whether, upon general principles, such a subscription ought not to be binding, as a standing * offer accepted and acted upon by the company, which is sufficient consideration for the promise.5

3. And even where a mere stranger subscribes to a railway company, with others, in order to induce the company to build a station house and improve the roads to it, and to aid the company in such work, and the company perform the condition on their part, the subscription is upon sufficient consideration, and may be enforced against the subscribers.6

4. And a subscription to the stock of a railway company, conditioned to be void unless the company would accept the conveyance of a specific tract of land at a given price, is a mere offer to invest the land in shares, and until accepted by the company is of no validity."

land. It is there held, that whenever an offer is made, granting to a party a certain time within which he is to be entitled to decide whether he will accept it or not, the party making such offer is not at liberty to withdraw it before the lapse of the appointed time. There are certainly very strong reasons in support of this doctrine. Highly respectable authors regard it as inconsistent with the plain principles of equity, that a person who has been induced to rely on such an engagement should have no remedy in case of disappointment. But, whether wisely and equitably or not, the common law unyieldingly insists upon a consideration, or a paper with a seal attached.

“The authorities, both English and American, in support of this view of the subject, are very numerous and decisive; but it is not deemed to be needful or expedient to refer particularly to them, as they are collected and commented on in several reports as well as in the text-books. The case of Cooke v. Oxley, 3 T. R. 653, in which a different doctrine was held, has occasioned considerable discussion, and, in one or two instances, has probably influenced the decision. That case has been supposed to be inaccurately reported, and that in fact there was in that case no acceptance. But, however that may be, if the case has not been directly overruled, it has certainly in later cases been entirely disregarded, and cannot now be considered as of any authority.

'As, therefore, in the present case, the bill sets out a proposal in writing, and an acceptance and an offer to perform, on the part of the plaintiffs, within the time limited, and while the offer was in full force, all which is admitted by the demurrer, so that a valid contract in writing is shown to exist, the demurrer must be overruled."

5 See this subject more fully discussed in §§ 51, 55, ante. See, also, Johnson v. Wabash & M. V. Railw., 16 Ind. R. 389.

' Junction Railroad Company v. Reeve, 15 Ind. R. 236.

5. A subscription upon the performance of a condition becomes absolute upon such performance. The subscription takes effect from that time; the first instalment required to be paid at the time of subscription then becomes due and payable, and the subscriber liable to assessment for the remainder.8

6. There is a recent case, wherein propositions are declared which seem at variance with the general rule, that subscriptions dependent upon conditions are not effectual until such conditions are complied with. It was here held, that commissioners appointed to receive subscriptions to the stock of a projected railway company are so far limited in their authority that they have no power to attach conditions to subscriptions received by them, and where they do so the act is not binding upon the company, and that after the organization of the corporation, the directors have no power to assume the subscriptions upon the conditions named, i. e. that the company assume the payment of the subscriptions and release the subscribers.

7. But we apprehend that if this decision is maintainable upon recognized rules of law, it must be because the whole scheme of such a subscription evidences a covert fraud upon the contemplated corporation, and that the act of the directors is but one step in fulfilment of the scheme, as the case shows the action of the first board of directors was immediately repealed upon the coming in of a new board, and the court held it competent to show what took place at the time of passing the first resolutions with a view to establish the fraudulent purpose.

8 Ashtabula & New L. Railw. v. Smith, 15 Ohio N. S. 328.

9 Bedford Railw. Co. v. Bowser, 48 Penn. St. 29. See, also, Lowe v. E. & K. Railw., 1 Head, 659.

§ 58. 1. It is well settled, that a railway, or other joint-stock company, cannot receive subscriptions to their stock, payable at less sums, or in other commodities, than that which is demanded of other subscribers. Hence subscriptions, payable in storepay, or otherwise than in money, will be held a fraud upon the other subscribers, and payment enforced in money.1

2. So too in a case where subscriptions to stock of such a company are, by the agents of the company, agreed to be received at a discount, below the par value of the shares, it will be regarded as a fraud upon the other shareholders, and not binding upon the company.2

1

Henry v. Vermilion & Ashland Railw. Co., 17 Ohio R. 187. But in a recent case, Philadelphia & West Chester Railw. v. Hickman, 28 Penn. St. 318, it is said the company may compromise subscriptions for stock, which are doubtful, upon receiving part payment; or may receive payment in labor or materials, or in damages which the company is liable to pay, or in any other liability of the corporation. The certificates of stock in this case were issued to the contractors, in part payment of work done by them upon the road; to others, in part payment for a locomotive, for sleepers, for land-damages, and for cars. We do not understand how there can be any valid objection to receiving payment for subscriptions to the capital stock of a railway company in this mode, if the shares, so disposed of, are intended to be reckoned at their fair cash value, at the time of the contract being entered into. It is certain, contracts of this kind have been very generally recognized by the courts as valid, and no fraud upon the other subscribers.

2 Mann v. Cooke, 20 Conn. R. 178. In this case the defendant subscribed for forty shares in the capital stock of a railway company, upon condition that

3. In a recent case in Pennsylvania,3 it is said that subscriptions made to the capital stock of a corporation before its organall future calls should be paid, as required, or the shares should become the property of the company. He thereupon received certificates of ownership of the forty shares, the special terms of his subscription not being known to the other subscribers.

Sometime afterwards, the company being largely indebted, and insolvent, and the greater part of the instalments on its stock being unpaid, the president made an arrangement with defendant that he should immediately pay the instalments on twenty shares of his stock, in full, and he was thereupon to be discharged from all liability on the other twenty shares, Defendant complied with these terms, and the money paid went for the benefit of the company.

The plaintiff was appointed receiver of the effects of the company, and brought this bill in equity to obtain payment of the balance due upon the other twenty shares, and it was held:

1. That the subscription for the stock was in legal effect the same as an ordinary subscription for stock, without condition.

2. That the arrangement made with the president of the company was void, as a fraud upon stockholders and creditors.

3. That the company, being created for public purposes, could not receive subscriptions under a private arrangement at less than the par value of the stock, as this would deprive the company of so much of its available means, and thus operate as a fraud upon all parties interested.

But where one paid for stock in a railway company, under a secret agreement with the commissioner of contracts that he might receive land of the company at a future day, and pay in the stock certificate, and the company declined to ratify the contract, it was held the subscriber was released from his portion of the contract, and might recover the money he paid for the stock of the company. Weeden v. Lake Erie & Mad River Railway, 14 Ohio, 563. But in the case of the Cincinnati, Indiana, & Chicago Railw. v. Clarkson, 7 Ind. R. 595, it seems to be considered, that the company are bound by a contract to compensate a solicitor of subscriptions to the capital stock, payable in land, but no question is made in regard to the validity of the subscriptions. The solicitors were ordered by the directors to accept such subscriptions, and were to have two per cent on all which were accepted by the company, and the contract was held binding upon the company. An agreement by a railway company, that a subscriber for stock may pay the full amount, or any part of his subscription, and receive “interest thereon until the road goes into operation," does not oblige the company to pay interest before the road goes into operation. Waterman v. Troy & Greenfield Railway, 8 Gray, 433. See, also, Buffalo & N. Y. City Railw. v. Dudley, 4 Kernan, 336. Ante, § 54, pl. 4.

An agreement to pay interest upon stock "as soon as paid," means fully paid. Miller v. Pittsburg & Connellsville Railw., 40 Penn. St. 237.

3

Pittsburg & Connellsville Railw. y. Stewart, 41 Penn. St. 54. The question of the presumptive effect of the conduct of a subscriber after the organization of

ization, must always be payable in money only. But after the organization, the company may stipulate with the subscriber for payment in any other mode, and can only enforce the contract according to its terms; and the act of the president of the company in accepting conditional subscriptions is binding upon the company.

3

4. It is also held in the same case, that the fact the subscriber makes part payment in money before call, will not estop him from setting up the special contract in defence of an after call.

5. But in a somewhat recent case in Alabama, it was held that a subscription to the capital stock of a railway company, in express terms made payable in work, in grading the line, to be taken at the public or private letting and performed to the acceptance of the company's engineer, could not be enforced against the subscriber until he had had reasonable opportunity to perform the contract in the manner specified by its terms. But if, after that, the defendant failed on his part to perform it, he was liable to pay the amount in money. It is here said that the subscriber must take notice of the published lettings of the work.

6. The cases may seem conflicting upon this point; but the true principle seems to be, that the corporation can only enforce the contract of subscription according to its terms, and of this the subscriber cannot complain, or resist successfully the enforcement of his subscription. But so far as the creditors of the company are interested in the matter, they may hold the directors responsible for having received the amount of the capital stock in money. And as to the duty of the directors, they cannot, in strictness and fairness, receive subscriptions payable in anything but money; nor can they launch the company until the whole capital stock is subscribed in money. And any fraud or evasion in this particular will render the directors responsible for the debts of the company, as in equity and fair dealing it should.

the company, in attending and taking part in the meetings of the company, upon the proper construction of any special contract with the company, is here considerably discussed.

* Eppes v. M. G. & T. Railw. 35 Alabama R., 33; H. & P. Plank R. Co. v. Bryan, 6 Jones Law, 82.