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"A person who brings about the incorporation and organization of a corporation. He brings together the persons who become interested in the enterprise, aids in procuring subscriptions, and sets in motion the machinery which leads to the formation of the corporation itself."

§ 4. Circumstances that give rise to the relation.

There is no one circumstance, or set of circumstances, the presence or absence of which determines the existence of the relation of promoter to a corporation.

It has been said that "whether a person is or is not a promoter is a question of fact and not of law, and must in each case be determined with due regard to all the circumstances." 16 The

626, 32 Pac. 600, 604; the Telegraph

v. Loetscher, 127 Iowa 383, 101 N. W. 773, 4 Am. & Eng. Ann. Cas. 667; South Mo. Pine Lumber Co. v. Crommer, 202 Mo. 504, 518, 101 S. W. 22, 26; Brooker v. William H. Thompson Trust Co., 254 Mo. 125, 162 S. W. 187, 194; See v. Heppenheimer, 69 N. J. Eq. 36, 71, 61 Atl. 843; Hutchinson v. Simpson, 92 N. Y. App. Div. 382, 409, 87 N. Y. Supp. 369, (dissenting opinion of Hatch, J.); Richlands Oil Co. v. Morriss, 108 Va. 288, 294, 61 S. E. 762, 764; Cox v. National Coal & Oil Investment Co., 61 W. Va. 291, 305, 56 S. E. 494, 500.

Further definitions of the term promoter may be found in Yeiser v. U. S. Board & Paper Co., 107 Fed. 340, 344, 46 C. C. A. 567, 52 L. R. A. 724; Yale Gas Stove Co. v. Wilcox, 64 Conn. 101, 119, 29 Atl. 303, 25 L. R. A. 90, 42 Am. St. Rep. 159; 47 Am. & Eng. Corp. Cas. 647; McRee v. Quitman

Oil Co., Ga. - 84 S. E. 487; Hinkley v. Sac Oil & Pipe Line Co., 132 Iowa 396, 402, 107 N. W. 629, 631, 119 Am. St. R. 564; Armstrong v. Sun Printing & Publishing Ass'n, 137 N. Y. App. Div. 828, 830, 831, 122 Supp. 531; Bosher v. Richmond & H. Land Co., 89 Va. 455, 460, 16 S. E. 360, 362; First Avenue Land Co. v. Hildebrand, 103 Wis. 530, 534, 79 N. W. 753, 754, (citing Alger on Promoters, § 1); Erlanger v. New Sombrero Phosphate Co., L. R. 3 App. Cas. 1218, 1268, 6 Eng. Rul. Cas. 777, 39 L. T. N. S. 269, 27 Weekly Rep. 65; Twycross v. Grant, L. R. 2 C. P. D. 469, 527, 541; Emma Silver Mining Co. v. Lewis, L. R. 4 C. P. D. 396, 407; Whaley Bridge Calico Printing Co. v. Green, L. R. 5 Q. B. D. 109, 111; Watts Law of Promoters, p. 1.

16. South Missouri Pine Lumber Co. v. Crommer, 202 Mo. 504, 101 S. W. 22, citing 23 Am. & Eng. Encyc. of Law, (2nd ed.), 233.

statement is not entirely accurate, and probably intends nothing more than that whether a given person is, or is not, a promoter of a given corporation, must be determined by the facts of the particular case.

An understanding of the scope and meaning of the term promotor can probably best be obtained by a consideration of some of the circumstances which have been held to, and some of the circumstances which have been held not to, give rise to the relation.

In the ordinary case certain persons, having conceived the idea of organizing a corporation for some more or less well-defined purpose, select the directors, take, or cause to be taken, the necessary steps in the formal organization of the corporation, procure the conveyance to the company of the properties and contract rights which they deem necessary for the carrying on of the contemplated business, and solicit subscriptions for the shares. These persons are obviously the promoters of the corporation.17 It is not, however, to constitute one a promoter of a cor

17. For cases illustrative of the circumstances which constitute the relation, see

Illinois.-Goodwin v. Wilbur, 104 Ill. App. 45, 51-52.

Dominion

Massachusetts.-Old Copper, etc., Co. v. Bigelow, 203 Mass. 159, 177, 89 N. E. 193, 40 L. R. A. N. S. 314; same v. same, 188 Mass. 315, 320, 327, 74 N. E. 653, 108 Am. St. Rep. 479.

New York.-Brewster v. Hatch, 122 N. Y. 349, 360-362, 25 N. E. 505, 33 N. Y. St. Rep. 527.

New Jersey.-Plaquemines Tropical Fruit Co. v. Buck, 52 N. J. Eq. 219, 234, 27 Atl. 1094, 44 Am. & Eng. Corp. Cas. 686; Woodbury Heights Land Co. v. Loudenslager, 55 N. J. Eq. 78, 88, 35 Atl. 436, affirmed, 56 N. J. Eq. 411, 41 Atl.

1115, but modified, 58 N. J. Eq.
556, 43 Atl. 671; Arnold v. Searing,
78 N. J. Eq. 146, 156-157, 78 Atl.
762, 766.

Ohio.-Shawnee Commercial &
Savings Bank Co. v. Miller, 24
Ohio C. C. 198, 209.

Virginia.-Richlands Oil Co. v.
Morriss, 108 Va. 288, 298, 61 S. E.
762.

Wisconsin.—Pittsburg Mining Co. v. Spooner, 74 Wis. 307, 42 N. W. 259, 17 Am. St. Rep. 149, 24 Am. & Eng. Corp. Cas. 1.

United Kingdom and Colonies. Twycross v. Grant, L. R. 2 C. P. D. 469, 541; Emma Silver Mining Co. v. Grant L. R. 11 Ch. Div. 918, 936, Whaley Bridge Calico Printing Co. v. Green, L. R. 5 Q. B. D. 109, 111; Erlanger v. New Sombrero Phos

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poration, necessary that he should have done all of these thingsdoing some of them may be sufficient.

The solicitation of subscriptions at any time before the corporation is fully organized, generally constitutes the solicitor a promoter,1 19 unless he avowedly acts under the employment of another, in which case the employer, rather than the employee, should properly be considered the promoter. The term has also been applied to one who was active in securing a charter and in constant attendance at meetings of the incorporators and directors,20 but it is not applied to the mere signers of the certificate of incorporation.21

One who attends to the formalities of the incorporation is not necessarily a promoter. In The Telegraph v. Loetscher 22 the defendant claimed that this was all that he had done. The court took pains to show that the defendant had also exhibited to pro

phate Co., L. R. 3 App. Cas. 1218, 1283-1284, 6 Eng. Rul. Cas. 777, 39 L. T. N. S. 269, 27 Weekly Rep. 65; In re Olympia, Ltd., 1898, 2 Ch. Div. 153, 181-182; (affirmed sub nom. Gluckstein v. Barnes, 1900, App. Cas. 240); Lagunas Nitrate Co. v. Lagunas Syndicate, 1899, 2 Ch. Div. 392, 441; Re Sale Hotel & Botanical Gardens, Ltd., 78 L. T. N. S. 368; Ross V. Estates Investment Co., L. R. 3 Eq. 122, 123, affirmed, L. R. 3 Ch. App. 682.

18. Emma Silver Mining Co. v. Grant, L. R. 11 Ch. Div. 918, 936.

19. In South Joplin Land Company v. Case, 104 Mo. 572, 16 S. W. 390, 38 Am. & Eng. Corp. Cas. 333, the court laid stress upon the solicitation of subscriptions, but the defendants had also brought the corporation into existence. See also South Missouri Pine Lumber

Company v. Crommer, 202 Mo. 504, 519, 101 S. W. 22, 26; The Telegraph v. Loetscher, 127 Iowa 383, 101 N. W. 773, 4 Am. & Eng. Ann. Cas. 667, and see Scottish Pac. Coast Min. Co., Ltd., v. Falkner, Bell & Co., Sess. Cas. 15 Rettie 290, 305. But see Thames Navigation Co. v. Reid, 9 Ont. 754, (reversed on another ground, 13 Ont. App. 303) and Milwaukee Cold Storage Co. v. Dexter, 99 Wis. 214, 74 N. W. 976, 40 L. R. A. 837.

20. Hayden v. Green, 66 Kan. 204, 71 Pac. 236.

21. St. Louis, F. S. & W. R. Co. v. Tiernan, 37 Kan. 606, 632, 15 Pac. 544, 558-559. See also Benton v. Minneapolis Tailoring & Mfg. Co., 73 Minn. 498, 506–507, 76 N. W. 265, 267-8.

22. 127 Iowa 383, 101 N. W. 773, 4 Am. & Eng. Ann. Cas. 667.

spective subscribers, the machine which the corporation was to manufacture, and had requested acquaintances to subscribe for shares. These facts, it was held, made him a promoter.

§ 5. Sharing promoter's profits.

One who, in consideration of a share of the profits, assists the promoter in the organization of a corporation, thereby becomes himself a promoter, 28 and it has been held that a person by agreeing, in consideration of a share of the promoter's profits, to become a director of the proposed corporation, makes himself liable as a promoter from the time that such agreement is made. 24

§ 6. Carrying on promotion by agents.

It is not necessary, in order to constitute one a promoter, that he should personally perform any act of promotion. He becomes a promoter if the promotion is carried on by his authorized agents, 25 or if, though he does not appear in the transaction, the ostensible promoters are in fact his puppets acting under his control.26

§ 7. Acting as vendor, vendor's agent, etc.

The mere fact of selling, or agreeing to sell property to the corporation to be formed, or to its promoters, does not constitute the vendor a promoter. 27 If, however, the owner, in order to pro

23. Emma Silver Mining Co. v. Lewis, L. R. 4 C. P. D. 396, 408. See Stratford Fuel Ice C. & C. Co. v. Mooney, 21 Ont. L. R. 426, 441.

24. Nant-Y-Glo and Blaina Ironworks Company v. Grave, L. R. 12 Ch. Div. 738, 744. A similar case is Richlands Oil Company v. Morriss, 108 Va. 288, 293-294, 61 S. E. 762, 763-764.

25. South Joplin Land Co. v. Case, 104 Mo. 572, 580-581, 16 S.

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cure the sale of his property, assists in the organization of the company, he thereby subjects himself to the restrictions which the law imposes upon promoters.28

Acting as agent for the vendor on the sale of property to a contemplated company, does not constitute the agent a promoter of the corporation,29 but if the agent himself organizes the corporation, he becomes a promoter, and the fact that he was first the agent of the vendor, does not exonerate him from liability to account to the corporation for any secret commissions received from his principal.30

In Bagnall v. Carlton,31 Richard Bagnall, life tenant under the will of James Bagnall, deceased, promised Duignan & Lewis, solicitors for the trustees of the Dagnall estate, a commission of £1500 if they would find a purchaser for certain collieries and iron

Lumber Co. v. Crommer, 202 Mo. 504, 101 S. W. 22; South Joplin Land Co. v. Case, 104 Mo. 572, 578, 580, 16 S. W. 390, 392, 38 Am. & Eng. Corp. Cases 333, quoted in Exter v. Sawyer, 146 Mo. 302, 322, 47 S. W. 951, 956.

New York.-Finck v. Canadaway Fertilizer Co., 152 N. Y. App. Div. 391, 136 Supp. 914, modified and affirmed, 208 N. Y. 607, 102 N. E. 1102.

Pennsylvania.-Densmore Oil Co. v. Densmore, 64 Pa. 43, 52.

Wisconsin.-Forest Land Co. v. Bjorkquist, 110 Wis. 547, 86 N. W. 183.

United Kingdom and Colonies.Gover's Case, L. R. 20 Eq. 114, 122, affirmed, L. R. 1 Ch. Div. 182.

28. See South Joplin Land Co. v. Case, 104 Mo. 572, 579, 581, 16 S. W. 390, 392, 393, 38 Am. & Eng. Corp. Cas. 333; Finck v. Canadaway Fertilizer Co., 152 N. Y. App. Div. 391,

136 Supp. 914, modified and affirmed, 208 N. Y. 607, 102 N. E. 1102.

29. Blood v. La Serena Land & Water Co, 134 Cal. 361, 66 Pac. 317; South Missouri Pine Lumber Company v. Crommer, 202 Mo. 504, 101 S. W. 22; Thames Navigation Co. v. Reid, 9 Ont. 754, 765, (reversed on another ground, 13 Ont. App. 303). See Second National Bank V. Greenville Screw Point Steel Fence Post Co., 23 Ohio C. C. 274, 280; also Selover v. Isle Harbor Land Co., 91 Minn. 451, 98 N. W. 344, 100 Minn. 253, 111 N. W. 155.

30. Lydney & Wigpool Iron Ore Co. v. Bird, L. R. 33 Ch. Div. 85, 94-95, 24 Am. & Eng. Corp. Cas, 23, reversing, L. R. 31 Ch. Div. 328, 12 Am. & Eng. Corp. Cas. 6.

31. L. R. 6 Ch. Div. 371, 382. A somewhat similar case is Glasier v. Rolls, L. R. 42 Ch. Div. 436.

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