and the creditors of the company. We think the liability imposed by section 10 is a liability arising upon contract. The stockholders of the company are by that section made, severally and individually liable within certain limits to the creditors of the company for its debts and contracts. Every one who becomes a member of the company by subscribing to its stock assumes this liability, which continues until the capital stock is all paid up and a certificate of that fact is made, published, and recorded. The fact that the liability ceases when these events take place does not change its nature and make that a penalty which would, without such limitation, be a liability founded on contract. Such has been the construction given to section 10 by the court of appeals of New York. In the case of Wyles v. Suydam, 64 N. Y. 173, that court had under consideration sections 10 and 12 of the act under which the Pensacola Lumber Company was organized. The complaint alleged the liability of the defendant, both as a stockholder under section 10 and as a trustee under section 12. The complaint was demurred to, on the ground that two causes of action were improperly joined. The court sustained the demurrer. In giving the reasons for its judgment it said:

"The cause of action against the defendant as a stockholder consists of the debt and the liability created by statute against stockholders where the stock has not been paid in and a certificate of that fact recorded. In effect the statute in such a case withdraws the protection of the corporation from the stockholders, and regards them liable to the extent of the amount of their stock as copartners. Corning v. McCullough, 1 N. Y. 47. The allegations in the complaint are sufficient to establish a perfect cause of action against the defendant as a stockholder, primarily liable for the debts to the amount

of his stock.

"The allegations against the defendant as trustee also constitute a distinct and perfect cause of action, but of an entirely different character. Here the liability is created by statute, and is in the nature of a penalty imposed for neglect of duty in not filing a report showing the situation of the company. The object of the action is the same, viz., the collection of a debt; but the liability and the grounds of it are entirely distinct and unlike.. That there are two causes of action in this complaint seems too clear to require much argument. The first cause of action against the defendant as a stockholder is an action on contract. The six-years' statute of limitation applies. 1 N. Y. supra. The defendant is entitled to contribution. But in respect to the action against defendant as trustee, this court held, in Merchants' Bank v Bliss, 35 N. Y. 412, that the three-years' statute of limitations applied under the following provision of the Code: 'An action upon a statute for a penalty or forfeiture when the action is given to the party aggrieved."

case.

This decision is upon the precise point of the controversy in this It declares that the liability such as that which the plaintiffs in this action seek to enforce is one arising upon contract, and is not in the nature of a penalty. This decision has never been modified or overruled by the court of appeals of New York.

We think this is a case where the construction of the state court is entitled to great, if not conclusive, weight with us. It is the settled construction of a law of the state, upon which the rights and liabili

ties of a large number of its citizens must depend. If the riability of a stockholder under section 10 arises upon contract, the six-years' limitation applies to it; if the liability is in the nature of a penalty, the three-years' limitation applies. It is clear that confusion and uncertainty would result should the state and federal courts place different constructions on the section. Such a result ought, if possible, to be avoided. It is true that this decision was made after the defendant had become a stockholder in the Pensacola Lumber Company, but there had been no previous contrary decision. As said by this court in Burgess v. Seligman, 107 U. S. 20, [S. C. 2 SUP. CT. REP. 10,] "even in such cases, for the sake of harmony and to avoid confusion, the federal courts will lean towards an agreement of views with the state courts if the question seems to them balanced with doubt."

If this were a case arising in the state of New York we should therefore follow the construction put upon the statute by the courts of that state. The circumstance that the case comes here from the state of Florida should not leave the statute open to a different construction. It would be an anomaly for this court to put one interpretation on the statute in a case arising in New York and a different interpretation in a case arising in Florida. Our conclusion, therefore, is that this action was not brought to enforce a liability in the nature of a penalty. The right of the plaintiffs to sue upon this liability in any court having jurisdiction of the subject-matter and the parties is therefore clear. Dennick v. Railroad Co. 103 U. S. 11..

The next contention of the defendant is that the recovery of a judgment against the company in the state of New York on the debt due the plaintiffs, and the issue of an execution thereon, returned unsatisfied, is a necessary condition to the liability of the defendant; and as the declaration only avers the recovery of a judgment in the state of Florida it is insufficient. It appears from the declaration that before the year allowed by section 24 of the statute for bringing suits against the company on the debts due the plaintiffs had expired, the company had been adjudicated a bankrupt by the district court of the United States for the southern district of New York; that all its property had been sold, and the proceeds thereof were insufficient to pay the costs and expenses of the bankruptcy proceedings.

Although it has been held by the court of appeals in the case of the Rocky Mountain Bank v. Bliss, 89 N. Y. 338, that a judgment in a court of the state of New York was necessary to fix the liability of a stockholder under section 10 of the act under consideration, yet the same court, in the case of Shellington v. Howland, 53 N. Y. 371, held that in an action brought to charge a defendant as stockholder in a company organized under the same law, an adjudication in bankruptcy of the company excused a compliance with the condition, which required a suit to be brought against the company within a year after the maturity of the debt, and a judgment to be recovered

We

and an execution to be issued thereon and returned unsatisfied. see no reason why we should not follow this decision, and it is conclusive of the question under consideration.

The object of section 24 was to compel the creditor to exhaust the assets of the company before seeking to enforce the liability of the stockholder. When the declaration shows that this was done, and that a literal performance of the condition would have been vain and fruitless, the performance of the condition may well be held to have been excused.

Lastly, it is objected that the declaration sets out a case which should have been prosecuted in equity and not at law. There is no ground for this objection to rest on. In the cases of Pollard v. Bailey, 20 Wall. 520, and Terry v. Tubman, 92 U. S. 156, to which we are referred in its support, the liability of the stockholders was in proportion to the stock held by them. Each stockholder was, therefore, only liable for his proportion of his debts. This proportion could only be ascertained upon an account of the debts and stock, and a pro rata distribution of the indebtedness among the several stockholders. This, the court held, could only be done by suit in equity. But in this case the statute makes every stockholder individually liable for the debts of the company for an amount equal to the amount of his stock. This liability is fixed, and does not depend on the liability of other stockholders. There is no necessity for bringing in other stockholders or creditors. Any creditor who has recovered judgment against the company and sued out an execution thereon, which has been returned unsatisfied, may sue any stockholder, and no other creditor can. Such actions are maintained without objection in the courts of New York under section 10 of the statute relied on this case. Shellington v. Howland, supra; Weeks v. Suydam, 64 N. Y. 173; Handy v. Draper, 89 N. Y. 334; Rocky Mountain Nat. Bank v. Bliss, Id. 338.

In

We have considered all the objections made to the declaration. our opinion none of them are well founded. Our conclusion is, therefore, that the declaration was sufficient, and it follows that the judgment of the circuit court declaring it insufficient must be reversed, and the cause remanded for further proceedings in conformity with this opinion.

This case is in all respects similar to the case just decided, [Flash v. Conn, ante 263,] and was submitted on the same arguments and briefs. The judgment in that case must therefore be reversed, and the cause remanded to the circuit court for further proceedings in conformity with the opinion announced in the case of Flash v. Conn.

(109 U. S. 381)

TERRE HAUTE & I. Ry. Co. v. STRUBLE.

(November 26, 1883.)

MOTION FOR NEW TRIAL-REVIEW IN SUPREME COURT-JUDGMENT AFFIRMED

The action of the court below in refusing a new trial is not subject to review in this court.

Upon examination, no error appearing in the ruling of the court upon the admission of evidence or the instructions to the jury, the judgment is affirmed.

In Error to the Circuit Court of the United States for the Eastern District of Missouri.

John G. Williams, for plaintiff in error.

Jeff. Chandler, for defendant in error.

HARLAN, J. This action was brought by Struble, the defendant in error, to recover damages for an alleged breach of a written contract entered into between him and the Terre Haute & Indianapolis Railroad Company. A verdict and judgment were rendered in favor of plaintiff for the sum of $10,440. The defendant moved for a new trial and in arrest of judgment, and both motions having been denied, the case has been brought here for review.

By the contract in question, Struble obligated himself to build and keep in good order, on his leased grounds in East St. Louis, Illinois, all necessary stock-yards and feeding-pens suitable for the reception, feeding, handling, loading, and unloading of live-stock which might be shipped or transported over the Terre Haute & Indianapolis Railroad to and from East St. Louis; to receive and unload all live-stock over that road; to collect all freight and charges on same and pay over to the company or its authorized agents all moneys so collected; to order from the proper agent of the company all cars necessary for the transportation of live-stock from East St. Louis; to load in a proper manner all live-stock for transportation from that place by that company; to bed such cars at a cost to shippers of not more than one dollar per car, to be collected by him from shippers; and to attend to all other necessary matters pertaining to the safe and prompt loading of all such live-stock for transportation over that road.

The company, in consideration of the performance by Struble of the stipulations of the contract, agreed to build all necessary loading schutes for the use of the company connected with said yards; to send all live-stock coming to East St. Louis over its road to Struble's yards, except such as may be specially ordered otherwise by shippers or owners; to pay him 50 cents per load for all stock received by him over the road and unloaded in his yards, and two dollars for each and every car of live-stock loaded by him to be transported by the company from East St. Louis; and to give him the loading of all live-stock which may be transported over its road from that city.

Struble's yards were completed and opened for business in December, 1870. From that date until some time in October, 1873, all live-stock coming to East St. Louis over defendant's line was unloaded at those yards, and live-stock shipped over that road from that city was loaded by Struble. Early, however, in the fall of 1873 the National Stock-yards were completed and opened for business. They were just outside of the corporate limits of East St. Louis, and near defendant's road. The plaintiff claimed that up to October, 1873, he performed all the conditions of the contract, and was ready, willing, and able to comply with it in all respects until it should, by its own terms, be terminated, but that he was prevented by defendant after that date from fully executing it. All this the defendant denied.

The record contains numerous assignments of notice only such as are relied on in argument. brace every essential question in the case.

error, but we shall They seem to em

1. It is claimed that the court below erred in admitting evidence offered by the plaintiff. The specification under this head refers to evidence as to the number of cars loaded with live-stock and taken by the defendant from the National Stock-yards between August 1, 1874, and April 1, 1880. The contention of plaintiff was that, within the meaning of the contract, he was entitled to load those cars, and recover therefor from the defendant the price fixed in the contract for such services; this upon the alleged ground that that stock nad not been specially ordered by shippers or owners to the National Stock-yards, and could have been directed by the defendant to Struble's yards had it made any or proper effort to do so. In this view the evidence objected to was competent, as furnishing a basis to estimate the damages which plaintiff sustained by reason of the breach of the contract, if such breach was established by the evi dence.

2. The court, among other things, said to the jury that in deter mining the quantity of stock that would probably have been shipped from the plaintiff's yards, they should include only such as the jury believed would have been possible for the defendant to direct to those yards. In the same connection the court said:

"The jury, in considering the meaning of the words 'all live-stock which may be transported over the said railroad from East St. Louis,' found in the last clause of the contract sued on, must determine from all the evidence before them what stock is included. The words evidently apply to such stock as in the ordinary course of the defendant's business should be shipped from that point over their line of railroad. It applies to all such stock whether loaded at plaintiff's yards or some other yards used for loading stock so shipped. As already suggested, it should be applied only to stock which it was possible for defendant to have loaded by plaintiff. It does not apply to stock, the owner or shipper of which directed the loading to be done by some person other than the plaintiff, and over the loading of which defendant had no control."