5 Neb. 50 | Neb. | 1876
The defendant in error claims to be a corporation incorporated under the general incorporation laws of the state, and brought this action to recover assessments levied on shares of stock subscribed by plaintiff in error to the capital stock of the company. It is alleged that the plaintiff in error subscribed for and agreed to take ten shares of the capital stock of the company. A meeting was held on the 19th day of January, 1870, when articles of association and incorporation were adopted, which provide that the amount of the capital stock of the company shall be two hundred thousand
But assuming that the averments in the petition are sufficient to constitute a cause of action against the plaintiff in error, I will now consider the main grounds of defense to the action urged by the plaintiff in error, and in doing so it will be necessary to recur to some facts as shown by the record. The subscription paper fixed the cost of the hotel at not less than one hundred and fifty thousand dollars, and the articles of incorporation provide that “the capital stock of said company shall be
And now, in answer to the above question, it need only be stated that the rule seems to be well established that when the charter or subscription contract specifically
The case under consideration comes within the rule above stated, and the action cannot be maintained, or the judgment of the court below be sustained, unless some fact or circumstance is shown which takes it out of the general rule.
It is however contended on the part of the defendant in error that the plaintiff in error has waived his rights under the contract, and by his own acts has become
It is not claimed that the plaintiff in error gave any actual assent to enter upon the main object and purpose of the company, without first securing a subscription of the amount of capital required; and surely a constructive
Now, the corporation with full knowledge of the condition precedent, contained in the subscription contract and of that in the charter, and in violation of this condition in the contract, has proceeded to assess the shares of stock, and it is insisted that the plaintiff in error by his acts has waived his immunity from liability to pay such assessments. In other words, the proposition contended for is in effect that these acts of the plaintiff in error are equivalent to an assent by him to the unauthorized proceedings of the corporation, and therefore he is estopped from claiming the rights he had under the contract. It is said that “a waiver is the intentional relinquishment of a known right, and there must be both knowledge of the existence of the right, and an intention to relinquish it.” There is a total failure of proof showing that the plaintiff in error acted with knowledge of the fact that a deficiency remained in the capital required by the charter and the facts shown by the record are not sufficient to show an intention to waive the rights of the party. Pitchford v. Davis, 5 M. & W., 4. It seems clear that the proposition contended for in this case cannot be maintained either by the facts or the law, and that the authorities do not support it. The Atlantic Cotton Mills v. Abbott, 9 Cush., 425. The Oldtown & Lincoln R. R. v. Veazie, 39 Me., 571. Macedon & Bristol Plank Road Co. v. Lapham, 18 Barb., 313.
In the case of the Trustees of Farmington Academy v. Allen, 14 Mass., 172, the defendant and others, as subscribers, agreed to be accountable for the payment of the respective sums by each one subscribed as a fund to be apjfiied in the establishment of an academy, as necessary to obtain assistance from the legislature; held, that an action would lie for money paid, laid out and expended. It was not a subscription to take shares of stock in a corporation with a fixed capital, and, therefore, the case is not analogous to the one at bar.
In Railway v. Lacey, 3 Younge & Jervis, 85, the defense was on the ground that a misrecital in an act of parliament rendered the act invalid, and could not be enforced. The defendant concurred in the application to the legislature, he was named as a proprietor, and paid his calls so long as the concern was prosperous; held, that by his conduct he held himself forth to the world as a proprietor, and by so doing he took advantage of the
In the case of the Kansas City Hotel v. Harris, 51 Mo., 464, the defendant was a stockholder and a director of the company. The action was brought for the fifth and last call, and it is said by the court that “ the defendant liming participated in all the proceedings creating the corporation, and in increasing the stock and making the calls both as stock holder and director, he is now estopped from raising any, question in this action as to their validity.” The question of deficiency in the subscription to the stock was not raised in this case. The main defense was that there were two subscriptions, and the petition only counts for one.
Again, it is insisted that by authority of the general incorporation act, the company may “enter upon the main and ultimate object of its organization as soon as its articles are recorded ” in the county clerks office, and that the provisions of the act taken together, show such to be the legislative intention, without any regard to the amount of shares subscribed. If the statute must receive such a construction, then the corporation might commence operations in the execution of its main design without a single valid subscription to the capital stock, notwithstanding a certain amount of capital, divided into shares of a certain amount, is required by the charter. Now, as all the powers and duties of a corporation result from the statute, it seems very clear that an organization of the institution, even with officers, a capital paid up and articles filed as required by law, would be powerless to do one corporate act without a legislative grant to do so; and therefore, it seems clear that sections 124 and 137 of the general statute, were intended simply to define and grant the general powers which may be exercised when the corporation is legally organized. There is no legislative intent expressed in these sections, giving a
But it is more earnestly contended that sections 126 and 132 grant the right of proceeding with the “ main and ultimate object ” of the company, regardless of the fact whether all or any of the capital required by the charter has been first subscribed. Section 126 provides that “every corporation, previous to commencement, of any business, * * *• must adopt articles of incorporation and have them recorded in the office of the county clerk of the county, or counties, in which the
Again, at the time the act was passed, it was the settled rule of law that a corporation having a fixed amount of capital, divided into shares of a certain amount each, could not proceed with the execution of its main object, until all its capital was subscribed, unless it was clearly provided that it might do so with a less subscription than the amount of capital fixed by the charter. The presumption is that the legislature had in their minds this common law doctrine then so well established and understood, and that they intended to leave the determina
The judgment of the district court must be reversed and the cause remanded with leave to amend the petition if desired so to do.
Beversed and remanded.