Receiving subscriptions is a merely ministerial act and may be performed by a number less than a majority.

If the organization of a corporation is regular upon its face, and the legislature have recognized it as such subsequent to its having gone into operation, it becomes ipso facto a legal corporation.7

8. Questions in regard to the organization, or existence of the corporation, can only be raised ordinarily upon an express plea, either in abatement or in bar, denying its existence.8

9. But all the cases concur in the proposition, that the existence of the corporation, the legality of its charter, and the question of its forfeiture, cannot be inquired into, in any collateral proceeding, as in a suit between the company and its debtors, or others, against whom it has legal claims.9

* 10. The records of the corporation are primâ facie, but not indispensable evidence, of its organization and subsequent proceedings.10 But the authenticity of the books, as the records of the

7 Black River & Utica Railw. v. Barnard, 31 Barb. 258.

* Boston Type and Stereotype Foundry v. Spooner, 5 Vt. 93, and cases cited; Railsback v. Liberty & Abington Turnp. Co., 2 Carter, 656. But some cases seem to require such proof to establish the contract. Stoddard v. The Onondaga Annual Conference, 12 Barb. 573; Heaston v. Cincinnati & F. W. R., 16 Ind. 275. A party who executes his promissory note to a company by its corporate name is estopped to deny its corporate existence. East Pascagoula Hotel Co. v. West, 13 La. Ann. 541. S. P. Black River Railw. v. Clarke, 25 N. Y. 280. But in an action by a corporation upon a judgment, the defendant is estopped to plead that no such corporation exists, even if he propose to prove its dissolution after the date of the judgment. He should plead such matter specially. Perth Amboy Steamboat Co. v. Parker, 2 Phila. 67. But see Anderson v. Kerns Draining Co., 14 Ind. 199.

But

Duke v. Cahawba Nav. Co., 16 Alabama, 372; post, § 242, note 6. in an action against a stockholder for the debt of the company under the statute, the existence and organization of the company must be proved; and judgment against the company is not evidence against the stockholder. Hudson v. Carman, 20 Law Rep. 216; s. c. 41 Me. 84; C. P. & A. Railw. v. City of Erie, 27 Penn. St. 380. See also Eakright v. L. & N. I. Railw., 13 Ind. 404. The subscription to the stock of a corporation estops the subscriber to deny the corporate existence, nor can the subscriber plead in defence of such subscription that other subscribers, by means of secret fraudulent agreements, were promised shares upon terms different from those specified in the agreement, since such fraudulent arrangements are of no validity, and cannot avail the parties on whose behalf they are made. Anderson v. N. & R. Railw., 12 Ind. 376.

10 Ang. & Am. § 513; Grays v. Lynchb. & Salem T. Co., 4 Rand. 578; Buncombe T. Co. v. McCarson, 1 Dev. & Bat. 306; Greenl. Ev. § 492; Rex v. Martin, 2 Camp. 100; Hudson v. Carman, 20 Law Rep. 216; s. c. 41 Me. 84.

corporation, must be shown by the testimony of the proper officer entitled to their custody, or that of some other person cognizant of the fact.11

*11. Questions sometimes arise as to what constitutes membership in a corporation. This has to be determined, in most aggregate corporations, by the just construction and fair import of the charter and by-laws of the body. The usage of the corporation and of other similar bodies will be of controlling force in determining such questions. But the power of maintaining, in some mode, a supply of members of the body, is incident to all corporations, as indispensable to its continued existence.12

All that a corporation is called upon to prove, to establish its existence in a litigation with individuals dealing with it, is its charter and user under it. This constitutes it a corporation de facto, and this is sufficient, in ordinary suits, between the corporation and its debtors. The validity of its corporate existence can only be tested by proceedings in behalf of the people. Mead v. Keeler, 24 Barb. 20. Between the company and strangers, the records of the company will ordinarily be held conclusive against them in regard to such matters as it is their duty to perform, in the manner detailed in the records. Zabriskie v. C. C. & C. Railw., 10 Am. Railw. Times, No. 15, s. c. affirmed, 23 How. 381. Heaston v. Cincinnati, &c. Co., 16 Ind. 275. See upon the general question of proof and presumption of the organization of corporations, Leonardsville Bank v. Willard, 25 N. Y. 574; Belfast and Angelica Plank Road Co. v. Chamberlain, 32 N. Y. 651; Buffalo & Allegany Railw. v. Cary, 26 N. Y. 75. Where the statute under which an incorporation is formed in another state, required, that before the corporation should commence business it should cause its articles of association to be published in a prescribed form, it was held that it might be regarded as sufficiently incorporated for the bringing of an action without the publication; and that the general reputation and notoriety of the fact that such corporation was doing business in that capacity, coupled with the fact that the contract sued upon was made payable to them, was sufficient evidence of the corporate existence. Holmes v. Gilliland, 41 Barb. 568. See Unity Ins. Co. v. Cram. 43 N. H. 636, where the rule of construction is somewhat more strict.

There seems to be no rule of practice better settled than that where the defendant, in a suit brought by a corporation, pleads the general issue, he thereby concedes the right of the plaintiff to sue in his corporate capacity. Orono v. Wedgeworth, 44 Me. 49. The members of a mutual iusurance company cannot dispute the corporate existence in a suit upon the premium notes in favor of a receiver appointed to wind up the concerns of the company. Hyatt v. Whipple, 37 Barb. 595. Misnomer of corporations must be plead in abatement or it

will be regarded as waived. Keech v. Balt. & Wash. Railw., 17 Md. 32. "Highland Turnp. Co. v. McKean, 10 Johns. 154. See Breedlove v. M. &c. Railw. Co., 12 Ind. 114.

12 Hicks v. Launceston, 1 Roll. Ab. 513, 514; s. c. 8 East, 272 in n. See also

12. But in joint-stock business coporations, like banks and railways, and other similar companies, membership is originally constituted by subscription to the shares in the capital stock; and it is subsequently continued by the transfer of such shares, in conformity with the charter and by-laws of the company, and no election by or assent on the part of the corporation is requisite, unless made so by the charter or by-laws.

13. Serious questions often arise in regard to the allotment and acceptance of shares. Courts of equity have sometimes declined to interfere to carry into effect specifically, contracts with the promoters to accept shares in the company when it should be fully organized.13 But we apprehend the rule is generally otherwise, as we have stated elsewhere.14 And one who has made the requisite deposit and also the formal application to the company for an allotment of shares, is still at liberty to withdraw the application at any time before it is accepted or any allotment made.15

*SECTION II.

Acceptance of Charter, or of Modification of it.

§ 19. 1. It is requisite to the binding effect of every legislative charter (or modification of such charter) of a joint-stock company,

2 Kent, Comm. 294. It is not competent for the defendant, in an action in favor of a corporation, to plead that the company has committed acts working a forfeiture of its corporate franchises. That can only be determined by a suit on behalf of the public, brought expressly to try that question. Comm. v. Morris, 1 Phil. 411; Coil v. Pittsburgh Female College, 40 Penn St. 439; Dyer v. Walker & Howard, id. 157. Membership in the corporation is not affected by the certificate of shares containing a promise to pay interest till a certain time. McLaughlan v. D. & M. R. Co., 8 Mich. 100.

13 Oriental I. St. Co. v. Briggs, 2 Johns. & H. 625; s. c. 4 L. Times, N. S. 578. But this case was affirmed by the Lord Chancellor, on the ground that there was no valid or complete contract. 5 L. Times, N. S. 477.

14 Post, § 34, pl. 6.

15 Graham ex parte, 7 Jur. N. S. 981.

This question

that it should be accepted by the corporators.1 more commonly arises, in regard to the modification of a charter, or the granting of a new charter, the company in either case, whether under the old or the new charter, going forward to all appearance much the same as before. In such case, it has usually been regarded as important to show some definite act of at least a majority of the corporation.2

2. The question of acceptance becomes of importance often, where a partnership, or some of its members, obtain an act of incorporation. But ordinarily, in the first instance, the assent of the stockholders, or corporators, is sufficiently indicated by the mere subscription to the stock.

3. Where a statute in relation to a corporation requires acceptance, in a prescribed form, and that is not complied with, the corporation can derive no advantage from the act.3

4. It has been held, that grants beneficial to corporations may be presumed to have been accepted by them, the same as in the case of natural persons.1

*5. And in the majority of instances, perhaps, the acceptance is rather to be inferred from the course of conduct of the company than from any express act.5

6. It may always be proved by oral testimony, as may also the organization of the company, ordinarily.

7. In a recent case in Ohio, where an amendment of the charter of a bank was passed by the legislature giving the bank certain immunities and privileges, upon the assent of all the stockholders in writing, filed with the auditor of state, to become personally responsible for the liability of the company in the manner pre

1 The King v. Pasmore, 3 T. R. 200, 240; Ellis v. Marshall, 2 Mass. 269. This was a charter to certain persons by name, for the purpose of making a street, and subjecting them to assessment for the expense, and it was held not to bind a person named in the act, unless he assented to it.

2 Wilmot, J., in Rex v. Vice Ch. of Cambridge, 3 Bur. 1647; Rex v. Amery, 1 T. R. 575; Falconer v. Campbell, 2 McLean, 195.

3 Green v. Seymour, 3 Sandf. Ch. 285.

Charles River Bridge v. Warren Bridge, 7 Pick. 344; by Parker, Ch. J., and Wilde, J.

5 Bank of U. S. v. Dandridge, 12 Wheat. 64, opinion of Story, J., cited.

and cases

• Coffin v. Collins, 17 Maine, 440; Bank of Manchester v. Allen, 11 Vt. 302; Angell & Ames. Corp. §§ 81-87; Dartmouth College v. Woodward, 4 Wheat. 688; Wilmington & Manchester R. v. Saunders, 3 Jones, 126.

scribed in the act, it was held, that although all the stockholders did dot subscribe the required written declaration, yet if the bank had enjoyed the benefits secured by the amendment, neither those stockholders who did subscribe it, or the bank itself, can deny the acceptance of the amendment, as against the claims of third persons.7

8. And where the constitution of the state is so altered as to prohibit the grant of special acts of incorporation, it was held, that such an act granted before the new constitution took effect, and which had not been accepted by the corporators, could not be accepted, thereafter; as the grant of a charter to those who had not applied for it, until it was accepted, remained a mere offer, and might be withdrawn at the pleasure of the grantors. But where any amendment of the charter of a corporation was fully accepted by the shareholders before the new constitution took effect, it cannot be effected by any of the provisions thereof: and what shall amount to such acceptance is matter of fact, depending upon the construction of the facts proved.9

§ 20: 1. The ordinary powers of a railway company are the same as those pertaining to other joint-stock aggregate corporations, unless restricted by the express provisions of their charter,

7 Owen v. Purdy, 12 Ohio N. S. 73. And a legislative permission to a plank road company to mortgage its corporate property is an amendment which may be accepted by the vote of the majority. And the same is true of all amendments calculated merely to facilitate the attainment of the existing objects and purposes of the corporation. Joy v. Jackson & Michigan Plank Road Co., 11 Mich. 155.

State v. Dawson, 16 Ind. 40.

9 State v. Dawson, 22 Ind. Rep. 272.