Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/101

 ^2<&&fc>S44&1S £p/-rU?6' ^/ZyCt^tz^t^rr^, ^W- CHAP. VI.] AGREEMENTS TO TAKE STOCK. [§ 108. party to the agreement, did not even exist at the time when the agreement was made ; what standing has it in court to compel the performance of the agreement? 1 But this difficulty is entirely gratuitous, and arises only from the conception of a company as an entity, which at the very moment of the completion of its organization, and thereby, be- comes a " person " distinct from all persons interested in the corporate enterprise. If we regard the company at the time of its incorporation merely as the aggregate of its members act- ing and bound to act in a certain way, and to employ certain funds in a certain manner for a certain purpose, 2 all difficulty 1 " A sub s cription tfljfcake tVjft_jatng ]f: nf a, pnrpnrart nn to hft formed enures t o_the_b_gn£fit_ofJ;hat corporation vlieii_fojrrneiLJ2__Iiiis- wold v. Peoria University, 26 111. 41; Cross v. Pinckneyville Mill Co., 17 111. 57; see Eastern Plank Road Co. v. Vaughan, 20 Barb. 155; S. C, 14 N. Y. 546; and Angell and Ames on Corp., § 523. The insolvencyjxf the_ corporation is no ground to restrain the collection of subscriptions to its slb^rTHiTrTWabash Valley R. R. Co., 21 111. 91. Before the^orgajijza- tion of a corporation, a person sub- scribed for shares as trustee for said corporation; held that he was liable individually in an action brought af- ter the*TCorpoiation had become in- solvent. Johnston, Trustee, v. Allis, 71 Conn. 207. Penobscot, etc., R. R. Co. v. "Bummer, 40 "Me. 172, seems to ho 1(3 an agreement to take shares inthe stock of a future corporation, to Tie as to the corporation a proposal, which is Taindingly accepted by" the corporation when organized recog- nizing the shares so subscribed for as ""shares of its stock. Again it is held that a subscription to shares is a mere offer which may be withdrawn at any time before the corporation is organized; because there is no other party as yet in existence. Hudson 6 Real Estate Co. v. Tower, 156 Mass. .82; Mill Co. v. Felt, 87 Me. 234. See .Thompson v. Page, 1 Mete. 565 ; Stan- ton v. Wilson, 2 Hill, 153; Kennebec, etc., R. R. Co. v. Palmer, 34 Me. 366; Cleaves v. Brick Church T. Co., 1 Sneed (Tenn.), 491; Buffalo, etc., R. R. Co. v. Gifford, 87 N. Y. 294. An unconditional subscription becomes binding upon the formation of the corporation within a reasonable time, if not withdrawn. Balfour v. Gas Co., 27 Oreg. 300. Cf. Badger P. Co. u. Rose, 95 Wis. 145. The right of the corporation to sue is not always well thought out. To say that the agreement enures to the benefit of the corporation when formed raises the disputed question of the compe- tency of a person not party to a con- tract to sue thereon. To be sure, the doctrines of ratification may be re- sorted to where the agreement to subscribe was entered into with per- sons authorized or purporting to act on behalf of the future company. See § 87. 2 Persons may agree with each other as to the terms on which they will take stock in a corporation to be formed by them. Under our system the corporation following such an agreement would be the mere agency of the associates created for the sake 81