Hartford & New-Haven Rail Road v. Kennedy, 12 Conn. 499

12 Conn. 499 | Conn. | 1838

Huntington, J.

This is an action of assumpsit, brought to recover of the defendant, an original and continuing stockholder in the Hartford and New-Haven Rail-Road Company, the amount of instalments due upon his stock, and ordered to be paid, by the directors of the company, in pursuance of the provisions of the act of incorporation. The defendant resists payment, on the ground that he has made no promise, express or implied, to pay the sums demanded; and that the only remedy for the plaintiffs, on his failure to comply with the order of the directors, is, to sell the stock and apply the proceeds to the payment of the instalments which are due. An answer to a single enquiry, disposes of the principal and most important point in the present case. Did the defendant, by becoming and continuing a stockholder in this company, incur a personal obligation to pay the instalments required by the directors, in the manner prescribed by the charter, on the shares of stock by him originally subscribed, and held by him, at the time such instalments were called for and were due? We think such an obligation was created; and that the law, coinciding, in this case, with justice and good faith, will enforce it. It is true, a promise to pay, in precise terms, does not appear to have been made. The defendant has not affixed his signature to an instrument, which contains the words I promise to pay ; but he has done an equivalent act. He has contracted with the plaintiffs to become a member of the» corporation, and to be interested in their stock to the extent of . hundred dollars for each share assigned to him, if that , . , mt . , ° . be required. This contract has been executed on the 0p ¡^g p]ajni¡ffs The shares which lie has agreed to take, and for which a certificate of stock has been delivered to him, are part of a moneyed capital. They are to be paid for in money ; and by voluntarily becoming a member of the corporation under the provisions of this charter, an implied as-sumpsit arises to pay the instalments, on the terms, conditions and limitations mentioned in the charter. This, we think, will be very apparent, when the object for which this corporation was created, and the several provisions in the act, arc carefully examined and considered. We concur in the position advanced by the counsel for the d-fendanl, that corporations created by statute, must depend, both for their powers and the mode of exercising them, upon the true construction of the statute. Head v. Providence Insurance Co. 2 Crunch 127. Bank of the United States v. Dandridge & al. 12 Wheat. 64. And we shall apply this legal principle to the case before us.

This company was formed for the purpose of raising the necessary funds in money, to prosecute and complete a work of great public utility. This could be done only by a solid capital of large amount, to be created by the voluntary subscription of individuals, in the form of stock, and to be paid, from time to time, as the exigencies of the work might demand. The regular and prompt payment of the sums required, if not indispensable, was important to the successful issue of the undertaking, and was the means by which the debts of the company were to be discharged. It could not but have been foreseen, by the stockholders, that in carrying on such an enterprize, the agents of the corporation would be compelled to enter into heavy responsibilities for work and la-bour to be done and materials to be furnished, and to incur other necessary expenses ; and it was as clearly foreseen, that these could be discharged and paid only by the payment in money for the stock received from the company. When, therefore, the subscribers associated under the act, and became stockholders, to effect this object, and which could be accomplished only by the advance of money in paymeut of the in-stalments, it seems difficult to give any other legal meaning to their act, than that it was equivalent to an express promise on T , , , , , . 1 : the part of the stockholders, to pay their respective proportions of the capital, when lawfully demanded. Such a struction of their engagement harmonizes with the entire sign of their association, is in furtherance of its olj; ct, does no injustice to the stockholders, and affords all the security which can reasonably be required, by the public or the creditors of the corporation, that the object will be consummated, and the debts of the company faithfully discharged.

To constitute a promise or undertaking, no precise form of words is necessary. No technical language is required. It is often implied from the terms used, in connexion with the object of the parties. Earl of Shrewsbury v. Gould, 2 B. & A. 487. Webb v. Plummer, Id. 746. Randall v. Lynch, 12 East 179. In the case of Marzetli v. Williams & al. 1 B. & Adol. 415., it is said the only difference between an express and an implied contract, is in the mode of proof. An express contract is proved, by direct evidence ; an implied contract, by circumstantial evidence. The one is established, by the express words used by the parties; the other, by circumstances showing that the parlies intended to contract.

We think that in the present case, the inference is just, that the subscribers intended to hold themselves responsible for the payment of the assessments upon their stock, when the same should be legally demanded. We have said this inference may fairly be drawn from the object for which the corporation was created, and the manner in which it was to be carried into effect. The object, was the completion of the rail-road ; the manner, by creating a substantial capital stock, to be paid in money, whenever it was needed. If such payment cannot be enforced, it is obvious the capital stock required by the charter, may not, and probably would not, be obtained. It may be subscribed; but if the payments may be lawfully withheld, the stock is only nominally created: and on this hypothesis, we are to understand the legislature, when they enacted, that the capital stock of the company should consist of five hundred thousand dollars, with the privilege of increasing it to one million of dollars, to be divided into shares of one hundred dollars each, meant nothing more than that there should be a nominal capital of this amount, leaving it optional with the subscribers to pay or not, as might best suit their interest or convenience. We should hesitate Ion?, before we affixed . . , Inis meaning to the act; — a meaning which, in Us practical resl|lts> 'nighl operate as a fraud upon the public, the corpora-t¡on.an(J individuals.

This view of the legal effect of the act of the defendant in becoming a stockholder, is much strengthened, hy other considerations, to which we propose to refer. The corporation was vested with power to create a capital stock, to fulfil the objects of the incorporation, or perhaps more properly speaking, the act directed what should constitute the stock, and the manner in which it should be created. It was to consist of at least five thousand shares, of the value of one hundred dollars each. The corporation then proposed to each subscriber, to sell him shares of the stock, at the price of one hundred dollars for each share. This offer was accepted, by the subscribers ; and such acceptance, by legal implication, amounted to a promise, and created an obligation, on the part of the stockholders, to pay for them the price agreed, when the same might be lawfully required of them, by the directors.

This was the legal purport of the transaction, divested of the particular form which it assumed. Spear v. Crawford, 14 Wend. 20. The true construction of this charter ought not to depend merely upon the form of the proceedings under it; but the substance of those proceedings should be regarded, in connexion with the object to be promoted. The same rules of construction apply to this, as are applicable to every other instrument. It was certainly competent for the corporation to contract with the stockholders as individuals. Dunstan v. Imp. Gas Light Co. 3 B. & Adol. 125. per Parke, J. Hill v. Waterworks Co. 5 B. & Adol. 866. They might presciibe the terms, not inconsistent with the provisions Of the charter, upon which all persons should become members of their association. They had the power to declare the conditions upon which individuals might become proprietors of their stock, subject however to the provisions of the act of incorporation. Harlaem Canal Co. v. Seixas, 2 Hall's Rep. 504. Hence, it has never been doubted, that the corporation had authority “to receive of the members, promises for the payment of assessments, [instalments] upon which the corporation would have a cumulative remedy, and be enabled to compel the payment of them in a personal action ; and that when, upon the faith of these promises, the corporation proceed in their undertaking, there is then a sufficient consideration on their part, and they may lawfully compel the payment, not only by selling the shares of delinquents, but also by cing the performance of collateral engagements and promises.” Middlesex Turnpike Corporation v Swan, 10 Mass. Rep. 384. The reasonable doctrine is here asserted, that an express promise to pay the instalments on stock, is founded on sufficient consideration, and prc-supposes a power both in the corporation and the stockholder, to make a valid contract regarding the stock; — a power, in one, to sell it; and in the other, to bind himself to receive and pay for it. We are unable to discover the slightest difference in principle, between the case of an individual who voluntarily becomes a stockholder, by agreeing to receive, and actually receiving the stock, consisting in money, without superadding a promise in terms to pay for it, and one where such promise is expressly made. In both cases, the corporation contract to sell or transfer to the stockholder, a specified interest in their corporate funds, called shares ; in both, the stockholder agrees to receive it; in both, there is the same legal consideration ; — on the part of the corporation, the expenses incurred by them, and a reliance upon the engagement that the instalments will be paid to enable them to proceed in their undertaking; — on the part of the stockholder, the benefit received by him, by his interest in the road, and his right to receive a proportion of the profits of the enterprize.

Additional evidence of the intention of the legislature to create a personal liability upon the stockholders, and of the same intention on the part of the stockholders themselves, is derived from other parts of the charter, and from the terms of subscription, and the certificates of stock. The charter was granted, not merely for the benefit of the owners of the stock, with liberty to them to pay for it or not, as they chose. It was not for their private advantage merely, that they were authorized to enter and possess themselves of lands of others over which the road was located ; nor was their interest alone consulted, when their corporate powers were declared forfeited, unless the sum of one hundred thousand dollars was expended upon the road within four years, or if the road was not completed and put in operation within six years from the passage of the act. The '°o's'ature had ¡n view the public interest, and the security of who might contract with the corporation. Lees & al. v. Canal Co. 11 East 615. Under this act, the proprietors rights, the public have lights, and creditors, if there be any, have rights; all of which are to be protected. The power given to the corporation over delinquent stockholders who come in by their voluntary act, was intended to be such as to furnish as adequate security as was deemed necessary, that the work should be completed; that funds should be obtained, to prevent a forfeiture of the charter, by a failure to comply with the stipulated conditions, and that the creditors of the corporation should be paid. This security can be considered perfect and complete, only by giving that construction to the act of the individual which constitutes him a stockholder, which, we think, it plainly imports, — a promise to pay the legal assessments, when called for. It was very properly slid, by the court, in the case of Worcester Turnpike v. Willard, 5 Mass. Rep. 80., that “the indemnity which a turnpike corporation can, by the statute creating it, claim for the expenses of locating and making the turnpike, arises wholly from the legal toll to be received. And after it is created with all the necessary powers, it may be very uncertain whether the indemnity will be sufficient, as the expenses and the toll are each uncertain : and the directors can have no funds to enable them to contract with or pay the workmen, but the value of the shares when sold, unless they bind themselves personally to the payment. This cannot reasonably be expected from them, without some further security from the proprietors than the value of their shares, which in fact may be unequal to the reimbursement. This further security is, therefore, a reasonable one, and of convenience to the public, so far as turnpikes are a common benefit. There is no legal objection to a contract between the corporation and the individual members o( it, more than between a town and any of its inhabitants, when the authority of the corporation to contract with its members, is within the reason of the powers vested in it, and may be necessary for their execution, although this authority may not be expressly given, by the incorporating act, or by any other statute.”

The subscription of the defendant was in the following words: “ Whereas the General Assembly of the state of Connecticut, at their session in May, 1833, passed a resolution to incorporate the Hartford and New-Haven Rail-Road Com pany, with power to construct a rail-road or way, from the town of Hartford to the city of New-Haven — We do subscribe to the stock of said ra'il-road, the number of shares annexed to our names respectively, on the terms, conditions, and limitations mentioned in said resolution.” One of these conditions is, that the stock shall amount to a real capital of at least five hundred thousand dollars, if necessary for the completion of the work, not a nominal capital merely, or none at all, at the pleasure of the stockholders ; one of the limitations is, that no stockholder shall be compelled to pay more than one hundred dollars for each share ; and one of the terms is, that the directors may require the payment of the sum or sums subscribed to the capital stock of the company, at such times, and in such proportions, and upon such conditions, as they may deem fit. By the act of subscribing for and receiving stock, the defendant, as a stockholder, voluntarily associated with others to raise his proportion of the sum of five hun. dred thousand dollars, as it might from time to time be wanted, and subjected himself to the requisition of the directors in relation to the payment of instalments. This was a voluntary act on his part. It was an assent to perform what was required of him by the directors, within the terms of the charter. It was a promise to pay in money the amount which he subscribed to pay. Hence the peculiar fitness of the expression in the act of incorporation, “ the directors may require the payment of the sum or sums subscribed to the capital stock,” and on failure or neglect to make payment pursuant to the requisition of the board of directors, the stock of delinquent stockholders, or so much thereof as may be necessary, may be sold, by the directors, after the lapse of six months from the time the payment becomes due ; and the surplus, the avails of such sale, after deducting the payments due, and interest thereof, and the necessary expenses of sale, shall be paid over to such negligent stockholders. This section of the charter, which, by reference, is made part of the subscription of the defendant, points very distinctly to a personal liability on the part of the stockholders. “ The directors may require payment.” Requiring payment, as the term is here used, is equivalent to demanding payment; and if the act of incorporation authorizes a demand of payment, it necessarily confers a legal right to insist upon the performance of the thing demanded ; and such right, of course, implies the additional right to the aid of the process of the law to enforce it, unless it be taken away or controuled, by other provisions in the charter. Whenever a statute gives or provides any thing, the common law provides all necessary remedies and requisites. The Protector v. Ashfield, Hard. 62. When, therefore, the defendant affixed his signature to the subscription, by which he freely gave the directors power to demand payment of the instal-ments, he virtually subjected himself to the legal consequences which would result from a failure to pay money which he had given them authority to require him to pay. He made himself amenable to compulsory process to enforce payment. The section also speaks of “ the payment becoming due? Unless a promise to pay may be implied from the act of the defendant and the relation which he sustains to the corporation as a stockholder, it is not easy to perceive, that any payment is demandable, or is due. To say a sum of money may be lawfully demanded, and that it is due, when the person of whom the demand is made, may make the payment, or withhold it, at his pleasure; — may treat it as due or not, according to his good pleasure; — would be a gross perversion of language, and stultify both the legislature who authorized the directors to make demand of the moneys subscribed, and the individual who voluntarily assented to be subject to the exercise of that authority. We are to understand the language used, according to its plain, obvious meaning. It is not to receive any strained interpretation or forced construction; and when understood in its ordinary and familiar signification and import, and according to its general and popular use, it cannot be doubted that the acknowledgment of a debt due for instal-ments of stock, and of the right to demand payment of them, is equivalent to a promise to pay, which the law will enforce. Kellogg v. Union Company, 12 Conn. Rep. 7. Is there any substantial difference between such acknowledgment, and one expressed in these words, “Due A. B. 100 dollars, on demand,” which has been held to import an express promise to pay on demand? Smith & al. v. Allen, 5 Day 337. Or “ Due A. B. $325, payable on demand,” which, it has been decided, is a promissory note within the statute ; the acknowledgment of indebtedness on its face, implying a promise to pay on demand? Kimball & al. v. Huntington, 10 Wend. 675. Or “ I. O. U. 100.,” which is evidence, in support of a count in| assumpsit for money lent, of an acknowledgment of a debt ? Fisher v. Leslie, 1 Esp. Rep. 426. Israel v. Israel, 2 Campb. 499. Childers v. Boulnois, Dowl. §' Ryl. N. P. Ca. 8. Robarts v. Robarts, 1 Mo. & Pay. 487. So also the stock may be sold for the interest on the payments due. Interest is given as damages for the detention of a debt, or the non-performance of a contract. It is difficult to discover by what rule of equity, interest can be required to be paid, where there has been no default of payment of principal, — where there is no debt due, nor any contract unperformed. If there was no personal obligation to pay the instalments, the stockholder has been in no default. He has not neglected to pay a legal debt, nor failed to discharge a valid agreement. And why should interest be charged on that which is no debt, and which could not be enforced, by a court of law or chancery?

The certificates given by the company and accepted by the stockholders, furnish still further evidence of their intention to become personally liable to pay the instalments. They declare in effect, among other things, that the residue of the sums due on the stock, is payable by instalments as may be ordered by the board of directors. No language could more fully admit a liability to make payment, when ordered; and if it exist, it would seem that it must arise from the promise implied in the relation of stockholder and company under this charter — a relation created by the voluntary act of the parties.

It seems to us, also, that the intention of the legislature to impose a personal liability upon the stockholders for the assessments which are ordered, is fairly to be inferred from the consideration, that, had no authority been given to sell the shares of delinquent proprietors, such liability would have been created ; otherwise, the whole object of the act of incorporation might be defeated, and a wide door opened to the perpetration of the grossest frauds upon the corporation and their bona fide creditors. If the charter had made no provision for the sale of the shares, and all the other provisions had been retained, could any reasonable doubt be entertained that the stockholders would have been personally liable to pay the instalments ? Would not the law raise a promise to pay, from their engagement to take the stock at a certain value, and the authority . i i,ii given to the directors, both by the charter and by the stockhold-t0 reclui)e payment? Is it to be presumed that the legis. lature intended to create a corporation, with a solid fixed capi-to consist of stock in shares of a certain value ; with power to demand payment for it of those who voluntarily became stockholders under the provisions of the charter; with authority to do every thing necessary to effect the object of the incorporation ; to possess themselves of the lands of third persons ; to contract debts to an indefinite amount; and yet with permission to the proprietors to withhold payment, if they pleased, and thus enable them to defeat the object of the act, and defraud innocent persons ? If the legislature, upon the application of this company, had assisted them, by an issue of state stock, to be sold for their benefit; or had advanced moneys in aid of their enterprize ; or had authorized a subscription to the capital stock in behalf of the state, on which the instalments had been regularly paid; would it not be a perversion of the spirit and words of the charter, as well as a fraud on the state, so to construe the act of incorporation, as to allow the private stockholders the benefit of these funds, and exonerate them from personal liability for their instalments? We think it very clear, that aside from the clause authorizing the sale of the shares of negligent proprietors, the relation of stockholder and company, as created under this charter, implies a promise to pay for the stock.

Perhaps it is not unreasonable to infer such to have been the opinion of the supreme court of Massachusetts, both from their adoption and application of a rule, that where a statute gives a new power, and at the same time provides the means of executing it, it can be executed in no other way, and from the language used by Sewall, J., in giving the opinion of the court in the case of Middlesex Turnpike Corporation v. Swan, 10 Mass. Rep. 384. Referring to the case of the Andover and Medford Turnpike v. Gould, 6 Mass. Rep. 45., which is the first case in which such a rule was applied, directly, to a turnpike corporation, he says : “ The statute which created the power of assessing, also ascertained the remedy to compel the payment of assessments; and no implied promise or personal duty results from a consent to become a proprietor of shares in a turnpike, where the corporation is established with the -power and remedy of assessments.” If no such power and remedy were provided, would the court have no implied promise would have resulted from becoming a stockholder ?

If, therefore, without the clause giving the directors power to sell the stock of delinquent stockholders, a promise would have been implied to pay the instalments, the only remaining en-quiry is, ought this clause so to operate as to rebut this implication ? Is the remedy which it provides, cumulative merely, leaving the promise in full force, or does it abrogate the promise which is implied in voluntarily becoming stockholders in the company? This enquiry, we propose to answer.

The argument of the defendant has proceeded mainly upon the ground that it is by virtue of the 13th section alone, (which gives the authority to sell) that any remedy exists to enforce the payment of instalments. We have already examined this argument; and we think it unsupported, by any fair construction of which the act of incorporation is susceptible. The views we have expressed on this point, are believed to be eminently just, and in accordance with the spirit and fair meaning of the plaintiffs’ charter, and the act of the defendant voluntarily becoming a stockholder and subjecting himself to all the obligations imposed by the act of incorporation. We think also, they are sustained by high authority. Union Turnpike Co. v. Jenkins, 1 Caines’ Rep. 380. S. C. 1 Caines' Ca. in Err. 86. Spear v. Crawford, 14 Wend. 20. Bear Camp River Co. v. Woodman, 2 Greenl. 404. Instone v. Frankfort Bridge Co. 2 Bibb, 576. Mayor, &c. of Baltimore v. Howard, 6 Harris & Johns. 383. Dugan v. Mayor, &c. of Baltimore, 1 Gill & Johns. 499. Bergen v. Clarkson, 1 Halst. 352. Bond v. Susquehannah Bridge and Banking Company, 6 Harr, & Johns. 128.

The counsel for the defendant, in the course of the argument addressed to us, have insisted, that whatever personal obligations might have been incurred under this charter, on the part of the stockholders, had not a specific remedy been provided for their defaults; yet that the 13th section, which gives authority to sell the shares of- negligent stockholders, is the only remedy which can be pursued, and excludes the responsibility which the common law would otherwise have implied and enforced. We have heretofore adverted to this section for another purpose, and shall now consider it more particularly with reference to the inference drawn from it, by the defend-anf- This duty is imposed upon us, as well from the import-0f (jjg principle assumed, as from the great respectability of the precedents which have been cited in its support. The section is in these words: “That the directors of said company may require the payment of the sum or sums subscribed to the capital stock of said company, at such times, and in such proportions, and upon such conditions, as they may deem fit; and in case any stockholder shall refuse or neglect to make payment pursuant to the requisition of the board of directors, the stock of such stockholder, or so much thereof as shall be necessary, may be sold, by the directors of said corporation, at public auction, after the lapse of six months from the time when the payment became due; and all surplus money the avails of such sale, after deducting the payments due, and interest thereof, and the necessary expenses of the sale, shall be paid over to such negligent stockholder.” The position advanced and applied to the case before us, is, that when a statute gives a new power, and, at the same time, provides the means of executing it, those who claim the power, can exercise it in no other way. If a power is created in the plaintiffs to direct the instalments to be paid, they can enforce the payment in the method directed by the act of incorporation, and not otherwise ; and that method is by the sale of the delinquent’s shares. Such a position we find stated in several cases decided by the supreme court of Massachusetts, and is supposed to be the basis of several decisions by that court, in which it has been held, that where certain corporations were created with the powers and privileges, and subject to the duties contained in the statutes defining the general powers and duties of such corporations ; and where the only remedy provided by the statutes for the collection of the assessments upon the shares, when payment is neglected, is by sale of them; that remedy alone can be pursued, unless there be an express agreement to pay them. These precedents have been followed, by the supreme courts of Maine and New-Hampshire. Andover and Medford Turnpike Corporation v. Gould, 6 Mass. Rep. 40. Idem v. Hay, 7 Mass. Rep. 102. New-Bedford and Bridge-water Turnpike Corporation v. Adams, 8 Mass. Rep. 138. Middlesex Turnpike Corporation v. Swan, 10 Mass. Rep. 384. Franklin Glass Company v. White, 14 Mass. Rep. 286. Chester Glass Company v. Dewey, 16 Mass. Rep. 94. Salem Mill Dam Corporation v. Ropes, 6 Pick. 23. Proprietors of Newburyport Bridge v. Story, 6 Pick. 45. in notis. Ripley v. Sampson & al. 10 Pick. 371. Cutler v. Middlesex Factory Company, 14 Pick. 483. 3 Fairfield's Rep. 588. Franklin Glass Company v. Alexander, 2 New-Hamp. Rep. 380. These decisions emanate from high authority, and are entitled to great respect. We are far from being satisfied that they are applicable to the case before us. :

In the case of Andover and Medford Turnpike Corporation v. Gould, 6 Mass. Rep. 43. it is said, the tenth section of the Massachusetts act enacts, that whenever any proprietor shall neglect or refuse to pay a tax or assessment agreed on by the corporation, to their treasurer, in sixty days after the time set for payment, the treasurer may sell the share of the delinquent proprietor at public auction for the payment of the tax and the charges of sale. The words of this section are not as strongly indicative of the intention of the legislature to create a personal obligation to pay the assessment, as those of the 13th section of the plaintiffs’ charter. They give no authority, in terms, to demand payment; nor do they refer to the assessment as a debt due and recoverable. They rather imply, perhaps, that no debt was intended to be created by becoming a stockholder ; and that, if a tax is assessed, it is to be collected only by a sale of the shares. Hence the general act relating to turnpike corporations is considered as bearing a strong analogy, in this particular, to the acts authorizing the collection of county, town, and society taxes, and taxes laid by the proprietors of common fields. Andover and Medford Turnpike Corporation v. Gould, 6 Mass. Rep. 40. Gedney v. Tewksbury, 3 Mass. Rep. 307. In the act incorporating the plaintiffs, express authority is given to demand and require payment of the instalments. They are considered as debts due and unpaid ; and the neglect or refusal to discharge the obligation to make payment, authorizes the use of the additional remedy of a sale of the shares.

It is supposed there are other broad lines of distinction between the act which has received a judicial construction in the first case cited from Massachusetts, and the act on which the plaintiffs’ right to maintain this action is founded. It is understood, that in the former, the amount of the capital to be m-vested, is not fixed, by the legislature. It is, to some extent at least, dependent upon the will of the corporation. The power t0 make assessments is not expressly given, by the act defining the general powers and duties of turnpike corporations, but is only implied from the authority given in the tenth section of the act, to sell the shares of delinquent proprietors. Andover and Medford Turnpike Corporation v. Gould, 6 Mass. Rep. 43. 44. The discretionary power of these companies to create a large or a small capital, as their interest may require, coupled with the fact that the power to order any assessment arises solely by implication from the authority given to make sale of the shares, may, possibly, justify the inference that “ the legislature considered such sale as an adequate remedy to recover the assessments.” The shares are not valued at any given sum, in this act. They are not a part of any definite, fixed capital, required by law. No assessment can be made upon them, by virtue of an express statute enactment. The corporation have power to agree on a tax of the shaves of the proprietors ; but this power is only inferred from the authority given to sell, on failure to pay the tax. When, therefore, the legislature have not thought the public interest, or the just rights of third persons required the creation of a certain capital, but left the amount optional with the company; and when they have given no other authority to raise a capital in money, (independent of the payments voluntarily made by the proprietors,) than by sale of the shares of delinquent stockholders; it is not, perhaps, very unreasonable to give such a construction to their statute, as will confine the company to the exercise of the power expressly given. The power to assess is inferred from the power to sell; and the latter may, therefore, be considered as the only mode in which the former, for any practical purposes, can be exercised. It might be said, with some plausibility, that no general rule would be more just, or better adapted to carry into effect the intention of the legislature, than that which should declare, that when an authority to impose a tax upon the shares of the members of the corporation is derived solely by implication from the power to sell the shares on failure to pay the tax, every other mode of collection is excluded, when there is no express promise to pay. In such a case, it might be said, the intention would be manifest., to make the amount of capital paid in, dependent upon the will of the stockholders, or upon the sale of the shares; that the tor does not incur a personal obligation to pay any thing ; but the company are clothed with authority to raise the necessary funds, by a sale of the stock, upon the neglect of the stockholder to pay the just and equal assessments laid upon it. In this view, the assessment may be considered as made upon the stock merely, and the remedy in the nature of a proceeding in rem. Such would seem to be the import of the language) used in some of the cases referred to.

In Franklin Glass Co. v. While, 14 Mass. Rep. 286. the court, in commenting on the cases cited by counsel from Esp. Dig. 7., to sustain the position that if a person becomes a member of any society' or company, he thereby agrees to abide by all legal claims arising against him from the by-laws or local regulations of that society to which he belongs, (2 So. Car. Const. Rep. 215.) say, “ in the cases cited from Espin-asse, the penalties or assessments were set upon the persons, not upon the shares, as is the case under our statutes.”

In Ripley v. Sampson & al. 10 Pick. 371., Shaw, Ch. J., says, “ the individual liability of stockholders created by the statute of 1808, was of a particular and limited character ; and could only be enforced in the manner pointed out in the statute. It did not subject a living stockholder to a general liability for assessments, but only authorized the company to sell the shares for payment of the assessments. By operation of law, the assessment is a lien upon the share. The share is in the same condition with any other pledged property.” And in Cutler v. Middlesex Factory Co. 14 Pick. 483., the same judge uses similar language. “ The only' compulsory mode which a manufacturing corporation has, to enforce the payment of assessments, is, by sale of the share. By law, the assessment is a lien on the share. The executor has an option to redeem the share for the benefit of the estate, by payment of the assessment, as he would have to redeem any other pledged property; and this option he will exercise according to his views of the interest of the estate.”

A similar distinction is taken between assessments upon the person and upon the stock or property, in the case of The Trustees of the Congregation in Hebron v. Quakenbush, 10 Johns. Rep. 217. In that case, the pew on which the assessment was made, had been sold to the defendant free of rent; . , . the pews were sold at a high price, in consequence or this exemption. Ihe statute vests the possession of the church in trustees ; and gives them power to “regulate and order the venting of the pews therein.” About six months after the sale of the pews, the congregation passed a vote, that if any assessment was made on the pews, and it remained unpaid for one month, the pews should be sold for the benefit of the congregation. No promise of the defendant to pay rent Was shown ; but he continued to be a member of the congregation, and occupied the pew he had purchased ; and the action w’as brought to recover his proportion of the salary of the minister, assessed by the plaintiffs on all the pews. The court, in giving judgment for the defendant, say, “ whether the assessment of the pew rent was a valid assessment, we need not now en-quire ; for the defendant is not chargeable, in this case, upon the implied assumpsit to pay, in consequence of the occupation of the pew. The trustees have no power to make and levy personal assessments ; and the owner of the pew is not liable in personam, unless there be some special ground from which to infer a contract and promise to pay. The facts in this case are not sufficient to furnish such an inference.”

We are confirmed in the suggestions we have ventured to make touching the decision in Massachusetts, by adverting to the language of Seioall, Ch. J., in Phillips Limerick Academy v. Davis, 11 Mass. Rep. 113. Referring to the cases decided by the supreme court of that state, in which it was held, that no implied obligation on the part of the corporators to pay their assessments, arose from their being voluntarily members of the corporation, he says, “ it is said, that these decisions were upon the ground of another remedy provided by the legislature in the act of incorporation. But that was not the sole ground, if it is in any respect a reason for those decisions." And upon no other principle than that the payment of the assessments was intended to be enforced only by a sale of the stock, inasmuch as the power to assess was implied merely from the power to sell, can we consider the remarks of the court in Andover and Medford Turnpike Corporation v. Gould, 6 Mass Rep. 40., as having any just application. “ Persons not interested in having the turnpike, either from their situation or private property, may be request-«ti to associate and become corporations. They may not be able to judge of the probable expenses or profits. But if they know that if the assessments become grievous, they may abandon the enterprize, by suffering their shares to be sold, they may, on this principle, join the association.” This language, upon the supposition that no personal liability was intended to be imposed upon the proprietors, would be consistent with the good faith and moral honesty due to the creditors of the corporation.

If the plaintiffs’charter is compared with the provisions of the Massachusetts act, as stated in the reported case, a wide difference will readily be perceived between them, in the particulars which have been mentioned. In their charter, the amount of the capital is not made to depend upon the caprice or the voluntary act of the corporation. “ It shall be five hundred thousand dollars, with the privilege of increase to one million of dollars, to be divided into shares of one hundred dollars each.” The company is vested with all powers, privileges and immunities, which are or may be necessary to carry into effect the purposes and objects of the act, and is empowered to purchase, receive and hold such real estate as may be necessary and convenient in accomplishing the object for w'hich the incorporation is granted. A certain definite capital is created, by the act, such as was deemed requisite to ensure the completion of the work, and the faithful performance of the contracts of the corporation. Ample provision was made that this capí, tal should not be merely nominal, but real. For this purpose subscriptions were authorized to be received, under such regulations as the persons named in the first section of the act( might adopt. The directors were authorized to require payment for the stock, at such time or times, and in such proportions and upon such conditions, as they should deem fit. They were also authorized to sell the stock of delinquent stockhold-ders ; and a forfeiture of the charter was incurred, if one hundred thousand dollars was not expended upon the rail-road within four years, or the road was not constructed, completed and put in operation within six years from the passage of the act. In all these provisions, great solicitude is manifested to secure the public interest, the rights of creditors, the usefulness of the corporation, the just expectation of the stockholders. A capital sufficiently large was required to be created. The payment of so much as was necessary to ensure the completion of the work within a reasonable time, and to discharge all was enforced, by the authority given to require pay-of the instalments, to sell the shares of negligent proprietors, and by the forfeiture of the charter, if the commencement or completion of the undertaking was unreasonably delayed. It is true, the payment of the assessments is dependent upon the action of the directors. They may limit the actual capital to a less sum than five hundred thousand dollars, if the whole amount is not wanted for the object; but no just fears were entertained that their duties to the public, the corporation and third persons would not be discharged.

In the plaintiffs’ charter, the authority to demand payment for the stock, is not merely implied from the power given to sell: it is given in express and explicit terms ; “ the directors may require the payment of the sums subscribed to the capital stock,” &c. The power to sell is additional to the power to demand payment, and is not the only power expressly given. Hence no inference can be deduced that the exercise of the authority to sell, was the only means intended to be provided to secure the payment of the capital stock. The subscriptions to this stock were not like those to the turnpike stock in Mas-sachusettSf--an engagement to take a certain number of shares of uncertain value, in a company without any fixed capital, — but an engagement constituting the subscribers stockholders in a company with a specified capital, the shares of a certain determinate value, and creating an obligation on them to comply with all the terms, conditions and limitations mentioned in the charter, one of which gives authority to demand of them the payment of instalments, as they shall be ordered by the directors.

The form of the certificates of stock issued by the corporations in Massachusetts, does not distinctly appear from the reported cases. In the case before us, a certificate was issued and delivered to the defendant, in which it is expressed, that the residue of the sums due for the stock, is payable by in-stalments, as may be ordered by the board of directors.

After a careful examination of the decisions to which our attention has been called, we are inclined to the opinion that the decision first made, (6 Mass. Rep. 40,,) and which was subsequently followed in the other cases cited, supposed to be similar, may be maintained upon principles which are wholly inapplicable to the case before us ; and therefore, that it not to be regarded as a precedent.

It will be observed, that the remarks we have made, founded upon the distinctions between the general act of Massaehu-setts, and the plaintiffs’ charter, are confined to the act of 1804, and the decision under it, in the case of Andover Sp Medford Turnpike Corporation v. Gould, 6 Mass. Rep. 40. Several of the cases cited, appear, from the reports, to have been decided with reference to other statutes, in which the distinctions noticed, do not exist, — certainly not all of them, — perhaps none of them. We have taken the leading case on which the defendant relies ; have examined it in connection with the provisions of the act as they are referred to in it; and pointed out the distinctions between that act, and the act incorporating the plaintiffs. If the subsequent cases do not admit of the same explanation, we may, without impropriety, say of them, that what was considered as a precedent, had been established ; that the maxim stare decisis was probably applied to them ; and that the court may have adopted the opinion of Lord Eldon in Townley v. Bedwell, 14 Ves. 591., that although they did not mean to say, that a great deal might not be urged against it, yet where there is a decision believed to be in point, it is better to follow it.

We are not sure, however, that the highly respectable judicial tribunal, which decided these cases, was governed by any of the peculiar circumstances to which we have referred ; nor will we confidently assert, that the cases are not strongly analogous to, or are distinguishable from, the present case. If the court are to be understood as establishing and applying to all statutes in no sense penal, the position that where a new power is given by a statute, which also prescribes the mode of its execution, those who claim the power can exercise it in no other way, we feel constrained to say, we cannot give to decisions founded on such a position, the force of law in this state. We think the principle on which they are made to rest, when applied to the subject before us, is not “ founded in sound reason nor is it sustained by any judicial precedent referred to in the decisions, or which we have been able to find. We believe these cases are the only ones, in which the rule, that where a statute creates an offence unknown to the common law, and in the enacting or prohibiting clause, points out the mode of proceeding under it, that mode alone can be pursued, ever been held applicable, by analogy, to all beneficial stat-unless it be the case of Donaldson v. Beckett, 4 Burr. 2408., in the house of lords, upon an appeal from a decree of the court of chancery founded upon the judgment in Miller v. Taylor, 4 Burr. 2303. And if the rule was applied to that case, it is the first and last civil case, in Great-Britain, which has fallen under our notice, in which it has been held to be of universal application. It is, however, not certain, that the decision in that case has ever been, or is now considered, as warranting the application of the rule to beneficial statutes in general. Beckford v. Hood, 7 Term Rep. 620. Wheaton & al. v. Peters & al., 8 Peters, pp. 679. 680., per Thompson J. Nichols & al. v. Ruggles & al., 3 Day 145. It is believed, that it is confined principally to criminal cases: and is applicable to such cases, because the offence and the remedy are so interwoven, that the one cannot be separated from the other. Castle’s case, Cro. Jac. 644. Rex v. Robinson, 2 Burr. 799. Rex v. Boyall, 2 Burr. 832. The King v. Harris, 4 Term Rep. 202. Livingston & al. v. Van Ingen & al. 9 Johns. Rep. 507. Almy v. Harris, 5 Johns. Rep. 175. In the case of penal statutes, which are construed strictly against the person accused, and where a new offence and the mode of prosecuting it are created in the same clause, it has been supposed that the intention of the legislature to confine the mode of proceeding to that specified in the statute, was sufficiently expressed,» — at least such has been the construction in favour of the offender against penal laws. But as to beneficial statutes, a liberal interpretation is to be given in advancement of the objects designed to be promoted. Camp v. Bates, and cases there cited, 13 Conn. Rep. —. As to them, where a common law remedy is not taken away, by the statute which prescribes a new one, the latter is merely cumulative. In the case before us, the power to sell the stock of delinquent stockholders, was given as an additional security to the public, the company and their creditors, that the instal-ments should be promptly paid. It was to operate as an incentive to the stockholder to make payment, and, at the same time, afford additional facilities to the company, to obtain the necessary funds to effect the object of their incorporation. It was not intended to defeat that object altogether, whenever from the force of circumstances, the stock might be or much diminished in value. And no construction should be given to the plaintiffs’ charter, unless the rules of law ously require it, which will defeat the object of the grant, impair the public interest, ruin the company, or defraud third persons of their just rights. The King v. Everden, 9 East 101. per LeBlanc, J. Grays v. Turnpike Co. 4 Rand. 378. A construction which should limit the power of the company to a sale of the shares when instalments remain unpaid, would, we think, have a tendency to cause these results, and, in many cases, would actually produce them. We cannot adopt it, when neither the words nor the spirit of the act require it; and when no rule of law demands it.

We might add, that it is by no means clear, that the rule in criminal cases to which reference has been made, would apply to the present case, were this a penal statute ; for that rule is confined to cases where the particular remedy is created in the enacting or prohibiting clause, or where there is, in terms, no prohibitory clause.

It is an established principle, that when a new offence is created by an act of parliament, and a penalty is annexed to it, by a subsequent separate and substantive clause, it is not necessary for the prosecutor to sue for the penalty, but he may proceed on the prior clause, on the ground of its being a misdemeanour. The King v. Harris, 4 Term Rep. 202. In the case before us, the authority to sell the stock is in a subsequent distinct substantive clause from those which incorporate the company, create its rights, declare its duties, and authorize subscriptions to the capital stock. The first section of the act creates certain persons therein named, and such others as shall associate with them, a body corporate and politic in prcssenti. Indeed, the power to sell is predicated upon the existence of the corporation and the formation of the company under the charter. All the acts necessary to give it vitality, are supposed to have been done. It is considered as an existing body corporate, with powers to sue and to contract. It has received the engagement of the stockholders to take the stock ; and their implied promise to pay for it, arises before the remedy by sale can be used: and this remedy being in a separate clause and not declared to be exclusive, is, upon well established principles, onlf cumulative. We think, therefore, that the cases cited from Massachusetts, Maine and Nevi-Hampshire, cannot be vin-upon the grounds on which, it is supposed, they were ; that the rule applied to them is confined, principally, to penal statutes ; or if not, they are not within either the letter or spirit of that rule.

It may be added, that if the act of becoming a stockholder under this charter, implies a promise to pay the assessments upon the stock, (which we think it does, for the reasons heretofore stated) a familiar rule in the construction of statutes, justifies us in saying, that the promise is not abrogated, by the additional power given to sell the stock of delinquent proprietors. “ A statute made in the affirmative, without any negative, expressed or implied, does not take away the common law. Inst. 200. Co. Litt. 115. in notis. Com. Dig., tit. Action upon Statute. C. Almy v. Harris, 5 Johns. Rep. 175. The party may waive his benefit by such affirmative statute, and take his remedy by the common law; which, however, does not mean, that the statute is not binding, but that the party may make his election which to proceed upon.” 1 Co. 64. Cro. Eliz. 104. And where a liberal construction is necessary to can y into effect the object of a remedial statute, although it be introductory of a new law, no negative ought in general to be implied.

The application of these principles to the case before us, is not difficult. The act of becoming a stockholder pursuant to the provisions of this charter, is one from which the law raises a promise to pay the instalments legally assessed and demand-able. The common law furnishes a remedy for a violation of this engagement, by an action of assumpsit. The subsequent enactment authorizing the directors to sell the stock, is affirmative in its terms. It does not expressly, or by implication, take away the previous remedy, which the common law has provided. No words are used indicative of an intention to deprive the corporation of their previously existing remedy ; no necessity is perceived why they should be deprived of it; and every consideration arising from public policy, or connected with go®d faith and common honesty, demands that this remedy be continued in full force.

One further remark applicable to this branch of the subject, will complete all which we deem it necessary to say upon the whole case. It is conceded, that had the defendant promised, . , in express terms, to pay the instalments, an action of sit might have been maintained upon that promise. But the 13th section provides the only remedy (o enforce the ment, and, therefore, excludes an implied promise to pay, it is not readily perceived why it should not cause an express promise to be legally inoperative. There is no other consideration to suppoit the latter, than that which sustains the former. It is precisely the same in both. The moral obligation to pay is equally strong in both. The same facts, and no other, which, it is believed, raise an implied assumpsit in this case., would exist, had an express engagement been superadded. But if the law would not‘raise a promise from these facts, simply. because the act of incorporation has provided another remedy, why will it enforce an express promise founded entirely upon the same facts, with the same remedy continuing in full force? If, in consequence of the particular remedy provided there is no legal presumption, from the admitted facts, that the stockholders intended to become personally responsible, how can the same facts sustain an express promise, where the same remedy may be applied'! If the foundation of an implied promise fails, by reason of the existence of a special remedy provided by the statute, why is not the support of an expresa promise, as completely taken away, by force of the same remedy ?

We consider, therefore, the l3lh section of the plaintiffs’ charter as affording a cumulative remedy merely; and that neither its language, its object, nor any analogies of the law which are known to us, require us to hold that remedy to be exclusive. Chapman v. Pickersgill, 2 Wils. 145. Brown v. Chapman, 3 Burr. 1418. Ward v. Bird, 2 Chitt. Rep. 582. Rex v. Carlisle, 3 B. & A. 161. Sharp & al. v. Warren, 6 Price 131. Delaware & Schuylkill Navigation v. Sansom, 1 Binn. 70. Union Turnpike Co. v. Jenkins, 1 Caines’ Rep. 380. S. C. 1 Caines’ Ca. in Err. 86. Goshen Turnpike Co. v. Hurtin, 9 Johns. Rep. 217. Highland Turnpike Co. v. McKean, 11 Johns. Rep. 98 Farmers Turnpike Road v. Coventry, 10 Johns. Rep. 388. Scidmore v. Smith, 13 Johns. Rep. 322. Dutchess Cotton Manufactory v. Davis, 14 Johns. Rep. 238. Welmore & al. v. Tracy, 14 Wend. 250. Harlaem Canal Co. v. Seixas, 2 Hall’s Rep. 504. Idem v. Spear, 2 Halls Rep. 510. Canal & Banking Co. v. Nathan, 2 Hall's Rep. 239.

Jt is proper to add, that our decision in the present case, has been made with reference to the facts stated in the motion for a new trial. Whenever other cases arise, in which the facts do not correspond with those disclosed by this record, they will be duly considered.

The opinion expressed at the circuit was correct, and a new trial is to be denied.

In this opinion the other Judges concurred.

New trial not to be granted.