Court Opinion

ID: 7091333
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:06:26.807171+00
Date Added: 2024-06-11T16:13:04.344609
License: Public Domain

Stockton, J.
The only question is, had the company power so to change its articles of incorporation, as to require defendant to pay more than twenty-five per centum of his stock in any one year ? And was such change binding on defendant ? It is insisted by defendant, that his subscription of stock having been made under the articles of incorporation, when they did not allow the plaintiffs to call for more than twenty-five per centum of any subscription in any one year, he could not, by any act of the company, be required to pay any greater amount annually, or rendered liable in this' action for the amount of stock subscribed for by him, called for in instalments at the rate of five per centum per month. It will be observed, that at the time of defendant’s subscription, the charter provided that the articles of incorporation might be changed, by the unanimous consent of the whole board of directors, or by the stockholders at, any general or special meeting.
*412If a corporation procure an alteration to be made in its charter, by which a new and different business is super-added to that originally contemplated, such of the stockholders as do not assent to the alteration, will be absolved from liability on their subscriptions to the capital stock. Especially will this be the case, if the alteration be plainly prejudicial to the interest of the stockholder. New Haven & Hartford R. R. Co. v. Croswell, 5 Hill, 383. The terms of the contract, between the subscriber for stock and the corporate body, are limited by the specific provisions, rights and liabilities detailed in the act of incorporation. To make a change in this contract, as in any other, the assent of both parties is necessary. The corporation, on the one part, may assent by a vote of the majority — the individual, on the other part, by his own personal acts. Union Locks & Canal Co. v. Towne, 1 N. Hamp., 44.
The charter of the company, plaintiff in this case, provides that the articles of incorporation are formed and adopted under, and in pursuance, of the forty-third chapter of the Code of Iowa, which provides for changes in the charter, which, when recorded and published, as the original articles are required to be, are valid. Code, section 680. In view of this provision pf the law, and the articles of the charter, which authorizes changes to be made by the board of directors, or by the stockholders, we do not think the defendant can, with justice, allege that his liability has been increased or changed, without his consent. He consented to the change being made, and authorized the company to call for payment of his subscription stock, at the rate of five per centum per month, by becoming a member of the corporation. South Bay Meadow Dam Company v. Gray, 30 Maine, 547.
This view of the defendant’s liability, upon his assent to the change made in the charter, sufficiently disposes of the case, without reference to the other question made by plaintiff’s counsel, upon the meaning and effect of the agreement prefixed to defendant’s subscription; and upon *413the consequence to be attached to the fact of his having paid, fifty dollars on his subscription.
Judgment affirmed.