130 Ky. 310 | Ky. Ct. App. | 1908
Opinion of the Court by
Affirming.
The appellant company, plaintiff below, sought to recover of appellee, defendant below, $2,500 on the following subscription: “We, the undersigned, hereby subscribe for the number of shares of stock in the R. O. Evans Company, and of the kind' that is set opposite our names, and we agree to pay for the same twenty-five per cent cash, balance in one, two and three months, at one hundred dollars per share. This subscription not to be binding unless $75,000.00 or more is subscribed.” In October, 1903, the' appellee subscribed for -25 shares of stock, but the subscription does not describe the kind of stock. The R. O. Evans Company at the time appellee subscribed for the stock was a Wisconsin corporation, organized under the laws of that State. In 1904 the Wisconsin corporation was dissolved, and a Kentucky corporation, styled the “R. O. Evans Company” was organized. The articles of incorporation of the Kentucky corporation declared that it was the object and purpose of the corporation to acquire and hold all the property and
The petition alleged that more than $75,000 was subscribed for stock in the corporation before the, 3d day of November, 1903, and that on that date the appellee and others who had subscribed for stock met for the purpose of organizing the corporation, and did organize it under the laws of the State of Wisconsin, pursuant to the articles of incorporation which had been executed in January, 1903, according to the laws of that State. The answer set up several defenses, among them that the amount of subscriptions required to bind the shareholders was never subscribed; that the subscription sued on was obtained by fraud; that the R. O. Evans Company at the time the subscription was made was an existing corporation, and its dissolution' rendered invalid the subscription. At the time the subscription paper was signed by appellee, the R. O. Evans Company was in fact an existing corporation, with an authorized capital stock of $250,000, and his subscription, was really a purchase of 25 shares of stock, upon the condition that $75,000 or more should be subscribed. So that the first question to be considered is, Did the dissolution of that corporation discharge appellee from his obligation to pay for the stock? If appellee subscribed for stock in a Wisconsin corporation, and the corporation went out of existence before he was required to pay bis subscription,
Appellee’s name does not appear as one of the organizers or shareholders in the Kentucky corpora^ tion. In fact, he never attended but one meeting of the persons interested in these corporations. It seems that appellee subscribed for the stock with the understanding that the plant to be operated by the corporation should be established within the city of Owensboro, and not in the suburb called “Seven Hills;” and that, except for this understanding on his part, he would not have subscribed at all. But at the first meeting of the persons interested in the concern, held on November 3, 1903, at which appellee was present, it was disclosed that the establishment was to be conducted at Seven Hills, and not in the city of Owensboro, and also, that an existing plant at Seven Hills was to be bought by the corporation and used in eon
Assuming that appellee’s subscription was binding as an obligation upon his part to take and pay for 25 shares of the Wisconsin corporation, the question is, Can the Kentucky corporation, under the facts heretofore stated, enforce this liability? We think not. The agreement on the part of appellee was to subscribe for a specific number of shares in a Wisconsin corporation. When that corporation dissolved and its legal existence was terminated, the liability of appellee as a subscriber to its stock also ended; there being
Applying this principle to the case at hand, we find no difficulty in reaching the conclusion that material, indeed radical, changes in the subscription contract were made by the associates of the appellee in the enterprise, and that these changes were made without his consent, and that he did not waive his rights to resist the enforcement of his subscription, or do anything to estop him from setting up a defense. Wherefore the judgment of the lower court dismissing the petition of appellant is affirmed.