40. Where the charter of a railroad corpo- | number of shares, and that the company might ration provides that the capital stock shall therefore proceed to make and enforce calls, consist of not more than a certain number of shares, "the number of which shall be determined from time to time by the directors thereof," the directors have no power to levy assessments upon subscribers for stock, before determining the whole number of shares. Mass. Supreme Ct. 1851, Worcester & Nashua Railroad. Hinds, 8 Cush. 110; 1857, Troy &c. R. R. Co. v. Newton, 8 Gray, 596. under the statute, and to collect the deficiency remaining, after the sale of forfeited stock. Mass. Supreme Ct. 1847, Lexington & West Cambridge R. R. Co. v. Chandler, 13 Metc. 311. 45. how proved. The records of a corporation are competent and sufficient evidence to show who were the corporators and the number of shares that had been taken at the time of an assessment, unless some proof be preme Ct. 1855, Penobscot Railroad Co. v. Dummer, 40 Me. 172; 1856, Penobscot R. R. Co. r. White, 41 Me. 512. 46. The books of the corporation are the usual and proper evidence of its dealings;— e. g. of the number of its shares that have been subscribed for;-but are not indispensa 41. Where the charter of the company re-introduced to destroy their effect. Me. Suquires that the capital stock he not less than 500 nor more than 10,000 shares, of $100 each, and authorizes the directors to assess upon 500 shares, as soon as subscribed, and from time to time to enlarge the capital to the maximum amount named in the charter, all the shares to be equally assessed, it is not necessary for the company to define their cap-bly necessary, for if they cannot be referred ital, within the prescribed limits, before making calls. N. H. Supreme Ct. 1856, White Mountains R. R. Co. v. Eastman, 34 N. H. 124. 42. Nor is it necessary, in order to entitle the corporation to recover the assessments so made, that notice should have been given to the governor, of the assessments, according to the provisions of the third clause of section 2 of the N. H. act of 1846, relating to corporations. Ib. 43. The charter of a railroad corporation provided that the capital stock should be not less than 4,000 shares, but the precise number was not fixed in any mode by the company. By a contract of subscription a party agreed to take and pay the assessments on certain shares upon certain conditions, none of which required the least number of shares made necessary by the charter, to be taken. And one condition was that no share should be assessed more than a certain amount. Held, that such subscriber was liable under a provision in the charter, if his shares sold for less than the unpaid assessment thereon, although the minimum number of shares fixed by the charter had not been subscribed for. Me. Supreme Ct. 1855, York & Cumberland Railroad Co. v. Pratt, 40 Me. 447. 44. Where the directors were authorized to limit the number of shares, but could not proceed with the road until 250 shares were subscribed, and after that number were taken, they resolved to close the books,-Held, that this vote was equivalent to a vote fixing the to, other evidence may be adduced. Mass. Supreme Ct. 1830, Central Turnpike Corporation v. Valentine, 10 Pick. 142. See RECORDS. 47. Subsequent completion not enough. That, if calls are made before the requisite stock is subscribed, no recovery can be had, although the subscription is completed before action brought-see Norwich & Lowestoffe Navigation Co. v. Theobold, 1 Moody & M. 151; Stratford & M. Railway Co. v. Stratton, 2 Barn. & Ad. 518. 48. Receivers. Receivers appointed for an insolvent corporation, under an order of a court of chancery, with authority to collect unpaid instalments from stockholders, possess the powers which are given by the charter of the corporation to the directors in such cases, both as to the time of payment and the amounts to be called in. Md. Ct. of Appeals, 1847, Hall v. United States Ins. Co. 5 Gill, 484. As to the powers and duties of Receivers of insolvent companies, in respect to making calls upon stock, see RECEIVER; also the titles of the various kinds of corporations. 49. Assignees. An assignee of the company, for the benefit of their creditors, has no power to make assessments. N. Y. Supreme Ct. 1855, Hurlbut v. Carter, 21 Barb. 221. To the same effect, 1855, Hurlbut v. Root, 12 How. Pr. 511; to the contrary, 1853, Hill v. Reed, 16 Barb. 280. Compare N. Y. Laws of 1854, 502, ch. 224. As to the power and the proper way to make Assessments upon premium notes given withstanding defects in the way it was kept. to mutual insurance companies, see INSURANCE COMPANIES; RECEIVERS. II. WHO IS LIABLE FOR ASSESSMENTS. 50. Liability of an original subscriber. As to what constitutes a person a shareholder in an English railway company so as to render him liable for calls,-see Wolverhampton &c. Co. v. Hawkesford, 6 Com. B. N. S. 336. 51. That a shareholder in an English public company, who has signed the deed which is registered to procure incorporation, cannot avail himself, as a defence to an action for calls, of any omission from the deed, of certain provisions required, by the general statute authorizing incorporation, to be inserted therein, see Banwen Iron Co. v. Barnett, 14 Jur. 112; 19 L. J. N. 8. C. P. 17. See Bain v. Whitehaven &c. Junction Railway Co. 3 Ho. of L. Cas. 1; London &c. Railway Co. r. McMichael, 5 Exch. 855; London Grand Junction Railway Co. v. Graham, 2 Eng Railw. Cas. 870. But compare Birkenhead &c. Railway Co. v. Brownrigg, 6 Eng. Railw. Cas. 47; 4 Exch. 426; 19 Law J. N. S. Exch. 27. 57. Register book of subscriptions may be evidence to charge a subscriber in an action for calls, notwithstanding it does not state the amounts of subscriptions paid on the respective shares. See Birmingham &c. Railway Co. v. Locke, 1 Ad. & E. N. S. 256; 2 Eng. Railw. Cas. 867; 1 Q. B. 256. 58. Effects of steps to forfeit stock, as a discharge. One who had subscribed for stock held liable in an action for calls, notwithstanding initiatory steps had been taken, to forfeit his stock for the default, and his vote, offered at a corporate meeting had been rejected because his calls were unpaid. See Birmingham &c. Railway Co. v. Locke, 1 Ad. & E. N. S. 256; 2 Eng. Railw. Cas. 867; 52. But one who had taken shares in a projected railway company, but without executing the deed of settlement, or any deed referring to it, was held not liable to contribute to the expense incurred, in attempting to put the company in operation; especially 1 Q. B. 256; Aylesbury Railway Co. r. Mount, as his acceptance of the shares was con- 5 Scott N. R. 147 n; 12 Law J. N. S. Exch. ditioned upon the full amount of the capital 474. of the company being subscribed, which was never done. Exch. 1852, Galvanized Iron Co. v. Westoby, 14 Eng. L. & Eq. 386; 21 Law J. N. S. 302; 16 Jur. 892; 8 Exch. 17. 53. Erasure of name of a prior subscriber from the subscription, not enough to discharge a subsequent subscriber. See Agriculturist Cattle Ins. Co. v. Fitzgerald, 15 Jur. 489; 20 Law J. N. S. Q. B. 244. 54. It is not a sufficient reason for refusing to pay an assessment, that the corporation was not organized until after the defendant had subscribed for his shares. Conn. Supreme Ct. 1853, Danbury & Norwalk R. R. Co. v. Wilson, 22 Conn. 435. 55. If all the shares are taken up by solvent subscribers in good faith, although some of them, whether before or after the corporate powers are exercised, become unexpectedly insolvent, the corporation may nevertheless lay assessments, and the subscribers may be compelled to pay them. Mass. Supreme Ct. 1829, Salem Mill-Dam Corporation v. Ropes, 9 Pick. 187. 56. "Register of shareholders" of English railway companies,-Held admissible to charge persons named therein for calls, not 59. Where shares are allotted to one upon the express condition that they shall be forfeited, if a certain deposit is not paid in a certain time, and nothing more is done by the allottee, he is not liable for calls, although the company have entered his name upon the register of shares, as a shareholder. Exch. 1852, Waterford &c. R. R. v. Piddock, 18 Eng L. & Eq. 517. 60. That, in a suit by a corporation against one of its members to recover instalments due on stock, the defendant cannot plead that, by reason of his default respecting another instalment, he had forfeited to the corporation all the shares subscribed by him, and that the amount thus forfeited was equal to the amount claimed in this suit,—see Herkimer &c. Co. v. Small, 2 Hill, 127. 61. Effect of transfer of shares, as a discharge. That when the charter authorizes the subscribers to assign their shares, an original subscriber is not liable for any call made after assigning his share,—see Huddersfield Canal Co. v. Buckley, 7 Durnf. & E. 36. And see Wilson v. Birkenhead &c. Railway Co. 20 Law J. Exch. 306. 62. That where the company accept a con veyance of shares to themselves, it will exonerate the owner from calls,-see Plate Glass Insurance Co. v. Sunley, 29 Law Times, 277. 63. The charter of a company provided that the stock might be "transferred on the books of the company," and the company were authorized "to regulate the transfer of stock," by by-laws. And a provision in the charter authorized the company, in certain cases, to make assessments of stockholders beyond their shares of stock. Held, 1, that no such assessment could be made on a party, after he had ceased to be a member, by a transfer of his stock. 2. The power "to regulate the transfer" did not include the power to restrain transfers, or to prescribe to whom they might be made, but merely to prescribe the formalities to be observed in making them; and that the company could not prevent a party from selling his stock, even to an insolvent person 3. That an assignment "upon the books of the company" was sufficient to effect a change of ownership, without taking out a new certificate in the name of the assignee; and that any transfer in writing was valid against the company, if, being notified, they refused to allow it to be made according to their by-laws. Mo. Supreme Ct. 1855, Chouteau Spring Co. v. Harris, 20 Mo. 382. 64. What will operate as a transfer. A plea to an action to recover calls on stock subscribed, that another person had agreed to take the stock, and that the commissioners had counted this stock to such other person, is insufficient. The signature of the first subscriber should have been erased, and that of the other substituted, or something done to hold the latter liable. A subscriber for stock cannot subrogate another person to his obligation, without a substitution of his name upon the books of the company, or some other equivalent act recognized by the charter and by-laws of the company. Ill. Supreme Ct. 1851, Ryder v. Alton & Sangamon R. R. Co. 13 IU. 516. 65. Transfer on the company's books necessary. That a shareholder is presumed to continue in that character till a transfer of his shares is duly registered. Corden v. Universal Gas-Light Co. 6 Dowl. & L. 379; Midland Great Western Railway Co. v. Gordon, 5 Eng. Railu. Cas. 76; 16 Mees. & W. 804; Sayles c. Blane, 6 Eng. Railw. Cas. 79; 14 Jur. 87; 19 Law J. Q. B. 19. 66. An action for a call upon shares in an English Railway Company-Held not to lie against a party who had transferred his shares after the call had been made, and before it was payable, and after the company had entered a memorial of the transfer. Aylesbury Railway Co. v. Mount, 2 Dowl. N. S. 143; 5 Scott N. R. 127. 67. An allottee of scrip in an English railway company, who has subscribed the subscribers' agreement, and sold his scrip in the market before the act of Parliament is obtained, although his name has been entered on the register of shareholders without his consent, continues liable for calls until the name of the purchaser is inserted in the register of shareholders. Since the 8 & 9 Vict. c. 16, the sale of scrip certificates of shares in a railway company does not constitute the vendee a shareholder in the company, and only conveys an equitable title to have the shares assigned to him, and his name entered on the register as such shareholder. Exch. 1847, Midland Great Western Railway Co. v. Gordon, 11 Jur. 440; 16 Law J. Exch. 165. 68. Where the by-laws provided that transfers of stock should be made by assignment in the treasurer's book, either in person or by attorney,-Held, that to render a transfer valid, so as to make the assignee liable in an action for assessments brought against him as a stockholder, there must be a written assignment on the book, subscribed by the assignor or his attorney. An entry of credit to the assignee, on the book, for the amount of the stock, was insufficient. Conn Supreme Ct. 1818, Marlborough Manufacturing Co. v. Smith, 2 Conn. 579. 69. Liability of transferees. A stockholder in a corporation cannot avoid liability for assessments made upon his shares of stock, either upon the ground that he was not an original subscriber, but is an owner by purchase, or on the ground that he has made no express agreement to hold himself individually liable. Subscribing means nothing more than becoming a stockholder, and the obligation to pay springs solely from that relationship. Mich. Supreme Ct. 1866, Merrimac Mining Co. v. Bagley, 14 Mich. 501. 70. There is no principle of law which can establish any difference among stockholders, in the duties which are implied from that relation. The very essence of a corporation consists in its corporate succes sion, which, in stock companies, is kept up by the substitution of one owner for another in the proprietorship of shares. If the original stockholders stand under different relation to the company from their assigns, the corporation itself loses some of its attributes by the substitution, or else becomes introduced into more complicated relations. Every liability, therefore, which attaches to a stockholder as such, is inseparable from the ownership of the stock. Ib. 71. Where the proprietor of shares transferred them upon the books of the company, after calls were made, but before they fell due, -Held, that the transferee was liable for such calls, although he had never received certificates, or given notice to the transferrer of the acceptance of the transfer. And it was held to make no difference, that the transfer was from an original subscriber, without consider ation, and that the holder is nevertheless liable for unpaid calls. Pa. Supreme Ct. 1837, West Philadelphia Canal Co. v. Innes, 3 Whart. 198; Conn. Supreme Ct. 1838, Hartford & New Haven R. R. Co. v. Boorman, 12 Conn. 530; C. P. 1842, Aylesbury R. v. Mount 2 Dowl. N. S. 143; 5 Scott N. R. 127. 72. A transferee of shares in the stock of an incorporated company, subject to the payment of future calls, is not personally liable for such unpaid instalments, in the absence of any provision in the act of incorporation to this effect. Pa. Supreme Ct. 1859, Palmer v. Ridge Mining Co. 34 Pa. St. 288. 73. That one to whom, or for whose benefit, shares of stock in an English railway company are made over, as security, without their being transferred into his name on the books of the company, is not liable to an action for arrears of calls upon such shares,-see Newry &c. Railway Co. v. Moss, 14 Beav. 64; 15 Jur. 437; 20 Law J. Ch. 633. 74. That the defendant in an action for calls may, under a traverse of his being a shareholder, prove that he was not such de jure as well as de facto,- -see Shropshire Union Railways & Canal Company v. Anderson, 6 Eng. Railu. Cas. 56; 6 Dowl. & L. 482; 3 Exch. 401; 13 Jur. 175; 18 Law J. 232. As to how far Transferees of stock succeed to the engagement of the original subscriber, see STOCK. 75. Liability of representative of deceased shareholder. Under a statute declaring that on the death of a shareholder his representative shall not be entitled to take profits or to vote upon the shares until he has registered his name as a proprietor, the executors of a deceased proprietor are liable, as executors, for calls, notwithstanding they have not registered their names. The representative becomes entitled to the shares, and liable as owner, before registry; but until registry, he is not entitled to take profits or to vote. Chancery, 1842, Fyler v. Fyler, 2 Eng. Railw. Cas. 873; 3 Beav. 550; 12 Law J. N. S. Ch. 23; 7 Jur. 185. And see Jacques v. Chambers, 4 Eng. Railwo. Cas. 499; Shaw v. Fisher, 5 Eng. Railw. Cas. 461. 76. Liability of infant. As to liability of an infant for calls,- --see Leeds & Thirsk Railway Co. v. Fearnley, 7 Dowl. & L. 68; 18 L. J. Exch. 330; Newry & Enniskillen Railway Co. v. Combe, 3 Railw. Cas. 633; 3 Exch. 565; 18 L. J. Exch. 325; North Western Railway Co. v. McMichael, 5 Exch. 114; Birkenhead &c. Railway Co. v. Pilcher, 5 Exch. 121; 14 Jur. 297; 15 Jur. 132; 19 Law J. Exch. 207; 20 Law J. Exch. 97; 6 Railw. Cas. 622;. Cork & Bandon Railway Co. v. Cazenove, 10 Q. B. 935. When a 78. Subscriber when estopped. defendant is sued as a stockholder in a railroad corporation for the sum remaining due on an assessment upon his shares, after they have been sold for non-payment of the assessment, it is competent and sufficient, for the purpose of showing him to be such stockholder, and liable for the assessment, to give evidence that he signed a subscription-paper for shares, before the corporation was organized, that he attended the meeting of the stockholders for the organization of the corporation, and that he wrote and distributed votes, and himself voted for directors. Mass. Supreme Ct. 1847, Lexington & West Cambridge R. R. Co. v. Chandler, 13 Metc. 311. 79. In an action to recover unpaid assessments upon shares of the stock of a railroad company, an agreement between the defendant and a third person, by which the latter agreed to subscribe for stock in said company, and the former guaranteed to him dividends, equal to six per cent. per annum, on the stock subscribed for by him, in pursuance thereof, was Held, to be admissible in evidence, for the purpose of showing that the defendant procured others to subscribe to the stock of said company, and the inducements which he held out for that purpose. Conn. Supreme Ct. 1853, Danbury & Norwalk R. R. Co. v. Wilson, 22 Conn. 435. 80. Payment of instalments on a subscription to its stock, is a sufficient recognition of the legal existence and organization of a corporation by the subscriber so paying, to enable it to recover the remaining instalments from him. Md. Ct. of Appeals, 1860, Maltby . Northwestern &c. R. R. Co. 16 Md. 422. 81. A subscriber who has paid an illegal assessment is not thereby estopped from setting up illegality as a defence to a suit for a second. Me. Supreme Ct. 1858, Somerset &c. R. R. Co. v. Cushing, 45 Me. 524. 85. And where one has paid calls on shares, or attended meetings of the company, as the proprietor of shares, he is estopped to deny membership. Q. B. 1841, London Grand Junction Railway Co. v. Graham, 2 Eng. Railw. Cas. 870; 1 Q. B. 271; Exch, 1829, Cromford & Highpeak Railway Co. v. Lacey, 3 Younge & J. 80. 86. Defendant in actions for calls,-Held to have been made liable as a proprietor by his own acts, notwithstanding the provisions of the statute, necessary to make him a proprietor, had not been complied with. See Cheltenham &c. Railway Co. v. Daniel, 2 Ad. & E. N. S. 281; 2 Eng. Railw. Cas. 728; West Cornwall Railway Co. v. Mowatt, 19 Law J. 478. See also ESTOPPEL; MEMBERS; STOCKHOLDERS; STOCK. 87. Director, when estopped. That a stockholder, also a director, is not estopped from disputing, as a stockholder, his liability for a call, by the fact that as a director he voted for imposing it; nor by the fact that he has made a part payment upon it,-see Stratford & Moreton Railway Co. v. Stratton, 2 Barn. & Ad. 519. 82. Where a commissioner appointed to receive subscriptions for railroad stock, subscribed for shares in his own name and then united with other commissioners in making a return to the governor, which stated that the 88. Transferee, when estopped. A buyer subscriptions were in all respects made and of shares who has made false representtaken in good faith and agreeably to the pro-ations to the company, to induce them to visions and requirements of the laws of the State, and that he had subscribed for twenty shares, and on the strength of this return the charter was granted,-Held that, in an action for assessments upon the subscription, he was estopped from showing that it was made upon a condition which had not been complied with. Pa. Supreme Ct. 1859, Bavington v. Pittsburg &c. R. R. Co. 34 Penn. St. 358. 83. A subscriber for shares in a corporation may, by his acts, be estopped from denying the legality of assessments upon his shares, on the ground that all the shares are not taken up. N. H. Superior Ct. 1855, N. H. Central R. R. Co. v. Johnson, 10 Fost. 390. 84. In an action for calls, it was found, upon a special verdict, that, before the calls were made, the defendant was registered as a shareholder, and that he knew he was registered, and that he adopted the registry, and acted as a shareholder ;-Held, that, upon such finding, the defendant was presumptively liable for calls. Q. B. 1850, West Cornwall Railway Co. v. Mowatt, 15 Jur. 101; 15 Q. B. 521. enter his name upon the register of shares, is estopped to deny the validity of the transfer so obtained, in an action against him for calls. Exch. 1841, Sheffield &c. Railway Co. v. Woodcock, 2 Eng. Railw. Cas. 522; 7 Mees. & W. 574; London Grand Junction Railway Co. v. Freeman, 2 Eng. Railw. Cas. 468. 89. Where the party represented himself to the company as the owner of shares, and sent in scrip certificates, which had been purchased by him, claiming to be registered as a proprietor, in respect thereof, and had received from the company receipts therefor, with a notice that they would be exchanged for sealed certificates on demand, he was held estopped to deny his liability for calls, although his name had not been entered upon the register of shareholders, or any memorial of transfer entered, as required by the act. Q. B. 1841, Cheltenham &c. Railway Co. v. Daniel, 2 Eng. Railw. Cas. 728; 2 Ad. & E. N. S. 281; Cheltenham &c. Railway Co. v. De Medina, 2 Eng. Railw. Cas. 735. For some grounds of Defence to an action for assessments, sce infra, 147–152. |