The record-union., 1891-03-19

Concedlng that Bours was Arguello's
agent and had no right to sell to himself.
the evidence tends to show that Arguello
knew after he received the money by the
check of Bours, that the purchaser who had
gone into possession was Bours, and that
Arguello did not object but ratified his
agreement to sell after the disclosure of
the name of the intended purchaser who
was Bours, his agent.
This being the case, and the sum paid
having been the full and fair price for the
land, the contract is not open to objection
on the ground of fraudulent concealment.
Certainly 1t could not be avoided by Ar
guello or his heirs. unless they return or
offer to return the money paid, which
they have not done.
We therefore advise that the judgment
be afnrmeo. Fo6rE, c.
We concur:
HAYNE, c.,
BELcHER, c.,
THE COURT.
For the reasons given the foregoing
opinion the judgment is affirmed.
Filled at Los Angeles, March 8, 1871
DEPARTMENT TWO.
CALIFORNIA SOUTHERN
HOTEL COMPANY,
Appellant, No. 1881
C. J. RUSSELL,
Respondent
The facts of this case are as follows:
Prior to August II, 1887, the defendant
and others signed a paper by which they
agreed to and with each other that they
would organize and form corporation
for the purpose of erecting and owning a
hotel building in the city of San Luis
Obispo, and of purchasing all real and
personal property necessary to be used in
connection with the said building; that
the capital stock of the said corporation
should be 100000, divided into 1000
shares, of the par value of Sl00 each; that
they respectively subscribed for such
number of shares of the stock of the cor
poration as were set after their respective
names, and would pay for the same up to
the par value thereof, at such times and
in such manner as might be determined
by the Board Of Directors of the corpora
ton to be thereafter chosen.
The paper then contains the following
clause: And we further agree that
whenever seventy thousand (S70,o0O)
dollars of said capital stock has been sub
scribed for, meeting shall be called for
the purpose of electing Board OF Direct
orS, and taking such steps as are required
by law to form the said corporation, and
that AT such meeting the owners of ma
jority OF said subscribed stock shall con-
stitute quorum, and are authorized to
elect said Board of Directors and transact
any business necessary to fully complete
the organization of the said corporation" :"
The defendant subscribed for ten shares
of the stock, and the paper showed sub
scription in the aggregate for ~ shares.
The second and third subscription in
the list were as follows:
Pacific Coast Steamship Company, for
itself and Pacific Coast Railway Com
Mt Nf iCybt trrrrn
and material shipped from ports south of
Mendocino and north OF San Diego, both
inclusive. (This subscription is in place
of and is q substitute for any and all other
subscriptions made by or for or on account
of the Pacific Coast Steamship Company,
or the Pacific Coast Railway Company,
for stock of or i'll any proposed hotel COM
pany since the burning of The Andrews ,
about April, 1886. Goodall, Perkins IL
Co., general agents.) Estimated about
slo,oop."
Edwin Goodall-the block of land
bounded by Higuera, Johnson, Marsh
and Essex streets, for site for hotel, If
accepted and used for that purpose, 81 500,
and in that case cash, S., ,000,-; No. shares,
125- amount, So, 500"
Subsequently, Edwin Goodall, for
himself and the Pacific Coast Steamship
Company, united with others in calling a
meeting of the subscribers. The meeting
was held and Goodall was present and
! voted the full amount of stock subscribed
for by himself and the Steamship Conn
pany, viz: 225 shares. The result was
| that on August II, 1887, corporation was
| organized in the name of the plaintiff
with capital stock of 100000, divided
into 900 shares of 500 each.
The defendant was not present at the
preliminary meeting, and did not acqui-
4
reformed on the subscriptions which had
been made, and he never ut any time
recognized the validity of the corpora
ton.
The articles on incorporation included
the names Of the Pacific Coast Steamship
Company for 100 shares of stock, and of
Edwin Goodall for 125 shares, without
conditions, and they left out the names
of five OF the subscribers, whose aggre-
gate subscriptions were for fifty shares
The corporation proceeded to erect a
hotel building and has since opened and
conducted the same as hotel.
The Board of Directors of the corpora
ton made calls for the payment of the
full amount of the subscriptions, in in
stallments of 20 per cent. each. The
defendant refused to pay the amount
subscribed by him, or any part thereof,
and this action was brought to recover
| the same.
The case was tried by the court, with
out jury, and, among other things, the
court found that 'the subscription of the
Pacific Coast Steamship Company and
Pacific Coast Railway Company was
made by Edwin Goodall, a member of
| the firm of Goodall, Perkins & Co., gen
eral agents for said companies, and was
| not authorized by said companies
Judgment was then entered that the
plaintiff take nothing by its action.
| From that Judgment the plaintiff APP
| pealed and has brought the case here on
the judgment-roll.
1t is claimed for appellant that judg-
ment should have been entered in its
favor on the findings. We do not think
so. Under the agreement the subscrip-
ton of $4,000 was condition precedent
| to the calling of a meeting and forming 9
corporation. And until that condition
was complied with the defendant in.
CURED no obligation to pay his Subscrip
ton. Santa Cruz r. r. Co. VS.. Schwartz
So Cal. 1G6; see also American Law Reg
| lister. D. Z, and cases cited.) But it very
| clearly appears that the condition was
not complied with for two reasons. First
| the second subscription for $4,000. hav.
ing been made without authority, was in
valid and could not be counted in making
up the so, ,0C0. And If the unauthorized ac
was afterwards ratified, still the rights o
the defendant was not thereby affected
and could not be without his consent
| ond and third subscriptions, amountin,
to So, 800, were both conditional and no
absolute.
Under these circumstances we thinl