Court Opinion

ID: 9829702
Source: CourtListenerOpinion
Date Created: 2023-09-01 19:32:33.940284+00
Date Added: 2024-06-11T07:43:04.441965
License: Public Domain

On Motion for Rehearing.
[11-13] In the original opinion we held that there was no evidence in the record tending to show that stock in a corporation, organized under the laws of Texas, would be more desirable or valuable than stock in a corporation organized under the laws of Arizona. In motion for rehearing, appellee has *686called to our attention Ms own testimony from the statement of facts, as follows:
“He (McOowan, the stock salesman) said this was to be a Texas corporation, and we went into details about the Texas corporation laws, about the advantage Texas laws had over other states. I would not have subscribed for stock if I had known that this corporation was to be organized under the laws of Arizona, for the reason I did not know anything about Arizona or Arizona laws, and X believe in incorporating under Texas laws. I do not know anything about Arizona laws. I was informed in reference to Texas laws protecting stockholders. I believed that I was subscribing for stock in a Texas corporation, where the subscribers would be better protected; that it would be incorporated in the state of Texas, because it was to be a home company for Texas and the rights of stockholder could be more carefully protected under the Texas laws.”
We think this evidence brings the case within the rule announced by us in Commonwealth Bonding & Casualty Insurance Co. v. Cator, 175 S. W. 1074 (5, 6). The trial judge was justified in holding that appellee was not estopped and had not ratified the act of the company in procuring its charter under the laws of Arizona.
“Any amendment which entails new responsibilities or hazards will release dissenting subscribers, as by adding to the power of a railroad company the power to purchase steam boats.” 10 Cyc. 406, and note 64.
The articles of incorporation, taken out under the laws of Arizona, provide that the company could not only transact a general casualty and bonding business, as was provided in the subscription contract and the prospectus to which this contract referred, but it further provides that the company may “borrow and loan money and in general do and perform such acts' and things and transact such business not inconsistent with the law of any part of the world as the board of directors may deem to the advantage of the corporation.” A provision as general and broad as the one quoted would not be embodied in the charter of a Texas corporation. Vernon’s Sayles’ Civil Statutes, art. 1121.
The rule is announced in 10 Cyc. 411b, that conditions' prescribed by the Legislature, under which charters of corporations may be granted, must be noticed by the subscribers and that subscribers are conclusively presumed to contract with reference to such conditions. The stipulation that the company would be incorporated under the laws of Texas was, in the light of appel-lee’s testimony, a material part of the subscription contract, and he. cannot be held bound under a contract where the incorporation was perfected under the laws of another state; for to do so would be to hold him to something to which he did not agree, and there would be no meeting of the minds and no contract. 10 Cyc. 412d; Baker v. Ft. Worth Board of Trade, 8 Tex. Civ. App. 560, 28 S. W. 403; Collinson v. Jefferies, 21 Tex. Civ. App. 653, 54 S. W. 28.
[14] In the original opinion we stated that the promise on the part of the company to establish a loan agency in Hemphill county, and to appoint plaintiff as its representative in charge thereof, could not form, in the event of its breach, a basis for rescission. Apxoellee has called to our attention the fact that this agreement was alleged to be part of the consideration upon which he subscribed for stock, and that Ms pleadings allege a failure of tMs consideration; that the agreement was attached to the subscription contract and made a part thereof; that the contract and agreement were dated prior to the incorporation of the company but were not mailed until after the company was incorporated on March 25, 1911'; that Ms stock was issued June 20, 1911. We must therefore presume that the contract of subscription was accepted after the corporation-became a going concern, and the company will not be permitted to accept the benefits of the contract without at the same time assuming its burdens. It cannot hold appellee upon the subscription contract without complying with the condition requiring it to appoint him its agent in Hemphill county. The record shows that tMs was a condition precedent, by which the company was bound when they accepted the subscription.
Appellee’s motion for rehearing is granted; the motion of R. T. Stuart for rehearing is overruled. The judgment of the lower court is in all tMngs affirmed.