Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/790

 § 779.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XV. the further right, that each shall bear a proportionate share of whatever liability may arise out of the corporate enterprise. Secondly, those legal relations which subsist directly between the successive holders of the same shares of stock, or between persons possessing rights in the same shares, legal relations which have no reference to the rest of the shareholders, and do not depend primarily on a relationship sustained towards the corporation. § 778. The rights and liabilities constituting the legal re- lations of the first class are as a usual thing enforceable by individual shareholders against each other only after some de- fault or failure to act on the part of the corporate manage- ment, or else they come into play only on the insolvency of the corporation. But with legal relations of the second class, the corporate management has little or nothing to do. An instance of the first class is the right which each shareholder has that no other shareholder shall be released from his liabilities as such in a manner unauthorized by the corporation constitution. Instances of the second class appear in the right of the vendor or vendee of shares to have the other take the necessan' steps to complete the transfer; or in the rights which subsist be- tween a person having the life interest in certain shares and the remainder-man. § 779. It is the right of shareholders that every one of Rights of their number shall pay over to the corporate man- holders agement a value in cash or property equal to the ^lrbe^r P ar va ^ ue °f the shares subscribed for by him. 1 his propor- Consequently, eveiy agreement between a subscriber corporate and the corporate agents by which the former is not to pay the face of his subscription, is fraudulent and void as to shareholders not consenting.^ Thus, a separate agreement made on subscribing for shares, whereby the sub- scriber on surrendering his certificate of stock is to receive i See §§ 522a-522c. 2 White Mountains, etc., R. R. Co. v. Eastman, 34 N. H. 124; Graff v. Pittsburgh, etc., R. R. Co., 31 Pa. St. 489; Robinson v. Pittsburgh, etc., R. R. Co., 32 Pa. St. 334; Miller v. Hanover Junction, etc., R. C. Co., 87 Pa. St. 95; Connecticut, etc., 770 Rivers R. R. Co. v. Bailey, 24 Vt. 465, 476; Jewett v. Valley R'y Co., 34 Ohio St., 601, 609. See Bailey v. Pittsburgh, etc., Gas-Coal Co., 69 Pa. St. 3134; Wood v. Pearce, 2 Disney (Ohio), 411. Compare Buford v. Keokuk Northern Line Packet Co., 69 Mo. 611.