contract had been binding, and the plaintiffs were parties thereto, their remedy was at law. So, in another State, sundry persons having subscribed an agreement to pay certain sums respectively for erecting an academy, and the legislature having afterwards incorporated certain trustees of such academy, and, in the act of incorporation, having provided that all moneys subscribed should be received and held by said trustees in trust for the academy, it was held that the corporation could not maintain an action on this agreement against a subscriber thereto, for the money by him subscribed. In the same line of thought it has heen held in New York that, where several parties subscribe for shares of stock in a seminary of learning, signing for such number of shares as each proposes to take and pay for, no implied authority can be inferred warranting any of the parties in contracting debts or advancing moneys on the credit of the other parties. The court reason that the agreement so signed is simply an agreement to take and pay for stock in an association to be incorporated, and does not contemplate the conduct of any enterprise as copartners, nor as members of an unincorporated joint-stock association. Such articles of association do not establish such relations between the subscribers as would authorize the trustee to contract debts or make advances on the credit of the association.3 § 1176. Action against one Member of Building Committee by the other Members. But a promise to pay to a building committee a certain amount of money to build a church, made by one of the committee, may, in Pennsylvania, be enforced by the other members of the committee or their survivors, by an action at law against the promisor. The court refused in such a case to higgle about the question whether the promisor were properly joined as plaintiff, reasoning that his name as plaintiff would be at most surplusage; but that, as no one could be legally bound by a promise to himself, the contract in the case was void in part only, but good for the residue, and the name of the promisor was properly dropped as that of plaintiff—at least it lessened the 1 Strasburg R. Co. v. Etchternact, 21 Pa. St. 220; s. c. 60 Am. Dec. 49. 2 Phillips Academy v. Davis, 11 Mass. 113; 8. c. 6 Am. Dec. 162. 3 * Shibley v. Angle, 37 N. Y. 626. 66 appearance of irregularity. In such case it was regarded as of no consequence that the building committee had finished the edifice and been discharged. Though functus officio as to that, they were still trustees for the recovery of this debt." Nor was it of any importance that another committee had been raised to wait on the delinquent subscriber in reference to his obligation. "Even had the congregation desired to transfer this chose in action to another committee, so as to enable them to sue in their own names, it could not have done so; and the only course was to sue in the names of the surviving members of the original committee."'* § 1177. Acceptance Necessary if Corporation in Existence. If the corporation is in existence at the time when the subscription is made, then, unless the subscription takes the form of a proposal by the corporation and an acceptance by the subscriber, it must necessarily be regarded as a proposal by the subscriber to become a shareholder, so that in order to make a binding contract, the proposal must be accepted by the corporation; and some of the decisions proceed upon this view. Thus, it has been held that a mere subscription to preferred capital stock, made after the organization of the corporation, while it will obligate the company to issue the stock upon the subscriber paying for it and will obligate him to pay for it, it yet does not give him an interest in the company, nor vest in him a title to the stock, until the contract has been executed.1 Another court has reasoned, but upon grounds which the writer has ventured to criticise," that the mere fact of subscribing to the stock of an incorporated company does not constitute the subscriber a stockholder; though it puts it in his power to become a stockholder, if the stock is not all filled up at the time of his subscription, by compelling the corporation to give him the legal evidence of his being a stockholder, namely, the usual stock certificate, upon his complying with the terms of his subscription." § 1178. Manner in which Acceptance Manifested. It is said by a late writer that "although no particular form of acceptance is essential, in order to constitute this proposition to become a shareholder a binding contract, there must be some unequivocal act on the part of the agents having the authority to accept the offer, so that there can be no doubt as to the obligation of the corporation as well as of the subscriber." 1 Very often there will be no formal writing, speech or act of acceptThis will often happen where the corporation is one not having a joint stock, as for instance a religious, educational or other charitable corporation. Here the usual form of acceptance will be the incurring of expense on the faith of the subscription; and this may be shown by parol evidence." ance. § 1179. Distinction between Cases where the Proposition Comes from the Company and where it is Made to the Company. In respect of the time when the contract of subscription is deemed to be complete, a distinction exists between cases where the proposition for the subscription comes from the company to the subscriber, and where it comes from the subscriber to the company. In the former case, a proposition by or on behalf of the company, and an assent thereto by the subscriber, render the contract complete. But where the proposition comes from the subscriber, there must obviously be an assent on the part of the company; otherwise it remains merely unilateral. But in either case it is not doubted that until there is a meeting of the minds of both parties no binding contract exists. § 1180. Revocation of Offer before Acceptance. Where the corporation is in existence at the time of the subscription, the matter seems to stand on the mere footing of a contract 1 1 Mor. Priv. Corp. 2nd ed., § 48. See Parker v. Northern Central, &c., R. Co., 33 Mich. 23; Northern Central &c., R. Co. v. Eslow, 40 Mich. 222. 2 Jones v. Florence, &c. University, 46 Ala. 626. See post, 1206. European, &c., R. Co. v. McLeod, 3 Pugsley, N. B., 331, 340. 4 British &c. Tel. Co. v. Colson, L. R. 6 Exch. 108; Wilkinson v. Anglo- 5 Cook v. Oxley, 3 T. R. 653; Payne v. Cave, 3 T. R. 148; Routledge v. Grant, 4 Bing. 660. between two parties, and obviously the proposal may be withdrawn before acceptance. The same conclusion would logically follow where the subscription is made with a view to the formation of a future corporation, if such an undertaking can be regarded merely as a proposal by the subscriber to the future corporation, which becomes a contract on the acceptance of it by the corporation when it comes into existence.1 Proceeding on this view it has been held, in the case of a corporation formed under the general railroad act of New York, that, since such a corporation is not formed until the articles have been filed in the office of the secretary of state, a subscriber having the articles in his possession may, at any time before such filing, alter and reduce his subscription to any extent he pleases.' § 1181. Whether Presumable in the Case of a Subscription to a Future Corporation. But caution should be exercised in accepting this doctrine in its application to a subscription to the stock of a projected corporation. In such a case, the subscription, in the view of an authoritative court, takes effect upon the filing of the certificate. But the filing of the certificate cannot in any sense be regarded as an act of the corporation accepting the subscription. In fact, it is not the act of the corporation at all. It is the act of the promoters, or co-adventurers. The corporation does not, and cannot, act until its directors and principal officers have been elected; for it can, from its very nature, only act through them. This conveys to the mind the obvious suggestion that we must look beyond the theories of a mere contract for the principles which are to solve this question. The element of estoppel evidently enters into the engagement of the subscriber to the stock of an inchoate corporation, to an essential degree. His promise is something more than a proposal to a possible future company; it is a promise to his co-adventurers; and while it is not such a promise 1 See Mor. Priv. Corp. 2nd ed. § 50: Stuart v. Valley R. Co., 82 Gratt. (Va.) 147; Goff v. Winchester College, 6 Bush (Ky.), 443; Greer v. Chartier's R. Co., 96 Pa. St. 391 s. c. 42; Am. Rep. 548, per Trunkey, J. 518. 2 Burt v. Farrar, 24 Barb. (N. Y.) 3 Phoenix Warehousing Co. v. Bad ger, 67 N. Y. 294. to them as they can accept so as to enforce it by an action against him in their individual names for the promise is not made to them as obligees,—yet, after they became liable on the faith of it, is it not a fraud on them for him to withdraw from it? This, it seems, must be the conclusion, unless we suppose that all the co-adventurers signed with a general understanding that it is a mere proposal until the corporation is in fact formed. But this theory, while undeniably logical, like much of the severe logic of the law, opens the door to unlimited frauds. Wealthy and influential men may head the subscription list with large amounts, thus influencing others to subscribe, and then, the very moment before the articles are filed, cancel or reduce their subscriptions, unknown to the others, thus leaving the victims of their fraud bound while they are free. That the law does not allow this to be done we shall hereafter see.1 We then take the true view to be that the engagement created by a subscription to the stock of a projected corporation is binding, in the absence of fraud inducing it, provided the corporation is formed according to the scheme within a reasonable time; and that the subscriber cannot in the interim, any more than after the corporation is formed, retreat from it without unanimous consent. § 1182. A Case in Illustration. Even where the corporation is in existence at the time, a state of circumstances may exist in which a subscriber will not be allowed to withdraw his name even before his subscription has been delivered to the company, as where others have presumably subscribed on the faith and in pursuance of his subscription. Thus, where the subscriber was himself the agent of a corporation then in existence, to procure subscriptions to its capital stock, and he entered his own name in the subscription book furnished him for that purpose, as a subscriber to a certain number of its shares, and thereafter persuaded others to subscribe, and kept the book for about six months, and then cut his name out before he returned the book to the company, because of a difference respecting the payment for his services, it was held that he was bound as a subscriber. The court reasoned thus: "The Chartiers Railway Company made a continuing offer which became an agreement with each acceptant for the number of shares for which he subscribed. At the time a person signed his 1 Post, §§ 1311, 1151, et seg. |