143 Iowa 13 | Iowa | 1909
In the year 1901 certain persons, living in and near the town of Lost Nation, undertook to organize a company or association for the purpose of establishing and operating a creamery. To that end a paper was prepared in the following form: “We the undersigned hereby agreed to give our notes for the amount set opposite our names for the purpose of building and equipping a creamery in or near Lost Nation, Iowa. This agreement to be null and void unless four thousand dollars are subscribed.” Whether this subscription was ever completed in accordance with its terms is the principal question of fact here in controversy. The scheme seems to have been for each individual subscriber to give his individual note for the amount of his subscription, without interest, for a period of five years, the paper thus accumulated to be used as a basis of credit for a corporation, which was to
I. assessmentof stockholders: equitable jurisdiction. I. Error is alleged upon the denial of the defendant’s motion for a transfer of the cause to the law calendar. The exception, can not be sustained. If the action were brought by a single creditor of the corporation to enforce the statutory liability • . _ of an individual stockholder, as was the case in Water Power Company v. Hopkins, 79 Iowa, 653, and Bayliss v. Swift, 40 Iowa, 648, it may well be that an action at law would be sustained. Here, however, the suit is in effect a proceeding to wind up the affairs of the corporation, to which end it is necessary to ascertain what, if any, corporate assets have come into the hands of the assignee, whether the same have been applied to the payment of corporate debts, the amount of such indebtedness remaining unprovided for, and to what extent, if any, an assessment is required upon the unpaid stock subscription to meet such demands. That this is a subject of equitable jurisdiction is too clear to require argument or discussion. 6 Pomeroy’s Equity Jurisprudence, section 910. If the liability of the delinquent stockholders were absolute, and each was liable upon the face
But counsel contend that in any event, the subscription or agreement not being in writing, it did not satisfy the condition of the written subscriptions. The fair and reasonable interpretation to be put upon said condition is that none of the subscribers were to be bound by said agreement until all the valid and enforceable agreements of like character should aggregate $1,000. It had no reference to the manner in which the subscriptions were to be made, but to their aggregate amount and Aralidity. If, then, the oral agreement of Hohn, Hill and Busch to subscribe or take stock to the amount required to perfect the organization and to validate all the subscriptions was a legal and binding obligation on their part, then the condition was fulfilled, and the contract is enforceable as to such subscriber. That an oral subscription to stock is a valid contract has been affirmed by this court. Hotel Co. v. Lyon, 69 Iowa, 687.
While the strict definition of the word “subscribe” or “subscription” involves the idea of a written' signature, yet by common usage it is often employed to include an agreement, written or oral, to give or pay some amount to a designated purpose, more usually, perhaps, to some purpose for the promotion of which numerous persons are uniting their means and their efforts. An actual taking
Even if under ordinary circumstances a subscription to stock must be in muting to be of any validity, tbe circumstances of this case would in our judgment except it from tbe operation of that rule. It will be remembered that .at the' time of making tbe oral agreement, and upon strength thereof, the bank made tbe loan which constitutes the bulk of tbe corporate indebtedness, and tbe corporation incurred tbe obligation of its repayment, whereby tbe said Hobn, TIill and Busch became effectually estopped from denying their personal liability to tbe amount of such subscription. This liability they have consistently recognized, and have paid to tbe assignee tbe sum for which they thus became chargeable. Tbe sufficiency of tbe subscription can not be successfully challenged.
An attempt is made in argument to show that one of tbe thirty-six names subscribed to tbe original written
The several propositions we have considered include all the really debatable propositions raised by the appeal. We have examined the record with reference thereto, and find nothing calling for a reversal of the decree below. It is therefore affirmed.