contract with the minority stockholder, and without carrying him, nolens volens, into the new scheme. It is incident to every corporation not incorporated for a specified time, that it shall be subject to dissolution by a vote of the majority of the stockholders. Therefore if the majority are unwilling to continue the old enterprise without adding the new, let them dissolve the corporation, sell the property, pay off the debts, and turn over the surplus to the stockholders. They may then take their proportion and engage in any new scheme that they like. Would not this be done in every case of a partnership, where the partners could not agree? And what more is a corporation, quoad hoc, than a partnership?

The case of Lauman v. The Lebanon Valley R. R. Co., 30 Penna. 42, recognises this principle, but, as we shall endeavor to show, falls most egregiously short in its application of it. In that case, the legislature authorized two railroads to consolidate into one, and provided that the stockholders should by a majority vote, agree upon the terms upon which the consolidation should be effected. By a majority vote of the corporation to be merged, the stockholders agreed to merge their corporation into the other, and voted that one share of the stock of the merging company should be taken by each shareholder of the merged company in place of this share in his own company. A stockholder who voted against this arrangement, applied to the court to have it annulled. The court held that no consolidation could be effected without the assistance of an act of the legislature; that the vote for a consolidation under the Act of Assembly, was equivalent to a vote for a dissolution, and an acceptance by the legislature of the surrender, and that all the stockholder, who was plaintiff, could claim, was his equitable share of the value of the corporate property. Therefore upon the corporation executing a bond to pay the plaintiff the market value of his shares when that should be ascertained, the court dismissed the cause.

We would remark in passing, that we can perceive no principle upon which this vote for a consolidation could be held equivalent to a vote for a dissolution. Non constat, because a majority of the stockholders were willing to consolidate with another road, that they would therefore have been willing to dissolve their corporation, if the question before them had been dissolution or not. But this objection aside: if the court proposed that the plaintiff's

right to object to the consolidation was to be taken from him upon his being paid the market value of his stock, to be determined by some species of appraisement, [how the value was to be ascertained does not appear from the report, but we are bound to presume that it was to be done by appraisement]-then the court was guilty of a most palpable violation of the plaintiff's rights. One of the incidents to the dissolution of a corporation is, that the property shall be sold to the highest bidder at public auction, and the proceeds, after paying off the debts, divided amongst the shareholders. This is one of the most valuable rights incident to the contract between the co-corporators. When they go into an enterprise, they contract with each other, that each shall have his proportionate share of the largest sum of money which the enterprise can be made to produce, whatever shape events may take. Now the market value per share of stock, in many instances falls far short of affording any index to what that shareholder's real interest in the property of the corporation really is, if it should be sold at public auction, which his contract gives him a right to have done. For instance, there may be a railroad, in which the stock is worth in the market per share, no more than twenty-five dollars, yet, because of its location, and the possibility of developing it into a great affair, there may be two rival corporations of immense means, both of which are anxious to have it. Now, if the shareholder's interest is appraised, he will receive twenty-five dollars only; whereas if the road were put up at public auction, where these two strong corporate bodies could have an opportunity of bidding for it, it might bring the shareholder far more than twenty-five dollars. A most remarkable instance of this very sort occurred in this state (Virginia) within the past year. The state's interest in the road connecting Richmond with Petersburg was to be sold. It was sufficiently large to give the purchaser the management of the road. Two rival corporations of large means wanted it. Now, while the stock was only worth thirty dollars per share in the market, yet after this strife commenced, one of the corporations actually made a bona fide and binding offer of two hundred dollars per share for it. It may be said in answer to this argument, that, under a series of decided cases, the road-bed and franchises cannot be sold except by permission of the legislature. Without stopping to discuss this proposition, we reply that we propose to confine

these remarks to cases where the road is under mortgage by permission of the legislature (the case, we apprehend, with most roads), in which case, by selling under the mortgage, the legislative permission to sell is carried.

It will be borne in mind that these remarks have been addressed entirely to a case in which the legislature authorizes a new enɩerprise; not to one where it commands it. Perhaps such a case should be entitled to a separate discussion, though it would seem to be disposed of by a single consideration. These reservations of power are clearly made for the purpose of protection.

They are to avoid the danger of corporations becoming unmanageable from their growth. They are not for the purpose of forcing a company into new enterprises, but of prohibiting the future. prosecution of the old, except upon conditions which the public safety is found to require. Whereas, before the liberty to amend was reserved, the company was entitled to prosecute their enterprise through all time on the terms and conditions originally accorded to them, yet, now the legislature has acquired power to say, the enterprise shall not be prosecuted, except it be prosecuted upon new terms and conditions. Thus the legislature may say, that a railroad company shall not operate its road from A. to B. unless it also builds a road to C.; but it has no power to force the company to build the road to C. Whether the company will build the road to C. is a matter for the company itself to determine, and it cannot be done unless every stockholder agrees to it. The legislature has power to put them into the condition of choosing between the alternatives of giving up their enterprise, or of continuing it by extending the road. When it requires the new enterprise to be added, then any stockholder may say, I never bargained to go into this additional scheme, and I am unwilling to go into it. I prefer to adopt the alternative of abandoning the old one. Then let us dissolve, sell out and divide.

Our propositions then are:

I. That the power to alter or amend charters, gives the legislature no authority to force a company into any new enterprise, or into any enlargement of the old; but only to prescribe new conditions upon which the old shall be conducted.

II. That when the legislature authorizes a new enterprise, or an enlargement of the old, it can only be undertaken upon every stockholder agreeing to it.

III. That there is no more authority for assuming that a stockholder who contracts to build a road from A. to B. with notice that the legislature reserves power to amend his charter, impliedly contracts that he will extend it to C. when the legislature authorizes such extension, than there is for assuming that he thereby contracts to extend it to any other place, or to build any other road.

IV. That when the legislature authorizes a new enterprise, or an enlargement of the old, if a majority wish to undertake it, the only way in which it can be done, in spite of an unwilling minority, is for the majority to dissolve the corporation, sell the property at public auction, and divide out the proceeds.

A class of cases already cited in a foregoing part of this paper is apparently inconsistent with this argument. They are cases where a shareholder has subscribed to stock in a company, has paid only a portion of the subscription price, and has given his note for the balance; subsequently the legislature authorizes a new enterprise, which the majority resolve to go into; whereupon the subscriber refuses to pay up what is due upon his subscription upon the ground that the enterprise now is a different one from that which he agreed to go into. In a number of such cases, the courts have compelled the unwilling subscriber to pay up the full amount of the subscription. These cases are in no degree in conflict with the theory which this paper has sought to disclose. There is not in one of them, an intimation even, that the subscriber is under any obligation to go into the new enterprise; all that they decide is that he must pay up what he agreed to pay when he subscribed to the stock. When he gave his note for the subscription price, he was as much a stockholder as though he had paid money. The corporation agreed to take his note in lieu of money, and that note became then as much corporation assets as the money would have been. He is a stockholder, entitled to all the rights of a stockholder; the corporation is his creditor entitled to enforce payment of the debt, irrespective of any future operations of the company. He may say, here is the money due upon my stock, now give me my share of the corporation property. Here is the debt which I owe you in respect to the enterprise which we agreed to go into, now give me my share of the corpus, as you wish to carry yours into another enterprise which I do not wish to go into.

The point is this: that though he has not paid money for his stock, yet as the corporate authorities chose to take his note in lieu of the money, he thereby became a stockholder entitled to all the rights of a stockholder, amongst which was the right of refusing to go into a new enterprise, and though he refuses to-day to go into the new enterprise, and calls for a dissolution, which is granted, yet to-morrow, after the dissolution has taken place, he is as much liable to be called on for payment of his note as he ever was, and the note though unpaid, will go into the general corporate funds for distribution.

There is not in one of the cases, the slightest intimation that the court thought the subscriber under an obligation to go into the new enterprise. All that they decide is, that the stockholder must pay up what he agreed to pay for his stock; after that, he has the rights of all other stockholders, and may go into the new enterprise, or call for a dissolution of his company, at his pleasure, or, even before he pays up, he has the same right to call for a dissolution, as, in theory, he has already paid for his stock when the corporation compounded with him, and agreed to take his note in lieu of money. Varying the form of statement: he subscribed to stock to build a road from A. to B. Now having subscribed, he is bound under any circumstances, to pay the subscription price, unless the enterprise be abandoned. The road is built from A. to B. Has he any right to refuse then to pay up on his subscription, when the very thing in regard to which he subscribed, has been done? After the road is built the majority resolve to extend it to C. Now, does making him pay up his subscription, force him into being a stockholder in the new enterprise? Unquestionably not. He is only required to pay what he promised to pay in case the old enterprise should be undertaken, when he may immediately insist that the old property shall be sold and the proceeds divided, rather than he will go into the extension. WM. L. ROYALL.

RICHMOND, Virginia.

RECENT AMERICAN DECISIONS.

Supreme Court of New Hampshire.

JOHN L. SWETT v. EDWIN CUTTS.

A landowner who in the reasonable use of his own land diverts or obstructs the flow of water not gathered into a stream, but either circulating through the pores