There is another objection which, so far as the record discloses, is fatal to the right of the appellee to recover in this suit. The capital stock of the company, and the number of shares, and their par value per share, are fixed in the recorded certificate, and there is no provision, either in the articles of association, or the subscription itself, or the general law under which the appellee was organized, authorizing the directors to make calls or assessments before the whole capital stock is taken. We take the general rule to be, that where the capital stock and the number of shares are fixed in the articles of association or recorded certificates, no valid assessments or calls can be made against a subscriber until all the shares are taken, unless there be a provision to that effect either in the certificate or general law under which the company is organized, and for the reason that the success of the enterprise, and the profits to be realized therefrom, may depend entirely upon having the full amount of the capital taken up. Cabot and West Springfield Bridge Co. v. Chapin et al., 6 Cushing, 50; Contoocook Valley Railroad v. Barker, 32 N. H. 370; Fox v. Clifton, 6 Bing. 776; Wontner v. Shairp, 4 Man., Grang. & Scott, 404; Pitchford v. Davis, 5 Meeson & Welsby, 2; Norwich & Lowestoft Comp. v. Theobald, I Moo. & Mal. 151, and I Red. 176. The author says: "And when the charter of a railway company requires their stock to consist of not less than a given number of shares, assessments can not be made before the required number is taken." This point was not relied on in the argument, and we do not rest our decision upon it, for although the record shows only about one-third of the stock was taken, it may appear by proof not before us that the whole capital stock was subscribed.

Being of opinion that the court erred in the modification of the appellant's second prayer, and also in granting the appellee's first prayer, so far as regards the notice of the assessments or calls, the judgment will be reversed, and a new trial awarded.

Judgment reversed, and new trial awarded.

Assumpsit by the Antietam Co. to recover balance due on a subscription to the capital stock. The defenses set up were (1) that after the plaintiff-appellant had signed the subscription list, the amount of the capital stock had been raised from $50,000 to $150,000, without his knowledge or consent; (2) that he was induced to sign by reason of representations that at least six per cent. interest on the capital stock would be paid by rents from another property to be acquired by the company within the year, whereas,

the property was bought, but never rented; (3) that other subscribers had been released without his consent. Judgment for the company. Appeal on assigned charges to jury.

Who may be parties. In general, subscription being a contract, capacity to make a contract is essential.

Infants. Mitchell's Case, L. R. 9 Eq. Cas. 363; Lumsden's Case, L. R. 4 Ch. App. 31; Re Globe Assoc., 63 Hun (N. Y.) 263; Indianapolis Co. v. Wilcox, 59 Ind. 429; Chicago Assoc. v. Hunt, 127 Ill. 257; Morawitz § 855. Married women. Re Reciprocity Bank, 22 N. Y. 9; Keyser v. Hitz, 133 U. S. 138; Robinson v. Turrentine, 59 Fed. Rep. 554; Matthersman's Case, L. R. 3 Eq. Cas. 781.

Aliens. Com. v. Hemmingway, 131 Pa. St. 614; Hobbs v. Manhattan Co., 56 Me. 417; State v. Travelers' Co., 70 Conn. 590. Ed.

III. Subscriptions for Stock.

THE TONICA AND PETERSBURG RAILROAD COMPANY V. MCNEELY. 21 Illinois Reports 71 (1859).

In 1856 a voluntary association, in the name and style of the plaintiffs, was formed for the construction of a railroad from Tonica to Jacksonville, in this state, contemplating an application to the next session of the legislature for an act of incorporation. Said association was organized by the election of officers, and subscriptions of stock, in shares of one hundred dollars each, were obtained in that year for a large amount. The intestate subscribed two shares and died some days before the incorporation of the plaintiffs. By consent of the parties this case was tried by the court, Harriott, judge, and the plaintiffs proved on the trial the organization of their company, calls by the directors for the whole of the stock, and notices to the stockholders by advertisements in two newspapers.

The court rendered judgment for the defendant below.

CATON, C. J. A subscription made in contemplation of a charter to construct a railroad or to accomplish any other legitimate object is a valid contract between the parties, and as such may be enforced the same as any other contract. The object of the contract is lawful and is founded on a good consideration, which is the mutual promise expressed in the contract. Upon the general principles of law by which all contracts are governed, we are at a loss to see what objections are to be urged to the enforcement

of such a contract, which could not be urged to any other contract for the payment of a specified sum of money. There is no pretense in this case that the objects contemplated by the contract are not provided for by the charter, or that the charter which was obtained, or the organization or action under it were not in strict pursuance of the contract. No such defense has been insisted upon. But it is simply claimed that the contract was void-a nundum pactum. We are of opinion that where the objects of a contract are lawful, and it is founded upon a good consideration, and is entered into by parties capable of contracting, it creates a legal obligation, which may be enforced according to its terms. We know of no law against this proposition, but are very familiar with a great deal for its support.

The judgment must be reversed and the cause remanded.
Judgment reversed.

MINNEAPOLIS THRESHING MACHINE Co. v. DAVIS.

40 Minnesota Reports 110 (1889).

Plaintiff brought this action in the district court for Hennepin county, for installments alleged to be due from defendant as a subscriber to its capital stock. A jury was waived, and the action. tried by Lorchren, J., who held that the defendant never became a subscriber, and ordered judgment in his favor. A new trial was refused, and the plaintiff appealed. The facts on which the question of the defendant's liability turned are stated in the opinion, the material parts of the subscription paper, exhibits A and B, therein mentioned, being as follows:

"Memorandum of agreement made and entered into between the undersigned, citizens of Minneapolis, Minn., each for himself, parties of the first part, and John S. McDonald, of Fond du Lac, Wis., party of the second part. The party of the first part, in consideration of the party of the second part moving his plant and machinery to the city of Minneapolis for the purpose of forming a joint-stock company to engage in the manufacture of threshers and other machinery, * * * with a capital stock of $250,000, the aforesaid citizens of Minneapolis, parties of the first part, hereby subscribe to and severally agree to take and pay for, in cash, the amount of capital stock set opposite their respective names in a company to be organized as aforesaid for the purposes aforesaid. And the said John S. McDonald, hereby agrees, that whenever the amount subscribed, exclusive of his own, shall reach

the sum of $190,000, he will subscribe to said capital stock the further sum of $60,000, payable in the manner specified in a certain proposition signed by him and attached hereto. The conditions upon which said subscriptions are made are as follows, to wit: First. No subscription is to be binding until the sum of $250,000 is subscribed, including the subscription of John S. McDonald. Second. The $190,000 subscribed by the citizens of Minneapolis to the capital stock aforesaid it is understood and agreed is to be paid * as soon as the company is organized. The undersigned subscribe the amounts set opposite their respective names on condition that all the works of the company shall be located at Junction City, Hennepin county, Minn. John A. Davis, $5,000," * * "Proposition made by John S. McDonald referred to in the annexed memorandum: The said John S. McDonald is to subscribe for $60,000 of the capital stock * *. John S. McDonald."

*

* *

MITCHELL, J. This was an action to recover installments due on subscriptions to stock of the plaintiff. The facts fully appear from the findings of the court, in connection with exhibits A and B attached to the complaint. Those material for present purpose are that, a scheme having been started to organize a manufacturing corporation with $250,000 capital, whose works should be located. at Junction City, near Minneapolis, and one McDonald having proposed that if the citizens of Minneapolis would subscribe $190,000 to the capital stock, he would subscribe the remaining $60,000, one Janney, a promoter, but not a subscriber to the stock of the proposed corporation, acting as a voluntary solicitor, having with him the subscription paper, * * * about April 1, 1887, proceeded to canvass for subscriptions to the stock of the proposed corporation, on the terms and conditions embodied in the paper. He first applied to defendant, who subscribed $5,000 of stock. Afterwards, and about the same date, other citizens respectively subscribed to the stock, on the same paper, to the aggregate amount, including defendant's subscription, of $190,000, of which over $65,000 has been paid in to plaintiff. Thereupon McDonald, in accordance with his proposition, subscribed the remaining $60,000, which he has paid up in full. All the conditions expressed in the written subscriptions * * having been fully performed and complied with, the proposed corporation was afterwards, about April 25, 1887, organized, and these subscriptions to its stock delivered over to it. The corporation, acting in good faith upon such subscriptions, including that of defendant, expended large sums of money in locating and constructing its works, and entered into large con

*

tracts, and incurred liabilities to the amount of over $75,000. During all this time the corporation had no notice or knowledge of any condition being attached to defendant's subscription other than those expressed in the subscription paper itself. Neither is it found or claimed that any of the other subscribers to the stock had any such notice or knowledge. Defendant was not present at the organization of the corporation, and never attended or took part in any of its meetings, and had no notice or knowledge that the subscription paper had been transferred or delivered over to the plaintiff, or that the plaintiff relied on it, until about November, 1887, just prior to the commencement of this action.

Upon the trial the defendant was permitted, against plaintiff's objection and exception, to testify that he signed or subscribed to the stock only upon the express oral condition and agreement then had between him and Janney, that the latter should retain in his possession said agreement with his name signed thereto, and not deliver it to any one, or use it in any way, until certain four persons should subscribe to the stock, each in the sum of $5,000; that Janney took the agreement from defendant on that express condition and understanding, and not otherwise; that none of these four persons ever did subscribe to the stock of the plaintiff, and that defendant never authorized Janney or any one to deliver said agreement to any one except upon the condition referred to. The court found the facts to be in accordance with the testimony, and upon that ground as a conclusion of law that defendant never became a subscriber to the plaintiff's stock. The competency of this evidence is the sole question in this case.

Under the elementary rule of evidence that a written agreement cannot be varied or added to by parol, it is not competent for a subscriber to stock to allege that he is but a conditional subscriber. The condition must be inserted in the writing to be effectual. This rule applies with special force to a case like the present, where to allow the defendant now to set up a secret parol arrangement by which he may be released, while his fellow-subscribers continue to be bound, would be a fraud, not only upon them, but upon the corporation which had been organized on the faith of these subscriptions and upon its creditors. The defendant, of course, does not attempt to controvert so elementary a rule as the one suggested, but contends that the effect of this evidence was not to vary or contradict the terms of the writing, but to prove that there was never any delivery of it, and hence that there never was any contract at all, delivery being prerequisite to the very existence of a contract. His claim is that the subscription paper was given to and