Jones v. Railroad

I. Under Laws of 1889, c. 5, the Concord Railroad and the Montreal Railroad have united and formed a new corporation, called the Concord Montreal Railroad, on terms agreed to by a two-thirds vote of each party. Chapter 46 relates merely to the corporate name. The stockholders of the uniting corporations being members of the new corporation, their rights as members of it are equal except in those respects in which inequality is established by c. 5, the contract of union which that chapter authorized, and the number of their shares. With no agreement to the contrary, a share of Concord Montreal stock would be a proportional share of the equitable title of the corporate property, and among the components or incidents of the title would be proportional shares of the right to receive dividends and to control the management of the property by the voting power. The rights comprised in each share are the same as those comprised in every other share, with such differences as were introduced by the contract of union, which includes the laws under which it was made. If these differences were not satisfactory to any member of either of the uniting corporations, she was not required to submit to them. He could not be forced into the new company. Clearwater v. Meredith, 1 Wall. 25, 41; Lauman v. Railroads, 30 Pa. St. 42, 46; Mowrey v. Railroad, 4 Biss. 78, 85; Black v. Canal Co., 24 N. J. Eq. 455; Mor. Corp., s. 646. By dissenting, he could compel that company to buy his stock at its value, ascertainable under s. 1. Before the union, the Concord and the Montreal, being business corporations, were partnerships, with common-law partnership rights and liabilities, modified in some respects by statute. By becoming members of those companies, the stockholders had accepted the charters and other corporation laws as their partnership contracts. By becoming members of the Concord Montreal, they assumed the relation of partners whose contract is in the act of 1889 (which contains the new charter); in the old charters, materially amended by the new; in other laws; and in the agreement of union which formed the new corporation. Their rights, so far as they are involved in this case, are contractual; and their intention, proved as a fact by competent evidence, is their contract.

The provision of s. 3 of the act of 1889, that "the stockholders in the uniting corporations who have assented" to the union (exchanging their certificates of stock being a manifestation of assent) "shall be members of the new corporation," seems to have no peculiar significance, and to be of no importance. The union of the old companies would import membership in the new company, and equality in the shares of that company, unless a different purpose were shown by the true construction of the "agreement for union." Such an agreement, made in general terms, without a specific provision for membership, would naturally mean a formation of one company out of the members of several companies, on a footing of equal rights in the property of the new company in proportion to the number of their shares, except so far as an intention to create or continue inequality were proved by competent evidence found in some part of the contract. In this case, the provision that the assenting members of the old companies shall be members of the new one is nothing more than would be implied from a general agreement to unite the old companies. The Concord stockholders were the Concord company. The Montreal stockholders were the Montreal company. The union of the companies was a union of the stockholders. The property of each of the uniting companies belonged to its members. The property of the Concord Montreal belongs to its members. The circumstance that they are an incorporated trustee, holding the legal title, is immaterial. One material fact is that they are beneficiaries, holding the equitable title, and that the rights involved in this case are not affected by the mere division of their title into legal and equitable parts, but are what they would be if the owners were an unincorporated body, holding their property as tenants in common and partners without a trust, and with the power of increasing their capital that was accepted by their partnership contract.

Section 10 of the new charter authorizes the new company to buy twelve other roads, — the Mt. Washington, the Whitefield Jefferson, the New Zealand Valley, the Profile Franconia Notch, the Pemigewasset Valley, the Lake Shore, the Tilton Belmont, the Suncook Valley, the Suncook Valley Extension, the Manchester North Weare, the Concord Portsmouth, and the Nashua, Acton Boston. "For the purpose of facilitating said purchases, and to carry into effect the agreement or agreements made as hereinbefore authorized," the Concord Montreal may "increase its capital stock to such amount as may be requisite," with a proviso limiting the amount of capital on which dividends can be paid, and a stipulation that after a purchase of either of the twelve roads, the Concord Montreal shall "have and enjoy all the rights, privileges, and franchises theretofore had and enjoyed by the selling" corporation. This provision in relation to an increase of capital is one of the articles of the partnership contract. In none of those articles is there an express stipulation as to the distribution of the right to subscribe for the increase of capital authorized by s. 10. It was one of the subjects that could have been expressly regulated by the contract, by which the stockholders of the uniting companies were empowered to determine, and did determine, the terms of their union. But it was one of the subjects on which they left their contract to be inferred from the stipulation of s. 3, that all the stockholders of the old companies who assented to the "agreement for union" should "be members of the new corporation," and from any other clauses of their compact containing evidence of their intention.

Another of their partnership articles is s. 6, c. 148, Gen. Laws. The first section of this chapter provides that "The rights, powers, and duties set forth in this chapter shall be incident to all corporations having for their object a dividend of profits, hereafter incorporated." For the purpose of the present inquiry, the Concord Montreal was incorporated after the enactment of c. 148. St. Louis, etc., Railway v. Berry,113 U.S. 465, 474, 475. Section 6 of that chapter is, — "The corporation, at any meeting called for the purpose, may increase or reduce its capital stock, and the number of shares therein, but the capital stock when so increased shall not exceed the amount authorized by law." The distribution of new capital under this clause, like the distribution under s. 10 of the act of 1889, was not expressly stipulated, but was left to be implied from all competent evidence furnished by the partnership contract.

If all the shares of the old companies had been of equal value, and it had been agreed merely that the holder of each of those shares should have a share of the new company, the equality of the former shares would have been maintained. The contract of union shows there were four classes of former shares, of unequal values, — three of Montreal and one of Concord, — and that their inequality was adjusted in the new company by dividing its shares into four classes with unequal rights to dividends. The contracting parties could also have agreed that these classes should be unequal in the ownership of the road and in the right to vote. But on neither of these points is there any express provision against equality.

Chapter 1177, Laws of 1851, authorized the issue of preferred Montreal stock to complete the road to Wells River. This stock was to be "entitled to a preference or priority in dividends, so that said stock shall first receive, from the net income of the road, dividends to the amount of six per cent. per annum." If there was no other stipulation on the subject, a share of preferred and a share of common stock were equal in ownership of capital, and equal in the right to vote. Except in dividends, the rights comprised in a common share were no more affected by the issue of 100 preferred shares under the act of 1851 than they would have been by an authorized issue of 100 common shares. The issue of preferred shares was not a conveyance of the whole road to the preferred stockholders, or of so much of it as would make a holder of a preferred share a larger owner of the capital than a holder of a common share. With the consent of the stockholders and the legislature the road could have been sold. By due process of law it could have been sold on execution, or foreclosure, or under an exercise of eminent domain, notwithstanding the unanimous objection of the preferred stockholders. If it had been sold, the proceeds left after payment of debts would have been legally divisible among the owners of the road in proportion to the number of their shares. A holder of a common share being the equal of a holder of a preferred share in ownership of the property sold, would receive an equal share of the proceeds, unless he consented, before or after the sale, to take less. The contract which united the Montreal and the Concord companies tends to show that between the preferred stock and the old stock of the Montreal company, considered solely as dividend-paying investments, there was a difference of value, and so great a difference that an equal division of the dividend-earning capital (the proceeds of a sale of the road) among the stockholders, without distinction of classes, would have been grossly inequitable. And it does not appear that the original partnership articles of the Montreal company, or the supplementary article for the issue of preferred stock under the act of 1851, contained any stipulation against such a division.

The reason of the omission of an explicit agreement on a subject that might become so important is not stated. A conveyance of half of a farm, in common and undivided, to A, with a preferred right to ten per cent. on his investment, to be paid him annually out of the income of the farm, would inform him what share of the common capital would be his on partition by sale or otherwise. Having acquired but half of the title, and made no contract, either against a partition or for a partition, that would give him more than the share he bought, his rights would not be infringed by an equal partition that would materially damage him and materially benefit his co-tenant by terminating the preferred right to income. Parol evidence that the possibility and probability of a partition were overlooked when he took his conveyance, would be inadmissible. The written contract could not be altered without the consent of both parties. To obtain a reformation of his deed, it would not be enough for him to show that partition was not thought of. The contract was, not something that did not occur to the parties, but their intention and understanding expressed in writing. They intended that A should have half of the land title; and the law could not violate their contract by giving him more. It is not an unusual occurrence that a bargain turns out better for one party than for the other, by reason of something not expected by either.

It does not appear that any information on the subject of a total or partial division of capital was expressly given by the certificates of preferred Montreal stock; that attention was called to it by what was written, said, and done; or that it was in the mind of any of the persons concerned in the issue of that stock. The shares of stock, old and preferred, were personal property. A large part of the corporate property was real estate. It may be unsafe to assume that any Montreal stockholder, common or preferred, regarded his certificate as evidence of his being, in any legal sense, a land-owner. The rights of each stockholder of each class, as an owner of a part of every piece of the corporate property, was a subject on which there may have been little if any discussion or discourse, and on which the prevailing ideas were probably limited and indistinct.

It is probable that a difference in the value of the different classes of Montreal stock was anticipated when the preferred stock was issued. It may have been supposed that the preferred would be at par, and that the old would be worthless. The future value of the old stock may have been a question on which no trustworthy opinion could be formed. On the face of the transaction, with no other information of it than the case gives, it seems improbable that it was understood and intended that the old and the preferred shares could be made of equal value by a sale of the road. But strong as the presumption appears against the existence of such an understanding, the point is one on which there may have been no actual understanding. The preferred stockholders being part owners of the road, it could be sold only by their consent, or by due process of law. They could withhold their consent; they could sell their shares without a sale of the road; they may not have heard of a railroad's being sold without the owner's consent; and the possibility of such a sale of the Montreal may not have occurred to them. Even if a sale was thought of, their foresight may not have gone beyond to a division of the proceeds, operating as a partition of the property, and an unjust equalization of the positions of classes of owners. If this contingency was not foreseen, it did not become an element of the market price of either class of stock. Had a partition by sale been anticipated as an event likely to happen immediately, the preferred stock might not have been taken without a contract against such a partition as would be a great gain for one class and a great loss for another class: Numerous reported cases illustrate the limited knowledge of the future on which railroad and other business investments and enterprises are made and undertaken. In many corporations there have been and are different classes of stockholders, and in the omission of a provision against a division of capital (in cash, or in new stock) on the basis of the numerical proportion of shares, the Montreal seems not to have been an exceptional case. It is understood that such a provision is generally omitted.

It is said, that upon the dissolution of a corporation and the distribution of its assets, preferred stockholders have no priority over common stockholders, because the preference given and acquired relates to dividends and not to the capital stock; but that where a preference as to capital is contracted for (which is not generally the case), the rule is, of course, otherwise. Cook Stock and Stockh., s. 278. The result is controlled by the contract of the parties. Subject to the payment of debts, the proceeds of a sale of the Montreal road would have belonged to the stockholders, because the road was theirs. When A paid the company $100 and received a certificate of a share of preferred stock, the money became the property of ball the stockholders, and he became one of the owners of ball the corporate property, under a special contract concerning a preference in dividends but with no contract qualifying the evidence (furnished by their certificates) that their ownership of the capital stock was in proportion to the number of their shares; and a total or partial division of the capital among them would have followed that proportion, not by reason of a peculiar rule of corporation law, but because, by contract, they had determined the shares in which they owned the road, and no law could authorize a partition of it according to any other title than that by which they held it. Stock dividends and issues of preferred stock stand on the same ground as a partition of the whole road. The issue of a certificate to a new stockholder, making him one of the owners of the road, would be a conveyance of title which can be made only with the owner's consent, or by legal process. When a stock dividend is made, or new stock (preferred, common, or deferred) is issued, each stockholder is entitled to a portion of it, not merely because the issue may affect his right to dividends, but also because the new stock includes an undivided part of the road, of every part of which he is an owner, and because every shred of his title is as indefeasible and inviolable as the whole of it would be if he were the sole unincorporated owner of the road.

When the members of the old companies formed themselves into the Concord Montreal and united the two roads, a holder of a preferred Montreal share put into the capital of the new company no more of the Montreal road and rolling-stock than was contributed by an owner of a Montreal common share. And as the Montreal preferred and common shareholders had been equal, except in the particular in which they had established an inequality by their partnership contract, so in the new company equality and inequality are determined by the "agreement for union" by which the company was created and the rights of its members were fixed. In that agreement, the unequal value of the four existing classes of stock was not overlooked. Their inequality was adjusted in a manner that shows that the extent of the disparity in market price was well known; and it may properly be inferred that every important stipulation was inserted in the contract that the circumstances of the case were supposed to require. If the possibility of a sale of the road or an increase of capital had not been seen, the omission of a specific agreement for distribution among the owners of the road would have been accounted for. But the clause expressly stipulating that the capital might be increased to an amount requisite for buying the twelve roads and carrying into effect the agreements authorized by the act of 1889, shows that such an increase was thought of, and that either the mode of distributing the new stock was overlooked, or the classes of shareholders could not agree on any other measure of distribution than the numerical proportion of their shares, or that for some reason it was not considered necessary or expedient to make distribution the subject of an express and plain agreement.

The apparent difference in value (for a dividend purpose) of such classes of stock as the Montreal preferred and the Concord on the one hand, and the other two classes on the other, and the importance of the question whether distribution should be according to the number or according to the value of the shares, or whether it should be limited to one or two classes, are cogent proofs of the intention of the contracting parties. The stock of the new company was divided into four classes, because the Concord Montreal road was to be owned by four classes of shareholders, — three Montreal classes and one Concord class. It must be inferred that such equalities and such inequalities were introduced as were supposed to correspond, in some just degree, to the existing state of things, which included the market values of the three classes of Montreal stock and the single class of Concord. Had it been understood that if the whole capital were distributed in cash on a sale of the road, or a part of it were distributed in certificates by a stock dividend or by an increase of capital, the distribution should be made on some other basis than the ownership of the capital, for what reason could that understanding have been left to be inferred from the terms of a written contract containing no express allusion to the subject? If they had intended that on a division of the property the owner of one share should have more and another less than his fraction, how could they have failed to say how much more should go to one and how much less to the other? Probable as it is that the parties did not understand distribution would be equal (that is, in proportion to the number of shares held by each owner of the road), it seems equally probable that if any other rule or measure of distribution had been intended than the shares of the title by which the stockholders held the road, it would have been fully set forth, or at least distinctly and specifically mentioned, in the contract.

The third article of the contract is very explicit. "The capital stock of said new corporation shall be $4,800,000, divided into shares of the par value of $100 each, and into classes of the kinds and amounts following, . . . Class 1, to be known as ` . . . Montreal preferred stock,' shall consist of 8,000 shares, and shall be entitled to [specified dividends]. Class 2, to be known as `. . . Montreal new stock,' shall consist of 5,404 shares, and shall be entitled to such dividends . . . Class 3, to be known as `. . . Montreal old stock,' shall consist of 4,596 shares, and shall be entitled to such dividends . . . Class 4, to be known as `Concord stock,' shall consist of 30,000 shares, and shall be entitled to such dividends . . ." The fourth article is equally clear. "Said capital stock shall be apportioned among the stockholders of the parties hereto, as follows: 1. To holders of preferred stock of the . . . Montreal Railroad, one share of the stock of Class 1 for every share of said preferred stock held by them." By similar clauses, the other classes of stock are assigned to the proper classes of persons.

The classification is of the right to dividends, and there is nothing in its terms indicating that it is of anything else. Each owner of a share of the uniting companies is entitled to a share in the new company. A share of what? "The capital stock of said new corporation shall be $4,800,000, divided into shares of the par value of $100 each." There are 48,000 shares; each share is 1/48000 of the capital stock of the new firm; and the capital stock is ball the partnership property, real and personal. Every shareholder of every class is an owner of the Concord Montreal road not in proportion to the value of his former or his present shares, or his right to dividends (which materially affects the value of his share of the road), but in proportion to the number of his forty-eight thousandths of the capital stock. Of his title as a proportional owner (aside from the right to dividends), and his incidental, proportional power of controlling the management of the common property by his vote, there is no express or implied limitation. His unqualified right to vote is expressly recognized in s. 5 of the act of 1889. As a division of the whole capital, on a sale of the road, would be a division of property, a part of which is his, so an issue of new shares on an increase of the capital is a division of a part of his estate, no part of which can be taken from him without his consent or legal process. His right to his own property on a distribution caused by a sale of the road or by an issue of new shares, is as free from express qualification as his title to the realty and rolling-stock, and his right to vote. The fact that the contract which fixes with exactness his proportional ownership of the capital, so long as it remains undivided, does not expressly provide for a transfer of any part of his share to his partners on a total or partial division of capital, is conclusive evidence that no such transfer was intended.

There is, moreover, an insuperable difficulty in the question, What part of his share is to be transferred to others? On this point the contract is silent; and it certainly was not understood that on a sale of the road ball the proceeds would be paid to stockholders of Class 4, and that the entire property of Class 1 (entitled to 6 per cent. dividends before any are paid to Class 4) would be extinguished. A contract by which the former owners of the Montreal would lose its whole value by the union with the Concord, followed by a sale of the Concord Montreal (under eminent domain or other legal compulsion), cannot be implied. Nor is there any ground for implying such a distinction between a total and a partial division of the capital, that on a division of the whole capital Class 4 of the stockholders would take the whole, but on a partial division, by an issue of new shares, they would take less than the whole amount distributed. On a total or partial division of capital they must be entitled either to the whole amount divided, or to only their forty-eight thousandths of it. The contract does not allude to any other proportion or fraction as a measure by which a division of capital can be made. Inequitable as it seems, that on a division of the whole capital a holder of a share of Class 3 should receive as much as a holder of a share of Class 1 or Class 4, the payment of the whole capital to Class 4 would be open to equal objection on the score of justice. Between these inequitable results the contract makes no compromise. As to the intention of the parties, equity furnishes no argument in favor of the right of Class 4 to the whole capital, divisible on a sale of the road, or to ball that part of it divided by an issue of new stock. In the absence of an agreement for a different partition, there is nothing to prevent the proportional division that is one of the rights comprised in the proportional ownership of the property.

The fourth article of the contract provides that "The stock of the new corporation shall be full payment for the stock of the old corporation for which it is to be exchanged as aforesaid." This clause leaves no ground for a claim of any class that their forty-eight thousandths of the Concord Montreal road were not received in full payment for their surrendered shares. The clause would apparently have been superfluous but for the provision of s. 7 of the act of 1889, that $3,000,000 of the capital stock of the new company should be issued to the stockholders of the Concord in part compensation for their contribution to the capital of the new company, and that the balance of the $4,800,000 should be issued as compensation for the Montreal contribution. If that distinction between compensation and part compensation had not been annulled, it would have been necessary to look not only for competent evidence of a contract that further payment was to be made, but also for evidence of an agreed mode and amount, and to inquire whether an agreement was proved that payment was to be completed by giving Class 4 ball the shares of the other classes, or some ascertainable part of them, on a total or partial division of the Concord Montreal capital. But this subject is disposed of by the performance of the subsequent agreement that the stock of the new corporation should be received in full payment. If the expression "part compensation" in the new charter recognized the right of the Concord stockholders to insist upon further payment, it was, at most, a provision for their benefit, which they could waive in forming the new company "on such terms and conditions as" should be agreed to by themselves and the Montreal, and which they did waive by accepting 30/48 of the new company's stock in full payment as one of the "terms and conditions" of union.

The agreement that Class 1 shall be entitled to six per cent. "dividends from net earnings, . . . and shall never be entitled to greater dividends," and that "Classes 2 and 3 shall not be entitled to dividends from any source except that resulting from a saving of interest," is a restriction of the right to dividends of the described earnings and savings, and not of the right to dividends of capital. The word "dividends" is here used in its ordinary sense as a description of divided profits and gains arising from the use and management of the capital. "Dividends are of the earnings or product of the road, and not of, nor can be of, the corporate capital." Rorer Railroads 188. On a proper occasion there may be a dividend of capital, but in this contract there is no agreement that, on partition, the whole capital, or the whole of it that is divided, shall go to one class of its owners. It is incredible that the parties intended, if the state should take the consolidated road as soon as the union was completed, that the union should be nothing but a gift of the Montreal to the owners of the Concord. And if it is also incredible that the parties had a positive and distinct intention that no discrimination should be made between the classes on a total or partial division of capital, these negations do not entitle one class to all the new stock issued on an increase of capital. In the absence of competent evidence proving an actual intention at variance with that shown by ownership in common, no class of the common owners can be deprived of their property by partition.

II. By the notice of the annual meeting, held October 13, 1891, at which the company voted to increase the capital, the meeting was not called for the purpose of increasing the capital, within the meaning of s. 6, c. 148, Gen. Laws, which permits an increase of capital "at any meeting called for the purpose." The notice was, that the annual meeting would be held at a specified place and time "to act on the report of the board of directors, to choose a board of directors for the ensuing year, and to transact any other business that may be brought before the meeting." In their report, the directors recommended the increase of $1,200,000 that was voted at the meeting; and it is averred in the answer that this report "had been distributed generally among the stockholders several days before the meeting." The notice does not refer to the report as an annexed or as an accompanying document, nor in any way make it a part of the notice. The notice does not state that an increase of capital was one of the purposes for which the meeting was called, nor inform the stockholders that a question of increase would be submitted to them, or that there was or would be anything in the directors' report relating to that subject.

The company's first by-law contains this clause: "Any business within the power of the corporation may be transacted at annual meetings, although the subject-matter thereof is not specified in the notice." There was a similar by-law in Richardson v. Railroad, 44 Vt. 613, 619, and it may be a common regulation. It is evidently based on reasons on which the authorities have established a difference in the notices required for regular, and those required for special, meetings. Mor. Corp., ss. 479, 481, 482; Cook Stock and Stockh., ss. 594, 595, 598; Dill. Mun. Corp., ss. 262, 264; Mechem Public Officers, ss. 172-176; Paine Elections, ss. 384-387; Cool. Const. Lim. 759. In a Vermont case, the notice was that the annual meeting of the stockholders would be held at a specified place and time. The court said, — "A manifest distinction obtains between general stated meetings of a corporation and special meetings. . . . Stated meetings of a corporation are usually general, i. e., for the transaction of ball business within the corporate powers. . . . Where the meeting is stated and general, no notice is required either of the time or place of holding the meeting, or of the business to be transacted. Angel Ames Corp. 275. Such is the general law of private corporations . . . The annual meeting, of ball others, is the one when, not only usually, but always, ball business is expected to be transacted. And the common custom of a country is of great force in the construction of statutes as well as contracts. . . . The clerk here served a notice . . . stating the time and place of the meeting, and that it was the annual meeting of the company. This was certainly ball the notice which could be given of the annual meeting. As each corporator knew that it was competent at this meeting to transact ball business pertaining to the corporate interests, the very term, annual meeting, was, ex vi termini, notice to that effect; and it could have answered no good purpose to repeat this in the notice." Warner v. Mower,11 Vt. 385, 387, 391, 392, 394. "As a general rule, it may be safely affirmed, perhaps, that in regard to general meetings of the company, which are for the transaction of ball business, no notice of the particular business to be done is necessary." Redfield Railways, s. 21. In other authorities the rule is stated with material qualifications. In this case, the notice contained information which the by-law did not require it to give. The by-law would have been complied with by a notice of the time and place of the annual meeting.

The statutory provision that the capital can be increased at a meeting called for the purpose, is a part of the partnership contract, but being also a law of the state it cannot be suspended or repealed by any other power than that of making law. The bylaw is to be construed as if it contained a proviso excepting from its regulation of notices of annual meetings the business which cannot be legally done at those meetings without specific notice. If it were construed to allow an increase of capital at a meeting not called for the purpose by the notice, it would be inoperative in this case, because not authorized by s. 4, c. 147, Gen. Laws, which affirms the general rule of the common law that corporations may "adopt by-laws not repugnant to the laws of this state." The legislative power of altering the law of the land cannot be delegated to the defendants. The grant of power to increase capital "at any meeting called for the purpose," is a grant limited in an important particular. The limitation is a general law, applicable to an increase of capital under s. 10 of the act of 1889, and c. 3 of the act of 1891. DeLancey v. Insurance Co., 52 N.H. 581. If there is a lack of corporate capacity to increase capital at a meeting not called for the purpose, the want cannot be supplied by a bylaw. The clause "at any meeting called for the purpose" is to be so construed as to accomplish the legislative design. Its operation can be neither more nor less extensive than the end it was meant to be a means of attaining. If it was intended to be, not an absolute withholding of the power of increasing the capital at a meeting not called for the purpose, but a protection of stockholders against a special danger arising from their not having adequate information of a proposed increase, the question is whether the stockholders have had the intended protection.

In Rex v. Langhorn, 4 A. E. 538, on quo warranto, the question was whether a meeting of the burgesses of Berwick-upon-Tweed, at which the defendant was elected mayor of the borough, was duly assembled. The custom was for ball resident burgesses to receive a personal summons. One of them, Robertson, a fisherman, was not summoned, for the reason, as the notifying officer testified, that Robertson had several times told him not to summon him, as he was frequently out at sea. It was held that attendance was a public duty on the part of each burgess, that notice was required, not for his personal benefit, but as ball admonition to perform his public duty; that the public had a right to the security afforded by the service of notice on each member of the corporation, and that he could not waive the public right. The reason of that decision is not applicable to the present case. The requirement of a notice of a proposed increase of capital in the call for a railroad meeting is not a security for the performance of a public duty, but a protection of the private rights of each stockholder against the harm that might result from an increase of capital voted at a meeting not called for the purpose. The general rule is, that any one can waive a proceeding required for his exclusive benefit. When the object of a statute is completely accomplished, the law is often satisfied although some of its prescribed methods have not been followed. If, on a point affecting an individual's private rights, he has ball the information he is entitled to, telling him what he knows is not always an essential ceremony. If every Concord Montreal stockholder had attended the annual meeting in October with full knowledge of the proposed increase of capital, and had enjoyed ball desired opportunity to oppose it and to prepare for opposition, there would be strong ground to argue that the vote was not void for want of words in the notice that would have been as useless, for the practical purposes of the stockholders, as the most unmeaning procedure that could be devised.

"It is objected that notice of the meeting for the election of directors was not proved; but the objection is, in this case, unimportant, as from the evidence it appears that the subscribers here sued were present by proxy, and voted." Jones v. Turnpike, 7 Ind. 547. "We are inclined to the opinion that ball the stockholders being notified and present at the meeting, and no objection having been then made to the regularity of the notification, ball objections on that ground have been conclusively waived." Stebbins v. Merritt, 10 Cush. 27, 34. "The court rejected the offer of the defendant to prove that no notice had been given of the first election of directors. I think this was properly rejected, on the ground that the defendant could not avail himself of a neglect to give notice to any other stockholder. The defendant himself was present at that meeting, and voted, and was elected a director. He has not suffered by an omission to serve notice, and he is not in a situation to object as to others." Schenectady, etc., Plank Road Co. v. Thatcher, 11 N.Y. 102, 108, 113. There are other authorities on this point. Cook Stock and Stockh., s. 599; Dill. Mun. Corp., ss. 263, 263, 266; 18 Am. Dec. 103.

Sherwin v. Bugbee, 17 Vt. 337, was trespass against a tax collector of a school-district for taking the plaintiff's oxen in the collection of a tax voted at a meeting of the district. It did not appear from the record of the warning that the hour of the day at which the meeting was to be held was specified in the warning. The defendant offered parol evidence to prove that in the original warning for the meeting, which was posted up in the district, the hour of meeting was set at six o'clock in the afternoon. This evidence was excluded. The defendant offered to prove by parol evidence that ball the legal voters were present and voted at the meeting, and that they ball met at about six p. m. This evidence was excluded. The defendant then moved that the case be continued, and that the clerk of the district be permitted to amend his records so as to conform to the fact as to the warning. The motion was denied, and the plaintiff had judgment in the county court in apparent pursuance of an exceptionally harsh practice in tax cases that is obsolete in this state. The supreme court held that the defendant's parol evidence concerning the original warning, and the attendance of ball the voters at the meeting, was rightly rejected. "The subject of imposing taxes," say the court, "has always been scrutinized and narrowly watched; and a strict and rigid compliance with the law has been required to make the taxes legal. The case of an election has usually been construed more liberally." Decisions of other jurisdictions are necessarily considered here in view of the fact that an equal division of our public expenses is not now obstructed by strained and quibbling interpretation, a strict observance of frivolous formality, and a disregard of substance and principle. On quo warranto to determine title to office, such evidence as the defendant offered in Sherwin v. Bugbee is ordinarily received. Its competency in a tax or railroad case need not now be examined.

In Commonwealth v. Smith, 132 Mass. 289, on quo warranto to determine the defendant's title to the office of county commissioner, the question was upon the validity of the notice of the annual meeting in the town of Gay Head. The statute required "a warrant under the hands of the selectmen, directed to the constables or some other persons appointed by the selectmen for that purpose, who shall forthwith notify such meeting." The chairman of the selectmen posted on the door of the meeting-house a notice, not directed to constables or other persons appointed by the selectmen. Eight registered voters were absent from the meeting. Of those present, ball voted for county commissioner but one. Of the eight who were not present, five had actual notice of the time and place of the meeting and that a county commissioner was to be voted for, and did not remain away from the meeting on account of any want of notice; and of the other three, two were at sea and one was confined to his bed by sickness. "If these facts are competent," say the court, "it becomes apparent that the defects in the notice or warrant and in the mode of serving it worked no injury, and that the election was as fully attended as if ball the provisions of the law in calling the meeting had been strictly followed. These facts are competent, unless the provisions of the statute which have been disregarded are strictly mandatory, and we are of opinion that they are not . . . The main purpose of a warrant for meetings for such elections is to remind legal voters of their right and duty to vote, and of the officers to be elected. . . . If this election at Gay Head be declared void, there can be no new election for county commissioner at Gay Head, and the voters there will have been deprived of their votes without fault on their part, in consequence of the negligence of the selectmen." It was held that the election at Gay Head was not void.

Whatever may be the rule as to the admission of evidence to show that no actual injury resulted from a defective notice of a corporate meeting, it is necessary to consider the nature and extent of the protection intended to be given to stockholders by the requirement of a meeting called for the purpose of increasing the capital. The law applicable to this branch of the case was enacted not merely for the benefit of the owners of the Concord Montreal road in its present situation, but for the security derivable, by this and many other companies in various conditions, from a specific call to ball members to exercise their judgment with opportunity for inquiry and consultation, and to vote for or against an expenditure and expansion that might be judicious, and might be disastrous. If the plaintiffs could complain of their own want of information only, and not of an omission to give notice to other stockholders, the question might arise whether their objection, made at the meeting, to the sufficiency of the notice, would avail, or whether that objection would be obviated by their attending the meeting with ball the information a sufficient notice would have given them. But there seems to be no good reason for a construction of the statute that would limit the plaintiff's right of objection to the sufficiency of the notice as a means of giving themselves information. If a written notice had been given to each of them, stating that the meeting was called for the purpose of increasing the capital from $4,800,000 to $6,000,000, it might be claimed that they had ball the information on the subject of increase that the legislature intended they should have. But if the same information were withheld from other stockholders, the plaintiffs might be damaged by a vote to increase the capital, which could not have been passed on due notice of a meeting specifically called for the purpose. Each stockholder was entitled to the protection that would be furnished by such an assembly. This is the natural meaning of the statute, and the legislative purpose is proved by competent evidence. Each stockholder was entitled to the protection that would be furnished by such a notice as would inform those who read it of a meeting called for the purpose of increasing the capital. A proposed increase, which would be carried against the resistance of the plaintiffs alone, might be defeated by the arguments and votes of others, if ball were notified of the business to be done. If the passenger and freight stations in Concord were burned, the complaint of a single stockholder that a fire-bell was not rung would not be answered by proof that he had ball the knowledge any alarm would have given him, and was present and endeavored to save the property from destruction. If the presence of ball the stockholders at the October meeting was ball the protection the plaintiffs would have received from a meeting specially called, and ball they were entitled to, the defence fails because it does not appear that ball the stockholders were present.

III. A stock vote was not taken and does not appear to have been called for. It would seem that this objection is not seasonable because not made at the meeting, when it could have been obviated. As the injunction against the performance of the vote is sustained for insufficiency of notice, it may not be necessary to decide ball the questions raised in argument; but of some not yet adverted to, a decision may be needed. The necessity of an increase of capital authorized by law, is a question left to the judgment of the corporation. A stockholder does not lose his right to vote by being a director. The directors were not disqualified to vote as stockholders for the increase.

IV. Under the partnership contract, the Concord Montreal, at "any meeting called for the purpose, may increase . . . its capital stock and the number of shares therein; but the capital stock when so increased shall not exceed the amount authorized by law." Gen. Laws, c. 148, s. 6. Under the same contract, it may increase its capital to the amount requisite to buy the twelve roads named in s. 10 of c. 5 of the act of 1889, with a limitation of the dividends payable on the capital thus increased, and a compliance with ball the requirements of that chapter. Chapter 3, Laws 1891, authorizes the Concord Montreal to "increase its capital not exceeding $3,000,000, to be issued from time to time for the purpose of aiding an extension of the Whitefield Jefferson Railroad, and of such other branches or leased roads of the Concord Montreal Railroad as it is or may be authorized to construct, and for the purpose of providing additional depots, yards, and other terminal facilities at Nashua, Manchester, Portsmouth, Concord, Laconia, Lake Village, and elsewhere on the lines of its railroad, of providing additional tracks, wharves, and coal and other storage facilities at tidewater in Portsmouth, of changing the line and improving the terminal facilities at Groveton village, and for providing additional equipment for its railroad, and for the improvement of its railroad and of other property owned or leased by it."

The plaintiffs contend that for some of the purposes named in the act of 1891 and in the directors' report and recommendation there can be no lawful outlay of capital, old or new, without the unanimous consent of the stockholders, and that for such purposes the capital cannot be increased. Power to increase the capital for the purposes named in the act of 1889 is a part of the partnership contract, but the act of 1891 was passed after the contract was made. Without unanimous consent, the contract could not be altered by a statute permitting the company to build or buy a road not within the scope of the partnership articles. The stockholders' agreement that the company may increase the capital to an amount authorized by law (Gen. Laws, c. 148, s. 6) gives authority to enlarge, not the sphere of business for which the company was formed, but the capital employed in that business. A statute giving the state's consent to a purchase by the Concord Montreal of the Boston Maine road, or the plant of the Amoskeag Manufacturing Co., would not alter the partnership contract in which a corporate authority to make those purchases was not included.

The case does not state all the facts necessary to be known in a consideration of ball the items of proposed expenditure of new capital to which the plaintiffs object. The increase was voted "for the purpose of providing for expenditures authorized by law." The amount of increase corresponds with the directors' recommendation; and the natural inference is, that the company intended to expend the new capital for the eleven purposes recommended by the directors. Case, pp. 9, 10. The first item is "Extension of Whitefield Jefferson Railroad to Berlin." The report states that this piece of road "is now in process of construction, and will be ready for business about July 1, 1892." If the facts are what this statement seems to indicate, the objection to this item is not seasonably made. Chamberlain v. Lyndeborough, 64 N.H. 563; Hoyt v. Latham,143 U.S. 553. The second item is "To acquire the Profile Franconia Notch Railroad property." This is one of the twelve roads named in s. 10 of the act of 1889. The third item is "One half in the Franklin Tilton Railroad, built by this corporation and the Boston Maine . . . and now substantially completed." This is a branch of the Concord Montreal, and if it is substantially completed it is too late to object to the investment. The fourth item is the completion and improvement of "the Lake Shore Railroad, owned by the corporation." The completion and improvement of the Lake Shore, like the completion and improvement of the Montreal and the Concord, is within the scope of the partnership contract. The facts relating to the fifth and sixth items are not stated in the case. To the other five items it does not appear that any valid objection can be made. If another vote is passed to increase the capital, it may take a form that will not require further consideration of the details of the directors' report. A vote like that of October, "for . . . expenditures authorized by law," might be valid even if the plaintiffs should obtain an injunction against some investments which the company proposed to make. The company's scheme might embrace an amount of lawful outlays that would absorb ball the new capital.

Decree for the plaintiff.

CHASE, J., did not sit: the others concurred.