Page:Federal Reporter, 1st Series, Volume 10.djvu/443

 FLAGG V. MANHATTAN EY. CO. ' 431 �no coiitract or agreement or guaranty of any kind, but only a state- ment that the Manhattan bas agreed to pay to the Metropolitan an amount equal to 10 per cent, per annum on the capital stock of the Metropolitan; that is to say, on the $6,500,000, payable quarterly, cominencing January 1, 1880. Thia was the interpretation put at the time on the agreement of the Manhattan by the Metropolitan, and aceepted by each stockholder of the Metropolitan when he took his certificate. If any stockholder was entitled, on request to the Manhattan, to a guaranty of any kind executed by it on his certificate of stock, he waived his right to it. But, if he had asked for and received it, it would have been "a guaranty to the above effect," being a repetition of the agreement to make the quarterly payments to the Metropolitan ; that is, an agreement to do what the memorandum states that the Manhattan had agreed to do. This would not have been any more of a oontract between the Manhattan and the stock- holder, or between the Metropolitan and the stockholder, than now exists. �2. The case, therefore, is not one of any vested right in the stock- holders of the Metropolitan to the 10 per cent, payments, but it depends on the general power of the directors of a corporation to make and modify its contracts. That power is well established in this state. Hoyt v. Thompson' $ Ex'r, 19 N. Y. 207, 216. Nor can the stoakholders control that power. McCullough v. Moss, 5 Denio, 666, 575. No statute or authority is referred to which makes it necessary to the validity of the agreements of October 22d that they should have been approved by any one or more stockholders. �3. The leases and the tripartite agreement and the agreements of October 22d were made under the authority of the act. of April 23, 1839, (Laws of New York, 1839. c. 218, p. 195,) which provides that "it shall be lawful hereafter for any railroad corporation to contract with any other railroad corporation for the use of their respective roads, and thereafter to use the same in such manner as may be pre- scribed in such contract." ihere is nothing to impeach the validity of that statute. The instruments referred to are contracts by the Manhattan and the other two companies for the use by the former of the roads of the latter, on terms satisfactory to each of the latter, as determihed by the votes of their boards of directors. �4. It is urged that the question should be considered as if the Metropolitan, on the f allure of the Manhattan to fulul its covenants in the lease, had re-entered, and as if the question were as to a new lease, with terms such as now obtainin the lease as modified. In this ��� �