It is from this decree that the present appeal is prosecuted, and the same is here assigned as error.

CLOPTON, J. In the cases of A. P. Bush and L. C. Dorgan, the facts are substantially alike, and the questions raised are identical. The amendment of the bill, filed September 5, 1887, exhibited a list of the stockholders on October 6, 1886. In this list Mrs. Bush, wife of A. P. Bush, and Mrs. Dorgan, wife of L. C. Dorgan, appear as the holders of twenty shares each; and they were made parties to the amended bill. Having filed pleas of coverture, the bill was dismissed as to them, and amended so as to aver that the wife of the appellant, Bush, did not own any of the property as her equitable separate estate, and did not personally subscribe for or purchase any of the shares, but that her husband subscribed for or purchased them, and caused them to be placed on the books of the company in her name. The amendment of the bill makes substantially the same allegations as to the shares in the name of Mrs. Dorgan. The answers of appellants, which are sworn to, deny that they ever owned the stock held by their wives, or furnished the money to pay for them, and also that the stock was purchased with funds belonging to the wife's statutory separate estate. It will be observed that the bill fails to allege that the wives had no statutory separate estate. The evidence shows that a certificate for ten shares of stock was issued December 1, 1868, and certificates for the other ten shares were issued February 18, 1882, to Mrs. Bush; and a certificate for twenty shares was issued April 19, 1875, to Mrs. Dorgan; which stood thereafter on the books of the company in their names, respectively. Bush and Dorgan each owned thirty-five shares, for which certificates were issued in their names, and the books showed that they were the holders of such shares. On the pleadings and evidence, the chancellor rendered a decree against each of the appellants for the aggregate amount of the stock held in his own name, and that which stood in the name of his wife. What follows will be understood as the expression of my individual views as to the personal liability of the husbands.

It is conceded that, at common law, when the husband subscribes for stock in the name of his wife, he will be held liable for the subscription as the real owner. The rule rests on the incapacity of a married woman to subscribe for stock, and as she can not make a binding contract, whoever subscribes in her name becomes personally liable. At common law a married woman has no material rights as regards shares of stock subscribed for or purchased by her. The statutes in force at the time of the purchase of the stock in question abrogated the marital rights of the husband as to the wife's statutory separate estate. By the statute her property was vested in him, not as husband, but as her trustee, and as such he was clothed with large discretionary powers to invest her funds as he deemed most beneficial for her, and if he purchased personal property with her money, taking the title in her name, while as trustee he was entitled to the possession and income, she was the legal owner. Evans v. English, 61 Ala. 416; Daniel v. Hardwick, SS Ala. 557. The husband may invest

her money in the stock of incorporated companies, which thus becomes her separate estate, as well as other personal property.

The supreme court of the United States, in a recent case, held that a married woman, in the District of Columbia, may become a holder of stock in a national banking association, assuming all the liabilities of a shareholder, though the consideration may have proceeded from the husband, and that coverture does not prevent the recovery of a judgment against her for the amount of an assessment levied upon the shareholders to pay the corporate debts. Keyzer v. Hitz, 133 U. S. 138. This conclusion is based on the fact that the statute imposing liability on the stockholders makes no exception in favor of married women. Whether, under our statutes, the rules of the common law are displaced so far as to render a married woman individually liable for the debts of the corporation and authorize a personal judgment against her, are questions not before us and as to which we express no opinion. In Simmons v. Dent, 15 Mo. App. 288, it was held that, under a statute whereby a married woman may become a stockholder, a transfer of stock from the husband to the wife is valid and relieves him from liability on the stock the same as though he had transferred it to another person.

That a married woman may become, by a purchase of shares, a stockholder in an incorporated company under our statute, can not well be questioned. The liability of the shareholders, additional to the common law liability for unpaid subscriptions, is statutory. posing a liability which did not exist at common law, the statute will ́ not be extended by construction so as to include persons who are not the equitable or real owners of the stock, or in whom the legal title is not vested-who are not stockholders, neither equitably nor legally. Cook on Stock and Stockholders, § 214. When money of the wife's statutory separate estate is invested by her husband as a trustee in the purchase of stock, he is not the owner, has no beneficial interest therein, and enters into no contractual relations, express or implied, with the corporation. It is true that, under the statutes in force at the time of the purchase of the stock, a married woman had no capacity to make contracts subjecting her to personal liability, or charging her statutory separate estate. But whether the husband, subscribing for stock in the name of his wife, would be liable for the unpaid subscriptions, is not the question presented for decision. It may be that he would be liable, under the rule laid down in Wilder v. Abernethy, 54 Ala. 644, that no title to property purchased on her credit passes to her, the contract of purchase not being a charge on her separate estate, and if purchased by the husband on the credit of the wife, it becomes his property. A different question arises where property is purchased with the separate money of the wife, paid for a real investment of her funds by the husband as her statutory trustee. such case the contract of purchase, the investment, bound the wife. It appearing that, in each case, the stock was purchased by the husband for the wife in his capacity of trustee under his statutory powers, paid for with the moneys of her separate estate, the certificates issued in

In

her name, standing on the books of the company as the owner holding the legal title, and the husband's name not appearing on the books as the owner, or as holding the stock in trust, he can not be regarded, in my opinion, as a stockholder, in the meaning of the constitutional and statutory provisions imposing the additional individual liability. But as to this conclusion, the other members of the court differ with me, holding that, as a married woman was incapable under the statute of making a contract binding her personally, or charging her statutory separate estate, the common law rule, which makes the husband, when he subscribes for stock in the name of his wife, personally liable on the subscription, applies, and subjects him to the additional liability imposed by the statute on the stockholders to the extent of their stock.

As to Bush and Dorgan, affirmed.

Note. Married women as shareholders. See, 1847, Porter v. Bank of Rutland, 19 Vt. 410; 1849, Angas' Case, 1 De G. & Sm. 560; 1849, Slaymaker v. Bank of Gettysburg, 10 Pa. St. 373; 1850, White's Case, 3 De G. & Sm. 157; 1853, Dalton v. Midland, etc., R., 13 C. B. 474; 1860, Luard's Case, 1 De G., F. & J. 533; 1860, In matter of Reciprocity Bank, 22 N. Y. 9; 1864, Hill v. Pine River Bank, 45 N. H. 300; 1866, Matthewman's Case, L. R. 3 Eq. Cas. 781; 1868, Butler v. Cumpston, L. R. 7 Eq. Cas. 16; 1872, Pugh & Sharman's Case, L. R. 13 Eq. 566; 1879, Brown v. Bokee, 53 Md. 155; 1880, Anderson v. Line, 14 Fed. Rep. 405; 1886, Sayles v. Bates, 15 R. I. 342; 1887, Witters v. Sowles, 32 Fed. Rep. 767; 1890, Keyser v. Hitz, 133 U. S. 138; 1894, Robinson v. Turrentine, 59 Fed. Rep. 554; 1896, Re Married Women's, etc., 18 Pa. Co. Ct. 492. See, also, 14 Am. & Eng. Ency. 680; Beach, § 139; Cook, §§ 66, 250, 319, 396, 538; Clark, § 98; Elliott, § 346; I Thompson, §§ 1096-7; II Ib., § 2493; III I., §§ 3103, 3211, 3275; VII Ib., §§ 8163, 8708.

Sec. 130. Aliens. See Regina v. Arnaud, 9 Adolpl. & E. 886, supra, p. 58.

Notes. Aliens as shareholders. See, 1806, Ex parte Boussmaker, 13 Ves. Jr. 71; 1844, Cammeyer v. U. G. L. Churches, 2 Sandf. Ch. (N. Y.) 186; 1847, Commw. v. O'Donnell, Brightly N. P. (Pa.) 111; 1869, Hobbs v. Manhattan Ins. Co., 56 Maine 417, 96 Am. Dec. 472; 1871, In re Journalist's Fund, etc., 8 Phila. (Pa.) 272; 1873, In re Charter, etc., 10 Phila. (Pa.) 19; 1879, In re Charter, etc., 1 Leg. Rec. (Pa.) 133; 1880, Humphreys v. Mooney, 5 Colo. 282; 1890, Commw. v. Hemmingway, etc., 131 Pa. St. 614, 7 L. R. A. 357; 1895, Re Italian Mut. Ben. Assn., 15 Pa. Co. Ct. 644; 1897, Re Charter St. Ladislaus. 19 Pa. Co. Ct. 25; 1899, Blien v. Rand, 77 Minn. 110, 79 N. W. 606, 46 L. R. A. 618 note.

State statutes frequently provide that incorporators, or a part of them, shall be citizens of the state granting the charter. Such provisions are undoubtedly valid, for the state can grant or withhold its corporate franchises at its pleasure. It, however, perhaps is questionable whether a state can confine the stockholders or subscribers to the stock to residents or citizens of the state creating the corporation, without violating section 2, article iv, of the United States constitution, providing that "the citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states."

But see, 1890, Commw. v. Hemmingway, 131 Pa. St. 614; 1898, State v. Travelers' Ins. Co., 70 Conn. 590; 1899, Blien v. Rand, 77 Minu. 110, 79 N. W. 606.

Sec. 131. Private corporations.

THE DENNY HOTEL CO., APPELLANT, V. JOHN SCHRAM, RESPONDENT.1

1893. IN THE SUPREME COURT OF WASHINGTON.

134-138, 36 Am. St. Rep. 130.

6 Wash. Rep.

DUNBAR, C. J. * * Second. Can a corporation under the laws of this state become an incorporator by subscribing for shares in another corporation?

*

As to the second proposition, a corporation can only be formed in the manner provided by law, and has only such powers as the law specially confers upon it. We do not think that a corporation was within the contemplation of the legislature when they used the expression, "two or more persons," in § 1498, Gen. Stat. It is true that $1709, Code Proc., provides that the term "person" may be construed to include the United States, this state, or any state or territory, or any public or private corporation, as well as an individual. But it does not follow, by any means, that the term "person" is always to be construed as a private corporation, any more than it is always to be construed as the United States.

Morawetz on Private Corporations, § 433, says: "A corporation can not, in the absence of express statutory authority, become an incorporator by subscribing for shares in a new corporation; nor can it do this indirectly through persons acting as its agents or tools;" citing Central R. Co. v. Pennsylvania R. Co., 31 N. J. Eq. 475. The author, continuing, says, "The right of forming a corporation is conferred by the incorporation laws only upon persons acting individually, and not upon associations.

This, it seems to us, for manifest and manifold reasons, is in accordance with public policy, and we therefore decide that under the existing laws of this state one corporation can not subscribe to the capital stock of another corporation. And, in any event, in this case the amount of the capital stock of the building company was so exceedingly small, compared with the amount of the liability which it sought to assume (its subscribed stock being $64,000 and its capital stock only $54,000), that there was no apparent ability to pay the amount subscribed; and while it may be true that a party's contract will not be held void if it is not apparent that he is worth the entire amount of money necessary to carry it out at the time it is made, yet the disparity here is too great, and there is not only not "an apparent ability to pay," but there is an apparent inability to pay.

We find no error in the proceedings in the court below, and the judgment is therefore affirmed.

STILES, ANDERS and SCOTT, JJ., concur.

HOYT, J., disqualified.

Note. See, infra, under Powers of Corporations, p. 1051, et seq.

'Only that part of opinion relating to the one point given.

Sec. 132. Municipal corporations.

COLE v. LA GRANGE.'

1884. IN THE SUPREME COURT of the United STATES. 113 U. S. Rep. 1-9.

This was an action to recover the amount of coupons for interest from January 1, 1873, to January 1, 1880, attached to twenty-five bonds, all exactly alike, except in their numbers, and one of which was as follows:

"UNITED STATES OF

STATE OF MISSOURI, CITY OF LAGRANGE.}

"No. 23.

$1,000

"Know all men by these presents, that the city of La Grange doth, for a good, sufficient and valuable consideration, promise to pay to the La Grange Iron and Steel Company, or bearer, the sum of $1,000 in current funds, thirty years after the date thereof, at the Third National Bank, city of New York, together with interest thereon, at the rate of eight per cent. per annum, payable annually in current funds on the first day of each January and July ensuing the date hereof, on presentation and surrender of the annexed interest coupons at said Third National Bank.

"This bond is issued under an ordinance of the city council of the said city of La Grange, passed and approved September 22, 1871, under and in pursuance of an act of the legislature of the state of Missouri, entitled 'An act to amend an act entitled an act to incorporate the city of La Grange,' approved March 9, 1871, which became a law and went into force and effect from and after its said approval. "This bond to be negotiable and transferrable by delivery thereof. "In testimony whereof, the city council of the city of La Grange hath hereunto caused to be affixed the corporate seal of said city, and these presents to be signed by the mayor and countersigned by the clerk of the city council of said city this 14th day of December, 1871. [Seal] "J. A. HAY, Mayor.

"R. MCCHESNEY, Clerk."

The petition alleged that the city of La Grange, on the 14th of December, 1871, executed the twenty-five bonds, and delivered them to the La Grange Iron and Steel Company, under and by virtue of the authority contained in section 1 of article vi of the city charter, as amended by an act of the legislature of Missouri, approved March 9, 1871 (which section, as thus amended, was set forth in the petition), and under and by virtue of an ordinance of the city, dated September 22, 1871, by which an election was authorized to be held in the city on October 4, 1871, to test the sense of the people of the city upon the question of issuing bonds; 1Arguments omitted.