er to take one new share for every two shares already held by him, provided he should by a certain day subscribe therefor, pay a part of the price and give notes for the remainder. It was decided that there was no implied condition that the whole number of the new shares should be issued, and that the failure of the corporation to issue that number was no ground for maintaining an action by a stockholder to recover the money so paid by him, nor for defeating an action on the notes so given by him. 3 The charter of a railway company provided that its capital stock should consist of not less than 4,000 nor more than 10,000 shares. A contract was made "to take and fill" a given number of shares in the capital stock of the company, upon condition that "the corporation may organize when 4,000 shares have been subscribed, but no contract for building and completing the road shall be entered into until 7,000 shares have been subscribed." It was held that the subscriber was liable after the 4,000 shares had been taken and the company organized, although the maximum number of shares fixed by the charter had not been taken, no contract for building the road having been made until after more than 7,000 shares had been subscribed for. But where a railway company's charter provided that the construction of its road should not commence until three-fourths of the estimated cost was subscribed for by responsible persons, it was decided that the company need not show compliance with this provision in order to maintain an action against a subscriber for an assessment upon the stock.5 Nor can the subscriber, when sued upon his subscription, show in defense, that some of the persons whose subscriptions made up the requisite amount, are irresponsible persons; and where the subscription is conditional upon a certain amount of stock being taken, raising a part of the money required without a formal subscription of it, is equivalent to subscribing and fulfills the condition. Stipulations in the nature of conditions may also be made with bond purchasers, 6 3 Nutter v. L. & W. C. R. Co., 6 Gray, 85. 4 P. & K. R. Co. v. Bartlett, 12 Gray, 244. 5 P. R. Co. v. White, 41 Me. 512. See, also, Watts v. Salter, 10 C. B. 477; 12 Eng. L. & Eq. 482. 6 P. R. Co. v. White, 41 Me. 512. 7 Springfield I. R. Co. v. Sleeper, 121 Mass. 29. A subscription to the stock of a hotel company was made on condition that "the sum of $200,000 be subscribed by the citizens of Buffalo. " Held, 1. That payment on each subscription was a ratification thereof. 2. That a subscriber whose domicile was in Batavia, but who was engaged in business in Buffalo, and spent nearly all his time there, was a citizen of Buffalo, within the meaning of the condition. 3. That a subscription signed by B. Spencer, in the name of B. and S. M. Spencer, was within the condition, he being a resident of Buffalo, and liable on his individual subscription, in case there was no firm by that name, nor authority. 9 Precedent condition that $5 per share shall be paid by subscribers, is not satisfied by subscriber giving a note for subscription. 10 Another class of cases present conditions relating to the location and construction of works by the company, as that a railroad be put under contract within a year and no installments be called for till it is put under contract with conditions to secure its building within twenty months from the time of the contract.1 11 In this case it was held that the completion of the road before installments were called for was not a substantial compliance with the condition if it did not appear that the road could have been sooner built. That a railroad shall be located on a specified line, or within a certain distance of a town, is a valid condition. 12 Other valid conditions are: That if the railway was located through the farm of the subscriber, he should have the choice of paying the money subscribed or giving the right of way to the corporation, 13 and that the money subscribed 8 Van Allen v. I. C. R. Co., 7 Bosw. 515. 9 Union Hotel Co. v. Hersee, 79 N. Y. 454. 12 Chapman v. Mad River etc. R. Co. 6 Ohio St. 119; Evansville etc. R. Co. v. Shearer, 10 Ind. 244; O'Neal v. King, 3 Jones L. 517; Jewett v. Lawrenceburg etc. R. Co. 10 Ind. 539; North Missouri R. Co. v. Winkler, 29 Mo. 318; Martin v. Pensacola etc. R. Co. 8 Fla. 370; New Albany R. Co. v. McCormick, 10 Ind. 499; Rhey v. Ebensburg etc. P. R. Co. 27 Pa.St. 261; Cumberland etc. R. Co. v. Raab, 9 Watts, 458. 13 Evansville etc. R. Co. v. Wright, 38 Ind. 64. shall not be payable until needed for the construction of a certain portion of the road.14 In Miller v. P. & C. R. Co.15 the condition was that the company should locate and construct the road along a specified route. The subscriber having paid one instalment and part of the second, delayed payment of the balance, as calls were made, until the company, before the road was built along the route mentioned, suspended operations, after which payment was refused on the ground that though the company had located the road, it had not constructed it. It was decided that the condition in the contract of subscription was not a condition precedent, and did not require completion of the road before payment could be required, but only that when located and constructed it should occupy the route designated, the undertaking being on the part of the subscriber to pay as calls should be made by the directors, and on the part of the company to locate and construct as fast as their means would allow. Further, that the promise of subscription being precedent to that of construction by the company, the defendant could not insist upon performance by the company while he refused performance on his part; and that the road having been located as stipulated and completed so far as the means of the company would allow, it was a compliance with the condition entitling plaintiffs to recover. Some cases hold that under a charter authorizing absolute subscriptions for stock in a corporation, for the construction of a public highway, subscriptions conditioned on the adoption of a particular locality or terminus are void as against public policy. 16 But contracts for stock in consideration of a particular location, when complied with by the company, are as binding on both parties as if the contract had been absolute and unconditional; for, however adverse to public policy such conditions are, prior to the formation of the corporation, the location and construction of the road is the province and duty of the president and directors, and a contract made by them in the execution of their corporate powers must be presumed to be made in promotion of the public interest, until the contrary is shown.18 Conditions as to the payment of interest are also inserted in subscriptions, e.g., that interest shall be paid by the company in the sum subscribed, until a dividend is declared.19 But where a railway company received subscriptions to its stock on a guaranty that it would pay interest on the stock "as soon as paid," until the road was finished, it was decided that interest did not accrue until the stock was fully paid, and that a subscriber who had paid but a small portion of the calls could not, in a suit against him for the balance, set up the non-payment of interest on his stock by the company as a breach of the condition. 20 A subscriber who has signed a recommendation, written in his subscription, that interest be paid to stockholders on payments for stock, can not resist payment of his subscription on the ground that such interest has been paid.21 There may also be a condition inserted in a subscription, that in case of an abandonment of the enterprise, the money deposited by the subscriber shall be returned; and this has been compelled, although the subscribers, by agreement, authorized the expenditure of money by the directors or provisional committee. 22 Interesting questions of evidence are presented in these cases. Where the contract of subscription is in writing, and containan absolute unconditional sub 18 Taggart v. W. M. R. Co., 24 Md. 563. See, also, Pittsburg, etc. R. Co. v. Plummer, 37 Pa. St. 413; Chamberlain v. P. & H. R. Co., 15 Ohio St. 225; A. & N. L. R. Co. v. Smith, 15 Ohio St. 328. 19 Racine, etc. Bank v. Ayres, 12 Wis. 512. See Rutland, etc. R. Co. v. Thrall, 35 Vt. 536. 20 Miller v. P. & C. R. Co., 40 Pa. St. 237. 21 Ag. Br. R. Co. v. Winchester, 13 Allen, 29. 22 Mowatt v. Loudesborough, 25 Eng. L. & Eq. 25; Ell. & B. 367; 23 L. J. N. S. Q. B. 177; Ward v. Same, 12 C. B. 252; 22 Eng. L. & Eq. 402. scription, parol evidence is not admissible for the purpose of adding conditions. 23 A parol agreement between the subscribers for stock in a corporation, made in anticipation of its organization, and separate from, but imposing conditions upon the subscription, itself absolute in its terms, such as that the subscriber may pay in work, not in cash, cannot change the character or obligations of the subscription.24 Nor are the declarations of the president of the company, not made while he was acting as agent of the company, relative to the manner in which subscriptions should be expended, admissible on behalf of a delinquent subscriber.25 The conditions must be accepted by the company, else the contract of subscription will lack mutuality. P. & C. R. Co. v. Stewart,26 decides that the acceptance may be made by the president, and Nichols v. Burlington etc. R. Co.27 holds that the company's acceptance of part payment of a subscription made upon condition is a sufficient acceptance of the condition. The conditions upon which the subscription is made may be waived by the party who has a right to require their performance. Although a subscription is expressly upon condition that a specific sum shall be raised, yet, if a subscriber co-operates in prosecuting the enterprise, and in incurring liabilities, with knowledge that the full amount has not been subscribed, these acts operate as a waiver of the condition. 28 In Lane v. Brainerd,29 it was decided that setting opposite one's subscription the words "to be expended between the C. river and the east line of the State" was not a condition precedent to becoming a shareholder; and that if it were, it was waived by the subscriber becoming a director and acting as such. 23 Thigpen v. M. C. R. Co., 32 Miss. 348; Madison, etc. R Co. v. Stevens, 6 Ind. 379; Cunningham v. Edgefield, etc. R. Co., 2 Head. 23; N. C. R. Co. v. Leach, 4 Jones' Law. 340; Johnson v. P. & G. R. Co., 9 Fla. 299; K. & P. R. Co. v. Waters, 34 Me. 369; Roche v. Roanoke C. Seminary, 56 Ind. 198; Noble v. Callender, 20 Ohio St. 199; Stewards v. Town, 49 Vt. 29. 24 W. H. etc. R. Co. v. Myers, 16 Abb. Pr. N. S. 34; Ridgefield etc. R. Co. v. Brush, 43 Conn. 86. 25 Smith v. Tallahassee Branch etc. R. Co. v. 30 Ala. 650. 26 41 Pa. St. 24. 27 4 Greene (Ia.) 54. 28 Hutchins v. Smith, 46 Barb. 235; R. P. D. Church v. Brown, 17 How. Pr. 287; See also, Wilmington etc. R. Co. v. Robeson, 5 Ired. Law, 301. 29 30 Conn. 565. Many conditions have been held unlawful and void. Conditions, or agreements between the subscriber and the agent soliciting the subscription, that the former shall not be called upon for payment, or that in a certain event he shall be released, or otherwise limiting his liability, is void against creditors of company if not authorized by it. 82 But where a form of subscription is prescribed by law, the insertion in it of additional stipulationswhich are, however, not inconsistent with the law, 33 will not invalidate the subscription. A corporation whose charter and by-laws require each subscriber to its capital stock to pay a given per centage of his subscription in cash at the time of subscribing, cannot enforce payment of a subscription where such cash payment has not been required. Nor will an extension of time always defeat the subscription. Thus under 1 N. Y. Rev. Stat. 600, sec. 8, subjecting all subsequent. charters to legislative alteration, a subscription to a hotel company,35 was held not to be defeated by laws of 1873, ch. 123, extending for five years, the time for beginning the construction of the hotel.36 Where three companies consolidate, and a subscription is made after the agreement for consolidation, but before the filing of such agreement with the Secretary of State, such filing is not a necessary condition precedent to validate the subscription. 37 Articles of association contemplated a railroad from Buffalo to a point in Chautauqua 30 Parker v. Thomas, 19 Ind. 213; but see Taylor v. Fletcher, 15 Ind. 80; O'Donnell v. Evansville etc. R. Co. 14 Ind. 259; Keller v. Johnson, 11 Ind. 337. 31 B. & M. R. Co. v. Boestler, 15 Iowa, 555. 32 Syracuse etc. R. Co. v. Gere, 6 Thomp. & C. 636; 4 Hun. 392; Upton v. Tribilcock, 91 U. S. 45; Swartwout v. Mich. etc. R. Co. 24 Mich. 389; Evansville etc R. Co. v. Wright, 38 Ind. 64; Pickering v. Templeton, 2 Mo. App. 424. 33 Fisher v. E. & C. R. Co. 7 Ind. 407. 84 State Ins. Co. v. Redmond, 1 McCrary, 308. County, on the State line. The road was built from Buffalo to Jamestown, in Chautauqua County, ten, or more, miles from the State line, and its further construction suspended, but this did not appear to be by any alteration of the articles of association, or by any resolution of the board of directors. This was decided not a release of the subscribers' liability. 38 Nothing has been attempted in this essay more than to state briefly the results of the authorities bearing upon the subject. For information as to details and distinctions, the reader is referred to the cases themselves. ADELBERT HAMILTON. Chicago, Ill. 38 Buffalo etc. R. Co. v. Clark, 22 Hun. 359. LIABILITY FOR INJURIES TO EMPLOYEES. The case of the Union Manufacturing Co. v. Morrissey, lately decided by the Supreme Court of Ohio, holding that an employee's knowledge of a defect in machinery, and continuing to work with such defective machinery under a promise from the foreman to repair the defect, was not negligence on the part of the employee, but was a fact to go to the jury with all the other facts in the case, so that the jury may determine whether or not there was negligence-the jury, not the court, being the judge of the question, whilst the court reaches a correct conclusion, it does not elucidate the subject nor place it upon the foundation of principle from which its conclusions can be deduced. For an employee to work defective machinery, knowing the defect, under a promise to remedy the defect, either is or is not negligence. If it is, he ought not to recover. If it is not negligence, he ought to recover. And whether it is or is not, ought not to be uncertain, or be without reason or principle for the rule. In the whole law of contributory negligence, if the facts show that the employee proximately contributed to his injury-if his injury is the result of his own fault-he can not recover, because he was injured by his own fault. What facts constitute con tributory negligence, are measured by the law; that is, the law says such and such facts show that the employee was injured by his own fault; hence, what is, and what is not contributory negligence, is a matter of law. It is only when the facts are in dispute, that the jury shall determine what is or what is not proved; but when there is no dispute, the law determines the question; hence it should be the same when the question is that involved in this case, and not left to the exclusive control of the jury. To understand the conclusions reached by the court, we must go farther into the doctrine involved. A master's liability for an injury to his servant is resolvable into when he is and when he is not liable. He is liable when he neglects his duty; and he is not liable (1), when he performs his duty, (2), when the servant neglects his duty. Hence, we must know the master's duty, because when he neglects it he is liable; and secondly, we must know the servant's duty, because when he neglects it the master is not liable. The duty in each is, that both must exercise ordinary care commensurate with the subject-matter. When this care is exercised there is no fault or negligence-i. e., no want of care. The master must use this care in the selection and operation of safe and sufficient instrumentalities. The servant must use this care in entering upon and in the use of these instrumentalities. Therefore, as both must use care, the liability can only occur when there is a want of care; hence, when a servant is injured, the question is, whose fault caused it? Who has been guilty of the want of care, or, its equivalent, who has been guilty of negligence? The want of this care occurs when the master knew, or ought to have known the cause of the injury and could have prevented it; and when the servant knew, or ought to have known the cause and could have prevented it. In other words, there is negligence when the casualty could have been avoided by the exercise of ordinary care. And in all cases there must be a connection-casual connection between the fault and the injury. By the exercise of ordinary care, if the master knew or ought to have known, he is liable, if the servant did not contribute. 2. If he did not know, and could not have known, he is not liable. 3. If the servant knew or could have known, the master is not liable, unless he is at fault. 4. If the servant did not know, and could not have known, the master is liable if at fault. 5. If both did not know, the master is not liable. 6. If both did know, the master is liable if he fails to remedy; and not liable, if the servant assumes the risk, or the risk is such that a person with reasonable or ordinary judgment or prudence would not assume. The decision applies to the third and sixth position. Working defective machinery (instrumentalities), knowing the defects, is not negligence in the servant;1 because, (1), a servant can be in the exercise of ordinary care and work defective machinery, if such machinery is not plainly and palpably dangerous; 2 or such as necessarily and inevitably expose him to danger;3 (2), that the servant believed, and had due reason to believe, that the danger had been removed or lessened; (3), that the master promised to remedy the defect;5 (4), the exigencies of the service required the servant to perform the particular act, in doing which the injury resulted, and did not necessarily expose him to danger;6 (5), the master may have lulled the servant into a sense of security by insisting there was no danger;7 (6), where the servant knew the facts, but did not and could not know the danger;8 (7), where the master may have violated his contract. 9 This paper will be confined to one of these positions, namely: knowing the defects and remaining in the service after a promise to remedy or repair the defect. The reasons 1 Reed v. Northfield, 13 Pick. 94; Whitaker v. Boylston, 97 Mass. 273; Clarke v. Holmes, 7 H. & N. 949; Greenleaf v. Railroad Co., 29 Iowa, 14; Patterson v. Railroad Co., 76 Pa. St. 318; Snow v. Railroad Co., 8 Allen, 441; Huddleston v. Lowell M. Shop, 106 Mass. 282. 2 Patterson v. Railroad Co., supra; Plank v. Railroad Co., 60 N. Y. 607; Kray v. Chicago R. Co., 32 Iowa, 357. 3 Laning v. Railroad Co., 49 N. Y. 521; Snow v. Railroad Co., supra; Flike v. Railroad Co., 58 N. Y. 549; Keegan v. Railroad Co., 8 N. Y. 175. 4 Coombs v. New Bedford Cordage Co., 102 Mass. 572. 5 Clarke v. Holmes, supra. 6 Snow v. Railroad Co., 8 Allen, 441; Reed v. Northfield, 13 Pick. 98; Smith v. Lowell, 6 Allen, 40; Plank v. Railroad Co., 60 N. Y. 607; Clarke v. Holmes, 7 H. & N. 942. 7 Tarrant v. Webb, 18 C. B. 797. 8 Baxter v. Roberts, 44 Cal. 187; Sullivan v. M'fg Co., 113 Mass. 398; Spelman v. Iron Co., 56 Barb. 151. 9 Clarke v. Holmes, supra. that an employee is not guilty of negligence or fault in working defective machinery after a promise to repair, are: 1. So long as such machinery is not plainly and obviously dangerous, and may be worked with safety by a person exercising ordinary care, the servant may rely on the promise to repair, and that such repair will be made before the danger becomes seen or obvious; hence the servant is not at fault. The servant has a right to complete his contract, as long as he can do so with the exercise of ordinary care, notwithstanding the master's failure to perform his part. There is no violation of duty, and hence no fault on the part of the servant. There is no casual connection between working a defective machine and an injury, inasmuch as the defect may not be dangerous, and the injury could be produced by other In the beginning, it was held that if the servant, by the exercise of ordinary care, knew or could have known of the defect, he could not recover for any injury received in consequence of such defect.11 The rule was stated 12 to be that if a servant, before he enters the service, knows, or if he afterwards discovers, or if, by the exercise of ordinary observation or reasonable skill and diligence, he may discover, that the building, premises, machine, appliance or fellow-servant in connection with which or with whom he is to 10 Sherm. & Red. Neg., sec. 96; Conroy v. Vulcan Iron Works, 62 Mo. 35; Patterson v. Railroad Co., 76 Pa. St. 393; Buzzell v. Laconia M'fg Co., 48 Me. 113; Stoddard v. Railroad Co., 65 Mo. 514; Keegan v. Kavanaugh, 62 Mo. 232; Leclaire v. Railroad Co., 20 Minn. 9, 19. 11 Assop v. Yates, 2 H. & N. 767; Skipp v. Railroad Co., 9 Exch. 223; Seymour v. Maddox. 16 Q. B. 326; Britton v. Cotton Co., 7 Exch. 130; Clarke v. Holmes, 7 H. & N 937; Dillon v. Pacific R. Co., 3 Dill. 319; Hayden v. Smithville Co., 29 Conn. 548; Railroad Co. v. Bishop, 50 Ga. 465; Railroad Co. v. Kelly, 58 Ga. 107; Lumley v. Caswell, 47 Iowa, 159; Railroad Co. v. Jackson, 55 Ill. 492; Railroad Co. v. Britz, 72 Ill. 256; Railroad Co. v. Munroe, 85 Ill. 25; Railroad Co. v. Ashbury, 84 Ill. 429; Ladd v. New Bedford Co., 119 Mass. 412; Buzzell v. Laconia Co., 48 Me. 113; Railroad Co. v. Woodruff, 4 Md. 242; Leclaire v. Railroad Co., 20 Minn. 9; Davis v. Railroad Co., 20 Mich. 105; Devitt v. Railroad Co.. 50 Mo. 302; Bichmond v. Railroad Co., 78 N. C. 300; Gibson v. Railroad Co., 63 N. Y. 449; Haskin v. Railroad Co., 65 Barb. 129; Wright v. Railroad Co., 25 N. Y. 562; Frazier v. Railroad Co., 38 Pa. St. 104; Kelly v. Silver Spring Co., 7 Rep. 60; Robinson v. Railroad Co., 46 Texas, 540; Dorsey v. Phillips, etc. Co., 42 Wis. 583. 12 Bliss, J., in Davitt v. Pacific R. Co., 50 Mo. 302. |