tariff of fares or freight must have the sanction of the corporation to become of binding obligation. But if established by the president and the business of the company transacted with reference to them, without objection, the consent of the company will be presumed. 18

14. There has been considerable controversy in the country, how far railway companies have the legal right to require colored passengers to sit in a particular car, or portions of the car. That right was maintained by the Supreme Court of Pennsylvania.18 But it has been denied in other courts. The recent amendments of the United States constitution, have been supposed by some to settle this question. There seems to be no sufficient reason why any such discrimination should now be made, and when the unfortunate animosities growing out of the former existence of slavery in the country shall have effectually subsided, it is to be hoped that any such questions will cease to be raised. Persons of the highest culture and refinement, as a general thing, feel less sensitive on this subject than others, and their example will constantly tend to lead others in the right path.

18 Westchester Railw. v. Miles, 55 Penn. St. 209.

§ 29. 1. ALL joint-stock companies are allowed to raise a certain amount, and sometimes an indefinite amount, of capital, by the subscription of the members; the corporation in fact, generally consisting of the contributors of stock and their assignees, which is divided into shares, transferable according to the by-laws and charter of the corporation, entitling the owner for the time being, to the rights of voting, either in person or by proxy, as a general thing, and to a participation in the profits of the enterprise.1

2. The capital stock of a corporation is not necessarily the limit of its property.2 It is not uncommon for charters of stock companies to contain restrictions and limitations in regard to their right or capacity to hold real estate, and sometimes even in regard to personal estate.

3. But railway companies, being created for the purpose of carrying into effect a definite enterprise, must almost of necessity have the power to issue sufficient stock to accomplish the undertaking, or to raise the requisite funds in some other mode, as by loan and mortgage. And where the stock is limited, and often where it is not, these corporations have been compelled, either to abandon the enterprise, or to resort to loans and mortgages, which being in some sense a desperate mode of raising funds, as long as the company have power to issue stock, could only be justified,

'Walford on Railways, 252; Penobscot Railw. v. White, 41 Me. 512.

2 Barry v. Merchants' Exchange Co., 1 Sandford's Ch. 280; South Bay Meadow-Dam Co. v. Gray, 30 Me. 547.

ordinarily, by a strict and fatal necessity, and by permission of the legislature, as is generally considered.3

SECTION II.

Conditions precedent, which the Public Authorities may enforce. 1. Stock, if limited, must all be subscribed. 2. Payments at time of subscription.

§ 30. 1. If, by the charter, the stock of the company is divided into a certain number of shares, that number cannot be changed by act of the company. And if the charter either expressly or by legal intendment require, that a certain number of shares be subscribed before any assessment is laid, no valid assessment can be be laid until that number be bona fide subscribed, and if it is attempted the company may be dissolved.2

2. And where the general law of the state, or the particular charter, requires a given proportion of subscriptions to be paid in at the time of subscription, this condition must be complied with, or the subscriptions will not fulfil the condition precedent.3 Where

Post, §§ 197, 234, 235.

1 Salem Mill-Dam Co. v. Ropes, 6 Pick. 23.

*

* Salem Mill-Dam Co. v. Ropes, 6 Pick. 23; Central Turnpike Co. v. Valentine, 10 Pick. 142. Where the capital stock consists of a given number of shares of given amount, no valid assessment for the general purposes of the enterprise can be made until the whole number of shares is subscribed; and if any of the subscriptions be made upon conditions precedent, it must be shown that such conditions have been waived or performed. 10 Pick. 142. But assessments to defray the expenses of the incorporation, organization, and preliminary examination, similar to those under the provisional companies in England, have been allowed to be made before the stock of the company is all subscribed. 6 Pick. 23. And in a suit upon subscriptions to stock in a corporation, where by the charter a given amount of stock is required to be subscribed before the corporation can go into operation, it is necessary to allege the latter fact, and the omission will be ground of error, although the question is not raised at the trial. Fry's Ex'r v. Lex. & Big S. Railw., 2 Met. (Ky.) 314.

3

Highland Turnpike Co. v. M'Kean, 11 Johns. 98, 1 Caines's Cas. 85. But see post, § 51, where it will appear, that although the public, or the other shareholders, may insist upon the payment, in money, of the sums required by the charter to be paid at the time of subscription, this is a condition which cannot be taken advantage of by the subscriber, as between himself and the company, in an action for calls. And it has been held, that the stock subscriptions to

the charter of a railway company provided that the whole capital stock should be subscribed, before any of the powers and provisions of the charter should be put in force, and the company made a call upon the shares before the subscriptions were completed, and commenced an action after they were so, it was held the action could not be maintained, the completion of the subscription being necessary to enable the company to make the call.4

SECTION III.

Shares Personal Estate.

1. Railway shares personal estate at common 3. Early cases treated such shares as real

§ 31. 1. The shares of railway companies are now almost universally regarded as personal estate. The English statute so declares them. Hence the transfer of such shares is not required to be in writing, nor are they regarded as coming within the acts of a railway, with banking privileges, cannot be paid in bills of the company, but must all be paid in specie. King v. Elliott, 5 Sm. & M. 428. The charter in this case required $20 paid in specie at the time of subscription. Subscriptions in the name of infants, unless some one is responsible for payment of calls, are not a compliance with the charter. Roman v. Fry, 5 J. J. Marshall, 634. But if the corporation acquiesce in such subscriptions, they cannot afterwards object. Creed v. Lancaster Bank, 1 Ohio N. S. 1. See Beach v. Smith, 28 Barb. 254. See, also, East Pascagoula Hotel Co. v. West, 13 La. Ann. 545; Piscataqua Ferry Co. v. Jones, 39 N. H. 491; Fiser v. Miss. & Tenn. Railw. 32 Miss. 359; Hayne v. Beauchamp, 5 Sm. & Mar. 515, 537; Lewis v. Robertson, 13 id. 558; Barrington v. Miss. Central Railw., 32 Miss. 763; Miss. & Tenn. Railw. v. Harris, 36 Miss. 17.

But it has been held that a condition in the charter, that one dollar per share shall be paid at the time of subscription, and the company organized when one thousand shares are subscribed, does not apply to subscriptions made after the organization of the company, nor will the failure of the company to build its road within the time limited in the charter enable the subscribers to defend against calls. Taggart v. West Maryland Railw., 24 Md. 563.

Norwich and Lowestoft Navigation Co. v. Theobald, 1 M. & M. 151. It is not competent for all the shareholders to reduce the amount of the capital stock, by mutual consent, below that fixed in the charter. If that is attempted, it will be enjoined upon a bill brought by the company against the shareholders and projectors. Society of Practical Knowledge v. Abbott, 2 Beavan, 559.

3

*

mortmain.1 This has been repeatedly decided in regard to shares of canal and dock companies, and bonds secured by an assignment of the rates.2 Such shares may be sold by parol where the contract is executory. And it would seem that the same. view would prevail in the English courts, even where there is no statutory declaration that the shares shall be deemed personal estate.3

2. And the sale of foreign railway shares standing in the name of another person, and a guarantee that such person shall deliver, need not be in writing, either as having respect to an interest growing out of land, or as an undertaking for another, the undertaking being original and not collateral. Railway shares are neither an interest in land, nor goods, wares, and merchandise, within the statute of frauds.5

3. Some of the early English cases treated the shares of incorporated companies as real estate, where the interest grew out of the use or improvement of real estate, and a similar view is taken in some of the American states. But the settled rule upon the subject now, both in England and in this country, is that before stated. This has often been decided in recent analogous cases.

1

*

1 Ashton v. Lord Longdale, 4 Eng. L. & Eq. 80. This case extends the same rule to the debentures of such companies. Neither is railway scrip within the Mortmain Act. But mortgages given by a railway company of the undertaking and tolls may be within the act. So also shares in a bank secured by mortgages. Myers v. Perigal, 16 Simons, 533; The King v. Chipping Norton, 5 East, 239.

2

Sparling v. Parker, 9 Beavan, 450; Thompson v. Thompson, 1 Coll. C. C. 381; Hilton v. Giraud, 1 De G. & S. 183; Walker v. Milne, 11 Beavan, 507. But see Tomlinson v. Tomlinson, 9 id. 459.

3

Bradley v. Holdsworth, 3 M. & W. 422; Bligh v. Brent, 2 Y. & Coll. 268, 294. This is an elaborate case establishing the proposition that the shares in a corporation, whose works are real estate, are nevertheless personal estate, and this upon general principles of the common law.

4

Hargreaves v. Parsons, 13 M. & W. 561.

Humble v. Mitchell, 2 Railw. C. 70; s. c. 11 Ad. & Ellis, 205. See also Duncuft v. Albrecht, 12 Simons, 189; Tempest v. Kilner, 3 C. B. 249; Knight v. Barber, 16 M. & W. 66.

Drybutter v. Bartholomew, 2 Peere Wms. 127; Townsend v. Ash, 3 Atk. 336; Buckerridge v. Ingram, 2 Vesey, jr. 652.

7 Welles v. Cowles, 2 Conn. 567. See also Cape Sable Company's case, 3 Bland's Ch. 606, 670; Binney's case, 2 id. 99; Price v. Price, 6 Dana, 107; Meason's Estate, 4 Watts, 341.

* Walford, 254; ante, § 31, and cases cited in notes 1, 2, 3, and 4; Tippets

1