Illinois River Railroad v. Beers & Sims

Breese, J. The defendants, by their subscription to the capital stock of the Illinois River Railroad Company, expressly agreed “to be subject to the rules and regulations which might, from time to time, be made by the corporation or directors of the company. By the original charter of the company, granted Feb. 11, 1853—(Session Laws 1853, page 53)—ninety days’ notice of calls on stock subscriptions was required. (Sec. 14.) This charter was amended by the act of January 29, 1857 —(Session' Laws, page 105)—the twelfth section of which provides that twenty days’ notice shall be sufficient for such calls, instead of the time required in the original charter, (page 107.) It does not appear when the defendants became subscribers to the stock, nor is it material, the only question being as to the right of the legislature to pass the amendments of 1857, and whether these amendments were adopted by the company and so became a part of its charter. That the legislature can amend a charter, on the application of the company, there can be no doubt. That the amendments of 1857 were accepted by the company, is very clear. As was said in the case of the same plaintiffs against Zimmer, 20 Ill. 661, there are various modes by which amendments to charters may be accepted by corporations, or rather, by which such acceptance may be established, either for or against the corporation. The first, and perhaps the most satisfactory, is when an amendment is asked for in a general meeting of the shareholders, or when an amendment, after it is passed, is accepted by a majority in interest at such a meeting. But this is not the only or the most usual mode in this country of accepting amendments to corporate charters. This is generally done by the board of directors, who are for the most part vested with all the corporate powers of the company. The evidence in this case sufficiently shows, that the board of directors, in making these calls, was acting under this amended charter, and is evidence of acceptance. Being so, it was binding on the defendants, by the express terms of their subscription, they knowing that the company might obtain an amendment to their charter shortening the time. We see no difference in principle, between this case and that of Zimmer above cited. The court should have found the issue for the plaintiff, for the amount of the calls as proved. The judgment must be reversed, and the cause remanded for further proceedings not inconsistent with this opinion. Judgment reversed.