brought an action of ejectment as the heir of the
original owner of the land.
(i) Williams v. Western Union Telegraph Co., 93
N. Y. 162. The telegraph company was about to
pay a dividend to its stockholders in the form of
shares of its capital stock, when Williams, a stock-
holder, brought this action to enjoin the payment of
CASES ON CORPORATIONS 283
such dividend, on the ground that such dividend was
from the capital stock and not from the surplus
profits and therefore illegal. It was proved that the
company owned property equal in value to the
amount of its share capital and the amount of
the proposed dividend.
(2) Moore v. Schoppert, 22 W. Va. 282. The
plaintiff was president of a company owning a toll
road. One of the counties through which the road
passed took possession of a tollgate and appointed
Schoppert keeper thereof. The company brought
ejectment proceedings to oust Schoppert from the
land, and the county defended on the ground that
certain irregularities of management in the com-
pany were sufficient to work a forfeiture of its
charter, and under the statute the county was
justified in taking property of a dissolved corporation.
(3) Mayor & Aldermen of Jonesboro v. Me Kee,
2 Yer. 167. The plaintiff, a corporation, sued the
defendant for non-payment of taxes. He defended
on the ground that the plaintiff's powers were de-
scribed and limited by its charter, and that the charter
conferred no power to sue in its own name.
(4) Railroad Co. v. Ayres, 56 Ga. 230. The
plaintiff brought suit against Ayres to recover a
portion of his subscription to the stock of the com-
pany. Ayres gave evidence that the stock was value-
less, and that, although he had paid part of his sub-
scription, he refused to pay the balance when the
stock became valueless.
284 CASES ON CORPORATIONS
(5) Petition of Argus Co., 138 N. Y. 557. A
stockholder in the Argus Co. made an agreement
with certain other stockholders not to sell his
stock without giving the other parties to the agree-
ment an opportunity to purchase. Nevertheless,
he transferred a number of shares to his son who had
the proper transfer made on the books of the com-
pany. The son then voted at an election of directors,
and it was sought to have the election set aside on
the ground that the son's votes were illegal and void.
(6) Scovill v. Thayer, 105 U. S. 143. Thayer sub-
scribed for certain stock in the Fort Scott Coal and
Mining Co. He paid 20 per cent of the amount
of his subscription and made a written agreement
with the company on a good consideration that
no further payments should be made for the
stock and that full-paid shares should be issued to
him. The company became bankrupt, and Scovill,
as assignee for the benefit of creditors, sued Thayer
for the unpaid balance of his subscription.
(7) Winscott v. Investment Co., 63 Mo. App.
367. Winscott paid the defendant $500 and re-
ceived a written agreement to deliver to him five
shares of preferred stock of the company, when
issued, or to return the money. In an action on
the agreement, the company pleaded that the cor-
poration had no power to issue preferred stock, or to
agree to do so ; that the agreement was void and of
no effect, and could not afford a basis for suit.
PROCEDURE AND REMEDIES
152. IN GENERAL.
153. LAW AND EQUITY.
155. PLEADING AND PRACTICE.
157. REMEDIES, LEGAL AND EQUITABLE.
158. PROVISIONAL REMEDIES.
152. In General. - To permit the regular and
orderly administration of the law, certain forms of
procedure have been adopted and strictly adhered
to. The fact that many suits are decided on tech-
nical grounds, without reference to the merits of
the case, is often cited as a reproach to our courts and
judges. Doubtlessly, harm may be wrought in some
cases, but it must be remembered that an undue re-
laxation of the rules of procedure would result in a
chaotic condition in which nobody could secure
justice. It is better that an occasional individual
should suffer, than that the whole administration of
justice should be uncertain and ineffective.
In the old common law courts in England the rules
of procedure were exceedingly strict and complicated.
286 PROCEDURE AND REMEDIES
They provided for many successive steps of pleading
and counterpleading and the penalty for a mistake
anywhere along the line was the dismissal of the
suit. By gradual changes and amendments, chiefly
by the enactment of practice acts by the various
legislatures, the strictness of common law pleading
has been done away with and now our rules of pro-
cedure are relatively simple.
153. Law and Equity. A reference to the his-
tory of courts of law is necessary to explain the im-
portance of the distinction between law and equity.
Under the old English common law system a court
of law could only pass upon questions that could be
brought before it by one or another of the recognized
writs, or forms of action. Thus, if a man trespassed
on my land I could buy a writ of trespass and pro-
ceed against him; or, if a man kept property to
which I was entitled, I could buy a different writ and
proceed against him; and so in other cases. The
number of these writs was necessarily limited and
questions were constantly arising which were not
covered by the writs and for which, therefore, there
was no remedy, whereby great injustice was done.
The practice then grew up of addressing a petition
to the king, as the source and head of all justice,
setting forth the facts of the case, stating that the
petitioner could get no relief in the courts of law and
asking the king to do justice between the parties.
These petitions became so numerous that the king
turned them over to his chancellor to see that justice
PROCEDURE AND REMEDIES 287
was done. The chancellor came to have a regular
office, called chancery, for the disposition of these
petitions, and to this day courts of equity are fre-
quently called chancery courts. In this way the
legal business of the country was done by two sets
of courts. To the law courts went all cases involving
the payment of a sum of money only, or the recovery
of a specific thing. When the relief required was
the performance or non-performance of an act, the
court of equity heard the case. A court of equity
acts in personam, that is, it commands a person to do
or not to do certain things, and in connection with
such a command it may incidentally award a sum of
money as damages. This distinction is still found,
in a more or less pronounced form, in all our systems
154. Jurisdiction. Before a court can act in any
case, it must have the parties legally before it, and
not until then does it have authority over the parties
or the subject of the action. This authority is called
jurisdiction. In every state there is some court of
general jurisdiction, whose power extends throughout
the state. If any person in the state receives a man-
date of such court, whether it be a summons, subpoena,
injunction, or what not, he must obey it or suffer the
consequences. The power of such a court also ex-
tends to property within the state, and the court
may take jurisdiction of an action involving the prop-
erty, even though the owner of it may be beyond the
limits of the court's power. This question of juris-
288 PROCEDURE AND REMEDIES
diction is very important, as any act performed by a
court without jurisdiction is absolutely void.
Federal Courts. In addition to the courts of each
state in the Union there is a body of courts known as
Federal or United States Courts. These courts have
jurisdiction of all questions arising under the laws,
treaties, and Constitution of the United States (as
distinguished from the laws and constitution of any
particular state), of actions between citizens of differ-
ent states, and of actions to which a state is a party.
The lowest of these courts are the District Courts, of
which there are about eighty throughout the United
States. From a District Court an appeal may be
taken to the Circuit Court of Appeals for the circuit
of which the district is a part, and from that court
to the Supreme Court of the United States in certain
155. Pleading and Practice. - There are certain
legal terms in connection with procedure with which
the student should be familiar.
Summons. A mandate of a court requiring the
defendant served therewith to appear before the
court and answer the complaint of the plaintiff. If
such appearance and answer is not made within the
specified time, the plaintiff may take judgment by
Plaintiff. A person bringing an action at law.
Defendant. A person against whom an action is
brought. A respondent.
PROCEDURE AND REMEDIES 289
Subpoena. A mandate of a court requiring the
person served therewith to appear before the court
and testify as a witness. Failure so to appear is con-
tempt of court, and is punishable by fine and im-
Subpoena duces tecum. A subpoena requiring the
prospective witness to bring with him certain books
and papers specified in the subpoena.
Complaint. A statement of the plaintiff's cause
of action against the defendant.
Answer. - - The defendant's pleading in reply to
the complaint, setting forth his defense.
Counterclaim or Set-off. A claim in favor of the
defendant against the plaintiff which the defendant
sets up to diminish or defeat the plaintiff's recovery.-
Demurrer. A claim by either party that, admit-
ting the fact set forth to be true, no cause of action
has been stated by the opposing party. A demurrer
raises a question of law only.
Bill of Particulars. A bill of particulars is an
amplification of the claim made by either party to
an action, setting forth in detail the items making up
the claim. In a proper case it must be furnished at
the request of the opposing party.
A Lawsuit. - - The normal course of an action at
law is as follows : The person who desires to press his
claim through the courts must first engage the serv-
ices of an attorney, as an attorney is an officer of the
court and he alone is allowed to practice law. If,
upon examination of the facts and the law, the claim
290 PROCEDURE AND REMEDIES
seems to him well founded, the attorney will cause a
summons to be personally served upon the defend-
ant. With the summons a copy of the complaint
may be served, or the complaint may be withheld
until the defendant has appeared by an attorney.
Within a specified time after the service of the com-
plaint, the defendant must serve his answer or demur-
rer to the complaint. Issue is then said to be joined
and must be tried.
If a demurrer was made to the complaint, the issue
is called an issue of law and must be tried by a judge
alone, as a jury cannot pass upon questions of law.
If the plaintiff wins on the trial of the demurrer, the
defendant must answer the complaint or have judg-
ment taken against him. If the defendant wins, the
plaintiff must amend his complaint so as to state a
cause of action, or the action will be dismissed.
If the defendant answers the complaint, a trial
by judge and jury must be had. The jury is com-
posed of twelve men chosen by lot from a number
summoned to attend in court for that purpose. To
be eligible to serve as a juror, a man must possess
certain qualifications of age, property, etc., and when
summoned as juror, he must appear or be punished
for contempt of court.
If the defendant is successful at the trial, the ver-
dict of the jury and the judgment of the court are
in his favor, the action is dismissed, and the costs of
the action must be paid by the plaintiff. If the
plaintiff is successful, he is awarded by the jury such
PROCEDURE AND REMEDIES 291
amount a he has proved he is entitled to, and the
costs of the action must be paid by the defendant. A
judgment for the amount of the damages and costs
is then filed in court, and an execution issued to the
sheriff of the county, requiring him to take such prop-
erty of the debtor as he can find and sell it to satisfy
the judgment. The sheriff must then take and sell
the property under the execution, or make a return
of " nulla bona" i.e. that he can find no goods of the
debtor. In the latter case, the creditor can compel
the debtor to appear in court and submit to an ex-
amination in supplementary proceedings. By this
examination the creditor endeavors to learn whether
the debtor has any property which the sheriff could
not find, and which can be seized and sold to satisfy
The procedure in a suit in equity differs consider-
ably in the various states, but in general it may be
said that it is tried by a judge without a jury, and
that the final judgment commands or forbids the
performance of an act, instead of being for a sum of
money, and that disobedience of the judgment is
punishable by fine and imprisonment as a contempt
156. Damages. - The law is careful to provide
that a litigant shall not recover more than the
amount of the damage he has actually suffered.
This amount must be very carefully proven, and the
plaintiff can recover no more than he proves, no
matter how much he may demand in his complaint.
292 PROCEDURE AND REMEDIES
The law also requires that he shall minimize the
damage to the best of his ability. For example, if A
is engaged to teach a school for a year, but his em-
ployer refuses to allow him to carry out his contract,
he has a claim for damages for the full amount of his
salary, but he must reduce this amount as much as
possible by using every reasonable effort to obtain
similar employment, and any amount he is able to
earn must be deducted from his claim.
It is often provided in contracts that if a party
fails to perform, he shall pay a designated sum as
liquidated damages. The object of such provisions
is to make recourse to a lawsuit unnecessary to de-
termine the amount of damages to be paid. Such
provisions are looked upon with suspicion, and if the
amount is so far beyond the actual damage suffered
as to be in effect a penalty, its payment will not be
157. Remedies. The only remedy afforded by
an action at law is a judgment for a sum of money as
damages. It sometimes happens that such a judg-
ment would not afford to the plaintiff adequate re-
lief, and in such cases relief may be had in equity.
For example, when a contract requires the delivery
of a certain piece of real estate, or a work of art, or
something which is unique and for the loss of which
money would not compensate, a court of equity may
decree specific performance of the contract and re-
quire the party in default to deliver the particular
thing which was the subject of the contract. Again,
PROCEDURE AND REMEDIES 293
if a famous singer contracts to give all his services to
a certain theater, and then agrees to sing in some
other theater, an injunction may be issued to pre-
vent him from breaking his contract, as no other per-
son can take his place and no money value can be
placed on the loss of his services.
158. Provisional Remedies. - - These, remedies are
four in number, viz., Arrest, Attachment, Injunction,
and Replevin, and are employed during the progress
of an action to assist or preserve a party's rights un-
til the final determination of the action.
Arrest. In an action on contract where the de-
fendant was guilty of fraud, or where the defendant
has removed or is about to remove his property with
intent to defraud his creditors, or where, by the final
judgment in an action, the defendant may be re-
quired to perform some act and there is danger that
he may remove from the state and so render the judg-
ment ineffectual, the defendant may be arrested by
order of the court or judge, and may be detained in
custody unless he produces satisfactory bail.
Attachment. If the defendant in an action is a
non-resident or a foreign corporation, or if he has de-
parted from the state or keeps himself concealed to
avoid service of process, or if he has removed or is
about to remove his property from the state with in-
tent to defraud his creditors or has assigned or se-
creted it, or is about to do so with such intent, any of
the defendant's property may be seized by the sheriff
under a warrant of attachment and kept by him until
294 PROCEDURE AND REMEDIES
the determination of the action. In many states the
requirements for attachments are not so strict, and
in some states almost every action is commenced by
Injunction. When any person can show to a court
sufficiently good cause, he may obtain, at once and
without a hearing, an injunction forbidding the per-
formance of any threatened act. Such an injunction
will be granted only for a short time, but the persons
enjoined must appear and show cause why it should
not be continued.
Replevin. When a plaintiff has brought suit to re-
cover a particular thing from the defendant, he may
require the sheriff to take the thing into his custody,
by virtue of a writ of replevin, and keep it until the
final determination of its ownership.
Absolute defense, 157.
Acceptance, of a draft, 167.
for honor, 168.
supra protest, 168.
Accident insurance, 204.
Accord and Satisfaction, 28.
Acts, against public policy, 12.
in desecration of the Sabbath, 14.
Adequacy of consideration, 26.
Agency, by estoppel, 234.
by necessity, 235.
cases on, 240.
coupled with an interest, 240.
how performed, 124.
how terminated, 238.
ratification of, 234.
Agent, denned, 233.
Agent, General, 235.
Agents, Kinds of, 235.
Alien enemies, n.
Alteration of contract, 2.
Application for insurance, 192.
Approval, sale on, 80.
Articles, of copartnership, 251.
of incorporation, 267.
Assignment of lease, 109.
Attorney, power of, 234.
Bailee, defined, 124.
liability of, 129.
lien of, 128.
Bailment, how created, 125.
termination of, 130.
use of property, 127.
warranties in, 129.
Bailments, cases on, 131.
Bank draft, 164.
Bargain and Sale, contract of, 71.
Bets or wagers, 14.
Bill of Exchange, 156.
Bill of particulars, 289.
Bills of Exchange, Kinds of, 164.
Bills of Lading, 157.
Bona fide holder, 157.
Bond, coupon, 157.
Breach of warranty, 85.
Capital Stock of corporations, 269.
Care, degrees of, 126.
Cases, on agency, 240.
on bailments, 131.
on contracts, 41.
on corporations, 275.
on fixtures, 68.
on guaranty and suretyship, 225.
on insurance, 206.
on laws of innkeepers, 139.
on negotiable instruments, 176.
on partnership, 258.
on personal property, 88.
on real property, 115.
Casualty insurance, 203.
Caveat emptor, 20.
Chattel mortgage, 82.
Civil law, 4.
Commercial law, 4.
Common Carrier, 142.
Common Carrier, charges of, 142.
delivery by, 146.
liability of, 144.
lien of, 143.
of passengers, 147.
Common Carriers, cases on, 148.
Common law, 2.
Common stock, 272.
Condition, precedent, 83.
^Consent, reality of, 18.
^Consideration, adequacy of, 26.
as to time, 26.
failure of, 27.
in guaranty, 28.
moral obligation as, 27.
presumption of, 23.
Constitutional law, 2.
Constructive contract, 7.
Continuing guaranty, 220.
Contract, against public policy,
cases on, 41.
discharge of, 28.
form of, 6.
in restraint of marriage, 13.
in restraint of trade, 13.
made on Sunday, 14.
of infants, 9.
of insane persons, IO.
Contract, of married women, n.
of sale, 70.
of wagers, 14.
parties to a, 8.
real property, 40.
subject matter, 12.
uberrima fides, 22.
under seal, 7.
Corporation, lay, 267.
Corporations, defined, 266.
capital stock of, 269.
cases on, 275.
dissolution of, 274.
dividends of, 272.
how created, 266.
kinds of, 267.
liabilities of stockholders, 274.
management of, 271.
powers of, 268.
stock dividends, 273.
ultra vires acts, 273.
Credit, insurance, 205.
letter of, 169.
Criminal law, 4.
Curtesy, estate by, 105.
Damages, liquidated, 292.
Days of grace, 176.
Deed, Bargain and sale, 112.
delivery in escrow, 114.
delivery of, 1 14.
full covenant warranty, 112.
recording of, 114.
Default, notice of, 221.
Defenses, kinds of, 157.
Delivery by common carrier, 146.
in escrow, 114.
Demand and presentment, 174.
Discharge of contract, 28.
Dishonor, notice of, 177.
Dissolution of corporation, 274.
by forfeiture of charter, 275.
by limitation, 274.
by repeal of charter, 275.
Dissolution of partnership, 256.
causes of, 256.
notice of, 257.
Domain, eminent, 104.
Dormant partner, 253.
Dower estate, 105.
Draft, acceptance of, 167.
personal, defined, 164.
Drafts, kinds of, 164.
Drawee of draft, 156, 157.
Drawer of draft, 156, 167.
Earnest money, 77.
Ecclesiastical corporation, 267.
Elevator insurance, 205.
Eminent domain, 104.
Employers' liability insurance, 204.
Endowment policy, 200.
Equity and law, 286.
Estate by curtesy, 105.
by the entirety, in.
for life, 105.
for years, 107.
in fee simple, 104.
in land, 104.
in severally, no.
Exceptional contracts, 137.
Executed contract, 8.
Executory contract, 8.
Existence, potential, 78.
Express contract, 6.
Express warranty, 83.
Failure of consideration, 27.
Federal courts, 290.
Fee simple, estate in, 104.
Fidelity insurance, 204.
Fiduciary relations, 22.
Fire insurance, defined, 189.
important clauses, 193.
proof of loss, 195.
Foreign bills of exchange, defined,
Foreign corporation, 275.
Formal contract, 7.
^Fraudulent acts, 15.
\Full covenant warranty deed, 112.
General agent, 235.
Good consideration, 24.
Grace, days of, 176.
Guaranties, kinds of, 220.
Guaranty, 216, 22O.
and suretyship, 216.
consideration of, 218.
of collection, 221.
of payment, 221.
Holder for value, 157.
Homestead act, 106.
Immoral acts, 14.
Implied contract, 6.
Implied warranty, 83.
^Indemnity contracts, 189.
Indorsements, kinds of, 171.
Indorser, defined, 170.
Indorser's contract, 170.
kinds of, 170.
notice to, 173.
Infants, contracts of, 9.
Influence, undue, 22.
Inland bill of exchange, 164.
Innkeeper, defined, 137.
liability of, 138.
Innkeepers, cases on laws of, 139.
Innkeeper's lien, 139.
Insane persons, contracts of, 10.
Insurable interest, 191, 197.
Insurance, accident, 204.
alienation clause, 194.
application for, 192, 198.
cancellation clause, 195.
cases on, 206.
employer's liability, 204.
lightning clause, 193.
policy, fire, 190.
proof of loss, 195.
pro rata clause, 194.
rebuilding clause, 195.
standard fire, 190.
vacancy clause, 194.
Interest, legal rate, 178.
maximum rate, 178.
International law, i.
Interstate Commerce Law, 143.
Irregular indorser, 170.
Joint and several note, 163.
Joint note, 163.
Joint tenancy, no.
Jurisdiction, defined, 287.
Land, estates in, 104.
Law, and equity, 286.
Interstate Commerce, 143.
Lay corporation, 267.
assignment of, 109.
subletting under, no.