Virginian-pilot. (Norfolk, Va.) 1898-1911, 1900-02-07
COURT DECISIONS.
DloEsTED BY w. q. MARTIN.
Exclusively for virginian- Pilot,
Notes Of Cases Recently Decided,
Which are Of Interest to
Our. People.

70
RECOVER OF A SUBSCRIBER AN
ASSESSMENT ON HIS STOCK. IT
rs ESSENTIAL THAT THERE
SHALL BE VALID SUBSCRIP-
TIONS OF THE MINIMUM CAPT.
tai STOCK OF THE COMPANY,
BUT SUCH STOCK NEED NOT BE
z PAID UP.
A SUBSCRIPTION TO STOCK ON
THE ASSURANCE THAT THERE
IS NO PROMOTERS FUND IS
VOIDABLE If SUCH ASSURANCE
is FALSE.
IN SUCH CASE THE SUBSCRIBER
ON ASCERTAINING THE TRUTH
SHOULD PROMPTLY DISAFFIRAl
THE CONTRACT OR HE WILL BE
BOUND.
A STOCKHOLDERS IS CHARGED
WITH KNOWLEDGE OF THE
CHARTER AND BYLAWS OF THE
COMPANY. ACTS OF ACQUIES-
ENCE OR AFFIRMANCE IN
DUCED BY A REASONABLE Elk
PECTATION OF a SATISFACTORY
SETTLEMENT DO NOT PREVENT
DISAPPEARANCE
This was a suit by the plaintiff cor
poration to recover assessments made
on the stock of defendant, who was a
subscriber to its stock He pleaded
that the subscription had been pro-
cured by fraud and the false represen-
tation that there was nothing to be paid
to promoters and also a set-off of the
amounts paid the company on account
Of this subscription. The lower court
gave Judgment In favor Of defendant
for said amounts. and the company ap-
pealed.
The court says:
1t was. of course, essential to the or
ganization of the company that there
should have been subscriptions made
In good faith to the amount of the min
imum capital stock; or. If not made in
good faith, we think should have been
subscribed under conditions which
would have operated as an estoppel
upon the subscriber, but 1t was not ne
cessary that there should have been
actual payment of the assessment The
court had given, at the instance Of the
plaintiff In error. instruction No. z by
which the jury were told that, IL they
found from the evidence that the char
ter was lodged for record in the office
of the Secretary Of the Commonwealth.
the defendant was bound to take notice
OF 1t In any dealings he thereafter had
with the plaintiff company, and that.
If he paid any installment on his stock
thereafter. or participated in a stock
holders meeting he was estopped to
deny knowledge Of the terms and pro-
visions OF the charter, however much
1t varied from his contract of subscrip-
ton; which is correct statement of
the law. Not only is n stakeholder
bound at his peril to take notice of the
charter of the company of which he is
member. but of it's bylaws also.
Where 1t Is established that there
have been any fraudulent representa-
tons by which person has been In
duced to enter into n contract, at is
no answer to his claim to be relieved
from 1t to tell him that he might have
known the truth by proper inquiry"
He has right to rctort upon his OBJ
jector, you, at least, who have stated
what Is untrue, or have concealed the
truth for the purpose Of drawing me
into contract. cannot accuse me OF
want of caution because I relied i'm
plicitly upon your fairness hen
esty."
void. but voidable; therefore. great
punctuality and promDtness of action
are required by the deceived party
upon his discovery of the fraud. 'The
person who has been misled is required,
as soon as he learns the truth, with all
reasonable diligence to disaffrm the
contract. or abandon the transaction,
and give the other party an opportunity
of resembling it, and of restoring both
of them to their original position. He
is not allowed to go on and derive all
possible benefits from the transaction,
and then claim to be relieved from his
own obligations by rescission or re-
fusal to perform on his own part. If.
after discovering the untruth Of the
representations, he conducts himself
with reference to the transaction as
though 1t were still subsisting and
binding, he thereby valves all benefit
OF and relief from the misrepresenta-
TONS" And this duty promptly to dis
affirm fraudulent transaction is not
dependent upon the proof of injury by
the delay to the other party
Conceding, for the sake of the argu-
ment that there was fraudulent rep
resentation in the case before us: that
there was evidence of ratification Of the
transaction after knowledge of that
fraud; 1t would still remain to consider
whether or not the affirmance or ac-
quiescence was induced by n promise
upon the part of the company or its
agents. to eXpurgate the fraud and its
consequences from the transaction and
make an arrangement with respect to
1t, satisfactory to the defendant.
The Jury should have been told that
the acts of acquiescence or affirmance
relied upon by the plaintiff did not pre-
JUDGE the defendent. if induced by the
reasonable expectation upon his part
that the fraud of which he complained
{ would be axDurRata6 0r an
ment satisfactory to him made with re-
a