72 Mo. App. 142 | Mo. Ct. App. | 1897
The petition in this case contained two counts. The first averred that the plaintiff sold to defendant, and defendant purchased of the plaintiff eighty shares of its capital stock, at the agreed price of $25 per share. That defendant had paid $100 of the purchase price and received twenty-five shares of. the stock, but had refused to pay the balance. Judgment was asked for the balance of the agreed purchase price for the-eighty shares of stock — $1,900 and interest.
The second count was for remote, consequential, and unliquidated damages, alleged to have been occasioned for want of funds to carry on the business of the corporation, which would not have occurred had the defendant complied with his contract by paying the $2,000.
The answer was a general denial as to both counts. A jury was waived, and the issues submitted to the
G-. Gr. Wear, the president of the Rawhide Manufacturing Company, was the principal witness for the company. His testimony tended to prove that himself, his wife, daughter, and two Whitneys held about all the capital stock of the corporation, consisting of one hundred and fifty shares. That one of the Whitneys had given his note of $1,000 to the corporation in payment or part payment for his shares of stock; that Mrs. Wear, by an arrangement with the board of directors and one" of the Whitneys, substituted her ■ note of $1,000 for Whitney’s, in consideration of the transfer to her of seventy-three shares of stock by Whitney. Wear’s testimony tended to further prove that on the third day of June, 1896, he agreed for the corporation to sell to Hill, the defendant, eighty shares of the capital stock of the corporation for $2,000 and that Hill agreed to purchase that number of shares at that price, and that in about ten or fifteen days thereafter Hill called at the office of the corporation and paid $100 on his purchase, and received twenty-five shares of the capital stock of the corporation, but that he had failed and refused to pay any more money under his agreement, and on August 14 following wrote the following letter:
“St. Louis, August 14th, 1896.
11 St. Louis Rawhide Mfg. Co.
“GIentlemen: — Having entered into a verbal agreement with your company, and the same accepted by your president, Gr. G-. Wear, to purchase 80 shares*146 of the capital stock of your company for the sum of $2,000, upon which contract I paid the sum of $100, and received the first delivery of stock, 25 shares. On account of sickness in my family I desire to withdraw, and hereby release your company on account of said agreement. ■ (Signed) F. W. Hill.”
In the progress of the trial and during the examination of Gr. Q-. Wear, the following took place:
“Counsel for plaintiff: I have a record of the corporation which I wish to show the witness. It is a record of meeting of the board of directors.
“The court: Is that a record of a meeting of your corporate directors? Witness: Yes, sir.
“Q. In whose handwriting is that? A. That, is in my handwriting.
“Q. Read the proceedings of the meeting of the third of June.
“The court: Is there any point in this which was not authorized by the company? Counsel for plaintiff: Yes, sir. (Stock-book shown witness.)
“Counsel for defendant: I object to it for one reason, the minutes are incomplete, the minutes don’t show who were present, it is not the minutes of a meeting, that is made by Gh G-. Wear. It doesn’t show that any of the board of directors were present, or anybody but himself.
“The court: Were those minutes the minutes of that directors’ meeting? A. Yes, sir.
11Q. Who was present at that meeting? A. I was present, my wife and daughter, three directors.
■lQ. How many directors were there? A. There were four directors.
“The court: The minutes may be read.”
Counsel for defendant then and there duly excepted to the ruling of the court. Witness then read the following minutes:
*147 “St. Louis, June 2nd, 1896.
“At a called meeting of the St. Louis Rawhide Mfg. Co., held at 3533 Lindell Avenue this day, a quorum being present. The president submitted to the meeting the condition of the business of the company and the pressing need of more working capital, and submitted a. proposition from Mary Wear to transfer to the treasury of the company eighty shares of the capital stock, to be disposed of and used exclusively as working capital, conditionally that she be released from the payment of her note dated March 13, and payable May 1, 1896, for $1,000. This proposition was accepted and agreed on, the transfer of said eighty shares to the stock of the treasury of the company, said note and indebtedness shall be canceled. A proposition was also submitted from E. W. Hill offering to purchase the eighty shares of stock at $25 per share, to be used as a working capital for the business of the company, which proposition was accepted, and the president was directed to furnish Mr. Hill with a true and correct statement of the condition of the' company. There being no further business before the meeting, an adjournment was moved and carried.”
The assets of a corporation are expressed by its certificates of capital stock. These assets of whatever they may consist are available to meet the demands of creditors. To permit the corporation to buy in its own stock, would permit it to take a corresponding amount of assets and distribute them among the stockholders and thus reduce its capital to the prejudice of creditors. But it seems that where a corporation buys in its stock for the purpose of saving a debt and with a view of reissuing. the same, or under circumstances where the transaction is fair on its face, is not tainted with fraud, and is clearly to the interest of the corporation, the transaction will be upheld, unless prohibited by its charter. 2 Thompson on Corporations, secs. 2062, 2068, and 2069, and eases cited in note 2. Chitland v. Ins. Co., 86 Ill. 220; Eggman v. Blanke, 40 Mo. App. 318 (under laws of Illinois); 1 Morawetz on Private Corporations, secs. 114 and 434.