Case Name: Chesapeake and Ohio Canal Company v. Patrick Dulany
Court: United States Circuit Court of the District of Columbia
Jurisdiction: United States
Decision Date: 1830-05
Citations: 4 Cranch 85
Docket Number: 
Parties: Chesapeake and Ohio Canal Company v. Patrick Dulany.
Judges: 
Reporter: Reports of cases argued and determined in the Supreme Court of the District of Columbia (District of Columbia - reported by Mackey)
Volume: 4
Pages: 85–85

Head Matter:
Chesapeake and Ohio Canal Company v. Patrick Dulany.
A person -who becomes a member of a corporation is bound to know the obligations which he thereby incurs.
Those obligations are matters of law resulting from the construction of the charter.
If both parties were equally mistaken as to that construction, it is no ground in equity or law, for setting aside the obligation of the contract.
Motion, by Mr. Wallack, for the plaintiffs, for judgment against the defendant, Patrick Dulany, for the amount of the instalment called for by the company, on his shares, upon ten days’ notice, under the 5th section of the charter of 27th of January, 1824.
Before the Court delivered its opinion, Mr. Key, for the defendant,
referred to the following authorities, as to mistake of fact or law. Gee v. Spencer, 1 Vern. 32; Graham v. Henderson, 5 Mun. 185; Armstrong v. Hickman, 6 Id. 287; Powell on Contracts, 196; Newland, 432; Pothier, 14; Jolliffe v. Hite, 1 Call, 301; Lyon v. Richmond, 2 Johns. Ch. Ca. 51; Blennerhasset v. Hay, 2 Ball & Beattie, 128; Gray v. Ghiswell, 9 Yes. 125; Wiser v. Blackly, 1 Johns. Ch. Rep. 607-667.

Opinion:
CRanch, C. J.,
delivered the opinion of the Court (nem. con.) as follows:
The defence set up in this ease is, that the defendant subscribed under a mistake as to the right of the plaintiffs to coerce payment of future instalments; and that he was led into that mistake by the opinion of Mr. McCleary, who took from him his power of attorney to Mr. Smith, to subscribe; and who, in answer to an inquiry by the defendant, said that he did not think that the future instalments would be enforced, but that the shares might be forfeited by their non-payment.
The defendant, when he became a corporator in this company, was bound to know the obligations which he thereby incurred. Those obligations were matters of law resulting from the construction of the charter. Whether a subscriber was or was not liable to pay future instalments, was a question of law arising upon that construction. If both the parties were mistaken as to that construction, it is no ground, in equity or law, for setting aside the obligation of the contract. 1 Fonblanque, 106; Lord Irnham v. Child, 1 Bro. C. C. 91; Howard v. Hopkins, 2 Atk. 371; Gwinn v. Poole, Lutw. 1569; Powell's opinion; Dig. 22, tit. 6; Cod. 1, 18; " De juris et facti ignoraniid " ; Code Napoleon, 2052, 2053, 2058; Eden on Injunctions, p. 10, and the cases there cited.