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cases, on the ground that the case be- for assessments, he is liable to no action fore the court was that of a corporation for them by virtue of his membership." organized for private profit merely. The In Maine, in the case of The Kennebec court, however, overruled the distinc- 8. Portland Railroad Co. v, Kendall, 31 tion, and held that there was no personal Me. 470 (1850), the subscription was liability of the defendant to the corpora- simply for shares at $100 per share. tion, though, under the Massachusetts The charter gave the power to ordain law, in case of a deficiency of corpora- and establish such by-laws tion assets, the stockholders were per- from time to time be deemed necessary sonally liable to answer an execution

and proper, &c.; also, to make and colagainst the company.

lect such assessments on the shares of The above cases have been considered

the capital stock as may be deemed exby some, amongst others by the late

pedient, in such manner as shall be preChief Justice REDFIELD (Redfield on

scribed by their by-laws." A by-law Railways, 249), as resting upon the fact

was passed authorizing assessments and that in them the shares were given no forfeiture for non-payment, and one par value, but were simply made liable

holding the delinquent personally liable. to assessments, and a line of cases, of

SHEPLEY, C. J., said : " When the which The Cabot & West Springfield language of a charter or statute does Bridge Co. v, Chapin, 6 Cush. 50, is an not in terms authorize the corporation example, gives support to this idea, and

to make a call personally on a holder viewed in this light these cases are per- of stock, or impose upon him a perhaps reconcilable with the current of sonal obligation to pay,

but authorizes a authority elsewhere, but the court itself

collection by sale of the shares, the does not seem to have rested on that

construction in this and in most of the ground alone or principally in making other states has been that no personal its decisions, as appears from the words obligation to pay was imposed." of Parsons, C. J., in the first-men- It will be observed that in this, unlike tioned case, in which the learned judge the Massachusetts cases, there was a seems to import the rule of strict con- value affixed to the shares of stock, and struction of the criminal law into re

a consequent limitation of liability, so medial civil legislation.

that this is an uncompromising stateIt is, however, admitted that a sub

ment and enforcement of the doctrine scription affords sufficient consideration of the exclusive remedy by forfeiture. for a promise to pay, when expressly These, it is believed, with a case to made, and that in that case the mere be hereafter noticed, are the principal existence of a right of forfeiture will cases in which it has been held that a not deprive the company of the action special promise to pay for stock taken of assumpsit : WVorcester Turnpike Co. is necessary to render the subscriber, in v. Williard, 5 Mass. 80; Taunton fi the absence at least of a statutory enactSouth Boston Turnpike Co. v. Whiting, ment, liable in assumpsit. The case of 10 Mass. 331.

The Hartford f New Haven Railroad In New Hampshire, the same doctrine Co. v. Kennedy, 12 Conn. 500 (1838), has obtained, having been announced in is a strong enunciation of the contrary The Franklin Glass Co, v. Alexander, 2 doctrine. The charter of the company N. H. 380 (1821), in which Wood- provided for a sale of stock in case of BURY, J., remarked : “ It is well settled delinquency. The defendant subscribed that when an act of incorporation gives and paid a portion of the price of the no express remedy against a member stock; the subscription-list contained

no express promise to pay. On a fail. assert that the cases are not strongly ure to pay assessments, the company analogous to or are distinguishable from waived the forfeiture and sued in as- the present case.

If the court are to be sumpsit for the arrears.

On the argu

understood as establishing and applying ment the Massachusetts and New Hamp- to all statutes in no sense penal, the shire cases were brought to the notice position that, where a new power is of the court. HuntiXGDOX, J., said : given by a statute which also prescribes " It is true, a promise to pay in precise the mode of its execution, those who terms does not appear to have been made. claim the power can exercise it in no The defendant has not affixed his sig- other way, we feel constrained to say, mature to an instrument which contains we cannot give to decisions founded on the words I promise to pay, but he has such a position the force of law in this done an equivalent act. He has con- state.

* * * When a common-law remtracted with the plaintiffs to become a edy is not taken away by the statute member of their corporation, and to be which prescribes a new one, the latter interested in their stock to the extent of is merely cumulative. A statute made $100 for each share assigned him, if in the affirmative, without any negative that amount be required. * * * When, expressed or implied, does not take away therefore, the subscribers associated un- the common law : Co. Litt. 115." der the act and became stockholders to This case was followed by Ward v. effect this object, and which could be Griswoldville Manuf. Co., 16 Conn. 593 accomplished only by the advance of (1844), in which WAITE, J., said : money in payment of the instalments, “What obligation did a stockholder it seems difficult to give any other assume upon himself when he subscribed legal meaning to their act than that it for a share of the stock of this comwas equivalent to an express promise to pany? The answer obviously is that pay their respective proportions of the he agreed to pay the sum of $100 in capital when lawfully demanded. Such such instalments, and at such time, as a construction of their engagement har- shall be required by the directors." monizes with the entire design of their In New York, the earliest case in which association, is in furtherance of its the question of the remedy where a forobject, does no injustice to the stock- feiture is permitted by statute arose, is holders, and affords all the security, Jenkins v. Union Turnpike Co., 1 Caines which can reasonably be required by the 381, and i Caines Cas. in error 86, public or the creditors of the corpora- (1804), wherein, though the case was tion, that the object will be consum- ultimately decided against the company mated and the debts of the company on another ground, LANSING, Ch. J., faithfully discharged.” After noticing said, "This is an affirmative statute. It the Massachusetts cases, the learned is a maxim of the common law that a judge spoke of the absence in them of statute made in the affirmative without an expressly given power to demand any negative expressed or implied, doth payment of assessments, and of the dis- not take away the common law. Therecretion given to the companies to fix fore, the plaintiff may either have his the value of their stock, and continued : remedy by the common law or upon the We are not sure, however, that the statute.” L'HOMMEDIEU, Senator, who highly respectable judicial tribunal which delivered the only other opinion, howdecided these cases was governed by any ever, maintained the opposite, or as it of the peculiar circumstances to which may be called, the Massachusetts docwe have referred, nor will we contidently trine.

In Troy Turnpike and Railroad Co. v. McChesney, 21 Wend. 296 (1839), Nelson, Ch. J., said : “ All the cases from 1 Caines 381 to 14 Johns. 238, show that the condition of forfeiture of stock and all previous sums paid, for the non-payment of any subsequent instalment, is but a cumulative remedy given to the company.

* * * It is true the forfeiture clause is carried into the subscription papers. I cannot think that this circumstance alters the case."

In The Fort Edward and Fort Jriller Plank-road Co. v. Payne, 17 Barb. 569 (1854), the main question as to the effect of a stock subscription per se, was considered, Hand, P. J., saying: “I think the principle to be deduced from the decisions is that if the act of incorporation or any public statute declares the subscription to the stock or the proprietor of the shares shall pay calls made thereupon, or if he agrees to do so, whether in the articles of association or other legal instrument, he is personally liable, even although the corporation has power to forfeit his stock for non-payment.

* * * But where there is a right of forfeiture given, either by the act of corporation or by the terms of the subscription, but no absolute duty to pay is imposed by statute, and there is no promise to pay, neither the subscriber to the stock nor the shareholder is personally liable to the corporation for calls." lle then raised an implied promise from a prior article of association. This case was reversed, 15 N. Y. 583, on another ground, but no opinion was given by the Court of Appeals on the position taken by the court below on the subject of the subscription ; but in The Buffalo and New York Railway Co. v. Dudley 14 N. Y. 336 (1856), the question was fairly met by the Court of Appeals, T. A. Jousson, J., delivering the opinion, saying: “I am of opinion, therefore, that the agreement which the defendant subscribed is only

an agreement to take the stock of the corporation. But upon this undoubtedly the law raises an undertaking to pay the amount subscribed." It had been previously so held by a Supreme Court in Rensaeller and Washington Plank-road Co. v. Wetzel, 21 Barb. 56 (1855); see also Troy and Boston Railroad Co. v. Tibbets, 18 Barb. 297.

It is also held that while the remedies of forfeiture and by action are cumulative, yet a resort to the former will bar the latter, on the ground of a rescission of the original contract between the company and the subscriber : Buff. and N. Y. Railway Co. v. Dudley, supra ; Small v. Herkimer Manufacturing Co., 2 Conn, 330, reversing 21 Wend. 273.

The first question does not seem to have arisen fairly in Pennsylvania. In the first case there on the subject of subscription-Delaware Canal Co. v. Sansom, 1 Binney 70 (1803)—there was a power of forfeiture given by statute and a subscription paper headed as follows: “ We * * * * promise to pay the sum of $200 for every share of stock in the said company in such manner and proportions and at such times as shall be determined by the president and managers,” &c. This was held a sufficient promise to bind the original subscriber ; as to the remedy, it was held that the forfeiture might be waived and suit brought for instalments. YEATES, J., howerer, Smith, J., concurring, intimated that an express promise was necessary to hold the subscriber, though an opinion on that point was not called for in the phase assumed by the case. In Verrimne Vina ing Co. v. Lry, 4 P. F. Smith 229 (1867), Strong, J., delivering the opinion of the court, showed a decided tendency to follow the case in 12 Conn., and his language would justify the syllabus, which is as follows : "

By the act of subscribing to the capital stock of an incorporated association each associate undertakes to raise his proportion of

the capital as it may be called for by the In Connecticut, in The Hartford and directors.” In Frank3 Oil Co. v. Mc- New Haven Railroud Co. v. Boorman, Cleary, 13 P. F. Smith 319 (1869), how- 12 Conn. 531 (1838), HUNTINGDON, J., ever, Thompson, Ch. J., remarks on said : “ The reasons for our decision, the foregoing case and reduces its effect subjecting the original subscribers to to that of a mere registration of the law personal liability, apply with equal force of Michigan, as expounded by the Su- to those who become stockholders by preme Court; the case having arisen un- purchase. The relation of stockholder der a Michigan charter, although the and company exists. A privity between language of Judge STRONG would seem them is established." to take a broader range, and to be a In New York, Mann v. Currie, 2 species of precursor of his opinion in the Barb. 294 (1848), it is said: “If he principal case. We may, therefore, say became a holder by a transfer to him of that in Pennsylvania the question as to the stock of an original subscriber, he the personal liability of an original sub- at once adopted his contract and became scriber without a special promise, is un

substituted in his place, both as regards settled, but that the law is, that forfeit- his rights and liabilities." ure, where given, is a merely cumulative In Maryland, Bend v. Susquehanna remedy and may be waived.

Bridge and Banking Co., 5 Har. & J. That forfeiture is a merely cumula- 128 (1823), the court said: “ The tive remedy is also held in Illinois : charter authorizing transfers and deKlein v. Alton and Sangamon Railroad claring all who may become the actual Co., 13 II. 514 (1851); Peoria and proprietors of shares in the capital stock, Oquawka Railroad Co. v. Elting, 17 Ill. either as subscribers for the same or as 429 (1856); in Mississippi: Freeman the legal representatives, successors or v. Winchester, 10 Sm. & M. 577 (1848); assignces of such subscribers,' to be a in Michigan : Dexter and Juson Plank- body politic and corporate, necessarily road Co. v. Dillerd, 3 Mich. 91 (1854). creates a privity and raises an assumpIn Michigan indeed the cases go even sit, on the part of such as choose to befurther, and after a sale of the stock, come stockholders by accepting transwhich sale has not brought enough to fers, to pay all such calls as may be cover the arrears, allow assumpsit to be regularly made, on which an action will brought for the deficiency. See Carson properly lie.” V. Arctic Mining Co., 5 Mich. 288, in This case follows very closely Lord which a distinction is taken between a Kenyon's opinion in Huddersfield Casale and a forfeiture.

nal Co. v. Buckley, 7 T. R. 36 (1796), III. The liability of a transferree of wherein he said : “ After the assignment stock for calls, made after he has be- the assignees hold the shares on the come a proprietor of stock.

same conditions, and are subject to the Of course, in those states where an ex- same rules and orders as the original press promise to pay has been held ne- subscribers, and are to all intents and cessary to hold the original subscriber, purposes substituted in the place of the in the absence of any duty imposed by original subscribers." statute, or declared thereby to arise out In Pennsylvania, in The Canal Co. v. of the mere ownership of shares, à for- Sansom, supra, Yeates, J., said: “ The tiori the transferree cannot be held in the shares the defendant holds as transferabsence of a promise to pay on his part : ree stand on a different ground; as to Franklin Glass Co. v. Alexandur, supra, them he has given no express promise to is a fair statement of this view of the law. pay, and the act has made no other pro

Vol. XXIV.-82

vision than that the shares should be shares of the capital stock of a jointforfeited." The case was followed in stock company, like other contracts of Palmer v. Ridge Mining Co., 10 Casey sale and purchase, is binding until per288 (1859), criticised in Merrimac Min- formed or released by the concurring ing Co. v. Levy, supra, but recognised assent of the parties, and consequently as binding authority in Franks Oil Co. a buyer of such stock cannot discharge v. McCreary, supra.

himself of his liability to pay for it by In The Merrimac Mining Co. v. Bag- a transfer of it to a third party, without ley, 14 Mich. 501 (1866), the court said: the consent of the company.” He also “There is no principle of law which held that the company could not arbitracan establish any difference among rily withhold its assent, but only for stockholders in the duties which are cause. The verdict and judgment were implied from that relation. The very for the company, which judgment was essence of a corporation consists in its affirmed by the Supreme Court, though corporate succession, which, in stock the judges differed on the grounds of companies, is kept up by the substitu- affirmance. WOODWARD, J., said: “On tion of one owner for another in the the next question, which relates to the proprietorship of shares."

right of the defendant to transfer his The statement in Angel & Ames, stock so as to escape liability for the sect. 534, quoted in the opinion, as to unpaid instalment, we

are a divided the shifting of the burden from the out- bench ; but a majority concur, though going subscriber to the incoming stock- for different reasons, in holding him liaholder, so far as it relates to the relief ble, notwithstanding the transfer he of the former, is a little too broadly put, made. Two of us think that he had a and is unsupported by some at least of perfect legal right to assign on any the authorities cited in the foot-note. terms he pleased, but that unless it was The Aylesbury Railway Co. v. Mount, 5 done with the assent of the company, he Scott N. R. 127, and The West Phila- remained liable for the unpaid portion delphia Canal Co. v. Innis, 3 Whart. of his subscription. One of our num198, were not actions against original ber is of opinion that if the assignment subscribers ; while in Cowles v. Cromwell, had been bonâ fide it would have re25 Barb. 413, the bank had assented to leased him from further liability, but the transfer. Brigham v. Mead, 10 Al- that the record showing it was mala fide len 245, would seem to go the length he remains liable.” Lewis, C. J., of the text-book statement, but the re- said : “ Whether the transfer was fair port contains no very full statement of or fraudulent, whether with the consent facts. On the other hand, there is au- of the company or without it, whether thority to the effect that in order to pro- entered on the books or not, whether tect itself, the corporation has a right the purchaser became liable for the into refuse to release an original sub- stalments unpaid or not, there is nothscriber by the acceptance of a new stock- ing in the law or in the nature of the holder, until the stock is fully paid up. transaction, which discharges the origiIn Everhart v. The Philadelphia & West nal subscriber from his express written Chester Railroad Co., 4 Casey 339 engagements to pay the money." (1857), the company refused to permit In a similar case, decided in the fall of a transfer, and brought suit against the the same year, Pittsburgh & Steubenville subscriber for arrears after the attempted Railroad Co. v. Clarke et al., 5 Casey assignment. In the Court of Common 146, in the court below, Hampton, P. Pleas, HAINES, P. J., charged as fol. J., had rested upon the law as stated in lows : "A contract for the purchase of Angel & Ames, sect. 534, and left to

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