Clarke v. O. & S. W. R. R. a different contract with the corporation; and, yet, this ante-agreement is set up in his petition and made the foundation of his cause of action. It is clear that the mention of his claim to Caldwell occurred after the organization was completed, the articles of incorporation were adopted, the subscription was made, and the meeting had adjourned. At the meeting of December 31, 1869, the stock book of the company was opened, and the subscription contract is as follows: "Subscriptions to the capital stock of the Omaha and Southwestern Railroad Company. We, the undersigned, having heretofore informally subscribed the amount of stock set opposite our names, now come, after. due publication, and formally subscribe to the capital stock of the Omaha and Southwestern Railroad Company, the number of shares set opposite our names. The shares to be one hundred dollars each, and payable in cash to the full amount as may be called for by the directors of said road. Dated, December 31, 1869." Seventeen different persons subscribed for stock, and the whole amount was subscribed in twenty-two different parcels. The plaintiff subscribed, in two parcels, one hundred and fifty shares, and two parcels of twenty-five shares each were severally subscribed by Briggs and Caldwell in trust for plaintiff, on condition, as plaintiff testifies, that "Caldwell and Briggs should sign for the shares and he (plaintiff) should have the privilege if he paid for them in three weeks." It appears from the plaintiff's testimony, these subscriptions were so made on account of some objection to his taking so many in his own name. According to a notice as required by law, at a meeting on the seventh day of February, 1870, the stockholders elected a new board of directors. At a meeting of stockholders on the first day of September, 1870, it was agreed, by resolution adopted without objection, "that the company issue stock to the amount of two hundred thousand dollars, to be dividea Clarke v. O. & S. W. R. R. among the stockholders, according to their respective interests as shown by the amount of money paid in by each." The plaintiff voted for the resolution, constituting a new contract between the members and the corporation. By this resolution the entire amount of capital stock was fixed at two hundred thousand dollars; and by the conditions of the contract this entire amount of stock was divided among the stockholders, according to their respective interests as shown by the amount paid in by each. This contract fixed the stock interest of each stockholder, in the division of the whole stock, in proportion to the amount of money paid in by him; and it appears that the plaintiff had paid in money an amount equal to four hundred and fifty shares of this whole capital stock, as fixed by the resolution, and he afterwards received certificates for that number of shares. A "contract subsisting between the members of the corporate body and the corporation is within the protection of the constitution;" and evidence is inadmissible to vary its terms, unless it tends to show fraud. Wright v. Shelby, 16 B. Monroe, 5. Brower v. Appleby, 1 Sandf., 170. Kennebeck & Portland R. R. Co., v. Waters, 34 Me., 369. The plaintiff, however, contends that his claim should have been credited to him on account of stock, which would have entitled him to the two hundred shares now claimed by him, and insists that the check he drew on Caldwell, Hamilton & Co., on the twenty-seventh day of November, 1869, after the meeting was held, should have been accepted by the corporation as a discharge of or set off to his claim, and as a payment for this stock. But the existent facts, at the time, and the circumstances under which the check was given, are inconsistent with the theory contended for by the plaintiff, for the reason that, as testified by Caldwell, when the plaintiff gave the check, he said he would make it good in a day or two, having no funds in the hands of the drawees at the time Clarke v. O. & S. W. R. R. but the check was not paid, and was in a few days afterwards returned to the plaintiff, and that was the end of that matter; and for the further reason, that the plaintiff did not then have any authority to assign and transfer the franchises, rights, surveys and property of the companies he represented, or produce any assurances that he could procure such transfers to be made; and the still further reason that there is no proof tending to show that the matter of his claim was at all mentioned during the meeting of the members on the twenty-seventh day of November, or that there was any agreement in relation to the matter between him and the corporation. And I may further observe here, that the proofs are silent as to who, if any persons, other than McCormick, Gray, Clopper and Gise were present at negotiations with plaintiff prior to the organization of the company defendant; and also fail to show that any of the corporators, except Gray, Caldwell, Clopper and Gise had knowledge of those prior negotiations and the agreement, until after the meeting of November 27th, and their knowledge after that time is only inferable from the evidence. It therefore, seems to me, that the facts, circumstances, and acts of the plaintiff, clearly negative the theory that his claim was to be credited on account of stock. It is said in Henry v. Vermillion & Ashland R. R. Co., 17 Ohio, 191, that "stockholders who have attempted to secure by agreement, a privilege of paying up their stock subscription in goods or otherwise, except in money, as contemplated by the charter, will not be allowed the benefit of such stipulations. Such agreement will be considered a fraud on the other stockholders, and the amount must be collected in money." Noble v. Cadwallader, 20 Ohio St., 208. Downie v. White, 12 Wis., 176. It is, however, insisted that the payment of two thousand and five hundred dollars, made by the plaintiff, on the fourth day of January, 1870, should have been Clarke v. O. & S. W. R. R. appied on the stock subscribed in the names of Briggs and Caldwell. The plaintiff testifies that he intended it to be so applied, but does not say he gave any directions to have the money so applied, when he deposited the amount to the credit of Caldwell, Hamilton & Co., in Chicago; and Caldwell testifies that no such directions. were given in regard to the application of the money, and he paid it over to the treasurer of the corporation without any such direction. Hence, under the common. law rule, the corporation had the right to apply the amount paid, upon any legal demand it had against the plaintiff. 2 Par. on Con., 629. It may be further observed in respect to these shares, that Malloy testifies, "the reason that these two subscriptions were not taken in his (plaintiff's) own name was that they were afraid he would control the concern." The plaintiff, however, testifies that Briggs and Caldwell were "to sign for the shares, and he was to have the privilege if he paid for them in three weeks." This is a direct conflict of testimony; but I think the acts of the plaintiff at the meeting of November 27, and subsequent thereto clearly indicate that he gives the true reason for these subscriptions being made in the names of B. and C. One other remark in respect to the testimony of Malloy; he says that the new company was to take what the plaintiff had, and allow him ten thousand for it, and that this amount was to be applied in paying for his stock. This testimony can have no weight as applying to the corporation, because the proofs wholly fail to show that any such contract was mentioned at the meeting of November 27, and because the plaintiff entered into a contract with the corporation to pay the stock subscribed by him, in cash; and such agreement is also negatived by the plaintiff's contract of September 1, 1870. If this testimony is to be applied to the ante-agreement of the plaintiff and the individuals signing it with him, it is Clarke v. O. & S. W. R. R. correct so far as it relates to the amount they agreed to allow him. The witness must have had in his mind, what he understood in relation to the prior negotiations between the plaintiff and the parties then negotiating with him. Much has been said in regard to the number of shares voted by the plaintiff at the meetings of the stockholders. It will be remembered that on the first day of September, 1870, the stock was doubled and the whole amount was divided among the stockholders according to the amount of money paid in by each, and that this action constituted a contract between the members and the corporation. On the third day of the same month, at a meeting of the stockholders, the shares were voted as formerly, and the same course was pursued at another meeting on the thirtieth day of the same month, except that the plaintiff only voted one hundred shares. At a meeting on February 6, 1871, it appears the right to vote was based upon the contract of September 1, 1870, and a list was prepared by the secretary, showing the number of shares each stockholder was entitled to vote, giving to the plaintiff three hundred, but it seems no votes were cast; and after this, at the meetings held August 18, December 15 and 20, 1871, January 23 and February 5, 1872, the plaintiff voted his four hundred and fifty shares, and did not ask to vote more until after he had commenced his suit. Now, I think, in view of the facts and the acts of plaintiff, to say that the manner in which the shares were voted, constitutes on the part of the corporation, a recognition of the plaintiff's claim, would be an unwarrantable presumption, which cannot be sustained upon any principle of ethics or law. Query: If a person does two wrongs, even unopposed, will such acts confer a legal right? Will they constitute a recognition of a disputed claim? I think not. |