Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/566

 § 533.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. be allowed to claim a release as long as there are other non- consenting shareholders who do not wish to be released, but desire to have the original corporate enterprise adhered to. The plain remedy in such a case is to enjoin the acceptance of the amendment ;* a step which should be immediately taken, and by those shareholders who wish the original enterprise adhered to, and wish to preserve their rights against other sub- scribers who may dissent from the change, but, rather than enjoin it, prefer a release ; as under such circumstances it would certainly be unreasonable to look to subscribers, who merely desire a release, to take the initiative in expensive litigation to enjoin a change. 2 § 533. If, however, under a power reserved to itself, the p r r state radically changes the constitution of a corpo- served to ration, it would seem that, unless the change could state to alter and be held to have been contemplated by the subscriber repea. ^ n su } 3SCr i| ) i n g j sucn altered contract could not be enforced against him; 3 for a state cannot make a contract between its citizens. Nevertheless, in order that a right to rescind result, the amendment must radically change the nature of the enterprise. For instance, it has been held in New York, that an alteration by the legislature of the charter of a plank road or railroad corporation, in pursuance of powers reserved, by changing its name, increasing its capital, and extending its road, does not discharge a subscriber from lia- bility on his subscription. 4 These were changes, however, which the shareholder might be held to have contemplated on subscribing. As the court said in Buffalo and New York City 1 Fry's Ex'r v. Lexington, etc., R. R. Co., 2 Mete. (Ky.^-314. See, also, Mississippi, etc., R. R Co. v. Cross, 20 Ark. 443; Mississippi, etc., R. R. Co. v. Caster, 24 Ark. 96. But see Thompson v. Guion, 5 Jones, Eq- (N. C.) 113. 2 Where an amendment to a char- ter is passed by the legislature, but its acceptance is enjoined by a share- holder, 'subscribers remain liable; 546 not having been injured. Rutland, etc., R. R. Co. v. Thrall, 35 Vt. 536. 3 But a shareholder (see § 502) will be estopped from objecting if he impliedly assents to the amend- ment by acting (as a director) under the amended charter. Ross v. Chi- cago, B. and Q. R. R. Co., 77 111. 134. 4 Schenectady, etc., Plank Road Co. v. Thatcher, 11 N. Y. 102; Buffalo and N. Y. City R. R. Co. v. Dudley, 14 N. Y. 33G.