The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-06-08

OPeiOu nAu lapsed completely before the com
pahy was organized nor was it ever afterwArd
renewed, though it seems renewal could have
Deen procured. The defendants took no part in
the organization or any subsequent proceeding
OF the corporation, nor did they ever assent TO
Tue location OF the hotel on any other than the
hrst SITE unless, as counsel for plaintiff con
TENDS, their assent is to be implied from a con-
structlon OF the charter as part of the subScrip-
ton contract
A change of site was discussed by the other
stockholders at the organization meeting,
Whereupon Mr.. Henry Blum stated that his sub
scrlpton to the capital stock OF the company
was made upon the understanding that the site
upon which the hotel would be built would be in
the rear Of the lots owned by Messrs. Bacon
Smart and others. and he would withdraw his
SUBSCRIPTION unles' the aforesaid site be ad-
hered TO. MIR. A, VeIsburg contended that it
would be better to allow Mr.. Blum to withdraw
bis subscription than for the company to be
bound TO build upon any one location. After
general discussion ensued Mr. Blun waived his
objection. This statement, by one of the
mutual contracting parties, in the presence of
the others, at the time of their organization
before any officers were elected, went uu-
challenged, and, as an admission, is competent
evidence for the purpose of showing the mean
ing placed upon the subscription contract by
the parties themselves.
THE CHANGE OF LOCATION.
On December, 1888, an option on other land
at the request OF Herman Myers was given by
the Iy6ee Beach Company for the same pur-
poses, which was accepted by the Tybee Hotel
company, a deed for 1t was executed May H.
1883, and on this site, about a mile distant from
tne nrst named one, the company decided to
build its hotel
The defendants refused TO pay their subscrlp-
ton on the ground that the contract had been
changed without their consent.
Having sScertained that the special and
fundamental object and intention of the
secure a charter for the purpose
of taking advantage of, and of
erecting hotel on the land first donated, is
there anything in the charter which released the
corporation from its primary obligation TO sub
scribers 10 carry out this object? We think not
The charter empowers The Tybee Hotel Com
pany in accordance with the statements in said
petition as to the object of petitioners, associa-
ton and the particular business they propose
to carry on, to acquire by purchase or other
wise site or sites on Tybee Island in the
county of Chatham, in said state, for hotel
purposes and to erect thereon, or on some part
or parts thereof, hotel or hotels, with such
offices, cottages, places of business and other
| accessories and appurtenances in connection
herewith as the said corporation may deem
necessary or useful The powers granted are
the same as those applied for In the petition.
THE RIGHTS OF THE SUBSCRIBERS.
We can see no difficulty in the corporation
discharging its primary obligation and at the
same time retaining aud exercising all its fran
chlSes, as occasion might require. There is no
inconsistency. In determining the rights of the
parties, however, a wide distinction between q
duty and mere privilege is to be observed.
The subscription contract imposed positive
duty. The charter merely cOnfers privileges.
| The privileges do not conflict with the duty.
They permit the performance of the
duty. They are powers 10 acquire
the first site by purchase or otherwise and to
acquire other Sites to build the first hotel con-
tempated and to build others. The first site
and MOTEL were already ascertained and located
at the time of the subscription contract The
other sites and hotels were in the future, mere
personalities in the charter. and might never
| materialize, By no reasonable construction
can the assent of defendants to the petition for
this charter be held to be waiver of that which
was the consideration inducing their assent.
Even II there were any Inconsistency. greater
stress should rather be placed upon the con-
sideration as separate and independents ssen-
tia of the contract.
There was possibility that change of site
might be advisable and that all the subscribers
might agree upon another site. 1t was there
fore consistent and proper to have the powers
of the corporation sufficiently broad to meet
this contingency. But no subscriber without
his assent could be carried into a new hotel
project, and it became q new project to the de-
PENDANTS when the first site was abandoned and
new site in its stead was to be developed.
THE COMPANY THEN IN EXISTENCE.
The plaintiff corporation was not in existence
at the time the contract was formed. What
standing has 1T in court to compel the per
Torrance of tie agreement? Two views are
presented by the decisions and text writers.
''If we egard the company at the time of its
incorporation merely as the aggregate of its
members, getting aud bound to act
in a certain way and to employ GER
tain funds in a certain manner for
certain purpose: we shall then
thereto, acting In precisely the manner contem-
plated, to wit: AS a corporation through the
medium of corporate machinery and organiZa-
ton" IF, however, we prefer to regard the
corporation as distinct entity, as the third
person for whose benefit the contract was made,
the rule is generally accepted that where two
persons contract for the benefit of third. such
third person may sue upon and recover upon
such contract. 9th Am. and Eng. Corp. Cases,
D. 49, note
In whichever attitude the relation of the
parties may be viewed, it Is clear that the cor
poration cannot succeed to the benefits of the
subscription contract without at the same time
assuming the burden imposed by it. The
burden in this case was to accept the first site
named as having been donated, and to build
thereon, with the funds subscribed, the hotel
for which both donations and subscriptions
were made.
When, however, this donation for counsel for
defendants in argument treated the option as
being substantially donation) was not accepted
but was permitted to lapse, and in lieu thereof
different site, one mile distant was applied
for and obtained and the hotel of the company
was erected thereon, this was a material and
fundamental change in the contract. and the
defendants A. Ehrlich Z Bro, never having
assented to the change. were thereby released
from liability for their subscription.
THE JUDGES RULING.
In conclusion the judge ordered that
Judgment be rendered for the defendants
against the plaintiff, with the costs OF the
suit.
Another similar quit, that of W. II. Ray,
involving two shares of stock, was also de-
cided yesterday.
Practically the same questions of law
we're raised as in the suit of Ehrlich & Bro.
The facts of this case, if anything, Judge
MacDonel remarked in his decision, make
stronger case for the defendant than that
of Ehrlich 81 Bro.
The decisions in the two cases affect a
number of shares of the hotel company
stock There has already been considerable
litigation over the payment Of stock on
account of the location Of the hotel on the
lower end OF the island. The decisions by
Judge MacDouell practically settle the mat
ter unless the case is appealed, Of which,
however, no notice has been given.
THE TYBEE WHISKY GASES.