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bill succeeded, but the company went into liquidation. Pawle having taken no further proceedings for removing his name from the register, the official liquidator took out a summons to settle him on the list of contributories. But the Lords Justices Selwyn and Giffard, affirming the Master of the Rolls, decided, without calling on Pawle's counsel, that there was no pretense for contending that Pawle had not done enough in assertion of his repudiation. They said it would be contrary to all the principles of the court to hold that there was any necessity for separate proceedings by all these nine shareholders, or for any such vexatious accumulation of costs. They said it would have been "improper and vexatious" of Pawle had he filed a separate bill. But a shareholder who does not identify himself with the test case by notifying the directors that he claims the benefit of the decision, must institute separate proceedings in his own name in order to have his name stricken from the register; 2 unless the test case having been decided before the winding up, the directors decline to fight his case, knowing any defense thereto to be hopeless, and agree, therefore, to act upon the decision and to strike his name from the register. It is deemed more prudent, however, even under such circumstances, for the shareholder to obtain an adjudication upon his case.1

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§ 104. Grounds of withdrawal.- If a number of persons, meaning to join in a common undertaking, raise a common fund, eventually to be increased, but commencing by a deposit, and they put these deposits for a common object into the hands of a committee, with directions to them to do certain acts, it is not competent for any one or more of the subscribers against the will of the others to withdraw and say, "I think you ought not to go any further." Accordingly, if

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one subscribes for shares in a corporation to be organized, and the corporation is in fact organized and the shares accepted by the subscriber, he can not repudiate his liability.' Mere informal irregularities in the contract can not be made a pretext for withdrawing and refusing to pay the amount, subscribed. Thus a subscriber is not held released because of his signature being cut from a printed paper of subscription and pasted on a fac-simile, nor by the failure of the agent to deliver the original subscription paper to the company. As the ownership of shares in an undertaking and the rights and liabilities incident thereto are in no wise dependent upon the possession of a certificate of stock, it follows that a failure on the part of the company to tender a certificate to the subscriber is no ground for him to repudiate his shares and refuse to pay therefor; unless, of course, the delivery of the certificate has been stipulated for in the contract of subscription;'

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ed. 1889) 29, citing Baird v. Ross, 2 Macqueen, 61; Burnes v. Pennell, 2 H. L. C. 497. Cf. Kent v. Jackson, 14 Beav. 367; s. c. 2 De G. Mac. & G. 491. As to the right of script holders to have the money subscribed by them applied to the purposes for which they subscribed it, see Bagshaw v. Eastern Union Ry. Co., 7 Hare, 114; S. c. 2 Mac. & G. 389. See also Aldham v. Brown, 7 El. & B. 164; s. c. 2 El. & El. 398. In a more recent case it was held upon precisely the same principle, that where a person had covenanted to pay a deposit which was to be applicable, amongst other things, to the discharge of the expenses of forming a company, he was bound by his covenant, and was liable to an action upon it, although before the action was brought, the formation of the company had become impossible. Acc. Duke v. Dive, 1 Ex. 36; Duke v. Forbes, 1 Ex. 356.

1 Inter-Mountain Publishing Co. v. Jack, 5 Mont. 568.

2 Ashtabula &c. R. Co. v. Smith, 15 Ohio St. 328; Clark v. Continental

Improvement Co., 57 Ind. 135; Cayuga Lake R. Co. v. Kyle, 64 N. Y. 185; Nulton v. Clayton, 54 Iowa, 425; Boston &c. R. Co. v. Wellington, 113 Mass. 79; Waterman on Corporations, 164.

3 Sodus Bay &c. R. Co. v. Hamlin, 24 Hun, 390.

4 Pickering v. Templeton, 2 Mo. App. 424.

5 Fulgam v. Macon &c. R. Co., 44 Ga. 597.

6 Butler University v. Scoonover, (1887) 114 Ind. 381; s. c. 5 Am. St. Rep. 627; Slipher v. Earhart, (1883) 83 Ind. 173; Miller v. Wild Cat Gravel R. Co., 52 Ind. 51: Heaston v. Cincinnati &c. R. Co., 16 Ind. 275;` s. c. 79 Am. Dec. 430; New Albany &c. R. Co. v. McCormick, 10 Ind. 499; Chandler v. Northern Cross R. Co., 18 Ill. 190; Kennebec &c. R. Co. v. Jarvis, 34 Me. 360.

7 Hawley v. Upton, 102 U. S. 314; Wheeler v. Millar, 90 N. Y. 353; s. c. 24 Hun, 541; South Georgia &c. R. Co. v. Ayers, 56 Ga. 234; Fulgam v. Macon &c. R. Co. 44 Ga. 597; Vawter v, Ohio &c. R. Co., 14 Ind. 174.

or unless the failure arises from the whole capital stock having been already issued to others. But a refusal to issue a certificate when demanded may release the subscriber. Thus if the defendant can show that while the corporation was yet solvent he tendered the full amount of his subscription, demanding a certificate of stock, which was refused, it is a good defense even to an action by the assignee of the company brought in behalf of the corporate creditors.2

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§ 105. (a) Sundry examples.- Sundry other grounds have been taken by subscribers and stockholders as reasons for repudiating their shares, but have been held insufficient by the courts, as, for example, that stock had been allotted by the commissioners to persons whose names were not on the subscription list; that all the shares of a new issue increasing the capital stock had not been taken; that the corporation failed to put in a certain amount of working capital according to agreement with the subscriber, when he knew of the corporation's lack of funds, and that no provision had been made for raising any; that a creditor who is enforcing payment is a director also of the corporation; that the corporation was not in existence when the member agreed to take the shares; that

1 Burrows v. Smith, 10 N. Y. 550. 2 Potts v. Wallace, (1887) 32 Fed. Rep. 272.

3Swartwout v. Michigan &c, R. Co., 24 Mich. 389. As to subscriptions to corporate stock, when binding, and defenses to generally, see extensive note to Freeland v. McCullough, 43 Am. Dec. 694, 703; s. c. 1 Denio, 414. See also Wight v. Shelby R. Co., 63 Am. Dec. 522; Penobscot R. Co. v. Dummer, 63 Am. Dec. 654; Penob. scot R. Co. v. White, 66 Am. Dec. 257; s. c. 41 Me. 512, and notes thereto; Robinson v. Pittsburgh &c. R. Co., 32 Pa. St. 334; s. c. 72 Am. Dec. 792.

Avegne v. Citizens' Bank, (La. 1889) 5 So. Rep. 537, where it was held that an original stockholder who signs without qualification a subscription for new stock to increase

the original stock is not entitled to cancellation of his subscription and repayment of the amount paid in, on the ground that all the new shares were not subscribed for. In the absence of any stipulation or limitation to the contrary, his subscription is not contingent or dependent upon the taking of all the shares, but is absolute and binds him accordingly. 5 Goff v. Hawkeye Pump & Windmill Co., 62 Iowa, 691.

6 Chouteau Insurance Co. v. Floyd, 74 Mo. 286.

7 Inter-Mountain Publishing Co. v. Jack, (1885) 5 Mont. 568. "Subscriptions to certain amount of corporate stock are necessary to organization of contemplated corporation, and for that reason and purpose are valid before such organization, and may be collected afterwards; and, in an

an illegal by-law prohibits his voting until payment of calls;1 that the member himself failed to make the cash deposit required by statute at the time of subscribing; that other members have been allowed to pay in a depreciated currency; that more than the capital stock has been subscribed; and that the member misunderstood the legal effect of his agreement to take shares in the stock of the company. A mistake of fact,

action on such a subscription, the defendant can not set up the nonexistence of the corporation at the time of making the contract." Anderson v. Newcastle & R. Co., (1859) 12 Ind. 376; s. c. 74 Am. Dec. 218.

1 Chandler v. Northern Cross R. Co., 18 Ill. 190: New Albany &c. R. Co. v. McCormick, 10 Ind. 499; s. c. 71 Am. Dec. 337.

2 Pittsburg, W. &c. R. Co. v. Applegate, (1884) 21 W. Va. 172.

The testimony, however, goes further, and shows that all the Confederate money thus taken was paid out, dollar for dollar. If this payment, dollar for dollar, was upon contracts made at gold rates, then no harm was done, and there would be no loss, but, if for work at prices corresponding with the depreciated currency, it is clear that all other stockholders were hurt, and upon this point the record is silent. But the plea here is, the naked one, that the defendant was released by the fact that such money was so taken by the directors, and upon this naked plea, the act of the directors, being ultra vires, is a mere nullity; nobody was thereby relieved from future payment at the instance of anybody hurt, and the defendant is not thereby released from the payment of his stock. Upon his going into equity, and making the stockholders parties, and showing damage to himself and praying that all be made to pay as much real money for their stock as he will have to pay for his, we will

not say that he may not have relief if this depreciated currency did not go as far as good money would have done to pay contracts and debts of the company." Macon & Augusta R. Co. v. Vason, (1876) 57 Ga. 314, 316, citing Angell & Ames on Corporations, 297 et seq.

4 Oler v. Baltimore &c. R. Co., 41 Md. 583.

5 New Albany &c. R. Co. v. Fields, 10 Ind. 187; Clear v. Newcastle R. Co., 9 Ind. 488; Ellison v. Mobile &c. R. Co., 36 Miss. 572; Selma &c. R. Co. v. Anderson, 51 Miss. 829, 833; Bailey v. Hannibal &c. R. Co., 17 Wall. 96; Wight v. Shelby R. Co., 16 B. Mon. 4; s. c. 63 Am. Dec. 522. Cf. Vicksburg &c. R. Co. v. McKean, 12 La. Ann. 638. Even though his misconception of the legal effect of his act was induced by misrepresentations by the corporate promotor or agent, a mistake of law will not avail him. Ellison v. Mobile &c. R. Co., 36 Miss. 572, 588; New Albany &c. R. Co. v. Fields, 10 Ind. 187; Clem v. Newcastle &c. R. Co., 9 Ind. 488. For misrepresentations with respect to matters of law which are supposed to be equally within the knowledge of both parties, do not constitute a fraud. Upton v. Tribilcock, 91 U. S. 45; Parker v. Thomas, 19 Ind. 213; Thornburgh v. Newcastle &c. R. Co., 24 Ind. 499; Northeastern R. Co. v. Rodriguez, 10 Rich. 278, where the representation was that the subscriber might allow forfeiture; Clem v. Newcastle, &c. R. Co. 9 Ind. 488,

however, may constitute a ground for the rescission of a contract. "Except," says Mr. Lindley, "where a person has induced others to act on his own representations, ignorance of material facts on his part affords a sufficient reason for not holding him bound by what in such ignorance he may have said or done." But a subscriber who has by mistake agreed to take more shares than he intended, after allowing the company to act upon the faith of his subscription, can not obtain relief in equity in the absence of proof of fraud; nor can he plead that he was ignorant of the true condition of the company's affairs.3

§ 106. (b) Irregular incorporation.- A member of a corporation who has accepted his shares,' paid calls thereon," voted

where the representation was that payment would not be demanded until completion of construction.

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1 Lindley on Partnership, 135. See also Taylor on Corporations, (2d ed. 1889) § 527; Salem Mill Dam Co. v. Ropes, 9 Pick. 187; s. c. 19 Am. Dec. 363; Four Mile Valley R. Co. v. Bailey, 18 Ohio St. 208; Payson v. Withers, 5 Biss. 269; County of Schuylkill v. Copley, 67 Pa. St. 386; Smith v. Reese &c. Co., L. R. 2 Eq. 264.

2 Diman v. Providence &c. R. Co., 5 R. I. 130.

Bing. 110; White v. Coventry, 29 Barb. 305; Trumbull Co. Ins. Co. v. Horner, 17 Ohio, 407; Parish v. Wheeler, 22 N. Y. 494; Steam Navigation Co. v. Weed, 17 Barb. 378; Doyle v. Peerless Petroleum Co., 44 Barb. 239; Dutchess Cotton Manufactory v. Davis, 14 Johnson, 238; Henriques v. Dutch West India Co., 2 Ld. Ray. 1535; Clark v. Thomas, (1877) 34 Ohio St. 46, 59; Hickling v. Wilson, (1882) 104 Ill. 54; Thompson v. Reno Savings Bank, (1885) 19 Nev. 103; Inter-Mountain &c. Co. v. Jack,

3 Payson v. Withers, 5 Biss. 269; 5 Mont. 568. Beach on Railways, § 118.

4 To the public this company had all the extent indicia of being the corporation, and legally entitled to exercise the rights and franchises it assumed to exercise. A party veluntarily taking stock in such company is not in a position, when sued for the balance due for such stock, for the benefit of the creditors of such company, to deny the authority of the company to issue such stock and transact business lawfully. Upton v. Hansbrough, (1873) 3 Biss. 417, 421, citing Eaton v. Aspinwall, 19 N. Y. 119; Harvey v. Kay, 9 Barn. & C. 356; Doubleday v. Muskett, 7

5" There is no doubt that, in general, a strict compliance must be shown with the provisions of the charter, and that, in this case, so much of the Code of Virginia, as is applicable, is made part of the act of the plaintiff's incorporation. But, in some cases, a compliance will be presumed; and, in others, it may be waived. Assuming the authority to make the subscription, and the fact of its having been made, the payment of installments on it is a sufficient recognition of the legal existence and organization of the plaintiff. That the law will make presumption in favor of the legality of

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