Mulverhill v. Vicksburg Railway, Power & Manufacturing Co.

Citations

• 88 Miss. 689
• 40 So. 647

Syllabus

<p>1. Corporations. Promoters. Contracts. Construction. Railroads.</p> <p>Where complainant, owning a franchise for the construction and operation of a street railway, contracted with a third party to transfer the same to a corporation in consideration of his agreeing to build the .railroad, paying complainant twenty-five per centum of any profit that might be made out of the propérty, and the road was constructed as agreed, but no profits were made therefrom, the interest of the complainant in the road is to' be determined by treating the amount advanced for its construction and equipment as a first lien thereon, and not as a payment on capital stock.</p> <p>2. Same. Liability of corporation.</p> <p>Where at the time a street railway franchise was assigned it was understood that the assignee acquired the same for the benefit of a corporation which was to own and operate the road, and the corporation afterwards accepted the benefits accruing to it from the contract and availed itself of the franchise, with full knowledge of the manner and conditions upon which it was obtained, a contract by the promoters to make designated payments to the assignor, in consideration for his services in obtaining the franchise and assigning it, is binding on the corporation.</p> <p>S. Same. Disposition of assets. Bight of stockholder to object.</p> <p>In a suit by one of the promoters of a corporation to enjoin an alleged fraudulent sale of all of the corporation’s assets, individual corporators cannot object that complainant has no status in court because no stock had ever been issued to him, when-the entire corporate scheme was projected without any attempt to comply with the law providing that stock should not be issued in any corporation except for money, labor done or property actually received-.</p> <p>4. Same. Promoter’s contract. Construction.</p> <p>Where the incorporators of a street railway company agreed, jn consideration of the assignment of a franchise procured by plaint