22 Conn. 435 | Conn. | 1852
In this case, the defendant claims, in the
first place, that the neglect of the grantees of the original charter, under which the plaintifFs claim to possess and exercise corporate powers, by virtue of the renewals thereof, to expend fifty thousand dollars within two years after the rising of the legislature, in 1846, was a non-compliance with the resolution of that year, renewing that charter. The plaintifFs claim that, by the true construction of that resolution, it would have been a compliance with it, either to have expended that sum, within said two years, or to have completed the railroad, within four years after the rising of the legislature of that year; and that the resolution of 1850, again renewing the charter, dispensed with the completing of the road within said four years, and extended the time therefor, three years longer, within which latter time the road was completed: and that, therefore, there was no noncompliance as claimed, or, that it was excused. We do not accede to this construction of the resolution of 1846. Its phraseology is too explicit to admit of such an alternative meaning. Its true construction is, not that the company should either expend said sum or complete the road, at their option, within the times respectively prescribed therefor, but that they should do both of those things. Therefore, the charter, as renewed in 1846, was not, in those respects, complied with.
The defendant, thereupon, further claims, that, in consequence of such non-compliance, the rights, privileges and powers of the corporation, created and renewed as aforesaid, by the express terms of the charter and the resolution first renewing the same, became extinct; and that, therefore, there then ceased to be any such corporate body capable of organization.
The defendant, however, claims, in the next place, that there were such irregularities and departures from the'charter, in the several steps taken by the commissioners and subscribers in organizing the company, that such organization is illegal and of no avail. He insists, 1. That all of the commissioners, in all cases, should have acted, or, at least, have been notified, and had an opportunity to act, in relation to the duties of their appointment. 2. That the mode of obtaining the subscriptions to the stock, by the defendant and others, was unauthorized, because it was not done by the commissioners personally. 3. That the commissioners should not have received the conditional subscriptions to the stock,—that, without including those subscriptions, there would not have been the amount subscribed which the charter required,—and that, therefore, they had no authority to convene the stockholders for the choice of directors, and that such choice was void. 4. That they illegally received the subscription of the defendant, at another time and place than those mentioned, in the notice for that purpose. 5. That there should have been a formal assignment or distribution by the commissioners, to the defendant and the other subscribers, of their stock. 6. That the meetings of the stockholders for the choice of directors, were convened, before the
We are inclined to the opinion, that the specific answers, given by the plaintiffs to these several objections, are sufficient, excepting, perhaps, that which is grounded on the conditional character of some of the subscriptions received by the commissioners, and the circumstance that the conditional subscribers were allowed to vote at the meetings of the stockholders for the choice of directors, respecting which there is more difficulty : but in regard to that objection, we are also inclined to think, that those subscribers, by taking a part as stockholders in such meetings, should be deemed to have waived the condition annexed to their subscription, and that this objection is thus obviated. But it is not necessary for us to express a decided opinion on that or any other of these objections, because we have no doubt, that the conduct of the defendant, in regard to the organization by the choice of directors, and the preliminary steps which led to it, and his conduct since that organization, was such as ought, to preclude him, as between himself and the plaintiffs, in an action like the present, which is brought to recover the amount due on the installments assessed on his stock, from disputing the regularity or validity of these steps taken in the organization of the plaintiffs, as a corporation. He was a party tq, and co-operated very actively with the other subscribers and the commissioners, in that organization, and participated in all the proceedings which led to it. He was one of the earliest and largest subscribers to the stock, and induced others also to subscribe to it,—attended, on the call of the commissioners, all the meetings of the stockholders, as one of them, and acted with them, in the choice of di
The organization of the plaintiffs must, therefore, be deemed to be valid.
The defendant does not controvert the principle which we have repeatedly decided, and which is here to be considered as established, that, by the subscription of a person to the stock of a railroad corporation, of the number of shares annexed to his name on the terms, conditions and limitations mentioned in the charter, and the allowance to him of the shares so subscribed, the relation of stockholder, and company as between him and the corporation, is created, from which the law implies a promise by him, to pay installments ordered by the directors, pursuant to the charter. The Hartford New Haven Railroad Company v. Kennedy, 12 Conn. R., 499.
But he claims that the subscription itself, in this case, is entirely nugatory, on the ground, first, that it only professed to take shares of stock then, that is, at the time of the subscription, in existence, whereas there was then no company in existence in which stock could be taken ; and, secondly, that if it should be regarded as a subscription to stock at a future time, it was void, as an engagement of that descrip
* The defendant insists that there should have been a formal assignment to him, by the commissioners, of the shares allowed to him, or a record of such assignment. We do not,
The vote of the directors requiring installments, is objected to, because it did not, in terms, make them payable to the treasurer of the company. The eighth section of the general railroad act, to which the charter, as last renewed, was made subject, was in this respect substantially complied with, and that was sufficient. The requirement in the vote, that the installments should be paid at the times therein designated, imports that payments should be made to the treasurer, who is the proper and only officer to receive and keep the moneys of the corporation.
The defendant next objects to a recovery by the plaintiffs, on the ground that notice of the assessments on his stock was not given according to the requirements of the eighth section of the general railroad act. That section provides that the president and directors of railroad corporations may direct the assessments on the shares to be paid to the treasurer, “ in such manner and with such notice as may be prescribed by the by-laws of the company.” The facts bearing on this point are, that the company who are the plaintiffs in this case, never passed any by-law prescribing the mode of such notice,—that the defendant was a director of the company, and as such, was present and acted in the meeting of the directors, at which the vote laying those assessments
The defendant further insists, that the plaintiffs, by the sale of his shares, are precluded from maintaining this suit. That claim is directly opposed, not only to our decision in the Hartford & New Haven Railroad Company v. Kennedy, but also to the explicit provision of the general railroad act, authorizing a sale of stock, on the neglect of the owner to pay assessments, that “ If the shares of any delinquent stockholder shall not sell for a sum sufficient to pay his assessment, with interest and charges of sale, he shall be held liable to the corporation for any deficiency.”
The plaintiffs caused a location of the entire route of their railroad from Danbury to Norwalk to be made, which was in all respects legal, every step in regard to it required by the charter having been pursued. Afterwards, for a short distance on the northerly end, that location was altered, and a new route substituted, the requisite steps having been taken, as to said substituted portion of the route. The defendant claims that such alteration was unauthorized by the charter, and that he- is consequently absolved from his liability on his subscription. It is a conclusive answer to this claim, that, if the alteration of the route was unauthorized, it left the original location valid, and the defendant’s liability on his subscription unimpaired; and if the alteration was legal, it removes the objection founded on its supposed invalidity. But an irregularity in the location of the road, either in whole or part, whatever its effect might be on the rights of others, or whatever may be the nature of the remedy, by the stockholders, for a misapplication of the funds or the credit of the corporation, furnishes no defence to the stockholders, in an action to recover the installments on their stock. Such an action is not adapted to the purpose of investigating the legality of the doings of the corporation, or its officers, in these respects.
The defendant excepts to the admissibility of the contract
We have thus considered the points made on the argument of this case, and the result is, that the plaintiffs are entitled to judgment for the balance due on the installments, after deducting the proceeds of the defendant’s stock.
The superior court is advised accordingly.
In this opinion, the other judges concurred.