Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/104

 § 111.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VI. tion when organized, any material divergence of the corporate scheme from the plan justifiably contemplated by a party to the agreement to take shares at the time of his signing the same, or paying deposits in accordance therewith, will release him from his contract, and may entitle him to recover any moneys paid or expended by him in pursuance of its terms. 1 If the divergence alluded to is immaterial, or such as was con- templated in the original agreement as a possibility (i. e., no divergehce at all) ; or if a party has acquiesced in the diver- gence, which may be implied from long-continued neglect to repudiate, he will not be released from his agreement to take shares. 2 But usually from mere lapse of time, unless very great, acquiescence cannot be inferred ; there must be some reason to infer knowledge on the part of the dissenting party of the violation, and neglect to repudiate after that knowledge had been obtained. 3 § 111. The qualification, " as between the party to the agree- ment and the corporation when organized," is to be noted ; for, should such a party refrain from enforc- ing his rights for any considerable length of time, Effect of subscrib- ers' laches 1 Knox v. Childersburg Land Co., 86 Ala. 180; Maysville, etc., Co. v. Johnson, 109 Cal. 192. So failure to organize within a reasonable time releases the subscriber. lb. " A person who agrees to take shares in a company formed for a given pur- pose and with a given capital, is not bound to accept shares in a company formed for another purpose or with a different capital; a material varia- tion from the original scheme, if un- assented to by a subscriber to it, affords an answer to any application for calls which may be made upon him." 2 Lindley on Part., G25, citing Galvanized Iron Co. v. Wes- toby, 8 Ex. 17. See Rye's Case, 3 Jur. N. S. 460; Ship's Case, 2 De G., J. & Sm. 544; Stewart's Case, L. R. 1 Ch. 574; Webster's Case, L. R. 2 Eq. 741. 2 London, etc., Assurance Soc. v. 84 Redgrave, 4 C. B. N. S. 524. " But if a subscriber to a company binds himself to take shares in a company which may differ more or less from that originally proposed to be formed, he cannot set up a variation in the original scheme as an answer to a demand for payment of the capital he has undertaken to con- tribute." 2 Lindley on Part., 625. See Midland, etc., R. Co. v. Gordon, 16 M. & W. 803; Nixon v. Brownlow, 2 H. & N. 455; S. C, 3 H. & N. 686; Norman v. Mitchell, 5 De G., M. & G. 648. 8 See cases cited in last note but one, and Nichol's Case, 2 W. N. 77; Bailey's Case, L. R. 3 Ch. 592. The repudiation was held too late in Law- rence's Case, L. R. 2 Ch. 412; Brigg's Case, L. R. 1 Eq. 483; Whitehouse's Case, L. R. 3 Eq. 790; Taite's Case, L. R. 3 Eq. 795.