Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/576

 § 547.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. long as unexercised does not impliedly preclude the corpora- tion from suing for calls instead of declaring a forfeiture. 1 §547. To the validity of a forfeiture of shares it is essential that all the conditions precedent should have been strictly com- plied with. 2 A reasonable notice, which should specify the place of sale, 3 must first be given to the delinquent share- holder ; 4 and all statutory provisions, and provisions in the by- 413; Cartwright v. Dickinson, 88 Tenn. 476. But it lias been held that a stock corporation not having express power to declare a forfeiture of shares for non-payment of calls, may sue for the amount due, and on failure to collect on its judgment the whole amount, may collect the res- idue by a sale of the shares. Chase u. Railroad Co., 5 Lea (Tenn.), 415. 7 Small v. Herkimer Mfg. Co., 2 N. Y. 330. When a corporation for- feits shares, it cannot recover on a note given for a prior unpaid assess- ment. Ashton v. Burbank, 2 Dill. 435. The power to sue a shareholder, after a forfeiture, may be given by statute. Lexington, etc., R. R. Co. v. Chandler, 13 Mete. (Mass.) 311; Troy, etc., R. R. Co. v. Newton, 1 Gray, 544; Mandel v. Swan Land Co., 154 111. 177; Great Northern Ry. Co. v. Kennedy, 4 Exeh. 417; or by by- law. Cotton Mills v. Dunstan, 121 N. C. 12. 1 Delaware, etc., Navigation Com- pany v. Sansom, 1 Binn. (Pa.) 70; Freeman v. Winchester, 18 Miss. 577; Goshen Turnpike Road r. Ilurlin, 9 Johns. 217; Dutchess Cotton Manu- factory v. Davis, 14 Johns. 238; New Hampshire Central R. R. Co. v. Johnson, 30 N. H. 300; Rutland, etc., R. R. Co. v. Thrall, 35 Vt, 536; Beene v. Cahawba, etc., R. Co., 3 Ala. 660; Selma, etc., R. R. Co. v. Tipton, 5 Ala. 787; Inst one v. Frank- fort Bridge Co., 2 Bibb (Ky.), 576; Mann v. Cooke, 20 Conn. 178; Stokes v. Lebanon, etc., Turnpike Co., 6 556 Humph. (Tenn.) 241; Troy Turn- pike and R. R. Co. v. M'Chesney, 21 Wend. 296; Buffalo and N. Y. City R. R. Co. v. Dudley, 14 N. Y. 336; Sagory v. Dubois, 3 Sandf. Ch. (N. Y.) 466. Contra, semble, Chester Glass Co. v. Dewey, 16 Mass. 94; though the doctrine of this case is rather to the effect that there is no implied prom- ise to pay, than that any implied promise is excluded by an express power of forfeiture. See, also, Franklin Glass Co. v. Alexander, 2 N. H. 380; Giles v. Hutt, 3 Exch. 18; Richboro Dairymen's Association v. Ryan, 16 Weekly Notes (Pa.), 383. Where the charter of a railroad com- pany provides that on the failure of subscribers to pay calls, the company may sell the shares at public auction, and sue the subscriber for the bal- ance, if any, the company may sue the subscriber without making such sale. Western R. R. Co. v. Avery, 64 N. C. 491. 2 Johnson i Lyttle's Iron Agency, 46 L. J. Eq. 786; see Germantown, etc., R. R. Co. v. Fitler, 60 Pa. St. 124; Mitchell v. Vermont M'g Co., 40 N. Y. Super. Ct. 406; Eastern Plank Road Co. v. Vaughan, 20 Barb. 157; Knight's Case, L. R. 2 Ch. 321. 3 Lexington, etc., R. R. Co. v. Sta- ples, 5 Gray, 520. 4 Lewey's Island R. R. Co. v. Bol- ton, 48 Me. 451 ; Hughes v. Antietam M'f'g Co., 34 Md. 317; Matter of Long Island R. R. Co., 19 Wend. 37.