Court Opinion

ID: 6411929
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:53:20.389216+00
Date Added: 2024-06-11T15:51:24.137372
License: Public Domain

Bigelow, J.
We have not deemed it necessary to determine whether the contract of subscription on which the plaintiffs rely would be valid and binding under the laws of Massachusetts, because we are of opinion that the validity, obligation and interpretation of the contract must be governed by the law of the State of Maine. Although the contract was made in Boston, that is, it was executed by the defendants here and no place was designated in express terms for its performance, yet in order to ascertain and determine the law by which it is to be interpreted and governed, we must look at its nature and character, the purpose for which it was made and the objects intended to be accomplished by it. This is the only mode by which we can judge accurately of the intent of the parties, and arrive at a correct conclusion on the question whether the contract was to be performed at the place where it was made, or in another place *247subject to a different jurisdiction, and where a different rule of interpretation may prevail. In the case at bar, we cannot doubt that the place of performance of the contract was in the State of Maine, and that it was so understood and intended by the parties. It was a contract of subscription to the capital stock of a railroad corporation established by the legislature of that state. The road to be constructed under the authority of the charter was located wholly within the limits of that state. The duties of the officers of the corporation were to be chiefly performed there. Its capital stock was to be there expended and its treasury to be there situated. Although by the terms of the charter the corporation was authorized to open books of subscription to its capital stock in the cities of Salem and Boston as well as in the State of Maine, there is no provision designating the place where the payment of such subscriptions was to be made. It being a foreign corporation established for local purposes, we think the necessary implication is that payment was to be made in the State by whose laws the corporation was established, and where its business was to be carried on and its officers chosen. It cannot be reasonably supposed, in the absence of any express stipulation, that its financial concerns would be carried on under a foreign jurisdiction. When therefore by the terms and conditions of the subscription it was stipulated that subscribers should have the right “ to pay into the treasury ” the whole amount of their subscription and be entitled to interest thereon, payable semiannually from the treasury, we think it clearly appears to have been the intention of the parties that the subscrip tians should be payable in the State of Maine. It may be safelj said, that where a party resident in one state agrees to pay money towards the capital stock of a corporation established by the laws of another state and having its place of business there, according to assessments to be laid by the directors, it is equivalent to an agreement to pay such sums to the treasurer of the corporation or other duly authorized agent; and where no place of payment is specified, it must be presumed to have been the intention of the parties to pay such assessments in the State where the corporation is established and carries on its business.
*248The rule is familiar, that if a contract either expressly or by implication is to be performed in a place other than that where it was executed, then, according to the presumed intent of the parties, its validity, obligation and interpretation are to be gov erned by the law of the place of performance. Story Confl. § 280., The law of the place where the contract is made can never be the rule of its interpretation, if it is entered into with a view to the law of another country or state.
It was urged in argument that there was no evidence before the court concerning the laws of the State of Maine regulating and governing contracts of this nature, and that therefore the presumption is that the law of that state is similar to our own. But we do not so understand the case as stated in the report. By that it appears that the counsel for the plaintiffs, in proving their case, referred to the several decisions of the supreme court of the State of Maine, for the purpose of showing what the law of Maine on the subject is. It does not appear that any objection was made at the trial by the defendants to this evidence of the law. But if there had been, we do not think it tenable, because by the Rev. Sts. c. 94, § 60, it is provided that the unwritten or common law of any other of the United States may be proved as facts by paroi evidence, and that the books of reports of cases adjudged in their courts may also be admitted as evidence of such law.
Upon reference to the decisions of the supreme court of the State of Maine, relating to subscriptions to the capital stock of corporations, in which the subscribers have agreed, in terms like those embodied in the contract declared on, to “ take and fill ” a certain number of shares, it appears that they have been construed as contracts to take and pay for the shares on which the subscribers are liable as on an express promise. Certainly, as an original question, we should have had great doubts of the correctness of the interpretation. But it was long since determined to be the true one by the supreme court of the State of Maine, in Bangor Bridge v. McMahon, 1 Fairf. 478. This decision has been subsequently recognized as a true exposition of the terms of the contract by the same court, and it was recently *249reaffirmed in an action brought in favor of the plaintiffs on a subscription expressed in the same terms as those contained in the contract declared on. Buckfield Branch Railroad v. Irish, 39 Maine, 44. Penobscot & Kennebec Railroad v. Dunn, 39 Maine, 588.
It is however urged with great confidence in behalf of the defendants, that the agreement signed by the defendants amounts only to a promise to pay for the shares when the number of shares of which the capital stock is to consist shall be legally fixed and determined and taken up by bona fide subscriptions, and that there is no provision in the charter of the plaintiff corporation, nor any vote of the directors or of the corporation by which the capital stock is fixed and limited. This objection rests on the rule of law as recognized and established in this commonwealth by a long series of decisions, commencing with Salem Milldam v. Ropes, 6 Pick. 23, in which it is held that where the capital stock of a corporation is fixed by its charter, or is to be determined by a by-law or by vote of the directors, no agreement to pay for shares is binding until the whole capital, stock fixed in the charter is taken up, or until the corporation or the directors have determined on the number of shares and the whole number is subscribed for. But in the present case, the capital stock of the corporation is not fixed by the charter, nor is there any provision requiring the corporation or directors to determine its amount. The only provision is that contained in § 3, which enacts that the capital stock shall consist of not less than four thousand.or more than ten thousand shares. By one of the conditions of the subscription, it was provided that the corporation might be organized when four thousand shares should have been • subscribed for, but no contract for building and completing the road should be entered into until seven thousand shares should have been subscribed for. It appeared in e /idence at the trial that when the corporation was organized in November 1852 four thousand and sixty shares had been taken, that on the 3d of May 1853 nine thousand and sixty six shares had been subscribed for, and that no contract for constructing the road was made until more than seven thousand *250shares had been taken. The conditions of the subscription were thus completely fulfilled.
We understand it to have been decided in Penobscot Railroad v. Dummer, 40 Maine, 172, that under a charter similar in its terms to that under which the plaintiffs act, providing that the capital stock should consist of not less than one thousand and not more than six thousand shares, a subscriber was held liable on his contract “ to take and fill ” a certain number of shares, when more than one thousand, to wit, twelve hundred and ten shares had been taken; and in Kennebec Sf Portland Railroad v. Jarvis, 34 Maine, 360, under an act incorporating a railroad company, with a provision that the capital stock might consist of one million two hundred thousand shares, and where the corporation had passed a by-law that there should be twelve thousand shares of one hundred dollars each, the number of which might be increased by the directors, it was decided that a subscriber was liable on his subscription although the number of shares fixed by the by-law had not been taken up.
These decisions establish beyond doubt that by the law of the State of Maine the subscription relied on in the present case would be held binding and obligatory on the defendants. And if anything is required to make this more clear, it may be added that in an action by these plaintiffs on the same subscription paper as that declared on in this action, it was held to be a valid contract on which the subscriber was liable for the amount of his subscription. Penobscot & Kennebec Railroad v. Dunn, 39 Maine, 587. It is true that the precise point discussed here was not raised in that case, but it was argued by eminent counsel, and if there had been any validity in the objection under the law of the State of Maine, it would doubtless have been raised.

Verdict set aside ; judgments for the plaintiffs.