chasers of school or university lands," etc., to compel a conveyance of certain lands in section 16, township 10 N., range 35 E., Willamette meridian, in Walla Walla county, alleging that they had been sold and conveyed to her grantor by the county commissioners in 1865, in pursuance of the act passed by the territorial legislature January 23, 1863, authorizing the sale of school lands reserved by the act of congress organizing the territory of Washington. 10 Stat. 179. A general demurrer to the complaint was overruled, and a decree was entered upon de fendants' refusal to plead further. The complaint alleges all the facts required to be shown by the act of 1890, excepting that it is not alleged that "for any reason such grantee has not been vested with a title thereto." But this omission is, in the view of the pleader, compensated by an allegation that the state and the commissioner are asserting that the title did not vest in respondent's grantor by the conveyance of the commissioners, but that it is now vested in and held by the state, and that the lands are subject to sale as state school lands. Argument was made, and cases cited, to sustain the proposition that the reservation of lands in the several territories by congress, to be applied to the support of common schools in the territories, and the states to be created therefrom, constituted, in each case, a present, irrevocable grant to the territories, under which the territorial legislatures could dispose of the title to those lands. But we do not deem it to be material to this case to pass upon that question. Were we to find in the affirmative upon it, the respondent, who advances it for consideration, might find herself without a cause of action, since the statute expressly limits the right to sue the state to those transactions of the county commissioners or university commissioners, where "for any reason such [their] grantee has not been vested with a title." It would seem to be obvious that, if the territory had received a grant of lands from congress, a conveyance under its authority would have vested the title, which is not a case provided for in this law. However the law may be as to the territory's rights and powers, it must be conceded that in so far as the state now claims any title to the school lands under the act of February 22, 1889, commonly called he “Enabling Act," she is estopped to deny hat that act has controlling force in her disposition of those lands, except as that act may have been modified. Minnesota v. Bachelder, 1 Wall. 109.

This brings us to the main point in the case: The appellants urge that it would be a violation of that provision of the federal constitution which prohibits states from passing laws impairing the obligation of conracts, were we to uphold the proviso to artile 16, § 2, of the state constitution, and the ict of 1890, because we should thereby counenance a violation of the enabling act,

which provided that school lands in this state should be sold only at public auction, and for not less than $10 per acre. Act Feb. 22, 1889, § 11. The act of congress which enables a territory to come into the Union as a state usually contains many provisions, which, upon the admission of the state, become inviolable, either by the state or by the United States. But an enabling act is at most a proposition, and has no binding force upon the people of a territory until they have adopted a constitution, and the state has been admitted into the Union. Then, if, by their constitution, they have expressed no dissent from any proposition contained in the enabling act, doubtless they must be held bound by its conditions. But can they in no way claim to have an expressed dissent respected? Treating the enabling act as a proposition for a contract, as appellants maintain it should be treated, can the other side present no proposals for a modification? It would be an unusual thing in the law of contracts if they could not; and it would also be unusual to find that, where both parties had acted upon the modified instrument, it should turn out that the first proposal was, after all, the only contract. And that seems to us to be this case. Congress proposed to grant to the state certain lands to constitute a fund for the support of public schools, and it saw fit to attach to the grant a condition subsequent, governing the manner of sale and the price at which those lands should be sold. The people of the state, on the other hand, while gratefully accepting the hounty of government, were mindful that certain persons had at least a strong moral equity in a portion of the lands proposed to be granted, and expressed in clear and unmistakable language their intention to respect that equity. This made a counter proposition, which went before the president, and was passed by him without challenge; and it went again before Congress upon the admission of our senators and representatives, and so far from being challenged, and the admission of the state denied, everything has been done to put Washington upon the same footing as the other states. It seems to us that, by the analogy of the contract, the modified proposition would, in any court, be taken to be the existing contract between the parties.

But there is also a question of propriety involved. The courts of the states are as much bound to uphold the supremacy of the constitution of the United States as are the federal courts, or as they are to sustain the constitutions and laws of their several states. This obligation may perhaps even extend to declaring unconstitutional a provision in the state constitution under which the court exercises jurisdiction. But the conflict between the state and the federal constitution must certainly be a very clear one to call for so solemn a decision; and, whatever may be said of the case at bar, we do not find in it

any such obvious ground for holding that there is a conflict between the federal constitution and the constitution of this state as would justify us in holding the provision for confirming these sales of school lands to be void. The statute does not authorize the assessment of costs against the state, and none should have been allowed. The state has never been in fault in these matters, but it has graciously allowed a suit to be brought, that the landholder might secure further assurance of his title. It is all to his advantage, and he ought to pay the expense of the proceeding. But it was different when the state appealed, and thereby put itself in the wrong.

The commissioner is the mere ministerial officer of the state, to execute its deed, and was not a necessary party to the action. The decree is affirmed, with the exception of the ccsts allowed. Respondent will recover costs of the appeal against the state only.

DUNBAR, C. J., and SCOTT, ANDERS, and HOYT, JJ., concur.

TOWN OF DENVER v. CITY OF SPOKANE FALLS et al.

(Supreme Court of Washington. Nov. 7, 1893.) PLEADING-ANSWER-SPECIAL LEGISLATION.

1. An answer wherein defendants "say" that they deny each and every allegation in the complaint, while not commendable, is a denial, and will be sustained, unless objected to at the proper time.

2. Under Code Proc. § 194, subd. 1, which requires the answer to contain a general or specific denial of each material allegation of the complaint controverted by defendant, such denials put plaintiff to his proof as to every allegation material to his cause of action; and hence a general denial in an answer is sufficient to require plaintiff to prove its corporate character alleged in the complaint.

p.

3. Act March 27, 1890, (Laws 1889-90, 131,) giving certain communities, which had previously undertaken to incorporate as municipal corporations under an invalid law, the right to reincorporate under the statute without reference to population, but solely by reason of their peculiar condition, is a special law, and void, under Const. art. 2, § 28, which prohibits the legislature from passing special laws "for granting corporate powers and privileges," and article 11, § 10, which provides that "corporations for municipal purposes shall not be created by special laws."

Appeal from superior court, Spokane county; Jesse Arthur, Judge.

Action by the town of Denver against the city of Spokane Falls and others to restrain defendants from proceeding with the annexation of the town to the city. From a judgment for defendants, plaintiff appeals. firmed.

Af

Thomas C. Griffitts, for appellant. James Dawson, Corp. Counsel, and Jones, Belt & Quinn, for respondents.

ANDERS, J. This controversy grew out of an assumption on the part of the defend

ant city of Spokane Falls to exercise autbrity and jurisdiction in municipal mattes over certain territory claimed by the plais tiff, the town of Denver, to be embraced. within its corporate limits. The defendin claimed that the disputed territory was lega ly annexed to the city of Spokane Fals and became a part thereof, by virtue of £ election held for that purpose on July 2 1890, in conformity with the provisions d' section 9 of the act of March 27, 1890, entitled "An act providing for the organin tion, classification, incorporation and goD ment of municipal corporations, and decir | ing an emergency," and that the inhabitant of the alleged town of Denver ever sing have been, and still are, amenable to the same laws and ordinances by which th remaining portion of the city is governed a and regulated, and that its officers have de same powers there that they may lawy exercise elsewhere within the corporate E its of the city. On the contrary, the pas tiffs contend that the town of Denver wa long prior to and at the time of said i nexation proceedings, a legally organized acting municipal corporation, and that s proceeding was, as to it, illegal, nuli, A void; and it sought, by this action, to re strain the defendants from proceeding fr ther in the matter of said election, or as

vassing the vote thereof, held in said tow. of Denver, or from asserting any right authority whatever over the said town a any of its inhabitants, or the property any of its inhabitants, or interfering wi the proper exercise of the corporate fra chises and privileges of said town, and d the official duties of its mayor and side men, and to obtain a decree declaring t election and proceedings concerning the e tension of the boundaries of the city a Spokane Falls to be null and void. It s alleged generally in the complaint that th plaintiff, the town of Denver, now is in at all times hereinafter mentioned has best. a municipal corporation, duly organized an existing under and by virtue of the laws of the state of Washington; and it is furthe specially alleged that on the 16th day af June, 1889, it was duly incorporated unde and by virtue of the provisions of an of the legislature of the then territory Washington entitled "An act for the incorper ation of towns and villages in the territ of Washington," approved February 2, 188 and then and there became, ever since he remained, and now is, a municipal corpors tion duly organized and acting; and that a the 15th day of May, 1890, it reincorporated as a municipal corporation under and virtue of a law of the state of Washing entitled "An act providing for the organs tion, classification, incorporation and gover ment of municipal corporations, and decis ing an emergency," approved March 2 1890, in the manner prescribed in section

ery allegation material to his cause of action. See Pom. Rem. & Rem. Rights, § 683. If, therefore, it was material for the plaintiff, in order to state a cause of action entitling the town of Denver to the relief sought, or to any relief whatever, (and we think it was,) to allege the corporate existence of said town, we are of the opinion that the denials in the answer were sufficient to controvert that fact, and to require proof thereof.

mental complaint of the plaintiff herein say that they deny each and every allegation, matter, and thing in said complaint contained, except those hereinafter admitted." It must be admitted that this form of pleading is objectionable, and not to be commended. It is just as easy for a defendant to deny positively any allegation of the complaint controverted by him, and thus conform strictly to the requirements of the Code, as it is to "say" he denies. "But such a form is nevertheless a denial, and, if not objected to at the proper time, will be sustained." Maxw. Code. Pl. 390. While the denial in this case is not so specific as it should have been, yet, inasmuch as the defendants were not required by motion in the court below to make it more specific, we do not think we ought now to declare it insufficient, especially as it appears from the answer as a whole just what allegations of the complaint are denied and what are admitted. See Boone, Code Pl. § 60, and cases cited; Maxw. Code Pl. p. 388.

But as before intimated, it is claimed by counsel for the plaintiff that, even if the said allegations of the answer constitute a denial in any sense, still they are not sufficient to require proof of the corporate existence of the town of Denver. Numerous authorities are cited to the proposition that by pleading the general issue the defendants admit the corporate existence of the plaintiff. Some of the decisions cited, however, were based upon special statutes, (see Association v. Read, 93 N. Y. 474; Bank v. Loyhed, 28 Minn. 396, 10 N. W. 421,) and others proceeded upon the theory that a plaintiff's capacity to sue is a preliminary question, which is waived by pleading to the merits. The doctrine contended for by appellant is recognized by Mr. Wait in his recent work on Insolvent Corporations as one of very general application, but he admits that it is not universal, and that the question is more or less affected by the provisions of the different Codes. Wait, Insolv. Corp. § 136. Our Code of Procedure (section 194, subd. 1) provides that the answer must contain a general or specific denial of each material allegation of the complaint controverted by the defendant, etc.; and it was manifestly ntended by the legislature that such denials should put the plaintiff to his proof as to ev

But the respondents' counsel contends that the complaint shows on its face that the alleged town of Denver never was incorpo

of Washington, and that for that reason the complaint fails to state facts sufficient to constitute a cause of action. And the argument is that the act of February 2, 1888, under which it first attempted to organize, was void, and so declared by this court in Territory v. Stewart, 1 Wash. St. 98, 23 Pac. 405, and that section 6 of the above-mentioned act of March 27, 1890, under which it is alleged it reincorporated, is also null and void, as being in direct conflict with the provisions of the constitution of the state. A serious and important question is thus presented for our determination, for, if the town of Denver, as such, never had an existence, it would seem logically to follow that the contention of respondents should prevail. But it is earnestly insisted on behalf of the appellant that by its organization under the void act of February 2, 1888, and the exercise of corporate powers, the town of Denver became at least a de facto corporation, and that by its reorganization it became a corporation de jure, the existence of which cannot be called in question in this action. In support of this position the general rule of law is invoked that when the existence of a corporation has been recognized by acts of the legislature, all inquiry as to the original creation of the corporation is precluded; that it becomes by such recognition ipso facto a legal corporation, whatever defects or irregularities there may have been in the proceedings required by law to be taken for its organization. We have no doubt of the correctness of this proposition, generally, for it has many times been enunciated by the courts. See Wait, Insolv. Corp. § 484, and cases cited. Nor do counsel for the respondents question it. But they do question the power of the legislature to enact the law by which the town of Denver claims to have been recognized as an existing municipal corporation; and, furthermore, they deny that the legislature, by the statute in question, or by any other statute, ever attempted or assumed to recognize its corporate existence. In other words, it is insisted that section 6 of the act of March 27, 1890, is in contravention of subdivision 6, § 28, art. 2, and also of section 10, art. 11, of the constitution of the state, and is therefore null and void, and con. ferred no rights or privileges upon the socalled town of Denver.

Wash. 763, 32 Pac. 787, that the lien, in such a case, only attaches upon the interest of the contracting party, and not against the owner of the legal title, and this case is governed by that decision. There is an attempt on the part of respondent, in his brief, to maintain that appellant is estopped from denying his liability, but upon just what grounds such claim is made, does not clearly appear. It is not contended that he represented Pierson was the owner of the real estate, and, for that matter, respondent testified that he knew of the contract between appellant and Pierson, relating to the sale and purchase of said premises, at the time he performed the work. It does not appear that appellant had anything to do with the construction of said building, in any way, further than guarantying the payment of a certain bill for lumber which was purchased by Pierson, and used in the construction of the building. Reversed and remanded.

DUNBAR, C. J., and STILES, HOYT, and ANDERS, JJ., concur.

PUGET SOUND & C. R. CO. v. OUIL LETTE.

SAME V. ELWELL.

Supreme Court of Washington. Nov. 15, 1893.) CORPORATIONS-STOCK-SUBSCRIPTIONS-ENFORCEMENT-PLEADING.

1. Code 1881, § 2421, as amended by Acts 1886, p. 84, declaring corporations, and the members thereof, liable to all the conditions and iabilities "herein imposed and to none others," and providing (section 2430) for the forfeiture and sale of stock for unpaid subscriptions, does not relieve stockholders from liability to be sued by the corporation on their subscription, and imit the remedy against them to forfeiture and sale of their stock.

2. When the trustees of a corporation, sung on a subscription to its capital stock, show hat they have taken steps which the law auhorized them to take, the presumption is that hey have taken them regularly; and, if there s any by-law which renders their action irregalar, it is matter of defense, and should be so pleaded.

Appeal from superior court, Thurston couny; M. J. Gordon, Judge.

Actions by the Puget Sound & Chehalis Railroad Company against Louis P. Ouilette, and by the same plaintiff against W. S. Elwell. Demurrers to the complaints were sustained, and plaintiff appeals. Reversed.

Chas. H. Ayer and Hughes, Hastings & Stedman, for appellant. W. I. Agnew and Phil. Skillman, for respondents.

STILES, J. The almost universally ac cepted doctrine is that a subscription to the capital stock of a corporation is a contract to pay money, which may be enforced by the corporation by suit. 2 Beach, Priv. Corp. § 584; 1 Mor. Corp. (2d Ed.) § 128; Cook, Stock, Stockh. & Corp. Law, (2d Ed.) §§ 69 et v.34P.no.12-59

seq., 124. But respondents' first point is that that portion of section 2421 of the Code of 1881, as amended by the act of 1886, (page 84,) which reads, "Such corporations and the members thereof being subject to all the conditions and liabilities herein imposed and to none others," relieves the stock subscriber from all liability, except that of having his stock forfeited and sold under the provisions of section 2430, as amended in 1886. (Reference is made to the Code of 1881 and amendments, because this corporation appellant was organized, and the subscription made, in 1888.) But the same sections provide for subscriptions to the whole of the capital stock before business can be commenced, and for the times, manner, and amounts in which subscriptions shall be paid. The plain implication is that such payment may be secured or enforced in any lawful way by which other contracts for the payment of money are enforced. This, then, is a liability which is, in the language of the statute, "herein imposed," though it is frequently spoken of as the common-law liability of the stockholder. But he is also subject to a liability to have his stock forfeited, which is purely statutory. The internal evidence of the intention to provide these two methods of realization by the corporation is of the very strongest, in this: By section 2430, the stockholders may make by-laws prescribing the time, etc., of payments, but if the stockholders make no by-law on the subject the trustees can demand and call in subscriptions as they see fit. Now, when it comes to selling forfeited stock for unpaid subscriptions, the sale must be made "as prescribed in the by-laws of the company." Therefore, the trustees must follow the by-laws, and the express authority given to them in the absence of by-laws is completely negatived. It cannot be admitted that a corporation can do nothing to collect in its capital until the stockholders make by-laws, for they may not be made at all.

And this brings the discussion to respondents' second point, viz. that the complaint did not aver that the stockholders, by their by-laws, did not exercise the powers granted them. The trustees, collectively, are the corporation, and it is the corporation alone which collects subscriptions. The general power to do this, and to do all things preliminary thereto, is vested in the trustees; and, when they show that they have taken any step which the law authorizes them to take, the presumption is that they have taken it regularly. If there is any by-law on the subject which renders their action irregular, it is, we think, matter of defense, and should be so pleaded. The judgment is reversed, and the cause remanded, with directions to overrule the demurrer to the complaint.

ANDERS, SCOTT, and HOYT, JJ., concur. DUNBAR, C. J., did not sit, and expresses no opinion.