Idaho County free press. [volume] (Grangeville, Idaho Territory) 1886-current, 1895-07-05
ESTATE NOT LIABLE
Leland Stanford's Heirs Saved
Fifteen Millions.
JUDGE ROSS MAkESA DECISION
Central Pacific Railroad Comnaux Neyer
Really Promised to Pay Back
Borrowed Money.

oan francisco. June 29.-United States
Circuit Judge Ross rendered his de-
cision on the demurrer of Mrs Jane l..
stanford against the suit of the gov
eminent to recover SIT, 200, 900 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 1t so desired. 1t was minated, how
ever. that this step would not affect
the case. the law as construed by Judge
Ross not favoring the case of the United
States.
surprise, the attorneys generally ex-
pecting contrary decision.
The court began by reading and ex-
planning the acts and statutes, both
state and federal. which had any bear
Ing on the construction of the Central
Pacific railroad and it's branches. All
railroads west of the Missouri river
were, he said, constructed under the
same acts, so IL one railroad was liable
TO the government, all were liable. In
nearly all of the corporations Leland
stanford was stakeholder. Together
with Z. T. Huntington and other in
corporators. he owned 1870, $50 shares of
STOCK. The government, according to
us contract, issued bonds to 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, it became In a way
amenable to the laws of California. Tho
laws of California providing that stock
holders of corporations are individually
responsible for debts contracted bv
their companies, he held, did not affect
stanford. as the government claimed.
Tor the reason that the stakeholder
liability acts were passed after the gov
eminent had made its contract With
the Central Pacific. If 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
TEST or making the stockholders of rail-
roads 1t bonded personally responsible
Tor the debts contracted by the Gem
pany.
HAD A NATIONAL TONE
The Central Pacific. the court con-
tinues. had something of a national
tone to it. When 1t was co atempJated
the country was in a state of turmoil
the government wanted quick comn,un-
ication 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.
1t 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 pos session of
the roads. The bonds are Identical with
a first mortgage.
DID the company who became in
debted to the United States promise
to repay the money!" asked the court
1.-THE statute on this point Is not very
explicit, which is to be very much re-
GREETED" said the judge "A promise
Is only implied. There was no oxulici+
or unqualified agreement between the
corporation and the government. 1t
Is to be observed that the lands and
bonds were not to be delivered to the
company until the road was eouinped
Here is found a promise, but it is an
unqualified promise to repay the money.
The government had no intention of
making these men individually respon-
sible." said Judge Ross. THAT question
never entered into the contract. The
covenant did not stlpulate that the
stockholders should repay the bonds.
The acceptance of the bonds was an
implied act OF the stockholders to pay
them. The stockholders accepted the
assistance of the government with the
agreement that they should pay for IT
that was all.
There are no common law liabilities
The state law fixes the liability ~
stockholders in proportion to The
amount of stock they possess. That
law. however, can not be held to apply
In this case as 1t was passed subsequent
to the making of the government con-
tract with the Central Pacific company
The real question involved is whether
there was a contract between the de-
PENDANT and plaintiff and whether there
was a liability proviso. Reverting to
provisions in the laws of the United
states there can be found no suct
agreement. The statutes do not hold
the defendants liable. There Is abso-
lutely nothing to establish this fact
and l sustain the demurrer and give
the plaintiff the power to amend" con.
cluded Judge Ross.
Stanford University. CAL, June %
There was great rejoicing at the Stan
ford university when the news was re-
ceived that Judge Ross had sustained
the demurrer In the case of the govern
ment against the Stanford estate.
Dr. Jordan, when interviewed, said: ct
think the decision virtually settles the
liability Of the property which Mr.. and
Mrs. Stanford designed for the university.
While the case may be appealed, it is not
likely that the decision of Judge Ross
will be reversed"
STRONG ARTICLE ON BlMETAlllSM
san Francisco Paper Devotes Ten Pages
to the Suhiecf