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SECTION 68. Liability of the corporation as affected by nature of par

ticular agreement. 69. Varying written agreement of promoter. 70. Subscription agreements. 71. Notice to promoter as notice to the corporation. 72. Admissions of promoter. 73. Enforcement by corporation of contract made by promoter. 74. Right of corporation to conveyance of property purchased

for it by promoter. 75. Effect of instrument naming projected corporation as

grantee. 76. Title to property which corporation is expressly organized

to acquire.
77. Liability of promoter on contract made for corporation.
78. Liability of promoter after obligations are assumed by cor-

poration.
79. Enforcement of contract by promoter.
80. Pleading the promoter's contract.

§ 46. Power of promoter to make contract for corporation.

The law is well settled that contracts made for a projected corporation by its promoters, are not binding upon it, and this has been held to be so even though the promoters, after the organiza

1. Federal.-Winters v. Hub Min- Co. v. Platt, 5 Colo. App. 515, 39 ing Co., 57 Fed. Rep. 287; Weiss v. Pac. 584; Colorado Land & Water Arnold Print Works, 188 Fed. Rep. Co. V. Adams, 5 Colo. App. 190, 201, 688. In re Ballou, 215 Fed. Rep. 37 Pac. 39, 42-43; Miser Gold Min810, 812.

ing & Milling Co. v. Moody, 37 Colo. Alabama.—Moore & Handley 310, 86 Pac. 335. Hardware Co. v. Towers Hardware Florida.-Sumner-May Hardware Co., 87 Ala. 206, 6 So. 41, 13 Am. Co. v. Scally, 66 Fla. 93, 62 So, 900. St. R. 23.

Illinois.-Park v. Modern WoodCalifornia.—Morrison V. Gold men of Am., 181 Ill. 214, 234, 54 Mountain Gold Mining Co., 52 Cal. N. E. 932. 306; Hawkins V. Mansfield Gold Indiana.-Cushion Heel Shoe Co. Mining Co., 52 Cal. 513; Peek v. v. Hartt, 181 Ind. 167. 103 N. E. Steinberg, 163 Cal. 127, 124 Pac. 1063, 50 L. R. A. N. S. 979. 834.

Iowa.-Stevenson v. Dubuque L. Colorado.- Arapahoe Investment & L. Min. Co., 34 Iowa 577; Carey tion of the company, constitute all its stockholders, officers and A corporation cannot, before it has achieved legal existence, have agents or enter upon contractual relations. One might, says the Supreme Court of Illinois, as well say that a child in ventre sa mère may enter into a contract, or that its parents may bind it by contract, as that a corporation may enter into any contract, or transact any business, before it has a full and complete organization and existence as an entity.

v. Des Moines Co-op. Coal & Min. Co., 81 Iowa 674, 47 N. W. 882.

Louisiana.—Bradshaw v. Knoll, 132 La. 829, 61 So. 839; Shreveport Nat'l Bank v. Maples, 119 La. 41, 43 So. 905.

Massachusetts.-Holyoke Envel ope Co. v. U. S. Envelope Co., 182 Mass. 171, 65 N. E. 54; Penn. Match Co. v. Hapgood, 141 Mass. 145, 7 N. E. 22; Abbott v. Hapgood, 150 Mass. 248. 22 N. E. 907, 5 L. R. A. 586, 15 Am. St. Rep. 193; Bradford 5. Metcalf, 185 Mass. 205, 70 N. E. 40.

Michigan.-Sullivan v. Detroit Y. & A. A. Ry. Co., 135 Mich. 661, 98 N. W. 756, 64 L. R. A. 673, 106 Am. St. R. 403; Carmody v. Powers, 60 Mich. 26, 26 N. W. 801, 13 Am. &

N. J. Eq. 298, 81 Atl. 1132; Hudson Milling Co. v. Higgins, 85 N. J. Law 268, 88 Atl. 1079.

New York.-Munson V. Syracuse G. & C. R. R. Co., 103 N. Y. 58, 75– 76, 8 N. E. 355, 29 Am. & Eng. R. R. Cas. 377 (citing 1 Redfield on Railways 9); Rogers v. N. Y. & Texas Land Co., 134 N. Y. 197, 210211, 32 N. E. 27, 48 St. Rep. 263; Bond v. Atlantic Terra Cotta Co., 137 App. Div. 671, 677, 122 Supp. 425, followed, 151 App. Div. 938, 135 Supp. 1101, affirmed, 210 N. Y. 587, 104 N. E. 1127; Berridge v. Abernethy, 24 Weekly Dig. 513; Metzger v. Knox, 77 Misc. 271, 136 Supp. 681, aff'd, 153 App. Div. 911, 137 Supp. 1129; Matter of Rochester H. & L. R. R. Co., 50 Hun 29, 18 St. R. 654, 2 Supp. 457.

Cf. McDermott v. Harrison, 56

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Missouri.-Davis V. Maysville Creamery Ass'n, 63 Mo. App. 477; State v. People's U. S. Bank, 197 Mo. 574, 591, 94 S. W. 953, 957; Van Noy v. Central Union Fire Ins. Co.. 168 Mo. App. 287, 153 S. W. 1090

New Jersey.-Seacoast R. R. Co. . Wood. 65 N. J. Eq. 530, 537, 56 Atl. 337, affirmed (sub nom. At lantic City R. R. Co. v. Wood), 78

where Cullen, J. expresses a doubt that the rule that the promoters cannot bind the corporation applies to a mere trading corporation.

Ohio.-Dayton, etc., Turnpike Co. V. Coy, 13 Ohio St. 84.

Tennessee.-Pittsburg & Tennessee Copper Co. v. Quintrell, 91 Tenn. 693, 20 S. W. 248.

Texas.-Weathersby V. Texas & Ohio Lumber Co., — Tex. Civ. App. -, 146 S. W. 243; Am. Home Life Ins. Co. v. Jenkins, - Tex. Civ. App. -, 138 S. W. 424; Weatherford M. W. & N. W. Ry. Co. v. Granger, 86 Tex. 350, 24 S. W. 795, 40 Am. St. R. 837; Exline-Reimers Co. v. Lone Star Life Ins. Co., Tex. Civ. App. - , 171 S. W. 1060.

directors.

Utch.-Wall v. Niagara Min. & Sm. Co., 20 Utah 474, 59 Pac. 399; Long v. Citizens Bank, 8 Utah 104, 29 Pac. 878; Utah Optical Co. v. Keith, 18 Utah 464, 56 Pac. 155; Tanner V. Sinaloa Land & Fruit Co., 43 Utah 14, 134 Pac. 586.

Washington.—Chilcott v. Washington State Colonization Co., 45 Wash. 148, 88 Pac. 113.

West Virginia.--Richardson V. Graham, 45 W. Va. 134, 30 S. E. 92.

Wisconsin.-Pratt v. Oshkosh Match Co., 89 Wis. 406, 62 N. W. 84; Buffington v. Bardon, 80 Wis. 635, 50 N. W. 776.

United Kingdom and Colonies.Caledonian & Dumbartonshire Junction Ry. Co. v. The Magistrates of Helensburgh, 2 Macq. 391, 2 Jur. N. S. 695; Preston . Proprietors of Liverpool, Manchester, etc., Ry., 5 H. L. Cas. 605; Touche v. Metro politan Ry. Warehousing Co., L. R. 6 Ch. App. 671; In re Empress En gineering Co., L. R. 16 Ch. Div. 125; Gooday v. Colchester & Stour Valley Ry. Co., 15 Eng. Law & Eq. 596, 17 Beav. 132; In re Hereford & South Wales, Waggon & Engineering Co., L. R. 2 Ch. Div. 621, 35 L. T. N. S. 40; Coit v. Dowling, 4 N. W. Terr. 464.

See cases cited in note to Oakes V. Cattaraugus Water Co., 26 L. R. A. 544; and note to Cushion Heel Shoe Co. v. Hartt, 50 L. R. A. N. S. 980.

But see Chicago Bldg. & Mfg. Co. V. Talbottom, etc., Co., 106 Ga. 84, 31 S. E. 809.

The negotiations of the promoter

may, however, be admitted in evidence to aid in determining the understanding afterwards arrived at between the corporation and the other contracting party. First Nat'l Bank V. Armstrong, 42 Fed. Rep. 193, 195.

The promoters' contracts may be made binding upon the corporation by statute. See Railways ConStruction Facilities Act (Stat. 27 & 28 Vict, Ch. 121), 8 30, of which provides that “Contracts relative to the purchase or taking of lands for the railway, entered into by the promoters before the incorporation of the company by the certificate, shall be as binding on the company as if they had been entered into by the company."

2. Battelle V. Northwestern Ce ment & Concrete Pavement Co., 37 Minn. 89, 33 N. W. 327, and see Weatherford M. W. & N. W. R. R. Co. v. Granger, 86 Tex. 350, 357, 24 S. W. 795, 798, 40 Am. St. Rep. 837.

Contra Pearsall v. Tenn. Central Ry. Co., 2 Tenn. Ch. App. 682, 709– 710; Ruttle V. What Cheer Coal Min. Co., 153 Mich. 300, 117 N. W. 168.

Cr. Paxton v. Bacon Mill & Mining Co., 2 Nev. 257, 260, and see post, $8 67, 71.

The corporation may, in some cases, be estopped by the acts of the persons who afterwards create it, own all its capital stock, and constitute its directors and officers. Force v. Sawyer-Boss M'f'g Co., 111 Fed. Rep. 902, afirmed, 113 Fed.

§ 47. Power of promoter to make contract for corporation after

granting of charter. When a charter has been granted the corporation has in a sense achieved legal existence. The promoters are, however, not the agents of the corporation and cannot contract for, or otherwise represent it, and the company is not bound by the engagements made by them on its behalf pending complete organization. The

180 Fed. The 911 and returers &

Rep. 1018, 51 C. C. A. 592; National United Kingdom and Colonies.Conduit M'f'g Co. v. Connecticut Gunn v. London & Lancashire Fire Pipe M'f'g Co., 73 Fed. Rep. 491; Ins. Co., 12 Com. Bench N. S. 694; Macey Co. v. Globe Wernicke Co., Payne v. New South Wales, etc., 180 Fed. Rep. 401, 103 C. C. A. 547. Co., 10 Exch. 283, and see HutchSee post, 88 71 and 67.

ison V. Surrey Consumers, etc., 3. Gent v. Manufacturers & Mer- Ass'n, 11 C. B. 689. chants Ins. Co., 107 Ill. 652, 658, 6 Nor have the incorporators power Am. & Eng. Corp. Cas. 588.

to contract for the corporation 4. Illinois.—Gent v. Manufactur- pending its complete organization. ers & Merchants Ins. Co., 107 Ill. (Moore & Handley Hardware Co. v. 652, 658, 6 Am. & Eng. Corp. Cas. Towers Hardware Co., 87 Ala. 206, 588; Western Screw & Manu- 6 So. 41, 13 Am. St. Rep. 23; Blood facturing Co. v. Cousley, 72 111. v. La Serena L. & W. Co., 113 Cal. 531.

221, 45 Pac. 252; Safety Deposit Kansas.-Whetstone V. Crane Life Ins. Co. v. Smith, 65 111. 309; Bros. M'f'g Co., 1 Kan. App. 320, 41 Stowe v. Flagg. 72 Ill. 397; MontPac. 211.

gomery v. Whitbeck, 12 N. D. 385, Maryland.-Franklin Fire Ins. 96 N. W. 327; Coyote G. & S. M. Co. v. Hart, 31 Md. 59.

Co. v. Ruble, 8 Or. 284, 291-292; Oregon.-McVicker 0. Cone, 21 McVicker V. Cone, 21 Or. 353, 28 Or. 353, 28 Pac. 76.

Pac. 76; Ireland v. Globe Milling & Rhode Island.-Ireland v. Globe Reduction Co., 20 R. I. 190, 38 Atl. Milling & Reduction Co., 20 R. I. 116, 38 L. R. A. 299. Cf. Harrison 190, 38 Atl. 116, 38 L. R. A. 299. V. Vermont Manganese Co., 1 N. Y.

corporation may be bound by the contract of the promoters, made after the granting of its charter, if a provision to that effect is contained in the corporate charter, or in the statute under which the company is organized. Power to contract for the company pending its complete organization would, if granted by charter or statute, generally be conferred upon the incorporators, or upon the directors named in the charter, or upon some person or persons occupying toward the corporation some more definite relation than that of promoter.

§ 47. Power of promoter to make contract for corporation after

complete organization. After a corporation has been fully organized, its management Misc. 402, 49 St. Rep. 873, 20 Supp. 254, 10 Exch. 293; In re State 894), except perhaps as to acts nec- Fire Ins. Co., 36 L. J. Ch. N. S. 634, essary to be performed to perfect and see Hill v. Gould, 129 Mo. 106. the corporate organization. Low v. 116, 30 S. W 181, and Munson v. Conn. & Pass. Rivers R. R., 45 N. Syracuse, etc., R. R., 103 N. Y. 58. H. 370, 377; Hall v. Vermont & 76, 8 N. E. 355, 29 Am. & Eng. R. R. Mass. R. R. Co., 28 Vt. 401, 407 and Cas., 377. see post, $ 84, note 14.

As to the interpretation of such The incorporators' contract would, statutes see Gent v. Mfrs. & Mchts. to bind the corporation, have to be Ins. Co., 107 Ill. 652, 6 Am. & Eng. sanctioned by a majority of them. Corp Cas. 588, and Montgomery v. Clarke V. Omaha & Southwestern Whitbeck, 12 N. D. 385, 96 N. W. R. R. Co., 5 Neb. 314, 328; Low v. 327. Conn. & Passumpsic Rivers R. R., 6. White v. Kahn, 103 Ala. 308, 45 N. H. 370, 379; Bell's Gap Rail- 15 So. 595; Gent v. Mfrs. & Merroad Co. v. Christy, 79 Pa. 54, 59, chants Ins. Co., 107 Ill. 652; Mont21 Am. Rep. 39; Tift v. Quaker gomery v. Whitbeck, 12 N. D. 385, City National Bank, 141 Pa. 550, 21 96 N. W. 327; Ireland v. Globe Atl. 660, 30 Am. & Eng. Corp. Cas. Milling & Reduction Co., 20 R. I. 339; Tanner v. Sinaloa Land & 190, 38 Atl. 116, 38 L. R. A. 299 : Fruit Co., 43 Utah 14, 134 Pac. Badger Paper Co. v. Rose, 95 Wis. 586.

145, 70 N. W. 302, 37 L. R. A. 162. 5. See Joint Stock Companies 7. Allman v. H. R. & E. R. R. Act of 1844 (Stat. 7 & 8 Vict. Chap. Co., 85 111. 521, 7 Rep. 236; Selkirk 110), 23; Bull v. Chapman, 8 v. Windsor, etc., R. R. W. Co., 20 Exch. 444; Taylor v. Crowland Gas Ont. L. R. 290, 15 Ont. W. & Coke Co., 23 L. J. Exch. N. S. R. 87.

road.m. Rep. 39.k, 141 Pa. 5. cas.

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