Sayles v. Bates

The case is this: The American File Company of Pawtucket was incorporated by the General Assembly at its May session, A. D. 1863, and immediately organized and began to manufacture files. The stock was owned in Rhode Island and Maryland in about equal parts, and the board of directors consisted equally of Rhode Islanders and Marylanders. Money to carry on the business was raised on the notes of the company indorsed by the stockholders. The business was carried on at a loss, and in 1870 the company was deeply in debt. It was decided to bond the debt, the stockholders contributing in proportion…