18 Barb. 312 | N.Y. Sup. Ct. | 1854
By the original articles of association the plaintiffs’ road was to be constructed from the village of Macedón to some point on the road leading from Victor to Vienna village, in the town of Victor, with a branch extending westerly, &c. to the west line of the town of Macedón, and was
By the first section of the “ act in relation to plank roads and turnpike roads,” passed April 6,1849, (Sess. Laws of 1849, ch. 250,) directors of plank roads may, with the written consent of the persons owning two-thirds of the stock, and with the written consent of a majority of the inspectors, &c., construct branches to their main line of road, or extend their main line, or change the route of their road or any part thereof, which branches or extensions shall in all respects be governed by the same rules, and affected by the same laws, as the main line of road, and the directors may increase the capital stock of the company, &c. This act had become a law, and was in force, at the time of the formation of the Macedón and Victor Plank Road Company, and the date of the articles of association.
The directors, after the defendant had subscribed for the stock in question, extended the main line of the road from Victor to Bristol Center, and increased the capital stock to $50,000, and before the commencement of this action had actually completed the road as thus extended, at an expense of that amount. The plaintiffs’ counsel contends that they had the right to do this, by virtue of the act of 1849 referred to. But the right claimed to .be conferred by the act is upon condition of obtaining the consent in writing of the persons owning two-thirds of the stock, and with the like consent of a majority of the inspectors. It does, not appear that these conditions have been performed. There is no evidence tending to show the consent of the stockholders
Do these unauthorized acts of the company release or absolve the defendant from liability to pay his subscription ? The original articles of association, which was the fundamental law of the company, and the basis of the defendant’s agreement, contemplated the making a road from Macedón to Victor, which, with the branch mentioned, embraced a distance of ten miles, and at an expense or with a capital of $15,000. The company have not only completed this enterprise, but have superadded thereto the expenditure, by an extension of their main line of road, of more than three times the original capital, which has been increased in the sam'e proportion. They have also procured an act of the legislature, authorizing them to change their corporate name, to the one in which this action is brought. (Laws of 1850, ch. 93.) These changes, particularly the extension of the road and increase of the capital, were essential and radical. If they had been made even in pursuance of a legislative enactment made or procured after the subscription by the dedefendant of the stock in question, the latter would have been released. (The Middlesex Turnpike Corporation v. Lock, 8 Mass. R. 268. Same v. Swan, 10 Id. 384. The Hartford and New Haven Railroad Co. v. Croswell, 5 Hill, 383. Stevens v. The Rutland and Burlington Railroad Co., Am. L. Reg. for Jan. 1853, vol. 1, p. 154.) That the extension was unauthorized and illegal, certainly cannot help the ease for the plaintiffs. I am therefore led to the conclusion that the conduct and transactions of the company have been such as to exonerate the defendant from all liability upon his subscription.
It is urged, on the part of the plaintiffs, that the defendant having participated in the proceedings of the company to extend the road, and having retained his stock after such change had been made, and then sold the same for a valuable consideration to a third person, who thereby became vested with the rights of
In regard to the defendant’s transferring his stock, which took place on the 29th of March, 1850, the next day after the final resolution of the directors to extend the road, I confess myself
The motion to set aside the nonsuit should, in my opinion, be denied.
Judgment accordingly.
Johnson, T. R. Strong and Welles, Justices.]