Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/73

 CHAP V.] PROMOTION OF A CORPORATION. [§8L § 80. Promoters are bound to observe good faith in their dealings with each other, and one promotor must in- demnify the others for damages arising from any latfons™" unauthorized acts of his affecting their rights and promoters, interests. Should, for instance, one promoter with- out authority attach the names of his co-promoters to any pro- spectus or other document, he would be liable for their damages resulting. Moreover, although promoters may have acted in such a manner as to induce belief in outsiders that the relation- ship of agency or partnership exists among them, so that as to outsiders they have made themselves responsible for each other's acts, still, if no such relationship in truth exists, any promoter doing any act by which liability! attaches to his co-promoters may be held to indemnify them. If, as a matter of fact, the relationship of agency or partnership exists between promoters, they will be held, as among themselves, to the strict account- ability of trustees ; and the legal and equitable rules, regulating agency and partnership, will be applicable. § 81. The principles of law applicable to persons becoming jointly bound on one instrument apply to promoters, and in such case, should one of them be obliged to pay the whole debt, he can enforce contribution from his co-debtors. 1 So, where promoters have made an agreement to share expenses, such agreement will hold good between them, and will be en- forceable at the suit of any one of their number who may in good faith have paid more than his share of the expenses of the scheme. Promoters, or provisional committee-men, although not partners, are not entitled, in the absence of any special agreement, to remuneration from each other for their services in promoting the organization of the corporation. 3 1 Several provisional committee- men became jointly liable on the same contract. One of their num- ber was forced to pay the whole debt. Subsequently he brought suit for contribution, some of his as- sociates having died in the mean time. It was held, provisional com- mittee-men not being partners, that each was liable to contribute to the one who had paid the whole debt only the same aliquot part that each would have been obliged to contrib- ute had there occurred no deaths. Batard ». Hawes, 2 El. & B. 287. 2 Parkin v. Fry, 2 C. & P. 311. The case of Holmes v. Hi«gins, 1 B. & Cr. 74, decides the same point in the same way, hut on the ground that promoters are partners; in this re- spect the case is no longer law; see §77. 53