also engaged in promoting the legitimate business for which it was organized. It thus procures freight for transportation upon its steamships, and the business it thus does at Panama and across the Isthmus is just as legitimate as it would be to establish agencies on the Pacific coast to solicit freight for transportation from Aspinwall to New York, or to contract with newspapers there to advertise the carrying of such freight. Cannot a railroad company take freight for transportation at a point a few rods from its depot? And if it may a few rods, why not a few miles? If it may have a depot for the receipt of freight one mile from its terminus, why may it not have a depot fifteen or twenty miles therefrom, and transport the freight thence to its road by any means that it chooses to adopt? The Panama Railroad Company terminated on the Pacific coast at Panama, and there it owned lighters to go out into the ocean to take freight from vessels. If it could send its lighters out one mile, why could it not send them out several miles for the same purpose to some convenient port or roadstead? The main business of the steamship company between Aspinwall and New York was to transport passengers and freight which came from the Pacific coast, and instead of taking the passengers and freight at Aspinwall, why could it not take them at Panama? We see no reason for holding that it might not do so in the prosecution of its corporate business, and as incident thereto. Then again, if when the steamship company receives goods at New York under contract to carry them to Panama it is estopped from denying its authority and power to make the contract, why when it receives goods at Panama under contract to be carried to New York should it not be equally bound by estoppel?

We think, therefore, that it is clear upon principle and authority that both defendants were competent to enter into contract to carry this oil from Panama to New York. And as each was competent to contract alone, it cannot be doubted that they were competent to make a joint contract to do it. They could even become partners in the transportation business between Panama and New York, and so far as we have discovered, the power of corporations thus to become joint carriers has never been denied, but has frequently been recognized. Aigen v. Boston & Maine R. R. Co., 132 Mass. 423; Block v. Fitchburg R. R. Co., 139 id. 308; Gass v. N. Y., Providence & Boston R. R. Co., 99 N. Y. 220; Hot Springs R. R. Co. v. Trippe, 42 Ark. 465; Ins. Co. v. R. R. Co., 104 U. S. 146; Barter v. Wheeler, 49 N. H. 9; Wylde v. Northern R. R.

Co., supra; Hutchinson on Carriers, § 160. The right of a corporate carrier to go beyond its terminus to procure freight and passengers, and to transport them to its terminus for carriage over its route, is not absolute and unqualified, but has some limitations. What those limitations are it is not possible, in a general way, to define. The New York Central and Hudson River Railroad Company could not establish a line of steamers between Liverpool and New York to carry passengers and freight from Liverpool to New York, in order that it might secure the business of transporting such passengers and freight over its route to Buffalo; but it might run ferry boats from Staten Island, or from the New Jersey shore, for the purpose of securing passengers and freight for transportation over its route. The right to go beyond its terminus to procure passengers and freight for transportation over its route, by a corporate carrier, must be exercised within reasonable limits, and under such circumstances that it may fairly be said to be incident to its legitimate corporate business; and our holding is that the Pacific Mail Steamship Company, engaged in transportation upon both the Pacific and Atlantic oceans, did not go beyond reasonable limits in contracting to take freight at Panama and transport it over the Panama railroad for delivery to its steamships at Aspinwall, its main business being to take freight coming to it over that railroad.

A careful consideration of the whole case has, therefore, led us to the conclusion that the judgment should be affirmed, with costs. All concur.

Judgment affirmed.

VIII. The Power to Acquire and Hold its Own Stock.

CURRIER V. LEBANON SLATE COMPANY.

56 New Hampshire Reports 262.

The facts are stated in the opinion.

SMITH, J.: 1. The vote of March 17, 1869, authorizing the directors to give the notes of the corporation to the amount of $2,000, upon receiving from Liscomb a transfer of one hundred shares of his stock, was in effect a vote to release him from his subscription for so many shares, and to refund to him the amount he had paid thereon. The reason assigned to the stockholders why this should be done was that he had more stock than he was able to pay for, and unless he could have relief in some way, the com

pany would be obliged to stop their works or hire money to carry them on. It was further represented that he would thus be enabled to raise money on the notes of the company with which to pay the assessments on his remaining stock. It is not claimed by the defendants that the corporation intended, or that the effect of the note was, to reduce the amount of the capital stock, or to extinguish the one hundred shares transferred by Liscomb; but they claim that the corporation hold the shares so transferred as property, with power to reissue the same to any subscriber or purchaser thereof.

It distinctly appears that the whole amount of the capital stock, as fixed and limited by the corporation, has never been paid in. It is certain, therefore, that prior to March 17, 1869, the directors and treasurer could not make and subscribe a certificate under oath that the amount of the capital stock had been fully paid in, and cause the same to be recorded in the office of the clerk of the town where the corporation had its principal place of business, as required by chapter 135, section 20, General Statutes. Under section. 8 of the same chapter, therefore, the stockholders were individually liable for all the debts and contracts of the corporation.

It is not distinctly found in the master's report whether the corporation, on March 17, 1869, had sufficient assets to meet all its liabilities. If it had not, the vote in question would be clearly illegal, and what has been done under it should be set aside. The funds of an insolvent corporation cannot be taken to buy in a portion of its capital stock at the expense of its remaining stockholders. It would be grossly inequitable to the other stockholders, and a fraud upon the creditors. Moreover, it is prohibited by ch. 135, sec. 3, Gen. Stats., which provides that no dividend shall be made, and no part of the capital stock shall be withdrawn or refunded to any of the stockholders, when the property of the corporation is insufficient, or will be thereby rendered insufficient, for the payment of all its debts; and by section 7 it is provided that any stockholder who shall receive any sum unlawfully withdrawn or refunded from the capital stock shall, to the amount by him received, be individually liable for all the debts of the corporation then existing or afterwards contracted, until the same is repaid, or paid to the creditors of the corporation.

2. But assuming that this corporation, on March 17, 1869, was solvent, it becomes material to inquire whether the corporation could lawfully purchase of Liscomb one hundred shares of its capital stock, the assessments upon which he had been unable to meet.

In Salem Mill Dam Corporation v. Ropes, 6 Pick. 23, it is laid down that "no vote or act of a corporation can enlarge its chartered authority, either as to the subjects on which it is intended to operate, or the persons or property of the corporators. If created with a fund limited by the act it cannot enlarge or diminish that fund but by license from the legislature, and if the capital stock is parcelled out into a fixed number of shares, this number cannot be changed by the corporation itself. Vide 1 Dane's Abr., ch. 22, art. 1, and the numerous authorities cited by the author."

In City Bank of Columbus v. Bruce, 17 N. Y. 507, it appears that the Columbus Insurance Co., being in full operation, with a capital of $300,000 (the amount authorized by its charter), voted through its board of directors that any stockholder indebted to the company on stock notes might have the privilege of paying any part or all of such indebtedness in the capital stock of the company, at a rate specified in the resolution. Under this authority stock was surrendered or transferred to the company in payment of notes to the amount of $133,000. SELDEN, J., in delivering the opinion of the court, says: "There seems to be no ground for questioning the validity of this transaction. I am not aware of any common-law principle which forbids it; nor is it shown to have been in contravention of any provisions of the charter of the company, or any other of the statutes of Ohio. In the case of Taylor v. The Miami Exporting Company, 6 Ohio 83, it was held that a bank might receive its own stock in payment of a debt, and might hold it as it did its other corporate property."

I am not prepared to say that under the laws of this state a solvent corporation may not in good faith, and for the purpose of securing payment of a debt against a stockholder, which might not otherwise be collected without risk, delay, and expense, receive its own stock in payment there for at its fair value, and hold the same as property; in which case it would not become extinguished, and might be reissued to the purchaser thereof. But this case differs widely from such a case. The object of the vote in question appears to have been, or was declared to be, not to collect a debt due to the corporation, but to afferd relief to a stockholder by taking off his hands stock for which he had partially paid, but for which he was unable to complete the payments. This was done by hiring money for the purpose, or rather by giving him the notes of the corporation to be negotiated by him, and ultimately paid by the company, and against the protest of the plaintiff. It is difficult to see how the welfare of the corporation could be promoted by hiring money, or incurring further liabilities, to purchase in one-tenth

of its capital stock, for which there had been no sale in the open market, and upon which no dividend had ever been declared, and for which it was extremely doubtful whether another purchaser could be found unless the affairs of the company should improve (a condition which appearances then hardly warranted). The inevitable result was to release Liscomb from paying into the treasury of the company the balance of the assessments then made, or to which the stock was liable, amounting to $8,000.

It further appears from the report of the master that two hundred and fifty shares of stock were sold by the company for nonpayment of an assessment. The defendant - Liscomb - admits that he bid this off at $1 per share, and paid to the company the balance of the assessment, $3. He says this was done after consulting some of the stockholders, but he does not claim that he had any legal authority to buy it for the company. The reason that he assigns that unless he had done this the company would have been embarrassed, as no outside parties were present at the sale — shows that the stock had little, if any, value at the time. By the report of the master it also appears that Liscomb has, since March 17, 1869, claimed to recover the sum of $1,000 so paid by him. It is not material to inquire upon what ground such a claim can be based. That question does not arise here, and the transaction is important only as bearing on the value of the stock, and the value of the stock is material as bearing upon the good faith with which the purchase by the company of the one hundred shares, October 17, 1869, was made.

If Liscomb was unable or unwilling to pay the assessments levied upon his stock, the statute afforded a remedy which the corporation was bound to pursue. A suit could undoubtedly have been maintained against him to collect the assessments; or under secs. 16 and 17 of ch. 134, Gen. Stats., the treasurer could proceed to advertise and sell the shares, or so many of them as might be necessary to pay the assessments then due, with necessary charges. If the stock had any value, it is fair to presume it would have sold for what it was worth or for a price approximating to it. If the transaction by which the company bought one hundred shares of its stock at $20 per share, was an honest transaction, the stock if sold in the market would undoubtedly have brought that sum, or somewhere near it. If it would not, it affords very strong evidence of collusion between Liscomb and a majority of the stockholders, by which this plaintiff cannot be bound, especially in the face of his protest seasonably made.