Boyd v. Peach Bottom Railway Co.

Mr. Justice Sterrett delivered the opinion of the court, The commissioners appointed to open books and receive subscriptions to the capital stock of the defendant in error were public agents, clothed with limited powers and duties of a purely ministerial character, clearly defined by law. By the Act of March 24th 1868, incorporating the company, it was invested with all the powers and made subject to all the provisions and restrictions prescribed by the general Act of 1849, regulating railroad companies.. One of these provisions is that no subscription shall be valid, unless [172] the party making the same shall, at the time of subscribing, pay the commissioners $5 on each and every share, for the use of the company. The language is plain and emphatic, and the manifest object of the requirement was to protect the public against fictitious . corporations, with capital stock subscribed perhaps by irresponsible persons, and not a dollar thereof paid or intended to be paid in. The commissioners, acting as ministerial agents of the public, before the issuing of letters patent, had no authority whatever to dispense with the actual payment of the required sum. Giving a note for the amount was not payment within the meaning of the law. In Leighty v. The Turnpike Co., 14 S. & R. 434, under a similar charter, it was held that actual payment in money was required. The doctrine of that case, for reasons given at length in the opinion, is sound and should be adhered to. A demand note, such as was given by the plaintiff in error in this case, is not money; it is only a promise to pay money at a future time, and perhaps may never be complied with. The testimony was quite sufficient to establish the fact of defend- . ant’s subscription, on which the suit was based. Afterwards, when the book was presented to him by Mr. Alexander, he impliedly admitted the subscription, by giving his note for the ten per cent, which should have been paid in cash; but this was before the letters patent were obtained. The conditional feature of the subscription furnished no ground of defence. It is scarcely necessary to repeat what has been so often said, that a subscription to the stock of a public corporation, made before letters patent are issued and an organization effected, must be considered absolute and unqualified, and any condition attached thereto void. Commissioners have no authority to receive conditional subscriptions. If they do, the subscription itself is valid and binding, and the condition null and void: Caley v. The Railroad Co., 30 P. F. Smith 367. The only, available defence presented in the court below was the non-payment of the ten per cent, required by the act; and-it was-technical, rather than meritorious. Aside from making the subscription, in the first instance, and afterwards giving his note for the ten per cent., when called on by the collector, the plaintiff in error appears to have been entirely passive. If he had acted as commissioner or director, or participated in stockholders’ meeting, or performed any act recognising his membership of the company, or tending to fasten liability on other subscribers, he should be held to the payment of his subscription, notwithstanding the failure of the commissioners to exact the payment required by law to make it valid and binding; but he appears to have stood alo.of and did nothing by which he was estopped from insisting on the technical defence which he has seen fit to interpose. Legally he is entitled [173] to the benefit of it; and the second and third assignments of error must be sustained. Judgment reversed.