Elmore bulletin. [volume] (Rocky Bar, Idaho) 1889-1906, 1895-07-06
ESTATE NOT LIABLE
Leland Stanford's Heirs Saved
Fifteen Millions.
JUDGE ROSS MAkESA DECISION
Central Pacific Rauroad Company Never
Really Promised 90 Paw Back
Borrowed Money.

San Francisco. June 9.-United States
Circuit Judge Ross rendered his de-
cision on the demurrer OF Mrs. Jane L.
stanford against the suit OF the gov
ernment to recover s15.o0o.oo0 from the
estate OF her late husband. The de-
murrer was sustained. Judge Ross al
lowed the government to amend Its
former complaint and re-argue Its case
II IL 20 desired. It was intimated. how
ever, that this step would not afrect
the case. the law as construed by Judge
Ross not favoring the case OF the United
States.
The sustaining Of the demurrer was
Z surprise, the attorneys generally ex-
pectipg q contrary decision.
The court began by reading and ex-
planning the acts and statutes. both
state and federal. which had any bear
ting ON the construction of the Central
Pacific railroad and Its branches. All
railroads west OF the Missouri river
were. he said. constructed under the
same acts, 80 IL one railroad was liable
to the government. all were liable. In
nlariy all of the corporations Leland
Stanford was q stockhoider. Together
with c. p. Huntington and other in
stock. The government. according to
its contract. issued bonds 10 aid In the
construction Of this road. Though the
road was built under that contract. Il
was incorporated under the laws OF this
state. Therefore. IL became in a way
amenabie 10 the laws of California The
laws OF California providing that stock
holders of corporations are individually
responsible for debts contracted by
their companies, he held. did not AFFECT
Stanford, as the government claimed,
for the reason that the stoclxhoider
liability acts were passed after the gov
ernment had made it's contract with
the Central Pacific. II those laws had
been passed before the government
bonded the Central Pacific. However. It
would have made no difference. as tie
governments intention was not mani
fest OF making the stockholders OF rail-
reads It bonded personally responsible
for the debts contracted by the COM
pany.
HAD A NATIONAL TOME.
The Central Pacific. the court cum
tone to Il. When II was contemplated
the country was In a state OF turmoil.
the government wanted quick commun.
tcation between the Atlantic and the
Pacific oceans. At that time the build
ing OF the railroad was a great under
taking-an undertaking too vast for
private enterprise. so the government,
In order TO assist In the work, issued
the bonds and In this way made the
railroad builders practically agents Of
the United States.
II was very plain that In case the
railroad did not pay the bonds upon
maturity that the secretary OF the treas.
ury has the power TO take possessior oi
the roads. The bonds are Identical with
first mortgage.
.Did the company who bename IN
debted to the United States promiss
TO repay the money!" asked the court
s@rhe statute ON this point In not yer,
explicit. which Is to be very much re
GREETED" said the Judge. "A promis'
II only Implied. There was no explicit
Or unqualified agreement between tn,
corporation and the government.
IL 20 be observed that the lands ant
bonds were not TO be delivered to III,
.eompany until the road was equipped
Here - found q promise. but IL is al
unqualified promise 10 repay the money
The government had no intention O
anaking these men individually respon
sible," said Judge Ross. "That question
never entered into the contract. TIL
covenant did not stipu1ate that tn
stockholders should repay the bonds
The acceptance OF the bonds was o.
Implied act OF the stockholders to pa
them. The stockholders accepted th
assistance of the government with In
agreement that they should pay for 4
that was all
.-Tnere are no confnon law iiabilisie,
The state law Axes ths liability .
stockholders In proportion TO th
amount OF stock they possees. Ths
law. however. can nor be held 20 appl
In this cnse. ~ II was passed subsequer
20 the making OF ths government cor
tract with the Central Pacific compan.
The real question involved In wheths
there was q contract between the d,
fendant and plaintiff and whether thel
was liability proviso. Revertinx !
provisions In the laws OF the Unite
states there can be fund no sue
agreement. The statutes do not no
the defendants liable. There is abs
1utely nothing 10 establish this IA
and I sustain the demurrer and 81,
the plaintifr the power 70 amend" co.
cludsd Judge Ross.
Stanford University, Cal. June ..
There was great rejoicing nt the sta
ford university when the news was :
csived that Judge Ross had sustain
xh4 demurrer IN the case Of the Cover
xnant against the Stanford estate.
DIR. Jordan. when interviewed. said:
think shs decision virtually settles I
liability OF the property which Mr.. a
Mrs. stanford designed for The universal
while the case may be appealed. n h n
ziieiy that the decision Of Judge R<
win be reversed"
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