were not bound by the rules of the association by estoppel; and (2),
that this corporation is subject to R. S., c. 46, Ā§ 33. Driscoll v. Lew-
iston E. C. So., 59ā474.
6. If one signs a paper promising to take and secure a certain
number of shares in a corporation, before the charter has been
accepted by the corporators and the company organized, this does
not impose upon him any liability, or make him a stock holder in the
corporation when organized, but is simply a proposal, which the com-
pany may or may not accept. Starrett v. Rockland F. & M. Ins.
7. If the name of such signer is entered by the secretary of the
company upon the list of the stock holders who have taken and
secured their stock, and upon the stock ledger, and is also returned to
the secretary of State as a stock holder, the company is bound by this
action, and thereby accepts the proposal, unless it can be shown that
this was done by mistake. It may be shown that the name of the
signer was inserted in these lists by a mistake of fact, and that there-
fore he never became a stock holder. lb.
(b) Subscriptions for stock and assessments thereon.
8. Capitai Stock to be Fixed. If the charter of a corporation
does not definitely fix the number of shares which shall compose its
capital stock, this must be done by the directors, or stock holders,
before there can be any valid assessment laid upon the shares of sub-
scribers to its stock. Somerset JR. H. Co. v. Clarke, 61 ā 379. Pike
V. Shore Line, 68 ā 445.
9. Where it is evident either that there has been no prescribed
number of shares established as aforesaid, or else that the number is
six thousand shares, and it is admitted or proved that so many shares
have never been subscribed for or taken, any assessment upon the
shares that have been subscribed for will be void. Somerset B. Jt.
Co. V. Clarke, 61ā379.
10. No valid assessment can be laid upon the shares of subscribers
to stock in a corporation until the total amount of the capital stock
shall have been subscribed for. lb.
11. It seems well settled that it is not necessary to fix the capital
stock to enable a corporation to maintain an action on the subscrip-
tion agi-eement. Bucksport & Bangor B. B. Co^ v. Buck, 65 ā 536.
12. Conditional Subscription. The charter of a railroad
company, provided that the capital stock should consist of not less
than one thousand, nor more than twelve thousand shares, of one
hundred dollars each. The defendant signed a subscription, binding
himself to pay the sum written against his name, "as called for by
the treasurer, hereafter to be elected, same being part of the capital
stock, for the purpose of constructing a railroad from Bucksport to
Bangor." "The subscription not to be binding until the sum of one
hundred thousand dollars shall have been subscribed by good respon-
sible parties, and the subscriber not to be bound for any further sum
than that written by himself at the time of the subscription. The
capital stock to be three hundred thousand dollars, but as soon as one
hundred thousand should be subscribed, the stockholders to choose a
board of directors." At a meeting of the board of directors, the
defendant's subscription was accepted upon the conditions therein
stated. After more than one thousand shares had been subscribed,
the directors voted to close the subscription book for shares at the
number then subscribed for. Held, (1) that the vote closing the
subscription books might be regarded as fixing the number of shares
for the time being ; (2) that by implication, the defendant's sub-
scription became binding when one thousand shares were subscribed
for ; (2) that the provision that the capital stock should be three hun-
dred thousand dollars, was not a condition precedent ; (4) that the
liability of the defendant did not depend upon the number of
shares or upon any specific and fixed capital, but upon the terms of
his agreement. lb.
13. The defendant, with others, signed a subscription as follows :
We, the undersigned, agree and bind ourselves to take the amount of
shares set against our respective names, in the stock of the Belfast
and Moosehead Lake Railroad Company, agreeable to the foregoing
conditions : ELeld, 1st, that the simple agreement to take imposed no
personal obligation to pay for the shares ; 2nd, that the conditions
which contained no words of promise, did not create any ; 3d, nor a
provision in the charter purporting to render the subscriber liable for
the balance due, after a sale of his shares; 4th, nor does c. 206,
Special Laws of 1869, affect the contract made before its passage.
Belfast & Moosehead Lake B. B. Co. v. Moore, 60 ā 561.
14. Books for subscription to stock in a corporation contained the
terms upon which the subscribers might become owners of shares.
Those in possession of the books were authorized to sell shares only
upon the terms therein recorded. A town, by its selectmen, sub-
scribed for shares, but in so doing, annexed conditions other than
those recorded therein, one of which was that the road should be lo-
cated through the town. Held, that before there could be a com-
pleted contract for the shares, the company must, in some legal man-
ner assent to the additional propositions of the town, and that the
subsequ'cnt location of the road upon a route, not through the town,
was a virtual refusal of such assent. Belfast & M. L. B. B. Co. v.
15. A person subscribed for stock, upon condition that a certain
amount be taken by responsible parties, by a specified day. At that
date, the required amount had been taken, but also upon a condition
which was not performed, but which was afterwards waived by the
subscribers. Held, that, as the condition upon which the first sub-
scriber agreed to take the stock was not fulfilled within the time spec-
ified, he was released from his obligation, and that his liabilities could
not be affected by a subsequent waiver, by the other subscribers, of
the condition upon which they agreed to take the stock. Ticonic
Co. V. Lang, 63ā480.
16. An agreement to take a certain number of shares imports no
promise to pay for them directly. Belfast cfc M. L. JR. Co. v. Cot-
17. And when such agreement is to the stock of a railroad company,
on condition that "no assessment be made upon the shares untU the
full amount be secured for its completion to Newport," the subscriber
only becomes liable upon his contract taken in connection with the
charter, and if assessments are made before a sum is secured by valid
subscriptions to an amount, at least equal to the cost of the road as
estimated by the company's engineer, they can not be enforced.
18. Decisiost of Dieectoes as to Sufficiency of Subsceip-
TiONS. Where the by-laws of a railroad company provided that no
assessments should be made on the stock until the full amount of the
estimated cost of the road should be subscribed by responsible parties,
and the requisite amount was subscribed, and the directors, in good
faith, determined that it was subscribed by responsible parties ; it was
held, that their decision was final, and that the assessment made in
pursuance of their decision could not be invalidated by showing that
in fact, some of the subscribers were not responsible. Belfast <&
Moosehead Lake R. It Co. v. Brooks, 60 ā 568.
19. When a subscription for railroad stock is upon condition that
no assessment shall be made upon the stock "until the full amount be
secured for its completion to Newport ; " the directors are not the
conclusive judges whether or not asufiicient sum has been subscribed.
Especially if their decision that the sum is suflicient means that the
estimate of the cost of their engineer was too high or that invalid
subscriptions were to be regarded as valid. Belfast <& M. L. B. B.
Co., V. Cottrell, 66ā185.
20. A valid subscription to the capital stock of an incorporated
company is not rendered invalid by a change of its corporate name in
accordance with a legislative act. Bucksport d; Bangor B. B. Co.
V. Buck, 68ā81.
21. Assessments. When the charter of a corporation provides
that " the capital stock of said company shall consist of not less than
one thousand shares of one hundred dollars each, par value ; but the
number of such shares may be from time to time increased at the
discretion of the stock hplders, to an amount not exceeding twenty
thousand shares," the corporation has no power to assess the sub
sci-ibers to its stock till it has fixed its capital stock, and it has been
fully taken. Bike v. /Shore Bine, 68 ā 445.
22. When the charter authorizes the directors to make equal assess-
ments from time to time on all the shares in the corporation, an
assessment, not made on all the shares of the stock, but on the stock
held by the towns and cities only, and omitting the shares held by
persons, is invalid. Jb.
23. Where a number of persons had signed an agreement to asso-
ciate themselves together, agreeably to the provisions of R. S., c. 48,
for the purpose of erecting a shoe-factory building, and had voted an
assessment upon themselves before applying to the attorney-general
for his certificate under Ā§ 19 of that chapter, and another after such
certificate had been refused them ; and two more assessments were
laid by the ofiicers chosen by them, in accordance with the by-laws
they had adopted ; and subsequently a portion of those so subscribing
had, without the concurrence of the defendant, procured from the
legislature an act of incorporation to effectuate the purpose originally
contemplated ; it was held, that the corporation created by this act
(Private Laws of 1872, c. 15) could not enforce payment of any of
the assessments previously laid against the defendant in the manner
aforesaid. Michmond Factory Association y. Clar/ce, 61 ā 351.
See Condition, 1, p. 95.
(c) Individual liability for the debts of the corporation.
24. By R. S., 1857, c. 48, Ā§ 9, m/Vnufactueing corporations are
prohibited from contracting debts exceeding, at any one time, the
amount of their capital invested within the State, in real estate and
fixtures thereon, including machinery ; and from becoming indebted
to an amount exceeding one-half their capital paid in and undivided,
and of their other property and assets. When either of these limita-
tions is violated the stock holders become individually liable for the
debts of the corporation to the amount of their stock. This liability
is to be made available to the creditors of the corporation in the man-
ner prescribed in c. 46, Ā§ 24. Lovegrove v. Sunt, 58 ā 9.
25. The demand by the judgment creditor of a corporation upon, a
stock holder, mentioned in R. S., c. 46, 1871, Ā§ 25, must be made with-
in six months after the date of the rendition of the judgment against
the corporation and at any time after the officer holding the execution
has made upon it a return that it is unsatisfied in whole or part for
want of attachable property of the corporation. JLovegrove v. JSrown,
26. The suit against the stock holder must be commenced after such
demand and within six months from date of judgment. lb.
27. The phrase, "return of an execution," in R. S., 1871, c. 46, Ā§
25, which prescribes certain preliminary steps to be taken by the
judgment creditor of a corporation prior to the commencement of a
suit against a stock holder, means a return upon the execution. It
may be made any time during the life of the execution and does not
require the return of the execution to court on the day of such return.
28. Restriction. The act of 1871, restricting the liability of stock
holders in all corporations, except in banks, to the amount not paid in
upon their stock, or withdrawn, applies to corporations organized under
the general law as well as those created by special act. Poor v. Wil-
29. Bank. Holders of stock in a bank when its charter expires, are
liable, under R. S. of 1857, c. 47, Ā§ 46, to contribute for the redemption
and payment of all bills issued by the bank, and remaining unpaid, in
the proportion that the number of shares held by them respectively
bears to the aggregate number of shares held by all the stockholders.
Dane y. Young, 61 ā 160.
III. TRANSFER OF vSHARES.
30. A writing, aciknowledging the receipt of the promissory note of
another, "for five shares of stock in the M. T. Co. and certificates are
to issue" to the maker of the note, when ready for issue, is not a con-
tract for the future sale of shares. By a fair construction the shares
themselves were the consideration of the note. Hope Iron Works,
V. Holden, 58ā146.
31. A provision in the by-laws of a bank that its shares shall he
transferable by indorsement in writing by the holder in the presence
of the cashier, or two other witnesses, requires that the cashier or
the witnesses shall in writing attest the signature of the holder in order
to render the transfer valid. Dane v. Young, 61 ā 160.
32. It is not competent for a corporation to ratify and make valid
a transfer of stock made in violation of its by-laws. lb.
See Eaton v. Telegraph Co., 68 ā 63.
33. The funds of a corporation, whenever they accrued, are to be
distributed among such as are its stockholders when the dividend is
declared. Goodwin v. Hardy, 57 ā 143. Sagar v. Union Nat.
34. When shares in a corjjoration are attached, all dividends
declared on such shares during the continuance of the attachment are
subject to the lien. Hagar v. Union Nat. Dank, 63 ā 509.
35. A bank has the right to hold a cash dividend as pledged for the
indebtment of the share holder to the bank. lb.
36. A stock holder in a bank can not maintain an action against
the corporation for a dividend declared, without previous demand at
the place where it was payable. lb.
37. And if a demand is made while the stock is under attachment,
a new demand is necessary after the attachment is dissolved. lb.
38. A DiEECTOE of a railroad holds an ofiice of trust and can not
derive any personal benefits from the contracts of the company.
European <& N. A. JR. B. Co. v. Poor, ^ā'111.
39. The Teeasueee of a corporation can not be charged as its
trustee for funds held by him officially ; nor for funds pledged to him
to secure an indebtedness of the company to him. Bowker v. HiU,
40. I^TDOESEMENT OF NoTES. The authority of an agent of a cor-
poration to transfer the property in a note is more readUy inferred
than that to bind the corporation by the contract of indorsement.
Chase v. HatJiorne, 61ā505.
41. When, by the by-laws of an insurance company, the president
has "power to settle and adjust all losses . . . and other claims of
the company," and the "indorsements or assignments of the notes or
securities of the company are to be made by" him, the indorsement
and transfer of a note by the president, without the assent of the
directors, for the purpose of paying an indebtedness of the company
to the indorsee, and to which the company does not appear to object, is
valid, and passes the title to the note to the indorsee, notwithstand-
ing a clause in the same article which authorizes the president to
indorse notes when authorized by the directors. Union Ins. Go. v.
42. And although the by-laws do not in terms authorize the presi-
dent to indorse notes, and do provide that no note shall be given
without the previous vote of the committee on finance, still, the
president may sell a note in payment of a debt of the company, and
the indorsee will obtain a good title. lb.
43. Estoppel. That a corporation be estopped by the acts of its
officers, it must appear that the party asserting the estoppel has
thereby been induced to change his position. iStarett v. Rocldand
Fire db Marine Ins. Co., 65 ā 374.
44. When by the charter, the corporate powers of a corporation
shall be exercised by a board of trustees, the board of trustees can
only exercise its corporate powers. It can not surrender them, wind
up the affairs of the corporation, and divide its assets. That can be
done by a vote of the members of the corporation only. JBuck v.
Merchants' Ins. Go., 68ā532.
yi. CORPORATE POWERS, RIGHTS AND LIABILITIES.
45. Bt-Laws. Any rule or by-law of a corporation, for the purpose
of buying and selling groceries, etc., by which any corporator could
withdraw his funds on demand or notice would be in contravention
of R. S., 1871, c. 46, Ā§ 33, and illegal. Driscoll v. Lewiston Equit-
able Society, 59 ā 474.
46. Where the charter authorized the taking of land "not to exceed
six rods in width," and the time for the completion was extended by
the legislature, and "all rights, privileges, and grants were continued,
the charter was renewed in its entirety, the company retained the
right to take land six rods in width, although the general statute
allowed but four. Eaton v. European & N. A. R. R. Go., 59 ā 520.
47. The GEAifD Teunk Railway holds the property leased of
the Atlantic & St. Lawrence R. R. Co., subject, not only to the laws
in force at the time of the lease, but also such as the legislature might
thereafter enact. Dryden v. Grand Trunk Railway, 60 ā 512.
48. Lien upoisr Shares. The rule has long prevailed in many
jurisdictions that a corporation has no implied lien on the shares of its
stock holder for a debt due from him. Hagar v. Union National
49. Dividends. But it has upon cash dividends which have been
50. Liability eoe Penalty. The action of debt, provided by R.
S., 1871, c. 42, Ā§ 3, for the owner of logs to recover double their value
from the person guilty of the offence of taking the logs without the
consent of the owner, and with intent to claim the same, can not be
maintained against a corporation. Androscoggin W. P. Go. v.
Bethel S. M. Go., 64ā441.
51. Union of Corporations. When a new corporation is formed
out of two or more previously existing corporations, aud by the act
creating it is to have the powers, privileges and immunities possessed
by each of the corporations, whose union constitutes such new corpor-
ation, the new corporation will have only the privileges, powers and
immunities common to them all, and not those special privileges and
immunities which some had and some did not have. State v. Maine
Central R. B. Co., 66ā 188.
52. Immunities. "When two or more corporations, with a special
immunity from general taxation, the amount of such taxation being
dependent upon certain precedent acts to be done by such corporation
thus to be exempted, are incorporated into a new corporation, which
is not required and is unable to perform the acts which must precede
such special taxation, the new corporation thus created, can not claim
the special immunity belonging to the corporations of which it is
53. Incidental Powers. To allow a corporation to exercise
powers prohibited by its charter, even to facilitate the use of its
granted powers would be to render the limitations a nullity ; it can
not be permitted to do indirectly what its charter expressly prohibits
it from doing. Plummer v. Penobscot L. A., 67 ā 363.
54. When the charter of a boom corporation provides that it shall
so construct its booms as to admit the safe passage of rafts and boats
and preserve the navigation of the river, it has no right to swing a
boom across the river and obstruct its navigation, though done ever
so carefully. Ih.
55. A corporation has only such powers as are specifically granted,
or such as are necessary for carrying the former into effect ; and these
powers can only be exercised for the purposes contemplated by its
charter. Franklin Company v. Lewiston Savings JBank, 68 ā 43.
56. An incidental power is one that is directly and immediately
appropriate to the execution of the specific power granted, and not
one that has a slight or remote relation to it. lb.
57. It would seem, therefore, upon principle as well as authority,
that it is not within the authority of the trustees of a savings bank to
invest its funds in the stock of manufacturing corporations, unless
expressly authorized so to do by its charter, or the public laws of the
State. lb. ā¢
58. Change of Name. It does not require the assent of the sub-
scribers to the capital stock of the company to authorize the legislature
to change its name ; the statute confers that right upon the legislature
without such assent. JBucksport c& Bangor B. B. Go. v. Buck,
See Railroad, 82.
59. By the termination of the existence of the Piscataquis Ins. Co.,
all attachments against the company were dissolved. Bowker v.
60. The charter of a bank expires by operation of law when aa
injunction restraining it from doing business is made perpetual. Bana
V. Young, 61ā160.
61. A coi-poration is not dissolved by merely neglecting to exercise
its corporate powers. Prop, of Baptist Meeting House v. 'Wehh,
62. Laws of 1869, c. 17, amending defendant's charter, provides
that consolidated scrip may be issued in exchange for the scrip
authorized and issued under the original charter; and made subject to
the provisions and lien of the original charter ; and it further isrovides
that "when the business of said corporation shall be closed up an<l all
its other liabilities discharged, as the final act of its existence, its
remaining assets shall be divided among the holders of said consol-
idated scrip in proportion to the amount held by each." This con-
solidated scrip was irredeemable during the life of the corporation,
but entitled the holder to semi-annual interest and to annual dividends,
the same as are declared to policy-holders ; and the holders of it
were members of the corporation. The charter of the company pro-
vides that all the corporate powers shall be exercised by the trustees.
The members of the company voted "to recommend to the tru.stees
that 1117,400 be divided among the holders of consolidated scrip,"
and that the "president is instructed to pay the proportion upon the
presentation of the certificates." The president paid as so instruct-
ed on all the certificates (including his own and those of seventy-six
others), except only on one scrip of $200 held by the plaintiff, which
he refused to pay. Held., that the evidence was sufficient to authorize
the inference that the corporation was winding up its affairs and
dividing its assets, as provided in the act of 1869 ; that the dividend
was pi'operly made, and that the plaintiff was entitled to maintain an
action for his share thereof. Buck v. Merchants'' Ins. Co., 68 ā 532.
See Quo "Wakeanto.
63. When the rights of pew-holders in a meeting-house are invaded,
by pel-mission of the corporation to which they belong, their remedy
must be sought in equity. Craig v. Franklin County^ 58 ā 479.
64. In assumpsit by a toll bridge corporation against a stock holder
to recover assessments on his stock, it must be alleged that the assess-
ment sought to be recovered were due and payable when the action
was commenced. Bethel & Hanover Toll Bridge Co. v. Bean, 58 ā
65. A provision in a charter that where damages are sustained by
the exercise of the powers granted to the corporation, they shall be
ascertained in a manner prescribed in the charter, is not applicable
when the corporation becomes liable for damages caused by the
usurpation of powers prohibited by the charter. Plummer v. Penob-
scot L. A., 67ā368.
66. The trustees appointed under Special Laws of 1867, c. 384,
accepting the surrender of the charter of the Piscataquis Fire and
Marine Insurance Company, cannot maintain a bill in equity in their
name and that of the corporation in behalf of the creditors or stock-
holders of the corporation as such. Pis. F. & M. Ins. Co. v. HilL
67. In case of the misconduct of a corporation or its officers, cred-
itors or stockholders must pursue the remedy in their own names.
68. In a suit by a corporation, a plea of the general issue admits
the corporate existence of the plaintiff, and its power to sue. Ticonic
Bank v. Bagley, 68ā249.
See Waivbe, 11, 16.
II. EIGHTS AND LIABILITIES OF PARTIES.
(a) Who is a pabty bntitled to costs.
(b) Who is liable fob costs.