which the corporation was created, it has been set apart as a fund out of which debts are to be paid; in which case such fund cannot be withdrawn and appropriated to the use of the owners of stock.1 The capital of a corporation is generally fixed in the charter, or in the articles of association when the company is formed under the general law, and includes only the amount to be raised by subscription; and, unless authority is given in the charter or the general statute to do so, it can neither be increased nor diminished without the consent of the legislature. But in most railway charters authority is given to increase the capital stock; or if the charter does not contain such a provision, it is given by general law. Strictly speaking, the capital of a corporation is the sum which the legislature has permitted the corporation to invest, primarily, in its business, or which the corporation has itself decided so to invest. This gross sum is divided into shares of an equal amount and value; and the interest which the holder of these shares acquires in the property of the corporation, is measured thereby.* ence in its character as a stockholder. Indeed these qualifications pre-suppose that these corporate bodies are stockholders; for why else does the charter provide that they shall not transfer their stock, and may on notice withdraw it at par." 1 Curran v. Arkansas, 15 How. (U. S.) 304; Wood v. Dummer, 3 Mas. (U. S.) 308; Rand v. Hubbell, 115 Mass. 461. 2 St. Louis, &c. R. R. Co. v. Loftin, 30 Ark. 693; The State v. Morristown Fire Association, 23 N. J. L. 195. The amount of shares subscribed, and not the sum actually paid in, constitutes the capital of a corporation. Hightower v. Thornton, 8 Ga. 486; State Bank v. Milwaukee, 18 Wis. 281. 8 In re Ebbse Vale Steel, &c. Co., L. R. 4 Ch. D. 827. 4 In Connecticut (New Haven v. City Bank, 31 Conn. 106) it is held that the capital of a bank embraces all its property, real or personal. In that case by the terms of the charter the capital stock was to consist of five thousand shares of one hundred dollars each. There was also a provision in its charter, that the corporation, as soon as it was organized, should subscribe one hundred thousand dollars, being one thousand shares to the capital stock of the Hampshire and Hampden Canal Co., and in consideration of such subscription, which was duly made, that the capital stock of such bank should be exempt from taxation until the tolls collected by such canal company should be sufficient to pay a dividend of six per cent per annum, after which the stock of said bank should be liable to taxation the same as other bank stock. The canal company did not collect tolls to enable it to pay such a dividend, but the legislature subsequently passed a law providing that "the real estate belonging to any bank, over and above what may be required and used by such bank for the transaction of its appropriate business, shall be liable to be assessed and set in the list of such corporation in the town where such real estate is situated, and shall be liable to taxation to the same extent as if owned by individuals." The defendant bank, out of its capital stock, purchased a lot, and erected a building for its banking purposes, at a cost of $28,000; and a portion of this building which was not needed or used for its banking purposes, was rented to other parties for other uses and purposes. The value of such portion of the building was assessed at $6,000, and upon this sum a tax was assessed against the bank of the plaintiff. The defendant resisted the tax For instance, if the capital is divided into shares of the nominal value of one hundred dollars, the interest of the holder of a single upon the ground that its assessment was virtually an assessment upon its capital stock, and therefore a violation of the contract between it and the State; and the court sustained this view, holding that the capital stock of a bank embraces all its property, real or personal. In passing upon the question, SANFORD, J., said: "The absolute inviolability of the contract between the sovereign powers of the State and the City Bank, by which the former undertook that the capital stock' of the latter should be and forever remain free from taxation (until the happening of an event not yet arrived) is conceded. The only question between the parties is, what is the capital stock' thus exempted? The object for which a banking company is incorporated is well understood and needs no elucidation or remark. But in the solution of the question now submitted to us we may derive some assistance from the consideration that, although created for the purposes of trade, the corporation had originally nothing to trade in. All its property, its capital, its stock, was contributed by individual subscribers from their private funds, and was by them intrusted to its keeping and its management for their benefit, taking from it no tangible property in return, nothing but the evidence of their contributions and their consequent interest in the common fund or capital stock thus contributed. Originally then, the capital stock of the bank' was all the property of every kind, everything which the bank possessed. And this capital stock,' all of it, in reality belonged to the contributors, it being intrusted to the bank to be used and traded with for their exclusive benefit; and thus the bank became the agent of the contributors, so that the transmutation of the money originally advanced by the subscribers, into property of other kinds, though it altered the form of the investment, left its beneficial ownership unaffected; and every new acquisition of property, by exchange or otherwise, was an acquisition for the original subscribers or their representatives, their respective interests in it all always continuing in the same proportion as in the aggregate capital originally advanced. So that, whether in the form of money, bills of exchange, or any other property in possession or in action into which the money originally contributed has been changed or which it has produced, all is, as the original contribution was, the capital stock of the bank, held as the original contribution was, for the exclusive benefit of the original contributors and those who represent them. The original contributors and those who represent them are the stockholders. Each one of them holds an undivided portion of the entire stock, and together they hold all the stock of the corporation. The stock certificate which each of them holds is the muniment of his title, specifying his proportion of interest in all the property of the corporation, and all these stock certificates together represent the entire property of the bank, in whatever form it may exist. By the terms of the charter the capital stock of the bank was to consist of five thousand shares, of one hundred dollars each. Had that amount been subscribed and at once paid in, the money so accumulated would have been the capital stock of the bank, and as such exempted from taxation. And when one hundred thousand dollars of the money thus accumulated had been paid out by the bank on its subscription for stock of the Hampshire and Hampden Canal Corporation, that canal stock took the place of the money paid for it, and became pro tanto capital stock of the City Bank, and exempt, as the money was, from taxation. And so, when afterwards, for debts previously contracted, houses, lands, or goods were necessarily taken in payment, such houses, lands or goods became, in lieu of the money for which they were received, part of the capital stock, and entitled to the same exemption. Otherwise the canal stock thus purchased, and the houses, lands, and goods thus acquired, might be taxed, and thus the promised exemption, purchased by the shareholders, and assured to them by the charter, would be rendered share, in the entire property of the corporation, is as one hundred dollars is to the whole amount of the capital; and its real value is worthless and delusive. We see no reason for a distinction in this respect between real estate so taken by the bank in payment of a debt, and the real estate which is the subject of this controversy. The right to erect a building, suitable and proper for the transaction in it of the business authorized by the legislature, is undeniable. The grant of a right carries with it as an incident the grant of suitable and proper means to enable the grantee to exercise that right and to reap and enjoy its fruits. And the case states that the building erected by the City Bank was a suitable and proper one for a banking house in that locality. It became as legitimately the property of the bank, legally acquired and held under the charter, as the houses and lands taken in payment of debts previously contracted. The entire cost of the building was paid, and properly paid, out of the capital stock' existing in the form of money, and thus the building became what the money paid for it was, capital stock in its stead. In putting on the second story of the building the directors may have made an unprofitable, or otherwise ill-advised investment of the stock; but of such investment, unless it was illegal, none but the stockholders can complain. And if the bank has violated its charter by investing a part of its capital in a way prohibited, it may be liable to the forfeiture of its franchises, but this is not the time or the place for the infliction of such a penalty. But the primary object of the bank in erecting the building was the accommodation of the proper business of the bank, and the temporary renting of the room was but an incident to the ownership, neither affecting the title to the property nor the right to hold it free from taxation. We are satisfied that the prop erty in question is to be regarded as part of the capital stock of the corporation, and therefore exempted from taxation by the express provisions of the charter. We cannot, in the absence of explicit declarations to that effect, impute to the legislature an intention to provide merely that the shareholders should be indivi dually exempt from taxation on account of their respective interests in the property of the bank, while it retained the power and right to assess and tax all or any portion of that property against the bank itself. Such reservation of right would render the promised exemption a worthless figment. But it is said there is an obvious distinction between the real property of a corporation and the shares of capital stock in the hands of its stockholders, and we may add that there is the same difference between the personal property of the corporation and its stock in the hands of the stockholders; but this consideration goes but a very little way, if at all, toward the solution of the question now before us. That question is, whether the promised exemption, which confessedly covers the intangible ideal rights called shares in the hands of the stockholders, covers also the property, real and personal, in which the whole value of those shares consists; whether it is possible to impose a tax upon the latter, without having the entire burden of the imposition fall upon the former; and if it is not, whether the construction contended for by the town can be the true construction of the grant. And for the purposes of this question, we can see no difference between the real and personal property held by the corporation. The shares of the capital stock cover and include them both. In regard to corporations whose stock is not by the terms of their charters exempt from taxation, the statute is imperative, that all real estate belonging to any bank or insurance company, or other private corporation, over and above what may be required and used by such bank, &c., for the transaction of its appropriate business, shall be liable to be assessed and set in the list of such corporation in the town where such real estate is situated, and shall be taxed to the same extent as if owned by an individual. But that statute in no manner affects corporations whose stock or property is by their charters exempted from taxation. An examination of the cases to which our attention was invited measured, not necessarily by the capital of the corporation, but by the actual value of the property owned by the corporation.1 That is, while the nominal value of a share of the stock of a corporation is one hundred dollars, its actual value is either more or less than that sum, according to the actual value of the property of the corporation, after deducting its debts. Consequently, while the capital of a corporation may be expressly fixed at a certain sum by the legislature, so that it can neither be increased nor diminished by the corporation without the consent of the legislature, yet the actual value of the property employed in the prosecution of its business may lawfully (in the absence of any express provision to the contrary) be largely in excess thereof; and the sum in excess of the capital, after the liquidation of its indebtedness, is treated as “surplus" capital, and proportionately increases the value of each share of the stock. In a New York case 2 it was held that a limit imposed upon the capital stock of a corporation does not operate as a limitation upon the amount of property which it may own, either real or personal, or of the amount of its liabilities or outstanding obligations. Such a limit is rather regarded as the sum upon which calls may be made upon subscribers, and upon which dividends are to be paid to the stockholders. Accordingly it was held that where the capital of a corporation was limited to one million of dollars, the company was not thereby restricted from expending two millions of dollars in their business, and from incurring debts on bond and mortgage for such excess. Strictly, for most purposes, especially for the purposes of taxation, the capital of a railroad corporation is the sum subscribed by stockholders, or which is to be so subscribed, and does not include the lands granted to it, either by a State or by Congress. 3 by the counsel for the town, has failed to convince us of the incorrectness of the views above expressed. In no one of those cases has the precise question before us been decided, and in all of them the decisions seem to have been governed by some peculiar local statute and by considerations which we think inapplicable in the case before us." But in State v. Morristown Fire Association, 23 N. Y. L. 195; State Bank v. Milwaukee, 18 Wis. 281, a different view was adopted, and neither the property nor accrued profits were regarded as a part of the capital stock. 1 Jones v. Terre Haute, &c. R. R. Co., 57 N. Y. 196. 2 Barry v. Merchants' Exchange Co., 1 Sandf. (N. Y.) 280. 3 St. Louis, &c. R. R. Co. v. Loftin, 30 Ark. 693; Hightower v. Thornton, 8 Ga. 486; State v. Morristown Fire Association, 23 N. Y. L. 195. The accumulated profits which have never been divided are not a part of its capital stock for the purposes of taxation, or of exemption from taxation. State Bank v. Milwaukee, 18 Wis. 281. SEC. 16. Commissioners to take Subscriptions: Powers of. - It is often the case, especially where special charters are granted for the construction of a railroad, and the formation of a corporation for that purpose, that commissioners are appointed to open books and take subscriptions to the stock; and in such cases, the act of incorporation does not become operative until the subscribers to the stock are determined, and the commissioners have distributed it and decided who are to hold it. The securing of the subscriptions is a ministerial act, and may be performed by an agent, but the distribution of the stock is a judicial act, and requires the commissioners to act in person; and the presence of the whole board is necessary, although the act of a majority is binding.2 The commissioners in receiving subscriptions do not act in the capacity of agents or trustees for the subscribers, but rather in that of public officers; and if they omit to open the books for receiving subscriptions, or to apportion the stock according to the requirements of the statute, they may be compelled to perform these duties. by mandamus. If in the distribution of the stock it is assigned to any one not entitled to hold it, the apportionment is not void, but such subscriber will in equity be regarded as holding it in trust for all the subscribers or for the party entitled; and a party who claims to have been injured by a wrong distribution of stock, and who seeks redress, should file his bill in behalf of himself and of all others interested in the distribution, and should make all those to whom stock has been distributed defendants, so that the court can have all parties interested before them. The commissioners do not represent those parties to whom the stock has been distributed by them. The bill should also contain a prayer for a preliminary injunction, if that is desired. The complainant, by receiving his money deposited in payment of the first instalment, relinquishes all right to interfere in this mode. If the commissioners have a discretion to distribute the stock as they deem most for the interests of the corporation, they are not obliged to give a portion to each subscriber. Thus, where a distribution is required to be made among all the subscribers, and no discretion is vested in the commissioners, it must be made among them all in proportion to their subscriptions. But if the person making 1 Walker v. Devereux, 4 Paige Ch. White, 41 Me. 512, where a majority of (N. Y.) 239. the commissioners is held to be a compe tent quorum. 2 Crocker v. Crane, 21 Wend. (N. Y.) 217. But see Penobscot, &c. R. R. Co. v. |