Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/544

 § 511.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. contract to subscribe funds for the accomplishment to take of a certain purpose, the subscriber to surrender his siares. rights as owner over the funds subscribed, but to retain some of his rights in such funds (as e. g. } to have them applied to no other purposes than the objects of incorporation J ) and acquiring through his contract certain other rights (as e. g., the right to act as a member of a corporation), which other- wise he would not have had. § 511. To constitute a person a shareholder, it is not neces- issue of sai T that a certificate of stock should have been issued no^essen- ^° him; 2 though it seems a verbal promise to take tiai. and pay for shares will not be binding, 3 unless a stock certificate has been tendered and accepted. 4 Where a sub- miums paid by the members for the insurance of their respective prop- erties, constitute a common fund devoted to the payment of any losses that may occur. Union Ins. Co. v. Hoge, 21 How. 35. '"When any person takes stock in a railroad company, he has en- tered into a contract with the com- pany that his interest shall be sub- ject to the direction and control of the proper authorities of the corpo- ration to accomplish the object for which the company was organized. He does not agree that the improve- ment to which he subscribes should be changed in its purposes and char- acter, at the will and pleasure of a majority of the stockholders, so that new responsibilities, and it may be new hazards, are added to the origi- nal undertaking." Clearwater v. Meredith, 1 Wall. 25, 40. 2 Chaffin ». Cummings, 37 Me. 76; Cusick o. Bartlett, 01 Me. 153; Beck- ett v. Houston, 32 Ind. 393; Slipher v. Earhart, 83 Ind. 173; Haynes v. Brown, 36 N. H. 545, 563; Schaeffer v. Missouri Home Ins. Co., 46 Mo. 248; Chester Glass Co. v. Dewey, 16 Mass. 94; Burr v. Wilcox, 22 X. Y. 551; Chesley v. Pierce, 32 N. H. 388, 524 402; Mitchell v. Beckman,64 Cal. 117; Pacific Nat. Bk. v. Eaton, 141 U. S. 227; Butler Univ. v. Scoonover, 114 Ind. 381; Storage Co. ». Assessors, 56 N. J. L. 389; see Thorp v. Wood- hull, 1 Sandf. Ch. (N. Y.) 411; cf. Courtright v. Deeds, 37 Iowa, 503. But see Busey v. Hooper, 35 Md. 15; Mount Sterling Coal Road Co. v. Little, 14 Bush (Ky.), 429. 3 Fanning v. Insurance Co., 37 Ohio St. 339 ; Vreeland o. New Jersey Stone Co., 29 N. J. Eq. 188. (In these cases the charters indicated that writing was essential.) Pitts- burg and Steubenville R. R. Co. v. Cazzam, 32 Pa. St. 340. A transfer cannot be established by parol. Pittsburg, etc., R. R. Co. v. Clarke, 29 Pa. St. 146. But in the cases of Colfax Hotel Co. v. Lyon, 69 Iowa, 683; Bullock v. Turnpike Co., 85 Ky. 184, and Des Moines Bank v. Hotel Company, 88 Iowa, 4, a verbal sub- scription contract was held valid. See, also, Insurance Co. v. Wall, 105 La. 89. Shares are choses in action, and, therefore, contracts to take shares are not within the Statute of Frauds. Webb v. Baltimore, etc., R. R. Co., 77 Md. 92. 4 Upton v. Tribilcock, 91 U. S. 45.