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 * admission of the existence of the company, as to preclude subscribers from contesting the amount of subscriptions, to enable the company to make calls.7

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. 543; Contoocook Valley Railway Co. v. Barker, 32 N. Hamp. 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 N. S. 119.

7 Oldtown & Lincoln Railw. Co. v. Veazie, 39 Maine, 571. Any condition 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, 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, 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

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 assess

ments.

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

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

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. 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, 587. See also Troy & Greenfield Railw. v. Newton, 8 Gray, 596.

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

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

*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

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

9 Som. & Ken. R. Co. v. Cushing, 45 Me. 524.
10 Bedford Railw. Co. v. Bowser, 48 Penn. St. 29.

Ambergate, N. & Boston & E. J. R. v. Coulthard, 5 Exch. 459; Stratford & M. R. v. Stratton, 2 B. & Ad. 518.

2 London & N. W. R. v. M'Michael, 6 Exch. 273; Ambergate R. v. Norcliffe, 6 Exch. 629; s. c. 4 Eng. L. & Eq. 461; Birkenhead, L. & Ch. R. v. Webster, 6 Exch. 277; s. c. 6 Railw. C. 498.

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.3 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.1

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

5. The register of the company evidence of 12. But note fraudulently obtained not enmembership.

forceable.

6. Subscriptions must be made in conformity 13. Subscriptions as executor distinct contracts from those in private capacity.

to charter.

7. Transferee liable for calls. Subscriber

also in some cases.

§ 53. 1. All the original subscribers to the stock in a railway company are usually made liable to calls, by the charter of the company, or by general statute.

2. Some question has arisen in the English courts, as to what is necessary to constitute one a subscriber. In an early case1

61.

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

4 Breedlove v. M. & F. Railw., 12 Ind. 114; Smith v. Ind. & Ill. Railw., id.

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

1 Thames Tunnel Company v. Sheldon, 6 B. & C. 341.

upon this subject, it was held, that the word "subscriber," in the act of parliament constituting the company, applied only to those who had stipulated that they would make payment, and not to all those who had advanced money; and that one, who was named in the recital of the act, as one of the original proprietors, and who had paid a deposit on eight shares, but who had not signed any contracts, was not a subscriber within the meaning of the act, and not liable to be sued by the directors for calls on the remainder of such shares.

3. This is the generally received opinion upon that subject, in this country. In one case,2 a plea to an action to recover calls on stock subscribed, that another person had agreed to take the stock, and that the commissioners had counted this stock to such other person, is insufficient. The signature of the first subscriber should have been erased, and that of the other substituted, or something done to hold the latter liable. A subscriber for stock * cannot subrogate another person to his obligation, without a substitution of his name upon the books of the company, or some other equivalent act recognized by the charter and by-laws of the company.

4. But the principal difficulty, in regard to liability for calls, arises, where there have been transfers, and the name of the transferee not entered upon the books of the company. For whenever the name of the vendee of shares is transferred to the register of shareholders, the cases all agree that the vendor is exonerated, (unless there is some express provision of law, by which the liability of the original subscriber still continues,) and the vendee becomes liable for future calls. And the vendee having made such representation to the company, as to induce them to enter his name upon the register of shares, is estopped to deny the validity of the transfer. And even where the party has represented himself to the company as the owner of shares, and sent in scrip certificates, which had been purchased by him, claiming to be registered as a proprietor, in respect thereof, and had received from the company receipts therefor, with a notice that they would be exchanged Ryder v. Alton & Sangamon R., 13 Ill. 516.

2

3 Sheffield & Ashton-under-Lyne & Man. R. v. Woodcock, 2 Railw. C. 522; s. c. 7 M. & W. 574; London & Grand J. R. v. Freeman, 2 Railw. C. 468; s. c. 2 M. & G. 606; post, § 54.

4 Sheffield, Ash. & M. R. v. Woodcock, supra; London & Grand J. R. v. Freeman, supra.