Case ID: mass_8/html/0121-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

* The New Bedford and Bridgewater Turnpike Corporation versus John Q. Adams, Esq.
    Where one engages to take a certain number of shares in a turnpike, no action lies against him for the corporation to recover the assessments laid for the purpose of making the turnpike.
    This was an action of the case in assumpsit brought against the defendant for not paying the amount of certain assessments for the expense of making the said turnpike road.
    The declaration contained six counts. The third was for 1500 dollars had and received by the defendant to the plaintiffs’ use. — The sixth count was, “ for that the said J. (j. A., at Plymouth, on the 30th day of March, 1804, by a certain writing by him subscribed, commonly called a subscription paper, in consideration that the said corporation had permitted him to become associated with them, and interested in the- funds to be raised for building their said turnpike road, and entitled to one fiftieth part of all the income, profit and toll, that should arise and accrue to said corporation from the road, as well as from the corporate powers and franchise to them granted by said act of incorporation, promised said corporation to pay them ten shares or parts of five hundred of the whole expense they should incur in building said turnpike, on demand ; which said ten shares, the plaintiffs aver, amount to one fiftieth part of the five hundred shares; and the plaintiffs further aver that the whole expense of building said road, and the bridges which make a part of said road, amounts to fifty thousand dollars, whereof the said ten shares or fiftieth part of the said J. Q. A. amounts to one thousand dollars, of which he has had notice, viz., on, &c. Yet though requested,” &c.
    The action was tried upon the general issue, pleaded to all the counts, before Sedgwick, J., at the sittings after the present term ; and a verdict was found for the plaintiffs upon the two counts above recited, and the damages assessed at 1311 dollars ; and upon the other counts for the defendant.
    * The verdict was taken by consent, subject to the-opinion of the Court upon the report of the judge who sat in the trial, it being agreed that the verdict should be amended, or a general verdict entered for the defendant, as the opinion of the Court should be.
    The judge reports that the general question at the trial depended on the construction of the paper writing above referred to, which was subscribed by the defendant and others, and was of the following tenor, viz.: —
    “We the subscribers, desirous to promote the building of a turnpike and bridges from New Bedford to Weymouth, comprehended in a petition signed by W. Roach, Jun., and others, granted by the honorable legislature in their present session, have divided the expense of building said turnpike and bridges from Thompson’s pond in Middleborough, to communicate with the Braintree and Weymouth turnpike, in the town of Weymouth, into 500 shares, and engage to take the number of shares affixed to our names. January 30, 1804.”
    The material allegations contained in the sixth count were proved, and it was also proved that the defendant subscribed the said paper after the passing of the act of incorporation by the legislature, and before any meeting of the persons incorporated and their associates.
    The principal question arising on the above-recited subscription paper was, whether the defendant was rendered by it liable to an action for the assessments made on the shares subscribed by him.
    After the verdict the cause was continued nisi for the consideration of the Court, and, being called up for argument at the following March term in Suffolk,
    
    
      
      Whitman, for the defendant,
    contended, that the case of The Andover and Medford Turnpike vs. Gould 
       was in point to show that no implied promise could be raised from this paper to pay the assessments, and that the only remedy, for the corporation, provided by law, was the sale of the shares. — The subscription paper was not intended to give *a remedy by action, but simply to make each subscriber a member of the corporation, subject to the legal duties belonging to him in that character. — Each corporator agreed to take a certain specified number of shares, and on those shares, not on the individual, were the expenses assessed; which shows that the individuals were to be liable merely as members of the corporation, in proportion to their interest in the stock or funds. — The term expense in the paper must be construed to mean such interest, otherwise the subscriber was merely to pay his money, without prospect of any profit or remuneration. — Where a contract is so doubtful in its terms that no certain and satisfactory interpretation can be given, it can never be enforced by action at law. Certainly in this case there is no promise to pay money; nothing more than an engagement, as a member of the corporation, and a holder of ten shares, to be liable to all the duties and claims belonging to that situation.
    
      Mitchel for the plaintiffs.
    A corporator may legally contract with the corporation of which he is a member ; and if, in an association of this kind, he will expressly promise to pay his assessments, an action at law lies for the corporation to recover them, notwithstanding the cumulative remedy by sale of the shares. This latter remedy is so well known to be an inadequate one, that the Court will incline to support one more effectual, where it can be done; and especially in a case situated like the present, in which two juries have charged the defendant, after the most thorough in yes tigation of the facts and principles of the cause.
    In examining the paper subscribed by the defendant in this case, and attending to the consideration expressed in it, it is believed that the Court will find both the form and substance of a promise to pay a certain proportion of the expenses of making the turnpike. The subscribers, anxious that the enterprise should succeed, divide the expense into five hundred shares, and engage to take the number * annexed to their names respectively. The word shares must refer to the expenses, and not merely to the fund or stock, or the whole paper, considered as an agreement or association, is an absurdity. Nor is it an objection to this construction, that the amount of the expense was uncertain at the time of subscribing; for the amount of the stock or funds was equally uncertain. The whole transaction furnishes a sufficient consideration for a promise. A few persons had procured an incorporation for themselves and such others as should associate with them for the object in view. The defendant, “ desirous to promote the building of the turnpike,” with a view to induce the corporation to proceed in the undertaking, subscribes for ten shares. The corporation,, relying on the subscription of the defendant and others, have completed the turnpike. Here, then, are united the form and the substance, the language and the consideration, of a good and valid promise; upon which the verdict was rendered, and upon which the plaintiffs confidently hope for judgment.
    
      
       6 Mass. Rep. 40.
    
   By the Court.

The question, in this case, is, whether the defendant is liable to an action of assumpsit for neglecting to pay the sums assessed on the shares in the stock of the corporation, for which he became a subscriber. The answer to this inquiry must depend upon a construction of the writing which the defendant subscribed. Several cases of this kind have already been decided in this Court; and each of them on the force and effect of the engagement entered into. The general principle upon which they all rest is, that where the party makes an express promise to pay the assessments, he is answerable to the corporation upon such promise, and may be compelled to the performance of it by action at law. Where, on the other hand, one, by subscribing the act of association, simply engages to become a proprietor of a certain number of shares, without promising to pay assessments, there the only remedy which the corporation has, is by sale of the shares to raise the sum assessed on them.

*In the subscription paper in this case, the subscribers divide the expense into five hundred shares, and each engages to take the number of shares affixed to his name. In our opinion, this cannot amount to any thing more than an agreement into how many shares the stock shall be divided, and to whom those shares shall belong. There is no express promise to pay, nor is any language used, from which the law can raise an implied promise. It may be observed, also, that this whole transaction passed before there had been any meeting of the corporation to authorize the receiving of subscriptions ; and on this ground, also, the paper cannot furnish evidence of a contract.

On the whole, it is our opinion that the plaintiffs have not maintained their action. The verdict must therefore be set aside, and, pursuant to the agreement of the parties, a general verdict entered for the defendant. 
      
      
         [Salem Mill Dam Corporation vs. Ropes, 9 Pick, 187. — Taunton and South Boston Turnpike vs. Whitney, 30 Mass. 327, and note to 3d edition. — Ed.]