are, however, ordinarily better served by compelling one, who rendered services under an employment by the promoters, to seek his compensation from his employers, and by allowing only those to recover directly from the corporation who have no one else to whom they may look for payment. One rendering services under employment by the promoters may recover his compensation from the corporation if the act of incorporation provides that such expenses shall be paid by it.46 The intent of the statute must, however, be clearly expressed, as it will otherwise be interpreted as intending payment in the first instance by the promoters and their reimbursement by the corporation.47 A suit against the corporation may be maintained by one who rendered services under an agreement with the promoters that he should be compensated by the corporation; provided that the corporation after its organization agreed to be bound by the terms of the promoters' contract.48 A promoter rendering professional services upon the organization of a company has ordinarily no right of recovery against 11 Weekly Law Bulletin 285; City Bldg. Assoc. v. Zahner, 6 Ohio Dec. Reprint 1068, 10 Am. Law Record 181. Natl. Pennsylvania.-Merchants' Bank v. Eckels, 191 Pa. 372, 43 Atl. 245. United Kingdom and Colonies.Terrell v. Hutton, 4 H. L. Cas. 1091, reversing Terrell's Case, 2 Sim. N. S. 126; In re Tilleard, 3 DeG. J. & S. 519. 46. In re Tilleard, 3 DeG. J. & S. 519, but see In re Skegness & St. Leonard's Tramways Co., L. R. 41 Ch. Div. 215. 47. See In re Skegness & St. Leonard's Tramways Co., L. R. 41 Ch. Div. 215; In re Kent Tramways 48. McDonough v. Bank of Houston, 34 Tex. 309. (See, however, Weatherford, etc., R. R. Co. V. Granger, 86 Tex. 350, 358, 24 S. W. 795, 40 Am. St. Rep. 837). See Teeple v. Hawkeye Gold Dredging Co., 137 Iowa 206, 114 N. W. 906; also Stillwell v. Spokane Alarm Co., 66 Wash. 703, 120 Pac. 85. his fellow promoters,19 and should, therefore, be allowed to recover compensation for such services directly from the corporation.50 One who assists in the promotion of a corporation can recover compensation from those promoters only, who employed him or in some way authorized or sanctioned his employment.51 The question as to whether a particular promoter has been sufficiently 49. See post, §§ 306, 317. 50. Muirkirk, etc., Rys., 10 Scots Law Times 247, 249, affirmed, (sub nom. Muir v. Forman's Trustees) Sess. Cas. 5 Fraser 546; Edinburgh Northern Tramways Co. v. Mann, Sess. Cas., 23 Rettie 1056. 2 51. McEwan V. Campbell, Macq. 499; Giles v. Smith, 11 Jur. 334; Nevins v. Henderson, 5 Ry. & Can. Cas. 684; Batard v. Hawes, 2 El. & Bl. 287; Forrester v. Bell, 10 Ir. L. R. 555, and see Bremner v. Chamberlayne, 2 Car. & K. 560, and ante, § 77, and also post, § 316. In Jones v. Gould, (200 N. Y. 18, 92 N. E. 1071, reversing, 133 App. Div. 889, 118 Supp. 1116, which followed 123 App. Div. 236, 108 Supp. 31. See same case on later appeal, 209 N. Y. 419, 103 N. E. 720, affirming, 152 App. Div. 881, 136 Supp. 600), the plaintiff alleged that he had, at the request of the defendants, acting as syndicate managers, advanced moneys for the examinaton of certain properties and for the purchase thereof, and caused a corporation to be organized to which title to said properties was conveyed, and that he was ready and willing to convey to the defendants all the capital stock of the corporation or title to the properties, upon the payment of his expenses and reasonable compensation for his services, but that the defendants had failed and refused to make such payment. The Appellate Division held that the syndicate managers acted as agents for their syndicate, a disclosed principal, and were therefore not personally liable to the plaintff for the contracts made by them as such agents. The Court of Appeals, however, held that as the syndicate agreement provided that each subscriber should be liable only to the syndicate managers and then only to the amount of his subscription, it was the intention that the subscribers should incur no liability to third parties, and if that intention was effectual in law, then the syndicate managers were not authorized to pledge the credit of the subscribers; that if it should be assumed that under the law, the subscribers to the syndicate agreement became partners as to third parties despite their agreement not to become such as among themselves, then the syndicate managers, being themselves members of the syndicate, were principals equally with the other subscribers and jointly liable with them, and that the objection as to the non-joinder of the other syndicate members, not having been taken by demurrer or answer, was waived. connected with the employment is one of fact 52 and an authorization or sanction will be readily inferred.58 An actual employment, express or implied, and the rendition of services, must be shown. A claim for compensation cannot be founded upon the fact that suggestions made by the plaintiff were accepted and acted upon by the promoters.54 One who has rendered services under an express contract must prove that he performed the contract according to its terms,55 or that such performance was prevented by his employer.56 If the express contract is, because of its terms, unenforceable, compensation may, perhaps, be recovered upon a quantum meruit.57 The promoter may save himself from personal liability by exacting from those assisting him in the promotion, a stipulation that they will not hold him personally responsible for their compensation, or that they shall be paid only when the corporation has paid the promoter.58 If the employees of the promoter agree that they shall receive their compensation only when the promoter has been paid by the corporation, they cannot recover from the promoter if he is for any reason unable to obtain satisfaction from it.59 The intention that the promoter shall not be per 52. Riley v. Packington, L. R. 2 C. P. 536, and see ante, § 77, and post, 316n. 53. Sproat v. Porter, 9 Mass. 300, and see ante, § 77, and post, § 316n. 54. Flaherty v. Murray, 60 N. Y. App. Div. 92, 69 Supp. 675, appeal dismissed, 172 N. Y. 646, 65 N. E. 1116. 55. Connell V. McWatters, 54 Pitts. Legal Journal (O. S.) 69, and see post, § 309. It has been held that it is no answer to a promoter's claim for reimbursement for moneys expended by him, that he has failed to perform an agreement for the financing of the corporation made between himself and another promoter but not adopted by the corporation. Hearther v. Southern Power & Milling Co., 16 Pa. Dist. Ct. 198. 56. Eastman v. Blackledge, 171 Ill. App. 404. Compare Gorgier v. Morris, 7 C. B. N. S. 588. See also post, § 309. 57. Sullivan v. Detroit, etc., Ry., 135 Mich. 661, 98 N. W. 756, 64 L. R. A. 673, 106 Am. St. R. 403. 58. Parsons v. Spooner, 5 Hare 102; Giles v. Smith, 11 Jur. 334, and see ante, § 77, and see post, § 316. 59. See Wheeler v. Fradd, 14 sonally liable to those employed by him must, however, be clearly expressed, for the courts are inclined, in case of doubt, to fasten the responsibility upon the promoter.60 If one employed by the promoter to perform services preliminary to the organization of the company agrees to hold the promoter free from personal liability, there is, in case his claim for services be, after the successful organization of the corporation, rejected, some difficulty in granting him relief. If the services rendered were of such character that the benefit thereof was received by the corporation at the moment that it achieved legal existence, it cannot be said that the corporation by accepting such benefits impliedly agreed to pay therefor. The obvious injustice of not granting any compensation for services duly rendered and fully enjoyed should, whenever possible, be avoided by interpreting the agreement as intending merely that the promoter shall not be made to pay for the services rendered if he fails to organize and float the corporation.62 Such interpretation, while preventing what amounts to a fraud on his part, works no hardship upon the promoter, as he can recover from the corporation, as one of his disbursements upon the promotion, the moneys which he is made to pay to his assistants.63 61 Times Law Rep. 302, and see ante, § 77n. 60. See Scott v. Lord Ebury, L. R. 2 C. P. 255, 36 L. J. C. P. 161. See ante, § 77. 61. See discussion under §§ 84 and 87, ante. See also ante, § 58. But see City Bldg. Assn. v. Zahner, 6 Ohio Dec. Reprint 1068, 10 Am. L 62. The question as to the understanding of the parties may in some cases be left to the jury. See Higgins v. Hopkins, 3 Exch. 163. See post, § 316. 90. Basis of rule against secret profits. 91. Manner of taking profit immaterial. 92. Taking shares as compensation. 93. Taking commission or other compensation on sale to corporation. 94. Accepting gift of money, qualifying shares, or other thing of value. 95. Profit made by purchase and resale to corporation. 96. Secret collateral agreements. 97. Profits made in sustaining the market. 98. Other collateral profits. 99. Profits of business carried on with existing concern pending incorporation. 100. Absence of dishonest intent, or of injury to the corporation, immaterial. 101. Distinction between "secret profits," and sale of promoter's property to corporation. 102. Restrictions upon sale of promoter's property to corporation. 103. Necessity of determining whether promoter acquired property before, or after, he entered upon relation. 104. What is deemed acquisition of property. 105. Property acquired by gift. 106. Promoter's rights under contract afterward modified. 107. Expired options. 108. Promoter who acquired property before commencement of relation, sometimes treated as though he had acquired it thereafter. § 89. Introductory. Promoters are, according to the weight of modern authority, entitled to reasonable compensation for their services upon the |