York & Cumberland Railroad v. Pratt

Tenney, J. The Act ci’eating the York & Cumberland Railroad Company, was passed July 30, 1846, and an additional Act was passed June 21, 1848. In the spring of 1848, the defendant put his signature to a subscription book, on which were the names of the subscribers, in the hands of an agent of the company, authorized to obtain subscriptions for its stock, preceded by the printed charter; and also a paper containing the terms of subscription, by which he agreed “ to take and fill” two shares on the terms and conditions, specified in that paper. At a meeting of the stockholders, on July 20, 1848, the 13th by-law was adopted. And at a meeting of the stockholders holden on August 10, 1852, Dan Carpenter acted as the proxy of the defendant, as a stockholder, for two shares in the capital stock, under a written authority in his name, to appear, act and vote at such meeting. The case finds, that the defendant, as a subscriber to the capital stock in the company, paid to the agent thereof, on Dec. 16, 1848, the first, second and third assessments on two shares of the stock amounting to 810, and on March 7, 1849, the fourth assessment on two shares amounting to $4, which assessments were made by the directors on August 16, — 452 — October 5, November 8, and December 9, 1848, respectively. Other assessments, with those paid, making fifty dollars on a share in all, were made subsequently, which have not been paid by the defendant, but they have been duly advertised as having been made, and the time and place of payment duly specified in the notices published. At a meeting of the directors, held on Sept. 13, 1853, the treasurer was ordered, authorized and directed to sell all shares at auction of persons named in the list annexed to the order, who have neglected or refused to pay the assessments due thereon; and among several other names was that of the defendant for two shares. And on the same day, said shares were advertised to be sold, by the treasurer, on Oct. 22, 1853. And the same were sold accordingly to Dan Carpenter, for sums less than the amount of the unpaid assessments. Delinquent subscribers or stockholders are held accountable to the corporation for the balance if his phare or shares shall sell for less than the assessments due thereon, with the interest and costs of sale,, Special Laws for 1846, c. 369, § 5. The word “fill,” in the defendant’s subscription, imported a promise to pay assessments, and was sufficient for the maintenance of an action for the recovery of an unpaid balance, if on good consideration. The contract was upon a good and sufficient consideration, and was binding upon the defendant. Kennebec & Portland Railroad Co. v. Jarvis, 34 Maine, 360; Bangor Bridge Co. v. McMahon, 1 Fairf. 478. And the plaintiff's are entitled in this action to the balance of the assessments after deducting the amount paid, unless some of the objections relied upon in defence, shall be found valid, which we will now consider. The authority of Dan Carpenter to act under the defendant’s proxy, at the meeting of the stockholders on Aug. 10, 1852, is full, and no specific defect is pointed out in argument. This must be treated as an admission, that he — 453 — was the holder of two shares of the capital stock, for which he had subscribed and paid assessments. The witness Carpenter was not a stockholder at the time that he was allowed to testify for the plaintiffs, and on no principle was he incompetent. Robie was a stockholder at the time he was admitted as a witness for the company. The testimony given by him, so far as it was in the least material, had reference only to his official acts, as treasurer-of the corporation, and the evidence for that purpose was competent. 1 Greenl. Ev. § 416. Enough of contingency in the nature of the interest of the witness appeared to render him competent, on other grounds. Ib., note (1.) The defendant’s delay in making the advance payment of one dollar on each share, for which ho subscribed, cannot relieve him, if otherwise liable. If the call for this payment was delayed by the corporation without taking advantage of Ms neglect, and the money was received, upon his voluntary offer, he cannot now avail himself of this objection as a defence to the present suit. And for the same reasons ho cannot object effectually, that the treasurer did not give notice of the vote of the directors, that he be directed to collect one dollar per share, subscribed to the Y. & C. Railroad Co. stock, as provided in the 13th by-law. The treasurer, who caused the defendant’s two shares to be sold, stated that the same were sold to Dan Carpenter, with many others, all of which were transferred to him together, without specifying any particular two shares as belonging to him; and that the defendant’s name is not entered on the stock ledger, and in the transfer book, and no shares were numbered as belonging to Mm. And it is insisted, that upon this ground, no valid sale of the defendant’s shares were made, and consequently the basis for the maintenance of this action, for the balance of the amount of the assessments, fails. The directors, at their meeting, Sept. 13, 1853, yoted: “ that whereas, the persons named in the following list, — 454 — holding the number of shares against their names respectively, have neglected, &c., the treasurer is hereby ordered, &c., to sell, &c., for the non-payment of assessments due thereon, as follows.” Among several other names, is that of Charles W. Pratt, of Westbrook, two shares. The treasurer’s advertisement purports to be in pursuance of the director’s order, that he will sell the following shares of the capital stock, &c., for the payment of the assessments due thereon, and interest and costs of sale; which shares stand on the books of said company in the names of the following persons, to wit: — “Pratt, Charles W., of Westbrook, two shares,” and other delinquents’ names are on the list. By the 13th by-law, after the order of sale by the directors, the treasurer is required to give notice of every such sale, in one or more public newspapers printed in Portland, at least thirty days before the day of such sale, designating the time and place thereof, and the shares to be sold. This by-law is silent touching the kind of designation of the shares to be sold. Any description sufficient to show clearly what shares were intended to be the subject of sale, is a compliance with the requirement in this rule. It does not appear that particular numbers had been assigned to the several stockholders, but it is manifest that the defendant had subscribed for two shares, had paid assessments thereon, and was recognized by the company as holding two shares of the capital stock, and was really the owner of the same, and subject to all the liabilities of a stockholder, under the contract to which he was a party, at the time of the sale. The treasurer’s notice of sale does not state the amount due on the assessments, upon any share, and hence it is urged, that the defendant had no opportunity of ascertaining the balance due, in order that he might make payment and prevent the sale. The treasurer was required by the 13th by-law to give notice of the. amount per share of every such assessment, and of the time and place, when and where the same may be due and payable. It is admitted that this — 455 — was done, thereby giving the defendant the means of knowing with entire certainty the balance remaining unpaid. It is again objected, to the validity of the sale, that it does not appear in the vote of the directors on Sept. 13, 1853, that any stockholder’s share was advertised to bo sold, but only the shares named in the following list. This objection fails upon the facts of the case. The treasurer’s notice is, that the following shares of the capital stock, &c., will be sold for the payment of assessments due thereon, which shares stand on the books of the company, in the names of the following persons. If the defendant was represented to hold two shares of the capital stock, it is not difficult to perceive, that the notice treated him as a stockholder. The person who obtained the defendant’s subscription was the authorized agent of the company, which became a party to the contract, that has been ratified by the acts, making assessments, receiving payments thereof, making sale of the shares for the non-payment of other assessments, and the institution and prosecution of this suit. There is no affirmative proof in the case that any particular number of shares were taken up before the final assessment of March 11, 1850, and hence it is insisted, that the assessments were unauthorized; and a distinction between the case at bar, and that of K. & P. P. R. Co. v. Jarvis, cited for the plaintiffs, is contended for. In the case cited, the charter did not determine the number of shares, into which the capital stock should be divided. But by a by-law the stock was to consist of 12000 shares of §100, each, to be increased from time to time, as the directors should determine, and the Legislature should authorize, not to exceed 20,000 shares; and the by-laws authorized the directors from time to time to make such reasonable assessments on all the shares as they may deem necessary. The Court, in their opinion, holding the defendant in that case liable, say,— The contract in this case could not have had reference to any certain number of — 456 — shares, or certain amount of capital as fixed by the charter, and there is no language used in the contract prescribing the number of shares or the amount of the capital. The promise is not, to pay “ all legal assessments.” It is to pay for the shares as he should be required by a vote of the company, without any reference to assessments or payments to be made on other shares. In the case before us, although by the additional Act of June 21, 1848, the capital stock was not to be le§s than 4000 shares, the precise number was not fixed in any mode by the company. By the contract, the defendant was bound to take and pay the assessments on two shares, on certain conditions, none of which required that the least number of shares, made necessary by the charter as the capital stock, had been taken. And the second condition of the contract is, that no shares shall be assessed more than $5 each, payable at one time, nor to a greater amount in all than $50. The liability was not predicated upon any implied condition, that the number of shares taken should be 4000. The cost of construction was necessarily uncertain, and if the shares are limited to 4000, and the amount of $50 on each should be paid, and expended without the completion of the road, the object of the charter would so far fail, unless the number of shares under contracts like the defendants should be increased. Upon a proper construction of the contract, the principle of the case of Kennebec & Portland Railroad Co. v. Jarvis, is applicable, and the defendant is liable, notwithstanding 4000 shares have not been subscribed for. Defendant defaulted.