13 Mo. App. 280 | Mo. Ct. App. | 1883
delivered the opinion of the court.
This is a motion by a judgment creditor of the Gravois Railroad Company, for execution against the defendant as a stockholder in the corporation. The facts touching the defendant’s relations with the company are the same with those in the case of E. C. Smith, Assignee, etc., v. C. H. Peck, wherein the opinion of this court is filed simultaneously with this. The two causes were tried together in the circuit court, and all the evidence introduced was considered as applicable to both cases. In the present case, the entry of judgment recites that, “the court having awarded execution against said Charles H. Peck for $2,500, doth order that the motion for execution herein be overruled.” It is appareut from this recital that the court found, as matter of fact, that the defendant had effectually surrendered to the company two hundred and fifty of the three hundred- shares held by him in 1873 ; so that, when these executions were issued, he owned no more stock than was made the basis of his liability on the motion for execu
Much of the argument for the plaintiff appears to be based upon an idea that, when the defendant became one of the five corporators, by their joint purchase of the franchise, he thereby became the holder of one-fifth part of the authorized capital stock of the corporation. Such an idea has no foundation whatever. If each of -five corporators were the individual holder of one-fifth of the capital stock, there would be none left for the corporation to issue to subscribers and purchasers. If a purchase of the franchise involves a purchase of the stock, then the stock, so acquired for valuable consideration, must necessarily be “paid-up stock,” and therefore not a subject for any personal responsibility in the holder.
Such a view would give entire sanction to the proposition which some of the directors of this company appear to have entertained, that they “hada right” to issue certificates of stock to themselves, without paying or intending to pay anything for it, and afterwards to sell and transfer the same, on individual account, to third parties, as “ paid-up stock.” The corporators, as such, holding only the franchise, own no stock. The stock is in embryo. The corporators may bring it into life and form, by issuing certificates, or other evidences of the investment, to such persons as may properly contribute to the fund, which is thenceforth to be known as the “capital stock,” to furnish material for the operations of the company, and to bo preserved in trust for the benefit of its creditors.
We have carefully examined all the authorities here cited for the plaintiff, and find in them no parallel with the present case, to the effect that the defendant’s transfer of his stock to the corporation was void. The fundamental truths,
There is no claim of any surplus liability remaining in the defendant, above the amount of the Smith judgment, since it is agreed by counsel, and attested by their stipulation hied in that case, that the court in fact found the defendant to be the holder of only fifty shares, instead of one hundred, and that the clerical entry is erroneous. The judgment is affirmed.