McComb v. Credit Mobilier

15 F. Cas. 1295, 5 Reporter, 390, 24 Int. Rev. Rec. 223, 13 Phila. 468, 1878 U.S. App. LEXIS 1923

• Court: U.S. Circuit Court for the District of Eastern Pennsylvania
• Decided: January 8, 1878
• Status: Published

Opinion

MeKENNAN, Circuit Judge.

The Credit Mobiiier of America is a corporation established by the laws of the state of Pennsylvania, and its officers, who represented it in the transaction upon which the complainant founds his title to relief, appear to have been authorized to receive subscriptions to its capital stock, and to issue such stock to subscribers on payment of its par value in cash, and they may have had incidental authority to allow a reasonable time for such payment. But they had no power to give an indefinite extension of credit, and the complainant could not by any arrangement or combination with them obtain it. Dealing with the ministerial officers of a corporation touching a subject over which they had only such control as was clearly conceded to them, it was iiis duty to inquire into the source and extent of their authority, and he is, therefore, chargeable with knowledge of its limitations, and of the necessary conditions under which -they could bind their constituent. Upon the admitted facts in the case, there was no payment or authorized waiver of payment of the -stock for which the complainant seeks to make the defendants accountable. He did ■mot, therefore, acquire any title to the stock. This view of the case renders it unnecessary to consider whether the complainant’s inaction, or imputed acts of disclaimer on his part, or his alleged assent to other dispositions of the stock, may have induced or sanctioned the issue of the stock of the whole capital to other persons, so that it would be against equity to sustain his present contention. Irrespective of these considerations, the court is of opinion that he is not entitled to relief, and his bill is therefore dismissed with costs..