Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/547

 CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 515. " "Where a party makes an express promise to pay the assess- ments, he is answerable to the corporation upon such promise for all legal assessments, and may be compelled to its perform- ance by an action at law, before resorting to a sale of the shares. It is a personal undertaking beyond the terms of the charter. Where, on the other hand, he only agrees to take a specified number of shares, without promising expressly to pay assessments, then resort must first be had to a sale of the shares to pay the assessments before an action at law can be maintained. His agreement simply to take the shares is an agreement upon the faith of the charter, and by it alone is he to be governed, so far as his shares are to be affected. He takes them upon the conditions and law of the charter. They exist only by virtue of the charter, and are to be governed by the provisions therein contained." J § 515. In the absence of express provisions in the charter or enabling act regulating subscription contracts, whether an implied or express promise to pay for £on Slderar shares may be enforced by the corporation, is to be determined in accordance with the rules of the law of con- tracts. 2 In the first place, and principally, was there a con- sideration ? 3 When no consideration is expressed, a sufficient one to uphold the contract ordinarily exists in the implied counter-promise of the corporation, in accepting the subscrip- tion, to admit the subscriber to all the rights of a shareholder. 4 1 New Hampshire Central R. R. Co. v. Johnson, 30 N. H. 390, 403. 2 E. g., to an action ou a subscrip- tion contract, the infancy of the subscriber may be pleaded. Newry and Enniskillen R'y Co. v. Combe, 5 Eng. R'y Cas. 633; Dublin, etc., R'y Co. v. Black, 7 Eng. R'y Cas. 434. Compare Cork, etc., R'y Co. v. Cazenove, 10 Q. B. 935. Writing one's name in the private memoran- dum book of a person soliciting sub- scriptions, does not give that person authority to sign a stock-subscrip- tion. McClelland v. Whiteley, 15 Fed. Rep. 322. 3 An agreement by a person to act as director and to give the busi- ness of his firm to a bank, is a suf- ficient consideration to support a contract on the part of the bank to give him the requisite number of shares to qualify as a director. Rich v. State Nat. B'k, 7 Neb. 201. There is no question that there is a con- sideration for notes given to a cor- poration by a subscriber to secure payments on his shares. Chetlain v. Republic Life Ins. Co., 86 111. 220. 4 Kennebec and Portland R. R. Co. v. Jarvis, 34 Me. 360; Stokes v. Leba- non, etc., Turnpike Co., 6 Humph. (Tenn.) 241; Thigpen v. Miss. Cent. R. R. Co., 32 Miss. 347; East Tennes- 527