The herald., 1895-10-13
Is q Stockholders Liability to
the Government
EQUITY OFFERS NO iRELIEF
Mrs. Stanford Wins in the Court Of
Appeals
The Case Will Be Appealed to the Supreme
Court Of the United States.
Students Rejoice

Associated Press Special Wire
SAN FRANCISCO, Oct. 12.-Mrs. Stan
ford mas won another victory from the
United States government and this time
in the United States court of appeals.
The decision handed down today was
signed By United States Circuit Judge
Gilbert and by United States District
Judges Morrow and Hawley. 1t is given
Oh the appeal taken from the previous
order of Judge Ross, sustaining the de-
murrer of Mrs. Stanford to the suit
brought against her to recover SIS, 1897, 900
alleged to be due the government from
her husba ads estate on account of Cen
tral Pacific bonds. AS the decision is an
affirmation of the correctness of tn 9
position already taken py Judge Ross,
there is no relief to be obtained in the
premises through suit in equity. 1t is
held that if the liability exists it is pure
ly "a creature of statute" the question
before the court being entirely one of in
terpretation of the law. The usual privi-
leges for the amendment of the complaint
and the re-arguing Of the case were offer
ed the counsel for the government, but it
was stated that the governments at
offer. 1t is Understood the case will be
appealed at once to the supreme court
of the United States.
The opinion rehearsed the facts con-
nected with the creation of the DEBT ana
stated tho question before the court to be
whether the tockholders were to be eld
individually liable for the debts of the
company There had been an omission
in the contract as to the means by which
I a - Al 4
company's failure to meet its obligation; /;
but this was uhimportant, as in its ab-
sence the law provides means for secur-
ing payment.
The CO urt held that the liability of the
| stockholders of the Central Pacific could
not be different from those of the Union
| Pacific, and that there had been a con.
solidatIon of the two companies, the debt
could not have. been collected from the
| stockholders; and what would apply to
them then applied now.
Judge Gilbert. who, read the decision,
| cited at length the laws governing these
stockholders Of the Union Pacific. In
( this instance the shareholders were not
| held liable and it is explicitly so stated
! in the charter, which was obtained in
1 Illinois,
| On the other hand, the state of = ali.
fornia imposed personal liberty clause
when the Central Pacific was incorpor-
| ated.
But" said the court, "is it reason
able to suppose that when the govern
ment granted the two roads subsidies
that it intended to hold the shareholders
of the one personally liable and not tho
otherP Can it be imputed that this was
the intent of congress when it set aside
lands and assumed part OF the debt of
the company"
The court further on urged that it was
the inten ton of congress to put both
roads on the same footing. Judge Davis
of Illinois has already decided that the
Union Pacific stockholders were not
liza BILE. Again the court remarked:
''It is not reasonable to presume that
individuals would have engaged in such
an enterprise we're they to imperil not
only their investments, but their private
fortunes"
After Judge Gilbert had concluded the
first man to congratulate Judge CARRIER,
Mrs. Stanford's ;torney, was President
Jordan of the Leland Stanford Jr. uni
versity. HIS was elated over the decision,
and remarked that il was a remarkable
paper
PALO ALTO, Oct. 12.-when the de.
cisIon In the Stamford suit was announce
ed here at noon the greatest enthusiasm
prevailed among the students. In the
dormitories the stude nts went wild, shak-
ing hands, huggiug each other and yell
ing themselves hoarse. Steam whistles
were kept blowing and the students with
horns and cowbells marched about the
campus making as much noise as posi-
ble