delaware/1861533.json

"{\"id\": \"1861533\", \"name\": \"The Delaware Railroad Company v. Beniah Tharp\", \"name_abbreviation\": \"Delaware Railroad v. Tharp\", \"decision_date\": \"1855\", \"docket_number\": \"\", \"first_page\": \"149\", \"last_page\": \"175\", \"citations\": \"1 Houst. 149\", \"volume\": \"6\", \"reporter\": \"Delaware Reports\", \"court\": \"Delaware Superior Court\", \"jurisdiction\": \"Delaware\", \"last_updated\": \"2021-08-10T22:07:22.298157+00:00\", \"provenance\": \"CAP\", \"judges\": \"\", \"parties\": \"The Delaware Railroad Company v. Beniah Tharp.\", \"head_matter\": \"The Delaware Railroad Company v. Beniah Tharp.\\nThe Delaware Railroad Company was chartered in 1836, with authority to construct a railroad throughout the length of the State, hut no company was organized under the charter at that time. In 1849 the Legislature revived and amended the charter, with authority to the company to construct a railroad on a reduced scale, to extend from Dona River, in Kent, to the Nanticoke River, in Sussex County, under which amendment the company was duly organized, and under the charter as thus amended the defendant subscribed for forty shares in the qapital stock of the company, on which a call of three dollars per share was made by the directors of the company, payable on the first day of December, 1852. In 1853 the company applied to the Legislature for the purpose, and the Legislature amended its charter so as to authorize the abandonment Of the terminus of the railroad at Dona River, and that portion o^ it projected from Dover to that point, and to extend and unite it with the New Castle and Erenchtown Railroad in New Castle County, on which ground the defendant refused to pay for the call or instalment demanded of him. Held that this change in the direction, location and construction of the road, authorized by the Legislature, and adopted by the company Subsequent to the subscription to its stock by the defendant, did not absolve him from his subscription for the stock, but that - he was .still bound to pay for it.\\nThe grsjit of an act of incorporation by the State is professedly for the public good generally, and there is an inherent right in the Legislature to amend, alter and change it with the assent of the corporation, and those who become corporators in it do so with that contingency, and their engagements are therefore subject to it.\\nIf a subscriber to stock enters generally into a corporation, without specific stipulations, he is bound and concluded by the action of a majority of the corporation, and if the Legislature amends and changes the charter with the assent of the company, he will not be thereby discharged from his liability for his subscription for stock made previous to the amendment and change of the charter. But if the subscription for stock is of such a character, and the change in the object of the charter is of such a nature as to increase the amount which he was .originally bound to pay by virtue of his subscription to the stock, it will absolve him from his contract and liability to pay for it.\\nThere is no substantial distinction between the terms subscriber ahd stockholder in the Delaware Bailrpad charter, and a subscriber may be sued for arrears of subscription for stock due from him, without proof that certificates of stock have been issued or tendered to him by the company. '\\nTried before Milligan and Wootten, Justices. Harrington, Ch. J.,-did not sit in the case, as he was at the time the president and a stockholder of the company.\\nThis was an action of assumpsit, brought by the Delaware Railroad Company against Beniah Tharp, to recover an instalment of three dollars per share on forty shares subscribed for by him in the capital stock of the company, with interest thereon at two per cent, per month after the expiration of thirty days from the time the instalment be- . came payable. Plea, non assumpsit, with leave of counsel on the other side to give the special matters of defence in evidence under the general issue.\\nThe original charter of the Delaware Railroad Company was enacted by the Legislature in 1836, and authorized the location and construction of a railroad from any point on or near the Wilmington and Susquehanna Railroad, or the Hew Castle and Frenchtown Railroad, to the southern line of the State, in a direction towards Cape Charles, or the southern part of the peninsula, with lateral projections to any other points or places within the limits of the State. In 1849 the charter was re-enacted, and amended so as to authorize the location and construction of a rail road from Dona River, in Kent County, to the Nanticoke River at or near Seaford, in Sussex County, under which the company was organized, and the defendant subscribed for the forty shares of capital stock before mentioned, and was elected one of the board of directors of the company. In August, 1852, the directors, the defendant then being a member of the board, made their first call upon the subscribers to the stock of the company, under which the instalment in question became payable on the first day of December following. At the first annual meeting of the stockholders, in January succeeding, the right of the defendant to vote in the meeting was objected to because of the nonpayment of the instalment due from him, and his vote was rejected, after which he attended no more, meetings of the company. By an act of the Legislature, passed in 1853, the charter of the company was again amended with the consent of the stockholders, to authorize the company to extend and unite their road with the New Castle and Frenchtown Railroad, on such terms and conditions as should be agreed upon between the two companies; and at the same session an act was also passed to authorize the New Castle and Frenchtown Railroad Company and the Philadelphia, Wilmington and Baltimore Railroad Company, or either of them, to guarantee the bonds of the Delaware Railroad Company to such an amount and on such conditions as should be agreed upon, to hold stock in the latter company, and to contract and agree for the construction, equipment, maintenance and operation of the Delaware Railroad, on such terms and conditions as should be agreed upon by them, provided such terms and conditions should be approved at a meeting of the stockholders of the latter company, to be called for that purpose, by a majority of the stock of said company there represented. By virtue of these two acts of the Legislature, the Delaware Railroad Company, with the consent of a majority of its stockholders, abandoned Dona River as a terminus of their railroad, and renounced the construction of it between Dover and that point, as designed and contemplated at the time when the defendant subscribed for the forty shares in the capital stock of the company, and had agreed with the Philadelphia, \\\"Wilmington and Baltimore \\u00a1Railroad Company for the extension and construction of it to unite with the \\u00a1New Castle and Frenchtown Railroad.\\nOn the part of the defendant it was admitted by his counsel that he had subscribed for forty shares of stock in the Delaware Railroad Company prior to the month of May, 1852, and, after proving the organization of the company by the subscription of the aggregate amount of stock required by the charter, and the election of the necessary officers and the publication of the call, including the instalment in question demanded of the defendant, it was admitted by the counsel for the plaintiff that all the acts of the Legislature relative to the company, passed since 1849, had been accepted by it, and .now constituted portions of its charter; and that, since the defendant had subscribed for his stock in the company, the company had ceased working on that part of the road which extended from Dover to Dona River, and were then constructing ,a railroad from the \\u00a1New Oastle and Frenchtown Railroad to connect with the Delaware Railroad at Dover, which would be much longer, and would consequently cost much more than the road projected from the latter place to Dona River. That the company had leased the whole road to the Philadelphia, Wilmington and Baltimore Railroad Company, under an agreement of the two companies, with the consent of a majority of the stockholders of the former company, and with the aid of the latter company, it was then engaged in constructing the Delaware Railroad from the New Castle and Frenchtown Railroad, instead of Dona River, to the Nanticoke River, at or near Seaford. The counsel for the plaintiff then rested their case.\\nC. S. Layton, for defendant,\\nmoved for a nonsuit, on the ground that sufficient evidence had not been adduced to prove that the defendant was a stockholder in the company, because there was no proof that any certificate of stock was ever delivered or tendered to him for a share of stock subscribed for by him. But this the president and directors of the company were required to do by the seventh section of the charter of the company, which provided that the president and directors first chosen should procure certificates of stock for all the shares of said company, and should deliver one certificate, signed by the president, and countersigned by the treasurer, and sealed with the seal of the company, to each person, for every share by him subscribed and held, which was made transferable at his pleasure in the mode prescribed, subject, however, to all payments due or to become due thereon. It was manifest, from the peculiar phraseology of this provision of the charter, that the Legislature designed that the certificates of stock should be issued immediately to each subscriber for every share of stock subscribed by him, in order to constitute him and his assignee a stockholder in the company, and to entitle him or his assignee to vote as such, and to exercise all the rights and privileges of a stockholder in it, subject, nevertheless, to all the calls or instalments then due, or thereafter to become due, on every share of stock subscribed or transferred by him. If such was the correct construction of the seventh section of the charter, then it was clearly incumbent on the company to tender the certificates of stock due to the defendant, and to show that they were ready and willing to do all that was required of them by the charter in regard to the defendant, before they could maintain this action against him.\\nJames A. Bayard, for the plaintiff:\\nIn reply to the objection raised, he had first to say that, by the second section of the charter, it was provided that, as soon as twenty thousand shares were subscribed, the stockholders should be incorporated by the name of the \\u201c Delaware Railroad Company,\\u201d and by that name should have power to sue and to exercise the usual rights and franchises of a corporation. It was then, therefore, that every subscriber for stock \\\"became a corporator or stockholder in the company. It was the subscription for stock, not the issuing of certificates of stock, that then constituted the defendant and every other subscriber a stockholder in the company, and to vote and act as such; otherwise there could have been no organization of this company by the election of the required officers, which had to precede the collection of any money on the subscription for stock, as none was required to he paid in at the time of subscribing, or before organizing the company. It was, however, in every ease, the subscription, and not the issuing of certificates of stock, that constituted a subscriber a stockholder in an incorporated company. Ang. and Ames on Corp., secs. 113, 411. The subscription is evidence that he is a stockholder, and enables him to transfer his stock by assignment in the mode prescribed by the charter or by-laws of the company, and that assignment would constitute the assignee a stockholder, although he was not an original subscriber; hut au original subscriber was made a corporator or stockholder by the act itself, and was so with or without a certificate. The remedies between him and the company were mutual and correlative, for he could compel the company to issue the certificate to him, and the company could sue and compel him to pay his subscription. Chester Glass Company v. Demey, 16 Mass. Rep. 100.\\nW. Saulsbury, for the defendant:\\nThe court would find, on examination, that the charter spoke of two classes of persons in this connection. One class was termed subscribers, the other stockholders. The defendant was not sued as a stockholder, and was nowhere denominated a stockholder in any part of the pleadings, but always a subscriber to the stock of the company. There was no provision, however, in the charter for suing a subscriber as such, hut it authorizes the company to sue a stockholder for such a cause of action; and this provision followed the other provision in the charter, which required certificates of stock to he issued to the subscribers as the evidence that they were stockholders in the company. Such was the construction which all the provisions of the charter when taken and considered together required in his opinion. The act seemed to distinguish between a subscriber and a stockholder, and to require that certificates of stock should at once be issued to constitute the latter character, and gave this remedy only against stockholders as such; but the suit was against the defendant as a subscriber merely, without alleging any reason for withholding the certificates due to him under the seventh section of the charter, and therefore the plaintiff was not entitled to maintain the action. .\\nBy the Court:\\nWe think there is no substantial distinction in the charter between the meaning of the terms subscriber and stockholder as indifferently employed in it, and that a subscriber may be sued even under this charter for arrears due from him on his subscription without proof that certificates of stock had been issued or tendered to him. We do not consider that there is anything in the charter to require or warrant the refined distinction contended for by the counsel for the defendant. We, therefore, refuse the motion for a nonsuit.\\nN. B. Smithers, for the plaintiff:\\nIn the year 1836, the Legislature, believing that such an improvement would be a great public benefit, incorporated the Delaware Railroad Company, to construct a railroad throughout the length of the State. But little more was done under it, however, than to make the preliminary surveys and an estimate of the cost of its construction, until the year 1849, when a supplement was passed to that act, reviving, but reducing the extent of the projected enterprise, by altering the termini of the road from Dona River, in Kent County, to the Nanticoke River, at or near Seaford, in Sussex County, and authorizing subscriptions to the capital stock of the company as thus modified. The commissioners for opening books met, as prescribed in the act, and the defendant subscribed for forty shares in the capital stock of the company ; and at the first meeting of the subscribers or stockholders he was elected one of the directors in the company. A call for an instalment of three dollars on each share of stock subscribed for was made by the board of directors, on the 22d of August, 1852, payable on the first day of December following, which meeting of the board he attended, and pif which call he received due and formal notice. Afterwards, at the ensuing session of the Legislature, which commenced in January, 1853, the directors, with the sanction and consent of a majority of the stock-, holders, applied for a farther amendment and modification of the charter of the company, to authorize the abandonment of the terminus of the road at Dona River, and to project and extend it further up the State, so as to connect and unite it with the Rew Castle and Frenchtown Railroad in Rew Castle County, which amendment and authority was granted by the Legislature, and was adopted by a majority of the stockholders at a meeting afterwards convened for that purpose; and the company has since accordingly abandoned the Dona terminus, and the construction of that part of the road which lies between that point and Dover, and is now engaged in constructing it from the Rew Castle and Frenchtown Railroad to Seaford, on the Ranticoke River. The defendant has since refused to pay the call for the instalment of three dollars a share on the stock subscribed for by him, and insists that by reason of this change in the location and construction of the road, since he subscribed for the stock, he is discharged from the duty and legal liability which he then contracted to pay it.\\nTo determine the question thus presented it was necessary in the first place to consider the status of a corpora-tor, and what constitutes a cbrpovator. Row, what was a corporation ? For a legal definition of the term he, should refer to' a well-known \\u2018authority, Ang. and Ames on Corp. 1. And how did such a body politic or corporate act ? It acted by a majority of the corporators, and when the majority determined, the minority was absolutely lost and absorbed in the majority, and there was then in legal contemplation no minority. Ang. and Ames on Corp., sec. 499; Grindley v. Barker, 1 Bos. and Pul. 235. The act of the majority concludes the minority, and becomes the act of the minority and of the whole body. For the right of a corporation to apply to the Legislature for an amendment of its charter, to authorize alterations and variations in its undertakings, he would refer to a single case, which fully sustained it in its broadest and most comprehensive scope. Ware v. The Grand, Junction Water Company, 2 Russ. and Milnes Ch. Rep. 470. The defendant individually, or simply as Beniah Tharp, had no contract touching this matter with the State, but the contract was between the State and the company, and the contract on which he was sued was not between him and the State, but between him and the company, and there was no contract, either express or implied, between, him and the latter that it should not, if a majority of the stockholders should deem it advisable, apply to the Legislature for an amendment and modification of its charter, to secure in a better and more effectual way the objects of the incorporation. The relation which he bore to the State in the matter was only as a member of the company, and as a member his existence was\\\" merged in the corporation, and he was bound by the act of the majority, Gray v. The Monongahela Navigation Company, 2 Watts and Serg. 156. Whenever a person entered into a corporation as a member of it he did so subject to the right of the State to vary or alter the undertaking with the consent of the corporation, unless it was expressly stipulated at the time that it should not be done, even though the alteration might plunge the company in greater expense than was originally contemplated; because the subscriber is not bound to contribute any more than he subscribed to the original enterprise, and the State does not compel the change, but only consents that the company may make it, and if determined upon, it is the act of the company and binds every member of it. Middle and Great Western Railway Company v. Gor don, 16 Mees, and Wels. 804. He was aware that one case might and probably would be cited against him on this point, the case of The Hartford and New Haven Railroad Company v. Crosswell, 5 Hill, 383. But that case was not sound, and had been since overruled and repudiated, even in Hew York, by the case of White v. The Syracuse and Utica Railroad Company, 14 Barb. 559. In the latter case the Court recognized the principle, that the charter was a contract between the State and the corporation, and that there was no contract involved or implied in it between the State and an individual corporator, and that the company had the power for such a purpose to bind the corporator by its act and consent. The principle was now too well established to be shaken, that the act of incorporation was a contract between its members and the sovereign who granted it, formed by the consent of both parties, and so far as the rights, duties and obligations of an individual corporator, as a corporator, were concerned, he was bound by the acts of a majority of the corporation. The Troy and Rutland Railroad Company v. Kerr, 17 Barb. 582; Revere v. The Boston Copper Company, 15 Pick. 351.\\nW. Saulsbury, for defendant:\\nHe would not dwell long on the facts of the case. His object would simply be to present, for the consideration of the Court, the principles of law on which he relied for a verdict in favor of the defendant in the action. The evidence disclosed this state of facts: The Delaware Railroad Company was chartered in 1836, and was modified in 1849, by which modification the- road was located from Dona River to the Hanticoke, at or near Seaford; and that was the road which he subscribed to the stock of the company, and contracted to pay his money to construct, and not the road which the company was then making from the Hew Castle and French-town Railroad to Seaford, on the Hanticoke. At the time when he subscribed, the company had no design and no authority to locate or construct any such rqad as the latter, or any road beyond the limits of Kent and Sussex Coun ties. The purpose and powers of the company, as well as the termini prescribed and fixed by the charter, restricted and confined the location and construction of the road at that time to the points and within the limits just stated, and the contract of the defendant was to contribute, by the purchase of stock, the amount subscribed by him, to the construction of such a road, and no other. He did not pretend that the defendant personally, or as an individual corporator, had any contract with the State in regard to the matter; but that was his contract with the company, and the only contract entered into by him in relation to the subject. He would not go so far as to contend that any and every variation or change in the location of a railroad from the route originally contemplated or projected, would discharge a subscriber to the stock of a company from his legal obligation to pay for it; but when the alteration adopted by the company involved the total abandonment of the beginning point for the road, and such a radical change in the length and general direction of it as to amount to another and an entirely different road from the one originally projected and commenced by the company, it would absolve him from the obligation, if he saw fit to take advantage of the breach, or rather of the non-performance of the contract by the company. 13 Illinois Rep. 504; 8 Mass. 267. In the case last cited, which was the case of an incorporated turnpike company, which sued a subscriber for an assessment which he refused to pay, because of a change in the location of the road authorized by an act of the Legislature, subsequent to his subscription, the Court remarked that the plaintiff sued on an express - contract of the defendant, and they were bound to prove it as they alleged it, and rested its decision in favor of the defendant, on the ground of the, change in location and .direction of the road. In the case before the Court the declaration was on the contract of the defendant to take and pay for the stock subscribed for by him, as the same should be required and called for, to construct the road from Dona to the Nanticoke River; for that was the only contract entered into by him, and the only one that could have been declared upon against him. It was also an express contract; and, on the authority of the case in Massachusetts, it was incumbent upon the plaintiff to prove it as it was alleged, or he could not recover upon it. In a case like the present, the liability of the subscriber was restricted to the road, as the same was chartered and contemplated at the time he subscribed. 10 Mass. 384; 1 New Hamp. Rep. 44. For the contract between the company and the subscriber in such a case was, that the former would make- the work then chartered, designed, and contemplated, and that the latter would pay for the shares subscribed for that purpose, and the contract could not after-wards be varied without the consent of both parties. In the case of The Hartford and New Haven Railroad Company v. Crosswell, 5 Hill, 383, which the counsel on the other side had said had been overruled (but which he should show had not been overruled), it was held that the charter was the fundamental law of the association or corporation, and to which the corporator subscribed, and it was not competent for the Legislature and the company by consent to introduce new and radical changes in the objects originally contemplated, so as to bind the corporator without his consent; and a contrary doctrine was stated by the Court to be monstrous. It was not true that that case had been overruled by the cases cited on the other side from 14 Barb. 559, and 17 Barb. 607. On the contrary, the Court would find, on examination, that they recognize and sustain the principle ruled in that case. In the case cited from 2 Watts and Serg. 156, the change or variation authorized, was but incidental to the original object contemplated in the charter, and involved no departure from the main object, but was in \\u00bfact subsidiary to it. The object was to improve the navigation of a stream, and the additional power was to authorize the erection of a dam in it, without which the improvement could not be accomplished. It was therefore nothing more than the addition of a necessary power to carry out and complete the original enter prise. The same remark would apply to the case cited on - the other side from 2 Russ. and Milne, 470; for the amendment of the charter in that case also involved no essential change in the original object of the incorporation, but might be fairly considered as merely incidental to it, in which respect both differed widely from the case before the Court.\\nC. S. Layton, on the same side:\\nA corporation was, to a certain extent, a partnership, with this difference, that while private partners were individually liable for the debts of the firm, corporations were created for specific objects, with limited liability as to the corporators.\\nThe chartered road to which the defendant subscribed was the road from Dona to Hanticoke River, and he contracted with the company for no other purpose, and situated as he was, in the forest of Mispilli\\u00f3n Hundred, remote from market and from navigation, it was not only important to him but an actual inducement with him, to have a railroad constructed on the line projected in the act of 1849, with its terminus at Dona River, as a convenient point of shipment of produce, for either Philadelphia or by the Delaware Bay and \\u2019coastwise for Hew York and Boston; and he accordingly subscribed to the stock of the company to make that road. But, by the articles of agreement with the Hew Castle and Frenchtown Railroad Company, the Delaware Railroad Company had engaged to abandon and had abandoned Dona River as a terminus, and was now employed, by means of the changes since introduced in their charter, in constructing their railroad from Seaford, on the Hanticoke, to connect with the Hew Castle and Frenchtown Railroad, which has its eastern terminus at Hew Castle, on the Delaware River. This, it was manifest, was never contemplated by the defendant, for he did not imagine that such a railroad as this was to be constructed by the company when he subscribed for his forty shares of the capital stock in it, and it was equally clear that he never contracted with the company to contribute his sub- scrip ti on for the construction of such a railroad as that which the company was now making.\\nHe would here remark that on the main point of the ease there was no conflict of decisions.\\nHe would, however, in the first place, ask this Court to charge the jury that the defendant was not a stockholder in the company until a certificate for each share of stock subscribed by him was delivered to him; that the certificate of stock was essential to constitute him a stockholder, and that it was necessary that the company should either have delivered or tendered to him the certificates of stock, before they could maintain this action against him.\\nSecondly, that the change in the terminus of the railroad, from Dona River to the junction of the Hew Castle and Frenchtown Railroad, discharged, cancelled and annulled the contract between the defendant and the company to pay for the forty shares of stock subscribed for by him under the charter of 1849.\\nHe did not maintain, however, that a change in the location of the road retaining the termini as originally designed, or that any change of charter by amendment, conferring additional powers upon the company merely to carry out in a more complete and ample manner the original objects of the enterprise would have that effect; but when the deviation or change authorized was in the termini of the road, it was a radical change, and would discharge the subscriber from his contract with the company, unless he had afterwards assented to the change, and the proof of that assent was produced before the Court and jury. The carrying a railroad through a portion of a line marked out by its charter, is a nominal, not a real compliance with its chart\\u00e9r. Wordsworth on Joint Stock Companies, 39 Law Libr. 68. In private articles of association, the articles of association were the fundamental law of the body, and it could not change its articles in their material objects so as to bind its subscribers without their consent; and the same was the law in regard to corporations, particularly if the change should be prejudicial to the interests of the stockholders. Ang. and Ames on Corp. 483. The change or alteration authorized hy the Legislature may he so great an radical in the charter as to absolve the corporator from his contract with the company. Ang. and Ames on Corp. 485; The American Bank v. Baker et al., 4 Metcalf R. 164. On the* authority of that case he should contend, that as there was no proof before the jury that the defendant was present at the meeting which resolved to apply to the Legislature for the change of the charter, or at the meeting which resolved to change the route of the road from Dona River, and as there was no evidence that he subsequently assented to them, that the company could not sustain this action against him. 2 Conn. R. 579; Day\\u2019s Dig. 108; 4 Henn. and Mumf. 315; 5 Hill, 8 Mass. R., and 13 Illinois R., cited by his colleague. On the strength of these eases, which had never been overruled, he would venture to assert that even if it were proved that the defendant was present at these meetings, and assented to all these changes, the plaintiffs still could not recover in this action. The case in 17 Barb. R., tlie strongest against him cited on the other side, recognized and confirmed the decision in 5 Hill, on which they relied. In the case in 17 Barb. R., it was held that the change in the charter was but incidental to the original object of the incorporation, and was consequently an alteration to which the stockholder may be held to have impliedly assented, and therefore he was considered not to be discharged from his contract with the company.\\nMr. Bayard, for the plaintiff,\\ncited Mercer County v. Coovert, 6 Watts and Serg. 70, arid gave the counsel on the other side an opportunity of replying to it if they desired to do so.\\nMr. Layton:\\nA county was a quasi corporation, and as such was as much hound to observe its contracts as a corporation, and he thought, on a critical examination of the report of that case, it would be found to support the position for which he had contended,\\u2014the inviolability of the contract; as it was held in the case cited that the change in the location .of the bridge, after the guarantee given by the defendants, absolved the defendants from any liability on the guarantee.\\nJames A. Bayard, for the plaintiff:\\nIt was proved that the defendant subscribed for forty shares; also, the organization of the company, the call for the instalment of three dollars on each share, and the notice of it to the defendant were proved. The counsel for the defendant who last addressed the jury remarked, that the chief inducement which the defendant had for subscribing to the railroad terminating at Dona River might have been, the outlet which it would afford him, and others residing like him in the interior of the State and remote from navigation, for the shipment of produce and lumber from that river with greater facility and convenience, either by the bay to Philadelphia or coastwise to Dew York or Boston, or other seaports, at their pleasure. But this was a consideration, whatever might have been its influence with the defendant, which could have no weight or importance in the determination of this action, for it was a well-established as well as a wise principle of law, that private considerations, and-expectations of individual benefit and profit, cannot he allowed to have entered at all into the reasons which induced him to subscribe to the proposed enterprise, and that his contract to take and pay for the stock was to he construed and enforced in a court of law, without any regard whatever to such private considerations and expecta- ' tians. On the contrary, before such & forum as this, every Stockholder was to he presumed to have subscribed for his stock from considerations of the public good, from motives of public spirit, and from the expectation of profit which he might hope to derive possibly from the investment of money in the stock, as in the purchase of any other species of property, and without any regard to the incidental advantages and facilities which the work might afford him when made.\\nThe facts relied on by the other side were that, after the subscription of the defendant to the stock of the company, the latter applied to the Legislature to authorize a' change of the terminus of the road from Dona River; that the authority was given, accepted by the company, and that the terminus of the railroad at Dona River has since been changed and abandoned, and by this they contend that the defendant has been absolved from his liability on the contract to pay his subscription. To that he replied, that the application to the Legislature to authorize the change, and the change authorized, and afterwards adopted, were all duly sanctioned and approved by a vote of a majority of the stockholders, in meetings convened according to the rules and regulations of the company for that purpose, and that therefore the defendant had not been discharged thereby from his subscription, but was bound to pay it.\\nThis case, and the cases cited and relied upon on the other side, had all arisen from one case, the ease in 5 Hill Rep., and that had all been the result of the misconception of Judge Nelson, by whom it was decided, of the cases which had been ruled in Massachusetts.\\nHe should ask the Court to charge the jury that the change in the terminus of the road, the 'contract with the New Castle and Frenehtown Railroad Company, and the contract with the Philadelphia, Wilmington and Baltimore Railroad Company, and the Wilmington and New Castle Railroad Company, have not discharged the defendant from the contract. Because the defendant had not assented to the act of 1853, it was contended that he had been disr charged from his contract. But was not this a singular effect to claim for such an act ? For, if the company had violated its supposed contract with the defendant to make the road to Dona River, it would not discharge the defendant from Ms contract, but he would have a right to go into chancery for an injunction to restrain the company from abandoning that terminus, and to compel it to make the road to that point; while they, on their part, might oblige him to pay his subscription and comply with his contract with them.\\nA corporation was not a partnership. A partner could receive and discharge the debts of the firm, and he could supervise the business of it, and was personally liable for all the legitimate engagements of the firm. A corporator had no such powers, and was subject to no such liability. A partner had a joint but undivided interest and property in everything owned by the firm; but a corporator had no such joint and undivided interest in the property of the corporation, for his only property was in his shares of the capital stock of the company. The corporator, therefore,' had not the interest in the property of the corporation which the partner had in the property of the partnership. In the first case, the property is all vested in the artificial being created by the Legislature, the company; in the other case, the property was all vested in the individual members of the firm. If a corporation owned real estate, that did not make the corporator a land-owner, and he could not vote upon it; he had no estate in the land, that was all vested in the artificial being, the company, and .the corporator had no property in anything but in his shares of stock. Such was not the case of a partner, however; he was a land-owner, and h'ad a joint-estate in the real property of the firm. Corporations were bodies politic and little republics, and a majority of the corporators governed. The right of the corporator is in his share and to vote, and he was bound by the votes of a majority, whether it was under the charter or in an application of the company to the sovereign for a change of the charter. 1 Kidd on Corp. 13; Ang. and Ames on Corp. 1; 1 Bos. and Pul. 235; 15 Pickering, 351. What was the contract of the corporator with the corporation, and what was the contract of the defendant with the corporation in this case ? (Beads the subscription clause in the charter, sec. 1), and asked if this was not an absolute contract to take the shares of stock subscribed, without any condition or stipulation whatever, whether as to any future application to the Legislature for an amend ment of the charter, or that the railroad should be made as then projected in the charter? It was an absolute and 'unconditional contract to take forty shares in the stock of the company, and in consideration of those shares to pay for it. But the idea had somehow or other sprung up that there was involved in this transaction an implied promise by the company to the subscriber that the work should be constructed as contemplated and projected at the time of the subscription. There was no such contract, either express or implied, between the corporation and the corporator. The only contract in such a case was that which he had already stated. By the purchase of the shares the stockholder acquired a property in them, with the rights of property incident to it, and a right to vote upon them; and the very existence of the corporation required that he should be governed by the vote of the majority. The stock which he held, or for which he had subscribed, had no such incident as the implied contract to which he had alluded. His obligation was to pay for the shares; the obligation of the corporation was to convey to him the shares of stock subscribed for, with all the rights of property incident to it, according to the charter. If this was not so, how would you get along in the case of an assignment of the stock, with an assignee refusing to pay the arrears of subscription due on the stock assigned him subsequent to a change authorized in the road? Could he plead such an implied contract ? But there was no soundness in this distinction, and there could be none in such a distinction as were found in some of the books, and recognized and admitted in others cited on the other side, if it be a contract between the corporation and the corporator at the time he subscribes, that the work shall be made as authorized and designed at that time, between large and small changes, or between what are called radical and less important changes in the line or mode of constructing the projected improvement; because, if there was any legal foundation for such an idea as that, it must be on the ground that such a change would impair the obligation of the contract, by attempting to vary or change it without the consent of the corporator. blow, it was manifest, if this was so, it was utterly immaterial whether the change was great or small. The Constitution of the United States made no distinction between such cases, between altering the contract or the impairing of the obligation of it, in a greater or smaller degree, and authorized the Legislature to make no such discrimination. On the contrary, it was evident that, if the exemption of a corporator from his liability to pay for his stock, was based on the idea of a contract between him and the corporation, which could not be changed without his consent, any change whatever from the work as'then chartered and \\u00a1Drojected would discharge him. It was contrary to the practice of the Legislature, and the settled views and received opinions of the profession in this State, in regard to the many and constant changes made by the Legislature in the rechartering of banks, and the modifications made in the charter of almost every corporation existing amongst us. What would he the effect if such a principle had ever been understood to prevail in this State, and that any one dissenting stockholder could have forbidden the renewal of the charter, and compelled the company to wind up, as he could have done if such was the law on the subject?\\nThe idea on the other side drawn from the similitude of a partnership was, that the contract between the corporation and the subscriber was extended by implication, to prevent any radical change in the purposes of the incorporation. This he denied, and had shown that the contract was that he was to pay the amount subscribed for his shares of stock, and the company was to grant him the stock, with all the rights of property incident to it, .which incidents would depend on the nature of the regulations prescribed by the charter on the subject. This was. the contract, and this was the only contract which the corporation, with the sanction of this Legislature, could not change without the consent of the subscriber. All other rights and interests which he had in the corporation were subject to the decision of a majority of-the corporators\\u2014 the great and fundamental law of all corporations. 15 Pickering, 153. The decision in that case was, that the votes and acts of a majority of the corporators, while they may rule the interests of a corporator as a corporator, they could not affect his contracts with the corporation not as a corporator; and this he adinitted. The right of the company to apply to the Legislature for authority to enlarge and change their works, or totally to change their charter, as incident to such a corporation, notwithstanding the objection of a corporator, was clearly and expressly recognized and ruled in the case cited by his' colleague, from 2 Russ. & Milne, 470. It was a necessary incident of a corporation that it should have the right, with the approbation of a majority of the shareholders, to apply to the Legislature for a change of its charter; and every one who came into it was bound by the votes of a majority, unless he had stipulated against it at the time of subscribing; for there was no implied engagement\\\" or contract of the corporation to the contrary. The Pennsylvania cases were with us. The corporation could not do anything to deprive the corporator of his share, or to make him pay more money on or for his share than he originally agreed to pay for it, without his consent, with or without the sanction of the Legislature; because that would be to affect and prejudice him, not as a corporator, but as an individual, outside of the corporation, and would be a violation of his contract. 2 Watts & Serg. 161; 6 Watts & Serg. 71, 72.\\nIn the case cited from 8 Mass. 262, the change authorized by the Legislature increased the amount which the subscriber engaged to pay at the time of subscribing. It had been previously decided in that' State that, where the charter had given only the right of forfeiture for the nonpayment of instalments due upon the shares, an action- at law might be maintained by the company for the amount of the share against the subscriber on his cpntract to pay for the share, as a collateral contract; and that, notwithstanding the charter, gave no action a!t law for it, and the only remedy provided by the statute was by forfeiture; but the Court also decided that the action in that case being on the express contract by the subscriber to take and pay for the shares of stock subscribed, as a collateral promise made by him not as a corporator, but as an individual, it must be declared on as it was actually made, and, it could not be changed by the corporation and the Legislature without his consent. 10 Mass. R. 384. He referred to the case in 5 Hill, 383, and denied that the decision in that case was law, and that it was shaken by the case in 14 Barb. 559, and was in effect overruled by the case in 17 Barb. 607. The Illinois case holds the change to be binding if it was designed to carry out the original undertaking. And if it were necessary to reconcile the present with the ruling in that case, it might be done by showing the first incorporation in 1836 and its objects; its change and reduction of capital in 1849; and its subsequent change to the present, which was more in accordance with the original object of the charter than the amendment of 1849. But, after what he had said on the subject of greater and smaller variations in this respect, he hardly deemed it necessary to notice that case any further, or to say anything more .in regard to it.\", \"word_count\": \"9756\", \"char_count\": \"55709\", \"text\": \"The Court,\\nWootten, J.,\\ncharged the jury: This case, which has been protracted to considerable length by a thorough investigation of the facts, and an elaborate argument of the law on both sides, has now been brought to that stage of it when it becomes necessary for the Court to announce to you their opinion of the law, as applicable to it, and which must mainly govern the decision of it, as there appears to be but little controversy in regard to 'the facts which pertain to it.\\nIt is, as you are already aware, an action i commonly called an action of assumpsit, brought by the Delaware Bailroad Company against Beniah Tharp to recover from him $120, the amount of a call made on him of three dollars per share on his subscription of forty shares of the capital stock of the company, with interest at the rate of two per cent, per month from thirty days after such call, which was on th\\u00e9 1st of December, 1852.\\nTo entitle the plaintiffs to recover it is necessary that they should prove first, the legal existence, of the company as a corporation; and this is done by showing that the Legislature passed the charter, and by showing that the company has been organized according to the terms and stipulations of the charter.\\nSecondly; that Beniah Tharp, the defendant, subscribed to the capital stock of this company to the amount of forty shares, at $25 per share.\\nThirdly, that 5000 shares of stock were subscribed; that the call was made for the amount claimed and notice thereof given as authorized and required by the charter, that is, by publication in two newspapers published in the city of Wilmington, at least thirty days previous to the first day of December, 1852, the time appointed for the payment of that portion or instalment of the stock called for, and that the defendant neglected to pay the same at the time and place appointed for that purpose.\\nIf these facts are all proved to your satisfaction the plaintiffs are entitled to your verdict for the amount claimed by them, unless the defendant has set up and established sdme legal defence which absolves him from his liability.\\nThe defence set up and relied upon by the defendant is, that since the subscription by him to this stock, and since the organization of the company as originally chartered, a change has been made in the charter and in the line and eastern terminus of the road without Ms assent, which, he alleges, releases and absolves him from his liability to pay the amount subscribed by him. That a change has been made by the Legislature, on the application of the company, and has been approved and adopted by the stockholders is true; but whether that change is of such a character as discharges the defendant from his liability to pay the amount of his subscription to the stock is the question upon which this case turns, and which we are now called upon to answer, by the announcement of our opinion to you of the law upon that subject.\\nWe must confess that we have been considerably embarrassed by the contrariety of opinions and seeming conflict of decisions cited, and we are not now entirely free from doubts; but we have given the subject all the attention and the \\\"fullest consideration which our limited time and opportunity would allow, and will announce the conclusion to which it has conducted us.\\nUpon examining the authorities cited on behalf of the defendant, in support of his position, most of them strike us as having and bearing but little analogy to the case now under consideration.\\nThe case of The Hartford and New Haven Railroad Company v. Crosswell, 5 Hill, does go to the extent that such extensive and radical changes may be made in the road, or work of improvement, as will operate as a dissolution of the contract of a subscriber to stock; but it also recognizes the principle that such alterations may be made, in the language of the learned judge who delivered the opinion of the Court, as are clearly enough beneficial, or at least not prejudicial to the interest of the party.\\nSo, too, in the case cited from 13 Illinois R., it is conceded that such changes or amendments may be made to the charter as may be considered by the Legislature useful to the public, and by the company beneficial to them, if they do not divert its property to new and different purposes, and where the work is still designed to accommodate the same line of travel and transportation, and to promote the same general good, without absolving the subseribers from their engagements.\\nThe case in 1 New Hampshire Reports, and those in 8 and 10 Massachusetts Reports, are also relied upon; but those cases are essentially different from the .one we are now considering; and although it is somewhat difficult to determine what they really do decide, they were doubtless cases where the liability'of the subscribers was increased. The case in Hew Hampshire was-a subscription for one share of stock, and the contract was to pay all assessments a majority of the company might think necessary to raise for improving the navigation of a river within certain limits, and for the purchase of six acres of land for the prosecution of the improvement. The assessment on that share was for the purchase of one hundred acres of land, whereby the liability of the subscriber was increased.\\nAnd so in the cases cited from 8 and 10 Massachusetts Reports, the undertaking was in the one case to pay assessments on one share-of stock, to make a turnpike, the cost of which was estimated at $40,000, and that there should be 400 shares, being $100 per share. Two assessments were made, to the amount of $240. A change was made in the charter by the Legislature, on the application of the company, and the direction of the road was altered. The defendant supposed, and very naturally thought, he could not in any possible event be held liable for assessments amounting to more than $100 on each share, for that was the stipulated contract between him and the company when he subscribed, and he was therefore absolved from his liability by such a change as necessarily increased his liability from $200 to $240.\\nThe facts and rulings are the same, or very similar, in the case in 10 Massachusetts.\\nOn the part of the plaintiffs several authorities have been cited in support qf the principle contended for by them; that is to say, that a change made in the charter by the Legislature, without impairing the contract between the subscribers and the company, does not release subscribers to the stock.\\nThe first of these is the case cited from 2 Russell & Mill., Ware v. The Grand Junction Water-works Company. Ware, the defendant, objected first to the expenditure of the money of the corporation for the procurement of an amendment to the charter; and also to the application to Parliament for such amendment.\\nLord Brougham held that one of the incidents of a corporation is to apply to Parliament for an amendment of its charter. And the members of the corporation entered into it with that contingency; and if they intended to enter into it with any reservation, they ought so to have stipulated.\\nThe next of these cases is that cited from 2 Watts & Sergeant. In that case the Court held that the extension or enlargement of the powers or privileges of a corporation, though it may increase the expenses or moneys, does not change the contract of the corporator. His contract was simply to pay to the company his subscription; and to become, in consideration thereof, a holder of stock to that amount; that, as a corporator, he entered into the contract subject to the right of the company to apply to the Legislature to change the charter for the public good, which is the object of all corporations.\\nThe plaintiffs also cited the case of The Middle and Great Western Railroad Company v. Gordon, in 16 Meeson & Welsby; The Troy and Rutland Railroad Company v. Kerr, 17 Barbour's Reports; and the case in 6 Watts & Sergeant.\\nThe grant of acts of incorporation by the State is professedly for the public good generally; and there is an inherent right in the Legislature to amend, change, or alter the charter of any incorporated company with its consent. Those who become corporators do so with that contingency, and their engagements are therefore subject to it. If a subscriber to stock enters into the corporation generally without specific stipulations, he is hound and concluded by the action of a majority of the corporation; and if the Legislature change or amend the charter on the application of the company, and with its assent and approval, without thereby impairing the contract of the corporators, in the mode we have stated, they will not be thereby discharged from their liability as subscribers to stock. Such a change as would not increase the liability of the party to pay more money than he subscribed originally to pay, but merely affects his individual or personal interest, as that the road did not pass by his door, or through his farm, as he may have desired or expected, is not such a change as will absolve the party from his obligation to pay his subscription. The object of corporations being for the public good, and not private interest or advantage.\\nN. P. Smithers and J. A. Bayard, for plaintiffs.\\nW. Saulsbury and C. S. Layton, for defendant.\\nThe contract of the defendant with the Delaware Railroad Company was to pay for forty shares of the capital stock of the Company at $25 per share, in consideration of being the holder of that number of shares. That he agreed and promised to pay the same to the president and directors of the company, in such manner and proportions and at such times as shall be determined and' called for by them. By the terms of his contract he is bound. If he intended to subscribe on the condition that the road should not be changed in its eastern terminus or otherwise, he ought so to have stipulated; not having done so, he cannot now shield himself under the defence set up by him, and upon the ground that the road has since been changed from its terminus at Dona River. Having subscribed' under the general terms of the charter, with an inherent right in the Legislature to change it for the public good, with the consent of the corporation, and the company having applied for and accepted the amendment, he, as a corporator, is concluded by the action of the majority of the company, although he may not as an individual corporator have assented to it.\\nVerdict for plaintiffs.\"}"