author: Kennedy, S.

text:
    In the Matter of Proving the Last Will, etc., of Lorenza M. Sheldon, Deceased.

      (Surrogates Court, Madison County,

      Filed September 23, 1891.)

    1. Will—Proof—Legacy to draftsman.
    Where a testator has that mental and physical vigor which is essential to make a valid will, it is not the law that the draughtsman of a will, even if he holds confidential relations to the testator, cannot be his executor or take a legacy thereunder, nor can fraud he presumed where the will contains such provisions, nor evidence he required to show that it was made freely, without fraud or undue influence.
    2. Same—Undue influence—Confidential relations.
    A mere agency to transact business in relation to investments in another state, where the principal takes little or no part in its management, does not create business relations of that confidential character from which will ordinarily arise any legal presumption of undue influence in the making and execution of a will drawn by the agent and containing a legacy to himself.
    3. Same— Evidence.
    On probate of a will, it need not be shown that the testator gave directions for making it, or that it was read to or by him. Knowledge of its contents will be presumed from his having signed it, and his declaration that it is his will.
    4. Same.
    Testatrix, who had no ancestors or descendants surviving, by her will, gave to certain nephews and nieces, with whom she had little communication, legacies of $500 and over, and the balance of her estate to a nephew who drew her will, his adopted son and grand-nephews and grand-nieces, children of a niece, share and share alike. Held, that the inequality of the legacies did not show undue influence, and that the will should be admitted to probate.
    Probate of will.

      Joseph Mason and John E. Smith, for proponent; Hopkins & Aldrich, of Aurora, Ill, and James S. Sherman, for contestant
   Kennedy, S.

The testatrix was a resident of Brookfield, in this county. The will was executed at the house of her nephew, Truman H. Day, at Aurora, 111, she at that time being on a visit to him at that place. She left property valued at nearly $40,000, substantially all of which was represented by securities in the hands of said Day, who, for fifteen years previous to her death, had acted as agent in making investments for her, rendering annual statements to- her and remitting such sums as she desired for her personal use. The will was executed on the 19th day of October, 1886, and the testatrix died on the 24th day of December, 1890, at the age of eighty-four years. At the time the will was executed she was in the enjoyment of her usual health, and so continued until a short time before her death. She was a woman of ordinary intelligence, had a clear understanding of her business affairs, and had the legal capacity to make a will and dispose of her property with a thorough knowledge of its amount and character and of her relation to those who would have been her heirs if she had died intestate. Her husband was dead, and her only heirs and next of kin were a sister and a number of nephews and nieces. By her will, after providing for her funeral expenses, she gave legacies to various nephews and nieces, none less than $500, amounting in all to the sum of $14,000. After which she gave her residuary estate of $21,000 to said Day, his adopted child, and eight grand nephews and nieces, children of her niece, Sarah H. Jones, share and share alike.

All the formalties which the law requires were observed in the execution of the will, but its validity and proper execution are challenged by Solemnus D. Seaman, one of her nephews, residing at Aurora, 111., on the grouud of Mrs. Sheldon’s alleged incapacity to make it; and also on account of the alleged fraud and undue influence of said Day in the preparation and execution of the will. On the trial there was no evidence from which the lack of testamentary capacity could be inferred, nor any affirmative evidence of undue influence; but notwithstanding this, the contestant insists, because it appeal's from the evidence the will was drawn by Mr. Day while she was at his house, and he was made an executor of, and a legatee under the will, and further that for many years he had acted as her agent in the management of her estate in Illinois, that the will was the product of fraud and undue influence on his part.

The contestant claims that, under such circumstances, the proponent must give other than the usual evidence of the witnesses to the will, before it can be admitted to probate; that it must be shown the testatrix gave directions for its drafting which were obeyed, or that it was read to, or by her before its execution, and bases this proposition of law upon the ground that where the writer of a will has confidential relations with the testator, and the will makes him an executor or legatee thereof, such a presumption of fraud and undue influence arises that the ordinary proof of the execution of a will thus made does not rebut or outweigh such legal presumption; that the proponent must show, in addition thereto, that the will was made freely, without fraud and undue influence, and that the proponent should establish by affirmative evidence that none of the provisions of the will were dictated, suggested or brought about by his instigation.

The rule of law which the contestant invokes applies only to that class of cases where by reason of sickness, old age, mental and physical condition or other circumstances, the testator had not that health, intellectual vigor, independence of character, freedom of action and judgment to guard his rights and protect himself and his estate from the stealthy tread of those who would illegally take what he had designed for others. We shall hold that where a testator has that mental and physical vigor which is essential to make a valid will, it is not the law that the drawer of a will, even if he holds confidential relations to the testator, cannot be his executor or take a legacy thereunder; nor is it the law that if the attorney, physician or priest of the testator draw a will in which there is a legacy to himself, that such will or such legacy is presumed to be fraudulent, nor in such a case is fraud presumed in aid of those who seek to overthrow the will; nor does this fact, in the absence of evidence, warrant the presumption that the testatrix was unduly influenced, or was improperly or fraudulently controlled in making her will. All that can be legally claimed for such a state of facts is that it may or may not be a suspicious circumstance; but whether it is or not depends upon the facts of each case.

The fact that a beneficiary is the attorney, guardian or trustee of a decedent does not of itself alone create a presumption against a testamentary gift; neither is it presumed to have been procured by fraud and undue influence in every case and under all circumstances ; nor does that single fact call upon courts to pronounce against a will thus executed unless additional evidence is produced to prove knowledge of its contents by the deceased. It is only in that class of cases where the testator excludes the natural objects of his bounty that a will in favor of his attorney, physiclan, priest, is looked upon by courts with suspicion. To invalidate a will on the ground of undue influence, there must be afArmative evidence of the facts from which such influence can be inferred. It is not sufficient that the party benefited by a will had the motive to exert such influence; there must be evidence that he did exert it, and so control the actions of the testator either by importunities which he could not resist, or by deception, fraud, er other improper means, that the instrument is not really the will of the testator. If a contestant alleges fraud and undue influence, or any other defense, it is his duty to prove it, because fraud is never presumed from the existence of an opportunity to commit it. It must be established by such evidence that the influence of wrong doing follows as a natural and unavoidable result, and it is only so established when such facts are proven that no other legitimate conclusion can be drawn. Justice to testators, heirs and legatees does not demand such a rule of law as the contestant seeks to maintain, nor is there any necessity for its existence. If such were the law, testators would, many times, be debarred the aid of an attorney, relative or other person in whom they had the most implicit confidence, and whose legal ability, knowledge of the testator’s affairs, or other circumstances made it especially necessary to have such person draw the will, provided he desired to remunerate him for services rendered or to be rendered, or for faithfulness to his interest, or from any other proper motive wished to give him a legacy. To say that every lawyer, doctor, minister or other person holding confidential relations with a testator, who draws a will with a legacy to himself, is, from that simple fact alone, presumptively dishonest, his motives and his acts presumptively fraudulent and wicked, and the will presumptively the product of undue influence, is to assert a proposition of law which is not now, never has been, and probably never will be the law of this state.

The thief, the burglar and the assassin is each presumed to be innocent until the court, upon legal evidence, and after a fair and impartial trial, has imposed the sentence which the law demands for his crime. But, if the law is as the contestant claims, a reputable citizen known far and wide for his ability and unquestioned moral character happens to be on confidential terms with a testator, who clearly and thoroughly understands his own business, and appreciates his.duty to others, draws a will for him, he is denied the legal rights given to every criminal, and must prove that he is not guilty of any wrongdoing or fraud, and undue influence, before there is any evidence that he has violated any law whatever or done injustice to any one. The law presumes every person to be of good character, and he is not to be deprived of the benefit of this legal presumption because he happens to be an attorney, physician, minister, confidential friend adviser or business manager, and draws a will with a legacy to himself, which a. competent testator knowingly, deliberately, intentionally, voluntarily gives to him; nor under such circumstances ought he to be compelled to go into court and by witnesses establish the fact that he is not a scoundrel, when there is not the slightest proof that he has done a wrongful act towards the testator, or any one interested in his estate. The presumption which the court is asked to recognize makes no allowance for the character of men who draw such wills; all are alike condemned irrespective of their known integrity, their prominence in social or business affairs, their private or professional standing; makes no allowance for the age, mental and physical condition of the testator, the amount of his property, the nature of the relations existing between him and his heirs, the financial condition of his relatives, their good or bad character; makes no allowance for the fact that if the beneficiary writing such a will is a near relative who would take a considerable share of the estate if there were no will, the same presumption which might arise against a stranger is not applicable to him. Courts do not thus quickly, easily and unnecessarily rob the drawer of a will of his good name and fame because somebody alleges or imagines his confidential relations with the testator were influential in obtaining a legacy to himself. The dead are not here to explain their motives or their acts, and the law in this state, under some circumstances, prevents the legatee and writer of the will from disproving the insinuations of the accuser by his own evidence. Under such circumstances it is better, more in accordance with the procedure of courts in other judicial proceedings, to wait and hear the evidence before rendering judgment

If the draughtsmen of wills could choose their own time and occasion, had opportunity, and it were possible to surround themselves with witnesses who would be sure not to die until the will was offered for probate, such a presumption of law upon the proof of wills might be harmless; but in view of the fact that this cannot be done, it would seem but fair and just to those who draw wills of competent testators, with legacies to themselves, if they are persons of good character, to presume they have discharged their duties towards the testator, his heirs or legatees, fairly and honestly, and are not presumptively guilty of fraud and undue influence.

“ Though in the trade of war I have slain men,

Yet do I hold it very stuff o’ the conscience To do no contrived murder. I lack iniquity,

Sometimes, to do me service.”

Perhaps the suggestions we have made are unnecessary, for the reason that the legal presumption which the contestant urges applies only to cases of contracts and gifts inter vivas, and does not apply in all its strictness to wills. The distinction between the rule affecting testamentary gifts and gifts inter vivas and contracts is well settled- by American and English courts, and the law held to be that a will is not invalidated by the mere fact that it was written by the attorney, agent, physician, priest or other confidential adviser of the testator, who is himself a beneficiary. It is in courts of equity alone that if a gift or contract is made in favor of him who holds a position of influence that courts cast-upon him the burden of proving that the transaction was freely conducted, as if between strangers; that the weaker was not unduly impressed by the natural influence of the stronger, or the inexperience overreached by him of more mature intelligence. But in case of a legacy under a will, to cast upon the legatee, by reason of the relations he sustains to the testator, the burden of showing how the matter came about, and under what influence or with what motives the legacy was made, what advice the testator had, or by whom given, in many, if not in most cases, could not possibly be discharged. The natural influence- of a person holding confidential relations with another may be lawfully exerted in his behalf to obtain a will or legacy, provided the testator thoroughly understands what he is doing and he is a free agent, and the volition of the testator, though biased and impressed by the relation in which he stands to the legatee, is not overborne and subjected to the domination of another.

Again, there is no presumption of fraud and undue influence because there were no such confidential business or social relations existing between Mr. Day and the testatrix as the law recognizes as having a wrongful or controlling influence upon testators, Mrs. Sheldon sometimes went to visit him, and he some years came east to visit her and other relatives. She had never lived with him, her home was with her niece in this state, so that she saw him seldom and only for short times; for these reasons the opportunity for that constant and intimate association, that silent but effective influence which sometimes operates upon the mind of a testator, did not exist. The only pretense that there were any confidential relations between them which might possibly be the basis of improper influence arises from the fact that Mr. Day had charge of her investments in Illinois, and paid to her such portions of the income as she desired.

-“ What drugs, what charms,

What conjuration, and what mighty magic’

the contestant claims Mr. Day made use of does not appear either from the evidence or the argument of his counsel other than from the facts above stated. To be the agent of another in some distant state for such a purpose does not of itself create those confidential relations which are influential in testamentary dispositions of property. It might with as much propriety be said that the directors of a savings bank, which receives and invests the money of its depositors, sustain such confidential relations to them that df a director drew a will for one of them with a legacy fe> himself, this fact alone would be presumptive evidence of undue influence and would require more than the statutory proof to admit the will to probate. A person who has legal business must ordinarily and sometimes of necessity employ an attorney, a person may be sick or injured and require the services of a physician or surgeon, in both of which cases there must of course exist relations of confidence and dependence which do not arise when one is simply the agent of another in regard to financial investments or business operations. In the one case the employer is wholly dependent upon the ability, advice and good judgment of his physician or attorney, while in the other the agent must conform to the wishes and judgment of his principal. In one cace the relation is a matter of necessity : in the other it is a voluntary matter. A mere agency to transact business where the principal takes little or no part in its management and which from its nature does not require intimate and confidential relations for its •performance, would not be likely to be the origin of; or be productive of, that fraud and undue influence which the law condemns in the making of wills; hence, we shall hold that the business relations existing between Mr. Day and the testatrix were not of that confidential character from which would ordinarily arise any legal- presumption of undue influence in the making and ■execution of Mrs. Sheldon’s will. But if it were admitted his business relations were confidential, so is that which an attorney sustains toward his client, yet one’s own lawyer has always been considered the most- proper person to write his will, and it is regarded as an unfavorable circumstance when he is passed by .and another person employed for that purpose, and a like reason would seem to make it extremely wise and proper and legal for Mr. Day to draw the will in question.

But the contestant also claims that the proof of the will and its •execution were insufficient to admit it to probate, for the reason that it was not shown that the testatrix gave directions for making the will, or that it was read to or by her before its execution. If this were sound law, the legislature of this state should be called together at once for the purpose of passing some statute by which •such evidence could be perpetuated when once a will has been ■executed. If such be the law, a large proportion of the wills now in existence could not be admitted to probate, because the person who drew the will, or those who may have been present at its -execution, or knew of the facts which the contestant insists must be proven in order to probate a will, might be dead or absent, or incompetent for many reasons to testify; in a word, the proof suggested could not be obtained. Such a law would compel a testator to provide some legal machinery, by which, at the proper time, it might be made to appear to the surrogate that he knew the contents of the will at the time of its execution even if no objections were filed against it, because the surrogate must be ■satisfied that a testator knows the contents, of his will before it can be probated. But in order to avoid the objection that the testator is not shown to have knowledge of the contents of his will, the law presumes that he is of perfect mind and memory; that he had legal capacity to make a will; that he had knowledge of, and assented to, all of its provisions; that all the facts necessary to its validity existed' at the time it was made; that its execution was valid, if the legal formalities are apparent upon the face of the instrument, or are proven before the surrogate; that in all respects it was designed, prepared and executed according to law. •

The signature of a testator to his will ought to be and is regarded by the courts as evidence that it is his deliberate act, and that he would not have placed his name to an instrument which does not express his testamentary intention, and from this fact alone he is presumed to have known its contents, to have understandingly executed the same, and been aware oí the legal effect thereof. By means of this legal presumption courts are enabled to admit wills to probate, thereby protecting the rights of heirs and legatees, and distributing the estate as the testator requested, which otherwise could not be done because of the inability of parties interested to prove, by living witnesses, or circumstances, that the testator knew anything about the contents of his will. Civilization makes legal presumptions necessary in courts to establish a fact, and in a proper case they are as satisfactory evidence as if witnesses had testified to the same.

In this case the witnesses to the will found the testatrix at her nephew’s house with the will drawn and in her hands and ready for its execution; it was then signed by the deceased in their presence, and attested by them in her presence. .It was spoken of by her as her will, and such she declared it to be, and it can hardly be supposed that a person of her intelligence and good health at that time would have executed a paper without knowing its contents, so that it may safely and legally be inferred that she was acquainted with the contents of the paper she signed. More than this, she had sent for these particular persons for witnesses to her will because they were old acquaintances and she preferred them to strangers, and so told them. This fact would indicate that she knew the contents of her will, and thoroughly understood what she was about to do, for the courts have held it to be a wise precaution, and a very proper thing to do, for a testator to invite his old and intimate acquaintances to witness the execution of his will.

But while the law indulges in the legal presumptions to which we have referred, the absence of incapacity, of fraud and undue influence are very apparent from the provisions of the will, its manner of execution and the relation of the testatrix to the legatees.

As she had no children, and her blood flowed in the veins of no descendants, she was under no legal or moral obligation to consider her relatives entitled to her bounty. Being of sound mind she had the undoubted right to dispose of her estate by will to whomsoever she chose. Her kinsmen had no vested rights therein and no interests to be protected by her. It is natural and reasonable that' the property of a father or mother should go by will or law to their children or descendants. The fact that the legislature of this state has arbitrarily said that the property of an intestate having no living ancestor, children or descendants, shall go to collateral relatives, did not compel the testatrix to recognize them as having an expectant right to her property which she was in duty bound to take into consideration in disposing of her estate. As she had been under no legal obligations to support them while living, she was under no moral coercion or duty to provide for them after her death. She therefore had the right to use her own judgment, consult her own preferences without regard to whether such disposition of her property as she might make would be approved or disapproved by others. The natural objects of a testator’s bounty are not always those whom the statute declares shall take the property of an intestate, but may depend upon the life they have lived; their habits, character, associations, their relations to, or association with the decedent, their wealth or their poverty, their success in business or their lack of it; their family and other social relations, their nearness to or remoteness from the testator’s residence, and various other circumstances which might naturally and properly cause a testator to make, apparently, an unequal distribution of his estate. Some one who has acted the part of a dutiful son or daughter, or friend, may naturally, reasonably, justly be the natural object of a testator’s bounty in preference to relatives. The lengthening and weakening ties of blood may be severed by time, by the birth and growth of affections which seek another channel for their possession and enjoyment, or by other causes. The structures which human hearts may rear in early life will sometimes go to decay and be abandoned for castles which other hearts may build, and the stepping stones to which, though unseen by the passer by, may echo a welcome tread to listening ears and waiting hands within.

It may be very plausibly argued that inequality of legacies among collateral heirs equally related is no evidence of fraud and undue influence in making a will; that a testator without ancestors or descendants living is not obliged to inventory his assets and carefully take into serious and thoughtful consideration the number of his distant relatives and weigh with nice precision the extent of the pleasure or benefits he has received from each, or the quantity of affection or gratitude each has shown him; that as against such relatives he has the right to indulge in such regard, such prejudices or caprices, such likes or dislikes, as he sees fit to entertain; that he may consider any one, or all, or none at all entitled to his property; that he may give to, or withhold from, them because of any motive or reason he may permit to influence him, without being legally subjected to the charge of incompetency, or of being unduly influenced, or of being required to apologize or explain to any one; that while such relatives have the legal, they have not the meritorious standing in courts which entitle their pretended claims against a testator’s will to the same critical and favorable consideration as if they were the children or descendants of the deceased, or were persons with whom he may have lived for many years; on whom he may have been dependent in sickness and health, and for whom he would be under those obligations which affection, gratitude, considerate -helpfulness and intimate daily associations ordinarily bring into existence ; so that in this case it seems entirely natural and reasonable that Mrs. Sheldon should give the larger portion of her residuary estate to her eight grand-nephews and nieces, many or all of whom had been born beneath her own roof, been her constant companions from babyhood to manhood and womanhood, in whose happiness and prospects in life she must have taken a more than kindly, a motherly interest, whose daily lives with their joys and sorrows', their tears and laughter, must have been a part of her own existence, coupled to and inseparable from it, that those with whom she had so long lived, and by whom she expected to-be watched and tended when

Age sat with decent grace upon her visage And worthily became her silver locks,”

and the dawn of another life was breaking over her horizon; that those by whose hands she expected to be buried, where the rising and the setting sun might cast its lights and its shadows alike, and. at the same time upon her grave and the home and children she had loved; that such as these should be the natural objects of her larger and more liberal bounty, rather than to others, whose devotion to her interests, her comforts, her happiness and the performance of all those kindly offices so dear to the aged, she had never observed.

So, too, it was natural and reasonable that she should devote a large sum to provide a burial place and monument for herself and for her niece, with whom she had long made her home. Both of these legacies are of a character and amount, $6,000 in all,, which she alone and not Mr. Day would be likely to.suggest, and in which she would ordinarily take a deep interest at her time of life. They are such as would not be put into her will if she had been under his control, ready at all times to do his bidding and yield to selfish and miserly suggestions from him in order that he might receive a larger portion of her property. Wiser than many who rely upon affection or friendship not to leave their gravesunmonumented and unremembered; knowing that wealth descended or devised is sometimes parsimonious of its gifts to the dead; aware that forgetfulness and oblivion often come quickly to the departed; with a judgment which made no mistake, she provided the means and directed that to be done which should make her name as enduring as the marble, or the granite whereon it should be written; although it might vanish from the memory of the living, thereby taking away all discretion which her executor might otherwise have as to the amount which should be devoted to burial purposes. This provision would seem to have been designed by one who, if fraud was attempted, disregarded it r if undue influence was exerted, overcame it; if greed and selfishness sought to give shape to this testamentary bequest they were powerless and harmless, thus leaving her in full possession' of that, judgment, that freedom and independence which testamentary capacity requires.

The absence of wrongdoing is also shown by the fact that if Mrs. Sheldon had .died intestate, Mr. Day’s share of her estate would have been $10,000, whereas by the will it is only $3,200, nearly seven thousand less than he would have had if there had been no will. If the testatrix was wholly under his control, willing to subscribe to any will which Mr. Day might impose on her, provided he was scheming and contriving to get as much of her property as possible, and had such influence over her that she would yield to any suggestion of his, it seems extremely probable that he would have so drawn the will as to increase, rather than diminish the amount he would have had if there had been no will, or would have drawn such provisions that the larger portion of the estate would have fallen to him. All that was done seems to have been to his disadvantage, and if he made use of fraud and undue influence to procure the will, he was not sufficiently shrewd to be a gainer by his own wrong.

. Her legacies to the contestant, his brother and sister, of $500 each, do not seem to be the result of anything save the ordinary reasons and influences which make discriminations among relatives of an equal degree. One nephew and niece live in California, the other in Aurora, Illinois, and the evidence does not disclose that they ever wrote to her or she to them, or that either nephew ever visited her but once in this state nor does it appear that they or the niece ever called upon her when at Aurora, or ever showed her the slightest attention whatever. It does not appear that either of them ever aided her in accumulating or caring for her property, or in any way assisted her or associated with her in such manner that she would be likely to have the same degree of attachment for them that she had for Mrs. Jones and her children, with whom she had lived so long and expected to live thereafter. And so of Mr. Day. For fifteen years he had acted as her agent in managing her property ; there were almost yearly visits between them, and she undoubtedly felt that for his care of her estate, and his success in largely increasing it, over and above her support, he was entitled not only to a considerable remuneration for his services and his faithfulness to her interests, but to a larger share of her residuary estate than the Seaman heirs, to whom she was not under the slightest obligations for anything they are shown to have done for her either in a business way or socially. It is not improbable, but quite possible, that this lack of recognition of their old aunt either by letters, or visiting or otherwise, if such was the fact, may have led her to think that while she remembered them in her will, the legacies were quite commensurate with any services they had rendered, or any attention they had shown her, and that for these reasons they were not entitled to share equally with those who nearly all their lives had contributed their services and their society to her, and made their days and years subordinate to her claims upon them for all that her age, her health, her comfort, her needs and her happiness required. Thick waters show no images of things, and it may be when she thought of disposing of her property, she saw not her image and superscription reflected upon one of the ancestral streams.

Hothing would seem more natural or business like, than for Mrs. Sheldon to have Mr. Day draw her will, as he was familiar with her property, had transacted her business and knew her relations with all her heirs. It would have been unnatural and contrary to the ordinary manner of doing such business that she should have gone to a stranger under such circumstances to have her will drawn. It is sometimes regarded as evidence of incapacity, and sometimes that fraud and undue influence exist, when a testator abandons those in whom they have always had the utmost confidence in the transaction of their legal and other business, and seek among strangers for that advice and assistance which

is sometimes required in drafting wills. For the same reasons it was proper she should name Mr. Day as the executor of her will.

A decree will be entered admitting the will of Lorenza M. Sheldon to probate.


source: Caselaw Access Project

author: Earl, J.

license: Public Domain

text:
    Rufus L. Todd, Ex’r, App’lt, v. The Union Dime Savings Institution, Resp’t.

      (Court of Appeals,

      Filed October 6, 1891.)

    Vendob and ptjbchaseb—Title—Lack oe seal on deed.
    In an action to recover back moneys paid on a contract for the sale of real estate on the ground of defect of title, on the ground that the record of a deed in the chain of title showed a dash after the grantor’s name instead of a seal, where it also appeared that the deed was afterwards rerecorded when it was represented as being sealed, Held, that the evidence on the second trial was not materially different from that on the former trial as to the existence of a seal on the deed when delivered, and that the decision, on the former appeal to this court should control.
    Appeal from judgment of the supreme court, general term, first department, affirming judgment in favor of defendant.

      Edward S. Rapallo, for app’lt; Wm. H. Arnoux, for resp’t.

       Affirming 37 N. Y. State Rep., 960.

   Earl, J.

This action was brought to recover money paid by the plaintiff’s testatrix upon the purchase price of land in the city of New York, on the ground of a defect in the defendant’s title. The land formerly belonged to Mrs. Ferris, and in December, 1870, she conveyed it to Griffith Rowe, and the title came from him to the defendant through sundry intermediate conveyances. The only defect in the title alleged is that the deed from Mrs. Ferris was shown by the record in the register’s office to have been at the time of the record without seal. The deed appears to have been lost and it was not produced at the time of the attempt to pass the title, or at the trial.

The action has been twice tried. Upon the first trial the plaintiff recovered judgment, which was reversed in the second division of this court 118 N. Y., 337; 28 N. Y. State Rep., 697. The action was again tried, and Judge Barrett, who presided at the trial, said in his opinion, that “the testimony is rather stronger in support of the defendant’s position with regard to the seal upon the deed in question than it was upon the first trialand Judge Yan Brunt upon the last appeal to the general term said r “ The facts are substantially the same as on the previous trial ;’r and so we think.

We cannot review the decision of the second division of this court. What was there decided is the law of this case.' The main facts are stated in the opinion of Bradley, J., there written, and they need not be re-stated here. • He held that there was no' evidence whatever that the deed of Mrs. Ferris was without seal when it was delivered to Mr. Rowe, and on that ground he reached the conclusion that the judgment ought to be reversed.

Upon the first trial Mr. Arnold, who was counsel for the defendant at the time it made a loan upon the property, about three years after the deed to Eowe, testified that finding that the record disclosed that the deed was at the time it was recorded without a seal, he sought for and obtained the deed, and found that there was a seal thereon; that he discovered nothing on the deed indicating that the seal had been placed there subsequently to the delivery of the deed; that he then caused the deed to be again recorded with the seal thereon, and that he then passed the title. His evidence, when properly read and understood, was substantially the same on the last trial. He and other witnesses testified that when a deed was left at the register’s office, it was first examined to see if it was in proper form, properly executed, acknowledged and sealed; that if there was no seal, a blue pencil mark, not easily erased, was drawn over the place where the seal should be, and the words “no seal” were written with the same pencil upon the deed, and that the parties interested were notified of the defect; that if the deed was found to be in p.roper form and properly executed, it was placed upon file to await its turn for record; that it happened sometimes that before the record the seal would rub or fall off, and that when it came to be recorded the recording clerk finding no seal would, in the record, instead of the letters “ L. S.,” place a dash.

The original record of the deed to Eowe was found with this-dash, indicating that at the time of the record there was no seal upon the deed. Arnold testified that when he examined the record he found the dash instead of the letters “L. S.,” and that he refused then to pass the title for his client, the defendant; that he required the production of the original deed, that he might see whether there was some mistake in recording it, and whether there was a seal upon it, and that the deed was found and' produced.

Upon the first trial he testified that there was a seal upon it, and that he then caused it to be again recorded, and then passed the title. There is not in this record in his evidence the least indication that upon this vital point there was any change in his-evidence, that his meaning had in any way been refreshed, or that there was "any inconsistency whatever between his evidence upon the two trials. On the contrary, the trial judge, who was familiar with his evidence upon the first trial, stated in his opinion that the testimony for the defendant as to seal was stronger than it. was upon the first trial. Yet there was either some confusion in his evidence upon the last trial, or it was improperly and carelessly reduced to writing by the stenographer. It can be so read now as to show that when he obtained the deed he found that there was no seal upon it, and no • indication that there had ever been a seal upon it, and yet, if we read it in that way, we have the strange inconsistency that he first refused to pass the title because of the indication in the record of the absence of the seal, and that upon the production of the deed without any seal, he at once became satisfied with the title and passed it. It is clear that the evidence should not be so read. He testified: “ They then produced to me the original deed of Catharine A. Ferris, which I recognized as the original deed because it had at the bottom the statement of the recording, and it was signed by Catharine A. Ferris, and there was no seal on it, and not the slightest indication of any kind that it ever had been there. There was nothing whatever upon the deed in blue pencil, a mark or dash of no seal, or anything to indicate there was any defect. I would not have taken it without a reacknowledgment if there had been. There was no impression to show that there had been any. There was Catharine A. Ferris’ signature there. I then said this will have to be recorded.”

On his cross-examination he testified, “ There was no ‘L. S,’ there, and because there was no ‘ L. S.’ there, I demanded another deed, or the production of the original deed. I told him I would not pass the title unless there was a deed produced to me from Catharine A. Ferris, either the original of that deed which I found ■on record without a seal which would show there was a seal upon it, or a new deed which would supply the place of the deed which was recorded, in order to pass the title. I merely stated those were my objections to the title. I will not pass this unless certain things will be supplied. I cannot recollect who produced the ■deed. It was produced before I passed the title. I think it was produced in a few days after I made my objections. I scrutinized the deed very carefully. I examined it specially. I looked at the seal to see if there was any indication that a seal had been there. There was not the slightest indication.” Now what did the witness mean to testify that he discovered as to the seal when he examined the deed ? Cleai’ly that he did not find the words “ no seal ” upon the deed written with a blue pencil, and did not ■find any blue pencil marks upon it, or any indication that these words or the blue marks had ever been upon it. He found the ■seal there, and no indication that any seal had been there before, ■and he became satisfied that the seal he then saw was the original ■seal which had been overlooked or by mistake omitted in the ■recording. Any other construction of the evidence would convict the witness of the greatest folly and misconduct in passing the title for a large loan, and also of the most palpable contradiction without any explanation of his evidence upon the first "trial upon the turning point in the case.

We are, therefore, of opinion that there is no material variation in the evidence as to the seal from that given upon the"first trial, ■and that the decision upon the former appeal to this court should control us.

Upon the first appeal the case came here with a finding against the title. It now comes here with a finding on all the evidence in favor of the title. A purchaser is not entitled to demand a title absolutely free from all suspicion or possible defect. He may' ■claim a marketable title, and that means a title which a reasonable purchaser, well informed as to the facts and their legal bearings, willing and anxious to perform his contract, would in the exercise ■of that prudence which business men ordinarily bring to bear -upon such transactions, be willing to accept and ought to accept.

The judgment should be affirmed, with costs.

All concur, except Finch, J., absent.


author: Peckham, J.

text:
    Frances E. Demarest, by Guardian, App’lt, v. Hugh J. Grant et al., Resp’ts.

      (iCourt of Appeals,

      Filed October 6, 1891.)

    1. Corporations—Pleading—Evidence.
    This action was brought against defendants, as a joint stock company, to recover lor personal injury sustained at a toboggan slide conducted by them. Defendants claimed that they were merely stockholders in a company incorporated under the laws of West Virginia, and offered in evidence the certificate of incorporation and the Code of said state, which were admitted,although objected to as the incorporation had not been pleaded in the answer. Held, no error, as such defense, if operative, showed that there had never been any liability and was admissible under the defendants’ denial of any liability as set out in the complaint.
    2. Same—Foreign—Validity.
    Defendants introduced in evidence the certificate of incorporation of a. company in which they held stock, signed by the secretary of state of West Virginia, by the statute of which state corporations can be formed which may hold their meetings outside of that state, the directors whereof must be residents of that state unless a special resolution was passed permitting persons of any other state to be directors. The directors wore all residents of this state. And evidence was given sufficient to show a user thereunder. It appeared that the papers required by the statute were presented to the secretary of state, who thereupon executed and delivered the certificate in question. Held, that a failure to adopt a by-law at the first meeting permitting the election of non-resident directors, and the election, of non-resident directors at such meeting, or a subsequent one, in the ab•sence of such a by-law, would not ipso facto dissolve the corporation; that such corporation was a valid one under the laws of West Virginia and entitled to recognition here.
    Appeal from judgment of the New York common pleas, general term, affirming judgment dismissing complaint

      Seaman Miller, for app’lt; Wales F. Severance, for resp’ts.

       Affirming 32 N. Y. State Rep., 675.

   Peckham, J.

The plaintiff alleged in her complaint that the defendants were a joint stock company doing business in Hew York city under the name and style of “America’s Winter Carnival Company.” It was further alleged that they were the owners of the toboggan slides used at Fleetwood park, in the city of Hew York, and that such slides were under their management and control. The plaintiff also alleged that she had, while riding on one of the toboggans upon one of the slides in the possession and management of defendants, been accidentally and seriously injured through the carelessness of defendants or their employes, and she demanded judgment for $25,000 damages. The defendants, by answer, denied that they were a joint stock company and also denied the allegations that they were the owners of the toboggan slides mentioned or that they were under their control, and they denied all allegations of negligence, either on their own part or on that of any of their employes.

Upon the trial the plaintiff gave no evidence as to the defendants being a joint stock association, but endeavored to prove a joint or partnership liability of defendants, based upon the allegation that the grounds where the accident occurred were owned by the Hew York Driving Club and that in the fall of 1887 the grounds were leased by it to the defendants for the purpose of putting up these toboggan slides.

The evidence tending to show even a prima facie liability on the part of the defendants is of the most meagre character. We will assume, however, that the plaintiff proved enough to call upon the defendants for an answer to her cause of action.

This answer was in brief that the defendants were nothing but individual members of, and stockholders in, an incorporated company which had hired the grounds, owned the toboggans and operated the slides, and that whatever liability there was, if any, in favor of the plaintiff, was borne by the incorporated company and not by the individual stockholders therein.

To prove this defense the counsel for defendants offered in evidence a certificate of incorporation of the America’s Winter Carnival Company, as organized under the laws of West Virginia, and at the same time he offered the Code of West Virginia in evidence. (

The certificate and the Code were objected to by the plaintiff’s counsel on the ground that there was no allegation in the answer of the existence of a corporation or. the incorporation of the America’s Winter Carnival Company, and that it was necessary to plead such fact before defendants could avail themselves of the defense. The certificate was further objected to as incompetent, immaterial and illegal.

The objections were overruled and plaintiff’s counsel duly excepted. .

The first ground of objection, as to the necessity of pleading the defense founded on the incorporation, was properly overruled. It was not a defense necessary to be pleaded. It went to the root of the cause of action, and tended to show there never had been any liability on the part of defendants. It was not an affirmative defense vyhich in substance admitted an original cause of action, but showed facts which operated as a satisfaction thereof. It was not like a defense of payment, or a release, or an accord and satisfaction. If operative, it showed there had never been any liability, and hence it was admissible under the defendant’s denial of any liability as set out in the complaint. The certificate when read in evidence showed that it was signed by the secretary of state of West Virginia and that it was issued under the great seal of that state, and in it the secretary declared that the corporators therein named and their successors and assigns were from the 12th day of December, 1887, until the 1st day of' January, 1935, a corporation by the name and for the purpose set forth in the certificate.

It was subsequently proved under objection and exception that this company was at the time of the happening of the accident in possession of the toboggan slide in question and was the owner thereof.

As to the second ground of objection taken by plaintiff’s counsel to the introduction of the certificate, that it was incompetent, immaterial and illegal, we may assume that it raises the question of the validity of the incorporation itself, and of its sufficiency as a defense. Upon this issue a few additional facts must be stated.

The Code of West Virginia, which was received in evidence, shows that a corporation of the kind herein spoken of could be formed under the general laws of that state by five or more persons signing an agreement to the effect stated in the statute, and by the payment by each corporator of at least ten per cent of the p>or value of the stock subscribed for by him. Affidavits on the part of at least two of the corporators, stating necessary facts, were also required by the statute. It is further therein provided that the agreement, acknowledgment and affidavits are to be delivered to the secretary of state, and he issues to the corporators his certificate, under the great seal of the state, declaring, among other things, that they, and their successors and assigns, are a corporation from that date until a time therein specified. The effect of the certificate is provided for by the statute, which says that the corporators, and their successors and assigns, shall from the date of the certificate until the time designated therein be a ■corporation, and the certificate shall be received as evidence of :such incorporation. The statute provides for the holding of meetings of the corporation, including the first general meeting for purposes of organization, out of the state; and it also provides for keeping the principal office of the corporation in any state •or territory of the United States, and it permits the corporation to adopt by-laws and to prescribe the qualifications of directors, and if it be not otherwise provided, every director must be a stockholder and a resident of the state of West Virginia. The certificate in question in this case embodies an agreement among five corporators, by which they agree to become a corporation by the name of America’s Winter Carnival Company, for the purpose of leasing premises for amusements, among others for toboggan slides, and they agree that its principal office shall be in the city of Hew York, and in this agreement they recite that they have subscribed a certain sum (named therein) to the capital of the company, and have paid ten per cent thereof, and that the capital so subscribed was divided into shares of $100 each, which were held by them.

The names of the corporators were signed to the agreement, and their residences were therein stated as being in the city of Hew York. The agreement properly signed and acknowledged was presented to the secretary of state of West Virginia, and a certificate of incorporation duly issued as already stated. From the evidence it is clear upon the question of user that there was a person who acted as president of this company under a so-called election, although it does not appear how or when he was elected. That person was a resident of Hew York. There was also a person who acted as treasurer of the company, and he also resided in Hew York. The treasurer kept a check book and made disbursements for the company by check, and received what money came "to it, and put it in the bank. There were no by-laws. The treasurer once had charge of the stock book of the company, though at the time when he was sworn on the trial he did not know where it was, and he supposed the company was not then in existence.

Admission to the grounds occxipied and possessed by this company was charged and the money that was paid for admission to the toboggan slides went through the treasurer’s hands. No one could get in without paying toll, excepting members of the Driving Olub.

The president and vice-president were directors, as was also the treasurer and one other stockholder. This company was in ¡possession of the toboggan slides when the accident occurred, “ and no other concern, or individuals, or anybody else.” The defendant Grant said he had stock in the company, which he paid for, and that he refused to go into the business at all, unless under an incorporation. The books of the company were not produced, and it did not appear what if any books had been kept by it, other than the stock and check books spoken of by the treasurer.

This' is substantially all that appears in regard to user by the corporation, and the counsel for plaintiff upon this evidence moved to strike out the certificate of incorporation and all the testimony relating thereto on the ground, “ that the directors of the concern were residents of New York, and that under the statute of West Virginia it was necessary, in order that the corporation be duly incorporated, that the directors of the concern should be residents of West Virginia, unless a special resolution were passed by the corporation permitting persons of any other state to be such directors.” The motion was denied, and thereupon, on motion of counsel for defendants, the complaint -was dismissed because no cause of action was proved against the defendants personally. There was sufficient evidence of user to make it clear that the company had accepted its charter with all its privileges and liabilities, whatever they might be. This question of user, although not specifically taken in the above objections, has been urged upon us here by the counsel for the appellant, and we think it well enough to say what we have upon the subject. As to the other points which have been actually raised by the motion to strike out the certificate, we think a proper disposition was made of them by the court below.

By the statute of West Virginia the incorporation precedes the election of directors. After the incorporation and subsequent to the issuing of the certificate thereof by the secretary of state, the corporators named therein or a majority of them are directed by statute to appoint a time and place for holding a general meeting of the stockholders to elect directors, make by-laws and transact-other business. A failure to adopt' a by-law at the first meeting, permitting the election of non-resident directors, and the election of non-resident directors at such meeting or at a subsequent one, in the absence of a by-law permitting it, would not ipso facto dissolve the corporation or take away its corporate rights or franchises. The company would still remain a legal entity notwithstanding its failure to adopt the proper by-law or in its absence to elect resident directors. The counsel for plaintiff was therefore in error in his statement as to the law of West Virginia.

We come then to the question whether upon the facts already set out this corporation was so far valid as to be entitled to recognition as such in the courts of our state.

The plaintiff says it clearly appears that the corporators thereof were citizens of Mew York and the corporation was formed by them in the state of West Virginia for the sc’e purpose of doing business out of that state and in the state of Mew York, in which latter state its principal office was also to be located. These facts, he says, conclusively prove the invalidity of the West Virginia corporation so far at least as this state and its citizens are concerned.

If mistaken in that view, he still urges that such facts render it a question for the determination of the jury whether the incorporation was attempted to be made in good faith, or as a mere evasion, and in fraud of the laws of West Virginia or of Mew York.

He claims, if the jury should find the purpose was one of (evasion, that in such case the incorporation would furnish no. -defense and the plaintiffs would be liable as individuals.

We are quite clear the case should not be submitted to a jury to pass upon the question of evasion as matter of fact. If it were, we might find different juries coming to different conclusions upon the same facts, and we should have a corporation, or no corporation, according to the view a jury might take of such facts. One plaintiff might prove the evasion to the satisfaction of one jury, and another plaintiff fail on precisely the same facts, and thus we should have a corporation as to A., and no corporation as to B., and the same question constantly arising as often as the corporation or its members were sued. This would be intol•erable. It must be a corporation as to all persons with whom it has business dealings, or as to nana In other words, it must be •a question of law instead of fact The courts of any country recognize foreign corporations through what is termed national or .state comity. Merrick v. Van Santvoord, 34 N. Y., 208; Bank of Augusta v. Earle, 13 Peters, 519; Christian Union v. Yount, 101 U. S., 352, but whether such recognition shall be given must be decided by the courts of the country where the corporation seeks to do business. In our state, as in others, it is a question of domestic policy, and what that policy is must be determined by an -examination of our own legislation. If we find any direct enactment upon the subject, it is our duty to obey it, and in its absence we must determine the question with reference to our' general legislation and to the circumstances which surround us as a great and growing commercial community, having need of and ■employing large amounts of combined capital, and for whose prosperity and growth it is of the utmost importance that such capital should have the greatest facilities extended it for useful employment, with reasonable and proper personal exemptions :from liability.

We can find no reason for a domestic policy that should ex-elude from recognition by our courts foreign corporations generally. It may be safely said there can be no such domestic policy at the present day in a civilized state. The question then arises,, shall we go behind the certificate of incorporation or charter of a, foreign corporation for the purpose of inquiring under what circumstances and for what purpose outside the charter it was incorporated ? This can only be claimed on the ground that the charter was obtained in fraud or evasion of the laws of the state which granted it, or for the purpose of evading the provisions of our own laws.

It is plain there was in regard to the procurement of this charter no fraud upon or evasion of the laws of West Virginia, even, if we' should admit that such fact would constitute good ground, for our refusal to recognize such corporation, although no proceedings had been taken to annul its charter in the state which, granted it. This point is by no means clear.

However that may be, it is impossible not to see that the state-of West Virginia has adopted a policy which favors the formation of corporations within her borders and pursuant to her laws, while the members and officers may be non-residents and where the principal business of the corporation is to be performed outside of the coniines of the state.

The agreement which was signed by the corporators in this case- and duly acknowledged and presented to the secretary of state of West Virginia clearly showed that the corporators were residents of New York, and that the principal office of the corporation was to be in New York, and the inference was a fair one that the principal business of the corporation was also to be conducted in New York. The secretary of state, to whom the papers for the organization of the corporation were presented, was compelled to pass' upon and decide the question whether they conformed to the laws-of West Virginia before he received or filed them, or gave the certificate of incorporation. He did pass upon the question and did thereupon issue the certificate of incorporation under the great, seal of the state and attested by his official signature.

So far as the laws of West Virginia are concerned it is plain that the corporators thereupon became a corporation, and in that, state the certificate was by the laws thereof evidence of the existence of such corporation. There was no fraud or evasion of the law of West Virginia in thus becoming incorporated. The references to her laws above made show conclusively that the formation of corporations thus composed and for the purpose of doing their principal business outside the limits of that state was contemplated in those laws. This corporation was beyond all question legally incorporated and entitled to recognition in the state of West Virginia. Unless therefore it can- be said that the acts of our citizens in procuring an incorporation under the laws of West. Virginia, for the purpose of doing business here, were as matter of law a fraud and an evasion of our own laws, and hence in conflict or inconsistent with our domestic policy, such foreign corporation is entitled to recognition and protection in our own tribunals. Merrick v. Van Santvoord, supra.

It is urged that such acts are thus inconsistent and in conflict with our policy, because citizens of our own state are in that way enabled to evade our own laws relative to home corporations and to avoid personal liability by incorporating under the laws oj. foreign states which may be more favorable to members than are our own laws. I think when. this claim is examined in the light of our own legislation it will be seen that there is no substantial basis for it to rest upon. An examination of our laws shows that it is, and for many years has been, the policy of this state to enlarge the facilities for the formation of corporations. General laws are on our statute books for the formation of corporations of almost every conceivable kind, and under some one of them a corporation of the kind mentioned in "this case ' could readily be formed. The freedom from personal liability would be as great and could be as easily attained under our own as under the laws of West Virginia. The security of the creditor would not be substantially greater in the case of the domestic, than in that of the foreign corporation. In the latter the creditor has the remedy by attachment and he can obtain about as easy access to its property as if it were domestic instead of foreign.

There' is really nothing to evade by incorporating under a foreign law. Ho harmful results flow to a creditor or to the community here by such incorporation. Where the corporation formed under another jurisdiction comes here to do business of a kind which we permit to be done by corporations, and where our laws'provide for incorporating individuals for the purpose of doing that business, it is difficult to see how the terms “ evasion” and “fraud” can be properly applied to acts of our citizens whereby they obtain' incorporation in another state. When they come in our state to do business, they must conform to our laws relating to foreign corporations, and comply with the terms laid down by us as conditions of allowing them to transact business here. In the case of many kinds of corporations, such conditions have already been imposed by our laws, and if there be any kind where none is imposed, it is conclusive evidence that up to this time the legislature has not thought it conducive to the true interests of the state and its citizens to impose them. I do not intimate that it is necessary for a state to expressly by statute exclude foreign corporations from acting within its jurisdiction. The policy of the state may exclude them, and that policy may be clearly established by a reference to the general legislation of a state. I find none such in the laws of this state.

It has been urged that the easy way which our laws provide for forming corporations is itself a reason why we should not recognize as a corporation those of our own citizens who have gone to another state for the purpose of incorporating themselves under tbs laws thereof, to do business- in our own state as such corporation.

We think there is very little force in the argument The public policy which we see in our own state, as evidenced by her laws upon the subject of the formation of corporations, is one which looks to their ready and easy formation as a means of transacting business with an accumulation of capital, and an exemption from personal liability, to the largest extent consistent with reasonable. supervision by the state. The facilities for incorporation offered by this state are not the result of any desire to promote the formation of corporations here as against their formation in other states. They are offered because of a policy on our part which urges upon the state the propriety of furnishing them as one means of controlling the business done by them and keeping it within our borders.

If in any particular case it is thought by those interested in the matter that the business can be done in our own state and by our own citizens with greater facility under the form of a foreign corporation than under that of a domestic one, there is no public policy which forbids its transaction under such form. The supervision of a foreign corporation by this state may easily be exercised by imposing terms as a condition of permitting it to do business here. The absence of any such terms in our legislation forms no reason for refusing to recognize the corporation. The power rests with the legislature to say whether any, and if so what, terms shall be imposed upon such corporations as a condition of granting them permission to do business here. Those terms can only 'be imposed by the legislature, and in their absence our courts ought not, merely on that account, to refuse to recognize a foreign corporation. In the absence of legislation our courts must either refuse absolutely, or else they must recognize the right of such corporations to come to this state and do business here. The courts cannot themselves impose terms or conditions.

The case of Montgomery v. Forbes, 148 Mass., 249, is not necessarily in conflict with these views. In that case the defendant, a resident of Massachusetts, went .to Mew Hampshire and there executed and filed certain papers for the purpose of forming a corporation in that state, for the reason that its tax laws were more favorable than those of Massachusetts and because he desired to avoid personal responsibility. The whole business was to continue to be done in Massachusetts and these steps were taken in' order to avoid the laws of that state.

The court held that the defendant had not complied with the terms of the Mew Hampshire act and hence had never become incorporated. There was no tribunal in Mew Hampshire to which the papers in regard to a proposed corporation could be submitted and which had power to decide whether the law had been com plied with, and upon compliance to issue a certificate of incorporation. But all persons filed their papers at their peril. If the question ever arose as to a compliance with the law, it had to be decided by comparing the papers with the statute. The Massachusetts court did that and decided that the defendant did not comply with the Mew Hampshire statute and that no corporation had ever been formed.

In Hill v. Beach, 1 Beasley, 31, the court of chancery of Mew Jersey, in a proceeding for an accounting, said that certain persons who had entered into an agreement with a view to form a company to do business in New Jersey, and who thereupon undertook to form themselves into a corporation under the general act of this state relative to the -formation of manufacturing corporations, passed in 1848, and who complied with the forms of such act, would nevertheless not be recognized by the courts of New Jersey as a legally constituted corporation. The chancellor said they were not a foreign corporation, “ for it is perfectly manifest upon the face of their proceedings that their attempted organization under the general law of New York respecting corporations was a fraud upon the laws of that state.”

In what respect it was a fraud does not appear, unless it were one because the corporators were residents of New Jersey and intended to do business in that state under the New York incorporation. From what has already been said, we do not think those facts make out a case fora refusal to recognize a corporation legally constituted and existing in the foreign state.

We recognize corporations formed by the citizens of a foreign state under its laws for the purpose of doing business, among other places, in our own state. Where is the essential difference between such a corporation and one legally incorporated under such foreign state for the same purpose, but the members of which are citizens of our own state? Whose rights are jeopardized more in the case where members of the corporation aré our own citizens than where they are citizens of the foreign state ? What enlightened policy is violated by the recognition of the foreign corporation composed of residents of this state, which would not also and equally suffer by the recognition thereof when composed of non-residents? And yet beyond all cavil our policy is to recognize the latter.

The truth is foreign corporations are not properly to be regarded with suspicion, nor should unnecessary restraints be imposed upon their doing business in our midst. They carry no black flag, and the policy of all civilized nations is to grant them recognition in their courts. It seems to me that every reason which urges upon us the recognition of foreign corporations organized with power to do business in our state and composed of citizens of the foreign state, is equally potent when the foreign corporation is composed of our own citizens. It has always been supposed that a state should at least deal as liberally with its own citizens as with those of foreign states. If therefore we permit foreign citizens to come within our limits in the form of a foreign corporation organized with power to do business here, and recognized by us, why should we not permit our own citizens to avail themselves of the like privilege? If we impose terms and conditions upon foreign corporations as such doing business here, those same terms and conditions still and equally apply to a foreign corporation when composed of our own citizens. Why should they not be placed at least upon an equality with the foreign citizen ?

The case of Land Grant Railway, etc., Co. v. Board County Commissioners, etc., 6 Kan., 245, simply holds that the courts of that state will not recognize a corporation formed under the laws oí Pennsylvania, where the corporation is not itself permitted to do business in the state which grants its charter. It was also stated in the above case that the charter if enacted by the Kansas legislature would have been void as contravening two constitutional provisions. In such a case it would scarcely be expected that a foreign state would grant greater recognition and privileges than were accorded by the state under which the corporation was formed. It might readily be supposed that no rule of comity compelled the recognition of a foreign corporation formed to do acts which are prohibited by the laws of the state to its own citizens or corporations.

It is upon this principle that Empire Mills v. Alston Grocery Co. was decided by the court of appeals of Texas, and reported in the Railway and Corporation Law Journal of April 11, 1891, vol. 9, Ho. 15, and to which our attention has been called. The legislature of Texas prohibited the operation of corporations in that state of the character of the Iowa corporation, and the court held that comity did not extend to the recognition of such a corporation by the courts of Texas.

After a careful examination of the case, we have come to the conclusion that the defendants sufficiently proved the existence of a valid corporation under the laws of West Virginia, and that there was nothing in the other facts proved which should cause us to reifuse recognition of that corporation.

The result is that the complaint was properly dismissed, and the judgment to that effect should be affirmed, with costs.

All concur, except Finch, J., absent