St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1896-03-03
SUPREME COURT DECISION IN THE
FAMOUS CASE AGAINST UNCLE
SAM.
STOCKHOLDERS NOT LIABLE
AS. INDIVIDUALS FOR DEBT OF THE
PACIFIC RAILWAYS TO THE
GOVERNMENT.
SEVERAL OTHER DECISIONS.
for DepredatiOns of It's Indian
Wards.

WASHINGTON, March. 1.-THE su-
preme court today decided the Stanford
case in favor of Mrs. Stanford. Justice
Harlan delivered the opinion, which
proceeded entirely upon the theory
that the Pacific railroads were in
tended to constitute a continuous line,
and that the government was protect
ed by its mortgage upon the roads. 1t
is admitted in the opinion that the Sc
curity was impaired by the act of 1864,
subordinating the government lien to
the first mortgage. But" Justice
Harlan says, 'if the act of 1862 fairly
interpreted excludes the idea that
stockholders of the company's receiv-
ing subsidy bonds were to be per-
sonally liable to the United States for
the principal and interest accruing on
these bonds, the legislation of 1864, how
eyer unwise, did not have the effect
of imposing such liability"
The fact that none of the Pacific
railroad acts contains clause impos-
Ing personal liability is commented on
as important. 1t was competent for
congress to provide for such liability,
but as it did not do so it cannot be
claimed, nor is it claimed, that the
stockholders of that corporation in
CURED by their subscriptions of stock
any liability to the United States or
to any other creditor of the Union Pa
cific Railroad company for the debts Of
that corporation. They were bound
of course, to make good the amount of
their subscriptions. But that being
creditors of the corporation body
ceased Congress, by its legislation,
encouraged and invited the investment
of private capital in the construction
of highway, which, at that time, was
deemed of vital Importance to the whole
country"
II THE CASE ELUCIDATED
Using the Union Pacific as an ..:lus-
tration, the opinion continues: LAS the
stakeholder Of a corporation is not la
BILE beyond the amount of his unpaid
subscription for it's debts, unless such
liability is imposed by statute and as
the acts of congress in question are 81
lent upon that subject, every subscriber
to the stock Of the Union Pacific Rail-
road company must be deemed to have
become such upon the condition, i'm
piled by law, that he should not be
personally liable for the debts of the
corporation. 1t is not too much to say
that if the acts of 1862 and 1864 had
made the stockholders of the corpora
lions therein named personally liable
In proportion to their stock for the re-
payment of the principal and interest
of the bonds issued and delivered to
such corporation, the accomplishing of
the objects congress had in view
would have been seriously retarded if
not wholly defeated.
''It is said, however, that these prin-
cipleS have no application to stock
holders Of the California corporations
that came into existence under the con-
stitutional and statutory provisions
making stakeholder Of a railroad cor
pOration liable in proportion to his
stock for It's debts and obligations.
This position cannot be sustained eX-
cept upon the theory that congress in
tended to take larger security in re-
spect of that part of the Pacific road
which the California company under
took to construct and maintain than
1t took in respect to the Union Pacific
railroad But it cannot be inferred
from the legislation of congress that 1t
intended for the protection of the inter
ests of the United States to impose a
heavier liability upon the stockholders
of the California company than was i'm
Union Pacific Railroad company. Why
should it so have intended?
!, TREAT BOTH ALIKE.
"Why should it be supposed that con-
gresS would purpoSely make it more
difficult to construct one part of the
national highway than another? The
supreme end sought to be attained was
by means of private capital and gov
ornamental n
ton Of the whole line for the benefit
primarily of the United States and for
the use of all the people. If, instead
of making use of the Central Pacific
Railroad Company of California, con-
gross had itself created a corporation
With authority to construct a road from
San Francisco through the territories
Of the United States to meet the Union
Pacific Railroad company, no one
would suggest that the stockholders of
ouch corporation would have been la
Die for it's debts, unless congress eX-
pressly imposed liability upon Them
The opinion goes on to say that to
impose an obligation upon the Cali
fornia corporation not imposed upon
the Union Pacific would be inconsis-
cent
Justice Harlan was particular to
state that the question whether the
stockholders of the California company
can be made liable for it's debts to the
United States arising in some other
way than under the Union Pacific acts.
or by the acceptance of the United
States bonds in aid of the construction
of it's road, is not involved in this case
Nor are We" he continues, ''to decide
whether the adoption of the California
corporation as an instrument of the ma
tional government in accomplishing a
national object exempted it's stockhold-
ers from liability under the constitu-
ton and laws of California to ordinary
creditors"
UNION PACIFIC BONDS.
Reference is made in the opinion to
the obligation of the Pacific railroads
to pay the Union Pacific bonds at
maturity, which obligations the opin-
ion holds, afford good reasons. apart
from the words of the act of congress.
why a rule should not be applied to
the stockholders of the Central Pacific
Railroad company, which confessedly
cannot be applied to stockholders of
the Union Pacific Railroad company.
The opinion concludes as follows:
"The relations between the California