The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-09-20
EX-Judge CARRIER Has Finished
His Statement for the
Estate.
ATTORNEY MKIsICK TO REPLY
The Great Suit Is Nearing a Close
and the Decision of the
Appellate Judges.

against Jane l. Stanford, to recover some
S15,OOO,000 alleged to be due the Govern
ment as the proportionate obligation of
Leland Stanford for the debts of the
Central Pacific Railroad Company.
1t was remarkable effort, the two days
talk being made wholly without notes or
memoranda, except the citations of law.
Mr.. CARRIER dwelt most of the morning
upon that feature of the case relating to
the constitutional provision which pro-
vides for the liabilities of stockholders,
his argument going to show that it was
not self-executing, but depended upon
legislative action to make it effective.
The constitution" he said, "does not
say that the stockholders are liable for
their proportion of the liabilities. The act
OF the Legislature says that. That act it.
self creates the obligation. The United
States coming to collect under that obi
cation must observe all the conditions
governing 1t IN order to at all come within
the power of the law. Why should it not
be so? Are all others to be held by these
conditions and the United States to be
exempt? Shall the sovereign say, the
mere dry limitations as to the obligation
itself shall apply so far as [ am con-
cerned, but the time condition, which is a
part Of the same law, is not for me?'
Here was a creation by the state of
California of a liability unknown before.
But it was provided that suit to recover
upon 1t must be brought within three
years. Therefore. no action can have
standing here-not even if brought by the
United States-except it is subject TO the
conditions prescribed by the power Great
ing the obligation.
u say, as the constitution is not self
executing, as the Legislature had the right
70 hn M
of the stockholders liability, subject only
to the requirement that there should be
some liability imposed as this whole mat
ter was left to the Legislature; as in the
absence of legislation, there would be no
liability which could be enforced, it follows
necessarily that this is under our constitu-
ton, as 1t has been held elsewhere, the
creature OF the statute and the creation of
the statute.
1T follows from that, as I said before,
that when the Legislature has created this
statutory liability, it having the power to
do so, and to prescribe the terms upon
which it should exist, that the terms en-
tered into and conditioned the thing
created, and that no man can come to en-
force that which the Legislature created
for his benefit without coming also under
all the conditions, limitations and restric-
tons imposed.
Would any man contend for q moment
that this constitution Of the State of Cali
fornia took away from the Legislature the
power TO prescribe the manner in which,
and the remedies by which this individual
liability should be enforced, and to exclude
? all other remedies? Does the constitution
conclude that? Is it self-executing IN that
sense? All that the Legislature is bound
to do is to create some individual liability
for the proportion, or some proportion, OF
the debts. The remedies exclusive of
all other, the time within which
those remedies shall be applied,
the time when the liabilities shall
commence, and the time when they
shall cease, are ali left within the control
OF the Legislature, and not fixed or deter
mined by the terms of the constitution.
The Legislature may, as it is settled in the
State Of California, and as nobody has
ever doubted, say, not that stockholders
shall be liable for all the debts and liabili-
ties of the corporation, whether contracted
before they bought the stock or contracted
after they sold out their stock and ceased
to be stockholders, but as Judge Sawyer
decided, and as has been always since I'M
derstoOd to be the rule, they may say that
only those who are stockholders at the
time the debt was contracted shall be
liable. Can it be doubted, If they can limit
it in that way, that they can also limit as
a condition and as part OF the LIABILITY
the time within which the creditor shall
come to enforce that liability? What is
unconstitutional in that2 How does that
impinge upon the policy of the constltu-
ton any more than what was sanctioned
by the court where they restricted the la
bility to those stockholders who should be
such, at the very time that the debt was
contracted or created and the liability fixed,
and excluded from its operation those who
afterward might become stockholders. Is
It that this obligation, thus created by the
constitution, though it is not self-execut-
ing, as l have said, is to run on forever and
without any qualification? Is the Legisla-
ture shorn of all power over the corpora
lions which itself shall see fit to create?
''In determining the policy of the State
in regard to corporations in a commercial
state is the Legislature to be beTeft of all
its powers, and is its discretion to be linn
tied to a naked, fixed, ironciad rule, that
no matter what they may think is good
policy, there shall be no limitation in the
sense of this condition, entering into and
being a part of the liability, that 1t shall
be enforced in certain specified manner
or within a certain described period? That
would make chaos indeed III the corpora
ton law of the State sof California, or of
anv other State which adopted constitu-
ton in the vague and general terms In
which the constitution of 1849 was framed.
"Such was the intention of the trainers
, Of the constitution. They intended first to
lay down a general principle as direction
and guide to the LEGISLATURE, but to leave
all the rest to the power of the Legislature
and to say to the creditor: When you
come to deal with a corporation created
by the laws OF California, with its character
fixed, its limitations esta blished, the rights
you shall acquire by dealing, with the
stockholders is set down plainly SO that
you may read them. You must be bound
by all those limitations and qualifications;
If you contract upon those terms, as you
plainly do; if the creditors can walve by
conduct, by oral or by written agreement,
this constitutional liability cannot walve
it, and does he not waive 1t when the
Legislature, having set down IN the charteT
of the corporation a certain prescribed ana
fixed period, or a certain method or mooe
by which he should enforce his habiilty (;
when he contracts in view OF that, with the
corporation bound by those charter
powers, does he not waive, conciuslvely
waive, any further claim based upon the
vague language of the constitution? Is ne
not bound by his contract with that cor
poration according to the terms of the act
of the Legislature, in view of which terms
he contracted with the corpora ton itself?"
After dwelling upon these several points
at length and quoting numbers of authori-
ties Judge CARRIER said in conclusion: "For
these reasons, if your Honor please, not