of nonstock corporations, such as social clubs, boards of trade, and the like, when a member has contributed and paid all that the charter or articles of association require him to pay, he cannot be compelled Indiana Toner v. Fulkerson, 125 Ind. 224, 25 N. E. 218; Redkey Citizens' Natural Gas, Light, Fuel & Petroleum Co. v. Orr, 27 Ind. App. 1, 60 N. E. 716. See also Gainey v. Gilson, 149 Ind. 58, 48 N. E. 633. Iowa. Wishard v. Hansen, 99 Iowa 307, 61 Am. St. Rep. 238, 68 N. W. 691; Spense v. Iowa Valley Const. Co., 36 Iowa 407. Kentucky. John R. Proctor Land Co. v. Cooke, 103 Ky. 96, 19 Ky. L. Rep. 1734, 44 S. W. 391. Maine. Kennebec & P. R. Co. v. Kendall, 31 Me. 470. Massachusetts. Trustees of Free Schools in South Parish in Andover v. Flint, 13 Metc. 539. Minnesota. Slette v. Larson, 125 Minn. 263, 146 N. W. 1093; Duluth Club v. MacDonald, 74 Minn., 254, 73 Am. St. Rep. 344, 76 N. W. 1128. Nebraska. Mirage Irrigation Co. v. Sturgeon, 77 Neb. 175, 108 N. W. 977; Enterprise Ditch Co. v. Moffit, 58 Neb. 642, 45 L. R. A. 647, 76 Am. St. Rep. 122, 79 N. W. 560; Omaha Law Library Ass'n v. Connell, 55 Neb. 396, 75 N. W. 837. New Hampshire. Carter, Rice & Co. v. Samuel Hano Co., 73 N. H. 588, 64 Atl. 201; Lancaster Starch Co. v. Moore, 62 N. H. 671; Ossipee Hosiery & Woolen Mfg. Co. v. Canney, 54 N. H. 295. New Jersey. Salt Lake City Nat. Bank v. Hendrickson, 40 N. J. L. 52; State v. Morristown Fire Ass'n, 23 J. L. 195; Johnson v. Tennessee N. Oil, etc., Co., 74 N. J. Eq. 32, 69 Atl. 788. v. Mason, 5 R. I. 463. Texas. Gresham v. Island City Sav. Bank, 2 Tex. Civ. App. 52, 21 S. W. 556. See San Antonio St. Ry. Co. v. Adams, 87 Tex. 125, 26 S. W. 1040. Utah. Nelson v. Keith-O'Brien Co., 32 Utah 396, 91 Pac. 30; Gary v. York Min. Co., 9 Utah 464, 35 Pac. 494. Vermont. Dewey v. St. Albans Trust Co., 57 Vt. 332. Wisconsin. Wells v. Green Bay & M. Canal Co., 90 Wis. 442, 64 N. W. 69. "At common law corporations cannot assess the holders of fully paid shares for any purpose.' Carter, Rice & Co. v. Samuel Hano Co., 73 N. H. 588, 64 Atl. 201. Unless the liability is imposed by some statute or by an express agreement, stockholders who have paid in full for their shares, in money or property, are not liable to an assessment for the purpose of reimbursing officers of the corporation for money paid by them as officers of the comJohn R. Proctor Land Co. v. pany. Cooke, 103 Ky. 96, 19 Ky. L. Rep. 1734, 44 S. W. 391. That the stockholders of a corporation are not liable for its debts unless made so by its charter, or the constitution or statutes, see § 4137, supra. As to the liability of stockholders to creditors on account of unpaid subscriptions, see § 4094 et seq., supra. to pay any further assessments, however much the additional funds may be needed.94 The power to assess paid up stock, unless otherwise conferred, cannot be given, as against dissenting stockholders, by a by-law passed by a majority of the stockholders.95 "To hold that a by-law imposing an annual assessment on stock already fully paid for is a lawful exercise of corporate power is tantamount to holding that a corporation may, by a single resolve, in the form of a by-law, put its stockholders in debt to it annually to any amount that it may see fit to specify, and all without their consent. To state such a proposition is simply to refute its legality." 96 Such a by-law may be enforceable as a contract against stockholders who agree to be bound by it, however.97 Provisions in the articles of incorporation authorizing such assessments are void without plain statutory authority therefor.98 94 Johnson Electric-Service Co. v. Detroit Chamber of Commerce, 124 Mich. 115, 82 N. W. 795; Duluth Club v. MacDonald, 74 Minn. 254, 73 Am. St. Rep. 344, 76 N. W. 1128; Omaha Law Library Ass'n v. Connell, 55 Neb. 396, 75 N. W. 837. 95 Indiana. Redkey Citizens' Natural Gas, Light, Fuel & Petroleum Co. v. Orr, 27 Ind. App. 1, 60 N. E. 716. Minnesota. Duluth Club v. MacDonald, 74 Minn. 254, 73 Am. St. Rep. 344, 76 N. W. 1128. Nebraska. Enterprise Ditch Co. v. Moffit, 58 Neb. 642, 45 L. R. A. 647, 76 Am. St. Rep. 122, 79 N. W. 560; Omaha Law Library Ass'n v. Connell, 55 Neb. 396, 75 N. W. 837. See also Mirage Irrigation Co. v. Sturgeon, 77 Neb. 175, 108 N. W. 977. New Hampshire. See Blue Mountain Forest Ass'n v. Borrowe, 71 N. H. 69, 51 Atl. 670. New York. Sullivan County Club v. Butler, 26 Misc. 306, 56 N. Y. Supp. 1. Pennsylvania. See Hibernia Fire Engine Co. v. Com., 93 Pa. St. 264. West Virginia. Roush v. Longdale Independent Tel. Co., 78 W. Va. 136, 88 S. E. 623. Compare Omaha Law Library Ass'n v. Connell, 55 Neb. 396, 75 N. W. 837, wherein it was held that the charter of a corporation, which in one article authorized cancellation of a stockholder's stock for nonpayment of dues, and in another authorized it to make by-laws consistent with the various articles, authorized a by-law imposing annual dues upon the stockholders. A provision in the by-laws of a chamber of commerce that in addition to the price of membership there shall be paid such sum as may be fixed by the board of directors, payable annually, refers merely to annual dues, and affords no ground for compelling the directors to levy an assessment on paid up stock to pay corporate creditors. Johnson Electric-Service Co. v. Detroit Chamber of Commerce, 124 Mich. 115, 82 N. W. 795. See also § 512, supra. 96 Sullivan County Club v. Butler, 26 N. Y. Misc. 306, 56 N. Y. Supp. 1. 97 See $ 4271, infra. And see generally $498, supra. 98 A provision in the articles of in corporation for the assessment of full paid common stock is not authorized by the statutes of Wisconsin and therefore is void. Central Wisconsin 4271. Power conferred by agreement or consent. The power to assess fully paid stock may be given to the corporation by agreement or consent of the stockholders,99 but to have that effect there must Trust Co. v. Barter, 194 Fed. 835, aff 'g Harris v. Northern Blue Grass Land Co., 185 Fed. 192. As to the effect of unauthorized provisions in the incorporation papers generally, see § 207, supra. 99 United States. See Harris v. Northern Blue Grass Land Co., 185 Fed. 192, aff'd Central Wisconsin Trust Co. v. Barter, 194 Fed. 835. Florida. Milton v. Bergstrom, 71 Fla. 197, 70 So. 1008. Nebraska. Mirage Irrigation Co. v. Sturgeon, 77 Neb. 175, 108 N. W. 977. New Jersey. Johnson v. Tennessee Oil, etc., Co., 75 N. J. Eq. 314, 73 Atl. 60, 74 N. J. Eq. 32, Atl. 788. New York. Weeks v. Silver Islet Consol. Mining & Lands Co., 55 N. Y. Super. Ct. 1, aff'd 120 N. Y. 620, 23 N. E. 1152. Utah. Dotson v. Hoggan, 44 Utah 295, 140 Pac. 128; Nelson v. KeithO'Brien Co., 32 Utah 396, 91 Pac. 30. M. Wisconsin. Wells v. Green Bay & Canal Co., 90 Wis. 442, 64 N. W. 69. an not There would seem no reason why assessment on full-paid stock can be made by agreement of the stockholders, and such assessments by agreement are sometimes necessary to meet the exigencies of a company. And if stockholders assent to such assessment, including the fixing of the amount, there would seem to be no legal reason why the consenting stockholder should escape liability, if the company, relying on the consent, incurs subsequent obligations. The consent to an assessment is not, on the part of the stockholder, an agreement with a creditor of the company to guarantee its debt to the creditor, but is a mutual agreement to contribute, by means of an assessment, VII Priv. Corp.-13 sums agreed on, to the company in which they are mutually interested for certain of its expenses, and these having been incurred by the company in reliance on and in connection with the consent to assessment, the stockholders consenting are liable, not to the creditor, but to the company, for reimbursement, and by assessment to the extent necessary. In such cases the promise to the company, and the request that it incur the obligations, may be proved by oral evidence and by the defendant's acts. In mutual agreements of this character, and on the strictest views of their effect, it is the general opinion that after debts or obligations have been incurred by the payee in reliance on the promises, and even where there is no pecuniary advantage to the promisor, the liability of each member for his subscription may be enforced through the common payee agreed on." Johnson v. Tennessee Oil, etc., Co., 74 N. J. Eq. 32, 69 Atl. 788. "Irrespective of statutory liability, stockholders may voluntarily assess themselves for the benefit of the corporation, and when such assessment is founded upon a valuable consideration the stockholders actually assenting thereto may render themselves liable to an execution thereon." Milton v. Bergstrom, 71 Fla. 197, 70 So. 1008. A stockholder's consent to the levying of an assessment may be expressed in the articles of incorporation, or by a subsequent agreement with the other stockholders whereby all undertake to pay a particular assessment. Dotson v. Hoggan, 44 Utah 295, 140 Pac. 128. Assessments may be levied if an agreement to such effect is indorsed on the certificates of stock. Weeks v. be an express promise by the stockholder to the corporation which must be supported by a valuable consideration. And it has been held that even conceding that the stockholders of a corporation, for the purpose of protecting its property, may enter into an agreement among themselves by which they will be bound to pay to it certain amounts subscribed by them, they cannot in any way authorize the corporation to assess the stock an agreed amount, and that the corporation cannot enforce such an agreement.2 Provisions in the by-laws as to assessments and the enforcement thereof may be binding as a contract upon those stockholders who consent to them, even though they may be void considered strictly as by-laws.3 An assignee of stock is not bound by the assent of his assignor Silver Islet Consol. Min. Co., 55 N. Y. Super. Ct. 1. But the indorsement must be such as to show an intention that assessments may be levied over and above the amount of the stock when it has been full paid. Sullivan County Club v. Butler, 26 N. Y. Misc. 306, 56 N. Y. Supp. 1. A director is bound by an assessment made by consent of all of the directors present at a meeting which he attended and authorized by provisions contained in the stock certificates when he purchased his stock. Mirage Irrigation Co. v. Sturgeon, 77 Neb. 175, 108 N. W. 977. 1 A promise without consideration will not support an action to recover an assessment. Ossipee Hosiery & Woolen Mfg. Co. v. Canney, 54 N. H. 295. See also Milton v. Bergstrom, 71 Fla. 197, 72 So. 1008. 2 Redkey Citizens' Natural Gas, Light, Fuel & Petroleum Co. v. Orr, 27 Ind. App. 1, 60 N. E. 716. 3 Provision was made by the by-laws of a corporation organized to establish a park, and not in the main for pecuniary gain, that any deficiency in the current expenses should be made up by annual assessments upon the stock, and that a failure to meet assessments should result in a charge against delinquent interests. Refer- See also Champollion v. Corbin, 71 A person who purchases full paid 1 to an assessment given after the assignment and after the corporation has notice of it.4 $4272. Power conferred by charter or statute. Liability to assessment on paid up stock may be imposed by a statute in force when the corporation is formed or by its charter.5 The National Banking 4 Atlantic Delaine Co. v. Mason, 5 R. I. 463. 5"Liability for additional assessments above the par value of the stock may be and is frequently created by statute." Redkey Citizens' Natural Gas, Light, Fuel & Petroleum Co. v. Orr, 27 Ind. App. 1, 60 N. E. 716. "Corporations may assess the holders of such stock whenever there is a statute which authorizes them to do so."" Carter, Rice & Co. v. Samuel Hano Co., 73 N. H. 588, 64 Atl. 201. For statutory provisions in various jurisdictions and decisions construing them, see: California. assessments the purpose ducting Civ. Code, Wheel & Ann. Cas. The directors may levy upon fully paid stock for of paying expenses, conbusiness, or paying debts. $231. Lum v. American ehicle Co., 165 Cal. 657, 1915 A 816, 133 Pac. 303; Green v. Abietine Medical Co., 96 Cal. 322, 31 Pac. 100; Younglove v. Steinman, 80 Cal. 375, 22 Pac. 189; Santa Cruz R. Co. v. Spreckles, 65 Cal. 193, 3 Pac. 661, 802; Browne v. San Gabriel River Rock Co., 22 Cal. App. 682, 136 Fac. 542, 544; Bottle Mining & Milling Co. v. Kern, 9 Cal. App. 527, 99 Pac. 994; Von Horst v. American Hop & Barley Co., 177 Fed. 976. The statute is permissive, and does not require the directors to levy such an assess ment for the purpose of paying cor and for the payment of any claims not otherwise provided for. Callahan v. Chilcott Ditch Co., 37 Colo. 331, 86 Pac. 123. Idaho. Assessments may be levied upon paid up stock for the purpose of paying obligations, conducting business, or paying debts. Wall v. Basin Min. Co., 16 Idaho 313, 22 L. R. A. (N. S.) 1013, 101 Pac. 733; Sparks v. Lower Payette Ditch Co., 3 Idaho 306, 29 Pac. 134. Stock in irrigation companies is subject to assessments or dues for maintenance expenses. Hall v. Eagle Rock & Willow Creek Water Co., 5 Idaho 551, 51 Pac. 110. porate debts. Lum v. American Wheel & Vehicle Co., 165 Cal. 657, Ann. Cas. 1915 A 816, 133 Pac. 303. Colorado. Irrigation companies having no income sufficient to keep their ditches or canals in repair have power to levy assessments for that purpose Maine. Under Rev. St. 1871, c. 12, the pew owners of a meetinghouse may assess the pews for the purpose of raising money to repair the meetinghouse, etc. Mayberry v. Mead, 80 Me. 27, 12 Atl. 635. Missouri. Chouteau Spring Co. v. Harris, 20 Mo. 382, where assessments were authorized by a corporate charter. New Hampshire. Corporations may assess the holders of fully paid shares to satisfy corporate claims for which the shareholders are individually. liable, whether such liability arises because the full amount of capital has not been paid in, or because the corporation or its officers have failed in some other respect to comply with the statute which limits the liability of shareholders to the loss of their stock. Carter, Rice & Co. v. Samuel Hano Co., 73 N. H. 588, 64 Atl. 201, 72 N. H. 549, 58 Atl. 243; Ossipee Hosiery & Woolen Mfg. Co. v. Canney, 54 N. H. 295. North Dakota. Under Comp. Laws |