Court Opinion

ID: 6670802
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:09:44.758144+00
Date Added: 2024-06-11T16:00:30.967031
License: Public Domain

Eccleston, J.,
delivered the opinion of this court.
The appellant claims a reversal of the judgment in this case, because the court committed an error by instructing the jury: “ That the commissioners who were authorised by the laws of Pennsylvania aforesaid to open boobs and receive subscriptions to the capital stock, were the only persons who had authority to receive subscriptions to the said capital stock of four thousand shares of twenty-five dollars per share, specified in said special act, and that no power existed in said company to receive subscriptions for any of said shares, and that the said pretended promissory note purporting to be made to said company, in consideration of forty shares, is a nudum pactum, and without authority of law.”
By the 18th section of the special act referred to, commissioners were appointed “to open books, receive subscriptions, and organize a company, by the name, style and title of { The Wellersburg and West Newton Plank Road Company,’ to locate and construct a plank road from, &c., .... subject to all the provisions and restrictions of ‘ An act regulating Turn*566pike and Plank Road Companies,’ approved the twenty-sixth day of January, one thousand, eight hundred and forty-nine, and the supplements thereto, as far as the same are not inconsistent with this and the following sections.”
The 19th section of the special act provides: “That the capital stock of said company shall consist of four thousand shares, of twenty-five dollars per share; provided that said company may from time to time, at a meeting called-for that purpose, increase their capital stock to such an amount as, in their opinion, may be required to complete the same according to the true intent and meaning of this act.”
The 1st section of the general act directs, how commissioners named in a special act shall proceed in regard to receiving subscriptions for stock. And the 2nd section then enacts, that, “ When twenty persons, or more, shall have subscribed ten per centwn on the capital stock provided for by such special act of Assembly, the said commissioners respectively may, or when the whole number of shares authorised as aforesaid shall be subscribed, they shall certify under their hands and seals the names of the subscribers, and the number of shares subscribed by each, to the Governor of the Commonwealth; whereupon it shall and may be lawful for the Governor, by letters patent under his hand and seal of State, to create and erect the subscribers; and if the subscription be not full at the time, then those who shall afterwards subscribe to the number aforesaid, into one body politic and corporate, in deed and in law, by the name, style and title designated by such special act; and by such name the said subscribers shall have perpetual succession, and all privileges and franchises incident to a corporation, and shall be capable of taking and holding the capital stock, and the increase and profits thereof, and of enlarging the same by new subscriptions, in such manner and form as they shall think proper, if such enlargement shall be found necessary to fulfil the intent of such special act.”
The 10th section also provides, that, “Whenever it shall be ascertained that the capital stock of such company is not sufficient to complete their road, according to the true intent and meaning of this act, it shall and may be lawful for the presi*567dent and managers, at a stated or special meeting, convened according to the provisions of this act or their own by-laws, to increase the number of shares to such an extent as they shall deem sufficient to accomplish the work, and to demand and receive the moneys subscribed for such additional shares, in like manner and under like penalties, as are provided by this act in the case of the original subscriptions.”
Prom the letters patent of the Governor of Pennsylvania it appears, that when they were granted the stock subscribed for amounted, in the whole, to two thousand and thirty-four shares, and, therefore, being more than ten per centum of four thousand, the Governor had authority to act under the 2nd section of the general law. And in compliance with which he created and erected those who had then subscribed, and those who should afterwards subscribe, “into one body politic and corporate.”
The defendant did not subscribe before the commissioners, but his subscription was obtained by G. W. Richardson, “who was appointed agent of said company to get subscriptions to said capital stock in Cumberland, Maryland, by Thomas Shriver, the president of said company, after the issuing of said letters patent,” Such is the admission stated in the record. And it is also admitted, that the four thousand shares of stock never have been all subscribed for.
Under the second section referred to, when twenty persons or more shall have taken ten per centum or more of the stock allowed by law, the commissioners may make their certificate to the Governor, and they shall do so when the whole number of shares are subscribed for. And, in either case, the Governor is authorised to issue letters patent to sanction the organization of the company. When he does so, where the stock has not all been taken, then those who at the time have subscribed, and also those who may afterwards take stock, are to be members of the corporation. And there is a provision which allows the corporation to enlarge their capital stock, if found necessary to fulfil the intent of the special act; which enlargement is to be made by the corporation “in such manner and form as they shall think proper. ’ ’ By the provision for enlarging the capital *568stock, it is evident the section means increasing the stock previously subscribed for, whether that consists of but part or all mentioned in the special act; because the section relates to both cases, and in reference to enlarging the stock there is no distinction made between them. Moreover, we have seen it is declared that the corporation “shall be capable of taking and holding the capital stock, and the increase and profits thereof, and of enlarging the same by new subscriptions in such manner and form as they shall think proper.” The same here refers to the capital stock, the increase and profits of which the corporation are to take and hold. To yield profits and increase, it must be stock actually subscribed for, and not that which is merely allowed by law to be taken.
In this section, then, we think it is provided that a corporation may be organized either under an original partial, or under an original full, subscription of stock". And that when organized, without making any distinction in regard to ■ the kind of subscription under which it may have been done, among other powers conferred on the corporation, is that of enlarging their capital stock in such manner and form as they might think proper.
This authority to increase the capital stock, as given by the laws referred to, in our opinion, gave to the present corporation, after it was organized under the letters patent, based upon a partial subscription of the stock mentioned in the special act, a right to increase their capital stock. In doing which they had authority to direct the manner and mode in which subscriptions might be obtained for such portions of the four thousand shares as had not been previously taken; and, of course, we do not think the commissioners were the only persons who had authority to receive subscriptions to the four thousand shares of stock specified in the special act.
Commissioners are appointed to receive subscriptions to stock for the purpose of giving the subscribers a right to organize as a corporation under the charter. . So soon, however, as the organization takes place, the authority of the commissioners ceases; and all corporate powers conferred by the charter vest in the body politic. Such, at least, is the general rule apply*569ing in every case where there is no special provision to the contrary. And, in the laws relating to the present case, we find no provision which required this corporation, after its organization 5 to have subscriptions for the stock taken by the commissioners, and in no other mode, when the purpose was to enlarge the capital stock by new subscriptions, even if such new subscriptions wére to be for part of the four thousand shares provided for in the special act.
Even if a prayer be correct in part, yet if not so in any material part, it is error to grant it, and is' ground for a reversal on appeal.
The record shows that the subscription in dispute was made after the letters patent were issued, and the company had organized ; for it is admitted, as we have said before, that the signature of the defendant “ was procured by a certain George W. Richardson, who was appointed agent of said company to get subscriptions to said capital stock in Cumberland, Maryland, by Thomas Shriver, the president of the company, after the issuing of said letters patent:”
This being the state of the case when the instruction under-consideration was given, the court committed an error in granting it, unless it were true that even after the letters patent had issued, and the company was organized; the commissioners (c were the only persons who had authority to receive subscriptions to the said capital stock of four thousand shares, of twenty-five dollars per share; specified in said special act, and that no power existed in said company to receive subscription for any of said shares.”
That this, in our opinion, is not true, will appear from what has been said in regard to the authority of the commissioners, and in reference to the power of the company after its organization. And believing the instruction to be erroneous, the judgment must be reversed.
The plaintiff’s bill of exceptions presents the only matter for our consideration, as there is no appeal on the part of the defendant.
Judgment reversed and procedendo ordered.