Montpelier & Wells River Railroad v. Langdon

46 Vt. 284 | Vt. | 1873

The opinion of the court was delivered by

Ross, J.

The objections urged by the counsel for the defendant against the correctness of the judgment of the county court, are, in substance, first; that the commissioners named in the act of incorporation for receiving subscriptions to the stock of the company, wore not all notified to be present, and were not all present, at any of the meetings of the commissioners held preliminary to the organization of the company, and that for this reason, there has been no legal organization of the company; which, he claims, the defendant, under his notice, can av ail himself of in defence of this action to collect assessments made by the directors on the defendant’s subscription to the stock ; second, that the defendant’s subscription is not binding, because he did not, at the time of making the same, pay the five per centum thereof, required by § 5, ch. 28 of the Gen. Sts. Neither of these objections can avail the defendant, if his subscription was made ‘ to the plaintiff, after it was organized, though informally, and existing as a corporation de facto. Eor, if the defendant’s contract of subscription was made with the plaintiff as a chartered corporation acting in its corporate capacity and under its corporate name, he cannot in this action call in question the legality of its organization. All that a corporation is called upon to prove, to establish its existence in litigation with individuals dealing with it, is its charter and user under it. This constitutes it a corporation de facto, which is sufficient in ordinary suits between the corporation and its debtors. The validity of its corporate existence can only be tested by proceedings in behalf of the people. This is established by numerous decisions in this and other states, and is not denied by the counsel for the defendant. Neither does the staiute require the payment of five p>er centum of the amount of the stock subscribed for, at the time of making the subscription, when the subscription is made to the corporation after its organization and existence as a corporation de facto. Conceding the objection's of the defendant to be well taken if his subscription was made to the commissioners, in regard to which there are doubts, the determinative question is, whether the defendant’s subscription was made to the commissioners, or to the plaintiff, after it existed as a corporation defacto. From the unquestioned facts in the case, it appears that the defendant, Jan. T9, 1869, subscribed for one hundred shares of the stock, and .with the consent of the other commissioners, December 20, 1869, he attached to it the condition, that good and responsible individuals in Montpelier subscribe fifty thousand dollar’s within one year from Jan. 19, 1869, and that he should be furnished with a list of the subscribers, and the amount subscribed by each, Jan. 19, 1870. January 4, 1870, the company was organized. The book containing the defendant’s subscription was then in his hands as one of the commissioners named in the act of incorporation, and was retained by him till the condition was complied with, Jan. 18,1870. He then delivered it to the directors of the company. From January 4th to January 18th, the company had been acting under its charter as an organized company. These facts constitute the defendant’s subscription a subscription made to the plaintiff directly, while acting as a corporation defacto. Until the condition was complied with and it was delivered to the directors, it was imperfect and invalid as a subscription. It became a perfected, operative subscription when the condition was complied with, and it was delivered to the directors. The five per centum, if required on such a subscription, could not have been exacted of the defendant until that time. Says Rbdfield, J., in his work on railways, vol. 1, p. 205: “A subscription upon the performance of a condition becomes absolute upon such performance.” * * * “The subscription takes effect from that time; the first instalment required to be paid at the time of the subscription, then becomes due and payable, and the subscriber liable to assessments for the remainder.” Ashtabula & New L. Railw. v. Smith, 10 Ohio N. S. 328. This disposes of all the objections taken by the counsel for the defendant in the county court and now relied upon. If he had there taken the objection which he now raises, that the county court erroneously allowed the plaintiff to recover the five per centum in addition to the three assessments made by the company, there would have been difficulty in sustaining the judgment of the county court to that extent. As we understand the statute, an assessment must be made by the company on subscriptions made to the company after its organization, before any portion of the subscription can be collected, and only so much of the subscription can be collected as has been assessed. As no exception was taken covering this point, the judgment of the county court is affirmed.