181 Ky. 722 | Ky. Ct. App. | 1918
Opinion of the Court by
Affirming in part and reversing in part.
The appellee, H. W. Bowman, recovered a judgment against the Jones-Hughes Goal Go. for $542.00 and costs, amounting to thirty-one dollars. The Jones-Hughes Coal Company was a corporation, which was organized under the laws of this state, for the purpose of mining and selling coal. The capital stock authorized, was $20,000.00 divided into two hundred shares of the par value of one hundred dollars, per share. The stockholders, were the appellant, W. M. Jones, the appellee, E. E. Evans, T. J. Payne and Mrs. S. E. Hughes. Jones, Evans and Payne, each subscribed for, and received thirty-three shares, of the par value of $3,300.00. Mrs. Hughes held one- share. These were the stockholders, when the debt was created for which Bowman recovered his judgment, and were the only stockholders, when the
Each of the defendants filed answers. Jones and Hughes contented themselves with denying that they had never paid for the stock owned by them, or that they, or either of them, yet owed the corporation for any of the stock held by them. Evans, in addition to denying, that he owed anything to the corporation for his stock, affirmatively alleged that he had sold and transferred his stock to Jones, or to Jones and John Moore, more than two years, before the institution of this action, and relied upon the limitation provided by section 547, Ky. Stats., as a bar to any recovery against him. He made his answer a cross-petition against Jones and John Moore, and averred' that he transferred his stock to Moore, at the instance- and direction and by the procurement of Jones, and that he did not know whether Jones had procured the transfer to Moore, for his own benefit, or for the benefit of Moore, but, by the transfer, Jones and Moore became the holders and owners of his stock, and succeeded to all the rights and liabilities' of Evans, as the prior holder of the stock, and were bound for any indebtedness of the corporation to Bowman, and prayed, that, in the event, the court should adjudge that he, Evans, was liable for the debt held by Bowman, he have a judgment over against Jones and Moore, for the amount of any judgment against him. Jones, by reply, denied any liability, in any event to Evans, or that he was the owner or holder of the stock formerly owned
(1) There is no contention, but, what, as provided by section 547, Ky. Stats., Jones is liable to Bowman, as a creditor of the corporation for tbe full amount of tbe unpaid for stock, which was subscribed for by him, and it is conceded, that tbe amount of stock subscribed for by him and issued to him was thirty-three shares of tbe par value of one hundred dollars, per share. Tbe only issue between him and Bowman, was, whether he bad paid for tbe stock. Jones did not contend, that be bad paid for tbe stock subscribed for by him, with money, but, that be bad paid for it by tbe transfer to tbe corporation of bis interest, in certain partnership property, consisting of a small stock of merchandise, mining tools and machinery, and certain mining leases.
While it has been a subject of controversy, in certain jurisdictions, as to whether a subscription to the capital stock of a corporation can be paid, otherwise, than with money, and certain courts, have held, to that effect, tbe question is settled in this state, by section 193, of tbe
Further, neither property nor services can be re-, ceived in payment for stock “ at a greater value than the market price at the time the said labor was done or property delivered.” This is in accordance with the general rule, which is, that the value of the property to be received in payment for stock, must represent to the corporation the “just, lawful and needed equivalent for the money subscribed.” 7 R. C. L. 245.
Applying the rule fixed by the Constitution and the statute to determine the essentials to a payment for stock, in a corporation, with property, it is clear, from the evidence,-that Jones’ subscription to the stock was largely unpaid—not to the extent, that it was adjudged by the circuit court, but, to an amount, in excess of Bowman’s debt. The evidence consisted of many facts and circumstances, requiring a large number of pages to record them, and it would not be profitable to recite them, here.
(2) The appellee, Evans, testifies, that, something over two years before this action was filed by Bowman, he was then owing Jones a note, the balance unpaid upon which, was then $100.00, and a note for $200.00; that he sold his stock to Jones, who directed him to transfer it to John Moore, which he did; that the consideration for the sale and transfer of his stock, was that Jones turned over to him the $100.00 note, and promised him, that if he made that much out of handling the stock, he would give him the $200.00 note, but, he after-wards paid off the $200.00 note to Jones. This seems to have been a sale of his stock, according to his own version of it, to Jones or to Moore, for a consideration agreed upon between him and Jones. There is; neither claim nor proof, that at the time of this sale, and as a part of the contract, Jones should hold Evans harmless, in his liability, either to the corporation or to its creditors as a holder of the stock, which he was dispos
The judgment in' favor of Bowman against Jones is therefore affirmed, but, the judgment in favor of Evans against Jones is reversed, and the cause remanded with directions to set aside the judgment in favor of Evans and to dismiss his counterclaim.