NOTES OF RECENT CASES
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NOTES OF THE MOST IMPORTANT RECENT CASES COMPILED BY THE EDITORS OF THE NATIONAL REPORTER SYSTEM AND ANNOTATED BY SPECIALISTS IN THE SEVERAL SUBJECTS {Copies of the pamphlet Reporters containing full reports of any of these decisions may be secured from the West Publishing Company, St. Paul, Minnesota, at 35 cents each. In ordering, the title of the desired case should be given as well as the citation of volume and page of the Reporter in which it is printed.)
ADMIRALTY.
(See Shipping.)
CONFLICT OF LAWS. (Liability of Share holders.) — The case of Risdon Iron and Loco motive Works v. Furness, to which reference has -already been made in the GREEN BAG, has now been decided by the English Court of Appeal (Nov. 10. 1905) adversely to the plaintiffs, thus affirming the judgment of Mr. Justice Kennedy in the court below. In this case the Copper King (Limited), a mining company, was organized under the English Company Laws, with its regis tered oiiL-es in London, and with its capital fully subscribed and fully paid up, and by its memoran dum of association (charter) was authorized to acquire mining rights and lands in the United States, and to purchase and to hire machinery, and by its articles of association (by-laws) was empowered to appoint any person as its attorney for the transaction of any business abroad, with such powers as it might deem necessary to enable the Company's operations to be validly carried on abroad, and to do all such acts and to take such steps as might be necessary to comply with any statutory enactment, rule or regulation of any •country where the company might carry on busi ness. The company, as a matter of fact, carried on business in California, and for that purpose it had to be registered there, and it incurred local debts to the plaintiff in the purchase of machinery in that State. By the law of California, each stockholder of a corporation is individually liable for debts contracted by the corporation during the time he is a shareholder, according to the propor tion which his holding bears to the subscribed capital of the company, and no corporation organized outside the limits of the State is allowed to transact business within the State on more favorable conditions than are prescribed by law to similar corporations organized under the laws of the State. The company's debt of $10,404.96 to the plaintiff not having been paid in San Fran cisco, and the company having gone into liquida tion in London, the plaintiff brought its action in
England against Sir Christopher Furness, one of the largest shareholders of the defunct company, to charge him for liability for the plaintiff's account under the provisions of the California statute. The case, which involved a new proposition of law, so far as the English courts were concerned, was very carefully argued both in the King's Bench Division and the Appeal Court. Mr. Justice Kenned}', by whom the case was tried in the first instance, held that the defendant's liability was limited by the English Company's Acts, under which the Copper King was registered, and an English Court could not recognize, as a valid cause of action, a claim in respect of the debts of the company arising by virtue of the law of a foreign country which was inconsistent with the limitations of the shareholders' liability according to English law; and that any proceeding by the company in California to enlarge the liability of the shareholder beyond that fixed by the charter of the company was ultra vires. In arguing the appeal for the California Company Mr. Montague Lush, K.C., contended that the cause of action against the defendant was transitory, and if he was liable in California he was liable in England; that when persons become members of a company they were bound by the articles; that the articles in this case empowered them to carry on business abroad and to take such steps as might be necessary to comply with any statutory requirement in any country where the company might carry on busi ness; that the defendant had inpliedly given the company authority to contract in his behalf in California, and that he could not be heard to say that he had no knowledge of California law. The Lord Justices, without calling upon counsel for the defendant, dismissed the appeal. The' Master of the Rolls, in giving his judgment, said he agreed with Mr. Justice Kennedy that it might be that there was a general power given to the com pany to carry on business in a foreign country, but underlying that power was the fundamental fact that the company was a limited liability com pany, and whatever power it possessed must be
