Court Opinion

ID: 9830995
Source: CourtListenerOpinion
Date Created: 2023-09-01 20:41:08.855431+00
Date Added: 2024-06-11T07:43:29.123564
License: Public Domain

On Motion for Rehearing.
The appellee contends in this case there is no evidence justifying us in finding that appellee made no application to borrow money from appellant corporation. True he testifies he made a formal application to borrow from Ben B1. Allen when Allen took his note. At that time the corporation was not in existence. Its charter had not even been applied for, and his own evidence shows he made no application for a loan after it was incorporated and when it could act as a corporation. The certificate of stock which appellant claims to have tendered was issued long before there was any company in existence, and until it was in ex*940istence we do not see how appellant could have issued to him stock therein.
The fact that the corporation was not ‘organized as first agreed to among the subscribers, was a matter of which appellee could take advantage before his subscription was accepted and acted on by the corporation, but we think on the ground of public interest, he will not now be permitted to defeat his obligation as a subscriber. Especially is this trufe if he has so participated and to such an extent as will constitute a waiver 'of the terms of the subscription contract. He may or he may not be estopped, according as the facts shall develop; but he and his associates, on the face of the record, have induced the state by their subscriptions, represented as bona fide, to grant to the corporation existence and certain franchises, and for aught that appears from this record, may have induced third parties to deal with the corporation as such, or to lend it money and take its obligation upon the faith of the subscription by its stockholders. It would manifestly be unjust to permit stockholders to recover the money paid and to defeat their subscription, when, by their acts, they have brought into .existence the corporation, not only to third parties, but also to their associate subscribers. Cook on Corporations, §§ 88, 183 to 180.
Appellee testifies the promoters promised that the corporation, when organized, would lend him money if he subscribed for stock. If the stockholders do not pay their subscriptions, where did appellee expect it to get the money? It certainly would not fall like manna from heaven. The note and the deed of trust may be merely to secure appel-lee’s subscription and not a payment for stock. We declined to discuss this question in the original opinion because not fully developed in the trial court.
We see no reason for changing our views in this case as heretofore expressed, and the motion will be overruled.