The times. [volume] (Richmond, Va.) 1890-1903, 1898-01-28

city had no interest in the bonds. nor
IN the corporation. Its Council, therefore.
had no power TO bind II TO guarantee
these bonds. Municipal corporations are
mere agencies OF the State for certain
ends, and in the exercise OF their powers
are governed by the same general prin-
ciples ms In the case or principal and
agent. The authority TO expend the prin-
cipal's money in doing a particular act
Is altogether different from lending the
principals credit 10 another to enable him
to do the same act for himself, and IN
which, when done, the principal has no
interest. The open and direct appropria-
ton of money has nothing In common
with the contingent and long continuin g
contract OF suretyship. La. State Bank vs..
Orleans Nav. Co, 8 La. ANN. 2si. 800. See
opinion Of President Keith in Rich. and
West Point Land Nav. and Imp. Co. vs..
Town OF West Point. a. S. +. r, i6)-6l
Blake vs.. Mayor, etc, 81 Ga, l73.
EsTOPPEL.
Cardwell, receiver VS.. Kelly. Reversed
Opinion by Judge Rely.
The sale question Is whether a subscribe
er TO the stock of a corporation who was
allurred 20 subscribe by the chance OF
being allotted a lot or lots I'm q drawing
for distribution OF lots of unequal value.
can by reason thereof escape the pay
ment OF his subscription not 10 the cor
poration but to its creditors whose debts
were contracted upon the faith Of his and
other subscriptions.
In the view which the court takes of
this case II Is not necessary TO decide the
question whether the scheme out OF
which this controversy has arisen Is with
in the prohibition of the statute as TO lot
terles. After reviewing the law as 10 IL
legal contracts contracts contra bonos
mores, etc, etc, ii is
Held: III the corporation were seeking
TO recover the subscription and was sol
vent. then inasmuch as its payment would
enable the unlawful design OF a lottery
TO be carried out. IL would be proper to
allow the defendant TO show the unla"-
ful purpose in order TO DEFEAT the IRAN
sactlon and prevent similar ones in the
future; but to allow him 10 do 50. after
II has become insolvent would confer i'm
munity from liability on the guilty and
not restrain but encourage such Illegal
schemes.
Moreover refusal TO enforce payment
after insolvency OF the corporation would
not only fail TO advance the interests OF
the public and contravene the pohcY OK
the law; but would result in great inJus-
tice TO innocent creditors. This is not an
action by the corporation, one OF the
guilty parties seeking 10 enforce pay
ment of the illegal subscription, but by
instance OF creditors Of the corporation
TO collect the subscription due to II for
the payment Of it's debts. 1T is an in
disputable proposition that as against
an innocent party. no man shall set up
his own iniquity as defence any more
that "a n cause OF action" Lord Mans
field. in Montetiori VS.. Montehori, VIM.
Blackstone's Rep. 36i see also Petit vs..
JsnnInus Ro'S GIG.
Q Tn. capital stock OF a corporation Is
its basis OF credit. To this persons deal
ing with il look ana upon 1t they rely, "a
security for the payment OF its obliga-
tions. They have the right 10 assume
that IL has been fully paid or Is vouehed
Inv valid subscriptions. Having no knowl-
edge OF any vice I'm its subscriptions they
are entitled to rely upon It's capital
stock as having been lawfully created
The subscribers 10 its stock are estopped
10 DENY the reality Of what they made u
appear TO exist. and upon which Others
were led 10 rely. The law In such ease
makes the apparent real as 10 those who
have been thus misled to their injury
See Martin, etc. vs.. so. Salem Land Co
% Virginia.
8 Neither the contract OF subscription
nor the prospectus which was referred u
and made part OF n was unlawful on us
face. Their Introduction In evidence wa