by the answers and disproved by the testimony, we think it would be evident that the bill should be dismissed, but it is contended on behalf . of the complainants that the proof does still show facts upon which they are entitled to relief, and upon which the essential averments of the bill can be maintained·. In the minute-book of the meetings of the stockholders of the company the following appears: "PAWTUCKET, April 16th, 1868. "The stockholders met according .to agreement. Present: J. Y. Smith, John R. Brockett, W. F. Saylel'l, It. A. 'fhompson, A. Chambers, J. O. Starkweatfier; and the following gentlemen were duly represented by H. A. Thompson', viz.: H. Woods, Jr., Geo.,S.. Brown, Joseph Reynolds. "Resolved, thattbe capital stoflk of the company be further .increased to an amonnt not exceeding one hundred. tho.llsa,nQ, dollars, and the are to issue new sbarEls for that amollnt to th6,present stockpolders at the rate of $5Q per .the stockholders shall consent to such Resolved, that the directtii's be fully empowered to carry into effect the resolutions passed at the meeting of stockholders held March 20th at s.!Jch time, Bnd in such manner, <ISmay seem most expedient for the interests. ot. It. (This pad,reference to selling the real estate' and bUildings in Pawtuckl't, and procuring'a ltiss expensive property elsewhere.) "Resolved, tllat', whereas the affairs of ,this company have reached a point When it is absoliltely neeessar:y that'the sum of $50,000 shall be raised by sale of our stoclt, as already: proposed., the' Baltimore direetors,' are req uested to Cl;lIl the BaltiJ:nore stockholders together, to ascertain what proportion ,of proposed of stock WM) be taken by them, and the Hhode Island directors are to pursue the same course in regard to the Rhode Island stockholders. Adjourned to meet on 'fhursday, April 30th, at 10 A.M. W.F. SAYLEs. Seety. pro tem." In with this vote, Iltock to an amount $17,500 less than $100,990 offl:!-Qe. value was issued" to be disposed of to stockholders at $50 per share of$100 par value. Mr; Chapman, a Baltimore stockholder, llubsequently pledged himself would get the Baltimore stockboloers to take their pro rata proportion, and certificates were made out dated October 14, 1868, and sent to him, as follows: George S. Brown, 60 shares; Henry A. ';I.'l)oililpsonl 30; Hiram Woods, Jr., 30; Joseph Rey,nolds,&,5; Thomas "".Wilson,.20; Horace Love, 15; R. Norris, Jr., 10; A. A. Chapman, 245 shares. Many of these perSons refused to the certificates, and declined to be subscribers for the stock. Mr. in his testimony, says: "Some of them took it, and some did not. Mr. Brown did not takelJis; I bought hisentireinterest out in,tbEl factQry. ,MI'. Thompson and Mr. Woods to,ok their stock. ¥r. Reynolds took his. I am not positive whether Mr. Wil'sontook,his Qrnot. 1 know that l4;r.Love did not take his. and Hichard N'orris did' riot 'take his. " . appear on the stock register is entitled to but certificates were issued without previous authority, who setUed for it all witb.promissory notes Qf;the conwany;,w:l;lich he had takElTl up and .held. Arising out of the traps!tctions collUected with this vote·to increase the capital stock from fllPQ,QOf.), to :$300.,090 many difficult questions have, presented and :ij:ttle
argued at bar. In the first place, it is contended on behalf of the fendants that there never was any valid corporate act authorizing this increase of capital stock, because the meeting had not been properly called, and because a majority of the stockholders were not present or represented at the meeting which voted its issue. It is a fact which appears from the minutes that there was not a validly authorized representation of a majority of the stock., At this meeting of 16th April, 1868, assumthat Henry A. Thompson represented Allen A. Chapman's stock, which does not appear from the minutes. but probably was so becaus\il the proxy filed in the minute-book authorized Thompson to vote Chapman's stock as well as that of the other persons whom the minutes state he did represent, still there was not a majority of th.e 200 shares present, unless W. F. Sayles was authorized to represent and vote the $36,OQOof Taft stock. The testimonyisveryconYincing that Sayles"only ,authority. witbrespect.to the Taft stock was either a verbal dne or an assumed one. This stock was pleqged to Sayles,andin his testimony he referred to the written agreement of pledge as containing his authority to yoteit;, but, when .prQduced, the agreement, which ,is. da,ted 12th March, .1868, is found t()C!>utaiu no such authority. The Rhode Il'llandstll.tute (section 24)spe.ciallyenacts that the pledgeor arid not the pledgee of stoc:jr shall have tbe right to vote it. .. . , . . . . . .· .. in the ofNorth Providence on The filing oCthe July 19, 1864, ended the contractual individual liability of t.l1e stockholders under the first section pf the lawns to the debts thereafter cantracted;anqone question in this case is. whether as to thoge wh,o never took the new stock their indiv:idualliability ,was revived by the issuing of the new stock, supposing its issue to have and astowhich,no certificate was or could be filed. In construing a statute so harsbap.q ,so destructive ofthe very purposes of incorporation, it does not seem to us we should, ifavoidable, give ita construction Which would put it in the. pow,er of those ,a majority of the stock, many of them, perhaps, as was the fact in this case, themselves personally responsible by indorsemept and otherwise for the bulk of the companY'il1arge indebtedness, by voting an increase of capital by the issue of partially paid up stock to impose a ruinous burden upon stockholders whose inqividualliability had once ended. ,'I;he reasoning of the opinion ,of the court of appeals of New York in Veeder v. Mudgett, 95 N. Y. 29,5, is to us very convincmg, and the judgment of thatcourtllpon a similar statute, but under which the stockholders could only be held to an amount equal to the par value pf each one's stock, was that holders of the original stock were not liable, and that the liability rested solely upon the hplders of the new stock, 'and only to the extent of holdings of that stock. But the question still remains whether any of the stockholders are to be heldJiable on account of the lalleged increase ·of stock of this company? .' The charter oCthe File, Company provided that the capital should not exceed $500,000," to be fixed in amount by a of thec()mpany." T,he first j;ection pf the law speaks of" the Whole am.ounto( the ca,pital stock fixed and limited by the charter of the .coID.pany, or by a ,vote of
"the company in pursuance ofthe ch'arter 'or oflaw."The only reference to an is in the last of section 2 which says: "In case of increase of capital stock of said 6onlpanies, like proceedings shall be had as totha amount added andpMd iIi." It seems us, reading the terms of the statute with the strictness which all courts have held such legislation delhands, that the changing of the capita1 stock once fixed by a vote of the company must, in order to sUbject any of;the stockholders to a liability so greatly in derogation ofcommon right, be a change made by a valid corporate act. How far a stockholder would be estopped from setting up such invalidity as against a creditor who bad been misled to hisilljury in dealing with the corporation on the faith of such invalid increase is a question which cannot arise in this case. The Garretts took the bonds of the company, itlsuedin 1870, from Chapman, knowing nothing of the company, and making no inquiry, and the complainants themselves, or those they represent, were the active managers, officers, and directors of the company, and: they Were all liable iIi Rhode Island to the Garretts for this debt, ·without reference to the supposed increase of :positiol1 of innocent creditors of the comstock. 'They are not in pany, who might any possibility have been misled to their injury with regard to the stock, assets, 01' solvency of the company. The company never paid any dividends, and this third issue of stock, so far as it was takenat'all, was divided among certain of the old stockholders simply to relieve the compimy by'convertinga floating debt into stock; The company'sindebtedrte8swas'notafterwards increased, and'the bonds upon which the Garretts reoove?ed judgment were issued to take up lin:;. bilities of the company then ei-isting. So far as this case discloses, 'we see no ground upon which to found a suggestion that any innocent per'tron who has dealt with the company cO'uld be injuriously affected by :the proposed increase 'of capital. stock being held invalid for want of a. 'Valid corpora.te vbteauthorizing We think the complainants' bill must be dismissed as to the defend1l.lltsgenerally upon the folloWing grounds: 1. Because the allegations althe bill are not sustained by the proofs. 2. Bec:ause the contractual' liability of the' defendants, who are hold,Jere only of shares of the old $-200;000 of stock, was extinguished as til by the filing of the certificate On the 19th JUly, ,1864, with the'town-clerk of North Providence, where the manufactory 'was then and was not revived by the subsequent increase of :stoek,even ifv1I1id. ' , :a';Because, as the issue of stock in 1868 Was not authorized bya valid corporate v6te, it did not impose any liability underthe first section of lthodelsland' law,even upon those of the defengants who accepted ' th"fne# stock. " . 4. That therefore the'lill.bility under which thecotnplainarits were "c6mpel1abletopay the bonds'issued in 1870, held by the Garretts,was 12" 'th"epenaHiability for not filing the annual which could 'oilly be enforced iIi Rhode Island;' and ill respect to whicih these defendants !cannot'becalled'upon to' contribute. "
MILLER V. CLARK.
. special defenses pleaded on behalf of certain the ,defend,ants, :which in our opinion are good, but the view we have taken of complainants' ,case it unneCessary to, discuss them. The bill must be dismissed. ' , BOND, J., conc,urs.
(Oircuit Oourt, D. Oonnectfcut, OCtober 5, 1889.)
C., a married woman, having some $11,000 in her name In a savings bank, In aooordancewith a previously expressed intention direoted the bank teller to transfer $1,500 to each of three nieces, which he did, charging' her account with 14,500. :On her desire the bank-books be so made tbat, the money could not bedra:wn her hfeJ the teller indorsaa on the pass-books: "Only Mrs. C. has power to ·draw. , ,C. ana her nieces wrote their names in the signature book, the word "Trustee" added to that of C. by the teller. The books \Vere.giyen C., who, during'her lifel declared that she was trustee as to this money fO,r her meces. The ,'niecesllCC6Ptea the gifts in the life-time of C. ,Held a valid, gift 4tnter Vi1lO8j aDd · that, owing, to the eiltpress ,declaration of trust by C., nopessation of control over , 'the property given waB'nece8sary. . '" ' , , ,a,: EvI»BNO... : ',' r , , of declarations and acts of t,he dollor ,at or about the ,time ,of the acceptance Of the gift, showing her purpose lD transferring the deposits to her %lieces, was admilsible. ", ' ",' ,
Il}, EAuity. Ja'1TlfJt p. ,McMalwn J, ,M. Buckingham, for 'complainflnt. W.l,t; 'Bennett and W.' B. ,Stoddard, forqefendants.
This is a bill in equity byone althe residua,rjrIegawi1l.ofIreneClark, deceased, to compel three of ,the defendants. deliver to the llxecutor of said will three: savings bank books , alleged 'to be in their possession, and to the executOr tQleceive , said books, to inventory the, deposits named therein as, a ,of the assets ofsai4 estate, and to collect the amount due thereon for the bene. fit of said Mrs. Irene Clark, of Milford, Conn. ,. died in'April, ;1.887, leaving a last will, wb,ich was executed in November, 1881, by which, after a specific .legacy to her husband, she gave all. the ,rest of her estate to six meces, Irllne M.und Martha A. Buckmgham, Emma J .. and Mary ,Belle Clark, Ellen C. Platt, and. Rosalie to be · equally diyided between said persons; and appointed Clark, the husban4 of said J., her executor. , At the tIme of her death . she ",asilOm 76 to 78 years old, without childrell, the seconq. wife of ; Bela Cl.ark,,to whom she'was married late . inlife.Her ,wlll'e,:a a, brother, divers ,andgJ1l:tl4pieces. Her .property, besIdes a ,small amount of ang ,wearing, apparel, to. · of 15,1!384, :she had ".· pf In