The opinion of the court was delivered by
Bennett, J.
It is-claimed by the defendant, that the note now in controversy is without consideration. The defendant and others had signed an instrument, by which the subscribers agreed to take, and did take, the number of shares of the capital stock of the company, affixed to their respective names; and this defendant sub[34]*34scribed for fifty shares of the stock. The note in suit was given for the first five dollars payable on each respective share, which, by the terms of the charter of incorporation, was to be paid to the commissioners at the time of the subscription. This, it is said, cannot constitute a sufficient consideration to sustain the note; but we think otherwise.
By the terms of the charter each subscriber becomes a stockholder and a member of the company; and the interest thereby acquired is a sufficient consideration to support an action for the amount subscribed, against the person subscribing, upon an express promise to pay the subscription. See Wordsworth on Joint Stock Companies, 317; 39 Law Lib. 85. Worcester Turnp. Co. v. Wilson, 5 Mass. 80. Goshen Turnp. Co. v. Hurtin, 9 Johns. 217, Dutchess Cotton Manf. Co. v. Davis, 14 Johns. 238. Baltimore Turnp. Co. v. Barnes, 6 Har. & Johns. 57. The defendant, having given his note for the first instalment to be paid upon his shares, cannot stand in any more favorable light, than if the action had been upon a subscription containing an express promise to pay the amount subscribed, as the same should be assessed. Though the corporation was not in point of fact organized at the time, when this defendant subscribed for his stock, yet his concurrence in obtaining and accepting the charter of incorporation, and thereby becoming himself a member of the corporation, raises a mutuality in his contract, and gives efficiency to his subscription.
We do not think, that the simple fact, that the commissioners accepted the note of the defendant in lieu of so much money, or, as the case finds, in settlement of the sum which was to have been paid upon the making of the subscription, can have the effect to give the defendant the right to repudiate • his contract, or render it void for want of consideration. The corporation, having accepted this note as so much cash, could not certainly deny to the defendant the rights and privileges of a corporator.
The act does not, as in the case of bank charters, require the first instalment to be paid in specie; and no good reason is perceived, why it should. If it is paid in money’s worth, every valuable purpose of a payment is answered; and we see no objection to the commissioners regarding the defendant’s note as money’s worth, if they saw fit. There is no pretence, that the public have in interest [35]*35in this subject, as in the ease of monied corporations, which needs protection, and which might lead the court to require a strict performance of the provisions of the charter. There is no pretence, that this note was taken in bad faith, or to the injury of any of the corporators. It is quite another question, whether the corporation might have declined to have received this note of the commissioners, and required of them to have advanced the money, if they had thought proper. But we are not called on to pass upon any such question. Neither are we required to determine, what would have been the rights of the defendant, as a corporator, if the corporation had declined to receive the note from the commissioners; but, having received it, the defendant must be entitled to all the rights he would have had, if he had paid the money upon subscribing; and, upon the principle of mutuality, the note must be held valid in the hands of the corporation.
In the case of The Union Turnp. Co. v. Jenkins, 1 Caine 381, the act of incorporation required the payment of ten dollars on a share at the time of subscription. The defendant subscribed for two hundred and eighty shares, but paid nothing0; neither was any thing demanded by the commissioners. It was in that case urged, that, as the first instalment of ten dollars was not paid, the contract was incomplete, and not obligatory upon the company, and consequently not binding upon the defendant. But the supreme court held, that this did not affect the validity of the subscription. Though the Court of Errors reversed that decision, (see 1 Caine’s Cases in Error, 86,) it may well be questioned, which is the better opinion. But in the case now before us, not only was the jive dollars on a share demanded by the commissioners at the time of subscription, but it was in fact paid to them in the defendant’s note, which the case finds was received in settlement of the first instalment payable on the shares subscribed for. If the present note is not valid, the whole subscription- is void, and neither party acquired any rights by-means of it. This, we thinkj can hardly be contended for.
The more important question would seem to be, can the present plaintiffs maintain an action on this note 1 It is said, the corporation was not in esse at the time of making the promise. If this be so, it would be difficult to get over the objection. But the first section of the plaintiffs’ act of incorporation declares in express terms, [36]*36that such persons, as shall thereafter become stockholders of said company, are constituted a body corporate, &c. Though it is necessary, that every corporation should have corporators, yet we find by the fourth section of the act, that every subscriber for stock becomes per se a corporator; and by the subscription paper, which is made a part of the case, it appears, that there were several subscribers for stock prior to the defendant’s becoming one. Each subscriber for stock per se becomes a member of the corporation, and all, as fast as they subscribe, become corporators, under the provisions of the act. To justify an organization of the corporation, c.ertain things are made necessary; but in the eye of the law this corporation should be regarded in esse before they have the right to organize. It is the statute, which creates the subscribers for stock a corporation, and not their organizing under it. It is usual, in acts of incorporation, to designate the names of certain individuals as corporators ; but that was not done in this instance. As the act incorporates all, that shall thereafter become stockholders, it may be taken, for the purpose of giving vitality to the charter of incorporation, that the defendant, as well as other subscribers for stock, became such on the day the act of incorporation passed, although in point of fact they did not subscribe until some time subsequent. See Chester Glass Co. v. Dewey, 16 Mass. 94. If this be not so, the charter must, at all events, have vitality from the time individuals became stockholders in'point of fact, by an actual subscription; and this is sufficient for present purposes.
The note contains a promise, “ to pay the commissioners of the Vermont Central Rail Road Company,” two hundred and fifty dollars. It is claimed, that this is a promise to pay the individuals, W.ho were appointed the commissioners for receiving subscriptions for the company, and not a promise to the corporation, and that such individuals alone have the right of action.
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The opinion of the court was delivered by
Bennett, J.
It is-claimed by the defendant, that the note now in controversy is without consideration. The defendant and others had signed an instrument, by which the subscribers agreed to take, and did take, the number of shares of the capital stock of the company, affixed to their respective names; and this defendant sub[34]*34scribed for fifty shares of the stock. The note in suit was given for the first five dollars payable on each respective share, which, by the terms of the charter of incorporation, was to be paid to the commissioners at the time of the subscription. This, it is said, cannot constitute a sufficient consideration to sustain the note; but we think otherwise.
By the terms of the charter each subscriber becomes a stockholder and a member of the company; and the interest thereby acquired is a sufficient consideration to support an action for the amount subscribed, against the person subscribing, upon an express promise to pay the subscription. See Wordsworth on Joint Stock Companies, 317; 39 Law Lib. 85. Worcester Turnp. Co. v. Wilson, 5 Mass. 80. Goshen Turnp. Co. v. Hurtin, 9 Johns. 217, Dutchess Cotton Manf. Co. v. Davis, 14 Johns. 238. Baltimore Turnp. Co. v. Barnes, 6 Har. & Johns. 57. The defendant, having given his note for the first instalment to be paid upon his shares, cannot stand in any more favorable light, than if the action had been upon a subscription containing an express promise to pay the amount subscribed, as the same should be assessed. Though the corporation was not in point of fact organized at the time, when this defendant subscribed for his stock, yet his concurrence in obtaining and accepting the charter of incorporation, and thereby becoming himself a member of the corporation, raises a mutuality in his contract, and gives efficiency to his subscription.
We do not think, that the simple fact, that the commissioners accepted the note of the defendant in lieu of so much money, or, as the case finds, in settlement of the sum which was to have been paid upon the making of the subscription, can have the effect to give the defendant the right to repudiate • his contract, or render it void for want of consideration. The corporation, having accepted this note as so much cash, could not certainly deny to the defendant the rights and privileges of a corporator.
The act does not, as in the case of bank charters, require the first instalment to be paid in specie; and no good reason is perceived, why it should. If it is paid in money’s worth, every valuable purpose of a payment is answered; and we see no objection to the commissioners regarding the defendant’s note as money’s worth, if they saw fit. There is no pretence, that the public have in interest [35]*35in this subject, as in the ease of monied corporations, which needs protection, and which might lead the court to require a strict performance of the provisions of the charter. There is no pretence, that this note was taken in bad faith, or to the injury of any of the corporators. It is quite another question, whether the corporation might have declined to have received this note of the commissioners, and required of them to have advanced the money, if they had thought proper. But we are not called on to pass upon any such question. Neither are we required to determine, what would have been the rights of the defendant, as a corporator, if the corporation had declined to receive the note from the commissioners; but, having received it, the defendant must be entitled to all the rights he would have had, if he had paid the money upon subscribing; and, upon the principle of mutuality, the note must be held valid in the hands of the corporation.
In the case of The Union Turnp. Co. v. Jenkins, 1 Caine 381, the act of incorporation required the payment of ten dollars on a share at the time of subscription. The defendant subscribed for two hundred and eighty shares, but paid nothing0; neither was any thing demanded by the commissioners. It was in that case urged, that, as the first instalment of ten dollars was not paid, the contract was incomplete, and not obligatory upon the company, and consequently not binding upon the defendant. But the supreme court held, that this did not affect the validity of the subscription. Though the Court of Errors reversed that decision, (see 1 Caine’s Cases in Error, 86,) it may well be questioned, which is the better opinion. But in the case now before us, not only was the jive dollars on a share demanded by the commissioners at the time of subscription, but it was in fact paid to them in the defendant’s note, which the case finds was received in settlement of the first instalment payable on the shares subscribed for. If the present note is not valid, the whole subscription- is void, and neither party acquired any rights by-means of it. This, we thinkj can hardly be contended for.
The more important question would seem to be, can the present plaintiffs maintain an action on this note 1 It is said, the corporation was not in esse at the time of making the promise. If this be so, it would be difficult to get over the objection. But the first section of the plaintiffs’ act of incorporation declares in express terms, [36]*36that such persons, as shall thereafter become stockholders of said company, are constituted a body corporate, &c. Though it is necessary, that every corporation should have corporators, yet we find by the fourth section of the act, that every subscriber for stock becomes per se a corporator; and by the subscription paper, which is made a part of the case, it appears, that there were several subscribers for stock prior to the defendant’s becoming one. Each subscriber for stock per se becomes a member of the corporation, and all, as fast as they subscribe, become corporators, under the provisions of the act. To justify an organization of the corporation, c.ertain things are made necessary; but in the eye of the law this corporation should be regarded in esse before they have the right to organize. It is the statute, which creates the subscribers for stock a corporation, and not their organizing under it. It is usual, in acts of incorporation, to designate the names of certain individuals as corporators ; but that was not done in this instance. As the act incorporates all, that shall thereafter become stockholders, it may be taken, for the purpose of giving vitality to the charter of incorporation, that the defendant, as well as other subscribers for stock, became such on the day the act of incorporation passed, although in point of fact they did not subscribe until some time subsequent. See Chester Glass Co. v. Dewey, 16 Mass. 94. If this be not so, the charter must, at all events, have vitality from the time individuals became stockholders in'point of fact, by an actual subscription; and this is sufficient for present purposes.
The note contains a promise, “ to pay the commissioners of the Vermont Central Rail Road Company,” two hundred and fifty dollars. It is claimed, that this is a promise to pay the individuals, W.ho were appointed the commissioners for receiving subscriptions for the company, and not a promise to the corporation, and that such individuals alone have the right of action. Although it may be true, that, as to bills of exchange, the person named as payee has the right of action, and not the person- who has the beneficial interest, and that it is to be determined upon the inspection of the bill alone, who has the right of action, or, in other words, who is the promisee, and although we should concede, that the same principle should apply to promissory notes, yet the important inquiry is, who is the payee, upon the face of this note! Is it the Rail Road [37]*37Company, or the individuals who constituted the board of commissioners? The commissioners are not named in the note as individuals, but only referred to officially, as the commissioners of the “Vermont Central Rail Road Company.” If the promise had been to A. B. and C., Commissioners of the Vermont Central Rail Road Co., the question would have been quite a different one from what is raised in this case.
I think the authorities well sustain the position, that where the principal is named in a bill of exchange, or promissory note, and the agent is not, except officially, — as a promise to pay “ the cashier of the Bank of Burlington,”. — the principal, who is named, is to be taken to be the promisee, rather than the agent, who is not named ; and this, too, upon the face of the instrument. In the case of the New York African Society v. Varick et al., 13 Johns. 38, the bond was executed to the standing committee of that society; and it was claimed, that the society could not sustain an action on it; but it was held otherwise. So in Bailey v. The Onondaga County M. Ins. Co., in error, 6 Hill 476, the bond was given to the directors of the company, to be paid to the said directors, their successors and assigns; and yet it was held, in legal effect, to be a bond to the company. In the case of The Commercial Bank v. French, 21 Pick. 486, the promise in the note was to pay “the cashier of the Commercial Bank, Boston, or his order;” and the action was sustained on the note by the bank. See, also, the case of Bank of United States v. Lyman et al., 20 Vt. 669, where this subject is ably and fully considered. Also, 1 Am. Lead. Cas., p. 461.
Our own courts have gone much farther than is necessary to go to sustain the present action, and that, too, in the case of promissory notes. In Arlington v. Hinds, 1 D. Ch. 431, the promise was “ to pay Luther Stone, town treasurer, or his successors in office;” and yet it was held, that the town of Arlington might maintain the action. In the case of Bank of Manchester v. Slason, 13 Vt. 334, the bill was indorsed thus, “ pay to M. Clark, Esq., cashier;” and yet, it appearing in evidence, that Clark was at the time cashier to the Bank of Manchester, and that this was the uniform inode of indorsing paper to banks, it was held, that the .action was well brought in the name of the bank. It may be remarked, that in both [38]*38of these cases the agents are designated by name, as well as officially, and there is no designation of their principals, in either case, upon the face of the paper. In the case before us the commissioners are a part of the necessary machinery for getting this corporation into operation, and are quasi agents of the corporation, necessarily acting in their behalf, prior to an organization. We think, 'that, upon this note, the company are the proper persons to bring this action, and especially as it appears, that the consideration, for which the note was given, was stock subscribed 'for by the defendant. In effect, it is a promise to the corporation, through the commissioners.
No question was. raised in the county court as to the existence of the plaintiffs as a corporation, and none has been raised in argument in this court, excepting whether they were in esse at the time the note was executed; and probably none could be raised, under the present pleadings.
The result is, the judgment of the county court is affirmed.