
    Railroad Company v. Hinsdale.
    
      Railroad corporation — Conditional subscription to stock — Whether sale of road transfers subscriptions — Remised Statutes, secs. 3300, 3409.
    li. subscribed lor a number of shares of the capital stock of a railroad company, the subscription being made payable on the order of the directors, in installments, and to be paid when the road was completed. The company being unable, from lack of means, to complete the construction of its proposed line of road, duly executed its deed purporting to sell and transfer its road-bed, right-of-way, subscriptions, and other property to another railroad company, which latter company completed the construction of the road, and was afterwards consolidated with another railroad company. Held:
    
    1. That neither section 3300 nor section 3409 of the Revised Statutes conferred authority to sell and transfer the stock subscription of H.; and no ownership in the subscription passed to the company grantee, by virtue of the deed.
    2. That the subscription of H. was conditional, and the company grantee did not, by performing the condition precedent named in the subscription, fix and make absolute the liability of the subscriber.
    (Decided March 13, 1888.)
    Error to the Circuit Court of Wood County.
    In the year 1876, the Toledo & Grand Rapids Railroad Company) a corporation organized under the laws of Ohio, was constructing a line of railroad from Toledo to Grand Rapids in Wood County, Ohio.
    George P. Hinsdale, the defendant in error, and other parties residing along the line of railroad, subscribed to its capital stock. The following is a copy of his subscription :
    
      “ We, the undersigned, agree to take and pay for the number of shares of the capital stock of the Toledo & Grand Rapids Railroad Company, set opposite to our respective names, each share being fifty (50) dollars and payable on the order of the directors in installments of not more than ten per cent, every thirty days. It is understood that the above-named road is to be a narrow guage railroad, and that said railroad is to cross the river at Grand Rapids.
    “ G. P. Hinsdale, 30 shares.............................. $1,500.00
    
      “ (To be paid when the road is completed.) ”
    In the year 1881, the Toledo & Grand Rapids Railroad Company executed a deed of its road-bed and other property, to the Toledo, Delphos & Burlington Railroad Company, a corporation organized under the laws ofOhio. The Toledo, Delphos & Burlington Railroad Company thereafter consolidated with the plaintiff in error, the Toledo, Cincinnati & St. Louis Railroad Company, a corporation organized under the laws of Ohio.
    The Toledo, Cincinnati & St. Louis Railroad Company, claiming to be the owner of all subscriptions to the capital stock of the Toledo & Grand Rapids Railroad Company, filed its petition in the court of common pleas of Wood county, in the month of April, 1882, against the defendant in error, on his stock subscription, praying judgment for the sum of fifteen hundred dollars,with interest thereon. The defendant — George P. Hinsdale — answered, setting up a number of defenses, which were denied in the plaintiff’s reply.
    The cause was submitted to the court without the intervention of a jury, a jury being waived by both parties. At the request of the plaintiff, a special finding of facts and conclusions of law were made and stated by the court as follows :
    
      “ This cause coming on for hearing on the petition of the plaintiff, the answer of the defendant, the reply of the plaintiff, and the evidence — on consideration whereof the court finds:
    
      “ First. — That the Toledo, Cincinnati & St. Louis Railroad Company, The Toledo, Delphos & Burlington Railroad Company, and the Toledo & Grand Rapids Railroad Company, are corporations duly organized under the laws of Ohio, and that the Toledo, Cincinnati & St. Louis Railroad Company is the successor of and owner by consolidation of the Toledo, Delphos & Burlington Railroad, and of all the rights, credits, subscriptions to capital stock, franchises and property of all kinds, which belonged to and constituted the said road.
    
      “ Second. — That at a meeting of the directors of the Toledo & Grand Rapids Railroad Company, a contract for the sale of the corporation known as the Toledo & Grand Rapids Railroad Company, its franchise as a corporation, its road-bed, rolling-stock, choses in action, subscriptions and personal property of every description to the said Toledo, Delphos- & Burlington Railroad Company, whose lines of road were continuous and connected and not competing with the line of road of the said Toledo & Grand Rapids Railroad, for a valuable consideration was submitted to and approved by said directors, and the president and secretary of said Toledo &' Grand Rapids Railroad Company authorized to sign the same.
    
      “ Third. — That at a meeting of the directors of the said Toledo, Delphos & Burlington Railroad Company, the said contract was submitted to and approved by said directors, and the president and secretary of said Toledo, Delphos & Burlington Railroad Company, were authorized to sign the said contract.
    “ Fourth. — That for the purpose of ratifying and perfecting said contract of sale and purchase, a meeting of the stockholders of the said Toledo & Grand Rapids Railroad Company, and of the said Toledo, Delphos & Burlington Railroad Company, was called by the directors of each of said companies on thirty (30) days’ notice to each stockholder at such time' and place, and in such manner as is provided for the annual meetings of the said companies, and the holder of at least two-thirds of the stock of each of said companies in person or by proxy at each of said meetings assented to said contract of sale and purchase.
    “ Fifth. — That the said Toledo & Grand Rapids Railroad Company, at the date therein named and in pursuance of said contract, executed and delivered to the said Toledo, Delphos & Burlington Railroad Company, its certain deed, of which the following is a copy :
    
      “ ‘ Know all men by these presents, that, whereas the Toledo & Grand Rapids Railroad Company, a corporation duly incorporated under the general laws of the state of Ohio, are the owners of a road-bed and right-of-way for a railroad and other property in the county of Lucas and state of Ohio, which, from lack of means, it is unable to complete the construction of its proposed line of road thereon, and is desirous of selling the same.
    And whereas, at a meeting of the board of Directors of Toledo & Grand Rapids Railroad Company, called for the purpose, held at the office of said company, at Toledo, Ohio, on the 4th day of March, A. D. 1881, the president submitted the following proposed contract between the Toledo & Grand Rapids Railroad Company and the Toledo, Delphos & Burlington Railroad Company, to-wit:
    
      “ ‘ Contract of sale and purchase by and between the Toledo & Grand Rapids Railroad Company, a corporation incorporated under the general laws of Ohio, party of the first part, and the Toledo & Burlington Railroad Company, a corporation of the states of Ohio and Indiana, entered into under the corporate seals of the said corporations by the directors thereof.
    “ ‘ Whereas, by the laws of the state of Ohio, railroad companies owning in whole or in part road bed and right-of-way within the state of Ohio, which, from lack of means or other cause, is unable to complete the construction of its proposed line thereon, may sell, assign and transfer the same to any other company incorported under the laws of the state of Ohio, and whereas by the laws of the said state of Ohio, any railroad company may lease or purchase any part of or all of a railroad, constructed by another company, if the lines of road of such companies are continuous' and connecting and not competing, upon such terms and conditions as may be agreed upon between the companies.
    “‘Now, therefore, the Toledo & Grand Rapids Railroad Company, a corporation as aforesaid, owning a road-bed and right-of-way within the county of Lucas and the state of Ohio, which, from lack of means, is unable to complete the construction of its proposed line, and having an indebtedness of over $250,000, which it is unable to pay or arrange for, does hereby sell, transfer and assign to the Toledo, Delphos & Burlington Railroad Company, subject to the ratification and confirmation of the same by the stockholders of the said Toledo & Grand Rapids Railroad Company, all of its roadbed, right-of-way, materials for construction, machinery and all property of the said Toledo & Grand Rapids Railroad Company, including debts, dues, demands, choses in action, contracts, leases, subscriptions and local aid and property of every description, name and nature, in or to which the said Toledo & Grand- Rapids Railroad Company may possess any right or title, and all property, real and personal, and mixed, together with all rights, privileges and easements, as fully as the same now are or may- be possessed by the said Toledo & Grand Rapids Railroad Company, for the sum of $265,477.86, payable as hereinafter provided, and agrees that upon the ratification and confirmation of this contract of sale by the stockholders of the said Toledo & Grand Rapids Railroad Company, it will execute and deliver to the said Toledo," Delphos & Burlington Railroad Company, such conveyance or conveyances as shall fully vest the title to said property in the Toledo, Delphos & Burlington Railroad Company.
    “(The Toledo, Delphos & Burlington Railroad Company, a corporation as aforesaid, agrees to purchase the said roadbed, right-of-way, materials for construction, and all- properties of every description, name and nature, including debts, dues, demands, choses in action,contracts, leases, subscriptions and local aid in and to which the said Toledo & Grand Rapids Railroad Company may possess any right or title, with all of its rights, privileges and easements, subject to the ratification of such purchase by the stockholders of the said Toledo, Delphos & Burlington Railroad Company, for the sum of $265,-477.86, due to the Toledo, Delphos & Burlington Railroad, upon a note dated January 1st, 1881, made by the Toledo & Grand Rapids Railroad Company, and bearing 6 per cent, interest from date, to be part of said purchase money.
    
      “ ‘ The Toledo, Delphos & Burlington Railroad Company will further, as part of said consideration of said sale, assume and pay all the indebtedness of the Toledo & Grand Rapids Railroad Company, now existing, of every kind and nature, and further, in consideration of said sale and transfer, agrees to issue to the stockholders of the party of the first part, one share of the stock of the Toledo, Delphos & Burlington Railroad, for each and every share of the stock of the party of the first part legally held by the stockholders and surrendered to the Toledo, Delphos & Burlington Railroad Company, to the subscribers of the stock of the party of the first part, which remains unpaid, when the contracts of subscription and for local aid are fully complied with.
    ifiIn witness whereof the directors of the said Toledo & Grand Rapids Railroad Company have caused the corporate seal of said company to be hereto affixed, and this contract to be signed by the president and secretary of said company, and the directors of the Toledo, Delphos & Burlington Railroad Company have caused the corporate seal of said company to be hereto affixed and this contract to be signed by the president and secretary of said company (this contract being signed in duplicate.)
    “ (This contract was signed by the president and secretary of each company, and the corporate seal of each company was thereto affixed.)
    “ And, whereas, at said meeting of said board of directors, ^on said 4th day of March, A. D. 1881, the following resolutions were adopted:
    “ * Resolved, That whereas this company is indebted to the Toledo, Delphos & Burlington Railroad Company in the sum of |265,477.86, for which they have given their note on demand, dated January 1st, 1881, with interest at 6 per cent, per annum, are unable to raise the necessary money wherewith to pay the-same and are unable to complete their said road, therefore be it
    “ ‘ Resolved, That the contract of sale and purchase of the property, franchise, etc., of this company to the Toledo, Delphos & Burlington Railroad Company, this day submitted, be, and the same is hereby adopted, and the president and secretary of this company are directed to sign and attach the corporate seal of this company.
    “Upon the call of the roll, the following members of the board voted aye: J. M. Corse, Geo. Wm. Ballou, Jas. Irvine, "W. J. Craig, and Sam. Thomas, and, whereas, at said meeting, of said board of directors, on said 4th day of March, A. D. 1881, the following resolution was adopted:
    “ ‘ Resolved, That the contract of sale and purchase this day entered into by and between the Toledo & Grand Rapids Railroad Company, and the Toledo, Delphos & Burlington Railroad Company, be submitted to the stockholders of the Toledo & Grand Rapids Railroad Company at a meeting to be held at the general office of the Toledo, Delphos & Burlington Railroad Company at Toledo, Ohio, on April 12th, 1881, and the secretary is hereby authorized to give notice thereof by publication and printed notice to the stockholders as required by statute. And, whereas, in compliance with said resolution, a notice of a meeting of the stockholders of the said Toledo & Grand Rapids Railroad Company, was called and published in accordance with the statute in such cases made and provided in the Toledo Bee, a newspaper printed and in general circulation in the county of Lucas, and state of Ohio, in which said road bed, and right-of-way are situated, for the period of thirty days, prior to April 12th, A. L. 1881.
    
      “ And, whereas, at said meeting of the stockholders, of the said Toledo & Grand Rapids Railroad Company, held at Toledo, Ohio, at the office of said company, in pursuance of said notice, on the 12th day of April, A. I). 1881, the president of said stockholders’ meeting read and submitted to the said stockholders, a statement as to the condition of said company and the following resolution was adopted by a unanhnous vote :
    
      Resolved, That whereas the Toledo & Grand Rapids Railroad Company is the owner of a road bed and right-of-way within the county of Lucas ahd state of Ohio, which, from lack of means, it is unable to complete the construction of its proposed lines, and haying an indebtedness of over $250,000, which it is unable to pay or arrange for, be it resolved, That the said Toledo & Grand Rapids Railroad Company is unable to complete its said line of road from lack of means, and that Toledo & Grand Rapids Railroad Company will sell, assign and transfer to the Toledo, Lelphos & Burlington Railroad Company all of its road bed, right-of-way, materials for construction, machinery, and all of its property, including debts, dues, demands, choses in action, conttacts, leases, subscriptions and local aid and property of every description, name and nature, in or to which the said Toledo & Grand Rapids Railroad Company may possess any right or title, for the sum of $265,477.86 cash.
    
      “ And, whereas, at said meeting of the stockholders of said Toledo & Grand Rapids Railroad Company, on April 12th, 1881, after the adoption of said resolution, the president submitted the contract of a sale passed by the board of directors of the said Toledo & Grand Rapids Railroad Company on March 4th, A. L. 1881, heretofore recited, for adoption and ratification of the same by the stockholders, by the votes thereof, and there was voted at said meeting by said stockholders five hundred and sixty-four shares of said stock of said Toledo & Grand Rapids Railroad Company, of .which number five hundred and sixty-four shares of stock of said Toledo & Grand Rapids Railroad Company, which were more than two thirds of the capital stock of said Company, represented at said meeting were cast for the ratification and confirmation of said contract of sale so entered into between the board of directors of the Toledo & Grand Rapids Railroad Company and the Toledo, Delphos & Burlington Railroad Company, and for the sale of said road bed, right-of-way and appurtenances of said Toledo & Grand Rapids Railroad Company to the said Toledo, Delphos & Burlington Railroad Company, and, whereas, at the said meeting of said stockholders of the Toledo & Grand Rapids Railroad Company, .after the casting of said votes the following resolution was adopted:
    
      Resolved, That the president of the Toledo & Grand Rapids Railroad Company is hereby directed to execute, and deliver to the Toledo, Delphos^ & Burlington Railroad Company a good and sufficient deed for the road bed, right of way, materials, machinery and all other railroad and other property of the Toledo & Grand Rapids Railroad Company, so as to fully and completely vest the title in the Toledo, Delphos & Burlington Railroad Company.
    Now, therefore, the Toledo & Grand Rapids Railroad Company, in pursuance of said various resolutions of said board of directors and said resolutions and contract of said stockholders and in consideration of $265,477.86 paid and to be paid by the Toledo, Delphos & Burlington Railroad Company as heretofore provided, does hereby bargain, sell and convey, and by these presents have bargained, sold and conveyed unto the Toledo, Delphos & Burlington Railroad Company the following property, situate in the county of Lucas, and state of Ohio, all of its road bed, right-of-way, Aaterials for construction, machinery and all property of the said Toledo & Grand Rapids Railroad Company, including debts, dues, demands, choses in action, contracts, leases, subscriptions and local aid and property of every description, name and nature, in or to which the said Toledo & Grand Rapids Railroad Company may possess any right or title, and all property, real and personal and mixed, together with all rights, privileges and easements, as fully as the same now are or may be possessed by said Toledo & Grand Eapids Eailroad Company, to have and to hold the same unto the only proper use of said Toledo,.Delphos & Burlington Eailroad Company and its successors and assigns forever.
    In witness whereof, the Toledo & Grand Eapids Eailroad Company, by John M. Corse, its president, duly authorized thereunto, has hereunto set its hand and corporate seal, attested by H. Z. Eaton, secretary, this 12th day of April, A. D. 1881.’”
    (This deed was duly signed, sealed and acknowledged.)
    
      “ Sixth. — Defendant signed and delivered the subscription set forth in plaintiff’s petition and amended petition as there alleged, and agreed to pay the money therein named on the condition therein set forth.
    
      “Seventh. — That said Toledo & Grand Eapids Eailroad Company and plaintiff, before the commencement of this action, performed all the conditions in said contract of subscription called for on their part, and prior to the commencement of this action made demand of defendant for the amount due on said subscription, and in open court tendered to defendant the stock called foi; by said subscription.
    
      “ Eighth. — That the said subscription is a part of the personal property included and described in the said deed.
    “ Ninth. — That the plaintiff, at the time of the commencement of said action, was controlling and managing the several lines of railway described in the petition and amended petition, and since the said deed was delivered has held the possession of said The Toledo & Grand Eapids Eailroad, the said subscription and other property, real and personal, described in said deed.
    
      “ Tenth. — That the above special finding of facts and conclusions of law were made and stated by the court at the request of the plaintiff.” the deed above recited was void for all purposes; and ad-
    And thereupon the court found as a conclusion of law, that judged that the defendant go hence without day, and recover fi;om the plaintiff his costs expended.
    To which conclusion of law and judgment, the plaintiff then and there excepted; and moved the court for judgment in its favor on the special findings, which motion the court overruled, and to which ruling the plaintiff excepted.
    The court thereupon ordered the finding, judgment and exceptions to be made a part of the record, which was done accordingly.
    The circuit court, on petition in error by the plaintiff, affirmed the judgment of the court of common pleas; and the Toledo, Cincinnati and St. Louis Railroad Company, plaintiff in error, now asks that the judgment of the circuit court, and judgment of the court of common pleas, may be reversed.
    
      Harvey Scribner, of Scribner, Hurd & Scribner, for plaintiff in error:
    1. Does the deed set out in the record purport to convey the franchise of the The Toledo & Grand Rapids Railroad Company as a corporation, and if it does, is the deed therefore void as to the subscription to stock ?
    2. Did the Toledo & Grand Rapids Railroad Company have legal authority to sell its stock subscriptions ?
    Counsel for the defense practically abandoned the first proposition in their argument before the circuit court. I will, therefore, simply submit the authorities holding, first, that the corporate franchise can be transferred, and, second, if it cannot, including it with other property to be conveyed does not invalidate the deed as to that property that is legally capable of being transferred. Morgan v. Lousiana, 93 U. S. 217; State v. Sherman, 22 Ohio St. 428; Knox County v. Nichols, 14 Ohio St. 260; Pullan v. Cin. & C. A. L. R. Co., 4 Biss. 35; Pierce v. Emery, 32 N. H. 484; Joy v. Jackson & M. Plank Road Co., 11 Mich. 172, 173; Eldridge v. Smith, 34 Vt. 484; Pierce, R. R. 496, 503; Morawetz Priv. Corp. 542.
    The Toledo & Grand Rapids Railroad Company had legal authority to sell and transfer its stock subscriptions. Section 3289, Revised Statutes; Downie v. Hoover, 12 Wis. 174; Morris v. Cheney, 51 Ill. 451; Smith v. Hollett, 34 Ind. 519.
    Sections 3300 to 3304 and 3409 to 3414, inclusive, of the Revised Statutes, by a fair construction, authorize the transfer of not only the railroad, to-wit, the iron and road-bed, but also its rolling-stock, subscriptions and other property connected therewith.
    Section 3302, providing for the relief of stockholders refusing assent to the sale, was in force at the date of its subscription, and were available to the defendants. Their contract of subscription must be construed as having been made with reference to this act, by which they are bound as fully as if its provisions had been copied into their contract of subscription. Mansfield, Coldw. & L. M. R. Co. v. Brown, 26 Ohio St. 223.
    Unquestionably the statute contemplated the sale of the entire railroad property, real and personal. Certainly it had in view the stock and stock subscriptions; otherwise why the special provisions for the protection of such stockholders (which includes subscribers to stock) as should refuse their assent to the sale.
    The method provided by statute for carrying a stockholder in an ordinary railway corporation into a consolidated company, subject to the right of the stockholder to withdraw upon certain conditions .if he shall so elect, is not limited to an actual stockholder as contradistinguished from a stock subscriber. Mansfield, Coldw. & L. M. R. Co. v. Brown, 26 Ohio St. 223; Mansfield, Coldw. & L. M. R. Co. v. Stout, 26 Ohio St. 241.
    
      James E. Tyler, for defendant in error.
    The Toledo & Grand Rapids Railroad, to which the subcription was made, never was a party to any contract of consolidation. The Toledo, Dclphos & Burlington Railroad was the corporate name of the first consolidated company, and the plaintiff, by consolidation, is the successor of that company. It follows, then, that whatever rights, if any, the Toledo, Delphos & Burlington Company obtained against the defendant, belonged to the plaintiff, and nothing more.
    The statute providing for consolidation provides how a stockholder may be transferred, with all his rights and liabilities as such, to the succeeding company, Revised Statutes sections 3379 to 3384, inclusive. But under section 3388 such stockholder, if he refuse to be transferred to the new organization, may withdraw and be paid the value of his stock.
    There is little doubt that if the statute regulating consolidation of railroad companies had been invoked and followed, and the Toledo & Grand Rapids Company made a party thereto, the defendant, if he were in the situation of a stockholder, would be bound, if notified thereof, by the contracts of consoldiation, and their legal consequences. But such is not the case at bar. Here a sale of the Toledo & Grand Rapids Railroad was attempted under sections 3296, 3298, 3299 et seq., Revised Statutes, and mot a consolidation.
    
    Under the conditions of the contract of subscription the Toledo & Grand Rapids Company could at no time have called on the defendant for an installment upon his contract, or enforced its payment. It was never a chose in action in the hands of the Toledo & Grand Rapids Company. That company never had anything in the contract it could sell or transfer. Philadelphia & W. C. R. Co. v. Hickman, 28 Pa. St. 318; Jewett v. Lawrenceburgh & U. M. R. Co., 10 Ind. 539; Evansville, I. & C. S. L. R. Co. v. Shearer, 10 Ind. 244; Shearer v. E. I. & C. S. L. R. Co., 12 Ind. 452; McMillan v. Maysville & L. R. Co., 15 B. Mon. 218; Chamberlain v. Painesville & H. R. Co., 15 Ohio St. 225; Ashtabula & N. L. R. Co. v. Smith, 15 Ohio St. 328.
    The statute authorizes only the lease or purchase of a road already constructed, not merely in process of construction. Section 3380. Mansfield, Coldw. & L. M. R. Co. v. Stout, 26 Ohio St. 258.
    No one disputes the statutory right of a railroad comjsany to “ acquire and convey such real and personal property as may be necessary to carry into effect the object of the corporation but this property, real or personal, must be acquired strictly in the manner prescribed by statute as applied to the contract with the subscriber. It cannot be unlawfully appropriated.
    The mere fact that a deed has been made by the president of the Toledo & Grand Rapids Railroad Company to, and accepted by, the president of the Toledo, Delphos & Burlington Railroad Company is of no moment unless made strictly in accordance with the statutes. The president cannot sell even the ties of a railroad unless by virtue of statutory authority given him in accordance with law. Walworth County Bank v. Farm. L. & T. Co., 14 Wis. 325; Kean v. Johnson, 1 Stockton, 401; Upson County R. Co. v. Sharman, 37 Ga. 644.
    We are not obliged to 'accept any stock except that which we subscribed for, and when one subscribes to, the stock of an organized corporation, the same rules govern as in other contracts, and the company has no power to change or alter the character of stock subscribed for. James v. C., H. & D. R. Co., 6 Am. L. Reg. (old. ser.) 718; James v. C. H. & D. R. Co., 2 Dis. 261, 277, 278; Cov. & Cin. Bridge Co. v. Sargent, 1 Cin. Sup. Court Rep. 354.
    Again, “as to conditions precedent we see no objection to a subscriber inserting such as he may choose.” “ As to whether conditions subsequent are not to be considered mere stipulations — quaere.” Chamberlain v. Painesville & H. R. Co., 15 Ohio St. 225.
   Dickman, J.

The Toledo, Delphos & Burlington Railroad Company, having become incorporated with the Toledo, Cincinnati & St. Louis Railroad Company by consolidation, all the rights, privileges and franchises, and all the property,, real, personal and mixed, of the former company, were transferred to and vested in the latter company. But it is claimed, that before the consolidation, the Toledo, Delphos & Burlington Railroad Company acquired by purchase ail the road-bed, right-of-way, material for construction, and all property of every description, of the Toledo & Grand Rapids Railroad Company — including debts, dues, demands, dioses in action, contracts, and subscriptions to capital stock — in or to which the last-named company, at the time of such purchase, had any right or title. Whatever right of action, therefore, if any, the plaintiff may have against George P. Hinsdale, the defendant, must be derived through the Toledo, Delphos & Burlington Railroad Company, by virtue of the consolidation; and it is evident, that if no right of action was acquired by that company against the defendant, on his subscription to the stock of the Toledo & Grand Rapids Railroad Company, the plaintiff can maintain no action thereon.

. We are led then at the outset to inquire, whether the deed from the Toledo & Grand Rapids Railroad Company to the Toledo, Delphos <& Burlington Railroad Company, operated to vest in the grantee the ownership of the defendant’s unpaid contract of subscription, and authorized the purchasing company to make absolute the liability of the subscriber, by completing the unfinished road from Toledo to Grand Rapids. By the contract of subscription, the defendant agreed to take and pay for thirty shares of the capital stock of the Toledo & Grand Rapids Railroad Company at fifty dollars per share, payable on the order of the directors in installments of not more than ten per cent, every thirty days, to be paid when the road is completed,” the road to be a narrow guage railroad, and to cross the river at Grand Rapids.

The subscription was conditional, a condition precedent to the subscriber’s liability being the completion of the road.

The subscription was to be paid when the road is completed ” — when put in a condition for regular business. Tower v. Detroit, Lansing & Lake Michigan R. R. Co., 34 Mich. 328. Until the road was completed, the subscription could not become absolute, and take full effect as a stock subscription. It was only an offer to become a shareholder, and until the condition should be performed, the relation of the subscriber to the company as a stockholder would not arise. “ The performance of the stipulated conditions,” says Morawetz, “ is necessary to an acceptance of the offer to become a shareholder; and before the conditions have been performed the subscriber does not,,by virtue of his subscription, become a member of the company at all. It follows that he does not, until then, become entitled to the privileges nor subject to any of the liabilities attaching to the status of a shareholder.” Private Corporations, § 78. It is not insisted that there is any objection to the subscriber inserting such conditions precedent as he may choose; and by statute, the directors of a railroad company may receive subscriptions to its capital stock, dependent upon the completion of the whole or any part of its road.”

Not being able, from lack of means, to perform the condition of the defendant’s subscription, by completing the construction of its proposed line of road, the Toledo & Grand Rapids Company, at the time of the sale of its road-bed and other property, had no claim against the defendant which it could then enforce; and by the sale,the company put it beyond its own power ever to complete its road, and render the defendant liable to it on his subscription. The company still retained its corporate capacity, character and franchise, but its road-bed, right of-way, and material for construction, being sold and conveyed in payment of an indebtedness to the grantee of over $265,000, any certificate of stock issued by it would have been of questionable value.

It is contended, however, that because of its inability to finish its road, the company was authorized to sell the same to another corporation that could complete it, and by thus performing the condition of the defendant’s subscription, fix' his liability. Subscriptions, it is true, are expressly embraced in the terms of the deed of transfer, but in the statutes authorizing the purchase of railroads, and the sale of road-beds, rights-of-way and other railroad property, we do not find authority conferred upon one company to sell and transfer to another company its conditional stock subscriptions.

But authority is invoked outside the statute, and it is said that power in a railroad company to contract, implies the power to sell and transfer obligations and securities taken by it in the prosecution of the object of its creation; and that such power to sell and transfer is an attribute of its corporate capacity, suitable to its purpose and business, and is believed to exist independent of statutory authority. When the, Toledo, Delphos & Burlington Company' made the purchase from the Toledo & Grand Rapids Company, no liability of the defendant on his conditional subscription had matured; there was no legal debt due from him to the grantor, to be sold and transferred to the purchasing company. But without regard tó that consideration, it is a sound rule, that in the absence of express authority from the state, a railroad company cannot make a valid sale of its road or of its property essential to the operation or construction of its road, for the purpose of delegating the performance of its public duties to another company. And in Thomas v. Railroad Company, 101 U. S. 71, 82, Miller, J., says: “We take the general doctrine to be in this country, though there may be exceptional cases and some authorities to the contrary, that the powers of corporations organized under legislative statutes are such and such only as those statutes confer; that the charter of a corporation is the measure of its powers, and that the enumeration of those powers implies the exclusion of all others.” The question therefore presents itself, to what extent the authority of a railroad corporation to sell and transfer its conditional stock subscriptions, may be found in the statutes governing the case under consideration.

The statutory grant of authority for the purchase of a railroad, and for sale and transfer of the road-bed, right-of-way, and material owned by a company unable, through lack of means,-to complete the construction of its line of road, is found in sections 3300 and 3409 of the Revised Statutes. In determining whether under those sections, a railroad company has legal power and authority to sell and transfer to another railroad corporation, its contracts of subscription that are dependent on an unperformed condition precedent, if we look at the actual powers and purposes of the grant, it will, we think, be apparent that the power asserted is not incident to those granted, and not necessary to give effect thereto.

Section 3300 provides that “ any company may lease or purchase any part or all of a railroad constructed by another company, if the lines of road of such companies are continuous or connected, and not competing, upon such terms and conditions as may be agreed upon between the companies.” The railroad to be sold must be constructed, finished, completed. The Toledo & Grand Rapids Railroad, it is conceded, was not completed when sold, but was only in process of construction. The section neither expressly nor by implication provides for the purchase of any other property except a constructed railroad. In perfecting the purchase, it is provided by sections immediately following, that there shall be a meeting of stockholders of each of the companies, to signify their assent to the purchase; and any stockholder who refuses his assent, may be entitled to receive from the purchaser the average market value of his stock, on the surrender of the same. The language of the several sections refers in unequivocal terms to the purchase of a railroad, as well known and defined ; but we do not see that the authority to make such a purchase carries with it, as a necessary incident, authority to purchase conditional stock subscriptions. Due care is taken to recognize and guard the rights of stockholders, but under section 3298 of the Revised Statutes, “ no subscriber to the stock shall be entitled to any of the privileges of a stockholder until his subscription is fully paid, nor shall he, for any purpose, be deemed a stockholder until the happening of the contingency upon which the installments on his subscription are made dependent.”

Erom the language of the deed to the Toledo, Delphos & Burlington Company, it is to be inferred that it was the design of the grantor to sell its road bed and other property, more especially under the enabling provisions of section 3409 of the Revised Statutes. The deed sets forth that the company, from lack of means, is unable to complete the construction of its .proposed line of road, and is desirous of selling the same. Section 3409 reads as follows :

A company, owning in whole or in part any road-bed and right-of-way for a railroad within this state, including those acquired by purchase at judicial sale, which, from lack of means, or other cause, is unable to complete the construction of its proposed line of road thereon, may sell, assign, and transfer the same, or any part thereof, to any other company incorporated under the laws of this state, with authority to construct and operate a railroad over the same route, or any part thereof, which transfer shall include all work done upon such line of road, together with all material furnished therefor, not exempted by the terms of the grant, with all rights, privileges and easements, as fully as the same are or may be possessed by the company making the same, and shall, to the same extent, vest the title of and the right to enjoy the same in such grantee.” The four succeeding sections provide for the execution of the deed of transfer, in the manner provided by law for the conveyance of real estate; for a meeting of stockholders, and their ratification of the transfer; and for vesting in the grantee the title to the property transferred, together with the right to use, occupy and enjoy the same for the construction, maintenance and operation of .a railroad thereon.

According to the obvious meaning of these statutory provisions, there may be a sale and transfer of the road-bed and right-of-way, including work done upon and material furnished for the line of road, with all rights, privileges and easements strictly and directly connected with it, but not of such a contract of subscription as that made by the defendant. The words of the statute will apply rather to a conveyance of realty than to a transfer of other kinds of property. The title to the property sold is made to pass, with the right to use the property for the construction of a railroad thereon,” plainly indicating, that it is the road-bed and right-of-way for a railroad, of which a sale is contemplated, and not of conditional stock subscriptions. In authorizing and perfecting a sale under the statute of an unfinished road, it is observable that only those persons are consulted whose interests are designed to be embraced in the transfer, namely, stockholders in the legal sense, and not mere conditional subscribers to stock.

As we do not discover in the statute regulating the purchase of a constructed or completed railroad, or the sale of one unfinished, authority to sell and transfer conditional stock subscriptions, so, we find no provision that empowers a purchasing company to perform the conditions stipulated in the contract of subscriptions to capital stock, and, by so doing, fix and make absolute the liability of subscribers. If the Toledo, Delphos & Burlington Company succeeded to the interest of the Toledo & Grand Rapids Company in the subscription contract between itself and the defendant, it must have done so in a way, and by means prescribed by the statute for the sale and not for the consolidation of railroads. Arguments drawn from the statutes of consolidation, lose much of their force when applied to the case under consideration. It is true, that it has been held in Mansfield, Coldwater and Lake Michigan R. R. Co. v. Stout, 26 Ohio St. 241, that when railroad companies consolidate under the act of 1856, the new corporation thereby created may perform the conditions named in subscriptions to the capital stock of the original companies, and require the subsci'ibers to pay their installments. But that was a case of two roads consolidated, in which the new company, by virtue of the provisions of the statute, acquired the ownership and control of stock subscriptions, and all the property of every description, of each of the old companies. By section 3384, of the Revised Statutes, when the consolidation is consummated, “ all and singular, the rights, privileges and franchises of each of the companies, and all the property, real, personal and mixed, and debts due on account of subscriptions of stock, or other things in action, shall be deemed to be transferred to and vested in such new company, without further act or deed.” And as by the statute, all debts, liabilities, and duties of either of the consolidating companies thenceforth attach to the new company, it is proper that the new company should succeed to stock subscriptions, choses in action, and other property as a fund from which to discharge the obligations of the respective companies. But a company purchasing the road-bed and right-of-way for a railroad, owned by another company, does not thereby, in the absence of special agreement, assume the debts of the vendor, and does not require the assets of the latter with which to pay such debts.

When a railroad company sells its road-bed and right-of-way, because unable, from want of means, or other cause, to complete the construction of its proposed line of road thereon, no transfer, as enacted by section 3412 of the Revised Statutes, can be made against the dissent of any stockholder, expressly declared and filed in writing, without a guaranty from the grantee company, that it will cause to be issued to him certificates of its capital stock, equal in amount to his pro rata interest as a stockholder of the grantor, in the amount of which the property is sold. The defendant had no option to dissent or acquiesce in the sale. He was not a legal stockholder, and could have had no voice or standing in the meeting of stockholders, called by the president of the company to deliberate and pass upon the proposed sale ; and if he had refused his assent to the sale and transfer, he was not in a position to compel the grantee company to issue to him ft o rata certificates of its capital stock. Nor, as a conditional subscriber only, and without any of the privileges of a stockholder, was he in a position, upon a consummation of the sale and payment of any purchase-money, to demand a proportionate share of the amount realized. If the defendant did noi dissent, or had not the right to enter an effective dissent, the sale would progress to its consummation; but with no status as a stockholder in the Toledo & Grand Rapids. Railroad Company, and with no' statutory right to have stock assigned to him in the Toledo, Delphos & Burlington Railroad Company, we do not think it is within the meaning of the statute permitting the sale of the road-bed and right-of-way of an unfinished road, that the latter company, or the plaintiff by virtue of consolidation, should have a right of action against the defendant, on his unpaid contract of subscription. The sale and transfer of conditional stock subscriptions, do not therefore, as we think, come within the purview of section 84091 of the Revised Statutes; and in accordance with the aforegoing considerations, we have reached the conclusion that the judgments of the circuit court and court of common pleas should be affirmed.

Judgment accordingly,  