Newland Hotel Co. v. Wright

0-ILL, J. In February, 1896, the defendant and fifty-two other citizens of Webb City, Missouri, signed an agreement in writing whereby each promised to pay the amount set opposite his name "for the purpose," as stated, "of forming a stock company with a capital of $5,000 to furnish and open The Newland Hotel." Opposite defendant's signature appeared $200. The full sum of $5,000 was subscribed and in March, 1896, the said Newland Hotel (Jompany was duly incorporated, the articles of associa-tioi~ fixing the number of shares at one hundred and at the par value of $50 a share. Under this arrangement, therefore, defendant became entitled to four shares of the capital stock, a certificate for which plaintiff made out and tendered to defendant, with a demand that' he pay said $200 subscribed. Defendant, however, declined to accept the stock certificate or pay the amount thereby called for, basing his refusal on the ground that at the time he subscribed he had ah oral understanding with the committee circulating the subscription paper that he was not to pay in money, but was to furnish wall paper, hard oils, etc., from his stock of goods, and that he had all the time been ready and willing to supply the same. Thereupon this suit was brought; the defendant interposed said .oral agreement as a defense; the case was tried below, where the circuit court excluded all evidence tending to prove said contemporaneous parol understanding. Plaintiff had judgment and defendant appealed. varying written contract. csf/iüngInicies: estoppéi“on: I. The propriety of the court’s ruling on evidence, as above noted, is the decisive question on this appeal. Defendant put his name to a subscription paper which in terms bound him abso- . _ _ _ . lutely to pay $200 m money to the New- land Hotel enterprise; He sought to prove that at the time he signed this paper he had a parol understanding with the promoters of the enterprise that he was not to pay his subscription according to the terms of the writing, but was to be allowed to furnish certain goods in payment of the obligation. That the trial court was right in excluding all such testimony, is settled by an almost unanimous concurrence of authority. Thompson, Liability of Stockholders, sec. 121; La Grange, etc., Road Co. v. Mays, 29 Mo. 64; Haskell v. Sells, 14 Mo. App. 91; Ollesheimer v. Thompson Mfg. Co., 44 Mo. App. 172, and eases cited; Baile v. Calvert College Society, etc., 47 Md. 118; Minneapolis Threshing Machine Co. v. Davis, 40 Minn. 110. In the Olleslieimer case, supra, Judge Thompson, of the St. Louis court of appeals, has fully discussed the question, has collated the authorities, and to .save space we now content ourselves by a reference to that opinion. This question of evidence disposed of, there is little more to be said in this case. The subscription paper became as between the parties thereto a binding contract — the obligation of each and all being a consideration for the undertaking of every other subscriber. And said contract, good between the parties at the time, inured to the benefit of the corporation when subsequently formed. II. Defendant further seeks to escape liability on his subscription because of the conceded fact that he did not sign the articles of association on which incorporation was granted. While it is true that the statute requires that the [244] articles of agreement, providing for and leading np to the incorporation, shall contain “the names and place of residence of the several shareholders and the number of shares subscribed by each,” and that said articles of association “shall be signed and acknowledged by all the parties thereto” (R. S. 1889, secs. 2768, 2769, as amended in 1891), yet under the facts of this case this will not relieve the defendant from his subscription. For the proof is, that after the full capital stock had been subscribed for, the subscribers held a meeting to arrange for the incorporation of the company, and the defendant was there present and participated. It was there unanimously agreed and declared that nine persons out of the fifty-three subscribers should proceed to formally incorporate the company; that such persons should, in behalf of the subscribers, sign as the holders of all the stock and file articles of association, and that the stock should subsequently be issued to each and all the subscribers according to his respective portion. At that meeting defendant voted his four shares in favor of that proposition, and he will not now be allowed to say that he was discharged of his subscription by the performance of an act which he himself directed. He, with the other subscribers, appointed nine of their number to act as their agents and trustees in procuring the incorporation certificate, and he can not now be heard to question their authority. Fair Ass’n v. Walker, 83 Mich. 386; Davis v. Johnson, 49 Mo. App. 240. The judgment is manifestly for the right party and will be affirmed. All concur.