153 Ky. 775 | Ky. Ct. App. | 1913
Opinion of the Court by
Reversing.
In the year 1890 Judge Vincent Boreing owned one thousand acres of land near Pineville. He and some of his associates conceived the idea of organizing a corporation which should take over this land; lay out an addition to the town of Pineville upon it, and sell it out, so far as it was suitable, for town purposes, holding the remainder for mining and other purposes. Thereupon, on February 15, 1890, they organized a corporation known as the Bell County Coke and Improvement Company, which was incorporated under the general statutes of the State then in force. The 4th, 5th, and 7th sections of the articles of incorporation are as follows:
“The authorized capital stock of the corporation shall be four hundred thousand dollars ($400,000), to be issued in shares of one hundred dollars ($100) each, of which capital stock two hundred and seventy-five thousand dollars ($275,000) shall be fully paid up by the conveyance to this corporation of about one thousand acres of mineral and bottom lands adjoining West Pineville, in Bell County, Kentucky, and when said lands are conveyed to and accepted by this corporation the said amount of stock shall be issued fully paid up and non-assessable for any purpose. The remaining capital stock as hereby authorized may be issued- at such times and upon such conditions as the Board of Directors may order, and the corporation may sell all or any part of its*777 said remaining capital stock at a price not less than twenty-five dollars ($25) per share, and when issued the stock shall also he fully paid up and non-assessable, and no liability shall attach to any stockholder by reason of his stock having been sold or purchased at less than its par value.
“5. The affairs of the corporation shall be conducted by a board of seven directors, who shall be elected annually by the stockholders, upon the second Tuesday of each January, and hold their offices for one year, or until their successors are elected and qualified. The board of directors shall elect from its members a presi-. dent, vice-president, and a secretary and treasurer, and may appoint and supply such other officers and agents as may be or become necessary for the transaction of the business of the corporation. The board of directors for the ensuing year, ending on the second Tuesday in January, 1891, shall be composed of the following named incorporators: Vincent Boreing, J. T. Richey, M. J. Moss, J. A. Craft, W. G. Welch, J. S. Hughes, and R. C. Ford.
”7. The greatest amount of indebtedness or liability to which the corporation may subject itself shall be twenty-five thousand dollars ($25,000).”
On the same day, at a meeting of the board of directors, the following action was taken:
“The following officers elected: President, V. Boreing; Vice-President, J. T. Richey; Secretary and Treasurer, R. C. Ford.
“The president appointed a committee of one to employ a competent civil engineer to lay off town lots on the property belonging to the said corporation and to have maps of same published. The said town to be called ‘Mt. Vincent Addition.’ ”
“The secretary ordered to make call for fifty percentum of the capital stock subscribed, to be paid by 25th February, 1890.”
At the next meeting of the board of directors, on February 28, this action was taken:
“On motion.W. G-. Welch was appointed acting secretary.
“On motion it was ordered that 95 per cent of the proceeds of the first call for fifty per cent of the stock subscription be paid by the treasurer to Vincent Boreing, upon the purchase from him of one thousand acres of*778 land near Pineville, as soon as the committee, above appointed, are satisfied of the title to said lands, five per cent being retained for expense of books, plats, maps, etc.”
After this, from time to time, there were meetings of the board looking to the selling of lots and making other arrangements to that end. At a meeting of the board of directors on March 25, 1890, this action was taken:
“On motion it is ordered that the treasurer be directed to pay over to Vincent Boreing all money received by him to an amount not to exceed $55,000, this being for purchase price of 1,000 acres of land to be deeded by said Boreing to the company, the treasurer retaining 5 per cent amount received by him for incidental expenses.”
At a meeting of the board of directors on May 3,1890, there being present three directors besides Boreing, who was the president, this action was taken.-
“Motion J. A. Craft, it was ordered by said board that the company accept from Vincent Boreing a deed for the town property and that said Boreing have further time to make deed to the rest of the property.”
At a meeting of the stockholders held on January 13, 1891, Vincent Boreing held 750 shares of stock, and at a meeting of the stockholders on January 12, 1892, he held 1050 shares. At a meeting of the stockholders on November 22,1902, this action was taken:
“V. Boreing in settlement of controversy with McGuire of Louisville, Ky., (tobacconist) sold to said McGuire, eighty-three (83) acres that he (Boreing) otherwise intended to convey to this (the Bell County Coke & Improvement Co.) as part of the one thousand acres sold them by title bond of date. It is ordered, on motion of J'. S. Hocker that said Boreing’s- proposition to let company have 83 acres of land owned by him adjoining the land held by this company, in lieu of said' 83 acres heretofore transferred to said McGuire, be and .same is accepted. ’ ’
At a meeting of the stockholders on January 13, 1903, at which Boreing held 1111 shares of stock, the following action was taken by the stockholders:
“On a careful examination of the records and books ■ of this company, it appears that 1345 shares of stock of •' this company have been fully paid and 794 shares of stock of the company partially paid. The amount paid -in the last named 794 shares being 7652.5, and it further*779 appearing that 2139 shares of stock have been fully and partially paid, it is therefore ordered in accordance with contract made with Y. Boreing that when he makes to this company (The Bell Co. Coke and Improvement Co.) a deed of general warranty for the one thousand acres of land referred to in his title bond and in these minutes, the said company shall issue to him (Y. Boreing) stock in said company to the amount of 611 shares. ’ ’
Upon adjournment of that stockholders’ meeting, there was a meeting of the directors, at which Boreing and three other directors, were present, and at this meeting of the directors the following action was taken:
“Vincent Boreing, Pres., executes and tenders a deed of conveyance to the Bell County Coke and Improvement Co. for the one thousand acres of land described in the title bond executed by him on March 25th,, 1890, as amended by a ratification of the stockholders on the 22nd day of November, 1902, on page 24 of the minute book of the Bell County Coke and Improvement Company, as per a calculation made by the stockholders of said company on said date (Nov. 22, 1902), which shows a balance of purchase money due said V. Boreing of fifteen thousand eight hundred and eighty ($15,880) dollars, with interest from 25th day of March, 1890, at six per cent per annum until paid, which is a lien upon the property described and conveyed in the deed aforesaid, and said deed is accepted by the board of directors of said company, subject to a surcharge and full settlement hereafter to be made between the said Boreing and the company aforesaid.”
The two deeds referred to in the above orders made by the board of directors were duly recorded, the first on, May 6, 1890, and the other on January 17, 1903. Judge Boreing was president of the company from the time it was organized until his death in September, 1903. This suit was filed on June 8, 1907, by J. E. Childers, J. F. Peyton and J. B. Gilkerson, suing for themselves and other stockholders in the company, charging in effect that John R. Boreing is the executor of his father, Vincent Boreing, and since his father’s death had been the president of the company; that he holds a part of the stock which his father held and that a majority of the other directors hold a part of this stock, the majority of the directors being interested in the estate of Judge Boreing, and so unwilling to take any action against the estate. They alleged that the two deeds above referred to were
Under the articles of incorporation it was provided that “when said lands are conveyed to and accepted by this corporation the said amount of stock shall be issued fully paid up and non-assessable for any purpose.” By the action of the directors on March 25, 1890, the treas
Judgment reversed and cause remanded for further proceedings consistent herewith.