no ground for allowing an action to be maintained for the money paid, or any defence to the notes given for the balance."

* 3. It is an essential condition to making calls, in those companies where the number of shares and the amount of capital is fixed, that the whole stock shall be subscribed before any calls can lawfully be made. And if calls are made before the requisite stock is subscribed, although the subscription is completed

3. That the suspension of operations made by the directors long after the payments upon defendants stock had been due, was not a defence in an action brought against him for the unpaid balance thereon. Miller v. Pittsburg & Connellsville Railw., 40 Penn. St. 237.

It was held in one case that where the charter required subscriptions by responsible persons of a certain proportion of the estimated cost of the work before entering upon the construction, that it was not necessary for the company to show compliance with this requirement in order to enforce calls. Nor does the right to make calls depend upon the extent or nature of the indebtedness of the company; nor can a subscriber defend against calls by showing that a portion of the requisite amount of subscriptions to bind the defendant were made by persons of no actual or reputed pecuniary responsibility, unless he also show that they were not made or taken in good faith. Penobscot Railw. v. White, 41 Me. 512. And the bad faith cannot be shown by the declarations of the subscribers, made long after making such subscriptions. Ib. And where the charter of a corporation requires that one thousand shares shall be subscribed before the organization of the company, the decision of the majority of the subscribers that this condition has been complied with, and the actual organization of the company in pursuance of the decision is binding upon the minority. Ib. This will not preclude the minority from defending on the ground that the proceedings of the majority were in bad faith.

2 Nutter v. Lexington & West Cambridge Railw., 6 Gray, 85.

* Stoneham Branch Railway Co. v. Gould, 2 Gray, 277; Salem Mill-Dam Co. v. Ropes, 6 Pick. 23; s. c. 9 Pick. 187; Cabot & West Springfield Bridge Co. v. Chapin, 6 Cush. 50; Worcester & Nashua Railway Co. v. Hinds, 8 Cush. 110; Lexington & West Cambridge Railway Co. v. Chandler, 13 Met. 311; N. Hampshire Central Railway Co. v. Johnson, 10 Foster, 390.

But a subscriber for shares in a railway company is liable for calls, although by a subsequent amendment of the charter of the company the capital stock is limited to four thousand shares, and that number has not been subscribed, there being no such condition, either in the charter of the company, or the terms of subscription, at the time of subscribing. York & Cumberland Railway v. Pratt, 40 Maine R. 447. But the number of shares required by the charter must be subscribed, as stated in the text. Penobscot Railway v. Dummer, 40 Maine R. 172. But the records of the company are evidence of such fact. Ib. Same v. White, 20 Law Rep. 689; s. c. 41 Maine R. 512; Peake v. Wabash Railw., 18 Illinois R. 88.

before action brought, no recovery can be had. But it has been held, that the general provision in the charter of a railway act, that so soon as 1,500,000l. shall have been subscribed, it shall be lawful for the company to put in force all the powers of the act, authorizing the construction of the railway, and of the acts therein recited, being the general railway acts, did not require such subscription to be made before making calls, but only before exercising compulsory powers of taking land.5

4. And where the charter provides that the members might divide the capital stock into as many shares as they might think proper, and by a written agreement the subscribers fixed the capital stock at $50,000, divided into 500 shares of $100 each, and only one hundred and thirty-eight shares had been subscribed, it was held no assessment for the general purposes of the corporation could be made."

*5. And where the charter of a railway company requires their stock to consist of not less than a given number of shares, assessments cannot be made before the required number is taken. And in such case conditional subscriptions are not to be reckoned, even where the condition is acceded to by the company, if the subscriber still repudiates the subscription, on the ground that the condition is not fully performed by the contract drawn up in form. And the plea of the general issue, is no such ad

* Norwich & Lowestoft Navigation Co. v. Theobold, 1 Moody & M. 151; Stratford & M. Railway Co. v. Stratton, 2 B. & Ad. 518. And see Atlantic Cotton Mills v. Abbott, 9 Cush. 423, where a condition in a subscription for stock, that the capital stock of the company should not be less than $1,500,000, was held a condition precedent to making calls.

5 Waterford, Wexford, & W. Railway Co. v. Dalbiac, 6 Railw. C. 753; s. C. 4 Eng. L. & Eq. 455. But the American cases will not justify such a construction. It would here be held a condition precedent to the right to make calls, or even to maintain a corporate existence, probably.

• Littleton Manufacturing Co. v. Parker, 14 N. Hamp. R. 543; Contoocook Valley Railway Co. v. Barker, 32 N. Hamp. R. (1 Fogg, R.) 363.

Where the condition of a bond given for the amount of a railway subscription was, that the same should be paid when the road was "completed" to a certain village, it was held that the condition was performed when the road was made to the suburbs of the village, in such a manner, as to allow daily trains on it, carrying all the freight and passengers that offer, although some portion of the work was only temporary. O'Neal v. King, 3 Jones, 517; Chapman v. Mad River & Lake Erie Railway Co., 6 Ohio St. 119.

mission of the existence of the company, as to preclude subscribers from contesting the amount of subscriptions, to enable the company to make calls."

6. And where the charter originally required 11,000 shares to be the minimum, and when less than 10,000 were subscribed, the company was organized, and the subscriptions accepted, and assessments made, and afterwards, by an act of the legislature, accepted by the corporation, the minimum was reduced to 8,000 shares, in an action to recover assessments, made on defendant's shares, before and after such alteration of the charter, it was held:

1. That the minimum was a condition precedent, to be fulfilled by the corporation, before the subscribers were liable to

assessments.

2. That the alteration of the charter will not affect prior subscribers.

3. Nor will the defendant be estopped from relying upon this

Any condi

' Oldtown & Lincoln Railw. Co. v. Veazie, 39 Maine R. 571. tion the subscriber sees fit to annex to his subscription must be complied with before the subscriber is liable to assessments. Penobscot & Kennebec Railw.

Co. v. Dunn, 39 Maine R. 587.

A condition, that not more than five dollars on a share shall be assessed at one time, is not violated by two or more assessments being made at one time, if only five dollars is required to be paid at one time. Ib. Penobscot Railw. v. Dummer, 40 Maine R. 172. And the same principle already stated, that where the conditions of a subscription required seventy-five per cent.of the estimated cost of any section of the road to be subscribed, by responsible persons, before its construction should be commenced, if the subscriptions were obtained in good faith, assessments will be valid, although some of the subscriptions to make up the amount, prove worthless, is here also maintained. Ib.

And where the charter of the company requires that the capital stock be not less than five hundred, nor more than ten thousand shares, of $100 each, and authorizes the directors to assess upon five hundred 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 capital, within the prescribed limits, before making calls. White Mountains Railw. v. Eastman, 34 N. H. R. 124.

It is doubtful if the directors of a railway have power to release subscribers to stock, but at all events, where the release is optional with the subscriber, he must make his election to be released, and in a reasonable time. Penobscot & Ken. Railw. v. Dunn, 39 Maine R. 587. See also Troy & Greenfield Railw. v. Newton, 8 Gray, 596.

condition, by having acted as a shareholder and officer in the corporation, and contributed towards the expenses of the company.

4. That corporators, by any acts or declarations, cannot relieve the corporation from its obligation, to possess the capital stock, required by its charter.8

7. Where the charter of a railway company provided for assessments by the directors of the company upon the shares of the stock, as they might deem expedient and necessary in the execution and progress of the work, provided "that no assessment shall be laid upon any share in said corporation of a greater amount than one hundred dollars in the whole, *** and if a greater amount of money shall be necessary to complete said road it shall be raised by creating new shares," it was held that the charter limited the amount of all the assessments to one hundred dollars on a share, and that assessments beyond that sum, made for the purpose of paying the debts of the company, were illegal.8

8. Where the charter of a railway company fails to fix the number of shares of the capital stock, it must be presumed to have been the purpose of the legislature that the corporation should limit the number. And this must be done before any valid assessments can be made. In such case, if the number fixed exceed the number subscribed, the company may change the number; but the assessments must be made upon the whole number, and if an assessment be made before the number ultimately fixed is subscribed, it will be irregular and void. A subscriber who has paid one assessment is not thereby precluded from insisting upon this irregularity in defence to others.9

9. Where the charter of a railway company as originally granted limited the amount of stock at a point which the subscription never reached, but by a subsequent alteration of the charter the amount of the capital stock was reduced, and after the subscriptions reached that amount the company was duly organized, it was held that the alteration in the charter did not release prior subscribers.10

* Great Falls & Conway R. Co. v. Copp, 38 N. H. R. 124.

9 Som. & Ken. R. Co. v. Cushing, 45 Me. R. 524.

10 Bedford Railw. Co. v. Bowser, 48 Penn. St. 29.

*SECTION VI.

Calls may be made payable by Instalments.

§ 52. It was at one time considered that calls made payable by instalments were invalid.1 But it seems now to be settled that such mode of making calls, where the directors of the company have an unlimited discretion, as to the time and mode of requiring payments of the subscriptions, is unobjectionable.2

3

But where the subscription contains a provision, that payment shall be made, at such times and places as should thereafter be directed by the directors, and shall be applied to the construction of the road, it was held, that the subscription did not become payable, until the directors, at a regular meeting, had fixed the time and place of payment. But it is further held, in this case, that it is not necessary to give notice to the subscribers of the time and place of payment. This point in the decision seems not altogether in accordance with the usual practice in such cases, or the general course of decision in regard to calls, which upon general principles must be notified to subscribers before an action can be maintained. But where the subscription is made payable in instalments of ten per cent every sixty days as the work progresses, it is not important that any formal call or demand be made.4

Where the charter gives the corporation power to collect subscriptions to the capital stock by such instalments as the president and directors shall deem proper, they may make contracts with subscribers for the payment of subscriptions in any reasonable instalments, as to time and place, and if such condition were ultra vires, it would render the whole contract void, and not the condition merely.5

1

Ambergate, N. & Boston & E. J. R. v. Coulthard, 6 Railw. C. 218; Stratford & M. R. v. Stratton, 2 B. & Ad. 518.

2 London & M. W. R. v. M'Michael, 4 Eng. L. & Eq. 459; Ambergate R. v. Norcliffe, 4 Eng. L. & Eq. 461; Birkenhead, L. & Ch. R. v. Webster, 6 Railw. C. 498.

3 Ross v. Lafayette & Ind. Railw., 6 Porter (Ind.), 297.

1 Breedlove v. M. & F. Railw., 12 Ind. R. 114; Smith v. Ind. & Ill. Railw., Id. 61.

5 Roberts v. Ohio & Mobile Railw. 32 Mississippi R. 373.