between stockholders, but will not be permitted to defeat the rights of creditors.12

1 Spangler v. Indiana etc. R. R. Co. 21 Ill. 276. As to notice: see Turnp. Co. v. Meriwether, 5 B. Mon. 13; Atlantic Delaine Co. v. Mason, 5 R. I. 403; Sheffield etc. Railw. Co. v. Woodcock, 7 Mees. & W. 574; Scarlett r. Academy of Music, 43 Md. 203.

2 Franklin Glass Co. v. White, 14 Mass. 286; Franklin Glass Co. v. Alexander, 2 N. H. 380; Knowle v. Beatty, 1 McLean, 41.

3 First Presbyterian Cong. r. Quackenbush, 10 Johns. 217; Mayor etc. v. McKee, 2 Yerg. 167; Bangor House Proprietary v. Hinckley, 12 Me. 385; Katana Land Co. v. Jernegan, 126 Mass. 155.

4 Atlantic Delaine Co. v. Mason, 5 R. I. 463; see State v. Morristown Fire Assoc. 3 Zab. 195.

5 Ex parte Winsor, 3 Story, 411; see Sullivan v. Triunfo etc. Min. Co. 29 Cal. 585.

6 Atlantic Delaine Co. v. Mason, 5 R. I. 463; Somerset etc. R. R. Co. v. Cushing, 45 Mc. 524.

7 Great Falls etc. R. R. Co. v. Copp, 38 N. H. 124; Lewey's Island R. R. Co. r. Lolton, 48 Me. 451.

8 Oldtown etc. R. R. Co. v. Veazie, 39 Me. 571; Salem Mill Dam Corp. r. Ropes, 6 Pick. 23; Stoneham Branch R. R. r. Gould. 2 Gray, 277; Central R. R. v. Johnson, 30 N. H. 390; Peoria etc. R. R. Co. v. Preston, 35 Iowa, 115; Norwich etc. Nav. Co. v. Theobald, 1 Moody & M. 151.

9 Troy etc. R. R. Co. v. Newton, 8 Gray, 506; Eastern Plank Road Co. v. Vaughan, 14 N. Y. 546; Livesey v. Omaha Hotel Co. 5 Neb. 50; Ticonic Water Power Co. v. Lang, 63 Me. 480. See § 110, ante.

10 Troy etc. R. R Co. v. Newton, 8 Gray, 596; Somerset etc. R. R. Co. v. Cushing, 45 Me. 524; Somerset R. R. Co. v. Clarke, 61 id. 379. 11 Hann v. Mulberry etc. Gravel Road Co. 33 Ind. 103.

12 Curry v. Woodward, 53 Ala. 371. See Robinson v. Bank of Darien, 18 Ga. 65; Farrar v. Walker, 13 Bank. Reg. 82.

§ 118. Who liable to calls and assessments.— Each person whose name appears upon the stock books of a corporation as a stockholder, is presumably the owner of the stock,1 and so liable to calls and assessments.2 And in an action to enforce the payment thereof, the burden of proof is upon him to show that he is not a stockholder. And a stockholder cannot avoid liability on the ground that he was not an original subscriber, but is an owner by purchase. A transferee of shares is liable for calls made after he has been accepted by the company as a stockholder, and his name has been registered on the stock books. And a buyer of shares, who induces the company, by false representations, to enter his name upon the register, is estopped to deny the validity of the

transfer so obtained, in an action against him for calls. And generally, a stockholder who participates or acquiesces in the action of corporate officers in making an assessment, is estopped from objecting that the assessment was unauthorized." Payment of installments by a subscriber, without objection, is a sufficient recognition of the legal existence of the corporation, to enable it to recover future installments. 8

1 See State v. Ferris, 42 Conn. 560; Mudgett v. Horrell, 33 Cal. 25; Spear v. Crawford, 14 Wend. 20; Corden v. Universal Gas Light Co. 6 Dowl. & L. 379.

2 Merrimac Min. Co. v. Bagley, 14 Mich. 501; see also, West Cornwall Railw. Co. v. Mowatt, 15 Q. B. 521.

3 Turnbull v. Payson, 16 Bank. Reg. 440.

4 Hartford etc. R. R. Co. v. Boorman, 12 Conn. 530; Merrimac Min. Co. v. Bagley, 14 Mich. 501; West Phila. Canal Co. v. Innes, 3 Whart. 198. Comparo Shropshire etc. Canal Co. v. Anderson, 6 Dowl. & L. 482; Palnier v. Ridge Min. Co. 34 Pa. St. 238.

5 Webster v. Upton, 91 U. S. 65; Merrimac Min. Co. v. Levy, 54 Pa. St. 227.

6 Sheffield etc. Railw. Co. v. Woodcock, 2 Eng. Railw. Cas. 522; and see Everhart v. Westchester et?. 1. R. Co. 23 Pa. St. 339.

7 Central R. R. Co. r. Johnson. 30 N. II. 390; Kansas City Hotel v. Harris, 51 Mo. 454; Macon etc. R. R. Co. v. Vason, 57 Ga. 314; Ossipee Manuf. Co. v. Canney, 54 N. II. 25; and compare Bavington v. Pittsburgh etc. R. R. Co. 34 Pa. St.353; Lexington etc. R. R. Co. v. Chandler, 13 Met. 311; Stratford etc. Railw. Co. v. Stratton, 2 Larn. & Adol. 518.

8 Maltby r. Northw. etc. R. R. Co. 16 Md. 422. Compare Cromford etc. Railw. Co. v. Lacey. 3 Youngo & J. 80; London te. Railw. Co. v. Graham, Q. B. 271; Somerset etc. R. R. Co. v. Cushing, 45 Me. 524; Camp v. Byrne, 41 Mo. 525.

§ 119. Payment, how enforced.-It is clear that, in the absence of any remedy provided by statute or by-law for the recovery of assessments, or unpaid installments, subscribers are liable therefor, in an action at law, though they have made no express promise.1 And, according to the weight of authority, subscribers are so liable upon a promise, express or implied, notwithstanding a remedy by forfeiture of the stock is given to the corporation by the charter. The penalty by forfeiture is cumulative, and affords no objection to an action at law.3 The corporation may waive it, and proceed in personam on the promise. But a subscriber cannot rescind his contract by forfeiting the payment made thereon;5 the option to for

feit is with the company, and not with the stockholder. And if the company elect to forfeit and take back its stock, it cannot also collect the price subscribed. The power of a corporation to subject stock to forfeiture for non-payment of installments, must be expressly conferred, and is to be exercised strictly in accordance with the provisions of the charter,9 and the law of the state wherein the corporation exists.10 There can be no forfeiture for failure to pay assessments which are in whole or in part illegal. And a general resolution forfeiting stock for non-payment of installments, which does not specify the stock forfeited, is not valid.12 So, in a proper case, a redemption of shares may be obtained after a declaration of forfeiture aud before sale.18 Where notice of assessments and calls is not required by the charter, it is not an indispensable requisite to liability in an action for stock subscriptions; and where the subscription paper fixes the time of payment, no demand before suit is necessary.15

1 Spangler v. Indiana etc. R. R. Co. 21 Ill. 276; Essex Bridge Co. v. Tuttle, 2 Vt. 393; Upton v. Tribilcock, 91 U. S. 45. See § 108, ante.

2 Conn. etc. R. R. Co. v. Bailey, 24 Vt. 465; Troy etc. R. R. Co. v. Kerr, 17 Barb. 581; Carlisle v. Cahawba etc. R. R. Co. 4 Ala. 70; Selina etc. R. R. Co. v. ipton, 5 id. 787; Rockville etc. Turnp. Road r. Maxwell, 2 Cranch C. C. 451; Dcl. etc. Canal Co. v. Sansom, 1 Binn. 70; Kirksey v. Florida etc. Plank Road Co. 7 Fla. 23; Troy Turup. & R. R. Co. v. McChesney, 21 Wend. 2.6; Dayton 1. Dorst, 31 N. Y. 435; Inglis v. Great North. Railw. Co. 1 Marq. 112. In Massachusetts, in the absence of an express promise to pay assessments, the remedy, in the first instance, is by a sale of the shares: Boston etc. R. R. Co. r. Wel lington, 113 Mass. ; City Hotel r. Dickinson, 6 Gray, 586; New Bedford ete. Turup. Corp. r. Adams, 8 Mass. 138. So, in New Hampshire: N. II. Central R. R. v. Johnson, 30 N. H. 80; and seo Piscataqua Ferry Co. v. Jones, 30 N. H. 491; White Mts. R. R. Co. r. Eastman, 34 il. 124; see also Kennebec etc. R. R. Co. v. Kendall, 31 Me. 470; Kennebec etc. R. R. Co. v. Jarvis, 34 id. 36.

3 South Bay etc. Dam Co. v. Gray, 30 Me.547; Northern R. R. Co. v. Miller, 10 Barb. 260.

4 Eastern Plank Road Co. v. Vaughan, 20 Barb. 155; Spear v. Craw. ford, 14 Wend. 20; Mann v. Cooke, 20 Conn. 178; Instone v. Bridge Co. 2 Bibb, 577; Raymond v. Caton, 24 Ill. 123; City Hotel v. Dickinson, 6 Gray, 596; Birmingham etc. Railw. Co. 1 Q. B. 256. Compare Giles v. Hutt, 3 Ex. 18.

5 Klein v. Alton etc. R. R. Co. 13 Ill. 514; and see Conn. etc. R. R. Co. v. Bailey, 24 Vt. 465; Turup. Co. v. Imlay, 1 South. 285.

6 Railroad Co. v. Rodriguez, 10 Rich. 278.

7 Small v. Herkimer Manuf. Co. 2 N. Y. 330; Athol etc. R. R. Co. v. Inhabitants etc. 110 Mass. 213; Mechanics' Foundry etc. Co. v. Hall, 121 id. 272.

8 Matter of Long Island R. R. Co. 19 Wend. 37; Downing v. Potts, 23 N. J. L. 66: Lewey's Island R. R. Co. v. Bolton, 43 Me. 451; Barton's Case, 4 DeGex & J. 45; Stanhope's Case, Law R. I Ch. 161.

9 Downing v. Potts, 33 N. J. L. 66; Eastern Plank Road Co. v. Vaughan, 20 Barb. 155; Clarke r. Hart, 6 II. L. Cas. 633; and see Garden Guny etc. Min. Co. v. McLister, Law R. 1 App. C. 39; York etc. R. R. Co. v. Ritchie, 40 Me. 425.

10 Mitchell v. Vt. Copper Min. Co. 8 Jones & S. 406; 67 N. Y. 280.

11 Stoneham Branch R. R. Co. v. Gould, 2 Gray, 277; Lewey's Island R. R. Co. v. Bolton, 43 Me. 451.

12 Johnson v. Albany etc. R. R. Co. 40 How. Pr. 193.

13 Walker v. Ogden, 1 Biss. 287; Mitchell v. Vt. Copper Min. Co. 8 Jones & S. 406; 67 N. Y. 250.

14 Eppes v. Miss. etc. R. R. Co. 35 Ala. 33. Compare Grubb v. Mahouing Nav. Co. 14 P'a. St. 302; Grubbs r. Vicksburg ete. R. R. Co. 50 Ala. 38; Winter v. Muscogee R. R. Co. 11 Ga. 458; Lake Ontario etc. R. R. Co. v. Mason, 16 N. Y. 451; Rutland etc. R. R. Co. v. 1hrail, 35 Vt. 536; Cole v. Joliet Opera House Co. 79 Ill. 96.

15 New Albany etc. R. R. Co. v. Pickens, 5 Ind. 247. Compare Schenectady etc. R. R. Co. v. Thatcher, 11 N. Y. 12; Phoenix War h. Co. v. Badger, 67 id. 294; Mansfield etc. R. R. Co. v. Hall, 26 Ohio St. 310.

§ 120. Discharge of subscriber from liability.— A change in the amount of the capital stock of a corporation, made without the assent or subsequent acquiescence of a subscriber, discharges him from all liability on his subscription. So, of a change locating a road upon a different route; 2 or a change in the position of a bridge.3 And if a corporation embark in a new business, though by authority of law, stockholders not assenting thereto are absolved from liability on their subscriptious. So, if a charter becomes void by its terms, in consequence of the work not being commenced within the time fixed, the subscribers are discharged. And generally, changes in the contract of subscription after signing, or material alterations in the charter, or departure from the substantial features of the corporate organization as proposed to and accepted by the subscriber, or from its purposes and plans, if made without his consent, will operate tc discharge him from liability on his subscription, or from an agreement to take and pay for bonds of the corporation. 10 So, if the corporation release a part of its subscribers,

returning to them their money, subscribers not assenting thereto are discharged.11 But mere changes in matters of detail, not affecting the material features of the engagement as intended and entered into by the subscriber, 12 or changes in the corporate affairs which may be considered authorized or contemplated by the charter and bylaws fairly construed, 18 or changes to which the subscriber has assented 14 even by implication,15 will not operate to discharge him. 16 And so of changes which the directors or the majority have no power to make or carry into effect, because they are ultra vires or fraudulent.17 Nor will mere mismanagement discharge a subscriber; 18 nor will abandonment of its business by a corporation discharge a subscriber, where it appears that the corporation is indebted to more than the amount of the subscription.19 A defense to an action against a subscriber upon his subscription, that he had not signed the articles of association, or authenticated his subscription in the com

missioner's books, was disallowed as insufficient; 20 so, of

a defense that the promoters of the company had purchased from themselves property for corporate use, at an exhorbitant price, in fraud of the stockholders; 21 or that the company had received subscriptions in excess of the amount authorized; 22 or had received subscriptions without complying with a charter provision requiring the capital to be invested in public securities; 28 or that the commissioners, in receiving subscriptions, failed to exact a certain percentage in cash on each subscription when made as the charter required; 24 or that notice of an election of directors was insufficient; 25 or that the company had released other subscribers or forfeited their stock without payment; 26 or that the company's road had been seized by executive authority; 27 or that the company had not located its business at the place contemplated by the charter.28

1 Hughes v. Antietam Manuf. Co. 34 Md. 316. Compare Agr. Br. R. R. Co. v. Winchester, 13 Allen, 29.