Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/555

 CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 522a. It has, however, been held that a subscription, made on a blank paper on condition that the paper should not be attached to the articles of association until they should have been pre- sented to the subscriber for approval, does not bind him, if attached without his consent. 1 § 522. The word " non-assessable " upon a stock certificate does not impair the obligation, created by the accept- ance and holding of the certificate, to pay the amount g^bie!" due upon the shares. At most, it is in legal effect a stipulation against liability from further assessments or taxa- tion after the entire subscription of one hundred per cent, shall have been paid. And representations by the agent of the corporation as to the non-assessability of the shares beyond a certain percentage of their value, constitute no defence to an action against the holder when he has himself failed to use due diligence to ascertain the truth or falsity of such representa- tions. 2 § 522a. Some recent cases adhere to the rule that a cor- poration cannot issue its shares below par, and con- i ssue f elude itself and its creditors from suing for the pa r ck ^i^ balance. For instance, in one case a provision that nus " stock. on pa} T ment of forty per cent, of the face of the subscription the stock should be issued to the subscriber " as full paid stock " was held not to prevent the corporation from recover- ing ; 3 and in another case a stipulation in the original sub- scription contract that the subscribers in addition to the stock should be given bonds of the corporation to a like amount, was held void. 4 nellsville GassCoal, etc., Co., 69 Pa. St. 334; Hawkins v. Citizens In v. Co., 38 Or. 544. 1 Bucher v. Dillsburg, etc., R. R. Co., 76 Pa. St. 306. Ace. Ottawa, etc., R. R. Co. v. Hall, 1 111. App. 012; Great West. Tel. Co. v. Loewenthal, 154 111. 261. But in such a ense it would seem that the subscriber would be bound, unless he took im- mediate steps to have his name re- moved. Compare §§ 523 et seq. 2 Upton v. Tribilcock, 91 U. S. 45. See, also, Hall v. Selma, etc., R. R., Co., 6 Ala. 741; Great Western Tel. Co. v. Gray, 122 111. 630; Martin v. South Salem Land Co., 94 Va. 28. 3 Great West. Tel. Co. v. Gray, 122 111. 630. The corporation was in the hands of a receiver. A.cc. Bates v. Great West. Tel. Co., 134 111. 536; Coleman v. Howe, 154 111. 458. See, also, Garrett v. Kansas City C'l Mg. Co., 113 Mo. 330; cf. New Haven Trust Co. v. Gaffney, 73 Conn. 480. But see, Dickerman v. Northern Trust Co., 176 U. S. 181. 4 Morrow v. Iron Co., 87 Tenn. 262. 535