in regard to the time of completing the road, or its location made by those who take up the subscription, and in good faith, and upon proper inquiry, and the exercise of reasonable discretion, believed by the subscriber, and which constitutes the prevailing motive and consideration for the subscription, and which proves false, it would seem that the contract of subscription should be held void, both in law and equity.4

4. When the statute requires the registry of shares to be made within a limited time, such requirement is regarded as merely directory, and the registry, although not made within the prescribed time, will still be competent evidence, and to the same extent as if made within the time required.5

5. Where subscriptions are made under an agreement that they are not to be binding unless a specified sum is subscribed, it is essential that there should be no conditions as to the liability of any of the subscribers not applicable to all. Confidential subscriptions made for the purpose of making up the required sum are a fraud upon the other subscribers; and should not be treated as valid subscriptions. Where by deducting such confidential subscriptions the required sum is not subscribed the contract of subscription does not become operative, so as to bind the subscribers. Parol evidence is admissible to show that certain of the subscriptions were confidential in character and therefore fraudulent.6

* Henderson v. Railway Company, 17 Texas R. 560.

5 Wolverhampton N. W. Co. v. Hawksford, 7 C. B. N. S. 795; 6 Jur. N. S. Affirmed in Exch. Chamber, 10 W. Rep. 153, 11 C. B. N. S. 456, 8 Jur. N. S. 844.

632.

• New York Exchange Co. v. De Wolf, 31 N. Y. 273.

§ 49. 1. The company may resort to all the modes of enforcing payment of calls which are given them by their charter, or the general laws of the state, unless these remedies are given in the alternative. But the principal conflict in the cases seems to arise upon the point of maintaining a distinct action at law for the amount assessed. Many of the early turnpike and manufacturing companies, in this country, did not create any definite, or distinct * capital stock, to consist of shares of a definite amount, in currency, but only constituted the subscribers a body corporate, leaving them to raise their capital stock, in any mode which their by-laws should prescribe. And in some such cases, the charter, or general laws of the state, gave the company power to assess the subscribers according to the number of shares held by each. But the amount of the shares was not limited. The assessments might be extended indefinitely, according to the necessities of the company. In such cases, where the only remedy given, by the deed of subscription, the charter and by-laws, or the general laws of the state, was a forfeiture of the shares, the courts generally held, that the subscriber was not liable to an action in personam for the amount of calls.1 And this seems to us alto

1 Franklin Glass Co. v. White, 14 Mass. R. 286; Andover Turnpike Co. v. Gould, 6 Mass. R. 40; Same v. Hay, 7 id. 102; New Bedford Turnpike Co. v. Adams, 8 id. 138; Bangor House Proprietary v. Hinckley, 3 Fairfield, 385, 388; Franklin Glass Co. v. Alexander, 2 New Hamp. R. 380. But where there

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gether reasonable and just. For if a subscription to an indefinite stock created a personal obligation to pay all assessments made by the company upon such stock, it would be equivalent to a personal liability of the stockholders for the debts and liabilities of the company; as we shall see, hereafter, that the directors of a corporation may be compelled, by writ of mandamus, to make calls upon the stock, for the purpose of paying the debts of the company.2

2. But where the stock of the company is defined in their charter, and is divided into shares of a definite amount in money, a was an express promise to pay assessments, or facts from which such an undertaking was inferable, it was always held, even in this class of cases, that an action will lie. Taunton & South Boston Turnpike Co. v. Whiting, 10 Mass. R. 327; Bangor Bridge Co. v. McMahon, 1 Fairfield, 478. But a subscriber to the stock of a turnpike company, who promised to pay assessments, when afterwards the course of the road was altered by law, was held thereby exonerated. Middlesex Turnpike Co. v. Swan, 10 Mass. R. 384. The citation of cases to these points might be increased indefinitely, but it is deemed useless, as these propositions have never been questioned. Worcester Turnpike v. Willard, 5 Mass. 80. The following cases will be found to confirm the cases cited above. Chester Glass Co. v. Dewey, 16 Mass. R. 94; Newburyport Bridge Co. v. Story, 6 Pick. 45; Salem Mill-Dam Co. v. Ropes, 6 Pick. 23; Ripley v. Sampson, 10 id. 371; Cutler v. Middlesex Factory Co., 14 id. 483. This general question of the responsibility, assumed by those who consent to become shareholders in a corporation, where the shares are not fully paid up, is considerably discussed, by Allen, J., in a recent case in the N. Y. Court of Appeals, where the facts being peculiar, it was held the shareholder incurred no obligation to pay the balance due upon the shares if he elected to abandon it. Seymour v. Sturgess, 26 N. Y. R. 134. But there is no implication of duty to pay the amount of a subscription to the stock of a railway company, especially where the terms of subscription declare payment to be made in such instalments as shall be required by the board of directors, unless the declaration and proof show that an instalment had been required by the directors. Gebhart v. Junction Railw. Co., 12 Ind. R. 484; McClasky v. Grand Rapids & Ind. Railw. Co., 16 Ind. R. 96. Where by the charter of an eleemosynary corporation subscriptions were allowed to be taken, and the subscriber, by securing the amount and paying the interest promptly, was entitled to save the payment of the principal, it was held this was matter of indulgence to the subscriber, to which he could only entitle himself by proving his compliance with the conditions upon which the indulgence was granted. Denny v. North W. Christian University, 16 Ind. R. 220. The undertaking of subscribers to a joint-stock will be held several and not joint, without express words. Price v. Grand Rapids & I. R. Co., 18 Ind. R. 137. The law by which a corporation exists and acts forms part of the contract of subscription. Hoagland v. Cin. & F. W. R. Co., 18 Ind. R. 452.

2 Post, § 50.

subscription for shares is justly regarded as equivalent to a promise to pay calls, as they shall be legally made, to the amount of the shares. This may now be regarded as settled, both in this country and in England, and that the power given the company to forfeit and sell the shares, in cases where the shareholders fail to * pay calls, is not an exclusive but a cumulative remedy, unless the charter, or general laws of the state, provide that no other remedy shall be resorted to by the company.3

* Hartford & New Haven Railway Co. v. Kennedy, 12 Conn. R. 499. In this case it was held, that, from the relation of stockholder and company thus created, a promise was implied to pay instalments, that the clause authorizing a sale of the stock was merely cumulative; and that, whether the company resorted to it or not, the personal remedy against the stockholder remained the same. The same points are confirmed by the same court, in Mann v. Cooke, 20 Conn. R. 178. And in Danbury Railw. Co. v. Wilson, 22 Conn. R. 435, the defendant was held liable for calls upon a subscription to the stock of a company whose charter had expired, and been revived by the active agency of defendant. See also Dayton v.

Borst, 31 N. Y. R. 435; Piscataqua Ferry Co. v. Jones, 39 N. H. R. 491.

All the cases, with slight exceptions, hold, that where the subscription is of such a character as to give a personal remedy against the subscriber, in the absence of all other specific redress, the mere fact that the company have the power to forfeit the shares for non-payment of calls, will not defeat the right to enforce the payment of calls by action. Goshen Turnpike Co. v. Hurtin, 9 Johns. 217; Dutchess Cotton Manufacturing Co. v. Davis, 14 Johns. 238; Troy T. Co. v. McChesney, 21 Wend. 296; Northern R. v. Miller, 10 Barb. 260 Plank Road Co. v. Payne, 17 Barb. 567. In this last case it was held to be matter of intention and construction, whether the remedies were concurrent and cumulative, or in the alternative. And in Troy and Boston R. v. Tibbitts, 18 Barb. 297, it is said to be well settled, that the obligation of actual payment is created, by a subscription to a capital stock, unless plainly excluded by the terms of the subscription, and that the forfeiture is a cumulative remedy. Ogdensburg R. & C. Railway v. Frost, 21 Barb. 541. See also Herkimer M. & H. Co. v. Small, 21 Wend, 273; s. c. 2 Hill, 127; Sagory v. Dubois, 3 Sand. Ch. 466; Mann v. Currie, 2 Barb. 294; Mann v. Pentz, 2 Sand. Ch. 257; Ward v. Griswoldville Manuf. Co., 16 Conn. R. 593; Lexington & West Cambridge R. v. Chandler, 13 Met. 311; Klein v. Alton & Sangamon R. 13 Illinois, R. 514; Ryder v. Same, id. 516; Gayle v. Cahawba R. 8 Ala. R. 586; Beene v. Cahawba & M. R. 3 id. 660; Spear v. Crawford, 14 Wend. 20; Palmer v. Lawrence, 3 Sand. Sup. Ct. R. 161, where Duer, J., says the law must now be considered as settled, "that the obligation of actual payment is created in all cases, by a subscription to a capital stock, unless the terms of subscription are such as plainly to exclude it." Elysville v. O'Kisco, 5 Miller, 152; Greenville & Columbia R. v. Smith, 6 Rich. 91; Charlotte & S. C. R. R. Co. v. Blakely, 3 Strob. 245; Banet v. Alton & Sangamon R., 13 Illinois R. 504, 514; Hightower v. Thornton, 8 Georgia R. 486; Freeman v. Win

*3. The question in the English cases seems to be, whether, after the forfeiture of the shares, and a confirmation of the same chester, 10 Sm. & M. 577; Tar River Nav. Co. v. Neal, 3 Hawks, 520; Gratz v. Redd, 4 B. Mon. 178; Selma R. v. Tipton, 5 Ala. R. 787; Troy & R. R. v. Kerr, 17 Barb. 581. Where the statute gives an election to the company either to forfeit the shares for non-payment of calls, or to sue and collect the amount of the shareholder, it was held that no notice of such election was necessary to be given before suit brought. New Albany & Salem R. v. Pickens, 5 Ind. R. 247. The terms of the charter must be pursued where they provide specifically for the redress for non-payment of calls. As if the shareholder is made liable only for deficiency after forfeiture and sale of the stock. Grays v. Turnpike Co., 4 Rand. 578; Essex Bridge Co. v. Tuttle, 2 Verm. R. 393. But some of the American cases seem to hold, that a corporation has no power to enforce the payment of calls, against a subscriber for stock, unless upon an express promise, or some express statutory power, and that a subscription for the stock is not equivalent to an express promise to pay calls thereon to the amount of the shares. Kennebec & Portland R. v. Kendall, 31 Maine R. 470. But this class of cases is not numerous, and is, we think, unsound. See also Allen v. Montgomery R., 11 Ala. R. 437. It has been held, that after the forfeiture is declared, the company cannot longer hold the subscriber liable. Small v. Herkimer M. & H. Co., 2 Comst. 330. So if the company omit to exercise their power of forfeiture, as the successive defaults occur, until all the calls are made, it thereby loses its remedy by sale. Stokes v. The Lebanon & Sparta Turnpike Co., 6 Humph. 241. See also Harlaem Canal Co. v. Seixas, 2 Hall, 504; Delaware Canal Co. v. Sansom, 1 Binney, 70. The fact that the commissioners have by the charter an opinion to reject subscriptions for stock, does not make them less binding, unless they are so rejected. Connecticut & Passumpsic R. R. v. Bailey, 24 Verm. R. 465. An agreement made at the time of subscription inconsistent with its terms, and resting in oral evidence merely, cannot be received to defeat the subscription. 24 Verm. R. 465, s. c. In a late case in Kentucky this subject is very elaborately discussed by the counsel, and, as it seems to us, very wisely and very justly disposed of by the court. McMillan v. Maysville & Lexington Railway Co., 15 B. Monroe, 218. It was there held, that subscriptions to the stock of a railway company, like other contracts, should receive such construction as will carry into effect the probable intention of the parties. That the stock subscribed was to be the means by which the road should be constructed, and hence, that a subscription for stock, on condition that the road should be so "located and constructed as to make the town of Carlisle a point," imposed upon the subscribers the duty to pay, upon the location of the road in that place, and that the construction of the road was not a condition precedent to the right to recover for calls on the stock. See also New Hampshire Central R. v. Johnson, 10 Foster, 390; South Bay Meadow Dam Co. v. Gray, 30 Maine R. 547; Greenville & Columbia R. v. Cathcart, 4 Rich. 89; Danbury & Norwalk R. v. Wilson, 22 Conn. R. 435. An agreement to take and fill shares in a railway company, is an agreement to pay the assessments legally made. Bangor Bridge Co. v. McMahon, 10 Maine R. 478; Buckfield Br. R. v.