SAINT LOUIS, FEBRUARY 21, 1879.

CURRENT TOPICS.

In a recent case in New York, Casey v. New York Central R. Co., 15 Daily Reg. 301, the law of contributory negligence in that State, as applicable to children, was reviewed, and the gradual change within the past fifteen years, from the strict rule once enunciated by the Court of Appeals, that a child should be held to the exercise of the same care and prudence as an adult, was pointed out. The case of Hanesberger v. Second Avenue R. Co.,-2 Abb. (t App.) 378, seemed at one time to have established that doctrine. In that case the court said that in applying the rule that exacts the decree of care which a person of ordinary prudence would exercise in the situation supposed, the law makes no discrimination on account of age; that it applies to all persons without exception. But an examination of the more recent cases in that court presents a different and more correct rule, and one now well settled. Thus, in O'Mara v. Hudson R. R. Co., 38 N. Y. 447, where the question was one of contributory negligence, Hunt, C. J., in delivering the opinion of the court, says: "The old, the lame and the infirm are entitled to the use of the streets, and more care must be exercised towards them by engineers than towards those who have better powers of motion. The young are entitled to the same rights, and cannot be expected to exercise as great foresight and vigilance as those of maturer years." In Morey v. Central City R. Co., 51 N. Y. 667, Johnson, J., said that the young are entitled to have their condition and ability considered in diminution of the degree of care exacted of them; that no greater degree of care was required than the capacity of the person would allow him to exert. In Reynolds v. New York Central R. Co. 58 N. Y. 252, Andrews, J., in delivering the opinion of the court, says that "the law discriminates between children and adults, the feeble and the strong, and only requires of each that degree of care to be reasonably expected in view of his age and condition," and the same judge in delivering the opinion of the court in McVol. 8-No. 8.

421. upon the question of contributory negligence says that it is not to be applied inflexibly in all cases without regard to age or cir-、 cumstances. "The law is not so unreasonable as to expect or require the same maturity of judgment or the same degree of care or circumspection in a child of tender years as in an adult."

-THE brevity in general of the opinions of Mr. Chief Justice Waite, which we have several times called attention to, still continues to be noticeable. In Hunt v. Hunt, decided at this term of the Supreme Court of the United States, (the plaintiff and defendant in error being the lately appointed judge of the Court of Claims), the opinion of the Chief Justice as to the two questions raised was as follows: "In the Dartmouth College case, 4 Wheat. 629, it was expressly said by Chief Justice Marshall, in delivering the opinion of the court, that the provision of the Constitution prohibiting States from passing laws impairing the obligation of contracts had never been understood to embrace other contracts than those which respect property, or some object of value, and confer rights which may be asserted in a court of justice. It never has been understood to restrict the general right of the legislature to legislate upon the subject of divorces. Those acts enable some tribunal, not to impair the marriage contract, but to liberate one of the parties because it has been broken by the other.' This disposes of the first ground upon which our jurisdiction is invoked in this case. The law complained of simply provides for divorces in certain cases, after hearing by a court of competent jurisdiction, The suit in Louisiana was one affecting the personal status of the defendant in error, a citizen of that State. The contract of marriage from which he sought to be liberated had been entered into in that State, when both parties were citizens of the State. The question presented for decision below and decided, was not what would be the rights of the plaintiff in error if she had been a citizen of the State of New York when the suit was commenced against her in Louisiana, but whether she was a citizen of New York. Such a decision of the State court does not present a

question of which we have jurisdiction. The motion to dismiss is granted."

By the enactment by Congress, of the Revised Statutes of the United States, a new body of laws, as by original legislation, was not made; therefore, they do not make any thing law which was not law on the first day of December, 1873. This ruling was recently made in the United States Circuit Court for the District of Alabama, in the case of United States v. Moore, 7 Rep. 179. A plea in abatement had been filed to an indictment found in the District Court, on the ground that one of the persons composing the grand jury which found the bill was disqualified to act because of having taken up arms against the United States, and the question was therefore presented whether section 820 of the Revised Statutes is now in force. BRUCE, J., said. "It is admitted that the section was not the law on the first day of December, 1873, and it appears that it was section one of an act approved June 17, 1862, and was repealed by section five of an act approved April 2, 1871. It is claimed that it was re-enacted by the adoption of the Revised Statutes of the United States. Section 5595, of the Revised Statutes, provides: "The foregoing seventy-three titles embrace the statutes of the United States, general and permanent in their nature, in force on the first day of December, 1873, as revised and consolidated by commissioners appointed under an act of Congress, and the same shall be desig

nated and cited as the Revised Statutes of the United States." It certainly can not be maintained that this language enacts or re-enacts any thing as law which was not the law on the first day of December, 1873. The seventythree titles were supposed to embrace the laws of the United States, general and permanent in their nature, but if they contained any thing which was not law on the first day of December, 1873, its introduction into the Revised Statutes, be it by mistake or otherwise, can not and does not make it the law. The test of the matter is, was it the law on the first day of December, 1873? If not, this language does not re-enact it. The statutes was not the enactment of a body of laws as original legislation, but it was the enactment of a more convenient expression of the law as it existed on

the first day of December, 1873. To determine how and in what mode the law shall be designated and cited, is a very different thing from enacting laws, and the language shows that it was not the latter, but the former which Congress did when it adopted the Revised Statutes. The conclusion is that section

820, of the Revised Statutes, not being the law on the first day of December, 1873, was not re-enacted by being carried into the Revised Statutes, and that the juror was not disqualified."

PAID-UP SHARES.

Some of the judges of the Federal Courts, in passing upon questions relating to the liability of shareholders in corporations, have lately fallen into the habit of quoting extensively the recent English decisions. Foreman v. Bigelow, 7 Cent. L. J. 430; Phelan v. Hazard, 6 Cent. L. J. 109; Johnson v. Laflin, 6 Cent. L. J. 124. Unless care is taken to keep in mind the distinctive grounds on which the English and the American courts proceed in charging shareholders of insolvent companies, the practice of relying upon English decisions will mislead the American judge into a conspicuous departure from the doctrine established by the courts of this country, and this departure will not be in the direction of honesty and fair dealing.

In 1824, the fertile brain of Mr. Justice Story invented the doctrine that the capital stock of a corporation is a trust fund or pledge for the payment of its creditors. Wood v. Dummer, 3 Mason, 308. This doctrine, founded in the largest equity, has been sanctioned by decisions of the Supreme Court of the United States, and of the highest courts of the several States wherever the question has arisen. It has never been disputed by an American court, and has become a principle of American jurisprudence, as well settled as any principle can be. Story's Eq. Jur., § 1252; Wood v. Dummer, 3 Mason, 308; Vose v. Grant, 15 Mass. 505; Spear v. Grant, 16 Mass. 15, 19; Baker v. Atlas Bank, 9 Metc. 192; Mumma v. Potomac Co., 8 Pet. 286; Curran v. Arkansas, 15 How. 304; Tarbell v. Page, 24 Ill. 46; Ogilvie v. Knox Ins. Co., 22 How. 387; Payson v. Stoever, 2 Dill. 431; Sawyer v. Hoag, 17 Wall. 610; Burke v

Smith, 16 Wall. 390; New Albany v. Burke, 11 Wall. 96; Hightower v. Thornton, 8 Ga. 486; Robinson v. Carey, 8 Ga. 530; Reid v. Eatonton Co., 4 Ga. 102; Slee v. Bloom, 19 Johns. 456; Briggs v. Penniman, 8 Cow. 395; Mann v. Pentz, 3 N. Y. 422; Hurd v. Tallman, 60 Barb. 272; Bank of St. Marys v. Powers, 25 Ala. 612; Carey v. Woodward, 53 Ala. 375; Smith v. Huckabee, 53 Ala. 195; Paschall v. Whitsett, 11 Ala. 472; Allen v. Montgomery R. Co., 11 Ala. 437; Bassett v. St. Albans Hotel Co., 47 Vt. 313; Adler v. Milwaukee Patent Brick Co., 13 Wis. 57; Miers v. Zanesville Co., 11 Ohio, 274; s. c., 13 Ohio, 197; Henry v. Vermillion Co., 17 Ohio, 187; Moss v. Burroughs, 1 Woods, 467; Payne v. Bullard, 23 Miss. 90; Tinkham v. Borst, 31 Barb. 407. The capital stock of a corporation, which is subject to the operation of this rule, consists of all the stock which the members have subscribed. Adler v. Milwaukee Patent Brick Co., 13 Wis. 57; Hightower v. Thornton, 8 Ga. 486; Briggs v. Penniman, 8 Cow. 387; Allen v. Montgomery, R. Co., 11 Ala. 437; Slee v. Bloom, 19 Johns. 456; Wood v. Dummer, 3 Mason, 308; Mann v. Pentz, 3 N. Y. 422; Payne v. Bullard, 23 Miss. 90. This is deemed to consist of three funds: 1. Money which has been subscribed and paid in. 2. Money thus subscribed but not paid in. Slee v. Bloom, 19 Johns. 459; Briggs v. Penniman, 8 Cow. 386; Ward v. Griswoldville Man'fg. Co., 16 Conn. 597; Mann v. Pentz, 3 N. Y. 422; Allen v. Montgomery R. Co., 11 Ala. 437; Spear v. Grant, 16 Mass. 9; Hightower v. Thornton, 8 Ga. 486; Bassett v. St. Albans Hotel Co., 47 Vt. 314; Henry v. Vermillion, etc. R. Co., 17 Ohio 187; Payne v. Bullard, 23 Miss. 90: Sanger v. Upton, 91 U. S. 60. 3. Money thus subscribed, but afterwards improperly divided among the members, leaving the debts of the corporation unpaid. Wood v. Dummer, 3 Mason 308; Curran v. Arkansas, 15 How. 304; Reid v. Eatonton Man. Co., 40 Ga. 98, 104; Lewis v. Robertson, 13 Smed. & M. 558. Stated in another way, the capital stock of a corporation, in the eye of an American court of equity, is the stake or pledge upon which the company obtains credit. If any member has not paid his share of it into the common treasury, he is deemed to hold so much of a fund in his pocket, upon which the creditors

of the concern have an equitable charge or lien, and a court of equity will lay hold of him and compel him to surrender up this fund for the benefit of such creditors. Adler v. Milwaukee Patent Brick Co., 13 Wis. 60.

In the view of the American courts, whoever subscribes to an unconditional agreement to take shares becomes liable to pay for them, subject to the conditions named in the subscription paper, and to those imposed by the charter or by the general law. Hartford and New Haven R. Co. v. Kennedy, 12 Conn. 499; Sagary v. Dubois, 3 Sands. Ch. 466; Union Turnpike o. v. Jenkins, 1 Caines,380; Goshen Turnpike Co. v. Hurtin, 9 Johns. 217; Duchess Cotton Man. Co. v Davis, 14 Johns. 237; Spear v. Crawford, 14 Wend. 20; Highland Turnpike Co. v. McKean, 11 Johns. 98; Strong v. Wheaton, 38 Barb. 616; Burr. v. Wilcox, 22 N. Y. 557; Pickering v. Templeton, 2 Mo. App. 424; Beene v. Cahawba, etc. R. Co., 3 Ala. 660; Upton v. Tribilcock; 91 U. S. 47; Brigham v. Mead, 10 Allen, 245; Buffalo, etc. R Co. v. Dudley, 14 N. Y. 336; Seymour v. Sturgess, 26 N. Y. 134; Dayton v. Borst, 31 N. Y. 435; Rensellaer, etc. Co. v. Barton, 16 N. Y. 457; Lake Ontario, etc. Co. v. Mason, 16 N. Y. 451; Hartford, etc. R. Co. v. Croswell, 5 Hill 383; Northern R. Co. v. Miller, 10 Barb. 260; Kennebeck, etc. R. Co. v. Palmer, 34 Me 366; Connecticut, etc. R. Co. v. Bailey, 24 Vt. 465; Foy v. Lexington R, Co. 2 Metc. (Ky.) 314; Klein v. Alton, etc. R. Co., 13 Ill. 514; Barret v. Alton, etc. R. Co., 13 Ill. 504. Carrying out the doctrine first stated, if the corporation becomes insolvent and its social assets exhausted before a member has paid for his shares, a court of equity will interpose and compel him to make such payment for the benefit of creditors. Unless he has paid, he must pay; and an American court will entertain a bill for discovery to compel the corporation or its members to disclose whether they have paid or not, (Miers v. Zanesville Co., 11 Ohio 273; Middletown Bank v. Russ, 3 Conn. 135; Bogardus v. Rosendale Man. Co., 7 N. Y. 147), and will put aside and discharge all sham devices and secret agreements not to pay, or not to pay in full, or to pay in something other than money or money's worth. Mann v. Cooke. 20 Conn. 179, 187; Robinson v. Pittsburg, etc. R. Co., 32 Pa. St. 334; Graff v. Pittsburg,

etc. R. Co., 31 Pa. St. 489; New Albany, etc. R. Co. v. Fields, 10 Ind. 187; New Albany, etc. R. Co. v. Slaughter, 10 Ind. 218; Downie v. White, 12 Wis. 176; Blodgett v. Morrill, 20 Vt. 509; Nathan v. Whitlock, 9 Paige, 152; Noble v. Callender, 20 Ohio St. 199; Henry v. Vermillion, etc. R. ('o., 17 Ohio 187; Haviland v. C'hace, 39 Barb. 283.

In the recent English books there is no distinct trace of such a doctrine as that the capital stock of a trust fund a corporation is for its creditors. But on the other hand the primary object of the English windof 1848 was declared by ing-up act Sir John Romilly, himself the author of that act, not to satisfy creditors, but to produce equality among shareholders. Re Phillips, 18 Beavan, 629. This seems to have been universally conceded in subsequent cases; and even under the Companies Act of 1862, which was framed with the view of winding up companies for the benefit of creditors as well as for that of shareholders, it is obvious from expressions of the judges in winding-up proceedings that the social rights of shareholders are looked to rather than the rights of creditors. Spackman v. Evans, L. R. 3 H. L. 171.

held to this view. (Lord St. Leonards, in Spackman v. Evans, L. R. 3 H. L. 197, Lord Denman, C. J., in Cheltenham, etc., R. Co. v. Daniel, 2 Q. B. 281; Taylor v. Hughes, 2 Jones & Lat. (Irish Ch.) 24; Bargate v. Shortridge, 5 H. L. Cas. 297; Henderson v. Royal British Bank, 7 El. & Bl. 356; Oakes v. Turquand, L. R. 2 H. L. 325), yet the House of Lords and the English Lords Justices of Appeal have lately settled down upon the doctrine that the rights of the creditor against shareholders exist only in the right of the company; that they can in general only claim to be paid out of the assets of the company, which assets are limited to what the company had a right to bring into the assets, (Smith's Case, L. R. 2 Ch. 604; Directors v. Kisch, L. R. 2 H. L. 99; Waterhouse v. Jamieson, L. R. 2 H. L. Sc. 29; Carling's Case, 1 Ch. Div. 115); and that the official liquidator, who corresponds to a receiver or assignee in this country, can enforce the rights of the creditors against shareholders only in the right of the company. Waterhouse v. Jamieson, L. R. 2 H. L. Sc. 29; ex parte Currie, 32 L. J. (Ch); s. c., 3 De G. J. & S. 367; 7 L. T. (N. S ) 486; Carling's Case, 1 Ch. Div, 115; Burkinshaw v. Nicholls, 26 W. R. 821, House of Lords, 1878. If, then, the shareholders, in organizing a company, have made such a contract touching the payment or non-payment of shares as would estop the company, while a going concern, from maintaining a suit for calls against a shareholder, the official liquidator in a winding-up proceeding after insolvency will be equally estopped from putting the shareholder on the list of contributories. Carling's Case, 1 Ch. Div. 115. This doctrine certainly sounds well in the abstract, but the interest centers in the application of it. A lot of rogues can put their heads together and agree to organize a company, and agree that the shares shall be deemed and treated as paid up, although nothing, in fact, is to be paid, and that the company is to be registered in the public registry of joint stock companies as a company whose shares have been fully paid. This, in the opinion of the English equity judges, makes the shares paid, so that when the bubble bursts the official liquidator is powerless to compel payment to the creditors. Carling's Case, supra. The reasoning upon which those judges proceed is this: Such a contract can not be

modeled: it is either valid in toto, or void in toto. If it is valid, the shareholders can not be put upon the list of contributories, because their shares are paid up; if it is void, they can not be put upon the list of contributories, because they have not agreed to take any shares except paid-up shares. Ex parte Curry, 32 L. J. (Ch.) 57: s. c. 3 De G. J. & S. 367; 7 L. T. (N. S.) 486; Burkinshaw v. Nicholls, 26 W. R, 821, H. of L. 1878.

It is obvious that, in such a case, an American court would treat the shareholders as fraudulently withholding from the assets of the company its capital stock, and would compel them to disgorge this trust fund for the benefit of creditors; in other words, it would compel them to make good the registered lie which they had published to the world, by paying for shares for which they had never paid. But, in the view of the English courts, the creditor's remedy melts into thin air. It is, indeed, a breach of trust for the directors to issue paid-up shares, which have not, in fact, been paid, and the person receiving them with the knowledge that they have not been paid up, is a participator in the wrong. But they say that he can not be capriciously punished by being compelled to do what he has not agreed to do, and that he has falsely declared that he has done--pay for shares on which he has paid nothing. It seems that the company, or its representative, can proceed again m and recover the shares, or whatever damage the company has sustained through the perpetration of the wrong. The effect of such an act, in this view, is not to make the sharetaker liable ex contractu for the nominal value of the shares, but to make him liable ex delicto for their real value. Carling's Case, 1 Ch. Div. 115. This abominable doctrine has lately been adopted by the Supreme Court of Canada, some of the judges dissenting, (McCracken v. McIntyre, 1 Duval (Canada) 479), and a respectable court nearer to us held, presumably out of deference to the English cases, which were cited to it, that bonus shares, issued as having been paid up to the extent of 60 cents on the dollar, no payment, in fact, having been made, are, in an action by creditors, against the holders of them, to be deemed to have been paid up to that extent. Skrainka v. The Stockholders, MS., U S. Circuit Court, Eastern District of Mo., 1878. Opinion by

TION OF MISSOURI STATUTE. UNION MUTUAL LIFE INS CO. v. LEWIS. Supreme Court of the United States, October Term, 1878.

The Missouri statute, as to public administration, (1 W. S. 122), construed and held not to authorize a suit by a public administrator in Missouri against a foreign corporation doing business there, upon a contract not made or to be executed in that State, with a citizen of another State, who neither resided, nor died, nor left any estate in Missouri.

In error to the Circuit Court of the United States for the Eastern District of Missouri. E. W. Pattison for plaintiff in error; W. S. Bodley for defendant in error.

Mr. JUSTICE HARLAN delivered the opinion of the court:

This action was commenced in the Circuit Court of St. Louis county. Mo., by the defendant in error as public administrator of that county, upon a insurance dated policy of July 30, 1873, whereby the Union Mutual Life Insurance

Company of Maine,

plaintiff in error, agreed

to insure the life of William S. Berton, "of Milwaukee.county of Milwaukee, State of Wisconsin," in the sum of $5,000, payable three months after due proof of death, to his executors, administrators, or assigns. The case was removed for trial into the Circuit Court of the United States for the Eastern District of Missouri, where a verdict and judgment were rendered against the company. A new trial and motion in arrest of judgment having both been denied, the present writ of error is prosecuted by the company.

A preliminary question is presented as to the right of the defendant in error, as public administrator of St. Louis county, Missouri, to maintain any action whatever upon the policy sued on. His authority in the premises is claimed to exist under a Missouri statute of 1868, which was in force when this action was instituted. That statute makes it "the duty of the public administrator to take into his charge and custody the estates of all deceased persons in his county, in the following instances: First, when a stranger dies intestate in the county, without relatives, or dies leaving a will, and the executor named is absent, or fails to qualify; Second, when persons die intestate, without any known heirs; Third, when persons unknown die, or are found dead, in the county; Fourth, when money, property, papers, or other estate are left in a situation exposed to loss or damage, and no other person administers on the same; Fifth, when