The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1896-03-03
SAVES HER MILLIONS
MRS STANFORD SUSTAINED IN THE
SUPREME COURT.

sence or any stipulation in the Act Of
Congress-:
Washington, March 1.-THE supreme
court today decided the Stamford case
n favor Of Mrs. Stamford. The case is
ityled the United States VS.. Jane L.
Stamford executor OF Leland Sand
ord. deceased, and involvs individual
liability of stockholders of the Central
Pacific for debts due the United States
IN bonds issued in aid Of the railroad
lnder the California constitution. STAN
'ord held 144,3S7 shares of stock and the
government claimed over $4,000, 900
;'om the Stanford estate.
The opinion proceeded entirely upon
ire the theory that the Pacific railroads
we're intended to constitute a continu-
BUS line and that the government was
protected by its mortgage upon the
Dads. 1t is admitted in the opinion
hat the security was impaired by the
act of 1864, subordinating the govern
nent lien to the first mortgage, but"
Justice Harlan says, EFF the act Of 1862
fairly interpreted excludes the idea
that stockholders Of the company re-
.eiving subsidy bonds, were OF be per
s5nally liable to the United States for
he principal and interest accruing on
those bonds the legislation of 1864 how
yer unwise, did not have the effect Of
Imposing such liability"
NO LIABILITY CLAUSE.
The fact that none of the Pacific rail-
road acts contain a clause imposing
personal liability, is commented upon as
important. 1t was competent for con-
gross TO provide for such liability, ''but
as it did not do so, il cannot be claimed,
nor Is it claimed, that the stockholders
II that Incorporation incurred by their
subscriptions of stock any liability TO
The United States or to any other cred
itor OF the Union Pacific Railroad COM
pany for the debts Of that corporation.
They Were bound, Of course, to make
good the amount of their subscriptions.
But, that being done, their personal re-
Sponsibihty to creditors of the corporate
body ceased. Congress, by its legisla-
ton, encouraged and invited the invest
:nent Of private capital in the construc-
ton Of a highway, which, at that time,
was deemed Of vital Importance to the
whole country"
Using the Union Pacific as an illus
tration, the opinion continues:
AS the stockholder of a corpora
ton is not liable, beyond the amount of
his unpaid subscription, for its debts.
unless such liability is imposed by
statute, and as the acts of congress in
question are silent upon that subject,
every subscriber to the stock of the
Union Pacific Railroad company must
he deemed to have become such upon
the condition implied by law that he
should not personally be liable for the
debts of the corporation.
STATE LAW NOT APPLIABLE
1T is not too much 70 say that if the
aCts Of 1862 and 1864 had made the stock
holders of the corporations therein
named personally liable, in proportion
70 their stock, for the yment of the
principal and interest of the bonds is
sued and delivered to such corporation,
the accomplishing of the objects which
congress had in view would have been
seriously retarded. if not wholly de-
feated-
'Jt Is said, however, that these prin-
ciples have no application to stock
holders Of California corporations that
come into existence under constitution
al and statutory provisions making
Stockholder of a railroad corporation
liable, IN proportion TO his stock. for its
debts and obligations. This position
cannot be sustained except upon the
theory that congress intends 70 take
larger security in respect of that part
Of the Pacific road which the California
company undertook 10 construct and
maintain than il took in respect of the
Union Pacific railroad. But it cannot
be inferred from the legislat alton of con-
ETess that it intended, for the protection
Of the interest of the United States, 10
impose a heavier liability upon the
stockholders Of the California company
than was imposed upon the stockhold-
ers of the Union Pacific Railroad COM
pany Why should 1t so have inteded?
Why should it be supposed that con-
gresS would purpOSely make it more diff
ficult 10 construct one part of the pro-
posed highway than another?
IN VIEW OF ENDS SOUGHT.
The supreme end sought to be at
tanned was, by means Of private CAPT
tai and governmental aid, to secure the
construction Of the whole line for the
benefit, primarily, OF the United States
and for the use of all of the people. If,
instead of making use of the Central
Pacific Railroad company of California, |
congress had itself created a corpora !
ton with authority to construct road |
from San Francisco through the terri I
tories Of the United States TO meet the !
Union Pacific Railroad company. no one /
would suggest that the stockholders of /
such corpora ZION would have been liable /
Tor It's debts unless congress expressly /
Imposed liability upon them.
The opinion goes on 10 say that 10 i'm |
pcse an obligation upon the California /!
corporation not imposed upon the Union 1
Pacific would be inconsistent
Justice harlan was particular to state /
that the question whether the stock 1
holders Of the California company can /
be made liable for lis debts 10 the Unit |
cd States arising IN some other way /
than under the Pacific railroads acts. 4
O. by the acceptance OF the United 1
States in aid of the construction Of lis 1
road. is not involved in this case.
Nor are We" he continues. Ito de- /
eide whether the adoption of the Cali |
fornia corporation as an instrument Of I
the national government in accomplish !
ing a national object exempted its 4
stockholders from liability under the /
constitution and laws Of California 10 /
ordinary creditors.
BOTH IN THE SAME CASE.
Reference is made in the opinion 70 !
the obligation Of the Pacific railroads I
q pay the United States bonds at ma 4
tul ~ which obligation, the opinion /
holds affords "c0Eent reasons. apart /
f-om the words OF the act Of congress, |
Why q rule should not be applied 70 the /
stockholders o. the Central Pacific Rail- l
road company which confeSSedly can 1
not be applied 70 stockholders of the |
Union Pacific Railroad company. Both !
corporations participated in the execu-
ton Of the purposes of congress. Each |
received franchises and powers from
the federal government 70 be exerted
for objects OF national concern. Al
though the Central Pacific Railroad /
company of California became an arti-
fetal being, under the laws OF that
state It's road owes its existence to the
1r-- n