Pittsburgh & Connellsville Railroad v. Stewart

The opinion of the court was delivered, by Strong, J. On the 8th of June 1847, the defendant subscribed for one hundred and fifty shares of the capital stock of the Pittsburgh and Connellsville Railroad Company. In November and December of the same year, by certain acts and resolutions of the company, which it is not necessary now to enumerate or describe, he, in common with other subscribers for stock, was released from the obligation of his subscription. That the effect of the action of the company was such a release, was ruled in McCully v. the plaintiffs in this case, 8 Casey 25, and it has not been controverted here. But the plaintiffs on this trial submitted evidence, from which they contended the jury might infer a renewed subscription by the defendant, or a resumption of the obligation of June 8th 1847, from which he had been discharged. They showed that in November 1848, he voted by proxy at an annual election for directors; that he was himself elected a director; that he acted as such, and as a stockholder, down to December 1856, and that on the first day of November 1853, before any call for instalments on stock were made, he paid $375. These acts were doubtless cogent evidence of a subscription of some kind, and in the absence of proof of a special contract, they would have warranted the jury in inferring that the defendant had, after his release in November or December 1847, assumed afresh the obligation to take one hundred and fifty shares, and of course to pay for them in cash, according to the calls. Such acts could have been accounted for on no other supposition than that there was an existing engagement of that [58] nature. But they are shorn of their importance by the fact that there was a special contract, accounting for them all; an express contract of conditional subscription to which they are referable. The defendant proved that after his release from his subscription of July ,8th 1847, and before any of those acts from which an unconditional obligation is sought to be inferred, it was agreed between him and General Larimer, the president of the company, that if he would continue his subscription the company would receive payment for it in cross-ties, when the railroad should be made through his land, and that upon these conditions he assented to holding the stock. If there was such a contract between the parties, it fully accounts for the defendant’s subsequent action as a stockholder and director of the company, and leaves no room for an implication of a different contract. The law will not permit a contract to be implied when there is one expressed. “ Éxpressum facit cessare taciturn” is an acknowledged maxim, both of the law and common sense. It was said by Lord Kenyon, in Cutter v. Powell, 6 Term Rep. 824, “ Where there is an express contract between the parties, none can bo implied.” It matters not to this case whether the evidence relied upon by the plaintiffs be regarded as a foundation for the implication of a contract, or as instruments of proof of an express one. Even' if the defendant never was released from the old subscription made on the 8th of June 1847, yet if the contract made with General Larimer, in November or December of that year, was not unauthorized, if it was a valid contract, it amounted to a substitution of the duty to pay in cross-ties at a time not yet arrived, in lieu of the duty to pay in cash on call. The only substantial question in the case, therefore, is, whether that special contract was binding on the company. It is no longer to be doubted that an incorporated company, after it has obtained its letters j>atont, and effected its organization, may receive conditional subscriptions to its stock. It may stipulate with subscribers that they may pay in any manner mutually agreed on, and it can enforce a subscription only according to its conditions. Not so with subscriptions made before a company is organized. They must be unconditional. There is no authority existing anywhere to receive them upon terms, or to vary the mode of payment. This difference is a well-recognised one in our law, as well as in the law of other states. Clearly, then, the plaintiffs, who were an organized company in November 1847, with letters patent already obtained, could engage with the defendant that if he would hold on to his subscription, or renew it (it having ceased to be binding), he might pay it by furnishing materials for their road, and pay it ■when the road should be extended to his land. And if the plaintiffs did thus engage, they cannot enforce payment in cash, nor payment before the time appointed. [59] It is objected, however, that the special contract made with General Larimer, by which the defendant agreed to hold the stock on condition that payment might be made in cross-ties, was not binding on the company for want of authority in General Larimer to make it. If not, then -it was not binding on the defendant, for both parties must be bound, or neither. Yet it was in form, at least, an express contract, and it therefore necessarily precluded the implication of any other, as we have seen. But it cannot be maintained that the act of General Larimer was not binding on the company. He was the president. The contract was made, as one of the witnesses testified, in the room w'here the board of directors met, at the first or second meeting after General Larimer was elected, when the board was entering into session or had been in session. A number of the directors were present. A large number knew of the arrangement, and approved it. The witness could not say how many were present, but he testifies that all may have been, and that the principal part knew and approved of the arrangement. Some two or three months afterwards the board adopted a resolution ratifying and confirming all contracts and agreements which General Larimer had made, and subsequently the defendant was instructed to go on and make the ties, which he did, until the instructions were countermanded. Under these circumstances, and with this evidence in view, the court could not have instructed the jury, as they were requested, that the contract did not bind the company. Without any evidence of approval by the directors, such instruction would have been erroneous. Had the president given a promissory note in the name of the company, it will hardly be insisted that the holder must in the first instance have given evidence to show that he had authority to give it. Authority would be presumed. Much more, when the stock of the company was untaken, might he receive a conditional subscription, which, if accepted by the company, must be taken with its attendant conditions. Nor was the court in error in refusing to charge that the payment by the defendant of $375, after the special contract with the company through General Larimer, estopped him from setting up that contract as a defence against a claim to the payment of the whole subscription in-cash. It was not paid in answer to any call, for no call had then been made. At most, then, the payment was only an act to which he was not compellable, if the contract was proved. The plaintiffs lost nothing by the piayment, and it could not therefore work an estoppel. The defendant might have paid all in cross-ties. He paid some when not called for in money, but did not thereby assume an obligation thus to pay all. The judgment is aflirmed.