The defendant is liable only for the 40 shares, valued at $4,000, stated in the articles of incorporation.

Wm. Mathew, for appellant, cited Christian College vs. Hendley (49 Cal. 347); Chater vs. S. F. Sugar Ref. Co. (19 Cal. 219); Athal Music Hall Company vs. Cary (116 Mass. 474); Buffalo and N. Y. City R. R. Co. vs. Dudley (14 N. Y. 336); Lake Ontario and C. R. Co. vs. Mason (16 N. Y. 458); 14 Wend. 20; 37 N. Y. 626; 2 Bibb. 576; 17 Ill. 57; 72 Penn. St. R. 46; 28 Mich. 130; 16 Ind. 390; 36 Conn. 412.

MCKINSTRY, J.

The rights of the parties to this action must be determined by reference to certain provisons of the Civil Code, as the same read when the corporation (plaintiff) was formed.

Section 293 of that Code provided: "Each intended corporation named in Section 291, before filing articles of incorporation, must have actually subscribed to its capital stock, for each mile of the contemplated work, the following amounts, to-wit:

"1. One thousand dollars for each mile of railroads."

Section 290 of the same Code requires that the "articles of incorporation" shall set forth, among other matter, "If there is a capital stock, the amount actually subscribed, and by whom."

The Code prescribes no particular form for the subscription paper, from which it may appear that one thousand dollars a mile was subscribed toward the "intended" railroad.

But it is plain that the amounts subscribed, and by whom, must be fully set forth in the articles of incorporation. Those who sign and file the articles, and thus bring the corporation into existence, act for the real subscribers. If the statement contained in the articles as to the amount subscribed, and by whom, is incorrect, one of two results must follow: either the attempt to give existence to the corporation is abortive, or the corporation which comes into life is estopped from claiming that any other person than those named as subscribers became a member when the articles were filed, or that any person therein named was a subscriber for

a larger sum than that mentioned in the articles. In either event this action can not be maintained.

Whether one not named as subscriber in the articles of incorporation, but who had in fact previously subscribed, could have the articles declared null, or on the other hand, claim the right to be admitted as an associate member, is not an immediate question. The requirement of the Code is absolute and peremptory. The articles must set forth the amount subscribed and by whom. The instrument from which the corporation derives its being must be held to limit the power of the corporation, so that it can bind as stockholders as of the date of its filing only those named in the articles, and to the amounts therein mentioned.

Judgment affirmed.

We concur:

CROCKETT, J.
RHODES, J.
WALLACE, C. J.

[No. 5,191.]

[Filed July 16, 1878.]

KELLER, RESPONDENT, VS. LEWIS, APPELLANT.

CONTRACTS-FOrfeitures and PENALTIES-WILL NOT BE ENFORCED IN EQUITY.It is a universal rule in equity never to enforce either a penalty or a forfeiture, so where there existed a contract between parties for the sale of land containing a forfeiture or penalty for failure to pay the balance of the purchase money, in the view of a court of equity the legal title is retained by the vendor as security for the balance. He may bring ejectment, if out of possession, but if he come into equity for relief his better remedy is to proceed to foreclose the vendor's right to purchase, and the court must fix a day within which he must pay the balance. He can not proceed to enforce the forfeiture or penalty.

Appeal from the Seventeenth District Court, Los Angeles County.

The plaintiff and defendant entered into an agreement for the sale and purchase of certain lands belonging to the plaintiff, the defendant agreeing to pay one-third of the value in cash and the balance on or before the 20th day of June, 1872. It was further stipulated that in the event of a failure

to comply with the terms thereof by the defendant herein the plaintiff should be released from all obligations in law or equity to convey said property, and that the defendant shall forfeit all right thereto. The plaintiff was to make perfect title.

The defendant paid eleven thousand six hundred and sixtysix dollars, being the amount of the cash payment, but refused to pay the balance, because the plaintiff's title was not perfect and undisputed.

The plaintiff in his complaint prays that the contract be declared forfeited and null and of no effect, and that defendant have no claim against him by reason of any transaction in relation to said agreement, and that defendant be forever barred from asserting any claim whatever to said land or to said money already paid, and for such other relief, etc.

The court below granted the prayer of the plaintiff, from which judgment the defendant appealed.

Glassell, Chapman & Smiths, and Williams and Thornton, of counsel for appellants.

Brunson, Eastman & Graves, for respondent.

MCKINSTRY, J.

The decree declares the money already paid on the contract—and all right of defendants in and to the lands-forfeited.

It is a universal rule in equity never to enforce either a penalty or forfeiture (2 Story's Eq. 1319, and cases cited). On the contrary, equity frequently interposes to prevent the enforcement of a forfeiture at law. In the view of a court of equity, in cases like the present, the legal title is retained by the vendor as security for the balance of the purchase money, and if the vendor obtains his money and interest he gets all he expected when he entered into the contract. True, he is not bound to wait indefinitely after the failure of the purchaser to comply with the terms of his agreement. If the payments are not made when due, he may, if out of possession, bring his ejectment and recover the possession; but if he comes into equity for relief, his better remedy, in case of

persistent default on the part of the vendee, is to institute proceedings to foreclose the right of the vendee to purchase -the decree usually giving the latter a definite time within which to perform. (Hansborough vs. Peck, 5 Wallace, 506.) Under the circumstances of this case, as presented by the pleadings and evidence, the decree of the District Court should have fixed a day within which the defendants should pay the balance due upon the contract, and costs, etc., or be forever foreclosed of all right or interest in the lands or to a conveyance thereof.

Judgment and order reversed, and cause remanded with directions to the court below to render a decree in accordance with the views herein expressed.

We concur:

CROCKETT, J.

RHODES, J.

WALLACE, C. J.

Supreme Court of the United States.

MAY 13, 1878.

IN RE JACKSON.

1. CONSTITUTIONAL LAW-POSTAL SYSTEM-AUTHORITY OF CONGRESS TO DESIGNATE MATTER TO BE CARRIED AND MATTER TO BE EXCLUDED.-The power vested in Congress to establish "post-offices and post-roads" embraces the regulation of the entire postal system of the country. Under it Congress may designate what shall be carried in the mail, and what shall be excluded. 2. IBID.-INSPECTION-LETTERS-PRINTED MATTER.-In the enforcement of regulations excluding matter from the mail a distinction is to be made between different kinds of mail-matter; between what is intended to be kept free from inspection, such as letters and sealed packages subject to letter postage, and what is open to inspection, such as newspapers, magazines, pamphlets, and other printed matter, purposely left in a condition to be examined.

3. CONSTITUTIONAL LAW-OPENING AND EXAMINING LETTERS-WARRANT.Letters and sealed packages subject to letter postage in the mail can only be opened and examined under like warrant, issued upon similar oath or affirmation, particularly describing the thing to be seized, às is required when papers are subjected to search in one's own household. The constitutional guarantee

of the right of the people to be secure in their papers against unreasonable searches and seizures extends to their papers, thus closed against inspection, wherever they may be.

4. IBID.-FREEDOM OF THE PRESS-CIRCULATION-OTHER TRANSPORTATION.— Regulations against the transportation in the mail of printed matter, which is open to examination, can not be enforced so as to interfere in any manner with the freedom of the press. Liberty of circulating is essential to that freedom. When, therefore, printed matter is excluded from the mail, its transportation in any other way can not be forbidden by Congress.

5. EXCLUDING MAIL-MATTER - EVIDENCE OF VIOLATION OF REGULATIONS — INSPECTION-OTHER EVIDENCE.-Regulations excluding matter from the mail may be enforced through the courts, upon competent evidence of their violation obtained in other ways than by the unlawful inspection of letters and sealed packages; and with respect to objectionable printed matter, open to examination, they may in some cases also be enforced by the direct action of the officers of the postal service upon their own inspection, as where the object is exposed and shows unmistakably that it is prohibited, as in the case of an obscene picture or print.

6. CRIMINAL LAW-CONVICTION-IMPRISONMENT UNTIL FINE PAID-VALIDITY.When a party is convicted of an offense and sentenced to pay a fine, it is within the discretion of the court to order his imprisonment until the fine is paid.

On petition for writs of habeas corpus and certiorari. Section 3894 of the Revised Statutes provides that "no letter or circular concerning (illegal) lotteries, so-called gift concerts, or other similar enterprises offering prizes, or concerning schemes devised and intended to deceive and defraud the public for the purpose of obtaining money under false pretenses, shall be carried in the mail;" and that "any person who shall knowingly deposit or send anything to be conveyed by mail in violation of this section shall be punishable by a fine of not more than five hundred dollars, nor less than one hundred dollars, with costs of prosecution." By an act passed in July, 1876, the word "illegal" was stricken out of the section. Under the law as thus amended the petitioner was indicted, in the Circuit Court of the United States for the Southern District of New York, for knowingly and unlawfully depositing, on the 23d of February, 1877, at that district, in the mail of the United States, to be conveyed in it, a circular concerning a lottery offering prizes, inclosed in an envelope addressed to one J. Ketcham, at Gloversville, New York. The indictment sets forth the offense in separate counts so as to cover every form in which it could be stated under the act. Upon being arraigned the petitioner stood