28 S.W. 944 | Tex. | 1894
In this case the following question is certified for our decision:
"The Homestead Land and Improvement Company, in pursuance of an agreement among its stockholders to divide among themselves a part *371 of the land belonging to it, by its general warranty deed conveyed to J.W. Moore, one of its shareholders, a certain portion of said lands. The deed expressed a consideration of $2 and other valuable considerations, but in fact no consideration was paid nor stock cancelled. At the date of the deed the paramount title to about two-thirds of the land conveyed to Moore was and hath continuously since been in a third party, who was then and is now in actual possession thereof, and claiming it under the superior title.
"The appellant, J.B. Olsen, who by mesne conveyances holds the land under Moore, in a suit against the appellee for damages on its warranty, offered to prove, as evidence of the measure of damages, the value of the land conveyed to Moore at the time his deed was executed. Should the testimony have been admitted?"
In our opinion the testimony should not have been admitted. In legal contemplation, a corporation is an artificial person, and is distinct from its shareholders. Throughout its existence it remains the same, while the personnel of its shareholders may change at any time. A shareholder and the corporation may contract the one with the other. "The right which a shareholder in a corporation has, by reason of his ownership of shares, is a right to participate, according to the amount of his stock, in the surplus profits of the corporation on a division, and ultimately, on its dissolution, in the assets remaining after the payment of its debts." Plimpton v. Bigelow,
From the fact that a corporation has determined to release a portion of assets for division among its shareholders, no presumption arises that it intended to make good the title of the property so relinquished. Such action would result in an additional impairment of its capital stock, which fact ought to raise the contrary presumption that no such covenant was intended. After a partial division of assets the shares may pass into new hands, and to require the corporation to make good the title to the property so divided might work an injustice to such holders.
Delivered December 10, 1894.