maus and Co. v. O'Brien
Varnish Co., 90 111. App. 287 (ex-
ecuting appeal bond as surety) ;
Gilbert v. Seatco Mfg. Co., 98 Fed.
208 (attempt by corporation to be-
come surety for a transferee of its
shares for repayment of money ad-
vanced to enable him to purchase
them); Western- Md. R. R. Co. v.
Blue Ridge Hotel Co., 102 Md. 307 ;
62 Atl. 351; 111 Am. St. Rep. 362
(railway company guaranteeing in-
terest on bonds and dividends on
shares of a company erecting a sum-
mer hotel on the line of railway) ;
Washington Mill Co. v. Sprague
Lumber Co., 52 Pac. 1067 ; 19 "Wash.
165 (guaranty of debt of a share-
holder concurred in by the other
shareholders) ; Appleton v. Citizens'
Central Nat. Bank, 116 N. Y. App.
Div. 404; 101 N. Y. Supp. 1027
(guaranty of promissory note by a
national bank) ; National Bank of
Newport v. H. P. Snyder Mfg. Co.,
102 N. Y. Supp. 478 (accommodation
paper issued by manufacturing com-
pany) ; Cook V. Am. Tubing, etc. Co.
(R. I.), 65 Atl. 641 (accommodation
paper issued by manufacturing com-
pany for benefit of an agent) ; Hunir-
boldt Mining Co. v. Am. Mfg., etc.
Co., 62 Fed. 356; 10 C. C. A. 415
(company formed to manufacture
iron work for mines guaranteeing
contract for erection of mining plant
for prospective customer) ; Evans v.
Johnson, 149 Fed. 978 ; 79 C. C. A.
488.
But see Murphy v. Arkansas, etc.
Imp. Co., 97 Fed. 723 (where all the
shareholders assented).
84
§ 31-§ 162]
POWERS IMPLIED
91
company's objects acting as surety for other persons would be
very hazardous,' and might moreover subject the corporation
to burdensome regulations applicable to surety companies.
Moreover, in some cases, the power is implied as incidental.^
We have seen above that any corporation owning a bill of ex-
change or promissory note or coupon-bond and desiring to
assign the same may, by endorsement or otherwise, guarantee
payment.' So, it has been held that a company engaged in
manufacturing and selling lumber may become surety on the
bond of a contractor to whom it furnishes building material
and who is required to give bond to secure performance of a
contract.* Similarly, a brewery company may go surety for a
publican upon a bond necessary to secure him a license to sell
the surety's liquors.* It has even been held that a manufacturing
company may lend its credit to a debtor who is in embarrassed
circumstances,' a decision which certainly goes to the extreme
limit of the law. It has also been held that a company when
' But Sir F. B. Palmer recom-
mends mentioning as one of the
company's objects the exercise of "a
power to lend money and guarantee
the performance of contracts by cus-
tomers and others." "These loan
and guarantee transactions," he truly
says, "are constantly called for in
business and yet the power is one
not easily implied." Palmer's Com-
pany Law, 3d ed., 47.
^ Central R. R., etc. Co. v. Farmers'
L. & T. Co., 114 Fed. 263; 52 C. C.
A. 149 (guarantee by railway com-
pany with banking powers of bonds
of a railway in which the first com-
pany owned a majority of the
shares) ; Central Trust Co. v. Co-
lumbus, etc. Ry. Co., 87 Fed. 815
(mortgage of land to guarantee
bonds of subsidiary company) ; John
Bridge & Co. v. Magrath, 4 New So.
Wales State Rep. 441 (guarantee by
company of wool brokers of bank
account of constituent).
Cf. Schaeffer Piano Mfg. Co. v.
Nat. Fire Extinguisher Co., 148 Fed.
159 ; 78 C. C. A. 293 (holding that
manufacturing company may agree
with contractor to insure his prop-
erty against loss by fire while it is on
the premises of the first company).
' See supra, § 77.
Cf . Roosevelt v. NashvUle, etc. Ry.
Co., 128 Fed. 465 (where the trans-
action was held a sale so far as the
purchaser of the bonds was con-
cerned so as to entitle him to hold
the guarantor company, although
the guarantor immediately trans-
mitted the proceeds of sale to the
principal debtor).
* Wheeler v. Everett Land Co.,
14 Wash. 630; 45Pac. 316; Central
Lumber Co. v. Kelter, 201 111. 503.
Cf. Interior Woodwork Co. v.
Prassar, 108 Wise. 557 ; 84 N. W.
833.
But see contra, <S. P. Smith
Lumber Co., 132 Fed. 620.
= Horst V. Lends (Nebr.), 98 N.
W. 1046 ; 103 N. W. 460.
Cf. Aaronson v. David Meyer
Bremng Co., 26 N. Y. Misc. 655;
56 N. Y. Supp. 387 (guaranteeing
payment of rent by customer).
" Hess V. Sloane, 66 N. Y. App.
Div. 522; 73 N. Y. Supp. 313;
affirmed 173 N. Y. 616; 66 N. E.
1110.
85
§ 92 THE INCORPORATION PAPER [ChAP. II
purchasing property has implied power as part of the considera-
tion to indorse or guarantee notes of the vendor,' but this decision
overlooks the fact that the objection to guarantees by corpora-
tions does not lie merely in the fact that the company receives no
benefit,^ but also in the fact that a corporation has no implied
power to speculate upon the ability or inability of a third person
to meet his obligations.' It has been held that a company
which has power to purchase shares in another corporation
may, as part of the consideration for the purchase, agree to
guarantee dividends on other stock of the second company,^
a decision which is likewise rather questionable. Of course
when the corporation is in fact the principal debtor, there
is no legal objection to the execution of commercial paper
whereby the company appears in form as an accommodation
indorser.^ An express power to aid other corporations, by sub-
scription to their stock or otherwise, confers power to guarantee
their bbnds.^
§ 92. Power to Lend. — - The power to lend money is closely
akin to the power to lend credit by executing a guarantee,' and
like the latter power is not readily implied.' Nevertheless, a
company formed for the purpose of "brewing and selling beer"
was held to have implied power to lend money to a saloon-
keeper for the erection of a saloon at which the company's beers
should be sold.' A loan may be a proper form of investment for
' National Bank of Commerce v. ' Beacon Trust Co. v. Souther,
Allen, 90 Fed. 545; 33 C. C. A. 169. 183 Mass. 413; 67 N. E. 345.
Cf . Ellerman v. Chicago Junction " Zabriskie v. Cleveland, etc. B. B.
Bys., etc. Co., 49 N. J. Eq. 217,. 246- Co., 23 How. 381.
248; 23 Atl. 287. ' Cf. Holmes v. WUlard, 125 N.
2 Cf. Deaton Orocery Co. v. Inter- Y. 75; 25 N. E. 1083; 11 L. R. A.
national Harvester Co. (Tex.) 105 S. 170.
W. 556. But see Lyon v. First Nat. ' Grand Lodge v. Waddiil, 36 Ala.
Bank, 85 Fed. 120; 29 C. C. A. 45. 313; Chambers v. Falkner, 65 Ala.
' Of course, a corporation on 448, 454; Beach v. Fulton Bank,
purchasing property has power to 3 Wend. (N. Y.) 573, 582-583
assume the payment of a mortgage (semble).
thereon, as was done in Beaver Knit- ' Kraft v. West Side Brewery
ting MUls, IH Fed. 320; Panhandle Co., 219 111. 205; 76 N. E. 372.
Nat. Bank v. Emery, 78 Tex. 498; For other cases where the power
15 S. W. 23 ; but this is very differ- to lend has been implied, see Holmes
ent from guaranteeing payment. v. WUlard, 125 N. Y. 75 ; 25 N. E.
* Windmuller v. Standard Dis- 1083; 11 L. R. A. 170; Western
tilling Co., 106 N. Y. App. Div. 246; Boatmen's, etc. Ass'n v. Kribben, 48
94 N. Y. Supp. 52. Mo. 37, 43 ; Union Water Co. v.
86
§ 31-§ 162] POWERS IMPLIED § 94
such corporations as insurance corfipanies/ and indeed it has
been held that a manufacturing company has impUed power to
lend its surplus funds temporarily.^ Of course, any corporation
may deposit money with its bankers, and yet an ordinary bank
deposit is a loan to the bank. Moreover, a company may lend
money to a faithful employee as an indirect method of givjng him
a gratuity.' The power to lend necessarily implies the power to
take any reasonable security that is not prohibited.* But an
express power to lend on bond and mortgage so far from imply-
ing rather negatives any power to lend without security or on
some different security.^
§ 93. Power to advertise. — The power to advertise is
incidental to all business companies,' and need never be expressly
mentioned in the incorporation paper.
§ 94. Power to promote or oppose Bills in the Legislature. —
Sometimes, the majority of the shareholders resort to the legisla-
ture for assistance in dealing with an (as they think) obstreperous
minority, and undertake to defray the expense of applying for
the legislative aid out of the company's funds. This is ultra
vires of the corporation ; and, therefore, although citizens cannot
be enjoined from applying to the legislature for an amendment
to their act of incorporation or for redress of any grievances,
real or fancied, yet the expenditure of moneys of the corporation
for that purpose will be restrained by a court of equity at the in-
stance of any shareholder.' Indeed, it is held that a corporation
should content itself with the existing law, and has therefore
no power to expend its funds in promoting a bill in parlia-
Murphy's Flat, etc. Co., 22 Cal. 620 ; 35 Am. Rep. 531 ; Pratt v. Eaton,
Madison, etc. Co. v. Watertovm, etc. 79 N. Y. 449.
Co., 5 Wise. 173. = Life & Fire Ins. Co. v. Mechanic
1 Farmers' L. & T. Co. v. Perry, Ins. Co., 7 Wend. (N. Y.) 31.
3 Sandf. Ch. (N. Y.) 339; NoHh ' See Colorado Springs Co. v.
Carolina R. B. Co. v. Moore, 7 N. American Publishing Co., 97 Fed.
Car. 6 (railway company) ; Life 843 ; 38 C. C. A. 433.
Ass'n V. Levy, 33 La. Ann. 1203; ' Caledonian Ry. Co. v.SolwayRy.
Farmers' L. & T. Co. v. Clowes, 3 Co., 49 L. T. 526 ; Stevens v. South
N. Y. 470. Devon Ry. Co., 20 L. J. Ch. 491 ; Great
' Garrison Canning Co. v. Stanley Western Ry. Co. v. Rushout, 5 De G.
(Iowa), 110 N. W. 171. &Sm.290. It is otherwise, however,
' Rainford v. James Keith & if the amendatoryact has been passed.
Blackman Co. (1905), 2 Ch. 147. Hattersley v. Shelburne, 31 L. J. Ch.
* Deloach v. Jones, 18 La. 447. 873, 883-884 ; White v. Carmathan
Cf. Pratt y. Short, 79 N. Y. 437; Ry. Co., 1 Hem. & Miller 786.
87
§ 95 THE INCORPORATION PAPER [ChAP. II
ment for any purpose, however beneficial to the company's
business its passage might be.' However, it would seem clear
that a corporation may devote a part of its funds to defeating
any bill which it deems on reasonable grounds to be inimical to
its interests.^ And where a corporation may be organized
for any lawful purpose, no reason is perceived why its incorpora-
tion paper may not by express provision empower it to promote
bills in the legislature; but it may well be doubted whether
even an express provision in the incorporation paper could
authorize the majority of the company to use the corporate
funds to secure legislative aid in their controversies with the
minority. The question is of less importance in the United
States than in England, not only because constitutional limita-
tions on the power of the legislature afford some protection to
the minority, but also because the legitimate expenses of pro-
curing an act of the legislature are much smaller in America
than in Great Britain.
§ 95. Power to inform Shareholders of Facts likely to in-
fluence their Votes. — Although a company has no power to
participate in factional disputes between its members, yet it
may always, even without express authorization employ its
funds in giving any information to its shareholders that may
affect their interests or influence their conduct as members.
For example, a corporation has power to expend its funds in
order to inform its shareholders of a proposition to give stock
in a rival company in exchange for their shares, thus effecting a
virtual amalgamation.' The court said : " When it comes to the
knowledge of a board of directors that some scheme is on foot
to induce a majority of the stockholders to part with their
stock to a rival corporation, the directors are not only authorized
to advise the stockholders thereof, but it is their duty to do so.
. . . Undoubtedly individual stockholders receive a benefit
in being notified of what is going on, but, in our opinion, the
corporation itself also receives a benefit in having its stockholders
at all times fully advised as to everything which concerns its
condition, or which may be expected to alter that condition.
' Munt V. Shrewsbury, etc. Ry. ' Attorney-General v. Mayor of
Co., 13 Beav. 1 ; Maunsell v. Mid- Brecon, 10 Ch. D. 204.
land, etc. Ry. Co., 1 H^m. & Mill. ' Rascover v. American Linseed
130. Co., 135 Fed. 341 ; 68 C- C. A. 11.
88
§ 31-§ 162] POWERS IMPLIED § 96
We would not hesitate to hold it a legitimate charge against a
corporation if directors should send to every stockholder a
printed copy of a report as to its condition, or even as to general
conditions of the industry in which it operated, so that all might
be advised as to what environment, favorable or adverse,
surrounded it, in the hope that some of them might thereby be
stimulated to thought and suggestion by which the corporation
might itself be profited."' This being the law, "whether the
notice shall be long or short, in what form of words it shall be
couched, whether it shall be sent by mail or advertisement in
newspapers, are matters of detail, which should be left to the
directors"; and therefore a claim against a company for over
$20,000 for the expense of advertising such a notice in newspapers
has been sustained.^ So, too, the directors may properly expend
the company's funds in sending out to each shareholder a
circular setting out the facts with reference to certain questions
of policy in the management of the company and also advocating
their own views and asking the support of the several share-
holders.' On the other hand, it has been held that the funds of
the corporation cannot be used in publishing a reply to a circular
issued by an officer in an effort to prevent the re-election of the
directors.* ,
§ 96. Power to take Measures to bring out full Vote at
Shareholders' Meeting. — The directors may also adopt any
appropriate measures for the purpose of bringing out a full and
fair vote at a shareholders' meeting, and may consequently
send out to the shareholders stamped proxy papers containing
the names of some of their own number as proxies, with a
stamped cover for return.^ The difference of judicial opinion
which has existed with respect to this latter point illustrates
the difficulty in drawing the line between acts which are a
legitimate effort to support policies deemed to be beneficial
to the company and acts which are an improper endeavor to
' 135 Fed. 341, 343-344. » Peel v. London & N. W. Ry.
' Rascover v. American Linseed Co. (1907), 1 Ch. 5 (overruling Stud-
Co., 135 Fed. 341 ; 68 C. C. A. 11. dert v. Grosvenor, 33 Ch. D. 528).
^ Peel V. London & N. W. Ry. Cf. Jackson v. Munster Bank, 13
Co. (1907), 1 Ch. 5. L. R. Ir. 118; Lawyers' Advertising,
* Lawyers' Advertising Co. v. etc. Co. v. Consolidated Ry., etc. Co.j
Consolidated Ry., etc. Co., 80 N. E. 80 N. E. 199; 187 N. Y. 395.
199 ; 187 N. Y. 395.
89
§ 97 THE INCORPORATION PAPER [ChA.P. II
perpetuate the power of the faction which happens to be in
control of the company for the time being. It has been held
in New York that while directors may properly send out proxies
to the shareholders yet they must not use the company's funds
in urging the shareholders to return the proxies in order to keep
themselves in office.'
§ 97. Power to pay Counsel-fees in internal Contest. — A
corporation may expend its funds in paying the fees of defendant's
counsel in a suit to oust some of the officers of the company.^
So to do is not deemed unlawful participation in a factional
dispute between members of the corporation.
§ 98-§ 102. Power to make the Best of a SitiMtim.
§ 98. In general. — As the limitations upon the powers of
corporations are not intended as mere vexatious impediments,
but are designed as helps rather than hindrances to the business,
the powers should not be so construed as to prevent corporations
from extricating themselves in the most practicable way from
any difficulties by which without their fault they may be beset.
This principle may lead a company into transactions that
seem far removed from the objects of its creation, but neverthe-
less they are not ultra vires. Although prima facie beyond its
powers, yet they are seen on a thorough examination of the
attendant circumstances to be in fact reasonably incidental to
the successful prosecution of the company's undertaking, and
therefore intra vires. "Take, for instance," said Lord Justice
Selwyn, "the common case of a banker advancing money upon
the security of a ship and the freight. Nothing, probably, would
be further from the notion of the banker than entering into any
transaction respecting the sailing of the ship, or receiving the
freight in respect of that ship. But if he is obliged to foreclose
his security, if he is obliged to take possession of the ship, then,
as a prudent man, he would necessarily become involved in the
management of the sailing of the ship and receiving the freight as
constituting the only means by which he could recover the
money he had advanced. I may mention one very familiar
' Lawyers' Advertising, etc. Co. v. ' Stendell v. longshoremen's, etc.
Consolidated Ry., etc. Co., 80 N. E. Ass'n, 116 La. 974: 41 So. 228.
199; 187N. Y. 395.
90
§ 31-§ 162] POWERS IMPLIED § 99
instance, known to us all, that of a well-known insurance com-
pany. Having lent money upon the security of a mortgage of
land in Galway, and having been obliged to foreclose that
mortgage, they became dealers of land in Galway on a very
large scale." '■ This inherent power of every corporation to make
the best of a situation and to protect itself from loss is far-
reaching and might be illustrated by many examples,^ and indeed
instances of it have been already given more than once. Further
examples are mentioned below.
§ 99. Power to utilize surplus Property. — For instance, a
corporation is not bound to let its surplus property lie idle, but
may put it to the most profitable use practicable.' Thus, a rail-
way company having power to maintain a ferry in connection
with its line may employ the ferry-boats, when not in use for
their proper purpose, in carrying passengers for hire on excur-
sions.* So, a railway company may rent out its machines for
weighing coal whenever it is not using them.^ An hotel com-
pany may let to a government department ^ large part of its
hotel while it is in course of construction ; " or a brewery com-
pany, having need of an office, may lease an entire house and
sublet all except the ground-floor.' According to the same
principle, if a company has surplus funds in its hands, for the
time being not needed in its business, it is not bound to keep
them in its safe or even at its bankers, but may invest them in
' Royal Bank of India's Case, ing a mortgage may buy in prior
4 Ch. 252, 260-261. mortgage to prevent foreclosure).
^ Ii) addition to cases cited below, ' People ex rd. Moloney v. Pvll-
see Mahoney v. Butte Hardware Co., man Car Co., 175 111. 125; 51 N. E.
27 Mont. 463 ; 71 Pac. 674 ; Fidelity 664 ; 64 L. R. A. 366.
7ns. Co. V. German Savings Bank, * Forrest v. Manchester, etc. By.
127 Iowa 591; 103 N. W. 958; Co., 30 Beav. 40 (affirmed on other
Westminster Nat. Bank v. New Eng- grounds in 4 De G. F. & J. 125). Cf.
land Electric Works, 62 Atl. 971; Brown v. Winnisimmet Co., 11 Al-
73 N. H. 465; 111 Am. St. Rep. len (Mass.) 326 (ferry company may
637 ; Cockrill v. Abeles, 86 Fed. 505 ; let out boat which is not needed for
30 C. C. A. 223; Attorney-General present use).
V. Mersey By. Co. (1907), 1 Ch. 81 ; ' London & N. W. Ry. Co. v.
State Security Bank v. Hoskins, 106 Price, 11 Q. B. D. 485.
N. W. 764; 130 Iowa 339 (bank " Simpson v. Westminster Palace
accepting conveyance of farm in Hotel Co., 8 H. L. C. 712.
satisfaction of debt) ; Mayor, etc. of ' Horsey's Claim, 5 Eq. 561, 582 n
Baltimore v. Baltimore & 0. R. R. (headnote inadequate).
Co., 21 Md. 50 (corporation hold-
91
§ 100 THE INCORPORATION PAPER [ChAP. II
any sound securities, not of course for speculation but purely
as an investment, to prevent the money from lying idle.'
§ 100. Power to CompTomise. — Moreover, a corporation
has power to compromise any claim against it on the best terms
it can obtain,^ and this is true although thereby a reduction of
capital or some other result ordinarily vltra vires is brought
about. Thus, where a claim is made against a company on
account of an alleged illegal issue of shares, a compromise may
be entered into whereby the shares in question are to be can-
celled, although in point of fact the shares were valid.^
§ 101. Limits of Powers to make the best of a Situation. — A
limit of course exists to the powers of the sort considered in the
last few paragraphs ; and in some cases the limit has been drawn
perhaps too closely. Thus, where a building society which had
made a loan upon security of a second mortgage of real estate,
in order to prevent a sale of the premises at a sacrifice under
the first mortgage, agreed to guarantee the payment of the same,
the House of Lord^ held that the guarantee was riUra vires of the
association, and therefore unenforceable.* Moreover, where a
bank has obtained title to real estate in payment of a debt,
although it may lay out money for ordinary and reasonable
repairs, yet it has no power to spend its funds in prospecting
for ore on the land.' Similarly, a corporation which owns shares
in another company cannot extend pecuniary assistance to the
latter even in order to prevent its ruinous failure."
§ 102. Whether desirable to supplement these Powers. — These
cases, and others of a similar sort, show that too great reliance
can easily be placed upon a company's inherent powers of mak-
ing the best of a bad situation. Sometimes, it may be well in
drawing up an incorporation paper to supplement the powers
that would be implied, by express provisions covering such diffi-
culties as can be anticipated. ' Thus, an English text-WTiter,
' Cf. supra, § 82. securities of other corporations, see
^ Cf. supra, § 82. Marbury v. Kentucky Union Land
' Bath's Case, 8 Ch. D. 334. Co., 62 Fed. 335. As to power to
See infra, § 637. guarantee in general, see supra,
* Small V. Smith, 10 A. C. 119. §91.
Cf. West of England Bank, 14 Ch. « Cooper v. Hill, 94 Fed. 582 ;
D. 317; Stark Bank v. U. S. Pottery 36 C. C. A. 402.
Co., 34 Vt. 144. ' " Salomons v. Laing, 12 Beav.
As to the power to guarantee 339.
92
§ 31-§ 162] GENERAL STATEMENTS OF OBJECTS § 104
having in mind, possibly, the decision of the House of Lords
stated in the last paragraph, recommends that the incorpora-
tion paper contain a clause empowering the company to "guar-
antee the performance of contracts by customers and others " ; '
but, as already pointed out,^ this seems a rather dangerous
power to confer without restriction. Perhaps, in general, it is
better to rely on the implications of the law. At all events, in
deciding this question, the draftsman of an incorporation paper
should be influenced largely by the peculiar circumstances, so
far as they can be foreseen, of the particular company, and
needs business foresight as well as legal knowledge and skill.
§ 103. Provisions prohibiting Exercise of Powers that might
otherwise be impUed. — Finally, it is always possible by positive
prohibition to exclude the existence of powers that would other-
wise be implied. To be sure, the powers which are incidental
to corporate existence and which the statutes usually affirma-
tively declare that all companies organized under them shall
have — such as the power to sue and be sued, to have con-
tinuous succession, to have and use a common seal, and the
like — cannot be excluded. But any powers that are implied
merely as appropriate means towards attaining the expressed
objects may by positive prohibition be denied to the company.
For only such powers are implied as are reasonably necessary
to the accomplishment of the ends of the company's existence
and as are not expressly prohibited.
§ 104-§ 108. GENERAL STATEMENTS OF OBJECTS.
§ 104. Particularity requisite in stating Objects. — The_in-
tent^of -©very^energj incorporation lay. being that the objects
of Jhe propQsed_company shall be specified in its incorporation
paper, a statement that its objects shall be the prosecution of
any business that the company may see fit, or other words to
that effect, would certainly fail to satisfy the statute.^ The ob-
jects must be specified or mentioned, and a declaration that the
objects shall be whatsoever the corporation may choose could
' Palmer's Company Law, 3d ed., 47. ' Supra, § 91.
93
§ 104 THE INCORPORATION PAPER [ChAP. II
not possibly be deemed a compliance with the law.' Thus
Lord O'Hagan in a leading case in the House of Lords said:
"That Act (the Companies Act of 1862) gave certain privileges
and Imposed certain conditions, and one of them was, that the
memorandum of association should specify the objects of men
seeking to trade with limited liability, for the manifest purpose
that those objects should be clear and definite, giid known pre-
cisely_ta-all who mip|ht have dealings with the company. But
if in a case like this, it were competent for persons making and
registering a memorandum to segregate particular words, as
'contractor' and 'merchant,' and insist that their generality
should be confined not by the declared purposes of the forma-
tion of the company, nor even by the manifest reason of the
thing, the purpose of the Act would be defeated, and the favor
given by it would be enjoyed without fulfilment of the condi-
tion properly imposed for the public benefit.'? ^ > So, a provision
that the object of the company should be to do any and all acts
tending to increase the value of its shares would certainly be too
indefinite.^
To be sure, it is very diflScult to say precisely what degree of
particularity is requisite.* Thus, a statement that the company
is organized "for the purpose of manufacturing" has been held
K^ Crown Bank, 44 Ch. D. 634; ment of objects was held too vague ;
Re Journalists Fund of PhUaddphia, West v. BvUskin Prairie Ditching
8 Phila. 272 ; Welsbach Incandescent Co., 32 Ind. 138 (description of
Gas Light Co. (1904), 1 Ch. 87, 99 drain to be constructed by a drain-
(semble). age company held too indefinite) ;
Cf. State V. Central Ohio, etc. Ass'n, O'Reiley v. Kankakee Valley Drains
29 Ohio St. 399 (statement that the ing Co., 32 Ind. 169, 192-195 (similar
manner of carrying on tl)e business point to that in preceding case) ;
shall be such as the company may Crawford v. Prairie Creek Ditching
from time to time prescribe by rules Ass'n, 44 Ind. 361 (same point — ^, i
and regulations, held not a com- commencement, course and ter-]l
pliance with a requirement that the minus of ditch required to be stated) ;
incorporation paper must show the Monroe Republican Club, 6 Pa.
"manner of carrying on the busi- Dist. R. 515 ("social enjoyment");
ness of said association"). LaFayette Clvh, 21 Pa. Co. Ct. Rep.
^ Ashbury Ry., etc. Co. v. Riche, 243 ("mutual improvement intel-
L. R. 7.H. L. 653, 690-691. lectually, and social enjoyment").
' Ellerman v. Chicago Junction In the following cases, in addi-
Rys., etc. Co., 49 N. J. Eq. 217, 239 tion to those cited below, the state-
(semble) ; 23 Atl. 287 ; Peel's Case, ment of objects was held to be sufiB-
2 Ch. 674 (semble). ciently particular: Seyberger v.
* In the following cases in addi- Calumet Draining Co., 33 Ind. 330
tion to those cited below, the state- (description of drain to be con-
94
§ 31-§ 162] GENERAL STATEMENTS OF OBJECTS § 104
to be a compliance with law;' and the same is true of a state-
ment that the objects of the company shall be the manufacture
and sale of daguerreotype matting and preservers, and all other
articles made of brass, silver, gold, iron, or other metals or any
compounds thereof,^ and of a statement that the objects of the
company are "the mining of gold, silver and lead in the terri-
tory of Utah." ^ According to a recent Wisconsin case, a state-
ment that the "business or purposes" of the corporation will
be "to construct and operate street railways in the city of Mil-
waukee and elsewhere in the State, and to extend its lines into
or through any village or town of the State" is good, without
mentioning the termini of the railways.* Where an incorpora-
tion paper provided that the company's objects should be to
buy and sell shares in a certain other corporation, "to exercise
in respect to said shares any and all the rights, powers and privi-
leges of owners of shares of said capital stock, to do any and all
things tending to increase the value of the shares of the capital
stock of said company," the words in quotation marks were
held to be sufficiently definite as a specification of the objects
of the corporation.^ On the other hand, a statement that the
fitructed by drainage company suffi- powers which it may exercise when
cientlydefinite) ; Callender v. Paines- duly incorporated. It is sufficient
mile & Hudson R. R. Co., 11 Ohio if they designate in general terms
St. 516 (description of route of rail- the purposes for which the corpora-
way) ; BaUe v. Calvert College Edv^ tion is organized ") ; Cayuga Lake
cational Soe., 47 Md. 117, 122 ("to R. R. Co. v. Kyle, G^N.Y. 185
erect and maintain an educational (where a railway company was held
society ") ; Bowman Dairy Co. v. a corporation de facta notwithstand-
Mooney, 41 Mo. App. 665, 672 (where ing a lack of aeniiiteness in stating
the court said, obiter, "would it be the termini).
a sufficient compliance ... to state ' Hughes v. Antietam Mfg. Co.,
that the plaintiff intended to em- 34 Md. 316 (headnote inadequate),
bark in some business not other- But see Glenwood Coal Co., 6 Pa.
wise specially provided for by the Co. Ct. Rep. 575.
corporation law of the State? We ^ Bird v. Dagett, 97 Mass. 494.
think not ") ; New York, etc. R. R. ' People ex rel. Belknap v. Beach,
Co. V. O'Brien, 106 N. Y. Supp. 909 19 Hun (N. Y.) 259.
(under statute requiring termini of ' Milwaukee Light, Heat & Trac-
proposed railway to be specified, <ion Co. (Wise), 112 N. W. 663, 669.
held sufficient to mention the towns Note that the rule would be different
or villages which are the termini). under some statutes. See cases col-
Cf. Wendel v. State, 62 Wise. 300, lected supra, p. 94, note 4.
304-305; 22 N. W. 435 (where ' Ellerman v. Chicago Junction
the court said, "It is not necessary Rys., etc. Co., 49 N. J. Eq. 217, 238-
that the articles of association shall 241 ; 23 Atl. 287.
designate with particularity all the
95
§ 105 THE INCORPORATION PAPER [ChAP. II
corporation is formed for charitable purposes, has been held
too vague as a specification of the objects of incorporation.'
Similarly, where the law requires the objects of the company
to be specified, a company cannot be incorporated for the "pro-
motion of literature and the cultivation of friendly feelings." ^
Lord Lindley has expressed the opinion that consistently with
honesty no company could be formed with objects so general
as " working mines of any kind in any part of the world." ' In
some cases, the name of the company may render sufiiciently
particular a statement of objects that would otherwise be too
indefinite.* If the company is expected to enjoy the franchise
of condemning private property, the need of particularity in
the specification of the objects is the greater.
§ 105-§ 108. Construction of General Words accompanied by
Particidars.
§ 105. Particular Words followed by General Words which
standing alone would be too indefinite. — Very often the ob-
ject clause of the incorporation paper, after mentioning certain
particular objects, concludes with general authority to do any-
thing else that the company may choose, or may deem inci-
dental to the particularized purposes, or the like. In all such
cases, the concluding general words are not to be construed
literally ; for if so, according to the principles stated in the last
paragraph, the instrument would not be in legal form. The
maxim, noscitur a sociis, should be applied. For instance, where
the objects of a company are stated to be to make and sell rail-
way carriages and machinery and to carry on the business of
"general contractors," the latter words do not confer a general
power of making contracts without regard to their subject-
matter, but will be confined in their application to such con-
tracts as are incidental to the more explicit objects of the
' Re Devaux, 54 Ga. 673 (head- ' National Literary Ass'n, 30 Pa.
note inadequate). St. 150. Cf. Nether Providence
Cf. McKees Rocks, etc. Relief Ass'n, 12 Pa. Co. Ct. Rep. 666
Ass'n, 6 Pa. Dist. Rep. 477 (attempt ("social enjoyment"),
to form a corporation for "bene- ^ Coolgardie Gold Mines, 76 L.T.,
ficial or protective purposes to its n. s., 269, 271.
members from funds collected * Cf. Van Pelt v. Home Bldg., etc.
therein"). Ass'n, 79 Ga. 439; 4 S. E. 501.
96
§ 31-§ 162] GENEEAL STATEMENTS OF OBJECTS § 107
c(impany.' So, a provision that the corporation may do any-
thing that the directors or a majority of the shareholders deem
conducive to its objects does not make their judgment conclusive
as to whether or not a certain transaction is conducive thereto,
but authorizes the doing of such things only as are bona fide and
reasonably connected with the objects to be attained : ^ such
sweeping general words add little or nothing to the powers which
the law would imply without them. A fortiori, a provision that
the corporation may do whatever is incidental or conducive to
its expressed objects merely declares and emphasizes a well-
settled rule of legal interpretation.^
§ 106. General Words followed by Particulars. — The same
rule will be applied where the general expressions precede in-
stead of following the particular objects. Thus, a provision in
an incorporation paper that the company shall possess the same
powers as an individual in respect to making contracts, etc., is
limited by a subsequent provision defining the business of the
company as developing and dealing in real estate, to such con-
tracts as are fairly incidental to the business of the company
as thus defined.* •
§ 107. General Words which, although accompanied by Par-
ticulars, are not too indefinite to stand alone. — The prin-
ciple by which general words will be confined in scope to things
ejusdem generis with the more particular terms by which they
are accompanied will be applied not only where the general
words are so very general that no other interpretation would be
permissible, but also in any case where the court can see that the
company was designed to have certain definite objects to which
' Ashbury Ey., etc. Co. v. Riche, authorize a two thirds majority of
L. R. 7 H. L. 653. the shareholders to add to or amend
' Joint Stock Discount Co. v. the deed, and generally to do any-
Brown, 3 Eq. 139, 150-151 (head- thing that the company or all the
note inadequate) ; Guinness v. Land shareholders by unanimous consent
Corporation, 22 Ch. D. 349, 373. might do.
Cf. London Financial Ass'n v. ' Kingsbury CoUieries and Moore's
Kelk, 26 Ch. D. 107, 137-138; Perun Contract (1907), 2 Ch. 259 (headnote
vian Rys. Co. v. Thames, 2 Ch. inadequate).
617. But see, as to such provisions.
See also Featherstonehaugh v. Simpson v. Westminster Palace Hotel
Lee Moor, etc. Co., 1 Eq. 318, where Co., 8 H. L. Cas. 712 ; Baglan Hall
the court considered a provision in Colliery Co., 5 Ch. 346, 356.
a deed of settlement under the Com- * Greene v. Middleborough Town
panies Act of 1844, purporting to & Lands Co. (Ky.), 89 S. W. 228.
VOL. I. — 7 97
§107
THE INCORPORATION PAPER
[Chap. II
everything else should be ancillary.' Thus, where a company
was formed to engage in mining and "more particularly" to
carry out an agreement for the purchase of a certain mine in
New Zealand, it was held that the intended grantors of the mine
having been proved to be without title thereto, the company had
no power to engage in mining elsewhere.^ So, where a company
was organized to acquire and work a German patent for manu-
facturing a substitute for coffee, and any modifications and im-
provements thereof, and to acquire any other inventions for
similar purposes, and to import and export all descriptions of
produce for the purpose of food, it was held that the latter clause
should be construed as merely ancillary to what preceded, and
that, the German government having refused to grant the patent,
there remained no business in which under the true construc-
tion of the incorporation paper the company could lawfully
engage.^ So, where an incorporation paper stated that the ob-
jects of the company were to acquire the assets and Uabilities of
' In addition to cases cited be-
low, see Moore v. Rawlins, 6 C. B.,
N. s., 289 ; Stephens v. Mysore Reefs
Mining Co. (1902), 1 Ch. 745 (an
extreme case, which has lately been
criticised and distinguished in Pedlar
V. Road Block Gold Mines (1905),
2 Ch. 427) ; Haskell v. Worthington,
94 Mo. 560, 569 ; 7 S. W. 481 (head-
note inadequate) ; Coolgardie Gold
Mines, 76 L. T., N. s., 269 ("Where a
company puts in the forefront of
its memorandum of association a
special object, as ti" '^hr^ definite
jofoimatinn r.!\j\ |if, nhtainpH hy
of the company and _that the other
objects are ancJlTary ancTsu'Biervient
tothSt-SBjecP^. "
' But see Stern v. McKee, 70 N. Y.
App. Div. 142 ; 75 N. Y. Supp. 157.
' Haven Gold Mining Co., 20 Ch.
D. 151.
» German Date Coffee Co., 20 Ch.
D. 169. Said Jessel, M. R. . "It
appears to me that this memoran-
dum when fairly read, and notwith-
standing the rather loose use of
general words, is simply to buy this
patent and to work it either with or
without improvements." 20 Ch. D.
186. Lindley, L. J., said : " In con-
struing this memorandum of asso-
ciation or any other memorandum
of association in which there are
general words, care must be taken
to construe those general words £q.
as not, to makfi_tbem,a trap for un-
waiy people. General words con-
strued literally may mean anything ;
but they must be taken in connec-
tion with what are shown by the
context to be the dominant or main
objects. It will not do under general
words to turn a company for manu-
facturing one thing into a company
for importing something else, how-
ever general the words are." 20
Ch. D. 188.
See also to substantially the same
effect : Consolidated Copper Co. v.
Peddie, 5 Rettie 393, 400.
93
§ 31- § 162] GENERAL STATEMENTS OF OBJECTS § 108
certain other corporations formed for dealing in seats and ac-
commodations for the Diamond Jubilee of Queen Victoria, and
also "to carry on all lands of promotion business," "to act as
house-agents, surveyors, and builders," and to deal in places of
observation for any procession or spectacle, the court held that
from the whole instrument the primary object of the company
appeared to be speculation in seats for the Diamond Jubilee
and that everything else, in spite of the generality of the language
used, was merely subordinate thereto, so that, the Diamond
Jubilee having taken place, there remained nothing for the
company to do.' Upon the same principle, a clause in the in-
corporation paper of a sawmill company purporting to authorize
the corporation to own or lease railways and tramways has been
declared to apply only to such railways or tramways as are inci-
dental to the operation of a sawmill.^ In determining what is
the main object of the company within the meaning of these
decisions, the corporate name may furnish a guide.^
The same principle will apply to the construction of general
words following more particular and limited statements of
objects even where the incorporation paper provides that the
objects specified in each paragraph, or subdivision, of the objects
clause "shall be in nowise limited or restricted by reference to
or inference from the terms of any other paragraph or the name
of the company." *
§ 108. Limits of Maxim Noscitur a sociis. — On the
other hand, the principle of noscitur a sociis must receive a rea-
sonable application. For instance, it cannot be applied so as to
effect a virtual deletion of the words "and elsewhere" in an
incorporation paper specifying as the objects of the company,,
in addition to taking over as a going concern a certain named
mine, the acquisition and development of gold mines and other
mining rights "in Mysore and elsewhere." ^ So, where an incor-
poration paper states as the purposes of the company the pur-
• Amalgamated Syndicate (1897), ing Co. (1902), 1 Ch. 745 (distin-
2 Ch. 600 (headnote inadequate). guished and in some particulars
' People ex rel. Loy v. Mount criticised in Pedlar v. Road Block
Shasta Mfg. Co., 107 Cal. 256, 258; Gold Mines (1905), 2 Ch. 427).
40 Pac. 391. » Pedlar v. Road Block Gold
' Re Crown Bank, 44 Ch. D. 634. Mines (1905), 2 Ch. 427.
See also infra, § 462. But see Coolgardie Consol. Gold
' Stephens v. Mysore Reefs Mirv- Mines, 76 L. T. 269.
§ 109 THE INCORPORATION PAPER [ChAP. II
chase and operation of a certain mine in New South Wales and
also the purchase of other mines in New South Wales or else-
where, it was held that upon the exhaustion of the mine first
named the company had power to acquire other lands in New
South Wales believed to be coal bearing.'
§ 109-§ 113. The Capital Clause.
§ 109. Statement of Amount of Capital and Number of
Shares. — ['•jprrnH ffniy ipiTTipr|7-tcirir|o jv^ the objects clause is
the capital clause of the incorporation paper. This it is which
defines the amount of the capital and the number and amount
of the shares into which it is divided. Jlhs^Btount of the^a^tal
must be stated in the body of the instrument,^ as the court cannot
infer the amount of the capital from the number of shares sub-
scribed for by the incorporators at the foot of the paper.* An
incorporation act providing that the memorandum of association
shall state the amount of the company's capital "divided into
shares of a certain fixed amount" requires the amount or par
value of the shares to be stated in the incorporation papetu^
Care should be taken to avoid any inconsistency between the
statement of the aggregate amount of the capital and the state-
ment of the number and par value of the shares. In a Maryland
case, an incorporation paper stated that the capital stock of the
company should consist of $150,000 divided into "five hundred
shares at $100 per share." The court held that five hundred
was a clerical error for fifteen hundred, and that therefore the
instrument was legal ; * but this conclusion could hardly have
been reached but for the fact that appended to the paper was
a subscription for "fifty shares five thousand dollars."
' Wiekham & Bvllock Island ing one thousand, and the par value
Coal Co., 5 New So. Wales State Rep. thereof, the court held that an in-
365. corporation paper which pjpyided .
^ But Jii, Lord V. Essex Bldg. that, the - nuniber. Qf_j5hares..should^l
Ass'n, 37 Md. 320, 326-327 (head- ^Jndefinile was effective. to create T"
note inadequate), where under a a porporation.
statute providing for the formation '\J 'State ex rel. Howe v. Shelby-
of building societies and declaring vUle, etc. Turnpike Co., 41 Ind.
that any corporation formed there- 151.
under ghr»ii]H h^vc.piji^pr to state * Financial Corporation, 2 Ch.
in the incorporation paper the 714, 732 (headnote inadequate),
number of shares of which its capi- ' Hughes v. Antietam Mfg. Co.,
tal stock should consist, not exceed- 34 Md. 316.
100
§ 31-§ 162] THE CAPITAL CLAUSE § 112
§ 110. Division of Shares into Preferred and Common, etc.
— 4^ther matter oftpn regulated by the capital clause^ of
Jhe jncorporation jpaper is the classte^ajtion , of Jth^ into
''prefcK&d'^aiLd^ "commoj^ The many and
difficult questions that arise in connection with this subject are,
however, by reason of their importance reserved for separate
and detailed treatment hereafter©
§ 111. Statement as to Liability of Shareholders. — In
England and in some of the United States, the incorporation
paper must.contain^a^statement whether the liability of the mem-
bers is to be limited or unlimited, or if limited to what extent it is
to be confined.^ In Colorado, where the statute provided that
the incorporation paper should state whether the stock is to be
" assessable " or " non-assessable," it was held that a total omis-
aon from an incorpfflajion japgr ol any statement~upOT^^
point did not prevent the corporation from attaining at least a
de /acto existence.^
§ 112. Statement of Time and Manner of Payment for Shares.
— Some statutes Require the time and manner of payment for
the shares to be specified in the incorporation paper.* A state-
ment that the stock shall be paid for in cash and that no share-
certificate shall issue until payment be made satisfies such a
requirement ; * and the same is true of a statement that payment
shall be made at such times and in such amounts as the directors
may deem best." A statute requiring an affidavit to be endorsed
upon the incorporation paper attesting the payment of five per
cent of the minimum capital of the company is repealed by a
subsequent statute which expressly repeals the provision re-
quiring the payment of five per cent of the minimum sub-
scription, but does not in express terms dispense with the
affidavit.'
Ordinarily, and in the absence of an expUcit statutory require-
' Infra, Chapter X, § 525 et the stock, see Buffalo, etc. R. R. Co.
seq. V. Hatch, 20 N. Y. 157.
^ Cf. Oarey v. St. Joe Mining Co. * New Orleans, etc. R. R. Co. v.
(Utah), 91 Pac. 369. Frank, 39 La. Ann. 707 ; 2 So. 310.
. ' Humphreys v. Mooney, 5 Colo. ° Baltimore, etc. Tel. Co. v. Mor-
282, 286-288. gan's, etc. Co., 37 La. Ann. 883.
" As to a requirement that the ' Belfast, etc. Plank Road Co. v.
paper must -show that a. certain Chamberlain, 32 N. Y. 651, 654r-655,
amount has already been paid on per Brown, J.
101
§113
THE INCORPORATION PAPER
[Chap. II
ment, the incorporation paper need not state the terms and
conditions of payment for the stock.'
§ 113. Combination of joint-stock Plan with non-stock Plan. —
One and the same incorporation law often provides for the
formation not merely of companies organized on the ordinary
joint-stock plan but also of corporations having no capital
stock, such as mutual insurance companies.' This is the
case, for instance, under the English Companies Act of 1862.
Under such laws, no legal obstacle prevents the formation of a
corporation on a combination of the two plans — for example,
an insurance company having two classes of members, share-
holders and holders of mutual policies.'
I 114. Chief Office or Place of Business Clause. — Gen-
eral incorporation laws usually require that the incorporation
paper shall contain certain particulars regarding the company's
oflBce or place of business.' The English law provides that the
memorandum of association shall specify in what part of the
United Kingdom — that is, whether in England, Scotland, or
Ireland — the company's "registered office" is to be situate.*
The precise location of this office must be recorded from time to
time by the public registrar."^ In front of the office, a sign must
be conspicuously displayed bearing the name of the company in
letters easily legible.' The list of members and the register of
incumbrances on the company's property must be kept at this
office ; " and there any summons or notice requiring service on
the company may be served." T4ie-m^n.jeatures of^thi^jaw
have been copied in New Jersey and other st^es. The statutes
of almost everv state in the American Union require that the
' Brinkley Car, etc. Co. v. Curf-
man (Iowa), 114 N. W. 12.
^ As to the presumption that a
corporation organized for indus-
trial purposes is formed on the joint-
stock plan, see Skinner Dry Dock
Co. V. Mayor, etc. of Baltimore, 96
Md. 32, 42 (headnote inadequate) ;
63 Atl. 416.
' Winstone's Case, 12 Ch. D.
239.
* Compare the ancient doctrine
that a royal charter of incorporar-
tion must give the corporation some
definite locality. Button v. Wight-
man, Cro. Eliz. 338; Sutton's Hos-
pital Case, 10 Co. 1, 23, 29 et seq.
" Companies Act, 1862, § 8.
« Id. § 40.
' Id. § 41, § 42.
« Id. § 32, § 43. .
» Id. 5 02.
102
§ 31-§ 162] CHIEF OFFICE OR PLACE OF BUSINESS § 114
^ location of the company's ohi^f nffire or place of business in the
state shall be specified in the incorporati9^, ,y§,pgr!,' A pi'Ul'lHllwi'"
^ mat me" incofporalion paper shall specify the company's " prin-
cipal place of business " is not satisfied by a statement that " the
operations of the company are to be carried on" in such and
such a place: the operations of the company might be carried
on in one locality and its principal office or place of business be
in a different region.^ And conversely a requirement that the
place of business be specified is not satisfied by mentioning the
location of the chief office.^ On the other hand, to specify a cer-
tain locality as the company's place of business would seem to
comply with a requirement that the principal place of business be
specified.* Where the statute requires that the "names of the
city or town and county" in which the principal place of busi-
ness is to be located shall be specified, the giving of the name of
a county without mentioning any city or town is not a compliance
with law.^ Where the law requires that the incorporation paper
shall specify both the city or town in which the chief office or
place of business shall be located and the place at which the
officers shall be elected, nevertheless an instrument which gives
' As to an effect of a provision the incorporation paper as the prin-
for the transaction of business by cipal place of business, see Dressel
the company in a foreign state,. see v. North State Lumber Co., 107 Fed.
Pinney v. Nelson, 183 U. S. 144; 255; Montgomery v. Forbes, 148
22 Sup. a. 52. Mass. 249.
As to the effect of moving the QjHarris v. McGregor, 29 Cal. 124
company's chief office or place of (headnote inadequate),
business from the place named in ' Enterprise Mut. Beneficial Ass'n, ,
the incorporation paper without 10 Phila. 380; Kennett v. Wood-
duly altering that instrument, see worth-Mason Co., 68 N. H. 432
Uptegrove v. Schwarzwadder, 46 (headnote inadequate) ; 39 Atl. 535.
N. Y. App. Div. 20 ; 61 N. Y. Supp. Cf. Bernstein v. Kaplan (Ala),
623, affirmed short, 167 N. Y. 587 ; 43 So. 581 (where the incorporation
60 N. E. 1121. Cf. Firestone Tire, act was held to use "principal
etc. Co. V. Vehicle Equipment Co., office" and "principal place of busi-
155 Fed. 676 (holding that for the ness" as synonyms),
purpose of determining the federal ', Spring Valley Water Works, 17
judicial district in which a corpora- CaJ_132.
tion is suable, it is to be deemed an Qliarris v. McGregor, 29 Cal.
inhabitant or resident of the dis- 124 (headnote misleading),
trict in which its chief office as desig- As to the degree of precision to
nated in the incorporation paper is satisfy requirements as to the com-
situated). pany's office or place of business,
As to carrying on business at a see also People ex rel. Belknap v.
different place from that named in Beach, 19 Hun (N. Y.) 259.
103
§115
THE INCORPORATION PAPER
[Chap. II
the location of the company's chief office but makes no mention
of the place for the election of officers complies with the law ; ^
for it will be presumed that the officers are to be elected at the
chief office. The location of the chief office, even when not
fixed by the company's incorporation paper or special act, is
often a matter of considerable importance in determining the
courts in which the corporation is liable to suit, and so forth ;
and consequently, even in such cases the location of the office
when once fixed by custom cannot be changed by the com-
pany's administrative officers without the assent of the directors
or shareholders.^ The incorporation law may be deemed so
far colorably complied with that the company may be incor-
porated ^^^tcfo, although the incorporation paper fails to state
distinctly, as required by law, the company's place of businesa^
§ 115. Directors Clause. — Not_inf req uently, incorporation
laws require that the incorporation paper shall fix the
number of the directors, and shall state the names of the first
directors^./ This requirement, although of less importance than
the objects clause and the capital clause is nevertheless manda-
±OTv and a total failure to comply therewith renders the incor-
porSttion open to attack.^ 'So, a blank left for the names of the
first directors is deemed a material blanldl/So, where the statute
provides that the number of the directors shall be not less than
three, an instrument which^xes two as the number of the di-
rectors is fatally defectiv4L/*In one case, a requirement that
\j) Mc Chesney v. Batman (Ky.),
89 S. W. 198.
= Frick Co. v. Norfolk, etc. R. R.
86 Fed. 725; 32 C. C. A. 31.
' Reed v. Richmond Street R. R.
Co., 50 Ind. 342.
Cf. Dutchess, etc. R. R. Co. v. Mab-
hett, 58 N. Y. 397; People y. Sei-
V. Noerenberg, '52 fridge, 52 Cal. 331 (a failure to
M&n. 239, 245; 53 N. W. 1150; state, as required by statute, that
38 Am. St. Rep. 552. a majority of the members of the
But see Harris v. McGregor, 29 association were present and voted
Cal. 124. at the choice of directors held fatal) ;
* As to a provision attempting St. Ladislaus Beneficial Ass'n, 19
to vest the exclusive management Pa. Co. Ct. Rep. 25.
of the company for a period of years But see Mead v. Keeler, 24 Barb,
in the first directors, see infra, § 122. (N. Y.) 20 (where the court said
Of course, it is not necessary to that the statute was directory
state 'in the incorporation paper the merely).
names of the first directors unless " Dutchess, etc. R. R. Co. v. Mah-
the statute requires it to be done ; bett, 58 N. Y. 397.
Miller v. Wild Cat Gravel Road Co., ' Germania Sangerbund, 12 Pa.
52 Ind. 51, 57. Co. Ct. Rep. 89.
104
§ 31-§ 162] DURATION OF EXISTENCE § 116
the names of the first directors should be stated in the paper
was held to be satisfied if the directors were chosen at th
meeting of the incorporators at which the paper was adoptei
but this case certainly goes to the verge of -the law, and is justly
discredited by later decisions in the same stat^l^ A statement
that the affairs of the company shall be under the control of the
president, the vice-president, and the secretary, does not satisfy
a requirement that the number of directors and the,^names of
■those who are to act for the first year must be state^^ The di-
rectors named in an incorporation paper in pursuance of a statu-
tory direction have the same powers as directors elected by the
shareholders.* Whether provisions requiring directors to be
shareholders apply to directors named in an incorporation paper
has been the subject of some debatei) It has been held that
every person named as directoFin the incorporation paper must
be a corporator, that is, must sign the incorporation paper ; °
but this conclusion was deduced from the premisses that as
directors they were required to be shareholders and that they
could not be shareholders without executing the incorporation
paper, and yet the former premiss is by the weight of authority
false.' A statutory provision that an incorporation paper shall
state "the number of directors and their names who shall manage
the company for the first year" does not require the number
of directors to be fixed permanently at the number stated in the
incorporation paper but applies only to the first directors.*
§ 116. Duration of Corporate Existence Clause. — The period
of time during which the corporate existence is to con-
tinue must also, under the statutes in force in many states, be
mentioned in the incorporation paper. At common law, a cor-
poration was "immortal," that is, was never dissolved by mere
lapse of time. But .after the Dartmouth College Case had es-
' Eakright v. Logansport, etc. R. R. 487, 506-509. People ex rel. Gales v.
Co., 13 Ind- 404. McDonough, 28 N. Y. Misc. 652
' See Reed v. Richmond Street (headnote inadequate) ; 60 N. Y.
R. R. Co., 50 Ind. 342; Busenback Supp. 45.
V. Attica, etc. Gravel Road Co., 43 ' See infra, § 1420.
Ind. 265. ' Renn v. United States Cement
' Bates V. WUson, 14 Colo. 140; Co. (Ind.), 73 N. E. 269. As to
24 Pac. 99. changing tiie number of directors,
* Infra, § 168. see Westchester Trust Co., 186 N. Y.
« See infra, § 1420. 215.
' Dancy v. Clark, 24 App. D. C.
105
§ 116 THE INCORPORATION PAPER [ChAP. II
tablished the irrepealability of legislative charters of incorporar
tion, this attribute of immortality was seen to be especially
dangerous, and accordingly the custom sprang up of prescrib-
ing^in acts..Qf-.incorp6ration some limit to the company's exisTT
ence. This custom tosome_extent^ survived aftfii,.jjie_flccasion
for it had,_been_rgmoYed by the usual reservation to Jhe state
of the riqfht to repeal cnartSo?incOT Some of the
less liberal general incorporation laws still in force in the United
States provide that thg^ period of ^astenceoT companies or-
ganized under them^^j,ll,jiot exceed a certain fimTt "Where
"fhe statute'provides that the incorporatioiT^ipCT'sESll state the
time during which the corporate existence is to continue, doubt
has been expressed whether a statement that the company's
existence is to be perpetual satisfies the law; but all doubt
could be obviated and at the same time practically perpetual
existence attained by stating that the corporation shall continue
for, say, two thousand years. A statement that the corporate
existence shall^^^ot exceed the term of forty years" is suffi-
ciently definitri-^jjl^p^eed. even the fact that an incorporation
paper provides for a longer period of corporate existence than
that allowed by the statute will not preyent the company from
becoming incorporated c^e jure:' for the courts will construe
the mstrument as providing for as long a period of corporate
existence as allowed by law, rejecting as surplusage the pro-
vision for a continuance of corporate life for a further period.
A provision that the corporation shall have "perpetual suc-
cession" does not necessarily mean that its existence shall
continue without limit, but rather that it shall have continuous
succession during such period of time as may be limited by,
other provisions of the incorporation paper or of the statut^y
On the other hand, a provision that the company shall have
"perpetual succession forever" does amount to a provision for
perpetual corporate existence©
A company whose existence is limited to a term of years is not
on that account debarred from taking a conveyance of land in
* Hughes v. Antietam Mfg. Co., ' State v. Scott County, etc. Road
34 Md. 316. Co. (Mo.), 105 S. W. 752, 757 ; State
' People ex rel. Bernard v. Cheese- ex rel. Walker v. Payne, 129 Mo.
men, 7 Colo. 376, 379-380; 3 Pao. 468; 31 S. W. 597; 33 L. R. A. 576.
716. * State v. Starmont, 24 Kan. 686.
106
§ 31-§ 162] THE NAME CLAUSE § 117
fee simple/ or from contracting for the use of property at an
annual rental for a longer term ^ even though the lease contain
a clause prohibiting an assignment without the consent of the
lessor.^
Usually, statutory provision is made for extending the period
of corporate existence.*
§ 117. Name Clause. — The name of the proposed cor-
poration, must . nertflinlv be stated : aiid" the name thus stated
will be the lawful name of the compan^ unless it be altered in
some legal mode. If the statute requires the incorporation
paper to set forth the name of the company, an instrument
which mentions no corporate name is fatally defective even
though the words " Fairview Turnpike " are placed at the head
of the pape^ix Indeed, the name is a matter of considerable
importance. Hence, where the incorporation law requires the
name of the proposed company to be published by advertise-
ment in some newspaper, a variation between the name as pub-
' Nicoll V. New York, etc. B. R. * National Lead Co. v. Dickinson,
Co., 12 N. Y. 121 ; Detroit v. Detroit 57 Atl. 138 ; 70 N. J. Law 596,
Citizens' By. Co., 184 U. S. 368, 394- affirmed short, 62 Atl. 1135 (stated
395 ; 22 Sup. Gt. 410. infra, § 151) ; Commonwealth v. Ldck-
Cf. Blair v. Chicago, 201 U. S. ing Valley Bldg. Ass'n, 82 S. W. 435 ;
400 ; 26 Sup. Ct. 427. 26 Ky. Law Rep. 730 ; Mayor, etc.
' Union Pac. By. Co. v. Chicago, of Jersey City v. North Jersey, etc.
etc. By. Co., 163 U. S. 564, 692 ; 16 By. Co. (N. J.), 63 Atl. 906.
Sup. Ct. 1173 ; Brown v. Schleier, 118 Cf. Frostburg Mining Co. v. Cum-
Fed. 981, affirmed in 194 U. S. 18; berland, etc. B. B. Co., 81 Md. 28;
2iSmp.Ct. 55S; Consolidated GasCo., 31 Atl. 698 (special act extending
106 N. Y. Supp. 407 (franchise to lay or reviving corporate existence held
gasmainsinstreetsof city not limited not to create a new corporation);
to period of corporate existence). Clement y. U. S., 149 Fed. 305 (as
Cf. HiU V. Atlantic, etc. B. B. Co. to conclusiveness of comptroller's
(N. Car.), 55 S. E. 854; Bockwith certificate of renewal of existence
ex rel. Kerns v. State Boad Bridge of national bank).
Co. (Mich.), 108 N. W. 785 (grant » Cf. Town of East Borne v. City
of a bridge franchise held to expire of Borne (Ga.), 58 S. E. 854 (holding
on the termination of the period that where charter provides that
fixed for the termination of the the corporation " shall be known
grantee's corporate existence) ; and called the town of E. R." and
Union Bank v. Bidgely, 1 H. & G. that the corporate name shall be
(Md.), 324, 433-434 (bond to secure the " Mayor and City Council of the
fidelity of employee limited to time town of E. R.," the latter is the
of corporate existence as fixed in only legal corporate name),
special act of incorporation). ° Piper v. Bhodes, 30 Ind. 309 ;
' Weeks v. International Trust Bhodes v. Piper, 40 Ind. 369.
Co., 125 Fed. 370, 373-374; 60 C.
C. A. 236.
107
§1 118 THE INCOEPOKATION PAPER [ChAP. II
lished and the name as given in the incorporation mper will
justify a refusal to approve or register the instrument^^On the
other hand, where a statute requires the consent of municipal
.authorities to the incorporation of a water-works company, the
consent need not mention the precise corporate name stated
in the incorporation paper : ^ the consent required is a consent
to the formation of the corporation by the persons who sign the
instrument and not a consent to the adoption of the proposed
corporate name. The matter of corporate names is the subject
of a separate chapter.^
§ 118. Indebtedness Clause. — Some incorporation laws re-
quire that every incorporation paper shall fix the highest amount
of indebtedness to which the company is at any time to be sub-
jecAi/ Such a provision is -mandatory, and a failure to comply
therewith is a substantial defectlPlt has been held that such
a provision is complied with by stating that the amount of the
company's indebtedness shall not exceed a certain named sum
"except by a majority vote of the stockholders present at a
called or annual meeting. '^3^ The court said that the paper did
fix the maximum amount of indebtedness, and that the pro-
vision of a method by which that maximum might be increased
did not alter this fact ; but this reasoning is far from satisfactory,
since the provision in question amounts to no more than a pro-
vision that the company shall not incur indebtedness in excess
of the amount named unless it chooses to do so. A statute for-
bidding the borrowing of money in excess of "one half of the
par value of the capital stock" has been held to refer to the
paid-up capital rather than to the authorized capital ; ' and
' St. Ladislaiis, etc, Ass'n, 19 Pa. debts of the company in case of
Co. Ct. Rep. 25. failure to "comply substantially"
' Kemhle v. MilviUe, 69 N. J. with the statute).
Law 637; 56 Atl. 311. " Thornton v. Balcom, 85 Iowa
' Infra, Chapter VIII. 198 ; 52 N. W. 190.
* As to the power of corporations Cf. Park v. Zwart, 92 Iowa 37 ;
to borrow where the incorporation 60 N. W. 220.
paper is not required to and does ' Commonwealth v. Lehigh Ave.
not contain any provision on the Ry. Co., 129 Pa. St. 405; 18 Atl.
subject, see supra, § 69. 414, 498; 5 L. R. A. 367.
' Heuer v. Carmichad, 82 Iowa As to what is to be talcen as the
288; 47 N. W. 1034 (holding that amount of the capital within the
non-compliance renders shareholders meaning of such provisions limiting
liable under a statute subjecting the amount of authorized indebted-
their individual property to the ness, see further, Poole v. West Point
108 '
§ 31-§ 162] THE INDEBTEDNESS CLAUSE
^ns
the court which pronounced that decision would doubtless con-
strue a similar provision in an incorporation paper in the same
way. A provision that the company shall not become indebted
to an amount exceeding its capital stock except upon debts of
a certain character will not prevent the company from borrow-
ing to the amount of its capital irrespective of the amount for
which it may have become indebted for debts of the excepted
class.'
A clause in an incorporation paper limiting the amount of
indebtedness which the company mawncur would seem to be
mandatyyi^nd not directory merel\('> Consequently, to incur
any indebtedness in excess of the limit is vltra vires. In Eng-
land, the indebtedness in excess of the limit would perhaps be
void^whereas in the United States after the ultra vires con-
tract is fully executed on one side by the advance of the money,
the company would be liable for the amount of the loan either
on the express contract or quasi ex contractu}
Butter, etc. Co., 30 Fed. 513 ; C^t7^-
ningham v. German Ins. Bank, 101
Fed. 977 ; 41 C. C. A. 609 ; Farmers'
L. & T. Co. V. Toledo, etc. Ry. Co.,
67 Fed. 49, 56-58.
' Weber v. Spokane Nat. Bank,
€4 Fed. 208 (construing U. S. Rev.
Stales., § 5202, as to national banks).
/^BeU & Coggeshall Co. v. Ky.
GMs Works Co. (Ky.), 50 S. W. 2 ;
20 Ky. Law Rep. 1684 ; First Nat.
Bank v. D. Kieffer Co., 95 Ky. 97;
23 S. W. 675 ; WenLock v. River Dee
Co., 10 A. C. 354 (construing a
special act).
But of. Weber v. Spokane Nat.
Bank, 64 Fed. 208 (stated infra,
§ 1070) ; Sherman Center Tovm Co.
V. Morris, 43 Kan. 282 ; 23 Pac. 569 ;
19 Am. St. Rep. 134 (declaring that
■where statute does not require the
incorporation paper to fix a limit to
the indebtedness to be incurred by
the company a clause naming such a
limit has no more force than a by-
law and is merely directory); Ossi^
pee, etc. Mfg. Co. v. Canney, 54 N. H.
295 (statute limiting indebtedness
declared to be directory).
For a method of evading a
limitation on the amount of author-
ized indebtedness, see supra, § 70.
» See infra, § 1031.
But as to the rights of a bona
fide purchaser of a negotiable in-
strument without knowledge that
the limit had been exceeded, see
Gordon v. Sea Fire Life Ass. Soc.,
1 H. & N. 599, and infra, § 1705.
* Sioux City Terminal, etc. Co. of
North America, 82 Fed. 124; 27
C. C. A. 73; Garrett v. Burlington
Plow Co., 70 Iowa 697 ; 29 N. W.
395; 59 Am. Rep. 461 (where the
creditor was a director) ; Warfield
V. Marshall County Canning Co., 72
Iowa 666; 34 N. W. 467; 2 Am.
St. Rep. 263 (creditor a director);
Beach v. Wakefield, 107 Iowa 567;
76 N. W. 688 ; 78 N. W. 197 (apply-
ing the same rule to debts secured
by mortgage contracted by a rail-
way company in excess of a statu-
tory limit) ; Union Trust Co. v.
Mercantile Library Hall Co., 189
Pa. St. 263 ; 42 Atl. 129.
Cf. Poole v. West Point Butter,
etc. Ass'n, 30 Fed. 513; Vanderveer
v. Asbury Park, etc. Ry. Co., 82
Fed. 355 ; Kraniger v. People's Bldg.
109
§119
THE INCORPORATION PAPER
[Chap. II
§ 119. Effect of Failure to state all Particulars required by
Law. — All the legal requirements must be complied with. If
any of the matters required by the statute to be stated is omitted,
the instrument is fatally defective ; ' and even if the attempt
to incorporate be not wholly void, the company will be at best
a de facto corporation. Thus, where a statute provides that an
incorporation paper shall prescribe regulations for transfers of
shares, the instrument should not attempt to delegate to the
directors the power to enact regulations or by-laws on that sub-
]ect.^ The onlyjaofflLfor difference of opinion is upon the ques-
tion whether a given provision ofthejncorporatJQO law.in.respect
'^'^"^^^^^^^^^^^M^^^^^^^S^^^JSm^^^-^^od&Lo^ or
"dtf§clory7 and upon the question jvhether a^failure to, comply
" with^me laanda^fy; reguirementJa..j§^
lo prevMiJ the company from attaining the status oi a, de facto
corporatioi
Soc, 60 Minn. 94; 61 N. W. 904
(holding that a. loan which extends
beyond the Umit is valid up to the
limit but is void as to the excess
where the money was not applied
for the company's benefit) ; Bdl &
CoggeshaU Co. v. Ky. Glass Works
Co. (Ky.), 50 S. W. 2; 20 Ky. Law
Rep. 1684 (holding that a claim
which exceeds the amount of the
limit is vaUd up to the limit but
void beyond as regards other credi-
tors who contracted their claims
without notice that the limit had
been exceeded) ; First Nat. Bank
v. D. Kieffer Milling Co., 95 Ky.
97; 23 S. W. 675 (similar to last
case) ; Humphrey v. Patrons' Mer-
cantile Ass'n, 50 Iowa 607 (holding
that the company is liable for the
excess "at least to the extent of
the consideration received"); Con^
necticiU River Sav. Bank v. Fiske,
60 N. H. 363 (where the court said
it was immaterial whether or not
the loan was vitra vires) ; Inter-
noMonal Trust Co. v. Davis, etc. Mfg.
Co., 46 Atl. 1054; 70 IST. H. 118
(holding that where a mortgage is
executed to secure an issue of bonds
the aggregate of which exceeds the
limit, bonds issued before the limit
is reached are well secured) ; Auer-
bach V. Le Sueur Mill Co., 28 Minn.
291; 9 N. W. 799; 41 Am. Rep.
285 (note issued for loan in excess
of Umit fixed by incorporation paper
valid in hands of bona fide pur-
chaser) ; Wood v. Carry Water Works
Co., 44 Fed. 146 (bona fide pur-
chasers entitled to enforce bonds
issued in excess of two thirds of
capital paid in).
See also infra, § 1705, as to nego-
tiable instruments issued in excess
of the limit.
' WiUiarrts v. Heviitt, 47 La. Ann.
1076.
' Bank of Attica v. Manufac-
turers, etc. Bank, 20 N. Y. 501.
' See infra, § 289, and the present
chapter passim.
Cf. Cayuga Lake R. R. Co. v.
Kyle, 64 N. Y. 185 (company held a
corporation dejado notwithstanding
indefiniteness in stating location of
proposed railway).
no
§ 31-§ 162] UNNECESSARY PROVISIONS § 120
§ 120-§ 122. Insertion of Provisions in Addition to
those required by Law.
§ 120. Right to insert Additional Provisions. — The law
should not prohibit the insertion in an incorporation paper of
ftther provisions over and above the matters required to be
stated; for the instrument is not merely a statutory form but is
also an agreement like articles of partnership. That such addi-
tional provisions may be inserted in the incorporation paper
and when inserted therein become part of the company's funda-
mental constitution, is settled, in England at least. Hence, any
additional provisions so inserted, although not required to be
stated, cannot be altered except in the mode, if any, provided for
altering the essential parts of the instrument,' unless indeed the
incorporation paper itself authorizes alterations of these addi-
tional provisions.^ Although there is no reason why the privi-
lege of inserting in the company's incorporation paper and
embedding in its constitution particulars that are not required
by law to be stated in the instrument should not be held to exist
in America ' as well as in England, yet the privilege, even when
expressly conferred by statute (as is sometimes the case) is not
' Ashbury v. Watson, 30 Ch. D. But see Stevedore's Beneficial
376 (headnote inadequate, — over- Ass'n, 14 Phila. 130 ; Indiana Bond
ruling dicta in Ouinness v. Land Co. v. Ogle, 22 Ind. App. 593, 595;
Corporation, 22 Ch. D. 349, 364, 54 N. E. 407 ; O'Brien v. Cummings,
377, and Winstone's Case, 12 Ch. D. 13 Mo. App. 197 (holding a clause
239, 251, and distinguishing Duke's in an incorporation paper limiting
Case, 1 Ch. D. 620) ; Stevedore's the number of shares which one per-
Benefidal Ass'n, 14 Phila. (Pa.) 130 son might hold of no greater effect
(semble). than a mere by-law) ; Renn v.
But see Oban & Aidtmore-Glen- United States Cement Co. (Ind.), 73
livet Distilleries, 5 Fraser (So.) 1140. N. E. 269 (provision purporting to
' Underwood v. London Music fix number of directors held alter-
/TaW (1901), 2 Ch. 309; Wdsbach able by a mere by-law).
Incandescent Gas Light Co. (1904), In Sherman, etc. Town Co. v.
1 Ch. 87. Morris, 43 Kan. 282 ; 23 Pac. 569 ;
Cf. Nelson v. Keith^'Brien Co. 19 Am. St. Rep. 134, it was said,
(Utah), 91 Pac. 30 (stated infra, obiter, that a provision in an incor-
§ 144 note). poration paper fixing a limit to the
' Cf. Mohawk Nat. Bank v. Sche- amount that the company is au-
nectady Bank, 78 Hun (N. Y.) 90; thorized to borrow has, where the
28 N. Y. Supp. 1100; Gibbs v. Long law does not require such limit to
Island Bank, 83 Hun (N. Y.) 92; be stated, the force of a by-law only.
31 N. Y. Supp. 406 ; Bent v. Under- In Grangers' Life, etc. Ins. Co. v.
down. 156 Ind. 516; 60 N. E. 307. Kamper, 73 Ala. 325, 341, it was
111
§ 121 THE INCORPORATION TAPER [ClIAP. II
very often availed of on this side of the Atlantic. Indeed, Ameri-
can lawyers have scarcely begun to appreciate the scope that is
given for legal ingenuity in drawing incorporation papers. By
means of this right of adding to the indispensable provisions
of these instruments, it may be possible to secure some of the
advantages of the elasticity and freedom of regulation that the
English system of "articles" or recorded by-laws affords.
§ 121. TTnauthorized as distinguished from Unnecessary Pro-
visions — EfEect of inserting. — Of course, care must be taken
that any additional provisions inserted in the incorporation
paper over and above the particulars required to be stated shall
not be contrary to law. For provisions which are expressly or
impliedly prohibited, as distinguished from merely unnecessary
provisions, are, if inserted , ineffective. To be sure, even prohibited
provisions do not have the effect of invalidating the whole in-
strument provided all that is required by law to be stated is
found therein.' Utile per inviile non vitiatur. The prohibited
provisions are void, but they do not vitiate the rest of the in-
strument. Thus, where the statute requires the assent of the
shareholders to any increase of capital, a provision in the in-
corporation paper purporting to authorize an increase of capital
by the directors alone, although of course itself void, does not
prevent the company from being legally incorporated.^ So, a
provision purporting to limit or diminish the shareholders'
legal liability to creditors is simply void.' Similarly, where the
law authorizes incorporation for certain purposes, an incorpora-
tion paper which besides specifying those purposes adds others
not warranted by law, the company is validly incorporated, but
said that "there is no authority of lating transfers of shares are un-
law for introducing more into it authorized; Bullqrd v. Bank, 18
(the incorporation paper), and if Wall. 589 (headnote inadequate),
more be introduced it is mere sur- ' See in addition to cases cited
plusage, not adding to or detracting below, Becket v. Uniontovm Bldg.
from the force of the declaration." Ass'n, 88 Pa. St. 211 ; Albright v.
The National Banking Act pro- Lafayette, etc. Ass'n, 102 Pa. St. 411.
vides that the incorporation paper ' Eastern Plank Road Co. v.
of a national bank may in addition Vaughan, 14 N. Y. 546.
to the required particulars contain Cf. Grangers' Life, etc. Ins. Co.
other provisions for the regulation v. Kamper, 73 Ala. 325.
of its affairs; and it has been held " Van Pelt v. Gardner, 54 Nebr.
that under this statute provisions 701 ; 75 N. W. 874. See also infra,
in the articles of incorporation regu- § 122.
112
§ 31-§ 162] UNNECESSARY PROVISIONS § 121
cannot exercise the additional powers unwarrantably sought to
be conferred upon it.' It has recently been held in England
that where a statute authorizes a reduction of capital, if pro-
vided for in the articles or by-laws, a clause in the incorpora-
tion paper providing for a reduction does not have the same
effect as a similar clause in the articles, but is wholly void.^
This decision is technical, and on principle one would have
thought that any provision which is permissible and effective if
found in the by-laws or articles should be legal and effective if in-
serted in the incorporation paper or memorandum of association.
If the law requires the paper to be approved by a judge
or other public officer, he may withhold his approval if the
paper contains any prohibited provisions ; ' and, indeed,, even
a mere registrar charged with ministerial functions may
refuse to record an instrument which contains any illegal provi-
' Heck V. McEwen, 12 Lea commercial railway) ; Saunders v.
(Tenn.) 97; Shick v. Citizens' En- Farmer, 62 N. H. 572 (held a cor-
terprise Co., 15 Ind. App. 329; 57 poration de facto).
Am. St. Rep. 230 _ (distinguished in Quaere, what would be the effect if
Wiiliams v. Citizens' Enterprise Co., some of the objects be not merely
25 Ind. App. 351, 354; 57 'N. E. unauthorized but actually illegal or
581) ; Cowell v. Springs Co., 100 immoral. Cf. infra, Chapter V.
TJ. S. 55, 60 (headnote inadequate) ; In some cases a clause in an in-
Tennessee, etc. Lighting Co. v. Massey, corporation paper has been thought
56 S. W. 35 (Tenn.) ; Shoun v. Arnv- to constitute, so to speak, color of
strong, 59 S. W. 790 (Tenn.) ; Humph- authority for the exercise of powers
reys v. Mooney, 5 Colo. 282, 292. therein conferred even though those
But see State ex rd. Lederer v. powers be not authorized by the
International Investment Co., 88 incorporation law: Prairie Lodge
Wise. 512 ; 60 N. W. 796 ; 43 Am. St. v. Smith, 58 Miss. 301 (headnote
Rep. 920 (where the unauthorized inadequate) ; Carson City Sav. Bank
object was thought to be the pri- v. Carson City Elevator Co., 90 Mich,
mary purpose and the authorized ob- 550 ; 51 N. W. 641 ; 30 Am. St. Rep.
jects merely subordinate purposes 454.
of the incorporation). ' Dexine Patent Packing & Rubber
Cf. Bayou Cook,'etc. Co. v. Dovllat, Co., 88 L. T. 791.
35 So. 729; 111 La. 517; David ' Butchers' Beneficial Ass'n, 35
Bradley Mfg. Co. v. Chicago, etc. Pa. St. 151; Agudath Hakehiloth,
Traction Co. (111.), 82 N. E. 210 18 N. Y. Misc. 717 ; 42 N. Y. Supp.
(held, that where a corpora,tion is 985; Benevolent Society, 10 Phila.
incorporated to operate a "street (Pa.) 19; Woodberry v. McClurg,
railway" under a law providing for 78 Miss. 831 ; 29 So. 514; Miller v.
the incorporation of commercial Tod, 67 S. W. 483 ; 95 Tex. 404 ;
interurban railways only, the word People v. Rose, 188 111. 268 ; 59 N. E.
"street" should be regarded as px- 432.
punged from the incorporation Cf. Medical College of PhUadel-
paper and the company deemed a phia, 3 Whart.(Pa.) 445.
VOL. I. ~ 8 113
§ 122 THE INCOEPOKATION PAPER [ChAP. II
sions.' But on the other hand the action of a ministerial officer
in recording the instrument does not preclude judicial inquiry
into the legality of any of its provisions.^
§ 122. What Provisions are unauthorized. — The existing au-
thorities do not afford much aid in determining what provisions
in an incorporation paper are illegal and void, where a provision
is not deemed illegal merely because it is not required. Any
provision that is contrary to express or implied statutory regula-
tions* of course cannot stand.' Thus, where the purchase by
a corporation of its own shares is deemed to be illegal, a clause
in an" incorporation paper purporting to authorize the company
to purchase its own shares would doubtless be void.* So, a
clause purporting to vest in the directors a discretion to declare
dividends at any time, whereas a statute requires the dividend
days to be fixed, would be void.^ A federal judge sitting in
Louisiana has held that a piovision in an incorporation paper
purporting to give the company a lien on its shares for debts
owing by the holders is void;' but this decision appears to
» Dancy v. Clark, 24 App. D. C. Whalen, 104 N. Y. Supp. 555 ; Lin-
487; State ex rd. Gorman v. Nichols coin Bldg., etc. Ass'n v. Graham, 7
(Wash.), 82 Pac. 741 ; People ex Nebr. 173 (headnote inadequate —
reZ. Barney v. Whalen, 104 N. Y. clause purporting to authorize lend-
Supp. 555 ; Rex v. Registrar Joint ing at usurious interest).
Stock Companies (1904), 2 Ir. 634 * Infra, § 627. Cf. § 624.
(where the name of the company ^ Marquand v. Federal Steel Co.,
contained a false statement) ; Peo- 95 Fed. 725.
pie ex rd. Blossom v. Ndson, 46 N. ° New Orleans Nat. Banking
Y. 477 (attempt to form a corpora- Ass'n v. WUtz, 10 Fed. 330 (head-
tion for business purposes, in addi- note inadequate),
tion to the purpose of promoting Cf. O'Brien v. Cummings, 13 Mo.
the temporal interests of others, App. 197 ; Lyman v. State Bank of
under a statute for formation of Randolph, 81 N. Y. App. Div. 367;
benevolent and charitable corpora- 80 N. Y. Supp. 901, affirmed short
tions); People ex rd. Barney v. 179N. Y. 577; 72 N. E. 1145.
Whalen, 106 N. Y. Supp. 434. The decision in Third Nat. Bank
Cf. People V. Bose, 219 111. 46 ; 76 v. Buffalo German Ins. Co., 193
N. E. 42 (where the instrument U. S. 581, that a provision in the
adopted the same name as an ex- "articles of association" of a na-
isting company) ; State ex rd. Os- tional bank, which perform some
borne v. Nichols, 38 Wash. 309 ; of the functions of an incorporation
80 Pac. 462. paper, purporting to give the bank
' People ex rd. Peahody v. Chicago a lien on its several shares for debts
Gas Trust Co., 130 111. 268, 22 N. E. owing by the respective holders, can
798, 17 Am. St. Rep. 319; 8L. R. A. be explained by the fact that the
497. Cf. infra, § 267. national bank act expressly forbids
' Cf. People ex rd. Barney v. banks to lend on the security of
114
§ 31-§ 162] UNNECESSARY PROVISIONS § 122
have been ill considered, and was reached by assimilating an
incorporation paper, or so-called charter, to mere by-laws,
without adverting to the cardinal distinction between them in
that the one is matter of record so that all who deal with the
company have constructive notice, while mere by-laws rest in
pais. Accordingly, the Supreme Court of Iowa in a well-reasoned
judgment, while recognizing that where a mere by-law confers
upon the corporation a lien upon its shares for debts due from
the shareholders, bona fide purchasers of a share-certificate are
not affected thereby, nevertheless held that a similar provision
contained in an incorporation paper creates a lien which is
effective against all the world, because everybody has construc-
tive notice of the contents of the incorporation paper.' In
Indiana, a provision declaring that shares may be issued at a
discount has been held effective,^ but the opposite result was
reached by the Supreme Court of Ohio in a case relating to
a West Virginia corporatioti.' A Vice-Chancellor of New
Jersey has expressed the opinion that a clause in an incorpora-
tion paper authorizing the directors to bind the company without
a board meeting is void although the New Jersey law expressly
authorizes the insertion in an incorporation paper of "any
provision creating, defining, Umiting and regulating " the powers
of directors ; * but this expression of opinion, although sup-
ported by an elaborate statement of reasons, was not strictly
necessary to the decision, and is submitted to be so narrow and
unjust that the New Jersey Court of Errors, which is distin-
guished for breadth and sanity of judgment in matters of
corporation law, is unlikely to reach the same conclusion.*
their own shares and by the fact ' Security Trust Co. v. Ford
— which seems to have had more (Ohio), 79 N. E. 474. Accord:
weight with the court — that Con- Twigg v. Thunder Hill Mining Co.,
gress, by repealing the express pro- 3 Brit. Columb. 101.
vision in the Act of 1863 for such ' Audenried v. East Coast Milling
liens, had indicated a legislative in- Co. (N. J.), 59 Atl. 577.
tent that the shares should be alien- ' CSf. Bell & Coggeshall Co. v.
able without any such restriction. Ky. Glass Works Co., 50 S, W. 2;
' Dempster Mfg. Co. v. Down, 126 20 Ky. Law Rep. 1684 (enforcing
Iowa 80 (headnote inadequate) ; 101 a clause in an incorporation paper
N. W. 735; 106 Am. St. Rep. 340. which vested the management of
' Bent v. Underdown, 156 Ind. the company in executive officers
516 ; 60 N. E. 307. Cf. Street & Co. who were to act without a meeting).
17 Vict. L. R. 717.
lis
§ 123 THE INCORPORATION PAPER [ChAP. II
One of the inferior courts in Pennsylvania has even gone so
far as to hold that a provision in an incorporation paper of a
social club providing that a member shall have as many votes at
elections of oflBcers as he holds shares is void;' and this decision
is the more remarkable because a similar provision in mere
by-laws is by the weight of authority quite valid.^ A clause in
an incorporation paper vesting the exclusive control of the
company in the first directors for a period of years, and provid-
ing that until the expiration of that time the shareholders should
have no right to vote or hold meetings (except in an advisory
capacity), has been held by a federal judge to be valid and not in
conflict with statutory provisions for annual and other meetings
of shareholders, which provisions were construed to apply only
to those companies whose incorporation papers contain no
stipulation to the contrary.* This decision is remarkable among
American cases in that it errs, if at all, on the side of a liberal and
elastic construction of the law. Accordingly, one is not sur-
prised to find that an Indiana court upon very similar facts
has reached a diametrically opposite conclusion.*
§ 123. Incorporation of other Documents into Instrument
by Reference. — By analogy to accepted principles relating to
deeds of real estate and similar instruments, an incorporation
paper may refer to, and by reference incorporate, any existing
recorded paper ,^ but not an unrecorded document or a document
not at the time in existence. Thus, a reference in the incorpora-
tion paper to by-laws to be subsequently adopted by the com-
pany will not make such by-laws part of the company's recorded
' Commonwealth ex rel. Nicker- copies of each other, but each signed
son V. Conover, 30 Leg. Int. (Pa.) by different persons) ; Monroe Re-
200. publican Clvh, 6 Pa. Dist. R. 515
^ See infra, § 1216. (application for charter typewritten
' Union Trust Co. v. Carter, 139 upon several sheets of paper joined
Fed. 717. together with eyelets, instead of
* State ex rel. Ross v. Anderson, being written upon one single sheet,
67N. E.207; 31 Ind. App. 34. Baid to be irregular); Stevedore's
" Cf. Lake Ontario, etc. R. R. Co. Beneficial Ass'n, 14 Phila. (Pa.) 130
V. Mason, 16 N. Y. 451 (where arti- (similar point to last case) ; Ac-
ticles of incorporation consisted of countants' Ass'n, 5 Pa. Dist. Rep.
several separate instruments, exact 699 (similar point to last two cases).
116
§ 31-§ 162] EXECUTION OF INSTRUMENT
§124
constitution nor charge persons who may afterwards deal with the
company with notice of their existence and contents.'
§ 124-§ 131. Execution of Instrument.
§ 124. In general — Signature — Number of Subscribers, etc. —
An incorporation paper must of course be signed; if unsigned,
it is a nullity.' Moreover, it must be signed by the number of
subscribers required by law. This is an essential point.^ Thus,
if the law requires, say, five or more subscribers, a paper signed
by three only is invalid.* On the other hand, where the law
requires three subscribers, two of the three may be husband and
wife ; ^ baron and feme are not nowadays for this purpose
regarded as one person. Signature by a mark is suflScient.'
A fortiori, a subscriber need not sign his full name : a signature
designating a subscriber's Christian name by an initial merely
is sufficient.'' If the stflfiHtr pr—""*" *^"* *^'^ pliirft "f ff«''rlp"'^p
qf^the subscribers skall ht- stfi.tpf] th° p^^^-'^^hn r Tr°"rlltnriy a
failure to give the place ot residence of each of a number sufficient
to perfect the organization cannot be deemed disregard of a
mere directory provision.*
' Royal Bank of India's Case, 4
Ch. 252.
' Lawrie v. SUshy (Vt.), 56 Atl.
1106 ; 76 Vt. 240 ; 104 Am. St. Rep.
927 ; Unity Ins. Co. v. Cram, 43
N. H. 636 (explained in Ossipee, etc.
Mfg. Co. V. Canney, 54 N. H. 295,
313).
Cf. Kaiser v. Lamrence Savings
Bank, 56 Iowa 104 (headnote in-
adequate) ; 8 N. W. 772 ; 41 Am.
Rep. 85.
' See infra, § 1084.
* Helping Hand Marriage Ass'n,
15 Phila. 644 (headnote inade-
quate) ; Ehoads v. Hoernerstovm
Bldg., etc. Ass'n, 82 Pa. St. 180;
Hamilton Road Co. v. Tovriwend,
13 Ont. Rep. 534; People ex rel.
Weatherly v. Golden Gate Lodge,
(Cal.), 60 Pac. 865; 128 Cal. 257;
State ex rel. Clapp v. Critchett, 37
Minn. 13 ; 32 N. W. 787.
Cf. Johnson v. Okerstrom, 70
Minn. 303, 310; 73 N. W. 147
(paper signed by less than required
number of persons held colorable
compliance with law sufficient to
give rise to incorporation de facto) ;
Duggan v. Colorado Mtge., etc. Co.,
11 Colo. 113, 117 (headnote inade-
quate, — holding that forgery of
one of the requisite minimum num-
ber of signatures is not ground for
collateral attack on validity of
incorporation).
^ Good Land Co. v. Cole (Wise),
110 N. W. 895.
" Board of Trustees of Seventh
Street, etc. Church v. Campbell, 48
La. Ann. 1543 ; 21 So. 184.
' State ex rel. Callings v. Beck,
81 Ind. 500.
' Busenback v. Attica, etc. Gravel
Road Co., 43 Ind. 265. As to such
provisions, see also, Steinmelz v.
Versailles, eic. Turnpike Co., 57 Ind.
457.
117
§125
THE INCORPORATION PAPER
[Cha^. II
§ 125. Sealing of Instrument. — The instrument need not
be under the seals of the subscribers unless the statute so re-
quires; but a provision that the paper shall be under.jseal can-
UOLrbe' deemed directory merely.^ As more fully explained
below, a provision that the paper "shall bind the company
and each member to the same extent as if each member had
signed his name and affixed his seal thereto," does not require
the instrument to be sealed by the subscriber&J)
§126. Acknowledgment -of Instrument. — A provision that
the instrument shall be acknowledged as well as signed isjua^da-
tory ; '" but a magistrate's certificate that the paper was " suK^
scribed and sworn to " before him sufficiently shows that it was
acknowledged.* Where the instrument is required to be acknowl-
edged before a clerk of court or justice bf the peace it is invalid
if acknowledged before a notary publicv'even though the notary
' Grifpn v. Clinton Line, etc. B. R. — headnote inadequate) ; Danne-
Co., 11 Fed. Cas. 27. broge Gold, etc. Co. v. Ailment, 26
Cf. Warner v. Cullender, 20 Ohio Cal. 286 (acknowledgment by one
St. 190. of subscribers by attorney Jield,
' WhiHey Partners, 32 Ch. D. not ground for collateral attack on
337. See infra, § 131. Validity of incorporation where a
' Greenbrier Industrial Exposi- statute forbade such attack if the
tion V. Rodes, 37 W. Va. 738; 17 company claims in good faith to be a
S. E. 305 ; Doyle v. Mizner, 42 corporation) ; Franke v. Mann, 106
Mich. 332; 3 N. W. 968; People Wisc.ll8;81N.W. 1014;48L.R. A.
ex rel. Long Island R. R. Co. v. 856 (lack of acknowledgment no bar
Board of R. R. Commrs., 75 N. Y. to incorporation de facto) ; StdiU v.
App. Div. 106; 77 N. Y. Supp. 380 Zidick. 48 N. J. Law 599 (headnote
(holding acknowledgment by each of inadequate) ; 7 Atl. 362 (formal
the required number of signatories defect in certificate of acknowledg-
to be requisite) ; People v. Monte- ment no bar to incorporation de
dto Water Co., 97 Cal. 276; 32 facto); Central Agricultural, etc.
Pac. 236; 33 Am. St. Rep. 172; Ass'n, y. Ala. Gold Ufe Ins. Co., 70
Kaiser v. Lawrence Savirigs Bank, Ala. 120 (lack of acknowledgment
56 Iowa 104 (headnote inadequate) ;. not fatal to corporate existence
8 N. W. 772 ; 41 Am. Rep. 85. de facto).
Cf. Wall V. Mines, 130 Cal. 27; As to the conclusiveness of a
62 Pac. 386 (provision for verifica- magistrate's certificate of acknowl-
tion by affidavit held mandatory) ; edgment, see inft-a, § 283.
First Nat. Bank v. Rockefeller, 195 ' * CuykendaU v. Douglas, 19 Hun
Mo. 15 (headnote misleading) ; 93 (N. Y. ) 577.
S. W. 761 ; Duggan v. Colorado ' Shields y. Clifton Hill Land
Mortgage, etc. Co., 11 Colo. 113; Co., 94 Tenn, 123; 28 S. W. 668;
17 Pac. 105 (lack of acknowledg- 45 Am. St. Rep. 700; 26 L. R. A.
ment held not to prevent such 509.
colorable compliance with law as Cf. First Baptist Soc. v. Rapalee,
to give rise to a corporation de facto 16 Wend. (N. Y.) 605 (acknowledg-
118
§ 31-§ 162] EXECUTION OF INSTRUMENT § 129
is by another statute authorized in general terms to take acknowl-
edgments of all written instruments.' An acknowledgment taken
by one of the subscribers of the paper in his capacity as notary is
void.^ The officer taking the acknowledgment need not certify
that the persons who acknowledged the instrument are personally
known to him unless such is the express requirement of the
statute, even though as to acknowledgments of deeds of real
estate such a certificate is required.' And, of course, a provision
that the paper shall be " subscribed by five or more, persons . . .
and acknowledged by each" is not satisfied by a papersigned
by five persons but acknowledged by four of them onl^£;
§ 127. Place of Execution. — An incorporation paper may
be both subscribed and acknowledged in a foreign state.^
§ 128. Execution of Duplicate Instruments. — The New York
Court of Appeals in 1857 decided that " articles of associa-
tion" might consist of several distinct papers, exact copies or
transcripts of each other with the exception of the signatures;*
but this case oan hardly be relied upon as approving such a
practice under modern incorporation laws, unless each of the
duplicates is signed by the requisite minimum number of
subscribers.
§ 129. Execution and Delivery in Escrow. — It has been held
that an incorporation paper cannot be executed and delivered
in escrow. That is to say, if such a paper is signed and delivered
to some person with the understanding that it shall not be used
ment before commissioner of deeds ' People ex rel. Bernard v. Cheese-
ineffective when statute requires ac- man, 7 Colo. 376 ; 3 Pac. 716 ; John-
knowledgment before a judge, — a ston v. Eviing Female University,
decision which is criticised in'B«;^aZo, 35 111. 518.
etc. R. R. Co. V. Cary, 26 N. Y. 75, * People v. Monteeito Water Co.,
78, as overlooking the distinction 97 Cal. 276 ; 32 Pac. 236 ; 33 Am.
between incorporation de jure and St. Rep. 172.
<ie facto) ; Hagerma/n v. Ohio Bldg., ' Humphreys v, Mooney, 5 Colo.
etc. Ass'n 25 Ohio St. 186, 200-201 282, 293.
(acknowledgment before notary in- Cf. Re Charter Acknowledgments,
stead of justice of the peace not 28 Pa. Co. Ct. Rep. 187 (Op. of
ground for collateral attack on cor- Atty,-Gen,) ; Dooley v. Cheshire
porate existence). Glass Co., 15 Gray (Mass.) 494.
' State ex rel. Attorney-General v. " Lake Ontario, etc. R. R. Co. v.
Lee, 21 Ohio St. 662. Mason, 16 N. Y. 451.
^ People ex rel. Erie R. R. Co. v. Cf. Sodus Bay, etc. R. R. Co. v.
Board of Railroad' Commissioners, Hamiin, 24 Hun (N. Y.) 390.
105 N. Y. App. Div. 273 ; 93' N. Y.
Supp. 584.
119
§ 130 THE INCORPORATION PAPER [ChAP. II
except upon the performance of a certain condition, nevertheless,
if in violation of these instructions the paper is recorded pres-
ently, no objection can be made on account of the non-perform-
ance of the condition.'
§ 130. Who may act as Subscriber. — -Jl,|ple§,s^ spine positive
restriction is found in the jgtatute any person may ax;t a^ a sub-
,J£Eite^fiijiaJfi££ffJporatisiaPftE?r- Thus, the subscribers are
often required to be citizens,^ but in absence of such a provision
a non-resident or alien may be a subscriber.^ Even an infant, it
has been held, may be a subscriber, and although he may dis-
affirm any agreement to take shares, yet such disaffirmance will
not invalidate his subscription of the incorporation paper after
rights have vested in reliance thereon, and will not render the
incorporation void ab initio;* but on the other hand, in Canada
it has been held, upon reasoning certainly not less forcible, that
the incorporation laws contemplate as corporators only persons
sui juris and not infants.^ Indeed, in a Canadian case, the opin-
ion was expressed that a married woman could not be a cor-
porator ; ° but under modern statutes removing the common
law disabilities of coverture, the rule on this point is different.'
Coke in commenting on the general statute of 39 Eliz., c. 5, for
incorporation of hospitals, says that the act "enables not persons
within age, or feme coverts without their husbands, of nan compos
' Rehbein v. Rafir, 109 Wise. 136 ; Moxie Nerve Food Co. v. Baumbaeh,
85 N. W. 315. 32 Fed. 205; Central R. R. Co. v.
But see Corey & Co. v. Morrill, Pennsylvania R. R. Co., 31 N. J. Eq.
61 Vt. 598 ; 17 Atl. 840. 475 ; Demarest v. Flack, 128 N. Y.
' As to the effect of signature by 205 ; 28 N. E. 645 ; 13 L. R. A. 854 ;
a person falsely stated to be a citi- Humphreys v. Mooney, 5 Colo. 282.
zen, see American Salt Co. v. Heiden- ' Laxon & Co. (2), (1892), 3 Ch.
heimer, 80 Tex. 344 ; 15 S. W. 1038 ; 555.
26 Am. St. Rep. 743, and infra, §283. Of. Nassau Phosphate Co., 2
As to whether the instrument Ch. D. 610.
itself must show on its face that ' Hamilton, etc. Road Co. v.
the subscribers are citizens, see St. Tovmsend, 13 Ont. App. 534.
Ladislaus, etc. Ass'n, 19 Pa. Co. Ct. Cf. Globe Mutual Benefit Ass'n,
Rep. 25; Enterprise Mutual Bene- 135 N. Y. 280; 32 N. E. 122; 17
ficial Ass'n, 10 Pliila. (Pa) 380 ; L. R. A. 547.
Halbert v. San Saba, etc. Ass'n ° Hamilton Road Co. v. Tovm-
(Tex.), 34 S. W. 636 (holding that send, 13 Ont. 534.
citizenship need not appear). Cf. ' Good Land Co. v. Cole (Wise),
Sword V. Wickersham.. 29 Kan. 746. 110 N. W. 895 ; Opinion of Attomey-
As to stating the residence of General, 18 Pa. Co. Ct. Rep. 492 (over-
subscribers, see further, supra, § 124. ruling Re Application of Charter, 27
« Rmss v. Bos, L. R. 5 H. L. 176 ; Wkly. Notes Cas. (Pa.) 399).
120
§ 31-§ 162] EXECUTION OF INSTRUMENT § 131
mentis, or any other persons disabled by law, to found, etc." '
An English text-writer expresses the opinion that a corporation
with the requisite power would be sufficient as a subscriber of
a memorandum of association ; ^ but it is submitted that the
modern incorporation acts contemplate that natural persons
only shall subscribe the incorporation paper, and accordingly
it has been held in America not only that all corporators must
be natural persons,^ but even that a corporation should be re-
strained by injunction from forming a subsidiary corporation
through its agents and officers, acting not individually but on
behalf of their company.* 'A signature in a firm name has been
thought to be sufficient,^ and perhaps such a signature may be
treated as a subscription by the several partners and so valid;*
but the question is on principle open to doubt. Where the
statute requires the incorporation paper to be signed by certain
officers of the projected company, it is sufficient if the paper is
signed by the persons who are in fact those officers, although
their "official character does not appear from the instrument in
question.^ CtMWMirsp.ly. if the sta.t.iite require that the si|)i-_
^^"'W ^"-■■'hrfS r'MfLSiCTi ■'^^CT"^"'"''- ^y fK dirf^ct^nrs of the
*'|T3T7 Signature by Agent or Attorney. — - The English Court
of Appeal has held that a signature by agent or attorney com-
plies with the statute, and that the agent's authority may
be oral merely and need not appear of record." But in that case
' 2 Coke Inst. 722. Junction By. Co., 43 Ark. Ill (head-
^ Palmer's Company Law, 3d ed., note inadequate) ; Day v. Postal
19. It has been held that a corpora- Td. Co., 66 Md. 354; 7 Atl. 608.
tion may found and incorporate a, ' Ogdensburgh, etc. E. B. Co. v.
hospital under the stat. 39 Eliz., o. Frost, 21 Barb. (N. Y.) 541.
5 : Mayor of Newcastle-upon-Tyne v. ° Behbein v. Bahr, 109 Wise. 136 ;
Attorney-General, 12 CI. & Fin. 402, 85 N. W. 315 (where the subscrip-
foUowing 2 Coke Inst. 722. tion was held to be the act of those
' Central B. B. Co. v. Pennsyl- partners only who signed the
vania B. B. Co., 31 N. J. Eq. 475; instrument).
Factors, etc. Ins. Co. v. Harbor Pro- ' St. Louis, etc. B. B. Co. v.
tection Co., 37 La. Ann. 233; Denny Southwestern Tel., etc. Co., 121 Fed.
Hotel Co. V. Schram, 6 Wash. 134, 276; 58 C. C. A. 198.
137 ; 32 Pac. 1002 ; 36 Am. St. Rep. » Valk v. CrandaU, 1 Sandf. Ch.
130. (N. Y.) 179.
* Central B. R. Co. v. Pennsyl- » Whitley Partners, 32 Ch. D. 337.
vania B. B. Co., 31 N. J. Eq. But see Be Charter Acknowl-
475. edgments, 28 Pa. Co. Ct. Rep. 187
But see Niemeyer v. Little Bock (Op. of Atty.-Gen.).
121
§ 132 THE INCORPORATION PAPER [ChAP. II
the instrument was signed personally by seven other persons —
the minimum number prescribed by the statute — so that in
strictness the only question before the court was whether the
signature by attorney was a binding subscription to the number
of shares written after the name; for even if the doubtful signa-
ture had been rejected, the instrument being still signed by the
requisite number of persons, the incorporation would have been
valid. New York Court of Appeals has gone even further and
held that some of the minimum number of subscribers required
by the statute may sign by attorney and that the authority of the
agent, although not apparent of record, will be presumecC^
Statutes sometimes provide^tttat, the instrument shall be exe-
edee
cuted and acknowledged like a deed of real estate ; and in that
case, of course, no execution by proxy could avail unless the
power of attorney were under seal and recorded. But a pro-
vision that the instrument shall "bind the company and each
member to the same extent as if each member had signed his
name and aflSxed his seal thereto " ^ does not require the sub-
scribers to seal the paper and does not make the instrument a
deed so as to require a power of attorney to execute it to be under
seal.'
§ 132. Function of Subscribers as Shareholders or otherwise.
— The English Companies Act and most of the more modern
American incorporation laws require each subscriber to every
incorporation paper to subscribe for at least one share, writing
after his name the number of shares he takes.' But if there be no
such aflBrmative requirement — and this was the case with many
' New York, Lackawanna, etc. For a full statement of the law
Ry. Co., 99 N. Y. 12 ; 1 N. E. 27. respecting subscriptions to shares by
^ Companies Act, 1862, § 11. signing the incorporation paper of
s Whitley Partners, 32 Ch. D. 337. a company, see infra, § 238-§ 248.
' Where an incorporation paper In Valk v. CrandaU, 1 Sandf.
is signed by three persons and con- Ch. (N Y.) 179, where the statute
tains a statement that the stock is required the incorporation paper to
to be "divided half-and-half be- be signed by the shareholders, an
tween the parties," each subscriber instrument signed by the directors
takes one-third of the shares. Bates and giving the names of other share-
V. Wilson, etc. Co., 14 Colo. 140 ; 24 holders, but not signed by them,
Pac. 99. was held invalid.
122
§ 31-§ 162] REGISTRATION OF INSTRUMENT
§133
of the earlier American statutes, some of which are^still in force
— the signatories of the incorporation paper were not necessarily
shareholders.^ Their functions and powers are the subject of
detailed consideration below. ^
§ 133-§ 137. Registration of Instrument.
, § 133. Necessity for Registration. — The registration of the
incorporation paper is a matter of the utmost importance.
By means of the registry, the public is informed, constructively
if not actually, of the objects of the company, of the amount of
its nominal capital, and of the other particulars respecting the
enterprise required by law to be stated. Hence, without regis-
tration in the office of the proper official or registrar, the com-
pany cannot be deemed incorporated even de fact<^J It has
Mo. 310; Cresswell v. Oberly, 17 111.
App. 281 (semble).
But see Vanneman v. Young, 52
N. J. Law 403 ; 20 Atl. 53 (where a
statute providing that upon regis-
tration of the instrument the com-
pany should be incorporated from
the date mentioned in the paper for
the commencement of corporate ex-
istence seems to have been construed
to make the corporate existence upon
recording relate back to the date
mentioned in the instrument, where
the registration was delayed until a
later date) ; Pinkerton v. Pa. Trac-
ton Co., 193 Pa. St. 229; 44Atl.284;
Merrick v. Reynolds Engine, etc. Co.,
101 Mass. 381 (where statute provided
for articles of agreement which were
not required to be recorded, and for
the execution of a certificate by the
officers, which should state the pur-
poses of the company, etc., and was
required to be recorded, the execution
and record of the certificate were held
to be conditions subsequent rather
than precedent to incorporation) ;
Harrod v. Hamer, 32 Wise. 162 (same
point as that of last case).
As to the effect of recording the
paper surreptitiously, without the
authority of the subscribers, see
Picker v. Larkin-, 27 111. App. 625.
' Coyote, etc. Co. v. Ruble, 8 Oreg.
284 ; Densmore Oil Co. v. Densmore,
64 Pa. St. 43, 54 ; Singer Mfg. Co. v.
Peck, 9 S.Dak. 29; 67 N. W. 947;
Bristol, etc. Trust Co. v. Jonesboro,
etc. Trust Co., 101 Tenn. 545; 48
S. W. 228.
But see Dancy v. Clark, 24 App.
D. C. 487, 507-509 (where the sub-
scribers of the incorporation paper
were declared to be shareholders
from the incorporation of the com-
pany, although apparently no stat-
ute made them such).
' Infra, § 165-§ 167.
' Lusk V. Riggs, 97 N. W.,1033;
70 Nebr. 713; Abbott v. Omaha
Smelting Co., 4 Nebr. 416 ; Field v.
Cooks, 16 La. Ann. 153 ; Bigelow v.
Gregory, 73 111. 197 ; Childs v. Hurd,
32 W. Va. 66 ; 9 S. E. 362 ; Brad-
dock Boro' V. Penn Water Co., 189
Pa. St. 379 ; 42 Atl. 15 ; Elgin Nat.
Watch Co. V. Loveland, 132 Fed. 41 ;
Goodale Lumber Co. v. Shaw, 41
Oreg. 544; 69 Pac. 546; Bergeron
V. Hobbs, 96 Wise. 641 ; 71 N. W.
1056 ; 65 Am. St. Rep. 85 ; Guckert
V. Hacke, 159 Pa. St. 303 ; 28 Atl.
249 (attempted to be distinguished
in Pinkerton v. Pa. Traction Co.,
193 Pa. 229) ; Garnett v. Richardson,
35 Ark. 144 ; Hurt v. Salisbury, 55
123
§ 134 THE INCORPORATION PAPER [ChAP. II
been said that the execution of an incorporation paper is anal-
ogous to the execution of a deed of real estate, and that the in-
strument is devoid of legal effect until registration, which is the
equivalent of delivei^ j
§ 134. What must be registered — Copy or Original. — If
the statute requires a copy of the instrument, verified by the
affidavit of two or more subscribers, to be recorded, it has been
held that thg law is not satisfied by the recording of the original
instrument^although the court seems to have thought that the
recording of the original paper might form such colorable com-
pliance with the statute as to give rise to a corporation de facto.
If the statute, as is usually the case, requires registration of the
original, there might be a difficult question whether registration
of a copy would amount even to colorable compliance with law.
§ 135. What amounts to Registration. — The essential ele-
ment in recording is the act of depositing the paper with the
proper officer.' An averment in a pleading that an incorpora-
tion paper had not been filed with the recorder is a sufficient
allegation that it had not been recorded ; * and, conversely, an
allegation that it had been recorded necessarily implies that it
was filed.^ Consequently, an error of the registrar in endorsing
' Humphreys v. Mooney, 5 Colo. 111. 67, 73 (headnote inadequate)
282, 293. 27 N. E. 596 (holding an allegation
^ SiocMTO V. Heati, 105 Wise. 431; that a certificate of incorporation
81N. W. 673; 50 L. R. A. 324. had not been recorded to be an
' See San Diego Gas Co. v. insufficient denial of incorporation.
Frame, 137 Cal. 441 ; 70 Pac. 295 ; as the instrument might have been
Pittston Engine, etc. Co., 11 Pa. Co. filed for record and not actually
Ct. Rep. 182. recorded).
But cf. Btfronville Creamery Ass'n ' Wood v. Union Gospel Church
V. Ivers, 100 N. W. 387 ; 93 Minn. 8 Bldg. Ass'n, 63 Wise. 9 ; 22 N. W.
(where the paper was duly filed for 756.
record but was never actually re- ' Vawter v. Franklin College, 53
corded) ; Johnson v. Okerstrom, 70 Ind. 88.
Minn. 303, 310; 73 N. W. 147 But see B^geron v. Hobhs, 96
(semble, similar point to that of Wise. 641; 71 N. W. 1056; 65
last case). Am. St. Rep. 85 (holding that to
See also State ex rel. O'Brien v. leave the paper with the registrar
Bethlehem, etc. Gravel Road Co., 32 temporarily for the purpose of being
Ind. 357 (holding an allegation that recorded and then withdrawn is not
the paper had not been filed "with compliance with a statute requiring
the recorder," not to be a sufficient it to be filed) ; Bushnell v. Con-
averment that it had not been filed solidated Ice Machine Co., 138 111.
in his office, sed qucere) ; Bushnell v. 67, 73 ; 27 N. N. 596 (stated supra.
Consolidated Ice Machine Co., 138 note 3).
124
§ 31-§ 162] REGISTRATION OF INSTRUMENT § 137
upon the paper an incorrect date as the date of filing in no
respect afPects the validity of the incorporation; ' and the same
is true of an error in recording the paper in a wrong book.^
§ 136. Powers and duties of Registrar. — The registrar may
refuse to record a paper which on its face complies with law if he
has independent knowledge, or finds from extraneous evidence
that some of the requirements of law have not in fact been com-
plied with — for example, if some of the subscribers required
by law to be citizens are in fact non-residents,' a fortiori, the
registrar may refuse to record any paper which on its face is
irregular, for example, if the instrument contain in addition
to the matters required by law further and illegal provisions.'
Although the registrar may and indeed should examine an in-
strument offered for record and if it fail to comply with law re-
fuse to receive it,^ yet if his determination in that regard be
erroneous, he may be compelled by mandamus to register it.'
The effect of an erroneous determination by the registrar, or by
any other official to whom the instrument is submitted, that the
paper is entitled to record is considered below.'
§ 137. Registration in more than one Office. — Sometimes
the instrument, or a duplicate or copy^ is required to be registered
in several different offices, e. g., in the office of a county clerk,
and in the office of the secretary of state. In such cases, refer-
' State ex rel. Padgett v. Foulkes, ' People ex rel. Davenport v. Rice,
94 Ind. 493, 496. 68 Hun (N. Y.) 24; 22 N. Y. Supp.
^ San Diego Gas Co. v. Frame, 631 (approval of paper by a judge to
137 Cal. 441 ; 70 Pac. 295 ; Walton whom a statute required it to be
V. RUey, 85 Ky. 413 ; 3 S. W. 605. submitted held not to be conclu-
' American Salt Co. v. Heiden- sive on the registrar) ; People ex rel.
heimer, 80 Tex. 344, 347 ; 15 S. W. Blossom v. Nelson, 46 N. Y. 477.
1038 ; 26 Am. St. Rep. 743 (semble). ' American Salt Co. v. Heiden-
But see Staie ex rel. Home Bldg., heimer, 80 Tex. 344, 347 ; 15 S. W.
etc. Ass'n v. Rotwitt, 17 Mont. 537 ; 1038 ; 26 Am. St. Rep. 743 (semble) ;
43 Pac. 922 (holding that the regis- People ex rel. U. S. Grand Lodge v.
trar is confined to the face of the Payn, 161 N. Y. 229 ; 55 N. E. 849 ;
paper and cannot go into the mo- McChesney v. Batman (Ky.), 89
tives of the subscribers). S. W. 198; State v. Taylor, 55 Ohio
As to refusal to record an instru- St. 61 ; 44 N. E. 513.
ment because the proposed corpo- Cf. State ex rel. Hutchinson v.
rate name is unduly similar to that McGraih, 92 Mo. 355 ; 5 S. W. 29 ,
of another corporation, see People Illinois Watch Case Co. v. Pearson;
ex rel. Fdter v. Rose, 80 N. E. 293 ; 140 111. 423 ; 31 N. E. 400 ; 16 L. R.
225 III. 496. See also infra, § 449. A. 429.
* See'supra, § 121. ' § 266-§ 270.
125
§ 137 THK INCORPORATION PAPER [ChAP. II
ence must be had to the terms of the particular statute in question
in order to determine the relative importance of the filing with
the local officer and the filing with the state officer.
For example, under some statutes, the most important point
is the filing of the instrument with the state officer, and the
statutory provision for filing a duplicate or copy with a county
officer is construed as directory merely, or at any rate non-
compliance therewith is regarded as a .breach of condition sub-
sequent to be availed of only by the state on direct proceedings
to declare the corporate existence forfeited^or as a mere irregu-
larity which when the company goes into operation as a corpor-
ation de facto will not justify a collateral attack on its existence.^
Under such statutes, the corporation never comes into existence
even de facto where the instrument is recorded in the county
office but not with the state of^cei^)/
On the other hand, the terms of the statute may show that the
all-important step is the filing of the instrument with the county
officer * and that the provision for filing a duplicate or copy with
the state officer is directory merely,^ or a condition subsequent to
incorporation," or a requirement such that disregard of it will
not prevent the company from becoming a corporation de facto.''
Under such statutes the fact that the instrument is recorded in
the wrong county is a serious irregularity and prevents the com-
pany from becoming a corporation de jure even though a copy is
duly filed with the secretary of state, a copy of whose certificate
' Jhons V. People, 25 Mich. 499. ' First Nat. Bank v. Dames, 43
' Bushnell v. Consolidated Ice Ma- Iowa 424 ; Mokdumne HiU Mining
chine Co., 138 111. 67, 73 ; 27 N. E. Co. v. Woodbury, 14 Cal. 424 ; 73
596; Curtis v. Meeker, 62 111. App. Am. Dec. 658; Portland, etc. Turn-
49 (with which compare Loverin v. pike Co. v. Bohb, 88 Ky. 226; 10
McLaughlin, 161 111. 417; 44 N. E. S. W. 794; Rassbeck v. Desterreicher,
99); Humphreys v. Mooney, 5 Colo. 55 How. Pr. (N. Y.) 516; 4 Abb.
282, 295. N. C. 444 ; Walton v. Riley, 85 Ky.
» Card V. Moore, 68 N. Y. App. 413 ; 3 S. W. 605.
Div. 327 ; 74 N. Y. Supp. 18, ' Hyde v. Doe, 4 Sawy. 133 ; Van-
affirmed short, 173 N. Y. 598 (re- neman v. Young, 52 N. J. Law 403 ;
lating to the law of Connecticut). 20 Atl. 53 ; Grand River Bridge Co.
* Childs V. Hurd, 32 W. Va. 66; 9 v. Rollins, 13 Colo. App. 4; 21 Pac.
S.E. 362 (relating to law of N.Y.) 897; Tarbell v. Page, 24 111. 46;
" Oarnett v. Richardson, 35 Ark. LeonardsviUe Bank v. WiUard, 25
144 (headnote inadequate) ; Cross v. N. Y. 574 ; Central Agricultural, etc.
Pinckneyville Mill Co., 17 111. 54, 56. Ass'n v. Ala. Gold Life Ins. Co., 70
Cf. BarUett v. Wilbur, 53 Md. 485 Ala. 120 (headnote inadequate),
(relating to law of New York).
126
§ 31-§ 162] PUBLICATION IN NEWSPAPER § 138
of incorporation is recorded in the county where the original
incorporation paper ought to have been recorded.'
Still other statutes have been construed to make both the filing
with the county oflacer and with the state officer of equal im-
portance and both indispensable to the creation of even a de
facto corporation.' Even under such statutes, if the instru-
ment isduTy filed with the secretary of state, the fact that a
certified copy of the incorporation paper, or even the secretary of
state's certificate of incorporation, instead of a duplicate original
of the incorporation paper, is recorded in the county office, is
not deemed so serious an irregularity as to prevent the company
from becoming a de facto corporation.*
Of course, where the instrument is duly registered both in the
county office and in the state office, failure to observe a statutory
requirement for registration in any other county in which the
company may transact business can be no more than a cause of
forfeiture of corporate existence.*
§ 138. Publication in Newspaper. — Publication of the in-
corporation paper, or of extracts or abstracts thereof, in some
newspaper is sometimes required, and performs, somewhat the
same jiuKltian...asJJi&Ji:egJsti3'tiOTi_gf_tibe^ Neveflthe-
Jess. such pu]jlcalJ,Qii-^eyen-.g]ien required has been held not to
be a condition precedent to incorporation.' ""
' Martin v. Deetz, 102 Cal. 55 ; * Anderson v. Railroad, 91 Tenn.
36 Pac. 368 ; 41 Am. St. Rep. 151 44 ; 17 S. W. 803.
(note that the court conceded that Cf. Young Reversible Lock-Nut
if the company had transacted busi- Co. v. Young Lock-Nut Co., 72 Fed.
ness as a corporation it tvould have 62 (as to a New York statute).
been a corporation de facto). ° See Church of the Holy Com-
^ Indianapolis, etc. Co. v. Herki- munion, 14 Phila. 121 ; Seaton v.
mer, 46 Ind. 142 ; Brewer v. State, 7 Grimm, 110 Iowa 145 ; 81 N. W. 225 ;
Lea (Tenn.) 682; Lusk v. Riggs, 97 Sweney Bros. v. Talcott, 85 Iowa 103,
N. W. 1033; 70 Nebr. 713; Sims v. 110; 52 N. W. 106.
C(mmonwealthJlS.^.929; 114 Ky. ^Holmes v. GiUiland, 41 Barb.
827 ; Hurt v. Salisbury, 55 Mo. 310. (N. Y.) 568 ; Walton v. Riley, 85 Ky.
Cf. Loverin v. McLaughlin, 161 413; 3 S. W. 605.
111.417; 44 N. E. 99. Cf. Wood v. WUey Construction
' Huntington Mfg. Co. v. Scho- Co., 56 Conn. 87, 97-98; 13 Atl.
field, 62 N. E. 106 ; 28 Ind. App. 95 ; 137 ; Dooley v. Cheshire Glass Co., 15
Williamson v. Kokomo Bldg., etc. Gray (Mass.) 494, Harrod v. Hamer,
Ass'n, 89 Ind. 389. 32 Wise. 162.
127
§ 139 THE INCORPORATION PAPER [ChAP. II
§ 139-§ 142. Svbmission of Instrument to Pvblic Ojficer for
Approi)al.
§ 139. Examination of Instrument by Begistiar when paper
fded for Record. — General incorporation acts often provide
that each incorporation paper must be submitted to some pub-
lic official for his approval. As we have seen, a mere registrar
charged with the duty of recording the instrument may refuse
to receive for record a paper which does not comply with the
statutory requirements; ' and thus he may be said to be in a
certain sense invested with the duty of passing upon and ap-
proving the instrument. But under, statutes of this class, the
officer's approval is a mere incident in, or part of, the registra-
tion, and does not constitute a distinct step in the process of
incorporation.
§ 140. Submission to some other Officer before filing for
Record. — Other statutes provide that every incorporation
paper, before it is filed for record with the registrar, must be
submitted to a judge or to some administrative official and be
indorsed with a certificate of his approval.^ Under statutes of
this class, the approval of the judge is a preliminary to registra-
tion. Although the indorsement of approval by the court or
officer does not preclude the registrar from refusing to record the
paper if he find upon inspection that it does not comply with
the law,^ nevertheless he ought not to record any instrument
offered for registration unless it bear the official indorsement of
approval. If he do so, the incorporation would seem to be irreg-
ular even though the instrument may in fact in all its terms
comply with law. Perhaps, however, the irregularity would not
be deemed such as to prevent the company from attaining a
de facto existence.*
But see Bigdow v. Gregory, 73 111. ing (Iowa) 111 N. W. 974; Berkson,
197; Clegg V. Hamilton, etc. Co., 61 Hitghes <fe Co. v. Anderson, 115
Iowa 121 ; 15 N. W. 865 ; Heinig v. Iowa 674 ; 87 N. W. 402.
Adams, etc. Mfg. Co., 81 Ky. 300 >■ Supra, § 136.
(overruled) ; Eisfeld v. Kenworth, ' Cf. Richmond Factory Ass'n v.
50 Iowa 389 ; Unity Ins. Co. v. Cram, Clarke, 61 Me. 351.
43 N. H. 636. ' Peopleexrel.Davenportv.Rice,68
As to what is a newspaper "as Hun (N.Y.)24; 22 N.Y. Supp. 631.
convenient as practicable to the * As to the effect of fraud in
principal place of business," see procuring the approval, see infra,
Clinton Novelty Iron Works v. Neit- § 267.
128
§ 31-§ 162] OFFICIAL APPROVAL § 142
§ 141. Submission by way of Petition to Officer for Issue of
Charter. — Still other statutes provide that the incorporation
paper shall be in the nature of a petition addressed to a court,
or to the governor of the state or other executive officer; and
that thereupon the court or official to whom the petition is
addressed shall, if he find that the same complies with law,
issue a "charter " or "certificate of incorporation " incorporating
the applicants according to the prayer of the petition. Under
statutes of this class, the submission of the petition or incorpora-
tion paper to the judge or other ofiicer is an integral and essential
part of the incorporation, and without such submission and
approval there can be no corporation at all — not even a corpora-
tion de facto} The application for issue of the "charter" or
decree of incorporation is an ex parte proceeding, and no third
person has any right to intervene and object to the granting of
the apphcation.^ Under some such statutes, the officer to whom
the appHcation is addressed is invested with a considerable
degree of discretion, and may, for example, refuse an application
where the proposed corporate name is likely to cause confusion
even though it do not amount to an infringement of any legal
rights.'
§ 142. Issue of Certificate of Approval after Registration. —
Still other statutes, for example, the English Companies Act of
1862, provide that after the instrument has been recorded, the
registrar or some other official shalLissue a certificate stating
that the instrument. has been recorded and that the company is
incorporated. If the language of the statute show that the
incorporation is to date from the approval by the registrar, or
other public official, and the issue of his certificate, there can
be no corporation — not even a cOTporation_ de_/acto — until
such approval be securedarTd thecStificateissued.'' Bjit in thp
' As to the effect of fraud in pro- charter were heard) ; Bradley Ferti-
curing the oflBcial approval, and the User Co., 19 Pa. Co. Ct. 271.
question whether the officer may ' Polish Nat. Cath. Church, 31 Va,.
revoke his approval, see infra, § 267. Super. Ct. 87 ; Philadelphia Lying-
' Young Women's Christian Ass'n in Charity v. Maternity Hospital, 29
V. St. Louis Women's Christian Pa. Super. Ct. 420.
Ass'n, 115 Mo. App. 228; 91 S. W. ■* Cf. Stowe v. Flagg, 72 111. 397;
171. First Nat. Bank v. Rockefeller, 195 Mo.
But cf. Polish Nat. Catholic 15, 41-42 (semble) ; 93 S. W. 761 ;
Church, 31 Pa. Super. Ct. 87 (where Sexton v. Snyder, 119 Mo. App. 668
the opponents to the granting of the (headnote inadequate) ; 94 S. W. 562.
VOL. I. — 9 129
§ 143 THE INCORPORATION PAPER [ChAP. II
■fthspTipe of.^,n -explicit provision making-tlaejssue of the cprfP^"^*^
a^j^nHitinn prpf^fHent to incorporation — and a fortiori where
the law provides that the subscribers of the incorporation paper
shall be incorporated from the registration of the instrument —
the certificate is of only evidentiary value, and is needed only as
convenient proof that the law has been complied with.' ■vin.auch
cases^_the_Jailure to submit the instrument to the proper official.
or anomission Jo secura-tb&-£eitifi£ai£_pf incorporation, is at_
^most_abrjE;achj3La condition subsequent, to be availed oI%Jhe
state alone.^
§ 143. Alteration of Instrument after Execution and before
Registration. — If any material alteration be made in the incor-
poration paper after its. execution and before its registration,
without the assent of all the subscribers, the paper in its altered
form is certainly not binding upon the parties.^ The effect of
recording the document as altered, under statutes making
registration conclusive evidence of compliance with law; will be
considered hereafter.* Lord Cairns once expressed the opinion
that any alteration of this sort would, like a fraudulent alter-
ation in a deed or promissory note, render the whole instru-
ment altogether void, so that it would no longer, in its unaltered ..
form, be binding upon the subscribers.^ Although an incorpora-
tion paper is not a sealed instrument unless, expressly required
to be under seal, still Lord Cairns's dictum corresponds with
the policy of the law. For whether or not the document is a
technical common law specialty, it is certainly a very formal and | ) ' f
peculiar instrument, and should, in this respect, for the preven.- ^ '
tion of frauds, be governed by the same rules as a deed. So, it ^
has been, held that where an incorporation paper when signed
by one of the subscribers contains material blanks, there is no
' Sparks v. Woodstock Iron, etc. tion v. Rodes, 37 W. Va. 738; 17
Co., 87 Ala. 294, 298; 6 So. 195. S. E. 305.
' As to the effect of fraud in pro- As to immaterial alterations, see
curing the certificate, and as to the Union Agricultural, etc. Ass'n v.
question whether the officer grant- NeUl, 31 Iowa 95.
ing the- certificate may revoke his * See infra, § 268-§ 270.
determination, see infra, § 267. » Peel's Case, 2 Ch. 674, 681.
* Greenbrier Industrial Exposi-
130
§ 31-§ 162] ALTERATION AFTER REGISTRATION § 144
authority without the subsequent consent of that subscriber to '
fill up the blanks.' In Maryland, it was held that where a
subscriber to an incorporation paper, which had been materially
altered after he had signed, subsequently acknowledged the
instrument in ignorance of the alteration, he was not estopped
from relying on the alteration as a defense .to an action on his
agreement to accept and pay for shares in the company ; '^ but
this decision goes to the very verge of the law, for where the
rights of innocent third parties may accrue on the faith of the
acknowledgment, the subscribers should not in general be
allowed to plead ignorance of what they were doing. Possibly,
in such a case, although the alteration may be a defense to an
action upon the subscriber's agreement to take shares, it may
not annul the incorporation of the company. Indeed, that
seems to have been the view of the Maryland court in the case
last cited. It would seem that an incorporation paper may
always be altered, with the unanimous consent of the sub-
scribers, at any time before it is recorded.'
§ 144-§ 160. ALTERATION AFTER REGISTRATION.
§ 144. Alteration after Recording generally impossible with-
out enabling Statute. — ■ The general scheme of the incorpora-
tion laws contemplates that each metaorahdum of association
or incorporation paper shall, from the time of registration be the
unalterable constitution of the company.* This policy of the
law cannot be circumvented by 'inserting a clause authorizing
the company t6 alter the provisions of the instrument at pleasure ;
for such a clause would be void as regards any matters required
by law to be fixed and determined in the incorporation paper.'
' Dutchess, etc. R. B. Co. v. Mab- Co. (1904), 1 Ch. 87 {semble) ; Dexine
bett, 58 N. Y. 397. Patent Packing & Rubber Co., 88 L. T.
' Hughes v. Anlietam Mfg. Co., 791.
34 Md. 316. But see Thornton v. Bdcom, 85
' Cf. Gade v. Forest Glen Brick Iowa 198 ; 52 N. W. 190 (criticised
Co., 165 111. 367 ; 46 N. E. 286. supra, § 118) ; Nelson v. Keith-
* Ci. New York Cable Ry. Co., 109 O'Brien Co. (Utah), 91 Pac. 30
N. Y. 32 ; 15 N. E. 882 (where an (where, in a rather cloudy opinion,
attempt was made to amend an in- the court appears to hold that under
strument which in its original form a statute providing that no altera-
was fatally defective). tion in the incorporation paper shall
' Wdsbach Incandescent Gas Light change the liability of holders of
131
§ 145 THE INCOKPORATION PAPER [ChAP. II
We have seen above that this rule that an incorporation paper
cannot be altered apphes even to matters not required to be
stated in the instrument/ except that the paper itself may
provide otherwise.^ An unauthorized attempt to amend the
incorporation paper is void, and of course therefore the corpo-
rate existence and power of the company to carry on business
under the original instrument is not affected.'
§ 145. Reformation for Mistake. — Not even, a court of
equity has power to rectify a mistake in an incorporation paper
after it has been duly recorded. This conclusion was reached in
regard to the articles of association of an English company(^nd
a fortiori the same principle would apply to a memorandum of
association or incorporation paper. The blunder is, therefore,
beyond remedy unless the statute provides some means of alter-
ing the instrument.
§ 146. Historical Outline of Statutes authorizing Alterations.
— The English Companies Act of 1862 in its original form
provided no mode for altering the memorandum of association
except in respect to increasing the capital of the company and
to changing its name.* By an act of 1867, the power of reducing
the capital was conferred subject to certain conditions." By a
still later act,' a power is conferred of altering the object clause
of the memorandum whenever "it appears that the alteration is
required in order to enable the company (1) to carry on its
business more economically or efficiently, or (2) to attain its
main purpose by new or improved means, or (3) to enlarge or
change the local area of its o^rations, or (4) to carry on some
business or businesses which under existing circumstances
may conveniently or advantageously be combined with the
business of the company, or (5) to restrict or abandon any of
the objects specified" in the original instrument. In each case
paid-up shares without unanimous Bank, 75 Minn. 196, 205 (headnote
consent, a clause in an incorporation inadequate) ; 77 N. W. 822.
paper authorizing alterations in the * Evans v. Chapman, 86 L. T. 381.
instrument by majority vote is suf- ' Companies Act, 1862, § 12 and
ficient warrant for an alteration by § 13.
mere majority vote changing in some ' Companies Act, 1867 (30 and 31
respects the liability of holders of Vict., c. 131).
paid-up shares). ' Companies (Memorandum of
> Supra, § 120. Association) Act, 1890 (53 and 54
' Supra, § 120. Vict., c. 62).
• Richards v. Minnesota Sav.
132
§ 31-§ 162] ALTERATION AFTER REGISTRATION § 147
the proposed alteration must receive the approval of the court,
which is not to be given without aflfording to dissenting share-
holders and to creditors an opportunity to be heard in opposition
to the alteration.
In most of the UnitedStates, the statutes provide a method
^of making some alterations _inj_or a.mpnrlTnpnts t">„incorporation
^__gapsc5;, gti^.not„ infrequently, a power.. la .conferred, unlimited
in terms, of making any alterations that may be desired.
§ 147-§ 149. What Alterations are authorized by enabling
Statutes.
§ 147. In general. — Even where statutes confer a power
of alteration broadly, without any express limitation whatsoever,
nevertheless, it is submitted that no complete and radical change,
creating, in substance, a new corporation, could be made against
the opposition of any shareholder.' For instance, a joint-stock
insurance company cannot ainend its incorporation paper so as
to give the policy-holders the right to vote at meetings of the
company, and thus virtually convert the company from a joint-
stock company into a mutual company.^ A fortiori, where the
statute expressly provides that no amendment shall "change
substantially the purposes" of the company, a corporation
formed for the purpose of manufacturing gas and electricity
' But see Mercantile Statement Co. Bubstantially the purposes of the
V. Kneal, 51 Minn. 263; 53 N. W. organization, a gas company was
632; David Bradley Mfg. Co. v. allowed to amend its incorporation
Chicago, etc. Traction Co. (111.), 82 paper so as to acquire power to fur-
N. E. 210 (amendment changing nish electric light),
object of company from construe- As to whether the alteration may
tion of a street railway or tramway authorize an abandonment of the
to construction of an interurban original chief object of the company,
commercial railway held valid). compare Thellusson v. Valentia
As to what is a substantial change (1907), 2 Ch. 1 (where the "rules"
in the objects of the company, see of an unincorporated club, which
State V. Taylor, 55 Ohio 61 ; 44 N. E. originally provided for pigeon-shoot-
613 (stated infra) ; Commonwealth v. ing and which by amendtoent had
Licking Valley Bldg. Ass'n, 82 S. W. been enlarged so as to include other
435 ; 26 Ky. L. Rep. 730 (where a sports, were permitted to be further
so-called amendment was held to amended so as to provide for dis-
have created a new corporation) ; continuing pigeon-shooting at the
Picard v. Hughey, 58 Ohio St. 577 ; club).
51 N. E. 133 (where, ^under a " Lord v. Equitable Life Ass. Soc,
statute expressly prohibiting any 96 N. Y. Supp. 10 ; 109 N. Y. App.
amendment which should change Div. 252.
133
§ 147 THE INCORPORATION PAPER [ChAP. II
for light, heat, or power cannot amend its incorporation paper
so as to add to its objects the operation of a street railway.'
Even where the power of amendment is in terms unlimited, the
company may not make an alteration reducing the rate of the
preferential dividend on the preferred shares as fixed in the original
instrument,^ or avoiding valid contracts of the corporation.'
j/"^ On the other hand, the statutory power of amendment, un-
I less in terms restricted, applies to all the clauses of the original
J instrument,* such, for example, as the clause fixing a limit to
^ the period of corporate existence,* or determining the corporate
name,' or the clause marking out the objects of the company,^
\ except possibly the clause fixing the amount of the capital.* Stat-
utory power to alter the nature of the business carried on by
the company authorizes a change in the place, as specified in the
incorporation paper, at which the business is to be carried on,
even though the character of the business is not altered.' Where
a railway company has power to alter its incorporation paper
for the purpose of correcting an informality or defect in the
original instrument, an amendment which makes a change in
the proposed route is not permissible."*
' State V. Taylor, 55 Ohio St. 61 ; As to alterations in the voting
44 N. E. 513. rights of the shareholders, see Loe-
' Pronick v. Spirits DistribvMng wenthal v. Rubber Reclaiming Co.,
Co., 58 N. J. Eq. 97 ; 42 Atl. 586. 52 N. J. Eq. 440 ; 28 Atl. 454 (where
Cf. infra, § 672-§ 674. the statute authorizing amendments
' Cf . Brown v. Grand Fountain, was passed after the execution of the
28 App. D. C. 200. See also infra, original incorporation paper).
§ 722-§ 724. • Fort Pitt B. & L. Ass'n v. Model
' Cf. Bernstein v. Kaplan (Ala.), Plan B. & L. Ass'n, 159 Pa. 308;
43 So. 581 (headnote inadequate — 28 Atl. 215.
construing a statute wliich after em- ' Mercantile Statement Co. v.
powering the corporation to alter the Kneal, 51 Minn. 263 ; 53 N. W.
instrument in certain particulars 632.
concluded by authorizing "such ' Continental Varnish, etc. Co. v.
other alteration, amendment, or Secretary of State, 87 N. W. 901 ;
change of its charter as may be de- 128 Mich. 621. As to increase or
sired"); Fidelity Mut. Aid Ass'n, reduction of capital, see further infra,
12 Wkly. Notes Cas. (Pa.) 269, 271 Chapter XI.
("A general power to alter or amend ' Meredith v. New Jersey Zinc,
a charter is a power to alter or amend etc. Co., 59 N. J. Eq. 257 (headnote
any part of the charter"). inadequate) ; 44 Atl. 55.
' People ex rd. Ward v. Green, '» Riverhead, etc. R. R. Co., 36 N.
116 Mich. 505; 74 N. W. 714; Ovid Y. App. Div. 514; 55 N. Y. Supp.
Elevator Co. v. Secretary of State, 90 938.
Mich. 466 ; 51 N. W. 536.
134
§ 31-§ 162] ALTERATION AFTER REGISTRATION § 148
§ 148. Under British Act of 1890 and similar Statutes. —
The British courts have often been called upon to decide whether
proposed changes in a company's objects can be brought
within the power of alteration conferred by the Act of 1890,
which has been already referred to.' In order to come within
the clause authorizing an alteration in the objects which may
enable the company to carry on its business more economically
or efficiently, the proposed alteration must "leave the business
of the company substantially what it was before, with only such
changes in the mode of conducting it as will enable it to be
carried on more efficiently."^ Neither that clause nor the
clause authorizing an alteration for the purpose of enabling
the company to carry on some business that may be conven-
iently or advantageously combined with the old business will
warrant a change whereby a club of cyclists is converted into
a club to which tourists of any kind, particularly motorists,
may be admitted.' In one case, where it was sought to make
an alteration which merely amplified the description of the
company's objects by re-writing the object-clause and putting
it in modern form, Cozens-Hardy, J., expressed disapproval,
saying, " I do not think it is within the scope of the statute simply
to improve the language of a memorandum of association — if
it be an improvement - — by re-writing the memorandum in
modern form, and to enable a company to adopt one of
Mr. Palmer's modern forms ; " * but it is understood that in a
number of unreported cases precisely such changes were con-
firmed.* It has been held in Newfoundland under an exactly
similar statute that none of the clauses of the act — not even
the clause authorizing an amendment "to restrict or abandon
any of the objects" specified in the original instrument — will
justify a clause to provide for a sale of the company's entire
property, undertaking, and goodwill." In Australia, an amend-
ment to the memorandum of association of a life insurance
company vastly enlarging the classes of securities in which the
' Supra, § 146. Accord: AustTolian Widows' Fund
= Cyclists' Touring Club (1907), lAfe Ass. Soc, 24 Vict. L. R. 613.
1 Ch. 269, 274. " 1 Palmer's Company Precedents,
' Cyclists' Touring Club (1907), 9th ed., 1154-1155.
1 Ch. 269. ' St. John's Electric Light Co.
* ConsettlrmCo. (1901), ICh. 236. (1897-1903), Newfoundland 440.
135
§ 149 THE INCORPORATION PAPER [ChAP. II
company's funds might be invested was disapproved.' British
judges have confirmed the following amendments among others,
— an amendment enabling a marine insurance company to
engage in fire, life, and accident insurance in connection with
marine risks ; ^ an amendment enabling a boiler insurance com-
pany to insure against other risks;' an amendment enabling a
company formed for the purpose of investing in government
securities to invest in other securities;* and an amendment em-
powering the company to issuQ. debentures.*
§ 149. Amended Provision must be such as might be inserted
in an Original Instrument at Time of Amendment.— ^ As a rule no.
provision can be injected by amendment into an incorporation
paper that could not at the time of the making of the amendment
be inserted in the incorporation paper of a new company. Thus,
where a statute provides that no company "hereafter organized "
under any other statute shall have the word "trust" as part of
its name, a company previously organized under another law
cannot subsequently amend its incorporation paper by inserting
the word "trust" in the corporate name.*
§ 150. Necessity for accompan3ang Amendment by Change of
Name when old Name would be Misleading. — Where the statute
reposes in some court or officer a discretion to confirm or dis-
allow a proposed amendment, it seems that the judge or officer
should exact as a condition of his approval a change in the cor-
porate name where use of the old name as apphed to the new
business might be misleading.' At least, this seems to be the
practice under the British Companies (Memorandum of Associa-
tion) Act of 1890.* Where the old name indicates the locality
' National Mut. Life Ass'n, 26 But cf. Governments Stock Invest-
Vict. L. R. 490. ment Co. (1891), 1 Ch. 649.
2 AllianceMarine Ass. Co. {1892), ' Reversionary Interest Soc. (,1892),
1 Ch. 300. 1 Ch. 615.
' National Boiler Ins. Co. (1892), ° State ex rel. Osborne v. Nichols,
1 Ch. 306. 38 Wash. 309 ; 80 Pac. 462.
* Foreign & Cohnial Government ' As to the illegality of mislead-
Trust Co. (1891), 2 Ch. 395 ; Govern- ing corporate names, see supra, § 62,
ments Stock Investment Co., No. 2 and infra, § 305, § 450.
(1892), 1 Ch. 597. * Foreign & Colonial Government
138
§ 31-§ 162] ALTERATION AFTER REGISTRATION § 152
in which the company's business is carried on, the court in con-
firming an alteration in the memorandum of association enlarg-
ing the area of its operations exacted as a condition that the
name should be changed so as no longer to suggest that the
operations were to be confined to the place mentioned in the
old name; ^ but in a somewhat similar case a Scotch court
decided that no change of name was necessary.^
§ 151. Fees payable on Amendment. — The fees payable on
filing of the amended instrument are usually if not always
regulated by statute. Where one section of a statute prescribes
one fee for filing any amended incorporation paper and another
section provides that on an extension or renewal of corporate
existence the same fees shall be payable as are required for an
original incorporation, a corporation wishing to prolong its
corporate existence so that instead of being fifty years as fixed
in the certificate of incorporation the corporate existence shall
be perpetual, cannot by filing an amended certificate with an
alteration in the clause relating to the period of corporate
existence escape with payment of merely such fees as are required
for filing of an amendment to the incorporation paper, but must
pay the much heavier fees required for filing a certificate of
extension of corporate existence.'
§ 152. Eflect of Amendment on Instrument originally void
or on previous invalid Amendment. — While an instrument
originally void cannot be made valid by an amendment duly
executed and filed,"* yet in such a case what was intended as an
amended instrument may, if it contain all the statutory requi-
sites, operate as an original incorporation paper.^ An amend-
ment attempted to be made at a time when no power of
Trusi Co. (1891), 2 Ch. 395; Govern- » People ex rd. New York, etc.
merits Stock Investment Co. (No. 2), R. R. Co. v. Railroad Comm'rs, 81
(1892), 1 Ch. 597 ; Alliance Marine N. Y. App. Div. 242 ; 81 N. Y. Supp.
Ass. Co. (1892), 1 Ch. 300; National 20, affirmed short, 67 N. E. 1088.
Boiler Ins. Co. (1892), 1 Ch. 306. This was recognized in State ex
' Indian Mechanical Gold Ex- ret. Clapp v. Critchett, 37 Minn. 13,
trading Co. (1891), 3 Ch. 538. 14 ; 32 N. W. 787.
' Kirkcaldy Steam Laundry Co., 6 Cf. Valk v. Crandall, 1 Sandf. Ch.
Fraser (Sc.) 778. (N. Y.), 179; State ex ret. Thompson
' National Lead Co. v. Dickinson, v. Colias (Ala.) 43 So. 190 (where a
57 Atl. 138 ; 70 N. J. Law 596 ; af- statute expressly authorized the cur-
firmed short, 62 Atl. 1135. ing of defects in the original paper
' State ex rel. Clapp v. Critchett, by filing a supplement thereto).
37 Minn. 13 ; 32 N. W. 787.
137
§ 153 THE INCORPOEATION PAPER [ChAP. II
amendment existed may be recognized and validated by a sub-
sequent amendment adopted after a passage of a statute author-
izing amendments to be made.'
§ 153. Alteration against Opposition of Minority Share-
holders. — A power of altering the incorporation paper or any
clause thereof, such as the clause fixing a limit to the period of
corporate existence, if conferred by law when the original in-
corporation paper is executed, should be read into the contract
between the several shareholders without any express reference
thereto, so that the power may be exercised against the opposi-
tion of individual shareholders.^ Indeed, it would seem that
the statutory power of alteration would exist even in spite of an
express clause in the original paper attempting to exclude its
application.
§ 154. Statute allowing Alteration unless prohibited in origi-
nal Instrument. — Where a statute authorizes an alteration of
the incorporation paper, unless otherwise provided in that in-
strument itself, there must in order to preclude alteration be an
express prohibitory clause in the instrument.'
§ 155. Formalities required in making Alteration. — Unless
otherwise provided by statute, an amendment to an incorpora-
tion paper must be acknowledged and recorded in the same way
as the original instrument.* Where an amendment is required
' People ex rd. Ward V.Green, 116 52-53; 17 S. W. 803 (holding that
Mich. 605 ; 74 N. W. 714. amendment is not effective until re-
Cf. Spinning v. Home Building, corded not only in county record of-
etc. Ass'n, 26 Ohio St. 483. fice but also with the secretary of
' Smith V. Eastwood Wire Mfg. state).
Co., 58 N. J. Eq. 331; 43 Atl. 567; Cf. Lamb & Sons v. Dobson, 90
Port Edwards, etc. By. Co. v. Arpin, N. W. 607; 117 Iowa 124.
SO Wise. 214 ; 49 N. W. 828 (holding But see Boca, etc. R. R. Co. v.
dissenting shareholders not released Sierra Valleys Ry. Co. (Cal.), 84 Pac.
from obligation to pay calls by 298, 301; Jackson v. Crown Point
amendment increasing capital in pur- Mining Co., 21 Utah 1 ; 59 Pac. 238 ;
Buance of statute in force at time of 81 Am. St. Rep. 651 (where it was
incorporation). held that although an amendment
But cf. Pronick v. Spirits Dist. which is "fundamental" is not effec-
Co., 42 Atl. 586 ; 58 N. J. Eq. 97. tive until recorded as required by
' Meredith v. New Jersey Zinc, statute, yet an amendment which is
e«c. Co., 59 N. J. Eq. 257 (headnote not "fundamental" ^ such as an
inadequate); 44 Atl. 55. amendment increasing the number
* Day V. MUl Owners' Mut. Fire of directors — is valid although not
Ins. Co., 75 Iowa 694 ; 38 N. W. 113 ; recorded).
Anderson v. Railroad, 91 Tenn. 44,
138
§ 31-§ 162] ALTERATION AFTER REGISTRATION § 157
to be recorded, it does not take effect until recorded ; and when
recorded it does not relate back to the time of passage of the
amendatory resolution.' A statute which requires as a con-
dition to the making of an alteration of the instrument that the
"board of directors shall pass a resolution declaring that such
change * * * is desirable and calling a meeting " of the share-
holders to take action accordingly, is satisfied by the passage
by the directors of a resolution calling a meeting of the share-
holders to make the amendment, but without in terms stating
that such amendment is approved, especially where the meeting
of shareholders is attended by all the directors (a majority of
whom vote in favor of the resolution) and by all the share-
holders.^ Where a statute provides one method for making a
change in a particular clause or paragraph of the incorpo-
ration paper, a subsequent statute providing a different method
for making alterations in any part of the incorporation paper,
repeals the former statute, so that the method therein provided
can no longer be pursued.^
§ 156. Whether Alteration should be made by Directors or
Shareholders. — Where the power of amending the incorpora-
tion paper is conferred upon the corporation, and not expressly
upon the directors, it can only be exercised by the shareholders; *
for as will be shown below, the powers of directors are confined
to the ordinary business of the company and cannot be extended
to any alteration of the company's constitution.'
§ 157. Irregular Alteration — Acquiescence in Alteration hy
unauthorized Officers. — If an amendment to the incorporation
paper is adopted by the officers and duly recorded, the share-
holders, after being thus charged with constructive notice
thereof and after acquiescing for a number of years, will not
subsequently be heard to assert a lack of authority in the officers
> Westchester Trust Co., 186 N. Y. ' Bernstein v. Kaplan (Ala.), 43
215. So. 581.
But see Humphrey v. Patrons' ' Fort Pitt B. & L. Ass'n v.
Mercantile Ass'n, SO Iowa 607 (hold- Model Plan B. & L. Ass'n, 169 Fa.
ing that a contract permitted by the St. 308 ; 28 Atl. 215.
amended but not by the original in- * Cressona Sav. Fund, etc. Ass'n,
corporation paper, and entered into 1 Leg. Ree. (Pa.) 245.
after the execution but before the ' Infra, § 1438. ■
recording of the amended instrument,
cannot be attacked as ultra vires by
the corporation itself).
139
§ 158 THE INCORPORATION PAPER [ChAP. II
who adopted the amendment, for the purpose of escaping
the payment of a tax to which the amendment subjected the
company.'
Other Irregularities. — Indeed, the existence of irregularities
in the proceedings whereby the amendment is made will not
always be fatal to the validity of the amendment, according to
some American authorities.^ Perhaps, the question depends to
some extent on the nature of the irregularities. Minor irregu-
larities may perhaps be cured by acquiescence. But a total
lack of compliance might render the amendment void, as against
any person not concluded by estoppel.^
A failure properly to acknowledge an amendment to the incor-
poration paper, or other irregularity in the proceedings for mak-
ing the alteration,, does not work a dissolution of the company,
but is at worst a cause of forfeiture of corporate privileges to be
taken advantage of only by the state.' Indeed, it would seem
that such an irregularity should not even be a cause of forfeiture,*
but that the right of the company to continue under the original
incorporation paper should not be affected by the abortive
attempt at amendment.
§ 158. Amendments not retroactive. — An amendment has
no retroactive effect.* It does not validate any previous
transactions which were ultra vires under the original in-
strument but which would be proper under the amended paper.
For example, where a corporation institutes condemnation
proceedings to acquire land for a line of railway which under
its incorporation paper it has no power to construct, an amend-
ment to the incorporation paper adopted pending the proceed-
' Licking Valley Bldg. Ass'n v. Cf. Brown v. Wyandotte, etc. By.
Commonwealth (Ky.), 89 S. W. 682. Co., 68 Ark. 134, 144.
" Poipe V. Merchants' Trust Co. ^ Cf. Jackson v. Crown Point
(Tenn.), 103 S. W. 792; Interna- Mining Co., 21 Vtahl, \2; 59 Pac.
tional Savings, etc. Co. v. Stenger, 31 238; 81 Am. St. Rep. 651.
Pa. Super. Ct. 294 (as to a change " Cf. Colgate v. U. S. Leather Co.
of corporate name). And see infra, (N. J.), 67 Atl. 657, 662 (construing
§ 592 and § 645. an express statutory provision "that
' See Fort Pitt B. & L. Ass'n v. the amended certificate shall take
Model Plan B. & L. Ass'n, 159 Pa. the place of the original certificate
St. 308; 28 Atl. 215. of incorporation and shall be deemed
* Philadelphia, etc. Ferry Co. v. to have been recorded and fled on the
Intercity Link R. R. Co. (N. J.), 62 date of recording and filing the origi-
Atl. 184. ^ nal certificate").
140
§ 31-§ 162] ALTERATION AFTER REGISTRATION § 159
ings SO as to authorize the construction of the railway will not
enable those proceedings to be maintained.'
§ 159. Creation of new Oorporation by means of Amend-
ment. — What is in form a mere amendment of an incorporation
paper may in some cases be construed as creating an entirely
new corporation.^ It has been said to be a question of intention
whether a new corporation should be deemed to have been
created or not.' The mere fact that the amended paper is
in form a new instrument is immaterial if in substance the
differences between the two are not such as to make in effect a
new corporation.' An amendment merely changing the corporate
name certainly does not create a new corporation.^
In New York, a statute forfeiting the franchises of any rail-
way company which should not within five years commence its
line and expend thereon ten per centum of the amount of its cap-
ital and within ten years after the filing of the "certificate of
incorporation " complete the road and put it in operation, was
held to apply to an extension of the original line authorized by
an amendment to the certificate of incorporation, or incorpora-
tion paper, so that accordingly the periods of five and ten
years began to run from the filing of the amendment." This
case adopts a somewhat forced construction of the statute, but
' Boca, etc. R. R. Co. v. Sierra ing consolidation with other corpora-
Valleys Ry. Co. (Cal.), 84 Pao. 298, tions).
302-303. ' See AUen v. Ncrrth Des Moines
Cf. Westchester Trust Co., 186 M. E. Church, 102 N. W. 808; 127
N. Y. 215 (stated supra § 155); Iowa 96; 109 Am. St. Rep. 366;
Brovm v. Grand Fountain, 28 App. 69 L. R. A. 255 ; Brown v. Maryland
D. C. 200. Telephone Co., 101 Md. 574, 581-582 ;
' Commonwealth v. Licking Valley 61 Atl. 338.
Bldg. Ass'n, 82 S. W. 435 ; 26 Ky. Cf. Picard v. Hughey, 58 Ohio St.
L. Rep. 730 (amendment taxable 577, 594 ; 51 N. E. 133.
as equivalent to creation of new * Grand River College v. Robert-
corporation). ' son, 67 Mo. App. 329 ; Glymont Inv-
As to the effect of an amendment provement, etc. Co. v. Toler, 80 Md.
of the incorporation paper in mak- 278, 290-291 (headnote inadequate) ;
ing the company subject to burden- -30 Atl. 651.
some laws from which it would other- " Wright Caesar Tobacco Co. v.
wise have been exempt, see Senn v. A. Hoen & Co. (Va.), 54 S. E. 309;
Levy (Ky.), 63 S. W. 776; 23 Ky. Picard v. Hughey, 58 Ohio St. 577,
Law Rep. 662, 1331; Colgate v. 694; 51 N. E. 133 (semble). See
U. S. Leather Co. (N. J.), 67 Atl. 657, also infra, § 446.
662 (where the amendment made the ° Brooklyn, Queens County, etc.
company subject to a law authoriz- R. R. Co., 185 N. Y. 171, 183-184.
141
§ 160 THE INCORPORATION PAPER [ChAP. II
it does not proceed in any degree upon the ground that the
amendment really creates a new corporation.,
§ 160. Legislative Alteration. — The alteration considered in
the last paragraphs, it will be borne in mind, is an alteration in
pursuance of statutes existing when the company was incorpo-
rated. Of course, the only restraints upon the power of the legis-
lature to amend an incorporation paper, or to authorize the
company to amend it, by legislation passed subsequent to the
organization of the company, must be found in constitutional
limitations. The question of the validity of such subsequent
legislation as applied to pre-existing corporations is, therefore,
a constitutional one and accordingly outside our present sub-
ject. But in every case of such legislation not merely its validity
but its construction must be passed upon; and it is submitted
that no mere generalities should ever be held to sanction a com-
plete and fundamental change in the company's constitution.'
§ 161-§ 162. — Constructive Notice of Contents of Instrument.
§ 161. In general. — Undoubtedly, not only shareholders ^
but also all creditors and persons who deal with a corporation *
are charged with constructive notice of the company's incorpo-
;, ration paper. Of course, in point of tart, pyf" tViP TTiggt pru-
Vdent of them rarely has actual notice. Business would be
paralyzed if every time a transaction were had with an in-
corporated company examination were made of its incorpora-
tion paper. But each person who deals with the company has
the opportunity of knowledge. The instrument is a public
I document recorded in the office of a public official; and not
I only legal principle but public policy as well requires that the
I public should be affected with constructive knowledge of its
' Cf. Brovm v. Grand Fountain, Lumber Co., 52 Pac. 1067, 1070;
28 App. D. C. 200 ; Miller v. Insur- 19 Wash. 165 ; Kraniger v. People's
ance Co., 92 Tenn. 167. Bldg. Soc., 60 Minn. 94; 61 N. W.
' Sewell's Case, 3 Ch. 131, 140 904; Bdl & CoggeshaU Co. v. Ky.
(headnote inadequate). Class Works (Ky.), 50 S. W. 2 ; 20
' Bent V. Underdovm, 156 Ind. Ky. Law Rep. 1684 ; First Nat. Bank
516 (headnote inadequate) ; 60 N. E. v. D. Kieffer Milling Co., 95 Ky.
307 ; Bank of Monroe v. Gifford, 72 97 ; 23 S. W. 675.
Iowa, 750, 754 (headnote inade- Cf. Webb v. Rockefeller, 195 Mo.
quate) ; 32 N. W. 669 ; Canfield v. 57, 63 ; 93 S. W. 772 ; Denver Fire
Gregory, 66 Conn. 9; 33 Atl. 536; Ins. Co. v. McClelland, 9 Colo. 11,
Washington MiU Co. v. Sprague 22-23; 9 Pac. 771; 59 Am. Rep. 134.
142
§ 31- § 162] CONSTRUCTIVE NOTICE § 162
contents. If the law were otherwise, corpprations would be-
come little more than pp-rtnerships. After all, the hardship is
more apparent than real(^3^or if an unusual transaction or one
of great magnitude is contemplated, every prudent man would
examine the record; and in all cases of minor importance
within the ordinary course of the company's business little risk
is run by failing to do so.
§ 162. Iiimits of Doctrine of Constructive Notice. — The
doctrine, however, of constructive notice, sound and salutary
though it be, should not be carried too far or be perverted into
an aid in the successful perpetration of fraud. Thus, a mis-
representation of the contents of the incorporation paper is
none the less material and actionable because the person relying
thereon has from the registry constructive notice of the docu-
ment. For example, where a prospectus states with precision
the objects of an intended corporation, and the incorporation
paper, which is subsequently drawn up and recorded, confers
much wider powers, a person who subscribed to shares on the
faith of the prospectus cannot be charged with laches in failing
to have his name removed from the list of shareholders until he
acquires actual notice of the variance between the prospectus
and the incorporation paper: mere constructive knowledge of
the incorporation paper cannot constitute a foundation for an
inference of acquiescence in the variation.' So, a sale of shares
in a company which is represented by the vendor to be incorpo-
rated is voidable for misrepresentation if the company is not
in truth incorporated, although the purchaser by investigation
might have ascertained the facts.^ Moreover, the doctrine of
constructive notice cannot be extended to any provisions of the
incorporation paper which it was unlawful to insert therein.
For instance, a stipulation that subscribers to shares shall not
be liable for more than fifty per cent of the par value of their
shares is illegal, and therefore persons who may subsequently
become creditors will not be affected with constructive notice of
such a provision contained in the company's incorporation paper.'
* Stewart's Case, 1 Ch. 574, 587; » Security TrustCo. v. Ford (Ohio),
Webster's Case, 2 Eq. 741. Cf. infra, 79 N. E. 474 (headnote inadequate).
§ 216. Cf. supra, § 122.
2 Bolton V. Prather (Tex.), 80
S. W. 666; 35 Tex. Civ. App. 295.
143
CHAPTER III
ORGANIZATION AND ISSUE OF SHARES
Section
When corporate existence begins .... 163
Status of signers of incorporation paper from the moment of incor-
poration ... ... 164-167
Under laws which require signers to take one or more shares . 164
Under laws which do not require signers to agree to take shares 165
Mode of action by corporators 166
Clerks and other subordinates as corporators 167
The first directors ... 168
Allotnient and issue of shares 169-176
Issue of shares necessary to complete organization 169
Who are shareholders — what necessary to constitute an issue of
shares 170-174
Statement of question ... 170
Issue of share-certificate not necessary 171
Entry on register necessary in England 172
American rules as to entry on register 173
Payment for shares not necessary before subscriber can
become a shareholder 174
When issue of shares becomes equivalent to payment of value by
company 175
Allotment of shares 176
When shares may be allotted and issued, — when business may be
commenced 177
First meeting of corporation 178
Agreements to take shares 179-260
Scope of treatmeilt 179
The name, "subscriptions," — nature of agreement — distin-
guished from the act of becoming a shareholder and from
agreements for purchase of shares . 180
Classification of agreements to take shares — scheme of treatment 181
Agreements made after incorporation 182-238
Application of general principles of law of contracts and of
agency 182
Which party is deemed to be the offerer 183
Cases where offer is made by the subscriber 184-191
Acceptance of offer, or allotment 184-189
In general . 184
Written offer as affected by parol qualification 185
Allotment incomplete until made known to ap-
plicant 186
Whether notice of allotment must be direct
and formal 187
Time for acceptance or allotment 188
Acceptance without any indication on the com-
pany's books 189
144
SYNOPSIS
Agreements to take shares (continued) Section
Retraction of offer to take shares 190
Offer or promise to take shares under seal of promisor 191
Where offer is made by company ... .... 192-196
Contract complete on acceptance by subscriber. . . . 192
Offers of shares to existing shareholders pro rata . . 193
Counter-offers made by introducing new terms in
attempting to accept application of subscriber . 194
Time for acceptance of company's offer 195
Application for shares in ignorance of company's offer
not acceptance 196
Implied offers and acceptance^ 197
Infants' contracts to take shares 198
Application of Statute of Frauds 199
Statutes prescribing forms or ceremonies for subscriptions to
shares 200
Subscriptions through agents 201
Subscriptions by agent or trustee for corporation itself . . 202
Subscriptions by executors 203
Subscriptions procured by fraud or misrepresentation. 204-219
Defence of fraud in general — laches of subscriber . . 204
English rule requiring repudiation of the shares and
institution of proceedings for removal of name
from share-register before beginning of winding-
up or suspension of business 205
American rule as to effect of winding-up proceedings
on defence of fraud 206
Election to keep shares notwithstanding fraud or mis-
representation 207
Necessity for returning shares to company 208
Defence of fraud available either at law or in equity. 209
Recovering back money paid in on the shares .... 210
Fraud practised on original subscriber no defence to
transferee 211
Action by defrauded subscriber for damages for deceit 212
What sufficient fraud or misrepresentation to justify
rescission 213-219
In general 213
Misrepresentation as to corporation affairs . .214
Misrepresentation as to matters of law 215
Misrepresentation as to contents of incorporation
paper 216
Misrepresentation unauthorized by the corporation 217
Misrepresentation as to, nature of transaction . . 218
Misrepresentation or mistake as to identity of com-
pany 219
How contract of subscription may be performed .... 220
Conditional agreements to take shares 221-227
Conditions precedent 221-223
In general 221
Underwriting agreements 222
Bonds or scrip convertible into shares 223
Conditions subsequent 224-226
VOL. I. — 10 145
ORGANIZATION AND ISSUE OF SHARES
Agreements to take shares (continued) Section
In general 224
Redeemable shares 225
Shares convertible into bonds, etc 226
Whether subscription to be construed as absolute or con-
ditional, and whether condition to be construed as
precedent or subsequent 227
Subscriptions to shares on special terms 228
Application of parol evidence rule to subscriptions to shares . . 229
Subscriptions in excess of the authorized capital 230
Rescission or modification of agreement to take shares 231
Remedies for breach of executory contracts of subscription 232-235
Actions at law . . . . . .• 232-233
By the subscriber 232
By the corporation 233
Bills for specific performance 234
Statute of limitations as bar to remedy 235
Laches as defence 236
Scrip and scripholders 237
Agreements made by signing incorporation paper 238-248
Peculiarity of such agreements 238
Withdrawal of subscriber before registration of instrument . 239
Effect of altering instrument before registration without sub-
scriber's consent . .... 240
Effect of registration without subscriber's authority . 241
Subscriber irrevocably bound when instrument is duly recorded . 242
Whether subscriber can avoid subscription for fraud . 243
Obligation of subscriber in other respects . . 244-249
In general , 244
Special agreements with company as to time and mode of
payment . 245
Whether shares allotted and paid for after incorporation
satisfy obligation incurred by signing the incor-
poration paper . 246
Whether subscription for preferred shares satisfied by tak-
ing and paying for common shares . . 247
Subscription of incorporation paper for shares to be issued
as fully paid without payment in full . . . . 248
Agreements made prior to incorporation otherwise than by signing
incorporation paper ... 249-260
Nature and effect in general — revocability ... .... 249
Doctrine that such agreements are irrevocable ... . 250
Subscriptions before incorporation as powers of attorney to apply
for and accept shares after incorporation . 251
Doctrine that subscriptions made before incorporation without
subscribing incorporation paper are devoid of all legal
effect 252
Attempt of promoters to release subscribers . . . 253
Requisite definiteness in subscription made before incorporation 254
Right of company to deposits paid to promoter 255
Effect of failure of company to allot shares within reasonable
time after incorporation . 256
Subscription voidable for fraud of promoter 257
146
§ 163-§ 260] WHEN CORPORATE EXISTENCE BEGINS § 163
Agreements made prior to incorporation etc. (continued) Section
Effect of departures from original scheme . 268
Signer of proposed incorporation paper not bound if company
incorporated under a different instrument .... 259
Whether de facto corporation can enforce subscription .... 260
§ 163. When Corporate Existence begins. — The execution
and registration of the incorporation paper is the first step
in the incorporation of a company under a general law ; and
usually upcMi. the due registEatix)auil-"the~in£Qi;p£ajatipn paper,
corporate existence at once,.qo-JWXie!JCe6uL..To be sure, some-
times the payment of some tax or fee is made an additional
condition precedent to incorporation/ and sometimes other
conditions precedent, such as the issuance by some public official
ofjauXfiEtifigate of due incorporation,^re pEesciibed.^ But while
injhe case.of_incorporation by specjal^ act some acceptance of
the act by the corporators is a cond.itiQ,n. prefigdent to the com-
mencement of the corporatejife, nothing of .thfi-sort is requisite
^I^S.PJSLi^!S9^P2l^^S:J^£^lSl^& gejoeEal law. No acceptance
is necessary beyond the execution of the incorporation paper.*
Nor is the organization of the corporation by election of officer^
or otherwise a prerequisite to its existence." Of course, the per-
fection of the organization is practically essential in order to
' Hunt V. Kansas, etc. Bridge Co.,
11 Kans. 412; Badger Paper Co. v.
Rose, 95 Wise. 145 ; 70 N. W. 302 ;
37 L. R. A. 162 ; Chicago, etc. R. R.
Co. V. Stafford Co., 36 Kans. 121 ; 12
Pac. 593; Atherton v. Sugar Creek,
etc. Co., 67 Ind. 334; Fayetteville,
etc. Ry. V. Aberdeen, etc. R. R. Co.
(N. Car.), 55 S. E. 345; Stokes v.
Findlay, 4 McCrary 205 ; Rose Hill
& Road Co. V. People ex rel. Law-
less, 115 III. 133; 3 N. E. 725.
Cf. Braddock v. Penn Water Co.,
189 Pa. St. 379 ; 42 Atl. 15 ; Hawes
V. Anglo-Saxon Petroleum Co., 101
Mass. 385.
' Maryland Tube Works v. West
End Imp. Co., 87 Md. 207 ; 39 Atl.
620; 39 L. R. A. 810; Cleaveland
V. MiUlin, 96 Md. 598 ; 54 Atl. 665 ;
Jones V. Aspen Hardware Co., 21
Colo. 263 ; 40 Pac. 457 ; 52 Am. St.
Rep. 220 ; 29 L. R. A. 143.
In such cases, upon payment of
the tax, does the corporate existence
relate back to time of recording of
the instrument? Cf. Gill's. Adm'x
V. Ky., etc. Mining Co., 7 Bush (Ky.)
635, 639 (headnote inadequate), and
the Maryland cases cited above.
' See supra, § 142.
' Glymont, etc. Co. v. Toler, 80
Md. 278; 30 Atl. 651; Benbow v.
Cook, 115 N. Car. 324 ; 20 S. E. 453 ;
44 Am. St. Rep. 454.
Cf. Dorsey Harvester Revolving-
Rake Co. V. Marsh, 7 Fed. Cas. 939,
941-942; Brooke v. Day (Ga.), 59
S. E. 769.
' Judah V. American, etc. Ins. Co.,
4 Ind. 333 ; Ashtabula, etc. R. R. Co.
V.Smith, 15 Ohio St. 328; Middleton
V. Arastraville Mining Co., 146 Cal.
219,222; 79 Pac. 889 ; Atherton \.
Sugar Creek, etc. Co., 67 Ind. 334 ;
Drake v. Herndon{Ky.), 91 S. W. 674.
147
§ 164 ORGANIZATION AND ISSUE OF SHARES [ChAP. HI
launch the company on its career; but technicallvJt springs
at once into existence without anything of the sort.CSo, while
the subscription of the company's capital is sometimes made
by express statute a condition precedent to incorporation,^ yet
in the absence of any such provision the corggration may come
into existence before its capital is subscribe^^^ fortiori, pay-
ment of the subscriptions to the capital is not a condition pre-
cedent to corporate existence.
§ 164-§ 167. Status of Signers of Incorporation
Paper from Moment of Incorporation.
164. Under Laws which require Signers to take one or more
Shares. — We have seen above that some incorporation laws
provide that each subscriber of the incorporation paper must
But see Aspen Water, etc. Co. v.
Aspen, 5 Colo. App. 12; 37 Pac.
728 ; Wechselberg v. Flour City Nat.
Bank, 64 Fed. 90; 12 C. C. A. 56;
26 L. R. A. 470; Lawrie v. Silsby,
56 Atl. 1106; 76 Vt. 240; 104 Am.
St. Rep. 927 (depending on a statu-
tory provision that the company
"when organized" should have
power to sue as a corporation) ;
Cazelais v. Picotte, 18 Quebec Sup.
Ct. 538 ; McVicker v. Cone, 21 Oreg.
353 ; 28 Pac. 76 ; Walton v. Oliver,
49 Kans. 107 ; 33 Am. St. Rep. 355 ;
30 Pac. 172; Brooke v. Day (Ga.),
59 S. E. 769.
Said the court in Duke. v. Ca^
hawba Nav. Co., 10 Ala. 82, 90; 44
Am. Dec. 472 : " By the organization
of a company, we understand the
meeting of individuals claiming to
be corporators, and their action in
choosing officers and agents."
Note, that if any irregularity
exist in the incorporation paper or
in the recording of the same, an
organization of the company must
be proved in order to establish a
de facto corporate existence : Martin
V. Deetz, 102 Cal. 65 ; 36 Pac. 368 ;
41 Am. St. Rep. 151. See infra, § 290.
' "When the memorandum is
duly signed and registered, though
there be only seven shares taken,
the subscribers are a body corporate
'capable forthwith' to use the words
of the enactment, 'of exercising all
the functions of an incorporated
company.' These are strong words.
The company attains maturity on
its birth. There is no period of
minority — no interval of incapac-
ity." Salomon v. Salomon & Co.
(1897), A. C. 22, 51, per Lord
Macnaghten. But now see Com-
panies Act of 1900, § 6.
' Jersey City Gas Co. v. Dwight,
29 N. J. Eq. 242 (where the statute
required the subscription of half
and the payment of twenty per
cent of the capital before the regis-
tration of the incorporation paper) ;
McVicker v. Cone, 21 Oreg. 353, 357
(headnote inadequate) ; 28 Pac. 76.
Cf. Belfast, etc. Plank Road Co. v.
Chamberlain, 32 N. Y. 651, 654-655
(stated supra, § 112).
^ Nat. Bank of Jefferson v. Texas
Investment Co., 74 Tex. 421, 435-
436; 12 S. W. 101; Minor v. Me-
chanics Bank of Alexandria, 1 Pet.
46, 62-65; Hunt v. Kansas, etc.
Bridge Co., 11 Kans. 412; Willa-
mette Freighting Co. v. Stannus, 4
148
§ 163-§ 260] STATUS OF CORPORATORS § 164
by his subscription agree to take at least one share in the
company, the precise number which he promises to take being
indicated by him at the time.' Under such laws — and the
majority of recent incorporation laws are of that class —
there may be a nice question whether the signatories of the
incorporation paper become at once actual shareholders as
distinguished from persons who have agreed to become share-
holders. Of course, they are members of the company from
the very moment of its incorporation ; and no further act, such
as entering their names on a register of members can be neces-
sary in order to constitute them members of the corporation.^
But although they are members, are they shareholders? Are
they not rather persons who have agreed and become bound to
become shareholders and who constitute the corporation, tem-
porarily, for the purpose of setting it in regular motion by the
allotment and issue of shares ? On principle, such might well be
their position. Nevertheless, we should note that the shares
which a signer of an incorporation paper agrees by his subscrip-
tion to take have been deemed in England to be "issued"
within the meaning of Section 25 of the Companies Act of 1867
as soon as the instrument is recorded ; ' and if this proposition be
logically carried out it would seem to follow that the signers
of the incorporation paper are shareholders from the very com-
mencement of corporate existence.' Moreover, in a case in the
District of Columbia it was held that the signers of an incor-
poration paper are shareholders from the moment of incorpora-
tion and as such are qualified, and the only persons qualified, to
Oreg. 261 ; Johnson v. Kessler, 76 entry on the register is a condition
Iowa 411 ; 41 N. W. 57; Thornton precedent, in the case of subscribers
V. Balcom, 85 Iowa 198 ; 52 N. W. of the memorandum, to their becom-
190 ; Jersey City Gas Co. v. Dwight, ing members. In fact, I cannot see
29 N. J. Eq. 242 ; Chicago, etc. R. R. how it can possibly be so ; because
Co. V. Stafford Co., 36 Kans. 121 ; until the company is formed no
12 Pac. 593. register can be made, and until
B\itsee Aspen Water Co. v. Aspen, there are some members the com-
5 Colo. App. 12 ; 37 Pac. 728 ; Co?i- pany cannot be formed."
tinental, etc. Paint Co. v. Secretary ' Jarvis's Case (1899), 1 Ch. 193
of State, 128 Mich. 621 ; 87 N. W. (semble) ; Ebenezer Timmins &
901. -Sons (1902), 1 Ch. 238; Dalton
' Supra, § 132. Time Lock Co. v. Dalton, 66 L. T.
' Florence Land, etc. Co., 29 704.
Ch. D. 421, 445. Said Fry, L. J. : * See also Hawes v. Anglo-Saxon
"It does not appear to me that Petroleum Co., 101 Mass. 385.
149
§ 165 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
be directors.^ In an early Indiana case, where the incorporation
act provided that the subscribers to stock should subscribe the
incorporation paper and that the first directors should be
elected by the stockholders, it was held that the subscribers of
the incorporation paper might elect the directors even before
the recording of the instrument.^
§ 165. Under Laws which do not require Signers of Incor-
poration Paper to agree to take Shares. — As stated above,
some incorporation laws do not require the signers of the in-
corporation paper to agree to take shares in the company;^
and under these statutes, of course, the subscribers of that
instrument are not shareholders but are mere promoters
whose function it is to organize the company and set it in mo-
tion.* Their position is similar to that of "commissioners to
take stock," who were often appointed in special acts of incor-
poration for the purpose of organizing the company by allotting
and issuing shares and of turning the company over to the
shareholders, its permanent proprietors. The duty of such
commissioners was to offer the shares of stock for public sub-
scription, and their connection with the enterprise terminated
as soon as the corporation could be turned over to its permanent
constituents and proprietors, namely, the shareholders. Even,
however, where the general incorporation law does not require
the signers of the incorporation paper to agree to take shares
in the company, nevertheless it would seem that until shares are
allotted and issued, the signers of the incorporation paper neces-
sarily constitute the company, and are for the time being the
supreme authority in corporate affairs.^
Their powers, however, come to an end as soon as a regular
' Dancy v. Clark, 24 App. D. C. Bank, 64 Fed. 90; 12 C'. C. A. 56;
487, 506-509. 26 L. R. A. 470; Hawes v. Anglo-
' Covington, etc. Plank Road Co. Saxon Petroleum Co., 101 Mass. 385.
V. Moore, 3 Ind. 510. But see Coyote, etc. Co. v. Ruble,
' Supra, § 132. 8 Oreg. 284, 292-293 ; Trammdl v.
• Coyote, etc. Co. v. Ruble, 8 Oreg. Pennington, 45 Ala. 673 (holding
284 ; Densmore Oil Co. v. Densmore, that a county has no authority to
64 Pa. St. 43, 54. subscribe for stock on the appli-
" Hunt V. Kansas, etc. Bridge Co., tion of the signers of the incor-
11 Kans. 412, 440; Chase v. Lord, poration paper and before the
77 N. Y. 1, 11 ; Singer Mfg. Co. v. organization, issue of shares and
Peck, 9 S. Dak. 29 ; 67 N. W. 947. election of officers) ; 1 Morawetz on
Cf. Wechselberg v. Flour City Nat. Priv. Corps., 2d ed., § 33.
150
f 163-§ 260] STATUS OF CORPORATORS § 166
organization is effected, by issue of shares and appointment of
directors.'
As was said by Danforth, J., in a New Yorlc case, "The cor-
porators are the associates who are the getters-up of the com-
pany, and whose functions cease with its organization * * * *
Corporators exist before stockholders, and do not exist with
them. When stockholders come in, corporators cease to be." ^
Under this system, as soon as the necessary number of shares are
subscribed, and the shareholders brought together and organized,
the signers of the incorporation paper simply drop out, and the
shareholders thenceforward constitute and control the corpora-
tion. Moreover, it has been held that if the corporators carry
on business without issuing stock as contemplated in the incor-
poration paper, they are liable as partners for all debts so con-
tracted.' This decision proceeds upon the theory that until
shares of stock are regularly issued the corporation "can only
be said to have existence in a very limited and qualified sense,"
and that until then limited liability is not attained. The decision
rested largely on the special terms of a Wisconsin statute; and
moreover its authority is considerably weakened by a very
vigorous and able dissenting opinion. Accordingly, the South
Dakota court refused to apply the principle of the last cited de-
cision to a similar case arising under the South Dakota statutes.*
Of course if the corporators carry on business before recording
the certificate or performing other conditions precedent to in-
corporation, they may be subject to a partnership liability (unless
the company can be deemed a de facto corporation) as members
of an unincorporated association.^
§ 166. Mode o£ Action by Corporators. — Action taken by
subscribers of the incorporation paper, being corporate action,
should be taken at a meeting convened upon reasonable notice
' Ellison V. MoUle, etc. R. R. Co., = Chase v. Lord, 77 N. Y. 1,
36 Miss. 572; Wechselberg v. Flour 11.
City Nat. Bank, 64 Fed. 90, 97 ; 12 ' Wechselberg v. Flour City Nat.
C. C. A. 56; 26 L. R. A. 470 Bank, 64 Fed. 90; 12 C. C. A. 56;
(semble) ; Chase v. Lord, 77 N. Y. 26 L. R. A. 470.
1, 11. • Singer Mfg. Co. v. Peck, 9
Cf. Wdlersburg, etc. Plank Road S. Dak. 29 ; 67 N. W. 947.
Co. V. Hoffman, 9 Md. 559, 568-569 « Ryland v. Hollinger, 117 Fed.
(as to the functions of commissioners 216 (semble, as to Missouri law),
to take stock). See also infra, § 293.
151
§ 167 ORGANIZATION AND ISSUE OF SHAEES [ChAP. Ill
to all of them.' Indeed, such meetings would seem to be gov-
erned in the main by the same rules of law as shareholders'
meetings.^
§ 167. Clerks and other Subordinates as Corporators. — Often,
indeed commonly, the incorporators or signers of the incorpora-
tion paper are not the substantial promoters of the enterprise,
but mere clerks or dummies. This practice has been judicially
disapproved, and is undoubtedly foreign to the intent of the
incorporation laws.'
§ 168. The First Directors. — Directors for the first year of
the company's existence are oftentimes named in the incorpora-
tion paper or appointed under its provisions ; ' and some incor-
poration laws provide that the subscribers of the incorporation
paper shall act as directors during the first year of the company's
existence. Any such first directors have the same powers as
directors chosen by the shareholders ; ^ and to them therefore
are usually entrusted the practical details of organization and
allotment and issue of shares. Nevertheless, it would seem that
the signers of the incorporation paper, constituting as they do
' Cf. Low V. Conn., etc. R. B. Co^, foreign to the manifest intent of
45 N. H. 370, 379-380 (as to action the statute, as the organization is
by persons named as corporators in placed entirely within the control
a special act of incorporation) ; of the signers, and without their
Woolf V. East Nigel Gold Mining Co., action to that end strangers cannot
21 Times L. R. 660 (notice of meet- obtain admission as stockholders."
ing of corporators sent out before Wechselberg v. Flour City Nat.
incorporation, held not valid). Bank, 64 Fed. 90, 97; 12 C. C. A.
' For a summary of the English 56 ; 26 L. R. A. 470.
cases as to action by subscribers of * See supra, § 115. As to the
the incorporation paper, see infra, election of the first directors by
§ 1466. the subscribers of the incorporation
^ "It is insisted that these cor- paper before the instrument is re-
porators are merely nominal parties, corded, see Covington, etc. Plank
and should not be regarded as con- Road Co. v. Moore, 3 Ind. 510;
tractors in any sense ; that it has Moller v. Maclean, 1 Megone, 274.
become common practice to take, ' Middleton v. ArastraviUe Min-
for the time being, any persons who ing Co., 146 Cal. 219, 222; 79 Pao.
may be convenient for the purpose, 889 ; Hamilton Trust Co. v. Clemes,
leaving the real projectors to come 163 N. Y. 423 ; 57 N. E. 614.
in with the subscription for stock. But see Allman v. Havana, etc.
Such view or practice is entirely R. R. Co., 88 111. 521, 524.
152
§ 163-§ 260] ISSUE OF SHARES § 171
for the time being the members of the corporation, would
necessarily have the power, if they should choose to exercise it,
of stepping in and controlling the actions of these directors, to
the same extent as shareholders of a fully organized corporation
may step in and control the actions of the directors.' Of course,
the first directors that are chosen by the shareholders after
shares have been issued do not differ in any respect from
directors chosen after the company has been actively engaged
in business.
§ 169-§ 176. ALLOTMENT AND ISSUE OF SHARES.
§ 169. Issue of Shares necessary to complete Orgamzation.
— Even where the subscribers of the incorporation paper are
shareholders in the company, and a fortiori where they are not,
although the technical incorporation may be complete on the
registration of the paper, yet the company is not regularly or-
ganized until shares are allotted and issued, and the permanent
organization effected. This process of organization, therefore,
next demands attention.
§ 170-§ 174. Who are Shareholders — What constitvies
an Issue of Shares.
§ 170. Statement of Question. — In the first place, the ques-
tion must be considered what is necessary to constitute a share-
holder as distinguished from a person who has merely agreed
to become a shareholder.^ When may shares be said to be
issued ?
§ 171. Issue of Share-Certiflcate not necessary, — At the
outset, it is clear that the issue of a share-certificate is not neces-
sary in order to make a person a shareholder. A certificate is
merely convenient evidence of his title, and a person may un-
doubtedly be a shareholder in a corporation although no certifi-
' As to these powers see infra, a shareholder at a future time ; and
§ 1191, § 1440, § 1441. a contract to become a shareholder
' "It is important to distinguish at a future time must again be dis-
between the contract of member- tinguished from a contract to pur-
ship actually existing among ihe chase shares which have already
shareholders or members of a oor- been issued." 1 Morawetz on Priv.
poration, and a contract to become Corps., 2d ed., § 46.
153
§ 171 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
cate has ever been issued to him ^ or although his certificate may
have been lost or stolen, or although the certificate delivered to
him leaves a blank for his name.^ Hence, in an action by a cor-
poration on a contract of subscription to its shares, while the
company must show that it was ready and able to carry out its
part of the contract by issuing the shares as agreed,' yet there
is no necessity for proving a tender of a share-certificate.* For
the same reason, where land is conveyed to a corporation in
consideration of an issue of its shares to the grantor, the com-
pany may be deeme'd a purchaser for value, so as to cut o£E un-
disclosed equities, even before any share-certificate is issued.'
Hence, too, the fact that no certificate is to be issued within a
year after the subscription does not bring the agreement within
the clause of the statute of frauds as to contracts not to be per-
formed within a year." So also, in pleading, as for example in
an action for unpaid dividends by a holder of preferred shares,
the share certificates are not of the substance of the issue ; ' and
if the pleader chooses to set them out in the pleadings according
to their tenor, they should not be excluded as evidence because
' Blyth's Case, 4 Ch. D. 140;
Clark's Case, 8 Ch. D. 635 (semble) ;
Hawley v. Upton, 102 U. S. 314
(where the court used "subscriber"
in the sense of shareholder) ; Smith
V. Gower, 63 Ky. 17 ; San Joaquin,
etc. Co. V. Beecher, 101 Cal. 70 ; 35
Pac. 349 ; Barron v. Burrill, 86 Me.
66; 29 Atl. 939; California, etc.
Hotel Co. V. CaUender, 94 Cal. 120 ;
29 Pac. 859; 28 Am. St. Rep. 99;
Mass. Iron Co. v. Hooper, 7 Cush.
(Mass.) 183, 188 (headnote inade-
quate) ; Agricultural Bank v. Burr,
24 Me. 256; Burr v. Wilcox, 22
N. Y. 551; Cotter v. Butte, etc.
Smelting Co., 77 Pac. 509 (headnote
inadequate); 31 Mont. 139; South
Dakota v. North Carolina, 192 U. S.
286; 24 Sup. Ct. 269; Corwith v.
Culver, 69 111. 502; Pacilic Nat.
Bank v. Eaton, 141 U. S. 227, 230 ;
11 Sup. a. 984.
But see Bush's Case, 9 Ch. 554;
Pietsch V. Krause, 93 N. W. 9; 116
Wise. 344 (the words "issue any
stock'' and "stock issued" held to
refer to the issue of certificates).
= Sanger v. Upton, 91 U. S. 56,
63-64.
' Carter, etc. Co. v. Hazzard, 65
Minn. 432; 68 N. W. 74; Oler v.
Baltimore, etc. R. B. Co., 41 Md.
583.
* Webb V. Baltimore, etc. R. R. Co.,
77 Md. 92 ; 26 Atl. 113 ; 39 Am. St.
Rep. 396; Smith v. Gower, 63 Ky.
17 ; Slipher v. Earhart, 83 Ind. 173 ;
Fulgam v. Macon, etc. R. R. Co., 44
Ga. 597 {Quwre, whether the reason-
ing in this case can be supported) ;
Marson v. Deither, 49 Minn. 423;
52 N. W. 38 ; 2 Clark & Marshall on
Priv. Corps., § 462 d.
Cf. Hawley v. Upton, 102 U. S.
314.
' Frenkel v. Hudson, 82 Ala. 158 ;
2 So. 758 1 60' Am. St. Rep. 736.
Cf. infra, § 175.
° Reed & McCormick v. Gold
(Va.), 45 S. E. 868.
' But see infra, § 1360.
154
§ 163-§ 260] ISSUE OF SHARES § 173
of verbal Inaccuracies in the description.' As a certificate is of
merely evidential value, it follows that certificates issued before
the incorporation may, if recognized by the company, have the
same effect as if issued after incorporation.^
§ 172. Entry of Shareholder's Name on Register necessary
in England. — In England, by virtue of certain provisions in
the Companies Act, entry on the company's register of share-
'holders is, with the possible exception of subscribers of the memo-
randum of association,^ a condition precedent to becoming a
shareholder.* A person may have a right to become a share-
holder, but unless and until his name is entered on the
company's register of shareholders he cannot be an actual
shareholder. The stubs of a certificate book cannot constitute
a register of shareholders within the meaning of this rule.^ On
the other hand, a person may be a shareholder although the
register on which his name is entered does not in all respects
comply with the statutory requirements." But while entry of
one's name on the register is necessary, it is not, taken by itself,
sufficient, to render a person a shareholder. In addition, it
must be shown that the entry was with his knowledge and
assent or acquiescence.'
§ 173. American Rules as to Entry on Register. — This rule
that only those persons whose names have been entered on the
register can be deemed actual shareholders, as distinguished
from persons who have agreed to become shareholders, is very
convenient in practice. For it is very desirable to have some
simple criterion for determining whether a person is a. share-
holder or not. Nevertheless, many, perhaps most, American
courts would hold that no such rule can be enforced unless
affirmatively laid down by statute.* According to this view of
' Bates V. Androscoggin, etc. B. R. 1 Ch. 89 (note the argument for the
Co., 49 Me. 491. liquidator). Cf. infra, § 864.
^ Thorpe v. Pennock Mercantile " East Gloucestershire Ry. Co. v.
Co. (Minn.), 108 N. W. 940. Bartholomew, L. R. 3 Ex. 15.
' See Florence Land Co., 29 0^1). ' Arnot's Case, .36 Ch. D. 702;
421 ; Ebenezer Timmins & Sons Plimsoll's Case, 24 L. T. 653 ;
(1902), 1 Ch. 238; and supra, TTeicA v. Gi7ZeZen, 82 Pac. 248; 147
§ 164. Cal. 671 (construing a statute sim-
^ Florence Land Co., 29 Ch. D. ilar to the British law). See alpo
421 ; MacDonald, Sons & Co. (1894), § 873.
1 Ch. 89. * Cf. Troy, etc. R. R. Co. v.
^ MacDonald, Sons & Co. {1894), Tibbits, 18 Barb. (N. Y.) 297;
155
§ 173 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
the common law, all that is necessary to constitute a person a
shareholder is a present intention on his part and on the part
of the company that the relation of shareholder and corporation
subsist between them. When once that intention exists, the
relationship is eodem instanti established without the necessity
of any formality whatsoever.' The same rule has been applied
even where it is expressly provided that the shares shall be
transferable only by entry in the company's books; for that
provision, it was held, does not refer to an original issue of shares
but only to transfers from one shareholder to another.^ Never-
theless, it is submitted that a different decision would have been
more in accord with the spirit of the provision in question. A
subscriber, however, who is in default in payment of a deposit
payable on allotment is not entitled to the rights of a share-
holder,^ even though he may be subject to the burdens. And
sometimes acts of incorporation or other statutes require certain
formalities — such as the execution of a formal subscription
paper or the payment of a deposit by way of earnest — as con-
ditions precedent to becoming for any purpose an actual share-
Hussey v. Manufacturers' Bank,
10 Pick. (Mass.) 415, 422 (headnote
inadequate) ; Manchester St. Ry. Co.
V. Waiiams, 71 N. H. 312, 317
(headnote inadequate) ; 52 Atl. 461 ;
Welch V. Gulden, 82 Pac. 248; 147
Cal. 571 (where a statute declared
all persons shareholders whose names
appeareij on the register) ; Union
Nat. Bank v. Scott, 53 N. Y. App.
Div. 65 ; 66 N. Y. Supp. 145 (where
ratio decidendi was that a statute
making the stock-book prima facie
evidence should not have the effect
of making it conclusive evidence).
' "An offer to become a share-
holder, when accepted by or on
behalf of the members of the com-
pany, constitutes the offerer a
shareholder." 1 Morawetz on Priv.
Corps., 2d ed., § 46, p. 46.
Accord : Smith v. Gower, 63 Ky.
17; Wempie v. St. Louis, etc. R. R.
Co., 120 111. 196; 11 N. E. 906;
Spear v. Crawford, 14 Wend. (N. Y.)
20, 24-25 ; 28 Am. Dec. 513.
Cf . Butter University v. Scoonover,
114 Ind. 381 ; 16 N. E. 643; 5 Am.
St. Rep. 627 ; Nickum v. Burkhardt,
30 Oreg. 464 ; 47 Pac. 788 ; 48 Pac.
474; 60 Am. St. Rep. 822; Flour
City Nat. Bank v. Shire, 88 N. Y.
App. Div. 401 ; 84 N. Y. Supp. 810;
affirmed short, 179 N. Y. 587; 72
N. E. 1141; Acadia Loan Corp. v.
Wentworth, 40 Nova Scotia 525.
In Busey v. Hooper, 35 Md. 15, 31 ;
6 Am. Rep. 350, the court said,
"None of the cases decide that the
mere fact of subscribing to the stock
of an incorporated company con-
stitutes the subscriber a stockholder,
but that such subscription puts it in
his power to become a stockholder,
by compelling the corporation to
give him the legal evidence of his
being a stockholder, upon his com-
plying with the terms of the sub-
scription."
' Burr V. Wilcox, 22 N. Y. 551.
' Busey v. Hooper, 35 Md. 15 ; 6
Am. Rep. 350.
156
f 163-§ 260] ISSUK OF SHAKES § 174
holder as distinguished from one who has merely agreed to
become a shareholder.'
§ 174. Payment for Shares not necessary before Subscriber
can become a Shareholder. — It goes without saying that, in
general, payment for the shares subscribed for is not necessary
in order that the subscriber may become a shareholder.^ Indeed,
frequently in England and sometimes in the United States, cor-
porations carry on business for years although only a fraction
of the nominal value of their outstanding shares has been paid
in. On the other hand, where an established corporation in-
creases its capital, some courts have held that the subscribers
for the new shares do not become members of the corporation
until actual payment therefor.' Perhaps the best rule is that
in each case it is a question of intention (subject to any formal
requirements, such, for example, as the requirement of entry on
the register of members); and that much slighter evidence of
an intention that shares should not be deemed to be issued until
paid for would be required in the case of shares of an increase
of capital than in the case of the original or formative shares.
It is diflBcult to say that as an unbending rule of law, new shares
created by way of increase of capital can never be issued until
paid for.* At all events, in England there is certainly no such
rule, as many cases attest in which no point of the kind was
raised or thought of.
' Charlotte, etc. R. R. Co. v. In some American states, statutes
Blakely, 3 Strob. (S. Car.) 245. See forbid the issue of shares except for
also infra, § 200. money, property, etc., actually re-
Cf. East Gloucestershire Ry. Co. v. ceived. See infra, § 798.
Bartholomew, L. R. 3 Ex. 15. As to whether a shareholder can
' Downing v. Potts, 23 N. J. Law require the company to issue a share
66 ; Mass. Iron Co. v. Hooper, 7 certificate before he has paid in full,
Cush. (Mass.) 183, 188 (headnote see infra, § 513.
inadequate) ; Curry v. Scott, 64 Pa. ' Baltimore City Pass. Ry. Co. v.
St. 270 ; Waukon, etc. R. R. Co. v. Hambleton, 77 Md. 341 ; 26 Atl. 279.
Dwyer, 49 Iowa 121, 125; Smith v. ♦ Cf. infra, § 591. See also Boo{h
Burns Boiler & Mfg. Co. (Wise), v. Campbell, 37 Md. 522 (declaring
111 N. W. 1123, 1127 (semble). that subscriber to shares of in-
But see Chase v. Sycamore, etc. creased stock is subject to a
iJ. iJ. Co., 38 111. 215, 218; Coleman statutory Uability to creditors be-
V. Spencer, 5 Blackf. (Ind.) 197. fore payment in full).
157
§ 175 OEGANIZATION AND ISSUE OF SHARES [ChAP. Ill
§ 175. When Issue of Shares becomes equivalent to Pa3rment
of Value by Company. — The issue of shares is a valuable con-
sideration, and may therefore entitle the company to the rights
of a purchaser for value as to any property transferred in pay-
ment of the shares.' In one case, however, it was held that
inasmuch as the company may cancel the shares so long as they
remain in the hands of the original allottee in case of failure of
title to the property transferred in payment, therefore the com-
pany could not occupy the position of a bona fide purchaser for
value of that property unless the shares had been transferred by
the allottee.^ The issue of the shares, it was said, was no more
the payment of value than the giving of the company's note
would have been. The analogy, however, is far from complete ;
since an issue of shares is more nearly equivalent to an assign-
ment of property than to the creation of a mere obligation.
§ 176. Allotment of Shares. — The term allotment is often
used in connection with the issue of shares, not infrequently
without any accurate understanding of its meaning. The word
properly denotes an acceptance by the corporation of an offer
to take a definite number of its shares.* For instance, a person
applies to the company for, say, one hundred shares or such
smaller number as may be granted to him. The directors reply,
saying that they accept his offer for one hundred shares and
agree to issue them to him. Their action is an allotment of the
shares — an appropriation of a definite number of shares for
a particular applicant." An allotment does not necessarily in-
' Whittle V. VanderbUt Mining 51 ; Lake Superior Navigation Co. v.
Co., 83 Fed. 48; Frenkel v. Hudson, Morrison, 22 Up. Can. C. P. 217.
82 Ala. 158; 2 So. 758; 60 Am. St. * "There is no difference, as has
Rep. 736. been often pointed out, between a
' Wyeth V. Renz-Bowles, 66 S. W. contract to take shares and any
825 ; 23 Ky. Law Rep. 2337. other contract. What is termed
^ The term is also sometimes used ' allotment,' is generally neither
in America to denote the appor- more nor less than the acceptance by
tionment of the stock of a corpo- the company of the offer to take
ration among subscribers whose shares. To take the common case,
subscriptions exceed in aggregate the offer is to take a certain number
amount the authorized capital, of shares, or such a less number of
See, for an example, 1 Morawetz on shares as may be allotted. That
Priv. Corps., 2d ed., § 58. offer is accepted by the allotment
For other instances of uses of the either of the total number mentioned
word in a different sense from that in the offer or a less number to be
defined above, see Re Barber, 15 Jur. taken by the person who made the
158
§ 163-§ 260] TIME FOR ALLOTMENT AND ISSUE § 177
dude any entry on the company's books; and even if an entry
is made, the entry on the books is not the allotment. The ac-
ceptance of the applicant's offer is the allotment, and like any
other acceptance is not complete or effective until communicated
in some way to the offerer/ There may be an allotment without
specifying the distinguishing numbers of the allotted shares,
even where as in Eng and every share has its own denoting
number.^ The term is not equivalent to "issue:" shares may
be allotted before they are issued.^ Indeed, an allotment is more
properly a promise to issue than an actual issue of shares. Of
course, however, the shares may be issued immediately after
the allotment or perhaps even simultaneously therewith. And
in those of the United States in which a mere mutual agreement
between the corporation and an applicant for shares that the
relationship of shareholder and company shall thenceforth sub-
sist between them is sufficient to constitute the applicant an
actual shareholder without further ceremony, the mere allot-
ment, completing as it does the contract between the parties,
may be enough to establish the relationship. Nevertheless, that
effect is accidental, and is not an essential part of the allotment.
§ 177. When Shares may be allotted and issued — When
Business may be commenced. — The right of a company to
perfect a regular permanent organization by the issue of shares
offer. This constitutes a binding the specified number of shares, and
contract to take that number ac- under which the person who has
cording to the offer and acceptance, made the offer and is now bound by
To my mind, there is no magic the acceptance is bound to take that
whatever in the term 'allotment' as particular number of shares." Per
used ill these circumstances. It is Chitty, J., in Florence Land Co., 29
said that the allotment is an appro- Ch. D. 421, 426. "The term 'allot-
priation of a specific number of ment ' is a popular term ; it is not a
shares. It is an appropriation, not technical term occurring in the Act
of specific shares, but of a certain of Parliament itself." Id., p. 427.
number of shares. It does not, ' See infra, § 186.
however, make the person who has ' Adams' Case, 13 Eq. 474, 483.
thus agreed to take the shares a Cf. National Ins. Co. v. Egteson,
member from that moment; all 29 Grant (Can.) 406.
that it does is simply this — it con- ^ Clarke's Case, 8 Ch. D. 635 ;
stitutes a binding contract under Thomson's Case, iDeG. J. &S. 749.
which the company is bound to Cf. East Gloucestershire Ry. Co. v.
make a complete allotment (sic) of Bartholomew, L. II. 3 Ex. 15.
159
§ 177 ORGANIZATION AND ISSUE OF SHAKES [ChAP. Ill
must be distinguished from the right to commence business. In
the absence of some regulation to the contrary by statute or other-
wise, a corporation may organize by the allotment and issue of
shares immediately upon the registration of the incorporation
paper or as soon thereafter as persons can be found willing to
accept the shares.
Statutes sometimes require additional conditions to be com-
plied with before the company may begin business. Such con-
ditions, although conditions precedent to the right to commence
business, are merely conditions subsequent to incorporation. As
such, breach is ordinarily no more than a cause of forfeiture to
be taken advantage of by the state alone.' One such condition
has been thought to be implied from the very nature of a corpora-
tion having a fixed capital, namely, that the entire capital of
the company be subscribed. To be sure, in England, a company
may, except so far as expressly restrained by statute,^ commence
business immediately upon its organization notwithstanding the
fact that its capital has not been fully subscribed and in spite
of the opposition of a minority shareholder.^ In America, a
company may, as in England, allot and issue shares before the
authorized capital has been completely subscribed,* and may even
begin business by unanimous consent or in pursuance of a pro-
vision in the incorporation paper;' but it is generally thought
that except under such circumstances, a corporation with a fixed
limited capital has no right to commence business before all its
shares are taken," so that any shareholder might enjoin the trans-
' Hammond v. Straus, 53 Md. 1, 2 Hem. & Mill. 528. But cf. Elder
14-15. See also infra, § 265. But v. New Zealand Co., 30 L. T. 285.
cf. Bums V. Beck, etc. Co., 83 Ga. See also infra, § 754, and Laugier
471 ; 10 S. E. 121. v. Victorian, etc. Power Co., 16 Vict.
» The Companies Act of 1900, L. R. 64.
63 & 64 Vict., c. 48, § 4, requires ♦ 1 Morawetz on Priv. Corps., 2d
certain rather burdensome conditions ed., § 57. ^
to be met before the first allotment ' Sweney Bros. v. Teicott, 85
can take place, and if an allotment Iowa 103; 52 N. W. 106; Nichols
is made in violation of these condi- v. Burlington, etc. Plank Road Co.,
tions, an allottee may have his 4 G. Greene (Iowa) 42.
name stricken from the register and ' 1 Morawetz on Priv. Corps., 2d
his deposit returned. Cf. Mears v. ed., § 408. But see Johnson v.
Western Canada Pul-p Co. (1905), Kessier, 76 Iowa 411 ; 41N. W. 57;
2 Ch. 353 ; Finance & Issus v. FayettevUle, etc. Ry. v. Aberdeen, etc.
Canadian Produce Corp. (1905), 1 R. R. Co. (N. Car.) 55 S. E. 345;
Ch. 37. Newcastle, etc. Turnpike Co. v. Bell,
» MacDougaU v. Jersey Hotel Co., 8 Blackf. (Ind.) 584.
160
§ 163-§ 260] THE FIRST TilEETING § 178
action of any business. This doctrine is indeed the basis of the
all but universal American rule prohibiting any calls upon share-
holders before the authorized capital is fully taken.' This Ameri-
can rule, requiring that all the shares be subscribed before the
company commences business, is not affected by a statutory
provision authorizing the company to commence business as
soon as the incorporation paper is filed ; for such a provision is
construed to mean that the company may begin business if other-
wise qualified.^
§ 178. First Meeting of Corporation. — The first or organiza-
tion meeting of a corporation is of much less importance where
the company is formed under a general law than under a special
act, which must be accepted before corporate existence com-
mences. In the latter case, the corporation comes into being at
that meeting, while in the former, the meeting would not seem
to differ greatly in kind from any other meeting of the members
of an existing company. For instance, a failure to give due
notice of the first meeting to all entitled to such notice will not,
where the company is being organized under a general law,
vitiate the corporate existence, at least as against one who par-
ticipated in the proceedings ; ' and failure to give a formal notice
prescribed by statute is quite immaterial where all the subscribers
waive the statutory notice.* Whilst the organization meeting of
a company incorporated under modern general incorporation
laws is not the equivalent of the meeting of the incorporators of
a company incorporated by special act held for the purpose of
accepting the charter, so that the cases which hold that accept-
ance of a special act of incorporation must take place within the
company's home state ^ are distinguishable ; nevertheless, the
' Infra, § 754. tors can be legally convened, see
' Livesey v. Omaha Hotel Co., 5 supra, § 166, and infra, § 1466.
Nebr. 50 (headnote inadequate). * J. W. Butler Paper Co. v. Cleve-
Cf. Masonic Temple Ass'n v. Charts land, 220 111. 128 ; 77 N. E. 99.
ndl, 43 Minn. 353, 354 ; 45 N. W. » MUler v. Ewer, 27 Me. 509
716. 46 Am. Dec. 619; Camp v. Byrne,
' Nickum v. Burkhardt, 30 Oreg. 41 Mo. 525 (semble) ; Freeman v,
464; 47 Pac. 788; 48 Pac. 474; 60 Machias Water, etc. Co., 38 Me. 343
Am. St. Rep. 822. Smith v. Silver Valley Mining Co,
a. Packard v. Old Colony R. R. 64 Md. 85 ; 20 Atl. 1032 ; 54 Am,
Co., 168 Mass. 92; 46 N. E. 433; Rep. 760.
Walworth v. Brackett, 98 Mass. 98. But see Heath v. SUverthorn, etc.
As to how a meeting of corpora- Co., 39 Wise. 146.
VOL. I. — 11 161
§ 179 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
first or organization meeting of any corporation undoubtedly
performs a corporate function in the strictest sense of the word
and therefore, according to the prevailing rule, cannot be held
in a foreign state.'
§ 179-§ 260. AGREEMENTS TO TAKE SHARES.
§ 179. Scope of Treatment. — The matter of agreements to
take shares has been the subject of a vast deal of litigation, and
has received elaborate and, on the whole, full and satisfactory
treatment at the hands of text-writers. Consequently, an ex-
haustive consideration of this topic is unnecessary here. Suf-
fice it to give a general outline of the law, pursuing a somewhat
different scheme and approaching the subject from a somewhat
different side from the well-known American treatises, making
particular reference to those points which have received hitherto
but scant attention in this country.
§ 180. The Name, "Subscriptions" — Nature of Agree-
ments — distinguished from Act of becoming a Shareholder and
from Agreements for Purchase. — Agreements to take shares,
especially in America, are often called subscriptions to shares or
subscriptions to stock. The word "subscription" in that con-
nection must not be taken literally ; for it denotes any agreement
to take shares whether made by signing or subscribing some
document or otherwise.^ It has been said that an agreement to
"subscribe" for shares means, not that the subscriber will
necessarily take the shares himself, but that he will either take
them or find some one else to take them.^ The term subscription
to shares is sometimes used to denote the so-called contract of
membership in a corporation — that is, the act of becoming a
> Duke V. Taylor, 37 Fla. 64 ; 19 19 Wall. 241. But see Thames
So. 172; 53 Am. St. Rep. 232; 31 Tunnd Co. v. Sheldon, 6 B. & C.
L. R. A. 484 (where the supposed 341.
corporators were held liable as As to the meaning of the terms
partners; sed qucere, was this "subscribe for" and "agree to take"
correct?). For explanation of this with reference to shares, see further
case, see § 1212 note. Sagory v. Dubois, 3 Sandf. (N. Y.)
Upon the whole subject, cf. infra, 466 ; Cheraw, etc. R. R. Co. v. White,
§ 1212. 14 S. Car. 51.
' Henderson v. Lacon, 5 Eq. 249 ' London & Colonial Finance
(semble); Nugent v. Supervisors, Corp., 77 L. T. 146.
102
§ 163-§ 260] SUBSCRIPTIONS TO SHARES § 181
member rather than a contract to become a member.' This
usage is probably in large measure due to the fact, which has
already been mentioned, that in America no formality is, in
general, necessary in order to become a member of a corpo-
ration. The usage is, however, apt to lead to confusion. For
it is important to discriminate sharply between a contract to
become a member and the act of becoming a member. It is
the same difference as that between an executory contract of
sale and a present transfer of title or between a contract to
marry and a marriage.
Moreover, a contract to take shares must be distinguished
from a contract to purchase shares.^ On principle, it seems
clear that a corporation cannot agree to sell its own unissued
shares,^ although it may sell shares which have once been
issued and which by forfeiture, surrender, or otherwise have
revested in it.
§ 181. Classification of Agreements to take Shares — Scheme
of Treatment. — Agreements to take shares may be divided into
three classes: first, agreements entered into prior to the incor-
poration of the company otherwise than by signing its memoran-
dum of association or incorporation paper; second, agreements
entered into by subscribing the incorporation paper ; and, third,
agreements made after incorporation. These three classes will
be considered in reverse order, because the last mentioned class
is the simplest, and is governed by rules of law more nearly ap-
proximating the ordinary principles of the law of contracts than
is either of the other classes. In dealing with the other two
■ E. g. 2 Clark & Marshall on Co., 106 N. Y. Supp. 878 (holding
Priv. Corps. , § 442. that an original issue of shares is not
" Wemple v. St. Louis, etc. B. B. subject to a tax as a "sale" of stock).
Co., 120 111. 196; 11 N. E. 906; But see Clark \. Continental Imp.
Ottawa, etc. B. B. Co. v. Black, 79 111. Co., ,57 Ind. 135. Cf. Bates v. Great
262; Lincoln Shoe Mfg. Co. v. Western Tel. Co., lS4 111. 536; 25
Sheldon, 44 Nebr. 279 ; 62 N. W. 480. N. E. 521.
Cf. Otter V. Brevoort Petroleum Co., Certainly, the subscription to or
50 Barb. (N. Y.) 247 ; Humaston v. purchase of shares, even preferred
Telegraph Co., 20 Wall. 20, 29 shares, cannot be regarded as in the
(declaring that in the case of a con- nature of a loan or advance ; Orover
tract by a company to sell its own v. Cavanaugh (Ind'), 82 N. E. 104
shares it may go into the market and (holding that oral representations
buy shares to transfer to the pur- as to the financial condition of the
chaser). company are actionable notwith-
' Cf. People V. Duffy-Mclnnerny standing Lord Tenterden's Act).
163
§ 182 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
classes of agreements, it will be necessary to advert only to their
peculiarities — to the points in which they differ from agree-
ments made after incorporation.
§ 182-§ 238. AGREEMENTS MADE AFTER INCORPO-
RATION.
§ 182. Application of general Principles of Law of Contracts
and of Agency. — In general, agreements to take shares in a
corporation already formed are governed by the same princi-
ples as other contracts in respect to offer and acceptance, con-
sideration, and similar matters.' Indeed, it so happens that
many of the leading English cases upon that branch of the law
of contracts have had to do with agreements to take shares in
corporations. So too, the law of agency applies to contracts to
take shares in a company.^
§ 183. Which Party to be deemed the Offerer. — The offer
may in theory be made by either party — either by the com-
pany or by the intended shareholder. In practice, the con-
tract is usually made by the company's acceptance of an offer
or application made by the person who is to take the shares.
Indeed, the company is rarely the offerer except in cases where
on an increase of capital the new shares are offered to the old
shareholders in proportion to their former holdings, or in cases
where the company in purporting to accept an offer of an ap-
plicant for shares introduces, perhaps inadvertently, some new
term, so that the supposed acceptance is in legal effect a
counter offer. To be sure, corporations often solicit subscrip-
tions to their capital ; but such solicitations are not in law offers
which may be accepted by anybody who desires so to do,' but
are rather advertisements for offers. And even where a cor-
poration offers a definite number of shares to a particular
person, the transaction will if possible be construed as a mere
solicitation for an offer to take so many shares.*
' See supra, p. 158 note 4. • Cf. Re Barber, 15 Jur. 51 ;
» See infra, $ 201. Wallace's Case (1900), 2 Ch. 671
" But see Greer v. Chartiers Ry. (stated infra, p. 170 note 3).
Co., 96 Pa. St. 391, 42 Am. Rep.
648.
164
§ 163-§ 260] OFFER AND ACCEPTANCE § 184
§ 184-§ 191. CASES WHERE THE OFFER IS MADE BY THE
SUBSCRIBER.
§ 184-§ 189. Acceptance of Offer, or Allotment.
§ 184. In general. — As shown above, the company's accept-
ance of an application for shares by an intended shareholder
is what is known as an allotment of shares.* This acceptance
is like any other acceptance ; and must be of precisely what was
offered. For example, an application to take a definite number of
shares cannot be accepted by the allotment of any less number; ^
and for this reason, applications are frequently made for a cer-
tain number of shares or such less number as may be allotted.
Likewise, an application for paid-up shares cannot be accepted
by an allotment of shares not fulty paid.' So, an application for
£20 shares cannot be accepted by the allotment of an equivalent
amount in £40 shares ; * and an offer to take shares to be issued
by way of increase of capital cannot be accepted by an allotment
of shares in the original capital of the company.* Indeed, any
new term sought to be introduced in the acceptance vitiates it.
Thus, where the letter of allotment stated that unless payment
for the shares should be made on the day named for payment
in the application the shares would be forfeited, the supposed
acceptance added to the term of the offer so that there was no
completed contract." A fortiori, an application for shares on
the terms that £2 per share shall be paid on allotment is not
accepted by letter of allotment which states that payment of
the allotment money must be made before a certain date ; ' the
argument that the naming of the date merely fiixed a reasonable
time and so did not depart from the offer did not prevail with
the court.
' Supra, § 176. Of course, the laches in not making a prompt
applicant is not bound until allot- objection to the allotment) ; Rand
ment. Infra, § 190. v. Columbia Nat. Bank, 94 Fed. 349 ;
' Cf. Ex parte Roberts, 1 Drewry 36 C. C. A. 292 (same point as last
204. , case).
' Wynne's Case, 8 Ch. 1002. Cf. " Addinell's Case, 1 Eq. 225 ;
infra, § 233, § 778, § 789. Jackson v. Turquand, L. R. 4 H. L.
■■ Custard's Case, 8 Eq. 438. 305.
^ Stephens v. Follett, 43 Fed. 842. Cf. Oriental, etc. Steam Co. v.
Cf. Bailey v. Tillinghast, 99 Fed. Briggs, 4 De G. F. & J. 191.
801, 811 ; 40 C. C. A. 93 (where the ' Pentelow's Case, 4 Ch. 178.
Bubscriber was held estopped by his
165
§ 185 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
§ 185. Written Offer as affected by Parol Qualifications. —
On the other hand, a written appHcation may be accepted as it
stands, an oral quahfication thereof being disregarded ; ' but
where the quahfication is contained in a writing which accom-
panies the formal written apphcation, the accompanying quahfi-
cation is part of the offer, so that an attempted acceptance
rejecting the quahfication is nugatory.^ Moreover, a written
apphcation dehvered to a third person as an escrow or subject
to a parol condition cannot be accepted until the condition is
performed.'
§ 186. Allotment incomplete until made known to Applicant.
— An allotment of shares, being an acceptance of an offer, is,
like other acceptances, incomplete until communicated to the
offerer.* Hence, although the company may vote to accept the
application and may even place the applicant's name on the
register of shareholders, yet if notice of the allotment be not com-
municated to the applicant, he will not be bound.^ Of course,
notice of the allotment given to an agent of the applicant author-
ized to receive the same is sufficient." An agent who is authorized
to apply for shares is usually competent also to receive notice
' Harrison's Case, 3 Ch. 633. accepting his own offer to subscribe
Cf. Scarlett v. Academy of Music, to its shares, see Greer v. Chartiers
46 Md. 132. Ry. Co., 96 Pa. St. 391 ; 42 Am.
= Roger's Case, 3 Ch. 633. Rep. 548.
" GUman v. Gross, 97 Wise. 224 ; As to whether notice of a call is
72 N. W. 885; Ontario Ladies sulScient notice of an acceptance of
College v. Kendry, 10 Ont. L. R. 324. the application, see Canadian Tin
* Cozart V. Herndon, 114 N. Car. Plate Co., 12 Ont. L. R. 594.
252 ; 19 S. E. 158 ; MaUory's Case, » Gunn's Case, 3 Ch. 40 ; Ward's
3 Ont. L. Rep. 552. Cose,' 10 Eq. 659; Robinson's Case,
An Illinois case holds that notice 4 Ch. 322 ; Canadian Tin Plate Co.,
of the corporation's acceptance of 12 Ont. L. R. 594, 638.
an offer to take shares is not neces- Cf. Sahlgreen & Carroll's Case,
sary. Richelieu Hotel Co. v. Inter- 3 Ch. 323 ; Shackleford's Case, 1 Ch.
national, etc. Encampment Co., 140 567.
111. 248, 266; 29 N. E. 1044; 33 But see Hawley v. Upton, 102
Am. St. Rep. 234. The case cannot U. S. 314 (note that this case came
have been very fully argued, since up on a certificate of division of
the court stated that no authority opinion which did not specifically
to the contrary had been cited. call upon the Supreme Court to
Cf. Bloxam's Case, 33 Beav. 529 ; answer the question whether notice
New Albany, etc. R. R. Co. v. of acceptance of the offer was neces-
McCormick, 10 Ind. 499; 71 Am. sary).
Dec. 337 ; Burke v. Lechm^e, L. R. " Levita's Case, 5 Ch. 489.
6 Q. B. 297. Cf. De Rosaz's Case, 21 L. T. 10.
As to an agent of the company
1G6
§ 163-§ 260] OFFER AND ACCEPTANCE § 187
of the acceptance of the application ; ' but he is not necessarily
so.^ The deUvery of a notice of allotment to a messenger to take
to the allottee is not a sufficient communication of the offer.'
On the other hand, in accordance with the generally established
rule as to acceptances of offers, where the application was made
through the mails, the posting of a letter of allotment properly
addressed makes the contract complete from that moment, *
even though the letter may never be received.^ Even if the
letter of allotment is misdirected and consequently goes
astray, yet if the error is due to the applicant's own fault, he
cannot take advantage of the delay in receipt of notice of allot-
ment in order to retract his offer." Where post-office regula-
tions prohibit postmen from receiving letters to put into the
mails, delivery of a letter of allotment to a postman for that
purpose is not a posting thereof within the meaning of the
general rule stated above.' If the application contemplates
not an allotment, or counter-promise, but the actual issue of
shares as an act completing a unilateral contract, the appli-
cant may be bound from thei moment of the issue of the
shares even before he receives notice thereof.'
§ 187. Whether Notice of Allotment must be Direct and
FoTTndl. — The acceptance of an application for shares must be
communicated directly from the company to the applicant. It
is not enough that the latter may obtain knowledge thereof indi-
rectly. Yet the communication of the acceptance need not be
formal or express. Anything emanating from the company
which indicates to the applicant that the shares have been
allotted to him will be sufficient.' For example, although no
formal notice of allotment be given, still if the shares applied
for are issued to the applicant and he acts as shareholder, the
contract of membership is complete.'" So, if the applicant is
■ Leviia's Case, 5 Ch. 489. ° Perhaps, it is upon this ground
' Robinson's Case, 4 Ch. 322. that such cases as Hawley v. Upton,
' Hebb's Case, 4 Eq. 9. 102 U. S. 314, and Richelieu Hotel
* Harris's Case, 7 Ch. 587. Co. v. International, etc. Encamp-
^ Household, etc. Ins. Co. v. men* Co., 140 111. 248, 266; 29 N. E.
Grant, 4 Ex. D. 216; Wall's Case, 1044; 33 Am. St. Rep. 234, which
15 Eq. 18 (semble). are cited above, p. 166 note 5,
Contra : Finucane's Case, 17 should be explained.
W. R. 813 (overruled). ° Richards ' v. Home Assurance
' Townsend's Case, 13 Eq. 148. Ass'n, L. R. 6 C. P. 591, 595.
' Ex parte Jones (,1900), ICh.. 220. '» Levita's Case, 3 Ch. 36; Croio-
107
§ 188 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
present at the meeting of the directors when his application is
accepted, no further communication of the acceptance is neces-
sary.' So, where the ownership of a certain number of shares
is made a quaUfication for a certain person's appointment to be
a director or other officer, and where the candidate for the office
accordingly applies for the requisite number of shares, notifica^
tion of his appointment to the office may in some circumstances
be a sufficient communication of the company's acceptance of
the offer.^
§ 188. Time for Acceptance or Allotment. — An application
for shares like any other offer must be accepted, if at all, within
a reasonable time after the application,' unless some other time
be fixed by the applicant at which the offer shall expire.
§ 189. Acceptance without any Entry on Company's Books.
— An acceptance of an offer to subscribe for shares need not be
evidenced by any entry in the company's books but may rest in
parol merely.* As pointed out above, entry of the applicant's
name on the register of shareholders, however necessary it may
be in order to make him an actqal shareholder, is not part of an
allotment or acceptance of an offer to take shares, and is there-
fore not necessary in order to complete a binding executory con-
tract on the one part to issue and on the other part to accept
shares.^
§ 190. Retraction of Offer to take Shares. — An offer to
take shares in a corporation may of course be retracted at any
ley's Case, 4 Ch. 322. These cases As to the necessity for prompt
might also be supported on the repudiation of the shares in order to
ground of estoppel. escape liability because of unreason-
' Fletcher's Case, 17 L. T. 136. able delay in allotment or notifica-
'' Richards v. Home Assurance tion of allotment, see Bot/Ze's Case, 54
Ass'n, L. R. 6 C. P. 591. But see L. J. Ch. 550.
Carmichael and Hewett's Case, 30 * Stuart v. Valley R. R. Co., 32
W. E,. 742. Cf. infra, § 1414, et seq. Gratt. (Va.) 146. As to the applica^
' Ramsgate Victoria Hotel Co. v. tion of the Statute of Frauds, see
Montefiqre, L. R. 1 Ex. 109 ; Carter, infra, § 199.
etc. Co. V. Hazzard, 65 Minn. 432; ^ As to statutes requiring con-
68 N. W. 74. tracts of subscription to shares to be
Cf. Gregg's Case, 15 W. R. 82 in some particular form, see infra,
(where 13 months was held not to be § 200.
an unreasonable time).
168
§ 163-§ 260]
OFFER AND ACCEPTANCE
§191
time before the acceptance is communicated, or posted, to the
applicant, and a fortiori at any time before allotment ; for until
acceptance there is no contract.* This right of withdrawal is
not affected by the fact that the applicant was also a director,
and that, as such, his duty was to see that the offer, if advanta-
geous for the company, should be promptly accepted.^ The with-
drawal is not complete until communicated to the company, but
notice thereof given to the clerk in charge of the company's
oflBce is notice to the corporation.^ The retraction need not be
express, or communicated directly to the corporation. For in-
stance, the fact that an applicant for shares stops payment of a
cheque given in payment of a deposit payable thereon is suflB-
cient to charge the company with notice that the offer has been
withdrawn.^ The retraction may be oral although the appUca-
tion was in writing.^
§ 191. OfEer or Proinise to take Shares under Seal of Prom-
If a promise to take shares is made under the promisor's
isor.
seal, and if the paper is deKvered as his deed, it is binding forth-
with, and cannot be revoked even before the company has ac-
cepted the proposition.' In such a case, the allotment and issue
of the shares constitute a condition which must be performed
within a reasonable time in order to hold the promisor,' but the
applicant is bound beyond his power to escape, from the time
of delivery of the document.
' Wilson's Case, 20 L. T. 962
MUes' Case, 4 De G. J. & S. 471
GledhiU's Case, 3 De G. F. & J. 713
Wallace's Case (1900), 2 Ch. 671
Thomson's Case, 34 L. J. Ch. 525
Bristol Creamery Co. v. TUton, 47
Atl. 591; 70 N. H. 239; Canadian
Tin Plate Co., 12 Ont. L. R. 594;
Essex Turnpike Corp. v. Collins, 8
Mass. 292 ; Parker v. Northern Cent.
Mich. R. R. Co., 33 Mich. 23;
Northern Cent. Mich. R. R. Co. v.
Eslow, 40 Mich. 222.
Cf. Badger Paper Co. v. Rose, 95
Wise. 145 ; 70 N. W. 302 ; 37 L. R.
A. 162.
' Ritso's Case, 4 Ch. D. 774.
» Truman's Case (1894), 3 Ch.
272.
* Truman's Case (1894), 3 Ch.
272.
« Wilson's Case, 20 L. T. 962;
Ritso's Case, 4 Ch. D. 774; Tru-
man's Case (1894), 3 Ch. 272. Cf.
MUes' Case, 4 De G. J. & S. 471.
° Nelson Coke Co. v. PeUatt, 4
Ont. L. R. 481.
Cf. Hudson Real Estate Co. v.
Tower, 156 Mass. 82, 84 ; 30 N. E.
465; 32 Am. St. Rep. 434, stated
infra, § 242.
' Provincial Grocers, Ld., 10 Ont.
L. R. 705.
169
§ 192 ORGANIZATION AND ISSUE OF SHAKES [ChAP. Ill
§ 192-§ 196. Cases , where the Offer is made by the Company.
§ 192. Contract complete on Acceptance by Subscriber. — Of
course, where a corporation offers a certain number of shares
to a certain person who thereupon accepts the offer, the contract
is complete without any further "allotment" or acceptance on
the part of the corporation.' But, as aheady stated, in doubtful
cases the courts incline to hold sohcitations of subscriptions to
shares on the part of the corporation, by prospectuses and other
similar means, as advertisements for offers rather than as offers.^
It is not to be lightly assumed that a corporation intends to offer
its shares to the first person who may apply for them without re-
gard to his financial standing or desirability as a shareholder.
§ 193. OfEers of Shares to existing Shareholders pro rata. —
If a corporation offers new or additional shares to its own exist-
ing shareholders or to shareholders in a company which it is
about to absorb, the offer is in general like any other offer looking
to a bilateral contract; ' but it has some very striking peculiari-
ties. For example, if one of the shareholders to whom such an
offer is made dies before acceptance, the offer may be accepted
by his executor.* A fortiori, if the offer is made, nominally, to a
shareholder who is deceased and whom the company knows to
be dead, it may be accepted by his executor.^
§ 194. Counter-O&ers made by introducing new Terms in
attempting to accept Application of Subscriber. — - If a company's
ostensible acceptance of an offer of an applicant for shares
introduces some new term not contained in the application, the
supposed acceptance is, as stated above, a counter-offer which
must be accepted by the original apphcant before any completed
contract arises. The acceptance of such a counter-offer is less
' Greer v. Chartiers By. Co., 96 was not an offer which a shareholder
Pa. St. 391 ; 42 Am. Rep. 548 ; in the old company could accept by
Acadia Loan Corp. v. Wentworth, mere notification of his election to
40 Nova Scotia, 525. take shares instead of bonds, but
' See supra, § 183. that the new company must notify
^ But cf. Wallace's Case (1900), him of an allotment of the shares in
2 Ch. 671 (where it was held that an order to complete the contract be-
agreement for absorption of another tween them).
corporation, containing a stipulation * Cheshire Banking Co., 32 Ch.
that the shareholders in the old D. 301.
company shall have at their election " Jackson v. Turguand, L. R. 4
shares or bonds of the new company, H. L. 305.
170
§ 163-§ 260] OFFER AND ACCEPTANCE § 194
frequently express than implied from acquiescence. Mere in-
action on the part of the allottee is not sufficient to create a con-
tract. He made an application, which the company refused:
the company's counter-proposition is a mere offer of which he is
not bound to take notice, and of which acceptance must be
affirmatively shown. Mere inaction or delay cannot amount to
an acceptance of the company's counter-offer.' Hence, he is not
bound to institute legal proceedings for the removal of his- name
from the register of shareholders, but is certainly protected if
he promptly repjidiate ownership of the shares.^ A request that
share-certificates be sent him was held in one case not to be suffi-
cient evidence of acceptance of the company's offer, but merely
to indicate a disposition to investigate what manner of shares
had been offered him.^ The mere receipt and retention of share-
certificates sent by the company does not amount to acceptance
of the shares ; * for it is mere non-action. On the other hand,
a letter acknowledging receipt of the certificates may be construed
as an acceptance of the company's offer.^ Acting as shareholder
will be deemed an acceptance of the shares ; ° but the execution
of a proxy to be used only in a certain contingency which never
occurs will, it seems, have no such effect.' Attendance at share-
holders' meetings may be explained, if the attendance was not
for the purpose of exercising rights as a shareholder but merely
in order to watch the proceedings.* Ordinarily, a transfer of the
shares or any of them operates as an acceptance of the company's
offer of them.* But this would not be so where the transfer is
made under the mistaken belief that the shares transferred were
certain other shares for which the transferor had subscribed.'"
The execution of a blank transfer at the time of the application,
by means whereof a transfer of the shares is subsequently ef-
fected, has been held not to estop the applicant from denying
• Wynne's Case, 8 Ch. 1002. '^ SomermUe's Case, 6 Ch. 266.
Cf. Wilson's Case, 20 L. T. 962. ' Hindley's Case (1896), 2 Ch.
But see Ex parte Perrett, 15 Eq. 121.
250 ; Wheatcroft's Case, 42 L. J. Ch. ' Ticonic Water, etc. Co. v. Lang,
853. 63 Me. 480.
2 Gorrissen's Case, 8 Ch. 507. * Simpson's Case, 4 Ch. 184.
Ct. Wilson's Case, 20 L. T. 962. » Cf. Crawley's Case, 4 Ch. 322;
" Beck's Case, 9 Ch. 392. Railway Timetables Co., 42 Ch. D.
But see Hindley's Case (1896), 2 98.
Ch. 121. '" Arnot's Case, 36 Ch. D. 702.
* SomermUe's Case, 6 Ch. 266.
171
§ 195 ORGANIZATION AND ISSUE OF SHAKES [ChAP. Ill
that his offer was accepted by the company.' An allotment of
shares to a person who has never applied for them at all would
operate as an offer on the company's part to the same extent
as an ostensible acceptance of an application which introduces
some new term would do.
§ 195. Time for Acceptance of Company's Offer. — The com-
pany's offer must be accepted if at all within the time limited in
the offer itself, or if no time be limited then within a reasonaWe
time. It seems that if the company goes into liquidation before
the offer has expired, the option may be accepted after the com-
mencement of the liquidation,^ and that upon such acceptance
the acceptor becomes entitled to his jn-o rata share in the com-
pany's assets.
§ 196. Application for Shares in Ignorance of Company's
Offer not Acceptance. — What is intended as an offer to take
shares cannot be construed as an acceptance by the applicant
of an offer previously made without his knowledge by the com-
pany. For example, where a corporation purports to allot shares
to a person who had not applied for them, a subsequent applica-
tion for the same number of shares made in ignorance of the
previous attempted allotment cannot constitute a binding con-
tract unless it be subsequently accepted by the company and
unless such acceptance be communicated to the applicant.^
§ 197. Implied Offers and Acceptances. — There may be
cases where either the offer or acceptance * or both are implied
rather than express.* For example, where R as director signs
' Ward's Case, 10 Eq. 659. although it was conceded that the
^ Hirsch v. Burns, 77 L. T. 377. acceptance or retention of a deposit
' Northern Electric Wire, etc. Co., would not be sufficient evidence of
2 Megone 288. But cf. United Ports, acceptance of an apphcation not
etc. Ins. Co., 20 W. R. 88. made in pursuance of a previous
* Where D agreed that he and arrangement such as that stated :
his partner should between them Davies's Case, 41 L. J. Ch. 659.
take 250 shares, and where D ac- ^ Clevenger v. Moore (N. J.), 58
cordingly applied for 50 shares and Atl. 88; 71 N. J. Law 148; Park-
his partner for 200, the court in- hurst v. Mexican, etc. R. R. Co., 102
ferred an assent on the part of the 111. App. 507; Hecht, lAebmann &
company to this division of the 250 Co. v. Phcenix Woolen Co., 121 Fed.
shares from the mere retention of 188.
the deposits paid on apphcation, Cf . Stephens v. FoUett, 43 Fed. 842.
172
§ 163-§ 260] SUBSCRIPTIONS BY INFANTS § 198
the minutes of a directors' meeting at which he was present, and
at which a list of supposed subscribers for shares (including
himself) was read out, there is sufScient evidence of a completed
though implied contract.' Somewhat similar instances of im-
plied contracts to take shares may be found in cases relating to
directors' qualification shares.^ These cases of implied contract
are sometimes thought to rest on estoppel ; ^ but the principle of
estoppel is properly only an element in the implied contract.
§ 198. Infants' Contracts 'to take Share. — An infant's
agreement to take shares in a corporation, like other contracts
of an infant, is of course voidable even after the contract has
been executed by entering his name on the register of share-
holders.* Where the infant has received no benefit from the
contract, has attended no meetings of shareholders, and has
received no dividends, he may during infancy repudiate the
agreement and by next friend bring an action to recover the
deposits paid on application and allotment.* Unless, however,
the infant on coming of age promptly repudiates the contract, he
will be bound thereby even though he may never have acted as
shareholder.* The right of repudiation exists although the in-
corporation act may provide that "every person who shall have
subscribed the prescribed sum . . . and whose name shall have
been entered on the register of shareholders, . . . shall be
deemed a shareholder"; the words quoted mean every person
who shall have contracted to subscribe, and therefore do not
include persons not sui juris.'' Where the infant is sued upon the
contract, a plea of infancy is demurrable unless it allege that the
defendant repudiated the shares ; ^ and this is true even though
' Ex parteBoney, 33 L. J. Ch. 731. ' Ebbett's Case, 5 Ch. 302.
But cf. TothUl's Case, 1 Ch. 85. Cf. Yeoland Consols, 58 \. T. 922 ;
' See infra, § 1414, et 6eq. Cork, etc. Ry. Co. v. Cazenove, 10
' Hays V. Pittsburgh, etc. R. R. Q. B. 935; Hart's Case, 6 Eq. 512
Co., 38 Pa. St. 81 ; Nitgent v. Super- (where the infant was held entitled
•visors, 19 Wall. 241. See 2 Clark & to repudiate three years after at-
Marshall on Priv. Corps., § 515, pp. taining majority).
1570-1573. ' Newry, etc. Ry. Co. v. Coombe,
* Nevn-y, etc. Ry. Co. v. Coombe, 3 Ex. 565; North Western Ry. Co.
3 Ex. 565. V. McMichael, 5 Ex. 114.
" Hamilton v. Vaughan, etc. Co. But see Cork, etc. Ry. Co. v.
(1894), 3 Ch. 589. Cazenove, 10 Q. B. 935.
Cf. White V. Mount Pleasant * North Western Ry. Co. v. Mc-
MUls Corp., 172 Mass. 462; "52 JWicfead, 5 Ex. 114.
N. E. 632.
173
§ 199 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
the ownership of the shares be burdensome rather than bene-
ficial, at least unless the infancy be alleged to be still subsisting
at the time of pleading.^
§ 199. Application of Statute of Frauds. — It would seem
clear that subscriptions to shares are not in any proper sense
contracts of sale within the seventeenth section of the Statute of
Frauds, and that accordingly they should not be required to be
in writing in any jurisdiction in which the Statute of 29 Charles
II c. 3 is in force in unmodified form,^ and this, too, quite in-
dependently of the question whether shares of capital stock are
"goods, wares and merchandise," within the jneaning of that
statute.' In some of the American states, the original Statute
of Frauds may have been so amended as to include agreements
to take shares in a corporation, and sometimes incorporation
acts require that subscription shall be in writing, in which
case oral subscriptions will not be binding." Whether contracts
for the sale or transfer of shares are within the seventeenth
section of the statute is a different question.^
§ 200. Statutes prescribing Forms or Ceremonies for Subscrip-
tions to Shares. — Where a statute prescribes certain forms to
be gone through by subscribers to shares, compliance with the
statutory ceremonies may well enough be a condition precedent
to the attainment of the status of an actual shareholder," but
the courts should struggle against any construction of the statute
which would invalidate, on account of a failure to observe the
statutory conditions, what would otherwise be a binding execu-
tory contract on the one part to issue and on the other part to
accept shares.' For example, where a statute requires the pay-
ment of a deposit from every subscriber at the time of subscrib-
ing, it may well enough be that no one can become an actual
shareholder entitled to the rights and subject to the liabilities of a
' North Western By. Co. v. * Vredand v. New Jersey Stone
McMichad, 5 Ex. 114. Co., 29 N. J. Eq. 188; Fanning v.
= Webb V. Baltimore, etc. R. B. Insurance Co.,. 37 Oh. St. 339; 41
Co., 77 Md. 92; 26 Atl. 113; 39 Am. Am. Rep. 517.
St. Rep. 396 ; Somerset Nat. Bank- ' See infra, § 505.
ing Co. v. Adams, 72 S. W. 1125; ° New Brunswick, etc. Ry. Co. v.
24 Ky. Law Rep. 2083 ; Rogers v. Muggeridge, 4 H. & N. 580.
Burr, 105 Ga. 432; 31 S. E. 438; ' Of. Buffalo, etc. R. R. Co. v.
70 Am. St. Rep. 50; 2 Clark & Gifford, 87 N. Y. 294; Nebraska
Marshall on Priv. Corps., § 445 c. CKicory Co. v. Lednicky (Nebr.),
= As to this see infra, § 505. 113 N. W. 245.
174
§ 163-§ 260] SUBSCRIPTIONS THROUGH AGENTS § 201
shareholder until the statutory deposit be paid; but neverthe-
less it is subnaitted that non-payment of the deposit should
certainly not vitiate the contract or prevent the one party from
recovering damages from the other for a failure to issue the shares
or to take and pay for them.^ The decided cases on the subject
do not, however, establish any intelligible, systematic rules, but
consist in a wilderness of conflicting decisions.' For example,
some cases hold that non-payment of a statutory deposit relieves
the subscriber of any liability on the contract,^ but other cases
hold the contrary.* As such statutes are less common nowadays
than formerly, the perplexing uncertainty and contrariety in
the decisions need occasion the less regret.
§ 201. Subscriptions through Agents. — -The general prin-
ciples of the law of agency apply to contracts of subscription to
a corporation's shares.^ Thus, such contracts are governed by
the same law as other contracts in respect to the liability of an
agent acting without or in excess of his authority ,° and in re-
spect to rights of the parties where the contract is made by an
agent for an undisclosed principal.' Where an application for
' Ashtabula, etc. B. B. Co. v. As to ratification of contract
Smith, 15 Oh. St. 328. made by unauthorized agent, see
2 Cf. 2 Clark & Marshall on Priv. McClelland v. Whiteley, 15 Fed. 322 ;
Corps., § 445 ; 1 Morawetz on Priv. Levita's Case, 5 Ch. 489 ; Electric
Corps., § 71-§ 73. See also infra, Welding Co. v. Prince (Mass.), 81
§ 796. N. E. 306 (headnote inadequate —
' E. g. Wood v. Coosa, etc. B. B. ratification by payment of calls and
Co., 32 Ga. 273 (with which com- failure to repudiate shares otherwise
pare, however, Mitchell v. Borne than by resisting an action for call).
B. B. Co., 17 Ga. 574) ; Hapgoods ' Southampton, etc. Steam Boat
V. Lusch, 107 N. Y. Supp. 331. Co., 4 De G. J. & S. 200 ; State ex rel.
* E. g. Vicksburg, etc. B. B. Co. Columbia Valley B. B. Co. v. Supe-
V. McKean, 12 La. Ann. 638; Wight rior Ct. (Wash.), 88 Pac. 332 (sub-
v. Shelby B. B. Co., 16 B. Monr. scription by a person described as
(Ky.) 4; 63 Am. Dec. 522; Jvdah "trustee" without disclosure of
\.' American Live Stock Ins. Co., 4 name of principal or cestui que
Ind. 333. trust); State ex rel. Biddle\. Superior
Cf. Taggart v. Western Md. B. B. Court (Wash.), 87 Pac. 40 (a similar
Co., 24 Md. 563 ; 89 Am. Dec. 760. case, holding that either the princi-
" Cf. Farm^s' & Mech. Bank v. pal or the "trustee" is Uable).
Nelson, 12 Md. 35 (where the eon- But see Hyslop v. Morrel Bros.,
tract was held not to be binding be- W. N. (1891) 19.
cause the company's agent by whom Cf. Ex parte Bu^g, 2 Drewry &
it was made had exceeded his au- Sm. 452 (where the relation was
thority by failing to exact a deposit held to be that of trustee and cestui
from the subscriber). gite trust and not that of agent and
° Ex parte Panmure,24Ch.D.Z67. principal).
175
§ 202 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
shares is made in the name of a married woman who is incapable
of contracting and who signs the application at the instance of
her father without knowing its contents or effect, and where the
father intends to become the substantial owner of the shares,
the case is assimilated to an application in the name of a ficti-
tious person, so that the contract is regarded as made by the
father under his daughter's name as an alias.'
§ 202. Subscriptions by Agent or Trustee for the Corpora-
tion itself. — A subscription by a person as trustee or agent for
the company itself would seem to be a nuUity.^ There must be
at least two parties to a contract. Under some circumstances
— for example, where the trustee or agent represents that the
subscription is real and not colorable — he inay be bound
personally.^
§ 203. Subscriptions by Executors. — Ordinarily, a subscrip-
tion by an executor binds him personally and not the estate
of his decedent.* But where a person who is executor subscribes
for two sets of shares, the first individually, and the second as
executor, there are, it has been held, two distinct contracts.^
§ 204^§ 219. SUBSCRIPTIONS PROCURED BY FRAUD OR
MISREPRESENTATION.
§ 204. Defence of Fraud in general — Laches of Subscriber.
— The only argument against holding that subscriptions to
shares like other contracts may be avoided by the allottee on
account of fraudulent misrepresentations practised upon him
by agents of the company is that the creditors of the corporation
■ — innocent third parties — have a vital interest in such sub-
scriptions ; that — to use a figure of speech familiar in America
— the subscriptions to the capital of a corporation constitute a
' ' trust-fund " for th& payment of its debts. This argument is not
sufficiently strong to justify the courts in altogether depriving the
defrauded allottee of the defence." Nevertheless, it does sharply
' Piigh and Sharsman's Case, 13 v. Grand Collier Dock Co., 11 Sim.
Eq. 566. See also infra, § 767. 327 ; Allibone v. Hager, 46 Pa. St.
Cf. Nat. Commercial Bank v. 48.
McDonnell, 92 Ala. 387 ; 9 So. 149. * See also infra, § 768.
^ Holladay v. Elliott, 8 Oreg. 84. » Erie, etc. R. R. Co. v. Patrick,
' Johnston v. Allis, 71 Conn. 207 ; 2 Keyes (N. Y.) 256.
41 Atl. 816 (distinguishing Riissell ° Vreeland v. New Jersey Stone
V. Bristol, 49 Conn. 251) ; Preston Co., 29 N. J. Eq. 188 ; Blake's Case,
176
§ 163-§ 260] SUBSCRIPTIONS OBTAINED BY FKATJD § 205
differentiate agreements to take shares, when executed by actual
issue of the shares, from other contracts. Accordingly, the law
is settled on both sides of the Atlantic that a person who has been
induced to take shares in a corporation by fraudulent misrepre-
sentation loses the defence unless he repudiates the contract
(and perhaps unless he follows up his repudiation by instituting
a suit to be relieved of the shares) within a reasonable time
after discovery of the fraud,' or after the fraud might, by the ex-
ercise of due diUgence on his part, have been discovered.^ How-
ever, if a material misrepresentation be proved, the contract is
prima facie voidable so that the burden of establishing laches
rests on the company.^ Failure promptly to rescind may be
excused where the delay is due to a request of the company or its
promoters.* An attenipt to repudiate liability on the shares for
some cause other than the fraudulent misreprestentation in ques-
tion will not negative the inference of laches arising from the
delay in discovering the fraud and in repudiating the shares on
that ground.' The question whether the defrauded shareholder
has used due diligence is in general a question of fact for the
jury.'
§ 205. English Rule requiring Repudiation of Shares and
Institution of Proceedings for Removal of Name from Share-
Register before Winding-up or Suspension of Business. — In
34 Beav. 639 ; MuLhoUand v. Wash- Walker, 13 Nat. B. Reg. 82 ; North-
ington Match Co., 35 Wash. 315; rop v. Bushnell, 38 Conn. i98.
77 Pac. 497 ; Stewart v. Rutherford, Cf. Duffield v. Barnum Wire, etc.
74 Ga. 435, and many other cases. Works, 64 Mich. 293 ; 31 N. W. 310 ;
But see Howard v. Glenn, 85 Ga. Hinkley v. Sac Oil, etc. Co. (Iowa),
238; 11 S. E. 610; 21 Am. St. Rep. 107 N. W. 629, 634 (where a good
156; Turner v. Grangers', etc. Ins. statement will be found of the de-
Co., 65 Ga. 649 ; 38 Am. Rep. gree of diligence required in suspect-
801. ing and discovering fraud).
' Central Ry. Co. v. Kisch, L. R. But see American Alkali Co. v.
2 H. L. 99 ; Tait's Case, 3 Eq. 795 ; Salom,, 131 Fed. 46, 50-51 ; 65 C. C.
Ashley's Case, 9 Eq. 263 ; Sharpley A. 284.
V. South Ry. Co., 2 Ch. D. 663; Re ' London & Staffordshire Fire Ins.
Shearman, 66 L. J. Ch. 25 ; OgUvie Co., 24 Ch. D. 149.
V. Knox Ins. Co., 22 How. 380. See * Cox v. National Coal, etc. Co.
2 Clark & Marshall on Priv. Corps., (W. Va.), 56 S. E. 494.
§ 473 d. ' Upton v. TribUcock, 91 U. S.
' Wilkinson's Case, 2 Ch. 536 ; 45, 51-55.
Peel's Case, 2 Ch. 674 ; Lawrence's " Newton Nat. Bank v. Newbegin,
Case, 2 Ch. 412; Upton v. Tribil- 74 Fed. 135; 20 C. C. A. 339; 33
cock, 91 U. S. 45, 54-55; Farrar v. L. R. A. 727.
VOL. I. — 12 177
§ 205 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
addition to this duty of diligence, the law in Great Britain im-
poses a somewhat arbitrary restriction on the defrauded share-
holder's right of defence. In that country, it will be remembered,
each company is required to keep a register of its members,
which shall be open to inspection by shareholders and creditors;
and when a winding-up commences all those persons whose
names, with their consent, have been entered on that register
must be placed on the " list of contributories." The commence-
ment of the winding-up proceeding, according to the construc-
tion put by the British courts on the Companies Act, fixes forever
the liabilities of these "contributories." Hence, a person who
has been induced to take shares by fraud and whose name has
been entered on the register of members, loses his defence unless
prior to the winding-up he has instituted legal proceedings to
have his name removed from the register ; and this is true even
though he did not discover the fraud and had no opportunity of
discovering it prior to the commencement of the winding-up.'
This is a technical and perhaps an arbitrary rule, founded upon
the peculiar nature of winding-up proceedings under the English
law.
Under this rule, it is not enough that the subscriber may
have repudiated the contract before the winding-up; he must
institute legal proceedings to have his name removed from the
register.^ It was once held not to be enough that he may have
set up the defence of fraud against an action for calls; ° but re-
cent cases hold that to be sufficient.* It makes no difference, how-
ever, that the company's assets derived from other sources are
sufficient to pay the debts in full so that the defrauded share-
' Oakes v. Turqimnd, L. R. 2 Cf. Cocksedge'v. Metropolitan, etc.
H. L. 325; Kent v. Freehold Land Ass'n, 64 L. T. 826.
Co., 3 Ch. 493. ' Etna Ins. Co. (1871), Ir. Rep.
Cf. Addlestone Linoleum Co., 37 6 Eq. 298 (where the action for calls
Ch. D. 191. had been defeated on account pf the
' Scottish Petroleum Co., 23 Ch. fraud) ; Cleveland Iron Co., 16 W. R.
D. 413; Ex parte Storey, 6 Times 95.
L. R. 357; 62 L. T. 791. If such * WUtdey's Case (1900), 1 Ch.
proceedings are instituted before 365 ; Pakenham Pork Packing Co.,
the winding-up is begun, it is im- 6 Ont. L. R. 582. But see Electric
material that the winding-up may Welding Co. v. Prince (Mass.), 81
have supervened before they are N. E. 306, 310 (as to a subscription
determined. Reese River Mining to shares in an English company).
Co. V. Smith, L. R. 4 H. L. 64.
178
§ 163-§ 260] SUBSCRIPTIONS OBTAINED BY FRAUD § 206
holder's liability is being enforced merely for the benefit of other
shareholders.' If, however, one shareholder begins proceedings
to compel the removal of his name from the register because
of misrepresentation, an agreement between the company and
other shareholders similarly situated that their claims for relief
from the contract of jnembership shall abide the result of those
proceedings, will entitle those shareholders to rescission of
their contracts although the company may be wound-up prior
to the decision of the test case ; ^ but the mere fact that, without
any such agreement, other shareholders having like cause to
complain began proceedings for the removal of their names from
the register is not enough. If, however, the company assents to
the repudiation "of the shares and strikes out the allotment, there
is no occasion for legal proceedings, and consequently the allottee
will be protected even though a winding-up supervenes ; ^ and
this is true although the allotment is cancelled upon some
ground other than the misrepresentation.^ Supervening insol-
vency of the company, coupled with a closing of its doors and
suspension of business, will, it seems, have the same effect in
preventing a shareholder from subsequently repudiating lia-
bility on the ground of fraud as the commencement of formal
winding-up proceedings would have.^ These rules have no
application where the shares have been declared forfeited by
the company, and an action brought against the former share-
holder to recover calls overdue at the time of the forfeiture; in
such a case the former shareholder has become a mere debtor to
the company, and like any other debtor may defend, even after
the institution of liquidation proceedings, on the ground that the
claim against him was obtained by the company's fraud, unless
by laches or otherwise he had lost the right to set up this
defence at the time of the forfeiture."
§ 206. American Rule as to Effect of Winding-up Proceed-
ings on Defence of Fraud. — In America, the courts, it is sub-
' Burgess's Case, 15 Ch. D. 507. ° Tennent v. City of Glasgow
2 Pawle's Case, 4 Ch. 497 ; Scot- Bank, 4 A. C. 615. Mere insolvency,
tish Petroleum Co., 23 Ch. D. 413 without suspension of business, will
(semble). not have that effect. Ex parte Carl-
« Wright's Case, 20 W. R. 45; 7 ing, 56 L. J. Ch. 321.
Ch. 55; Fox's Case, 6 Eq. 118. See " Aaron's Reefs v. Twiss (1896),
also infra, § 637. A. C. 273. Cf. infra, § 828.
* Wright's Case, 20 W. R. 45;
7 Ch. 55.
179
§ 207 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
mitted, should not follow the English decisions in holding that
the supervention of insolvency or of liquidation proceedings
abruptly cuts short a shareholder's right of rescission on ac-
count of misrepresentation, irrespective of whether he had been
guilty of laches in discovering the fraud or repudiating the
shares. In this country, it would seem that after insolvency or
the commencement of a suit for the winding-up of the company's
affairs as well as before, the questions are whether the share-
holder has used due diligence in discovering the fraud and in
getting rid of the shares.^ However this may be, it would seem
clear that in America a defrauded subscriber to shares who has
repudiated. the contract before the known insolvency of the com-
pany and before the commencement of windingmp proceedings
should not be debarred from relief because he may not have
instituted a suit for rescission and removal of his name from the
register of shareholders.^
§ 207. Election to keep Shares notwithstanding Fraud or
Misrepresentation. — Even in a case where there has been no
prolonged delay in repudiating the contract and in beginning
proceedings to have one's name removed from the register of
shareholders, or where such proceedings have actually been
commenced, yet the shareholder to whom the misrepresenta-
tion was made may voluntarily elect to keep the shares and thus
preclude himself from raising or persisting in the defence of
fraud or misrepresentation.^ Any facts evincing an intention
' Ogilvie v. Knox Ins. Co., 22 tion); WaUaee v. Hood,8Q Fed. 11
How. 380 ; Newton Nat. Bank v. (same point) ; Marion Trust Co. v.
Newbegin, 74 Fed. 135 (semble) ; Blish (Ind.), 79 N. E. 415.
Ramsey v. Thompson Mfg. Co., 116 ' Fear v. Bartlett, 81 Md. 435;
Mo. 313 ; 22 S. W. 719 ; Kentucky 32 Atl. 322 ; 33 L. R. A. 721 ;
Mutual, etc. Co. v. Schoefer (Ky.), Newton Nat. Bank v. Newbegin, 74
85 S. W. 1098; 27 Ky. L.Rep. 657; Fed. 135; 20 C. C. A. 339; 33 L.
Dieterle v. Ann Arbor Paint, etc. Co., R. A. 727 ; Ramsey v. Thompson
107 N. W. 79; 143 Mich. 416; Mfg. Co., 116 Mo. 313, 22 S. W.
Hinkley v. Sac Oil, etc. Co. (Iowa), 719 ; Savage v. Bartlett, 78 Md. 561 ;
107 N. W. 629. 28 Atl. 414.
But see Howard v. Turner, 155 But see Howard v. Glenn, 85 Ga.
Pa. St. 349; 26 Atl. 753; 35 Am. 238; 11 S. E. 610; 21 Am. St. Rep.
St. Rep. 883; Howard v. Glenn, 85 156; Turner v. Grangers', etc. Ins.
Ga. 238, 261; 11 S. E. 610; 21 Am. Co., 65 Ga. 649; 38 Am. Rep. 801;
St. Rep. 156 ; Scott v. Latimer, 89 Howard v. Turner, 155 Pa. St. 349 ;
Fed. 843; 33 C. C. A. 1 (where 26 Atl. 753 ; 35 Am. St. Rep. 883 (nil-
statutory liabiUty to creditors under ing on plaintiff's second "point"),
the National Bank Act was in ques- ' Wilson v. Hundley, 96 Va. 96 ;
180
§ 163-§ 260] SUBSCRIPTIONS OBTAINED BY FRAUD § 208
to retain ownership of the shares after learning of the fraud
will have that effect — such as payment of calls,' voting at
shareholders' meetings,^ receiving dividends,' attempting to
sell the shares,* etc. Doing these things will not, however, de-
prive the shareholder of the defence unless he had previously
discovered the misrepresentation.^ Moreover, the fact that a
defrauded allottee has trafficked in other shares in the same
company will not preclude him frpm rescinding the fraudulent
contract." Moreover, the fact that the shareholder has repu-
diated the contract on some ground other than that of fraud
will not preclude him from subsequently setting up the defence
of fraud.'
§ 208. Necessity for returmng Sbaxes to Company. — An
allottee of shares cannot rescind the contract because of fraud
unless he is in a position to place the company in statu quo by
surrendering the shares.' Hence, if a person is induced by
fraud to take shares in an unincorporated association, his assent
to its becoming incorporated, so that the shares in the unincor-
porated association cease to exist and consequently cannot be
restored on rescission of the contract, will prevent him from
rescinding the subscription on account of the fraud." Simi-
larly, if the defrauded allottee transfers the shares to his infant
30 S. E. 492; 70 Arh. St. Rep. 837; » Scholey v. Central By. Co:, 9
Franey v. Wauwatosa Park Co., 99 Eq. 266 n.
Wise. 40 ; 74 N. W. 548. * Ex parte Briggs, 1 Eq. 483.
' See Whitehouse's Case, 3 Eq. ^ Mount Morgan Gold Mine, 3 ,
790 ; Be Shearman, 66 L. J. Ch. 25 ; Times L. R. 556.
Marten V. Burns Wine Co., 99 Cal. " Midholland v. Washington Match
355; 33 Pac. 1107. Co., 35 Wash. 315; 77 Pac. 497.
Cf. Fear v. Bartlett, 81 Md. 435; ' Alabama Foundry, etc. Works
32 Atl. 322; 33 L. R. A. 721. v. Dallas, 29 So. 459; 127 Ala. 513.
" Fovlkes v. Quartz HiU, etc. Min^ * Cf. Maine v. Midland Invest-
ing Co., Cababe & Ellis, 156; Mar- ment Co. (Iowa), 109 N. W. 801.
ten V. Burns Wine Co., 99 Cal. 355 ; As to whether the defrauded sub-
33 Pao. 1107. scriber is bound to return the identical
Cf. Ogilvie v. Knox Ins. Co., 22 shares issued to him or whether it is
How. 380, 391 (headnote inade- enough to return an equal number of
quate). the same class of shares, cf. § 501.
But see Tomlin's Case (1898), 1 ° Western Bank v. Addie, L. R.
Ch. 104. Mere attendance at a meet- 1 H. L. (Sc.) 185. As to the effect
ing without voting has been held of assenting to a reorganization
not to be a condonation of the mis- scheme, cf. Spreckds v. Gorrill (Cal.),
representation. Ex parte Edwards, 92 Pao. 1011.
64 L. T. 561. Cf. Maine v. Midland
Investment Co. (Iowa), 109 N. W. 801.
181
§ 209 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
children, he puts it out of his power to return them, and is there-
fore pj-ecluded from rescinding on the ground of the fraud.'
The fact, however, that in ignorance of the fraud a shareholder
has sold some of the shares which he was induced to take will
not prevent him from repudiating the contract so far as the
shares remaining under his control are concerned.^ In order to
rescind for fraud or misrepresentation, the allottee must offer to
restore any dividends that may have been paid to him.'
§ 209. Defence of Fraud available either at Law or in Equity.
— The defence that a contract to take shares in a corporation
was procured by the fraud of the company, when available to
the shareholder at all, is good at law as well as in equity; * but
the better practice is to file a bill in equity for rescission of the
contract of subscription.^ The defrauded shareholder is not
precluded from asking equitable intervention because the shares
may have been issued at a discount.*'
§ 210. Recovering back Money paid in on the Shares. — ■
Upon rescission of an allotment of shares on account of mis-
representation, the allottee is entitled to recover from the com-
pany any sums he may have paid on the shares, by way of
deposits on application or allotment, or otherwise,' with interest
thereon.' The decree for such repayment may go against the
• Francis v. New York, etc. R. R. Bosher v. R. & H. Land Co., 89 Va.
Co., 108 N. Y. 93; 15 N. E. 192. 455; 16 S. E. 360; 37 Am. St. Eep.
' Mount Morgan Gold Mine, 3 879 (similar point to that of last
Times L. R. 556. Cf. American case). Cf. Barcus v. Gates, 89 Fed.
Alkali Co. v. Salom, 131 Fed. 46, 783; 32 C. C. A. 337; Negley v.
49-50; 65 C. C. A. 284. Hagerstown Mfg. Co., 86 Md. 692;
' WaUace v. Hood, 89 Fed. 11, Tyler v. Savage, 143 U. S. 79.
15 (headnote inadequate) ; Marten But see Dorsey Machine Co. v.
V. Burns Wine Co., 99 Cal. 355; McCaffrey, 139 Ind. 545; 38 N. E.
33 Pac. 1107. 208; 47 Am. St. Rep. 290.
* Bwlchr-y-Plwm Mining Co. v. ° Barcus v. Gates, 89 Fed. 783;
Baymes, L. R. 2 Ex. 324 ; American 32 C. C. A. 337.
Alkali Co. v. Salom, 131 Fed. 46, ' Karberg's Case (1892), 3 Ch. 1 ;
50 ; 65 C. C. A. 284. Grangers' Ins. Co. v. Turner, 61 Ga.
'= Mack V. Latta, 178 N. Y. 525 ; 561 ; Ramsey v. Thompson Mfg.
71 N. E. 97; 67 L. R. A. 126 (join- Co., 116 Mo. 313; 22 S. W. 719.
ing claim for damages against the Cf. Stewart v. Austin, 3 Eq. 299 ;
directors for deceit) ; Manning v. Stewart v. Rutherford, 74 Ga. 435.
Berdan, 135 Fed. 159; Sherman v. ^ Ex parte Wainwright, 59 L. J.
Am. Stove Co., 85 Mich. 169; 48 Ch. 281; 'McClanahan v. Ivanhoe
N. W. 537 (where two shareholders Land, etc. Co., 96 Va. 124 ; 30 S. E.
tmited in a single suit for rescission) ; 450.
182
§ 163-§ 260] SUBSCRIPTIONS OBTAINED BY FRAUD § 213
individual officers or agents who participated in the fraud as
well as against the corporation itself.'
§ 211. Fraud practised on original Subscriber no Defence
to Transferee. — The defence that a subscription was induced
by fraud is personal to the defrauded subscriber and cannot
be set up by a transferee.^ On the other hand, the mere fact
that a subscriber may have paid a bonus to a third person in
order to secure the allotment of the shares is not conclusive
evidence that he should be regarded as a transferee from that
person and as such deprived of the defence of fraud.^
§ 212. Action for Damages for Deceit by defrauded Sub-
scriber. - — A person who is induced by fraud to subscribe for
shares in a corporation cannot retain the shares and at the same
time maintain an action of tort for deceit against the company.
If for any reason his right to rescind is lost, he cannot sue the
company in tort for deceit.* His rights in that respect differ
from those of a person who has been induced by fraud to pur-
chase land, chattels, or ordinary choses in action. It would
seem, however, that the defrauded subscriber may maintain
an action of tort for deceit against the individual officers or
agents who were guilty of fraud, although he be disabled or
averse from giving up the shares.^
§ 213-§ 219. What sufficient Fraud or Misre'presentation
to justify Rescission.
§ 213. In general. — In respect to the question' what will
amount to such fraud or misrepresentation as will afford a de-
fence to an agreement to take shares, such a contract does not
' Tyler v. Savage, 143 U. S. 79; But see Dorsey Machine Co. v.
Vreeland v. New Jersey Stone Co., McCaffrey, 139 Ind. 545 ; 38 N. E.
29 N. J. Eq. 188; Mack v. Latta, 208; 47 Am. St. Rep. 290.
178 N. Y. 525; 71 N. E. 97; 67 ' Cf. Miller v. Barber, 66 N. Y.
L. R! a. 126. 558 ; Austin v. Murdoch, 127 N. Car.
2 BerrymUe Land, etc. Co. v. 454 ; 37 S. E. 478, Getchell v. Dusen^
Z-euJts, 19 S. E. Rep. 781 (Va.). hury (Mich.), 108 N. W. 723;
' McClanahan v. Ivanhoe Land, Luetzke v. Roberts (Wise), 109
etc. Co., 96 Va. 124; 30 S. E. 450. N. W. 949; HaU v. Old Talargoch
* Houldsworth v. City of Glasgow Lead Mining Co., 3 Ch. D. 749
Bon/c, 5 A. C. 317; Wilson y. Hund- (when the court refused to stay
ley, 96 Va. 96 ; 30 S. E.492 ; 70 Am. proceedings in an action by a sub-
St. Rep. 837. Cf. Wallace v. Hood, scriber against the company and
89 Fed. 11, 22-23. the directors jointly). See also,
183
§ 214 ORGANIZATION AND ISSUE OF SHAEES [ChAP. Ill
differ from other contracts.' It has been held that if the mis-
representation be material and be relied upon by the subscriber,
he may rescind the contract even though he would have sub-
scribed had no misrepresentation been made.^ Certainly, the
defrauded subscriber may rescind without showing that the
shares were worth less than he paid for them.^ Some authorities
maintain that an agreement to take shares in a corporation is
within the class of contracts uberrimae fdei which are voidable
for mere non-disclosure without proof of actual misrepresenta-
tion ; * but the prevalent and better opinion is that this is not
so, and that such agreements are voidable for non-disclosure
only when the suppressio veri makes that which is stated false
or misleading.^
§ 214. Misrepresentation as to Corporation Afiairs. — Cer-
tain cases of representations relating to corporation affairs in-
volve questions which do not usually arise except with respect
to contracts to take shares. A statement in a prospectus that
A is a director will justify rescission of a contract of subscrip-
tion to shares, although the representation may have been true
at the time, if A retires before allotment.' A statement in a
prospectus that A was expected to become a director is deemed
untrue where A had expressed an intention of becoming a
director but had not authorized the publication of his name.'
A representation that undrawn profits to a large amount had
Grover v. Cavanaugh (Ind.), 82 N. E. But see Pvlsford v. Richards, 17
104 (holding that oral misrepre- Beav. 87.
eentations by officers as to the ' Stern v. Kirkby Lumber Co., 134
financial condition of the company Fed. 509 ; Spreckels v. Gorrill (Cal.),
will sustain an action by the de- 92 Pac. 1011.
frauded subscriber notwithstanding * Anson on Contracts, 8th ed..
Lord Tenterden's Act). 160. Cf. Components Tube Co. v.
1 Central By. Co. v. Kisch, L. R. Naylor (1900), 2 Ir. 1 ; New Bruns-
2 H. L. 99. unck, etc. Co. v. Muggeridge, 1 Dr. &
Cf. Oakes v. Turquand, L. R. 2 Sm. 363.
H. L. 325 ; Jackson v. Turquand, ° Cf . Aaron's Reefs v. Twiss,
L. R. 4 H. L. 305 ; London & Stafford- (1896), A. C. 273 ; Central Ry. Co. v.
shire Fire Ins. Co., 24 Ch. D. 149; Kisch, L. R. 2 H. L. 99; Pvlsford w.
Smith V. Reese River Co., 2 Eq. 264 Richards, 17 Beav. 87.
(in substance affirmed in Reese River ° Anderson's Case, 17 Ch. D. 373;
Co. V. Smith, L. R. 4 H. L. 64); Scottish Petroleum Co., 23 00..!). il3.
Wainm-ight's Case, 63 L. T. 429; ' Karberg's Case (1892), 3 Ch. 1.
Byers Bros. v. Maxwell (Tex.), 73 Cf. Ex parte Wainwright, 59
S. W. 437. L. J. Ch. 281.
= Ex parte Carting, 56 L. J. Ch. 32 1 .
184
§ 163-§ 260] SUBSCRIPTIONS OBTAINED BY FRAUD § 216
been appropriated as a "reserve fund" is not the less true
because the profits in question were not invested as a separate
fund but were made part of the working capital.' A repre-
sentation that no shares had been sold for less than par is very
material.^ The same is true of a representation that the com-
pany is legally incorporated, whereas in fact some of the pro-
ceedings necessary to secure limited liability have been omitted.*
On the other hand, a representation that neighbors and friends
of the subscriber have also agreed to become shareholders has
been thought immaterial.* This decision, however, must be
supported, if at all, upon the ground that the representation was
too indefinite to be relied upon; for a representation that a
named person has subscribed is certainly material and will
justify rescission if the individual in question was not a
bona fide subscriber.^ A representation that the company is
free from debt has been held to mean that the land which
constitutes its only property is unincumbered."
§ 215. Misrepresentation as to Matters of Law. — By the
principle of law usually accepted in England and America, con-
tracts are not voidable for misrepresentation, even though fraud-
ulent, as to matters of law ; and hence agreements to take shares
cannot be avoided because they may have been induced by
fraudulent misstatements as to the powers of the company
under its act of incorporation or as to the purport or effect of
the general enabling act, if the company be organized under a
general law.' Hence, also, a wilfully false statement that the
shares are " non-assessable " will not be ground for repudiation
of liability.^
§ 216. Misrepresentation as to Contents of Incorporation
Paper. — Misrepresentation as to the contents of the incorpora-
' Kennedy v. Acadia Pulp, etc. 503; Alabama Foundry, etc. Works
Co., 38 Nova Scotia 291. v. DaUas, 29 So. 459 ; 127 Ala. 513.
^ Hubbard v. International Mer- « Tinker v. Kier, 195 Mo. 183 ; 94
cantUe Agency (N. J.), 59 Atl. 24. S. W. 501.
Cf. Wenstrom Consol., etc. Co. v. ' 1 Morawetz on Priv. Corps.,
PurneU, 75 Md. 113, 122 ; 23 Atl.134. 2d ed., § 95.
' Maine v. Midland Investment Cf. Clem v. Newcastle, etc. R. R.
Co. (Iowa), 109 N. W. 801. Co., 9 Ind. 488; 68 Am. Dec. 653.
* Haskell v. Worthington, 94 Mo. « Upton v. TribUcock, 91 U. S. 45 ;
560 ; 7 S. W. 481. Parker v. Thomas, 19 Ind. 213 ; 81
' Cf. Coles v. Kennedy, 81 Iowa Am. Dec. 385 ; Ellison v. Mobile, etc.
360; 46N.W.1088; 25 Am. St. Rep. B. R. Co., 36 Miss. 572.
,185
§ 217 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
tion paper may entitle a person who has agreed to take shares
on the faith thereof to repudiate the agreement.' In England
the opinion has been advanced that such misrepresentation,
after the paper has been recorded and therefore after the appli-
cants for shares have an opportunity of examining it for them-
selves, will not justify rescission,^ and the same principle has been
approved in America ; ^ but nevertheless this opinion seems to
be without support in principle especially where the misrepre-
sentation is fraudulent.^ The doctrine of constructive notice
should not be perverted into a cover for fraud.'' Such misrep-
resentations usually occur in cases of departure from the original
scheme laid down for the company by its promoters in a pros-
pectus published before incorporation. The mere fact of such
departure affords no defence to a person who has subscribed
for shares after the incorporation paper, embodying the altered
scheme, has been executed and recorded, unless the original
prospectus or other statements setting forth the original scheme
be circulated after the change was made, and be brought to the
knowledge of and relied upon by the applicant for shares. The
case of an application for shares made prior to incorporation,
as affected by subsequent departures from the original scheme,
is considered below."
§ 217. Misrepresentation unauthorized by Corporation. —
In order that a contract of subscription to shares may be re-
scinded for misrepresentation, it is in general necessary that the
misrepresentation be proved to have been made by an agent of
the corporation duly authorized to make representations for the
purpose of inducing persons to subscribe to the shares.' Re-
scission may, however, be had on account of misrepresentation,
which was made by promoters prior to the company's incor-
poration. If the company accepts an application for shares,
' Central By. Co. v. Kisch, L. R. agreement to take shares, although
2 H. L. 99. the prospectus referred apphcants
^ Cf. Ross V. Estate Investment for shares to a recorded document
Co., 3 Eq. 122 ; Oakes v Turquand, inspection of which would have dis-
L. R. 2 H. L. 325. closed the untruth of the mis-
^ Oil City Land, etc. Co. v. Porter, representations).
99 Ky. 254; 35 S. W. 643. ' See supra, § 162.
* Cf. Langham v. East Rose " Infra, §.258.
Wheal, etc. Co., 37 L. J. Ch. 253 ' Newlands v. National Errir
(where a misleading prospectus players, etc. Ass'n, 54 L. J. Q. B. 428.
was held to justify rescission of an
186
§ 163-§ 260] HOW SUBSCRIPTION PERFORMED § 220
which was made, and is known by the company to have been
made, in reliance upon statements of promoters made before
incorporation, the corporation thereby adopts those representa-
tions, so that they have the same effect in rendering the agree-
ment voidable as if they had been made by agents of the
company after its formation.'
§ 218. Misrepresentation as to Nature of Transaction. —
Where misrepresentation goes to the nature of the transaction
— for example, where a person signs a subscription to shares
under the belief, induced by fraud, that he is merely depositing
money in a bank — he never becomes a shareholder and may
apparently repudiate the shares in spite of delay or of the super-
vention of winding-up proceedings.^
§ 219. Misrepresentation as to Identity of Company. — In
a case of misrepresentation or mistake as to the identity of the
company whose shares are applied for, there is no meeting of
minds and therefore no contract at all. For example, it was
held in England that where a person received an allotment
of shares in a company recently incorporated, the application
having been made under the erroneous belief, fostered by the
directors, that the company was a different and long-established
corporation, there was no meeting of minds and therefore no
contract at all — not even a voidable one ; so that the allottee
was not liable in respect of the shares although the company
went into liquidation before he repudiated ownership.^
§ 220. How Contract of Subscription may be performed. —
A contract to subscribe for or to take shares in a corporation is
satisfied either by. personally accepting the shares or by finding
some one else who will do so.* Performance by the corporation
means the issue of valid shares. It does not necessarily include
the issue of a share-certificate.^ If the contract calls for paid-up
' Karberg's Case (1892), 3 Ch. 1. =■ National Ins., etc. Ass'n, 4^ DeG.
Cf. Lynde v. Anglo-Italian, etc. F. & J. 78.
Spinning Co. (1896), 1 Ch. 178; ' BoiiZie's Case (1898), 1 Ch. 110.
Stewart v. Rutherford, 74 Ga. 435; Cf. Stewart v. Austin, 3 Eq. 299.
and infra, § 257 and § 337. But see * London & Colonial Finance
Gourlie v. Chandler, 41 Nova Scotia Corp., 77 L. T. 146.
341. ' Infra, § 233 and supra, § 171.
187
§ 221 ORGANIZATION AND ISSUE OF SHAKES [ChAP. Ill
shares, the company can perform its part only by issuing shares
which are in fact and law fully paid up."
§ 221-§ 227. CONDITIONAL AGREEMENTS TO TAKE SHARES.
§ 221-§ 223. Conditions Precedent.
§ 221. In general. — Conditional subscriptions to shares
have occasioned considerable diversity of judicial opinion. We
shall first consider subscriptions upon a condition precedent —
that is to say, agreements to become a shareholder in a corpora-
tion if a certain contingency occurs. The objection to such
agreements is that, if they are binding, they tie up the com-
pany and prevent it from allotting the shares to other applicants
who might be willing to accept the same unconditionally, and
yet do not enable the corporation to call in the portion of the
capital represented by the shares so subscribed for. In other
words, if such agreements are binding, the company incurs at
once all the disadvantages of an absolute allotment, but receives
none of the benefits until the condition is performed. Accord-
ingly, it is usually laid down in America that either party may
withdraw from such conditional agreements at any time before
the condition is performed.' According to these authorities,
such conditional subscriptions, are void as contracts but operate
as offers which may be accepted by performing the condition.'
Some cases hold that conditional subscriptions are not contrary
to law, and that therefore the subscriber cannot withdraw even
before the condition is performed.* Of course, unless the con-
' Ecuadorian Ass'n v. Ecuador If the performance of the con-
Co. (N. J.), 65 Atl. 1051 (headnote dition lies pecuUarly within the
inadequate). See infra, § 233, § 779, company's knowledge, the sub-
and § 789. scriber will not -be bound unless the
' See 1 Morawetz on Priv. Corps., company give him notice of per-
2d ed., § 78-§ 81. formance. Chase v. Sycamore, etc.
Cf. TaggaH v. Western Md. R. B. R. R. Co., 38 111. 215.
Co., 24 Md. 563 ; 89 Am. Dec. 760 * New Albany, etc. R. R. Co. v.
(semble) ; Baltimore, etc. R. R. Co. v. McCormickj 10 Ind. 499 ; 71 Am.
Pumphrey, 74 Md. 86; 21 Atl. 559. Dec. 337; Cravens v. Eagle Cotton
' Webh V. Baltimore, etc. R. R. MiZZs Co., 120 Ind. 6 ; 2lN. E. 981;
Co., 77 Md. 92 ; 26 Atl. 113 ; 39 Am. 16 Am. St. Rep. 298 ; Philadelphia,
St. Rep. 396 ; Ashtabula, etc. R. Co. etc. R. R. Co. v. Hickman, 28 Pa. St.
V. Smith, 15 Oh. St. 328, 335; 31S; Van AUen v. Illinois Central R.
Taggart v. Western Md. R. R. Co., 24 R. Co., 7 Bosw. (N. Y.) 515, 523-524
Md. 563; 89 Am. Dec. 760. (holding that the company is bound).
188
§ 163-§ 260] CONDITIONAL SUBSCRIPTIONS § 222
dition is performed, the subscriber cannot be held even though
his name may have been entered by the company on the register
of members,^ unless indeed the condition be waived by acting
as shareholder or otherwise.^ Such waiver will not be binding
if the subscriber believed that the condition had been performed.^
The fact of filing an application for- removal of the applicant's
name from the register of shareholders on the ground that his
subscription had been obtained by fraud will not amount to
waiver of non-performance of a condition precedent.* If sub-
scriptions upon conditions precedent are legally no subscrip-
tions at all until the condition be performed or waived, they
cannot be counted in calculating whether the capital has been
completely subscribed.^
§ 222. Underwriting Agreements. — Inasmuch as the only
objection to subscriptions upon conditions precedent is that
they tie up the company and prevent the allotment of the shares
to persons who might be willing to subscribe unconditionally.
Perhaps, this is the law in Eng- "waiver" as the making of a new
land. See Hirsch v. Burns, 77 L. T. contract is forcibly pointed out.
377; Consolidated Copper Co. v. See also Lane v. Brainard, 30
Peddle, 5 Rettie 393 ; Shaw's Case, Conn. 565, 579 (waiver by acting as
34 L. T. 715. director) ; Wheatcroft's Case, 42
Cf. Racine County Bank v. Ayers, L. J. Ch. 853 ; Imperial Land
12 Wise. 512 (where the court said Corporation, 16 W. R. 1191 (acting
that the conditional subscription as director held not proof of waiver
was valid but where the actual of condition); Slipher v. Earhart,
decision was that upon performance 83 Ind. 173 (waiver by executing
of the condition, the subscriber not unconditional note for amount of
having previously withdrawn became shares); Chamherlain v. PainesvUle,
bound). etc. R. R. Co., 15 Oh. St. 225 (waiver
' Rogers' Case, 3 Ch. 633 ; Simp- by executing unconditional note) ;
son's , Case, 4 Ch. 184 ; Sunken Dayton, etc. R. R. Co. v. Hatch, 1
Vessels Recovery Co., 3 De G. & J. 85. Disney (Oh.) 84 (payment of calls,
Cf. Wood's Case, 15 Eq./236; voting as shareholder, etc.);
Elder v. New Zealand Co., 30 L. T. Wyman v. Bowman, 127 Fed. 257,
285 ; Audenried v. East Coast Mill- 265-266 ; 62 C. C. A. 189.
ing Co., 59 Atl. 577 (N. J.). But see Ridgefield, etc. R. R. Co.
But see Bedford R. R. Co. v. v. Reynolds, 46 Conn. 375 (where
Bowser, 48 Pa. St. 29; Boyd v. the condition was held not to be
Peach Bottom Ry. Co., 90 Pa. St. 169. waived by acting as shareholder).
These Pennsylvania cases may per- ' Hawkins v. Citizens Real Estate,
haps be supported on the ground etc. Co. (Oreg.), 64 Pac. 320.
that the condition was really a * Tomlin's Case, 14 Times L. R.
condition subsequent. 53.
' Cf. supra, § 194. 1 Morawetz " Centred Turnpike Corp. v. Valenr
on Priv. Corps., 2d ed., § 91-§ 93, tine, 10 Pick. (Mass.) 142.
where the nature of the so-called
189
§ 223 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
it follows that if the company is left free to allot the shares to
any one else, the conditional subscription is vahd, and binds the
conditional subscriber. For this reason, underwriting agree-
ments, or contracts to take certain shares if they are not
subscribed by the public, are valid and binding upon the
underwriter/
§ 223. Bonds or Scrip convertible into Shares. — The issue
of bonds or scrip convertible into shares at the option of the
holder is really a subscription to the shares upon a condition
precedent and is hable to the same objections. If the company
is bound by the conditional agreement, it cannot allot the shares
to any one else until the time for performance of the condition
be passed. If this reasoning be sound, the issue of such con-
vertible bonds would not be lawful without affirmative statutory
authority; or at any rate the corporation would not be Uable
for allotting the shares to third persons, or for repudiating the
option in any other manner, at any time before the exercise of
the option. In at least one case, however, this argument did
not prevail, but on the contrary the court held that the cor-
poration could not escape from the obligation to exchange
the bonds for shares.^ At any rate, the issue of bonds con-
vertible into shares at the option of the company would not
be open to any such objection; for the company would still
be at liberty to allot the shares to other persons and would
therefore run no risk of losing unconditional subscribers to its
capital.
§ 224r-§ 226. Conditions Subsequent.
§ 224. In general. — A subscription to shares coupled with
a condition subsequent — that is to say, an agreement to be-
come a shareholder subject to the proviso that in a certain con-
tingency the subscriber shall cease to be a shareholder — is so
far good that if shares are actually issued to the subscriber, the
issue is valid; the condition should be rejected as repugnant.
' Cf. Re Hooley (1899), 2 Q. B. Cf. Denney v. Cleveland, etc. R. R.
679. See infra, § 439. Co., 28 Oh. St. 108 (where the
' Van AUen v. Illinois Central question was left open).
R. R. Co., 7 Bosw. (N. Y.) 515.
190
§ 163-§ 260] CONDITIONAL SUBSCRIPTIONS
§ 225
ultra vires, and void.' The issue of shares as collateral security
for a debt of the company seems to be permitted, and if so must
be deemed an exception to the principle just stated.^ Moreover,
a condition that in a certain event some other person shall be
substituted as shareholder does no more than provide for a
transfer, and is valid.^ A condition that, upon failure to pay
calls or the like, the subscriber's membership shall cease is sub-
stantially equivalent to the reservation of a power of forfeiture
(which the law would imply without express words) and would
therefore seem to be unobjectionable.* What is intended as a
condition subsequent, while ineffective as a condition, may
operate as a promise on the part of the company to perform the
intended condition so as to give the shareholder a right of action
against the company for damages in case of breach.^
§ 225. Redeemable Shares. — Redeemable shares are really
shares issued upon a condition subsequent. Nevertheless, it is
generally held in America that, even without the affirmative
statutory authority which sometimes exists, redeemable shares
' Pittsburgh, etc. R. R. Co. v.
Biggar, 34 Pa. St. 455; Southport,
etc. Banking Co., 55 L. J. Ch. 497;
Melvin v. Lamar Ins. Co., 80 111. 446 ;
22 Am. Rep. 199 ; Addison's Case, 5
Ch. 294; Bedford R. R. Co. v.
Bowser, 48 Pa. St. 29; Stunt v.
Newark Weldless, etc. Co., 22 Oh.
Circ. Ct. 120; Chamberlain v.
PainesvUle, etc. R. R. Co., 15 Oh. St.
225, 247 (semble) ; Australian Pro-
ducers & Traders, 31 Vict. L. R. 511
(a strong case).
Cf. Black & Co.'s Case, 8 Ch. 254,
258-260 (headnote inadequate) ;
Pellatt's Case, 2 Ch. 527, 532-533;
Mare v. Anglo-Indian S. S. Co., 3
Times L. R. 142 ; Fort MiOer, etc.
Co. v. Payne, 17 Barb. (N. Y.) 567,
679; Boyd v. Peach Bottom Ry. Co.,
90 Pa. St. 169 ; Bucksport, etc. R. R.
Co. V. Buck, 68 Me. 81, 84^85
(headnote inadequate).
But see Vent v. Dvluth Coffee, etc.
Co., 64 Minn. 307; 67 N. W. 70;
Porter v. Plymouth Gold Mining Co.,
29 Mont. 347; 74Pac.938; 101 Am.
St. Rep. 569.
A fortiori, the rule stated in the
text applies where the condition is
kept secret. Great Western Tel. Co.
V. Haight, 49 111. App. 633; White
Mountains R. R. Co. v. Eastman,
34 N. H. 124; Olmstead v. Vance,
etc. Co., 196 III. 236; 63 N. E. 634.
^ Cf. Burgess v. Seligman, 107
U. S. 20 ; 2 Sup. Ct. 10 ; McLean-
Bowman Co., 138 Fed. 181.
But see Brewster v. Hartley, 37
Cal. 15 ; 99 Am. Dec. 237 (where it
was said that stock cannot be issued
as collateral security for the com-
pany's own debt) ; Addison's Case,
5 Ch. 294.
« Burke v. Smith, 16 Wall. 390.
But cf. Swartwout v. Michigan
Air Line R. R. Co., 24 Mich. 389.
* Cf. Weeks v. Silver Islet, etc.
Mining Co., 23 Jones & S. (N. Y.) 1.
But see Mann v. Cooke, 20 Conn.
178.
^ Chamberlain v. Painesmlle, etc.
R. R. Co., 15 Oh. St. 225, 247
(semble) ; Stunt v. Newark Weldless,
etc. Co., 22 Oh. Circ. Ct. 120 (sem-
ble).
191
§ 226 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
may be issued whether the option of redemption rests with the
shareholder '■ or with the company.^ Wherever corporations
are held to have an implied power to pm-chase their own shares
it is not surprising that this conclusion should be reached.
§ 226. Shares convertible into Bonds. — The issue of shares
convertible into bonds or debentures is likewise really an issue
subject to a condition subsequent. The issue of such convertible
shares is sometimes expressly authorized by statute. Apart from
statute, it is submitted that a provision for conversion into bonds
should be held to be illegal; but undoubtedly many American
courts — particularly those courts which concede the power of a
corporation to purchase its own shares — would uphold such a
provision even without the aid of any statute. Where conver-
sion of shares into bonds is provided for, and no time is expressly
limited for an exercise of the option by the shareholder, he must
nevertheless exercise it within a reasonable time and cannot be
allowed to call for bonds in exchange for his shares, after the
lapse of years and after the company has become insolvent.*
§ 227. Whether Agreement to be construed as Absolute or
Conditional and whether Condition to be construed as Precedent
or Subsequent. — Considerable difficulties may be experienced in
determining whether a subscription should be construed to be
conditional,^ and if so whether the condition should be con-
> Brovme v. St. Paid Plow Works, Co. v. Camden (Va), 56 S. E. 561 ;
62 Minn. 90 ; 64 N. W. 66 ; Vent v. Lindsay v. Arlington Co-op. Ass'n,
Duluth Coffee, etc. Co., 64 Minn. 307 ; 186 Mass. 371 ; 71 N. E. 797.
67 N. W. 70 ; Wisconsin LMmber Co. But see Olmstead v. Vance, etc.
V. Greene, 127 Iowa. 350; 101 N. W. Co., 196 111. 236; 63 N. E. 634;
742 ; 109 Am. St. Rep. 387 ; 69 L. Long v. Gxielph Lumber Co., 31 Up.
R. A. 968 ; Oaehle's Piano Mfg. Co. Can. C. P. 129 ; Boley v. Sonora
V. Berg, 45 Md. 113 (holding that Development Co. (Mo.), 103 S. W.
shareholder on exercising option is 975.
entitled to the par value of the shares ' Hackett v. Northern Pac. Ry. Co.,
and not merely to the value at the 36 N. Y. Misc. 583 ; 73 N. Y. Supp.
time of redemption as impaired by 1087.
losses, but, query, whether this case " Cadin v. Gre&n, 120 N. Y. 441 ;
can stand with Maryland Trust Co. 24 N. E. 941.
V. Nat. Mechanics' Bank, 102 Md. Of. Mclntyre v. E. Bement's Sons
608 ; 63 Atl. 70) ; Fremont Carriage (Mich.), 109 N. W. 45.
Co. v. Thomsen, 91 N. W. 376; 65 * See Lane v. Brainard, 30
Nebr. 370; United States Mineral Conn. 565; Shaw's Case, 34 L. T.
192
§ 163-§ 260] CONDITIONAL SUBSCRIPTIONS § 227
strued to be precedent or subsequent. In doubtful cases, the
courts incline to hold the subscription to be conditional, and
the condition to be a condition precedent.' Thus, where a
letter of allotment contained a provision that after payment of
the allotment money no further call would be made until the
report of a committee of directors appointed to investigate a
mine which the company was formed to purchase, and that
"if the board resolve not to purchase the mine, the money
will be returned to the shareholders without deduction," the
Scotch Court of Session held that the allotment was subject
to a condition precedent.^ So, where the subscriber's name
was entered on the register of shareholders, but with a memo-
randum stating that the allotment was conditional, and where
the share-certificates were deposited in escrow to await the
performance of the condition, the court held that the condition
was a condition precedent.' So, where an application for
shares is made as a part of a scheme for the amalgamation of
two companies and upon the supposition that the amalgama-
tion will be consummated, if for any reason the consolidation
is not accomplished or is set aside, the application falls with
it.* Where the application for shares is made by the sub-
scriber on the faith of a prospectus, a condition inserted in
the prospectus may sometimes be read into the offer of the sub-
scriber. Thus, where the prospectus states that no allotment
715 (where the condition was that 25 Fed. 544; Bitcksport, etc. R. R.
the applicant should be app6inted Co. v. Brewer, 67 Me. 295 ; Parker v.
director) ; Re Mogridge, 57 L. J. Ch. Thomas, 19 Ind. 213 ; 81 Am. Dec.358.
932 (condition that applicant should But see Paducah, etc. Railroad Co.
be appointed manager) ; Rankin v. v. Parks, 86 Tenn. 554 ; 8 S. W. 842 ;
Hop, etc. Exchange Co., 20 L. T. 207 ; Cravens v. Eagle Cotton Mills Co., 120
Simpson v. Heaton's, etc. Co., 19 Ind. 6'; 21 N. E. 981; 16 Am. St.
W. R. 614; Morrow v. Iron & Rep. 298; Australian Producers &
Steel Co., 87 Tenn. 262; 10 S. W. Traders, 31 Vict. L. R. 511; NoHh
495; 10 Am. St. Rep. 658 ; 3 L. R. MissouriR.R.Co.Y.Maier,31Mo.l9.
A. 37 ; Chamberlain v. Painesville, '' Consolidated Copper Co. v.
etc. R. R. Co., 15 Oh. St. 225; Peddie, 5 Rettie 393.
Swartwout v. Michigan Air Line ' Spitzel v. Chinese Corp., 15
R. R. Co., 24 Mich. 389 ; Sweeney v. Times L. R. 281.
Tenn., etc. R. R. Co. (Tenn.), 100 But see Sovihport, etc. Banking
S. W. 732 (subscription construed Co., 55 L. J. Ch. 497.
not to be conditional but merely * Bank of Hindustan v. Alison,
subject to special terms). L. R. 6 C. P. 222 ; Stace and Worth's
' Cf. Sunken Vessels Recovery Co., Case, 4 Ch. 682.
3 De G. & J. 85 ; Cook v. Chittenden, But see Campbell's Case, 9 Ch. 1,
VOL. I. — 13 193
§ 228 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
will be made until a certain number of shares have been sub-
scribed, an application for shares based thereon is subject to
that condition precedent and cannot be accepted until the
stipulated number of shares have been subscribed.'
§ 228. Subscriptions on Special Terms. — Subscriptions on
special terms differ from conditional subscriptions in that, while
the rights or liabilities of the shareholder are, by agreement,
varied from those which the law annexes to the status in the
absence of any special arrangement, still there is no proviso
that, in case of lack of compliance with the agreement for
special rights or liabilities, the subscriber shall cease to be a
shareholder.^ It is perfectly competent for the company to
make special terms with a shareholder as to his rights and
liabilities, provided only such special terms do not conflict with
some statutory provision or with the policy of the incorpora-
tion laws, or infringe in some way the rights of dissenting
shareholders. Usually subscriptions on special terms confer
special rights in respect to dividends, in which case they
belong to the topic of preferred shares,' or else they attempt
to regulate the time or manner of payment for the shares, in
which case they are part of the subject of payment for shares
— a topic considered below.^
§ 229. Application of Parol Evidence Rule. — In deaKng
with questions as to subscriptions alleged to be conditional or
subject to special terms, the parol evidence rule must constantly
be borne in mind. Written subscriptions to shares Uke other
contracts in writing cannot be varied by proof of special parol
terms or conditions.^
§ 230. Subscriptions in Excess of Autborized Capital. —
The subjects of excessive subscriptions for shares and of over-
' Finance and Issue v. Canadian Thornsburgh v. Newcastle, etc. B. R.
Produce Corp. (1905), 1 Ch. 37, 45. Co., 14 Ind. 499; Thigpen v. Misji-
' Sweeney v. Tenn., etc. R. R. Co. sippi Central R. R. Co., 32 Miss.
(Tenn.), 100 S. W. 732, 736. 347 ; Smith v. Tallahassee, etc. Plank
' Infra, § 525 et seq. • Road Co., 30 Ala. 650; Wight v.
' Infra, § 774 et seq. Shelby R. R. Co., 16 B. Monr. (Ky.)
" New Albany, etc. R. R. Co. v. 4 ; 63 Am. Dec. 522.
Fields, 10 Ind. 187 ; Vicksburg, etc. Cf . Cass v. Pittsburg, etc. Ry. Co.,
is. jB. V. McKean, 12 La. Ann. 638 ; 80 Pa. St. 31. See also supra, § 185.
194
§ 163-§ 260] EXCESSIVE subscriptions § 230
issued shares are involved in no- little obscurity. Of course,
where the capital of a corporation is limited, the company has
no right to issue shares in excess of the prescribed limit; but
the mere fact that the company has agreed to issue more shares
than it can lawfully issue does not release subscribers to whom
the company is able and willing to issue valid shares.^ If after
issuing shares to the full amount of its authorized capital, it
should undertake to issue additional shares, the contract so to
do would be ultra vires and unenforceable either by or against
the company. Even if the contract should, so far as possible,
be executed by the issue of share-certificates and otherwise,
the allottees would acquire (unless under very exceptional cir-
cumstances) no rights of membership.^ If the overissued
shares should be transferred to bona fide purchasers, the com-
pany might be estopped from questioning the validity of the
shares in their- hands ;^ so that they would have a cause of
action against the company for damages ; but not even bona fide
purchasers would be actual shareholders, so as to be entitled to
vote, for example, or to participate in dividends.* Of course, no
vitra vires increase of capital can affect the vested rights and
obligations of persons who have already become shareholders.^
In a case of mere executory contracts to issue shares in ex-
cess of the authorized capital, it would seem that holders of
the first contracts in point of time would be entitled to a pref-
erence in the distribution of the authorized shares. Neverthe-
less, those who without notice of any outstanding equities first
attain the position of actual shareholders, and thus become
intrenched behind the legal title, will prevail over persons
who subscribed before them but to whom no shares had been
actually issued before the authorized capital was exhausted.
The subscribers to whom the company can issue no shares by
reason of the exhaustion of the entire authorized capital have
a good claim for damages against the company.'
' Oler V. Baltimore, etc. R. R. Co., ' Infra, § 909, § 680.
41 Md. 583; Shick v. Citizens' < Ibid.
Enterprise Co., 15 Ind. App. 329; ^ Cartwright v. Dickinson, 88
67 Am. St. Rep. 230. Tenn. 476 ; 12 S. W. 1030 ; 17 Am..
But see Bristol Creamery Co. v. St. Rep. 910; 7 L. R. A. 706. Cf.
TUton, 70 N. H. 239; 47 Atl. Rep. infra, § 581.
691. ° Birmingham Nat. Bank v..
' Infra, § 679, § 580. Roden, 97 Ala. 404; 11 So. 883.
196
§ 231 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
Still more difficult questions arise where the valid shares
cannot be traced and distinguished from the overissued shares.
Such confusion cannot so readily occur in England, where each
share is distinguished by a denoting number; and indeed the
English system of numbering shares is a valuable check upon
overissue. In former days in America, particularly in cases
of incorporation under special acts, commissioners used to be
appointed with power to apportion the shares in case of over-
subscription.*
§ 231. Rescission or Modification of Agreement to take
Shares. — So long as an agreement to take shares in a cor-
poration remains executory — that is to say, until the subscriber
has become an actual shareholder — it may, like any other con-
tract, be rescinded or modified by mutual consent.^ So, if the
company refuses to issue the shares as agreed, the subscriber,
upon giving due notice of his election to rescind the contract,
may recover back any sum paid upon his subscription upon
the ground of failure of consideration.^ Of course, a gratuitous
release of one who has subscribed to the company's capital would
generally be ultra vires, and might be void as in fraud of cred-
itors; but the company has the same control over executory
contracts to take shares in its capital that it has over its other
assets or choses in action. In America, where no formality
such as entry on a register of members is generally necessary
in order to make a person an actual shareholder, difficulty
may be experienced in the application of the rule; but the
rule itself is submitted to be as sound in the United States
as in Great Britain. After the contract of subscription has
been executed and the subscriber has become an actual
shareholder, rescission by mere agreement is in general, ac-
cording to the better view, no longer possible, except as a
' See 2 Clark & Marshall on Morawetz on Priv. Corps., 2d ed.,
Priv. Corps., § 514. § 110.
2 Florence Land Co., 29 Ch. D. Cf. Kipling v. Todd, 3 C. P. D.
421; Sahlgreen & Carroll's Case, 3 350.
Ch. 323, 328, 329 (headnote in- But see A<io7?is' Case, 13 Eq. 474 ;
adequate) ; Barnett's Case, 18 Eq. Davidson's Case, 4 K. & J. 688.
507 ; Whiteley's Case, 1 Megone 154 ; As to the rule in respect to sub-
Cook V. Chittenden, 25 Fed. 544 scribers of the incorporation paper,
(headnote inadequate) ; CheUain v. see infra, § 242.
Re-public Life Ins. Co., 86 111. 220, ' Swazey v. Choate Mfg. Co., 48
224-225 (headnote inadequate) ; 1 N. H. 200.
196
§ 163-§ 260] ENFORCEMENT OF SUBSCRIPTIONS § 233
compromise of a boria fide dispute as to whether the share-
holder is bound.'
§ 232-§ 236. Remedies for Breach of Executory Contracts of
Svbscription.
§ 232. Actions at Law — By the Subscriber. — An agree-
ment to take shares in a corporation, like any other contract,
may be sued upon at law by either party in case of a breach by
the other. For instance, if a corporation which has accepted an
application for shares refuses to issue them as agreed, the appli-
cant may sue the company in assumpsit, and recover the differ-
ence between the market value of the shares and the amount —
usually, of course, their par value — which he would have had
to pay for them.^ If he has paid for the shares in full, the meas-
ure of damages would be the market value of the shares ; * but
an action for money had and received to recover back the money
which he has paid will not lie.*
§ 233. By the Corporation. — Conversely, if the subscriber
refuses to accept the allotted shares, the company may have an
action of assumpsit against him. Such an action, however, must
be distinguished from an action to recover calls.' The breach
laid would be, not the failure to pay calls, but the refusal to ac-
cept the shares. An action for calls is an action to recover a
liquidated sum of money which the defendant is under a duty or
obligation to pay; an action for refusal to perform an agree-
ment to take shares in the complaining corporation is an action
for damages, in which the amount recoverable would rarely be
the same as in an action for calls. The measure of damages
would be the difference between the amount which the defend-
ant as shareholder would have been liable to pay on call or other-
' See infra, § 635 et seq. into liquidation is not a breach of
^ Cf. Hirsch v. Burns, 77 L. T. such a contract. Hirsch v. Burns,
377 ; Rogers v. Gladiator, etc. Co. 77 L. T. 377.
(S. Dak.), 113 N. W. 86 (holding ^ Arnold v. Suffolk Bank, 27
that the action cannot be main- Barb. (N. Y.) 424.
tained where the contract called for * Arnold v. Suffolk Bank, 27
issue of shares in violation of a con- Barb. (N. Y.) 424.
stitutional provision requiring pay- ° Cf. Charlotte, etc. B. R. Co. v.
ment in money, labor, or property). Blakdey, 3 Strob. (S. Car.) 245
That the company voluntarily goes (headnote inadequate).
197
§ 234 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
wise — generally, of course, the par value of the shares — and
the actual market value of the shares when paid-up.^ In any such
action it is incumbent on the company to show that it was ready
and willing to carry out its part of the contract by issuing the
shares,^ and, if the contract calls for paid-up shares, that the
shares if issued would be in fact and law paid-up.^ But since
delivery of share-certificates is not necessary to constitute an issue
of shares, there would be no necessity of proving a tender of
certificates.'' If the company should by gross mismanagement
or otherwise greatly depreciate the value of its shares after the
making of a contract of subscription to shares and before the
actual issue of shares thereunder, it would seem that the com-
pany, having disabled itself from carrying out the contract
according to the expectation of the parties, would not be entitled
to enforce the contract against the subscriber.^ In this additional
respect, an action upon an executory agreement to take shares
differs from an action against a person who has actually become
a shareholder to recover the amount of his subscription, to which
latter action fraudulent or ultra vires acts on the part of the
corporation constitute no defence."
§ 234. Bills for Speci&c Performance. — Some diversity of
opinion has existed upon the question whether a court of equity
should enforce specific performance of a contract of subscrip-
tion to shares in the capital of a corporation. In one or two com-
paratively early English cases, the Master of the Rolls refused
^'Thrasher v. Pike Co. R. R. Co., Land Co. v. Hayward, 95 Wise. 109;
25 111. 393 ; Mt. Sterling Carload Co. 69 N. W. 567.
V. lAtUe, 14 Bush (Ky.) 429 (over- ' Ecuadorian Ass'n v. Ecuador
ruled in part by Bvilock v. Falmouth, Co. (N. J.), 65 Atl. 1051 (headnote
etc. Co., 85 Ky. 184; 3 S. W. 129); inadequate). See infra, §778, §789.
Rhey V. Ebensburg, etc. Co., 27 Fa,. St. * Webb v. Baltimore, etc. R. R.
261. See IMorawetz on Priv. Corps., Co., 77 Md. 92; 26 Atl. 113; 39
2d ed., § 46, p. 45, and § 50, p. 50. Am. St. Rep. 396 ; Smith v. Gower,
Cf. Re Hooley (1899), 2 Q. B. 63 Ky. 17; Sli-pher v. Earhart, 83
579, where the refusal to accept the Ind. 173 ; Fulgam v. Macon, etc.
shares consisted in a repudiation of R. Co., 44 Ga. 597; M arson v.
the contract of subscription by the Deither, 49 Minn. 423 ; 52 N. W. 38.
subscriber's assignee in bankruptcy. See supra, § 171.
= Oler v. Baltimore, etc. R. R. Co., Cf. Hawley v. Upton, 102 U. S. 314.
41 Md. 583 (semble) ; Carter, etc. But see St. Paul, etc. R. R. Co. v.
Co. V. Hazzard, 65 Minn. 432 ; 68 Bobbins, 23 Minn. 440.
N. W. 74 ; Burrows v. Smith, 10 " See 1 Morawetz on Priv. Corps.,
N. Y. 550; St. Paul, etc. R. R. Co. 2d ed., § 118.
v. Bobbins, 23 Minn. 439 ; Level » Infra, § 756.
198
§ 163-§ 260] ENFOKCEMENT OF SUBSCRIPTIONS § 235
to decree specific performance of the agreement against the sub-
scriber.* But the tendency in more recent times has been the
other way.^ Specific performance cannot be had where the sub-
scriber has become' bankrupt, and the assignee in bankruptcy
repudiates the contract of subscription.^ In one case where the
directors of a corporation, believing themselves to be the only
shareholders, sold the property of the company and divided the
proceeds among themselves, the court held that a person to whom
the company had agreed to issue shares but to whom no shares
had been issued, should be regarded in equity as owner of the
promised shares, and as such entitled to maintain a bill for an
accounting against the directors.^
§ 235. Statute of Limitations. — A subscription to shares
in the capital of a corporation being an ordinary contract gov-
erned by the same rules as other contracts in respect to actions
or suits based thereon, it follows that the right to enforce such
a contract may be barred by limitations.^ Upon an action against
a shareholder for non-payment of calls, the statute of limita-
tions does not begin to run until the call is made and notice
thereof given." But where a person who has merely promised
to become a shareholder repudiates the agreement and refuses
to accept the allotted shares, he thereby commits a breach of
contract and a court might well hold that the statute of limita-
tions then commences to run.'
' Bluck V. Mcdlalue, 27 Beav. had performed services to be paid
398; Shejfield Gas, etc. Co. v. Har- for with shares, the shares having
rison, 17 Beav. 294. no market value) ; Garrett v. Kansas
" Odessa Tramways v. Mendel, 8 City Coal Mining Co., 113 Mo. 330;
Ch. D. 235. 20 S. W. 965; 35 Am. St. Rep. 713
Cf. Arnot's Case, 36 Ch. D. 702; (specific performance against com-
Florence Land Co., 29 Ch. D. 421 ; pany refused where contract pro-
Selover v. Isle Harbor Land Co., 91 vided for issue of shares as fully
Minn. 451 ; 98 N. W. 344 ; Sdover paid in exchange for property at an
V. Isle Harbor Land Co. (Minn.), Ill inflated valuation). See also infra,
N. W. 155 ; Edgerton v. Electric § 975.
Imp. Co., 50 N. J. Eq. 354; 24 Atl. ' Re Hooley (1899), 2 Q. B. 579.
540 (where specific performance * Pendery v. Carleton, 87 Fed. 41 ;
prayed by the subscriber was re- 30 C. C. A. 510.
fused on the ground that the con- ° Florence Land Co., 29 Ch. D.
tract was tainted with illegality) ; 421, 442.
Baumhojf v. St. Louis, etc. R. R. Co. ' See infra, § 761.
(Mo.), 104 S. W. 5 (specific per- ' But see Haggert Bros. Mfg. Co.,
formance decreed against the com- 19 Ont. App. 582 (where defendant
pany in favor of a contractor who was a charter member).
199
§ 23G ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
§ 236. Laches. — Not merely may the right to enforce a,
contract of subscription to shares of capital stock be barred at
law by limitations, but it may in equity be lost by laches.'
§ 237. Scrip and Scripholders. — In cases where for any
/reason it is deemed desirable to postpone the actual issue of
shares, the expedient is sometimes adopted of issuing "scrip," or
certificates stating that the holder thereof will be entitled to a
certain number of shares when issued by the company. A holder
of such scrip is not a shareholder, but merely a person who is
entitled under certain circumstances to become a shareholder.^
Hence, a scripholder is not subject to the liabilities of a share-
holder.* The scrip may be of various sorts. For instance, the
terms may be such that upon the occurrence of certain contin-
gencies, the company has the right to insist that the holder shall
take the shares.* Or, the scripholder may have a mere option of
becoming a shareholder; and in that case the company has no
right without his consent to enter his name on the share-register,
so as to subject him against his will to the obhgations of a share-
holder.^ The only right of the company in such a case is to give
notice that the scripholder might be registered as a shareholder,
and then if the option be not exercised within a reasonable time
to allot the shares to other persons." One of the strongest reasons
for issuing scrip is to enable the holder to transfer his rights more
readily than could otherwise be done. Accordingly, where the
scrip is by its terms transferable by delivery so as to be enforce-
• Florence Land Co., 29 Ch. D. QiuEre, whether scrip certificates
421 ; Whiteley's Case, 1 Megone 154. are not sometimes open to the
Cf. Carter, etc. Co. v. Hazzard, 6£ objection that they constitute con-
Minn. 432 ; 68 N. W. 74. ditional agreements to take shares.
^ Eustace v. Dublin Trunk Ry. See supra, § 221-§ 223.
Co., 6 Eq. 182. Cf. Van Allen v. Illinois Central
^ Ormerod's Case, 5 Eq. 110. R. R. Co., 7 Bosw. (N. Y.) 515,
He may, however, under some cir- 523-524.
cumstances be liable as a person who ' Mcllwraith v. Dublin Trunk Ry.
has agreed to become a shareholder. Co., 7 Ch. 134.
Barton's Case, 4 De G. & J. 46. ° Mcllvjraith v. Dublin Trunk Ry.
* Midland, etc. Ry. Co. v. Gordon, Co., 7 Ch. 134.
16 M. & W. 804. Cf. Ex parte Collum, 9 Eq. 236 ;
Cf. Van Allen v. Illinois Central Barton's Case, 4 De G. & J. 46.
R. R. Co., 7 Bosw. (N. Y.) 515.
200
§ 163-§ 260] SIGNERS OF INCORPORATION PAPER § 238
able by the bearer, a mercantile custom that it shall be deemed
negotiable will be respected by the courts, so that in a case of
fraudulent conversion the true owner cannot maintain an action
of trover against a bona fide purchaser.^ Even where the scrip is
declared to be " negotiable only by transfer on the books of the
company, and with the assent of this company first obtained
thereto," it has been held that the complete equitable title may
pass without the company's assent by an unrecorded transfer ; ^
but this doctrine as thus broadly stated may perhaps be ques-
tioned, the company's assent being made a condition precedent
to the passing of either legal or equitable title as against the
company itself. Ordinarily, any obligations which the scrip-
holder may undergo are escaped by a bona fide transfer of his
scrip.^ Sometimes so-called scrip-certificates are issued to actual
shareholders; but these instruments are in legal effect mere
share-certificates, and accordingly a transfer of such "scrip"
will not relieve the holder of the liabilities of a shareholder unless
the transfer has been made in the mode prescribed by law for
making an assignment of shares.*
§ 238-§ 248. AGREEMENTS MADE BY SIGNING INCORPORATION
PAPER.
§ 238. Peculiarity of such Agreements. — The second class
of agreements to take shares mentioned above' consists of
agreements entered into by subscribing the incorporation paper.
This class of agreements to take shares is peculiar in several
respects. All these peculiarities spring from the circumstance
that subscriptions of the incorporation paper are part of the
machinery provided by law for the organization of the com-
pany. Such subscriptions must, therefore, by force of the statute
have such operation as will enable them to discharge that
function. Even where the statute does not require or con-
' RumbcM V. Metropolitan Bank, Gordon, 16 M. & W. 804, holding
2 Q. B. D. 194. that the liabilities of the original
' Hubbard v. Manhattan Trust scripholder continue until the trans-
Co., 87 Fed. 51, 57-58 ; 30 C. C. A. feree of the scrip has been actually
520. registered as shareholder.
= Eustace v. Dublin Trunk By. * McEuen v. West London
Co., 6 Eq. 182. Wharves, 6 Ch. 655.
But see Midland, etc. By. Co. v. ' Supra, § 181.
201
§ 239 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
template that the subscribers of the incorporation paper shall by
subscription agree to take shares, still there is nothing illegal in
their doing so ; ' but in that case it would seem that no other
effect should be given to the subscription than attaches to
agreements to take shares made prior to incorporation otherwise
than by signing the incorporation paper.
§ 239. Withdrawal of Signer before Registration of Instru-
ment. — Before the paper is recorded, obviously any subscriber
may, with the consent of all his co-subscribers, retract or
cancel his subscription. Until registration, all is in -fieri? It
has been held, however, in some cases that without the unani-
mous consent of the subscribers one of their number cannot
withdraw even before the paper is recorded ; ' but in other cases,
the contrary has been held.* If it be law — and we shall see
that some authorities so hold — that a promise to take shares
in a company about to be formed cannot be retracted without
the consent of the other promoters, then a fortiori a subscriber
of an incorporation paper cannot revoke his agreement to become
a stockholder, even prior to the recording of the instrument.
Indeed, even if it be held that ordinarily a promise to- take
shares in a company to be subsequently incorporated is revo-
cable at the pleasure of the promisor, a different rule might
be applied where the promise is made by subscribing a docu-
ment which is to be recorded as the company's incorporation
paper.
§ 240. ESect of Altering Instrument before Registration with-
out Signer's Consent. — A material alteration in the paper
without the consent of one of the subscribers will no doubt re-
lease him,^ and may even have, the effect of vitiating the incor-
' Heaston v. Cincinnati, etc. R. R. burg, etc. R. R. Co., 78 Pa. St.
Co., 16 Ind. 275; 79 Am. Dec. 430; 465; Coppage v. Hutton, 124 Ind.
Dupee V. Chicago Horse Shoe Co., 401 (holding that where paper is
117 Fed. 40; 54 C. C. A. 426. required to be acknowledged, a per-
^ Cf. Squires v. Brown, 22 How. son who has signed but not ac-
Pr. (N. Y.) 35. knowledged it is not bound) ; Green^
' Hughes V. Antietam Mfg. Co., brier Industrial Exposition v. Rodes,
34 Md. 316, 328; Lake Ontario, etc. 37 W. Va. 738, 740; 17 S. E. 305
R. R. Co. V. Mason, 16 N. Y. 451. (same point as last case).
* Auburn Bolt Works v. Shultz, ' Greenbrier Industrial Exposi-
143 Pa. St. 256 ; Muncy Traction tion v. Rodes, 37 W. Va. 738 ; 17
Engine Co. v. Green, 143 Pa. St. S. E. 305.
269; 13 Atl. 747; Garrett v. DiUs- Cf. Felgate's Case, 11 L. T. 613.
202
§ 163-§ 260] SIGNERS OF INCORPORATION PAPER § 242
poration.' So, a person who signs a blank piece of paper and
above whose signature articles of incorporation are filled in is
not bound.^ Indeed, the cases go much further than this. For
if when the defendant signs the paper there is any material
blank which is afterwards filled up without his authority, he is
not bound.' And a blank in respect to any of the matters
required by the incorporation law to be stated in the paper is
deemed to be material.*
§ 241. EfEect o£ Registration without Signer's Authority. —
On the other hand it has been held that a person who signs
an incorporation paper for a certain number of shares will be
liable as a shareholder even though he intended that the instru-
ment should have the effect of an escrow merely, and although
it was recorded without waiting for performance of the condition.'
§ 242. Signer irrevocably bound when Instrument is duly re-
corded. — As soon as the incorporation paper, as signed, is
duly recorded, each subscriber is irrevocably bound to accept
the number of shares in respect of which he signed the same." In
order to complete his obligation, there is no need of acceptance
by the company or of any allotment of shares.' Whether or not
such a subscriber is an actual shareholder from the moment of the
incorporation of the company is a question which has received
consideration above.' The fact that some condition precedent
to incorporation, such as the filing of a certificate with the
secretary of state, is omitted so that the company never becomes
a corporation de jure will not, it has been held, release the sub-
scriber.' The company has no power to release a subscriber of
1 See supra, § 143. ' Evans' Case, 2 Ch. 427 ; Sidney's
' Bucher v. DiUsburg, etc. R. R. Case, 13 Eq. 228; Haggert Bros.
Co., 76 Pa. St. 306. Mfg. Co., 19 Ont. App. 582.
' Dutchess, etc. R. R. Co. v. » Supra, § 164.
MabbeU, 58 N. Y. 397 ; Consols Ins. Cf . Lord Lurgan's Case (1902), 1
Ass'n V. Newall, 3 Fost. & F. 130 Ch. 707, 709, where Buckley, J.,
(where the blank related to the said: "There is no executory con-
number of shares which the sub- tract which is subsequently exe-
Boriber was to take). cuted. There is no contract at aU
* Dutchess, etc. R. R. Co. v. until the moment when the corporar-
Mabbett, 58 N. Y. 397. tion and the character of member-
= Rehbein v. Rahr, 109 Wise. 136 ; ship in the signatories to the memo-
85 N. W. 315. See supra, § 129. randum come simultaneously into
* In addition to cases cited ipfra, existence."
see Rathbone v. Ayer, 105 N. Y. » McCarter v. Ketcham, 72 N. J.
Supp. 1041. Law 247 (headnote inadequate);
203
§ 243 OBGANIZATION AND ISSUE OF SHAKES [ChAP. Ill
the incorporation paper from this obhgation to take shares
therein ; ' and consequently even a subscriber who has been
permitted to sever his ostensible connection with the company
and has been treated for years as if he were not a member, is
nevertheless still bound by his obligation to take the shares.^ If,
however, the company has issued the whole of its authorized
capital to other persons, then the subscriber of the incorporation
paper is released from his obligation to take shares.' This is
either because the company is not in a position to carry out its
correlative obligation to issue the shares, or because the shares
which the subscriber agreed to take may be deemed to have been
virtually transferred by him to the persons to whom the company
allotted them.^
§ 243. Whether Signer can avoid Subscription for Fraud. —
An agreement to take shares entered into by executing the
incorporation paper of a projected company cannot, at least
in England, be rescinded for fraud on the part of the pro-
moters.* For if it could, the substratum of the company would
be cut away; and as there might then be less than 'the
minimum number of corporators required by the statute, the
incorporation might be vitiated. Hence, for the protection of
innocent persons who may deal with the company, it is neces-
sary to compel the corporators to take the shares in spite of the
fraud by which they were induced to do so.
62 Atl. 693 ; McCarter v. Ketcham Rep. 2083 (holding that where cer-
(N. J.), 67 Atl. 610 (headnote in- tain members of a company sub-
adequate) ; Cayuga Lake R. R. Co. scribe for all the capital of a new
V. Kyle, 64 N. Y. 185. Cf. infra, corporation with the intention of
§ 260. distributing it -pro rata among the
' London & Provincial Cool Co., other members of the old company,
5 Ch. D. 525; Ex parte Watson, 54 any of those other members who
L. T. 233. subsequently agree with the new
^ Sidney's Case, 13 Eq. 228; Ex company to take their proportion
parte Watson, 54 L. T. 233; Scott- of its capital are bound by their
ish Security Co.'s Rec'r v. Storks subscription).
(Ky.), 78 S. W. 455 (he^-dnote in- * But, as to this theory of implied
adequate) ; 25 Ky. Law Rep. 1722 ; transfer, see Ex parte Watson, 54
Haggert Bros. Mfg. Co., 19 Ont. App. L. T. 233. See also infra, § 869.
582. ^ Lord Lurgan's Case (1902), 1
But see O'Brien v. FuLkerson, 75 Ch. 707.
Mich. 554 ; 42 N. W. 979. But see Wert v. CrawfordsvUle,
^ Mackley's Case, lCh.I>.2i7. etc. Turnpike Co., 19 Ind. 242;
Cf. Somerset Nat. Banking Co. v. Metropolitan Lead & Zinc Co. v.
Adams, 72 S. W. 1125; 24 Ky. Law Webster, 193 Mo. 351; 92 S. W. 79.
204
f 163-§ 260] SIGNERS OF INCORPORATION PAPER § 245
§ 244-§ 248. Obligations of Subscriber in other Respects.
§ 244. In general. — The obligation of subscribers of an
incorporation paper, in the absence of special arrangement, is
to pay the par value of the shares for which they subscribed, in
instalments when called in by the directors. In other words,
the obligation is the same as that which, in the absence of special
agreement, attaches to any other shareholder. On the other
hand, the fact that the company may require from other persons
who agree to become shareholders a payment on allotment does
not oblige the directors to exact a like payment from the signa^
tories of the incorporation paper on the allotment to them of the
shares in respect of which they signed that instrument.'
§ 245. Special Agreements with Company as to Time and
Mode of Payment. — Although frima facie the obligation of
signatories of the incorporation paper is to pay for the shares
they have agreed to take in cash on call by the directors, yet the
time and mode of payment may be regulated by agreement
entered into between the corporation and the signatory. For
example, in the absence of prohibitory statutes, the company
may agree with the subscriber that payment shall be made by
transfer of property — lands, chattels, good will, etc. — in lieu
of cash; and a transfer in accordance with such agreement,
unless it be impeachable for fraud, will completely satisfy the
signatory's obligation.^ A statute, however, which requires
shares to be paid for in cash unless a contract stipulating for
some different mode of payment shall have been recorded prior
to their issue has been held to necessitate in all cases payment
in cash by subscribers of the incorporation paper ; ^ for, it
Cf. Squires v. Brown, 22 How. Pr. 1041 (where the valuation of prop-
(N. Y.) 35; Miller v. Wild Cat erty taken in payment was held to
Gravel Road Co., 57 Ind. 241. be unreasonably excessive and
' Alexander v. Automatic Tele- fraudulent).
phone Co. (1899), 2 Ch. 302. ' Jarvis's Case (1899), 1 Ch. 193
' Drummond's Case, 4 Ch. 772 ; (semble) ; Dalton Time Lock Co. v.
Pell's Case, 5 Ch. 11; Baglan Hall Dalton, 66 L. T. 704; Ebenezer
Colliery Co., 5 Ch. 346; Jones's Timmins & Sons, Ld. (1902), 1 Ch.
Case, 6 Ch. 48; Maynard's Case, 238.
9 Ch. 60. Cf . Fothergill's Case, 8 Ch. 270 ;
Cf. Dieterle v. Ann Arbor Paint, Re Archibald D. Ddwney, L't'd, 83
etc. Co., 107 N. W. 79; 143 Mich. L. T. 47.
416; Rathbone v. Ayer, 105 N. Y.
205
§ 246 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
was reasoned, the shares subscribed for in that instrument are
deemed to be issued at the very moment of incorporation ' so
that in the nature of things no contract stipulating for pay-
ment otherwise than in cash could be registered antecedent to
the issue.
§ 246. Whether Shares allotted and paid for after Incorpora-
tion satisfy ObUgation incurred by signing Incorporation Paper.
— Where, after the company is organized, a signatory of the
incorporation paper applies for shares in the ordinary way, and
the same are allotted to him, if it be proved even by parol that
the shares so allotted were intended by all parties to include,
or be the same as, the shares which the applicant agreed to take
by subscribing the incorporation paper, effect will be given to
such intention; and the allotment of the shares so applied for
will be held to satisfy the obligation created by signing the incor-
poration paper.^ Indeed, it has been said that in such a case
the burden of proof is on the company or its liquidator or receiver
to show that there were really allotted to the subscriber, and that
the latter did accept additional shares besides those in respect
of which he signed the incorporation paper.^ Where in sign-
ing the incorporation paper, the signatory was really acting on
behalf of a partnership of which he was a member, his obligation
is satisfied by an allotment of the stipulated number of shares
to that firm.*
On the other hand, the obligation of the signatory is to take
shares from the company, and cannot be satisfied by taking
shares by transfer from another shareholder or even by taking,
as the nominee of another person, shares which the latter has
contracted with the company to take."
§ 247. Whether Subscription for Preferred Shares satisfied
by taking and paying for Common Shares. — Where a signatory of
an incorporation paper agrees by his subscription to take pref-
erence shares, his obligation, it has been held, may be satisfied
by taking with the company's assent an equal number of ordi-
' See supra, §164, where the But see Cume's Case, 11 W.R. 46.
correctness of this premiss is ques- ' Maynard's Case, 9 Ch. 60, 68,
tioned. per Mellish, L. J.
2 GUman's Case, 31 Ch. D. 420; * Dunster's Case (1894), 3 Ch.
Drummond's Case, 4 Ch. 772 ; Pell's 473.
Case, 5 Ch. 11 ; Maynard's Case, 9 ° Forbes & Judd's Case, 5 Ch.
Ch. 60. 270. Cf. MigoUi's Case, 4 Eq. 238.
206
§ 183-§ 260] SIGNERS OF INCORPORATION PAPER § 248
nary shares.' The ratio decidendi of this case — to wit, that the
Companies Act does not require any distinction to be made in
the memorandum of association or incorporation paper between
preferred and ordinary shares, and that the instrument may be
altered in respect to matters not required by the statute to be
mentioned therein — is not in accord with the later cases ; ' but
nevertheless it is submitted that the actual decision is sound and
would be followed.
§ 248. Subscription of Incorporation Paper for Shares to be
issued as fully paid without Payment in full. — It is true, that
a corporation's executory promise to issue paid-up shares cannot
be satisfied by the issue of shares which in law are not fully paid.^
Nevertheless, where an incorporation paper states that the shares
which the subscribers agree to take shall be credited as fully
paid although no money or money's worth may have been given
therefor, it would seem clear that the signatories are bound not-
withstanding to pay for the shares which by their subscription
of the instrument they agree to take.* However, where a person
subscribes an incorporation paper for some shares which shall
be issued subject to the usual obligation of payment of their par
value in cash, and also for other shares which, it is stated, shall
be issued as fully paid, it has been held in England that he can-
not be required to pay 'for the latter shares.^ The reason for
this distinction, if indeed it be sound, must be that the sub-
scriber can perform his function as a corporator if he be bound
to take and pay for any shares, and that the agreement to take
the additional shares to be issued as paid-up is surplusage. How-
ever, the soundness of the distinction may be questioned. For
instance, in Pennsylvania where a subscriber to an incorpora-
tion paper appeared on the face of the instrument to have
subscribed for 100 shares, it was held that in spite of a contem-
poraneous oral agreement that all except five shares should be
turned back to the company as "treasury stock" without any
payment by the subscriber, he was nevertheless bound to pay
for the full one hundred shares, and that too although the suit
did not appear to be prosecuted for the benefit of creditors, and
' Duke's Case, 1 Ch. D. 620. * Baron de Beoille's Case, 7 Eq. 11
' Supra, § 120, § 144. (semble). Cf. Migotti's Case, 4 Eq.
• Infra, § 778, § 789. See also 238.
supra, § 184 and § 233. " Baron deBeville's Case, TEq. 11.
207
§ 249 OEGANIZATION AND ISSUE OF SHARES [ChAP. Ill
although there was no allegation of a deficiency of assets ; ' but,
certainly, this decision was based more upon the peculiar phrase-
ology of the Pennsylvania statute than upon general principles
of law applicable to subscriptions to shares made by signing an
incorporation paper.
§ 249-§ 260. Agreements made prior to Incorporation other-
wise than by signing the Incorporation Paper.
§ 249. Nature and ESect in general — Revocability. — The
third and last class of agreements to take shares comprises
agreements made with or between promoters prior to the incor-
poration of the company otherwise than by subscribing the
incorporation paper.^ Agreements of this sort differ from agree-
ments made by signing the incorporation paper in that they
are not so clearly or necessarily part of the statutory scheme
for the organization of the corporation.^ If they are to be gov-
erned by the general principles of the law of contracts, the com-
pany upon attaining corporate existence has no right to enforce
them unless they first be adopted or accepted by it. To be
sure, it is sometimes thought that the principle prevailing in some
of the United States, which permits the beneficiary of a contract
to which he is a stranger to maintain an action thereon, is broad
enough to entitle the corporation to enforce a promise made to
its promoters to take shares of its capital stock.* But the cor-
poration, while undoubtedly deriving "benefit from the contract,
is certainly not the sole beneficiary thereof, since the other share-
holders and promoters have a great interest in its enforce-
ment ; and the better view is that the corporation has no right
to enforce such a contract.^ Like other contracts made by pro-
moters on behalf of a corporation to be subsequently organized,
'■ Oreater Pittsburg Real Estate Co. * Marysville, etc. Co. v. Johnson,
V. RUey, 210 Pa. St. 283; 59 Atl. 93 Cal. 588, 548; 29 Pac. 126; 27
1068. Am. St. Rep. 215 ; Glenn v. Busey,
» As to the liability of promoters 5 Mack. (D. C.) 233, 238-239; 1
to the subscriber on such contracts, Morawetz on Priv. Corps., § 50.
see Feitel v. Dreyfous (La.), 42 So. Cf. Hamilton, etc. Co. v. Rice, 7
259; 117 La. 756 (where the pro- Barb. (N. Y.) 157; Eastern Plank
moters were exonerated from lia^ Road Co. v. Vaughan, 14 N. Y. 546,
bility, because they had not accepted 555. But see 2 Clark & Marshall
the subscriber's application). on Priv. Corps., § 443, p. 1379.
' Cf. Peninsidar Ry. Co. v. Dun- ^ " Lake Ontario Shore R. R. Co. V.
can, 28 Mich. 130. Curtiss, 80 N. Y. 219.
208
§ 163-§ 260] SUBSCRIPTIONS BEFORE INCORPORATION § 249
such an agreement may undoubtedly operate as an ofPer which
the company when incorporated may accept ; ' but if this be
its only operation as regards the corporation, it is revocable by
the subscriber so far as the corporation is concerned at any
time before the company is incorporated and accepts the offer.
In England, there seems to be no doubt that this is the law
with respect to corporations formed under the Companies Acts ; ^
and the same rule is supported by the weight of authority in the
United States.' The right of revocation exists although the sub-
scription is under seal, so that lack of consideration would be
no defence.* Withdrawal is allowed not only because the sub-
' Athol Music Had Co. v. Carey,
116 Mass. 471 ; San Joaquin, etc.
Co. V. Beecher, 101 Cal. 70; 35
Pao. 349 ; Buffalo, etc. B. B. Co. v.
Clark, 22 Hun (N. Y.) 359; Biche-
lieu Hotel Co. v. International, etc.
Encampment Co., 140 111. 248; 29
N. E. 1044; 33 Am. St. Rep. 234;
Yonkers Gazette Co. v. Taylor, 30
N. Y. App. Div. 334 ; 51 N. Y. Supp.
969 ; Bryant's, etc. Mill (fo. v. Felt,
87 Me. 234; 32 Atl. 888; 47 Am.
St. Rep. 323; 33 L. R. A. 593;
Badger Paper Co. v. Bose, 95 Wise.
146, 151-152; 70 N. W. 302; 37
L. R. A. 162 ; Avon Springs Sanita-
rium Co. V. Weed, 104 N. Y. Supp. 58.
But cf. 1 Morawetz on Priv.
Corps., 2d ed., § 49, where the
opinion is expressed that a contract
to subscribe for shares in a corpora-
tion to be subsequently formed,
contemplates that the parties before
becoming shareholders shall per-
form a further act, namely, execute
the statutory contract of member-
ship by subscription upon the stock-
books, and therefore does not con-
stitute an offer which the corpora-
tion can accept. Sed quoere. Cf.
Coyote, etc. Co. v. Buble, 8 Oreg.
284; Coppage v. Hutton, 124 Ind.
401 ; 24 N. E. 112 ; 7 L. R. A. 591 ;
Troy, etc. B. B. Co. v. Tibbits, 18
Barb. (N. Y.) 297 ; Sedalia, etc. By.
Co. V. Wilkerson, 83 Mo. 235 ; Yon-
kers Gazette Co. v. Taylcrr, 30 N. Y.
App. Div. 334 ; 51 N. Y. Supp. 969 ;
Woods Motor Vehicle Co. v. Brady,
39 N. y. Misc. 79 ; 78 N. Y. Supp.
203; Cleavelavd v. MuUin, 96 Md.
598 ; 54 Atl. 665
In Lake Ontario Shore B. B. Co.
V. Curtiss, 80 N. Y. 219, an agree-
ment between third persons that
each should subscribe to stock in a
corporation then fonning was held
not to contemplate acceptance by
the company and not to be enforce-
able at its suit.
^ So in Canada. London Speaker
Printing Co., Pearce's Case, 16 Ont.
App. 508.
' Poughkeepsie, etc. Co. v. Griffin,
24 N. Y. 150; Bryant's, etc. Mill
Co. V. Fdt, 87 Me. 234 ; 32 Atl. 888 ;
47 Am. St. Rep. 323; 33 L. R. A.
593; Hudson Real Estate Co. v.
Tower, 156 Mass. 82 ; 30 N. E. 465 ;
32 Am. St. Rep. 434; s. c, 161
Mass. 10; 36 N. E. 680; 42 Am.
St. Rep. 379 ; Stuart v. VaUey R. B.
Co., 32 Gratt. (Va.) 146; Carter,
etc. Co. v. Hazzard, 65 Minn. 432;
68 N. W. 74 ; Sedalia, etc. By. Co.
v. Wilkerson, 83 Mo. 235 (where the
subscriber died before the company
was incorporated).
Cf. Minneapolis Threshing Co. v.
Davis, 40 Minn. 110; 41 N. W.
1026; 3 L. R. A. 796; 12 Am. St.
Rep. 701.
* Hudson Beal Estate Co. v.
Tower, 156 Mass. 82, 84 (headnote
inadequate); SO N. E, 465; 32
Am. St. Rep. 434.
VOL. I. — 14
209
§ 250 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
scriber's promise is without consideration, but also for the more
fundamental reason that there is no promisee in existence. The
retraction may give a right of action to the other promoters with
whom the agreement was made, if a contract inter sese was in-
tended; but this right of an action of the promoters or co-
subscribers does not inure to the benefit of the corporation.
The withdrawal need not be communicated to all the promoters
or co-subscribers, but is complete upon communication to the
chief officer of the preliminary organization preparatory to
incorporation." According to the principle that the ante-incor-
poration agreement operates only as an offer, the company upon
its incorporation is not bound to allot the shares in accordance
therewith.'
§ 250. Doctrine that Ante-incorporation Subscriptions are Ir-
revocable. — On the other hand, all modern corporations derive
their existence, directly or indirectly, from statutes; and if
the legislature in those statutes should expressly or impliedly
enact that promises to take shares in a corporation to be sub-
sequently formed should be incapable of revocation by the
promisor, effect must of course be given to 'that legislative in-
tent. The question is, therefore, whether the courts can discern
such an intention in the incorporation laws. In the case of
special acts of incorporation, this is more easily done. For ex-
ample, even in England, a special act incorporating certain
named individuals and all other subscribers to the capital of the
projected company has been held to make all subscribers mem-
bers of the company, even though some of them had attempted
to withdraw their subscriptions before the passage of the act.*
In the case of general laws or enabling acts, the intention that
ante-incorporation subscriptions to the capital shall be binding
is not so readily discernible. In England, for instance, under
the Companies Acts, and in some of the United States under
the general incorporation laws, such a subscription would, as
stated above, be held to be revocable at the pleasure of the sub-
' Hudson Real Estate Co. v. ' Merrick v. Consumers Heat, etc.
Tower, 161 Mass. 10; 36 N. E. 680; Co., Ill 111. App. 153; Starrett v.
42 Am. St. Rep. 379. The part of Rockland, etc. Ins. Co., 65 Me. 374
prudence would be to communicate (headnote inadequate),
the acceptance to the oflBcers of ^ Kidwelly Co. v. Rahy, 2 Price
the corporation as 'soon as it is 93. Cf. Burke v. Lechmere, L. R. 6
formed. Q. B. 297.
210
§ 163-§ 260] SUBSCRIPTIONS BEFORE INCORPORATION § 251
scriber. On the other hand, inasmuch as such subscriptions
preliminary to incorporation under general laws are doubtless
contemplated by the incorporation acts, and inasmuch as the
process of incorporation is undoubtedly somewhat facilitated
by holding them to be irrevocable,' one need not be disposed to
quarrel with a decision that they cannot be revoked without the
unanimous consent of the co-subscribers.^ This result is, how-
ever, more often reached upon the more questionable ground
that the subscriptions constitute contracts of the several pro-
moters inter sese which may be availed of by the corporation as
the beneficiary notwithstanding an attempt to revoke.^
§ 251. Subscriptions before Incorporation as Powers of Attorney
to apply for and accept Shares in Corporation. — A subscription
to shares in a corporation to be formed may take the shape
of, or amount to, a delegation of authority to an agent to
apply for and accept the shares when the company shall have
been incorporated.* This form is often adopted, especially in
England, in the case of underwriting agreements made before
the incorporation of the company.^ In some cases, such powers
of attorney may be made irrevocable.' Somewhat similar to
this is the plan sometimes adopted where several persons bind
themselves to pay the amount of their subscriptions to a desig-
nated person as trustee, who is to turn the money over to the
corporation when incorporated in exchange for its shares. In
such cases, the trustee may maintain an action against any sub-
scriber who refuses to pay.'
' Cf. LowviUe, etc. R. R. Co. v. ' See supra, § 249.
EUiot, 101 N. Y. Supp. 328. Cf. Cleaveland v. MuUin, 96 Md.
' Johnson v. Wabash, etc. Co., 698 ; 54 Atl. 665 ; Knox v. ChUders-
16 Ind. 389 (but with this case com- burg Land Co., 86 Ala. 180, 183 ;
pare Coppage v. Button, 124 Ind. 5 So. 578.
401) ; Nebraska Chicory Co. v. * Cf. Ottawa Dairy Co. v. Sorley,
Lednicky (Nebr.), 113 N. W. 245. 34 Can. Sup. Ct. 508 (where the agent
. Cf. Peninsular Ry. Co. v. Duncan, was held to have exceeded his au-
28 Mich. 130. thority so that no contract was
But if a subscription contains formed -between the principal and
special terms not provided for in the the company),
incorporation law, then very clearly ° See infra, § 443-§ 445.
it can have no other effect than a " Infra, § 443.
revocable offer until the company ' Cf. West v. Crawford, 80 Cal.,
is incorporated and accepts it. 1 19; 21 Pac. 1123. As to the right
Morawetz on Priv. Corps., 2d ed., of the corporation to recover money
§ 83, § 86 ; Junction R. R. Co. v. collected by such a trustee, see infra,
Reeve, 15 Ind. 236. § 255.
211
§ 252 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
§ 252. Doctrine that Subscriptions made before Incorporation
without subscribing: Incorporation Paper are devoid of all legal
Efiect. — Some cases proceed upon the ground that the incor-
poration laws contemplate no subscriptions prior to incorpora-
tion made otherwise than by signing the incorporation paper
and that therefore such ante-incorporation subscriptions must
be wholly devoid of legal effect.' But as already intimated
such decisions are contrary to the weight of authority,^ inas-
much as such subscriptions prior to incorporation should have
at least as much effect as other contracts made by promoters
on behalf of a prospective corporation. The question is, how-
ever, altogether one of statutory construction so that general
rules can do no more than determine the attitude which the
com-ts should assume in construing the statute.
§ 253. Attempts of Promoters to release Subscriber. — All the
authorities would agree that in any case after the company has
been incorporated and the contract of subscription has become
binding between it and the subscriber, the promoters to whom
the subscription was made before the incorporation have no
longer any authority to release the subscriber.'
§ 254. Requisite Definiteness in Subscription . before Incor-
poration. — In order that an ante-incorporation subscription
should have any effect, it must specify the number and par value
of the shares subscribed for.* In other words, it must be suffi-
ciently definite to constitute a contract.* As the company is
still in fieri and its constitution not yet settled, greater particu-
larity is required than in the case of ah offer to take shares in an
existing company, in which case, it would be unnecessary to
state, for instance, the par value of the shares.
§ 255. Right of Corporation to Deposits paid Promoters. — A
person may contract with a promoter of a projected corpora-
' Poughheepsle, etc. Plank Road Water Co. v. Beecher, 101 Cal. 70;
Co. V. Griffin, 24 N. Y. 150 ; Coppage 35 Pac. 349 ; International Fair, etc.
V. Button, 124 Ind. 401; 24 N. E. Ass'n v. Walker, 83 Mich. 386; 47
112; 7 L. R. A. 591; Speight Mfg. N. W. 338; Nebraska Chicory Co.
Co., Boidibee's Case, 16 Ont. App. v. Lednicky, 113 N. W. 246 (Nebr.).
608, 519. See supra, § 249, § 250.
Cf. Sedalia, etc. Ry. Co. v. Wilker- ' Balfour v. Baker, etc. Co., 27
son, 83 Mo. 235 ; Monterey, etc. R. R. Oreg. 300 ; 41 Pac. 164.
Co. V. HUdreth, 53 Cal. 123. * Woods Motor Vehicle Co. v.
' Peninsular Ry. Co. v. Duncan, Brady, 181 N. Y. 146; 73 N. E. 674.
28 Mich. 130 ; San Joaquin, etc. ° Cf. Avon Springs Sanitarium Co.
212
§ 163-§ 260] SUBSCRIPTIONS BEFORE INCORPORATION § 258
tion to subscribe to shares therein; and, independently of the
question whether the corporation may take advantage of such
contracts and hold the subscriber, any deposits .paid by the sub-
scriber to the promoter are clearly impressed with a trust in
favor of the company which may accordingly recover them from
the promoter as money had and received to its use.'
§ 256. ESect of Failure of Company to allot Shares within
Reasonable Time. — Ante-incorporation subscribers to the capital
of a company will be released unless an allotment of the shares
subscribed for be made within a reasonable time after incor-
poration. This is undoubtedly true where such subscriptions
are deemed mere oifers ; ^ and it is submitted that the same
rule should hold good where they are held to be irrevocable by
the subscriber.'
§ 257. Subscription voidable for Fraud of Promoter. — Upon
whatever theory subscriptions to the capital of a projected com-
pany are to be enforced — whether because of adopition or
acceptance by the company after its incorporation, or because
they are deemed binding in the first instance — they are never-
theless subject to rescission for fraud or misrepresentation of
the promoters to the same extent as if the company had been
already incorporated.*
§ 258. Effect of Departures from Original Scheme. — More-
over, any material departures from the plan of the company
as contemplated when the subscription was made will release
the subscriber.^ For example, where the prospectus on the
V. Weed, 104 N. Y. Supp. 58 (where Stewart v. Rutherford, 74 Ga. 435 ;
the subscription was held on de- 1 Morawetz on Priv. Corps., 2d ed.,
murrer sufficiently definite) ; Ne- § 102, p. 101.
maha Coal, etc. Co. v. Settle, 54 But see Shick v. Citizens' Enter-
Kan. 424; 38 Pac. 483; Peninsur- prise Co., 15 Ind. App. 329, 337-338;
lar Ry. Co. v. Duncan, 28 Mich. 57 Am. St. Rep. 230.
130, 145. See also supra, § 217.
' San Joaquin, etc. Co. v. West, ^ Stern v. McKee, 70 N. Y. App.
94Cal. 399; 29 Pac. 785. Div. 142; 75 N. Y. Supp. 157;
See infra, § 399. West End, etc. Co. v. Nash, 51 W.
^ Ba%'s Case, 3 Ch. 592 ; Carter, Va. 341; 41 S. E. 182; Middlecoff
etc. Co. v. Hazzard, 65 Minn. 432, Hotel Co. v. Yeomans, 89 111. App.
438 ; 68 N. W. 74. 170 ; Smith v. Burns Boiler
' But see Burke v. Lechmere, & Mfg. Co. (Wise), 111 N. W.
L. R. 6 Q. B. 297. 1123; Knox v. ChUdersburg Land
* Zang v. Adams, 23 Colo. 408; Co., 86 Ala. 180; 5 So. 578
48 Pac. 509 ; 58 Am. St. Rep. 249 ; (change in law as to method of
213
§258
ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
faith of which the subscription was made states as the ob-
ject of the company the working of a particular established
mine in Russia, the fact that the incorporation paper when re-
corded justifies the working of any mine in Russia releases the
subscriber.' A change in the period to be prescribed for the
termination of the corporate existence will release a person who
has agreed to take shares.^ Prima facie, a domestic corpora-
tion is deemed to have been contemplated ; and therefore in the
absence of some provision showing that a foreign corporation
was intended, a foreign corporation cannot claim the benefit of
the subscription.^ But a mere change in the name of the pro-
jected company will have no such effect ; ■" and any change which
is immaterial, and merely expresses w;hat would otherwise
be implied, does not release prior subscribers!^ In respect to
the necessity for prompt repudiation, etc., these cases of depar-
payment for stock, held sufficient
to release subscriber).
And see Shick v. Citizens' Enter-
prise Co., IS Ind. App. 329, 337-338;
57 Am. St. Rep. 230.
And as to cases of incorporation
by special act, see Midland, etc.
Ry. Co. V. Gordon, 16 M. & W. 804 ;
Nixon V. Brownlow, 3 H. & N. 686
(where the amount of the capital
and number and amount of the
shares were altered).
1 Stewart's Case, 1 Ch. 574;
Webster's Case, 2 Eq. 741.
Cf. Lawrence's Case, 2 Ch. 412;
Peel's Case, 2 Ch. 674 ; Wilkinson's
Case, 2 Ch. 536; Woods Motor
Vehicle Co. v. Brady, 181 N. Y. 145 ;
73 N. E. 674 (offer to take shares in
company to deal in motor vehicles;
company afterwards incorporated to
manfacture and deal in automo-
biles) ; Smith v. Burns Boiler &
Mfg. Co. (Wise), 111 N. W. 1123
(offer to take shares in company for
manufacturing boilers, corporation
formed with power to engage in gen-
eral "merchandising " and general
manufacturing) ; Dorris v. Sweeney,
60 N. y. 463 (offer to take shares
in company for worldng a certain
patent for preserving fruits, company
formed for manufacture of preserved
fruits and canning of fruits).
But see Haskell v. Worthington,
94 Mo. 560; 7 S. W. 481 (where it
was said that a subscriber would not
be released because incorporation
paper when recorded would author-
ize the company to transact business
in addition to that contemplated by
the subscription).
' Greenbrier Industrial Exposi-
tion V. Rodes, 37 W. Va. 738; 17
S. E. 305.
' Cf. Olympia Mining Co. v.
Kerns (Idaho), 91 Pac. 92.
* Yonkers Gazette Co. v. Taylor,
30 N. Y. App. Div. 334; 51 N. Y.
Supp. 969.
Cf. Haskell v. Worthington, 94
Mo. 560; 7S. W. 481.
^ Union Agricultural, etc. Ass'n v.
NeUl, 31 Iowa 95 ; Comanche Cotton
OU Co. V. Browne (Tex.), 92 S. W. 450
(company projected to operate a cot-
ton seed oil mill, amendment ex-
pressly authorizing the operation of
cotton-gins as feeders for the mill
immaterial) ; LowvUle, etc. R. R. Co.
V. Elliot, 101 N. Y. Supp. 328 (com-
pany projected to build a railway;
company incorporated to " build,
maintain, and operate" a railway).
214
§ 163-§ 260] SUBSCRIPTIONS BEFORE INCORPORATION § 260
tures from the original scheme or project are assimilated to cases
of fraud or misrepresentation.' But the fact that the subscriber
attends a meeting of the corporation under the behef that it is
a mere meeting of the promoters called to consider the pro-
priety of accepting the incorporation paper as filed will not pre-
clude him from withdrawing.^ The departures from the original
scheme may be such as to justify the conclusion that the com-
pany which was actually formed was not that in which the sub-
scriber agreed to take shares; and in that case there would be
no contract at all.^ It is not necessary that the corporation
should be formed by parties to the subscription agreement.* ■
Unreasonable delay in the incorporation of the company is
equivalent to a substantial departure from the original project,
and will have the same effect in releasing a subscriber to the
shares.*
§ 259. Signer of a proposed Incorporation Paper not bound
if Company incorporated under different Instrument. — If a per-
son signs a document which is intended to operate as an incor-
poration paper, he cannot be held by a company which is
organized under a different paper executed by other persons."
In other words, if a person intends to become a corporator, he
cannot without Sbme further act or offer on his part be held as
a subscriber to the capital if the company is incorporated by
other persons.
§ 260. Whether De Facto Corporation can enforce Subscrip-
tion. — Even where the doctrine of de facto corporations is rec-
' yStrm Ins. Co. (1871), Ir. Rep. 181 N. Y. 145; 73 N. E. 674; Smith
6 Eq. 298 ; Osborne Park Land & v. Burns BoUer & Mfg. Co. (Wise),
Investment Co., 18 Vict. L. R. 515. Ill N. W. 1123.
See also Nickum v. Bwrkhardt, 30 2 Clark & Marshall on Priv.
Oreg. 464 ; 47 Pac. 788 ; 48 Pac. 474 ; Corps., § 439 d.
60 Am. St. Rep. 822. Cf. Ship's Case, 2 De G. J. & S.
But cf. Ship's Case, 2 De G. J. & 544.
S. 544. See also Accidental, etc. Ins.
^ Smith V. Burns BoUer & Mfg. Corp. v. Davis, 15 L. T. 182 (where
Co. (Wise), 111 N. W. 1123. the departure was held not to be of
' Richmx>nd Factory Ass'n v. this character).
Clarke, 61 Me. 351 (where the sub- ' Avon Springs Sanitarium Co.
scription contemplated incorpora- v. Weed, 104 N. Y. Supp. 58.
tion under a general law and the = Patterson v. Turner, 3 Ont. L.
company which was actually formed Rep. 373.
was incorporated by special act) ; " Richmond Street B. R. Co. v.
Woods Motor Vehicle Co. v. Brady, Reed, 83 Ind. 9.
215
§ 260 ORGANIZATION AND ISSUE OF SHARES [ChAP. Ill
ognized, a person who subscribes to shares of stock before
incorporation is deemed to contemplate incorporation de jure;
and hence according to the weight of authority, he cannot be
held to his subscription by an organization which has a mere
de facto existence.'
'■ Dorris v. Sweeney, 60 N. Y. 463 ; Marshall on Priv. Corps., § 462 e, p.
Shick V. Citizens' Enterprise Co., 15 1440.
Ind. App. 329 ; 57 Am. St. Rep. 230. Cf. DeWitt v. Hasting, 69 N. Y.
Williams v. Citizens Enterprise Co., 518.
153 Ind. 496 ; 55 N. E. 425 ; Capps But as to subscriptions made
V. Hastings Prospecting Co., 40 Nebr. by signing the incorporation paper,
470 ; 58 N. W. 956 ; 24 L. R. A. 259 ; see supra, § 242.
42 Am. St. Rep. 677; 2 Clark &
216
CHAPTER IV
IRREGULAR INCORPORATION — PROOF OF INCORPORATION
Section
Confusion in authorities 261
Scope of treatment 262
Diminishing importance of subject 263
Non-compliance with directory provisions — substantial compliance
with law 264
Breaches of conditions subsequent 265
Certificates by public officers to the regularity of incorporation . . 266-270
In general 266
Whether certificate conclusive evidence of regularity of proceed-
ings — revocation of certificate 267
Statutes making certificate conclusive evidence of regularity 268-270
English cases 268
American cases 269
Whether certificate precludes direct attack by the state upon
vaUdity of incorporation • 270
Proof of incorporation 271-283
Statement of question 271
Necessity for raising issue by the pleadings 272
Direct proof of incorporation 273
Indirect or circumstantial evidence of incorporation 274
Secondary evidence of contents of incorporation paper . . . 275
Statute recognizing corporate existence of defectively incorpo-
rated company 276
Admissions of incorporation 277
Estoppel to deny incorporation 278-282
Estoppel by record 278
Estoppel by deed 279
Estoppel in pais 280-282
Estoppel of individual to deny the incorporation . . . 280
Estoppel of supposed corporation to deny its own
existence 281
Estoppel by dealing with supposed corporation . . . 282
Disproof of incorporation 283
Corporations de facto 284-292
Whether irregular incorporation proceedings can give rise to a
corporation de facto 284
Circumstances necessary to create a corporation de facto . 285-290
In general 285
Requirement of a law under which the corporation might be
formed . .... 286
Requirement of bona fides in attempting to comply with law 287
Requirement of substantial or colorable compliance with
law 288
What amounts to colorable compliance 289
Requirement of user of corporate privileges 290
217
§ 261 IRREGULAR INCORPORATION [ChAP. IV
Corporations de facto {continued) Section
Nature of de facto corporations 291-292
De facto corporations distinguished from corporations by
estoppel . . 291
Powers and rights of corporation de facto 292
Rights and liabilities of members of defectively incorporated com-
pany 293-294
Liabilities to third persons 293
Rights and liabiUties inter sese 293a
Rights against third persons 294
§ 261. Confusion in Authorities. — Few topics in the Ameri-
can law of corporations are more confused than the subject of
irregular or defective incorporation — of the consequences of
defects, or lack of compliance with law, in the terms of the in-
corporation papers or in its execution or recording, or a non-
observance of statutory requirements in respect to matters
preceding or attending the incorporation. What are the conse-
quences of such defects ? Do they render the attempted incor-
poration wholly nugatory? Or does the association in spite of
such irregularities become a corporation de facto whose exist-
ence can be questioned only on direct proceedings instituted by
the sovereign ? If a negative answer be given to this last ques-
tion, may the persons who compose the association or who deal
with it be estopped under some circumstances to deny its cor-
porate existence ? Upon these and similar questions, the law in
the United States consists in a wilderness of, often, irreconcilable
decisions.'
§ 262. Scope of Treatment. — In the present chapter, we
shall endeavor at least to clear away some of the undergrowth
that obscures the approaches to the forest, without undertaking
the herculean task of opening a pathway through the jungle
itself. This plan of dealing with the subject is believed to be
most conducive to the elucidation of the matter. For wherever
the cases are so numerous and in such hopeless conflict as the
American decisions on the law of de facto corporations and of
corporations by estoppel, the most helpful and satisfactory treat-
ment of many particular features of the law must be confined
to the cases in some one state.
' For a thorough and scientific see articles by Professor E. H. War-
treatment of parts of the subject, ren, in 20 Harv. L. Rev. 456 and
with full citations of authorities, 21 Harv. L. Rev. 305.
218
f 261-§ 294] CONDITIONS SUBSEQUENT § 265
§ 263. Diminishing Importance of Subject. — The whole sub-
ject, one should observe, is of less importance than formerly.
For the more recent incorporation laws are so simple that the
irregularities or defects in the incorporation proceedings can
always be avoided by the merest tyro by the exercise of the
most ordinary care.
§ 264. Non-compliance with Directory Provisions — Substantial
Compliance with Law. — It should be premised that the non-
observance of provisions that can be deemed directory merely
is, properly speaking, no irregularity at all, and hence may be
entirely disregarded.' In determining whether or not a given
provision, should be construed as directory and not mandatory,
regard should be had to the purpose of the statute. Sub-
stantial compliance and not necessarily literal compliance even
with mandatory provisions is all that is requisite; and, if the
statute is substantially complied with, the company becomes a
corporation de jure as well as de facto? In other words, a mere
lack of literal compliance with the act is not deemed a defect or
irregularity in the incorporation.
§ 265. Breaches of Conditions Subsequent. — Moreover, where
a statute, in however mandatory terms, requires certain acts
to be done after the attainment of corporate existence, failure
to comply with that requirement will be merely a cause of
forfeiture, which, according to well-known principles, in the
absence of an express and emphatic statutory declaration to the
contrary, can be taken advantage of only by the state on a direct
proceeding instituted for that purpose.^ Thus, where a statute
provides that on registration of the incorporation paper, the sub-
' See Rose HUl, etc. Road Co. v. Rep. 172 ; State ex rel. Attorney-Gen-
People ex rel. Lawless, 115 111. 133; eral v. Wood, 13 Mo. App. 139.
3 N. E. 725; Judah v. Am. lAve ^ Murphy v. Wheatley, 102 Md.
Stock Ins. Co., 4 Ind. 333; Nev)- 501; 63 Atl. 62; Hammond v.
co?»b V. iSeed, 12 Allen (Mass.) 362, Straus, 53 Md. 1, 12; Baker v.
364 (headnote inadequate) ; Brairir- Adm'r of Backus, 32 111. 79 ; Shako-
tree Water Supply Co. v. Inhabitants pee Mfg. Co., 37 Minn. 91, 93 ; 33
of Braintree, 146 Mass. 482, 488 N. W. 219; County of Macon v.
(headnote inadequate) ; 16 N. E. 420. Shores, 97 U. S. 272, 277 ; Brovm v.
^ People ex rel. Bernard v. Cheese- Wyandotte, etc. Ry. Co., 68 Ark. 134 ;
man, 7 Colo. 376, 379; 3 Pac. 716; 56 S. W. 862; Merrick v. Reynolds
People V. Stockton, etc. R. R. Co., Engine, etc. Co., 101 Mass. 381 ;
45 Cal. 306; 13 Am. Rep. 178; Granby Mining Co. v. Richards, 95
People V. Montedto Water Co., 97 Mo. 106; 8S. W. 246; Hughesdale
Cal. 276; 32 Pac. 236; 33 Am. St. Mfg Co. v. Vanner, 12 R. I. 491;
219
§ 266 IRREGULAK INCORPORATION [ChAP. IV
scribers shall be incorporated, the non-observance of a require-
ment that a duplicate of the instrument shall be filed with the
secretary of state can be at most a cause of forfeiture, not to be
availed of collaterally.' So, a condition precedent to the right
to commence business may be a condition subsequent to
corporate existence.^ The matter of conditions subsequent to
incorporation relates in strictness to the dissolution of corpora-
tions, and to the termination of corporate existence ; and hence
any consideration of the subject in detail would be beyond the
scope of this treatise.
§ 266-§ 270. CERTIFICATES BY PUBLIC OFFICERS TO REGU-
LARITY OF INCORPORATION.
§ 266. In general. — Often, as shown above,^ the corpora^
tion laws provide that the incorporation paper shall be sub-
mitted to some public officer who is to determine whether or not
it complies with law. Sometimes, too, this ofiicer is required
to certify his determination upon the instrument. In England,
the document is submitted to the registrar of joint-stock com-
panies, who, if he approve the paper, records the same, and there-
upon issues a certificate, called a certificate of incorporation,
stating that the company has complied with the law and is duly
incorporated.* This name, certificate of incorporation, although
in itself appropriate enough, cannot conveniently be applied in
America to similar certificates, because in many states the in-
corporation papers are called certificates of incorporation. The
name, however, is immaterial: the nature of the instrument is
the same. The issuance of the certificate by the registrar or
other ofiicer charged with the duty, although it furnishes the best
and most convenient evidence of incorporation, is nevertheless
not ordinarily a condition precedent to incorporation.^
Harrod v. Hamer, 32 Wise. 162 ; Ry- 205 (headnote inadequate) ; Ham-
land V. HoUinger, 117 Fed. 216. mond v. Straus, 53 Md. 1, 16.
See also supra, § 137 and cases See also supra, § 177.
cited, and § 139. ' Supra, § 139-§ 142.
' Mokdumne HUl Mining Co. v. * Companjes Act, 1862, § 18.
Woodbury, 14 Cal. 424 ; 73 Am. Dec. ^ Sparks v. Woodstock Iron, etc.
658. See supra, § 137. Co., 87 Ala. 294; 6 So. 195.. See
' Stokes V. Findlay, 4 McCraiy also supra, § 142.
220
I 261-§ 294] CERTIFICATES OF REGULARITY § 267
§ 267. Whether Certificate conclusive Evidence of Regular-
ity — Revocation of Certificate. — The first question is whether
the determination of the officer to whom the instrument is
submitted that the document conforms to law is conclusive, so
as to preclude anybody who may be interested from showing
that the oflScer was mistaken, some mandatory provision of law
having been disregarded. Where there is no express provision
to that effect, the officer's determination is not conclusive : that
is, the mere fact that the incorporation papers must be passed
upon by some public official does not make his approval a con-
clusive determination that all legal requirements have been
observed.^ So, where a special act of incorporation provided
that the company should have the right to collect tolls as soon
as a certificate of its organization should be returned by certain
commissioners to the governor of the state and the latter should
proclaim the company to be entitled to do so, a proclamation of
the governor in pursuance of the statute was held not to be con-
clusive evidence of incorporation, upon issue joined on a plea of
nul tiel corporation.^ Of course, however, a court may well hold
that under the American doctrine of de facto corporations the
fact of the official approval amounts to colorable compliance with
law so as necessarily to make the company a corporation de facto
' Oler V. Baltimore, etc. B. R. Co., these latter cases, compare the other
41 Md. 583, 590 ; Kinston, etc. R. R. English cases cited infra, § 268.
Co. v. Stroud, 132 N. Car. 413; 43 See also Laflin, etc. Powder Co.
S. E. 913 (where the official was v. Sinsheimer, 46 Md. 315; 24 Am.
merely charged , with the duty as Rep. 522 ; Mix v. Nat. Bank of
registrar of refusing to record an il- Bloomington, 91 111. 20 ; 33 Am. Rep.
legal instrument) ; Boyce v. Triistees 44 (holding certificate to be prima
TowsonUmm Sta., 46 Md. 359 ; fade evidence of incorporation) ;
People ex rel. Davenport v. Rice, 68 Merchants' Nat. Bank v. Glendon
Hun (N. Y.) 24; 22 N. Y. Supp. Co., 120 Mass. 97 (similar point to
631 (holding that registrar may de- last case).
cUne to record the paper if not in As to the effect of a 'statutory
comphance with law, notwithstand- provision that an official certificate
ing the approval of a judge to whom shall be prima facie evidence of in-
the statute required the instrument corporation, see Wood v. WHey Con-
to be submitted); Hamilton, etc. struction Co., 56 Conn. 87; Bartlett
Road Co. v. Tovmsend, 13 Ont. App. v. Wilbur, 53 Md. 485 (holding that
534. the same effect will be given to the
But see First Nat. Bank v. Rocke- certificate in a foreign state).
feller, 195 Mo. 15 (headnote mis- ' Duke v. Cahawba Nav. Co., 10
leading); 93 S. W. 761; Banwen Ala. 82, 91 (headnote inadequate);
Iron Co. v. Barnett, 8 C. B. 406 ; 44 Am. Dec. 472.
Bird's Case, 1 Sim. N. S. 47. With
221
§ 268 IRREGULAR INCORPORATION [ChAP. IV
in spite of any previous irregularities in the proceedings.' So,
too, the fact that the official approval w^as obtained by fraudulent
misrepresentations on the part of the promoters is not ground for
collateral attack upon the validity of the incorporation.^ This
conclusion should be based not merely upon the ground that
there is colorable compUance with the incorporation law but
also upon the ground that there is formal compliance and that
the legislature intended to require no more. The judge or officer
to whom the incorporation proceedings are submitted may re-
voke his approval, at any rate where his error in granting the
approval was so flagrant that the attempted incorporation is
absolutely void.^
§ 268- § 270. Statutes making Certificate Conclusive Evidence
of Regidarity.
§ 268. English Cases. — The extent to which statutory pro-
visions purporting to make the officer's decision conclusive will
be carried, of course depends very largely on their terms. The
English Companies Act of 1862 provided that the registrar's
issuance of a "certificate of incorporation" shpuld be "conclu-
sive evidence that all the requisitions of this Act in respect of
' Jones V. Dana, 24 Barb. (N. Y.) Haacke v. Knights of Liberty, etc.
395, 402; Tar River Nav. Co. v. Club, 76 Md. 429; 25 Atl. 422;
Neal, 3 Hawks (N. Car.) 520. Laflin, etc. Powder Co. v. Sins-
' U. S. Vinegar Co. v. Schlegel, heimer, 46 Md. 315; 24 Am. Rep.
143 N. Y. 537; 38 N. E. 729; 522.
Glover v. Giles, 18 Ch. D. 173 ; Hart- But see Jersey City Gas Co. v.
man v. Pennsylvania Range Boiler Dwight, 29 N. J. Eq. 242 (where
Co., 24 Pa. Co. Ct. Rep. 324; Duke merely colorable compUance was had
V. Cahawba Nav. Co., 16 Ala. 372, with a statute making the subscrip-
374; Cochran v. Arnold, 58 Pa. tion and payment of a certain pro-
St. 399 "(overruling Patterson v. portion of the capital a condition
Arnold, 45 Pa. St. 410) ; Rice v. precedent to incorporation).
Nat. Bank, 126 Mass. 300 (headnote ^ National Endowment Co., 142
inadequate). Pa. St. 450 ; 21 Atl. 879.
Cf. American Salt Co. v. Heiden- But see Illinois Watch Case Co.
heimer, 80 Tex. 344 ; 15 S. W. 1038 ; v. Pearson, 140 111. 423, 432-433 ;
26 Am. St. Rep. 743 ; Tavaglini v. 31 N. E. 400 ; 16 L. R. A. 429 (hold-
Societa Italiane, 5 Pa. Dist. R. 441 ; ing that the approval cannot be re-
German 7ns. Co. V. Strahl, 13 Phila. voked because after it was given
512; Pattison v. Albany Bldg., etc. another corporation changed its
Ass'n, 63 Ga. 373 ; Litchfield Bank name to one very similar to that of
V. Church, 29 Conn. 137, 148-149 ; the new company).
222
§ 261-§ 294] CERTIFICATES OP REGULARITY § 268
registration have been complied with." ' The eases in which
this enactment has been construed, although not altogether har-
monious, constitute our chief source of enlightenment as to the
effect of such provisions. Thus, where the object clause of a
memorandum of association was altered after execution by the
subscribers and before registration, the House of Lords held that
the registrar's "certificate of incorporation" precluded the
courts from looking at such matters for the purpose of question-
ing the validity of the incorporation ; ^ and, after the argument
in this case but before the decision of the House, Lord Cairns
pronounced a similar judgment,' in which, however, he left the
point open whether the conclusive effect given by the statute to
the registrar's certificate would deprive persons who might be
injured from suing the registrar for knowingly recording an al-
tered document.* In several subsequent cases, however, the
doctrine has been enunciated (although in none of them was it
necessary to the decision) that the registrar's certificate and de-
termination that the document offered for registration complies
with law does not prevent any one who may be desirous of im-
peaching the corporation of the company from showing that in
fact less than the required number of signatures were attached ^
— that, for example, one person had signed twice. So, in con-
struing a similar provision in the Companies Act of 1856,° it was
held that the registrar's certificate was not conclusive upon the
' Companies Act, 1862, § 18. the corporation. Wenlock v. River
= Oakes v. Turquand, L. R. 2 Dee Co., 38 Ch. D. 534. As to other
H. L. 325, 354, 369 (headnote provisions making certificates of
inadequate). public officers "conclusive evidence"
' Peel's Case, 2 Ch. 674. of regularity in corporate affairs,
' 2 Ch. 682. ' see Ladies Dress Ass'n v. Pulbrook
" National Debenture, etc. Corp. (1900), 2 Q. B. 376, and infra, § 588
(1891), 2 Ch. 505; Laxon & Co. and § 646.
(1892), 3 Ch. 555. « 19 & 20 Vict., c. 47, § 115.
But see Nassau Phosphate Co., "The certificate of incorporation
2 Ch. D. 610; Bird's Case, 1 Sim. given to any existing pompany, in
N. S. 47. pursuance of this act, shall be con-
A statutory provision making a elusive evidence that all the requi-
commissioner's certificate conclu- sitions herein contained in respect
Bive evidence that a charge upon of registration under this act have
the company's lands to secure a been complied with, and the date of
loan is valid relates merely to mat- such certificate shall be deemed to
ters of procedure aud does not vali- be the date at which the company
date a loan which is ultra vires of is incorporated under this act."
223
§ 269 IRHEGULAR INCORPORATION [ChAP. IV
question whether the company was such a company as was
authorized to be incorporated under the act.'
The Companies Act of 1900 uses broader language than the
Act of 1862, providing that " a certificate of incorporation given
by the registrar in respect of any association shall be conclusive
evidence that all the requisitions of the Companies Acts in
respect of registration and. of matters precedent and incident
thereto have been complied with, and that the association is a
company authorized to be registered and duly registered under
the Companies Acts " ; ^ and this provision is believed in Eng-
land, no doubt with good reason, to shut off all inquiry into al-
leged irregularities in the proceedings, in so far at least as those
irregularities might be used as a ground for attacking the validity
of the incorporation.^
§ 269. American Cases. — In the United States, statutory
provisions having the same objects as the sections of the Com-
panies Acts discussed in the last paragraph are frequently en-
countered. Probably, in such cases, the EngUsh decisions would
be followed. But the circumstance should never be lost from
sight that in England the intention of the legislature is the sov-
ereign criterion, while in the United States that intention must
be disregarded if it conflict with any constitutional limitation.
Thus, where some American statute directs that the incorpora-
tion paper shall be submitted for examination to one of the judges
whose approval shall be conclusive evidence of its conformity to
law, the questions at once arise whether the duty so imposed on
the judge is judicial in nature, and whether it is competent
for the legislature to enact that an ex parte decision shall con-
clude the rights of persons who have had no opportunity to be
heard upon the question. Of course,. it is not intended to
intimate that such objections are sound or insuperable.
Indeed, as already intimated, the American authorities indi-
cate that, here as in England, the courts will effectuate whatever
' Northumberland & Durham Dist. dence that "the company was au-
Banking Co., 2 De G. & J. 357, dis- thorized to be registered under
tinguished in Ennis & West Clare this act."
Ry. Co., 3 L. R. Ir. 94, where the ' Companies Act, 1900 (63 & 64
statute which was construed ex- Vict., c. 48), § 1.
pressly provided that the registrar's ' 1 Lindley on Companies, 6th
.certificate should be conclusive evi- ed., 151-152.
224
§ 261-§ 294] CERTIFICATES OF REGULARITY § 270
is shown to be the clear legislative intent upon these matters.'
Thus, where a state statute relating to the consolidation or amal-
gamation of railway companies provided that a copy of the arti-
cles of consolidation certified by the secretary of state, in whose
office they were required to be filed, should be conclusive evi-
dence of the consummation of the consolidation, the United
States Supreme Court held that the corporate existence of the
amalgamated company could not be impeached by a share-
holder in one of the constituent corporations upon the ground
that some required precedent formality had been omitted.^ So,
the section of the National Bank Act providing for the conversion
of state into national banks declares that upon the issuance by
the comptroller of a certificate that the bank has complied with
the provisions of the federal law the association shall thenceforth
be deemed a national bank; and the Supreme Court held that
this certificate having been given precluded a shareholder from
impeaching the validity of the incorporation under the national
law by showing that the owners of two-thirds of the stock had
not, as required by the Act of Congress, assented to the change.'
The whole question is of less importance in the United States
than in England because of the prevalence of very liberal doc-
trines in this country as to de facto corporations and "corpora-
tions by estoppel."
§ 270. Whether Certificate precludes direct Attack by the
State upon Validity of Incorporation. — Even the most express
statutory declaration that a public officer's approval of the in-
corporation papers shall be conclusive evidence of the due for-
mation of the company will not prevent a direct attack upon its
corporate existence by the sovereign power by scire facias, quo
warranto, or other similar proceeding. That the American courts
will so hold, there can be little doubt.* The same result would
' In addition to cases cited be- 305 (as to conclusiveness of certifi-
low, see American Order Scottish cate of renewal of period of corpo-
Clans V. Merrill, 151 Mass. 658 ; 24 rate existence of national bank).
N. E. 918 ; 8 L. R. A. 320. As to conclusive effect of certifi-
' Leavenworth v. Chicago, etc. By. cates of increase or reduction of
Co., 134 U. S. 688 (headnote inade- capital, see infra, § 588 and § 646.
quate) ; 10 Sup. Ct. 708. ■* Leavenworth v. Chicago, etc. By.
' Casey v. GaUi, 94 U. S. 673 Co., 134 U. S. 688, 700-701 ; 10
(headnote inadequate). Sup. Ct. 708 (semble).
Cf. Clement v. U. S., 149 Fed.
VOL. I. — 15 225
§ 271 IRREGULAR 'INCORPORATION [ChAP. IV
be reached in England if only the law provided some method
of impeaching the validity of an incorporation under the Com-
panies Acts by means of a direct proceeding instituted by the
crown.'
§ 271-§ 283. PBOOF OF INCORPORATION.
§ 271. Statement of Question. — The most orderly and in-
structive method of examining the various problems regarding
irregularities in incorporation is by a consideration of the fol-
lowing question : when one party to an action or suit is desirous
of proving that a certain association of individuals is incorpo-
rated under a general law or companies act, while his opponent
is correspondingly interested in negativing that fact, what will
be sufHcient evidence of due incorporation ?
§ 272. Necessity for raising Issue by the Pleadings. — But
before attempting to answer this question, the obvious legal
principle should be adverted to, that the issue of incorporation
vel non must in some way be raised upon the pleadings,^ other-
wise no evidence upon that question will be necessary or admis-
sible. Thus, if at common law, in an action of trespass brought
' See Salomon v. Salomon & Co. Calfee (Ark.), 95 S. W. 1011 ; Mont-
(1897), A. C. 22, 30 ; Reuss v. Bos, gom^y v. Seaboard Air Line Ry. Co.,
L. R. 5 H. L. 176, 193. 73 S. Car. 503; 53 S. E. 987;
' See Society for the Propagation Chicago, etc. Ry. Co. v. State (Ark.),
of the Gospel v. Tovm of Pawlet, 4 106 S. W. 199 (denial that plaintiff
Pet. 480 (corporate existence of was a corporation owning a railway
plaintiff admitted by general issue held bad as a negative pregnant),
plea to writ of entry) ; Bristol, etc. As to what is a sufficient allega-
Trust Co. V. Joneshoro, etc. Trust Co., tion of incorporation, see Swir\g v.
101 Tenn. 545 ; 48 S. W. 228 ; Taylor Consolidated FruU Jar Co. (N. J.),
V. Portsmouth, etc. Ry. Co., 91 Me. 63 Atl. 899 ; and infra, § 464 ; and
193, 199 ; 39 Atl. 560 ; 64 Am. St. 5 Enc. of PI. & Pr., pp. 75-77, tit.
Rep. 216; Herald Shoe Co. v. Okla- "Corporations, IV, 3 (b)."
homa Pub. Co., 79 Pac. Ill (Okl.) A body which sues or is sued as
(where a general appearance for a corporation need not, according to
defendant was held to preclude a the weight of authority, be alleged
denial that the defendant was in- to be such. See Leader Printing Co.
corporated) ; Emerson Co. v. Nirrir- v. Lowry, 9 Okl. 89 ; 59 Pac. 242 ;
ocks, 88 Fed 280 (denial of all Central Bank v. Knowlton, 12 Wise.
knowledge of plaintiff corporation 624; 78 Am. Dec. 769; Ryan v.
not sufficient in an equity case) ; Farmers' Bank, 5 Kans. 658 ; 5
Pittsburgh, etc. Ry. Co. v. Lightheiser Enc. of PI. & Pr., pp. 70-74, tit.
(Ind.), 78 N. E. 1033, 1037 (gen- "Corporations, IV, 3 (a)," where a
eral appearance admission of de- large number of authorities, pro and
fendant's incorporation) ; Simon v. con, are cited.
226
§ 261-§ 294] PROOF OF INCORPORATION § 273
by an alleged corporation, the defendant should plead in con-
fession and avoidance only, he would admit the plaintiff's
incorporation, and could not at the trial put the plaintiff upon
proof thereof. How it is necessary to plead in order to raise the
question whether a certain association is incorporated is a ques-
tion that belongs to the law of pleading.' In this place, all that
is appropriate on the question is a word of caution lest the im-
portance should be overlooked of shaping the pleadings in such
a way as, under the lex fori, to raise the issue whether the com-
pany is incorporated. Of course, a party who alleges in his
pleadings -that a certain company is incorporated cannot be
allowed to change front and claim that there is no such corpora-
tion.^ An admission in the pleadings that " the defendant is a
corporation " will be construed to mean that the defendant was
incorporated, not merely at the time of action brought, but also
at the time of the transactions on account of which the suit was
brought.^
§ 273. Direct Proof e£ Incorporation. — From what has been
said above,* it is apparent that the production of a certificate
from a public ofEcer, if such there be, charged with the dvity of
passing finally and conclusively upon the regularity of pro-
ceedings looking to incorporation is the simplest evidence that
the association in question is. a corporation.^ But if the law
' See cases cited supra, p. 226, not as precluding the defendant
n. 2, and 1 Chitty on Pleading, 16th from insisting on an objection,
Am. ed., star page 464, note ; 5 Enc. raised in the answer, that the com-
of PI. & Pr., pp. 77-90, tit. "Corpo- pany was not incorporated at the
rations, IV, 3 (c)." time of the transactions referred to.
= First Nat. Bank v. Dovetail, etc. * Supra, § 268 and § 269.
Gear Co., 143 Ind. 534 ; 42 N. E. = Cf. Mix v. Nat. Bank of Bloom-
924. Cf. Wallace v. Loomis, 97 U. S. ington, 91 111. 20 ; 33 Am. Rep. 44
146. (holding, comptroller's certificate
' Legrand v. Manhattan Mer- under National Bank Act that the
cantUe Ass'n, 80 N. Y. 638 (headnote provisions of the law have been com-
inadequate). pUed with, and that the association
But see Maryland Tube Works v. is authorized to commence business.
West End Improvement Co., 87 Md. to be competent evidence of incor-
207, 213 (headnote inadequate), poration) ; Merchants' Nat. Bank v.
where an admission of the incorpo- Glendon Co., 120 Mass. 97 (similar
ration of the plaintiff contained in point to last case),
an agreed statement of facts was A certificate by a public official
construed as merely an admission stating that he had previously is-
that the company was incorporated sued a certificate of the due incor-
at the time of the agreement, and poration of the company is not
227
§273
IREEGULAK INCORPOEATION
[Chap. IV
under which the company is formed makes no provision, for such
a final and conclusive certificate, or if for any other reason such
a certificate is not forthcoming, resort must be had to the less
terse and decisive proof. The only other direct proof is the pro-
duction of an incorporation paper in legal form,^ or a certified
copy thereof,^ together with evidence of registration ^ and of
compliance with all provisions of the incorporation law,* and
followed up by evidence of the identity of the association whose
equivalent to the latter certificate,
and indeed is not admissible in
evidence. WaR v. Mines, 130
Cal. 27, 38-39; 62 Pac. 386. Cf.
Petty V. Hayden, 88 N. W. 339; 115
Iowa 212.
' Fortin v. V. S. Wind, etc.
Pump Co., 48 111. 451 ; 95 Am. Dec.
660 ; Edelhoff v. State, 5 Wyo. 19,
23-25; 36 Pac. 627 (holding that
original instrument is admissible al-
though certified copy is expressly
made evidence by statute) ; Sumter
Tobacco Warehouse Co. v. Phoenix
Ins. Co. (S. Car.), 56 S. E. 654 (same
point as last case — headnote in-
adequate) ; Sierra Land, etc. Co. v.
Bricker (Cal.), 85 Pac. 665.
Cf. Plank Road Co. v. Young, 12
Md. 476 (where " letters patent "
issued by the governor of another
state, and purporting to be in con-
formity with its laws, were held
prima fade evidence of incorpora-
tion) ; Agnew v. Bank of Gettysburg,
2 H. & G. (Md.) 478 (same point as
last case).
' Cf. Fresno Canal, etc. Co. v.
Warner, 72 Cal. 379; 14 Pac. 37
(certified copy of certified record
copy admitted) ; Spring Valley
Water Works v. San Francisco, 22
Cal. 434; Walker v. ShelbyviUe, etc.
Turnpike Co., 80 Ind. 452 (orig-
inal instrument lost) ; Washer v.
AUensviUe, etc. Turnpike Co., 81 Ind.
78 (original instrument lost) ; Tapley
V. Martin, 116 Mass. 275, 276; Kern
V. Chicago, etc. Ass'n, 40 111. App.
356 (certified copy made evidence
by express statute), affirmed, 140
111. 371 ; Dowagiac Mfg. Co. v. Hig-
inbotham, 15 S. Dak. 54.7; 91 N. W.
330; Dooley v. Cheshire Glass Co.,
15 Gray (Mass.) 494.
The original record is, of course,
as good evidence as a certified copy.
State ex rel. Carolina Iron Co. v.
Abernethy, 94 N. Car. 545. ,
In Jackson ex dem. Walton v.
Leggett, 7 Wend. (N. Y.) 377, it was
said that the non^production of the
original instrument must be ac-
counted for before the record can
be received.
' Sierra Land, etc. Co. v. Bricker
(Cal.), 85 Pac. 665 (production of
original articles with "filing^ marks"
thereon held sufficient).
The fact and date of filing with
the registrar may be proved by
parol. Johnson v. CrawfordsmUe,
etc. B. B. Co., 11 Ind. 280.
* Cf. Wood V. Wiley Construction
Co., 56 Conn. 87, 97-98; 13 Atl. 137
(where a statute providing that a
certified copy of the incorporation
paper should be "prima fade evi-
dence of the due formation, exist-
ence, and capacity of such corpora^
tion," was held to dispense with
proof that after registration of the
instrument a copy had been pub-
lished in a newspaper as required
by law).
As to the impossibility of con-
tradicting a magistrate's certifi-
cate that the incorporation paper
was duly sworn to before him,
see Dooley v. Cheshire Glass Co.,
15 Gray (Mass.) 494 (headnote
inadequate), and infra, § 283.
228
§ 261-§ 294] PROOF OF INCORPORATION §' 274
incorporation is to be proved with the association mentioned in
the instrument offered in evidence.' User of corporate privi-
leges under the name designated in an incorporation paper or
special act of incorporation is sufficient prima facie evidence of
identity.^ If any gap or flaw appears in this chain of proof, the
fact of incorporation is not impregnably established. It seems,
however, to be unnecessary in the first instance to prove the
genuineness of the signatures subscribed to the incorporation
paper, authenticity being presumed.'
If the organization of the company by election of officers, and
so forth, or by acceptance of a charter, is a condition precedent
to incorporation,* the books of the alleged corporation are
competent evidence of those facts ; ^ but unless such regular
organization be expressly prescribed as a condition precedent
to incorporation, it need not be alleged, and if alleged it need
not be proved, by the party having the affirmative of the issue
of incorporation vel non.^
§ 274. Indirect or circumstantial Eyidenpe of Incorporation. —
But although direct evidence of the kind set forth in the last
paragraph furnishes the most satisfactory proof of incorpora-
tion, it is not as a rule the only evidence thereof.' Thus, the
' As to interrogating a witness tures to be a forgery is not admis-
whether the alleged corporation sible as a ground of collateral attack
acted under certain recorded in- on the incorporation) ; and infra,
corporation proceedings, see Haas § 283.
V. Bank of Commerce, 41 Nebr. 754, * See supra, § 163.
758-759 (headnote inadequate) ; 60 ° Duke v. Cahawba Nav. Co., 10
N. W. 85. As to proof of the iden- Ala. 82 ; 44 A.m. Dec. 472 ; Foster
tity of an association which is suing v. White Cloud' City Co., 32 Mo. 505;
as a corporation and a certain com- Grays v. Turnpike Co., 4 Rand. (Va.)
pany organized under general in- 578; Buncombe Turnpike Co. v.
corporation laws, see M. E. Church McCarson, 1 Dev. & B. (N. Car.)
v. Pickett, 19 N. Y. 482, 487. 306. See also infra, § 1120.
' Came v. Brigham, 39 Me. 35 As to parol evidence of organiia^
(headnote inadequate). tion, etc., see Johnson v. Okerstrom,
Cf. Utica Ins. Co. v. Tilman, 1 70 Minn. 303 ; 73 N. W. 147 (where
Wend. (N. Y.) 555. the evidence was offered for the
^ New York, Lackawanna, etc. purpose of proving the company to
Ry. Co., 99 N. Y. 12 ; 1 N. E. 27 ; be a corporation de facto).
Lard v. Essex Bldg. Ass'n, 37 Md. " Gruhh v. Mahoning Navigation
320, 325-326 (semble). Co., 14 Pa. St. 302.
Cf . Duggan v. Colorado Mortgage, ' In addition to cases cited infra,
etc. Co., 11 Colo. 113, 117 (headnote see Agricultural Cattle Ins. Co. v.
inadequate, the court declaring that Fitzgerald, 16 Q. B. 432 ; New York
evidence to prove one of the signa/- Car Oil Co. v. Richmond, 6 Bosw.
229
§274
IRREGULAR INCORPORATION
[Chap. IV
mere fact that a company has organized and proceeded to trans-
act business as a corporation is perhaps upon the principle omnia
-presumuntur rite esse acta, some evidence of incorporation, at
least as against the company itself.^ Certainly, where the
alleged corporation is engaged in business, performance of such
conditions precedent to incorporation as the commencement of
business within a given time may be presumed.^ So, the grant
213; Stanford Land Co. v. Steidle,
28 Wash. 72; 68 Pac. 178; Fields
V. U. S., 27 App. B. C. 433, 444r-
445; Dotson v. MUlihen, 27 App.
D. C. 500, 514-515.
But see Frankland's Case, Leigh
& Cave Cr. Cas. 276, 286-287;
Welland Canal Co. v. Hathaway, 8
Wend. (N. Y.) 480, 486; 24 Am.
Dec. 51 ; Warner v. Daniels, 1 Wood.
& Min. 90, 105-106 ; UUey v. Union
Tool Co., 11 Gray (Mass.) 139;
Gauthier, etc. Co. v. Ham, 3 Colo.
App. 559, 560 ; 34 Pac. 484 (semble).
'■ Narragansett Bank v. Atlantic
Silk Co., 3 Mete. (Mass.) 282 ; Doyle
V. Douglas Machinery Co., 73 111.
273; Rose Hill, etc. Co. v. People
ex rel. Lawless, 115 III. 133 ; 3 N. E.
725; Methodist Episcopal Soc. v.
Lake, 51 Vt. 353 (where the records
were lost).
Cf. Regina v. Langton, 2 Q. B. D.
296; Schuyler County v. Coquard, 9
Mo. App. 592 ; Provident Institution
V. Burnham, 128 Mass. 458; War-
den, etc. of Mercers v. Hart, 1 C. & P.
113; Bow V. AUenstown, 34 N. H.
351; 69 Am. Dec. 489; Wood v.
Jefferson County Bank, 9 Cow.
(N. Y.) 194 ; Packard v. Old Colony
R. R. Co., 168 Mass. 92; 46 N. E.
433 ; Hagerstown Turnpike Road.
Co. v. Creeger, 5 H. & J. (Md.) 122 ;
9 Am. Dec. 495 ; Sasser v. State, 13
Ohio Rep. 453, 484^-488 ; Greene v.
Dennis, 6 Conn. 293 (holding that
the alleged corporation had done no
acts which an unincorporated asso-
ciation might not do).
But see Frankland's Case, Leigh
& Cave Cr. Cas. 276.
Certain Michigan cases, Wilson
Sewing Machine Co. v. Spears, 50
Mich. 534; 15 N. W. 894; and
Canal, etc. Co. v. Paas, 95 Mich.
372; 54 N. W. 907; and Lake Su-
perior Bldg. Co. V. Thompson, 32
Mich. 293, were decided under a
statute expressly enacting that the
transaction of business under a cor-
porate name should be prima facie
evidence of incorporation. In Smith
V. Mayfield, 163 111. 447; 45 N. E.
157, the court held that a contract
with a corporation might be ad-
mitted in evidence in an action be-
tween third persons without proof
of incorporation other than the user
of corporate functions.
As to proof of incoi-poration by
general reputation, see People v.
Dole, 122 Cal. 486, 497; 55 Pac.
581; 68 Am. St. Rep. 50 (with
which case compare Norton v. State,
74 Ind. 337, and NicoU v. Clark, 13
N. Y. Misc. 128, 130; 34 N. Y.
Supp. 159) ; Reed v. State, 15 Ohio
Rep. 217 ; Fleener v. State, 58 Ark.
98; 23 S. W. 1 ; People v. Ah Sam,
41 Cal. 645, 651-654; Dick v. State
(Md.), 68 Atl. 826; State v. Brown
(Utah), 93 Pac. 52 (holding that
no sufficient evidence of reputation
had been adduced).
' Bank of Manchester v. Allen, 11
Vt. 302, 307; Memphis, etc. plank
Road Co. V. Riifes, 21 Ark. 302 (per-
formance of condition that subscrip-
tion books be opened presumed from
election of officers) ; National Fire
Ins. Co. V. Yeomans, 8 R. I. 25 ; 86
Am. Dec. 610; Lucas v. Bank of
Georgia, 2 Stew. (Ala.) 147, 148.
Cf. Cheraw, etc. R. R. Co. v. White,
14 S. Car. 51 (holding that in pleading
230
§ 261-§ 294] PROOF OF INCORPOHATION § 275
of a land patent to a company as a corporation followed by a
deed from the company is sufficient proof of the corporate ex-
istence of the company in establishing a chain of title.' On the
other hand, according to the weight of reason if not of authority,
the use of a name such as "The Pacific Life Insurance Company
of California "^ is not, standing alone, any evidence of incor-
poration;^ for with equal propriety such names might be and
often are borne by unincorporated associations. It has been
held that the direct testimony of a witness who is acquainted
with the facts to the effect that the company in question is in-
corporated is evidence.^
§ 275. Secondary Evidence of Contents of Incorporation Paper.
— If the effort is made to prove incorporation, not indirectly
or circumstantially, by evidence of reputation, user of cor-
porate powers or the like, but directly by showing that an in-
corporation paper in compliance with law was duly executed
and recorded, parol evidence of the contents of the incorpora-
tion paper will not be admissible unless the non-production of
the original or a certified copy be explained.* The record or cer-
tified copy is, as we have seen, generally admissible without
accounting for the non-production of the original instrument.*
If the proper foundation be laid for secondary evidence of the
contents of the incorporation paper, the court will not insist upon
testimony sufficient to reproduce all the essential provisions of
the instrument, but will be satisfied by general testimony that it
compUed with the law."
performance of conditions precedent ♦ Cf. Rose HUl, etc. Road Co. v.
to incorporation need not be averred). People ex rel. Lawless, 115 111. 133;
' Galbraith v. Shasta Iron Co., 3 N. E. 725; Owen v. Shepard, 59
143 Cal. 94, 96 (headnote inad- Fed. 746 ; 8 C. C. A. 244 ; Evans v.
equate) ; 76 Pac. 901. Southern Turnpike Co., 18 Ind. 101 ;
^ Briggs v. McCvJloh, 36 Cal. 542. Haas v. Bank of Commerce, 41 Nebr.
Cf. Guckert v. Hacke, 159 Pa. St. 754, 759-760; 60 N. W. 85 (holding
303 ; 28 Atl. 249 (" Hughes & Gaw- that a witness may be asked whether
throp Co. ") ; Owen v. Shepard, 59 the company acted under certain
Fed. 746 (headnote' inadequate — articles offered in evidence except
" Indian Trading Co." ) ; 8 C. C. A. that by amendment the amount of
244. capital was changed).
See infra, § 464. ' Supra, § 273.
2 State V. Pittam, 32 Wash. 137 ; ' Rose Hill, etc. Road Co. v. Peo-
72 Pac. 1042 ; Locke v. Leonard Silk pie ex rel. Lawless, 115 111. 133 ; 3
Co., 37 Mich. 479. N. E. 725.
But see State v. Brovm (Utah),
93 Pac. 52.
231
§276
IRREGULAR INCORPORATION
[Chap. IV
§ 276. Statute recognizing Corporate Existence of defectively
incorporated Company. — Any statute which recognizes the ex-
istence of an association as a body corporate, of course, dispenses
with proof of incorporation and cures any defects in the in-
corporation proceedings,' unless indeed the constitution of the
state prohibits special legislation having that effect. Such a
statute is in effect a special act of incorporation.^
§ 277. Admissions of Incorporation. — Moreover, incorpora-
tion may be proved, prima facie, by an admission of the liti-
gant who is denying the fact.^ And this admission may be
implied as well as express. For instance, the execution of a
promissory note expressed to be payable to a corporation is an
implied admission by the maker that the company is incorpo-
rated ; * and indeed any contract or dealing with a company as
a corporation is an implied admission that the company is incor-
' Williams v. Union Bank, 2
Humph. (Tenn.) 339; Basshor v.
Dressel, 34 Md. 503 ; Koch v. NoHh
Ave. By. Co., 75 Md. 222; 23 Atl.
463 ; 15 L. R. A. 377.
Cf. Thornton v. Marginal Freight
Ry. Co., 123 Mass. 32 (where there
was held to be no sufiBcient legisla-
tive recognition of corporate exist-
ence) ; Attorney-Oeneral v. Railroad
Companies, 35 Wise. 425, 602.
^ Oroville, etc. R. R. Co. v. Palmas
County, 37 Cal. 354, 362 (headnote
inadequate).
But see Central Agricultural, etc.
Ass'n V. Ala, Gold Life Ins. Co., 70
Ala. 120 (holding such a statute not
to be a violation of a constitu-
tional prohibition of incorporation
by special act if the company is al-
ready in existence as a corporation
de facto); State ex ret. Sanche v.
Webb, 110 Ala. 214 (same point);
Syracuse City Bank v. Davis, 16
Barb. (N. Y.) 188 (similar point) ;
State V. Squires, 26 Iowa 340 (similar
decision but on the ground that a
general law could not be made ap-
phcable in such a case).
* Cf . Standard Oil Co. v. Common-
wealth (Ky.), 91 S. W. 1128 (receipt
given by defendant company de-
scribing itself as a corporation suflEl-
cient evidence against it in a crim-
inal case to prove its own incor-
poration) ; Metropolitan Life Ins. Co.
V. Dempsey, 72 Md. 288 ; 19 Atl. 642
(paper filed as copy of company's
incorporation paper although not
authenticated as required by law
evidence against the company to
prove its incorporation) ; Marx v.
Raley & Co. (Cal.), 92 Pac. 519
(letter from company admitting its
incorporation sufficient evidence to
support a judgment against it as a
corporation).
But see Indianapolis, etc. Co. v.
Herkimer, 46 Ind. 142, 148 ; Ramsey
V. Peoria, etc. Ins. Co., 55 111. 311.
As to admissions in the plead-
ings, see supra, § 272.
As to an admission in an agreed
statement of facts, see Maryland
Tube Worjcs v. West End Improve-
ment Co., 87 Md. 207, 213 (headnote
inadequate — stated supra, p. 227,
n. 2).
* Jones V. Cincinnati Type Foun-
dry Co., 14 Ind. 89 (headnote mis-
leading) ; Williams v. Cheney, 3
Gray (Mass.) 215; Brown v. Scoth
tish-American Mortgage Co., 110 111.
235; Williamsburg, etc. Ins. Co. v.
232
§ 261-§ 294] ADMISSIONS OF INCORPORATION
§277
porated.' The same has been held with respect to a mere refer-
ence to the company as incorporated in a contract with a third
person.^ Similarly, where a company is sued as^a corporation,
certificates for shares issued under the company's seal and recit-
ing that the company had been duly registered under a general
incorporation law are as against the defendant sufficient prima
facie proof of incorporation ; ' and in America the mere use by
the defendant of a name such as is usually borne by a corpora-
tion would perhaps have the same effect.* On the other hand, a
mere admission that an account made out in the name of a
supposed corporation is correct is not an admission that the
creditor is incorporated.* But this sort of proof, considered as
merely evidentiary — that is, unless some other rule of law in-
tervenes — is prima fame merely, and may be overthrown by
showing that in point of fact the incorpof ation paper is not in
correct form, or has not been recorded, or that there is some
other fatal defect in the incorporation proceedings." Unless the
evidence that establishes the admission is to be given some effect
beyond or other than a mere admission, it is always subject to
Frothingham, 122 Mass. 391 (where
a bond was in favor of a company
and its successors) ; Campbell &
Zell Co. v. American Surety Co., 129
Fed. 491 ; Lucas v. Bank of Georgia,
2 Stew. (Ala.) 147, 150 (semble);
South Bay Meadow Dam Co. v. Cray,
30 Me. 547, 549-550.
Cf. Franz v. Tewtonia Bldg. Ass.,
24 Md. 259 ; Johnston Harvester Co.
V. Clark, 30 Minn. 308; Provident
Institution v. Burnham, 128 Mass.
458 ; Gaines v. Bank of Mississippi,
12 Arlc. 769; Williams v. Bank of
Michigan, 7 "Wend. (N. Y.) 539, 541-
542.
But see Ramsey v. Peoria, etc. Ins.
Co., 55 111. App. 311.
' French v. Donahue, 29 Minn.
Ill ; 12 N. W. 354; Johnston Har-
vester Co. V. Clark, 30 Minn. 308;
Ryan v. Martin, 91 N. Car. 464;
Oriffin V. Clinton Line, etc. R. R. Co.,
11 Fed. Cas. 27, 31; Sierra Land,
etc. Co. V. Bricker (Cal.), 85 Pac. 665.
Cf. Topping v. Bickford, 4 Allen
(Mass.) 120; Williams v. Bank of
Michigan, 7 Wend. (N. Y.) 539;
Dooley v. Wolcott, 4 Allen (Mass.) 406.
But see WdLand Canal Co. v.
Hathaway, 8 Wend. (N. Y.) 480;
24 Am. Deo, 51.
' Anglo-Calif ornian Bank v. Field,
146 Cal. 644, 651 ; 80 Pac. 1080.
' Mostyn v. Calcott Hall Mining
Co., 1 Fos. & Fin. 334.
* Bon Aqua Imp. Co. v. Standard
Fire Ins. Co., 34 W. Va. 764, 769-
770 (headnote inadequate — where a
contract of ;the " Standard Fire Ins.
Co." was signed by "W. E., Presi-
dent, C. W. C, Secretary") ; 12 S. E.
771. See infra, § 464.
" Florsheim & Co. v. Fry, 109 Mo.
App. 487, 492 ; 84 S. W. 1023.
° Griffin v. Clinton Line, etc. R.
R. Co., 11 Fed. Cas. 27, 31.
Cf. Indianapolis, etc. Co. v. Her-
kimer, 46 Ind. 142 (where evidence
of an admission was excluded when
it appeared from other evidence that
the incorporation paper had not
been filed, etc.).
See also infra, § 283.
233
§ 278 IRREGULAR INCORPORATION [ChAP. IV
contradiction by bringing forward the incorporation proceed-
ings themselves. Whether any such further effect is to be given
will depend on the position taken in respect to questions which
will shortly be adverted to and upon which the courts are by
no means agreed.
§ 278-§ 282. ESTOPPEL to dent incorporation.
§ 278. Estoppel by Record. — An estoppel partakes of the
nature of a conclusive admission. Now, without entering on the
vexed question of "corporations by estoppel," one can readily
perceive that an admission of corporate existence may in some
cases crystaUize into an estoppel to deny corporate existence.
Take the clearest case — estoppel by record. If in one action
or suit the question whether a certain association is legally incor-
porated is raised, argued, and decided in favor of the legality
of the incorporation, that decision will be conclusive by estoppel
in any subsequent litigation between the same parties, so as to
preclude a second attack upon the company's corporate exist-
ence.^ On the other hand, the two acti«ns must be between the
same parties or their privies, or else the estoppel will not be
available. Hence, a judgment in an action by a corporation or
its receiver .against one shareholder cannot be pleaded in another
action by the receiver against another shareholder.^
§ 279. Estoppel by Deed. — As to estoppel. by deed, the case
is perhaps not so clear; and yet, on principle, it is difficult
' Keene v. Van Reuth, 48 Md. 184 until the claim against the individual
(headnote misleading) ; Williams members had become barred by
v. Bank of Michigan, 7 Wend. (N. Y.) limitations).
539, 541-542 (semble) ; Robertson ' Nickum v. Burckhardt, 30 Oreg.
v. Parks, 76 Md. 118, 133-134 (head- 464; 47 Pae. 788; 48 Pac. 474; 60
note inadequate); 24 Atl. 411. Am. St. Rep. 822 (where the former
Cf. Estey Mfg. Co. v. Runnels, 55 judgment was relied upon to estab-
Mich. 130 ; 20 N. W. 823 ; Fields v. lish that the company was not in-
Cook, 16 La. Ann. 153; Ritsh v. corporated).
Halcyon Steamboat Co., 84 N. Car. But see Pochelu v. Kemper, 14
702, 704 (holding that after judg- La. Ann. 308; 74 Am. Dec. 433
ment against a supposed corpora- (where a judgment against supposed
tion, its corporate existence cannot corporation on promissory note was
be attacked in resisting a motion held to estop holder from suing mem-
for a writ of execution) ; Droege v. bers as partners). It is submitted
Emsry (Ky.), 105 S. W. 374 (similar that a better ground for this last
to last case, with the further fact decision is that the claim is merged
that the objection to the company's in the judgment. See infra, J 293.
corporate existence was not raised
234
§ 261-§ 294] ESTOPPEL § 280
to see why a recital in a deed that a company is incorporated
should not in a proper case bind the party by way of estoppel.^
However, the authorities in general have not discriminated be-
tween estoppel by deed and estoppel in pais; and in fact the
doctrine of estoppel in pais has been carried so far in respect to
these matters that in most of the United States there is rarely
any need of resorting to any peculiar law of estoppel by deed.
§ 280-§ 282. Estoppel in Pais.
§ 280. Estoppel of Individual to deny the Incorporation. —
There seems to be no reason to doubt that on the strictest princi-
ples of the common law a person may sometimes be estopped
in pais to deny that a certain company is a corporation. The
ordinary elements of an estoppel in pais are well known — a
statement false in fact, relied upon by another person to his prej-
udice. Thus, if a person either expressly, or impliedly by
openly holding shares in an association which claims to be a
corporation, represents Jto those who may choose to deal with the
company that the concern is incorporated and that the share-
holders are accordingly subject to any individual liability to
creditors which by statute may be imposed on the stockholders
of a corporation, he will be estopped to escape such liability on
the plea that the company was never legally incorporated.^ In
such a case, all the elements of an estoppel in pais are present;
and therefore, consistently with principle, no other decision could
be reached. So, the maker of a promissory note in favor of a
supposed corporate body will be estopped from denying the
validity of the note in the hands of a bona fide holder for value,
a;lthough the supposed incorporation was invalid.^ And upon
the same principle, a person who executes a deed conveying
' PUbrow v. PUbrow's Atmos- Co., 10 R. I. 112 ; Slocum v. Warren,
pheric, etc. Co., 5 C. B. 440; German 10 R. I. 116; Wheelock v. Kost, 77
.Bank v. Stumpf, 6 Mo. App. 17 ; III. 296 ; Tanner v. Nichols, 80 S. W.
Hasenritter v. Kirchhoffer, 79 Mo. 225; 25 Ky. Law Rep. 2191.
239 ; Whitney v. Robinson, 53 Wise. See also Casey v. Galli, 94 TJ. S.
309; 10 N. W. 512; White Oak 673; Maxwell v. Akin, 89 Fed. 178.
Grove Benev. Soc. v. Murray, 145 ^ Camp v. Byrne, 41 Mo. 525.
Mo. 622 ; 47 S. W. 501. Cf. Canfield v. Gregory, 66 Conn.
Cf. Keen v. Whittington, 40 Md. 9 ; 33 Atl. 536 (suit by receiver of
489, 495. supposed insolvent corporation to
' Slocum V. Providence Steam, etc. collect unpaid subscriptions).
23,->
§ 2S1 IREEGULAR INCORPORATION [ChAP. IV
property to a supposed corporation may be taken as representing
to any person to whom the supposed corporation may convey
the land that the company is duly incorporated, and accordingly
may be estopped from asserting the contrary as a flaw in the
title of such grantee.'
§ 281. Estoppel of supposed Corporation to deny its own
Existence. — Perhaps without any real extension of this princi-
ple the estoppel might be held to cover the shareholders collec-
tively, that is, the supposed corporation. That is to say, when
persons have held themselves out to the world as members of a
corporation, they might be held to be estopped from denying
that fact when strangers take them at their word and sue them
as a corporation. To this effect are many American cases.^ The
objection to this view is that the capacity to be sued as a corpora-
tion is in a sense jurisdictional, so that to permit an action
against an association as if it were a corporation because of a
mere equity against its members is very like estopping the court.
Consequently, one cannot well find fault with a decision that an
action cannot be sustained against an unincorporated association
merely because of an equitable estoppel of its members to deny
the incorporation.' Upon the same principle, an English judge
held that the question whether a certain association was a cor-
poration and so within the statutes conferring jurisdiction for
the winding-up of companies had to be decided without refer-
ence to any estoppel of the members to deny their corporate
existence.* Nevertheless, the prevalent American doctrine
' Snyder v. Stvdebaker, 19 Ind. (headnote inadequate). Said Keke-
462; 81 Am. Dec. 415. See also wich, J., "It is said in short, that the
infra, p. 238, n. 1. Of. § 294. company is estopped from setting
^ E. g. Callender v. PainesvUle, up this case as an objection. I do
etc. B. R. Co., 11 Ohio St. 516; Mc- not think it is necessary to deal with
CvUcmgh v. Talledega Ins. Co., 46 the question of estoppel. The point
Ala. 376, 377; Stewart Paper Mfg. has been mentioned to the court.
Co. V. iJaw, 92 Ga. 511; 17 S. E. 748. The court has to make the order,
Of course, no such estoppel can and will not knowingly make an
bind a de jure corporation subse- order which is wrong in form and
quently formed; Bradley Fertilizer substance in a matter of this kind,
Co. V. South Publishing Co., 4 N. Y. however much the parties may be
Misc. 172 ; 23 N. Y. Supp. 675. estopped from bringing forward any
' Boyce-v. Towsontoum Sta. M. E. argument against it. I say 'in a
Church, 46 Md. 359. matter of this kind,' because the
^ National Debenture and Assets question is one of jurisdiction. . . .
Corp. (1891), 2 Ch. 505, 509-510 On a question of jurisdiction, I take
236
§ 261-§ 294]
ESTOPPEL
§ 282
supported by the cases cited above cannot be deemed any very
flagrant violation of established principles of estoppel in pais.
§ 282. Estoppel by Dealing with supposed Corporation. —
But many American courts — perhaps we should say, most
American courts — go further and hold not only that those who
participate in representing to the public that a defectively in-
corporated company of which they are members is a legally con-
stituted corporation are estopped to deny its corporate character,
but also that anybody who deals with them as a corporation is
likewise estopped.' That is to say, any one who contracts with
a company which is purporting to act as a corporation cannot
subsequently when sued upon the contract by the supposed cor-
poration deny the company's corporate existence, nor can he
hold the members of the supposed corporation as partners.
This conclusion, it is submitted, cannot be justified by the
ordinary principles of estoppel in pais. For the person or persons
it, the court must make up its own under a supposed corporation es-
mind and is bound to disregard any
question of estoppel."
' Casey v. Galli, 94 U. S. 673, 680
(semble) ; Close v. Glenwood Ceme-
tery, 107 U. S. 466, 476-477 ; 2 Sup.
Ct. 267 ; Stvdebaker Bros. Mfg. Co.
■V. Montgomery, 74 Mo. 101 ; Shields
V. Clifton Hill Land Co., 94 Tenn.
123 ; 28 S. W. 668 ; 26 L. R. A. 509 ;
45 Am. St. Rep. 700 ; Estey Mfg. Co.
V. Runnels, 55 Mich. 130 ; 20 N. W.
823; Stmttimore v. Clark, 70 Mo.
471 (estoppel raised by signing note
payable to "Missouri City Savings
Bank"); Worcester Med. Institution
.V. Harding, 11 Gush. 285; Seaton v.
Grimm, 110 Iowa 145; 81 N. W.
225 (where the party estopped was
himself a corporator) ; Planters', etc.
Bank v. Padgett, 69 Ga. 159 ; Thomp-
son v. Commercial, etc. Ass. Co., 78
Pac. 1073 (Colo.) ; Rannds v. Rowe,
145 Fed. 296; 74 C. C. A. 376;
Whitney v. Robinson, 53 Wise. 309 ;
10 N. W. 512 ; Platte Valley Bank
v. Harding, 1 Nebr. 461 (estoppel
raised by signing note payable to
"Platte Valley Bank or order");
Hasselman v. U. S. Mtg. Co., 97 Ind.
365 (person claiming title to land
topped to deny its existence for the
purpose of avoiding a prior mortgage
executed by it upon the property) ;
Gow v. Collin, etc. Lumber Co., 109
Mich. 45; 66 N. W. 676; Western
Investment Co. v. Davis (Ind. Ty.),
104 S. W. 573; Young v. Plattner
Implement Co. (Colo.), 91 Pac. 1109
(estoppel by execution of a note re-
citing the payee to be a corpora-
tion) ; Lincoln Park Chapter v.
Swatek, 204 lU. 228; 68 N. E. 429
(estoppel by receiving dividends) ;
Brooke v. Day (Ga.), 59 S. E. 769,
770 (semble) ; Union Pac. Lodge v.
Bankers' Surety Co. (Nebr.), 113
N. W. 263.
Cf. Black River, etc. R. R. Co. v.
Clarke, 25 N. Y. 208 ; West Winsted
Sav. Bank v. Ford, 27 Conn. 282;
71 Am. Dec. 66.
In Marion Savings Bank v. Dun-
kin, 54 Ala. 471 (where the doctrine
stated in the text, although recog-
nized as law, was held to be inap-
plicable because the person against
whom the estoppel was invoked
had had no direct dealings with the
supposed corporation).
237
§ 282 IRREGULAR INCORPORATION [ChAP. IV
in whose favor the estoppel is invoked — that is, the supposed
corporation or its members — were not misled by any misrepre-
sentation of the person who is to be estopped. If we assume
that whoever deals with a company which claims to be a corpo-
ration impliedly represents to it that it is incorpprated, yet the
supposed company or its members are not misled ; for they are
better acquainted with the facts than he can possibly be.' If
the argument be advanced that he impUedly represents that he
will not when sued upon the contract deny the company's cor-
porate existence, the answer is that a promissory representation
cannot give rise to an estoppel.^ Moreover, the contrary view
permits persons by arrogating corporate functions to themselves
in entire defiance of law, and in complete disregard of salutary
legal restrictions, to create, virtually, a corporation which will
have such powers as their own whim from time to time may
dictate and whose existence will be as real for all practical pur-
poses as if it were legally organized.
Hence, those cases are to be commended which protest against
the perversion of the sound doctrine of estoppel to deny corporate
existence into this very different doctrine of " corporations by
estoppel." * This protest is reinforced by a hne of cases holding
that "corporations by estoppel" exist only when the facts are
such as, according to the principles adverted to in a succeeding
paragraph, would constitute the association a "de facto corpo-
ration." * In so far as these latter cases assimilate or confuse
' If the supposed corporation as- Ann. 1076 ; 17 So. 496 ; 49 Am. St.
signs to a third person property Rep. 394 ; Abbott v. Omaha Smelting
which has been granted to it as a Co., 4 Nebr. 416; Griffin v. Clinton
corporation, the original grantor Line, etc. R. R. Co., 11 Fed. Cas. 27 ;
may well be estopped from denying Provident, etc. Trust Co. v. Saxon,
the title of the purchaser from the 116 La. 408; 40 So. 778; Louisiana
supposed corporation. See Green Nat. Bank v. Henderson, 116 La.
V. Grigg, 98 N. Y. App. Div. 445 ; 413 ; 40 So. 779.
90 N. Y. Supp. 565, and supra, Cf. Indiana Bond Co. v. Ogle, 22
§ 280. Ind. App. 593; 54 N. E. 407; 72
' Bigelow on Estoppel, 5th ed., Am. St. Rep. 326 ; Doyle v. Mizner,
p. 574. 42 Mich. 332 ; 3 N. W. 968 ; Jones
' Boyce v. Towsontown Station v. Aspen Hardware Co., 21 Colo. 263 ;
M. E. Church, 46 Md. 359; WeUand 40 Pac. 457; 52 Am. St. Rep. 220;
Canal Co. v. Hathaway, 8 Wend. 29 L. R. A. 143 ; Glenn v. Bergman,
480, 483-484 ; 24 Am. Dec. 51 (sub- 20 Mo. App. 343.
stantially overruled by Black River, * Jones v. Aspen Hardware Co.,
etc. R. R. Co. V. Clarke, 25 N. Y. 21 Colo. 263, 268; 40 Pac. 457; 52
208); WiUiama v. Hewitt, 47 La. Am. St. Rep. 220; 29 L. R. A. 143,
238
§ 261-§ 294] DISPROOF OF INCORPORATION § 283
the doctrines of estoppel and of de facto, corporations, it is sub-
mitted that they are to be regretted; but in so far as they im-
pliedly repudiate the notion of " corporations by estoppel," they
may be heartily approved.
Where the doctrine of corporations by estoppel is recognized,
in an action against the menibers of the supposed corporation as
partners, the plaintiff, in order to negative any estoppel, may
show that at the time of dealing with the alleged corporation
he was informed that the company was a partnership.'
§ 283. Disproof of Incorporation. — To disprove incorpora-
tion, the most satisfactory evidence is the testimony of the lawful
custodian of the register of corporations to the effect that no
incorporation paper has ever been recorded on behalf of the
supposed company.^ In Texas, it has been held that the testi-
mony of a private person to the effect that he had examined the
register of corporations and failed to find any record of a corpo-
ration bearing a certain name is not admissible ; ^ but it is sub-
mitted that according to the better view any person who has
examined the records may testify as to what is not to be found
there.* A certificate from the custodian of the record that the
supposed incorporation paper had not been filed is not evidence.^
It has been held, however, that if the original incorporation paper
is produced, the fact that it bears no indorsement indicative of
having been filed with the proper officer is evidence that it was
not so filed." ^
Evidence that residents of the supposed domicile of the alleged
corporation had never heard of its existence has been said to
be competent.'
Stanwood v. Sterling Meted Co., 107 ' Cross v. Pinckneymlle Mill Co.,
lU. App. 569, 574. Cf. infra, § 291. 17 lU. 54 ; Lusk v. Biggs, 97 N. W.
' Christian, etc. Grocery Co. v. 1033, 1034; 70 Nebr. 713 (sem-
Fruitdale Lumber Co., 25, So. 566 ; ble).
121 Ala. 340. ° Lmk v. Biggs, 97 N. W. 1033
' Cobb V. Bryan (Tex.), 83 S. W. (headnote inadequate) ; 70 Nebr.
887 (semble). 713.
' Cobb V. Bryan (Tex.), 83 S. W. ' Cobb v. Bryan (Tex.), 83 S. W.
887. 887 (semble).
* Cross v. Pinckneymlle Mill Co.,
17 lU. 54, 55 (semble).
239
§ 283 IKREGULAB INCORPORATION [ChAP- IV
We have seen above that in attacking collaterally the existence
of an alleged corporation, it is not permissible to show that a
public officer's certificate of due incorporation that may be re-
quired by law was obtained by the fraud of the promoters.'
Similarly, it is not competent in a collateral proceeding to show
that some of the material statements in the incorporation paper
are false in point of f act,^ or that some of the subscribers who on
the Jace of the paper appear to have duly acknowledged it did
not in fact do so.' A fortiori, it is not a good plea to an action
by the company that the execution of the incorporation paper, or
deed of settlement, was obtained by fraud without alleging upon
whom the fraud was practised.' On the other hand, these
doctrines will not be allowed to shield promoters who may have
been guilty of fraud ; ^ and the courts will rip open the incorpo-
ration in so far as may be necessary to restore defrauded parties
to the status in quo and in so far as can be done without risk
of injustice to innocent persons who have had dealings with the
corporation." Moreover, in cases of fraud, it would seem that
in America judgment of ouster might be entered against the
corporation at the instance of the state.'
> Supra, § 267. Glass Co., 15 Gray (Mass.) 494
' Buffalo, etc. R. R. Co. v. Hatch, (headnote inadequate).
20 N. Y. 157, 159 (headnote inade- As to a case where some of the
quate) ; Am. Salt^ Co. v. Heiden- signatures to the instrument are
heimer, 80 Tex. 344 ; 15 S. W. 1038 ; forgeries, see supra, p. 229, n. 3.
26 Am. St. Rep. 743. ♦ PUbrow v. PUbrow's Atmos-
But see Montgomery v. Forbes, pheric, etc. Co., 5 C. B. 440.
148 Mass. 249 (incorporation with- ' Montgomery v. Forbes, 148
out bona fde intent to carry on Mass. 249 ; 19 N. E. 342 ; Patterson
business at place named in incor- v. Arnold, 45 Pa. St. 410 (overruled
poration paper). That false state- in Cocftron v. ArnoW, 58 Pa. St. 399) ;
ments in an incorporation paper Niemeyer v. lAtUe Rock Junction Ry.,
will not sustain an action of deceit 43 Ark. 111. And see infra, § 287.
against the subscribers, see Webb v. ' Jones v. Missouri-Edison Elec-
RockefeUer, 195 Mo. 57, 63-75; 93 trie Co., 144 Fed. 765; 75 C. C. A.
S. W. 772. 631.
' First Nat. Bank v. Rockefeller, ' Cf. Holman v. State ex rel. Gib-
195 Mo. 15 (headnote misleading) ; son, 105 Ind. 569 ; 5 N. E. 702 ; State
93 S. W. 761. ex inf. Attorney-General v. Hogan,
As to the conclusiveness of the 163 Mo. 43 ; 63 S. W. 378 ; Webb v.
magistrate's certificate of acknowl- Rockefeller, 195 Mo. 57; 93 S. W.
edgment, see Dooley v. Cheshire 772.
240
§ 261-§ 294] CORPORATIONS DE FACTO § 284
§ 284- § 292. INCORPORATION DE FACTO.
§ 284. Whether irregular Incorporation Proceedings can give
rise to Corporation De Facto. — Cases not seldom arise in which
some condition precedent to the legal organization of a cor-
poration has been omitted, and in which no conclusive certifi-
cate of due incorporation exists, and in which no estoppel to
deny the company's existence can be invoked. In such cases,
the American courts generally will, under certain conditions,
hold that the association although not legally incorporated is
nevertheless a corporation de facto, that is to say, an association
whose right to corporate functions and attributes is complete as
against all the world except the sovereign.' This doctrine, which
is based upon analogy to the law of de facto officers,^ has never
received recognition in England,^ and is apparently repudiated
in Maryland.* So too, in some other states, the rule has been
enunciated that the non-performance of any material require-
' Commissioners of Douglas favor of the corporation itself it is
County V. BoUes, 94 U. S. 104 ; JDoty substantially applied in favor of in-
v. Patterson, 155 Ind. 60 ; 56 N. E. nocent shareholders.
668 ; Stout v. Zulick, 48 N. J. Law, ' See, for example, National
599 ; 7 Atl. 362 ; Tulare Irrigation Debenture, etc. Corp. (1891), 2' Ch.
District v. Shepard, 185 U. S. 1 ; 22 505, and Laxon & Co. (1892), 3 Ch.
Sup. Ct. 531 ; Leavengood v. McGee 555, and other cases cited supra,
(Oreg.), 91 Pac. 453; Gilkey v. § 268, where neither counsel nor
Town of How, 105 Wise. 41 (a de/ court dreamt of attempting to apply
facto municipal corporation); Neiufany such doctrine as the American
Orleans Debenture, etc. Co. v. Lo.,f doctrine of de /octo corporations.
180 U. S. 320, 327-328 ; 21 Sup. I As to Canadian law, see Common
Ct. 378; Baltimore, etc. R. R. Co. v.h. McArthur, 29 Can. Sup. Ct. 239
Fifth Baptist Church, 137-U. S. 568 / (where the principle of de facto in-
11 Sup. Ct. 185; £aton v. AspinuioZi, corporation seems to have been acted
19 N. Y. 119; Venable v. Ebenezer ^upon).
Baptist Church, 25 Kans. 177. j ' * Boyce v. Towsontown Station
' Note, however, that the doc-lM. E. Church, 46 Md. 359; Mary-
trine of de facto corporations applies yind Tube Works v. West End Imp.
in favor of the supposed corporationyCo., 87 Md. 207; 39 Atl. 620; 39
itself, whereas the doctrine of deYL. R. A. 810.
facto officers does not apply in favor J Cf. Worhingmen's Accommoda-
of the officer himself. A reason for I tion Bank v. Converse, 29 La. Ann.
this distinction may be found in the ! 369. But as to the Maryland law,
fact that the de facto corporation is Isee Keene v. Van Reuth, 48 Md. 184
composed . of natural persons who /(which as to the actual decisioii can
may be regarded as innocent third I be explained on the ground men-
persons, so that when the de facto( tioned supra, § 278, and also relied
doctrine is applied nominally in upon by the court).
VOL. I. — 16 241
§ 284 IRREGULAB INCORPORATION [ChAP. IV
ment of an incorporation law will always render the attempted
incorporation void except where an estoppel to enter upon the
question can be raised.' But according to the decided weight
. of American authority the possibility of de facto corporations is
recognized.
As an original question, it is very difficult to sustain this prev-
alent American doctrine. We have seen that a company be-
comes incorporated de jure when the only irregularity consists
in a failure to observe directory provisions of the incorporation
laws,' or where the law has been substantially complied with.'
Moreover, irregularities in the incorporation proceedings are not
to be presumed ; and we have seen above that where no irregu-
larities in the incorporation proceedings affirmatively appear,
very slight evidence will be sufficient proof of incorporation.*
Furthermore, breaches of conditions subsequent to incorpora-
tion can never be availed of by persons other than the state,
unless the legislature in express words so directs.* In some
cases, also, an estoppel may prevent the question from being
raised." It is only when all these principles fail, that the Ameri-
can doctrine of de facto corporations becomes operative. When
this is the case, — when there has been a failure to perform
some act, performance of which the legislature has declared to
be a condition precedent to incorporation, when this fact affirma-
tively appears in evidence, and when no party is estopped to
allege the truth, upon what principle are the courts justified in
holding that although the legislature has declared there shall
not be a corporation yet there shall be a corporation except as
against the sovereign? If it were common law that private
persons might without statutory or royal authority by mere agree-
ment convert themselves into a corporation which should have
' Said the court in Slocum v. 42 Mich. 332; 3 N. W. 968; Gnjjin
ProvideTice, etc. Steam Co., 10 R. I. v. Clinton Line, etc. R. B. Co., 11
112, 114: "We know of no rule Fed. Cas. 27; Hurt y. Salisbury, 55
which precludes inquiry into the Mo. 310; Indianapolis, etc. Co. v.
question, whether a company which Herkimer, 46 Ind. 142 ; Williams v.
assumes to act as a corporation has Hewitt, 47 La. Ann. 1076; 17 So.
ever been incorporated, in any case, 496 ; 49 Am. St. Rep. 394.
in the absence of any matter of es- ' Supra, § 264.
toppel to prevent the inquiry." ' Ibid.
Cf. Kaiser v. Lawrence Savings * § 274.
Bank, 56 Iowa 104; 8 N. W. 772; ' § 265.
41 Am. Rep. 85; Doyle v. Mizner, « § 278-J 282.
242
§ 261-§ 294] CORPORATIONS DE FACTO § 286
all the characteristics of a lawful corporation except where the
state is concerned, then the American doctrine of de facto cor-
porations might be sustained, on the ground that such incorpo-
rations owe their existence to the common law rather than to
an incorporation statute which has not been complied with.
But as far back as the time of Edward III, the common law
was settled adversely to this hypothesis.' The only ground on
which the American doctrine of de facto corporations can well
be sustained is that the legislature in prescribing certain con-
ditions precedent to incorporation must be taken to have in-
tended them to be conditions precedent to incorporation de jure
merely, and not necessarily (in cases where colorable com-
pliance with law is had) to incorporation as regards private
persons.^
§ 285-§ 290. Circumstances necessary to create a Corpo-
ration De Facto.
§ 285. In general. — Even under the prevalent American
doctrine of de facto corporations, certain circumstances must
concur in order to warrant its application. If there be a valid
statute under which a company might be incorporated, a bona
fide colorable attempt to comply with the law, and finally an
organization and exercise of corporate functions, all the au-
thorities which recognize the doctrine of de facto corporations
would, probably, agree that a proper case has been made for
holding that the company is a de facto if not a de jure corporation.*
§ 286. Requirement of a Law under which the Corporation
might be formed. — The existence of a law under which the
corporation might lawfully be organized is recognized by the
weight of authority as a necessary condition to the attainment
of a de facto corporate existence.* Some cases hold that the ex-
' Y. B. 49 Edw. Ill, 3. See also, St. Rep. 552; Doty v. Patterson, 155
infra, § 285-§ 290, as to the requisites Ind. 60 ; 56 N. E. 668 ; Tvlare Irri-
of a corporation de facto under the gation District v. Shepard, 185 U. S.
American doctrine. 1 ; 22 Sup. Ct. 531 ; Stout v. ZvMck,
' This rule of statutory construe- 48 N. J. Law 599 ; 7 Atl. 362.
tion — for such it really is — has * Am. Loan & Trust Co. v. Af in-
been expressly enacted as law in nesota, etc. R. R. Co., 157 III. 641 ;
Cahfomia. 42 N. E. 153 ; OiUette v. Aurora Ry.
= Finnegan v. Noerenburg, 52 Co., 81 N. E. 1005; 228 111. 261.
Minn. 239; 53 N. W. 1150; 38 Am. Cf. Snyder v. Studebaker, 19 Ind.
243
§287
IRREGULAR INCORPORATION [ChAP. IV
istence of an unconstitutional statute or enabling act satisfies
this requirement; ' but a larger number take the opposite view.^
Some authorities insist that if all the objects of the supposed
corporation are objects for which the statute does not authorize
companies to be incorporated, the case is as if no incorporation
act were on the statute books.* Moreover, some authorities
maintain that if persons who are not under the statute compe-
tent to act as corporators attempt to form a corporation, there
is no law under which they might be incorporated so that no
de facto corporation can result from the attempt.*
§ 287. Requirement of Bona Fides in attempting to comply
with Law. — The requirement that in order to give rise to a
462 (proceeding on the ground of
estoppel and declaring that an es-
toppel cannot be raised on a matter
of law) ; St. Louis Colonization Ass'n
V. Hennessy, 11 Mo. App. 555, 556
(semble — similar point to that of
last case).
' Board of Comm'rs v. Shields,
62 Mo. 247; Coxev. State, 144 N. Y..
396, 409; 39 N. E. 400; Htidsoh v.
Green Hill Cemetery, 113 111. 618;
Catholic Church v. Tohbein, 82 Mo.
418 ; Lang v. Mayor, etc. of Bayonne
(N. J.),68 Atl. 90.
Cf. Smith V. Sheeley, 12 Wall. 358
(holding that an association organ-
ized under an act of a territorial
legislature which could not take
effect until approved by Congress
was nevertheless a corporation de
facto).
^ Brandenstein v. Hoke, 101 Cal.
131 ; 35 Pao. 562 ; Eaton v. Walker,
76 Mich. 579; 43 N. W. 638; 6
L. R. A. 102.
Cf. Georgia Southern, etc. R. R.
Co. V. Mercantile Trust Co., 94 Ga.
306; 21 S. E. 701 ; 47 Am. St. Rep.
153; 32 L. R. A. 208 (attempt
to incorporate imder an unconsti-
tutional special act held to create
a corporation de facto because of the
existence of a valid general law under
which the company might have been
organized) ; Snyder v. Studebaker,
19 Ind. 462 ; 81 Am. Dec. 415 (over-
ruling EvansvUle, etc. R. R. Co. v.
City of EvansvUle, 15 Ind. 395 and
also holding, notwithstanding Har-
riman v. Soulham, 16 Ind. 190, that
it is sufficient if a valid special act
of incorporation was at one time
in existence although repealed by
a new constitution before it was
accepted).
■ ' Davis V. Stevens, 104 Fed. 235 ;
Vredenburg v. Behan, 33 La. Ann.
627, 635-636 ; Indiana Bond Co. v.
Ogle, 22 Ind. App. 593; 54 N. E.
407; 72 Am. St. Rep. 326; OUlette
V. Aurora Ry. Co., 81 N. E. 1005;
228 111. 261.
But cf. Lancaster v. Amsterdam
Imp. Co., 140 N. Y. 576, 584 (head-
note inadequate) ; 35 N. E. 964 ;
24 L. R. A. 322 ; Williams v. Citi-
zen's' Ry. Co., 130 Ind. 71, 73-75;
29 N. E. 408 ; 30 Am. St. Rep. 201 ;
15 L. R. A. 64; Gaff v. Flesher, 33
Oh. St. 107, 113-115, 453.
See also infra, § 296.
* Cf. Evenson v. EUingson, 67
Wise. 634; 31 N. W. 342 (unau-
thorized union of two churches to
form one corporation, whereas the
statute allowed incorporation of
any single church or religious
society).
But see Toledo, etc. R. R. Co. v.
Continental Trust Co., 95 Fed. 497,
506-511; 36C. C. A. 165.
244,
§ 261-§ 294] CORPORATIONS DE FACTO § 287
corporation de facto the attempt to comply with the incorpora-
tion law must not merely be colorable but must also be bona fide
is, at least apparently, insisted upon by some authorities. The
diflSculty in applying this rule is that although the original pro-
moters and corporators may not have acted in good faith, those
who subsequently acquire shares in the company, or have deal-
ings of any kind with it, may be quite innocent. In case of a
fraudulent but colorable attempt to secure the benefits of incor-
poration, the courts should frustrate the effort, and may perhaps
hold the fraudulent parties subject to any liability which they
would have incurred if the company were unincorporated,' but
so far as innocent third persons — such as innocent shareholders
or creditors — are concerned, the company should certainly be
treated as a de facto corporation.^ Thus, we have seen that it
is not permissible to attack incorporation collaterally by show-l
ing that some of the statements in the incorporation paper are !
untrue,^ or that a certificate of due incorporation was obtained!
by fraud.* It should be added that fraud in this connection does
not mean an intent to use the corporation for dishonest purposes
but rather means an attempt to secure the benefits of incorpora-
tion without complying, except colorably, with its provisions.*
Fraud on the law is meant rather than a fraud on individuals,
although of course the two kinds of fraud may overlap.
' Gartside Coal Co. v. Maxwell, was declared to have been overruled
22 Fed. 197 (semble) ; Montgomery by National Docks Ry. Co. v. Central
V. Forbes, 148 Mass. 249; 19 N. E. iJ.iJ. Co., 32 N.J. Eq. 755); Southern
342 ; Patterson v. Arnold, 45 Pa. St. Bank v. Williams, 25 Ga. 534.
410 (overruled in Cochran v. Arnold, ^ Patterson v. Arnold, 45 Pa. St.
58 Pa. St. 399); Christian, etQ. 410, 415-416 (semble); Duggan v.
Grocery Co. v. Fruitdale Lumber Co., Colorado Mtg., etc. Co., 11 Colo. 113,
121 Ala. 340, 345-346; 25 So. 566; 117 (headnote inadequate — where
Brundred v. Bice, 49 Oh. St. 640; one of the signatures to incorpora-
32 N. E. 169 ; 34 Am. St. Rep. 589. tion paper was a forgery) ; National
Cf. Jones v. Missouri Edison Docks By. Co. v. Central B. B. Co.,
Electric Co., 144 Fed. 765 ; 75 C. C. 32 N. J. Eq. 755 (headnote inade-
A. 631 ; Davidson v. Hobson, 59 Mo. quate) ; Attorney-General v. Stevens,
App. 130; Niemeyer v. lAttle Bock Saxt. Ch. (1 N. J. Eq.) 369; Aurora,
Junction By., 43 Ark. Ill; Earn- etc. B. B. Co. v. City of Lawrence-
ham v. Benedict, 107 N. Y. 159 ; 13 burgh, 56 Ind. 80, 87 ; Terhune v.
N. E. 784 ; Jersey City Gas Co. v. Midland R. B. Co., 38 N. J. Eq. 423.
Dwight, 29 N. J. Eq. 242 (which, in See infra, § 299. Cf. Booth v.
Elizabethtoum Gas Light Co. v. Green, Wonderly, 36 N. J. Eq. 250.
46 N. J. Eq. 118, 130, affirmed on ' Supra, § 283.
opinion below, 49 N. J. Eq. 329, * Supra, § 267.
245
§ 288 IRREGULAR INCORPORATION [ChAP. IV
§ 288. Requirement of Substantial or Colorable Compliance
with Law. — In some cases, it has been said that only where
the incorporation law has been substantially complied with can
the company be a de facto corporation ; '■ but if this be true the
whole efficacy is extracted from the doctrine of de facto corpora-
tions. For in any case of substantial compliance with law, the
company is incorporated de jure ^ and not merely de facto.
Colorable compliance with the incorporation law is essential
in order to create a corporation de facto ; ^ but substantial
compliance is not necessary.*
§ 289. What amounts to Colorable Compliance. — In deter-
mining what amounts to colorable compliance with the incor-
poration law, much is necessarily left to the discretion, one
might almost say the disposition, of the judge. The true test
of colorable compliance is this : has the incorporation law been
so far complied with that although some condition precedent
to incorporation prescribed by the legislature has not been ob-
served, yet the courts are justified in inferring or assuming that
the legislature meant that the irregularity in question should
have no more serious effect than a breach of a condition
precedent to incorporation de jure but not precedent to incor-
poration de facto f
The defects in the incorporation paper, and in and about its
execution and registration, which are deemed so serious that
there cannot be deemed to be even colorable compliance with
the law have been already pointed out in a previous chaptei^
' Kaiser v. Lawrence Savings Am. St. Rep. 85; Card v. Moore,
Bank, 56 Iowa 104, 109; 8 N. W. 68 N. Y. App. Div. 327, 337; 74
772 ; 41 Am. Rep. 85 ; Harm v. N. Y. Supp. 18, affirmed short, 173
McGregor, 29 Cal. 124; WiUiams N. Y. 598; 66 N. E. 1105; Booth
V. Heimtt, 47 La. Ann. 1076 ; 17 So. v. Wonderly, 36 N. J. Law 250.
496 ; 49 Am. St. Rep. 394 ; Cress- Cf. Bradley Fertilizer Co. v. South
well V. Oherly, 17 111. App. 281, 283. Publishing Co., 4 N. Y. Misc. 172;
Cf. Jones V. Aspen Hardware Co., 23 N. Y. Supp. 675.
21 Colo. 263; 40Pac. 457; 52 Am. * Finnegan v. Noerenberg, 52
St. Rep. 220; 29 L. R. A. 143. Minn. 239; 53 N. W. 1150; 38 Am.
' Supra, § 264. St. Rep. 552 ; Johnson v. Okerstrom,
' McLennan v. Hopkins, 2 Kans. 70 Minn. 303 ; 73 N. W. 147.
App. 260 ; 41 Pac. 1061 ; Lusk v. Cf. Georgia Southern, etc. R. B. Co.
Riggs, 97 N. W. 1033; 70 Nebr. v. Mercantile Trust Co., 94 Gb,. 306;
713; Abbott v. Omaha Smelting Co., 21 S. E. 701 ; 47 Am. St. Rep. 153;
4 Nebr. 416 ; Bergeron v. Hobbs, 32 L. R. A. 208.
96 Wise. 641 ; 71 N. W. 1056 ; 65 » Chap. II, passim.
246
§ 261-§ 294] CORPORATIONS DE FACTO § 290
Of course, if no written incorporation paper is ever executed,
there is no colorable compliance with the incorporation law and
therefore no corporation de facto} On the other hand, an in-
corporation paper which on its face complies with law will
amount to colorable compliance with the statute although some
of the statements in the instrument are false in point of fact,^
There may be colorable compliance although the affidavit
annexed to the incorporation paper omits "the averment required
by the statute of a bona fide intent to construct the raihoad
mentioned in the instrument.^
Where there is a distinct statutory prohibition against exer-
cising any corporate privileges until a certain condition has been
performed, it is very difficult to hold that there can be even
colorable compliance with law without at least apparent per-
formance of that condition.* For example, where a statute
prohibits the exfercise of any. corporate privileges before a cer-
tain tax is paid, there can be no colorable compliance with the
incorporation law and therefore no corporation de facto unless
the tax is paid.*
§ 290. Requirement of User of Corporate Privileges. — As
to what is sufficient evidence of user of corporate privileges
to constitute an association a corporation de facto ° there is much
diversity of opinion. As it is very difficult to point out any sharp
visible distinction between a corporation and an unincorporated
' Vdey V. Union Tool Co., 11 which should be compared the de-
Gray (Mass.) 139 ; Bradley Fer- cisions in the same state apparently
tUizer Co. v. South Publishing Co., repudiating the whole doctrine of
4 N. Y. Misc. 172 ; 23 N. Y. Supp. de facto corporations, supra, § 284).
675. ° In addition to cases cited be-
But cf. Merrick v. Reynolds En- low, see Finnegan v. Noerenberg,
gine, etc. Co., 101 Mass. 381. 52 Minn. 239; 53 N. W. 1150; 38
' See supra, § 283. Am. St. Rep. 552 (where evidence
' Buffalo, etc. R. R. Co. v. Cary, of user was held sufficient) ; John-
26 N. Y. 75. son v. Okerstrom, 70 Minn. 303 ; 73
■* In addition to cases cited be- N. W. 147 (as to the permissible
low, compare Worhingmen's Ac- methods of proving user) ; Martin
commodation Bank v. Converse, 29 v. Deetz, 102 Cal. 55 ; 36 Pac. 368 ;
La. Ann. 369. 41 Am. St. Rep. 151 (where the
* Jones V. Aspen Hardware Co., proof was held insufficient) ; Stan-
21 Colo. 263; 40 Pac. 457; 52 Am. wood v. Sterling Metal Co., 107 111.
St. Rep. 220; 29 L. R. A. 143; App. 569 (evidence of user held
Maryland Tube Works v. West End insufficient) ; DeWitt v. Hastings,
Improvement Co., 87 Md. 207 ; 39 69 N. Y. 518 (evidence of user held
Atl. 620; 39 L. R. A. 810 (with insufficient).
247
§ 291 IRREGULAR INCORPORATION [ChAP. IV
body, this diversity of opinion is natural. Probably, the best
rule is that in each case it is a question of fact whether the asso-
ciates have acted under a public claim of incorporation. The
use of a name appropriate to a corporation even though not
necessarily peculiar to a corporation, the use of a corporate seal,
the election of directors or officers,^ are circumstances tending
to establish this public claim even though not conclusive upon
the point. General reputation has been held to be evidence
of user of corporate privileges.^
§ 291-§ 292. Nature of De Facto Corporations.
§ 291. De Facto Corporations Distinguished from Corporations
by Estoppel. — The doctrine of de facto corporations is often
confused with the principle of estoppel. We have seen that
some courts assert that no one can be estopped to deny the
incorporation of a company unless the elements of a corporation
de facto are present.^ Many other cases treat the doctrine of
de facto corporations as resting on the ground of estoppel,^ or
are so meagre or indistinct that nobody can say whether they are
based on the ground of estoppel or on the ground that the com-
pany is a corporation de facto, or on both grounds.^ But in
reality the two principles are quite distinct. The doctrine of
de facto corporations does not rest on estoppel, but on that
public policy which is thought to prohibit the annulling of a
company's acts because of some technical flaw in the incorpora-
tion proceedings, which, perhaps, none but a skilled lawyer
' Buffalo, etc. R. R. Co. v. Cary, 95 U. S. 665 ; Commercial Bank v.
26 N. Y. 75 ; Johnson v. Okerstrom, Pfeiffer, 108 N. Y. 242 ; 15 N. E.
70 Minn. 303; 73 N. W. 147. 311; Baker v. Neff, 73 Ind. 68;
' Holmes v. GUlUand, 41 Barb. Hagerman v. Ohio Bldg., etc. Ass'n,
(N. Y.) 568. 25 Ohio St'. 186 ; Butchers', etc. Bank,
^ Supra, § 282. And see Guckert 130 Mass. 264 ; Curtis v. Meeker,
V. Hacke, 159 Pa. St. 303 ; 28 Atl. 62 111. App. 49 ; Ramsey v. Peoria,
249 (semble). etc. Ins. Co., 55 111. 311 ; Old Colony
* E. g. Smith V. Sheeley, 12 Wall. Trust Co. y. City of Wichita, 123
358; Sniders' Sons v. Troy, 91 Ala. Fed. 762, 776; Empire Mfg. Co. v.
224; 8 So. 658; 11 L. R. A. 515; 24 Stuart, 46 Mich. 482; 9 N. W. 527;
Am. St. Rep. 88f . Fitzpatrick v. Rulter, 160 111. 282 ;
' Andes v. Ely, 158 U. S. 312; 43N. E. 392; Hausev. Mannheimer,
15 Sup. Ct. 954 ; County of Leaven- 67 Minn. 194 ; 69 N. W. 810 ; Marsh
worth V. Barnes, 94 U. S. 70 (head- v. Mathias, 19 Utah 350; 56 Pac.
note misleading); Chuhh v. Upton, 1074.
248
§ 261-§ 294] CORPORATIONS DE FACTO / § 292
could detect.' Hence, according to the doctrine of incorpora-
tion de facto, the company's existence, although de facto only, is
real as against all the world ,^ even against persons who have
had no dealings with it and who, therefore, could not on any
theory be estopped.'
§ 292. Powers, Rights, etc., of Corporation De Facto. — Wher-
ever the de facto doctrine is applied, the attainment of a
de facto corporate existence is tantamount, to all intents ^d
purposes, to the creation of a corporation which may at any
moment suffer corporate capital punishment and which is in
all respects in the same condition as a company whose original
incorporation was regular but which has forfeited the right to
existence by reason of misconduct or breach of a condition sub-
sequent. Thus, a de facto company possesses all the powers
of mortgaging after-acquired property, consolidating with other
companies, and the like, which a de jure corporation of the same
class niight enjoy,* the only possible exception ° — and that
although supported by some authorities ° yet denied by a still
greater number ' — being in regard to powers in derogation of
common right, such as the power to condemn private property.
' Society Perun v. Cleveland, 43 ^ But see Gastonia Cotton Mfg.
Oh. St. 481; 3 N. E. 357; Buffalo, Co. v. W. L. Wells Co., 128 Fed.
etc. B. R. Co. V. Cary, 26 N. Y. 75. 369; 63 C. C. A. Ill (holding that
' Cf. Bushnell v. Consolidated Ice for purposes of determining the juris-
Machine Co., 138 111. 67; 27 N E. diction of a federal court a corpora-
596 (holding that shareholder in tion de facto cannot be treated as a
corporation de facto cannot main- citizen of the state under whose laws
tain bill for partnership accounting it attempted to organize), reversed
against his fellow-members). on another point, W. L. Wells Co.
^ Haas v. Bank of Commerce, v. Gastonia Cotton Mfg. Co., IQSV. 8.
41 Nebr. 754 ; 60 N. W. 85 ; WU- 177 ; 25 Sup. Ct. 640.
liamson v. Kokomo Bldg., etc. Ass'n, ' Cumberland Telephone, etc. Co.
89 Ind. 389; Doty v. Patterson, 155 v. St. Louis, .etc. By. Co., 41 So.
Ind. 60; 56 N. E. 668 (semble) ; 492; 117 La. 199; New York Cable
East Norway Church v. Froislie, Co. v. New York, 104 N. Y. 1 ; 10
37 Minn. 447 ; 35 N. W. 260 ; Chini- N. E. 332 ; Orrick School Dist. v.
quy V. Bishop of Ohifiago, 41 111. Dorton, 125 Mo. 439 ; 28 S. W. 765
148. (admission by property owner of
* Georgia Southern, etc. R. B. Co. corporate existence not sufficient) ;
v. Mercantile Trust, etc. Co., 94 Ga. Hampton v. Clinton Co., 65 N. J.
306 ; 32 L. R. A. 208 ; 21 S. E. 701 ; Law 168.
47 Am. St. Rep. 153 (mortgaging ' Ward v. Minnesota, etc. B. R.
after-acquired property) ; People v. Co., 119 111. 287, 291-292 ; 10 N. E.
La Rue, 67 Cal. 526 (consolidating 365; Eddleman v. Union County
with other companies). Traction, etc. Co., 217 111. 409, 75
249
§ 292 IRREGULAR INCORPORATION [ChAP. IV
So, a court of equity will not refuse the extraordinary remedy
of injunction because the plaintiff is a de facto corporation.'
Moreover, the shareholders in a de facto corporation are subject
to the same UabiUties to creditors and other persons as if the
incorporation had been de jure.^ The existence of a de facto
corporation is real even against the state ^ except upon direct
proceedings to oust it from corporate powers. Under a statute
punishing criminally embezzlement from an "incorporated
company" a conviction may be sustained if the company is a
corporation de facto^ Conversely, a statute applicable to " un-
incorporated companies" does not apply to companies which
are corporations de facto.^ A corporation de facto cannot be
wound-up as a partnership."
N. E. 510; National Docks Ry. Co. ' Eaton v. Aspinwall, 19 N. Y.
V. Central R. R. Co., 32 N. J. Eq. 119; Perkins v. Hatch, 4 Hun
755; Gillette v. Aurora Jty. Co., 81 (N. Y.) 137; Rowland v. Header
N. E. 1005; 228 111. 261 (semble FurnUure Co., 38 Oh. St. 269;
— drawing a distinction between a Hamilton v. Clarion, etc. R. R. Co.,
denial of the company's corporate 144 Pa. St. 34 ; 23 Atl. 53 ; 13 L. R.
existence and a denial that even A. 779 ; Aspinwall v. Sacchi, 57
de jure corporations of the class to N. Y. 331 (as to right of shareholder
which this company belongs are au- who has been subjected to a statu-
thorized by law to condemn prop- tory liability to creditors to enforce
erty) ; Central of Ga. Ry. Co. v. contribution from other shareholders
Union Springs, etc. Ry. Co., 39 So. in the de facto corporation) ; Harris
473; 144 Ala. 639; Morrison v. v. Gatetvay Land Co., 128 A]a.. 652;
Forman, 177 111. 427; 53 N. E. 73; 29 So. 611.
Smithv. Cleveland, etc. Ry.Co.(lnd.), Cf. St. Joseph, etc. Ry. Co. v.
81 N. E. 501, 507; WeUington etc. Shambaugh, 106 Mo. 557, 566. The
R. R. Co. V. Cashie, etc. Lumber Co., same result may often be reached
114N. Car. 690; 19S. E. 646; Mar- on the ground of estoppel. See
rison v. Indianapolis, etc. Ry. Co. supra, § 280.
(Ind.), 79 N. E. 961 ; 2. Lewis on » People v. La Rue, 67 Cal. 526.
Eminent Domain, § 391. Cf. Coxe v. State, 144 N. Y. 396
Cf. Boca, etc. R. R. Co. v. Sierra (where the point, although neces-
VaUeys Ry. Co. (Cal.), 84,Pac. 298, sarily involved, does not appear to
303 (where a de jure corporation have been argued or considered),
claimed, unsuccessfully, the right * People v. Carter, 122 Mich. 668 ;
as a de facto corporation to con- 81 N. W. 924.
demn property for a railway which ° Rowland v. Meader Furniture
by its incorporation paper it had Co., 38 Oh. St. 269.
no power to construct). ° Bushnell v. Consolidated Ice
' Williams v. Citizens Street Ry., Machine Co., 138 lU. 67. Cf. cases
130 Ind. 71 ; 29 N. E. 408 ; 30 Am. cited infra, p. 253, n. 3, and also
St. Rep. 201 ; 15 L. R. A. 64 ; Cin- Merchants, etc. Line v. Waganer, 71
cinnati, etc. R. R. Co. v. Danville, etc. Ala. 581.
Ry. Co., 75 111. 113.
250
§ 291-§ 294] LIABILITY OF MEMBERS § 293
Of course, the attainment of a de jure, and not merely a de
facto, existence may be made a condition in a contract so that
the contract will not be enforceable unless the company be-
comes incorporated de jure. According to some authorities,
such a condition is implied in a subscription to shares in a com-
pany to be subsequently formed.'
The dissolution of a de facto corporation whether by scire
facias, or quo warranto, or otherwise, is governed by the same
principles as the dissolution of a de jure corporation, and there-
fore is beyond the scope of the present work. A judgment
of ouster because of non-performance of conditions precedent
to incorporation does not relate back so as to defeat the rights
of third parties which may have vested during the company's
de facto existence.^
§ 293-§ 294. Rights and Liabilities of Members of
defectively incorporated Company.
§ 293. Liability to Third Persons. — The members of a defec-
tively incorporated company are, in many states and under most
circumstances, protected from individual liability for debts and
torts of the association by the doctrines of estoppel and of de facto
corporations. But in jurisdictions where those doctrines are not
recognized or in cases where for any reason they do not apply, the
members should be held liable as partners both ex contractu^
' See supra, § 260. As to whether Wechsdberg v. Flow City Nat. Bank,
a vendor of shares warrants the com- 64 Fed. 90 ; 12 C. C. A. 56 ; 26 L.
pany to be incorporated de jure, R. A. 470; Abbott v. Omaha Smelt-
see mira., § 973. ing Co., 4 Nebr. 416, 424^25;
^ Society Perun v. Cleveland, 43 Kaiser v. Lawrence Savings Bank,
Oh. St. 481; 3 N. E. 357; Rowland 56 Iowa 104; 8 N. W. 772; 41 Am.
V. M coder Furniture Co., 38 Oh. St. Rep. 85 ; Bigelow v. Gregory, 73
269. 111. 197; Loverin v. McLaughlin,
Cf. Thompson v. N. Y., etc. R. R. 161 111. 417; 44 N. E. 99; Bergeron
Co., 3 Sandf. Ch. (N. Y.) 625, 651 ; v. Hobbs, 96 Wise. 641 ; 71 N. W.
Farnsworthv. Drake, 11 Ind. 101. 1056; 65 Am. St. Rep. 85; Duke
' McLennan v. Hopkins, 2 Kans. v. Taylor, 37 Fla. 64 ; 19 So. 172 ;
App. 260; 41 Pac. 1061; Shields S3 Am. St. Rep. 232; 31 L. R. A.
v. Clifton Hill Land Co., 94 Tenn. 484 ; Garnett v. Richardson, 35 Ark.
123, 146 ; 28 S. W. 668 ; 26 L. R. A. 144 ; Guckert v. Hacke, 159 Pa. St.
509'; 45 Am. St. Rep. 700 ; WH- 303 ; 28 Atl. 249 ; Martin v. Fewdl,
liarns v. Hewitt, 47 La. Ann. 1076 ; 79 Mo. 401 ; Whipple v. Parker, 29v
17 So. 496; 49 Am. St. Rep. 394; Mich. 369; Owen v. Shepard. 59 \.
Davis V. Stevens, 104 Fed. 235; Fed. 746; 8 C. C. A. 244 (holding
251
293
IRREGULAR INCORPORATION
[Chap. IV
and ex delicto} Although this rule is accepted by the weight
of authority, yet some cases hold that the members are not
liable as partners ^ but that only those members who actually
participate in making the contract or in committing the tort
are liable. In cases of contract, according to these authori-
ties, the liability is that of agents who have contracted on be-
half of a non-existent principal.' These authorities proceed on
the ground that the several members never intended to assume
the position of co-partners and never held themselves out as
occupying that relation, so that injustice would be done by
that where persons carrying on busi- Collier, 16 Oh. St. 599 ; and infra,
ness under a company name are § 1641. Sometimes, by statute, Lq-
sued as partners, the burden of dividual liability is expressly imposed
proof rests upon them to prove the on members or officers of an asso-
company to be incorporated) ; Sex- elation which fails to observe some
ton V. Snyder, 119 Mo. App. 668; particular requirement of the in-
94 S. W. 562; Chajfe v. Ludeling, corporation law. See Loverin v.
27 La. Ann. 607 ; Globe Publishing McLaughlin, 161 111. 417.
Co. v. State Bank, 41 Nebr. 175, 188, ' Vredenburg v. Behan, 33 La.
189 ; 59 N. W. 683 ; 27 L. R. A. 854 Ann. 627 (liability for keeping fero-
(semble) ; Empire Mills v. Alston cious wild animals).
Grocery Co., 4 Willson Civ. Cas. Cf. Mandemlle v. Courtright, 142
(Tex.), § 221. Fed. 97 ; 73 C. C. A. 321 (as to Ua-
Cf. N. Y., etc. Bank v. CroweU, bility of members of a corporation
177 Pa. St. 313; 35 Atl. 613; Pat- for torts committed in the course
terson v. Arnold, 45 Pa. St. 410 ; of an ultra vires business).
Wells V. Gates, 18 Barb. (N. Y.) 554 ; ^ Humphreys v. Mooney, 5 Colo.
FuUer v. Rowe, 57 N. Y. 23 (holding 282, 288-292 ; Fay v. Noble, 7 Cush.
that a person is not liable for debts 188 ; Stafford Bank v. Palmer, 47
contracted before he became a mem- Conn. 443 ; Planters', etc. Bank v.
ber of the supposed corporation) ; Padgett, 69 Ga. 159 ; Rutherford v.
Hyatt V. Van Riper, 78 S. W. HiU, 22 Oreg. 218; 29 Pac. 546;
1043; 105 Mo. App. 664 (where de- 29 Am. St. Rep. 596; 17 L. R. A.
fendants had made false representee 549 ; Johnson v. Corser, 34 Minn,
tions about the company, but which 355 ; 25 N. W. 799.
is disapproved in part in Webb v. Cf. Central City Savings Bank v.
Rockefeller, 195 Mo. 57; 93 S. W. Walker, 66 N. Y. 424; Seaxx>rd v.
772) ; Booth v. Wonderly, 36 N. J. Pendleton, 55 Hun (N. Y.) ' 579 ;
Law 250 (where the directors were 9 N. Y. Supp. 46; State v. How, 1
declared to be liable as partners). Mich. 512 (where the object of the
So such an association may be held attempted corporation was deemed
subject to the Bankurpt Act as a illegal) ; Bldnchard v. KauU, 44 CaL
partnership Davis v. Stevens, 104 440.
Fed. 235. ^ Johnson v. Corser, 34 Minn.
It is a different question whether. 355 ; 25 N. W. 799 ; Fay v. Noble,
the members of a corporation are 7 Cush. (Mass.) 188, 194 (headnote
liable as partners upon ultra vires inadequate).
contracts. See Trowbridge v. Scud- Cf. Hurt v. Salisbury, 55 Mo.
der, 11 Cush. (Mass.) 83; MediU v. 310.
252
§ 261-§ 294] RIGHTS AND LIABILITIES OP MEMBERS § 293 a
treating them as such. But this argument, although specious, is
believed to be fallacious. Although it is true that the members
of the association did not intend to become partners, they did
intend to engage in a joint enterprise as an associated body.'
Now, the law knows but two forms of associations for business
or trade — corporations and partnerships; and as they are
not a corporation they must be a partnership. This doctrine,
however, of a partnership by legal construction does not apply
unless the members actually authorize the transaction of busi-
ness, although their mistaken belief that they had become in-
corporated is immaterial. Where, however, the members do
authorize the transaction of business, they are to be treated in
law as a partnership except as to those attributes of a corpora-
tion which it is competent for persons to assume by mere agree-
ment. Their belief that they were incorporated is simply a
mistake of law, which may be quite disregarded.
A creditor of a defectively incorporated association who ob-
tains a judgment against the company as a corporation is there-
after precluded from holding the members individually liable
as partners.^ The claim is merged in the judgment against the
supposed corporation.
§ 293 a. Rights and Liabilities Inter Sese. — To be sure,
as the members of a defectively incorporated association intend
to become a corporation and not a firm, their rights inter sese
will be governed by the principles applicable to members of a
corporation rather than to co-partners,^ so far, that is, as it is
competent for partners by mere agreement to provide that the
' In this respect they differ from 1034 ; Cresawdl v. Oberly, 17 111.
promoters of a company. Conse- App. 281. See supra, p. 234, n. 2.
quently, a suit framed upon the ' Cannon v. Brush Electric Co., 96
theory that defendants are liable Md. 446; 54 Atl. 121; 94 Am. St. Rep.
as members of a defectively incor- 598 ; Hecdd v. Owen, 79 Iowa 23.
porated association is not sustain- Cf. Heck v. McEwen, 12 Lea
able by proof of facts which would (Tenn.) 97, 101 ; Ward v. Brigham,
create a liability as promoters of 127 Mass. 24 ; Lincoln Park Chapter
a prospective corporation. See v. Swatek, 68 N. E. 429; 204 111.
mfra, § 360. 228 ; Card v. Mocyre, 68 N. Y. App.
' Nebraska Nat. Bank v. Per- Div. 327; 74 N. Y. Supp. 18, af-
ffMson, 49 Nebr. 109 ; 68N. W. 370; firmed short, 173 N. Y. 598; 66
69 Am. St. Rep. 522; Pittsburg N. E. 1105 (where the parties did
Sheet Mfg. Co. v. Beale, 204 Pa. St. not regard themselves as incor-
85; 53 Atl. 540; Heuer v. Car- porated); Stowe v. Flagg, 72 111.
■michad, 82 Iowa 288; 37 N. W. 397; Coleman v. Coleman, 78 Ind.
253
294
IRREGULAR INCORPORATION
[Chap. IV
principles of corporate management shall apply to them. Hence,
it would seem that there is no implied agency of each share-
holder for the association/ but that only the directors and other
duly constituted agents can bind the company.
§ 294. Rights against Third Persons. — As the members of
an association who erroneously beUeve themselves to be in-
corporated are in law members of a partnership and liable as
such to third persons, it follows also that they enjoy the rights
of partners as regards third persons. Consequently, a deed con-
veying land or chattels to them by the supposed corporate name
would vest title in them as joint tenants or tenants in common.^
The supposed corporate name is treated as a mere description
of the individual members. If, however, the members of the
344 (holding that one member of a of the widow and children of Wm.
defectively incorporated company
cannot on buying in a claim against
the company enforce it against his
fellow-members) ; HiU v. Beach,
12 N. J. Eq. 31 (a case decided be-
fore the modem law of corporations
had taken shape and containing
much that would not now be ac-
cepted as law) ; Johnson v. Corser,
34 Minn. 355; 25 N. W. 799 (as to
implied agency of every member);
Curtis v. Tracy, 169 111. 233; 48
N. E. 399; 61 Am. St. Rep. 168
(director participating in transac-
tion of business before recording
of certificate cannot hold associates
liable as partners on claim con-
tracted in his favor) ; Foster v.
MouLton, 35 Minn. 458 ; 29 N. W.
155 (where the court thought that
a company might be a corporation
de facto as between the members but
not as regards strangers).
As to rights of members who
have been held liable to creditors,
or who have incurred expenses, to
contribution from their associates,
see Richardson v. Pitts, 71 Mo. 128 ;
Flagg v. Stowe, 85 111. 164.
' See cases cited in last note.
= Wray v. Wray (1905), 2 Ch. 349
(where a deed of land to "Wm. W.
of Laurel House" was held to con-
vey legal title to a firm composed
W., deceased, and carrying on busi-
ness under his name); Maugham
V. Sharpe, 17 C. B., n. s., 443 (chattel
mortgage to a supposed corpora-
tion) ; Byam v. Bickford, 140 Mass.
31 ; 2 N. E. 687 (deed to a volun-
tary association by its name).
Cf. Clifton Heights Land Co. v.
Randell, 82 Iowa 89 ; 47 N. W.
905; American SUJc Works v. Salo-
me, 6 T. & C. (N. Y.) 352 ; White
Oak Grove Benev. Soc. v. Murray,
145 Mo. 622; 47 S. W. 501 (holding
that equitable title passes and that
a bill in equity will Ue to compel
grantor to execute a new deed) ;
Reinhard v. Virginia Lead Mining
Co., 107 Mo. 616 (proceeding on
the ground of estoppel and explain-
ing Dovthitt v. Stinson, 63 Mo. 268,
and Arthur v. Weston, 22 Mo. 379,
on the ground that they related
altogether to the legal as distin-
guished from the equitable title);
Whipple V. Parker, 29 Mich. 369;
Hart V. Seymour, 147 111. 598, 610 ;
35 N. E. 246.
But see Prevost v. Morgan's, etc.
R. R. Co., 42 La. Ann. 809; 8 So.
584; German Land Ass'n v. Schol-
ler, 10 Minn. 331 ; ChUds v. Hurd,
32 W. Va. 66, 100 (declaring the
deed to be "null and void").
254
§ 261-§ 294] RIGHTS AND LIABILITIES OF MEMBERS § 294
defectively incorporated body are not ascertainable but con-
sist in an indefinite, fluctuating number of individuals — for
example, the members of a church or congregation — the con-
veyance cannot vest title in them as individuals but is void for '
uncertainty,' unless indeed it can be sustained as a charity. It
has been held that a promissory note payable to the order of
a railroad company which in point of fact is not incorporated
is in legal effect payable to a fictitious payee ; ''■ but on principle
it would certainly seem that if any such company is in existence,
although it be unincorporated, the note should be regarded as
payable to the members or shareholders jointly or as partners.
Upon the same principle that (except when the doctrines of
estoppel or of de facto corporations come into play) the members
of a defectively incorporated association are entitled to the
rights of partners as against third persons, it follows that the
members of an association, organized, though defectively, under
a general incorporation law may sue as a partnership for the
protection of the joint property.*
'■ State use Trustees M. E. Church ' Farnsworthv.Drake, 11 Ind. 101.
V. Warren, 28 Md. 338; German ' Jones v. Aspen Hardware Co.,
Land Association v. Scholler, 10 21 Colo. 263; 40 Pac. 457; 52 Am.
Minn. 331. ^t. Rep. 220; 29 L. R. A. 143.
255
CHAPTER V
INCORPORATION FOR ILLEGAL PURPOSES
Section
Illegal purpose distinguished from merely unauthorized purpose . . 295
Incorporation avowedly for illegal purpose 296-297 '
In general 296
Effect of illegality of company upon contracts 297
Incorporation ostensibly for lawful but really for illegal purposes 298-302
Likelihood that illegal purpose will be veiled 298
Company incorporated de facto 299
Ouster from corporate privileges at suit of sovereign .... 300
No chartered right to execute secret illegal purpose 301
Northern Securities Co. v. U. S., 193 U. S. 197 ... . 302
What purposes are illegal 303-306
Not usually a question of corporation law 303
Violation of provisions of the incorporation law 304
Purposes unlawful but not criminal 305
Purposes contrary to public policy 306
§ 295. Illegal Purpose distinguished from merely unauthorized
Purpose. — Although the books are full of cases on irregular
or defective incorporation, very little authority exists on ques-
tions relating to incorporation for illegal purposes. To be
sure, some law can be found on the subject of unauthorized
incorporation — that is, incorporation or attempted incorpora-
tion for some object innocent enough in itself but not among
the objects for which the incorporation laws make provision as
the objects of an incorporated company.^ But this subject is so
closely connected with the topic of irregular or defective incor-
poration, even if it is not identical with it, and with the topic
of the object clause of the incorporation paper, that separate
treatment is undesirable.
Moreover, it is important to distinguish cases relating to
unincorporated companies which are illegal not because of any
inherent illegality in their objects — that is, not because it would
be illegal for an individual to pursue the same objects — but
because of some statute forbidding the formation of voluntary
associations of the character of the company in question. The
most striking illustrations of illegal voluntary associations of
> See supra, § 121, and § 286. J. 98, 121-122 (per Page Wood,
Cf. Butt V. Monteaux, 1 K. & V. C).
256
§ 295-§ 306] AVOWED illegal purpose § 296
this kind are furnished by the British Companies Act of 1862,
which prohibits the formation of companies with more than a
certain number of members unless registered under that act or
formed in pursuance of some other act of parliament or of letters
patent, etc.^ In such cases, there is no attempt to become incor-
porated, and consequently there is certainly no corporation either
de jure or de facto. Such cases are, therefore, to be distinguished
from cases where would-be corporators go through formalities
prescribed by general incorporation laws, for illegal purposes.
Nevertheless, the English books, referring to companies formed
in violation of the statutory prohibition constantly use the general
phrase " illegal companies," ^ and discrimination must therefore
be exercised in relying upon these English cases and text-writers
as authorities in America. When an English judge or lawyer
speaks of an "illegal company," he generally means not a com-
pany which has attempted to become incorporated for illegal
purposes but a voluntary association which is illegal because of
the prohibition in the Companies Acts.^
§ 296- § 297. Incorporation avowedly for Illegal Purpose.
§ 296. In general. — Suppose, however, the objects for
which a corporation is sought to be organized are not merely
' " No company, association, or working mines within and subject
partnership consisting of more than to the jurisdiction of the Stannaries."
ten persons shall be formed, after Companies Act, 1862, § 4.
the commencement of this Act, for ^ E. g. 1 Lindley on Companies,
the purpose of carrying on the busi- 6th ed., Bk. I, Chap. 5. The general
ness of banking, unless it is regis- language used in parts of this chapter
tered as a company under this Act, especially § 2, pp. 189-192, may be
or is formed in pursuance of some useful as authority for American
other Act of Parliament or of letters lawyers ; but the cases cited by
patent; and no company, associa- Lord Lindley, when analyzed, will
tion, or partnership consisting of often if not generally be found to
more than twenty persons shall be be inapplicable to American con-
formed after the commencement of ditions.
this Act, for the purpose of carrying ' But compare Ilfracombe Perma-
on any other business that has for nent Mut. Benefit Bldg. Soc. (1901),
its object the acquisition of gain by 1 Ch. 102, 112, where "Wright, J.,
the company, association or partner- protested against this use of the
ship, or by the individual members word illegal and preferred the
thereof, unless it is registered as a phrase "a society not authorized by
company under this Act, or is law and therefore not existing, from
formed in pursuance of some other the point of view of the Companies
Act of ParUament, or of letters Acts, as a society at all."
patent, or is a company engaged in
VOL. I. — 17 257
§ 296 INCORPORATION FOR ILLEGAL PURPOSES [ChAP. V
unauthorized but even actually illegal. Of course, any instance
of this sort is a special case under the general class or head above
referred to of corporations, or intended corporations, formed with
objects for which the incorporation law does not provide. For
no incorporation act, however liberal or even loose it may be,
permits persons to incorporate for the purpose of violating the
laws — of performing acts that are either mala in se or mala
prohibita. If therefore any company is avowedly organized for
any such purpose and if the illegal purpose appears on the face
of the company's memorandum of association or incorporation
paper, the company certainly does not become a corporation
de jure,^ and (unless there be other and lawful objects) probably
not even a corporation de facto.'' Other consequences, pains, and
penalties may attach to those who engage in or promote such
an organization, but that such persons certainly do not become
incorporated de jure and probably not even de facto is clear.
For example, all lawyers remember the traditional case of a
bill for a partnership accounting by a member of a firm of high-
waymen.^ If an enterprising, up-to-date firm of that character
should attempt to become incorporated under the laws of New
' Woodberry v. McClurg, 29 So. create no corporation) ; Chicora Co.
614 ; 78 Miss. 831 (purchasing shares v. Crews, 6 S. Car. 243 ; Padstow
of other companies in violation of Total Loss & Collision Ass. Ass'n,
an anti-trust law) ; State v. Debenture 20 Ch. D. 137 (company formed with
Guarantee, etc. Co. (La.), 26 So. 600, more than twenty members in
affirmed as to federal questions sub violation of the Companies Act,
Ttom. New Orleans Debenture, etc. held to have no existence and
Co. V. Louisiana, 180 U. S. 320; 21 therefore to be incapable of being
Sup. Ct. 378. wound-up as a company (under
Cf. People ex rd. Peabody v. the winding-up acts).
Chicago Gas Trust Co., 130 111. 268 ; But see Lincoln Bldg., etc. Ass'n
22 N. E. 798 ; 17 Am. St. Rep. 319 ; v. Graham, 7 Nebr. 173 (headnote
8 L. R. A. 497. inadequate — lending at usurious
• Detroit Schuetzen Bund v. De- interest) ; New Orleans Debenture, etc.
troit Agitations Verein, 44 Mich. 313 ; Co., 180 U. S. 320, 327-328 ; 21 Sup.
6 N. W. 675 ; 38 Am. Rep. 270 Ct. 378 (holding that as a de facto
(opposing enforcement of liquor corporation the company may prop-
law) ; St. Louis Colonization Ass'n erly be made the sole defendant in a
v. Hennessy, 11 Mo. App. 555, 557 proceeding by the state to test the
(headnote inadequate — semble). validity of the incorporation).
Cf. Trustees of N. C. Endowment ' Everet v. Williams, 9 Law
Fund v. SatchweU, 71 N. Car. Ill Quarterly Rev. 197; Lindley on
(special act incorporating company Partnership, 7th ed., p. 107. The
for the purpose of dispensing charity bill was dismissed with costs and
to orphans of Confederate soldiers, the plaintiff's solicitors were fined
held to be unconstitutional and to for contempt.
258
§ 295-§ 306] AVOWED illegal purpose § 297
Jersey, and should frankly state in their incorporation papers
that the only object of the proposed company would be to engage
in highway robbery, manifestly the company's object would not
be a lawful purpose within the meaning of the New Jersey law,
and therefore the attempt to become incorporated would be
wholly nugatory. The same thing would be true if the com-
pany's avowed object instead of being in conflict with some
state law should be the violation of an act of Congress. Hence,
if the incorporation paper of some company should state as its
sole object the monopolization of interstate commerce in viola-
tion of the Sherman Anti-Trust Law, the attempt to incorporate
would be simply and wholly ineffectual.
However, the inclination of the courts is — and very properly
— to presume that the incorporation papers do not vcontemplate
illegal objects. For instance, when during the Civil War, a
corporation was formed in Georgia for the purpose of trade with
foreign countries, it was held that the expressed object of the
company was not illegal, notwithstanding the existence of the
blockade then maintained by the federal fleets, since the corpo-
ration might conclude to wait until the raising of the blockade.*
§ 297. Effect of Illegality of Company upon Contracts. — In
a case of incorporation for illegal purposes, not merely is the
company no corporation, but contracts relating to its formation
and operation will be illegal. Upon this point, cases relating to
English voluntary companies formed in defiance of the prohibi-
tion in the Companies Acts may perhaps be referred to. A
subscription to shares in an illegal company is itself an illegal
contract; and until the illegal purpose be carried out by the
actual formation of the company, amounts paid on the subscrip-
tion may be recovered back. Contracts for sale of shares in the
illegal company are, it seems, likewise illegal.^ Moreover, it
» Importing & Exporting Co. v. (where the company was illegal
Locke, 50 Ala. 332, 334. under the Bubble Act).
But cf. Chicora Co. v. Crews, Cf. Buck v. Buck, 1 Campb. 547
0 S. Car. 243 (where a special act of (holding that a purchaser of shares,
the legislature of South Carolina in a company which was illegal under
passed during the War purporting to the Bubble Act, could not maintain
create a corporation for the purpose an action for money had a,nd re-
of exporting produce and importing ceived against his broker to recover
arms was held to be void). the balance remaining of money
' Josephs V. Prebber, 3 B. & C. 639 deposited with him to make the
259
§ 298 INCORPORATION FOR ILLEGAL PURPOSES [ChAP. V
seems even to have been held thaf a debtor owing money to an
illegal association may escape payment to any one.' Moreover,
a member of the illegal association cannot maintain an action
against his associates or trustees to require an accounting or to
hold the trustees liable for breaches of trust.^ On the other hand,
the illegal character of the association is no answer to a criminal
prosecution for embezzling its funds.^
§ 298- § 302. Incorporatimi ostensibly for Lawful bid really
Illegal Purposes.
§ 298. Likelihood that Illegal Purpose will be veiled. — Those
who engage in illegal transactions are unlikely frankly to
state their real object; they are much more apt to attempt to
conceal their actual intentions under the mist of innocent general
terms. For example, it will be remembered that the traditional
highwayman's partnership bill to which reference was made in
a former paragraph alleged that the object of the firm was to
"deal with gentlemen for watches, rings, swords, canes, hats,
cloaks, horses, bridles, saddles, and other things." Accordingly,
when the promoters of a corporation design to use the company
for illegal ends, they do not avow their intent to break the law
but on the contrary state in the incorporation paper as their
ostensible object some perfectly legitimate business, secretly
intending so to conduct that business as to compass unlawful
ends.
purchase) ; BousfHd v. Wilson, 16 of a loan society which, consisting
M. & W. 185 (semble, that vendor of of more than twenty members, was
shares in a company which was held to be prohibited by the Com-
illegal because of the prohibition in panies Act and therefore illegal, a
the Companies Acts could maintain loan to a member to be repaid
an action against his broker to according to the society's rules was
recover the purchase price). illegal, so that no recovery could be
' Ex -parte Day, 1 Ch. D. 699, 702 had upon a promissory note, payable
{"prima facie, the (illegal) society to one of the society's oflBcers, given
is not entitled to share in the dis- to secure the loan ; but at the same
tribution of the debtor's assets"); time, Brett, M. R., said: "It was
Jennings v. Hammond, 9 Q. B. D. contended that an 'illegal person'
225 (substantially the same point made the contract illegal: that is
as Shaw v. Benson, stated infra) ; an argument with which I cannot
Re Thomas, 14 Q. B. D. 379, 383 agree." 11 Q. B. D. 571.
(semble). ^ Syhes v. Beadon, 11 Ch. D. 170.
In Shaw v. Benson, 11 Q. B. D. ' Regina v. Tankard (1894), 1
563, it was held that in a case Q. B. 548.
260
§ 295-§ 306]
SECRET ILLEGAL PURPOSE
299
§ 299. Company incorporated De Facto. — In any case of
this sort, since the memorandum of association or incorpora-
tion paper is fair on its face, the courts, in order to protect inno-
cent persons who may become shareholders in the company, or
who may have dealings with it, are obliged to hold that the com-
pany comes into existence as a corporation, at least as regards
all the world except the sovereign,' although any public registrar
or other officer who is required to approve the paper may with-
hold approval on account of the secret illegal purpose.^ For
example, when an insolvent corporation comes to be wound-up
a shareholder cannot escape liability on the ground that the real
object of the company was gambling.^ So, the corporation itself
in spite of its secret illegal object may compel shareholders to
pay their unpaid subscriptions.^ On the same principle, it is no
defence to a suit to enforce a deed of trust securing an issue of
bonds that the company was incorporated for the illegal purpose
of creating a monopoly ,° although to be sure a court of equity
' v. S. Vinegar Co. v. Schlegel,
143 N. Y. 537 ; 38 N. E. 729 ; U. S.
Vinegar Co. v. Foehrenbach, 148
N. Y. 58 ; 42 N. E. 403 ; Clancey v.
Onondaga Fine Salt Mfg. Co., 62
Barb. (N. Y.) 395.
Cf. Patterson v. Arnold, 45 Pa.
St. 410 (overruled in Cochran v.
Arnold, 58 Pa. St. 399) ; Importing
& Exporting Co. v. Locke, 50 Ala. 332
(company formed in Georgia during
the Civil War for trade with foreign
countries, the real intention being to
run the blockade established by the
federal government) ; Attorney-Oen-
eral v. Am. Tobacco Co., 55 N. J.
Eq. 352, 376; 36 Atl. 971, affirmed
on opinion below, 56 N. J. Eq. 847 ;
42 Atl. 1117; Firu:k v. Schneider
Granite Co., 187 Mo. 244, 267-268
(headnote misleading) ; 86 S. W.
213 ; 106 Am. St. Rep. 452 ; State
v. New Orleans Water Supply Co.
(La.), 36 So. 117, 122; 111 La. 1049
(where the court said "The question
whether a corporation has been
organized for an illegal purpose
must be determined by the pro-
visions of its charter and not by
the declarations of its officers or
agents"); Haache v. Knights of
Liberty, etc.. Club, 76 Md. 429.
But the corporate fiction does
not protect the members from
individual liability for moneys de-
posited in pursuance of the illegal
scheme. McGrew v. City Produce
Exchange, 85 Tenn. 572 ; 4 S. W. 38 ;
4 Am. St. Rep. 771; •Brundred v.
Rice, 49 Oh. St. 640; 32 N. E. 169;
34 Am. St. Rep. 589 (promoters of
company formed to receive illegal
rebates from a railway company
liable individually to other shippers
for amount of rebates).
' First Church of Christ, Scientist,
205 Pa. St. 543; 55 Atl. 536; 97
Am. St. Rep. 753 ; 63 L. R. A: 411.
' Augir v. Ryan, 63 Minn. 373;
65 N. W. 640.
* U. S. Vinegar Co. v. Foehren-
bach, 148 N. Y. 58 ; 42 N. E. 403 ;
Detroit Driving Club v. Fitzgerald,
109 Mich. 670; 67 N. W. 899.
' Dickerman v. Northern Trust
Co., 176 U. S. 181', 195-196; 20
Sup. Ct. 311.
261
§ 300 INCORPORATION FOR ILLEGAL PURPOSES [ChAP. V
will not enjoin a violation of one of the terms of a contract
other parts of which provide for the organization of the com-
pany for a secret illegal purpose.' Moreover, the company is
not prevented from protecting its property by bill for an injunc-
tion by the illegality of the purpose for which it may have been
incorporated.^ To be sure, in one case a federal court applying
the maxim in pari delicto potior est conditio defendentis, refused
to interfere in the internal affairs of a corporation which had been
formed ostensibly for a lawful but secretly for an illegal purpose.^
Moreover, as regards parties who were privy to the illegal intent,
the case may be treated as if the illegality appeared on the face
of the incorporation proceedings,* so that such a party cannot
recover for money lent to the company in furtherance of the
unlawful purpose.^ But the attempt to incorporate is not a mere
nullity.
§ 300. Ouster from corporate Privileges at Suit of Sovereign.
— Nevertheless, the promoters have undoubtedly wrought a
fraud on the incorporation «,ct. The statute extended its benefits
to those who might desire to incorporate for any lawful purpose,
but it has been availed of by persons whose ostensible object
was lawful enough but whose real purpose is illegal. Hence, in
such a case the law ought to furnish some means of vindicating
its own dignity and ousting from the enjoyment of its privileges
those who have abused its provisions.
In England, however, serious doubt has been entertained
whether a'ny proceeding in the nature of quo warranto or scire
facias to revoke a charter would He in such a case." In most of
the United States, if not in all of them, on the other hand, some
proceeding to oust the wrongdoers from the enjoyment of cor-
porate privileges could beyond doubt be maintained by the
attorney-general.' In the enforcement of this quasi-penal remedy
» McContidl v. Camors-McCon^ (1897), A. C. 22, 30 ; Reuss v. Bos,
neU Co., 152 Fed. 321. L. R. 5 H. L. 176, 193.
' American Steel, etc. Co. v. Wire ' Dickerman v. Northern Trust
Drawers', etc. Unions, 90 Fed. 608, Co., 176 U. S. 181, 196; 20 Sup. Ct.
614 (injunction against strikers). 311 (semble) ; State ex inf. Hadley
' Le Warnev. Meyer, 38 Fed. 191. v. Meramec Rod, etc. Club (Mo.), 98
* See supra, § 296, § 297. S. W. 815 ; State ex inf. Hadley v.
' Euston V. Edgar (Mo.), 105 Ddmar Jockey Club (Mo.), 92 S. W.
S. W. 773. 185; Attorney-General v. Am. To-
' See Salomon v. Salomon & Co. bacco Co., 55 N. J. Eq. 352, 376; 36
262
§ 295-§ 306] SECRET ILLEGAL PURPOSE § 301
the courts would take care that the rights of innocent parties
should not be prejudiced. Moreover, proof would probably be
required not merely of the illegal intent but also of the execution
of that intent by illegal acts. In Ireland, it has been held that
where a company is incorporated for the purpose of deceiving
the public, the attorney-general is entitled to an injunction to
restrain the perpetration of the fraud.'
§ 301. No chartered Right to execute Illegal Purpose. — At
all events, both in England and America, every lawyer would
agree that the formation of a corporation ostensibly for an inn6-
cent but really for an illegal or criminal purpose confers no
chartered right to commit the violation of law,^ and that any
remedies whether for the prevention of the wrong if not yet con-
summated or for the undoing of it if already perpetrated may
be availed of precisely as if the incorporation had never been
effected.^ An illustration may be found in the numerous cases in
which corporations have been enjoined from using their corporate
names where such use would involve an infringement bf the
trade name of some prior organization.* The registration of a
company under a general incorporation law gives it no license
to commit crimes or torts.
Atl. 971 (semble), affirmed on opinion 188 ; 47 Am. St. Rep. 200 ; Southern
below in 56 N. J. Eq. 847 ; 42 Atl. Electric Securities Co. v. State
1117 (holding that the attomey-gen- (Miss.), 44 So. 785 (stated infra,
eral cannot proceed in equity) ; p. 265, n. 1).
State V. Nebraska Distilling Co., 29 Cf. People ex rel. Peabody v.
Nebr. 700 (illegal restraint of trade) ; Chicago Gas Trust Co., 130 111. 268 ;
People V. MUk Exchange,. 77 Hun 22N. E. 798; 17 Am. St. Rep. 319;
(N. Y.), 436; 29 N. Y. Supp. 259 8 L. R. A. 497.
(illegal restraint of trade) ; State ' Cf. Richardson v. Buhl, 77
ex rel. Voyles v. French Lick Springs Mich. 632 ; 6 L. R. A. 457 ; 43 N. "W.
Hotel Co. (Ind.), 82 N. E. 801 1102 (where a contract relating to
(holding that where the corporation the furtherance of the illegal enter-
has actually engaged in illegal trans- prise was pronounced void) ; Finck
actions it is no defence that it has v. Schneider Granite Co., 187 Mo.
also carried out its proper, innocent 244 ; 86 S. W. 213 ; 106 Am. St. Rep.
purposes). 452 (same point as preceding case) ;
Cf. Attorney-General ex rel. Wol- Jones v. Missouri-Edison Electric
vervne Fish Co. v. A. Booth & Co., Co., 144 Fed. 765; 75 C. C. A. 631
143 Mich. 89 ; 106 N. W. 868. See (company formed for fraudulent
also infra, p. 265. purpose) ; State v. Collins (R. I.),
' Attorney-General v. Appleton 67 Atl. 796 (officer indictable for
(1907), 1 Ir. 252; Attorney-General conducljing criminal business as
v. Myddletons (1907), 1 Ir. 471. agent of the corporation).
' Distilling, etc. Co. v. People ex * See infra, § 454.
rd. Malony, 156 111. 448 ; 41 N. E.
263
§ 302 INCORPORATION FOR ILLEGAL PURPOSES [ChAP. V
§ 302. Northern Securities Co. v. United States, 193 U. S.
197. — Failure to recognize these considerations was the under-
lying fallacy in one of the arguments advanced on behalf of the
defendant in a famous recent case — the Northern Securities
Case.^ It will be remembered that the Northern Securities Com-
pany had been incorporated under the general laws of New
Jersey for the purpose, as t^e "certificate of incorporation," or
incorporation paper, somewhat more wordily stated, of buying,
holding, and selling corporation stocks and bonds — a quite
legitimate business. The real purpose of the incorporation, how-
ever, was the stifling of competition between two interstate rail-
ways through acquiring and holding a majority, or all, of the
shares of each of them. This object, the Supreme Court held,
was prohibited by the Sherman Anti-Trust Act. The soundness
of this conclusion, while doubtless debatable, in no way turns
on questions of corporation law, and therefore does not concern
us here. But assuming this construction of the act to be correct,
the counsel for the Northern Securities Company argued that
nevertheless that company, being validly incorporated under
the laws of New Jersey, had, by virtue of the powers conferred
upon it by its incorporation paper, the same right as a natural
person to purchase and hold shares in competing railway com-
panies. The obvious answer to this contention was that if, as
was conceded, the object of the incorporation was the prevention -
of competition between two competing interstate railways by
uniting the ownership of a controlling interest in each, and if
this object was a violation of an act of Congress, then the com-
pany was not really formed for a "lawful purpose" within the
meaning of the New Jersey incorporation act, and its organiza-
tion was in effect a fraud on the laws of New Jersey. The
formation of a company for the purpose of violating an act of
Congress was as much a fraud on the New Jersey incorporation
law as if the company's object had been the infringement of a
New Jersey statute. Hence, the rights and dignity of the State
of New Jersey, so far from being concerned in upholding a
power in the Northern Securities Company to violate with im-
' N orthern Securities Co. V. U.S., Eq. 352; 36 Atl. 971, affirmed on
193 U. S. 197 ; 24 Sup. Ct. 436. opinion below, 56 N. J. Eq. 847 ;
With this case, compare A Korjie?/- 42 Atl. 1117.
General v. Am. Tobacco Co., 55 N. J.
264
§ 295-§ 306] WHAT PURPOSES ARE ILLEGAL § 303,
punity an act of Congress, demanded that, if the federal statute
forbade what the company had done and was formed for the
purpose of doing, then vigorous steps should be taken to pre-
vent the continuance of the illegal action on its part and to vin-
dicate the outraged corporation law of New Jersey, which
provided for the incorporation of companies for lawful purposes,
and which had been abused by the organization of a company
for the purpose of violating a law of the United States. For this
reason, the federal court was justified in enjoining the defendant
corporation, the Northern Securities Company, from exercising
rights of ownership in respect of the shares which it had acquired
in defiance of the Anti-Trust Law.' If this decision rested upon
a sound interpretation of the act of Congress in question, it
certainly interfered in no way with the rights of New Jersey or
with those conferred by that state on its creature, the Northern
Securities Company. Indeed, a New Jersey court, accepting
as sound the construction placed by the Supreme Court on the
Anti-Trust Law, might well have gone a step further by dissolv-
ing the corporation and decreeing a forfeiture of its corporate
privileges because of its abuse of the New Jersey law by
organizing a corporation under legal forms for the secret purpose
of violating a federal statute.^
§ 303-§ 306. What Purposes are Illegal.
§ 303. Not usually a Question of Corporation Law. — Of
course, the question whether the purpose for which a company
is organized is legal or is illegal is a question of general law, not
of corporation law. For example, in the Northern Securities
Case, the question whether the Anti-Trust Law, fairly construed,
really did prohibit a combination among the owners of stock
in two competing interstate railways in order to consolidate their
holdings under a common management is purely a question in
the law of monopolies and restraints on commerce. The only
' Southern Electric Securities Co. competing Mississippi corporations,
V. State (Miss.), 44 So. 785 (where from voting in respect of the shares
the Mississippi court at the suit of so acquired in defiance of a Missis-
the state of Mississippi enjoined a sippi Anti-Trust law).
New Jersey corporation, which had " See supra, § 300.
been formed to acquire the stock of
265
§ 304 INCORPORATION FOR ILLEGAL PURPOSES [ChAP. V
point in the law of corporations which the case decides has been
discussed above.
§ 304. Violation of Provisions of Incorporation Law. — To be
sure, the illegahty alleged to lurk in the object of a company's
organization may consist in the intention to violate or evade
some provision of the incorporation law itself. For example, in
the well-known case of Salomon v. Salomon & Co.,^ where a
company was organized to take over a mercantile business pre-
viously carried on by a certain Aaron Salomon, the contention
was advanced that inasmuch as Salomon owned all the shares
in the company except six (which were taken by other members
of his family) the company was a mere device to enable an indi-
vidual to carry on business with limited liability, and that such
a device was a violation of the spirit of the Companies Act and
was unlawful, and that therefore the company never became
validly incorporated. This argument was, however, overruled
by the House of Lords upon the ground that the law did not
prohibit the incorporation of a company for the purpose of carry-
ing on business with limited liability, provided only the formali-
ties prescribed in the incorporation act be observed.^ Any other
conclusion would have been truly startling. For both in England
and America, a very large proportion of all the companies incor-
porated are organized for the mere purpose of avoiding the un-
limited liability which attaches to an individual or partnership
carrying on business. If all these companies were to be held
illegal, and the attempted incorporation invalid, or capable of
invalidation, the consequences would have been appalling.
Incorporation laws often require that the company's principal
office or place of business be stated in the incorporation paper.
If the instrument be fair on its face but if the company be or-
ganized without a hona fde intention of carrjdng on business
at the designated place, the validity of the incorporation may
certainly be called in question by the state on quo warranto pro-
ceedings, and under exceptional circumstances may be attacked
collaterally.^
' Salomonv.Salomon&Co.(1897), invoke the jurisdiction of the
A. C. 22 (headnote inadequate). federal courts on the ground of
' See also Irvine Co. v. Bond, 74 diversity of citizenship).
Fed. 849 (where the motives of ' Montgomery v. Forbes, 148
incorporation were to secure limited Mass. 249 ; 19 N. E. 342.
liability and to obtain the right to But cf. supra, § 283, § 287.
266
295-§ 306] WHAT PURPOSES ARE ILLEGAL
306
§ 305. Purposes Unlawful but not Criminal. — The fact that
the purpose of incorporation is not a crime is not conclusive
proof that the purpose is lawful. For example, the use of a
corporate name which involves a false representation is not lawful
although the use of that name may not be a crime. Thus, in
a recent Irish case, where a corporation was proposed to be
formed under the name of "S. G. Rowell, Dentist, Limited,"
the court held that the proposed name would falsely suggest that
either S. G. Rowell or the corporation was licensed to practise
dentistry and that therefore the object of the company was
not lawful,' notwithstanding a prior decision in which the use
by a corporation of a name including the words " Surgeon Den-
tists " had been held not to be a violation of the act for the licens-
ing of dentists.^
§ 306. Purposes contrary to Public Policy. — Moreover, a
corporation cannot be formed for a purpose which, although
perhaps not strictly illegal, is deemed to be contrary to public
policy.' For example, an organization for the purpose of paying
benefits or premiums to members upon their marriage has been
thought to be against public policy; and therefore it was held
thalt a corporation could not be formed for that purpose.*
' Rex V. Registrar Joint Stock
Companies (1904), 2 Ir. 634.
Cf. Attorney-Oeneral v. Appleton
(1907), 1 Ir. 252; Attorney-General
V. MydcUetons (1907), 1 Ir. 471.
' O'Duffy V. Jaffe (1904), 2 Ir. 27.
' Detroit Schuetzen Bund v. De-
troit Agitations Verein, 44 Mich. 313
(headnote inadequate) ; 6 N. W. 675 ;
38 Am. Rep. 270.
Cf. Benevolent Society, 10 Phila.
(Pa.) 19; First Church of Christ,
Scientist, 205 Pa. St. 543; 55 Atl.
536; 97 Am. St. Rep. 753; 63
L. R. A. 411 (incorporation for the
purpose of healing disease by prayer
alone).
* Hdping-Hand Marriage Ass'n,
■ 15 Phila. 644.
267
CHAPTER VI
• PROMOTERS
Section
Who are promoters 307-310
In general — not a definite legal status 307
Who are subject to disability as promoters 308
A question for jury 309
Promoters after incorporation 310
Whether promoters are partners 311-315
In general 311
Untier the Companies Act of 1844 312-313
Outline of practice 312
Members of provisional association, provisional committees,
etc., not partners 313
Provisional committees, etc., under other statutes 314
Formation of partnership between promoters 315
Promotion by means of a preliminary corporation 316
Responsibility of corporation for acts of promoters , 317-349
Responsibility for acts done after incorporation .... 317-319
What is date of incorporation for this purpose 318
After incorporation de facto but not de jure 319
Responsibility for acts done prior to incorporation .... 320-349
In general 320
• Responsibility ex delicto 321
Responsibility ex contractu 322-346
' Subscriptions to shares 322
Contracts other than subscriptions to shares . . . 323-325
Rule at law 323
' Rule in equity 324
Contracts by existing corporation in anticipation
of extension of powers distinguished . . . 325
f Ratification" of pre-incorporation contract 326
"Adoption" of contract — new .contract on same
terms .... 327-337
In general 327
English rule . . 328
American rule — theory of continuing offer . . . 329
What is sufficient evidence of adoption or making
of new contract 330-333
In generai . . 330
Effect of mistake of law or fact . ... 331
Implied adoption or new contract . 332
Retention of benefits as evidence of adoption 333
Miscellaneous illustrations of principle that "adop-
tion " is really a new contract 334
Adoption of ultra vires contract . . 335
Corporation adopting lease liable as an original
lessee 336
268
? 307- § 415] SYNOPSIS
Kesponsibility of corporation for acts of promoters (continued) Seotioa
Effect of fraud of promoters procuring original
contract . . . 337
Quasi-contractual liability for benefits received under
contract which has not been adopted . . . 338-340
On principle . 338
The English cases 339
The American cases 340
Effect of provision in the incorporation paper directing
payment of preliminary expenses . . . . 341
Voluntary payment . . 342
Effect of statute directing payment 343
Rule in cases where promoters when making contract
did not intend a future corporation to be bound 344-346
In general . ... . . . 344
Assumption of contract by company . . . 345
Corporation formed to take over business of a firm 346
Appointment of agents for the future corporation . . 347
Whether knowledge of promoters imputable to company 348
Admissions of promoters 349
Right of corporation to the benefit of acts of pronjoters .... 350-356
Suits on contracts made prior to incorporation 350
Conveyances made for company's benefit prior to incorpora-
tion 351-354
In general ' 351
Trusts for future corporation 352
Cases distinguished 353
Property acquired by promoters in course of promotion, etc. 354
Assignments from promoters to company — taking over property
of a firm . .' 355
Survey for railway made prior to incorporation 356
Liabilities of promoters to persons not connected with the com-
pany 357-362
Contractual liability 357-361
After incorporation 357
Before incorporation 358-361
In general 358
What is suflBcient evidence of authority of co-promoter
as agent. 359
Liability distinguished from liability as members- of a
defectively incorporated company 360
How promoter's liability is discharged — effect of com-
pany's adoption of contract 361
Liability for torts 362
Suits by promoters on contracts made on behalf of projected corpora-
tion 363
Liabilities of promoters to the company 364-403
No duty of active care for interests of company 364
Fiduciary relation to company — three consequences 365
Comparison with directors 366
Liability for actual fraud and deceit 367
Rescission by corporation of contracts with promoters 368-374
In general . .' 368
269
PKOMOTKRS
Liabilities of promoters to the company (continued) Section
What disclosure is sufficient, and to whom it must be made
to render contract binding 369
Return of consideration as condition of rescission .... 370
Waiver of right to rescind . . . . 371
Laches of company . 372
Effect of dissolution of corporation on right of rescission . 373
Rights of individual shareholders 374
Liability of promoters to account to corporation for their
profits 375-399
In general 375
Classification of cases in which unlawful profits are made. 376
Profits made on transactions between promoters and persons
having dealings with company 377-382
Outright bribes . 377
Commissions and other veiled bribes 378
Mutual rights of bribe-giver and the company .... 379
Mutual rights of bribe-giver and the promoter .... 380
Company's right to recover bribe independent of right
to avoid its contract with bribe-giver ... 381
Promoter's right to set-off or recoup expenses . .
incurred on company's behalf 382
Profits made on a transaction between promoter and
company 383-390
In general 383
Purchase of property by promoter and resale to com-
pany — measure of promoter's profit 384
Continuation — Cape Breton Company's Case . . . 385
Continuation — Gluckstein v. Barnes, 1900 (A. C), 240 386
Dicta that promoter in making resale deals at arm's
length 387
Effect of false representation that property is resold at
same price paid by promoter 388
Sale to company by promoter holding option of purchase 389
Albion Steel Co. v. Martin, 1 Ch. D. 580 390
Profits made with money obtained from illegal sale of stock 391
Company's claim founded on breach of trust — bankruptcy
of promoter — limitations and laches .... . 392
Whether liability is several or joint 393
Burden of proof — fact of profit and non-disclosure . 394
What is sufficient disclosure of profit by promoter . 395-398
Question the same whether company seeks rescission of
transaction or recovery of profit 395
Disclosure must be actual, full, and frank 396
To whom the disclosure should be made — to directors,
shareholders, the public, etc 397
Where gift of profit to promoter is ultra vires of corpora-
tion 398
Liability of promoter to account for property acquired on
behalf of company 399
Liability of promoters in damages for breach of fiduciary duty to
company 400-402
In general 400
270
§ 307-§ 415] WHO ARE PROMOTERS § 307
Liabilities of promoters to the company {continued) Sectiou
Examples 401
Liability assimilated to liability for torts — non-joinder of
defendants 402
Penal liability of promoters to company 403
Liabilities of promoters to one another 404-411
Classification 404
Accountability for profits 405-408
In general — fiduciary relation of promoters to one another 405
Lungren v. Pennell, 10 W. N. C. (Pa.) 297 406
Deducting from profit expenses incurred for benefit of all
promoters . 407
Termination of fiduciary relation — abandonment of enter-
prise . 408
Contribution to losses and expenses 409
Liability on actual contracts between promoters 410-411
Liability on contract to form corporation ... 410
Effect of illegal features of projected corporation upon
legality of contracts between promoters ...... 411
Liability of promoters to individual shareholders and subscribers to
shares ... 412-416
Subscribers to shares as promoters . 412
Whether promoters occupy fiduciary relation towards sub-
scribers — liabiUty for non-disclosure 413
Assumption by promoters of fiduciary relation to shareholders 414
Liability for return of deposits upon abandonment of enterprise 415
§ 307-§ 310. Who are Promoters.
§ 307. In general — Not a definite legal Term. — The word
"promoter" is not a technical legal term, or "word of art,"
but belongs rather to the vocabulary of commercial affairs.*
Consequently, it is capable of no precise legal definition appli-
cable to all cases. In a general way, it designates any person
who knowingly participates in organizing and starting in busi-
ness an incorporated company.^ The state of being a promoter
is not a definite legal status — such as that of a shareholder or a
director — to which the law annexes certain rights and burdens.
"It is necessary to ascertain in each case what the so-called
' Whaley Bridge Co. v. Green, 5 longer, v. New Sombrero Phosphate
Q. B. D. 109, 111, per Bowen, J.; Co., 3 App. Cas. 1218, 1268; Cox v.
Twyeross v. Grant, 2 C. P. D. 469, National Coal, etc. Co. (W. Va.), 56
603 (per Bramwell, L. J.) ; Piits v. S. E. 494.
Stede Mercantile Co., 75 Mo. App. Cf. Sovih Missouri, etc. Co. v.
221, 226. Crommer (Mo.), 101 S. W. 22 (where
• Emma Silver Mining Co. v. the persons in question were held not
Lewis, 4 C. P. D. 396, 407 ; Twyeross to be promoters).
V. Grant, 2 C. P. D. 469, 541 ; Er-
271
§ 308 PROMOTERS [Chap. VI
promoter really did before his legal liabilities can be accurately
ascertained." ^
§ 308. Who are subject to Disability as Promoters. — The
nearest approach to any definite legal consequences attaching
to promoters qua promoters is found in that rule of law which
prohibits any one engaged in the promotion of an incorporated
company from deriving any secret advantage from his position.
In order that a person may be subject to this disability, he need
only participate intentionally in the organization or " flotation "
of the company.^ It would seem clear that a mere intention of
getting up a company without any overt act will not make a man
a promoter or create any fiduciary relationship.^ But in order
to be a promoter, it is not necessary that he should act as a prin-
cipal; a mere agent or servant of one financially interested in
the promotion of the company is deemed himself a promoter
within this rule.' So, the oflBcers of a corporation which is en-
gaged in promoting another corporation are themselves pro-
moters of the latter company.^ Of course, a person who employs
an agent to get up a company is a promoter ; ° qui facit per alium
facit per se. It has been held that one who acts merely as solici-
tor for a company in the matters attending and immediately fol-
lowing the incorporation is not a promoter ; ' but it is submitted
that no sound reason can be given for drawing any distinction in
this respect between solicitors and other agents or attorneys."
The objection may be raised that the printer who prints, a pros-
pectus or a mere clerk to whom it is dictated knowingly partici-
pates in the organization of the company, and would therefore
according to the rules just stated be subject to a promoter's disa-
bilities. The reply is that such would indeed be the case,' and
that any such printer or clerk who makes a secret profit out of
' Lydney, etc. Co. v. Bird, 33 Ch. ' Ex-Mission Land Co. v. Flash,
D. 85, 93 (per Lindley, L. J.). 97 Cal. 610, 627; 32 Pac. 600.
' See supra, cases cited p. 271 n. 2. ' Be Great Wheal Polffroth, 49
' Re Hess Mfg. Co., 21 Ont, App. L. T. 20.
66, 71, affirmed, 23 Can. Sup. Ct. 644. « Cf. BagnaU v. Carlton, 6 Ch. D.
* Lydney, etc. Co. v. Bird, 33 Ch. 371.
D. 85. ° "A man who carries about an
Cf. Grand Rapids Safely Deposit advertising board in one sense pro-
Co. V. Cincinnati Safe, etc. Co., 45 motes a company." Per Bowen, J.,
Fed. Rep. 671(headnote misleading), in Whaley Bridge, etc. Co. v. Green,
° Lagunas Nitrate Co. v. Lagunas 5 Q. B. D. 109, 111.
Syndicate (1899), 2 Ch. 392.
272
§ 307-§ 415] WHO ARE PROMOTERS § 310
his relation to the corporation would be accountable therefor to
the company. The great difference between such a subordinate
and the more dignified persons whom we are apt to think of as
promoters is that the opportunities of the former for making
secret profits out of their relationship to the intended corpora-
tion are much more limited. On the other hand, an independent
contractor by dealing with promoters does not ipso facto become
himself a promoter; to be a promoter, one must either occupy
such a position as would make him an agent of the company if
it were already incorporated, or he must in some other way as-
sume the burden of looking after the interests of the unborn
corporation.^ Similarly, a landowner, who employs a broker to
sell his property is not to be deemed a promoter of a corporation
which the broker without any authority or even suggestion from
the landowner organizes for the purpose of purchasing the prop-
erty.^ One who agrees to become a director in a company to be
organized becomes from that time a promoter.' And it would
seem very clear that any one who knowingly aids promoters
financially and otherwise in carrying out their scheme becomes
himself liable to all the disabilities of a promoter.*
§ 309. A Question for Jury. — At all events, the question
whether or not a person is a promoter is a question of fact ; and
may, it has been held, in actions at law be left to the jury with-
out any definition of the term to guide them.'
§ 310. Promoters after Incorporation. — The peculiarities of
the law applicable to promoters apply not merely while the
corporation has no existence save in the brains of its projectors,
but also, at least to a large extent, after it has a technical legal
existence, but while it is still in a state of undeveloped infancy,
and not yet Wholly capable of managing its own affairs in the
regular manner. Accordingly, one may become a promoter of a
' South Missouri, etc. Co. v. ties as promoters ; but conceded —
Crammer (Mo.), 101 S. W. 22. unnecessarily, and, it is submitted,
' Forest Land Co. v. Bjorkquist, without good reason — that they
110 Wise. 547 ; 86 N. W. 183. occupied no fiduciary relation to the
' Nantr-y-Glo, etc. Ironworks Co. company.
V. Grave, 12 Ch. D. 738. " Emma Silver Mining Co. , v.
* Fountain Spring Park Co. v. Lewis, 4 C. P. D. 396. This practice
Roberts, 92 Wise. 345 ; 66- N. W. seems to have been followed in
399; 53 Am. St. Rep. 917. The Twycross v. Grant, 2 C. P. D. 469,
court held the persons in question and Whaley Bridge Co. v. Green, 5
to the same liabilities and disabili- Q. B. D. 109.
VOL. I. — 18 273
§311
PROMOTERS
[Chap. VI
company after its incorporation,' and those who have formerly
been promoters do not cease to be such on the registration of
the company.^ A person who is not a director may be a pro-
moter of a company which is already incorporated but the capi-
tal of which has not been subscribed and which has therefore
not yet commenced operations as a full-fledged going concern.^
But where a company has been organized and operated by a
board of directors for as much as a year, it has been held that the
relation of promotership no longer exists, and that a former pro-
moter may then dealf with the company at arm's length/
§ 311-§ 315. Whether Promoters are Partners.
§ 311. In general. — In spite of some decisions to the con-
trary,' most of which have been overruled, it is now almost uni-
versally held that persons do not become partners merely by
co-operating in the formation of a corporation." This is true
both of those whose connection with the project consists merely
in subscribing for shares in the intended company ' and of those
S. W. 163 ; Garnett v. Richardson,
35 Ark. 144 ; Ryland v. HoUinger,
117 Fed. 216; Mt. Carmd Tel. Co.
V. Mt. Carmd & Fleming Tel. Co.
(Ky.), 84 S. W. 515.
' Reyndl v. Lewis, 15 M. & W.
517; Walstah v. Spottiswode, 15 M.
& W. 501 ; Batard v. Hawes, 2 E. &
B. 287 ; Ward v. Brigham, 127 Mass.
24; Hornblower v. CrandaU, 7 Mo.
App. 220, 230-231 (semble), af-
firmed, 78 Mo. 581; Wilson v.
Hotchkiss, 2 Ont. L. Rep. 261
(semble); WUkins v. Davies, 16
Vict. L. R. 70.
See also West Point Foundry Ass.
V. Brown, 3 Edw. Ch. 284 (N. Y.) ;
Schantz v. Oakman, 10 N. Y. App.
Div. 151; 41 N. Y. Supp. 746; and
infra, § 359.
The status of persons who form
a supposed corporation and, assum-
ing the validity of the incorporation,
authorize the transaction of business
is elsewhere considered. See supra,
§ 293.
' Hutton V. Thompson, 3 H. L. C.
161 ; Ward v. Brigham, 127 Mass. 24.
V. Grant, 2 C. P. D.
469, 503, 540, 541.
' Lagunas Nitrate Co. v. Lagunas
Syndicate (1899), 2 Ch. 392, 428;
Pietsch V. MUbrath, 101 N. W. 388,
391; 102N.W. 342; 123 Wise. 647;
107 Am. St. Rep. 1017.
' Emma Silver Mining Co. v.
Lewis, 4 C. P. D. 396, 407.
• Russell v. Rock Run Fud Gas
Co., 184 Pa. St. 102, 107-108; 39
Atl. 21.
' Holmes v. Higgins, 1 B. & C.
74; Lv^as v. Beach, 1 Man. & Gr.
417, which cases are explained in
Lindley on Partnership, 7th ed., 19.
See also Chandler v. Bacon, 30
Fed. Rep. 538 (where no such point
was necessary to the decision, since
the liability of promoters for secret
profits, like that of directors, is
•doubtless joint and several) ; Getty v.
Devlin, 54 N. Y. 403, 413 (reported
on a subsequent appeal in 70 N. Y.
504); Emery v. Parrott, 107 Mass.
95; Dole v. Wooldredge, 135 Mass.
140; Queen City Furniture, etc. Co.
V. Crawford, 127 Mo. 356, 364; 30
274
§ 307-§ 415] WHETHER PROMOTERS ARE PARTNERS § 313
who are the active organizers of the corporation.' The rule is
the same in equity as at law,^ and appUes whether the promoters
anticipate incorporation by royal charter, by special act, or
under a general law.^
§ 312. Under the British Companies Act of 1844 — Outline
of Practice. — The extent to which the doctrine is carried that
promoters are not partners is shown by the many and leading
cases which arose under the English Companies Act of 1844.*
Under this statute, the promoters before issuing a prospectus
were required to deposit at the Registry of Joint Stock Com-
panies a schedule containing certain particulars as to the pro-
posed company, including its name, its business or purpose, etc.,
and the names and addresses of the promoters. Upon the regis-
tration of this schedule, the promoters became entitled to a cer-
tificate of provisional registration, upon the issuance of which the
company was said to be "provisionally registered." The pro-
moters were thereupon permitted to publish a prospectus, re-
ceive subscriptions to the company's capital, and do a number
of other acts' incidental to its promotion. The subscribers to the
capital then executed a "deed of settlement" containing such
particulars about the company as are usually inserted in the in-
corporation paper; and when this deed of settlement was re-
corded the company was said to be "completely registered," and
was thenceforth a corporation. Companies which required a
special act of parliament for their successful operation, such as
railways, turnpikes, etc., were in the same way registered provi-
sionally in anticipation of the passage of the desired special act.
It seems to have been customary for the affairs of the company
during the period of its f»rovisional registration to be managed
by a "provisional committee," ^ who, in turn, seem often to have
delegated their active duties to a "committee of management." *
§ 313. Members of Provisional Association, Provisional
Committees, etc., not Partners. — From the foregoing sketch one
readily perceives how much more formal such a preliminary
' Bright v. Hutton, 3 H. L. C. 341 » See Beynell v. Lewis, 15 M. &
(distinguishing Hutton v. UpfM, 2 W. 517 ; WUson v. Curzon, 15 M. &
H. L. C. 674). W. 532.
2 Bright v. Hutton, 3 H. L. C. 341. » See Tanner's Case, 5 De G. & S.
' Hamiltonv. Smith,5JuT.,N.s., 32. 182.
< 7 & 8 Vict., c. 110, repealed by
19 & 20 Vict., c. 47, § 107.
275
§ 314 PROMOTERS [Chap. VI
organization was than anything serving a similar purpose with
which Americans are in practice famiUar. Nevertheless, it was
held in England that neither the members of a company provi-
sionally registered/ nor its provisional committeemen/ nor even
the members of the innermost circle, the committee of manage-
ment,' were partners. This was true although such a provision-
ally registered company was so far an "association" as to be
within the acts for the winding-up of companies and "associa-
tions." * For instance, a provisionally registered company al-
though, as just stated, held to be within the winding-up acts,
could not be wound up by a court of equity as a partnership.^
§ 314. Provisional Committees, etc., under other Statutes. —
The custom of promoting a projected corporation by means of
provisional committees, etc., which originated in the Companies
Act of 1844, seems to have to some degree survived in England
the repeal of that statute ; and we accordingly read occasionally
of provisional committees and provisional directors of com-
panies intended to be organized under the Act of 1862.* A
"provisional director" has been defined as one who is to be a
director if the scheme succeeds and the company is incorporated.^
A fortiori, however, any such loose, informal association of the
promoters or of the "provisional directors" which has no place
in the scheme of the statute, and its still more informal Ameri-
can counter-part, cannot amount to a partnership.
§ 315. Formation of Partnership between Promoters. — Of
course, no rule of law prevents the formation of a partnership
for the purpose of promoting a corporation ; and instances might
be given where this in fact has been done.^ But to establish such
' Wcdstab V. Spottiswode, 15 M. & of contributories " in the winding-up
W. 501; Ex parte Lloyd, 1 Sim., of such "associations."
N. s., 248. " Hamilton'v.Smith,5J\xr.,N. s.,32.
' BeyneU v. Leiuis, 15 M. & W. Cf . Ward v. Brigham, 127 Mass. 24.
517; Norris v. CotUe, 2 H. L. C. " Maddick v. Marshcdl, 17 C. B.,
647; McEwan v. Campbell, 2 Macq. n. s., 829.
H. L. 499. ' Burbidge v. Morris, 3 H. & C.
3 Burnside v. Dayrell, 3 Ex. 224, 664, 669, per Martin, B.
230. ' E. g. Walker v. Anglo-American,
* Bright V. Hutton, 3 H. L. C. 341. etc. Co., 72 Hun (N. Y.) 334, 340;
Many of the English cases on the 25 N. Y. Supp. 432.
Uabilities of promoters to third per- As to a "syndicate" as equiva-
sons and inter sese have come up on lent to a partnership in such matters,
the question whether or not a pro- see Hambleton v. Rhind, 84 Md. 456 ;
moter should be placed on the "hst 36 Atl. 597 ; 40 L. R. A. 216.
276
§ 307-§ 415] RESPONSIBILITY OF CORPORATION § 317
a condition unusual circumstances must be shown, since the
partnership relation cannot be inferred from the fact of co-
operating as promoters.
§ 316. Promotion by means of a Preliminary Corporation. —
As promoters may form a partnership to carry out their enter-
prise of organizing a company, so they may form a preliminary
corporation for the same purpose ; '■ but such cases are uncom-
mon except where a very large company is forming. Of course,
many corporations formed for the transaction of a general finan-
cial business, such as trust companies, frequently take part in the
promotion of other corporations, but in such cases the trust com-
panies are governed by the same rules of law as individual
promoters.
§ 317-§ 349. RESPONSIBILITY OF CORPORATION
FOR ACTS OF PROMOTERS.
§ 317-§ 319. Responsibility for Acts done after Incorporaticm.
§ 317. In general. — While, as we have seen,^ a person may
be a promoter of a company even after it has been incorporated,
yet in respect to the power of promoters to bind the corporation
by their acts and agreements, the law draws a sharp distinction
between those acts which are done before, and those which are
done after, the incorporation. After the company has acquired a
corporate existence, the ordinary principles of the law of agency
apply; and all that is necessary in order to make the company
responsible for the torts or contracts of its promoters is to show
that they were committed or made in the scope of their authority
as agents. So, the liability of the company to pay for services
rendered by the promoters after incorporation will depend
entirely upon whether or not the understanding was that the
promoters should receive compensation.^
' An instance may be found in = Supra, § 310.
Lagunas Nitrate Co. v. Lagunas 8yiv- ' Cf. Powell v. Georgia, etc. Ry.
dicate (1899), 2 Ch. 392. Co., 121 Ga. 803; 49 S. E. 759.
277
§ 318 PROMOTKRS [Chap. VI
§ 318. What is Date of Incorporation for this Purpose. — The
question may be raised, however, whether the technical date of
incorporation — that is, under the common general incorporation
laws, the date of the recording of the memorandum of associa-
tion or incorporation paper — or the date of the first organiza-
tion of the company for the transaction of business, is to be
regarded as the crucial time within the meaning of this rule.
Under the old system of incorporation by special act, where the
corporation did not come into being until the act was accepted
by the corporators by organizing under it, this question could
not so easily arise. But under the modern general laws where
the corporation springs into existence immediately on registration
without the necessity of any further acceptance or organization,^
it may become very material. The argument may be urged, on
the one hand, that while the company has from its registration
a technical existence, yet it is still in a period of helpless infancy,
and that not uniil it organizes for business does its career actually
commence. On the other hand, it may be said, after the com-
pany's existence as a legal person begins, the technical objection
that it cannot be bound by what occurred prior to its birth van-
ishes, and it would therefore seem that effect should be given
even as against the corporation to contracts made with authority
derived from the corporators. This seems to be the law.^ The
mere execution of the incorporation paper before its registration
does not, however, for this purpose, effect an incorporation.^
§ 319. After Incorporation De Facto but not De Jure. —
Acquisition of a mere de facto corporate existence gives the com-
pany thenceforward a capacity to contract, and the same prin-
' Glymont Improvement Co. v. 40 Md. 395 ; Rathbone v. Tioga Nav.
Toler, 80 Md. 278, 289 ; 30 Atl. 651, Co., 2 Watts & Serg. (Pa. ) 74 ; Low
and supra, § 163. v. Connecticut, etc. R. R. Co., 45 N. H.
' Hall V. Vermont, etc. R. R. Co., 370.
28 Vt. 401, 406-407; Vermont Cm- But see Ex parte Hardy, 41 Ch.
tral R. R. Co. v. Clayes, 21 Vt. 30, D. 215, 223-226, 237 (headnote in-
35-36 ; ■Harrison v. Vermont Man- adequate) ; Whetstone v. Crane
ganese Co., 1 N. Y. Misc. 402; 20 Bros. Mfg. Co., 1 Kans. App. 320;
N. Y. Supp. 894; Legrand v. Man- 41 Pac. 211; Gent v. Manufacturers,
hattan Mercantile Ass., 80 N. Y. etc. 7?is. Co., 107 111. 652 ; McVicker
638 (headnote inadequate) ; Badger v. Cone, 21 Oreg. 353 ; 28 Pac. 76 ;
Paper Co. v. Rose, 95 Wise. 145; Aspen Water, etc. Co. v. Aspen, 5
70 N. W. 302 ; 37 L. R. A. 162. Colo. App. 12 ; 37 Pac. 728.
See also Kelner v. Baxter, 2 C. P. ' See eases cited infra, § 323.
174 ; Grape Sugar, etc. Co. v. Small,
278
§ 307-§ 415] RESPONSIBILITY OF CORPOEATION § 322
ciples apply as if the incorporation had been de jure} It has been
said that where a de facto corporation becomes incorporated de
jure, the legally organized corporation is liable for the debts of
the irregularly incorporated company.^ On the other hand, an
estoppel resting upon the members of an unincorporated body
to deny their own incorporation cannot bind a lawful corpora-
tion which they subsequently organize.*
§ 320-§ 349. RESPONSIBILITY FOR ACTS DONE PRIOR
TO INCORPORATION.
§ 320. In general. — The responsibility of corporations for
acts done by their promoters prior to incorporation has been the
subject of contention in not a few legal battles. Of course, no
one denies the power of promoters to bind the future company
by moulding its constitution as expressed in the incorporation
paper. This very power is the raison d'etre of much that is pecu-
liar in the law of promoters. But the question now in hand relates
to their power to bind the intended company by transactions
dehors the record.
§ 321. Responsibility Ex Delicto. — Probably no one has ever
contended that the corporation should be liable in damages for
torts committed by its promoters before it had any existence; and
certainly no such contention could be maintained.*
§ 322-§ 346. RESPONSIBILITY EX CONTRACTU.
§ 322. Subscriptions to Shares. — With respect to contracts
the case is not so simple. Subscriptions to shares of capital, it
should be premised, differ in many respects from other con-
tracts, and have therefore received separate consideration.^
' See Bergen v. Porpoise Fishing ' Bradley Fertilizer Co. v. South
Co., 41 N. J. Eq. 238; 3 Atl. 404; Publishing Co., 4 N. Y. Misc. 172,
Grand River Bridge Co. v. Rollins, 23 N. Y. Supp. 675.
13 Colo. 4; 21 Pac. 897. » Karberg's Case (1892), 3 Ch.
2 Georgia Ice Co. v. Meakin, 70 1, 13.
Ga. 637. See also McCallum v. Pursell
Cf. Calumet Paper Co. v. Stotts Inr- Mfg. Co., 1 N. Y. Supp. 42&
vestment Co., 96 Iowa 147 ; 64 N. W. ^ Supra, § 238-§ 260.
782; 59 Am. St. Rep. 362.
279 "
§323
PROMOTEKS
[Chap. VI
§ 323- § 325. Contracts other than Subscriptions to Shares.
§ 323. Rule at Law. — The rule at law is very simple, and
has commanded, it is believed, universal acceptance: no con-
tract made by promoters on behalf of a corporation projected
but not yet formed, can, propria vigore and without any adoption
or confirmation by the corporation, bind the company when in-
corporated,' unless by virtue of some express statute ; and " this ■
is so although the, promoters become, at the creation of the cor-
poration, its only stockholders, directors and ofiicers." ^ This
rule is founded upon the basic principle that no one can be an
agent for a person — the corporation — not yet in existence.
Consequently, the rule clearly applies to all such contracts made
at any time before the very moment of incorporation. Hence, it
applies to a contract made subsequent to the execution of the
memorandum of association or incorporation paper before its
registration.^ Other questions as to the point of time which
1 Kelner v. Baxter, 2 C. P. 174 ;
Payne v. New South Coal Co., 10 Ex.
283 ; Qunn- v. London, etc. Fire Ins.
Co., 12 C. B., N. s., 694; Franklin
Fire Ins. Co. v. Hart, 31 Md. 59;
Munson v. Syracuse, etc. B. R. Co.,
103 N. Y. 58, 75-76; 8 N. E. 355;
Western Screw, etc. Co. v. Consley,
72 111. 531 ; Buffington v. Bardon,
80 Wise. 635 ; 50 N. W. 776 ; Long
V. Citizens' Bank, 8 Utah 104; 29
Pac. 878 ; Carey v. Des Moines, etc.
Mining Co., 81 Iowa 674; 47 N. W.
882 ; Tift v. Quaker City Nat. Bank,
141 Pa. St. 550 ; Gent v. , Manur-
facturers, etc. Ins. Co., 107 111. 652;
Battelle v. Northwestern Cement, etc.
Co., 37 Minn. 89 (semble) ; 33 N. W.
327; Weatherford, etc. Ry. Co. v.
Granger, 86 Tex. 350 ; 24 S. W. 795 ;
40 Am. St. Rep. 837; Little Rock,
etc. R. R. Co. V. Perry, 37 Ark. 164,
192, 193 (rulings on plaintiff's first
and defendant's second instruction) ;
Winters v. Huh Mining Co., 57 Fed.
Rep. 287; Adams v. Empire Laun-
dry Machinery Co., 4 N. Y. Supp.
738; Pittsburg, etc. Mining Co. v.
QuintreU, 91 Tenn. 693, 695, 696;
20 S. W. 248 (semble); Bash v.
Culver Gold Mining Co., 7 Wash.
122 ; 34 Pac. 462.
Cf. BluehUl Academy v. Witham,
13 Me. 403.
As to mechanics' liens, see Davis
V. MaysvUle Creamery Ass'n, 63 Mo.
App. 477; McFaU v. McKeesporf,
etc. Co., 123 Pa. St. 259 ; 16 Atl. 478 ;
Chicago Bldg. & Mfg. Co. v. Tal-
botton Creamery, etc. Co., 106 Ga. 84;
31 S. E. 809; Davis v. Ravenna
Creamery Co., 48 Nebr. 471 (head-
note inadequate); 67 N. W. 436;
Coyote, etc. Co. v. Ruble, 8 Oreg.
284 ; Bank of Forrest v. OrgUl Bros.,
etc. Co., 34 So. 325 ; 82 Miss. 81.
The liability of a corporation
quasi ex contractu for benefits con-
ferred upon it prior to its formation
is discussed infra, § 338-§ 340.
' Battelle v. Northern Cement, etc.
Co., 37 Minn. 89, 90 ; 33 N. W. 327 ;
Scadden Flat, etc. Co. v. Scadden, 121
Cal. 33 ; 53 Pac. 440 (semble).
But see Paxton v. Bacon Mill, etc.
Co., 2 Nev. 257; Chicago Bldg. &
Mfg. Co. V. Talbotton Creamery, etc.
Co., 106 Ga. 84; 31 S. E. 809.
3 Kelner v. Baxter, 2 C. P. 174.
But see argument for appellee in
280
§ 307-§ 415] -RESPONSIBILITY OF CORPORATION § 324
should be taken as the date of incorporation for the purpose of
this rule have been considered above.'
§ 324. Rule in Equity. — In equity more diversity of opinion
has existed. In some comparatively early cases, the promoters
of a special act of incorporation agreed with a third party, in
consideration of his withdrawal of opposition to the passage of
the act, that the company when incorporated should pay a sum
of money or exercise its franchise in some particular way. Lord
Cottenham held that the corporation, having necessarily re-
ceived the benefit of the contract, and indeed owing its very
existence thereto, might be enjoined from violating the terms of
the agreement.^ But the House of Lords subsequently held that
at all events no such agreement could be enforced against the
company unless the acts to be done thereunder by the corpora-
tion were within powers conferred in the act of incorporation ; '
and the opinion was emphatically expressed that, even if they
were, a court of equity would not enforce the contract against
the company. Lord Cottenham's view was severely criticised,*
and. the fallacy lurking in the notion that the existence of the
corporation as an entity distinct from its corporators is a mere
technicality was exposed. Upon incorporation new rights and
interests arise; and subsequent shareholders have a right to
insist that the corporation be not shackled from its very birth by
burdens of which they cannot be supposed to have notice. Al-
though, in a later case, it was said that such a contract by pro-
moters might be specifically enforced by the corporation,^ which
Grape Sugar, etc. Co. v. Small, 40 C. C. A. 502, is perhaps based on the
Md. 395, 397-398. Cf. supra, § 133. same principle.
' Supra, § 318 and § 319. ' Caledonian By. Co. v. Helens-
' Edwards v. Grand Junction By. burgh, 2 Macq. H. L. 391 ; Preston
Co., 1 Myl. & C. 650; Stanley v. v. Liverpool, etc. By. Co., 5 H. L. C.
Chester, etc. By. Co., 3 Myl. & C. 605 (semble). Accord : Earl of
773. Accord : Earl of Lindsey v. Shrewsbury v. North Staffordshire
Great Northern By. Co., 10 Hare By. Co., lEq. 593; Leominster Canal
664. Nav. Co. v. Shrewsbury, etc. By. Co.
See also Gooday v. Colchester, etc. 3 K. & J. 654, 668.
By. Co., 17 Beav. 132. Lord Gotten- * Caledonian By. Co. v. Helens-
ham's views were referred to with burgh, 2 Macq. H. L. 391 ; Preston
approval in Low v. Connecticut, etc. v. Liverpool, etc. By. Co., 5 H. L. C.
B. B. Co., 45 N. H. 370, 375-376; 605; Earl of Shrewsbury v. North
Little Bock, etc. By. Co. v. Perry, 37 Staffordshire By. Co., 1 Eq. 593.
Ark. 164, 187 et seq. ; Cook v. Sterl- ^ Bedford, etc. By. Co. v. Stanley,
ing Electric Co., 150 Fed. 766; 80 2 Johns. & H. 746.
281
§ 325 PROMOTERS [Chap. VI
dictum, in view of the equitable requirement of mutuality as to
the right to specific performance, would perhaps imply that the
same remedy might have been invoked against the corporation,
yet there can be little doubt that the views of the members of the
House of Lords embody sound doctrine, and that in equity as
at law a corporation is never bound, in the absence of some ac-
quiescence or adoption, to abide by contracts made on its bejialf
before its creation.' For this reason, where property was set-
tled in trust for a corporation to be thereafter organized, it was
held that the company after its formation could compel the trus-
tee to execute the trust in spite of its refusal to carry out an agree-
ment made by the settlor of the trust, who was a promoter of the
company, that the corporation should pay the trustee a certain
compensation for his services.^ The ground of the decision was
that the contract of the promoter bound himself alone, and that
the company could not be required to perform a contract by
which it was not bound as a condition to the enforcement of a
valid trust in its favor. So, an agreement between promoters
that one of them shall own a sixth of the company's capital will
not justify an injunction restraining the corporation from in-
creasing its capital and thereby diminishing the proportionate
interest of the last-mentioned promoter.'
§ 325. Contracts by Existing Corporation in Anticipation of
Extension of Powers distinguished. — From the class of con-
tracts considered in the last paragraph, one should carefully
distinguish contracts made by an existing corporation in antici-
pation of an extension of its powers. If the powers are enlarged
as expected, such contracts are binding even though they would
have been vltra vires if the enlargement had not been had. Thus,
where an existing railway company applied for an act of parlia-
ment to extend its powers by conferring authority to construct
a branch line, an owner of land lying in the proposed new route
^ Re Rotherham Alum Co., 25 Ch. (Colo.), 86 Pac. 335; PenneU v.
D. 103, 109 (headnote inadequate) ; Lothrop, 191 Mass. 357.
Natal Land, etc. Co. v. Pauline Col- But see Paxton v. Bacon Mill, etc.
liery Syndicate (1904), A. C. 120 ; Co., 2 Nev. 257.
Munson v. Syracuse, etc. R. R. Co., ' Hecla, etc. Mining Co. v.
103 N. Y. 58, 75-76; 8 N. E. 355; O'Neill, 19 N. Y. Supp. 592.
Park V. Modern Woodmen of Amer- ' Martin v. Remington-Martin
ico, 181 III. 214, 232-234; 54 N. E. Co., 95 N. Y. App. Div. 18; 88
932 ; Miser Gold, etc. Co. v. Moody N. Y. Supp. 573.
282
§ 307-§ 415] RESPONSIBILITY OF CORPORATION § 326
withdrew his opposition to the bill in consideration of the rail-
way's agreement to purchase the land from him at a certain
figure if the act should pass; and the House of Lords held that
this contract would be specifically enforced in equity.' In such
cases, the company after the amendatory act remains the same
Lgal person as before, and there is therefore no question of
enforcing against a corporation contracts made before it came
into existence; the distinction is obvious.
§ 326. " Ratification " of Pre-incorporation Contract. — Con-
tracts made on behalf of a company prior to its incorporation
are obviously incapable of ratification by the company, if " rati-
fication " be used with the ordinary meaning which it bears in the
law of agency.^ For, in order that a contract by one acting as
agent should be ratified by the party on whose behalf it was
made, the latter must have been in existence when the contract
was made. Ratification, properly so called, must relate back
to the time of the making of the contract. There can be no
technical ratification of a contract made before the corporation
had existence;' and this is true not only at law but also in
equity.''
> Eastern Counties By. Co. v. » Scott v. Lord Ehury, 2 C. P. 255 ;
Hawkes, 5 H. L. C. 331 (headnote Re Dale & Plant, 61 L. T. 206; Mcr
misleading). Arthur v. Times Printing Co., 48
Cf. Great Western By. Co. v. Minn. 319; 51 N. W. 216; 31 Am.
Birmingham, etc. By. Co., 2 Phill. St. Rep. 653; Stainsby v. Frazer's
597 ; Gooday v. Colchester, etc. By. Metallic Life Boat Co., 3 Daly N. Y.
Co., 17 Beav. 132 ; Scottish N. E. 98 ; Koppel v. Mass. Brick Co., 192
By. Co. V. Stewart, 3 Macq. H. L. Mass. 223 ; 78 N. E. 128.
382 ; Low v. Connecticut, etc. B. B. Contra : Stanton v. New York,
Co., 46 N. H. 284, 295. etc. By. Co., 59 Conn. 272; 22 Atl.
' "Ratification" is often used in 300; 21 Am. St. Rep. 110 (semble);
this connection as synonymous with Whitney v. Wymun, 101 U. S. 392.
"adoption"; Schreyer v. Turrwr Cf. Dubuque Female College v.
Flouring Mills Co., 29 Oreg. 1, 6; Township District, 13 Iowa 555,
43 Pae. 719 ; Queen City, etc. Co. v. 660-561.
Crawford/ 127 Mo. 356; 30 S. W. * Be Empress Engineering Co.,
163. 16 Ch. D. 125 ; Natal Land, etc. Co.
See also Wood v. Whelen, 93 111. v. Pauline Colliery Syndicate (1904),
153, 164-165 ; Alexander v. Winters, A. C. 120 ; Pennell v. Lothrop, 191
23 Nev. 475, 485; 49 Pac. 116. Mass. 357.
233
§ 327 PROMOTERS [Chap. VI
§ 327-§ 337. Adoption of Contract — New Contract on
same Terms.
§ 327. In general. — In many American cases it has been
thought that the company may be rendered liable by adoption of
the contract.' If " adoption " be used as synonymous with ratifi-
cation,^ it is open of course to the same objections ; and if, as is
generally the case, it is used in a different sense, it merely ob-
scures the real nature of the transaction, which consists in the
making of a new contract by the corporation. For, nice reason-
ing leads irresistibly to the conclusion that no merely unilateral
act on the part of the company with reference to such a contract
can establish contractual relations between the company and
the third party. In order to effect that result, there must be
mutual assent, a meeting of minds, between the corporation
and the third party.^ ■ In other words, there must be a new con-
tract; and it is in the sense of the making of a new contract
that " adoption " is generally used.*
§ 328. English Rule. — The making of a new contract is,
then, the only logical and thoroughly satisfactory method of
rendering such ante-incorporation contracts obligatory between
the company and the third party; and the EngUsh cases carry
this doctrine to the uttermost. Thus, it is held in England
that adoption and confirmation by the deed of settlement or its
modern equivalent, the memorandum of association, or by the
articles of association, will not render the contract binding on
the company;^ and this is so because the memorandum or
' E. g. Schreyer v. Turner Flour- Natal Land, etc. Co. v. Pauline Col-
ing Mills Co.,' 29 Oreg. 1 ; 43 Pac. liery Syndicate (1904), A. C. 120.
719; Colorado Land, etc. Co. v. * "There can be no difference
Adams, 5 Colo. App. 190; 37 Pac. between its making a contract by
39 ; Pittsburg, etc. Mining Co. v. adopting an agreement originally
Quintrell, 91 Tenn. 693; 20 S. W. made in advance for it by promoters,
248 ; Thistle v. Jones, 45 N. Y. Misc. and its making an entirely new con-
215; 92 N. Y. Supp. 113; Rabbins tract." Battelle v. Northwestern
V. Bangor Ry.,etc. Co., 62 Atl. 136; Cement, etc. Co., 37 Minn. 89, 90;
100 Me. 496; 1 L. R. A., n. s., 963; 33 N. W. 327; per Gilfillan, C. J.
and many other cases. See also Little Rock, etc. Ry. Co.
' Cf. Pennell v. Lothrop, 191 v. Perry, 37 Ark. 164, 193 (ruling
Mass. 357 (where it was said that on defendant's second insl ruction) ;
the contract could not become bind- Wasser v. Western Land, etc. Co., 97
ing on the corporation by adoption). Minn. 460 ; 107 N. W. 160.
' Penn Match Co. v. Hapgood, " Gunn v. London, etc. fire Ins.
141 Mass. 145, 148; 7 N. E. 22; Co., 12 C. B., n. s., 694 (deed of set-
284
§ 307-§ 415] RESPONSIBILITY OF CORPORATION § 329
articles cannot constitute a contract between the company and
non-members.' It has also been held in England that confir-
mation by the directors is insufficient to bind the corporation
to the contract.^ But if this conclusion is to be supported, the
result should certainly not be biade to depend on a mere question
of words — whether the directors use the word "confirm" or
some term more appropriate to the making of a contract. A
more satisfactory ground is that confirmation by the directors
is a unilateral act to which the intended other party to the con-
tract is not privy, and that therefore the meeting of minds
essential to the formation of a new contract is lacking.
§ 329. American Rule — Theory of Continuing Ojfer. — ■ On
the other hand, when a person makes a contract with one who
professes to act on behalf of a corporation to be thereafter
formed, it would seem that here should be taken to be a con-
tinuing offer on his part to epter into a like contract -with the
company when incorporated.' According to this view, any
action on the company's part, communicated to the other party,
evincing a desire to abide by the contract would amount to an
acceptance of the offer, and therefore complete the formation
of a new contract. This, it is believed, represents the law in
most of the United States ; and this is usually what is meant when
it is said that a pre-incorporation contract may be adopted by
the company so as to become binding on it. In England, how-
ever, as the cases cited in the last paragraph indicate, this theory
of a continuing offer seems not to have met with approval ; and
accordingly in England a new offer and acceptance (both of
which, however, may be implied rather than express) are neces-
sary in order to bind the company. Right here lies the differ-
ence, and, it is believed, the only difference between the English
and American law on this subject. In America, a unilateral act,
namely, acceptance by the company of what is deemed to be
tlement) ; Be Northumberland Ave. ' Pratt v. Oshkosh Match Co., 89
Hotel Co., 33 Ch. D. 16 (articles of Wise. 406; 62 N. W. 84; Penn
association). Match Co. v. Hapgood, 141 Mass.
■ Eley V. Positive Life Ass. Co., 1 145, 148, 149 ; 7 N. E. 22 (semble) ;
Ex. D. 20 ; Browne v. La Trinidad, Holyoke Envelope Co. v. U. S. En-
37 Ch. D. 1. velope Co., 182 Mass. 171 ; 65 N. E.
= Re Dale & Plant, 61 L. T. 206; 54 (semble).
North Sydney Investment, etc. Co. v.
Higgins (1899), A. C. 263, 271
(semble).
285
§ 330 PROMOTERS [Chap. VI
an existing offer is enough: in England, there must be a new
offer by the other party to the contract, and of that offer an
acceptance by the company.
§ 330. What is sufficient Evidence to establish Adoption, or
Making of New Contract — In general. — At all events, it is
everywhere agreed that if the evidence is sufficient to establish
a new contract the company is bound ; ' and whether or not the
proof is sufRcient for that purpose is a question of fact in each
case, which in actions at law must be left to the jury, so that
uniformity of decision could not be expected.^
§ 331. Ejjeet of Mistake of Law or Fact. — It has been held
in England in the matter of the Northumberland Avenue Hotel
Company, that a new contract cannot be inferred from acts done
by the company in the belief that the anterior agreement was
binding upon it ; for example, where under such mistaken belief
the company assented to a modification in the terms of the old
agreement, there was held to be no new contract.^ But this
principle is of doubtful soundness; for while stronger evidence
of intention would be required where the company was laboring
under such a mistake, yet if a mutual intent on the part of the
company and the stranger that the agreement should be carried
out is clearly proved, it would seem to be immaterial how that
intention came about, whether by mistake of law or otherwise.
Accordingly, a tendency to distinguish the Northumberland
Avenue Hotel Case is observable.* But a Missouri court has
' Re Dale & Plant, 61 L. T. 206. has been held bound are : Touche v.
Regarded as a new contract, the Metropolitan Warehousing Co., 6 Ch.
adoption of a promoters' agreement 671 ; SpiUer v. Paris Skating Rink
in order to be binding, must be Co., 7 Ch. D. 368; Seymour v.
supported by a consideration. Cf. Spring Forest, etc. Ass'n, 144 N. Y.
Reichwald v. Commercial Hotel Co., 333, 341 ; 39 N. E. 365; 26 L. R. A.
106 111. 439 ; Holyoke Envelope Co. 859 ; Bomer v. Am. Spiral, etc. Co.,
V. U. S. Envelope Co., 182 Mass. 81 N. Y. 468; Colorado Land, etc.
171 ; 65 N. E. 54. Co. v. Adams, 5 Colo. App. 190 ; 37
' See Davis v. Hillsboro Creamery Pac. 39 ; Reichwald v. Commercial
Co., 10 Ind. App. 42 ; 37 N. E. 549 Hotel Co., 106 111. 439 ; Bruner v.
(a case which goes very far in holding Brown, 139 Ind. 600, 602 ; 38
that "adoption" by the company N. E. 318; Dvimque Female College
had not been proved). v. Township District, 13 Iowa 555 ;
' Northumberland Ave. Hotel Co., Davis v. Dexter Butter, etc. Co., 52
33 Ch. D. 16. Kans. 693 ; 35 Pac. 776 ; Bridgeport,
* Howard v. Patent Ivory Co., etc. Ice Co. v. Meader, 72 Fed. 115,
38Ch. D. 156. 119-120; 18. C. C. A. 451; Mc-
Other cases in which the company Donough v. Bank of Houston, 34
286
§ 307-§ 415] EESPONSIBILITY OF CORPORATION § 332
held that the "adoption" of an ante-incorporation contract, or
the making of a new one on the same terms, will not in general be
binding unless made with knowledge of all material facts.^ This
decision as well as the Northumberland Avenue Case would seem
to rest upon the unwarranted assumption that any circumstance
which would vitiate a principal's ratification of unauthorized
acts of his agent would vitiate the adoption by a corporation of a
pre-incorporation contract or the making of a new contract on
the same terms. This assumption overlooks the fact that a new
contract is not necessarily voidable on account of mistake of law
or fact which would vitiate a mere ratification.
§ 332. Implied Adoption or Implied New Contract. — Cer-
tainly, the " adoption " of a contract of the promoters, or, what
is the same thing, the making of a new contract, need not be
express but may be implied from circumstances, and no formality
is required except such as would be requisite in an entirely new
contract of a similar character. Thus, "if it could make an
entirely new similar contract, without the use of its seal or without
writing, or without formal action of its board of directors, it may
also adopt an agreement assumed to be made for it in advance
by promoters." ^ If the promoters employ an advertising agent
for a year and the corporation when formed retains him in its
service, that fact is sufficient evidence to warrant the jury in find-
ing a new contract by the corporation for the same period and
on the same terms.** , Mere failure to repudiate liability has been
Tex. 309; Hoag v. Lamont, IS Ahb. 327; Bond v. Pike (Minn.), Ill
Pr., N. s. (N. Y.), 91 ; Church v. N. W. 916.
Church Cementico Co., 75 Minn. 85, Quoere, is the adoption of the
92 ; 77 N. W. 548 ; Kaeppler v. contract by the corporation a prom-
Redfidd Creamery Co., 12 S. Dak. ise to pay the debt of the pro-
483; 81 N. W. 907; Ennis Cotton moters, and so within the Statute
Oii Co. V. Bwrfce, 39 S. W. 966 (Tex.) ; of Frauds? See Stainsby v. Frazer's
Pittsburg, etc. Mining Co. v. Quintrell, Metallic Life Boat Co., 3 Daly (N. Y.)
91Tenn. 693; 20 S. W. 248; Esper 98; Little Rock, etc. Ry. Co. v.
V. MiUer, 91 N. W. 613 ; 131 Mich. Perry, 37 Ark. 164, 194 (headnote
334; Seloverv. Isle Harbor Land Co., misleading).
91 Minn. 451; 98 N. W. 344 (con- ' McArthur v. Times Printing
tract to issue stock in exchange for Co., 48 Minn. 319; 51 N. W. 216;
property) ; Bond v. Pike (Minn.), 31 Am. St. Rep. 653.
Ill N. W. 916. See also Pittsburg, etc. Mining
' Pitts V. Steele Mercantile Co., Co. v. Quintrell, 91 Tenn. 693; 20
75 Mo. App. 221, 231. S. W. 248.
' Battdle v. Northwestern Cement, But see Horowitz v. Broads Mfg.
etc. Co., 37 Minn. 89, 90; 33 N. W. Co., 104 N. Y. Supp. 988.
287
§ 333 PROMOTERS [Chap. VI
held insufficient evidence of "adoption."' It has been said
that "whatever would amount to a ratification of the unauthor-
ized acts of an agent would be sufficient evidence of the adoption
of the contracts of a promoter ; " ^ but the authorities generally
hardly justify this sweeping assertion, which seems to involve
the same confusion of ideas criticised in the last paragraph.
It is scarcely necessary to say that if the company confesses
judgment in an action brought against it on the contract, it
thereby adopts the agreement in toto?
§ 333. Retention of Benefits as Evidence of Adoption. — The
circumstance most often seized upon to prove an adoption of
promoters' contracts is the retention by the company of the bene-
fits of the contracts. And indeed the voluntary reception of the
benefits of a promoters' contract is strong evidence to establish
a contract by the corporation on the same terms, and ought in
all ordinary cases to be conclusive, the company being estopped
to deny its liability on a contract of which it has voluntarily
received the benefits.'
It is well, however, to bear in mind the limits upon this doc-
trine. Thus, the Supreme Court of Texas speaking through
Associate Justice Gaines said: "Now when it is said that when
a corporation accepts the benefits of a contract made by its
promoters, it takes it cum onere, it is important to understand
distinctly what is meant. There is so far as this matter is con-
cerned a radical difference between a promise made on behalf
of the future corporation in the contract itself the benefits of
which the corporation has accepted, and the promise in a pre-
vious contract to pay for services in procuring the latter to be
made. This is well illustrated by the facts of the present case :
' Tift V. Qiiaker City Nat. Bank, v. iV. Y., etc. Land Co., 134 N. Y.
141 Pa. St. 550; 21 Atl. 660. 197, 211; 32 N. E. 27; Frankfort,
' Arapahoe Investment Co. v. Piatt, etc. Turnpike Co. v. Churchill, 6
5Colo. App. 515, 518; 39 Pac. 584. T. B. Mon. (Ky.) 427; 17 Am.
' Williams v. St. George's Harbor Dec. 159 ; Dams v. Valley Electric
Co., 2 De G. & J. 546. Light Co., 61 N. Y. Supp. 580;
* Bomer v. American Spiral, etc. Kaeppler v. Redfield Creamery Co.,
Co., 81 N. Y. 468; Schreyer v. 12 S. Dak. 483; 81 N. W. 907;
Turner Flouring Mills Co., 29 Oreg. Streator Independent Tel., etc. Co.
1; 43 Pac. 719; Paxton Cattle Co. x. v. Continental Tel. Const. Co., 217
First Nat. Bank, 21 Nebr. 621, 644- 111. 577; 75 N E. 546; ChUcott v.
645 ; 33 N. W. 271 ; 59 Am. St. Rep. Washington, etc. Colonization Co.
852; Davis V. Dexter Butter, etc. Co., (Wash.), 88 Pac. 113; PosseU v.
62 Kans. 693 ; 35 Pac. 776 ; Rogers Smith (Colo.), 88 Pac. 1064.
288
§ 307-§ 415] RESPONSIBILITY OF CORPORATION § 333
Here a proposition was made on behalf of the company, by its
promoters, that if a bonus should be subscribed and paid to it,
it would build its road between certain points, and would carry
coal at a certain stipulated rate. By accepting the bonus, the
company became bound to fulfil the stipulations of the contract.
That was the burden which it took with the benefit of the agree-
ment. But it also appears that one of the promoters promised
the plaintiff that if he would assist in procuring subscribers to
the bonus, the company would pay him for his services. This
was not part of the contract the benefits of which were taken
by the defendant." ^
Moreover, the implication of a contract on the part of the
company from the retention of benefits will not arise where the
acceptance of the benefits is without knowledge of the terms
of the contract ; ^ nor unless the original contract was made
with the intent that the company should become bound.' Furth-
ermore, the corporation cannot be required to pay for legal
expenses incurred for the drafting of its incorporation papers
and by-laws merely because it used the papers so prepared ; *
for in such cases the benefits of the contract enure to the com-
pany without any voluntary action on its part. So, too, where a
license to use a patent is granted to P, the consideration being
gauged by the profits of a company intended to be formed to
work the patent, if P assigns his rights to a trustee for the pro-
jected company by which after its incorporation the contract
between P and the trustee is adopted, the use of the patent by
the company will be referable to the contract between it and P
and will therefore furnish no ground to infer a contract between
it and the original licensor.' So, where goods are sold to a
promoter, the use of the goods by the corporation in pursuance
of a transfer from the promoter does not tend to prove the
' Weatherford, etc. Ry. Co. v. Creamery, etc. Co., 73 Pac. 83; 67
Granger, 86 Tex. 350, 356 ; 24 S. W. Kans. 489. See also infra, § 344.
795; 40 Am. St. Rep. 837. ♦ Jones v. Smith (Tex.), 87 S. W.
Cf. also Heda, etc. Mining Co. v. 210; English & Colonial Produce
O'Neal, 19 N. Y. Supp. 592. Co. (1906), 2 Ch. 435. Cf. infra,
' Pitts V. Stede Mercantile Co., § 338-§ 340.
75 Mo. App. 221, 231. » Bagot Pneumatic Tyre Co. v.
= Davis, etc. Co. v. HUlsboro Clipper Pneumatic Tyre Co. (1902),
Creamery Co., 10 Ind. App. 42; 1 Ch. 146.
37 N E. 549; Tryber v. Girard
VOL. I. — 19 289
§ 334 PROMOTERS [Chap. VI
"adoption " by the company of the contract between the original
vendor and the promoter.'
§ 334. Miscellaneous Illustrations of Principle that " Adoption "
is really a New Contract. — As the so-called "adoption" by a
corporation of a contract made for it by its promoters is really
the making of a new contract, the agreement is not within that
provision of the Statute of Frauds respecting contracts not to
be performed within one year if it is to be performed within
a year from the date of its " adoption " by the company.^ So,
in pleading, it is not necessary to set out that the agreement was
originally made by the promoters and adopted by the company;
but it may be described as made by the corporation.^ Where
the "adoption" is by parol, the correct form of action against
the company is assumpsit although the original contract be under
seal.*
The adoption of a contract made by promoters, being in legal
effect a new contract, is voidable if any of the directors who took
part in the "adoption" were individually interested in the con-
tract.* But the contract may, it has been held, be adopted on
behalf of the company by the very promoter by whom prior to
incorporation it was made."
' Koppd V. Mass. Brick Co., 192 * Swisshelm v. Svnssvcde Laundry
Mass. 223 ; 78 N. E. 128. Co., 95 Pa. St. 367.
' McArthur v. Times Printing But see Wood v. Whden, 93 111.
Co., 48 Minn.'319; 51 N. "W. 216; 153, 167 (where the facts showed an
31 Am. St. Rep. 653. adoption by the corporation of the
' McArthur v. Times Printing seal previously attached) ; Wiley v.
Co., 48 Minn. 319, 322 ; 51 N. W. Borough of Towanda, 26 Fed. 594.
216 1 31 Am. St. Rep. 653 (semble). ' Munson v. Syracuse, etc. R. R.
But see Paxton CaMe Co. v. Co., 103 N.Y. 58, 63-64; 8 N. E. 355.
First Nat. Bank, 21 Nebr. 621: 33 » Pratt v. Oshkosh Match Co., 89
N. W. 271; 59 Am. St. Rep. 852, Wise. 406; 62 N. W. 84; Oakes v.
where the plaintiff declared on a Cattaraugus Water Co., 143 N. Y.
promissory note made by the pro- 430 ; 38 N. E. 461 ; 26 L. R. A. 544
moters of the defendant company (but see strong dissenting opinion of
in its name before its incorporation, Gray, J.). It has been said that less
and was allowed to recover. It is evidence of adoption will suffice
submitted that the plaintiff should where the officers adopting the
have counted on the promise of the contract were also the promo.ters
corporation to pay the amount of by whom it was made than where
the note which was to be implied the officers and promoters are
from its retaining and using the different persons. Hall v. Herter
property in payment for which the Bros., 83 Hun 19, 22; 31 N. Y. Supp.
note was given. See Scadden Flat, 692 ; affirmed short, 157 N. Y. 694 ;
etc. Co. V. Scadden, 121 Cal. 33 ; 53 51 N. E. 1091.
Pac. 440..
290
§ 307-§ 415] RESPONSIBILITY OF CORPORATION § 337
§ 335. Adoption of Ultra Vires Contract. — Clearly, no " adop-
tion" by a corporation of a contract made by promoters on
its behalf prior to its incorporation can render the contract
binding upon it, if the contract was one which the company had
no power to enter into and which would have been ultra vires
and unenforceable if made in the first instance by the company
after incorporation.'
§ 336. Corporation adopting Lease liable as Original Lessee.
— The effect of "adoption " by the company of promoters' con-
tracts is well illustrated by Van Schaick v. Third Ave. R. R. Co?
There, a lease was made to S, who by a contemporaneous
collateral agreement declared himself trustee for a certain vol-
untary association or for any company that might be organized
to take its place. The formation of a corporation was then
contemplated for this purpose, and shortly thereafter the de-
fendant company was accordingly incorporated. This corpo-
ration, having adopted the lease, became liable in equity, so
the New York Supreme Court held, to pay the rent reserved
thereby as if it had been the original lessee, so that the liability
could not be avoided by any assignment. In a very similar
case, the Pennsylvania Supreme Court went even further, and
held that the lessor could not collect the rent from the pro-
moter in whose name as lessee the lease had been made, the
corporation when organized having adopted the contract of
lease; ' but this decision is contrary to what is submitted to be
the sounder doctrine — viz., that a promoter who incurs lia-
bility on a contract is not discharged by the subsequent adop-
tion of the contract by the company.*
§ 337. Effect of Fraud of Promoters procuring Original Con-
tract.— -Where the original contract was obtained by the fraud
or other improper conduct of the promoters, the new contract,
or contract by adoption, with the company is not necessarily
tainted with the same infirmity.' If, however, the company
at the time of the "adoption" of the contract knows that
the other party has been deceived by the promoters and is still
' First Nat. Bank v. Church ' Heckman's Estate, 172 Pa. St.
Federation, 105 N. W. 578; 129 185; 33 Atl. 552.
Iowa 268. , * Infra, § 361.
' Van Schaick v. Third Ave. R. B. " See Central Park Fire Ins. Co.
Co., 49 Barb. 409. v. Callaghan, 41 Barb. 448.
291
§ 338 PROMOTERS [Chap. VI
laboring under a mistake, doubtless the defrauded party would
be relieved, in equity at least, against the contract with the cor-
poration. The question has most frequently arisen in the case
of contracts of subscription to shares,' which are pecuhar in
some respects, so that one cannot be sure that the same principles
would be applied to other contracts.
§ 338-§ 340. Quasi-contractval Liability for Benefits received
under a Contract which has not been Adopted.
§ 338. On Principle. — It is often said that where the com-
pany has received the benefit of a promoter's contract, it should
be estopped to repudiate its own liability thereunder. The vol-
untary reception of the benefits by the corporation goes a great
way towards establishing a new contract, and, as already stated,
ought generally to be conclusive.^ But oftentimes the benefit
enures to the company without any voluntary acceptance on its
part, and in such cases on principle no estoppel seems possible.
The liability there must be worked out, if at all, on some theory
of quasi-contract. But if the general principles of that branch
of the law be rigorously applied, recovery is not possible; for
the benefits were voluntarily bestowed upon the company with-
out any request on its part. On the other hand, the circum-
stances attending the formation of a corporation are in many
respects so pecuhar as perhaps to justify an exception to the
general rules of quasi-contracts; and it would certainly seem
that no harm could result from holding a corporation liable
to pay a reasonable sum, equivalent to the benefit actually
received by it, for necessary services rendered, or necessary
expenses incurred, on its behalf prior to its incorporation.
Upon this principle, it should be observed, the measure of
recovery would not be the value of the promoter's services or
the amount of his expenses but the extent of the benefit to the»
company.
§ 339. The English Cases. — The English cases decline to
adopt any such doctrine, and clearly hold that no recovery can
be had against a corporation for benefits conferred upon it or
expenses incurred on its behalf prior to its formation; and this
» See supra, § 251. " See supra, § 333.
292
§ 307-§ 415] RESPONSIBILITY OF CORPOEATION § 340
is the rule both at law ' and in equity.^ Somewhat difficult to
reconcile with this principle are the cases holding that a pro-
moter may recoup out of a claim of the company for his secret
profits the amount which he has expended in promoting the
company.' These latter cases proceed upon the theory that the
promoter is liable only for his net profits ; but if such expenses
are properly chargeable to the private pocket of the promoter
and not to the company, then the former's net profit should be
estimated without deducting such expenses. However, this ap-
p^ent inconsistency seems not to have troubled the English
courts.
§ 340. The American Cases. — In the United States, the Eng-
lish rule exempting a corporation from any quasi-contractual
liability for preliminary expenses is adopted by some courts ; *
but others recognize a quasi-contractual liability for necessary
preliminary expenses to the extent of the benefits received, upon
some such theory as that suggested in the preceding paragraph.*
• Melhado v. Porto AUegre Ry. Ch.), 61 Atl. 721; Wright v. St.
Co., 9 C. P. 503. Louis Sugar Co. (Mich.), 109 N. W.
' Re Rotherham Alum Co., 25 Ch. 1062.
D. 103 (overruling dictum in Re As to whether a corporation
Hereford Waggon Co., 2 Ch .D. 621) ; which refuses to adopt a contract
English & Colonial Produce Co. made with promoters is liable upon
(1906), 2 Ch. 435. a quantum meruit for benefits con-
Cf. Otto Electrical Mfg. Co. (1906), ferred upon it in pursuance of that
2 Ch. 390. contract, see Sullivan v. Detroit, etc.
' BagnaU v. Carlton, 6 Ch. D. 371 ; Ry. Co. (Mich.) 64 L. R. A. 673 ; 135
Emma Silver Mining Co. v. Grant, Mich. 661; 98 N. W. 756; 106 Am.
11 Ch. D. 918; Lydney, etc. Co. v. St. Rep. 403.
Bird, 33 Ch. D. 85. See infra, § 382. = Low v. Connecticut, etc. R. R.
* Rockford, etc. R. R. Co. v. Sage, Co., 45 N. H. 370 ; Grand River
65 m. 328; 16 Am. Rep. 587; Bridge Co. v. Rollins, 13 Colo. 4;
HaU V. Vermont, etc. R. R. Co., 28 21 Pac. 897; Morton v. Hamilton
Vt. 401, 406; Weatherford, etc. Ry. College, 100 Ky. 281; 38 S. W. 1;
Co. v. Granger, 86 Tex. 350, 357; 35 L. R. A. 275; Grier v. Hazard,
24S. W. 795; 40 Am. St. Rep. 837 ; Hazard & Co., 13 N. Y. Supp.
Marchand v. Loan & Pledge Ass'n, 583 ; Farmers' Bank of Vine Grove
26 La. Ann. 389 ; Tuttle v. George H. v. Smith, 49 S. W. Rep. 810 ;
Ttiifie Co. (Me.), 64 Atl. 496. 105 Ky. 816; 88 Am. St. Rep.
See also Bell's Gap R. R. Co. v. 341 ; Perry v. Little Rock, etc. Ry.
Christy, 79 Pa. St. 54 (headnote Co., 44 Ark. 383(semble); Taussig
misleading) ; Schmidt v. Nelke Art v. St. Louis, etc. R. R. Co., 186 Mo.
Lithographing Co., 16 N. Y. Misc. 269; 85 S. W. 378 (lawyer's fees
300; 37 N. Y. Supp. 1138; Jones v. for preparing certificate of incor-
Smith (Tex.), 87 S. W. 210. poration).
Cf. Porch v. Agnew Co. (N. J.
293
§ 341 PROMOTERS [Chap. VI
But even according to these latter authorities, no liability exists
unless the services or expenses were reasonably necessary to the
organization of the company.' Where the English rule prevails,
a promise by the company after its incorporation, and therefore
after the services were rendered, to pay for them is nvdum pac-
tum and unenforceable.^ The distinctively American rule, it is
submitted, would nowhere be applied unless the services were
rendered under a general understanding that they should be
paid for by the company.^
§ 341. Effect of Provision in Incorporation Paper directing
Payment of Preliminary Expenses. — If the memorandum or
articles of association of an English company authorize or direct
the payment of preliminary expenses out of the company's funds,
the other party acquires no right of action against the corpora-
tion to enforce such payment; but the. directors have power to
pay if they choose.*
§ 342. Voluntary Payment. — If no such provision is con-
tained in the memorandum or articles, it seems that in England
such payment is without consideration and therefore ultra vires; "
but in Connecticut a promissory note given by a company on ac-
count of expenses preliminary to its incorporation was held to be
enforceable." Where the memorandum or articles authorize the
payment of a specified sum to a promoter for his labor in form-
' Weatherford, etc. Ry. Co. v. 314, 323; Bell's Gap R. R. Co. v.
Granger, 86 Tex. 350 ; 24 S. W. 795 ; Christy, 79 Pa. St. 54; 21 Am. Rep. 39.
40 Am. St. Rep. 837. * Bank of Turkey v. Ottoman Co.,
' New York, etc. R. R. Co. v. 2 Eq. 366 ; Melhado v. Porto AUegre
Ketchum, 27 Comi. 170; Tuttle v. Ry. Co., 9 C. P. 503. Cf. Hawkeye
GewgeH. TutOeCo. (Me.5,64Atl.496. Co. v. Bank, 157 Fed. 253.
' West Point Tel., etc. Co. v. Rose, As to the right of a solicitor to
76 Miss. 61 ; 23 So. 629. apply sums paid him by the com-
Cf. Savin v. Hoylake Ry. Co., pany to payment of his charges for
L. R. 1 Ex. 9; Hinkley v. Sac Oil, preparing the incorporation papers,
etc. Co. (Iowa), 107 N. W. 629, 631. see English & Colonial Produce Co.
By some courts it seems to have (1906), 2 Ch. 435, 440-441 (head-
been thought that the corporation note inadequate),
is liable if the benefits were conferred ' Ex parte Pelly, 21 Ch. D. 490.
at the request of a majority of the ° Smith v. New Hartford Water
promoters but not otherwise — a Co., 73 Conn. 626; 48 Atl. 754.
rule very difficult of application. Cf. Bond v. Pike (Minn.), Ill
Clarke v. 0. & S. W. R. R., 5 Nebr. N. W. 913.
294
§ 307-§ 415] RESPONSIBILITY OF CORPORATION § 343
ing the corporation, the directors have authority to pay him that
amount without requiring from him any itemized account/ or
indeed even if theamount be excessive.^ But where the authority
given to the directors is simply in general terms to pay the ex-
penses of the company's formation, they may not pay a lump
sum for that purpose ; ^ and if the lump sum so paid be clearly
in excess of the expenditures, it seems that the payment is ultra
vires of the corporation/
§ 343. Efiect of Statutes directing Pajrment. — Sometimes
statutes expressly direct the payment by corporations of the ex-
penses preliminary to their formation; and in that case, a pro-
moter may sue the company in an action of debt grounded on
the statute for his labor and outlay in and about its incorpora-
tion.* This statutory right does not extend, however, to a case
where the promoter agrees with his co-promoters to render his
services gratuitously; and the corporation may plead such
agreement as an equitable defence to the action." But a promise
by the promoter with certain of the subscribers to the capital of
the company that they shall incur no lia,bility if the scheme prove
abortive does not prevent him from proceeding against the cor-
poration under this statute; the only remedy of the shareholders
is by an action against the promoter on his contract, which was
really one of indemnity.' Such statutes give no right of recourse
against the company to a person who was employed by one of
the promoters as clerk or otherwise, and that whether he be a
servant or independent contractor.' The efiect of such statutes
is to make the preliminary expenses a debt of the company and
as such enforceable in the same way as other debts, for Example,
by scire jcusias against the shareholders, where such a proceeding
for enforcement of debts of the company is authorized by law.*
Where a statute imposes upon the company a liability for certain
' Crosky v. Bank of Wales, 4 Giff. 253 ; Low v. Connecticut, etc. R. R.
314. Co., 45 JJ. H. 370, 380.
" Anglo-Greek Steam Co., 2 Eq. 1, ' Savin v. Hoylake By. Co., L. R.
7 (sSmble), per Lord Romilly. 1 Ex. 9.
' Re Englefield Colliery Co., 8 ''Re Brampton & Longtown Ry.
Ch. D. 388. Co., 10 Ch. 177.
♦ Mann v. Edinburgh Northern ' Re Kent Tramways Co., 12 Ch.
Tramways Co. (1893), A. G. 69. D. 312; Ex parte Hardy, 41 Ch. D.
" Tilson V. Warwick Gas Light 215.
Co., 4 B. & C. 962; Carden v. » Clowes v. BretteU, 11 M. & W.
General Cemetery Co., 5 Bing. N. C. 461.
295
§ 344 PEOMOTEKS [Chap. VI
preliminary expenses, such as fees for registration of the incor-
poration paper, a solicitor who pays such charges is entitled to
reimbursement from the company.'
§ 344^§ 346. Ride in Cases where Promoters when making
Contract did not intend a Future Corporation to be bound.
§ 344. In general. — In all the cases considered above, the
promoters contemplated at the date of the contract the format
tion of a company, and intended that the latter should be bound.
Different considerations apply where those who afterwards or-
ganized ihe company did not at the time of the contract intend
that a prospective corporation should be bound — did not, so to
speak, make the contract on behalf of a prospective corpora-
tion.^ In an Alabama case, the members of a partnership con-
tracted not to engage in selling plough-stocks or plough-blades.
Subsequently, they formed a corporation, in which they them-
selves held nearly if not quite all the shares, to carry on that very
business. The court held that this company was not bound
by this contract of its promoters; and, therefore, could not be
enjoined from selling plough-stocks and plough-blades, unless
its formation were a mere fraud, to enable its promoters and
members to evade their obligations.^ If fraud had existed, the
corporation would have been liable, not because it was bound by
the contract, but because its members would not be allowed in
equity to work a fraud under cover of the corporate fiction.* A
corporation is a legal entity; but it must not commit torts or
perpetrate frauds. Similarly, a court of equity will enjoin a
corporation from infringing a patent the validity of which the
chief promoter was estopped to deny, the company having been
organized to enable him to perpetrate the fraud.^
1 English & Colonial Produce Co. 87 Md. 400, 424 ; 40 Atl. 171 ; 67
(1906), 2 Ch. 435, 439. Am. St. Rep. 357 ; 40 L. R. A. 632.
^ Tryber v. Girard Creamery, etc. * See Higgins v. California Petro-
Co., 73 Pac. S3 ; 67 Kans. 489. leum, etc. Co., 122 Cal. 373 ; 55 Pac.
Cf. Grand Rapids Furniture Co. 155; Higgins v. California Petro-
V. Grand Hotel, etc. Co., 70 Pac. 838 ; leum, etc. Co., 81 Pac. 1070 ; 147 Cal.
72 Pac. 687; 11 Wyo. 128. 363; First Nat. Bank v. Trebein,
See also supra, § 330. 59 Oh. St. 316; 52 N. E. 834.
' Moore, etc. Hardware Co. v. ° Siemens-Halske Electric Co. v.
Towers Hardware Co., 87 Ala. 206; Duncan Electric Mfg. Co., 142 Fed.
6 So. 41 ; 13 Am. St. Rep. 23. 157; 73 C. C. A. 375.
Cf. Bagby & Rivers Co. v. Rivers,
296
§ 307-§ 415] RESPONSIBILITY OF CORPORATION
§346
§ 345. Assumption of Contract by Company. — A corporation
may expressly agree to assume the burden of contracts which
were made before its formation, but not on its behalf or with a
view to its creation, just as any individual may for a considera-
tion assume the indebtedness of another.^ For instance, in the
Alabama case stated in the last paragraph, it was held that the
company might adopt, or assume the burden of, the contract not
to sell plougJi-stocks or plough-blades.^ The facts may be suffi-
cient to establish a novation.'
§ 346. Corporation formed to take over Business of a Firm.
— These principles have found their most frequent application
in cases where a corporation, formed to take over a business pre-
viously carried on by a co-partnership, assumes the burden of
the firm's debts and contracts.* It is sometimes thought that
' See Waterman's Appeal, 26
Conn. 96.
Cf. White V. Westjport Cotton
Mfg. Co., 1 Kck. (Mass.) 215
(headnote inadequate) ; 11 Am. Deo.
168 ; North American, etc. Trust Co.
V. Colonial, etc. Mortgage Co., 83
Fed. 796; 28 C. C. A. 88. In the
following cases, assumption of the
contract by the corporation was
held not to have been proved.
Church V. Church Cementico Co.,
75 Minn. 85 ; 77 N. W. 548 ; Minne-
apolis Trust Co. V. Clark, 47 Minn.
108; 49 N. W. 386; Austin v.
Tecumseh Bank, 49 Nebr. 412; 68
N. W. 628: 59 Am. St. Rep. 543;
35 L. R. A. 444.
" Moore, etc. Hardware Co. v.
Towers Hardware Co., 87 Ala. 206,
213; 6 So. 41; 13 Am. St. Rep. 23.
' See Louis Cook Mfg. Co. v.
Randall, 62 Iowa 244; 17 N. W.
507; WhitweU v. Warner, 20 Vt.
425, 443 ; Snow v. Thompson Oil
Co., 59 Pa. St. 209.
* In the following cases, an as-
sumption by the corporation of the
firm indebtedness was held to have
been proved. Waterman's Appeal,
26 Conn. 96; Burke v. Lincoln-
Valentine Co., 28 N. Y. Misc. 202;
58 N. Y. Supp. 1077, 1124; Hall v.
Herter Bros., 83 Hun 19; 31 N. Y.
Supp. 692; 90 Hun 280; 35 N. Y.
Supp. 769; 157 N. Y. 694; 51
N. E. 1091; Reed Bros. Co. v.
First Nat. Bank, 46 Nebr. 168 ; 64
N. W. 701 ; Johnston v. Grumble, 19
So. Rep. 100 (Miss.) ; Bremen Sav-
ings Bank v. Branch-Crookes Saw
Co., 104 Mo. 425; 16 S. W. 209;
Lamkin v. Baldwin, etc. Co., 72 Conn.
57 ; 43 Atl. 593, 1042 ; 44 L. R. A.
786; Williams v. Colhy, 6 N. Y.
Supp. 459; 53 Hun 637; Andres
V. Morgan, 62 Ohio St. 236; 56
N. E. 875; 78 Am. St. Rep. 712;
Schufddt V. Smith, 139 Mo. 367 ; 40
S. W. 887 ; Lemars Shoe Co. v. Le-
murs Shoe Mfg. Co., 89 lU. App. 245,
254-255 (voluntary payment by
corporation held not ultra vires) ;
Quee Drv^ Co. v. Plaut, 55 N. Y.
App. Div. 87 ; 67 N. Y. Supp. 10.
See also Hadett v. Wotherspoon, 2
Rich. Eq. (S. Car.) 395; Louis Cook
Mfg. Co. V. Randall, 62 Iowa 244;
17 N. W. 507; Calumet Paper Co. v.
Stotts Investment Co., 96 Iowa 147;
64 N. W. 782 ; 59 Am. St. Rep. 362.
In the following cases an as-
sumption by the corporation was
held not to have been proved. Dur-
latcher v. Frazer, 8 Wyo. 59; 55
Pac. 306; 80 Am. St. Rep. 918;
White V. Westport Cotton Mfg. Co.,
1 Pick. 216; 11 Am. Dec. 168 ;,Mc-
297
346
PROMOTERS
[Chap. VI
where a firm transfers all its assets to a corporation in which the
former partners own all the shares, the corporation becomes liable
for the debts of the firm without any express or implied assump-
tion thereof ; '■ but this notion rests on the unfounded belief that
in no other way can the firm creditors be protected. That such
belief is without foundation is evident. For if the transfer of the
partnership property to the cor juration hinders or delays the firm
creditors, they may treat the transfer as a fraudulent convey-
ance, and subject the property to payment of their claims in the
hands of the corporation as a fraudulent grantee.' This remedy
is ample; and, therefore, to hold the corporation liable as debtor
in the firm's stead without any voluntary assumption by it of
that position would be a gratuitous violation of legal principle,
and has not met with general favor.' Where, however, the cor-
LeUan v. Detroit FUe Works, 56
Mich. 579; 23 N. W. 321; Dingel-
dein v. Third Ave. B. R. Co., 9
Bosw. (N. Y.) 79 ; Ruby Chief, etc.
Co. V. Gurley, 17 Colo. 199, 202 ; 29
Pac. 668; Hand v. Evans Marble
Co., 88 Md. 226; 40 Atl. 899 (where
recovery was denied on the ground
of lack of privity between the plain-
tiff and the corporation) ; Cvlberson
V. Ala. Const. Co. (Ga.), 56 S. E. 765.
Cf. Bradley Fertilizer Co. v.
South Publishing Co., 17 N. Y. Supp.
587.
As to the bearing of the statute
of frauds on such transactions, see
Georgia Co. v. Castleberry, 43 Ga.
187; Schufddt v. SmUh, 139 Mo.
367, 377; 40 S. W. 887; Water-
man's Appeal, 26 Conn. 96, 109;
Calumet Paper Co. v. Stotts Invests
ment Co., 96 Iowa 147; 64 N. W.
782 ; 59 Am. St. Rep. 362.
As to the conversion of a firm
into a corporation in pursuance of
a provision in the partnership arti-
cles, see Hennessy v. Griggs, 1
N. Dak. 52 ; 44 N. W. 1010.
' Cf. Baker Furniture Co. v. HaU
(Nebr.), 107 N. W. 117 (reversed on
re-hearing in 111 N. W. 129); Du
Vivier v. GaUice, 149 Fed. 118; 80
0. C. A. 556 (where the corporation
having expressly assumed all debts
shown on the books of the partner-
ship was held liable for a debt not
so shown).
^ Bank v. HoUingsworth, 135
N. Car. 556; 47 S. E. 618 (semble);
Colorado Trading, etc. Co. v. Acres
Commission Co. (Cdlo.), 70 Pac. 954 ;
18 Colo. App. 253.
Cf. Shumaker v. Davidson, 87
N. W. 441; 116 Iowa 569; Bristol,
etc. Trust Co. v. Jonesboro, etc. Trust
Co., 101 Tenn. 545; 48 S. W. 228
(similarity between name of cor-
poration and name of firm not
suflBcient to establish fraud in law
where no fraud in fact intended) ;
Thorpe v. Pennock Mercantile Co.
(Minn.), 108 N. W. 940; First Nat.
Bank v. Trebein, 59 Ohio St. 316;
52 N. E. 834. See also infra, § 1089.
" McLeUan v. Detroit FUe Works,
56 Mich. 579 ; 23 N. W. 321 (\yhere
the members of the corporation
were the members of the firm);
Georgia Co. v. Castleberry, 43 Ga.
187; Hand v. Evans Marble Co.,
88 Md. 226; 40 Atl. 899; Bank v.
HoUingsworth, 135 N. Car. 556; 47
S. E. 618; Culberson v. Ala. Const.
Co. (Ga.), 56 S. E. 765; Baker Fur-
niture Co. V. HaU (Nebr.), Ill N. W.
129.
298
§ 307-§ 415] RESPONSIBILITY OF CORPORATION § 347
poration was composed chiefly or entirely of the members of the
firm and has taken a transfer of all its assets, an intention on
the corporation's part to assume the firm indebtedness may be
the more readily implied; less evidence of an actual intention
to assume such burden is required than where the corporation is
composed of strangers. It has been held that creditors of a cor-
poration whose claims arose in the course of its business are
entitled to a preference in respect to the corporate assets over
partnership creditors whose claims the corporation has assumed ;'
but the contrary view has at least equal support, and is, it is sub-
mitted, preferable.^ Where the firm is indebted to one of the
partners, by way of compensation for sums dr^wn out by
the other partners, such indebtedness upon its assumption by
the corporation does not become a lien on the property trans-
ferred by the firm to the corporation, but the creditor partner
becomes merely a general creditor of the corporation.'
§ 347. Appointment of Agents for Future Corporation. —
As promoters cannot bind the future corporation by contract, so
neither can they bestow on others any authority to contract on
the company's behalf; and if they purport to do so, the attempt
is wholly nugatory, and remains so even after the corporation is
formed, unless their acts be confirmed by the directors or other
competent authority. Hence, a mortgage executed by the com-
pany's officers in pursuance of an authority attempted to be con-
ferred by the promoters prior to incorporation is not binding on
the company.* It would perhaps be otherwise if the authority
were conferred by the incorporation paper ; for as already stated,
promoters have unquestionable power to bind the future corpora-
tion by shaping its constitution. Thus, the directors named in
the incorporation papef have the same power as other directors.'
• Lamkin v. Baldwin, etc. Co., 72 ' Francklyn v. Sprague, 121 U. S.
Conn. 57; 42 Atl. 593, 1042;, 44 215; 7 Sup. Ct. 951.
L. R. A. 786. * Blood v. La Serena, etc. Co., 113
Cf. Thorpe V. Pennock Mercantile Cal. 221; 41 Pae. 1017; 45 Pao.
Co. (Minn.), 108 N. W. 940. 252.
* Sehufeldt V.Smith, 139 Mo. 367; = Supra, § 168.
40 S. W. 887; London v. Bynum,
136 N. Car. 41.1 ; 48 S. E. 764.
299
§ 348 PROMOTERS [Chap. VI
§ 348. Whether Knowledge of Promoters imputable to Cor-
poration. — As promoters are not prior to incorporation agents
of the company or capable of binding it, their knowledge of an
outstanding equity against property to be transferred to the
corporation is not imputable to the latter, and will not deprive
it of the rights of a bona fde purchaser.' But this doctrine
cannot be used as a cover for fraud, for the protection of parties
who organize themselves into a corporation to escape from a
trust to which they are subject.^ Indeed, cases of this latter sort
may be supported on the ground that the company is affected
with notice, not of what its promoters knew before its organize^
tion, but of what its members and officers knew after its format
tion when it acquired title to the property.
§ 349. Admissions of Promoters. — Admissions of promoters
made prior to incorporation are not evidence against the
company.'
§ 350-§ 356. EIGHT OP CORPORATION TO THE BENEFIT OF
ACTS OF PROMOTERS.
§ 350. Suits on Contracts made prior to Incorporation. —
The right of a corporation to sue on a contract made on its behalf
prior to incorporation depends in general upon the same prin-
' Davis, etc. Wheel Co. v. Davis, " National Conduit Co. v. Con^
etc. Wagon Co., 20 Fed. 699; Burt necticut Pipe Mfg. Co., 73 Fed. Rep.
V. Batavia Paper Mfg. Co., 86 111. 491, 495; Holloway & McRaney v.
66 ; Mercantile Nat. Bank v. Par- Brame, 36 So. 1 ; 83 Miss. 335 ; Re
sons, 54 Minn. 56; 55 N. W. 825; Slobodinsky (1903), 2 K. B. 517;
40 Am. St. Rep. 299 ; Grand Rapids Carter v. Gray (Ark.), 96 S. W. 377 ;
Furniture Co. v. Grand Hotel, etc. Cumberland Cogl Co. v. Sherman, 30
Co., 70 Pac. 838; 72 Pac. 687; 11 Barb. (N. Y.) 553; Hoffman Coal
Wyo. 128. Co. V. Cumberland, etc. Co., 16 Md.
Cf. Brennan v. Emery-Bird- 456; 77 Am. Dec. 311.
Thayer Dry Goods Co., 99 Fed.' 971 ; Cf. Young Reversible Lock-Nut
Mercantile Nat. Bank v. Parsons, 54 Co. v. Young Lock-Nut Co., 72 Fed.
Minn. 56, 65 ; 55 N. W. 825 ; 40 Rep. 62, 65-66 ; McElwee Mfg. Co.
Am. St. Rep. 299 (where the court v. Trowbridge, 62 Hun 471 ; 17
said that notice to some of the cor- N. Y. Supp. 3 ; Texas Loan Agency
porators would not be imputed to v. Hunter, 13 Tex. Civ. App. 402,
the company but that notice to all 409 ; 35 S. W. 399 ; California Con-
of them would be). solidated Mining Co. v. Manley, 81
But see Oregon, etc. Nav. Co. v. Pac. 50; 10 Idaho, 786; McCourt
Balfour, 90 Fed. 295, 300 ; 33 v. Singers-Bigger, 145 Fed. 103.
C. C. -A. 57 ; Zeigler v. Valley Coal ^ McCallum v. Pursell Mfg. Co.,
Co. (Mich.), 113 N. W. 775. 1 N. Y. Supp. 428; Horomtz v.
300
§ 307-§ 415] EIGHTS OF CORPORATION § 351
ciples as govern its liability oh such contracts. Unless both are
bound, neither is bound, is "the rule in such cases/ But in juris-
dictions where a stranger to a contract of which he is a benefi-
ciary is allowed to sue thereon, a corporation may sometimes sue
as a beneficiary of contracts entered into with its promoters be-
fore its incorporation. Moreover, a corporation may clearly
become entitled by assignment to sue on such contracts,^ or by
novation, the company may become the obligee.^ Moreover, ex-
press statutes sometimes enable corporations to enforce contracts
made on their behalf prior to incorporation.*
§ 351-§ 354. Conveyances made for Company's Benefit prior
to Incorporation.
§ 351. In general. — ^The right of a company to avail itself
of conveyances of property made for its benefit stands on a
wholly different footing. For in the nature of things, there is no
reason why a corporation when formed should not be entitled
to the benefit of unilateral conveyances — e. g., by deed poll —
which require no execution, or contemporaneous assent, by the
grantee. As soon as the company is formed the previous con-
veyance should enure to its benefit, although possibly the trans-
fer might in the meantime be revocable by the grantor. In the
case of real property, the feudal principle invalidating convey-
ances of freehold interests to take effect in fviuro would have con-
stituted an insuperable obstacle at common law; for obviously
Broads Mfg. Co., 104 N. Y. Supp. erty to be turned over to it, they
988. .would return some of the shares to
Cf. First Nat. Bank v. Armstrong, the company as treasury stock).
42 Fed. 193. Cf. WUey v. Borough of Towanda,
' Penn Match Co. v. Hapgood, 26 Fed. 594.
141 Mass. 145; 7 N. E. 22. For ' Cf. Syracuse, etc. B. B. Co. v.
cases in which corporations sought Gere, 4 Hun (N. Y.), 392.
in vain to enforce agreements made ' Cf. Valk v. CrandaU, 1 Sandf.
by their promoters, see Ireland v. Ch. (N. Y.) 179, 182; Be Thomas,
Globe MiUing, etc. Co., 20 R. . I. 14 Q. B. D. 379 (where the original
190; 38 Atl. 116; Flanagan v. contract was illegal and void but
Lyon, 105 N. Y. Supp. 1049; 54 where the new contract with the
N. Y. Misc. 372 (holding that the corporation was vaUd).
corporation cannot sue for breach * See Cumberland Land Co. v.
of an agreement among promoters Daniel (Tenn.), 52 S. W. 446, ap-
inter sese whereby they promised plying Tenn. Acts, 1875, Chap. 142
that upon receiving from the cor- § 29.
poration stock in exchange for prop-
301
§ 352 PROMOTERS [Chap. VI
there could be no conveyance in presenti to a non-existent per-
son. But since the Statute of Uses, a conveyance of land may be
made to take effect in fvturo as a springing use, and such a
springing use may be raised in favor of a corporation formed
after the execution of the deed ; and a similar limitation in a will
may be effective as an executory devise.' So, conveyances to
charitable and pious uses may be made to remain in abeyance
until the incorporation of the grantee, after which they become
operative.^ The notion, therefore, which must be admitted to
be to some extent prevalent, that a corporation when organized
cannot take advantage of conveyances made in its favor before
its organization, would seem not to represent the law.' A lease,
or other bilateral conveyance, requiring execution both by
grantor and grantee, stands on a different footing.*
§ 352. Trusts for Future Corporation. — A fortiori, property
may be settled in trust for a corporation to be thereafter
formed, and this trust may be enforced in chancery upon the
ordinary principles of equity by the company, when organized,
^ Inglis V. Trustees of Sailors' Tei. Co. (Ky.), 84 S. W. 515 (holding
Snug Harbour, 3 Pet. 99, 115-116. that where a majority of the sub-
' Tovm of Pawlet v. Clark, 9 scribers to stock of a • projected
Cranch 292. corporation refuse to accept the
Cf. Fadness v. Baunberg, 73 incorporation paper drawn up by a
Wise. 257; 41 N. W. 84. committee and organize a corpora-
See Gray on Perpetuities, 2d ed., tion under a different incorporation
§§ 607 et seq. paper, the latter corporation rather
' Dyer v. Rich, 1 Mete. (Mass.) than that organized by the com-
180, 190; Rotch's Wharf Co. v. mittee is entitled to property ac-
Judd, 108 Mass. 224; American quired by the promoters).
SUk Works v. Salomon, 4 Hun 135 ; But see Aspen Water, etc. Co. v.
Bank v. Lumber Co., 32 W. Va. 357 ; Aspen, 5 Colo. App. 12 ; 37 Pac.
9 S. E. 243 ; 3 L. R. A. 583 ; Sumter 728 ; Jones v. Aspen Hardware Co.,
Tobacco Warehouse Co. v. Phtmix 21 Colo. 263; 40 Pac. 457; 52
Ins. Co. (S. Car.), 56 S. E. 654 Am. St. Rep. 220 ; 29L. R. A. 143;
(headnote inadequate). BroadweU v. Merritt, 87 Mo. 95
Cf. Sayward v. Gardner, 5 Wash, (conveyance upheld, but on ground
247, 256 ; 31 Pac. 761 ; 33 Pac. 389 ; of estoppel) ; Dunning v. Bates, 186
Rathbone v. Tioga Nav. Co., 2 Watts Mass. 123 ; 71 N. E. 309 (notice,
& Serg. (Pa.) 74, 78-79; African however, the well-reasoned dissent-
M. E. Church v. Conover, 27 N. J. Eq. ing opinion).
157 ; Cumberland Land Co. v. Danid See also cases cited supra, § 294.
(Tenn.), 52 S. W. 446 (decided under * Utah Optical Co. v. Keith, 18
a statute which was construed to Utah 464 ; 56 Pac. 155.
entitle the corporation to the benefit Cf. Thistle v. Jones, 45 N. Y.
of the conveyance); Mt. Carmd Misc. 215; 92 N. Y. Supp. 113.
Tel. Co. v. Mt. Carmd & Fleming
302
§ 307-§ 415] EIGHTS OF CORPORATION § 355
as cestui que trust} So, money paid to a promoter by way of de-
posits or earnest upon subscriptions to shares may be recovered
by the company when incorporated as money had and received
to its use.^
§ 353. Cases distinguished. — On the other hand, a convey-
ance or a devise which is made to an unincorporated associa-
tion as an existing entity and which is incapable of taking effect
because the grantee is not incorporated cannot be availed of by a
corporation which is subsequently formed as the successor of the
unincorporated body.' As explained elsewhere, such a convey-
ance will either vest title in the members of the supposed corpora-
tion or voluntary association as tenants in common, or else it will
be void for indefiniteness.* Moreover, a deed to certain persons
as "incorporators" will not without any assignment from them
vest title in a corporation which they subsequently organize.*
§ 354. Property acquired by Promoters in Course of Pro-
motion.— As will presently be more fully explained, promoters
will not be allowed to hold for their own benefit property ac-
quired by them on behalf of the company which they were en-
gaged in organizing, and will therefore be required by a court of
equity to execute an assignment of such property to the company.'
§ 355. Assignments from Promoters to Company — Taking
over Property of a Firm. — Of course, a company after its incor-
poration may take an assignment from its promoters,' or indeed
from any other persons, of any property they may own ; and in
' Heda Consolidated, etc. Co. v. ' State use M. E. Church v. War-
O'Neill, 19 N. Y. Supp. 592 ; African ren, 28 Md. 338. Cf. Douthitt v.
M. E. Church v. Conover, 27 N. J. Eq. Stinson, 63 Mo. 268. In the case of
157; McCandUssw. Inland Add Co., charities, the object of the deed or
42S. E. 449; 115 Ga. 968. will may be effectuated in some
Cf. Van Schaick v. Third Ave. states by the doctrine of cy pres.
B. R. Co., 49 Barb. 409 ; Church of * Supra, § 294.
St. Stanislaus v. Algemeine Verein. ' McCandLess v. Inland Add Co.,
31 N. Y. App. Div. 133; 52 N. Y. 112 Ga. 291; 37 S. E. 419.
Supp. 922 ; affirmed short, 164 N. . " Seacoast B. R. Co. v. Wood, 56
Y. 606; 58 N. E. 1086. Atl. 337; 65 N. J. Eq. 530.
' San Joaquin, etc. Co. v. West, See infra, § 399.
94 Cal. 399 ; 29 Pac. 785. See also ' Cf. Alexander v. Tolleston Club,
supra, § 255, and infra, § 399. 110 111. 65 (holding that a lease to a
303
§ 356 PROMOTERS [Chap. VI
some cases such an assignment from the promoters to the com-
pany will be presumed, or regarded as implied.^ Thus, where a
company was formed for the express purpose of operating a street
railway franchise recently acquired by the promoters, a formal
transfer of the franchise to the company has been thought un-
necessary.^ So, where a corporation is formed by special act to
manage and dispose of certain real estate formerly held by the
corporators in common, the terms of the act may be such as,
upon its acceptance, to transfer the legal title to the company.^
But these cases must be deemed exceptional; for ordinarily
when a partnership or other voluntary association becomes in-
corporated, that mere fact does not invest the corporation with
title to the property of the voluntary association; and this is
true whether the incorporation is effected by special act,* or
under, a general law.^
§ 356. Survey for Railway made before Incorporation. — A
survey for a railway made by promoters may be availed of by
the company after incorporation without making a new survey,
so as to constitute compliance with a statute requiring the loca-
club which is unincorporated but is Dawson, 87 Tex. 524; 29 S. W.
about to become incorporated "for 1044; Meats v. Moidton, 30 Md.
and during the existence of said 142 (headnote inadequate); Catho-
club" is not terminated by the in- lie Church v. Tobben, 82 Mo. 418.
corporation of the club, accompanied • Manahan v. Varnum, 11 Gray,
by a transfer of all its property to 405; Rau v. Union Paper Mill Co.,
the corporation). 95 Ga. 208; 22 S. E. 146; Mc-
' See ThisUe v. Jones, 45 N. Y. Candless v. Inland Add Co., 112
Misc. 215; 92 N. Y. Supp. 113. Ga. 291; 37 S. E. 419; RuetteU v.
As to the application of the Greenvnch Ins. Co. (N. Da^.), 113
Statute of Frauds to such an assign- N. W. 1029.
ment, see Roth Tool Co. v. Champ- But see Church of St. Stanislaus v.
Spring Co., 93 Mo. App. 530; 67 Algemeine Vereln, 31 N. Y. App.
S. W. 967 (headnote inadequate). Div. 133 ; 52 N. Y. Supp. 922,
^ Santa Rosa R. R. v. Central affirmed short in 164 N. Y. 606 ; 58
Street Ry. Co., 38 Pac. Rep. 986, N. E. 1086; American Silk Works
989 (Cal.). V. Salomon, 6 T. & C. (N. Y.) 352 ;
Cf. Spring VaUey Water Works White Oak Grove Benev. Soc. v.
v. Sore Francisco, 22 Cal. 434, 442. Murray, 145 Mo. 622 ; 47 S. W. 501.
' Colquitt V. Howard, 11 Ga. 556. Cf. Re Cussons, 73 L. J. Ch. 296
Cf. African M. E. Church v. (where, by virtue of certain provi-
Conover, 27 N. J. Eq. 157 ; Scots sions in tlie Companies Act of 1862,
Charitable Sop. v. Shaw, 8 Mass. 532. the incorporation of a firm under
' Holland v. Cruft, 3 Gray 162; the statute was held to invest the
Lefjingwell v. Elliott, 8 Pick. 455; corporation with equitable but not
19 Am. Dec. 343 ; Frank v. Drenk- legal title to the firm real estate).
hahn, 76 Mo. 508; McLeary v.
304
§ 307-§ 415] LIABILITIES TO THIRD PERSONS § 357
tion of the company's route by survey in order to give a right
of condemnation ; ^ but on the other hand it has been held that
such an adoption of the survey without actually taking possession
of the land will not give any prior right as against another com-
pany which takes actual possession by retracing the line as its
own.^
§ 357-§ 362. LIABILITIES OF PROMOTERS TO PERSONS
NOT CONNECTED WITH THE COMPANY.
§ 357-§ 361. CONTRACTUAL LIABILITY.
§ 357. After Incorporation. — The contractual liabilities of
promoters to persons other than the corporation are controlled
after its formation by the ordinary principles of the law of agency.
That is to say, if the promoter contracts avowedly as agent for
an abeady incorporated company, he is not personally liable
unless authority to act for the corporation is lacking. On the
other hand, if he does not disclose his agency or his principal,
he is personally liable on the contract. Whether the date of
technical incorporation or of organization for business is to be
deemed the point from which these ordinary principles of agency
come into play depends upon the same considerations weighed
above in respect to the similar and indeed identical question as
to when the company becomes capable of being bound by con-
tracts entered into on its behalf.^ The embryonic condition of
the corporation, even though it has attained a technical existence,
may be a circumstance tending to show that credit was given to
the promoters individually rather than to the corporation.* If
the corporation is formed to take over the business of a firm,
customers of the firm who have no notice of the change may,
upon familiar principles of the law of partnership, continue to
look for payment to the members of the firm, who will be es-
• Chesapeake, etc. Ry. Co. v. Deep- Pittsburgh, etc. B. R. Co., 105 Pa.
pater By. Co., 50 S. E. 890; 57 St. 13.
W. Va. 641. » Supra, § 318.
Cf. Milwaukee Light, Heat & * Ijams v. Andrews, 151 Fed.
Traction Co. (Wise), 112 N. W. 663. 725, 731.
' New Brighton, etc. B. B. Co. v.
VOL. I. — 20 305
§ 358 PROMOTERS [Chap. VI
topped from denying their liability for debts contracted after
incorporation.^
§ 358-§ 361. Before Incorporation.
§ 358. In general. — Before incorporation, promoters who
contract without disclosing that they are not acting on their own
account are of course liable personally just as agents for an
undisclosed principal would be liable ; and even if they contract
expressly on behalf of the company, they cannot shield them-
selves under the rule which protects an authorized agent for a
named principal, since the corporation not being in existence,
they cannot be authorized to bind it. On the contrary, having
contracted for a non-existent principal, they are Uable on their
implied warranty of authority unless they disclosed that their
supposed principal was not then incorporated. In most cases
such disclosure is made, so that no impKed warranty of authority
is broken.^ If the disclosure be made, no liability is incurred
unless the promoter and the third party mutually intended to
contract on the footing of the former's personal hability; and it
is a question of fact for the jury whether such was the intention.^
If the contract is in writing, so that its construction is for the
court, in the absence of anything in the document itself indicative
of a different intention, it will be construed as imposing a personal
liabiUty on the promoter, since otherwise, the corporation not
being in existence, it would have no binding effect whatever; *
and parol evidence in such a case is not admissible to show an
' Perkins v. Rouss, 29 So. 92; been submitted to the juiy and an-
78 Miss. 343; Martin v. Fewdl, 79 swered by them in favor of the plain-
Mo. 401, 412 ; Henry v. Simanton, tift) ; Shidds v. Clifton HiR Land
54 Atl. 153; 64 N. J. Eq. 572. Co., 94 Tenn. 123; 28 S. W. 668;
2 See Hersey v. TtMy, 8 Colo. 46 Am. St. Rep. 700; 26 L. R. A.
App. 110, 112; 44 Pac. 854. 509.
» Higgins v. Hopkins, 3 Ex. 163. « Kdner v. Baxter, 2 C. P. 174.
See also Queen City Furniture See also Hopcroft v. Parker, 16
Co. V. Crawf(yrd, 127 Mo. 356 (head- L. T., n. s., 123, 561 ; Hurt v. Salis-
note misleading); 30 S. W. 163; hury, 55 Mo. 310; Holland v. Lee,
Hub Piiblishing Co. v. Richardson, 71 Md. 338; 18 Atl. 661. First
13 N. Y. Supp. 665 ; Bailey v. Ma- Nat. Bank v. Church Federation,
caulay, 13 Q. B. 815; Carmody v. 105 N. W. 578; 129 Iowa 268.
Powers, 60 Mich. 26; 26 N. W. 801 But see Landman v. EntwisUe,
(where the question whether de- 7 Ex. 632.
-fendants contracted personally had
306
§ 307-§ 415] LIABILITIES TO THIRD PERSONS § 359
intention that the promoter should not be personally bound.'
On the other hand, where the contract is oral merely, so that its
terms must be found by the jury, a peremptory instruction to
find the defendant individually liable if he promised that the
projected company would pay is erroneous ; ^ for the jury should
be required to find in addition that the parties intended to con-
tract on the footing of the promoter's individual responsibihty.
If the contract is made by one promoter expressly as agent for
another promoter, from whom sufficient authority was had, the
latter promoter is liable, but the former is not.^ Any liability
which a promoter incurs is necessarily an original liability as
distinguished from a liability as guarantor for the projected
corporation.*
As there can be no stockholders in a non-existing corporation,
subscribers to the capital of a company about to be formed are
not liable to persons with whom the promoters contract under
any statute imposing a liability in favor of corporate creditors
on the stockholders of a corporation.'
§ 359. What is sufficient Evidence of Authority of Co-promoter
as Agent. — As we have seen, promoters are not partners, nor
is co-promotership any evidence of partnership ; * and hence
there is no implied authority in any one or more promoters to
bind the others.' In each case, the plaintiff must prove as a fact
> Kdner v. Baxter, 2 C. P. 174. = Hersey v. Tidly, 8 Colo. App.
But see Case Mfg. Co. v. Soxman, 110 (headnote misleading) ; 44 Pac.
138 U. S. 431, 436-438 (headnote 854.
misleading); 11 Sup. Ct. 360. Cf. McFall v. McKeesport, etc.
' Durgin v. Smith (Mich.), 94 Ice Co., 123 Pa. St. 259; 16 Atl.
N. W. 1044; 133 Mich. 331. The 478.
inclination of the courts even where * Clergue v. Humphrey, 31 Can.
the contract is oral is to hold that Sup. Ct. 66.
all who concur in its making intend ' Bufjington v. Bardon; 80 Wise,
to be personally bound thereby. 635; 50 N. W. 776.
Sandusky Coal Co. v. Walker, 27 » Supra, § 311-§ 314.
Ont. 677; Roberts Mfg. Co. v. ' Bright v. Hutton, 3 H. L. C.
Schlick, 62 Minn. 332 ; 64 N. W. 341 ; McEwan v. Campbell, 2 Macq.
826 ; Roberts Mfg. Co. v. Wright, H. L. 499.
62 Minn. 337 ; 64 N. W. 827 ; Ker- Cf . Long v. Citizens' Bank, 8
ridge v. Hesse, 9 C. & P. 200; Reges- Utah 104, 107; 29 Pac. 878; Wit-
ter v. Medcalf, 71 Md. 528; 18 Atl. son v. Hotchkiss, 2 Ont. L. Rep.
966 (where defendant's liabiUty 261 (where agency was held to have
seems to have been assumed). been proved).
Cf. Ennis Cottonr^U Co. v. Burke,
39 S. W. 966 (Tex. Civ. App.).
307
§ 359 PROMOTERS [Chap. "VT
actual authority from the defendant to the co-promoter or other
person who purported to bind him ; and if no legally sufficient
evidence of such authority be adduced, the plaintiff will be non-
suited.' So, an advertising agent who was unable to give the
names of the promoters who were present at the meeting at which
his claim was contracted has no enforceable claim against any-
body.^ That the defendant consented to the pubUcation of a
prospectus in which his name appeared as a member of the "pro-
visional committee " and as a promoter of the company does not
amount to evidence sufficient to go to the jury of a holding out
of the other promoters as his authorized agents; ' since the fact
of being co-promoters does not create any agency, the publica-
tion of that fact cannot constitute any representation of agency.
The mere fact that promoters appoint from among their number
a "committee of managers" does not make the members of that
committee their agents.* But where promoters by resolution
direct their secretary to have certain advertising done, there is
evidence to go to the jury of authorization of the secretary to
pledge their credit for the necessary expense ; ' and, in such a
case, one of the promoters cannot shield himself behind a secret
agreement with his associates that he should incur no liabiUty."
So, where the defendant joins a provisional committee, stating
that he "concluded his liability would be Umited to the amount
of his shares," the court instructed the jury that he was Uable
for the price of stationery ordered by the secretary and used by
the committee.'' In some cases, slight evidence of authorization
' ReyneU v. Lewis, 15 M. & W. for the prosecution of the project,
517; Baker v. Stead, 3 C. B. 946; the authority must be exercised by
Patrickv. Reynolds, 1G.B.,T<!.S.,727. all the members of the committee,
But see Sproat v. Porter, 9 Mass. else the intended principals will not
300. be bovmd. Brovm v. Andrew, 13 Jur.
Cf. Railroad Oazette v. Wherry, 58 938.
Mo. App. 423. " Maddick v. MarskaU, 17 C. B.,
" ExparteLloyd,l^\m.,yi.a.,2i%. n. s., 829 (affirming s. c. 16 C. B.,
' Reynell v. Lewis, 15 M. & W. N. s., 387) ; RHey v. Packington, 2
517 ; Bailey v. Macaiday, 13 Q. B. C. P. 536.
815 ; Barker v. Stead, 3 C. B. 946. But see Burbidge v. Morris, 3
Cf. CoUingwood v. Berkeley, 15 H. & C. 664.
C. B., N. s., 145. ° Rileyv.Packington,2C.P.53&.
* WiUiams v. Pigott, 2 Ex. 201 ; Cf. Rennie v. Clarke, 5 Ex. 292.
Tanner's Case, 5 De G & S. 182. ' Bamett v. Lambert, 15 M. & W.
And even where the promoters ex- 489.
pressly direct a committee of man- Cf. CoUingwood v. Berkeley, 15
agement to take energetic measures C. B., n. s., 145.
308
§ 307-§ 415] LIABILITIES TO THIRD PERSONS § 361
or ratification of the contract has been held sufficient to render a
promoter personally liable thereon.' But a promoter is not made
liable for expenses by attending a meeting at which such liability
was recognized, and by endeavoring to devise expedients for
raising funds to defray them ; ' nor by part payment in ignorance
of his rights.^ Unless under very exceptional circumstances, a
promoter cannot be held liable on a contract made by his co-
promoter before he participated in the project ; ' he cannot be
rendered liable on the ground of having ratified the contract.
Where the plaintiff was himself a promoter, the fact has been
thought an additional obstacle to his recovery.*
§ 360. Inability distinguished from Liability of Members of
Defectively Incorporated Company. — Inasmuch as promoters are
not partners, a suit framed upon the theory that the defend-
ants have incurred a partnership liability as niembers of a de-
fectively incorporated association cannot be sustained by proof
that defendants had incurred a liability as promoters of a
prospective corporation."
§ 361. How Promoter's Liability Discharged — Effect of Com-
pany's Adoption of Contract. — Where a promoter incurs before
incorporation a personal contractual liability, he is not dis-
charged by the mere "adoption " of the contract by the cor-
poration ; ' nor can he be relieved because by express statute the
' Boberts Mfg. Co. v. Schliek, 62 Co., 94 Tenn. 123 ; 45 Am. St. Rep.
Minn. 332; 64 N. "W. 826; Roberta 700; 26 L. R. A. 509.
Mfg. Co. V. Wright, 62 Minn. 337 ; ' Kelner v. Baxter, 2 C. P. 174.
64 N. W. 827 ; Pearson's Case, 3 See also American Paper Bag Co.
De G. M. & G. 241. v. Van Nortwick, 52 Fed. 752; 3
« Tanner's Case, 5 De G. & S. 182. C. C. A. 274 ; Broyles v. McCoy,
As to explaining admissions of 5 Sneed (Tenn.) 602.; Haslett v.
liability, see Newton v. Belcher, 12 Wotherspoon, 2 Rich. Eq. (S. Car.)
Q. B. 921 ; Newton v. Ldddiard, 12 395, 400-401 ; Henderson Woolen
Q. B. 925 ; Bailey v. Macavlay, 13 Mills v. Edwards, 84 Mo. App. 448 ;
Q. B. 815. BonsaU v. Piatt, 153 Fed. 126 (where
' Ex parte Besley, 3 Mac. & G. an agent employed by a promoter
287. recovered from him for services ren-
* Beale v. Moids, 10 Q. B. 976. dered after incorporation as an
But see Lefroy v. Gore, 1 Jo. & officer of the company).
Lat. 571, 587-588. But see apparently contra : Whit-
^ Wilson v. Curzon, 15 M. & W. nsy v. Wyman, 101 TJ. S. 392 ; Smith
532; Parkinv. Fry, 2 C.&F. 311; v. Parker, 148 Ind. 127, 133-134;
Baily v. Burgess, 48 N. J. Eq. 411; 45 N. E. 770; Wiley v. Borough of
22 Atl. 73. Towanda, 26 Fed. 594 ; Ennis Cotton^
"Shields v. Clifton Hill Land OiZCo. v. Bitrite, 39 S.W. 966 (Tex.);
309
§ 362 PROMOTERS [Chap. VI
other party to the contract has a remedy against the company.*
The facts may, however, be sufficient to establish a novation
whereby, with the consent of the other party to the contract, the
corporation is substituted in the place of the promoter, who will
then be discharged from liability for the future.^ Moreover, the
promoter's liability may, of course, by the terms of the contract,
be made expressly conditional on the receipt of sufficient f unds,^
or the failure of the company to adopt the agreement,* or indeed
any other event.
§ 362. Liability for Torts. — The liabilities of promoters
ex delicto to persons other than the company both before and
after incorporation are governed by the usual principles of the
law of torts. The principle that promoters are not partners ^
protects them from any liabiUty for the torts of each other unless
there is actual agency.® But, of course, they are jointly and
severally responsible for all torts in which they participate. In
other words, they are not protected from liability because they
'are acting for a corporation, either to be formed or already in
existence — a self-evident proposition. For instance, promoters
who fraudulently organize a corporation under a name unduly
similar to that of an existing concern are personally liable for all
damages sustained by the latter.' So, where a corporation is
formed for the purpose of violating an injunction against infring-
ing a patent, the promoters are liable individually for the infringe-
ment and for the contempt of court.* In some cases, promoters
Chicago BUg. & Mfg. Co. v. TalboUon » Supra, § 311-§ 314.
Creamery, etc. Co., 106 Ga. 84; 31 ° Wilson v. Hotchkiss, 2 Ont.
S. E. 809; Heckman's Estate, 172 L: R. 261 (semble), affirmed in MiZ-
Pa. St. 185; 33 Atl.,552 (com- fewrn v. TFiZson, 31 Can. Sup. Ct. 481.
mented upon supra, § 3?6). But see Getty v. Devlin, 54 N. Y.
' Scott V. Lm-d Ebury, 2 C. P. 255 ; 403, 413-414 (reported on a subse-
Witmer v. Schlatter, 2 Rawle(Pa.) 359. quent appeal in 70 N. Y. 504) ; Hcym-
' This may be the explanation blower v. CrandaU, 7 Mo. App. 220,
of the cases cited in the latter part 230, 231, affirmed, 78 Mo. 581.
of note 7, p. 309. ' Societe Anonyme, etc. v. Pan-
^ Higgins v. Hopkins, 3 Ex. 163; hard-Levassor Motor Co. (1901), 2
Landman v. Entwisde, 7 Ex. 632. Ch. 513, 516-517.
* Cf. Case Mfg. Co. v. Soxman, " Diamond Drill, etc. Co. v. KeUey
138 U. S. 431 (headnote misleading) ; Bros., 130 Fed. 893.
11 Sup. Ct. 360.
310
§ 307-§ 415] LIABILITIES TO CORPORATION § 364
may be held liable as principals for torts committed by a subor-
dinate without their authority, although if the corporation had
been in existence, it would have been the principal and therefore
liable instead of the promoters. For instance, promoters who
prior to incorporation employ an agent to solicit subscriptions to
the shares of the projected company are liable for deceit practised
by the agent in procuring subscriptions.' In some cases, pro-
moters have been held to stand in a fiduciary relation towards
the several shareholders, and the latter have accordingly been
allowed to maintain actions for damages sustained in consequence
of the promoters' failure to disclose material facts ;^ but this
result is diflBcult to justify on principle.^
§ 363. Suits by Promoters on Contracts made on behalf of
Projected Corporation. — The promoters may, of course, sue
upon any contract made by them on behalf of a projected cor-
poration upon which according to the principles stated above
they might themselves be sued.* A judgment for the defendant
in an action by the corporation on such a contract is clearly no
bar to a suit by the promoters thereon.' And in estimating the
damages sustained by the promoters from the breach of a con-
tract to furnish them machinery for the use of the corporation,
the jury may take into account losses sustained by them as mem-
bers of the company."
§ 364r-§ 403. LIABILITIES OF PROMOTERS TO THE
COMPANY.
§ 364. No Duty of Active Care for Interests of Company. —
The relation of promoters to the projected company is not such
as to cast upon them any positive duty of caring for its interests.
'■ Milhum V. Wilson, 31 Can. 248; 22N. E. 907; 15 Am. St. Rep.
Sup. Ct. 481, affirming WUson v. 193 ; 5 L. R. A. 586.
Hotchkiss, 2 Ont. L. R. 261. But see Smith v. Parker, 148 Ind.
' Brewster v. Hatch, 122 N. Y. 127, 133-134 ; 45 N. E. 770.
349; 25 N. E. 505; 19 Am. St. Rep. « AbboU v. Hapgood, 150 Mass.
498. 248 ; 22 N. E. 907 ; 15 Am. St. Rep.
See infra, § 413. 193; 5 L. R. A. 586.
' See infra, § 413.- » AbboU v. Hapgood, 150 Mass.
* Abbott v. Hapgood, 150 Mass. 248; 22 N. E. 907; 15 Am. St. Rep.
193 ; 5 L. R. A. 586.
311
§ 365 PROMOTERS [Chap. VI
For instance, they are under no obligation to use diligence in
procuring subscribers to its capital; nor to provide it with a
satisfactory constitution. So, if they should negligently omit to
insert in the incorporation paper clauses essential to the success-
ful working of the company, nevertheless the latter would doubt-
less have no claim against them. In a word, their duties to the
company are wholly negative; and their liabilities to it arise
entirely from their disabilities.
§ 365. Fiduciary Relation to Company — Three Consequences.
— Being, however, in a position in which profits may readily
be made at the expense of the company and its future mem-
bers and in which they may practically shape the destinies
of the enterprise, promoters are deemed in law to occupy a
fiduciary relation toward the projected corporation.' And from
this relation three important consequences flow. In the first
place, all contracts or other dealings by the promoter with the
corporation are voidable at the option of the latter unless full
disclosure is made by the former of all material circumstances ; ''
secondly, the promoter must account to the corporation for all
secret profits made by him out of his fiduciary relation ; ^ and
thirdly, the promoter is Uable in damages for any consequences
injurious to the company that may result from action on his part
inconsistent with his fiduciary position.|f While these several
principles of law are entirely distinct, yet in many cases and
many text-books, a failure to discriminate accurately between
them has resulted in much confusion. For although these princi-
ples are distinct, yet they overlap, so that to many cases two or
more of them apply. Thus, secret profits for which a promoter
is accountable are often made out of dealings with the company,
' Old Dominion Copper Mining, full disclosure was in fact performed.
etc. Co. V. Bigelow, 188 Mass. 316; Densmore OH Co. v. Densmore, 64
74N. E. 653; 108 Am. St. Rep. 479 ; Pa. St. 43, apparently proceeds on
and numerous other cases. The the theory that a promoter does
case of St. Louis, etc. B. R. Co. v. not occupy a fiduciary relation to
Tiernan, 37 Kans. 606, 629 ; 15 Pac. the company unless he is also a
544, stands almost, if not quite, director or at least a shareholder;
alone in denying the fundamental but this distinction is not supported
proposition stated in the text, and by the authorities generally. The
is justly criticised in Alger on Pro- case is commented on infra, § 384.
moters, § 9. The actual decision ' See infra, § 368-§ 374.
may be supported on the ground ' See infra, § 375-§ 399.
that the fiduciary duty of making * See infra, § 400-§ 402.
312
§ 307-§ 415] LIABILITIES TO CORPORATION § 366
and, moreover, the profit made by a promoter on a contract
with the company is a material circumstance so that unless it
be disclosed the corporation may avoid the transactionj/nideed,
where the promoter engages in dealings with the company with-
out disclosing some material circumstance the company has
three possible remedies: (1) rescission of the contract, (2)
afiirmance of the contract coupled with a suit to compel the
promoter to account for his profits on the transaction, and (3)
a suit for damages. Hence, much of the difiiculty and com-
plexity attending the subject.
■ § 366. Comparison with Directors. — The position of pro-
moters with reference to secret profits and with reference to deal-
ings with the corporation is naturally often compared with that of
directors. The relation between directors and corporation, how-
ever, is a legal status of a definite kind. One may with com-
parative ease determine when the relationship begins and ends.
Moreover, a director's duties are largely prescribed by statute;
and the corporation or cestui que trust is generally throughout
their continuance sui juris and able to care for its own interests.
A promoter on the other hand is a self-appointed fiduciary.
Indeed, a quibbler might object that he is not a fiduciary at all,
since no other person has reposed a trust in him.^ Consequently,
much practical difiiculty is encountered in determining when
this self-assumed trust originates. Further, a director may,
and in general should, abstain wholly from contracting or deal-
ing with the company. But with a promoter, not merely is such
abstention impracticable, but indeed the sale of his property to
the corporation, or other dealing with it, is often the prime
motive impelling him to promote the company. Lastly, a
director owes positive duties of vigilance and so forth, while a
promoter as above stated incurs no such obligation. Neverthe-
less, after full effect is given to all these differences, the disabili-
ties of directors and promoters in respect to secret profits and
deaUngs with the company are very similar. In considering a
case relative to a promoter, the reader is, therefore, cautioned
not to neglect the decisions relative to directors, and vice versa.
' Maxwell v. Port Tennant Co., ment Ass'n, 99 Wise. 54; 74 N. W.
24 Beav. 495; Hebgen v. Koeffler, 633.
97 Wise. 313; 72N.W. 745; Limited ' Lydney Iron Co. v. Bird, 33
Investment Ass'n v. Glendale Invest- Ch. D. 85.
313
I 367 PROMOTERS [Chap. VI
§ 367. Liability for Actual Fraud and Deceit. — In cases of
actual affirmative fraud by promoters, relief can generally be
obtained by virtue of the general law of torts, without resorting
to any peculiar principles of the law of promoters. Thus, if
promoters obtain a contract from a corporation by fraudulent
misrepresentation, the company may rescind the contract or
may affirm the transaction and at the same time sue in an action
of deceit for damages. In such an action of deceit against pro-
moters for inducing a corporation which they are promoting to
purchase their property, the company cannot charge them with
the expenses of its own organization; such damages are too
remote.^ Moreover, not merely may the corporation sue the
fraudulent promoters for deceit, but every shareholder or other
person who is intended to and does rely upon the misrepresenta^
tion has the same remedy. If all the existing members of the
company are concerned in the fraud or otherwise acquainted
with the facts, the corporation as a legal entity cannot be said to
rely on the misrepresentation, and consequently would have no
action for deceit. Individual shareholders or bondholders, how-
ever, who subscribe on the faith of the misstatement, might sue
the promoters at law for deceit. A natural reluctance to make,
or to sustain, the serious charge of fraud prevents many cases
from being placed on that ground. The peculiar principles of
the law of promoters come into play only when the ordinary
liability for fraud or other tort cannot be made out or is not
sought to be enforced.
§ 368-§ 374. Rescission by Corporation of Contracts wiih
Promoters.
§ 368. In general. — As already implied, a promoter is not
. precluded from selling property to the corporation, or otherwise
dealing with it, provided full disclosure is made of all circum-
stances Ukely to affect the action of the company as to the
proposed contract. But unless full disclosure of all material
facts is made by the promoter, the company may rescind any
contract between itself and him.^ The promoter is a fiduciary
' Cortes Co. V. Thannhauser, 45 N. E. 653; 108 Am. St. Rep. 479;
Fed. 7.30, 739-740. Camden Land Co. v. Lewis, 101 Me.
' Old Dominion Copper Mining, 78; 63 Atl. 523 (semble), and many
etc. Co. y. Bigelow, 188 Mass. 315 ; 74 other cases cited below.
314
§ 307-§ 415] CONTRACTS WITH COMPANY § 370
and the company is, so to speak, the cestui que trust; and con-
sequently dealings between the promoter and the company are
subject to the rules which govern transactions between a trustee
and his cestui que trvM, but are not entirely prohibited as are
contracts between a trustee, acting on behalf of the trust
estate, and himself acting on his own behalf. For instance, a
failure to disclose that a foreign concession which the promoter
is selling to the company has become liable to forfeiture will
entitle the latter to avoid the contract.* Indeed, transactions
between a promoter and his corporation are prima facie voidable;
and the burden of sustaining them by proof of full disclosure
rests upon the promoter,^ although when the corporation sues
to recover a promoter's secret profits, the rule is otherwise, the
burden of proving non-disclosure resting on the company.^ A
provision in the contract between the corporation and the pro-
moter that it shall not be voidable for non-disclosure is ineffec-
tive.* A court of equity has jurisdiction of a bill by the company
for rescission of the contract.'
§ 369. What Disclosure sufficient, and to whom it must be
made, to render Contract binding. — As to what form of dis-
closure is sufficient and to whom the disclosure must be made,
the same principles would seem to apply in these rescission cases
as in cases of alleged secret profits; and therefore the whole
matter is treated below." It should be borne in mind, however,
as stated in the preceding paragraph, that in the former class
of cases the burden of proving disclosure is on the promoter
while in the latter the company must prove non-disclosure.
§ 370. Return of Consideration as Condition of Rescission.
— Ordinarily an offer by the company to return the considera-
tion received by it is a condition precedent to rescission, but
where the consideration has ceased to exist without the com-
pany's fault a failure to make such an offer is excused.' Where
' Phosphate Sewage Co. v. Hart- ° Old Dominion Copper Mining,
mont, 5 Ch. D. 394. etc. Co. v. Bigelow, 188 Mass. 315 ;
= See Bice's Appeal, 79 Pa. St. 74 N. E. 653 ; 108 Am. St. Rep.
168, 204. 479 ; Fred Macey Co. v. Macey, 143
= Bentinck v. Fenn, 12 A. C. 652. Mich. 138; 106 N. W. 722.
See infra, § 392. » Infra, § 395-§ 398.
* Gluckstein v. Barnes (1900), ' Phosphate Sewage Co. v. Hart-
A. C. 240. mont, 5 Ch. D. 394.
Cf. Watts V. BucknaU (1902),
2 Ch. 628.
315
§ 371 PROMOTERS [Chap. VI
the consideration consists of land sold to the company, for
which, however, no deed had been executed, an offer to restore
possession to the vendor is a sufBcient tender of a return of
the consideration.'
§ 371. Waiver of Right to Rescind. — The right of rescission
is a privilege which the company may elect to refrain from ex-
ercising. Consequently, the contract may be confirmed by the
company either expressly or impliedly, and thereafter will be
unimpeachable. The right of the company to rescind cannot,
however, be barred by any confirmation of the contract by the
company or its shareholders without full knowledge of the facts,
including the promoter's profit.^ The confirmation is itself
voidable unless the company was then apprised- of all material
facts.
§ 372. Laches of Company. — The corporation's right to
rescind the transaction may be barred by laches.' But in com-
puting laches, time during which the company had a board of
directors controlled by the promoters is not to be reckoned.*
The failure of a shareholders' meeting, which was regarded as
merely formal and was attended by a small minority of the mem-
bers, to take steps looking to rescission cannot bar the company.*
Nor is it laches for a shareholders' meeting, instead of rescinding
the contract at once, which would involve an abandonment of
the undertaking, to apjKjint a committee of inquiry." Where,
however, the property sold to the company by the promoters
is of a wasting character, such as a nitrate bed, rescission will
not be granted after the property has been impoverished.' At
all events, rescission or anything in the nature of rescission is
clearly impossible after the corporation has parted with the
' Cartes Co. v. Thannhauser, 45 * Loffunas Nitrate Co. v. Lagunas
Fed. 731, 739. Syndicate (1899), 2 Ch. 392, 433.
" See Hebgen v. Koeffler, 97 Wise. ° Erlanger v. New Sombrero Phos-
313 ; 72 N. W. 745. phaie Co., 3 A. C. 1218, 1251, 1258.
^ Cf. Fred Macey Co. v. Macey, " Erlanger v. New Sombrero Phos-
143 Mich. 138; 106 N. W. 722 pAate Co., 3 A. C. 1218.
(where the company having pro- ' Lagunas Nitrate Co. v. Lagunas
tested promptly on discovery of the Syndicate (1899), 2 Ch. 392; Vigers
facts and having consumed time in v. Pike, 8 CI. & Fin. 562.
a fruitless effort to reach a settle- Cf. Erlanger v. New Sombrero
ment out of court was held not to Phosphate Co., 3 A. C. 1218.
be barred).
316
§ 307-§ 415] ACCOUNTABILITY FOR PROFITS § 376
property;^ for the company is then unable to restore the con-
sideration.
§ 373. Effect of Dissolution of Corporation on Right of Rescis-
sion. — Question has been made whether rescission can be
granted after corporate existence has expired; ^ but it would
seem that the powers of chancery ought to be capable of pre-
venting such an accident from defeating an equity.
§ 374. Rights of individual Shareholders. — The right of
rescission when it exists is vested in the company, and cannot be
exercised by any individual shareholder.^ An individual share-
holder can sue for rescission only where the circumstances are
such as to entitle him to maintain a shareholder's bill on behalf
of the corporation.
§ 375-§ 399. LIABILITY OF PROMOTERS TO ACCOUNT TO COR-
PORATION FOR THEIR PROFITS.
§ 375. In general. — The right of the principal or cestui que
trust to all secret profits made by the agent or trustee out of his
fiduciary position is well recognized and long established, and
applies with full force as between corporation and promoter.
The doctrine is an equitable one, and therefore a court of equity
has jurisdiction of a suit by the company to recover a promoter's
secret profits although it may be only a money demand.* Profits
so made by a promoter belong in equity to the company, and if
the company's treasurer knowingly pays out the money from the
company's funds to the promoter, his oflScial bond is liable
therefor.'
§ 376. Classification of Cases in which unlawful Profits are
made. — Such secret profits are usually made either (1) on
some transaction between the promoter and a person selling
property to the corporation or otherwise dealing with it, or else
(2) on some direct dealing between the promoter and the cor-
poration.
' Salomon v. Salomon & Co. * McElhenny's Appeal, 61 Pa. St.
(1897), A. C. 22, 54 (per Lord 188.
Macnaghten). » p^^-gf ^^g j^g^^ q^ ^ Hilde-
' Lindsay Petroleum Co. v. Hurd, brand, 103 Wise. 530 ; 79 N. W.
L. R. 5 P. C. 221. 753.
' Urner v. SoUenberger, 89 Md.
316; 43 Atl. 810.
317
§ 377 PROMOTERS [Chap. VI
§ 377-§ 382. Profits made on Transactions between Promoter
and Persons having Dealings with Company.
§ 377. Outright Bribes. — In the first class of cases, the
secret profit in its grossest form takes the shape of an out-and-
out bribe, or present, given by one deaUng or intending to deal
with the corporation, for the corrupt purpose of inducing the
promoter to exercise his control over the company rather for the
interests of the bribe-giver than for the interest of the corpora-
tion. Such a bribe or present belongs in equity to the company,
and cannot be retained by the promoter. An instance may be
found in Emma Silver Mining Co. v. Lewis.^ There the owners
of a mine in America who were organizing a corporation to pur-
chase the property agreed to give their London agent a portion
of the purchase money, to induce him, when applied to for infor-
mation by intending subscribers to the capital, to refrain from
stating certain facts which might throw doubt on the value of
the property. This agreement having been carried out, it was
held, of course, that the company could recover the bribe from
the London agent. In a comparatively early case in the House
of Lords, it was held, or said, that where the bribe consists in
■ land, the company cannot treat the promoter as holding it upon
trust for itself, but is Umited to the recovery of such damages as
it may have suffered from his dereliction of duty.^ But it is sub-
mitted that, in spite of this high authority, the law is otherwise
both in England and the United States.' The company need
not show that the bribe has produced any effect or influenced
the promoter's conduct, much less that the company has suf-
fered any damage.^ Recovery is not sought because of damages
sustained, but for profits made by the company's fiduciary and
belonging in equity to the company as cestui que trust.
§ 378. Commissions and other Veiled Bribes. — A bald bribe
rather rarely occius. The company, however, is entitled to
all undisclosed profits made by a promoter by gifts from or deal-
' Emma Silver Mining Co. v. accepted as a bribe, compare cases
Lewis, 4 C. P. D. 396. with reference to directors, infra,
» TyrreU v. Bank of London, 10 § 1617-§ 1619.
H. L. C. 26, 59. * Yale Ga^ Stove Co. v. WUcox,
' For the whole subject of the 64 Conn. 101, 125 ; 29 Atl. 303 ; 42
rights and liabilities of the parties Am. St. Rep. 159; 25 L. E. A.
where stock or property has been 90.
318
§ 307-§ 415] ACCOUNTABILITY FOR PROFITS § 380
ings with a vendor to the company or other person having to do
with it. No actual bribery is necessary to recovery ; it is enough
that the tendency of such secret profits is to lead the promoter
from the path of duty. Thus, a promoter must account to the
company for all sums secretly received by him from one selling
property to it, whether as commission for his services in organ-
izing the company,' or otherwise.^ Where a promoter holds an
option for the purchase of land from W, its owner, for $25,000,
and the company agrees to buy the land from W for a larger
sum, the promoter cannot exercise his option, transfer the title
from himself to the company, and pocket the difference between
the $25,000 and the amount which the company agreed to pay ;
to do so would practically be to receive a secret commission from
W, whom the company understood to be the real vendor to it.^
§ 379. Mutual Rights of Bribe-giver and the Company. —
Not merely may the corporation recover the bribe or commis-
sion from the promoter when it has been paid to him, but also
may treat any such agreement between him and the vendor as
made for its own benefit; and therefore may recover from the
vendor any sums which he has agreed to pay to the promoter out
of the purchase money, but which he has not yet actually paid.*
Indeed, the vendor is liable to the company for the amount of
the bribe although he has already paid it over to the promoter ; '
and in such a case the fact that the promoter is a large share-
holder in the company so that a part of the amount recovered by
it would ordinarily inure to his own benefit is no defence in
whole or in part to an action at law by the company against the
vendor.'
§ 380. Mutual Rights of Bribe-giver and Promoter. — Of
course, if the secret commission has been collected by the com-
pany from the vendor, the promoter cannot recover it from the
' Lydney Iron Co. v. Bird, 33 Ch. Gas Stove Co. v. WUcox, 64 Conn.
D. 85; The Tdegraph v. Loetscher, 101, 125; 29 Atl. 303; 42 Am. St.
101 N. W. 773; 127 Iowa 383. Rep. 159; 25 L. R. A. 90.
' Bland's Case (1893), 2 Ch. 612; ' Plaquemines, etc. Co. v. Buck,
Hichens v. Congreve, 4 Russ. 562; 52 N. J. Eq. 219, 230-237.
Cook V. Climber Co., 75 Miss. 121 ; * WJialey Bridge Calico Co. v.
21 So. 795; Koster v. Pain, 41 N. Y. Green, 5 Q. B. D. 109.
App. Div. 443 ; 58 N. Y. Supp. 865. ' Grand Rapids, etc. Co. v. Cin-
It makes no difference that the cinnati, etc. Co., 45 Fed. 671.
property may be fully worth the " Grand Rapids, etc. Co. v. Cin^
price paid by the company. Yale cinnati, etc. Co., 45 Fed. 671.
319
§ 381 PROMOTERS [Chap. VI
company.' Indeed, the agreement between the promoter and
the vendor being illegal, the former cannot in any case maintain
an action thereon against the latter to recover the promised bribe
or present.^
§ 381. Company's Right to recover Bribe independent of its
Right to avoid its Contract with Bribe-giver. — While the fact
that a bribe or secret profit has been received by a promoter
from a vendor or other person dealing with the company gives
the corporation the right to rescind the sale or other contract,^
yet that right is entirely independent of its right to recover the
secret profit made by the promoter. Accordingly, the secret
profit may be recovered, although the company chooses to affirm
the sale.* Or, if the company receives from the vendor a sum of
money in consideration of its abandonment of the claim for re-
scission, it may nevertheless recover the full amount of the
secret profit made by the promoter, who is not entitled to deduct
or recoup the sum so received from the vendor.' But it has been
held that where the company abandons its claim to rescission,
its case also falls against one whose only misconduct or indis-
cretion consisted in acting as soUcitor both for the corporation
and the vendors."
§ 382. Promoter's Right to set-ofE or recoup Expenses in-
curred on Company's behalf. — The English courts have sev-
eral times held that where a secret payment is made by a vendor
to a promoter out of the purchase money, the promoter may re-
duce the company's claim therefor by the amount of his ex-
penses incurred in organizing the corporation.' As pointed out
' Central Land Co. v. Obenchain, Congreve, 4 Russ. 562, 4 Sim. 420;
92 Va. 130; 22 S. E. 876. TyrreU v. Bank of London, 10 H. L.
' Wilcox V. Foley, 64 Conn. 101, C. 26 ; Yale Gas Stove Co. v. Wilcox,
129 ; 29 Atl. 303 ; 42 Am. St. Rep. 64 Comi. 101 ; 29 Atl. 303 ; 42 Am.
159; 25 L. R. A. 90. St. Rep. 159; 25 L. R. A. 90; Hay-
Cf. Harrington v. Victoria, etc. ward v. Leeson, 176 Mass. 310, 322 ;
Dock Co., 3 Q. B. D. 549, a case of 57 N. E. 656; 49 L. R. A. 725.
an ordinary agent instead of a " BoffraoH v. CarZtora, 6 Ch.D. 371.
promoter. ' BagnaU v. Carlton, 6 Ch. D.
But see Mayor, etc. of Salford v. 371. See also infra, § 385.
Lever (1891), 1 Q. B. 168. . ' BagnaU v. Carlton, 6 Ch. D.
^ Supra, § 368 et seq. 371 ; Lydney Iron Co. v. Bird, 33
* Emma Silver Mining Co. v. Ch. D. 85; Emma Silver Mining
Lewis, 4 C. P. D. 396; Lydney Iron Co. v. Grant, 11 Ch. D. 918. Accord :
Co. V. Bird, 33 Ch. D. 85; Bland's Hayward v. Leeson, 176 Mass. 310,
Case (1893), 2 Ch. 612; Hichens v. 322; 57N.E.656; 49L.R.A.725.
320
§ 307-§ 415] ACCOUNTABILITY FOB PROFITS § 384
in another place,' so far as the promoter is allowed for expenses
prior to incorporation, this doctrine seems inconsistent with the
English rule by which promoters are not permitted to recover
from the company their expenses in bringing it out. The pay-
ments for which the promoter may obtain allowance need not be
strictly moral or such as to commend themselves to the court:
for instance, promoters have in such cases been allowed for
money spent to induce prominent men to serve as directors and
for "bulling" the company's securities.^ No payment can be
allowed, however, which is ultra vires of the company.^ Nor
will the promoters be permitted to retain a commission for their
own services.*
§ 383-§ 390. Profits Tnade on a Transaction between Promoters
and the Company.
§ 383. In general. — The second class of cases in which
secret profits are commonly made by promoters is on direct deal-
ings between themselves and the company. As already stated,
such contracts are voidable by the corporation unless full dis-
closure is made of all material circumstances including the pro-
moter's interest in the transaction.^ If this right of rescission is
exercised by the company, the promoter must be restored to his
stat-us in quo, so that necessarily he can derive no profit from the
transaction; and hence no question as to the company's right
to recover profits could arise." But if the company elects to
affirm the contract, or if the right tp. rescind is lost by laches or
otherwise, the question becomes very important how far the cor-
poration is entitled to the promoter's profit. In general, it seems
clear that such profit unless disclosed may be recovered by the
company in spite of the failure to rescind.'
§ 384. Purchase of Property by Promoter and Resale to
Company — Measure of Promoter's Profit. — Thus, where a pro-
moter after starting to organize a corporation, purchases prop-
' Supra, § 339. ° It is said that an election to
' Emma Silver Mining Co. v. rescind, once made, cannot be re-
Grant, 11 Ch. D. 918. tracted by the company. Limited
' Lydney Iron Co. v. Bird, 33 Investment Ass. v. Glendale Invest-
Ch. D. 85. men* Ass., 99 Wise. 64, 58 ; 74 N. W.
* BagnaU v. Carlton, 6 Ch. D. 633.
371. ' Ex-Mission Land, etc. Co. v.
" Supra, § 368 et seq. Flash, 97 Cal. 610, 636 ; 32 Pac. 600.
VOL. I. — 21 321
384
PROMOTERS
[Chap. VI
erty for the purpose of selling it to the company at an advance,
and afterwards does so sell it, but without disclosing his
ownership, or the price at which he purchased, or other material
fact, the corporation may recover from him his profit on the pur-
chase and resale.' In other words, the corporation may treat
the purchase made by its fiduciary as made for its benefit.^ But
where the promoter's purchase was completed before any step
toward forming the corporation was taken, the question is more
difficult. In that case, clearly the company cannot recover from
the promoter the excess of the price paid by it over that at which
the promoter at some time past may have bought. For that is
not the measure of the promoter's profit ; his purchase antedating
the promotion of the corporation cannot be taken as made for
the company's benefit.^ His profit is the difference between the
price paid by the corporation and the actual saleable value of
the property at the time of the purchases by the company ; and
unless such a difference is proved, the company's claim to the
promoter's profit must fail for the simple reason that the promoter
' Tyrrell v. Bank of London, 10
H. L. C. 26 (failure to disclose fact
of promoter's ownership) ; South
Joplin Land Co. v. Case, 104 Mo.
572 ; 16 S. W. 390 (failure to state
price paid by promoter) ; Woodbury
Heights Land Co. v. Loudenslager,
55 N. J. Eq. 78; 35 Atl. 436 (re-
versed in part in Lovdenslager v.
Woodbury Heights Land Co., SS^N. J.
Eq. 556 ; 43 Atl. 671) ; Plaquemines,
etc. Co. V. Buck, 52 N. J. Eq. 219,
237-240; 27 Atl. 1094; Burbank
V. Dennis, 101 Cal. 90; 35 Pac.
444 (a case of affirmative fraud) ;
McElhenny's Appeal, 61 Pa. St. 188,
195 ; Exter v. Sawyer, 146 Mo. 302 ;
47 S. W. 951 (failure to disclose
price paid by promoter) ; Pietsch
V. Milbrath, 101 N. W. 388; 123
Wise. 647; 107 Am. St. Rep. 1017
(rehearing denied, 102 N. W. 342);
Walker v. Pike County Land Co., 139
Fed. 608; 71 C. C. A. 593 (pro-
moter falsely representing that he
had no interest in property and that
owners would not sell for less than
company was paying); Central
Trust Co. V. East Tennessee' Land
Co., 116 Fed. 743; Yeiser v. U. S.
Board, etc. Co., 107 Fed. 340; 46
CCA. 567; 52 L. R. A. 724.
Cf. Dickerman v. Northern Trv^t
Co., 176 U. S. 181, 203-206; 20
Sup. Ct. 311 ; Leeds and Hardey The-
atres (1902), 2 Ch. 809, 813-814,
821-822, 825 (where the proposition
stated in the text was approved by
Wright, J., but questioned by the
Court of Appeal).
' See infra, § 399.
' Burbank v. Dennis, 101 Cal. 90,
98; 35 Pac. 444; Densmore OH Co.
V. Densmore, 64 Pa. St. 43; Hess
Mfg. Co., 23 Can. Sup. Ct. 644
(affirming S. C, 21 Ont. App. 66) ;
Milwaukee Cold Storage Co. v.
Dexter, 99 Wise. 214 ; 74 N. W. 976 ;
40 L. R. A. 837; Lady Forrest
(Murchison) Gold Mine (1901), 1 Ch.
582.
Cf. Spaulding v. North Mil-
waukee Town Site Co., 106 Wise.
481 ; 81 N. W. 1064 ; Highway Ad-
vertising Co. V. Ellis, 7 Ont. L. R.
504.
322
§ 307-§ 415] ACCOUNTABILITY FOB PROFITS § 385
made no profit.^ This would seem to be the true ground for the
decision in Densmore Oil Co. v. DensTnore? There, an owner of
property organized a corporation to purchase it, and the com-
pany afterwards brought suit to recover the difference between
the price it had paid and that at which the vendor had bought ;
and it was quite properly held that the company could not re-
cover that amount. And moreover, since the land was worth on
the market the full price paid for it by the company, the pro-
moter really made no profit, and could therefore be accountable
for none, so that a judgment for the defendant was properly
entered. In that way, the actual deciaon may be supported;
but the court took the ground that a vendor who had owned
property before beginning the promotion of a company to pur-
chase it, deals with the corporation at arm's length, and is under
no duty of disclosure — a position which under the existing au-
thorities can hardly be maintained, and which on principle seems
clearly unsound. It is therefore submitted that the decision
should be rested on the ground, not that the vendor and pro-
moter was entitled to retain his profit, but that he had in the eye
of the law made no profit.
§ 385. Continuation — Cafe Breton Company's Case. — But
what if a property-owner whose ownership preceded his idea of
organizing a corporation secures from the company which he
subsequently causes to be formed a good price for his prop-
erty— more than what the court finds to have been the saleable
value of the property — and that, too, although without actual
misrepresentation, yet without disclosing the fact of his owner-
ship ? May the company recover the difference between the price
paid to the promoter and the true value ? It has been twice held
by the English Court of Appeal that the company cannot do so
if the promoter practised no actual fraud or misrepresentation,
his only default being a failure to disclose his interest in the prop-
erty sold.^ The only remedy of the corporation, it was held, was
' Berdinch v. Fenn, 12 App. Cas. ,795 (affirmed on another ground by
652 (approved in Milwaukee Cold House of Lords in Bentinck v. Fenn,
■Storage Co. v. Dexter, 99 Wise. 214, 12 A. C. 652) ; LadyweU Mining Co.
230; 74 N. W. 976; 40 L. R. A. v. Brooks, 35 Ch. D. 400; Lady
837). Forrest {Murchison) Gold Mine
^ Densmore Oil Co. v. Densmore, (1901), 1 Ch. 582. In the Cape
64 Pa. St. 43. Breton Case the corporation had
' Re Cape Breton Co., 2*9 Ch. D. voluntarily refused to rescind while
323
§ 386 PROMOTERS [Chap. VI
by rescission of the sale. This doctrine seems to create an arbi-
trary exception to the usual principle with respect to secret
profits; and accordingly it has been much criticised.' But it
has recently been reaffirmed by the Privy Council,^ and there-
fore seems to represent the law of England and the British Colo-
nies. In America different results may yet be hoped for.'
§ 386. Continuation — Gluckstein v. Barnes. — A decision
not easy to square with the doctrine of the Cape Breton Case
discussed in the last paragraph is Gluckstein v. Barnes.* In that
case, a joint-stock company was being wound-up; and, as its
assets were currently believed to be insufficient to pay its deben-
ture-holders, the debentures were selling below par. A syndi-
cate bought a number of these debentures at less than par, and
also purchased the business of the defunct company from its
liquidator for £140,000. Of course, by reason of their owner-
ship of the debentures, a large part of this purchase price would
everitually find its way back to their own hands ; and in fact they
realized a profit of £20,000 on the debentures. The syndicate
sold the business of the old company to a corporation organ-
ized by themselves for the sum of £180,000. They stated pub-
licly that they had bought the property at £140,000, but did not
disclose their ownership of the debentures. The House of Lords
held that the corporation, although it had failed to rescind the
sale, could nevertheless recover from the syndicate the profit of
£20,000 derived from the ownership of the debentures. The
case may be distinguished from the Cape Breton Case, and the
cases following it, in two ways. In the first place, the immediate
organization of the company was contemplated at the time the
in the Ladywell Case rescission had promoter a, secret profit made by
become impracticable by tiie im- him at its expense).
possibility of returning the consid- ' Lindley on Companies, 6th ed.,
eration; but this distinction was 501-503.
held to make no difference in the ' Burland v. Earle (1902), A. C.
result. 83, 98-99.
Cf. Ely V. Hanford, 65 111. 267; ' Cf. Yeiser v. U. S. Board, etc.
Olympia Ltd. (1893), 2 Ch. 153, 170 Co., 107 Fed. 340; 46 C. C. A. 567;
(where Lindley, M. R., said that the 52 L. R. A. 724.
Cape Breton Case did not decide But see Insurance Press v. Moru-
that, as a general proposition, the tauk, etc. Wire Co., 103 N. Y. App.
mere impossibiUty of rescinding a Div. 472 ; 93 N. Y. Supp. 134.
contract for a purchase by a com-. * Gluckstein v. Barnes (1900),
pany precludes the company from A. C. 240 (affirming Re Olympia
obtaining from the vendor if he is a (1898),"2 Ch, 153).
324
§ 307-§ 415] ACCOUNTABILITY FOR PROFITS § 389
syndicate purchased the business and the debentures ; and in the
second place the statement that the syndicate were making a
profit of £40,000, whereas including the debenture transaction
the profit was £60,000, was a half-truth very nearly if not quite
equivalent to a positive misrepresentation. Yet, one may well
doubt whether these distinctions constitute a real difference. At
all events, whether or not the cases can be reconciled in princi-
ple, everybody will agree that Glwikstein v. Barnes is a sound
decision.
§ 387. Dicta that Promoter in making Resale deals at Arm's
Length. — In a few American cases the opinion has been inti-
mated that one who has owned property before beginning the
promotion of the company may deal at arm's length with the
corporation which he organizes, and dispose of such property
to it without disclosing the price he paid for it, or other material
circumstances.^ But it is submitted that these dicta are not law.
As promoter, he stands in a fiduciary relation towards the com-
pany which he organizes, and may not deal with it "at arm's
length." But if he comes short of that standard of frankness
which the law requires, he cannot be treated as if his original
acquisition of the property had been as trustee for the company
• — the corporation must find some other remedy.
§ 388. EfEect of false Representation that Property is resold
at same Price paid by Promoter. — If promoters represent to the
company that they are selling to it at the price at which they
themselves bought, they have been held liable to it for the differ-
ence between that price and the price at which they really bought,
irrespective, apparently, of the circumstance that their owner-
ship antedated the conception of the corporation ; '' having repre-
sented to the company that it might purchase from them for the
price which they themselves had paid, they will be required to
make good the assertion.
§ 389. Sale to Company by Promoter holding Option of Pur-
chase. — So, too, where a promoter having acquired options for
the purchase of property before beginning the organization of a
' Densmore Oil Co. v. Densmore, N. Y. App. Div. 382 ; 87 N. Y. Supp,
64 Pa. St. 43 (discussed supra, 369 (per Ingraham, J.).
§ 384) ; Milwaukee Cold Storage Co. ' Simons v. Vvlcan OH Co., 61
V. Dexter, 99 Wise. 214; 74 N. W. Pa. St. 202; 100 Am. Dec. 628.
976; 40 L. R, A. 837.
Cf. Hutchinson v. Simpson, 92
325
§ 390 PEOMOTEES [Chap. VI
company, afterwards disposes of it to the corporation for a price
in excess of the amount of his options without disclosing this fact,
he is Uable to the company for the difference : ^ he as a fiduciary
is, under the circumstances, to be regarded in equity as exercis-
ing the option for the benefit of the company, his cestui que trust.
§ 390. Albion Steel Co. v. Martin. — An instructive case is
Albion Steel Co. v. Martin.' There, M agreed to serve as direc-
tor in a company which was being formed for the purpose of
purchasing F's business. Subsequently, both before and after
incorporation, M entered into a number of contracts with F in
the usual course of trade; and these contracts, in accordance
with an ante-incorporation arrangement, the company, on pur-
chasing F's business, agreed to carry out. It was held that M
was not liable to the company for his profits on such of these con-
tracts as were made before incorporation. The case proceeds
upon the ground that as to those contracts, M was not acting in
a dual capacity, but exclusively for his own interest. Perhaps
the most satisfactory reason for the decision is that profits de-
rived from such contracts made bona fide in the regular course of
business and not directly with the company cannot be regarded
as made by the promoter by virtue of his fiduciary position.
§ 391. Profits made with Money realized upon Illegal Sale of
Stock. — The fact that the money out of which promoters make
clandestine profit was obtained by the company by an illegal
sale or issue of its stock is no objection to a recovery of that
profit by the company.^
§ 392. Company's Claim founded on Breach of Trust — Bank-
ruptcy of Promoter — Limitations and Laches. — Promoters are
' Exter V. Sawyer, 146 Mo. 302 ; Mass. 310 (headnote inadequate) ;
47 S. W. 951 ; Pittsburg Mining Co. 57 N. E. 656; 49 L. R. A. 725.
V. Spooner, 74 Wise. 307 ; 42 N. W. But see Hutchinson v. Simpson,
259; 17 Am. St. Rep. 149 (where 92 N. Y. App. Div. 382; 87 N. Y.
the case was made clearer by the Supp. 369.
positive misrepresentation of which ' Albion Sted Co. v. Martin, 1 Ch.
the promoters had been guilty) ; D. 580.
Yeiser v. U. S. Board & Paper Co., ' Pittsburg Mining Co. v. Spooner,
107 Fed. 340; 46 C. C. A. 567; 52 74 Wise. 307, 324-328; 42 N. W.
L. R. A. 724. 259; 17 Am. St. Rep. 149.
See also Hayward v. Leeson, 176
326
§ 307-§ 415] ACCOUNTABILITY FOR PROFITS § 394
deemed so far fiduciaries that a claim against them for secret
profits has been held to arise from " breach of trust "so as not
to be barred by a discharge in bankruptcy under the English
statute.' By parity of reasoning, the ordinary statute of limita-
tions would not begin to run against it until the facts are
communicated to a disinterested board of directors.^ Clearly,
therefore, such a claim will not be barred by laches for a shorter
time than the statutory period of limitations.' The right of a
company to rescission of a contract made with a promoter may,
however, be lost by laches.*
§ 393. Whether Liability is Several or Joint. — Where several
promoters, out of one transaction and in pursuance of one
common scheme, make clandestine profits, each is liable, accord-
ing to what is probably the prevailing view, for the full amount
of such profits, and not merely for the share which he has re-
ceived ; ° but the New Jersey Court of Errors has held that each
promoter is liable only for his own share."
§ 394. Burden of Proof — Fact of Profit and Non-disclosure.
— A corporation seeking to recover a promoter's secret profits,
like any other plaintiff, must prove its case. It must prove
that the promoter made a profit;' and that such profit was
not disclosed so fully and frankly as the law requires. There
is no presumption of secrecy; but the burden of proving it rests
' Emma Silver Mining Co. v. ° Loudenslager v. Woodbury
Grant, 17 Ch. D. 122. Heights Land Co., 58 N. J. Eq. 556;
' The Telegraph v. Loetscher, 101 43 Atl. 671.
N. W. 773 ; 127 Iowa 383. ' Bentinck v. Perm, 12 A. C.
But of. Re Fitzroy Bessemer Sted 652.
Co., 50 L. T. 144; Pielsch v. MH- Cf. Milwaukee Cold Storage Co.
6ra«A,101N.W.388; 102N.W.342; v. Dexter, 99 Wise. 214; 74 N. W.
123 Wise. 647; 107Am.St.Rep.l017. 976; 40 L. R. A. 837 (where the
' Ex-Mission, etc. Land Co. v. promoter paid large sums of money
FZosA, 97 Cal. 610,632; 32Pao. 600. out of his own pocket to induce a
* Supra, § 372. capitalist to subscribe or procure
° Zinc Carbonate Co. v. First Nat. subscriptions to the company's cap-
Bank, 103 Wise. 125, 135 ; 79 N. W. ital, and to content a subscriber to
229 ; 74 Am. St. Rep. 845. shares from Whom the promoter had
Cf. Fountain Spring Park v. purchased land afterwards sold to
Roberts, 92 Wise. 345; 66 N. W. the corporation and who was dis-
399; 53 Am. St. Rep. 917; Old satisfied with the low price he had
Dominion Copper Mining, etc. Co. received and the larger price the
V. Bigelow, 188 Mass. 315 ; 74 N. E. promoter was receiving).
653 ; 108 Am. St. Rep. 479.
See also cases as to directors,
infra, § 1629.
327
§ 395 PROMOTERS [Chap. VI
upon the company.* On the other hand, an agreement by the
promoter to keep the matter secret is as against him sufficient
proof of non-disclosure in the absence of any evidence to the
contrary.^
§ 395-§ 398. What is sufficient Disclosure of Profit by Promoter.
§ 395. Question the same whether Company seeks Rescission
of Transaction or Recovery of Profit. — The next question is, what
sort of disclosure is sufficient, and to whom must it be made ?
As already stated, this question is the same whether the cor-
poration is asking the recovery of a promoter's profits or the
rescission of a transaction between him and the company.'
§ 396. Disclosure must be Actual, Full, and Frank. — In
either case there must be actual disclosure; mere lack of con-
cealment is no protection.* And it is not enough merely to give
warning or even to afPord means of discovery.^ "Refined equi-
table doctrines of constructive notice have little, if any, applica^
tion to such matters as are now being dealt with. To inform a
person of a fact is one thing; to give him the means of finding it
out, if he will take trouble enough, is another thing. A promoter
of a company whose duty it was to disclose what profits he has
made, does not perform that duty by making a statement not
disclosing facts, but containing something which, if followed up
by further investigatioh, will enable the inquirer to ascertain that
profits have been made and what they amount to." ' Upon some-
what the same principle, a statement that the price of property
sold to the company is to be paid to the vendor "or his nomi-
nees " is not a sufficient disclosure that part of it is to be paid to
' Bentinck v. Fenn, 12 A. C. 652. ' Supra, § 369.
Contra: Colton Improvement Co. v. * Hayward v. Leeson, 176 Mass.
Bichter, 26 N. Y. Misc. 26 ; 55 N. Y. 310, 320 ; 57 N. E. 656 ; 49 L. R. A.
Supp. 486 (semble). 725. Difficult to reconcile is Blum
As stated supra, § 368, the burden v. Whitney, 185 N. Y. 232.
of proof is probably different where ' Gluckstein v. Barnes (1900),
the company seeks rescission of a A. C. 240.
contract with a promoter, in which But see Hodge v. U. S. Steel Corp.,
case the promoter has the burden of 64 N. J. Eq. 807 ; 54 Atl. 1 ; 60
establishing disclosure of all mate- L. R. A. 742.
rial facts. " Per Lindley, M. R., in Re Olymr-
2 See Archer's Case (1892), 1 Ch. pia (1898), 2 Ch. 153, 166 (affirmed
322 — a case of a director instead of by House of Lords in Gluckstein v.
a promoter. Barnes, ubi supra).
' 328
§ 307-§ 415] ACCOUNTABILITY FOE PROFITS § 397
a promoter.' Also, where a promoter who had no interest in cer-
tain land purported to unite with the owners in selling it to a cor-
poration, he is accountable for the portion of the purchase
money paid to him for his services in promoting the company,
since the disclosure of his pretended interest as vendor cannot
protect him as to profits made not in that capacity but as pro-
moter.^ Disclosure of the fact that promoters are making a profit
is not enough ; the amount also must be disclosed.' Disclosure
in order to be effective must be both full and frank.
§ 397. To whom the Disclosure should be made — To Direc-
tors, Shareholders, the PubUo, etc. — Unquestionably, the safest
course for promoters is to provide the company with an inde-
pendent board of directors to whom to make this full and
frank disclosure. An independent board of directors means a
board not under the control of the interested promoters; but a
board may be independent although nominated by the inter-
ested promoters. Ordinarily, where there is no disclosure to the
shareholders an independent board of directors is indispensably
necessary for the protection of the promoters.* Of course, a so-
called disclosure by the promoters to themselves as directors of
ihie company is illusory, and wholly ineffective.' So also, where
a prospectus is issued misstating material facts, "disclosure" to
the directors of the untruth of the prospectus is wholly nuga-
tory, since the pubHc have a right to act on the prospectus, and
the directors by failing to publish the disclosure practically make
themselves parties to the fraud, and so cease to be "independ-
ent." ° In one or two American cases, the existence of an in-
dependent directorate has been apparently thought to obviate
the necessity for any disclosure at all ; ' but this could not be
held without overturning the whole law of promoters as estab-
lished by the decisions.
' McKay's Case, 2 Ch. D. 1, 3. = Gluckstein v. Barnes (1900),
2 Bland's Case (1893), 2 Ch. 612. A. C. 240 ; Lagunas Nitrate Co. v.
' Lady Forrest {Murchison) Gold Lagunas Syndicate (1899), 2 Ch.
Mine (1901), 1 Ch. 582. 392, 431 ; Hayward v. Leeson, 176
* Erlanger v. New Sombrero Phos- Mass. 310, 319-320; 57 N. E. 656;
phate Co., 3 A. C. 1218. 49 L. R. A. 725.
Cf. Burbank v. Dennis, 101 Cal. " Simons v. Vulcan Oil Co., 61
90, 101 ; 35 Pac. 444 (where it Pa. St. 202, 221 ; 100 Am. Dec. 628.
seems to be laid down that in a case ' Densmore Oil Co. v. Densmore,
of actual fraud, disclosure to directors 64 Pa. St. 43 (criticised, supra § 384).
will never be sufficient. Sed qu(ere).
329
§ 397 PROMOTERS [Chap. VI
By some authorities the rule has been laid down so broadly as
apparently to exclude the possibihty of any efFectual disclosure
unless the board of directors is independent ; but such is not the
law. For, if the shareholders and the public are notified of all
the material circumstances of the proposed transaction, and also
of the fact that the board of directors is not independent, that is
sufHcient disclosure.^
If the corporation is what in England is called a "public com-
pany " — that is, a company whose securities are intended to be
offered to the pubUc — there can be no effective disclosure (in
the absence of an independent board of directors) unless it is
made to all intending subscribers, that is to say, to the public; ^
and hence, in the case of such a company, if the prospectus pub-
lished by the promoters is not frank, the corporation may re-
scind a sale from them to it.^ If, however, the corporation is
what the English term a "private company" — that is, a com-
pany whose securities are not intended for public subscription —
full disclosure to all those persons who are shareholders when
the transaction in question occurs will be sufficient, although
there be no independent board of directors.' In one English
case. In Re Ambrose Lake Tin Co.,^ the whole of the original
issue of capital stock was subscribed by the very promoters who
were selling a mine to the company, and who therefore knew all
the facts. The same promoters were also the directors. The
mine was taken by the company at a great overvaluation; but
it was held that the corporation, some of whose shares had passed
into other hands could not compel the promoters to account for
their profits on the sale ; since all the existing members of the
' Lagwims Nitrate Co. v. Lagunas (1897), A. C. 22 ; Tompkins v.
Syndicate (1899), 2 Ch. 392. Sperry, 96 Md. 560; 54 Atl. 254.
' Hayward v. Leeson, 176 Mass. Cf. St. Louis, etc. R. R. Co. v.
310, 320 ; 57 N. E. 656 ; 49 L. R. A. Tiernan, 37 Kans. 606, 633, 634 ;
725 ; Pietsch v. MiUrath, 101 N. W. 15 Pac. 544 (a case of a public com-
388 ; 123 Wise. 647 ; 107 Am. St. pany in the English sense) ; Innes &
Rep. 1017 (rehearing denied, 102 Co. (1903), 2 Ch. 254 (headnote in-
N. W. 342). adequate) ; Blum v. Whitney, 185
But see Garretson v. Pacific Crude N. Y. 232 (where it seems at least
Oil Co., 146 Cal. 184; 79 Pac. 838; doubtful whether the principle was
Hutchinson v. Simpson, 92 N. Y. properiy applied inasmuch as the
App. Div. 382 ; 87 N. Y. Supp. 369. disclosure to the shareholders seems
' Lagunas Nitrate Co. v. Lagunas not to have been frank).
Syndicate (1899), 2 Ch. 392. " Avibrose Lake Tin Co., 14 Ch.
* Salomon v. Salomon & Co. D. 390.
330
§ 307-§ 415] ACCOUNTABILITY FOR PROFITS § 398
company had complete knowledge of the circumstances; and
the court intimated that the only remedy of purchasers of the
shares would be by individual actions of deceit against the pro-
moters for inducing them to purchase by a fraudulent overval-
uation of the property. The decision certainly goes very far,
and if it be inconsistent with the doctrine as to "public com-
panies" laid down above, does' not represent the English law.
Perhaps the true distinction is that where all the authorized
capital has been issued, the knowledge and consent of all the
existing shareholders will forever prevent any complaint being
made by the corporation, even though the original subscribers
intended to dispose of their shares to the public;' but that,
where only a portion of the authorized capital has been taken
at the time of the transaction complained of, the knowledge and
consent of all the existing shareholders will not bar a subsequent
complaint by the company if the intention was that the re-
mainder of the capital should be offered by the corporation for
pubUc subscription.*— In this way the Ambrose Lake Case may
be reconciled with Lagunas Case. If the f)romoters interested
in the transaction hold, nominally, all the stock of the company,
but really (as to much the larger part) as trustees for outside
subscribers, a disclosure to and ratification by the promoters as
shareholders will not prevent the corporation, representing the
real or equitable holders of the shares — that is, the subscrib-
ers — from recovering the promoters' profits.^
§ 398. Where Gift of Profit to Promoter is Ultra Vires of
Corporation. — Where a promoter receives a " profit " from the
company as a mere gratuity, the proceeding may be %dtra vires
' Accord : Parsons v. Hayes, 14 etc. Co. v. Bigdow, 188 Mass. 315 ; 74
Abb., N. C, 419 (N. Y.); Foster y. N.B.653; 108 Am. St. Rep. 479.
Seymour, 23 Fed. 65; Seymour v. But see Garretson v. Pacific
Spring Forrest Cemetery Ass'n, 144 Crude OH Co., 146 Cal. 184; 79
N. Y. 333 ; 39 N. E. 365 ; 26 L. R. A. Pac. 838 ; Old Dominion Copper Co.
859. V. Lewisohn, 136 Fed. 916, affirmed,
Cf. Tompkins v. Sperry, 96 Md. L48 Fed. 1020 (disapproving Old
560 ; 54 Atl. 254. Dominion Copper Mining, etc. Co. v.
But see Fred Macey Co. v. Ma- Bigelow, ubi supra) ; Flagler Engrav-
cey, 143 Mich. 138; 106 N. W. ing Machine Co. v. Flagler, 19 Fed. iGS.
722. Cf. Tompjiins v. Sperry, 96 Md.
' Pietsch V. Milbrath, 101 N. W. 560 ; 54 Atl. 254.
388 ; 123 Wise. 647 ; 107 Am. St. Rep. ' Dorris v. French, 4 Hun (N. Y.),
1017 (rehearing denied, 102 N. W. 292; Arnold v. Searing (N. J. Ch.),
342); Old Dominion Copper Mining, 67 Atl. 831.
331
§ 399 PEOMOTERS [Chap. VI
of the corporation ; and therefore no amount of disclosure to the
shareholders and acquiescence by them . will enable the pro-
moter to retain it.' Even in such cases, according to the
relaxed rules of vltra vires prevailing in many of the United
States, the unanimous consent of the shareholders would prob-
ably entitle the promoter to retain the profit.
§ 399. Liability of Promoter to accoiint for Property acquired
on behalf of Company. — The corporation may of course com-
pel a promoter to account for any property which he acquires
on its behalf after its incorporation. In order to reach this result,
it is not necessary to resort to any peculiar principles of the law
of promoters. Where, however, the purchase is made by the
promoter prior to incorporation, the matter is not so simple, for
there is an apparent difficulty in holding the purchase to have
been made on behalf of a corporation which the promoters were
under no obligation'to form. Nevertheless, it is submitted that
the company when incorporated, especially if third persons are
interested in it as shareholders, should be entitled to the property
on the ground that its corporate existence for this purpose relates
back to the original purchase by the promoters. Accordingly,
it has been held that where a promoter purchases property on
behalf of the as yet unborn company, the corporation when
formed may treat the purchase as made on its behalf and may
require the promoter to convey the property to it.^ In most of
the cases of this sort, the promoter has subsequently sold the
property to the company at an advance and the company has
sought to recover his profit on the resale.^ But, as just stated,
the same principle applies if the promoter attempts to hold the
property as his own. Where promoters transfer to the corpora-
tion an option held by them for the purchase of certain real estate,
' Mann v. Edinburgh Northern 822, 825 (where the doctrines ad-
Tramways Co. (1893), A. C. 69. vocated in the text were approved
" Seacoast R. R. Co. v. Wood, by Wright, J., in the Chancery
56 Atl. 337; 65 N. J. Eq. 530; Division but questioned by the
Central Trust Co. v. Lappe (Pa.), 65 judges of the Court of' Appeal on
Atl. 1111. appeal).
Cf. Leeds & Hartley Theatres ' See supra, § 384*.
(1902), 2 Ch. 809, 813-814, 821-
332
§ 307-§ 415] LIABILITY IN DAMAGES § 401
and the corporation allows the option to expire, the promoters
are at liberty, it has been held, to purchase the property on their
own account.'
§ 400-§ 402. Liability of Promoters in Damages for Breach
of Fiduciary Duty to Company.
§ 400. In general. — The third consequence of the princi-
ple that promoters occupy a fiduciary relation towards the com-
pany is that for any breach of the equitable obligations which
attach to such a relationship the promoters are liable in damages.
This liability is in the nature of a liability for a breach of trust
or for an "equitable tort." Naturally, the liability cannot be
founded merely on transactions wiich occurred prior to the in-
corporation of the company; but if after incorporation the
promoters conduct themselves in a way which is inconsistent
with their duties as above outlined they subject themselves to
this liability. As pointed out above, promoters are under no
duty of taking care for the interests of the unborn or infant
company. They are entirely at liberty to dissociate themselves
from the enterprise and let it drift to ruin. On the other hand,
they may be guilty of an equitable tort if they intermeddle in
the enterprise. This doctrine, which, although not often in-
, Yoked, may nevertheless in many cases furnish a valuable,
resource to corporations, should not be confused with the ordi-
nary rules of the common law as to liability for torts, such as
deceit or fraud. The liability is a peculiar one dependent
entirely on the fiduciary relation of the promoters and is addi-
tional to the liabiUty for torts which are independent of that
relationship.
§ 401. Examples. — Thus, where promoters sell property to
the company through their own nominees or tools as directors,
if the prospectus which is issued to the public to induce subscrip-
tions to its shares contain misrepresentations, the promoters can-
not exculpate themselves by disclosing all the material facts to
the dummy directors; and consequently, as we have seen, the
company may in such a case rescind the contract or, at least
according to the better view, affirm it and require the promoters
' OiUett v. Dodge (Oreg.), 89 Pac. 741.
333
§ 402 PROMOTERS [Chap. VI
to account for their profits; but if both of these remedies are
for any reason impracticable, or if for any cause the company
prefer a different remedy, the promoters are Hable in damages
for breach of their fiduciary duty.^ It will be observed that in
such a case, even if the misrepresentations in the prospectus were
fraudulent, the common law action of deceit would not lie by
the company against the promoters ; for disclosure having been
made to the dummy directors who acted for the coippany in the
transaction, it could not be maintained that the company relied
upon the representations, so that the only liability of the promo-
ters for deceit would be to the individual subscribers for shares,
who relied upon the prospectus.. Upon the same principle, if
promoters sell property to the company without disclosing some
material fact — such as the price at which they themselves had
purchased — but without any actual misrepresentation, although
an action of deceit would not lie against them because they were
guilty of no actual misrepresentation, yet having violated their
equitable fiduciary duty, which required the utmost frankness —
vherrima fides — they are liable to the company in damages as
for an equitable tort.^
§ 402. Liability assimilated to Liability for Torts — Non-joinder
of Defendants. — Inasmuch as this liability of promoters for a
breach of their equitable fiduciary duty is deemed an
"equitable tort," it is assimilated as far as possible to liability
for common law torts. Hence, a bill in equity to enforce such a
liability will lie against one of the promoters without joining as
' Leeds dk Hartley Theatres (1902), been made on behalf of the company
2 Ch. 809 (note, that although the would be the difference between the
liability of the promoters was fre- actual value of the property sold and
quently denominated by the court the price paid therefor by the
a liability to the company for its company).
damages, yet in speaking of the ' Old Dominion Copper Mining,
amount of recovery the court said etc. Co. v. Bigelow, 188 Mass. 315;
[p. 833] that "the measure of 74N. E. 653; 108 Am. St. Rep. 479
damages is the amount of profit (note that the company had offered
which was made by" the promoters, to restore the property to the pro-
so that some doubt may be felt moters) ; Lagunas Nitrate Co v.
whether after all the court does not Lagunas Syndicate (1899), 2 Ch.
really decide merely that the pro- 392 (where the right to rescind
moters must account for their the transaction had been lost by
profits, which if their original pur- laches),
chase could not be deemed to have
334
§ 307-§ 415] LIABILITIES TO ONE ANOTHER § 405
defendants others who were jointly impUcated with him in the
wrong. ^
§ 403. Penal Liability of Promoters to Company. — Pro-
moters who act fraudulently, or otherwise contrary to law, may
incur statutory penalties, for which the statutes of each jurisdic-
tion must be consulted; but even in the absence of express
statute they have been held subject to one disability which can
properly be deemed naught but a penalty for misconduct. The
rule is thus laid down in the leading case: "If the promoter of
a company procures a company to be formed by improper and
fraudulent means, and for the purpose of securing a profit to
himself, which, if the company was successful, it would be unjust
and unequitable to allow him to retain, and the company proves
abortive and is ordered to be wound up without doing any
business, the promoter cannot be allowed to prove against the
company in the winding-up, either in respect to his services in
forming the company, or in respect to his services as an officer of
the company after the company was registered." ^ This rule,
if indeed it be universally accepted, does not seem to have
attracted the attention one would have anticipated.
§ 404-§ 411. LIABILITIES OF PROMOTERS TO ONE ANOTHER.
§ 404. Classification. — The liabilities of promoters to one
another may be divided into three classes: (1) liability to ac-
count for profits, (2) liabiUty to contribute to losses and expenses,
and (3) liability upon express contracts.
§ 405-§ 408. Accountability for Profits.
§ 405. In general — Fiduciary Relation of Promoters to One
Another. — Upon ordinary principles of equity, promoters occupy
a fiduciary relation to their associates or co-promoters,' as
well as to the company, and therefore they must account to
their fellows for any profits made on this joint enterprise and
' Old Dominion Copper Mining, ' Hereford, etc. Waggon Co., 2
etc. Co. V. Bigdow, 188 Mass. 315, Ch. D. 621, 626-627.
328-329 (headnote misleading) ; 74 = Cf. Spier v. Hyde, 92 N. Y. App.
N. E. 653; 108 Am. St. Rep. 479. Div. 467; 87 N. Y. Supp. 285.
, 335
§ 406 PROMOTERS [Chap. VI
not disclosed to them. This is true although promoters are not
partners.' If the profit in question be disclosed to the corporation,
but not to the co-promoters, the latter may demand their share
therein. If, however, the profit be not disclosed to the company,
then on the principles considered above, it belongs to the cor-
poration, which may recover it from the misconducting pro-
moters ; and this right of the corporation seems clearly to exclude
any right of the other promoters thereto. As the whole profit
belongs to the 'company, the courts ought not to be concerned
with enforcing an equal division thereof among the several pro-
moters. In cases of this sort, however, some high authorities
have directed an accounting between the several promoters.^
§ 406. Lungren v. Pennell. — A Pennsylvania case affords a
neat illustration of the Umits of the doctrine that promoters oc-
cupy a fiduciary relation to each other. The owners of real
estate sold to various persons equal undivided eighty-fourth
shares therein, and subsequently, together with the purchasers,
organized a corporation to take over the property. The Supreme
Court of Pennsylvania held that the vendors occupied no fidu-
ciary relation towards the purchasers of the undivided shares,
and were therefore under no legal obligation to make disclosure
to them.^ This decision seems clearly sound, since the only
fiduciary relation was that of all the parties — vendors and
purchasers — to the company.
§ 407. Deducting from Profit Expenses incurred for Benefit of
all Promoters. — As there is no implied agency among pro-
moters, it follows that a promoter who has transferred property
to his associates under an agreement that the property so trans-
ferred together with other property shall be assigned over to the
corporation in exchange for bonds and shares which shall there-
upon be divisible among the promoters according to a fixed
proportion, even upon the occurrence of an emergency necessitat-
' Cf . Boice V. Jones, 106 N. Y. Franey v. Warner, 96 Wise. 222 ; 71
App. Div. 547; 94 N. Y. Supp. 896. N. W. 81 (where the plaintiffs were
But see Schantz v. Oakman, 10 clearly entitled to recover from
N. Y. App. Div. 151 ; 41 N. Y. Supp. defendants damages as in the
746. common law action for deceit).
^ Emery v.'Parrott, 107 Mass. 95 ; Cf. Boice v. Jones, 106 N. Y. App.
Dole V. Wooldredge, 135 Mass. 140 ; Div. 547 ; 94 N. Y. Supp. 896.
Getty v. Devlin, 54 N. Y. 403, and ' Lungren v. Pennell, 10 W. N. C.
(on subsequent appeal) 70 N. Y. 504 ; (Pa.) 297.
336
§ 307-§ 415] LIABILITIES TO ONE ANOTHER § 409
ing a borrowing of money in order to prevent a failure of the
enterprise, the promoters have no right to use any of the stocks
and bonds in securing such a loan, and therefore they must ac-
count to the transferor for his full proportion of the securities
without deduction for any which they have used in procuring the
loan.'
§ 408. T«nmziation of Fiduciary Relation — Abandonment of
Edterprise. — If the scheme of promotion is by common con-
sent abandoned, any of the promoters is entitled subsequently
to organize a new scheme for the formation of a company ; and
in the new scheme he may avail himself of the efforts of his
associates in the abandoned enterprise without incurring any
liability to account to them for his profits on the new enterprise.^
§ 409. Contribution to Losses and Expenses. — Where pro-
moters have incurred expenses in the prosecution of the enter-
prise, all those who have concurred in the expenditure or in the
contracting of the debt are bound to contribute to the payment,
each one bearing his proportionate part measured by the number
of persons so liable ; ^ and, since such joint contractors are not
partners, one of them, paying the whole debt, may enforce his
right to contribution in an action at law,* although he may at
his election proceed in equity.^ Where the promoters have be-
come liable on a covenant to pay rent, contribution may be
enforced against one of their number who has severed his con-
nection with the project before the rent in question accrued.'
Under some circumstances, a promoter who would not be directly
liable to the other party to the contract may be called upon by
co-promoters for contribution.'
' McNeU v. Fvltz, 38 Can. Sup. ^ Lefroy v. Gore, 1 Jo. & Lat. 571,
Ct. 198. 582.
2 Parks V. Gates, 84 N. Y. App. " Boidter v. Peplow, 9 C. B.
Div. 534; 82 N. Y. Supp. 1070. 493.
' Batard v. Hawes, 2 E. & B. 287 ; ' Norbury's Case, 5 De G. & Sm.
Sandusky Coal Co. v. Walker, 27 423 ; Spottiswoode's Case, 6 De G.
Ont. 677; Lefroy v. Gore, 1 Jo. & M. & G. 345, 371.
Lat. 571, 582. But see Lefroy v. Gore, 1 Jo. &
* Batard v. Hawes, 2 E. & B. 287. Lat. 571, 681.
Cf. Denton v. Macniel, 2 Eq. 352.
But see Crow v. Green, 111 Pa.
St. 637, 641 ; 5 Atl. 23.
VOL. I. — 22 337
§ 410 PROMOTEBS [Chap. VI
§ 410-§ 411. Liability on actval Contracts between
Promoters.
§ 410. Liability on Contract to form Corporation. — Often,
indeed usually, promoters either expressly or impliedly contract
between themselves to form the corporation. Such a contract,
however, involving as it necessarily does the performance of a
succession of acts, cannot be specifically enforced in equity.' No
chancellor could undertake to supervise the complicated ques-
tions of policy that arise in the organization of a corporation.
On the other hand, where two promoters, A and B, agreed
together that A should acquire title to certain land to be conveyed
to the projected corporation in exchange for its entire capital
stock, part of which was to be transferred to B, and where after
the corporation was formed and its stock issued to A, he refused
to convey the real estate to the corporation or to transfer to B
the shares due him under the agreement, it was held that a person
claiming by assignment under B might maintain a suit for specific
performance against A to compel him to convey the land to the
company and to transfer the stock to B's assignees.^ It was
further held that such a suit is not a shareholder's suit based
upon equitable ownership of the stock and filed in the right of
the corporation, but is founded upon B's individual rights under
the contract, so that although the corporation was a proper
party defendant yet its joinder as defendant did not oust the
jurisdiction of a federal court, which was invoked on t^e ground
of diverse citizenship, although the corporation was formed
under the laws of the state of which some of the plaintiffs were
citizens.^
§ 411. Effect of Illegal Features of projected Corporation upon
Legality of Contracts between Promoters. — In the course of
the promotion of a corporation, promoters may enter into
many contracts or agreements inter sese which are governed by
the principles of the law of contracts. The circumstance that
such contracts contemplate the incorporation of a company in
~ ' Henreich v. lAdberg, 105 111. ' Rogers v. Penobscot Mining Co.,
App. 495; Rudiger v. Coleman, 112 154 Fed. 606.
N. Y. App. Div. 279. ' Rogers v. Penobscot Mining Co.,
Cf. Stacker v. Wedderburn, 3 K. 154 Fed. 606.
& J. 393.
338
§ 307-§ 415] LIABILITY TO SHAREHOLDERS § 413
no manner affects the rules of law which apply to them.' If,
however, the scheme of the projected corporation is unlawful,
such contracts may be tainted by the illegality, and on that ac-
count be unenforceable. For example, where promoters agreed
with certain brokers that the latter should sell some bonds of
the projected company and should receive in compensation for
their services in the sale of the bonds and organization of the
company an amount of stock the par value of which exceeded
the market value of such services, the court held that the con-
tract was illegal under a state constitution which forbade either
property or labor to be received in payment for stock at a
greater value than the market price, and that consequently, upon
the abandonment of the enterprise by the promoters, the brokers
could not maintain an action for damages.^ On the other hand,
an agreement between promoters for the formation of a corpora-
tion will not generally be deemed illegal or contrary to public
policy because it may fix the price at which certain property is
to be transferred to the company in payment for shares,^ unless
there be affirmative proof that the valuation was fraudulently
excessive.
§ 412-§ 415. Liability of Promoters to individual Share-
holders and Subscribers to Shares.
§ 412. Subscribers to Shares as Promoters. — ■ In one sense,
every subscriber to shares in a projected corporation is a pro-
moter. Hence the liabilities of promoters to subscribers to shares
may properly be considered under the general head of liabilities
of promoters to one another. Nevertheless, it should be observed
that it is the act of subscribing to shares which makes the sub-
scribers co-promoters. Prior to that time, they were strangers
to the enterprise.
§ 413. Whether Promoters occupy Fiduciary Relation to Sub-
scribers — LiabiUty for Non-disclosure. — In some cases, it has
' Cf. A. J. Cranor Co. v. Miller ' Lorillard v. Clyde, 86 N. Y. 384 ;
(Ala.), 41 So. 678 (where the con- Electric Fireproofing Co. v. Smith,
tract was rescinded for fraud). 113 N. Y. App. Div. 615, 621.
' Altenberg v. Grant, 85 Fed. 345; Cf. Arnold v. Searing (N. J. Ch.),
29 C. C. A. 185. 67 Atl. 831.
Cf. Garrett v. Kansas City Coal
Minim) Co., 113 Mo. 330; 20 S. W.
965; 35 Am. St. Rep. 713.
339
§ 414 PROMOTERS [Chap. VI
been said/ and In others held,' that promoters occupy a
fiduciary relation towards the subscribers to shares in the
company being promoted, and that therefore they are bound to
disclose to them all material circumstances, and will be Uable
to them in case of failure so to do. But in general, according
to the weight of authority, promoters occupy no fiduciary rela-
tion towards individual shareholders, to whom, therefore, their
liabilities must be worked out on the ordinary principles of the
law of torts. Hence, they are not responsible to an individual
shareholder for a mere failure to disclose material facts, nor for
misrepresentations made with an honest beUef in their truth.'
This latter consequence of the doctrine that promoters occupy
no fiduciary relation towards subscribers to shares has been
abrogated in England by the Directors' Liability Act of 1890.*
Moreover, in certain cases of non-disclosure without actual
misrepresentation, promoters were made Uable to subscribers to
shares by § 39 of the Companies Act of 1867 ; ' but by the
Companies Act of 1900 this section has been repealed."
§ 414. Assumption by Promoters of Fiduciary Relation to
Shareholders. — Of course, the individual shareholders may vol-
imtarily constitute the promoters their agents or trustees, and
if so, the latter then occupy towards them a fiduciary relation.
Thus in WUliamsan v. Krohn^ certain promoters, being the
holders of all the shares in a bridge company, agreed with the
plaintiflF for a consideration to give him an interest of eight per
cent in the enterprise. Subsequently, they entered into a con-
tract with a construction company by which the latter agreed to
build the bridge in consideration of a transfer to it of all the stock
of the bridge company and a large amount of its bonds. The
contract further stipulated that the construction company should
return $200,000 worth of the stock to the promoters. By a con-
' Short V. Stevenson, 63 Pa. St. * 53 & 54 Vict., c. 64.
95; Teachout v. Van Hoesen, 76 ' 30 & 31 Vict., c. 131, § 138.
Iowa 113; 40N. W. 96; 14 Am. St. See Cackett v. Keswick (1902),
Rep. 206; 1 L. R. A. 664. 2 Ch. 456.
» Brewster v. Hatch, 122 N. Y. » 63 & 64 Vict., c. 48, § 33. See
349; 25 N. E. 505; 19 Am. St. Rep. also § 9 and § 10.
498; Goodwin v. Wilbur, 104 111. ' Williamson v. Krohn, 66 Fed.
App. 45. 655; 13 C. C. A. 668, aflanning s. c.
» Derry v. Peek, 14 A. C. 337. 62 Fed. 869.
Cf. Duryea v. Zimmerman, 106 N. Y.
Supp. 237.
340
§ 307-§ 415] LIABILITY FOR RETURN OF DEPOSITS § 415
temporaneous agreement between the promoters and the con-
struction company, the former undertook to procure the necessary
land for approaches to the bridge in consideration of $300,000 in
cash and $600,000 in the bridge company's shares. The cash
portion of this premium was in fact ample, and was so regarded
by the parties at the time, for the purpose of buying the land. The
existence of the second contract was not disclosed to the plaintiff,
who was given eight per cent of the stock returned to the pro-
moters under the contract, as the full extent of his rights. On
discovery of the facts, the plaintiff filed a bill against the pro-
moters for an accounting for eight per cent of the stock acquired
by them under the second contract. The court held that the
promoters were his trustees or agents in respect to the eight per
cent interest in the stock which they had agreed to give him, that
this profit had been acquired by them by dealing with this stock,
and should have been disclosed to the plaintiff, and that accord-
ingly he was entitled to the relief prayed. That the promoters
did occupy a fiduciary relation to the plaintiff was apparent, and
that they had grossly violated their duty to him was equally
patent. The only difficulty in the case was to determine what
part of the secret profits belonged to the plaintiff and what part
to the corporation. That the plaintiff was entitled to some
portion of it, no one would question.
§ 415. Liability for Return of Subscribers' Deposits upon
Abandonment of Enterprise. — In some cases promoters prior
to the incorporation of the company receive subscriptions to its
shares and accept deposits from the subscribers. Under such
circumstances, if the scheme prove abortive, the corporation
never being organized, the subscribers may by action at law
recover back their deposits from the persons by whom they were
received ; '■ but no such recovery can be had if the moneys have
been appUed in furtherance of the scheme either under the terms
of the subscription contract ^ or with the acquiescence of the
' Walstab v. Spottiswoode, 15 M. ' Garwood v. Ede, 1 Ex. 264 ;
& W. 501 ; Ashpitel v. Sercombe, Jones v. Harrison, 2 Ex. 52 ; WUley
19L. J. Ex. 82; Nockells v. Crosby, v. Parratt, 3 Ex. 211; Baird v.
3 B. & C. 814; Hayes v. Stirling, Ross, 2 Macq. H. L. 60, 68-69;
14 Ir. C. L. Rep. 277 ; Hudson v. Watts v. Salter, 10 C. B. 477.
West, 189 Pa. St. 491; 42 Atl. 190; Cf. Vane v. Cobbold, 1 Ex. 798,
FitzwUliam v. Travis, 65 111. App. where the subscriber alleged, but
183 (semble). failed to prove, that his payment of
341
§ 415 PROMOTEKs [Chap. VI
subscribers.' Where the promoters are authorized to expend
the deposits in furthering the project, their authority to do so
cannot be revoked by a discontented subscriber, so as to entitle
him to recover his deposit without deductions for subsequent
expenditures by the promoters.^ Of course, by special contract
a promoter may agree to return a deposit without deduction if
the scheme prove abortive, although by the terms of the general
agreement among the subscribers the expenditure of the deposits
for the promotion of the company is authorized.^ One promoter
is not liable for the retm-n of deposits received by other pro-
moters,* unless the latter are his duly authorized agents. A com-
plete change in the nature of the projected incorporation is
clearly a sufficient abandonment of the scheme to entitle the
subscribers to recover back their deposits.* And if no time is
fixed for the completion of the incorporation, the subscriber is
entitled to treat the scheme as abandoned unless the company
is formed within a reasonable time." If the project was a mere
fraud or bubble, the deposits may be recovered in equity ; ' and
suits in equity have been maintained by one subscriber on be-
half of himself and all others to require the promoters to account
for the deposits.^ But in case of abandonment of a bona fide
scheme, it seems that in general the subscriber's only remedy
is at law.° Very clearly, all the subscribers must be treated
equally, and a court of equity will require the promoters to turn
the deposits pro rata without preferring any subscriber or class
the deposit had been induced by ' Green v. Barrett, 1 Simons 45;
fraud of the promoters. Cridland v. De Mauley, 1 De G. & S.
' Ashpitel V. Sercombe, 19 L. J. 459.
Ex. 82 (semble). ' Clements v. Bowes, 17 Simons
' Baird v. Ross, 2 Macq. H. L. 61. 167, 1 Drewry 684 (headnote mis-
' MowaU V. Londesborough, 4 E. leading); Williams v. Page, 24
& B. 1. Beav. 654.
* Bumside v. Dap-ell, 3 Ex. 224. But see Williams v. Salmond, 2
See also Hayes v. Stirling, 14 Ir. Kay & J. 463 ; Mosdey v. Cressey's
C. L. Rep. 277; FUzvnUiam v. Co., 1 Eq. 405 (semble).
Travis, 65 111. App. 183. Cf. , Bosher v. Land Co., 89 Va.
" Hayes v. Stirling, 14 Ir. C. L. 455 ; 16 S. E. 360 ; 37 Am. St. Rep.
Rep. 277, 282-283. 879 (where the company had been
" Hudson V. West, 189 Pa. St. incorporated).
491,495; 42 Atl. 190. • See Denton v. Macniel, 2 Eq.
See further as to evidence of 352; Stewart v. Austin, 3 Eq. 299.
abandonment, Chaplin v. Clarke, But see Apperly v. Page, 1 Phill.
4 Ex. 402. Ch. 779.
342
§ 307- § 415] LIABILITY FOR RETURN OF DEPOSITS § 415
of subscribers.' So, promoters may be enjoined from misap-
plying deposits paid by intending shareholders even though the
proposed form of the intended company be legally impossible.'
Although it be expressly stipulated that deposits shall be returned
unless shares are allotted, yet if the moneys received are placed
in bank to the company's credit the latter on its incorporation
will not be enjoined from dealing with them as its own; the
depositors have no lien on the deposits, and their remedy, and
only remedy, is, in case of no allotment being made, by an action
against the promoters for money had and received.' If the pro-
moters misapply the deposit, the applicant for shares cannot, on
abandonment of the projected incorporation, treat the deposited
moneys as a trust fund capable of being followed in equity.* If
a subscriber to shares has agreed to pay a deposit but has not
actually done so, an abandonment of the project before the
company is incorporated relieves him from the obligation to
pay the deposit.^
' WUliams v. Page, 24 Beav. 654, ' Capper's Case, 1 Sim., n. s.,
663-664. 178; Bradford yrHarris, 77 Md.
' Butt V. Monteaux, 1 K. & J. 98. 153 ; 26 Atl. 186.
' Moseley v. Cressey's Co., 1 Eq. But see Aldham v. Breton, 7 £. &
405. B. 164; 2 E. & E. 398.
* Stewart v. Austin, 3 Eq. 299.
343
CHAPTER VII
UNDERWRITING
Section
Application of principle of insurance to promotion of corporations 416
.Risks insured against by underwriting agreements 417
Advantages of underwriting to persons interested in the company 418
Definition of underwriting as applied to shares, bonds, etc. . .419
Parties to underwriting agreements 420-422
Agreements between the underwriter and the company . 420
Agreements of underwriters inter sese and with a trustee for a
corporation or a projected corporation 421
Device for enabling company to take advantage of underwriting
agreement to -which it is not party . . 422
Other and miscellaneous kinds of underwriting, real or so-called 423
Acceptance of offer to make underwriting agreement 424-426
Necessity for acceptance 424
What amounts to acceptance 425
Time of acceptance 426
Consideration for underwriting 427-430
Nature of the consideration . 427
By whom consideration is paid — in general 428
Legality of payment by company 429
Actions or suits by underwriter to recover his consideration . . 430
The offer of the securities underwritten to the public for subscrip-
tion ... 431-433
Necessity for offer of the securities to the public . . .431
Time for offer to pubUc . . . . ... 432
What is such a taking by the public as wiU discharge the under-
writer. . . .... 433
Conditions in underwriting agreements 434^-435
Implied conditions . .... . . 434
Express condition that a certain number of the securities be
underwritten . 435
Discharge of underwriter by alteration of risk . .' 436
Right of underwriter of bonds to overdue coupons . . 437
How far underwriting agreements are subject to the special rules
applicable to subscriptions to securities of the kind under-
written . 438-441
In general 438
Underwriting agreement binding although conditional — dis-
tinguished from other conditional subscriptions to shares 439
Underwriter of bonds not discharged by insolvency of company 440
Right of underwriter to rescind underwriting agreement for
fraud or misrepresentation 441
Enforcement of underwriter's agreement 442^45
Enforcement by company directly 442
344
§ 416-§ 446] - UNDERWRITING . § 417
Enforcement of underwriter's agreement {continued) Section
Enforcement by means of a power of attorney given by the under-
writer to accept on his behalf the securities under-
written 443-445
Whether the power of attorney is revocable 443
Conditions of exercise of power 444
Advantages of taking a power of attorney from underwriter 445
Assignments of underwriting agreements 446
§ 416. Application of Principle of Insurance to Promotion of
Corporations. — • One of the modern devices by which the pro-
motion or "flotation" of a corporation is nowadays generally
facilitated is the underwriting of its securities. Business men are
wisely sensible of the advantage of insuring against all possible
risks and uncertainties ; and consequently recent years have wit-
nessed enormous extensions in the application of the principle of
insurance. In respect to the promotion of corporations, this fact
is illustrated by the growth of the practice of underwriting
securities.
§ 417. Risks insured against by Underwriting Agreements. —
When any corporate enterprise is launched, the most immediate
object of solicitude to the promoters is the procurement of sub-
scriptions to the shares, bonds, debentures, or other securities
that may be put upon the market. Prospectuses are pubUshed,
and all the other familiar and elaborate advertising devices are
resorted to for the purpose of inducing the public to subscribe.
But in spite of such efforts, accidental circumstances — a rumor
of war, the circulation of a false report as to the company's pros-
pects, or any one of a thousand similar accidents — may defeat
the best grounded expectations and prevent the successful mar-
keting of the company's securities. The promoters will natu-
rally exert themselves to prevent such a frustration of their plans ;
and if skilled financiers are included among their number, they
are apt to be measurably successful. But the possibility of fail-
ure in this endeavor to float the securities can be reduced to
a minimum if only some responsible person or persons can be
found who, for a consideration, a commission, or premium, will
guarantee that the securities or some part of them shall be taken
by the public before a certain date, and will agree to take any
that may not be subscribed by the public before that time. Such
an agreement is called an underwriting agreement.
345
§ 418 UNDERWRITING [ChAP. VII
§ 418. Advantages of Underwriting to Persons interested in
the Company. — Frequently, underwriting is done by a banker
or finance company ' not previously interested in the promotion
of the new enterprise. In such cases, in consideration of the pay-
ment of a premium, or of a promise to pay a commission on, or
a comparatively small proportion of, the price obtained by the
company for any of the securities taken by the public, the pro-
moters are assured that their undertaking will not perish for
want of the funds calculated to be necessary for its initiation.
In addition to this, the underwriters, who are necessarily men of
large means, and are usually financiers of ability and repute, are
thereby interested in the success of the undertaking. It is often
no small advantage to the promoters to be able merely to point
to men of that class as associated with the enterprise. Their
very names may inspire confidence. Then also, to enlist on the
side of the infant corporation the sympathies and advice and
assistance of men of skill and experience in financial affairs is
often a very real benefit. All these circumstances combine to
justify the promoters and the corporation, as a matter of practi-
cal business, — the legality of the course will be considered
below, — in paying large sums to the underwriters.
§ 419. Definition of Underwriting as applied to Shares,
BondSj etc. — Underwriting agreements may take a variety of
forms; but before considering the several kinds of underwriting
contracts, it is proper to examine the authorities which define
what underwriting is. An underwriting agreement, in the law of
corporations, may be defined as an agreement to take such part
of a specified number of shares, bonds, or other securities as may
not be subscribed for by the public before a specified date.* An
' As to the power of a trust com- ber mentioned in the agreement,
pany to act as underwriter, see the underwriter will, for an agreed
Gause v. Commonwealth Trust Co., commission, take an allotment of
106 N. Y. Supp. 288, 291 (a decision such part of the shares as the pub-
which tends to deny the existence Uc has not applied for." 42 Ch.
of the power). D. 6. See also London Paris Finan-
' Ex parte Audain, 42 Ch. D. 1. cial, etc. Corp., 13 Times L. R. 569.
Said Cotton, L. J.: "An 'imder- Said Lindley, L. J. : "To underwrite
writing' agreement means an agree- as applied to shares means to take
ment entered into before the shares and pay for them if the public
are brought before the public, that do not." 13 Times L. R. 570. Said
in the event of the public not taking Ludlow, L. J. ; " To underwrite
up the whole of them, or the num- means to take and pay for shares
346
§ 416-§ 446] PARTIES TO UNDERWHITING § 421
agreement underwriting shares must be distinguished from an
agreement to "place " a certain number of shares or to guarantee
that a certain number of shares will be taken by the public. A
person who underwrites shares becomes bound himself to take
the shares if the public do not; and the company may accord-
ingly in that contingency place his name upon the list of share-
holders and hold him as a shareholder.' But a mere guarantee
that shares shall be taken by the public subjects the guarantor
to no such liability.^ The only claim against him is for breach
of an ordinary contract which is not governed by the peculiar
principles applicable to agreements to take shares; for ex-
ample, the guarantor may raise the defence of fraud in cases
where that defence would not be open to a subscriber to
shares.*
§ 420-§ 422. Parties to Underwriting Agreements.
§ 420. Agreements between the Underwriter and the Com-
pany. — An underwriting agreement is a contract, and like
other contracts it must be between definite parties. When the
underwriting takes place after the incorporation of the com-
pany, the agreement may be made between the company of
the one part and the underwriter of the other. This is a simple
method, and accomplishes the desired result in that the corpo-
ration, being a party to the agreement, has the legal right to
enforce it.
§ 421. Agreements of trnderwriters Inter Sese and with Trustee
for Corporation or projected Corporation. — This simple scheme
is not feasible where, as is usually the case when a new enter-
prise is launched, the underwriting takes place prior to incor-
poration. Under those circumstances, in the United States,
a practice is for the underwriters to sign a contract in which
they purport to agree, each for himself, with a trustee for the
proposed corporation, and to and with each other. The legal
effect of such a contract is involved in some obscurity. The
if other persons do npt, and other ' Gorrissen's Case, 8 Ch. 507.
persons prima facie means the pub- " Gorrissen's Case, 8 Ch. 507,
lie." 13 Times L. R. 571. 516. As to how far this defence of
' Ex parte Audain, 42 Ch. D. 1. fraud is available to an underwriter,
Cf. Re Hooley (1899), 2 Q. B. 679. see infra, § 438 and § 441.
347
§ 422 UNDERWRITING [ChAP. VII
matter has never been judicially determined in this country.^
Undoubtedly, the courts would strive to uphold the agreement,,
and to carry it out according to the intention of its f ramers ; and
this endeavor would be facilitated by the somewhat loose doc-
trines which have been established in many states as to the right
of a stranger to a contract to enforce pierformance. Nevertheless,
the lawyers who conduct such enterprises should recognize that
the enforceability of many American underwriting agreements
according to their tenor is by no means as free from techni-
cal legal objections as could be desired in the case of in-
struments involving, sometimes, many millions of dollars. The
corporation, not being in existence, cannot be bound by the
agreement^ and might have difficulty in taking advantage
thereof.^ Probably, some way would be found to surmount
these and all other difficulties, but the element of uncertainty
cannot be said to be wholly lacking. In one case where an un-
derwriting agreement was made between a company described
as "syndicate managers" and the several underwriters, a pro-
vision in the agreement whereby the several underwriters agreed
to guarantee the payment of a loan to be made by a trust
company to the " syndicate managers " was enforced at the suit
of the trust company which made the loan.*
§ 422. Device for enabling Company to take Advantage of
Underwriting Agreement to which it is not Party. — In Eng-
land, where the rule is strictly adhered to that a contract
cannot be enforced by a stranger thereto, these difficulties ad-
verted to in the last paragraph would be far more formidable.
Accordingly, an expedient has been devised which may be worthy
of imitation by American lawyers. The underwriting agree-
ment is made between the underwriter and the leading promoter
of the intended company, generally taking the form of a printed
letter addressed by the underwriter to the promoter and by him
accepted at the foot or end thereof by signing a printed accept-
ance.' By the agreement the underwriter constitutes and
' Compare, however, Electric " For form of such an under-
Welding Co. v. Prince (Mass.), 81 writing letter and acceptance, see
N. E. 306, 311. Hamilton's Manual of Company
" Supra, § 323 et seq. Law, 2d ed., pp. 75 et seq. ; Palmer's
» Supra, § 350. Company Precedents, Qth ed., 241
* Knickerbocker Trust Co. v. et seq.
Davis, 143 Fed. 587.
348
I 416-§ 446] ' KINDS OF UNDEKWBITING § 423
appoints the vendor or promoter his attorney to apply for and
accept, on his behalf, the shares or bonds underwritten, in case
the contingency arises in which by the terniis of the agreement
he is bound to take them. By means of this power of attorney,
as we shall presently see, the person designated as attorney is
able at any time to apply for and accept on behalf of the under-
writer the securities which the latter may become bound to
take. The company although not a party to the underwriting
agreement is enabled, with the co-operation of the attorney,
to secure for itself the same rights as if it had been a party.
Moreover, any necessity for a suit for specific performance of
the agreement is obviated : the attorney simply performs it on
behalf of the underwriter.
§ 423. Other and Miscellaneous Kinds of Underwriting Agree-
ments. — Still other forms of real or so-called underwriting
agreements are sometimes encountered. Sometimes the so-
called underwriter subscribes absolutely for the securities in
question, with the idea that he himself will "unload" them on
the public as best he may. Obviously, such an agreement is not
properly a contract of underwriting or insurance, and does not
differ, legally, from any other subscription to bonds or shares.
A recent Connecticut case discloses a still different form of
"underwriting." There, each "underwriter" signed a so-
called " underwriter's certificate " whereby he promised to pay a
certain sum of money to a payee named therein or his order, upon
delivery of a certain amount of stock and bonds of a certain cor-
poration.' In the case referred to, the court held that no tender
of the stock and bonds had been proved suflScient to hold the
"underwriter." Obviously, such an agreement is not under-
writing in any proper sense of the word. Indeed, as such an in-
strument is certainly not a negotiable note, its enforcement would
be Ukely to encounter many obstacles, some of which will readily
occur to. any lawyer.
* lAtchfidd Sav. Soc. v. Dibble (Conn.), 67 Atl. 476.
349
§ 424 UNDERWRITING ' [ChAP. VII
§ 424-§ 426. Acceptance of Offer to TJnderimiie Securities.
§ 424. Necessity for Acceptance. — An offer to underwrite
shares, bonds, or other securities, like any other offer, should reg-
ularly be accepted by the other party to the intended contract
before the offerer becomes bound. When the underwriting
agreement is made prior to incorporation in the somewhat an-
omalous form which is not uncommon in America and which has
already been described,' considerable difficulty might be experi-
enced in determining who constitutes the other party to the
proposed contract by whom the underwriting offers should be
accepted. In practice, each underwriter signs a certain printed
form which contains a clause stating that the agreement shall be
binding as soon as a certain proportion of the securities shall
be underwritten; and no further acceptance is contemplated.
Whether or not this intention that the agreement shall thence-
forward be binding will be effectuated by the law is a question
to which reference has already been made.^ But wherever the
underwriting agreement is not in this anomalous shape, but
where an offer to underwrite securities is made to a corporation
or to some vendor or promoter, the offer will not be binding until
it is accepted by the corporation or other person to whom it is
addressed.^ This is true although the offer may purport to be
a contract, using terms such as "agree," "engagement," etc.,
which are properly applicable to a completed contract rather
than a mere open offer.* This circumstance accentuates the
' Supra, § 421. rather than to the company, but that
^ Supra, § 421. Cf. Electric WM- having been made at the offeree's so-
ing Co. V. Prince (Mass)., 81 N. E. hcitation, it was then and there im-
306, 311, where the court distin- pUedly accepted by the person to
guished an agreement of under- whom it was addressed,
writing made with the corporation ' Gutta Percha Corp., 15 Times
itself from an agreement made with L. R. 183; Ex parte Stark (1897),
a person who had himself under- 1 Ch. 575.
written the shares — a contract of But see Ex parte Harrison, 69
reinsurance — and held that the L. T. 204 (as to which case, see ex-
latter form of agreement, being en- planation of Smith, L. J., in Ex parte
tered into by the reinsurers at the Stark (1897), 1 Ch. 575, 596-597).
solicitation of the first underwriter, Cf. North Charterland Explora-
required no further acceptance to tion Co. v. Riordan, 13 Times L. R.
make it binding. It is submitted 80 (where a written offer was ac-
that the crucial point was not that cepted orally).
the proposition of the reinsurers * Hindley's Case(\89&), 2 Ch.l21,
was made to the first underwriter 129, 133 (headnote inadequate).
350
§ 416-§ 446] ACCEPTANCE § 426
doubt whether an American underwriting " agreement " would
not be held to be a mere offer until accepted by some one to
whom the underwriter could look for his compensation or
commission.
§ 425. What amounts to Acceptance. — The acceptance
may be oral although the offer be in writing, and may be implied
from conduct. Thus, where the underwriter handed his propo-
sition in writing to the secretary of the company to whom it was
addressed, the court inferred an acceptance by the secretary from
his mere receipt of the paper without objection and placing it on
the list of underwriting offers.^
§ 426. Time of Acceptance. — The acceptance of an under-
writing offer must be' made and communicated to the under-
writer within the time, if any, limited and specified for that
purpose in the offer ; and if no time be expressed, then within a
reasonable time. Inasmuch as the underwriter's obligation is to
subscribe for such of the shares, bonds, or other securities under-
written as may not be taken up by the public before a certain
named date, and therefore partakes of the nature of a wager
upon the amount which the public will subscribe, fairness to the
underwriter requires that his offer should be accepted before
that date. The company should not be permitted to lie by until
the offer to the pubUc has proved a failure, and then accept the
underwriter's proposition. No one would say that- an offer to
insure a building against fire for the period of a year could be
accepted after the year has elapsed and after the building has
burned down ; and the principle is similar in the case of an offer
to insure the public subscription of corporate securities. Hence,
a proposition to underwrite shares, bonds, or other securities
must in general be accepted by the opposite party before the
close of the time within which the securities are to be offered to
the public.^ Still, this rule is not invariable; for while under-
Writing agreements do have some elements of wagers, yet they
are not mere bets.' At any rate, if the offer to underwrite by its
' North Charterland Exploration (Mass.), 81 N. E. 306 (explained
Co. V. Riordan, 13 Times L. R. 80 supra, p. 350 n. 2).
and 281. = Ex parte Stark (1897), 1 Ch.
Cf. Bultfontein Sun Diamond 575. But see Dadson's Case, 12
Mine, 12 Times L. R. 461, 462 Times L. R. 482.
(affirmed in 13 Times L. R. 156) ; = Ex parte Stark (1897), 1 Ch.
Electric Welding Co. v. Prince 575, 592.
351
§ 427 UNDERWRITING [ChAP. VII
terms is to remain open for a certain length of time, it may be
accepted at any time within that period even after the securities
have been offered to the pubUc.^
§ 427-§ 430. The Consideration for Undervmting.
§ 427. Nature of the Consideration. — The consideration for
underwriting may, in theory, be any consideration sufficient to
support an assumpsit.^ In England, the consideration is usu-
ally the promise of the company, or of the promoter with whom
the underwriting agreement is made, to pay to the underwriter a
premium in the shape of a commission at a certain rate per cent
on the par value of the shares or securities underwritten, this com-
mission being payable whether the shares or securities be taken
by the public or whether the underwriter is compelled to take
them.^ Sometimes, a person who is interested as a shareholder in
the company will agree to transfer to the underwriters some of
his shares as a consideration or bonus for acting as underwriter.*
In the United States, another method of compensating the under-
writer is frequently adopted. A price will be named at which
the securities will be offered to the public, and a lower price at
which the underwriter is to take them in case they are not
subscribed by the pubHc : the underwriter is to receive as his
compensation or commission the difference between such under-
writing price of any of the securities that may be subscribed by
the public and the price paid by the public subscribers. In this
way, the underwriter's compensation is contingent.* If none of
the securities underwritten are taken by the public, the under-
writer will receive nothing; and the more securities the public
'■ Hindley's Case (1896), 2 Ch. * Cf. Eastern Tvbe Co. v. Harri-
121. son, 140 Fed. 519.
' Cf . London Paris Financial, etc. ° Cf. Philadelphia Construction
Corp., 13 Times L. R. 569 (where Co. v. Cramp, 138 Fed. 999 (where
the consideration consisted in an the court construing an under-
option given to the underwriter of writing agreement, held that a cash
subscribing at par for the shares commission was to be paid to the
before they should be offered to the underwriters only in case the bonds
public). See 13 Times L.R. 570-571. underwritten should be taken by
' Cf. Booth V. New Afrikander the public, while a "bonus" in the
Gold Mining Co. (1903), 1 Ch. 235 shape of full-paid shares was to go
(as to the meaning of a provision to the underwriters in any event);
authorizing payment of compensa- Knickerbocker Trust Co. v. Davis,
tion to underwriters "at a rate not 143 Fed. 587.
exceeding 50 per cent.").
352
§ 416- § 446] CONSIDERATION § 429
subscribe for, the greater will be the underwriter's profit. The
advantage, from the company's point of view, of a contingent
compensation of that sort is very doubtful. It complicates the
matter, and enables the underwriters in case the flotation of the
company is successful to reap profits so enormous as to consti-
tute almost a scandal.
§ 428. By whom the Consideration is paid — In general. —
Por most purposes, it is immaterial by whom the underwriter's
compensation is paid, whether by the company or some vendor
or other promoter.' If the American scheme of compensation
■mentioned in the last paragraph be adopted, the burden of pay-
ing the under^vriter falls on the corporation. The benefits de-
rived by the company from the underwriting of its shares, bonds,
or other securities have been already mentioned,^ and are so ob-
vious that no practical business man would doubt the propriety
of drawing a reasonable sum from the company's treasury for
the purpose of securing them.
§ 429. Legality of Payment by Company. — No legal ob-
jection has ever been raised to payment by a corporation for
underwriting its bonds, debentures, or other similar securities.
But in the case of underwriting of shares, the contention has been
made in England that for the company to pay any compensa-
tion to the underwriter would be, in effect, an issue of shares at a
discount equal to the amount of such commission. A corpora-
tion, it is said, has no right to pay a person for subscribing to its
shares. In one case, this contention prevailed ; ^ but at least one
other decision is inconsistent therewith.^ It is submitted that
the doctrine of the latter case is preferable. Very large propor-
tions of the expenses of promotion are incurred for the purpose
of inducing subscriptions to the company's shares. This is the
object for which prospectuses are printed and advertisements
circulated ; yet who has ever questioned the right of a corpora-
tion to incur expenses for prospectuses and advertisements?
Moreover, it is settled that a corporation may pay a commission
' Milwaukee Cold Storage Co. v. ' Supra, § 418.
Dexter, 99 Wise. 214 ; 70 N. W. 976 ; ' Lydney Iron Co. v. Bird, 33 Ch.
40 L. R. A. 837 (where payment by D. 85.
a promoter of a sum of money to a * Ex parte Audain, 42 Ch. D. 1.
capitalist for underwriting shares Cf. Ex parte Stark (1897), 1 Ch. 575,
was held to be no evidence of fraud 598.
on the promoter's part).
VOL. I. — 23 353
§ 430 UNDERWRITING [ChAP. VII
to a broker for placing its shares.' If such expenses are legiti-
mate, would it not be sticking in the bark to object to payments
bo7ia fide made for underwriting the company's shares? Even
where the underwriter is paid in the first instance by a vendor
or other promoter, the expense must ultimately be made up or
recouped out of the corporation.^ It is unreasonable to object
to the payment being made by the corporation directly instead
of indirectly. Underwriting agreements are not mere devices to
enable shares to be issued at a discount. If they were, a different
result would be reached. Underwriting is becoming almost as
much a normal part of the promotion of a corporation as the
publication of a prospectus. The application of the company's
funds to that purpose ought to be legitimate; and there is no
doubt that it would be so held in America. And in England,
Parliament stepped in and resolved all doubts by a statute which
establishes the legitimacy of reasonable bmia fide payments by a
corporation for underwriting its own shares,^ although some-
what stringent conditions and restrictions are imposed to guard
against an abuse of the privilege.*
§ 430. Actions or Suits by TTnderwriter to recover his Com-
pensation. — Where the underwriter's commission is to be paid
by a promoter, Avith whom the underwriting agreement is made,
the underwriter may recover his commission even though the
agreement contemplated that he should make application to the
company for allotment of the shares underwritten, and though
no such application has in fact been made : ° the underwriter's
breach of such a stipulation is at most ground for a cross action
against him.
If the underwriting agreement contemplates a violation of law
— for example, an infringement of a statute forbidding property
' Metropolitan Coal, etc. Ass'n v. 575, 598. Cf. Milwaukee Cold Stor-
Scrimgeour (1895), 2 Q-B. 604 {over- age Co. v. Dexter, 99 Wise. 214;
ruling Faure Electric Co., 40 Ch. D. 74 N. W. 976; 40 L. R. A. 837.
141) ; Bass V. Sayler, 104 111. App. ' Companies Act, 1900 (62 & 63
19 ; Bauersmith v. Extreme Gold, Vict., c. 20), § 8.
etc. Co., 146 Fed. 95 (where the com- * See Hilder v. Dexter (1902),
pany raised no objection on this A. C. 474 ; Burrows v. Matabele, etc.
score to the recovery by the broker). Co. (1901), 2 Ch. 23 ; Booth v. New
Cf. Keatinge v. Paringa Consoli- Afrikander Gold Mining Co. (1903),
dated Mines (1902), W. N. 15 (where 1 Ch. 295.
a commission of ninety per cent was » Sangster v. Netter, 9 Times L. R.
held illegal). 441.
> Ex parte Stark (1897), 1 Ch.
354
§ 416-§ 446] OFFER TO THE PUBLIC § 432
or labor to be received in payment for stock at less than its actual
value — the whole contract may be tainted with illegality, so
as to prevent the underwriter from maintaining an action for his
agreed compensation or commission.'
§ 431-§ 433. The Ojfer of the Securities underwritten to the
Public for Subscription.
§ 431. Necessity for OfEer of the Securities to the Public. —
We have seen above that every underwriting agreement neces-
sarily contemplates that the securities underwritten shall be
offered to the public for subscription. Indeed, a contract to
underwrite securities, simpliciter, implies that the shares must
first be offered to the public ; and hence the underwriter's obli-
gation to take the shares does not arise unless they are first put
on the market for public subscription, even though the circum-
stances were such that an offer of the shares to the public would
necessarily have been futile.^ It would seem that an offer of
securities to some limited class of persons — for example, the
shareholders in some existing company — cannot be deemed an
offer of the securities to the public' The necessity for an offer
to the public is not obviated by the fact that the underwritten
shares were offered pro rata to the existing shareholders of the
company.*
§ 432. Time for OfEer to the Public. — It would seem clear
that the offer to the public must take place strictly within the
time limited for it in the underwriting agreement, or if no time
be expressed then within a reasonable time ; or else the under-
writer will be discharged. The underwriter may be willing to
assume the risk of a panic or " slump " in the market for a short
but not for an indefinitely long period ; and therefore time is of
the essence of the agreement. Thus, where the underwriter con-
tracted on the faith of a prospectus which stated, " Lists of appli-
cations will open on the — day of 1890, and will close on or
before the — day of 1890," the Massachusetts Supreme Court
' Cf. Altenberg v. Grant, 85 Fed. ' Booth v. New Afrikander Gold
345 ; 29 C. C. A. 185. Mining Co. (1903), 1 Ch. 295.
* London Paris Financial, etc. * London Paris Financial, etc.
Corp., 13 Times L. R. 569 ; Paul Corp., 13 Times L. R. 669 (headnote
Boyer, Ltd. v. Edwardes, 17 Times inadequate).
L. R. 16 (headnote inadequate).
355
§ 433 UNDERWRITING [ChAP. VII
thought that the underwriter would be discharged unless the
shares were offered to the public within the year 1890, or at any
rate within a reasonable time, and that fifteen months was more
than a reasonable time.' The court also thought that the exist-
ence of a panicky market which rendered impossible the success-
ful flotation of a new company at that time would not excuse a
postponement of an offer to the public.^ In the same case, how-
ever, the court concluded (although they did not find it necessary
to decide the point) that if the underwriter after the expiration of
the time for offering the shares to the public treated his contract
as still binding by acquiescing in the retention of deposits which
he had made, he thereby waived the defence.^
§ 433. What is such a Taking by Public as will discharge
the Underwriter. — In determining how many of the shares
underwritten have been subscribed by the public so as to as-
certain the extent of the underwriter's obligation, any shares
which the underwriter may himself have subscribed "firm" —
i. e., unconditionally and independently of the underwriting
agreement — are to be reckoned as subscribed by the public*
§ 434^§ 435. Conditions in Underwriting Agreements.
§ 434. Implied Conditions. — The courts will not read into
the contract conditions which are not part of the very meaning
of the term, underwrite, as used in this connection. Hence,
where a corporation is projected for the purpose of acquiring a
lease of certain land, a person who underwrites its shares is not
discharged from the obhgation to take them because the nego-
tiation for the acquisition of that property falls through.^ So,
an underwriter who underwrites a certain number of bonds is
not discharged because the total number of bonds proposed to be
issued is never underwritten."
' Electric Welding Co. v. Prince v. Grey, 14 Times L. R. 373 (affirm-
(Mass.), 81 N. E. 306, 309 (semble). ing 13 Times L. R. 564).
' Electric Welding Co. v. Prince Cf. Pavl Boyer, Ltd. v. Edwardes,
(Mass.), 81 N. E. 306, 309 (sem- 17 Times L. R. 16.
ble). ^ Crown Lease Proprietary Co.,
' Electric Welding Co. v. Prince 14 Times L. R. 47.
(Mass.), 81 N. E. 306, 309. » Knickerbocker Trust Co. v.
* Sydney Harbour Collieries Co. Davis, 143 Fed. 587.
366
§ 416-§ 446] DISCHARGE OF UNDERWRITER § 436
§ 435. Express condition that a certain Number of the Secu-
rities be Underwritten. — Underwriting agreements usually fix
a certain number of securities which must be underwritten be-
fore the several underwriters can be bound. Where this is the
case, a third person who is party to the underwriting agreement
and who thereby agrees to deliver stock as a bonus to the under-
writers is not debarred from acting as underwriter by reason of
the rule that no man can be both obligor and obligee ; but, his
agreement for delivery of the stock being regarded as severable,
securities underwritten by that person may be counted in deter-
mining whether the required minimum has been underwritten
so as to make the agreement binding on the other underwriters.'
§ 436. Discharge of Underwriter by Alteration of Risk. —
Inasmuch as an underwriting agreement is a contract of insur-
ance, the underwriter will be discharged if without his consent
any alteration is made in the risk. For example, if the amount
of the securities to be offered to the public be changed, the under-
Tvriter's risk is altered, and he should be discharged. This is
very clear where the amount of the securities offered to the public
is increased. For the underwriter may have been willing to guar-
antee that the public would take a small number of shares or
bonds, and yet be unwilling to guarantee that a larger number
could be "floated." Where the number of the securities offered
to the public is diminished, the case is not quite so clear, for it
may be argued that the public is more likely to take all of a small
than a large number of securities, so that the underwriter's risk
is rather diminished _than increased. Nevertheless, the under-
writer should be discharged by the change. For he may have
thought that if the company is launched as a great enterprise by
an offer of a large number of the securities for public subscrip-
tion, the public would be more likely to take them all than if a
smaller number had been offered — a number so small as, per-
haps, to attract no attention from financiers, or a number in-
sufficient (in the judgment of some possible investors) to furnish
the capital necessary to make the company a success. At all
events, the diminution has produced a change in the under-
' Eastern Tube Co. v. Harrison, 140 Fed. 619 (headnote inadequate).
357
§ 437 UNDERWRITING ' [ChAP. VII
writer's risk without his consent, and as an insurer he should
accordingly be discharged without pailsing to inquire whether
the change is prejudicial to him. Thus, where the underwriting
agreement provides that each underwriter, who underwrites, say,
fifty shares out of, say, a thousand to be offered to the public,
shall only be called upon to take his proportion fro rata with the
other underwriters, a reduction in the number of shares offered
to the public will, it has been held, discharge the underwriter.'
It was pointed out by the court that before the change the maxi-
mum proportion which each underwriter could possibly be
called upon to take was five hundredths of the number of shares
to be offered to the public, whereas if only five hundred shares
should be offered to the public, each underwi"iter might be called
^ipon to take as much as ten hundredths of the number offered
for public subscription. In this particular case, the most sub-
stantial grievance was manifestly the change in the number of
shares underwritten or in the number of underwriters rather
than in the number of shares offered to the public. But as al-
ready stated, even if the only change had been in the number of
shares offered to the public, it is submitted that the result should
have been the same.
§ 437. Right of Underwriter of Bonds to overdue Coupons.
— Where bonds are underwritten, it seems that the underwriter
is entitled to any coupons which may mature after the execution
of the underwriting agreement, but before he is called upon to
take or pay for the bonds.^
§ 438-§. 441. How jar Underwriting Agreements are subject
to the Special Rules applicable to Subscriptions to Securities
of the Kind underwritten.
§ 438. In general. — In so far as an underwriting agreement
is a mere contract of subscription to shares or bonds, it is gov-
erned by the peculiar principles which are applicable to sub-
scriptions to such securities and which are elsewhere considered.
In other respects, underwriting agreements are in general sub-
ject to the ordinary principles of the law of contracts. This
double aspect of underwriting agreements — as ordinary con-
' Electric Welding Co. v. Prince mrr, 95 N. Y. App. Div. 6 ; 88 N. Y.
(Mass.), 81 N. E. 306, 309. Supp. 742 (stated. more fully infra,
' Hudson Valley By. Co. v. O'Corir- § 1787).
358
§ 416-§ 446] COMPARISON WITH SUBSCRIPTIONS § 440
tracts, and also as contracts of subscription — will not im-
probably lead to considerable difficulty when the matter comes
before the courts. Take, for example, the question of how far
an underwriter is entitled to repudiate his agreement on
account of misrepresentations in the prospectus. If he be re-
garded simply as a subscriber to shares, he would in respect
to this matter come under certain fairly well-established rules
of law. If he be regarded as an ordinary contractor with the
company, he would be subject to other and different rules. In
point of fact, his position ought to be somewhat different from
that of either.
§ 439.' Underwriting Agrreement binding although Conditional
— Distinguished from other Conditional Subscriptions to Shares. —
Conditional agreements to subscribe to bonds or debentures
are obnoxious to no legal objection merely because they are
conditional; and consequently, even if an underwriting agree-
ment be regarded as, strictly, a contract of conditional subscrip-
tion, a contract for the underwriting of bonds is valid. In
the case of shares of capital stock, subscriptions upon a condi-
tion precedent are not in general binding until the condition is
performed; but this rule is based upon the principle that the
conditional subscriber ought not to have the right to prevent the
company from allotting the shares to some one else while he
himself may never be bound to take them. Hence, the rule has
no application to underwriting agreements ; ' for although they
be conditional subscriptions, yet the condition is of such a pecu-
liar character that the company is at liberty to allot the shares
to anybody it pleases while at the same time the underwriter
is bound fast.
§ 440. Underwriter of Bonds not Discharged by Insolvency
of Company. — A subscriber to bonds is ordinarily entitled to
repudiate his subscription if the company becomes hopelessly
insolvent before the money is paid and the bonds are issued ; but
although an underwriter of bonds or debentures is a condi-
tional subscriber, yet his agreement is governed in this respect
by different rules from an ordinary subscription to bonds.^ The
• Burke v. Smith, 16 Wall. 390, ' Eastern Tube Co. v. Harrison,
396-397 (where the subscription was 140 Fed. 519.
in all its essential features an under-
writing agreement although not
called by that name).
359
§ 441 UNDERWRITING [ChAP. VII
underwriter is paid for guaranteeing, as it were, the solvency of
the company; and of course he cannot escape liability because
the company turns out to be unsuccessful. Indeed, if the strict
rules applicable to subscriptions to bonds were applied, the
underwriter would not be liable for more than nominal damages
even if the company is solvent.'
§ 441. Right of Underwriter to rescind underwriting Agree-
ment for Fraud or Misrepresentation. — If the underwriter signs
the underwriting agreement in reliance upon a fraudulent
prospectus, he is undoubtedly entitled to avoid the contract;
although, as pointed out above, it may be doubted whether an
underwriter of shares is necessarily subject to all the strict rules,
requiring great diligence in discovering the fraud and repudiating
the contract, that are applicable to ordinary subscribers to
shares. This right of the underwriter to repudiate the agree-
ment on the ground of fraud is not tolled because the under-
writing agreement provides that it shall continue binding
notwithstanding any variation between the proof prospectus as
exhibited to the underwriter and the prospectus issued to the
general public.^
It must be borne in mind that an underwriter is influenced by
different considerations from those which would affect an in-
vestor, and that this fact may be material in determining whether
the underwriter did rely upon misrepresentations in the pro-
spectus. As was said by Farwell, J., in a recent EngUsh case,
"The considerations which affect the careful man disposed to
invest in an undertaking are very different from those that affect
the underwriter, who, when he underwrote, thought that the
public were going to take the thing up, and he would get his
20 per cent, without being liable to take any shares at all. . . .
The investor wants a sound concern ; the underwriter wants an
attractive prospectus. ■ I do not say that the underwriter sup-
poses or desires that there should be any misstatement or con-
cealment, but it is obvious that his interest is that the public be
induced to subscribe." ' A representation by one of the nominal
underwriters that he is really risking his money by signing the
agreement is very material, and any other person who signs the
' Infra, § 1720. ' Baty v. Keswick, 85 L. T., n. s.,
^ Dadson's Case, 12 Times L. R. 18, 20, per Farwell, J.
482.
360
§ 416-§ 446] ENFORCEMENT § 442
agreement as an underwriter in reliance on that representation
has good cause for complaint if the fact be that the first under-
writer is really the substantial owner of all the securities under-
written, and has got up the underwriting plan for the purpose of
"unloading " some of them.'
It has been held that a person who is induced to become an
underwriter by the fraudulent misrepresentations, not of the cor-
poration but of a fellow-underwriter who being already largely
interested in the securities to be underwritten had organized the
underwriting scheme for his own benefit, may, on discovering
the fraud, carry out his underwriting contract so far as the corpo-
ration is concerned, by accepting and paying for the securities
underwritten, and may then maintain a suit against the fraudu-
lent co-underwriter, without making the corporation a party, for
a rescission of the agreement — that is to say, upon handing
over to the co-underwriter the securities which he (plaintiff) had
taken, he may recover from the co-underwriter the amount he
had paid the company for them.^ Nobody would doubt that in
such a case the plaintiff might have an action of deceit against
the co-underwriter to recover the difference between the price
paid for the securities and their actual value ; but the relief which
was actually granted can only be sustained upon the theory that
the corporation should be regarded as a mere alias for the co-
underwriter, and even upon that theory it is difficult to under-
stand why the acceptance of the securities after discovery of the
fraud should not bar the right to rescission. The court seems
to have regarded the corporation for some purposes as a mere
alias for the fraudulent co-underwriter, but for other purposes
as an independent entity — a not altogether consistent position.
§ 442-§ 445. ENFORCEMENT OF UNDERWRITER'S AGREEMENT.
§ 442. Enforcement by Company directly. — If the company
be a party to the underwriting agreement, it may doubtless
pursue the same remedies against the underwriter, in case he
becomes bound to take any of the securities underwritten, as
would have been available against an ordinary subscriber. In
the case of underwriters of shares, these remedies are ample.
' Rose V. Merchants' Trust Co., ' Rose v. Merchants' Trust Co.,
96 N. Y. Supp. 946. 96 N. Y. Supp. 946.
361
§ 443 UNDERWRITING [ChAP. VII
Thus, a binding underwriting agreement to which the com-
pany is a party entitles the company to put the underwriter's
name upon its register of members in respect of any shares which
by the terms of the agreement he may be bound to take.* The
same thing is true where the underwriter's promise is "to under-
write or procure to be underwritten to the satisfaction of the
directors": the original underwriter remains liable, in such a
case, except in so far as approved substitutes may have been
procured.^ Where bonds are underwritten, the company's
remedies are not so satisfactory; for it seems that equity will
not specifically enforce a subscription to bonds or debentures
against the subscriber,^ while at law only nominal damages
can in general be recovered.*
§ 443-§ 445. Enforcement by means of Power of Attorney to
accept on behalf of Underivriter the Securities underwritten.
§ 443. Whether Power of Attorney is Revocable. — We have
seen above, that in England, for the purpose of enabling the com-
pany to enforce an underwriting agreement to which it is not a
party, the expedient has been devised of taKng from the under-
writer a power of attorney whereby he constitutes and appoints
the vendor or promoter his attorney to apply for and accept, on
his behalf, the shares or bonds underwritten, in case the contin-
gency arises in which by the terms of the agreement he is bound
to take them. This power of attorney, being given for a valuable
consideration, and the donee being interested in the flotation
of the company, is deemed to be "coupled with an interest,"
and has been accordingly held to be irrevocable by the under-
writer from the time of the underwriting agreement.* To be
sure, in a very recent Massachusetts case relating to an agree-
ment to underwrite shares in an English company, Loring, J.,
said that the power of attorney "could be revoked by the under-
writer, although to revoke it would expose the underwriter to
> Ex parte Audain, 42 Ch. D. 1. ' Infra, § 1720.
See also supra, § 419. * Infra, § 1720.
' London Paris Financial, etc. ' Carmichael's Case (1896), 2 Ch.
Corp., 13 Tinifs L. R. 569, 570 643. Cf. Ex parte Stark (1897), 1
(semble). Ch. 676, 686, 688.
Cf. Globe Blocks Gold Mining Co.,
12 Times L. R. 92.
362
§ 416-§ 446] ENFORCEMENT § 444
action for. damages for breach of contract," ' but this remark
was unnecessary to the decision of the case before the court and
ought not, it is submitted, even in Massachusetts, to be deemed
binding authority in opposition to the English decisions. In-
deed, if such a power of attorney is revocable, its efficacy is
destroyed.
§ 444. Conditions of Exercise of Power. — The limits and
conditions of the authority of the promoter as such agent or
attorney for the underwriter must be strictly fulfilled. For ex-
ample, if the underwriter agrees to subscribe for the shares
underwritten if and when called upon to do so, and constitutes
the promoter with whom the agreement is made his agent to
apply in his name for any shares which he may thus be bound
to take, he is not liable upon shares which are allotted in pur-
suance of an application made by the promoter unless he (the
underwriter) was first called upon to subscribe.^ So if the under-
writer agrees to subscribe or find subscribers for certain shares
before a certain date, and, in the event of his failure to comply
with the terms of the agreement authorizes the promoter with
whom it is made to apply for the shares as his agent, the pro-
moter's authority does not arise unless the underwriter be first
given an opportunity to subscribe and fails to avail of it.' Where
the underwriting agreement', contemplates that the underwriter
will accompany it with a written application for the shares under-
written, and confers a power of attorney to apply for the shares
in case that application is withdrawn, an English judge held
that if no application for shares did in fact accompany the under-
writing agreement and if none was in fact executed by the under-
writer, such failure was equivalent to a withdrawal within the
meaning of the underwriting agreement, and that the attorney
was therefore authorized to apply for the shares in the under-
' Electric Welding Co. v. Prince find subscribers for such of a number
(Mass.), 81 N. E. 306, 310. of shares as are not taken by the
" Ormerod's Case (1894), 2 Ch. public, the attorney may apply for
474 ; Brussels Palace of Varieties v. the shares without first notifying
Prockter, 10 Times L. R. 72; Elec- the underwriter of the number of
trie Welding Co. v. Prince (Mass.), shares he has become bound to take
81 N. E. 306. or find subscribers for).
But cf. Shaw V. BenUey & Co., » Ex parte Stark (1897), 1 Ch.
68 L. T. 812 (holding that where 575, 592, 601 ; BiUtfontein Sun X>io-
Tinderwriter agrees to subscribe or mond Mines, 13 Times L. R 156.
3G3
§ 444 UNDEEWEITING [ChAP. VII
writer's name.' If the underwriter authorizes the agent to " hand
my application for shares to the company as my agent," the
agent is not authorized to sign an appHcation on the under-
writer's behalf.^ Moreover, if the underwriter agrees to sub-
scribe or find subscribers for a certain number of shares and
authorizes the agent to apply for "the said shares" on his behalf,
the agent has no power to apply for any less number, although
some of the shares may have been taken by the public'
In general, the apparent authority of the agent does not ex-
ceed his actual authority, and hence the underwriter cannot be
estopped from showing that the conditions upon which the agent's
authority to act for him were to arise had not occurred, or from
denying that any contract was ever consummated because
although his offer to underwrite had apparently been accepted
yet the acceptance had not been communicated to him in due
time.* If, however, the authority contained in the underwrit-
ing letter be subject to secret conditions in a separate paper
which is not shown to the company, the underwriter will be
estopped from setting up non-performance of the secret condi- '
tions if the company has allotted the shares in reliance upon
the agent's ostensible authority as conferred by the underwrit-
ing letter.'
Moreover, if the attorney exceeds his authority ratification
by the underwriter may sometimes be shown. When the under-
writer receives notice that shares have been allotted to him upon
the application of the attorney in excess of his authority, the
underwriter must repudiate the shares promptly if he desire to
escape liability : " his position is not that of a person to whom
shares have been allotted without any prior application on his
part and who, as explained above,' cannot be made a share-
holder by mere inaction, but rather that of a principal whose
agent has exceeded his authority and who, after learning of the
excess of authority or after he might have learned of it by the
' Globe Blocks Gold Mining Co., 575. Cf. Gutta Percha Corp., 15
12 Times L. R. 92. Times L. R. 183.
^ Holophane v. Hesseltine, 13 ° Ex parte Harrison, 69 L. T. 204
Times L. R. 7. (explained in Ex parte Stark (1897),
' Holophane v. Hesseltine, 13 1 Ch. 575).
Times L. R. 7 (per Lord Esher, " Electric Welding Co. v. Prince
M. R.). (Mass.), 81 N. E. 306.
• Ex parte Stark (1897), 1 Ch. ' Supra, § 194.
364
§ 416-§ 446] ASSIGNMENTS § 446
exercise of due diligence, must take afiirmative steps to repudiate
his agent's action or be held to have tacitly ratified and acqui-
esced in it.
§ 445. Advantages of taking a Power of Attorney from Under-
■writer. — This expedient of taking from the underwriter an
irrevocable power of attorney to apply for and accept on his
behalf the securities whiqh under his agreement he may become
bound to take not merely enables the company to avoid any
legal obstacles to the enforcement of the contract where the
company itself is not a party, but also has additional advantage
of being an automatic arrangement for securing specific per-
formance of the underwriter's contract. In the case of under-
■writing of bonds, or debentures, this feature is particularly
valuable; for, as explained below, equity will not specifically
enforce a subscription to bonds or debentures against the sub-
scriber, while at law only nominal damages can in general be
obtained.*^ Accordingly, it is recommended that every agree-
ment for the underwriting of bonds or debentures should
contain or be accompanied by such a power of attorney.
§ 446. Assignments of Underwriting Agreements. — An un-
derwriting agreement is a contract, and it would therefore seem
that pecuniary rights arising under it may be assigned in the
same way as other choses in action, although, to be sure, where
shares are underwritten, an assignment by the corporation may
not be effective unless an assignment of uncalled capital would
be valid.^ At any rate, where a company undertakes to assign
an underwriting agreement to a bank as collateral security for
a debt, and agrees to issue to the bank certificates for the
requisite number of shares to be delivered to the under-
writers, the assignment is so far effectual that if by inadvertence
or otherwise the company fails to issue the certificates as
agreed, the bank may require it to do so, the right of the bank
to compel the underwriters to accept the certificates and make
payment according to the underwriting agreement being left
' Infra, § 1720. Cf. supra, § 440 ' See supra, § 72.
and § 442.
365
§ 446 tnsTDEEWEiTiNQ [Chap. VII
an open question.* Although an underwriting agreement is
certainly not negotiable, yet where it expressly contemplates
assignment as collateral security for loans to be made to the
company, an underwriter cannot set off against a claim by the
assignee a debt owing to the underwriter by the company:*
any such defences the underwriter should be estopped to
make. •
' Kirkpatrick v. Eastern Milling ^ Cf. Eastern Tube Co. v. Harri-
& Export Co., 137 Fed. 387; 69 sow, 140 Fed. 519.
C. C. A. 579.
366
.CHAPTER VIII
CORPORATE NAMES
Section
Necessity for a corporate name 447
Choice of corporate name 448-450
How and by whom chosen 448
Statutory restrictions upon choice 449
Name must not be fraudulent or misleading 450
Conflicting claims of right to use name chosen as corporate name . 451— i59
Nature of right to use of corporate name — when not exclusive 451
When right of corporation is exclusive 452
Remedies against improper use of names by or of corpora-
tions 453^56
Injunction against incorporation under a name to which
plaintiff has prior right 453
Injunction against use of improper corporate name after
incorporation .... . . 454
Power of courts to forestall or overrule decision of public
officer charged with duty of passing on propriety of
corporate name 455
Receipt of mail intended for other company 456
How to determine whether corporate names are unduly similar
to one another 457
Transfer to corporation of a promoter's right to carry on busi-
ness under his own name 458
Conflicting rights of domestic and foreign corporations .... 459
Misnomer of corporations 460-461
In general 460
Misnomer in pleadings 461
Inferences from corporate names 462-465
In construing incorporation paper 462
Corporate name as a brief description of company's business . . 463
Corporate name as an allegation that company is incorporated . . 464
Absence of word "limited" from name as notice that liability
of shareholders is unlimited 465
Change of corporate name 466
User of a name other than corporate name 467
Assignment of right to use corporate name 468
§ 447. Necessity for a Corporate Name. — The question has
been mooted whether a special name is essential to corporate
existence. Some authorities have said with Blackstone that when
a corporation is erected, a name must be given to it, and that such
a name is the very being of its constitution and the knot of its
367
§ 448 CORPORATE NAMES [ChAP. VIII
combination.' Even these authorities admit that if no name is
given in the charter, the corporation may assume an appropriate
name, or acquire one by usage. Others have asserted, with much
force, that stress should not be laid on the mere matter of name,
but that the essential element in corporate existence is the fact
of the union of several natural persons iiito an ideal or artificial
legal personality, and not the designation of that fact by an
appropriate name. But whatever be the correct theory, certain
it is that in practice every corporatio.i has and must have its
individual corporate name.
§ 448-§ 450. Choice of Corporate Name.
§ 448. How and by whom chosen. — In case of corpora-
tions erected by royal charter, the corporate name was given by
the king in the charter. In the case of corporations created by
special act, the name is usually given by the legislature in the
act of incorporation. On the other hand, when a corporation is
formed under a general law, the incorporation paper must state
the corporate name,^ which is chosen by the promoters.
§ 449. Statutory Restrictions upon Choice. — Restrictions as to
the choice of corporate names are often contained in general in-
corporation laws.* The English Companies Act of 1862 makes
the word "Limited" a necessary part of the corporate name of
every company the liability of whose shareholders is limited;*
and similar provisions are sometimes found in the United States.*
* 1 Black. Comm., 475. ing the word "company" or "cor-
Cf. Smith V. Tallahassee, etc. poration" an essential part of the
Plank Road Co., 30 Ala. 650, 664- name of every corporation assuming
665. the name of a person or firm held to
^ Supra, § 117. apply where a family name not con-
' As to the discretionary power joined with a Christian name is used
under the laws of some states to re- as part of the corporate title).
fuse a. "charter" to an association As to the construction of a statute
whose name is colorless and not requiring every corporation to print
distinctive, see Nether Providence the word "incorporated" under its
Ass'n, 12 Pa. Co. Ct. 666. name on all "printed or advertising
As to the discretionary power matter," see Jung Brewing Co. v.
with respect to amendments, see Commonwealth (Ky.), 96 S. W. 476;
supra, § 151. Commonwealth v. American Snuff
* Companies Act, 1862, § 14(2). Co. (Ky.), 101 S. W. 364 (holding
See also infra, § 467. that the use of the abbreviation
' Cf. State ex rel. Mallinckrodt v. "Inc." is not a compUance with the
McGrath, 75 Mo. 424 (statute mak- statute); T. J. Moss Tie Co. v.
368
447-§ 468]
CHOICE OF NAME
§449
Moreover, it is provided in England and in some of the American
states that no company shall be incorporated or registered under
a name identical with or so similar to that of a company pre-
viously formed as to be likely to deceive; ' but as will presently
be shown, all such provisions are merely declaratory of the
common law,^ except perhaps in so far as they authorize the
registrar to refuse to receive or record an incorporation paper
for a company whose name is misleading, instead of requiring
him to register the instrument, leaving the parties aggrieved to
redress by action at law or bill in equity.^ Provisions of this sort
Comnumwealth (Ky.), 105 S. W. 163
(holding that a letter to the county
attorney in reference to an assess-
ment against the company is not
' ' advertising matter " ) .
The use of the abbreviation
"Ltd." is not a compliance with a
statute requiring the word "Lim-
ited" to be written or printed after
the name of the company in all
contracts; Howell Lithographic Co.
V. Brethour, 30 Ont. R. 204. Where
the statutes make the directors in-
dividually liable upon an instru-
ment in which the name of the cor-
poration is used without the word
"limited" or the like, a drawer of a
bill of exchange may hold the
directors of the drawee individually
liable upon the acceptance notwith-
standing the fact that he himself
omitted to use the word "limited":
Penrose v. Martyr, E. B. & E. 499;
Howell Lithographic Co. v. Brethour,
30 Ont. R. 204. But it is sufficient
if the word appear in the body of
the bill without being annexed to
the acceptance: Dermatine Co. v.
Ashworth, 21 Times L. R. 510. Cf.
Nassau Steam Press v. Tyler, 70
L. T. 376 (where the directors were
held liable because although they
had used the word "limited," yet
they had not given the correct cor-
porate name in other respects);
Atkin & Co. v. Wardle, 61 L. T. 23
(same point as last case) ; Waterous
Engine Works Co. v. McLean, 2
Manitoba, 279 (where it was said
that the word "limited" although
required by statute to be used was
not in strictness part of the corpo-
rate name).
'■ Companies Act, 1862, § 20.
Cf. Philadelphia Trust, etc. Co. v.
Philadelphia Trust Co., 123 Fed.
534; Dooley v. Cheshire Glass Co.,
15 Gray 494, 496 (holding that a
violation of such a requirement does
not enable the company itself to
plead that it is not incorporated);
Glucose Sugar Refining Co. v. Ameri-
can Glucose Sugar Refining Co.
(N. J.), 56Atl. 861; Young Women's
Christian Ass'nv. St. Louis Women's
Christian Ass'n, 115 Mo. App. 228;
91 S. W. 171 (holding that the com-
pany whose corporate name is
wrongfully appropriated has no
right by virtue of the statute to ap-
pear and object to the grant of a
certificate of incorporation to the
new company).
' Cf. British Vacuum Cleaner Co.
V. New Vacuum Cleaner Co. (1907),
2 Ch. 312.
But see Aerators, Ltd. v. Tollitt
(1902), 2 Ch. 319, 322 (where it was
said, obiter, that such a statute en-
ables a company whose name is
merely a common English word to
prevent the registration of a com-
pany with a name absolutely iden-
tical).
' It would seem, however, that
the registrar may decline to receive
any paper which adopts a misleading
name even without any such express
VOL. 1.
■24
369
§ 450 CORPORATE NAMES [ChAP. VIII
do not apply to "re-incorporation" of existing organizations'
nor to changes in the name of existing companies, but leave such
cases to^be governed by the common law both in respect to
rights and remedies. Moreover, such a statutory provision does
not vitiate the incorporation of a company which is formed with
a name unduly similar to that of an existing corporation.^
§ 450. Name must not be Fraudulent or Misleading. — Even
apart from any explicit statutory prohibition, the pi'omoters of a
corporation have no right to choose a name which involves a false
statement or which is hkely to mislead the public. A company
incorporated under such a name is in one aspect not organized
for a lawful purpose. The most common application of this
principle is in cases where the corporate name is unduly similar
to the trade name of some other person or corporation.' But
occasions for other applications of the same principle sometimes
occur. For instance, the formation of a corporation under the
name of "S. G. Rowell, Dentist, Limited," is likely to lead
the public to conclude that either S. G. Rowell or the corporation
is licensed to practise dentistry, and if that representation is
false, the formation of the company under that name is illegal.*
Upon a similar principle, where an amendment is made to an
incorporation paper whereby the old name becomes misleading,
the courts sometimes insist on a change in the corporate name.*
Similarly, in a recent case, a federal judge decided that an
association whose corporate name was the Franz Joseph Bene-
ficial Association had adopted the name of the Austrian
Emperor for the purpose of inducing Austrian immigrants to
believe that the society was officially connected in some way
with the Emperor Franz Joseph, and accordingly upon a bill
filed by the Austrian consul enjoined the use of the Emperor's
name or portrait."
statutory authority. See supra, * Rex v. Registrar Joint Stock
p. 125, note 3. C(. Rex v. Registrar Companies (1904), 2 Ir. 634; Atr-
Joint Stock Companies (1904), 2 Ir. torney-General v. Appleton (1907),
634. 1 Ir. 252.
' People ex rd. U. S. Grand Cf. Attorney-General v. Myddle-
Lodge v. Payn, 161 N. Y. 229; 55 tons (1907), 1 Ir. 471.
N. E. 849. » Cf. supra, § 150.
^ Dooley v. Cheshire Glass Co., ° Von Thodorovich v. Franz
15 Gray (Mass.) 494. Joseph Benefidcd Ass'n, 164 Fad.
' Infra § 453-§ 455. 911.
370
§ 447-§ 468]
CONFLICTING CLAIMS
§451
§ 451-§ 459. CONFLICTING CLAIMS OF RIGHT TO USE NAME
CHOSEN AS CORPORATE NAME.
§ 451. Nature of Right to Use of Corporate Name — When not
Exclusive. — The mere fact of incorporation does not neces-
sarily give the company any right, still less any exclusive right in
the nature of a patent, to the use of the corporate name.' Thus,
no monopoly or exclusive right can be acquired to the use of
words of common import by inserting them in the corporate
name ^ — for example, by inserting words descriptive of a
particular kind of goods,^ or describing a particular kind of
business,* or indicating the previous unincorporated associa-
tion from which the corporators have seceded.' The right
to the use of a corporate name is not a franchise;' and the
' Imperial Mfg. Co. v. Schwartz,
105 lU. App. 525; BlackweU's Dur-
ham Tobacco Co. v. Am. Tobacco
Co. (N. Car.), 59 S. E. 123. See ako
cases cited infra, § 454.
But cf. Fort Pitt B. & L. As^n
V. Model Plan B. & L. Ass'n, 159
Pa. St. 308, 311 ; 28 Atl. 215.
' Aerators, Ltd. v. Tollitt (1902),
2 Ch. 319.
As to the use of geographical
names, see Elgin Nai. Watch Co. v.
Lovdand, 132 Fed. 41; Fort Pitt
B. & L. Ass'n V. Model Plan B. &
L. Ass'n, 159 Pa. St. 308 (where at
the suit of a corporation whose name
included a geographical name, an-
other corporation was enjoined from
using the same name under void pro-
ceedings for a change of name) ; Erie
Printing Co. v. Erie Lithographing
& Printing Co., 31 Pa. Co. Ct. 1.
^ British Vacuum Cleaner Co. v.
New Vacuum Cleaner Co. (1907), 2
Ch. 312; Goodyear India Rubber
Glove Mfg. Co. v. Goodyear Rubber
Co., 128 U. S. 598; 9 Sup. Ct. 166;
Plant Seed Co. v. Michel, Plant &
Seed Co., 37 Mo. App. 313 (where
the word "Plant" in plaintiff's name
was derived from the surname of its
promoters, while in defendant's
jiame it was a common noun).
Cf. Glucose Sugar Refining Co. v.
American Glucose Sugar Refining
Co. (N. J.), 56 Atl. 861.
* Industrial Mutual Deposit Co.
V. Central Mutual Deposit Co., 66
S. W. 1032; 112 Ky. 937; Car Ad-
vertising Co. V. New York City Car
Advertising Co., 107 N. Y. Supp. 547.
Cf. International Committee Y. W.
C. A. V. Y. W. C. A., 194 lU. 194;
62 N. E. 551; 56 L. R. A. 888
(where an injunction was granted);
Colonial Dames of America v. Co-
lonial Dames of New York, 29 N. Y.
Misc. 10; 60 N. Y. Supp. 302, af-
firmed short in 63 N. Y. App. Div.
615; 71 N. Y. Supp. 1134 (where an
injunction was refused).
' Supreme Lodge Knights of Pyth-
ias V. Improved Order Knights of
Pythias, 113 Mich. 133; 71 N. wi
470; 38 L. R. A. 658; Grand Lodge
v. Graham, 96 Iowa, 592; 65 N. W.
837; 31 L. R. A. 133; La Tosca
Club v. La Tosca Club, 23 App. D. C.
96.
But see Smith v. David H. Brand
& Co. (N. J.), 58 Atl. 1029; 67 N. J.
Eq. 529 (where the defendant cor-
poration had purchased the good
will of a former partnership).
' Hazelton Boiler Co. v. Tripod
Boiler Co., 137 111. 231; 28 N. E.
248.
But see Boston Rubber Shoe Co.
371
§ 452 COKPORATE NAMES [ChAP. VIII
question is governed by the same principles as if the company-
were unincorporated.'
§ 452. When Right of Corporation is Exclusive. — If, how-
ever, a corporation assumes some novel, fancy appellation to
which others have no prior right, the fact of adoption of that
title confers an exclusive right to its use.^ So, where the name of
a corporation includes the individual names of certain of its
shareholders who subsequently sell their shares and form a new
corporation under a title which Ukewise comprises their indi-
vidual names, the right of the former company to the use of the
name is superior to that of the latter.' Similarly, a corporation
may acquire by a;Ssignment from its promoters the right to the
exclusive use of a trade name to which they were entitled, even
as against a person who (without legal right) was using the same
name at the time of the incorporation.* The right of a corpora-
tion to the exclusive use of its corporate name is not forfeited
because the company may be engaged in an illegal business.*
§ 453-§ 456. Remedies against Improper Use of Names by
or of Corporations.
§ 453. Injunction against Incorporation under Name to which
Plaintiff has a prior Right. — An unincorporated company may
V. Boston Bvbber Co., 149 Mass. 436, plaintiffs was refused so far as de-
439; 21 N. E. 875. fendant's bxisiness was dififerent
' See infra, § 456. from plaintiffs') ; Legal Aid Society
As to the right of a corporation v. Co-operative Legal Aid Society,
to enjoin an individual from adopt- 41 N. Y. Misc. 127; 83 N. Y. Supp.
ing a name or addition tending to in- 926; Blackwell's Durham Tobacco
duce the belief that he is a member Co. v. Am. Tobacco Co. (N. Car.),
of the corporation, see Society of Ac- 59 S. E. 123 (declaring that the fact
countants and Auditors v. Goodway of incorporation under a certain
(1907), 1 Ch. 489. name confers no exclusive right
' Illinois Watch Case Co. v. thereto unless followed up by the
Pearson, 140 111. 423; 31 N. E. 400; transaction of business under that
16 L. R. A. 429; Philadelphia Trust, name).
etc. Co. V. Philadelphia Tnist Co., ' Holmes, Booth & Hay dens v.
123 Fed. 534; Koebd v. Landlords' Holmes, Booth & Atwood Mfg. Co.,
Protective Bureau, 210 111. 176; 71 37 Conn. 278; 9 Am. Rep. 324. See
N. E. 362; Glucose Sugar Refining also infra, § 458.
Co. V. American Sugar Refining Co. * Corbin v. E. Taussig & Co., 132
(N. J.), 56 Atl. 861. Fed. 662 (headnote inadequate).
But see Dodge Stationery Co. v. ° Grand Lodge v. Graham, 96
Dodge, 145 Cal. 380; 78 Pac. 879 Iowa 592; 65 N. W. 837; 31 L. R.
(where an injunction against the use A. 133.
of a similar corporate name to
372
§ 447-§ 468] REMEDIES AGAINST IMPKOPEE USE § 454
enjoin the formation of a corporation under a name so similar
to the complainant's as to be misleading/ and of course
the same is true where the complaining company is itself
incorporated.^
§ 454. Injunction against Use of improper Corporate Name
after Incorporation. — If a company has been incorporated and
received a certificate entitling it to do business under a deceptive
name, the injured party may enjoin it from carrying on business
thereunder/ and may require the directors to have the name
removed from the registry.* But where the complaining com-
pany was organized only one month before the defendant and
had done no business, whereas the defendant was in active
operation, an injunction was refused.' Where a corporate name
is conferred by act of the legislature it would seem that its use
' Hendricks v. Montagu, 17 Ch. 21 R. I. 109; 42 Atl. 308; 79 Am.
D. 638 (Universe Life Assurance Co., St. Rep. 786; 43 L. R. A. 95 (where
enjoined by Universal Life Assur- complainant was an individual);
anee Co.) ; Imperial Mfg. Co. v. People ex rel. Columbia Chemical Co.
Schwartz, 105 111. App. 525 (where v. O'Srien, 101 N. Y. App. Div. 296;
plaintiff, an individual, had been 91 N. Y. Supp. 649 (semble) ; Nesne
trading under the identical name v. Sundet, 101 N. W. Rep. 490; 93
afterwards adopted by the defend- Minn. 299 (where complainants
ant corporation). were co-partners) ; American Nov-
' Tussaud V. Tussaud, 44 Ch. D. elty Mfg. Co. v. Manufacturing
678 ("Louis Tussaud, L't'd," en- Electrical Novelty Co., 36 N. Y.
joined by Mme. Tussaud & Sons, Misc. 450; 73 N. Y. Supp. 755;
L't'd); Boston Rubber Shoe Co. v. Eureka Fire Hose Co. v. Eureka
Boston Rubber Co., 149 Mass. 436; Rubber Mfg. Co. (N. J.), 60 Atl. 561
21 N. E. 875 (where plaintiff's name (where the injunction was limited
was given by a special act of to using the name in dealing in the
incorporation). same class of goods as the plaintiff).
But cf. Elgin Nat. Watch Co. v. Cf. American Clay Mfg. Co. v.
Loveland, 132 Fed. 41, 52. American Clay Mfg. Co., 198 Pa. St.
' Merchant Banking Co. of Lon- 189; 47 Atl. 936.
don V. Merchants Joint-Stock Bank, _ * Societe Anonyme des Andens
9 Ch. D. 560; Manchester Brewery Etablissements Panhard et Levassor
Co. V. North Cheshire and Manchester v. Panhard Levassor Motor Co.
Brewery Co. (1898), 1 Ch. 539 (where (1901), 2 Ch. 513.
the name of the defendant company As to whether the corporation is
was held to suggest deceitfully an a necessary party to a suit for an
amalgamation between the plaintiff injunction against its officers, see
and some other concern) ; Holmes, Elgin Nat. Watch Co. v. Love-
Booth & Haydens v. Holmes, Booth & land, 132 Fed. 41, 46 (headnote
Atwood Mfg. Co., 37 Conn. 278; 9 inadequate).
Am. Rep. 324; Newby v. Oregon " Hygeia Water Ice Co. v. New
Central Ry. Co., Deady 609; Cellu- York Hygeia Ice Co., 140 N. Y. 94;
laid Mfg. Co. v. Cellonite Mfg. Co., 35 N. E. 417.
32 Fed. 94; Armington v. Palmer,
373
§ 455 CORPORATE NAMES [ChaP. VIII
cannot be enjoined on the ground that it is misleading and unduly
similar to that of some existing company.'
§ 455. Power of Courts to forestall or overrule Discretion of
Public Officer Charged with Duty of passing on Propriety of Corpo-
rate Name. — In a Massachusetts case, it was held that a statute
which authorizes some public official to refuse a certificate of
incorporation if the name of the proposed company is so similar
to a name already in use as to be misleading and provides that
the certificate if granted shall be conclusive evidence of the
existence of the corporation, confides the whole matter of undue
similarity of names to the pubhc officer's discretion, so as to
prevent any bill in equity or writ of mandamus to overrule or
forestall his conclusion,^ but this decision is directly contrary to
the English cases ^ as well as to the trend of American authority,^
and ought not, it is submitted, to be followed. The courts will
not coerce a registrar by mandamus to record an incorporation
paper where the name of the proposed company is so similar to
that of an existing company that an injunction would be granted
against its use.°
§ 456. Receipt of Mail intended for another Company. — Ques-
tions as to confficting rights to the use of a corporate name are
usually determined upon injunction proceedings by one company
to restrain the other from the use of its name. In a recent case
the question arose with reference to the mutual rights of the two
corporations with respect to mail addressed in such a way as to
be ambiguous. In such a case, the company which is respon-
' PavUno V. Portuguese Bene- be required by mandamus to grant
iieud Ass'n, 18 R. I. 165; 26 Atl. the certificate except in a clear case) ;
36; 20 L. R. A. 272. People ex rd. Columbia Chemical Co.
But see Edison Storage Battery v. O'Brien, 101 N. Y. App. Div. 296;
Co. V. Edison Automobile Co., 56 91 N. Y. Supp. 649 (holding that
Atl. 861, 866; 67 N. J. Eq. 44 where officer registers the incorpora^
(semble). tion, certiorari will not lie to revoke
' American Order S. C. v. Mer- his determination, the only remedy
rill, 151 Mass. 558; 24 N. E. 918; being in equity, but semble, if he
8 L. R. A. 320. erroneously refuses registration, cer-
' Tussaud V. Tv^saud, 44 Ch. D. tiorari might lie to compel him to do
678. so) ; Knights of Maccabees v. Searle
♦ Cf. Grand Lodge v. Graham, 96 (Nebr.), 106 N. W. 448 (officer en-
Iowa 592; 65N. W. 837; 31L. R. A. joined from issuing a certificate). .
133; Ex parte Walker, 1 Tenn. Ch. ' People v. Rose, 219 111. 46; 76
97, 100, 101; State ex rd. Hutchin- N. E. 42; People ex rd. Fdter v.
son v. McGrath, 92 Mo. 355; 5 S. W. Rose, 80 N. E. 293; 225 HI. 496.
29 (holding that the officer wiU not
374
I 447-§ 468] WHAT IS undue similarity § 467
sible for the confusion should bear the inconvenience of having
its mail opened by the other corporation. Thus, where one
corporation was named the Central Trust Company of Illinois
and the other the Central Trust Company, both being engaged
in business in Chicago, but the latter having obtained the right
to do business in Illinois after the incorporation of the former,
the court held that letters addressed to the "Central Trust Com-
pany, Chicago," Vidthout mentioning street or number, should
be deUvered to the Central Trust Company of lUinois.*
§ 457. How to determine whether Corporate Names are tmduly
similar to one another. — Whether two corporate names are so
similar as to be deemed misleading is to be decided according to
the general principles of law applicable to trade names and not
by any peculiar rule of corporation law.^ It has been held that
"the International Loan & Trust Co. of Kansas City" is not
um-easonably similar to "The International Trust Co.," stress
being laid on the addition of the words "of Kansas City"; ^ but
by other courts a very similar distinction has been thought to be
insufficient.* "The Columbian Chemical Co." too nearly re-
sembles "The Columbia Chemical Co." ^ "Aerators, Limited,"
cannot enjoin the registration of "Automatic Aerators Patents,
Limited,"* nor the "British Vacuum, Cleaner Co." the "New
Vacuum Cleaner Co." ^ ; for in such cases the title consists of
^Central Trust Co. v. Cmiral Mass. 271; 26 N. E. 693; lOL. R. A.
Trust Co. of Itlinois, 149 Fed. 789. 758.
Cf . Erie Printing Co. v. Erie Cf . Farmers' Loan & Trust Co. v.
Lithographing & Printing Co., 31 Farmers' Loan & Trust Co. of Kan^
Pa. Co. Ct. 1, 5 (where the court sas, 1 N. Y. Supp. 44.
held that the two names were not * Saunders v. Sun Life Assurance
unreasonably similar, but in view Co. of Canada (1894), 1 Ch. 537;
of the fact that confusion arose Central Trust Co. v. Central Trust
through the carelessness of corre- Co. of Illinois, 149 Fed. 789, 990
spondents, suggested the appoint- (semble); Bradley Fertilizer Co., 19
ment of a receiver to open the Pa. Co. Ct. 271.
mail). ' People ex rd. Columbia Chemi-
' British Vacuum Cleaner Co. v. cal Co. v. O'Brien, 101 N. Y. App.
New Vacuum Cleaner Co. (1907), Div. 296; 91 N. Y. Supp. 649.
2 Ch. 312. ' Aerators, Ltd., v. ToUitt (1902),
' International Trust Co. v. /n- 2 Ch. 319.
ternational Loan & Trust Co., 153 ' British Vacuum Cleaner Co. v.
375
§ 458 CORPOEATE NAMES [ChAP. VIII
mere descriptive words.' The character of the business and the
location of the two companies must be considered.^ The fact,
however, that the defendant company does not intend to carry-
on the same business as the complainant has been held to be
immaterial if it has corporate power so to do.' The act of the
complaining corporation in organizing subsidiary corporations
each of which includes in its corporate name the words of which
a monopoly is claimed may, it seems, be taken as an admission
that those words are merely descriptive of the character of
goods sold by the complainant and that the use of those words
by other corporations will not necessarily lead to confusion.* But,
on the other hand, the fact that a corporation has suffered one
company to infringe its right to exclusive use of its corporate
name will not prevent it from enjoining another subsequently
organized company from so doing.* It seems that there is no
objection to the assumption by a new corporation of a name
similar to or even identical with the name of a former corpora-
tion which has been absorbed by another organization bearing a
very different name."
§ 458. Transfer to Corporation of a Promoter's Right to carry
on Business under his own Name. — Although an individual is
entitled bona fide to carry on business under his own name even
though it resemble that of some established concern, yet this is
a personal right which he cannot confer upon any third person,
and consequently not even upon a corporation organized by him,
, since the latter is a distinct legal entity.' In a very recent EngUsh
New Vacuum Cleaner Co. (1907), * British Vacuum Cleaner Co. v.
2 Ch. 312. New Vacuum Cleaner Co. (1907),
' See supra, § 451. 2 Ch. 312, 330.
' State ex rel. Hutchinson v. ' Atlas Assurance Co. v. Adas In-
McGrath, 92 Mo. 355, 358; 5 S. W. surance Co. (Iowa), 112 N. W. 232.
29; Dodge Stationery Co. v. Dodge, " Re Duqvssne College Charter,
U5 Cal. 380; 78 Pao. 879; Dunlop 12 Pa. Co. Ct. Rep. 491.
Pneumatic Tyre Co. v. Dunlop Motor ' Fine Cotton Spinners, etc. Ass'n
Co. (1907), A. C. 430, 438 ("The v. Harwood Cash & Co. (1907), 2 Ch.
objects of the two companies need 184, 189, 190; Tussaud v. Tussaud,
not be absolutely identical in order 44 Ch. D. 678; Charles S. Higgins
to entitle the complainers to rehef, Co. v. Higgins Soap Co., 144 N. Y.
but there must be great similarity"). 462; 39 N. E. 490; 43 Am. St. Rep.
' Edison Storage Battery Co. v. 769; 27 L. R. A. 42; R. W. Rogers
Edison Automobile Co., 56 Atl. 861; Co. v. Wm. Rogers Mfg. Co., 70 Fed.
67 N. J. Eq. 44. Rep. 1017; 17 C. C. A. 576 (upon
But cf. Aerators, Ltd. v. Tollitt the ground of actual fraud in as-
(1902), 2 Ch. 319. suming the name); Dodge Station^-
376
§ 447-§ 468] FOREIGN AND DOMESTIC COMPANIES § 459
case, the suggestion was thrown out that possibly a distinction
might exist if the individual before attempting to assign his
personal right to a corporation first builds up a business in his
own name and then transfers the good will and name to a
corporation.'
§ 459. Conflicting Rights of Domestic and Foreign Corporations.
— Where a dispute arises between a foreign company and a
domestic company respecting the right to the use of a trade name,
very difficult questions, which perhaps are not in strictness
within the scope of this treatise, may be raised. In some of the
United States, statutes expressly provide that no foreign corpora-
tion shall be allowed to do business within the state under a
name so similar to that of a domestic company as to be likely to
mislead.^ Under such a statute it may be immaterial whether
the foreign or the domestic company was first incorporated, or
whether the one or the other had first transacted business within
the state. But apart from such provisions, the maxim, qui prior
est tempore potior est jure, would seem to apply. Thus, a foreign
corporation cannot enjoin a domestic company from using a
corporate name similar to that of the complainant but adopted
before the latter's organization,^ unless the foreign company
erj/Co.v.Doisre, 145 Cal. 380; 78 Pac. v. Wyckoff, Seamans & Benedict,
879; McFeU Electric & Telephone Co. 198 U. S. 118 (headnote inade-
V. McFell Electric Co., 110 111. App. quate) ; 25 Sup. Ct. 609; DonneU v.
182 (proceeding in part upon the Herring-Hall-Marvin Co., 208 U. S.
ground that the individual in question 267.
had conferred upon the complainant ' Fine Cotton Spinners, etc. Ass'n
company the right to use his name), v. Harwood Cash & Co. (1907),
Cf. Edison Storage Battery Co. v. 2 Ch. 184. Cf. Durdop Pneumatic
Edison Automobile Co. (N. J.), 56 Tyre Co. v. Durdop Motor Co. (1907),
Atl. 861; 67 N. J. Eq. 44; Internor- A. C. 430.
tional Siiver Co. v. Wm. 6. Rogers ' International Trust Co. v. /n-
Co., 113 Fed. 526; Hall's Safe Co. ternational Loan & Trust Co., 153
V. Herring-Hall-Marmn Safe Co., Mass. 271; 26 N. E. 693; 10 L.
146 Fed. 37; 76 C. C. A. 495, af- R. A. 758 (holding that the material
firmed with modifications, 208 U. S. point is not the corporate name
554 ; Bagby & Rivers Co. v. Rivers, of the foreign company but the
87 Md. 400; 40 Atl. 171; 67 Am. name under which its business is
St. Rep. 357; 40 L. R. A. 632; In- transacted).
ternational Silver Co. v. Simeon, ' Hazelton Boiler Co. v. Hazdton
etc. Rogers Co., 110 Fed. 955; Peck Tripod BoUer Co., 142 lU. 494; 30
Bros. & Co. V. Peck Bros. Co., 113 N. E. 339 (criticised in Peck Bros.
Fed. 291; 51 C. C. A. 251; Dunlop & Co. v. Peck Bros. Co., 113 Fed.
Pneumatic Tyre Co. v. Dunlop 291; 51 C. C. A. 251).
Motor Co. (1907), A. C. 430.
But see contra, Howe Scale Co. '
377
§ 459 CORPORATE NAMES [ChAP. VIII
succeeds by assignment to the right of a company which had
been previously incorporated.' In England, it was held that a
British company which had done business for more than eighty
years under the name of the Sun Life Assurance Society could
not enjoin a foreign company, called the Sun Life Assurance
Company of Canada, from transacting business in Great
Britain under its corporate name, although it was conceded to
resemble the plaintiff's so closely as to be likely to cause con-
fusion ; but it was also held that the Canadian company should
be strictly confined to its corporate name, and should be enjoined
from abbreviating the same by omission of the words "of
Canada" or otherwise.^ This^ decision is extremely liberal to
the foreign corporation, and, indeed, in view of the priority of
organization of the domestic company would seem to be more
liberal than sound principle justifies; and accordingly in
America in such a case the prior right of the domestic corpora-
tion would probably be recognized.' The mere existence of a
foreign company which had never transacted business within
the state and whose wares or manufactures were not habitually
imported for sale, would seem to furnish no reason against the
adoption of a similar name by a domestic corporation. But
although the foreign company may never have had an office or
agency within the state, yet if its goods are in fact frequently
imported it may enjoin a domestic corporation from using a
corporate name which is unreasonably similar to the plaintiff's
name and which has been adopted for the fraudulent purpose of
getting the benefit of the plaintiff's reputation.* A fortiori, a
foreign company which has lawfully transacted business within
the state may enjoin a domestic company from adopting a name
unfairly similar to its own, with the same effect as if the com-
' Peck Bros. <fc Co. v. Peck Bros, with the foreign corporation had
Co., Il3 Fed. 291; 61 C. C. A. 251. severed the connection on grounds
° Saunders v. Sun Life Assur- which were held sufficient).
ance Co. of Canada (1894), 1 Ch. _ * Societe Anonyme des Anciena
537. Etablissements Panhard et Levassor
' American Clay Mfg. Co. v. v. Panhard Levassor Motor Co.
American Clay Mfg. Co., 198 Pa. St. (1901), 2 Ch. 613 (where the com-
189 ; 47 Atl. 936. plaining company was unincor-
Cf. State Council, etc. v. National porated).
Council, etc. (N. J.), 64 Atl. 661 Cf. Pinet et Cie. v. Maison Louis
(where the domestic corporation Pinet (1898), 1 Ch. 179.
after several years of affiliation
378
§ 447-§ 468] MISNOMER § 460
plainant had been a domestic corporation ; ' and conversely in
such a case the domestic company would have no remedy against
the foreign company.^ A domestic corporation, formed while a
foreign corporation with an almost identical name is transacting
business within the state in violation of its laws as to the trans-
action of business by foreign corporations, has been held to
have a better right than the foreign company to the use of the
corporate name.^
Where the statutes of a state require an officer to issue a
license to do business within the state to all foreign corporations
which comply with certain statutory formalities, it has been
held that the officer cannot refuse a license on the ground that
the applicant's name is unreasonably similar to that of some
domestic company ; * but on the other hand even if the license be
granted, the domestic company may enjoin the foreign company
from using the misleading name within that state.*
§ 460- § 461. Misnomer of Corporations.
§ 460. In general. — Misnomer in the case of a corporation is
attended by precisely the same consequences as in the case of an
individual. Thus, a corporation is bound by its contracts,
whether under seal or not, even though entered into under an
erroneous name ; ' and conversely, a corporation is entitled to
' PhUadelphia Trust, etc. Co. v. Co. v. Van Cleave, 183 111. 330;
Philadelphia Trust Co., 123 Fed. 55 N. E. 698; 47 L. R. A. 795.
534; Knights of Maccabees v. Searle ' American Clay Mfg. Co. v.
(Nebr.), 106 N. W. 448; Aiias As- American Clay Mfg. Co., 198 Pa. St.
surance Co. v. AUas Insurance Co. 189 ; 47 Atl. 936.
<Iowa), 112 N. W. 232; Bradley ' Clement v. City of Lathrop, 18
Fertilizer Co., 19 Pa. Co. Ct. 271. Fed. 885; Midland Steel Co. v
But see Lehigh Valley Coal Co. Citizens' Nat. Bank, 72 N. E. 290;
V. Hamblen, 23 Fed. 225; People 34 Ind. App. 107 (where the cor-
es rd. Home Life Insurance Co. v. poration used the name of its presi-
Home Life Assurance Co., Ill Mich, dent as a business name).
405 ; 69 N. W. 653. But see Hambro v. Hull, etc.
' Ottoman Cahvey Co. v. Dane, Fire Ins. Co., 3 H. & N. 789.
■95 III. 203; Blackwell's Durham Cf. Robinson v. First Nat. Bank
Tobacco Co. v. Am. Tobacco Co. (Tex.), 82 S. W. 505 (where the
<N. Car.), 59 S. E. 123. members of a corporation, having
' Central Trust Co. v. Central begun to trade under a new name,
Trvst Co. of Illinois, 149 Fed. 789. were sued as partners).
* People ex rd. Traders' Fire Ins.
379
§ 461 CORPORATE NAMES [ChAP. VIII
enforce its contracts notwithstanding any such error. ^ So, a
corporation may have the benefit of a legacy or devise made to
it by an erroneous name.^ Similarly, misnomer in an appoint-
ment of a corporation as executor is immaterial.^ So, misnomer
of a corporation in a statute is immaterial.* All that is necessary
in any of these cases is that the corporation in question be in fact
the company intended to be designated. In order to show that
there is a mere case of misnomer and not two distinct corpora-
tions, the identity of the company must appear.^ Where the
similarity of name is very close, this may be presumed; but
such a presumption, unless supported by afiirmative proof," is
very unreliable. For instance, it has been held that a deed to
the "Odd Fellows Building and Savings Company" will not
convey title to a corporation whose corporate name is the
"Odd Fellows Building and Exchange Company," where
there is no sufficient extraneous proof that the difference of
name is a mere misnomer.'
§ 461. Misnomer in Pleadings. — Upon the same principle
that misnomer in the case of a corporation is attended with the
same consequences as in the case of an individual, it follows
'■ Hagerstown Turnpike Road Co. and Agency Company of Austra-
V. Creeger, 5 H. & J. 122; 9 Am. lasia, Limited," rather tlian "The
Dec. 495; Medway Cotton Manun Trustees Executors and Agency
factory v. Adams, 10 Mass. 360; Company, Limited").
Commercial Bank v. French, 21 Pick. * Attorney-General v. Chicago, etc.
(Mass.) 486, 490; Berks & Dauphin Ry. Co., 35 Wise. 425, 556-558.
Turnpike Road v. Myers, 6 Serg. & ^ Langhorne v. Richmond City
R. (Pa.) 12. Ry. Co., 91 Va. 364; 22 S. E. 357;
' Woman's Foreign Missionary Smith v. Tallahassee, etc. Plank
Soc. V. Mitchell, 93 Md. 199; 48 iJood Co., 30 Ala. 650.
Atl. 737; 53 L. R. A. 711; Reilly Cf. Robinson v. First Nat. Bank,
V. Union Protestant Infirmary, 87 82 S. W. 505 (Tex.); McCord-Col-
Md. 664; 40 Atl. 894; Jordan v. tins Co. v. Prichard, 84 S. W. 388
Richmond Home for Ladies (Va.), (Tex.); Brassfield v. Quincy, etc.
56 S. E. 730; Doan v. Vestry of R. R. Co., 109 Mo. App. 710; 83
Parish of Ascension (Md.), 64 Atl. S. W. 1032 (where the alleged error
314; Peckham v. Newton, 15 R. I. consisted in omitting the word
321; 4 Atl. 758. "Company" from the defendant's
' Re Maher, 18 Vict. L. R. 519 name); Riemann v. Tyroler, etc.
(where parol evidence of the testator's Verein, 104 111. App. 413.
directions to the solicitor who drew " As to the use of parol evidence,
the will was admitted to show that see Jordan v. Richmond Home for
by an appointment of "The Trustees Ladies (Va.), 56 S. E. 730.
Executors and Agency Company, ' Cobb v. Bryan (Tex.), 83 S. W.
Melbourne," the testator intended 887.
"The National Trustees Executors
380
f 447-§ 468]
MISNOMER
§461
that in an action at law under the common law system of plead-
ing, misnomer of either the plaintiff or defendant must be pleaded
in abatement and cannot be availed of under the general issue
or other plea in bar, or even under a plea of nvi tiel corporation.^
So, in equity, misnomer of a corporation, whether plaintiff or
defendant, must be pleaded in abatement and cannot be taken
advantage of by answer.^ If, however, the objection be raised
by a proper form of pleading a very slight misnomer may be
fatal, as in the case of an individual. For instance, the use of
the word "the" before the title of the defendant corporation,
when the corporate name contains no definite article, has been
held to be a fatal misnomer.' If an act of incorporation (and
' Baltimore, etc. R. R. Co. v.
Fifth Baptist Church, 137 U. S. 568;
11 Sup. Ct. 185; Gilbert V. Nantucket
Bank, 5 Mass. 97 (arising on motion
in arrest of judgment); WUhite v.
Convent of Good Shepherd, 78 S. W.
138; 25 Ky. L. Rep. 1375 (motion
to quash summons, which, however,
did not "give plaintiff a better
writ"); Riemann v. Tyroler, etc.
Verein, 104 111. App. 413; Associate
Presbyterian Congregation v. Hanna,
113 N. Y. App. Div. 12; 98 N. Y.
Supp. 1082 (denial of incorporation
not sufficient to raise the defence from the true corporate name were
under N. Y. Code) ; Gray v. Monorir- held invalid.
"The Southern Pac. Co." held un-
authorized where the writ ran
against "The Southern Pacific Rail-
way Co."); Town of East Rome v.
City of Rome (Ga.), 58 S. E. 854
(where an action brought in the
name of the "Town of E. R,"
whereas the corporate name was the
"Mayor and City Council of the
town of E. R.," was held to be a mere
nullity).
In Glass v. Tipton, etc. Co., 32
Ind. 376, condemnation proceedings
taken in a name varying somewhat
gahela Nav. Co., 2 Watts & S. 156;
37 Am. Dec. 500; President, etc. of
Hanover Savings Fund v. Suter, 1
Md. 502 (plea of non-assumpsit).
Cf. Smith V. Tallahassee, etc.
Plank Road Co., 30 Ala. 650 (where
an amendment was allowed); Bank
of Utica V. Smalley, 2 Cow. (N. Y.)
770; 14 Am. Dec. 526 (where the
point was left open); Washington
County Nat. Bank v. Lee, 112 Mass.
521; University of Louisville v.
Hammock (Ky.), 106 S. W. 219 (ob-
jection not available for the first
time on appeal).
But see Illinois State Hospital v.
Higgins, 15 111. 185 (where.misnomer
of the plaintiff corporation was held
a ground for demurrer); Southern
Pac. Co. V. Block, 84 Tex. 21; 19
S. W. 300 (a judgment against
As to mechanics' lien proceed-
ings, see Grafton Grocery Co. v. Home
Brewing Co. (W. Va.), 54 S. E. 349.
' Young v. South Tradegar Iron
Co., 85 Tenn. 189; 2 S. W. 202; 4
Am. St. Rep. 752.
' Lapham v. Philadelphia, etc.
R. R. Co. (Del.), 56 Atl. 366; 4 Pen-
newill's (Del.) Rep. 421.
Contra : Western, etc. Trust Co. v.
Ogden (Tex.), 93 S. W. 1102.
Cf. Texas, etc. R. R. Co. v. Barber
(Tex.), 71 S. W. 393; 31 Tex. Civ.
App. 84 (where the words "of 1874"
after the company's name in a
petition were said to be mere
surplusage).
As to the use of a new name be-
fore a change has been completely
effected, and use of old name after
the change, see infra, § 466, § 467.
381
§ 462 CORPORATE NAMES [ChAP. VIII
the same statement might doubtless be made with respect to an
incorporation paper under modern general laws), refers to the
company by an abbreviated form of the corporate name, the use
of such abbreviated form is thereby sanctioned, and will therefore
not be deemed a misnomer.'
In order that the use in pleadings of an erroneous name
may have no consequences more serious than those attaching
to misnomer, the erroneous designation must have been actually
intended to refer to the company in question and not to another
corporation. There is sometimes a presumption to this effect.
So, a company described in a pleading as the Campbell and Zell
Company will be presumed to be identical with a ,company
whose corporate name is the Campbell and Zell Company of
Baltimore City.^ Where a suit is brought against an individual
who is supposed to be carrying on business under a company
name, the plaintiff upon learning that the company was in fact
incorporated cannot treat the case as a mere misnomer of the
defendant so as to make the corporation by its corporate name
the defendant.' In an early Maryland case, where a bill was
filed against the president and the directors of a company whose
corporate name was The Chesapeake and Ohio Canal Company,
the real complaint being against the corporation, the chancellor
expressed the opinion that the corporation by appearing in the
suit might have treated the defect as a mere misnomer.*
§ 462- § 465. Inferences from Corporate Name.
§ 462. In construing Incorporation Paper. — The corporate
name may be material in construing an incorporation paper and
in determining the company's objects and powers.^ Thus, powers
to engage in land speculation, a promoting business, or in stock-
jobbing, will not be conferred by mere general words where the
• Cf. Merrick v. Trustees, etc. of App. Div. 486; 79 N. Y. Supp.
Bartk of the Metropolis, 8 Gill (Md.) 631.
59, 67-68 (headnote inadequate). * Binney's Case, 2 Bland Ch.
But see Town of East Rome v. City (Md.) 99, 106-107. Cf. Fortier v.
of Rome (Ga.), 58 S. E. 854 (stated N. O. Nat. Bank, 112 U. S. 439.
supra, p. 107, note 5). ' Van Pelt v. Home Bldg., etc.
' Campbell & Zell Co. V.American Ass'n, 79 Ga. 439; 4 S. E. 501;
Surety Co., 129 Fed. 491. Dorsey Harvester Revolving. Rake Co.
' lAcausi V. Ashworth, 78 N. Y. v. Marsh, 7 Fed. Gas. 939.
382
§ 447- § 468] INFERENCES FROM NAME § 464
name of the company is "The Crown Bank."^ Of course,
however, the name is not conclusive ; ^ and therefore if the objects
of the company as expressed in its incorporation paper clearly
show that it is not the kind of corporation its name would
indicate, the courts will hold that the company may enjoy the
powers and should be subject to the duties annexed by the law
to the class of corporations to which it really belongs rather than
to the class which its name would indicate.'
§ 463. Corporate Name as. brief Description of Company's
Business. — So, the corporate name may be treated for other pur-
poses as to some extent a description of the company and its
business. For instance, under an English statute which requires
a bill of sale to be accompanied by an aflSdavit containing a
description of the grantor's occupation, a mere statement of the
company's name — "The Glucose Sugar and Colouring Com-
pany" — may be a sufficient compUance with the act.*
§ 464. Corporate Name as Allegation that Company is incor-
porated. — Similarly, a statement of a name which is usually
applicable to a corporation may, in pleading, be equivalent to an
averment or admission that the company is incorporated.^ So,
' Crown Bank, 44 Ch. D. 634. 71 N. E. 59; 33 Ind. App. 178 ("Ft.
So, in determining a company's Wayne Gas Co."); Perkins Co. v.
" main purpose," regard may be had Shewmake, 119 Ga. 617; 46 S. E.
to the corporate name: Governments 832 ("C. H. Perkins Co."); Mattox
Stock Investment Co. (1891), 1 Ch. v. State, 115 Ga. 212, 219; 41 S. E.
649. • 709 ("Acme Brewing Co."); GeoT-jfia
' Hamilton Nat. Bank v. Ameri- Co-op., etc. Ass'n v. Borchardt, 123
con Loare, ete. Co., 92 N. W. 189, 192 Ga. 181; 51 S. E. 429 ("Georgia
(headnote inadequate) ; 66 Nebr. 67. Co-operative Fire Association) ;
' Minneapolis, etc. Surburban Ry. U. S. Express Co. v. Bedbury, 34 111.
Co. (Minn.) 112 N. W. 13. 459 ("U. S. Express Co.") ; Stein v.
* Shears v. Jacob, L. R. 1 C. P. Indianapolis, etc. Ass'n, 18 Ind. 237
513. (" Indianapolis Bldg. Loan Fund and
Cf. Dyer v. Drucker, 108 N. Y. Savings Ass'n"); Harris v. Mils-
App. Div. 238; 95 N. Y. Supp. 749 kingum Mfg. Co., 4 Blackf. (Ind.)
(the name "City and Resort Hotel 267; 29 Am. Dec. 372 ("Muskingum
Co." held insufficient to show that Mfg. Co.").
company was a "stock corporation" Cf. Holcomb v. Cable Co., 119 Ga.
and not a "monied corporation"). 466; 46 S. E. 671 ("Cable Co.");
' Adams Express Co. v. Harris, Snyder v. Philadelphia Co., 5iW.Ya..
120 Ind. 73; 21 N. E. 340; 16 Am. 149; 46 S. E. 366; 102 Am. St. Rep.
St. Rep. 315; 7 L. R. A. 214 941; 63 L. R. A. 896; Whitt v.
("Adams Express Co."); Norton v. Blount, 124 Ga. 671; 53 S. E. 205
State, 74 Ind. 337 ("Terre Haute & (held, that "Artope & Whitt Co."
Evansville Railroad Co."); Ft. " prma /ocie imports a corporation,"
Wayne Oas Co. v. Nieman (Ind.), but that this presumption is over-
383
§ 465 CORPORATE NAMES [ChAP. VIII
it has been said that the use of a name such as is usually
adopted by corporations, and not containing the name of
any individual as is customary in the case of simple part-
nerships, indicates, 'prima facie at least, corporate existence.'
So, a reference in a deed to an organization by the name
of the " Anglo-Calif ornian Bank" has been held to import an
admission by the parties to the deed that the bank is in-
corporated.^ But such inferences are uncertain ^ and ought
not, it is submitted, to be indulged.^ Thus, a warranty that
certain property is owned by the N. S. Company does not
amount to a warranty that the property is owned by a corpo-
ration, but is fully satisfied if the owner is an individual or
a firm trading under that name.^
§ 465. Use of Name without word " limited " and as Notice that
Liability of Shareholders is unlimited. — Moreover, where statutes
require the word " limited," or some similar word, to be appended
to the name of all companies the liability of whose shareholders
is limited, the absence of the word from the name used by a
company may charge an applicant for shares with notice that
the company is in fact unlimited. Thus, where a person applied
for shares in a company, the form of application giving the
thrown where plea refers to the Fidd, 146 Cal. 644, 651 (headnote
business as owned by the defend- inadequate); 80 Pac. 1080.
ants); Van Winkle Gin, etc. Co. v. ' E. g. — the name "Adams Ex-
Mathews (Ga.), 58 S. E. 396. press Co." has been held to import
As to the use of corporate names a corporation although in fact the
as evidence of incorporation, see company is imincorporated.
supra, § 274. * Cf. Guckert v. Hacke, 159 Pa.
' Jones V. Cincinnati Type Fourth St. 303; 28 Atl. 249 ("Hughes &
dry Co., 14 Ind. 89 ("Gncinnati Gawthrop Co."); State \. Patterson,
Type Foundry Co."). 159 Mo. 98, 101; 59 S. W. 1104
Cf. Williamsburg, etc. Ins. Co. v. (Adler-Goldman Commission Co.);
Frothingham, 122 Mass. 391 (where Boyce v. Augusta Camp, 14 0^1. 6i2;
the word successors was used in con- 78 Pac. 322 ; Briggs v. McCvUongh,
nection with a company's name); 36 Cal. 542, 550 ("Pac. Mut. Life
Platte Valley Bank, 1 Nebr. 461 Ins. Co. of Cal."); Clark v. Jon^s,
("Platte VaUey Bank"); Sierra 87 Ala. 474, 481-482; 6 So. 362
Land, etc. Co. v. Bricker (Cal.), 85 ("Wetumpka Lumber Co."); Ciin-
Pac. 665. yus v. Guenther, 96 Ala. 564; 11 So.
As to statutes forbidding the use 649 ("Penn Mut. Life Ins. Co.");
by individuals of names purporting Austin v. M. Ferst's Sons & Co.
to be corporate names, see Imperial (Ga.), 58 S. E. 318 ("M. Ferst's Sons
Mfg. Co. V. Schwartz, 105 lU. App. & Co. ").
525. " Clark v. German Mut. Fire Ins.
" Anglo-Calif ornian Bank v. Co., 7 Mo. App. 77.
384
§ 447-§ 468] CHANGE OF NAME § 466
company's name without the addition of the word "limited,"
an insertion of the words "if Hmited" in the appHcation was
held insufficient to import a condition into the subscription, on
the ground that the name of the company charged the apphcant
with notice that the company was not limited.' This decision
was certainly a harsh one, and in view of the fact that a company
may use a name other than its proper corporate name, the sound-
ness of the reasoning may well be questioned. Moreover, the
facts of the case disclosed another ground on which the decision
could be supported.
§ 466. Change of Corporate Name. — Where a corporate name
is conferred by act of the legislature, it can only be altered by
another act of the legislature. Where the company is incorpo-
rated under a general law, the name as specified in the incorpo-
ration paper can be altered only in the method, if any, provided
by statute for making alterations in the incorporation paper.^
A statute providing a method for changing the corporate name
is repealed by implication by a subsequent statute providing
another method for making any change in the incorporation
paper.' The change of name is not complete until all statu-
tory formalities, such as registration of the new name, have been
completed.^ Thus, until that time, it seems that the company
acquires no right to the exclusive use of the new name." More-
over, until that time, calls are properly made and actions brought
in the old name ; ' and until that time where the new name is so
different from the old that a casual reader would not suspect
that the same company was designated, a notice of the call given
' Perrett's Case, 15 Eq. 250. Oxford, 83 Fed. 288, 296; 28 C. C.
' As to the necessity of changing A. 404.
the corporate name when a change " Illinois Watch Case Co. v. Pear-
is made in the incorporation paper son, 140 111. 423; 31 N. E. 400; 16
that would render the old name mis- L. R. A. 429.
leading, see supra, § 150 and § 450. But see infra, as to acquiring by
' Fort Pitt B. & L. Ass'n v. Model user the right to use a trade name
Plan B. & L. Ass'n, 159 Pa. St. 308; other than the true corporate name,
28 Atl. 215. § 467.
* As to evidence proving compli- ' Shackleford, Ford & Co. v.
ancewith the statutory requirements, Dangerjield, L. R. 3 C. P. 407.
Bee WhUman v. National Bank of
VOL. I.— 25 385
§ 466 CORPORATE NAMES [ChAP. VIII
in the new name would, it seems, bind pnly those shareholders
having knowledge of the change.' It has been held that the
regularity of proceedings to effect a change in the corporate
name cannot be impugned collaterally in a suit to which the
corporation is a party.^ Where a statute authorizes a change
of corporate name only with the consent of a court, the
matter is discretionary with the judge, and he may withhold
his consent if the new name resembles somewhat the name
of another corcipany, even though the resemblance be not so
close as to give the latter company an absolute right to pre-
vent the use of the proposed new name.^ Of course a change
of name does not affect the identity of the corporation.' It
has been said that where the name of a corporation is
changed, an action against it by its former name is not
irregular ; ^ but the correctness of this assertion is to say
the least open to grave doubt," unless the change of name
took place after the action was begun.'' An unauthorized
attempt to change the corporate name does not dissolve the
' Shackleford, Ford & Co. v. on changing its name is not required
Darejrer/ieZdjL.R.SC. P.407,411,412. under the domestic law to make a,
' International Savings, etc. Co. new designation of an agent for
V. Stenger, 31 Pa. Sup. Ct. 294. Cf. service of process); Watts v. Port
supra, § 157. Deposit, 46 Md. 500.
' United States Mercantile, etc. But see Robinson v. First No-
Agency, 115 N. Y. 176; 21 N. E. tional Bank (Tex.), 79 S. W. 103;
1034. State ex rel. Osborne v. Nichols, 38
* Allen v. North Des Moines Wash. 309; 80 Pac. 462 (statute
M. E. Church, 102 N. W. 808; 127 providing that no company "here-
lowa 96; 109 Am. St. Rep. 366; 69 after organized" under any other
L. R. A. 255 (semble); WUhite v. statute should use the word "trust"
Convent of Good Shepherd, 78 S. W. as part of its name applied to a
138; 25 Ky. L. Rep. 1375; South change of name by a company pre-
Carolina Mutual Ins. Co. v. Price, viously incorporated under another
67 S. Car. 207; 45 S. E. 173; Wright law).
Cmsar Tobacco Co. v. A. Hoen & Co. ^ WUhite v. Convent of Good
(Va.), 54 S. E. 309; BuckspoH, etc. Shepherd, 78 S. W. 138; 25 Ky. L.
R. R. Co. v. Buck, 68 Me. 81, 84-85; Rep. 1375.
Howard v. Glenn, 85 Ga. 238; 11 ° See Delaware, etc. R. R. Co. v.
S. E. 610; 21 Am. St. Rep. 156; hick, 23 N. J. Law 321, 327; Gray
Priest v. Glenn, 51 Fed. 400; 2 C. C. v. Monongahda Nav. Co., 2 Watts
A. 305; Young v. South Tradegar & S. (Pa.) 156, 162; 37 Am. Dec.
Iron Co., 85 Tenn. 189, 201 (head- 600; Young v. South Tradegar Irort
note inadequate); 2 S. W. 202; Co., 85 Tenn. 189, 201-202; 2 S. W.
4 Am. St. Rep. 752; Cable Co. v. 202; 4 Am. St. Rep. 752.
Rathgeber (S. Dak.), 113 N. W. 88 '■ East Tennessee, etc. R. R. Co.
(holding that foreign corporation v. Evans, 6 Heisk. (Tenn.) 607.
386
§ 447-§ 468] ASSIGNMENT OF NAME § 468
corporate existence or affect the right to cany on business
under the old name.'
§ 467. User of Name other than Corporate Name. — A corpora-
tion may by user acquire a trade or business name differing from
its corporate name, and may by injunction protect such business
name to the same extent as an individual might do in a similar
case.^ This is true even though the user of such trade name is
in contravention of a statute requiring the names of all incorpo-
rated limited-liability companies to contain the word " Limited." ^
Consequently a corporation may adopt and use the name of a
former partnership of which one of its officers was a member,
and the fact of such adoption will be sufficient to render a prom-
issory note made in the firm name binding upon the corpora-
tion.* Of course the adoption and user of a trade name other
than the corporate name does not alter the legal corporate name ;
and hence an action brought in such adopted name should, if
the irregularity be properly pleaded, abate.^
§ 468. Assignment of Right to Use Corporate Name. — A vol-
untary assignment by a corporation of the right to use its corpo-
rate name has been held ultra vires and void." But an assignment
for valuable consideration, by the procuration and with the assent
of the individual whose name forms part of the corporate name
sought to be transferred, has been held to be effective.'' More-
' Richards v. Minnesota Sav. fatal variance); Robinson v. First
Bank, 75 Minn. 196, 205 (headnote Nat. Bank (Tex.), 79 S. W. 103 (a
inadequate) ; 77 N. W. 822 ; O'Dort- startling decision holding that if the
nell V. Johns, 76 Tex. 362. members of a corporation carry on
^ Philadelphia, etc. Trust Co. v. business under a name different from
PhiladelphiaTrustCo., 123Fed. 534; the corporate name, they become
H. E. Randall, L't'd v. British & liable as partners).
American Shoe Co. (1902), 2 Ch. ' H. E. Randall, L't'd v. British
354. & American Shoe Co. (1902), 2 Ch.
Cf. Charles S. Higgins Co. v. 354.
Higgins Soap Co., 144 N. Y. 462; * Conro v. Port Henry Iron Co.,
39 N. E. 490 ; 3 Am. St. Rep. 769 ; 12 Barb. (N. Y.) 27, 55-56.
27 L. R. A. 42 ; People v. Rose, 219 ' C. D. & M. Co. v. Keisel, 43
111.46; 76N. E. 42. Iowa 39.
But see Sykes v. People, 132 111. " Armington v. Palmer, 21 R. I.
32; 23 N. E. 391 (upon a prosecu- 109; 42 Atl. 308; 79 Am. St. Rep.
tion for false pretences proof that 786; 43 L. R. A. 95.
the name of the defrauded com- ' Lamb Knit Goods Co. v. Lamb
pany as stated in the indictment Glove & Mitten Co., 120 Mich. 159;
was a popular, trade name and not 78 N. W. 1072.
the legal corporate name held a But see State ex rd. Bradford v.
387
§ 468 CORPOEATK NAMES [ChAP. VIII
over, the right to use the corporate name^may pass to purchasers
in reorganization proceedings/ or to an assignee for the benefit
of creditors and from him to his grantee.^ An assignment by a
corporation of the right to use the corporate name does not
entitle the purchasers to an injunction restraining individual
shareholders, whose own names form part of the corporate
name and who as shareholders have received the benefit of the
consideration for the assignment, from establishing a rival
business under their own names.'
Western Irrigating Co., 40 Kans. 96, Marvin Co. v. Hall's Safe Co., 208
99 (headnote inadequate); 19 Pac. U. S. 554.
349; 10 Am. St. Rep. 166. ' Lothrop Pvb. Co. v. Lothrop,
• Peck Bros. & Co. v. Peck Bros. etc. Co., 191 Mass. 353.
Co., 113 Fed. 291; 51 C. C. A. 251. ' Donnell v. Herring-Hall-Marvin
Cf. Union MiUs v. Harder, 116 N. Y. Co., 208 U. S. 267.
App. Div. 22. Cf. Hernng-HaU-
388
CHAPTER IX
CORPORATE SEALS
Section
When a corporation must use a seal 469-477
Nature of seals in general — reasons for holding a corporation
bound by its seal 469
Doctrine that a corporation can be-bound only by its seal . . 470-477
Reason for doctrine . 470
Cessation of the reason for the doctrine 471
Survival of the doctrine after the reason had ceased . . . 472
Modem Enghsh rule 473
Modem American rule 474
Seal as substitute for an oath 475
Statutory and other provisions reqmring certain contracts
to be under seal 476
Survivals of some consequences of old rule 477
What is the corporate seal ... 478-482
Custom of corporations to have their own seals for use on all
occasions 478
How corporate seal is adopted or altered 479
Whether corporation may have several corporate seals at same
time 480
Adoption of seal for particular transaction — use of other than
corporate seal . 481
Seal used must be adopted as seal of the company and
not as the seal of the oflBcer or agent affixing it . . . 482
Authority to affix corporate seal — how conferred 483
Whether deed of a corporation requires deUvery 484
Effect of use of seal by a corporation . . 485-486
Instrument under corporate seal a specialty 485
Whether sealed contract of a corporation requires a considera^
tion . - 486
Proof of deeds of corporations 487-490
How seal proved to be corporate seal 487
Signature and counter-signature by officers 488
Of the presumption that seal attached to instrument duly
signed on behalf of corporation is seal of corporation . . 489
Proof that seal was affixed by competent authority — pre-
sumptions 490
Statutes regulating method of execution of deeds of corporations . . 491
Acknowledgment of deeds of corporations 492
389
§ 469 CORPORATE SEALS [ChAP. IX
§ 469-§ 477. WHEN A CORPORATION MUST USE A SEAL.
§ 469. Nature of Seals in general — Reasons for holding a Cor-
poration bound by its Seal. — The law of seals and sealed in-
struments contains embedded in it many curious bits of history,
and none more quaint and interesting than those connected with
the subject of corporate seals. In former days, each individual
had his own peculiar seal or signet which was used for purposes
of identification much as signatures are to-day, and every seal
was supposed to possess a peculiar virtue and efficacy, so that in
the earliest times of our legal history if a man's own proper seal
were affixed to an instrument he was bound thereby even though
the seal was attached without his authority.' A corporation
being an intangible, fictitious legal entity, could neither speak
nor write, but it might own a seal, which should have this pecu-
liar virtue and efficacy. Since it was not the act of seaUng but
the ownership of the seal which in those days bound the obUgor
in a sealed instrument, the corporation, although it had no hands
with which it could affix a seal, yet being capable of owning a
seal might be bound thereby. Hence it was that the common
seal was regarded as of the very essence of a corporation and as
constituting the very symbol of the union between its members.
This mediaeval notion no doubt savored of scholasticism, but it
was logical, and harmonized with the doctrines once prevalent
as to seals in general as well as with the conception of a corpora-
tion as an imaginary legal entity.
§ 470- § 477. Of the Doctrine that a Corporation can be bound
only by its Seal.
§ 470. Reasons for Doctrine. — A consequence of this theory
of a corporation, consistently carried out, was that a body corpo-
rate could act and contract in no other way than by the use of its
seal. It could not speak, for it had no mouth. It could not write,
for it had no hands. It could not make a contract resting for its
validity on a "meeting of minds," for it had no mind. It could
be bound only by the talismanic virtue of its seal.
§ 471. Cessation of Reason for Doctrine. — This doctrine was
not merely inconvenient in practice, but also, as the law devel-
' 1 Pollock & Maitland's ffist. of Eng. Law, 490.
390
§ 469- § 492] NECESSITY FOR SEAL § 473
oped, became illogical in theory. For as time went on, the
ancient strictness of the law of seals broke down; and it came
to pass that a seal was no longer regarded as possessing in itself
the peculiar efficacy and virtue to which we have referred. A
man was no longer bound because his own proper seal was
affixed; it became necessary to show that the seal was affixed
by him or by his authority. When this innovation became
established, there was no longer any reason for holding that a
corporation could contract by the use of its seal any more than
in any other way. For, if a seal was not binding unless intention-
ally affixed, how was a corporation to be bound by its seal since
it had no mind capable of entertaining an intent to affix the
same?
§ 472. Survival of Doctrine after Reason had Ceased. — This
difficulty, of course, never troubled the courts. They continued
to hold that a corporation could be bound by a contract under its
seal, and also, with unconscious inconsistency, that it could be
bound in no other way. Thus, this relic of medisevalism survived
after its logical harmony with other parts of the law — its only
merit — had passed away. Under those circumstances, it was
inevitable that the time-honored rule itself that a corporation
could contract only under its common seal, excessively incon-
venient as it was, should begin to break down.
§ 473. Modern English Rule. — Nevertheless, in England,
the old mediaeval rule has not been completely abrogated by
the courts. To be sure, with respect to corporations formed
under the Companies Acts, which constitute the great bulk of
modern English corporations engaged in mercantile or financial
enterprises, the old rule has been abolished by express statute.
That is to say, the Companies Act of 1867 enacts in substance
that corporations governed thereby shall be bound by their
simple contracts to the same extent as individuals, and that a
corporation need use a seal only when an individual would be
obliged to do so.^ But as to other, corporations — such as
municipal corporations — the old rule is kept up,^ subject,
however, to certain exceptions.' As the whole doctrine has been
' 30 & 31 Vict. c. 131, § 37. v. Toronto MUk Co., 5 Ont. L.
' See Lawford v. BUlericay Rural Rep. 1.
Dist. Council (1903), 1 K. B. 772. ' See 1 Lindley on Companies,
As to the Canadian law see Bimey 6th ed., 271-273, and infra, § 476.
391
§ 474 CORPORATE SEALS [ChAP. IX
fortunately done away with in America, and also in England as
to practically all business corporations, a detailed considei^tion
of these exceptions is unnecessary.
§ 474. Modern American Rule. — It is unnecessary to
narrate in detail the various steps by which in America the
courts gradually dispensed with the rule that corporations could
act only by the use of the corporate seals. Suffice it to say that
at the present time in America nothing whatever is left of the
old rule. In the United States, the law is well settled, by judicial
decision without the aid of any statute, that a corporation may
enter into simple contracts, either oral or in writing, either
express or impUed in fact, or implied in law; and that a seal is
indispensable in the case of a corporation only when by reason
of the nature of the instrument it would be requisite in the case
of an individual.' When by our legal imagination we conjure
up a fictitious legal person called a corporation, the imagination
must be capable of the additional strain of endowing it not
merely with hands to write,^ but with a mind to intend and to
contract. Hence, a statute dispensing with the necessity for
attaching a seal to certain instruments which were required at
common law to be under seal appUes to corporations as well as
to individuals.' The absence of the corporate seal from any
instrument which is not required by law to be under seal is not
even a suspicious circumstance sufficient to give warning that the
agent who executed the instrument had no authority from the
corporation to do so.*
' Bank of the Metropolis v. Gutt- V. S. v. Dandridge, 12 Wheat. 64
scfdick, 14 Pet. 19; Union Bank v. (Marshall, C. J., dissenting); Union
Bidgely, 1 H. & G. (Md.) 324; St. Bank v. Ridgely, 1 H. & G. (Md.)
Clair V. RuUedge, 115 Wise. 583; 324.
Griffing Bros. Co. v. Winfield (Fla.), ^ Ismon v. Loder, 97 N. W. 769;
43 So. 687; Crowley v. Genesee 135 Mich. 345.
Mining Co., 55 Cal. 273; Banks v. But see Savannah, etc. R. R. Co.
Poitiaux, 3 Rand. (Va.), 136; 15 v. Lancaster, 62 Ala. 555, 564 (head-
Am. Dec. 706 ; 1 Morawetz on Priv. note inadequate).
Corps., § 338. As to a statute dispensing with
But see St. Joseph's, etc. Soc. v. the necessity for the use of a seal
St. Hedwig's Church, 50 Atl. 535; except in the case of a corporation,
3 Penn. (Del.) 229. see Strop v. Hughes (Mo.), 101 S.
' Chief Justice Marshall's illogi- W. 146; Pvllis v. PuUis, 157 Mo.
cal and historically indefensible doc- 565; 57 S. W. 1095; Garrett v. Bel-
trine that although a seal is not re- montLand Co. (Tenn.), 29 S. W. 726;
quired a writing is necessary has 94 Tenn. 459.
never been accepted. See Bank of * Cook v. Am. Tubing, etc. Co. (R.
392
§ 469-§ 492] NECESSITY FOB SEAL § 475
§ 475. Seal as Substitute for an Oath. — In one or two in-
stances, dependent, however, upon special historical reasons, a
corporation must still use a seal where an individual would not
be required to do so. For instance, except where the rule has
been altered by statute, an answer of a corporation to a bill in
equity must be under the corporate seal.' In this case, how-
ever, the seal is required as a substitute for an oath which was
necessary where the defendant was an individual. To be sure,
the seal was a poor substitute for an oath, but according to
the mediaeval mind it was the best that could be found.^ The
expedient of requiring an oath by the president, or other ex-
ecutive officer of the corporation familiar with its affairs, seems
not to have occurred to lawyers of former days, but in a
similar case not concluded by ancient -precedent would be un-
doubtedly adopted by modern lawyers and judges in prefer-
ence to the fictitious solemnity of the seal.' On principle, the
argument might well be accepted that modern statutes dis-
I.), 65 Atl. 641 ; Sheifidd v. Johnson Co., 27 App. D. C. 59, 63 (semble)
County Sav. Bank (Ga.), 58 S. E. 386. Chequasset Lumber Co., 112 Fed. 56;
Cf. Templeton v. Hayward, 65 111. Payette Land Co. v. Louisville, etc.
178. R. B. Co., 93 Va. 274; 24 S. E. 1016;
'■ Williams Co. v. U. S. Baking Norwich Pharmacol Co. v. Abaly
Co., 86 Md. 475; 38 Atl. 990; State (Wise), 113 N. W. 962.
V. Florida Central R. R. Co., 15 Fla. Cf. the modem practice, referred
690, 697; Cfildersleeve v. Wolf to in Langdell on Equity Pleading,
Island Ry., etc. Co., 3 Ch. Chamber 2d ed., pp. 83-84, of making one or
Efip. (Ont.) 358 (holding also that the more officers co-defendants with the
company's solicitor has no authority corporation for the purpose of get-
to affix the seal). ting discovery from them. See also
Any seal — for example, a mere as to this practice Roanoke Street
wafer — adopted for this particular Ry. Co. v. Hicks, 32 S. E. 295; 96
purpose will as in other cases serve Va. 510 (holding that bill for discov-
as well as the regular common seal ; ery cannot be maintained against a
Ransom v. Stonington Sav. Bank, 2 corporation since it cannot answer
Beasl. (N. J.) 212. under oath, and that if discovery is
" But an answer of a corporation desired an officer must be made de-
under its seal does not have the same f endant notwithstanding the usual
effect as evidence as the sworn an- rule that a, mere witness cannot be
swer of an individual defendant: made defendant in order to get dis-
Maryland, etc. Iron Co. v. Wingert, covery from him); Nixon v. Clear
8 Gill (Md.) 170, 178; Lovett v. Creefc iwrnber Co. (Ala.), 43 So. 805.
Steam Saw Mill Ass'n, 6 Paige (N. So also, a corporation's bill for an
Y.) 54, 58-59; Langdell on Eqtiity injunction is to be verified rather by
Pleading, 2d ed., p. 84. the affidavit of an officer than by the
' E. g. Jacobs V. Mexican Sugar corporate seal; George's Creek Co. v.
Refining Co., 112 N. Y. App. Div. Detmold, 1 Md. Ch. 371, 381-382
657; Martin v. Martin & Browne (affidavit of treasurer).
393
§ 476 COBPOKATE SEALS [ChAP. IX
pensing with the necessity of sworn answers to bills in equity
should by implication relieve corporation defendants from the
requirement of a seal; but the courts have not adopted this
view.' Of course, pleadings of a corporation other than an
answer in equity, either at law or in equity, are hot required to
be under the corporate seal.^ The only possible exception
would have been pleas in abatement and the like which in the
case of an individual would be required to be sworn to.
§ 476. Statutory and other Provisions requiring certain Con-
tracts of Corporations to be under Seal. — Even where some partic-
ular kind of contract is, by a company's special act of incorpora-
tion, or by the incorporation paper, specifically required to be
under seal, some American courts hold that a contract of that
sort may nevertheless be binding although not under seal, the
provision being construed as directory in nature.' Other
American authorities, however, reach a different conclusion.*
In England, this precise question must arise, if at all, under
somewhat different conditions. In that country, a statute
requiring certain contracts of companies to be under seal would
• Williams Co. v. U. S. Baking 345; 15 Am. Rep. 612; New Eng-
Co., 86 Md. 475; 38 Atl. 990 (where land Fire, etc. Ins. Co. v. Robinson,
this argument might have been, but 25 Ind. 536; Barnes v. Ontario Bank,
apparently was not advanced by the 19 N. Y. 152.
counsel for the losing side). * Ldndauer v. Ddaware Mvt.
' Washington Nat., etc. Ass'n v. Safety Ins. Co., 13 Ark. 461.
Buser (W. Va.), 57 So. E. 40 (bill in Cf. Allen v. Brown, 6 Kans. App.
equity); George's Creek Co. v. Dei- 704; 50 Pac. 505; Foidke v. San
mold, 1 Md. Ch. 371 (bill for injunc- Diego, etc. B. R. Co., 51 Cal. 365
tion). (statute providing that no contract
Cape Sahle Company's Case, 3 of the company shall be binding un-
Bland Ch. (Md.) 606, 610-613, hold- less in writing held to apply only to
ing that authority to confess judg- wholly executory contracts) ; Pixley
ment must be under the corporate v. Western Pacific R. R. Co., 33 Cal.
seal, would not be followed at the 183 (same point as last case) ; Curtis
present day. See Ford v. Hill, 92 v. Piedmont Lumher, etc. Co., 109
Wise. 188, 198; 66 N. W. 115; 53 N. Car. 401; 13 S. E. 944 (similar
Am. St. Rep. 902 ; Thew v. Porce- point to that of last case) ; Clowe v.
lain Mfg. Co., 5 S. Car. 415, 428. Pine Product Co., 114 N. Car. 304;
' Cahill v. Maryland Life Ins. 19 S. E. 153 (similar point to that
Co., 90 Md. 333, 346-347; 45 Atl. of last two cases) ; Roberts v. Deming
180; 47 L. R. A. 614. Woodworking Co., Ill N. Car. 432;
Cf. Norwich Yarn Co., 22 Beav. 16 S. E. 415 (applying the same stat-
143 (clause in deed of settlement re- ute involved in last two cases) ; Head
quiring all cheques to be signed v. Providence Ins. Co., 2 Cranch 127,
by three directors held directory); 167-169.
Dayton Ins. Co. v. Kelly, 24 Oh. St.
394
§ 469-§ 492] NECESSITY FOB SEAL § 477
be regarded merely as reverting fro hoc vice to the rule of
English common law whereby all contracts were required to be
under seal. In any such case, therefore, an unsealed contract
would be void.' The tendency of the English courts in other
cases is to regard as merely directory regulations in a statute
or in a company's memorandum or articles prescribing a
certain form for contracts of tte company.^ Even if the pro-
vision be held to be mandatory, failure to comply while fatal at
law might not have the same effect in all circumstances in equity.
Thus, where a contract is required to be under seal either by
the English common law rule, or probably by a statute, never-
theless if the subject-matter and circumstances are such that
specific performance might be decreed if the parties were
individuals, a court of equity, if the contract although not
under seal has been partly performed, may decree specific
performance.' The mere fact that because of the absence of a
seal the contract is unenforceable at law is no ground for equi-
table intervention.* According to the latest authority, the.
absence of a seal will not prevent a recovery against the cor-
poration, even at law, if the contract has been fully performed
by the other party.*
§ 477. Survivals of some Consequences of old Rule. — Whilst
with such merely apparent exceptions as are noted in a former
paragraph, there is nothing left in the United States of the rule
that a corporation can act and contract only under its seal, yet
some of the consequences and corollaries of the old doctrine
still survive. For instance, corporations still are accustomed to
afiix their seals to all their more important contracts, although
individuals in making similar contracts would be much less
' Crampton v. Varna Ry. Co., 7 Laird v. Birkenhead Ry. Co., Johns.
Ch. 562 (semble). 500; London & Birmingham Ry. Co.
' Cf . Prince of Wales' Co. v. Hard- v. Winter, Cr. & Ph. 57 ; Stevens
ing, E., B. & E. 183; Norwich Yarn Hospital v. Dyas, 15 Ir. Ch. 405;
Co., 22 Beav. 143 (provision requir- Marshall v. Corporation of Queens-
ing cheques to be signed by three borough, 1 Sim. & Stu. 520; Max-
directors) ; Ridley v. Plymouth Bah- well v. Dulwich College, 7 Sim. 222 n. ;
ing Co., 2 Ex. 711. 1 Lindley on Companies, 6th ed., 272.
' Crook V. Seaford, 6 Ch. 551; * Crampton v. Varna Ry. Co., 7
Melbourne Banking Corp. v. Ch. 562.
Brougham, 4 A. C. 156, 168-169 ; ' Lawford v. BiUericay Rural Dis-
WUson V. West Hartlepool Ry. Co., 2 trict Council (1903), 1 K. B. 772.
De G. & Sm. 475; Earl of Lindsey v. But see 1 Lindley on Companies, 6
Great Northern Ry. Co., 10 Hare 664; ed., 270.
395
§ 478 COHPORATE SEALS . [ChAP. IX
likely so to do. Moreover, the law of sealed instruments executed
by corporations differs in some respects, which will be presently
considered in detail, from the law of specialties executed by
individuals.
§ 478-§ 482. What is the Corporate Seal.
§ 478. Practice of Corporations to have their own Seals for use
on all Occasions. — In ancient times, each individual had his
own seal or signet, and each corporation naturally did the Uke.
Nowadays, an individual never thinks of having his own seal to
affix to all legal documents, but whenever he has occasion to
execute a specialty adopts a seal for the purpose. Every well
organized corporation, however, still has its own seal of some
pecuUar device with which it executes all instruments requiring a
seal.'
§ 479. How Corporate Seal is adopted or altered. — Some gen-
eral incorporation laws require a description of the corporate
seal to be inserted in the memorandum of association or incorpo-
ration paper ; ' but more generally the directors after the
organization of the company adopt a seal of a particular descrip-
tion as the company's common seal. Possibly, where the seal
is adopted in and by the incorporation paper, no other seal
could be adopted by the company. But ordinarily the com-
pany has power to alter its seal at pleasure. A seal may be
adopted by usage without a formal resolution of adoption.^
§ 480. Whether Corporation may have several Corporate Seals
at same Time. — In England, apparently, the corporate seal
consists in an impression of a particular stamp or die which is
carefully kept at the company's principal of^ce, and without
this no instrument is deemed to be the deed of the company.
To enable a company to keep in different places several duplicate
stamps or dies an impression from any one of which shall con-
stitute the corporate seal, express statutory sanction seems to
have been thought necessary.* The statute referred to ^ author-
' As to the distinction between a ' Mickey v. Stratton, 5 Sa'W'y.
"common seal" or corporate seal 475 (headnote inadequate); McRae
and a single piece of wax adopted by v. Corhett, 6 Manitoba 42B.
each of several persons as his seal, * Cf. WoodhUl v. Sidlivan, 14 C. P.
see Cooch v. Goodman, 2 Q. B. 580. (Up. Can.) 265, 272.
' Vawter v. Franklin College, 53 * Companies Seals Act, 1864;
Ind. 88. 27 Vict., c. 19.
396
§ 469-§ 492] ADOPTION of seal § 481
izes British corporations doing business in foreign countries to
keep abroad duplicate stamps of their seals. The idea that this
statute was necessary must have originated in a doubt whether
at common law a corporation could at any one time have more
than one stamp for its seal. But this doubt is without foundation
in reasons applicable to modern conditions of the law or even in
historical considerations; and in the United States the practice
is constantly followed without any statutory sanction.
§481. Adoption of Seal for particular Transaction — Use of
other than Corporate Seal. — Since a corporation may alter its
seal at pleasure, it may adopt a seal for a particular transaction.'
Accordingly, in jurisdictions where a mere scroll or flourish of
the pen is treated as a seal, a corporation may in executing an
instrument adopt as its seal fro hoc vice a mere scroll ^ or a
printed jac simile of an impression of its regular seal. Even if
the corporation has a regular common seal, the power of the
company itself or of its directors to adopt a different seal for a
particular purpose is not open to question.' A fortiori, the use
of the letters " L. S. " in the record of a deed in a public registry
is a sufficient indication, if the grantor be a corporation, that the
deed was under the corporate seal.* Even where a statute pro-
vides that every company shall have its name "engraved" in
legible characters upon its seal, a seal consisting of a piece of
adhesive paper with the corporate name printed thereon may
' MiU Dam Foundry v.Howey, 21 43 N. H. 343; Sarmiento v. Boat &
Pick. (Mass.) 417, 428; Porter v. Oar Co., 105 Mich. 300; 63 N. W.
Androscoggin, etc. R. B. Co., 37 Me. 205; 55 Am. St. Rep. 446 (where the
349. objection that a statute had de-
As to the effect of a failure of a prived corporations of this power
corporate seal to comply with a was overruled) ; District of Colum-
statutory form: City of Defiance v. bia v. Camden Iron Works, 181 U. S.
Schmidt, 123 Fed. 1; 59 C. C. A. 159. 453; 21 Sup. Ct. 680; G. V. B. Min~
" Jacksonville, etc. Ry. Co. v. ing Co. v. First Nat. Bank, 95 Fed.
Hooper, 160 U. S. 514 (headnotein- 23; 36 C. C. A. 633 (notwithstand-
adequate); 16 Sup. Ct. 379. ing by-laws requiring the regular
' "Although it be a Corporation corporate seal to be affixed),
"that doth make the deed, yet they Cf. Stebbins v. Merritt, 10 Cush.
may seale with any other seal be- (Mass.) 27, 34-35; South Baptist
sides their common seale, and the Soc. v. Clapp, 35 Barb. (N. Y.) 35,
deed never the worse." Touch- 49.
stone of Common Assurances, 57. But see Savings Bank v. Davis,
Accord: Bank of Middlebury v. 8 Conn. 191.
Rutland, etc. R. R. Co., 30 Vt. 159; * Altschid v. Casey, 76 Pac. 1083;
Tenney v. East Warren Lumber Co., 45 Oreg. 182.
397
§ 482 COEPOKATE SEALS [ChAP. IX
be a good seal.' But when a corporation has a regular stamp
for its corporate seal, does any officer or agent who has authority
to affix that seal also possess authority to adopt some other seal,
such as a scroll, as the seal of the corporation for a particular
purpose ? Logically, perhaps he does not, but the courts at this
day would be unlikely to hold an instrument void on that ground.^
The circumstance, however, that a mere printed representation
of a seal, instead of an impression of the regular corporate seal is
annexed to a paper may be sufficient evidence, especially when
coupled with other facts tending in the same direction, to justify
the court in holding, even in jurisdictions where a scroll is a good
seal, that the emblem or print was not intended as a seal.^
§ 482. Seal must he adopted as Seal of Corporation and not
as Seal of Officer or Agent affixing it. — Of course, in order that
a corporation may be bound by a deed as a party thereto, the
seal must be that of the corporation, and must have been
adopted as such either generally or for that particular purpose.
Hence, if the private seals of the members are attached, the
instrument is not the deed of the corporation.* In determining
whether the seal affixed to a paper is to be deemed the seal of
the corporation or of the agent by whom the instrument was
executed, the same considerations control as in any other case of
principal and agent, except that the fact that a corporation has
a regular seal which is not used may be some evidence that the
• Hoe V. Lee, 3 N. So. Wales State St. Andrew's Bay Land Co., 4 Fla.
Rep. 30. 200.
' Sarmiento v. Davis Boat & Oar But see Taylor v. Heggie, 83 N.
Co., 105 Mich. 300; 63 N. W. 205; Car. 244; Johnston v. Crawley, 25
55 Am. St. Rep. 446. Ga. 316 (headnote inadequate); 71
But see Savings Bank v. Davis, 8 Am. Dec. 173.
Comi. 191, 206. Cf. Ismon v. Loder, 97 N. W. 769;
' Jackson v. Myers, 43 Md. 452; 135 Mich. 345; Harvey v. Board of
Mvth V. Dolfield, 43 Md. 466. Trustees, 142 Cal. 391; 75 Pao. 1086;
See infra, § 485. District of Columbia v. Camden Iron
* Bank of Columbia v. Patterson, Works, 181 U. S. 453; 21 Sup. Ct. 680.
7 Cranch 299, 304 (headnote inade- In WUey v. Board of Edv/:ation,
quate); Randall v. Van Vechten, 11 Minn. 371, the court held an aver-
19 Johns. (N. Y.) 60; 10 Am. ment' that the corporation by its
Dec. 193; Tippets v. Walker, 4 duly elected and qualified officers un-
Mass. 595; Brinley v. Mann, 2 der their hands and seals had exe-
Cush. (Mass.) 337; 48 Am. Dec. cuted an instrument to be on de-
669; Osborne v. Tunis, 25 N. J. murrer a sufficient allegation of
Law 633; Taftv. Brewster, 9 Johns, execution by the corporation; sed
334; 6 Am. Dec. 280; MitchM v. qtuBredehoc.
398
§ 469-§ 492], AUTHORITY TO AFFIX § 483
seal actually affixed was rather to be deemed that of the agent-
Moreover, the mere fact that an impression of the corporate seal
was made opposite the name of each agent who signed the paper
on the company's behalf does not show that the seal was intended
as the private seal of the agents rather than the common seal of
the corporation.'
§ 483. Authority to affix Corporate Seal — How conferred. —
Since a corporation, being an intangible legal entity, cannot act
in person, necessarily the corporate seal must be attached by
agents. If the rule that authority to affix a seal must itself be
under seal were strictly applied to corporations, no corporation
could execute a specialty. Being an imaginary entity, it could
not in proper person affix its seal either to the instrument itself
or to a power of attorney to execute the instrument. To be sure,
it might be held that the affixing of the seal at a meeting of the
directors or shareholders should be deemed' equivalent to execu-
tion by the corporation in person, while sealing by inferior agents
should require a sealed power of attorney ; and to this effect are
some English authorities.^ But this distinction has fortunately
never been taken in America; and accordingly, the law has been
generally laid down that authority to affix a corporate seal may
be conferred by parol ' or implied from the practice of the
' Jackson ex dem. Donally v. fact it was made outside by virtue of
Walsh, 3 Johns. (N. Y.) 226. a letter of attorney. It is much to
Cf. Johnston v. Crawley, 25 Ga. be regretted that Mr. Norton in his
316; 71 Am. Dec. 173; City of Kan- recent valuable treatise should have
sas v. Hannibal, etc. R. R. Co., 77 lent the weight of his authority to
Mo. 180; Tenney v. East Warren the view that a deed of a corporation
Luviber Co., 43 N. H. 343. must be executed either at a corpo-
' Cf. Mayor, etc. of Merchants rate meeting or in pursuance of a
of Staple v. Bank of England, 21 Q. sealed power of attorney. Norton
B. D. 160, 165-166, per Wills, J., on Deeds, 13. Even Mr. Norton ad-
citing Brooke's Abr. Tit. "Corp." pi. mits that by custom deeds of trad-
72, and Y. B., 9 Edw. IV, p. 39, which ing corporations may be executed
last mentioned authority hardly and delivered in pursuance of parol
bears out the inferences drawn from authority.
it, but relates rather to the question ' Hopkins v. Gallatin Turnpike
whether a deed of a convent is good, Co., 4 Humph. (Tenn.)403,411; Beck-
which on its face purports ^ to have with v. Windsor Mfg. Co., 14 Conn,
been made in the convent, when in 594; Hutchins v. Byrnes, 9 Gray
399
§ 484 CORPORATE SEALS [ChA.P. IX
company.* The question in each case is whether the officer or
agent by whom the instrument was executed had in fact authority
to affix the seal.^ It is immaterial how that authority was con-
ferred, whether expressly or impliedly, orally or in writing. A
consequence of this rule is that any agent who has authority to
affix the seal may fill up blanks in a deed after it has been sealed.^
Moreover, where a person without authority affixes the corporate
seal, his act may be ratified by parol or by mere acquiescence so
as to render the instrument binding upon the corporation as its
deed.* An act of incorporation providing that the members of
the company may "order and dispose of the custody of their
common seal and the use and application thereof" merely
empowers them to make rules for the custody of the seal, and
does not require their concurrence in each special act of sealing,
or restrain them from delegating to an agent authority to affix
the seal.* Indeed, a statute specially pointing out a rnode of con-
ferring authority to affix the corporate seal will if possible be
construed as directory so as not to exclude any method that
would have been good at common law."
§ 484. Whether Deed of a Corporation requires Delivery. —
There is an ancient legal tradition that a deed of a corporation
needs no delivery, but is complete on the affixing of the common
seal.' This tradition has been repeated in a number of modern
(Mass.) 367; Zihlman v. Cumber- Keil, 20 Minn. 531. See also infra,
land Glass Co., 74 Md. 303; 22 Atl. § 491.
271 (oral authority sufficient). ' The first appearance of this tra^
Cf. Uvalde Paving Co. v. City of dition in our books, so far as the
New York, 99 N. Y. App. Div. 327; writer is aware, is found in the argu-
91 N. Y. Supp. 131. ment of counsel for the defendant in
' Barned's Banking Co., 3 Ch. Willis v. Jermin, Cro. EUz. 167.
105; Hutchins v. Byrnes, 9 Gray The argument did not prevail with
(Mass.) 367. the court, and the supposed distinc-
" As to presumptions of author- tion between deeds of corporations
ity to affix corporate seal, see infra, and of natural persons was expressly
§ 490. disapproved by at least one of the
' Barned's Banking Co., 3 Ch. judges. The headnote to the modem
105. editions misrepresents the position
* Howe v. Keeler, 27 Conn. 538; of the court. See another report of
St. James Parish v. Newburyport, the case in 2 Leon. 97. The same
ete. ij. iJ. Co., 141 Mass. 500; 6N. E. contention was advanced by the
749. coimsel for the defendant in the Case
' HUl v. Manchester, etc. Water of ike Deane and Chapter of Femes,
Works Co., 5 B. & Ad. 866, 874. Davis 42, 44: "Et le fait de un Cor-
" Bason v. King's Mountain Min- poration ne besoigne delivery, come
ing Co., 90 N. Car. 417; Morris v. le fait de un natural person, mes le
400
§ 469-§ 492] NECESSITY FOR DELIVERY § 484
English dicta.' Perhaps, it originated in the time when the mere
use of a person's seal even without his consent and a fortiori
without delivery was, even in the case of an individual, sufficient
to make a completed deed, being kept alive by a notion that a
corporation, an intangible entity, was incapable of deUvering a
paper. However this may be, certain it is that in modern times
the supposed doctrine has no basis in reason. For the law has
long been settled that the mere affixing of the corporate seal
without the authority of the company or its duly constituted
officers or agents does not make a paper the deed of the corpora-
tion,^ so that the mere presence of the seal on the document has
no longer any talismanic virtue. Indeed, the authorities now
agree- that the doctrine that no delivery is essential applies only
when the intent is that the instrument shall operate as a com-
pleted deed from the affixing of the seal without further cere-
mony.^ Thus qualified, the supposed doctrine is not merely
illogical in its i-elation to other parts of the modern law of sealed
contracts, but is also without historic justification ; and accord-
ingly it is submitted that the whole doctrine should be thrown
overboard, and deeds of corporations placed on the same footing
with respect to the necessity for delivery as the deeds of in-
apposition del common Seale done tain Mining Co., 90 N. Car. 417, 421
perfection a ceo solement." It will (semble).
be noticed that judgment was given But see Mayor, etc. of Merchants
for the plaintiff; but the passage of the Staple v. Bank of England, 21
quoted has often been referred to Q. B. D. 160, 165-166 (where Wills,
with approval as though it were the J., said that a deed of a corporation
decision of the court. requires delivery and that the de-
See Roll. Abr. Tit. Fait (I), p. 23, livery must take place at a meeting
I. 50; 4 Cruise Dig. tit. XXXII. ch. of the corporation unless there be a
II, § 70; Grant on Corporations, 63, power of attorney to effect the
147-148; Angell & Ames on Corps., delivery).
ch. VII, § 9 ; 4 Thompson, Comm. on ' Anonynious, 12 Mod. 423, Case
Corps., § 5093. The supposed doc- 728, per Holt, C. J.; Case of the
trine, however, has never been made Deane and Chapter of Femes, Davis
the basis of an actual decision in any 43 ; Mayor, etc. of Merchants of the
reported case. Moreover, in the Staple v. Bank of England, 21 Q. B.
time of Edward IV, it seems to have D. 160.
been assumed that the deed of a cor- ' Derby Canal v. WUmot, 9 East
poration, like the deed of a natural 360; Gartside v. SUkstone, etc. Co.,
person, requires delivery. Y. B. 9 21 Ch. D. 762, 768.
Edw. IV, p. 39. Cf. Wiilis v. Jermin, Cro. Eliz.
' Derby Canal v. WUmot, 9 East, 167; s. c, 2 Leon. 97; Anonyrrums,
360; Gartside v. SUkstone, etc. Co., 1 Ventr. 257; Good v. Ash, 3 Keb.
21 Ch. D. 762, 768. 307.
See also Bason v. King's Moun-
VOL. I. — 26 401
§ 485 CORPORATE SEALS [ChAP. IX
dividuals. That this result would be reached in the United
States there can be little or no doubt/ and indeed even in
England it appears to have been virtually attained in the latest
case upon the subject.^ As the time-honored doctrine is sup-
ported only by a concatenation of dicta originating in an argu-
ment of a losing counsel, the courts need hesitate the less in
putting the law on a modern basis.'
§ 485-§ 486. Ejfect of Use of Seal by a Corpcyration.
§ 485. Instrument under Corporate Seal a Specialty. — The
effect of attaching a seal to an instrument executed by a corpora-
tion is precisely the same as if the maker had been an individual.*
To be sure, an idea is prevalent that the affixture of the corporate
seal is merely a corporation's way of signing its name ; but this
notion, it is submitted, is not correct. The distinction between
parol contracts and instruments under seal is not obliterated in
the case of corporations. A contract under the corporate seal is
a specialty: the form of action thereon, where forms of action
still exist, must be debt or covenant and not assumpsit ; ^ and
the statute of limitations is that applicable to sealed instead of
unsealed contracts. It is true that bonds and debentures under
the corporate seal are negotiable while the presence of a seal is
fatal to the negotiability of an individual's note or bill. But this
distinction properly rests on the custom of merchants, which
' Cf. Holmes v. Salamanca Gold, * Clark v. Farmers Mfg. Co., 15
etc. Co. (Cal.), 91 Pac. 160 (where a "Wend. (N. Y.) 256.
deed executed by a corporation was " Porter v. Androscoggin, etc. B.
held ineffective for want of delivery R. Co., 37 Me. 349; Brown v. Com-
but without discussion of the point mercial Fire Ins. Co., 21 App. D. C.
now under consideration). See, 325, 335 (semble); Marine Ins. Co.
however, dictum in North Carolina v. Young, 1 Cranch 332.
case cited supra, p. 401, n. 1. But see Levering v. Mayor, etc. of
' Mowatt V. Castle Steel, etc. Co., Memphis, 7 Humph. (Tenn.) 553.
34 Ch. D. 58, 62. It is submitted that this case should
Cf. WUlis V. Jermin, Cro. Eliz. be supported upon the ground that
167, per Gawdy, J. ; s. c, 2 Leon. 97. from the nature of the paper — a
' See Norton on Deeds, 9-11, mere letter accepting a parol offer
where the learned author carefully — the court can see that the so-
discusses the English authorities and called seal affixed thereto was really
reaches the conclusion that the sup- not intended as a seal,
posed distinction between deeds of Cf . Brown v. Commercial Fire Ins.
corporations and deeds of Individ- Co., 21 App. D. C. 325, 335-337.
uals is baseless and should not be
applied by the courts.
402
§ 469-§ 492]
EFFECT OF SEAL
treats such securities when issued by corporations as negotiable.'
In spite of their negotiability, they are still specialties. It is also
true that in some cases the presence of a printed representation
of a seal upon a paper executed by a corporation, even in juris-
dictions where a scroll is a good seal, has been held not to have
the effect of making the instrument a specialty.^ But these cases
should be supported upon the ground that the symbol or emblem
was never intended for the seal of the company, and do not
establish that an instrument under the corporate seal can be
treated as other than a specialty.
§ 486. Whethsr Sealed Contract of a Corporation requires a
Consideration. — A contract under seal of course requires no
consideration to support it, and this rule applies to the sealed
contracts of corporations as well as those of individuals.^ To
be sure, contracts without consideration are generally ultra
vires, and the presence of the seal does not preclude inquiry into
the question whether or not the contract was within the com-
pany's powers.* A sealed contract of a corporation is neither
more nor less binding because of the want of consideration : if
' Infra, § 1734, § 1735.
' Jackson v. Myers, 43 Md. 452;
Muth V. Dolfield, 43 Md. 466; Met-
ropolitan Life Ins. Co. v. Anderson,
79 Md. 375, 379; 29 Atl. 606.
With perhaps doubtful propriety,
the same conclusion has been reached
where the instmrnent bears an im-
press of the regular corporate seal
but does not in the body thereof
purport to be under seal. Harris
burger v. MQler, 48 Md. 317, 323;
Bank v. Railroad Co., 5 S. Car. 156;
22 Am. Rep. 12; Weeks v. Esler, 68
Hun (N. Y.) 518 ; 22 N. Y. Supp.
54 (proceeding at least in part upon
the ground that the seal was not
proved to have been affixed by due
authority).
Cf. Brown v. Commercial Fire Ins.
Co., 21 App. D. C. 325, 335-337
(where an impression of a seal in the
upper comer of .the instrument over
certain figures was held to have been
intended to protect the figures from
alteration and not as a true seal);
Mackay v. St. Mary's Church, 15
R. I. 121; 23 Atl. 108; 2 Am. St.
Rep. 881 (where a "paper seal," not
the regular corporate seal, was when
attached to a promissory note held
"a piece of unnecessary ornament").
' Royal Bank v. Grand Junction
R. R. Co., 100 Mass. 444, 445 (head-
note inadequate) ; 97 Am. Dec. 115;
Brooks, Jenkins & Co. v. Mayor, etc.
of Torquay (1902), 1 K. B. 601, 607
(headnote inadequate).
Cf. Sturtevants v. City of Alton, 3
McLean, 393, 395.
' Cf. Mayor, etc. of Norwich v.
Norfolk Ry. Co., 4 E. & B. 397, 443-
444. As the contract is under the
corporate seal and on its face bind-
ing upon the company, it would seem
that the burden of proving that the
contract was without consideration
and therefore ultra vires should rest
upon the corporation. But see 1
Morawetz on Priv. Corps., 2d ed.,
§241, where the learned author
argues in support of a contrary view
on this point.
403
§ 487 CORPORATE SEALS [ChAP. IX
vltra vires, it is according to the strict doctrines void, although
there be a consideration ; and if it be not xdtra vires, it is vaUd
though there be no consideration. The lack of consideration is
merely one circumstance usually tending to make the contract
ultra vires; but it does not necessarily do so. For instance, a
bond of a charitable corporation issued gratuitously to a needy
person would no doubt be enforceable. So, there may be many
cases in which a promise under seal even by a business corpora-
tion is not idtra vires although without such consideration as
would be technically necessary to support an assumpsit.'
§ 487- § 490. Proof of Execution of Deeds of Corporations.
§ 487. How Seal proved to be Corporate Seal. — In order to
prove an instrument to be the deed of a corporation, the seal
attached thereto must be proved to be the seal of the corporation.^
The most irrefragable proof that a seal attached to a paper is
indeed the seal of the corporation would be testimony that the
impression was made from the die kept by the company for use
as its seal in pursuance of a formal resolution of directors or
shareholders. Such proof, however, is by no means necessary.
Whether or not a mark, impression, or affixture can be deemed a
seal is a question for the court upon inspection of the instru-
ment; " but whether the seal is the seal of the corporation is a
question which, to be sure, may sometimes be determined in the
absence of other evidence from the state of the paper itself but
upon which parol evidence, such as the testimony of a person
familiar with the motto or device of the regular seal, is clearly
admissible.* In some cases, therefore, whether or not a seal, be
' Brooks, Jenkins & Co. v. Mayor, Co., 25 Pa. St. 303 (semble) ; Chew
etc. of Torquay (1902), 1 K. B. 601, v. Keck, 4 Rawle (Pa.) 163; Cfrif-
607-608 (headnote inadequate). fing Bros. Co. v. Winfield (Fla.), 43
^ Moises V. Thornton, 8 T. R. 303 ; So. 687.
Poster V. Shaw, 7 S. & R. (Pa.) 156; But see Canandarqua Academy v.
Leazure v. Hiilegas, 7 S. & R. (Pa.) McKechnie, 19 Hun (N. Y.) 62.
313, 318; Jackson ex dem. Martin ' Jacksonville, etc. Ry. Co. v.
V. Pratt, 10 Johns. (N. Y.) 381; Den Hooper, 160 U. S. 514; 16 Sup. a.
ex dem. Tours v. Vreelandt, 2 Halst. 379.
(N. J.) 381 ; Mann v. Pentz, 2 Sandf. * Leazure v. Hiilegas, 7 S. & R.
Ch. (N. Y.) 257; Crossman v. HUl- (Pa.) 313; Den v. VredavM, 2 YLaXst.
town Turnpike Co., 3 Grant's Cas. (N. J.) 352; Doe King's College v.
(Pa.) 225; Farmers', etc. Turnpike Kennedy, 5 Up. Can. Q. B. 577.
404
§ 469-§ 492] PROOF of execution § 488
it a formal seal or a mere scroll, is the seal of the corporation
must be left to the jury.^ Where a deed purporting to be sealed
with a corporate seal is offered in evidence, the jury cannot be
permitted to judge of the genuineness of the seal by comparison
with a similar seal affixed to another deed which had been
admitted in evidence without objection.^
§ 488. Signature and Counter-signature by Oflacers. — In order
to aid in proving the seal to be the seal of the corporation, it is
customary for some officer, usually the president, to sign the
paper, and for some other officer, usually the secretary, to
countersign the same. Officers so signing the deed do not
become attesting witnesses,' but sign merely for the purpose of
authentication. Thus, where, in pursuance of the usual practice
of the company, its seal is affixed to a bill of sale in the presence
of two directors who subscribe their signatures followed by the
word "Directors," they are not attesting witnesses within the
meaning of a statute requiring the addresses of attesting wit-
nesses to be given.* So, where the deed bears the subscription
"Sealed by order of the directors. J. K., Secretary," J. K. is not
an attesting witness, and therefore the execution may be proved
without calling him as a witness.^ Of course, counter-signature
by the secretary, although customary, is not essential to the
validity of the deed, even if the by-laws of the company
' Crossman v. Hilltown Turn- as the evidence that he is the person
pike Co., 3 Grant's Cas. (Pa.) 225. who has affixed the common seal to
' Cheww. Keck, 4 Rawle (Pa.) 163. the same, stands also in the charac-
' In addition to authorities cited ter of a subscribing witness to the
below, see Norton on Deeds, 21. execution of the deed by the corpora-
* Shears v. Jacobs, L. R. 1 C. P. tion"); Bowers v. Hechtman, 45
513; DeffeU v. White, L. R. 2 C. P. Minn. 238, 241-242; 47 N. W. 792
144. (where the court, although citing
" Doe ex dem. Bank of England v. with approval the dictum of Chan-
Chambers, 4 Ad. & El. 410. cellor Walworth quoted above, held
But see Coe v. New Jersey Mid- that the secretary who counter-
land Ry. Co., 31 N. J. Eq. 105, 119- signed the instrument was not a
120 (where proof by affidavit of sec- mere attesting witness and therefore
retary was held competent as proof was competent to make a statutory
by an attesting witness although an- affidavit to the execution of the
other person signed expressly as deed) ; Johnson v. Bush, 3 Barb. Ch.
attesting witness); Lovett v. Steam (N. Y.) 207, 239 (where Chancellor
Saw Mill Ass'n, 6 Paige (N. Y.) 54, Walworth declared that the secre-
60 (where Chancellor Walworth said : tary who countersigned the instru-
"The officer of the corporation en- ment was "merely an attesting
trusted with its common seal, and witness"),
who subscribes his name to the deed
405
§ 489 CORPORATE SEALS [ChAP. IX
require it/ — at any rate, not unless the other party be
proved to have notice of the by-laws. If, however, a statute
require deeds of corporations to be countersigned or
"attested" by the secretary, it has been held that the record
of a deed not so authenticated will not operate as constructive
notice.^
§ 489. Of the Presumption that Seal attached to Instrument
duly signed on behalf of Corporation is Seal of Corporation. — If
an instrument in the body thereof contemplates sealing by the
corporation, and is proved to have been subscribed on behalf of
the corporation by its president or other duly qualified officer,
and if a seal is affixed thereto purporting to be the seal of the
corporation, it will be presumed genuine in the absence of
evidence to the contrary.' Even if under circumstances similar
to the above the seal' is shown, to be not the regular corporate
seal but a mere wafer or even (in jurisdictions where a scroll
may be used as a seal) a scroll or printed emblem, it will never-
theless be presumed to have been adopted pro hoc vice as the
seal of the corporation.' This presumption, however, will not be
indulged, it seems, where from the nature of the instrument or
from other circumstances the court infers that the document
was not intended to be under seal : ^ in such cases, the printed
device or representation of a seal will be presumed to be rather a
■ Smith V. Smith, 62 111. 493. Pick. (Mass.) 417, 428; CUy of Kaiv-
' Randall Co. v. Glendenning sas v. Hannibal, etc. R. R. Co., 77
(Okl.), 92 Pac. 158. Mo. 180; Stebbins v. Merritt, 10
' Susquehanna Bridge, etc. Co. v. Cush. (Mass.) 27, 34-35 (headnote
General Ins. Co., 3 Md. 305; 56 Am. inadequate); Tenney v. East War-
Dec. 740; Phillips v. Coffee, 17 111. ren Lumber Co., 43 N. H. 343; Ben-
154; 63 Am. Dec. 357; Woodman bow v. Cook, 115 N. Car. 324; 20 S.
V. York, etc. R. R. Co., 50 Me. 549; E. 453; 44 Am. St. Rep. 454; EUi-
Wagg-Anderson Woolen Co. V. Lesher son v. Branstrator, 54 N. E. 433;
<fc Co., 78 111. App. 678; Chicago, etc. 153 Ind. 146; Griffing Bros. Co. v.
R. R. Co. V. Lewis, 53 Iowa. 101; 4 Winfield (Fla.) 43 So. 687, 689
N. W. 842. (headnote inadequate).
Cf. City Council v. Jane Moore- , Cf. Crossman v. HiMown Turn-
head, 2 Rich. Law (S. Car.) 430; pike Co., 3 Grant's Cas. (Pa.) 225;
Norton on Deeds, 21. Gashwiler v. Willis, 33 Cal. 11; 91
But see Moises v. Thornton, 8 T. Am. Dec. 607.
R. 303; Mann v. Pentz, 2 Sandf. ' Jackson v. Myers, 43 Md. 452;
Ch. (N. Y.) 257. Muth v. Dolfidd, 43 Md. 466; Me«-
* Jacksonville, etc. Ry. Co. v. ropolitan Life Ins. Co. v. Anderson,
Hooper, 160 U. S. 514, 518 (head- 79 Md. 375, 379; 29 Atl. 606. Cf.
note inadequate); 16 Sup. Ct. 379; supra, § 485.
Mill Dam Foundry v. Howey, 21
406
§ 469-§ 492]
PROOF OF EXECUTION
§ 490
mere ornament or to be used much as stamped letter-paper is
used by every business firm.
§ 490. Proof that Seal was affixed by competent Authority —
Presumptions. — In order that an instrument shall be opera-
tive as the deed of the corporation, not merely must the seal
attached be proved to be the seal of the corporation but it must
also have been affixed by proper authority.' Where the seal
was afiixed by the officer having due custody thereof, the pre-
sumption is that it was afiixed by competent authority.^ We
have seen above that such authority need not be itself under
seal.^ Accordingly, evidence that a certain agent was accustomed
to affix the seal is if uncontradicted and unexplained sufficient
evidence of authority to do so. Moreover, if the seal affixed is
shown to be an impression from the regular corporate seal, the
presumption is that it was affixed by competent authority.* The
' Koehler v. Blckck River, etc. Co.,
2 Black 715. See supra, § 471,
§ 472, § 483.
As to whether the corporation
can be estopped by negligence in the
custody of the seal from denying
that it was affixed by competent
authority, see Mayor, etc. of Mer-
chants of the Staple v. Bank of Eng-
land, 21 Q. B. D. 160; Bank of Ire-
land V. Trustees of Evans' Charities,
5 H. L. Cas. 389.
' Hopkins v. Gallatin Turnpike
Co., 4 Humph. (Tenn.) 403; Fi-
delity Ins. Co. V. Shenandoah Valley
R. Co., 32 W. Va. 244; 90 S. E. 180;
EUison V. Branstrator, 54 N. E. 433 ;
153 Ind. 146; Bliss v. Harris (Colo.),
87 Pac. 1076 (secretary the lawful
custodian of the seal); Watkins v.
Glas (Cal.), 89 Pac. 840, 843; Evans
V. Lee, 11 Nevada 194 (secretary
custodian of seal) ; Joel T. Bailey &
Co. V. Snyder Bros., 61 111. App.472
(semble, where instrument signed
by president and secretary); Mvl-
lanphy Sav. Bank v. Schott, 135 111.
655. 666 (bonds and mortgage signed
by secretary and by president);
UnderhUl v. Santa Barbara, etc. Co.,
93 Cal. 300, 314 (seal affixed by
secretary); Nelson v. Spence (Ga.),
58 S. E. 697 (deed signed by
treasurer).
Cf. Jackson v. Campbell, 5 Wend.
(N. y.) 572 (where the presumption
was rebutted); Graham v. Partes
(Ala.), 35 So. 1016; 139 Ala. 310;
101 Am. St. Rep. 32 (where the name
of the corporation was not subscribed
to the deed); Bliss v. Kaweah, etc.
Co., 65 Cal. 502 (where the pre-
sumption was rebutted); Smith v.
Smith, 117 Mass. 72 (where the pre-
sumption was rebutted).
=> Supra, § 483.
* Berks & Dauphin Turnpike
Road V. Myers, 6 S. & R. (Pa.) 12;
9 Am. Dec. 402 ; Darnall v. Dickens,
4 Yerg. (Tenn.) 7; Barned's Bank-
ing Co., 3 Ch. 105, 116; Mickey v.
Stratton, 5 Sawy. 475; Indianapolis,
etc. B. R. Co. V. Morganstern, 103
111. 149; Leggett v. New Jersey, etc.
Banking Co., 1 N. J. Eq. 541 ; 23 Am.
Dec. 728; Yanish v. Pioneer Fuel
Co., 64 Minn. 175; 66 N. W. 198;
Gorder v. Plattsmouth, etc. Co., 36
Nebr. 548; 54 N. W. 830; Levering
V. Mayor, etc. of Memphis, 7 Humph.
(Tenn.) 553; Miners' Ditch Co. v.
Zellerbach, 37 Cal. 543;. 99 Am. Dec.
300 ; UnderhiU v. Santa Barbara, etc.
Co., 93 Cal. 300, 314; 28 Pac. 1049;
407
3
§ 491 CORPORATE SEALS [ChAP. IX
mere fact that the minutes of the directors contain no entry
authorizing the affixing of the seal is insufficient to overcome this
presumption.'
§ 491. Statutes regulating Method of Execution of Deeds of
Corporations. — Statutory provisions as to the mode of execu-
tion of deeds by a corporation will generally be construed as
directory merely and will therefore not exclude any method of
execution that might have been valid at common law.^ Thus,
a statute providing that the president and two other members
shall sign a corporation's deed of real estate does not invalidate
a deed executed in any manner that was good at common law.
Nelson v. Spence (Ga.), 58 S. E. 697 picious circumstances). For other
(deed signed by treasurer) ; Graham, cases where the presumption was
V. Partee (Ala.), 35 So. 1016; 139 rebutted, see Bliss v: Kaweah, etc.
Ala. 310; ibl Am. St. Rep. 32 Co., 65 Cal. 502; 4 Pac. 507; Blood
(where the name of the corporation v. La Serena, etc. Co., 113 Cal. 221,
was not subscribed to the d^ed); 225-226; 41 Pac. 1017; 45 Pac.
Quackenboss v. Globe, etc. Ins. Co., 252; CvUman Fruit & Produce
177 N. Y. 71 ; 69 N. E. 223 (where Ass'n, 155 Fed. 372, 376 (headnote
the instrument was signed by the inadequate); Gibson v. Goldthwaite,
president and secretary); Kirk- 7 Ala. 281, 294; 42 Am. Dec.
Patrick v. Eastern Milling, etc. Co. 592.
(1), 135 Fed. 144; Degnan v. Thor- As to what constitutes the reg-
oughman, 88 Mo. App. 62 (semble) ; ular corporate seal within the mean-
Bullen V. Milwaukee Trading Co., ing of this rule, see Blood v. La
85N. W. 115; 109 Wise. 41; CoUier Serena, etc. Co., 113 CaX. 221, 225; 41
V. Doe ex dem. Alexander, 38 So. Pac. 1017; 45 Pac. 252; Raub v.
244; 142 Ala. 422; Benedict v. Den- Blairstown Creamery Ass'n, 56 N. J.
ton. Walker Ch. (Mich.), 336; Deep- Law 262; 28 Atl. 384 (holding that
waier Council v. Benick (W. Va.), the presumption does not apply
53S. E. 552; Watkinsv. Glas (Cal.), where a common paper seal is at-
89 Pac. 840; WoodhUl v. SuUivan, tached although the instrument
14 C. P. (Up. Can.) 265, 273; itself, signed by the president, pur-
Springerv. Bigford, 55 111. App. 19S; ported to be under the corporate
McDonald v. Chisholm, 131 111. 273; seal).
23 N. E. 596; Wigmore on Evi- ' McKee v. Cunningham (Cal.),
dence, § 2169. 84 Pac. 260, 262 (headnote inade-
But see Backer v. United States quate); Bliss v. Harris (Colo.), 87
Gas Fixture Co., 84 N. Y. Supp. 149 Pac. 1076.
(where the instrument was signed by ^ Cf. supra, § 476, and infra,
the company's treasurer); Reed v. § 1070, § 1475. See also Bliss v.
Fleming, 102 111. App. 668. Harris (Colo.), 87 Pac. 1076.
Cf. KoeUer v. Black River, etc. ' Bason v. King's Mountain Min-
Co., 2 Black 715 (where the pre- ing Co., 90 N. Car. 417.
sumption was overthrown by sus- But see Allen v. Brown, 6 Kans.
408
§ 469-§ 492]
ACKNOWLEDGMENT
§492
Where a statute requires certain instruments to be signed or
subscribed, it is not necessary that the corporate name be sub-
scribed, but the signature of the officer in his official capacity is
sufficient.'
§ 492. Acknowledgment of Deeds of Corporations. — Statutes
providing for the acknowledgment of deeds usually contain
explicit directions as to the acknowledgment of deeds of corpora-
tions. Such express directions ought, as a matter of prudence,
always to be followed; but probably they would not vitiate any
acknowledgment that would have been good if no such provisions
had been contained in the statute. At any rate, if the statute
contain no express directions as to the mode of acknowledgment
of deeds by corporations, the directors or officers who are
authorized to affix the seal are also competent to acknowledge
the deed.^
App. 704; 50 Pac. 505; Isham v.
Bennington Iron Co., 19 Vt. 230.
' Ismon V. Loder (Mich.), 97 N.
W. 769.
' Gordon v. Preston, 1 Watts
(Pa.) 385 (headnote inadequate);
26 Am. Dec. 75 ; Hopper v. Lovejoy,
21 Atl. 298; 47 N. J. Eq. 573; 12
L. R. A. 588; Lovett v. Steam Saw
Mill Ass'n, 6 Paige (N. Y.) 54;
Bowers v. Hechtman, 45 Minn. 238,
241-242; 47 N. W. 792; Kdly v.
Calhoun, 95 U. S. 710; Merrill v.
Montgomery, 25 Mich. 73 (instru-
ment signed by both president and
cashier may be aclcnowledged by
cashier only).
409
CHAPTER X
CAPITAL AND SHARES — CLASSES OF SHARES
Section
Nominal or share capital distinguished from borrowed capital . . 493
Nomenclature ........ . 494-498
"Capital stock," "stock," and "stockholders," "shares" and
"shareholder" . . 494
Further consideration of English distinction between "shares" .
and "stock" .... 495
Meaning of "stock" in America ... 496
Whether "capital" or "capital stock" refers to nominal or to
actual capital 497
Meaning of "corporators" ... 498
Nature of shares 499-506
Distinction between one share and another share of same kind 499-501
Rule in England — numbering of shares ... . . . 499
Rule in America . . ... . ... 500
Authorities maintaining that shares are legally indis-
tinguishable from one another .... 501
A share not an interest, legal or equitable, in company's prop-
erty — whether real or personal estate . 502
A share not a sum of money settled in trust but an interest in
the company ..... . 503
A share as a chose in action . . . 504
Whether shares are "goods, wares, and merchandise," "per-
sonal chattels," "goods and chattels," "securities," etc. 505
Whether trover will lie for conversion of shares .... 506
Nominal or share capital not a liability of company . . . 507
Rights of shareholders . 508-516
Primary or substantive rights — classification . 508
References to full discussions of these primary rights . . 609
Secondary or ancillary rights of shareholders . 510-516
Classification . . 510
Right to registration as shareholder in company's books . . 511
Right to a share-certificate ... . 512-516
Definition of certificate 512
Right to a certificate in general . . . 513
Delay in issuing certificate . 514
Remedies for refusal or improper failure to issue
certificate . 515
Loss of certificate 516
Equality of shares 517^24
Origin and nature of rule of equality between shares ... . 517
What the law means by equaUty between shares 518-522
Where shares are of different nominal or par values . . . 518
410
§ 493-§ 573] SYNOPSIS
Equality of shares (continued) Section
Where a larger proportion paid in upon some shares than
others . 519^21
While company a going concern — calls and divi-
dends, interest on amount paid in advance of Calls 519
In winding-up or liquidation . 520-521
Where assets are more than sufficient to return
paid-up capital 520
Where assets are insufficient to return paid-up
capital . . . . . 521
Shares issued at a premium .... . 522
Provisions estabhshing different rules of equahty . . 523-524
Nature of such provisions — distinguished from provisions
creating preferred shares ... 523
Construction of provisions 524
Creation of preferential rights 525-534
Power of shareholders to create preferential rights by mutual
agreement 525
Nomenclature — "preferred shares," "preference shares," "com-
mon shares," "ordinary shares" 526
Power to give preference to some shares in respect of divi-
dends . . . . . 527-530
In general . . . . 527
Creation of preference at organization of company by
incorporation paper or contemporaneous by-laws . . 528
Creation of preference after shares have been issued on an
equality . . . . 529
Issue of new shares with preference over previously issued
shares . . . 530
Statutes authorizing issue of preferred shares 531
What words sufficient to authorize issue of preferred shares
carrying sundry preferences . . . 532
Injunction against unauthorized issue of preferred shares . 533
Effect of unwarranted issue of preferred shares — estoppel —
acquiescence 534
Alteration of preferential rights . . 535-539
In general 535
Preference created by incorporation paper . . . . 536
Effect of proceedings for reduction of capital . . . . 537
Effect of consolidation with another corporation 538
Waiver of preference ... . . . . . 539
(Status of preferred shareholders as members and not creditors of the
company . 540-548
Preferred shareholders entitled to the same rights and subject
to same liabilities as other shareholders except as other-
wise provided ... 540
Preferred shareholders not entitled to rights of creditors . 541
What circumstances insufficient to confer on preferred share-
holders the rights of creditors 542
Express agreement that preferred shareholders shall have rights
of creditors ultra vires 543
Further explanation of the rule that preferred shareholders
are not creditors 514
411
CAPITAL AND SHARES [ChAP. X
Status of preferred shareholders, etc. {continued) Sectioa
Sullivan v. Portland, etc. R. R. Co., 94 U. S. 806 .... 545
Tests for distinguishing shareholders from creditors . . . . '546
Statutes conferring on preferred shareholders some of the rights
of creditors 547
"Interest-bearing stock" ... 548
Extent of preferential rights as between preferred and deferred
shareholders 549-571
How extent of preference determined 549
Preference as to dividends . 550-563
What words will confer a preference as to dividends . . . 550
Whether preference is cumulative 551
Effect of cumulative preference 552-553
Whether interest is claimable on arrearages of cumu-
lative preferred dividends . . 552
Whether payments to preferred shareholders in excess
of cumulative preferential dividend chargeable
against deficiency in subsequent year . . . 553
Whether profits in excess of preferential dividend are divi-
sible pro rata among both preferred and common
shareholders . . ... 554
Whether preferred shares may participate in profits remain-
ing after paying on both classes of shares a dividend
equal to preferred dividend . . . . . 555
Rights where both classes of shares are to participate
equally in profits remaining after paying on
both classes of shares a dividend equal to the
preferential dividend . . 556
How preferential dividend payable — gold, cash, bonds,
etc. ... 557
Provisions for termination of preference 558
Effect of cancellation or surrender of some of the pre-
ferred shares ... . , 559
Discretion of company as to withholding preferential divi-
dend although earned . . . . . . 560
Remedies of preferred shareholders for arbitrary with-
holding of preferential dividends 561
Remedies against payment of dividends to deferred share-
holders in fraud of preferential rights . . ... 562
When deferred shareholders may compel declaration of
preferential dividend ... . ... . 563
Preference as to repayment of capital in liquidation .... 564-568
Legality of such a preference 564
When preference as to capital exists and when not . . 565
Attempts to confer indirectly a preference as to capital
upon shares not entitled thereto ... 566
What funds regarded as capital and what as profits in
winding-up 567
Whether preferred shareholders are entitled in liquidation
to "interest" from the time of cessation of business
in lieu of preferential dividend . . . . . 568
Preference as to distribution of new shares upon an increase of
capital . ... 569
412
§ 493-§ 573] NOMENCLATURE § 494
Extent of preferential rights, etc. (continued) . Section
Preference as to voting-rights 570
Preference as to liability to creditors 571
'Consequences of distinction between preferred and deferred shares
upon rules as to parties in legal proceedings 572
Consequences of distinction upon powers of management of majority
of corporation 573
§ 493. Nominal or Share Capital distinguished from Borrowed
Capital. — We have seen above that general laws for the forma-
tion of joint-stock business corporations always, or almost always,
provide that each company's incorporation paper shall state the
amount — that is, the nominal amount — of the authorized
capital, and the number of shares into which it shall be divided.'
Theoretically, the full amount of this capital at its par value is
always to be obtained by the company from subscriptions to its
shares in money or money's worth; and with the funds so
obtained the company is to carry on its business. In practice, as
every one knows, a large part of many a company's nominal
share capital represents no substantial assets, but mere "water,"
the actual working capital of the corporation being derived
from the issue of bonds. But this practice, even if not illegal, is
nevertheless not such as the law contemplates, and is therefore
not reflected in its nomenclature.
§ 494-§ 498. Nomenclature.
§ 494. " Capital Stock," " Stock " and " Stockholder," " Shares "
and " Shareholder." — The aggregate of the shares of capital is
called the company's capital stock; and every share in this
capital stock may itself, properly enough, be called stock, and
its holder a stockholder. Accordingly, this terminology is prev-
alent in America, where no distinction is drawn between shares
and stock,^ or between a shareholder and a stockholder. As we
have just intimated, this usage is entirely proper on etymological
and historical grounds. In England, however, within the last
' Supra, § 109. stock ") ; Lockwood v. Town of
' Harvard College v. Arru/ry, 9 Weston, 61 Conn. 211; 23 Atl. 9
Pick. (Mass.) 446, 461^62 ("There (holding that shares are taxable
can be no doubt but that shares in under a statute levying a tax upon
manufacturing and insuring incor- all " stocks not issued by the United
porations are and were commonly States"),
called and known by the name of
413
§ 495 CAPITAL AND SHAKES [ChAP. X
fifty or sixty years, a popular practice has sprung up which
distinguishes between shares and stock, the former term,
"shares," being used to denote the indivisible shares which
compose the capital of most business corporations while "stock"
is used to designate a form of security which is infinitely sub-
divisible, or which is, at any rate, not divided into definite,
indivisible shares. For instance, a company whose capital is
composed of indivisible shares of the nominal amount of, say,
one pound and is not transferable in fractions thereof, may
"consolidate" its shares into "stock" which may be subdivided
indefinitely and transferred in amounts of, say, ten shillings,
five shillings, or one shilling, or even less. Necessarily, however,
this "consolidation into stock" cannot well take place unless the
shares are fully paid up ; and some English judges have, there-
fore, said that shares and stock "differ in this respect that shares
are not necessarily paid up." '
§ 495. Further Consideration of English Distinction between
Shares and Stock. — This distinction between shares and stock,
although important to bear in mind in reading the English
books is, even in. England, a popular rather than a legal differ-
entiation of terms. Thus, where a testator bequeathed to his
Tvife "all such stocks in the pubhc funds, or shares in any
railway," of which he might die possessed, the House of Lords
held that shares in a railway company which before the testator's
death were consolidated into "stock" would nevertheless pass by
the bequest.^ Lord Selborne said:" "The share, while still
indivisible (whether subject to calls or paid up) and registered
upon one plan of bookkeeping, is in substance and in truth
nothing but a 'share in the capital stock of the company' and it
is still a ' share in the capital stock of the company ' after it has
' Morricev.Aylmer,L.n.7B..h. De G. & Sm. 278 ("stock" in a
717, 724, per Lord Hatherley. statute held to include shares) ; -
' Morrice v. Aylmer, L. R. 7 H. L. Oakes v. Oakes, 9 Hare 666 (holding
717. that a bequest of all the G. W. Ry.
Cf. Re Bodman (1891), 3 Ch. 135; shares of which testator might be
New Zealand Trust & Loan Co. possessed at the time of his death
(1893), 1 Ch. 403 ("stock" in a is not adeemed by conversion into
statute held to include shares not stock of the shares owned by the
fully paid up) ; Trinder v. Trinder, testator at the date of the will but
1 Eq. 695 (bequest of "my shares in does not pass other stock in the
the G. W. Ry. Co." held to pass same company which he acquired
stock in that company, the testatrix afterwards),
owning no shares) ; Re Angela, 5 ' L. R. 7 H. L. 729.
414
§ 493-§ 573] NOMENCLATURE § 497
become divisible and registered upon a different system of book-
keeping. . . . Tlie difference makes no real change for any
purpose whatever material to the nature or incidents of the
property, except that the shareholders' power of transfer is no
longer subject to certain restrictions."
§ 496. Meaning of Stock in America. — In the United States,
the familiar use of the term "stockholders" to designate the
owners of shares in the capital of a corporation not unnaturally
leads to the notion that the word "stock" ex vi termini indicates
that its holders are members and not creditors of the company.'
Such, however, is not the case. For instance, every one is
acquainted with "city stock," "United States stock," and other
public stocks,^ the holders of which are creditors of the govern-
ment or municipality that issues the security. So, in England,
business corporations frequently issue as evidence of indebted-
ness a form of security known as "debenture stock" — that is to
say, certificates of indebtedness transferable on the company's
books in fractional amounts.^ The fact that the stockholders of
an ordinary American corporation are part owners of the
company's capital and not creditors of the corporation should
not, therefore, induce the belief that the term is especially
appropriate for members of the company and inappropriate for
its creditors. The holders of common or of preferred stock are
not creditors but members of the corporation; but this is be-
cause of the real nature of their position, and could not safely
be inferred merely from their designation as stockholders.
§ 497. Whether " Capital " or " Capital Stock " refers to Nomi-
nal or to Actual Capital. — Whenever the "capital" or the
"capital stock" of a corporation is referred to, a question may
arise whether the reference is to the nominal capital or to the
actual capital of the company.* The answer to this question
' See State ex rd. Thompson v. stocks and shares in private cor-
Cheraw, etc. E. B. Co., 16 S. Car. 524; porations ").
Hamlin v. Toledo, etc. R. R. Co., 78 = See infra, § 1687.
Fed. 664, 670; 24 C. C. A. 271; 36 * "The term 'capital stock' has a
L. R. A. 826 (where the court said double meaning as applied to corpo-
" Stock is capital "). rations. In one sense it is the sum
Cf. Sellar v. Charles Bright & Co. mentioned in the articles of incorpo-
(1904), 2 K. B. 446. ration as the amount of the capital
' Ci.Lockwoodv. Town of Weston, stock; in other words it is the share
61 Conn. 211, 216, 23 Atl. 9 ("The capital, or nominal capital, and does
word 'stock' includes both pubhc not necessarily represent a corre-
415
§ 498 CAPITAL AND SHARES [ChAP. X
must depend in each instance on the context. For instance,
"capital stock" in a statute forbidding corporations to divide,
withdraw, or in any way pay to the stockholders any portion of
the "capital stock," has been held to refer to the actual capital or
assets of the corporation,' and not to the nominal or share
capital, and therefore does not prohibit a stock dividend.^ The
amount of "actual capital paid in cash or property," has
been construed to refer to the actual value of the company's
property for the time being and not to the amount credited as
paid up on the nominal capital, or to the amount of the prop-
erty or money received in payment of the shares at its value
when so received.'
§ 498. Meaning of " Corporators." — The term "corporators"
is properly used to designate the persons who form and
compose the corporation whether they be shareholders or
not, and hence should not ordinarily be construed to include
those who afterwards become members of the corporation.*
But the context may show that any shareholders or members
of the corporation were intended to be comprised within the
term.^
sponding amount of actual capital. N. Y. 433; 27N. E. 818; 12L. R. A.
. . . The capital stock referred to in 762 (as to the meaning of a com-
the statute, however, is the actual pany's "capital stock" for purposes
property of the corporation" : Ex- of taxation).
cdsior Water, etc. Co. v. Pierce, 90 ' Williams v. Western Union Td.
Cal. 131, 140; 27 Pac. 44. But cf. Co., 93 N. Y. 162.
People V. Commrs. of Taxes, 23 N. Y. ' Person & Riegel Co. v. Lipps
192, 219 (where a dissenting judge, (Pa.), 67 Atl. 1081.
whose opinion is more to be relied * Chase v. Lord, 77 N. Y. 1.
upon than that of the majority, as ' GvUiver v. Rodle, 100 111. 141
the decision was reversed on error in (followed in Shufddt v. Carver, 8 111.
2 Black. 620, 685, declared that the App. 545); Atlantic Mut. Life Ins.
word "capital" is unambiguous and Co., 2 Fed. Cas. 168 (policy-holders
refers only to actual capital, but in semi-mutual life insurance com-
that "stock" is ambiguous and may pany held to be "corporators" en-
refer either to nominal or actual titled to notice of meeting called to
capital). authorize bankruptcy proceedings
' Martinv. Zellerbach,38CBl.3Q0, under U. S. Rev. Stats., § 5122, the
308-309 ; 99 Am. Dec. 365 ; Excelsior Bankrupt Act of 1867) ; Lady Bryan
Water, etc. Co. v. Pierce, 90 Cal. 131, Mining Co., 14 Fed. Cas. 926; 1
140; 27 Pac. 44. Sawy. 349; 2 Abb. (U. S.) 527
Ct. State v.Morristown Fire Ass'n, (stockholders held to be "corpora^
23 N. J. Law 195; People ex rd. tors" within last mentioned statute).
Union Trust Co. v. Coleman, 126
416
§ 493- § 573] NATURE OF SHARES § 500
§ 499- § 506. NATURE OF SHARES.
§ 499-§ 501. Distinction between one Share and another Share
of same Kind.
§ 499. Rule in England — Numbering of Shares. — The capital
stock of almost all American joint-stock corporations ' and of
the vast majority of English limited companies is divided into
shares. In England, the practice is to give a separate denoting
number to each share; and this practice is in many respects
advantageous and worthy of imitation in the United States.
In the first place, it affords an additional check against fraudu-
lent overissues of shares. Moreover, it enables the title to
particular shares to be traced through successive owners. Even,
however, where the practice of numbering the shares prevails,
the numbers are regarded as a mere convenience, and in no way
affect the substantive rights of the holder.^ One share is just the
same as another share of the same kind, and a misstatement of
the denoting numbers will not relieve a transferee of shares from
liability thereon.^ Moreover, the renumbering of shares does
not affect their identity. Hence, where a person holds shares
bearing certain numbers, a surrender of his share-certificate to
the company, followed by an issue of shares bearing the same
numbers to some one else, does not necessarily amount to a
transfer of the former shares, or release the original holder
from liability as a shareholder ; * the new shares although
bearing the same numbers as the old are in law and in fact
different shares.
§ 500. Rule in America. — Moreover, where, as in America,
shares are not distinguished by denoting numbers, so that one
share is to all appearances the same as any other share, yet the
individuality, so to speak, of the several shares is in law un-
affected by this similarity. For instance, a pledgee of shares is
ordinarily bound to keep the identical shares pledged to him,
■ Cf. Hawes v. Anglo-Saxon Pe- ' In addition to cases cited below,
*roZeum Co., 101 Mass. 385 (declaring see Adams' Case, 13 Eq. 474, 483;
that where the incorporation paper National Ins. Co. v. Egleson, 21
fixes the amount of the capital stock Grant (Can.) 406.
but does not divide it into shares, ' Ind's Case, 7 Ch. 485.
the several subscribers become "ten- * Ex parte Jones, 27 L. J. Ch. 666.
ants in common" of the stock).
VOL. I.— 27 417
§ 501 CAPITAL AND SHARES [ChAP. X
and does not discharge his obligations to the pledgor by holding
himself ready to surrender to the pledgor on payment of the
debt other shares of the same value in the same company.' To
be sure, if the pledged shares were originally mingled indis-
criminately with other shares standing in the pledgee's name or
if, by the custom of brokers or otherwise, the creditor is author-
ized to mingle the hypothecated shares with other shares in the
same company, the pledgee is not bound to keep any particular
shares to answer the debtor's claim but does his full duty if he
always has in readiness a sufficient number of other shares to
satisfy a demand for redemption by the hypothecator.^ This,
however, is not because the several shares have no legal indi-
viduality but because the confusion was expressly or impliedly
authorized by contract ; and consequently the result would have
been the same if the company had followed the English practice
of designating the several shares by distinguishing numbers.
§ 501. Authorities maintaining that Shares are legally
indistinguishable from one another. — A few cases, however,
cannot be thus explained, but must stand squarely upon the
proposition that the several shares of the same issue are in law
indistinguishable from one another. Thus, where a purchaser
of shares was entitled to rescind the purchase on account of
fraudulent misrepresentations of the vendor, it was held that this
right of rescission could be exercised although he had parted
with, and was consequently unable to return, the particular
shares purchased, inasmuch as he had tendered other shares in
the same company of the same value.' Dicta in other cases lend
' Fay v. Gray, 124 Mass. 500; 198, 218; 26 Atl. 874; 28 AtL 104;
AUen V. Dvhms, 117 Mich. 115; 75 21 L. R. A. 102; Price v. Gover, 40
N. W. 443; 72 Am. St. Rep. 557; Md. 102, 110-114; Hubbdlv. Drexd,
Dykers v. AUen, 7 Hill (N. Y.) 497; 11 Fed. 116; Gilpin v. Howell, 5 Pa.
42Am. Dec. 87. St. 41, 56-58; 45 Am. Dec. 720;
But see Hvbbell V. Drexd, 11 Fed. Boylan v. Huguet, 8 Nev. 345;
115. Cf. Atkins v. Gamble, 42 Cal. Smith v. Becker (Wise), 109 N. W.
86 ; 10 Am. Rep. 282 (where nomi- 131 (holding that sale of some shares
nal damages only were allowed for out of the mingled mass not con-
the technical conversion) ; Bell v. clusively presumed to be a sale of
Bank of Cal. (Cal.), 94 Pac. 889. pledgee's own shares where sale of
' Nourse v. Prime, 4 Johns. Ch. the pledged shares was clearly in-
(N. Y.) 490 ; 8 Am. Dec. 606 ; 7 Johns, tended).
Ch. 69; 11 Am. Dec. 403; Horton Cf. Worthington v. Tormey, 34
v. Morgan, 19 N. Y. 170; 75 Am. Md. 182.
Dec. 311; Skiff v. Stoddard, &3Cotm. ' Mayo v. Knowlton, 134 N. Y.
418
§ 493-§ 573] . NATURE OF SHAKES § 502
color to the same proposition that the several shares of the
capital stock of an American company are legally indistinguish-
able from one another,' Nevertheless, it is submitted that, as
already intimated, the proposition is not supported by the best
authorities and is contrary to sound principle. It may be that
no special value attaches to a particular share-certificate and that
a bailee of shares does not commit a conversion by surrendering
the share-certificate and receiving a new certificate or certificates
for the same shares. But although the identity of the certificate
may be immaterial, the identity of the shares is important. For
instance, the owner might be satisfied with the title to his own
shares and therefore be unwilling to accept other shares in lieu
thereof. That the title to the other shares may be in fact unim-
peachablte is no answer to the argument; for a property owner
cannot be required to accept instead of his own property other
property of the same kind equally valuable and held by a title
equally sound. The true doctrine would seem to be that the
similarity of one share to another will often justify the in-
ference that the parties did not intend to insist on a return
of the particular shares but would be satisfied with a return
of the same number of other shares of the same issue
and value ; '' but that unless such inference is possible, the
several shares must be treated as, in law, quite as distinct
from one another as, say, one bag of corn is from another bag
of corn.
§ 502. A Share not an Interest legal or equitable in Company's
Property — Whether Real or Personal Estate, etc. — A share of
capital stock is property of a peculiar kind. It does not con-
sist in an interest either legal or equitable, direct or indirect,
in the property of the company.' To be sure, many lawyers
250; 31N. E. 985; American Alkali ' Seecasescitedsupra,p.418,n.2.
Co. V. Salom, 131 Fed. 46, 49-50; Cf. Atkins v. Gamble, 42 Cal. 86;
65 C. C. A. 284. 10 Am. Rep. 282.
Note that these cases may be sup- ' Dykers v. AUen, 7 Hill (N. Y.)
ported, perhaps, upon the ground 497; 42 Am. Dec. 87 (semble, per
that the defrauded party should be Walworth, C, as to construing a
allowed to rescind the contract upon loan of shares as a mvtuum).
restoration of substantially, if not • Regina v. Arnaud, 9 Q. B. 806;
technically, the original status. Commonwealth v. New York, etc. B.
419
502
CAPITAL AND SHARES
[Chap. X
and judges are accustomed to say that the shareholders are in
equity the owners of the corporate property; but every one
recognizes that such expressions are in legal theory inaccurate.
For example, a share of capital stock is personalty although
the corporation may own real estate.^ Even a statute expressly
declaring that shares shall be deemed real estate has been
construed to make the shares realty only for the purpose of
being inheritable, leaving them for all other purposes personal
property as at common law.^ So, a sale of shares cannot be
deemed a sale of an interest in the goodwill of the company
within the meaning of a statute which forbids any agreement
to refrain from exercising a lawful trade or business except by
a seller of goodwill; and consequently, under such a statute
a shareholder whose personality is closely associated with the
goodwill of the company's business cannot, upon selling his
interest in the corporation, agree with the purchaser to refrain
Co., 132 Pa. St. 591; 19 Atl. 291;
7 L. R. A. 634 (stated infra, § 1080).
' Russdl V. Temple, 3 Bane's
Abridgment (Mass.) 108; Bligh v.
Brent, 2 Y. & C. Ex. 268; Bradley v.
Holdswarth, 3 M. & W. 422; Elkhorn
Land, etc. Co. v. ChUders (Ky.) 100
S. W. 222; Chappdl v. Chappell
(Ky.), 99 S. W. 959, 960 (headnote
inadequate — distinguishing Price v.
Price, 6 Dana (Ky.) 107, and Cope-
land V. Copeland, 7 Bush. (Ky.) 349,
in which cases stock in railway com-
panies was held real estate, as gov-
erned by peculiar statutes); Johns
V. Johns, 1 Ohio St. 350; Mattingly v.
Roach, 84 Cal. 207; South-Western
R. R. Co. v. Thomason, 40 Ga. 408;
Arnold v. Ruggles, 1 R. I. 165 ; Mc-
Keen v. County of Northampton, 49
Pa. St. 519; 88 Am. Dec. 515 (for
purposes of taxation).
The same has been held in Eng-
land in respect to shares in an un-
incorporated joint-stock company
formed upon the "cost-book" prin-
ciple, Watson V. SpraUey, 10 Ex. 222
(as to the nature of a cost-book com-
pany or partnership, see 1 Lindley
on Companies, 6th ed., p. 132) ; and
in respect to shares in other purely
voluntary associations, Watson v.
Black, 16 Q. B. D. 270 (shareholder
not qualified to vote as equitable
freeholder although land is held by
trustees in trust for the association) ;
and in Connecticut in respect to
shares in an unincorporated joint-
stock company such as the Adams
Express Company : Lockwood v.
Town of Weston, 61 Conn. 211; 23
Atl. 9.
See also article by Prof. Williston
in 2 Harv. L. Rev. 149, 150-151,
where the learned author, reviewing
the early cases, shows that prior to
the nineteenth century a share of
capital stock was regarded as an
equitable interest in the property of
the corporation and therefore as real
or personal estate according to
the nature of the property.
In Saup V. Morgan & Co., 108 111.
326, 329, a tax levied on the capital
stock of a corporation — not the
shares of stock — was held to be a
personal tax.
' Cooper V. Dismal Swamp Canal
Co., 6 N. Car. 195.
Cf. Cape Sable Company's Case,
3 Bland Ch. (Md.) 606.
420
§ 493-§ 573] NATURE OF SHAKES § 504
from engaging in the same business in competition with the
corporation.' On the other hand, a shareholder has an in-
surable interest in the property of the company ; '' for he has
in fact, although not perhaps technically or in law, a financial
interest in the property which is suflScient to prevent the policy
from being a mere wager.
§ 503. A Share not a Sum of Money settled in Trust but an
Interest in the Company. — On the other hand, a share cannot
be properly deemed a sum of. money " — the amount paid in or
contributed by the subscriber — settled or invested upon a
trust. This was decided in a recent English case in which the
true nature of a share of capital stock was very clearly stated
by the court. Said Farwell, J. : "A share, according to the plain-
tiff's argument, is a sum of money which is dealt with in a par-
ticular manner by what are called for the purpose of argument
executory limitations. To my mind it is nothing of the sort. A
share is the interest of a shareholder in the company measured
by a sum of money, for the purpose of liability in the first place,
and of interest in the second, but also consisting of a series of
mutual covenants entered into by all the shareholders inter se
in accordance with § 16 of the Companies Act, 1862. The con-
tract contained in the articles of association is one of the original
incidents of the share. A share is not a sum of money settled
in the way suggested, but is an interest measured by a sum of
money and made up of various rights contained in the contract,
including the right to a sum of money of a more or less amount." *
§ 504. A Share as a Chose in Action. — Hence, it follows that
a share in an incorporated companyls personal property of the
kind known as choses in action.' For example, shares in a cor-
' Merchants' Ad. Sign Co. v. that consols or public stocks will not
Stetling, 124 Cal. 429; 57 Pac. 468; pass under a bequest of "money").
71 Am. St. Rep. 94; 46 L. R. A. « Borland's Trustee v. Steel Bros.
142. & Co. (1901), 1 Ch. 279, 288.
' Warren v. Davenport Fire Ins., The definition of a share, given
Co., 31 Iowa 464; 7 Am. Rep. 160. in Nanney v. Morgan, 37 Ch. D. 346,
' Cf. Jones V. Brirdey, 1 East 1 352, 356, as the right to vote and to
(relating, doubtless, to government receive dividends is submitted to be
stock); Nightingal v. Devisme, 5 incorrect. There are other rights
Burr. 2689 (relating to East India involved in the ownership of a share
^tock) ; Bridgman v. City of Keokuk, besides those mentioned. Moreover,
72 Iowa 42 ; 33 N. W. 355 (shares a person may be a shareholder with-
not moneys or credits) ; Gosden v. out the right to vote.
DotteriU, 1 Myl. & K. 66 (holding » Webb \. Baltimore, etc. B.R. Co.,
421
§ :05
CAPITAL AND SHARES
[Chap. X
poration are "things in action" within the meaning of the Eng-
lish bankrupt act.' So, too, they have been held to be "choses
in action" within the meaning of an attachment law, the com-
pany being properly made garnishee.^ Moreover, it has been
held that shares are choses in action within the meaning of the
federal statute which restricts the right of an assignee of a chose
in action to invoke the jurisdiction of the federal courts on
the ground of diverse citizenship to cases in which the same
diversity of citizenship would have existed if the assignor had
been the plaintiff; ^ but this decision must have been but poorly
considered, inasmuch as in hundreds of cases shareholders^who
derive title by assignment from the original subscribers have
maintained shareholders' bills in the federal courts on the
ground of diversity of citizenship.*
§ 505. Whether Shares are " Goods, Waxes or Merchandise,"
" Personal Chattels," " Goods and Chattels," " Securities," etc. —
According to the better view, shares are not goods, wares, or mer-
chandise, within the Seventeenth Section of the Statute of Frauds.^
77 Md. 92; 26 Atl. 113; 39 Am. St.
Rep. 396; Johnson v. Hume, 138
Ala. 564; 36 So. 421 (as to the com-
raon law rights of the husband on
reducing shares of his wife to pos-
session) ; Arnold v. Buggies, 1 R. I.
165 (as to the marital rights of the
husband at common law); Slay-
iTiaker v. Bank of Gettysburg, 10 Pa.
St. 373.
But see Ramsey v. Gould, 57 Barb.
(N. Y.) 398 (holding that shares are
not within a statute prohibiting
attorneys from buying any bond
or other "thing in action" for the
purpose of bringing suit thereon).
' Colonial Bank v. Whinnsy, 11
App. Cas. 426.
' Lipscomb v. Condon, 56 W. Va.
416; 49S. E. 392; 107 Am. St. Rep.
938; 67 L. R. A. 670. As to the
soundness of this decision, quare.
' GormuTir-Wright Co. v. WrigM,
134 Fed. 363; 67 C. C. A. 345.
* Cf. Rule 94 of the Supreme
Court, restricting this right. See
infra, § 1170.
» Duncuft v. Alhrechi, 12 Sim.
189; Bmdby v. BeK, 3 C. B. 284;
Vawter v. Griffin, 40 Ind. 593 (sem-
ble, under a statute which omitted
the words "wares or merchandise ") ;
Webb V. Baltimore, etc. R. R. Co., 77
Md. 92 ; 26 Atl. 113 ; 39 Am. St. Rep.
396 (distingmshing Colvin v. Wil-
liams, 3 H. & J. (Md.) 38) ; Browne
on Stat, of Frauds, 5th ed., § 296-
§ 298. /
Contra: Hightower v. Ansley
(Ga.), 54 S. E. 939 (oi^rruling Rogers
V. Burr, 105 Ga. 432; 31 S. E. 438;
70 Am. St. Rep. 50); Fine v.
Hornsby, 2 Mo. App. 61, 64; Pray
V. Mitchea, 60 Me. 430, 434-435
(shares in an unincorporated com-
pany) ; Tinsdale v. Harris, 20 Pick.
(Mass.) 9; Boardman v. Cutter, 128
Mass. 3S8; Nor A v. Forest, 15 Conn.
400; Baltzen v. Nicolay, 53 N. Y.
467 (where the point although neces-
sarily involved and decided was not
argued or mentioned in the opinion
of the court).
For an analysis of the phraseology
of the statutes of frauds of the several
American states, together with a
discussion of their application to con-
tracts for sale of shares, see 2 Dos
422
§ 493-§ 573]
NATURE OF SHARES
505
They are, however, personal chattels; ' for that expression in-
cludes every kind of personal property except chattels real. So,
they are "goods and chattels" within the meaning of the statute
of 13-Eliz., c. 5, as to conveyances in fraud of creditors,^ and
the price of shares may be recovered under a count for "goods
and chattels" sold and delivered.^ On the other hand they are
not "goods and chattels" within the Factors Acts.* Of course,
shares are included under the designation " personal property," °
unless the context shows that only tangible property is meant.
Although the word "securities" properly and primarily desig-
nate^ " money secured on property," ' in which sense it would
Fassos on Stockbrokers and Stock
Exchanges, 2d ed., 883 et seq.
The English rule applies to con-
tracts for sale of shares in an unin-
corporated company formed upon
the joint-stock principle which there-
fore are not within the Seventeenth
Section of the Statute of Frauds:
Watson v. SpraUey, 10 Ex. 222.
So, scrip in a railway company is
not "goods, wares, and merchan-
dise" within the English Stamp
Acts : Knigktv. Barber, 16M. & W. 66.
On the other hand, even in Eng-
land, it has been held that a Rule of
Court authorizing a sale of "goods,
wares, and merchandise" applies to
shares: Evans v. Davies (1893), 2
Ch. 216.
' Colonial Bank v. Whinney, 11
App. Cas. 426, 434 (per Lord Black-
bum).
' Pinkerton v. Manchester, etc.
R. R. Co., 42 N. H. 424, 451. Cf.
Robinson v. Jenkins, 24 Q. B. D.
275 (Rule of Court allowing inter-
pleader proceedings where a party
is under liability for any "debt,
money, goods or chattels," held to
apply to shares on account of the
generality of the word "chattels").
' Lawton v. Hickman, 9 Q. B. 563.
* Freeman v. Appleyard, 32 L. J.
Ex. 175 (cited without disapproval
in Williams v. Colonial Barafc„ 38 Ch.
D. 388, 408).
Cf . First Nat. Bank v. Holland, 99
Va. 495; 39 S. E. 126; 86 Am. St.
Rep. 898; 55 L. R. A. 155 (holding
that shares are not within a statute
requiring certain formalities in cases
of gifts of "goods and chattels");
Rex V. Capper, 5 Price 217 (holding
that stock in the public funds will
not pass under a royal grant of bona
et catalla felonum); Williamson v.
New Jersey Southern R. R. Co., 26
N. J. Eq. 398 (holding that shares
are not "goods and chattels" within
a statute requiring registration, etc.
of chattel mortgages); Morton v.
Cowan, 25 Ont. 529 (shares not
within a statute as to execution upon
interests in "goods and chattels").
' Jellinik v. Huron Copper Min-
ing Co., 177 U. S. 1 ; 20 Sup. a. 559;
Mattingly v. Roach, 84 Cal. 207
(holding mining shares to be within
a statute regulating the place of
delivery in sales of personal prop-
erty); Attorney-General v. Monte-
fiore, 21 Q. B. D. 461 (shares within
a statute levying a tax on a "dis-
position of property" to take effect
after death) ; Desinge v. Beare, 37
Ch. D. 481 (bequest of "my property
at R's bank" held to pass shares in
French companies represented by
certificates at R's bank at which
locality the testator had no tangible
property).
" Cf. Duncan v. Maryland Sav.
Inst, 10 G. & J. (Md.) 299, 308
(where in construing a statutory
power to invest in "public stocks or
other securities," the word "secur-
423
506
CAPITAL AND SHARES
[Chap. X'
not include shares and stocks in incorporated companies/ yet
the word has acquired the wider popular significance of "in-
vestments" — a sense which is broad enough to include stocks
and shares.^ Shares are not comprised within the term " money "
or "moneys." ' Although shares are choses in action, yet they
are not "credits." *
§ 506. Whether Trover will lie for Conversion of Shares. —
A share of capital stock being a chose in action, or intangible
property, an action of trover, properly so called, will not lie for
its conversion.^ But an action on the case in the nature of
trover may be maintained.* Moreover, trover will lie for a con-
version of the share-certificate ' just as it will He for conversion
of a promissory note, bill of lading, or other security.
§ 507. Nominal or share Capital not a Liability of Company. —
The share capital of a corporation is in no proper sense a lia-
ities" was said to mean "anything 547 (holding that canal shares will
given or deposited to secure the
payment of a debt").
' Thayer v. Wathen (Tex.), 44
S. W. 906; 17 Tex. Qv. App. 382;
Bartholomay Brewing Co. v. Wyait,
(1893), 2 Q. B. 499, 516 ("Shares in
a company are not securities but
portions of its capital ") ; Mechanics'
Bank V. New York, etc. R. R. Co., 13
N. Y. 599, 627 ("Certificates of stock
are not securities for money in any
sense "); Ogle v. Knipe, 8 Eq. 434
(bank stock and canal shares not
covered by a bequest of "all my
money and securities for money");
Graydon's Exrs. v. Graydon, 23 N. J.
Eq. 229 (direction in will to convert
into money all personal estate not
already in money or securities held
to require conversion of shares owned
by testator) ; Bank of Commerce v.
Hart, 37 Nebr. 197, 203 (headnote
inadequate); 55 N. W. 631; 20
L. R. A. 780; 40 Am. St. Rep. 479
(power in charter of bank to "pur-
chase securities of every kind," held
not to authorize purchase of shares
of stock in other corporations);
Huddleston v. Govldsbury, 10 Beav.
not pass under a bequest of property
vested in "bonds or securities").
' Rayner v. Rayner (1904), 1 Ch.
176.
' Collins V. Collins, 12 Eq. 455;
Ogle V. Knipe, 8 Eq. 434 ; and supra,
§ 503.
But see Knight v. Knight, 2 Giff.
616 (where Malins, V. C, held that
a bequest of "all sums and sums of
money that might be in the house,"
would pass shares represented by
certificates enclosed in an envelope
and endorsed by the testator "to
be considered as ready money" ; but
quaere whether the learned judge was
right in considering such extrinsic
evidence of the testator's intent).
* Bridgman v. City of Keokuk, 72
Iowa 42; 33 N. W. 355.
' Sewall v. Lancaster Bank, 17
S. & R. (Pa.) 285.
° See cases collected infra, § 932,
§ 934, § 937, § 940, and also § 515.
Cf. Ashton V. Heydenfelt, 124 Cal.
14; 56 Pac. 624.
' Sewall V. Lancaster Bank, 17
S. & R. (Pa.) 285, 287 (semble);
Brown v. Bokee, 53 Md. 155, 170.
424
§ 493-§ 573] EIGHTS OF SHAREHOLDERS § 50S
bility of the company. To be sure, accountants often include
a company's capital stock among its liabilities ; but this practice
is a mere convenient bookkeeping device, and in no way repre-
sents or accords with a correct legal use of the term.^ Thus,
a share in a corporation cannot be treated as a liability owing
from the company to the shareholder and capable of being set
off against a debt due from the shareholder to the company, so
as virtually to give the company a lien on the shares in case the
holder becomes bankrupt.^ So, the capital should not be reck-
oned as a liability in determining whether the company is solvent
or insolvent.'
§ 508-§ 516. BIGHTS OP SHAREHOLDERS.
§ 508. Primary or substantive Rights — Classification. — The
shareholders in a corporation constituting the company and
a share being an interest in the corporation, the rights in-
cident to the ownership of shares are rights which flow from
the ownership of an interest in, or part of, the corporation. By
a broad classification, these rights, so far as they are primary
or substantive in character, may be reduced to four, namely,
(1) the right to participate in profits earned by the company,
or, in other words, the right to dividends, (2) the right to share
in any assets which may remiain upon the (dissolution of the
corporation after the creditors shall have been paid, (3) the
right to participate in actual capital which is left free by a re-
duction of nominal capital and (4) the right to participate in the
management of the company, or, in other words, to vote at share-
holders' meetings. To these may, perhaps, be added the pre-
emptive right to subscribe to any increase of capital before the
new shares are issued to strangers.*
' But see Posner v. Southern Ex- of their stock is not a debt," — per
haust, etc. Co., 109 La. 658, 666; 33 Waite, C. J.); Hdler v. Nat. Marine
So. 641 ("A corporation owes and Barafc, 89 Md. 602, 611; 43 Atl. 800;
does not own the stock "). 73 Am. St. Rep. 212; 45 L. R. A.
Cf. Gans.ey v. Orr, 173 Mo. 532; 438.
73 S. W. 477; MiUer v. Bradish, 69 ' Kingstown Yacht Club, 21 L. R.
Iowa 278; 28 N. W. 594; Eyster v. Ir. 199.
Centennial Board of Finance, 9i\J. S. ' Shaw v. Gilbert, 111 Wise. 165,
500, 502 ("The liability of a corpora- 178-179; 86 N. W. 188.
tion to its stockholders on account * Infra, § 603 et seq.
425
§ 509 CAPITAL AND SHARES [ChAP. X
§ 509. Referemies to full Discussions of these Primary Rights.
— The first of these rights, namely, the right to dividends, is
the subject of special consideration below and in other parts
of this work.' The second, or the right to participate in the
distribution of capital upon dissolution of the company, be-
longing as it does to the topic of the winding-up and dissolution
of corporations, is outside the scope of this treatise, and is
therefore treated only incidentally.^ The third, the right to
participate in actual capital left free upon reduction of nominal
capital, is fully considered under the heading of reduction of
capital.^ The fourth, the right to vote at general meetings of
the company, receives detailed consideration in the chapter on
shareholders' meetings.*,
§ 510-§ 516. SECONDARY OR ANCILLARY EIGHTS OF
SHAREHOLDERS.
§ 510. Classification of secondary or ancillary Rights. — In
addition to these several rights, or more properly as ancillary
to them, each shareholder is entitled to demand that the com-
pany shall recognize his status as a member. This recognition
is accorded in two ways, firstly, by enrolling his name in the
company's register of members and, secondly, by issuing to
him a share-certificate or solemn admission or representation
by the company that the person in question is the owner of a
certain specified number of shares. Another right of a share-
holder of the same general class is the right to inspect books of
the corporation.'
§ 511. Right to Registration as Shareholder in Company's Books.
— The enrolment as a shareholder may be necessary to perfect
the shareholder's title: at all events without enrolment his
tenure is precarious and uncertain. If the company refuses
to register him as shareholder, he may treat such refusal as a
conversion of his shares and sue in tort for conversion," or he
". Infra, § 519, § 550-§ 563 and » Salt River Canal Co. v. Hickey,
Chapter XXIII. 36 Pac. Rep. 171; 4 Ariz. 240.
' Infra, § 520-§ 521; § 564-§ 568. Cf. Cooley v. Curran, 104 N. Y.
" Infra, § 660-§ 668. Supp. 751 (holding that such an
* Infra, Chapter XXI. action cannot be maintained against
" As to this see infra, § 1094 the company's treasurer); Nat.
et seq. Bank of New London v. Lake Shore,
426
§ 493-§ 573] CERTIFICATES § 513
may probably sue in assumpsit for damages sustained by the
company's breach of its legal duty or quasi-contractual obliga-
tion.' Secondly, he may proceed by bill in equity,^ or probably,
if his title to the shares be clear, by mandamus ' to compel the
company to recognize his title and register him as shareholder.
An owner of an undivided interest in a share is entitled to have
his right recognized by an entry on the company's books.*
§ 51 2- § 516. Right to a Share-Certificate.
§ 512. Definition of Certificate. — A share-certificate is noth-
ing more than a solemn affirmation, usually under the corporate
seal,' and signature of the appropriate officer or officers, that
the person named therein is entitled to a specified number
of shares." " A share-certificate," said Judge Thompson, " is a
solemn and continuing affirmation by the corporation that the
person to whom it was issued is entitled to all the rights and
subject to all the liabilities of a stockholder in the company in
respect of the number of shares named, and that the company
will respect his rights and the rights of every one to whom he
may transfer such shares [by refusing to admit any new trans-
feree to the rights of a shareholder except uf>on surrendering
of the certificate]." ' The last clause destroys the accuracy of
the definition ; for it is certainly not an essential part of a share-
certificate that the company should represent that no transfer
will be recognized except upon its surrender: but if the words
in brackets be omitted, the definition is correct.
§ 513. Right to a Certificate, in general. — The issue of a
share-certificate is never necessary in order to perfect a share-
etc. Ry. Co., 21 Ohio St. 221 (holding ' As to this see FUzhugh v. Bank
that the action cannot be maintained of Shepherdsville, 3 T. B. Monr. (Ky.)
by a mere equitable owner of shares). 126, 128; 16 Am. Dec. 90. Of. infra,
' See infra, § 934. § 921.
' See infra, ibid. ' See Richardson v. Delaware
" See infra, ibid. Loan Co., 9 Houst. (Del.) 354; 32
Of. People ex rel. Doyle v. N. Y. Atl. 980 (where the instrument in
Benevolent Soc, 3 Hun (N. Y.) 361 ; question although not called a share-
Delacy v. Neuse Nav. Co., 1 Hawks certificate would seem to have been
(N. Car.) 274; 9 Am. Dec. 636. such in legal effect).
* Salt River Canal Co. v. Hickey, ' Keller v. Eureka, etc. Mfg. Co.,
36 Pac. Rep. 171; 4 Ariz. 240. Cf. 43 Mo. App. 84, 87-S8; 11 L. R. A.
infra, § 1007. 472.
427
§ S13 CAPITAL AND SHARES [ChAP. X
holder's title. He is as much a shareholder before the issue
of the certificate as afterwards.' Nevertheless, every share-
holder has a right to demand a share-certificate as a muniment
of his title ^ — a right to have in his own possession some au-
thoritative evidence of his title. Of course, a transferee of shares
who has never presented his transfer for registration has no
right to demand the issue of a share-certificate.' The share-
certificate should correspond with the register of shareholders,
so that the company is not entitled to put any qualification in
the certificate which it is not entitled to put in the registry.* If
the shareholder has not paid for his shares in full, of course he
is not entitled to a certificate representing him to be a holder of
paid-up shares ; * but he is entitled to a certificate stating that
he is the holder of so many shares and mentioning the exact
amount which has been paid in on each." Strange to say, this
latter proposition seems to have been denied in several cases.^
It is doubtless true that a shareholder who is in default for non-
payment of calls is not entitled to any certificate.' If a person
is the holder of a number of shares upon which a certain pro-
portion has been paid, he has no right to demand that the whole
amount paid be applied to certain of the shares so as to make
them fully paid shares and entitle him to a certificate stating
them to be so paid up.°
A federal judge has recently announced that a shareholder
who owns twenty-five shares has no right to demand a separate
certificate for each share, such a demand being thought to be
' Supra, § 171. etc. R. R. Co., 44 Ga. 597, 598
' Burdett v. Standard Exploration (semble).
Co., 16 Times L. R. 112. Cf. Green v. Abietine Medical Co.,
= Lacaff V. Dutch MUler, etc. Co., 96 Cal. 322, 329-330; 31 Pac. 100.
31 Wash. 566; 72 Pac. 112. » Johnson v. Albany, etc. R. R.
* W. Key & Son (1902), 1 Ch. 467. Co., 54 N. Y. 416; 13 Am. Rep. 607
' Babcock v. Schuylkill, etc. R. R. (where the remedy against the share-
Co., 133 N. Y. 420; 31 N. E. 30. holder for refusal to pay the portion
' Fletcher v. McGUl, 110 Ind. 395, of his subscription remaining unpaid
405; 10 N. E. 651; 11 N. E. 779 had been barred by limitations);
(semble) ; 1 Morawetz on Priv. Gould v. Town of OneorUa, 71 N. Y.
Corps., 2d ed., § 472. 298 (holding that shareholder is not
' California, etc. Hotel Co. v. Cal- entitled to the certificate until inter-
lender, 94 Cal. 120 ; 29 Pac. 859 ; 28 est on overdue calls as well as the
Am. St. Rep. 99; Mobile, etc. R. R. principal is paid).
Co. V. Yandal, 5 Sneed (Tenn.) " Johnson v. Albany, etc. R. R.
29i,296 (semble); Fulgam V.Macon, Co., 54 N. Y. 416; 13 Am. Rep. 607.
428
§ 493-§ 573] CERTIFICATES § 515
unreasonable.' But for this expi-ession of judicial opinion, one
would have supposed that a shareholder might, if so minded,
insist upon a separate certificate for each share or unit of the
capital stock.
§ 514. Delay in issuing Certificate. — What is a reasonable
time for the company to delay issuing a share-certificate must
■depend largely upon circumstances. Some allowance must be
made, especially in the case of the first issue of shares, for the
mere physical labor of preparing and printing or engraving
the certificates. But the mere fact that considerable time must
elapse before certificates can be issued to some of the subscribers
does not justify the company in delaying the issue of certificates
to other subscribers.^ Now, by statute, in England a certificate
must be issued within two months after allotment.^
§ 515. Remedies for Refusal or improper Failure to issue Cer-
tificate. — The right to a share-certificate, if denied by the
•company, may be enforced by mandamus * or bill in equity.^
If the remedy in equity be resorted to by a shareholder who has
paid for his shares in property instead of in cash, the bill need
not aver the property so transferred to be equal in value to the
shares for which it was to be exchanged." The staiute of limita-
tions does not begin to run against the right of a shareholder to
compel the company to issue a certificate to him until a certificate
has been demanded by the shareholder and refused by the
company.' The refusal may also, at least in most cases, be
' Schell V. Alston Mfg. Co., 149 ' Bedford v. American Aluminum
Fed. 439. Co., 51 N. Y. App. Div. 537; 64
' Burdett v. Standard Exploration N. Y. Supp. 856; Davenport v.
Co., 16 Times L. R. 112. Piano Implement Co., 70 111.' App.
' Companies Act, 1907 (7 Edw. 161; Kinnan v. Forty-second St., etc.
VII, c. 50), § 5 (1). Ry. Co., 140 N. Y. 183; 35 N. E. 498;
* Hair v. Burnett, 106 Fed. 280 Wdls v. Green Bay, etc. Co., 90 Wise,
(where the writ was against the 442; 64 N. W. 69 (directors held
officers of the corporation) ; State proper but not necessary parties
€1 rd. Thompson v. Cheraw, etc. defendant).
R. R. Co., 16 S. Oar. 524; State ex " Davenport v. Piano Implement
rel. Phillips v. New Orleans Gas Co., 70 111. App. 161.
Light Co., 25 La. Ann. 413. ' Wells v. Green Bay, etc. Co.,
But see Baker v. Marshall, 15 90 Wise. 442; 64 N. W. 69;
Minn. 177; State ex rel. Elliot v. Mercer County Court v. Springfield,
Guerrero, 12 Nevada 105; Townes etc. Turnpike Co., 10 Bush (Ky.)
V. Nicholls, 73 Me. 515; State v. 254. As to what is sufficient de-
<Jarpenter, 51 Ohio St. 83; 37 N. E. mand, see Teeple v. Hawkeye Co.
261; 46 Am. St. Rep. 556. (Iowa), 114 N. W. 306.
429
§516
CAPITAL AND SHAKES
[Chap. X
treated as a conversion of the shares for which damages are
recoverable ; ^ or redress may be had in action of assumpsit
against the company.^ Undue delay in issuing a share-certifi-
cate will have the same effect as a peremptory refusal in enabling
the shareholder to sue for damages or for relief by mandamus or
in equity.' The refusal to issue a certificate, if the shareholder
elect to treat it as a conversion of the shares, relieves him from
any subsequent liability as shareholder to the corporation, its
receiver or liquidator,* or to its creditors. The shareholder may
also obtain an injunction against issuing a certificate for any of
his shares to any person other than himself.^
§ 516. Loss of Certificate. — If the certificate is lost or
destroyed, the shareholder may require the company to issue
to him a duplicate." As a condition to this relief, it would seem
that he should ordinarily be required to give a suflScient bond of
indemnity against any hability of the company by estoppel upon
the former certificate.' Where the certificate had been lost and
unheard of for twelve years, the issue of a dupUcate was required
' Withers v. Lafayette County
Bank, 67 Mo. App. 115; Baltimore
City Pass. Ry. Co. v. Sewdl, 35 Md.
239; 6 Am.' Rep. 402.
Cf. Burdett v. Standard Explora-
tion Co., 16 Times L. R. 112.
' Wyman v. American Powder
Co., 8 Cush. (Mass.) 168.
' Burdett v. Standard Exploration
Co., 16 Times L. R. 112.
* Potts V. Wallace, 32 Fed. 272.
° Bedford v. American Aluminum
Co., 51 N. Y. App. Div. 537; 54
N. Y. Supp. 856.
" Kinnan v. Forty-second St., etc.
Ry. Co., 140 N. Y. 183; 35 N. E. 498.
But see Keller v. Eureka, etc. Mfg.
Co., 43 Mo. App. 84; 11 L. R. A.
472 (containing a strong dissenting
opinion) ; Dempster v. Rosehill Cem-
etery Co., 206 111. 261 ; 68 N. E. 1070
(where the remedy was held to be
barred by laches).
As to statutory remedies in case
of loss or destruction of certificates,
see Biglin v. Friendship Ass'n, 46
Hun (N. Y.) 223 ; Hendon v. North
Carolina R. R. Co., 125 N. Car. 124;
34 S. E. 227; Hendon v. North Caro-
lina R. R. Co., 127 N. Car. 110; 37
S. E. 155 (holding that plaintiff need
not tender a bond before bringing
suit if his right to a certificate is
denied); Re Speir, 69 N. Y. App.
Div. 149; 74 N. Y. Supp. 555; Re
Hayt, 39 N. Y. Misc. 356; 79 N. Y.
Supp. 845 (remedy provided by a
state statute held applicable to
shares in a national bank) ; Re Coats,
75 N. Y. App. Div. 469; 78 N. Y.
Supp. 425; Travers v. North Caro-
lina R. R. Co., 133 N. Car. 322; 45
S. E. 651 (provision for holding new
certificate, in escrow for a period of
years held to be repealed by a stat-
ute requiring plaintiff to give
security). As to transfers by a per-
son who has lost his certificate, see
infra, § 928.
' Galveston City Co. v. Sibley, 56
Tex. 269; State ex rel. McCay v.
New Orleans Stock Exchange, 114
La. 324; 38 So. 204.
Cf. Kinnan v. Forty-second St.,
etc. Ry. Co., 140 N. Y. 183; 35 N. E.
498.
430
§ 493-§ 573] EQUALITY OF SHARES § 517
in Minnesota without insisting upon a bond of indemnity.'
Inasmuch as the lapse of time in such a case is the basis of the
plaintiff's title to relief, a judgment some years previous between
the same parties denying the same relief has been held to be no
bar.^ In Louisiana, a corporation was compelled to issue a
new certificate to take the place of one which had been lost with-
out a bond of indemnity being given and without any proof, so
far as the report discloses, of any great lapse of time after the
loss ; '" but this decision was placed upon the more than doubtful
ground that a purchaser of the certificate could have no claim
against the company,* and has been expressly overruled.^ In a
case where a bankrupt shareholder had absconded with the.
share-certificate, a federal court decreed that the company upon
being tendered a sufficient bond of indemnity should execute
another certificate to the assignee in bankruptcy.'
§ 517-§ 523. EQUALITY OF SHARES.
§ 517. Origin and Nature of Rule of Equality. — The rule
of law is that prima facie all the shareholders stand on an
equality. The courts have repeatedly declared that this prima
facie equality among the shareholders is not 'derived by implica-
tion from the construction of the incorporation paper, which in
the simple case states merely that the capital of the company
shall be such and such an amount divided into so many share's,
but is a corollary of the presumption of equality among partners.'
' Guilford V. Western Union Td. So. 174 (where ten years had elapsed
Co., 59 Minn. 332; 61 N. W. 324; since the loss).
50 Am. St. Rep. 407 (depending in * See infra, § 909 et seq.
part upon a local statute). ' State ex rd. McCay v. New
Cf. Guilford V. Western Union Orleans Stock Exchange, 114 La. 324,
Td. Co., 43 Minn. 434; 46 N. W. 70. 327 ;. 38 So. 204.
' Guilford v. Western Union Td. ° Wilson v. Atlantic, etc. R. R.
Co., 59 Minn. 332; 61 N. W. 324; Co., 2 Fed. 459.
50 Am. St. Rep. 407. ' South Durham Brewery Co., 31
Cf. Guilford v. Western Union Ch. D. 261 ; Guinness v. Land Corp.,
Td. Co., 43 Minn. 434; 46N. W. 70. 22 Ch. D. 349, 377 (semble); An-
' State ex rd. Phillips v. New drews v. Gas Meter Co. (1897), 1 Ch.
Orleans Gas Light Co., 25 La. Ann. 361.
413. But see Hutton v. Scarborough
Cf. State ex rd. Benedict v. South- Hold Co., 2 Dr. & Sm. 621 (over-
ern Mineral, etc. Co., 108 La. 24; 32 ruled).
431
§ 518 CAPITAL AND SHARES [ChAP. X
The true meaning of this pronouncement is that the equality
among the shareholders is not part of the company's unalterable
constitution but is, like the presumption of equality among
partners, a mere private matter for the shareholders concerned.
Any alteration in this prima facie equality involves the creation
of preferential rights, and will be considered below. The sub-
ject that now presses for attention is the legal idea of equality
among shareholders — what the law means by equality.
§ 518-§ 521. WHAT THE LAW MEANS BY EQUALITY BE-
TWEEN SHARES.
§ 518. Where Shares are of Difierent Nominal or Par Values. —
Commonly, all the shares are of the same nominal amount ; but
sometimes one class or set of the shares has a different par value
from another class or set. Where this is the case, the equality
which the law strives to maintain between the several shares is
an equality of nominal values rather than a mere numerical
equality. That is to say, where the capital consists partly of
one-pound shares and partly of five-pound shares, each five-
pound share is to be taken as the equivalent of five one-pound
shares.'
§ 519-§ 524. WHERE A LARGER PROPORTION PAID IN UPON
SOME SHARES THAN OTHERS.
§ 519. While Company a Going Concern — Calls, Dividends,
Interest on Amounts paid in Advance of Calls. — A case which
is both more common and more diflScult is where all the
shares are of the same nominal amount but where a larger
proportion has been paid in upon some of them than upon
others. Generally, of course, the same amount is paid in on
every share ; and all calls must be uniform upon all the shares.
But not infrequently some of the shares are issued as fully paid
in exchange for property or services, while only a part of the
nominal value of the other shares is paid in. Wherever this is
the case, the law contemplates that in all other respects the
shares shall stand upon an equality. It is true, where a greater
' Wakefidd Rolling Stock Co. Whiskey, etc. Co., 16 Times L. R.
(1892), 3 Ch. 165. See also Welsh 246.
432
§ 493- § 573] EQUALITY OF SHARES § 520
proportion has been paid upon some shares than upon others, any
'calls that may be made must be levied exclusively upon the latter
class of shares until the inequality is wiped out.' But with this
exception, which is apparent rather than real, shares of the same
nominal amount stand upon an equality irrespective of the fact
that a larger amount has been paid upon some of them than
others. Thus, all dividends must be divided among the share-
holders in proportion to the nominal amounts of their shares, and
the directors have no authority to pay a dividend in proportion
to the amounts respectively paid up on the shares.^ To be sure,
where a corporation receives from shareholders money paid-in
advance of calls, it may, by an agreement contemporaneous with
the payment, lawfully treat the transaction as a loan, and agree
to pay interest thereon ; ^ and, in that way, the advancing share-
holders may secure some of the advantages that would accrue to
them if dividends were payable proportionately to the amounts
paid in on the several shares.
§ 520- § 521. In Winding-up or Liquidation.
§ 520. Where Assets are more than sufficient to return paid-up
Capital. — Not merely are dividends payable only in propor-
tion to the nominal or par value of the shares irrespective of the
fact that greater amounts may have been paid in on some of
them than on others, but also, when a corporation is being wound
up, any surplus that may remain after satisfying all creditors and
returning to the shareholders the amount of capital respectively
paid in by them, must be likewise distributed among the share-
holders in proportion to the nominal amounts of their shares and
without reference to the fact that some of them had paid in more
than others.*
' Great Western Tel. Co. v. Bwm^ ' See Lock v. Qxieensland Land
ham, 79 Wise. 47 ; 47N. W. 373; 24 Co. (1896), A. C. 461, and infra.
Am. St. Rep. 698; Bowen v. Kuehn, § 548 and § 1340.
79 Wise. 53. ■• Birch v. Cropper, 14 A. C. 525;
" OakbankOU.Co.v.Crum,8A.C. Morrow v. Peterborough Water Co.,
65. Cf. Gdlerman v. AUas Foundry, 4 Ont. L. R. 324. Cf. Eclipse Mining
etc. Co. (Wash.), 87 Pac. 1059. Co., 17 Eq. 490.
But see Richardson v. Vermont, But see Sheppard v. Sdnde, etc.
etc. R. R. Co., 44 Vt. 613, 621. By. Co., 56 L. J. Ch. 866 ; 36 W. R. 1.
VOL. I. — 28 433
§ 521 CAPITAL AND SHARES [ChAP. X
§ 521. Where Assets are insufficient to return paid-Hp Capital.
— Where, in a winding-up, the assets after paying debts will not ■
suffice to return all the paid-up capital, they must first be applied,
if more has been paid in on some shares than on others, in repay-
ing to the holders of the first class of shares the difference between
the amounts paid up on them and on the other shares; and if
the assets are not sufficient to make good this difference, then a
call must be made on the other shareholders sufficient to do so.
This result, in the ordinary case, where some of the shares are
fully paid and some partly paid, may be reached by several
different methods of accounting.
(a) Method I. — In the first place, the amount remaining
unpaid on the partly-paid shares may be called in ; and the sum
thus obtained plus any assets remaining after the payment of
debts and expenses should then be divided pro rata among all
the shareholders,' all of whom, after the call, stand on an equality
in respect to the amounts paid in. Of course where this method
is adopted, there is no need actually to make and collect the full
amount of the call ; but by a short calculation the net amount to
be paid or received by the shareholders of the two classes
respectively may be determined, and the necessary distributions
or assessments may then be made. This method of accounting
is always availabfe, and will in the long run prove the simplest.
(6) Method II. — • Secondly, the assets in hand (after paying
debts and costs of liquidation) may be used in returning to the
holders of fully-paid shares the difference between the amounts
paid on their shares and the amounts paid on the partly-paid
shares; and the balance, if any, should then be distributed pro
rata among all the shareholders in proportion to the par value of
their shares.^ When this method is adopted, the shareholders
who have paid in the larger amounts cannot demand that interest
' Anglesea Colliery Co., 1 Ch. 555. shares over the amount paid on the
'■' See Scinde, etc. Bank Corpora^ o,ther shares which had been issued
tion, 6 Ch. 53 n. ; Wakefield Rolling on special terms by an increase of
Stock Co. (1892), 3 Ch. 165; Driffield capital, before any distribution was
Gas Light Co. (1898), 1 Ch. 451. made to the holders of the latter
But see Eclipse Mining Co., 17 class of shares, but that all the as-
Eq. 490, where upon very peculiar sets in hand after paying debts and
facts it was held that the holders of costs should be distributed pro rata
paid-up shares were not entitled to among all the shareholders without
be repaid the excess of the amounts regard to the amounts paid up on
deemed to have been paid on their their shares.
434
§ 493-§ 573] EQUALITY OF SHARES § 522
on the excess of the amounts paid on their shares over the
amounts paid on the other shares be paid to them before any
distribution is made to the other shareholders,' unless the
advance payments were made under contracts stipulating for
interest thereon.^ Where the surplus assets are not sufficient to
equalize the amounts paid up on the two classes of shares by
returning the excess payments to the holders of the first class,
then a sum sufficient for that purpose must be raised by a call on
the second class of shares ; ' but the matter is more complicated
than where the former method of accounting is used.
(c) Method III. — The third method of accounting is still
more complicated. According to that method, a sum should
be raised by a call on the partly-paid shares sufficient to pay to
the paid-up shareholders enough to make the two classes of
shares, after the call on the first class and the distribution of the
proceeds thereof among the holders of the second class, stand on
an exact equality in respect to the amounts paid in: after this
process of equalization has been completed, any assets in hand,
remaining after payment of debts and expenses, should be
distributed pro rata among all the shareholders.*
All these three methods of accounting lead to the same result ;
but as a practical matter it is submitted that the first is decidedly
preferable.
§ 522. Shares issued at a Premium. — Sometimes shares are
issued at a premium.* In such cases, of course, the premium is
absorbed in the general funds of the company ; and on dissolu-
tion the holders of those shares cannot demand that the premium
should be treated as capital paid in, and as such be returned to
them. Any distribution of assets in winding-up must be made
without regard to the circumstance that some of the shares were
issued at a premium." The amount of the premium may be
treated by the company as a reserve fund of accumulated profits.'
' Ex parte Maude, 6 Ch. 51. * Anglo-Continental Corporation.
' Exchange Drapery Co., 38 Ch. (1898), 1 Ch. 327.
D. 171 ; Wakefidd Boiling Stock Co. ^ Cf. infra, § 775.
(1892), 3 Ch. 165. « Driffield Gas Light Co. (1898),
' Provision Merchants Co., 26 1 Ch. 451.
L. T. 862. ' Hoare & Co. (1904), 2 Ch. 208.
Cf. infra, § 1334.
435
523 CAPITAL AND SHARES [ChAP. X
§ 523-§ 524. Provisions establishing different Rules of Equality.
§ 523. Nature of such Provisions — Distinguished from Pro-
visions creating Preferred Shares. — Provisions in statutes or
in regulations of corporations altering these rules of equality
resemble provisions creating preferential rights, and might
perhaps more logically be treated as a branch of the subject of
preferred shares; but for the sake of convenience they will be
disposed of at once. Such provisions differ from provisions
creating preferred shares in that, instead of aiming at the creation
of a preference, their object is the preservation of equality among
the shareholders by excluding the application of rules of law
which, while designed to maintain equality, have been thought to
destroy it.
§ 524. Construction of Provisions. — In the first place, the
principles stated above ' embody the legal conception of equality
and justice between shareholders who have paid different
amounts on their shares; and as those principles have been
settled upon by the judges as those most consonant to equity, any
provisions involving departures from those rules will be rather
strictly construed. A provision in a company's regulations that
profits shall be divided in proportion to the amounts paid up on
the respective shares does not affect the rule that in a winding-up
surplus assets after paying debts and returning paid-up capital
shall be divided in proportion to the nominal amounts of the
shares,^ nor the rule that in liquidation before any distribution of
assets to holders of partly-paid shares, the amounts paid in on the
several shares must be equalized.' Indeed, even a provision that
any distribution to members in winding-up proceedings shall be
in proportion to the amounts paid up on the shares held by them
respectively at the commencement of the winding-up does not
do away with the necessity for a call on the partly-paid shares for
the purpose of equalizing the shareholders.* Such a provision
' Supra, §§ 518-522. was that, if the assets should not be
' Birch V. Cropper, 14 A. C. 525. sufficient to return all paid-up capi-
' Ex parte Maude, 6 Ch. 51. tal, the loss should be borne by
* Ex parte Lowenfeld, JO li. T. 3; members "in proportion to the
Welsh Whiskey Distillery Co., 16 capital paid in, or which ought to
Times L. R. 246. The same result have been paid in on the shares held
has been reached where the provision by them respectively at the com-
436
§ 493- § 573] PREFERRED SHARES § 525
is taken to mean that after all calls necessary for purposes of
equalization have been made, the distribution including the
proceeds of the call shall be 'pro rata according to the amounts
then paid up on the respective shares.' Under provisions of this
kind, however, if the net assets in the hands of the liquidator or
receiver are suflBcient to return all paid-up capital, there is no
occasion for a call for purposes of equalization, and any surplus
after the return of capital must be distributed in proportion to
the varying amounts paid up on the several shares.^ Sometimes
where shares are issued as fully paid in exchange for property or
services, the special contract contains clauses negativing the
right of the holders to have a call made in the winding-up on the
other shareholders for the purpose of equalizing the paid-up
capital. This is the case when the contract provides that the
shares shall be treated as fully paid up "so that no call is to be
made in respect of them " ; for the latter clause will be construed
to mean to the extent that no call shall be made on them, and not
as giving their holders the other rights of owners of paid-up
shares.'
§ 525-§ 534. CREATION OF PREFERENTIAL RIGHTS.
§ 525. Power of Shareholders to create Preferential Rights by
mutual Agreement. — The rule of equality among the share-
holders which an attempt has been made above to elucidate
may, as already intimated, be altered by the persons affected.
That is to say, just as partners may by agreement among them-
selves alter or regulate the rights and obligations which in the
absence of agreement the law would annex to their relationship,
subject only to the restriction that the rights of third persons
must not be prejudiced, so shareholders may by mere mutual
agreement mould and control their individual rights arising from
membership in the corporation, and may in respect to such rights
confer upon some of their number special privileges or prefer-
ences. So-called subscriptions to shares upon special terms
may often be regarded as creating such preferential rights,
mencement of the winding-up." cates (1899), 1 Ch. 896. Cf. New
Anglo-Continental Corp. . (1898), 1 Transvaal Co. (1896), 2 Ch. 750.
Ch. 327. = Holyford Mining Co., Ir. R. 3
' Ex parte Lowenfeld, 70 L. T. 3. Eq. 208.
' Mutoscope and Biograph Syndi-
437
§ 526 CAPITAL AND SHARES [ChAP. X
although they have not been generally treated in that way.' The
individual rights most commonly affected by agreements for
preferences in favor of some shareholders are the rights of the
several shareholders to participate equally in dividends ; ' but
other purely individual rights of the shareholders stand on the
same footing. Thus, the right of all the shareholders to share
equally in a winding-up in the distribution of assets remain-
ing after payment of the company's debts is sometimes altered
by agreements whereby certain of the shareholders become en-
titled to a preference.^ So, the shareholders may agree that
no call shall be made on certain of the shares unless it be
necessary for payment of debts.*
§526. Nomenclature. — "Preferred Shares," "Preference
Shares," " Common Shares," " Ordinary Shares." — When pref-
erential rights, generally in respect to dividends, are given to any
class of shares, those shares are called in England preferred or
preference shares. In the United States, they are called pre-
ferred shares or preferred stock.* In England, the other or
deferred shares are called ordinary shares, while in America
they are usually called common shares or common stock. The
right to a preference in respect to dividends — that is to say, the
right to receive a dividend of a certain rate per cent before any
dividend is paid on the other shares — is not merely the most
common kind of preferential rights, constituting the distinguish-
ing feature of most preferred stock, but is also typical of the other
preferential rights which may be created in a similar way and
which may be reserved for subsequent and briefer consideration.
§ 527- § 530. Power to give Preference to some Shares in respect
of Dividends.
§ 527. In general. — The right to dividends is peculiarly
the individual, private right of each shareholder. Dividends
can be paid only when profits are earned and when therefore
' Rutland, etc. R. R. Co. v. Thrall, of so-called "special stock" which
35 Vt. 536; Waterman v. Troy, etc. carried certain peculiar rights and
B. R. Co., 8 Gray (Mass.), 433. which has little resemblance to the
' Infra, § 527-§ 530. preferred shares so common in Eng-
" Infra, § 564. land and the United States. Am.
* Infra, § 571. Tube Works v. Boston Machine Co.,
' The statutes of Massachusetts, 139 Mass. 6; 29 N. E. 63.
until recently, authorized the issue
438
§ 493-§ 573] PREFERRED SHARES § 528
creditors are not jeopardized. Moreover, the dividends, when
paid, go into the private pocket of each shareholder. If, there-
fore, any shareholder chooses to waive his right to a dividend,
in whole or in part, in favor of some other shareholder, neither
the creditors nor the public nor any other shareholder is in any
way affected or has any ground for complaint. Moreover, sub-
sequent transferees of the shares who may take with notice of
any such waiver would take subject thereto. The waiver or
agreement would, to borrow an expression from the law of real
property, "run with" the share as against all except bona fide
purchasers for value. By means of these principles, the issue of
preferred shares may often be sustained without the aid of any
express enabling statute.'
§ 528. Creation of Preference at Organisation of Company by
Incorporation Paper or Contemporaneous By-laws. — Thus, if the
incorporation paper divide the capital stock into preferred and
ordinary or common shares, the holders of the former class of
shares being entitled to a dividend up to a limited amount in
preference to shareholders of the latter class, every signatory of
the instrument and every person who may subsequently sub-
scribe for shares assents to the arrangement; and furthermore
- all future transferees of shares are affected with notice of the
contents of the instrument and, being therefore charged with
notice of the preference given to the one set of shareholders,
would take subject thereto. The legality and effectiveness of
classifying the shares in this way in the incorporation paper may,
accordingly, be regarded as settled.^ Indeed, if a corporation at
its organization by mere by-law divides its shares into preferred
and common, the rights of the shareholders will be governed by
the terms of that by-law.'
' See Kent v. Quicksilver Mining preferred shares which was con-
Co., 78 N. Y. 159, 178-179; Higgins tained in the "articles of associa-
V. Lansingh, 154 111. 301; 40 N. E. tion" recorded contemporaneously
362 ; Wilson v. Parvin, 119 Fed. 652 ; with the memorandum of association
56 C. C. A. 268. was effective.
' Roberts v. Roberts-Wicks Co., Cf. Kent v. Quicksilver Mining
184 N. Y. 257; 77 N. E. 13; 112 Co., 78 N. Y. 159, 178-179.
Am. St. Rep. 607; Nelson Coke Co. ' Cf. Kent v. Quicksilver Mining
V. Pellatt, 4 Ont. L. R. 481 ; Harrison Co., 78 N. Y. 159, 178-179.
V. Mexican Ry. Co., 19 Eq. 358; See also cases cited supra as to
South Durham Brewery Co., 31 Ch. D. classification of shares in English
261 ; in which last two cases the articles of association,
court held that an authorization of
439
§ 529 CAPITAL AND SHARES [ChAP. X
§ 529. Creation of Preference after Shares have been issued on
an Equality. — Even after shares have been issued upon an
equal footing, the holders may by unanimous agreement re-
classify them so as to give preferential rights to some of them.*
This is often done in pursuance of some scheme of reorganizatiorj,
when all the original shares are surrendered and new shares
issued, some of which carry preferential rights. Without,
however, such unanimous consent, where shares have been
issued with equal rights, no preference can be given to some over
the others,'' — not even by a resolution or by-law passed by a
majority of the shareholders. Thus, where shares as issued stood
upon an equality, a by-law which attempts to confer a preference
upon the shares of any shareholders who may pay a certain
premium to the company is void as against a dissentient minority
of the shareholders unless they have become barred by laches.^
§ 530. Issue of new Shares with Preference over previously
issued Shares. — The same rule would seem to apply where a
portion of the original authorized capital which had not been
previously subscribed is proposed to be issued with a preference
over the holders of the previously allotted shares ; * and shares
' For this purpose, where the where a later decision between the
stock-certificate has been indorsed same parties, Hutton v. Scarborough
to an assignee but before the trans- Hotel Co., 2 Dr. & Sm. 521, was
fer is registered, the assent of the overruled. The American courts
transferor is not sufficient although would probably agree: Railroad v.
the company have no notice of the Knoxville, 98 Tenn. 1, 21; 37 S. W.
transfer: Campbell v. Am. Zylonite 883.
Co., 122 N. Y. 455; 25 N. E. 853; But see Hazlehurst v. Savannah,
11 L. R. A. 596. etc. R. R. Co., 43 Ga. 13; Ingraham
' Campbell v. Am. Zylonite Co., v. National Salt Co., 130 Fed. 676,
122 N. Y. 455; 25 N. E. 853; 11 679 (headnote inadequate); 65
L. R. A. 596. The power to reor- C. C. A. 54; Wilson v. Parvin, 119
ganize the capital by dividing the Fed. 652 ; 56 C. C. A. 268.
shares into classes is expressly con- The rule as stated in the text
ferred by a recent British statute, may, however, be evaded by issuing
7 Edw. Vll, c. 50 (Companies Act, in payment for property acquired
1907), § 39. by the company ordinary shares to-
^ Kent V. Quicksilver Mining Co., gether with "certificates of indebt-
78 N. Y. 159, 179-180 (semble). edness" sufficient to cover guaran-
* Hutton V. Scarborov.gh Hotel Co., teed dividends thereon for a period
4 De G. J. & S. 672 (affirming s. c. of years: Ingraham v. National Salt
2 Dr. & Sm. 514). This decision was Co., 130 Fed. 676; 65 C. C. A. 54.
approved and declared to be "ob- Ci. Strickland y. Nat. Salt Co. {ii. J.),
viously correct" in Andrews v. Gas 64 Atl. 982 (semble).
Meter Co. (1897), 1 Ch. 361, 368,
440
§ 493-§ 573] PREFERRED SHARES § 530
issued by increasing the authorized capital cannot well be dif-
ferentiated in this respect from the previously unissued shares of
the original capital.' In England, however, it is now held, in
spite of an early decision to the contrOTy,^ that a company may
by altering its articles of association take to itself the power of
increasing its capital by the issue of preferred shares, and may
then proceed to issue the shares of the new capital with a pref-
erence over the shares of the original capital.' The hardship of
this doctrine in upsetting the supposedly vested right of the
original shareholders to rank equally with any shares that might
subsequently be issued is perhaps more apparent than real. For
if the corporation should issue bonds or debentures, as unques-
tionably it might lawfully do, the position of the original share-
holders would be worse rather than better than if the money were
raised by an issue of preferred shares.'' Nevertheless, as already
stated, the issue of preferred shares upon an increase of capital
except by unanimous consent is in the United States generally
held to be unwarranted. Of course, if the issue of shares with a
preference over the existing shares is authorized by the incor-
poration paper or by regulations which were adopted prior to
the issue of the deferred or common shares and of which the
subscribers to the common shares had either actual or con-
structive notice, the issue of the preferred shares is quite
lawful.^ And even if preferred shares are issued by a mere
majority vote of the existing shareholders when a unanimous
vote is requisite, yet subsequent unanimous acquiescence
will be equivalent to prior authorization, and will validate the
' Ernst V. Elmira Mun. Imp. ' Andrews y. Oas Meter Co. {W97),
Co., 24 N. Y. Misc. Rep. 583; 54 ICh. 361. Ci. Hinckley v. Schwartzs-
N. Y. Supp. 116. child, etc. Co., 45 N. Y. Misc. 176;
The only possible distinction is 91 N. Y. Supp. 893.
that upon an increase of capital the ' Harrison v. Mexican Ry. Co.,
original shareholders have generally 19 Eq. 358, 367-368.
an option of subscribing to the new ' Harrison v. Mexican Ry. Co.,
shares in proportion to their hold- 19 Eq. 358; South Durham Brewery
ings of the old, and are consequently Co., 31 Ch. D. 261.
legs injuriously affected by the ° Kent v. Quicksilver Mining Co.,
annexing of preferential rights to 78 N. Y. 159. But see Ashhury v.
the new shares than if no such Watson, 30 Ch. D. 376. Cf. infra,
option had existed. § 534.
' Huttonv. Scarborough Hotel Co.,
2 Dr. & Sm. 521.
441
§ 531 CAPITAL AND SHARES [ChAP. X
§ 531. Statutes authorizing Issue of Preferred Shares. — Some-
times statutes expressly authorize the issue of preferred shares
and define the incidents thereof. It is submitted, however, that
such statutes should not be construed as impliedly prohibiting
the issue of preferred shares with different incidents and rights,
by any method that would be permissible without affirmative
statutory authorization. A statute which in form is enabfing
may by implication limit the number of preferred shares which
the corporation may issue. A statute authorizing the issue of
preferred shares to an amount equal to two thirds of the capital
actually paid in means capital paid in at the time the issue is
authorized by resolution rather than the time when the pre-
ferred shares -are actually issued.'
§ 532. What words Sufficient to authorize Issue of Preferred
Shares carrsring sundry Preferences. — However this may be,
the question may often arise what language is sufficient to
authorize the issue of shares with preferential rights; and this
question is essentially the same whether the language to be
construed is found in a statute, incorporation paper, or contract.
It has been held that authority to issue new shares of such
nominal amount and on such conditions as a special resolution
might determine does not justify the issue of preferred shares ; ^
and the same has been held to be true of authority to issue shares
"of such nominal value and subject to such conditions as to the
payment of calls and proportion of profits as may be determined
by the company." ' On the other hand, power to issue new
shares "with and subject to such rules, regulations, privileges and
conditions" as the company in general meeting may determine
will warrant the issue of preferred shares.* A clause empower-
ing the company to issue shares with such preferences as it may
deem expedient authorizes the issue of shares having a pref-
erence in respect to capital as well as in respect to dividends ; *
' Continental Varnish, etc. Co. v. tions as the general meeting shall
Secretary of State, 87 N. W. 901; direct."
128 Mich. 621. " Moss v. Syers, 32 L. J. Ch. 711.
' Melhado v. Hamilton, 28 L. T. * Harrison v. Mexican Ry. Co.,
N. s. 578 (affirmed in 29 L. T. n. s. 19 Eq. 358.
364). " Bangor Slate Co., 20 Eq. 59
Cf. HiUton V. Scarborough Hotel (headnote inadequate). Cf. London
Co., 2 Dr. & Sm. 521, where the & New York Investment Co. (1895),
original articles authorized the in- 2 Ch. 860. See also infra, § 564.
crease of capital "on such condi-
442
§ 493-§ 573] PEEFEREED SHARES § 533
and power to issue preferred shares includes power to issue
'' guaranteed" shares/ for there is no substantial difference
between the two. Indeed, it has been said that where a company
is empowered to issue preferred shares, no conditions or restric-
tions being attached to the authority, the company may attach
such conditions as it chooses.- Where a statute authorized a
railway company to "increase their capital in such manner as
they may deem most advisable," the Virginia Court of Appeals
reached the somewhat startling conclusion that the company was
authorized to issue shares which should not merely carry a
preferential cumulative dividend, but should also be entitled to
the dividend whether sufficient profits were earned or not.^ And
a Massachusetts statute authorizing a corporation to "issue
preferred stock . . . the said company to give its guaranty
that each share of stock shall receive semi-annual dividends of
four dollars on each share," was held to authorize the issue of
stock the dividends upon which should be paid whether or not
profits should be earned.* But in general it is submitted that
statutes should not be held to authorize such anomalous forms of
security without very expHcit language.
§ 533. Injunction against unauthorized Issue of Preferred
Shares. — - Ordinarily, where without due authority the com-
pany is about to issue preferred shares, any shareholder may
secure an injunction against the issue. In one case, however,
where such a preliminary injunction was asked for, Vice-Chan-
cellor Knight Bruce, without considering whether or not the
proposed issue was ultra vires, refused to grant the application,
upon the ground that to interfere at that stage in a manner which
the court might on final hearing determine to be improper would
be more likely to do harm than good, when some of the new
preferred shares had been already issued and when the vast
majority of the shareholders favored the issue.*
' Provly V. Michigan, etc. B. R. 320, 354. See also infra, § 542,
Co., 1 Hun (N. Y.) 655, 661. § 543.
' Hackett V. Northern Pac.Ry. Co., * Williams v. Parker, 136 Mass.
36 N. Y. Misc. 583 ; 73 N. Y. Supp. 204. The case proceeds in a large
1087. measure upon local considerations
' Gordon's Eocrs. v. Richmond, etc. peculiar to Massachusetts.
R. R. Co., 78 Va. 501 (headnote ' Fidden v. Lancashire, etc. Ry.
inadequate). Co., 2 De G. & Sm. 531.
Cf. Skiddy v. Atlantic, etc. R. R. Cf.. Mackintosh v. Flint, etc. R. R.
Co., Re Stewart's Petition, 3 Hughes Co., 32 Fed. 350.
443
§ 534 CAPITAL AND SHARES [ChAP. X
§ 534. Efiect of unwarranted issue of Preferred Shares — Es-
toppel — Acquiescence. — Even if preferred shares are un-
warrantably issued, the issue is not a mere nuUity. Thus, the
validity cf the preferred shares cannot be called in question by
those who received and for several years held them, collecting
the preferred dividend thereon.' Upon this principle, one who
actively promotes an issue of preferred stock and subscribes for
a large number of shares thereof cannot recover back the amount
paid therefor after the company has become insolvent, upon the
ground that the issue was illegal and that the consideration had
therefore failed.^ Moreover, if all the shareholders acquiesce in
the illegal issue of preferred shares, then on the principles set
forth above the improper issue is condoned and validated.^ And
so, if the corporation resolves to issue preferred shares without
any preference as to capital and the officers wrongfully insert in
the certificates of stock a clause conferring a preference in respect
to capital, this preference is valid if the common shareholders
acquiesce in the issue.* Where, however, money is advanced to
a company upon the agreement that payment shall be made in
its preferred shares, the lender is entitled, upon the discovery
that the company had no power to create preferred shares, to a
return of the money, notwithstanding the fact that the corporation
may in the meantime have acquired by act of the legislature
power to issue the shares; ^ in this case the intended subscriber
to the preferred shares had been guilty of no laches sufficient to
raise an estoppel.
' Branch v. Jesup, 106 U. S. 468, Alstyne, 31 Mich. 76; 18 Am. Rep.
481; 1 Sup. Ct. 495. Cf. Long v. 156.
Gudph Lumber Co., 3lXlp.Ca,n.C.V. But see Reed v. Boston Machine
129; Manufacturers' Paper- Co. v. Co., 141 Mass. 454; 5 N. E. 852.
AUen-Iiiggins Co., 154 Fed. 906. A ' Kent v. Quicksilver Mining Co.,
different rule prevailed in Massa- 78^.Y. 159; Taylorv.Soiiih,etc.R. R.
chusetts as to an illegal issue of Co., 13 Fed. 152. See supra, § 530.
so-called "special stock," which * Toledo, etc. R. R. Co. v. Conti-
under certain conditions the stat- nental Trust Co., 95 Fed. 497, 529,
utes of that state authorized to be 531 ; 36 C. C. A. 155.
created: Am. Tube Works v. Boston ^ Anthony v. Household Sewing
Machine Co., 139 Mass. 5; 29 N. E. Machine Co., 16 R. I. 571; 18 Atl.
63. 176; 5 L. R. A. 575.
" Banigan v. Bard, 134 U. S. 291; But cf. Manufacturers' Paper Co.
10 Sup. Ct. 565. Cf. Lockhart v. Van v. AUen-Higgins Co., 154 Fed. 906.
444
f 493-§ 573] ALTERATION OP PHEFERENCES § 536
§ 535-§ 539. Alteration of Preferential Rights.
§ 535. In general. — Where shares are issued with pref-
erential rights whether the issue was originally valid or has be-
come so by acquiescence of the deferred shareholders, the right
to the preference is a vested one which is as sacred from sub-
sequent alteration by the company as is the ordinary right to
equality of shares which are issued without preference one over
another.' Thus, a preferred shareholder may enjoin the company
from permitting the holders of common shares upon payment of
a bonus to exchange them for preferred shares which should rank
pari passu with the preferred shares previously issued, and that
too although the preferential rights of the earlier issue of pre-
ferred shares was created by a precisely similar option of ex-
change of common shares for preferred, which former exchange
of common shares for preferred had been validated by long-
continued acquiescence of all the shareholders.^ So, where pre-
ferred shares are issued under statutory authority, a subsequent
arrangement by which the shares held by persons assenting to
the scheme are exchanged for shares ranking on a parity with
the common or deferred shares does not affect the non-concurring
preferred shareholders.^
§ 536. Preference created by Incorporation Paper. — Where
the method of dividing profits between preferred and ordi-
nary shareholders is fixed by the incorporation paper, no
alteration therein can be made (unless in the method, if any,
provided by law for altering that instrument) ; and this is true
although the relative rights of shareholders are not required
by law to be determined by that instrument.* One judge has
expressed the opinion that not even the unanimous assent of
the shareholders would authorize an alteration in their rela-
tive rights as fixed by the incorporation paper.' To be sure,
' A recent British statute au- ' West Chester, etc. R. R. Co. v.
thorizes companies to alter or abro- Jackson, 77 Pa. St. 321 (headnote
gate preferential rights attaching to misleading).
a certain class of shares provided a * Ashbury v. Watson, 30 Ch. D.
majority of the shareholders of that 376. See supra, §_ 120.
class assent. 7 Edw. VII, c. 50 (Com- " Ashbury v. Watson, 30 Ch. D.
panies Act, 1907), § 39. 376, 384 (semble), per Bagallay,
" Kent V. Quicksilver Mining Co., L. J.
78 N. Y. 159 (headnote inadequate),
affirming s. c. 12 Hun 54.
445
§ 537 CAPITAL AND SHARES [ChAP. X
if the incorporation paper after providing for the issue of pre-
ferred shares with certain preferential rights authorizes the com-
pany to alter those rights, the shares would be taken subject
to this power of alteration.' For instance, where an incorpora-
tion paper, after providing for shares carrying a non-cumulative
preferential dividend of seven per cent per annum, further pro-
vides that any shares of the present or any increased capital
may be issued with such rights and priorities as the company
may from time to time determine, the company on increasing
its capital may issue shares ranking pari passu with the original
preferred shares.^ Where the law provides a method of alter-
ing the incorporation paper, the power to alter the rights of
preferred or common shareholders inter sese, as fixed in that
instrument, depends on different considerations, and would
seem to exist to the same extent as (and no further than) the
power to alter such rights when fixed by mere regulations or
by-laws of the company. Where a company's incorporation
paper provides that the preferred shares shall carry a preferen-
tial dividend at a certain rate the corporation cannot under a
general power to alter the instrument make an amendment
reducing the preferential dividend.'
§ 537. Effect of Proceedings for Reduction of Capital. — The
effect of proceedings for the reduction of capital upon the pref-
erential rights of preferred shareholders is considered in detail
below.*
§ 538. Effect of Consolidation with another Corporation. —
The effect of a consolidation with another corporation upon
the rights of preferred shareholders cannot be described in gen-
eral terms applicable to all cases. In some cases, the "con-
solidation" may take the form of a formal dissolution and
winding-up of the constituent companies. In such cases the
rights of preferred shareholders in the dissolved corporation'
will be governed by the principles set forth below relating to
the rights of preferred shareholders in winding-up or liquida-
tion. In other cases, there is a coalescing or merger of the con-
stituent corporations without any formal dissolution of either
' Welsbach Incandescent Gas Light ' Pronick v. Spirits Distributing
Co. (1904), 1 Ch. 87. Co., 58 N. J. Eq. 97; 42 Atl. 586.
' Underwood v. London Music * Infra, § 656, § 672~§ 674.
Hall (190y, 2 Ch. 309.
446
§ 493-§ 573] ALTERATION OF PREFERENCES § 539
of them, the new company being regarded as the successor of
both of them. In such cases, the statute under which the con-
solidation is effected usually provides explicitly that the con-
solidated company shall be liable for the obligations of the old
companies. It is, to say the least, extremely doubtful whether
such a provision has any application to the preferential rights
of preferred shareholders. It is easy to suggest many questions
which are very hard to answer. For instance, if both of the
constituent corporations have issued preferred shares, do both
stand upon an equality, or does one outrank the other? In a
New York case, where the terms of the consolidation agreement
seem clearly "to have contemplated that the rights of holders of
preferred stock in one of the constituent«companies should con-
tinue unaffected by the consolidation, the right of such a share-
holder was enforced against profits earned by the consolidated
company.' On the other hand, in a very recent case arising
under the New Jersey statute, the Vice-Chancellor of that state
conceded that the right to a continuance of the preferred cumu-
lative dividend might be terminated for the future by the con-
summation of a consolidation, but held that a consolidation
agreement which provided for a surrender or commutation of
the right to cumulative dividends which were overdue at the
time of the consolidation, and for payment of which profits had
been earned and accumulated as a reserve fund, was unlawful
as against a dissenting preferred shareholder.^ Certain it is
that the mere issuance of preferred shares should not be deemed
a waiver of an existing statutory right to consolidate ; ^ the only
question is how the rights of the preferred shareholders are to
be accommodated to the changed conditions brought about by
the consolidation.
§ 539. Waiver of Preference. — A preferred shareholder may
always waive the preferential rights attaching to his shares,
and as a result of such waiver the shares will be converted,
virtually, into common or ordinary shares,* except that if the
common shares have any advantages over the preferred shares
' Boardman v. Lake Shore, etc. the court in Colgate v. U. S. Leather
Ry. Co., 84 N. Y. 157. Co. (N. J.), 67 Atl. 657.
^ Colgate v. U. S. Leather Co. * Pendleton v. Harris-Emery Co.,
(N. J.), 67 Atl. 657. 124 Iowa 361; 100 N. W. 117.
^ This was distinctly declared by
447
§ 540 CAPITAL AND SHAKES [ChAP. X
in respect to voting rights, or in respect to being subject to no
limit as to the amount of dividends payable, or otherwise, no
such "waiver" by a preferred shareholder can have the effect of
diminishing those advantages without the consent of the or-
dinary shareholders.
No attempt to coerce the preferred shareholders into waiv-
ing their rights will be tolerated. Hence the payment of in-
terest upon dividends in arrear upon cumulative preferred
shares to such preferred shareholders as assent to a change in
the incorporation paper whereby the preferential dividend is
made non-cumulative would be unlawful.'
§ 540- § 548. Status of Preferred Shareholders as Members and
not Creditors of the Company.
§ 540. Preferred Shareholders entitled to same Rights and Sub-
ject to same Liabilities as other Shareholders except as otherwise
provided. — The preferential rights which preferred shares
may carry may be and, as will presently be explained at length,
are exceedingly diverse ; but however various they may be, and
whatever phraseology may be used in creating them, the funda-
mental fact remains that the holders are members of the cor-
poration.^ Consequently, a subscription to preferred shares
cannot be treated as a loan of money or extension of credit to
the corporation.'
Indeed, preferred shareholders are shareholders, and as such
are entitled to all the rights, and are subject to all the liabilities,
which attach to ordinary shareholders, except in so far as those
rights or liabilities may be varied, expressly or by clear implica-
tion, by the statute, by-law, or convention under which the pref-
erence is created. Thus, preferred shareholders have no greater
rights than ordinary shareholders to enjoin the creation or fund-
ing of debts by the company,* or other matters of internal manage-
' WiUcox V. Trenton Potteries Co., ' Cf. People ex rel. S. Cohn & Co.
64 N. J. Eq. 173; 53 Atl. 474 (sem- v. MUler, 180 N. Y. 16; 72 N. E.
ble; the points decided being that 525.
the agreement in question should not " Graver v. Cavanaugh (Ind.), 82
be construed eo as to authorize such N . E. 104.
payment, and that, if it should, the ' Thompson v. Erie By. Co., 11
whole agreement and scheme would Abb. Pr., n. s., 188.
not on that account be vitiated).
448
§ 493-§ 573] STATUS of preferred shareholders § 541
ment that may affect them prejudicially, or be thought so to do.
Conversely, preferred stockholders are subject to any statutory
liability to creditors imposed upon holders of shares.' Even a
statute providing that preferred shareholders shall be free from
any liability to creditors does not exempt them from a liability
in favor of creditors imposed by another statute upon share-
holders v^ho accept a return of capital in the shape of illegal
dividends or otherwise,^ and a fortiori does not exempt them
from the ordinary liability of shareholders to pay the par value
of their shares to the company or its receiver.' Moreover, any
statutes which apply to shares in general are prima facie applica-
ble to preferred shares. Consequently, a statute regulating the
times or periods for the declaration of dividends applies to
dividends on preferred shares.*
§ 541. Preferred Shareholders not entitled to Rights of Creditors.
— As preferred shareholders are members of the company, it
follows that they are not creditors, and are not entitled, even in
respect to their preferential dividends, to the rights of creditors.
Hence, they cannot claim payment of their preferential divi-
dend except out of funds properly available for the payment
of dividends, — that is, out of profits. Their claim is, there-
fore, subject to the rights of creditors, secured and unsecured,
— even those whose debts were contracted after the issue of
the preferred shares ^ and with knowledge of the rights attach-
ing thereto." Moreover, preferred shareholders are not taxable
as holders of certificates of indebtedness of the company.'
Similarly, preferred stock cannot be charged up as a liability in
determining whether the indebtedness of a railway company is so
great as to justify it in refusing to run separate passenger trains.'
' Railroad Co. v. Smith, 48 Oh. a lien on the company's property
St. 219; 31 N. E. 743. "next after its indebtedness, " debts
" American Steel, etc. Co. v. Eddy, contracted subsequently as well as
89 N. W. 952; 130 Mich. 266. prior to the issue of the preferred
' Kirkpatrick v. American Alkali shares are referred to: Warren v.
Co., 140 Fed. 186. King, ubi supra.
' Marqxmnd v. Federal Steel Co., " Warren v. King, 108 U. S. 389,
95 Fed. 725. 400; 2 Sup. Ct. 789.
* St. John V. Erie By. Co., 22 ' Miller v. Ratlerman, 47 Oh. St.
Wall. 136; Warren v. King,' IQS 141; 24 N. E. 496.
U. S. 389. ' People ex rel. Cantrell v. St.
Of. Mercantile Trust Co. v. Balti- Louis, etc. R. R. Co., 176 111. 512;
nu>re, etc. R. R. Co., 82 Fed. 360. 52 N. E. 292; 35 L. R. A. 656.
Where the preferred shares are to be
VOL. I.— 29 449
§542
CAPITAL AND SHARES
[Chap. X
§ 542. What Circumstances insufficient to confer on Preferred
Shareholders Rights of Creditors. — That the preferred share-
holders may have been originally creditors, having surrendered
bonds of the company in exchange for the preferred shares,
does not make them any the less members as distinguished
from creditors of the company.' Moreover, the fact that the
preferred dividend may be called "interest" — a term more ap-
propriate to compensation for the use of money lent — is im-
material ; ^ and, also, the case is not altered because the statute
under which the company is organized designates the preferred
shares as "stock" simply, and not capital stock.' Nor is the
fact that the preferred stockholders do not possess the right
of voting at shareholders' meetings suflBcient evidence that they
should be deemed creditors rather than members of the corpo-
ration.* Indeed, even if payment of the preferred dividend is
"guaranteed" by the company, the preferred shareholders are
entitled to nothing except out of net profits: the guarantee
will be construed to apply only to payment out of any funds
legally available for dividends.^ And, of course, a guarantee
• St. John v. Erie Ry. Co., 22 ' Chaffee v. Rutland R. R. Co., 55
Wall. 136. Cf. Warren v. King, 108
U. S. 389; 2 Sup. Ct. 789; Field v.
Lamson, etc. Co., 162 Mass. 388, 390-
391; 38 N. E. 1126; 27 L. R. A. 136.
But see McVity v. Albro Co., 90
N. Y. App. Div. 109; 86N. Y. Supp.
144; affirmed short in 180 N. Y.
554; 73 N. E. 1126 (where the cred-
itor was allowed to avoid the con-
tract by which he accepted the
guaranteed shares and recover on
his original claim).
2 Warren v. King, 108 U. S. 389,
399; 2 Sup. Ct. 789; Branch v.
Jesu-p, 106 U. S. 468, 475 ; 1 Sup. Ct.
495 ; Hamlin v. Toledo, etc. R. R. Co.,
78 Fed. 664, 669; 24 C. C. A. 271;
36 L. R. A. 826; M'Laughlin v.
Detroit, etc. Ry. Co., 8 Mich. 100.
Cf. Mercantile Trust Co. v. Balti-
more, etc. R. R. Co., 82 Fed. 360;
State ex rel. Thompson v. Cheraw, etc.
R. R. Co., 16 S. Car. 524; Ohio Col-
lege V. Rosenthal, 45 Oh. St. 183 ; 12
N. E. 665; Waterman v. Troy, etc.
R. R. Co., 8 Gray (Mass.) 433.
Vt. 110, 127 et seq.; State ex rel.
Thompson v. Cheraw, etc. R. R. Co.,
16 S. Car. 524.
* Hamlin v. Toledo, etc. R. R. Co.,
78 Fed. 664, 671; 24 C. C. A. 271;
36 L. R. A. 826; Miller v. Ratter-
man, 47 Oh. St. 141; 24 N. E. 496.
' Stevens v. South Devon Ry. Co.,
9 Hare 313, 325; Lockhart v. Vari
Alstyne, 31 Mich. 76; 18 Am. Rep.
156; Taft v. HaHford, etc. R. R. Co.,
8 R. I. 310; 5 Am. Rep. 575; Chaf-
fee V. Rutland R. R. Co., 55 Vt. 110;
Miller v. Ratterman, 47 Oh. St. 141 ;
24 N. E. 496; Field v. Lamson, etc.
Mfg. Co., 162 Mass. 388, 392-394;
38 N. E. 1126; 27 L. R. A. 136;
Long V. Guelph Lumber Co., 31 Up.
Can. C. P. 129.
See also Branch v. Jesup, 106
U. S. 468 (headnote inadequate);
1 Sup. Ct. 495 ; Mercantile Trust Co.
V. Baltimore, etc. R. R. Co., 82 Fed.
360; Waterman v. Troy, etc. R. R.
Co., 8 Gray (Mass.) 433.
But see WiUiama v. Parker, 136
450
§ 493-§ 573] STATUS of preferred shareholders § 543
by another corporation of the punctual payment of the pre-
ferred dividend would not affect in any way the nature of the
preferred shareholders' position.' Even an agreement on the
company's part to create no mortgage "except expressly subject
to the prior lien" of the preferred shareholders will not make
the preferred shareholders creditors.^ A so-called mortgage or
deed of trust of the company's property to secure the payment
of preferential dividends, even when containing provisions for
foreclosure or entry by the trustee in case of default, will be
construed as a mere agreement between shai:eholders and not
as evincing an intention that the "preferred stockholders"
should be deemed to be creditors.'
§ 543. Express agreement that Preferred Shareholders shall
have Rights of Creditors Ultra Vires. — In fact, even an express
agreement to pay the preferential dividend whether or not profits
sufficient for the purpose be earned would be ultra vires as a
return of capital to shareholders,^ and a fortiori a pledge or ap-
propriation of a part of the company's capital to secure such
Mass. 204; McVity v. AUrro Co., 90 St. 534; Ohio College v. Rosenthal,
N. Y. App. Div. 109; 86 N. Y. Supp.
144 ; affirmed short in 180 N. Y. 554 ;
73 N. E. 1126.
■ Miller v. Batterman, 47 Oh. St.
141, 161-162 (headnote inadequate) ;
24 N. E. 496. Cf. infra, § 1338.
' Hamlin v. Toledo, etc. R. R. Co.,
78 Fed. 664; 24 C. C. A. 271; 36
L. R. A. 826; Miller v. Ratterman,
47 Oh. St. 141; 24 N. E. 496.
' MUler v. Ratterman, 47 Oh. St.
141, 159etseq.; 24N. E.496; Black
V. Hobart Trust Co., 53 Atl. 826; 64
N. J. Eq. 415; affirmed short in 56
Atl. 1131; 65 N. J. Eq. 769; Guar-
anty Trust Co. V. Galveston City
R. R. Co., 107 Fed. 311; 46 C. C. A.
305.
But see Burt v. RatUe, 31 Oh. St.
116; Gordon's Exrs. v. RichTnond,
etc. R. R. Co., 78 Va. 501 ; Skiddy v.
Atlantic, etc. R. R. Co., Re Stewart's
Petition, 3 Hughes, 320, 354; Fitch
V. Wetherbee, 110 III. 475.
* Lockhart v. Van Alstyne, 31
Mich. 76; 18 Am. Rep. 156; Paines-
ville, etc. R. R. Co. v. King, 17 Oh.
45 Oh. St. 183, 194; 12 N. E. 665;
Hamlin v. Toledo, etc. R. R. Co., 78
Fed. 664 (headnote inadequate) ; 24
CCA. 271; 36L. R. A. 826; Cratty
V. Peoria Law Library Ass'n, 219 111.
516; 76 N. E. 707.
Cf. Phillips v. Eastern R. R. Co.,
138 Mass. 122, 135-138 ; McVity v.
Albro Co., 90 N. Y. App. Div. 109;
86 N. Y. Supp. 144; affirmed short
in 180 N. Y. 554; 73 N. E. 1126;
Guaranty Trust Co. v. Galveston City
R. R. Co., 107 Fed. 311; 46 C C A.
305 ; Smith v. Alabama Fruit Grow-
ing, etc. Ass'n, 123 Ala. 538 ; 26 So.
232 (where a bond conditioned for
payment of dividends by obligor
company on shares held by obligee
was held void).
But see Gordon's Exrs. v. Rich-
mond, etc. R. R. Co., 78 Va. 501;
Skiddy v. AUantic, etc. R. R. Co., Re
Stewart's Petition, 3 Hughes 320,
354; Williams v. Parker, 136 Mass.
204 ; Fontana v. Pacific Can Co., 129
Cal. 51; aiPac. 580.
451
§ 544 CAPITAL AND SHARES [ChAP. X
a dividend is likewise illegal.' A guarantee of dividends whether
profits are earned or not is no less ultra vires because it may
have been given in part consideration for services rendered to
the company.^ Likewise, a mortgage of property of the com-
pany to secure to a shareholder a return of his capital, in pref-
erence to creditors, in a winding-up of the company, is illegal
and void.' To be sure, in one case where a company had issued
scrip, convertible into mortgage bonds at the option of the
holder, to represent preferential dividends for the payment of
which no profits were available, the Supreme Court of Vermont
held that the scrip certificates were enforceable obligations of
the company although no sufficient profits for their payment
had ever been earned.* The case proceeds upon the ground
of estoppel, and lends no color to the view that dividends on
preferred shares should stand in respect to the matter before
the court on any different footing from dividends on common
or ordinary shares. Nevertheless, it is submitted that a con-
trary decision would have been preferable. Where a corporation
buys property and in payment therefor agrees to issue paid-up
shares and to pay a certain sum in annual cash instalments,
any dividends declared on the shares in the meantime to be ap-
pUed in reduction of the cash instalments, the fact that such
annual instalments equal dividends at a certain rate on the
shares does not make the agreement void as an evasion of the
rule which prohibits a corporation from guaranteeing dividends
on its own shares.^
§ 544. Further Explanation of Rule that Pl-eferred Share-
holders are not Creditors. — Of course, as respects preferential
dividends that are earned and declared, the preferred share-
holders occupy the position of creditors; and perhaps in some
' Guinness v. Land Corporation, Carbide, etc. Co., 64 N. J. Eq. 231,
22 Ch. D. 349; Hamlin v. Toledo, 244-245; 53 Atl. 1057; Black v.
etcB. R. Co., 78 Fed. 664 (headnote Hobart Trust Co., 53 Atl. 826; 64
inadequate); 24 C. C. A. 271; 36 N. J. Eq. 415; affirmed short in 56
L. R. A. 826. Atl. 1131; 65 N. J. Eq. 769; Reagan
2 Elevator Co. v. Memphis, etc. v. First Nat. Bank, 157 Ind. 623.
B.i?. Co., 85 Tenn. 703; 5S. W. 52; * Chajfee v. Rutland R. R. Co.,
4 Am. St. Rep. 798. Cf. Smith v. 55 Vt: 110.
Alabama Fruit Growing, etc. Ass'n, ' Strickland v. Nat. Salt Co. (N,
123 Ala. 538; 26 So. 232. J.) 64 Atl. 982 (semble); Ingraham
' Boney v. Williams, 55 N. J. Eq. v. Nat. Salt Co., 130 Fed. 676; 66
691; 38 Atl. 189; Reed v. Helois C. C. A. 54.
452
§ 493-§ 573] STATUS of preferred shareholders § 545
cases the necessity for a declaration of the preferential dividend
when earned may be dispensed with by the terms of the agree-
ment stipulating for the preference.' Although preferred share-
holders are to be postponed to creditors, of course the principal
of all the company's indebtedness need not be paid off before
paying the preferred dividend ; ^ all that is meant is that the
preferential dividends can only be paid out of funds that might
legally be used for ordinary dividends. The case is not altered
in this respect by the fact that at the organization of the com-
pany its declared poUcy was to contract no debts, the indebted-
ness having been subsequently contracted for the common
benefit of both classes of shareholders.^
§ 545. Sullivan v. Portland, etc. R. R. Co., 94 U. S. 806. —
A very peculiar case in the United States Supreme Court would
seem to be founded on the principle that preferred shareholders
cannot by any contract or agreement with the company entitle
themselves to the rank of creditors. A railway company had
issued certificates of indebtedness bearing interest at the rate
of ten per cent per annum, and redeemable at any time at the
pleasure of the company. These certificates were a first lien
on a part of the company's line. The corporation had also
issued preferred shares which were entitled to a preferential
dividend at the same rate, — ten per cent fer annum. The com-
pany proposed to the certificate-holders to refrain for several
years from exercising its privilege of redeeming the certificates
in consideration of the agreement by the certificate-holders to
accept six per cent yearly in lieu of ten, the money thus saved
to the company to be applied in paying dividends to those pre-
ferred shareholders who should agree to accept new six per cent
preferred stock instead of the original ten per cent stock. This
proposition having been accepted by the certificate-holders and
by some of the preferred shareholders, the company's entire
line of railway was sold under a mortgage which as to the por-
tion covered by the lien of the certificates was a junior charge.
Those preferred shareholders who had accepted the above-
stated proposition filed a bill to compel the purchaser to pay
to them as dividends the four per cent annual interest released
• See infra, § 561, § 562. ■ Belfast, etc. B. R. Co. v. Belfast,
=■ Belfast, etc. R. R. Co. v. Belfast, 77 Me. 445 ; 1 Atl. 362.
77i!fe. 445; 1 Atl. 362.
453
§ 546 CAPITAL AND SHARES [ChAP. X
by the certificate-holders. But the court held that the plaintiffs
were not creditors of the company, but mere shareholders or
members, and that they were not entitled as against creditors
to the security of the certificate-holders, which was prior to the
mortgage under which the sale was made, and that therefore
the bill should be dismissed.' It is submitted that the gist of
the case is that the preferred shareholders could not be entitled
to the rights of creditors or mortgagees, and therefore could not
have priority over the mortgage under which the road was sold.
§ 546. Tests for distinguishing Shareholders from Creditors. —
Although preferred shareholders are thus separated from credit-
ors by a line of demarcation, yet it is possible to imagine a form
of security the holders of which would lie very close to the line
between shareholders and creditors. For instance, the holders
of income bonds are creditors of the corporation; but in many
respects their rights are very similar to those of preferred share-
holders. One distinction is that an income bondholder has
generally no vote or voice in the corporate management, while the
holder of preferred shares has usually the same voting rights as
a holder of the same number of ordinary shares. But sometimes
preferred shareholders have no vote ; and the difference between
such preferred shareholders and income bondholders is for
practical purposes not much more than a difference in name.
Nevertheless, even such preferred shareholders, although shorn
of their voting rights, are yet members of the company, while
the income bondholders occupy the theoretically very differ-
ent position of outsiders who hold contractual obligations of
the company.^ According to some authorities, the distinction
between preferred shareholders and creditors of the corporation
lies in the fact that sooner or later there must come a time for
repaying creditors while preferred shareholders may be entitled
to a perpetual income ; ' but this cannot be the right test, for
some securities, such as the English "perpetual debenture stock"
or the income bonds of some American companies, carry the
right to interest in perpetuity, and yet the holders thereof are
creditors as opposed to members of the corporation. At any
' Svllivan v. Portland, etc. B. R. ' Kent v. QuicksiLver Mining Co.,
Co., 94 U. S. 806. 78 N. Y. 159, 177-178.
' Cf. Re Bodman (1891), 3 Ch.
135 (containing a good discussion).
454
§ 493-§ 573] STATUS of preferred shareholders § 547
rate, little good can come from puzzling over anomalous kinds of
securities the holders of which lie close to the line between pre-
ferred shareholders and creditors. Such legal monsters serve ,
only to obscure a distinction that in the main is easy to make.
We have little difficulty in distinguishing a girl from a fish ; but,
if we should encounter a mermaid, we might have trouble in
determining in which category the creature should be placed. A
subscriber, however, to "preferred stock" has a right to insist
that the certificate given to him shall be unambiguous, and shall
not leave in doubt the question whether he is to be deemed a
member or a creditor of the company.'
§ 547. Statutes conferring on Preferred Shareholders some of
the Rights of Creditors. — Express legislation sometimes confers
upon preferred shareholders rights which usually belong only to
creditors, and which without such statutory sanction the policy of
the law would prevent from being conferred upon shareholders.
Such statutes frequently confuse or obliterate the distinction
between shareholders and creditors. For example, a Maryland
statute authorizes the issue of so-called preferred stock the
holders of which have priority over subsequent mortgages.^ So
some statutes have been held tq authorize the issue of "preferred
stock" upon which dividends should be payable whether or not
profits be earned.' The rights thus given to "preferred stock-
holders" by statute may even be such as to induce the court to
conclude that, in spite of the name,* they are creditors and not
members of the company. Thus, where an Ohio statute author-
ized the issue of "preferred stock" which was to be redeemed
by the company at a fixed time, and the dividends upon which
were guaranteed by the company, the payment of the principal
and interest or "dividends" being secured by a bond and
mortgage, and the holders of the stock having no right to vote
' State ex rel. Thompson v. Che- (where a statute authorizing issue of
raw, etc. R. R. Co., 16 S. Car. 524. preferred stock by an embarrassed
' Heller v. Marine Bank, 89 Md. railway company was held to au-
602 ; 43 Atl. 800 ; 73 Am. St. Rep. thorize the payment of the preferen-
212; 45 L. R. A. 438; Rogers v. tial dividends out of future earnings
Citizens' Nat. Bank, 93 Md. 613; without first making good a prior
49 Atl. 843. Cf. Gordon's Exrs. v. loss or impairment of capital).
Richmond, etc. R. R. Co., 78 Wa,. 501. 'That the word "stock" does
' Williams v. Parker, 136 Mass. not indicate per se that the holders
204. Cf . Cotting v. New York, etc. R. are members and not creditors of
R. Co., 54 Conn. 156; 5 Atl. 851 the company, see supra, § 496.
455
§ 548 CAPITAL AND SHAHES ' [ChAP. X
and being declared by the statute exempt from a liability to
creditors, which by the state constitution attached to all mem-
bers of corporations, the court concluded that the so-called " pre-
ferred stockholders" were really not members but creditors of
the company.'
§ 548. " Interest-bearing Stock." — A word or two of further
explanation of so-called interest-bearing stock. Where any
undertaking is entered upon involving the construction of ex-
tensive works, a greater or less period of time must elapse after
the capital is contributed before it can become productive. A
railway company, for example, cannot earn profits until several
years after its organization. In such cases, in former days — for
the practice is much' less common now than formerly — the
company would agree, as an incentive to investors, to pay
"interest" on the amount of capital paid in on the several shares,
until the line should be completed. If such an agreement were
interpreted as a contract to pay interest during the period of
construction, during which in the nature of things no profits
could be earned, it might, on the principles stated above, be
illegal and void,^ except so far as clearly sanctioned by statute.*
But, wherever possible, the agi-eement should be construed to
mean that, after the completion of the road and its establishment
on a profit-earning basis, the company would apply the profits
in paying to those who had contributed to its capital in the days
of its infancy a sum, nominally interest, but in its real nature a
preferred dividend, equal to the amount of interest at the stipu-
' Burt V. RaiHe, 31 Ohio St. 116. ' Pittsburgh, etc. R. E. Co. v.
Said the court (p. 130): "A mort- County of Allegheny, 63 Pa. St. 126,
gage creditor, although denominated 136.
a 'preferred stockholder' is a mort- But see Milwaukee, etc. R. R. Co.
gage creditor nevertheless; his inter- v. Field, 12 Wise. .340; Miller v.
est is not changed into a 'dividend' Pittsburgh, etc. R. R. Co., 40 Pa. St.
by calling it a dividend. Notliing 237; 80 Am. Dec. 570; M'Laughlin
is more common in the construe- v. Detroit, etc. Ry. Co., 8 Mich. 100.
tion of statutes and contracts than See also infra, § 1340.
for the court to correct such self- ' Pittsburgh, etc. R. R. Co. v.
evident misnomers by supplying the County of Allegheny, 63 Pa. St. 126,
proper words." 137; Manice v. Hudson River R. R.
Cf. Totien & Co. v. Tison, 54 Ga. Co., 3 Duer (N. Y.) 426. Cf. Com-
139; Savannah, etc. Bldg. Co. v. Sil- panics Act, 1907 (7 Edw. VII., c.
verberg, 108 Ga. 281; 33 S. E. 908; 50), § 9.
Cook v. Equitable Bldg., etc. Ass'n,
104 Ga. 814, 828-829; 30 S. E. 911.
456
§ 493-§ 573] EXTENT OF PREFERENCE § 549
lated rate on the sums respectively paid in by them, before
devoting the earnings to dividends to other shareholders or to
any other purpose.'
§ 549-§ 571. EXTENT OF PREFERENTIAL RIGHTS AS BETWEEN
PREFERRED AND DEFERRED SHAREHOLDERS.
§ 549. How Extent of Preference determined. — Preferred
shares properly so called carry preferential rights over the other
shares, but as to all non-members of the company, such as
creditors, rank in all respects as any ordinary shares. The pref-
erence concerns the shareholders inter sese, but in no way affects
anybody else. A very great variety of such preferences of one
class of shareholders over another is possible. The extent and
character of the preference is not indicated by the designation
of the shares as "preferred" (which merely indicates that a
preference of some kind is intended),^ but must be determined
by construction of the statute, incorporation paper, by-law,^ or
agreement by which the preference is created. The language of
the preferred shareholder's share-certificate is not conclusive as
to his rights; but the antecedent resolutions and proceedings
are admissible evidence upon the question of the nature and
extent of his preference.* So, too, where the preference is given
in a scheme of reorganization, the court, in order to determine
the extent of the preference, will look not merely at the formal
agreement, but also at the original plan of reorganization and at
the certificates of stock, all the instruments being part of one
transaction ; * but, unless for the purpose of connecting to-
' Wright V. Vermont, etc. R. R. Ry. Co., 84 N. Y. 157, 171-173;
Corp., 12 Gush. (Mass.) 68; Water- Scott v. B. & O. R. R. Co., 93 Md.
man v. Troy, etc. R. R. Co., 8 Gray 475, 498-499; 49 Atl. 327.
(Mass.) 433. Cf. Bales v. Androscoggin, etc. R.
Of. Barnard V. Vermont, etc. R. R. R. Co., 49 Me. 491; BaiLey v. Rail-
Co., 7 Allen (Mass.) 512; Richardson road Co., 17 Wall. 96.
V. Vermont, etc. R. R. Co., 44 Vt. 613. But see Smith v. Cork, etc. Ry.
But see Pittsburgh, etc. R. R. Co. Co., 6 Ir. Rep. Eq. 65, 68-69 (where
V. County of Allegheny, 63 Pa. St. the court held that a preferred share-
126. holder's right was determined by
' Hackett v. Northern Pac. Ry. his certificate and refused to look at
Co., 140 Fed. 717. a prior resolution of the company
' Belfast, etc. R. R. Co. v. Belfast, not referred to in the certificate).
77 Me. 445; 1 Atl. 362. » Bailey v. Railroad Co., 17 Wall.
* Boardman v. Lake Shore, etc. 96 (headnote inadequate).
457
§ 550 CAPITAL AND SHAKES [CeAP. X
gether the various written instruments, parol evidence of the
understanding or intention of the parties is not admissible.'
As already mentioned,^ the general principle, in the light of
which every provision for a preference must be construed, is
that, except so far as otherwise clearly provided, the preferred
shareholders stand on an equality with the common or deferred
shareholders. The burden of proof, so to speak, is on the
shareholder who asserts a preference over his fellows.
§ 550-§ 563. Preference as to Dividends.
§ 550. What Words will confer Preference as to Dividends. —
A fixed dividend that is guaranteed is a preferred dividend
although not expressed so to be.^ Moreover, where shares are
denominated "preferred stock" and are entitled "to the pay-
ment of six dollars per share semi-annually" the holders are
entitled to a preference over the other stockholders although it
is not expressly provided that their six per cent dividend shall be
paid before any dividend is paid on the other shares.*
§ 551. Whether Preference is Cumulative. — The first ques-
tion usually raised as to the preferential dividend is whether the
preference is cumulative or not. That is to say, when preferred
shares carry a preferential dividend of a certain rate per cent per
annum, are they entitled to claim that if the profits of one year
are not sufiicient to pay that dividend in full the deficiency must
be made good out of the profits of the next or some succeeding
year before anything can be paid to the holders of the common
shares? If so, the preferred shares are said to be cumulative
preferred shares; if not, they are said to be non-cumulative.
Prima facie, the preference is cumulative. Thus, where pre-
ferred shares are entitled to a preferential yearly dividend of so
much per cent, without more being said, the preference is cumu-
lative ; ^ and this is true whether the preferential dividend is
' BaUeyv. Baaroad Co., 17 Waa. Co., 1 De G. & J. 606; Webb v.
96, 105-106. Earle, 20 Eq. 556; West Chester, etc.
' Supra, § 540. B. B. Co. v. Jackson, 77 Pa. St. 321
' Boardman v. Lake Shore, etc. (headnote misleading); Smith v.
By. Co., 84 N. Y. 157, 173-174 (head- Cork, etc. By. Co., 3 Ir. Rep. Eq. 356,
note inadequate). affirmed, 5 Ir. Rep. Eq. 65; Fidelity
' Bates V. Androscoggin, etc. B. B. Trust Co. v. Lehigh Valley B. B. Co.
Co., 49 Me. 491. (Pa.), 64 Atl. 829.
^ Henry v. Great Northern By. Cf. Crawford v. Northeastern By.
458
§ 493-§ 573] PREFERENCK AS TO DIVIDENDS § 552
described as merely "preferred" or as "guaranteed." ' Indeed,
where a dividend of so much per cent per annum is "guar-
anteed," it is a cumulative preferential dividend although no
preference be expressly provided for.^ On the other hand, where
DO annual preferential dividend is provided for, but where
the provision is merely that the preferred shareholders shall be
entitled to a dividend not to exceed so much per annum, the pref-
erence is non-cumulative.' The mere fact that the fixed annual
preferential dividend is expressed to be payable on certain days
— as on the first days of June and December — will not render
the preference non-cumulative, especially where the dividend is
guaranteed ; * but where the provision is that the preferred
shareholders shall be entitled to a preference dividend of so much
per cent "out of the profits of each year," an intention is evinced
to let each year stand on its own bottom, and accordingly the
preference is non-cumulative.^ A provision that the annual
preferential dividends shall accumulate during the period of
three years to the extent they are not paid, entitles the preferred
shareholders to an amount equal to three annual preferential
dividends before any dividends are paid on the deferred shares
even though no dividends at all were paid until long after the
expiration of the three years."
§ 552. ESect of cumulative Preference — Whether Interest
is claimable on Arrearages of cumulative fref erred Dividends. —
Even where the preferential dividend is cumulative, there is
ordinarily no right to interest on the arrearages, or passed divi-
dends ; ' but where profits properly available for the payment
of the preferential dividends were wrongfully diverted by the
company to the payment of dividends on the common shares,
the preferred shareholders may recover interest on their unpaid
Co., 3 Jur. N. S. 1093; Matthews v. Co., 84 N. Y. 157, 176 (the preferen-
Great Nprthern Ry. Co., 28 L. J. Ch. tial dividend was "guaranteed").
375. ' Staples v. Eastman's Photo-
' Carry v. Londonderry, etc. Ry. graphic, etc. Co. (1896), 2 Ch. 303.
Co., 29 Beav. 263. See also Belfast, etc. R. R. Co. v.
' Boardman v. Lake Shore, etc. Belfast, 77 Ue. 445; 1 Atl. 362.
Ry. Co., 84 N. Y. 157, 173-174 (head- » Gardner Savings Bank v. Taber-
note inadequate). Prang Art Co., 189 Mass. 363; 75
' Elkins V. Camden, etc. R. R. Co., N. E. 705.
36 N. J. Eq. 233 (headnote mislead- ' Corry v. Londonderry, etc. Ry.
ing). Co., 29 Beav. 263.
* Boardman v. Lake Share, etc. Ry.
459
§ 553 CAPITAL AND SHARES [ChAP. X
dividends as damages for the company's wrongful use of the
funds. ^
§ 553. Whether Payments to Preferred Shareholders in Excess
of Cumulative Preferred Dividends in one year chargeable against
Deficiency in svisequent Year. — Where the preference is cumu-
lative and the preferred shareholders are entitled to share pro
rata in any excess of dividends after the deferred shareholders
have received a dividend at the same rate as the preferential
dividends, dividends paid to the preferred shareholders in excess
of the preferential dividend in one year canhot be charged against
a deficiency in a subsequent year, but the amount of such
deficiency must accumulate and be paid out of the earnings of
future years before any further, dividends are paid on the
deferred shares, just as if the preferred shareholders had never
been paid in any year prior to the beginning of the deficit more
than their preferential dividend.^ *
§ 554. Whether Profits in Excess of Preferential Dividend are
divisible pro rata among both Preferred and Common Shareholders.
— The contention has been advanced that where a fixed pref-
erential dividend is payable on preferred shares, the holders are
likewise entitled, if the profits are more than suflBcient to pay that
dividend, to participate rateably with the common shares in any
other dividend that may be declared. This contention, however,
is oh its face unreasonable, and has been overruled by the courts ; *
for the principle that should furnish a guide in all such questions
as to the extent of preferential rights is that, equality between the
shares being the legal conception of equity, provisions altering
the rule of equality must be construed strictly, so as not unduly
to enlarge the difference in the rights attaching to the several
classes of shares.
§ 555. Whether Preferred Shares may participate in Profits re-
maining after paying on both Classes of Shares a Dividend equal to
the Preferred Dividend. — When the preferred shares ^re en-
titled to a preferential dividend of so much per cent per annum,
without any greater explicitness being used, a serious question
' Boardman v. Lake Shore, etc. " Scott v. B. & 0. R. R. Co., 93
Ry. Co., 84 N. Y. 157, 186-190; Md. 475; 49 Atl. 327.
Prouty V. Michigan, etc. R. R. Co., 1 Cf. Bailey v. Railroad Co., 17
Hun (N. Y.) 665, 667. WaU.* 96.
' Fidelity Trust Co. v. Lehigh
Valley R. R. Co. (Pa.), 64 Atl. 829.
460
§ 493-§ 573] PREFERENCE AS TO DIVIDENDS § 555
may be raised whether they are forever limited to that dividend
or whether they may not participate proportionately with the
common shares in any surplus profits remaining for distribution
after paying the common shares a dividend equivalent to the
preferential dividend. In a Maryland case/ upon the reorganiza-
tion of the Baltimore and Ohio Railroad Company preferred
shares were issued which were entitled to receive out of the net
profits of each year such yearly dividend (non-cumulative) as
the .directors might declare up to but not exceeding four per cent
before any dividends should be set apart or paid on the common
stock. For several years, the four per cent dividend was regu-
larly paid to the holders of preferred shares, but no dividend was
paid upon the common stock. The company then became more
prosperous, and was about to pay a dividend of four per cent
upon both classes of shares, when a preferred stockholder applied
for an injunction against such distribution, praying a declaration
that any profits remaining after the payment of the preferential
dividend ought to be distributed fro rata among both classes of
shares, or that any surplus after paying four per cent to common
as well as preferred stockholders should be distributed 'pro rata.
The former contention sought to exaggerate the preference of
the preferred shares to a preposterous degree, and as stated above
certainly could not be sustained.'' Its rejection was suflScient to
justify a refusal of the injunction, since there was no pretense
that the company expected at that time to pay more than four
per cent to the holders of common stock. The court, however,
proceeded to express the opinion that under no circumstances
could the preferred shareholders get more than four per cent.
This opinion, however, may well be questioned. For if it be
sound, the common shares have one very important preference
over the so-called preferred shares, although the language used
nowhere exhibited any intention to prefer the common shares in
any respect whatsoever. The whole object was to define the
limits of a preference to be given to the preferred shares. Accord-
ingly, where the provision was that the preferred shares "should
bear a dividend of six per cent per annum and should rank in
all respects in priority" to the other shares, an English judge
expressed the opinion that the meaning was "to give to the
■ Scott V. B. & 0. R. R. Co., 93 ' Supra, § 554.
Md. 475; 49 Atl. 327.
461
§ 556 CAPITAL AND SHARES [ChAP. X
holders of the preference shares a first dividend at the rate of six
per cent out of profits, then to give the holders of ordinary shares
a dividend up to the amount of 6 per cent out of profits, and if
any profits should remain after paying those two dividends to
allow the ordinary and preferential shareholders to divide them
equally or proportionately." ' It is submitted that this is the
better general rule, and that the case in the Maryland Court of
Appeals, if it is to be regarded as more than a mere dictum upon
this question, should be supported upon the special circumstances
adverted to by that court in its opinion.
§ 556. Rights where both Classes of shares are to participate
equally in Profits remaining after paying on both Classes of Shares
Dividends eqval to the preferred Dividend. — At any rate, cases
sometimes occur where, either by express provision or by judicial
construction of an ambiguous provision, both classes of shares
are entitled to participate equally in any profits that may re-
main for distribution after the common shares have received
a dividend equal to the preferential dividend of the preferred
shares. Where this is the case, if the preferred shares are cumu-
lative, they cannot claim anything beyond their preferential
dividend until the common shareholders have not merely re-
ceived a dividend for the current year equivalent to the prefer-
ential dividend but also have been compensated for all arrears
or passed dividends, so that taking into consideration the entire
period since the issue of the shares, each common shareholder
shall have received as much as each preferred shareholder.^ If
the preferred shares were non-cumulative, it might be plausibly
argued that an intent was evinced that each year should stand on
its own bottom. But, nevertheless, the sound doctrine is believed
to be that unless a different intention is very clearly expressed
the common shareholders must be placed on an equality with
the preferred as to the whole period since the issue of the stock,
whether the preferred shares be cumulative or not, before any
-pro rata division among both classes is proper. Whether the
' Alexandra Palace Co., 21 Ch. Co., 25 W. R. 524. But see contra:
D. 149, 157. The terms of the reso- Gordon's Exrs. v. Richmond, etc. R.
lution defining the rights of the pre- R. Co., 78 Va. 501, 518. Cf. Fidelity
ferred shares appear more clearly Triist Co. v. Lehigh Valley R. R. Co.
from the report of the case in 46 L. (Pa.), 64 Atl. 829 (stated supra,
T. 730. § 553).
' Allen V. Londonderry, etc. Ry.
462
§ 493-§ 573] PREFERENCE AS TO DIVIDENDS § 559
preference be cumulative or not, each ordinary share must re-
ceive as much as each preferred share has actually received
when the whole period since the issue of the stock is taken into
account, before the two classes of shares can be deemed to have
been put upon an equality.
§ 557. How Preferential Dividend payable — Gold, Cash, Bonds,
etc. — Where dividends are paid in bonds or other obligations
of the company, as may sometimes lawfully be done, the rights
of the preferred shareholders to a preference are of course the
same as if the dividends were paid in cash.' In the absence of
some peculiar stipulation, however, or consent, preferred share-
holders have the right to insist that their preferential dividend
be paid in cash and not in bonds or other securities ; ^ but the
common or deferred shareholders cannot, it seems, object to
paying the preferential dividend in stock rather than in money.'
There may be an express stipulation that the preferred dividend
shall be payable in gold, but in the absence of such a provision
payment may be made in any legal tender.*
§ 558. Provisions for Termination of Preference. — Where
preferred shares are entitled "to the payment of six dollars
per share semi-annually until the net earnings of the road
sh^l be suflBcient to pay an interest of six per cent per annum
on all the stock issued," it seems that when once the earn-
ings of the road are suflBcient for one whole year to pay a
dividend of six per centum on all the stock, the preferred share-
holders would thereafter have no rights superior to the holders
of the other shares ; ^ but the fact that for six months or any
other fraction of a year the profits may have been sufficient to
pay a dividend on all the shares at the rate of six per cent per
annum does not put an end to the preference.*
§ 559. Effect of Cancellation or Surrender of some of the Pre-
ferred Shares. — Where some of the preferred shares are can-
celled or exchanged for common shares, the holders of the re-
' Gordon's Exrs. v. Richmond, ' Howell v. Chicago, etc. By. Co.,
etc. B. B. Co., 78 Va. 501. Cf. HoweU 51 Barb. (N. Y.) 378.
V. Chicago, etc. By. Co., 51 Barb. * Baltimore, etc. B. R. Co. v.
(N. Y.) 378. State, 36 Md. 519.
See also infra, § 568. " Bates v. Androscoggin, etc. B.
' M'Laughlin v. Detroit, etc. By. B. Co., 49 Me. 491, 503 (semhie).
Co., 8 Mich. 100. » Bates v. Androscoggin, etc. R.
B. Co., 49 Me. 491.
463
§ 560 CAPITAL AND SHARES [ChAP. X
maining preferred shares are entitled to all the subsequent profits
until their preferential dividends are paid, and not merely to
the proportion of such profits which they would have received
if the holders of the cancelled or exchanged shares had retained
their rights.'
§ 560. Discretion of Company as to withholding Preferred Divi-
dends although earned. — In general, the holders of preferred
shares cannot require payment of their preferential dividend,
even if the funds available for that purpose have been earned,
unless the dividend has been declared in the ordinary way by
the directors of the corporation. That is to say, the preference
given to the preferred shareholders is between themselves and
the other shareholders, and does not deprive the company of
its discretion to accumulate profits, as a reserve fund, to make
good a loss of fixed capital, or for other purposes, instead of
distributing them as dividends. Hence, although profits suffi-
cient to pay the preferential dividend may have been earned, the
directors may ordinarily withhold declaration of the preferred
dividend if so to do is honestly and reasonably believed by them
to be for the best interest of all concerned in the company,^ and
this is true although the preferred dividend is "guaranteed"
by the company.' A provision that the preferential dividend
shall be dependent on the profits of each particular year will
not be construed as pledging the profits to such payment so as
to deprive the directors of their discretion to use them in the
' West Chester, etc. B. R. Co. v. Co., 7 Allen (Mass.) 512 (headnote
Jackson, 77 Pa. St. 321, 328 (head- inadequate),
note misleading). But see Mackintosh v. Flint, etc.
' Bond V. Barrow Hcematite Steel R. R. Co., 34 Fed. 582, 598-601
Co. (1902), 1 Ch. 353; New York, (where the court held, among other
etc. R. R. Co. V. Nichols, 119 U. S. things, that as between preferred
296; 7 Sup. Ct. 209 (where the di- and common shareholders the ex-
rectors devoted net earnings to the pense of permanent betterments
building of a double track, erection should not be paid out of earnings,
of buildings, construction of docks, with the result of diminishing the
and other improvements, instead of preferred dividends). d.SeaiUe Trust
paying the preferred dividend) ; Mc- Co. v. Pitner, 18 Wash. 401 ; 51 Pac.
Lean v. Pittsburgh Plate Glass Co., 1048; Cratty v. Peoria Law Library
169 Pa. 112; 28 Atl. 211. Ass'n, 219 111. 516; 76 N. E. 707.
Cf. Hazeltine v. Belfast, etc. R. R. ' Field v. Lamson, etc. Mfg. Co.,
Co., 79 Me. 411; 10 Atl. 328; 1 Am. 162 Mass. 388; 38 N. E. 1126; 27
St. Rep. 330; Storrow v. Texas, etc. L. R. A. 136.
Mfg. Ass'n, 87 Fed. 612; 31 C. C. A. Cf. Barnard v. Vermont, etc. R. R.
139; Barnard v. Vermont, etc. R. R. Co., 7 Allen (Mass.) 612.
464
§ 493-§ 573] PREFERENCE AS TO DIVIDENDS § 561
business' of the company.' Similarly, a clause in an incorpora-
tion paper which provides that as between the holders of the
different classes of shares, "the profits available for dividend
shall be applicable as follows: (1) to the payment of a non-
cumulative preferential dividend" with further provisions as
to the distribution of any excess, does not override a clause in
the contemporaneous articles of association which purports to
authorize the directors to accumulate profits as a reserve fund,
so that the directors may in good faith accumulate a reserve
before paying the preferential dividend in fuH.^ So, too, a pro-
vision that the second preferred shares shall be entitled to their
preferential dividend "only after payment" of interest on the
bonded debt and of the preferential dividend on the first pre-
ferred shares does not preclude the company from accumulat-
ing profits as a surplus or reserve fund.' Indeed, where the com-
pany has a license to use a patent in consideration of a royalty
amounting to a certain proportion of the annual "profits avail-
able for dividend," it was held that the company might deduct
each year a certain sum for depreciation in the value of the
license before determining the amount of "profits available for
dividend" within the meaning of the contract, although the
company could not have been enjoined from paying dividends
without making any such deduction for depreciation.*
§ 561. Remedies of Preferred Shareholders for arbitrary With-
holding of Preferential Dividend. — But if the company's re-
fusal to declare the preferred dividend is arbitrary and oppres-
sive and contrary to the terms on which the preferred shares
were issued, a court of equity will overrule their determination
and compel the declaration of a dividend ; ^ and this is espe-
' New York, etc. R. R. Co. v. 1 Ch. 146 (with which compare
Nickals, 119 U. S. 296; 7 Sup. Ct. infra, § 1326).
209. But see Dent v. London Trarrv- ^ Boardman v. Lake Shore, etc.
ways Co., 16 Ch. D. 344. Ry. Co., 84 N .Y. 157, 179-180.
' Fisher v. Black & White Pub. Cf. Richardson v. Vermont, etc.
Co. (1901), 1 Ch. 174. Cf. Wemyss R. R. Co., 44 Vt. 613; Barnard v.
Collieries Trust v. Melville, 8 Fraser Vermont, etc. R. R. Co., 7 Allen
(Sc.) 143 (to substantially the same (Mass.) 512; Cratty v. Peoria Law
effect). Liiworj/Ass'n, 219111. 516; 76 N.E.
' Bond V. Barrow Hwmatite Steel 707.
Co. (1902), 1 Ch. 353, 363 (headnote As to whether the directors and
inadequate). officers are proper parties defendant
* Bagot Pneumatic Tyre Co. v. to such a suit, see Chase v. Vander-
Clipper Pneumatic Tyre Co. (1902), bUt, 62 N. Y. 307.
VOL. I. — 30 465
§ 562 CAPITAL AND SHAKES [ChAP. X
cially true where the preferential dividend is non-cumulative,
so that, if once passed, it is gone forever,' or where the preferred
shareholders have no vote in the management of the corpora-
tion and therefore no voice in determining whether dividends
should be declared.^ The remedy of the preferred shareholders
in such cases, however, even when the preferential dividend is
"guaranteed" is exclusively in equity and not at law.^ In order
that sufficient profits to justify and require the payment of the
preferred dividend should be in hand, it is not necessary that
the available earnings should be sufficient to pay the dividend
on the total authorized number of preferred shares but only
on the number actually issued.* The wrongful withholding of
preferential dividends is certainly not sufficient cause for ap-
pointing a receiver to manage the business of the company.*
Where the certificate of the cumulative preferred shares is
under the corporate seal, it has been held that the statute of
limitations will not bar the claim of the preferred shareholders
to arrears of dividends until the lapse of the period of limitations
applicable to actions on contracts under seal."
§ 562. Remedies against Payment to Deferred Shareholders in
fraud of Preferential Rights. — It is very clear that a court of
equity will enjoin the corporation from paying dividends to the
ordinary or common shareholders in fraud of the preferential
' Belfast, etc. R. R. Co. v. Belfast, Co. v. Jackson, 77 Pa. St. 321; Bates
77 Me. 445; 1 Atl. 362; Hazeltinev. v. Androscoggin, etc. R. R. Co., 49
Belfast, etc. R. R. Co., 79 Me. 411; Me. 491.
10 Atl. 328; 1 Am. St. Rep. 330. Of. M'Laughlin v. Detroit, etc. Ry.
Cf. Nichols V. N. Y., etc. Ry. Co., Co., 8 Mich. 100; Richardson v. Ver-
15 Fed. 575 (reversed, 119 U. S. mont, etc. R. R. Co., 44 Vt. 613;
296). Cratty v. Peoria Law Library Ass'n,
Qtt(Er€, whether the directors may 219 111. 516; 76 N. E. 707 (overrul-
accumulate a ■ reserve "for the ing an objection in a suit in equity
purpose of equalizing dividends." that complaining preferred share-
Fisher v. Blade & White Pub. Co. holders had adequate remedy at
(1901), 1 Ch. 174. law).
' Storrow v. Texas, etc. Mfg. * Mackintosh v. Flint, etc. R. R.
Ass'n, 87 Fed. 612; 31 C. C. A. 139. Co., 34 Fed. 582, 610.
' Field V. Lamson, etc. Mfg. Co., ° Texas Consol., etc. Ass'n v.
162 Mass. 388; 38 N. E. 1126; 27 Storrow, 92 Fed. 5, 10-12; 34 C. C.
L. R. A. 136; Boardman v. Lake A. 182.
ShM-e, etc. Ry. Co., 84 N. Y. 157, 179; « Smith v. Cork, etc. Ry. Co., 5 Ir.
WUliston V. Michigan, etc. R. R. Co., Rep. Eq. 65, 75-76.
13 Allen (Mass.) 400. Cf. infra, § 1360.
But see West Chester, etc. R. R.
466
§ 493-§ 573] PREFERENCE AS TO DIVIDENDS § 563
rights of the preferred shareholders.' A bill for this purpose
may be filed by one of the preferred shareholders on behalf of
all, notwithstanding a dispute has arisen between transferors
and transferees of some of the other preferred shares as to their
relative rights to arrears of dividends.^ The complainant may
represent both transferors and transferees for the purpose of
the suit. It is suflScient to make one or more of the common
or deferred shareholders parties defendant as representatives of
all of their class.' The effect of laches of preferred shareholders
in enforcing their rights to prevent payments to the common
or deferred shareholders has been discussed in several cases.*
In one case where the holders of cumulative preferred shares
had omitted to oppose the payment of dividends to the ordinary
shareholders before making good the arrearages of the prefer-
ential dividends, Lord Hatherley held that while perhaps this
acquiescence barred the preferred shareholders from calling
back the dividends which had been already paid to the ordinary
shareholders, it drd not prevent them from enjoining the pay-
ment of further dividends to the ordinary shareholders before
making good the arrears of the preferential dividend.*
§ 563. When Deferred Shareholders may compel Declaration of
Preferential Dividend. — In general, the deferred or common
shareholders would have no interest to compel the declaration
of the preferred dividend; but sometimes the preference is to
continue only for a period of years until a certain number of
the preferential dividends have been paid, and in such cases
the common shareholders would have the same right to compel
declaration of a dividend for payment of which sufficient profits
have been earned as a preferred non-cumulative shareholder
would have. Thus, when subscribers to common stock are not
to be regarded as shareholders or entitled to any voice in the
' Boardman v. Lake Shore, etc. Hun (N. Y.) 655, 666; Elkins v.
Ry. Co., 84 N. Y. 157; Smith v. Camden, etc. R. R. Co., 36 N. J. Eq.
Cork, etc. Ry. Co., 5 Ir. Rep. Eq. 65, 233, 239-240.
affirming 3 Ir. Rep. Eq. 356. " Matthews v. Great Northern Ry.
2 Smith V. Cmk, etc. Ry. Co., 5 Co., 28 L. J. Ch. 375, 382-383.
Ir. Rep. Eq. 65, 77-78. Cf. Elkins v. Camden, etc. R. R.
' Smith V. Cork, etc. Ry. Co., 5 Co., 36 N. J. Eq. 233 (headnote mis-
Ir. Rep. Eq. 65, 78-79. leading) ; Smith v. Cork, etc. Ry. Co.,
* See Boardman v. Lake Shore, 5 Ir. Rep. Eq. 65, 74 (headnote
etc. Ry. Co., 84 N. Y. 157, 182-184; inadequate).
Prouty V. Michigan, etc. R. R. Co., 1
467
§ 564 CAPITAL AND SHARES [ChAP. X
management of the company until five successive annual divi-
dends shall have been paid to the preferred shareholders, the
court will treat that as done which ought to have been done,
and, where amply sufficient profits have been earned for the
payment of the five annual seven per cent dividends, although
such dividends were not actually declared or paid, will compel
the company to admit the subscribers to common stock to all
the rights of ordinary shareholders, at the same time decreeing
that an amount equal to the preferential dividends that ought
to have been paid be distributed to the preferred shareholders.'
§ 564r-§ 568. Preference as to Repayment of Capital in
Liquidation.
§ 564. Legality of such a Preference. — Where a corpora-
tion has power to issue shares with such preference as it may
determine, it may issue shares which shall have a preference
with respect to repayment of capital in liquidation as well as
with respect to dividends.^ Indeed, the matter of the relative
rights of shareholders in assets remaining after payment of all
creditors in liquidation or winding-up is, like the subject of the
distribution of profits available for dividends, a mere matter for
their private concern, and hence by agreement among them-
selves, without any affirmative authorization, they may provide
that preferred shares shall be entitled to a preference in respect
of capital.^ It is competent for the company in issuing pre-
ferred shares to provide that the holders of such shares shall
in the event of liquidation not merely receive back the nominal
value of the shares before any capital is returned to the other
shareholders, but shall also be entitled to a premium or bonus
in addition thereto.*
§ 565. When Preference as to Capital exists and when not. —
The law is well settled that a preference as to dividends does
not carry by implication any preference as to capital in a dis-
' Mackintosh v. Flint, etc. R. B. ' Cf. South African Supply, etc.
Co., 34 Fed. 582. Co. (1904), 2 Ch. 268 (where the pre-
' Supra, § 531. f erred shareholders were entitled to
' Toledo, etc. B. B. Co. v. Coiv- a premium or bonus in the event of
tinental Trust Co., 95 Fed. 497, 531; winding-up for the purpose of recon-
36 C. C. A. 155. struction or amalgamation).
468
§ 493-§ 573] PREFEKENCK AS TO CAPITAL § 565
tribution of assets in winding-up.' Priority, in respect to capital,
therefore, if it is to be conferred upon the preferred shares, must
generally be given by appropriate language.^ Even overdue
cumulative preferential dividends are not a charge upon capital
in proceedings for reduction of capital or for liquidation of the
company.^ Where, however, the general incorporation law
of the state provides that preferred shares in companies organ-
ized thereunder shall have a preference in respect of capital,
the court will presume that preferred shares issued by a com-
pany incorporated by special act were intended, in the absence
of any circumstances indicative of contrary intent, to have a
like preference ; * and so where a general incorporation law
provides that upon dissolution the assets shall be distributed
among the common shareholders after payment of creditors
and the preferred shareholders, and also contains a further pro-
vision that any incorporation paper may create two or more
kinds of shares with such preferences or restrictions as may be
fixed in the incorporation paper, shares which by the incorpo-
ration paper are declared to have a preference as to dividends
will also have a preference as to capital unless the contrary be
provided by the incorporation paper.^ A provision that preferred
shares shall be a lien subject only to an existing issue of mort-
gage bonds gives the preferred shares a preference over the
common in respect to capital as well as dividends.*
'^ London India Rubber Co., -5 Eq. the assets in case of dissolution.
519; Griffith V. Paget, 6 Ch. D. 511] Consumers' Gas Trv^t v. Quinhy,
North West Argentine Ry. Co. (1900), 137 Fed. 882 ; 70 C. C. A. 220.
2 Ch. 882 (where the point was ap- ^ As to what language will be
psCrently treated as too clear for sufficient to confer a preference as
argument); Odessa Waterworks Co., to capital, see in addition to cases
W. N. (1897) 166; Jones v. Concord cited below Bangor Slate Co., 20 Eq.
& Montreal R. R. Co., 67 N. H. 119 59 (stated supra, § 532).
(semble); 38 Atl. 120; Jones v. ' Roberts v. Roberts-Wicks Co.,
Concord & Montreal R. R. Co., 67 184N. Y.257; 77N. E. 13; 112 Am.
N. H. 234; 30 Atl. 614; 68 Am. St. St. Rep. 607.
Rep. 650 (semble). * McGregor v. Home Ins. Co., 33
Cf. McGregor v. Home Ins. Co., 33 N. J. Eq. 181.
N. J. Eq. 181. By parity of reason- ' Hellman v. Pennsylvania Elec-
ing, an agreement that a public trie Vehicle Co. (N. J.), 67 Atl. 834.
service company's business shall be ' Hamlin v. Toledo, etc. R. R. Co.,
carried on with only such charges 78 Fed. 664, 670; 24 C. C. A. 271;
or tolls as may be necessary to de- 36 L. R. A. 826; Toledo, etc. R. R.
fray e.Kpenses, does not destroy the Co. v. Continental Trust Co., 95 Fed.
ultimate right of the shareholders in 497, 529-531, 36 C. C. A. 155.
469
§ 566 CAPITAL AND SHARES [ChAP. X
§ 566. Attempts to confer indirectly a Preference as to Capital
upon Shares not entitled thereto. — Where preferred shares have
no preference as respects capital, they must in a winding-up,
which is in theory a return of capital, receive no more than the
common shareholders receive. This rule cannot be evaded by
any scheme of reconstruction or reorganization. Thus, where
preferred shares have no preference as regards capital, a scheme
of reconstruction under the English Companies Act which pro-
vides that the preferred shareholders in the company being
wound up shall receive in exchange preferred shares in a new
corporation formed to take over the assets and business of the
old company, while the ordinary shareholders in the old com-
pany shall receive ordinary shares in the new, gives the pre-
ferred shareholders more than the ordinary shareholders, and
is therefore ultra vires. ^ On the other hand, where a statute
authorized the consolidation of two railway companies upon
such terms and conditions as might be approved by a majority
of both companies, a scheme for amalgamation whereby the
preferred shareholders of one of the old corporations, although
entitled to no preference as respects capital, received for every
four shares of their old stock five shares in the new company
while the common stockholders only received for every two
shares of their old stock one share in the new company, was
held to be intra vires'
§ 567. What Funds regarded as Capital and what as Profits in
Liquidation. — Where the preferred shares are entitled to a pref-
erence as to dividends but not as to capital, it is important to
inquire, when the corporation goes into liquidation, what prop-
erty or funds can be regarded as capital divisible pro rata among
holders of both classes of shares and what as profits subject to
the preferential claim of the preferred shareholders. To the
extent necessary to repay the several shareholders the amount
nominally paid upon their respective sharfes, it seems clear that
any funds of the corporation, whether due to earnings or to any
other source, must in winding-up or liquidation be regarded as
capital as between the preferred and common or ordinary share-
holders. Indeed, as a general rule any surplus funds over and
above the amount necessary to repay the several shareholders
' Simpson v. Palace Theatre, 69 ' Hale v. Cheshire R. R. Co., 161
L. T., N. 8., 70. Mass. 443; 37 N. E. 307.
470
§ 493-§ 573] PREFERENCE AS TO CAPITAL § 567
the paid-up capital must also, in winding-up or liquidation, be
treated as capital as between the preferred and deferred share-
holders. Thus, the House of Lords has held that where, in a
winding-up, the company's business or "undertaking" is sold,
the residue of the purchase price remaining after paying off all
liabilities and returning all paid-up capital is, as between pre-
ferred and deferred shareholders, to be treated as capital and
not profits.^ The company having ceased to be a going concern,
the discretion of the directors, or of the corporation, to treat an
appreciation of assets in excess of the nominal capital as profits
available for dividends had terminated. It was once held that
profits accumulated as a reserve fund should, upon the volun-
tary winding-up of the company, be treated as still profits and
not capital.^ By the later decisions this rule has been qualified,
if not overtlirown ; and it is now held that where the company
has a discretionary power of reserving profits before paying the
preferential dividend to preferred shareholders, if the company
goes into liquidation before this discretion is exercised or the
preferred dividend declared out of profits earned shortly before
the liquidation, the profits so earned should be regarded as
capital as between the preferred and ordinary shares, and as
such distributed fro rata among both the classes of share-
holders.' The question here, as in the similar case where the
rights of tenants for life and remaindermen are involved,* is
whether accumulated profits are, in liquidation or winding-up,
regarded as capital unless they have been declared as dividends
' Birch V. Cropper, 14 App. Cas. 86; Odessa Waterworks Co. (1901),
525. 2 Ch. 190 n.
Cf. Frames v. Btdtfontein Mining But see Re Rogers, 161 N. Y. 108,
Co. (1891), 1 Ch. 140; Morrow v. 113; 55 N. E. 393, where the court
Peterborough Water Co., 4 Ont. L. said, "After effecting a sale of the
R. 324 (where the company's regu- company's plant it ceased to do busi-
lations provided that in liquidation ness and went into liquidation,
after repaying to the preferred After such sale it could no longer
shareholders the capital contributed earn profits for distribution, and the
by them, the amount remaining directors were no longer vested with
should be distributed among ordi- any discretion with reference to the
nary shareholders, and were enforced conduct of the business or judgment
accordingly). as to the amount of profits to be
' Bridgewater Navigation Co. retained and employed as a working
(1891), 2 Ch. 317; Bishop v. Smyrna capital."
& Cassaba Ry. (1895), 2 Ch. 265. * See infra, § 1394.
' Crichton's Oil Co. (1902), 2 Ch.
471
§ 568 CAPITAL AND SHARES [ChAP. X
or are regarded as profits unless they have been capitalized by
proceedings for the increase of capital. Even, however, when
the company is in liquidation, it has been held that a fund due
to the appreciation of certain bonds held by the company will,
as between preferred and ordinary shareholders and for the
benefit of the former, be treated as profits where a previous
depreciation of the same bonds has been debited to the revenue
account to the prejudice of the preferred shareholders ; ' but
this decision is not easy to reconcile with the principles acted
upon in the later cases above cited.
It seems that moneys earned after the commencement of
liquidation proceedings should be treated as capital.^
§ 568. Whether Preferred Shareholders are entitled in Liquida-
tion to " Interest " from the Time of Cessation of Business in lieu of
Preferential Dividend. — As the preferential dividends are pay-
able only out of profits it follows that if the company ceases to
do business, with a view to winding-up, the preferential dividend
ceases to be payable even though the preferred shareholders be
entitled to a preference as to capital as well as dividends. For
example, if the company goes into liquidation any balance which
may remain after satisfying all claims of creditors should be used
for the purpose of returning capital to the several shareholders
according to their respective rights; and no part should be de-
voted to paying to the preferred shareholders "interest" on
their shares from the date of the last payment of the preferential
dividend, to the prejudice of the claim of the common or deferred
shareholders for the return of the capital invested by them.^
§ 569. Preference as to Distribution of New Shares upon an
Increase of Capital. — Upon the principle that preferred share-
holders stand on equality with the ordinary shareholders except
in so far as their preferential rights expressly or by necessary
implication carry, a preference in respect to dividends does not
confer a preference in respect to the distribution of new shares
' Bishop V. Smyrna & Cassaba (where counsel conceded the
By. Co., No. 2 (1895), 2 Ch. 596. point).
^ Bishop V. Smyrna & Cassaba ' Wilson v. Parvin, 119 Fed. 652;
Ry. Co., No. 2 (1895), 2 Ch. 596 56 C. C. A. 268.
472
§ 493-§ 573] PREFERENCE AS TO VOTING RIGHTS § 570
upon an increase of capital; and accordingly upon such an
increase both common and preferred shareholders have the
same option of subscribing to the new shares before any of them
are offered for subscription to non-members of the company.'
In one case, the payment of a "stock dividend" payable to
preferred shareholders in preferred stock and to common
shareholders in common stock was held to be, under the
circumstances, no violation of the rights of the common
shareholders.^
§ 570. Preference as to Voting Rights. — Inasmuch as pre-
ferred shareholders are members of the company, and, except
in so far as their rights may be altered by the contract, statute,
or by-law under which the shares are issued, entitled in all
respects to the same rights as other shareholders, it follows that
they have the same voting rights as other shareholders. The
right of shareholders to vote is, however, Uke the right to divi-
dends or to participate equally in a division of capital on liqui-
dation, regarded as a private matter for each shareholder which
he may waive if he choose. Consequently, a provision that share-
holders of a certain class shall have no right to vote is, if assented
to by them, quite valid.^ Such a provision might theoretically
be made as to either the preferred or the deferred shares, but
is much more common with respect to the preferred shares so
as to compensate the, other shareholders for the preference of
the preferred shareholders as to dividends. A provision in an
incorporation paper, whereby the preferred shareholders shall
have no right to vote is, therefore, valid even though a statute
provide that -every shareholder shall be entitled to one vote for
every share held by him.* On the other hand, the Supreme
Court of Canada has recently held that where the incorporation
law enacts that at an election of directors each shareholder shall
have as many votes as he holds shares, a provision in the incor-
poration paper whereby the holders of certain preferred shares
should have the right to choose three of the five directors is
' Jones V. Concord & Montreal ' State ex rel. Frank v. Swanger
B. fi. Co., 67 N.H.I 19; 38 Atl. 120; (Mo.), 89 S. W. 872; 190 Mo.
Jones V. Concord & Montreal R. R. 561.
Co., 67 N. H. 234; 30 Atl. 614; 68 * State ex rel. Frank v. Swanger
Am. St. Rep. 650. (Mo.), 89 S. W. 872; 190 Mo.
^ Howell V. Chicago, etc. Ry. Co., 561.
51 Barb. (N. Y.) 378.
473
§ 571 CAPITAL AND SHARES [ChAP. X
invalid.' It is submitted that this construction of the statute is
narrow, and it is encouraging to find that the American court
has taken the more liberal view.
§ 571. Preference as to Liability to Creditors. — We have seen
that in the absence of stipulation to the contrary, preferred
shareholders are subject to any statutory liability to creditors
that may attach to other members ; '' and indeed it would not
be competent by mere agreement to exempt the preferred
shareholders from this liability, except as between them and
the ordinary shareholders.
§ 572. Consequences of Distinction between Preferred and De-
ferred Shares upon Rules as to Parties in legal Proceedings. — In
consequence of the division of a company's shares into preferred
and common or ordinary, a distinction is created between the
two classes of shares which may render it proper that in certain
suits regarding the corporate affairs representatives of both
classes should be made parties. Thus, where the preferred
shares are entitled to a preference over the common in respect
both to dividends and capital, and do not enjoy the ordinary
voting rights, the preferred shareholders are proper to be ad-
mitted as parties to consolidated suits for the winding-up of the
company and the foreclosure of the mortgage securing its bonds.*
Similarly, as more fully pointed out below, in cases of share-
holders' bills, it is sometimes necessary to join jis defendant a
representative of a class of shareholders whose interests conflict
with those of the plaintiff." Where a representative of some one
class of shareholders is desired, an individual should be selected
who is not an officer or director in the company ; since the duty
of officers and directors is to represent all classes of shareholders
impartially.* It has been held that the common stockholders,
although proper, are not necessary parties to a suit by preferred
• Colonist Printing & Pub. Co., . ' Hamlin v. Toledo, etc. R. R. Co.,
V. Dunsmuir, 32 Can. Sup. Ct. 679. 78 Fed. 664; 24 C. C. A. 271; 36 L.
Cf. Durkee v. People, 155 111. 354; R. A. 826.
40 N. E. 626; 46 Am. St. Rep. 340 * See infra, 5 11V7.
(stated infra, § 1239). ' Chase v. Vanderbilt, 62 N. Y.
' Supra, § 540. 307.
474
§ 493- § 573] PREFERRED SHARES § 573
stockholders to compel declaration or payment of the preferen-
tial dividend.'
§ 573. Consequences of Distinction upon Powers of Manage-
ment of Majority of Company. — As the interests of preferred and
common shareholders often conflict, controversies between them
often arise. The rules of law applicable in such cases are the
same as apply to other cases in which some shareholders have
individual interests in matters of corporate management con-
flicting with those of the general body of their fellows. That is
to say, any class of' shareholders are not deprived of their
control over the corporate management merely because their in-
terests may not coincide with those of the other class of share-
holders.^ Thus, a railway company having power to lease its
road may against the objection of common shareholders execute
a lease for ninety-nine years at a rental which is less than suffi-
cient to pay the preference dividend, and which therefore will
exclude the common shareholders from any income throughout
the whole long period of the lease.^
' Thompson v. Erie By. Co., 45 ' But cf. infra, § 1397.
N. Y. 468 ; Provty v. Michigan, etc. ' Middletovm v. Boston, etc. R. B.
B. B. Co., 1 Hun (N. Y.) 655. Co., 53 Conn. 351; 5 Atl. 706.
475
CHAPTER XI
INCREASE, REDUCTION, AND OTHER MODIFICATIONS OF
CAPITAL
Section
Whether amount of nominal capital as fixed by the incorpoTation
paper can be altered 574
Whether amount when not fixed by incorporation paper can be
altered 575
Three kinds of alteration of capital 576
Increase of capital 577-61&
Definition and kinds of increase of capital 577
Effects of increase upon creditors and shareholders 578
Illegal increase of capital 579-582
Shares in excess of amount of authorized capital void . . . 579
Liability of company for representing overissued
shares to be valid 580
Liability of company on contract to issue valid shares . 581
Illegal increase no effect on old shareholders — not
ground for receiver 582
Increase under statutory authority 583-619
What will confer authority to increase capital — authority
to issue convertible bonds 583
Amount and kind of increase — successive increases —
new shares of different par value from old . . . 584
How increase may be effected 585-592
Required formalities . 585
Requisites of meeting at which increase is voted . . . 586
Motives actuating increase, how far material . . 587
Examination of proceedings by public official — cer-
tificate of regularity . . 588
Whether full amount of new stock must be taken . . . 589
Provision confining increase to number of new shares
taken 590
Whether subscriber to new shares becomes a share-
holder before payment in full 591
Consequences of failure to comply with statutory
requirements 592
Rescission of increase 593_
Contracts to exercise statutory power of increase 594
Contracts to refrain from exercising statutory power . . . 595
Stock dividends 596-601
LegaUty of stock dividends 596
Necessity that profits equivalent in amount to the
stock dividend should be in hand 597
Consequences of an illegal stock-dividend 598
476
i 574-§ 677] SYNOPSIS
Increase of capital (continued) Section
Necessity for distributing stocic dividends equally
among shareholders 599
Stock dividend distinguished from cash dividend ac-
companied by an option to subscribe to new
shares 600
Rescission of stock dividends 601
Sale of new shares in the market followed by distribution
of premium among old shareholders 602
Right of old shareholders to preference in allotment of
new shares 603-619
In general 603
Exceptional cases 604
In whom the right vests 605-609
In general 60S
Relative rights of transferor and transferee .... 606
Relative rights of tenant for life and remainder-
man of old shares 607
Relative rights of preferred and common share-
holders 608
Rights of shareholder who has not fully paid for
old shares 609
Time for exercise of right 610-611
Before increase of capital is effected 610
After expiration of time limited for exercise of
right 611
Waiver of pre-emptive right 612
' Assignment of the right 613
Remedies against company for failing to recognize the
pre-emptive right 614-616
In general 614
Remedy personal to shareholder whose right is
denied . . . 615
Company not accountable for premium reaUzed
on quota of shareholder who has waived or
otherwise lost pre-emptive right 616
Rights and UabiUties of persons to whom new shares
are issued in violation of pre-emptive right of
old shareholders 617
Rights of old shareholders upon issue of previously
unissued shares of old capital, surrendered and
forfeited shares, etc 618
Distinction between acceptance of company's offer of
quota of new shares and application for shares in
addition to quota at suggestion of company . . 619
Reduction of capital 620-674
Definition 620-621
What reduction of capital means 620
What it does not mean 621
Why reduction of capital without affirmative legislative
sanction is forbidden 622-624
Reduction of actual capital 622
Reduction of nominal capital 623
477
INCREASE AND REDUCTION OF CAPITAL [ChaP. XI
Reduction of capital {contmued) Section
General principle 624
Reduction without statutory authority — evasion of the prohi-
bition of reduction 625-642
Payment of dividends out of capital 625
Purchase by company of its own shares 626-633
Whether purchase is lawful 626-627
On principle 626
English authorities 627
American authorities . 628
Purchase on credit or with borrowed money —
issue of bonds in exchange ... . . 629
Purchase by a person secretly acting as agent
for the company 630
Effect of purchase where a purchase is deemed
illegal . . 631-632
In general .... 631
Purchase by company followed by reissue to
another person 632
Effect of purchase where a purchase is deemed lawful . 633
Acquisition by company of its own shares otherwise than
by purchase . ... 634-641
Whether permissible — in general 634
Surrender of shares . 635-637
In general ... . 635
Surrender of shares which are liable to forfeiture 636
Surrender of shares in compromise of contro-
versy as to validity of their issue . . . 637
Acceptance of shares in satisfaction of, or as security
for, a debt due the company . ... 638
Acquisition of shares by satisfying a judgment for
converting them . . 639
Acquisition of shares in pursuance of terms of the
original issue — redeemable and convertible
shares . 640
Acquisition of shares as trustee for third person . ... 641
Release of shareholder from liability for unpaid subscrip-
tions to capital 642
Reduction under statutory authority 643-674
In general — authority not readily implied 643
English and American statutes compared ... . 644
Effect of failure to comply with statutory conditions . . 645
Statutes making certificate of public official conclusive
evidence of regularity 646
Whether statutory power extends to all kinds of reduc-
tion of capital, i. e., cancellation of liability, return of
paid-up capital, angl reduction of nominal capital . . 647
Return of actual capital on footing that it ' may be
called up again . . . . ... . . 648
Whether scheme must contemplate a permanent reduc-
tion . . . . 649
Whether statutory reduction may retroactively ratify
illegal reduction 650
478
§ 574-§ 677] SYNOPSIS
Reduction of capital {coTvtinued) Section
Reduction need not affect all shares equally 651
Consent of creditors as a statutory condition to reduction . 652
Reduction of nominal capital so as to correspond with the
actual capital ... 653-657
Writing off lost capital . . 653-656
Whether authorized by power of reduction 653
Importance of determining whether a loss of actual
capital has occurred 654
Rules for determining whether a loss of actual
capital has occurred 655
Whether the loss should fall on preferred or
common shareholders 656
Wiping out illegal over-capitaUzation . . .... 657
Reduction in order to return to shareholders assets which
the company had no power to hold 658
Reduction of capital as substitute for winding-up pro-
ceedings. . 659
Whether reduction of nominal capital should be accom-
panied by corresponding reduction of actual capital
and vice versa — distributing amount by which capital
is reduced among the shareholders 660-668
Statement of the problem . . . . 660
Of the doctrine that reduction must not destroy equili-
brium of balance sheet . . 661
Whether and to what extent a reduction of nominal
capital should be accompanied or followed by a
distribution of paid-up capital among the share-
holders 662-668
Where such distribution should not be made . 662
Where the distribution should be made 663
Time of making the distribution 664
Manner of distribution — in kind or in cash —
borrowing to distribute — distribution of
bonds .... . . 665
Whether reduction of nominal capital for purpose
of writing off assets beUeved to be valueless
casts title to those assets on the shareholders
individually . . . . 666
Whether moneys distributed upon reduction of
capital are income or capital — rights of
preferred and common shareholders, of ten-
ants for life and remaindermen 667
Certificates issued to shareholders on reduction
of capital in lieu of immediate distribution
of cash or property 668
Reduction as affecting voting rights of shareholders . . . 669
Agreement to exercise power of reduction by redeeming
certain shares . ... 670
Agreement not to reduce capital or not to affect certain
shares by reduction .671
Preferred shares as affected by reduction of capital . . 672-674
In general 672
479
§ 574 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
Reduction of capital {continued) Section
In case of reduction for purpose of writing off lost
capital 673
Whether reduction of cumulative preferred shares
affects overdue dividends 674
Modification of capital otherwise than by increase or reduction —
consolidation and subdivision of shares .' 675-677
Whether company has power to consoUdate or subdivide shares , 675
Consolidation or subdivision of shares under statutory
authority 676 ■
Effect of unauthorized consolidation or subdivision 677
§ 574. Whether Amount of Capital as fixed by Incorporation
Paper can be altered. — The amount of the nominal or share
capital of a corporation is usually fixed by the act of incorpora-
tion if the company be incorporated by special act, or by the
incorporation paper if the company be organized under a general
law. Like other provisions of a special act of incorporation or
incorporation paper, the provision fixing the amount of the com-
pany's capital cannot be changed by the corporation unless some
mode of alteration be provided by statute. Hence, where the
statute requires the amount of the capital stock to be stated in
the incorporation paper, a clause, inserted without statutory
authority, purporting to confer upon the company the power to
increase or alter the amount of the capital at pleasure is null and
void.^
§ 575. Whether Amount can be altered when not fixed by Incor-
poration Paper. — In comparatively rare cases, incorporation
laws provide that the amount of the company's capital shall be
fixed by the corporation itself after its organization. In such
cases the question arises whether the company, having once fixed
the amount of its capital in pursuance of the statute, has any
power to alter its determination in that regard. According to
' Grangers' Life and Health Ins. thorize a reduction unless the arti-
Co. v. Kamper, 73 Ala. 325. cles or by-laws are first amende^ so
Cf. Palmer v. Bank of Zumbrota, as to provide therefor).
72 Minn. 266, 276-277 (headnote in- As to a provision in an incorpora-
adequate); 75 N. W. 380; Dexine tion paper for the simultaneous
Patent Packing & Rubber Co., 88 issue and cancellation of part of the
L. T. 791 (holding that where stat- authorized capital, the scheme being
ute allows reduction in pursuance adopted as a matter of bookkeeping
of a provision in the articles or by- convenience, see Stale v. Consolir-
laws a clause in the memorandum dated Gas, etc. Co. (Md.), 65 Atl. 40.
or incorporation paper cannot au-
480
§ 574-§ 677] INCREASE § 577
the better view, it would seem that no such power of altera^
tion exists,' although some authorities support the contrary
view.^
§ 576. Three Ends of Alteration of Capital. — A corporation
may desire to alter its capital either (1) by way of increase or
(2) by way of decrease or (3) by some change in the number or
par value of the shares without either increasing or diminishing
the aggregate amount of the capital.
§ 577-§ 619. INCREASE OF CAPITAL.
§ 577. Definition and Kinds of Increase of Capital. — First,
then, of increase of capital. This may, provided the laws per-
mit, be accomplished either by issuing new shares or by in-
creasing the par value of the old shares. The former is much
the more common way of increasing capital, and in the follow-
ing pages may be taken as referred to whenever the phrase
"increase of capital" is used unless that phrase is qualified
by an explicit declaration that increase by adding to the par
value of the shares is meant.' An increase of nominal capital
may or may not be accompanied by an increase of actual capi-
tal. Thus, when a company in pursuance of statutory authority
cancels its existing stock and issues to each holder in lieu
thereof a larger nominal amount of new stock, although the
actual or working capital is not affected, there is clearly an in-
crease of the nominal or share capital, which is taxable as such.*
The acquisition of additional property by gift, devise, or in
any other way, although it may augment the actual or work-
ing capital of the company, does not amount to any increase
in its nominal or share capital, and is not to be deemed an
' Cf. Sutherland v. Olcott, 95 N. Y. the minimum sum as the capital of
93. the company, afterwards without
' Somerset, etc. R. R. Co. v. Cush- objection issued new shares up to
ing, 45 Me. 524; Peck v. Elliott, 79 the maximum amount).
Fed. 10; 24 0. C. A. 425; 38 L. R. A. = As to an illegal attempt to in-
616. crease the capital by increasing the
Cf. Gray v. Portland Bank, 3 par value of the shares, see Tschumi
Mass. 364; 3 Am. Dec. 156 (where v. HUls, 6 Kan. App. 649; 51 Pac.
a company incorporated by a special 619.
act which fixed a maximum and * Midland Railway Co. v. Attcyr-
minimum capital, having fixed upon ney-Oeneral (1902), A. C. 171.
VOL.1. — 31 481
§ 578 INCREASE AND REDUCTION OF CAPITAL [ChAF. XI
increase of capital in the legal sense: the prohibition of unau-
thorized increase of capital on the part of a corporation does
not prevent it from accepting as much property as it can law-
fully acquire, even in excess of its nominal capital.' Moreover,
the acquisition by one corporation of all the shares in another
company, thereby accomplishing a virtual consolidation, does
not amount to an increase in the capital of the second or sub-
sidiary company either in the technical legal sense or within
the meaning of a contract between such subsidiary company
and a third person which entitled him to an allotment of forty-
eight per cent of any increased capital of said company.^
§ 578. Effects of Increase upon Creditors and Shareholders. —
An increase of capital in either of the two ways above mentioned
works a fundamental change in the constitution of the company.
So far as creditors are concerned, the change thus wrought is
much less serious than the change effected by a diminution of
capital. A creditor is not prejudiced by an increment to the
resources of the company and to the fund to which he must look
for payment of his claims. Even if the addition to the nominal
capital of the company is not accompanied by a corresponding
increase in the actual or working capital, nevertheless the exist-
ing creditors are no worse off than they were before the change.
The only way in which an increase of actual capital can injuri-
ously affect creditors is by tempting the company to use its newly
acquired resources in new and speculative enterprises. As re-
spects shareholders, however, the increase of capital may be far
more prejudicial. Thus, an increase in the par value of the shares
may enlarge the amount of the shareholders' liability to the com-
pany or its creditors. If new shares are issued, the proportionate
interest of an old shareholder is diminished. For instance, if a
man owns forty-eight per cent of the capital stock, he can gener-
ally dominate the policy of the company; but if the capital be
doubled by the issue of new shares, he will own only twenty-four
per cent of the shares, and will therefore be reduced to a com-
paratively insignificant factor.
' Barry v. Merchants' Exchange ' Einstein v. Rochester Gas, etc.
Co., 1 Sandf. Ch. 280. See infra, Co., 146 N. Y. 46; 40 N. E. 631.
§ 1345.
482
§ 574^§ 677] ILLEGAL INCREASE § 579
§ 579- § 582. Illegal Increase of Capital.
§ 579. Shares in Excess of authorized Capital void. — As
already stated, an increase of capital is unlawful unless some en-
abling statute exists, the provisions whereof are followed. If a
corporation, being wholly without legal power to increase its
capital, undertakes to issue shares in excess of its authorized capi-
tal, such shares are void and do not confer upon the holders the
rights of shareholders ' nor subject them to the liabilities of share-
holders,^ even though the holders actively promoted and partici-
pated in making the illegal increase ; ^ and payments made on
account of such void shares in the belief that the issue was valid
may be recovered back.*
The law is the same where the company has power to increase
its capital after a certain time, and undertakes to increase it
before that time arrives. For instance, if the company has power
to increase its capital stock after the original stock shall have
been fully allotted and paid in, an increase which the company
attempts to make before the original capital has been fully sub-
scribed or paid in has been held to be wholly void, so that the
holders of such new stock are not subjected to any liability as
stockholders.^ The rule is the same where the company having
power to increase its capital to a certain amount undertakes to
' People ex rel. Jenkins v. Parker of the company, see Dwinnell v.
Vein Coal Co., 10 How. Pr. (N. Y.) Minneapolis Fire, etc. Ins. Co., 97
543. See also infra, § 909. Minn. 340; 106 N. W. 312.
' ScovUl V. Thayer, 105 U. S. 143, * Grangers' Life, etc. Ins. Co. v.
149 (explaining Upton v. Trebilcock, Kamper, 73 Ala. 325 (where it was
91 TJ. S. 45; Chubb v. Upton, 95 held that the remedy was at law
U. S. 665; Pullman v. Upton, 96 and not in equity); Anthony v.
U. S. 328) ; Page v. Austin, 10 Can. Household, etc. Machine Co., 16 R. I.
Sup. a. 132; Clark v. Turner, 73 571; 18 Atl. 176; 5 L. R. A. 575
Ga. 1; Latkrop v. Kneeland, 46 (recovery allowed notwithstanding
Barb. (N. Y.) 432. passage of a statute after the making
But see Kansas City Hotel Co. v. of the contract authorizing the issue
Harris, 61 Mo. 464 ; Palmer v. Bank of the new shares).
of Zumbrota, 72mnr>..26d; 75 N. W. Cf. Western Nat. Bank v. Arm-
380. strong, 152 U. S. 346, 353-354; 14
^ Railroad v. Sneed, 99 Tenn. 1; Sup. Ct. 572 (holding that such a
41 S. W. 364; 47 S. W. 89. claim is not a preferred claim against
But as to the hability of directors the receiver of the company),
for representing to creditors that ° Page v. Austin, 10 Can. Sup.
they have subscribed to valid stock Ct. 132.
483
§ 580 INCREASE AND REDUCTION OP CAPITAL [ChAP. XI
increase it to a greater amount : ' in such case the new shares
will not be held valid as far as the power of increasing the capital
extended and void as to the excess, but are void in toto' the good
and bad being indistinguishably blended. So, also, shares issued
in pursuance of an unconstitutional statute are void and subject
the holder to no liability as shareholder.^ Indeed, even the ex-
istence of a general law authorizing an increase of capital will
not affect the case where an increase is made by a company in-
corporated by special act, even though the company might have
accepted the general law as an amendment to its charter.*
All these cases should be carefully discriminated from cases
in which the company has the power to make the increase of
capital but in making it omits some of the prescribed formalities.^
§ 580. Liability of Company foT Representing overissued Shares
to be valid. — If the holders of overissued shares have been
induced to pay for the shares by the company's representations
that the shares in question are part of its authorized capital, then
the holders may have a right of action against the company for
damages, the company being estopped to deny the truth of its
representations. As this estoppel usually arises in cases of trans-
fers of shares, where the transferee is ignorant of the facts
surrounding the issue of the shares and relies upon the repre-
sentation contained in the share-certificate that the shares have
a real and not a merely fictitious existence, the subject is dealt
with in connection with transfers of shares."
§ 581. Liability on' Contract to issue valid Shares. — More-
over, if the company has contracted with a subscriber to issue to
him shares of its capital, the issue of shares in excess of its au-
thorized capital amounts to a breach of contract, for which it
would seem that the subscriber" might have an action of assump-
sit for his damages.' The only ground on which the contrary
conclusion could be sustained would be that the contract was
ultra vires and therefore void.' An answer to this argument
' Laredo Imp. Co. v. Stevenson, ° See infra, § 592.
66 Fed. 633; 13 C. C. A. 661. « See intra, § 908-§ 923, espe-
' Kampman v. Tarver, 87 Tex. daily § 909.
491; 29 S. W. 768. ' Of. supra, § 230.
' Marion Trust Co. v. Bennett ' Cf. Anthony v. Household Seu>-
(Ind.), 82 N. E. 782. ing Machine Co., 16 R. I. 571; 18
* Marion Trust Co. v. Bennett Atl. 176; 5 L. R. A. 575.
(Ind.), 82 N. E. 782.
484
§ 574r-§ 677] INCREASE UNDER STATUTES § 584
would be that the company has power to issue shares and that
whether or not the legal limit of the capital has been exceeded
lies peculiarly within its own knowledge, so that the contract is
at worst within the class of contracts which are not apparently
tdtra vires but are objectionable only by reason of some secret
fact within the company's own knowledge.'
§ 582. Illegal Increase no ESect on old Shareholders — Not
Ground for Receiver. — The illegal issue of new shares should
not be allowed to affect the rights of the old shareholders.^ Cer-
tainly it is no ground for the appointment of a receiver for the
corporation.^
§ 583-§ 619. INCREASE UNDER STATUTORY AUTHORITY.
§ 583. What will confer Authority to Increase Capital — Au-
thority to issue Convertible Bonds. — Statutory authority to ef-
fect an increase of capital often exists. A statute which au-
thorizes a corporation to issue bonds convertible at the election
of the holders into shares of capital stock impliedly authorizes
the company to increase its capital, beyond the amount fixed and
limited by the charter, to the amount necessary to effect such
conversion,* and that too without complying with formalities
prescribed by another statute empowering the company under
certain circumstances to increase its capital.^ But if the issue
of the bonds in such a case be a mere scheme or device to ac-
complish an increase of capital stock, a court of equity will enjoin
the proceeding as a fraud on the law.®
§ 584. Amount and Kind of Increase — Successive Increases
— New Shares of different par Value from old. — Usually, general
incorporation laws expressly provide some means by which com-
panies organized under them may increase their capital. Often
the amount of the increase is entirely within the discretion of the
company ; but sometimes statutes limit the amount to which the
increase may go. A power of increasing the capital is not ordi-
» As to which see infra, § 1061. Barb. (N. Y.) 637, 669-675; Ramsey
' Byers v. Rollins, 13 Colo. 22; v. Erie Ry. Co., 38 How. Pr. (N. Y.)
21 Pac. 894. 193, 216-217.
' Virginia-Carolina Chemical Co. ' Belmont v. Erie Ry. Co., 52
V. Provident Sav., etc. Ass. Soc. (Ga.), Barb. (N. Y.) 637, 669-675.
54 S. E. 929. ' Belmont v. Erie Ry. Co., 52
* Belmont v. Erie Ry. Co., 52 Barb. (N. Y.) 637, 669-675.
485
§ 585 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
narily exhausted by one increase, but may be exercised repeatedly
by successive increases.^ Where, however, the statute provides
that the increase shall not exceed double the amount of the au-
thorized capital, the meaning is that the company shall not either
at one time or by successive increases enlarge its capital beyond
twice the amount originally fixed.^ A statute authorizing an
increase to an amount equal to two thirds of the capital actually
paid in refers to the amount paid in at the time the increase is
authorized by resolution rather than at the time the new shares
are issued.^ It has also been held that such a statute refers to
the actual value of the capital paid in and not to the nominal
amount credited as paid up on the shares.*
Where a statute authorizes a corporation to increase its capital
by the issue of additional shares, it is not necessary that the
new shares be of the same denomination or par value as the old
shares.*
§ 585- § 592. How Increase may he effected.
§ 585. Required Formalities. — The formalities required by
the several incorporation acts of the American states and of
Great Britain in order to effect an increase of capital differ so
widely among themselves that any attempt to set forth the
requisites prescribed by the various laws would be both tedious
and unprofitable. If no formalities be prescribed by the ena-
bling act, the increase may be accomplished by mere resolution
duly entered on the company's minutes declaring an increase
in presenti." But if the increase is to be made by amending
the incorporation paper and no method of making the amend-
ment is prescribed, then the amendment must be executed
and acknowledged in the same way as the original incorpora-
tion paper.'
> Massey Mfg. Co., 13 Out. App. (Pa.), 67 Atl. 1081 (where the actual
446. value of the capital paid in exceeded
' Berg v. San Antonio Street By. the nominal amount paid upon the
Co., 17 Tex. Civ. App. 291 ; 42 S. W. shares).
647; 43 S. W. 929; Scovill v. « Sewdl's Case, 3 Ch. 131, 141.
Thayer, 105 U. S. 143 (headnote in- » Sutherland v. Olcott, 95 N. Y.
adequate). 93, 99. Cf. Payson v. Stoever, 2
' Continental Varnish, etc. Co. v. Dillon 427.
Secretary of State, 87 N. W. 901; ' Palmer v. Bank of Zumbrota,
128 Mich. 621. 72 Minn. 266, 277; 75 N. W. 380.
* Person & Riegel Co. v. Lipps
486
§ 574- § 677] HOW increase may be made § 586
Where the power of increasing the capital is conferred upon
the corporation as a whole, it can be exercised only by the
shareholders and not by the directors ; ' but if the power be
conferred on the directors, it may be exercised by them with-
out the consent or authority of the shareholders.^
Where an amendment to the articles of association is a statu-
tory prerequisite to an increase of capital, the issue of the new
capital cannot be authorized simultaneously with, or prior to,
the consummation of the resolution amending the articles ; ^ but
it is not necessary that the articles should be first amended and
that afterwards another meeting of the shareholders should be
held to authorize the additional capital, for the issue of the new
capital may be authorized at the same meeting that finally adopts
the alteration of the articles.*
If the filing of a certificate showing the amount of capital paid
in be a statutory condition precedent to a lawful increase of
capital, a certificate stating that the amount of the company's
capital is $12,000 "and all but . . . paid in," is construed to
mean that all has been paid in and therefore complies with law.'
Where the certificate of increase is incomplete in that some
of the particulars embodied in the resolution of the company
authorizing the increase and required by statute to be mentioned
in the certificate are omitted, the registrar may be required to
file and record an amended certificate supplying these defects ; *
for the original certificate not being in accordance with the
actual facts or in compliance with the law may be disregarded.
§ 586. Requisites of Meeting at which Increase is voted. —
The meeting, whether of the shareholders or directors, at which
the resolution making the increase is passed must be a valid
meeting, and the requisites of a valid meeting are determined
by principles of law which are elsewhere stated.' If the meeting
' Railway Co. v. Allerton, 18 ' Sutherland v. Olcott, 95 N. Y.
Wall. 233; Eidrmn v. Bowman, 58 93, 99.
111. 444; 11 Am. Rep. 90; Hum- ' Cf. Patent Invert Sugar Co., 31
boldt Driving Park Ass'n v. Stevens, Ch. D. 166.
34 Nebr. 528: 52 N. W. 568; 33 * Campbell's Ca^e, 9 Ch. 1.
Am. St. Rep. 654. " Moosbru^ger v. Walsh, 89 Hun
Cf. BaUey v. Champlain, etc. Co., (N. Y.) 564, 567; 35 N. Y. Supp. 550.
77 Wise. 453; 46 N. W. 539 (where » State ex rel. Ely, etc. Co. v.
the shareholders had acquiesced in Swanger, 195 Mo. 539 ; 93 S. W. 932.
the action of the directors). ' See infra, § 1193 et seq., § 1445
See infra, § 1438. et seq.
487
§ 587 INCEEASE AND REDUCTION OF CAPITAL [ChAP. XI
is required to be convened by notice of any particular form or
for any specified length of time, the requirement will be con-
strued in the same way as other requirements as to notice of
company meetings. That is to say, the notice will be deemed
to have been designed for the benefit of the members, and the
lack of it may be waived by those who aire not properly notified.^
Where the statute requires the resolution for an increase of
capital to be passed at a meeting called for the purpose, the
requirement is not satisfied by a notice stating that the meeting
is called to act on a report of the board of directors, although
that report recommended the increase and had been generally
circulated among the shareholders.^ Under a statute which re-
quires a notice stating "what increase is proposed to be made
in the capital stock or indebtedness of the corporation," one
notice of an intention to increase both the capital stock and the
bonded indebtedness is sufficient ; ' and, if the statute also pro-
vide that the increase may be either equal to or less than that
stated in the notice, a notice giving the maximum amount of
the proposed increase is good.*
§ 587. Motives actuating Increase, how far material. — The
motive of the increase is no concern of the registrar charged with
the duty of recording the certificate of increase. Hence, he may
not refuse to record the certificate on the ground that the increase
was made immediately after the incorporation of the company
for the purpose of avoiding a tax which would have been payable
if the enlarged capital had been provided for in the certificate
of incorporation.^ On the other hand, if the increase is for a
fraudulent purpose, the defrauded party may doubtless enjoin
its consummation or have it set aside." So, as will presently
' Nelson v. Hubbard, 96 Ala. 238 ; (where all the shareholders assented
11 So. 428; 17 L. R. A. 375; State without any meeting being held).
ex rel. Norvell-Shapleigh Hardware ' PaUiser v. Home Telephone Co.
Co. V. Cook, 178 Mo. 189; 77 S. W. (Ala.), 44 So. 575.
559 (overruling State ex rel. Donnell * PalUser v. Home Telephone Co.
Mfg. Co. V. McGrath, 86 Mo. 239). (Ala.), 44 So. 575, 579 (headnote
See also infra, § 1210. inadequate).
' Jones v. Concord, etc. B. R. Co., ° State ex rel. Home Bldg., etc.
67 N. H. 119, 140 (headnote inade- Ass'n v. Rotwitt, 17 Mont. 537; 43
quate) ;■ 38 Atl. 120. Pac. 922 (where it was said that the
Cf. Jones V. Concord, etc. R. R. objection could only be made by the
Co., 67 N. H. 234; 30 Atl. 614; 68 state on quo warranto).
Am. St. Rep. 650; Fvnley Shoe & ° Donald v. American Smelting,
Leather Co. v. KuHz, 34 Mich. 89 etc. Co., 62 N. J. Eq. 729; 48 Atl.
488
§ 574- § 677] HOW increase may be made § 588
be shown, any shareholder may enjoin an increase which is
proposed to be made without recognizing his prior right to sub-
scribe to his proportion of the new shares.'
§ 588. Examination of Proceedings by Public Official — Cer-
tificate of Regularity. — Statutes sometimes provide that the pro-
ceedings looking to an increase of capital shall be scrutinized by
some pubUc official who before the increase can be made must
certify that they comply with law.^ Notably, a provision of this
sort is found in the National Banking Act. In construing this
provision, the federal courts have held that the certificate of the
comptroller of the currency, to whom is intrusted the duty of
examining the proceedings under which the increase is to be
made, conclusively establishes that the proceedings are legal
and regular.^ For example, the certificate precludes the objec-
tion that the requisite two-thirds vote was not cast for the reso-
lution to increase the capital.* But notwithstanding the comp-
troller's certificate, directors who falsely represent that profits
sufficient for the declaration of a stock dividend have been
earned and who by these means induce the comptroller to ap-
prove the increase of capital involved in such a dividend, are
liable to the company for its damages.* Moreover, notwithstand-
ing the certificate, any person who is alleged to have subscribed
for the new shares is free to show that he never became a share-
holder.* But a subscriber to the new shares cannot escape lia-
bility because the comptroller issued the certificate after the
bank was known to be insolvent and for the mere purpose of
subjecting to liability as shareholders persons who had sub-
scribed to new shares and had been held out as shareholders
for several years, but who had never become actual shareholders
771 (increase for the purpose of issu- 85 Fed. 934; 29 C. C. A. 491; Til-
ing the new stock for less than par Unghast v. Bailey, 86 Fed. 46 ; Lati-
enjoined). mer v. Bard, 76 Fed. 536; Brovm v.
' Infra, § 614. TiUinghast, 93 Fed. 326; 35 C. C. A.
^ As to similar provisions ap- 323.
plicable to reductions of capital, see Cf. Scott v. Deweese, 181 U. S.
infra, § 646. Such a certificate of 202; 21 Sup. Ct. 585.
increase of capital by an officer of * Bailey v. TiUinghast, 99 Fed.
another state may be received in 801 ; 40 C. C. A. 93.
evidence although not certified in ° Cockrill v. Abeles, 86 Fed. 505;
accordance with the Act of Congress : 30 C. C. A. 223.
Person & Riegel Co. v. Lipps (Pa.), " Bailey v. TiUinghast, 99 Fed.
67Atl. 1081. 801, 809 (headnote inadequate);
' Columbia Nat. Bank v. Mathews, 40 C. C. A. 93.
489
§ 589 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
because the certificate necessary to consummate the legal increase
of capital had been withheld.'
§ 589. Whether full Amount of new Stock must be taken. — An
increase of capital may in ordinary cases be complete before
the whole number of the new shares is subscribed for. More-
over, calls may be made upon a subscriber to shares issued by
way of increase of capital even though the entire amount of the
increase has not been subscribed for.^ The reason for holding
that a subscriber to shares in the original capital of a corporation
is not liable for calls until the entire capital has been subscribed
is that the company is not authorized to commence business and
therefore can have no need of money before its capital is wholly
taken; but this reason has no application to shares which are
issued by way of increase of capital, for the company is usually
engaged in the lawful prosecution of its business before the
increase is projected. Where, however, the increase is made
before the company has begun business and when only a very
few shares have been issued, the increase being accompanied by
a change in the par value of the shares, a person who shortly
before the increase, subscribes to shares of the new par value
cannot be called upon to pay until the entire new capital is
subscribed.^
§ 590. Provision confining Increase to Number of Shares taken.
— Although ordinarily the nominal authorized capital may be
increased before all the new shares are taken, yet sometimes sub-
' BaUey v. TUlinghast, 99 Fed. 595; 10 Sup. Ct. 417; Scott v. De-
801; 40 C. C. A. 93. weese, 181 U. S. 202; 21 Sup. Ct.
" Clarke v. Thomas, 34 Ohio St. 585.
46; Greenbrier Indust. Exp. v. But see Bead v. Memphis Gayoso
Ocheltree, 44 W. Va. 626, 633 (head- Gas Co., 9 Heisk (Tenn.), 545 (some
note inadequate); 30 S. E. 78; expressions thrown out by the court
Nutter V. Lexington, etc. B. B. Co., obiter being difficult to reconcile
6 Gray (Mass.) 85; Gettysburg Nat. with the authorities cited by the
Bank V. Brown, 95 Md. 367; 52 Atl. court); Winters v. Armstrong, 37
975 (semble) ; Pope v. Merchants' Fed. 508 (overruled by Supreme
Trust Co. (Tenn.), 103 S. W. 792. Court cases, supra). In Hahn's Ap-
Cf. Avegno v. Citizens Bank, 40 peal, 7 Atl. Rep. 482 (Pa.) the sub-
La. Ann. 799; 5 So. 537; Pacific scription was subject to an express
Nat. Bank v. Eaton, 141 U. S. 227 condition that it should not be bind-
(headnote inadequate) ; 1 1 Sup. Ct. ing unless the whole of the proposed
984; Thayer v. Butler, 141 U. S. increase should be subscribed.
234; 11 Sup. Ct. 987; Butler v. ' Gettysburg Nat. Bank v. Brovm,
Eaton, 141 U. S. 240; 11 Sup. Ct. 95 Md. 367; 52 Atl. 975.
985; Aspinwall v. Butler, 133 U. S.
490
§ 574- § 677] HOW increase may be made § 592
scription of the whole number of new shares is expressly made
a condition precedent to the accomplishment of any increase;
and sometimes it is provided that the increase shall extend only
to the number of shares that may be subscribed for within a
certain time. For instance, where the company, having power
to increase its capital from $25,000 to $1,000,000, resolves to
open its books for thirty days for subscriptions for $600,000,
the meaning is not that a present increase of capital to the amount
of $600,000 be then and there made but rather that the increase
to be made extend to so much only of the $600,000 as may be
subscribed within the thirty days.'
§ 591. Whether Subscriber to new Shares becomes a Share-
holder before Payment in full. — The question whether a sub-
scriber to shares which are part of an increase of capital can
become an actual shareholder before he has paid for the shares
in full has been considered elsewhere.^ The National Banking
Act provides that "no increase of capital shall be valid until the
whole amount of such increase is paid in"; but this provision
does not have the effect of invalidating shares of increased capital
that have been fully paid for, merely because some of the
other shares are not paid for ; and therefore the holder of such
paid-up shares is subject to the statutory liability of shareholders
to creditors.^
§ 592. Consequences of Failure to comply with Statutory Re-
quirements. — As to cases where a company, having statutory
power to increase its capital, attempts to do so without observ-
ing the statutory conditions,^ there is both in England and
America considerable conflict of authority. There seems to be
no doubt that though the statutory conditions are disregarded at
the time the increase is made, yet a subsequent compliance with
the terms of the law validates the issue.^ But even where the
statutory requirements or conditions have never been fully com-
plied with, the decided weight of American authority and sev-
eral important English cases hold that the non-compliance is a
' Read v. Memphis Gayoso Gas provisions should be presumed. Man
Co., 9 Heisk. (Tenn.) 545. v. Boykin (S. Car.), 60 S. E. 17.
' Supra, § 174. Compare also in- * Sewell's Case, 3 Ch. 131. Cf.
fra, § 779. First Nat. Bank v. Wyoming Valley
^ Scott V. Latimer, 89 Fed. 843; Ice Co., 136 Fed. 466; Pacific MUl
33 C. C. A. 1. Co. V. Inman, Poulsen & Co. (Oreg.),
* Compliance with the statutory 90 Pao. 1099.
491
§ 592 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
mere irregularity of which, after a subscriber to the new shares
has acted and been treated as shareholder, both he and the com-
pany will be estopped to take advantage.' On the other hand,
authority is not lacking for the view that statutes authorizing
corporations to increase their capital confer a special power and
> MiUer's Dale Co., 31 Ch. D. 211;
Campbell's Case, 9 Ch. 1; Rich-
mond's Case, 4 K. & J. 305 ; Payson
V. Withers, 5 Biss. 269; Barrows v.
Natchang Silk Co., 72 Conn. 658;
45 Atl. 951 (certificate of increase
not filed for record as required);
Bailey v. Champlain, etc. Co., 77
Wise. 453; 46 N. W. 539; Hoeft v.
Kock, 123 Mich. 171; 81 N. W. 1070;
81 Am. St. Rep. 159 (resolution
making increase not recorded as re-
quired) ; Clarke v. Thomas, 34 Ohio
St. 46; ScoviU v. Thayer, 105 U. S.
143, 149 (explaining Upton v. Tre-
bUcock, 91 U. S. 45; Chubb v. Upton,
95 U. S. 665; PuUman v. Upton, 96
U. S. 328); Handley v. Stutz, 139
U. S. 417, 424-426; 11 Sup. Ct. 530;
Peck V. Elliott, 79 Fed. 10, 18; 24
C. C. A. 425; 38 L. R. A. 616 (failure
to pay a tax on increase as required) ;
Olson V. State Bank, 67 Minn. 267;
69 N. W. 904; Feeder v. Mudgett,
95 N. Y. 295, 309-311; Columbia
Nat. Bank v. Mathews, 85 Fed. 934;
29 C. C. A. 491 ; Tillinghast v. Bailey
86 Fed. 46; Latimer v. Bard, 76 Fed.
536; Scott v. Deweese, 181 U. S. 202;
21 Sup. Ct. 585; Manufacturers'
Paper Co. v. AUen^Higgins Co., 154
Fed. 906 (certificate not recorded as
required by statute as condition pre-
cedent to validity of new shares);
Thunder Hill Mining Co., 4 Brit.
Columb. 61 (resolution not duly
passed and not recorded but sub-
scribers liable as contributories in
winding-up, with which decision
compare Twigg v. Thunder Hill Min-
ing Co., 3 Brit. Columb. 101, where a
person who had accepted some of the
same issue of new shares was relieved
of them, while the company re-
mained a going concern) on pro-
ceedings to rectify the register of
shareholders); Pope v. Merchants'
Trust Co. (Tenn.), 103 S. W. 792
(subscriber liable in liquidation al-
though assets sufficient to pay
creditors in full); Man v. Boykin
(S. Car.), 60 S. E. 17.
Cf . Kansas City Hotel Co. v. Hunt,
57 Mo. 126 (where recorded certifi-
cate of increase did not state all
data required by law) ; Western Nat.
Bank v. Armstrong, 152 U. S. 346,
354; 14 Sup. Ct. 572; McFarlinv.
First Nat. Bank, 68 Fed. 868; 16
C. C. A. 46 (where the comptroller
of the currency had never certified
his approval of the increase as re-
quired by law); Sayles v. Brown,
40 Fed. 8 (where the company never
approved the increase by a valid
majority vote) ; First Nat. Bank v.
Wyoming Valley Ice Co., 136 Fed.
466 (as to non-payment of required
tax on increase of capital); Gowdy
Gas, etc. Co. v. Patiison, 64 N. E.
485; 29 Ind. App. 261; Cunning-
ham V. German Ins. Bank, 101 Fed.
977; 41 C. C. A. 609 (held, that the
amount which the company might
borrow should be determined with
reference to the capital as irregu-
larly increased, no formal resolution
of the shareholders, as required by
law having been recorded, but only
an amendment to the incorporation
paper signed by the president and
secretary) ; Farmers' L. & T. Co. v.
Toledo, etc. By. Co., 67 Fed. 49,
56-58 (similar point to that of pre-
ceding case); Poole v. West Point
Butter, etc. Co., 30 Fed. 513 (as to
amount of authorized indebtedness
determined with reference to the
capital).
492
§ 574-§ 677] HOW increase may be made
§592
that unless the terms of the statute (except such as can be
deemed directory merely) are strictly pursued, the power fails
altogether and the case is to be treated as if no statute were in
existence, so that the new shares are wholly void.' At any rate,
until the statutory conditions have been performed, the inclina-
tion of the .courts will be to hold that acts looking to an increase
of capital were not intended to operate as a present issue of
additional shares but merely as steps taken with a view to effect-
ing an increase of capital in the future by first complying with
the statutory formalities and then issuing new shares.^ More-
over, a mere executory contract of subscription to shares con-
stituting part of an increase of capital will not be specifically
enforced in equity unless all the requirements of law as to the
manner of issuing the new shares have been complied with ; ^
and similarly, if the company is suing to enforce a contract one
of the conditions of which is that the capital shall have been
increased, the company must show that the increase has been
duly made.*
' Bank of Hindustan, etc. v.
Alison, L. R. 9 C. P. 222 (relating
to the same issue held to be valid in
Campbell's Case, ubi supra); Mc-
Card v. Ohio, etc. R. R. Co., 13 Ind.
220; Lincoln v. New Orleans Ex-
press Co., 45 La. Ann. 729; 12 So.
937 (where the subscriber recovered
back from the company the sums
paid on the shares); Schierenberg
v. Stephens, 32 Mo. App. 314 (where
the company being insolvent, the
subscriber recovered back from the
receiver the amounts paid in on the
shares) ; Railroad v. Sneed, 99 Tenn.
1 ; 41 S. W. 364 ; 47 S. W. 89 (where
the subscriber to the new shares
successfully defended an action for
calls); Winters v. Armstrong, 37
Fed. 508.
Cf. Spring Co. v. Knowlton, 103
TJ. S. 49, 57 (headnote inadequate) ;
Wood V. Union Gospel Church Bldg.
Ass'n, 63 Wise. 9; 22 N. W. 756;
Lathrop v. Kneeland, 46 Barb. (N.
Y.) 432; American Tube Works v.
Boston Machine Co., 139 Mass. 5;
29 N. E. 63 (relating to an attempted
issue of "special stock" under a
Massachusetts statute) ; Tschumi v.
HUls, 6 Kan. App. 549; 51 Pac. 619;
Palmer v. Bank of Zumbrota, 72
Minn. 266; 75 N. W. 380 (where the
subscribers to the new shares irregu-
larly issued were allowed to stand
as creditors upon their claim to re-
cover back money paid upon the
new shares, in competition with
prior, but not subsequent creditors
of the corporation, to whom indeed
the holders of new shares were held
subject to a statutory liability).
' See Spring Co. v. Knowlton,
103 U. S. 49, 57 (headnote inade-
,quate); McFarlin v. First Nat.
Bank, 68 Fed. 868; 16 C. C. A. 46.
' Smith V. Franklin Park, etc. Co.,
168 Mass. 345; 47 N. E. 409.
* Pacific Mill Co. v. Inman, Paul-
sen & Co. (Oreg.), 90 Pac. 1099.
493
§ 593 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
§ 593. Rescission of Increase. — A resolution increasing the
capital, once duly passed in pursuance of a statutory power,
cannot subsequently be revoked or rescinded even before the new
shares are actually issued, except in the mode, if any, provided
for reducing the capital.'
§ 594. Contracts to exercise Statutory Power of Increase. —
A contract by a corporation to exercise its statutory power of
increasing its capital would seem, at least under some statutes,
to be unenforceable and void. For if such a contract could be
enforced, the statutory conditions and formalities would be
reduced to a mere ceremony which the company could not
refuse to perform, and thus indirectly by making the contract
the company would bind itself to do that which can be done
directly only by observing the statutory requirements.^ Perhaps
the question depends on the nature of the statutory conditions.
For instance, if a vote of two thirds of the shareholders is
required by statute as a condition to increasing the capital,
obviously a contract to increase the capital authorized by a
bare majority of the shareholders could not bind the min-
ority. But on the other hand, where the only requirement is
that the resolution making the increase be recorded in a
public registry, the argument is very forcible that recording
is a mere formality which is required before the increase
can be actually made but which is not at all necessary for
a mere contract to make the increase. The objection, more-
over, goes rather to the remedy of specific performance than
to the validity of the contract; for even a corporation which
has no power at all to increase its capital may be required
to respond in damages to a person to whom it has contracted
1 Sutherland v. Olcott,'95 N. Y. Machine Co., 16 R. I. 571; 18 Atl.
93; Moses v. Ocoee Bank, 1 Lea 176; 6 L. R. A. 575.
(Tenn.) 398, 408 (semble). But see Reid v. Detroit Ideal
But see Terry v. Eagle Lock Co., Paint Co., 94 N. W. 3 (headnote in-
47 Conn. 141. adequate); 132 Mich. 528 (where a
Cf. HoUingshead v. Woodward, 35 subscription to shares to be issued
Hun (N. Y.) 410; Nettles v. Marco, by increase of capital though made
33 S. Car. 47; 11 S. E. 595. before the increase was accom-
' See Finley Shoe & Leather Co. plished was held binding); Bratten
V. Kurtz, 34 Mich. 89; McNtdta v. v. Catavnssa R. R. Co., 211 Pa. 21;
C(yrn Belt Bank, 164 111. 427; 45 60 Atl. 319 (bonds convertible into
N. E. 954 ; 56 Am. St. Rep. 203. stock at the option of the holder
Cf. Anthony v. Household Sewing enforced).
494
§ 574^ § 677] STOCK dividends § 596
to issue valid shares '■ or whose right to vaUd shares it is
estopped from denying.^
§ 595. Contracts to refrain from exercising Statutory Power. —
A contract not to exercise the statutory privilege of increasing
the capital stands on a different footing. The true rule is sub-
mitted to be that a company cannot contract itself out of its
statutory power, but that on the other hand a contract that no
exercise of the power shall affect the rights of certain privileged
shareholders would be competent.^ At any rate, a provision in
the by-laws or internal regulations forbidding an increase of
capital although all the statutory conditions are complied with,
unless certain other conditions are performed, is quite nugatory.*
§ 596-§ 602. Stock Dividends.
§ 596. Legality of Stock Dividends. — So-called " stock divi-
dends" ' constitute a peculiar form of increase of capital that
is not infrequently met with in America. A company, having
accumulated profits which would be available for distribution
among the shareholders in the shape of dividends, determines to
retain the profits for the expansion of its business and to distrib-
ute new shares, to a par value equal to the amount of the profits,
among the old shareholders. Such a scheme is obviously an
increase of capital, which the law does not permit without some
aflBrmative statutory provision. To be sure, even without special
authority the company might have retained the undrawn profits
for use in its business — in other words, might have virtually
' Supra, § 581. dividend" was held not to be a divi-
^ Supra, § 580, and infra, § 909. dend within the meaning of a statute
' Cf. infra, § 671, where the similar requiring the company to pay in-
question as to reductions of capital terest on amounts subscribed by
is discussed. certain municipal corporations until
See also Martin v. Remington- the first dividend, see Hardin County
Martin Co., 95 N. Y. App. Div. 18; v. Louisville, etc. R. R. Co., 92 Ky.
88 N. Y. Supp. 573; Howell v. 412; 17 S. W. 860. Cf. Louisville,
Chicago, etc. Ry. Co., 51 Barb. etc. R. R. Co. v. Hart County (Ky.),
(N. Y.) 378, 381. 75 S. W. 288; 25 Ky. Law Rep.
* Ayre v. Skelsey's Adamant 395.
Cement Co., 20 Times L. R. 587 As to whether stock dividends
(affirmed on another ground in 21 are taxable as dividends, see Com-
Times L. R. 464). See infra, § 696. monwealth v. Pittsburg, etc. Ry. Co.,
"For a case where a "stock 74 Pa. St. 83.
495
§ 596 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
capitalized the profits ; ' but the objectionable feature is the
increase ^in nominal or share capital — the capital stock, as we
say in America. One need not speculate why the law should
freely permit an increase in the actual capital but should frown
upon an increase in the nominal capital. Suffice it to say that
the nominal capital is fixed and limited by the incorporation
paper in pursuance of statute while no limit is usually put upon
the actual capital which the company may accumulate. Perhaps
one reason for the apparent anomaly is that by increasing the
nominal capital the company could diminish the apparent prof-
itableness of its undertaking and thus perhaps by a certain kind
of misrepresentation ward off demagogic attacks, in state legis-
latures and elsewhere, upon the supposedly undue or uncon-
scionable prosperity of the corporation. At all events, if the
company's legal capital has been fully issued, a stock dividend
is an increase of capital, and as such is permissible only by virtue
of affirmative statutory authority.^ When a corporation has the
power to increase its nominal capital and also has an accumu-
lated surplus, the law does not prohibit the distribution of new
shares to the extent of the company's surplus among the old
shareholders as a dividend, provided the formalities prescribed
for an increase of capital be observed.'
' Barry v. Merchants' Exchange Brundage, 60 N. Y. 544, where the
Co., 1 Sandf . Ch. (N. Y.) 280. See court left open the question as to the
also infra, § 1345. legaUty of the scrip-dividend in-
^ Cf. Bailey v. Railroad Co., 22 volved in Bailey v. Railroad Co., ubi
Wall. 604 (where a company having supra.
no power to increase its capital and As to distributing among the
being restricted by statute to annual shareholders as a dividend shares
dividends of ten per cent, issued to which after being issued have been
its shareholders, to represent their acquired by the company by pur-
interest in accumulated earnings, chase or otherwise, see Comnwn-
scrip-certificates entitling the hold- wealth v. Boston & Albany R. R. Co.,
ers to share pro rata with holders of 142 Mass. 146; 7 N. E. 716; Dock
capital stock in subsequently de- v. ScWicMer-,eic. Co., 167 Pa. St. 370;
clared dividends and generally to 31 Atl. 656. See infra, § 1385.
enjoy substantially all the rights of As to using money of the corpo-
shareholders except that of voting, ration to pay for shares to be issued
and was held subject to a tax on to a third person as trustee for the
scrip-dividends, the vaUdity of the existing shareholders, see Jones v.
scrip-dividends being assumed and Morrison, 31 Minn. 140; 16 N. W.
no point being made, that the issue 854.
thereof amounted to an evasion of ' Williams v. Western Union Tel.
the law preventing an increase of Co., 93 N. Y. 162; Re Barton's
capital). See also Brundage v. Triist, 5 Eq. 238, 244 (headnote
496
§ 574-§ 677] STOCK dividends § 600
§ 597. Necessity that Profits equivalent to amount of Stock
Dividend should be in Hand. — In order to sustain such a stock
dividend, there must be evidence that the company has in hand
the requisite amount of surplus profits.^ Thus, where the state
constitution forbids the issue of stock except for money or prop-
erty, a stock dividend of one hundred per cent on the old shares,
where there is no affirmative proof that funds to such an extent
in excess of the original capital are actually in hand, will be
enjoined.^
§ 598. Consequences of an Illegal Stock Dividend. — Even if the
company is without power to declare a stock dividend, a share-
holder cannot recover the amount of the dividend in money. He
must either take the shares as offered to him or do without any
dividend at all.^
§ 599: Necessity for distributing Stock Dividends equally. — Of
course, a stock dividend, like any other dividend, must be distrib-
uted among the shareholders fro rata} This rule corresponds
with the rule that where new shares are offered for iSubscription
the old shareholders are entitled to a preference over strangers.
§ 600. Stock Dividend distinguished from Cash Dividend ac-
companied by Option to subscribe to new Shares. — A stock
dividend differs from a cash dividend accompanied by an offer of
the proposed new shares to the old shareholders for subscription,
in that in the case of a stock dividend no shareholder has any
option to take cash and decline the stock.^ To be sure, he may
refuse to accept the new shares which the company offers to
inadequate); Howell v. Chicago, etc. shares exceeding in par value the
Ry. Co., 51 Barb. (N. Y.) 378, amount declared to be available for
380; Cunningham v. Oerman Ins. dividend was held to be unlawful
Co., 101 Fed. 977, 981 (headnote under a statute forbidding the use
inadequate). of money raised by calls on shares for
But see Hoole v. Great Western payment of dividends).
By. Co., 3 Ch. 262, criticised infra, ' FitHpatrick v. Dispatch Pub.
§ 1356. Co., 83 Ala. 604; 2 So. 727.
'■ CockriO. v. Abeles, 86 Fed. 505; ' Rand v. Hubbell, 115 Mass. 461,
30 C. C. A. 223. 478; 15 Am. Rep. 121.
Cf. Commonwealth v. Boston, etc. Cf. Harris v. San Francisco Sugar
R. R. Co., 142 Mass. 146; 7 N. E. Ref..Co., 41 Cal. 393, 408.
716 (where the rule was held to be * Knapp v. Publishers, etc. Co.,
dispensed with by a statute author- 127 Mo. 53; 29 S. W. 885; Jones v.
izing the company to dispose of the Terre Haute, etc. R. R. Co., 57 N. Y.
shares as its absolute property); 196.
Hoole v. Great Western Ry. Co., 3 Ch. * Lyman v. Pratt, 183 Mass. 58;
262 (where a dividend payable in 66 N. E. 423.
VOL. I.— 32 497
§ 601 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
distribute to him ; but he cannot obtain cash in lieu of the stock.'
On the other hand, where a cash dividend is declared, accom-
panied by an offer of new shares "pro rata with the amount of the
dividend credited as paid thereon, it would seem that any share-
holder may elect to take the cash and to refuse the new shares,^
although indeed Lord Watson seems to have been of a con-
trary opinion on this point.^ According to Lord Watson's view
a transaction of that sort is in substance identical with a stock
dividend.*
§ 601. Rescission of Stock dividend. — A stock dividend should
also be distinguished from a cash dividend in that in the case of
cash dividend, the right of the shareholder becomes indefeasible
immediately upon the declaration of the dividend, and the com-
pany cannot subsequently rescind its action. In the case of a
stock dividend, on the other hand, until the formalities required
by law as conditions precedent to an increase of capital have
been completed, all is in 'fieri, so that until then the company
ipay revoke-the dividend.^ The reason of this rule applies, how-
ever, only where the stock dividend involves an increase of the
company's nominal capital, and therefore a dividend payable in
shares which had been purchased by the company should be in
this respect assimilated to a cash dividend, and is irrevocable.*
§ 602. Sale of new Shares in Market followed by Distribution
of Premium among old Shareholders. — A method of increasing
capital, which has been sometimes employed, and which some-
what resembles a " stock dividend," although it certainly cannot
properly be called by that name, consists in selling the new shares
in the market and distributing the premium obtained from the
sale among the old shareholders. Such a distribution is not a
dividend within the meaning of a law levying a tax upon "divi-
' Cf. State V. Baltimore, etc. R. R. ' Bouch v. Sproule, 12 A. C. 385,
Co., 6 GiU (Md.) 363 (where the 404.
dividend was declared payable in * See infra, § 1380, § 1386.
bonds). ' Terry v. Eagle Lock Co., 47
2 Bouch V. Sproule, 12 A. C. 385, Conn. 141.
398 (per Lord Herschell). Cf. Ma- « Dock v. Schlichter Jute Cordage
lam V. HUchens (1894), 3 Ch. 578. Co., 167 Pa. St. 370; 31 Atl. 656.
498
§ 574-§ 677] EIGHT OF PEE-EMPTION § 603
dends" paid to shareholders.' Moreover, money so distributed
should, it seems, be regarded as capital rather than income as
between a tenant for life and remainderman of the old shares.^
§ 603-§ 619. RIGHT OF OLD SHAREHOLDERS TO PREFERENCE
IN ALLOTMENT OF NEW SHARES.
§ 603. In general. — Usually, where the capital of a cor-
poration is increased by the issue of additional shares, the old
shareholders have a right to subscribe to the new shares in pro-
portion to their holdings in the existing capital, before the new
shares can be allotted to outsiders. A right of this sort is often
expressly conferred by statute or by the company's incorpora-
tion paper or regulations. Where that is the case, the extent of
the right will depend of course on the terms of the particular
statutes or regulations by which the right is conferred. To give
the old shareholders such a preferential right of subscribing to
the new shares is generally a wise and just provision ; for in that
way the several shareholders, provided they possess sufficient
pecuniary resources to exercise the right, are enabled to pre-
serve their proportionate interest in the company. The American
cases and text-writers generally state that the same absolute right
inheres in each of the old shareholders even apart from any ex-
press statute or resolution ; ' and this doctrine has recently been
' State V. Franklin Bank, 10 Ohio Co., 90 N. W. 1040; 131 Mich. 79;
St. 91 (headnote inadequate). 100 Am. St. Rep. 582; Electric Co.
' Ldand v. Hayden, 102 Mass. v. Edison Electric, etc. Co., 200 Pa.
542. See infra, § 1334. But see 516; 50 Atl. 164; WaU v. Utah
Wiltbank's Appeal, 64 Pa. St. 256, Copper Co. (N. J.), 62 Atl. 533.
259; 3 Am. Rep. 585. But see contra: Ohio Ins. Co. v.
' Reed Estate Trv^t Co. v. Bird, Nunemacher, 15 Ind. 294; Meredith
90 Md. 229; 44 Atl. 1048 (semble); v. New Jersey Zinc & Iron Co., 55
Gray v. Porttand Bank, 3 Mass. 364; N. J. Eq. 211, 219-220; 37 Atl. 539;
3 Am. Dec. 156; Jones v. Concord, affirmed short in 56 N. J. Eq. 454;
etc. B. R. Co., 67 N. H. 119; 38 Atl. 41 Atl. 1116 (where the new stock
120 ; Eidman v. Bowman, 58 111. 444 was issued in exchange for property),
(semble); 11 Am. Rep. 90; Hunv- Cf. Be Wheeler, 2 Abb. Pr., n. s.
boldt Driving Park Ass'n v. Stevens, (N. Y.), 361, 363; Morris v. Stevens,
34Nebr. 528; 52N. W. 568; 33 Am. 178 Pa. St. 563, 578-579; 36 Atl.
St. Rep. 654 (semble); Jones v. 151 (where it was said that the
Morrison, 31 Minn. 140, 151-153; shareholders themselves may order
16 N. W. 854; State ex rel. Page v. that the new shares be offered for
Smith, 48 Vt. 266, 289 (semble); public subscription).
Hammond v. Edison Illuminating
499
§ 604 INCREASE AND REDUCTION OP CAPITAL [ChAP. XI
affirmed, after full consideration, by the Court of Appeals of
New York.' If this be so, however, the shareholders cannot
claim as of right to subscribe to the new shares at par if they could
be sold in the market at a greater price ; ^ but can at most claim
the right to subscribe for the new shares at the same price as
could be got for them in the market from a stranger. It would
seem, however, that where by statute or resolution, the old
shareholders are entitled to their proportion of the new shares,
their right is prima facie a right to subscribe at par.' Certainly,
it is not illegal to permit the old shareholders to subscribe for the
new shares pro rata at par even though the shares could be sold
in the market for a larger sum.* It has been said obiter that a
majority of the shareholders may "provide for a sale in parcels
or bulk at public auction, when every stockholder can bid the
same as strangers " ; " but this dictum, inasmuch as it would en-
able the wealthy shareholders to "squeeze out" their poorer
fellows by offering the new shares in large blocks for which only
men of great means could bid, has been forcibly criticised."
§ 604. Exceptional Cases. — The issue of bonds convertible
into shares at the option of the holder without according any
pre-emptive right to the existing shareholders is certainly no less
objectionable than the issue of the new shares in presenti to
strangers instead of to the old shareholders.' If the increase of
capital is effected upon an amalgamation with another company
to whose shareholders the new shares are issued, it has been
' Stokes V. Continental Trust Co., ' Cf. Oray v. Portland Bank, 3
186 N. Y. 285; 78 N. E. 1090. Mass. 364; 3 Am. Dec. 156; Cun-
' Stokes V. Continental Trust Co., ningham's Appeal, 108 Pa. St. 546;
186 N. Y. 285, 301 ; 78 N. E. 1090. Attorney-Oeneral v. Boston & Maine
Cf. Ohio Ins. Co. v. Nunemacher, R. B., 109 Mass. 99.
10 Ind. 234, 236; 15 Ind. 294; Mil- ♦ Jones v. Concord, etc. R. R. Co.,
ler V. Illinois Central R. B. Co., 24 67 N. H. 234, 239; 30 Atl. 614; 68
Barb. (N. Y.) 312, 329-330; Mere- Am. St. Rep. 650.
dith V. New Jersey Zinc & Iron Co., Cf. State v. Bank of Charleston,
55 N. J. Eq. 211, 219-220; 37 Atl. Dud. (S. Car.) 187; 39 Am. Dec.
539; affirmed short in 56 N. J. Eq. 135.
454; 41 Atl. 1116 (where the new ° Stokes v. Continental Trust Co.,
shares were issued in exchange for 186 N. Y. 285, 298; 78 N. E. 1090
property). (semble).
But see Gray v. Portland Bank, 3 » See N. Y. Financial Chronicle,
Mass. 364; 3 Am. Dec. 156; Harris Vol. 83 (Dec. 8, 1906), p. 1380, 1381.
mond V. Edison Illuminating Co., 90 ' WaU v. Utah Copper Co. (N. J.),
N. W. 1040; 131 Mich. 79; 100 Am. 62 Atl. 533.
St. Rep. 582.
500
§ 574-§ 677] RIGHT OP PRE-KMPTION § 60G
held that the old shareholders of the corporation which absorbs
the other company have no right to demand any of the new
shares.' It has been thought that the common law pre-emptive
right of the old shareholders does not exist if the new shares are
not to be issued for cash, but are to be paid for in property.^
§ 605- § 609. In whom the Right vests.
§ 605. In general. — The right of the old shareholders to
a preference in the distribution of the new shares, whether
created by statute or by the terms of the resolution authorizing
the increase of capital, belongs to those persons who are members
of the company when the increase is made. Hence, it may be
claimed by the executors of a deceased shareholder although
they have never been registered as shareholders in the place of
their testator.^ An owner of scrip or bonds convertible at the
holder's option into shares has no right to participate in an issue
of additional shares made before he exercises his option.* The
time of the increase for the purpose of determining who are
entitled to subscribe to new shares is taken to be the time when
the increase is definitively resolved upon by the corporation and
made part of the constitution of the company.*
§ 606. Relative Rights of Transferor and Transferee. — An
assignment of the shares prior to the increase would of course
convey this right along with other incidents of ownership to the
' Bonnet v. First Nat. Bank, 60 * Miller v. Illinois Central R. B.
S. W. 325; 24 Tex. Civ. App. 613; Co., 24 Barb. (N. Y.) 312; Pratt v.
Stokes v. Continental Trust Co., 186 American Bell Tel. Co., 141 Mass.
N. Y. 285, 299; 78 N. E. 1090 225; 5 N. E. 307; 55 Am. St. Rep.
(semble). 465.
^ Stokes V. Continental Trust Co., * Real Estate Trust Co. v. Bird,
186 N. Y. 285, 298, 299; 78 N. E. 90 Md. 229, 245 (headnote inade-
1090 (semble). Cf. Meredith v. New quate) ; 44 Atl. 1048.
Jersey Zinc & Iron Co., 55 N. J. Ci. Jones v. Terre Haute, etc. R. R.
Bq. 211; 37 Atl. 539; affirmed Co., 57 N. Y. 196 ^as to stock divi-
short in 56 N. J. Eq. 454; 41 Atl. dends).
1116. As to whether a holder of redeem-
' James v. Buena Ventura Nitrate able shares is entitled to participate
Co. (1896), 1 Ch. 456. in an allotment of new shares issued
Cf. Jackson v. Turquand, L. R. 4 for the purpose of obtaining the
H. L. 305; Leeds Banking Co., 1 Ch. funds necessary to consummate the
231; Bushee v. Freeborn, 11 R. I. 149 redemption, see Weidenfeld v. North-
(as to the relative rights of specific ern Pac. Ry. Co., 129 Fed. 305, 309-
and residuary legatees to shares 310; 63 C. C. A. 537.
subscribed to by the executor).
501
§ 607 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
transferee ; but there would seem to be no objection to an express
reservation of the right by the assignor, although the reservation
would be operative only in equity. Where the increase is made
after a contract for the sale of shares has been entered into but
before it has been executed, the right of pre-emption as between
the vendor and the purchaser vests in the latter.' But the vendor
is under no obligation to advance his own money in order to pro-
cure the new shares for the purchaser, and by failing to do so
and thus suffering the pre-emptive right to be lost, he incurs no
liability to the purchaser, who if he wished to avail of the option
of pre-emption should have provided the vendor, the holder of
the legal title to the old shares, with the necessary funds.' It has
been said that an assignment of the original shares after the
option to subscribe for the rateable portion of the new capital
has been exercised but before the new shares have been actually
issued will carry as an incident the right of the assignor to the
new shares when issued ; ' but the questions suggested by this
dictum, which are merely questions of the presumed intention of
the parties, would seem to depend in large measure on the terms
of the statute or by-law by which the pre-emptive right of the
old shareholders is conferred or regulated.
§ 607. Relative Bights of Tenant for Life and Remainderman of
old Shares. — The privilege of subscribing to the new shares
is not to be deemed income and therefore does not enure ex-
clusively to the benefit of a tenant for life of the old shares, but
the new shares when subscribed to, or the proceeds of sale of
the pre-emptive right if it be sold, constitute part of the corpus
of the estate.* In those states which adopt the Pennsylvania
rule of apportioning extra dividends between life tenant and
' Currie v. White, 45 N. Y. 822 § 1386); Atkins v. Albree, 12 Allen
(semble). (Mass.) 359; Lelaiid v. Hayden, 102
'Currie v. White, 45 N. Y Mass. 542 ; i?e Kerraocfeare, 104 N. Y.
822. 618,630; UN. E. 149; Biddle'sAp-
' Baltimore City Pass. Ry. Co. v. peal, 99 Pa. St. 278; Moss's Appeal,
Hambleton, 77 Md. 341, 350-351 83 Pa. St. 264 ; 24 Am. Rep. 164 ;
(semble — headnote inadequate) ; 26 W-alker v. Walker, 68 N. H. 407
Atl. 279. (headnote inadequate); 39 Atl. 432;
* Sanders v. Bromley, 55 L. T., Peirce v. Burroughs, 58 N. H. 302,
N. s., 145; Malamv. Hitchens (1894), 303 (headnote inadequate); Law v.
3 Ch. 578 (stated infra, § 1380) ; Alley, 67 N. H. 93 (headnote inade-
Davis V. Jackson, 152 Mass. 58 quate — the court saying that the
(headnote misleading); 25N. E. 21; value of the pre-emptive right is
23 Am. St. Rep. 801 (stated infra, presumptively capital) ; 29 Atl. 636;
502
§ 574- § 677] RIGHT OF PRE-EMPTION § 609
remainderman according to the time when the profits out of
which they are declared are earned/ there would seem to be no
reason why so much of the value of the pre-emptive right as is
due to profits earned during the pendency of the life estate
should not be treated as income, as indeed was done in a recent
New Hampshire case ; '' but the cases are, to say the least, rare
in which life tenants even in states which adopt the rule of ap-
portioning stock dividends have been awarded any part of the
value of the pre-emptive right.'
§ 608. Relative Rights of Preferred and Common Shareholders.
— The right inter sese of holders of preferred shares and of
holders of ordinary or common shares to participate in an in-
crease of capital has been considered in connection with the
subject of preferred shares.*
§ 609. Rights of Shareholder who has not fully paid for old Shares.
— The fact that a larger proportion has been paid in on some
shares than on others is no reason for denying to the holders of
the latter the same right of pre-emption as the holders of the >
former have. So far is this principle carried that even a share-
holder who is in default for non-payment of calls has been held
to be entitled to participate in an increase of capital pari passu
with shareholders who are not delinquent.^
Hite V. Hite, 93 Ky. 257, 267-268; Supp. 298; Hydey. Holmes (Mass.),
20 S. W. 778; 40 Am. St. Rep. 189; 84 N. E. 318.
19 L. R. A. 173; Thomson's Estate, But see WUtbank's Appeal, 64
153 Pa. St. 332; 26 Atl. 652, 653; Pa. St. 256; 3 Am. Rep. 585 (dis-
' Greene v. Smith, 17 R. I. 28; 19 tinguished in Pennsylvania cases
Atl. 1081 (with which compare cited supra and to be compared with
Bushee v. Freeborn, 11 R. I. 149, peculiar Pennsylvania rules on a
where the new shares were issued similar subject, infra, § 1387-§ 1389).
to the old shareholders on payment As to the right to subscribe for
of less than the par value) ; Brinley shares in a subsidiary company
V. Grou, 50 Conn. 66; 47 Am. Rep. organized to lease the property of
618; De Koven v. Alsop, 205 111. the principal corporation, see TFng/it's
309, 319-320; 68 N. E. 930; 63 L. Estate, 24 Pa. Co. Ct. Rep. 376
R. A. 587; Robertson v. De Brida- (where the "adventitious" right was
tour, SO N. E. 938, 943 (headnote held to be income),
inadequate); 188 N. Y. 301; Brown ' See infra, § 1387-§ 1389.
V. Brown (N. J.), 65 Atl. 739 ;CMr«is v. ^ Holbrook v. Holbrook (N. H.),
Osborn (Conn.), 65 Atl. 968 (holding 66 Atl. 124.
also that the new shares are held by 'See Pennsylvania and New Hamp-
the tnastee subject to the same duties shire cases cited supra, p. 502, n. 4.
of conversion, etc., as the old); Love- * Supra, § 569.
lace v. Anson (1907), 2 Ch. 424; ^ Reese v. Bank of Montgomery
Richmond v. Richmond, 108 N. Y. Cownti/, 31 Pa. St. 78; 72 Am. Dec. 726.
503
610 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
§ 610-§ 611. Time for Exercise of Right.
§ 610. . Before Increase of Capital is effected. — The right can-
not well be exercised by anticipation before the increase is de-
■ termined upon. A shareholder might promise to exercise the
right when it accrues, and such a promise if supported by a
consideration might operate as a contract which would bind
him personally, and perhaps bind any transferee of the shares
with notice of the promise.'
§ 611. After Expiration of Time limited for Exercise of Right. — -
The very nature of the right of the old shareholders to partici-
pate pro rata in the distribution of new capital before non-
members of the company can subscribe thereto presupposes
that the right must be exercised in some reasonable time, else
it will be lost. Moreover, the company would have the right
to name a particular date before which the existing shareholders
must subscribe or lose their prior right to do so. The only re-
striction upon this power of the company is that the date so
named must allow the shareholders a fair opportunity to avail
themselves qf their preference should they be disposed to do
so.^ When a reasonable date is named at which the shareholders'
option of subscribing to the new issue will be terminated, time
is of the essence, and no shareholder can subscribe as a matter
of right after that date,' even though his failure to subscribe
in time was due to no fault of his. Thus, where the resolution
for the issue of new capital was passed on July 25th, and the
shareholders were allowed until the 10th of the next month
for the exercise of their option, a shareholder who was abroad
and who did not learn of the option until August 12th and who
thereupon wrote immediately attempting to exercise the option,
is too late, and cannot require the company to issue to hini his
proportion of the new shares.* The only exception to the rule
of which the case just stated is an illustration is that if the share-
' Cf. Real Estate Trust Co. v. held ineffective as to a shareholder
Bird, 90 Md. 229, 246; 44 Atl. 1048. who happened to be in Europe).
^ Jones V. Morrison, 31 Minn. " Hart v. St. Charles Street R. R.
140, 153; 16 N. W. 854 (where the Co., 30 La. Ann. 758.
company's attempt to limit the time * Pearson v. London & Croydon
within which the old shareholders Ry. Co., 14 Sim. 541.
might subscribe to eleven days was
504
§ 574^§ 677] EIGHT OF PRE-EMPTION § 612
holder's failure to subscribe in due time is due to the company's
own fault — for example, if the letter notifying him of his right
to subscribe be misdirected — he will be allowed to subscribe
within a reasonable time after the expiration of the prescribed
period.' The company may require a deposit to be paid at the
time of subscribing by a shareholder who wishes to exercise
his option of subscribing for new shares; and if a shareholder
or his assignee fails to make the payment within the stipulated
time the right to subscribe is lost.^
§ 612. Waiver of pre-emptive Right. — The right of the old
shareholders may be waived by them before the expiration of
the time for subscribing to the new shares, or, perhaps, even
before the increase of capital is made or authorized.^ No such
waiver, however, will bind a purchaser of the shares without
notice thereof.* The only way in which the company can make
such a waiver certainly effective as against a purchaser of the
shares is by noting the same on the share-certificate. Inasmuch
as the right vests in those persons who are shareholders at the
time of the increase, it seems to have been thought that a waiver
of the right before that time would not bind a person who, after
the waiver but before the increase is resolved upon, acquires
shares of the original capital by transfer, even though he have
notice of the waiver ; " but there would seem to be no reason
why an absolute owner of shares should not in equity be allowed
to waive the right before it accrues nor why such a waiver should
not bind a purchaser with notice, for it must be remembered
that the privilege does not come as a mere windfall or gift of
Providence to those who are shareholders where the increase is
resolved but vests in them in consequence of the rights of owner-
ship which have all along been possessed, potentially at least,
by them and their predecessors in title. The fact that a share-
' James v. Buena Ventura Nitrate * Real Estate Trust Co. v. Bird, 90
Syndicate (1896), 1 Ch. 456. Md. 229, 246-248; 44 Atl. 1048.
^ SewaU V. Eastern B. B. Co., 9 = Real Estate Trust Co. v. Bird, 90
Cush. (Mass.) 5. Md. 229, 245-246; 44 Atl. 1048.
' Cf. Hoyt V. Shenango Valley
Steel Co., 207 Pa. 208; 56 Atl. 422.
505
§ 613 INCEEASE AND REDUCTION OF CAPITAL [ChAP. XI
holder demands the right to subscribe to the new shares at par,
whereas the extent of his legal right is to subscribe at such price
as the majority of the shareholders may fix, does not amount to
a waiver of his legal right, or justify the company in allotting
the new shares to third persons without first offering to the pro-
testing shareholder his proportion of the new shares at the same
price as the strangers are willing to pay.' Moreover, an accept-
ance of a part of the new stock to which an old stockholder is
entitled does not amount to a waiver of his right to the rest of
his quota.^
§ 613. Assignment of the Right. — The right may be as-
signed as well as waived.' Indeed, such rights are often bought
and sold on the stock exchange. As there is no certificate or
other tangible evidence of ownership of the right separable
from the share-certificate, the purchaser's only security is the
promise of the vendor or his broker. When the shareholder
has exercised his option of subscribing, he usually receives from
the company a scrip-certificate stating that he will be entitled
to so many of the new shares when issued; and this certificate
may be sold on the stock exchange precisely like a share-certifi-
cate.^ Such a sale, however, makes the purchaser merely an
assignee of a contract and not an actual shareholder. Hence,
he cannot compel the company to issue to him a share-certificate
for the shares subscribed for by his assignor ; and not until the
new shares are actually issued does he become a shareholder,
entitled to vote and exercise the other rights of a shareholder.^
It has been said that an assignment of the original shares after
the option to subscribe for a rateable portion of the new capital
has been exercised but before the new shares have been actually
issued will carry as an incident the right of the assignor to the
new shares.'
' Stokes V. Continental Trust Co., the new stock — "himself, he was
186 N. Y. 285, 299-301 ; 78 N. E. entitled to sell the right to one who
1090. could, as is frequently done."
' Schmidt v. Pritchard (Iowa), 112 * As to transfer of the right to the
N. W. 801. new shares by a sale of the old shares
' Stokes V. Continental Trust Co., see supra, § 606.
186 N. Y. 285, 297; 78 N. E. 1090, " Baltimore City Passenger By.
where the court said: "If so situ- Co. v. Hambleton, 77 Md. 341; 26
ated that he" — i. e., the old share- Atl. 279.
holder — "could not take it" — i. e., " See supra, § 606.
506
§ 574r-§ 677]
EIGHT OF PRE-EMPTION
§614
§ 614^1 616. Remedies against the Company for failing
to recognize pre-emptive Right.
§ 614. In general. — If the company disregards or refuses
to recognize the rights of an old shareholder to a preference in
the allotment of new shares, several remedies are available.
He may by bill in equity compel the company to accord him
the privilege to which he is entitled, and enjoin it from disre-
garding his rights.' If the company has already issued all the
shares to other persons who are entitled to protection as bona
fide purchasers,' so that specific performance of the duty owed
to him by the company is impossible, or if he does not choose
to ask for specific performance, he may recover his damages.^
In order to maintain an action for damages, he must first offer
and demand to subscribe to the shares to which he is entitled.*
The measure of damages in such an action will be the difference
between the amount which he would have had to pay to the com-
pany for the shares to which he was entitled to subscribe and the
value of the shares at the time the company wrongfully refuses
' Dousman v. Wisconsin, etc. Co.,
40 Wise. 418; Cunningham's Ap-
peal, 108 Pa. St. 546; Electric Co. v.
Edison Electric, etc. Co., 200 Pa. 516,
521 (headnote inadequate) ; 50 Atl.
164; Schmidt v. Pritchard (Iowa),
112 N. W. 801.
Cf. Sewcdl V. EaMernR. B. Co., 9
Cush. 5, 11; Hammond v. Edison
Mfg. Co., 90 N. W. 1040; 131 Mich.
79; 100 Am. St. Rep. 582 (manda-
mus granted against company).
But see Meredith v. New Jersey
Zinc & Iron Co., 56 N. J. Eq. 211;
37 Atl. 539, affirmed short in 56 N.
J. Eq. 454; 41 Atl. 1116 (where the
remedy at law by way of damages
was thought adequate).
^ Cf. infra, § 617.
' Real Estate Trust Co. v. Bird,
90 Md. 229; 44 Atl. 1048; Gray v.
Portland Bank, 3 Mass. 364; 3 Am.
Dec. 156; Reading Trust Co. v.
Beading I. Works, 137 Pa. St. 282;
21 Atl. 169, 170; Stokes v. Conti-
nental Trust Co., 186 N. Y. 285,
301; 78 N. E. 1090.
Cf. Crosby v. Stratton, 68 Pao.
130; 17 Colo. 212 (where the in-
jured shareholder sought in vain to
recover damages from another share-
holder who was alleged to have re-
ceived more than his just proportion
of the new shares).
* Wilson V. Bank of Montgomery
County, 29 Pa. St. 537; Beese v.
Bank of Montgomery County, 31 Pa.
St. 78; 72 Am. Dec. 726 (where the
form of action was assumpsit) ; Bori/-
net V. First Nat. Bank, 60 S. W. 325;
24 Tex. Civ. App. 613.
Cf . Hart V. St. Charles Street B. B.
Co., 30 La. Ann. 758 (where a tender
of the amount of the new shares was
required by the court).
But see Stokes v. Continental
Trust Co., 186 N. Y. 285, 299-301;
78 N. E. 1090.
507
§ 615 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
to issue them to him.* The statute of limitations begins to run
in favor of the corporation from the time of its refusal to issue
to the complainant his proportion of the new shares. If the
company exacts the payment of a premium as a condition of
allowing a shareholder to subscribe to his proportion of the new
shares, it has been held in Pennsylvania that if he pays the
premium even under protest, he cannot subsequently recover
it back.^
§ 615. Remedy personal to Shareholder whose Bight is denied.
— In order that a shareholder should have a standing in court
to complain of the distribution of new or additional shares, he
must show some violation of his own personal rights and not
merely a violation of the rights of other shareholders. For
instance, a common shareholder has no ground of complaint
because the preferred shareholders have not been permitted
by the company to participate in the allotment of new shares.^
§ 616. Company not accountable for Premium realized on Quota
of Shareholder who has waived or otherwise lost pre-emptive Right.
— A shareholder who waives or omits to exercise his right to
subscribe for his proportion of the new shares cannot compel
the company to pay him the amount of a premium, or excess
over the par value, realized by it on a sale of the shares to which
he would have been entitled, unless a statute affirmatively con-
fers such a right.*
§ 617. Rights and Liabilities of Persons to whom new shares are
issued in Violation of Pre-emptive Right of old Shareholders. —
If the right of the old shareholders to a preference in the dis-
tribution of new shares be disregarded and the new shares be
allotted to others, the allotment cannot be cancelled after the
shares have come into the hands of bona fide holders for value."
> Gray v. Portland Bank, 3 Mass. ' Weidenfeld v. Northern Pac. Ry.
364; 3 Am. Dec. 156. Co., 129 Fed. 305; 63 C. C. A. 537.
Cf. Beading Trust Co. v. Reading * Mason v. Davol Mills, 132
/. Works, 137 Pa. St. 282; 21 Atl. Mass. 76.
169, 170. ' Morris v. Stevens, 178 Pa. St.
2 De la Cuesta v. 7ms. Co., 136 563; 36 Atl. 151.
Pa. St. 62; 20 Atl. 505; 9 L. R. A. Cf. Re Wheeler, 2 Abb. Pr., n. s.
631. (N. Y.), 361 (where shares issued ia
508
§ 574-§ 677] RiaHT of pre-emption § 618
So long as the shares are in the hands of persons who are cogni-
zant of the circumstances under which they were allotted, the
issue may be cancelled ; ' and if one of the original allottees has
sold some of the new shares to an innocent purchaser, the vendor
may be enjoined from voting on or selling a corresponding
number of his old shares until the validity of the allotment be
finally passed upon.^
§ 618. Rights of old Shareholders upon Issue of previously un-
issued Shares of old Capital, surrendered and forfeited Shares. —
Whilst the distinction between an increase of capital and the issue
of previcfusly unissued shares of the existing capital or shares
which have been surrendered or forfeited must not be over-
looked, yet if a corporation has begun business before its capital
has been fully subscribed or, as the saying is, with some of its
stock remaining in its treasury, it may offer the shares so re-
maining to the existing shareholders before putting them up for
public subscription; and where that is done, the rights of the
shareholders are much the same as if the shares so offered had
constituted an increase of capital.' No obligation, however,
rests upon the company to offer to its existing shareholders in
preference to the public at large any shares of its original author-
ized capital which it may have in its disposal * — most certainly
not where the company is reissuing shares which were sur-
rendered by the original allottees.' But the company has no
disregard of the old shareholders' illustrative of some points in the
right of pre-emption were said to be law as to increase of capital,
illegal). * State ex rel. Page v. Smith, 48
^ a. Schmidt y. Pritchard (Iowa.), Vt. 266, 289-290; Hartridge v.
112 N. W. 801 (where the sub- Rockwell, R. M. Charit. (Ga.) 260;
scribers for the new shares, not being Brown v. Florida Southern Ry. Co.,
bona fide purchasers, were required 19 Fla. 472; Curry v. Scott, 54 Pa.
to recognize the rights of the old St. 270.
shareholders); Whitaker v. KUby, But see Jones v. Morrison, 31
106 N. Y. Supp. 511 (a similar Minn. 140, 146 (semble); 16 N. W.
case). 854; Way v. American Grease Co.,
But Bee Shellenberger V. Patterson, 47 Atl. Rep. 44, 46; 60 N. J. Eq.
168 Pa. St. 30; 31 Atl. 943. 263; Crosby v. Stratton, 68 Pac. 130,
' Morris v. Stevens, 178 Pa. St. 132 (semble); 17 Colo. 212.
563, 579-580 (headnote inadequate) ; Cf . Miller v. Illinois Central R. R.
36 Atl. 151. Co., 24 Barb. (N. Y.) 312; Shellen-
' Some cases of this sort, for ex- berger v. Patterson, 168 Pa. St. 30;
ample, Jackson v. Turquand, L. R. 31 Atl. 943.
4 H. L. 305, and Addinell's Case, 1 ' Crosby v. Stratton, 68 Pac. 130;
Eq. 225, have been cited above as 17 Colo. 212.
509
§ 619 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
right to accord the privilege to some favored shareholders whilst
denying it to others.' And of course the directors have no right
to issue hitherto unissued shares of the original capital to their
own friends for the purpose of maintaining themselves in control
of the company.^ So, where shares have been surrendered to
the company as "treasury stock," the directors have no right
to sell such shares to a friend for the purpose of maintaining
themselves in power, especially where the price to be obtained
for them, although under ordinary circumstances a good one,
is less than could be realized by taking advantage of the
contest for control of the corporation; and if the vendee has
notice of the object of the directors, the court will cancel the
reissue.'
§ 619. Distinction between Acceptance of Company's OSer of
Quota of new Shares and Application for Shares in Addition to Quota
at Suggestion of Company. — The exercise by shareholders, within
the time limited to them, of the right to subscribe for the new
shares completes a contract between the company and the share-
holder so subscribing.^ On the other hand, if the company
writes to the various shareholders asking them whether they
desire to take any of the new shares over and above their pro-
portion, the company is not making an offer but is merely, as
it we?e, advertising for offers; and therefore a reply by a
shareholder signifying his desire to subscribe for a certain
number of the new shares in addition to his proper propor-
tion does not complete a contract, but is a mere offer which
will not ripen into a contract unless and until it be accepted by
the corporation.^
' Eeese v. Bank of Montgomery ' Elliott v. Baker (Mass.), 80 N.
County, 31 Pa. St. 78 (headnote mis- E. 450.
leading); 72 Am. Dec. 726. * Jackson v. Turquand, L. R. 4
' Luther v. C. J. Luther Co. H. L. 305.
(Wisc.),94N. W. 69; 118 Wise. 112; ^ Addindl's Case, 1 Eq. 225;
99 Am. St. Rep. 977; WhUaker v. Jackson v. Turquand, L. R. 4 H. L.
KUhy, 106 N. Y. Supp. 511 (head- 305.
note misleading).
510
§ 574^§ 677] MEANING OF REDUCTION § 621
§ 620-§ 674. REDUCTION OF CAPITAL.
§ 620-§ 621. Definilim.
§ 620. What Reduction of Capital means. — Reduction or
decrease of capital means either a return to shareholders of actual
capital once paid in or contributed by them to the common stock,'
or a release of shareholders from a liability once incurred to
make such contribution if and when called upon to do so, or a
diminution in the nominal amount of the capital by cancelling
some of the shares or by reducing the nominal or par value of
some or all of the existing shares.
§ 621. What it does not mean. — It is scarcely necessary to
say that the mere fact that a corporation is parting with some of
its property does not indicate a reduction of capital in the legal
sense. Whenever such a surrender of corporate property is
reasonably necessary for the attainment of the objects for which
the company was formed, it cannot be said to be a reduction of
capital, even though no immediate return is secured to the com-
pany. Thus, where an investment company holds railway shares,
it may, in compliance with a scheme for reorganizing the rail-
road, surrender some of its holdings with a view to improving
the value of the remainder: to regard such a surrender as a
reduction of capital would be an entire misconception.^ Even
where losses are sustained in the prosecution of the business so
that the company's actual capital is impaired, there is never-
theless no return of actual capital to the shareholders and no
diminution in the nominal capital; and consequently there is
no reduction of capital in the legal sense.' Of course, a sale of
part of the company's capital to one of the shareholders at a
fair price is not forbidden as a reduction or return of capital.*
' Cf. Audenried v. East Coast called up again by company is re-
Milling Co., 59 Atl. (N. J.) 577, 585 duction of capital requiring legisla-
(where it was said that a return of tive sanction). See also § 497.
capital once paid in was a with- ' Thompson v. Trustees, etc. Cor-
drawal of "capital stock" within the poration (1895), 2 Ch. 454. Cf.
meaning of a statute) ; WhitwhamY. Beardslee v. Shickler (Pa.), 68 Atl.
Piercy (1907), 1 Ch. 289 (holding 44.
that payment of money to share- ' Cunningham v. German Ins.
holders to go in reduction of paid- Bank, 101 Fed. 977 ; 41 C. C. A. 609.
up capital and to be subject to be ' Robinson v. Muir (Cal.), 90
511
§ 622 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
Moreover, a distribution of new shares among the existing share-
holders as a stock dividend is not a payment or return of capital
stock to the stockholders : it is an increase rather than a reduc-
tion of the capital stock.'
§ 622-§ 624. Why RedvMion of Capital without affirmative
Legislative Sanction is forbidden.
§ 622. Reduction of Actual Capital. — :As heretofore stated,
a reduction of capital affects the rights of shareholders and
especially creditors more seriously than an increase. The capital
of a corporation or limited company is the fund provided by
law for the carrying on of its business and the payment of its
debts; and any attempt, without special legislative authority to
diminish the same is both ultra vires and illegal,^ and should be
ruthlessly stricken down by the courts. This rule is founded
in the policy of the law, and cannot be evaded by any artifice.
A decrease of capital, so far as creditors are concerned, is most
serious when it takes the form of a return to shareholders of
capital once paid in ^ or of a release from liability for uncalled
capital.
§ 623. Reduction of Nominal Capital. — But a reduction in
the nominal amount of capital may also be very objectionable,
and unless clearly authorized by statute should be held to be
illegal even though it may be designed merely to make the
nominal capital correspond with the actual capital as diminished
by losses.* For instance, if a corporation could reduce its nominal
capital, it could subsequently treat any excess in the value of
Pac. 521; Chase v. Mich. Tel. Co., its capital, loses that power upon
121 Mich. 631; 80 N. W. 717 (sale of becoming incorporated with limited
company's entire property and busi- liability under the Companies Acts,
ness to a corporation which is owner although the statute provided that
of all except eight of the shares). existing companies when incorpor-
1 Williams v. Western Union Tel. ated under the act should retain the
Co., 93 N. Y. 162. powers conferred by their deeds of
" Haas Co., 131 Fed. 232. settlement).
Cf. Droitwich Patent Salt Co. v. ' Cf. Holmes v. NewcasUe-upon-
Curzon, L. R. 3 Ex. 35 (holding that Tyne Abattoir Co., 45 L. J. Ch., n. s.,
an unlimited company, or partner- 383.
ship, which under its deed of settle- * Dane v. Young, 61 Me. 160,
ment possessed the power to reduce 169-170 (headnote inadequate).
512
f 574-§ 677] REDUCTION § 624
its assets over the capital as so reduced as representing surplus
or profits available for distribution among the shareholders as
dividends.' So, too, the effect of a reduction of the nominal
capital, if valid, would be to diminish jiro tanto any statutory
liability of shareholders to creditors which may be measured
by the nominal or par value of the shares.^
§ 624. General Principle. — At all events, the true view
would seem to be that the capital having been fixed by the mem-
orandum of association or incorporation paper is by statute
made irreducible except in the mode, if any, expressly provided
by law, and that whether in any particular case a reduction of
capital in a certain way would be hurtful either to creditors or
shareholders is a question with which the courts need not con-
cern themselves.^ ' Whether a particular decrease of capital be
good or bad policy for the corporation, be injurious or beneficial
to the shareholders, be fraught with danger to creditors or in
no way jeopardizing their interests, — these are not questions
for the courts ; for every decrease of capital is forbidden by the
legislature by the very scheme of incorporation, unless some
clear statutory sanction can be found.
In a recent California case, a corporation was formed, under
a statute authorizing incorporation for any lawful objects, for
the purpose of developing and selling a tract of land, which was
accepted in payment for shares of the capital stock, in parcels
or building lots. The incorporation paper provided that as
portions of the tract should be sold, the proceeds of sale should
be divided among the shareholders. Undoubtedly, this provision
attempted to authorize a reduction of the actual capital. Never-
theless, the court held that the provision was valid, and that any
shareholder might compel a distribution of the proceeds of sales,
even against the opposition of other shareholders.* The court
emphasized the fact that the rights of creditors were not involved
in the proceeding. Nevertheless, it is submitted that a contrary
decision would have been more consistent with the legal theory
of the nature of a corporation,^ and that the proper course to
' See infra, § 1314. * Baldwin v. MUler & Lux (Cal.),
" See Dane v. Young, 61 Me. 160, 92 Pao. 1030.
169-170 (headnote inadequate). * See supra, § 53 and § 122.
' Holmes v. Newcastte-upon^Tyne
Abattoir Co., 45 L. J. Ch., n. s., 383.
VOL. I.— 33 513
§ 625 INCREASE AND SEDUCTION OF CAPITAL [ChAP. XI
pursue in any such case would be to exercise the statutory power,
if any such be conferred upon the company, of reducing the
capital.
§ 625-§ 642. REDUCTION WITHOUT STATUTORY AUTHOR-
ITY—EVASION OF PROHIBITION OF REDUCTION.
§ 625. Payment of Dividends out of Capital. — A not uncom-
mon and exceedingly pernicious method of violating the rule
against reducing or returning capital is by paying so-called divi-
dends out of the company's capital, when no profits properly
available for dividends have been earned. This practice amounts
to a thinly disguised return of capital to the shareholders,' and
is carried out by false balance sheets and other fraudulent de-
vices. The rules for determining whether or not moneys
available for dividends are in the company's hands are treated
in connection with the subject of dividends in general.^ So,
too, the liability of directors who declare and pay a dividend
out of the company's capital will be stated below.^
§ 626-§ 633. PURCHASE by company of its own shares.
§ 626-§ 630. Whether Purchase is lawful.
§ 626. On Principle. — A more subtle method of evading
the rule against unauthorized reductions of capital lies in the
purchase by a corporation of some of its own shares. Most
unquestionably, any such purchase reduces by the amount of the
purchase price the fund available for the payment of the com-
pany's debts. As such, it brings about a diminution of the com-
pany's actual or working capital. It also reduces the nominal
capital outstanding. While the purchased shares may doubtless
be reissued if the purchase is valid, nevertheless such reissue
may never be feasible; for the company may never be able to
find a subscriber for the shares. Hence, the purchase. by a corpo-
ration of its own shares amounts to a reduction of both the
' American Steel, etc. Co. v. Eddy, holders responeible for the claims of
89N. W. 952; 130 Mich. 266 (where creditors injured by a withdrawal
shareholders who received illegal of capital),
dividends were held liable to credit- = Infra, § 1313-§ 1344.
ors under a statute making share- ' Infra, § 1362.
514
§ 574-§ 677] UNAUTHORIZED REDUCTION § 626
actual and the nominal capital of the company, and as such it
should be held both vtira vires and illegal unless clearly sanc-
tioned by statute. It is no answer to say that if the company is
thoroughly solvent, so that its assets after the purchase are still
amply sufficient for payment of all claims against it, the creditors
are not prejudiced. For, while the assets may still remain suf-
ficient, yet they are, after the consummation of the purchase,
undeniably less by the amount of the purchase money than they
were before; and hence the fund which the creditors had an
absolute right to have preserved intact for the payment of their
claims has been diminished without their consent. This is
obviously true where the shares are purchased with capital
moneys of the company ; and the real fact is but thinly disguised
where they are bought with accumulated profits. For the com-
pany after buying the shares might treat them as extinguished
and distribute any excess of its assets over its outstanding nomi-
nal capital among its shareholders in the shape of dividends.
Moreover, even if it were conceded that under some circum-
stances the purchase might not injure creditors, yet it most
seriously disturbs the rights of shareholders. To enable the
corporation to purchase, hold, and vote its own shares would so
obviously enable the majority to strengthen their grip upon the
company with money belonging in part to the minority, that no
one would contend that the corporation should have the right
to vote in respect of the purchased shares.' Even if the purchased
shares be treated as extinguished, the change in the relative
position of the majority and minority shareholders, although less
in degree, is the same in kind. For example, suppose, as may
well be the case, the directors of a corporation own between them
forty-nine per cent of the company's capital — say, forty-nine
out of a total one hundred shares. If, now, they can with the
company's money purchase for the corporation three more shares,
their forty-nine shares, formerly a minority of the total capital,
are converted into a majority. Prior to the purchase, the directors
might have been ousted from control of the company by a
combination of all the other shareholders; after the purchase,
any such combination would be futile. Can it be that those in
control of a corporation can be allowed thus to intrench them-
' See infra, § 1233.
515
§ 627 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
selves in power with money of the company — money belonging
in part to the minority shareholders ? ' Even where the purchase
of shares by the corporation does not have the effect of convert-
ing those temporarily in control from a minority into a majority,
yet it does necessarily always result in increasing the relative
strength of the large holders. For all these reasons, it is sub-
mitted that no corporation should be held to have implied power
to purchase its own shares.
§ 627. English Authorities. — The English law is now settled
in accordance with the principles set out in the last paragraph.
Soon after the passage of the Companies Act of 1862, it was held
that a company could not purchase its own shares unless power
so to do was reserved in the memorandum or articles of associa-
tion.^ Afterwards, the lower courts fell into the error of holding
that where such a power was contained in the articles of associa-
tion, the purchase might lawfully be made;" but the House of
Lords in Trevor v. Whitworth * corrected this error and over-
ruled these cases. The broad principle laid down was that the
purchase by a company of its own shares is impliedly forbidden
by the Companies Act, so that even if the memorandum of as-
sociation or incorporation paper contained a clause purporting
to authorize the company to purchase its own shares, the clause
would be void.^
§ 628. American Authorities. — In America, many courts up-
hold the same sound and wholesome doctrine as the English
cases.' But it must be conceded that a somewhat larger number
of the American courts have taken the view that a corporation
' " Can it be contended that when ' Trevor v. Whitworth, 12 A. C.
the policy of directors is assailed they 409, 436-437 (semble, per Lord
may spend the capital of the com- Macnaghten).
pany in keeping themselves in power, ° Maryland Trust Co. v. National
or in purchasing the retirement of Mechanics Bank, 102 Md. 608; 63
inquisitive and troublesome critics 7" Atl. 70 (a very forcible opinion);
Per Lord Macnaghten, in Trevor v. Cartwright v. Dickenson, 88 Tenn.
Whitworth, 12 A. C. 409, 435. 476; 12 S. W. 1030; 17 Am. St. Rep.
^ Hope y. Iriternational Financial 910; 7 L. R. A. 706; Crandall v.
Society, 4 Ch. D. 327. Lincoln, 52 Conn. 73 (but see p. 100) ;
' Dronfield Silkstone Coal Co., 17 52 Am. Rep. 560; Percy v. Mil-
Ch. D. 76; Taylor v. Pilsen Joel iaudon, 3 La. 568, 580-589 (headnote
Electric Light Co., 27 Ch. D. 268; inadequate); State v. Franklin Bank, i
Teasdale's Case, 9 Ch. 54. 10 Oh. St. 91, 97-98 (semble); Bed-
* Trevor v. Whitworth, 12 A. C. ford R. R. Co. v. Bowser, 48 Pa. St.
409 29; Bank of San Luis Obispo v.
516
§ 574- § 677] UNAUTHORIZED REDUCTION
628
may without express statutory authority purchase its own shares,
provided the purchase is entered into bona fide and does not
endanger the claims of creditors.' It should be observed that
the American cases which agree with the English doctrine are
often well-considered and fully reasoned, whereas those which
uphold the contrary view generally lack any extended examina-
tion of the subject ; and furthermore the English rule is supported
by the weight of Mr. Morawetz's opinion.^ Even where a
Wickersham, 99 Cal. 655, 661; 34
Pac. 444; State v. Oberlin Bldg., etc.
Ass'n, 35 Oh. St. 258, 263 (headnote
inadequate) ; German Savings Bank
V. WulfekuMer, 19 Kan. 60; Abeles
V. Cochran, 22 Kan. 405, 411; 31
Am. Rep. 194; Coppin v. Greenlees,
etc. Co., 38 Oh. St. 275; 43 Am. Rep.
425; St. Louis Mfg. Co. v. HUbert,
24 Mo. App. 338; Barton v. Port
Jackson, etc. Plant Road Co., 17
Barb. (N. Y.) 397; St. Louis Raw-
hide Co. V. Hill, 72 Mo. App. 142
(semble); Tait v. Pigott, 38 Wash.
59; 80 Pac. 172; Burrows v. Ni-
black, 84 Fed. Ill, 113-114 (semble);
28 C. C. A. 130; Walters v. Porter
(Ga.), 59 S. E. 452.
Cf. Currier v. Lebanon Slate Co.,
56 N. H. 262 ; Coleman v. Columbia
Oil Co., 51 Pa. St. 74; United Society
V. Eagle Bank, 7 Conn. 456; Clark
v. Clark Co. (Mich.), 115 N. W. 416.
' Shoemaker v. Washburn Lumber
Co., 97 Wise. 585; 73 N. W. 333;
Cooper V. Frederick, 9 Ala. 738;
Hartridge v. Rockwell, R. M. Charlt.
(Ga.) 260 (semble); Western Imp.
Co. V. Des Moines Nat. Bank, 103
Iowa 455, 462; 72N. W. 657; Glenn
V. Hatchett, 91 Ala. 316; 8 So. 656;
Republic Life Ins. Co. v. Svrigert, 135
III. 150; 25 N. E. 680; 12 L. R. A.
328; Howe Grain & Mercantile Co.
V. Jones, 21 Tex. Civ. App. 198; 51
S. W. 24; Iowa Lumber Co. v. Foster,
49 Iowa 25; 31 Am. Rep. 140; Rol-
lins V. Shaver Wagon Co., 80 Iowa
380; 45 N. W. 1037; 20 Am. St.
Rep. 427; Dock v. Schlichter, etc. Co.,
167 Pa. St. 370; 31 Atl. 656; Bla-
lock V. Kernsville Mfg. Co., 110 N.
Car. 99; 14 S. E. 501; Dupee v.
Boston Water Power Co., 114 Mass.
37; New England Trust Co. v. Ab-
bott, 162 Mass. 148; 38 N. E. 432;
27 L. R. A. 271 ; Farmers', etc. Bank
v. Champlain, 18 Vt. 131, 138-139
(holding that the purchase makes
the vendor a competent witness at
common law in a suit to which the
company is party); Chicago, etc.
R. R. Co. V. Marseilles, 84 111. 145;
Taylor v. Miami Exporting Co., 6
Ohio 176; First Nat. Bank v. Salem
Capital, etc. Co., 39 Fed. 89; Leonard
V. Draper, 187 Mass. 536; 73 N. E.
644 ; Burnes v. Burnes, 137 Fed. 781 ;
70 C. C. A. 357; Porter v. Plymouth
Gold Mining Co., 29 Mont. 347; 74
Pac. 938; 101 Am. St. Rep. 569
(where a statute expressly prohib-
ited the company from reducing
its capital stock) ; Fremont Carriage
Mfg. Co. V. Thomsen, 91 N. W. 376;
65 Nebr. 370; Marvin v. Anderson,
111 Wise. 387, 391; 87 N. W. 226;
Vrooman v. Vansant Lumber Co., 64
Atl. 394; 215 Pa. St. 75; United
States Mineral Co. v. Camden (Va.),
56 S. E. 561.
Cf. City Bank v. Bruce, 17 N. Y.
507, 511 (headnote misleading);
Jones V. Morrison, 31 Minn. 140;
16 N. W. 854 ; Barto v. Nix, 15 Wash.
563, 568; 46 Pac. 1033; Yeaton v.
Eagle OH, etc. Co., 4 Wash. 183; 29
Pac. 1051 (as to presumption in
respect to foreign law).
" 1 Morawetz on Priv. Corps., 2d
ed., § 112-§ 113. Judge Thompson
seems to have been of the same
opinion: 2 Thompson's Comm. oa
Corps., § 2054.
517
§ 628 INCREASE AND REDUCTION OP CAPITAL [ChAP. XI
statute expressly forbade the company to " divide, withdraw, or
in any way pay to the stockholders or any of them any part of the
capital ... or reduce its capital stock except as authorized Hy
law," with a proviso allowing the company to accept its own
shares in settlement of a bad or doubtful debt, a federal judge
held that the company, if at the time not insolvent, might with
the assent of all its shareholders purchase a majority of its own
shares.' In some states, notably in New Jersey, the statutes
expressly authorize corporations to purchase shares of their own
capital stock ; ^ but even these statutes apply only where the
purchase is for a "legitimate corporate purpose" and do not
justify the surrender of stock to the company as "treasury stock"
in pursuance of an illegal scheme for the issue of shares in ex-
change for property of less value than the nominal value of the
shares.^ If the purchase is directly injurious to the company's
creditors, — for example, if the company is insolvent, — all the
courts agree that it may be set aside,* even though the shareholder
made the contract of sale in good faith without knowledge of the
facts concerning the company's financial condition which ren-
dered the sale prejudicial to creditors of the company.^ Some
' Casae Braid Co., 145 Fed. 224. HaU v. Henderson, 126 Ala. 449; 28
^ Chapman v. Iron Clad Rheostat So. 531; 85 Am. St. Rep. 53; 61
Co., 62 N. J. Law 497; 41 Atl. L. R. A. 621; Farnesworth v. Rob-
690. Uns, 36 Minn. 369; 31 N. W. 349;
Cf. Hamor v. Taylor-Rice Engi- S. P. Smith Lumber Co., 132 Fed.
neering Co., 84 Fed. 392, 399 (where 618 (proof on note given in payment
the court distinguished between a for stock disallowed in bankruptcy) ;
purchase with money representing State v. Bank of OgolaUa, 65 Nebr.
capital and a purchase with accumu- 20; 90 N. W. 961; 91 N. W. 497;
lated profits). Olmstead v. Van^:e, etc. Co., 196 111.
' Knickerbocker Importation Co. 236; 63N. E. 634; Hall v. Alabama,
V. State Board of Assessors (N. J.), 65 etc. Imp. Co., 39 So. 285; 143 Ala.
Atl. 913. 464; Alabama, etc. Imp. Co. v. Hall
* Clapp V. Peterson, 104 111. 26; (Ala.), 44 So. 592 (holding the trans-
Heggie v. People's Bldg. & Loan action bad as against subsequent
Ass'n, 107 N. Car. 581, 595-596; 12 creditors without notice).
S. E. 275 ; Adams, etc. Co. v. Deyette, Cf . Payne v. BvUard, 23 Miss.
5 S. Dak. 418, 424-426; 59 N. W. 88; 55 Am. Dec. 74; United Society
214; 49 Am. St. Rep. 887; Colum- v. Eagle Bank, 7 Conn. 456; Tait v.
Man Bank's Estate, 147 Pa. St. 422; Pigott, 32 Wash. 344; 73 Pac. 364;
23 Atl. 625, 626, 628 ; Carter v. Van Brocklin v. Queen City Printing
Union Printing Co., 54 Ark. 576 Co., 53 Pac. 822; 19 Wash. 552
(headnote misleading) ; 16 S. W. (where claim of vendor for purchase
579; Hamar v. Taylor-Rice Engi- money was postponed to claims of
neering Co., 84 Fed. 392; Currier v. other creditors of the company).
Lebanon Slate Co., 56 N. H. 262; " Commercial Nat. Bank v. Burch,
518
§ 574:-§ 677] UNAUTHORIZED REDUCTION § 631
authorities, while conceding that the purchase is not vltra vires,
maintain that any shareholder may object and enjoin the
purchase.'
§ 629. Purchase on Credit or with Borrowed Money — Issue o£
Bonds in Exchange. — Where a corporation has power to pur-
chase its own shares, it may buy them on credit '' or may borrow
money on mortgage or otherwise — for example, may issue
mortgage bonds — to pay for them.^ An issue of bonds in ex-
change for shares is in effect a purchase of shares with borrowed
money, and by parity of reasoning must be sustained.^
§ 630. Purchase by Person Secretly Acting as Agent for Com-
pany. — Even where a purchase of shares by or on behalf of the
corporation is forbidden by law, a transfer of shares cannot be
annulled because, unknown to the transferor at the time of the
contract of sale, the transferee was acting as trustee for the
company;^
§ 631-§ 632. Effect of Purchase where a Purchase is deemed
Illegal.
§ 631. In general. — ^- Where it is held illegal for a corpora-
tion to purchase its own shares, such a purchase even if fully
consummated by transfer of the shares and payment of the pur-
chase price may be repudiated and treated as void.' Hence,
the purchase money or consideration may be recovered back by
the company or its receiver.' If the purchase money was paid
141 111. 519; 31 N. E. 420; 33 Am. * See cases cited supra, n. 3.
St. Rep. 331. « Johnston v. Laflin, 103 U. S.
^' Lowe V. Pioneer Threshing Co., 800; Crandall v. Lineoln, 52 Conn.
70 Fed. 646. 73, 104-105 (but cf. pp. 103-104,
' Blalock V. Kernsville Mfg. Co., the case of Eldridge), 105-108 (the
110 N. Car. 99; 14 S. E. 501. Cf. case of iCeigwin & Reynolds); 52
Castle Braid Co., lib Fed. 224 (where Am. Rep. 560; Corn v. Skillern
the vendor was allowed to prove (Ark.), 87 S. W. 142.
against the company's estate in " But see Joseph v. Rajf, 82 N. Y.
bankruptcy for the amount of the App. Div. 47; 81 N. Y. Supp. 546,
purchase price). affirmed short, 176 N. Y. 611; 68
' Berger v. V. S. Steel Corp., 63 N. E. 1118 (where the company was
N. J. Eq. 809 ; S3 Atl. 68 ; First Nat. said to be estopped from questioning
Bank v. Salem Capital, etc. Co., 39 the transaction, because the stotMs in
Fed. 89 ; Hoskins v. Seaside Ice, etc. quo could not be restored).
Co. (N. J.), 59 Atl. 645. ' Crandall v. Lincoln, 52 Conn.
But cf . Coquard v. St. Louis Cot- 73 ; 52 Am. Rep. 560 ; Percy v. Mil-
ton, etc. Co., 7 S. W. Rep. 176 (Mo.), laudon, 3 La. 568, 580-589 (headnote
519
§ 631 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
to an executor, it may be recovered back from the administrator
de bonis non} The fact that the vendor did not know who the
purchaser was in no respect affects his Hability to return the
purchase money.^ If, however, a shareholder sells to another
individual who unknown to him is acting as agent or trustee for
the company, the agent or trustee is liable to refund the amount
of the purchase money to the corporation, but the innocent
vendor is not.^ In all these cases, where a recovery of the pur-
chase money is sought, the remedy is, at least according to a
Connecticut decision, in equity as well as at law.* A fortiori, if
the consideration remains unpaid, it cannot be recovered from
the company.^ If the shares sold to the company were not fully
paid, the vendor remains liable upon them as if no sale had been
made," and moreover will be subject to any statutory liability in
inadequate); St. Louis Mfg. Co. v.
Hubert, 24 Mo. App. 338; Burrows
V. Nihlack, 84 Fed. HI; 28 C. C. A.
130 (holding that the action may be
maintained without tendering back
the stock).
Cf. Bank of San Luis Obispo v.
Wickersham, 99 Cal. 655; 34,Pac.
444; Sanderson v. Mtna Iron, etc.
Co., 34 Oh. St. 442; HaR v. Hender-
son,. 12Q Ala. 449; 28 So. 531; 85
Am. St. Rep. 53; 61 L. R. A. 621;
Tait V. Pigott, 32 Wash. 344; StaU
V. Bank of Ogolalla, 65 Nebr. 20; 90
N. W. 961; 91 N. W. 497.
' CrandaU v. Lincoln, 52 Conn.
73, 102-103; 52 Am. Rep. 560 (the
case of Tracy's Estate).
Cf. TaU V. Pigott, 38 Wash. 59;
80 Pac. 172.
^ CrandoU v. Lincoln, 52 Conn. 73,
103-104; 52 Am. Rep. 560. Ci. Tait
V. Pigott, 38 Wash. 59; 80 Pac. 172.
^ CrandoU v. Ldncoln, 52 Conn.
73, 104-105 (but cf. pp. 103-104, the
case of Eldridge), 105-108 (the case
of Keigwin & Reynolds); 52 Am.
Rep. 560.
See also supra, § 630.
Cf. Hall V. Henderson, 126 Ala.
449; 28 So. 531; 85 Am. St. Rep.
53;. 61 L. R. A. 621; FaUs City Tin,-
ware Co.'s Trustee v. Levine (Ky.),
104 S. W. 716.
* CrandoU v. Lincoln, 52 Conn.
73, 108-110; 52 Am. Rep. 560.
' Hamor v. Taylor-Rice Engir-
neering Co., 84 Fed. 392; State v.
Bank of OgolaUa, 65 Nebr. 20; 90
N. W. 961; 91N. W. 497.
But see Chapman v. Iron Clad
Rheostat-Co., 62 N. J. Law 497, 499;
41 Atl. 690 (where the court, after
deciding that the purchase was au-
thorized by statute, declared that if
it had not been authorized, the share-
holder having fully performed on his
part would have been entitled to
enforce the idtra vires contract
against the company).
" Carter v. Union Printing Co.,
54 Ark. 576 (headnote misleading);
16 S. W. 579; Mann v. Pentz, 2
Sandf. Ch. (N. Y.) 257; Vale of
Neath & South Wales Brewery Co.,
3 De G. & Sm. 96 (where the pur-
chase was made by an agent known
to be acting on the company's be-
half and where the transfer remained
unquestioned for years).
Cf. Colonial Investment & Agency
Co., 19 Vict. L. R. 381 (where the
argument was advanced in vain that
the company itself had paid the
amount due on the shares so that
they should be deemed fully paid).
520
§ 574-§ 677] UNAUTHORIZED REDUCTION § 632
favor of creditors — even subsequent creditors.' If the vendor,
being ignorant that the company is the real purchaser, execute
a transfer in blank, and if the transfer is not registered, he remains
liable, as shareholder.^ The transferor, even after the lapse of
years, may compel the company to recognize him as shareholder
and restore his name to the register in respect of the surrendered
shares.^ A shareholder who made no objection to the purchase
of shares by the company and who afterwards sells some of his
shares to a third person cannot be heard to allege that the pur-
chase by the company was ultra vires and that therefore the
shares purchased enured to the benefit of the then shareholders
in proportion to their holdings, instead of becoming corporate
property distributable as dividends among those who are share-
holders when the dividend is declared ; for if the purchase was
void the title never passed from the company's vendor and the
complaining shareholder is out of court.*
§ 632. Purchase by Company followed by Reissue to another
Person. — If shares are purchased by the corporation and
subsequently reissued to another person, the two transactions
when consummated may sometimes be deemed equivalent to
a transfer from the vendor to the second allottee and therefore
effective; and this is true even though the purchase by the
company was illegal.^ So, where a corporation in defiance of
law lends money on the security of shares in its own capital and
upon default in payment of the debt sells the shares, the pledgor
' Chrisman^Sawyer Banking Co. issuing but that intention was not
V. Independence Wool Mfg. Co., 68 carried out) ; Weidenfeld v. Northern
S. W. 1026; 168 Mo. 634; Walters Pac. Ry. Co., 129 Fed. 305; 63
V. Porter (Ga.), 59 S. E. 452. C. C. A. 537; Lantry v. WaUace, 182
' Weedon's Case, 22 Vict. L. R. U. S. 536, 551-556; 21 Sup. Ct. 878;
235 (distinguishing Nicol's Case, 3 First Nat. Bank v. Peoria Watch Co.,
De G. & J. 387, where the transfer 191 111. 128; 60 N. E. 859 (where the
was nominally to a definite person purchase by the company was held
and not in blank). legal).
' Bdlerby v. Rowland, etc. S. S. As to whether the shares in the
Co. (1902), 2 Ch. 14. hands of the second allottee shall
* Coleman v. Columbia Oil Co., be deemed fully paid or not, see
51 Pa. St. 74. Belknap v. Adams, 49 La. Ann. 1350;
= See supra, § 868. 22 So. 382; WaUace v. Hood, 89 Fed.
Cf. Joseph V. Raif, 82 N. Y. App. 11. Of. Ailing v. Wemel, 133 111. 264,
Div. 47; 81 N.Y.Supp. 546, affirmed 275-276; 24 N. E. 551; First Nat.
short in 176 N. Y. 611; 68 N. E. Bank v. Peoria Watch Co., 191 111,
1118 (where the purchase was made 128; 60 N. E. 859.
with the intent of immediately re-
521
§ 633 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
cannot recover the purchase money from the company.' The
illegal character of a company's purchase of its own shares does
not make the purchased shares public property or justify any
officer of the corporation in appropriating them to his own use.^
Thus, where shares are purchased with funds of the company
itself, a director without authority from the corporation has no
right to issue them to himself; and if he do so, the company
may enjoin him from transferring or voting in respect of them.'
§ 633. EfEect of Purchase where a Purchase is deemed lawful.
— The effect of a lawful purchase or other acquisition by a
corporation of its own shares is that the shares so purchased or
acquired are suspended or temporarily merged or extinguished.*
Certainly, the other shareholders do not become individually
liable -pro rata for the amount, if any, remaining unpaid upon
the purchased shares.' The purchased shares may, however,
be reissued in the sarne manner as shares of the originally
authorized capital which have never been subscribed for or
issued." The terms of the contract of reissue may be such that
' National Bank of Xenia v. ing that shares surrendered to or
Stewart, 107 U. S. 676; 2 Sup. Ct. purchased by the corporation are to
778. be treated as outstanding for the pur-
' Cf . Walden Nat. Bank v. Birch, pose of ascertaining the amount of
14 L. R. A. 211; 130 N. Y. 221; 29 the capital by which the company's
N. E. 127 (holding that sureties of franciuse tax is gauged, until retired
national bank cashier in whose name and cancelled under formal proceed-
shares of the bank's stock are regis- ings for the reduction of capital) ;
tered as security for a loan made by Pdbst v. Goodrich (Wise), 113 N. W.
the bank to the real owner, notwith- 398 (holding that for the purpose of
standing the Act of Congress which calculating the number of shares
prohibits national banks from lend- necessary to satisfy a bequest of
ing money on the security of their such number of shares as represent
own stock, are liable for the conver- a book value of $1,000,000, shares
sion of the stock to his own use by which have been lawfully purchased
the cashier). by the company should be treated
' Dacovich v. Canizas (Ala.), 44 as still outstanding).
So. 473. As to voting rights of such shares
* Williams v. Savage Mfg. Co., 3 see infra, § 1233.
Md. Ch. 418, 451-153 (semble). « Crawford v. Roney (Ga.), 55
Cf. Western Imp. Co. v. Des S. E. 499.
Moines Nat. Bank, 103 Iowa 455, ° Williams v. Savage Mfg. Co., 3
462-463; 72 N. W. 657; Knicker- Md. Ch. 418, 451^53; State Bank of
backer Importation Co. v. State Board. Ohio v. Fox, 3 Blatchf. 431; Hart-
of Assessors (N. J.), 65 Atl. 913 (hold- ridge v. Bockwdl, R. M. Charlt. (Ga.)
522
§ 574-§ 677] UNAUTHORIZED REDUCTION § 635
the purchasers will be entitled to dividends on the shares in
question even before the reissue is fully consummated.' Never-
theless, the purchased shares are not deemed property of the
corporation, and hence do not pass by a sale of all its property,
rights, and franchises except the franchise to be a corporation
and to carry on business.^
§ 634^§ 641. ACQUISITION BY COMPANY OF ITS OWN SHARES
OTHERWISE THAN BY PURCHASE.
§ 634. Whether Permissible — In general. — While, according
to what has been submitted to be the better view, a corpora-
tion has no implied power to purchase its own shares, yet not
every acquisition by a corporation of shares in its own capital is
obnoxious to the same objection. For instance, forfeiture of
shares for non-payment of calls or other breaches of duty on
the part of the holders is permissible.' Moreover, in certain
cases a corporation may accept a surrender of shares. In what
cases this may be done consistently with sound principle shall
be our next inquiry.
§ 635-§ 637. Surrender of Shares.
§ 635. In general. — A "surrender" of shares founded
upon any valuable consideration moving from the company to
the surrenderer is really a purchase, and is liable to the same
objections as a purchase for a money consideration.^ Conse-
quently, a so-called gratuitous surrender of shares which are not
fully paid up is really a surrender in consideration of a release
from the liability attaching to the shares, and therefore likewise
260 ; Commonwealth v. Boston & Al- '■ Hartley v. Pioneer Iron Works,
bany R. R. Co., 142 Mass. 146; 7 181 N. Y. 73; 73 N. E. 576.
N. E. 716; Bank of San Luis Obispo ' Tulare Irrigation Dist. v. Ka-
V. Wickersham, 99 Cal. 655; 34 Pac. weak Canal, etc. Co., 44 Pao. Rep.
444 (where the purchase of the shares 662 (Cal.).
was ultra vires) ; State ex rel. Page ' See infra, § 808.
V. Smith, 48 Vt. 266; City Bank v. ■• Trevor v. WhitwoHh, 12 A. C.
Bruce, 17 N. Y. 507; Hartley v. 409, 418, 438 (semble).
Pioneer Iron Works, 181 N. Y. 73; Cf. ColvUle's Case, 48 L. J. Ch.
73 N. E. 576; Draper v. Blackwdl, 633; Wallscourt's Case, 7 Manson
35 So. 110; 138 Ala. 182. 235; Addison's Case,-5 Ch. 294.
523
§ 636 INCREASE AND BEDUCTION OF CAPITAL [ChAP. XI
falls within the ban of the law.* A gratuitous surrender of
paid-up shares is certainly less objectionable, and might be
held legitimate.^ So, a bequest to a corporation of its own stock
has been held valid.' It has been held that a surrender of paid-up
ordinary shares in exchange for an equivalent amount of pre-
ferred shares is valid ; * but this decision has been disapproved,
perhaps on insufficient grounds, by the very judge by whom it
was rendered.^ A surrender of shares, whether paid up or not,
coupled with a reissue of the same to other persons may be
supported as equivalent to a transfer from the surrenderer to the
person to whom they are reissued.'
§ 636. Surrender of Shares which are liable to Forfeiture. —
There is no legal obstacle to the acceptance of a surrender of
shares which are liable to forfeiture for non-payment of calls,^
provided the arrangement is not a mere device to enable the
shareholders to retire : " if bona fide, it merely relieves the com-
pany from going through the formalities attendant upon a
a forfeiture of shares in invitum.^
§ 637. Surrender of Shares in Compromise of Controversy as to
Validity of their Issue. — A corporation may accept a sur-
render of certain shares, or release part of a subscription, in
• Bellerby v. Rowland, etc. S. S. Wash. 381; BeUerby v. Rowland,
Co. (1902), 2 Ch. 14. etc. S. S. Co. (1902), 2 Ch. 14 (where
Cf. Walker v. Hacking, 57 L. T. Cozens-Hardy, L. J., expressed the
763 ; Ex parte Jones, 27 L. J. Ch. opinion, obiter, that a gratuitous sur-
666; Cooper V. Frederick, 9 Ala. 738 render of fully paid shares would be
(where the transaction was held idtra vires).
valid) ; Bedford R. R. Co. v. Bowser, ' Rivanna Nav. Co. v. Dawsons,
48 Pa. St. 29 ; Glenn v. Hatchett, 91 3 Gratt. (Va.) 19.
Ala. 316; 8 So. 656; Ailing v. * Eichbaum v. City of Chicago
Wenzd, 133 111. 264; 24 N. E. 551; Orain Elevators (1891), 3 Ch. 459.
Pacific Fruit Co. v. Coon, 107 Cal. ' Bellerby v. Rowland, etc. S. S.
447; 40 Pae. 542; Payne v. BiUlard, Co. (1902), 2 Ch. 14, 29.
23 Miss. 88 ; 55 Am. Dec. 74 ; Fames- ' See supra, § 632 and infra,
worth V. Robbins, 36 Minn. 369; 31 § 868.
N. W. 349; Chrisman-Sawi/er Bank- ' Trevor v. Whitworth, 12 A. C.
ing Co. v. Independence Wool Mfg. 409, 438 (semble).
Co., 68 S. W. 1026; 168 Mo. 634 Cf. HaZZ's Cose, 5 Ch. 707.
(as to "treasury stock"); Beacons- ' Beaconsfleld Heights Estate Co.,
field Heights Estate Co., 22Vict.L.R. 22 Vict. L. R. 97 (which seems to
97. overrule silently an earlier case in
' Cf. Wheeler v. Mineral Farm, the same state, Melbourne Locomo-
etc. Co., 31 Colo. 110; 71 Pac. 1101; live & Engineering Works, 21 Vict.
Krisch v. Interstate Fisheries Co., 81 L. R. 442).
Pac. 855 (headnote inadequate) ; 39 ° Infra, § 826.
524
§ 574- § 677] UNAUTHORIZED REDUCTION § 638
compromise or settlement of a bona fide dispute whether the
shares were vaUdly issued so as to bind the subscriber ; and that
too even though in point of fact the issue was legal and regular.'
A fortiori, the surrender is good where the issue was capable,
legally, of being upset ^ but where the surrenderer claimed to be
relieved upon some ground other than that which would have
entitled him to repudiate the shares.' If the issue was in law
vahd, such a surrender while effective for the future does not
relate back so as to cancel the shares ab initio; and hence the
compromise or settlement of a bona fide dispute whether the
surrenderer remains subject to any liabilities attaching to past
members of the company.* The surrender is effective although
the ground on which the surrenderer repudiated the shares was
that his subscription had been induced by fraud or misrepre-
sentation and although the surrender is not accompanied or
followed by the removal of his name from the register of mem-
bers.^ In order that a surrender by way of compromise may be
valid, there must be a real, bona fide dispute as to whether the
shares were properly issued.' Moreover, the surrender must be
actually intended as a compromise.'
§ 638. Acceptance of Shares in Satisfaction of, or as Security for,
a Debt due the Company. — It has been frequently declared that
a corporation may accept from one of its shareholders a surrender
of his shares in satisfaction of a debt that could be collected in
no other way.^ Indeed, there seems to be no reported case
' Bath's Case, 8 Ch. D. 334; New (subscription to shares induced by
Albany v. Burke, 11 Wall. 96. innocent misrepresentation).
Cf. Morgan v. Leviis, 46 Oh. St. 1 ' Wright's Case, 7 Ch. 55.
<headnote inadequate) ; 17 N. E. * Bath's Case, 8 Ch. D. 334.
558; Odpcke v. Blake, 19 Iowa 263, ' Fox's Case, 5 Eq. 118.
267-269; Northrop v. Bushnell, 38 » Esparto Trading Co., 12 Ch. D.
€onn. 498, 511-512; Whitaker v. 191. Cf. Ex parte Jones, 271,. J. Ch.
Orummond, 68 Mich. 249; 36 N. W. 666; Gill v. Baiis, 72 Mo. 424.
62; Berks & Dauphin Turnpike ' Adam' s Case, 13 'Eq. 47 HQucere:
Road V. Myers, 6 Serg. & R. (Pa.) in this case might not an opposite con-
12; 9Am. Deo. 402; Statev.Oberlin elusion well have been reached?).
Bldg., etc. Ass'n, 35 Oh. St. 258; ' Crandall v. Lincoln, 52 Conn.
Philadelphia, etc. R. R. Co. v. Hick- 73, 100; 52 Am. Rep. 560 (semble);
Tnan, 28 Pa. St. 318, 328. State v. Franklin Bank, 10 Oh. St.
' Finance & Issue v. Canadian 91, 97 (semble); Morgan v. Lewis,
Produce Corp. (1905), 1 Ch. 37, 45 46 Oh. St. 1, 6 (headnote inade-
625
§ 639 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
which directly supports the contrary of this proposition. More-
over, a corporation may generally accept its own shares as
collateral security for an advance to a shareholder.'
§ 639. Acquisition of Shares by satisfying Judgment for Con-
verting them. — A judgment in trover against the corporation
for a conversion of any of its shares, at any rate if followed
by satisfaction, has the effect of vesting the title to the converted
shares in the company; but that circumstance does not justify
the courts in refusing justice to the owner of the converted
shares.^ A compulsory purchase is effected. If, however, the
owner of the converted shares instead of instituting promptly
an action for the conversion lies by until the company has be-
come insolvent, he will not be permitted to escape liability as a
shareholder on the ground that his ownership had ceased in
consequence of the conversion.^
§ 640. Acquisition of Shares in Pursuance of Terms of Original
Issue — Redeemable and Convertible Shares. — The acquisition
of shares by a corporation in pursuance of terms of their original
issue would certainly seem to be no less objectionable than if the
shares had been originally issued absolutely.* Indeed, such ac-
quisition would be in effect the performance of a condition sub-
sequent attached to a subscription to shares — a subject which
is elsewhere considered.^ Nevertheless, some courts have held
quate); 17 N. E. 558; German Sav- some other incorporation laws. See
ings Bank v. Wulfekuhler , 19 Kan. Bank v. Lanier, 11 Wall. 369, and
60; Barto v. Nix, 15 Wash. 563, 568- infra, § 706 n.
569; 46 Pac. 1033; St. Louis Raw- ' Ralston v. Bank of California,
hide Co. v. HiU, 72 Mo. App. 142. 112 Cal. 208; 44 Pac. 476.
Cf . Sheffield Nickel Co. v. Vnwin, ' Potts v. Wallace, 146 U. S. 689 ;
2 Q. B. D. 214; Phosphate of Lime 13 Sup. Ct. 196.
Co. V. Green, L. R. 7 C. P. 43; Wil- * Olmstead v. Vance, etc. Co., 196
liams V. Savage Mfg. Co., 3 Md. Ch. 111. 236; 63 N. E. 634.
418, 451-i52; City Bank v. Bruce, Cf. Davis v. Proprietcrrs of Meet-
17N. Y. 507; State Bank of Ohio v. ing-House, 8 Mete. (Mass.) 321
Fox, 3 Blatchf. 431; Ex parte (arising in a state where a corpora-
Holmes, 5 Cow. (N. Y.) 426; Taylor tion is allowed to purchase its own-
V. Miami Exporting Co., 6 Ohio 176; shares).
Draper v. BlackweU, 35 So. 110; But see contra: Ophir Consol.
138 Ala. 182. Mines Co. v. Brynteson, 143 Fed.
' a. Williams V. Savage Mfg. Co., 829; 74 C. C. A. 625 (where the
3 Md. Ch. 418, 451-i52; Ex parte company was expressly prohibited
Holmes, 5 Cow. (N. Y.) 426. Such by statute from purchasing its own
transactions are expressly prohibited stock).
by the National Banking Act and = Supra, § 224-§ 226.
526
§ 574-§ 677] UNAUTHORIZED REDUCTION § 641
that even where the corporation is expressly prohibited by statute
from purchasing its own shares, a provision for redemption of
the shares embodied in the terms of the original issue is valid
and enforceable.' Indeed, the consensus of American authority
seems to be that unless the provision for redemption is kept
secret ^hares may be issued subject to a stipulation that they
may be bought back at the option of the holder ^ or of the cor-
poration.' In one aspect, a stipulation for redemption at the
option of the shareholder when contained in a contract of sub-
scription to shares is more objectionable than a contract by a
corporation to purchase shares which have been already issued;
for the provision for redemption may, if valid, be enforced
against the company even after the company has become insol-
vent and to the prejudice of its creditors, whereas a contract of
purchase of shares is valid only if the company is solvent at the
time of the purchase. This consideration has led the Supreme
Court of Michigan to hold that the provision for redemption can-
not be availed of after the corporation has become insolvent.*
But it would seem that this view is hardly logical, and that a
better view is that the stipulation is wholly void. Shares con-
vertible into bonds are an example of shares issued upon a con-
dition subsequent or coupled with an agreement on the part of
the company to buy them back under certain contingencies. It
would seem clear on principle that such convertible shares cannot
be issued without affirmative statutory authority.
§ 641. Acquisition by Company as Trustee for Third Person. —
Whether a corporation formed for the purpose of acting as
trustee may acquire and hold shares in itself as trustee for third
persons is a rather peculiar question. That it may do so has
been held in lowa,^ but as the courts of that state uphold the
power of a corporation to purchase its own shares, this case
cannot be deemed very persuasive authority in jurisdictions
'■ See supra, p. 526, n. 4. 65 Nebr. 370; United States Mineral
" Browne v. St. Paid Plow Works, Co. v. Camden (Va.), 56 S. E. 561.
62 Minn. 90; 64 N. W. 66; Vent v. ' Hackett v. Northern Pac. Ry.
Dvluth Coffee, etc. Co., 64 Minn. 307; Co., 36 N. Y. Misc. 583; 73 N. Y.
67 N. W. 70; Wisconsin Lumber Co. Supp. 1087.
v. Greene, 127 Iowa 350; 101 N. W. * Mclntyre v. E. Bement's Sons
742; 109 Am. St. Rep. 387; 69 (Mich.), 109 N. W. 45.
L. R. A. 968; Fremont Carriage Co. ' State ex rel. Higby v. Higby Co,
V. Thomsen (Nebr.), 91 N. W. 376; (Iowa), 106 N. W. 382.
527
§ 642 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
where that power is denied. Nevertheless it should be observed
that the acquisition of shares as a mere trustee is free from
many if not all of the objections urged above to the power of
a corporation to use its funds in purchasing its own shares.
§ 642. Release of Shareholder from Liability for unpaid Sub-
scriptions to Capital. — A release of a shareholder from liabihty
differs from a surrender of the shares in that the shares still
remain outstanding so that the holder continues to be entitled
to all the rights of a shareholder, and so that the nominal capital
is not affected.' If the release is made upon a valuable considera-
tion moving from the shareholder to the company, and if the
consideration is honestly deemed by the corporation equivalent
in value to a discharge of the shareholder's liabihty by payment,
the transaction operates in law as an effective discharge of the
liability, unless some statute requires payment in cash. If, how-
ever, the release is without sufficient consideration ^ or is a mere
device to relieve the shareholder from his legal burdens, the
transaction substantially amounts to an issue of the shares at
a discount, and is open to the same legal objections, the nature
and effect of which will be considered in another place,^ and
indeed, is in some respects even more objectionable, since it
may operate as a voluntary release or conveyance of a valuable
asset and hence may be fraudulent as against creditors under
the statute 13 Elizabeth.* If a bona fide dispute exists as
to whether a person is liable as shareholder, a compromise
whereby the shareholder pays a part of what is legally due and
is released from liabihty for the balance is effective.^
' A surrender of partly paid acknowledged to be due is on ac-
shares followed by a reissue of cepted principles of law no legal con-
paid-up shares to a nominal amount sideration. World's Fair Excursion
equal to that paid in on the sur- Co. v. Gasch, 162 111. 402; 44 N. E.
rendered shares is in effect a pur- 724; Northrop v. Bushnell, 38 Conn.
chase of shares. Cf. Vrooman v. 498.
Vansant Lumber Co. (Pa.), 64 Atl. ' Infra, § 776 et seq.
394; 215 Pa. St. 75 (where the Cf.. Osgood v. King, 42 Iowa
transaction was upheld). 478.
2 Sawyer v. Hoag, 17 Wall. 610, * Cf. Bouton v. Dement, 123 III.
620 (semble). 142; 14 N. E. 62.
Cf. Rider v. Morrison, 54 Md. 429. ' New Haven Trust Co. v. Nelson,
Payment of a less sum than is 73 Conn. 477; 47 Atl. 753; Whitaker
528
§ 574- § 677] REDUCTION UNDER ENABLING STATUTES § 644
§ 643-§ 674. REDUCTION UNDER STATUTORY
AUTHORITY.
§ 643. In general — Authority not readily implied. — By stat-
ute in England and very generally in the United States, the re-
duction of capital is, in some cases and under more or less
stringent safeguards,' expressly authorized. No such power,
however, will be ordinarily imphed. For instance, the power
cannot be implied from an express power to increase the capital
ad libitum,^ nor is it conferred by a general power to make
changes in the incorporation paper.^ Where a company which
is incorporated by special act has a certain authorized capital,
a subsequent amendatory act reducing the amount has been
construed as an enabling act merely, so as not to put a legal
impediment in the way of issuing the full amount of capital
previously authorized.*
§ 644. English and American Statutes compared. — The Com-
panies Act of 1862, although it authorized increase of capital
made no provision for reduction of capital. This omission was
supplied by the Companies Act of 1867, which provided that any
company limited by shares might if authorized so to do by its
regulations as originally framed or as altered by special resolu-
V. Orummond, 68 Mich. 249; 36 tion were held liable to make good
N. W. 62. amount abstracted from the com-
See also Bupra, § 637, and partic- pany's assets).
ularly cases cited, p. 525, n. 1. Cf. A shareholder may enjoin a re-
Fuches V. Hamilton, etc. Pub. Co., 10 duction of capital which is made for
Ont. 497 (where a so-called con- an illegal purpose even though all
promise was held to be beyond the the forms of law be complied with,
powers of the directors). Theis v. Durr, 125 Wise. 651; 104
' Cf. American Steel, etc. Co. v. N. W. 985; 110 Am. St. Rep. 880;
Eddy, 89 N. W. 952; 130 Mich. 266 1 L. R. A., n. s., 571.
(where the statute made the share- ^ Sutherland v. Olcott, 95 N. Y.
holders liable to creditors who might 93 ; Peck v. Elliott, 79 Fed. 10, 15-16
be injured by the reduction of (headnote inadequate); 24 C. C. A.
capital, to the extent of the sums 425; 38 L. R. A. 616; Seignouret v.
refunded to them respectively). Home Ins. Co., 24 Fed. 332.
As to cases where creditors are ^ Seignouret v. Home Ins. Co., 24
prejudiced by a reduction under the Fed. 332 (headnote inadequate),
forms of law, see State v. Bank of Cf. Smith v. Goldworthy, 4 Q. B.
Ogolalla, 65 Nebr. 20; 90 N. W. 430, 465-466.
961; 91 N. W. 497; Alexander v. * Agricultural Branch R. R. Co.
Relfe, 74 Mo. 495 (where share- v. Winchester, 13 Allen (Mass.) 29.
holders participating in the reduc-
VOL. I. — 34 529
§ 645 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
tion so far alter its memorandum of association " as to reduce its
capital." ' This general power having been limited by a narrow-
judicial construction/ the Companies Act of 1877 was promptly
passed, providing that the general power conferred by the Act
of 1867 should "include a power to cancel any lost capital, or
any capital unrepresented by available assets, or to pay off any
capital which may be in excess of the wants of the company."
This act is not to be construed as limiting the general power
conferred by the act of 1867 to these enumerated cases.^ Under
these statutes, where the proposed reduction involves a return
of paid-up capital, or a release from liability to calls, the credit-
ors must be paid or secured, or must assent ; and in all cases the
reduction must be confirmed by order of court. The court,
however, will not refuse its approval to a scheme of reduction
which is neither unjust nor oppressive,* so that the English cases
are applicable as authorities even in states where no such judicial
sanction is required.
The American statutes differ widely among themselves, and
from the British law. The general purposes, however, are every-
where the same; namely, to enable a company whose actual
capital is greater than its needs to distribute the surplus among
its members, and to enable a concern whose nominal capital for
any reason is not represented by available assets to write off the
excess of its nominal over its actual capital, precautions more or
less adequate always being prescribed to secure the rights of
creditors. The conceivable means by which these results may
be attained are various. For instance, paid-up capital may be
distributed pro rata among the shareholders and the nominal
value of their shares correspondingly reduced ; or if the capital
has not been wholly paid in, the members inay be released from
liability for uncalled capital. Or, again, the par value of the
shares may be reduced commensurately with a loss of capital
sustained by the corporation ; or some shares may be cancelled.
§ 645. Effect of Failure to comply with statutory Conditions. —
The statutory requirements in respect to a reduction of capital
should be strictly pursued, as any irregularity or failure to com-
' Companies Act, 1867, §9. (1895), 1 Ch. 691, 698; Hyderbad
' See infra, § 647. Co., 75 L. T. 23 (semble).
^ Poole V. National Bank of Cf. Poole v. National Bank of
China (1907), A. C. 229. China (1907), A. C. 229.
■* In re Floating Dock, etc. Co.
530
§ 574- § 677] REDUCTION UNDER ENABLING STATUTES § 647
ply with the statutory formalities may render the reduction void.*
Without doubt, where a company has power to reduce its capital
by resolution recorded in the same manner as the original incor-
poration paper, the act of a bookkeeper in undertaking to write
off a loss of capital, not sanctioned by any resolution of the share-
holders or directors still less by any recorded resolution, does not
in law effect any reduction of capital.^ A mere irregularity will
not ipso facto annul the company's corporate existence ^ although
it niight perhaps furnish a ground for quo warranto proceedings
against the corporation.*
§ 646. Statutes making Certificate of Public Official conclusive
Evidence of Regularity. — Statutes are sometimes encountered
which provide that some public official shall scrutinize any pro-
ceedings for the reduction of capital and that hi? determination
in favor of their regularity shall be final. ^ In construing a pro-
vision of this sort contained in the Companies Act of 1867, the
English Court of Appeal held that the officer's certificate of
approval of the reduction precluded an attack upon the valid-
ity of the reduction proceedings based upon the fact that an
interval of fourteen days as required by law had not elapsed
between the meetings at which the resolution making the re-
duction was passed and the meeting at which it was confirmed,
or upon the fact that the "special resolution" amending the
articles so as to authorize the reduction — a necessary prelimi-
nary under the British statute to a reduction of capital — was
invalid for a similar reason ; ° and a very recent case goes even
further and holds that the registrar's certificate was conclusive
although no resolution of any kind amending the articles had
been passed.'
§ 647. Whether statutory Power extends to all Kinds of Reduc-
tion — i. e., Cancellation of Liability, Return of paid-up Capital, and
Reduction of Nominal Capital. — On principle, it would seem
' But see Shoemaker v. Washburn ' Brown v. Wyandotte, etc. Ry.
Lumber Co., 97 Wise. 585, 594; 73 Co., 68 Ark. 134; 56 S. W. 862.
N. W. 333. * See supra, § 157.
' Cunningham v. German Ins. ^ As to similar provisions re-
Bank, 101 Fed. 977, 981 ; 41 C. C. A. specting an increase of capital, see
609 (holding that the amount which supra, § 588.
the company is authorized to borrow " Ladies' Dress Ass'n v. Pulbrook
must .be determined without refer- (1900), 2 Q. B. 377.
ence to the writing off of the lost ' Ee Walker & Smith, 88 L. T.
capital). 792.
531
INCREASE ANB REDUCTION OP CAPITAL [ChAP. XI
clear that a power to reduce capital conferred in general terms by
a statute authorizes any form of reduction of capital — that is,
either a cancellation or diminution of liability -for unpaid capital
or a return of paid-up capital or a reduction of nominal capital.
That is to say, the statutory power extends to all three of these
forms of reduction, although in some cases as will be explained
in detail below ' a reduction of nominal capital cannot be ac-
complished without an accompanying reduction of actual capital
either by cancellation of liability or by return of paid-up capital,
and vice versa. To be sure, under the British Companies Act of
1867, it was reluctantly held by Sir George Jessel that the power
to reduce capital, although conferred in general terms, did not
extend to a reduction of nominal capital unaccompanied by a
cancellation of liability for unpaid capital or to any reduction of
paid-up capital, and hence that the statute did not authorize a
company whose capital had been impaired by losses to reduce
the nominal value of paid-up shares ; ^ but the law as thus an-
nounced was speedily altered by Parliament,' and the soundness
of the decision which occasioned the passage of the act of the
legislature has been so often questioned by English judges * and
text-writers ' that the authority of the case is, to say ,the least,
seriously impaired. It is submitted that unless the wording of
a statute authorizing a reduction of capital clearly demands so
restricted a construction as that of Sir George Jessel, the more
liberal rule now expressly enacted into law in Great Britain
should be adopted. Indeed, a New York statute authorizing
reduction of capital has been thought to apply only in cases
where a reduction of the nominal, so as to correspond with the
actual, capital is sought, so that a return of paid-ug capital
would not be permissible."
§ 648. Return of Actual Capital on Footing that it may be
called up again. — It has been held in England that the statutory
power of reduction of capital permits actual capital to be returned
' Infra, § 660-§ 668. British & American, etc. Corp. v.
» Ebbw Vale Steel, etc. Co., 4 Ch. Couper (1894), A. C. 399, 412.
D. 827; KirkstaU Brewery Co., 5 Cf. Poole v. National Bank of
Ch. D. 535. China (1907), A. C. 229.
' Companies Act, 1877, 40 & 41 '1 Palmer's Company Preo-
Vict., c. 26. edents, 9th ed., 1095-1096. -
* Bannatyne v. Direct Spanish ° Strong v. Brooklyn Cross-Town
Telegraph Co., 34 Ch. D. 287, 302; B. R. Co., 93 N. Y. 426.
532
§ 574-§ 677] REDUCTION UNDER ENABLING STATUTES § 651
to the shareholders upon the footing that it may be called up
again by the company at pleasure.^ This is rather a peculiar
method of reduction, but no reason is perceived why, if the ques-
tion sh9uld ever arise in America, the same conclusion should
not be reached.
§ 649. Whether Scheme must contemplate Permanent Reduc-
tion. — In order to fall within a statutory power of reduction of
capital, a proposed scheme must contemplate, as an English
judge has held, a genuine reduction. Hence the judge refused
to confirm a scheme whereby certain shares in the nature of
founder's shares were to be cancelled and ordinary shares to
a much greater nominal amount were to be issued in exchange.
The judge concluded that the scheme contemplated no real
reduction but rather an increase of capital, and that too without
the payment of its par value; and therefore he refused his
sanction to the scheme ; ^ but on the other hand upon very
similar facts, except that the ordinary shares to be issued in
exchange were to be paid for in full in cash, another English
judge in a later case sanctioned the scheme.' This decision
seems less technical and therefore preferable.*
§ 650. Whether statutory Reduction may retroactively ratify
illegal Reduction. — It seems that the statutory reduction pro-
ceedings cannot be used to ratify a previous illegal return of
capital. For example, where a corporation paid profits, which
were in hand available for dividends, to the several shareholders
with the understanding that the amount so paid should be taken
in reduction of the paid-up capital and should be liable to be
called up again at the pleasure of the company, an English court
held that the transaction could not be vahdated by a retroactive
resolution for reduction of capital subsequently passed under
the Companies Act of 1880, but that the amounts so paid to the
several shareholders must be treated as ordinary dividends and
therefore must go to a tenant for life as income.'
§ 651. Reduction need not afiect all Shares equally. — While
no scheme of reduction that by reason of inequality is unjust or
' Fare-Street Warehouse Co., 59 ' Anglo-French Exploration Co.
L. T., N. s., 214. (1902), 2 Ch. 845.
Cf. Whitwham v. Piercy (1907), * Cf. Poole v. National Bank of
1 Ch. 289. China (1907), A. C. 229.
' Development Co. of Central and ' Whitwham v. Piercy (1907), 1
West Africa (1902), 1 Ch. 547. Ch. 289.
633
§ 652 INCKEASE AND REDUCTION OF CAPITAL [ChAP. XI
oppressive will be sanctioned by the courts/' yet no rule of law
requires that all the shares, or even all the shares of the same
class, shall be rateably reduced.^ Hence, a corporation may
reduce its capital, the statutory formalities being followed, by
purchasing the shares of certain of its members ; ^ but, in con-
struing a New Jersey statute, it was thought that the offer of
purchase must be extended to every shareholder of the same
class.* Similarly, shares which have been surrendered to the
company voluntarily ° or in compromise of a controversy as to
the validity of their allotment " may be written off and cancelled
by pursuing the statutory mode for reducing capital.
§ 652. Assent of Creditors as statutory Condition to Reduction.
— Where the assent of creditors is a condition precedent to the
reduction, there must be an affirmative assent; the mere failure
to appear and object after due notice is not enough.' Although
a lessor's inchoate right against a company for subsequently
accruing rent is not a present claim, yet where the confirmation
of the reduction by the court is requisite, the judicial sanction
will be refused unless a sufficient sum is impounded to meet the
claim of a non-assenting lessor for future rent.*
■ Per Lord Herschell in BrUish & U. S. Steel Corp., 63 N. J. Eq. 809;
Am. Trustee, etc. Corp. v. Couper 53 Atl. 68; Donaldson, Cdburn &
(1894), A. C. 399, 406; Theis v. Knoa;, 5 N. So. Wales State Rep. 725.
Durr, 125 Wise. 651 ; 104 N. W. Cf. Shoemaker v. WoMmrn Lum^
985; 110 Am. St. Rep. 880; 1 L. R. ber Co., 97 Wise. 585; 73 N. W. 333;
A., N. s., 571. Alexander v. Relfe, 74 Mo. 495.
' Be Gailing Gun Co., 43 Ch. D. Contra: Currier v. Lebanon Slate
628 (overruling Be Union Plate Co., 56 N. H. 262.
Glass Co., 42 Ch. D. 513); British & * Berger v. U. S. Steel Corp., 63
Am. Trustee, etc. Corp. v. Couper N. J. Eq. 809; 53 Atl. 68.
(1894), A. C. 399. Cf. Theis v. Durr, 125 Wise. 651;
Contra: Currier v. Lebanon Slate 104 N. W. 985; 110 Am. St. Rep.
Co., 56 N. H. 262; Niagara Shoe Co. 880; 1 L. R. A., n. s., 571.
V. Tobey, 71 111. App. 250. ' Be Denver Hotel Co. (1893),
Cf. Gade v. Forest Glen Brick Co., 1 Ch. 495.
165IU.367; 46N.E. 286 (holding that » fieGaflingGun Co., 43 Ch.D. 628.
the objection can be made, if at aU, ' Re Patent Ventilating Co., 12
only by a shareholder and not by a Ch. D. 254, disregarding Be Credit
creditor); Theis v. Durr, 125 Wise. Fonder of England, L. R. 11 Eq.
651,658; 104 N. W. 985; 110 Am. 356. The latter case also bears upon
St. Rep. 880; 1 L. R. A., n. s., 571. the case where under such circum-
' British & Am. Trustee, etq. stances some of the creditors are un-
Corp. V. Couper (1894), A. C. 399 known, for example, holders of bonds
(overruling dicta in Be Denver Hotel or debentures payable to bearer.
Co. (1893), 1 Ch. 495); Be York « Be Telegraph Construction Co.,
Glass Co., 60 L. T. 744; Berger v. L. R. 10 Eq. 384:
534
§ 574-§ 677] REDUCTION UNDER ENABLING STATUTES § 654
§ 653-§ 657. REDUCTION OF NOMINAL CAPITAL SO AS TO
CORRESPOND WITH THE ACTUAL CAPITAL.
§ 653-§ 656. Writing off lost Capital.
§ 653. Whether authorized by general Power of Reduction. —
We have seen above that according to the weight of authority,
a general power to reduce capital may be exercised by reducing
the nominal capital in order to make it correspond with the actual
capital as diminished by losses ; and a number of points in con-
nection with such a reduction of capital have come before the
courts for decision.'
§ 654. Importance of determining whether a Loss of Actual Capi-
tal has occurred. — The English Companies Act of 1877 expressly
authorizes a company under certain conditions "to cancel any
lost capital or any capital unrepresented by available assets";
and the English courts have been not infrequently concerned
with the question whether a loss of capital within the meaning,
of this statute has been proved. A very recent case in the House
of Lords goes far towards establishing that under the British
statutes it is not necessary to prove that the capital proposed to
be cancelled is lost or not represented by available assets.^ Not-
withstanding this case, the earlier English decisions upon the
question whether a loss of capital suflScient to justify a reduction
of capital are still important in the United States not merely as
bearing on questions arising under any American statutes which
may confine the right of reduction to cases where capital has
been lost, but also on the question, which is everywhere material,
whether a reduction of nominal capital must be accompanied
or followed by a distribution of assets representing the reduced
capital among the shareholders ; for as will presently be shown,
if the reduction is merely for the purpose of wiping out a loss of
capital, no such distribution is necessary or proper.
' In addition to the oases cited decision and was laid down by only
below, § 654-§ 656, see infra, § 662. one of the lords, Lord Macnaghten.
' Poole V. National Bank of China Lord Loreburn, the Lord Chancellor,
(1907), A. C. 229. Note that not- made a short speech which did not
withstanding the headnote in the advert to this proposition, and the
Law Reports, the proposition that other two lords who sat in the case
a loss of capital was not essential to contented themselves with concur-
be proved was not necessary to the ring in the result.
535
§ 655 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
§ 655. Rules for determining whether a Loss of Actual Capital
has occurred. — The expenditure of money by the company for
any of its legitimate purposes, for example, for preliminary ex-
penses such as the establishment of agencies, was held not to be
such a loss of capital as under the British statute would authorize
a reduction of the nominal capital.^ Moreover, it has been held
that in, ascertaining the assets of the company for the purpose
of deterraining whether a loss of capital has occurred sufficient
to Justify a reduction, the amount of a fund collected from reserve
profits and of the value of goodwill must be taken into account.^
But on the other hand, where profits are accumulated as a
reserve fund by a trading company and used in its business with-
out distinction from its capital moneys, the company upon sub-
sequently sustaining losses in the business is not bound to charge
the whole of such losses against the reserve fund but may treat
a fair proportion of the losses as losses of capital justifying a
reduction of the nominal capital.'
§ 656. Whether the Loss should fall on Preferred or Common
Shareholders. — Where a reduction of the corporation's nominal
capital is for the purpose of writing off a loss of actual capital
sustained by the company the reduction should be thrown upon
that class or those classes of the shareholders by whom such a
loss, according to the constitution of the company, should be
borne.* Thus, where preferred shareholders are entitled to
priority both in respect to dividends and capital, a loss of capital
should be borne by the common shareholders to the relief of the
preferred, and consequently upon any resulting reduction of
nominal capital the loss should first be met by the common
shares, even to the extent of their utter extinction.^ But where
preferred shares have no priority in respect to capital, it would
seem that the whole loss should not be thrown upon the common
stock." On the other hand, where preferred shareholders were
' Re Abstainers, etc. Insurance Credit Assurance, etc. Corp. (1902),
Co. (1891), 2 Ch. 124. 2 Ch. 601.
^ Barrow Haematite Steel Co. ° Floating Dock, etc. Co. (1895),
(1900), 2 Ch. 846 (affirmed on an- 1 Ch. 691; London & N. Y. Invest-
other ground in (1901) 2 Ch. 746). ment Co. (1895), 2 Ch. 860; Poole v.
» Hoare & Co. (1904), 2 Ch. 208. National Bank of China (1907),
* Floating Dock, etc. Co. (1895), A. C. 229 (headnote inadequate).
1 Ch. 691; London & N. Y. Invest- « Cf. Quebrada Ry. Co., 40 Ch. D.
ment Co. (1895), 2 Ch. 860. 363 (explained in Re Denver Hotel
Cf. Hyderbad Corp., 75 L. T. 23; Co. (1893), 1 Ch. 495, 502); Union
536
§ 574-§ 677] REDUCTION UNDER ENABLING STATUTES § 657
entitled to a dividend of five per cent before any dividend should
be paid to deferred shareholders and were also entitled to share
fro rata with the deferred shareholders in any dividends in ex-
cess of five per cent and in any distribution of capital on a wind-
ing-up, a scheme was sanctioned for the cancellation of enough
of the deferred shares (the holders consenting) to correspond
with a loss of capital, with the proviso that the remaining de-
ferred shares should thereafter rank in all respects fari passu
with the preferred shares.^ When the preferred shares have no
voting rights, although they are entitled to a preference both as
to capital and dividends, it has been thought not unfair that the
preferred shares should bear part of the loss rather than that
the deferred shares should be wholly extinguished.^ Moreover,
the fact that the company's regulations provide that, in the event
of a deficiency of assets in winding-up, the assets shall be dis-
tributed among the several shareholders in proportion to the
amounts paid up on their respective shares, does not require that
the same principle should be applied, in case of a reduction of
capital in consequence of losses, between shares of the same class
upon which different amounts had been paid up.^
§ 657. Wiping out illegal Over-capitalization. — An illegal
over-capitalization, it has been held, cannot be wiped out by
means of the machinery provided for reducing capital. For
instance, if shares are improperly issued at a discount, or if a
statute requiring payment therefor in cash has not been com-
plied with, the holders are liable to pay to the company the full
par value of their shares, and this obligation cannot be escaped
by an attempt to cancel that proportion of the shares represented
by no actual capital.* If, however, the shares had passed to
Plate Glass Co., 42 Ch. D. 513; Ban^ Roberts-Wicks Co., 184 N. Y. 257;
natyne v. Direct Spanish Tel. Co., 34 77 N. E. 13.
Ch. D. 287; Re Barrow Haematite ' Hyderbad Co., 75 L. T. 23.
Sted Co., 39 Ch. D. 582; Barrow ^ cf. AZisop <«: Sons, 51 "W. R. 644
Haematite Steel Co. (1900), 2 Ch. (headnote inadequate).
846, 855-856 (affirmed on another- ' Credit Assurance, etc. Corp.
ground in (1901) 2 Ch. 746, and com- (1902), 2 Ch. 601.
mented upon by Lord Macnaghten * Re New Chile Gold Mining Co.,
in Poole v. National Bank of China 38 Ch. D. 475.
(1907), A. C. 229, 238); Roberts v. Cf. Re Omnium Investment Co,
537
§ 658 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
purchasers for value without notice of the circumstances at-
tending the issue, or if for any other reason the amount actually
due on the shares cannot be recovered from the holder, this
reasoning would not apply; and in that case, presumably, the
"water" in the shares could be "squeezed out" under the guise
of a reduction of capital under the statutory procedure.
§ 658. Reduction in order to return to Shareholders assets which
Corporation had no Power to hold. — Where a company has taken
in payment for its shares assets which the courts afterwards
decide to be illegal for it to hold, a statutory form for the re-
duction of capital may be used to reduce the capital in an
amount equal to the value of those assets, which may there-
upon be distributed 'pro rata among all the shareholders with-
out making any attempt to return to each shareholder the
particular assets which he had contributed in payment for his
shares.'
§ 659. Reduction of Capital as Substitute for Winding-up Pro-
ceedings. — The procedure for reducing capital cannot be used
as a substitute for winding-up proceedings: thus, where the
company had for five years done no business, a scheme for re-
turning to the shareholders all of its property with the exception
of one lot of ground which could not then be advantageously
sold will not be approved as a reduction of capital.^
§ 660-§ 668. WHETHER REDUCTION OF NOMINAL CAPITAL
SHOULD BE ACCOMPANIED BY CORRESPONDING REDUCTION
OF ACTUAL CAPITAL AND VICE VERSA DISTRIBUTING
AMOUNT BY WHICH THE CAPITAL IS REDUCED AMONG THE
SHAREHOLDERS.
§ 660. Statement of the Problem. — It has been stated above
that, at least according to the better view, a reduction of capital
when authorized by statute may consist either in a reduction
(1895), 2 Ch. 127; Theis v. Durr, -66 N. J. Eq. 274. Cf. Lovelace v.
125 "Wise. 651; 104 N. W. 985; 110 4nson (1907), 2 Ch. 424 (relating to
Am. St. Eep. 880; 1 L. R. A., n. s., 571. the consequences of this transaction).
' Continental Securities Co. v. ' Re WaUasey Brick & Land Co.,
Northern Securities Co., 57 Atl. 876; 63 L. J. Ch. 415.
538
§ 574- § 677] REDUCTION UNDER ENABLING STATUTES § 661
of actual capital, whether in the form of paid-up capital or of
liability for unpaid capital, or in a reduction of nominal capital.
It remains to consider when a reduction of nominal capital
should be accompanied by a reduction of the actual capital
and when it should not be, and vice versa. The problem gen-
erally comes up for decision when a question is made whether a
Teduction of nominal capital should be accompanied or followed
by a distribution of actual capital among the shareholders.
§ 661. Of the Doctrine that Reduction must not destroy Equi-
librium of Balance sheet. — It would seem that in every case the
effect of the reduction of capital should be such " as not to affect
the equilibrium of the balance sheet to the prejudice of the
creditor." In other words, if the nominal capital be regarded
as a liabihty of the company, and if the assets be placed on the
opposite or credit side of the balance sheet, every scheme of
reduction should result in striking off an equal amount from
both sides of the balance sheet. For instance, "where capital
is written off as lost or unrepresented by available assets, the
equilibrium of the balance sheet is maintained by striking out
on the one side a certain amount from the paid-up capital, and
on the other side a certain amount from the value of the assets.
Where capital is returned as in excess of the wants of the com-
pany, an amount is in the same manner taken off from both
sides of the balance sheet. The balance item on the debit or
credit side of the balance sheet, as the case may be, is in either
case unaffected." '■ Hence, the court concluded that a scheme
of reduction which involved a diminution of nominal capital,
thereby striking off a certain amount from the debit side of the
balance sheet, should not be sanctioned by the court unless an
equivalent amount were to be struck off from the credit side
either by a return of paid-up capital or by a cancellation of lia-
bility for unpaid capital.^ So, also, a scheme of reduction which
involves no return of paid-up capital and no release of liability
for unpaid capital will not meet with judicial approval unless
a loss of capital be proved.'
' Anglo-French Exploration Co. ' Anglo-French Exploration Co.
(1902), 2 Ch. 845, 853, per Buck- (1902), 2 Ch. 845.
ley J. See, however, adverse eriti- ' Barrow Haematite Steel Co.
cism of this case by Lord Mac- (1901), 2 Ch. 746. See, however,
naghten in Poole v. National Bank supra, § 654.
of China (1907), A. C. 229, 238-239.
539
§ 662 INCREASE AND REDUCTION OF CAPITAL [CsLAP. XI
§ 662-§ 668. Whether and to what Extent Redvction of Nominal
Capital should be accompanied or followed by Distribution
of Paidrup Capital among Shareholders.
§ 662. When such Distribution should not be made. — There is
no rule that upon a reduction of capital an amount equal to
the difference between the nominal capital before and after re-
duction must be distributed among the shareholders, but the
amount, if any, so distributable depends upon extraneous con-
siderations which are not necessarily apparent on the face of
the proceedings by which the reduction is accomplished.^ For
example, if the reduction takes the form of a mere reduction
of nominal capital in order to enable the company to write off
a loss or impairment, without any corresponding reduction of
actual capital, there will of course be no occasion for a distri-
bution of capital among the shareholders; and indeed any such
distribution would be unlawful,^ for the law does not permit a
return of actual capital to the shareholders in consequence of
a reduction of nominal capital unless the company would after
such return continue to have assets at least equal in value to
the nominal capital as reduced.^ In such a case of reduction
of nominal capital for the purpose of writing off a loss or im-
pairment of capital, the reduction affects the nominal capital
only, and there is no corresponding reduction of either form of
actual capital. As was said by Sir George Jessel, the actual
capital has already suffered a corresponding reduction "by a very
unpleasant process." * So, also, if the reduction were accom-
plished by a cancellation of a liability attaching to partly paid
shares, without any reduction of paid-up capital, no distribution
of moneys representing paid-up capital need or could legally
ensue ; for the reduction of actual capital corresponding to the
reduction of nominal capital takes place automatically, consisting
merely in a relief from liability. So when a reduction is effected
' Strong v. Brooklyn Cross-Town 30 N. E. 893; Jerome v. Cogswell,
B. R. Co., 93 N. Y. 426. 204 U. S. 1, 7 (semble).
' Cf. Strong v. Brooklyn Cross- ' Kassler v. Kyle, 65 Pac. 34;
Tovm R. R. Co., 93 N. Y. 426; 28 Colo. 248.
McCann v. First Nat. Bank, 112 * Ebhw Vale Steel, etc. Co., 4 Ch.
Ind. 354; 14 N. E. 251; McCann D. 827, 832.
V. First Nat. Bank, 131 Ind. 95;
540
§ 574^§ 677] REDUCTION UNDER ENABLING STATUTES § 663
by purchasing and extinguishing some of the outstanding shares,
the reduction need not be accompanied or followed by any distri-
bution or payment of capital moneys to the other shareholders ;
for in such a case, although there is a reduction of nominal
capital and a corresponding reduction of actual capital, yet by
reason of the method of reduction, the entire amount by which
the actual capital is diminished is payable to the holders of the
purchased shares and is not distributable 'pro rata among all
the shareholders.
§ 663. When the Distribution should be made. — On the other
hand a reduction of capital must sometimes be accompanied
or followed by a distribution of capital moneys among the share-
holders 'pro rata} Thus, where a reduction of nominal paid-up
capital is effected by cancelling a certain proportion of each
shareholder's shares on the ground that the company's actual
capital is in excess of its needs, the company must distribute
assets, or their value, to the extent of the reduction among the
shareholders 'pro rata: there is no power in the company to re-
tain as a so-called surplus any portion of the actual capital
which represents the nominal capital extinguished by the re-
duction.^ But in order to justify such distribution, there must
be proof that the original capital had not been in any degree
impaired ; for if the reduction was intended, in part to wipe out
an over-capitalization or to reduce the nominal so as to corre-
spond with the actual capital, and in part to diminish the actual
as well as the nominal capital, a division of actual capital
among the shareholders would be lawful only in so far as
the wiping out of the over-capitalization leaves surplus capital
in the company's hands in excess of the nominal capital as
reduced.^
' As to the application of the 400 (affirmed short, 78 N. Y.
Statute of Limitations to such a 600).
claim for a return of capital, see Cf. Cogswell v. Second Nat. Bank,
Artisans' Land & Mortgage Co. 78Conn. 75; 60 Atl. 1059, affirmed Sm6
(1904), 1 Ch. 796. nom. Jerome v. Cogsviell, 204 U. S. 1.
As to interest on a claim for re- ' Strong v. Brooklyn Cross-Town
turn of capital set free by reduo- 7J. iZ. Co., 93 N. Y. 426; McCannv.
tion proceedings, see Mustard v. First Nat. Bank, 112 Ind. 354; 14
Union Nat. Bank, 86 Me. 177 (hold- N. E. 251 ; McCann v. First Nat.
ing that interest does not run until Bank, 131 Ind. 95; 30 N. E. 893.
demand). Cf. Roberts v. Roherts-Wicks Co.,
New York Nat. Ex- 102 N. Y. App. Div. 118, reversed,
change Bank, 8 Daly (N. Y.), 184 N. Y. 257.
541
§ 664 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
§ 664. Time of making Distribution. — It would seem clear
that in cases where, upon a reduction of capital, paid-up capital
is to be returned to the shareholders, the distribution may prop-
erly follow rather than precede the final confirmation of the
reduction.'
§ 665. Manner of Distribution — In Kind or in Cash — Dis-
tribution of Bonds. — - Where in consequence of a reduction of
capital, capital is to be returried to and distributed among the
shareholders, the company may distribute in kind the assets
which after the reduction is consummated becomes super-
fluous ; ^ but such distribution in kind is not necessary, for in
lieu thereof the company may, and generally does, sell the sur-
plus assets and convert them into cash for convenience of dis-
tribution. If this course is for any reason not deemed advisable,
the company may, it would seem clear, borrow on mortgage
bonds or otherwise the requisite amount of cash for distribution,
thus in effect converting capital stock into bonds or obligations
of the company to the extent of the reduction of capital,^ although
in a Missouri case this procedure was held illegal for reasons
that are not perhaps altogether convincing.* Moreover, it has
been held that a scheme of reduction involving the return of
paid-up capital to the shareholders may provide that the com-
pany shall issue its debentures in part payment to such share-
holders as elect to receive the same in lieu of cash, such a con-
version of shareholders into creditors not rendering illegal a
scheme otherwise unobjectionable.'
' Lees Brook Spinning Co. (1906), in the principal company as an
2 Ch. 394, disapproving Calgary & authorized investment are not nec-
Edmonton Land Co. (1906), 1 Ch. essarily authorized to retain the
141. distributed shares as an investment.
^ CorUinental Securities Co. v. Lovelace v. An^on (1907), 2 Ch.
Northern Securities Co., 57 Atl. 876; 424.
66 N. J. Eq. 274; Harriman v. ' Berger v. U. S. Steel Corp., 63
Northern Securities Co., 197 U. S. N. J. Eq. 809; 53 Atl. 68.
244, 299; 25 Sup. Ct. 493. ■• Coquard v. St. Louis Cotton, etc.
That in such cases there is no Co., 7 S. W. Rep. 176 (Mo.),
implied warranty of title on the part; Cf. Strong v. Brooklyn Cross-
of the company, see Olsen v. Home- Town R. R. Co., 93 N. Y. 426.
stead Land Co., 87 Tex. 368; 28 ' Re Nixon's Navigation Co.
S. W. 944. (1897), 1 Ch. 872; Re Lamson Store
If the assets so distributed in Service Co. (1897), 1 Ch. 875 n.
kind consist of shares in other cor- Cf. Berger v. U. S. Steel Corp.,
porations, trustees who hold shares 63 N. J. Eq. 809; 53 Atl. 68.
542
§ 574-§ 677] REDUCTION UNDER ENABLING STATUTES § 667
§ 666. Whether Rediuition of Nominal Capital for purpose
of writing-ofj Assets believed to he worthless casts Title to those
Assets on Shareholders individually. — If capital is reduced in
an amount equal to the loss supposed to have been sustained
by the deterioration of an asset which is believed to have become
quite worthless, the supposedly valueless asset does not, merely
in consequence of the reduction, devolve upon the shareholders
individually, and if the asset in question afterwards becomes
valuable and is sold by the company, a shareholder cannot
force a distribution of the amount so realized among the several
members of the company.' If, however, capital is reduced for
the purpose of writing off assets of doubtful value, which are set
aside as a special fund, such action is deemed equivalent to the
declaration of a dividend equaUing in the aggregate the value
of those assets, so that upon the winding-up of the company
the amount realized from the assets so reserved and set apart
is distributable among those persons who were shareholders
at the time the reduction was effected and the assets so set apart,
and not among those who were shareholders when the company
came to be wound up.^
§ 667. Whether Moneys distributed on Reduction of Capital are
Income or Capital. — Rights of Preferred and Common Share-
holders, of Tenants for Life and Remaindermen. — The amount
liberated by a reduction of nominal capital for distribution
among the shareholders is capital in every sense of the word.
Hence, where the company has issued cumulative preferred
shares which are entitled to no preference as to capital, the
amount distributed among the several shareholders in conse-
quence of a reduction of nominal capital is not to be regarded
as profits available for payment of cumulative preferred divi-
dends which were overdue at the time of the reduction but
should be distributed pyro rata among both common and pre-
ferred shareholders.' So, an amount so distributed is to be re-
' McCann v. First Nat. Bank, of a stock dividend must be treated
112 Ind. 354 ; 14 N. E. 251 ; McCann as capital and not income as between
V. First Nat. Bank, 131 Ind. 95; 30 life tenant and remainderman).
N. E. 893. ' Jerome v. Cogswell, 204 U. S.
Cf. Parker v. Mason, 8 R. I. 427 1 (aflBrming Cogswell v. Second Nat.
(holding that the amount of the in- Bank, 78 Conn. 75; 60 Atl. 1059).
creased value of the supposedly ' Roberts v. Roberts-Wicks Co.,
worthless asset when . distributed 184 N. Y. 257; 77 N. E. 13.
among the shareholders in the form
543
§ 668 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
garded as capital and not income as between tenant for life and
remainderman.'
§ 668. Certificates issued to Shareholders on Reduction of Capital
in lieu of immediate Distribution of Cash or Property. — Where the
capital of a company is reduced by cancelling certain shares and
repaying to the holders the value thereof, certificates issued to
the holders of the cancelled shares stating that they are entitled
to so much cash from the company are regarded, it seems, as
quasi negotiable. Hence, an assignee of such a certificate will
be preferred to the company claiming under a pledge to it made
by the original holder after the assignment but before notice
thereof had been communicated to the company.'
' § 669. Reduction as affecting Voting Rights of Shareholders.
— It is no objection to a proposed reduction of capital that the
voting rights of the shareholders will be affected thereby.' For
instance, where in consequence of a loss of capital it was pro-
posed to reduce the par value of the ordinary shares and to cut
down proportionately their voting rights, leaving untouched the
number, par value, and voting rights of the preferred share-
holders, the scheme of reduction was after objection sustained.^
Indeed, if the par value of some only of the shares is reduced, or,
presumably, if for any other reason the reduction of capital
renders equitable a change in the voting rights attaching to
some of the shares, the reduction will not be legal unless such
change is made.*
§ 670. Agreement to exercise Power of Reduction by Redeeming
certain Shares. — It is competent for a corporation to contract
with the holders of certain shares to exercise its statutory power
of reducing its capital by redeeming such shares at par out of
accumulated profits ; and where such a contract is incorporated
in the incorporation paper, or original constitution of the com-
pany, the reduction of capital involved does not include a return
of paid-up capital within the meaning of a statute requiring the
' Infra, § 1393. * James Qolmer, L't'd (1897), 1
» Callanan v. Edwards, 32 N. Y. Ch. 524.
483. ' Pmfcn«2/<fe Sons S. 5. Co. (1892),
» Allsiyp & Sons, 51 W. R. 644. 3 Ch. 125.
544
§ 574^ § 677] REDUCTION UNDER ENABLING STATUTES § 672
assent of creditors to any reduction of capital involving such a
return.'
§ 671. Agreement not to reduce Capital or not to afEect certain
Shares by the Reduction. — It seems to be conceded that just as
a corporation or its shareholders may agree to prefer certain
shares in the payment of dividends, so a contract that any reduc-
tion of capital shall not affect certain shares is competent.^
Such an agreement should be distinguished from an attempt by
a corporation to contract itself wholly out of its statutory power
of reducing its capital, which would probably be nugatory.*
§ 672- § 674. Preferred Shares as affected by Reduction of
Capital.
§ 672. In general. — The mere issue of preferred shares car-
rying a right to a preferential dividend at a fixed rate does not
amount to a contract by the company not to reduce the nominal
value of such shares and thus indirectly diminish their dividends.*
Thus, where preferred shares are expressed to carry a prefer-
ential dividend of, say, ten per cent, the meaning is ten per
cent on the par value of the shares as originally issued or as
subsequently legally reduced;' and the subscriber takes subject
to the statutory power of reduction.^ So, where the preferred
shareholders are entitled to "a fixed dividend of eight per cent
on the amount paid up in respect of their shares" if a loss of
capital is sustained, the par value of the shares may be reduced
and with it the amount of the preferential dividend, since the
language quoted is construed to mean that the fixed dividend
shall be eight per cent on the par value for the time being of
the shares and shall not exceed the same percentage on the
amount which has been paid in on the shares." That the pre-
ferred shareholders have no voting rights does not restrict the
company's right to reduce their shares.' Moreover, a scheme
» Re Dieido Pier Co. (1891), 2 Ch. Haematite Steel Co., 39 Ch. D.
354. As to redeemable shares, see 682.
also supra, § 225. ^ Bannatyne v. Direct Spanish
' Hyderbad Co., 75 L. T. 23, 26. Tel. Co., 34 Ch. D. 287.
' Barrow Haematite Steel Co., 39 ° Re Barrow Haematite Steel Co.,
Ch. D. 582, 596. 39, Ch. D. 582, 600-602.
* Bannatyne v. Direct Spanish ' Re Barrow Haematite Steel Co.,
Td. Co., 34 Ch. D. 287; Re Barrow 39 Ch. D. 582, 603.
VOL. I. — 35 545
§ 673 INCKEASE AND REDUCTION OF CAPITAL [ChAP. XI
by which some of the deferred shares, with the consent of the
holders, should be cancelled and the remainder of them should
thenceforward rank pari passu with the preferred shareholders,
has been upheld.' A foHiori, where the incorporation paper,
after fixing the relative rights of preferred and ordinary shares,
expressly provides that the company may alter the rights as so
fixed, a scheme of reduction of capital which very seriously
affects the rights of the preferred shareholders may nevertheless
receive judicial approval, especially where a majority of the
preferred shareholders assent.^
§ 673. In case of Reduction for purpose of writing-ofE Lost
Capital. — The question whether a reduction of nominal capital
for the purpose of writing-off a loss of actual capital should throw
the loss upon the preferred shares or upon the common or ordi-
nary shares has been considered above.'
§ 674. Whether Reduction afiects overdue ciunulative preferential
Dividends. — Where cumulative preferred shares are reduced in
par value with the holder's consent, it was held by the Appellate
Division of the New York Supreme Court that the full amount
of preferential dividends which were overdue at the time of the
reduction could not be claimed by preferred shareholders before
dividends are paid upon the common or ordinary shares out of
subsequent earnings, but that the most that could be claimed
was the preferred dividends calculated with reference to the par
value of the shares as reduced.* This result was reached by
assimilating the case to a purchase by the company of a certain
proportion of the shares ; but it is submitted that the reduction
is very different from such a purchase, and consequently the
Court of Appeals, reversing the decision of the Appellate Divi-
sion, held that the reduction ought not to be construed as affect-
ing the preferred shareholder's vested right to the cumulative
preferential dividends which were overdue at the time of the
reduction.' Such should certainly be the construction if the
reduction were effected without the shareholder's assent; and
it is submitted that even an express assent should be taken most
strongly in favor of the shareholder, and should not be held
» Hyderbad Co., 75 L. T. 23. * Roberts v. Roberts-Wicks Co.,
' Wdsbach Incandescent Gas Light 102 N. Y. App. Div. 118.
Co. (1904), 1 Ch. 87. ' Roberts v. Roberts-Wicks Co.,
' Supra, § 656. 184 N. Y. 257; 77 N. E. 13.
546
§ 574-§ 677] OTHER MODIFICATIONS OF CAPITAL § 675
equivalent to a waiver of existing vested rights unless clearly
intended to have that effect. Indeed, according to the opinion
of the New York Court of Appeals it would seem that no exer-
cise of the statutory power of reduction could legally without the
consent of the preferred shareholders affect their vested right to
the overdue preferential dividends even if clearly intended ac-
cording to its terms to have that effect.'
§ 675- § 677. Modification of Capital otherwise than by Increase
or Redvction — Consolidation and Subdivision of Shares.
§ 675. Whether Corporation may Consolidate or Subdivide its
Shares. — Inasmuch as the number and par value of the shares
into which the capital of a corporation is divided is almost always
stated in the incorporation paper, or in the company's special
act, the consolidation or subdivision of the shares by the com-
pany will be illegal unless legislative authority for the change
can be shown.^ Even an express power reserved in the incor-
poration paper to reduce or subdivide the shares would be
ineffective in the absence of legislative sanction therefor.' A
subdivision of shares has more serious consequences than a
consolidation of shares; for, if the company might subdivide
the shares indefinitely, they might be reduced to so small an
amount and scattered among so many holders that no one
shareholder would owe a sufficiently large sum to justify the
expense of collection, and thereby creditors of the company
might be prejudiced.'' Where, however, the special act of incor-
poration does not fix the number of the shares into which the
capital should be divided, the company, it seems, may alter
the number at pleasure, although no such alteration can
affect the members' substantive rights, — such as their voting
rights.'
,s
' See, however, Oban & Avltmore- * Financial Corporation, 2 Ch.
Glenlivet Distilleries, 5 Fraser (Sc), 714, 733, per Lord Cairns.
1140. ' AnAergate, etc. Ry. Co. v.
' Financial Corporation, 2 Ch. Mitchell, 4 Ex. 540. Cf. Somerset,
714; Tschumi V. HUls, 6 Kaas. App. etc. R. R. Co. v. Cushing, 45 Me.
549; 51 Pac. 619. 524.
• Financial Corporation, 2 Ch.
714.
547
§ 676 INCREASE AND REDUCTION OF CAPITAL [ChAP. XI
§ 676. Consolidation or Subdivision of Shares under Statutory
Authority. — Sometimes general incorporation laws authorize a
consolidation or subdivision of shares. Sometimes this is effected
upon an increase or reduction of capital, the old shares being
virtually surrendered and nevsr shares to the amount of the capital
as increased or reduced being issued.' An alteration in the par
value of shares, even when accomplished under sanction of law,
will not have a retroactive effect so as to change the meaning of
contracts or offers previously made with or to the company. For
example, when a person applied for shares in a corporation, the
shares being then of the nominal value of £20, a subsequent
change in the par value of the shares from £20 to £40 could
not enable the company by accepting the offer to require the
appUcant to take £40 shares; but on the contrary the com-
pany's acceptance completed a contract for the issue of £20
shares.^
§ 677. EfEect of unauthorized Consolidation or Subdivision. —
An unauthorized or illegal attempt at subdivision or consolida-
tion of shares is wholly nugatory; the shares remain of the
original amount. For example, where a company attempted to
divide its shares of £100 each into shares of the nominal value
of £20 each, giving certificates for five £20 shares in exchange
for each £100 share, the shares remained of the nominal value
of £100 each; a transfer of five £20 shares operated as a
transfer of the £100 share for which they had been given in
exfchange, so long as the origin of the new shares could be
traced; and the transferee although entered on the register as
a holder of five £20 shares and although ignorant of the fact
that the shares had been originally of the denomination of
£100 is nevertheless liable as the holder of a £100 share.' In
Such a case, a proceeding for the forfeiture of the shares for
non-payment of calls, treating them as £20 shares, would be
irregular and liable to be set aside if the objection be season-
ably made ; but if the shareholder raises no such point, but on
the contrary asks for a remission of the forfeiture as a matter
of grace, he thereby waives the point, and the company or its
liquidator cannot hold him for subsequent calls as if the for-
' See Gettysburg Nat. Bank v. ' Financial Corporation, 2 Ch.
Brown, 95 Md. 367; 52 Atl. 975. 714. d. Cammackw.Levy {ha.),^b
' Gicstard's Case, 8 Eq. 438. So. 925.
548
§ 574-§ 677] OTHER MODIFICATIONS OF CAPITAL § 677
feiture were void.' In a Kansas case, where the directors with^
out legal authority undertook to increase the par value of the
shares, it was held that a person who had accepted a certifi-
cate for shares of the increased value incurred no liability as
shareholder.^
' Financud Corporation (King's ' Tschumi v. HiUs, 6 Eans. App.
Case), 2 Ch. 714. 549; 51 Pac. 619.
549
CHAPTER XII
BY-LAWS AND INTERNAL REGULATIONS
Section
The need of internal regulations adapted to each company's peculiar
conditions . 678
By-laws as internal regulations 679
Objections to by-laws as regulations for modern companies .... 680
Remedies attempted by legislatures in Amertca 681
Remedy in England — Articles of Association 682
Comparison between English Articles and American by-laws .... 683
"Regulations" — meaning of term 684
Nature of by-laws . 685-687
Scant consideration of subject by judges and text-writers . . . 685
Municipal ordinances as examples of by-laws 686
Distinctions between by-laws and mere resolutions 687
Method of adopting by-laws 688-690
In general — by-laws resting in parol — custom as by-law . . . 688
By-laws adopted before incorporation 689
By-laws adopted in foreign states . . 690
In whom the power of enacting by-laws resides 691-692
Whether the power resides in shareholders or directors .... 691
Dual power in both shareholders and directors 692
What by-laws or regulations are vaHd 693-715
General rules . . . 693-695
By-laws void in part . . 693
Void by-laws incorporated into contracts 694
Estoppel to deny validity of by-laws 695
By-laws and regulations must be legal 696-698
Must not conflict with any statute 696
Must not conflict with general principles of corporation law 697
Must not conflict with common law 698
By-laws and regulations must accord with the charter or in-
corporation paper 699-701
In general 699
Must relate to prosecution of company's objects or busi-
ness 700
Whether express power to enact by-laws for one purpose
excludes implied power to enact by-laws for other
purposes 701
Of the rule that by-laws must be reasonable 702-715
In general, as applied to by-laws and English articles . . . 702
By-laws presumptively reasonable 703
Legal standard of reasonableness 704
By-laws in restraint of trade or alienation 705-711
In general 705
By-laws restricting transferability of shares . . . 706-711
In general 706
650
§ 678-§ 738] SYNOPSIS § 678
What by-laws or regulations are valid (continued) Section
Effect of agreement of shareholder to abide by a
by-law restricting right of alienation 707
Effect of accepting share-certificate referring to
the by-law 708
Observations on unfortunate condition of Ameri-
can law in respect to these matters . . . 709
Rvile against perpetuities not applicable to by-
laws restricting transfers of shares . . 710
By-laws merely regulating transfers valid .... 711
By-laws attempting to restrict right to resort to the
courts 721
By-laws attempting to bind minority to fraudulent or ultra
vires acts of majority 713
Retroactive by-laws 714
By-laws must be general and uniform 715
Sanction of by-laws — fines, forfeitures, and other penalties . . 716-719
In general 716
Void and unenforceable penalties 717
Penalties attempted to be imposed for doing what the member
has a legal right to do 718
Remedies for enforcement of fines — defences 719
Amendment and repeal of by-laws 720-727
In general 720
Amendment or repeal affecting the company's constitution . . 721
Amendments affecting vested or contractual rights acquired
under by-law 722
General power to alter by-laws cannot be surrendered by con-
tract or by provision in the regulations themselves . . . 723
Contracts with companies to be construed if possible so as not
to interfere with power of altering the by-laws 724
Whether provision in by-laws may authorize amendments with-
out complying with statutory requisites 725
Repeals by impUcation .... 726
Repeals by desuetude .... 727
Disregard of by-laws without formal repeal 728
Reformation of mistakes in by-laws 729
Waiver of by-laws intended for company's benefit 730
Construction of by-laws 731
Constructive notice of by-laws 732-735
Strangers to the company 732
Shareholders 733
Directors and officers 734
Persons who are in act of becoming or who afterwards become
members or officers ; . 735
Who are subject to by-laws 736
Who may take advantage of by-laws 737
Pleading and proof of by-laws 738
§ 678. The Need of Internal Regulations adapted to each Com-
pany's peculiar Conditions. — Regulations of some sort for the
government and management of corporations, in addition to the
551
§ 679 BT-LAWS AND INTERNAL REGULATIONS [ChAP. XII
rules laid down by the incorporation statute or companies act,
are almost a necessity. The incorporation paper, containing as
it generally does the mere skeleton of the company's constitution,
cannot adequately supply this want; and besides, being altera-
ble with difficulty or not at all, it cannot be adjusted to meet the
changing needs of the company's business. In the case of com-
panies incorporated by special act, the desirability of some
method of establishing for themselves rules and internal regu-
lations was by no means so great as in the case of companies
organized under general laws. For a special act of incorpora-
tion could, and often did, provide many details for the manage-
ment of the company that were supposed to be especially adapted
to its own peculiar needs. But a general incorporation law,
providing as it does for an indefinite multitude of corporations
whose individual circumstances and wants cannot be foreseen, is
necessarily incapable of, furnishing a satisfactory code of regular
tions for each one of them. Then, too, unless the freedom of the
right to incorporate is to be delusive, each company should have
liberty to frame its own regulations. As an experienced English
author has said: "Companies and their members cannot be
expected to put up with a uniform set of regulations, any more
than testators with a common form of will, or partners in firms
with a common form of partnership deed. A company with
hundreds or thousands of members obviously may require very
different regulations to those required by one with only a dozen
or a few dozen members." '
§ 679. By-laws as Internal Regulations. — The only means
by which in the United States under the present laws a corpora-
tion can establish rules for its management subordinate to its
incorporation paper is through the instrumentality of by-laws.^
This system of corporate government by by-laws originated with
the old common law corporations erected by royal charter; and
' Palmer's Introductory Note to Lodge v. Kutscher, 179 111. 340; 53
Revised Table A (Supplement to N. E. 620; 70 Am. St. Rep. 115;
Palmer's Company Precedents, 9th Domes v. Swpreme Lodge, 75 Miss,
ed.), p. 5. 466; 23 So. 191; Supreme Lodge v.
' The so-called "constitutions" Knight, 117 Ind. 489; 20 N. E. 479;
of some American corporations, par- 3 L. R. A. 409; Stein v. Marks, 44
ticularly benevolent and social or- N. Y. Misc. 140, 145; 89N. Y. Supp.
ganizations, are in legal contempla- 921.
tion nothing but by-laws. Supreme
552
§ 678-§ 738] BY-LAWS and internal regulations § 681
althougk the system in its original form is now obsolete in
England so far as ordinary business corporations are concerned,
having been superseded by a newer if not a better, yet it has
survived in America. The power to enact by-laws was incident
to every corporation at common law ; and the same power may
be implied in the case of .our American statutory corporations.^
§ 680. Objections to By-laws as Regulations for Modern Com-
panies. — One might easily demonstrate the extremely un-
satisfactory nature of by-laws, such as might be enacted by a
corporation at common law, as a subordinate constitution, or
code of permanent regulations, for a modern business company.
Indeed, objections to corporate government through by-laws
may be found in every direction as the subject is investigated.
As by-laws may be either in writing or parol, either recorded in
the minutes or not so recorded, as they may either originate in
express vote of the company or be implied from a custom, their
very existence is often uncertain. Even a lawyer will often be in
doubt whether a particular regulation is in force as part of the
by-laws or not. All the circumstances combine to beget in
the shareholders utter disrespect and disregard for their by-
laws. Very often no by-laws are adopted, and generally those
that are adopted are not observed.
§ 681. Remedies attempted by Legislatures in America. —
Attempts to remedy this unfortunate condition have been made
in some of the United States. Thus, by-laws are sometimes
required to be in writing or to be adopted by a two-thirds vote.
Sometimes they have been required to be under the corporate
seal.^ These expedients are but palliative, however; for no
adequate reUef can be had unless the by-laws are, Uke the incor-
poration paper, required to be recorded in a public registry, so
as not merely to invest them with some formality and title to
respect, but also to charge the shareholders and all who deal with
the company with constructive notice of them. So far as the
writer is aware, this course has not become general anywhere in
the United States.'
' Martin v. Nashville Bldg. Ass'n, ' Compare, however, Fee v. Nat.
2 Coldw. (Tenn.) 418 (semble). Masonic Accident Ass'n, 110 Iowa
" Dunston v. Imperial Gas Light 271; 81 N. W. 483; Allman v.
Co., 3 B. & Adol. 125; McDonnell v. Havana, etc. R. R. Co., 88 111. 521,
Ontario, etc. R. R. Co., 11 Up. Can. 23 (as to Illinois Railway Law of
Q. B. 267. 1872); Rose HiU, etc. Road Co. v.
553
§ 682 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
§ 682. Remedy in England — Articles o£ Association. — In
England, on the other hand, although the power of enacting
by-laws was and is incident to every corporation created by
royal charter, yet the Companies Acts beginning with the act of
1856, substitute, as to companies incorporated under them, a
difPerent system. As we have already .stated, each English com-
pany, in addition to its memorandum of association or incorpora-
tion paper, has its articles of association, which comprise the
matters of internal regulation proper to be relegated to mere
by-laws.' These articles must be executed by the subscribers to
the memorandum and recorded contemporaneously with that
document in the registry of joint-stock companies. If no articles
are adopted, the code of internal regulations contained in
"Table A" ^ is to apply in lieu thereof. The company's articles,
or "Table A" if no articles are adopted, are subject to alteration
by a special resolution — that is to say, a resolution which is
passed by a three-fourths vote at a general meeting convened for
the purpose, and which is confirmed at another general meeting
held after an interval of not less than a fortnight nor more than
a month. ^ Any such special resolution must, hke the original
articles, be recorded in the registry.'
§ 683. Comparison between English Articles and American By-
laws. — These articles of association of an English company
take the place of by-laws, and are in substance and effect re-
corded by-laws ; ' but they are never in England called by that
name. The differences between them and the by-laws customary
in the United States are due almost entirely to the greater
formality attending their adoption and the fact that, as they
are recorded, all who deal with the corporation must at their
peril take notice of them." Thus, a consequence of the formal
People ex rd. Lawless, 115 111. 133; Manon Insurance Co. (1902), A. C.
3 N. E. 725. 232.
' Supra, § 11. As to the function of English
' See supra, § 12. , articles, see further supra, § 11.
^ Companies Act, 1862, § 50- ' Mahony v. East Holyford Min-
§ 61. ing Co., L. R. 7 H. L. 869, 893, where
* Ibid, § 53. Lord Hatherley said: "It is a point
° See Brown v. Republican Silver of very great importance that those
Mines, 55 Fed. 7 (where the articles who are concerned in joint-stock
of association of an English company companies and those who deal with
were consistently denominated by- them should be aware of what is
laws by the court); Ho Tung v. essential to the due performance of
554
§ 678-§ 738] NATURE OF BY-LAWS § 686
nature of English articles of association and of the fact that
they are made matter of record and accessible to the public is
that they may reasonably enough deal with matters that could
not be left to the informal, unrecorded American by-laws with-
out injustice." Subject to these qualifications, it is appre-
hended that English articles and American by-laws should be
affected by the same considerations.'
§ 684. Regulations — Meaning of Term. — A term which is
often used to denote the articles of association of an English
company and may with equal propriety be applied to the by-laws
of an American corporation is "regulations." Accordingly, it
will be used in this work to denote both the one and the other.
Indeed, the word properly designates any rules for the company's
constitution and management which are binding upon its mem-
bers. Accordingly, it might fairly be taken to include the
incorporation paper; but in a recent case the word "regulations"
in a British statute was construed to refer exclusively to the
articles of association and not to the memorandum or incorpora-
tion paper.^ In its usual sense, the word regulations is ordinarily
to be taken to mean conventional regulations as distinguished
from regulations prescribed by statute ; and yet even the latter
are sometimes designated by the term.
§ 685-§ 687. Nature of By-laws.
§ 685. Scant consideration of subject by Judges and Text-
writers. — Any one who bears in mind the important part in
the corporate economy that, is played, in theory at least, by the
by-laws, will be no little surprised to see how scant has been the
consideration of their real nature either by courts or text-writers.
§ 686. Municipal Ordinances as Examples of By-laws. — Per-
haps the most instructive and typical instances of by-laws caii be
their duties, both as customers or pany, and those who so deal with
dealers with the company and as them must be affected with notice of
persons forming the company, and all that is contained in those two
dealing with the outside world re- documents."
spectively. . . . Every joint-stock '■ See McKain and Canadian Bir-
company has its memorandum and beck, etc. Co., 7 Ont. L. R. 241, 246-
articles of association. . . . Those 247.
articles of association . . . are open ' Dexine Patent Packing & Rub-
to all who are minded to have any ber Co., 88 L. T. 791.
dealings whatsoever with the com-
555
§ 687 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
found in the by-laws of municipal corporations — that is to say,
in municipal ordinances. Such municipal by-laws are, as their
name implies, laws. When valid and authorized by the charter,
they have all the force of law. In the case of modern business
corporations, although the power of making by-laws is much
more limited and although the means for their enforcement are
much less perfect, yet their real nature as laws is the same. To
be sure, ordinances of municipal corporations are local laws and
bind all persons within the territorial limits of the municipality,
whereas by-laws of ordinary business corporations bind only
members and officers ; but this distinction goes to the extent of
the jurisdiction of the corporation rather than to the real nature
of the by-laws. The kinship of the by-laws of ordinary indus-
trial corporations to the ordinances or by-laws of a municipal-
ity is demonstrated by the case of the incorporated guilds of
merchants and craftsmen which became common in England
in the sixteenth century and which are in some respects the ante-
types of the American corporations of to-day. These societies
would legislate for their members in much the same way as a
common council of an incorporated town legislates for its inhab-
itants. They would prohibit unworkmanlike practices, and
enact rules of sundry sorts for the conduct of the trade.
§ 687. Distinction between By-laws and mere Resolutions. — In
essence, however, by-laws are mere resolutions of the corpora-
tion. They are distinguished from other resolutions "in that a
resolution applies to a single act of the corporation, while a
by-law is a permanent and continuing rule, which is to be applied
on all future occasions." '
§ 688-§ 690. Method of adopting By-laws.
§ 688. In general — By-laws resting in Parol — Custom as By-
law. — Inasmuch as by-laws are nothing but resolutions of the
corporation, the method of adopting them may be characterized
' 1 Cook on Corporations, 4th ed., Barb. (N. Y.) 508, 539-540; Domes
§ 4 a; Steger v. Davis, 8 Tex. Civ. v. Supreme Lodge, 75 Miss. 466, 480-
App. 23; 27 S. W. 1068. 481; 23 So. 191; Smrentirm v. Ca-
Cf. North Milwaukee Town Site letti, 75 N. Y. App. Div. 507; 78
Co. V. Bishop, 103 Wise. 492, 493; N. Y. Supp. 322; Walker v. John-
79 N. W. 785; 45 L. R. A. 174; son, 17 App. (D. C.) 144, 163.
Drake v. Hudson River R. R. Co., 7
556
§ 678-§ 738] METHOD OF ADOPTION § 688
by very great informality. Indeed, it seems clear that like other
resolutions by-laws need not be written or reduced to writing,
but may rest in parol merely/ So, a custom or usage of the
company may have the force of a by-law.^ A fortiori, a written
Dy-law or code of by-laws which has been acted upon by the com-
pany for years will be the law of the company in spite of any de-
fect in its original adoption ; ^ and indeed the same rule applies
to English articles of association which, without signature by
the incorporators or formal adoption by special resolution, have
been acted on and recognized by the company for many years and
have even been amended from time to time by special resolution
formally adopted.* Still more clearly, a by-law which was de-
clared to be adopted and which has been acted upon by the
company for eleven years will be presumed to have received the
two-thirds vote which, by the company's incorporation paper,
was necessary for its adoption.' So, a book of by-laws which is
circulated among the members of a corporation as its regulations
is admissible in evidence as the by-laws of the company without
any proof of formal adoption.' Moreover, where the power of
enacting by-laws resides in the directors, it has been held that a
• Masonic, etc. Ass'n v. Severson, R. I. 308; 11 Am. Rep. 253; Union
71 Conn. 719; 43 Atl. 192 (amend- Bank v. RUgely, 1 H. & G. (Md.)
ment of by-law by parol unrecorded 324, 410-414; Frank v. Morrison,
resolution); Knights, etc. of Amer- 58 Md. 423, 438^39; Graebner v.
ica V. Weber, 101 111. App. 488. Post, 119 Wise. 392; 96 N. W. 783;
' MiUer v. Eschbach, 43 Md. 1; 100 Am. St. Rep. 890; Star Loan
-Muttud Fire Ins. Co. v. Farquhar, 86 Ass'n v. Moore (Del.), 55 Atl. 946;
Md. 668; 39 Atl. 527; Stafford v. 4 Penn. 308.
Produce Exchange Banking Co., 16 Cf. Myar v. Poe (Ark.), 95 S. W.
Oh. Circ. Ct. 50; Wain's Assignees 1005 (provision in articles of asso-
V. Bank of N. America, 8 S. & R. ciation held to be a by-law within
(Pa.) 73; 11 Am. Dec. 575; Walker the meaning of a statute),
v. Johnson, 17 App. (D. C.) 144, 161. * Ho Tung v. Manon Insurance
But see District Grand Lodge v. Co. (1902), A. C. 232. Cf. Muirhead
■Cohn, 20 111. App. 335, 344-345. v. Fcn-th, etc. Mutual Ins. Co. (1894),
As to custom having the effect of A. C. 72.
a by-law or regulation in the case of ° Marsh v. Mathias, 19 Utah
an English company incorporated 350 (headnote inadequate) ; 56 Pac.
imder the Companies Acts, see Ma^ 1074. For further illustrations of
rino's Case, 2 Ch. 596. this principle, see Hagerman v. Ohio
As to proof of custom, see Fire- Bldg., etc. Ass'n, 25 Oh. St. 186;
Mone V. First ■ Slavish, etc. Church, Morrison v. Dorsey, 48 Md. 461.
215 Pa. 8; 63 'Atl. 1038. 'Knights, etc. of America v.
. ' State v. Curtis, 9 Nev. 325; Weber, 101 111. App. 488.
Lockwood V. Mechanics Nat. Bank, 9
557
§ 689 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
mere contract entered into by the directors may have the force
of a by-law. '
§ 689. By-laws adopted before Incorporation. — Of course,
by-laws cannot be adopted prior to the incorporation of the com-
pany; and any by-laws so adopted are invalid.^ A special act
incorporating a voluntary association which provides that the
by-laws of the association shall be the by-laws of the corporation
until repealed or altered, does not, it has been held, impart
validity to any provisions in the by-laws which according to
general principles of law would be invalid, but merely dispenses
with the necessity of formal adoption by the corporation.^
§ 690. By-laws adopted in Foreign States. — It is generally
held that by-laws adopted in a state other than that by which
the company is incorporated are not binding.* This conclu-
sion is a necessary result of the commonly accepted doctrine
in respect to the validity of corporate action taken in a foreign
state, and is therefore fully treated in connection with the sub-
jects of meetings of shareholders and directors.
§ 691-§ 692. In whom Power of enacting By-laws resides.
§ 691. Whether the Power resides in the Shareholders or in the
Directors. — Generally, the power of enacting by-laws resides
in the shareholders at large and not in the directorate ; ^ and
this rule is not affected by a provision that " the stock, property,
affairs and business" shall be under the care of and managed
by the board of directors." When the power of enactment rests
' Hazlehurst v. Savannah, etc. Co., 56 Mo. App. 145; United Fire
R. R. Co., 43 Ga. 13, 53. Ass'n v. Benseman, 4 Wkly. Notes
' Vercoutere v. Golden State Land Cas. (Pa.) 1; Carroll v. Midlanphy
Co., lieCal. 410; 48 Pac. 375; Bos- Sav. Bank, 8 Mo. App. 249.
ton Acid Mfg. Co. v. Moring, 15 But see Heinzelman v. Druids
Gray (Mass.) 211, 214 (semble). Relief Ass'n, 38 Minn. 138; 36 N. W.
' Albers v. Merchants' Exchange, 100.
39 Mo. App. 963, 592, 596-597 (head- The adoption of a code of by-laws
note inadequate). by unanimous vote of all the share-
* Mitchell v. Vermont Copper holders is not, however, invalid be-
Mining Co., 40 N. Y. Sup. Ct. 406. cause they are also directors, and the
See infra, § 1212, § 1462. meeting at which the action is taken
' Morton Gravel Road Co. v. is called a meeting of directors.
Wysong, 51 Ind. 4; North Milwau- State Savings Ass'n v. Nixon^Jones
kee Town Site Co. v. Bishop, 103 Printing Co., 25 Mo. App. 642.
Wise. 492; 79 N. W. 785; 45 L. R. " North MUwaukee Town Site Co.
A. 174; Watson v. Woody Printing v. Bishop, 103 Wise. 492 (headnote
558
§ 678-§ 738] POWER of shaeeholders, etc. § 692
with the shareholders, the by-laws have the effect of binding
the directors ^ and all inferior agents, so that no action taken
in contravention of them can bind the company at least as against
any person having notice of the by-laws. Under some incor-
poration laws the power of enactment is expressly reposed in
the directors ; '■ and where this is the case, there is an end of
what little authority might otherwise attach to the by-laws.
For the same authority that enacts may also repeal or alter ^
or disregard * the by-laws ; and hence the by-laws do not re-
strain the company's own governing body, which it should be
the chief object of regulations to control. By-laws enacted by
the directors govern inferior agents and the individual share-
holders; but as to the directors themselves they amount to
nothing more than a declaration of a present intent to pursue
a given course. By a strange anomaly, where the power of
enacting by-laws is lodged with the directors, a by-law duly
adopted by the directors will prevail over a subsequent incon-
sistent resolution adopted by the shareholders in general meet-
ing assembled.^ Where the power of enacting by-laws resides
in the shareholders, perhaps, as will hereafter be shown, they
may delegate it to the directors ; but a provision in the by-laws
themselves that they may be amended by the directors does
not enable the directors to abrogate another by-law imposing
limitations on their powers.'
§ 692. Dual Power in both Shareholders and Directors. —
Indeed, a power of enacting by-laws may be vested without in-
compatibility both in the shareholders and in the directors.'
That is to say, even where the power of enacting by-laws is
lodged with the shareholders, the directors may always — in
inadequate); 79 N. W. 785; 45 L. » See infra, § 720.
R. A. 174. •• See infra, § 728.
' United Fire Ass'n v. Benseman, ' Granger v. Grubb, 7 Phila. (Pa.)
4 Wkly. Notes Cas. (Pa.) 1 ; Samud 350 (headnote inadequate). Cf.
V. HoUaday, 1 Woolw. 400, 408 Manufacturers' Exhibition Bldg. Co.
(semble); Fowler v. Great Southern v. Landay, 76 N. E. 146; 219 111.
Td., etc. Co., 104 La. 751 ; 29 So. 271. 168. But see infra, § 692.
' Hughes v. Wisconsin, etc. Ins. ° Stevens v. Davison, 18 Gratt.
Co., 98 Wise. 292; 73 N. W. 1015; (Va.) 819; 98 Am. Dec. 692.
People V. Sterling Mfg. Co., 82 111. ' Cf. Lovell v. Westwood, 2 Dow
457 (where the by-laws were adopted & CI. 21.
by a shareholders' meeting in which
aU the directors participated).
559
§ 692 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
subordination of course to the shareholders — make rules for
their own orderly action and for the government of the com-
pany's agents. By whatever name these rules may be called,
they are in their nature by-laws. Thus, in every corporation,
there would seem to be in reality a dual power of adopting by-
laws — a subordinate power in the directors,' and a controlling
power in the shareholders.^ Consequently, on principle, an ex-
press authority given to directors to enact by-laws should not
be held to oust the shareholders of their common law power
of adopting controUing regulations or by-laws for the corpora-
tion.^ So, a delegation of the power to enact by-laws by the
shareholders to a select body of the members would seem to
be unobjectionable ; ' for the members at large may at any time
revoke the authority and abrogate any regulations adopted by
the delegates. In any corporation, however, in which the power
to enact by-laws is not conferred upon the directors, no rules
or regulations that the directors may adopt will be deemed by-
laws within the meaning of statutes requiring certain things to
be done in accordance with the by-laws. Thus, where a statute
provides that such notice of calls shall be given as the by-laws
shall prescribe, a call is not enforceable of which notice was given
in accordance with a regulation adopted by the directors, no
rule on the subject having been prescribed by the shareholders.^
» Cf. Pfister V. Genvig, 122 Ind. " Cf. Stephenson v. Yokes, 27
667, 570-571 (headnote inadequate) ; Ont. 691. But see Granger v. Grvbb,
23 N. E. 1041 ; Heimelman v. Dru^ 7 Phila. (Pa.) 350 (headnote inad-
ids Rel. Ass'n, 38 Minn. 138; 36 equate).
N. W. 100; Albers v. Merchants' ' Cf. Lovell v. Westwood, 2 Dow
Exchange, 39 Mo. App. 583. & CI. 21; Stephenson v. Yokes, 27
But see Watson v. Woody Print- Ont. (Can.) 691.
iraff Co., 56 Mo. App. 145; Carroll -v. But see Manufacturers' Exhibi-
Mvllanphy Sav. Bank, 8 Mo. App. tion Bldg. Co. v. Landay, 76 N. E.
249; in which cases regulations 146; 219 111.168; Dunsmuir w.Col-
adopted by directors were held to onist Printing & Pub. Co., 9 Brit,
be utterly void. Columb. 290, 293 (semble).
See also Thayer v. Herrick, 23 * Cf. Stevens v. Damson, 18 Gratt.
Fed. Cas. 899, where a regulation (Va.) 819; 98 Am. Dec. 692 (where
adopted by directors prohibiting the by-laws adopted by the shareholders
officers from selling certain property purported to authorize the directors
of the company was pronounced to amend them),
void because the power of enacting See also Albers v. Merchants' Ex-
by-laws was vested in the sharehold- change, 39 Mo. App. 583 ; Griffing
ers. And compare Supreme Lodge v. Iron Co., 63 N. J. Law 168, 171 ; 41
Kutscher, 17Q m. SiiO; 53 N. E. 620; Atl. 931.
70 Am. St. Rep. 115. » North Milwaukee Town Site Co.
560
§ 678- § 738] WHAT BY-LAWS ARE VALID § 694
So, where a statute gives a turnpike company the power to adopt
by-laws fixing rates of tolls, a schedule of rates promulgated
by the directors is not binding on those who travel over the
company's road.' Moreover, where a statute provides that by-
laws adopted by the directors shall, unless confirmed by a
general meeting of the company, continue in force only until
the next annual meeting of the shareholders, a by-law adopted
by the directors fixing a quorum for shareholders' meetings
ceases to be effective after the next annual meeting unless it
be confirmed by affirmative action of the shareholders.^
§693-§715. WHAT BY-LAWS OR REGULATIONS
ARE VALID.
§ 693-§ 695. General Rules.
§ 693. By-laws void in Part. — A by-law which consists of
two or more distinct parts is not necessarily void in toto because
one part of it is invalid.* If, however, the bad portion is not
separable from the rest, the whole is void.*
§ 694. Void By-laws incorporated into Contracts. — A by-law
that is not valid because of some defect in its adoption, or for
illegality or unreasonableness, may nevertheless be incorporated
into a contract with the company and so, as to that particular
transaction, have the same effect as if it were valid.^ Thus,
where a code of by-laws which was adopted prior to the incor-
poration of the company and was therefore invalid contains
a provision that subscriptions to shares of the capital stock
should be payable in monthly instalments, a subscriber who
signs the by-laws thereby agrees to pay according to the pro-
vision therein contained." A reference in a contract to the by-
V. Bishop, 103 Wise. 492; 79 N. W. * State v. Curtis, 9 Nev. 325; Bex
785; 45 L. R. A. 174. v. Company of Fishermen, 8 T. R.
■ Morton Gravel Road Co. v. Wy- 352, 356 (semble).
song, 51 Ind. 4. ° Muirhead v. Forth, etc. Mutual
' Darrin v. Hoff, 99 Md. 491, Ins. Ass'n (1894), A. C. 72.
499-500; 58Atl. 196. Cf. Skdly v. Private Coachmen's,
' Amesbury v. Bowditch Mut. etc. Sqc, 13 Daly (N. Y.) 2.
Fire Ins. Co., 6 Gray (Mass.) 596; ' Vercoutere v. Golden State Land
Rex V. Company of Fishermen, 8 T. Co., 116 Cal. 410; 48 Pac. 375.
R. 352, 356 (semble). Cf. Pfister v. Gervng, 122 Ind.
VOL. I. — 36 561
§ 695 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
laws or regulations of the company may be construed to apply
to the regulations as amended by an amendment which was
never legally adopted.'
§ 695. Estoppel to deny Validity of By-laws. — Certain per-
sons or classes of persons may be estopped from questioning
the validity of by-laws that would be open to attack by anybody
who is free to assert the truth.^ For example, a shareholder
who participates in passing a by-law confiding to the share-
holders the power of levying calls instead of to the directors as
provided by statute is estopped from disputing the validity of
a call levied by a shareholders' meeting in pursuance of the by-
law.' So, the validity of a by-law providing for the forfeiture
of shares of deUnquent shareholders cannot be questioned by
oiie who although not shown to have been present when the
by-law was adopted yet in company with the other shareholders
acquiesced therein and accepted a share-certificate on which
the by-law was printed.* On the other hand, a shareholder who
votes in favor of a by-law prohibiting the transfer of shares
except under certain onerous conditions does not preclude him-
self or his transferee from treating the regulation as invalid if
he be minded to transfer his shares.^ Moreover, a shareholder
is not estopped from setting up the invalidity of a certain by-
law merely because he raised no objection to it until an attempt
was made to enforce it against him." The principle of the maxim,
allegans contraria non est avdiendus, may sometimes be invoked
to prevent a party from disputing the validity of a by-law upon
which he must rely in order to establish his title.'
567; 23 N. E. 1041; Fee v. Nat. V. S. Savings, etc. Co. y. Shain, 8 'N.
Masonic Accident Ass'n, 110 Iowa Dak. 136; 77 N. W. 1006; Blue Mt.
271 ; 81 N. W. 483. Forrest Ass'n v. Borrowe, 71 N. H.
» Muirhead v. Forth, etc. Mutual 69; 51 Atl. 670.
Ins. Ass'n (1894), A. C. 72 (a case ' Willamette Freighting Co. v.
relating to the articles of association Stannu^, 4 Oreg. 261.
of a British company). * Lesseps v. Architects' Co., 4 La.
2 Cf. Morrison v. Dorsey, 48 Md. Ann. 316.
461 ; Bergman v. St. Paul, etc. Bldg. * Re Klaus, 67 Wise. 401 ; 29
Ass'n, 29 Minn. 275, 280-281; 13 N. W. 582.
N. W. 120; Falcone v. Societa Sarti, ' Kolff v. St. Paul Fuel Ex-
61 N. Y. Supp. 873; People ex rd. change, 48 Minn. 215; SO N. W.
Wallace v. Stirling Mfg. Co., 82 111. 1036.
457; Reynolds v. Georgia State Bldg., ' Rex v. College of Physicians, 5
etc. Ass'n, 102 Ga. 126; 29 S. E. 187; Burr. 2740, 2760-2761.
562
§ 678-§ 738] WHAT BY-LAWS ABE VALID § 696
§ 696-§ 698. By-laws and Regvlations must be legal.
§ 696. Must not conflict with any Statute. — The first condi-
tion to the validity of internal regulations of a corporation either
in England or America is that they be legal, and do not conflict
with the provisions of the statute under which the company
is organized, or with any other statute that may be applicable.^
Thus, a provision in the regulations that a shareholder shall
not, except under certain conditions, exercise the right given
him by statute of applying for a winding-up is invalid.^ So, too,
a by-law providing that at annual meetings of the company any
business may be transacted whether specified in the notice of
the meeting or not cannot apply to a vote to increase the capital
of the company where a vote of that sort is required by statute
to be taken at a meeting called for the purpose.' Still more
clearly, a by-law purporting to absolve shareholders from their
statutory liability to creditors is void.* A by-law attempting
to authorize the company to enter into contracts which are be-
yond its powers as defined in its act of incorporation is of course
void.'' Moreover, by-laws must be in harmony with the general
statutes of the state. Hence, a by-law which provides for usuri-
ous interest upon advances to stockholders is void." A by-law
providing for a rate of interest which at the time was legal is
abrogated by a subsequent statute making so high a rate of in-
terest usurious.' Moreover, a provision in the regulations of
a company that the interest of a bankrupt shareholder should
not pass to his assignee in bankruptcy would contravene the
bankrupt act; but on the other hand a provision that the as-
signee in bankruptcy must sell the shares is not obnoxious to
' Great Falls, etc. Ins. .Co. v. ' Wells v. Black, 117 Cal. 157;
Harvey, 45 N. H. 292. Note, how- 48 Pac. 1090; 59 Am. St. Rep. 162;
ever, that a by-law waiving a privi- 37 L. R. A. 619.
lege conferred upon the corporation " AfCdrews v. Union Mutual Fire ■
by statute is valid. Dupuy v. East- Ins. Co., 37 Me. 256. As to by-laws
em Bldg., etc. Ass'n, 93 Va. 460; 25 for ultra vires purposes, see further
S. E. 537; 35 L. R. A. 215. infra, § 699-§ 701.
' PeverU Gold Mines (1898), 1 ° Herbert v. Kenton, etc. Ass'n,
Ch. 122. 74 Ky. 296; Martin v. Nashville
' Jones V. Concord & Montreal Bldg. Ass'n, 2 Coldw. (Tenn.) 418.
R. R. Co., 67 N. H. 119, 140-141 ' Mechanics, etc. Ass'n v. Dm--
(headnote inadequate) ; 38 Atl. 120. sey, 15 S. Car. 462.
563
§ 697 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
that objection.* In determining whether or not a by-law is in
conflict with a statute regard must be had to the purpose of the
statute; for in some cases the legislature may have intended the
statutory rule to apply only where the company's regulations
are silent on the subject.^
§ 697. Must not conflict with general Principles of Corporation
Law. — In like manner, regulations that are contrary to the
spirit of the incorporation statute or to the general principles
of corporation or company law — such as provisions purporting
to authorize the issue of shares at a discount,' or the payment
of dividends out of capital,* or the purchase by the company of
its own shares,^ or other return of capital to the shareholders * —
are void. Indeed, such by-laws are in conflict with the implied,
if not expressed, provisions of the incorporation act.
§ 698. Must not conflict with Common law. — So, also, by-
laws that are contrary to any rules of the common law, that have
not been abrogated by statutes, are illegal and void. Of course,
this proposition does not mean that any by-law is void which
lays down a rule different from that which would prevail if the
regulations were silent on the subject; for if that were the case
corporate regulations would never be legal except when super-
fluous.' The doctrine is rather that any by-law or other regula-
' Bm-land's Trustee v. Sted Broth- ' Welton v. Saffmy (1897), A. C.
ers & Co. (1901), 1 Ch. 279. 299. Cf. Union Savings Bank v.
' The circumstances under which Leiter, 145 Cal. 696; 79 Pac. 441.
a by-law is deemed to confiict with * Guinness v. Land Corporation,
the general law have been well stated 22 Ch. D. 349.
by Channell, J.: "A by-law is not ° Trevor v. Whitworth, 12 A. C.
repugnant to the general law merely 409.
because it creates a new offence, and ° Vercoutere v. Golden State Land
says that something shall be unlaw- Co., 116 Cal. 410; 48 Pac. 375.
ful which the law does not say is un- ' Said Lord Campbell in Edmonds
lawful. It is repugnant if it makes v. Company of Watermen & Lighter-
unlawful that which the general law men, 2i L. J. Magistrate Cases 124,
says is lawful. It is repugnant if it 128: "A by-law cannot be said to
expressly or by necessary impUca^ be inconsistent with the laws of this
tion professes to alter the general kingdom merely because it forbids
law of the land. . . . Again, a by- the doing of something which might
law is repugnant if it adds something lawfully have been done before, or
inconsistent with the provisions of a requires something to be done which
statute creating the same offence; there was no previous obligation to
but if it adds something not incon- do; otherwise a nominal power of
sistent, that is not sufficient to make making by-laws would be utterly
the by-law bad as repugnant." Gen- nugatory."
tel V. Baps (1902), 1 K. B. 160, 166.
564
§ 678-§ 738] WHAT BY-LAWS ARE VALID § 699
tion is void when the common law has not merely a different
rule but also a different policy.' That is to say, in order to strike
down a by-law or regulation as illegal, the law must not merely
establish a different rule but must, either expressly or by im-
plication from its general poUcy, provide that that different rule
shall apply not only when the regulations are silent on the sub-
ject, but even in spite of by-laws or regulations to the contrary.
Thus, although the common law does not permit shareholders
to vote by proxy, yet a by-law authorizing voting by proxy is,
according to the better view, quite valid.^ So, although the com-
mon law gives each member only one vote no matter how many
shares he may hold, yet a by-law allowing one vote for every
share owned by the voter is valid.^ On the other hand, a by-
law of a mutual benefit or insurance society attempting to ex-
clude the application of the principle of equitable estoppel so
as to prevent an estoppel to insist upon a forfeiture is void.*
§ 699- § 701. By-laws and Regulations must accord with the
Charter or Incorporation Paper.
§ 699. In general. — The next requirement is that the by-laws
or regulations shall be not merely consonant with law, but also
in the case of companies incorporated under a general law in
accordance with the company's incorporation paper,^ or in the
case of corporations created by royal charter, with the charter."
Thus, a regulation purporting to authorize an extension of the
company's business beyond the objects expressed or implied in
the incorporation paper is ineflBcacious.'' Of course, a by-law
which conflicts with an illegal and void provision of the incor-
poration paper is not by reason of that conflict rendered invalid.'
' PvZford V. Fire Dept., 31 Mich. Free Grammar School, 14 L. J. Q. B.
458, 466;' Goddard v. Merchants' 67; Rex v. Bumstead, 2 B. & Ad.
Exchange, 9 Mo. App. 290 (affirmed 699.
on opinion below in 78 Mo. 609). ' Ashbury By., etc. Co. v. Riche,
See also supra, p. 564, n. 1. L. R. 7 H. L. 653, 671 (headnote
" Infra, § 1252. inadequate).
' Infra, § 1216. Cf. Andrews v. Union Mutual
* Morgan v. Independent Order, Fire Ins. Co., 37 Me. 256.
etc. of Jacob (Miss.), 44 So. 791. » Booz's Appeal, 109 Pa. St. 592;
' Bergman v. St. Paul, etc. Bldg. 1 Atl. 36.
Ass'n, 29 Minn. 275; 13 N. W. 120.
" Regina ex rel. May v. Darlington
565
§ 700 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
§ 700. Must relate to Prosecution of Company's Objects or Busi-
ness. — Every by-law of a corporation must have for its object
the furtherance of the company's business or undertaking. An
industrial or business corporation has no right to legislate for
the spiritual health or moral welfare of the community at large,
or even of its own members.^ On this ground, a by-law of a
canal company prohibiting navigation on its waterway on Sunday
has been held void.^ Although no one will call in question the
principle of this decision, yet the application to that particular
case may well be deemed doubtful. Certainly, a mere private
industrial company may by its regulations prohibit the trans-
action of its business on Sunday, not indeed on religious or
moral grounds, but merely for the well-being of the corporation.'
If, therefore, the canal case is to be supported, it must be upon
the ground that a canal is a public highway, so that the right of
a company to regulate navigation thereon will be jealously re-
stricted within the narrowest limits. Of course, a corporation
which is formed for the purpose of promoting commercial integ-
rity among the members, such as the mediaeval guilds, or for the
purpose of encouraging morality or religion among its members,
may enact any by-laws reasonably adapted to the attainment of
those ends.* In every case, the question is whether the by-law
is germane to the purpose for which the company is formed.
To attempt to collate all the cases would, therefore, be both
profitless and impertinent.
§ 701. Whether express Power to enact By-laws for one Purpose
excludes implied Power to enact By-laws for other Purposes. —
There is an oft-cited dictum of Lord Macclesfield in an early
case that a provision in a company's charter conferring power to
' Kolff V. St. Paxil Fuel Exchange, * Warren v. Louisville Leaf, etc.
48 Minn. 215 (headnote inadequate) ; Co., 55 S. W. Rep. 912 (Ky.) ; People
50 N. W. 1036. V. Chicago Board of Trade, 45 111. 112 ;
" Colder Nav. Co. v. Pilling, 14 People ex rel. Thacher v. N. Y. Com-
M. & W. 76. A by-law of a chari- mercial Ass'n, 18 Abb. Pr. (N. Y.)
table society requiring members to 271 ; Dickenson v. Chamber of Conv-
receive the sacrament according to merce, 29 Wise. 45; 9 Am. Rep. 544;
the rites of the Roman Catholic Wood v. Chamber of Commerce, 119
Church is void. People ex rel. Wise. 367; 96 N. W. 835 (where
Schmitt V. Saint Franciscus Benev- the offence was committed outside
olent Society, 24 How. Pr. (N. Y.) the territorial jurisdiction of the
216 (headnote inadequate). corporation).
' Granger v. Grubb, 7 Phila. (Pa.)
350.
566
§ 678-§ 738] WHAT BY-LAWS ARE VALID § 702
enact by-laws for one purpose impliedly prohibits by-laws for
any other purpose.' But in that case, the power conferred was
to make by-laws for the management of the company's business,
and the by-law that was held invalid related to an ultra vires
and illegal enterprise. The case, therefore, decides merely that
power to enact by-laws for intra vires purposes forbids by im-
plication by-laws for ultra vires purposes — a proposition that
needs no argument in its support. Probably, the chancellor
intended to lay down no other or further proposition of law.
It is submitted that a power to enact by-laws for one intra vires
purpose does not prohibit by-laws for other intra vires objects.^
Indeed, as we have already shown, the power to enact by-laws
is little more than the power to prescribe a regular order or
course of action, instead of leaving each particular case to be
dealt with separately; and hence the power cannot well be
severed from the power of the corporation to act in respect to
any subject-matter. At all events, it is submitted that the maxim
expressio univ^ exclusio alterius should be very cautiously applied
where the effect is to abridge the company's power of making
by-laws or rules for its orderly government. The legislature
should be required to use express language if it desires to accom-
plish that object.
§ 702-§ 715. OF THE RULE THAT BY-LAWS MUST BE
REASONABLE.
§ 702. In general — As applied to By-laws and English Articles.
— From the earliest times, it has been laid down and held that
by-laws to be valid must be reasonable. In America this doc-
trine is constantly enforced by the courts with possibly too great
rigor. No instance has been found in which articles of associ-
ation of an English company that were consistent with law and
with the terms of the memorandum have been held invalid dis-
tinctly on the mere ground of unreasonableness. Yet it is not
' Ch-ild V. Hudson's Bay Co., 2 where other reasons were assigned
P. Wms. 207, 209. Accord : Ireland for the invalidity of the same by-
V. Globe Mining Co., 19 R. I. 180; law); State v. Ferguson, 33 N. H.
32 Atl. 921; 61 Am. St. Rep. 756; 424, 430-431 (municipal ordinances).
29 L. R. A. 429 (with which compare ^ People's Home Sav. Bank v.
Ireland v. Globe Milling Co., 21 R. I. Sadler (Cal.), 81 Pac. 1029.
9; 41 Atl. 258; 79 Am. St. Rep. 769;
567
§ 702 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
to be doubted that in a clear case an English court would apply
the doctrine to articles of association.' Of course, as already
more than once stated, the greater formality of Enghsh articles
of association protects from the imputation of unreasonableness
many provisions that in mere unrecorded by-laws would be open
to that objection. Moreover, inasmuch as the original articles
of a British company are prepared and recorded contempora-
neously with the memorandum of association, every subscriber
to shares has knowledge, or the opportunity of knowledge, of
their terms, and consequently cannot with much grace complain
that although legal they are unreasonable and so void. Then,
too, the British courts, with a disposition to adhere closely to the
phraseology of the particular statute in question without regard-
ing the act as a mere part of the historical development of cor-
poration law, may be unduly influenced by the fact that their
statute confers in unlimited terms the power of enacting articles
of association.
In a recent case, Lindley, M. R., said, "Wide, however, as
the language of s. 50 is" — the section of the Companies Act
which confers the power of altering the articles of association —
"the power conferred by it must, like all other powers, be exer-
cised subject to those general principles of law and equity which
are applicable to all powers conferred on majorities, and enabling
them to bind minorities. It must be exercised, not only in the
manner required by law, but also bona fide for the benefit of the
company as a whole, and it must not be exceeded. These con-
ditions are always implied and are seldom, if ever, expressed.
But if they are compUed with, I can discover no ground for
judicially putting any other restrictions on the power conferred
by the section than are contained in it." ^
However, an article declaring that if any member of the com-
pany should commence or threaten any legal proceedings against
the company his shares should be liable to forfeiture has been
held invalid.' And an article that is adopted for a fraudulent
purpose is void.^ So, it has been thought that an article varying
' Cf. Mineral Water Bottle, etc. ' Allen v. Gold Reefs of West
Soc. V. Booth, 36 Ch. D. 465 (where Africa (1900), 1 Ch. 656, 671.
a provision in articles of association ' Hope International Financial
in unreasonable restraint of trade Soc, 4 Ch. D. 327.
was held void). ' Clarke & Helden's Case, 37 L. T
222.
568
§ 678- § 738] WHAT BY-LAWS ARE VALID § 705
the liability of the several shareholders on their respective shares
without their consent, increasing that of some and diminishing
that of others, would be void.'
§ 703. By-laws presumptively reasonable. — It is unnecessary
to consider what by-laws are reasonable, but rather to inquire
what are unreasonable. Any by-law that is not in conflict with
any statute or with the company's charter or incorporation
paper, is presumptively valid; and the burden of showing its
unreasonableness rests upon the party who challenges its
validity.^
§ 704. Legal Standard of Reasonableness. — Before consid-
ering in detail certain groups or classes of unreasonable and
consequently invalid by-laws the legal rule or standard of reason-
ableness should be clearly understood. "In order to avoid a
by-law upon the ground of its being unreasonable because of
some inconvenience that may result from it, it should appear to
be a probable inconvenience; for one can hardly predicate, of
any law, that some possible inconvenience may not result from
it." ^ Moreover, "the long continuance of a by-law, though it
would not legalize it if it were in itself illegal, is fair evidence
to show that there is no intrinsic inconvenience in it." ^ The
question whether or not a by-law is unreasonable is, in actions
at law, for the court and not the jury.^
§ 705-§ 711. BY-LAWS IN RESTRAINT OF TRADE OR ALIENATION.
§ 705. In general. — One of the most ancient grounds for
declaring a by-law to be unreasonable and void is that it operates
in unreasonable restraint of trade or alienation.^ The rule in
reference to by-laws restraining trade or alienation is the same
' Teasdale's Case, 9 Ch. 54, 59 350, 351 (headnote inadequate) ; Hi-
(semble). hernia Fire, etc. Co. v. Common-
' Granger v. Grubb, 7 Phila. (Pa.) wealth ex rel. Harrison, 93 Pa. St.
350, 354 (headnote inadequate) ; 264 ; Master & Company of Frame-
Hibernia Fire, etc. Co. v. Common- workers v. Green, 1 Ld. Raym'd 113,
wealth ex rel. Harrison, 93 Pa. St. 114 (headnote inadequate).
264. Cf. State v. Overton, 24 N'. J. Law
3 iJex V. AstoeH, 12 East 22, 28- 435, 440-442; 61 Am. Dec. 671;
29 (per Lord Ellenborough, C. J.). Morris, etc. R. R. Co. v. Ayres, 39
* Rex V. Ashwell, 12 East 22, 29 N. J. Law 393; Compton v. Van
(per Lord Ellenborough, C. J.), 32- Volkenburgh, 34 N. J. Law 134.
33 (per Bayley, J.). " Cf. Ipswich Taylors' Case, 11
= Granger v. Grubb, 7' Phila. (Pa.) Coke 53.
569
§ 706 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
as the rule in respect to contracts having a similar effect. That
is to say, a by-law is not void merely because its enforcement
will result in restraint of trade ; in addition to this, the restraint
of trade must be unreasonable. For this reason. Lord Kenyon
thought that a by-law of a company of fishermen forbidding any
member from carrying on trade on his own account in competi-
tion with the company would be valid.' But any by-law the
effect of which is restraint of trade is 'prima facie void, and
therefore cannot be enforced unless the party relying upon it
establishes affirmatively the reasonableness of the restraint. For
this reason, a by-law of a guild of gunmakers of London pro-
hibiting its members from selling guns to non-members within
the city, or from stamping their marks on wares manufactured
by non-members, was declared void.^ For the same reason, a
by-law of a guild of coopers forbidding any member to have
more than one apprentice is invalid.^ So a regulation of an asso-
ciation of manufacturers providing that no member should
employ a servant who had left the service of another member
is void.*
§ 706- § 711. By-laws restricting Transferability of Shares.
§ 706. In general. — In these latter days, although the at-
tempts of corporations to restrain trade are certainly not less
frequent than in former times, yet the object is sought to be
accomphshed in different ways from those which the cases
above cited show to have been employed in former times. The
same principles of law, however, apply. The most frequent
application of these principles to the by-laws of modern incor-
porated companies is in cases of attempts to restrict the free
transferability of the shares. Many by-laws having such an
' Rex v. Company of Fishermm, Press, 136 N. Y. 333; 32 N. E. 981;
8 T. R. 352. Qucere whether this 32 Am. St. Rep. 741 (upholding a
dictum is law with respect to modem by-law of a news-gathering associa-
incorporated joint-stock companies, tion forbidding members to print
^ Master, etc. of Gunmakers v. news collected by rival organiza-
Fell, Willes 384. tions.
Cf. People ex rd. Mcllhany v. ' Bex v. Wardens of Coopers' Co.,
Chicago Live Stock Exchange, 170 7 T. R. 543.
111. 556; 48 N. E. 1062; 62 Am. St. « Mineral Water BotCle, etc. Soc.
Rep. 404; 39 L. R. A. 373. v. Booth, 36 Ch. D. 465.
But cf. Matthews v. Associated
570
§ 678-§ 738]
WHAT BY-LAWS ARE VALID
706
object have been relentlessly stricken down. Thus, a by-law
restricting the right of shareholders to alienate their shares, by
providing that any one desiring to sell shall first notify the com-
pany of the price he can obtain, at which price the other share-
holders or the company shall have the option of purchasing,
has been held void.' A fortiori, it has been held that a by-law
forbidding a transfer of shares without the consent of all the
shareholders or of the directors is void ; ^ and the same is true of
a by-law limiting the number of shares which any one person
may hold.' The same has been held of a by-law purporting to
give the company a lien on its shares for all debts of the
holders, and to forbid any transfer until such indebtedness is
paid ; ' although, according to the weight of authority, such a
' Victor G. Bloede Co. v. Bloede,
84 Md. 129; 34 Atl. 1127; 57 Am.
St. Rep. 373; 33 L. R. A. 107; Ire-
land V. Globe Milling Co., 21 R. I.
9; 41 Atl. 258; 79 Am. St. Rep. 769 ;
Trust & Savings Co. v. Home Lumber
Co., 118 Mo. 447; 24 S. W. 129.
But cf. Pfister v. Gerwig, 122 Ind.
567; 23 N. E. 1041; Blue Mt. For-
rest Ass'n V. Borrowe, 71 N. H. 69;
51 Atl. 670; Barrett v. King, 63
N. E. 934; 181 Mass. 476.
" In re Klaus, 67 Wise. 401 ; 29
N. W. 582; MUler v. Farmers' Mill-
ing, etc. Co. (Nebr.), 110 N. W. 995.
Farrrters', etc. Bank v. Wasson, 48
Iowa 336; 30 Am. Rep. 398; Im^
perial Starch Co., 10 Ont. L. R. 22.
Cf. Herring v. Ruskin, etc. Ass'n,
52 S. W. Rep. 327 (Temi.) ; McNvlta
V. Corn Belt Bank 164 III. 427, 447;
45 N. E. 954; 56 Am. St. Rep. 203;
Sargent v. Franklin Ins. Co., 8 Pick.
(Mass.) 90; 19 Am. Dec. 306.
' Miller v. Farmers' Milling, etc.
Co. (Nebr.), 110 N. W. 995; O'Brien
V. Cummings, 13 Mo. App. 197. Cf.
Richardson v. Devine (Mass.), ^79
N. E. 771.
* Driscoll V. West Bradley, etc. Co.,
59 N. Y. 96; Kinnan v. Svllivan
County Club, 26 N. Y. App. Div. 213;
50 N. Y. Supp. 95; Trust & Savings
Co. V. Home Lumber Co., 118 Mo.
447; 24S. W. 129; Bank of Atchison
Co. V. Durfee, 118 Mo. 431; 24 S. W.
133; 40 Am. St. Rep. 396; Bank of
Holly Springs v. Pinson, 58 Miss.
421; 38 Am. Rep. 330; Rosenback
V. Salt Springs Nat. Bank, 53 Barb.
(N. Y.)495; New Orleans Nat. Bank-
ing Ass'n V. Wiltz, 10 Fed. 330 (head-
note inadequate).
Cf. Feckheimer v. Nat. Exchange
Bank, 79 Va. 80.
But see Lockwood v. Mechanics
Nat. Bank, 9 R. I. 308; 11 Am. Rep.
253; Wain's Assignees v. Bank of
N. Am., 8 S. & R. (Pa.) 73; 11 Am.
Dec. 575 (where the lien was estab-
lished,by usage equivalent to a by-
law) ; Cunningham v. Ala. Life Ins.,
etc. Co., 4 Ala. 652; Re Bachman, 2
Fed. Gas. 310; Geyer v. Western Ins.
Co., 3 Pittsburg (Pa.) 41; Young \.
Vcmgh, 23 N. J. Eq. 325 ; ChUd v.
Hudson's Bay Co., 2 P. Wms. 207;
McDowell V. Bank of Wilmington, 1
Harr. (Del.) 27; Knight v. Old Nat.
Bank, 3 Cliff. 429; Wetherell v.
Thirty-first Street, etc. Ass'n, 153 111.
361; 39 N. E. 143; Re Bachman, 2
Cent. L. J. 119.
As to a by-law purporting to give
the company a lien where by statute
loans on security of the company's
own shares are forbidden, see Evan-
ville Nat. Bank v. Metropolitan Nat.
Bank, 2 Biss. 527; Buffalo German
Ins. Co. V. Third Nat. Bank, 162
571
§ 707 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
by-law is valid except as against purchasers of shares without
notice of the regulation,' being effective even as against
attaching creditors of the shareholder.^ A by-law providing
that upon the death of a shareholder his shares shall be pur-
chased by the company has been held valid ; ' but according to
the principles generally established in the United States it would
seem necessarily to follow that such a by-law should be held
void,* even apart from the objection that it contemplates an
unauthorized reduction of capital.
§ 707! EfEect of Agreement of Shareholder to abide by a By-law
restricting his Right of AUenation. — A shareholder may agree to
be bound by by-laws which impose restrictions on his power of
alienating his shares and which might apart from such agreement
be held null and void. For instance, a person who subscribes
for shares, with knowledge of a by-law providing that any share-
holder desirous of selling his shares, or the executor of any
deceased shareholder, shall sell the shares to the company at a
valuation to be placed thereon by the directors and who accepts
a share-certificate upon which that by-law is indorsed, is taken
to agree to be bound thereby; and consequently, whether or
N. Y. 163; 56 N. E. 521 ; 48 L. R. v. Long Island Bank, 83 Hun (N. Y.)
A. 107, affirmed in Third Nat. Bank 92; 31 N. Y. Supp. 406; TuMe v.
V. Buffalo German Ins. Co., 193 U. S. Walton, 1 Ga. 43; Young v. Vough,
581; 24 Sup. Ct. 524 (where the 23 N. J. Eq. 325; Pendergast v.
by-law although embodied in the Bank of Stockton, 2 Sa,wy. 108; Bank
share-certificate was held inopera- of Cvlloden v. Bank of Forsyth, 120
tive more on account of the supposed Ga. 575; 48 S. E. 226; 102 Am. St.
policy of the law favoring the alien- Rep. 115; McKain and Canadian
ability of shares than on account of Birbeck, etc. Co., 7 Ont. L. R. 241
the express provision in the National (headnote inadequate).
Bank Act prohibiting loans on secur- Cf. Anglo-Calif ornian Bank v.
ity of the bank's own shares) ; Nicol- Granger's Bank, 63 Cal. 359 ; Tete v.
let Nat. Bank v. City Bank, 38 Farmers', etc. Bank, 4 Brewst. (Pa.)
Minn. 85; 35 N. W. 577; 8 Am. St.. 308; Costdlo v. Portsmouth Brewing
Rep. 643; Delaware, etc. R. R. Co. Co., 69 N. H. 405; 43 Atl. 640;
v. Oxford Iron Co., 38 N. J. Eq. McDowell v. Bank of Wilmington, 1
340; Bank v. Lanier, 11 Wall. 369; Har. (Del.) 27; Jv^t v. State Bank,
BuUard v. Bank, 18 Wall. 589; Van.- 94 N. W. 200; 132 Mich. 600.
sands v. Middlesex County Bank, 26 *" Farmers', etc. Bank v. Haney, 87
Conn. 144 ; Knight v. Old Nat. Iowa 101 ; 54 N. W. 61. See infra,
Bank, 3 Chff. 429, 437; Bridges v. § 956.
Nat. Bank of Troy, 185 N. Y. 146. ^ Howe Grain & Mercantile Co. v.
' Grafflin Co. v. Woodside, 87 Jmes, 21 Tex. Civ. App. 198; 51
Md. 146; 39 Atl. 413 (semble); S. W. 24.
Branson Electric Co. v. Rheubottom, * Herring v. Ruskin Co-op. Ass'n,
122 Mich. 608; 81 N. W. 563; Gibbs 52 S. W. Rep. 327 (Tenn.).
572
§ 678- § 738] WHAT BY-LAWS ABE VALID § 708
not the by-law would prop-io vigore be operative, an executor of
a deceased shareholder may be compelled by a court of equity
to assign his shares to the company at the valuation placed
thereon by the directors.* Moreover, if a shareholder is bound
in this way by a contract or agreement to recognize and abide
by restrictions upon his power of alienation sought to be imposed
by the by-law, any transferee taking with notice is subject to
the same restriction ; ^ though the rule is otherwise where he had
no notice thereof.^ Similarly, if a shareholder with knowledge
of a by-law purporting to give the company a lien on its shares
for debts due from the holders borrows money from the company,
he will be deemed to pledge his shares to secure the debt whether
the by-law be valid or not ; and any transferee from the debtor
would likewise be bound by the lien unless he be a bona fde
purchaser for value.*
§ 708. Effect of accepting Share-Certificate referring to the By-
law. — According to some authorities, the mere fact that a by-
law purporting to restrict transfers is indorsed on a share-cer-
tificate gives it no additional validity ; ^ but according to other
cases, the acceptance of such a certificate in itself amounts to a
' New England Trust Co. v. Ab- be an "undesirable associate'' should
bott, 162 Mass. 148; 38 N. E. 432; 27 have the right to take his shares at
L. R. A. 271. The opinion of the their cash value) ; Williams v. Mont-
court, which of course assumes that gomery, 148 N. Y. 519; 43 N. E. 57
the company has power to acquire (enforcing a contract between share-
its own' shares, is characterized by a holders not to sell their shares for
breadth of view to which few of our six months),
courts have attained. ' Bank of Atchison Co. v. Durfee,
Cf. Bliie Mt. Forrest Ass'n v. 118 Mo. 431, 445-447; 24S. W. 133;
Borrowe, 71 N. H. 69; 51 Atl. 670; 40 Am. St. Rep. 396; Jennings v.
BosweU V. Buhl, 213 Pa. 450; 63 Bank of California, 79 Cal. 323; 21
Atl. 56 (upholding an express con- Pac. 852; 12 Am. St. Rep. 145; 5
tract between shareholders whereby L. R. A. 233.
any shareholder desiring to sell his ' Ireland v. Olobe Milling Co., 21
shares agreed to offer them to the R.I. 9; 41 Atl. 258; 79Am. St. Rep.
other shareholders at a price to be 769.
determined by a majority of the * Grafjlin Co. v. Woodside, 87 Md.
stock); Lindsay's Estate, 210 Pa. 146; 39 Atl. 413; Jennings v. Bank
224; 59 Atl. 1074 (similar point as of California, 79 Cal. 323; 21 Pac.
last case); Fitzsimmons v. Lindsay, 852; 12 Am. St. Rep. 145; 5L. R. A.
205 Pa. 79; 54 Atl. 488 (similar 233.
point); Boggs v. Boggs & BuM. ° Herring v. Buskin, etc. Ass'n,
(Pa.), 66 Atl. 105 (specifically en- 52 S. W. Rep. 327 (Tenn.); Third
forcing an express contract whereby Nat. Bank v. Buffalo German Ins.
the majority of the shareholders Co., 193 U. S. 581; 24 Sup. Ct. 624.
upon deciding a fellow member to
573
§ 709 BY-LAWS ANB INTERNAL REGULATIONS [ChAP. XII
valid contract on the part of the holder to be bound by the
restriction.^ Necessarily such indorsement gives notice of the
restriction to every transferee of the certificate,^ and we have
seen above that such notice may be material. Indeed, a mere
reference in a share-certificate to articles of association subject
to which the shares are held but the terms of which are not stated
has been held sufiicient notice to put a purchaser upon inquiry.^
If by-laws which purport to give the company a lien on its shares
for debts of the holder provide that notice of the lien shall be
endorsed on the share-certificate, a failure to insert such a provi-
sion in a certificate amounts to a waiver of the lien on the shares
represented thereby, even if the by-law attempting to create the
lien be valid.*
§ 709. Observations on unfortunate Condition of American Law
in Respect to these Matters. — Decisions striking down as in-
valid by-laws which qualify somewhat the otherwise unrestricted
right of a shareholder to alienate his shares present a most forcible
illustration of the unsatisfactory character of the informal Ameri-
can by-laws. In view of the informal nature of by-laws, no
different results, except in some cases, could have been reached
by the courts without injustice.^ But, certainly, the law is in an
' Stafford v. Produce Exchange Warren County Bank, 97 Iowa 204;
Banking Co., 61 Oh. St. 160; 55 mN.W. 15i; McKainandCanadian
N. E. 162; 76 Am. St. Rep. 371; Birbeck, etc. Co., 7 Ont. L. R. 241
Jennings v. Bank of California, 79 (where a statement in the certificate
Cal. 323; 21 Pac. 852; 12 Am. St. that the shares were held subject to
Rep. 145; 5 L. R. A. 233; Morrison^- the "articles" was held not to give
Wentworth Bank v. Kerdolff, 75 Mo. notice of a by-law giving the com-
App. 297. pany a lien).
Cf. Vansands v. Middlesex County * Bank of Holly Springs v. Pirir-
Bank, 26 Conn. 144; Reynolds \. sora, 58 Miss. 421; 38 Am. Rep. 330 ;
Bank of Mi. Vernon, 6 N. Y. App. Trust & Savings Co. v. Home Lumber
Div. 62; 39 N. Y. Supp. 623 Co., 118 Mo. 447, 460-461; 24 S. W.
(affirmed short in 158 N. Y. 740; 53 129.
N. E. 1131). ' Cf. McKain and Canadian Bir-
' State Savii}gs Ass'n v. Nixon^ beck, etc. Co., 7 Ont. L. R. 241
Tories Printi/!^ Co., 25 Mo. App. 642; (distinguishing between unrecorded
Buffalo German Ins. Co. v. Third by-laws and recorded "articles" of
Nat. Bank, 19 N. Y. Misc. 664; 43 English companies). As to the dis-
N. Y. Supp. 550; Bank of CvUoden tinction in respect to this matter
V. Bank of Forsyth, 120 Ga. 675 ; 48 between provisions contained in the
S. E. 226; 102 Am. St. Rep. 115. recorded constitution of the com-
^ Gibbs V. Long Island Bank, 83 pany and similar provisions con-
Hun (N. Y.) 92; 31 N. Y. Supp. 406. tained in mere by-laws, see Mohawk
Cf. Des Moines Nat. Bank v. Nat. Bank v. Schenectady Bank, 78
674
§ 678-§ 738] WHAT BY-LAWS ARE VALID § 710
unfortunate state if the organizers of a corporation cannot restrict
the right of members to transfer their shares, — cannot create a
"close corporation." In England, the validity of articles of
association having that effect has been uniformly assumed. In-
deed, a whole class of English companies — so-called "private
companies" — are formed on this principle. This elasticity of
the British law permits of the formation of family corporations
and other companies whose shares are not intended for public
subscription and which are in reality merely private partnerships
authorized by law to enjoy the privilege of doing business under
the corporate form. Moreover, in England, an article of associa-
tion requiring certain shareholders to sell their shares to other
members of the company upon demand at not more than their
par value is valid ; ' and a similar article has been recently sus-
tained in Ireland.^ Although the law ought not, perhaps, to
permit a corporation by altering its by-laws or regulations to
take away a previously vested freedom of alienating the shares,
upon the faith of which the existing shareholders may have
acquired their shares — for a by-law having such a retroactive
effect may well be held unreasonable — yet surely no harm could
result from permitting the organizers of a corporation to insert
in the original constitution of the company provisions determin-
ing under what restrictions the shares shall be transferable.
§ 710. Rule against Perpetuities not applicable to By-laws or
Regulations restricting Transfers of Shares. — Regulations restrict-
ing the transferability of shares, although perhaps bad as creating
an unreasonable restraint of trade, are not obnoxious to the rule
against perpetuities. Thus, a provision that at any time during
the continuance of the company any shareholder who should not
be a "manager or assistant" might be compelled by the company
to transfer his shares to a "manager or assistant" for not more
than their nominal value as ascertained by a process of calcula-
tion does not create a perpetuity, although the right to call for
a transfer might be exercised at any indefinite time, however dis-
tant, in the future.' A share in the capital of a company cannot
Hun (N. Y.) 90, 91 ; 28 N. Y. Supp. ■ Borland's Trustee v. Steel Broth-
1100; Bank of Attica v. Manu- ers & Co. (1901), 1 Ch. 279.
facturers', etc. Bank, 20 N. Y. 501. ' Attorney-General v. Jameson
Cf. Blue Mt. Forrest Ass'n v. Bor- (1904), 2 Jr. 644.
rowe, 71 N. H. 69; 51 Atl. 670. See ' Borland's Trustee v. Sted Broth-
also supra, § 122. ers & Co. (1901), 1 Ch. 279; Attorney-
575
§ 711 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
be likened to a sum of money settled upon executory limitations,
but consists rather in a bundle of mutual agreements entered
into between the several shareholders; and the rule against
perpetuities has no reference to personal contracts or agreements.
Consequently, the validity of this class of by-laws is not to be
judged by the hard and fast rule against perpetuities, but by the
more elastic standard of reasonableness.
§ 711. By-laws merely regulating Transfers valid. — The con-
siderations which have led many American courts to pronounce
against the validity of by-laws which interdict or to any consid-
erable degree restrict transfers of shares have no applications
to by-laws which merely prescribe a particular mode of transfer
and do not substantially abridge freedom of alienation. For
instance, a by-law is valid which requires all transfers to be signed
in the presence of an officer of the company or of two witnesses,'
or which requires the transferor's share-certificate (unless proved
to have been lost or stolen) to be surrendered before the trans-
feree can be registered as a shareholder.^ So, a regulation re-
quiring a small fee to be paid to the company before a transfer
shall be registered has been thought reasonable.'
§ 712. By-laws attempting to restrict Right to resort to the
Courts. — In general, a by-law attempting to impair the right
of a shareholder to resort to the courts for redress in any case
properly cognizable by the judiciary is void.* To be sure, where
General v. Jameson (1904), 2 Ir. 644. that the corporation in this case was
Cf. Blue Mt. Forrest Ass'n v. Bm-- a British Company and therefore
rowe, 71 N. H. 69; 51 Atl. 670 (up- governed by British law, as to which
holding a by-law forbidding sales see supra, § 709.)
of shares without first offering them * Cf. Hope v. Internaiional Fi-
to the company at the price offered nancial Soc, 4 Ch. D. 327 (stated
by the purchaser) ; Gray on Perpe- supra, § 702) ; Daniher v. Orand
tuities, 2d ed., § 329 note (question- Lodge, 10 Utah 110; 37 Pac. 245;
ing Borland's Trustee v. Sted State ex rel. Kennedy v. Union Mer-
Brothers & Co., ubi supra). chants' Exchange, 2 Mo. App. 96;
' Dane v. Young, 61 Me. 160. People ex rel. Elliott v. N. Y. Cotton
''State ex rel. Martin v. New Exchange, 8 Unn (N.Y.) 216; Bauer
Orleans, etc. R. R. Co., 30 La. Ann. v. Samson Lodge, 102 Ind. 262; 1
308. N. E. 571; McMahon v. Supreme
' Oiesen v. London, etc. Mgr. Co., Tent, 151 Mo. 522; 62 S. W. 384;
102 Fed. 584; 42 C. C. A. 515. (Note Voluntary Relief Dept. v. Spencer, 17
576
§ 678-§ 738] WHAT BY-LAWS ARE VALID § 712
the by-laws of a "beneficial society," or any similar organization,
provide that all claims of members for "weekly benefits," and
so forth, shall be submitted to a court or oSicer of the corporation,
whose decision shall be final, it is held that a court of law has
no jurisdiction to enforce a claim for "weekly benefits" or the
like which has been adversely passed upon by the corporation
court. ^ But such provisions do not and cannot apply where' the
point at issue is whether or not a certain person is a member of
the company.^ Moreover, in order that any case should be gov-
erned by such a provision, the proper corporate officer must have
passed upon the matter in a quasi-judicial capacity and not
merely in the regular course of his duties as an administrative
officer of the corporation without any hearing before him.^ Of
course, as the decision of the highest court in the land may be
stricken down for fraud, so the fraudulent decision of a corporate
tribunal cannot be made effective by any by-law or internal
regulation.* By-laws requiring all actions by members against
the corporation to be brought within a certain time after the
accrual of the cause of action have been held valid in the case
of mutual insurance companies.^
Ind. App. 123, 128; 46 N. E. 477; way Pass., etc. Ass'n, 31 Fed. 62;
Brotherhood of Railroad Trainmen Bryant v. D. C. Dental Soc, 26 App.
v. Newton, 79 111. App. 500. D. C. 461 (action of semi-social so-
Quaere, as to the validity of a ciety in expelling member in accord-
provision that any action by a share- ance with by-laws not reviewable by
holder against the company shall be the courts).
brought in a particular court. Hes- Cf. Russell v. North American
lin V. Eastern Bldg., etc. Ass'n, 28 Benefit Ass'n, 116 Mich. 699; 75
N. Y. Misc. 376; 59 N. Y. Supp. 572; N. W. 137; Brotherhood of Railroad
Nute V. Hamilton Mut. Fire Ins. Co., Trainmen v. Newton, 79 111. App.
6 Gray (Mass.) 174; Amesbury v. 500; Black & White Smiths' Soc. v.
Bmuditch Mut. Fire Ins. Co., 6 Gray Vandyke, 2 Whart. (Pa.) 309; 30
(Mass.) 596. Am. Dec. 263; Union Fraternal
^ Anacostia Tribe v. Murdoch, 13 League v. Johnston, 124 Ga. 902;
Md. 91; 71 Am. Dec. 625; Burling- 53 S. E. 241.
ton Voluntary Relief Dept. v. White, ' Burlington Voluntary Relief
41 Nebr. 547, 560; 59 N. W. 747; Dept. v. White, 41 Nebr. 547, 559-
43 Am. St. Rep. 701 (semble); Van 560; 59 N. W. 747; 43 Am. St. Rep.
Poucke V. Netherland, etc. Society, 63 701.
Mich. 378; 29 N. W. 863; Canfield ' Burlington Voluntary Relief
V. Knights of Maccabees, 87 Mich. Dept. v. White, 41 Nebr. 547, 559-
626 ; 49 N. W. 875 ; 24 Am: St. Rep. 560 ; 59 N. W. 747 ; ' 43 Am. St. Rep.
186; 13 L. R. A. 625; Raymond v. 701.
Farmers, etc. Ins. Co., 114 Mich. 386; * Triesler v. Wilson, 89 Md. 169;
72 N. W. 254; Osceola Tribe v. 42 Atl. 926. Cf. infra, § 713.
Schmidt, 57 Md. 98; Rood v. Rail- * Amesbury v. Bowditch Mut.
Vol. I.— 37 577
§ 713 BY-LAWS AND INTERNAL EEGULATIONS [ChAP. XII
§ 713. By-laws attempting to bind Minority to Fraudulent or
tJltra Vires Acts of Majority. — A by-law providing that any
contract approved by a majority of the shareholders at a general
meeting shall bind the company and all the shareholders as
though approved by each and all of them cannot be invoked to
prevent a minority shareholder from attacking an vltra vires or
fraudulent contract authorized by the majority of the share-
holders.^ So, a by-law cannot prevent a shareholder from ob-
jecting to fraudulent action on the part of the officers or majority
shareholders.^
§ 714. Retroactive By-laws. — No rigid rule of law pro-
hibits retroactive by-laws or by-laws impairing vested rights.'
Thus, it seems that a by-law may give to a corporation a lien on
its shares for debts that are due from shareholders at the time
of its adoption.* Nevertheless, in the United States a retrospec-
tive by-law, or by-law impairing vested rights, will, to say the
least, be looked upon with suspicion ; ^ and every by-law the
phraseology of which admits of any doubt will be construed as
prospective merely." Certainly, retrospective by-laws would be
in many cases unjust, and therefore unreasonable and void.'
Thus, a by-law purporting to give the company a lien on its
shares for debts owing by the holders cannot affect the rights
of a transferee of shares claiming under a transfer which before
the enactment of the by-law had been executed but not entered
Fire Ins. Co., 6 Gray (Mass.) 596; Soc, 82 Cal. 557, 560-561; 22 Pac.
2 May on Insurance, 4th ed., 1125.
§ 478. ■* Cf. AUen v. Gold Reefs of West
But cf. Mviual Accident, etc. Africa (1900), 1 Ch. 656. But see
Ass'n V. Kayser (Pa.), 14 Wkly. Steamship Dock Co. v. Heron's
Notes Cas. 86 (holding that the by- Adm'x, 52 Pa. St. 280.
law is inoperative unless embodied " Cf. Pvlford v. Fire Dept., 31
in the policy). Mich. 458 ("Bxposi/acto laws are no
' Hodge v. Untied States Steel more lawful for corporations than
Ccn-p., 64 N. J. Eq. 807, 813-818; for states").
54 Atl. 1; 60 L. R. A. 742 « Brotherhood of Railroad Train-
(semble). rnen v. Newton, 79 111. App. 500. See
2 Triesler v. Wilson, 89 Md. 169; infra, § 731.
42 Atl. 926. ' Lloyd v. Supreme Lodge, 98
» a. Pepe V. CUy, etc. Bldg. Soc. Fed. 66; 38 C. C. A. 654; Graft-
(1893), 2 Ch. 311; Smtihw. Galloway strom v. Frost Council, 19 N. Y.
(1898), 1 Q. B. 71, 77 (headnote in- Misc. 180; 43 N. Y. Supp. 266.
adequate) ; Modern Woodmen v. See also infra, § 722.
Widand, 109 111. App. 340.
But see Stohr v. Musical Fund
578
§ 67S-§ 738] PENALTIES FOR BREACH § 716
on the company's books.' So a by-law which attempts to annul
all proxies executed before a certain date cannot be enforced
at the same meeting at which it was adopted, so as to have the
effect of disfranchising the members who were represented only
by such proxies.^
§ 715. By-laws must be General and Uniform. — By-laws must
not be confined to special cases ; they must be general.' Indeed,
we have seen that generality is one of the characteristic features
of by-laws, distinguishing them from mere resolutions.* Inas-
much as all by-laws must be general, no validity is imparted to
an invalid by-law by a resolution of the corporation which at-
tempts to exempt from its operation the only objector.^ On the
other hand, a by-law which is general in its terms is not rendered
invalid because a special case formed the occasion or motive of
its adoption. Thus, in England, an alteration of the articles of
association so as to give the company a lien on fully-paid shares
for debts due to the company by the holders is not void although
at the time only one shareholder is a debtor to the company,
and although the regulation is adopted for the purpose of meet-
ing his case."
So also by-laws must be uniform, and must not discriminate
arbitrarily against or in favor of certain shareholders. '
«
§ 716-§ 719. Sanction of By-laws — Fines, Forfeitures, and
■ other Penalties.
§ 716. In general. — Unless by-laws are to be mere bndum
fvlmen, there must be some sanction attached — the company
must have some means of punishing infractions of its regulations.
Now, all the shareholders of a company by their contract of
membership impliedly agree to abide by all lawful by-laws that
' People ex rel. Bosqui v. Crockett, inadequate) ; Isbester v. Murphy
9 Cal. 112. Mfg. Co., 95 111. App. 105 (by-law
Cf. Steamship Dock Co. v. Heron's imposing a forfeiture).
Adm'x, 52 Pa. St. 280 (headnote ■" Supra, § 687.
inadequate). ° People ex rel. Stewart v. Young
' Walker v. Johnson, 17 App. Men's, etc. Society, 41 Mich. 67.
(D. C.) 144, 165-166. » Allen v. Gold Reefs of West
' Budd V. Multnomah Street Ry. Africa (1900), 1 Ch. 656.
Co., 15 Oreg. 413; 15 Pac. 659; ' North-West Electric Co. v.
3 Am. Rep. 169; People v. Throop, Walsh, 29 Can. Sup. Ct. 33, 49.
12 Wend. (N. Y.) 183, 186 (headnote
579
§ 716 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
the corporation may adopt, and therefore it would seem clear
that upon shareholders at least the company may visit penalties
for the violation of its regulations.' Thus, the by-laws of medi-
aeval incorporated guilds often imposed fines and penalities on
members who were guilty of dishonorable or unworkmanlike
practices. Upon the same principle, modern business corpora-
tions may require their members to pay promptly all calls and
lawful assessments upon their shares, and provide for a for-
' Graham v. H<mse-building, etc.
Ass'n, 52 S. W. Rep. 1011 (Tenn.);
Matthews v. Associated Press, 136
N. Y. 333; 32 N. E. 981; 32 Am.
St. Rep. 741; Jackson v. South
Omaha Live Stock Exchange, 49
Nebr. 687; 68 N. W. 1051.
Cf. Kirk V. NowUl, 1 T. R. 118.
See also infra, § 809.
As to the necessity for notice and
an opportunity to contest the im-
position of a fine or other penalty,
see State ex rel. Cuppel v. Milwaukee
Chamoer of Commerce, 47 Wise. 670;
3 N. W. 760; People ex rel. Schmitt
V. Saint Franciscus Benevolent Soc,
24 How. Pr. (N. Y.) 216; Gray v.
Christian Soc, 137 Mass. 329; 50
Am. Rep. 310; Rex v. Company of
Fishermen, 8 T. R. 352, 356; Wach-
tel V. Noah Widows, etc. Society, 84
N. Y. 28; 38 Am. Rep. 478; People
ex rel. Doyle v. N. Y. Benevolent
Soc, 3 Hun (N. Y) 361; Erd v.
Bavarian, etc. Ass'n, 67 Slich. 233;
34 N. W. 555; Lysaght v. St. Louis
Operative, etc. Ass'n, 55 Mo. App.
538; Cotton Jammers, etc. Ass'n v.
Taylor, 23 Tex. Civ. App. 367; 56
S. W. 553; Purdy v. Bankers' Life
Ass'n, 74 S. W. 486; 101 Mo. App.
91. Cf. Hussey v. Gallagher, 61 Ga.
86; Green v. Board of Trade, 174
lU. 585; 51 N. E. 599; 49 L. R. A.
365 ; People ex rel. Devorell v. Af Jisi-
cal, etc Union, 118 N. Y. 101; 23
N. E. 129; Byrne v. Supreme Circle
(N. J.), 65 Atl. 839.
But see Berkhout v. Royal Ar-
canum, 62 N. J. Law 103; 43 Atl. 1;
People ex rd. Dodson v. Board of
Trade, 79 N. E. 611; 224 111. 370
(upholding a self-executing regular
tion for forfeiture of membership in
a board of trade).
As to the necessity of speading on
the records of the corporation the
exact charge for which the penalty
is sought to be imposed, see Roehler
V. Mechanics' Aid Society, 22 Mich.
86.
As to the necessity of affirmative
proof of commission of the offence,
see Rex v. Company of Fishermen, 8
T. R. 352.
As to other matters concerning
the conduct of the "trial," see
People ex rel. Thacher v. N. Y. Ccrm-
mercial Ass'n, 18 Abb. Pr. (N. Y.)
271; People ex rel. Meads v. Alpha
Lodge, 13 N. Y. Misc. 677; 35 N. Y.
Supp. 214; Green v. Board of Trade,
174 m. 585; 51 N. E. 599; 49 L. R.
A. 365; Modern Woodman v. Deters,
65 111. App. 368; Wood v. Chamber
of Commerce, 119 Wise. 367; 96
N. W. 835 (holding that the person
who preferred the charge is not dis-
qualified from acting as one of the
triers, etc.); Derry v. Great Hive,
etc. of Maccabees, 98 N. W. 23; 135
Mich. 494; Barker v. Great Hive,
etc of Maccabees, 98 N. W. 24; 135
Mich. 499; Bryant v. D. C. Dental
Soc, i26 App. D. C. 461 (evidence if
heard before committee need not be
submitted to society at large when
report is adopted).
Qucere whether a court of equity
will lend its aid to the enforcement
of a fine imposed for breach of a
by-law; Shannon v. Howard Mut.
Bldg. Ass'n, 36 Md. 383, 393-394.
See also infra, § 719.
580
§ 678-§ 738] PENALTIES FOR BREACH § 717
feiture of the shares in case of default.' A by-law providing for
a penalty only in case the recalcitrant member refuses to arbi-
trate is not necessarily bad.^ Instances of the imposition of
penalties for breach of by-laws most frequently occur in social or
semi-social corporations; but the same principle would seem to
apply to ordinary business corporations. The only difference is
"that in the case of business corporations just cause for the im-
position of penalties arises but seldom. Undoubtedly, however,
the belief is prevalent among lawyers that modern business
corporations have no power to enact by-laws imposing fines or
penalties except in so far as the power may be expressly con-
ferred by statute. Perhaps this idea may be due in part at least
to a notion that pecuniary fines imposed by mere by-laws would
be obnoxious to the principles of limited liability.
§ 717. Void and unenforceable Penalties. — On the other hand,
while the power in some cases to enforce by-laws by penalties
inflicted upon delinquents is submitted to be on principle in-
contestable; yet penalties and forfeitures are never favored in
law. Thus, a by-law of a society of cutlers purporting to author-
ize its officers to seize and confiscate any unworkmanly wares
found in the shops of any of its members was held to be void.*
The power of the company to enforce its regulations by fines
or amercements was undoubted, and was indeed expressly con-
ferred ; but this by-law went further, and by vesting a dangerous
discretion in the officers, especially in respect to so delicate a
matter as a forfeiture, transcended the limits of reason, and was
therefore void. So, it is held that a by-law imposing a penalty
on a penalty — that is, a penalty for non-payment of a penalty —
is void.* For this reason, where a by-law prohibits members
from becoming members of a rival corporation and imposes a
pecuniary fine on those who disregard the regulation, a provision
that delinquents shall forfeit all rights to participate in the com-
' Sparks V. Company, etc. of the ' Kirk v. NowiU, 1 T. R. 118.
Liverpool Waterworks, 13 Ves. 428. * Cf. Hagerman v. Ohio Bldg., etc.
See infra, § 809. Ci. Cahill v. Kola- Ass'n, 25 Oh. St. 186, 202-203;
mazoo Mut. Ins. Co., 2 Boug. (Mich.) Lynn v. Freemansburg, etc. Ass'n,
124, 137-139; 43 Am. Dec. 457. 117 Pa. St. 1 (headnote inadequate);
2 Haebler v. N. Y. Produce Ex- 11 Atl. 537; 2 Am. St. Rep. 639;
change, 149 N. Y. 414; 44 N. E. 87. Albers v. Merchants' Exchange, 39
But see State ex rel. Kennedy v. Mo. App. 683.
Union Merchants' Exchange, 2 Mo.
App. 96.
581
§ 718 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
pany's profits until the fine is paid is void, irrespective of the
question whether it be permissible to prohibit members from
joining rival companies/ So a by-law of a mutual insurance
company which increases the penalties to which members are
subjected for non-payment of assessments is not binding upon a
member who has never received notice of the change in the
regulations.^ Moreover, a by-law which imposes a penalty out
of all proportion to the offence will be held unreasonable and
therefore void ^ even though the right to impose fines be ex-
pressly conferred by statute.* The only penalties that can as a
rule be imposed are either pecuniary fines or forfeiture of mem-
bership ; for a corporation has no power to imprison a member
for breach of a by-law.^ A by-law which purports to leave the
amount of the fine entirely to the discretion of the directors is
void ; " but if the by-law fix a reasonable maximum penalty, there
is no objection to a provision that the precise amount of the
penalty shall be discretionary with the company in each case.'
§ 718. Penalties attempted to be imposed for doing what the
Member has a legal Eight to do. — A by-law which attempts to
fine or otherwise punish a member for doing that which he has
a legal right to do — for example, for refusing to defray the
expense of a dinner for the members of the company — ;is
plainly void.* This principle is sufficient to sustain a decision
that a by-law of' a corporation owning a creamery which pro-
vided for the forfeiture of shares owned by any member who
should refuse to furnish milk to the company is void.^
§ 719. Remedies for Enforcement of Fines — Defences. — A
fine imposed under a valid by-law may be recovered from a
delinquent shareholder in an action of debt or assumpsit. The
' Adley v. Reeves, 2 M. & S. 53. ° Albers v. Merchants' Exchange,
' Northwestern Life Ins. Co. v. 39 Mo. App. 583.
Erlenkoetter, 90 111. App. 99. ' Piper v. Chappell, 14 M. & W. 624.
' Graham v. House-building, etc. * Carter v. Sanderson, 5 Bing. 79;
Ass're, 52 S. W. Rep. 1011, 1013-1014 Master & Company of Frame-
(Tenn.); Lynn v. Freemansburg , workers v. Green, 1 Ld. Raym. 113;
etc. Ass'n, 117 Pa. St. 1; 11 Atl. 537; and cases cited infra, § 809.
2 Am. St. Rep. 639. ° March v. Fairmount Creamery
* Vierling v. Mechanics', etc. Ass'n, 32 Pa. Super. Ct. 517. The
Ass'n, 179 111. 524; 53 N. E. 979. court rested its decision on the
' Carter v. Sanderson, 5 Bing. 79, ground that a by-law of a joint-
89 (per Best, C. J.); McGanrum v. stock corporation cannot impose
Central Bldg. Ass'n, 19 W. Va. 726 a forfeiture without statutory
(semble). authority.
582
§ 678-§ 738] AMENDMENT AND REPEAL § 721
declaration, however, must set out the by-law that the court maj
judge of its sufficiency,* and hence recovery cannot be had under
the common counts.^ It seems that a suit in equity cannot be
maintained to enjoin the imposition of a pecuniary fine under an
invalid by-law ; for the remedy at law by resisting an attempt to
collect the fine is ample.'
§ 720-§ 727. Amendment and Repeal of By-laws.
§ 720. In general. — In general, by-laws may be amended
or repealed at the pleasure of the authority by whom they were
enacted.*
§ 721. Amendment or Repeal aSecting the Company's Consti-
tution. — In England, the Companies Act confers upon every
company in unrestricted terms the power to amend its articles of
association. Nevertheless, an early case held that the power of
alteration did not extend to a change in the company's con-
stitution.^ Obviously, however, this attempted distinction would
lead to all manner of confusion; for how is it possible to dis-
tinguish between by-laws which do and by-laws which do not
form part of the company's "constitution"? Accordingly, the
attempted distinction has been overruled by a comparatively
recent case, where the English Court of Appeal held that articles
of association which did not originally provide for preferred
shares might be altered so as to permit an increase of capital by
' Master, etc. of Fdtmakers, 1 B. Equitable Bldg., etc. Soc, 186 111.
& P. 98. 183; 57 N. E. 873. Cf. Van Atten
' Ottawa Union Bldg. Soc. v. v. Modern Brotherhood (Iowa), 108
Scott, 24 Up. Can. Q. B. 341. N. W. 313. See also supra, § 120.
' Thomas v. Musical, etc. Union, ^ As to the necessity for giving
121 N. Y. 45; 24 N. E. 24; 8 L. R. notice of an intention to move an
A. 175. Cf. supra, § 716 n. amendment to the by-laws, see
^ Rex V. Ashwell, 12 East 22; Bagley v. Reno Oil Co., 201 Pa. 78;
Scanlan v. Snow, 2 App. D. C. 137, 50 Atl. 760; 56 L. R. A. 184.
154-155; Dornes -v. Supreme Lodge, Quwre whether by-laws proved
75 Miss. 466; 23 So. 191; Supreme to have been once adopted should
Lodge v. Knight, 117 Ind. 489; 20 be presumed to continue in force.
N. E. 479; 3 L. R. A. 409. Of course, Messer v. Grand Lodge United
when so-called "by-laws" are made Workmen, 180 Mass. 321; 62 N. E.
a part of the incorporation paper, 252.
they are, Uke any other part of that ' Hutton v. Scarborough Hotel Co.,
instrument, unamendable. Fritze v. 2 Dr. & Sm. 521.
583
§ 722 BY-LAWS AND INTERNAL REGULATIONS [CeCAP. XII
issue of shares carrying preferential rights.' Whether or not
this decision is in all respects beyond criticism, it is clearly
correct in so far as it holds that by-laws or their English counter-
part, articles of association, are not unalterable merely because
they pertain to the company's "constitution." If in any particu-
lar case they are not amendable, the unalterability must rest on
some other ground.
§ 722. Amendments aflecting Vested or Contractual Rights
acquired under By-law. — For example, rights may vest under
a by-law which would render its amendment or repeal unjust
and unreasonable, and therefore void.^ Thus, where the rights
of shareholders in respect to dividends and the like have been
fixed by a by-law, a subsequent alteration in those rights is not
permissible, although the power of altering by-laws be conferred
by statute in unlimited terms.' So, too, a corporation may
incorporate certain provisions of the by-laws into a contract so
that the same cannot be repealed so far as their application to
that particular contract is concerned.*
' Andrews v. Gas Meter Co. (1897), Pa. St. 136 ; Becker v. Farmers' Mut.
1 Ch. 361. Cf. Stephenson v. Yokes, Ins. Co., 48 Mich. 610; 12 N. W.
27 Ont. (Can.) 691. 874; Pokrefky v. Firemen's Fund
2 See Boisot on By-Laws, 2d ed., Ass'n, 121 Mich. 456; 80 N. W. 240;
§ 120, § 124 ; Wiedynska v. Pvlaski Holyoke, etc. Ass'n v. Lewis, 1 Colo.
Polish Benev. Soc, 110 N. Y. App. 127; 27 Pac. 872; Savage v.
App. Div. 732; 97 N. Y. Supp. People's Bldg., etc. Ass'n, 45 W. Ya..
413. 275; 31 S. E. 99 1-; Becker v. Berlin,
' Kent V. Quicksilver Mining Co., etc. Soc, 144 Pa. St. 232; 22 Atl.
78 N. Y. 159; Gdlerman v. Atlas 699; 27 Am. St. Rep. 624; Court of
Foundry, etc. Co. (Wash.), 87 Pac. Honor v. Huichens (Ind.), 82 N. E.
1059. 89; Rollins v. Co-operative
Allen V. Gold Reefs of West Bank, 98 N. Y. App. Div. 606; 90
Africa (1900), 1 Ch. 656, 673-674, N. Y. Supp. 631; Field v. Eastern,
676, 679; British Equitable Ins. Co. etc. Loan Ass'n, 90 N. W. 717; 117
V. BaUey (1906), A. C. 35, 36 Iowa 185.
(semble); Punt v. Symons & Co. Qti(Ere whether the company could
(1903), 2 Ch. 506, 511; Morrison v. be enjoined from adopting a by-law
Wisconsin Odd Fellows, etc. Ins. Co., or regulation inconsistent with the
59 Wise. 162; 18 N. W. 13; Nelson contract or whether the company
V. Gibson, 92 111. App. 595; Wist v. should not be permitted to make
Grand Lodge, 22 Oreg. 271; 29 Pac. such changes in its regulations as it
610; 29 Am. St. Rep. 603; Smith v. sees fit, leaving the stipulations of
Supreme Lodge, 83 Mo. App. 512; the contract capable of enforcement
Northwestern, etc. Ass'n v. Wanner, notwithstanding the alteration. Cf.
24 111. App. 358; Covenant Mut. Punt v. Symons & Co. (1903), 2 Ch.
Life Ass'n v. Kentner, 188 111. 431 ; 506.
68 N. E. 966; Ins. Co. v. Connor, 17
584
§ 678- § 738] AMENDMENT AND REPEAL § 724
§ 723. General power to alter By-laws cannot be surrendered
by Contract or Provision in the Regulations themselves. — On the
other hand, a company cannot contract itself out of its general
power to alter its regulations.' Moreover, a provision in by-laws,
or English "articles of association," that they shall be un-
amendable is ineffective.^ So, where the by-laws provide that
they shall be amended only by a two-thirds vote, they may never-
theless be amended by a mere majority.' Upon this principle,
where a by-law provides no proposition shall become a "statute"
of the corporation until it shall have passed three successive
readings, the final vote being taken by yeas and nays, etc., an
amendment to the by-laws will nevertheless be valid upon
adoption by the corporation, although in its passage the pro-
vision above referred to may not have been observed.* So, where
the power of adopting and amending by-laws is vested in the
directors, a provision in the by-laws that no amendment thereto
shall become operative until approved by the shareholders is
void.* A fortiori, a by-law purporting to intrust to the directors
the exclusive power of amending the by-laws is void."
§ 724. Contracts with Company to be construed if possible so
as not to interfere with Power of altering By-laws. — Moreover, a
contract will not be held to render any of the company's regu-
lations unamendable, even as regards rights vested under that
contract, unless such is demonstrated to have been the clear
' Punt V. Symons & Co. (1903), to lae correct. Cf. Connell v. Stalker,
2 Ch. 506, 511. 21 N. Y. Misc. 609, 612; 48 N. Y.
^ Walker v. London Tramways Supp. 77; Flaherty v. Benevolent
Co., 12 Ch. D. 705. Society, 99 Me. 253; 59 Atl. 58.
' Richardson v. Union Congre- * Supreme Lodge v. Kutscher, 179
gationalSociety, 58 N.K. 187; Katz 111. 340, 345-346; 53 N. E. 620;
V. H. & ff. M/ff. Co., 95 N. Y. Supp, 70 Am. St. Rep. 115; Supreme
663; 109 N. Y. App. Div. 49, af- Lodge v. Trebbe, 179 111. 348; 53
firmed in 183 N. Y. 578. N. E. 730; 70 Am. St. Rep. 120.
But see Baltimore, etc. B. R. Co. v. But see Mutual Aid, etc. Soc. v.
Baltimore, etc. Relief Ass'n, 77 Md. Monti, 59 N. J. Law 341; 36. Atl.
566, 570-572 (headnote inadequate) ; 666.
26 Atl. 1045; Loewenthal v. Rubber Cf. Domes v. Supreme Lodge, 75
Reclaiming Co., 52 N. J. Eq. 440, Miss. 466; 23 So. 191.
445 (headnote inadequate); 28 Atl. ' Manufacturers' Exhibition Bldg.
454; Van Atten v. Modern Brother- Co. v. Landay, 76 N. E. 146 (head-
hood (Iowa), 108 N. W. 313. In note misleading); 219 111.168.
Scanlon v. Snow, 2 App. D. C. 137, ° Alters v. Journeyman, etc. Ass'n,
the view contrary to that stated in 19 Pa. Super. Ct. 272.
the text was assumed by the court
585
§ 724 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
intention, particularly where the by-laws or regulations them-
selves provide for alteration.' Said Lindley, M.R., in a famous
case: "A company cannot break its contracts by altering its
articles, but, when dealing with contracts referring to revocable
articles, and especially with contracts between a member of the
company and the company respecting his shares, care must be
taken not to assume that the contract involves as one of its
terms an article which is not to be altered." ^ Upon this principle
the court decided that a vendor who transfers property to a
company in consideration of fully paid shares has no contract
binding the company not to alter its articles so as to acquire a
lien on its paid-up shares for debts owing by their holders.'
So, a provision in English articles of association that a certain
proportion of the capital shall not be called in except in the case
of a winding-up, although subscribers have taken shares on the
faith thereof, does not prevent the company from altering its
articles so as to permit a call presently.* The principles respect-
ing the limits of the power of a corporation to alter its by-laws
are most frequently applied in the case of mutual insurance
companies, and the like, where the members occupy a dual
relation as members and as creditors; and the courts will be
much more inclined to hold void an alteration in the by-laws
' East Tennessee, etc. B. R. Co. 362; Pepe v. City, etc. Bldg. Soc.
V. Gammon, 5 Sneed (Tenn.) 567, (1893), 2 Ch. 311; Wright v. Incor-
571-572; Povltney v. Bachman, 31 porated Synod, 11 Can. Sup. Ct. 95.
Jlun (N. Y.) 49; Stohr v. Musical See Boisot on By-Laws, 2d ed.,
Fund Soc, 82 Cal. 557; 22 Pac. § 119, § 122.
1125; Reynolds v. Supreme Council In some cases such as Bernstein
(Mass.), 78 N. E. 129; 192 Mass. v. District Grand Lodge (Cal.), 84
150; 7 L. R. A. 1154; Gaines v. Pac. 271, a provision in a, contract
Supreme Council, 140 Fed. 978; to abide by such by-laws as might
Mock V. Supreme Council, 106 N. Y. be adopted was held to refer only to
Supp. 155. such by-laws as might be reasonable
Cf. Crittenden v. Southern Home in view of the rights which had
Bldg., etc. Ass'n, 111 Ga. 266; 36 already vested under the contract.
S. E. 643; Supreme Lodge v. Knight, Cf. Strang v. Camden Lodge (N. J.),
117 'ind. 489; 20 N. E. 479; 3 64 Atl. 93; Lange v. Royal High-
L. R. A. 409; Pain v. Socie^ St. landers (Nehr.), lOQN.W. 224.
Jean Baptiste, 172 Mass. 319; 52 ' Allen v. Gold Reefs of West
N. E. 502; 70 Am. St. Rep. 287; Africa (1900), 1 Ch. 656, 673.
Supreme Commandery v. Ainsworth, ' Alien v. Gold Reefs of West
71 Ala. 436; Engelhardt v. Fifth Africa (1900), 1 Ch. 656.
Ward Loan Ass'n, 148 N. Y. 281 ; * MaUeson v. National Ins. Corp.
42 N. E. 710; 35 L, R. A. 289; (1894), 1 Ch. 200.
Fugure v. Mutual Society, 46 Vt.
586
§ 678-738] AMENDMENT AND REPEAL § 726
which alters their rights as creditors than if their rights as
members were alone affected.^ The decisions are far from
harmonious upon the question what alterations of by-laws will
be deemed to violate the contract between the corporation and
persons who became members prior to the change; but as the
question has usually arisen in respect to other than ordinary
joint-stock corporations, a detailed consideration of the cases
would be inappropriate. As intimated above, the EngUsh courts
probably go further than the American courts in permitting
amendments of by-laws or articles of association to disturb
vested rights or expectations.
§ 725. Whether Provision in the By-laws may authorize Amend-
ment without complying with statutory Requisites. — Where a
statute provides that by-laws shall not be amended except by a
two-thirds vote, or the like, the by-laws cannot be legally altered
in any other way. Hence, a clause in the articles of association
or by-laws of a Canadian company purporting to authorize an
amendment at any meeting of the company by mere majority
vote is invalid where the act of parliament requires a "special
resolution" ^ in order to alter the articles.'
§ 726. Repeals by Implication. — Where a new code of by-
laws, apparently complete, is adopted as "the by-laws" of
the company, all the old by-laws are to be deemed repealed
by implication.*
' Knights Templars', etc. Co. v. garded as an outsider in so far as he
Jarman, 104 Fed. 638, 644; 44 contracts with the company other-
C. C. A. 93. wise than in respect of his shares.
Cf. Bornstein v. District Grand It would be dangerous to hold that
Lodge (Cal.), 84 Pac. 271. in a contract of loan or a contract of
In BaiLy v. British Equitable service or a contract of insurance
Assurance Co. (1904), 1 Ch. 374, 385 vaUdly entered into by a company
(reversed on a different point in there is any greater power of varia-
British Equitable Assurance Co. v. tion of the rights and habilities of
BaUy (1906), A. C. 35); Cozens- the parties than would exist if, in-
Hardy, L. J., speaking for the court, stead of the company, the contract-
said: "The rights of a shareholder in ing party had been an individual."
respect of his shares, except so far But see Punt v. Symons & Co.
as they may be protected by the (1903), 2 Ch. 506, 514-515.
memorandum of association, are by ' As to the meaning of this term,
statute made liable to be altered by see infra, § 1241.
special resolution. . . . But the case ' Twigg v. Thunder HiU Mining
of a contract between an outsider Co., 3 Brit. Columb. 101.
and the company is entirely different, * Murphy v. Pacific Bank, 130
and even a shareholder must be re- Cal. 542, 549-550; 62 Pac. 1059.
587
§ 727 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
§ 727. Repeals by Desuetude. — We have seen above that
custom may have the force of a by-law ; ' and a necessary corol-
lary of that proposition is that a similar custom may also repeal
a by-law. Consequently, long-continued disregard of the pro-
visions of a by-law may be equivalent to an express repeal.
Even a by-law which has been formally adopted may lapse or
be repealed by desuetude.^
§ 728. Disregard of By-laws without formal Repeal. — By-laws
may in any individual case be disregarded by the same authority
by which they might be formally repealed.' In England, how-
ever, the articles of association can be amended or repealed only
by a " special resolution " of the shareholders, — that is to say, a
resolution passed by a three-fourths vote at one general meeting
and confirmed at a subsequent general meeting,* — and until
so amended or repealed, they bind the shareholders as well as
the directors, and no mere resolution of the shareholders
inconsistent with the articles can be given effect.'
' Supra, § 688. Stalker, 21 N. Y. Misc. 609, 611-612;
^ Bank of Holly Springs v. Pm- 48 N. Y. Supp. 77; District Grand
son, 58 Miss. 421 ; 38 Am. Rep. 330 ; - Lo%e v. Cohn, 20 111. .App. 335,
Henry \. Jackson, 37 Yt. i31; Buck 344-345; Campbell v. Watson, 62
V. Troy Aqueduct Co., 56 Atl. 285; N. J. Eq. 396, 421; 50 Atl. 120 (by-
76 Vt. 75 (by-law requiring five law prescribing duties of directors
directors held to be repealed or not repealed by long disobedience
amended by the custom of the com- on their part) ; Coughlin v. Knights
pany so as to require only three); of Columbus (Conn.), 64 Atl. 224.
Blair v. Metropoliian Scn>. Bank, 67 " Bank of Holly Springs v. Pinr-
Pac. 609; 27 "Wash. 192. son, 58 Miss. 421, 439; 38 Am. Rep.
Cf. Richmondville Mfg. Co. v. 330; Sanvud v. HoUaday, 1 Woolw.
Prall, 9 Conn. 487; Curri^ v. Cmin 400, 408-^09 (by-law regulating
tinental Life Ins. Co., 53 N. H. 538 method of convening meetings of
(headnote inadequate); National directors); Martino v. Commerce
Gross Lodge v. Jung, 65 III. App. 313 ; Fire Ins. Co., 47 l^J. Y. Sup. Ct. 520 ;
Attorney-General v. Middleton, 2 Ves. Royal Bank of India's Case, 4 Ch.
Sr. 327, 330; Grand Valley Irr. Co. 252, 258.
V. Fruita Imp. Co. (Colo.), 86 Pac. Cf. Sorrentino v. CUetti, 75 N. Y.
324, 329, 330-331. App. Div. 507; 78 N. Y. Supp. 322.
But see Watson v. Bendigo Bldg. But see Flaherty v. Benevolent
Soc., 10 Vict. Rep. (cases at law) Soc, 99 Me. 253; 59 Atl. 58.
26 (as to "rules" of a building soci- * See infra, § 1241.
ety) ; Sperry v. Dransfield, 2 New ' Boschoek Proprietary Co. v.
Zeal. (Sup. Ct.) 319 (a? to "rules" Fuke (1906), 1 Ch. 148.
of a building society) ; ConneU v.
_ 688
§ 678- § 738] WAIVER of by-laws § 730
§ 729. Reformation of Mistakes in By-laws. — In England it
has been held that the general power of a court of equity to
reform mistakes in written instruments does not extend to the
correction of mistakes in the articles of association of a company
incorporated under the Companies Acts.' The ground of this
■decision was that the articles of association of an English com-
pany are a statutory instrument like the incorporation paper.
This reasoning does not apply with the same force to the by-
laws of an American corporation.
§ 730. Waiver of By-laws intended for Company's Benefit. — The
corporation may always waive by-laws that are intended for its
benefit,^ such as a by-law giving to it a lien on the shares of its
members for debts owing by them/ or a by-law of a mutual life
insurance company prescribing a maximum age for applicants for
membership.* This principle relates rather to the construction
of the by-law than to its validity or efficacy, or to its continuance
in force. Any provision in by-laws, by whomsoever adopted,
that is clearly intended for the benefit of the company, may be
' Evans v. Chapman, 86 L. T. Wise. 162; 18 N. W. 13; Susque-
381. hanna Mut. Fire Ins. Co. v. Elkins,
' See Swedish, etc. Mission Soc. 124 Pa. St. 484; 17 Atl. 24.
V. Lawrence, 79 Minn. 124 ; 81 N. W. Cf . Priest v. Citizens Mut. Fire
756; McKenney v. Diamond State Ins. Co., 3 Allen (Mass.) 602 (head-
Loan Ass'n, 8 Houst. (Del.) 557; note inadequate) ; Brewer v. Chelsea
18 Atl. 905; Delaney v. Delaney, Mutual Fire Ins. Co., 14 Gray
175 lU. 187; 51 N. E. 961; Inde- (Mass.) 203.
pendent Order v. Haggerty, 86 111. See also as to waiver of require-
App. 31; Burlington Voluntary Re- meuts for registration of transfers,
lief Dept. v. White, 41 Nebr. 547; infra, § 861; Smith v. People's Mut.,
59N. W. 747; 43 Am. St. Rep. 701 ; etc. Soc, 19 N. Y. Supp. 432; 64
Watts V. Equitable Mut. Life Ins. Hun 534. As to waiver of other
Co., 82 N. W. Rep. 441; 111 Iowa restrictions on transfers of shares,
90 ; Grand Lodge v. Reneau, 75 Mo. see infra, § 949-§ 950.
App. 402; Metropolitan Ace. Ass'n ' Trust & Savings Co. v. Home
V. FroUand, 161 lU. 30; 43 N. E. Lumber Co., 118 Mo. 447, 460-161;
766; 52 Am. St. Rep. 359 (by-law 24S. W. 129; Bank of HoUy Springs
limiting time for suing company v. Pinson, 58 Miss. 421; 38 Am.
waived by refusal to show copy to Rep. 330. '
member on request); McMahon v. Cf. Currier v. Continental Life
Supreme Tent, 151 Mo. 522; 62 Ins. Co., 53 N. H. 538; Supreme
8. W. 384 (provision for forfeiture Tent v. Volkert, 25 Ind. App. 627;
of policy in mutual insurance com- 57 N. E. 203. See also infra,
pany) ; Davidson v. Old People's, etc. § 957.
Soc, 39 Minn. 303; 39 N. W. 803; * Wiberg v. Minnesota, etc. Re-
1 L. R. A. 482; Morrison v.- Wis- lief Ass'n, 73 Minn. 297; 76 N. W.
consin Odd Fellows, etc Ins. Co., 59 37.
589
§ 731 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
waived by it; but though this rule is not per se objectionable,
yet the courts have applied it in some rather doubtful cases.
Thus, a by-law of a benefit society requiring members to desig-
nate in vsriting the name of the beneficiary may be waived, so
that a person designated as beneficiary by parol, with the com-
pany's assent, is entitled to the rights of a beneficiary.' So, the
fact that a member of a building society is permitted to hold a
greater number of shares than is allowed by the by-laws is no
defence to an action by the company for dues or assessments on
shares so held ; '' the limitation on the number of shares being
for the company's benefit may be waived by it.
§ 731. Construction of By-laws. — The rules which govern the
construction of by-laws do not diifer from those for the construc-
tion of other similar instruments. "Wherever a code or set of
by-laws is in force, all must be construed together, so as to har-
monize, if possible, apparent discrepancies.' By-laws imposing
forfeitures or penalties will be strictly construed.* The courts
will lean against a construction which would give a by-law a
retroactive effect.^ We have seen that a long-continued custom
in a corporation may have the effect of a by-law or of repealing
a previously adopted by-law ; ° and a fortiori, therefore, the
usage of the company may be deferred to in the construction of
by-laws which in themselves are ambiguous.' But the admis-
sion of parol evidence, such as the opinions of officers of the
corporation, as to the meaning of an unambiguous by-law is a
very different thing, and will not be permitted.'
' Hanson v. Minnesota Scan- 643-644; 44 C. C. A. 93; Arecierai
dinavian, etc. Ass'n, 59 Minn. 123; Order v. Brown, 112 Ga. 545; 37
60 N. W. 1091. S. E. 890; Gundlach v. Germania,
' Hagerman v. Ohio, etc. BUg. etc. Inst., 49 How. Pr. (N. Y.) 190
Ass'n, 25 Oh. St. 186. (headnote inadequate) ; Roxbury
' Cf. Hartford v. Co-operative Lodge v. Hocking, 60 N. J. LsiW 439;
Homestead Co., 128 Mass. 494. 38 Atl. 693; Modern Woodmen v.
* Occidental Bldg., etc. Ass'n v. Wieland, 109 111. App. 340; Taylor
SvUivan, 62 Cal. 394; Ottawa Union v. Modern Woodmen, 72 Kans. 443;
Bldg. Society v. Scott, 24 Up. Can. 83 Pac. 1099; United Workmen v.
Q. B. 341. Haddock, 72 Kans. 35; Kaemmerer
' Brotherhood of Railroad Train- v. Kaemmerer (111.), 83 N. E. 133.
men V. Newton, 79 111. App. 500
Wist V. Grand Lodge, 22 Oreg. 271
29 Pac. 610; 29 Am. St. Rep. 603
Lloyd V. Supreme Lodge, 98 Fed. 66
Supra, § 688, § 727.
' McDonough v. Hennepin, etc.
Ass'n, 62 Minn. 122; 64 N. W. 106;
State ex rd. Attorney-General v.
38 C. C. A. 654; Knights Templars', ConkHn, 34 Wise. 21.
etc. Co. V. Jarman, 104 Fed. 638, « Brendon v. Worley, 8 N. Y.
590
§ 678-738]
CONSTRUCTIVE NOTICE
§732
The construction of a written by-law is for the court, rather
than the jury, to the same extent as the construction of a written
contract, a deed, or a will.'
§ 732-§ 735. Constructive Notice of By-laws.
§ 732. Strangers to the Company. — Of the ordinary Ameri-
can by-laws, strangers to the company, according to the almost
uniform current of authority, are hot affected with constructive
notice. Indeed, this feature is one of the chief infirmities of the
American system of by-laws. As the by-laws are not matter of
record, strangers could not be charged with constructive knowl-
edge of them without the greatest injustice.^ Thus, where the
by-laws contain a limitation upon the powers of some officer or
agent of the company, a stranger who contracts with him is not
affected by the limitation without actual notice thereof.^ Of
Misc. 253; 28 N. Y. Supp. 557;
Thomas v. Societa Italiena, 10 N. Y.
Misc. 746; 31 N. Y. Supp. 815;
Badesch v. Congregation Bros., 23
N. Y. Misc. 160; 50 N. Y. Supp.
958.
' Cf. State ex rel. Attorney-General
V. Conklin, 34 Wise. 21; Traders'
MiU. Life Ins. Co. v. Humphrey, 109
111. App. 246, affirmed, 69 N. E. 875.
' So, the by-laws of a Canadian
company, as a learned judge has
pointed out, "are not public prop-
erty. They concern matters of in-
ternal management. Those who
deal with the 'company have no
means of access to them, no right to
pry into the company's archives or
interrogate its officials." Montreal,
etc. Power Co. v. Robert (1906),
A. C. 196, 202-203 (headnote inade-
quate).
' Royal Bank of India's Case, 4
Ch. 252, 262; Montreal, etc. Power
Co. V. RobeH (1906), A. C. 196,
202-203 (by-law fixing a quorum
of directors — headnote inadequate) ;
Pirw Beach, etc. Corp. v. Columbia
Amusement Co. (Va), 56 S. E. 822;
Russell V. Washington Sav. Bank, 23
App. D. C. 308,; Arapahoe, etc. Co.
V. Stevens, 13 Colo. 534; 22 Pac.
823; Moyer v. East Shore Terminal
Co., 41 S. Car. 300; 19 S. E. 651;
44 Am. St. Rep. 709; 25 L. R. A.
48; Trawick v. Peoria, etc. Ry. Co.,
68 111. App. 156; Ten Broek v. Boiler
Compound Co., 20 Mo. App. 19;
Smith V. Martin Anti-Fire, etc. Co.,
19 N. Y. Supp. 285; 47 N. Y. St.
Rep. 26; Fay v. Noble, 12 Cush. 1;
Smith V. Smith, 62 111. 493; WaU v.
Smith, 92 111. 385; Ward v. Johnson,
95 111. 215, 248; Unirni Mut. Life
Ins. Co. V. While, 106 lU. 67;
Barries Bros. v. Coal Co., 101 Tenn.
354; 47 S. W. 498; Metropole Bath
Co. V. Garden City Fan Co., 50 lU.
App. 681; Rathbun v. Snma, 123
N. Y. 343; 25 N. E. 379; 10 L.
R. A. 355 (semble) ; Perry v. Council
Bluffs, etc. Co., 67 Hun (N. Y.) 456;
22 N. Y. Supp. 151; MiUedgevUle
Water Co. v. Edwards, 121 Ga. 555;
49 S. E. 621 ; Lyndon Sav. Bank v.
International Co., 54 Atl. 191; 75
Vt. 224 (by-law requiring promis-
sory notes of the company to be
signed by treasurer and counter-
signed by two directors); Powers
V. Schlicht Heat, etc. Co., 23 N. Y.
App. Div. 380; 48 N. Y. Supp. 237;
591
§ 733 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
course, a by-law may appoint an agent with such closely limited
authority, or may define the powers of officers in such a way,
that acts clearly in excess of the authority so marked out will
not bind the corporation; but this is not because persons who
deal with such agents or officers are charged with notice of the
limitations on their powers contained in the by-laws, but be-
cause an agent who acts altogether beyond his authority does
not bind his principal whether the third party does or does not
know the limits of the agent's powers.' As strangers are not
chargeable with notice of the provisions of by-laws, a policy of
insurance issued by a benefit society, the terms of which con-
flict with the by-laws of the society, may nevertheless be bind-
ing according to its terms.^ So, where the by-laws of a fire
insurance company establish different rates for different kinds
of property, even a deliberate mis-classification of property by
the directors will not necessarily vitiate the policy.'
§ 733. Shaxeholders. — Indeed, there is authority for the
view that even members of the corporation are not chargeable
with constructive notice of its by-laws.* Thus, a transferee of
affirmed short in 165 N. Y. 662; 59
N. E. 1129; Equitable Endouyment
Ass'n V. Fisher, 71 Md. 430; 18 Atl.
808; Produce Exchange Trust Co.
V. Bieherhach, 58 N. E. 162; 176
Mass. 577.
But see Adriance v. Roome, 52
Barb. (N. Y.) 399, 411; Haden v.
Farmers', etc. Fire Ass'n, 80 Va.
683, 691; Dahney v. Stevens, 2
Sweeney (N. Y.) 415; 40 How.
Pr. (N. Y.) 341 (semble); Bohm v.
Loewer's, etc. Brewery Co., 9 N. Y.
Supp. 514; 16 Daly (N. Y.) 80;
DeBost V. Palmer Co., 1 How. Pr.,
N. s. (N. Y.), 501; 35 Hun 386;
Harvey v. Schuylkill Real Estate, etc.
Co., 24 Pa. Co. Ct. Rep. 693; MUl-
ward-Cliife Cracker Co.'s Estate, 161
Pa. St. 157; Worthington v. Skuyl-
kUl Electric Ry. Co., 195 Pa. St. 211;
45 Atl. 927 ; Kansas City Hay Press
Co. V. Devol, 72 Fed. 717, 721 (head-
note inadequate).
Cf. Tres Palacios, etc. Co. v.
Eidman (Tex.), 93 S. W. 698 (hold-
ing that by-law restricting power of
agent to bind company is admissible
in evidence in favor of corporation
when plaintiff counts on an actual
contract and not on an estoppel —
sed gucere); Northwestern Packing
Co. V. WhUney (Cal.), 89 N. W. 981.
' Cf. Carney v. N. Y. Life Ins.
Co., 162 N. Y. 453; 57 N.. E. 78;
76 Am. St. Rep. 347; 49 L. R. A.
471; Davis v. Rockingham Invest-
ment Co., 89 Va. 290; 15 S. E. 547;
Twelfth Street MarUet Co. v. Jackson,
102 Pa. St. 269; Railway Equip-
ment, etc. Co. V. Lincoln Nat. Bank,
82 Hun (N. Y.) 8, 11; 31 N. Y.
Supp. 44.
' Davidson v. Old People's, etc.
Soc, 39 Minn. 303; 39 N. W. 803;
1 L. R. A. 482. See also Fitzgerald
V. Equitable, etc. Life Ass'n, 3 N. Y.
Supp. 214; 18 N. Y. St. Rep. 914.
' Union Mutual Fire Ins. Co. v.
Keyser, 32 N. H. 313; 64 Am. Dec.
375. See also Campbell v. Mer-
chants, etc. Ins. Co., 37 N. H. 35;
72 Am. Dec. 324.
* Northwestern Life In^. Co. v.
592
§ 678- § 738] CONSTRUCTIVE NOTICE § 735
shares is not affected with constructive notice of a by-law pur-
porting to create a lien on the shares in favor of the company.'
So, a person who lends money on the security of a share-cer-
tificate signed and issued by the company's treasurer is not
chargeable with notice of by-laws limiting the powers of the
treasurer in that regard.^
§ 734. Directors and Ofiaoers. — The directors and higher
oflBcers whose duties require an intimate knowledge of the com-
pany's internal affairs may fairly be charged with constructive
notice of the by-laws,^ or at least with such by-laws as have
been duly published and entered in the company's minutes. At
any rate, knowledge will be presumed,* and the burden of prov-
ing ignorance will rest on the directors. It would seem that a
subordinate employee of the company cannot be similarly affected
by such presumptive or constructive notice.^
§ 735. Persons who are in act of becoming or who subsequently
become Members or Oflacers. — In determining whether a per-
son is to be charged with constructive notice of a company's
by-laws as a member or otherwise, some authorities maintain
that regard must be had to his status at the time the contract
was made, and that it is immaterial whether the effect of the
Erlenkoetter, 90 111. Apip.99; McKerin Co., 59 N. Y. 96; Bank of Holly
ney v. Diamond State Loan Ass'n, 8 Springs v. Pinson, 58 Miss. 421 ;
Houst. (Del.) 557; 18 Atl. 905; 38 Am. Rep. 330. See infra, § 956
Underhill v. Santa Barbara, etc. Co., and supra, § 706.
93 Cal. 300, 311-312; 28 Pac. 1049 ' Tome v. Parkersburg Branch
(semble); Williamson v. Eastern 22. fi. Co., 39 Md. 36, 74-75; 17 Am.
Bldg., etc. Ass'n, 54 S. Car. 582; Rep. 540.
32 S. E. 765; 71 Am. St. Rep. 822. ' Darrah v. Wheeling Ice, etc. Co.,
But see Pfister v. Gerwig, 122 Ind. 60 W. Va. 417; 40 S. E. 373.
567; 23 N. E. 1041; Harvey v. Cf. Jones v. Vance Shoe Co., 92
Grand Lodge, 50 Mo. App. 472, 477; 111. App. 158; Mutual Life Ins. Co.
Bauer v. Samson Lodge, 102 Ind. v. McSherry, 68 Md. 41, 45-46
262; IN. E. 571; Came y. Brigham, (headnote inadequate); 11 Atl.
39 Me. 35, 38; Crittenden v. South- 577; Beers v. New York Life Ins.
em Home Bldg., etc. Ass'n, 111 Ga. Co., 66 Hun (N. Y.) 75; 20 N. Y.
266; 36 S. E. 643; Cdes v. lerwa Supp. 788.
State, etc. Ins. .Co., 18 Iowa 425; * Hunter v. Sun Mut. Ins. Co.,
Mitchell V. Lycoming Mut. Ins. Co., 26 La. Ann. 13; Ellis v. N. C. In-
51 Pa. St. 402; People's Bldg., etc. stitutim, 68 N. Car. 423.
Ass'n V. Purdy, 78 Pac. (Colo.) 465; ^ Moyer v. East Shore Terminal
Columbia Bldg., etc. Ass'n v. Jun- Co., 41 S. Car. 300; 19 S. E. 651;
quist. 111 Fed. 645; Richardson v. 44 Am. St. Rep. 709 ; 25 L. R. A. 48.
Devine (Mass.), 79 N. E. 771. But see Hunter v. Sun Mutual
' Driscoll V. West Bradley, etc. Ins. Co., 26 La. Ann. 13.
VOL. I. — 38 693
§ 736 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
contract may be to make him an officer or member of the com-
pany; ^ but the weight of authority supports a different view on
this point.^ At all events, the rights of a party under a contract
with the corporation made in disregard of by-laws of which he
had no notice will not be affected by the fact that subsequently
by an independent transaction he becomes a member of the
company.^
§ 736. Who are subject to By-laws. — The power of a cor-
poration to enforce its regulations by penalties or forfeitures
must necessarily be confined to members, and cannot extend to
strangers who have never consented to be bound by its rules.
To be sure, officers and agents, and others who contract with
the company with knowledge of its regulations, must be deemed
to have agreed, so far as their agency or contract is concerned,
to abide thereby.* Indeed,> if a person who contracts with a
corporation has actual notice of the terms of by-laws affecting
his contract or the authority of the agents or officers of the
company by whom it was made to enter into it — for example,
if the contract is in writing and expressly incorporates the
by-laws in question — it has even been said that he is bound by
all the provisions of the by-laws to the same extent as if they
had been statutes of the state.^ Only shareholders, however,
are permanently subject to the by-laws, and subject to them as
rules prescribed by a lawgiver." Moreover, even members of
' Moyer v. East Shore Terminal 7 L. R. A. 822. See also books on
Co., 41 S. Car. 300; 19 S. E. 651; mutual insurance.
44 Am. St. Rep. 709; 25 L. R. A. ' Wait v. SmUh, 92 111. 385.
48. * Cummings v. Wehster, 43 Me.
Cf. Equitable Endowment Ass'n 192, 197. Cf. Bank of Wilmington
V. Fisher, 71 Md. 430; 18 Atl. 808 v. Wollaston, 3 Hair. (Del.) 90;
(contract of employment as general Sanitary Can Co. v. MvUins, 86
manager). See also supra, § 733. N. Y. App. Div. 450; 83 N. Y. Supp. .
' Hunter v. Sun Mutual Ins. Co., 918.
26 La. Ann. 13; Ellis v. N. C. In- ^ Cannon v. Farmers' Mut. Fire
stitution, 68 N. Car. 423; Jones v. Ass'n, 58 N. J. Eq. 102; 43 Atl. 281;
Vance Shoe Co., 92 111. App. 158; Amesbury v. Bowditch Mut. Fire Ins.
Darrah v. Wheeling Ice, etc. Co., 50 Co., 6 Gray (Mass.) 596, 603.
W. Va. 417; 40 S. E. 373; Cdpe v. Cf. Nute v. Hamilton Mut. Ins.
Jubilee Mining Co. (Cal.), 84 Pac. Co., 6 Gray (Mass.) 174.
324; Douglass v. Merchants' Ins. ° Mechanics, etc. Bank v. Smith,
Co., 118 N. Y. 484; 23 N. E. 806; 19 Johns (N. Y.) 115. Cf. Seneca
694
§ 678-738] PLEADING AND PROOF § 738
the corporation are not subject to the corporate jurisdiction
except in their capacity as members. Thus a by-law attempting
to impose a fine on members for non-payment of interest on
debts owing by them to the corporation has been held void.'
On the other hand, the application of this principle to the mem-
bers of such corporations as mutual insurance companies, the
members of which occupy a dual relation, as members and as
creditors, will be found very difficult.
§ 737. Who may take Advantage of By-laws. — Conversely, a
stranger to the company can, in general, acquire no right of
action by virtue of the by-laws.^ As was said by a Massachu-
setts judge: "The office of a by-law is 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 contract, the parties thereto are the members of the
association, as between themselves; or the corporation upon
the one side, and its individual members upon the other. The
right of any third party, stronger to the association, to estab-
lish a legal claim through such a by-law, must depend upon
the general principle applicable to express contracts." ^ Thus,
a stranger cannot sue to recover a penalty which a by-law directs
to be paid to him by some delinquent member.* Upon the same
principle, a provision in the articles of association of an English
company purporting to adopt a contract made by promoters
on behalf of the company prior to its incorporation will not
enable the other party to the contract to sue the company
thereon.^
§ 738. Pleading and Proof of By-laws. — In pleading, the
degree of particularity necessary in mentioning or setting out
by-laws depends so largely on the local system of pleading that
little can be profitably said on the subject.* In an action of
debt to recover a fine imposed by virtue of a by-law, the terms
County Bank v. Lamb, 26 Barb. » Flint v. Pierce, 99 Mass. 68,
(N. Y.) 595, 697-^98; State v. Over- 70-71; 96 Am. Dec. 691; per Wells,
ton, 24 N. J. Law 435, 440^42; 61 J.
Am. Dec. 671. * Bodwic v. Fenndl, 1 Wils. 233;
>■ Hagerman v. Ohio Bldg., etc. Cf. Graves v. Colby, 9 Ad. & E. 356.
Ass'n, 25 Oh. St. 186, 203; Parker " Supra, § 328.
v. U. S. Bldg., etc. Ass'n, 19 W. Va. » Cf. Hingston v. Montgomery
744. (Mo.), 97 S. W. 202, 205 (where a
^ Flint v. Pierce, 99 Mass. 68; 96 by-law which was not pleaded was
Am. Dec. 691. enforced).
595
§ 738 BY-LAWS AND INTERNAL REGULATIONS [ChAP. XII
of the by-law must be set out in the declaration ; for otherwise
it may be held bad, at least on special demurrer.'
By-laws must be proved like other resolutions of a corpo-
ration.^ If in actions at law the existence of a by-law is in
dispute, its adoption must, where the evidence is conflicting or
inconclusive, be left to the jury.^
' Master, etc. of Feltmakers, IB. ' Cotton Jammers, etc. Ass'n v.
& P. 98. Taylor, 23 Tex. Qv. App. 367; 56
' See Boisot on By-laws, 2d ed., S. W. 553.
§ 158, § 159.
596
CHAPTER XIII
PAYMENT FOR SHARES
Section
Liability to contribute to company's capital — scheme of treatment . 739
Normal liability 740-773
In general — liability to pay on call 740
Nature of liability before and after call 741-742
In general — effect of call — liability as for a debt .... 741
Whether hability is statutory, contractual, etc 742
What a call is 743-746
In general 743
Requirement of uniformity 744
Call not necessarily demand for immediate payment -^ calls
payable by instalments 745
Particulars as to hour, place, and manner of payment not
necessary to be stated in call 746
Notice of calls 747-752
Whether necessary 747
Kind of notice 748
Length of notice . 749
To whom notice should be given 750
Waiver of notice by repudiating liability 751
Effect of lack of notice 752
Time and amount of calls 753-757
In general — discretion of company 753
Calls before company authorized to commence business
— defence of incomplete subscription of capital . . . 754
Calls after abandonment of business by company .... 755
Calls after tdtra vires acts — after acceptance of uncon-
stitutional legislative amendment to charter .... 756
Statutory and other regulations as to amount and fre-
quency of calls ,. 757
By whom calls may be made — by directors, shareholders, etc. . 758
How calls may be paid — cash — set-off 759
Liability of shareholders for interest 760
Statute of limitations as defence 761
Who are subject to the liability 762-773
Actual shareholders as distinguished from mere sub-
scribers 762
Owners of shares at time of call liable 763
Criterion of ownership of shares for this purpose 764
Effect of transfer of shares upon liabiUty 765
Statutes making former shareholders liable notwith-
standing transfer 766
Liability in respect of shares held in trust, etc. — liability
of holder of legal title 767
597
PAYMENT FOK SHARES [ChAP. XIII
Normal liability (continued) Section
Liability of executor or administrator 768
American statutes exempting trustees, executors, pledgees,
etc., from personal liabilitj' 769
Infant shareholders 770
Effect of bankruptcy of shareholder 771
Holder of less than minimum or more than maximum
number of shares allowed to be held by one person . 772
Holder of shares issued without authority of law or
irregularly 773
Special agreements varying normal liability — subscriptions on
special terms 774-799
In general — validity 774
Issue of shares at a premium 775
Special agreements amounting to complete or partial release
from liability to pay par value — issue at a discount . 776
Issue as security for debt of the company 777
Effect of striking down stipulation for exemption from liability
for full par value . . . 778
Whether prohibition of issue of shares at a discount applies to
reissue of shares, to issue as a part of increase of capital,
or to other issue of shares by a going concern 779
Disregard by directors of resolution of shareholders on increas-
ing capital forbidding issue of new shares for less than par 780
Liability of holder of shares issued at discount distinguished
from liability under executory contract to pay less than
par for paid-up shares 781
Effect of impossibility of paying in the mode specially stipu-
lated ... . 782
Stipulations for payment at fixed dates instead of on call .... 783
Statutes requiring shares to be paid up before a certain time . . 784
Payment in property or services 785
Evils of "watered stock" 786
Statutory attempts to remedy these evils 787-799
Companies Act of 1867 . 787-795
In general . 787
Importance to American lawyers of cases arising under
this statute ... . . 788
Act not applicable to executory contracts to issue
shares . . .... . . 789
Act functus ofjicio when contract registered . ... 790
Who charged with burden of seeing to registration of
contract . . 791
What amounted to sufficient registration of a contract . 792
When contract must be registered 793
What is payment in cash 794
Objections to the Companies Act of 1867 . . . 795
Companies Act of 1900 796
American Statutes . . 797-799
Statutes requiring payment in cash — what amounts
to payment in cash ... 797
Statutes forbidding the issue of shares except in ex-
change for money, property, or services . . . 798
598
§ 739-§ 807] NORMAL LIABILITY § 740
Special agreements varying normal liability (continued) Section
Statutes requiring recording of contracts for payment
of shares otherwise than in cash 799
Estoppel of company to exact payment for shares which have not
been paid up 800-801
Estoppel in favor of a transferee of the shares 800
Estoppel in favor of original allottee 801
Assessments on paid-up shares 802-806
In general not lawful .... 802
Assessments by agreement of shareholders 803
Assessments authorized by statute 804
Assessments in reorganization 805
Attempts to evade the rule prohibiting assessments on
paid-up shares 806
Liabilities of shareholders to creditors 807
§ 739. Liability to contribute to Company's Capital — Scheme
of Treatment. — The status of shareholder carries with it certain
rights and certain obUgations. Chief among the latter, at least
according to the theory of the law, is the obligation of contribut-
ing to the capital of the company an amount equal to the nominal
value of the shares. The nature of this obligation and the
methods of enforcing it should first be considered, and sub-
sequently the question should be considered how far this normal
obligation may be departed from or varied by special agreement
between the shareholders and the company.
§ 740-§ 773. NORMAL LIABILITY.
§ 740. In general — Liability to pay on Call. — Normally every
shareholder is bound to pay in cash the par value of the shares
held by him, in such instalments and at such times as the com-
pany may call for the same.' In the absence of some special
regulation or agreement, an applicant for shares is not bound to
pay a deposit on allotment or issue of the shares, but is merely
bound to pay on call.^ Payment of deposits on application or
allotment or both is, however, often required by statute. Under
such statutes, the authorities are in conflict whether non-payment
of the required deposit renders the subscription wholly void.'
If by statute or by valid internal regulations of the company
' But see Harris v. Gateway Land ' Alexander v. Automatic Tele-
Co., 29 So. 611; 128 Ala. 652. phone Co. (1900), 2 Ch. 56.
" See supra, § 200.
599
§741
PAYMENT FOR SHARES
[Chap. XIII
payment is required at certain fixed periods, there is then no
necessity for a call; ' and a fortiori the same is true where the
time of payment is fixed in the subscription itself.^
§ 741-§ 742. Nature of Liability before and after Call.
§ 741. In greneral — Effect of call — Liability as for a Debt. —
Until a call is made, the liability of the shareholders is potential
merely; ' but immediately upon the call the shareholders become
debtors to the company for the amount of the call.* From that
time on the obligation scarcely differs from any other debt.*
To be sure, in one or two New England states, it has been held
that a corporation cannot sue a shareholder in debt or assumpsit
to recover the amount of a call, unless his subscription for the
shares contained an express promise to pay for them ; ° but this
doctrine is unsupported by any sound principle, has been
uniformly discountenanced by the best text-writers,' and is
opposed to the overwhelming weight of authority in the common-
law world.* The remedy of the company by forfeiture of the
' Waukon, etc. B. R. Co. v. Dwyer, Hatch v. Dana, 101 U. S. 205, 214-
49 Iowa 121.
Cf. Phoenix Warehousing Co. v.
Badger, 67 N. Y. 294, 300.
See also infra, § 774, and § 783.
2 WUliams v. Matthews, 103 Va.
180; 48 S. E. 861. Cf. infra, § 783.
See also California, etc. Co. v.
Callender, 94 Cal. 120, 127-128; 29
Pac. 859; 28 Am. St. Rep. 99 (hold-
ing that where a subscription by its
terms is payable "at such time and
in such manner as may be deter-
mined by the board of directors,"
action may be brought without prov-
ing a call complying with the statu-
tory formalities).
' Cawley & Co., 42 Ch. D. 209;
Ex parte Rudolph, 11 W. R. 806;
South Milwaukee Co. v. Murphy, 112
Wise. 614; 88 N. W. 583; 58 L. R.
A. 82.
But see Pitisburgh, etc. R. R. Co.
V. Clarke, 29 Pa. St. 146.
As to the right of a creditor to
enforce payment from shareholders
though no call has been made, see
600
215; GUn Iron Works, 17 Fed. 324;
affirmed, 20 Fed. 674; Cleveland
Rolling-Mill Co. v. Texas, etc. Ry.
Co., 27 Fed. 250. Cf. infra, § 807.
* A call is "owing" from the time
it is made although not payable until
afterwards. Faure Electric, etc. Co.
V. PhUlipart, 58 L. T. 525.
= Cf. Crawford v. Roney (Ga.), 55
S. E. 499 (holding that where call is
proved, onus of proving payment is
cast upon shareholder as in any other
case of debt).
" Atlantic Cotton Mills v. Abbott, 9
Cush. 423 ; Katama Land Co. v. Jer-
negan, 126 Mass. 155; Kennebec,
etc. R. R. Co. V. Kendall, 31 Me. 470;
Jay Bridge Co. v. Woodman, 31 Me.
573.
Cf. Penobscot, etc. R. R. Co. v.
Dunn, 39 Me. 587, 594 (agreement
to "take and fill" a certain number
of shares).
' E. g. 1 Morawetz on Priv. Corps.,
2d ed., § 128-§ 129.
Hughes v. Antietam Mfg. Co.,
§ 739-§ 807]
WHAT A CALL IS
§743
shares is cumulative,' and being in the nature of security for the
debt, may be waived without affecting the right to enforce the
call by action of assumpsit.^
§ 742. Whether Liability is Statutory, Contractual, etc. — The
obligation to pay calls grows out of the relation of shareholder,
and may indeed be regarded as founded upon the incorporation
act.^ It does not originate in the written contract of subscription *
of which therefore profert need not be made in an action to
recover a call even though by the lex fori in actions on written
contracts, as at common law in actions on specialties, profert is
required.^ On the other hand, the liability sounds in contract.*
§ 743-§ 746. What a Call is.
§ 743. In general. — What, then, is necessary to consti-
tute a call?' A call is a demand by the company upon the
shareholders for the payment at some designated time of a
definite sum not exceeding the amount, remaining unpaid on
34 Md. 316, 326; Webster v. Upton,
91 U. S. 65; Ogdensburgh, etc. R. B.
Co. V. Frost, 21 Barb. 541; Rennsa-
laer, etc. Co. v. Barton', l& N.IY. 457n. ;
Western R. R. Co. v. Avery, 64 N.
Car. 491; Nashua Savings Bank v.
Anglo-American Co., 189 U. S. 221;
23 Sup. Ct. 517; Sigua Iron Co. v.
Brmvn, 171 N. Y. 488; 64 N. E. 194;
Campbell v. Am,erican AlkUi Co.,
125 Fed. 207; 61 C. C. A. 317.
' People's Hume Sav. Bank v..
Sadler (Cal.), 81 Pac. 1029; Tar
River Nav. Co. v. Neal, 3 Hawks (N.
Car.) 520. See also cases cited in
last note. But see New Hampshire
Central B. B. v. Johnson, 30 N. H.
390; 64 Am. Dec. 300 (declaring
that when the subscriber makes no
express promise to pay, he cannot be
held personally Uable until the com-
pany has forfeited and sold the
shares, when he can be sued for the
balance).
Cf. International Fair, etc. Ass'n
v. Walker, 83 Mich. 386, 394; 47
N. W. 338.
" American AlkHi Co. v. Camp-
beU, 113 Fed. 398; 125 Fed. 207.
' Cork, etc. By. Co. v. Goode, 13
C. B. 826.
But cf . Newry, etc. Ry. v. Coombe,
3 Ex. 565 (headnote inadequate).
* But see Gold v. Paynter (Va.),
44 S. E. Rep. 920; Lester v. Bemis
Lumber Co., 74 S. W. 518; 71 Ark.
379; McCoy v. World's Columbian
Exposition, 186 111. 356, 363 (head-
note inadequate); 57 N. E. 1043;
78 Am. St. Rep. 288; Christensen
V. Eno, 106 N. Y. 97, 102; 12 N. E.
648; 60 Am. Rep. 429 (a passage
quoted infra, p. 630, n. 2).
' Mississippi, etc. R. B. Co. v.
Gaster, 20 Ark. 455.
' Commercial Bank v. Warthen,
119 Ga. 990; 47 S. E. 536.
^ We are deaUng here exclusively
with calls by the corporation. Calls
made by the court or by the official
liquidator or receiver in winding-up
proceedings lie outside the scope of
this work.
601
§ 744 PAYMENT FOR SHARES [ChAP. XIII
their shares.' A call made before a person subscribes is of
no effect as to him.''
§ 744. Requirement of Uniformity. — A call must be uni-
form upon all the shareholders similarly situated: the directors
or the company have no right to discriminate between the
shareholders by making demands upon some of them while
suffering their fellows to escape.' But if a greater proportion has
been paid upon some of the shares than upon others, the dis-
parity not only may but must be corrected before a call can be
made on those who have paid in the greater amount.* If the call
be uniform by its terms, the mere failure to enforce it against
some of the shareholders will not release the others.^
§ 745. Call not necessarily Demand for immediate Payment —
Calls payable by Instalments. — The resolution making the call
need not demand immediate payment. On the contrary, a
resolution may be passed that a call be made at some certain
date in the future, payable some time thereafter." So, a call may
be made payable by instalments : ' or, in other words, several
successive calls may be resolved upon at the same time.
§ 746. Particulars as to Hour, Place, and Manner of Payment
not necessary to be stated in Call. — It is not necessary that the
resolution making the call should state all the details — such as
the precise hour and place for payment.* Such matters are
' "A call is nothing more than Improvement Co. v. Des Moines Nat.
an official declaration that the sums Bank, 103 Iowa 455; 72 N. W. 657.
subscribed are required to be paid. * Great Western Tel. Co. v. Burro-
Pi. direction to collect such sums in- ham, 79 Wise. 47 ; 47 N. W. 373 ; 24
volves, necessarily, such a declara^ Am. St. Rep. 698; Bowenv. Kvehn,
tion." Braddock v. PhUadelphia, 79 Wise. 53; 47 N. W. 374. See also
etc. R. R. Co., 45 N. J. Law, 363, 365. supra, § 519.
^ Pike V. Bangor Shore Line R. R. ^ Hambleton v. Glenn, 72 Md.
Co., 68 Me. 445. 331; 20 Atl. 115. Cf. Hambleton v.
' Brockway v. Gadsden, etc. Land Glenn, 72 Md. 351 ; 20 Atl. 121 (hold-
Co., 102 Ala. 620; 15 So. 431; Pike ing that a release of some share-
V. Bangor Shore Line R. R. Co., 68 holders, being vltra vires and void.
Me. 445; 1 Morawetz on Priv. Corps., will not discharge the others).
2d ed., § 154. See also infra, § 752.
But see Odessa Tramways v. ' Sheffield, etc. Ry. Co. v. Wood-
Mendels, 8 Ch. D. 235, 245, where cock, 7 M. & W. 574.
it was held that the company's arti- ' London, etc. Ry. Co. v. M'Mich-
cles dispensed with this requirement aeJ, 5 Exch. 855; Amhergate Ry. Co.
of uniformity. Shares owned by the v. Norcliffe, 20 L. J. Ex. 234.
company itself may of course be * London, etc. Ry. v. Fairclough,
excluded from the call. Western 2 M. & Gr. 674; Rutland, etc. R. R.
e02
§ 739- § 807] NOTICE OP calls § 747
merely administrative, and may therefore be left to the company's
executive officers. If no time is fixed for payment, the call is
payable immediately or after the expiration of the required notice
at the option of the shareholder.' On the other hand, a resolu-
tion calling for payment either in cash or in "land contracts,"
without stating who should have the option as to the mode of
payment, is too indefinite to constitute a valid call.^ A provision
in articles of association requiring the directors to specify the
person to whom a call should be payable has been construed to
apply only to cases where the call is payable at some place other
than the company's registered office.^
§ 747-§ 752. Notice of Calls.
§ 747. Whether Notice is necessary. — A call is generally not
enforceable until some notice thereof be given to the share-
holders. Such notice is often explicitly required by statute *
or the company's regulations. Upon principle, it is submitted
that notice is necessary even without any express requirement,'
but the contrary doctrine is laid down as settled law by some
Co. V. Thrall, 35 Vt. 536; Cfreat for payment blank could not amount
North of England By. Co. v. Bid- to a call until the blank was filled).
didph, 7 M. & W. 243 ; American ' North Milwaukee Tovm Site Co.
Pastoral Co. v. Gurney, 61 Fed. 41; v. Bishop, 103 Wise. 492; 79 N. W.
Western Imp. Co. v. Des Moines 785; 45 L. R. A. 174.
Nat. Bank, 103 Iowa 455; 72 N. W. ' Re Kozminsky, 16 Vict. L. R.
657. 137.
C{. Andrews y. Ohio, etc. R. B. Co., * Hughes v. Antietam Mfg. Co.,
14 Ind. 169; Banet v. Alton, etc. R. 34 Md. 316; Scarlett v. Academy of
R. Co., 13 111. 504 (headnote inade- Music, 43 Md. 203; Macon, etc. R.
quate); Hays v. Pittsburgh, etc. R. R. Co. v. Vason, 57 Ga. 314, 318;
R. Co.,, 38 Pa. St. 81 (in which cases Carlisle v. Cahawba, etc. R. R. Co.,
the amount of the call as well as the 4 Ala. 70.
place for payment was left unde- Cf. Rutland, etc. R. R. Co. v.
termined by the resolution); Ruck Thrall, 35 Vt. 536.
V. Caledonia Silver Mining Co. (Cal.), ' MUes v. Bough, 3 G. & D. 119;
92 Pac. 194 (statute requiring that Hughes v. Antietam Mfg. Co., 34
call state place of payment held Md. 316, 330-331; Germania Iron,
mandatory). etc. Co. v. King, 94 Wise. 439; 69
' Baile v. Calvert Coll., etc. Soc, N. W. 181; 36 L. R. A. 51 (semble);
47 Md. 117, 124. Cf. Western Imp. Alabama, etc. R. R. Co. v. Rowley,
Co. V. Des Moines Nat. Bank, 103 9 Fla. 508.
Iowa 455; 72 N. W. 657. Cf. Maltby v. NoHhwestern Ya.
But see Cawley & Co., 42 Ch. D. R. R. Co., 16 Md. 422; 10 Cyc. p. 496
209 (where the court held that a (per Judge Thompson),
resolution for a caU leaving the date
603
§ 748 PAYMENT FOR SHARES [ChAP. XIII
standard American text-writers/ and is supported by some
adjudicated cases.^
§ 748. Kind of Notice. — Usually, notice by advertisement is
provided for by statute or by the company's regulations ; and per-
haps such notice would be sufficient in the absence of any such
provision.^ At all events, unless the matter is governed by some
positive regulations, any reasonable notice will be sufficient.*
In the absence of an explicit regulation on the subject, the notice
need not specify the place for payment.^ Oral notice is good
unless written notice be affirmatively required." Explicit regu-
lations should, however, be observed.' For example, where an
act of incorporation provided that all notices of every sort should
. be signed by three directors or by their clerk by their order, a
notice of a call must conform to those requirements.^ Thus,
where the statute requires personal demand or notice by publica-
tion, notice by posting a letter in the public mails is not sufficient.*
On the other hand, where the shareholder receives actual notice
of the call, the fact that the notice may not have been in the
required form is perhaps immaterial."' If the statute con-
' 1 Morawetz on Priv. Corps., 2d " Smith v. Plank Road Co., 30
ed., § 147; 2 Clark & MarshaU on Ala. 650.
Priv. Corps., § 500. ' As to what is a shareholder's
' Eakright v. Logansport, etc. R. "regular address" within the mean-
R. Co., 13 Ind. 404, 408 (headnote ing of a by-law requiring notice to
inadequate) ; Heaston v. Cincinnati, be sent to him there, see Bange v.
etc. R. R. Co., 16 Ind. 275; 79 Am. Supreme Council (Mo.), 105 S. W.
Dec. 430; Lake Ontario, etc. R. R. 1092.
Co. v. Mason, 16 N. Y. 451 ; Eastern » MUes v. Bou^h, 3 G. & D. 119,
Plank Road Co. v. Vaughan, 20 Barb. 132.
155; United Fruit Growers Co. v. ° Hughes v. Antietam Mfg. Co.,
Eisner, 22 N. Y. App. Div. 1, 5; 47^ 34 Md. 316, 331.
N. Y. Supp. 906; Hill v. Nishet, 100 Cf. Braddock v. Philadelphia, etc.
Ind. 341, 356. R. R. Co., 45 N. J. Law 363; Morris
^ Hall V. U. S. Ins. Co., 5 Gill v. Metalline Land Co., 164 Pa. St.
(Md.) 484. 326; 30 Atl. 240; 44 Am. St. Rep.
But see Lake Ontario, etc. R. R. 614; 27 L. R. A. 305.
Co. V. Mason, 16 N. Y. 451, 463-464 '» BrUish Sugar Co., 3 K. & J. 408;
(semble); Alabama, etc. R. R. v. Mississippi, etc. R. R. Co. v. Gaster,
Rowley, 9 Fla. 508. As to what is 20 Ark. 455.
a reasonable notice by pubUcation, Cf. Jones v. Sisson, 6 Gray (Mass.)
see Moore v. Wheal Byjerkerno Tin 288; Sands v. Sanders, 26 N. Y. 239;
Mining Co., 17 Vict. L. R. 680. Grand Valley Irr. Co. v. Fruita Imp.
* Cf. National Ins. Co. v. Egle- Co. (Colo.), 86 Pac. 324, 329, 330-
son, 29 Grant (Can.) 406. 331; 1 Morawetz on Priv. Corps.,
= Vawter v. Franklin College, 53 2d ed., § 147, p. 148.
Ind. 88. But see Morris v. MetaUine Land
604
§ 739-§ 807] NOTICE OF calls § 750
templates "such notice as may be prescribed by the by-laws,"
nevertheless, if no by-laws on the subject are adopted, any
reasonable notice will be suflBcient.' How far the terms of the
notice must be approved by the directors and how far such
details may be committed to executive officers will depend very
largely upon the terms of the laws and regulations governing the
company.^
§ 749. Length of Notice. — Provisions as to the length of
notice are mandatory. Where notice of, say, twenty-one days is
required, there must be twenty-one clear days exclusive both of
the terminus a quo and the terminus ad quem; so that even in a
leap year notice given on Februrary 9th of a call payable on
March 1st would be invalid.^ However, a call may by its terms
be payable on a date prior to the expiration of the stipulated
length of notice, although it will not be collectible until after-
wards.* Where "at least sixty dayS' notice" by publication is
required, the notice need not be published daily throughout the
sixty days, but if the first publication be sixty days before the
time fixed for payment, that is enough.^
§ 750. To whom Notice should be given. — Notice of a call
addressed to a deceased member at his late address is good.'
No notice need be given to a person who as director was present
at the meeting at which the call was made.' In the case of shares
Co., 164 Pa. St. 326; 30Atl. 240; 44 * Scarlett v. Academy of Music,
Am. St. Rep. 614; 27 L. R. A. 46 Md. 132.
305. Cf. People's Home Savings Bank
' Danbury, etc. R. B. Co. v. WU- v. Rauer (Cal.), 84 Pac. 329.
son, 22 Conn. 435. ° Muskingum VaUey Turnpike
But see Oermania Iron, etc. Co. v. Co. v. Ward, 13 Oh. 120; 42 Am.
Kiv^, 94 Wise. 439; 69 N. W. 181; Dec. 191.
36 L. R. A. 51 (holding that no call » New Zealand Gold Co. v. Pea-
could be collected until the adoption cock (1894), 1 Q. B. 622.
of by-laws prescribing the notice to Cf. Alien v. Gold Reefs of West
be given) ; North Milwaukee Town Africa (1900), 1 Ch. 656.
Site Co. V. Bishop, 103 Wise. 492; As to notice to the representatives
79 N. W. 785; 45 L. R. A. 174 (a of a deceased shareholder, see fur-
similar case). ther, South Milwaukee Co. v. Mur-
' See Sheffield, etc. Ry. Co. v. phy, 112 Wise. 614; 86 N. W. 583;
Woodcock, 7 M. & W. 574; London, 68 L. R. A. 82. See also infra,
etc. Ry. Co. v. Fairclough, 2 M. & Gr. § 976 et seq.
674. ' Schenectady, etc. Co. v. Thatcher,
' Re Jennings, 1 It. Ch. 236, 240- 11 N. Y. 102.
241. Cf. Graebner v. Post, 119 Wise.
Cf. National Ins. Co. v. Egleson, 392; 96 N. W. 783; 100 Am. St.
29 Grant (Can.), 406, 412. Rep. 890.
605
§ 751 PAYMENT FOE SHARES [ChAP. XIII
owned by co-partners, or perhaps by any two persons jointly,
notice to one is notice to all.'
§ 751. Waiver o£ Notice by repudiating Liability. — It has been
held that a shareholder who altogether repudiates ownership of
the shares and the attendant liability, thereby waives notice of all
subsequent calls.^ Although no reason was assigned by the court
for this conclusion, doubtless the basis of the doctrine is that
notice need not be given to one who has shown that the notice
will be useless.
§ 752. Effect of Lack of Notice. — A shareholder who has
received regular notice of a call cannot defend an action therefor
because other shareholders may not have been duly notified.*
This rule is proper, and indeed almost necessary ; yet one should
observe that it enables directors, if they should be so minded, to
evade the rule which requires calls to be uniform on all share-
holders, merely by omitting to give notice to those shareholders
whom they desire to favor.*
§ 753-§ 757. Time and Amount of Calls.
§ 753. In general — Discretion of Company. — The object of
the law in requiring subscriptions to the capital of a corporation
to be paid in instalments when called for by the company is of
course to enable the company to call in only so much of its
capital as its necessities from time to time may require. Never-
theless, the company or the directors are the exclusive judges
of whether or not the corporation needs the capital called up;
and a shareholder, therefore, cannot resist payment of a call
because the money is not in fact needed by the company.* So,
' National Ins. Co. v. Egleson, ^ Odessa Tramways v. Mendel, 8
29 Grant (Can.) 406 (semble). Ch. D. 235; Penobscot R, R. Co. v.
' Cass y. Pittsburgh, etc. Ry. Co., White, 41 Me. 512, 518-520; 66
80 Pa. St. 31. Am. Dec. 257; Visalia, etc. R. R. Co.
' Shacklefard, Ford & Co. v. v. Hyde, 110 Cal. 632; 43 Pac. 10;
Dangerfield, L. R. 3 C. P. 407, 411; 52 Am. St. Rep. 136 (where the
Baile v. Calvert College, etc. Soc, 47 unsuccessful defence was that the
Md. 117, 125 (headnote inadequate); call was made for the purpose of
Hastings Lumber Co. v. Edwards, 75 paying liabilities contracted before
N. E. 57 ; 188 Mass. 587. defendant became a shareholder) ;
Cf. Hambleton v. Glenn, 72 Md. Judah v. American, etc. Ins. Co., 4
331; 20Atl. 115. Ind. 333; Chouteau Ins. Co. v. Floyd,
* Cf. 1 Morawetz on Priv. Corps., 74 Mo. 286; Budd v. Multnomah
2d ed., § 154. Street Ry. Co., IS Oreg. 413; 15 Pac.
606
§ 739- § 807]
TIME OF CALLS
§754
too, the amount of calls is wholly discretionary with the company.
To be sure, in one case it was held that the corporation could not
call in the whole amount of the stock at once ; '■ but this decision
is opposed to the reason of the law and to other decided
cases.^
§ 754. Calls before Company authorized to commence Business
— Defence of incomplete Subscription of Capital. — On the other
hand, except for preliminary expenses, a corporation can have
no need of capital until it is competent to commence business;
and until that time should have no power to make calls upon its
shareholders for the purpose of engaging in business.^ We have
seen above that according to the American rule a corporation
may not commence business unless by unanimous consent until
its authorized capital has been fully subscribed.' Accordingly,
in America, until the whole authorized capital of the company
has been subscribed, no call can be made,^ except for the pur-
659; 3 Am. Rep. 169; Nashua Sav-
ings Bank v. Anglo-American Co.,
189 U. S. 221; 23 Sup. a. 517 (leav-
ing the question open whether an
assessment made unnecessarily and
in bad faith would be enforceable);
Anglo-American Land, etc. Co. v.
Dyer, 181 Mass. 593; 64 N. E. 416;
92 Am. St. Rep. 437; Fitzgerald's
Estate V. Union Sav. Bank, 90 N. W.
994; 65 Nebr. 97.
Cf. Bailey v. Birkenhead, etc. Ry.
Co., 12 Beav. 433; Bank of China
V. Mffrse, 168 N. Y. 458; 85 Am. St.
Rep. 676; 61 N. E. 774; 56 L. R. A.
139.
' Spangler v. Indiana, etc. Ry.
Co., 21 111. 276.
^ Haun V. Mulberry, etc. Co., 33
Ind. 103 ; Budd v. Multnomah Street
Ry. Co., 15 Oreg. 413; 15 Pac. 659;
3 Am. Rep. 169.
' But see United Fruit Growers
Co. V. Eisner, 22 N. Y. App. Div. 1,
6-7; 47 N. Y. Supp. 906.
" Supra, § 177.
" Hughes V. Antietam Mfg. Co.,
34 Md. 316; Salem Mia Dam Corp.
V. Ropes, 6 Pick. (Mass.) 23; Denny
Hotel Co. \.Schram,e Wa-sKlZi; 32
Pac. 1002; 36 Am. St. Rep. 130;
Livesey v. Omaha Hotel Co., 5 Nebr.
50; Haskell v. Worthington, 94 Mo.
560 ; 7 S. W. 481 ; Allman v. Havana,
etc. R. R. Co., 88 111. 521; Galveston
Hotel Co. V. Bolton, 46 Tex. 633 (not-
withstanding a statute which pro-
vided that the corporation might be
"organized" when part only of the
capital should be subscribed); New
Hampshire Central R. R. v. Johnson,
30 N. H. 390; 64 Am. Dec. 300;
Proprietors of Cabot, etc. Bridge, 6
Cush. (Mass.) 50.
But see Hamilton, etc. Co. v. Rice,
7 Barb. (N. Y.) 157, 166-167;
Schenectady, etc. Co. v. Thatcher, 11
N. Y. 102; Jewett v. VaUey Ry. Co.,
34 Oh. St. 601.
This rule has no application if
the company is expressly authorized
by statute to commence business
before the capital is completely
taken. 1 Morawetz on Priv. Corps.,
2d ed., § 140; Jewett v. Valley Ry.
Co., 34 Oh. St. 601.
Calls may be made upon subscrib-
ers to the original capital although
the capital has been increased and
the new shares have not been fully
subscribed. McCoy v. World's Co-
lumbian Exposition, 186 111. 356; 57
607
§754
PAYMENT FOR SHAKES
[Chap. XIII
pose of defraying preliminary expenses.' In England, however,
inasmuch as a company may, except where prohibited by statute,
commence business before its capital is subscribed, the rule
just stated probably does not prevail ; ^ and so, too, whenever in
the United States a corporation is authorized to commence
business before its capital is fully subscribed, it may levy calls
upon the shareholders as soon as it is authorized to start business.^
Moreover, in America, the defence of non-complete subscription
of the capital is always one which may be waived either expressly
or by participating in the commencement or transaction of
business by the company with knowledge of the incomplete sub-
scription of capital.* In order to have that effect, however, the
N. E. 1043; 78 Am. St. Rep. 288.
Cf. supra, § 589.
A requirement that the capital
must be subscribed by ''responsible
persons" is satisfied if the subscrib-
ers are bona fide believed to be sol-
vent. Penobscot R. R. Co. v. Dumr-
mer, 40 Me. 172; 63 Am. Dec. 654;
Penobscot B. R. Co. v. White, 41 Me.
512; 66 Am. Dec. 257.
' Salem MUl Dam Corp. v. Ropes,
6 Pick. (Mass.) 23; 1 Morawetz on
Priv. Corps., 2d ed., § 189.
' Ornamental Pyroffraphic Co. v.
Brown, 2 H. & C. 63; Re Jennings,
1 Ir. Ch. 236, 241-243; ManM v.
Swan Land Co., 154 lU. 177, 188; 40
N. E. 462; 45 Am. St. Rep. 124; 27
L. R. A. 313 (governed by the law
of Great Britain) ; London, etc. Ass.
Co. v. Redgrave, 4 C. B., N. s.,
524.
But cf. Howbeach Coal Co. v.
Teague, 5 H. & N. 151 ; Elder v. New
Zealand Co., 30 L. T. 285; Pitchfard
v. Davis, 5 M. & W. 2; Galvanized
Iron Co. V. Westoby, 8 Ex. 17;
North Stafford Steel, etc. Co. v. Ward,
L. R. 3 Ex. 172 (where the articles
provided that in case all the shares
should not be allotted the existing
subscribers should, if the directors
shmdd so declare, continue associated
for the objects of the company, and
a call made without any previous
resolution of the directors for con-
tinuing the business notwithstand-
ing the incomplete subscription, was
held void); Lindley on Companies,
6th ed., 576^77 (^vhere the learned
author states the English law in sub-
stantial accord with the American
law).
Even where the subscription of a
certain proportion of the capital of a
railway company is expressly made
a condition to the right of the com-
pany to exercise its powers, the
Court of Exchequer held that a call
might be made before that amount
of capital was taken. Waterford,
etc. Ry. Co. v. Dalbiac, 6 Eng.
Ry. Cas. 753; 6 Ex. 443. But
see contra: Norwich, etc. Naviga-
tion V. Theobald, 1 Moody & M.
151.
' Hunt V. Kansas, etc. Bridge Co.,
11 Kans. 412; Willamette Freight-
ing Co. V. Stannus, 4 Oreg. 261;
Nichols V. Burlington, etc. Co., 4 G.
Greene (Iowa) 42; Boston, etc. R.
R. Co. V. Wellington, 113 Mass.
79.
* StiUman v. Dougherty, 44 Md.
380; Ho^erv. awrfond, 36Md. 476;
Anderson v. Railroad, 91 Tenn. 44;
17 S. W. 803; Masonic Temple Ass'n
V. Channell, 43 Minn. 353; 45 N. W.
716; International Pair, etc. Ass'n v.
TFoifeer, 83Mich. 386; 47N.W. 338;
Corwith V. Culver, 69 111. 502; De-
troit Driving Club v. Fitzgerald, 109
608
§ 739-§ 807] TIME OF CALLS § 755
participation must be qua shareholder : it is not enough that the
shareholder may have dealt with the company as any stranger
might do.' The defence may be waived in advance by a stipu-
lation in the subscription,^ or the shareholder will be pre-
cluded from raising it if at the time he subscribed the company
was already engaged in business.' On the other hand, the
payment of one call which was unauthorized because the capital
had not been fully subscribed will not, it has been held, neces-
sarily estop the shareholder from resisting on that ground
subsequent calls ; ^ for the first payment may have been made
without knowledge of the facts or in the belief that the money
was needed for preliminary expenses.
§ 755. Calls after Abandonment of Business by Company. —
The abandonment by the company of its enterprise or under-
taking constitutes no defence to an action for calls.* So, the
sale of the entire undertaking and franchise of the company by
way of foreclosure of a mortgage will not affect a shareholder's
obligations.^ Perhaps the money may be needed to discharge
obligations incurred prior to such abandonment. A fortiori, the
abandonment of a part only of the undertaking will not exoner-
ate a shareholder from payment for his shares.'
Mich. 670; 1 Morawetz on Priv. construction by the company should
Corps., 2d ed., § 156. progress).
But" see Oldtown, etc. R. B. Co. v. Cf. Anderson v. RaUroad, 91 Tenn.
Veazie, 39 Me. 571. 44; 17 S. W. 803; LaU v. Mt. Ster-
Cf. New Hampshire Central R. R. ling Coal Road Co., 13 Bush (Ky.) 32.
V. Johnson, 30 N. H. 390; 64 Am. ' Miisgravev.Morrison,54,M.d. 161.
Dec. 300 (where there was held to be * Somerset, etc. R. R. Co. v. Cush-
no waiver by attending meetings of ing, 45 Me. 524, 533 ; North Stafford
the corporation without assenting Steel, etc. Co. v. Ward, L. R. 3 Ex.
to the transaction of business). 172 (headnote inadequate); Garling
' Gettysburg Nat. Bank v. Brown, v. Baechtel, 41 Md. 305, 326.
95 Md. 367; 52 Atl. 975. " Re Jennings, 1 Ir. Ch. 236, 241;
^ Emmitt v. Springfield, etc. R. R. Phtenix Warehousing Co. v. Badger,
Co., 31 Oh. St. 23; Sweeney \. Tenn., 67 N. Y. 294; Armstrong v. Karsh-
etc. R. R. Co. (Tenn.), 100 S. W. ner, 47 Oh. St. 276; 24 N. E. 897.
732 (where the defence was held to But see South Georgia, etc. R. R.
be precluded by a provision for pay- Co. v. Ayres, 56 Ga. 230.
ment of the subscription at definite " Buffalo, etc. R. R. Co. v. Gif-
times, so that no call need be made ford, 87 N. Y. 294 ; Buffalo, etc. R. R.
by the company before enforcing Co. v. Clark, 22 Hun (N. Y.) 359.
payment) ; St. Charles Mfg. Co. v. Cf . Armstrong v. Karshner, 47 Oh.
Britten, 2 Mo. App. 290; Iowa, etc. St. 276; 24 N. E. 897.
R. R. Co. V. Perkins, 28 Iowa 281 ' Buffalo, etc. R. R. Co. v. Clark,
(agreement to pay as certain work of 22 Hun (N. Y.) 359.
VOL. I.— 39 609
§ 756 PAYMENT FOK SHAKES [ChAP. XIII
§ 756. Calls after Ultra Vires Acts — After Acceptance of Un-
constitutional legislative Amendment to Charter. — By parity of
reasoning, excess of power by the corporation will not justify a
dissenting shareholder in refusing to pay calls.' On the other
hand, with apparent inconsistency, the courts have held that
the acceptance of an unconstitutional legislative amendment to
the charter by the majority of the shareholders will release the
dissenting minority from any further hability,^ unless some one
or more of the minority choose to enjoin the corporation from
acting under the amendment.^
§ 757. Statutory and other Regulations as to Amount and Frequ-
ency of Calls. — Not infrequently, by statute or by a company's
regulations, some limit is placed on the amount which may be
called in from the shareholders at any one time, and a minimum
interval to elapse between calls is prescribed. If a call be made
for more than the prescribed maximum, or if it be made too
soon after a previous call, it is invalid and unenforceable.' If
an act of incorporation provides that at least two months shall
elapse between calls, a call made within two months after an-
other call is invalid even though the earlier call was itself invalid
because made within two months of a still earlier call, unless
the second call had been collected from none of the share-
holders and had been formally declared void by the company.^
Regulations limiting the amount which may be assessed at any
one time apply to the amount which is required to be paid at
any one time, and do not, according to American decisioiis,
invalidate successive calls voted at one time but payable sep-
arately." The contrary, however, was held by the House of
' Cartvxright v. Dickinson, 88 2d ed., § 119-§ 120, 153; 2 Clark &
Tenn. 476; 12 S. W. 1030; 17 Am. Marshall on Priv. Corps., § 482,
St. Rep. 910; 7 L. R. A. 706; Pro- § 484.
prietors of City Hotel v. Dickinson, But of. Midland, etc. Ry. Co. v.
6 Gray (Mass.) 586; 1 Morawetz on Gordon, 16 M. & W. 804. As to the
Priv. Corps., 2d ed., § 115-§ 117; 2 effect of forfeiture of shares upon
Clark & Marshall on Priv. Corps., liability of the holder see infra,
I 488. § 828.
But see SoiUh Georgia, etc. R. R. = Rutland, etc. R. R. Co. v. Thrall,
Co. v. Ayres, 56 Ga. 230. 35 Vt. 536.
' Ashton V. Burbank, 2 Dillon * Cf. Re Jennings, 1 Ir. Ch. 236.
435; Oldtown, etc. R. R. Co. v. « WeUand Ry. Co. v. Berrie, 6 H.
Veazie, 39 Me. 571; Hartford, etc. & N. 416.
R. Co. V. Croswell, 6 Hill (N. Y.) " Penobscot R. R. Co. v. Duv}^
383; 1 Morawetz on Priv. Corps., mer, 40 Me. 172; 63 Am. Dec. 654;
610
§ 739-§ 807] SET-OFF § 759
Lords.' But even according to this English doctrine, while the
voting of the two calls simultaneously is irregular, the one pay-
able first is valid.^ Moreover, if the required interval elapse
between the time when the resolution for the first call is made
and the time when the resolution for the second call is made,
as well as between the time fixed for payment of the first call
and that fixed for payment of the second, both calls are valid;
the court "cannot construe the time of the making of the. call to
be the time when the call is payable in the one case, and in the
other case, the time when the resolution for the call is made." ^
If the law prohibits the making of a call while a previous call
remains unpaid unless an attempt has been made to enforce
its collection, the off-setting of a fraudulent claim against the
former call is not such payment as will authorize the second call.*
§ 758. By whom Calls may be made — By directors, by Share-
holders, etc. — Where the statutes applicable to a company as
well as its regulations are silent upon the question by whom
calls shall be made, the power of levying them may be exercised
by the directors.' If the power be expressly conferred upon the
directors or other agents, it cannot be delegated by them ; " but
nevertheless a general meeting of the shareholders, the supreme
corporate authority, might, it is submitted, take the matter
into its own hands and call in unpaid capital.' Where, how-
ever, by the express terms of the subscription it is payable
on call by the directors, a call levied by a meeting of shareholders
is ineffective.'
§ 759. How Calls may be paid — Cash — Set-ofi. — Calls are,
in the absence of special agreement — a matter which is treated
Rutland, etc. B. R. Co. v. Thrall, 35 ' Ambergate, etc. Ry. Co. v.
Vt. 536; Penobscot, etc. R. R. Co. v. MitcheU, 4 Exch. 540, 543.
Dunn, 39 Me. 587. * Strouse v. Sylvester, 66 Pac.
' Baaiie v. Edinburgh Oil Gas 660; 134 Cal. xx.
Light Co., 3 CI. & Fin. 639; Strat- ' See infra, § 1435.
ford, etc. Ry. Co. v. Stratton, 2 B. & ' 1 Morawetz on Priv. Corps., 2d
Ad. 518. ed., § 145. Cf. infra, § 1467.
Cf. Ambergate, etc. Ry. Co. v. ' See infra, § 1191.
Mitchell, 6 Eng. Ry. Cas. 235. ' Cf. Brockway v. Gadsden, etc.
' BaiRie v. Edinburgh Oil Gas Land Co., 102 Ala. 620; 15 So. 431.
Light Co., 3 CI. & Fin. 639, 661.
611
§ 759 PAYMENT FOE SHARES [ChAP. XIII
below — payable only in cash. They go to make up a fund —
often called in America a "trust-fund" — for defraying the
expenses and paying the debts of the company. If the require-
ment of payment in cash be rigorously enforced, a shareholder
who may happen also to be a creditor of the company should
not be permitted to set-off his liability for calls against that
indebtedness.' Such is the law where the company is insolvent
and has ceased to be a going concern, both in England ^ and
America ; ^ and similarly the shareholder cannot deduct the
amount of the unpaid calls from the indebtedness and prove
against the company for the balance,* nor can he prove for the
full amount of the debt and set off the calls against the dividend
payable to him on his claim.^ Hence, too, a shareholder cannot
set off sums which he has paid upon void shares issued in
excess of the company's authorized capital against his liability
for unpaid subscriptions to the lawful capital." In the United
States the same rules apply where the company has been adju-
dicated a bankrupt, and that too although the bankrupt act
expressly provides that set-off shall be allowed in all cases of
mutual debts.' In England that precise question cannot arise,
since corporations are not within the British Bankrupt Acts. It
is, however, held by the English courts, that where a shareholder
becomes bankrupt, debts owing to him by the company may by
* So-called set-off by agreement ' Sawyer v. Hoag, 17 Wall. 610;
■with the company is really payment, Bailsman v. Kinnear, 79 Fed. 172;
and is valid. Goodwin v. McGehee, 15 24 C. C. A. 473.
Ala. 232, 249. See infra, § 794, § 797. Cf . Bovlton Carbon Co. v. Mills,
As to crediting sums paid promoters, 78 Iowa 460; 43 N. W. 290; 5 L. R.
JVos/i V. ifoseniM (Cal.), 94 Pac. 850. A. 649; HaU v. U. 8. Ins. Co., 5
' Black & Co.'s Case, 8 Ch. 254; Gill 484.
Washington Diamond Co. (1893), 3 * Orissell's Case, 1 Ch. 528.
Ch. 95; Whitehouse & Co., 9 Ch. D. Cf. Addison v. Pacific Coast MiM-
595; Hiram Maxim Lamp Co. (1903), ing Co., 79 Fed. 459 (holding that a
1 Ch. 70 (where the company went shareholder who is indebted to the
into liquidation after plea of set-off company for unpaid subscriptions
but before judgment in an action by cannot in respect to a claim against
the company against the share- the company for wages have the
holder to recover the call). benefit of a statute making claims
But see Clark's Case, 7 Eq. 550. for wages preferred claims) ; Somer-
Cf. Holden's Case, 8 Eq. 444 set Nat. Banking Co. v. Adams, 72
(where an attempt was made to pay S. W. 1125; 24 Ky. Law Rep. 2083.
calls with coupons cut from the ^ Grissell's Case, 1 Ch. 528.
company's debentures) ; Be G. E. » ScovUl v. Thayer, 105 U. S. 14^
B. (1903), 2 K. B. 340. ' Sawyer v. Hoag, 17 WaU. 610.
612
§ 739-§ 807] INTEREST § 760
virtue of the provision in the bankrupt law for set-off of mutual
debts be set off against calls, whether the debt is less than the
calls, so that the question arises in the bankruptcy proceeding,'
or whether it is greater than the calls, so that the question must
be decided in the winding-up of the company.^ A shareholder
who is also a creditor of the company may prove against it in
liquidation proceedings pari passu with other creditors even
though his shares are not fully paid-up, provided only all calls
then due have been paid.^ The question whether set-off can
be allowed against a shareholder's statutory liability to creditors
is entirely distinct and is not here considered.*
§ 760. Liability of Shareholders for Interest. — As a share-
holder is not in default until a call is made and the requisite
notice given, it follows that interest should not begin to run
against him until that time; and such is undoubtedly the law.^
On the other hand, upon the expiration of the prescribed period
of notice, interest runs against the shareholders in default, ac-
cording to some authorities in the discretion of the jury* and
according to others as a matter of right.' So, where by the
terms of a subscription to shares, payment is to be made in
regular monthly instalments, the instalments should ordinarily
carry interest from the time they respectively fall due.' If a
statute expressly enact that interest shall run on overdue calls,
the interest will be recoverable whether the declaration contain
' Re Duckworth, 2 Ch. 578. interest and no call for payment) ;
Cf. Kingstown Yacht Clvb, 21 L. Johnson v. Lyt&e's Iron Agency, 5
R. Ir. 199; Re G. E. B. (1903), 2 K. Ch. D. 687.
B. 340. ° Musgrave v. Morrison, 54 Md.
' Ex parte Strang, 5 Ch. 492. 161 ; Frank v. Morrison, 55 Md. 399.
' GrisseU's Case, 1 Ch. 528. ' Hambletonv.Glenn,72Md. 331;
* As to this see Cahill v. Original 20 Atl. 115 (as to law of Virginia);
Big Gun, etc. Ass'n, 94 Md. 353; 50 North River Meadow v. Shrewsbury
Atl. 1044; 89 Am. St. Rep. 434; 3 Church, 22 N. J. Law 424; 53 Am.
Clark & Marshall on Priv. Corps., Dec. 258; Gould v. Oneonta, 71 N.Y.
§ 827, and cases cited. 298; McCoy v. World's Columbian
' Hambleton v. Glenn, 72 Md. Exposition, 186 111. 356; 57 N. E.
331; 20 Atl. 115; Jackson, etc. Ins. 1043; 78 Am. St. Rep. 288. Cf.
Co. V. PToZZe, 105 La. 89; 29 So. 503. Lackey v. Richmond, etc. R. Co.,
Cf. Seattte Trust Co. v. PUner, 18 17 B. Monr. (Ky.) 43.
Wash. 401; 51 Pac. 1048 (holding Contra: Frank v. Morrison, 55
that interest does not run on a note Md. 399. Cf. American Pastoral Co.
given in payment of a subscription v. Gurney, 61 Fed. 41.
to shares, even after maturity, where ' Hawkins v. Citizens' Real Esr
there was no express stipulation for tate, etc. Co. (Oreg.), 64 Pac. 320.
613
§761
PAYMENT FOR SHARES
[Chap. XIII
a count for interest or not.' A provision in a company's regu-
lations stipulating that overdue calls shall carry interest at a
high rate applies only to calls made by the company while a
going concern, and not to calls made by the liquidator or receiver
in the winding-up.^ In England interest is allowed on unpaid
calls under the statute, 3 & 4 Will. 4, c. 42, § 28.^
§ 761. Statute of Limitations as Defence. — The statute of
limitations begins to run when a call is made and notice given,*
but not before that time,^ except in a few states in which it runs
from the date of the defendant's subscription.^ If by the terms
of the subscription the shareholder agrees to pay at some fixed
■ Southampton Dock Co. v. Rich-
ards, 1 Man. & Gr. 448.-
As to statutes allowing interest
by way of penalty for non-payment
of calls, see further, Lackey v. Rich-
mond, etc. R. Co., 17 B. Monr. (Ky.)
43.
^ Welsh Flannel Co., 20 Eq. 360.
= Ex parte Lintott, 4 Eq. 184;
Barrow's Case, 3 Ch. 784; Welsh
Flannel Co., 20 Eq. 36t).
But cf. Stocken's Case, 3 Ch. 412.
See also Faure Electric, etc. Co.
v. Phillipart, 58 L. T. 525.
* Baltimore, etc. Turnpike Co. v.
Barnes, 6 H. & J. (Md.) 57; Western
R. R. Co. V. Avery, 64 N. Car. 491.
Cf. Morrison v. Savage, 56 Md.
142.
« Glenn v. Williams, 60 Md. 93;
ScovUl V. Thayer, 105 U. S. 143
(where the company had become a
bankrupt); Taggart v. Western Md.
R. R. Co., 24 Md. 563, 597; 89 Am.
Dec. 760; Hawkins v. Glenn, 131
U. S. 319; 9 Sup. a. 739; Glenn v.
Marbury, 145 U. S. 499; 12 Sup. Ct.
914; Moses v. Ocoee Bank, 1 Lea
(Tenn.) 398; Curry v. Woodward,
53 Ala. 371 ; Vanderwerken v. Glenn,
85 Va. 9; 6 S. E. 806; Semple v.
Glenn, 91 Ala. 245; 6 So. 46; 9 So.
265; 24 Am. St. Rep. 894; Glenn v.
Howard, 81 Ga. 383; 8 S. E. 636;
12 Am. St. Rep. 318; Great Westr-
ern Td. Co. v. Gray, 122 111. 630;
14 N. E. 214; Glenn v. Macon, 32
Fed. 7; Glenn v. Liggett, 135 TJ. S.
533; 10 Sup. Ct. 867; Brockway v.
Gadsden, etc. Land Co., 102 Ala. 620;
15 So. 431; Union Savings Bank v.
Leiter, 145 Cal. 696; 79 Pac. 441;
Otter View Land Co.'s Receiver v.
Bowling's Extx., 70 S. W. 834; 24
Ky. Law Rep. 1157; Cook v. Car-
penter, 61 Atl. 799; 212 Pa. 165;
108 Am. St. Rep. 854; Haggert
Bros. Mfg. Co., 19 Ont. App. 582.
Cf . New England Fire Ins. Co. v.
ffa?/«cs, 71 Vt. 306; 45 Atl. 221; 76
Am. St. Rep. 771; Union Savings
Bank v. Leiter, 145 Cal. 696, 709;
79 Pac. 441 (where a call was made
and then rescinded, and a subse-
quent call made); West v. Topeka
Savings Bank, 66 Kans. 524; 72
Pac. 252; 97 Am. St. Rep. 385; 63
L. R. A. 137; Fitzgerald's Estate v.
Union Sav. Bank, 90 N. W. 994; 65
Nebr. 97.
° Great Western Tel. Co. v. Purdy,
83 Iowa 430; 50 N. W. 45 (affirmed,
in so far as federal questions were
decided, in 162 U. S. 329; 16 Sup.
Ct. 810); Harris v. Gateway Land
Co., 29 So. 611; 128 Ala. 652.
Cf. Pittsburgh, etc. R. R. Co. v.
Plummer, 37 Pa. St. 413; Chilberg
V. Siebenbaum, 41 Wash. 663; 84
Pac. 598 (holding that against the
derivative right of creditors the
statute begins to run upon the de-
clared or notorious insolvency of the
corporation).
614
§ 739-§ 807] WHO ARE SUBJECT TO THE LIABILITY § 762
time or times, then, as stated above, there is no necessity for a
call, and consequently the statute of limitations begins to run
as soon as, by the terms of the subscription, payment becomes
due.^ The period applicable would seem to be that which gov-
erns actions on simple contract; but in an English case, the
court held that the claim was founded upon a statute, the incor-
poration act, which is deemed a specialty, and that accordingly
the action would not be barred until the lapse of the period
applicable to actions on specialties.^ An Alabama case holds
that after the lapse of twenty years the subscription will be
presumed to have been paid, although no call had been made,
so that the statute of limitations would not be a bar ; '" but it
would seem that the same reasons which prevent limitations
from running should also prevent the rise of any presumption
of payment from mere lapse of time. The fact that the remedy
of the corporation against a shareholder is barred by limitations
does not have the same effect as actual payment, and hence the
shareholder in such a case has no right to a certificate stating
the shares to be paid-up.^
§ 762-§ 773. Who are subject to the Liability.
§ 762. Actual Shareholders as distinguished from mere Sub-
scribers. — The liability incident to the status of shareholder
attaches to those persons, and those only, who have actually
attained that status.' What is necessary and what is not neces-
sary in order to constitute a person a shareholder has been
aheady considered, and need not be repeated." When a sub-
scriber attains the status of a shareholder, he becomes subject
to the liabilities of a shareholder. For example, as the issue of
a share-certificate is not necessary in order to make a man a
shareholder, it follows that he may be held for calls without
proof of the issue or even of the readiness to issue the same.'
' Williams v. Matthews, 103 Va. * Johnson v. Albany, ete. R. R.
180; 48 S. E. 861; WiUiams v. Co., 54 N. Y. 416.
Taylor, 99 Md. 306; 57 Atl. 641. » New Brunswick, etc. Ry. Co. v.
' Cork, etc. Ry. Co. v. Goode, 13 Muggeridge, 4 H. & N. 580. See
C. B. 826. infra, § 778.
' Semple v. Glenn, 91 Ala. 245; ' Supra, § 170 et seq.
6 So. 46; 9 So. 265; 24 Am. St. ' Hawley v. VpUm, 102 U. S.
Rep. 894. 314. Cf. supra, § 171.
615
§ 763 PAYMENT FOR SHARES [ChAP. XIII
§ 763. Owners of Shares at Time of Call liable. — As between
successive owners of shares, by transfer and so forth, the liability
to pay calls attaches to the person who holds the shares when
the call is made. The date when the call is payable is not
material ; the crucial point is the date of the making of the call.^
Prima facie, this means the date of the passage of the resolu-
tion making the call ; but as we have seen a resolution may be
passed that a call be made at some fixed date in the future, and
in such a case the liability attaches to the person who holds the
shares at the date so fixed.
§ 764. Criterion of Ownership of Shares for this Purpose. —
For the purposes of this rule, the ownership of the shares must in
general be determined by the company's share register or stock-
book.^ One of the most important reasons for requiring tKe
company to keep a register of its members is to enable it to
know who may be held liable as shareholders at any given
time. Hence, the register must serve this function. If, how-
ever, the register is erroneous through the company's own fault,
the person whose name is improperly registered will be exempted
from liability, and the person whose name ought to have been
registered will be liable in his stead.' It is often thought that
the liability of a person whose name is registered as shareholder
while the entire beneficial interest is in another must rest upon
' Campbdl v. American AlkUi 61 Atl. 804; 212 Pa. 177; People's
Co., 125 Fed. 207; 113 Fed. 398; 61 Home Sav. Bank v. StadtmvUer
C. C. A. 317. (Cal.), 88 Pac. 280 (where a statute
^ Giesen v. London, etc. Mge. Co., expressly enacted that an unregis-
102 Fed. 584; 42 C. C. A. 516; tered transfer should not be valid ex-
Ritssell V. Easterhrook, 71 Conn. 50; cept as between the parties).
40 Atl. 905 ; Visalia, etc. R. R. Co. v. But see Cutting v. Damard, 88
■Hyde, 110 Cal. 632; 43 Pac. 10; 52 N. Y. 410; Dain Mfg. Co. v. Trumr-
Am. St. Rep. 136; Plumb v. Bank bvU Seed Co., 95 Mo. App. 144; 68
of Enterprise, . 48 Kans. 484 ; 29 S. W. 951 ; Vale Mills v. Spalding,
Kans. 699; WorraU v. Judson, 5 62 N. H. 605.
Barb. 210; Johnson v. SomerviUe ' Hunt v. Seeger, 98 N. W. 91;
Dyeing, etc. Co., 15 Gray (Mass.) 91 Minn. 264; Earie v. Carson, 188
216; Brown v. Morton, 58 Atl. 94; U. S. 42; 23 Sup. Ct. 254 (as to
71 N. J. Law 26; Hurlburt v. Ar- statutory liability under National
thur, 140 Cal. 103; 73 Pac. 734; 98 Banking Act); Hayes v. Shoemaker,
Am. St. Rep. 17; White v. Commer- 39 Fed. 319 (same point as last case) ;
cial, etc. Bank, 66 S. Car. 491 ; 45 S. Bracken v. Nicol (Ky.), 99 S. W. 920 ;
E. 94; 97 Am. St. Rep. 803; Sher- Smith v. Bank of N ova Scotia, 8 Can.
wood V. lUinois Trust, etc. Co., 195 Sup. Ct. 558; Alston's Cose, 22 Vict,
ill. 112; 62 N. E. 835; 88 Am. St. L. R. 243 n.
Rep. 183; Cook v. Carpenter (Pa.), See infra, § 861.
616
§ 739- § 807] EFFECT OF TRANSFERS § 765
estoppel; but if the theory of the legal title to shares which is
advocated below is correct, the liability of the registered share-
holder rests rather on the fact that he is the holder of the legal
title. In order that the registered owner be held liable, the doc-
trine of estoppel' need be resorted to only when by statute a
trustee of shares is exempted from liability.' The cases which
deal with the question whether the registered holder or the
"true owner" is the person subject to the statutory liability to
creditors ^ depend perhaps upon somewhat different considera-
tions, and are not treated here.
§ 765. EfCect of Transfer of Shares upon Liability. — It follows
that a transfer of shares completed by a proper entry in the
company's books releases the transferor from all liability for
subsequent calls.' This is true although the transferor was the
original allottee,* his case not being assimilated to that of an
original lessee of land, whose liability persists in spite of an
assignment of the term. Probably, a transfer would release the
original allottee from future liability even though he might have
expressly promised at the time of subscribing to the shares to
pay their par value.* A transfer works a complete novation, so
that the transferee may be sued in assumpsit for any calls made
after the transfer, although he may have made no express prom-
ise to pay the same ; " and a declaration or complaint charging
the defendant as subscriber to shares has been held to be sus-
tained by proof that the defendant acquired shares by transfer.''
' See infra, § 769. Commercial Nat. Bank v. Gibson, 37
= E. g. Ohio VaUey Nat. Bank v. Nebr. 750, 764-765; 56 N. W. 616.
Hvlitt, 204 U. S. 162; White v. Cf. AuLtman's Appeal, 98 Pa. St.
Marquardt, 105 Iowa 145; 74 N. 505 (semble). See also infra, § 766.
W. 930. As to liability under the ' But see Schenectady, etc. Co. v.
National Bank Act, see also infra, Thatcher, 11 N. Y. 102, 108.
p. 621, n. 3, and p. 622, n. 2. « Webster v. Upton, 91 U. S. 65;
' Brinkley v. Hambleton, 67 Md. Visalia, etc. B. R. Co. v. Hyde, 110
169, 176; 8 Atl. 904 (semble). Cal. 632; 43 Pac. 10; 53 Am. St.
* Hvddersfield Canal Co. V. Btick- Rep. 136; Bend v. Susquehanna
ley, 7 T. R. 36; Rochester, etc. Land Bridge Co., 6 H. & J. (Md.) 128; 14
Co. V. Raymond, 158 N. Y. 576; 53 Am. Dec. 261; Sigua Iron Co. v.
N. E. 507; 47 L. R. A. 246; Stewart Brown, 171 N. Y. 488; 64 N. E. 194.
V. Walla Walla, etc. Pub. Co., 1 Wash. Cf. Bell's Appeal, 115 Pa. St. 88; 8
St. 521; 20 Pac. 605; Finletter v. Atl. 177; 2 Am. St. Rep. 532 (review-
Acetylene Light Co., 215 Pa. 86; 64 ing earlier Pennsylvania cases) ; Reid
Atl. 429. V. Dejarnette, 123 Ga. 787 ; 51 S. E. 770.
Contra in Nebraska by virtue of ' Glenn v. Porter, 73 Fed. 275;
a provision in the state constitution. 19 C. C. A. 503.
617
§ 765 PAYMENT FOR SHARKS [ChAP. XIII
As intimated above/ however, the transferor and not the trans-
feree is liable for any calls that were made prior to the transfer/
even though payable afterwards.' The transferor is not, how-
ever, relieved from Uability for future calls, whether the transfer
be absolute or security for a debt, until the transfer is registered,*
unless the failure to register is occasioned by the company's own
wrongful refusal.^ Accordingly the transferor refnains liable
when the transfer books were lawfully closed when the transfer
was presented for registration, and the company became in-
solvent before the transfer could be registered." If the transferor
promise the transferee to pay future calls, the question whether
the company can sue upon that promise depends upon the law
of the lex fori as to the right of a stranger to sue upon a con-
tract performance of which would inure in part to his benefit.''
In order that the transfer should relieve the transferor from
future liability, the only requirement in England is that the
transfer be absolute, the transferor retaining no interest in the
shares.' The American law, on the other hand, refuses to
relieve the transferor from liability where the assignment was
made with knowledge of the company's failing condition and
for the purpose of escaping liability and where the transferee
is insolvent." Even in America, a creditor who has acquired
' Supra, § 763. ed., 1122-1124. Cf. Nat. Bank v.
' Visalia, etc. R. R. Co. v. Hyde, Case, 99 U. S. 628. But see Discov-
110 Cal. 632; 43 Pac. 10; 62 Am. erers' Finance Corp. (1908), 1 Ch.
St. Rep. 136. 141 (holding that the fact of the
' Campbell v. American Alkili transfer being "out and out" is not
Co., 125 Fed. 207; 61 C. C. A. conclusive against the transferor's
317. continuing liability).
* Plumb V. Bank of Enterprise, Cases where the transfer is merely
48 Kans. 484; 29 Pac. 699; Mc- colorable, the transferor retaining
Donald v. Dewey, 134 Fed. 528; 67 the beneficial ownership, constitute
C. C. A. 408; Kenyan w. Fowler, 155 an exception to the rule that the
Fed. 107, 109; Knickerbocker Trust trustee and not the cestui que trust
Co. V. Myers, 133 Fed. 764 (affirmed of shares is Uable in respect thereof,
in 139 Fed. 111). See also cases See King's Case, 6 Ch. 196; Massey
cited supra, § 764. & Griffin's Case (1907), 1 Ch. 582.
» Seesupra,§ 764, and infra, §861. Cf. Cox's Case, 33 L. J. Ch. 145
° Cook V. Carpenter, 61 Atl. 804; (where the trust was created in order
212 Pa. 177. to "bull" the company's shares in
' See Crown Slate Co. v. Allen, the market).
48Atl. Rep. 968; 199 Pa. 239. But " Aultman's Appeal, 98 Pa. St.
d. Discoverers Finxmce Corp. {\9QS), 505; Burt v. Real Est. Exch., 175
1 Ch. 141. Pa. St. 619; 34 Atl. 923; 52 Am. St.
* 2 Lindley on Companies, 6th Rep. 858; Bowden v. Johnson, 107
618
§ 739-§ 807]
EFFECT OF TRANSFERS
§765
shares as security for a debt is relieved from any future liability
by a transfer in exercise of a power of sale contained in the
contract of hypothecation, although the sale was made for a
nominal consideration and although his only motive in making
it was to escape liability as shareholder.' Even if a transfer
be colorable merely, so that the company might continue to
hold the transferor liable as shareholder, yet if it registers the
transfer and sues the transferee to collect a call, it cannot there-
after change front and sue the transferor.^ Although perhaps
a transfer from the insolvent transferee to a solvent person would
relieve the first transferor from further liability, yet the burden
is upon the latter to establish the defence by proving the solvency
of the second transferee.' A transfer to a fictitious transferee
will, of course, leave the transferor liable.*
If the transfer is made to a bona fide purchaser without notice
that the shares are not paid-up, the purchaser, as will presently
be shown, incurs no liability,' and therefore necessarily the
vendor remains liable for any sum which the company is thus
prevented from collecting from the purchaser.'
U. S. 251; 2 Sup. Ct. 246; Rider v.
Morrison, 54 Md. 429, 444 (headnote
inadequate) ; People's Home Savings
Bank v. Richard, 139 Cal. 285; 73
Pac. 858; Stuart v. Hayden, 169
U. S. 1; 18 Sup. a. 274 (distin-
guished in Earle v. Carson, 188 U. S.
42 ; 23 Sup. Ct. 254) ; Gottschalk v.
Stover, 85 Mo. App. 566; Lamson v.
Hutchings, 118 Fed. 321 (transferor
liable at law and not merely in
equity); Baker v. Reeves, 85 Fed.
837 (both transferor and transferee
liable); McDonald v. Dewey, 202
U. S. 510; 26 Sup. Ct. 731 (burden
of proving solvency of transferee on
defendant); Earle v. Carson, 188
U. S. 42; 23 Sup. Ct. 254; Central
Agricidtural, etc. Ass'n v. Gold Life
Ins. Co., 70 Ala. 120 (burden of prov-
ing solvency of transferee on trans-
feror). Anglo-American Land, etc.
Co. v. Lombard, 132 Fed. 721, 738-
739 (transfer of all the shares
together with all the assets of the
company to another corporation);
McDonald v. Dewey, 202 U. S. 510;
26 Sup. Ct. 731 (as to whether the
transferor can be held liable for the
benefit of subsequent creditors).
Cf. McConey v. Belton Oil, etc.
Co., 97 Minn. 190; 106 N. W. 900
(holding that if transfer proved to
have been made without considera-
tion and when company was insol-
vent, "fraudulent" intent to escape
liability is presumed).
' Magruder v. Colston, 44 Md.
349; 22 Am. Rep. 47.
' Rochester, etc. Land Co. v. Ray-
mond, 158 N. Y. 576; 53 N. E. 507;
47 L. R. A. 246.
But see People's Home Savings
Bank v. Rickard, 139 Cal. 285; 73
Pac. 858 (where the company was
insolvent).
' People's Home Savings Bank v.
Rickard, 139 Cal. 285; 73 Pac.
858.
* Muskingum Valley, etc. Co. v.
Ward, 13 Oh. 120; 42 Am. Dec. 191.
Cf. infra, § 879.
' Infra, § 800.
° McBryan v. Universal Elevator
619
766
PAYMENT FOR SHARES
[Chap. XIII
A transferee of shares, who is duly registered, cannot escape
liability for calls by showing that he was induced to purchase
the shares by the fraud of the transferor, even though the trans-
feror was an officer of the company.'
§ 766. Statutes making: former Shareholders liable notwithstand-
ing Transfer. — Statutes sometimes provide that past members
of a corporation shall continue liable for calls for some time after
the transfer.^ In such cases, the transferor is a qvasi surety for
the transferee, and if he is called upon to pay has a right to
compel the transferee, or whoever holds the shares at the time of
the call, to reimburse him.'
§ 767. Liability in respect of Shares held in Trust, etc. — Lia-
bility of Holder of Legal Title. — The liability ordinarily, and in
the absence of statute, attaches to the holder of the legal title
to the shares. For example, where shares are held in trust, the
trustee and not the cestui que trust is liable ; ' but he has of course
a right to be indemnified by the trust estate,' or if the benefi-
Co., 89 N. W. 683; 130 Mich. Ill;
97 Am. St. Rep. 453.
Contra: Wiarton Beet Sugar Co.,
12 Ont. L. R. 149.
• Hart V. Globe Ins. Co., 113 Fed.
307.
Cf. Stufflebeam v. DeLashmvM,
83 Fed. 449. See also infra, § 963.
' See Spragtie v. National Bank
of America, 172 111. 149; 50 N. E.
19; 64 Am. St. Rep. 17; 42 L. R. A.
606; Pittsburgh, etc. R. R. Co. v.
Clarke, 29 Pa. St. 146.
' Infra, § 972.
* M iichell's Case, 9 Eq. 363; Wil-
liams' Case, 1 Ch. D. 576 (headnote
inadequate); Ex parte Bugg, 2
Drewiy & Sm. 452; Hawkins v.
Glenn, 131 U. S. 319; 9 Sup. Ct. 739;
Pullman v. Upton, 96 U. S. 328, 330;
McKim V. Glenn, 66 Md. 479 ; 8 Atl.
130; Hampton v. Foster, 127 Fed.
468 ; Union Savirigs Bank v. Willard
(Cal.), 88 Pac. 1098; Kerr v. Urie, 86
Md. 72 ; 37 Atl. 789 ; 63 Am. St. Rep.
49S; 38 L. R. A. 119 (where the
cestui que trust was an infant).
But see Ulster Ry. Co. v. Bain-
bridge, Ir. Rep. 2 Eq. 190; Lloyd v.
Preston, 146 U. S. 630, 644-645; 13
Sup. Ct. 131 (arising under an Ohio
statute enacting that cestuis que
trust of stock should be deemed
stockholders).
Cf. Preston v. Grand Collier Dock
Co., 11 Sim. 327 (where the cestui
que trust was the company itself);
Colonial Investment & Agency Co.,
19 Vict. L. R. 381 (where the cestui
que trust was the company itself and
where the argument that the com-
pany itself had paid for the shares
in full did not prevail); Winston v.
Dorsett, etc. Co., 129 111. 64; 21 N. E.
614; 4 L. R. A. 507 (where the
shares were held in trust for the
other shareholders) ; Andrews v. Nat.
Foundry, etc. Works, 76 Fed. 166;
22 C. C. A. 110; 77 Fed. 774; 23
C. C. A. 454 (where the shares were
held by a mortgagee from the com-
pany). As to cases where the cor-
poration is the cestui que trust, see
further, supra, § 202.
' Mitchell's Case, 9 Eq. 363 (sem-
ble); Morse v. Pacific Ry. Co., 93
111. App. 33, 37 (semble).
620
§ 739- § 807] SHARES HELD IN TRUST § 767
ciary be sui juris by the cestui qvs trust personally.^ If the
name of the trustee and not that of the cestui que trust appears
on the company's books, the former is liable under the doctrine
which has been meptioned above, that ordinarily the registered
shareholder should be liable ; but if the shares are registered in
the name of "A, trustee for B," then A's liability can rest
only upon the ground that the trustee, or holder of the legal
title, is the person who is subject to the burdens of ownership.^
The rule that the trustee and not the beneficiary is liable as
shareholder applies even where the trust is created by the cestui
que trust for the purpose of avoiding liability,^ unless indeed
the cestui que trust has already become the legal owner of the
shares, or at any rate has agreed with the company to take
them, before they are put in the name of his nominee or
trustee.* The rule exempting the cestui que -trust from direct
personal liability to the company has been applied where the
trustee or nominee was an infant.* But where shares are regis-
tered in the name of a married woman who was incapable of
contracting and signed the application at her father's instance
and in ignorance of its effect, the court held that the daughter
was not a trustee for the father, but that her name was a mere
alias for his, just as if a fictitious name had been used, so that he
was liable as shareholder.' A person to whom shares are trans-
ferred as security for a debt and who is registered as share-
' Hardoon v. BelUios (1901), 33 C. C. A. 574; Ohio Valley Nat.
A. C. 118. Bank v. HulUt, 204 U. S. 162 — may
' Union Sav. Bank v. Willard be supported on the ground that the
(Cal.), 88 Pac. 1098. National Banking Act expressly pro-
' King's Case, 6 Ch. 196 (semble) ; vides that trustees shall not be per-
Higgins v. Fidelity Ins., etc. Co., 108 sonally liable, but that the trust
Fed. 475 ; 46 C. C. A. 509 (where a estate shall be liable instead,
pledgee of shares had them registered * See supra, § 765.
in the name of an employee rather ' Massey & Griffin's Case (1907),
than in his own); Hayes v. Fidelity 1 Ch. 582. But see Victorian Mtge.,
Ins., etc. Co., 105 Fed. 160. etc. Bank v. Australiian Financial,
The cases holding that the "real etc. Co., 19 Vict. L. R. 680 (where
owner" of shares in a national bank the cestui que trust had procured the
may always be liable as shareholder, company's assent to the transfer by
— e. g. American Alkali Co. v. Kurtz, a fraudulent representation that the
134 Fed. 663 ; Dunn v. Howe, 107 infant had paid value for the shares).
Fed. 849 ; 47 C. C. A. 13 (holding » Pugh and Sharsman's Case, 13
that both the registered holder and Eq. 566.
the "real owner" may be liable); Cf. Hvlitt v. Ohio Valley Nat.
HoughtoA v. Hubbell, 91 Fed. 453; BonA;, 137 Fed. 461 ; 69 C. C. A. 609.
621
§ 768 PAYMENT FOR SHARES [ChAP. XIII
holder is liable in respect of the shares.' Even if the shares
were registered in his name expressly as pledgee, it would seem
that he might well be deemed the holder of the legal title and
therefore liable.^
§ 768. Liability of Executor or Administrator. — Even an ex-
ecutor who applies for shares qua executor is liable personally in
respect thereof/ with, however, the same right of indemnity as a
trustee. Upon a shareholder's death, although the title to the
shares devolves upon his executor, yet the latter is liable for calls
made before or after the testator's death, not individually, but in
his representative capacity,* unless the shares are with his consent
registered in his name.^ The liabilities of an executor or adminis-
trator of a deceased shareholder are considered at length below.*
§ 769. American Statutes exempting Trustees, Executors, Pledg-
ees, etc., from personal Liability. — In the United States, statutes
are frequently found which enact that a trustee, executor,
or pledgee of shares shall not be liable in respect thereof, but
that the cestui que trust, the estate of the testator, or the pledgor,
shall be liable instead.' The United States Supreme Court has
held that such a statute exempts from liability one who has
accepted shares of stock as collateral security for a debt of the
company,' and that the exemption may be claimed although the
certificates of stock and the entries on the company's books do
not disclose the fact that the shares are not held in his own right
by the apparent owner,' and although the registered holder
'' Tuthill Spring Co. v. Smith, 90 ' Leeds Banking Co., 1 Ch. 231.
Iowa 331; 57 N. W. 853; Bend v. * Houldsworth v. Evans, L. R. 3
Sicsquehanna Bridge Co., 6 H. & J. H. L. 263; Baird's Case, 5 Ch. 725.
(Md.) 128; 14 Am. Dec. 261; Pvll- See also infra, § 976.
many. Upton, 96 U. S. 328; People's » Buchan's Case, 4 A. C. 549.
Home Savings Bank v. Eauer (Cal.), ° Infra, § 976 et seq.
84 Pac. 329. ' In addition to cases cited below,
' But see Pavly v. State Loan, etc. see Fowler v. Gowing, 152 Fed. 801 ;
Co., 165 U. S. 606; 17 Sup. Ct. 465. Lucas v. Coe, 86 Fed. 972; Sayles v.
This case arising under the National Bates, 15 R. I. 342, 345 (headnote
Banking Act, there was a dilemma : inadequate) ; 5 Atl. 497 (as to a suit
if the creditor was invested with against the trustee in order to reach
legal title to the hypothecated the assets of the trust estate). And
shares, he was a trustee, and as see supra, p. 621 n. 3.
Buch exempted from liability by ' Burgess v. Seligman, 107 U. S.
the express terms of the statute ; 20 ; 2 Sup. Ct. 10.
and if he was not the holder of the » Burgess v. Seligman, 107 U. S.
legal title, he was exempted because 20 ; 2 Sup. Ct. 10 ; McMahon v.
he was not a shareholder. Macy, 51 N. Y. 155; Colonial Trust
622
§ 739-§ 807] BANKRUPTCY OF SHAREHOLDER § 771
may have voted on the shares.' Other courts, however, have
held that the statute is no protection unless the company's
books disclose the fact that the shares were held in a fiduciary
capacity.^
§ 770. Infant Shareholders. — The right of an infant who
has subscribed to the shares of a corporation to repudiate the
contract, disown the shares, and escape liability, has already
been considered.' So, too, the status of an infant transferee of
shares is considered below.* Inasmuch as the obligation to pay
for shares attaches to the ownership thereof, it follows that an
' infant who has become the owner of shares not by virtue of con-
tract, but by will or by devolution of law, may be Kable as share-
holder unless he disown the shares.'
§ 771. Effect of Bankruptcy of Shareholder. — If any of the
shareholders becomes bankrupt, the company may prove against
his estate for any calls that were overdue at the time of the
bankruptcy." If, however, the company has a lien on the shares
for overdue calls, it must either deduct from its claim the
market value of the shares and prove merely for the balance, or
else it must surrender its lien for the general benefit of all cred-
itors.' Under bankrupt laws which permit proof for contingent
claims, a corporation cannot prove in respect of its potential
claim for future calls, estimated according to the probabilities
of calls being made ; * but where th^ statute provides for proof
Co. v. McMillan, 188 Mo. 547; 87 liability. Nat. Bankv.Case,99V.S.
S. W. 933; 107 Am. St. Rep. 335. 628, 631; Paidy v. State Loan &
Cf. May V. Genesee County Savings Trust Co., 165 U. S. 606; 17 Sup. Ct.
Bank, 120 Mich. 330; 79 N. W. 630. 465 (semble).
' Burgess v. Sdigman, 107 U. S. ' Supra, § 198.
20; 2 Sup. Ct. 10. * Infra, § 877.
" Hurlburt v. Arthur, 140 Cal. * Leeds, etc. Ry. Co. v Fearnley, 4
103; 73 Pac. 734; 98 Am. St. Rep. Ex. 26, 31 (semble).
17; Sherwood v. Illinois Trust, etc. » Be McMahon (1900), 1 Ch. 173;
Co., 195 m. 112; 62 N. E. 835; 88 Glenn v. Howard, 65 Md. 40, 58; 3
Am. St. Rep. 183; Morse v. Pacific Atl. 895.
Ry. Co., 93 111. App. 33; Adams v. ' Be Jennings, 1 Ir. Ch. 236, 243-
Clark (Colo.), 85 Pac. 642 (a well con- 244.
sidered case). Compare the cases ' Glenn v. Howard, 65 Md. 40;
in which the United States Supreme 3 Atl. 895 ; Sayre v. Glenn, 87 Ala.
Court has declared that a person 631; 6 So. 45; Furdonjee's Case, 3
who is registered as shareholder in Ch. D. 264.
a national bank is liable by estoppel Under some insolvent laws the
although the National Banking Act corporation's potential claim is dis-
expressly exempts trustees from charged by the release, although not
623
§ 772 PAYMENT FOR SHARES [ChAP. XIII
for any liability or possibility of an obligation to pay money or
money's worth, the potential claim for future calls has been
held to be provable.^ In consequence of such proof, however,
the shares do not become fully paid shares, although the bankrupt
is discharged from all personal liability in respect of them ; and
consequently the assignee cannot receive any dividends in the
liquidation or winding-up of the company without first paying
the amount which after receipt by the company of the dividend
from the bankrupt's estate still remains unpaid on the shares.^
The assignee or trustee in bankruptcy is at liberty to refuse to
accept the shares if he deems the ownership of them too onerous ; '
and if he do so, neither he nor the assets in his hands will be, it
seems, subject to any individual liability for debts of the company
imposed by statute upon shareholders.*
§ 772. Holder of less than minimum or more than maximum
Number of Shares allowed to one Person. — A provision in a
company's regulations that no person shall be allowed to hold
less than a certain number of shares will not have the effect of
exonerating from liability a person who holds less than such
minimum ; ^ and similarly a provision that no person shall hold
more than a certain number of shares will not relieve from
liability a person who holds more than the maximum."
§ 773. Hold«r of Shares issued without Authority of Law or
Irregularly. — ■ The question is often raised whether ownership
of shares issued without authority of law or irregularly will
provable. See Glenn v. Clabaugh, Ch. 173 (where the contrary propo-
65 Md. 65, 67; 3 Atl. 902 (semble). sition was assumed by counsel and
In one case the Uability for un- court),
called subscriptions to capital was ' Sayre v. Glenn, 87 Ala. 631;
deemed to be a present debt sol- 6 So. 45; Glenn v. Howard, 65 Md.
vendum in future, and as such prov- 40; 3 Atl. 895.
able against the bankrupt estate. Cf. Re Hooley (1899), 2 Q. B.
Glenn v. AbeU, 39 Fed. 10. 579; South Staffordshire Ry. Co. v.
Cf. Carey v. Mayer, 79 Fed. 926; Burnside, 5 Ex. 129. See also infra,
25 C. C. A. 239; South Staffordshire § 983.
Ry. Co. V. Burnside, 5 Ex. 129. ■• American File Co. v. Garrett,
' Re McMahon (1900), 1 Ch. 173. 110 U. S. 288; 4 Sup. Ct. 90.
For a clear analysis of the Eng- But see Graham v. Piatt, 65 Pac.
Ush oases, which are somewhat con- 30; 28 Colo. 421.
fusing, see 1 Lindley on Companies, ' Leeds Banking Co., 1 Ch. 231.
6th ed., pp. 752-754. ' Hagerman v. Ohio Bldg., etc.
' Rowe's Trustee's Claim (1906), A'ss'n, 25 Oh. St. 186 (leaving the
1 Ch. 1. question open as to the effect of a
But see Re McMahon (1900), 1 similar provision in a statute).
624
§ 739-§ 807] SPECIAL AGREEMENTS § 774
subject the holder to the liabilities incident to ownership of
shares of stock. This question is discussed in connection with
the subject of illegal or irregular increases of capital.'
§ 774-§ 799. SPECIAL AGREEMENTS VARYING NORMAL
LIABILITY — SUBSCRIPTIONS ON SPECIAL TERMS.
§ 774. In general — Validity. — We have given above a
brief statement or description of the liability which normally, if
not most frequently, attaches to the holder of shares in a corpora-
tion ; we must now consider how far the nature or extent of that
liability may be varied by agreement between the company and
the shareholder. The general rule is that subscriptions on
special terms — that is to say, subscriptions on terms which do
not involve an obligation to pay the amount of the shares in cash
as and when called for by the company — are quite permissible.^
For example, a company may stipulate with some applicants for
shares for ^he payment of a deposit on application or allotment
although no such payment is exacted of other subscribers ; ' or
a shareholder may promise to pay his subscription at a fixed date
without any call or notice.* Likewise, the company may exact
from the subscriber a waiver of the general rule of American
law that calls cannot be made until the entire authorized capital
has been subscribed,' or may insist upon a stipulation dispensing
with statutory formalities as to calls and assessments." So, the
■ See supra, § 579, § 592. be made until shares are issued, dif-
" See supra, § 228. fering in ttiis respect from a deposit
It is submitted that even where payable on application or allotment.
a statute expressly lays down the Croskey v. Bank of Wales, 4 Giff.
rule that subscriptions to shares shall 314, 330-331.
be payable on call, yet special con- * Northwood Union Shoe Co. v.
tracts providing for payment in a Pray, 67 N. H. 435; 32 Atl. 770;
different way should not be deemed Ruse v. Bromberg, 88 Ala. 619; 7
prohibited. But see Thigpen v. So. 384.
Mississippi Central R. R. Co., 32 Cf. California, etc. Co. v. CaUender,
Miss. 347. 94 Cal. 120; 29 Pac. 859; 28 Am.
As to the result of an unauthor- St. Rep. 99; Bohrer v. Adair, 61
ized attempt of an agent to make Nebr. 824 ; 86 N. W. 495.
special terms as to the mode of pay- ' Emmitt v. Springfield, etc. R. R.
ment, see Nippenose Mfg. Co. v. Co., 31 Oh. St. 23. See supra, § 754.
Stadon, 68 Pa. St. 256. " People's Home Sav. Bank v.
' Alexander v. Automatic Tele- Sadler (Cal.), 81 Pac. 1029, 1032
phone Co. (1900), 2 Ch. 56. (headnote inadequate).
A call, properly speaking, cannot
VOL. I. —40 625
§ 775 PAYMENT FOB SHAKES [ChAP. XIII
corporation may receive payment in advance of calls, and may
agree to pay interest on the sums so advanced.' So, also, where
shares have been issued subject to payment in a particular
manner, the company may agree to accept payment in any other
mode that it may deem advisable.^
§ 775. Issue of Shares at a Premium. — A peculiar form of
subscription on special terms is exhibited by the issue of shares
at a premium — that is to say, for more than their par value.^
This is an expedient often resorted to in the organization of
banks and trust companies and other corporations upon whose
shareholders there rests some additional statutory liability
regulated as to its amount by the par value of the shares held by
them respectively. In such cases, for the purpose of diminishing
the extent of the statutory liability, all persons who subscribe to
shares are often required to take them at a premium, thus
raising a working capital in excess of the nominal capital of the
company. Although in this way the statute which imposes the
liability is to a certain degree evaded, it seems that the validity of
the practice has never been challenged on that score. The
amount of the premium so voluntarily paid by the shareholder
cannot be claimed as a credit in an action to enforce his lia-
bility upon his unpaid subscription to the capital,* and certainly
cannot be recovered either from the company or the other
shareholders.'*
§ 776. Special Agreements amounting to complete or partial Re-
lease from Liability to pay par Value — Issue at a Discount. — But
while special terms inserted in subscriptions mdy affect the time
or manner of payment, yet they should not amount to a virtual
release from payment, in whole or in part. If a subscriber
accepts shares upon the faith of the company's agreement that
he shall not be called on to pay anything, or at any rate not the
whole of their nominal amount, the stipulation is certainly not
' Lock V. Queendand, etc. Co. v. Matahde, etc. Co. (1901), 2 Ch.
(1896), A. C. 461; Rvaand, etc. R. R. 23. Cf. supra, § 603.
Co. V. ThraU, 35 Vt. 536. As to the effect of issue of shares
See also infra, § 1340. at a premium and as to the rights
' See New Albany v. Burke, 11 of holders of such shares, see supra
WaU. 96. § 522.
' As to whether shares can law- * Musgrave v. Morrison, 54 Md.
fully be issued at par when the 161.
market price is higher, see HUder y: ^ Esgen v. Smith, 84 N. W. 954;
Dexter (1902), A. C. 474; Burrows 113 Iowa 25.
626
§ 739-§ 807]
ISSUE AT A DISCOUNT
§776
countenanced by the law.' In England, in such a case, the
attempt to relieve from payment is quite nugatory, and the
shareholder may be compelled either by the corporation or its
liquidator to pay in full the par value of the shares.^ This
liability exists although the company may be perfectly solvent,
so that creditors could not possibly be injured by the arrange-
ment, and although payment is sought to be enforced for the
benefit of other shareholders ^ who perhaps had themselves
approved or even participated in the arrangement, or who held
their shares by assignment from persons who had approved or
participated therein.*
In the United States, on the other hand, such agreements for
the issue of shares at a discount are by the weight of authority
valid so far as the rights of the assenting shareholders inter sese
are concerned,^ or even as against prior creditors," or subsequent
' As to construing a contract of
subscription, if possible, so as not to
provide for an issue for less than
par, see Tulare Sav. Bank v. Talbot,
ISlCal. 45; 63 Pac. 172.
' Society of Practical Knowledge
v. Abbot, 2 Beav. 559; Ooregum
Gold Mining Co. v. Roper (1892),
A. C. 125.
So in Canada. Northr-West Elec-
tric Co. V. Walsh, 29 Can. Sup. Ct.
33 (where the company declared the
shares forfeited for non-payment of
the full par value).
De Ruvigne's Case, 5 Ch. D. 306,
and other similar cases, which are
sometimes cited as inconsistent with
this rule (see 2 Clark & Marshall on
Priv. Corps., § 401 a), proceed on
principles elsewhere explained. See
infra, § 1619. Cf. InnSs & Co. (1903),
2 Ch. 254; Leinster Contract Corp.
(1902), 1 Ir. 349.
As to what amounts to an issue
at a discount, see Midland Electric,
etc. Co., 37 W. R. 471.
See also infra, § 785, as to issue
for property, services, etc.
' Wdton v. Saffery (1897), A. C.
299.
Cf. Ooregum Gold Mining Co. v.
Roper (1892), A. C. 125; Weymouth,
627
etc. Steam Packet Co. (1891), 1 Ch.
66.
* Society of Practical Krundedge
v. Abbot, 2 Beav. 559.
But see Gold Co., 11 Ch. D. 701.
' Goodnow V. Am. Writing Paper
Co. (N. J.), 66 Atl. 607; Green v.
Abietine Med. Co., 96 Cal. 322; 31
Pac. 100; Arnold v. Searing (N. J.
Ch.), 67 Atl. 831 (holding that a
person claiming under such a con-
tract is not within the rule that a
plaintiff in equity must come into
court with clean hands).
° Rickerson Roller Mill Co. v.
Farrdl, etc. Co., 75 Fed. 554; 23
C. C. A. 302; Handley v. Stutz, 139
U. S. 417, 43'5-436; 11 Sup. Ci. 530;
Peter v. Union Mfg. Co., 56 Oh. St.
181; 46 N. E. 894; Fdker v. Svlli^
van (Colo.), 83 Pac. 213.
But see Marrow v. Nashville Iron
& Sted Co., 87 Tenn. 262; 10 S. W.
495; 10 Am. St. Rep. 658; 3 L. R. A.
37; Zdaya, etc. Co. v. Meyer, 8 N. Y.
Supp. 487; 28 N. Y. St. Rep. 759;
New Haven Trust Co. v. Gaffney, 73
Conn. 480; 47 Atl. 760; Easton
Nat. Bank v. Am. Brick & Tile Co.
(N. J.), 64 Atl. 917 (an able opinion).
In some cases where issue at a
discount is prohibited by statute,
§776
PAYMENT FOE SHARES
[Chap. XIII
creditors who contracted their claims with knowledge of the
circumstances of the previous issue ; ^ and consequently pay-
ment in full can be enforced only by or for the benefit of subse-
quent creditors of the company who were ignorant that the
shares were not really fully paid,^ or perhaps by dissenting
shareholders.^
Even in England, so long as the company continues to be a
going concern, a person to whom shares have been issued at a
discount may repudiate the issue as ultra vires, rescind the
contract, and have his name removed from the register of share-
holders,* unless indeed he be barred by laches.^ Of course it
the courts have held that the at- tracted their claims in ignorance of
tempted issue for less than par is the fact that shares had been issued
wholly void, so that the allottees at a discount will be presumed in
neither enjoy the rights nor are sub- the absence of allegation and proof
ject to the liabilities of shareholders, to the contrary. Northwestern Mut.
2 Clark & Marshall on Priv. Corps., Life Ins. Co. v. Cotton Exch., etc. Co.,
p. 1231-1232. 46 Fed. ^2.
' Northwestern Mut. Life Ins. Co. It seems that this right of subse-
v. Cotton Exch., etc. Co., 70 Fed. 155; quent creditors is equitable as dis-
Bent v. Vnderdown, 156 Ind. 516, tinguished from legal. First Nat.
520; 60 N. E. 307 (where the sub- Bank v. Peavey, 69 Fed. 455; Thomr-
eequent creditors were held to have son^Houston, etc. Co. v. Dallas, etc.
constructive notice by reason of the Ry. Co., 54 Fed. 1001; 5 C. C. A.
contract being embodied in the in- 11.
corporation paper) ; Cunningham v. ^2 Clark & Marshall on Priv.
Holly, Mason, Marks & Co., 121 Corps., § 397.
Fed. 720; 58 C. C. A. 140; Euston Cf. Foreman v. Bigelow, 4 Chff.
v. Edgar (Mo.), 105 S. W. 773; Col- 508; Kraft v. Griffon Co., 82 N. Y.
onial Trust Co. v. McMillan, 188 Mo. App. Div. 29; 81 N. Y. Supp. 438;
547; 87S. W. 933; 107 Am. St. Rep. Dickerman v. Northern Trust Co.,
335; Meyer y. Ruby-Trust, etc. Co., 90 176 U. S. 181, 202, 203; 20 Sup. Ct.
S. W. 821; 192 Mo. 162; Lea v. Iron 311 (indicating that minority share-
Belt Mercantile Co. (Ala,.), 42 So. 415. holders have no right to object to
But see Easton Nat. Bank v. Am. issue of shares at a discount) ; Sivin
Brick & Tile Co. (N. J.), 64 Atl. 917. v. Mutual Match Co. (N. J.), 66 Atl.
^ Rickerson, etc. Co. v. Farretl, 921 (where complaining shareholders
etc. Co., 75 Fed. 554; 23 C. C. A. 302; failed being in -pari delicto).
Flinn v. Bagley, 7 Fed. 785; Hand- ' Almada and Tirito Co., 38 Ch.
Ze?/ v. <Stoi2, 139 U. S. 417; 11 Sup. D. 415 (overruling PZosjfcj/naston Tube
Ct. 530; Berry v. Rood, 168 Mo. 316, Co., 23 Ch. D. 542, and Ince Hall, etc.
333-335; 67 S. W. 644; Honeyman Co., 23 Ch. D. 545 n.); Midland
V. Haughey (N. J.), 66 Atl. 582
Cf. Hawley v. Upton, 102 U. S.
314; Oogebic Investment Co. v. Iron
Chief Min. Co., 78 Wise. 427; 47 Ch. D.
N. W. 726; 23 Am. St. Rep. 417.
That subsequent creditors con-
628
Electric, etc. Co., 37 W. R. 471; Ex
parte Higgins, 60 L. T. 383.
Railway Time Tables Co., 42
§ 739-§ 807] ISSUE at a discount § T?*-^^
would be vltra vires for a corporation to pay out of its own funds,
deposits, etc., ostensibly paid by subscribers to its capital.' On
the other hand, where the subscriber is to pay for the shares in
full, a collateral stipulation whereby the company agrees to buy
a certain class of goods exclusively from him has been held to be
unobjectionable and enforceable and not to amount to an issue
of the shares at a discount ; ^ but this decision certainly opens
the way to the evasion of the rule against issuing shares at a dis-
count, and perhaps, therefore, its soundness may be questioned.
§ 777. Issue as Security for Debt of Company. — The issue of
shares as collateral security for a debt of the company seems to
be upheld in America,^ although it may result in the company
receiving for the shares less than their par value.*
§ 778. Effect of striking down Stipulation for Exemption from
Iiiability for full par Value of Shares. — The effect of striking
down an agreement which if valid would operate to release a
subscriber from the payment of the full par value of the shares
is to leave him subject to the normal liability of a shareholder,
— ithat is, a liability to pay on call ; and hence hp cannot be held
without due proof of a call as if he had promised to pay in full
in cash upon allotment.^ Some cases hold, or seem to hold,
that even where shares are deliberately issued for less than their
par value, the only remedy is to rescind the contract of sub-
scription in toto, and that the subscriber cannot under any
circumstances be held liable for more than the amount which
he agreed to pay, even where creditors are c6ncerned ; ° but, as
stated in a former paragraph, this is not the general rule.' The
difficulty has sprung from failing to recognize the difference
between a liability on the contract to take shares and the lia-
bility as shareholder.^ Until the subscriber has become an
' Spackman v. Lattimore, 3 Gitf. (headnote misleading) ; Leinster Con-
16. tract Corp. (1902), 1 Ir. 349.
' Bouchard v. Prince's Hall Res- Cf. De Buvigne's Case, 5 Ch. B.
taurant, 20 Times L. R. 574. 306 (supra, p. 627, n. 2) ; Innes & Co.
' Powell V. Blair, 133 Pa. St. 550; (1903), 2 Ch. 254.
19 Atl. 559. ' Berry v. Rood, 168 Mo. 316,
See also supra, § 224. 335-336; 67 S. W. 644; Street & Co.,
* Peterborough R.R.Co.-v. Nashua, 17 Viot. L. R. 717; North-West
etc. R. R. Co., 59 N. H. 385. Electric Co. v. Walsh, 29 Can. Sup.
' Granite Roofing Co. v. Michael, Ct. 33, and cases cited supra, § 776.
54 Md. 65. « See infra, § 781, where the dis-
' DuPont V. Tilden, 42 Fed. 87 tinction is elaborated.
629
§ 779 PAYMENT FOR SHARE3 [ChAP. XIII
actual shareholder, he cannot be held liable unless the com-
pany is able and willing to issue to him shares which on pay-
ment of the amount stipulated to be paid by him shall be legally
paid-up shares, and the only effect of striking down the provision
for issue at a discount is to exempt him from any liability at
all.' But after the shares have been issued, the liability to pay
the par value "in meal or in malt" attaches ratione tenurw,^
and is, or should be, independent of any illegal stipulations in
the contract of subscription.
§ 779. Whether Prohibition of Issue of Shares at a Discount ap-
plies to Reissue of Shares, to Issue as Part of Increase of Capital or
to other Issue of Shares by a going Concern. — Rules of law for-
bidding the issue of shares for less than their par value, whether
they be the result of judicial decisions or be laid down by the
legislature, have no application to the reissue of shares which,
having been once legally issued, have by forfeiture, gift, or in
any other legal mode reverted to the company ; but such shares
may legally be reissued or sold for whatever can be obtained
for them.^ According to some strong American authorities, the
same thing is true of shares issued by way of increase of capital
by a going concern.* Indeed, according to high authority, wher-
ever a corporation has carried on business with its original
authorized capital not fully subscribed, so that the shares have
' Ecuadorian Ass'n v. Ecuador * Handleyv. Stutz, 139 IT. S. 417;
Co. (N. J.), 65 Atl. 1051. See supra, 11 Sup. Ct. 530; Stein v. Howard,
§ 233 and infra, § 781, § 789. 65 Cal. 616; 4 Pac. 662 (notwith-
^ But see Christensen v. Eno, 106 standing a statutory provision for-
N. Y. 97, 102 ; 12 N. E. 648; 60 Am. bidding the issue of stock except for
Rep. 429, where the court said, money, labor, or property, and de-
"The liability of a shareholder to elaring that all fictitious increase of
pay for stock does not arise out of stock shall be void) ; Speer v. Bor-
his relation but depends upon his deleau, 79 Pac. (Colo.) 332.
contract, express or implied." But see Bickerson Roller-Mill Co.
' Ramwell's Case, 50 L. J. Ch. v. Farrell, etc. Co., 75 Fed. 554;
827; Mosher v. Sinnott, 79 Pac. 23 C. C. A. 302 (attempting to dis-
(Colo.) 742 (where the shares had tinguishHandley v. Stutz, uhi supra.) ;
been issued in exchange for property Jackson v. Traer, 64 Iowa 469, 482 ;
and were returned by the allottees 20 N. W. 764; 52 Am. Rep. 449;
as "treasury stock"). Kraft v. Griffon Co., 82 N. Y. App.
Cf. Campbell v. McPhee, 36 Wash. Div. 29; 81 N. Y. Supp. 438; Don-
593; 79 Pac. 206 (where the shares aid v. American Smelting, etc. Co.,
had not been fully paid by the first 62 N. J. Eq. 729; 48 Atl. 771 (issue
allottee and where the second al- enjoined at suit of a shareholder),
lottee, being charged with notice of
that fact, was held liable).
630
§ 739-§ 807] ISSUE at a discount § 780
acquired a rating in the market, the unsubscribed shares of the
original authorized capital may be issued for whatever they
would bring in the market, even though less than par,' and if
the shares have no market value they may be issued gratuitously.^
The ground for these conclusions is, that where the capital of the
company has been impaired by losses, so that its shares are sell-
ing below par, no one would be willing to subscribe for new
shares at par, so that unless the new shares can be issued for
less than par they cannot be issued at all. It is submitted, how-
ever, that this reasoning is fallacious. The proper course to
pursue in such a case would be, first, to reduce the nominal
capital until it corresponds with the actual capital as diminished
by losses, and then the old shares will be worth par, and the
new shares may likewise be issued at par.
§ 780. Disregard by Directors of Resolution of Shareholders
upon Increase of Capital forbidding Issue for less than pax. —
This American rule which permits shares to be issued by an
established corporation for less than par, provided their actual
market value be paid, does not prevent the corporation — that
is, the shareholders — from providing that no shares shall be
issued even upon an increase of capital for less than their par
value, and in that event the directors have no authority to issue
them at a discount. If the directors should do so, and if the
allottee had knowledge of the restriction on their powers, the
transaction would be void: the allottee would get no title to
the shares and would be subject to no liability as shareholder.
At least, this, it is conceived, would be his position on principle.
A learned court has held, however, that he can be compelled in
such a case to pay the full par value of the shares, just as if the
prohibition of issue at a discount originated in statute or law,
and as if the obligation to pay the nominal value of the shares
were an inseparable incident to their ownership.'
' Clark V. Bever, 139 U. S. 96; av.App. 58; 20 S. W. 1015; iJem-
11 Sup. Ct. 468; Kellerman v. ington Aviomobile & Motor Co., 139
Maier, 116 Cal. 416; 48 Pao. 377; Fed. 766 (affirmed in 155 Fed. 345);
McDowell V. Lindsay, 213 Pa. 591; Vaughn v. Ala. Nat. Bank, 42 So.
63 Atl. 130. 64; 143 Ala. 572.
Conlra: Jackson v. Traer, 64 ^ Foj^ v. BZair, 139 U. S. 118; 11
Iowa 469; 20 N. W. 764; 52 Am. Sup. Ct. 476.
Bep. 449. 2 Peck v. Elliott, 79 Fed. 10, 18-
Cf. Mathis V. Pridham, 1 Tex. 19; 24C. C. A. 425; 38L. R. A. 616.
631
§ 781 PAYMENT FOR SHARES [ChAP. XIII
§ 781. Liability of Holder of Shares issued at Discount distin-
guished from Liability under executory Contract to pay less than par
for paid-up Shares. — The principle that a holder of shares issued
at a discount is nevertheless liable to pay their full par value ap-
plies only when the shares have been actually issued and accepted
by the allottee. An executory contract to issue paid-up shares
cannot be enforced by the company or by its liquidator or receiver
unless the company is able to issue shares which shall be truly
and legally fully paid-up, not merely as against the corporation
itself, but also against its creditors.' The same result — namely,
that an executory contract to issue shares for less than their
nominal value is unenforceable — is sometimes reached in Amer-
ica by the reasoning that the contract is illegal and therefore
will not support an action.^ If, however, the shares are actually
issued as fully paid, while in fact and in law they are not fully
paid, the allottee who accepts them not merely undergoes a
liability to pay the full par value for the benefit of the coinpany's
creditors, but also is precluded from maintaining any claim
against the company — at any rate, after it has gone into. liqui-
dation — for breach of its contract to issue paid-up shares.' If
a contract for the issue of fully paid-up shares at a discount be
abandoned before the shares are issued, it would seem clear, on
principle, that the subscriber may recover back any deposit he
may have paid to the company on account of the shares.*
§ 782. Effect of Impossibility of paying in the Mode specially
stipulated. — Inasmuch as a stipulation that a shareholder shall
' Arnot's Case, 36 Ch. D. 702; against the company was held not
Macdonald, Sons & Co. (1894), 1 Ch. sustainable).
89; New Eberhardt Co. v. Menzies, Quoere, whether the subscriber,
43 Ch. D. 118; Knox v. ChUders- according to this view, can recover
burg liund Co., 86 Ala. 180; 5 So. back the amount paid by him under
578; Ecuadorian Ass'n v. Ecuador the contract. Clarke v. Lincoln
Co., 61 Atl. 481. Cf. Barnes v. Lumber Co., 59 Wise. &55; 18 N. W.
Brown, 80 N. Y. 527. See also 492; Knowlton v. Conrees, etc.
supra, § 233, § 778. . Spring Co., 57 N. Y. 518; Spring
But see Odessa Tramways v. Co. v. Knowlton, 103 U. S. 49; 2
Mendel, 8 Ch. D. 235. Clark & Marshall on Priv. Corps.,
= Cf. Nicherson v. English, 142 pp. 1235-1236.
Mass. 267; 8 N. E. 45; Edgerton v. ' Addlestone Linoleum Co., 37
Electric Imp. Co., 50 N. J. Eq. 354; Ch. D. 191.
24 Atl. 540; Garrett v. Kansas City * Spring Co. v. Knowlton, 103
Coal Mining Co., 113 Mo. 330; 20 U. S. 49 (headnote misleading). But
S. W. 965; 35 Am. St. Rep. 713 cf. supra, note 2.
(where a bill to enforce the contract
632
§ 739-§ 807] IN PROPERTY OR SERVICES § 785
not be liable to pay the full nominal amount of his shares is
void, it follows that if the special mode of payment stipulated
for in the subscription becomes for any reason impracticable,
payment of the full par value of the shares must be made in
cash. For example, where the agreement is that payment shall
be effected by setting-off calls against the price of goods to be
ordered by the company from the shareholder, if the company
goes into liquidation, and therefore can purchase no more goods,
payment must be made in cash.^
§ 783., Stipulations for Payment at fixed Dates instead of on
Call. — Similarly, a special agreement by which the shareholder
is to pay at some fixed future date does not exempt him from
liability to pay before that time if the company is wound. up
before that date arrives.^ Where a subscription is made on the
terms that payment shall be made in instalments payable on
certain fixed dates, a demand for payment of such instalments
is not a call, and need not comply with the formalities required
with respect to giving notice of a call.^
§ 784. Statutes requiring Shares to be paid up before a certain
Time. — A statute requiring the entire capital of the company to
be paid in within a certain time will, as between the corporation
and the shareholder, be construed as directory merely.* Hence, a
subscription upon the understanding that payment shall be made
in small weekly instalments, so that the payment would not be
finished within the period prescribed by the statute, the subscrip-
tion is not void, nor can it be treated as a contract to pay within
the statutory period so as to cause the statute of limitations to
run in favor of the shareholder from the expiration thereof.^
§ 785. Pajrment in Property or Services. — Inasmuch as sub-
scriptions on special terms are competent, it follows that the
• Elkington's Case, 2 Ch. 511; Leiter, 145 Cal. 696; 79 Pac.
Bridger's Case, 5 Ch. 305. 441.
Of. Thomson's Case, 4 De G. J. & But see Paducah, etc. Railroad v.
S. 749; Vogeler v. Punch (Mo.), 103 Parks, 86 Tenn. 554; 8 S. W. 842.
S. W. 1001 (headnote inadequate — ' Croskey v. Bank of Wales, 4
refusal of company to accept ser- Giff. 314, 331-332; Morrison v.
vices which were to be in payment Dorsey, 48 Md. 461. See also supra,
for stock held not to deprive stock § 740.
of its paid-up character). < Of. Phmnix. Warehousing Co. v.
' Cordova Union Gold Co. (1891), Badger, 67 N. Y. 294, 300.
2 Ch. 580. « Frank v. Morrison, 55 Md. 399.
Cf. Union Savings Bank v.
633
§785
PAYMENT FOB SHARES
[Chap. XIII
company may agree with the subscriber to accept payment in
property, or in work and labor in lieu of cash.' Indeed, agree-
ments of this sort are exceedingly common, and may even be
said to constitute part of the usual scheme for the organization
of corporations. For example, a company is incorporated to
work a certain mine, to develop certain patents, or to operate a
certain factory; the vendors of the mine, the patents, or the
factory, receive payment in shares issued as fully paid ; and at
the same time other shares likewise issued as fully paid are
bestowed on the promoters and attorneys of the company in pay-
ment for services rendered or supposed to have been rendered
in and about the incorporation of the company. Unless the
matter be the subject of special statutory regulation, the issue
of fully paid shares in this way is entirely lawful. Shares may,
by special contract between the company and the allottee, be
issued either for money or for money's worth.^
Not only so, but according to the weight of reason and author-
ity the value placed by the company on the property transferred
or services rendered in exchange for the shares is conclusive,'
' Drummond's Case, 4 Ch. 772;
PeU's Case, 5 Ch. 11; Baglan Hall
Colliery Co., 5 Ch. 346; Philadel-
phia, etc. R. R. Co. V. Hickman, 28
Pa. St. 318; Bank of Fort Madison
V. Alden, 129 U. S. 372, 378-379;
9 Sup. Ct. 332; Liebke v. Knapp, 79
Mo. 22; 49 Am. Rep. 212; Dayton,
etc. R. R. Co. V. Hatch, 1 Disney
(Ohio) 84; Phdan v. Hazard, 5
Billon 45; Brant v. EUen, 59 Md. 1 ;
Vogeler v. Punch (Mo.), 103 S. W.
1001 (services part of which were to
be rendered in the future, and which
future services the company refused
to accept).
But see Pdlat's Case, 2 Ch. 527;
Black & Co.'s Case, 8 Ch. 254, 265;
Coddington v. Canaday, 157 Ind.
243, 262-263; 61 N. E. 567. For a
full consideration of the question,
see Frost on Incorporation and Or-
ganization of Corporations, § 104-
§ 106, where the conflicting authori-
ties are reviewed and classified.
^ It was once judicially declared
that the goodwill of a partnership
was "of too unsubstantial and
shadowy nature to be capable of
pecuniary estimation in this connec-
tion," and therefore could not be
used to pay for shares. Camden v.
StuaH, 144 U. S. 104, 115; 12 Sup.
Ct. 585. But see contra: Washburn
V. National WaU-Paper Co., 81 Fed.
17; 26 C. C. A. 312; WhUe, CorHn
& Co. V. Jones, 79 N. Y App. Div.
373; 79 N. Y. Supp. 583. Cf. See v.
Hepperiheimer (N. J.), 61 Atl. 843.
It has been said that payment in
Confederate currency could not be
accepted instead of payment in law-
ful money. Macon, etc. R. R. Co. v.
Vason, 57 Ga. 314.
' PeU's Case, 5 Ch. 11; Baglan
Hall Colliery Co., 5 Ch. 346; Re
Wra^g (1897), 1 Ch. 796; Chap-
man's Case (1895), 1 Ch. 771; Bank
of Fort Madison v. Alden, 129 U. S.
372, 378-379; 9 Sup. Ct. 332; Hess
Mfg. Co., 23 Can. Sup. Ct. 644; 2
Clark & Marshall on Priv. Corps.
§ 401 e.
But see Camden v. Stuart, 144
634
§ 739-§ 807] IN PKOPEKTY OR SERVICES
§785
unless the agreement to overvalue the services or property be
obtained by fraud practised by the allottee upon the company,
or unless the overvaluation is intentional and the result of a
collusive scheme between the company and the allottee for the
purpose of evading the law which prohibits the issue of shares
at a discount.^ To be sure, so long as the agreement of sub-
scription remains executory, any shareholder may enjoin its con-
summation unless the value of the property to be accepted in
payment is in fact equal to the nominal value of the shares ir-
respective of the valuation which the directors may have hon-
estly placed upon it ; ''' but after the shares have been issued
the holder is protected from any further liabiUty in the absence
of fraud or collusion. Hence, if the shareholder refuse to con-
vey the land which was to be transferred in payment for the
shares, the company can recover from him merely the real value
U. S. 104; 12 Sup. Ct. 585; Taylvr
V. Cummings, 127 Fed. 108; 62 C.
C. A. 108 (where the valuation of
the company was based on an error
in bookkeeping); Meyer v. Rupy-
Trust, etc. Co., 90 S. W. 821; 192
Mo. 162; Shwkle v. Watts, 94 Mo.
410; 7 S. W. 274; Berry v. Rood,
168 Mo. 316; 67 S. W. 644.
A fortiori, the rule stated in the
text applies where payment in prop-
erty, etc., is expressly authorized by
statute. Coit v. Gold Amalga-
mating Co., 119 U. S. 343; 7 Sup.
Ct. 231; Bank v. Bdlington Coal,
etc. Co., 51 W. Va. 60; 41 S. B. 390;
Richardson v. Treasure HUl, etc. Co.,
65Pac. 74; 23 Utah 366.
Cf. Buck V. Jones, 70 Pac. 951;
18 Colo. App. 250 (where the share-
holder was held liable because the
title to the property sought to be
conveyed in payment of his subscrip-
tion had failed).
1 Re' Wragg (1897), 1 Ch. 796;
Lloyd V. Preston, 146 U. S. 630; 13
Sup. Ct. 131; Northwestern Mut.
Life Ins. Co. v. Cotton Exch., etc. Co.,
46 Fed. 22; Boulton Carbon Co. v.
AfiiZs, 78 Iowa 460; 43N.W. 290; 5
L. R. A. 649; Arapahoe, etc. Co. v.
Stevens, 13 Colo. 534; 22 Pac. 823;
Flour City Nat. Bank v. Shire, 88
N. Y. App. Div. 401 ; 84 N. Y. Supp.
810; affirmed short, 179 N. Y. 587;
72 N. E. 1141; Dean v. Baldwin, 99
111. App. 582 (formulae for compound-
ing dyes taken at overvaluation) ;
See v. Heppenheimer (N. J.), 61 Atl.
843; Hobgood v. Ehlen (N. Car.), 53
S. E. 857; Strickland v. Nat. Salt
Co. (N. J.), 64 Atl. 982 (semble);
Honeyman v. Haughey (N. J.), 66
Atl. 582.
Cf. Innes & Co. (1903), 2 Ch. 254
(qucere, whether this case is in har-
mony with other English cases);
Easton Nat. Bank v. Am. Brick &
Tile Co. (N. J.), 64 Atl. 1095; Lein-
ster Contract Corp. (1902), 1 Ir. 349
(a case difficult to reconcile with the
English decisions); Hood v. Eden,
36 Can. Sup. Ct. 476.
In any case, according to the
prevalent American rule, the shares
would be deemed fully paid except
as against subsequent creditors or
dissenting shareholders.
See siipra, § 776, and Miller v.
Higginbotham (Ky.), 93 S. W. 655.
^ Donald v. American Smelting,
etc. Co., 48 Atl. 771; 62 N. J. Eq.
729.
635
§ 785 PAYMENT FOE SHARES [ChAP. XIII
of the land and not necessarily the nominal value of the shares/
The fact that the vendors agree to surrender some of the shares
to the company as "treasury stock" to be sold for less than par
has been held not to be conclusive evidence that the arrange-
ment is a mere device to issue the shares at a discount; for it
was thought that the vendors might honestly beUeve the property
sold to be worth the nominal value of the shares, and yet might
be willing to surrender and sacrifice part of the shares with a
view to increasing the value of the remainder.^ Such decisions
show how reluctant some courts are to strike down palpable
evasions of the law. Of course, very great disparity between
the value of the property or of the services accepted in payment
for shares and the nominal value of the shares is very strong
evidence to prove that the arrangement is a mere collusive
device to enable shares to be issued at a discount ; ^ and, as
intimated above, if such a device or evasion be established, the
allottee could be held for the difference between the actual value
of the property transferred or services rendered and the par
value of the shares,' to the same extent as if the shares had
been openly issued at a discount of that amount.^
Even though no such fraud or collusion be proved, the agree-
ment to credit the shares as fully paid must be supported by
some legal consideration. For example, if the shares are issued
as fully paid upon a past consideration, — for example, in con-
' Dayton, etc. R. B. Co. v. Hatch, * Wallace v. Carpenter Mfg. Co.,
1 Disney (Oh.) 84. 70 Minn. 321; 73 N. W. 189; 68
^ Lake Superior Iron Co. v. Drexel, Am. St. Rep. 530 ; Coleman v. Howe,
90 N. Y. 87. 154 111. 458; 39 N. E. 725; 45 Am.
Cf. Davis Bros. v. Montgomery St. Rep. 133; Macbeth v. Banfield,
Furnace, etc. Co., 101 Ala. 127; 8 78 Pao. 693; 45 Oreg. 553; 106 Am.
So. 496; Finletter v. Acetylene Light St. Rep. 670; Remington Automobile
Co., 215 Pa. 86; 64 Atl. 429 (where & Motor Co., 139 Fed. 766 (where
the person to whom the shares were the directors naively placed a val-
issued as fully paid presented some nation upon the property lower
of -them as a bonus to other persons than the par value of the shares),
for subscribing). affirmed, 153 Fed. 345; Rathbone
' CoH V. Gold Amalgamating Co., v. Ayer, 105 N. Y. Supp. 1041 (where
119 U. S. 343, 345; 7 Sup. Ct. 231 property which promoters had just
(semblfe); Coleman v. Howe, 154 111. bought for $85,000 was turned over
458; 39N. E. 725; 45 Am. St. Rep. to the corporation at a valuation
133; Macbeth v. Banfidd, 78 Pac. of $500,000). See also cases cited
(Oreg.) 693; 45 Oreg. 563; 106 Am. supra, p. 635, n. 1.
St. Rep. 670 ; Lester v. Bemis Lum- ' As to this see supra, § 776.
ber Co., 74 S. W. 518; 71 Ark. 379.
636
§ 739-§ 807] WATERED STOCK § 786
sideration of past services gratuitously rendered, — the case
stands precisely as if the shares had been issued as fully paid
without any pretence of consideration.'
The property or services which the corporation accepts in
payment for its shares must of course be such as it has power
to acquire or receive, and pay for out of its funds ; ^ but if the
company accepts in payment property which the law forbids it
to hold, the subscriber cannot insist on a rescission of the con-
tract and a cancellation of the shares, inasmuch as he is a
conspirator in pari delicto.^
§ 786. Evils of " Watered Stock." — This hberty of contract
by which the corporation and the allottee of shares are per-
mitted to engraft upon the subscription such special terms as
they please has led to the abuse which is known in America as
"watered stock." Shares are issued as fully paid but repre-
senting little or nothing of real value. The company's nominal
capital is placed at a fabulous, inflated figure; and unwary
investors — "lambs" in the language of the stock-exchange —
are deceived into believing that a company with so large a capi-
tal must have sufficiently strong financial support to insure its
success. Evils of this sort are even greater than the danger that
the company will obtain credit on the faith of its largely fictitious
capital ; for although the law is very solicitous about the rights
of creditors, yet experience shows that creditors and money-
lenders are usually sharp-sighted enough to guard themselves
from imposition. It is investors in the company's securities, and
the public at large, upon whom the evil weighs most heavily.
At all events, the rules of law which prohibit fraudulent or col-
lusive overvaluations of property accepted in payment for shares
afford little or no protection. In the first place, it is usually im-
possible to prove the fraud or collusion. Moreover, even if the
proof be forthcoming, the fraudulent allottees will have "un-
' Eddystone Marine Ins. Co. vires part of the agreement has been
(1893), 3 Ch. 9. fully executed by transfer of the
Cf. Chapman's Case (1895), 1 Ch. property which the company has no
771, where the consideration was power to hold, the subscriber cannot
alleged to be "illusory." be compelled to pay over again in
' Lester v. Bemis Lumber Co., 74 cash).
S. W. 518; 71 Ark. 379. ' Continental Securities Co. v.
But see East N.Y., etc. R. R. Co. Northern Securities Co., 57 Atl. 876;
v. Lighthall, 36 How. Pr. (N. Y.) 66 N. J. Eq. 274.
481 (holding that after the idtra
637
§ 787 PAYMENT FOE SHARES [ChAP. XIII
loaded" the shares upon an unsuspecting public before the
transaction is questioned, and the transferees being bona fde
purchasers will be protected from any liability to make good
the " water " ; and even the original allottees who were parties
to the collusive overvaluation are not, according to the prevalent
American rule, under any obligation to make good the deficiency
except for the benefit of subsequent creditors. Upon the whole,
therefore, the situation demanded some remedial legislation. And
the legislatures on both sides of the Atlantic have recognized the
necessity for intervention, although the remedies applied have
not always been either judicious or efficacious.
§ 787- § 799. STATUTORY ATTEMPTS TO REMEDY EVILS OF
WATERED CAPITAL.
§ 787. Companies Act of 1867 — In general. — In Great
Britain an attempt was made by the Companies Act of 1867 to
remove or at least diminish the evils above referred to. Section 25
of that statute enacted as follows: "Every share in any com-
pany shall be deemed and taken to have been issued and to
be held subject to the payment of the whole amount thereof
in cash, unless the same shall have been otherwise determined
by a contract duly made in writing, and filed with the registrar
of-joint-stock companies at or before the issue of the shares." '
In other words, the act left untouched the power of companies
to stipulate with allottees of shares to accept payment in prop-
erty or services or anything which the company might deem
of value but it aimed to secure publicity and prevent fraud and
deception by the provision that the special contract for pay-
ment otherwise than in cash should be filed with the registrar
and thus exhibited to the public. A company might accept
payment in peppercorns, if the directors honestly believed them
Jo be worth the par value of the shares; but if so, the fact
of such payment must be disclosed to the public. If the contract
was not recorded, the shareholder was bound to pay the value of
the shares in cash, even though he might have given full value in
property or services.
§ 788. Importance to American lawyers of Cases arising under
this Statute. — The cases which arose under this Act of 1867,
■ 30 & 31 Vict., c. 131, sec. 25.
638
§ 739-§ 807] ENGLISH STATUTES § 791
which was repealed by the Companies Act of 1900, are important
to American lawyers not merely because an understanding of
them is essential to a thorough comprehension of the historical
development of English law, but also for the more practical
reason that they have a direct bearing upon the construction
of some American statutes passed with a similar object.
§ 789. Act not applicable to execviory Contracts to issue Shares.
— In the first place, the act applied only when shares had actually
been issued; in a case of a mere agreement to issue shares
credited as paid-up, the law remained as before the passage of
the act — that is to say, the company could not hold the allottee
liable unless it were ready and willing to issue shares which could
subject the holder to no possible liability.'
§ 790. Act functus officio when Contract Registered. — If the
contract was duly registered, the act was functus officio, and the
liability of the shareholder remained as before its passage.
Hence, the registration of a contract to issue shares for a money
consideration less than their nominal value was no protection
against the liability to pay the difference ; ^ but the valuation
placed by the company in the registered contract upon property
or services received in lieu of cash was conclusive in the absence
of fraud or collusion.^ On the other hand, the consideration
must be real and not illusory,* and a "past" or executed con-
sideration was not sufficient ; ' for in these cases there was no
binding contract at all.
§ 791. Who charged with Burden of seeing to Registration of
Contract. — The act did not throw upon the company the burden
of seeing to the registration of the contract, so as to estop it from
claiming a benefit from a failure to register the same." On the
contrary, any shareholder who claimed exemption from liability
' Macdonald, Sons & Co. (1894), * Anderson's Case, 7 Ch. D. 75;
1 Ch. 89. Cf. supra, § 233, § 781. Chapman's Case (1895), 1 Ch. 771.
As to when shares are deemed to But see Leinster Contract Corp.
be issued, see supra, § 170 et seq. (1902), 1 Ir. 349.
^ Ooregum Gold Mining Co. v. ^ Eddystone Marine Ins. Co.
Roper (1892), A. C. 125; Welton v. (1893), 3 Ch. 9.
Saffery (1897), A. C. 299. « Neither is that burden thrown
' Re Wragg (1897), 1 Ch. 796; on the shareholder or applicant for
Chapman's Case (1895), 1 Ch. 771; shares; but the party who asserts
Anderson's Case, 7 Ch. B. 75. the shares to be fully paid must
Cf. Ames's Case, W. N. (1896) prove the registration of the con-
79. tract. Arnot's Case, 36 Ch. D. 702.
639
§ 792 PAYMENT FOE SHAKES [ChAP. XIII
to payment in cash must prove the registration of a valid contract
conferring such exemption.' Moreover, the shareholder had no
remedy against the company ex delicto for representing the shares
to be fully paid.^
§ 792. WhM amounted to sufficient Registration of a Contract.
— The entire contract must be registered; it was not enough to
record some memorandum or note thereof. Hence, the registra-
tion of a mere offer, leaving the acceptance to be proved by
evidence dehors the record, did not satisfy the statute.^ As the
entire contract had to be registered, a reference to an unrecorded
paper in which alone some essential term was stated was not
sufficient ; * but if the recorded paper set out by way of recital
an unrecorded paper containing an essential term of the con-
tract, that was enough.^ Inasmuch as the whole contract re-
quired registration, the recorded paper necessarily had to state
the consideration for which the shares were to be issued ; * but
no very high degree of particularity was necessary in specifying
the consideration.' The recorded contract must show what
shares were to be issued thereunder,' but needed not to specify
their denoting numbers, notwithstanding that in England each
share is designated by a number." Registration of a contract
which gave the company an option to require payment either in
cash or in property was not sufficient,'" since the exercise of the
option would be left for proof dehors the record. Since a pro-
visional agreement made by promoters on behalf of an intended
company is not a contract binding on the company when in-
' Eisner and McArthur's Case ' S. Frost & Co. (1899), 2 Ch.
(1895), 2 Ch. 759; Blyth's Case, 4 207; Markham & Darter's Case
Ch. D. 140. (1899), 2 Ch. 480.
' Blyth's Case, 4 Ch. D. 140. But cf. Re Maynards (1898), 1
' New Eberhardt Co. v. Menzies, Ch. 515.
43 Ch. D. 118. 8 Crichmer's Case, 10 Ch. 614,
Cf. Transvaal Exploring Co. v. 617 (semble).
Albion Gold Mines ilS^^), 2 Ch.i'lQ. Cf. Pritchard's Case, 8 Ch. 956,
* Kharaskhoma Syndicate (1897), 961 (headnote inadequate); Eisner
2 Ch. 451; Robert Watson & Co. and McArthur's Case (1895), 2 Ch.
(1899), 2 Ch. 509. 759.
Cf. Markham & Darter's Case ' Ex parte Forde, 30 Ch. D. 153;
(1899), 2 Ch. 480. Jackson & Co. (1899), 1 Ch. 348
» S. Frost & Co. (1899), 2 Ch. 207. (semble).
» Kharaskhoma Syndicate (1897), '° Jackson & Co. (1899), 1 Ch.
2 Ch. 451; Robert Watson & Co. 348; Coolgardie, etc. Mines, 14
(1899), 2 Ch. 509; Re Maynards Times L. R. 277.
(1898), 1 Ch. 515.
640
§ 739-§-807] ENGLISH STATUTES § 793
corporated, a registration thereof was not a compliance with
the act ; ' but conversely, of course, the registration of a con-
firmatory contract by the corporation adopting the antecedent
provisional agreement was sufficient,^ provided, of course, that
the confirmatory contract contained in itself all the terms of
the agreement. A provision in the recorded articles of asso-
ciation for the issue of certain shares otherwise than for cash
was not a registered contract within the Act of 1867, sec. 25.'
The registered contract need not be between the company and
the allottee or the person to whom the shares are issued ; on the
contrary, a registered contract for the issue of paid-up shares
would protect from liability any person to whom such shares
might be issued with the consent of the person entitled thereto.*
§ 793. Time for Registration of Contract. — In order that
the registered contract should, under the Act of Parliament,
afford any protection to the shareholder, it must have been
recorded "at or before" the issue of the shares; if recorded
afterwards, it was of no avail. ^ Attention has been directed
above to the question when shares are to be "issued." ° If the
registration of the contract could fairly be deemed part of the
•same transaction as the issue of the shares, it was held to have
taken place "at" the issue of the shares within the meaning of
the statute. For example, where the share-certificate and the
contract were together delivered to the allottee, the former as
his muniment of title and the latter for the purpose of being
recorded,^ although the actual registration was deferred until
the succeeding day because the registrar's office was closed, the
registration was held to be in time.!
If the shares were actually issued but by mistake the contract
was not registered, the directors might, if the company was
perfectly solvent, cancel the allotment, and strike out the allottee's
name from the list of shareholders, and then have the contract
» Anglo-Colonial Syndicate, 65 (1895), 2 Ch. 759; Kirby's Case, 46
L. T. 847. L. T. 682.
Cf. Smith V. Brovm (1896), A. C. Cf. Pritchard's Case, 8 Ch. 956,
614. 961; Ames's Case, W. N. (1896) 79.
^ Re Maynards (1898), 1 Ch. 515, = FothergUl's Case, 8 Ch. 270.
519-520 (headnote inadequate). ' Supra, § 164, § 170 et seq.
' Crickmer's Case, 10 Ch. 614; ' Pool's Case, 35 Ch. D. 579.
Pritchard's Case, 8 Ch. 956. See also Anglo-Colonial Syndi-
* Eisner and McArthur's Case, cate, 65 L. T. 847.
VOL. I.— 41 641
§ 794 PAYMENT FOR SHARES [ChAP. XIII
registei'ed and reissue the shares.' Only in that way and under
those conditions could the shareholder obtain relief; and,
accordingly, the Companies Act of 1898 ^ was passed to enable
the rectification of the register nunc pro tunc under an order of
court.^ Finally, the hardships of the Act of 1867 led to its repeal.''
§ 794. What is "Payment in Cash." — Perhaps the point of
most general importance that ever arose under Section 25 o: the
Companies Act of 1867 was the question what was necessary to
constitute "payment in cash." The courts held that those words
did not mean necessarily payment in actual coin or currency,
but included any transaction that would have supported a plea
of payment as distinguished from a plea of accord and satis-
faction under the old common-law procedure.^ Hence, where a
shareholder, being indebted to the company in respect of his
shares and having at the same time a present overdue claim
against the company, arising out of an independent transaction
for goods sold and delivered or for work and labor, agrees with
the corporation that the mutual debts shall be set off and a
balance struck, the transcation amounts to payment in cash.'
So, it has been held that where a shareholder's alleged claim
against the corporation is compromised on the basis of the
company crediting a certain amount on the claimant's shares,
the transaction amounts to payment in cash.' Moreover, a
present liability of the company may be set off against the
potential or future liability for calls not yet made.' On the other
hand, an agreement to set off an unmatured claim against the
' Harttey's Case, 10 Ch. 157. » Spargo's Case, 8 Ch. 407;
Cf. Smith V. Brown (1896J, A. C Adamson's Case, 18 Eq. 670; Nm-th
614. Sydney Investment Co. v. Higgins
' 61 & 62 Vict., c. 26. (1899), A. C. 263; Barroiv-in-Fur-
' See Jackson & Co. (1899), 1 Ch. ness Land Co., 14 Ch. D. 400; Ex
348; Jarw's Cose (1899), ICh. 193; parte Bentley, 12 Ch. D. 850; La-
Be Maynards (1898), 1 Ch. 515; rogue v. Beauchemin (1897), A. C.
Whitehead & Co. (1900), 1 Ch. 804; 358; Ex parte Bentinck, 1 Megone
Roxburghe Press (1899), 1 Ch. 210; 12; Ramwell's Case, 50 L. J. Ch
Stephenson's Case (1900), 2 Ch. 442; 827.
Ebenezer Timmins & Sons (1902), 1 ' Ferrao's Case, 9 Ch. 355.
Ch. 238; Re Archibald D. Davmey, Cf. Barrow-in-Furness Land Co
Ltd., 83 L. T. 47; Smithson's Case, 14 Ch. D. 400.
68 L. J. Ch. 46, in which cases the ' Jones, Lloyd & Co., 41 Ch.
act was considered. D. 159. Cf. Ex parte Bentinck, 1
" See infra, § 797. Megone 12; Ramwell's Case, 50 L. J.
' Spargo's Case, 8 Ch. 407, 414. Ch. 827.
642
§ 739-§ 807] ENGLISH STATUTES § 795
company — for example, a claim on bonds or debentures not yet
due — against the shareholder's liability is not payment in cash.'
Moreover, in order to bring a transaction within the rule in
Spargo's Case, cited above, it is indispensable that the company
should at some moment of time be under an obligation to pay in
money. For example, where the company buys goods or orders
services performed with the understanding that payment shall
be made in fully paid shares, and shares are accordingly issued
as fully paid, the company was at no time bound to pay other-
wise than in shares, and therefore there is no payment for the
shares in cash.^ So, where a corporation purchases land under
an agreement to pay either in money or, at its option, in fully
paid shares, there being no absolute obligation on the company's
part to pay in money, shares allotted in pursuance of the con-
tract cannot be deemed to have been paid for in cash.' Con-
versely, the doctrine o? Spargo's Case cannot be applied unless
the shareholder was at one time under an obligation to jiay for
his shares in money ; hence, where shares are issued to a creditor
as fully paid in satisfaction of his claim, the shares are not paid
for in cash.*
§ 795. Objections to the Companies Act of 1867. — Some
method of enforcing publicity a« to the property which is accepted
in payment for shares of stock is probably the true remedy for the
conditions which occasioned in England the passage of the Act
of 1867. Nevertheless, in its practical operation, that statute
gave rise to much dissatisfaction. Persons to whom "watered"
shares were issued almost invariably took pains to see that the
contract was duly filed with the registrar. "Unfortunately,"
said Vaughan Williams, J., "those are not the persons who are
caught in the legislative net. The cases which are generally hit
by the section are where persons whom the liquidator wishes to
place on the list of contributories have made honest agreements
to pay for the shares, not in actual cash, but in something else
which is really equivalent to a cash payment; and then by the
•negligence or mistake of some one, perhaps a clerk or solicitor,
' Habershon's Case, 5 Eq. 286; ' Barrow's Case, 14 Ch. D. 432.
Kent's Case, 39 Ch. D. 259. * Johannesburg Hotel Co. (1891),
= Pagin and GUI's Case, 6 Ch. D. 1 Ch. 119.
681; Andress's Case, 8 Ch. D. 126;
White's Case, 12 Ch. D. 511.
643
§ 796 PAYMENT FOE SHARES [ChAP. XIII
the contract is not registered, the section takes effect, and the
shareholder has to pay over again, and goes away with a sense
that the law has done him an injustice." '
§ 796. Companies Act o£ 1900. — These objections to the Act
of 1867 finally brought about its repeal by the Companies
Act of 1900.^ This latter statute, while repealing in toto the
obnoxious provision of the Act of 1867 which invalidated un-
recorded contracts to accept payment for shares otherwise than
in cash, does not abandon the attempt to secure publicity;
on the contrary it requires the company to register all such
contracts or agreements ; ' and although non-compliance with
these provisions does not subject the shareholder to any liability,
yet a heavy penalty is imposed on directors or officers who are
responsible therefor.* In other words, the act does not subject
the subscribers to the shares to any burden other than that
which they agreed to assume (except in case of fraud or collusive
overvaluation), but visits with severe penalties the officers of a
company who issue shares which are not to be paid for in cash
without recording for public inspection the contract which shows
precisely what is to be accepted in payment in lieu of cash.
Another provision of the, Act of 1900 requires certain deposits co
be paid by applicants before allotment.^ Under this section,
it is held that while the delivery of a cheque may perhaps be
treated as the actual receipt of the deposit if the cheque is after
the allotment duly honored, yet if the cheque is not eventually
honored the allotment is voidable even though the company may
receive the amount of the deposit from an underwriter."
§ 797-§ 799. American Statvies.
§ 797. Statutes requiring Pajnnent in Cash — What amounts to
Payment in Cash. — Statutes requiring shares to be paid for in
cash, either absolutely or conditionally, — that is, unless cer-
tain requirements and conditions are met, — are sometimes en-
countered in America. Probably they should receive the same
• Preservation Syndicate (1895), * Ibid., § 7(2).
2 Ch. 768, 771, per Vaughan Wil- « Ibid., § 4.
bams, J. ° Mears v. Western Canada, etc.
=i 63 & 64 Vict., c. 48, § 33. Co. (1905), 2 Ch. 353.
» Ibid., § 7(1).
644
§ 739-§ 807]
AMERICAN STATUTES
§798
construction in respect to the meaning of " payment in cash " as
the English Companies Act of 1867.' A cheque on a bank in
which the drawer has sufficient funds may be accepted as
cash; ^ but the law seems to be different if the drawer had no
sufficient funds to his credit, even though the cheque if presented
would have been honored.' Of course, the subscriber's own
promissory note cannot be deemed money ; * the giving of a
note is really not payment, but rather a deferring of payment.
§ 798. Statutes forbidding Issue of Shares except in Exchange
for Money, Property, or Services. — A not uncommon statutory
provision in the United States — sometimes even embodied in
state constitutions — is that shares shall not be issued except in
exchange for money, property, flr services. Such provisions
would seeni to add little or nothing to the law as laid down in
England under the Companies Act of 1862 in respect to what
will constitute payment for shares.' They have been construed
' Beach v. Smith, 30 N. Y. 116;
Veeder v. Mudgett, 95 N. Y. 295, 315.
Cf. Laroque v. Beauchemin (1897),
A. C. 358 (where a Quebec statute
was construed by the Privy Coun-
cil) ; Turner v. Cowan, 34 Can. Sup.
Ct. 160 (transfer of property nomi-
nally for cash to be set-off against
liability upon subscription to shares
not payment in cash within meaning
of British Columbia statute); Mor-
ris V. Union Bank, 31 Can. Sup. Ct.
594; People ex rel. New York Cerv-
iral, etc. R. R. Co. v. Public Service
Commission, 106 N. Y. Supp. 968
(where the transaction, was held to
be a mere form and not a real pay-
ment of cash) ; State ex rel. Attorney-
OeneraUv. Wood, 13 Mo. App. 139;
Breck v. Barney, 183 Mass. 133; 66
N. E. 643; Clarke v. Lexington
Stoveworks, 72 S. W. 286; 24 Ky.
Law Rep.. 1755; 73 S. W. 288;
Harvey-Watts Co. v. Worcester Um-
breUa Co. (Mass.), 78 N. E. 886.
^ People V. Stockton, etc. R. R. Co.,
45 Cal. 306; 13 Am. Rep. 178; Syra-
cuse, etc. R. R. Co. V. Gere, 4 Hun
(N. Y.) 392.
But see People ex rel. N. Y., etc.
B. R. Co. v. Railroad Comm'rs, 81
N. Y. App. Div. 242; 81 N. Y. Supp.
20; affirmed short, 67 N. E. 1088;
175 N. Y. 516.
' People ex rel. Plumas County v.
Chambers, 42 Cal. 201.
* Leighty v. Pres., etc. of Turrir-
pike Co., 14 Serg. & R. (Pa.) 434;
Witliam^ V. Brewster, 93 N. W. 479;
117 Wise. 370.
» See Grant v. East & West R. R.
Co., 54 Fed. 569; 4 C. C. A. 511;
Brown v. Dvlvih, etc. Ry. Co., 53 Fed.
889; Paciiic Trust Co. v. Dorsey, 72
Cal. 55; 12 Pac. 49; Van Cleve v.
Berkey, 143 Mo. 109; 44 S. W. 743;
42 L. R. A. 593; Rogers v. Gladi-
ator, etc. Co. (S. Dak.), 113 N. W.
86; Andrews v. Nat. Foundry, etc.
Works, 76 Fed. 166; 22 C. C. A. 110;
77 Fed. 774; 23 C. C. A. 454; Speer ■
V. Borddeau, 79 Pac. (Colo.) 332;
Lake St El. R. Co. v. Ziegler, 99
Fed. 114; 39 C. C. A. 431; Toledo,
etc. R. R. Co. V. Continental Trust
Co., 95 Fed. 497; 36 C. C. A. 155;
Finletter v. Acetylene Light Co., 215
Pa. 86 (headnote inadequate); 64
Atl. 429 ; Vaughn v. Ala. Nat. Bank,
42 So. 64; 143 Ala. 572; 2 Clark &
Marshall on Priv. Corps., § 391.
Cf. Alteriberg v. Grant, 85 Fed.
645
§ 799 PAYMENT FOR SHARES [ChAP. XIII
in a multitude of not altogether harmonious decisions. An addi-
tional provision that all "fictitious increase of stock" shall be
"void" is troublesome and dangerous.' Statutes of this class
are either useless or pernicious. I- construed conservatively,
they are scarcely more than declaratory, and are therefore super-
fluous ; if construed loosely, they are less tolerable than the evils
they were intended to remedy.
_ § 799. Statutes requiring Recording of Contracts for Payment
lor Shares otherwise than in Cash. — The expedient of requir-
ing the recording of contracts for the issue of shares otherwise
than subject to payment of their full amount in cash has
heretofore been but seldom resorted to in the United States.
Such a provision is containecP in a recent Massachusetts incor-
poration law.^ A somewhat similar law has long been in force
in Maryland,' but has received a very different interpretation
from the Companies Act of 1867.* By requiring agreements for
payment for shares otherwise than in cash to be recorded, free-
dom of contract is preserved, while at the same time the evils
of " watered stock " are reduced to a minimum. Similar statutes
are not unlikely to be enacted in other states.
§ 800-§ 801. Estoppel of Company to exact Payment for Shares
which have not been paid-up.
§ 800. Estoppel in favor of a Transferee of Shares. — Although
shares are not negotiable, yet they have many of the attributes
of negotiability,^ and ai-e at any rate exempted from the common-
law rule which forbids the assignment of the legal title to choses
in action. Hence, shares which in the hands of the original
345; 29 C. C. A. 185 (construing * BaUe v. Calvert College, etc.
a slightly different provision). See Soc, 47 Md. 117; Southern, Trust,
■also infra, § 1695. etc. Co. v. Yeatman, 134 Fed. 810;
' Cf. Coler V. Tacoma Ry., etc. 67C. C. A. 456; Weber v. Fickey, 52
Co., 65 N. J. Eq. 347; 54 Atl. 413; Md. 501.
103 Am. St. Rep. 786 (holding that Cf. McDowell v. Lindsay, 213 Pa.
when the corporation gives an option 591 ; 63 Atl. 130 (construing a W.
of $35 in cash or $100 in stock, the Va. statute requiring a publication
stock in excess of $35 par value is of notice of an intention to issue
"fictitious"). See also infra, § 1695. stock for less than par).
^ Mass. Acts, 1903, chap. 437, ' See infra, § 837 et seq., § 912
§ 11, § 14. et seq.
» Md. Code Pub. Gen. Laws
(1888), Art. 23, § 62-§ 65.
646
§ 739- § 807] ESTOPPEL TO EXACT PAYMENT § 800
allottee are subject to calls may nevertheless be deemed fully paid
in .the hands of a bona fide purchaser without notice of the cir-
cumstances of the issue. For example, where the certificates
issued by the corporation to an original allottee state errone-
ously that the shares are iully paid or that only a certain sum
remains to be paid thereon, the company will be estopped from
holding a bona fide transferee thereof to any greater liability than
would have attached if the representation in the certificate had
been true.' The same principle applies although a statute may
expressly enact that shares shall be paid for in cash to their full
amount unless certain conditions be complied with;, for' such
statutes do not exclude the application of the principle of estoppel
although payment may not have been made as required by the
legislature.^
The purchaser may be protected even though the share-
certificate, in compliance with a statutory requirement, expressly
states that the shares are issued for property purchased by the
company.' A fortiori the fact that the certificate states the shares
to be fully paid up without disclosing how they were paid up,
whether in cash or otherwise, is not sufficient to charge a pur-
chaser with notice that payment was not made in cash as required
by law.* Moreover, the fact that the transferee knew that some
shares had been issued otherwise than for cash will not put him
upon inquiry whether the shares assigned to him were among
that number.^ The transferee may safely rely upon the com-
pany's representation that the shares are fully paid, and cannot
' Waterhmise v. Jamieson, L. R. 1004; Barrow's Case, 14 Ch. D. 432;
2 H. L. (Scotch) 29 ; Brant v. Ehlen, Sprague v. National Bank of America,
59 Md. 1; Foreman v. Bigelow, 4 172 111. 149; 50 N. E. 19; 64 Am.
Cliff. 508; Steacy v. Little Bock, etc. St. Rep. 17; 42 L. R. A. 606; Rem-
B. B. Co., 5 Dillon 348; Morgan v. ingtcm Aviomobile & Motor Co., 153.
Howland, 89 Me. 484; 36 Atl. 990; Fed. 345.
Du Pont V. TUden, 42 Fed. 87 (a Cf. Berry v. Bood, 168 Mo. 316,
confused case); Bood v. Wharton, 332-333; 67 S. W. 644.
67 Fed. 434; Fraser Biver Mining, ' Easton Nat. Bank v. American
etc. Co. V. GaUagher, 5 Brit. Columb. Brick, etc. Co., 60 Atl. (N. J.) 54;
82. reversed as to other points, 64 Atl.
As to whether in such cases the 917.
transferee is under any statutory * Burkinshaw v. NicoUs, 3 A. C.
liability to creditors as a holder of 1004, 1021.
shares not fully paid, see White, » A. W. Hall & Co., 37 Ch. D.
Corhin & Co. v. Jones, 167 N. Y. 712; New Chile Gold Mining Co.,
158; 60 N. E. 422. 68 L. T. 15.
' Burkinshaw v. NicoUs, 3 A. C.
647
§ 800 PAYMENT FOR SHARES [ChAP. XIII
be charged with notice of the actual facts' merely because "the
slightest inquiry would have disclosed" the truth.' In order to
hold a purchaser, where the shares purport to be fully paid, it
must be both alleged and affirmatively proved that he took with
notice.^
A purchaser with notice from a purchaser without notice
succeeds to all the latter's rights,^ even though the second trans-
feree was an oflBcer of the company when the shares were issued ; *
but the burden of proof is on the second purchaser to show that
his assignor took without notice of the circumstances under which
the shares were issued.' A pledgor who has notice cannot, after
payment of the debt to secure which the shares were pledged,
claim the rights of a bona fide purchaser because the pledgee
had no notice." Where the transferee is protected as a purchaser
for value, it would seem that the transferor or original allottee
should remain liable.''
The clearest case of representation by the company that shares
have been fully paid is where the representation is contained in
the official certificate issued by the corporation.* Some cases
hold that a bona fide purchaser will be protected unless the cer-
tificate shows affirmatively that the shares are not fully paid
even though the certificate does not state that the shares are
paid-up.' Any representation brought home to the company
' Waterhouse v. Jamieson, L. R. 307; 68N. W. 691; 61 Am. St. Rep.
2 H. L. (Scotch) 29. 238.
But cf. Garden City Sand Co. v. " Ershine v. Loewenstein, 82 Mo.
American, etc. Crematory Co., 205 301, 306-306 (headnote inadequate).
111. 42 ; 68 N. E. 724 (where a pur- See also infra, § 914.
chaser was deemed to have had such ' Supra, § 765.
knowledge as a reasonable man in 'A statement in the certificate
his position would have had). that the shares though fully paid are
* Burkinshaw v. NicoUs, 3 A. C. liable to "assessment" will prevent
1004,1017-1018; A. W. Hall & Co., a transferee from claiming the rights
37 Ch. D. 712 ; Hess v. Trumbo, 84 of a purchaser for value without
S. W. 1153; 27 Ky. Law Rep. 320. notice. Wishardv. Hansen, 99 Iowa
Cf. Higgins v. Illinois Trust, etc. 307; 68 N. W. 691; 61 Am. St. Rep.
Bank, 193 111. 394; 61 N. E. 1024 238; Western Improvement Co. v.
(where the transferee was held to be Des Moines Nat. Bank, 103 Iowa
affected with notice). 455; 72 N. W. 657. •
' Barrow's Case, 14 Ch. D. 432. « West NashviUe Planing-MUl
' Barrow's Case, 14 Ch. D. 432. Co. v. Nashville Savings Bank, 86
" Wallace v. Carpenter, etc. Mfg. Tenn. 252; 6 S. W. 340; 6 Am. St.
Co., 70 Minn. 321; 73 N. W. 189; Rep. 835.
68 Am. St. Rep. 530.
Cf. Wishard v. Hansen, 99 Iowa
648
§ 739-§ 807] ESTOPPEL TO EXACT PAYMENT § 801
though not contained in the certificate will be sufficient to raise
the estoppel. For instance, where the secretary represented to
a transferee of shares that a certificate sta,ting the shares to be
fully paid had been lodged with him, whereas in fact no cer-
tificate at all or none stating the shares to be paid-up had been
deposited with him, the company was held in England to be
estopped from denying the shares to be paid-up to the prejudice
of the transferee ; ' but this decision is discredited, if not over-
ruled, by a later case in the House of Lords.^ Indeed, the
estoppel is not ordinarily or easily raised by mere parol decla-
rations of officers' or in any other way than by the issue of a
certificate.
§ 801. Estoppel in favor of Original Allottee. — In some excep-
tional cases the principle of estoppel may ha^e the effect of
exonerating even the original allottee from liability although
the shares had not in fact been paid for.* Thus, where a cor-
poration pledges its own shares as security for a loan, issuing
to the creditor a certificate stating that the shares have been
paid up in full, the company is estopped from holding the cred-
itor liable as shareholder on the ground that in fact the shares
were not paid up.^ The company might have had power to
issue the shares as collateral if they -had been fully paid; for
example, a person who had paid for shares in full might have
been willing to support the company's credit to the extent of
the value of the shares, and therefore the creditor was justified
in relying on the company's representation. In the same way,
where P gave W a sum of money to be used in paying for one
hundred fully paid shares to be issued to P, and W instead of car-
rying out this arrangement procured certain unpaid shares to be
issued to P, the certificate, however, falsely stating the shares to
be fully paid, the court held that the company was estopped
from holding P, although he was an original allottee, as the
' McKay's Case (1896), 2 Ch. "treasury stock"); Remington Au-
757. tomobUe & Motor Co., 153 Fed. 345,
' George Whitechurch, Ld. v. 349 (as to the Taber stock).
Cavanaugh (1902), A. C. 117. ' Bloomenthal v. Ford (1897),
' Browning v. Hinkle, 48 Minn. A. C. 156; Gasquet v. Crescent City
544 (headnote inadequate); 51 N. Brewing Co., 49 Fed. 496.
W. 605; 31 Am. St. Rep. 691. Cf. Otter v. Brevoort Petroleum
* Cf. Berry v. Rood, 168 Mo. 316, Co., 50 Barb. 247.
332; 67 S. W. 644 (as to purchase of
649
§ 802 PAYMENT FOR SHARES [ChAP. XIII
holder of unpaid shares.' However, in such cases the burden
of disproving notice of the fact that shares are not paid-up as
represented always rests on the allottee.^
§ 802-§ 806. Assessments on paid-up Shares.
§ 802. In general not lawful. — Limited liability is at com-
mon law one of the most important and fundamental character-
istics of a corporation. Often it furnishes the chief incentive to
the organization of a corporation instead of a partnership or
voluntary association. The essence of this limited liability is
that members of the corporation who have paid in full for their
shares — that is to say, who have contributed to the common
fund, or the capital of the company, all that they agreed to put
in — are under no further liability whatsoever.' This feature is
part of the very constitution of the company, and is indeed the
condition upon which alone the several shareholders consent to
become members. Hence, the corporation has no power by
internal regulations or by-laws to alter this rule, or to levy calls
or assessments upon the holders of shares previously issued and
fully paid.* To be sure, by-laws may perhaps impose upon
holders of fully paid shares fines for breaches of any reasonable
regulations of the company; ^ but this power is quite different
from a power to levy assessments for the purpose of raising
funds.
§ 803. Assessments by Consent of Shareholders. — Even, how-
ever, in the case of a limited company, the shareholders, by
' Parbury's Case (1896), 1 Ch. N. E. 716; 27 Ind. App. 1 (where
100; Kettle River Mines v. Bleasdel, the defendant had voted in favor of
7 Brit. Columb. 507 (to substantially the assessment) ; Sullivan County
the same effect). Club v. Butter, 26 N. Y. Misc. 306;
= Parbury's Case (1896), 1 Ch. 56 N. Y. Supp. 1 ; Enterprise Ditch
100, 106 (headnote inadequate). Co. v. Moffitt, 58 Nebr. 642; 79
» 1 Morawetz on Priv. Corps., N. W. 560; 45 L. R. A. 647; 76
2d ed., 131; 2 Clark & Marshall on Am. St. Rep. 122; Moore v. New
Priv. Corps., § 403. Jersey Lighterage Co., 57 N. Y. Super.
* Gresham v. Island City Savings Ct. 1 ; 5 N. Y. Supp. 192 ; Great
Bank, 2 Tex. Civ. App. 52; 21 S. W. Falls, etc. R. R. v. Copp, 38 N. H.
556; Wells v. Green Bay, etc. Co., 124.
90 Wise. 442; 64 N. W. 69; Trus- But cf. Omaha Law Library Ass'n
tees of Free Schools v. Flint, 13 Mete. v. ConneU, 55 Nebr. 396; 75 N. W.
(Mass.) 539; Reid v. Eatonton Mfg. 837.
Co., 40 Ga. 98; 2 Am. Rep. 563; » See supra, § 716.
Redkey Citizens, etc. Co. v. Orr, 60
650
§ 739- § 807] ASSKSSMENTS ON PAID-UP SHAKES § 804
provision in their regulations, may contract that they shall be
liable in excess of the limit for the purpose of adjusting the
equities inter sese, and in that event shares subsequently issued
'will be accepted subject to the liability, which may accordingly
be enforced by the corporation.' A person who has become
entitled to paid-up, non-assessable shares does not, it would
seem, waive his rights, or become liable to pay assessments on
the shares, by accepting a certificate which states that the
shares are "non-assessable beyond ten dollars per annum" or
by signing a receipt which states that the shares are held sub-
ject to the by-laws, which by-laws although attempting to
authorize the assessments were adopted after his right to non-
assessable shares had accrued.^ If shareholders agree among
themselves to pay certain assessments on full-paid shares, a
holder who pledges his shares to the company to secure the
payment of the assessment cannot subsequently refuse to pay
on ground that the assessment was tiJtra vires.^
§ 804. Assessments authorized by Statute. — The power to
levy assessments on the holders of fully paid shares is sometimes
conferred by statute.* Such statutes being in derogation of the
' Maxwell's Case, 20 Eq. 585; (holding that the agreement of
Mirage Irrigation Co. v. Sturgeon shareholders made by signing the
(Nebr.), 108 N. W. 977 (headnote by-laws cannot be enforced by
inadequate — a case where share- creditors).
holders accepted certificates ex- As to whether money voluntarily
pressly providing that the- shares paid by the shareholders to the cor-
were held subject to the power of the poration is to be treated as lent or
company to levy assessments over given to the company, see Bidwell
and above thj par value); Weeks v. v. Pittsburgh, etc. Ry. Co., 114 Pa. St.
Silver Islet Consol. Mining Co., 55 535; 6 Atl. 729 (where the transac-
N. Y. Sup. Ct. 1 (provision in share- tion was held to be a gift) ; Leavitt
certificate for forfeiture for non- v. Oxford, etc. Co., 3 Utah 265; 1
payment of assessments enforced). Pac. 356; Adas Loan Co., 9 Ont.
Cf. Redkey Citizens, etc. Co. v. L. R. 468; and infra, § 1316.
Orr, 60 N. E. 716; 27 Ind. App. 1 ^ SvUivan County Club v. Buder,
(holding that agreement of share- 26 N. Y. Misc. 306; 56 N. Y. Supp.
holders inter sese after issue of shares 1.
cannot be enforced by company); ' Piatt v. Birmingham Axle Co.,
Omaha Law Library Ass'n v. Con- 41 Conn. 255.
nell, 55 Nebr. 396; 75 N. W. 837 * Gardner v. Hope Ins. Co., 9 R.l.
(where liability to pay "dues," 194; 11 Am. Rep. 238 (where the
recognized expressly by the by-laws statute was passed after the shares
and impUedly by the incorporation were issued, in pursuance of a re-
paper, was held to be enforceable by served power to alter or repeal the
the corporation); Flint v. Pierce, act of incorporation); Santa Cruz
99 Mass. 68; 96 Am. Dec. 691 R. R. Co. v. Spreckles, 65 Cal. 193;
651
§ 804 PAYMENT FOR SHARES [ChAP. XIII
common law will be strictly construed. Thus, a statute author-
izing a corporation to provide for payment of debts by assess-
ment on the shareholders or otherwise has been construed as
authorizing assessments upon paid-up shares for the purpose of
discharging such debts only as by another statute the share-
holders are individually hable to pay.' So, a statute providing
that in case the capital should be impaired by losses, the directors
should "forthwith repair the same by assessment," was con-
strued as merely preventing the company from continuing busi-
ness with impaired capital, and not as imposing any personal
liability upon the several shareholders to make good the deficiency
for the benefit of creditors where the directors had refused
to levy an assessment and had preferred to throw the company
into liquidation.^ If the statute authorizes assessments for cer-
tain purposes, no assessment will be enforceable which is not
for those purposes exclusively.^ A provision that the shares shall
not be liable to assessment after the capital stock has been paid
in except by consent of three-fourths of the shareholders does
impliedly authorize assessments on paid-up shares, but only after
the capital stock shall have been completely subscribed and paid
in.' A prohibition of any assessments so long as the company
has "treasury stock" undisposed of does not apply where the
treasury stock is valueless and unsalable.^ On the other hand,
a statutory provision that any corporation may assess upon each
share of stock such sums of money as the company may think
proper, not exceeding the par value of the stocl^, has been con-
3 Pac. 661, 802 (where the statute Co., 19 Oh. St. 369 (same point);
which was held to authorize the as- Sparks v. Lower Payette Ditch Co.,
sessment was by no means unam- 2 Idaho 1030; 29 Pac. 134 (uphold-
biguous); Younglove v. Steinman, ing statute authorizing assessments
80 Cal. 375; 22 Pac. 189 (statute where by pre-existing law each
authorizing assessment for "paying shareholder would have been person-
expenses, conducting business or ally liable for his proportion of the
paying debts" held to authorize as- corporate indebtedness),
sessment for necessary repairs) ; ' Ossipee, etc. Mfg. Co. y. Canney,
Gary v. York Mining Co., 9 Utah 54 N. H. 295, 315-318.
464; 35 Pac. 494. ' Dewey v. St. Albans Trust Co.,
Cf. Enterprise Ditch Co. v. Moffitt, 57 Vt. 332.
58 Nebr. 642; 79 N. W. 560; 45 ' Lancaster Starch Co. v. Moore,
L. R. A. 647; 76 Am. St. Rep. 122 62 N. H. 671.
(where a statute authorizing assess- * Atlantic De Lairie Co. v. Mason,
ments was held unconstitutional as 5 R. I. 463.
applied to shares previously issued) ; = Jones v. Bonanza Mining, etc.
Ireland v. Palestine, etc. Turnpike Co. (Utah), 91 Pac. 273, 277.
652
§ 739-§ 807] ASSESSMENTS ON PAID-UP SHARES § 806
strued as conferring a power to assess .paid-up shares and to
forfeit the shares for non-payment.' Even where an express
statute authorizes assessments on paid-up shares, it might be
sometimes held that the company's only remedy is by forfeiting
the shares for non-payment and that the several shareholders
are subject to no personal liability for the assessment.^ It was
conceded by the court in a Pennsylvania case that the corpora-
tion might by internal regulation or by-law limit its statutory
power to assess paid-up shares.' If this be correct, the liability
for assessments should be carefully distinguished from a liability
to creditors, which, if imposed by statute, certainly cannot be
waived by the corporation. It has been said that even where
the power exists to levy assessments on fully paid shares, it can-
not be exercised, in the absence of some element of waiver, unless
the entire capital has been subscribed ; * but, as we have seen,
the defence that the capital has not been fully subscribed is not
available against an action for calls where the company has with
the defendant's consent begun business and incurred obligations,
and as this is almost always the case before a power to levy assess-
ments on fully paid shaires is exercised, the defence would seem
tt) be rarely available.
§ 805. Assessments in Reorganization. — Sometimes, under
schemes of reorganization, so-called assessments are levied on
holders of paid-up shares ; but although in practice the payment
of such assessments is virtually compulsory, since shareholders
who refuse to pay will be excluded by foreclosure or otherwise
from participation in the reorganization, yet in the theory of
the law the shareholders are quite at liberty to pay or not to
pay, as they please.
§ 806. Attempts to evade Rule Prohibiting Assessments on paid-
up Shares. — The rule of law prohibiting compulsory assess-
ments upon paid-up shares cannot be circumvented by any
device. Hence, a contract whereby the entire business and
' Price's Appeal, 106 Pa. St. 421. Co., 96 Cal. 322; 31 Pac. 100 (where
^ But see Santa Cruz R. R. Co. v. an assessment was sustained on
.Spreddes, 65 Cal. 193; 3 Pac. 661, shares issued as fully paid-up and
S02 (where defendant was held per- unassessable),
sonally liable). * Svllivan County Club v. BiMer,
» Price's Appeal, 106 Pa. St. 421, 26 N. Y. Misc. 306; 56 N. Y.
424. Supp. 1.
But of. Green v. Abietine Med.
653
§ 807 PAYMENT FOR SHARES [ChAP. XIII
undertaking of a corporation is to be sold to a new company in
consideration of partly paid shares in the new company and of
the assumption by the new company of the debts of the old,
with a stipulation that in the winding-up of the old company
the partly paid shares received from the new company should
be distributed among the shareholders of the old company and
that the quota of any shareholder who should refuse to accept
the same should be sold and the proceeds applied in reduction
of the debts which the new company agreed to assume, is ultra
vires of the old company, even though the company had power
to sell its undertaking in exchange for partly paid shares; ^ for
the whole agreement is an obvious scheme to force the share-
holders to accept partly paid shares in lieu of fully paid shares.
The same result has been reached where the proceeds of sale of
the quota of the dissentient shareholders of the old company in
the shares of the new company were to be distributed among
such dissentient shareholders pro rata}
§ 807. Liability of Shareholders to Creditors. — At common
law, the liability of shareholders to pay the par value of their
shares is owing to the corporation alone and not to its creditors.
The rights of creditors are derivative, although to be sure, as
explained above, the law sometimes strikes down agreements
between the subscriber and the company which, so far as the
corporation is concerned, would be quite harmless, but which if
enforced would be prejudicial to creditors. In addition to these
derivative rights of creditors, statutes often impose upon the
several shareholders further liabilities in their favor. Both the
common-law, or derivative, and the statutory, or direct, rights
of creditors against the shareholders are of little practical impor-
tance so long as the corporation is prosperous. A business cor-
poration must, as a practical matter, either pay its debts when
judicially ascertained or withdraw from business. Consequently
the various rights of creditors against the shareholders, whether
direct or indirect, are closely connected with the subject of
' Manners v. St. David's Gold, " Bisgood v. NUe Valley Co
etc. Co. (1904), 2 Ch. 693. (1906), 1 Ch. 747.
654
§ 739-§ 807] LIABILITY TO CREDITORS § 807
winding-up and dissolution, and therefore are excluded from
this work. For this reason it is unnecessary here to classify the
various statutes subjecting shareholders to liabilities t® creditors
of greater or less extent, or to digest the multitudinous cases in
which such statutes have been construed or applied.
655
CHAPTER XIV
FORFEITURE OF SHARES
Section
Authority of corporation to forfeit shares . .... 808-810
Whether forfeiture amounts to illegal reduction of capital . . 808
Whether power may be conferred by by-law without statutory
authority .... . . 809
Whether power affected by a charge on uncalled capital ... 810
Notice of forfeiture 811-814
Necessity for notice 811
Requisites of notice in general . 812
Kind of notice — constructive or personal notice, etc 813
To whom notice must be given 814
When forfeiture becomes absolute 815-816
In general . 815
Effect of provision for notice to delinquent 816
Purging forfeiture by payment or tender of amount of call, etc. 817-819
When and how forfeiture may be purged . 817
Acceptance of payment after forfeiture has become absolute . . 818
Effect of set-off against call . . . 819
Effect of judgment for amount of call on right to enforce forfeiture . 820
Effect of company's refusal to accord to delinquent full rights as
shareholder ... . . 821
Forfeiture invalid unless intended to benefit company 822
Loss of right to forfeit shares by waiver or laches . 823
Waiver by shareholder of irregularities in forfeiture — laches . . . 824
Waiver by the company of irregularities in forfeiture ... . 825
Surrender or cancellation of shares as equivalent to forfeiture . 826
Remedies of shareholder against irregular or void forfeiture . . 827
Consequences of forfeiture ef shares 828-831
Effect of forfeiture on liability of shareholder 828
Sale or reissue of forfeited shares •. 829
Cancellation of forfeiture . . . 830
Effect of forfeiture on agent's right to commissions for procur-
ing subscriptions 831
§ 808-§ 810. Avihoriiy of Corporation to Forfeit Shares. '
§ 808. In general — Whether Forfeiture amounts to illegal Re-
duction of Capital. — Breaches of duty on the part of share-
holders and more particularly breaches of duty in non-payment
of calls are usually punishable by forfeiture of their shares. The
forfeiture may take the form of a strict forfeiture, by which the
forfeited shares revert to the company ; but sometimes the shares
656
§ 808-§ 831] UNDER BY-LAWS § 809
are to be sold for the account of the delinquent holder. Not even
strict forfeitures are illegal as a reduction of capital ' for several
reasons. In the first place, the incorporation laws, as a rule,
either expressly authorize forfeiture of shares for non-payment
of calls or else contain provisions which impliedly contemplate it.
Secondly, the forfeiture involves no reduction of the actual
capital, but at most affects the nominal capital. Lastly, forfeiture
for non-payment of calls is within the rule (which seems to be
supported by the authorities) permitting a company to accept a
surrender of shares in satisfaction of a debt of which payment
could be obtained in no other way.''
§ 809. Whether Power may be Conferred by By-law without
Statutory Authority. — Where forfeiture of shares is not affirma-
tively authorized by statute, a considerable number of authorities
hold that the company has no power to provide therefor by its
by-laws or regulations;' but on principle the contrary might
well be held, since a forfeiture is a reasonable means of compel-
ling the shareholders to perform their duties.^ Of course, any
by-law or regulation attempting to impose a forfeiture for the
doing of any act which the shareholder has an absolute right to
do, such as entering suit against the company on a bona fide
claim, would be void.* In practice, forfeitures are rarely imposed
except for non-payment of calls.
The statutes or regulations authorizing the imposition of the
penalty of forfeiture should be strictly construed ; and in order
that a forfeiture should be held valid all the terms and condi-
tions must be strictly complied with."
' Trevor v. Whitworth, 12 A. C. 458; Mueller v. Madison Bldg., etc.
409, 417, 429. Cf. Dronfidd Silk- Ass'n, 11 S. Dak. 43; 75N. W. 277;
stone Coal Co., 17 Ch. D. 76, 79, 84, Lesseps v. Architects' Co., 4 La. Ann.
per Jessel, M. R. 316 (where the shareholders had as-
' See supra, § 638. sented to the by-law) ; Kirk v.
' Long Island R.R. Co., l^Wmdi. NawiU, 1 T. R. 118; Minnehaha
37; 32 Am. Dec. 429; Budd v. MuLt- Driving Park Ass'n v. Legg, 50 Minn.
nomah Street Ry. Co., 15 Oreg. 413, 333, 334; Barton's Case, 4 De G. &
417; 15 Pac. 659; 3 Am. Rep. 169 J. 46.
(semble) ; Purdy v. Bankers' Life * See supra, § 716.
Ass'n (Mo.), 74 S. W. 486; 101 ^ Hope v. International Financial
Mo. App. 91; March, V. Pairmount Soc, 4 Ch. D. 327; and cases cited
Creamery Ass'n, 32 Pa. Sup. Ct. supra, § 718.
517 (supportable on another ground, Cf. Allnutt v. Subsidiary High
for which see supra, § 718). CouH, 62 Mich. 110; 28 N. W. 802.
Cf. Pplford V. Fire Dept., 31 Mich. " Johnson v. Lyttle's Iron Agency,
VOL. I. — 42 657
§ 810 FORFEITURE OF SHARES [ChAP. XIV
§ 810. Whether Power affected by a Charge on Uncalled Capital.
— The power of the company to enforce a forfeiture of shares for
non-payment of calls is not affected by the fact that the com-
pany may have issued bonds or debentures secured by a charge
on the unpaid capital.'
§ 811-§ 814. Notice of Forfeiture.
§811. Necessity for Notice. — Notice of some sort to the
delinquent is usually prescribed in order to enable him to per-
form his duties and thus prevent the forfeiture. Even in the
absence, however, of any affirmative requirement of notice, it is
submitted that notice should be essential to the validity of a
forfeiture,^ although at least one decision dispenses with the
necessity of notice.' A provision for notice after the forfeiture has
been consummated and become absolute is directory merely, and
a failure to give the notice does not undo the forfeiture ; * but as
we shall presently see, the inclination of the courts is to hold ,
that the forfeiture was not intended to become absolute until the
expiration of the notice. In any case of forfeiture for non-
payment of calls, it is of course necessary that the calls should
be valid ,^ and consequently that any notice of the call that may
be essential to its enforceability should be given.'
5 Ch. D. 687; Morris v. MetaUine ' Germantovm Passenger Ry. Co.
Land Co., 164 Pa. St. 326; 30 Atl. v. FiOer, 60 Pa. St. 124; 100 Am.
240; 44 Am. St. Rep. 614; 27 L. R. Dec. 546.
A. 305; Clarke v. Hart, 6 H. L. Cas. *■ Knighfs Case, 2 Ch. 321.
633; Westcott v. Minnesota Mining " Gar4en Oidly Mining Co. v.
Co., 23 Mich. 145; York, etc. R. R. McLister, 1 A. C. 39; Raht v. Sevier
Co. V. Ritchie, 40 Me. 425; Dearborn Mining, etc. Co., 18 Utah 290; 54
V. Washington Sav. Bank, 18 Wash. Pac. 889.
8; 50 Pac. 575; Crissey v. Cook, 72 Where a forfeiture is declared for
Pac. 541; 67 Kans. 20 (semble); non-payment of several calls, it is
Corcoran v. Sonora Mining, etc. Co., invalid if any of the calls is invalid;
71 Pac. 127 ; 8 Idaho 651 ; German- Lewey's Island R. R. Co. v. Bolton,
town Pass. Ry. Co. v. Fitter, 60 Pa. 48 Me. 451 ; 77 Am. Dec. 236.
St. 124. ° Morris v. Metalline Land Co.,
> Agency Land & Finance Co., 164 Pa. St. 326; 30 Atl. 240; 44 Am.
20 Times L. R. 41. St. Rep. 614; 27 L. R. A. 305.
' Rutland, etc. R. R. Co. v. Thrall, But see Austin's Case, 24 L. T.
35 Vt. 536; Pvlford v. Fire Dept, 932, upholding as against the com-
31 Mich. 458; Ddacy v. Neuse Nav. pany a forfeiture for non-payment of
Co., 1 Hawks (N. Car.) 274; 9 Am. a call of which due notice had not
Dec. 636. been given.
Cf. supra, p. 580, n. 1.
658
§ 808-§ 831] NOTICE OF FORFKITURE § 813
The same notice is sometimes made to serve the double pur-
pose of notifying the shareholder that a call has been made and
of warning him that unless payment is made within a certain
time the shares will be forfeited.
§812. Requisites of Notice in general. — Where notice of
forfeiture is required, a notice expiring on an impossible date —
e. g., on Monday the 9th where the 9th falls on Friday — is bad.'
A notice demanding, under pain of forfeiture, payment of a
larger sum than is due is of no effect.^ The notice must describe
the shares truthfully ; and if it contains a material misdescription,
the resulting forfeiture will be invalid.^ It is not necessary that
the notice should specify that failure to make payment as
required will be followed by forfeiture.* If the by-laws require
a notice from the general secretary of the corporation, notice
from a local secretary would be insufficient.* Where notice of
thirty days is required before the resolution declaring the for-
feiture or ordering the sale, notice given thirty days before the
sale is insufficient.' If the statute require such notice as may be
prescribed by by-law, there cannot be a valid forfeiture unless a
by-law fixing the kind of notice be first adopted.^ A regulation
providing that the notice must "require" the shareholder to
pay is complied with if the notice indicate that failure to pay will
be followed by forfeiture.'
§ 813. Kind of Notice. — Constructive or Personal Notice, etc.
— Personal notice should be given where practicable. Indeed,
the notice must be -personal unless some form of constructive
notice be provided for by statute or by-law.' A notice which is
taken to the shareholder's last place of business and forwarded
in pursuance of directions there found, but which in fact never
reaches him, is not sufficient,'" unless the regulations provide that
notice sent to the shareholder's business address shall be good.
Where notice by publication in a newspaper is directed by the
' Watsm V. Bales, 23 Beav. 294. tm, 48 Me. 451 ; 77 Am. Dec.
' Johnson v. Lytde's Iron Agency, 236.
5 Ch. D. 687. ' Armstrong v. Merchants' Man-
» Financial Corporation, 2 , Ch. He Co., 32 Ont. R. 387.
714. ' Oray v. Stevenson, 25 Vict. L.
* Hm v. Nishet, 100 Ind. 341, R. 476.
.355-356. ° Van Diemen's Land Co. v.
' Cf. Payn v. Mutiud Relief Soc., Cockerell, 1 C. B. n. s. 732.
17 Abb. N. C. (N. Y.) 53. " Fields v. United Brotherhood, 60
' Lewey's Island R. R. Co. v. Bol- 111. App. 258.
659
§ 814 FORFEITURE OF SHARES [ChAP. XIV
company's regulations, it must be given ; and not even personal
notice to the delinquent will suffice to sustain the forfeiture unless
the required publication is had.' So, if the by-laws require
notice by mail or personal notice, notice by publication is^ in-
effective, even though the notice as published was actually seen
by the delinquent shareholder.^
§ 814. To whom Notice should be given. — Notice should be
given to the registered owner of the shares.' Hence, in case of
a bankrupt shareholder whose assignee has not been registered
on the company's books as a member, the notice should be given
to the bankrupt although the company knows of the bankruptcy.*
§ 815-§ 816. When Forfeiture becomes absolute.
§ 815. In general. — The forfeiture becomes absolute at
whatever time the regulations by which the company is governed
so provide. Usually a formal declaration of forfeiture is passed.
Certainly some such formality is desirable. Consequently, even
where the regulations provide that, upon the happening of this
or that event, the shares shall be forfeited without any further
act on the company's part, nevertheless the construction will be,
not that the shares become ipso facto forfeited, but that the
company may at its option by some overt act enforce a forfeitm-e."
'Any legal evidence of an intention to exercise this option is
sufficient to complete the forfeiture, a formal declaration of
forfeiture by resolution of the directors or shareholders not being
necessary," unless expressly required by statute or the company's
' Morris v. Metalline Land Co., Childy. Hudson's Bay Co., 27.^1115.
164Pa. St. 326; 30AtI. 240; 44 Am. 207, 209; Northwestern, etc. Ass'n,
St. Rep. 614; 27 L. R. A. 305. v. Schauss, 148 III. 304 ; 35 N. E. 747.
' Mitchell V. Vermont Copper But see Weeks v. Silver Islet, etc.
Mining Co., 40 N. Y. Sup. Ct. 406, Mining Co., 23 Jones & S. (N. Y.) 1 ;
413 (headnote inadequate). See Carr v. Carr, 1"C. B. n. s. 197.
S. C. 67 N. Y. 280. Cf. Freckmann v. Supreme Coun-
' Cf. Armstrong v. Merchants' ciZ, 96 Wise. 133 ; 70 N. W. 1113 (as
Mantle Co., 32 Ont. R. 387. to mutual benefit societies); Leh-
* Graham v. Van Diemen's Land mun v. Clark, 174 111. 279; 51 N. E.
Co., 1 H. & N. 541. 222; 43 L. R. A. 648 (as to mutual
Compare the cases as to notice of insurance companies) ; McDonald
calls, supra, § 750. v. Ross-Lewin, 29 Hun (N. Y.) 87
« Bigg's Case, 1 Eq. 309; Moore (mutual benefit society); Rood v.
V. Rawlins, 6 C. B. n. s. 289; Canal Railway Pass. etc. Ass'n, 31 Fed. 62.
Co. V. Sansom, 1 Binney (Pa.) 70; » Woollaston's Case, 4 De G. & J.
660
§ 808-§ 831] WHEN FORFEITURE BECOMES ABSOLUTE § 816
regulations.' But a declaration of an intention to forfeit shares
at some future day will not become absolute by mere lapse of
time : there must be evidence of a present election to treat the
shares as forfeited.^ When the statute or by-law providing for
the forfeiture requires a sale of the forfeited shares for the ac-
count pf the delinquent holder, the forfeiture is not complete
until such sale is had ; ' but ordinarily it is no concern of the
delinquent what is done by the company with the forfeited
shares.*
§ 816. EfEect of Provision for Notice to Delinquent. — Without
the very clearest provision in the statute or by-law which regulates
the forfeiture, the courts will refuse to hold that the forfeiture
becomes absolute before the expiration of the prescribed notice.^
This is true although some of the language of the statute author-
izing the forfeiture, if taken by itself, might seem to indicate
that the forfeiture should become absolute before the expiration
of the notice; for the very object of prescribing notice is to
afford a period of grace before the extreme penalty is exacted."
437; Webster's Case, 32 L. J. Ch.
135. Of. Crissey v. Cook, 72 Pac.
541 ; 67 Kans.* 20 (where the resolu-
tion was general, that all shares
upon which defaults had been com-
mitted be forfeited).
But see Clarke v. Hart, 6 H. L.
Cas. 633.
' Edinburgh, etc. Ry. Co. v. Heb-
blewhite, 6 M. & W. 707.
" Macon, etc. R. R. Co. v. Vason,
57 Ga. 314; Hays v. Franklin Co.
Lumber Co., 35 Nebr. 511 (headnote
inadequate) ; 53 N. W. 381.
Cf. Crissey v. Cook, 72 Pac. 541;
67 Kans. 20.
' Minnehaha Driving Park Ass'n
V. Legg, 50 Minn. 333 (headnote in-
adequate); 52 N. W. 898. Cf.
Lewey's Island R. R. Co. v. Bolton,
48 Me. 451; 77 Am. Dec. 236;
Dearborn v. Washington Sav. Bank,
18 Wash. 8; 50 Pac. 575; Moore v.
Wheal Byjerkerrio Tin Mining Co.,
17 Vict. L. R. 680 (holding that if
sale does not take place on day first
advertised, a new notice of sale may
be given, preserving, however, the
delinquent's right of redemption un-
til a sale is actually had). As to
difference between a power to for-
feit shares and a power to sell them
and apply the proceeds in payment
of the indebtedness, see § 955, and
also Athol, etc. R. R. Co. v. Prescott,
110 Mass. 213; Mueller v. Madison
Bldg., etc. Ass'n, US. Dak. 43; 75
N. W. 277.
* Weeks v. Silver Islet, etc. Mirtr
ing Co., 23 Jones & S. (N. Y.) 1,
14 ; Rutland, etc. R. R. Co. v. ThroR,
35 Vt. 536 ; Murphy v. Patapsco Ins.
Co., 6 Md. 99.
^ Van Diemen's Land Co. v.
Cockerell, 1 C. B. n. s. 732.
° Van Diemen's Land Co. v.
Cockerell, 1 C. B. N. s. 732.
661
§ 817 FORFEITURE OF SHARES [ChAP. XIV
§ 817-§ 819. Purging Forfeiture by Payment or Tender of
Amount due.
§ 817. When and how Forfeiture may be Purged. — At any
time before the forfeiture becomes absolute, the dehnquent may
purge the forfeiture by paying the overdue calls with interest and
expenses.^ Tender of the amount due for calls will have the
same effect as actual payment in preventing or purging a for-
feiture ; ^ and a tender of a cheque may be. equivalent to a tender
of cash if no objection be made on the ground that commercial
paper instead of cash was offered.^ If the delinquent wishes to be
relieved of the shares because his subscription was obtained by
fraud but is not willing to run the risk of forfeiting money that
he has already paid thereon, he may pay the overdue calls into
court without prejudice to any right to have his membership
rescinded; but he cannot have the forfeiture enjoined.* After
the forfeiture has once become absolute, not even a court of
equity has jurisdiction to relieve against it, even though the
delinquent should offer to pay all calls with interest as well as all
damages and expenses of the company.*
§ 818. Acceptance of Payment after Forfeiture has become
Absolute. — Even after the forfeiture has become absolute, it
would seem that the acceptance by the company of the amount
due on the shares would be equivalent to a waiver or cancellation
of the forfeiture ; * but the fact that cases of former delinquencies
' Van Diemen's Land Co. v. * Ripley v. Paper Bottle Co., 57
Cockerell, 1 C. B. n. s. 732; MUchdl L. J. Ch. 327.
V. Vermont Copper Mining Co., 67 ' Sparks v. Liverpool Waterworks
N. Y. 280. Cf. Bostock v. Edgar, 24 Co., 13 Ves. 428; Weeks v. SUver
Vict. L. R. 677 (holding that under Islet, etc. Mining Co., 23 Jones & S.
the Victoria Companies Act the re- (N. Y.) 1 ; Germantovm Pass. Ry.
demption does not relate back to the Co. v. FiUer, 60 Pa. St. 124 ; 100
time of the delinquency, but that Am. Dec. 546.
there is an interval during which the ' Cf. Li?ne City Bldg., etc. Ass'n
delinquent is not a shareholder). v. Black, 136 Ind. 544, 558^60; 35
^ Mitchell V. Vermont Copper N. E. 829 ; Order of Chosen Friends
Mining Co., 67 N. Y. 280; Wilson v. Austerlitz, 75 111. App. 75 (ac-
v. Duplin Telephone Co., 52 S. E. 62; ceptance of a less sum in compro-
139 N. Car. 395 (where the delin- mise); Metropolitan Accident Ass'n
quent tendered more than the v. Windover, 137 111. 417; 27 N. E.
amount due). 538; Bartling v. Edwards, 84 111.
» Clarke's Case, 27 L. T. 843. App. 471; Supreme Tribe v. Hall,
662
§ 808-§ 831] WHEN NOT BENEFICIAL TO CORPORATION § 822
have not been visited with the penalty of forfeiture does not
justify a member in faihng to make prompt payment of calls
subsequently made.'
§ 819. Effect of Set-ofE against Call. — A forfeiture of shares
for non-payment of calls is not invalidated by the fact that the
supposedly delinquent shareholder has a good set-off against the
calls.^
§ 820. Effect of Judgment for Amount of Call on Right to enforce
Forfeiture. . — It has been held that after a company has recov-
ered judgment against a shareholder for an overdue call, it cannot
subsequently enforce a forfeiture for default upon that very call ; '"
but this decision turned largely on the peculiar terms of the
regulations by which that particular corporation was governed.
§ 821. Effect of Company's Refusal to accord to Delinquent his
full Rights as Shareholder. — In one case it was held that a
forfeiture for non-payment of assessments cannot be sustained
where the shareholder's refusal to pay is induced by the com-
pany's refusal to permit him to exercise his right of examining
the books ; * but it is difficult to see why the company should be
subjected to this penalty for its failure to recognize the share-
holder's right, and perhaps the decision was not intended to lay
down a principle of general application.
§ 822. Forfeiture invalid unless intended to benefit Company.
— No forfeiture should be enforced unless really beneficial to the
company; and any forfeiture which is not believed bona fide to
be for the good of the company may be set aside.^ For this
24 Ind. App. 316; 56 N. E. 780; 79 ' Giles v. HvU, 3 Ex. 18.
Am. St. Rep. 262 ; Modern Woodmen * Buker v. Leighton Lea Asfn,
V. Jameson, 48 Kans. 718; 30 Pac. 164 N. Y. 557; 58 N. E. 1085 (re-
460. versing s. c. 18 N. Y. App. Div.
But see Carr v. Carr, 1 C. B. 548; 46N. Y. Supp. 35; and affirm-
N. s. 197. ing the dissenting opinion of Follett,
' Harvey v. Grand Lodge, 50 Mo. J., in the court below).
App. 472. But see Moore v. Order ' Richmond's Case, 4 K. & J. 305 ;
of Railway Conductors, 90 Iowa 721 ; Common v. McArthur, 29 Can. Sup.
57 N. W. 623. Ct. 239.
' Johnson v. LytUe's Iron Agency, Cf. Hall's Case, 5 Ch. 707.
5 Ch. D. 687, 689, 692 (headnote
inadequate). Cf. supra, § 759.
663
§ 823 FORFEITURE OF SHARES [ChAP. XIV
reason a forfeiture of shares held by a person about whose
solvency no doubt is entertained is in general invalid.' So, too, a
forfeiture of shares on which nothing has been paid and which
,are not selling at a premium cannot well be advantageous to the
company and is therefore invalid.^ Similarly, an agreement by
which a dehnquent shareholder is allowed to retire upon payment
of less than could have been collected from him if a forfeiture
had been enforced cannot be supported as a forfeiture.'
§ 823. Loss of Right to forfeit Shares by Waiver or Laches. —
The company's right to enforce a forfeiture may be lost by laches
or waived by the company in any particular case.* Any action
or inaction on the company's part which would render the
enforcement of the forfeiture unjust may be relied upon as
establishing such a waiver. It has been held in Tennessee
that where a corporation has the right to sell or forfeit shares
for non-payment of each call as made, the company, after
omitting to exercise that power as each call became due and
having waited until a number of calls are made, loses by the
delay its remedy by forfeiture or sale.^ This case stands
alone, however, and one may well doubt whether the same
doctrine would be applied in other states." Indeed, the decision
is rested by the court itself upon the peculiar terms of the
statute which was being construed, rather than upon any general
principles of law.
§ 824. Waiver by Shareholder of Irregularities in Forfeiture — •
Laches. — Irregularities in a forfeiture of shares may be cured
by waiver.' For instance, an objection to a forfeiture of shares
based upon the fact that in the notice and resolution of forfeiture
the shares were described as £20 shares instead of, according to
the real legal nature, as £100 shares, is waived by asking a re-
mission of the forfeiture as a matter of grace.' Mere laches
will not, however, disentitles a shareholder to relief against an
invahd forfeiture: there must be evidence of abandonment of
y's Case, 17 Sol. J. 745; * Cf. supra, § 818.
Esparto Trading Co., 12 Ch. D. 191. « Stokes v. Lebanon, etc. Turn-
2 Ex parte Jones, 27 L. J. Ch. pike Co., 6 Humph. (Tenn.) 241.
666. ° See supra, § 818.
Cf. Slee V. Broom, 19 Johns. ' Cf. Miller v. Orand Lodge, 72
(N. Y.) 456; 10 Am. Dec. 273. Mo. App. 499.
' Hall's Case, 5 Ch. 707. Cf. « Financial Corpcyration, 2 Ch.
supra, § 636. 714.
664
§ 808-§ 831] IRREGULAR AND VOID FORFEITURES § 827
his rights or some facts sufficient to estop him from attacking
the forfeiture.'
§ 825. Waiver by the Company of Irregularities in Forfeiture.
— In some cases a shareholder who is anxious to retire sets up an
irregular forfeiture and relies upon a waiver by the company to
cure the irregularities.^ Notably was this the case in a series of
English decisions arising in the winding-up of the Agi-iculturists
Cattle Company.' That company was incorporated under the
Companies Act of 1844 so that the liability of its members was
unlimited : hence questions as to illegal reductions of capital, so
important in the case of limited companies, did not arise. These
cases, therefore, are of little or no general importance in America
at the present day; and accordingly it has not seemed worth
while to attempt a statement or explanation of their somewhat
complicated facts.*
§ 826. Surrender or Cancellation of Shares as equivalent to
Forfeiture. — Inasmuch as the company and the shareholder
may respectively waive irregularities in the forfeiture, it follows
that by agreement between them a formal forfeiture may be
entirely dispensed with, the shares which are liable to forfeiture
being surrendered or cancelled by agreement. But in order to
be sustained as a forfeiture, any such cancellation or surrender
of shares must have been intended as, in substance, a forfeiture.*
§ 827. Remedies of Shareholder against Irregular or void For-
feiture. — The shareholder hats several remedies open to him
against an irregular or void forfeiture. In general, he may have
the same remedies by action for damages, writ of mandamus, or
bill in equity, which are open to a shareholder whose name has
been stricken from the list of members in pursuance of a forged
or otherwise void transfer." He may have an action for damages,
' Garden Gvlly Mining Co. v. 5 H. L. 606; Spackman v. Evans,
McLister, 1 A. C. 39. Cf. Prendergast L. R. 3 H. L. 171 ; HouLdsworth v.
V. Twrttm, 1 Y. & C. Ch. 98; Ride v. Evans, L. R. 3 H. L. 263.
Jewell, 18 Ch. D. 660 ; Clarke v. Hart, * For a clear statement see Ham-
6 H. L. Cas. 633; Raht v. Sevier ilton's Manual of Company Law, 2d
Mining, etc. Co., 18 Utah 290; 54 ed., pp. 222-225.
Pac. 889; Ormshyv. Vermont Copper ° Esparto Trading Co., 12 Ch. D.
Mining Co., 56 N. Y. 623. 191. See also Gmoer's Case, 6 Eq.
2 Crissey v. Cook, 72 Pac. 541 ; 77, and supra, § 636, § 822.
67 Kans. 20. ° Herbert Kraft Co.. v. Bank of
' See Evans v. Smallcombe, L. R. Orland, 133 Cal. 64; 65 Pac. 143.
3 H. L. 249; Dixon v. Evans, h. R. See infra, § 93S-§ 937. ^^
665
§ 828 FORFEITURE OF SHARES [ChAP. XIV
as for a conversion, against the company.' Or, he may file a bill
in equity to have the forfeiture annulled.^ In such a suit he
may pray a declaration that the forfeiture is void instead of
a concellation of the forfeiture and return of the shares ; it is all
one and deceives nobody.' A bill in equity to enjoin an irregu-
lar forfeiture * will not lie unless the plaintiff offers to do equity
by paying any calls or assessments that may be overdue.* An
irregular forfeiture is to be distinguished from a void forfeiture ;
and therefore a statute of limitations restricting the period within
which actions may be brought for the recovery of forfeited shares
where the forfeiture is attacked because of some irregularity does
not apply where the gi-ound of attack is that the assessment for
non-payment whereof the forfeiture was attempted was wholly
void.'
§ 828-§ 831. Consequences of Forfeiture of Shares.
§ 828. Effect of Forfeiture on Liability of Shareholder. — The
effect of a consummated forfeiture is that the holder of the for-
feited shares ceases to be a member of the company from the
moment when the forfeiture becomes absolute. - From that time
forth, he is a mere stranger to the company. Hence he is not
» New Chile Gold Mining Co., 45 Telephone Co., 52 S. E. 62; 139 N.
Ch. D. 598; Allen v. Am. Bldg. & Car. 395.
Loan Ass'n, 49 Minn. 544; 52 N. W. As to the remedy by mandamus,
144; 32 Am. St. Rep. 574. As to see Delacy v. Neuse Nav. Co., 1
the measure of damages in such Hawks (N. Car.) 274.
an action, see Budd v. Mvltnomah ' Sweny v. Smith, 7 Eq. 324, 333.
Street Ry. Co., 15 Oreg. 413, 419- * As to whether the remedy at
420 (headnote inadequate) ; 15 Pac. law is adequate so as to exclude
659; 3 Am. Rep. 169; Carpenter equity jurisdiction, see Isbester v.
V. Am. Building & Loan Ass'n, Murphy Mfg. Co., 95 111. App. 105
54 Minn. 403; 56 N. W. 95; 40 (headnote inadequate).
Am. St. Rep. 345; Nicholson- ' Burham v. San Francisco Fuse
Watson, etc. Co. v. Urquhart (Tex.), Mfg. Co., 76 Cal. 26; 17 Pac. 939.
75 S. W. 45; 32 Tex. Civ. App. As to bills to enjoin a forfeiture of
527; Grand Valley Irr. Co. v. shares, see further Schuetz v. Ger-
Fruita Imp. Co. (Colo.), 86 Pac. man-American Real Estate Co., 21
324 (full value not recoverable where N. Y. App. Div. 163; 47 N. Y. Supp.
the shares were bought in by the 500; Moore v. JV. J. Lighterage Co.,
shareholder). 25 Jones & S. (N. Y.) 1.
' Sweny v. Smith, 7 Eq. 324 » Herbert Kraft Co. v. Bank of
(holding that the bill may be filed Orland, 65 Pac. 143 ; 133 Cal. 64.
on behalf of plaintiff and all other ' New Chile Gold Mining Co., 45
shareholders); Wilson v. Duplin Ch. D. 598.
666
§ 808-§ 831] CONSEQUENCES § 828
liable for calls or assessments subsequently made upon the
shareholders.' It makes no difference that his name is not
removed from the register of shareholders and that the company
is in liquidation.^ By the weight of authority, a forfeiture wipes
out all liability upon the forfeited shares, even for calls made
before the forfeiture ; ^ and the same rule is applied where the
shareholder has given his note for the call or assessment in
question,* or where the company prior to the forfeiture had
brought suit to recover the call.' But according to some authori-
ties and under some statutes, the holder of forfeited shares
remains liable for the calls that were due at the time of the for-
feiture ; ° though the amount realized by the company from a
sale of the forfeited shares must be credited in satisfaction
■pro tanto of any such liability.' The question of course turns on
the construction of the particular statute or other instrument
which authorizes the forfeiture ; and for this reason no general
rule can be laid down. Cases of strict forfeiture may be governed,
perhaps, by slightly different principles from cases of sale of the
shares for the account of the delinquent holder.* Where the
regulations to which the corporation is subject provide that a
holder of forfeited shares shall continue liable for all calls due
at the time of forfeiture, such liability is an ordinary debt " and
is therefore not barred by any statute of limitations applicable to
» Knight's Case, 2 Ch. 321. Cf. * Ashton v. Burbank, 2 Dillon
Webster's Case, 32 L. J. Ch. 135. 435. But see contra: Mitchell v.
' Lyster's Case, 4 Eq. 233. Rome R. R. Co., 17 Ga. 574.
' Stocken's Case, 3 Ch. 412, 415 " Small v. Herkimer Mfg. Co., 2
(semble) ; Rutland, etc. R. R. Co. v. N. Y. 330.
Thrall, 35 Vt. 536; Macavly v. ° Inglis v. Great Northern Ry. Co.,
Robinson, 18 La. Ann. 619; Allen 1 Macq. H. L. Cas. 112; Great
V. Montgomery R. R. Co., 11 Ala. Northern Ry. Co. v. Kennedy, 4
437; Srnall v. Herkimer Mfg. Co., 2 Exch. 417; Succession of Thomson,
N. Y. 330. 46 La. Ann. 1074; 15 So. 379; Car-
Cf. Ladies Dress Ass'n v. Pvl- son v. Arctic Mining Co., 5 Mich.
brook (1900), 2 Q. B. 376; Mandd 288; Merrimac Mining Co. v. Bag-
V. Swan Land Co., 154 111. 177; 40 ley, 14 Mich. 501.
N. E. 462; 45 Am. St. Rep. 124; 27 ' Inglis v. Great Northern Ry. Co.,
L. R. A. 313; Instone v. Frankfort 1 Macq. H. L. Cas. 112, 116.
Bridge Co., 2 Bibb (Ky.) 576, 580- * Carson v. Arctic Mining Co.,
581; 5 Am. Dec. 638. See also 5 Mich. 288, 295 (holding that in a
Mills V. Stewart, 41 N. Y. 384, hold- case of sale the delinquent remains
ing that a statutory liability di- liable).
Tectly to creditors is destroyed by a ° As to right to defend against
forfeiture, as if the defendant had this liability on the ground of fraud,
never owned shares in the company, see supra, § 205.
667
§ 829 FORFEITURE OF SHARES [ChaP. XIV
claims against shareholders as such or as "contributories" in
winding-up proceedings.' So, too, the hability which persists
after a forfeiture is not affected by the company's acceptance of a
material amendment to its charter or act of incorporation.^ Of
course, the mere fact that the company has taken some steps
looking towards forfeiture but has not yet performed all the
statutory requirements of a complete forfeiture will not release
, the shareholder from liability.^ A former holder of the forfeited
shares who had transferred them prior to the forfeiture remains
subject to any statutory liability attaching to past members,* and
a fortiori the person who held the shares at the time of the for-
feiture is similarly liable.^ The same principles should be applied
where the delinquent is a transferee of the shares and where he
is an original subscriber.^
§ 829. Sale or Reissue of Forfeited Shares. — The forfeited
shares may be sold by the company for less than their par
value without violating any statute prohibiting the issue of
shares at a discount.' Where the shares are reissued and a
certificate issued which states the amount which has been paid on
the shares and that the remainder owing thereon ha^ been called
in but not paid, a further provision in the certificate that the
shares shall be held discharged from all calls due prior to its date
will not be construed to make the shares paid-up shares, but will
merely prevent the vendee from being held in default for non-
payment of the previous calls and therefore liable for interest
thereon, leaving the company at liberty to make a new call for
the amount still owing on the shares and to compel the vendee to
pay the same.' Moreover, under regulations which provide that
the former owner of forfeited shares shall pay all calls that were
due at the time of forfeiture, the reissue of forfeited shares with
' Ladies Dress Ass'n v. PuLbrook 827; Morrison v. Trustees, etc. Corp.,.
(1900), 2 Q. B. 376. 79 L. T. 605.
2 Mitchell V. Rome B. B. Co., 17 But see Randt Gold Mining Co.
Ga. 574. V. New Balkis Eerstdling, 85 L. T.
s Edinburgh, etc. By. Co. v. Heb- 780; (1903), 1 K. B. 461, affirmed,
blewhUe, 6 M. &. W. 707. (1904) A. C. 165.
* Bridgers and NeiU's Case, 4 * New Balkis Eerstdling v. Randt
Ch. 266. Gold Mining Co. (1904), A. C. 165
' Creyke's Case, 5 Ch. 63. (headnote inadequate).
" Merrimac Mining Co. v. Bagley, Cf . Moore v. Wheal Byjerkerno'
14 Mich. 501. Tin Mining Co. 17 Vict. L. R. 680.
Bamwdl's Case, 50 L. J. Ch.
668
§ 808-§ 831] CONSEQUENCES § 831
a proviso that the new holder shall be subject to no liability
thereon nevertheless leaves the amount of the previous calls due
and payable "in respect of" the shares, so that»the new holder is
debarred from voting by a regulation that " no member shall be
entitled to vote . . . whilst any sum shall be due and payable to
the company in respect of any of the shares of such member. " '
Conversely, any sum which the former owner of forfeited shares
is required to pay, after the forfeiture, under the company's
regulations, is deemed to be payable in respect of the shares and
therefore goes in reduction of the liability of the person to whom
the shares are reissued.^ Sometimes a sale of forfeited shares is
made compulsory.' A statutory provision for a sale of paid-up
shares in the event of non-payment of certain assessments does
not necessarily mean that the shares shall be forfeited or deprive
the former owner of the proceeds of sale.*
§ 830. Cancellation of Forfeiture. — Inasmuch as forfeited
shares may be reissued, it is competent to the company with
the consent of the former holder to cancel the forfeiture : * such
cancellation amounts merely to a reissue of the shares of the
former owner. But after the company has gone into liquidation,
the forfeiture cannot be cancelled even with the consent of
both the liquidator and the shareholder." Moreover, a power
vested in the company to cancel a forfeiture without the consent
of the former shareholder, who in consequence of a completed
forfeiture has ceased to be a member of the company, would be
so very extraordinary that it cannot be reserved to the company
without the clearest language. For example, a provision in a
company's regulations that the directors may "annul" a forfeit-
ure upon such conditions as they see fit will not authorize them
to cancel a completed forfeiture without the consent of the former
holder of the shares.'
§ 831. EfEect of Forfeiture on Agent's Right to Commissions for
procuring Subscriptions. — Where an agent procures subscrip-
tions to the company's shares under a contract by which he is to
be paid a commission as the subscriptions are paid in, the effect
• Randt Oold Mining Co. v. Bank of Ambia, 86 Fed. 863; 30
Wainwright (1901), 1 Ch. 184. C. C. A. 443.
= Randt Gold Mining Co. (1904), « Cf. supra, § 818.
2 Ch. 468. ' Dawes" Case, 6 Eq. 232.
' See supra, § 815. ' Larkwrnihy's Case (1903), 1
* Chicago Tide, etc. Co. v. State Ch. 711.
669
§ 831 FOKFEITUEE OF SHAKES [ChAP. XIV
of a forfeiture of the shares for non-payment is to prevent the
subscription from being paid and therefore to prevent the agent's
right to commissions from accruing.' The court in the case
last cited suggested, however, that the agent might have some
remedy to compel the company either to sell the forfeited shares
(in which case it seems to have been thought that the agent would
be entitled to a commission on the amount realized) or to remit
the forfeiture and sue for the amount due on the subscription.*
' Maryland Agricultural CoUege ' Maryland Agricultural College
V. Baltimore, etc. B. B. Co., 43 Md. v. Baltimore, etc. B. B. Co., 43 Md.
434. 434, 439.
670
CHAPTER XV
TRANSFER AND TRANSMISSION OF SHARES
Section
Transferability of shares 832
Definition of complete transfer of shares — transfer of legal title . 833
Transfer of possession as a step, in the transfer of title to shares 834
Transfer as distinguished from transmission — from sales 835
Partial transfers of shares .... . . 836
Of the doctrine that neither shares nor share-certificates are
negotiable . 837-844
What is negotiability 837-842
Two elements of negotiability 837
(1) Negotiability as an exception to the rule that legal title
to choses in action is not transferable — rights of
bona ^de endorsee for value 838
Shares have this element of negotiability with its
consequences 839
(2) Negotiability as an exception to the rule that a seller
of personal property can pass no better legal title
than he himself has — rights of purchaser from a
thief 840
Shares do not have this element of negotiability .... 841
Share-certificates do not, and cannot by endorsement
in blank be made to have this element of negoti-
ability 842
Shares not within the rule that transferee of negotiable instru-
ment as security for antecedent debt deemed holder for
value 843
Shares so far negotiable as to be exempt from doctrine of lis
pendens . . 844
Shares not subject to doctrine of Dearie v. Hall 845
Mode of effecting a transfer of shares 846-880
Nature of subject — comparison with conveyancing ... . 846
Transfer by formal deed of assignment 847
Transfer by writing not under seal 848-851
In general 848
Disadvantages of separating the written transfer from the
share-certificate 849
American practice of endorsing transfer on share-certificate . 850
Same principles applicable whether transfer separate from
certificate or endorsed thereon 851
Transfer by mere delivery of certificate — "share warrants" . . 852
Transfer on the company's books — registration of transfers 853-866
Transfer by mere entry in the company's books 853
Entry of transfer on books ineffective imless made by au-
thority of former owner 854
671
TRANSFER AND TRANSMISSION [ChAP. XV
Mode of eSecting a transfer of shares (continued) Section
Necessity for completing written transfer by entry or regis-
tration in the company's books 853-863
In general 855
Function of the company's register of shareholders in
determining persons who are to be officially, rec-
ognized as shareholders 856
Registered shareholders as holders of legal title . . 857
Doctrine that transfer not complete until registered 858
Answer to argument that registration not necessary
unless affirmatively required by statute or by-
law 859
Whether delivery of certificate endorsed with transfer
passes legal title 860
Passing of legal title without registration where failure
to regbter is due to company's fault . . . . 861
Registration not necessary in order to pass equitable
title 862
Whether registration necessary where transferee bears
same name as transferor . . . . 863
What is the proper book for registration of transfers . . 864
What entry amounts to registration of a transfer . . '. 865
Power of attorney to effect registration of transfer on be-
half of transferor 866
Issue of shares-certificate to transferee or surrender of transferor's
certificate not necessary in order to pass complete title . 867
Implied transfers . 868
"Certification" of transfers 869
American receipts corresponding to English certifications . . 870
Similar receipts issued under reorganization schemes . . . 871
Acceptance of transfer by transferee 872-879
Transfer complete without acceptance 872
Effect of renunciation of shares by transferee 873
How acceptance of transfer may be proved 874
Inconvenience of trusting to parol proof of acceptance 875
Regulations requiring transfer to be executed by transferee
as well as transferor 876
Infancy or other disability of transferee 877
Corporations as transferees 878
Fictitious transferee .... 879
Incapacity of transferor . . 880
Application of general principled as to completeness of transfers to
certain special cases .... 881-889
Enumeration of five classes of special cases . . . .881
(1) Between cestui qite trust and purchaser from trustee . . . 882
Where the company is cestui que trust or has some eqxiity
against the transferor 883
(2) Between donor and donee . . 884
(3) Between successive transferees from the same transferor . . 885
(4) Between transferee and creditors of transferor .... 886-888
Rights of attaching creditors 886
Rights of trustee in bankruptcy 887
Transfers in fraud of creditors 888
672
§ 832-§ 1011] SYNOPSIS
Application of- general principles, etc. {continued) Section
(5) Transfers which have passed from hand to hand — trans-
fers in blank 889
Estoppel 890-923
Classification of cases of estoppel ... 890
Estoppel of owner of shares to deny title of person claiming
under a void transfer 891-907
General principles which apply without reference to the
cause of the invalidity of the transfer . . ." . 891
Estoppel precluded by negligence of transferee . . . 892
Transfers in blank 893-903
Statement of problem 893
English doctrine . . . 894
Criticism of English doctrine 895
American doctrine . . . . 896
No estoppel when share-certificate retained by trans-
feror . 897
No estoppel unless transfer is regular on its face . . 898
Alteration of transfer after blank is filled up . . 899
Transfer in blank by executors . . . 900
Transfer in blank by guardians . . .901
Theft of certificate endorsed with transfer in blank 902-903
Theft from transferor before delivery to transferee 902
Theft from transferee or subsequent holder . . 903
Forged transfers .... 904-906
In general . 904
Negligence of person whose name is forged 906
Adoption of forged signature by transferor 906
Altered transfers 907
Estoppel of company to deny title of person claiming under a
void transfer .... . . . . 908-923
Existence of estoppel independent of cause of invalidity of
transfer ... 908
Estoppel by issue of share-certificate 909-921
In general 909
Whether certificate estops company from asserting that
the holder has lost his title, by transfer or other-
wise, after issue of certificate 910
Certificate issued to fictitious person 911
In whose favor estoppel will be raisefl .... 912-916
Only in favor of transferee who relied, and acted
reasonably in relying, on the certificate . . 912
Mere volunteers .... . . . 913
Estoppel in favor of the person to whom the cer-
tificate was issued 914-921
When such estoppel will not be raised . 914
When it will be raised 915
Whether person to whom certificate is issued
acts reasonably in relying thereon . 916
Requisites of certificate in order to raise an estoppel 9 1 7-92 1
Certificate must be issued by authority of com-
pany . 917
Certificate issued for unlawful purpose 918
VOL. I. — 43 673
TRANSFER AND TRANSMISSION [ChA.P. XV
Estoppel (continued) Section
Certificate issued to one of the oflBcers who sign it
on behalf of the company .... 919
Certificates surrendered to company and reissued
without its authority . . 920
Informal certificates . . 921
Estoppel otherwise than by issue of share-certificate . 922-923
In general 922
No estoppel by "certification" of transfer . . . 923
Rights and liabiUties upon presentation of transfer for registra-
tion 924-944
LiabiUties of company . . 924—939
Duties and rights of company upon presentation of transfer
for registration 924-930
Duty in general to register any vaUd transfer when
presented . . 924
Right to regulate times at which transfers may be reg-
istered .... . . . 925
Right to refuse to register transfers after insolvency
of company 926
Right to delay for consideration of vaUdity of transfer 927
Right to demand evidence of validity — production of
transferor's certificate, etc. . . . 928
Where transferor is trustee or other fiduciary 929
Right to demand evidence of acceptance by transferee 930
To whom transfer should be presented for registration . 931
Remedies against company for wrongfully refusing to reg-
ister transfer 932-934
Remedies of transferor . 932
Remedies of person selling shares under a power 933
Remedies of transferee ... .... 934
Liability of company for registering invalid transfer 935-939
Company in dilemma when disputed transfer presented
for registration — interpleader . 935
Right of owner of shares to enjoin registration of invalid
transfer or to compel company to cancel same if
registered . 936
Liability of company to owner in damages for register-
ing invalid transfer ... 937
Liabihty of company for failing to require surrender of
transferor's certificate 938
Estoppel of owner to proceed against company for reg-
istering invaUd transfer . . . 939
Liability of claimant under invalid transfer which is wrongfully
registered . 940-941
Liability to true owner of the shares . 940
Liabihty to the company 941
LiabiUty of person who presents invalid transfer for registration 942
Liability of transferor in and about registration of transfer . . 943
Liability of transfer agent or clerk 944
By-laws and express regulations respecting transfers .... 945-962
Validity of by-laws relating to transfers 945
Regulations as to form or manner of transfer 946-948
674
§ 832-§ 1011] SYNOPSIS
By-laws and express regulations respecting transfers {continued) Section
Mandatory regulations 946
Directory regulations 947
Regulation that shares shall be transferable only on the com-
pany's books 948
Waiver by company of regulations intended for its benefit . 949-950
In general ... 949
Waiver of restrictions on shareholder's right of alienation . 950
Regulations authorizing company to reject transfers deemed in-
imical to its interests 951-952
Whether by-laws prescribing such regulations are valid . 951
Operation and effect of such regulations where valid . . 952
Regulations authorizing directors to prescribe form of transfer . 953
Regulations authorizing directors to decline to register transfer
by shareholder who is indebted to the corporation . . 954
Liens on shares for debts of holders to the company . . 955-961
When lien exists 955
Nature and effect of lien in general 956
Waiver of lien 957
Loss of lien otherwise than by waiver 958
What is subject to the lien 959
What debts are covered by the lien 960
Enforcement of lien 961
Regulations giving company a right of pre-emption .... 962
Rescission of transfer of shares for fraud of transferor 963
Contracts for sale or transfer of shares 964-975
In general 964
Whether contract is several on the part of vendors 965
Whether non-disclosure of contract for sale of shares is a fraud
upon other persons interested in the company . ... 966
Description of the shares to be transferred 967
Statute of Frauds . . 968
Sales on the stock exchange — usages of brokers 969
When purchase money is payable 970
Burden of procuring registration of transfer on transferee . . 971
Obligation of purchaser to indemnify vendor against liability as
shareholder 972
Implied warranties by vendor . 973
Purchase on margin 974
Specific performance of contracts for sale or transfer of shares . 975
Transmission of shares 976-984
Death of shareholder 976-981
In general — rights and liabilities of executor or adminis-
trator before entry of decedent's death in the com-
pany's register — mutual rights of specific and residu-
ary legatees . . . 976
Registration of executor or administrator as shareholder . 977
Rights and liabilities of executor or administrator after reg-
istration as shareholder . 978
Devolution of title from executor to legatee 979
Requisites of formal transfer by executors 980
Sales of shares by executors 981
Marriage of female shareholder 982
675
■§ 832 TRANSFER AND TRANSMISSION [ChAP. XV
Transmission of shares (continued) Section
Bankruptcy of shareholder 983
Transmission or devolution under special statute 984
Trusts of shares and equitable interests in shares 985-994
Relevancy of subject — scope of treatment 985
Theory of a trust applied to shares ... . 986
Tendency of American courts to depart from this principle . . 987
The principle emphasized in England — Companies Act, 1862,
§ 30 . ... . . 988
Obligation of company to protect cestui que trust of shares . . 989
What amounts to notice of existence and terms of trust . . 990
Liability of trustee's bond .... 991
Change of trustees 992
Assignments of equitable interests in shares 993-994
In general . . . 993
Assignments by shareholders who have assented to voting-
trusts, reorganization schemes, etc 994
Pledges and mortgages or hypothecation of shares .... 995-1005
Confusion in the law of mortgages in general . . . 995
Difficulty in applying general principles of law to mortgages and
pledges of shares — distinction between "pledge" and
""mortgage " of shares . . 996
Classification of charges or Uens upon shares 997
(1) Mere agreement that shares shall be held as collateral
security ... 998
(2) Similar agreement coupled with delivery of share-certificate,
without transfer or endorsement to creditor . . 999
(3) Delivery of share-certificate coupled with transfer or endorse--
ment in blank ... . 1000-1002
Rights of creditor with respect to third persons 1000
Rights of creditor and debtor inter sese 1001
Redelivery of certificate to debtor . 1002
(4) Transfer to creditor on the company's books coupled with
a qualification that the shares are held as collateral
security merely 1003
(5) Transfer on the company's books absolute in form . . . 1004
Parol evidence of terms of agreement between debtor and
creditor 1005
Co-ownership of shares 1006-1008
Rights and liabilities of co-owners 1006
Transfer to tenants in common, whether company compellable
to register . . 1007
Joint ownership not evidence of trusteeship 1008
Executory limitations of shEires . . . . . . .1009-1011
In general — duty of company to protect remaindermen . . . 1009
Liability for calls as between tenant for life and remainderman 1010
Mutual rights of tenant for life and remainderman with respect
to dividends, bonuses, etc 1011
§ 832. Transferability of Shares. — Shares in incorporated
companies are, at common law as well as under modern incor-
poration acts, freely transferable, notwithstanding the fact that
676
§ 832-§ 1011] TRANSFERS OF LEGAL TITLE § 833
they are choses in action, and therefore belong to a class of prop-
erty which was generally inalienable at common law. In other
words, shares of capital stock constitute an exception to the
rule that choses in action are not transferable at common law.
A statute authorizing corporations to "render the interest of the
stockholders transferable" will not be construed to abrogate
this common-law rule so as to make the stock non-transferable
unless the company adopts an' enabling regulation.'
The right of transfer is absolute and unfettered (provided any
reasonable formalities required by the company be observed)
except in so far as it may be cut down or qualified by statute or
by the company's internal regulations. In England, the validity
of regulations, or articles of association, restricting the share-
holder's otherwise unfettered right of transfer has been ex-,
pressly adjudged in spite of objections founded upon the rule
against perpetuities and upon the principle of pubUc policy
which invalidates restrictions on alienation and agreements in
restraint of trade and commerce.^ In many of the United
States, on the other hand, by-laws restricting the freedom of
alienation, as distinguished from by-laws which merely regu-
late, in a reasonable way, the mode of alienation, are deemed
contrary to public policy, and are held void.' In those states,
therefore, no restrictions upon the right of alienating shares of
capital stock which transcend the limits of reasonable regula-
tion are valid unless affirmatively authorized by some statute.
§ 833. Definition of Complete Transfer of Shaxea — Transfer of
Legal Title. — A completed transfer of a share invests the trans-
feree with all the rights and obligations incident to ownership
previously enjoyed and borne by the transferor. The transfer
is complete when, and not before, the transferee attains the
status of shareholder not merely with respect to the transferor
but also with respect to the corporation. The legal title to the
shares may then be said to pass.* The most instructive analogy
' Miller v. Farmers' Milling, etc. 346; Fisher v. Essex Bank, 5 Gray
Co. (Nebr.), 110 N. W. 995. (Mass.) 373, 378, where Shaw, C. J.,
' Borland's Trustee v. Sted Bros, said, "When a transfer is rightfully
& Co. (1901), 1 Ch. 279. made and completed, it vests a
Accord: Attorney-General v. Jame- right in the transferee, not merely
son (1904), 2 Jr. 644. to act in the place of the vendor and
' Supra, § 706 et seq. in his name, but substitutes him, in
* Nanney v. Morgan, 37 Ch. D. all respects, as the legal and only
677
§ 834 TRANSFER AND TRANSMISSION [ChAP. XV
is furnished by the case of an assignment of a term for years in
real estate. The legal title to the term passes when the assignee
not merely acquires the rights and undergoes the liabilities of
a tenant as between himself and the assignor but actually as-
sumes the relation of tenant with respect to the lessor, all legal
formalities — the execution and acknowledgment of a deed, re-
cording, attornment, and the like — having been complied with.
The corporation with respect to. an assignment of shares occu-
pies a position analogous to that of a lessor with respect to an
assignment of the term.
§ 834. Transfer of Possession as Step in Transfer of Title
to Shares. — Transfer of possession plays an important part in
the transfer of title to personal property in general. Shares,
being choses in action and therefore intangible property, cannot
be said, if the proprieties of language be observed, to be capable
of possession. For some purposes, however, connected with
our present subject, shares may be possessed constructively or
in law. For instance, an hypothecation of shares by a transfer
endorsed upon the share-certificate has often been said by
American judges to clothe the creditor with possession of the
shares within the meaning of the law of pledges. So, where a
married woman is the owner of shares, an exercise of ownership
by the husband by executing a transfer thereof will be deemed
a reduction to possession suiBcient to vest the husband at com-
mon law with the absolute title, although the shares are never
registered in his name on the company's books.'
§ 835. Transfer as distinguished from Transmission — From
Sales. — Transfers should be distinguished from transmission
of shares. Transfer implies a voluntary passing of title from the
holder of the shares transferred, to Md. 155 (city stock not reduced to
the same extent to which they were possession by husband by receiving
before held by the vendor. The dividends and demanding that the
title/therefore, by which such inter- stock be registered in his name,which
est is held, is strictly a legal title." demand the city refused to comply
' Johnson v. Hume, 138 Ala. 564 ; with unless the husband would
36 So. 421. attend at the registration office in
But see Slaymaker v. Bank of person) ; Arnold v. Buggies, 1 R. I.
Gettysburg, 10 Pa. St. 373. 165 (where the court in holding that
Cf. Burr v. Sherwood, 3 Bradf. shares had not been reduced to
(N. Y.) 85, 89 (receipt of dividends possession by the husband em-
by the husband "only reduced the phasized the fact that they had not
dividends into possession and not been transferred to his name),
the stock"); Brown v. Bokee, 53
678
§ 832-§ 1011] PARTIAL TRANSFERS § 836
transferor to the transferee. Transmission, on the other hand,
is properly applied to a devolution of title by operation of law —
for example, by death, marriage, or bankruptcy.' A transfer
must not be confused with a' sale. Thus, an assignment of
shares to the assignor's sister in consideration of a nominal sum
and of love and affection, although not a sale, is a transfer as
distinguished from a transmission of the shares.^ So, an assign-
ment to the equitable owner from a bare trustee, in whose
name the shares have been put for convenience, is not a sale, ^
but it clearly is a transfer.
§ 836. Partial Transfers of Shares. — As already stated, a
complete and perfect transfer involves an assignment of all the
transferor's rights of ownership. There may, of course, be par-
tial transfers conveying some only of those rights ; ^ but such
partial transfers can operate only in equity, and do not amount
to a conveyance of the legal title to the shares. For example,
the right to dividends is one of the most important rights inci-
dent to the ownership of shares, lyet an assignment by a share-
holder of his right to receive dividends would not amount to a
transfer of the legal title to the shares, and would at most con-
stitute the assignor a trustee for the assignee.^ The same thing
is true, speaking generally, of each of the other rights which are
incident to ownership of shares of stock, such, for example, as
the right to vote. A transfer of the share — that is, a transfer
of the legal title to the share — takes place, as stated above,
when all the rights and liabilities of a shareholder are shifted
upon the transferee and when he is substituted as a shareholder
in the place of the transferor in the eyes of all the world, and
particularly in the eyes of the corporation.
' Barton v. London, etc. By. Co., Div. 575; 69 N. Y. Supp. 142;
24 Q. B. D. 77, 88; Bentham Mills State ex rel. Tozer v. Probate Court
Co., 11 Ch. D. 900. (Minn.), 113 N. W. 888. As to execu-
' Copdand v. North Eastern Ry. tory limitations of shares, see infra,
Co., 6 E. & B. 277. § 1009-§ 1011.
' Victor G. Bloede Co. v. Bloede, 84 ' Cf. Re Brandreth, 58 N. Y. App.
Md. 129; 34Atl. 1127; 57 Am. St. Div. 575; 69 N. Y. Supp. 142.
Kep. 373; 33 L. R. A. 107. Mortimer v. Potter, 213 111. 178; 72
* Re Brandreth, 58 N. Y. App. N. E. 817.
679
§ 837 TRANSFER AND TRANSMISSION [ChAP. XV
§ 837-§ 845. OF THE DOCTRINE THAT NEITHER SHARES NOR
SHARE-CERTIFICATES ARE NEGOTIABLE.
§ 837- § 842. What Negotiability is.
§ 837. The two Elements of Negotiability. — The books often
state that although shares are transferable, yet neither the shares
themselves nor the certificates which represent them are negotia-
ble.' Such statements are likely to prove misleading unless the
nature of negotiability be first clearly apprehended. Negotia^
bility is an attribute of certain choses in action and consists of
two parts or elements — first, an exception to the rule that choses
in action are non-assignable, and, second, an exception to the
rule that a transferor of personal property can pass to an assignee
no greater legal title than he himself possesses. The former
element or feature of negotiability is common to all negotiable
instruments, while the latter is confined to instruments which
either by their original tenor or by endorsement in blank are
payable to bearer.
§ 838. Negotiability as an Exception to the Rule that Legal
Title to Choses in Action is not transferable — Rights of Bona Fide
Endorsee for Value. — The fact that a bona fide endorsee for
value takes commercial paper free of any equitable defences in
favor of prior parties can readily be demonstrated to be due to
the first element of negotiability — that is, to be a mere corol-
lary of the proposition that negotiable choses in action differ ,
from other choses in action in being, like tangible property,
freely transferable. The holder of legal title to an ordinary
chattel, or other tangible property, subject to some trust or
equity in favor of a third person can transfer the legal title dis-
charged from the trust or equity by a sale to a bona fide purchaser
for value. The reason that the same rule does not apply to the
full extent to the owner of a non-negotiable chose in action is
that, choses in action being non-assignable at common law, an
attempted assignment does not confer legal title on the assignee
but operates only as an irrevocable power of attorney to collect
' Weaver v. Barden, 49 N. Y. 286 ; Am. Coal Co., 86 Iowa 436; 53 N. W.
Hammondv. Hastings, 13'iV.S.iOl, 291; 17 L. R. A. 657.
404-405; 10 Sup. a. 727; Clark v.
680
§ 832-§ 1011] NON-NEGOTIABILITY § 840
any moneys payable in respect thereof, and necessarily there-
fore clothes the assignee or attorney with no greater rights against
the debtor or obligor than the assignor or principal possessed,
so that the assignee takes subject to all equities of the debtor
or obligor, whether he had notice of them or not. As a transfer
or endorsement of a negotiable chose in action does not operate
as a power of attorney but as a transfer of legal title, an en-
dorsee for value takes discharged from all equitable defences
of prior parties of which he had no notice. This rule is,
therefore, a mere consequence of the fact that negotiable choses
in action are exempt from the common-law rule that choses in
action are not assignable, and merely places negotiable choses
in action on the same footing as tangible property.
§ 839. Shares have this Element of NegotiabUiiy with its
Consequences. — Inasmuch as this important feature of negotia-
bility is a mere consequence of the fact that negotiable choses
in action are not assignable, it follows that the same consequences
should attach to shares in incorporated companies, which are
also exempt from the common-law rule of non-assignability.
Such is, indeed, the law. For although shares of capital stock
are not negotiable, yet being freely assignable they resemble in
this respect negotiable choses in action and tangible property
rather than other non-negotiable choses in action. In other
words, a completed transfer of shares is a transfer of legal title,
and as such, when made to a purchaser for value, cuts off all
equitable rights in third persons ' or in the company itself ^ of
which the transferee had no notice.'
§ 840. Negotiability as an Exception to the Rule that a Seller of
personal Property can pass no better legal Title than he himself has
— Rights of Purchaser from a Thief. — The second and more
peculiar element of negotiability consists in an exception to the
rule that a possessor of personal property can pass to an assignee
no better or greater title — that is, legal title — than he himself
has. The only other exception, at common law, to this rule was
in the case of a sale in market overt. The exception which we
' Weaver v. Borden, 49 N. Y. 286 weight of American authority, a
(semble); N. Y., etc.^ B. R. Co. v. 6orao /ide purchaser of shares acquires
Schuyler, 34 N. Y. 30, 78-81. See no right to maintain a shareholder's
infra, § 882. bill on account of transactions in
^ See infra, § 883. which his assignor participated or
' Note, however, that by the acquiesced. See infra, § 1169.
681
§ 841 TRANSFER AND TRANSMISSION [ChAP. XV
are now considering, namely, the exception in the case of nego-
tiable choses in action, appUes only to instruments which are
payable to bearer either by their original tenor or by virtue of
an endorsement in blank. The possessor of a negotiable chose
in action payable to order, unless he be the payee — that is to
say, unless he be the holder of the legal title — can pass no
greater title than he has. But in the case of bearer paper, the
rule is different. If the instrument is stolen, the thief of course
has no title either at law or in equity; but, nevertheless, he
can pass an unimpeachable title to a bona ftde purchaser.
§ 841. Shares do not have this Element of Negotiability. —
Now, neither shares of stock nor share-certificates have this
element of negotiability.^ The shares themselves, being in-
tangible, are not capable of manual possession or delivery, and
cannot be stolen. An unauthorized entry of a transfer in the
company's books may be deemed analogous to theft of tangible
property; but it is well settled that such an entry passes no
title and does not affect the rights of the true owner,^ except that
he may, if he so elect, treat the transaction as a conversion
of the shares.' In other words, a thief of shares — if a person
who wrongfully procures himself to be registered as the owner
of shares which belong to some one else may be so denominated
— obtains no title and can pass none even to a bona fide pur-
chaser. Under some circumstances the principle of estoppel
may seem to bring about exceptions to this rule, which, how-
ever, are only apparent.
§ 842. Share-Certificates do not, and cannot by Endorsement
in Blank be made to have this Element of Negotiability. — Share-
certificates, likewise, are not payable to bearer, and cannot be
made so payable by any endorsement thereon by the holder.*
Consequently, where share-certificates are stolen, the thief can
pass no title even to a bona fide purchaser,^ unless indeed the
circumstances are such that the true owner is estopped from
1 Weaver v. Borden, 49 N. Y. 286. 7 Am. St. Rep. 73; 2 L. R. A. 836;
^ See infra, § 936. Sherwood v. Meadow Volley Mining
' Infra, § 937, § 940. Co., 50 Cal. 412; Barstow v. Savage
* Colonial Bank v. Cady, 15 A. C. Min. Co., 64 Cal* 388; 1 Pac. 349;
267 (headnote inadequate). See 49 Am. Rep. 705 (overruling Winter
infra, § 852. v. Belmont Mfg. Co., 53 Cal. 428).
' East Birmingham Land Co. v. See infra, § 889.
Dennis, 85 Ala. 565; 5 So. 317;
682
§ 832-§ 1011] NON-NEGOTIABILITY § 843
setting up his title against the purchaser.' It has been held
that any custom of stock brokers to treat share-certificates as ne-
gotiable instruments is unreasonable and void.^ The true owner
may require a bona fide purchaser of stolen share-certificates
to return them, or if registered as shareholder to retransfer the
shares; and the fact that a bank from whose custody the cer-
tificates were abstracted may be paying the expenses of the
litigation does not affect the true owner's right to recover the
shares.^ Any transferee of a stolen share-certificate is liable
for a conversion of the shares, however innocently he may have
acted; and the same is true of a broker through whose hands
the certificate passes.^ On the other hand, the presumption is
that the possessor of a share-certificate endorsed in blank is
legally entitled thereto; and he will not be required to prove
his title affirmatively by showing that the certificate was duly
dehvered by the endorser and that it came to his hands by a
regular series of assignments without any break in the chain
by theft or otherwise.^ Share-certificates not being negotiable,
no dealing with the certificates can pass any greater rights to the
shares than if the certificates, regarded as mere pieces of paper,
— tangible personal property, — were the shares themselves.
§ 843. Shares not within Rule that Transferee of Negotiable
Instrument as Security for antecedent Debt deemed Holder for Value.
— An incident, or test, of negotiability in many jurisdictions is
that although, in the case of property in general, one who takes
the same as security for an antecedent debt is not deemed a
purchaser for value, yet the rule is otherwise in the case of nego-
tiable securities. Shares or share-certificates are not negotiable
within the meaning of this rule ; and hence a person who accepts
share-certificates as security for a pre-existing debt is not deemed
a holder for value."
» See § 902, § 903. « Holbrookv.New Jersey Zinc Co.,
' East Birmingham Land Co. v. 57 N. Y. 616, 623-624; Cojfey v.
Dennis, 85 Ala. 565; 5 So. 317; Coif^y, 179 lU. 283; 53 N. E. 590.
7 Am. St. Rep. 73 ; 2 L. R. A. 836. Cf. Plankinton v. HUdebrand, 89
» O'Herron v. Gray, 168 Mass. Wise. 209; 61 N. W. 839.
573; 47 N. E. 429; 60 Am. St. Rep. » National, etc. Trust Co. v. Gray,
411; 40 L. R. A. 498. 12 D. C. App. Cas. 276. Cf. Kister-
* Berdch v. Marye, 9 Nevada book's Appeal, 127 Pa. St. 601; 18
312; Simmy. WUson, 90 Cal. 126; Atl. 381; 14 Am. St. Rep. 868;
27Pac.33; 25Am. St. Rep. 110; 13 Gurley v. Reed, 190 Mass. 509, 512;
L. R. A. 605. 77 N. E. 642; and infra, § 913.
683
§ 844 TEANSFEK AND TRANSMISSION [ChAP. XV
§ 844. Shares so far Negotiable as to be Exempt from Doctrine
of Lis Pendens. — There is much doubt whether the doctrine
of constructive notice by lis pendens applies to personal chattels
or articles of commerce, and no doubt at all that it does not
apply to negotiable paper. It does not apply to shares in the
capital of incorporated companies.'
§ 845. Shares not within Doctrine of Dearie v. Hall. — Nego-
tiable instruments are not subject to the doctrine laid down in
the leading case of Dearie v. Hall,^ that of two adverse claim-
ants to a chose in action other than the original creditor or
obligee he who first gives notice of his claim to the debtor or
obligor will prevail. This doctrine as applied to non-negotiable
choses in action is accepted in England and in some of the United
States; but there is much doubt whether it applies to transfers
of legal title to shares in incorporated companies. The whole
doctrine rests, perhaps, upon no very satisfactory ground; and
even if it is to be accepted at all it should not be extended to
choses in action of such a very peculiar kind as shares.^ Indeed,
the doctrine is purely an equitable one, whereas transfers of
shares are transfers at law as well as in equity.
§ 846-§ 880. MODE OF EFFECTING A TRANSFER OF
SHARES.
§ 846. Nature of Subject — Comparison with Conveyancing. —
That branch of the law which treats of the methods by which
the transfer of shares is effected is a topic which might appro-
priately be called corporate conveyancing. Just as the science
of conveyancing treats of the manner in which a transfer of title
^ Holbrookv. New Jersey Zinc Co., (headnote inadequate); Houser v.
57 N. Y. 616; Davis v. Miller Signal Richardson, 90 Mo. App. 134.
Co., 105 111. App. 657; American Note, however, that transfers of
Press Ass'n v. Brantingham, 75 N. Y. equitable interests in shares naay be
App. Div. 435; 78 N. Y. Supp. 305. subject to the rule in Dearie v. Hall,
But see Dana v. Brown, 1 J. J. so that the transferee who first
Marsh. (Ky.), 304, 306. notifies the trustee of his claim may
' Dearie v. Hall, 3 Russ. 1. have prior right. Cf. Hov^er v.
' Cf. PitoJ V. /o/wison, 33 La. Ann. Richardson, 90 Mo. App. 134; Holt
1286; Continental Nat. Bank v. v. Deiueii, 4 Hare 446 (a case relating
Eliot Nat. Bank, 7 Fed. 369, 375-376 to an interest in British consols or
(headnote inadequate); Cornick v. government stock). See also infra,
Richards, 3 Lea (Tenn.) 1, 16-22 § 993.
684
§ 832-§ 1011] TRANSFERS NOT UNDER SEAL § 848
to real estate is effected, so the subject which we are now con-
sidering relates to the modes by which a transfer of title to shares
is accomphshed.
§ 847. Transfer by formal Deed of Assignment. — In Eng-
land, the instrument of transfer is often if not usually a formal
deed of assignment. This deed is a formal instrument, entirely
separate from the share-certificate. When the deed of transfer
is presented to the company for registration on its books, the
transferor's certificate is regularly and usually surrendered to
the company ; but the deed is not endorsed upon the certificate
or physically connected with it. Such a deed of transfer is sub-
ject to all the technical rules of the common law applicable to
other deeds. For instance, authority to fill up a material blank
left in the instrument when sealed and delivered can only be
conferred by a power of attorney under seal ; '■ and consequently
a deed of transfer containing a material blank — for example,
a blank for the name of the transferee — cannot pass legal title
to the shares.^ Some diversity of opinion has existed among
English judges whether the transfer could be validated by
estoppel in favor of a bptia fide purchaser to whom the trans-
feree after filling up the blanks may have sold the shares.' Of
course, if the deed is redelivered by the transferor after the
blanks have been filled up, then upon familiar principles the
instrument is valid.*
§ 848-§ 851. Transfer by Writing not under Seal.
§ 848. In general. — These technical rules of law respecting
deeds of transfer seriously interfere with the free alienation of
shares which is so important in modern commercial or financial
' Hibblewhite v. McMorine, 6 "Wend. (N. Y.) 348, 364-366; 34
M. &. W. 200. Am. Dec. 317.
' Powell V. London & Provincial ' See Ex parteSwan,7C.B.,N.a.,
Bank (1893), 2 Ch. 555; Colonial 400; Swan v. North British Austra-
Bank v. Whinney, 11 A. C. 426; lasian Co., 7 H. &. N. 603 (affirmed
Sodke Generale de Paris v. Walker, on other grounds, 2 H. &. C. 175);
11 A. C. 20; Hibblewhite v. Mc- Tayler v. Great Indian Peninsida
Marine, 6 M. &. W. 200; Swan v. Ry. Co., 4 De G. & J. 559.
North British Australasian Co., 2 Cf. Bridgeport Bank v. New Yorlc,
H. & C. 175. etc. B. k. Co., 30 Conn. 231.
But see Bridgeport Bank v. New * Cf. Societe Generale de Paris v.
York, etc. R. R. Co., 30 Conn. 231; Walker, 11 A. C. 20.
Commercial Bank v. Kortright, 22
685
§ 849 TRANSFER AND TRANSMISSION [ChAP. XV
transactions, and particularly with the convenient practice of
executing transfers with a blank for the name of the transferee.
The English as well as the American courts have therefore for-
tunately held that whilst, particularly in the early days of modern
incorporated joint-stock companies, a deed of transfer was re-
garded as the normal method of alienation, yet a transfer by
simple instrument in writing not under seal is quite effective,'
unless the company's regulations require a deed,^ even though
the practice in the company has been to insist upon a
deed.' The rigid common-law rules as to deeds are thus
escaped.
§ 849. Disadvantages of separating the written Transfer from
the Share-Certificate. — Whilst this modern English method of
transferring shares by a writing under the hand but not under
the seal of the transferor is much more flexible than the older
method of transfer by deed, yet, inasmuch as the transfer is
upon a separate sheet of paper from the share-certificate, there
is always danger of inconvenience in case the two instruments
come into different hands. The possibilities of fraud are thus
increased; and the English books contain a nuinber of cases
dealing with the relative rights of a transferee claiming under
such a transfer and a person who without knowledge of the
former's rights has got possession of the share-certificate — for
example, as collateral security for a loan. Moreover, there is
always the possibility that the shares may be misdescribed in
the transfer, either accidentally or by fraudulent design; and
in such cases hardship to innocent persons is not unlikely to
result. These drawbacks seem to be inseparable from the
English custom of having the transfer upon a separate piece
of paper from the share-certificate, whether the transfer be
under seal or not.
§ 850. American Practice of endorsing Transfer on Share-Cer-
tificate. — In America, all the disadvantages referred to in the
last paragraph have been obviated by the simple expedient of
endorsing the transfer upon the back of the share-certificate,
' Ex parte Sargent, 17 Eq. 273 ; man v. Henderson, 1 Teirn. Ch. App.
Atkinson v. Atkinson, 8 Allen (Mass.) 749.
15. Cf. Fox V. Martin, 64 L. J. Ch. " See infra, § 946.
473; Ortegosa v. Brown, 38 L. T. 145. ' Ex parte Sargent, 17 Eq. 273.
As to an oral transfer, see Love-
§ 832-§ 1011] BY ENDORSEMENT OF CERTIFICATE § 851
which usually bears a printed form of transfer to be filled out
and signed by the transferor. The endorsed transfer is rarely
under seal, and therefore all technicalities of the common law
respecting specialties are avoided. Moreover, as the transfer
usually covers the shares which are represented by the certifi-
cate, and no others, there is no possibility of trouble arising
from a misdescription of the shares intended to be transferred,
either by misstating their number or the name of the company.
Finally, the transfer being inseparable from the certificate, no
question can come up as to the conflicting rights of the holder
of the certificate and the holder of the transfer. This last ad-
vantage of the American system was mentioned and recognized
by Lord Watson in the House of Lords ; ^ but nevertheless the
American method does not seem to have been adopted by any
English companies.
§ 851. Same Principles applicable whether Transfer separate
from Share-Certificate or endorsed thereon. — Transfers of shares
are governed by the same principles whether, as in England,
they are separate and distinct from the share-certificate or
whether, as usually in the United States, they are endorsed
upon it.^ Indeed, a transfer of shares in an English company
endorsed upon the certificate would be quite as valid as if it were
written upon a separate paper; and, conversely, in America, a
transfer disconnected from the certificate has the same effect
as if endorsed upon it.' The American practice is one of con-
venience merely. The American system tends, however, to
emphasize more than the English system the importance of the
share-certificate, and naturally produces the impression among
' Colonial Bank v. Cody, 15 A. C. ' Smith v. Savin, 141 N. Y. 315;
267, 275. Said the learned lord: 36N. E. 338; DeCaumontv. Bogert,
"The system thus adopted"— 36 Hun (N. Y.) 382; Mahaney v.
that is, the ordinary American sys- Walsh, 16 N. Y. App. Div. 601 ; 44
tem of transfers endorsed upon the N. Y. Supp. 969; Lipscomb v.
share-certificates — "has the merit Condon, 56 W. Va. 416; 49 S. B.
of inseparably connecting the certifi- 392; 107 Am. St. Rep. 938; 67
cate with the transfer, and so pre- L. R. A. 670 (where no certificate
venting the dishonest creation of a had been issued); Richardson v.
legal right by transfer to one person, Longmont Supply Ditch Co., 19 Colo,
and a competing equitable right App. 483 ; 76 Pac. 546.
by deposit of the certificate with But see Tajft v. Presidio, etc.
another." R. R. Co., 84 Cal. 131; 24 Pac. 436;
' See Colonial Bank v. Cody, 15 11 L. R. A. 125; 18 Am. St. Rep. 166.
A. C. 267 (headnote inadequate).
687
f 852 TRANSFER AND TRANSMISSION [ChAP. XV
business men that the certificate actually is the shares instead
of being merely convenient evidence of ownership of shares.
§ 852. Transfer by mere Delivery of Certificate — " Share
Warrants." — Apart from express statutory authority, a corpor-
ation has no power to create shares which shall be transferable
merely by delivery — in other words, to issue certificates certi-
fying the bearer to be the holder of the shares represented
thereby.' To do so is impliedly prohibited by statutory provi-
sions requiring the company to keep a register of shareholders
— a provision which could not be complied with if shares were
made transferable by mere delivery of the certificate. To be
sure, in America, after a certificate is endorsed in blank, it
passes from hand to hand much in the same way as commer-
cial paper payable to bearer ; but whilst in this way as between
successive holders of the certificate, title to the shares passes
by mere delivery, yet the legal title — the only title which the
company is bound to recognize — remains in the registered
holder. It is this legal title — the title as against the company —
which cannot be made transferable by mere delivery of the cer-
tificates.^ Moreover, as stated above, transfer of a certificate
even when endorsed in blank passes no greater title to the shares
than if the paper on which the certificate is printed, regarded
as a mere chattel, were the shares themselves which are repre-
sented thereby; and consequently a bona fide purchaser of the
endorsed certificate from a thief does not acquire a better title
than the thief, as he would do if the certificates were negotiable
by delivery.
' Reuss V. Bos, L. R. 5 H. L. 176, be made to the effect that share-
191-192, 200; McEwen v. London certificates should be transferable to
Wharves Co., 6 Ch. 655. bearer; and that the bearer should be
^ "Except under the provisions entitled to be registered; but that the
of the Companies Act, 1867, which persons on the register should alone
authorize the issue of share war- be members of the company. Such
rants to bearer in the case of shares certificates or the share warrants
or stock fully paid-up, shares trans- above referred to might then be-
ferable to bearer can hardly exist; come negotiable by usage." 1 Lind-
for they are not consistent with ley on Companies, 6th ed., 656-657.
the statutory enactments relating Cf. Rumball v. Metropolitan Bank,
to registers. But regulations might 2 Q. B. D. 194, and infra, § 860.
688
§ 832-§ 1011] ON THE company's books § 853
In England, however, the Companies Act of 1867 expressly
empowers companies limited by shares organized under the
Companies Acts to issue, for fully paid shares, certificates —
called share warrants — stating that the bearer of the warrant
is entitled to the share or shares therein specified.' Similar pro-
visions are found in some other British statutes. By virtue of
these enactments, companies may make their shares trans-
ferable by mere delivery of the certificate from hand to hand,
just as bonds or debentures payable to bearer are transferred,
without the necessity of registration. Such certificates or share
warrants are negotiable in the fullest sense of the word, and if
lost or stolen, a bona fide purchaser from the thief gets a good
title.^ In view of the popularity in the United States of securi-
ties such as corporation bonds, which are transferable by de-
livery, and ownership of which cannot easily be traced by tax
collectors or other inquisitive persons, one might not be sur-
prised if some state legislatures should authorize the issue of
securities like these English share warrants; but no such law
is known to be on the statute books of any state at the present
time.
§ 853-§ 866. TRANSFER on the company's books —
REGISTRATION OF TRANSFER.
§ 853. Transfer by mere Entry on the Company's Books. —
In view of the principles which are stated below as to the func-
tion in corporate conveyancing of the company's share register,
the simplest method of effecting a transfer of shares might be
thought to be by a mere entry in the books of the company
without the execution of any previous transfer. There is no
reason to doubt that such an entry, made by the authority of
the transferor, although without any writing signed by him or
by any one as his agent, would constitute a valid transfer.'
'30 & 31 Vict., c. 131, § 27 Oriental Mills, 17 R. I. 551 ; 23 Atl.
et seq. 795; White v. Salisbury, 33 Mo. 150.
' Webb, Hale '& Co. v. Alexandria See infra, § 868, as to implied trans-
Water Co., 93 L. T. 339, disposing of fers, and infra, § 970.
doubt expressed in Simmons v. Cf. First Nat. Bank v. Gifford, 47
London Joint Stock Bank (1891), Iowa 575; Haynss v. Brown (Okl.),
1 Ch. 270, 296. 89 Pac. 1124 (where a statute pro-
' See American Nat. Bank v. viding that shares should be trans-
VOL. I. — 44 689
§ 854 TRANSFER AND TRANSMISSION [ChAP. XV
Even if, as in some of the American States, a contract for the
sale of shares be deemed to be within the Statute of Frauds, yet
an actual transfer on the books of the company even without
any writing signed by the transferor would be effective; the
Statute of Frauds applies only to contracts for sale of personal
property and not to transfers ' completed by delivery, for which
an entry in the company's books is in the case of shares of capital
stock the only possible substitute or equivalent.
However, a transfer by a mere entry in the books, though
legally possible, is inconvenient and consequently rare in prac-
tice. In the first place, the very important fact of the trans-
feror's assent to the transfer is left to be proved by parol, so
that if at any time the transferor or his representative should
deny that the entry. in the books was authorized by him, the
company, in order to exculpate itself, would be subject to the
burden of establishing such authority by parol proof, ^ which in
convincing form might not be readily forthcoming. Secondly,
unless the transferor surrendered his share-certificate, he would
still retain the indicia of title so that, as will presently be more
fully explained, the company might incur serious liability to
persons who might deal with him on the faith of the certificate.*
A transfer by mere entry in the company's books is therefore
rarely resorted to.
§ 854. Entry of Transfer on Books ineffective unless made
by Authority of former Owner. — Of course, a transfer on the
company's books is void, at law and in equity, unless the entry
upon the books is made in pursuance of authority from the
transferor. A transfer, though registered with all possible
formalities, is ineffective unless made by the authority of the
supposed transferor.* If for any reason the entry is made with-
f arable on delivery of certificate and Div. 205; 70 N. Y. Supp. 546
registration on the company's books (holding a gift of shares effectuated
was thought to render invalid a by mere entry in the company's
transfer on the books without de- books to be incomplete),
livery of the certificate) ; First Nat. '■ Cf. French v. White (Vt.), 62
Bank v. StriUing, 16 Okl. 41; 86 Atl. 35 (where statute requiring
Pac. 512. See also Newell v. Willis- a transfer to be by "assigrmient"
ton, 138 Mass. 240, 243 (where it was held to necessitate a written
was said obiter that registration transfer),
would not be effective unless there ' See infra, § 936, § 937.
is a prior complete transfer); Rich- ' See infra, § 910.
ardson v. Emmett, 61 N. Y. App. ' France v. Clark, 26 Ch. D. 257.
690
?' 832-§ 1011] NKCESSITY FOR REGISTRATION § 856
out his authority — for example, if the transferor's signature
to the transfer is a forgery — the registration confers no title
whatsoever upon the transferee.' This doubtless is all that is
meant by the dictum of a learned judge that registration of the
name of a transferee is effective only in the cass of a prior valid
transfer.^ Moreover, registration of a transfer cannot confer
title unless the transferor had the title to convey.^ The transferee
in any of these cases may, however, have valuable rights by
estoppel.^
§ 855- § 863." Necessity for completing written Transfer hy
Entry or Registration on the Company's Books.
§ 855. In general. — The formal instrument of transfer of
shares, whether it be under seal or not, and whether it be sepa-
rate from the certificate or endorsed thereon, should as a prac-
tical matter always be followed by entry of the transfer in the
company's books. It is submitted that such an entry or regis-
tration of the transfer is required by law. The consideration
of this question involves a brief digression into the law respect-
ing the nature and function, in general, of the company's share
register or stock book.
§ 856. Function of Company's Register of Shareholders in de-
termining the Persons who are to be officially recognized as Share-
holders. — Often, either by statute or under by-laws, the shares
are expressly made transferable only upon the books of the com-
pany. Even where no such express declaration exists, some
statutory provision, either express or imphed, requiring the
company to keep a share register or stock book, is usually to
be found ; and wherever a register of shareholders is to be kept,
its very object and purpose is to enable the company to know
who are its members and to act accordingly. Hence, the cor-
poration should always be protected in treating the registered
shareholder as the legal owner, either by paying him dividends,*
Cf. May V. Genesee County Savings 263. Cf. Newell v. Williston, 138
Bank, 120 Mich. 330; 79 N. W. 630. Mass. 240, 243.
» See infra, § 904, as to forged = France v. Clark, 26 Ch. D. 257.
transfers, and § 880, as to transfers * See infra, § 890-§ 923.
by persons under disability. " See infra, § 1369.
' France v. Clark, 26 Ch. D. 257, As to dividends in Uquidation,
691
§ 857 TRANSFER AND TRANSMISSION [ChAP. XV
receiving his vote at a general meeting,' or otherwise.^ More-
over, the registered holder of shares is usually the person who
is subject to the Uabilities of a shareholder in respect thereof.^
§ 857. Registered Shareholders as Holders of Legal Title. —
Indeed, the generalization may be deduced that the person who
is registered as the owner of shares is to be deemed the holder
of the legal title : the company's books as a rule determine the
legal title to its shares. To this principle there is one important
exception, namely, cases in which the registry is erroneous
owing to the company's own fault * — ■ for example, where the
company wrongfully neglects to register a transfer which is duly
presented for registration.^ Of course, a shareholder whose
name is stricken from the books, whether by accident or design,
without his authority, does not lose his shares, and, conversely,
a person whose name is inserted on the register without his con-
sent does not become liable as a shareholder.' But in all ordi-
nary cases ownership of shares does not amount to complete
legal ownership unless the owner's name be entered on the com-
pany's books. Persons other than the registered holder can in
general have no greater rights than those of cestuis que trust or
equitable, as distinguished from legal, owners.
§ 858. Doctrine that Transfer not complete until registered. —
No transfer, therefore, can well be deemed fully and in all re-
spects consummated until the transferee's name is entered as
a shareholder in the company's books in the room of the trans-
feror.' A fortiori, a transfer is incomplete until entered on the
company's books, where a statute provides that shares shall be
transferable only on the books of the corporation in such manner
see Bath Savings Institution v. Saga- ^ See infra, § 861.
dahoc, 89 Me. 500; 36 Atl. 996. » Wdch v. GUlden, 82 Pao. 248;
' See infra, § 1220. 147 Cal. 571.
' Cf. Pray v. Todd, 71 N. Y. App. ' McMurrich v. Bond Head Har-
Div. 391; 75 N. Y. Supp. 947; Hoi- hour Co., 9 Up: Can. Q. B. 333.
lister V. De Forest Wireless Tel. Co., But see Sayles v. Bates, 15 R. I.
47 N. Y. Misc. 674 (headnote inade- 342, 346; 5 Atl. 497; Dain Mfg.
quate); 94 N. Y. Supp. 504 (corpor- Co. v. Trumbull Seed Co., 95 Mo.
ation not bound to allow unregis- App. 144; 68 S. W. 951; Crawford
tered transferee of shares to inspect v. Provincial Ins. Co., 8 Up. Can.
its books). C. P. 263 (where the court refused
But see Sylvania, etc. Co. v. Hoge a mandamus to compel registration
(Ga.), 59 S. E. 806. of a transfer, on the ground that
' See supra, § 764. registration was unnecessary).
* See infra, § 1221.
692
S 832-§ 1011] NECESSITY FOR REGISTRATION § 860
as the by-laws may prescribe but where no by-laws are adopted
on the subject.' A provision in the share-certificate requiring
transfers to be registered would seem to have the same effect
as a duly adopted by-law.^ Some statutes go so far as to enact
that no transfer which is not promptly registered on the com-
pany's books shall be valid "for any purpose" except to render
the transferee liable for the company's debts.'
§. 859. Answer to Argument that Registration not necessary
unless aflSrmatively required by Statute or By-law. — To be sure,
the position is taken by some authorities that, at common law
and apart from any by-laws or regulations on the subject, the
formality of registration on the company's books should not be
required in the case of a transfer of shares any more than in the
case of a transfer of other personal property ; but this reasoning
overlooks the fact that shares belong to a class of property,
namely, choses in action, which is not assignable at common
law. Hence, there is, on principle, nothing to prevent a court
from taking the position that the same policy which justifies
in the case of shares an exception to the rule of the non-assigna-
bility of choses in action also requires that a transfer of this
exceptional class of property should not be deemed complete
at law until entered on the company's books. That position
is strongly reinforced by considerations of practical conven-
ience. At any rate, some notice of the transfer should be brought
home to the company before the novation, or substitution of
the transferee in place of the transferor, is fully and legally
consummated.
§ 860. Whether Delivery of Certificate endorsed with Transfer
passes Legal Title. — Many American authorities declare that,
even where by statute or by-law shares are transferable only
upon the company's books, nevertheless the delivery of the
share-certificate endorsed in the ordinary way will pass legal
title as between the parties.* It has remained for a member
' Plumb V. Bank of Enterprise, ' Williams v. Mechanics' Bank, 5
48 Kans. 484; 29 Pac. 699. Blatchf. 59.
But see Allen v. Stewart, 7 Del. ^ Pueblo Sav. Bank v. Richardson
Ch. 287, 297; 44 Atl. 786. (Colo.), 89 Pac. 799.
As to failure to adopt by-laws on '' Carroll v. Midlanphy Savings
the subject of transfers, see further Bank, 8 Mo. App. 249; Joslyn v.
American Nat. Bank v. Oriental St. Paul Distilling Co. , 4^4 Minn. 183 ;
Mais, 17 R. I. 551; 23 Atl. 795. 46 N. W. 337 (semble); Leitch v.
693
§ 860 TRANSFER AND TRANSMISSION [ChAP. XV
of the House of Lords in a case relating to a transfer of Ameri-
can railway shares to explain what is really meant by such a
statement and to point out that in the bald form above given it
is inaccurate and capable of misconstruction. "Delivery,"
said Lord Watson, referring to a delivery of the certificate
coupled with an endorsed transfer in blank, "does not invest
him" — i.e., the transferee — "with the ownership of the
shares in the sense that no further act is required to perfect his
right. Notwithstanding his having parted with the certificate
and transfer, the original transferor, who is entered as owner
in the certificate and register, continues to be the only share-
holder recognized by the company as entitled to vote and draw
dividends in respect of the shares, until the transferee or holder
for the time being obtains registration in his own name. It
would, therefore, be more accurate to say that such delivery passes,
not the property of the shares, but a title, legal and equitable, which
will enable the holder to vest himself with the shares without risk
of his right being defeated by any other person deriving title from
the registered owner." ' In order that delivery of the certificate
coupled with the endorsed transfer should have this effect, the
delivery must have been with intent to pass title, unless the
registered owner is estopped from denying such intent, a matter
which will be considered below. Some American authorities
state that delivery of the certificate with the endorsed transfer
confers only an equitable right; ^ but whilst such delivery may
Wdls, 48 N. Y. 585; McNeil v. certificate and never registered
Tenth Nat. Bank, 46 N. Y. 325, might maintain trover against the
331; 7 Am. Rep. 341; Commercial transferor for executing a second
Bank v. Kortright, 22 Wend. (N. Y.) transfer to somebody else).
348; 34 Am. Dec. 317; Parker v. ' Colonial Bank v. Cady, 15 A. C.
Bethel Hotel Co., 96 Tenn. 252; 34 267, 277-278.
S. W. 209; 31 L. R. A. 706; Hub- ^ Fisher v. Essex Bank, 5 Gray
hard v. Bank of U. S., 12 Fed. (Mass.) 373; Bercich v. Marye, 9
Cas. 777; Cherry v. Frost, 7 Lea Nevada 312, 316; lAppitt y. Ameri-
(Tenn.) 1. can Wood Paper Co., 15 R. I. 141;
Cf. Johnston v. Laflin, 103 U. S. 23 Atl. Ill; 2 Am. St. Rep. 886;
800; Bank of Commerce v. Bank of Noble v. Turner, 69 Md. 519; 16
Newport, 63 Fed. 898; 11 C. C. A. Atl. 124; Baltimore Retort, etc. Co.
484; Butter v. Montgomery Grain v. Mali, 65 Md. 93; 3 Atl. 286; 57
Co., 85 Mo. App. 50; Mahaney v. Am. St. Rep. 304; Bank of CoTra-
Walsh, 16 N. Y. App. Div. 601; 44 merce's Appeal, 73 Pa. St. 59; Tali-
N. Y. Supp. 969 (holding that a aferro v. First Nat. Bank, 71 Md.
transferee claiming under a written 200, 214.
transfer not endorsed on the share-
694
§ 832-§ 1011] NECESSITY FOR REGISTRATION § 861
convey only equitable title to the shares, it does confer some
legal as well as equitable rights. The passage quoted from
Lord Watson's judgment in Colonial Bank v. Cody is believed
to be a sound and accurate statement of the law. The conflict
between the various authorities upon this point is largely a
dispute about words.'
The delivery of a certificate with a mere parol or oral transfer
will have the same effect as if the transfer were on the certificate
in the usual way,^ except where by statute- or the company's
regulations transfers are required to be in writing or where the
case is within the Statute of Frauds.
§ 861. Passing of Legal Title without Registration where
Failure to register is due to Company's Fault. — Whilst registra-
tion of a valid transfer invests the transferee with the legal
title, and whilst registration is in general indispensable in order
to clothe the transferee with complete legal title, yet if a failure
to register is due to the fault of the company, the transferee's
rights and liabilities will be the same as if his name had been
duly entered on the register. In other words, the legal title
to shares passes as soon as an absolute right to immediate
registration accrues and is wrongfully disregarded by the
company.^
' "Such a title is sometimes Berne, 95 N. Y. 637; McLean v.
called an equitable title with an ir- Medicine Co., 96 Mich. 479; 56
revocable power to acquire the legal N. W. 68; Chemiccd Nat. Bank v.
title, and sometimes a legal title as Colwell, 132 N. Y. 250; 30 N. E.
between the parties; but this is a 644 (where the company kept no
question of the proper use of words." books) ; Blooming Grove Cotton OU
Fitchburg Savings Bank v. Torrey, Co. v. First Nat. Bank, 56 S. W. Rep.
134 Mass. 239, 242. 552 (Tex. Civ. App.); Hunt v.
' Commonwealth v. Compton, 137 Seeger, 98 N. W. 91; 91 Minn.
Pa. St. 138; 20 Atl. 417; Walsh v. 264; Earle v. Carson, 188 U. S. 42;
Sexton, 55 Baih. 251. See also infra, 23 Sup. Ct. 254; Earle v. Coyle,
§ 884. 97 Fed. 410; 38 C. C. A. 226; EquitOr-
But see Matthews v. Hoagland, hie Securities Co. v. Johnson (Cal.),
48 N. J. Eq. 455; 21 Atl. 1054. 85 Pac. 840 (headnote inade-
' Nanney v. Morgan, 37 Ch. D. quate); Hayes v. Shoemaker, 39
346, 354 (semble) ; Mowe v. North Fed. 319.
Western Bank (1891), 2 Ch. 599; , But see Perkins v. Lyons, 111
Sargent v. Franklin Ins. Co., 8 Pick. Iowa 192; 82 N. W. 486; Pray v.
(Mass.) 90; 19 Am. Dec. 306; Todd, 71 N. Y. App. Div. 391; 75
Chouteau Spring Co. v. Harris, 20 N. Y. Supp. 947; Man v. Boykin
Mo. 382; Real Estate Trust Co. v. (S. Car.), 60 S. E. 17 (holding that
Bird, 90 Md. 229; 44 Atl. 1048; transferor remains subject to lia-
Rohinson v. National Bank of New bilities of a shareholder although
695
§ 861 TRANSFER AND TRANSMISSION [ChAP. XV
Where the transferee is also an officer of the company, de-
livery of the transfer to him as transferee and not as an officer
of the corporation is not equivalent to requesting or demanding
registration of the transfer by the company ; ' but the fact that
the transferor is a director and charged with the duty of seeing
that the books are properly kept does not prevent him from
being discharged from all liability if the transfer is presented to
the proper officer who states that nothing further need be done
in order to consummate the transfer.^ Of course, a transferee
does not, within the meaning of this rule, have a right to imme-
diate registration unless the transferor had a good title and duly
authorized registration of the transfer,' — in other words, unless
the circumstances are such that an actual registration of the
transfer would, according to the principles stated in the fore-
going paragraphs, pass the legal title. And where the directors
have a discretion to reject a transfer, a present absolute right
to registration, sufficient to clothe the transferee with legal title,
cannot be deemed to arise until the directors have considered
and actually approved the transfer.' In any case, a corpora-
tion is not bound to register a transfer until the transferor's
share-certificate is surrendered or tendered ; * and therefore
until such surrender or tender, a present absolute right to regis-
failure to register is due to com- equivalent to registration); Stewart
pany's own fault). v. Walla WaRa, etc. Pvb. Co., 1
■ Cf. Brown v. Adams, 5 Biss. 181 Wash. St. 521; 20 Pac. 605.
(where the court seems not to have ' Richmond v. Irons, 121 U. S.
had in mind the rule of law stated 27, 56-59; 7 Sup. Ct. 788.
in the text); I sham v. Buckingham, Cf. Earle v. Coyle, 97 Fed. 410;
49 N. Y. 216; Plymouth Bank v. 38 C. C. A. 226; Hamilton v. Grant,
Bank of Norfolk, 10 Pick. (Mass.) 30 Can. Sup. Ct. 566 (where the
454; Ireland v. Hart (1902), 1 Ch. transferor was relieved from lia-
522 ; Smith v. Bank of Nova Scotia, bility although the transfer had
8 Can. Sup. Ct. 558 (where in an never been registered, on the ground
action for calls a plea on equitable that the transferee had acted as an
grounds that defendant had trans- officer, the transferred shares being
ferred his shares by a transfer which necessary to qualify him), affirming
the company had improperly re- 33 Nova Scotia 77.
fused tp register was held good). ^ Bracken v. Nicol (Ky.), 99
As to waiver of the requirement S. W. 920.
of registration by recognizing a ' Fox v. Martin, 64 L. J. Ch. 473.
transferee as shareholder, see Upton * Moore v. North Western Bank
v. Bwnham, 3 Biss. 431 (an action (1891), 2 Ch. 599.
for calls); Cutting v. Damerel, 88 Cf. Roots v. Williamson, 38 Ch.
N. y. 410; Laing v. Burley, 101 111. D. 485.
591 (issue of certificate to transferee ° See infra, § 928.
696
§ 832-§ 1011] NECESSITY FOR REGISTRATION § 862
tration does not accrue ' nor does the legal title pa-ss, unless
indeed the certificate is satisfactorily proved to have been de-
stroyed, and a sufficient bond of indemnity offered. More-
over, a corporation is not bound to register a transfer as soon
as it is presented but may wait a reasonable time to examine
into its genuineness and validity ; ^ and until the lapse of such
reasonable time the company is not in default and the legal title
cannot be deemed to have passed. As the company has a right
to close its books for a reasonable time before a shareholders'
meeting,' the company is not in default for refusing to.register
a transfer which is presented while the books are so closed.* If
by the company's regulations a fee be required for registration
of a transfer, the company is not in default in failing to register
a transfer unless the fee be paid or tendered.^ So, if the com-
pany is forbidden by the revenue laws from registering an un-
stamped transfer, the company is not in default unless a transfer
presented for registration be duly stamped.'
§ 862. Registration not necessary in order to pass Equitable
Title. — Registration is, of course, not necessary in order to
give the transferee an equitable title. This is true even when
a statute declares that no transfer shall be effectual, or that no
transfer shall be effectual except as against the transferor or his
administrators, unless registered on the company's books ; '
and hence such a statute will not avail a subsequent trans-
feree or lienor with actual notice of the prior unrecorded
transfer.'
' Socike Generale de Paris v. Scherck v. Montgomery, 33 So. 507;
Walker, 11 A. C. 20. 81 Miss. 426.
" Societe Oenerale de Paris v. Of. Pueblo Sav. Bank v. Richard-
Walker, 11 -A. C. 20, 41. See infra, son (Colo.), 89 N. W. 799 (where a
§ 927. statute provided that no transfer
' Infra, § 925. should be valid "for any purpose"
* Cook V. Carpenter (Pa.), 61 Atl. except to render the transferee liable
804; 212 Pa. 177. as shareholder unless registered
^ Giesen v. London, etc. Mge. Co., within sixty days).
102 Fed. 584 (headnote inadequate) ; ' Hotchkiss v. Union Nat. Bank,
42 C. C. A. 515. 68 Fed. 76; 15 C. C. A. 264; Prince
" Giesen v. London, etc. Mge. Co., Investment Co. v. St. Paul, etc. Land
102 Fed. 584 (headnote inadequate); Co., 68 Minn. 121; 70 N. W. 1079.
42 C. C. A. 515. Cf. Home Stock Ins. Co. v. Sher-
' Black V. Zacharie, 3 How. 483 ; wood, 72 Mo. 461 (headnote mis-
Kellog v. StockweU, 75 111. 68; John,- leading).
son V. UnderhUl, 52 N. Y. 203 ; But see First Nat. Bank v. Hast-
Shdlington v. Howard, S3 N. Y. 371; ings, 7 Colo. App. 129; 42 Pac. 691.
697
§ 863 TRANSFER AND TRANSMISSION [ChAP. XV
§ 863. Whether Registration necessary where Transferee bears
same Name as Transferor. — Where a transfer is made to a per-
son of the same name as the transferor, although convenience
certainly dictates that some note of the transfer should be made
on the company's books, it seems that no entry on the register
is necessary in order to vest the legal title in the transferee. Thus
where shares standing in the name of a married woman passed
on her death to the surviving husband by whom they were given
to his second wife who bore precisely the same name as the
former wife, it was held that, the company having notice of all
the above-mentioned facts, the title of the second wife was com-
plete without any entry on the books and without surrendering
or changing the certificate issued to the first wife.'
§ 864. What is the proper Book for Registration of Transfers. —
In view of the importance of registration of transfers in the
company's books, it is pertinent to inquire, first, what book or
books should be deemed for these purposes the company's regis-
tration book, and secondly, what entries therein will be deemed
sufficient. As to the first of these questions, it may be said that
a very informal or irregular book will accomplish the purpose
if no other book is kept.^ Thus, the book containing the stubs
of share-certificates may be a sufiicient share register.^ "The
account in a stock ledger, showing the names of the stock-
holders, the number and amount of the shares belonging to each,
and the sources of their title, whether by original subscription
and payment or by derivation from others, is quite suitable, and
fully meets the requirements of the law."- * On the other hand,
' ColUm V. Williams, 65 111. App. R. I. 551; 23 Atl. 795; Fisher v.
466. Jones, 82 Ala. 117; 3 So. 13; U. S.
' Stewartv.WaUaWalla,etc. Pub. Cast Iron Pipe, etc. Co. (N. J.), 65
Co., 1 Wash. St. 521 (headnote in- Atl. 849 (where the cancelled cer-
adequate) ; 20 Pac. 605. tificates were pasted in) ; Perkins v.
As to the case where the com- Lyons, 111 Iowa 192; 82 N. W.
pany keeps several share registers, 486.
or stock books, not altogether har- But see Newell v. WUliston, 138
monious, see Noyes Bros., 136 Fed. Mass. 240; Tourtdot v. Stoleben, 101
977, 980 (headnote inadequate). Fed. 362. Cf. supra, § 172, and
' Plumb v. Bank of Enterprise, infra, § 1129, § 1220.
48 Kans. 484; 29 Pac. 699; Ameri^ 'National Bank v. Watsontown
can Nat. Bank v. Oriental Mills, 17 Bank, 105 U. S. 217, 222.
698
§ 832- § 1011] WHAT AMOUNTS TO REGISTRATION
865
when once a particular book has been adopted either formally
or in practice as the company's registration book, no entry in
any other book will be deemed a registration of the transfer un-
less it be intended that the latter book shall supersede the former.'
Thus, where a note of a transfer is made in a small book kept
at the secretary's office with an intention of entering it later in
the large stock book kept at another place, it was held that the
transfer could not be deemed to have been registered.^
§ 865. What Entry amounts to Registration of a Transfer. — -
As to what entries in a share register will be deemed a sufficient
registration of a transfer, little need be said. Any entry indica-
tive of an intention on the part of the company to recognize the
transferee as shareholder in the room of the transferor with re-
spect to certain shares will suffice.' The entry of the transferee
as holder of shares bearing the same numbers as those which
are still allowed to stand in the name of the transferor has been
' Cf. Pinkerton v. Manchester,
etc. R. R. Co., 42 N. H. 424, 449
(where an entry in the books of a
transfer agent in a foreign state was
held insufficient on the ground that
the law required the record of the
transfer to be made on the books at
the company's home office).
As to entries made in books in a
foreign state, see also Perkins v.
Lyons, 111 Iowa 192; 82 N. W.
486.
2 Harpold v. Stobart, 46 Oh. St.
397; 21 N. E. 637; 15 Am. St. Rep.
€18. The court said: "While it is
not necessary that a book of any
special kind be adopted for" that pur-
pose, yet when one is selected and
used, that becomes the stock book,
and transfers, to be valid, must be
made upon that. The object to be
accomplished by the keeping of such
a book requires reasonable cer-
tainty as to its identity."
' See National Bank v. Watson-
town Bank, 105 U. S. 217, 322-223
(headnote inadequate) ; Bank of
Commerce v. Bank of Newport, 63
Fed. 898, 901-902 (headnote mis-
leading); 11 C. C. A. 484; Cham-
bersburg Ins. Co. v. Smith, 11 Pa.
St. 120; Plumb v. Bank of Enter-
prise, 48 Kans. 484 (memorandum
on stubs of certificates sufficient);
Upton V. Burnham, 3 Biss. 431
(headnote inadequate); Stewart v.
Walla Walla, etc. Pub. Co., 1 Wash.
St. 521 (headnote inadequate); 20
Pac. 605; Perkins v. Lyons, 111 Iowa
192; 82 N. W. 486 (entry in pencil
on stub of certificate) ; Fisher v.
Jones, 82 Ala. 117, 121-122; 3 So.
13; Moore v. Marshalltovm Opera-
House Co., 81 Iowa 45; 46 N. W.
750.
Cf. Cutting v. Damsel, 88 N. Y.
410; Northrop v. Curtis, 5 Conn.
246; Rankin v. Fidelity Trust Co.,
189 U. S. 242, 251-252; 23 Sup. Ct.
553.
But see Marlborough Mfg. Co. v.
Smith, 2 Conn. 579; Northrop v.
Newtown, etc. Turnpike Co., 3 Conn.
644, 551 (where it was said that a
transfer is not registered unless
copied at full length) ; Newell v.
WUliston, 138 Mass. 240.
As to entry of a transfer "sub-
ject to the rights of attaching credit-
ors and others," see State Ins. Co.
V. GenneU, 2 Tenn. Ch. 100, 103.
699
§ 866 TRANSFER AND TRANSMISSION [ChAP. XV
held insufficient.' The notion has been to some extent preva-
lent that a provision making shares transferable only on the books
of the company means that the actual instrument of transfer
must be a writing on the company's books.^ But the true view
is that such a provision merely requires that some note or record
of the transfer be made on the books, and that any written
transfer on the back of the certificate or elsewhere is still the
effective instrument of transfer. Consequently, the entry of a
transfer in the company's books is not the "execution of a
written instrument." ^
§ 866. Power of Attorney to effect Re^stration of Transfer
on behalf of Transferor. — The ordinary American transfer en-
dorsed upon a certificate of stock is usually coupled with a power
of attorney — or, to speak more accurately, comprises a power
of attorney — authorizing any one, the name being usually left
blank in order that the transferee may fill it in at his own con-
venience, to apply for and effect in the transferor's name a
transfer on the company's books. This express power of at-
torney would seem to be surplusage, inasmuch as the execution
of a transfer would doubtless of itself be held to amount to a
grant of implied authority to use the transferor's name in de-
manding registration of the transfer.* Indeed, when once a
formal transfer has been executed, the registration or entry
thereof on the company's books may be accomplished by the
officers of the company without any deputed authority from the
transferor.^ Moreover, where the name of some particular per-
son is inserted in the power of attorney, yet if he be unwilling,
or neglect, to act, the rights of the transferee will not be preju-
diced." The practice of giving these powers of attorney prob-
' Heights of Maribyrnong Estate * Cf. Plymouth Bank v. Bank of
Co., 22 Vict. L. R. 438. Norfolk, 10 Pick. (Mass.) 454, where
' Marlborough Mfg. Co. v. Smith, the transfer was to two persons and
2 Conn. 579 ; Williams v. Mechanics' the power of attorney was to one of
Bank, 5 Blatchf. 69. them only.
Cf. RichmondviUe Mfg. Co. v. ° Green Mount, etc. Co. v. Bulla,
Prall, 9 Conn. 487; Northrop v. 45 Ind. 1.
Curtis, 5 Conn. 246. Compare also But cf. McFall v. Buckeye, etc.
the English practice as to Bank of Ass'n, 122 Cal. 468; 55 Pac. 253; 68
England stock and other "inscribed" Am. St. Rep. 47.
stocks, Shepherd v. Harris (1905), See also Mechanics' Banking
2 Ch. 310, 315-316. Ass'n v. Mariposa Co., 3 Rob. (N.
' Pine V. Western Nat. Bank, 65 Y.) 395.
Pac. 690, 692; 63 Kans. 462. ' Cushman v. Thayer Mfg. Jew-
700
§ 832-§ 1011] ISSUE OF CERTIFICATE § 867
ably originated in the notion, which has been shown above to
be unfounded,' that a transfer on the books means an actual
instrument of transfer in writing on the company's books and
is not satisfied by entering on the books a mere note or record
of a transfer.^
The power of attorney does not have the effect of connecting
the transferor with the person whose name as attorney is sub-
sequently inserted so as to charge him with the latter's knowl-
edge of facts which if communicated to the transferor would
invalidate the transfer.' In one federal case, the court said
that if a failure to enter a transfer on the company's books was
due to the person whose name was inserted in the power of
attorney, he being an officer of the corporation, the default was
attributable to him as agent of the transferor and not as agent
for the company, so that the company could not be deemed re-
sponsible for the failure to register the transfer.^ But such a
doctrine might be very inconvenient and indeed unjust in its
practical operation; and it is submitted that the sound princi-
ple is that the usual "power of attorney" connected with an
American transfer of shares is little if anything more than
matter of form.^
§ 867. Issue of Share-Certificate to Transferee or Surrender of
Transferor's Certificate not necessary to pass 'complete Title. —
Of course the issue of a share-certificate to the transferee is not
necessary in order to effect a passage of the legal title," nor is
it necessary that the transferor's certificate should be surren-
elry Co., 76 N. Y. 365, 371; 32 Am. « Re Bachman, 2 Fed. Cas. 310.
Rep. 315. ' But see Taliaferro v. First Nat.
But cf. Re Bachman, 2 Fed. Cas. Bank, 71 Md. 200; First Nat. Bank
310. V. Taliaferro, 72 Md. 164; German
' Supra, § 865. Sav. Bank v. Renshaw, 78 Md. 475,
' Compare the English practice with which cases compare Kern's
in respect to consols and Bank of Estate, 35 Atl. 231; 176 Pa. St. 373.
England stock and other "in- " Chouteau Spring Co. v. Harris,
scribed" stock. Starkey v. Bank of 20 Mo. 382; National Bank v. Wat-
England (1903), A. C. 114; Shep- sontown Bank, 105 U. S. 217, 222
herd v. Harris (1905), 2 Ch. 310, (headnote inadequate); First Nat.
315-316. Bank v. Gifford, 47 Iowa 575; Ag-
' Johnston v. Laflin, 103 U. S. riadtural Bank v. Wilson, 24 Me.
800. 273.
701
TRANSFER AND TRANSMISSION [ChAP. XV
dered.' The certificate is merely evidential in its legal opera-
tion ; and the title of the transferee, if the transfer be registered,
is quite as complete, both at law and in equity, before it is issued
as afterwards. Even an express provision that shares shall be
transferable only upon surrender of the transferor's certificate
is construed as intended for the company's benefit, so that a
failure to surrender the certificate would be waived by registering
the transfer.^
§ 868. Implied Transfers. — In some cases transfers can be
implied. For instance, a corporation accepts or attempts to
accept a surrender of shares, and subsequently reissues the
shares. Under some circumstances, where the surrender is,
as such, invalid, the transaction may be construed as a transfer
from the original holder to the second allottee so as to release
the former from liability as a shareholder.^ Such a construc-
tion can, however, rarely if ever be adopted where the company
has under its control other unissued shares to which the second
allotment can be referred.*
§ 869. " Certification " of Transfers. — The English system of
separating the transfer from the certificate, operating in con-
junction with the greater length of time that elapses in England
between the presentation of a transfer for registration and the
actual registration and issue of a certificate to the transferee, has
led to what is called "certification" of transfers. That is, when
a transfer and share-certificate are deposited with the company
preliminary to the registration of a transfer, the company issues
a receipt acknowledging, or as it is called, "certifying" that a
share-certificate has been lodged with the company. The in-
' Boatmen's Ins. & Trust Co. v. 41; Wyman v. Bowman, 127 Fed.
Able, 48 Mo. 136; Bank of Kentucky 257, 266-267; 62 C. C. A. 189. See
V. Schuylkill Bank, 1 Pars. Eq. Cas. also supra, § 632.
(Pa.) 180, 247-249; Colton v. Wil- But see Cartwright v. Dickinson,
liam^, 65 111. App. 466. 88 Tenn. 476; 12 S. W. 1030; 17
Cf. supra, §'853, infra, § 882. Am. St. Rep. 910; 7 L. R. A. 706;
' As to the liability of the com- Scott v. Houpt, 83 S. W. 1057; 73
pany to a holder of the certificate Ark. 78 (where a creditor of the
for registering a transfer without re- first allottee endeavored, but with-
quiring a surrender of the certificate, out success, to attach the shares on
see infra, § 910, § 938. the ground that the transfer was not
' Cf. Macdonald Sons & Co. registered as required by statute).
(1894), 1 Ch. 89, 101-102; £a; parte * Wallscourt's Case, 7 Manson
Jones, 27 L. J. Ch. 666; Wells & Co. 235; Ex parte Jones, 27 L. J. Ch.
V. Thompson Mfg. Co., 54 Mo. App. 666.
702
§ 832-§ 1011] CERTIFICATION § 869
strument is a very informal one, consisting usually of some
such words as these, "Certificate for * * * shares has been
lodged at the company's oflBce. Date * ** *^ Secretary." The
corporate seal is not attached. The distinction between such
a certification and the ordinary share-certificate is wide and
fundamental.
As Lord Macnaghten said in a recent case in the House of
Lords, "There is a marked difference between a certificate and
a certification. A certificate is under the seal of the company.
By the Companies Act, 1862, a certificate is made prima facie
evidence of title. If faith were not given to the solemn asser-
tions of a company under its common seal, 'it would,' as Lord
Cairns observed in Burkinshaw v. Nicolls, 'paralyze the whole
of the dealings with shares in public companies.' A certifica-
tion stands on a different footing altogether. Transfers are
never certified under the company's seal. There is no obliga-
tion on a company to certify transfers at all. The certification
is not passed by the directors or brought before the board. A
certification, in fact, is only required for a temporary purpose
to meet the exigencies of business on the Stock Exchange, which
has stated days and fixed periods for the different stages of a
business transaction intended to be carried out under its rules.
In dealings in shares not under the rules of the Stock Exchange,
a certification is really out of place. In such dealings, in the
case of a purchase, the price would only be paid in exchange
for the transfer and share-certificate on the completion of the
transaction, and not before." '
Sometimes, the "certification" of a transfer is done, not by the
company, but by the secretary of the stock exchange. For in-
stance, if the holder of a certificate for one hundred shares sells
fifty, he lodges the certificate with the secretary of the stock ex-
change, who issues to him two papers each certifying that a cer-
tificate representing fifty shares has been lodged. One of these
papers the transferor delivers to the transferee as evidence of
his ownership of the shares. The purchase money is thereupon
paid; and afterwards the share-certificate is surrendered to
the company, the transferee is registered as a shareholder and
receives a certificate for his fifty shares, and another certificate
is issued to the transferor for the fifty shares retained by him.
' George Whitechurch, Ltd. v. Cavanaugh (1902), A. C. 117, 126.
703
§ 870 TRANSFER AND TRANSMISSION [ChAP. XV
§ 870. American Receipts corresponding to English Certifica-
tions.— In America, "certification" of transfers of shares is
by that name unknown. Often, when a certificate and transfer
are presented at the oflBce of an American corporation in order
that the transfer may be registered, the company gives no
receipt or acknowledgment of any kind similar to an English
certificate of transfer. Sometimes a brief, informal acknowl-
edgment of the receipt of the share-certificates is given. Such
receipts are often marked "non-transferable," and even where
they are not, they are not often assigned or dealt in on the stock
exchange as representing the shares. The English decisions
relative to "certification" of transfers would be pertinent au-
thority in respect to the nature and legal effect of such receipts.
§ 871. Similar Receipts issued under Reorganization Schemes.
— Instruments similar in some respects to the English certifica-
tions of transfers are often issued under reorganization or amal-
gamation schemes. Shareholders deposit their shares with the
trust company which is financing the reorganization or con-
solidation, and receive in exchange certificates or scrip. The
law applicable to such scrip certificates is stated in another
place.' Such certificates differ from English certifications in
that they are usually intended to be transferred from hand to
hand as quasi-negotiable instruments.
§ 872-§ 879. Acceptance of Transfer by Transferee.
§ 872. Transfer complete without Acceptance. — Transfers
of shares, like other unilateral conveyances, are, according to
the prevailing doctrines of law, complete upon registration with-
out the necessity of any acceptance on the part of the trans-
feree.^ For instance, the transfer though gratuitous cannot be
revoked by the transferor after registration but before the trans-
feree has knowledge of it and therefore necessarily before he
has accepted it.^ Sometimes the same result is reached by say-
1 Infra, § 994. Cf. supra, § 237. 56 L. R. A. 728 (transferor not re-
' But the company cannot be re- lieved from liability as shareholder
quired to register a transfer unless where transferee has not accepted
the transferee is ready to accept it. shares and transfer not registered).
Infra, § 930. ' Cf. Standing v. Bowring, 31 Ch.
Cf. Vermont, etc. Co. v. Dedez, D. 282 (a case of a gift of consols or
etc. Co., 135 Cal. 579, 588-589; 67 pubUc stocks).
Pac. 1057; 87 Am. St. Rep. 143;
704
§ 832-§ 1011] ACCEPTANCE § 874
ing that acceptance is presumed ^ from the supposedly bene-
ficial character of the conveyance; but this is not the true
ground historically, nor is it logical.
• § 873. Effect of Renunciation of Shares by Transferee. — Ac-
cording to all the authorities, however, if the transferee promptly
repudiates the transfer upon receiving notice thereof, the title
reverts to the transferor although the transfer has been regis-
tered ; ^ and it has been held that if upon such repudiation by
the transferee, his name is stricken from the register, the trans-
feror becomes subject once more to the liabilities of a share-
holder.^ Indeed, it might well be questioned whether prompt
repudiation of the transfer by the transferee would not ipso facto
revest the title in the transferor and make him liable as share-
holder by relation as if no transfer had been executed.
§ 874. How Acceptance of Transfer may be proved. — Ac-
ceptance or disaffirmance by the transferee can often be proved
only by parol. Whilst the burden of disproving acceptance
ordinarily rests upon the party who denies it,^ and therefore
upon a transferee who is seeking to escape from the liabilities
attaching to ownership of shares, yet the burden may be shifted
upon the company or its liquidator or receiver by the trans-
feree's sworn testimony that he knew nothing of the transfer
until immediately before his repudiation thereof.
The acceptance of dividends would ordinarily be conclusive
evidence .of acceptance.^ So, a transferee who retains the trans-
fer in his possession and does not notify the transferor of his re-
' Cf. Burke v. Smith, 16 Wall, cannot be used to validate a transfer
390, 400; South Texas Nat. Bank v. from a director to the principal made
Texas, etc. Lumber Co. (Texas), 70 and registered without the knowl-
S. W. 768; 30 Tex. Civ. App. 412. edge of the attorney and after the
" Ex parte Heritage, 9 Eq. 5; latter had accepted a share-certifi-
Simmons v. HUl, 96 Mo. 679 ; 10 cate from the company itself, which
S. W. 61; 2 L. R. A. 476. had some unallotted shares).
Cf. Mechanics Banking Ass'n v. ^ Ex parte Heritage, 9 Eq. 5.
Mariposa Co., 3 Rob. (N. Y.) 395; ' South Texas Nat. Bank v. Texas,
Welch V. GiUelen, 82 Pac. 248; 147 etc. Lumber Co. (Texas), 70 S. W.
Cal. 571 (transferee who repudiated 768; 30 Tex. Civ. App. 412; Finn
not liable as shareholder); Sigua v. Brown, 142 U. S. 56, 67; 12 Sup.
Iron Co. V. Greene, 104 Fed. 854; Ct. 136. Cf. infra, § 1128.
44 C. C. A. 221 (transferee not liable But see Sigua Iron Co. v. Greene,
as shareholder without acceptance 88 Fed. 207, 213-214.
— headnote misleading) ; Paton's * Ker's Case, 4 A. C. 549.
Case, 5 Ont. L. R. 392 (holding that Cf. Royal Bank of India's Case,
» power of attorney to accept shares 4 Ch. 252 259.
VOL. I. — 45 705
§ 875 TRANSFER AND TRANSMISSION [ChAP. XV
pudiation of it may be estopped from denying his acceptance.'
Moreover, if one of several trustees authorizes the investment
of certain of the trust moneys in the shares of a certain company,
and the moneys are so invested in the names of all the trustees
he is deemed to have accepted, especially if he has signed a
letter written to the company about the payment of dividends.^
A sale by the transferee of some of the transferred shares is a
sufficient acceptance of the transfer.^ Indeed, the execution of
a transfer on the back of the share-certificate, without receiving
any purchase money and without in fact intending to claim any
interest in the shares, is a sufficient acceptance of the shares.*
The transferee's acceptance may be shown although he did
not explicitly authorize the registration of the transfer. Thus,
after a contract of sale of shares has been made, the vendor is
justified in having the transfer registered without the purchaser's
knowledge, and the latter, having accepted in advance, can-
not escape liability as shareholder by subsequently repudiat-
ing the transfer.^ So, if a person has given his assent to a course
of dealing which involves transferring shares to his name from
time to time, acceptance of each particular transfer need not
be proved." But a voluntary promise to purchase certain shares
when issued to the promisee contemplates a unilateral contract,
and may therefore be withdrawn at any time before the shares
have been registered in the promisor's name.'
If the transferee is a director and the shares are necessary to
qualify him, acceptance is easily inferred.* Indeed, if the trans-
feree Is an officer having charge of the transfer book, it seems
that in order to avoid the burdens of ownership of the shares
he must cancel the transfer or enter a transfer back to the
transferor.'
§ 875. Inconvenience of trusting to Parol Proof of Acceptance.
— The doctrines of law stated in the foregoing paragraphs lead
' Shepherd v. GiUespie, 3 Ch. 764. " Nicol's Case, 3 De G. & J. 387.
' Cunninghame v. City of Glasgow ' Greene v. Sigita Iron Co., 88 Fed.
Bank, 4 A. C. 607. 203.
' Royal Bank of India's Case, 4 ' Finn v. Brown, 142 U. S. 56;
Ch. 252, 259. 12 Sup. a. 136.
* Kenyan v. Fowler, 155 Fed. 107. » Finn v. Brown, 142 U. S. 56, 71 ;
» Webster v. Upton, 91 U. S. 65, 12 Sup. a. 136.
71-72.
Cf. Greene v. Siffua Iron Co., 88
Fed. 203.
706
§ 832-§ 1011] ACCEPTANCE § 876
to the undesirable result that important rights and serious lia-
bilities depend upon the fact of acceptance or repudiation of
a transfer — a fact which can often be proved only by parol.
This inconvenience is greater in the case of shares in corpora-
tions than in the case of transfers of real estate ; because in the
case of land acceptance can generally be proved by notorious
facts such as taking possession, collecting rents, paying taxes,
and so forth. Moreover, shares are liable to great and sudden
fluctuations of value, so that the incentive may be strong to in-
duce a transferee to repudiate a transfer when the company
gets into diflBculties, although his real intention at the time was
to accept it. Upon the whole, the desirability of requiring
acceptance on the part of the transferee to be evidenced in
writing before the transfer is registered is apparent.
§ 876. Regulations requiring Transfer to be executed by Trans-
feree as well as Transferor. — Accordingly, the regulations of some
English corporations require a transfer of shares to be executed
by the transferee as well as by the transferor.' The reason-
ableness of such a regulation is abundantly supported by the
considerations mentioned in the last paragraph ; ^ and some
American corporations might perhaps do well by their by-laws
to adopt a similar requirement.^ Such regulations are satisfied,
so that the transfer is valid and entitled to registration, if the
transferee enters into direct contractual relations with the com-
pany; and the transferee will be deemed for all purposes a
shareholder if he act as such, although he may never have form-
ally executed the required paper.* Even where the regulations
do not expressly require a transfer to be executed by the trans-
feree, yet if the uniform practice of the company has been to
require execution by both parties, it may refuse to register a
transfer which ex facie contemplates execution both by transferor
and transferee but which in fact is executed by the former alone.^
' See Ortigosa v. Brown, 38 L. T. for execution of an acceptance of the
145; Roots v. Williamson, 38 Ch. D. transfer before the transfer could be
485. registered.
» Marino's Case, 2 Ch. 596, 601. * Re Taurine Co., 25 Ch. D. 118
' One inconvenience consequent (semble); Murray v. Bv^h, L. R.
upon such a regulation would be 6 H. L. 37; Royal Bank of India's
that the purchaser's broker who Cose, 4 Ch. 252, 259.
usually sees to the registration of the But see Ortigosa v. Brown, 38
1 ransfer would have in each case L. T. 145.
to present the certificate to his client ' Marino's Case, 2 Ch. 596.
707
§ 877 TRANSFER AND TRANSMISSION [ChAP. XV
§ 877. Infancy or other Disability of Transferee. — Inasmuch
as transfers of shares, in the absence of regulations or by-laws
such as those referred to in the last paragraph, are valid with-
out any acceptance on the part of the transferee (subject of
course to his right to repudiate the title), it would seem logically
to follow that a transfer would not be invalidated because of
some incapacity on the part of the transferee, such as infancy,
coverture,' or the like. Accordingly, the opinion was expressed
in an Irish case that a transfer of shares to an infant, if duly
registered, will relieve the transferor, for the future, from lia-
bility as shareholder; ^ but the contrary has been held in Eng-
land,^ and in America.* At any rate, the infant is privileged to
repudiate the shares when he becomes of age and thus escape
liability in respect thereof; but unless on obtaining his major-
ity he promptly repudiates the shares, he will be deemed to have
elected to affirm the transaction, and therefore will be liable as
shareholder.^ Where the infant transferee comes of age after
the commencement of the winding-up, it has been held that he
cannot, by electing to affirm, compel the liquidator to accept him
as a shareholder." The inconveniences of having as share-
holder a person who may at the end of his minority elect either
to retain or to repudiate the shares are, from the company's
point of view, so great, where the shares are not fully paid up,
that a corporation cannot be compelled to register a transfer of
partly paid shares to an infant.' The question has been left
open whether the rule would be the same in the case of fully
paid shares ; * but it is submitted that a company ought not
'■ Cf. Christopher v. Norvdl, 201 * Regina ex rel. Blackbom v.
U. S. 216; 26 Sup. Ct. 502; Kerr Midland Counties By., 15 Ir. Com.
V. Vrie, 86 Md. 72; 37 Atl. 789; L. 514, 522 (semble).
63 Am. St. Rep. 493; 38 L. R. A. Cf. Lumsden's Case, 4 Ch. 31.
119; Tucker v. Curtin, 148 Fed. ' Capper's Case, 3 Ch. 458;
929; 78 C. C. A. 557 (holding that Mann's Case, 3 Ch. 459 n. Cf.
transfer of shares in ordinaty way Brown v. Black, 8 Ch. 939.
front husband to wife is a transfer * Aldrich v. Bingham, 131 Fed.
through a third person, namely the 363.
corporation, within the meaning of a ° Lumsden's Case, 4 Ch. 31.
rule of Massachusetts law by which ° Symon's Case, 5 Ch. 298.
a transfer of personal property from ' Regina ex rel. Blackborn v. Mid-
a husband to his wife without the land Counties Ry., 15 Ir. Com. L. 514.
intervention of a third person is ' Regina ex rel. Blackborn v. Mid-
constructively fraudulent as against land Counties Ry., 15 Ir. Com. L. 514.
his creditors). 521-522.
708
§ 832-§ 1011] INCAPACITY OF TRANSFEROR § 880
to be compelled to execute a transfer to an infant whether the
shares are fully paid or not. Where the transfer is made to an
infant as trustee or nominee of an adult, the infant's name can-
not be treated as a mere alias for that of the cestui que trust, so
as to justify the company or the liquidator in putting the name
of the cestui qv£ trust on the list of shareholders.'
§ 878. Corporations as Transferees. — If the transferee be
a corporation, and if the acceptance of the transfer would
be ultra vires, the transferee cannot compel the company to
register the transfer.^ The question whether such a transfer, if
registered, will subject the transferee to liability as a share-
holder or entitle him to rights of a shareholder is considered be-
low.^ If a transfer of shares to a corporation be presented for
registration, but before the registration be actually completed
the transferee company is thrown into liquidation, the transfer
is nevertheless valid, and the assets of the transferee company
are subject to any liability attaching to the ownership of the
shares.*
§ 879. Fictitious Transferee. — A transfer to a fictitious trans-
feree is wholly void even though it be entered on the company's
books.^ There cannot be a transfer without a transferee.
§ 880. Incapacity of Transferor. — Any legal incapacity of
the transferor of course invalidates the transfer. For example,
a transfer by an infant is voidable, and if he elect to disaffirm,
no title passes; and if the transfer has been registered, he may
compel the company to reinstate him as shareholder or may
pursue any of the other remedies open to a shareholder whose
name has been stricken from the register in pursuance of an
invalid transfer. The same law applies to a transfer by a lunatic,"
■ Massey & Giffin's Case (1907), 191. As to effect of share-certificate
1 Ch. 582. Cf. supra, § 767. in the name of a fictitious person,
' Franklin Bank v. Commercial see infra, § 911.
Bank, 36 Oh. St. 350; 38 Am. Rep. » Chew v. Bank of Baltimore, 14
594. Cf. infra, § 1049. Md. 299; McLaughlin v. Daily
' Infra, § 1034, § 1049, § 1231. Telegraph, 1 Comm. L. R. (Aust.)
* Barned's Banking Co., 3 Ch. 105, 243.
117-118. As to transfers by married women,
' Muskingum Valley Turnpike Co. see Dow v. Gould, etc. Mining Co.,
V. Ward, 13 Oh. 120; 42 Am. Dec. 31 Cal. 629.
709
§ 881 TEANSFER AND TRANSMISSION [ChAP. XV
at all events unless it appear that he has received full value and
has not been imposed upon. All these and similar questions
are governed by the general law of infancy, lunacy, coverture,
etc., and not by any peculiar principles applicable to shares in
incorporated companies.
§ 881-§ 889. Application of General Principles as to Complete-
ness of Transfers to Special Cases.
§ 881. Enumeration of Five Classes of Special Cases. — The
principles which have been set forth above as to the method of
making valid and complete transfers may require to be appUed
in several classes of special cases arising between various
parties: (1) between a cestui que trust and a purchaser from
the trustee, without notice of the trust; (2) between donee and
donor; (3) between successive transferees from the same trans-
feror ; (4) between the transferor and creditors of the transferor,
or the representative of creditors of the transferor; (5) where
transfers have passed from hand to hand, like negotiable instru-
ments. Of these in their order :
§ 882. Between Cestui Que Trust and Purchaser from Trustee.
— As between a cestui que trust and a purchaser from a misbe-
having trustee, the question is simply. Has the purchaser
acquired a legal as distinguished from an equitable right before
receiving notice of the cestui que trust's claim ? So long as the
purchaser's right is equitable merely, the equity of the cestui que
trust, being prior in time, is the stronger in law.' But in order
that the bona fide purchaser should prevail, it is not necessary
that he should be actually registered as shareholder, or should
acquire the technical and complete legal title to the shares as
explained above : he will be protected if, before learning of the
cestui que trust's claims, he gets possession of the indicia of
ownership, and clothes himself with authority sufficient to
enable him to procure registration without calling upon the
transferor to do any further act.^ This he does, whenever he
' Roots v. Williamson, 38 Ch. D. ' Dodds v. HiUs, 2 Hem. & Miller,
485; Moore v. Nort^ Western Bank 424; Winter v. Montgomery 6as-
(1891), 2 Ch. 599; Ireland v. HaH Light Co., 89 Ala. 544; 7 So. 773.
(1902), 1 Ch. 522. But see Roots v. Williamson, C3
710
§ 832-§ 1011] PURCHASERS FROM TRUSTEES § 883
gets possession of the share-certificate with a transfer in regular
and ordinary form.' Consequently, a purchaser or mortgagee
from a trustee, who pays his money and receives the share-
certificate coupled with a transfer, without notice of the trust,
will be preferred to the cestui que trust, although he is notified of
the latter's rights before presenting the transfer for registration
and thus actually clothing himself with complete legal title.^ If
the purchaser from the trustee is actually registered as share-
holder, his title is superior to that of the cestui qu^ trust, although
the share-certificate may not have been delivered to him by the
trustee, having been in the possession of the cestui que trust}
The only ground on which a different result could well be
reached would be that a transferee who does not get the share-
certificate should be charged with notice of any rights of the
holder of the certificate.
§ 883. Where the Company itself is Cestui que Trust or has
some Equity against the Transferor. — A special class of cases
coming under the general head which we are now considering
is where the purchaser of shares is sought to be affected with
some equity which existed in favor of the company against his
transferor. The rule in such cases is that a purchaser for value
of the shares without notice of the company's equity takes
discharged therefrom. Of course, if the company allows the
transfer to be registered, it would by so doing waive its equity.
But even where registration is refused, the company would be
estopped from setting up its right against a bona ftde purchaser
of the share-certificate. Thus, a corporation cannot refuse to
register a transfer because of a lien in its own favor which was
Ch. D. 485; Moore v. North Western Dougherty, 62 Oh. St. 589; 57 N. E.
Bank (1891), 2 Ch. 599; Ireland v. 455 (where the bona fide transferee
Hart (1902), 1 Ch. 522. was protected although he acquired
' Dodds y. Hills, 2 Hem. & knowledge of the prior equity before
Miller 424 ; Winter v. Montgomery delivery of the certificates).
Gas-Light Co., 89 Ala. 544 ; 7 So. 773 ; = Dodds v. HiUs, 2 Hem. & Miller,
Salisbury MUls v. Tovmsend, 109 424.
Mass. 115; Anderson v. Waco State ' N. Y., etc. R. B. Co. v. Schuyler,
Bank, 92 Tex. 506; 49 S. W. 1030; 34 N. Y. 30, 78-81.
71 Am. St. Rep. 867; Boss v. South- Cf. First Nat. Bank v. Clifford, 47
western R. R. Co., 53 Ga. 514; Iowa 575 (where no certificate had
Gurley v. Reed, 190 Mass. 509; 77 ever been issued to the trustee).
N. E. 642.
Cf. Dueber, etc. Mfg. Co. v.
711
§ 884 TRANSFER AND TRANSMISSION [ChAP. XV
created by the transferor, but of which the purchaser of the
certificate hacl no notice.' Where the company colorably issues
shares for the purpose of qualifying the holder as a director, the
trust or equity in favor of the company is not regarded as of
great merit, so that the company's claim will be postponed to
that of a person to whom the director has agreed to sell or pledge
the shares : ^ the equities are not deemed equal, and hence the
company's priority in point of time is of no avail.
§ 884. Between Donor and Donee. — As between a, donee
and donor of shares the rule to be applied is that while equity
will not aid an incomplete gift, yet its assistance will not be lent
to the donor to enable him to revoke his gift. Consequently, if
the donee has obtained dominion over the shares so that he can
perfect his rights without calling upon the donor to do any
further act, the gift will be irrevocable by the donor even though
the technical legal title to the shares may not have been vested
in the donee by registration. Accordingly, where the donor has
delivered the share-certificates to the donee endorsed in the
usual way, the latter's title is so far complete that nothing that
the donor can do can impair it or prevent the donee- from
requiring the company to register him as shareholder;' and,
indeed, even a parol delivery of the certificate without any
endorsement or written transfer will have the same effect.' K
no share-certificates have been issued, a gift by execution and
delivery of a transfer under seal has been held to be complete.*
' Trust & Savings Co. v. Home 107 N. W. 935 (where the certificate
Lumber Co., 118 Mo. 447; 24 S. W. was delivered to a trustee for the
129. Cf. supra, § 706, § 707. donee, who was accordingly allowed
^ Dueber, etc. Mfg. Co. v. Dough- to maintain a bill to compel the
erty, 62 Oh. St. 589; 57 N. E. 455. trustee 'to transfer the shares to
' Grymes v. Hone, 49 N. "Y. 17; her).
10 Am. Rep. 313. But see Matthews v. Hoagland,
' Reed v. Copdand, 50 Conn. 472; 48 N. J. Eq. 456; 21 Atl. 1054.
47 Am. Rep. 663; Commonwealth v. Cf. Colton v. WilUams, 65 111.
Compton, 137 Pa. St. 138; 20 Atl. App. 466 (a peculiar case stated
417; Walsh v. Sexton, 55 Barb, supra, §863); Nicolls v. Reid, 109
(N. Y.) 251 (gift mortis causa); Cal. 630; 42 Pac. 298.
CfUkinson v. Third Ave. R. R. Co., As to gift from husband to wife,
47 N. Y. App. Div. 472; 63 N. Y. see Tucker v. Curtin, 148 Fed. 929;
Supp. 792; Bond v. Bean, 72 N. H. 78 C. C. A. 557; First Nat. Bank v.
444; 57 Atl. 340; First Nat. Bank Holland, ubi supra.
V. Holland, 99 Va. 495; 39 S. E. ' De Caumont v. Bogert, 36 Hun,
126; 86 Am. St. Rep. 898; 55 L. R. (N. Y.) 382.
A. 155; Larimer v. Bearddey (Iowa),
712
§ 832-§ 1011] SUCCESSIVE transfers § 885
These rules are not accepted in Maryland, where the courts
have adopted the doctrine that until the donee has perfected
his title by having the transfer registered, the donor may revoke
it,' and of course his death operates as a revocation. The rule
in England seems to be the same as in Maryland.^
It has been said in New York that the mere entry of a transfer
of shares in the company's books cannot be a complete gift unless
the donee be invested in sonie further way with dominion over
the shares; ' but one may doubt whether this dictum embodies
sound law.*
In all the United States a mere voluntary executory promise
to cause shares to be transferred may be revoked by the
donor.' Moreover, a delivery of the share-certificates with
transfers endorsed thereon to the company's secretary, coupled
with directions to hold the certificates subject to the trans-
feror's order and in case of her death to deliver them tg the
transferees is clearly not a completed gift mortis caicsa.'^
§ 885. Between Successive Transferees from same Transferor.
— DiflBcult questions sometimes arise between successive trans-
ferees from the same transferor. The registered owner first
executes a formal transfer to A and subsequently but before
the first transfer is presented for registration executes another
transfer to B. Neither transfer having been registered, who
has the better right to the shares, A or B ? Other things being
equal, the first transferee has the better right : ' qui prior est
tempore potior est jure. Wherever either by law or by custom
transfers should be registered only upon surrender of the cer-
tificate issued to the transferor, the transferee who gets posses-
sion of the certificate would seem to have a stronger right
' Baltimore Retort, etc. Co. v. * Griffin v. Knoblock (Colo.), 77
Mali, 65 Md. 93; 3 Atl. 286; 57 Pac. 370.
Am. St. Rep. 304; Pennington v. ' Noble v. Learned (Cal.), 87 Pac.
cuttings, 2 GiU & J. (Md.) 208. 402; Nohle v. Garden, 146 Cal. 225;
= MUroy v. Lord, 4 De G. F. & J. 79 Pac. 883.
264; Bartholomew v. Menzies (1902), ' Societe Generale de Paris v.
1 Ch. 680 (where no written transfer Walker, 1 1 A. C. 20 ; Peat v. Clayton
was executed); Moore v. Moore, (1906), 1 Ch. 659. As to the circum-
18 Eq. 474 (holding also that stock stances under which a transfer to
cannot be the subject of a gift the company itself will be postponed
m<rrtis causa). in law to a subsequent transfer to a
' Richardson v. Emmett, 61 N. Y. third person, see Hill v. Atoka Coal,
App. Div. 205; 70 N. Y. Supp. 546. etc. Co., 21 S. W. Rep. 608 (Mo.).
* See supra, § 853.
713
§ 885 TRANSFER ANB TRANSMISSION [ChAP. XV
than a person claiming under a prior transfer without the cer-
tificate.' The failure to deliver the certificate would be deemed
a suspicious circumstance sufficient to subordinate the rights of
the prior transferee to those of the holder of the certificate.^ If
a transferee who has not possession of the certificate is regis-
tered by the company as shareholder, he becomes clothed with
complete legal title and as a bona fde purchaser for value would
take precedence over a person having a mere equitable title
under another transfer either prior or subsequent to his own,^
unless the non-delivery of the certificate should be deemed so
suspicious a circumstance as to charge him with notice of the
rights of the possessor of the certificate. A fortiori, a transferee
to whom the certificate is delivered and who is duly registered
takes a better title than a person claiming under a prior unreg-
istered transfer, which was disconnected from the certificate,
and of which he had no notice.* At any rate, the holder of the
certificate would have a right against the company by estoppel,'
or have a cause of action for registering a transfer without in-
sisting on production of the certificate.*
These questions between successive transferees arise much
more frequently in England than in the United States; for in
this country the practice of endorsing the transfer upon the
certificate itself is so general and inveterate that one rarely
thinks of taking a transfer in any other form. If the certificate
' Cf. Third Nat. Bank v. Buffalo v. Brantingham, 77 N. Y. App. Div.
German Ins. Co., 193 U. S. 581; 24 280; 79 N. Y. Supp. 190; Price v.
Sup. Ct. 524. Morning Star Mining Co., 83 Mo.
" But see Peat v. Clayton (1906), App. 470 (headnote inadequate —
1 Ch. 659 (where the prior transfer where an assignee of the right to
was a general assignment for the dividends was preferred to a sub-
benefit of creditors). sequent transferee of the legal title,
' N. Y., etc. B. R. Co. v. Schuyler, in respect to dividends declared be-
34 N. Y. 30, 78-81 ; Cody v. Potter, fore the legal title vested in the
55 Barb. (N. Y.) 463. second transferee, but postponed to
But see Bridgeport Bank v. him with respect to all dividends
N. Y., etc. B. R. Co., 30 Conn. 231. declared thereafter).
Subsequent cancellation of an But see Peat v. Clayton (1906),
entry of a transfer on the books is 1 Ch. 659 (where the entry of the
of course quite nugatory. Cody v. second transfer on the regbtry was
Potter, ubi supra. subsequently stricken out by the
* Mahany v. Walsh, 16 N. Y. company).
App. Div. 601; 44 N. Y. Supp. « Infra, § 910.
969. « Infra, § 938.
Cf. Printing Telegraph News Co.
714
§ 832-§ 1011] EIGHTS OF teansferor's creditors §
were lost or destroyed, the owner would find himself unable to
obtain a purchaser for the shares without first procuring a new
certificate to be issued to him by the company. But whenever
cases arise of successive transfers, the principles above stated
are those which should be applied.
§ 886. Between Transferee and Creditors of Transferor —
Rights of attaching Creditors. — As between a transferee and an
attaching creditor of the transferor, it would seem to be imma-
terial whether the legal title or only an equitable right has passed
to the transferee. In either case, the attaching creditor, not
being a purchaser for value, should be subordinated to a prior
transferee. For this reason, after a transfer has been made by
endorsement and delivery of the share-certificate, the rights of
the transferee should certainly be held superior to those of a
creditor of the transferor levying upon the shares as his debtor's
property,' even though it be provided that shares shall be trans-
ferable only on the books of the company.^ The contrary has,
' Young v. SoiUh Tredegar Iron
Co., 85 Tenn. 189; 2 S. W. 202;
4 Am. St. Rep. 752; Newberry v.
Detroit, etc. Iron Co., 17 Mich. 141;
Pitot V. Johnson, 33 La. Ann. 1286;
Boston Music Hall v. Cory, 129
Mass. 435 ; Scott v. Pequonnock Nat.
Bank, 21 Blatchf. 203; AUen v.
Stewart, 7 Del. Ch. 287; 44 Atl. 786;
Barse Live Stock Co. v. Range Valley
Cattle Co., 16 Utah 59; 50 Pac. 630;
U. S. V. Vaughan, 3 Bin. (Pa.) 394;
5 Am. Dec. 375; Commonwealth v.
Wairrumgh, 6 Whart. 117; Finney's
Appeal, 59 Pa. St. 398; Cornick v.
Richards, 3 Lea (Tenn.) 1 (with
which compare State Ins. Co. v. Sax,
2 Tenn. Ch. 507, and State Ins. Co. v.
Gennett, 2 Tenn. Ch. 100) ; Ldpscomb
y. Condon, 56 W. Va. 416; 49 S. E.
392; 107 Am. St. Rep. 938; 67
L. R. A. 670 (where no share-cer-
tificate had been issued to the trans-
feree); Loveman v. Henderson, 1
Tenn. Ch. App. 749 (where there was
no written transfer); Farmers, etc.
Bank v. Mosher, 100 N. W. 133;
94 N. W. 1003; 68 Nebr. 713;
Morton v. Cowan, 25 Ont. 529.
' Masury v. Arkansas Nat. Bank,
93 Fed. 603; 35 C. C. A. 476; Broad-
way Bank v. McElrath, 13 N. J. Eq,
24 ; Lund v. Wheaton Roller Mill Co
60 Minn. 36; 52 N. W. 268; 36 Am,
St. Rep. 623 ; Wilson v. St. Louis, etc.
Ry. Co., 108 Mo. 588; 18 S. W. 286
32 Am. St. Rep. 624; Tombler v.
Palestine Ice Co., 17 Tex. Civ. App,
596; 43 S. W. 896; Colt v. Ives,
31 Conn. 25; 81 Am. Dec. 161
Comeau v. Guild Farm Oil Co., 3
Daly (N. Y.) 218; Hubbard v. Bank
of U. S., 12 Fed. Cas. 777 (headnote
inadequate) ; New York Commercial
Co. V. Francis, 83 Fed. 769; 28
C. C. A. 199 ; Continental Nat. Bank
V. Eliot Nat. Bank, 7 Fed. 369 (where
the creditor had no notice of the
transfer); Smith v. Am. Coal Co.,
7 Lans. (N. Y.) 317; Clark v. Ger-
man Security Bank, 61 Miss. 611;
Port Townsend Nat. Bank v. Port
Townsend Gas, etc. Co., 6 Wash. 597;
34 Pac. 155; Sedigson v. Brown, 61
Tex. 114; Thurber v. Crump, 86
Ky. 408; 6 S. W. 145; Mapleto/i
Bank v. Standrod (Idaho), 71 Pac.
119; 8 Idaho 740; 67 L. R. A. 656.
Cf . Scripture v. Francestown Soap-
stone Co., 50 N. H. 571, where the
715
§ 886 TRANSFER AND TRANSMISSION [ChAP. XV
however, been held in some states.' If the transferee sleeps on
his rights for several years after the shares are levied upon and
sold as the property of the transferor, he will be barred by
laches.^ Of course, if the prior unrecorded transfer is executed
in fraud of creditors, then upon familiar principles the subse-
quent attachment will prevail over the fraudulent conveyance,
same result was reached but only on v. Mechanics' Bank, 5 Blatchf. 59;
the ground that the creditor had Oxford Turnpike Co. v. Bunnell, 6
actual notice of the unrecorded Conn. 552; Skowhegan Bank v.
transfer. As to which, see also Cutfer, 49 Me. 315; Ottumwa Screen
Black V. Zacharie, 3 How. 483; Co. v. StodghUl, 103 Iowa 437; 72
Nicollet Nat. Bank v. City Bank, N. W. 669 (where the creditor had
38 Minn. 85; 35 N. W. 577; 8 Am. notice of the transfer prior to the
St. Rep. 643; Cheever v. Meyer, 52 levy); Perkins v. Lyons, 111 Iowa
Vt. 66; Weston v. Bear River, etc. 192; 82 N. W. 486 (where the
Co., 6 Cal. 425; Naglee v. Pacific creditor likewise had notice); Sim-
Wharf Co., 20 Cal. 529; People v. mons v. Hill, 96 Mo. 679; 10 S. W.
Elmore, 35 Cal. 653; Bridgewater 61; 2 L. R. A. 476 (where the
Iron Co. V. Lissberger, 116 U. S. 8; creditor had no notice of the
6 Sup. Ct. 241 (a case originating in transfer).
Massachusetts and applying the law Cf. Sargent v. Franklin Ins. Co.,
of that state); May v. Cldand, 117 8 Pick. (Mass.) 90, 99; 19 Am. Dec.
Mich. 45; 75N. W. 129; 44L. R. A. 306; Andrews v. Worcester, etc.
163 (the purchaser at the sheriff's. R. R. Co., 159 Mass. 64; 33 N. E.
sale having notice of the transfer); 1109; Coleman v. Spencer, 5 Blackf.
Rogers v. Stevens, 8 N. J. Eq. 167 (Ind.) 197; First Nat. Bank v.
(the purchaser having notice of the Hastings, 7 Colo. App. 129; 42 Pac.
transfer). 691 ; IsbeU v. GraybiU, 19 Colo. App.
' Fisher v. Essex Bank, 5 Gray 508; 76 Pac. 550; Sibley v. Quinr-
(Mass.) 373; Fort Madison Lumber sigamund Nat. Bank, 133 Mass. 515;
Co. v. Batavian Bank, 71 Iowa 270; Farmers' Nat. Gold Bank v. Wilson,
32 N. W. 336; 60 Am. Rep. 789 58 Cal. 600; West Coast Safety, etc.
(the attaching creditor having no Co. v. Wvlff, 133 Cal. 315; 65 Pac.
notice of the assignment); State 622; 85 Am. St. Rep. 171.
ex rel. Koons v. First Nat. Bank, 89 The same rule is sometimes pre-
Ind. 302; People's Bank v. Gridley, scribed by express statute. Goyer,
91 111. 457; Buttrick v. Nashua, etc. etc. Co. v. Wildberger, 71 Miss. 438;
R. R. Co., 62 N. H. 413; 13 Am. St. 15 So. 235; Fahrney v. Kelly, 102
Rep. 578 (where the attaching Fed. 403 (where the attaching credi-
creditor had no notice of the trans- tor had notice of the unrecorded
fer); Re Murphy, 51 Wise. 519; 8 assignment); Hair v. Burnell, 106
N. W. 419; Weston V. Bear River, etc. Fed. 280 (where the attaching credi- .
Co., 5 Cal. 186; 63 Am. Dec. 117 tor had notice) ; Scott v. Haupt, 83
(limited by Weston v. Bear River, etc. S. W. (Ark.) 1057; 73 Ark. 78 (same
Co., 6 Cal. 425, to cases where the point as last case); Gates v. Baxter,
creditor is without notice of the 97 Tenn. 443; 37 S. W. 219 (where
transfer, and followed with some the right under an executory con-
reluctance in Naglee v. Pac. Wharf tract of subscription was attached).
Co., 20 Cal. 529); Conway v. John, ' Noble v. Turner, 69 Md. 519;
14 Colo. 30; 23 Pac. 170; WiUiams 16 Atl. 124.
716
§ 832-§ 1011] RIGHTS OF teansfehor's creditors § 888
but the mere failure to record the transfer on the books is not
conclusive evidence of fraud.' A transfer subsequent to the
levying of the attachment should clearly be subordinated to the
attachment, although the share-certificates were not seized by
the sheriff ; ^ but in connection with such cases, it should always
be borne in mind that by the law of some states a seizure of
the share-certificates may be necessary in order to constitute a
valid attachment of the shares.
§ 887. Rights of Trustee in Bankruptcy. — An assignee in
bankruptcy succeeds to such rights only as the bankrupt had,
and cannot be deemed a purchaser for value. Hence, he can-
not claim the shares as against a person claiming under a prior
unregistered transfer from the bankrupt.^
§ 888. Transfers in Fraud of Creditors. — In cases where an
unrecorded transfer is set up against creditors or an assignee in
bankruptcy as their representative, the failure to enter the trans-
fer on the books may be a suspicious circumstance to be weighed
in connection with other evidence upon the issue of fraud ; but
standing alone it is not proof of fraud." If the certificates are
immediately redelivered by the transferee to the transferor,
there arises a strong presumption that the transfer was merely
colorable and fraudulent as against the transferor's creditors.^
Even if fraud be proved, if the company, after notice of the
claims of creditors or of their representative but without notice
of the actual fraudulent intent with which the transfer was exe-
cuted, registers the transfer, it will not be liable for so doing.'
' See infra, § 888. ' Scripture v. Francestoum Soap-
' Harris v. Bank of Mobile, 5 stone Co., 50 N. H. 571, 589-590;
La. Ann. 538; Shenandoah Valley Colt v. Ives, 31 Conn. 25, 36-38;
R. R. Co. V. Grifjith, 76 Va. 913, 81 Am. Dec. 161; New York
922-923. Commercial Co. v. Francis, 83
Cf. McClintock v. Central Bank, Fed. 769; 28 C. C. A. 199; Ctdp
120 Mo. 127; 24 S. W. 1052. v. Mvlvane, 71 Pac. 273; 66 Kans.
But see Clews v. Friedman, 182 143.
Mass. 555; 66 N. E. 201 (depending But see Pinkerton v. Manchester,
upon a peculiar Massachusetts etc..R. R., 42 N. H. 424.
statute). ' McFall v. Buckeye, etc. Ass'n,
' Dickenson V. Centred Nat. Bank, 122 Cal. 468; 55 Pac. 253; 68 Am.
129 Mass. 279; 37 Am. Rep. 351. St. Rep. 47.
Cf. Sibley v. Quinsigamund Nat. " Dickenson v. Central Nat. Bank,
Bank, 133 Mass. 515. 129 Mass. 279; 37 Am. Rep. 351.
But see Shipman v. JEtna Ins.
Co., 29 Conn. 245.
717
§ 889 TRANSFER AND TRANSMISSION [ChAP. XV
Where the certificate is retained in the possession of the trans-
feror, the courts will be very apt to hold the transaction to be in
fraud of creditors of the transferor.'
§ 889. Transfers which have passed from Hand to Hand —
Transfers in Blank. — Another class of cases in which questions
as to the validity of transfers of shares are raised consist of
cases where written transfers of shares (in America usually
endorsed upon the certificates) have passed from hand to hand.
A transfer cannot well pass from hand to hand except where the
transfer as signed by the transferor contains a blank for the name
of the transferee. To execute transfers in blank in this way is
the ordinary American custom, and is by no means uncommon
in England. In these cases, the rule is that, apart from the
somewhat elastic applications of the principle .of estoppel, the
person claiming under the transfer must show that it was exe-
cuted by the transferor or his duly authorized agent in the form
in which the claimant relies upon it or that blanks have been
filled up in pursuance of authority conferred by the transferor,
and that the claimant is either the original transferee or derives
title from him by a regular chain.^ Inasmuch as neither the
certificate nor the written transfer is a negotiable instrument,
it is not enough that the claimant may have got possession of
the certificate, and transfer bona fide, and may have given value
therefor.'
The validity of transfers in blank is seriously interfered with
by a requirement that transfers be under seal ; * but where
transfers are not required to be under seal, the presence of a
seal attached to a transfer in blank will not vitiate any parol
authority of the transferee to fill up the blank, and this is true
even according to the strict English rules, the seal being regarded
as mere surplusage.^ The extent of the actual authority con-
' Atkinson V. Foster, 134 111. 472; Compress Co., 72 Miss. 323 (head-
25 N. E. 528. ' note misleading) ; 16 So. 530. This
' But the original transferor, can hardly be regarded as an ex-
who buys the certificate back from ception to the rule stated in the text,
the transferee or any person to ' See supra, § 842.
whom the transferee transfers it, * Supra, § 847.
is entitled to rely on his legal title so " Ortigosa v. Brown, 38 L. T. 145;
as to prevail over any equitable Ireland v. Hart (1902), 1 Ch. 522,
rights created by the transferee or 525-526.
any subsequent holder of the cer- Cf . Bridgeport Bank v. New York,
tificate. Timberlake v. Shippers' etc. R. R. Co., 30 Conn. 231, 273-275.
718
§ 832-§ 1011] ESTOPPEL OF OWNER § 891
ferred by the transferor to fill up material blanks rests entirely
in parol, and is not apparent from the instrument itself.
Authority to fill up blanks, whatever its extent may be, may
be exercised as well after the death of the transferor as in his
lifetime.'
Where the actual authority conferred by the transferor is
exceeded, the transferee may often be protected by the principle
of estoppel.^
§ 890-§ 923. ESTOPPEL.
§ 890. Classification of Cases of Estoppel. — A very large pro-
portion of the cases relating to the law of transfers of shares
turn on the question whether a person who, according to the
strict rules of law above stated, would be without title is pro-
tected from loss by the principle of estoppel. This protection
may be afforded either by an estoppel against the legal owner
of the shares or by an estoppel against the company. These
two kinds of estoppel will be considered separately.
§ 891-§ 907. ESTOPPEL OF OWNER OF SHARES TO DENY
TITLE OF PERSON CLAIMING UNDER A VOID TRANSFER.
§ 891. General Principles which apply withoi^, Reference to the
Cause of the Invalidity of the Transfer. — First, then, we should
inquire what circumstances will be suiEcient to estop the true
and legal owner of shares from denying the validity of a transfer
which, according to the principles above set forth, is void as
against any one who is free to allege the truth. In general terms,
we may say that the circumstances which will raise such an
estoppel against the true owner of shares are independent of
the cause of the legal invalidity of the transfer. In other words,
the same circumstances will raise an estoppel though the transfer
may be invalid for entirely different reasons. To be sure, some
circumstances sufficient to raise an estoppel can only arise in
case of some particular kind of invalid transfers — blank trans-
fers wrongfully filled up, forged transfers, or altered transfers —
' Leavia v. Fisher, 4 Duer (N. Y.) ' Infra, § 893 et seq.
1. Cf. Kern's Estate, 176 Pa. St.
373; 35AtU231.
719
§ 892 TRANSFER AND TRANSMISSION [ChAP. XV
and these will necessarily be separately considered. At the out-
set, however, we should investigate the general principles as
to what will and what will not be grounds for estoppel against
the true owner in any case of a void transfer. Unfortunately, the
decided cases which deal with these general principles are rare.
A shareholder who as member of the board of directors ap-
proves a transfer of shares, the denoting numbers of which stated
in the transfer are the same as those of shares which he himself
owns, is not by that circumstance estopped from setting up his
own title in opposition to that of the transferee : ' every director
could not be expected to examine personally the register of
shareholders in order to learn whether a person who has exe-
cuted a transfer and presented it to the directors for their ap-
proval is the registered owner of the shares which he assumes
to transfer. The fact that an officer of the company receives
payment of a call or assessment upon certain shares, to which
he claims title, from a person claiming the shares adversely will
not preclude the officer from proving that he has a better title
than the adverse claimant.^
§ 892. Estoppel precluded by Negligence of Transferee. —
Any circumstance sufficiently suspicious, to deter a reasonably
cautious man from accepting a transfer will prevent an estoppel
to dispute the validity of the transfer from arising in favor of
one who has acted upon it. Thus, the fact that a transfer was
executed many years before is a suspicious circumstance.^ So,
a transfer of a share-certificate for much less than the value of
the shares by a lad sixteen years old should put a purchaser
on inquiry.*
§ 893-§ 903. TRANSFERS IN BLA.NK.
§ 893. Statement of Problem. — Questions as to an estoppel
of the true owner of shares to deny the validity of a void or
unauthorized transfer often arise where the common practice
is followed of signing a transfer of shares in blank.
• Dixon V. Kennaway & Co. ' Pennsylvania R. R. Co.'s Ap-
(1900), 1 Ch. 833. peal, 86 Pa. St. 80 (but, note that in
' Shaw V. Spencer, 100 Mass. 382, this case the estoppel was upheld).
394-395; 97 Am. Dec. 107; 1 Am. • Anderson v. Nicholas, 28 N. Y.
Rep. 115. 600.
720
§ 832-§ 1011] TRANSFERS IN BLANK § 894
Of course, blanks may be of various kinds and degrees. For
instance, a blank may be left for some immaterial term ; or on
the other hand a person may sign an entirely blank sheet of
paper, leaving the whole instrument to be filled in above the
signature. Usually however, when we speak of a transfer of
shares in blank, we mean a transfer in which a blank is left for
the name of the transferee but which with that exception is com-
plete. The first question is, what actual authority to fill up the
blank did the transferor intend to confer and upon whom did
he intend to confer it; but this, as we have seen above, is a
question which cannot be answered from the face of the instru-
ment. The principle of estoppel need be invoked only when
the actual authority is exceeded. Whether the transferor should
be estopped is a question which depends very largely on the
state of the instrument when he signed it,' and upon the in-
ferences which might fairly be drawn from the face of the paper
as executed. If the only blank is for the name of the transferee,
the inference might reasonably be drawn that the transferor in-
tended to authorize any person into whose hands the instrument
might lawfully come to fill up the blank with his own name : '
for such is the mercantile custom. If, however, a blank is left
for the number of shares transferred, or for the name of the com-
pany, or for any other matter of similar importance, any such
inference would be unwarrantable, and the only justifiable con-
clusion would be that the transferor intended either to fill up
the blanks himself or to confer a special authority to do so upon
some particular person.
If the blanks are filled up in pursuance of the transferor's
actual authority and directions, there can of course be no ques-
tion but that the transfer is thenceforward valid and effectual
(apart from any technical diflBculties that might be encountered
if the transfer were under seal). The question we are now
to consider is whether by emitting an instrument in an incom-
plete state, the transferor can be estopped from asserting that
the blanks were filled up without his authority.
§ 894. English Doctrine. — By a series of decisions in Eng-
land, following certain earlier English cases as to bills of ex-
change and promissory notes, the law in that country seems to
' Leavitt v. Fisher, 4 Duer (N. 283; 53 N. E. 590. See also infra,
Y.) 1; Coffey v. Coffey, 179 lU. § 896.
VOL. I. — 46 721
§ 895 TRANSFER AND TRANSMISSION [ChAP. XV
have become settled that a person who takes a transfer of shares
in which a blank is left for the consideration, date, name of
transferee, or any other material term, must at his peril ascer-
tain the authority of the person from whom he takes the trans-
fer to fill up the blanks.' This is true, although the jury find
that the transferor was negligent in leaving the blanks and that
the purchaser acted as a reasonable man in advancing his.
money upon the faith of the transfer.^
§ 895. Criticism of English Doctrine. — It is submitted that
these decisions are unfortunate in failing to discriminate be-
tween different sorts of blanks. For instance, if a person signs
a transfer of shares leaving the name of the company blank —
and such a thing is quite possible in England where transfers are
not, as usually with us, endorsed upon the share-certificates —
anybody who takes the transfer in that condition might well be
chargeable with constructive notice of any limitations imposed
by the transferor upon the right to fill up the blank. Any blank
of such sort is a suspicious circumstance.^ On the other hand,
where the only material blank is a blank for the name of the
transferee — and blanks for the consideration, date, etc., are
not material blanks — the instrument is in accordance with the
custom of stock brokers and does not and should not excite the
least suspicion. Accordingly it is submitted that any rule of
law charging a person who advances money on the faith of
such a transfer with constructive notice of any limitations im-
posed by the transferor upon the right to fill up the blank is
without justification in reason.
§ 896. American Doctrine. — Accordingly, the American
cases almost with unanimity hold that a person who signs and
delivers a transfer,, endorsed upon the share-certificate, leaving
a blank for the name of the transferee, is taken impliedly to
authorize any bona fide holder of the certificate and transfer to
fill up the blank with his own name or that of any person whom
' France v. Clark, 26 Ch. D. 257 Clark was so seriously shaken by
(criticising and explaining Ex parte the opinions of the lords in Colonial
Sargent, 17 Eq. 273); Fox v. Martin, Bank v. Cady as to be no longer an
64 L. J. Ch. 473. authority).
But see Colonial Bank v. Cady, ' Hutchinson v. Colorado United
15 A. C. 267, 278, 286; Colonial Mining Co., 3 Times L.IL. 265.
Bank v. Hepworth, 36 Ch. D. 36; ' Cf. TreadweU v. Clark, 114
Smith V. Rogers, 30 Ont. 266 (where N. Y. App. Div. 493; 100 N. Y. Supp.
the judges thought that France v. 1, affirmed, 82 N. E. 505.
722
§ 832-§ 1011]
TRANSFERS IN BLANK
896
he may select; and if any restrictions or conditions which the
transferor may have imposed upon the right to negotiate the
certificate and transfer are disregarded, the transferor will be
estopped from denying the right of any bona fide purchaser of
the instrument to fill out the blank, and have the transfer
registered.^ If, however, the holder of the blank transfer does
not claim to be owner of the shares but represents himself as
agent of the owner and authorized to negotiate a loan on the
owner's behalf on the security of the shares, a lender taking
the shares as collateral upon the faith of those representations
will not, it has been held in New York, be entitled to hold the
shares as against the true owner unless the latter had in fact
given authority to the holder of the transfer to pledge the shares ; ^
but the distinction thus taken is certainly a very fine one, and
is perhaps of questionable soundness. If the bona fide holder
takes as security for a debt, the defrauded owner of the shares
has a right to insist that any other security which the bona fide
holder may have should be exhausted before the shares in ques-
tion are resorted to.^
' National, etc. Trust Co. v. Gray,
12 D. C. App. Cas. 276; Britlan v.
Oakland Bank of Savings, 124 Cal.
282; 57 Pac. 84; 71 Am. St. Rep.
68; McNeil v. Tenth Nat. Bank, 46
N. Y. 325; 70 Am. Rep. 341;
Mount Holly, etc. Co. v. Ferree, 17
N. J. Eq. 117; PraU v. TUt, 28 N. J.
Eq. 479; Otis v. Gardner, 105 111.
436; State Bank v. Cox, 11 Rich. Eq.
(S. Car.) 344; Wood's Appeal, 92
Pa. St. 379; 37 Am. Rep. 694;
Burton's Appeal, 93 Pa. St. 214;
Cherry v. Frost, 7 Lea (Tenn.) 1;
Fatman v. Lobach, 1 Duer (N. Y.)
354; Walker v. Detroit Transit Ry.
Co., 47 Mich. 338; 11 N. W. 187;
Jarvis v. Rogers, 13 Mass. 105;
Gilbert v. Erie Bldg. Ass'n, 184 Pa.
St. 554; 39 Atl. 291; Westing-
house V. German National Bank,
196Pa. St. 249; 46 Atl. 380; Nelson
V. Owen, 113 Ala. 372; 21 So. 75;
Strange v. Houston, etc. B. R. Co.,
53 Texas 162, 170-171; O'Mara
V. Newcomb (Colo.), 88 Pac. 167;
Beckwith v. Gcdlice Mines Co. (Oreg.),
93 Pac. 453 (where the certificate
and transfer were delivered to a
bank to be delivered to a purchaser
on payment of the purchase money).
In Ontario, the American doc-
trine has been followed upon the
ground that by the usage of the
stock exchange the transfer in blank
is recognized as authorizing any
holder to fill in his own name as
transferee. Smith v. Rogers, 30
Ont. R. 256.
On the other hand, in Maryland
the English doctrine has been
followed. Taliaferro v. First Nat.
Bank, 71 Md. 200, 213-214; First
Nat. Bank v. Taliaferro, 72 Md. 164;
German Sav. Bank v. Renshaw, 78
Md. 475. Of. Kern's Estate, 176 Pa."
St. 373 (headnote inadequate); 35
Atl. 231.
^ Merchants' Bank v. Livingston,
74 N. Y. 223. Compare also Mary-
land cases cited in last note.
' Smith v. Savin, 141 N. Y. 315;
36 N. E. 338. Cf. Denny v. Lyon,
38 Pa. St. 98; 80 Am. Dec. 463.
723
§ 897 TRANSFER AND TRANSMISSION [ChAP. XV
§ 897. No Esfoppel where Share-Certificate retained by Trans-
feror. — If the transferor retains the share-certificate in his own
possession, the doctrine of estoppel cannot be relied upon to
eke out the actual authority which he intended to confer to fill
up blanks in the transfer.' By retaining the indicia of owner-
ship, he in effect warns everybody into whose hands the trans-
fer may come to be on his guard against accepting the transfer
as equivalent to the shares. This principle is supported by the
authority of an English decision, and would a fortiori be ac-
cepted as law in the United States where a transfer of shares
separated from the certificate is more unusual and would cer-
tainly never be relied upon by any one but a reckless speculator.
§ 898. No Estoppel unless Transfer regular on its Face. — If
the transferor instead of signing his name at the foot or end
of the printed form on the back of the share-certificate signs in
the blank left at the beginning of the printed form for the name
of the transferor, the transfer is not in order and will not be
sufficient to raise an estoppel against the transferor.^ A transfer
in order to raise an estoppel must be regular on its face.*
§ 899. Alteration of Transfer after the Blank is filled up. — If a
blank for the name of a transferee is once filled up, the power is
exhausted; and any subsequent change in the name is an un-
authorized alteration and makes the instrument tantamount to
a forgery.*
§ 900. Transfer in Blank by Executors. — If executors of a
deceased shareholder execute in their own names upon the back
of their testator's share-certificate a transfer in blank in the or-
dinary American form, the House of Lords held, in a case relat-
ing to shares in an American company, that their action is open
to two constructions. They may have executed the transfer
either for the purpose of selling and disposing of the shares or
merely for the purpose of having the shares put in their own
names as executors; and on account of this ambiguity, it was
held that if in fact the transfer was signed by the executors for
the purpose of having themselves registered as owners and if
' Swan V. North British Austra- ' See also infra, § 900. Cf.
lasian Co., 2 H. &. C. 175. Taliaferro v. First Nat. Bank, 71 Md.
= Treadwell v. Clark, 114 N. Y. 200, 211-212.
App. Div. 493; 100 N. Y. Supp. 1, * Denny v. Lyon, 38 Pa. St. 98;
affirmed, 82 N. E. 505. 80 Am. Dec. 463. See infra, § 907.
724
§ 832-§ 1011] TRANSFERS IN BLANK § 901
the broker wrongfully disposed of the certificate and blank
transfer to a bona fide purchaser, yet the executors ought not
to be estopped from denying the right of the purchaser to fill
in his own name as transferee and to have himself registered
as shareholder.' This conclusion was reached, although several
members of the House expressed an emphatic opinion which
is difficult to reconcile with the English cases cited above,^ that
if the share-certificate had been made out in the names of the
persons who signed the blank transfer endorsed thereon, they
would have been estopped. The decision was rested exclusively
upon the circumstance that the persons who signed the transfer
were executors of the registered shareholder. Nevertheless, it
may be doubted whether that circumstance should upon prin-
ciple affect the application of the doctrine of estoppel. Whilst
the action of the executors was consistent either with an inten-
tion to transfer the shares or with an intention to procure regis-
tration of the shares in their own names, yet if the latter was
their real intention, was it not their duty (if they wished to pro-
tect themselves from estoppel) to fill in their own names as
transferees instead of leaving a blank? The American cases
upon the point are not very full or numerous, but so far as they
go, they are not in harmony with the decision of the House of
Lords in Colonial Bank v. Cady.^ Another circumstance which
was thought by some of the lords to prevent an estoppel from
being raised was the fact that a certificate of grant of letters
testamentary was not attached to the share-certificate, so that
according to the rules of the stock exchange both in London
and New York the instrument would not pass from hand to
hand, being regarded as incomplete and not "in order." ^
§ 901. Transfer in Blank by Guardians. — A transfer in
blank by a guardian, the shares standing in the name of the
ward, has been thought to have no effect by way of estopping
the ward from denying his right or power to dispose of the
' Colonial Bank v. Cody, 15 A. C. ^ Supra, § 894.
267. While the House decided that ' Prall v. TUt, 28 N. J. Eq. 479
the question of estoppel should be Wood's Appeal, 92 Pa. St. 379; 37
determined according to English Am. Rep. 694.
law, yet they expressed the opinion * See particularly judgment of
that the American law did not differ Lord Morris, 15 A. C. 287-288. Cf.
from the law of England. 15 A. C. supra, § 898.
272, 277, 282, 285.
725
§ 902 TRANSFER AND TRANSMISSION [ChAP. XV
shares ; ' for, it was said, the signature of a fiduciary should
put any subsequent holder on his inquiry as to the fiduciary's
authority.
§ 902- § 903. Thep of Certificate endorsed with
Transfer in Blank.
I 902. Theft from Transferor before Delivery to Transferee. —
If a transfer in blank is endorsed upon a share-certificate and
then before any delivery thereof the certificate with the transfer
is lost or stolen and sold to a bona fide purchaser, the right of
the latter to the shares depends upon whether or not the owner
had by negUgence of any kind enabled the theft to be com-
mitted. If he had locked the certificate with the endorsed blank
transfer in his strong-box which the thief had broken open, it
would be difficult to say that the owner had been guilty of any
negligence upon which to build an estoppel. And, accordingly,
in such a case, where the owner of the certificate has been as
careful of it as reasonable convenience admits and reasonable
prudence dictates, he, the original owner, would have a better
title than the bona fide purchaser.^ If, however, the owner had
carelessly left the endorsed certificate in some public place, he
would (at least in America) be held estopped by his negligence,
so that the purchaser would get a good title. But the mere fact
that he leaves the endorsed certificate in a safe-deposit box to
which some other person as well as himself has access will not
estop him from asserting his ownership if that other person
steals the certificate and assigns it to a bcma fide purchaser.*
Even the fact that the true owner had introduced the thief to
the person who afterwards purchased the certificate from him
and had recommended him as trustworthy has been held in-
• O'fferronv.Groy, 168 Mass. 573; Oh. St. 367; 64 N. E. 518; 90 Am.
47 N. E. 429 ; 60 Am. St. Rep. 411; St. Rep. 586 ; 58 L. R. A. 620 (where
40 L. R. A. 498. the certificate endorsed in blank was
' Biddlev. Bayard, lZ'Pa,.Bi. 150; delivered to the company itself as
Sherwood v. Meadow Valley Mining collateral security and was by the
Co., 50 Cal. 412; Barstow \. Savage secretary fraudulently abstracted
Min. Co., 64 Cal. 388; 1 Pac. 349; and reissued).
49 Am. Rep. 705; Anderson v. ' Bangor El. Light, etc. Co. v.
Nicholas, 28 N. Y. 600; Farmers' Robinson, 52 Fed. 620.
Bank v. Diebold Safe, etc. Co., 66
726
§ 832-§ 1011] FORGED TRANSFERS § 904
sufficient to raise an estoppel.^ On the other hand, where the
endorsed certificates were intrusted for safekeeping to an agent
by whom they were fraudulently transferred, the owner has
been held to be estopped.^
§ 903. Theft from Transferee or subsequent Holder. — If,
after a blank transfer is endorsed upon a share-certificate and
after the instrument so endorsed is delivered to the transferee,
the certificate is stolen from the transferee and by the thief sold
to a bona fide purchaser, there might be difficulty in determining
whether the first transferee or the purchaser has the better title.
So far as the original transferor is concerned, it is a matter of
indifference. If the certificates were strictly negotiable, like a
promissory note payable to bearer, there would be no diffi-
culty. But as the certificates lack this technical negotiability,
the transferee, if he has not been guilty of any negligence, has
a superior title to that of the purchaser.' For example, where
shares stand in the name of brokers, as trustees for their cus-
tomer, the latter in sending a messenger for the share-certificate
does not authorize the brokers to deliver it to the messenger in
such a form that he may have the power to convert it to his own
use; and therefore if the brokers deliver the certificate to the
messenger with a transfer in blank endorsed thereon in the usual
form, and if the certificate is sold by the messenger for his own
account, the person to whom he sells it is liable to the true owner
for a conversion.*
§ 904-§ 906. Forged Transfers.
§ 904. In general. — A forged transfer so far as any efficacy
in passing title propria vigors is concerned is equivalent to no
transfer at all.^
' Bangor El. Light, etc. Co. v. Smith v. Prosser (1907), 2 K. B. 735
Robinson, 52 Fed. 520 (headnote (as to a promissory note),
inadequate). ^ East Birmingham Land Co. v.
' Pennsylvania R. B.Co.'s Appeal, Dennis, 85 Ala. 565; 5 So. 317; 7
86 Pa. St. 80; ShaMuck v. American Am. St. Rep. 73; 2 L. R. A. 836.
Cement Co., 205 Pa. St. 197; 54 Atl. ■* Hall v. Wagner, 111 N. Y. App.
785; 97 Am. St. Rep. 735. Div. 70; 97 N. Y. Supp. 570.
Qiuere, whether these decisions * Barton v. North Staffordshire
would be followed in other states. Ry. Co., 38 Ch. D. 458; Barton v.
Cf. HaU V. Wagner, 111 N. Y. App. London, etc. Ry. Co., 24 Q. B. D. 77;
Div. 70, 75-76; 97 N. Y. Supp. 570; Telegraph Co. v. Davenport, 97 U. S.
727
§ 905 TRANSFER AND TRANSMISSION [ChAP. XV
§ 905. Negligence of Person whose Name is forged. — If the
title of any person claiming under a forged transfer is to be up-
held, that result can only be reached because the circumstances
are such as to estop the true owner from asserting that his signa-
ture is forged.' Ordinarily, considerable difSculty is encoun-
tered in raising an estoppel to deny the validity of a title derived
through a forgery. Certainly, the mere fact that the owner in-
trusted the certificate to the forger and thus in a sense made
the crime possible is not suflScient to estop him from setting up
his title, even to the prejudice of a bona fide purchaser,^ even
though the custodian was laiown to the owner to be insolvent
and to have previously used without authority funds not be-
longing to him.' So, the fact that a corporation which owns
stock intrusts its seal to an officer who without authority affixes
the seal to a power of attorney to transfer the stock does not
estop the corporation from denying the validity of a transfer
executed in pursuance of the power of attorney.* So, where,
as is often done in England, the corporation upon receiving for
registration a transfer purporting to be signed by the registered
owner writes a letter of inquiry to the latter in order to ascer-
tain whether the transfer is good, nevertheless the owner is not
estopped from asserting that the transfer was forged, although
he neglected to reply to the letter of inquiry, thus losing an
opportunity of deterring the company from registering the
transfer.^ The negligence of a guardian in regard to the pre-
vention or detection of a forgery cannot estop the ward."
§ 906. Adoption of forged Signature by Transferor. — A
forged transfer may be adopted by the person whose name is
forged, and the signature then becomes by adoption the genuine
signature of the transferor.' But such a ratification will not be
369; Chicago Edison Co. v. Fay, ' Telegraph Co. v. Davenport, 97
164 111. 323; 45 N. E. 534; HQd- U. S. 369 (headnote inadequate).
yard -v. South Sea Co., 2 v. Wras. 76; * Bank of Ireland v. Trustees of
Brown v. Howard Fire Ins. Co., 42 Evans' Charities, 5 H. L. Cas. 389;
Md. 384; 20 Am. Rep. 90. Mayor, etc. of Merchants of the Staple
' As to rights of person claiming v. Bank of England, 21 Q. B. D.160.
under a forged transfer through an ° Barton v. London, etc. Ry. Co.,
estoppel of the corporation to deny 24 Q. B. D. 77.
his title, see infra, § 908 et seq. ' Telegraph Co. v. Davenport, 97
" Cf. Bahia & San Francisco Ry. U. S. 369.
Co., L. R. 3 Q. B. 584; Johnston v. ' Coles v. Bank of England, 10
Renton, 9 Eq. 181. Ad. & E. 437, explained and doubted
728
§ 832-§ 1011] ESTOPPEL OF COMPANY § 908
implied from doubtful evidence.' Thus, where the forger de-
posits the purchase money to the credit of the transferor in a
bank upon which he is authorized to draw cheques in the
name of the transferor, and does draw out sums in excess of
the amount realized upon the forged transfer, there was held
to be no sufficient evidence of ratification of the forged
transfer.^
§ 907. Altered Transfers. — A transfer of shares which is
altered in any material particular withoftt the transferor's au-
thority is in its altered form substantially a forged transfer,*
and subject to the same rules. If the transfer is altered by the
transferor without the transferee's consent, it would neverthe-
less have the same effect as if a second transfer had been exe-
cuted by the transferor;' but if such altered transfer is to a
person who either from the state of the document or otherwise'
has notice of the alteration, the rights of the first transferee are
clearly superior.'
§ 908-§ 923. ESTOPPEL OF COMPANY TO DENY TITLE OF
PERSON CLAIMING UNDER A VOID TRANSFER.
§ 90S. Existence of Estoppel independent of Cause of Invalidity
of Transfer. — Very valuable rights may be acquired through a
void transfer, where, although the true owner is not estopped
from claiming his shares, yet the company is for some reason
estopped from denying the transferee's title.' The grounds for
such an estoppel are generally if not always quite independent
in Bank of Ireland v. Trustees of after blanks have once been filled up,
Evans' Charities, 5 H. L. Cas. 389, see supra, § 899.
411, 414, 415. * Eaton v. New England Telegraph
' Chicago Edison Co. v. Fay, 164 Co., 68 Me. 63, 68 (semble).
111. 323; 45 N. E. 534. * Eatony. New England Telegraph
"^ Chicago Edison Co. v. Fay, 164 Co., 68 Me. 63.
111. 323; 45 N. E. 534. « As to estoppel of the corpora-
'' Hare v. L. & N. W. Ry. Co., tion to treat shares in the hands
Johns. 722; Sewall v. Boston Water of a transferee as not fully paid
Power Co., 4 Allen (Mass.) 277; 81 up, see supra, § 800.
Am. Dec. 701.
As to alteration of blank transfer
729
§ 909 TRANSFER AND TRANSMISSION [ChAP. XV
of the cause of the invalidity of the transfer — lack of title in
the transferor, forgery, or any other cause. Hence, in deter-
mining whether the company is estopped from denying the title
of a person claiming under a void transfer, there is no occasion
to inquire how the transfer came to be invalid.
§ 909-§ 921. ESTOPPEL BY ISSUE OF SHARE-CERTIFICATE.
§ 909. In general. — The circumstance usually seized upon
to raise such an estoppel against the company is the issue of a
share-certificate to the transferor. A certificate is a solemn asser-
tion under the corporate seal that the person named therein is
entitled to the specified number of shares. This representation
is made for the purpose of being acted upon, and if a person
does act uf)on it, for instance, by purchasing the holder's suj)-
posed rights, the company is estopped from asserting that the
representation was false and that the certificate holder had in
fact no title, either because he claimed under an invalid transfer
or for any other reason.' If the company possesses unissued
shares, it may doubtless be required to make good its repre-
sentation by issuing them to the holder of the certificate or his
transferee.^ If the entire authorized capital has been already
issued, then the company cannot be compelled to issue the shares
which the certificate represents ; ' but the estoppel exists never-
theless,* so that if the company cancels the entry of the certificate
' Bahia & San Francisco By. Co., Mass. 547; 24 N. E. 914; 8 L. R. A.
L. R. 3 Q. B. 584; Ottos Kopje Dia- 750.
mond Mines (1893), 1 Ch. 618; Shaw " Bank of Kentucky v. Schuylkill
V. Port Philip Mining Co., 13 Q. B. Bank, 1 Pars. Eq. Cas. (Pa.) 180,
D. 103 ; Bank of Kentucky v. Schuyl- 249 (semble) ; Westminster Nat.
kill Bank, 1 Pars. Eq. Cas. (Pa.) 180, Bank v. New England Electric
249-250; Philadelphia Nat. Bank v. Works, 62 Atl. 971; 73 N. H. 465;
Smith, 195 Pa. St. 38; 45 Atl. 655; 111 Am. St. Rep. 637.
Fifth Avenue Bank v. Forty-second ' Allen v. South Boston R. R. Co.,
Street, etc. R. R. Co., 137 N. Y. 231; 150 Mass. 200, 207; 22 N. E. 917;
33 N. E. 378; 33 Am. St. Rep. 712; 15 Am. St. Rep. 185; 5 L. R. A. 716;
19 L. R. A. 331; Daily Tdegraph First Ave. Land Co. v. Parker, 111
Newspaper Co. v. Cohen, 5 N. So. Wise. 1; 86 N. W. 604; 87 Am. St.
Wales State Rep. 520; Westminster Rep. 841.
Nat. Bank v. New England Electric But see Machinists' Nat. Bank v.
Works, 62 Atl. 971; 73 N. H. 465; Field, 126 Mass. 345 (headnote
111 Am. St. Rep. 637. misleading).
In addition, the officers who is- * Balkis Consolidated Co. v. Tom/-
sued the certificate may be liable for kinson (1893), A. C. 396, 410.
deceit. Windram v. French, 151 Cf. Bridgeport Bank v. New York,
730
§ 832-§ 1011] ESTOPPEL OF COMPANY § 910
holder's name among its shareholders (as it must do at the in-
stance of the true owner of the shares), then the transferee from
the person to whom the certificate was issued is entitled to treat
such action as a conversion and recover from the company the
value of the shares.' In such a case the certificate holder is
€ntitled to retain any dividends which may have been paid to
him by the company.^ The company is, however, entitled to
the same rights that it would have had if the shares had been
valid, and therefore if it be entitled to a lien on its shares for
debts of the holders, it is entitled to set off or recoup out of the
sum payable as damages the amount of any debt for which it
would have had a lien if the shares purporting to be represented
by the certificate had had a legal existence.'
§ 910. Whether Certificate estops Company from asserting that
Holder has lost his Title by Transfer or otherwise after Issue of Cer-
tificate. — The estoppel created by the issue of a share-certificate
precludes the company from denying that the person named in
the certificate was entitled to the shares at the time of the issue
of the certificate: it may not in all cases prevent the company
from showing that the title, although good at that time, subse-
quently became invalid. Suppose, for instance, the holder of
the certificate, having a good title, transfers the shares by a duly
registered transfer to some other person, but is permitted by the
etc. B. B. Co., 30 Conn. 231; Bank Tarboro, 132 N. Car. 214; 43 S. E.
4>f Kentucky v. Schuylkill Bank, 1 639; 95 Am. St. Rep. 627; Daily
Pars. Eq. Cas. 180, 245 et seq. ; Telegraph Newspaper Co. v. Cohen,
Willis V. Philadelphia, etc. B. B. Co., 5 N. So. Wales State Rep. 520 (hold-
<3 Wkly. N. Cas. (Pa.) 461; Am. ing that where the shares have in-
Exch. Nat. Bank v. Woodlawn Ceme- creased in value, the measure of
tery, 105 N. Y. Supp. 305 (holding damages is the value at the time the
also that the fact that the several company first refused to recognize
certificates presented to a transferee plaintiff as shareholder),
were not consecutively numbered, Cf. First Ave. Land Co. v. Parker,
was not sufficient to charge him with 111 Wise. 1 ; 86 N. W. 604; 87 Am.
notice of an overissue). St. Rep. 841.
' Bahia & San Francisco By. Co., But see contra: Mechanics' Bank
L. R. 3 Q. B. 584; Ottos Kopje Dion v. N. Y., etc. B. B. Co., 13 N. Y.
■morarfMines (1893), ICh. 618; Shaw 599 (distinguished in iV. Y., etc. B.
v. Port PhUip Mining Co., 13 Q. B. B. Co. v. Schuyler, 34 N. Y. 30).
D. 103; Mount Holly Paper Co.'s ' Daily Telegraph Newspaper Co.
Appeal, 99 Pa. St. 513, 521 (head- v. Cohen, 5 N. So. Wales State Rep.
note inadequate); Allen v. South 520.
Bostonfl.iJ. Co., 150 Mass. 200, 207; ' Mount Holly Paper Co.'s Ap-
22 N. E. 917; 15 Am. St. Rep. 185; peal, 99 Pa. St. 513 (headnote in-
S L. R. A. 716; Havens v. Bank of adequate).
731
§ 910 TRANSFER AND TRANSMISSION [ChAP. XV
company to retain the certificate. If he, being still possessed of
the indicia of ownership, executes a transfer to some other person
to whom the certificate is delivered and who pays his moiiey in
reliance upon the certificate, is the company estopped from deny-
ing the title of this second transferee? In order that such an
estoppel should be raised, it is necessary to show that the com-
pany was guilty of some negligence or breach of duty. If the
shares are, as is usually the case, at least in America, expressed
to be transferable only upon surrender of the certificate, the
registration of the first transfer without requiring the transferor
to surrender the certificate would seem to be sufficient to charge
the company with a continuing representation that the trans-
feror remained entitled to the shares represented by the cer-
tificate, so that the company should be estopped from denying
the title of the second transferee,' or from denying the title of
a transferee to whom the certificate had been delivered before
the registration of the other transfer.^ At all events, this result
should be reached unless the company had reasonable ground
to suppose that the certificate had been destroyed.
Nevertheless, the opposite conclusion was recently reached by
the English Court of Appeal, which held that under such cir-
' Cushman v. Thayer Mfg. Jew- v. Thompson, 103 Va. 58 ; 48 S. E.
elry Co., 76 N. Y. 365; 32 Am. Rep. 506.
315; Bank v. Lanier, 11 Wall. 369; ' Colonial Bank v. Whinney, 11
Strange v. Houston, etc. R. R. Co., A. C. 426, 437-438, per Lord
53 Tex. 162 ; Greenleaf v. Lwdington, Blackburn.
15 Wise. 558; 82 Am. Dec. 698; Cf. Strange v. Houston, etc. R. R.
Supply Ditch Co. v. Elliott, 10 Colo. Co., 53 Tex. 162, 168; Greenleaf v.
327; 15 Pac. 691; 3 Am. St. Rep. Ludington, 15 Wise. 558; 82 Am.
686. Dec. 698 ; Guilford v. Western Union
But see Bank of Commerce v. TeL Co., 59 Minn. 332; 61 N. W.
Bank of Newport, 63 Fed. 898, 902 324'; 50 Am. St. Rep. 407 (where
(headnote misleading); 11 C. C. A. the certificate h^d been lost for
484. twelve years); Cleveland, etc. R. R.
2 Cleveland, etc. R. R. Co. v. Roh- Co. v. Rabbins, 35 Oh. St. 483 (where
hins, 35 Oh. St. 483; Factors, etc. the fact that the transfer had been
Ins. Co. V. Marine Dry Dock, etc. Co., registered and a new certificate is-
31 La. Ann. 149; Brisbane v. Dela- sued in pursuance of a by-law to
ware, etc. R. R. Co., 94 N. Y. 204; replace a certificate which was sup-
First Nat. Bank v. Stribling, 16 Okl. posed to be lost was thought to
41 ; 86 Pac. 512. make no difference in the company's
As to the effect of the issue of a liability) ; PottsvUle Bank v. Miners-
new certificate to the transferor in vUle Water Co., 211 Pa. 566; 61 Atl.
pursuance of judicial proceedings 119 (where the first transferee and
presupposing that the original cer- holder of the certificate was held to
tificate had been lost, see Downing be barred by laches).
732
I 832-§ 1011] ESTOPPEL OP COMPANY § 911
cumstances no estoppel should be raised against the company.*
It is submitted that this decision is narrow, and unsuited to
modern commercial conditions. The precise ground for the
estoppel which has been suggested above does not seem to have
been called to the attention of the court, the- contention of coun-
sel being that the company was estopped by a "certification" ^
of the first transfer — a contention which the judgments of the
learned judges answer very clearly and conclusively.
As stated above, the true doctrine would seem to be that an
outstanding certificate is a continuing representation on the
company's part that the person named therein is holder of the
shares represented thereby ; " and that this representation con-
tinues until the certificate is cancelled or surrendered, or until
its remaining in circulation can no longer be attributed to
the company. Thus, even a decree against the certificate holder
declaring him to hold the shares in trust will not prevent the
company from being estopped to deny the title of a subsequent
bona fide purchaser taking the certificate from the trustee; * and
hence the court will not enter such a decree without first secur-
ing a surrender of the certificate.^ On the other hand, it has
been held that where shares are sold under a decree of a court
of equity passed in a case to which the holder is party, the com-
pany is not bound to recognize the title of a purchaser who sub-
sequently obtains the certificate from the holder, without notice
of the judicial sale."
§ 911. Certificate issued to Fictitious Person. — A share-
' Longman V. Bath Electric Tram- (headnote misleading); 11 C. C. A.
ways (1905), 1 Ch. 646. Cf. Rain- 484; Guilford v. Western Union Td.
ford V. Jam^s Keith <& Blackman Co. Co., 59 Minn. 332, 345-346; 61
(1905), 1 Ch. 296 (reversed on an- N. W. 324; 50 Am. St. Rep. 407.
other point in S.C. (1905), 2 Ch. 147. * Holbrook v. New Jersey Zinc
An earlier Ontario case is in accord Co., 57 N. Y. 616; Joslyn v. St.
with the English law as established Pavl Distilling Co., 44 Minn. 183;
by Longman v. Bath Electric Tram- 46 N. W. 337.
ways. Smith v. Walkerville Malle- Cf. Bean v. Am. L. & T. Co., 122
abU Iron Co., 23 Ont. App. 95. N. Y. 622; 26 N. E. 11.
' As to what is "certification" ' Joslyn v. St. Paul Distilling Co.,
of a transfer, see supra, § 869. 44 Minn. 183; 46 N. W. 337.
' Joslyn V. St. Pavl Distilling Co., ° Sprague v. Cocheco Mfg. Co., 10
44 Minn. 183; 46 N. W. 337; Strange Blatchf. 173.
v. Houston, etc. B. R. Co., 53 Tex. Cf. Printing Telegraph News Co.
162, 168. V. Brantingham, 77 N. Y. App. Div.
But see Bank of Commerce v. 280; 72 N. Y. Supp. 190.
Bank of Newport, 63 Fed. 898, 902
733
§ 912 TRANSFER AND TRANSMISSION [ChAP. XV
certificate impliedly represents that the person named therein
as shareholder is a real person, and the company is therefore
estopped from asserting him to be fictitious. Hence, it has
been thought that a certificate made out in favor of a fictitious
person is in effect the same as if it represented the bearer to
be the owner of the shares.' This notion is based on analogy
to the law of bills and notes, by which an instrument payable
to a fictitious payee is deemed payable to bearer ; but inasmuch
as corporations usually have no power to issue share-certificates
payable to bearer,^ the analogy is far from complete.
§ 912-§ 916. In whose Favor Estoppel will be raised.
§ 912. Only in favor of Transferee who relied and acted reason-
ably in relying upon the Certificate. — A transferee of a certificate
cannot claim title by estoppel to the shares purporting to be rep-
resented thereby unless he was actually led by the certificate
to believe that his transferor's title was good, nor unless he
acted reasonably in so believing. But a transferee is not negli-
gent who relies upon the company's representation as expressed
in the certificate, and therefore makes no inquiries at the com-
pany's ofiGice; and hence such a transferee can enforce the
estoppel against the company even though the inquiries, if he
had made them, would have disclosed the defect in title.^ More-
over, the estoppel arises even in favor of a transferee who had
knowledge of a doubt as to the title of his transferor; * for he
had a right to infer that the company before issuing a certificate
to the transferor had considered all such doubts and found them
baseless. An officer or director of the company whose duty it
was to know of the invalidity of the share-certificate will not be
allowed as transferee thereof to claim title to the shares as against
the company by estoppel.^
' Jarvis v. Manhattan Beach Co., Third Nat. Bank, 1 Oh. CSrc. Ot.
53 Hun (N. Y.) 362, 365; 6 N. Y. 199).
Supp. 703, affirmed, 148 N. Y. 652; Cf. Allen v. South Boston R. R.
43 N. E. 68; 31 L. R. A. 776; 51 Co., 150 Mass. 200; 22 N. E. 917;
Am. St. Rep. 727. 15 Am. St. Rep. 185; 5 L. R. A. 716.
' Supra, § 852. * Mandelbaum v. North American
' Cincinnati, etc. Ry. Co. v. Citi- Mining Co., 4 Mich. 465.
zena Nat. Bank, 56 Oh. St. 351; 47 " Houston, etc. Ry. Co. v. Van
N. E. 249; 43 L. R. A. 777 (over- Alstyne, 56 Tex. 439. But cf. infra,
ruling Cincinnati, etc. Ry. Co. v. § 1538, § 1540.
734
§ 832-§ 1011] ESTOPPEL OF COMPANY § 914
§ 913. Mere Volunteers. — The estoppel will not be raised
in favor of a mere volunteer. Hence, inasmuch as share-
. certificates are not negotiable instruments, a transferee who
takes the certificate as collateral security for an antecedent
debt cannot claim the rights of holder for value, and there-
fore cannot hold the company estopped from denying his title.'
Moreover, he must actually have given value; it is not enough
that he may have agreed to do so by a contract which he can
rescind for failure of consideration if the title to the shares is
not good.^ On the other hand, a volunteer claiming through a
person whose title the company was estopped from denying
succeeds to the rights of his predecessor in title.
§ 914. Estoppel in Favor of Person to whom Certificate was
issued — When it will not he raised. — The estoppel raised
against a corporation by its issue of a share-certificate to a
person who is not legally entitled to the shares which the cer-
tificate purports to represent can in general be invoked only by
some transferee from the person to whom the certificate is issued
and not by that person himself.' Only in exceptional cases can
the person named in the certificate be proved to have altered
his position in reliance upon the representation contained in the
certificate ; and, therefore, in most cases a necessary prerequisite
to an estoppel in pais is lacking. The certificate holder's loss
is not occasioned by the company's representation. For instance,
if a corporation issues a share-certificate to a person who pre-
sents a forged transfer for registration, and the certificate holder
pledges the certificate as collateral for a loan, the company
' Kisterbock's Appeal, 127 Pa. St. 4 Sup. Ct. 345. Cf. Luenle Dreyfus
601; 18 Atl. 381; 14 Am. St. Rep. Mining Co. v. Willard (Wash.), 89
868. Cf. supra, § 843, and Miller v. Pac. 935.
Houston City Ry. Co., 69 Fed. 63; But see Allen v. Sovih Boston
16 C. C. A. 128 (where the certificate B. R. Co., 150 Mass. 200; 22 N. E.
was deposited as margin on a pur- 917; 15 Am. St. Rep. 185; 5 L. R. A.
chase of cotton for future delivery). 716.
' Hoyden v. Charter Oak Driving As to whether the company can
Park, 63 Conn. 142; 27 Atl. 232. maintain a bill in equity to cancel a
' Houston, etc. Ry. Co. v. Van certificate on the ground of the lia-
Alstyne, 56 Tex. 439; TrinMe v. bihty which might be created by
Union Nat. Bank, 71 Mo. App. 467 ; transferring the same to a bona fide
Brown v. Howard Fire Ins. Co., 42 purchaser, see Reno OH Co. v. Cid-
Md. 384; 20 Am. Rep. 90; Wright's ver, 69 N. Y. Supp. 969; 60 N. Y.
Appeal, 99 Pa. St. 425; Moores v. App. Div. 129.
CiHzens' Nat. Bank, 111 U. S. 156;
735
§ 915 TRANSFER AND TRANSMISSION [ChAP. XV
would be estopped from denying the title of the pledgee ; ' but
if the loan is paid off so that the unincumbered title revests in
the pledgor, the estoppel is at an end,^ for he had not been mis-
led by any representation of the company. It would be different
if the person to whom the certificate was issued first sold the
shares to a bona fde purchaser and then bought them back.
In that case he would succeed to the purchaser's title by
estoppel.
§ 915. When it will be raised. — In some rather exceptional
cases, however, the company may be estopped by the issue of
a certificate even when the certificate has never passed from
the possession or control of the person to whom it was issued.
Wherever it can be shown that the person to whom the certifi-
cate was issued altered his position in some way to his preju-
dice in reliance upon the company's representation that he was
entitled to the shares represented, or supposed to be represented,
by the certificate and that he acted as a reasonable man in so
relying thereon, the company will be estopped from denying the
truth of its representation just as it would be in the case of a
transferee of the certificate. For instance, the company will be
estopped if the person to whom the certificate is issued makes
a contract to sell the shares supposed to be represented by the
certificate and so incurs liability,* or pays a call upon the shares.'
So, where th^.,person to whom the certificate is issued is led to
believe that everything in conhfetion with his title is correct —
is lulled into security — so that he loses his remedy against the
person who was responsible for the defect in his title, the com-
' Metropolitan Sav. Bank v. N. E. 109; 15 Am. St. Rep. 222;
Mayor, etc. of Baltimore, 63 Md. 6 5 L. R. A. 849.
(holding that the corporation is lia- ' Cf. Fifth Ave. Bank v. Forty-
ble to make good to the lender second St., etc. R. R. Co., 137 N. Y.
money advanced to the forger after 231, 238; 33 N. E. 378; 33 Am. St.
the issue of a certificate in the Rep. 712; 19 L. R. A. 331.
forger's name but not money ad- * Balkis Consolidated Co. v. Tom-
vanced to the forger prior to that kinson (1893), A. C. 396.
time upon the faith of the old cer- But the rule is otherwise where
tificate with forged transfer endorsed the contract of sale was made after
thereon). notice of the forgery. Hambleton v.
' Simm V. Anglo-American Tele- Central Ohio R. R. Co., 44 Md. 551.
graph Co., 5 Q. B. D. 188; Erskine Cf. Brown v. Howard Fire Ins.
V. Leewenstein, 82 Mo. 301, 305- Co., 42 Md. 384; 20 Am. Rep. 90.
306 (headnote inadequate). ' Hart v. Froniino Gold Mining
Cf. Farrington v. South Boston Co., L. R. 5 Ex. 111.
B. R. Co., 150 Mass. 406, 408; 23
736
§ 832-§ 1011] ESTOPPEL OF COMPANY § 916
pany is estopped from denying his right to the shares.' For
instance, the company will be estopped if the broker who sold
the shares to the person to whom the company issued the cer-
tificate becomes in the meantime insolvent so that the remedy
against him becomes worthless; but in order to raise an estoppel
of this sort, it must appear, first, that the broker was originally
solvent,^ so that the person to whom the company issued the
certificate had originally a valuable remedy, and secondly, that
the broker subsequently became insolvent,^ so that the remedy
became worthless; and thirdly, that the inaction was really in
reliance upon the company's representation and was not due to
some other cause.* The person who invokes the estoppel must
prove afiirmatively the insolvency of the broker or other person
against whom he claims that a remedy was lost; but solvency
at the time of the issue of the certificate will be presumed unless
the contrary appear.^
If a person claiming under a forged or otherwise invalid trans-
fer agrees to sell the shares and accordingly presents the transfer
for registration with a request that a certificate be issued in the
name of his vendee without any active intervention on the latter's
part, the vendee, if he pay the money on the faith of the new
certificate so made out in his name, may hold the company
estopped from denying his title."
Where an agent of the corporation issues shares on its behalf
to a person who understands that he is acquiring shares not by
transfer, but from the company itself, the company is liable if
the transaction was within the real or apparent scope of the
agent's authority; but not otherwise.'
§ 916. Whether Person to whom Certificate was issued acts
reasonably in relying thereon. ■ — • Furthermore, the estoppel will
not be raised unless the person to whom the certificate was
issued acted reasonably in relying upon the company's assur-
' Dixon V. Kennaway & Co. ' Dixon v. Kennaway & Co.
(1900), 1 Ch. 833; Manhattan Beach (1900), 1 Ch. 833.
Co. v. Harned, 27 Fed. 484. " Trimble v. Union Nat. Bank, 71
' Foster v. Tyne Pontoon, etc. Co., Mo. App. 467.
63 L. J. Q. B. 50, 55-56. Cf. Machinists Nat. Bank v.
' Dixon V. Kennaway, etc. Co. Field, 126 Mass. 345.
(1900), 1 Ch. 833. ' Rogers v. Southern Fiber Co.
* Foster v. Tyne Pontoon Co., 63 (La.), 44 So. 442. See also supra,
L. J.-Q. B. 50, 55. § 581. Cf. supra, § 800.
VOL. 1. — 47 737
§ 916 TRANSFER AND TRANSMISSION [ChAP. XV
ance of the soundness of his title. Whether he does act reason-
ably in so relying depends in part on whether the defect in his
title is due to circumstances of which he has at least as much
opportunity of knowing as the company, or to facts which lie
peculiarly within the knowledge of the corporation. If the
latter be the case, he is entitled to rely upon the company's
assurance.' For instance, if the defect in his title be due to the
fact that the person from whom he derived title was not the
registered owner of the shares, he is not guilty of negligence
because he relies upon the certificate issued to him by the com-
pany and fails to inspect the register so as to discover the defect
in his title.^
On the other hand, where the defect in the title grows out of
facts which do not lie peculiarly within the knowledge of the
company, particularly where the company has been induced to
issue the certificate by some representation express or implied
of the person to whom it is issued, the latter has no right to go
to sleep in reliance upon the certificate, and if he do so cannot
hold the company estopped by. the certificate. This principle
finds application in the case of forged transfers. If a person
presents to a corporation a forged transfer of shares and requests
registration, he impliedly riepresents that the transfer is genuine; *
and, however innocent he may have been of complicity in the
forgery or even of any knowledge or suspicion that the transfer
was spurious, he cannot complain that by registering the
transfer and issuing a certificate according to his request the
company lulled him into security, and if by reason of his false
feeling of security he loses his remedy against the forger or
against any other person, he cannot maintain that the company
is estopped from denying his title.*
' Balkis Consolidated Co. v. Tom- ' Infra, § 942.
kinson (1893), A. C. 396 (headnote * Simm v. Anglo-American Tde-
inadequate). graph Co., 5 Q. B. D. 188.
' Dixon V. Kennaway & Co. Cf. Balkis Consolidated Co. v.
(1900), 1 Ch. 833. See also Salis- Tomkinson (1893), A. C. 396; Bos-
bury Mills V. Tovmsend, 109 Mass. ton, etc. R. R. Co. v. Richardson, 135
115; Cincinnati, etc. Ry. Co. v. Mass. 473; Trimble v. Union Nat.
Citizens' Nat. Bank, 56 Oh. St. 351; Bank, 71 Mo. App. 467; HUdyard
47 N. E. 249; 43 L. R. A. 777. v. South Sea Co., 2 P. Wms. 76;
But cf. Houston, etc. By. Co. v. Brown v. Howard Fire Ins. Co., 42
Van Alstyne, 56 Tex. 439. Md. 384; 20 Am. Rep. 90; Hamble-
738
§ 832-§ 1011] REQUISITES OF CERTIFICATE § 917
§ 917-§ 921. Requisites of Certificate in order
to raise Estoppel.
§ 917. Certificate must be issued by Authority of Company. —
In order that the company should be estopped by the issue of a
certificate, there must of course be evidence that the certificate
was issued by the company's authority — that is to say, by
agents of the corporation acting within the scope of their real
or apparent authority.'
Whether the. issue of the certificate can be deemed within
the scope of authority of the officers or agents by whom the
issue is effected must be decided by the principles of the law of
agency, which are not within the scope of the present discussion.
The fact that the agent in issuing the certificate is acting
fraudulently and for his own gain is by no means conclusive
to show^ that the instrument is not issued within the scope of
the agent's authority so as to estop the company. The circum-
stance that a share-certificate, while not technically negotiable,
is intended to pass from hand to hand as the evidence of owner-
ship of the shares which it purports to represent is sufficient to
exclude the application of the doctrine of Grant v. Norway j' in
which leading case the court held that a carrier is not bound
by a bill of lading issued by an agent where no goods at all
had been delivered for carriage. In the case of certificates of
shares, issued by a transfer agent to a supposed transferee, the
company may, therefore, be bound although no transfer at all
had been presented.^ Indeed, even the fact that some at least
ton V. Central Ohio-R. R. Co., 44 Md. porate seal and blank certificates of
651; Ruben v. Great Fingall Con- stock not sufficient evidence of au-
solidated (1906), A. C. 439. thority in president).
As to the rights of the company ^ Grant v. Norway, 10 C. B. 665.
against a transferee under a forged ' N. Y., etc. R. R. Co. v. Schuyler,
transfer, see infra, §941. 34 N. Y. 30; Fifth Ave. Bank v.
' Farmers' Bank v. Diebold Safe, Forty-second St., etc. R. R. Co., 137
etc. Co., 66 Oh. St. 367; 64 N. E. N. Y. 231; 33N. E. 378; 33 Am. St.
518; 90 Am. St. Rep. 586; 58 Rep. 712; 19 L. R. A. 331; Havens
L. R. A. 620 (where a certificate v. Bank of Tarboro, 132 N. Car.
which had been endorsed in blank 214; 43 S. E. 639; 95 Am. St. Rep.
and deUvered to the company as 627.
collateral security was fraudulently But see Hall v. Rose Hill, etc. Co.,
abstracted and reissued by the secre- 70 111. 673. This case would seem
tary) ; Rogers v. Southern Fiber Co. difficult to reconcile with the rule in
(La.), 44 So. 442 (custody of cor- Royal British Bank v. Turguand, 6
739
§ 918 TRANSFER AND TRANSMISSION [ChAP. XV
of the signatures attached to a certificate are forgeries and that
the seal of,the company is aflaxed without the authority of the
directors will not prevent the certificate from estopping the com-
pany if it was issued from the company's office by a transfer
agent clothed with apparent authority and impliedly representing
the instrument to be valid.'
On the other hand, where in 1881 a certificate was signed in
blank by the president of a company and intrusted to the other
officers to be used in case a shareholder should desire to transfer
his shares in the president's absence, and where in 1888 the then
president of the company, who in 1881 had been secretary, filled
up the blanks, inserting his own name as shareholder, and forg-
ing the signature of the person who had been treasurer in 1881
(which was the date borne by the certificate), and countersign-
ing with his own name as secretary, the court held that the
forger's authority to issue certificates dated in 1881 while he
was secretary had absolutely determined upon his ceasing to
hold the office of secretary, and consequently that even a bona
fide purchaser or pledgee from the forger had no claim against
the company by reason of the certificate.^
§ 918. Certificates issued for unlawful Purposes. — It has been
held by high authority that share-certificates issued in aid of
rebellion will not create any estoppel prejudicial to the loyal
E. & B. 327 (as to which see infra, R. B. Co. v. Franklin Bank, 60 Md.
§ 1474), and with established princi- 36.
pies of the law of agency. But see Hill v. Jewett Publishing
Cf. Mechanics Bank v. New York, Co., 154 Mass. 172; 38 N. E. 142;
etc. R. R. Co., 13 N. Y. 599. 26 Am. St. Rep. 230; 13 L. R. A.
' Shaw V. Port Philip Mining Co., 193; Ruben v. Great Fingall Con^
13 Q. B. D. 103; Fifth Avenue Bank solidated (1906), A. C. 439 (a mere
V. Forty-second St., etc. R. R. Co., dictum, since the person in whose
137 N. Y. 231; 33 N. E. 378; 33 favor the estoppel was invoked was
Am. St. Rep. 712; 19 L. R. A. 331; the person to whom the certificate
Hetlman v. Forty-second St., etc. R. was issued and, therefore, under the
R. Co., 74 Hun 529; 26 N. Y. Supp. circumstances was not entitled to
553, affinned short, 148 N. Y. 727; rely thereon).
42 N. E. 723; Tome v. Parkersburg ^ Manhattan Life Ins. Co. v.
Branch R. R. Co., 39 Md. 36; 17 Forty-second St., etc. R. R. Co., 139
Am. Rep. 540. N. Y. 146; 34 N. E. 776. Note that
Cf. Jarvis v. Manhattan Beach Mutiud Life Ins. Co. v. Forty-second
Co., 53 Hun (N. Y.) 362; 6 N. Y. St.,ete.R.R. Co., 74 Hun 505; 26 N.
Supp. 703, affirmed, 148 N. Y. 652; Y. Supp. 545, a later case in a lower
43 N. E. 68; 31 L. R. A. 776; 51 New York court, would seem to be
Am. St. Rep. 727; Western Md. inconsistent with the principal case.
740
§ 832-§ 1011] REISSUED CERTIFICATES § 920
members of the company.' Perhaps this decision was due in
part to unconscious political prejudice. At any rate, it would
hardly be a safe generalization that certificates issued for any
illegal purpose will be insufficient to raise an estoppel against
the company.
§ 919. Certificate issued to one of the Officers who sign it
on behalf of the Company. — The fact that one of the oflBcers
who sign a share-certificate is the person named therein as the
owner of the shares represented thereby is not deemed a sus-
picious circumstance, and will not prevent the raising of an
estoppel in favor of a bona fide purchaser who relies upon the
certificate.^ The certificate is held to be sufiiciently authenti-
cated by the signature of the other and disinterested officer, and
by the corporate seal. There is nothing to excite suspicion in
such a certificate as there is, according to many authorities, in
a note payable to one of the officers who execute it on behalf
of the company; for although officers should not ordinarily
enter into contracts with the corporation, yet officers are usually
shareholders and must have certificates as evidence of title.
§ 920. Certificate surrendered to Company and reissued with-
out its Authority. — Where a share-certificate which has been
surrendered to the corporation for cancellation is abstracted
from the company's safe and sold to a bona fide purchaser by
an employee who had access thereto, the company is not deemed
chargeable with negligence even though the failure to cancel
the certificates upon their surrender was a violation of the by-
laws: and hence the company is not estopped from denying
the title of the purchaser of the certificates to the shares pur-
porting to be represented thereby.'
' Dewing v. Perdicaries, 96 U. S. ton B. R. Co., 150 Mass. 406; 23
193. N. E. 109; 15 Am. St. Rep. 222; 5
Cf. Central R. R. & Banking Co. L. R. A. 849.
V. Ward, 37 Ga. 515. ,Cf. Havens v. Bank of Tarboro,
' Tihisv. Great Western Turnpike 132 N. Car. 214; 43 S. E. 639; 95
Road, 61 N. Y. 237; Cincinnati, etc. Am. St. Rep. 627; Ludle Dreyfus
Ry. Co. V. Citizens' Nat. Bank, 56 Mining Co. v. WiUard (Wash.), 89
Oh. St. 351; 47 N. E. 249; 43 Pac. 935, 938-940 (headnote in-
L. R. A. 777 (overruling Cincinnati, adequate).
■etc. Ry. Co. v. Third Nat. Bank, 1 Oh. ' Knox v. Eden Musee Co., 148
CSrc.a. 199); Western Md. R. R. Co. N. Y. 441; 42 N. E. 988; 51 Am.
■v.FranUin Bank, 60 Md. 36, 47-48. St. Rep. 700; 31 L. R. A. 779.
But see Farrington v. South Bos- Cf. supra, p. 739, n. 1.
741
§ 921 TRANSFER AND TRANSMISSION [ChAP. XV
§ 921. Informal Certificates. — A share-certificate may estop
the company, though not under the corporate seal, to the same
effect as if the seal were duly affixed.' The seal, though usual,
is not necessary in order to make the instrument a share-cer-
tificate.^ Indeed, although the certificate expressly state that it
shall not be deemed evidence of the holder's title, the estoppel
may nevertheless be raised.^ However, the more informal the
instrument be, and the less it resemble the ordinary and normal
share-certificate, the more difficult it will be to raise an estoppel.*
§ 922-§ 923. Estoppel raised otherwise than by Issue
of Share-Certificate.
§ 922. In general. — Whilst it would be too sweeping an
assertion to say that a corporation can be estopped from deny-
ing the title of a claimant to shares in no other way than by the
issue of a share-certificate, yet that is far the most usual ground
of estoppel. Other forms of representation sufficient to raise an
estoppel, there may undoubtedly be; but they are rarely met
with. Unless the company has issued a share-certificate, there
is apt to be very great difficulty in making out a case of estoppel.'
For instance, the regular payment of dividends to a claimant
of shares may have the effect of lulling him into security and
of leading him to believe his title to be unimpeachable, yet it
does not amount to a representation made by the company with
a view to being acted upon that his title is good, and conse-
quently is no foundation for an estoppel." Likewise, entering
a person's name in the register of shareholders does not, it is
submitted, amount to a representation upon which he is en-
titled to rely that his title needs no attention.' If, however, a
^ Mart V. Frontino Gold Mining Delaware Loan Co., 9 Houst. (Del.)
Co., L. R. 5 Ex. Ill (headnote 354; 32 Atl. 980, although not called
inadequate). a share-certificate would seem to
" Cf. supra, § 512. have been such in legal effect.
' Hart V. Frontino Gold Mining ° Foster v. Tyne Pontoon, etc. Co.,
Co., L. R. 5 Ex. Ill (headnote 63 L. J. Q. B. 50, 54.
inadequate). Cf. Hambleton v. Central Ohio
* See infra, § 923, as to "cer- B. R. Co., 44 Md. 551.
tification." ' Foster v. Tyne Pontoon, etc. Co.,
° The instrument relied upon to 63 L. J. Q. B. 50, 55.
raise an estoppel in Richardson v. But see Hart v. Frontino Gold
742
§ 832-§ 1011] CEETIFICATION § 923
person whq is contemplating dealing in certain shares in-
quires of the company/whether a certain share-certificate (which
*in fact is forged) is valid and whether a transfer endorsed
thereon is genuine, an affirmative answer will estop the com-
pany from asserting as against him that the certificate is
spurious and the supposed transferor and endorser a fictitious
person.^
§ 923. No Estoppel from Certification of Transfer. — The
"certification" of a transfer according to the English custom
cannot, at least as a general rule, be relied upon as foundation
for an estoppel.^ A certification, as explained above, is an in-
formal written statement given out by the company to the effect
that a share-certificate has been lodged with the company by
a certain person. But by reason of its informality and also be-
cause of the fact that it is not intended to pass from hand to-
hand or to be used like a share-certificate as evidence of the
holder's title, the House of Lords has Held that, like a bill of
lading, it is within the doctrine of Grant v. Norway, so that if
the company's secretary "certificates" a transfer when in fact
no share-certificate has been lodged with the company, his act
is deemed to be without the scope of his authority and will not
estop the company from showing that fact.' This decision of
the House of Lords is sometimes cited in the United States as
though it were applicable to ordinary share-certificates. This
is a fundamental error, and overlooks the whole point of the
case. The very ground of the decision was that the informal
"certification" could not, like a formal share-certificate, be re-
lied upon to raise an estoppel. Lord James of Hereford added
an express caution: "The judgment now given must not be
Mining Co., L. R. 5 Ex. Ill (head- 53 Hun (N. Y) 362; 6 N. Y. Supp.
note inadequate); Ashby v. Black- 703, affirmed, 148 N. Y. 652; 43
well, 2 Eden 299, Ambler 503; Cev^ N. E. 68; 31 L. R. A. 776; 51 Am.
tral R. R. & Banking Co. v. Ward, St. Rep. 727.
37 Ga. 515; Bank of England v. Cf. Fifth Ave. Bank v. Forty-
Cutter (1907), 1 K. B. 889 (where the second St., etc. R. R. Co., 137 N. Y.
Bank of England by permitting 231; 33N. E. 378; 33 Am. St. Rep.
registration of a forged transfer of 712; 19 L. R. A. 331; Mutual Life
India Stock was held to be estopped Ins. Co. v. Forty-second St., etc.
from denying the title of the trans- R. R. Co., 74 Hun (N. Y.) 505,
feree to the prejudice of a subse- 514-517; 26 N. Y. Supp. 545.
quent bona fide purchaser from " Supra, § 869.
him). ' George Whitechurch, Ld. v.
' Jarvis v. Manhattan Beach Co., Cavanagh (1902), A. C. 117.
743
§ 924 - TRANSFER AND TRANSMISSION [ChAP. XV
supposed to extend to certificates which are made, evidence of
title by the Act of 1862, and which are passed under the seal
of the company." *
§ 924^§ 944. RIOHTS AND LIABILITIES UPON PRES-
ENTATION OF TRANSFER FOR REGISTRATION.
§ 924-§ 939. LIABILITIES OP COMPANY.
§ 924^§ 930. Duties and Rights of Company upon
presentation of Transfer for Registration.
§ 924. Duty in general to register any valid Transfer when
presented. — When a valid transfer is duly presented for regis-
tration, the duty of the company is to register it and enter the
transferee's name in the list of shareholders.^ Unless expressly
conferred by statute or the company's regulations, neither the
directors nor the shareholders in a corporation have any dis-
cretion to decline to register a valid transfer.^ It makes no dif-
ference that the transfer may be very prejudicial to the interests
of the company.* For instance, the company cannot decline to
register a transfer because the transferor is indebted for calls
or otherwise, unless such a power is expressly conferred by the
regulations ; * nor because the transferee is engaged in a rival
' George Whitechurch, Ld. v. Mvllanphy Sav. Bank, 8 Mo. App.
Cavanagh (1902), A. C. 117, 134. 249; People ex rd. Bosqui v. Crock-
' As to the right to refuse to ett, 9 Cal. 112; Herdegen v. Cotz-
register a transfer which is insufS- hausen, 70 Wise. 589 ; 36 N. W. 385 ;
ciently stamped, see Maynard v. Herrick v. Humphrey Hardware Co.
Consolidated Kent Collieries Corp. (Nebr.), 103 N. W. 685. Cf. infra,
(1903), 2 K. B. 121. § 955.
' Weston's Case, 4 Ch. 20; GU- But see Ex parte Parker, 2 Ch.
bert's Case, 5 Ch. 559, 665 (semble) ; 685 (where the court refused to order
Imperial Starch Co., 10 Ont. L. R. registration of a transfer made to
22 (holding that express authority escape payment of certain calls the
to regulate transfers does not justify making of which the transferor had
a prohibition of transfers) ; Smith persuaded the directors to postpone
V. Bank of Nova Scotia, 8 Can. Sup. for the very purpose of getting an
Ct. 558. opportunity to effect the transfer).
* Tovmsend v. Mclver, 2 S. Car. A shareholder may, by agree-
25. ment — for example, by accepting
' Sargent v. Franklin Ins. Co., a share-certificate which states that
8 Pick. (Mass.) 90, 99-100; 19 Am. no transfer by a shareholder in-
Dee. 306; Heart v. State Bank, 2 debted to the company will be per-
Dev. Eq. (N. Car.) Ill; Carroll v. mitted — voluntarily give the com-
744 ••
§ 832-§ 1011] TIMES FOK REGISTRATION § 925
business.' In England, the transfer must be registered, although
it be made to a man of straw for the very purpose of escaping
liability as a shareholder,^ provided only it be not colorable
merely — that is, provided the transferor retain no interest in
the shares. In America, the company may always decline to
register a transfer made to a man of straw in contemplation of
insolvency on the part of the company for the purpose of escap-
ing liability; ' but even with us a company cannot lawfully re-
fuse to register a transfer merely because the transferee is in-
solvent.* Indeed, the fact that the transferee is an undischarged
bankrupt is no excuse for refusing to register the transfer.^ The
motive or purpose of a transfer is generally quite immaterial
so far as the duty of the company to register the transfer is con-
cerned.' If, however, a transfer is executed to a corporation
which has no corporate capacity to hold shares in another com-
pany, registration of the transfer may be refused.'
§ 925. Right to regulate Times at which Transfers may be
registered. — The company may, of course, refuse to receive
transfers for registration at unreasonable hours. For instance,
they are not bound to receive and register a transfer presented
at midnight. So, too, as to the days on which transfers can
be registered. They are not bound to register a transfer on
Sunday, or on a holiday, or on Saturday or Wednesday, or any
other day that they may deem inconvenient, so long as the right to
pany a contractual right to refuse to * Sutton v. English & Colonial
register a transfer. Reynolds ~ v. Produce Co. (1902), 2 Ch. 502.
Bank of Mt. Verroon, 6 N. Y. App. » Re Klaus, 67 Wise 401 ; 29
Div. 62; 39 N. Y. Supp. 623, N. W. 582; State ex ret. Page v.
affirmed short, 158 N. Y. 740; 53 Smith, 48 Vt. 266; Rice v. Rocke-
N. E. 1131. See also supra, § 707, feller, 134 N. Y. 174; 31 N. E. 907;
§ 708. 30 Am. St. Rep. 658; 17 L. R. A.
' Rice V. Rockefeller, 134 N. Y. 237; Townsend v. Mclver, 2 S. Car.
174; 31N. E. 907; 30 Am. St. Rep. 25; Senn v. Union, etc. Mercantile
658; 17L. R. A. 237. Co., 115 Mo. App. 685; 92 S. W. 507.
' Regina ex rel. Crea v. Midland Cf. infra, § 1217, as to transfers
Counties Ry., 15 Ir. Com. L. 525; for the purpose of increasing trans-
Weston's Case, 4 Ch. 20; Cawley & feror's voting rights. See also
Co., 42 Ch. D. 209. Baker's Appeal, 108 Pa. St. 510; 1
' That such a transfer, even if Atl. 78; 56 Am. Rep. 231.
registered, does not release the As to the power of a court of
transferor from liability as a share- equity to refuse to aid a transfer
holder, see supra, § 765. made for the purpose of wrecking
* Chouteau Spring Co. v. Harris, the company, see infra, § 934.
20 Mo. 382. ' See supra, § 878.
745
§ 926 TRANSFER AND TRANSMISSION [ChAP. XV
transfer is not, under color of such rules, substantially abridged.
Moreover, companies may, and often do, close their transfer
books temporarily for some reasonable time prior to a share-
holder's meeting,' or to the declaration of a dividend.^ If
this were not done, it might be difficult to determine who
should have the right to vote at the meeting or to receive the
dividend.
§ 926. Right to refuse to register Transfers after Insolvency of
Company. — Furthermore, when the company is insolvent and
after the directors have resolved, subject to the approval of a
shareholders' meeting, to go into liquidation, they may direct
that no transfers subsequently received shall be registered.^
Such a step is regarded as a reasonable preliminary to the
winding-up, and is proper in order to preserve the statiis in quo
for the benefit of creditors and to prevent all solvent shareholders
from assigning their shares and escaping liability. This rule,
which prevails in England as well as in the United States, is
in some ways a close approximation to the American doctrine
which, as stated above, precludes a shareholder from trans-
ferring his shares to a man of straw in contemplation of the
company's insolvency for the purpose of escaping liability.^
However, the company cannot refuse to register a transfer which
was made and presented for registration before the company's
insolvency, although after presentation of the transfer the com-
pany has become insolvent.^ Moreover, where a bank which
has suspended payment resolves not to go into liquidation but
to attempt to rehabilitate itself, it cannot refuse to register trans-
fers subsequently made by its shareholders."
§ 927. Right to delay for Consideration of Validity of Transfer.
— Moreover, a company is never bound to register a transfer
' Cook v. Carpenter (Pa.), 61 ' A. Mitchell's Case, 4 A. C. 548;
Atl. 804; 212 Pa. 177. N. Mitchell v. City of Glascow Bank,
Contra: Panton and the Cramp 4 A. C. 624.
Steel Co., 9 Ont; L. R. 3. Cf. Richmond v. Irons, 121 U. S.
' Jones v. Terre Haute, etc. R. R. 27, 56-59; 7 Sup. Ct. 788; Violet
Co., 57 N. Y. 196, 202 (semble — Consolidated Gold Mining Co., 80
where the company adopted the un- L. T., n. s., 684.
usual and, as the court held, unrea- * Supra, § 765.
sonable course of opening the books ' Nation's Case, 3 Eq. 77.
again for a day or two immediately ° Smith v. Bank of Nova Scotia,
before the declaration of the divi- 8 Can. Sup. Ct. 558.
dend).
746
§ 832-§ 1011] DUTIES OF CORPORATION § 928
forthwith upon its presentation : ' a reasonable delay for the
purpose of investigating the genuineness of the transfer is always
justifiable.^ Indeed, in England, the common practice seems
to be, upon presentation of a transfer, to post a letter of inquiry
to the address of the person named as transferor;' and not
until the expiration of a reasonable time for reply to this letter
or until an answer recognizing the transfer as genuine is actually
received, will the company proceed with registration. In the
United States such care and deliberation are not usually prac-
tised, but are nevertheless always permissible and proper. A
peremptory refusal to register, however, not placed upon the
ground of a desire to investigate the transfer, is not justifiable
because the company might properly have demanded time for
investigation.* Moreover, temporizing on the part of the com-
pany will not be tolerated; and evasive, dilatory answers to a
request to register a transfer will be equivalent to an absolute
refusal.^
§ 928. Right to demand Evidence of Validity — Production of
Transferor's Certificate, etc. — The company may also require
the person who presents a transfer for registration to adduce
reasonable evidence of its genuineness. Precisely what evidence
shall be required rests within the discretion of the ofiicers of the
company. To insist upon the production of the transferor's
share-certificate is certainly a reasonable -requirement ; ° and
indeed in most cases, at least in America, a surrender of the
certificate would be necessary in order to relieve the company
' Cf. Tucker v. MvUigan, 28 Vict. " Colonial Bank v. Whinney, 11
L. R. 1 (holding that under the com- A. C. 426; Societe G'enerale de Paris
pany's articles of association four- v. Walker, 11 A. C. 20; State ex rel.
teen days were to be allowed for Martin v. New Orleans, etc. R. R.
registering a transfer). Co., 30 La. Ann. 308; Supply Ditch
' Societe Generale de Paris v. Co. v. Elliott, 10 Colo. 327; 15 Pac.
Walker, 11 A. C. 20, 41; Ireland v. 691; 3 Am. St. Rep. 586; Isbdl v.
Hart (1902), 1 Ch. 522, 528-529 Grat/ftii^, 19 Colo. App. 508; 76 Pac.
(headnote inadequate). 650.
' See Barton v. London & N. W. Cf. Shropshire Union Rys., etc.
Ry. Co., 24 Q. B. D. 77; Johnston Co. v. Queen, L. R. 7 H. L. 496;
V. Renton, 9 Eq. 181. National Bank v. Lake Shore, etc.
' * Ottos Kopje Diamond Mines Ry. Co., 21 Oh. St. 221 (where
(1893), 1 Ch. 618. plaintiff claimed under an attach-
Cf. Ex parte Sargint, 17 Eq. 273. ment against an equitable owner of
' Goodwin v. Ottawa, etc. Ry. Co.,
13 Up. Can. C. P. 254.
747
§ 929 TRANSFER AND TRANSMISSION [ChAP. XV
from liability in case the certificate should subsequently turn
up in the hands of somebody else.' If the certificate is proved
to be lost or destroyed the company may be required to
register the transfer if a suflScient bond of indemnity be
given ; ^ but the directors are not guilty of a wrong in re-
fusing to accept a bond which they honestly deem insuffi-
cient,^ The company may require the transferor's certificate
to be not merely exhibited for a hasty inspection, but may
also require it to be deposited and left at the transfer office
for examination at leisure, before a transfer will be regis-
tered ; * but the failure to deposit the certificate cannot be
relied upon to excuse the refusal to register the transfer if
the refusal was placed exclusively on another ground/ That
the transfer fails to state the address of the transferor or
to specify the denoting numbers of the shares is no ground
for refusing registration, even where the regulations of the
company require all transfers to be "in the usual common
form." •
§ 929. Where Transferor is Trustee or other Fiduciary. — If
the shares are held in trust, reasonable evidence of the authority
of the trustee to transfer them may properly be required.'
§ 930. Right to demand Evidence of Acceptance by Trans-
feree. — A corporation before registering a transfer of shares
may properly demand satisfactory evidence of acceptance on
the part of the transferee, and cannot be compelled to register
a transfer to a person who refuses to accept the same even though
that refusal be a breach of a contract between him and the trans-
feror.* The necessity for acceptance on the transferee's part
' See supra, § 910. ' Letheby & Christopher (1904),
See also Smith v. Am. Coal Co., 1 Ch. 815 (headnote inadequate).
7 Lans. (N. Y.) 317. ' Bayard v. Farmers', etc. Bank,
' Colonial Bank v. Whinney, 11 52 Pa. St. 232.
A. C. 426, 437-438 (semble, per Cf. First Nat. Bank v. National
Lord Blackburn); Kinnan v. Forty- Broadway Bank, 156 N. Y. 459; 51
second St., etc. Ry. Co., 140 N. Y. N. E. 398; 42 L. R. A. 139;
183; 35 N. E. 498. Cf. supra, lissy v. Cook & Bernheimer Co., 58
§ 516. ^ N. Y.App. Div. 283; 68N. Y. Supp.
^ Sodete Generale de Paris v. 995.
Walker, 11 A. C. 20. As to what is sufficient evidente
* East Wheal Mining Co., 33 of an executor's authority to trans-
Beav. 119. fer shares, see infra, § 981.
' Bond V. Mount Hope Iron Co., ' Bussdl v. Easterbrook, 71 Conn.
99 Mass. 505; 97 Am. Dec. 49. 50; 40 Atl. 905.
748
§ 832-§ 1011] REMEDIES OF TRANSFEROR § 932
and the effect of a transfer registered without such acceptance
have been discussed above.'
§ 931. To whom Transfer should be presented for Registration.
— The demand that a transfer be registered should ordinarily
be made upon the officer or agent in charge of the transfer books.
A demand on the person in charge of the company's principal
office is prima facie sufficient.^ A demand outside the office may
have the same effect as if made within its four walls.^
§ 932- § 934. Remedies against Company for wrongfully
refusing to register Transfer.
§ 932. Remedies of Transferor. — If a corporation wrong-
fully refuses to register a transfer, the transferor has several
remedies. First, he may perhaps sue out a writ of mandamus
to compel the company to perform its duty by registering the
transfer.* Or, secondly, he may have the same relief upon bill
in equity.' Or, thirdly, he may treat the company's action as
a conversion of his shares, and sue for damages." If he pursue
the latter course, he is entitled to recover the value of the shares
at the time when the company wrongfully refused to register
the transfer.' If instead of claiming full damages the transferor
' See supra, § 872-§ 879. » Craig v. Hesperia, etc. Co., 113
' Commercial Bank v. Kort- Cal. 7; 45 Pac. 10; 54 Am. St.
right, 22 Wend. (N. Y.) 348, 350- Rep. 316; 35 L. R. A. 306; WUhers
351; 34 Am. Dec. 317. v. Lafayette County Bank, 67 Mo.
But of. Bridgeport Bank v. New App. 115; Humphreys v. Minnesota
York, etc. R. R. Co., 30 Conn. 231, Clay Co., 94 Minn. 469; 103 N. W.
272 (semble). 338.
' Dooley v. Gladiator, etc. Co. But see Penfold v. Charlevoix
(Iowa), 109 N. W. 864. Sav. Bank, 103 N. W. 572 (headnote
* Townsendv.McIver, 2 S.Ca,T.25. inadequate); 140 Mich. 126.
But see Rex v. Bank of England, As to whether an action ex con-
2 Doug. 525; Terrell v. Georgia R. tractu could be maintained, see Case
R., etc. Co., 115 Ga. 104; 41 S. E. v. Bank, 100 U. S. 446 (headnote
262; 2 Dos Passos on Stock Brokers inadequate).
and Stock Exchanges, 2d ed., 848- ' Ottos Kopje Diamond Mines
858._ (1893), 1 Ch. 618.
°"This relief may be barred by But see Penfold' v. Charlevoix
laches. See Gresham v. Island City Sav. Bank, 103 N. W. 572; 140
Savings Bank, 2 Tex. Civ. App. ^2; Mich. 126.
21 S. W. 556.
749
§ 933 TRANSFER AND TRANSMISSION [ChAP. XV
elect to retain the shares, he cannot subsequently recover more
than his actual damages, as in any other case of conversion of
a chattel where the plaintiff has retaken possession before the
case is tried. In one case, it was held that the transferor who
has lost a good sale by the company's refusal to register the
transfer, and who afterwards in consequence of a decline in the
price of the shares realized much less for them, cannot charge
the company with the difference, but that his damages must be
nominal merely.' The decision was placed upon the ground
that the company had no notice of the special terms of the first
contract of sale, and therefore under the rule in Hadley v. Baxerv-
dale could not be charged with special damages arising from
the frustration of that contract. Without venturing to question
the actual decision, one may be permitted to doubt whether
the court in assigning its reason for its conclusion did not over-
look the fact that the transferor's cause of action sounded in
tort for a conversion.
§ 933. Remedies of Person selling Shares under a Power. —
It has been held that a pledgee of shares with a power of sale in
case of default may sue the company for damages if the latter
refuses to register a transfer in pursuance of a sale made under
the power.' But in connection with this decision the fact should
be borne in mind that a pledgee of shares is not an actual share-
holder and that apart from authority serious question might be
raised whether he could maintain an action at law in his own
name against the company for refusing to recognize his power
of sale.
§ 934. Remedies o£ Transferee. — Upon principle, where
registration of a transfer is wrongfully refused,^ the transferee
has substantially the same remedies as the transferor against
the company, notwithstanding the fact that the very ques-
tion at issue is his right to be deemed a member. Thus, the
transferee may compel the company by mandamus * or bill in
' Skinner v. CUy of London Ma^ * Green Mount, etc. Co. v. BuUa,
Tine Ins. Corp., 14 Q. B. D. 882. 45 Ind. 1; Hair v. Burnett, 106 Fed.
' Case V. Bank, 100 U. S. 446. 280 (where the writ was against
' As to whether the transfer need the officers of the company) ; Cooper
actually be presented for registra- v. Dismal Swamp Canal Co., 6 N.
tion before the aid of the courts is Car. 195; Tovmsend v. Mclver, 2
invoked, see Richardson v. Long- S. Car. 25 ; Smith v. Automatic Pho-
mont Ditch Co., 19 Colo. App. 483; tog^aphic Co., 118 111. App. 649;
76 Pac. 546. State ex rd. Jurgens v. Consumers'
750
§ 832-§ 1011] REMEDIES OF TRANSFEREE
§934
equity ' to register the transfer. That the transfer was without
consideration does not diminish the transferee's rights,^ nor is the
Brewing Co., 40 So. 45; 115 La.
782.
But see contra: Shipley v. Me-
chanics Bank, 10 Johns. (N. Y.) 484;
Kimbail v. Union Water Co., 44
Cal. 173; 13 Am. Rep. 157; Ex
parte Firemen's Ins. Co., 6 Hill (N.
Y.) 243; Tobey v. Hakes, 54 Conn.
274; 7 Atl. 551; 1 Am. St. Rep.
114 (where the proceeding was
against the company's secretary);
State ex rd. Bornefidd v. Romhauer,
46 Mo. 155 (proceeding against the
company's president) ; Wilkinson
V. Providence Bank, 3 R. I. 22 ; Birm-
ingham Fire Ins. Co. v. Common-
wealth, 92 Pa. St. 72; Durham v.
Monumental Silver Mining Co., 9
Oreg. 41 ; Stackpole v. Seymour, 127
Mass. 104 (proceeding against com-
pany's president and treasurer);
Murray v. Stevens, 110 Mass. 95
(against president and secretary);
Freon v. Carriage Co., 42 Oh. St. 3d;
51 Am. Rep. 794 (where the shares
were not salable on the market);
Gblbraith v. People's Bldg. & Lodn
Ass'n, 43 N. J. Law 389.
Cf. Regina v. Liverpool, etc. Ry.
Co., 21 L. J. Q. B. 284 (where the
writ was refused because it was
thought that the applicant was not
proceeding bona fide) ; BvMerfly Ter-
rible Oold Mining Co. v. Brind
(Colo.), 91 Pac. 1101 (writ refused
because petition did not allege that
any by-laws there might be as to
transfers had been complied with);
Crawford v. Provincial Ins. Co., 8
Up. Can. C. P. 263 (mandamus re-
fused on the ground that registra-
tion was under the statutes appli-
cable to this company unnecessary
to perfect transferee's title) ; 2 Dos
Passos- on Stock Brokers and Stock
Exchanges, 2d ed., 848-858 (con-
taining an elaborate discussion of
the question).
The mandamus may run against
the corporation without making its
officers parties defendant. Good-
win V. Ottawa, etc. Ry. Co., 13 Up.
Can. C. P. 254.
' Rice V. RockefeUer, 134 N. Y.
174; 31 N. E. 907; 30 Am. St. Rep.
658; 17 L. R. A. 237; Cushman v.
Thayer Mfg. Jewelry Co., 76 N. Y.
365; 32 Am. Rep. 315; Feckheimer
V. Nat. Exchange Bank, 79 Va. 80;
Real Estate Trust Co. v. Bird, 90
Md. 229; 44 Atl. 1048; Buckmaster
V. Consumers' Ice Co., 5 Daly (N.
Y.) 313; Hubbard v. Bank of U. S.,
12 Fed. Cas. 777; Spencer v. James,
10 Tex. Civ. App. 327; 31 S. W.
540; 43 S. W. 556; Mechanics
Bank v. Seton, 1 Pet. 299; Scherck
V. Montgomery, 33 So. 507; 81 Miss.
426 ; Westminster Nat. Bank v. New
England Electric Works, 62 Atl.
971; 73 N. H. 465; 111 Am. St.
Rep. 637; Gould v. Head, 41 Fed.
240, 248 (bill maintained against
the company's officers without join-
ing the company itself as defendant).
Cf. Gresham v. Island City Sav.
Bank, 2 Tex. Civ. App. 52; 21 S. W.
656 (where the plaintiff was held to
be barred by the laches of the trans-
feror); Archer v. American Water
Works Co., 50 N. J. Eij. 33; 24 Atl.
508.
But see Cooper v. Dismal Swamp
Canal Co., 6 N. Car. 195.
Qucere, whether the transferor is
a necessary party to the bill. Cf.
Buffalo German Ins. Co. v. Third
Nat. Bank, 19 N. Y. Misc. 564; 43
N. Y. Supp. 550; Mechanics Bank
V. Seton, 1 Pet. 299, 306; Balti-
more Retort, etc. Co. v. Mali, 65 Md.
93; 3 Atl. 286; 57 Am. St. Rep.
304; Wadlinger v. First Nat. Bank,
209 Pa. 197; 58 Atl. 359; Thornton
V. MaHin, 116 Ga. 115; 42 S. E.
348.
^ Cushman v. Thayer Mfg. Jew-
elry Co., 76 N. Y. 365; 32 Am. Rep.
315; GUkinson v. Third Ave. R. R.
Co., 47 N. Y. App. Div. 472; 63 N.
751
§ 934 TRANSFER AND TRANSMISSION [ChAP. XV
illegality of the consideration any defence to the company.' But
if the transferee's object is to acquire control of the company for
the purpose of wrecking it, a court of equity may refuse to lend
him its aid.^ It is no answer to a bill in equity to compel exe-
cution of a transfer that the company has previously registered
another transfer of the same shares without requiring a sur-
render of the certificate, if the company and the transferee in
the last-mentioned transfer were all the time apprised of plain-
tiff's rights.' If the transferee neglects for a long period of
time to present the transfer for registration, he may be held to
be estopped, or barred by laches, from obtaining relief ; * but
there is also authority, supported by weighty reasons, for the
view that no mere delay in presenting the transfer should operate
as a bar.^ If the transferor has executed an agreement, of which
the transferee had notice, to assent to a plan for the winding-up
of the company or its consolidation with another corporation,
a court of equity in directing the transfer to be registered may
qualify its decree with a proviso that the transferee should be
bound by the agreement to the same extent as the transferor."
It would seem also that the transferee should have the right
to maintain an action for damages on the theory that the legal
title to the shares vested in him as soon as an immediate right to
be registered as shareholder accrued, and that the company by
refusing to recognize his legal title converted the shares, and
should be liable to him as in trover.' The transferee has also
Y. Supp. 792; Senn v. Union etc., ^ Barker v. Montana Gold, etc.
Mercantile Co., 115 Mo. App. 685, Co. (Mont.), 8'9 Pac. 66.
696 (headnote inadequate) ; 92 S. W. " Senn v. Union, etc. Mercantile
507. See supra, § 884. Co., 115 Mo. App. 685; 92 S. W. 507.
' Crenshaw v. Columbian Mining ' Ottos Kopje Diamond Mines
Co., UOMo. App. 355; 86 S. W. 260. (1893), 1 Ch. 618; Trust & Savings
' Gould V. Head, 41 Fed. 240; Co. v. Harm Lumber Co., 118 Mo.
Senn v. Union, etc. Mercantile Co., 447; 24 S. W. 129 (where the meas-
115 Mo. App. 685; 92 S. W. 507 ure of damages was considered);
(semble). Hussey v. Manufacturers', etc. Bank,
= Cushman v. Thayer Mfg. Jew- 10 Pick. (Mass.) 415; Wain's As-
elry Co., 76 N. Y. 365, 370; 32 Am. signees v. Bank of North America, 8
Rep. 315. S. & R. (Pa.) 73; 11 Am. Dec. 575;
* Newberry v. Detroit, etc. Iron Nicollet Nat. Bank v. City Bank, 38
Co., 17 Mich. 141. Minn. 85; 35 N. W. 577; 8 Am. St.
Cf. Pueblo Sav. Bank v. Richard- Rep. 643; Helm v. Svnggett, 12 Ind.
son (Colo.), 89 Pac. 799 (where a 194; German Union, etc. Ass'n v.
statute required the transfer to be Sendmeyer, 50 Pa. St. 67 (bearing
presented within sixty days). also on the measure of damages);
752
§ 832-§ 1011] REMEDIES OF TRANSFEREE
§934
been allowed to recover in assumpsit.' •The action may be main-
tained where the secretary of the company refuses to register the
transfer, although the transferee is the head ofiScer of the com-
pany and might perhaps have registered the transfer himself.^
The fact that the transfer was executed in pursuance of an illegal
gambling contract is no defence to the company when the objec-
tion has not been raised by the transferor.^ The statute of limi-
tations does not begin to run until the transferee is notified that
his title is disputed by the company.* The transferee may in
the same action recover any dividends that have accrued since
he became entitled and which have been wrongfully withheld
from him ; ° or, the transferee whose title the company has
wrongfully refused to recognize may in a separate action recover
any such dividends from the company without first compelling
the company, by bill in equity, to enter the transfer on its books.®
Mount Hotly, etc. Co. v. Perree, 17
N. J. Eq. 117 (semble); McLean v.
Medicine Co., 96 Mich. 479; 56 N.
W. 68 (an action on the case in
which it was held that only nominal
damages were recoverable); Mc-
Murrich v. Bond Head Harbour
Co., 9 Up. Can. Q. B. 333; Ral-
ston v. Bank of California, 112 Cal.
208; 44 Pac. 476; Rio Grande
Cattle Co. v. Burns, 82 Tex. 50; 17
S. W. 1043; Protection Life Ins. Co.
V. Osgood, 93 111. eS; Second' Nat.
Bank v. First Nat. Bank, 8 N. Dak.
50; 76 N. W. 504 (as to measure of
damages where transferee holds as
collateral security merely); Baltic
more City Pass. Ry. Co. v. Sewdl,
35 Md. 239; 6 Am. Rep. 402; Her-
rick V. Humphrey Hardware Co.
(Nebr.), 103 N. W. 685; Dooley v.
Gladiator, etc. Co. (Iowa), 109 N. W.
864 (value at time of refusal recov-
erable notwithstanding subsequent
offer to recognize plaintiff's rights).
' Sargent v. Franklirk, Ins. Co.,
8 Pick. (Mass.) 90; 19 Am. Dec.
306; Commercial Bank v. Kort-
right, 22 Wend. (N. Y.) 348; 34
Am. Dec. 317.
Cf. Rio Grande Cattle Co. v. Burns,
82 Tex. 50, 57; 17 S. W. 1043.
' McMurrich v. Bond Head Har-
bour Co., 9 Up. Can. Q. B. 333.
' Miller v. Houston City, etc. Ry.
Co., 55 Fed. 366; 5 C. C. A.
134.
* Cleveland, etc. R. R. Co. v.
Robbins, 35 Oh. St. 483.
' Baltimore City Pass. Ry. Co. v.
Sewell, 35 Md. 239; 6 Am. Rep.
402. The soundness of this de-
cision on this point may perhaps
be doubted because any dividends
that accrued prior to a demand
by the transferee were, so far as
the company was concerned, pay-
able to the transferor. See Cleve-
land, etc. R. R. Co. v. Robbins, 35
Oh. St. 483; Brisbane v. Dela-
ware, etc. R. R. Co., 94 N. Y. 204;
in which cases the company was
held not liable to the transferee and
holder of the certificate for paying
dividends to the transferor and per-
sons to whom by a subsequent
transfer the transferor assigned the
shares. Cf. infra, § 1369.
° Hill V. Atoka Coal, etc. Co., 21
S. W. Rep. 508 (Mo.) ; Robinson v.
Nat. Bank of New Beirne, 95 N. Y.
637.
VOL. I. — 48
753
§ 935 TRANSFER AND TRANSMISSION [ChAP. XV
§ 935^ § 939. LidhUily of Company for registering invalid
Transfer.
§ 935. Company in Dilemma when disputed Transfer presented
for Registration — Interpleader. — When a transfer of shares is
presented for registration, the company is in a strait betwixt two.
If the company refuses to register the transfer and the refusal
turns out to have been wrongful, the company may be held
liable, according to the principles stated above. If on the other
hand, it registers the transfer, and afterwards the fact transpires
that the transfer was forged or otherwise invalid, the company
is then liable to the true owner of the shares. Accordingly, if
the company is in doubt whether a transfer ought to be regis-
tered or not, a bill in the nature of a bill of interpleader may
be filed against the various claimants ; ^ but if the company
decides the question for itself and registers the transfer, it can-
not subsequently file a bill to require the claimants to interplead.*
§ 936. Right of Owner of Shares to enjoin Registration of In-
vaUd Transfer or to compel Company to cancel same if registered. —
The true owner of shares may enjoin the company from regis-
tering a void transfer;^ or if his name is improperly stricken
from the register in pursuance of a spurious or otherwise invalid
transfer, he may compel the company to restore his name, prob-
ably by a writ of mandamus at law, and certainly by bill in
equity.* The transferee or person whose name was substituted
' Cody V. PoUer, 55 Barb. (N. Y.) 57 Am. Dec. 520; Telegraph Co. v.
463. Davenport, 97 U. S. 369; Ashby v.
' Mount Holly, etc. Co. v. Ferree, BlackwM, 2 Eden 299, Ambler 503
17 N. J. Eq. 117 (headnote inade- (headnote inadequate); Pratt v.
quate); Chicago Edison Co. v. Fay, Taunton Copper Co., 123 Mass. 110;
164 111. 323, 330; 45 N. E. 534. 25 Am. Rep. 37; Blaisdell v. Bohr,
But see Cady v. Potter, 55 Barb. 68 Ga. 56; Chicago Edison Co. v.
(N. Y.) 463; Lakewood Gas Co. v. Fay, 164 111. 323; 45 N. E. 534;
Smith, 51 Atl. 152, 153 (headnote in- HUdyard v. South Sea Co., 2 P. Wms.
adequate); 62 N. J. Eq. 677 (where 76; Chew v. Bank of Baltimore, 14
one of the officers by abuse of his Md. 299; Herbert Kraft Co. v. Bank
authority had procured the issuance of Orland, 133 Cal. 64; 65 Pac. 143;
of a share-certificate to himself). McLaughlin v. Daily Telegraph
^ Reynolds v. Touzalin Imp. Co., Newspaper, 1 Comm. L. R. (Aust.)
87 N. W. 24; 62 Nebr. 236. 243 (where transferor was a lunatic);
* Johnston V. Renton, 9 Eq. 181 Ashton v. Heggerty, 130 Cal. 516
(headnote inadequate); Pollock v. (where it was said that the trans-
National Bank, 7 N. Y. 274, 276; ferees were necessary parties).
754
§ 832-§ 1011] REGISTRATION OF INVALID TRANSFER § 937
for that of the complainant may properly be joined as a co-
defendant to such a bill ; ' but he is not an indispensable party.^
In a New York case, it was said that if the company should be
unable to restore the shares, it might be compelled to pay their
"value; ' but it would seem always to be legally possible to restore
the shares by cancelling the entry of the transfer, and that if the
owner asks that form of relief he should have it.^ The statute
of limitations does not begin to run against the right to file such
a bill until a demand and refusal to restore the complainant's
name to the register.^
In addition to this relief, the true owner of the shares may
require the company to pay to him any dividends which were
payable while his name was erased from the register, and which
were paid to the person whose name was wrongfully substituted.*
Simple interest calculated from the time when the company
became assured of the invalidity of the transfer is also
recoverable.'
§ 937. Liability of Company to Owner in Damages for regis-
tering invalid Transfer. — As an alternative to these remedies
the true owner of the shares may elect to treat the registration
of the forged or otherwise invalid transfer as a conversion of his
shares by the company, and may accordingly sue the company
for damages.' So, if a trustee of shares is knowingly permitted
' Johnston v. Renton, 9 Eq. 181 ;" etc. R. R. Co. v. RobUns, 35 Oh. St.
SewaU V. Boston Water Power Co., 4 483.
Allen (Mass.) 277; 81 Am. Dec. ' Johnston v. Renton, 9 Eq. 181;
701 (where no objection on account SewaU v. Boston Water Power Co., 4
of the joinder was raised). Allen (Mass.) 277, 282-283 (head-
Cf. Chicago Edison Co. v. Fay, note inedaquate) ; 81 Am. Dec. 701 ;
164 111. 323, 330; 45 N. E. 534; Pollock v. National Bank, 7 N. Y.
Blaisdell v. Bohr, 68 Ga. 56. 274, 279 (headnote inadequate) ; 57
' Barton v. London & N. W. Ry. Am. Dec. 520; Telegraph Co. v.
Co., 38 Ch. D. 144. But see Astora Davenport, 97 U. S. 369; Telford,
V. Heggerty, 130 Cal. 516. etc. Co. v. Gerhab (Pa.), 13 Atl. 90
' Pollock V. National Bank, 7 N. (headnote inadequate); Ashby v.
y. 274; 57 Am. Dec. 520. Blackwell, 2 Eden 299; Ambler 503
* But see SewaU v. Boston Water (headnote inadequate).
Power Co., 4 Allen (Mass.) 277; 81 Cf. Brisbane v. Delaware, etc. R.
Am. Dec. 701 (where an alternative R. Co., 94 N. Y. 204.
decree for a restoration of the shares ' Chew v. Bank of Baltimore, 14
or for their value was passed). Md. 299, 320.
Cf. Telegraph Co. v. Davenport, ' SewaU v. Boston Water Power
97 U. S. 369. Co., 4 Allen (Mass.) 277; 81 Am.
» Barton v. North Staffordshire Dec. 701 ; Bank of Attica v. Manu-
Ry. Co., 38 Ch. D. 458; Cleveland, facturers', etc. Bank, 20 N. Y. 501;
755
§ 938 TRANSFER AND TRANSMISSION [ChAP. XV
by the company to transfer the shares in violation of his trust
to a purchaser or pledgee for value, the corporation is liable to
the cestui que truM} The liability of the company in damages
for registering a transfer cannot be determined upon a bill of
interpleader filed by the corporation for the purpose of ascer-
taining to which of two claimants dividends on the shares should
be paid.^ The wrongful registration of a transfer being a tort
in the nature of a conversion of the true owner's interest, it
follows that all persons who aid or incite the wrong are liable
as well as the company itself.^
§ 938. Liability of Company for failing to reqiiire Surrender of
Transferor's Certificate. — If the company registers a transfer
without exacting a surrender of the share-certificate, so that the
legal title to the shares is vested in the transferee, a cestui que
tru^t whose equitable interest in the shares has thus been cut
off by purchase for value may have an action against the com-
pany for damages.* Indeed, the broad principle is accepted in
America if not in England that if a company registers a transfer
without insisting upon a surrender of the share-certificate, it
will be liable to any hona fide holder of the certificate.^
§ 939. Estoppel of Owner to proceed against Company for reg-
istering invalid Transfer. — Any circumstances which would estop
the true owner of shares from disputing the title of a bona fide
purchaser claiming under an invalid transfer will also estop such
owner from holding the company liable for registering the trans-
fer in good faith in the ordinary course of business. This estop-
pel would prevent an action for damages against the company.
It would also prevent a bill in equity to require the issue of
Telegraph Co. v. Davenport, 97 U. S. As to liability for registering wrong-
369; Mayor, etc. of Baltimore v. ful transfers by executors, see infra,
Norman, 4 Md. 352 (demand and § 981.
refusal to restore plaintiff's name to ' Salisbury Mills v. Tovmsend,
register not condition precedent to 109 Mass. 115.
action for conversion) ; Mayor, etc. ' Greenleaf v. Ludington, 15 Wise.
of Baltimore v. Ketchurfi, 57 Md. 23 558; 82 Am. Dec. 698.
(holding that action may be main- * A'^. Y., etc. R. R. Co. v. Schuy-
tained without showing that claim- ler, 34 N. Y. 30, 81-86 (headnote
ant under invalid transfer is a bona inadequate). Cf. infra, § 989.
fide purchaser). Cf. Brisbane v. Delaware, etc. R.
But see Telford, etc. Co. v. Ger- B. Co., 94 N. Y. 204; Smith v. Am.
hah (Pa.), 13 Atl. 90. Coal Co., 7 Lans. (N. Y.) 317.
' Lowry v. Commercial, etc. Bank, ' See supra, § 910.
Taney 310. See infra, § 989, et seq.
756
§ 832-§ 1011] KEGISTKATION OF INVALID TRANSFER § 94]
new share-certificates to the owner if certificates have been pre-
viously issued honestly to a person claiming under the invahd
transfer and have come, or may have come, into the possession
of a holder for value whose title the company would be estopped
from denying.'
§ 940- § 941. Liability of Claimant under invalid Transfer
which is wrongfully registered.
§ 940. Liability to true Owner of the Shares. — Besides his
various remedies against the company, the owner of shares
whose name is stricken from the register of shareholders in pur-
suance of a forged or otherwise invalid transfer has valuable
rights against the transferee whose name is substituted for his
own.^ Presumably, he may sue him in an action in the nature
of trover for conversion of the shares.^ Certainly he may recover
from him any dividends paid to him by the company.* These
rights of course exist only in cases in which the true owner is
not estopped from denying the validity of the transfer in ques-
tion. It has been held that in an action of trover by an alleged
owner of shares against a person whose name has been regis-
tered in his stead, a judgment in an action by the plaintiff
against the corporation whereby the corporation was exonerated
from liability to the plaintiff for registering the transfer is admis-
sible in evidence to prove that the plaintiff is without title to the
shares claimed by him.'
§ 941. Liability to the Company. — Where the company has
treated a transferee as shareholder under a mistaken belief that
the transfer is genuine, any dividends paid to him as shareholder
may be recovered back by the company as money paid under
mistake of fact.' Of course, the transferee cannot be required
to repay the dividends to the corporation and also to pay the
' Pennsylvania R. B. Co.'s Ap- charged with notice of the invalidity
peal, 86 Pa. St. 80. of his title).
^ Cf. Blaisdell v. Bohr, 68 Ga. 56; But see O'Dwyer v. Verdon, 115
Harrison v. Pryse, Barnard. Ch. N. Y. App. Div. 37.
324. * Johnston v. Renton, 9 Eq. 181 ;
But see Pratt v. Taunton Copper Hildyardv.SouthSeaCo.,2P.WTaB.76.
Co., 123 Mass. 110; 25 Am. Rep. ' O'Dwyer v. Verdon, 115 N. Y.
37. App. Div. 37.
' Anderson v. Nicholas, 28 N. Y. » Foster v. Tj/ne Pontoon, etc. Co.,
600 (where the transferee was 63 L. J. Q. B. 50.
757
§ 942 TRANSFER AND TRANSMISSION [ChAP. XY
amount of them to the true owner of the shares. Recovery
by the company would be a bar to a claim by the true owner
against the transferee. And the amount recovered by the com-
pany from the transferee would be held in trust for the true
owner of the shares. Of course, if the company be estopped
from denying the validity of the transfer, as we have seen above
may be the case, the transferee would be under no liability to
the company. As the transferee or his agent usually presents
the transfer for registration, the transferee often incurs the lia-
bility attaching to any person who presents an invalid transfer
for registration — a matter which is considered below.*
§ 942. Liability of Person who presents invalid Transfer for
Registration. — A person who presents a transfer for registra-
tion impliedly asserts its genuineness. If the transfer is in fact
forged, he is liable to the company for any damages it may
suffer in acting thereon although he was quite ignorant of the
forgery ; ^ and if the transfer is executed by an agent or attorney,
he is liable unless the agent or attorney had in fact authority
to execute the same.' The same rules apply where the transfer
is invalid because of the lunacy or other incapacity of the
transferor.*
If after the registration of a forged transfer the shares are
assigned to a bona fide purchaser, and the person whose name
was forged calls upon the company to cancel the transfer and
issue another certificate to him, the company may give notice of
this claim to the person who presented the forged transfer, and
■ Infra, § 942. land v. Cutter (1907), 1 K. B. 889
^ Sheffield Corporation v. Barclay (where a person who introduced the
(1905), A. C. 392 (overruUng the transferor for the purpose of identi-
judgment of Lindley, J., in Anglo- fying him was held to warrant his
American Tel. Co. v. Spurling, 5 Q. identity with the registered owner).
B. D. 188) ; Starkey v. Bank of Eng- ' Clarkson Home v. Missouri, etc.
land (1903), A. C. 114; Clarkson Ry. Co., 182 N. Y. 47; 74 N. E. 571
Home V. Missouri, etc. Ry. Co., 182 (depending partly on a rule of the
N. Y. 47; 74N. E. 571; Boston, etc. stock exchange).
R. R. Co. V. Richardson, 135 Mass. * McLaughlin v. Daily Tde-
473; HUdyard v. South Sea Co., 2 graph Newspaper, 1 Comm. L. R.
P. Wms. 76 (disapproved in, and (Aust.) 243, 280 (headnote inade-
perhaps overruled by Ashby v. Black- quate).
well, Ambler 603); Bank of Eng-
758
§ 832- § 1011] REGISTRATION OF INVALID TRANSFER § 943
may require him to pay its costs in resisting the claim as well as
the amount which the company may have expended in pur-
chasing shares in the market in order to respond to the claim.'
So, if the company pays dividends to the transferee who presented
the forged transfer, and is afterwards compelled to cancel the
transfer, reinstate the true owner, and pay the dividends to
him, the amount of the dividends may be recovered back from
the person who presented the forged transfer.^ A fortiori, the
company may on bill in equity require the person who presented
the transfer to surrender the share-certificate which the com-
pany issued to him and the validity of which in the hands of a
bona fide purchaser the company would be estopped from
denying.^
The liability of the person who presents an invalid transfer
for registration is founded not merely on an implied warranty
of the validity of the transfer, in which case the statute of limi-
tations would begin to run forthwith, but rather upon an implied
contract of indemnity, so that the statute of limitations does not
begin to run until the company suffers a loss by being compelled
to respond to the true owner of the shares in damages or other-
wise.* On the other hand, where the company registers a forged
transfer of stock and the stock is afterwards transferred by the
forger to a bona fide purchaser, the company upon discovering
the forgery is not bound to strike out the forged transfer, and
remove the name of the bona fide purchaser from the register,
but may purchase stock in the market for the original owner
without waiting for the bona fide purchaser to set up a claim
by estoppel, and may thereupon sue' the person who presented
the forged transfer for indemnity against the loss sustained on
the purchase of the stock in the market.*
§ 943. Liability of Transferor in and about Registration of
Transfer. — As will be more fully explained below, to procure
the registration of a transfer is the part of the transferee rather
' Boston, etc. R. B. Co. v. Ricfi- ' Brown v. Howard Fire Ins. Co.,
ardson, 135 Mass. 473. 42 Md. 384; 20 Am. Rep. 90.
' Hildyard v. South Sea Co., 2 P. * Sheffield Corporation v. Barclay
"Wms. 76 (disapproved in and per- (1905), A. C. 392, 404-405 (headnote
haps overruled by Ashby v. Black- inadequate).
-well. Ambler 503); Hambleton v. « Bank of England v. Cutler
Central Ohio R. R. Co., 44 Md. (1907), 1 K. B. 889.
551.
759
§ 944 TRANSFEE AND TRANSMISSION [ChAP. XV
than of the transferor.' It follows that the transferor is under
no active duties in the matter. He is, however, bound to do
nothing to interfere with the transferee in his endeavor to have
the transfer registered. If at his instance the company refuses
or postpones the registration of the transfer, he is liable to the
transferee for all damages sustained in consequence of such
refusal or postponement.^ This liability is not strictly con-
tractual but is imposed by the law. Indeed, it sounds rather in
tort than in contract. Consequently, it may be enforced by a
person with whom the transferor, the defendant, has entered
into no direct contractual relations — for example, by the ulti-
mate purchaser of a blank transfer which has passed from hand
to hand and which the purchaser has filled up with his own
name, or by a person claiming under a transfer which is for
some reason defective but the validity of which the transferor
is estopped from denying.'
§ 944. Liability of Transfer Agent or Clerk. — The agent who
negligently or fraudulently registers an invalid transfer, or issues
a share-certificate to a person who is not entitled to it, is obviously
liable to the corporation for so doing. In most cases, the culp-
able agent is financially irresponsible, so that this remedy is
rarely resorted to. Sometimes, however, the corporation ap-
points some bank ^ or trust company its transfer agent, and
delegates to it the duty of registering transfers and issuing cer-
tificates. In such cases, the bank or trust company is liable
for the negligent or fraudulent registration of an invalid trans-
fer or for the issuing of a certificate to a person not entitled
thereto ; " even though due care may have been used in the
selection' of the sub-agent or clerk." Where the transfer agent's
sub-agent has engaged in a systematic fraudulent issue of cer-
tificates to persons who were not entitled to them, the entire
liability of the transfer agent may be enforced in one equity
suit without resorting to separate actions at law.' Such a bill
' Infra, § 971. ' Bank of Kentucky v. Schuylkill
' Hooper v. Herts (1906), 1 CIi. Bank, 1 Pars. Eq. Gas. (Pa.) 180.
549. " Bank of Kentucky v. Schuylkill
3 iJcoperv.fferis (1906), ICh. 549. Bank, 1 Pars. Eq. Gas. (Pa.) 180,
* As to the corporate power of a 239-244.
bank to act as such agent, see Bank ' Bank of Kentucky v. SchuylkiU
of Kentucky v. Schuylkill Bank, 1 Bank, I Pars. Eq. Gas. (Pa.) 180.
Pars. Eq. Gas. (Pa.) 180, 236-239.
760
§ 832-§ 1011] BY-LAWS § 946
may be filed even before the corporation has been compelled
to discharge any liability to the holders of the wrongfully issued
certificates.' On the other hand, the duty of the transfer agent
or clerk to register a valid transfer when presented is owing to
his principal alone; and for mere nonfeasance in refusing or
neglecting to register a valid transfer when presented, the trans-
fer agent is not liable in damages either to the transferor or
transferee.^
§ 945-§ 962. BY-LAWS and express regulations respecting
TRANSFERS.
§ 945. Validity of By-laws relating to Transfers. — The by-laws
and conventional regulations of incorporated companies generally
contain provisions relating to transfers of shares. iThe validity
of these provisions is sometimes open to dispute; but with such
questions, which are discussed in another place,^ we are not now
concerned. For present purposes, the validity of the regula-
tions may be assumed; and we shall accordingly confine our-
selves to questions as to their construction, operation, and ejBPect,
assuming them to be valid.
§ 946-§ 948. Regulations as to Form or Manner of Transfers.
§ 946. Mandatory Regulations. — Regulations respecting the
form or manner of transfers may of course be either mandatory
or directory. General rules for determining whether any par-
ticular provision should be construed to be the one or the other
are apt to be misleading rather than helpful. A provision that
transfers must be by deed has been held to be mandatory, so
as to invalidate an unsealed transfer.* So a provision that trans-
fers shall be executed by both transferor and transferee will pre-
vent a transfer executed by the transferor only from passing a
' Bank of Kentucky v. Schuylkill shares by refusing to register trans-
Bank, 1 Pars. Eq. Cas. (Pa.) 180, fer not sustainable).
244-245. Cf. Cooley v. Curran, 104 N. Y.
' Dunham v. City Trust Co., 101 Supp. 751.
N. Y. Supp. 87; Cooley v. Curran, ' See supra, § 706-§ 711.
104 N. Y. Supp. 424 (action against * Powell v. London & Provincial
company's president for converting Bank (1893), 2 Ch. 555; Bishop v.
Globe Co., 135 Mass. 132.
761
§ 947 TRANSFER AND TRANSMISSION [ChAP. XV
complete title.' Similarly, a provision that transfers shall be
signed in the presence of an officer of the company or of two
witnesses has been held to invalidate a transfer not so attested.'
§ 947. Directory Regulations. — On the other hand, a pro-
vision that a transfer should contain a true statement of the con-
sideration upon which it was executed has been thought to be
directory merely.^
§ 948. Regulations that Shares shall be transferable only on
Company's Books. — A very common provision in American
by-laws is that shares shall be transferable only on the books
of the company. This provision is not treated separately in this
work, because the transfer books of a corporation play so im-
portant a role in the matter of transfers of shares that it seemed
inadvisable to relegate the consideration of their function to a
sub-heading under the subject of by-laws and regulations affect-
ing transfers of shares. Moreover, it has seemed to the writer
that the actual effect of a regulation that shares shall be trans-
ferable only on the company's books is comparatively slight;
that is to say, by statute or custom every incorporated company
is required to keep a hst or roll of its shareholders, and even
where the regulations of the company do not expressly provide
that transfers of shares shall be made only by entry on the
company's books, the importance to a transferee of seeing
that his name is properly entered on the company's books is
only slightly less.
§ 949- § 950. Waiver by Company of Regulations intended
for its Benefit.
§ 949. In general. — Even where a provision regulating
transfers is mandatory rather than directory, nevertheless if
it be intended solely for the company's benefit or protection,
non-compliance may be waived, and will be deemed to have
been waived if the company with knowledge of the irregularity
proceeds to register the transfer. Thus, although a provision
that transfers shall be executed by both parties be mandatory
and, not merely directory, yet if the company accept as valid
a transfer executed by the transferor only, and recognize the
' Ortigosa v. Brown, 38 L. T. 145. ' Powell v. London & Provincial
' Dane v. Young, 61 Me. 160. Bank (1893), 2 Ch. 555, 560 (semble).
762
§ 832-§ 1011] WAIVER OF RESTRICTIONS § 951
transferee as shareholder, the irregularity will be deemed waived
and cured. ^ So a provision that every transferee of shares must
sign the by-laws of the company may be waived by issuing a
share-certificate to the transferee and paying him dividends.^
§ 950. Waiver of Restrictions on Shareholder's Right of
AUenation. — This same principle applies to restrictions upon
the right of a shareholder to transfer his shares: they may be
waived by registering the transfer and treating the transferee
as a shareholder.^ For instance, a provision that an ofBcer of
the company shall not alienate his qualification shares does not
invalidate a transfer made with company s consent.* So, a
statutory provision that no shareholder who is indebted for
calls upon his shares shall be entitled to transfer any of his
shares, does not invalidate such a transfer if the company waives
the irregularity by registering the transferee as a shareholder,^
unless the registration of the transfer was done by mistake, in
which case it may be stricken out and the transferor's name
restored." And a fortiori if the registration of the transfer be
procured by fraudulent mis-representation of the transferor,
the company may strike out the name of the transferee and
restore that of the transferor.' Moreover, a provision that no
officer of a bank shall hold shares in the bank without the con-
sent of the directors is waived by paying dividends annually
to an officer who has purchased shares, even though the transfer
when presented for registration was never actually registered.'
§ 951-§ 952. Regulations authorizing Company to reject
Transfers deemed inimical to its Interests.
§ 951. Whether By-laws prescribing such Regulations are
Valid. — A common provision in England vests in the company
' Taurine Co., 25 Ch. D. 118 Ass'n v. Griffiths, 1 Cabab6 & Ellis,
(semble). 15.
Cf. Burnes v. Pennett, 2 Ho. Lds. « Ex -parte LitUedale, 9 Ch. 257.
Cas. 497. Cf. Chambersburg Ins. Co. v.
' People's Home Savings Bank Smith, 11 Pa. St. 120; Watson v.
v. Richard, 139 Cal. 285; 73 Pac. £aZes, 23 Beav. 294. See also infra,
858. § 957.
' People's Home Savings Bank v. " Anderson's Case, 8 Eq. 509.
Richard, 139 Cal. 285; 73 Pac. 858. ' WUliams' Case, 9 Eq. 225 n.;
Cf. Royal British Bank, 26 L. J. Payne's Case, 9 Eq. 223.
Ch. 545. ' Earle v. Coyle, 97 Fed. 410; 38
* London & Westminster Supply C. C. A. 226.
763
§ 952 ■ TRANSFER AND TRANSMISSION [ChAP. XV
or its directors a power of rejecting a transfer that they may
deem prejudicial to the interests of the corporation. Great
doubt exists whether such a provision can in America be enacted
by mere by-law.^ Certainly, however, the law ought to provide
some method by which a corporation could be formed subject
to such a regulation. The business of many corporations is
such that unless entire harmony prevails in the management
the interests of all the members may suffer. If the organizers
of a corporation desire to form the company upon a plan which
will prevent any member from alienating his shares tp a person
whom the other shareholders may not deem a desirable asso-
ciate, the law should furnish the means by which they can do
so. It is a reproach to the jurisprudence of the United States
if such a plan is not feasible without the aid of special legislation.
§ 952. Operation and EfEect of such Regulations where Valid. —
The effect of a valid regulation requiring transfers to be ap-
proved by the directors of the company is that no transfer is
valid at law — the rule in equity will be considered presently —
until it has received such approval.^ The approval may, how-
over, be implied from the fact of registration.^ A court of law
may by mandamus compel the directors to consider a transfer,*
but cannot control the exercise of their discretion even though
they act arbitrarily, unfairly, and oppressively.* A court of
equity, however, if the rejection of the transfer be shown to be
arbitrary and not bona fide, has power to override the determina-
tion and to direct that the transfer be registered as if it had been
approved instead of being rejected."
Even in equity, the company's rejection of the transfer is con-
clusive, however erroneous it may be, unless bad faith be proved.^
Moreover, the decision reached by the company in rejecting
the transfer is presumed to have been reached bona fide} This
' Supra, § 706-§ 711. Bell Bros. 65 L. T. 245; Robinson
2 Nicol's Case, 3 De G. & J. 387, v. Chartered Bank, 1 Eq. 32.
433 (semble) ; Ex parte Penny, 8 Ch. ' Yuruari Co., 6 Times L. R. 119;
446. Hannan's King Mining Co., 14
' Ex parte Bentinck, 1 Megone 23. Times L. R. 314; Ex parte Penny,
But see Battie's Case, 39 L. J. Ch. 8 Ch. 446.
391. But cf. Hubbard v. Manhattan
* Ex parte Penny, 8 Ch. 446 Trust Co., 87 Fed. 51, 67-58; 30
(semble). C. C. A. 520.
' Ex parte Penny, 8 Ch. 446. ' Hannan's King Mining Co., 14
« Ex parte Penny, 8 Ch. 446; Times L. R. 314.
764
§ 832- § 1011] REQUIREMENT OP APPROVAL § 952
IS true even where no reasons are assigned by the company for
the rejection ' although the right to reject a transfer is confined
to certain named grounds.^ If, however, reasons for rejecting
the transfer are assigned, the reasons so specified must be ade-
quate and furnish some just ground for the rejection ; for other-
wise a court of equity will deem the rejection unjustifiable,
treating the rejection of the transfer for certain specified rea-
sons as equivalent to an approval in all other respects — an
approval subject to an inadmissible objection.^ It makes no
difference, therefore, that another ground for rejecting the
transfer can be suggested upon which if the directors had
acted, the court would not have felt justified in overruling their
determination.* A refusal to approve any transfer at all, thus
virtually making the shares inalienable, is of course deemed
arbitrary.' So, an objection to a person for whom the transferee
is acting as trustee has been held to be insufficient cause for
rejecting the transfer; ' but this decision, if it be law, certainly
greatly reduces the advantages to the company from a require-
ment that transfers shall be subject to the approval or rejection
of the corporation. In Australia, a refusal to approve the trans-
fer because of a belief that the transferee would vote for a cer-
tain person as director has been held unjustifiable ' — a decision
which likewise greatly reduces the value of the company's dis-
cretionary power. A refusal to register a transfer because of
a desire to keep the control of the company in a particular family
is unjustifiable.' And a refusal because the transferor is in-
debted to the company is also improper under a general power
to reject any transfer; ° for the effect would be, virtually, to
' Ex parte Penny, 8 Ch. 446; ° Robinson v. Chartered Bank, 1
Yuruari Co., 6 Times L. R. 119. Eq. 32; New Lamhton Land & Coal
But see New Lamhton Land & Co. v. London Bank, 1 Comm. L. R.
Coal Co. V. London Bank, 1 Comm. (Aust.) 524.
L. R. (Aust.) 524; Alfred Shaw & « Bell Bros., 65 L. T. 245, 248;
Co., 21 Vict. L. R. 599 (where the New Lamhton Land & Coed Co. v.
court drew unfavorable inferences London Bank, 1 Comm. L. R. (Aust.)
from the refusal of the directors on 524, 545.
cross examination to disclose their Cf. Robinson v. Chartered Bank, 1
reasons). Eq. 32; Moffat v. Farquahar, 7
' Coalport China Co. (1895), 2 Ch. D. 591.
Ch. 404. ' Alfred Shaw & Co., 21 Vict.
' Bell Bros., 65 L. T. 245, 249. L. R. 599 (headnote inadequate).
* Bell Bros., 65 L. T. 245, 248- ' Bell. Bros., 65 L. T. 245.
249. " Pinkett v. Wright, 2 Hare 120;
765
§ 953 TRANSFER AND TRANSMISSION [ChAP. XV
give the company a lien on the shares for the indebtedness of
the holder — a result which requires an express regulation.^
The justifiableness vel non of a rejection of a transfer must be
judged according to facts existing at the time the transfer is
presented to the company, and cannot be affected by any sub-
sequent occurrences.''
The company may rescind an approval of a transfer which
was procured by fraudulent misrepresentations of the trans-
feror ^ or by bribing the directors of the company ; * but it seems
that the mere fact that the transferor is a member of the board
of directors and participates in the approval of the transfer will
not invalidate the approval.*
An approval of a transfer in consideration of the transferor's
guarantee of any calls that might be payable by the transferee
is valid so that the transferor is no longer liable as a shareholder,
although he may be liable upon his contract."
Sometimes the right to reject a transfer is conditional upon
a substitute being found who will take the shares at the same
price as the proposed transferee; and in such a case the com-
pany has no right to reject a transfer without first finding a
substitute." Sometimes, if a transfer is rejected the directors
are bound to purchase the shares on behalf of the company;
but even under such a regulation they cannot be required to
purchase the shares if the company has no funds available for
the purpose.*
§ 953. Regulations authorizing Directors to prescribe Form of
Transfers. — Sometimes, the board of directors without being
invested with any discretion absolutely to reject a transfer, are
empowered to prescribe the form of transfer. Under such a
New Lambton Land & Coal Co. v. * Bennett's Case, 5 Pe G. M. & G.
London Bank, 1 Comm. L. R. (Aust.) 284.
524, 544. Cf. Eyre's Case, 31 Beav. 177.
' See infra, § 954, § 955. ' Ex parte Littledale, 9 Ch. 257.
' Cawley & Co., 42 Ch. D. 209; See infra, § 1602.
Ex parte Rudolph, 11 W. R. 806. « Harrison's Case, 6 Ch. 286.
Cf. Nation's Case, 3 Eq. 77. ' Chappell's Case, 6 Ch. 902.
'Williams' Case, 9 Eq. 225n; » Ta/i v. ifomsore, 10 Hare 489.
Payne's Case, 9 Eq. 223.
Cf. BaUie's Case, 39 L. J. Ch. 391.
766
§ 832-§ 1011] transferor's indebtedness § 954
power, the directors cannot arbitrarily reject a form of transfer
which they have approved in other cases.'
§ 954. Regulations authorizing Directors to decline to register
Transfer by Shareholder who is indebted to the Corporation. — ■
Sometimes, provisions are found entitling the company to de-
cline to allow a transfer in any case where the transferor is in-
debted to the corporation. Such a provision does not render
a transfer by a shareholder who is indebted to the company
absolutely void; for the transferor may pay off the indebted-
ness, and then the transfer should be registered.^ Hence a trans-
fer by a shareholder who was indebted to the company passed
all his interest, and removed his commoil law incompetency
to testify in an action to which the corporation was party.*
Even where the regulations provide that a transfer disapproved
by the directors shall be void, a refusal to register a transfer on
the ground that the transferor is indebted to the company is
not such a disapproval as will render the transfer utterly void.*
A provision authorizing the company to decline to register a
transfer by a shareholder who is indebted to it, applies to an
indebtedness of any kind and not merely to a debt for calls or
some other debt due by the transferor qua shareholder;'^ but
does not apply to the potential hability for future calls which
have not been actually made at the time of the transfer." The
point of time at which the indebtedness must exist is the time
of presentation of the transfer for record and not the time of
execution of the transfer.' If the shareholder is indebted to the
• Poole V. Middleton, 29 Beav. etc. Co., 4 Ala. 652 (debt due by
646. firm of which shareholder was
' Ex parte Harrison, 28 Ch. D. member).
363. Cf. Mobile Mut. Ins. Co. v. Cid-
' Bank of Utica v. Smalley, 2 lorn, 49 Ala. 558 ; Sproid v. Standard
Cow. (N. Y.) 770, 778; 14 Am. Giass Co., 201 Pa. 103; 50 Atl. 1003
Dec. 526. (a claim against an officer for mis-
* Ex parte Harrison, 28 Ch. D. feasance). See also infra, § 960.
363. See supra, § 952. ' Cawley & Co., 42 Ch. D. 209;
= Ex parte Stringer, 9 Q. B. D. Ex parte Rudolph, 11 W. R. 806;
436; Nat. Bank v. Rochester Turn- Hall v. U. S. Ins. Co., 5 Gill (Md.)
ftierCo., 172Pa. St.6r4; 33 Atl. 748; 484.
Kahn v. Bank of St. Joseph, 70 Mo. Contra : Pittsburgh, etc. R. R. Co.
262; Mechanics Bank v. Barp, 4 v. Clarke, 29 Pa. St. 146.
Rawle (Pa.) 384 (where the debt in See also cases cited infra, § 960.
question was owing by a firm of Cf. Re Bachman, 2 Fed. Cas. 310.
which the shareholder was a mem- ' Michigan Trust Co. v. State
ber); Cunningham v. Ala. Life Ins., Bank, 111 Mich. 306; 69 N. W. 645.
767
§ 955 TRANSFER AND TRANSMISSION [ChAP. XV
company, and the company is indebted to the shareholder on
another and entirely separate account, the company may de-
cline to register a transfer even though upon a full settlement
of accounts a balance would have been due to the shareholder.'
§ 955-§ 961. Liens on Shares for Debts of Holders
to the Company.
§ 955. When Lien exists. — Sometimes, the company has a
lien upon its several shares for debts due to it by the holders
thereof. Such a lien does not exist apart from some express
provision either in some statute or in the company's regula-
tions.^ It has been said that a statute giving the company a
lien upon its shares for debts of the holders should be strictly
construed.' It may be argued that a lien is something more
than a mere power to decline to register a transfer by a share-
holder who is indebted to the company; and consequently it
is held in England and in Ireland that a provision vesting such
a power in the company does not create a lien upon the shares.*
But the American cases in which the point has arisen generally
hold that such a provision does give the company a lien.' It
has been held that no lien is created by a provision for for-
feiture of the shares in case the shareholder fails to pay a debt
owing to the company." On the other hand, a provision that,
' Mechanics Bank v. Earp, 4 ' Kingstown Yacht Club (1888), 21
Rawle (Pa.) 384, 392. L. R. Ir. 199; Duniop v. Dunlop, 21
" Merchants' Bank v. Shouse, 102 Ch. D. 583.
Pa. St. 488; Heart v. State Bank, 2 ' Kenton Ins. Co. v. Bowman, 84
Dev. Eq. (N. Car.) Ill; Mass. Iron Ky. 430; 1 S. W. 717; Farmers'
Co. V. Hooper, 7 Gush. (Mass.) 183; Bank of Maryland's Case, 2 Bland
Lankershin Ranch Land, etc. Co. v. (Md.) 394; Wetherdl v. Thirty-first
Herberger, 82 Ca.\. 600; 23 Pac. 134; Street, etc. Ass'n, 153 111. 361; 39
Gemmell v. Davis, 75 Md. 546; 23 N. E. 143.
Atl. 1032; 32 Am. St. Rep. 412; Cf. Brent v. Bank of Washington,
Steamship Dock Co. v. Heron's 10 Pet. 596 (headnote inadequate);
Admx., 52 Pa. St. 280; Herrick v. Tetev. Farmers', etc. Bank, iBiewst.
Humphrey Hardware Co. (Nebr.), (Pa.) 308; Sproul v. Standard Glass
103 N. W. 685. Co., 201 Pa. 103, 109-110; 50 Atl.
Cf. Re Rowe (1904), 2 K. B. 489. 1003.
As to the validity of by-laws But see Brent v. Bank of Wash-
creating such liens, see supra, § 706- ington, 2 Cranch C. C. 517.
§ 711. ' DurUop V. Durdop, 21 Ch. D.
' Boyd V. Redd, 120 N. Car. 335; 583; Dearborn v. Washington Sav.
27 S. E. 36; 58 Am. St. Rep. 792. Bank, 18 Wash. 8; 50 Pac. 575;
768
§ 832-§ 1011] LIENS ON SHARES § 956
in case of non-payment of the debt, the company may sell the
debtor's shares and retain the amount of the debt out of the
proceeds does create a lien.^
§ 956. Nature and Effect of Lien in general. — A lien upon
shares for a debt due by the holder to the company is an equi-
table charge, and as such subject, in general, to all the rules,
whether prescribed by statute or existing apart from statute,
applicable to charges of that description. Hence, where the
company has a lien upon its shares for the debts of the holder
a loan to a shareholder is deemed a loan upon security.' So,
the lien gives priority in respect to th^ shares covered thereby
even over a debt owing to the sovereign.^ Moreover, a surety
of the shareholder, on paying the debt, is entitled to be sub-
rogated to the company's lien.' The existence of the lien may
be offered in evidence in reduction of damages in a suit against
the company by the shareholder in the nature of an action for
conversion of the shares." If the company at the time of making
the loan has notice of another existing equitable charge upon
the shares, the company's lien will be postponed to the prior
charge.' If the lien be created by statute, even a bona fide pur-
Small v. Herkimer Mfg. Co., 2 N. Y. ropolitan Nat. Bank, 2 Biss. 527;
330. First Nat. Bank v. Hartford, etc. Ins.
But see Be Jennings (1851), 1 Ir. Co., 45 Conn. 22.
Ch. 236; Great Northern Ry. Co. v. * Brent v. Bank of Washington,
Kennedy, 4 Exch. 417, 425. 10 Pet. 596.
' Deering v. Hibernian Banking ° Klopp v. Lebanon Bank, 46
Co., 16 W. R. 578; Arnold v. Suf- Pa. St. 88; Petersburg, etc. Ins. Co.
folk Bank, 27 Barb. (N. Y.) 424. v. Lumsden, 75 Va. 327; Re Mor-
But see Dearborn v. Washington rison, 10 N. B. R. 105 (semble);
jSown^sBanS;, 18Wash.8;50Pac.575. Young v. Vough, 23 N. J. Eq.
^ Everitt w.. Automatic Weighing 325.
Machine Co. (1892), 3 Ch. 506. But of. Cross v. Phcenix Bank, 1
Cf. Farmers' Bank of Maryland's R. I. 39. See also West Branch Bank
Cd,se, 2 Bland (Md.) 394. v. Armstrong, 40 Pa. St. 278.
But see German Security Bank v. ° Arnold v. Suffolk Bank, 27
Jefferson, 10 Bush (Ky.) 326, hold- Barb. (N. Y.) 424.
ing that the company after exhaust- ' Bradford Banking Co. v. Briggs,
ing the shares cannot prove in com- 12 A. C. 29 ; Nesmith v. Washington
petition with the debtor's general Banfc, 6 Pick. (Mass.) 324; Birming-
creditors until the latter have been ham Trust, etc. Co. v. La. Nat. Bank,
made equal out of the general estate. 99 Ala. 379 ; 13 So. 112 ; 20 L. R. A.
Sed guoere. 600 ; Curtice v. Crawford County
' National Bank of Wales (1899), Bank, 118 Fed. 390.
2 Ch. 629 (affirmed sub nom. Dovey See also infra, § 960.
V. Cory (1901), A. C. 477).
Cf. Evansmlle Nat. Bank v Met-
VOL. I. — 49 769
§ 956 TRANSFER AND TRANSMISSION [ChAP. XV
chaser of the shares claiming under a transfer endorsed on the
share-certificate would take subject to the lien ; '■ for he has
constructive notice. But where a mere by-law of an American
corporation attempts to create a lien, it will not, according to
the prevalent view, be valid as against a bona fide purchaser
of the certificate, even if the by-law have any effect at all — a
point on which the authorities are not unanimous.^ A purr
chaser of the shares at a sale under an execution against the
shareholder takes subject to the lien.' A lien created by statute
for a particular class of debts will have priority over a lien for
all debts without distinction created by the by-laws.* The
company's lien is a general one; and hence if the company
takes other security, it must exhaust the same before resorting
to the shares.* The lien protects all debts owing* to the com-
pany equally, without regard to the date when they were con-
tracted. Hence a surety for the debt first contracted has no
equity, it has been held, to have the shares applied to the dis-
charge of that debt rather than of other debts subsequently
contracted by the shareholder ; ° but it is submitted that a differ-
ent decision would have been more just to the surety without
in any way diminishing the right of the corporation and with-
out doing violence to any rule of law. If some of the shares are
assigned to a bona fide purchaser, although he takes subject to
' Farmers' Bank of Md. v. Igle- mile, 68 Ark. 234; 57 S. W. 257;
hart, 6 Gill (Md.) 50; Dorr v. Life Mechanics Bank v. Merchants Bank
Ins. Clearing Co., 71 Minn. 38; 73 45 Mo. 513; 100 Am. Dec. 388;
N. W. 635; 70 Am. St. Rep. 309; Tuttte v. Walton, 1 Ga. 43; Farmers',
First Nat. Bank v. Hartford, etc. Ins. etc. Bank v. Haney, 87 Iowa 101 ;
, Co., 45 Conn. 22, 35-36; Bohmer v. 54 N. W. 61.
> City Bank, 77 Va. 445 ; Union Bank Aliter where the company's debt
V. Laird, 2 Wheat. 390 (where the had not been contracted at the time
lien was created by a special act of of the levy : Pitot v. Johnson, 33 La.
incorporation); Hammond v. Hast- Ann. 1286; Geyerlv. Western Ins. Co.,
ings, 134 U. S. 401; 10 Sup. a. 727 3 Pittsb. (Pa.) 41.
(where the lien was created by a Cf. Bryon v. Carter, 22 La. Ann.
general statute); Wright Lumber 98; Owens v. Atlanta Trust, etc. Co.,
Co. V. Hixon, 105 Wise. 153; 80 122 Ga. 521; 50 S. E. 379 (where the
N. W. 1110, 1135; Reese v. Bank of purchaser at the execution sale had
Commerce, 14 Md. 271 ; 74 Am. Dec. notice of the company's claim).
536; Curtice v. Crawford County * Petersburg, etc. Ins. Co. v. Lums-
Bank, 110 Fed. 830. den, 75 Va. 327.
' See supra, § 706. « Dunlop v. Dunlop, 21 Ch. D.
^ Oliphint V. Bank of Commerce, 583.
60 Ark. 198; 29 S. W. 460; Spring- « Cross v. Phcenix Bank, 1 R. I.
field Wagon Co. v. Bank of Bates- 39.
770
§ 832-§ 1011] LIENS ON SHARES § 957
the company's lien (unless the company waive the lien by regis-
tering the transfer or otherwise), still the effect of the assign-
ment, according to the doctrine of marshalling, is to charge the
lien in the first instance upon the shares retained by the trans-
feror, to the exoneration of the transferred shares ; ' and this
rule applies even as against judgment creditors of the transferor
who have levied upon the shares remaining in his name.^ Where
the lien is for the full value of the shares, the company may, it
has been held, upon getting the share-certificate in its posses-
sion, lawfully refuse to redeliver it until the indebtedness be
adjusted.^
§ 957. Waiver of Lien. — According to some authorities and
the reason of the thing, the company by registering a transfer
of shares waives any lien thereon for a debt of the transferor."
It would follow, therefore, that the company may always refuse
to register a transfer of shares upon which it has a lien for
moneys owing by the transferor,'' even though the transferee
may have acquired the certificate in the open market without
knowledge of the debt for which the lien is claimed." On the
other hand, in one or two states, the courts have held that while
even a bona fide purchaser of the certificate takes in subordina-
tion to the lien, yet the company may be required to register the
transfer subject to the lien.' Transmission of shares by death
' Gray v. Stone, 69 L. T. 282. istration of shares in name of exec-
" Gray v. Stone, 69 L. T. 282. utor of deceased shareholder not a
' Bishop V. Globe Co., 135 Mass. waiver of lien). See also supra,
132, 138 (headnote inadequate). § 950.
Cf. Arnold v. Suffolk Bank, 27 But see Re Bachman, 2 Fed. Cas.
Barb. (N. Y.) 424, 429-430. 310; Dobbins v. Walton, 37 Ga. 614;
* Hodges v. Planters' Bank, 7 95 Am. Deo. 371.
G. & J. (Md.) 306; Downers Adm'r ° Jennings v. Bank of California,
V. ZanesvUle Bank, Wright (Oh.) 79 Cal. 323; 21 Pac. 852; 12 Am.
477; Hill v. Pine River Bank, 45 N. St. Rep. 145; 5 L. R. A. 233; Tete
H. 300; National Bank v. Watson- v. Farmers', etc. Bank, 4 Brewst.
tovm Bank, 105 U. S. 217 (headnote (Pa.) 308.
inadequate). Cf. W. Key & Son (1902), 1 Ch.
Cf. Hall V. U. S. Ins. Co., 5 Gill 467.
(Md.) 484; Moore v. Bank of Com- ' See supra, § 956.
merce, 52 Mo. 377; Petersburg, etc. ' Craig v. Hesperia, etc. Co., 113
Ins. Co. V. Lumsden, 75 Va. 327; Cal. 7; 45 Pac. 10; 54 Am. St. Rep.
Just V. State Bank, 94 N. W. 200; 316; 35 L. R. A. 306; Herdegen v.
132 Mich. 600; London, Paris & Coiz/iausere, 70 Wise. 589 ; 36 N. W.
American Bank v. Aronstein, 117 385.
Fed. 601, 606; 54 C. C. A. 663 (reg-
771
§ 957 TRANSFER AND TRANSMISSION [ChAP. XV
or bankruptcy does not affect the lien ; and consequently the
lien is not waived by registering as shareholder the executor or
the trustee.'
The fact that the person in charge of the transfer books when
a transfer is presented for registration promises to make the
transfer and issue a new certificate will not amount to a waiver
of the lien or estop the company from relying thereon, where
the agent in charge of the books was not shown to have author-
ity to do more than i-eceive requests and communicate with the
proper officers.^ Even a letter from the company explicitly stat-
ing that the shares are unencumbered will not, it has been held,
estop the corporation from asserting a lien some twelve months
afterwards.^ On the other hand, if the company leads the
transferee to believe that the lien does not exist or will not be
insisted upon, thereby lulling him into security and causing him
to alter his position, the lien cannot subsequently be set up
against him.*
An express mortgage or pledge o£ shares to the company
would seem to supersede the general lien.* But the fact that
the company has taken other security for the debt, such as
a mortgage of land, does not amount to a waiver of the
lien."
A by-law providing that a shareholder desiring to sell his shares
shall give the company ten days to find a purchaser, and after
the expiration of that time may sell at pleasure, does not amount
to a waiver of a lien secured to the company by statute.'
The failure of the company, when the shareholder's debt is
' See infra, § 977, § 983 and supra, the lien and yet an estoppel was
p. 771, n. 4. raised by representations of the
' Bishop V. Globe Co., 135 Mass. casbiier); St. Paid Nat. Bank v.
132. Cf. Kenton Ins. Co. v. Bow- Life Ins. Clearing Co., 71 Minn. 123;
man, 84 Ky. 430; 1 S. W. 717. 73 N. W. 713.
' Planters', etc. Ins. Co. v. Selma " McLean v. Lafayette Bank, 3
Savings Bank, 63 Ala. 585, 594-595. McLean 587, 617-619.
* National Bank v. Watsontown ' Kenton Ins. Co. v. Bowman, 84
Sanfc, 105 U. S. 217; Moore v. Bank Ky. 430; 1 S. W. 717; Union Bank
of Commerce, 52 Mo. 377; Des v. Laird, 2 Wheat. 390 ; German Nat.
Moines, etc. Trust Co. v. Des Moines Bank v. Ky. Trust Co., 40 S. W. 458;
Bank, 97 lowa 668; 66 N. W. 914; 19 Ky. Law Rep. 361.
Oakland, etc. Bank v. State Bank, 113 Cf. Durdop v. Durdop, 21 Ch. D.
Mich. 284; 71 N. W. 453; 67 Am. 583; Re Morrison, 10 N. B. R. 105.
St. Rep. 463 (where by statute the ' Citizens Bank v. Kalamazoo Co.
directors alone had power to waive Bank, 111 Mich. 313; 69 N. W. 663.
772'
§ 832-§ 1011] LIENS ON SHARES § 959
contracted, to insist upon a surrender of the share-certificate
does not amount to a waiver of the Hen ; ' and, indeed, one may
well doubt whether it could lawfully have demanded a surrender
of the certificate. A statement in a share-certificate that the
shares may be transferred on the company's books on surrender-
ing the certificate does not amount to a waiver of the lien or estop
the company, from asserting it against a bona fide purchaser of
the certificate.^ On the other hand, if the regulations which
create the lien provide that a copy of the by-law shall be endorsed
on the certificate, an omission of the endorsement from the cer-
tificate has been held a waiver of the lien.'
§ 958. Loss of Lien otherwise than by Waiver. — The repeal
of the statute which gave the lien will not divest the lien as to
debts contracted prior to the repeal.* The lien is not lost because
the debt secured is barred by limitations.^
§ 959. What is subject to the Lien. — The lien covers any
moneys distributable or payable to the shareholder on account
of his shares in liquidation or amalgamation or consolidation
proceedings." The lien extends to dividends payable on the
shares; but the right to deduct a debt due from a shareholder
from the amount of dividends payable to him may often be
supported on ordinary principles of set-off even though the
company have no lien.' All shares owned by the debtor are
subject to the lien, and the company cannot be required to
' Bohmer v. CUy BanK, 77 Va. 447; 24 S. W. 129; Bank of HoUy
445; Bank of Commerce v. Bank of Springs v. Pinson, 58 Miss. 421; 38
Newport, 63 Fed. 898, 902 (headnote Am. Rep. 330.
misleading); 11 C. C. A. 484; Piatt * Wright Lumber Co. v. Hixon,
V. Birmingham Aide Co., 41 Comi. 105 Wise. 153; SON. W. 1110, 1135.
255. ' Oeyer. v. Western Ins. Co., 3
' Union Bank v. Laird, 2 Wheat. Pittsb. (Pa.) 41 ; Farmers', etc. Bank
390 (headnote inadequate) ; Ham^ v. Iglehart, 6 Gill (Md.) 50.
mond V. Hastings, 134 U. S. 401 ° General Exchange Bank, 6 Ch.
(headnote inadequate); 10 Sup. Ct. 818.
727; Bank of Commerce .v. Bank of ' OemmeU v. Davis, 75 Md. 546;
Newport, 63 Fed. 898, 902 (headnote 23 Atl. 1032; 32 Am. St. Rep. 412.
misleading); 11 C. C. A. 484; Nat. (X. Hagar v. Union Nat. Bank, GS
Bank of the Republic v. Rochester Me. 509; Bates v. N. Y. Ins. Co., 3
Tumbler Co., 172 Pa. St. 614; 33 Johns. Cas. (N. Y.) 238; and infra,
Atl. 748; Bohmer v. City Bank, 77 § 1361.
Va. 445; Reese v. Bank of Commerce, As to dividends in Uquidation,
14 Md. 271; 74 Am. Dec. 536. see Merchants' Bank v. Shou^e, 102
= Brinkerhoff-F arris Trust, etc. Pa. St. 488; Bridges v. Nat. Bank
Co. V. Home Lumber Co., 118 Mo. of Troy, 185 N. Y. 146.
773
§ 960 TRANSFER AND TRANSMISSION [ChAP. XV
release any of them from the Hen, although the remainder might
be more than sufficient to secure the debt.'
§ 960. What Debts are covered by the Lien. — When the lien
is expressed to be for "moneys due," it extends to a debt for
which time bills of exchange not yet mature have been taken ; ■=
for the taking of the bills merely suspends the remedy without
making the original indebtedness any the less "due." A lien
for any indebtedness of a shareholder of course includes a debt
which is not yet payable.' Where one of the articles of associa-
tion provides that the company shall have a lien upon its shares
for debts "due" from the holders and another provides that the
company may decline to register a transfer by any member who
is "indebted" to it, the two articles being in pari materia must
be construed together, and hence the company may not refuse
to register a transfer unless the transferor's indebtedness is "due"
and payable.* Ordinarily, only legal as distinguished from equi-
table claims against a shareholder are within the lien.* The
lien extends to an indebtedness of a trustee though not con-
tracted on behalf of the trust estate,^ unless of course the com-
pany has notice of the trust before contracting the debt;' but
' Sewall V. Lancaster Bank, 17 ' Child v. Hudson's Bay Co., 2
S. & R. (Pa.) 285 (semble). P. Wms. 207, 209 (headnote inade-
Cf. Cross V. Phcenix Bank, 1 R. I. quate). Qiusre as to claims for
39 (criticised, supra, § 956). torts: Hotchkiss, etc. Co. v. Union
' London, Birmingham, etc. Bank- Nat. Bank, 68 Fed. 76 ; 15 C. C. A.
in? Co., 34 Beav. 332. 264.
' Grant v. Mechanics Bank, 15 " Nete London Bank v. Brockle-
S. & R. (Pa.) 140; St. Louis, etc. Ins. bank, 21 Ch. D. 302.
Co. V. GoodfeUow, 9 Mo. 149. Cf. Young v. Vough, 23 N. J. Eq.
Cf. Sewall V. Lancaster Bank, 17 325.
S. &R. 285; Pittsburgh, etc. R. B. Co. ' Conant, Ellis & Co. v. Seneca
V. Clarke, 29 Pa. St. 146. County Bank, 1 Oh. St. 298; Brad-
* Stockton Iron Co., 2 Ch. D. 101. ford Banking Co. v. Briggs, 12 A. C.
Cf. Michigan Trust Co. v. State 29; Bank of America v. McNeil, 10
BoTiA;, 111 Mich. 306; 69N. W. 645; Bush. (Ky.) 54; Prince Investment
Reese v. Bank of Commerce, 14 Md. Co. v. St. Paul, etc. Land Co., 68
271; 74 Am. Dec. 536. Minn. 121; 70 N. W. 1079; Nesmith
But see Downer's Adm'r v. Zanes- v. Washington Bank, 6 Pick. (Mass.)
ville Bank, Wright (Oh.) 477; Leg- 324; Birmingham Trust, etc. Co. v.
gett V. Bank of Sing Sing, 24 N. Y. Louisiana Nat. Bank, 99 Ala. 379;
283 (where a lien for debts "due 13 So. 112; 20 L. R. A. 600; Me-
and payable" was held to cover a chanics Bank v. Seton, 1 Pet. 299;
debt evidenced by a promissory note McLaughlin v. Bank of Victoria, 20
which had not reached maturity). Vict. L. R. 433.
Cf. Brent v. Bank of Washington,
10 Pet. 596 (headnote inadequate).
774
§ 832-§ 1011]
LIENS ON SHAKES
960
it does not extend to debts owing to the company by a cestui
que trust of shares.' Moreover, the lien applies to debts con-
tracted by the registered owner of the shares even after a transfer
by endorsement and delivery of the share-certificate,^ unless the
company has notice of the assignment ; ^ and by parity of rea-
soning debts contracted by a purchaser of shares who has not
been registered as shareholder are not within the lien.* But
debts contracted by a shareholder in favor of a third person,
and afterwards acquired by the company by assignment, are
not covered.^ It has been held that debts contracted by the
' Re Perkins, 24 Q. B. D. 613.
Cf. Hdm V. Svnggett, 12 Ind. 194
(headnote inadequate).
But see contra: ^Planters', etc.
Ins. Co. V. Selma Savings Bank, 63
Ala. 585 ; Sabin v. Bank of Wood-
stock, 21 Vt. 353.
Cf. Lanier Lumber Co. v. Rees,
103 Ala. 622; 16 So. 637; 49 Am.
St. Rep. 57 (where the cestui que
trust was a corporation which had
no power to hold shares in another
company, and for this reason its
debt was held not to be secured by
the lien).
' Jennings v. Bank of Ccdifornia,
79 Cal. 323; 21 Pac. 852; 12 Am.
St. Rep. 145; 5 L. R. A. 233 (where
the indebtedness secured was stated
by the terms of the certificate to be
"that of the person in whose name
the stock stands on the books of the
bank ") ; Gibbs v. Long Island Bank,
83 Hun (N. Y.) 92, 96 (headnote
inadequate); 31 N. Y. Supp. 406;
Stafford v. Produce Exch. Banking
Co., 61 Oh. St. 160; 55 N. E. 162;
76 Am. St. Rep. 371 ; Mount HoUy
Paper Co.'s Appeal, 99 Pa. St. 513;
Leggett v. Bank of Sing Sing, 24 N. Y.
283, 287-288 (headnote inadequate) ;
Piatt V. Birmingham Axle Co., 41
Conn. 265; Reese v. Bank of Conv-
merce, 14 Md. 271 ; 74 Am. Dec. 536;
People's Bank of Talbotton v. Ex-
change Bank, 116 Ga. 820; 43 S. E.
269; 94 Am. St. Rep. 144.
Cf. Michigan Trust Co. v. State
Bank, 111 Mich. 306; 69 N. W. 645.
' Bank of America v. McNeil, 10
Bush. (Ky.) 54; White River, etc.
Bank v. Capital, etc. Trust Co., 59
Atl. (Vt.) 197; 77Vt. 123; 107 Am.
St. Rep. 754 (where it was said that
the hen of the company would attach
to the interest of a pledgor who
had pledged the shares and given
notice to the company before the
company's claim was contracted);
People's Bank of Talbotton v. Ex-
change Bank, 116 Ga. 820; 43 S. E.
269; 94 Am. St. Rep. 144; Curtice
V. Crawford County Bank, 110 Fed.
830 (burden of proving that com-
pany had notice of the assignment
held to rest on the transferee of the
shares).
Cf. Prince Investment Co. v. St.
Paul, etc. Land Co., 68 Minn. 121;
70 N. W. 1079; Birmingham Trust,
etc. Co. v. Louisiana Nat. Bank, 99
Ala. 379; 13 So. 112; 20 L. R. A.
600; Hotchkiss, etc. Co. v. Union.
Nat. Bank, 68 Fed. 76; 15 C. C. A.
264.
* But see WethereU v. Thirty-first
Street, etc. Ass'n, 153 111. 361; 39
N. E. 143 (where the purchaser was
secretary of the company and as
such charged with the duty of reg-
istering transfers).
= Boyd V. Redd, 120 N. Car. 335;
27 S. E. 35; 58 Am. St. Rep. 792.
Cf. Bank of Kentucky v. Bonnie
Bros., 102 Ky. 343; 43 S. W. 407;
White's Bank v. Toledo Ins. Co., 12
Oh. St. 601.
But see Grant v. Mechanics Bank,
775
§ 961 . TRANSFER AND TRANSMISSION [ChAP. XV
shareholder before he acquired his shares are within the lien.'
Of course, the lien cannot be restricted by implication to debts
due by the shareholder qua shareholder.^ A debt owing by a
partnership of which the shareholder is a member is within the
lien,^ and so is a claim against the shareholder as surety.*
A statute creating a lien in favor of the company has been held
to apply to debts contracted prior to the enactment.^
§961. Enforcement of Lien. — The company's lien, like
any other equitable charge, may be enforced by a foreclosure
suit." Where the debtor has assigned the shares subject to the
lien by endorsement of the certificate, a decree of foreclosure
may be entered in a suit between the company and the assignee
although the assignor, who remains the registered holder, is not
a party.' But it has been held in Pennsyl^jania that the com-
pany cannot take the law into its own hands and sell the shares
covered by the lien.*
§ 962. Regrulations giving Company a Right of Pre-emption. —
Provisions are sometimes found requiring a shareholder before
selling his shares to offer them to the company at the price
which he is able to obtain from an outsider. Such regulations
15 S. & R. (Pa.) 140; Union Bank * St. Louis, etc. Ins. Co. v. Good-
V. Laird, 2 Wheat. 390 (where this fellow, 9 Mo. 149.
point was not raised by counsel or ° Birmingham, Trust, etc. Co. v.
noticed specifically by the court); East Lake Land Co., 101 Ala. 304;
Rogers v. Huntingdon Bank, 12 Serg. 13 So. 72 ; First Nat. Bank v. Hart-
&R. (Pa.) 77. ford, etc. Ins. Co., 45 Conn. 22.
' Schmidt . v. Hennepin County ° Mechanics Bldg., etc Ass'n v.
BarreL Co., 35 Minn. 511; 29 N. W. King, 83 Cal. 440 (headnote inade-
200. quate); 23 Pac. 376.
^ Mobile Mutual Ins. Co. v. Cul- But see Aldine Mfg. Co. v. Phil-
lom, 49 Ala. 558; Rogers v. Hunting- lips, 118 Mich. 162; 76 N. W. 371 ;
don Bank, 12 Serg. & R. (Pa.) 77. 74 Am. St. Rep. 380; 42 L. R. A.
See also Ex parte Stringer, 9 Q. B. D. 531.
436. Cf. supra, § 954. Cf. Reese v. Bank of Commerce, 14
' Arnold\. Suffolk Bank,21Baxh. Md. 271, 284; 74 Am. Dec. 536;
(N. Y.) 424, 430; Citizens' Bank v. Farmers' Bank of Maryland's Case,
Kalamazoo Co. Bank, 111 Mich. 313; 2 Bland (Md.) 394.
69 N. W. 663 ; Cunningham v. Ala. ' Citizens' Bank v. Kalamazoo Co.
Life Ins. Co., 4 Ala. 652 (headnote Bank, 111 Mich. 313; 69 N. W. 663.
inadequate); Mechanics Bank v. ' Tete v. Farmer^, etc. Bank, 4
Earp, 4 Rawle (Pa.) 384. Brewst. (Pa.) 308.
776
§ 832-§ 1011] CONTRACTS FOR SALE § 964
should be held void as contemplating a reduction of capital,
unless clearly authorized by statute. A provision of that sort has
been held to have no application to a sheriff's sale under an
execution against the shareholder; ' but on the other hand, it
has been held to apply to a transfer to a principal from an agent
in whose name shares belonging to the principal have been reg-
istered.^ A provision of this kind is not satisfied by offering to
the company a larger number of shares than the outside pur-
chaser offers to take.^ If the company registers a transfer, non-
compliance with any such provision giving to the corporation
a right of pre-emption is waived.'
§ 963. Rescission of Transfer of Shares for Fraud of Transferor.
— A transfer of shares, like any other conveyance of property,
may be set aside at the instance of the transferee if he was
induced to accept the shares by the fraud of the transferor.
Where the transfer has been completed a bill in equity to cancel
it may be maintained by the transferee against the transferor
and the company.^ But if the company was not party to the
fraud, it would seem clear on principle that the defrauded trans-
feree should be subject to a shareholder's liabilities to the com-
pany, and its creditors, during such time as the shares stand in
his name, and that his only relief against such liabilities would
be by holding the transferor responsible by way of indemnity."
§ 964-§ 975. Contracts for Sale or Transfer of Shares.
§ 964. In general. — Contracts for the sale or transfer of
shares differ in some respects from ordinary contracts for sale
of personal property. As shown above, the complete legal title
does not pass immediately upon the making of the contract, as
is usually the case in contracts of sale of chattels.
' Barrows v. Nat. Rubber Co., 12 ' FarweU v. Colonial Trust Co.,
R. I. 173. 147 Fed. 480; 78 C. C. A. 22.
^ Barrett V. King, 63 N. E. 934; But see BeUow v. Fischer, 102
181 Mass. 476. Cal. 208, 214; 36 Pac. 509 (declar-
' Sweetland v. Quidnick Co., 11 ing that the corporation is not a
R. I. 328. proper party to such a bill).
* Am. Nat. Bank v. Oriental Mills, " But see Stufjiebeam v. DeLash-
17 R. I. 551; 23 Atl. 795. mutt, 101 Fed. 367.
777
§ 965 TRANSFER AND TRANSMISSION [ChAP. XV
§ 965. Whether Contract is Joint or Several on Part of Vendors.
— Where a contract is made for the sale of all the shares of a
corporation, as is often done in pursuance of schemes of con-
solidation, amalgamation, and redrganization, there is sometimes
a question whether the contract should be construed as a several
sale by each shareholder of the shares held by him or whether
it should be construed as a sale by the corporation of its entire
property and assets. Where in such a case the purchaser buys
at so much a share, and there is no provision that the proceeds
shall become a joint fund, the contract is several on the part of
each shareholder, and each may therefore maintain a separate
action against the purchaser.'
§ 966. Whether Non-disclosure of Contracts for Sale of Shares is
a Fraud upon other Persons interested in the Company. — Inasmuch
as shares are freely transferable, an agreement made between a
promoter and a subscriber to shares, whereby the former agrees
to purchase from the latter the shares subscribed by him, if the
undertaking should prove unsuccessful, is quite valid even though
the existence of the agreement be kept secret so that the public
may be induced to believe that the subscriber in question —
perhaps a capitalist of repute — had shown faith in the com-
pany by actually risking his money in its shares.^ Inasmuch as
shares are freely transferable, no one is justified in concluding
that a shareholder has made no contract whereby he is guaran-
teed against loss from depreciation of his shares.
§ 967. Description of the Shares to be Transferred. — The
number and character of the shares contracted to be trans-
ferred ought to be and usually are specified in the contract.'
A contract which calls for "£1000 worth of fully paid-up
shares," has been held to mean shares of that actual value in
' Dowling v. Wheeler, 117 Mo. to be transferred all the stock of a
App. 169; 93 S. W. 924. corporation is subject to a condi-
" Morgan v. Struthers, 131 U. S. tion precedent that he be able to
246; 9 Sup. Ct. 726; Meyer v. Blair, deliver the entire amount of stock,
109N. Y. 600; 17N. E. 228; 4 Am. see AldenSpeare's Sons Co. v. Casein
St. Rep. 500. Co., 106 N. Y. Supp. 980 (where a
' ' As to an English statute re- provision that the vendor should
quiring contracts for sale of bank cause the transfer of shares owned
shares to specify the denoting num- by a third person was held a mere
bers of the shares, see infra, § 969. collateral stipulation and not a
As to whether the right of a vendor condition),
under a contract to transfer or cause
778
§ 832-§ 1011] CONTRACTS FOR SALE § 969
the market and not shares of that nominal or par value.^ Inas-
much as all shares in a corporation prima facie stand on an
equality, a contract calling for the transfer of shares in a com-
pany to be subsequently incorporated means shares which shall
stand on an equality with all other shares in the same company,
and therefore is not satisfied by a transfer of ordinary or deferred
shares in a company which has issued preferred shares.^
§ 968. Statute of Frauds. — In England, contracts for sale
of shares are held not to be contracts for sale of goods, wares,
and merchandise within the seventeenth section of the Statute
of Frauds.' In the United States, a conflict of authority exists
on this point.* Where contracts for sale of shares are held to
be within the statute, a transfer of the shares or some of them
to the vendee and the issue of a certificate for them to him con-
stitute such delivery and acceptance as will take the contract
out of the statute.^
§ 969. Sales on the Stock Exchange — Usages of Brokers. —
Contracts for sale of shares in large corporations whose securi-
ties are listed are usually made through brokers upon the stock
exchange." Such contracts in their interpretation and operation
are governed by the rules and customs of the stock exchange
upon which they are made.' By these rules and customs even
public statutes are sometimes brushed aside or evaded.
For example, a British statute known as Leeman's act,* pro-
vides that every contract for sale of bank shares shall be void
unless it designates in writing the distinguishing numbers of the
shares in the register of the company, if there are such distin-
guishing numbers. Nevertheless, the London stock exchange
' Mcllguham v. Taylor (1895), entered into on the London Stock
1 Ch. 53. Exchange, see Levitt v. Hamblet
' Mcllquham v. Taylor (1895), (1901), 2 K. B. 53; Beckhanson &
1 Ch. 53 (per StirUng, J.). Gibbs v. Hamhlet (1901), 2 K. B. 73;
' Supra, § 505. Scott & Horton v. Godfrey (1901),
* Ibid. 2 K. B. 726.
» Dinkier v. Boer, 92 Ga. 432; 17 ' Stray v. Russell, 1 E. & E. 888;
S. E. 953. As to what is sufficient London Founders' Ass'n v. Clarke,
to take the contract out of the 20 Q. B. D. 576. Dos Passes on
statute, see further 2 Dos Passes on Stock Brokers and Stock Exchanges,
Stock Brokers and Stock Exchanges, 2d ed., Chap. IV, pp. 410-474 (where
2d ed. 892 et seq. a full citation and discussion of the
' Cf. NickaUs v. Merry, L. R. 7 authorities will be found).
H. L. 530. As to privity between " 30 Vict., c. 29.
principals in respect of contracts
779
§ 970 TRANSFER AND TRANSMISSION [ChAP. XV
frequently disregards the provisions of this act. Indeed, one
can readily perceive the inconvenience that would result from a
uniform compliance with the statute. Consequently, the courts
have held that a person who with knowledge of this usage of
the stock exchange employs a broker to buy or sell shares for
him impliedly consents that the contract of sale shall be made
in accordance with the custom of the stock exchange instead of
in accordance with the provisions of the statute; and hence,
if the contract is made accordingly, and if the broker, being by
the rules of the stock exchange bound to perform the agreement
under penalty of expulsion from the exchange, does perform it,
he may sue his customer and recover indemnification for any
losses sustained in performing the agreement.' To that extent,
the custom of the stock exchange is permitted to override the
policy of the statute; but the courts could not well be expected
to go any further in sustaining the brokers' usage in opposition
to the statute. For instance, unless the customer had actual
knowledge of the usage, the broker would not be permitted, as
in the case just stated, to perform the legally invalid agreement
at the customer's expense.'' So, where a person commissions a
broker to sell shares without cognizance of or reference to the
custom, the broker impliedly agrees to make a legally binding
contract; and if the contract which he makes does not comply
with the act of parliament and is repudiated on that ground, he
must make good the loss which results to his principal.' If a
transfer made in pursuance of a contract which does not comply
with the act of parliament is accepted by the transferee or by
his broker on his behalf, the transferor may require the trans-
feree to indemnify him against any further liabihty as share-
holder ; ^ but this result is reached not because of the custom
of the brokers to disregard the act, but because the acceptance
of the transfer makes the transferor trustee for the transferee
and vests in the latter an equitable title to the shares, so that
the void executory contract is performed and the act of parlia-
ment no longer applies.
§ 970. When Purchase Money is payable. — Where a contract
for sale of shares is made without any extraordinary or unusual
' Seymour v. Bridge, 14 Q. B. D. ' Neilson v. James, 9 Q- B. D. 546.
460. * Loring v. Davis, 32 Ch. D. 625.
= Perry v. Barnet, 15 Q. B. D. 388.
780
§ 832-§ 1011] CONTRACTS FOR SALE § 971
terms, whether on the stock exchange or otherwise, the purchase
money is payable on delivery or tender of the share-certificate
coupled with a transfer in regular form ; ' although a valid
transfer on the books of the company without the delivery of
any certificate would amount to performance of the contract.^
If no certificate has been issued to the transferor, a tender of
a deed of assignment is sufficient.' A tender of certificates made
out in the name of a third person without any endorsement by
or transfer from him, is of course not a sufficient tender of per-
formance by a vendor of shares.* The purchase money may be
payable, although the vendor retains the certificate in his pos-
session by way of security for payment of the price : thus, where
the selling broker deposited the certificates duly endorsed with
a trust company by whom they were to be delivered out only
on the joint order of the buying and selling brokers, the court
held that the transaction amounted to a transfer of the title
subject to the vendor's right to require the trust company to
obtain the purchase money before surrendering the certificate,
and that accordingly an action for the purchase price might be
maintained by the vendor.^
§ 971. Burden of procuring Eegistration o£ Transfer on Trans-
feree.— The burden of procuring registration of the transfer
does not rest upon the transferor." Hence, where the company
has the right to reject any transferee, the purchase money can-
not be recovered back by a transferee who is rejected: ' he un-
dertook the burden of procuring registration, and the transferor
consequently cannot be deemed impliedly to have contracted
• London Founders' Ass'n v. influenced by the peculiar terms of
Clarke, 20 Q. B. D. 576; Noyes v. an Oklahoma statute).
SpavUing, 27 Vt. 420. ^ McOue v. RommeU (Cal.), 83
Of. Brovm v. Smith, 122 Mass. Pac. 1000.
589; Bruce v. Smith, 44 Ind. 1 * Nicolls v. Reid, 109 Cal. 630;
(where the delivery of the endorsed 42 Pac. 298.
certificate was admitted by de- " Frazier v. Simmons, 139 Mass.
murrer to have been accepted as 531; 2N. E. 112.
full performance). ° Skinner v. City of London
' White v. Salisbury, 33 Mo. 150. Marine Ins. Corp., 14 Q. B. D. 882.
See supra, § 853. Cf. Nefvberry v. Detroit, etc. Iron
Cf. Boatmen's Ins. & Trust Co. Co., 17 Mich. 141; Webster v. Upton,
V A We, 48 Mo. 136; Dinkier v. Baer, 91 U. S. 65, 71-72.
92 Ga. 432; 17 S. E. 953. ' Stray v. Russell, 1 E. & E. 888;
But see Haynes v. Brovm (Okl.), London Founders' Ass'n v. Clarke,
89 Pac. 1124 (where the decision was 20 Q. B. D. 576.
781
§ 972 TRANSFER AND TRANSMISSION [ChAP. XV
that the transferee should be axicepted as a shareholder. Nor
can the money be recovered back on the ground of total failure
of consideration, for the transferee still has the certificates, which
are of some value even though the company refuses to recog-
nize him as a shareholder, so that the failure of consideration is
at most partial merely. It is sometimes said that " it is the duty
of the transferor to see that his transfer is registered " ; ' but
this dictum means merely that if he wishes to escape further
liability as shareholder he must see to the registration of the
transfer, and should not be construed as conflicting with the rule
that as between transferor and transferee the duty of procuring
registration rests on the latter.
§ 972. Obligation of Purchaser to indemnify Vendor against
Liability as Shareholder. — The procurement of registration of
the transfer being within the province of the transferee, the
transferor is entitled to be indemnified by the transferee for any
liability he may sustain as shareholder in consequence of a
delay in registering the transfer.^ The statute of limitations
does not begin to run against such a claim for indemnity until
the transferor is actually compelled to pay, even though a rea-
sonable time for registration of the transfer has elapsed after
the delivery of the certificate.^ An action by a transferor against
' Tucker v. Mulligan, 28 Vict. ret9.imng the transfer in his posser-
L. R. 1, 6; Heights of Maribyrnong sion); Man v. Boykin (S. Car.), GO
Estate Co., 22 Vict. L. R. 438, 445. S. E. 17.
' Paine v. Hutchinson, 3 Ch. 388 ; But see Sayles v. Blane, 14 Q. B.
Loring v. Dams, 32 Ch. D. 625; 205; Treadway v. Johnson, 33 Mo.
NickaUs v. Merry, L. R. 7 H. L. App. 122 (decision based on peculiar
530; Bowring v. Shepherd, L. R. 6 terms of contract); Humble v.
Q. B. 309; Hawkins v. MaUby, 4 Lareffston, 7 M. &. W. 517.
Ch. 200; Hutder v. Lord, 64 Md. Cf. Ex parte Head, 15 L. T. 262;
534; 3 Atl. 891; Brinkley v. Hamble- Davis v. Haycock, L. R. 4 Ex. 373.
ton, 67 Md. 169, 178 (semble) ; 8 Atl. In Walker v. Bartlett, 18 C. B. 845,
904; Kellogg v. Stoekwell, 75 111. 68; it was said that the purchaser was
Wynne v. Price, 3 De G. & S. 310; under no obligation to have him-
Johnson V. UnderhiU, 52 N. Y. 203; self registered as shareholder, but
Gordon v. Parker, 10 La. 56 (head- was bound only to indemnify the
note inadequate) ; Gustard's Case, vendor in case he exercised his right
8 Eq. 438 (semble) ; People's Home not to present the transfer for
Sav. Bank v. StadtmuUer (Cal.), registration. Cf. McClure v. Central
88 Pac. 280, 281-282 (semble); Trust Co., 28 N. Y. App. Div. 433,
Shepherd v. OiUespie, 3 Ch. 764 441; 53N. Y. Supp. 188. Sedquosre.
(where a transferee who had not " Hutder v. Lord, 64 Md. 534;
authorized the transfer was estopped 3 Atl. 891.
from denying his acceptance by
782
§ 832-§ 1011] CONTRACTS FOR SALE § 973
a transferee for indemnity may clearly be maintained notwith-
standing the fact that the company is in liquidation : ' the ques-
tion is entirely collateral to the liabiUties to be adjusted in the
winding-up proceedings. If the nominal transferee is an infant,
so that the registration of the transfer does not relieve the trans-
feror from Uability as a shareholder, the transferor may demand
indemnity from a person for whom the infant was acting as
trustee.^ The transferee is also bound to indemnify the trans-
feror against any statutory liability as a past member which the
latter may have been compelled to discharge.'
If the nominal transferee is a mere nominee or bare trustee
of another, the transferor may require indemnity from the cestui
que trust as well as the trustee.* But an arrangement between
the transferor and the nominal transferee whereby the purchase
money is returned and the transfer cancelled will bar any such
claim against the cestui que trust.^
If the transferee has in turn assigned the shares before the
original transferor is called upon to pay, the latter may proceed
against the ultimate purchaser. According to an English case,
he may also, if he choose, proceed against his own immediate
transferee ; * but a Maryland decision is diametrically opposite
on this point.' If the only basis for the claim of indemnity is
a quasi-contractual obligation springing out of the principle qui
sentit commodum sentire debet et onus, then the reasoning of the
Maryland court is irresistible. If, on the other hand, it is an im-
plied term of every contract for sale of shares that the purchaser
shall reimburse the vendor against any further liability as share-
holder, then it would seem that the purchaser should not be
able to avoid this obligation by assigning the shares.
§ 973. Implied Warranties by Vendor. — The vendor im-
pliedly warrants the genuineness of the certificate ^ and of the
' Joseph V. Holroyd, 22 W. R. * Castellan v. Hobson, 10 Eq. 47.
614. ^ Maynard v. Eaton, 9 Ch. 414
' Brown v. Black, 8 Ch. 939. (where the nominal transferee being
' Kellock V. Enthoven, L. R. 9 an infant had sued the transferor for
Q. B. 241 ; Roberts v. Crowe, L. R. damages for fraud).
7 C. P. 629 (holding that a compro- ' Kellock v. Enthoven, L. R. 9
mise of the liquidator's claim against Q. B. 241.
the transferee does not protect the ' Brinkley v. Hambleton, 67 Md.
latter from his obligation to re- 169; 8 Atl. 904.
imburse the transferor from liability ' Fifth Ave. Bank v. Forty-
as a past member). second St., etc. B. R. Co., 137 N. Y.
783
§ 973 TRANSFER AND TRANSMISSION [ChAP. X^"
transfer.' If the transferor endorses the certificate in blank, he
warrants the genuineness of the certificate not merely in favor
of the immediate transferee but also in favor of any one who
in due course acquires the certificate and who according to ac-
cepted principles of law would, if the certificate were genuine,
have the right to insert his own name in the blank and become
registered a^ shareholder, even though the immediate trans-
feree was aware of the spuriousness of the certificate and there-
fore could not have claimed any benefit from the warranty.^
On the other hand, it has been held that the vendor does not
warrant the corporate existence — at any rate, not the de jure
corporate existence — of the company which issued the shares ; '
but in England, where the doctrine of de facto corporations is
not recognized,* it seems that the vendor is held impliedly to
warrant the legal existence of the company.^ In New York, it
has been held that the vendor impliedly warrants the shares to
be free of liens or encumbrances in favor of the company ; ° but
this decision would probably not be universally followed. For
instance, where a share-certificate with a transfer duly endorsed
thereon is delivered and accepted in performance of a contract
of sale, there is, at least according to a Pennsylvania case, no
implied warranty that the shares represented by the certificate
are legally issued, so that if it subsequently transpires that the
shares in question were part of an illegal overissue, the pur-
chaser cannot rescind the contract and recover back the pur-
chase money.'
231,238; 33 N. E. 378; 33 Am. St. 703, affinned, MSN. Y. 652; 43
Rep. 712; 19 L. R. A. 331 (semble). N. E. 68; 31 L. R. A. 776; 51 Am.
Cf. Wood V. Sheldon, 42 N. J. St. Rep. 727 (based upon a rule of
Law 421; 36 Am. Rep. 523; Jarvis the stock exchange).
V. Manhattan Beach Co., 53 Hun ^ Matthews v. Massachusetts Nat.
(N. y.) 362; - 6 N; Y. Supp. 703, Bank, 16 Fed. Cas. 1113.
affirmed, 148 N.Y. 652; 43 N.E. 68; 'Marshall v. Reach (111.), 81
31L. R. A. 776; 51 Am. St. Rep. 727 N.E. 29; Harter v. Eltzroth, Ul Ind.
(based upon a rule of the stock 159; 12 N. E. 129; Burwash v.
exchange). Ballou (111.), 82 N. E. 355.
■ As. to whether the vendor war- * See supra, § 284.
rants the shares to be full-paid as " Kempson v. Saunders, 4 Bing. 5.
stated in the certificate, see Higgins ' McClwne v. Central Trust Co.,
v.IllinoisTrust,etc.Bank,193I\\.3Qi; 165 N. Y. 108; 58 N. E. 777; 53
61 N. E. 1024; Foote v. Illinois Trust, L. R. A. 153.
etc. Bank, 194 111. 600; 62 N. E. 834. ' People's Bank v. Kurtz, 99 Pa.
1 Jarvis v. Manhattan Beach Co., St. 344; 44 Am. Rep. 112.
63 Hun (N. Y.) 362; 6 N. Y. Supp. Contra: Lincoln v. New Orleans
784
§ 832-§ 1011] SPECIFIC PERFOEMANCE § 975
§ 974. Purchase on Margin. — Purchases of shares on margin,
a familiar feature of dealing in stocks at the present day, have
few or no legal peculiarities pertinent to the present subject.
According to the weight of authority, such a purchase amounts
in legal effect to a purchase coupled with an hypothecation of
the purchased shares with the purchaser's broker to secure pay-
ment of the portion of the purchase money advanced by the
broker.' The purchaser's broker is not bound to keep the pur-
chased shares separate from other shares standing in his name,
but does his full duty if he is always ready to transfer an equal
number of shares of the same issue.^
§ 975. . Specific Performance of Contracts for Sale or Transfer of
Shares. — Although courts of equity will not ordinarily grant
specific performance of contracts for sale of personal property,
and although in an early case specific performance was refused
of a contract for sale of South Sea stock,^ yet in modern times
in England the rule has been established that equity will grant
specific performance of contracts to sell or transfer shares in
railway and other companies.* The reason assigned by the
courts for this conclusion was that shares in railway companies,
for example, were limited in number and could not always be
procured in the market, like consols or public stocks.^ This
reason is hardly applicable to shares in the large railway and
industrial companies of the present time which can always be
purchased on the stock exchange. Perhaps sounder reasons
for granting specific performance are the rapid fluctuation of
value to which shares in many corporations are liable and which
renders pecuniary damages an uncertain and therefore inade-
Express Co., 45 La. Ann. 729; 12 taken up with a discussion of the
So. 937 (where the plaintiff acquired various questions involved, which,
the shares from the company itself), however, hardly relate to corpora-
Cf. supra, § 579-§ 582. tion law, properly so called.
Cf. Wood V. Sheldon, 42 N. J. Law ' Worthington v. Tormey, 34 Md.
421; 37 Am. Rep. 523. 182. See also supra, § 500, and cases
' 1 Dos Passos on Stock Brokers there cited,
and Stock Exchanges, 2d ed., 179- ' Cud v. Rutter, 1 P. Wms. 570.
200. But as to a peculiarity of * Duncuft\. Alhreckt, 12 B\m.l8Q;
Massachusetts law, see Be Sm/i, 105 Poole v. Middleton, 29 Beav. 646;
Fed. 493, affirmed 112 Fed. 319. Cheale v. Kenward,^ 'De,Gi.& 3.27;
A large portion of the law of stock Paine v. Hutchinson, 3 Ch. 388;
brokers and their dealings relates to Wynne v. Price, 3 De G. & S. 310.
these transactions, and Mr. Dos " Duncuft v. Albrecht, 12 Sim. 189.
Passes' valuable book is largely
VOL.1. — 50 785 J
§ 975 TRANSFER AND TRANSMISSION [ChAP. XV
quate form of relief, and also the fact that shares are often pur-
chased for the purpose of obtaining control of the corporation,
in which case the damages would be difficult to estimate fairly.
Accordingly, in the United States, specific performance of a
contract for sale of shares will be granted when the uncertain
value of the shares renders it difficult to do justice by an award
of damages,' or where the shares agreed to be sold constitute
a controlling interest in the company;^ but unless some such
special ground for equitable interference exists the parties will
according to many authorities be left to the remedy at law.*
It should be observed, however, that the American authorities
supporting this latter proposition rest upon the early English
' White V. Schuyler, 1 Abb. Pr., contract was regarded as one to
N. s. (N. Y.), 300; Treasurer v. which a court of conscience ought
Commercial Mining Co., 23 Cal. not to lend its aid); Clements v.
390 (mining stock) ; Mardon v. Bay, Sherwood-Dunn, 95 N. Y. Supp.
18 R. I. 672; 29 Atl. 998; 49 Am. 766; 108 N. Y. App. Div. 327.
St. Rep. 811 (where the bill alleged ' Treasurer v. Commeircial Min^
and a demurrer admitted that ing Co., 23 Cal. 390 (semble);
plaintiff could not obtain the stock OoodwinGas Stove, etc. Co.'s Appeal,
elsewhere); Newton v. Wooley, 105 117 Pa. St. 514; 12 Atl. 736; 2 Am.
Fed. 541; Dennison v. Keasbey St. Rep. 696; Avery v. Ryan, 74
(Mo.), 98 S. W. 546 (where none of Wise. 591; 43 N. W. 317; Rigg v.
the stock was procurable in the Reading, etc. Ry. Co., 191 Pa. St.
market); Rau v. Seidenberg, 104 298; 43 Atl. 212; Kennedy v.
N. Y. Supp. 798; 53 N. Y. Misc. 386; Thompson, 97 N. Y. App. Div. 296;
Baumhoff v. St. Louis, etc. R. R. Co. 89 N. Y. Supp. 963; Bateman v.
(Mo.), 104 S. W. 5. Straus, 86 N. Y. App. Div. 540; 83
But see Clements v. Sherwood- N. Y. Supp. 785.
Dunn, 95 N. Y. Supp. 766; 108 Cf. Noyes v. Marsh, 123 Mass.
N. Y. App] Div. 327. 286; Todd v. Taft, 7 Allen (Mass.)
Cf. Fleishman v. Woods, 135 371; Leach v. Forbes, 11 Gray-
Gal. 256; 67 Pac. 276; Currie v. (Mass.) 506; 71 Am. Dec. 732
Jones, 138 N. Gar. 189 ; 50 S. E. » (specific performance decreed of a
660; Eichbaum v. Sample (Pa.), 62 contract to transfer both land and
Atl. 837; 213 Pa. 216. shares of capital stock) ; Johnson -v.
' O'Neill V. Webb, 78 Mo. App. 1 ; Stratton, 109 111. App. 481 ; Watkins
Northern Central Ry. Co. v. Wal- v. Robertson (Va.), 54 S. E. 33 (where
worth, 193 Pa. St. 207; 44 Atl. 253; specific performance was allowed
74 Am. St. Rep. 683. Cf. Hower v. without noticing this objection);
Weiss, etc. Co., 55 Fed. 356; 5 Boggs v. Boggs & Buhl (Pa.), 66
G. C.-A. 129; Butler v. Murphy, 80 Atl. 105. The most elaborate dis-
S. W. 337 (Mo.); Scruggs v. Cot- cussion of the question on principle
terHl, 67 N. Y. App. Div. 583; 73 and in the light of the conflicting
N. Y. Supp. 882. authorities to be found in the books
But see Ryan v. McLane, 91 Md. is contained in 2 Dos Passos on
175; 46 Atl. 340; 80 Am. St. Rep. Stock Brokers and Stock Exchanges,
438; 50 L. R. A. 501 (where the 2d ed., 810-848.
786
§ 832-§ 1011] SPECIFIC PERFORMANCE § 973
cases which refused specific performance of contracts for sale
of "public stocks, "whereas the "public stocks" in question were
not capital stocks at all but were government obligations. The
English cases, as stated above, grant specific performance of
contracts for sale of shares in corporations — in other words,
shares of capital stock — even in the case of railway corpora^
tions and other companies whose securities are dealt in on the
stock exchange.
A suit for specific performance of a contract for sale of shares
must be distinguished from a suit by a transferee of shares to
compel the company to register a transfer already executed by
the vendor.' Moreover, an executory contract to sell shares
should be distinguished from an executed sale, the legal title
being retained by the vendor as security for the purchase money.^
Such a transaction is equivalent to a formal transfer followed
by a mortgage back to secure the purchase money, and in all
such cases the vendee has a remedy by a bill to redeem.
Wherever specific performance of a contract to sell shares is
allowed, the remedy as in other cases of specific performance is
mutual,' and will be granted either at the suit of the transferor *
or the transferee.* The assumption of the liabilities of a share-
holder by the transferee is sufficient consideration for the trans-
feror's promise.'
The court will not refuse to decree specific performance where
the directors of the company have a right to prescribe the mode
of transfer, but will compel the vendor to do all he can to
perfect the transfer.' The decree may pass even though the
company has gone into liquidation; and the transferee may
be required to indemnify the transferor against any liability
as shareholder in the liquidation proceedings.'
' See supra, § 934. Mechanics ' But see Eckstein v. Downing,
Bank v. Seton, 1 Pet. 299, 305; 64N. H.248; 9Atl. 626; 10 Am. St.
Lucas V. MUliken, 139 Fed. 816, Rep. 404.
822-826 (holding that the company * Paine v. Hutchinson, 3 Ch. 388;
is not a necessary party to a bill Cheale v. Kenward, 3 De G. & J. 27.
for specific performance of a con- Ci. Ex parte Head, \S \j. T . 2&2.
tract for the sale of some of its ' Duncuft v. Albrecht, 12 Sim. 189,
shares); Scherck v., Montgomery, Poole v. Middleton, 29 Beav. 646.
33 So. 507; 81 Miss. 426; Thornton " Cheale v. Kenward, 3 De G.& J.
V. Martin, 116 Ga. 115, 118; 42 27.
S. E. 348. ' Poole v. Middleton, 29 Beav.
2 Beardsley v. Beardsley, 138 646.
U. S. 262; 11 Sup. Ct. 318. " Paine v. Hutchinson,3 Ch. 388.
787
§ 976 TEANSFEH AND TRANSMISSION [ChAP. XV
§ 976-§ 984. TRANSMISSION OF SHARES.
§ 976-§ 981. Death of Shareholder.
§ 976. In general — Eigfits and Liabilities of Ezecutor or Ad-
ministrator before Entry of Decedent's Death in the Company's Reg-
ister — Mutual Rights of specific and residuary Legatees. — The
subject of transmission or change in the ownership of shares
otherwise than by transfer next demands attention; and we
shall first consider the transmission or devolution of shares upon
the death of the owner.' For certain purposes, the shares vest
in the executor or administrator immediately upon the death of
the decedent, or grant of letters, without the necessity for any
entry upon the company's register and while the shares still
stand in the name of the deceased.^ Thus, the executors are
entitled, while the shares remain in their testator's name, to
receive any dividends payable thereon, and probably, in the
absence of any by-law or regulation to the contrary, to vote in
respect of the shares.^ So, also, the executors may participate
pari passu with the registered shareholders in any increase of
capital offered for subscription to the existing members of the
company.* The executors, moreover, may execute a transfer
of the shares which will pass a good title to the transferee and
entitle him to be registered as shareholder.^
Furthermore the executors are liable in their representative
capacity for calls upon the shares made after the testator's
death and before any sale or distribution of the shares ; ° but
unless the executors are registered as shareholders, they are not
liable personally.' The estate of a deceased shareholder in
whose name the shares continue to stand on the company's
' The fullest consideration of original shares ; Jacgrues v. Chambers,
this subject in any text-book is found 4 Eng. Ry. & Canal Cas. 205.
in 1 Lindley on Companies (6th ed., ° Colonial Bank v. Cady, 15 A. C.
p. 731 et seq.) Bis:. Ill, Chap. 7. 267. See infra, § 980, § 981.
' As to the right to inspect books ° James v. . Buena Ventura
al the corporation, see infra, § 1107. Nitrate Co. (1896), 1 Ch. 456 (sem-
» See infra, § 1227. Cf. Dana v. ble). See also supra, § 768. Cf.
American Tobacco Co. (N. J.), 65 Matteson v. Dent, 176 U. S. 521; 20
Atl. 730, affirmed, 69 Atl. 223. Sup. Ct. 419; Lanigan v. N(yrth, 69
* Supra, § 605. Shares acquired Ark. 62; 63 S. W. 62.
by the executors in exercise of this ' Buchan's Case, 4 A. C. 549.
right go to a specific legatee of the
788
§ 832-§ 1011] DEATH OF SHAREHOLDER § 977
books is liable for calls made after the decedent's death, even
though the company's regulations provide that an executor or
administrator shall not be a shareholder nor entitled to the rights
of a shareholder.' In the absence of a direction to the contrary,
calls made after a testator's death upon shares bequeathed
specifically should as between the specific legatee and the resid-
uary legatee be paid by the former; ^ but if payment of the calls
be necessary to constitute the testator a complete shareholder
the rule is different.^ If the will contain a direction that debts
shall be paid out of the real estate, calls made after the testator's
death must be borne by the realty to the exoneration of the per-
sonal estate.* Any liability of the decedent's estate is terminated
when the shares are transferred to or devolve upon the legatee
or distributee.^ Of course, executors are Hable for any calls
made in the lifetime of the testator to the same extent as for any
other debt of the deceased."
Sometimes, the rights of executors or administrators of a de-
ceased shareholder who have not been registered in his place,
to receive dividends on the shares, to vote in respect thereof,
and to transfer the same, are taken away or abridged by statute.'
§ 977. Registration of Executor or Administrator as Share-
holder. — In order that the registration of an executor as share-
holder should have any effect, it must be accomplished by his
authority. The mere production of papers to prove the exec-
utor's title will not authorize the company to substitute his
name for that of the testator in the register of shareholders.*
' Houldsworth v. Evans, L. R. 3 As to the case where the shares are
H. L. 263; Baird's Case, 5 Ch. 725. bequeathed to one for Hfe with re-
' Day V. Day, 1 Dr. & Sm. 261 mainder over, see infra, § 1110.
Armstrong v. Burnet, 20 Beav. 424; ' Day v. Day, 1 Dr. & Sm. 261
Addams v. Ferick, 26 Beav. 384 (semble); Armstrong, v. Burnet, 20
(where the call although determined Beav. 424 (semble).
upon before the testator's death * Blount v. Hipkins, 7 Sim. 51
was not deemed to be made until (where the testator had expressly
afterwards) ; Re Box, 1 Hem. & covenanted to pay the calls).
Mill. 552, 555 (semble). = See infra, § 979.
See 1 Lindley on Companies, 6th ° HoiCldsworth v. Evans, L. R. 3
ed., 739-740. As to laying by a re- H. L. 263.
serve fund to meet future calls which ' Barton v. London & N. W. Ry.
ought to be borne by the general Co., 24 Q. B. D. 77 (applying the
estate, see Jacques v. Chambers, 4 Companies Clauses Act).
Eng. Ry. & Can. Cas. 499; Went^ « Buchan's Case, 4 A. C. 549.
wirrth v. Chevill, 3 Jur., n. s., 805. Cf. Dana v. American Tobacco Co.
789
§ 978 THANSFER AND TRANSMISSION [ChAP. XV
The ordinary and regular method of putting the shares into the
name of the executor is as follows : the executor signs a transfer
in the ordinary form to himself as executor; this transfer to-
gether with the testator's share-certificate and a certificate from
the proper court of the grant of letters is presented to the com-
pany, and the appropriate entries are thereupon ^nade.' The
registration of an executor as shareholder in the room of his
testator is not the registration of a transfer within the meaning
of regulations authorizing the company to decline to register
a transfer by a shareholder who is indebted to it or requiring
all transfers to be executed by the transferor and the transferee.^
The registration of an executor in his capacity of executor in
respect of shares owned by the testator — an entirely proper
proceeding — should be distinguished from a registration of
the shares in the name of the executor individually, which may
amount to a devastavit or tortious conversion of the shares on
his par't.^
§ 978. Rights and Liabilities of Executor or Administrator after
Eegistration as Shareholder. — If the executors of a deceased
shareholder have the shares registered in their own name, though
as executors, they become virtually trustees. For instance, they
become liable personally for any calls made while the shares
stand in their names. ^ So, one of two co-executors whose names
are entered upon the register of shareholders as such has no more
power to transfer the shares without the concurrence of his
fellow than one of two co-owners not executors would have, not-
withstanding the common law rule that one of two co-executors
may transfer any part of the estate without the concurrence of
his colleague.^
§ 979. Devolution of Title from Executor to Legatee. — It
would seem that a transfer from an executor to a legatee should
(N. J.), 65 Atl. 730 (letter from Bank v. Aronstein, 117 Fed. 601, 606^
administrator to company respecting 54 C. C. A. 663.
payment of dividends not sufficient ' Holland v. Ball (Mass.), 78
to charge the corporation with the N. E. 772.
duty of registering him as share- * Buchan's Case, 4 A. C. 549;
holder or of taking notice of his Leeds Banking Co., 1 Ch. 231.
address), affirmed, 69 Atl. 223. " Barton v. London & N. W. Ry.
» Cf. Colonial Bank v. Cady, 15 Co., 24 Q. B. D. 77. Qucere: Is this
A. C. 267. See supra, § 900, for decision applicable in America, or
statement and criticism of this case, does it depend entirely upon the
' London, Paris <fe American peculiar terms of English statutes?
790
§ 832-§ 1011] SALES BY EXECUTORS § 981
be governed by the same rules as any other transfer. Thus,
where under the statutes or internal regulations by which the
company is governed, the directors have power to decUne to
register a transfer to a person whom they disapprove, it has
been held that they may refuse to register a transfer from the
executor of a deceased shareholder to the residuary legatee.^ To
be sure, in an early Maryland case, it was held that the assent
of an executor to a bequest of shares ipso facto vests the legal
title in the legatee without the necessity of an entry on the books,
just as in the case of an ordinary chattel ; ^ but on principle and
according to the authority of the Federal Supreme Court a legatee
or distributee must be registered as shareholder before he can
be deemed to be clothed with complete legal title.' If a transfer
is made to a distributee in pursuance of a decree of distribution
which is reversed on appeal the title of the executor revives."
§ 980. Requisites of formal Transfer by Executors. — A
written transfer signed by an executor with hi& individual name
merely will pass shares which he holds as executor.^ A transfer
by one of several co-executors without the joinder of his col-
league will pass shares owned by the decedent's estate, and the
corporation is therefore under no liability for registering such
a transfer."
The effect of a transfer in blank by executors in raising an
estoppel in favor of a transferee has been already considered.'
§ 981. Sales of Shares by Executors. — Inasmuch as execu-
tors and administrators have at common law full power to sell
any assets of the decedent, the company will incur no liability
for registering a transfer by an executor which is, or is reason-
' South Yorkshire Wine Co., 8 840; Baker v. Beach, 85 Fed. 836;
Times L. R. 413. Burr v. Sherwood, 3 Bradf. (N. Y.)
^ Farmers', etc. Bank v. Iglehart, 85.
6 eiU (Md.) 50. " Ashton v. Zeila Mining Co., 134
Cf. Cooper V. Illinois Central R.R. Cal. 408; 66 Pac. 494; Ashton v.
Co., 38 N. Y. App. Div. 22, 25-26; Heggerty, 130 Cal. 516.
57 N. Y. Supp. 925; Jones v. " Mahaney v. Walsh, 16 N. Y.
Atchison, etc. R. R. Co., 150 Mass. App. Div. 601; 44 N. Y. Supp. 969.
304; 23 N. E. 43; 5 L. R. A. 538. ° Lowry v. Commercial, etc. Bank,
' Matteson v. Dent, 176 U. S. 521, Taney 310, 330 (semble). But of.
530-532 (headnote inadequate) ; 20 Barton v. London & N. W. Ry. Co.,
Sup. Ct. 419 ; People's Hom^ Sav. 24 Q. B. D. 77 (stated supra, § 978).
Bank v. StadtmvUer (Cal.), 88 Pac. ' Supra, § 900.
280.
Cf. Tourtelot v. Finke, 87 Fed.
791
§ 982 TRANSFER AND TRANSMISSION [ChAP. XV
ably supposed to be, a bona fide sale for purposes of administra-
tion, even though the purchase money be afterwards misapplied
or indeed even though the supposed sale be in fact fraudulent
or colorable merely.' For this reason, when a transfer by an ex-
ecutor or administrator to a purchaser is presented for registra-
tion, the company cannot properly insist upon any evidence of
the transferor's authority to make the transfer.^ Moreover,
although a statute prohibit an administrator from selling at
private sale, the company incurs no liability for registering in
good faith a transfer in pursuance of a private sale.^ An exec-
utor has of course no right to pledge the assets of the estate;
and if he undertake to pledge shares belonging to the estate, the
company may and should refuse to register a transfer to the
pledgee or by the pledgee to any person cognizant of the facts.*
§ 982. Marriage of Female Shareholder. — The law of trans-
mission of shares by the marriage of a female shareholder has
been so generally altered by statute that it may now fairly be
regarded as obsolete and interesting rather to antiquarians than
to practising lawyers. Shares being personal property of the
kind known as choses in action, the husband had the right to
reduce them to possession, and thus make himself absolute
owner.'^
§ 983. Bankruptcy of Shareholder. — Upon' the bankruptcy of
' Wooten V. Wilmington, etc. R. the text that the next of kin may
Co., 38 S. E. Rep. 298 (semble) ; 128 file a bill to compel the company to
N. C. 119; 56 L. R. A. 615; Hutch- discover the name of the transferee,
ins v. State Bank, 12 Met. (Mass.) and may join the company as de-
421; Cox V. First Nat. Bank, 119 fendant to a bill to compel the trans-
N. Car. 302 ; 26 S. E. 22 ; Lowry v. feree to restore the shares to the
Commercial, etc. Bank, Taney 310. estate).
Of. Marbury v. Ehlen, 72 Md. ■* Davis v. Nat. Eagle Bank (R.
206; 19 Atl. 648; 20 Am. St. Rep. I.), 50 Atl. 530.
467 (distinguishing Albert v. Sav- = WeUs v. Tyler, 25 N. H. 340;
ings Bank, 2 Md. 159) ; Stewart v. Graham v. First Nat. Bank, 84 N. Y.
Firemen's Ins. Co., 53 Md. 565. 393; 38 Am. Rep. 528 (as to the
' Bayard v. Farmers', etc. Bank, right of the husband to collect divi-
52 Pa. St. 232 (semble). dends due his wife); Burr v. Sher-
= South-Western R. R. Co. v. wood, 3 Bradf. (N. Y.) 85. See also
Thomason, 40 Ga. 408 (holding in supra, § 834.
addition to the proposition stated in
792
§ 832-§ 1011] BANKRUPTCY OF SHAEEHOLDKRS § 983
a shareholder, the title devolves upon the assignee or trustee, '
who, however, may refuse to accept the shares if he deem the
ownership onerous rather than advantageous.^ The devolution
of ownership upon the assignee or trustee in bankruptcy is
"transmission" as distinguished from "transfer," and hence
the company cannot decline to register the trustee in bank-
ruptcy under a power to decline to register a transfer by any
member who is indebted to it.' The .bankrupt remains the
owner of the shares, so far as the company is concerned, until
the name of the assignee or some note of the bankruptcy is
entered on the company's register ; and hence, until that time,
notices of calls, forfeitures, and the like may be validly served
on the bankrupt even though the company have notice of the
bankruptcy.* The company may accordingly be required to
register an undischarged bankrupt as shareholder unless the
assignee or trustee object.^ Moreover, a bona fide purchaser
from the "bankrupt will, when duly registered as shareholder,
have a better title than the trustee in bankruptcy." But the
shares cannot be attached on a proceeding against the bank-
rupt even though they still stand in the bankrupt's name.'
The company may be required by the assignee in bankruptcy
to issue to him a share-certificate, and if a sufficient bond of
indemnity be given, this may be done even though the bank-
rupt's certificate has been abstracted by the bankrupt and has
never been cancelled or surrendered to the company.' Where
the assignee or trustee disclaims ownership of the shares they
are, it seems, forfeited to the company.*
• The fullest consideration of * Graham v. Van Diemen's Land
this subject, confined of course to Co., 1 H. & N. 541.
the English law, is contained in 1 But see Sutton v. English & Col-
Lindley on Companies (6th ed., p. onial Produce Co. (1902), 2 Ch. 502.
746 et seq.), Bk. Ill, Chap. 8. ' Sutton v. English & Colonial
' Supra, § 771. As to the rights Produce Co. (1902), 2 Ch. 502.
of a trustee in bankruptcy to divi- ° London & Provincial Td. Co.,
dends, see Bryan v. Sturgis Nat. 9 Eq. 653.
Bank (Tex.), 90 S. W. 704. ' French v. White (Vt.), 62 Atl. 35.
' Bentham MUls Co., 11 Ch. D. * Wilson v. Atlantic, etc. R. R.
900; W. Key & Son (1902), 1 Ch. Co., 2 Fed. 459.
467 (trustee in bankruptcy entitled » Ex parte HaUett, 1 Manson 380.
to be registered without addition of But cf. Glenn v. Howard, 65 Md.
note indicating the company's claim 40 (where the title was held to re-
ef a hen for a disputed debt). Cf. main in the bankrupt, who was ac-
Ex parte Harrison, 28 Ch. D. 363. cordingly liable for subsequent calls).
793
§ 984 TRANSFER AND TRANSMISSION [ChAP. XV"
§ 984. Transmission or Devolution under Special Statute. —
Shares may be transmitted or devolved in consequence of some
special statute. As respects shares owned by private persons,
any such statute would ordinarily be obnoxious in America to
constitutional objections, and would be so foreign to Anglo-
Saxon conceptions of justice that it could never be passed by a "
British parliament. But where shares are owned by some public
corporation, the case is different. For instance, a statute enact-
ing that upon a certain day a school-board or other quasi-public
body shall be "abolished" and its property "transferred" to a
municipal corporation, has the effect of investing the latter cor-
poration with complete legal title to stocks owned by the school-
board and registered with the Bank of England, without the
execution of any written transfer and without any registered
transfer on the books of the Bank of England.^
§ 985-§ 994. TRUSTS of shares and equitable interests
IN SHARES.
§ 985. Relevancy of Subject — Scope of Treatment. — The
subject of trusts of shares, or of equitable interests in shares^ is
closely connected with the subject of transfers of shares. Indeed,
in almost every case of transfer of shares, the equitable title vests
in the transferee some time before the legal title passes. Trusts
of shares are governed by no peculiar principles not applicable
to trusts in general,^ and of course an attempt to state even in
outline the general law of trusts would be wholly out of place
here. The only attempt will be to set forth briefly the applica-
tion of the general principles of the law of trusts to the peculiar
circumstances of trusts of shares.
' Oldham Corporation v. Bank of shares in such a company specifically
England (1904), 2 Ch. 716. bequeathed to two or more co-
' As to the power of trustees to trustees may lawfully be allowed to
invest in stocks or shares, see 1 stand in the name of one of them.
Perry on Trusts, 2d ed., § 455, § 456. Consterdine v. Consterdine, 31 Beav.
Even where two or more co-trustees 330. As to whether trustees of
are empowered to invest in shares, shares may hold shares in subsidiary
they are not authorized to invest in companies distributed to them upon
shares of a company which cannot a reduction of the capital of the
be registered in the names of two principal company, see supra, § 665
or more persons as co-owners, but note.
794
§ 832-§ 1011] TRUSTS OF SHARES § 988
§ 986. Theory o£ a Trust applied to Shares. — According to the
theory of a trust, a trustee is a person who with respect to
certain particular property is bound as between himself and
another person, called the cestui que trust, to exercise his rights
of ownership for the benefit of that other person. In other
words, a trustee is a person who, owning certain property,
holds for the benefit of another person.' Hence, the trust is
something with which the company and other third persons
have nothing whatever to do, beyond refraining from any action
which could be construed as participation or connivance in a
breach of trust. The trustee and not the cestui que truM is the
person whom the company recognizes as the owner of the shares.^
Thus, the trustee and not the cestui qu£ trust is entitled to vote
in respect of the shares.^ For this reason, a trustee is liable
personally as a shareholder although the shares stand on the
register in his name as trustee.^ The cestui que trvM is not a
person "entitled to shares as against the company "; ^ his right
is against the trustee alone. Hence, it is deemed a matter of
entire indifference to the company who may be cestui que trust
of its shares : " the trustee is the person with whom alone the
company has to deal.
§ 987. Tendency of American Courts to depart from this Prin-
ciple. — Undoubtedly, many American courts would not follow
out logically this theory of a trust, but would treat the trustee
as, so to speak, a personification of the trust estate, the estate
iaeing regarded as constituting, as it were, a legal entity.
§ 988. The Principle emphasized in England — Companies Act,
1862, § 30. — In England, however, the principle is not merely
accepted and applied but is even extended and emphasized by
custom and reinforced by statute. Section 30 of the Companies
Act, 1862, provides that, in the case of English or Irish as dis-
tinguished from Scotch companies, no notice of any trust, ex-
pressed, implied, or constructive, shall be entered on the register
of members or be receivable by the registrar. By a narrow con-
'■ Conversely, a person who holds ' See infra, § 1223.
shares or other property "for the * Muir v. City of Glasgow Bank,
behoof of" another is a trustee. 4 A. C. 337. See supra, § 767.
Gillespie v. City of Glasgow Bank, 4 » Re Perkins, 24 Q. B. D. 613.
A. C. 632. ' BeU Bros., 65 L. T. 245, 248.
' Cf. Sylvania, etc. B. Co. v. Hoge
(Ga.), 69 S. E. 806.
795
§ 988 TRANSFER AND TRANSMISSION [ChAP. XV
struction of this statute, it might have been held that while the
company was exempted from any obligation to enter the trust
on the register, so as to afford notice thereof to all persons
inspecting the register, still it should not be relieved from the
duty of itself recognizing any trusts or equities of which it
might have notice from any source. Such, however, has not
been the construction adopted by the courts. The act exon-
erates the company from registering an absolute transfer from
a trustee to the tenant for life to the prejudice of the remain-
dermen, although the company had notice of the terms of the
trust.' On the other hand, the statute does not authorize the
company wantonly to disregard the equities of the cestui que
trust. For instance, if the company has under its regulations
a lien upon its shares for the debts of the holders, it may not
set up its lien to the prejudice of the cestui que trust in respect
of advances made after it had actual notice of the trust.^ On
the other hand, perhaps, even this latter almost unreasonable
power may be conferred upon the company by an explicit
provision in the articles of association.^
The section of the Companies Act which we are now consider-
ing had its origin and prototype in a custom or by-law of the
Bank of England, which refused (and still refuses) to enter upon
its books any trusts of stock.' The principle which lies at the
root of the statute is very far-reaching; and oftentimes it is
difficult to determine whether a decision of an English court as
to equitable interests in shares rests upon this statutory pro-
vision or upon general principles of company law.^
Lord Coleridge, in terms which are not inapplicable in Amer-
ica, has forcibly expressed the importance of recognizing that
the trustee is the only person with whom the company has any-
thing to do and that whether he holds the shares beneficially
' Simpson v. Molson's Bank * Cf. Law Guarantee Soc. v. Bank
(1895), A. C. 270, 279 (construing a of England, 24 Q. B. D. 406.
Bimilar provision in a Canadian " For cases in which the decision
statute). has been more or less affected by
' Bradford Banking Co. v. Briggs, the statutory provision, see Re Per-
12 A. C. 29; McLaughlin v. Bank of kins, 24 Q. B. D. 613; Societe Gen^
Victoria, 20 Vict. L. R. 433. erale de Paris v. Tramways Union,
' Cf. New London Bank v. Brock- 14 Q. B. D. 424; Barton v. London
lebank, 21 Ch. D. 302. 'See & N. W. By. Co., 24 Q. B. D. 77.
Palmer's Company Law, 3d ed.,
pp. 113-117.
796
§ 832-§ 1011] TRUSTS OF SHARES § 989
or upon trust is no concern of the company. "It seems to me,"
said that learned judge, "extremely important not to throw any
doubt on the principle that companies have nothing whatever
to do with the relations between trustees and their cestuis que
trust in respect of the shares of the company. If a trustee is on
the company's register as a holder of shares, the relations which
he may have with some other person in respect of the shares
are matters- with which the company have nothing whatever to
do. They can only look to the person whose name is on the
register." '
§ 989. Obligation of Company to protect Cestui Que Trust of
Shares. — Apart from provisions such as that found in the
British Companies Act of 1862, based upon the rule of the Bank
of England and referred to above, a corporation is undoubtedly
bound like any other person to respect equitable rights of which
it has notice.^ It is liable to the cestui que trust if after notice
of the trust it permits the trustee to deal with the shares in a
way inconsistent with the just rights of the cestui qu£ trust ;^
and may therefore refuse to register any transfer which it knows
to have been executed by the trustee in disregard of his trust.*
A local custom to the contrary will not have effect, at any rate
not unless shown to have been known to the cestui qu£ trust?
For instance, if the company issues to the trustee a share-cer-
tificate which does not indicate on its face the existence of the
trust, whereby the trustee is enabled to convey the shares to a
purchaser for value, the company must make good the cestui
que trust's loss.° So, if the company, being charged witlj notice
of a trust for A for life with remainder over, registers the shares
in the name of the trustee as "trustee for A," thus enabling the
• Re Perkins, 24 Q. B. D. 613, ' Geyser-Marion Co. v. Stark, 106
616. Fed. 558; 45 C. C. A. 467; Mar-
' Lowry v. Commercial, etc. Bank, bury v. Ehlen, 72 Md. 206; 19 Atl.
Taney 310, 335; Guarantee Co. v. 648; 20 Am. St. Rep. 467; Stewart
East Rome Tovm Co., 96 Ga. 511 ; 23 v. Firemen's Ins. Co., 53 Md. 565.
S. E. 503; 51 Am. St. Rep. 150; Ci. Bank of Kentucky w. Winn, &l
Bayard v. Farmers', etc. Bank, 52 Pa. S. W. 32; 110 Ky. 140.
St. 232. * Young v. New Standard Con-
But see Sylvania, etc. R. Co. v. centrator Co. (Cal.), 83 Pac. 28.
Hoge (Ga.), 59 S. E. 806 (holding ' Geyser-Marion, etc. Co. v. Stark,
that the company cannot refuse to 106 Fed. 558; 45 C. C. A. 467.
recognize a transfer in violation of a ' Loring v. Salisbury Mills, 125
pooling agreement between share- Mass. 138.
holders).
797
§ 990 TRANSFER AND TRANSMISSION [ChAP. XV
trustee to transfer the shares to A, and enabUng A to transfer
to bona fde purchasers, the company must make good the loss
to the remainderman.'
§ 990. What amounts to Notice of Existence and Terms of Trust.
— What will amount to notice of a trust or of the terms of a
trust of shares, is a question upon which the authorities are not
agreed.^ The question would seem to be governed by no pecu-
liar principles applicable to shares and not to other species of
property. Where the trust is created by the will of a deceased
shareholder, the company's knowledge of the existence of a will
has been held to be constructive notice of the contents of the
will, and consequently of the terms of the trust,' so that a reg-
istration of a transfer from the executors to a legatee without
protecting all the cestuis que trust will be wrongful.* The
fact that a share-certificate states that the shares represented
thereby are held "in trust "is sufficient to charge the company
and any transferee with notice of the trust so as to prevent the
transferee from claiming the rights of a purchaser for value in
opposition to the cestui que trusty and to render the company
liable if it registers the transfer without ascertaining the power
of the trustee to make the transfer," and a fortiori where the
person described as trustee pledges the shares to secure his indi-
vidual debt the pledgee is not deemed a bona fde purchaser.'
' Wooten V. Wilmington, etc. B. suppose that the transfer by execu-
Co., 38 S. E. 298 (N. Car.) ; 128 N. C. tors is a sale for purpose of admin-
119; 56 L. E,. A. 615. istration, this liability would not
" Cf. Simpson v. Molson's Bank attach. See supra, § 981.
(1895), A. C. 270; Spelissy v. Cook ' Bank of Montreal v. Sweeny, 12
& Bernheimer Co., 58 N. Y. App. A. C. 617.
Div. 283; 68 N. Y. Supp. 995. Cf. Prall v. Tilt, 28 N. J. Eq. 479;
' Cavlkins v. Gas-Light Co., 85 First Nat. Bank v. National Broad-
Tenn. 683; 4 S. W. 287; 4 Am. St. way Bank, 15& N. Y. 459; 51 N. E.
Eep. 786; Marbury v. EMen, 72 398; 42 L. R. A. 139; Johnson v.
Md. 206; 19 Atl. 648; 20 Am. St. A?n6erson, 37 So. 273; 140 Ala. 342.
Rep. 467; Stewart v. Fireman's Ins. ° Geyser-Marion, etc. Co. v.
Co., 53 Md. 565, 575-576; Lowry v. Stark, 106 Fed. 558; 45 C. C. A.
Commercial, etc. Bank, Taney 310. 467; Marbury v. Ehlen, 72 Md. 206;
' Wooten V. Wilmington, etc. R. 19 Atl. 648; 20 Am. St. Rep. 467
Co.,38S. E. Rep. 298 (N. Car.); 128 (distinguishing Albert v. Savings
N. C. 119; 56 L. R. A. 615. Bank, 2 Md. 159, which latter case
Cf. Cavlkins v. Gas-IAght Co., 85 is reafl&rmed in Grafjiin v. Robb, 84
Tenn. 683; 4 S. W. 287; 4 Am. St. Md. 451; 35 Atl. 971).
Rep. 786. ' Shaw v. Spencer, 100 Mass.
If the company has reason to 382; 97 Am. Dec. 107; 1 Am. Rep.
798
§ 832-§ 1011] TRUSTS OF SHAKES § 992
But other cases hold that the word "trustee" alone is not suffi-
cient to put a purchaser on inquiry/ and some few apply the
same rule even in cases of hypothecation by the person named
as trustee to secure his own debt.^ According to all the authori-
ties where the name of the cestui que trust is communicated to
the corporation, it is bound to protect his rights.^ But if the
share-certificate does not disclose the existence of the trust, the
purchaser is not bound to examine the books of the company
in order to see whether the shares be held in trust.* The mere
fact that shares are held by two or more persons jointly is no
indication of the existence of a trust.^
§ 991. Liability of Trustee's Bond. — If the trustee has given
bond for the faithful performance of his trust, the bond is of
course answerable for any wrongful transfer by the trustee.
Prima facie, the measure of damages would be the value of the
shares transferred ; but if the company was party to the breach
of trust and has been compelled to pay the value of the shares,
the bondsmen are liable for no more than nominal damages.'
They cannot, it was held, be made liable under the bond for
the benefit of the company, which is regarded as a joint tort-
feasor in confederation with the misconducting trustee. This
was held in a case where the transfer by the fiduciary was invalid
under a statute which avoided any transfer by a guardian made
without a prior order of court sanctioning it. The decision was
a harsh one, inasmuch as the corporation did not appear to have
been guilty of any intentional wrongdoing, and a fortiori the
same rule would apply where the company knowingly connives
at a wrongful transfer by a trustee.
§ 992. Change of Trustees. — A resignation of a trusteeship
and the substitution of another trustee partakes of the nature
of a transfer of the trust shares. The mere resignation of the
115; Budd v. Munroe, 18 Hun (N. ' Brewster v. Sime, 42 Cal. 139;
Y.) 316; Clemens v. Heckscher, 185 Thompson v. Toland, 48 Cal. 99.
Pa. St. 476; 40 Atl. 80. ' Bayard v. Farmers', etc. Bank,
But cf. Ashton v. Atlantic Bank, 52 Pa. St. 232.
3 Allen (Mass.) 217. * Salisbury Mills v. Townsend,
' GrafP-in v. Robb, 84 Md. 451; 109 Mass. 115; Lowry v. Commer-
35 Atl. 971 (distinguishing Marbury cial, etc. Bank, Taney 310.
V. EMen, 72 Md. 206; 19 Atl. 648; = See infra, § 1008.
20 Am. St. Rep. 467; and reafi&rm- » State use Murray v. Murray,
ing Albert v. Savings Bank, 2 Md. 24 Md. 310; 87 Am. Dec. 608.
159).
799
§ 993 TRANSFER AND TRANSMISSION [ChAP. XV
trust does not cause the trustee to cease to be a shareholder or
relieve him from a shareholder's liabilities.' It is not even
enough that his resignation is communicated to the directors;
there must be a transfer by the resigning trustee or something
in the nature of a transfer, in order that the trustee's liabilities
as shareholder may terminate.^ An execution, by two Scotch
trustees of shares, of a deed "assuming" new trustees, followed
by a note on the stock ledger giving the names of the "assumed"
trustees and entered with their consent, is equivalent to a trans-
fer into the names of the new trustees and renders them share-
holders in the company.^
§ 993-§ 994. Assignments of Equitable Interests in Shares.
§ 993. In general. — ■ A cestui que trust or equitable owner of
shares may of course assign his interest; but since the shares
stand in the name of the trustee, to whom also the certificate is
issued, the cestui qxie trust cannot deliver or endorse the certifi-
cate to his transferee, and cannot clothe his transferee with the
right to demand that the company register him as shareholder.
The utmost right that a cestui qu£ trust can confer upon the
transferee is the right to require the trustee to execute a transfer
and deliver to him the certificate, to the end that he may be reg-
istered as legal owner of the shares ; and even this can be done
by the cestui que trust only in the case of a bare trust. The
transfer of a cestui que trust's interest is naturally accomplished
by very different means from those employed where the legal
title is to be transferred. An assignment of the cestui qus trust's
interest, like "all grants and assignments of any trust or confi-
dence," is required, by the ninth section of the Statute of Frauds,
to "be in writing signed by the party granting or assigning the
same or else shall ... be utterly void and of none effect."
With this exception, no form or ceremony is requisite. Even if
the assignment be gratuitous, it is irrevocable from the execu-
tion and delivery of the written transfer, without any further
act or ceremony ; * for a voluntary transfer of an equitable
• A. Mitchell's Case, 4 A. C. 548; ' Bell's Case, 4 A. C. 547.
Rutherford's Case, 4 A. C. 548 ; Ker's * Nanney v. Morgan, 37 Ch. IX
Case, 4 A. C. 549. 346.
' A. Mitchell's Case, 4 A. C. 548;
Buthm-ford's Case, 4 A. C. 548.
800
§ 832-§ 1011] ASSIGNMENTS OF EQUITABLE INTERESTS § 994
right is complete as soon as the assignor has done everything
that the nature of the case admits of to put the subject of the
gift out of his control and within the dominion of the assignee.
In order to perfect the assignment, it may be necessary for
the assignee to notify the trustee, but it is not necessary to give
notice to the company.' As the assignment does not confer any
legal as distinguished from equitable rights, the transferee is not
entitled to stand as a purchaser of the shares without notice of
an outstanding prior equity superior to the title of the trustee
or person in whose name the shares stand. ^
§ 994. Assignments by Shareholders who have assented to Vot-
ing Trusts, Reorganization Schemes, etc. — The law of- assign-
ments of equitable interests in shares has been applied in cases
of voting trusts, reconstruction and amalgamation schemes, and
similar arrangements. The shareholders who put their shares
into the trust or pool receive from the trustees certain certifi-
cates or scrip which really represent equitable interests in the
shares and which are intended to be and are assignable in much
the same way as the shares themselves would be.^ The trust-
certificates or scrip are to be treated, as far as possible, like
share-certificates. Like them, they are assigned by endorsement.
The assignment is consummated by an entry on the transfer
books of the trust or pool. The duty of the trustees to enter
the transfer on the books is the same as that of a corporation to
enter on its books a transfer of its shares ; and the duty is en-
forceable in the same way.* If the trust is illegal, it may be
revoked at any time by the holders of the trust certificates; and
a transferee has the same right in this respect as an original
holder.* If the trustee or depositary under a reorganization
scheme issues a certificate to one who falsely represents himself
to be owner of certain of the deposited shares, nevertheless the
true owner of the shares in question (who had not assented to
' HoiLser v. Richardson, 90 Mo. ' Cf . Hubbard v. Manhattan Trust
App. 134. Co., 87 Fed. 51, 57-58; 30 C. C. A.
Cf. Etty V. Bridges, 2 Y. & Colly. 520, and also supra, § 237.
Ch. 486 (relating to an equitable in- * Rice v. Rockefeller, 134 N. Y.
terest in bank annuities or stock, 174; 31N. E. 907; 30 Am. St. Rep.
not capital stock of the company, 658; 17 L. R. A. 237.
where there was no trustee in " Shepaug Voting Trust Cases, 60
existence). Conn. 553; 24 Atl. 32.
' Barker v. Montana Gold, etc. Co.
(Mont.), 89 Pac. 66.
VOL. I. — 51 801
§ 995 TBANSFEE AND TRANSMISSION [ChAP. XV
the reorganization plan) cannot compel the trustee or deposi-
tary to issue to him the securities in the new company repre-
sented by the certificate, unless the certificate be first actually
delivered up; and this is true even though the holder of the
certificate be a party to the suit and be ordered by decree to
surrender the certificate; for if he should disobey the decree,
the trustee would be liable to a bona fide transferee of the
certificate.'
§ 995-§ 1005. PLEDGES AND MORTGAGES OR HYPOTHECATION
OF SHARES.
§ 995. Confusion in Law of Mortgages in general. — The law of
mortgages and similar charges in the United States is involved
in great confusion, irrespective of the nature of the mortgaged
property — whether real estate, persopal chattels, or choses in
action. In some states a mortgage is deemed a conveyance of
the legal title to the mortgagee ; in others it is regarded, even at
law, as a mere lien. In some states the distinction between law
and equity has been obliterated, while in others it is preserved
in all its sharpness. Although substantial justice is accomplished
almost everywhere, the uncertainty as to the theory upon which
the results are reached is far from creditable to American juris-
prudence. That this confusion which envelops the whole
law of mortgages should be intensified when the law is applied
to property of so peculiar a kind as shares in incorporated
companies is not surprising.
§ 996. Difficulty in applying general Principles of Law to Mort-
gages and Pledges of Shares — Distinction between " Pledge" and
" Mortgage " of Shares. — As applied to shares, even the logi-
cal simplicity of the English common law of mortgages and
pledges becomes uncertain and intricate. For one thing, there
is, as we have seen above, considerable uncertainty and conflict
of authority in respect to what formalities if any are necessary
in order to effect a transfer of the legal title to shares. More-
over, transfer of possession is a sine qua non of a valid pledge
of personal property; and, in the existing state of the authori-
ties, who can say what are the elements of possession of the
• Bean v. Am. L. & T. Co., 122 N. Y. 622; 26 N. E. 11.
802
§ 832-§ 1011] PLEDGES OF SHARES §997
incorporeal personal property known as shares or stock ? ' In-
deed, some authorities have gone so far as to maintain that
shares in corporations, not being capable of possession, cannot
be the subject of a pledge. Certain it is that the use of the
terms "mortgage," "pledge," etc., as applied to shares is more
libely to mislead than instruct. From the fact that shares held
as collateral security are said by one court to be "pledged,"
and by another to be "mortgaged," no inference can safely be
drawn that the rights of the parties would be held to be differ-
ent by the two tribunals. Terms which are useful as applied to
charges upon land or personal chattels are worse than useless
as applied to shares. Hence, to discuss which charges or liens
upon shares iu a corporation are properly denominated "mort-
gages" and which "pledges" would be largely a waste of time
and battle about words.^ The term "pledge" is frequently used
in this work, for want of a better word, to designate a charge or
lien upon shares ; but the word is used as a generic term and not
in any technical sense, as distinguished from a mortgage, equi-
table charge, or security of a different nature. All such classi-
fications will be disregarded as unfortunate and misleading;
and in lieu thereof a classification suited to the peculiarities of
shares in incorporated companies will be adopted.
§ 997. Classification of Charges or Liens upon Shares. —
Charges or liens upon shares may, then, be divided into five
classes: (1) where there is an agreement, oral or written, that
the shares shall be held as security for a debt, no formal transfer
being executed and the indicia of ownership, notably the share-
> Supra, § 834. v. Gilbert, 173 lU. 348; 50 N. E.
' Cf. Barse^ Live Stock Co. v. 1087; Manns v. Brookmlle Nat.
Range VaUey Cattle Co., 16 Utah 5Q; Bank, 73 Ind. 243; Campbell v.
50 Pac. 630 (hypothecation of shares Woodstock Iron Co., 83 Ala. 351; 3
in ordinary way held not to be within So. 369 ; Greene v. Dispeau, 14 R. I.
a chattel mortgage act) ; Hasbrouck 575, 576 ; Bryson v. Rayner, 25 Md.
V. Vandevoort, 4 Sa.ndi. (N. Y.) 74 424; 90Am. Dec. 69; Richardson v.
(where the court said that the trans- Longmont Supply Ditch Co., 19 Colo,
action was a pledge but that the App. 483; 76 Pac. 546; (hypotheca-
legal title passed to the pledgee) ; tion not a mortgage within meaning
WUson V. Little, 2 N. Y. 443; 51 Am. of statute limiting time for foreclos-
Dec. 307 ; Doak v. Bank of the State, ing chattel mortgages) ; Irving Park
6 Ired. Law (N. Car.) 309; Me- Ass'n v. Watson, 67 Pac. 945; 41
chanics Bldg., etc. Ass'n v. Conover, Oreg. 95 (hypothecation of shares
14 N. J. Eq. 219 (as to a pledge or not within statute relating to fore-
mortgage to the corporation); Rice closure of chattel mortgages).
803
§ 09S TRANSFER AND TRANSMISSION [ChAP. XV
certificate, being retained in the possession of the debtor;
(2) where the share-certificate is delivered to the creditor but
without any transfer or endorsement sufficient to enable the
creditor to have himself registered as the owner or to sell the
shares in the market, without some further act on the part of
the debtor ; (3) where the certificate is delivered to the debtor
coupled with a transfer or blank endorsement; (4) where the
shares are transferred to the creditor on the books of the com-
pany but coupled with an entry indicating that they are held
as collateral security merely, and (5) where the shares are
transferred to the creditor on the company's books, no
entry being made to indicate that they are held as collateral
security and no communication of that fact being made to
the company. We shall now consider the rights of the parties
in these several cases, without pausing to inquire whether
the transactions are more properly denominated pledges or
mortgages.
(1) § 998. Mere Agreement that Shares shall be held as
Collateral Security. — The transaction in this case evidently
amounts to no more than an executory contract to hypothecate
the shares for payment of the debt. Such a contract, however,
should, it is submitted, be enforced specifically in equity, so
that it may amount, virtually, to an equitable charge.' The
creditor obviously has no means of enforcing his rights, or of
obtaining any control over the shares without the aid of a court
of equity. Hence, if the debtor be a sovereign state and as such
exempt from suit, the creditor is without remedy to enforce the
charge or contract.^
• Schwind v. Boyce, 94 Md. 510; Pa. St. 579; 27 Atl. 662; LaOande
51 Atl. 45. Cf. Harris's Appeal, 12 v. Ingram, 19 La. Ann. 364; Siuxes-
Atl. Rep. 743 (Pa.); First Nat. sion of Lanaux, 46 La. Ann. 1036;
Bank v. Bacon, 113 N. Y. App. Div. 15 So. 708; 25 L. R. A. 577; Third
612; 98 N. Y. Supp. 717; Dexter Nat. Bank v. Buffalo German Ins.
Hwton & Co. V. McCafferty (Wash.), Co., 193 U. S. 581; 24 Sup. Ct. 524
84 Pac. 733. (agreement held, in accordance with
But see Atkinson v. Foster, 134 settled principles of law, inoperative
111. 472; 25 N. E. 528 (where the against a subsequent bona fide
lien was held invalid even in equity pledgee of the share-certificate),
as against the general creditors) ; ' Christian v. Atlantic & North
Nisbit v. Macon Bank, etc. Co., 12 Carolina R. R. Co., 133 U. S. 233
Fed. 686. Cf. Campbell v. Wood- (where the creditor attempted to
stock Iron Co., 83 Ala. 351; 3 So. proceed against the corporation).
369; Girard Trust Co. v. Mellor, 15&
804
§ 832-§ 1011] PLEDGES OF SHARES § 1000
(2) § 999. Agreement coupled with Delivery of Share-Certifi-
cate without Transfer or Endorsement. — In this case as in the
preceding, the creditor must resort to equity to obtain specific
performance of the contract of hypothecation. The mere pos-
session of the share-certificate does not enable him to transfer
the shares or to have himself registered as the owner.- It does,
however, enable him to embarrass the debtor if the latter should
attempt to dispose of the shares in violation of his agreement
with the former, and by refusing to surrender the certificate the
creditor may often extort from" the debtor either payment of the
debt or some more effective pledge of the shares. In such a
case as this, the creditor might be deemed a pledgee of the cer-
tificate considered merely as a chattel, and as such entitled to
hold the certificate precisely as the pledgee of a coat or a hat
would be entitled to do.^ However, it has been held that the
creditor may have a strict foreclosure, and is not limited to his
remedy by sale of the shares as an ordinary pledgee of a chattel
would be.^
(3) § 1000-§ 1002. Delivery of Share-Certificate coupled with
Transfer or Endorsement in Blank.
§ 1000. Rights of Creditor with respect to Third Persons. —
This case illustrates the ordinary method of hypothecating shares.
In many respects the creditor's rights are the same as those of
a transferee under an absolute transfer, to whom the share-
certificate has been delivered coupled with a transfer signed by
the transferor but who has not yet been registered as a share-
holder. This is certainly the case in so far as the rights and
liabilities of the pledgee with reference to the corporation or any
third person are concerned. For example, if the pledgor was a
trustee who was disposing of the shares in violation of his trust,
the question whether a person to whom the certificate has been
deUvered coupled with a transfer in blank is to be deemed a
bona fide holder for value without notice and therefore entitled
to hold the shares as against the cestui que trust is precisely the
' Cf. Wagner v. Marple, 10 Tex. Loveman v. Henderson, 1 Tenn. Ch.
Civ. App. 505; 31S. W. 691; NisUt App. 749.
V. Macon Bank, etc. Co., 12 Fed. 686; ' Harrold v. Plenty (1901), 2 Ch,
314.
805
§ 1001 TRANSFER AND TRANSMISSION [ChAP. XV
same whether the transfer be intended as absolute or as col-
lateral security merely. So, too, the question whether the holder
of the certificate with the endorsed transfer is to be preferred
to a person claiming under another transfer from the same
transferor is precisely the same whether the first-mentioned
transfer was absolute or by way of collateral security.
The debtor, being the registered owner, is entitled to collect
any dividends payable upon the shares.^ If, however, the cred-
itor notify the company of the hypothecation, he has been held
to be entitled to recover from the company any such dividends.^
The creditor under such circumstances has been allowed to
maintain the action even though the debt had been paid, the
theory of the court being that the amount collected would be
held for the use of the debtor; ^ but it would seem that the action
should have been brought in the debtor's name. If the debtor
collects dividends declared on the shares after the contract of
hypothecation, the creditor is entitled to require him to account
for the same, for such dividends are part of the creditor's
security.*
§ 1001. Rights of Creditor and Debtor Inter Sese. — The rights
of the debtor and the creditor inter sese in the case we are now
considering are as follows: The transfer in blank as collateral
security authorizes the creditor to fill up the blank with his
' H-iU V. Newichawanich Co., 8 cation liable over again to the cred-
Hun 459, affirmed on opinion below, itor) ; Central Nebr. Nat. Bank v.
71 N. Y. 593; Gemmdl v. Davis, 75 Wilder, 32 Nebr. 454; 49 N. W. 369
Md. 546; 23 Atl. 1032; 32 Am. St. (same point as last case).
Rep. 412. Cf. Gemmell v. Davi^, 75 Md. 546;
Cf. Hermann v. Maxwell, 47 N. Y. 23 Atl. 1032; 32 Am. St. Rep. 412.
Super. Ct. 347 (holding the debtor ' Guarantee Co. v. East Borne
a trustee of the dividends for the Town Co., 96 Ga. 511; 23 S. E. 503;
creditor); Meredith Village Savings 51 Am. St. Rep. 150.
Bank v. Marshall, 68 N. H. 417; 44 * Fairbank v. Merchants' Nat.
Atl. 526 (same point as preceding Bank, 132 111. 120, 134 (headnote
case); Fairbank v. Merchants' Nat. inadequate); 22 N. E. 524; Gaty y.
Bank, 132 111. 120; 22 N. E. 524 HoHidai/, 8 Mo. App. 118 (overruling
(holding that the creditor has no the objection that the creditor's only
claim to dividends declared prior to remedy was against the corporation
the pledge). whicfh had paid the dividends to the
' Gaty V. Holliday, 8 Mo. App. debtor after notice of the creditor's
118, 119 (semble); Guarantee Co. v. claim).
East Rome Town Co., 96 Ga. 511; Cf. Page Belting Co. v. Prirux
23 S. E. 503; 51 Am. St. Rep. 150 (N. J.), 67 Atl. 401; HigheU v.
(company paying dividends to Highett, 22 Vict. L. R. 352.
debtor with notice of the hypothe-
806
§ 832-§ 1011]
PLEDGES OF SHARES
§ 1001
own name as transferee and to have the transfer registered ; *
and if the company refuses to recognize him as shareholder he
may avail of any appropriate remedy that would have been
available if the transfer had been absolute instead of as col-
lateral security merely.^ Instead of putting the shares in his
own name, he may put them in the name of an agent or nominee.'
Whether the creditor must keep the hypothecated shares- sepa-
rate and distinct or whether he may mingle them indiscrimi-
nately with other shares of the same kind standing in his name
will depend on the terms of the contract as interpreted in the
light of the surrounding circumstances and of the customs or
usages of the trade.* Moreover, in England the creditor is
entitled to repledge the shares as security for his own indebt-
edness, conferring upon the second pledgee the right to hold
the shares as security until the first debt is paid off.* If a mort-
' Davies' Case, 33 L. T. 834; Fed. 366; 5 C. C. A. 134 (where the
Ex parte Sargent, 17 Eq. 273 (criti- debt was barred by limitations),
cised in France v. Clarke, 26 Ch. D. Cf. Wadlinger v. First Nat. Bank,
257); Skijf v. Stoddard, 63 Conn. 209 Pa. 197; 58 Atl. 359 (as to mak-
198,217-218; 26 Atl. 874; 28 Atl. ing the pledgor a party).
104; 21 L. R. A. 102; Union, etc. ' Dg,y v. Holmes, 103 Mass. 306;
Bank v. Farrington, 13 Lea (Tenn.) Hiatt v. Griswold, 5 Fed. 573, 576-
333; Day v. Holmes, 103 Mass. 306 577 (where the creditor transferred
(holding further that the creditor the shares from his own name in
may put the shares in the name of order to avoid liability as a share-
an agent); HvhbeU v. Drexd, 11 holder); Rankin v. Fidelity Trust
Fed. 115; Feige v. Burt, 118 Mich. Co., 189 U. S. 242, 252, 254; 23 Sup.
243; 77N. W. 928; 74 Am. St. Rep. Ct. 553; Higgins v. Fidelity Ins.,
390 (semble); Rich v. Boyce, 39 Md. etc. Co., 108 Fed. 475, 477; 46 C. C.
314 (custom to the contrary held
unreasonable and void); Davis v.
Hardwick (Tex.), 94 S. W. 359.
A. 509.
Cf. Terry v. Birmingham Nat.
Bank, 93 Ala. 599; V So. 299; 30
Cf. Commercial Bank v. Kart- Am. St. Rep. 87; Smith v. Becker
22 Wend. 348; 34 Am. Dec. (Wise), 109 N. W. 131.
* See supra, § 500.
» France v. Clark, 26 Ch. D. 257.
Contra: Westinghotise v. German
317; Horton v. Morgan, 19 N. Y,
170; 75 Am. Dec. 311.
But see contra : where no default
has been made in payment of the Nat. Bank, 188 Pa. St. 630; 41 Atl.
debt. Spreckds v. Nevada Bank, 113 734 (rehypothecation forbidden by
Cal. 272; 45 Pac. 329; 33 L. R. A. statute).
459; 54 Am. St. Rep. 348. Cf. State Cf. Fay v. Gray, 124 Mass. 500;
ex rel. Canal Bank v. North Amerir- Skiff v. Stoddard, 63 Conn.-198, 218-
can Land, etc. Co., 112 La..441; 36 220, 231; 26 Atl. 874; 28 Atl. 104;
So. 488.^ ' 21 L. R. A. 102; Price v. Cover, 40
2 Herbert Kraft Co. v. Bank of Md. 102, 115-116; Lawrence v.
Orland, 65 Pac. 143; 133 Cal. 64; MaxweU, 53 N. Y. 19; New York,
Miller v. Hmston City Ry. Co., 55 etc. R. R. Co. v. Dames, 38 Hun (N.
807
§1001
TRANSFER AND TRANSMISSION [ChAP. XV
gagee assumes to do more than this, he is exceeding his actual
authority, and his dealings with the shares can be sustained,
if at all, only on the principle of estoppel. That such an estoppel
will be raised in favor of a bona fide transferee of the certificate
is the general American rule.'
Tn general, we may say that the rights and remedies of the
parties are the same as in case of a pledge of tangible personal
property, leaving a detailed statement of such rights and reme-
dies to books which deal specifically with pledges of personal
property. For example, if default be made in payment of the
debt, the creditor may, as in case of pledge of tangible personal
property, if he be willing to assume the risk, sell the shares by
public sale"" although not by private sale;^ but must first
demand payment of the debt* and also must give the debtor
reasonable notice of the time and place of sale,^ any custom
Y.) 477; German Sav. Bank v. ijerc- Dairymple, 25 Md. 242; Rankin v.
shaw, 78 Md. 475; Oregon & Trans- McCidloug^ 12 Barb. (N. Y.) 103;
continental Co. v. Hilmers, 20 Fed. Tucker v. Wilson, 1 P. Wms. 261 ; 5
717. Bro. P. C. 193.
' McNeil V. Tenth Nat. Bank, 46 * WUson v. LitUe, 2 N. Y. 443;
N. Y. 325; 7 Am. Rep. 341; Brittan 51 Am. Dec. 307; Nabring v. Bank
V. Oakland Bank of Savings, 124 of Mobile, 58 Ala,. 204.
Cal. 282; 57 Pac. 84; 71 Am. St. But see Franklin Nat. Bank v.
Rep. 58; Westinghouse v. German Newcombe, 1 N. Y. App. Div. 294;
Nat. Bank, 188 Pa. St. 630, 632; 41 37 N. Y. Supp. 271 (where a definite
Atl. 734; Gilbert v. Erie Bldg. Ass'n time for payment was JBxed by the
(Pa.), 39 Atl. 291 (semble); Com^ contract).
mercial Bank v. Kortright, 22 Wend. ' Stenton v. Jerome, 54 N. Y. 480;
(N. Y.) 348; 34 Am. Dec. 317; Markhcfhi v. Jandon, 41 N. Y. 235;
O'Mara v, Newcomb (Colo.), 88 GUlettv. Whiting, 120 N.Y. 402; 2i
Pac. 167. See also supra, § 896. N. E. 790 (with which cf. s. c, 141
But see German Sav. Bank v. N. Y. 71; 35N. E. 939; 38 Am. St.
Benshaw, 78 Md. 475; Kern's Es- Rep. 762, where the objection was
tote, 176 Pa. St. 373 (headnote inade- held to have been waived); Stevens
quate) ; 35 Atl. 231. v. Hurlbut Bank, 31 Conn. 146 (no-
' Brown v. Ward, 3 Duer (N. Y.) tice of less than one day held in-
660. sufficient); Hempfling v. Burr, 59
' DUler v. Brubaker, 52 Pa. St. Mich. 294; 26 N. W. 496; Feige v.
498; 91 Am. Dec. 177; Baltimore Bur«, 118 Mich. 243; 77 N. W. 928;
Marine Ins. Co. v. Dairymple, 25 74 Am. St. Rep. 390; Conyngham's
Md. 269. Appeal, 57 Pa. St. 474; McCutcheon
As to whether a sale on the stocK v. Dittman, 23 N. Y. App. Div. 285;
exchange is a private sale, see Brass 48 N. Y. Supp. 360 (forwarding
v. Worth, 40 Barb. (N. Y.) 648, 653- newspaper advertisement of sale to
654; WilloTighby v. Comstock, 3 debtor held insufficient notice) ; Fur-
Hill (N. Y.) 389; Child v. Hugg, 41 her v. National Metal Co., 103 N. Y.
Cal. 519 ; Maryland Fire Ins. Co. v. Supp. 490 (as to the necessity of
808
§ 832-§ 1011] PLEDGES OF SHARES § 1001
of brokers to the contrary notwithstanding/ unless the con-
tract of hypothecation is expressly made subject to such usage.^
The place of sale must be a reasonable one.^* The sale may
be complete so as to cut off the debtor's right of redemption
although the transfer is never entered on the books of the com-
pany, the shares standing all the time in the name of a clerk of
the creditor's broker, and although the same certificate ultimately
gets back into the hands of the creditor.* It has been held in
California that an irregular sale is not a forfeiture of all title to
the shares, but passes to the purchaser the right of the creditor
to hold them until the debt is paid.^ If the creditor desire to
have the protection of a court of equity, he may file a bill for the
purpose of realizing on his security,® and, at least, according to
the English law, may, if he so elect, have a strict foreclosure
instead of a sale.'
In order to confer these various rights upon the creditor as
between himself and his debtor, the certificate must have been
delivered to him with intent to secure the particular indebted-
ness in question. For instance, if a certificate endorsed in
blank is delivered to a creditor to secure a debt which is after-
giving a new notice when sale is * Smith v. Becker (Wise), 109
postponed at debtor's request from N. W. 131.
date first fixed therefor). As to a sale accompanied or fol-
But see Wallace v. Burdell, 24 lowed by a repurchase by the cred-
Hun (N. Y.) 379; McDowell v. itor, see Macoun v. Erskine,Oxenard
Chicago Steel Works, 124 111. 491; <fc Co. (1901), 2 K. B. 493; Erskine,
16 N. E. 854; 7 Am. St. Rep. 381 Oxenard & Co. v. Sachs (1901), 2
(where the contract authorized the K. B. 5t)4; Walter v. King, 13 Times
pledgee to sell at either public or L. R. 270.
private sale); Worthington v. Tor- ^ Brittan v. Oakland Bank of
mey, 34 Md. 182 (dispensing with Savings, 124 Cal. 282; 57 Pac. 84;
notice of the place of sale); De- 71 Am. St. Rep. 58.
verges v. Sandeman, Clark & Co. ° VaupeU v. Woodward, 2 Sandf.
(1902), 1 Ch. 579. Ch. (N. Y.) 143 ; Plankinton v.
Cf. Alexandria, etc. R. B. Co. v. Hildebrand, 89 Wise. 209; 61 N. W.
Burke, 22 Gratt. (Va.) 254; Bryan 839; Conyngham's Appeal, 57 Pa.
v. Baldwin, 52 N. Y. 232; NeUer v. St. 474.
KeUey, 69 Pa. St. 403. Cf. Zdlerbach v. Allenberg, 99
' Markham v. Jandon, 41 N. Y. Cal. 57; 33 Pac. 786 (where the
235. creditor was defendant in equity
' Baker v. Drake, 66 N. Y. 518; and obtained the relief without filing
23 Am. Rep. 80. a cross-bill.)
' Cf. Guinzberg v. H. W. Downs ' Harrold v. Plenty (1901), 2 Ch.
Co., 165 Mass. 467; 43 N. E. 195; 52 314.
Am. St. Rep. 525 (where the debtor
had waived the objection).
809
§ 1002 TRANSFER AND TRANSMISSION [ChAP. XV
wards paid off, he cannot hold it as security for another debt.*
But the creditor's lien covers his claim for reimbursement for
any assessments on the shares which he is legally compellable
to pay or which he is requested by the debtor to pay.^
The debtor is of course entitled to redeem ; and this right he
may assign, and after notice of the assignment the creditor is
bound to treat such assignee as the owner of the shares subject
to the lien and to accord him all the rights of such owner.' At
least, under some circumstances, the debtor may file a bill to
redeem.*
§ 1002. Redefivery of Certificate to Debtor. — The lien will
be deemed to have been waived if the creditor redeliver the
certificate to the debtor, who will thereupon be able to transfer
an unincumbered title to the shares.^
(4) § 1003. Transfer to Creditor on Company's Books coupled
with Qualification that the Shares are held as Security merely. —
There is little authority as to the rights of the parties where
shares are transferred by a debtor on the books of the company
to his creditor with an entry indicating that they are held as
collateral security merely." The creditor is entitled to collect
dividends payable in respect of the shares.' The rights of the
■ NUes V. Edwards, 90 Cal. 10; " Hershey v. Welch, 104 N. W.
27 Pao. 159; Harris v. Franklin 821; 96 Minn. 145.
Bank, 77 Md. 423; 26 Atl. 523. " Cf. Spreckds v. Nevada Bank,
Cf. Bney V. Hampshire, etc. Bank, 113 Cal. 272; 45 Pac. 329; 33 L. E.
164 Mass. 482; 41 N. E. 679; Day- A. 459; 54 Am. St. Rep. 348; Noyes
ton Nat. Bank v. Merchants' Nat. Bros., 136 Fed. 977 (as to what is
Bank, 37 Oh. St. 208; Leahy v. sufficient indication on the books
Lobddl, 80 Fed. 665; 26 C. C. A. 75; that the shares are held in pledge) ;
Fairbank v. Merchants' Nat. Bank, Paidy v. State Loan, etc. Co., 165
132 111. 120; 22 N. E. 524 (as to the U. S. 606; 17 Sup. Ct. 465 (creditor
effect of renewal of notes, etc.); not Uable as shareholder where
Boyd V. Conshohocken Worsted MiUs, shares registered in his name as
149 Pa. St. 363; 24 Atl. 287. pledgee); Frater v. Old Nat. Bank,
' Iowa Nat. Bank v. Cooper 101 Fed. 391 ; 42 C. C. A. 133 (where
(Iowa), 107 N. W. 625. shares held by bank as collateral
' Le Marchant v. Moore, 150 N. Y. security were registered in, name of
209; 44 N. E. 770. "C, cashier O. N. Bank," held,
Cf. First Nat. Bank v. Root, 107 bank not Uable).
Ind. 224; 8 N. E. 105. ' Hunt v. Laconia, etc. By. Co.,
* Treadwell v. Clark (N. Y.), 82 68 N. H. 561 ; 39 Atl. 437; Paffe Belt-
's. E. 505. ing Co. v. Prince (N. J.), 67 Atl. 401.
810
§ 832-§ 1011] PLEDGES OF SHARES § 1004
parties inter sese would seem to be the same as in the case where
the transfer or mortgage is not recorded in the company's
books.
(5) § 1004. Transfer on the Company's Books absolute in
Form. — In this case, as in the preceding, the rights of the
parties inter sese do not in general differ greatly from the case
where the certificate an4 transfer in blank are delivered to the
creditor but where the debtor remains registered as the abso-
lute owner.' Indeed, we have seen above that according to the
better view the creditor to whom a blank transfer has been de-
livered has the right to fill up the blank with his own name and
have himself registered as shareholder. Accordingly, the creditor
has an implied power of sale after the lapse of a reasonable time
after default.^ The creditor who is registered as though abso-
lute owner is entitled as between himself and his debtor as well
as between himself and the company to any dividends declared
on the hypothecated shixres,' until the debt be paid; but upon
payment, the debtor as between himself and the creditor be-
comes entitled to the dividends.* Inasmuch as the legal title
is in the creditor, the debtor may file a bill in equity to redeem
upon payment of the debt.* With respect to third persons, in-
' Cf. Nabring v. Bank of Mobile, 195 (transferee from pledgee not
58 Ala. 204; Markham v. Jandon, liable to account for dividends col-
41 N. Y. 235; Greene v. Dispeau, lected by pledgee).
14 R. I. 575. As to parol evidence ° Hasbrouck v. Vandevoort, 4
to qualify the apparently absolute Sandf. (N. Y.) 74; Newton v. Fay,
transfer, see § 1005. 10 Allen (Mass.) 505; Bryson v.
' Deverges v. Sandeman, Clark & Bayner, 25 Md. 424; 90 Am. Dec.
Co. (1902), 1 Ch. 579. 69.
' Boyd V. Conshohocken MiUs, Cf. Gilmer v. Morris, 80 Ala. 78;
149 Pa. St. 363; 24 Atl. 287. 60 Am. Rep. 85 (where the debtor
Cf. Guarantee Co. v. East Rome was barred by laches); Greene v.
Town Co., 96 Ga. 511; 23 S. E. 503; Dispeau, 14 R. I. 575 (same point
51 Am. St. , Rep. 150; Roland v. as preceding case); Waterman v.
Lancaster, etc. Bank, 135 Pa. St. 598; Broiim, 31 Pa. St. 161 (same point
19 Atl. 951; Nelson v. Owen, 113 as preceding); Roberts v. Sykes, 30
Ala. 372; 21 So. 75; Colburn v. Barb. (N. Y.) 173 (claim barred by
Riley, 11 Colo. App. 184; 52 Pac. limitations); Lauman's Appeal, 68
684; GemmeU v. Davis, 75 Md. 546; Pa. St. 88 (where the transfer was
23 Atl. 1032; 32 Am. St. Rep. 412. held to be a conditional sale and not
• Cross V. Eureka Lake, etc. Co., collateral security); Crimp v. Mc-
73 Cal. 302; 14 Pac. 885; 2 Am. St. Cormick Co., 71 Fed. 356; 18 C. C. A.
Reo 808 ' "^^ (same point as last case) ; Hower
CI Maxwell v. ■ Nat. Bank of v. Weiss, etc. Co., 55 Fed. 356; 5
Greenville, 70 S. Car. 532; 50 S. B. C. C. A. 129; Gilmer v. Morris, 43
811
§ 1005 TRANSFER AND TRANSMISSION [ChAP. XV
eluding the corporation, the creditor is clothed with an apparent
ownership of the most complete character.' If by reason of
such apparent ownership, the creditor is compelled to pay to
the company calls or assessments on the shares, the debtor can-
not redeem without refunding to the creditor the sums so ex-
pended.^ But, on the other hand, the creditor owes no duty to
the debtor to pay such calls or assessments; and therefore the
debtor cannot complain if the creditor suffers the shares to be
forfeited for non-payment.^
§ 1005. Parol Evidence of Terms of Agreement between
Debtor and Creditor. — It has been said that where an absolute
transfer of shares is made on the books of a corporation, parol
evidence is not admissible to show that the transfer was intended
as collateral security merely ; ' but this dictum, if supportable
at all, — an hypothesis which to say the least is doubtful,^ —
must be confined to cases where the rights of third persons are
involved, for between the parties the transfer takes effect, at
least'in equity, according to their actual intent." Parol evidence,
however, is not admissible to vary the terms of an express written
contract of hypothecation.'
§ 1006-§ 1008. Co-ovmership of Shares.
§ 1006. Rights and Liabilities of Co-owners. — Where shares
are held by tenants in common or joint tenants, — e. g., by
several co-trustees, — each co-owner is liable as though he were
the sole owner of all the shares in severalty, qpd not merely for
his proportionate part of the total liability attaching to the
shares.' A fortiori, where shares are held by joint tenants, upon
Fed. 456 (reconsidered and re- question was not shares or stock,
affirmed, 46 Fed. 333, 335-336). Baugher v. Menyman, 32 Md. 185.
' Thompson v. Toland, 48 Cal. * McMahon v. Macy, 51 N. Y.
99; National Bank w. Case, 9^ 'V.S. 155; May v. Genesee County Sav.
628. Bank, 120 Mich. 330; 79 N. W. 630.
' McCalla v. Clark, 55 Ga. 53. » Brick v. Brick, 98 U. S. 514;
' Marine Bank v. Biays, 4 H. & Travers v. Leopold, 124 111. 431; 16
J. (Md.) 338. N. E. 902; Newton v. Fay, 10 AUen
* Bend v. Susquehanna Bridge, (Mass.) 505; Ginz v. Stumph, 73
etc. Co., 6 H. & J. (Md.) 128, 133- Ind. 209.
134; 14 Am. Dec. 261. This case ' Fay v. Gray, 124 Mass. 500.
would seem to be on this point over- Cf. Fairbank v. Merchants' Nat.
ruled by later Maryland cases, in Bank, 132 111. 120; 22 N. E. 524.
which, however, the property in ' Cunninghame v. City of Glasgow
812
§ 832-§ 1011] CO-OWNEESHIP OF SHARES § 1007
the death of one of them the whole liability devolves upon
the survivor.' One of two or more co-tenants of shares has no
power to transfer the shares so held, or any of them, without
the concurrence of all his co-tenants;^ but where shares are
owned by a partnership any partner may execute a valid trans-
fer just as he may assign other firm property, without the assent
of his co-partners.' Where three out of four co-owners of shares
are permitted by the company to transfer on the books their
proportion of the shares, the result is that the remaining joint
owner, especially if he be a minor, becomes entitled in severalty
as against the company to the remaining shares, so that the
company cannot claim a lien upon them for debts of the other
co-holders." Where two co-trustees in breach of trust invest
trust funds in partly paid shares, the executor of one of them
is not liable to the company for a call made after the testator's
death, but is nevertheless liable to the surviving trustee for
contribution.^
§ 1007. Transfer to Tenants in Common, whether Company
compellable to register. — In England, it has been held that a
corporation is not compellable to register shares or stock in the
names of two or more persons as tenants in common." The
process of reasoning seems to have been that the corporation
ought not to be obliged to inquire into the proportionate share
of each co-owner, as would be necessary upon the death of one
tenant in common; but this argument does not furnish a very
satisfactory basis for the conclusion, to the mind of an American
lawyer.. The English court further held that a corporation and
an individual cannot hold either land or personal property as
joint tenants; since the jus acrescendi would not be mutual,
the corporation being inevitably the survivor.' Hence, the
Bank, 4 A. C. 607; GUlespie v. City * Presbyterian Congregation v.
of Glasgow Bank, 4 A. C. 632. " Carlisle Bank, 5 Pa. St. 345.
' Hill's Case, 20 Eq. 597; No- = Jackson v. Dickinson (1903),
iional Trustees, etc. Co., 21 Vict. 1 Ch. 947.
L. R. 75 (holding that estate , " Law Guarantee Sac. v. Bank of
of deceased joint tenant is not England, 24 Q. B. D. 406. As to a
liable for calls made during his life- provision in an incorporation paper
time). that no two or more persons should
' Barton v. London & N. W. Ry. be registered as joint owners of any
Co., 24 Q. B. D. 77. share or shares, see Consterdine v.
' Sargent v. Franklin Ins. Co., 8 Consterdine, 31 Beav. 330 (stated
Pick. (Mass.) 90, 97; 19 Am. Dec. supra, § 985 note).
306. ' Cf. supra, § 76.
813
§ 1008 TRANSFER AND TRANSMISSION [ChAP. XV
court held, the Bank of England cannot be compelled to register
a transfer of consols to a corporation and a natural person ; '
for they would necessarily hold as tenants in common and, as
above stated, a company is not in England compellable to register
shares or stock in the names of two persons as tenants in com-
mon. The entire decision, premises and conclusion, is un-
suited to American business methods, and would therefore
hardly be followed anywhere in the United States.
§ 1008. Joint Ownership not Evidence of Trusteeship. —
Although joint ownership of shares is most common in the case
of co-trustees, yet the mere fact, that shares stand in the joint
names of two or more individuals is no evidence of a trust suffi-
cient to put a purchaser upon inquiry.^
§ 1009-§ 1011. Executory Limitations of Shares.
§ 1009. In general — Duty of Company to protect Remainder-
man. — Shares in corporations, being permanent and valuable
property, are often settled upon one person for life with limita-
tions in remainder after his death. Such limitations may in
America be either legal or equitable.' In either case, the com-
pany, if it have notice of the limitations, is bound to protect the
interest of the remainderman.
If the company registers an absolute transfer by or to the
owner of the particular estate, thus imperilUng the rights of the
remainderman, the latter may compel the company to respond
in damages.' " The statute of limitations does not begin to run
against any such right of action until the determination of the
particular estate.^ Moreover, the measure of damages is the
value of the shares at the time of the termination of the par-
ticular estate and not at the time of the transfer or, so to speak,
of the conversion." This right of action is vested in the re-
' Law Guarantee Soc. v. Bank of man, 5 Gill (Md.) 336; Stewart v.
England, 24 Q. B. D. 406. Firemen's Ins. Co., 53 Md. 565.
' Dodds V. Hills, 2 Hem. & Miller " Wooten v. Wilm,ington, etc. R.
424. Co., 38 S. E. Rep. 298, 302; 128
' See Gray on Perpetuities, 2d N. Gar. 119; 56 L. R. A. 615. Cf.
ed., § 88-§98. Farmers', etc. Bank v. Wayman, 5
' Cox V. First Nat. Bank, 119 Gill (Md.) 336, 358.
N. Car. 302 ; 26 S. E. 22 ; Wooten v. But see contra : Yeager v. Bank
Railroad, 128 N. Car. 119; 56 of Kentucky (Ky.), 106 S. W.
L. R. A. 615; 38 S. E. 298. 806.
Cf. Farniers', etc. Bank v. Way- " Caulkins v. Gas-IAgkt Co., 85
814
§ 832-§ 1011] CO-OWNERSHIP OF SHARES § 1010
mainderman and not in the administrator de bonis rum of the
testator by whose will the estate for life was created.* But if
the testator directs that the shares shall be transferred into the
ienant for life's own name, he in effect directs that, so far at
least as the company is concerned, the tenant for life shall have
full power of disposition, so that the company is not liable for
registering a transfer to the tenant for life absolutely and by him
to a purchaser, although the tenant for life is acting fraudu-
lently and converts the proceeds of sale to his own use.^
If the shares are registered in the name of the tenant for life,
they may upon his death be transferred into the name of the
remainderman without the payment of duty.'
j § 1010. Liability for Calls as between Tenant for Life and Re-
ijiainderman. — As between the tenant for life and remainder-
dian, any liability for calls made during the running of the life
estate should be borne by the corpus of the estate and. not by
tie tenant for life personally or out of his income.* Indeed, so
c^sely is this rule adhered to that even a testator's express
directions that any calls which may at any time "become due
in', respect of any shares for the time being constituting part of
my residuary personal estate" shall be paid out of income, will
be! confined to calls upon shares owned by the testator at the
tinie of his death, and will not be deemed to apply to calls upon
additional shares in the same companies allotted to the execu-
tor.^ in respect of their ownership of shares held by the testator.*
If me tenant for life advances money to pay the calls, he is en-
titkiil to a lien on the shares for the amount advanced.^ As be-
tween the legatees of the shares (including both the tenant for
life 'and the remaindermen), and the residuary estate of the
testaltor, the Uability for calls is governed by the rules above
stated as to specific and residuary legatees.'' If the shares
settled for life are during the running of the life estate part of
the ( tjdue but are specifically bequeathed in remainder, calls
I
Temi.'^; 4 S. W. 287; 4 Am. St. * aive v. aive, Kay 600.
Rep. 786. = Bevan v. Waterhouse, 3 Ch. D.
' Yager's Admr. v. Bank of Keiv- 752.
tucky (Ky.), 100 S. W. 848. ' Rowley v. Unmin, 2 K. & J. 138;
" Hughes v. Drovers', etc. Bank, Todd v. Moorehouse, 19 Eq. 69.
86 Md. 418; 38 Atl. 936. ' Supra, § 976.
' HmneU v. Strong, 25 L. J. Ch.
407.
815
§ 1011 TRANSFER AND TRANSMISSION [ChAP. XV*
made during the life estate are not to be borne by the shares
themselves but may be paid out of other parts of the residuary
estate which do not yield so good an income and which are not
specifically bequeathed in remainder.'
§ 1011. Mutual Rights of Tenant for Life and Remainderman
with respect to Dividends, Bonuses, etc. — The diflBcult questions
which arise as to the respective rights of tenant for life and
remainderman as to dividends, especially extraordinary divi-
dends, and as to proceeds of sale augmented by prospect of
a dividend, are elsewhere discussed.^ So, too, the questior
whether upon an increase of capital the right of the old share
holders to subscribe to the new shares before any allotment f
the public is to be treated as income or capital, as betweeni
tenant for life and a remainderman, is the subject of co-
sideration in another chapter.^ It would seem that the tenat
for life may exercise the right to vote.*
' Re Box, 1 Hem. & MiU. 552. CouH (Minn.), 113 N. W. 888 (wb'a
' See infra, § 1377-§ 1396. the deed creating the estate forfe
' See supra, § 607. expressly so provided).
* Cf. State ex rd. Tozer v. Probate
END OF VOL. I
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