Dickason v. Bank Co. directed him "to do all things necessary to be done to carry on the business of this corporation." The fifth stockholder, Kerr, testifies he knew Mills was to run the business, but he never attended any meetings, either of stockholders or directors. But it is contended that there was no legally elected board of directors, for Lan. R. L. 6124 (R. S. 3798) provides that the incorporators of a savings and loan association shall give at least three days notice, personally served upon each stockholder, or thirty days notice by publication, of the time and place of the meeting, for the election of directors. This was not done, it being in evidence that at least Kerr had no notice of such meeting, and did not waive such notice. We think however, that this objection is not well taken. "The fact that directors have been illegally elected cannot be set up as a defense to a suit for the payment of stock." Green's Brice, Ultra Vires 150, note b, and cases cited. It is next contended that only three of the five directors ever qualified and assumed to act as such; that the business of the corporation must be transacted by the board, the whole board and nothing but the board, and as sustaining this contention we are referred to the case of Bradford Belting Co. v. Gibson, 68 Ohio St. 442 [67 N. E. Rep. 888]. But that case only holds that an officer of a corporation, in the absence of express authority from the board of directors cannot bind the corporation in a transaction beyond the apparent authority of his position. On page 449 of the opinion Judge Davis says: "The corporation may by its regulations, so define the duties of its officers as to make them alter ego within the assigned limits." In this case we think the board attempted to confer this express authority by the resolution referred to, and we use the word, board, designedly, though only three out of five acted, for Lan. R. L. 5188 (R. S. 3247) says: "A majority of the trustees or directors shall form a board." It also sufficiently appears that the three directors who acted, took the oath of office, if that is material. It is further contended as to the claim of the Savings Deposit Bank Company, that it is for a loan, and that Mills, who negotiated the loan, not only had no authority to represent this corporation, but it itself had no authority to borrow money. We think such an institution as this has the power granted under the general corporation statutes, by Lan. R. L. 5199 (R. S. 3256), to Lorain County. borrow money, and that Mills had express authority to negotiate the loan by virtue of the resolution referred to, a copy of which he exhibited to the Elyria bank. It is said that the Elyria bank knew that the Grafton bank had 'not complied with the law and paid up half of its capital stock, because Mills told it about notes which Kerr and Fuller had given for their stock subscription, but it does not appear that it knew said notes represented their entire stock subscription; it might reasonably have supposed that they had paid up one-half and that the notes were for the balance. Upon the whole we are of opinion that the Grafton Savings Bank Company was a de facto corporation, and that the irregularities in its organization and method of doing business complained of are not such as either the defendant, Fuller or the defendant, Kerr, or any other defendant stockholder can set up as a defense to this action to collect such part of their subscription and secondary stock liability as may be necessary to pay the valid debts incurred in its behalf by its acting board of directors or Mills under authority of the resolution mentioned; in other words that said stockholders are estopped from setting up such defense; in the words of Ashbel Green's American edition of Brice, Ultra Vires (2 ed.) 784: "When a transaction of the kind now in consideration is completed on the part of the other contracting party, every principle of common sense and equity requires that the corporation should not be permitted to repudiate payment therefor, or. the other due completion thereof by itself, on the ground that the transaction, though admitted to be within its possible capacities, is outside its actual powers then called into existence. The very defense discloses fraud; discloses what no court of equity has ever allowed a party to rely on, namely, his own laches or chicanery; discloses that the objector could have given, and can now give himself the capacity which he pretends to be without, and could have done that which, if done, would cut away the ground whereon his objection rests. It is submitted, therefore, that when such a transaction is completed on one side, it is then too late for the corporation to attempt to wriggle out of that stipulated for on its side." This is strong language. The word "chicanery" is applicable to Mills' conduct alone, but the word "laches" fully characterizes the easy and indifferent manner in which Fuller and Kerr signed stock subscriptions, Fuller also signing minutes of meetings-minutes which he says he never read, and meetings which he says he never attended-and both trusted to the representations of their friends that Mills had a good bus Dickason v. Bank Co. iness, and would run the bank all right. Does anyone for a moment suppose that if the corporation had been a success, made money, declared large dividends, that either Fuller or Kerr would have denied that they were stockholders or denied that there was a corporation? Should they be heard to make such denial when the shoe is on the other foot? We think these observations answer the suggestion, supported by authority, that those who did not participate in the de facto organization should not be held liable. We find that all participated by giving their subscription, and they had no right to consider the enterprise abandoned, as was held under the circumstances of the case of Bartholomew v. Bentley, 1 Ohio St. 37. It remains to consider two more Ohio cases with which the conclusion reached in this case is said to be inconsistent. The case of Medill v. Collier, 16 Ohio St. 599, was an action by a depositor against the officers and stockholders of a bank, to recover from them as individuals, on a certificate of deposit issued by the corporation, it appearing that said corporation had failed to make a deposit with the state required by law, as a prerequisite to such corporation's doing business. It seems the depositor "had no information as to whether they were doing business as a corporation, or as private bankers. He seems to have trusted them in the latter capacity." Page 611. The court held that persons who carry on a banking business, in the name of a corporation, in violation of law, are not protected by the corporate privileges from personal liability for debts contracted by them in the transaction of such business. That doubtless is the law yet, and plaintiff might have had it enforced against Mills, and his active associates, if he desired, but he chose to pursue another remedy, and we do not find that the case cited holds that he cannot. Indeed, it expressly states that such proposition is not decided. On page 612, Judge Day says: "Whether the law would afford any remedy in favor of the plaintiff against the corporation, upon a contract express or implied, made on its part in violation of law, may well be doubted, both upon principle and authority. * Clearly the plaintiff would have no remedy against the corporation, unless he could bring to his aid the doctrine of estoppel, where the transaction is forbidden, as may be done where it is merely unauthorized. Although the court do not deem it necessary to decide this point, the following authorities tend to show that the plaintiff is remediless against the corporation." The case of Trust Co. v. Floyd, 47 Ohio St. 525 [26 N. E. Rep. 110; Lorain County. 12 L. R. A. 346; 21 Am. St. Rep. 846], is like the Medill case, and was an action brought by one who had sold wool to a certain "wool growers exchange" to recover a balance due on account of such sale from the directors of said exchange, a corporation, said directors having been elected and having undertaken to contract as directors before 10 per cent of the capital stock of the corporation had been subscribed. The defendants were held personally liable. The case does not undertake to hold that the plaintiff could not have recovered in an action to assess the stockholders' liability, though the defendants urged that such was the plaintiff's only remedy. The substance of what the court said on this subject is found on page 542: "If the doctrine of estoppel could be brought to the aid of the plaintiff against it, the defendants are not in a position to require a resort to that remedy, to relieve them from the liability they have incurred." From an examination of the Ohio cases cited and relied upon by defendants, we conclude that while the creditors of the Grafton bank in this case, might have brought their action against the individuals who actively assumed the exercise of corporate franchises without lawful authority so to do, yet the right to bring an action against the stockholders as such, to enforce their subscription and liability, relying upon the doctrine of estoppel, has never been denied in Ohio. One ruling upon evidence remains to be mentioned; the objection to the admission in evidence of the letter from Kerr to Stevens, on the ground of its being a privileged communication, is sustained. Decree may be drawn for plaintiff and cross petitioning creditors as prayed for, finding in favor of the Savings Deposit Bank, depositors who made deposits after March 10, 1902, if any, and other general creditors whose claims were not abandoned at the hearing. The claim based upon affidavit regarding O. E. Durkee is disallowed. Marvin, J., concurs. HENRY, J., dissenting. I dissent from this judgment. Not a single step in the career of this corporation was legally taken after the filing of its articles of incorporation. Its first stockholders' meeting for the election of directors was illegally convened, and both Kerr and Fuller, who are the only subscribers to the capital stock that are before the court, for the purpose of a decree against them, are said to be estopped by their subscription to deny the validity of that meeting, though neither was present. So again, the business transacted and the general power given to Mills, at Dickason v. Bank Co. the first meeting of the directors, to contract the debts which are here in issue, was unauthorized, for the stockholders had not all paid onehalf of their subscription, as required by law as a prerequisite to the beginning of business by corporations of this character. But Kerr and Fuller are again said to be estopped by their subscription to deny the validity of this action. The conclusion of the court seems to me to be possible only by piling estoppel upon estoppel in a manner that equity does not permit. I do not think a de facto debt contracted by de facto directors of a de facto corporation, elected at a de facto meeting, can be enforced in a proceeding of this kind. CHARGE TO JURY-ERROR. [Hamilton (1st) Circuit Court, February 13, 1905.] Jelke, Swing and Giffen, JJ. ADA WUEST V. RAILWAY CO. ET AL. 1. COURT MUST EXERCISE UTMOST CARE TO STATE TESTIMONY ACCURATELY TO JURY. The anxiety of juries to discover and determine the views of the presiding judge on the important issues of a case makes it imperative that any statement of the testimony in his charge should be of the utmost accuracy. 2. INACCURATE STATEMENT BY THE COURT OF CERTAIN TESTIMONY IS REVERSIBLE ERROR. It is reversible error to charge the jury that all the expert witnesses called to give their opinions as to the existence of a certain state of facts had testified in the affirmative when as a matter of fact one of the experts had testified that he could not tell whether or not such state of facts existed, although the trend of his testimony would lead to the inference that the balance of his judgment was in that direction. ERROR to Hamilton common pleas court. Theodore Horstman, for plaintiff in error. A. W. Goldsmith and Miller Outcalt, for defendant in error. JELKE, J. It seems too bad to reverse a case which has been so carefully and for the most part correctly tried below. The trial judge in overruling the motion for a new trial seems to have been impressed as we are, that the recovery is very small, probably too small, for the injury received. It was manifest, from the amount of the verdict, that the jury found that the hernia from which Ada Wuest, the plaintiff, was suffer |