Chicago Building & Manufacturing Co. v. Browning

Citations

• 19 Pa. Super. 355
• 1902 Pa. Super. LEXIS 101

Syllabus

<p>Corporations — Stock subscription— Conditional subscription.</p> <p>When parties stipulate that the capital stock of a corporation shall be subscribed to a certain amount before the contract becomes binding, they are presumed to intend that the subscription shall be valid, and legally enforceable, and a subscription which is not so cannot be considered as coming within the terms of the contract.</p> <p>In an action upon a contract of subscription to the stock of a prospective corporation, the organization of which was never completed, it appeared that the subscription agreement embodied a contract with the plaintiff, a corporation, under the covenants of which plaintiff was to be paid a certain sum out of the subscriptions, in consideration of which it was to erect certain buildings and machinery. The subscribers were not to be bound until subscriptions to the amount which was to be paid to plaintiff had been procured. The agreement further provided that as soon as the full contract price had been subscribed the subscribers should come together and select a committeeman from among their number, who should be taken at the expense of the plaintiff to the Elgin district of Illinois, where he was to make an investigation of the butter and cheese factories established and operated under the system which the plaintiff proposed to introduce, and that if such committeeman did not find that the factories operated upon said system paid twenty per cent per annum upon the capital invested, and that the cows used for supplying the milk to such factories paid from $30.00 to $60.00 per year, then the contract should become null and void. But should the committeeman find evidence of the truthfulness of said statements, then the contract should be considered in full force and binding upon the parties. Another paragraph of the contract provided that as soon as said amount of capital stock was subscribed, the subscribers should become incorporated under the laws of the state of Pen