§ 1753. Sufficiency of the Demand.— Where the by-laws prescribe the manner in which notice of the call shall be given, the giving of such notice is a sufficient demand to authorize the bringing of the action.1 Where the subscription is, by its terms, payable in materials at a given place, but not at a fixed time, a resolution of the directors requiring payment of stock subscriptions in installments, is manifestly not a sufficient demand of this sort of a subscription.2

§ 1754. When Notice may be by Parol.—Where the charter of the corporation does not require a written notice of calls for stock, a verbal notice by the secretary, by order of the president, in pursuance of a resolution of the board of directors, is sufficient.3

§ 1755. Service of the Notice. Although the fact of the notice may be a condition precedent to the right of action by the corporation for the assessment, yet, in respect of the manner of giving it, the statute may be regarded as directory, so that personal notice is in fact brought home to the subscriber for the period required by the charter or statute. Thus, where the charter required publication of the notice in certain newspapers, a personal service was held good. So, where a by-law required that the notice should be served by letter through the mail, a written notice of the time and place of sale, signed by the treasurer, and delivered to the owner of the shares, or left at his dwellinghouse, and received by him as soon as he was entitled to receive it by mail, was held sufficient. On the other hand, proof that such notice was duly mailed to the subscriber makes out a prima facie case of notification under a statute which implies that he shall have notice of the call. The Supreme Court of Alabama have reasoned that generally, when the law requires notice to be given to a party, but does not specify the mode in which it shall

1 Penobscot R. Co. v. Dummer, 40 Me. 172; s. c. 63 Am. Dec. 654.

2 Ohio &c. R. Co. v. Cramer, 23 Ind. 490.

3 Smith v. Tallahassee Branch &c. Co., 30 Ala. 650. See also Crozer v. Leland, 4 Whart. (Pa.) 12.

4 Mississippi &c. R. Co. v. Gaster, 20 Ark. 455.

5 Ibid.

• Lexington &c. R. Co. v. Chandler, 13 Metc. (Mass.) 311.

Braddock v. Philadelphia &c. R. Co., 45 N. J. L. 363.

be given, personal notice must be given and proved, before any liability can be fixed on him; but that this principle does not apply to the case of a defaulting subscriber to the capital stock of an incorporated railroad company, when such personal notice is not required by the charter of the company, nor by the terms of the subscription.1

§ 1756. Notice by Publication. Many charters and statutes provide for the giving of notice of the call by publication in some newspaper for a stated period of time. Where this mode of giving notice is prescribed, it is indispensable that it should be followed, unless where the view is taken that the statute is so far directory that personal notice, which is in point of fact better than a notice by a publication which may never fall under the eye of the stockholder, is a sufficient substitute for

the statutory mode. This mode of giving notice has been held reasonable; but how this question could arise where it is the mode prescribed by the governing statute is not clear. Such a mode of giving notice has been held sufficient where the paper was published at the place of residence of the stockholder, although there may have been an irregular omission to have it published elsewhere; 5 and, it has been held by another court that, although published in a newspaper printed at the place where the corporation usually transacts its business, the like notice may be given by receivers of an insolvent corporation, appointed by the court." On the other hand, a notice in a newspaper published in a town, not the capital of the State, was held not a sufficient notice to a stockholder, who did not reside in the county in which the town was situated. It has been held that the affidavit of the publisher's clerk is sufficient evidence of the publication of a notice calling for payment of installments of stock

1 Grubbs v. Vicksburg &c. R. Co., 50 Ala. 398. See also Fisher บ. Evansville &c. R. Co., 7 Ind. 407.

2 Turnpike Co. v. Meriweather, 5 B. Mon. (Ky.) 13; Macon &c. R. Co. v. Vason, 57 Ga. 314.

8 Ante, § 1775.

4 Turnpike Co. v. Meriweather, 5 B. Mon. (Ky.) 13.

5 Dinkgrave v. Vicksburg Co., 10 La. An. 514.

6 Hall v. United States Ins. Co., 5 Gill (Md.), 484.

7 Alabama &c. R. Co. v. Rawley, 9 Fla. 508.

in a newspaper; 1 but this is clearly erroneous unless there is a statute making it evidence. Without the aid of such a statute, no ex parte affidavit is evidence in a court of justice.2

§ 1757. Notice Given in Name of Corporation before Change of Name. Where, after the making of a subscription to the capital stock of a corporation, the legislature had passed an act amending its charter, by which its powers were extended and its name was changed, it was not a good defense to an action against such subscriber for an assessment, that notice of such assessment had been communicated to him in the original name of the corporation. Gibson, C. J., said: "The mistake of the corporate name, in giving notice of the call on the stockholders for their installments, was immaterial. Notice of such a call is necessary only to subject them to the penalty of two per cent. a month for default of payment; not to found an action for the principal, which may be demanded on the foot of the call without notice of it. Here the action is for the two installments due, while the demand of the penalty is waived."

1 Andrews v. Ohio &c. R. Co., 14 Ind. 169.

2 It is well known that there are in many States statutes providing for the publication of judicial and other notices, which make the affidavit of 1358

the publisher prima facie evidence of the fact of publication.

3 Gray v. Monongahela Nav. Co., 2 Watts & S. (Pa.) 156; s. c. 37 Am. Dec. 500, 504; ante, § 289 et seq.

29. Actions by the Corporation against Share

holders for Assessments

SS1815-1841

30. Evidence in such Actions

Article I. Evidence of Corporate Existence.

§§1823-1835

SS1838-1841

S$1846-1952

§§1846-1873

Other Evidence of Membership
V. Other Points of Evidence.

S$1936-1943

31. Defenses to Actions for Assessments.

32. Limitations of Actions against Stock

§§1955-1982

§§1986-2033

CHAPTER XXVIII.

FORFEITURE OF SHARES FOR NON-PAYMENT OF ASSESSMENTS.

ART. I. POWER TO FORFEIT AND HOW EXERCISED, §§ 1762-1780. II. EFFECT OF SUCH FORFEITURES, §§ 1784-1803.

III. RELIEF AGAINST SUCH FORFEITURES, §§ 1806-1810.

SECTION

ARTICLE I. POWER TO FORFEIT AND HOW EXERCISED.

1762. Requisites of a valid forfeiture: a lawful authority and a declared intention to forfeit carried into effect.

1763. Power to forfeit must be conferred by statute.

1764. An expressed and bona fide intention to forfeit.

1765. The intention must be carried into effect formally.

1766. Power must be exercised in mode prescribed by statute: by-law when necessary.

1767. Illustration of this principle. 1768. When by-law forfeiting shares invalid.

1769. The assessments must be legal.

1770. Corporation must comply with

conditions on its part.

§ 1762. Requisites of a Valid Forfeiture: a Lawful Authority and a Declared Intention to Forfeit Carried into Effect. Three things are necessary to a valid forfeiture of shares: 1. An authority to forfeit derived from statute.1 2. An expressed intention to forfeit. 3. This intention carried into effect with due formality.3

1 See next section.

2 Post, § 1764.

3 Post, § 1765 et seq.