Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/70

 § 77.] THE LAW OP PRIVATE CORPORATIONS. [CHAP. V. Responsi- bility of a promoter for the acts of other promoters. § 77. Thus far in regard to the personal responsibility of the promoter who himself makes the contract in regard to which the question of his liability arises. As to his responsibility for the acts of his co-promoters other principles of law are involved, which it was attempted to formulate in Propositions II., VII., VIII., and IX. Promoters of a corporation are not presump- tively partners, 1 and they do not become such merely by becom- ing bound on the same instrument. Accordingly, a promoter is not responsible for the contracts of other promoters in the absence of evidence that he has authorized the others to con- tract for him or pledge his credit. 2 Nevertheless, applying principles stated in the propositions referred to, if promoter A. causes any person, acting reasonably, to believe that promoter B. is his agent, A. will be held liable as principal for whatever B. does within the scope of whatever agency A. by his conduct has caused to be inferred to exist between himself and B. 3 Likewise, promoters will be held liable as partners if they have held themselves out as such, or negligently or fraudulently allowed themselves so to be held out by their co-promoters. Thus a prospectus of a projected company, to be formed for the conveyance of immigrants to British Columbia, contained statements calculated to induce belief that arrangements had been perfected for carrying passengers overland, and invited persons to take passage tickets. The defendants allowed their names to be inserted in this prospectus as directors in the con- 1 Reynell v. Lewis, 15 Mees. & W. 517; Bailey v. Macaulay, 13 Q. B. 815; 1 Lindley on Part., pp. 31-33. 2 Patrick v. Reynolds, 1 C. B. N. S. 727; Burbridge v. Morris, 3 H. & C. 664; Wilson v. Curzon, 5 Eng. Railway Cas. 24. A fortiori a pro- moter is not responsible for the con- tracts of other promoters entered into before be became in any way con- nected with the enterprise. Beale v. Mouls, 5 Eng. Railway Cas. 105. In an action against a provisional committee-man on a contract entered into by the committee of manage- ment, appointed by the provisional j 50 committee, it is a question for the jury whether the defendant ap- pointed the managing committee bis agent to pledge his credit. Where, however, nothing else appears than that there is a managing committee appointed by the provisional com- mittee, the jury ought not to con- clude that the former has authority to pledge the credit of the" latter: Williams v. Pigott, 5 Eng. Railway Cas. 544; see Dawson v. Morrison, ib. 62. 8 Roberts M. Co. v. Schlick, 62 Minn. 332.