Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/96

 § 101.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VT. for example, if the instrument should provide that the parties thereto should act as each other's agents in the furtherance of the scheme, and share any profits or losses arising before the incorporation of the company. Such provision, however, would ordinarily be absent, and by merely entering into a binding agreement to take shares in a corporation to be formed, persons do not become partners, nor liable as principals for each other's acts as agents. 1 To be sure, after the agreement is executed, supposing it to be a mere agreement to take shares, the parties thereto may so act that outsiders are justified in concluding that the relation- ship of principal and agent or of partners exists among them; and this on principles before discussed in relation to promoters. 2 Therefore, while in fact, as among themselves, no relationship of agency or partnership exists, they may be held responsible to outsiders for the acts of each other, either as principals or as partners, according to the circumstances. § 101. To what extent a party to an agreement to take shares in the stock of a corporation to be formed may, by Assign- l .... meiit of assigning his interest m the agreement, relieve min- er's inter- self from future liability, will depend on a proper est ' construction of the instrument itself, qualified by the general maxim, that while a man may assign or waive any rights accruing to him under an agreement, he cannot divest himself of his liabilities arising therefrom. 3 It would be most unjust to hold, where responsible persons have joined in an agreement to furnish funds for the advancement of a scheme of incorporation, and to take shares in the stock of the future company, that under such circumstances any one of them may avoid fulfilling his contract, by assigning his interest to some irresponsible person. It must be admitted, however, that un- der somewhat analogous circumstances the' English cases hold that a shareholder, even in a company of unlimited liability, may free himself from any future liability by transferring his shares to a man of straw for that very purpose, provided the iShibley v. Angle, 37 N. Y. 626. See Fay v. Noble, 7 Cush. 188. Thrasher v. Pike County R. Co., 25 111. 393; and compare Garnett v. Richardson, 35 Ark. 144. 76 2 See § 77. 3 Graff v. Pittsburgh and Steuben- ville R. Co., 31 Pa. St. 489.