zation, no strained construction ought to be interposed against affording acknowledged protection to the corporate rights of stockholders who contribute their means to useful enterprises.

It is also objected against the validity of the Smelting Company that its corporators and officers were non-residents of this State; that the subscription and acknowledgment of the articles of incorporation were made, and meetings of the officers were held at a place without the State. These objections, we think, are not well founded. There is nothing in the statutes requiring corporators and officers, any more than stockholders, to be residents of the State granting the charter, and, indeed, it would be a rather strange law if there were such an one. But even such a provision would, in the case of a de facto corporation, be met by the authority of the Supreme Court of Pennsylvania in the Delaware & Hudson Canal Co. v. The Penn. Coal Co., 21 Pa. St. 131, 146, where it is held, that "conceding that the president and managers of the Pennsylvania Coal Co. at the time of entering into the contract were resident citizens of New York, and not residents or citizens of Pennsylvania, and that they were therefore ineligible, it does not follow that the agreement is not binding on the defendant. The officers may have been ineligible, but this can not be taken advantage of in this collateral proceeding. It is sufficient for the plaintiff and all third persons that they have dealt in good faith with the officers de facto."

The subscription and acknowledgment of the articles of incorporation, properly authenticated, may, we think, be made without as well as within the State. The corporation submits itself to the laws of Colorado when it assumes to incorporate and act thereunder in substantial compliance with the

statute.

Our statute does not in terms require the certificate of incorporation to be executed within the limits of the State, nor does it in terms require a meeting of the corporators prior to the execution of the certificate.

The essential prerequisites to the formation of a corporation are a certificate in form and substance as prescribed by statute; that it be signed by the corporators; that it be acknowledged before some officer competent to take acknowledgments of deeds, and that it be filed in the office of the Secretary of State,

and a copy in the office of the recorder of deeds of the county in which the principal business is to be carried on. The chapter on conveyances provides the manner in which, and the officers before whom conveyances and contracts affecting title to real property may be acknowledged without the State, as well as within the State. The execution of a certificate of incorporation under the statute, is analogous to the execution of a deed of conveyance, and neither instrument is of any validity without a delivery.

It is the filing of the certificate that brings the corporation into existence. This instrument may contain all that the statute requires, its execution may be wholly regular, but the performance of these acts does not constitute a corporation. The mere certificate, like an undelivered deed, is without validity or force-it may be retained by one of the makers, or it may be destroyed-but when filed as the law requires, and recorded in the office of the Secretary of State, the statute declares that "a copy thereof, duly certified by the Secretary of State, under the great seal of the State of Colorado, shall be evidence of the existence of such company.'

As respects the holding of meetings of directors beyond the limits of the State, section 18 of the Corporation Act provides that such meetings may be lawfully held, provided such provision is made in the certificate of incorporation.

Upon examining the copy of the certificate set out in the record, it is found to contain in its statement of the places where the business and operations of the company are to be carried on, the following provisions: "Sixth-The operations of our said company shall be carried on at or near Golden City, Jefferson county, State of Colorado, where the principal office shall be kept, with the privilege of a branch office in the city of Trenton, State of New Jersey, for the holding of meetings. of stockholders and directors, and for the transaction of such business as the best interests of the company may require." Meetings, therefore, of the directors were regular without the State.

Section 6 of the corporation law provides for the election of the directors annually by the stockholders, "at such time and place as shall be directed by the by-laws of the company." Conceding that meetings of the stockholders without the

State, although so directed by the by-laws of this company, are not within the saving clause of the 18th section of the statute referred to, and were therefore irregular or illegal, such act, while a violation of the statute, being such, not by express inhibition, but by construction of its contemplated meaning and upon principle, comes within the rule already laid down respecting irregular organization-that it can not be taken advantage of in a collateral proceeding by either the corporation or one contracting with it as such.

It is also to be observed that the persons who are named. by the corporators in the certificate as directors of the company for the first year, are created such directors by operation of law, and not by election of the stockholders after the corporation is formed, and hence it might be possible for the corporation to begin and go on in business for a year without any meeting of the stockholders, such directors, under the provisions of sections 5, 6, 7 and 8, being empowered to choose the president and other officers, adopt bylaws, and "manage the affairs of such company for the first year of its existence."

The omission to record a duplicate of the certificate in the county where operations of the company were carried on, is met by the case of the Mokelumne II. M. Co. v. Woodbury, 14 Cal. 426, and also by the case of Turbell v. Page, 24 Ill. 46, which is still stronger, there being in that case no certificate filed with the Secretary of State, and the court say:

"Whilst it may be true that a failure to file this certificate in the Secretary of State's office may be such a non-compliance with the law as would authorize the People to sustain a writ of quo warranto or scire facias, and to oust the corporators from the exercise of their franchises, it does not necessarily follow that it is not, as to third persons, a corporation." The judgment in favor of appellee rendered by the court below is for these reasons erroneous, and must be reversed. Judgment reversed.

THE COYOTE GOLD & SILVER MINING Co. v. RUBLE

ET AL.

(8 Oregon, 284. Supreme Court, 1880.)

Premature action of organizers. The organizers of a corporation can not, by their action before the completion of the incorporation and the election of directors, dispose of the future earnings of a corporation, or control the action of the directors to be elected.

Premature assessments. Stock can not be assessed before the election of the Board of Directors.

Election of directors. The election of directors is a condition precedent to the perfect organization of a corporation (under Oregon statute), but it may, before such election, become the holder of property.

1 Contracts of organizers. Contracts of the organizers do not bind the cor poration unless adopted or ratified by it upon the perfection of its organization.

First existence of corporation. A corporation exists as a legal entity from the time of the filing of its articles.

An agreement to subscribe for stock does not amount to a subscription, nor does such agreement authorize the secretary of the company to place the signers' names among the list of stockholders. To bind a party as a stockholder he must directly subscribe for stock or authorize a subscription on his account.

Estoppel. There is no estoppel between a corporation and the subscribers to its stock; and its action to recover subscriptions may be defeated upon inquiry into the conditions upon which the subscriptions were made.

Placer claims worked by same water. R., one of the prominent organizers, purchased, with his own money, claims which were to be transferred to a mining company; and also other claims so situate as to prevent the proper working of the company claims: Held, that, upon tender, he must convey all such claims to the company even if he had not become finally bound as a subscriber to the company.

Appeal from Jackson County.

This is a suit to enforce a trust concerning real property, and for an injunction and damages against the appellants. The respondent corporation was incorporated for the purpose of owning and working certain placer mining claims, with a

1 Peru Coal Co. v. Merrick, 79 Ill. 113, and see 3 M. R. 583.

capital stock of two hundred thousand dollars, in shares of the par value of one dollar each. The complaint alleges that the claims and property in question were, at the date of the incorporation, to wit, August 27, 1878, owned by the several following named parties, each owning certain distinct parcels thereof: O. Jacobs and H. Kelly, Ash and McWilliams, P H. O'Shea, Davis and Rathbon, John Robertson and Daniel Mathews. That the appellant, Wm. Ruble, as a subscriber to the capital stock of the incorporation, obligated himself to, and promised and agreed to pay upon his subscription for fifty thousand shares of the capital stock, the sum of ten thousand dollars-seven thousand dollars thereof down, and three thousand dollars on or before the first day of November, 1878, and the further sum of twelve thousand five hundred dollars when realized out of one half of the net proceeds of one fourth interest of the said mines. That Ruble agreed and promised to pay the said sum of money to the persons then owning the said mining claims, to apply upon the consideration to be paid therefor for the use and benefit of the corporation, and to take and receive from such of said owners, to whom such payment should be by him made, conveyances to the company for such portions of the said mining claims, lands, property, fixtures and appurtenances as should be by him paid for.

That on or about the fourth day of September, 1878, Ruble did, in accordance with his promise, and in pursuance of the trust reposed in him, pay upon his subscription the sum of nine thousand five hundred and fifty dollars, and of other money belonging to the company the sum of seven hundred and fifty dollars in the following amounts, to the following named parties, to wit: Davis and Rathbon, two thousand dollars; Ash and McWilliams, four thousand dollars; P. H. O'Shea, three thousand three hundred dollars, and John Robertson, one thousand dollars. That he, Ruble, took from such parties, conveyances of the property in question, to himself, instead of to the company, and that on the twentyseventh of November, 1878, he fraudulently conveyed to the appellant, Walter Ruble, the mining claims, ditches, water rights and flumes, known as the Davis and Rathbon and John Robertson claims, which had been conveyed to Win. Ruble