28 Pa. 318 | Pa. | 1857
The opinion of the court was delivered by
After the organization of the West Chester and Philadelphia Railroad Company, the managers, for the purpose of obtaining additional subscriptions to the capital stock of the company, adopted a proviso to be added to the form of contract to be subscribed by the future purchasers of stock. By that proviso it-was stipulated that “ the subscription hereto shall be binding only in the event of an aggregate of $300,000 being subscribed, inclusive of all former subscriptions, and of such subscriptions as shall be made absolute or shall become so by the fulfilment of their conditions.” To that contract Eber Hickman, the defendant below, subscribed to the number of ten shares, promising to pay $50 to each share, in such manner and proportions, and at such times as shall be determined by the president and managers of said company. This action is brought to recover the sums of money thus contracted to be paid.
By the Act 11th April, 1848, entitled “ x\n Act authorizing the Governor to incorporate the West Chester and Philadelphia Railroad Company,” commissioners were appointed .to receive subscriptions to the stock according to the form prescribed in the act. That form contained no proviso of the kind contained in the contract of the defendant, and it was declared in the section authorizing the commissioners to receive subscriptions, that no subscription shall be valid unless the person so subscribing shall pay to the said commissioners at the time of making the same, the sum of $5 on each and every share, for the use of the company. It is very clear that the proviso applies exclusively to subscriptions received by the commissioners before the organization of the company. It is contained in the section specifying their powers and regulating their duties. It provides that the money shall be paid to the commissioners. But when 1200 shares of the stock were taken, and $5 on each share paid, the commissioners certified the fact to the governor, and letters patent issued according to the act of incorporation. A president and managers were elected, who were fully authorized by the charter to conduct the business of the company. They possessed the power to enter into any contract which was necessary to the purposes for which the corporation was created.
It follows from these views that the condition annexed to the defendant’s subscription was valid; that the payment of $5 per share at the time of subscription was legally dispensed with by consent of the contracting parties; that the terms of the defendant’s contract contemplated any proper conditions which other
As an incident to the power to conduct the business of the company, the corporation possesses authority to compromise disputes; and if, in the collection of subscriptions, it is found necessary, in order to secure a part of a doubtful claim, or of one which cannot be collected by reason of the insolvency of the debtor, they may release a part for the purpose of securing the residue. This power must be understood as within the contemplation of all persons when they become stockholders. All that is regarded is good faith in its exercise. '
The defendant in this case cannot be made liable on his subscription, until the plaintiff shows a compliance with the conditions on which the subscription was made, and that the instalments were subsequently called in by the president and .managers before suit brought. An error in making the call before the liability accrued may be corrected by a subsequent call, after the liability accrued and before action brought.
Where one person agrees to take stock in a corporation on condition that others subscribe to the same stock, it is implied in the contract that the conditional subscriber shall be charged by any evidence which would be sufficient to charge the others in actions brought against them' on their subscriptions. The acknowledgment of their signatures, although after action brought, is therefore sufficient. The proof of their signatures, by a witness who called upon them and saw them severally write their names, although since suit brought, may be given in evidence to corroborate their admissions. In a case like this, a more stringent rule of evidence would put the parties to great and unnecessary inconvenience.
Proof of payment for stock standing in the name of the person making the payment, involves proof of a previous subscription. As the object of the proviso annexed to Eber Hickman’s contract, was to secure sufficient funds to enable the corporation to proceed sufficiently with the work, it is obvious that such evidence is a compliance with the proviso, as far as it furnishes the funds required.
P. Frazer Smith, Esq., was a stockholder, and was therefore properly rejected as incompetent to testify in behalf of the corporation.
The books of the corporation, purporting to contain the names of subscriptions to the stock, are not of themselves evidence of the existence of such subscriptions.
Francis T. Davis had no correspondence with Mr. Philpot — had
The 1st, 2d, 3d, 4th, and 5th errors assigned are not sustained, but the 6th, 7th, 8th, and 9th are.
The 10th, 11th, 12th, and 13th are not assigned according to the rules of court. Some of them are but repetitions of those already considered; others are of a character not likely to arise on a second trial, under the principles affirmed in this opinion. It is therefore not necessary to notice them.
Judgment reversed and venire facias de novo awarded.