No. 4,770 | Mont. | Jun 19, 1922
prepared the opinion for the court.
In this action plaintiff seeks to recover of defendant $1,000, the par value of ten shares of plaintiff’s capital stock, upon a subscription contract therefor.
The amended complaint upon which the second trial was had alleges that the plaintiff was duly organized in pursuance of the terms of the subscription agreement and succeeded to all the rights of the signers to the amounts subscribed; that all the conditions of the subscription agreement have been fulfilled, with the exception that the full amount of capital stock set forth therein has not been subscribed; that with full knowledge, both before and after the organization of the corporation, “that the said proposed capital stock was not fully subscribed, and. with full knowledge of his rights in the premises by reason of such fact, defendant consented to the organization of said corporation and to the commencement of business by it, participated in the organization thereof, and acted as a director thereof; that plaintiff has issued its stock to its subscribers, including the defendant herein, and has delivered to said defendant ten shares of its capital stock in accordance with his said subscription contract; and that defendant, with full knowledge, as above set forth, accepted the same, and promised to pay to plaintiff his said subscription therefor.” The answer, either by general or special denial, puts in issue the allegations of the complaint above quoted, and alleges that before the corporation was organized, defendant became convinced that the full amount of the capital stock could not be obtained and revoked his subscription. As a third and special defense, defendant-alleges that contrary to the terms of the subscription agreement, and without his knowledge or consent, certain other subscribers, by secret agreement made at the time they subscribed, were permitted by the promoters to pay their sub
1. Defendant insists that the general demurrer to the com- plaint, and his objection to the introduction of evidence in its support, should have been sustained, his principal contention in that regard being that according to the former opinion in this cause, there should be a specific allegation of the basis or sources of defendant’s knowledge that all of the stock had not been subscribed. There is no merit in the point raised. Only the ultimate facts, and not the evidence to support those facts, should be pleaded.
2. Defendant also contends that his motion for a directed verdict should have been sustained for the reason that there was no sufficient showing that the defendant, with knowledge that the full amount of stock had not been subscribed and of his rights in the premises, waived his right to withdraw, and thereby became liable for his subscription.
The authorities are not agreed as to what acts will constitute a waiver in cases such as this, but it seems to be held generally that acts by the subscriber which evince a willingness that the corporation should commence business with no more stock than that already subscribed will amount to a waiver. In Masonic Temple Assn. v. Channel, 43 Minn. 353" court="Minn." date_filed="1890-06-02" href="https://app.midpage.ai/document/masonic-temple-assn-v-channell-7966507?utm_source=webapp" opinion_id="7966507">43 Minn. 353, 45 N. W. 716, the court said: “The safer rule in such a case is that, if his acts are of such a character that either the corporation or subscribers may have been induced by them to act, and will be prejudiced if he be permitted to withdraw, he shall be held to have waived, or to be estopped to assert, the defense. It is immaterial which word is used, except, perhaps, for the sake of strict verbal accuracy. There are a great many decisions
The testimony of plaintiff’s witnesses, if taken as true, shows that defendant was one of the active promoters of the corporation from its inception; that he induced others to subscribe for stock and agreed with the other subscribers to proceed with its formal organization and begin business, without waiting for all the stock to be subscribed, was elected a director, and agreed to attend the first meeting of directors; that at the hour of meeting he announced that he was too busy to attend and signed a written consent that the meeting be held; that he was fully aware that subscriptions had not been obtained for the full amount of stock; that after plaintiff began the transaction of business, defendant’s stock certificate was delivered to him and he agreed to pay for it but pleaded for time. While this testimony is largely contradicted by the defendant, if considered in the light most favorable to plaintiff, it presented a question for the jury as to whether defendant had waived his right to insist on a full subscription, and the motion for a directed verdict was properly denied1.
3. Defendant insists that the admission of evidence tending to prove an agreement among the subscribers, including the defendant, to organize and proceed to do business before the full amount of stock was subscribed, was error, and that it was proof of a new agreement entirely differing from the one sued -on and constituted a variance. This evidence was competent as bearing on the question of whether defendant waived any of his rights under the contract sued on. It does not show that a new subscription contract was entered into, or that the attempt to secure full subscription was ever abandoned, and does not tend in any way to constitute a variance.
4. It is also contended that the court erred in denying de fendant’s motion for a continuance after plaintiff had been permitted to amend its reply at the close of the evidence. There was no proper showing of surprise or that defendant was in any way prejudiced, and therefore the motion was properly denied.
5. The court in its instructions correctly withdrew from the consideration of the jury defendant’s third special defense. Secret agreements by the promoters of a corporation, permitting some of the subscribers to pay for their stock in labor or property, contrary to their written agreement to pay cash, are not binding on the corporation, and in an appropriate action it may enforce the payment of such subscriptions in cash. Hence it is no defense to this action that some of the subscribers were permitted to pay in labor or property.
There are many specifications of error on the giving and refusal to give and modification of offered instructions. The instructions given correctly and amply covered the issues presented by the pleadings and the evidence, and no useful purpose would be served in discussing them.
After a careful consideration of defendant’s twenty-one assignments, we have been unable to discover any prejudicial error in the record, and we therefore recommend that the judgment and order be affirmed.
Per Curiam: For the reasons given in the foregoing opinion, the judgment and order appealed from are affirmed.
Affirmed.