Hudson Real Estate Co. v. Tower

36 N.E. 680, 161 Mass. 10, 1894 Mass. LEXIS 113
Massachusetts Supreme Judicial Court·Decided March 2, 1894·Published·Cited by 9 cases

Opinion

Allen, J.

It was heretofore decided in this ease, that until the organization of the corporation the defendants’ subscription was a mere proposition or offer which might "be withdrawn, like any other unaccepted offer. 156 Mass. 82. The principal question which the plaintiff now seeks to present is, whether, upon the evidence and under the ruling of the court, the jury were warranted in finding a legal withdrawal or revocation of the subscription.

The only withdrawal or revocation relied on occurred in an interview between one of the defendants and Henry Tower, on August 81st, 1889, and in view of the verdict the only question left is whether a notification of withdrawal given orally to Henry Tower was sufficient.

It will be necessary to state the situation of the parties. The contract declared on is given below.*

The corporation was organized under the laws of Maine. The meeting for the organization was held at Portland, Maine, August 29th, 1889, at which time the articles of agreement, having been signed, were presented, by-laws were adopted, and officers were chosen. The necessary papers were then prepared as required by law, and were ■ approved by the Attorney General of Maine on September 5th, were recorded on September 6th, [12] and were received and filed in the office of the Secretary of the State on September 7th, 1889. It was agreed at the argument that, under the laws of Maine, the legal existence of the corporation as a coi’poration began on September 7th.

On the 31st of August, Henry Tower’s position was as follows. It must be assumed, though the bill of exceptions does not in express terms so state, that he was one of the subscribers. One of the plaintiff’s requests for instructions assumes .that there was a contract of the firm above referred to “ with Henry Tower and others in behalf of the associates for the purchase of land and building a shoe-shop thereon, dated August 19, 1889.” This contract, being thus referred to by the plaintiff as an undisputed fact, must be taken to show that Henry Tower was acting as the person first named on the committee contemplated by the subscription paper, to obtain an agreement in writing binding said firm to take a lease of the premises. On August 29th, at a meeting which apparently was the first formal step in the organization of the corporation, he was chosen president. By the statutes of Maine, which it was agreed we should refer to, the choice of officers is a necessary preliminary to the creation of the corporation. Rev. Sts. of Maine of 1883, c. 48, §§ 17-19.

It is also obvious that on August 31st he was, in the opinion of the jury, acting as an officer in behalf of the associates, and not merely on account of his personal interest as one of the sub- ' scribers. Such is the fair result of the instructions taken as a whole. The judge in the course of his charge called the jury’s attention to this distinction by saying: “If Henry Tower was one of the officers of the associates for the purpose of managing ' their business, it would not be necessary that any other notice ■should be given than what was given to him; but if he went there simply as being interested, not acting as an officer, ... it may be that he was not an officer so that he would be a party authorized to receive any notice of withdrawal, and if he was not, then it would be necessary for that fact to be communicated to the meeting.” It being pointed out to the judge at the close of the charge, that the plaintiff’s records showed that at the meeting on August 29th Henry Tower was chosen president, he further 'instructed the jury, that if he had been so chosen president, and if the defendants notified him distinctly that, if a certain event [13] should happen with reference to the change of the policy of the corporation as to mortgaging its property, they would no longer be in the association and would not pay a cent on their subscription, that would be a sufficient notification of their withdrawal if the event did happen. The undisputed testimony, so far as it is recited or disclosed in the bill of exceptions, goes to show that Henry Tower in that interview was acting in a representative capacity, and not merely on his own personal account. The plaintiff’s requests for instructions raised no question on this point, but asked the court to rule that, “in order to constitute a valid withdrawal, the defendants must do some act or make some unequivocal or unconditional statement to the proper officer or officers of the associates which shall amount to a public withdrawal from said contract.” The instructions were given with reference to this request, and, as we understand them, they amounted to this, that Mr. Tower having been chosen as president, and acting for the associates, was on August 31st a proper officer to be notified by the defendants of their withdrawal.

We think this instruction was right. No instruction was asked at the trial that, in order to withdraw from the associates, notice must be given to all of them individually, or at a meeting of the associates. The plaintiff only contended that the notice must be given to the proper officer or officers; and it would plainly be impracticable to require a direct personal notice to them all. The right to withdraw would be nugatory if this were necessary. A subscriber who has a right to withdraw may not know, or have the means of knowing, who all of his associates are, or where they live. If he does know, they may be many in number, and widely scattered; or some of them may be away on a journey. No general meeting of them may be called which he can attend without leaving the State. He need not wait for a meeting before giving his notice of withdrawal. It was indeed held in an early case in England, that all of the other subscribers must not only have notice, but must actually consent, before one of the subscribers could withdraw. Kidwelly Canal Co. v. Raby, 2 Price, 93. But now, in England as' well as here, no such consent is necessary. If every one of the other subscribers should object, yet it is the right of a subscriber to withdraw before the corporation is formed. It is [14] merely a question of giving due notice of his withdrawal. And in England it is not intimated in any modern case, so far as our examination has gone, that notice must be given to all the other subscribers, or at a meeting of subscribers. The retraction has usually been made to the same persons to whom the application for shares was made. See Lindl. Part. (4th ed.) 99-105 and numerous eases cited.

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Hudson Real Estate Co. v. Tower, 36 N.E. 680, 161 Mass. 10, 1894 Mass. LEXIS 113 (Mass. 1894).

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