Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/102

 § 109.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VI. will be avoided ; and we shall then have the contract enforced by the parties thereto acting in precisely the manner con- templated, to wit,, as a corporation, through the/medium of cor- porate machinery and organization. By means-of this natural conception all difficulty is avoided, and no violence is done to the strictest requirements of logical or legal thought. § 109. Accordingly, the proposition may be regarded as law throughout the United States, that when several persons mutu- ally agree to subscribe for shares in a corporation to be formed by the subscribers for the advancement of their interests, the corporation when organized may recognize the subscribers as shareholders, and enforce the subscriptions ; * and especially is this true when the subscription-agreement is made with persons who by statute represent the future corporation for the purpose of receiving subscriptions. 2 If, however, the parties to the subscription-agreement are not themselves the organizers of the corporation, and in no sense represent the future company, and are a different body of men from those composing the corporation when formed, then is certainly raised the difficult question of the right of a third person to sue on a contract. 3 of convenience in carrying out the bargain. Chater v. San Francisco Sugar Refining Co., 19 Cal. 219. 246. 1 Atbol Music Hall Co. v. Carey, 116 Mass. 471; Marysville, etc., Co. v. Johnson, 93 Cal. 538; San Joaquin Land, etc., Co. v. West, 94 Cal. 399; Same v. Beecher, 101 Cal. 70; Minne- apolis T. M.Co. v. Davis, 40 Minn. 110; Richelieu Hotel Co. v. Military E. Co., 140 111. 248; Buffalo & James- town K. R. Co. v. Clark, 22 Hun, 359; aff'd 87 N. Y. 632; Twin Creek, etc., Turnpike Co. v. Lancaster, 79 Ky. 552; Boot and Shoe Co. v. Hoit, .">(> N. H. 548; Tonica, etc., R. R. Co. v. McNeely, 21 111. 71; Johnston v. Ewing Female University, 35 111. 518; Red Wing Hotel Co. v. Friedrich, 26 Minn. 112; Whitsitt V. Presbyterian Church, 110111.125; Haskell r. Sells, 14 Mo. App. 91. See Peninsular Ky. Co. v. Duncan, 28 Mich. 130, 134; 82 Fair Ass'n v. Walker, 83 Mich. 386, and authorities cited in note 1 to § 91. Compare Burt v. Farrer, 24 Barb. 518; Howe v. Flagg, 72 111. 397; Marseilles Land Co. v. Aldrich, 86 111. 504, and the cases cited in notes to § 91. 2 Delaware and Atlantic R. R. Co. v. Irick, 23 N. J. L. 321; Hughes v. M'f g Co., 34 Md. 316. 3 See Lake Ontario Shore R. R. Co. v. Curtiss, 80 N. Y. 219, where de- fendant and others signed the follow- ing instrument: "We, the under- signed, citizens of Unionville and vi- cinity, pledge ourselves to subscribe for and take stock iu and for the con- struction of the Lake Ontario Shore R. R. Co., to the amount set opposite our names respectively, on condition said road be located and built through or north of the village of Unionville." The railroad was built so that it ful- filled the condition above, but it was