Feitel v. Dreyfous

Citations

• 117 La. 756
• 42 So. 259
• 1906 La. LEXIS 767

Syllabus

<p>1. Corporations Organization — Application por Stock — Contract.</p> <p>The promoters of a private corporation, having been advised by their solicitors that P. •was willing to take stock therein, sent him a printed form reading:</p> <p>“Ivindly place my name for - shares at the price of one hundred and fifty dollars per share, being one hundred dollars f 100) par value and fifty dollars (50) surplus — subject to allotment by the organization committee.</p> <p>“I bind myself to pay for this stock on the call of the organizers.”</p> <p>This paper was accompanied by a note reading: “Referring to your application in the above-bank, we shall thank you to fill and sign the inclosed slip and return it by first mail to-the undersigned.” P. signed the slip after filling it up with the words “one hundred,” find returned it to the writers. The bank was thereafter organized with F. loft out as a stockholder. He sued the promoters for 100 shares of stock, or in the alternative for damages for the increased value upon the shares.</p> <p>Held that F. had no cause of action. The slip, when filled and returned, was the “initial” step towards the creation of a future contract, a proposition or application submitted to the promoters for acceptance as a stockholder, which .did not ripen into a contract until acted upon favorably by the promoters and notice thereof had been given to the applicant.</p> <p>Hid. Note. — For cases in point, see Cent. Dig. vol. 12, Corporations, § 209.]</p> <p>2. Same.</p> <p>When an individual applies for shares in a company, there being no ‘ obligation to let him have any, there must be a response of the promoters, otherwise there is no contract.</p> <p>TEd. Note. — For cases in point,' see Cent. Dig. vol. 12, Corporations, § 209.]</p> <p>3. Same — Rights of Promoters.</p> <p>The promoters in this case were not acting as such as agents for any parties under delegated powers, but as the original parties or principals in the matter they were dealing with.