which makes no mention of the conditions upon which the subscription was made,' payment of the whole of the subscription, acting as judge of an election held by the corporation, serving as a director of the company, or as president," in conjunction with silence respecting the conditions upon which subscriptions were made, is considered to be a waiver of the 'company's performance. The fact, however, that notwithstanding the terms of the contract, the subscriber paid the full price for part of the stock, does not establish his liability to pay in like manner for the rest, and is not evidence of an agreement on his part to pay without call. Under an Ohio statute permitting a change of location by a railroad company on consent of the stockholders, provided that "any subscription of stock made on the faith of the location of such railroad, upon any line abandoned by such change, shall be cancelled at the written request of the subscriber not having assented," it is held that a subscriber who expressly stipulates against a change, does not waive his right to enforce that condition by failing to make the request.' Laches will bar the remedy by injunction to restrain a change of route.

ton &c. R. Co. v. Boestler, 15 Iowa, 555. Cf. Hanover Junction &c. R. Co. v. Haldeman, 82 Pa. St. 36.

1 Slipher v. Earhart, 83 Ind. 173; Evansville &c. R. Co. v. Dunn, 17 Ind. 603; O'Donald v. Evansville &c. R. Co., 14 Ind. 259; Chamberlain v. Painesville &c. R. Co., 15 Ohio St. 225. Cf. Woonsocket Union R. Co. v. Sherman, 8 R. I. 564. But see Taylor v. Fletcher, 15 Ind. 80, and Parker v. Thomas, 19 Ind. 213, where the notes were fraudulently obtained.

5 Dayton &c. R. Co. v. Hatch, 1 Disney, 84.

6 Grosse Isle Hotel Co. v. l'Anson, 43 N. J. L. 442. So generally partial payments made without knowing that the condition has not been performed, or in reliance upon false assurances of officers of the company that it has been performed, are not to be deemed a waiver of the condition. Pittsburgh &c. R. Co. v. Stewart, 41 Pa. St. 54; Jewett v. Lawrenceburgh &c. R. Co., 10 Ind. 539; Morris &c. Co. v. Nathan, 2 Hall,

2 Parks v. Evansville &c. R. Co., 239; Somerset &c. R. Co. v. Cushing, 23 Ind. 567.

45 Me. 524; Oldtown &c. R. Co. v.

3 Pittsburgh &c. R. Co. v. Proudfit, Veazie, 39 Me. 571; Ridgefield &c. 2 Pittsb. 85.

Lane v. Brainerd, 30 Conn. 565. But election to office without entering upon the duties thereof does not operate as a waiver. Ridgefield &c. R. Co. v. Reynolds, 46 Conn. 375.

R. Co. v. Brush, 43 Conn. 86.

7 Railway Co. v. Fisher, 39 Ohio St. 330.

8 Chapman v. Mad River &c. R. Co., 6 Ohio St. 119.

§ 543. Fraudulent agreements. Agreements between prospective subscribers to the proposed stock of a corporation, which are fraudulent in their nature, can not be enforced. Thus an agreement that the subscription shall merely be nominal for the purpose of inducing others to subscribe is invalid.' And a secret agreement entered into between the directors of a corporation and a subscriber for shares in its capital stock, that he may within a specified time reduce the number of shares thus subscribed for, the subscription being held out as bona fide for the full amount, in order to induce others to become subscribers, is void, as a fraud upon the other subscribers; and the original subscription may be enforced for its full amount between the corporation and the subscriber. It may be laid down generally, that a party may be concluded from denying his own acts or admissions, which were expressly designed to influence the conduct of another, and did so influence it; and when his denial will operate to the injury of the latter. So also agreements that the subscription shall be merely a pledge of stock by the corporation to the subscriber, or that the subscriber shall not be liable for the par

1 Mann v. Cooke, 20 Conn. 178; Galena & S. W. R. Co. v. Ennor, 116 Ill. 55; s. c. 12 Am. & Eng. Corp. Cas. 88; Peychaud v. Hood, 23 La. Ann. 732; Wetherbee v. Baker, 35 N. J. Eq. 501; Phoenix Warehousing Co. v. Badger, 6 Hun, 293; Robinson v. Pittsburgh & C. R. Co., 32 Pa. St. 334; Graff v. Pittsburgh & S. R. Co., 31 Pa. St. 489; Centre & K. Turnpike Co. v. McConaby, 16 Serg. & R. 140; "Subscriptions to the Capital Stock of Corporations,” by James M. Kerr, (1889) 6 Ry. & Corp. L. J. 422. A person sued for installments due on his subscription will not be allowed to defeat a recovery by showing that he attached a secret oral condition to the delivery of his subscription to the promoter. Minneapolis Threshing Machine Co. v. Davis, (1889) 40 Minn. 110; s. c. 12 Am. St. Rep. 701; Connecticut & P. Rivers R. Co. v. Bai

ley, 24 Vt. 465; Downie v. White, 12 Wis. 176; Davidson's Case, 3 De G. & S. 21. See Litchfield Bank v. Church, 29 Conn. 137; New Albany & S. R. Co. v. Slaughter, 10 Ind. 218; Chouteau Ins. Co. v. Floyd, 74 Mo. 286; Bates v. Lewis, 3 Ohio St. 459; Blodgett v. Morrill, 20 Vt. 509; Minor v. Mechanics' Bank, 1 Peters, 46; Preston v. Grand Collier Dock Co., 11 Sim. 327; s. c. 2 Eng. R. & Canal Cas. 335; Mangles v. Grand Collier Dock Co., 10 Sim. 519; s. c. 2 Eng. R. & Canal Cas. 360; Bridger's Case, L. R. 9 Eq. 74.

2 White Mountains R. Co. v. Eastman, 34 N. H. 124, quoted in Jewett v. Valley Ry. Co., 34 Ohio, 601, 609. Cf. Field on Corporations, § 90.

3 Hall v. Selma & T. R. Cc., (1844) 6 Ala. 741, 745, per Collier, C. J., citing Tipton v. Selma & T. R. Co., 5 Ala. 787.

4 Melvin v. Lamar Ins. Co., 80 Ill.

value of his stock, or that the subscriber shall be released, or that the stock may be surrendered, are invalid. Thus, if one subscribe for the capital stock of a corporation under a parol promise by the agent who procures the subscription that the subscriber shall not be called upon to pay for the stock or respond to any assessment, he is nevertheless bound. And again, an agreement entered into between prospective subscribers to the capital stock of a corporation, that they alone shall take the stock in the company when organized, is a contract which can not be enforced.*

§ 544. Irregular subscriptions - Variation from statutory form. The intention to subscribe is a question of fact for the jury. When the statute does not prescribe a fixed mode of making a subscription to the capital stock of a corporation, any contract of subscription, which is good at common law, is valid under the statute. The courts look to the intention of the contracting parties rather than to the manner in which that intention is manifested. If the manner of

446; White Mountains R. Co. v. Eastman, 34 N. H. 124.

1 Union Mut. Life Ins. Co. v. Frear Stone Manuf. Co., 97 Ill. 397; Custar v. Titusville Gas & Water Co., 63 Pa. St. 381; Upton v. Tribilcock, 91 U. S. 45.

2 Gill v. Baliss, 72 Mo. 424; Melvin v. Lamar Ins. Co., 80 Ill. 446; White Mountains R. Co. v. Eastman, 34 N. H. 124; "Subscriptions to the Capital Stock of Corporations," by James M. Kerr, (1889) 6 Ry. & Corp. L. J. 422.

B. H. & E. Mach. Co., 12 Allen, 273;
Sewall v. Eastern R. Co., 19 Cush.
5; Carlisle v. Saginaw Valley & St.
L. R. Co., 27 Mich. 315; Dayton W.
B. & X. Turnpike Co. v. Coy, 13
Ohio St. 84; Strasburg R. Co. v.
Echternacht, 21 Pa. St. 220; Pitts-
burgh & S. R. Co. v. Gazzam, 32 Pa.
St. 340; Charlotte & S. C. R. Co. v.
Blakely, 3 Strobh. 245; Wallingford
Manuf. Co. v. Fox, 12 Vt. 304.

Philadelphia &c. R. Co. v. Cowell, 28 Pa. St. 329; s. c. 70 Am. De, 128; Galveston &c. Co. v. Bolton, 46

3. Chouteau Ins. Co. v. Floyd, 74 Texas, 633. Mo. 286.

4 Lake Ontario Shore R. Co. v. Curtiss, 80 N. Y. 219; Poughkeepsie & S. P. Plank Road Co. v. Griffin, 24 N. Y. 150; California Sugar Manuf. Co. v. Schafer, 57 Cal. 396; Stowe v. Flagg, 72 Ill. 397; Chase v. Sycamore & C. R. Co., 38 Ill. 215; Mt. Sterling Coalroad Co. v. Little, 14 Bush, 429; Goff v. Winchester College, 6 Bush, 443; Perkins v. Union

6 Buffalo & Jamestown R. Co. v. Gifford, 87 N. Y. 294.

7 Dutchess &c. R. Co. v. Mabbett, 58 N. Y. 379; Boston &c. R. Co. v. Wellington, 113 Mass. 79; Fry v. Lexington &c. R. Co., 2 Met. (Ky.) 314; Mexican Gulf &c. R. Co. v. Viavant, 6 Rob. (La.) 305; Oler v. Baltimore &c. R. Co., 41 Md. 583; Wellersburg &c. Co. v. Young, 12 Md. 476; Oakes v. Turquand, L. R. 2 H. L. 325.

making subscriptions is prescribed by the charter or general incorporating act, every material mandatory provision thereof must be substantially complied with, to effect a complete contract binding upon the parties. But all that is required is a substantial bona fide compliance with the statute.' Where the paper as a whole clearly indicates what was the intention of the parties, many irregularities and defects are held to be immaterial, and the contract will not be rendered void by reason of these slight departures from the statutory form. For example, subscriptions upon separate sheets of paper, or in private memorandum books, instead of in the book which the statute provides for, have been held to be valid and binding.'

Where duplicate sets of articles are used for the purpose of obtaining subscriptions, and only one set is properly filed in the office of the Secretary of State, the subscribers to the paper not so filed, do not become members of the corporation, and are not liable on their subscriptions. Where the statute requires the termini of railways to be stated in the articles of association, the incorrect designation of them will not vitiate the contract, provided the road be otherwise sufficiently described. It is essential that an irregularly made subscription be accepted by the company.

3

§ 545. Waiver of irregularities. While a subscription should be in writing and in accordance with the statutory form, if one be prescribed, there are nevertheless many cases in which the liabilities incident to a regularly made subscription have been imposed by implication of law. Thus serving as a director of a company is an implied subscription for the necessary qualification shares. So, too, accepting and holding certificates of stock, and selling or transferring the shares,

5

1 Erie & N. Y. City R. Co. v. Owen, Div. 1; Portal v. Emmens, 1 C. P. 32 Barb. 616.

2 Cayuga &c. R. Co. v. Kyle, 64 N. Y. 185; Boston &c. R. Co. v. Wellington, 113 Mass. 79; Burlington &c. R. Co. v. Palmer, 42 Iowa, 222.

3 Parker v. Northern &c. R. Co., 33 Mich. 23.

4 Philadelphia &c. R. Co. v. Cowell, 28 Pa. St. 329; s. c. 70 Am. Dec. 128; Wheeler v. Millar, 90 N. Y. 353; Phoenix &c. Co. v. Badger, 67 N. Y. 294; s. c. 6 Hun, 293; Dorris v. French, 4 Hun, 292; Hamilton &c. Co. v. Rice, 7 Barb. 159; Kansas City Hotel Co. v. Hunt, 57 Mo. 126; Upton v. Tribilcock, 91 U. S. 45; Sanger v. Upton, 91 U. S. 56; Cheltenham &c. Ry. Co. v. Daniell, 2 Q. B. 781; Cromford &c. Ry. Co. v. Lacey, 3 Younge & J. 80.

In re Englefield Colliery Co., 8 Ch. Div. 388; De Ruvigne's Case, 5 Ch. Div. 306, 322; Pearson's Case, 5 Ch. Div. 356; McCoy's Case, 2 Ch.

Div. 201, 664; Hay's Case, L. R. 10 Ch. 393; Luke's Case, L. R. 6 Ch. 469. The mere publication, however, of a person's name as one of a board of directors, without his assent and without his participating in the management of the affairs of the corporation, does not estop him to deny that he is a shareholder in an action against him by creditors of the corporation. Hume v. Commercial Bank, 9 Lea, 728.

6 Hamilton &c. Co. v. Rice, 7 Barb. 157; Lane v. Brainard, 30 Conn. 565; Upton v. Tribilcock, 91 U. S. 45; In re South Mountain &c. R. Co., 7 Sawy. 30; McLoughlin v. Detroit &c. R. Co., 8 Mich. 100; InterMountain &c. Co. v. Jack, 5 Mont. 568.

Cf. Clarke v. Continental &c. Co., 57 Ind. 135, 138.

7 Everhart v. Westchester &c. R. Co., 28 Pa. St. 339, where no cash deposit had been made.