Belfast & Moosehead Lake Railroad v. Cottrell
Belfast & Moosehead Lake Railroad v. Cottrell
Opinion of the Court
The count relied on is so defective in several particulars that the plaintiffs cannot recover under it as it now stands ; but inasmuch as the case comes before us on report and the evidence was admitted without objection, the declaration can be amended if necessary ; therefore, we shall consider the case as if the declaration were sufficient.
The plaintiff corporation seeks to recover of a subscriber for two shares of its capital stock, an alleged balance between the net sum realized from a sale thereof, for non-payment of sundry assessments laid thereon, and the amount of such assessments equal in the whole to their original par value.
The defendant’s subscription-agreement “to take” the shares of stock imports no promise on his part to pay for them directly. B. & M. L. R. R. v. Moore, 60 Maine, 561. If the agreement had been absolute, its utmost effect could only constitute him a stockholder—owner of so many shares, entitling him to the rights, and.
From the phraseology adopted there, it would seem that the defendant’s subscription was made with the understanding that the road was to be located via Newport, although the language literally construed does not specifically so declare. Whether or not such a construction was really intended by the parties and should now be_given, we will not now decide. The most favorable construction for the corporation, and the one which its counsel contends for, is that it has reference to the amount of subscription rather than to the route; and should be construed to mean, that no assessment should be made, until the full amount were secured for the completion of the road “as far as Newport is from Belfast” —but to some point of intersection with the “Maine Central Hail-road.” Some of the town-subscriptions contained the additional words, “or to any junction of the Maine Central.”
As seen, the contract, independent of the charter, contains no express or implied promise to pay any sum whatever. The defendant can be holden only under his contract taken in connection with the charter. Section 5 of the charter authorizes “equal assessments from time to time on all the shares;” on non-payment after the prescribed notice, a sale of the shares at auction ; and if the shares sell for less than the assessments due thereon, “the delinquent subscriber or stockholder shall be held accountable to the corporation for the balance, with the interest and cost of sale.”
Before the defendant can “be held accountable” under this provision of the charter, a legal assessment, notice, sale, and an ascertained balance must be proved. But by the express terms of the subscription as above construed, no assessment can be made against this defendant, “until the full amount be secured for the
Moreover, taking the estimate of the engineer, (who located and under whose direction and supervision the road was built; and which is the most favorable view in behalf of the plaintiffs that can be reasonably urged,) made and submitted to the board of directors before any assessments were voted, and rejecting the invalid and conditional subscriptions by the towns of Unity, Newport, Troy, and Detroit, and the plaintiffs signally fail.
[Engineer’s estimate, (p. 7,) $906,500
Whole subscription, (p. 22,) $935,700
Less Unity, $30,000
“ Newport, 25,000
“ Troy, 10,000
“ Detroit, 5,000
70,000
-- 865,700
Less than estimate, $40,800.]
The plaintiffs’ further proposition that the directors were the judges whether or not a sufficient sum had been subscribed, is not a reasonable one, especially if by that is meant that they decided the estimate of their engineer was too high. It is the special province of the engineer to ascertain by preliminary surveys and otherwise the approximate cost; and his report, although generally too low, is the foundation of ulterior proceedings. But no such absurdity is urged. Moreover, the proposition that the directors could bind the subscribers by deciding that the sum estimated by the engineer has been subscribed, is equally untenable. In the first place, there is no evidence in this case that any such decision was made, except the inference deduced from their vote to lay
This “sum total” included the subscriptions of towns to the amount of $70,000. That these subscriptions were invalid is so free from doubt that the fact is admitted. Being invalid they could not be considered in the aggregate.
This being fatal to the maintenance of this action, we have no occasion to consider the numerous questions raised by the defendant. Judgment for the defendant.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.