Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/87

 CHAP. VI.] AGREEMENTS TO TAKE STOCK. [§92. itself," without any further consideration ; for the rule of law requiring a consideration is but a rule of law which like other rules may be modified by statute or impliedly abrogated in respect of certain contracts. 1 § 92. aen7^owever7the agreemenTtotakeshares is made simply by the subscribers among themselves, then, 2 taking for granted that the parties to the agreement tion? ldera "/a^w>*' are capable of contracting, and that the proposed ob- ^2^»~ jects of the contemplated corporation are not illegal, the ques-$ &£ _ tion whether the agreement is binding resolves itself into a question as to the mutual sufficiency of consideration between i Union Turnpike Co. v. Jenkins, 1 Caines Cas. 381; Hamilton and Deansville Plankroad Co. v. Rice, 7 Barb. 157. In the former of these cases Radcliffe, J., said, giving the opinion of the court at p. 389: " The subscription was taken by commis- sioners who were authorized to re- ceive it, and in the form prescribed by the act. That form contains an absolute promise to pay the money to the president, directors, and com- pany. On the one hand, the inter- est of the company in selling the shares, and the public advantage to be derived from the success of the institution; and on the other, the expected profits to accrue from the stock, were sufficient considerations to uphold the promise. By force of the act itself, also, it must be con- sidered as good. The legislature also must have intended that it should be obligatory, for else the formal manner in which it was pre- scribed to be taken would be sense- less and nugatory." This case was reversed in Jenkins v. Union Turn- pike Co., 1 Caines Cas. in Error, 386, mainly on the ground that the terms of the statute had not been complied with. See, also, Selma and Tennes- see Railroad Co. v. Tipton, 5 Ala. 787, 809; Thorp v. Woodhull, 1 Sand. Ch. 411; Danbury and Norwalk R. R. Co. v. Wilson, 22 Conn. 435; and opinion of Bowie, C. J., in Taggart v. Western Maryland R. R. Co., 24 Md. 563. In Angell and Ames on Corp., §527, it is said: "It seems that the criterion of the liability of a subscriber to stock in a corpora- tion is whether any act has been done by which the corporation has been forced to receive the sub- scriber." On the other hand, where signing a subscription paper is not an essen- tial part of the machinery devised by the legislature for forming a corpo- ration, it has been held that signing such a paper imposes no obligation on the subscriber which the corpora- tion can enforce. Troy and Boston R. R. Co. v. Tibbits, 18 Barb. 297; Same v. Warren, ib. 310; Sedalia W. & S. R. Co. b. Wilkerson, 83 Mo. 235; see Erie and N. Y. City R. R. Co. v. Owen, 32 Barb. 616; Dorris v. Swee- ney, 64 Barb. 636; S. C, 60 N. Y. 463; compare Auburn Bolt Works v. Schultz, 143 Pa. St. 257; Muncy Co. v. Green, 143 Pa. St. 269. But see §§ 107-109. As to the allotment by commis- sioners, see Crocker v. Crane, 21 Wend. 211; Walker v. Devereux, 4 Paige, 229. 67