When, however, no limitation is found in the general law upon the right, and the articles or charter confers upon them general authority in the matter of levying and collecting assessments, they may collect the whole amount subscribed at once, or by instalments.1 A shareholder may expressly agree to pay the amount of his subscription immediately, or at stated times, and thus relieve the corporation of the duty of making calls. He will be liable to pay upon such contract according to its terms.2 But where his contract contains no such terms, or there are no provisions to the contrary, in the charter, it is an implied condition, precedent to the liability of a subscriber to contribute to the company's capital, that a regular call or assessment shall have been made upon all the shareholders. And until that is done, he cannot be compelled by suit to contribute or be garnished by a creditor of the corporation. After assessments have been made and calls issued therefor, the same are assignable as other forms of indebtedness.3

Upon well established principles, if the charter or articles, made by ample reference and implication a part of such contract of subscription, contains express and definite provisions in regard to the payment of subscriptions, no call is required, and the subscriber is bound to pay at the times and in the manner specified.1

1 Ham v. Mulberry Gravel Road Co., 33 Ind. 103. Compare Williams v. Taylor, 120 N. Y. 244; 24 N. E. 288.

2 Phoenix Warehousing Co. v. Badger, 67 N. Y. 294, 300; and see Andrews v. Ohio & Miss. R. R. Co., 14 Ind. 169.

3 Wells v. Rogers, 50 Mich. 294; 15 N. 462. Infra, § 717.

Waukon, etc., R. R. Co. v. Dwyer, 49 Iowa, 121. A case illustrative of this rule is Phoenix Warehousing Co. v. Badger, 67 N. Y. 294. In delivering the opinion of the court, RAPALLO, J., said:-"This action was properly brought upon the original subscription, and it was not necessary to aver calls. By his subscription, to which no condition or stipulation as to the time of payment was attached, the defendant undertook to pay for his shares according to the conditions of the charter. The act under which this company was incorporated

§ 556. By whom made. It is evident that the authority to make calls cannot be legally exercised by an officer or agent not duly authorized by law or the constating instruments. If it is the duty of the directors under the charter, neither the president nor a minority of the directors can make them. The charter or other constating instruments may confer authority to make calls upon a third party or another corporation, and where this is done, an assessment so levied will be valid.2

The call may be issued by the president, secretary or other business manager, after it is determined upon by the board; but the act of sending out notices to the members should be done in a ministerial capacity.

No such officer or agent can receive a delegation of authority from the board which will empower him to actually make the call. Nor can a committee be authorized to make it. Nor can the stockholders, when the power to make calls is exclusively vested in them by the charter, delegate the authority to the directors or other officers.*

§ 557. Amount of assessment.-Although it be ex

requires that the whole capital stock be paid in within two years. Without intimating that this is a limitation upon the right of the company or the receiver to require immediate payment, it may be observed that the two years had elapsed, and upon any theory the subscription was past due when this action was commenced."

1 People's Mut. Ins. Co. v. Wescott, 14 Gray, 440; Banet v. Alton & Sangamon R. R. Co., 13 Ill. 513; Silver Hook Road v. Greene, 12 R. I. 164; Spangler v. Ind., etc., Ry. Co., 21 Ill. 276; Macon, etc., R. R. Co. v. Vason, 57 Ga. 314; Monmouth Mut. Fire Ins. Co. v. Lowell, 59 Me. 504; Rutland, etc., R. R. Co. v. Thrall, 35 Vt. 536; Price v. Grand Rapids, etc., R. R. Co., 13 Ind. 58. 2 Gerusheim v. Olcott, 7 N. Y. S. 872.

445.

Parks v. Heman, 7 Mo. App. 14; Pike v. Bangor, etc., R. R. Co., 68 Me.

4 Ex parte Windsor, 3 Story, 411. See Louisiana Paper Co. v. Waples, 3 Woods, 34. The making of calls involves the exercise of a discretion and judgment. Silver Hook Road v. Greene, 12 R. I. 164.

pressly provided in the charter or general law that no more than a certain amount or percentage of the subscription shall be called for at one time, the directors may, nevertheless, vote several assessments at once; provided only one is to be collected within the limited time. It is otherwise, where the contracts of subscription provide that the calls shall be in proportions periodically.2

§ 558. Compliance with statutory requirements.—When the statute specifies how a demand shall be made for the payment of installments, the provisions of the act, in this respect, must be strictly complied with. If, for instance, it directs that there shall be a personal demand, a written notice through the mail will not be sufficient. So where a charter required a particular notice to be given a specified number of days before installments are payable, the corporation was held bound to show compliance.* The same rule applies

where the statute requires the publication to be in a newspaper.5

§ 559. Only substantial compliance required.—A sub

1 Rutland, etc., R. R. Co. v. Thrall, 35 Vt. 536; Penobscot R. R. Co. v. Dummer, 40 Me. 172; Penobscot, etc., R. R. Co. v. Dunn, 39 Me. 587; Amergate Ry. Co. v. Norcliffe, 20 L. J. Ex. 234; Amergate Ry. Co. v. Mitchell, 6 Eng. Ry. Cas. 234; 4 Ex. 540; 20 L. J. Ex. 234; 4 Eng. L. & D. 461.

2 Spangler v. Indiana, etc., Ry. Co., 21 Ill. 276. Where the terms upon which shares were sold were:-One-third to be paid down as soon as all the stock was taken and the remainder to be paid in such installments as the board of trustees should call for it "for the purposes of the business, it was held that it was intended that the calls for installments should be made as the purposes of the business required; that the trustees had no right to call for all at once unless required for the purposes of the business. Williams v. Taylor, 120 N. Y. 244; 24 N. E. 288; distinguishing Railroad Co. v. Mason, 16 N. Y. 451; Howland v. Edmonds, 24 N. Y. 307; and Tuckerman v. Brown, 33 N. Y. 297; reversing 41 Hun, 545. 3 Hughes v. Antietam Mfg. Co., 34 Md. 316.

• Macon, etc., R. R. Co. v. Vason, 57 Ga. 314; Miss., etc., R. R. Co. v. Gaster, 20 Ark. 455.

See Hall v. Ins. Co., 5 Gill (Md.), 484.

stantial, rather than a technical, compliance with the directions of the statute will be required. Still, any material omission or error will render the assessment invalid for any purpose. In the absence of statutory provisions to the contrary, it has been held that a provision in the charter or articles, requiring a particular kind of notice, was not obligatory, provided actual notice be given, whether verbal or written.1

Where the statute requires both personal notice and publication in a newspaper, it is doubtful if either can be dispensed with. But it is often impracticable to serve all with personal notice, and those so served are interested in having every legal means resorted to to obtain from all others their share of the capital immediately required in their common undertaking.

§ 560. Invalid assessment not susceptible of ratification.The making of an assessment is not, strictly speaking, a corporate act, but an act agreed upon among the members to be done by their mutually authorized agent. But, where they have agreed upon the manner in which that authority shall be exercised, they may meet again and change the method by a new agreement. Still the corporation, in the ordinary exercise of its powers, cannot by a majority vote make valid by ratification what was before an unauthorized assessment.

Nothing short of a waiver, in some way of his right to object, will deprive an individual shareholder of his defence to invalid and unauthorized calls and assessments.2

1 Lexington etc., R. R. Co. v. Chandler, 13 Metc. 311; Miss., etc., R. R. Co. v. Gaster, 20 Ark. 455; Jones v. Sisson, 6 Gray, 288; Danbury, etc., R. R. Co. v. Wilson, 22 Conn. 435.

2 In an Indiana case the action was against a shareholder for non-payment of a call made by order of less than a quorum of the directors. It was attempted to be shown that the order for the call had been ratified by the whole board and by the corporation. Upon the point the court said: "The orders, if passed by a minority, were absolutely void, because there was a defect of power.

§ 561. Notice of calls.-Upon the question whether, after a call has been regularly made, notice of the same must be given to the stockholder before the corporation can bring suit for the same, the authorities are conflicting. The weight of authority, however, is to the effect that, in the absence of statutory requirements on the subject, no notice previous to bringing the suit is necessary. The decisions in support of this view are based upon the ground that the contract to pay by installments is in effect a promise to pay on demand, and the demand involved in bringing the suit itself is sufficient.1 New York, it may almost be said to be established that no call is necessary prior to the bringing of suit on the subscription, and, of course, no notice, though in no case has the question been directly passed upon. In several cases, however, the view has been expressed that unless the contract provides for calls, the subscription is payable, and at once, or as soon as the corporation is duly organized.2

In

There are well-considered cases holding a contrary view, however. Cases holding that a notice is neces

And the rule seems to be that a void act is not susceptible of ratification." Price v. Grand Rapids, etc., R. R. Co., 13 Ind. 58. See Story on Agency, sec. 240 et. seq. A provision in the contract of stock subscription to pay "in such installments, and at such time, or times, as shall be determined" by the directors, does not mean that the directors can make an illegal call, or that the time of payment is left wholly in their discretion, and does not authorize them to enforce the subscription before all the capital stock has been taken. Orynski v. Loustaunan (Tex.), 15 S. W. 674.

1 Smith v. Ind. & Ill. Ry. Co., 12 Ind. 61; Wilson v. Wills Valley Ry. Co., 33 Ga. 466; Eppes v. Miss. G. & T. R. R. Co., 35 Ala. 33; Grubb v. Mahonig Nav. Co., 14 Pa. St. 302; Gray v. Monongahela Nav. Co., 2 W. & S. (Pa.), 156; Grubbs v. Vicksburg, etc., R. R. Co., 50 Ala. 398; Eakright v. L. & N. I. R. R. Co., 13 Ind. 404; Johnson v. Crawfordville R. R. Co., 11 Ind. 280; Hill v. Nisbit, 100 Ind. 351. On finding that a meeting of the board of directors was duly and regularly convened," and that an assessment made thereat was "lawfully and rightfully levied," includes a finding that the necessary notice was given. Younglove v. Steinman, 80 Cal. 375; 22 P. 189.

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2 Lake Ontario A. & N. Y. R. R. Co. v. Mason, 16 N. Y. 451; Phoenix Warehousing Co. v. Badger, 67 N. Y. 294, 300.