
    George D. Emmitt v. The Springfield, Jackson and Pomeroy Railroad Company.
    E. subscribed for forty shares of $50 each of the capital stock, consisting of $2,000,000, of the Springfield, Jackson and Pomeroy Railroad Company, agreeing to pay the sum subscribed, in such installments as might, “ from time to time, be required by the directors of the company, under the provisions of the charter of said company, and the laws governing the-same.” Providing, however, that such subscription should not be binding until the aggregate sum of $800,000 in bona fide subscriptions should be taken to the capital slock, between S. and J., and that no contract for the construction of the road between J. and P. should be made-until the building of the road between S. and J. was assured. Subsequently, by agreement between E. and the company, the sum of $700,000 was substituted for the 5800,000: Held, That upon the bona fide subscription of 5700,000 to the capital stock of the company, between S. and' J., E. became liable to assessment on the sum by him subscribed.
    Error to the Court of Common Pleas of Pike county* Reserved in the District Court.
    The defendant in error, a corporation organized to con¡struct and operate a railroad between the city of Springfield, in Clark comity, and the city of Pomeroy, in Meigs ■county, and running through Jackson, brought an action, in the court of common pleas, against the plaintiff in error to recover certain assessments or calls on a subscription made by him to its capital stock. The capital stock con•sisted of §2,000,000, divided into shares of §50 each. The plaintiff' subscribed for forty shares, the sum of §2,000, the ■contract of subscription being as follows:
    “We, whose names are hereunto signed, agree to pay the number of shares annexed to our respective names, of fifty ■dollars each share, to the capital stock of the Springfield, ■Jackson and Pomeroy Railroad Company, and we hereby bind ourselves, our heirs and executors or administrators, to pay the same to the authorized agent of said company, in such installments as may, from time to time, be required by the directors of said company, under the provisions of the charter of said company, and the laws governing the ¡same. Provided, and these subscriptions are made upon the express condition, that they shall not be binding until the aggregate sum of eight hundred thousand dollars ■(§800,000) in bona fide subscriptions shall have been made to the capital stock of said company, between Springfield, in Clark county, Ohio, and Jackson C. IL, Ohio; and no •contract for the construction of said railroad east of Jack'.son shall be made, until the building of said railroad from Springfield to Jackson is assured. Provided, also, that as■sessments shall not at any time exceed teu per centum of a ¡subscription every sixty days.”
    “ George D. Emmitt, 40 shares, §2,000.”
    Some time after the making of the subscription, a modification of the terms of the proviso was made, as follows: “We, the undersigned, subscribers of stock to the Springfield, Jackson and Pomeroy Railroad Company, hereby waive the condition of subscription, in the foregoing contract of subscription, in reference to the (§800,-■000) eight hundred thousand dollars, and consent that ■seven hundred thousand dollars shall be substituted therefor.”
    “ George D. Emmitt.”
    The petition alleged that the substitution of $700,000 for the $800,000 was made by the defendant below, and many other stockholders, “ to induce the board of directors of said plaintiff” (below) “to proceed to put said road in ■course of construction.”' After the $700,000 had been fully subscribed, calls were made in pursuance of the contract, notice given, hut the plaintiff refused to pay.
    Upon demurrer to the petition, the point and the only point taken, was, that no liability to assessment could arise, until the whole capital stock had been subscribed for and taken. The demurrer was overruled and judgment given for the amount of the assessments. A petition in error, filed in the district court, to reverse the judgment of the court of •common pleas, was reserved for decision in this court.
    
      W. A. Hutchins and George D. Cole for plaintiff in error.
    
      Wm. H. Safford for defendant in error.
   Boynton, J.

There are many authorities that hold that no valid assessment or call can be made upon a subscription to the capital stock of a corporation, until the whole stock is taken, where the right to make the same is unaffected by contract, or by the statute.

Salem Mill-Dam Corporation v. Roper, 6 Pick. 23; Stoneman Br. R. R. Co. v. Gould, 2 Gray, 277; Troy R. R. Co. v. Newton, 8 Gray, 596; Contoocook Valley R. R. Co. v. Barker, 32 N. H. 370; Shultz v. The S. & I. R. R. Co., 9 Mich. 269; Sewey’s Island R. R. Co. v. Bolton, 48 Maine, 457; Summersett Railroad Company v. Clark, 61 Maine, 379; Hughes v. Antietam Manufacturing Co., 34 Md. 316; The Peoria & Rock Island Railroad Co. v. Preston, 35 Iowa, 115; Hoagland v. The Cin. & Ft. Wayne R. R. Co., 18 Ind. 452; Fox v. The Allensville Turnpike Co., 46 Ind. 31; Green’s Brice’s Ultra Vires, 105, note; 1 Red. Railway, 176.

The rule is said to rest upon an implied agreement that the subscription is conditional upon tbe whole number'of’ shares being taken; but the authorities thus holding are-quite uniform in the further holding, that such rule always yields to a different understanding of the parties. Kennebec & Portland R. R. Co. v. Jarvis, 34 Me. 360; York & Cumberland R. R. Co. v. Pratt, 40 Me. 447; People’s Ferry Co. v. Balch, 8 Gray, 314; Phillips v. Covington Bridge Co., 2 Met. (Ky.) 219; Estell v. Knightstown Turnpike Co., 41 Ind. 174; Iowa & Minn. R. R. Co. v. Perkins, 28 Iowa, 281.

We do not find it necessary in the present case to determine whether, or, if at all, to what extent, the statute authorizes assessments to be made upon subscriptions to the capital stock of a corporation befoi’e the stock is fully subscribed, as under a proper interpretation of the-contract of subscription the plaintiff became liable to assessments or calls on the sum by him subscribed, when subscriptions, made in good faith, amounting to $700,000, had been secured between Springfield and Jackson. If it be true, as is claimed, that upon an unconditional subscription to the capital of a corporation, no liability to assessment can arise until all the shares are taken, it is equally true, there being nothing in the statute prohibiting it, that the subscriber may waive such exemption from liability, and give to the company, or confer upon its officers, the right to call in the subscription made, at any time when an agreed number o.f shares, less than the whole, shall have been taken. This, we think, is what was done in the-present ease, and what the parties to the contract contemplated and intended. The company was organized to construct and operate a railroad from Springfield to Pomeroy. The capital stock was $2,000,000. The plaintiff subscribed for forty shares, the sum of $2,000, undertaking “ to pay the same to the authorized'agent of said company, in such installments as may, from time to time, be required by the directors of said company, under the provisions of the-charter of said company, and the laws governing the same.” Providing, however, that his subscription should not be binding, until the aggregate sum of $800,000, in bona fide subscriptions, should be made to the capital stock of the company, between Springfield and Jackson;” and it was further stipulated that no contract for the construction of the l’oad east of Jackson should be made, until the building of that part between Springfield and Jackson was assured. Subsequently, by agreement of the parties, the sum of $700,000 was substituted for the $800,000.

The circumstance of this modification of the terms of the original contract has an important bearing on the intention of the parties, when viewed in the light of its previous provisions, and in connection with the remaining language of the proviso, which substantially secured the application of this sum, if necessary, to the construction oí the road west and. north of Jackson.

The change from one sum to the other, obviously was made to facilitate and advance the commencement of the work; or as is stated in the petition, “to induce the board of directors of the company to proceed to put said road in course of construction.” To do this, funds were required;, and the capital subscribed was the natural, and the only source provided, from which such funds were to be supplied. The opposite view is,’and it constitutes the plaintiff's contention, that the stipulation in the proviso, that his subscription should not be binding until the aggregate sum of $700,000 in bona fide subscriptions was secured between Springfield and Jackson, converted the transaction into a mere agreement to subscribe; that it provided for him a sort of locus penitentice. But it is hardly to be supposed that the success of an enterprise contemplating the expenditure of $2,000,000 would have been left to the uncertainty, or hazard, which such a construction of the contract involves. Such could not have been the understanding of the parties. It is more rational to conclude, that they were willing to open the work, when the $700,000, should be provided to carry it forward.

Judgment affirmed.  