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(The references are to the pages.)

187, 193, 194, 202, 219, 221, 224,

252, 399, 400, 541, 543. Wood Harvester Co. v. Jefferson,

122, 123, 442. Woods Motor Vehicle Co. v. Brady

-131, 571. Woodstock Iron Co. v. Richmond &

D. Extension Co.-121. Woodward v. San Antonio Traction

Co.—127. Woodward v. Thacher-496. Woodward v. Woodward—282. Woolman v. Wirtsbaugh—495. Woolmer v. Toby-404. Worth, Ex parte_364, 442, 443, 444. Worthington, In re_31, 161, Wright's Case-407, 474, 476. Wright v. St. Louis Sugar Co.

107. Wright Bros. v. Merchants & Plant

ers Packet C0.487, 416. Wyatt V. Metropolitan Board of

Works—165, 166.
Wyckoff v. Vicary137.
Wyld v. Hopkins-537, 561.
Wyoming Valley Ice Co., In re

187, 210, 316.

17, 22, 23, 24, 25, 26, 171, 173, 175, 176, 177, 178, 179, 186, 188, 189, 195, 196, 200, 202, 206, 281, 289,

305, 309, 328, 336, 337, 409, 514. Yeiser v. United States Board & Paper Co.-6, 12, 18, 20, 25, 28, 171, 172, 173, 181, 185, 193, 200, 308, 310. Yonkers Gazette Co. v. Jones—85,

122, 123, 408. Yonkers Gazette Co. v. Taylor—88,

132, 572. York Mfg. Co. v. Brewster—126. York Park Bldg. Ass'n v. Barnes

123, 408. Young v. Drake 344. Young Reversible Lock Nut Co. v.

Young Lock Nut Co.—126.


Zabel v. New State Tel. Co.-408. Zang v. Adams401, 449, 450, 459,

472. Zeigler v. Valley Coal Co.—125. Ziemer v. C. G. Bretting Mfg. Co.

-116, 119, 121. Zinc Carbonate Co. v. First Nat'l

Bank-308, 353, 356, 539.


Yale Gas Stove Co. v. Wilcox-4, 6,





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1. Introductory.
2. Judicial acceptance of the term “promoter."
3. Definitions of the term.
4. Circumstances that give rise to the relation.
5. — Sharing promoter's profits.
6. — Carrying on promotion by agents.

- Acting as vendor, vendor's agent, etc.
8. Bankers and solicitors, not promoters.
9. Subscribers for shares, not promoters.
10. Promoter's partners as promoters.
11. Corporations as promoters.
12. Use of the word promoter in America.
13. Meaning and effect of the term.
14. Fiduciary relation.
15. Inception of the relation.
16. The same subject.-Purchase of property with view to resale

to corporation.
17. The same subject.—Taking step in organization of cor-

18. The same subject.-An illustrative case.
19. Termination of the relation.

§ 1. Introductory.

Some preliminary steps in the organization of a corporation must necessarily be taken before a certificate of incorporation is prepared and signed, and further steps are necessary before the

company can have directors, officers, or agents, capable of rep::: resenting and acting for it. A corporation might, it is true,

be organized without any action being taken prior to the signing and filing of the certificate of incorporation, other than the preparation thereof. The further steps necessary for the complete legal organization of the company might be carried on by the incorporators, and all questions as to the business to be conducted by the company, the properties to be acquired by it, and the method of raising the necessary capital, could be left to the future determination of the directors when qualified. In practice, however, a corporation is organized for the purpose of carrying on some particular business, and the scope of this business, the properties to be acquired, the method of raising capital, and other matters, are agreed upon before any move toward the legal organization of the corporation is made. The negotiations relative to the molding of the contemplated company are therefore carried on by persons who, whatever their subsequent relation to the corporation, are, at the time, neither directors, officers, agents, nor even incorporators of the company. These preliminary negotiations involve matters of great importance to the future corporation and its stockholders, and many and difficult questions of law result therefrom. A designation for the persons by whom these negotiations are carried on is a matter of necessity. The term now in general use is “ promoter."

§ 2. Judicial acceptance of the term promoter.

The complete judicial acceptance of this term “promoter " is a matter of comparatively recent date. In some of the early cases, persons engaged in the formation of a corporation are spoken of as its “ projectors.” 1 Other cases of about the same period, though recognizing the obligations flowing therefrom, do not give any name to the relation in which such persons stand to the contemplated company.

1. Blain v. Agar, (1826) 1 Sim. 37, 5 L. J. Ch. 1; Society for Practical Knowledge v. Abbott, (1840)

2 Beav. 559; Foss v. Harbottle. (1843) 2 Hare 461, 489; Edwards v. Grand Junction Ry. Co., (1836) 5. Eastern Counties Ry. Co. v.

The word promoter, while undoubtedly employed in common parlance before that time, does not seem to have been used in any reported decision until after it had been used, and for the purposes of the act defined, in the Joint Stock Companies Act of 1844.3

“I dislike the use of the word 'promoter,'” said Lord Justice Cotton, as late as 1887.4 The word had, however, been judicially recognized before that time, even in the House of Lords.5

Lord Justice Lindley in his work on Companies Law, published in 1889,6 said, “ There has been considerable discussion with reference to the meaning of the word promoter, and also with reference to his relation to the company he is endeavoring to form. The word itself has never been defined; but it is used in common parlance, and also in Section 38 of the Companies act, 1867, to denote those persons who bring the company into existence, by taking an active part in forming it, and in procuring persons to join it as soon as it is technically formed.”

1 Mylne & Cr. 650, 672, 7 Sim. 337; Preston v. Liverpool Man. chester, etc., Ry. Co., (1851) 1 Sim. N. S. 586, 7 Eng. Law & Eq. 124, 21 L, J, Ch. N. S. 61.

2. Hichens v. Congreve, (1828) 4 Russ. 562; same v. same, (1829) 1 R. & M. 150; same v. same, (1831) 4 Sim. 420, 427.

3. Stat. 7 and 8 Vict., Ch. 110,

Hawkes, (1855) 5 H. L. Cas. 331, 856; Caledonian, etc., Ry. Co. v. Magistrates of Helensburgh, (1856) 2 Macq. 391, 407, 2 Jur. N. S. 695; Tyrrell v. Bank of London, (1862) 10 H. L. Cas. 26, 11 Eng. Rep. 934; See also Reynell v. Lewis, (1846) 15 M. & W. 517, 528; In re AngloGreek Steam Co., (1866) L. R. 2 Eq. 1, 35 Beav. 399; Twycross v. Grant, (1877) L. R. 2 C. P. D. 469.

6. Lindley on Companies Law, 5th ed., (1889) 346; 6th ed., Vol. 1, p. 481.

$ 3.

4. Ladywell Mining Co. v. Brookes, L. R. 35 Ch. Div. 400, 411, 17 Am. & Eng. Corp. Cas. 22.

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