8.

Estoppel to deny existence of a corporation contracted with as such.-One dealing or contracting with an alleged railroad corporation, and which had legal authority to organize as such, thereby recognizes its corporate capacity, although it may not be strictly a corporation in law, and will be estopped to deny the same. Such is the law, as well in regard to the contracts and dealings of a municipal body with such supposed corporation, as of those of private individuals.' Hence, when a municipal corporation contracts with a private railroad corporation, as such, it will be estopped to deny the corporate entity and capacity of the corporation with which it thus contracts."

But this doctrine does not apply in favor of supposed corporations, assuming to be such without some color of legal authority-as, for instance, where there is no law authorizing such incorporation, or if there be apparently such a law, yet it be totally void for unconstitutionality. The princi

It being a question of power, silent acquiescence in the acts of subordinate agents does not make a stronger case; for, if a formal contract is not obligatory on the company, one proved by inferior or circumstantial evidence certainly is not. The kind of evidence is quite immaterial. Should the directors of a savings bank, or of any bank, contract with a ship builder for a steamship to navigate the ocean, would this contract bind the company? Certainly not; because the directors have no power to make it; nor would they have more, were they to make such contracts from day to day. The legislature has absolutely marked the limit of their power, and they can not exceed it, under the charter; and if the directors, even with all the stockholders at their side, transcend the limits of the charter, and make contracts foreign to their business, they only act for themselves. The reason is, there can be no consent of the corporation. If this is not so, there are no restrictions or limitations on chartered companies, and they may do anything and

*

*

everything the directors please, which is not absolutely unlawful. The exercise of power is held to prove itself; which is absurd": 22 Conn. 508, 509, 510.

'Evansville, Indianapolis & Cleveland Straight Line R. R. Co. v. The City of Evansville, 15 Ind. 395; Heaston v. Cincinnati & Fort Wayne R. R. Co., 16 Ind. 275; Brownlee v. Ohio, Indiana & Illinois R. R. Co. and others, 18 Ind. 68; Douglas Co. v. Bolles, 94 U. S. 104; Cowell v. Col. Springs Co., 3 Col. 82, 100 U. S. 56; Cahall v. Citizens' M. B. Ass'n, 61 Ala. 232.

2 Evansville, Indianapolis & CleveLand R. R. Co. v. The City of Evansville. 15 Ind. 395.

3 Heaston v. The Cincinnati & Fort Wayne R. R. Co., 16 Ind. 275; Gillesper. Fort Wayne & Southern R. R. Co., 17 Ind. 243; Williams v. Franklin T. A. Ass'n, 26 Ind. 310; Boyce v. Towsontown Sta. M. E. Ch., 46 Md. 359. And a deed to such pretended corporation, which has no law for its basis, is void, and does not divest the grantor's title: Harriman v. Southam, 16 Ind. 190.

ple applies only to supposed corporations attempted to be created under competent authority, but so irregularly or informally got up as to not amount to corporations de jure. They are, nevertheless, corporations de facto, while acting as such, and those contracting with them are estopped to deny their corporate existence.' This can be done only by the direct proceeding of quo warranto, instituted by the state.

A commissioner to receive subscriptions to the stock of a contemplated railroad corporation preparatory to becoming incorporate, and who unites with the other commissioners in a certificate to the governor of the state that the required amount of capital stock has been subscribed, and that the subscriptions certified (one of which was his own) were taken and made in good faith, and agreeably to the requirements of the act of assembly in that respect, and that the requisite per cent. is paid in on such subscriptions, will be estopped, in an action on his own subscription, to deny the validity thereof, or to show in his defense that the same was made dependent upon conditions. Moreover, such a conditional subscription (before the obtaining of a charter) is a fraud on the government and upon the unconditional subscribers."

One who subscribes to the capital stock of a railroad corporation in such terms as recognizes and asserts the existence thereof, is thereby estopped to deny the corporate capacity of the company, in an action against him upon such subscription. Nor is it any defense that the percentage required to be paid at the time of subscribing was not then paid, where a greatly larger percentage has subsequently, and before suit, been paid thereon. Such subsequent payment, in recognition of the subscription, fills the statutory requirement.*

1 Heaston v. The Cincinnati & Fort Wayne R. R. Co., 16 Ind. 275; Swartwout v. The Mich. Air Line R. R. Co., 24 Mich. (2 Post), 389.

2 Bavington v. Pittsburgh & Steubenville R. R. Co., 34 Penn. St. (10 Casey), 358.

3 Bavington v. Pittsburgh & Steubenville R. R. Co., 34 Penn. St. (10 Casey), 358; ante, Chap. IV, subd'n 3.

Dutchess Cotton Manufactory v. Davis, 14 John. 245; Steam Nav. Co. v. Weed, 17 Barb. 382; Black River & Utica R. R. Co. v. Clarke, 25 N. Y.

(11 Smith), 208; Phoenix Warehg. Co. v. Badger, 67 N. Y. 294, 6 Hun, 293; Sanger v. Upton, 91 U. S. 56; Chubb v. Upton, 95 U. S. 665; Clarke v. Thomas, 34 Ohio St. 46. And so, payment of previous calls estops a party sued for capital stock to deny the validity of his subscription, or the regularity of the incorporation: Cromford & High Peak R. W. Co. v. Lacey, 1 Eng. Ry. & C. Cases, 641.

5 Black River & Utica R. R. Co. v. Clarke, 25 N. York (11 Smith), 208.

CHAPTER XXVII.

ADMISSIONS.

Of directors and stockholders

1.

Of directors and stockholders. -Declarations and admissions of directors do not ordinarily bind the company, when made merely as such directors, whether in session or out of session of their body, and therefore are not admissible, under such circumstances, in evidence against the company.' Yet, if made in reference to a matter not reduced to writing, and in regard to a matter of business then being under the special agency and control of such director or directors, they are admissible, upon the principle that whatever an agent says while acting within the scope of his authority, the principal says; and evidence may be given thereof, as if they had been actually the words of the principal himself."

2. Of agents, servants and employes.-When the act or omission of an agent or servant would bind the principal in relation to the subject-matter in controversy, then his statements and admissions in reference thereto will also bind the principal, if made at the same time the act is done, or omitted to be done, so as to connect itself therewith, and become a part of the res gesta.

Penn. R. R. Co. v. Books, 57 Penn. St. 339, 343; Mil. & Miss. R. R. Co. v. Finney, 10 Wis. 388; Moore v. Meacham, 10 N. Y. 207; Luby and wife r. Hudson River R. R. Co., 17 N. Y. (3 Smith), 131; Hamilton v. New York Cent. R. R. Co., 51 N. Y. (6 Sickels), 100; Anderson v. The Rome, Watertown & Ogdensburgh R. R. Co., 54 N. Y. (9 Sickels), 334; Whittaker v. Eighth Ave. R. R. Co., 5 Robertson, 650; Brehm v. Great Western Ry. Co., 34 Barbour, 256; Sisson and another v. The Cleveland & Toledo R. R.

To be admissible in evidence as against the principal, such statements and admissions must be in the nature of original ones, and must not only be made during the continuance of the agency or service, but in regard to a transaction pending or transpiring at the very time. Subsequent statements or admissions, made by way of relating the occurrence, or of account for the same, are not admissible in evidence against the principal.' Though the admissions, under proper circumstances, of an agent of a railroad company, when made within the scope of his business, are binding against the company, as has been before stated, yet they are not so when made in reference to a different or independent subject-matter of the company's business, other than that which at the time was within such agent's business and control. Therefore the admissions of one whose business is the

Co. and others, 14 Mich. (1 Jennison), 489; Virginia & Tenn. R. R. Co. v. Sayers, 26 Gratt. 328; Chicago, Burlington & Quincy R. R. Co. v. Riddie, 60 Ill. 534; Griffin v. Montgomery & West Point R. R. Co., 26 Ga. 111; Atlanta & LaGrange R. R. Co. v. Hodnett, 29 Ga. 461; Wright v. Georgia R. R. & B. Co., 34 Ga. 330; East Tenn., Virginia & Georgia R. R. Co. v. Duggan, 51 Geo. 212; Covington & Lexington R. R. Co. v. Ingles, 15 B. Monroe, 637; Ashmore v. Penn. S. T. & T. Co., 38 N. J. 13, 13 Am. Ry. Rep. 23.

Lafayette & Indianapolis R. R. Co. r. Ehman 30 Ind. 83; Bellefontaine R. W. Co. v. Hunter, 33 Ind. 335; Moore v. Meacham, 10 N. Y. 207; Luby v. Hudson River R. R. Co., 17 N. Y. 131; Anderson v. Rome, etc., R. R. Co., 54 N. Y. 334; Furst v. Second Ave. R. R. Co., 72 N. Y. 542; Stiles v. Western R R. Co., 8 Metcalf, 44; Lane v. Bryant, 9 Gray, 245; Pennsylvania R. R. Co. v. Books, 57 Penn. St. 339, 343; Mullan v. Phil. & S. M. St. Co., 78 Penn. St. 25; Bigley v. Williams, 80 Id. 107; Baker v. Allegheny Valley R. R. Co., 95 Penn. St. 211; S. C. 10 Repr. 672; Huntingdon & Broad Top

Mt. R. R. & Coal Co. v. Decker, 82 Penn. St. 119, 15 Am. Ry. Rep. 425; Pollard v. Louisville, Cincinnati & Lexington R. R. Co., 7 Bush (Ky.), 597; Virginia & Tenn. R. R. Co. v. Sayers, 26 Gratt. 32; Treadway r. Sioux City & St. Paul R. R. Co., 40 Ia. 526, 8 Am. Ry. Rep. 415; Michigan Central R. R. Co. v. Gougar, 55 Ill. 503; Chicago & Northwestern Ry. Co. v. Fillmore, 57 Ill. 265, 10 Am. Ry. Rep. 462; Ohio & Miss. Ry. Co. v. Porter, 92 III. 437; Milwaukee & Mississippi R. K. Co. v. Finney, 10 Wis. 388; Smith v. North Carolina R. R. Co., 68 N. C. 107; Malecek v. Tower Grove & Lafayette Ry. Co., 57 Mo. 17, 9 Am. Ry. Rep. 1; Coyle v. Baltimore & Ohio R. R. Co., 11 W. Va. 94, 18 Am. Ry. Rep. 487; Hawker v. Same, 15 Id. 628; Ashmore v. Penn. Steam T. & T. Co., 9 Vroom, 13; Tanner v. Louis ille & Nashville R. R. Co., 60 Ala. 621; Thompson v. Androscoggin R. I. Co., 58 N. H. 108; S. C. 54 Id. 545.

2 Livingston v. Iowa Midland Ry. Co., 35 Iowa, 555; Kansas Pacific Ry. Co. v. Little, 19 Kans. 267, 17 A... Ry. Rep. 455.

3

Livingston v. Iowa Midland Ry. Co., 35 Iowa, 555; Ashmore v. Penn.

making of repairs upon the road, is not admissible in a suit against the company for omission to construct a cattle pass, the construction or ordering of which is not within the duties or powers of the person whose admissions are thus offered to be proved.'

Nor are the admissions of stockholders, merely as such, in any manner binding on the company, when made individually, in their separate and individual capacity, and not as an act of the aggregated majority of a meeting thereof, properly constituted.'

S. T. & T. Co., 38 N. J. 13, 13 Am.
Ry. Rep. 23.

Livingston v. Ia. Midland Ry. Co.,

35 Iowa, 555.

2 Mitchell v. The Rome R. R. Co., 17 Geo. 574.