290 P. 1048 | Cal. Ct. App. | 1930
This is an action to recover money alleged to be due upon a subscription for the capital stock of the plaintiff corporation. From a judgment for plaintiff the defendant appeals. The agreement sued upon is as follows:
"For the purpose of erecting a modern building on the so called `Music Hall' property on North First Street in San Jose, California. I hereby subscribe for five shares of the capital stock of the Commercial Building Company (a corporation organized under the laws of the State of California and having a capital stock of three hundred thousand dollars divided into three thousand shares of the par value of $100. each) and I agree to pay for such shares so subscribed by me one hundred (100) dollars per share, payable as follows: On or before December 1, 1924. I understand *55 that the terms, conditions and provisions contained in the amended permit issued by the Commissioner of Corporations of the State of California, a copy of which is printed on the reverse side of this subscription are made a part hereof.
"Dated this 10th day of March, 1924.
"Name (signed) BARNEY B. LEVY."
On the reverse side appeared the amended permit of the corporation commissioner. The salient points of this permit are that the corporation was granted permission to sell 1150 shares of its capital stock in exchange for $115,000 cash, lawful money of the United States heretofore advanced by appellant. Also to sell and issue 850 shares of its capital stock at par for cash lawful money of the United States for the uses and purposes recited in the application. This amended permit was dated July 12, 1922. It is admitted that the stock involved and for the payment of which recovery was had is embraced in the 850 shares last referred to. It is admitted further that in pursuance of the subscription the stock was actually issued in the name of defendant and was, together with the subscription agreement, deposited as a pledge on a loan made to the corporation. It is further a fact that the demand on the defendant for the money claimed was accompanied with a notice that the stock had been so issued to him and that he would make the payment direct to the lender bank where he would receive his stock.
[1] Among other grounds of appeal it is the claim of the appellant that the sale, not being a sale for cash, under the terms of the amended permit, was void and that no recovery can be had on the alleged agreement of subscription. Appellant relies upon the following cases: Domenigoni v. Imperial Live StockCo.,
It may be added that the act referred to herein as the Corporate Securities Act may be found in Statutes of 1917, page 673, and acts amendatory thereof in General Laws of California, 1923, Part One, Act 3814.
Other points raised it becomes unnecessary to discuss.
The judgment is reversed.
Tyler, P.J., and Cashin, J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on September 27, 1930, and a petition by respondent to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on October 27, 1930.