Business Men's Association v. Williams
| Decision Date | 11 May 1909 |
| Citation | 119 S.W. 439,137 Mo.App. 575 |
| Parties | BUSINESS MEN'S ASSOCIATION, etc., Respondent, v. WILLIAMS, Appellant |
| Court | Missouri Court of Appeals |
Appeal fro Louisiana Court of Common Pleas.--Hon. David B. Eby Judge.
AFFIRMED.
Judgment affirmed.
Pearson & Pearson for appellant.
The agreement of September 2, 1905, pleaded and introduced in evidence as Exhibit 3, was not a subscription for shares of stock in any corporation, but was simply an informal or preliminary paper of subscription--such as is commonly signed as a part of the enterprise and zeal which gives birth to a corporation; but which the statute fails to recognize among the necessary and prescribed steps to be taken by the incorporators to create a body corporate. It was nothing more than an informal or preliminary statement by the appellant that if the promoters of a corporation, therein proposed to be formed, wanted him as one of its incorporators, and would give him an opportunity, he would sign the articles of incorporation, and subscribe for $ 20.00 worth of stock. Railroad v. Wilkerson, 83 Mo. 240. The corporation contemplated in this preliminary paper of subscription signed by appellant, is a creature of the statute. And, it is only by complying with certain requirements, specifically indicated therein, that appellant might become entitled to the rights, and be subject to the liabilities of a stockholder, in appellee or any other corporation. R. S 1899, secs. 957, 1312, 1313; Railroad v. Wilkerson, 83 Mo. 241; Hotel Co. v. Wright, 73 Mo.App. 244.
Robt. A. May for respondent.
That all of the stock had been subscribed and paid for by the incorporators is entirely foreign to this controversy. As soon as respondent had completed its part of the agreement its right of action became complete. Davis v. Johnson, 49 Mo.App. 240. The incorporators became trustees or agents for the entire body of the subscribers to carry out the object of the subscriptions; and appellant, by the terms of his subscription, gave them full power to act for him, and he cannot now be heard to question their authority. Hotel Co. v. Wright, 73 Mo.App. 240; Swain v. Hill, 30 Mo.App. 443. That appellant never signed or acknowledged the articles of incorporation is no defense, especially is this true because of the fact that he authorized the incorporators to represent him as they might see proper in the formation of the corporation, and they signed the articles for him and as his trustees and agents. Davis v. Johnson, supra; Hotel Co. v. Wright, supra, 243. The claim that appellant's contract of subscription was without consideration is without foundation, for such a contract is supported by a sufficient consideration as soon as the promisee has expended money, or labor on the faith of it. James v. Clough, 25 Mo.App. 147; Swain v. Hill, 30 Mo.App. 436; School District v. Sheily, 138 Mo. 685; Koch v. Lay, 38 Mo. 147; Pitt v. Gentle, 49 Mo. 74; Workman v. Campbell, 46 Mo. 305; Henrich v. Coal Co., 102 Mo.App. 229. The instrument sued on imports a consideration under section 894, Revised Statutes 1899. Trustees v. Hoffman, 95 Mo.App. 488.
This is a suit seeking to enforce the obligation of a stockholder in plaintiff corporation. Plaintiff recovered and the defendant appeals.
It appears that the defendant and a large number of other business men, citizens of the city of Louisiana, Missouri, had associated themselves together into a voluntary association known as the "Business Men's Association." The object and purpose of this voluntary association were to enhance the business interests of the city and induce important concerns to locate therein. This voluntary association received a proposition from the Wells-Fargo Shoe Company to the effect that if the association would procure the ground, erect a suitable building thereon, and donate the same to that company it would open a shoe factory in the city of Louisiana which would employ a considerable number of persons. To effectuate this proposition, the members of the Business Men's Association, set about to procure its incorporation into a company for the purpose of receiving title to the grounds contemplated, erecting the necessary building thereon, and donating the same to the shoe manufacturer mentioned. With this end in view, the defendant executed the following preliminary paper purporting to obligate him to take $ 20 worth of stock in the proposed corporation. A large number of other persons, some of whom were his associates in the voluntary association and others who were not, subscribed likewise to the same end. The subscription paper to which defendant subscribed, is as follows:
About ten days after this subscription was executed, to-wit, September 12, 1905, a meeting of the Business Men's Association (that is, the voluntary association) was held for the purpose of moving toward the incorporation thereof. The defendant did not attend the meeting, however. At the meeting mentioned it was agreed by those present that the incorporation should be effected under the name of "Business Men's Association," the capital stock to be $ 2,500 and twenty-five members of the voluntary association were selected as incorporators thereof. Immediately thereafter, incorporation was had, in pursuance of the plan marked out at the meeting mentioned. Twenty-five members of the association subscribed and acknowledged the articles of association as contemplated by our statutes (R S. 1899, secs. 1312, 1313), and such further proceedings were had as resulted in the incorporation of the plaintiff company in due form of law, in pursuance of the sections referred to, and section 1314, Revised Statutes 1899. As stated, the defendant did not personally attend the preliminary meeting referred to nor did he subscribe to or acknowledge the articles of association. Whatever interests the defendant may have had as a proponent touching the matter of becoming a stockholder in the corporation, were represented in the organization of the company by the thirteen of his associates who were selected and named in the articles as the first board of directors of the incorporated company. After the company was duly incorporated, the defendant paid $ 10 of the amount subscribed by him on the preliminary paper, to the plaintiff's board of directors. He refused to pay the additional $ 10 thereafter for the reason, as alleged by him, that he was not obligated to do so by having signed the articles of association or otherwise brought himself strictly within the terms of the statute pertaining to the organization and incorporation of the company. The defendant insists that the paper he executed amounted to no more than an unauthorized preliminary paper which was not contemplated by the terms of the statute, to be an essential prerequisite to the formation of a manufacturing or business incorporated company. It is argued that unless he subscribed and acknowledged the articles of association mentioned in the statutes (secs. 1312, 1313, 1314) the relation of stockholder and corporation did not arise between him and the plaintiff, and therefore this action may not be maintained thereon. We are cited to, and the rule announced touching the organization of a railroad corporation in Sedalia, etc., Ry. Co. v. Wilkerson, 83 Mo. 235, is invoked to sustain this argument. In the view we have taken of the case, it will be unnecessary to decide whether the rule of that case is controlling here in respect to the organization of a manufacturing or business corporation, under another and distinct statute. It may not be out of place, however, to say that there is a notable distinction in respect of the requirements of the statutes touching the organization of incorporated manufacturing or business companies, as will appear by reference to sections 1312, 1313 and 1314, and the requirements touching the organization of a railroad company, to be found under the provisions of section 1034, Revised Statutes 1899, under which the Wilkerson case was decided. Section 1034, touching the matter of railroad companies, authorizes not less than five persons to form a corporation for the purpose of constructing and operating a railroad. Among other things, that section says: "each subscriber to said articles of association shall subscribe thereto his name, place of residence and the number of shares of stock he agrees to take in said company." After having recited this and several other requirements therein which are not essential to notice here, that statute declares what shall be a corporation thereunder...
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