tion to the capital stock of a corporation may be made by signing the preliminary articles. Such a subscription becomes enforcible upon the perfection of the corporate organization according to the law under articles of association. Miller v. Wild Cat G. R. Co., 52 Ind. 51; Nulton v. Clayton, 54 Iowa 425; Phoenix, etc., Co. v. Badger, 67 N. Y. 294; Cravens v. Eagle, etc., Mills Co., 120 Ind. 6. If the promise of the appellee is not binding it must be for some other reason than that it was made before the organization of the corporation was fully effected.

The statute requires that the persons who desire to organize a corporation shall "make, sign and acknowledge, before some officer capable to take acknowledgment of deeds, a certificate in writing," setting forth therein certain enumerated things. Section 3851, R. S. 1881. The contention of the appellee is that the promise is not effective, because the complaint shows that only seven of the eighty-three signers acknowledge the certificate. It seems quite clear, under the decision of this court in Indianapolis, etc., Mining Co. v. Herkimer, 46 Ind. 142, that the mere signing of the paper was not sufficient to complete the obligation, and that, in order to make valid and effective articles of association against all who sign, all must acknowledge them as the statute requires. Here it affirmatively appears that seven only of the signers acknowledged the execution of the instrument, and it can not be inferred that those who did not acknowledge it remained bound by its terms. As to them the instrument was incomplete, and it is quite well settled that an incomplete subscription can not be enforced. Dutchers, etc., R. Co. v. Mabbett, 58 Ñ. Y. 397; Reed v. Richmond, etc., R. Co., 50 Ind. 342; Richmond St. R. Co. v. Reed, 83 Ind. 9; Williamson v. Kokomo, etc., Ass'n, 89 Ind. 389.

It is, however, argued by appellant's counsel that the complaint does affirmatively show that the corporation was organized, but this does not meet the question, for it may well be that it was organized without the appellee as a stockholder. The fact that he did not acknowledge the instrument as the law requires implies that he did not become a stockholder, and there is nothing in the complaint which rebuts or opposes this implication. It devolved upon the plaintiff to remove the inference if he could. As the appellee did not acknowledge the instrument as the law requires, he did not become a stockholder, and if he were insisting that he was entitled to the number of shares set opposite his name, it is quite clear that the corporation might successfully resist his claim, since it is obvious that only those who acknowledge the articles of association as the law requires can successfully insist upon their right to stock. If the appellee can not be regarded as a stockholder, then it seems quite clear that he did not bind himself by simply signing the articles of association.

Whether a good complaint can be framed is not the question before us, for the only question presented by the record is as to the sufficiency of the complaint as it is written.

Judgment affirmed.

Note. See cases cited, supra, p. 463.

ARTICLE III. FORMS OF ASSOCIATION CONTRACTS; COMMON LAW SUBSCRIPTION CONTRACTS.1

Sec. 104. (1) Agreements to subscribe for stock in a corporation formed or to be formed..

CHARLES THRASHER v. THE PIKE COUNTY RAILROAD COMPANY.2 1861. IN THE SUPREME COURT OF ILLINOIS. 25 Ill. Reports, p. 393 (Orig. ed.); p. 340–348, Gross's Edition, 1876.

Appeal from the circuit court of Pike county; the Hon. J. S. Bailey, judge, presiding.

This was an action of assumpsit, by the Pike County Railroad Company against Charles Thrasher, upon the following agreement: "We, the undersigned, agree to subscribe to the stock of the Pike County Railroad, the sum set against our names, when the books may be opened for subscription.

Mr. JUSTICE BREESE delivered the opinion of the court. The appellee, who was plaintiff in the court below, urges several reasons justifying a recovery in this case, which it is necessary to notice. The declaration contains a special count, averring that on the 19th of March, 1856, the plaintiffs were a body politic and corporate with power to construct and operate a railroad within the county of Pike, and authorized by law, as such corporation, to secure subscriptions to the capital stock of the company to the amount of $1,000,000, in shares of $100 each, and, desiring to ascertain what amount of stock would be subscribed, and not having opened regular subscription books, but intending so to do, agreed with the defendant that they would, in a reasonable time thereafter, open books for the purpose of securing such subscriptions, and that they would permit and allow the defendant, when the books should be opened, to subscribe to the capital stock of the company thirty shares of $100 each, and upon payment therefor, the defendant should be the owner of thirty shares of the capital stock of the company. It is then averred that the defendant, in consideration of this promise, undertook and promised the plaintiff that he would subscribe to the stock of this company the sum of $3,000 when the books should be opened for subscriptions; that this promise was by a writing, signed by the defendant, and by him delivered to the plaintiff. It is then averred, that on the same day subscription books to the capital stock of the company were opened, of which the defendant had notice. The breach is, that the defendant neglected and refused to subscribe anything to the capital stock, accompanied by an averment that the subscription, when the

1 See note 93 Am. St. R. 349.

2 Only the part of the opinion relating to the nature of the agreement to subscribe is given.

books were opened, was due and payable before the commencement of the suit, and although notified thereof, the defendant has refused to pay any part of the sum of the $3,000. The common counts are added, in one of which the indebtedness is alleged to be for 100 shares of the stock of the Pike County Railroad, before that time bargained and sold to the defendant.

This is the cause of action as set forth by the plaintiffs, and it is claimed by them that they are entitled to recover as damages the par value of the stock, or the amount of calls made from time to time upon it, and which, at the commencement of the suit, amounted to fourteen installments, of five per cent. each, making, in all, $2,100. This, we do not think, is a fair view of the defendant's liability upon his promise, if one was made to the plaintiffs. His undertaking is to subscribe a certain amount of stock when the subscription books should be opened. This promise does not make him a stockholder, and, as such, liable to calls. The company has parted with no stock to him, and can only claim as damages the actual loss sustained by them by his failure, or refusal to subscribe, when he was notified that the books were opened for such purpose. The company has the stock which the defendant promised to take, but did not take. His promise is like any other promise or agreement to purchase any specific article of property. If the property contracted be retained by the vendor, and there is no delivery to the purchaser, or offer to deliver, the damages must not be measured by the value of the property, for it would not be just, in such cases, that the vendor should retain the property and recover also the value of it from the promisor. Some damage might result from the loss of a bargain, and to such the vendor would be entitled, if the extent could be established. In many cases they would be merely nominal. On an agreement for the sale and purchase of stocks, and a refusal by the purchaser to take the stocks, the measure of damages, ordinarily, might be the difference between the par value of the stocks and their market value, or between them and money. As well argued by the appellant, the defendant, having violated his promise by failing to subscribe, he has acquired no right to stock, nor could a recovery in this action entitle him to become a stockholder. The company retains its stock, and the defendant his money. A stock certificate of $3,000 would represent a value to the company equivalent to so much money, and, in a statement of their liabilities, this would appear against the company as so much held by the stockholders, for which the company was responsible. If there is no actual subscription, the company does not incur this liability. There being no special damage alleged, or proved, we do not think the plaintiffs could recover under this declaration, as they have done, the par value of the stock the defendant promised and agreed to take. A proper count might doubtless be so framed as to justify a full recovery under sufficient proof.

Reversed.

Note. See note at the end of next case.

Sec. 105. Same.

STRASBURG RAILROAD COMPANY v. ECHTERNACHT.1

1853. IN THE Supreme Court of PennsylvANIA. 21 Pa. St. Rep. 220-222, 60 Am. Dec. 49.

Certiorari to the common pleas of Lancaster county.

This was a bill in equity on the part of the railroad company, filed with the view of enforcing the specific performance of an agreement, which was as follows:

"We, the undersigned, agree to take the number of shares of the capital stock of the Strasburg Railroad Company, set opposite to our respective names, the price per share to be $100, provided there can be a charter obtained at the next ensuing session of the legislature of Pennsylvania, granting said company to terminate said road at the east end of the borough of Strasburg, and connecting with the state road at or near Lemon Place; granting also the said company to do all the business connected with the road, such as forwarding and receiving produce of all kinds, coal, lumber, and all other commodities as are transportable over other railroads."

William Echternacht, the defendant, was a signer for five shares. Application was made to the legislature, and on the 11th of February, 1851 (which was during the next ensuing session after the signing of the agreement), the act to incorporate the Strasburg Railroad Company was passed (Pam. L. p. 53), the provisions of which are in accordance with the terms specified in the above agreement.

The road was commenced, and it was alleged that the property of the defendant rose in value. He, however, refused to subscribe to the stock of the company, and the bill in question was filed. On the part of the defendant the bill was demurred to. The facts stated in the bill were not confessed, but it was alleged that no matter of equity was stated in the bill whereon a decree of specific performance should be made.

The demurrer was sustained by the court below, and the bill was dismissed; and to this error was assigned.

BLACK, C. J. Before the Strasburg Railroad Company was incorporated the defendant and others signed a paper, agreeing that if it should be incorporated with certain privileges, they would subscribe the number of shares set opposite to their respective names. The charter was obtained, and the defendant refused to take the stock. Whereupon the company brought this bill in equity to enforce specific performance of the contract.

A contract can not be made by one person alone. It takes two to make a bargain. Before a promise becomes a binding obligation, it must not only be made to, but must be expressly or impliedly accepted 1Arguments omitted.

by the party for whose benefit it was meant. The paper before us is no more than a naked expression of the subscriber's intention to pur chase certain shares in the capital stock of a company which it was expected would be incorporated by the legislature. Besides it is without any sufficient consideration. It is not pretended and can not be made out from the paper, that the agreement of the defendent was the motive of the others for taking stock. It is well settled that procuring legislation of any kind, is not a consideration which will support even a direct promise to pay a fair compensation for the labor of the promisee about such a business.

Again: If there was a binding engagement, it was not made with the railroad company, which did not exist at the time.

But, supposing this to have been a valid contract, to which the plaintiff was a party, and based upon good consideration, a bill in equity is not the mode of enforcing it; the remedy at law for its violation being full, complete and adequate.

Decree affirmed.

Note. See, 1880, Lake Ontario, etc., Co. v. Curtis, 80 N. Y. 219; 1898, Yonkers' Gazette Co. v. Taylor, 30 N. Y. App. Div. 334, on 337; 23 Am. and Eng. Enc., p. 786; Beach, §§ 61-65, 510-554; Clark, § 99; Cook, §§ 52-63; Elliott, §§ 345, 345a, 348; Morawetz, § 47, et seq.; Taylor, §§ 509-512, 1 Thompson, §§ 1138-1145.

Sec. 106.

(2) Agreements subscribing to stock in a corporation to be formed. Theories:

(a) A mere offer that may be withdrawn at any time before organization and acceptance by the corporation.

BRYANT'S POND STEAM MILL COMPANY v. JOHN G. FELT.'

1895. IN THE SUPREME COURT OF MAINE. 87 Maine Rep. 234-240, 47 Am. St. R. 323.

On report.

This was an action of assumpsit brought to recover of the defendant the sum of two hundred dollars, as appeared by his alleged subscription upon an original subscription book, and upon the outer cover of which was the following writing: "Subscriptions for a steam mill to be erected at or near Bryant's Pond." The original agreement was as follows:

"We, the undersigned, hereby agree to pay for the number of shares set opposite our names, said shares to be ten dollars each, and non-assessable, for the purpose of erecting suitable buildings, with steam power, for the manufacturing of various kinds of wood to be 1 Arguments omitted.

1