'122
FEDERAL REPORTER.
them. The statute of the state ofIDinois (section 26, c. 32, Rev. St. ID.,) which provides that foreign corporations shall be subject toa11 the liabilities, restrictions, and duties that are or may be imposed upon domestic corporations, I do not think helps the complainant in this case, as it has nothing to do with the question of jurisdiction, or of the tribunal in which suit shall be brought. It simply makes foreign corporations subject to the same liabilities as home corporations. It does not reach the question as to what tribunal you are to go into. The bill charges defendant with the infringement of a patent owned by complainant, and it was stated on argument as to the sufficiency of this plea that defendant has a factory in this district, and manufactures the infringing machines here, and nowhere else, as a reason why defendant may be sued here. It is very plain that if an individual, an inhabitant of another state, owned and carried on this factory, conducting its business through his agents and employes, he could not be sued in this district under the present law; and I see no reason why the same rule is not applicable to corporations of other i'ltates. In other words, it seems to me, a corporation can, bv state comity, carryon business in a state outside of that by which it was created without becoming an inhabitaut of such outside state. The plea in each case is held suffioient.
METROPOUTAN NAT. BANE: 'II. ST. LoUIS DISPATCH
Co; et al.
(Oircuit Court. E. D. Mi8aotlri, E. D. November 21, 1888.)
1.
CHATTEL MORTGAGR-GOOD-WILIr-FORECLOSURE.
A mortgage ofthe "machinery. type, presses, cases, furniture, paper, forms, and tools" of a nempaper company, together with the" good-will" of its business. cannot be foreclosed as to the good-will after all the tangible property covered by the mortgage has been alienated, worn out, or destroyed, and the corporation has become consolidated with another newspaper corpuration.
2.
SAME-GOOD-WILIr-SALE OF SAME.
The good-will of a business is property that may be mortgaged or sold in connection with the busincss; but it cannot be sold, by judicial decree or otherwise. unless it be in connegtion with a sale of the business on which it depends, and of which it is a mere incident.
8.
SAME-LIEN-CONSOLIDATION.
Where a newspaper, whose good-will has been mortgaged, is consolidated with another paper, and the name of the paper is changed, and a new corporation is formed to publish it, the lien, of the mortgage does not attach to the good-will of the consolidated paper, though the new corporation occupied for some years the old place of business, and paid interest for 10 months on the mortgage debt.
4.
SAME-AsSOCIATED PRESS-MEMBERSIIIP.
Inasmuch as it appeared that membership in the Western Associated Presti can only be sold to publishers of newspapers, and that a transfer of such membership would not entitle the transferee to the privileges of a member unless voluntarily accorded him by the association, held, that a bill would not be entertained to foreclose a mortgage on a certificate of membership or share of stock in such association unless the association was made a party defendant.
In Equity.
On demurrer.
METROPOLITAN NAT. BANK
V.
ST. LOUIS DISPATCH CO.
72a .
Bill by the Metropolitan National Bank of New York, against the St. Louis Dispatch Company, the Dispatch Publishing Company, and Henry L. Sutton, trustee, to foreclose a mortgage. John M. Dickson, for complainant. Dye:r, Lee &; EUi8 and Chm. &; C. E. Gibson, for defendants·. THAYER, J. This is a suit to foreclose a mortgage. The facts stated in the bill may be summarized as follows: On June 1, 1877, the St. Louis Dispatch Compa.ny was engaged in publishing a daily newspaper called the" St. Louis Dispatch," and on that day, being in need ofmoney, it conveyed its "machinery, type, presses, cases, furniture, paper, forms, and tools, together with the go'od-will of the St. Louis Dispatch Company, and its franchises of every kind and description, rights, privileges, and property, including its interest in the Western Associated Press, and any and all shares by it owned in the Western Associated Press," to Henry L. Sutton, as trustee, to secure the payment of its note for &15,000, that day executed in favor of F. J. Bowman, and made payable two and one-. half years after date, with interest at 9 per cent. per annum. At the same time it assigned and delivered to Sutton the certificate for one share of stock which it owned in the Western Associated Press. Subsequently the same property, together with much other property, was conveyed to a trustee in another and second mortgage or deed of trust, to secure a further loan made to the St; Louis Dispatch Company. Under this seeond mortgage a foreclosure sale took place about a year prior to the maturity of the first mortgage. The sale so made was made subject to the lien of the first mortgage. The purchaser under the second mortgage took possession of a.ll of the property covered by the first and second mortgages then i:n e88e, and immediately consolidated the St. Louis Dispatch with another evening paper, called the "Evening Post." A new corporation was formed under the name of the "Dispatch Publishing Company," to continue the publication of the consolidated paper, which was thereafter called "The Post-Diflpatch." For some years after the consolidation, .the Post-Di"patch was published in the same building formerly occupied by the St. Louis Dispatch Company. The new corporation also enjoyed for some time all the privileges which accrued from the old company's mem bership in the Western Associated Press, but eventually the Associated Press issued to it a certificate of membership, in lieu of that issued to the old company, although the old certificate was, and' still is, in the hands of the trustee in the first mortgage, to whom it was pledKed. The new corporation (the Dispatch Publishing Company) also paid the interest that accrued on the Bowman note for some ten months after the consolidation of the two newspapers. It refused to pay the note, however, whim the same matured on December 1, 1879. Thereupon the trustee in the first mortgage demanded of the Dispatch Publishing Companyall the property covered by the first mortgage, including the goodwillofthe St.· Loui.s Dispatch Company, but the demand was not complied with. The bill avers that at the date of such demand, to-wit, on December 1, 1879, the Dispatch Publishing Company "had alienated,
724
REPORTER.
destroyed, or gradually used up, all the machinery, type, presses,and property of a perishable nature, of the said St. Louis Dispatch Company." There are many other allegations in the bill, which is very. prolix, but the foregoing are the principal averments by which the sufficiency of the pleading must be tested. The relief prayed for is that the court will order a sale of the good-will of the business described in the mortgage of June 1, 1877, and the other property therein described, or the property that has since been substituted therefor, including the membership in the Associated Press. Complainant is now the owner of the Bowman note. 1. The first fact to be noted is that, when the first mortgage matured, all the tangible property covered by that mortgage had been worn out, or destroyed, and was no longer in the possession of the purchaser under the second mortgage. Whatever tangible property (ma" chinery, type, presses, etc.) ",as then in the hands of Dispatch Publishing Company, had been acquired by it subsequent to the 'purchase under the second mortgage, and the propertyso acquired was not embraced by the terms of the first mortgage. 'fhe bill shows that aUhe present time there is no property in the hands ofthe defendants on which unless it is gooda decree foreclosing the first mortgage can will of the St. Louis Dispatch Company, and the rnembershipin the Afiaociated Press. Now, while the of a business is property that may be sold or mortgaged, yet it is property of a very pecullar. and ceptional character. It is intangible property which, in things, can have no existence apart from a of fiome, sortthat hafi been established and carried .on at a partiCUlar place; .andit be sold by judicial decree or otherwise unless it be in connection with a of the business on which it depends. Story,Partn. § V. Quiddingron,28 Beav. 529; 3 Pom. Eq. Jur. §1355, and notl;lsjSmith, Mere. Law, 188, and cases cited. As the bill does notsh,ow that there is any established business (or any tangible property for thatII:\atter) which the court can order to be sold for the satisfaction OfCOll,lplainant's mortgage, it seems clear that it cannot decree a sale ofthegood-wiij in question. .. . 2. It is claimed by complainant's counsel that the lien of the gage of June 1, 1877, extends to the entire busin.ess andpropertyoft4e Dispatch Publishing Company, including its good-will, and that the court should so decree, and enter an order of sale accordingly. This tion is based on the ground that the Dispatch Publishing Com,pany .ucquired the place of business of the St. Louis Dispatch Compa,ny,and certain property, with the good-will attaqhed thereto, subject to the lien of the first mortgage, and that it subsequently paid interest for 10 on the note secured by the first mortgage, and eventually consolidateq the property and good-will so acquired ",itp the good-will and woperty, of another newsp:tper. I regard this position as i rhe acts referred to, neither singly nor collectively ,()perated to extend the1119.rtgage lien over property not originally covered· by t)le mortgn.ge.. If I+lfY of:the acts above recited amounted to an assuroptiopof the the purchaser.under the. seconll .IUor,tgage) tQ whid), IlO
METROPOLITAN NAT. BANK V. ST. LOUIS DISPATCH CO.
725
pressed,) the remedy is at law on such promise, and not by bill to foreclose the mortgage. So far as the tangible property covered by the first mortgage is concerned, (that is to say, machinery, type, presses, etc.,) the bill does not show that it was wrongfully commingled with other after-acquired property, either by the morgagor or purchaser under the second mortgage, so as to become undistinguishable. The allegation is that it was alienated, or gradually worn out by use, before the first mortgage matured. There is no occasion, therefore, to invoke the rule that governs in case of a wrongful admixture of property. The bill does show that the St. Louis Dispatch was consolidated with the Evening Post seven and one-half years before this bill was filed, and that the good-will of the former paper was either destroyed or was converted to the use of the new company. But it by no means follows that the effect of such act was to make the first mortgage a lien on all the property thereafteraequired and now owned by the new concern, the Dispatch Publishing. Company. If the consolidation was wrongful in so far as it affected thegood-will of the St.- Louis Dispatch Company, (as to which no opinion is expressed,) it could only have the effect of rendering the wrong7doe).' li-ablefor the value of the good-will at the time ofits. destruction or con. version. Assuming that the purchaser under the second mortgage wrongfully appropriated or destroyed the good-will of the St. Louis Dispatch. Company, and that a remedy once existed for such wrong, th.e question' wouldthen.arise,,,whetherthe remedy for th.ewrong is. at law or in eqo:' uity. It is not necessary to express an opinion on the latter. question, : for, if a bill to obtain a decree against the Dispatch Publishing Company for the value of the good-will in question could at one time have been maintained. based on the ground that it had wrongfully appropriated or destroyed the good-will, it seems clear that the right to maintain such bill is now barred by laches, inasmuch as more than seven years had lapsed after the wrong was committed before the bill was filed. An action at law to recover the value of personal property wrongfully converted) -or destroyed must be brought within five years, under the limitation act in this state; and, by analogy with the rule which,prevails atlaw,a riro,c6leding in equity, based on similar grounds, should be held barred ;by the same period. even if it is possible to maintain such a proceeding'in .equity. . 3. Sufficient reasons also exist in my opinion for refusing to order a sale of the shareoi' stock or membership in the Western Associated Press, which,Was to the Bowman note.. It is evident tI::lat the stock in questi0n is not property of an ordinarycpa,racter; such as: may be transferred at will by the owner. The bill shows that it is only vendible to persons or corporations who aieengaged iIi publishing a newspaper or,other.periodical,arid that no other persons or corporations are appears that .eligible to membership in the association. It the stock issued by the association is of the nature oia c,,!rtificate 6f membership therein, and that it merely entitles the holder, if he happens to the proprietor 'of'a newspaper,to receive intelligence which'the- asso.ei:ation iI!- eol1{lcting for the benefit: of its.:members. ,; It .is..-v.ery,:
726
FEDERAl, REPORTER.
doubtful whether stock of that description can be pledged or mortgaged by the holder as security for a' debt, without the consent of the corporation by whom it is issued. From the statements contained in the bill with respect to the character and functions of the organization known as the "Western Associated Press," it appears to me clear that a purchaser .at a foreclosure saJe of the share or stock or membership now in question, even if the court should order such a sale, would not acquire the privileges of membership in the association, unless it should see fit to accord him such privileges. Consent on the part of the corporation to the admission of a member appears to be essential to constitute a person a member. But whether the St. Louis Dispatch Company could or could not of its own motion pledge its membership to secure the payment of a dtlbt,it is obvious that the Associated Press is interested in the determination of that, question, especially in view of the fact that it has long since admitted another corporation to membership in place of the St. Louis Dispatch Company, and the question ought not to be determined in a proceeding like the present, to which the association is not a party. Neither would it be proper to order a sale of the interest of the pledgeor in the certificate of stock in question, unless it appears that some valuable property right or privilege would pass by such sale, which the association would be bound to recognize. From any point of view that may be taken, no relief, in my opinion, can be granted consistently with the averments of the amended bill, and the demurrer thereto is accordingly sustained.
POWELl, 'l1. OREGONIAN
Ry. Co.
(Oircuit Oourt, D. Oregon.
December 8, 1888.)
A corporation, being tbe lesse,o of property, permitted waste thereon. for which the lessor. in. an action for damages. recovered a Judgment for $fi 300, and. the corporation f being insolvent, brought suit against a stockholder thereof. on whose stock more than that amount was then unpaid, to enforce the payment of the judgment. Held that. whether the original claim of the plaintiff for damages was or was not an "indebtedness" of the corporation within the scope of section 3. art. 11. of the constitution of the state. which declare" that a stockholder of a corporation "shalI be liable for the indebted· ness" of the same to the amount unpaid on his stock. the judgment obtained thereon Is such an "indebterlness;" and any stockholder of the corporation is liable therefor to the plaintiff therein to the amount unpaid on his stock. (Syllabu8 by the Oourt.)
CoRPORATTONS-RTOCKHOLDERS-LIABILITIES-LANDLORD· AND TENANT-WASTB.
In Equity. On demurrer to bill. . Suit to enforce the debt of a corporation against a stockholder. A. L. Prazer, for plaintiff. Earl C. Bronaugh, for defendant.
DEADY,·J. This suit is brought by the plaintiff, a citizen of Oregon, against the defendant, a British corporation having its principal office in
POWjj:i-L V. OREGONIAN RY. CO.
727
Dundee, Scotland, to enforce the payment of a judgment heretofore obtained by him against the Dayton, Sheridan & Grand Round Railway Company, to-wit, on April 8, 1887, for the sum of $5,300. It is alleged in the bill that the Dayton, Sheridan & Grand Round Railway Company is a corporation formed under the laws of Oregon, with a capital stock of 2,000 shares,. of the par value of $100 each; that Joseph Gaston,under the name of J. Gaston & Co., subscribed 1,000 shares of such stock, while all the other subscriptions to the same only amounted to 501 shares, which were paid in full; that in 1880 Gaston sold and transferred his stock, without having paid anything thereon, to Ellis G. Hughes, who on February 27, 1884, sold and transferred the same to the defendant, who now is, and ever since has been, the owner of the same; that no part of Gaston's subscription was ever paid-by anyone, except the.sum of $61,000, paid by the defendant, in pursuance of a decree given against it by the supreme court of the state, on January 14, 1884, in the suit of Branson v. Railway Co., [2 Pac. Rep. 86,] and that there is still due and unpaid on the same the sum of $39,000. That on January 29, 1887, the plaintiff commenced an action in the circuit court of the state for the county of Yamhill, against the Dayton, Sheridan & Grand Round Railway Company, to tecover damages for an injury to plaintiff's property, while leased to said company, and obtained a judgment therein for the sum of$5,300, and at the same time served a notice on the defendant herein, as the successor in. iqterest of the D!Lyton, Sheridan & Grand Round Railway Company, to. defend the said action, an<l that the plaintiff would look to the defendant for the payment of any judgment he might recover therein; that the defendant, by its attorneys, did make a defense to said action, and on September 12,1887, caused an appeal to be taken from the judgment th!lrein to the supreme court, where the same was affirmed, with costs, amounting to 377.20, [16 Pac. Rep. 863;] that since July 1, 1883. the Dayton, Sheridan & Grand Round .Railway Company has been and now is wnolly insolvent, and has no property within the state subject to execution; and that the defendant, being the owner, as aforesaid, of the stock of said company, on .which the sum of $39,000 is due and unpaid, is liable to the plaintiff, as a creditor of the company, for the amount of said judgment against the same. The prayer of the bill is that the defendant be compelled to pay into court on the;unpaid stock of the Dayton, Sheridan & Grand Round Railway Company a sum sufficient to satisfy its indebtedness to the plaintiff, or that the latter have a decree against the defendant for the amount of the judgment against the company, with interest. The defendant demurs to the bill, for that the plaintiff, on the case stated in the bill, is not entitled to any relief against it.. On the argument the only point made in support of the demurrer was that. the claim of the plaintiff, having arisen out of a tort, is not such an "indebtedness" as a stockholder is liable for. The constitution of Oregon (article 11, § 2) provides that" corporationa mllY be formed under generallawsj" and (Id. § 3) enacts:
728
"The stockholders.of all corporations and joint-stock companies shall be ble for the indebtedness of said corporation to the amount of their stock subscribed and unpaid, and no more." Section 14 of the corpora'tion act (Comp. 1887, § 3230) provides: .. All sales of stock, whether voluntary or otherwise, transfer to the chaser all rigbts of the original holder or person from whom the same iR purchased. and subject such purchaser to the payment of any unpaid balance due or to become due on such stock; but, if sale be voluntary, the seller is still liable to existing creditors for the amount of such balance, unless the same be duly paid by such purchaser." At common law, the members or stockholders of a corporation are not individually liable for the debts of the same, (Thomp. Liab. Stockh. §§ 1, 4;) but the capital stock of a corporation is considered a trust fund for the payment of its debts (ld. § 10;) and ar;a unpaid subscription to the stock of a corporation is a part of such capital stock (Id. § 11.) . From this it appears that the rule prescribed in the constitution of the 'state, concerning the liahility of stockholders, is neither more nor less than that of the coromonlaw. Under either the stockholder is liablefor the indebtedness of the corporation to the extent of his unpaid tion or stock; "and no more." . Several cases have been cited on the argument of counsel for the reparties, but none of them are altogether in point. ' .. In Foundery v. Hovey, 21 Pick. 417, the statute made the stockholder 'liable for the existing debts of the corporation, if the latter failed to pub'1ish annually the amount paid in of its capital stock and existing debts; and the question in the case was whether a claim for unliquidated damages, arisingout of a breach of a contract to manufacture certain articles, was a "debt" within the statute. And although the statute was in effect a penal one, the court held that "all such claims Jot damages were tended to be indilded in the term 'debts.'" Id. 454, 455. In Carver v. jIa'l1ufacturing Co., 2 Story, 432, Ii statute that made a. 'member of any manufacturing corporation individually liable for all "debts contracted" during his membership was held to be remedial in its character, and the phrase "debt contracted," as used therein, to in.elude a claim Jor unliquidated damages growing out of a tort,-the in: fringement of a patent. " . . But in both these cases the question only arose incidentally on the ex: elusion on account of interest of a witness, and in· the former one it appears to have been decided without any consideration. In HaynCfj v. Brown, 36N. H. 545, under a statute which made tbe 'stockholders ina corporation liable for" aU debts and contracts" thereof ,'Yhileit on1ittecl to file for record Ii. certificate of the amount of its capi"'tal stock, "it was held that the right to recover against the stockholder : was notliniited to liquidated claims, but included an open account -for
.
' .
37 N. J. Law, 282, it was held that under a statute giving an action in favor of a "creditor " against the heirs and InsurariceC6.
POWELL V. OREGONIAN RY. CO.
729
devisees of a "de'btor," the former might maintain an action against the heir for unliquidated damages arising out of a breach of covenant. A statute of Missouri provides that every corporation shall give notice annually in a newspaper "of all the existing debts of the corporation," and a failure to do so makes each stockholder liable for all the debts of the company then existing, and for all that shall be contracted before such notice shall be given. In Cable v. McCune, 26 Mo. 371, it was held, in a suit brought under the statute, against a stockholder, to enforce the payment of a judgment obtained against the corporation for damages caused by its negligence in docking a steam-boat, that the stockholder was not liable. The ground of the decision is that the statute is penal, and therefore the word "debt" ought to be taken in"that limited and definite sense to which long-established usage has restricted itj" and that the use of the word "contracted," with reference to the "debt" which a stockholder may become liable to pay, indicates clearly that it was the intention of the legislature to limit such liability to debts arisinll; out of contract and not a wrong. A statute of New York made each stockholder of the Buffalo Hydraulic Association holden to the amount of his stock, "for the payment of debts contracted by the corporation j" and any person having any demand against said corporation "might sue any stockholder, and recover the same, provided no stockholder should be obliged to pay more in the whole tha11 the amount of his stock at the time the debt accrued. In Heacock v. Sherman, 14 Wend. 58, it was held, in an action against a stockholder of this corporation, that the term "debt," itS used in this act, was limited to claims arising out of contract, and did 110t include one for damages, arising out of the wrong of the corporation. It was admitted that the word "demand," standing by itself, was comprehensive enough to include the claim. But it was said that the liability of the stockholder was first fixed and limited to the "debts" of the corporation, and the word "demand" was not used for the purpose of enlarging this liability, but in a clause only intended to further the remedy; and that the subsequent phrase, "the debt accrued;" used in limiting the amount of the stockholder's liability, clearly qualifies the enlarged sense of the and shows that it was used by the legislature "to denote word a demand arising on contract." A statute of Michigan provides that every stockholder of a corporation shall be individually liable for all labor performed for the corporation, and for all debts of the same, to an amount equal to his stock when "such debt was contracted and suit commenced thereon." In Bohn v. Brown, 27 Mich. 503, it was held, in a suit brought under this act against a stockholder in a railway corporation to enforce the payment of a judgment obtained against said corporation for damages caused by its negligence in carrying a passenger, that the stockholder was not liable, fl)r the reason that such damages are no.t a "debt" within the Dleaning.of the statute, and that the putting the claim for them into. a judgment against the corporation did not change their character in thii respect.
780
FEDERA£ REPORTER.
The statute (Comp. 1887, § 3230) does not undertake to declare or define what debts or claims a stockholder in an Oregon corporation shall be liable for; nor does it appear that the legislature, under the constitution, has the power to do so. lt is admitted by the demurrer that the defendant has been a stock. holder in the corporation against whom the judgment in question was given since February 27, 1884. Its liability as such stockholder must then depend on the proper construction of the term "indebtedness," as used in the section of the constitution above quoted. The provision in the con8titutionon the liability of stockholders is neither remedial nor penal. lt gives no new right to the creditor, nor does it impose any extraordinary liability or penalty on the stockholder. lt is therefore not to be construed liberally or loosely with a view of making the remedy adequate to the redress of some pre-existing hardship or wrong, nor strictly because ofits penal character. According to Worcester, "indebtedness" J;lleans "the state of being indebted." The indebtedness of a corporation is, then, the sum of its debts. And so it will be convenient to consider the constitutional pro"'ision as if it read, "shall be liable for the debts of said corporation." "The legal acceptation of debt isa 'sum of money due by certain and express agreement; as by a bond for a determinate sum; a bill or note; a special bargain; or a rent reserved on a lease; where the quantity is fixed and specified, and does not depend on any subsequent valuation to settle it." 3 Bl. Comm. 154. And where the agreement to pay is implied by law, the sum to be paid is also it debt. Blackstone (bk. 3, p. 158) says: "Every person is bound and hath virtually agreed to pay such particular sums of money aaare charged on him by the sentence, or assessed by the interpretation of the law. * * * Whatever, therefore, the laws order anyone to pay, that becomes instantly a debt, which he hath beforehand contracted to discharge." This includes a judgment for a particular sum of money. In GTay v. Bennett, 3 Mete. 526, it is said that "the word 'debt' is of large import, including not only debts of record, or and debts by specialty, but also obligations arising under simple contract, to a very wide extent; and in its popular sense includes all that is due to a man under any form of obligation or promise." In Crouch v. Gridley, 6 Hill, it was held that a bankruptcy from all the "debts" owed by the bankrupt at the filing of his petition, did not discharge him from a claim for damages for a tortwhich was in suit at the filing of the petition, but had not then ripened into judgment. In Kellogg v. Schuyler, 2 Denio, 73, it was held that a claim for damages fol" a trespass was 110t a "debt" within the bankrupt act, and .therefore was not affected by the bankrupt's discharge, although the claim was in suit at the time, and a verdict had been found for the plaintiff. In disposing of the· case, the court, in speaking of the claim, said: "untU judgment is rendered there is no debt which is reached by the discharge." In Zim'm,er v. SchleehauJ, 115 Mass. 52, it was held that a claim for
.731
damages for slander and malicious prosecution was !lot a "debt" or "liability contracted" by the bankrupt, and was therefore not affected by a discharge of the bankrupt under the act of 1867. The claim for damages was in suit when the proceeding in bankruptcy was commenced, and there had been a verdict for the plaintiff on which a judgment was given thereafter, but before the discharge. In delivering the opinion of the court Chief Justice GRAY said: "A claim for damages in an action of tort does not become a debt by verdict before judgment." See, also, as to what is a debt, Burrill's Law Dict.; Rap. & L. Law Dict.; Whart. Leg. Max. The nature of the plaintiff's property and the damage to it, for which the judgment was obtained, is not stated in the bill; but it was understood on the argument that the property was a warehouse at Dayton, on the Yamhill river, which the lessee negligently permitted to be washed away during a season of high water. In other words, the claim was unliquidated damages, alleged to have been caused by a permissive waste. Such a claim is not a "debt" in any ordinary sense of the word. Nor do I see any good reason why the term "indebtedness," as used in the constitution, with reference to corporations, should be construed to include such a claim. But it is not necessary now to decide that question, and it may be left to the determination of the supreme court of the state, whose office it is to expound the constitution thereof. When this claim for unliquidated damages became, by the action of the parties under the direction and the limitation of the law, a judgment against the corporation for a definite sum of money, it became, in my opinion, an "indebtedness" Of such corporation; and any person then or since, being a stockholder thereof, at once became liable to the plaintiff for such debt to the amount unpaid on his stock. A claim for unliquidated damages may become a "debt" against a corporation otherwise than by judgment. For instance, the corporation may have compromised with the plaintiff, and given him its note for a portion of this claim in satisfaction thereof, or, being satisfied of the justice of the claim, or the impolicy of contesting it, may have given its note for a full amount thereof. In this way the claim would become a "debt" of the corporation, within the strictest definition of the term, and the liability of the stockholder would commence. The effect of allowing the plaintiff to take a judgment on this claim, or of his obtaining one notwithstanding a defense thereto by the corporation, is the same, in this respect, as a voluntary liquidation thereof. What was once a mere claim for an undetermined amount, becomes in either case a "debt,"-a legal obligation to pay a definite sum of money. Assuming that there is neither fraud nor collusion in the premises, whatever indebtedness a corporation may lawfully contract or incur, the stockholder, to the amount of his stock, is bound to pay. Such is the circumstances, raises in favor of ohligation which the law, under the creditor of the c0rporation and against a stockholder thereof. On the facts stated in the bill the plaintiff is entitled to the relief sought. The demurrer is overruled.
732
.FEDERAL REPORTER.
In arriving at this conclusion no consideration has been given to the allegations in the bill, concerning the notice to the defendant of the action llgainst the Dayton, Sheridan & Grand Round Railway Company t and the defense made to the same by its attorneys.
BOTTOMLY '/;.
SPENCER et al, November 28, 1888.)
«(lz"rc'Uit (Jourt, 8. 1.
n. illinois.
DOWER.,...RELEASE-AcKNOWLEDQMENT.
A sealed agreement e'f1tered into between a husband and wife in 1868, whereby the: latter, for a valuable consideration, agreed to release alI claim which she then hador might thereafter have.Jn her husband's property, but which was not acknowledged before a proper officer, as required by statute in Illinois, is not effectual as a release of dower in lands in that state, as thelaw then stood, Neither will such agreement bar dower by "equitable jointure," as sucb jointure must be made before marriage. OF CONSIDERATION.
ill. SAME-EQUITABLE JOINTURE.
SAME-VOID
The husband having deserted his wife and children, without showing sufficient cause therefor, 35 years before his death, the wife will not be compelIed to return the consideratIOn (less than $500) received by her for her agreement, before dower is assigned.
In Equity. Bill for dower. . Bill filed by Judith Bottomlyagainst Sarah Raymond Spencer and others. W. J. Fairman and Sander8 &; Bower8, for cOlllplainant. Rinaker &; Rinaker, for defendants. _.AI.LEN; J. On the 27th day of November, 1884, the complainant filed< her bill in this court for dower; alleging her residence to be at Bradford, in the county of York, England; and that on the 25th day of November, 1832, at that place, she was lawfully married to Miles Bottomly, who lived with her as husband until the year 1845, when he left England for the United States, and settled in Macoupin county, Ill., where he continued to reside until his death, which occurred the 5th day of August, 1880; that the said Miles Bottomly, after reaching arid settling in Macoupin county, Ill., assumed, and alterwards up to his death was known by the name of William SpE'ncer; that he was at the time of his death seized of valuable real estate in this district, (describing it,) and that he died testate. The personal representatives and legatees under thewill are made parties defendant, and the bill prays for the assignment ofdower in the described real estate to complainant, and for other relief. The separate answer of Sarah Raymond Spencer is filed, in which the respondent dEtnies all the material allegations in the bill, and insists that she was lawfully married to William Spencer in Macoupin county, Ill., on the 6th day of February, 1855, and lived with him as his lawful.