Court Opinion

ID: 8183751
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:05:56.396505+00
Date Added: 2024-06-11T16:40:20.299636
License: Public Domain

Lyon, J.
Although this appeal is from an order striking-out a demurrer to the complaint as frivolous, yet, under the existing rule of this court, the question to be determined is. whether the demurrer is well taken. It was so held ini *217Diggle v. Boulden, 48 Wis. 477, and the rule has since been constantly adhered to.
It is maintained by the learned counsel for defendant that the complaint fails to state a cause of action, and hence that the demurrer is well taken, for either of twq reasons: (1) Because ic appears from the complaint that the amount of plaintiff’s capital stock was increased after defendant subscribed thereto, presumably without his consent ; and (2) because it is not averred in the complaint that one half of the capital stock of the plaintiff company had been subscribed, and twenty per cent, thereof paid in, when the assessments on defendant’s stock were made. It appears that 371 shares of the stock were subscribed by the persons who signed the certificate of organization, and no other subscriptions thereto are alleged.
In considering these objections to the sufficiency of the complaint, it should be observed, at the outset, that the averments of the complaint show sufficiently the incorporation of the plaintiff company under ch. 87, E. S., under which chapter the liability of the defendant must be determined. Corporations “ for building or operating public railroads ” are especially excépted from the operation of ch. 86, E. S. (S. & B. Ann. Stats, sec. 1771). The plaintiff is a corporation of this class. Hence the case of Anvil Mining Co. v. Sherman, 74 Wis. 226, which was decided under ch. 86 (sec. 1773, E. S.), has no application to this case.
Under ch. 87, as soon as the incorporation of the plaintiff was complete, it possessed all the powers and privileges conferred by law upon such corporations. One of these was to increase its capital stock. Sec. 1826. Another was to make assessments upon the capital stock, and to enforce payment thereof by forfeiture of the stock so assessed, or in the manner provided in sec. 1754 (sec. -1824). One of the methods provided in sec. 1754 is by suit in the name of the corporation against the delinquent stockholder, which is the remedy here resorted to.
*218The common-law rules that any material alteration of the charter of a corporation, without the consent of a stockholder, relieves him from liability on his stock subscription, and that assessments on stock to raise money for the general purposes of the corporation cannot lawfully be made until all the capital stock has been subscribed, are invoked to sustain the demurrer. These rules are applicable only to cases in which the alteration or assessment is not authorized by the charter as it existed when the subscription was made. This is not such a case. The provisions of ch. 87, R. S., for the incorporation of railroad companies, and conferring upon them the privileges and powers, and charging them and their stockholders with the obligations, therein specified, is the charter of the plaintiff. It has not been changed since the defendant made his subscription. It is the contract between the stockholders of the company; between the state and such stockholders; and between the state and the corporation. Cook, Stocks, § 492. In contemplation of law, this charter is contained in each stock subscription as effectually as though expressly written therein. Hence the subscription of defendant must be treated as though it contained express stipulations that the capital stock of the company might be increased in the manner pointed out in sec. 1826 without prejudice to the right of the company to enforce payment for such stock; and that, as soon as the company was incorporated, it might lawfully make assessments on unpaid stock subscriptions, and enforce payment thereof without regard to the aggregate amount of capital stock subscribed or the sums paid thereon. Such is the clear meaning of secs. 1820, 1824, R. S. In Lynch v. E., L. F. & M. R. Co. 57 Wis. 430, a special railroad charter was so construed, although not as free from ambiguity or doubt, as to the power of assessment before the whole capital stock is subscribed, as in ch. 87.
*219In the view we have taken of the case, it is unnecessary to consider the question of waiver, which was discussed by counsel. "We conclude that the complaint states a cause of action, and hence that it was not error to strike out the demurrer.
By the Court. — Order affirmed.