« AnteriorContinuar »
assert his own title. Neither lands nor any interest ing the other is presented. Held, that neither transtherein are to be conveyed by mere oral agreement,
mitted any rights to the other, and the heirs of H.
must take.(3) and the declarations or admissions of a demandant,
2. A father and two children were lost in a shipmade in good faith and by mere mistake, cannot
wreck, there being no evidence of survivorship. The estop him from proving the legal title to his estate, next of kin of the children claimed. Held, that the even if but for such admissions or declarations the burden of showing that they survived their father tenant might not have incurred the expenditures being upon them, they could not recover.(4) which he has made. Tolman v. Sparharrk, 5 Met.
3. A father seventy-three years old, and his daugh
ter thirty-three years old, being on board a steamship 469; Brewer v. Boston and Worcester R. R., id. 478.
which was lost at sea, perished in the same calamity, We are aware that some decisions in other States
and nothing was shown which tended to prove that have held a different rule, but as we deem that laid one died before the other. The heirs of the daughter down by the presiding judge to be well sustained can take nothing as coming to her from the father.(5) by our own authorities it does not seem necessary to
4. A. made a will, leaving some legacies and appointconsider them.” To same effect, Ila88 v. Plautz, 56
ing bis wife residuary legatee; she died, leaving several
children. A married again, and had no child. A., with Wis. 106; S. C., 43 Am. Rep. 699.
his wife and all his children, afterward were lost at sea. Held, that the will was not revoked. (6)
5. T. and his wife perished at sea in the same shipTHE PRESUMPTION OF SURVIVORSHIP. wreck, and there was no evidence who survived. The
question erose whether the relatives of the husband or RULE I. There is no presumption as to the order in of the wife were entitled to the residue of his estate. which iwo or more persons died who are shown to have Held, that the former were.(7) perished in the same accident, shipureck or battle. The 6. A husband and wife were lost with all on board law regards them as having died at the same instant. of a packet in the English channel. The next of kin The common law (unlike the civil law in this respect
of the husband claimed certain as property coming to
him as the heir of his wife. There being no evidence which answers the questions arising out of the death of several persons in a common calamity by recourse
that the husband survived the wife, the application was to a number of fixed presumptions based on the age,
h. A husband and wife were swept by the same wave sex and strength of the parties) (1) does not attempt
into the sea and not afterward seen. Held, that the to ascertain, in the absence of any evidence on which to go, the survivor of a common catastrophe. Strictly
court could not assume that either survived the other.
(9) it may be said that the common law presumes neither that one survived nor that all perished at the same
8. W. and his wife were killed at the massacre at moment. But by leaving the matter as one unascer
Cawnpore on or about the 27th of June, 1857. There tainable, “the practical consequence,'
was no evidence wbich perished first. There was uo
as has been said, “is nearly the same as if the law presumed all to
presumption that either survived the other.(10) bave perished at the same moment." It is in fact ex
9. Two persons, husband and wife, made separate
wills. In the husband's will the property was given to actly the same. Where two persons whether of the same or different ages, sexes or physical conditions)
the wife, “and in case my wife shall die in my lifetime,
then to W. W. in trust for the children on their comperish in an accident, shipwreck or battle, and there is no evidence to show which one of the several survived,
ing of age.” In the wife's will (made under a power the law will not raise any presumption from the fact
given her by her deceased father, in default of the exthat one was younger or stronger, or of the more hardy
ercise of which the property was to go to relatives spesex, that he survived an older or a weaker or a less
cifically named) property was given to her husband, hardy victim. The party alleging that one survived
and “in case my husband should die in my life-time,' the other must prove it; the onus is on him who
then to W. W. absolutely. The husband and wife claims a right or title upon the theory of the survivor.
and two children perished at sea, being all swept off ship of one to prove that fact affirmatively.(2)
the deck by one wave, and all disappearing together. ILLUSTRATIONS.
Held, that there was no presumption that the husband
had survived the wife or the wife the husband; that 1. H. and his wife, while in a railroad car together,
it was necessary that W. W. should show affirmatively are precipitated through a bridge into a river. They
that one or the other had survived, and that in the abare afterward found dead, and no proof of one surviv
sence of such proof the property went to the relatives (1) So in California Civ. Code, $ 1963, subd. 40.
specifically named in the will of the wife's father, als (2) Mason v.Mason, 1 Merivale, 307 (1816); Wallaston v. Ber- there had been no will by the husband nor any apkeley, 2 Ch. Div. 213 (1876); Re Heuss. 2 Salk. 533; Re Wheeler, pointment by the wife.(11) 37 L. J. (P. & M.) 40; Robinson v. Sallier, 2 Woods, C. C. 187 10. A mistress made a will, in which she left her (1875); Contra Calvin, Procurator-General, 1 Hagg. Ecc. 92
housekeeper the whole of her property. Mistress and (187); and see Durrant v. Friend, 5 De G. & Sn. 345 (1852); Scutton v. Patullo, L. R., 19 Eq. 375 (1875); R. v. Hay, 1 W. (3) Re Hall, 12 Ch. L. 12, 68 (1879). Black, 646. This was the celebrated case of General Stanwix, (4) Newell v. Nichols, 12 Hun, 604 (1978). who, with his wife and daughter by a former marriage, per- (5) Coye v. Leach, 8 Metc. 371 (1844). ished at sea on a voyage from Dublin to Eugland. Mr. Teame
(6) Wright v. Netherwood, 2 Salk. 592 (1743). composed two ingenious arguments, one in favor of each of
(7) Taylor v. Deblock, 1 Phill. 261 (1815); Re Selwyn, 3 Hagg. the claimants, which are printed in his posthumous works.
Ecc. 748 (1831). In this case the court said: “Instances have In Selleck v. Booth, 1 Tow. & Coll. C. C. 117, Vice-Chancellor Knight Boice held that a presumption of priority of death
occurred where under similar circumstances the question has
been, which of the two survived? But in the absence of clear might arise from the comparative age, strength and health
evidence, it has generally been taken that both died in the of the parties. In this case two brothers perished in a ship
same moment." Re Murray, 1 Curt. 596 (1837). wreck; one was the master; the other the second mate of the Sessel; and he ruled that the former (the elder) would be pre
(8) Satterthwaite v. Powell, 1 Curt. 705 (1838). sumed to have survived the latter as being the most expe.
(9) Underwood v. Wing, 4 De G., M. & G. 657 (1855). rienced sailor. Mr. Taylor (Ev. vol. 1, 160) says of this case 10) Re Wainwright, 1 Sw. & Tr. 257 (1858); Re Ewart, id. 258 that it cannot be relied on as authority, since it is opposed (1859). to a long current of decisions."
(11) Wing v. Ungrave, 8 H. L. Cas. 183 (1860).
housekeeper were murdered at the same time, there frequently acted upon that where a party dies posbeing no evidence which one died first. The claim- sessed of property that the right to that property ants under the servaut could not succeed.(12)
passes to his next of hin, unless it be shown to have 11. W., her husband and child sailed from New passed to another by survivorship. Here the next of York to Europe in March, 1841, in the steamship Presi- kin of the husband claims the property which was dent. Before this she had procured a policy of insur- vested in his wife: that claim must be made out; it ance'on her life for the benefit of her daughter. Neither must be shown that the husband survived. The propthe President nor any of its passengers were ever sub- erty remains where it is found to be rested unless sequently seen or heard of. There was no presumption there is evidence to show that it has been divested. :hat the daughter survived her mother.(13)
The parties in this case must be presumed to have 12. A mother and an infant son were lost in a ship. died at the same time, and there being nothing to wreck. The presumption is that they died at the same show that the husband survived his wife, the administime.(14)
tration must pass to her next of kin." 13. A. and B., husband and wife, are killed in the In case 7 Mr. Justice Wightman said: “We think same casualty, e. g. (the wrecking of a railroad train there is no conclusion of law upon the subject; in by the giving way of a bridge). The presumption is point of fact we think it unlikely that both did actuthat they died at the same time.(15)
ually die at the same moment of time, but there is no 14. A father, with his two children, perished in a evidence to show which of them was the survivor." shipwreck. There is no presumption either that a par- Where two persons," said Lord Chelmsford in case ticular one of the three survived the other, or that 9, are at one and the same instant washed into the they did not all perish at the same instant. (16)
sea, and disappear together, and are never seen any In case 3 it was said: “The case stands thus: Sylva- more, it is not possible for any tribunal called upon nus Keith and his daughter, Mrs. Coye, perished in the judicially to determine the question of survivorsbip to same disaster. No fact is shown giving the least indi- form any judgment upon the subject which can be cation that either party, from the nature of the acci. founded upon any thing but mere conjecture derived dent or the position of the parties, had any advantage from age, sex, constitution or strength of body or mind over the other for protecting life. Nothing is shown of each individual, and as our law has not established of their particular capabilities arising from personal any rules of presumptiou for these rare and extraordistrength or vigor. Nothing indeed is put into the case nary occasions, the uncertainty in which they are into control it in favor of either besides age and sex; volved leaves no greater weight on one side or the and these are not decisive tests in the present case. In
other to incline the balance of evidence either way. truth there is nothing to show that either the father If therefore it is necessary for W. W. to establish his or the daughter survived the other. The evidence claim under the will of Mrs. U., should prove that she
* * * fails to show that the estate of Sylvanus survived her husband, he must altogether fail."
that there was a particular survivor. It is not claimed that appears in the present aspect of the case they may
that the children died at the same time. Indeed it both have perished together. This being so, and no may be conceded that it is unlikely that they ceased arbitrary presumption being authorized by law in such to breathe at precisely the same instant,and as a phys. cases arising from age or sex, the consequence is that ical fact it may perhaps be inferred that they did not. those who seek to enforce their rights as heirs at law But this does not come up to the standard of proof. of Caroline E. Coye must fail in establishing their
The rule is that the law will indulge in no presumpright to a distributive share in the estate of Sylvanus
tion on the subject. It will not raise a presumption by Keith.”
balancing probabilities, either that there was a sursi. “With respect to the priority,” said Sir William
vor or who he was. In this respect the common law Wynne in case 4, “it has always appeared to me more differs from the civil law.
It is regarded fair and reasonable in these unhappy cases to consider as a question of fact to be proved, and evidence merely all the parties as dying at the same instant of time that two persons perished by such a disaster is not than to resort to any fanciful supposition of survivor.
deemed sufficient. If there are other circumstances ship on account of the degree of robustuess. *
shown, tending to prove survivorship, courts will then Therefore taking into consideration that there was no
look at the whole case for the purpose of determining wife or child at his death, I pronounce for the will."
the question; but if only the fact of death by a comIn case 5 Sir John Nicholl said: “There is no evi
disaster appears, they will not undertake dence direct as to this point; some inferences have
to solve it account of the nature of the been deduced. It is stated that the two bodies were question and its inherent uncertainty. It is not found together. This tends to show that they were in impossible for two persons to die at the same time, the same situation at the time of death. Upou the and when exposed to the same peril, under like cirwhole, I am not satisfied that proof is adduced that cumstances. It is not as a question of probability very the wife survived. Taking it to be that both died to- unlikely to happen. At most the difference can only gether, the administration is due to the representa
be a few seconds. The scene passes at once beyond the tives of the husband. I assume that both perished in
vision of human penetration, and it is as unbecoming the same moment, and therefore I grant the adminis
as it is idle for judicial tribunals to speculate or guess tration to the representatives of the husband. I am whether during the momentary life struggle one or not deciding that the husband survived the wife.”
the other may not have ceased to gasp first, especially In case 6 the judge said: “The principle has been
when the transmission of the title of property depends
upon it, and hence in the absence of other evidence the (12) See Doe v. Nepean, 5 B. & C. 92 (1833).
fact is assumed to be unascertaivable, and property (13) Moehring v. Mitchell, 1 Barb. Ch. 265 (1846).
rights are disposed of as if death occurred at the same (14) Stinde v. Goodrich, 3 Redf, 87 (1877); Re Ridgway, 4 time. This is done, not because the fact is proved, or id. 226 (1880). (15) Kansas Pac. R. C. v. Miller, 2 Cal. 443 (1874); Russell v.
that there is any presumption to that effect, but beHallett, 23 Kans. 276 (1880).
cause there is no evidence and no presumption to the (16) Newell v. Nichols, 75 N. Y. 78 (1878).
RULE II. But where the calamity, though common to reason of a defective sidewalk in the defendant city all, consists of a series of successive events, separated
From judgment entered on verdict for plaintiff, defrom each other in point of time and character, and each
fendant appeals. likely to produce death upon the several victims, accord- Hudd & Wigman, for respondents. ing to the degree of exposure to it, the diference in age, sex or health may raise inference survivor- Charles E. Vroman and W. J. Lander, for appelship. (17)
CASSODAY, J. Counsel for the defendant assigns as C., his daughter H. and son W., each between fifteen and sixteen years old, perished in a shipwreck.
error (1) that the court improperly overruled certain The ship struck a rock, and for some hours the passen
objections to questions put to the plaiutiff, Mrs. gers worked to lighteu her, and to reach places of
Wright, while being examined in her own behalf. safety. The father was in very feeble health, and un
After describing her fall, and stating her pregnancy at able to reach the upper deck, which was swept by the
the time, she was asked: “Did any thing happen to waves last, and which the children reached. The pre
you by reason of that fall?” This was objected to as sumption was that the father perished first.(18)
incompetent, and the objection was overruled, and the
defendaut excepted. To that question the witness RULE III. And the one of several in a common danger answered, in effect, that she fell on Saturday afterwhich proved fatal to all, who was last seen or heard noon, and bad a miscarriage the following Monday; alive within the operation of the cause of death, is pre- that she went home as usual, but that it was hard getsumed to have survived the others.
ting there, and that she felt faint. Neither the question ILLUSTRATIONS.
nor the answer seems open to the objection made. Ob
jection on the ground of incompetency generally goes 1. C., his daughter H. and son W. perished in a ship
to the fitness, ability, or capacity of the witness; the wreck. The ship, after striking, was swept by the waves, and C., who was at the time on the lower deck,
quality, fitness, adequacy, or legal sufficiency of some
document, record, writing, or other evidence. It is was washed off. Subsequently H. and W. were seen
sometimes inadvertently used in the sense of irreleon the upper deck. The presumption was that H. and W. survived their father.(19)
vancy or immateriality. But the evidence in question
was within the issue, and bore directly upon the ques2. B. and his wife perished on board a steamboat at
tion of damages. In no sense can it be regarded as insea by the explosion of one of the boilers, which shat
competent. tered the vessel and caused it to fall to pieces and sink in about half an hour. Mrs. B. was seen and beard
2. The same witness was also asked this question : calling for her husband after the disaster, but he was
"State whether you are not now suffering from the
effects of that fall?" This was objected to as leading, not heard to answer, nor was he seen at any time after
immaterial, and incompetent. Certainly it was the explosion. The presumption was that the wife survived the husband.(20)
neither incompetent nor immaterial, for the reasons 3. U., his wife and daughter C. were lost in a ship- just given. A leading question is one which unmis
takably suggests the desired answer. McPherson v. wreck. A wave swept them from the deck simulta
Rockwell, 37 Wis. 159. The only word in the question neously. U. and his wife were not afterward seen,
tending to suggest such answer is the word “not." In but C. was subsequently lashed to a floating spar by a
In view of the fact that she had already testified in efsailor to whom she called. The presumption was that C. survived ker parents.(21)
fect that the fall produced a miscarriage, which must
necessarily have caused suffering, we cannot say there 4. Father and son were hanged for a crime at the
was any abuse of discretion in overruling the objecsame time. Witnesses observed the son move his legs
tion. Id. The leading feature of the question only after the father had apparently become insensible.
went to the continuation of the suffering. The presuinption was that the son survived.(22)
John D. LAWSON.
3. The same witness was also asked this question: ST. LOUIS, Mo.
“What injury are you suffering from now in consequence of that fall?” This was objected to as imma
terial and incompetent, and for the further reason PERSONAL INJURY - CONDITION OF PLAINT
that the witness had not shown that she had medical IFF-EVIDENCE.
kuowledge, or was capable of testifying as an expert.
The question was certainly material and competent WISCONSIN SUPREME COURT, MARCH 18, 1884.
for the reasons given. Was it objectionable for want WRIGHT V. CITY OF FORT HOWARD.
of medical knowledge or capacity of the witness to
testify as After a plaintiff suing for injuries occasioned by a fall upon
an expert? The mere opinion, without a defective sidewalk has testified to her pregnancy at
knowledge, of a non-expert is inadmissible. Yanke v. the time, the question, “ Did any thing happen to you by
State, 51 Wis. 469; S. C., 8 N. W. Rep. 276. But here reason of that fall?" is competent.
the inquiry was as to what injury tbe witness herself When, in reply to that question, plaintifr testified that she was then suffering from in consequence of the fall? It
suffered a miscarriage, held, that the question, “State did not necessarily call for the exercise of any scienwhether you are not now suffering from the effects of
tific knowledge or skill. It called for facts relating to that fall," could not be objected to as leading.
the then present condition of the witness, her sufferA person, though not a medical expert, may testify with respect to the present injury he is suffering from a fall,
ing and the source of it. The nature of the injury was
It is a matter of fact and not mere opinion.
such that the cause of her suffering was more or less latent and concealed from common observation, and
yet necessarily perceptible to the senses of the witness. is an action for damages to the plaintiff wife by It in effect asked her what pain or disability she was (17) See Coye v. Leach, 8 Metc. 371 (1844); Pell v. Ball, 1 then enduring in consequence of the fall. It is very Cheeves (Eq.), S. C., 99 (1840).
much like the question put to the plaintiff witness who (19) Smith v. Croom, 7 Fla. 147 (1857).
sued for personal injury in Creed v. Hartman, 8 Bosw. (19) See Smith v. Croom, 7 Fla. 80 (1857).
123, which was this: “State to the jury the effect of (20) Pell v. Ball, 1 Cheeves (Eq.); S. C., 99 (1840).
that injury upon you, and how your situation is." (21) Underwood y. Wing, 4 De G., M. & G. 633 (1854), And it was held admissible, on the ground that there (22) Broughton y. Randall, Cro. Eliz, 503.
was no opinion of an expert elicited or requested. It
simply called for “facts of which” the court said, "she, in some respects, could alone be fully apprised, and in all was best apprised.” That case was affirmed in the Court of Appeals; but seemingly, counsel abandoned that objection, for it received no attention in that court. 29 N. Y. 591. To the same effect is South, etc., Co. v. McLenden, 63 Ala. 206; Laws. Ex. Op. Ev.
470 et seq.
the time of the accident, and did that materially contribute to the injury?” and then refusing to instruct the jury “that a slight want of ordinary care assisting the accident, contributing to it, is the contributory negligence implied by law, is the negligence mentioned in the question submitted.”
For the want of sufficient evidence to support an affirmative finding, the court properly refused to submit to the jury the question proposed. For the same reason, the court properly refused to instruct the jury upon that question. Cronin v. Delavan, 50 Wis. 375; 7 N. W. Rep. 249. Besides the instruction itself was erroneous. There is no such thing as “contributory negligence implied by law." It may be implied from admitted facts. Holt v. Peters, 55 Wis. 411; 13 N. W. Rep. 219. So it may be inferred, as a matter of fact, from the plaintiff's own evidence, if it be such as to justify the inference. Id.
7. Error is assigned because the court refused to set aside the verdict and grant a new trial, on the ground that the findings to the effect that the city authorities had knowledge, actual and constructive, of the defective condition of the sidewalk, at and previous to the time of the accident, were against the weight of evidence. It is enough to say, upon this question of fact, that each member of the court has carefully examined the record, and none of us feel authorized to reverse the judgment for want of evidence. Nor would we be justified in reversing the judgment on the ground of excessive damages. There was evidence tending to prove and the jury found that the injuries were permanent. This being so, we are not convinced that the jury were misled by passion, prejudice, or ignorance. The power of setting aside verdicts for excessive damages in an action of tort is very sparingly used, and never except in a clear case. Corcoran v. Harran, 56 Wis. 128; 12 N. W. Rep. 468. The judgment of the Circuit Court is
Mrs. Wright was certainly much better qualified to state her own internal condition, her own pain and suffering, and perhaps the source and cause of it, than any one else, and especially better thau any non-expert. But courts have gone further, and held that uuskilled witnesses are not precluded from testifying to such facts as come within their own observation relating to ordinary injuries or sickness of those with whom they have consorted. Sydleman v. Beckwith, 43 Conn. 9; Parker v. Boston, etc., Co., 109 Mass. 449; Com. y. Sturtivant, 117 id. 122; Thompson v. Stevens, 71 Peun. St. 161; Elliott v. Van Buren, 33 Mich. 49; Wilkinson v. Mosely, 30 Ala. 562; Rogers v. Crain, 30 Tex. 284; 1 Greenl. Ev., $ 440, and notes. The rule seems to be based on the ground of necessity, and confined to cases where the subject of inquiry is so indefinite and general as not to be susceptible of direct proof, or where the facts are so numerous or changeable as to be incapable of being held in the memory or detailed to the jury. Id. We must therefore conclude that where a plaintiff sues for personal injury and is a witness in his own behalf, and his pain, suffering, or internal condition is pertinent to the issue and perceptible to his senses, a question put to such party eliciting a description of such pain, suffering, or condition, and pot necessarily requiring scientific skill or knowledge, is a question calling for facts, and not mere opinion.
4. The court submitted to the jury the question whether the plaintiff, Sarah, at or about the time described in the complaint, fell on the sidewalk and received injuries by the fall. The jury answered, yes. The court also submitted to the jury the question whether the plaintiff, Sarah, was in the exercise of ordinary care when she was thrown on the sidewalk and received her injuries. They answered, yes. Complaint is made, that in submitting each of these questions, the judge expressed himself to the effect that he knew of no evidence in the case that would justify them in answering either question in the negative. The first question does not find that the miscarriage was the result of the fall, nor the extent of the injury, but simply that she fell and was injured. We find no evidence to the contrary. Upon the undisputed evidence, the court would have been justified in directing the jury to answer each of these questions as they did. Berg v. Chicago, M. & St. P. R. Co., 50 Wis. 419; 7 N. W. Rep. 347; Gammon v. Abrams, 53 Wis. 3:23; 10 N. W. Rep. 479; Schwitzer v. Connor, 57 Wis. 177; 14 N. W. Rep. 922. This being so, the defendant is in no position to avail itself of error in the manner of submitting either of those questious; much less in the mere expression of an opinion as to the absence of such evidence.
5. We do not understand that the court charged the jury that the plaintiffs might recover not only for loss of the wife's services, but also for the expense of labor substituted for the ordinary service of the wife. The charge did direct them that they “must consider all the evidence touching” those and the other facts in the case. But when the court came to tell the jury what they should allow as damages, if they found for the plaintiffs, there is nothing said as to the expense of such hired help.
6. Error is assigned for refusing to submit to the jury the question : “Did slight want of ordinary care on the part of the plaintiff, Sarah L. Wright, exist at
RIGHT TO MORTGAGE CORPORATE FRAN
UNITED STATES CIRCUIT COURT, S. D. NEW YORK,
FEBRUARY 11, 1884.
MEMPHIS & L. R. Co. v. Dow.* A corporation cannot retain property acquired under a trans
action ultra vires, and at the same time repudiate its ob
ligations under the same transactions. A corporation is not precluded from contracting with its bond
holders because they own all the stock. It may also law. fully mortgage its franchise for the purchase money. This right follows as a necessary incident to the right of man
aging its business according to the usual customs of men. A railroad corporation organized in Arkansas issued bonds se
cured by trust mortgage of its franchises and other prop. erty; the mortgage was foreclosed, and a scheme of reorganization adopted, in pursuance of which the company conveyed all its property to the trustees, and the bondholders formed a new corporation, to which the franchises and other property of the old one were conveyed by the trustees. The new corporation, thus composed entirely of the original bondholders, issued its bonds to those bondholders, secured by mortgage of its franchises and other property; and the new bonds were received in lieu of the old. Afterward portions of the stock passed into other hands. Held, that the bonds constituted a valid obligation, not withstanding the stockholders of the contract. ing corporation were the contractees, and notwithstanding a provision in the Constitution of Arkansas forbidding private corporations to issue stock or bonds except for value actually received. equity.
* 19 Federal Reporter, 388.
Dillon & Swayne, for plaintiff.
Louis, Iron Mountain and Southern Railway ComPlatt & Bowers, for defendant.
pany. The object seems to have been to acquire conWALLACE, J. The complainant's bill is filed against trol of the corporation and subordinate its managethe trustees and holders of the mortgage bonds of the
ment to the interest of the Iron Mountain company. complainant for $2,600,000, and the mortgage upon its
The parties who thus acquired control now control the corporate franchises and property for securing the corporation, and speaking through it, insist that the same, executed May 2, 1877, seeking to annul the mortgage bonds, which were the consideration of the bonds and mortgage, upon the ground that they were
transfer of the property to the corporation, are void, issued and executed by the complainant without cor
and should be set aside. porate power in that behalf.
The case then is this: The complainant is a corporaA brief statement of the facts relating to the crea
tion which was brought into life by a body of credition of the mortgage bonds, their origin, considera- tors of a pre-existing corporation, who had succeeded tion and purpose, will serve to present the legal ques- to all the property thereof, and who proposed to contions involved. The complainant, created under a vey such property to the complainant upon receiving, special act of the Legislature of Arkansas, is a reor- among other considerations, the mortgage bouds in ganized corporation, which has succeeded to the prop- suit. The complainant assented to this proposition, erty and franchises of a former corporation of the accepted a conveyance of the property, and executed same name under the foreclosure of a mortgage of its mortgage bonds. It asserts now that although it that corporation, and a conveyance under the decree had power to acquire the property it had no lawful of foreclosure. By the terms of that mortgage, and power to pay for it in the terms and manuer promised. by the provisions of the decree of foreclosure in con- Its contention is founded upon a section of the charformity therewith, it was provided that if the trustees ter or act of incorporation, by which alone it is claimed named in the mortgage should be requested so to do its power to create a mortgage is conferred, and upon by a majority of the holders of the bonds secured a provision of the Constitution of Arkansas which limthereby they might purchase the property, and in that its the power of corporations of that State in issuing case no bondholder should have any claim to the
bonds. The section of the charter relied on is section premises or the proceeds thereof, except for his pro 9, which is as follows: rata share, as represented in a new corporation or “The said company may at any time increase its company to be formed, by a majority in interest of capital to a sum suflicient to complete the said road, said bondholders, for the use and benefit of the hold- and stock it with any thing necessary to give it full ers of the mortgage bonds. The trustees purchased at operation and effect, either by opening books for new the sale, and thereupon the bondholders proceeded to stock, or by selling such new stock, or by borrowing organize the present corporation. There was duo to money on the credit of the company, and on the mortthe holders of the old mortgage bonds $2,600,000 of prin- gage of its charter and works." cipal, and $1,300,000 of unpaid interest, and the scheme The constitutional provision is contained in article of reorganization contempiated the acceptance by the 12, and declares: bondbolders of the new mortgage bonds in place of No private corporation shall issue stock or bouds the old ones, and of the capital stock in place of their except for money or property actually received or laaccrued and unpaid interest. Accordingly, by the bor done; and all fictitious increase of stock or indebtterms of the reorganization agreement, the capital edness shall be void." stock of the new corporation was fixed at $1,300,000, As the bonds and stock issued by this corporation disided into 13,000 shares of $100 each, and was de- were issued for property actually received, viz., the clared to be full paid; and by the same agreement the said railroad and all the corporate property, it is not trustees who had purchased at the foreclosure sale obvious how this constitutional provision has any apwere directed to transfer the property and franchises plication to the present controversy. It is assumed in purchased by them to the new corporation upon the the argument of counsel for the complainant, and reitcondition, among others, that the new corporation erated several times, that the complainant received no shonld execute and deliver to said trustees the new consideration for the mortgage bonds. Upon what mortgage bonds for $2,600,000, now sought to be set theory this is claimed or can be maintained is not apaside. Thereupon-the new corporation having agreed parent, and indeed is incomprehensible. The original to accept a conveyance of the property and franchises corporation had been divested of its property by the of the old corporation pursuant to the terms of the foreclosure sale. The newly-organized corporation acreorganization agreement--the trustees conveyed the cepted a reconveyance upon condition of executing the same to the new corporation, the deed of conveyance new mortgage bonds to the vendors. Whether the reciting the conditions upon which, as trustees, for the complainant is a new corporation or whether it is the owners of the outstanding mortgage bonds, thəy were old corporation, need not be considered, because in authorized to make such conveyance, and further re- either view the mortgage bonds were the consideraciting the acceptance of such conditions by the new tion of the conveyance. corporation. The corporation accepted this convey- The proposition which is advanced that the vendors ance, and took possession under it. Every certificate and the vendees were the same persons, and therefore of shares of stock issued by it contains a recital that there could be no contract or sale, is not even technithe holder takes his stock subject to the mortgage cally correct. One of the parties was the corporation; bonds in question. The new mortgage bonds were is- the bondholders, by their trustees, were the other parsued and delivered to the trustees for the holders of ties. True, the stockholders of the corporation wero the outstanding mortgage bonds,and were distributed also the bondholders, but the circumstance that all the by the trustees pro rata to the holders of those bonds. stockholders of a corporation are at the same time the The capital stock was also apportioued among the several owners of property, which the corporation holders of these bonds pro rata, and certificates were wishes to buy, does not destroy the power of the pardelivered for the shares to which each bondholder was ties to contract together. Suppose there were two
corporations, each composed of the same stockholders, After the reorganized corporation had operated the can it be seriously contended that one corporation railroad for several years, and early in the year 1880,
could not make a contract with the other? A corpothe majority of the stock was acquired by Messrs. ration may contract with its directors; why not with Margrand, Gould and Sage in the interest of the St. its stockholders? If the complainant ever acquired