Waukon & Mississippi R. v. Dwyer

49 Iowa 121

• Court: Supreme Court of Iowa
• Decided: June 14, 1878
• Status: Published

Opinion

Adams, J.

l pleading: contract. The defendant insists that the petition is insúfhcient in that it does not show that any agreement was made with the plaintiff. The agreement, a copy of which is set out, purports to be a subscription to the stock of the Waukon & Mississippi Railroad. The name of the plaintiff is the Waukon & Mississippi Railroad Company. Whether the difference between the two names is such that the petition for that reason might be deemed insufficient we need not determine. No point of that kind is made by the appellant in his argument, and we assume that the point was not designed to be raised by the demurrer. The point urged is that an averment that the defendant signed and delivered to the plaintiff an agreement in writing is not equivalent to an averment that the defendant entered into an agreement with the plaintiff in writing, and if not that the petition is defective. But if a writing which purports to be an agreement is signed and delivered to the promisee as an agreement, it must be regarded as taking effect as an agreement, and this we think is what the petition in this case shows.

2 contract : subscription. It is further insisted by the appellant that the agreement, as set out, contains no promise to pay for the stock; that the Pr0:mise, if any, is merely implied by law, and ag petition avers only the signing and delivery of the agreement it avers no promise to pay for the stock.

In our opinion the agreement does contain a promise to pay for the stock. The subscription is expressly made subject to the by-laws, rules, and articles of incorporation. Article 4 provides that the stock shall be paid for after five hundred shares have been subscribed, and the petition shows that they have been. The article becomes as much a part of the contract of subscription as if it had been incorporated directly into the contract.

It is further insisted that the defendant is not a stockholder if he has not paid for his stock, and that if not a stockholder he is not liable to the company. But this position is not well taken. A subscriber to stock becomes a stockholder by virtue of the subscription, in the absence of a provision requiring a payment as a condition of membership; and that, too, without the issuance of any certificate of stock. Chester Glass Co. v. Dewey, 16 Mass., 94; Spear v. Crawford, 14 Wend., 20; Vawter v. Ohio & Mississippi R. Co., 14 Ind., 174.

It is further insisted that the petition does not show that any assessments have been made. To this it may be said that by article 4 ten per cent of the stock was made payable on the 15th of each month, until the whole is paid as the expenditures require. The petition avers that the expenditures require that the whole stock should be paid. It also avers that the defendant has been, duly notified of the requirement.

The object of an assessment, where one is necessary, is to fix the amount that may be called for, and the time when it may be called for. But in the case at bar both amount and time of payment were fixed by the article of incorporation. Nothing remained to be determined but the needs of the company resulting from the expenditures. When the company notified defendant, as the petition avers, that, we think, was a sufficient determination that the expenditures required payment of the stock.

In our opinion the plaintiff’s petition is sufficient, and the demurrer was properly overruled.

Affirmed.