| Mich. | Nov 4, 1873
The Fort Wayne, Jackson & Cincinnati Railroad Company, a Michigan corporation, consolidated with the Fort Wayne, Jackson & Saginaw Railroad Company, a corporation of Indiana, and the two companies, when so consolidated, took the style of the latter company. The plaintiff in error, prior to the consolidation, and at or before the 7th of December, 1868, became a subscriber to the capital stock of the Michigan company, and having refused to pay his subscription, this suit was brought by the consolidated company, the defendant in error, to collect it.
They recovered in the court below, and the plaintiff in error insists that he was not liable. The first ground of defense relates to the legality of the supposed incorporation of the Michigan company under the general railroad law.
The general act, as passed in 1855 (Sess. L. 1855, p. 158), required that the affidavit of the amount subscribed, and the amount paid in, to be annexed to the articles filed in the office of the secretary of state, should be made by at least three of the directors, but the amendatory act of 1867 (Sess. L. 1867, p. 90) required this affidavit to be made by at least one-half of the directors. The promoters of the Michigan company framed their articles in the summer of 1868 and therein provided for nine directors; but failing to notice the change made by the act of 1867, they proceeded to file their articles with an affidavit attached made by three only of the directors, when it should have been made by five, in order to comply with the act as amended. They seem not to have discovered this error until the following winter, when, and on the 19th of January, they annexed to the articles on file an affidavit made by five directors, and they there stated that their first affidavit was made by too small a number through inadverence. In this interval between the 26th of September, 1868, when the articles were filed, and the 19th of January, 1869, when the second affidavit was annexed, the company
The projectors of this company seem in good faith to have, undertaken to incorporate themselves under a law authorizing them to do so, and they appear to have truly supposed that they had consummated a valid incorporation. On the faith of this belief they in fact organized and exercised corporate functions; incurred expense and liabilities, and in various ways extensively promoted their contemplated enterprise.
The plaintiff in error met and contracted with them on the footing that they were legally incorporated and competent to receive subscriptions, and gave the weight of his name to their project and pretentions. He became a -subscriber for stock on the books opened by the commissioners, and voluntarily put himself in a position to claim the rights of a stockholder.
In thus agreeing with the company for stock and to pay
The filing of the second affidavit was a measure designed solely to correct an irregularity, and not to indicate the launch of another company. In view of all the circumstances, we think the plaintiff in error was not at liberty to contest his liability on any point dependent on the fact that the affidavit first filed was made by three of the directors only. And this conclusion we consider as rendered proper by our decision in the case of Swartwout v. Michigan Air Line R. R. Co., to which we refer as exhibiting very fully the views we entertain on this branch of the case.
When the opinion there given is examined, it will be observed that a distinction was plainly marked between the right of a subscriber for stock when sued for his subscription, to insist upon irregularities in the incidents connected with the preparation and filing of the articles, and in the routine affairs of the company, and his right to set up a failure by the corporation to obtain the requisite amount of capital stock. His position as an agreeing party with the company as a corporation — as a joint associate in the enterprise, and as one who has given countenance, impulse and credit to the movement in its aspect of one which is regular and legal — may justly preclude him from setting up irregularities like those first mentioned, in order that he may cast upon others his share of a common burden which he helped to induce. But the very nature of his undertaking as a subscriber for stock implies a different relation and a different obligation as respects his right to object that an insufficient amount of stock has been subscribed.
In that case the objection is not inconsistent with the
The point next to be noticed requires no discussion. It relates to the admission of the subscription books to prove that six thousand dollars per mile had been Subscribed, and the position taken is, that the showing of the subscription per mile could be made only by specific proof of each subscription, and that the books opened and kept by the commissioners were not proper evidence. The subscription sued on was specially proved, and we are satisfied that the books were admissible to show the other subscriptions and the amount per mile. The books in question are of the nature of official registers, and the subscriptions contained in them were taken under the sanction of official duty. We think the right to use them as evidence to prove how much per mile had been subscribed, in this action against a subscriber, is entirely clear. — 1 Greenleaf’s Ev., §§ 483, 484; Groesbeck v. Seeley, 13 Mich., 329" court="Mich." date_filed="1865-05-13" href="https://app.midpage.ai/document/groesbeck-v-seeley-6633395?utm_source=webapp" opinion_id="6633395">13 Mich., 329; 2 Cow. and H. Notes, p. 1156, note 800.
The remaining objection open to the plaintiff in error upon this record and now insisted on, is that it was not alleged, and did not appear, that six thousand dollars per mile had been subscribed for the entire' road of the companies as consolidated.
As already stated, it did appear that more than six thousand dollars per mile were subscribed for the road of the Michigan company, and which road was all within the
The provision in our statute as to the amount per mile necessary to be subscribed has exclusive reference to corporations created here for the construction of roads within our own borders, and was not intended to have any extraterritorial operation. And the circumstance that the company in this state has consolidated with a company created in Indiana to construct a road there, cannot serve to make this regulation attach as a condition to the body owing its existence to Indiana.
Some objections were suggested on the argument to the regularity of the calls, but the point does not appear to have been made on alleging error. We therefore refrain from considering that subject.
As no error is shown, the judgment should be affirmed, with costs.