Lee v. Cutrer

| Miss. | Oct 15, 1909

Lead Opinion

SMith, J.,

delivered the opinion of the court.

Appellant, receiver of the Jonestown Bank, instituted suit in the court below to collect from appellee an alleged unpaid subscription to the capital stock of said Jonestown Bank,, amounting to $2,000. At the close of the evidence the court below charged the jury to find for appellee, and there was a verdict and judgment accordingly.

Appellee by his plea alleged, and the proof is, that he had paid in full his subscription to the capital stock of this bank in legal services rendered in and about the organization of the-bank, and by a sale to the bank of a steel burglar-proof safe and certain furniture and fixtures needed by the bank in the conduct of its business. His fee for legal services was $250, and ■the agreed price of the furniture and fixtures was $1,750. No ■question of setoff arises in this case; appellee’s defense being ■payment. The claim of appellant is that appellee could not pay his subscription, and thus relieve himself from further liability thereon, in anything except money.

This bank was organized under the provisions of chapter 25, Code 1892. There is no provision 'in this chapter, nor in any amendment to any section thereof, relative to the manner in which the subscriptions to the capital stock of a corporation ■shall be paid, except section 850, which simply provides that a note, obligation, or security of any kind shall not be given or accepted in payment for such capital stock. Where the law •or charter under which a corporation is organized contains no provision that the subscription to the capita^ stock thereof shall be paid in money, such subscription may be paid in property, provided same be done in good faith and the property be conveyed at a fair valuation. This principle is so well settled that a citation of authority therefor is unnecessary. Article 3 of the charter under which this bank was organized is as ■follows: “Article 3. The stock of said corporation may be paid for in cash or in monthly installments, or on check as the board of directors may from time -to time direct, and the board of directors shall have the right to provide for the issuance of stock as payments are made and may receive payments in full of all stock subscribed for from any subscriber on such terms as may be fixed by general order of the board of directors.”

The contention of appellant is that the word “cash” means “money,” and that under the provisions of this section the stock of the bank could be paid for only in money. The word ‘hash” has a number of meanings, as will appear from an examination of the authorities, and in sales is frequently used as a term meaning the opposite of credit. Black’s Dictionary.; 1 Words and Phrases, 996, 997, and authorities there cited; 6 Cyc. 700. The particular meaning to be attributed to this word must therefore be ascertained from the contest in which it is used. This section of the charter deals with the sale by the bank of its capital stock, provides the time at which payment therefor shall be made, and for the issuance thereof by the board of directors. It provides that stock “may be paid for in cash or in monthly installments,” etc., thus providing in terms for a sale either for cash or on credit; and it is manifest from this contention that the word “cash” is used, not to designate the medium of payment, hut as a term meaning the opposite of credit. The delivery of the stock under other language of the section would be conditioned upon payment therefor in full. It follows, therefore, that appellee had paid his subscription to the capital stock of this bank in full.

The judgment of the court is affirmed.

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Dissenting Opinion

Whiteield, O. J.,

delivered the following dissenting opinion:

I am fully of the opinion, after the most careful consideration, that section 3 of the charter under which this bank was organized plainly means that the subscriptions of stock to this bank should be paid, as is said, “in cash;” that is to say, either all cash at one time, or in monthly installments of cash. I do not see how there is any room for construction. The section said “cash,” and I thing it means just what it says — cash, and cash only. And it must be remembered that this particular corporation is a bank, the function of which is to deal in money; and cash is the life blood of its business.

My Brethren do not cite any cases whatever. I think I may sum the whole law up correctly by saying: Pirst, that cases may be found in which subscriptions to corporations, and it may possibly be to bank corporations, may be made 'in legal services or in property, under language not like the language in section 3 o-f the charter, but under language allowing such a construction; second, it is also possible that cases may be found where the words “in cash” are used in one part of the act or charter, and yet other words or provisions in the act may make it clear that it was not intended that payment should be only “in cash;” third, there may be some rare and exceptional cases in which, though it is provided that the payment of stock subscriptions should be in cash, nevertheless the language does-not necessarily prohibit anything but cash. But it seems tome to be perfectly clear that the whole context of section 3,. taken together, takes this case out of the category of any of the-three classes of cases just above named, and means plainly that these subscriptions to- the stock of this bank shall be made in-cash, and cash only. I differ with great reluctance from my Brethren, but I cannot, after the most protracted consideration, take any other view of the meaning of said section 3 of this charter.

In King v. Elliott, 5 Smedes & M. 428, this very question was explicitly settled, as I understand that case. In that case-the charter provided twenty per cent of the first installment of the stock should be paid in specie, or in the notes of specie-paying banks. The charter was silent as to how the residue-should be paid; but, on construction of the charter, the court held that this residue should also- be paid in specie. Chief' Justice Sharkey, speaking for the court, said: “By requiring-that the first installment should be paid in specie, it necessarily followed that all other installments should be paid in the same-way, in the absence of a special provision directing otherwise. Indeed, the payment of the capital stock in specie is an essential requisite to the existence- of a bank.” To the same effect are the following cases: In re Metropolitan Carriage Co., Law Rep. 14 Equity, 387; Crocker v. Crane, 21 Wend. (N. Y.) 211, 34 Am. Dec. 228; Haviland v. Chance, 39 Barb. (N. Y.) 283; Henry v. Railroad Co., 17 Ohio, 187; and many other authorities collected in the briefs of the learned counsel for appellant.

I close what I have to say, with a quotation from Am. & Eng. Ency. of Law (2d ed.), yol. 26, p. 839. It is there said: “Where payment in cash is expressly required, the corporation cannot receive anything else in the discharge of the liability for stock subscribed.” Let it be specially noted that this is a suit by a receiver, to recover for and on behalf of creditors of a corporation.

Eor these reasons, I dissent from the judgment of the court..