expense of the proposed works have been subscribed for, &c. 39. Where a railway bill is about to be brought into parliament, and only a small number of the shares subscribed for, it is no uncommon thing for the members of the provisional committee, or some of the other parties mainly interested in the success of the proposed undertaking, to subscribe for such additional shares as are requisite to make up the number fixed by the above rule, in order to enable the act to pass. This is done upon the understanding that the additional shares thus subscribed for are to be held in trust for the company, and that the immediate subscribers are to be exonerated from all personal liability in respect of them. Upon the passing of the act, steps are usually taken to give effect to the above understanding, either, it may be, by a release and abandonment of all interest in such additional shares made on the part of the holders to the company, or by a resolution of the company ordering that the trusts be annulled and the shares transferred to some officer of the company to hold at their disposal. The question that arises in any such case is of course as to the effect of such a transaction,-whether the subscription is to be considered a fraud on the legislature, and the bill obtained in consequence of it, and every thing done under that bill a nullity or not. The answer would seem to be obvious, viz. that it is for the houses of parliament to determine what is a subscription for shares that will satisfy them; consequently, if they are duly satisfied that such additional subscriptions are sufficient within the view and construction of their own order, and think themselves authorized, upon the strength of them, to sanction the passing of the bill, a court of law cannot take upon itself to say, simply on such a state of facts, that those subscriptions are a fraud and a nullity, and that the houses of parliament allowed themselves to be entrapped into the measure of passing the bill by a mere colourable compliance with their own orders. Such subscriptions must then, it seems, be deemed good; and those making them substantially holders of such shares, liable in respect of them to all the operations which are to be performed by the shareholders in general, and at the same time possessed of the like liberty of dealing with those shares, that any ordinary subscriber for a less quantity of shares has of dealing with his. If the subscription is, in the first instance, valid, it cannot, it is conceived, become of no avail, because subsequently the parties, who have entered into so large a subscription, take certain steps, unauthorised by the act, and therefore, of necessity, wholly ineffectual, for the purpose of escaping from the obligations imposed on them by their subscription. On the contrary, the first act must, it seems, be deemed still valid, and the second invalid; the subscription good, and the means taken to effect a subterfuge from it void; and the parties consequently remain, as they were originally, bound to make good their subscriptions, notwithstanding any secret acknowledgment of trust, or any declared intention on the part of the company to relieve them from their responsibility as trustees. Hence, when calls are made on the shareholders, they are as much liable as the other shareholders; and so far from their having an equity, under the supposed circumstances, to be relieved against the payment, a court of equity would never allow the directors of the company so to proceed as to make calls upon the general body of the subscribers, and to make none in respect of such additional shares. (n) 40. Although, where parties take shares in trust for the company, they are primarily liable to the payment of calls like ordinary shareholders, still, it is conceived, like any other trustees, they have a right to be reimbursed by their cestui que trusts any such outlay, as an expense incurred in the execution of their trusteeship. (0) Parties, in short, taking shares under such circumstances must be regarded as quasi guarantors of the success of the undertaking; whatever be the ultimate event of such undertaking, whether it fail or prosper, they must pay their contributions in common with the other members of the company; but in the latter case they may, it seems, come upon the funds of the company to reimburse themselves what they are out of pocket on account of the company. From the principle just laid down, viz. that parties subscribing for the above purpose become substantially subscribers, and so stand on the same footing as ordinary shareholders, it would seem to follow that they must likewise be entitled to all the privileges of shareholders, such, for instance, as the (n) Preston v. The Grand Collier Dock Company, 2 R. Cas. 358; S. C. 11 Sim. 328; S. C. nom. Preston v. Guyon, 19 Law Journ. Ch. 73; Mangles v. The Grand Collier Dock Company, 2 R. Cas. 359; S. C. 10 Sim. 519. See also Playfair v. The Birmingham, Bristol and Thames Junction Railway Company, 1 R. Cas. 640. (0) Judgment of Vice-Chancellor in Preston v. The Grand Collier Dock Company, ubi supra. attending meetings and voting, acting as directors (supposing them, that is to say, to be in other respects qualified), and the like. The validity, therefore, of meetings and of acts done at such meetings cannot be disputed, because that, to constitute the requisite number of shareholders at any such meeting, such persons must be taken into account. (p) SECT. 4.-Of the Rights and Liabilities incidental to the above State of Things. I. Internal Rights and Liabilities of Shareholders. 41. Under this branch of our subject a twofold state of rights and liabilities presents itself for consideration 1st, between the subscribers themselves; 2nd, between the subscribers and third parties. The first head again subdivides itself into two, according as the subscribers are viewed as one homogeneous body, or as distinguished into simple subscribers and the governing body or directory. 42. I. INTERNAL RIGHTS AND LIABILITIES. (q)— Subscribers viewed simply as one body, without regard (p) See note (n), ante, p. 40. (4) It has been assumed in the text that the parties, whose rights and liabilities it is proposed to investigate, have signed the subscribers' deed and parliamentary contract, the prior state of things being necessarily, from the very nature and end of parliamentary companies, limited in their case to a very brief period. The present condition, however, of railway speculation in this kingdom is such, as renders it by no means improbable that to the differences established between them by the terms of their association. Regarded in this light, questions may arise touching this prior state of things; and it may therefore be proper briefly to consider the rights and liabilities of parties while so circumstanced. Now there are two possible combinations of events that require to be here considered; first, where the project goes off before the arrival of the time for the execution of the subscribers' agreement and the parliamentary contract. The second, where though that time is arrived, yet holders of letters of allotment neglect or refuse to sign the above instruments. In the first case the subscribers may, generally speaking, recover the amount of their deposits. (Nockells v. Crosby, 3 B. & C. 814). In the latter the exact relative position of the parties must depend on the terms of the prospectus, taken in conjunction with the letter of application for shares and the letter of allotment. As a general rule then, it would seem that a party who applies for shares and receives an allotment thereof in pursuance of such application, cannot afterwards withdraw from the undertaking to which he has thus acceded, and discharge himself of the attendant liabilities, without the consent of the other subscribers. (See Kidwelly Canal Company v. Raby, 2 Price, 93. As to the effect of a transfer, see post, p. 45, &c.). If such a party therefore subsequently refuse to pay his deposit, or to execute the subscribers' agreement and parliamentary contract, semble, an action would lie against him at the suit of the provisional committee, the very act of his application for shares (where at least it contains, as it usually does, an engagement to accept the shares if allotted to him, &c.), followed up by the subsequent allotment, irrevocably binding him to undertake all the liabilities contemplated thereby. Or, supposing the interests of the undertaking required it, it might be competent for the committee to file a bill in equity against the defaulters to enforce a specific performance of that engage ment. Although by the express terms of the letter of allotment, the allotment is to be void, in case of the allottee failing to comply with the conditions it imposes on him, yet this cannot, it should seem, be construed to give an option to the allottee to avoid the allotment, by neglecting or refusing to comply with |