20 Or. 177 | Or. | 1890
— The facts in this case are these: ■ On August 11.1888, plaintiff was duly incorporated with a capital stock of $75,000, divided into 750 shares of one hundred dollars each, for the purpose of constructing, owning and operating a railroad from Astoria to Tillamook bay, with its principal office at Astoria. On August 13th stock-books were duly opened to receive subscriptions to its capital stock, when defendant and other persons subscribed to the following contract in writing in said book, to wit: “Subscriptions to the capital stock of the Astoria & South Coast Railway Company,incorporated August 11,1888, at Astoria, Oregon; capital stock, $75,000; amount of each share, $100.
“We, the undersigned, hereby subscribe to the capital stock of the Astoria & South Coast Railway Co. the number of shares set opposite our respective names by us subscribed, and we agree to pay for each share the sum of one hundred dollars at the time or times and in the manner assessed and ordered by the board of directors of said corporation hereafter.”
That when defendant subscribed said contract he set opposite his name ten shares and the sum of one thousand dollars as being the sum he agreed to pay therefor. On August 18th more than one-half but not all of the capital stock of plaintiff having been subscribed, at a meeting of the stockholders duly called, plaintiff was duly organized and a board of directors elected, who immediately qualified and entered upon the discharge of their duties. On September 24,1888, an assessment of 25 per cent; on November 8.1888, an assessment of 10 per cent, and on February 25, 1889, an assessment of 65 per cent, was duly levied on the capital stock of the plaintiff. The defendant was notified of each of said assessments and payment thereof demanded and paid the assessments of September 25 and November 3, 1888, and $150 on that of February 25,1889, and no more; that in July, 1889, said stock-book of plaintiff still being open to receive subscriptions to its capital stock, defendant again subscribed for ten shares of the par value of one
The defendant claims that before plaintiff can maintain this action against him it must aver and prove that its full capital stock has been subscribed; that it was an implied part of his contract of subscription that the contract was to be binding and enforceable against him only after the full seventy-five thousand dollars, the amount of plaintiff’s capital stock, had been subscribed, and that until the stock was all subscribed the corporation could do no business except to elect directors. There are many authorities to the effect, and we suppose it will be generally conceded, that unless otherwise provided by the act of the legislature authorizing the corporation to be created, or by the charter of the company, or by the contract of subscription, all the capital stock of the proposed corporation must be subscribed for before any stockholder can be compelled to pay any assessment on his stock or before the company can enter upon any of its corporate business, but the act of incorpora, tion may of course vary this rule. (See sections 170 and 177 of Cook’s Stock and Stockholders, and notes, where the authorities seem to be fully collated.) Plaintiff was incorporated under the general incorporation act of this state, which among other things provides “that it shall be lawful in the organization of any corporation to elect a board of directors as soon as one-half of the capital stock has been subscribed.” (2 Hill’s Code, § 3222.) The question of defendant’s liability must be determined by the construction to be given to this provision of the Code in connection with the remaining provision of the general incorporation act. The question now before us was considered by this court in
It is also claimed that the issuance and tender to defendant of certificates for the shares of stock subscribed for by
The court in its opinion, however, recognizes the doctrine we have announced as applicable to ordinary subscriptions, and says: “Such a subscription gives to the subscriber an interest in the corporation and the right to take part in organizing it, and this interest and right are a sufficient consideration to support his promise.”
Judgment of the court below is therefore affirmed.