The record-union., 1896-03-03

If the officers and directors of any COM
pany knowingly made or permitted any
unlawful issue of stock thereof, they
became personally liable to the COM
pany or to its lawful stockholders, but
not to the United States, which was
merely creditor The rights of cred
itors could not be affected by the i'm
proper issue of stock, which merely rep
resents the property of the company,
but does not dispose of it or incum-
Der it.
Second-Whether said officers and di-
rectors incurred any liability to their
respective companies or to the United
States for the profits on contracts
made with themselves or persons rep
resenting them for the construction of
said roads2 Answer-If officers and di-
rectors made contracts with them
selves, or with persons representing
them, to their own profit or the detri-
ment of the company, they became la
bic to it under such contracts where
knowingly authorized or ratified by
majority of the directors having no in
terest therein, or by the stockholders,
but they did not become liable to the
United States.
Third-Whether the United States. as
a creditor of the said corporation, can
maintain actions in their own name
against said parties for the enforce
ment of said liability, if it exists, until
all remedies to enforce payment of all
debts owing by the said companies to
the United States have been exhausted?
Answer-It was held in the case of the
United States VS.. the Union Pacific
Railroad Company, known as the
Credit MobiIier" case, that such liza
bility was to the respective companies
only The United States, therefore,
could not maintain any action thereon
against the guilty parties, but could as
sert the rights of the company by a
proper suit in equity as a creditor.
Fourth-Whether, if such liability ex-
lists, the United States will be barred
in any action which might be brought
for the enforcement thereof by the stat
utes of limitation, which would bar the
companies if the actions were brought
in their names and behalf; in other
words, whether the United States would
be entitled to maintain action as cred
itor of said corporations against its di
rectors and officers, which the corpora
tfons themselves could not maintain?
Answer-As the United States would
be merely asserting the rights of the
companies as assets to be applied to the
payment of their creditors, any statute
Of limitations which would bar the COM
panies would also bar the United States.
Fifth-Whether the facts found and
stated by the Pacific Railroad Commits
sioners of 1887 in their report to the
President are supported by evidence
legally admissible in a court of justice?
AEswer-If this question means to ask
whether before the Pacific Railroad
Commissioners, upon which they found
the facts stated in theil report would
be admissible in a suit or action be-
tween parties in a court, answer gen
orally that the statements made by any
witness would be admissible against
him, but not against any other person,
and that original documents would be
admissible, or copies under the usual
rules relating to secondary evidence.
With these exceptions, the evidence
would be admissible. / do not under
stand the question to ask for my opin-
ion whether if the Commissioners had
applied legal rules of evidence the testi-
mony should have been admitted.