Court Opinion

ID: 6894007
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:47:37.515795+00
Date Added: 2024-06-11T16:05:55.216977
License: Public Domain

Mr. Justice Prim,
dissenting:
Being unable to agree with the opinion of the majority of the court in this case, I feel compelled to dissent.*
Under the facts as developed by the evidence iu this case, I hold that it Avas the duty of Euble: 1. To have filed the third articles of incorporation in Jackson county; and, 2. To have bought the mining ground iu dispute for and in the name of the corporation then being formed for that special purpose; not, as is claimed by him, Avith money of his own, which Avas to be returned to him, but Avith money which he, and others engaged in the enterprise, had agreed to advance for that purpose, and in consideration of which Euble was to OAvn and to have issued to him fifty thousand shares of the stock of the corporation, when the same was in a condition to make such issue.
But it is sought, on behalf of Euble, to repudiate and avoid his agreement Avith the subscribers to the preliminary agreement and Avith his co-corporators, on the ground that *301the corporation was not in existence at the time when the agreements were made and at the time the conveyances were taken, as at that time the third articles of incorporation were in the possession of Ruble, and not on the files in Jackson county, where, under his agreement, they should have been. This position appears extremely technical, and, in my judgment, should not be allowed to prevail. “Ruble, being at the time a special agent and trustee for the purpose of filing these papers and securing these mines to the corporation plaintiff, ought not to be allowed, even in a court of law, much less in a court of equity, to take advantage of his own wrong and want of good faith, since equity always treats “that as done which of right and justice should have been done.”
It is further claimed that Ruble was exonerated from compliance with his agreement on account of irregularity in the organization of the plaintiff corporation, as well as informality in its subsequent proceedings. In answer to this position, it may be suggested that it could have made no difference whatever with Ruble as to what was to have been done after he had complied with his agreement, inasmuch as he did not comply with it, whether the subsequent proceedings were regular or not. Thus it will be seen that subsequent informality could not exonerate him. And it will be further noticed, by closely observing the facts, that nothing would have gone wrong in the entire enterprise, except for Ruble’s own dereliction and want of good faith. In the view which I have taken of this case, I regard it as immaterial whether Ruble, technically and in the strict sense of the term, became a stockholder in the plaintiff or not. There can be no doubt but that the preliminary subscription, gotten up by Muncy, related to the property in question, and that the plaintiff was incorporated for the purpose of absorbing this very preliminary association. It was understood between Ruble and his associates, after subscribing the Muncy papers, that he was to own one fourth of these mines, and that the others were to own interests therein in proportion to the amount subscribed. After signing the Muncy papers, Ruble took a lively inter*302est in the enterprise, and assumed nearly the entire management thereof, suggesting the propriety of incorporating immediately, preparing the articles of incorporation, and causing them to be executed, acknowledged, and filed, as required by the statute in such cases.
In the organization of the incorporation the Muncy subscription was adopted as its subscription of stock, as is conclusively shown by the construction placed upon it by all parties concerned in the enterprise. All the subscribers, including Ruble, recognized and treated it as such. Ruble notified them, as subscribers of stock, to appear at Monmouth on September 14, 1878, for the purpose of organizing the corporation, by electing directors and other officers. All of the subscribers, in obedience to this notice, did appear either in person or by proxy, and the organization of the plaintiff, then and there accomplished, was based upon this subscription and none other. Ruble claimed to own fifty thousand shares in the stock by virtue of said subscription and the right to vote the same. As a matter of fact he was elected one of the directors of the corporation by virtue of this subscription, and he was also elected secretary of the corporation. Both of these offices he then and there accepted, and entered upon the discharge of these duties. As such secretary he transferred the preliminary subscription to the regular stockbook of the company, with the exception of his own subscription, which he failed and refused, for some cause, to transfer. He also issued certificates of stock to all the subscribers except himself. Having thus taken the lead and principal management of this enterprise upon himself, he has succeeded in securing the title to the property in dispute in his own name; which virtually gives him control of the other mines not conveyed to him, as he has succeeded in securing those which control the water rights.
I claim that, under the facts in this case, Ruble is estopped in equity from denying that he is a stockholder in the plaintiff. (Thompson on Liability of Stockholders, secs. 105, 124, 162, 165, 166; 5 Otto, 667; Dong v. Naper, Supreme Court of Ill., 8 Reporter, 522.)
*303And while I concede that in equity Ruble may have been entitled to a lien upon the property in dispute, to secure him in whatever amount he may have advanced or paid on the property in excess of his proportion, and that while the court might and should have secured said lieu by a proper decree, I am unable to assent to the proposition that he may “change his mind, either through good or bad motives,” and wholly retire from the enterprise and hold the property in his sole right, unless his associates shall refund to him the whole amount advanced by him to pay for said property.
In my opinion the bill ought to be retained and the decree of the circuit court modified in accordance with the views herein expressed.

A very full statement of facts embodied in the opinion is omitted.—Reporter.