The record-union., 1896-03-03

Concern to the National Govern
ment-IndfviduaI Stockholders Not
Liable for the Debt to the Govern
ment.
| WASHINGTON, March 2.-The effort
of the United States authorities to col
! lect from the estate of the late Leland
Stanford of California S15 239, 900 has
been unsuccessful all along the line.
Justice Harlan, speaking for the Su-
| preme Court of the United States, to-
T; day declared that no liability attached
to the estate upon the grounds set forth
| by the Government and thus ended
| the litigation.
The case was begun in the Circuit
Court for the Southern District of Cali
fornia, the bill proceeding upon the
ground that the legislation and the laws
at the time the Central Pacific Railroad
Company of California and the West
ern Pacific Railroad Company, which
| consolidated as the Central Pacific
Railroad Company, was organized, as
we'll as when they received the bonds
of the United States, held each stock
holder liable in proportion to the stock
held by him, for all it's debts and liza
bilities and consequently that the estate
of Stanford was liable to the United
States in the sum named that being
his proportion of the bonds advanced
to the railroad company and now over
due and unpaid.
The Circuit Court dismissed the case
and that judgment was affirmed by
| the Court of Appeals, from which the
case was brought to the Supreme Court
of the United States.
The appeal was argued in January
last just before the recess. Joseph H.
Choate appearing for Mrs. Stanford and
Solicitor General Conrad and Assistant
Attorney General Dickinson for the
| Government. Owing to the magnitude
of the claim and the consequent inter-
ests involved, one of them being the
fate of the Leland Stanford, Jr.. Uni
yersity in California, the case excited
an interest that was limited only by
the extent of the country.
Discussing the questions presented.
Justice Harlan asked: WAS it part of
the contract between the United States
and the corporations receiving its sub
sidy bonds that the stockholders of
such corporations respectively should
be personally liable for the principal
and interest of these bonds? Or did
the United States make provision in
the Acts of Congress for all the secur-
1ty intended to be taken for their pay
ments? These questions could only be
answered by examining the provisions
of all these Acts in the light of the con-
dition under which the United States
made grants ofsands, and provided for
the issuing of the bonds in the aid of
the construction of the railway and tel.
egraph lines to the Pacific Coast
The opinion reviewed at length the
Acts of 1862, 1864 and 1865 from which
review, said Justice Harlan, it ap-
peared that they related to the same
general subjects, and must be regarded
as one enactment for the purpose ef as
certaining the object of Congress. That
| object was no longer a subject of in
quiry by the Supreme Court of the
United States having been settled in
the case of the United States VS.. the
Union Pacific Railroad Company, de-
cided by Mr.. Justice Davy, which de-
clard that the building of a railroad
from the Missouri River to the Pacific
Ocean to be a national work
The next question was, Did Congress
to secure the United States on account
of its bonds issued in aid of the con-
struction of this national highway?
The important fact disclosed by the Pa
cific Railroad Acts, said Justice Har-
Ian, was that none Of them contained
any clause imposing upon the stock
holders of corporations receiving sub
sidy bonds personal responsibility for
nU ha
such corporations by reason of it's fail
ure to pay those bonds at maturity.
1T is not too much to say" the opin-
ion continues 'that if the Acts of 1862
Ga had made stockholders of the cor
porations therein named personally IL
able in proportion to their stock for the
repayment of the bonds delivered to
such corporation, the accomplishing of
the objects Congress had in view would
have been seriously retarded if not
wholly defeated.
1T was not claimed, said the Justice,
that any such liability was imposed
upon the stockholders of the Union Pa
cific Company, and the position that it
did attach to the Central Pacific stock
holders could be sustained only upon
the theory that Congress intended to
corporation than of the Union Pacific.
But there was nothing in the legislation
of Congress from which that could be
inferred. Throughout the whole of the
Acts is manifest the purpose that the
California corporation should enjoy the
rights. immunities, benefits and privi-
leges given to it upon the same terms
and conditions as were prescribed for
the Union Pacific"
In conclusion, the opinion said: 'The
relations between the California cor
poration and the State We're of NO con-
Germ to the National Government. Con-
gress chose this existing artificial being
an an instrumentality to accomplish
national ends, and the relations between
the United States and that corporation
ought to be determined by the enact
ments which established those relations;
and if those enactments do not expressly
nor by implication subject the stock
holders to liability for its debts, it is to
be presumed that Congress intended to
waive its right to impose any such La
bility."
PACIFIC RAILROADS.