The Memphis Branch R.R. Co. v. Sullivan

• Decision Date: 31 July 1876
• Citation: 57 Ga. 240
• Parties: The Memphis Branch Railroad Company, plaintiff in error. v. James B. Sullivan, defendant in error. The Memphis Branch Railroad Company, plaintiff in error. v. Albin Omberg, defendant in error.
• Court: Georgia Supreme Court

57 Ga. 240

The Memphis Branch Railroad Company, plaintiff in error. v. James B. Sullivan, defendant in error. The Memphis Branch Railroad Company, plaintiff in error. v. Albin Omberg, defendant in error.

Supreme Court of the State of Georgia

(Atlanta, July Term, 1876.)

Corporations. Contracts. Stock. Before Judge McCutchen. Floyd Superior Court. January Adjourned Term, 1876.

Reported in the opinion.

N. J. Hammond, attorney general; Dabney & Fouche; Smith & Branham; C. A. Thornwell, for plaintiff in error.

Wright & Featherston, for defendants.

JACKSON, Judge.

This was a suit brought on several assessments of stock subscribed by Sullivan for the purpose of building a railroad from Rome to the Alabama line, and to connect with certain roads in that state. It appears from the record that the charter required a subscription of $500 000 00 before it was operative; that this sum was not subscribed originally and was after wards reduced still more, one subscription, a mere nominal one, for $250,000 00 having been released by the company, and even with that counted, it is clear that the whole subscription never reached $500,000 00. The charter was amended, legalizing certain acts of the company and authorizing it, in effect, to go on with the work with $100,000 00 of stock subscribed. Sullivan paid up three assessments, but for a survey of the route and other preliminary objects only. Suit was brought against Sullivan for the balance of his subscription which was assessed and which he had refused to pay. The jury, under the charge of the court, found for defendant; the railroad company moved for a new trial, it was refused, and error is assigned upon this refusal.

The questions made are: 1st. Whether a subscriber to stock *of a corporation, chartered for an enterprise, is bound to pay his assessments unless the whole stock be subscribed. 2d. Whether, even if the whole had been subscribed originally, a large part merely nominally and which was afterwards released, the subscriber would be bound to payassessments. 3d. Whether an amendment to the charter authorizing the company to proceed with a less sum than the whole amount required to be subscribed, is so material as to release the subscriber from his subscription, if done without his assent. And 4th. Whether the facts proven authorized, or rather required, the jury to find that the subscriber had acquiesced in the failure of the procurement of the original sum fixed in the charter to be subscribed, or in its reduction by the release of certain nominal subscribers, or in the alteration of the charter, though material.

1, In respect to the first point, it appears to us that when one agrees so much for an enterprise, how much it will take to complete it, is a most important question. There can be no doubt that he subscribes on condition that the charter is complied with; that instrument forms part, and an important part, of his contract; the law of the corporation made the terms upon which he agrees to pay; and the amount of valid subscriptions made for the common enterprise is most material. One might be willing to be one of ten men to raise $1,000 00, but not one of ten to raise $500 00 for a given purpose; $1,00000 might, in his...