* 6. An agreement to take stock and pay in the stock of a canal company, and an offer of the canal stock, will not make the party liable to pay money.14

7. Infancy is a good defence, if the person be an infant at the

pressed in the written terms of subscription, and that it is not competent to deliver a written contract, as an escrow, to the party himself. For, to admit oral evidence of such a condition, in the delivery of a written contract to the party benefited thereby, is a practical abandonment of the rule of evidence, that such testimony is incompetent to control a written contract.

It has been held, that it is not competent for the commissioners to accept the check of a subscriber in payment of the amount required by the charter to be paid at the time of subscription, but that specie, or its equivalent, must be demanded. Crocker v. Crane, 21 Wend. 211; s. c. 2 Am. Railw. C. 484. But this is at variance with the general course of decision, unless in regard to banks, where the charter expressly requires the payment to be in specie. King v. Elliott, 5 Sm. & M. 428.

And where the charter of a railway company was made to depend upon the condition of the company expending $50,000 in two years, and completing the road in four years from the date of the grant, and the company having failed in the first part of the condition, but having obtained subscriptions to their stock to a large amount, and the defendant being one of the subscribers, the company having organized, and chosen directors, the defendant being one of them, the legislature revived and renewed the charter, and extended the time for the performance of such condition; and subsequently to this, a meeting of the stockholders was called by the commissioners, in which the defendant took part, additional directors being appointed, and at a meeting of the directors, the defendant being present, a call was made upon the subscriptions, it was held that this amounted to an acceptance of the renewal of the charter, and was such a recognition of the former organization of the company, as to amount to a sufficient organization under the new charter, and the defendant was held to be estopped by his conduct from denying the regularity of these proceedings, and to be liable to pay calls on his stock. Danbury & Norwalk Railw. v. Wilson, 22 Conn. R. 435.

Where the general railway law, under which a company is organized, requires a payment of ten per cent upon each subscription before the filing of the articles of association with the secretary of state, it is sufficient, if the cash payments, by whomsoever made, amount in the aggregate to ten per cent. upon $1,000 for each mile of the road proposed to be constructed. Lake Ontario, A. & New York Railw. v. Mason, 16 N. Y. Court of Appeals, 451. And the subscription to stock before the incorporation of the company, is obligatory upon the company, although the subscriber make no cash payment whatever, the right of membership thereby acquired being a sufficient consideration for the subscription. Ib.

14 Swatara Railw. v. Brune, 6 Gill, 41.

time of suit brought, or if he repudiate the subscription within a reasonable time after coming of full age.15 By the general provisions of the English statute, all persons may become shareholders, there being no exception, in terms, in favor of infants; and if one be registered while an infant, and suffer his name to remain on the registry after he becomes of full age, he is liable for calls, whether made while he was an infant, or afterwards.1

16

15 North W. Railw. v. McMichael, 5 Exch. 114; Birkenhead Railw. v. Pilcher, 5 Exch. 121; s. c. 6 Railw. C. 622. s. c. 6 Railw. C. 622. The party should also deny having derived any advantage from the shares, or offer to restore them. N. W. Railw. v. McMichael, 5 Exch. 114; Leeds & T. Railw. v. Fearnley, 4 Exch. 26; Dublin & W. Railw. v. Black, 16 Eng. L. & Eq. 556; s. c. 8 Exch. 181. See also Deposit & G. Life Assur. Co. v. Ayscough, 6 E. & B. 761.

16 Cork & Bandon Railw. v. Cazenove, 10 Q. B. 935. But it would seem that infants are not comprehended, by the general terms of the English statute. Birkenhead &c. Railw. v. Pilcher, supra.

It has been said that an infant shareholder, or subscriber, in a railway company, is in the same situation as in regard to real estate, or any other valuable property, which he may have purchased and received a conveyance of. If, upon coming of age, he disclaim the contract, and restore the thing, with all advantages arising from it, his liability is terminated, and he cannot be made liable for calls. Parke, B., in Birkenhead & C. Railw. v. Pilcher, 6 Railw. C. 625. The infant is not regarded as merely assuming an executory undertaking, which is void on the face of it, but in the nature of a purchaser of what is presumed to be valuable to him.

Where, therefore, there is nothing but the simple fact of infancy pleaded to an action for calls, it is insufficient. Ib. It would seem that the plea should contain averments, showing the disadvantageous nature of the contract to the infant, his repudiation of the contract, and restitution of all benefits decreed under it, on coming of full age, or that he is still an infant, and is ready to do so, upon coming of full age. McMichael v. London & N. W. Railw., 6 Railw. C. 618; Birkenhead & C. Railw. v. Pilcher, 6 Railw. C. 564, 662. plea of infancy is an immaterial plea, and issue being joined thereon, and found for defendant, the plaintiff is still entitled to judgment veredicto non obstante.

Ib.

The mere

The plea must show that the infant avoids the contract of subscription, on his coming of full age. Leeds and Thirsk Railw. v. Fearnley, 5 Railw. C. 644; s. c. 4 Exch. 26. And the appearance by attorney is not equivalent to an averment that the defendant is of full age. Ib.

But where the plea alleged, that the defendant became the holder of shares, by reason of his having contracted and subscribed for them, and not otherwise; and that at the time of his so contracting or subscribing, and also at the time of making the calls, he was an infant; and that while he was an infant he repudiated the contract and subscription, and gave notice to the plaintiffs that he held

It seems to be * doubted by the English courts whether the statute of limitations as to simple contracts applies to an action for calls, that being a liability imposed by statute, and so to be regarded as a specialty."

17

8. Bankruptcy is a good defence for calls made after the certificate of bankruptcy issues, but to meet liabilities incurred before.18

9. One of the commissioners appointed with five others at a given place to take subscriptions to a railway, has no right in doing so to give any assurance as to the line of location that would be adopted by the road.19

10. And where the subscription is made upon condition of the road going in a particular route, the plaintiff may show that the defendant owned land upon that route. And any representations of the agents taking the subscriptions, as to the ultimate value of the stock, will be regarded as matters of opinion merely upon which the subscriber had no right to rely.2 20

the shares at their disposal; it was held a good primâ facie bar; and that if the defendant, after he came of full age, disaffirmed his repudiation, or if he become liable, by enjoyment of the profits, those facts should be replied. Newry & Enniskillen Railw. v. Coombe, 3 Exch. 565; s. c. 5 Railw. C. 633.

Where shares were sold to an infant, and were duly transferred to him, on the declaration of the vendor that he was of full age, and the father of such infant, by a deed, reciting that he had purchased on behalf of the son, and covenanting that he, on coming of age, would execute the deed, and pay all calls, and that the father would indemnify the company against all costs, by reason of the son being an infant, it was held that the father was a contributory. Ex parte Reaveley, 1 De G. & S. 550. See also Stikeman v. Dawson, 4 Railw. C. 585; s. c. 1 Deg. & S. 90.

17 Cork & B. Railw. v. Goode, 24 Eng. L. & Eq. 245.

18

Chapple's case, 17 Eng. L. & Eq. 516; s. c. 5 De G. & Sm. 400.

19 North Carolina Railw. v. Leach, 4 Jones Law, 340.

20 Vawter v. Ohio & Miss. R. Co., 14 Ind. R. 174.

*90

§ 56. 1. There can be no doubt, that subscribers to the stock of a railway company are released from their obligation to pay calls by a fundamental alteration of the charter. This is so undeniable, and so familiar a principle, in the general law of partnership, as not to require confirmation here. We shall briefly advert to the points decided in some of the more prominent cases, in regard to incorporated companies. The general doctrine applicable to the subject is very perspicuously stated by Woodbury, J., in an early case in New Hampshire.1 "Every owner of shares expects, and stipulates, with the other owners, as a corporate body, to pay them his proportion of the expenses, which a majority may please to incur, in the prosecution of the particular objects of the corporation. To make a valid change in this special contract, as in any other, the consent of both parties is indispensable."

2. In an important case 2 where it appeared that after calls fell

1 Union Locks & Canal Co. v. Towne, 1 N. Hamp. R. 44. But where the original charter or preliminary contract provides for modifications, the subscribers are still bound by all such as come fairly within the power. Cork & Youghal Railroad v. Patterson, 37 Eng. L. & Eq. 398; post, § 254, n. 6; Nixon v. Brownlow, 30 Law Times, 74. s. c. 3 H. & N. 686.

2 Hartford & New Haven Railw. v. Croswell, 5 Hill, 383. In Winter v. Muscogee Railw., 11 Ga. R. 438, the charter was so altered as to allow the road *91

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due, but before suit brought, the company, being incorporated for the purpose of building a railway, procured an additional special * act, by which they were authorized to purchase steamboats: it was held, that a subscriber, not having assented to the alteration, was absolved from his obligation to pay calls.

3. In a very elaborate opinion of Bennett, Chancellor, upon this subject, the following propositions are established:

to stop short of its original terminus and pass in a different route, and subscribers to the stock were held thereby released, unless they assented to the alteration. But where one gave his note for the first instalment, and his stock was forfeited, for non-payment of calls, he is not relieved from payment of his note by a material alteration of the charter. Mitchell v. Rome Railw., 17 Ga. R. 574. But any modification of the charter which affects merely the detail of proceedings in making and enforcing calls will not release subscribers to the stock, when such modification has been accepted by the corporation. Illinois River Railw. Co. v. Beers, 27 Illinois R. 185.

3 Stevens v. Rutland & Burlington Railw., 29 Vt. R. 545. The opinion at length is a valuable commentary upon this important subject. In this opinion the learned chancellor maintains,

1. That by the implied contract, among the proprietors of all joint-stock undertakings, there is a tacit inhibition against applying the funds, for any purpose beside the general scope of the original enterprise, and that this applies to corporations, equally with commercial partnerships. Natusch v. Irving, Gow on Part. App. 567. And that courts of equity will restrain a corporation from thus misapplying its funds by injunction. Ware v. Grand Junction Water Co., 2 Russell & Mylne, 461. And that this will be done upon the application of those shareholders who dissent. And in some instances will restrain the company from applying to the legislature for an enlargement of their powers. Cunliff v. Manchester & Bolton Canal Co., 13 Eng. Cond. Ch. 131; s. c. 2 Russell & My. 470, 475; Livingston v. Lynch, 4 Johns. Ch. 573.

2. That if the proposed alteration is only auxiliary to the main design of the original organization, it will not be enjoined; but if it be fundamental, it will

be.

That a variation in the course of a turnpike-road has been regarded as a fundamental alteration in the charter, Middlesex Turnpike Co. v. Lock, 8 Mass. R. 268, and, as such, to exonerate subscribers to the stock of the original company. [But Irvine v. The Trunpike Co., 2 Penn. R. 466, holds it will not have that effect.] And that in such cases it will make no difference, that the subscriber was a director in the company, and joined in the petition to the legislature for the alteration. Same v. Swann, 10 Mass. R. 384; Same v. Walker, 10 Mass. R. 390.

The learned chancellor regarded the case of Revere v. The Boston Copper Co., which was cited, by the counsel for the defendants, as making rather against his purpose. 15 Pick. 351, 363. The case of Hartford & New Haven Railw. v. Croswell, 5 Hill, 383, 385, is relied upon, as having defined a fundamental