Selma, Marion & Memphis Railroad v. Anderson

Citations

• 51 Miss. 829

Syllabus

<p>1. Corporations : Subscriptions thereto. How avoided.</p> <p>A statement ou the part of the agent of a corporation as to the pecuniary condition and prospect of his corporation, will not avoid a subscription, unless the falsity and fraud of such representations are clearly shown, and unless it is manifest that the condition of the enterprise constituted a material inducement to the subscription.</p> <p>2. Same : False representations of agents. Hffeet thereof.</p> <p>To avoid a subscription upon the ground of false representation of an agent, it must be shown that the statement was not uttered as an opinion, but as an ascertained and existing fact. It must not only be false in fact, but must also be either known to be so by the party uttering it, or his position must be one that made it his duty to know the truth. The resisting subscriber must show that he acted upon such statement; that his own position was such as warranted him in so acting; and that the statement was as to a fact material to the question of his subscription. .</p> <p>3. Same: Same.</p> <p>If the representations are as to matters controlled by the charter, and as to which the subscriber is legally bound to know that the agentabas no right to make representations inconsistent therewith, they will not avoid the subscription. As to matters not controlled by the charter, false and fraudulent representations, which come within the limitations, and by which one has been entrapped into a subscription, will avoid the contract just as fraud vitiates contracts of every character.</p> <p>4. Instructions : Case in judgment.</p> <p>The court instructed the jury to the effect, that “where an act of incorporation fixes the amount of the capital stock and the number of shares into which it shall be divided, the corporation can make no assessment nor call upon the stockholders until the stock has been subscribed, unless either expressly or by implication a different intent appears in the charter or in the subsc