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State ex rel. v. Reynolds.

judgment against him. The subscriptions aggregated $100,000. The gentlemen authorized by the quoted agreement to do so, incorporated the De Giverville Land Company, their names alone appearing in the articles of association as stockholders. The corporation thereupon purchased the desired tract of land, paying therefor $100,000 in cash and mortgaging the property for the remainder of the purchase price. The several subscribers, except relator, paid in their subscriptions as they had agreed. Relator, when demand was made upon him in July, 1910, refused to pay, and subsequently the action mentioned was begun against him. The $2500 relator had subscribed was advanced to the corporation by another. Relator was not named in the articles of association.

Liability of
Subscriber to
Corporate Stock.

I. It is contended the opinion of the Court of Appeals is in conflict with the decision of this court in Sedalia, Warsaw & Southern Ry. Co. v. Wilkerson, 83 Mo. 235. In that case this court held a railroad corporation organized under section 764, Revised Statutes 1879, could not recover upon a subscription agreement, saying that the relation of stockholders in a corporation could not, under that section, be created in any mode other than by exact compliance with the statutory provision; i. e., that only those became stockholders who signed the articles of association and set out therein the number of shares they took; that in that manner only could one, in the first instance, come into the company as a stockholder. Under other sections one might subsequently acquire stock and become a stockholder, but a contract purporting to bind him to take stock in the company, entered into before the company was organized, was not obligatory. We shall not enter upon an effort to distinguish the statute (Secs. 3339 et seq., R. S. 1909) under which the De Giverville Land Company was organized, from that involved in the case to which we have just referred. In the case at

State ex rel. v. Reynolds.

bar we are to determine whether it is the law that one bound by a 'contract whereby he subscribes a named amount of stock in a business corporation he assists in originating and which he authorizes his agents and attorneys-in-fact to bring into existence, can, after such attorneys-in-fact and agents have organized the corporation, pursuant to his written authorization so to do, repudiate his contract, abandon his associates, take the benefit of the common enterprise and escape liability.

It is unnecessary to examine at length the criticisms which have been made of the rule approved in the Wilkerson case. The rule supported by reason and the weight of authority is quoted in Railroad v. Crow, 137 Mo. App. 1. c. 466: "First, that the co-adventurers who sign such contract obligate themselves to each other and that the promise of each is a consideration for the promise of the others. Second, that the subscription is in the nature of a standing and continuing proposal to the corporation which is contemplated by the parties, and that when the corporation is called into existence and accepts the proposal, the minds of the contracting parties meet and the contract is obligatory."

In the case just referred to and in that before us the Court of Appeals has collected the authorities and they need not be set out here.

The rule is stated thus in 7 R. C. L. 222, sec. 192: "The law is fairly well settled that where parties propose to form a corporation, and become shareholders therein, and such parties intend to become such shareholders, without further act upon their part, upon the incorporation of the company, and the agreement remains open and is unrevoked, and the corporation is formed in pursuance of it, and thereafter acts upon it by accepting the same, such agreement is valid and binding as a subscription to the capital stock of such corporation." This rule we think applicable to the facts of this case. The authorities referred to lead to

Town of Montevallo v. School District.

the conclusion that, at all events, the decision in the Wilkerson case, in so far as it conflicts with this holding, should be overruled. At least its application should be restricted to the particular facts in judgment in that case.

II. Other questions are discussed in the briefs. These arise chiefly out of the discussion by the Court of Appeals of problems confronting it in its effort to distinguish the Wilkerson case. Since we have disposed of that obstacle these matters become unimportant. Upon them it is unnecessary for us to express an opinion. We do not deem it necessary

Conflict in Opinions Removed: Judgment.

further to examine the opinion upon questions whose vitality is destroyed by the view we take of the Wilkerson case. The conclusion of the court was correct. The grounds upon which it distinguished the Wilkerson case cannot, in view of our conclusions as to the rule in that case, be considered as authoritative. With this qualification as to those portions of the Court of Appeals opinion, our writ is quashed. All concur. Bond, J., in result.


In Banc, June 2, 1916.

1. DEDICATION OF LAND: For General Public: Application to Public School Use. Property designated on the plat by the owner as a "public square" and granted to the village "for the full use and enjoyment" of the entire public forever, cannot be diverted by the village tc a single or elusive public use. After such grant the village was without au


Town of Montevallo v. School District.

thority to change the purposes of the original grant, and had no authority to appropriate it to the exclusive use of the public school district, which is a decidedly more limited and restricted use than the dedication warranted. [Overruling Reid v. Board of Education of Edina, 73 Mo. 295.]

Estoppel. Where a village to which a public square had by the owner been granted for the full use and enjoyment of the entire public forever, appropriated it to a public school use, it appropriated it to that extent, at least, to one public use within the scope of its authority; and when, on the faith of such appropriation, the school district erected a costly school building and for nearly thirty years has continued to use it for public school purposes without objection, and has continued to improve it for such use, the doctrine of estoppel should be applied against the village, and the village prohibited from recovering it for general public uses so long as it continues to be used for public school purposes. 3. ESTOPPEL: Laches: Against Municipal Corporation. Estoppel cannot ordinarily be applied to a municipa! corporation; but there may grow up, in consequence of the acts of the corporation itself, rights of more persuasive force than those of the public and wherein justice requires an equitable estoppel to besserted; and particularly should this be the ruling in a case where it is one class of the public as against another class, and where by the affirmative action of the village corporation the school district was directed to take and use a public square for school purposes, and where justice and right demand that the equitable principle of estoppel or laches be applied to prevent injury and wrong.

Error to Vernon Circuit Court.-Hon. B. G. Thurman, Judge.


J. B. Journey for plaintiff in error.

(1) A city or town may control and regulate the use of ground dedicated to the public, but it cannot sell the land or devote it to private use, and thereby destroy the trust created for the benefit of the public.

Town of Montevallo v. School District.

Cummings v. St. Louis, 90 Mo. 259; Board of Regents v. Painter, 102 Mo. 464; G. S. 1865, chap. 44, sec. 8; R. S. 1909, sec. 10294. Nor is the establishment of a public school therein a compliance with the purpose of the dedicator. Board of Regents v. Painter, 102 Mo. 464. (2) The act of the town board of the plaintiff on July 19, 1886, in ceding the public square or block of ground in question to the Montevallo Village School District, for school purposes, did not pass any title to said land to the defendant in error. It merely gave them a very doubtful right. In fact it did not give them any right at all. The act was ultra vires, because it was a diversion of the land from the purpose for which it was dedicated. The town board had no right to make such an order. Board of Regents v. Painter, 102 Mo. 464; Thomas v. Hunt, 134 Mo. 402; Refining Co. v. Grain Co., 82 Mo. 121; Ferrenbach v. Turner, 86 Mo. 419. (3) The court in rendering his decision found that the plaintiff in error, the town of Montevallo, had abandoned the land in question. The facts in testimony will not sustain any such finding. But if true, there could be no such thing as abandonmentthe public cannot be held responsible for the neglect of duty of its officers and agents. St. Louis v. Railway, 114 Mo. 13.

Scott & Bowker for defendant in error.

(1) No unincorporated town or village can take and hold the legal title to land conveyed by deed, for the reason that there is no grantee in being in whom the title can vest. Miller v. Rosenberger, 144 Mo. 292; Kansas City v. Scarritt, 169 Mo. 471. (2) Where there is no party grantee in being at the time of the grant made for a public use, as in the case here, the legal title remains in the grantor, and where the public use is abandoned the whole title reverts to the original grantor. Kansas

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