III. How ASSESSMENTS SHOULD BE LAID. 95. Presumption. The charter of a turnpike company provided, that a general meeting of the company should be holden annu90. Requisites of meeting of stockhold- ally, and that the meetings, after the first, ers. In a suit against a stockholder for an should be holden at such time and place as assessment, the circumstances under which he the company should prescribe; that the afattended the meeting at which the assessment fairs of the company should be governed by a was made are immaterial, as regards the legal-board of directors chosen by the stockholders ity of the organization, and the right to make in general meeting; and that the officers assessments. Me. Supreme Ct. 1856, Penob- chosen by the company should hold their offiscot R. R. Co. v. White, 41 Me. 512. 91. of directors. Where the charter of an incorporated plank-road company authorized the stockholders to make calls for payment on subscriptions for stock, and to appoint a board of directors, consisting of stockholders, "to manage the business of the corporation,"-Held, that the stockholders might, by resolution, after the organization of the company, delegate to the board of directors the power to call in stock. Ala. Supreme Ct. 1857, Rives v. Plank-road Co. 30 Ala. N. S. 92. 92. In an action to recover an assessment on subscriptions to the capital stock of a railroad company, the defendant may prove that the order for such assessment was made by less than a majority of the directors and is therefore void; and subsequent action by the whole board under this order will not amount to a ratification. Ind. Supreme Ct. 1859, Price v. Grand Rapids &c. R. R. Co. 13 Ind. 58; Cowley v. Same, 13 Ind. 61; Hamilton v. Same, 13 Ind. 347. And see Swansea Dock Co. v. Levien, 7 Eng. L. & Eq. 535. 93. Averment. In a suit against a stockholder for assessments, which, under the charter, could only be made by the board of directors, the averments that "the corporation was organized," and that "the board of directors of said corporation made assessments," &c. are sufficient averments of the existence of the board of directors. Ark. Supreme Ct. 1859, Mississippi &c. R. R. Co. v. Gaster, 20 Ark. 455. 94. In a suit on a contract made with a corporation to pay in such portions and at such times as the directors of the corporation, agreeably to their act of incorporation and by-laws, require, it is not sufficient to aver that the directors required and ordered that the defendant pay an assessment of, &c. Conformity to the charter and by-laws should be alleged. N. H. Supreme Ct. 1859, Atlantic Mut. Fire Ins. Co. v. Young, 38 N. H. 451. ces until others should be appointed in their stead. It appeared that, at the first meeting, seven directors were duly appointed, and that a by-law was passed, authorizing the directors to order the payment of instalments, but that the time and manner of holding future meetings were not prescribed; that two instalments were laid by directors chosen at subsequent meetings, four of whom were chosen at the first meeting; and that the defendant expressly promised to pay those instalments more than thirty days after the last was laid. In an action against the defendant for these instalments,-Held, that, as the votes laying these instalments purported to be passed by the directors of the company, the presumption of law was, in the absence of evidence to the contrary, that they were passed by legal directors, and that the instalments were legally imposed. Conn. Supreme Ct. 1839, Turnpike Co. v. Thorp, 13 Conn. 173. As to the general requisites of Meetings, see MEETINGS. 96. What notice of object of meeting is necessary. An assessment upon paid stock, when authorized by charter, can be made at a special meeting, only when notice is duly given to the stockholders of the purpose of the meeting; nor does a clause in the charter declaring, that "all or any business of the corporation may be transacted, or acted on," at such a meeting, nor a by-law, passed in pursuance of the charter, prescribing how notice of special meetings shall be served upon the stockholders, dispense with the necessity of specifying in such case the purpose, in the notice of the meeting. R. I. Supreme Ct. 1858, Atlantic De Laine Co. v. Mason, 5 R. I. 463. 97. As to what notice is necessary to be given of the object of a meeting held for the purpose of laying an assessment,-see Wills v. Murray, 19 Law J. Exch. 209; Swansea Dock Co. v. Levien, 20 Law J. Exch. 447; Sheffield &c. Railway Co. v. Woodcock, 7 Mees. & W. 574; 2 Eng. Railw. Cas. 522; | are binding. Me. Supreme Ct. 1855, PenobTurnpike Co. v. Meriwether, 5 B. Monr. 13. scot & Kennebec R. R. Co. v. Dunn, 39 Me. 98. What constitutes an 66 assessment." 587; Penobscot R. R. Co. v. Dummer, 40 Me. By the term "assessment" is meant a rating by the board of directors, by instalments, of which notice is to be given. Ill. Supreme Ct. 1859, Spangler v. Indiana &c. R. R. Co. 21 Ill. 276. 99. or a call." That a resolution of the board of directors of a railway company that a call be made, is the call,-see Erp. Tooke; in re Londonderry & Coleraine Railway Co. 6 Eng. Railu. Cas. 1. 100. That a circular letter sent to every shareholder in a railway company, informing him that the directors have resolved on making a call, constitutes the call,-see Shaw v. Rowley, 16 Mees. & W. 810; 5 Eng. Railu. Cas. 47; Newry & Enniskillen Railway Co. v. Edmunds, 5 Eng. Railw. Cas. 275. 101. That a call may mean either the resolution or its notification, or the time when it is payable,-see Ambergate &c. Railway Co. v. Mitchell, 6 Eng. Railw. Cas. 235; 4 Exch. 540. 172 103. In order to recover subscriptions to stock in a railway company, which is to be called for in proportions, it must appear that the instalments were called for periodically; and not that the assessments therefor were all made at one time, without notice of previous assessments. Ill. Supreme Ct. 1859, Spangler v. Indiana &c. R. R. Co. 21 Ill. 276. 104. Instalments. If the directors have a general power to make calls, a call is not invalid because it is imposed for a gross sum payable in several instalments. It is not necessary that each instalment should be the subject of a separate call. Exch. Ch. 1851, Ambergate R. R. Co v. Norcliffe, 4 Eng. L. & Eq. 461; 20 Law J. N. S. Exch. 234; Exch. 1851, Birkenhead &c. R. R. Co. v. Webster, 6 Railw. Cas. 498; 4 Eng. L. & Eq. 461.* 105. Form of the resolution. Where the charter of a mutual insurance company provides that all assessments shall be determined by the directors, and lays down the rules by 102. What amount may be called for. Where one condition of the defendant's sub-which the amount to be raised, and the manscription to the stock of a railroad corporation was, that "assessments shall not exceed five dollars on each share at one time," and two or more assessments are laid at one time, but payment of no more than five dollars on each share required at one time, the condition is not violated, and the assessments *The English statute of 1845, called "The Companies Clauses Consolidation Act," requires all calls to be paid before any valid transfer can be made. Under this statute, and similar provisions in special charters, it has often been made a question, when a call may be said to be made. It seems to be considered that the word "call," in this connection, may refer to the resolution of the directors by which a ner in which it is to be apportioned, are fixed, all that is necessary is, that the directors determine by vote that an assessment be made; and such vote is a sufficient requirement of a payment to be made. N. H. Supreme Ct. 1858, Atlantic Fire Ins. Co. v. Sanders, 36 N. H. 252. 106. Calls made by a treasurer under general authority given by the board of directors are valid, although the resolutions do not specify the amount of each call. Pa. Supreme Ct. 1860, Hays v. Pittsburgh &c. R. R. Co. 38 Pa. St. 81. 107. Where a corporation was limited to fifteen per cent. calls per annum, and ten per cent. had already been called, it was held immaterial that the last call did not specify the amount, time, or place of payment, the accompanying notice pointing out the time and place. Ind. Supreme Ct. 1860, Andrews v. Ohio &c. R. R. Co. 14 Ind. 169. certain sum is required to be paid to the company, by shareholders, or secondly, to the notice to the shareholders of the assessment, and the time and place at which they will be required to make payment, and the amount to be paid. But it seems finally to be settled, that the company are not obliged to regard any transfer, made after the resolution of the directors making the assessment; which need not specify the time of payment, but that may be determined by a subsequent act of the board. 1 Redf. on Railw. 146. See Exp. Tooke; in re Londonderry & Coleraine Railway Co. 6 Eng. Railu. Cas. 1; North American Colonial Association of Ireland, Bentley, 19 Law J. 427; 15 Jur. 187; Great to make a call need not specify either the North of England Railway Co. v. Biddulph, 2 Eng. Railw. Cas. 401; 7 Mees. & W. 243; Newry & Enniskillen Railway Co. v. Edmunds, 5 Railw. Cas. 275; 2 Erch. 118, 122; Ambergate &c. Railway Co. v. Mitchell, 6 Eng. Rail. Cas. 235; 4 Ezch. 540; Regina v. Londonderry & Coleraine Railway Co. 13 Q. B. 998; Shaw v. Rowley, 11 Jur. 911; 16 Law J. Ex.h. 180; Skinner c. Lambert, 4 Mann. & G. 477. 108. That the resolution of the directors * Earlier cases to the contrary, overruled by those in the text, are Ambergate &c. Railway Co. v. Coulthard, 6 Eng. Railw. Cas. 218; 5 Exch. 459; 14 Jur. 625; 19 Law J. Exch. 311; Stratford &c. Railway Co. v. Stratton, 2 Barn. & Ad. 519. time or place of payment, though the direc-| Ct. of Appeals, 1847, Hall v. United States tors must appoint a time and place, which Ins. Co. 5 Gill, 484. must be notified to the shareholders by a notice allowing them twenty-one days for making payment,— ‚—see Newry & Enniskillen Railway Co. v. Edmunds, 5 Eng. Railw. Cas. 275. 109. A vote of the directors requiring instalments to be paid at the times therein designated, but which did not, in terms, make them payable to the treasurer of such corporation; construed to mean that such instalments were payable to the treasurer, he being the proper officer to receive and keep the moneys of the corporation. Conn. Supreme Ct. 1853, Danbury & Norwalk R. R. Co. v. Wilson, 22 Conn. 435. 110. By a charter of a bridge corporation, subscribers to stock were required "to pay assessments to the treasurer of the trustees, at such times and in such proportions as the trustees shall direct; and in default of payment, it shall be lawful for the trustees to sue for or recover the same, in the name of their treasurer, by action of debt or on the case," &c. The order of the trustees directed the money to be paid into a certain bank to be placed to the account of P. M. as treasurer: Held, that the treasurer was sufficiently designated in the order, and that the form of action might be either in debt or on the case. Q. B. 1843, Miles v. Bough, 3 Gale & S. 119; 7 Jur. 81; 12 Law J. N. S. 74; 3 Ad. & E. N. S. 845. 111. What demand is necessary. No other demand for payment of an assessment is necessary than that prescribed by the by-laws of the corporation. Me. Supreme Ct. 1855, Penobscot R. R. Co. v. Dummer, 40 Me. 172. 112. Verbal notice, sufficient. If the charter of the corporation does not require a written notice of calls for stock, a verbal notice by the secretary, given by order of the president, in pursuance of a resolution of the board of directors, is sufficient. Ala. Supreme Ct. 1857, Smith v. Plank Road Co. 30 Ala. N. S. 650. 113. Notice in newspapers. Notice to stockholders in a corporation to pay instalments of stock may be given by publication in the newspapers where the corporation usually transacts its business. A similar notice may be given by receivers of an insolvent corporation, appointed by the court. Md. 114. How far provisions of charter are directory. Where the charter prescribes that "payment of the shares of the capital stock shall be made in such sums, and at such periods as shall be fixed by the board of directors; provided, that sixty days' notice be given of each call, published in at least two newspapers in South Arkansas, and one in the city of Little Rock;" the giving sixty days' notice is a condition precedent to the right of action by the company, but the provisions as to the mode of giving notice are directory; and personal notice is sufficient. Ark. Supreme Ct. 1859, Mississippi &c. R. R. Co. v. Gaster, 20 Ark. 455. But compare Tomlin v. Tonica &c. R. R. Co. 23 Ill. 429. 115. Where the declaration in such case set forth the days on which the assessments sued for were made, alleging that the defendant then had notice, and was requested to make payment-Held, on demurrer, that the court would look to the time of filing the declaration to ascertain whether the sixty days had expired. Ib. 116. A by-law of a railroad corporation provided, that in case of a sale of shares for non-payment of assessments, "the treasurer should give notice to the delinquent owner, when his residence was known, of the time and place of sale, by letter seasonably put into the mail." Held, that this by-law was directory to the treasurer, and not a condition precedent; and that a written notice of the time and place of sale, signed by the treasurer, and delivered to the owner of the shares, or left at his dwelling-house, and received by him as soon as he was entitled to receive it by mail, was sufficient. Mass. Supreme Ct. 1847, Lexington &c. R. R. Co. v. Chandler, 13 Metc. 311. 117. Giving personal notice of an assessment laid by a mutual fire insurance company is a sufficient publication, within the meaning of a provision in their charter, requiring an assessment to be paid "within thirty days after notice of said assessment shall have been published." Mass. Supreme Ct. 1856, Jones v. Sisson, 6 Gray, 288. 118. A railroad charter authorizing the sale of the stock of delinquent subscribers, required notice of the assessment to be given thirty days before the order of the directors for the sale of the shares; that the sale should be by public auction, at the post-office in C.; | and that the treasurer should give to the subscriber a notice in hand, signed by the treasurer, or by a director in his behalf. Held, 1. That a notice of the assessment thirty days before the sale was insufficient. 2. That a sale otherwise than by public auction at the post-office in C. was invalid. 122. Where an act of incorporation provided, that "in all cases where it might be necessary for the trustees to give any notice in writing to any person whatever, under the provisions of the act," such notice was to be signed in a particular manner,-Held, that in an action against a shareholder for calls, the declaration averring that the defendant had had "due notice" of such calls, to wit, "by notice in writing signed," &c. (in the manner pointed out by the act), it was necessary to prove a notice signed in the manner so pointed out, although the act did not contain any express provision, that notice in writing of calls should be given to shareholders. Q. B. 1843, Miles r. Bough, 3 Gale & S. 119; 12 Law J. N. S. 74; 7 Jur. 81; 3 Ad. & E. N. S. 845. 123. Notice of a call, published in the newspapers, presumed to be the act of the 3. That a notice to the subscriber in hand, not signed by the treasurer or a director, was insufficient. Me. Supreme Ct. 1860, Lewey's Island R. R. Co. v. Bolton, 48 Me. 451. 119. or may be waived. The design of the provision of the general railroad act of Connecticut, "That the president and directors of railroad corporations may direct the assessments on the shares to be paid to the treas urer, in such manner and with such notice as may be prescribed by the by-laws of said corporation," is not to make the mode of notice, therein mentioned, exclusive of all directors,-see Great North of England Railothers. And, therefore, where a corporation way Co. v. Biddulph, 7 Mees. & W. 243; 5 never passed any by-law, prescribing the Jur. 221. mode of such notice, and, at the meeting of the directors, of whom the defendant was one, and at which he was present, and acted, laid an assessment, and directed the treasurer to give notice to the stockholders, by advertising in a newspaper published in the town where the defendant resided,—Held, that the defendant had waived the right to claim that a by-law should be passed, prescribing the mode of notice. Conn. Supreme Ct. 1853, Danbury & Norwalk R. R. Co. v. Wilson, 22 Conn. 435. 120. Proof of notice, when necessary. In an action of assumpsit for subscription instalments, proof of actual notice of the call to the defendant, or demand upon him, is unnecessary, as knowledge is presumed. Ill. Supreme Ct. 1856, Peake v. Wabash R. R. Co. 18. Ill. 88. 121. Subscribers to the stock of a railroad company stipulated to pay the first instalment after the work should be commenced, "as shall hereafter be directed by the directors of said company." There was no stipulation for notice to the subscribers of the calling in of the instalment. Held, that no proof of notice or demand, other than an order passed as above, by the directors, and entered on the record-book, was necessary in a suit against a subscriber to recover said instalment. Ind. Supreme Ct. 1855, Ross v. Lafayette &c. R. R. Co. 6 Ind. 297. 124. and how it may be made. The subscribers to the stock of a railroad company promised by the terms of the subscription, to pay their respective shares “in such manner, and in such proportion, and at such times," as the company should direct. In an action on the subscription, the answer admitted the subscription, but denied other averments (not material to this point). Held, 1. That evidence of a personal notice of a call for stock was not requisite. 2. That it was not necessary to give the book containing subscriptions to the stock, in evidence. Ind. Supreme Ct. 1856, Fisher v. Evansville &c. R. R. Co. 7 Ind. 407. 125. Evidence that notices of an assessment laid by a mutual fire insurance company, addressed to each of the parties assessed, were made out either by the secretary or the treasurer of the company, and that the secretary carried some of them to the post-office, and the treasurer carried some, and that one of the members, when afterwards called upon for his assessment, refused to pay on other grounds than want of notice, are sufficient evidence of notice to him of that assessment, to be submitted to the jury. Mass. Supreme Ct. 1856, Jones v. Sisson, 6 Gray, 288. 126. In order to prove the service of a notice of a call, the plaintiff proved that it was the duty of C. to fill up the printed notices and direct them to the shareholders; that on As to the general power of a corporation to 133. Offset. Dividends. Where a corpo- the day of the call he had received instruc- | 162; Cahill v. Kalamazoo Mut. Ins. Co. 2 128. The affidavit of the newspaper clerk is sufficient evidence of the publication of a notice calling for instalments of stock in a newspaper. Ind. Supreme Ct. 1860, Andrews v. Ohio &c. R. R. Co. 14 Ind. 169. 129. What certificate of the secretary of a company, to the fact of publication of notice may be received,-see Tomlin v. Tonica &c. R. R. Co. 23 Ill. 429. 130. Notice by receiver, &c. That one officially appointed to wind up an insolvent company is not always bound to pursue the same method of giving notice of an assessment as imposed upon directors of the company,-see Hull &c. Co. v. Wellesley, 6 Hurlst. & Nor. 38. 131. That it is sufficient for him to pursue a mode which might be pursued by the company,-see Hall v. United States Ins. Co. 5 Gill, 484. IV. ENFORCING PAYMENT. 1. By corporate act. 132. Forfeiture. Forfeiture of the policy, for non-payment of assessments on the premium note, good, as a condition of the policy of a mutual insurance company,-see Beadle v. Chenango County Mut. Ins. Co. 3 Hill, 161, 134. That a corporation cannot set off a claim for unpaid assessments, in an action brought against them for a debt due to a stockholder, when the case is such that the assessment could not be recovered by a direct action by the company against the stockholder,- -see Cutler v. Middlesex Factory Co. 14 Pick. 483. 135. Sale of stock. Where a sale is authorized to pay unpaid assessments, it is not valid if made in whole or in part for an illegal assessment. Me. Supreme Ct. 1860, Lewey's Island R. R. Co. v. Bolton, 48 Me. 451. And see Stoneham Branch Railroad v. Gould, 2 Gray, 277. 2. By legal proceedings. 136. When an action lies. Upon the question whether, independent of a charter provision, a corporation may sue a subscriber upon his engagement to take shares, the authorities are not agreed. The doctrine in New York and some other States appears to be, to hold the provision in the charter to sell the shares as a remedy merely cumulative, and to sustain an action for assessments, without an express promise to pay, and before resort is had to a sale of the shares. [Citing 21 Wend. 296; 21 Wend. 273; 2 Hill, 127; 2 Barb. 294; 10 Barb. 260; 20 Conn. 178; 10 Smedes & M. 577; 6 Humph. 241; 5 Ala. 787; 3 Ala. 660; 2 Bibb, 577.] In Massachusetts the doctrine is otherwise, and it has there been held that where there is no express promise to pay the assessments, the remedy, in the first instance, is by a sale |