Court Opinion

ID: 7963593
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:48:32.639036+00
Date Added: 2024-06-11T16:34:34.522850
License: Public Domain

Cornell, J.
The principal objection urged to the sufficiency of the complaint is founded upon the assumption that the condition annexed to the defendants’ subscription of stock was a condition precedent, the performance of which had not been complied with by the building of a hotel on the designated site, at the time the assessments were made, the payment of which it is the object of this action to enforce. The subscription paper, which was signed by the defendants and •others, is set forth in the complaint <as follows: “We, the subscribers, each for himself, and not for the others or any of them, do hereby subscribe and agree to pay for the number of *115shares of the capital stock of the corporation known as the Bed Wing Hotel Company, set opposite oar respective names, said shares to be by us respectively paid for at such times and in such amounts as the board of directors of said corporation may from time to time require; said shares are fifty dollars each: provided, nevertheless, and our .subscription is expressly upon the condition, that the hotel to be built by said corporation shall be by it built and located upon the southeasterly corner of block 4é, and the northwesterly corner of Bush and Main streets, in the city of Bed Wing, Minnesota, otherwise this instrument to be and remain wholly void.” The language, “We do hereby subscribe and agree to pay,” clearly indicates an agreement in prcesenti to take the shares so subscribed, and to pay for the same whenever requested by the plaintiff’s board of directors.
It is also obvious that it was within the contemplation of the parties that the hotel referred to was to be built by the company out of the avails of its stock subscriptions, which were to be called in as the directors might require, for the prosecution of the enterprise. The promise of payment was not to pay the whole at one time, and when the hotel was' built, but to pay in instalments from time to time upon the request of the directors, to enable the company to carry forward the undertaking. Construing the proviso in view" of these facts, it is manifest that the condition in question, so far ns it relates to the construction of the hotel, was a condition subsequent and not a condition precedent. The assessments, therefore, were not invalid because they were made prior to the full completion of the building. Ashtabula & New Lisbon R. Co. v. Smith, 15 Ohio St. 328; Chamberlain v. Painesville & Hudson R. Co., 15 Ohio St. 225.
■ It is further objected that the complaint contains no averments showing, the corporate powers of the plaintiff, and, therefore, it does not appear that it had any legal'capacity to make the contract it did with the defendants. To this it is a *116sufficient answer, that the complaint distinctly alleges the creation and corporate existence of the plaintiff under the laws of the state, and avers that the articles of association which it adopted, and by which it became incorporated, authorized and provided for a capital stock of fifty thousand dollars, to be divided into one thousand shares of fifty dollars each, payable, in instalments of not less than ten per cent, at any one time,, upon the call and notice of its board of directors, and, further* that both the defendants signed and executed said articles,, and were named therein as corporators. It is thus shown upon the face of the complaint that the corporation had authority to receive subscriptions to its capital stock and to^ make contracts therefor, and that both the defendants presumably knew the character and extent of its corporate powers, whatever they were, when they subscribed for the twenty-shares of its stock. If the building of a hotel did not eom& within the scope of these powers, as is suggested, that fact would not, under the circumstances, relieve the defendants from liability upon the subscription, for the reason that the building of a hotel was not made a condition precedent to the right of the company to demand payment and enforce its collection. The obligation of the company to build, and that of the defendants to pay the amount of their stock subscription, were in no way dependent upon each other. The one might-stand though the other should fall. Moreover, the complaint, alleges that the condition has been fully complied with. The defendants have received the full benefit of its performance, and got all they contracted for by the stipulation. If, in entering into the stipulation, and performing the condition, the company acted ultra vires, they have not been prejudiced* and it does not lie with them, after performance by the company, to object that it was not bound by the condition in the first instance, especially as they knew that fact when they made their subscription.
As shown by the return to the appeal on file in this court* *117the complaint contains an averment that the hotel was built by the plaintiff. The point made upon the want of such an •allegation is, therefore, unfounded in fact.
Upon all questions of fact the findings of the referee must be taken as conclusive, for the record before us does not purport to contain, all the evidence. From these findings it appears that the subscription in question was signed and executed by the defendants, on the eleventh of February, 1874, and was afterwards, on the fourth day of March next following, reported to and accepted by the company, at the first .meeting of its board of directors, held on that .day. In considering the legal effect of the subscription, then, it must be 'regarded as having been made on the day of its acceptance by the company, when, if at all, it first took effect and became operative as a contract between the plaintiff and the defendants. Stanton v. Wilson, 2 Hill, 153. At that time there is no question that all the requirements of the statute relating to the creation of incorporations of this kind had been fully complied with, and the plaintiff had thereby become a corporation duly organized and legally empowered as such to do business. It had legal capacity at that time to take and accept the stock subscription of the defendants, then reported to it for its action, with their consent — as must be assumed from the findings — and the acceptance constituted it a mutual contract between the company and the defendants from that date, by which the latter became, subject to the conditions therein named, bound to take and pay for the number-of shares so by them subscribed, and the former to issue and deliver certificates of the same, upon being paid therefor the amount agreed upon. These were concurrent and dependent obligations, each being a valid and sufficient consideration for the other. ■
The necessary conclusion from these views renders it unnecessary and unimportant to consider the other questions discussed by counsel upon the argument.
Order affirmed.