Court Opinion

ID: 8510214
Source: CourtListenerOpinion
Date Created: 2022-11-23 08:36:51.172305+00
Date Added: 2024-06-11T16:51:04.157512
License: Public Domain

By Judge Henry—
I dissent from this judgment. Not a single step in the career of this corporation was legally taken after the filing of its articles of incorporation. Its first stockholders meetings for the election of directors was illegally convened, and both Kerr and Fuller, who are the only subscribers to the capital stock that are before the court, for the purpose of a decree against them, are said to- be estopped by their subscription to deny the validity of that meeting, though neither was present. So again, the business transacted and the general power given to Mills to contract the debts which are here in issue, at the first meeting of the directors was unauthorized to their knowledge, for the stockholders had not all paid one-half of their subscription, as required by law as a prerequisite to the beginning of business by corporations of this character.
But Kerr and Fuller are again said to be estopped by their subscription to deny the validity of this meeting.
The conclusion of the court seems to me to be possible only by piling estoppel upon estoppel in a manner that equity does not permit, for it is a well known maxim of equity jurisprudence that an estoppel upon an estoppel can not be sustained
I do not think a debt contracted by de facto directors of a de facto corporation, elected at a de facto meeting can be enforced in a proceeding of this kind.