Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/553

 CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 520. Provisions construed not to be conditions. an insolvent corporation sues a shareholder on his subscription, it is no defence that the whole amount of the capital stock had never been subscribed for, if the shareholder, knowing this, has participated in the affairs of the company in a manner which would have been proper only on the assumption that the share- holders intended to carry on business with the stock but par- tially subscribed. 1 The obligation on the part of the corporation to perform the conditions of a subscription contract will also cease, if the subscriber himself prevents the performance. 2 § 520. At times it may be difficult to determine whether a given provision in the constitution of the corpora- tion, or in the subscription contract, constitutes a condition precedent to the enforcement of the sub- scription. The non-fulfillment, however, of that which is not a condition, is no defence to an action for calls. Thus, to a petition for a mandamus to compel the issue of county bonds in payment for railroad shares, it is no defence that the road had not been completed within the time men- tioned in the subscription contract, time not appearing to have been of its essence, and the benefits expected from the road having accrued. The court said that if injury had resulted, there might be an abatement in the shape of damages, but not an entire release. 3 In another case where a corporation in its prospectus set forth its intention to purchase ten tracts of land, and afterwards failed to purchase two of them, on ac- count of a defective title, it was held that the plaintiff could not on that account rescind his contract to purchase shares, as to permit that would be a great hardship on the other share- holders. 4 1 Stillman v. Dougherty, 44 Md. 380. See, also, Erie, etc., Plankroad Co. v. Brown, 25 Pa. St. 15(i; Craig v. Cumberland Valley State Normal School, 72 Pa. St. 46; May v. Mem- phis Branch R. R. Co., 48 Ga. 101), in which case the company did not appear to be insolvent, and sued in its own name. Compare Somerset and K. R. R. Co. v. Cushing, 45 Me. 524, 533. 2 See Upton v. Hansbrough, 3 Biss. 417, 423. Compare Gould v. Town of Oneonta, 71 N. Y. 21)8; Perkins v. Union Button-Hole, etc., Machine Co., 12 Allen, 273. 3 Kansas City, St. Jo., etc., R. R. Co. v. Alderman, 47 Mo. 349 ; see San Antonio v. Jones, 28 Tex. 19. 4 Kelsey v. Northern Light Oil Co., 45 N. Y. 505. A tender of a stock certificate is not a condition precedent to a suit on a subscrip- tion. Fulgam v. Macon, etc., R. R. 533