in return for the price of transmission paid by him. Is it possible for the company, or for any other party entering into a contract for a valuable consideration received, to promise and not to promise, or to create and not to create an obligation or duty, at one and the same moment and by one and the same act? The inconsistency and impossibility of such things are obvious. But if there were no such difficulties, or if the occasion or circumstances were such that a valid release might be executed, and it be regarded in that light, still the objection exists that there is no consideration whatever to support it, and it must be held void on that ground. If it be urged that the sender receives his consideration in the reduced price of transmission, or because the company undertakes to send the message at one-half the usual rates of transmitting day messages, that argument ends in proving that the company does not undertake to send the message at all, and that no contract or agreement on its part is made or entered into for that purpose. If the company promises or binds itself at all for the rate or consideration named, and which it is willing to and does accept, then the smallness of such consideration cannot operate to relieve from the promise or to destroy the obligation thus created. Regarding the regulations in this light, therefore, as well as in that of correct public policy, it is seen that effect can not be given to them as a means of protection or escape on the part of the company from all liability for the performance of its contract. The regulations cannot serve to shield the company from the consequences resulting from the gross negligence or fraud of its officers or agents, or from the entire failure to perform the service, no good excuse for such failure being offered or shown."

We therefore hold that the stipulation purporting to exempt the corporation defendant from all liability for mistakes or delays in the transmission or delivery, or for non-delivery of any unrepeated message, whether happening by negligence of its servants or otherwise, beyond the amount received for sending the same, is void for want of a consideration to support it. And further, that it is not competent for telegraph companies to stipulate against or limit their liability for mistakes happening in consequence of their own fault, such as want of proper skill or ordinary care on the part of their operators or the use of defective instruments: See authorities above. cited and Sweatland v. Ill. and Miss. Tel. Co., 27 Iowa, 433; Wolf v. Western U., 62 Penn. St., 83; Breese v. U. S T. Co., 48 N. Y., 132; U. S. Tel. Co. v. Gildersleeve, 29 Md., 232; Western Union v. Buchanan, 35 Ind., 429; Hibbard v. West. Union, 33 Wisc., 558; Tel. Co. v. Griswold, 37 Ohio St., 301.

We think the true rule is, that such companies are exempt only for errors arising from causes beyond their own control. And this would seem to be the rule adopted by statute in this state; for by sec. 2,162 of the civil code it is declared: "A carrier of messages for reward must use great care and diligence in the transmis

sion and delivery of messages. A carrier by telegraph must use the utmost diligence therein."

We are further of opinion that the plaintiff having proved the mistake in the message as delivered, the onus was upon the defendant to show how it occurred: Tyler v. Western Union T. Co., supra.

If the error was caused by atmospherie disturbances, or a momentary displacement of the wires, the defendant knew it, and ought to show it. This, defendant undertook to do on the trial in the court below. There was testimony given tending to show that before and at the time the message in question was sent, trouble was experienced in the transmission of dispatcher, owing to the condition of the weather; that it was foggy and stormy. It was further made to appear that in the telegraphic code the following lines and dots, when transmitted along the wire, made the word "bail":

And that the word "bain" is expressed by the following:

There was also testimony tending to show that the operators at Stockton and San Francisco were competent, and that the one at San Francisco was especially careful in the matter of this dispatch. The latter testified that she took particular pains with the message in question, "as is shown by the mark under one of the cipher words-the last word-because it was an unusual word-' falun.' I asked Mr. Dixon to repeat it, and I put a little mark, x,' under it to show that it was repeated. The other words being ordinary words I paid no attention to, because it is something very likely to be received in any message.

There was, also, given on behalf of the defendant, further testimony, tending to show that the error, resulting in the change of the word "bail" to "bain," was caused by a break in the electric current, and that this, in turn, was caused by atmospheric influences, prevailing at the time, and, of course, beyond the control of defendant. If such was the fact, the verdict should have been for the defendant. But it was a question of fact for the jury, under appropriate instructions from the court. The court should have told the jury that the mistake in the message, as delivered, being aduaitted, the presumption was that it occurred through the negligenco of defendant, but that if they believed from the evidence that the mistake occurred through a cause or causes beyond defendant's control, such as a break in the electric current, produced by atmospheric influences, their verdict should be for the defendant. We think this question, which was the turning ono in the case, was not fairly submitted to the jury in the court below, and we must therefore remand the case for a new trial.

Judgment and order reversed and cause remanded for a now

tria.

MCKINSTRY, J., and MCKEE, J., concurred.

No. 9.551.

STEIN v. HOWARD ET AL.

In Bank. Filed September 23, 1884.

INCREASE OF CAPITAL STOCK-FICTITIOUS ISSUE-SPRING VALLEY WATER WORKS.-The Spring Valley Water Company is authorized to increase its capital stock and to sell the increased issue at the actual market value of the stock of the corporation, for the purpose of rai ing funds to extend and enlarge the capacity of the works of the corporation, so as to afford greater protection to the property of the inhabitants of the city and county of San Francisco, and to supply them with an abundance of water. Such increased issue is not "fictitious," within the meaning of article XII, section 11 of the constitution.

APPEAL from an order of the superior court of the city and county of San Francisco, entered in favor of the defendant. The opinion states the facts.

Rosenbaum & Sheeline, for the appellant.

Fox & Kellogg, for the respondent.

MYRICK, J. The complaint in this case was filed by a stockholder for the purpose of enjoining the trustees of the Spring Valley Water Works, a corporation, from issuing and selling twenty thousand shares of stock. The capital stock of the corporation was eight million dollars, divided into eighty thousand shares of the nominal value of one hundred dollars each. At a meeting of the stockholders, duly called, held on the sixth day of July, 1876, it was resolved (more than two-thirds of the capital stock being represented, and the vote being unanimous as to all present), that the capital stock be increased to sixteen million dollars, to be divided into one hundred and sixty thousand shares of one hundred dollars each. At a regular meeting of the board of trustees, held April 1, 1854, it was resolved by the board that the president and secretary be authorized to issue and sell twenty thousand shares of the increased stock of the corporation at eighty-seven and one-half dollars per share, the stockholders to be entitled to purchase one share of stock for every four shares which they then owned. The answer of the defendants averred that the corporation had already expended and paid out, in the construction of its works, and in the purchase of property necessary therefor, a sum of money in excess of the eight million dollars, for which certificates of stock had been issued, and of two million dollars, for which the proposed certificates were to be issued, and that the increase of stock was bona fide, and for the purpose of selling the increased stock from time to time to raiso funds for the purpose of extending and increasing the capacity of the works of the corporation; that for the protection of the property of the inhabitants of the city and county of San Francisco, and for supplying said inhabitants with an abundance of water it had become, and was necessary, that the property and capacity of the works of the corporation should be at once increased, and that tho corporation had already entered into contracts involving the expenditure of more than half a million dollars for the purchase of prop

erty necessary to construct a new aqueduct and line of pipe for more than twenty-five miles; that the contemplated expenditure would amount to two millions of dollars; that for a long time past the stock of the corporation had fluctuated in the market, some days being as low as eighty-three dollars, and other days as high as nirety dollars per share, and that on the said first day of April, 1884, the market value was eighty-seven and a half dollars per share, and no more; that the proposed sale of the increased stock was for the purpose of raising funds for the purposes aforesaid, and that the price named is the highest price which can be obtained.

The civil code of this state (sec. 359) makes provision for an increase of the capital stock of an incorporation. The constitution of this state contains the following prohibition in article XII, sec. 11: "No corporation shall issue stock or bonds except for money paid, labor done or property actually received, and all fictitious increase of stock or indebtedness shall be void." The question for decision on this appeal is, whether the stock proposed to be issued and sold will create a fictitious increase of stock. Webster's dictionary defines the word "fictitious" to mean feigned, imaginary, not real, counterfeit, false, not genuine. The circumstances under which the stock is proposed to be issued and sold, as above stated, are, that the corporation has actual need of money for the purposes of its business, that the stock is proposed to be sold at the actual market value of the stock of the corporation, and to be sold only in such quantities as may produce the requisite funds. Under such circumstances, we think, it cannot be held that the issue is fictitious. Perhaps it might be asked at what price should stock be offered for sale in order to make the issue fictitious. We apprehend that no direct and positive answer can be given. The constitution has given no definition of the word "fictitious," it has not declared what was meant by the use of that word, further than what the word itself implies, taken into connection with the context. We apprehend that in ascertaining the purport of the word, or rather its application, we must take into consideration the surrounding circumstances. Of the stock proposed to be issued, there is no one share upon which a person can place his finger and say that share is or will be feigned, imaginary, not real, counterfeit, false, not genuine. Each share is offered at a price equal to the price of any one of the old shares. So far from the new shares being fictitious as to the old shares, it may be that burdens which would otherwise rest on the old shares, to wit, the payment of the corporation debts, will be entirely removed by the application of the funds realized, or shared in pro rata by the new shares. We cannot say but that this removal of such burdens, or the sharing therein, will be of the value of the discount in the price at which the new shares are proposed to be sold, or increase the actual value of the old shares to their par value. It may very properly be said that the use of the word "fictitious the constitution, as above quoted, was as in contrast with the preceding sentence-as if to say, that stock issued for money paid,

in

labor done or property actually received (price not named) is not

fictitious.

We do not think the issue or sale of the stock in question is within. the prohibition of the constitution. Order affirmed.

Ross, J., MORRISON, C. J., SHARPSTEIN, J., and MCKINSTRY, J., concurred.

No. 8,451.

YIK HON ET AL v. SPRING VALLEY WATER WORKS.

Department One. Filed September 24, 1884.

NEGLIGENCE-CONTRIBUTORY-COMPLAINT PLEADINGS.-In an action to recover damages for negligence, the plaintiff need not aver in his complaint that he was not guilty of contributory negligence.

CONTRIBUTORY NEGLIGENCE-DAMAGE BY WATER. -In an action to recover for the damage done by a water company in negligently permitting water to escape from its street-main, and to fall on and through to the roof of an adjacent building, and damage goods therein, the fact that the scuttles of such roof were open does not constitute contributory negligence.

THE SAME VARIANCE-FINDINGS.-In such action, when it is alleged that the goods damaged were in the building, proof that some of them were on the roof is not a material variance. A finding that such goods were on the premises of the plaintiff is sufficient.

APPEAL from a judgment of the superior court for the city and county of San Francisco, entered in favor of the plaintiff, and from an order denying the defendant a new trial, in an action to recover damages for injury done to plaintiff's goods through the negligent escape of water from one of the defendant's street mains. ther facts appear in the opinion.

The fur

Fox & Kellogg, for the appellant. Thomas D. Riordan and William Leviston, for the respondent. MCKINSTRY, J. 1. Plaintiffs allege in their complaint that the water which escaped from defendant's main, by reason of the negligence of its servants, was cast and fell in great quantities on the roof of their house, and thence descending to the floors below, destroyed their drugs, etc. Appellant, demurring to the complaint, contends that, as appears therein, the injury would not have occurred if the roof of plaintiffs' house had been water-tight and the scuttles therein closed; that plaintiffs, therefore, were guilty of contributory negligence. Plaintiffs were not required to aver that they were not guilty of contributory negligence: Robinson v. W. P. R. Co., 47 Cal., 46. Nor does the allegation that the water passed through the roof, or through openings in the roof, establish that plaintiffs contributed to the injury. They had the right to use their own premises for any lawful purpose. If they had placed their goods in canvas tents, this would not have relieved defendant of the consequences of its wrongful act. There was no such relation between the omission to provide means by which water would be effectually excluded from their building and the tort complained of as would make plaintiffs in any degree participants in the conduct which caused the damage. As has been said: "The right of a man. to make free use of his property is not to be curtailed by the fear