Rockingham,

June, 1895.

#### Lincott *v.*Northwood Union Shoe Co. Peavey *v.*Same. Giles *v.*Same. Marston *v.*Same. Holmes *v.*Same.

■Assumpsit for money paid to a corporation in part performance of an agreement to purchase shares of stock, for which the corporation declines to-receive full payment, cannot be maintained without a demand for the stock, and a refusal to deliver it.

Assumpsit. Facts found by the court. In the spring of 1891,. each of the plaintiffs subscribed for one or more shares of stock in a proposed corporation, by an agreement of which the following is a copy : “ We the undersigned subscribe to the capital stock of the Northwood Union Shoe Company the amount set', against our respective names. No subscriber to be held for all or any part of his subscription until the whole amount of the capital stock is subscribed, $25,000. Payment to he made ten per cent per month of our wages, until the whole amount of" each individual subscription is paid.” Soon after, the whole amount of the capital stock having been subscribed, the corporation was formed. By authority of the hoard of directors, the-Whole stock (500 shares of the par value of $50 each) was issued to the directors as trustees, to hold as security for $25,000 which they loaned to the corporation, upon the understanding that they would transfer the stock to the subscribers when the latter paid the amount of their subscriptions. As soon as the factory was-started the plaintiffs entered into the defendants’ employ, and1 ten per cent of their wages was paid to the directors, who held the stock on account of the plaintiffs’ stock-subscriptions. They continued to work under this arrangement until November, 1894, when the company became insolvent and was unable to-furnish work for them. They desired.to perform their contracts, but were prevented from so doing by this circumstance. These suits are brought to recover the money retained by the-company on account of the shares of stock subscribed for. None of the plaintiffs has demanded of the company the shares-of stock for which he subscribed. During the pendency of the-suits certificates of stock to which the plaintiffs would have been entitled if they had been allowed to pay for them in full,. *261have been deposited with the clerk of court, subject to their order.

*Belker $ Pearl,*for Lincott and Peavey.

*Burnham, Brown Warren, John*TP. *Kelley,*and *John 8. H, .Brink,*for the other plaintiffs.

*Louis G. Hoyt,*for the defendants.

*Per Curiam.*
      ***

Whatever might be the legal rights of the parties if the plaintiffs had made a demand for certificates of the stock for which they subscribed, and the defendants had refused to comply therewith, these actions cannot be maintained in the absence „of a demand. *Swazey*v. *Company,*48 N. H. 200. If the certificates are delivered on demand before full payment is made, the plaintiffs cannot complain. It would be neither equitable nor legal that they should recover judgments payable in cash, for their labor, for which they are entitled to payment in stock only, if they can have the stock without making further payments. The company’s refusal or inability to employ the plaintiffs, or to accept payment in full for the stock, is unimportant, provided the stock is delivered to them upon demand. A vendor’s refusal to accept full payment for the article sold, accompanied with its delivery to the vendee, does not authorize the latter to rescind the contract and recover back the partial payments he may have made.

It is claimed that the statutory prohibition of a sale or disposal of shares of stock by the company at a price below par (P. S., *c.*149, *s.*9) makes it impossible for it to comply with a demand. But the company is not in any proper sense the owner of its stock. The entire capital was furnished in cash by the persons composing the board of directors, to whom the money paid by the plaintiffs equitably belongs. They had a right to hold the plaintiffs’ certificates until they were fully paid for. This right they have surrendered by filing with the clerk the certificates, which he holds subject to the plaintiffs’ order. The -directors have no claim against the company for the balances due and unpaid by the plaintiffs, and the surrender of their right to hold the stock is not a sale or disposal of stock by the ■company.

*Judgment for the defendants.*

Wallace, J., did not sit: the others concurred.

See footnote on page 22.