creditors, as well as what was assets as to the July '95, 30. corporation." January 27, 1896. B. & O. Railroad Co. v. Kensington Practice-Attachment-Bill in equity-Agreement-Construction of-Fraud. These are all the cases we have been able to find on the subject, and in the absence of a controlling weight of authority, as already said, especially in the absence of an express decision of the Supreme Court of Kansas, we are not willing to depart from the settled general rule. The objections to doing so, appear to us unanswerable. A receiver represents not only the cor- An agreement whereby certain parties advance money poration, but all of its creditors, and as to the to a land company on condition, inter alia, that the same latter, it is his duty to secure all the assets shall be expended by the company in payment of and for available for their payment. For this purpose pany and the proceeds of the sale of land shall be paid improvement of a tract of land purchased by such comhe succeeds to their rights, and has all the to a trustee to repay the original advance, said trustee to powers to enforce such rights that the credi- hold all the capital stock of said company as security, is tors before his appointment had in their own a valid agreement between the parties thereto and a credbehalf, even though such powers be beyond said trustee, money which has been deposited with it for itor of the land company cannot attach, in the hands of those which he has as the representative of the the purpose of repaying such advance. corporation alone. As each creditor may sue, the right is equal in all, and common to all, and hence the receiver who represents all alike is the proper party to assert the common right and Even if the consideration for such agreement be not pursue the common remedy for the common sufficient, a creditor before attacking the same must show benefit. We do not, of course, refer to pending that the land company was insolvent; the mere existence suits already begun by creditors before the ap- of his judgment in a foreign attachment suit is not suffi pointment of the receiver. As to them, his cient evidence of this fact. power to interfere may be doubted. But as to If the creditor contends that the agreements are others, he is clearly the proper party. If any fraudulent because the parties who advanced the money creditor or class of creditors have preferred land company, it is incumbent upon him to show these are or were the promoters, officers or stockholders of the claims, or as argued here, special claims against facts affirmatively in a direct proceeding by a bill in special liabilities, that does not deprive the re-equity; they cannot be shown in a collateral proceeding. ceiver of the right, or relieve him from the duty If the parties to such agreement have so acted as to make it fraudulent and void as to creditors of the land company, their remedy is by bill in equity. to gather them all into his hands for proper dis- Appeal of the Baltimore & Ohio Railroad tribution. In this manner the rights of all will Company, plaintiff, from the judgment of the be protected, and justice be done in a single Common Pleas No. 1, of Philadelphia County, proceeding in which everyone will get what is refusing to take off a non-suit in a proceeding by his due; no one will be called upon to pay more scire facias sur attachment in which the Kenthan his fair proportion, and the expense, delay, sington Land Company was defendant, and The inconvenience and inevitable occasional injustice Solicitors' Loan and Trust Company, garnishee. of separate actions by different creditors against The facts of the case are substantially as foldifferent stockholders, with their attendant legion lows: On February 9, 1890, certain persons of resulting actions for contribution, will be called the subscribers entered into an agreement avoided. This is so consonant with convenience with The Solicitors' Loan & Trust Company as and natural justice, as well as with our own set- follows:tled procedure in analogous cases, that we will not be easily moved to depart from it. We hold, therefore, that the right to sue, if there be any, is in the receiver, and that plaintiff cannot maintain the present action. The ultimate questions whether the Courts of this State will enforce the statutory liability under the law of Kansas at all, and if so, whether against separate stockholders, or only in the form established by our own practice in similar cases, we leave to be decided when they arise. Judgment reversed. H. B. PHILADELPHIA, February 9, 1890. We, the undersigned, hereby agree to deposit with The Solicitors' Loan and Trust Company the sum set opposite our names, to be held by the said The Solicitors Loan and Trust Company, as follows: The whole of the said amount to be retained by the said company, until an agreement properly executed, shall be entered into between the "Kensington Land Company," of Chattanooga, Tennessee, and The Solicitors' Loan and Trust Company," as trustee for the subscribers hereto, in and by which the said Kensington Land Company agrees to pay to the said subscribers the entire amount of their subscriptions hereto, with the interest at the rate of six per cent. on each subscription, from the date of the deposit of the same to the time of payment; and also deliver to each subscriber thereto four shares of the full paid non-assessable stock of said company for each one hundred dollars of his subscrip tion; and shall further agree that none of the said money so deposited, shall be used by the said company except for the following purposes: First. The payment for about fifteen hundred acres of land, in Walker county, Georgia, which have been purchased for said company. Second. For the purpose of improving the said land by the laying out and grading of streets, erecting a hotel, and such other buildings as should be deemed necessary by the directors of said company; and for the purpose of securing the subscribers hereto, the said land company shall deliver to the said The Solicitors' Loan and Trust Company as trustee, the entire capital stock of the said Kensington Land Company, namely, twenty thousand shares at one hundred dollars each, and that upon the payment to the subscribers hereto of the entire amount of their several subscriptions, with interest as aforesaid, and also of four shares of stock for each one hundred dollars of their subscriptions as above set forth, the said trustee shall deliver to the said company the balance of said stock. The said land company further agrees that as soon as practicable, they will make sales of land, and that the entire proceeds of all such sales shall be paid into the said The Solicitors' Loan and Trust Company, as trustee, until a sufficient sum is thus acquired to repay the subscribers hereto the entire amount of their subscriptions, with interest as aforesaid. And the said land company also agrees that eight thousand shares of the stock of said company when delivered to them under the terms of this agreement, shall be retained in the treasury of said company to be hereafter disposed of under the direction of the board of directors of said company. It being distinctly understood that the said The Solicitors' Loan and Trust Company shall not pay out any of the money received by them under this agreement, until the execution of the aforesaid agreement between the said Kensington Land Company and the said The Solicitors' Loan aud Trust Company, trustee, and the deposit of the entire capital stock of the said land company as aforesaid, and that after the execution of the said agreement, the said The Solicitors' Loan and Trust Company shall hold the said funds under the terms and conditions of said trust agreement, but that the said The Solicitors' Loan and Trust Company assumes no responsibility for the application of the money which it will pay to the said land company under the terms of the said agreement. Subsequently the following agreement was ex ecuted: : This agreement made this sixteenth April, 1890, be tween the Kensington Land Company, of Chattanooga, Tennessee, and "The Solicitors' Loan and Trust Company" as trustee for the subscribers hereinafter referred to witnesseth: Second. For the purpose of improving said land by the laying out and grading of streets, erecting a hotel and such other buildings as should be deemed necessary by the directors of said land company. And for the purpose of securing said subscribers the said land company hereby delivers to the said The Solicitors' Loan and Trust Company as trustees, the entire capital stock of the said Kensington Land Company, namely, twenty thousand shares of one hundred dollars each; under the agreement that upon the re-payment to the said subscribers of the entire amount of their several subscriptions with interest as aforesaid and also of four shares of stock for each one hundred dollars of their subscription as above set forth, the said trustee shall deliver to the said land company the balance of said stock. The said land company further agrees that as soon as practicable they will make sales of land and that the entire proceeds of all such sales shall be paid into the said The Solicitors' Loan and Trust Company as trustee until a sufficient sum is thus acquired to re-pay said subscribers the entire amount of their subscriptions with interest as aforesaid. Said land company also agrees that eight thousand shares of the stock of said company when re-delivered to them under the terms of this agreement shall be retained in the treasury of said company to be hereinafter disposed of under the directions of the board of directors of said company. It is distinctly understood that the said The Solicitors' Loan and Trust Company shall hold the said funds under the terms and conditions of this agreement, but that the said The Solicitors' Loan and Trust Company assumes no responsibility for the application of the money which it will pay to the said land company under the terms of said agreement. In witness whereof, the Kensington Land Company has hereto caused its name to be set and its corporate seal affixed by F. R. Pemberton, its president, and Floyd S. Patterson, its secretary, on the day and year first hereinafore written. Done in duplicate. It is understood that nothing in this agreement binds the Solicitors' Loan and Trust Company to procure any subscribers. KENSINGTON LAND COMPANY. Kensington THE SOLICITORS' LOAN AND TRUST COM- BY RICHARD W. CLAY, President. The Solicitors' DANIEL W. SLACK, Secretary. That whereas, The said Loan and Trust Company proposes to obtain subscribers for the benefit of the said land company, the said land company hereby agrees to pay to the said subscribers the entire amount of their subOn June 6, 1891, the Baltimore and Ohio scriptions with interest at the rate of six per cent. on each Railroad Company obtained a judgment in a sub.cription from the date of their deposit of the same to suit begun by foreign attachment against said the time of payment, and also to deliver to each subscriber four shares of full paid non-assessable stock of said land company for each one hundred dollars of his sub scription; and further agrees that none of said money so deposited shall be used by said land company except for the following purposes: First. The payment for about fifteen hundred acres of land in Walker county, Georgia, which have been purchased for said land company. Kensington Land Company and filed interroga- funds in their hands received from the land com- The Solicitors' Loan and Trust Company then and before the inception of the land company, and out of which it was created, and are not of the same nature as an ordinary sale of securities at the market value, but less than par, by a going concern. filed a plea of nulla bona, and at the trial of the issue so formed, on motion of plaintiff, the Court, BIDDLE, J., entered a non-suit, which the Court in banc refused to take off. Thereupon this appeal was taken, assigning for error this action of the Court. William H. Addicks, for appellant. The capital stock of a company is a trust fund for creditors, and the only apparent capital was the $100,000 advanced under the agreement, and hence creditors are entitled to be paid out of this fund. Railway Company v. Simpson, 21 Fed. Rep. 533. Handley v. Stutz, 139 U. S. 417. H. La Barre Jayne, (with him Arthur Biddle, Biddle & Ward and Richard S. Hunter), for appellee. The transaction of which the appellant complains is admittedly unimpeachable if the company was solvent at the time the attachment was issued, for a solvent corporation has a right to part with its property without consideration if its stockholders choose to do so, and its unpaid capital stock is not assessable so long as its assets are sufficient to pay its debts, and there is no Union Mut. Life Ins. Co. v. Frear Stone Mfg. Co., evidence that defendant company was insolvent. 91 Ill. 537. The whole question of ultra vires in this class of contracts, where the original promoters at the inception of a corporation, through it, con Hollins v. Brierfield Co., 150 U. S. 383. to sustain his allegations that the stock issued as The appellant has failed to offer any evidence full paid was not in fact full paid, nor has he offered any evidence to show whether the defendant land company was a going concern at the time the loan was made or a company just in process of formation; yet both of these facts are indispensable to the success of his conten tion. tract with themselves for a return of their subscriptions and a bonus in unpaid shares is ably reviewed and the principles that apply are strongly and clearly stated by Judge LURTON in Morrow v. Iron and Steel Co., 87 Tenn. 262. The initial contracts for the promotion of this Kensington Land Company in which the promoters attempted by words in their secret agreement to put their subscription in the form of a loan to be returned in full with interest, together with four thousand shares of stock, representing four hundred thousand dollars worth of full paid stock, upon which not one dollar had been paid, except by the subscription of one hundred thousand dollars to be returned to them, and the further attempt to put all of the property and the capital stock of the land company in the hands of the Solicitors' Loan and Trust Company as If we admit the insolvency of the land comthe financial agent of both as collateral for this pany, drop the Solicitors' Loan and Trust Comagreement, and this scheme to postpone credi-pany out of the transaction, and assume the tors who had a right to believe that the two mil- stock to be held directly by the subscribers, and lion dollars full paid capital stock represented to bear on its face the evidence of its assessabilvalue, is fraudulent, against public policy, ultra vires and void, so far as the land company is concerned, considering it in its relation to the ordinary creditors, and especially with reference to a creditor who has secured the lien of an attachment upon money of the land company in the hands of its financial agent and not yet distributed to the promoters under their scheme of re-payment. It is to be remembered as an important distinction, that these agreements which are here set up were secret agreements made at Lane's Appeal, 105 Pa, 67. Handley v. Stutz, 139 U. S. 417. Even if we admit that the company was insolvent; and assume the stock not to have been issued its face that it was only partially paid and liable full paid, but to have been issued showing on to assessment, nevertheless, under the settled law of Pennsylvania, very clearly established in Lane's Appeal, and also sustained by the Supreme Court of the United States in Scovill v. and does not mature until a call or assessment Thayer, a stockholder's liability is conditional, And this liability cannot be enforced through athas been duly made by competent authority. tachment proceedings. ty, nevertheless the appellant's case must fail, because the moment these notes had been delivered by the Kensington Land Company to a third person on account of the subscribers who were intended to receive it, all title to the prop- Bryans v. Nix, 4 M. & W. 775. In answer to the appellee's brief, which is en-way. Even if the land company is insolvent, tirely devoted to argument under various heads to and if the parties have so acted as to make the the effect that unpaid subscriptions to capital stock agreements fraudulent and void as to its creditcannot be collected by a creditor in an attach- ors, the remedy is by bill in equity and not by a ment proceeding, the appellant again disavows collateral issue in the present form. the intention of raising such a question, and distinctly reasserts its position that the contracts relied upon by the appellees are null and void as against creditors, and as to creditors, the funds in the hands of the Solicitors' Company are the funds of the Kensington Land Company, and therefore subject to attachment. But it nowhere appears except by inference from the existence of appellant's judgment, that the land company is insolvent. It received the hundred thousand dollars advanced by the subscribers, purchased the land and has sold part of it. Presumably it has as assets in its hands the rest of the land, one-fourth of its capital stock delivered to it by the Solicitors' Company, and the right to receive the remaining three-fourths of the stock on payment of the balance due the April 13, 1896. MITCHELL, J. A plain statement of the substantial facts of this case is all that is necessary to indicate the result. Cer- subscribers on their advances. tain parties, called for convenience the sub- Nor is it shown in the evidence that the subscribers, advanced money to the Kensington scribers who furnished the money are or were Land Company on specified conditions, the the promoters, officers or stockholders of the principal of which were that the money was to be land company, except so far as they may have expended by the company in payment and im- received a part of the stock at the rate of four provement of a tract of land in Georgia already shares per hundred dollars as additional compenpurchased for it, the entire proceeds of sale sation for money advanced. The fact may be of lots paid over to the Solicitors' Loan and so, but it was not proved in the case, and without Trust Company to repay the subscribers, and such proof even a bill in equity would have in the meantime to secure the latter the entire nothing to stand on. capital stock of the land company was to be deposited with the Solicitors' Company. This is putting the matter in the most favorable light for the appellant, by treating it as a direct contract between the subscribers and the land Jan. '95, 399. company. In fact it was done by contract of each party separately with the Solicitors' Company, but as the latter was admittedly merely an agent and trustee, the legal effect was the same as if the contract was made directly between the parties actually interested. Judgment affirmed. White's Estate. W. M. S., Jr. March 23, 1896. Appeal of Free Library of Philadelphia. Will-Intention of testator-Condition, indefinite and vague. Where legatees have for themselves interpreted what seems so plainly the intention of their would-be benefactor, it is not for the Courts to hold they are mistaken, and force upon them gifts which their conscience rejects. The corporate action of legatees formally renouncing legacies, because of their determination not to comply to an adjudicated forfeiture. with the conditions implied by acceptance, is equivalent The money was paid over by the Solicitors' Company to the land company, and so far as appears used by the latter in payment for the land. Sales of parts of the land were then made and the proceeds, according to agreement, paid to the Solicitors' Company for the subscribers, but before actual distribution to the latter the money was attached by the appellant as the money of the land company. This was the issue in the cate individual opinions wholly at variance with those Members of a corporation legatee can hold and advoCourt below, and on the undisputed facts the of the testator, the holding of which, by the corporlearned Judge could not have done otherwise ation, is made a cause of forfeiture of a bequest made than enter a non-suit. The money was clearly by him, and this fact would not affect the right of the corno longer the money of the land company. As poration to the legacy; but if the corporation's agents, between that company and the subscribers at aid or encourage what the testator forbids, the legacy is officers and managers, by authority of the corporation, least the agreements were valid, the land com- forfeited. pany was a debtor, and when it paid the money A. left certain legacies to corporate charities, and proto the Solicitors' Company as trustee or agent for vided that "if at any future time any of the beneficiaries the subscribers, the effect was the same as if it thereby, or their successors, ever commit any act, or in had paid directly to the subscribers themselves. any manner whatever give any support, aid, sympathy or This is an effort by a creditor of the land com- countenance to what I consider the pernicious fallacy of pany to overturn the whole transaction and get other scheme for the total suppression by law of the man'Prohibition,' or its bantling, 'Local Option,' or any into its own hands a payment made by its debtor ufacture and sale or consumption of liquors that will into another creditor. It cannot be done in this toxicate when abused or used to excess, or commit any act of proscription against any person of good moral character by reason of being engaged in the manufacture or sale, or owing to the rational and temperate use of such liquors that then and in such case such legacy shall become forfeit and void as to such beneficiary forthwith," and the sum be paid over to the P. Library : Held, (1), the condition was not too vague for enforcement, but was valid; (2), that a declination to take a legacy on the ground of disapproval of the condition was equivalent to a forfeiture, and hence the amount of the legacy went to the P. Library, the devisee over, and did no: become a part of the residuum of the testator's estate. Appeal of the Free Library of Philadelphia, from the decree of the Orphans' Court of Philadelphia County. The facts of this case are fully stated in the opinion of the Supreme Court, infra. Exceptions were filed to the adjudication of FERGUSON, J., which were dismissed by the Court in banc in an opinion by HANNA, P. J. whereupon this appeal was taken. George Wharton Pepper, for appellant. The condition is in itself legal, and is neither too indefinite, or contrary to public policy. (a) It is not too indefinite. Hodgson v. Halford, 11 Ch. Div. 959. The testator has taken pains to make his meaning definite, by specifying the character of the acts that will work the forfeiture. Mickey's Appeal, 46 Pa. 341. Tattersall v. Howell, 2 Merivale, 26. (b) It is not contrary to public policy. Prohibition on the one hand, and regulated license on the other, are both recognized as fit subjects of affirmative legislation. The choice between them being mere matter of opinion, it is as competent to make adherence to one of them the condition of a legacy, as to make a similar condition with respect to the teaching of free trade or protection. This latter condition is recognized as entirely valid, as witness endowments of professorships, etc., upon that basis. The vesting of the gift over is not too remote. It is true that the contingency may not occur but since both the first and second takers are until after the executionary limitation period; charities, this circumstance does not invalidate the gift over under the decision of Christ's Hospital v. Grainger, 1 Mac. & G. 460, 1848, per Lord COTTENHAM. In legal contemplation the contingency has occurred, since the first takers have refused to take. The testator desired the first takers to enjoy his bounty as long as their overt acts were consistent with his views on the liquor question. The Court below asks, in effect, two quesIf they had taken the legacies, and had the same tions: (1). Who is to determine the contin- day declared for prohibition, the gift over gencies upon the happening of which the gift would unquestionably have taken effect. If, over is to take effect? (2). How can a corpor- simultaneously with the payment of the legacy to ation give countenance to the doctrine of prohi- the attorney of a charity, the board of directors bition, or commit any act of proscription against passed a resolution in favor of local option, the those engaged in the liquor traffic? The answer legacy would have been forfeited. It is clear to the first question is simple. Upon an appli- that if, immediately after passing such a resolucation of the taker in remainder, the Court will tion, the charity had demanded the legacy, and itself hear testimony, or will appoint a master to the executors (ignorant of the resolution) had take testimony, to ascertain whether or not the paid it over, the gift to the Free Library would contingency contemplated by the testator has have taken effect. In each case the legacy occurred: Mickey's Appeal, 46 Pa. 341, would have been avoided by a failure to adhere 1863; Tattersall v. Howell, 2 Merivale, 26, to the testator's position with respect to prohibi1816. The answer to the second question has tion. The legal equivalent of the last of the already been given by the words of the testator's three cases put has actually occurred. The will, and there seems to be no difficulty in charities, instead of seeming to coincide in the holding that a corporation may do the acts contemplated by the testator as effectually as if it were an individual. An application to the cor poration of familiar rules of agency would enable the Court or the master to reach a conclusion in a given case as to whether or not the testator's views for awhile, and then separating from them, have refused to accept them at all, and have registered their reluctance to be committed to his policy. Theobald on Wills, p. 481. This proposition is consonant with common act was one with which the corporation was sense. Its application is illustrated by the folchargeable. The books are full of cases in lowing cases, selected at random from the which conditions bearing a strong resemblance books: to this one have been sustained as valid, especially where, as here, there is a gift over; the conditions are not merely in terrorem, but are the conditions of the vesting of the subsequent gift. Meadows v. Parry, 1 V. & B. 124. In any event, upon the refusal of a legatee to |