Court Opinion

ID: 8260518
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:53:31.006894+00
Date Added: 2024-06-11T16:43:10.146840
License: Public Domain

Biggs, J.
(concurring). — It is held in the opinion that the signing of a subscription list, without explanation, is sufficient to make the signer a member of a proposed joint-stock company. This ruling is against all of the decisions; at least I have been unable to find any case supporting it. All of the cases hold that an agreement merely to take stock in a proposed joint-stock company is executory, and is not sufficient within *253itself to constitute a contract of membership. Something else must be done indicating an intention to become a member, such as signing articles of association, attending meetings for the organization of the company, paying assessments, or serving as trustee or director. "Membership in such a company, like membership in an ordinary partnership, can only result from an express agreement. It cannot result from the signing of a subscription paper, because 'that would only be the- expression of an intention to become a member.
In the case of Taft v. Warde, 111 Mass. 518, it appeared that the articles of association provided that no one but a stockholder should be a trustee. It was also in evidence that the defendant was elected a trustee, attended meetings, took part in the deliberations of the trustees, told parties that he had subscribed for stock for his firm, and had paid assessments thereon. It was held by the court that the evidence was sufficient to justify a reasonable inference that the defendant had subscribed for stock, and was entitled to share in the profits of the business.
In the case of Frost v. Walker, 60 Me. 468, it was in evidence that the defendants signed a subscription paper, and that they afterwards paid assessments on the precise number of shares set against their names. The court ruled that, the defendants, by thus contributing to the working capital of the company, were entitled to share in the profits of the business, and that this, by operation of law, made them partners.
The English court of common pleas, in the case of Perring v. Hone, 4 Bing. 28, decided that the defendant, who had only subscribed for shares but had not signed the deed or articles of association, was a member of the joint-stock company, upon the ground that he had assented to the deed by attempting to sell his interest.
*254The supreme court of Massachusetts, in the case of Bodwell v. Eastman, 106 Mass. 525, decided that the signing of the articles of association created the co-partnership relation.
In the case of Pettis v. Atkins, 60 Ill. 454, all of the defendants, except one Chapin, signed the articles of association. Most of them attended meetings, some of them were elected officers, and the names of the officers were published. Chapin attended the primary meetings, paid assessments on stock, and was elected a director. Under this condition of the _ proof, the •defendants were held to be members of the company, and liable as partners for its debts.
In Wells v. Gates, 18 Barb. 554, all of the parities •sought to be charged signed articles of association for the purpose of establishing a newspaper. Held, that the signing of the articles constituted the signers partners.
In the case of Strasburg v. Echternacht, 21 Pa. St. 220, the defendant signed a subscription paper agreeing to subscribe for a certain number of shares of the capital •stock of a railroad company, to be thereafter formed. Held, that the paper signed was not a contract, but a mere expression of the subscriber’s intention.
The same court, in the case of Rice v. Shuman, 43 Pa. St. 37, held that, when A permits B to buy stock on their joint account in anticipation of forming a partnership, and A immediately afterwards repudiated the agreement to become a partner, the latter was not entitled to any of the profits of the venture.
In Dennis v. Kennedy, 19 Barb. 517, it was held that the signing of articles of association was sufficient to constitute the signer a menfber of a joint-stock •company.
The supreme court of New York, in Townsend v. Goewey, 19 Wend. 424, decided that, where a joint-*255stock company is formed, and the articles of association •contain an agreement by the signers to pay the amount of their several subscriptions on calls to be made by the trustees, such trustees may maintain an action at law to enforce such promise.
In Phipps v. Jones, 20 Pa. St. 260, the court decided that a subscription for the benefit of a proposed association for the building of a church was a mere proposal, and was revocable until the association was formed.
In the case of Edinboro’ Academy v. Robinson, 37 Pa. St. 210, the subscription paper provided fof an organization for certain purposes, whenever a certain amount was subscribed. The court held that the subscription paper was in effect articles of association, and that, so soon as the requisite amount was subscribed, the subscribers, without further action, became an association of persons.
The supreme court of Pennsylvania, in Hedges & Horn’s Appeal, 63 Pa. St. 273, which is cited in the opinion, adopts the same line of argument, and decides that, until the subscribers meet and enter upon their project, the relation of partnership does not exist.
' I do not consider the question under discussion of much importance in this state, in view of the great facility afforded by our statute for forming corporations, which has practically done away with joint-stock companies. But the conclusion of my associates is so much opposed to the precedents, as I read and understand them, that I deem it proper to give my views in a separate opinion.