Thus, receiving dividends, or any of the benefits of membership,' voting, or signing a proxy to vote at a meeting of the company, paying calls, in connection with other circumstances, such as an informal or incomplete contract of subscription or of transfer, have been severally held to raise an the directors had the power of allotting to applicants either shares on which their membership would be completed by registration, or scrip certificates entitling the holder to take up his membership. An applicant was informed that he might have scrip certificates. He asked for them but they were never given him. Some time afterwards his name was inserted in the register of members. Thirteen months afterwards an order was made to wind up the company, and it was held that his name should be kept upon the list of contributories. Cf. McAdams v. Boyer, (1889) 37 Fed. Rep. 73, as to what constitutes membership. 1 North of England Banking Co., 22 L. J. Ch. 194; s. c. 1 D. M. & G. 576; Northumberland & D. District Banking Co., ex parte Dixon's Executors, 1 Dr. & Sm. 225; Hull Flax Co. v. Wellesley, 5 Hurl. & N. 38; Phoenix Life Assurance Co., Hare's Case, 2 J. & H. 229; s. c. 31 L. J. Ch. 504. In In re North of England Joint Stock Banking Co., ex parte Barnard, 5 DeG. & Sm. 283, the purchaser of shares who had taken no transfer, but had received a certificate from the company, and had received dividends for three years, was made a contributory. The owner of several shares in a steam packet company transferred two of them to his son by a document which was not executed by the son, nor entered in the company's books, nor otherwise perfected according to the provision of the deed of con stitution; the son was not aware of the transfer. By a rule of the company, every proprietor was always entitled to a free passage by the company's vessels, and the son on several occasions obtained certificates from the company's office that he was a proprietor, which entitled him to a free passage, and he also signed each certificate and the company's books in respect of these certificates as proprietor, and obtained a free passage; but he never received dividends nor did any other act as proprietor. The son was made a contributory. St. George's Steam Packet Co., Maguire's Case, 3 DeG. & Sm. 31. But where dividends had been paid to an executor in violation of a provision in the deed of settlement of a company that executors should not receive dividends till they had made themselves members, he was not a contributory. St. George's Steam Packet Co., ex parte Doyle, 2 Hall & T. 221. 2 Griswold v. Seligman, 72 Mo. 110. 3 Sheffield R. Co. v. Woodstock, 7 Mees. & W. 574; Ex parte Sanger, 18 L. T. (N. S.) 67. 4 Cheltenham Ry. Co. v. Daniel, 2 Q. B. 281; s. c. 6 Jur. 577. But in London Marine Insurance Association, ex parte Smith, 17 W. R. 491; S. c. L. R. 4 Ch. 611, a person who had agreed in writing to become a member of a marine insurance associa tion, but had never received a stamp policy, notwithstanding that he had made a claim for damages to his ship and had paid contributions, was not made a contributory. estoppel.1 Even though a person be induced by fraud to purchase shares of stock in a corporation, he can not avoid his purchase if, after becoming aware of the fraud, he acts as a shareholder or derives a benefit from his shares.2 § 68. Of membership in a representative capacity.— To make one answerable as a stockholder to creditors of a corporation, he must be shown to be a stockholder as between himself and the company. If he hold it merely as collateral 3 1 Ex parte Gordon, 3 DeG. & Sm. 249. In Hare's Case, 2 J. & H. 229; S. c. 31 L. J. Ch. 504, the marriage settlement of a shareholder recited that shares had been transferred to trustees and declared trusts, although as a matter of fact the shares were not transferred; but the trustees having been placed on the register of shareholders, and having received dividends, they were made contributories upon the winding up of the company. Cf. Taylor v. Hughes, 2 Jones & L. 24; In re General Floating Dock Co., 15 L. T. N. S. 526; Ward v. South-Eastern Ry. Co., 29 L. J. Q. B. 117; Hare v. London & N. W. Ry. Co., John. 722; Ex parte Barrett, 33 L. J. Ch. 617; Bloxham v. Metropolitan Cab Co., 12 Week. Rep. 736; Shelford on Joint Stock Companies, 122. with approval in Griswold v. Selig man, 72 Mo. 110, and in Union Savings Assoc. z. Seligman, 92 Mo. 635; s. c. 1 Am. St. Rep. 776, 779. "The cases cited in the opinion delivered by this court, in the case of Griswold v. Seligman, 72 Mo. 110, are all cases in which the facts were such that the persons sought to be charged as stockholders were held to be stockholders as betwixt themselves and the corporation. In many of the cases suits were instituted by the corporation against individuals alleging that they were, and seeking to charge them as, stockholders. In none of these cases cited in that opinion was there, as in this, a special agreement showing exactly what relation the parties alleged to be stockholders bore to the corporation. The cases of Upton v. Triblecock, 91 U. S. 45; Sanger v. Upton, 91 U. S. 56; and Webster v. Upton, 91 U. S. 65, are all cases in which 3 Union Savings Assoc. v. Selig- the corporation, or its assignees, asman, 92 Mo. 635; s. c. 1 Am. St. serted the liability of the defendant Rep. 776. "If a person is a mem- as a stockholder; and no cases cited ber of a company, as between him- in the opinion delivered in Griswold self and the company, then, whether v. Seligman, 72 Mo. 110, in which he is so by reason of his having be- one was held liable as a stockholder, come a member by complying with at the suit of a creditor of the corpoall requisite formalities, or by reason ration, who was not, as between himof the doctrine of estoppel, he ought self and the corporation, held to be a upon principle to be deemed a mem- stockholder." Union Savings Assoc. ber to all intents and purposes." v. Seligman, 92 Mo. 635; s. c. 1 Am. Lindley on Partnership, 12, quoted St. Rep. 776, 778, 779. 2 City Bank v. Bartlett, (1885) 71 Ga. 797. But see Ex parte Jones, 17 Week. Rep. 983. security, or in a representative capacity, he is not to be held personally liable." § 69. Whether a pledgee of shares is a member of the company. Voting as a stockholder at an election will not estop one from showing in an action against him by the creditors of the corporation, that he held the stock merely as collateral security for a loan. It has been argued that there is a distinction in this respect between the position of one receiving stock in pledge from a shareholder and one who receives it from the company itself as security for money which it has borrowed; that it is against public policy to permit a corporation to place its unissued stock to an amount sufficient to control the corporate affairs, in the hands of a person who is in no event to incur any responsibility as a stockholder to the creditors of the company; and that there should always be 1 Union Savings Assoc. v. Seligman, 92 Mo. 635; s. c. 1 Am. St. Rep. 776. Vide infra, § 69. 2 Where the deed of settlement of a company required certain formalities before legatees should become shareholders, and the name of the husband of a legatee was written in pencil in the register of shareholders, but subsequently dividends were paid to the executor, he was put on the list of contributories in his representative character. In re Vale of Neath Brewery Co. v. Keene's Executors' Case, 3 D. M. & G. 272; s. c. 22 L. J. Ch. 365. A testatrix, who held shares in a company, by her will gave her residuary estate, which included them, to A. B., whom she appointed executrix. The deed of settlement of the company provided that executory legatees should become shareholders and receive dividends only upon executing a deed making themselves personally liable. A. B. did not execute any deed. She received six dividends, for the first four of which she signed receipts as executrix. The company, without the knowledge of A. B., returned her name to the stamp office as a shareholder, and about four years after the death of the testatrix entered it on the dividend list in lieu of that of the testatrix. Upon the company being wound up she was made a contributory only in her representative character. In re Herefordshire Banking Co., ex parte Bulmer, 33 L. J. Ch. 609; s. c. 33 Beav. 438. The deed of settlement prescribed certain preliminaries which were to be observed for the purpose of making the husband of a female shareholder a proprietor in the company, and it was held that a husband who had not complied with these requirements was liable in respect of losses incurred during the coverture only. In re Vale of Neath Brewery Co., ex parte Kluht, 3 DeG. & Sm. 210; s. c. 19 L. J. Ch. 385; but Shelford (Joint Stock Companies, 123,) questions the authority of this case. 3 Union Savings Assoc. v. Selig. man, 92 Mo. 635, per Henry, J., Sherwood, J., dissenting; s. c. 1 Am. St. Rep. 776, annotated. some person or estate to respond for the stock in the event of corporate insolvency. The distinction, however, has been declared unsound, and it is held to be immaterial so far as the pledgee's liability is concerned whether the stock was hypothecated by a shareholder or by the company itself." In a proceeding by a judgment creditor of a corporation, seeking to hold defendant liable as a stockholder, it appeared that the firm of which defendant was a member acted as the financial agents of the company for the purpose of negotiating its bonds, agreeing to make certain advances in cash to enable the company to complete its road, and that in accordance with a resolution of the board of directors, the majority of the stock was issued to them to hold in trust for a year. By this means the firm controlled the management of the company, and continued to vote on the stock after the expiration of the year, and it was held, that the defendant was liable and not protected by Wag. Mo. St. 301, § 9, providing that no executor, administrator, guardian, trustee, or pledgee, shall be liable as stockholder, but that the estate represented by such person- - or in case of the pledgee, the pledgor-shall be liable. Fisher v. Seligman, 75 Mo. 13; Norton, J., dissenting. Cf. Bray v. Seligman, 75 Mo. 31. "I am still of opinion that section 9, article 11, Wagner's Statutes, page 301, is not applicable to this case. That section provides that the person holding stock as collateral security shall not be liable as a stockholder, 'but the person pledging such stock shall be considered as holding the same, and shall be liable as a stockholder accordingly.' This statute, I think, clearly applies to stock which has been regularly issued by the company, and which has been pledged by the holder thereof; for I can not imagine that the legislature ever contemplated that the corporation itself should be held liable as a stockholder' of its unissued stock. Undoubtedly if all the stockholders of a corporation consent, the unissued stock may be sold for a nominal consideration, or be given away to any one they may select as the object of their bounty, and the person receiving such stock could not be made liable to the corporation for the full value thereof, but such person might nevertheless be held liable by creditors of the corporation for such proportion of the value thereof as remained unpaid. I conceive it to be against public policy to permit a corporation to puts its unissued stock, to an amount sufficient to control the affairs of the corporation, in the hands of a person who is in no event to incur any responsibility as a stockholder to creditors by holding and voting the same, and thus managing and controlling the affairs of the corporation." Dissenting opinion of Hough, C. J., in Union Savings Assoc. v. Seligman, 92 Mo. 635; s. c. 1 Am. St. Rep. 776, 782, 783. § 70. Of the quasi-trust relation between members.— While it cannot be laid down as a general rule that the members of a corporation occupy a fiduciary relation toward one another which forbids all transactions by which any of them may gain an advantage over others, yet there are circum granted that stock can not be received as collateral security from the corporation itself, and still belong to the corporation; and yet we know that such transactions are very common in the business of this country. . . The words of the statute, (Wag. Mo. Stat. 301, § 9) are positive, and relate to all holders of stock for collateral security. They are as follows: 'No person holding stock in any such company as executor, administrator, guardian, or trustee, and no person holding such stocks as collateral security, shall be personally subject to any liability as stockholder of such company.' .. The reason of this law is derived from the gross injustice of making a person liable as the owner of stock when he only holds it in trust or by way of security, and from the inexpediency of putting a clog upon this species of property which will have the effect of making it unavailable to the owner, or of deterring prudent and responsible men from accepting positions when any such property is concerned. It seems to us that not only the law, but the reason upon which it is founded, applies to the holders of stock as collateral security, whether received from an individual or from the corporation itself. It is argued, however, that the remaining words are repugnant to this view. They are as follows: 'But the person pledging such stock shall be considered as holding the same, and shall be liable as a stockholder accordingly; and the estates and funds in the hands of such ex ecutor, administrator, guardian, or trustee shall be liable in like manner and to the same extent as the testator or intestate, or the ward or person interested in such fund would have been if he had been living and competent to act, and held the stock in his own name.' . The argument is, that these words imply that there must always be some person or estate to respond for the stock, or else the exemption can not take effect. . . The obvious answer to this is, that the clause fixes the liability upon the pledgor as a stockholder, where there is a pledgor who can be made liable in that character. When the corporation, however, pledges its own stock as collateral security, it can not be proceeded against as a stockholder eo nomine, because it is primarily liable, before all stockholders, for all its debts. In such a case the clause last quoted would not strictly apply to it, but the holder of its stock as collateral security would be both within the letter and the spirit of the first clause. If the stock had not been issued as collateral security it would not have been issued at all; it would not have been in existence. Would the creditors have been any better off in such case? They are better off by the issue of the stock as collateral, because the general assets of the company have received the benefits of the moneys obtained by means of the pledge." 1 Gillett v. Bowen, (1885) 23 Fed. Rep. 625. In Appeal of Schaaber, (Pa. 1889) 17 Atlan. Rep. 209, one F., who was the principal stockholder |