216 Mass. 381 | Mass. | 1914
This is a suit brought to collect the amount of a judgment, recovered by the plaintiff in the courts .of this Com
“ . . . The history of the numerous and somewhat complicated enactments upon this branch of the law may be found in an opinion by Tenney, C. J., in Milliken v. Whitehouse, 49 Maine, 527, and it is unnecessary to enter upon any extended review of the legislation on this subject here. It is sufficient to say that, up to 1871, the liability existing by general statute (R. S., 1871, c. 46, §§ 24, 26,) had been against the ‘stockholders/ to the amount of their stock, in case of deficiency of attachable corporate property. But, by the act of 1871, c. 205, the statute in relation to the liability of stockholders in corporations was modified, and the word ‘stockholders’which had existed in previous statutes was omitted, and the remedy therein provided now exists only against persons ‘who have subscribed for or agreed to take stock in said corporation and have not paid for the same, ’ etc.”
“The defendant having sold and transferred all the original stock
“But it is claimed, on the part of the plaintiff, that inasmuch as the defendant was a stockholder in the corporation and knew the circumstances under which the stock was originally issued by the corporation, he was a purchaser with notice, and therefore liable on the thousand shares purchased in the market, as well as on the four hundred shares of original stock.
“We do not think this doctrine can properly be extended to the facts existing in this case. The authorities relied on in support of this proposition will be found to differ essentially from the case at bar, and to relate to cases influenced by some peculiar statute provision differing essentially from that of our own State, or to the cases where the certificates for stock were assessable upon their face or by the charter or by-laws of the company, and payable by instalments. In such case the stock, either upon its face, or by the charter or by-laws being liable to assessments, and transferred while the company is solvent, the transferee is substituted for the original subscriber or holder of the stock as to the rights of the company in demanding and collecting assessments. Upton v. Tribilcock, 91 U. S. 45. Pullman v. Upton, 96 U. S. 328.”
To the same effect see Morgan v. Howland, 89 Maine, 484, and Maine Trust & Banking Co. v. Southern Loan & Trust Co. 92 Maine, 444, 451.
Applying this statement of the law to the facts in the case at bar, it is manifest that the plaintiff fails to make out a case. None of the defendants had any dealings directly with the Maine corporation. That corporation was organized by one McCormick for the purpose of erecting a building in which to hold exhibitions of the shoe and leather industries of New England, and exhibitions of other sorts. McCormick is found by the master to have been a man of enterprise and executive ability, who devoted much time to the perfecting of plans for the construction of a suitable building, securing options upon land upon which to erect such a building, and had plans drawn showing its spaces and general adaptability for exhibition uses. His acquaintance was large among those engaged in the shoe and leather trade, and he secured a considerable number of contracts aggregating about $90,000 for the use of space in the proposed building. Thereafter, the entire capital stock of the corporation, being $100,000 preferred stock and $400,000 of common stock, was issued to McCormick in payment for services rendered and to be rendered, and for assignments of all contracts for space in the exhibition building, which property and services the board of directors by their vote adjudged and declared to be of the fair value of $500,000. At a later time the stock of the corporation was increased by the issuance of $300,000 additional preferred stock to one Smith. The master finds that, although the consideration for which these two issues of stock were made was very much less than the par value of the stock, yet the directors acted in good faith and had no fraudulent intent, and honestly believed that the property purchased and the services rendered and to be rendered by McCormick and Smith were essential to the prosperity of the corporation, of whose ultimate success they appeared to be assured. These issues of stock were made before and during the construction of the building, and before it was completed and the exhibition opened. The evidence is not
There is a special claim against the defendant Gaunt arising out of these facts: Shortly before the fair was opened McCormick represented to Gaunt that he was in great need of money, and that, unless he could secure $10,000, he would not be able to open the fair on time. He persuaded Gaunt to purchase one thousand shares of his common stock for $10,000, but only by virtue of an agreement entered into between Gaunt and McCormick, by which it was stipulated that the $10,000 should be wholly spent by McCormick in furthering the project of the fair, McCormick agreeing that he should vote his remaining common stock so that the salaries of the officers of the corporation should not exceed a specified maximum, with further terms touching the sale of the common stock held by each in the event of death or desire to dispose of the same. The corporation was not a party to this agree
In view of all the facts, it was an immaterial circumstance that one of the original certificates was not first issued to McCormick and a new one substituted each time a sale of stock was made. Upon the findings of the master the stock had been legally issued, and the failure on the part of the corporation to put forth the certificate did not impair the rights of the stockholder. The fact of being a stockholder existed independent of the certificate. Old Dominion Copper Mining & Smelting Co. v. Bigelow, 203 Mass. 159, 198. Kennedy v. Hodges, 215 Mass. 112, 115.
It becomes unnecessary to consider the other questions raised upon the report.
Bill dismissed with costs.