Hall v. Selma & Tennessee Rail Road

COLLIER, C. J. In respect to the declaration by one of the commissioners, that it would be allowable for the subscribers to forfeit their stock, by failing to pay an assessment thereon, no matter for what purpose made, can have no influence in determining the validity of the defendant’s contract with the company.— The opinion of one of the commissioners upon a question of law, would not be authoritative, or in any manner affect the rights and liabilities of the corporation, or either of its members. And it would, therefore, be unimportant, whether it was communicated to the defendant previous to his subscribing. If the directors of the company, either with or without authority, released the larger stockholders from the payment of a part of their stock, such an act cannot discharge the defendant from the payment of his stock, either in whole or in part. If such a releases was made in virtue of a legal power, it could not be objected to, and if without authority, it would be merely void. The second section of the charter directs, that books shall be opened at Selma under the superintendence of the commissioners, or a majority of them, and so continue, until the entire amount of thesstock authorised to be sold, shall be subscribed. By the seventeenth section, it is provided, that upon a forfeiture of stock for a failure to pay an instalment required thereon, a new subscription may be opened to make up such deficiency as may be caused by the default: Provided, that the president and directors may offer for sale the stock of any defaulting stockholder, or so much there [745] of as may be necessary to pay his defalcation, after giving twenty days notice of the time and place of sale, and out of the proceeds, first pay what is due to the company, and the residue, if any, shall be paid to the defaulting stockholder. Under this section, we' think the directors in obtaining subscriptions, were not restricted to Selma, but might have received subscriptions- elsewhere. And even if the act contemplated Selma as the only place at which stock should be subscribed, is it by any means certain, that it Should not thus far be Considered as directory, so as' to- prevent one who had become a corporator,- from avoiding the payment for stock, by showing that his subscription was made at some other place? As it is unnecessary in the present case, we decline’ examining this question. In Tipton v. The Selma and Tennessee R. R. Co. [5 Ala. Rep.] we said “not only estoppels technically so called, but es-toppels in pais, operate both for and against corporations; and it may be laid down generally, that a party may be concluded from denying his own acts or admissions, which were expressly designed to influence the Conduct of another, a'nd did so influence’ it; and when such denial will operate to the injury of the latter.” It was also held that the participation of Tipton “in the organization of the company, his assent to treat it as a corporation, as indicated thereby, and still more strongly by his note given for the’ five per cent, and the acceptance of a place in the directory, all seem to show that he regarded the plaintiff as a corporation, liable' to all burthens and entitled to all privileges which the charter provided.” In that case, the subscription was made previous to’ the organization of the company which the statute Contemplated.Here the organization was complete, and the corporation had-moved in the execution of the purpose for which it was created, so that there is no objection to the competency of the plaintiff to contract and coerce a compliance by suit. . Without pretending to express a decisive opinion, we would remark, that we cannot very well perceive a difference in principle, between a payment of the five per cent.- made voluntarily at a time subsequent to the' subscription, and a- payment under legal coercion after defence made. In the former case, the subscriber for stock cannot set up his own neglect to pay with promptness, the sum directed by the charter to be paid in- cash;because, if indispensable to entitle him to the subscription, the sub* [746] sequent payment and acceptance, will give to the contract validity, as between the company and the stockholder. And in the latter case, the fair intendment must be, either that the law was in favor of the company, or the defendant acquiesced in the judgment; in either event, the payment would be made, and the subscriber entitled to the stock upon meeting such farther requisitions as might be made on him. Under such circumstances would it not be incumbent on him to repudiate the contract if its performance was not obligatory, without awaiting not only a call, but a suit for further instalments? In the present case, we think that as the payment was made upon a judgment recovered in a suit, to which no resistance was made, the defendant must be taken to have conceded his liability; and to have voluntarily paid the five per cent. We have not thought it necessary to inquire, whether where subscriptions were made after the organization of the company, or to supply deficiencies of defaulting stockholders, the charter requires a payment to be made at the time' of subscribing; or whether in any case, a compliance with that requisition is indispensable to the ■contract. These are questions with others hinted at, but not decided, which we purposely waive. The consequence is, that the judgment of the. circuit courtis. affirmed.