Republic Bank Note Co. v. Northwestern Pennsylvania Railroad

Citations

• 65 Pa. Super. 72
• 1916 Pa. Super. LEXIS 21

Syllabus

<p>Corporations — Railway Companies — Reorganization—Filing certificate— Act of April 8, 1861, P. L. 259 — -Contract for new stocle certificates and bonds — Ratification—Directors.</p> <p>Where a bondholder’s committee of an insolvent railway company forecloses a mortgage of the company, and enters into an agreement with the purchaser of the property to furnish the stock certificates and bonds for a new company to be organized free from debt, by the committee, to which the property is to be transferred, and without formal authority of the board of directors, and before the property is transferred to it, the committee, through its attorney, contracts with an engraver for the bonds and stocks of the new company, and, the same are subsequently delivered to the attorney of the new company, and used by it without knowledge in the manner in which they were ordered, the new company will not be liable to the engraver for the cost thereof, although the members of the committee were also directors of the new company.</p> <p>In such a case a mere discussion by the directors of the matter of securing the certificates and bonds, before the property was transferred, will not bind the company without formal action of the directors in giving the order, or in subsequently ratifying it. No ratification can be presumed from such a state of facts.</p>