of the one part, and the Duke of Beaufort and several other persons on the other part, the duke and his associates undertook to do the work in consideration of being allowed to take the tolls. By the 11th article of the agreement it was provided that "no survivorship shall at any time take place between the said parties and undertakers; but if any or either of them shall happen to die, the share or part of such so dying, shall descend and go to the heirs and assigns of the party or parties so dying." In Buckeridge v. Ingram, decided in 1795, 2 Ves. Jr. 651, the question was directly made whether these shares were personal or real estate, and it was decided that they were real estate and subject to dower. The master of the rolls held that the right to take tolls was an incorporeal hereditament arising out of realty, and was therefore a "tenement." And he remarked: "I have no difficulty in saying, that wherever a perpetual inheritance is granted, which arises out of lands, or is in any way connected with, or, as it is emphatically expressed by Lord Coke, exerciseable within it, it is that sort of property the law denominates real." The principle of these cases was followed, and possibly extended, by the supreme court of Connecticut in 1818, in the case of Welles v. Cowles, 2 Conn. 567, in which it was held that shares of an incorporated turnpike company are real estate. The right to the tolls, said the court, "is a right issuing out of real property, annexed to and exerciseable within it; and comes within the description of an incorporeal hereditament of a real nature, on the same principle as a share in the New River, in canal navigations and tolls of fairs and markets;"' citing Drybutter v. Bartholomew, 2 Peere Williams 127, Habergham v. Vincent, 2 Ves. Jr. 232, and The King v. The Inhabitants of Chipping Norton, 5 East 239. And in answer to the argument that the individual stockholders had only a claim on the company, and not upon the realty, and that this must be of a personal nature, the court said: "But the stockholders, as members of the company, are owners of the turnpike road; and it is in virtue of this interest that they have their claims for the dividends, or their respective shares of the toll. It is not a mere claim on the corporation." This decision was recognized as law in 1822, in a suit between the same parties, 4 Conn. 182, though the question was not expressly made. In 1835 the supreme court of Pennsylvania held that "a toll bridge erected by two individuals across a river between their lands by legislative authority is real estate." The court said that the right was "not only a right arising out of the soil, but so far as the abutments of the bridge are concerned, it is the soil itself." Hurst v. Meason, 4 Watts 346. It is to be observed, however, that it does not appear that the builders were incorporated. In Price v. Price's Heirs, 6 Dana 107, the court of appeals of Kentucky, in 1838, held that the stock in the Lexington and Ohio Rail road Company is real estate. Without citing any adjudicated case, the court came to a conclusion which is thus expressed: "The right conferred on each shareholder is unquestionably an incorporeal hereditament. It is a right of perpetual duration, and though it springs out of the use of personalty, as well as lands and houses, this matters not. It is a franchise which has ever been classed in that class of real estate denominated an incorporeal hereditament.” On the other hand, the supreme court of Massachusetts, in 1798, in Russell et al. v. Temple and Others, 3 Dane's Abr. 108, held that shares in incorporated bridge and canal companies are personalty. The case was between the widow and heirs of Thomas Russell, the former contending that the shares were personal property, and that, consequently, she was entitled to a distributive portion of them, and the latter insisting that they were realty, and that, therefore, she had but a dower estate. The question was very fully discussed, and was decided (says Professor Greenleaf in his edition of Cruise) “upon great consideration.” "For the heirs it was urged that these shares were real estate, because, it was said, the estates were real in the corporations, and that if the estates in the corporation were real, the estates of the individual members in them followed their nature and were real, and that the frequent declarations of the legislature declaring such shares personal estate, at least show a doubt that when one has a right to receive rent he has only a right to receive a sum of money, yet it does not follow that his estate is not real estate out of which his rent issues." For the widow it was argued that the shares were personalty, because the estate (in the bridges, canals, towing-paths, wharves and lands) "can only exist in the corporation, which alone can acquire it, alone be seized or possessed of it, alone pass it away, manage or repair it, and so must hold it entire, and that the corporation is a moral person to all purposes of property. Its tenure is to their successors, or to their successors and assigns. The estates can never vest in or be divided among the individual members to hold as tenants in common, etc., in their private capacities. Only the corporation can possess the estate, and that only by possessing the charter, and only the corporation can be taxed for it on common-law principles, and on these can it alone be taken in execution for the debts of the corporation." "That the share is personal estate, though the corporation hold real estate, for the individual member has no estate, but only a right to such dividends as the corporation from time to time assigns to him. He is unknown in the grants made to it, and he can not grant any part of the estate; nor can he be taxed for it but by statute law; nor can any private member of a corporation be distrained for a public concern of it; his only remedy for his dividend is case in assumpsit, or an action on the case for a wrongful refusal or neglect to pay or allow him his part of the profits." The judgment of the court was, as I have stated, that the shares were personal estate. "The principal reason of the decision," says Dane, "appears to be because the court considered that the individual "Shares in the property member, or shareholder, had only a right of action for a sum of money, his part of the net profits or dividends. And so the law has been held to be since this decision was made.' In his edition of Cruise, Greenleaf says: of a corporation are real or personal property, according to the nature, object and manner of the investment. Where the corporate powers are to be exercised solely in land, as where original authority is given by the charter to remove obstructions in a river and render it navigable, to open new channels, etc., to make a canal, erect water-works, and the like, as was the case of the New River water, the navigation of the river Avon and some others, and the property or interest in the land, though it be an incorporeal hereditament, is vested inalienably in the corporators themselves, the shares are deemed real estate. Such, in some of the United States, has been considered the nature of shares in toll bridge, canal and turnpike corporations by the common law; though latterly it has been thought that railway shares were more properly to be regarded as personal estate. But where the property originally entrusted is money, to be made profitable to the contributors by applying it to certain purposes, in the course of which it may be invested in lands or in personal property, and changed at pleasure, the capital fund is vested in the corporation, and the shares in the stock are deemed personal property, and as such are in all respects treated. In modern practice, however, shares in corporate stock, of whatever nature, are usually declared by statute to be personal estate." I Greenleaf's Cr. Dig. 39, 40. In support of this statement, Mr. Greenleaf cites the cases we have already noticed, and some others that require consideration. One of the most important of these is Bligh v. Brent, 2 Y. & C. Exch. Rep. 268, 294. It involved the question whether the shares in the Chelsea Water-Works Company were realty or personalty. The act of incorporation left the question open, as it contained no declaration upon the subject. The court reviewed the cases bearing upon it, and came to the conclusion that the shares were personalty. This decision was afterwards, in 1838, spoken of with approbation in Bradley v. Holdsworth, 3 M. & W. 422. In the latter case the question was whether shares in the "London and Birmingham Railway" might be sold by a verbal contract. the part of the defendant it was contended that they constituted an interest in land within the meaning of the statute of frauds, and that, therefore, a contract for their sale was void unless reduced to writing. The court held the contract valid. True, the act of incorporation declared that the shares should, to all intents and purposes, be deemed personal estate and transmissible as such, and should not be of the same nature of real property; but it is evident from what was said, that, independent of this provision, the same decision would have been made. Parke. B., said: "No doubt the company are seized of real property, as well as possessed of a great deal of personal property; but the interest of each individual shareholder is a share of the net produce of both when brought into one fund." And again: "I have no doubt whatever that the shares of the proprietors, as individuals, are personalty; they consist of nothing more than a right to have a share of the net produce of all the property of the company." Alderson, B., said: "All the cases were under review in Bligh v. Brent, where the question was as to the shares in the Chelsea WaterWorks Company. That was a stronger case than the present because there was no clause of this kind in the act of parliament, and yet the shares were held personal property." "I conceive that all the shareholders would take even without such a clause." Bolland, B., concurred. So, in Duncuft v. Albrecht, 12 Simons & Stewart 189, it was held that a parol agreement for the sale of railway shares is valid, for they are neither an interest in lands, nor goods, wares or merchandise, within the statute of frauds. A careful examination of the adjudications upon the subject has brought us to the conclusion that, according to the weight of authority, the shares in question are personal property. In the early English cases the distinction, now well understood, between the property of a corporation and the rights of its members, does not seem to have been taken, and it appears to have been assumed that each shareholder had an estate in the corporate property, and that, consequently, if that property was real, his share was also realty. But the cases we have cited abundantly show that the distinction above mentioned is now fully recognized in England, and that the property of a corporation may be mainly, if not wholly, real, and yet the shares of its members be personalty. * In whatever way we view the case, whether upon adjudication, reason, or our statute laws, we arrive at the conclusion that the shares in question are personal property. The bill must therefore be dis missed. Bill dismissed. Note. Many early cases held shares in corporations owning real property to be real property. Some of these were followed in this country, as shown by the above case: 1723, Drybutter v. Bartholomew, 2 P. Wms. 127; 1745, Townsend v. Ash, 3 Atk. 336; 1786, King v. Dock Co., 1 T. R. 219; 1818, Welles v. Cowles, 2 Conn. 567 (this case led to a statute declaring shares to be personal property); 1831, Coombs v. Jordan, 3 Bl. Ch. (Md.) 284, 22 Am. Dec. 236; 1838, Price v. Price, 36 Ky. (6 Dana) 107; 1870, Copeland v. Copeland, 70 Ky. (7 Bush) 349 (after which holding the legislature changed the rule there by statute, declaring shares to be personal property). The great weight of authority, even from early times, holds shares to be personal property: 1781, Weekley v. Weekley, 2 Younge & Col. Exch., p. 281, note; 1798, Russell v. Temple, 3 Dane's Abr. 108; 1812, Cooper v. Swamp Canal Co., 6 N. C. (2 Murph.) 195; 1830, Blake v. Jones, Bailey's Eq. (S. C.) 141, 21 Am. Dec. 530; 1836, Bligh v. Brent, 2 Younge & Col. Exc. 268; 1837, Arnold v. Ruggles, 1 R. I. 165; 1843, North v. Forest, 15 Conn. 400; 1849, Slaymaker v. Bank of Gettysburg, 10 Pa. St. 373; 1854, Watson v. Spratley, 10 Ex. 222, 24 L. J. Ex. 53; 1855, Edwards v. Hall, 25 L. J. Ch. 82, 35 E. L. & Eq. 433; 1856, Walker v. Bartlett, 18 C. B. 845, 25 L. J. C. P. 263; 1865, McKeen v. Northampton Co., 49 Pa. St. 519, 88 Am. Dec. 515; 1869, Southwestern R. Co. v. Thomason, 40 Ga. 408; 1881, Manns v. Brookville National Bank, 73 Ind. 243; 1884, Feckheimer v. National Exchange Bank, 79 Va. 80; Tenn. Sec. 214. Same. Statute of frauds. (2) "Goods, wares or merchandise." TISDALE v. HARRIS.1 1838. IN THE SUPREME JUDICIAL COURT OF MASSACHUSETTS. 20 Pick. (Mass.) 9-14. [Assumpsit by Tisdale against Harris on an oral contract by which defendant agreed to sell plaintiff two hundred shares, with all the earnings thereon, in the capital stock of a manufacturing company. The object was to recover $300, being the amount of dividends declared on the shares after the agreement to sell.] SHAW, C. J. * But by far the most important question in the case arises on the objection that the case is within the statute of frauds. This statute, which is copied precisely from the English statute, is as follows: "No contract for the sale of goods, wares or merchandise for the price of ten pounds ($33.33) or more, shall be allowed to be good, except the purchaser shall accept part of the goods so sold, and actually receive the same or give something in earnest to bind the bargain, or in part payment, or that some note or memorandum in writing of the said bargain be made and signed by the parties to be charged by such contract or their agent thereunto lawfully authorized." This being a contract for the sale of shares in an incorporated company in a neighboring state for the price of more than ten pounds, and no part having been delivered and no purchase-money or earnest paid, the question is, whether it can be allowed to be good without a note or memorandum in writing signed by the party to be charged with it. This depends upon the question whether such shares are goods, wares or merchandise within the true meaning of the statute. It is somewhat remarkable that this question, arising on the St. 29 Car. 2, in the same terms, which ours has copied, has not been definitely settled in England. In the case of Pickering v. Appleby, Com. Rep. 354, the case was directly and fully argued before the twelve judges, who were equally divided upon it. But in several other cases afterward determined in chancery, the better opinion seemed to be that shares in incorporated companies were within the statute, as goods or merchandise. Mussell v. Cooke, Prec. in Ch. 533; Crull v. Dodson, Sel. Cas. in Ch. 41. 1 Statement abridged; arguments and part of opinion omitted. |