scription, on the ground of money laid out by them for his use. But if the corporation had brought assumpsit on an express promise for the money subscribed, it could not, in that mode of suing, have been recovered.' A like case was where the members of an incorporated religious society subscribed a written agreement with the trustees of the society, by which they individually engaged to pay to the trustees the sums set opposite their respective names, for raising a salary for the minister; it was held, that this was a valid contract in law, and binding on the subscribers, and that it could not be dissolved but by mutual consent, nor cease to be obligatory until the minister ceased to render the service stipulated.

$4. To render the subscription a contract upon which an action may be maintained against any subscriber, it is plain a due consideration must appear for voluntary agreements and promises, however reasonable the expectation from them of gifts or disbursements, even to public uses, when made without consideration, are not to be enforced as contracts. A consideration can only be raised in consequence of anything yielded to the disadvantage of the promisee, or gained to the promissor. Sundry persons having subscribed, an agreement to pay certain sums respectively for erecting an academy, and the legislature having afterwards incorporated certain trustees of such academy, and in the act of incorporation provided, that all the moneys subscribed should be received and held by said trustees in trust for the academy; it was held, that the corporation could not maintain assumpsit against a subscriber, for the money by him subscribed. The decision was on the ground of want of mutuality. And whenever there has been no meeting of the persons incorporated to authorize any peculiar proposals or engagements, and before the terms are complied

Ibid. and Phillips' Limerick Academy v. Davis, 11 Mass. R. 113; Union Turnpike Co. v. Jenkins, 1 Caines (N. Y.) R. 381.

• Religious Society v. John, 7 Johns. (N. Y.) R. 112.

Phillips Limerick Academy (Trustees of) v. Davis, 11 Mass. R. 113.

with, the subscription is not a contract to be enforced in an action at law.'

2

The case of Union Turnpike Company v. Jenkins was an action of assumpsit brought by the president, directors and the company, against the defendant on two several subscriptions, for certain payments called for, pursuant to the act of incorporation, by the said president and directors. The delaration contained three counts. The first set forth the act of incorporation, the formation of the company pursuant thereto, the subscription of the defendant, the call for certain payments of seven dollars on each share, and his refusal to pay, whereby he became liable. The two remaining counts were on the several subscriptions of the defendant, as on his promissory notes. The principal ground of the motion in arrest of judgment was the alleged want of a consideration to support the promise, without which, it was insisted, the action was not sustainable. No consideration was stated on the record, and no loss or gain to either party; and one of the judges observed, that testing the conduct of the commissioners by the provisions of the act, none was to be found in the contract itself. The act required, that to constitute a stockholder, he should subscribe an engagement in the words following: "We, whose names are hereunto subscribed, do for ourselves and our legal representatives promise to pay to the president, directors, and company of the Union Turnpike Road, the sum of twentyfive dollars, for every share of stock in the said company set opposite to our respective names, in such manner and proportion, as shall be determined by the said president, directors, and company." It is also further required, that every subscriber should, at the time of subscribing, pay unto either of the commissioners the sum of ten dollars, for each share so subscribed. It was observed by the court, that the subscription and pay

'New Bedford Turnpike Co. v. Adams, 8 Mass. R. 138; Essex Turn. Co. v. Collins, 5 Ibid. 292; Wallingford Man. Co. v. Fox, 12 Vt. R. 304.

2 1 Caines (N. Y.) R. 381.

ment were both essential to the consummation of the contract. The declaration stated the subscription merely, without averring any payment or demand of the ten dollars on each share; and it was in fact admitted on the argument, that they were neither demanded nor paid. The court were at a loss, under the circumstances, to see any consideration for the promise; and observed that the legislature appear to have been apprized of the inconvenience that might arise from this source, and had provided for it, in some measure, by the last clause in the statute, which gave power to the directors, "to call for, and demand of and from the stockholders respectively, all such sums of money by them subscribed, or to be subscribed, at such times, and in such proportions as they shall see fit, under pain of forfeiture of their shares, and of all previous payments made thereon." Lewis, C. J., in concluding his opinion in the case, observed, "Suppose the speculation had been an advantageous one, and before the first call of the president and directors the stock had risen considerably in value, could not the directors with propriety have refused to consider Mr. Jenkins as a stockholder, on account of his not having made the payment required by the act, on his subscribing? I think they could. No positive benefit, then, arising from the future emoluments of the company transactions, can be considered as a consideration for the promise; and if it could, none such is stated on the record. Notwithstanding the motion to amend, it was insisted the suit was maintainable on the second and third counts. I think not. For a promise to pay on a contingency, which may, or may not happen, cannot be declared on as a note of hand. The instrument must be payable at all events."

1

§ 5. Where a charter has been obtained by means of fictitious subscriptions for part of the stock, and a fraud has been committed on a real subscriber, by which he has sustained, or by which he might sustain injury, no action can be maintain

1 And see State v. Ball, 16 Conn. R. 179.

ed against him by the corporation, for the amount of his subscription; but where such subscriber has accepted the charter, and by his own acts put it in operation, he cannot avail himself, as a defence, of the fact, that part of the stock was fictitious.1

§ 6. It must appear that the party sued was actually a subscriber. The meaning of the word "subscriber" received attention in a late case in England, in which an action was brought to recover the amount of two calls. The defendant had applied for eight shares in the intended capital of the Thames Tunnel Company, and the number of shares was set against his name, and he then gave a check for the deposit and took a receipt. He, however, never signed the contract under the act subsequently passed for incorporating the company, although a space was left opposite to his name for the purpose of his seal and signature. The court held that he was not liable; for the "subscriber," in the act, applied to those only who had stipulated to make a payment, and not merely to such as had made a payment."

§. 7. The administrator of a subscriber to a projected undertaking, deceased before the act passes for making it, cannot be sued as a subscriber, or as a proprietor of shares. And where the act indemnified executors and administrators against their cestuis que trust, if they should pay calls upon the shares of deceased persons, out of their effects, and enabled the company, if the executors had not assets, or refused to pay, to transfer the shares to others who would repay to the administrators the calls made on the shares, and pay the future calls; and if no persons would take them, then to declare the shares forfeited to the company; no action can be maintained against

1 Centre and Kish. Turnpike Co. v. M'Conaby, 16 S. & Rawle (Penn.) R. 142.

2 Thames Tunnel Co. v. Shelden, 6 B. & Cress. R. 341.

3 Wordsworth on Joint Stock Companies, Add. 163.

an administrator, though he has paid one call, for not paying the subsequent calls.' Where shares are of no value and will not be, after assessments are paid, an administrator is not at liberty to take money from the assets of the estate of a deceased member to pay assessments. But where shares are valuable, it may be his duty to pay assessments thereon and redeem them for the benefit of the estate, an assessment being a lien on the shares."

8. An action can only be brought whilst the party remains a shareholder. If he has assigned his shares before the call is made, he is not liable to be sued for it; but it is sometimes provided, that no shareholder shall dispose of his shares whilst he remains in arrear to the company. By a navigation act of Parliament, shares were declared to be vested in the subscribers, their executors and assigns, with power to the subscribers to assign their shares, and a committee to be appointed under the act were authorized to make calls on the proprietors of shares at such times as they should think fit. An original subscriber was held not liable for any call made by the committee after he had assigned. In one case, where a subscriber assigned his stock before the whole of the instalments were paid, it was held, that there was such a privity between the corporation and the assignee, that they might maintain assumpsit against him for the unpaid instalments. The liability of A., a subscriber, under the charter, and its special provisions, is not thrown upon B., to whom he transfers his stock, if before certain instalments were payable, B. transferred the stock to C., B. transferring the stock to C. in presence of the proper offi

cer.

1 Weald of Kent Canal Co. v. Robinson, 5 Taunt. R. 2801. Ripley v. Sampson, 10 Pick. (Mass.) R. 373.

3 Wordsworth on Joint Stock Companies, 321.

Huddersfield Canal Co. v. Buckley, 7 T. R. 36.

5 Bead v. Susquehannah Bridge, &c. 6 Har. & J. (Md.) R. 128. West Phil. Canal v. Innes, 3 Whart. (Penn.) R. 198. In such case the assent of the assignee is necessary, and in this case was proved by at