applicable to this right of action; and the other ruling, which is matter of general law, is that the right of action given by the statute is in the nature of a specialty. There is nothing peculiar to the Georgia statute with regard to the liability of stockholders which led the supreme court of Georgia to rule that the action was in the nature of a specialty; and it was from the principles of the general law, as interpreted by that court, and held by it to be applicable to actions given by statutes, that the court reached its conclusion. Lane v. Morris, 10 Ga. 162-164; Thornton v. Lane, 11 Ga. 459-502. It was not, therefore, the interpretation of a state statute, but the announcement of a general rule of law, without special reference to the particular statute. It would appear, therefore, that the decision of the supreme court of Georgia that every right of action given by a statute is in the nature of a specialty is not the construction of a statute of that state, which a federal court is bound to follow, but is a ruling upon a question of general law, as to which the decision of the state court is not binding. Burgess v. Seligman, 107 U. S. 33, 2 Sup. Ct. 10; Township v. Talcott, 19 Wall. 666-677. The decision of the supreme court of Georgia, so far as it concerned the statute of limitations, was, in effect, a ruling that by the Georgia statute of limitations there was no statutory limitation as to the actions of this class. The court said (Thornton v. Lane, 11 Ga. 502):

"We are clear that a statutory liability is not included within any of the acts of limitation of this state. It is neither a simple contract, nor a specialty, -for nothing is, but a writing under seal,-but a quasi contract in the nature of a specialty. Being at least as high evidence of indebtedness as any specialty can be, twenty years is the proper bar to actions brought to enforce the obligation it imposes."

Is there any reason why this ruling of the supreme court of Georgia with respect to the Georgia statute of limitations should be followed in Maryland, with respect to the Maryland statute of limitations? In the first place, as matter of general law, the supreme court of the United States has decided that the liability of a stockholder arises from his acceptance of the act creating the corporation, and his implied promise to fulfill its requirements, and that the proper remedy is an action on the case, and that the action is barred by the statute of limitations applicable to actions upon the case. The case of Carrol v. Green, 92 Ü. S. 509, arose out of the failure of the Exchange Bank of Columbia, in South Carolina; and the suit was based on the South Carolina law, making each stockholder of the bank liable for its debts, in a sum not exceeding twice the amount of his shares. This South Carolina law is, in essentials, similar to the Georgia law on which this suit is based. Four year had elapsed after the statute began to run before the suit was instituted in the circuit court of the United States for the district of South Carolina; and, by the South Carolina statute, actions upon the case and actions of debt grounded upon any lending or contract, without specialty, were barred after four years. The supreme court of the United States held that the liability of stockholders to creditors arose from their acceptance of the act creating the corporation, and their implied promises to fulfill its requirements, and that the proper remedy was

an action on the case, and that, as it was an action without specialty, it was barred in four years. The court said (page 515):

"It is insisted by the learned counsel for the appellees that, while the limitation act of 1712 provided that 'actions of debt upon any lending or contract without specialty' should be brought within four years, it did not limit actions of debt upon specialties, and that the liability here in question, being created by statute, is to be regarded as falling within the latter class. It is said that an obligation to pay money, arising under a statute, is a debt by specialty. In support of this point, Bullard v. Bell, 1 Mason, 243, Fed. Cas. No. 2,121, has been pressed upon our attention. Fully to examine that case would unnecessarily extend this opinion. It was cited in Baker v. Atlas Bank, 9 Metc. (Mass.) 182, and in Corning v. McCullough, 1 N. Y. 58, without effect. We think it is distinguishable from the case in hand in several material points. If it be in conflict with the cases to which we have referred in this connection, we think the results in the latter were controlled by the better reason."

And in Beatty v. Burnes, 8 Cranch, 98, Mr. Justice Story said: "It is contended that the present suit, being a statute remedy, is not within the purview of the statute of limitations. But we know no difference in this particular between a common-law and statute right. Each must be pursued according to the general rule of law, unless a different rule be prescribed by statute," etc.

It has never been held in Maryland that a statutory right or remedy such as the one here in question is in the nature of a specialty. Norris v. Wrenschall, 36 Md. 492-500. That it has been so held in Georgia is not binding in Maryland.

A quite similar question was before the supreme court in Bank v. Donnally, 8 Pet. 361. That suit was instituted in the circuit court for the district of Virginia upon a promissory note made in Kentucky. By the law of Kentucky, such instruments were placed upon the same footing, and were to be received in all courts, as writings under seal. The court said (page 371):

"The statute of limitations of Virginia provides that 'all actions of debt grounded upon any lending or contract without specialty shall be commenced and sued within five years next after the cause of such action or suit and not after.' This being the language of the act, and confessedly governing the remedy in the courts of Virginia, the bar of five years must apply to all cases of contract which are without specialty, or, in other words, are not founded on some instrument acknowledged as a specialty by the law of that state. The common law being adopted in Virginia, and the word 'specialty' being a term of art of that law, we are led to the consideration whether the present note is deemed, in the common law, to be a specialty. And certainly it is not so deemed. It is not a sealed contract, nor does it fall under any other description of instruments or contracts or acts known in the common law as specialties. The argument does not deny this conclusion, but it endeavors to escape from its force by affirming that the note is a specialty according to the laws of Kentucky, and, if so, that this constitutes a part of its nature and obligation, and it ought everywhere else, upon principles of international jurispru dence, to be deemed of the like validity and effect. * * But, whatever may be the legislation of a state as to the obligation or remedy on contracts, its acts can have no binding authority beyond its own territorial jurisdiction. Whatever authority they have in other states depends upon principles of international comity, and a sense of justice. The general principle adopted by civilized nations is that the nature, validity, and interpretation of contracts are to be governed by the law of the country where the contracts are made and are to be performed, but the remedies are to be governed by the laws of the country where the suit is brought, or, as it is comper diously expressed. by the lex fori. No one will pretend that, because an action of covenant will lie in Kentucky on an unsealed contract made in that state, therefore a like

action will lie in another state, where covenant can be brought only on a contract under seal. ** The remedy in Virginia must be sought within the time and in the mode and according to the descriptive characters of the instrument known to the laws of Virginia, and not by the description and characters of it prescribed by another state. * If, then, it were admitted that the promissory note now in controversy were a specialty by the laws of Kentucky, still it would not help the case, unless it were also a specialty and recognized as such by the laws of Virginia; for the laws of the latter must govern as to the limitation of suits in its own courts, and as to the interpretation of the meaning of the words used in its own statutes."

I think that the Maryland statute of limitations, requiring actions on the case, or actions of debt on simple contracts, to be brought within three years, is applicable in this case, and that the plaintiffs' demurrer to the defendant's plea of limitations must be overruled.

STURTEVANT v. NATIONAL FOUNDRY & PIPE WORKS, Limited, et al. (Circuit Court of Appeals, Seventh Circuit. July 26, 1898.)

No. 494.

1. UNPAID SUBSCRIPTION FOR STOCK-ISSUE OF NEW CERTIFICATES-LIABILITY OF ASSIGNEE THEREOF. Rev. St. Wis. § 1753, forbids and declares void an issue of stock for which payment has not been made. Section 1756 provides that persons transferring such stock shall be liable to certain corporate creditors for the amount unpaid thereon. Certificates of shares for which the subscriber had not paid were surrendered, and new certificates, in lieu thereof, issued to others as collateral security for a liability of the corporation; it being understood that the original subscriber was the owner of the new shares, subject to the pledge. Held, that one to whom the original subscriber assigned his interest in such certificates was not liable to pay therefor unless he allowed himself to be represented as a shareholder to creditors, who, in giving credit, acted on the faith of such liability.

2. SAME LIABILITY OF ONE ACQUIRING TITLE THROUGH ONE NOT LIABLE. Where holders of certificates of stock issued directly to them as collateral security for an obligation of the corporation were not liable to pay therefor, either to the corporation or its creditors, one who acquired, through them, title to, interest in, or appearance of holding, such certificates, cannot be held so liable.

Appeal from the Circuit Court of the United States for the Eastern District of Wisconsin.

This was a suit, in the nature of a creditors' bill, brought by the National Foundry & Pipe Works, Limited, against the Oconto City Water-Supply Company, S. D. Andrews, and others. A decree in favor of complainants and intervening creditors was reversed by this court (22 C. C. A. 110, 76 Fed. 166), and, on remand, a decree was rendered against George W. Sturtevant, Jr.,-against whom, on default of answer, a decree pro confesso had been taken,-and he prosecutes this appeal.

George G. Greene and W. H. Webster, for appellant.

George H. Noyes, for appellees.

Before WOODS and SHOWALTER, Circuit Judges, and BAKER, District Judge.

WOODS, Circuit Judge.

This appeal is from the decree rendered in the circuit court upon the return of the mandate of this court in Andrews v. Pipe Works, 46 U. S. App. 281, 22 C. C. A. 110, and 76 Fed. 166. In pursuance of the mandate the court dismissed the bill as against Andrews and Whitcomb, and certain of the other parties, but proceeded to enter a decree against the present appellant, George W. Sturtevant, Jr., who had not been made a party to the appeal of Andrews and Whitcomb,-nothing having been adjudged against him in the decree taken against them, though before the rendition thereof there had been taken against him, on default of answer to the bill, a decree pro confesso. The final decree against him, from which this appeal is prosecuted, after disposing of the other parties in accordance with the mandate and reciting that a decree pro confesso had been theretofore taken against him, finds that he was and is the assignee and successor in interest of the defendant Charles C. Garland, who subscribed for 990 shares of the capital stock of the defendant the Oconto Water Company; that the shares were issued, and all rights under Garland's subscription therefor were assigned to him, and he was and is the holder thereof, without anything having been paid therefor by him or by Garland or by any one, of which fact he had knowledge when he took the assignment; that he is liable for the unpaid amount due upon such subscription and stock, so far as necessary to discharge the indebtedness of the Oconto Water Company, "heretofore adjudged herein, not exceeding, however, the sum of $99,000." And accordingly the court entered a decree that Sturtevant pay to the several creditors named the amounts of their respective claims, and to the appellee the National Foundry & Pipe Works, Limited, the sum of $25,637.32, with interest thereon from October 3, 1892, and $254.10 costs, less $424.93 realized from the proceeds of the sale made under the mechanics' liens decrees obtained by the appellee.

The appellant contends that the decree is not justified by the bill or by the proofs, or by the mandate of this court. It is suggested in the brief for the appellees that the assignment of errors does not raise any of these questions. It is not alleged in the assignment that the decree is contrary to the mandate of this court, but there are specifications of error to the effect that the decree is wrong, in that it adjudges the appellant liable for the unpaid amount of the shares of stock subscribed for by Garland, to the extent necessary to discharge the indebtedness of the Oconto Water Company, and decrees that he pay to those creditors, respectively, the several amounts due them. Whether that decree is right depends upon the allegations of the bill, and upon the proofs. Thompson v. Wooster, 114 U. S. 104, 5 Sup. Ct. 788; Ohio Cent. R. Co. v. Central Trust Co. of New York, 133 U. S. 83, 10 Sup. Ct. 235.

The facts, briefly stated, are that Garland had subscribed and received certificates for 990 of the 1,000 shares of the stock of the company, but had paid nothing therefor. In October, 1890, the certificates were surrendered,-Andrews and Whitcomb having refused to accept an assignment thereof, and certificates for a like number of shares were issued by the company directly to Andrews and Whitcomb, in pursuance of a contract theretofore made, to secure a lia

bility of the company to them. It seems to have been understood all the while that the ultimate ownership of the shares of stock issued to Andrews and Whitcomb, subject to the pledge, was in Garland; and accordingly, on January 12, 1891, in consummation of an arrangement between Garland and Andrews and Whitcomb, but at the instance and in the main for the benefit, of Andrews and Whitcomb, Garland executed to Sturtevant a writing whereby, after declaring himself the true owner of certificates of stock described by number and as held by Andrews and Whitcomb as collateral security, he said, "I do hereby, for value received, sell, assign, transfer, and set over unto George W. Sturtevant, Jr., Bushnell, Ill., all my right, title, and interest in and to all the said certificates of stock," etc.; adding a power of attorney to make all necessary assignments and transfers on the books of the company. It does not appear that any assignment of the stock on the books of the company was made, but the record of the proceedings of the company on January 12, 1891, shows a written consent of stockholders to the holding of a meeting of the stockholders of the company, wherein it is recited that each of the undersigned owns the number of shares of stock in the company set opposite his name, and opposite the subscribed name of Sturtevant is set "990 shares." A stockholders' meeting was then held, at which Sturtevant was elected a director of the company in the place of Garland, resigned; and at a later meeting of the directors on the same day he was chosen president of the company, and served in that capacity until his testimony was taken in this case. For the general scope of the original bill and amendments thereto reference is made to the report of the opinion on the appeal of Andrews and Whitcomb. The decree by which Andrews and Whitcomb had been declared liable to the creditors of the company for the amount of the unpaid 'stock subscribed for by Garland having been reversed and the cause remanded, it was held, upon the same averments and proofs, that Sturtevant had come into the shoes of Garland and was liable to the creditors of the company to the amount of the stock for which Garland had subscribed. The more important of the allegations of the bill which are pertinent to the question, and some of which, counsel argues, are sufficient to support the decree, are the following:

That Garland subscribed for and received two certificates of stock,-one for 490 shares, and one for 500 shares,-which certificates on October 2, 1890, he assigned to the defendants Andrews and Whitcomb. That on October 18, 1890, Garland, as president and the secretary of the company, caused to be issued to Andrews and Whitcomb, in lieu of the certificates theretofore issued, three certificates, each for 300 shares, and another certificate for 97 shares, of the stock of the company. That these certificates were issued by the corporation without consideration in money, labor, or property, "contrary to the provisions of the statute of the state of Wisconsin, and were in all respects fictitious and void, and in fraud of the rights of the complainant and other creditors" of the Oconto Water Company. "That no further subscription to the capital stock of said corporation has been made, and no further stock or certificates of shares of stock have been issued by or on behalf of said corporation, but that said Andrews and Whitcomb, by virtue of the premises, became, and are now, the assignees of the subscribers to the capital stock of said corporation, and claim to be owners and holders of the certificates of shares therein, to the said amount of 997 shares of its capital stock, and the said defendants Matt. S. Wheeler, A. J. Elkins, and N. S.