1 Ohio Law. Abs. 676 | Oh. Super. Ct., Cinci. | 1923
Epitomized Opinion
Mrs. Stedman died August 9, 1921, owning 518 shares of Bell Telephone Co. stock, having a par value of $50 per share. The stock was registered upon the books of the Company in the name of Mrs. Stedman, residence Aurora, Ind. Her daughter, A, S. McCullough was appointed her executrix, Aug. 17, 1921. The stock remained in the name of Mrs. Stedman, Aurora, Ind., until Oct. 24, 1922, when it was transferred on the books of the Company to A. S. McCullough, Cincinnati, O. Sept. 6, 1921, directors of Tel. Co. passed a resolution providing for the increase of its capital stock and that the stock should be offered to the stock holders of record at par value pro rata to their respective holdings in proportion to one share for each ten shares held by them, providing that the stock was paid for before Jan. 4, 1922. Nov. 1, 1921, the Company mailed to all of its stock holders of record a printed notice of the adoption of the above resolution.
This notice also stated that on Dec. 15, 1921, a notice would be sent to each stock holder stating the amount in cash required from each stock holder desiring to subscribe to the increased stock. Tl^ second notice was sent out on Dec. 15, 1921, contained all the facts necessary for subscription to the new stock. The printed notices of Nov. 1 and Dee. 15 were placed in the mail addressed to Emma E. Stedman (her correct name), Aur-ora, Ind., and the envelope containing such notices had printed upon its face the return address of the Company with the request that if not delivered it be returned to the Company.
The evidence disclosed that all mail addressed to Mrs. Stedman, Aurora, Ind., was forwarded to Miss McCullough. The latter swore that she never received these notices but had received dividend checks from the Company. The Company proved that these letters had never been returned to it. No subscription was sent in for Mrs. Stedman’s share oi the stock. Jan. 9, 1922, directors of Tel. Co. ordered all the stock not subscribed for sold. A premium of $12 was made on each share. Miss McCuIIomJ claimed a pro rata share of this premium osHH ground that no notice of right to subscribe for ne-fl stock was received, and also on the ground that tha Company awarded^such premium to non-subscribinj stock holders upon an issue of stock the previous! year. In rendering judgment for the Tel. Co., tha Court held: 1
1. When increased or new stock is issued, stocl holders of record are entitled to notice thereof anc right to subscribe therefor, GC. 8699. The Com pany complied with the requirements of law as tc notifying Mrs. Stedman of this issue and opportunity to subscribe.
2. A stockholder who, after reasonable and ade cuate notice of his right to subscribe for a propor tionate share of increased stock, does not exercis< such right, thereby waives any further right to sucl stock or premiums realized by the Company iron the subsequent sale thereof.
See Harrigan v. Walker, page 669, for additiona Superior Court case.
