Belfast & Moosehead Lake Railroad v. Cottrell

Virgin, J.

The count relied on is so defective in several particulars that the plaintiffs cannot recover under it as it now stands ; but inasmuch as the case comes before us on report and the evidence was admitted without objection, the declaration can be amended if necessary ; therefore, we shall consider the case as if the declaration were sufficient.

The plaintiff corporation seeks to recover of a subscriber for two shares of its capital stock, an alleged balance between the net sum realized from a sale thereof, for non-payment of sundry assessments laid thereon, and the amount of such assessments equal in the whole to their original par value.

The defendant’s subscription-agreement “to take” the shares of stock imports no promise on his part to pay for them directly. B. & M. L. R. R. v. Moore, 60 Maine, 561. If the agreement had been absolute, its utmost effect could only constitute him a stockholder—owner of so many shares, entitling him to the rights, and. *188rendering him liable to the obligations imposed by law upon a stockholder. His subscription was to take the stock “agreeably to the conditions” therein expressed: one of which was “no assessment whatever, . . . shall be made upon any shares so as above subscribed, . . . until the full amount be secured for its completion to Newport.” This is a condition precedent; and hence before the plaintiffs can recover, it must be satisfactorily shown that it has been performed. Belfast & Moosehead L. R. R. v. Moore, sup.; Penob. & Ken. R. R. Co. v. Dunn, 39 Maine, 588.

From the phraseology adopted there, it would seem that the defendant’s subscription was made with the understanding that the road was to be located via Newport, although the language literally construed does not specifically so declare. Whether or not such a construction was really intended by the parties and should now be_given, we will not now decide. The most favorable construction for the corporation, and the one which its counsel contends for, is that it has reference to the amount of subscription rather than to the route; and should be construed to mean, that no assessment should be made, until the full amount were secured for the completion of the road “as far as Newport is from Belfast” —but to some point of intersection with the “Maine Central Hail-road.” Some of the town-subscriptions contained the additional words, “or to any junction of the Maine Central.”

As seen, the contract, independent of the charter, contains no express or implied promise to pay any sum whatever. The defendant can be holden only under his contract taken in connection with the charter. Section 5 of the charter authorizes “equal assessments from time to time on all the shares;” on non-payment after the prescribed notice, a sale of the shares at auction ; and if the shares sell for less than the assessments due thereon, “the delinquent subscriber or stockholder shall be held accountable to the corporation for the balance, with the interest and cost of sale.”

Before the defendant can “be held accountable” under this provision of the charter, a legal assessment, notice, sale, and an ascertained balance must be proved. But by the express terms of the subscription as above construed, no assessment can be made against this defendant, “until the full amount be secured for the *189completion of the road as far as Newport is from Belfast.” Has such an amount been subscribed even ? The burden of establishing this very material fact is upon the plaintiffs. The case discloses no evidence to sustain it. On the contrary the evidence is full and undisputed that the road was not built to Newport, but to Burnham, and “$150,000 to $200,000 were saved by building to Burnham instead of Newportthat the road to Burnham actually cost §950,000 — more than the aggregate of all the subscriptions, valid, invalid and conditional, the latter sum being $935,700.

Moreover, taking the estimate of the engineer, (who located and under whose direction and supervision the road was built; and which is the most favorable view in behalf of the plaintiffs that can be reasonably urged,) made and submitted to the board of directors before any assessments were voted, and rejecting the invalid and conditional subscriptions by the towns of Unity, Newport, Troy, and Detroit, and the plaintiffs signally fail.

[Engineer’s estimate, (p. 7,) $906,500

Whole subscription, (p. 22,) $935,700

Less Unity, $30,000

“ Newport, 25,000

“ Troy, 10,000

“ Detroit, 5,000

70,000

-- 865,700

Less than estimate, $40,800.]

The plaintiffs’ further proposition that the directors were the judges whether or not a sufficient sum had been subscribed, is not a reasonable one, especially if by that is meant that they decided the estimate of their engineer was too high. It is the special province of the engineer to ascertain by preliminary surveys and otherwise the approximate cost; and his report, although generally too low, is the foundation of ulterior proceedings. But no such absurdity is urged. Moreover, the proposition that the directors could bind the subscribers by deciding that the sum estimated by the engineer has been subscribed, is equally untenable. In the first place, there is no evidence in this case that any such decision was made, except the inference deduced from their vote to lay *190assessments. There was nothing to exercise their judgment upon, except figures. To decide upon the pecuniary “responsibility” of' individual subscribers, as used in the seventeenth by-law of this corporation, (as in B. & M. L. R. R. Co. v. Brooks, 60 Maine, 577,) the board of directors would be an appropriate tribunal, and as good as any; and good faith on their part in passing upon such a question, which is always one of much uncertainty, will bridge over any degree of ignorantia facti, or bad judgment short of actual fraud. But whether the aggregate amount of sundry subscription lists equals the sum estimated by the engineer is a simple mathematical question of easy solution, and not a matter requiring the judgment of a board of directors. The clerk testifies : “I footed up the amount of the subscriptions and reported the sum total to the directors. . . . I laid the sum total of the subscriptions before the directors before they acted.” If this was all that was done in the premises, (and the evidence stops here on this point,) the directors took no note of the particulars, such as the names whether of individuals or towns, or whether conditional or absolute, hence did not profess to decide.

This “sum total” included the subscriptions of towns to the amount of $70,000. That these subscriptions were invalid is so free from doubt that the fact is admitted. Being invalid they could not be considered in the aggregate.

This being fatal to the maintenance of this action, we have no occasion to consider the numerous questions raised by the defendant. Judgment for the defendant.

Appleton, C. J., Danforth, Peters and Libbey, JJ., concurred.