New Albany & Salem Railroad v. McCormick

Perkins, J.

Suit by the New Albmy and Salem Railroad Company, commenced on the 28th of September, 1855, against John Me Cormick, upon a subscription of stock as follows:

“We, the undersigned, promise to pay the New Albany/ and Salem Railroad Company, the sum of 50 dollars for *500each share of stock set opposite to our respective names, provided said railroad company shall locate said railroad through the town of Lafayette, and cross the Wabash River north of Brown street in said town. Said stock to be paid out in installments of twenty-five per centum every six months, after the location of said road through said town of Lafayette. Such location and the date thereof to be sufficiently evidenced by an order of the board*;of directors of said company accepting the following subscriptions, on the terms above named.
“Dated Lafayette, June 17,1852.
Names. Number of Shares. Amount.
John McCormick, 20 1,000 dollars.”
The complaint al ieged compliance, &c., by the company. Answer, a general denial. /
The case was submitted, upon an agreed statement of facts, to the Court. Finding and judgment for the defendant, overruling the plaintiff’s motion for a new trial. The points are all shown by the exceptions taken.
The facts agreed upon are as follows:
11 First. — The defendant, then and now1 a resident of Lafayette, Indiana, on the 17th day of June, 1852, subscribed a written agreement for twenty shares of stock, a copy of which is made a part of the amended complaint; the stock remains unpaid.
Secondly. — At the time of the signing of said agreement by the defendant, the plaintiff, under her charter, was en•gaged in the construction of a railroad from New Albany, by the way of Salem, to Michigan City.
Thirdly. — On the 14th day of July, 1852, the directors of the railroad company passed an order and entered it on their records in the words following: 'Ordered by the board, that the subscriptions of stock made at Lafayette, be and they hereby are accepted;’ but„the passage of this order was not communicated to the defendant, nor had he any knowledge thereof, until after suit brought.
Fowrthly. — The plaintiff, in the fall of 1852, located, and in the winter, spring and summer of 1853 constructed, her railroad through Lafayette, and crossed the Wabash River *501at a point three miles due north of Lafayette, and not within the town, and has ever since maintained and operated said road. No formal notice of such location or construetion was ever given defendant.
Fifthly. — The plaintiff did not at any time, tender or offer to give the defendant a certificate of stock before the trial of this cause, upon the payment of his subscription.”

1. The agreement, in this case, to cross the Wabash River north of Broivn street in Lafayette, required the company to cross that stream where a northerly line from said street would strike it. And it was not necessary to cross in the city of Lafayette unless such line struck the river within the city.

2. Conditional subscriptions of railroad stock may be valid. Clem v. The Newcastle, &c., Co., 9 Ind. R. 488.

3. On the acceptance of the subscription in this case, by the entry thereof made by the company on their record, the contract of subscription became complete and absolute, and the subscriber became a stockholder. Kentucky Mutual Ins. Co. v. Jenks, 5 Ind. R. 96.—Redf. Railw. 98.

4. It would seem that, such being the case, no notice from the company was necessary before suit brought upon the subscription. Ross v. The Lafayette, &c., Co., 6 Ind. R. 297.

5. But if notice of the location was necessary, the agreement that the kind of notice named in the contract should be sufficient, did not render invalid any other kind that might also be in itself sufficient in point of fact. Hankins v. Shoup et al. 2 Ind. R. 342. And as Me Cormick was an actual resident of Lafayette, a compactly built city of not more than 15,000 inhabitants, the constructing and operating of the road for a period of between two and three years after his subscription, before suit upon it, was sufficient notice to him, in point of fact, of the location of the road through said city. The contract required no notice that installments were due and required to be paid. See Ross v. The Lafayette, &c. Co., supra.

6. No tender of a certificate of stock was necessary. Such certificate does not constitute the title of the stock*502holder to his stock. The registry of his name upon the stock-book of the company, opposite the number of his shares, gives him title to his stock. That book, as a member of the corporation, he has at all times a right to inspect. To that book reference is had in paying dividends, in receiving votes at corporation elections; upon that book transfers of stock, as between the company and the owner, are made; and of it, copies are given to stockholders. Redf. Railwi 43.

H. W. Chase and J. A. Wilstach, for the appellants. W C. Wilson and G. Gardner, for the appellee.

Certificates of stock can always be demanded and obtained by the owners, when they may desire them. They are convenient, as evidences of stock existing upon the proper book, in making sale of stock to third persons, but are not indispensable. Redf. on Railw. 50. — Ang. & Ames on Corp. 411. When a subscriber pays an installment of stock he should have a receipt of payment.

Per Curiam.— The judgment is reversed with costs. Cause remanded with instructions to enter judgment upon the agreed case for the plaintiff.