South West Pennsylvania Fair Ass'n v. Greer

Opinion by William W. Porter, J., A subscription to the capital stock of a proposed corporation, subsequently incorporated according to law, is binding on the subscriber and enforceable by the corporation, where the agreement of subscription is clear and explicit in its terms. Where a corporation is attempted to be formed under general statutes, the proceedings are inchoate until all of the requirements of the statutes are fulfilled. Up to the point of thp actual filing of the articles of incorporation a subscription to stock is a proposition, not an enforceable obligation, to take and pay for the number of shares specified, and may be recalled: Auburn Bolt Works v. Shultz, 143 Pa. 256 ; Muncy Traction Co. v. De La Green, 143 Pa. 269; Garrett v. Dillsburg, etc., R. R., 78 Pa. 465. The difficulty in this case is, however, that it does not involve an inquiry into the right of a subscriber to withdraw but rather an interpretation of the paper writing signed by the defendant and others, upon which the alleged subscription to corporate stock is founded. The paper exhibited does not express a purpose on the part of the subscribers to proceed to incorporation. The mere use of the words “ capital stock ” in a document so inartificially drawn, may not be strained to evince such an intention. They are words which may also describe the quantum and character of interest to be held in an unincorporated association or even in a partnership : Hedge and Horn’s Appeal, 63 Pa. 273. Again the purpose of the enterprise to be entered upon is not expressed save in the statement of the name “ the South West Pennsylvania Fair.” The carrying forward of such a project does not necessarily involve the creation of a corporation. The amount of the subscription and the time when the several payments on account are to be made both rebut in a measure a construction holding the paper to be a subscription [108] to the stock of a proposed, corporation. When the application for letters patent was made, the shares claimed to have been subscribed for by the defendant, are made “two” instead of “four,” and the face value $50.00 each instead of $25.00 as set forth in the agreement. In this application the defendant’s name appears, but it is not claimed that he signed the paper. The testimony presented does not help out the writing in creating a liability to the plaintiff company. No one was shown to have signed on the faith of the defendant’s signature. His testimony discloses no admission that he subscribed to the stock of a proposed corporation. There is no proof that the defendant ever participated in the affairs of the corporation plaintiff,' save that he received, but did not use an annual ticket of admission presumably to a fair conducted by the plaintiff. This is not sufficient to convert an agreement to contribute to a quasi-public enterprise into a subscription to the capital stock of a corporation. We are of opinion that no such obligation of the defendant has been shown as warrants a recovery on the part of the plaintiff company. The judgment is affirmed.