The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1860-09-20

y
ceed, because this act of the directo
S was their act, and binding upon ther
e If BINDING it was lawful. If LAwFl
: it was binding. If this doctrine
# maintainable in law, then any act
l. the directors is binding upon ever
+ stakeholder; no matter that he had n
: knowledge that the act was perforr
+ ed until his money was all paid out fl
|. purposes wholly fol- eignto the purposo
e for which he paid it in. The stool
Y holder is amazed, and declares that IL
directors had no power to contract an
pay away out his money for any pu
pose except those for which he paid
to them. The directors reply, you or
mistaken; we have power to bind yo
by any contract we choose to make
although by it you are defrauded @
your money.
Let the matter be considered a it'll
more at length. AS the Court seem.
to know that the cash capital of tn
State was inadequate to the construc
ton of its railroads, it is clear that i
is familiar with the eutire details o
these stock mortgage transactions. A
the court did not state all the facts
enough will be given so that the whole
matter may be seen at a glance.
The directors, acting in behalf Of the
company, agreed with the mortgagors
that the Corporation would issue to
to them in full paid stock to the am
cunt Of which the mortgages were
securities, and that it would annually
pay the interest as it fell due on the
mortgages, so that the mortgagors
should never be required to pay any
intesest: but only liable to pay the prin-
cipal sum at the end ola term of years
usually ten. In consideration of this
stock, and agreement to pay interest,
cad to keep harmless this class of stock
holders faom the payment of any in
terest, the mortgages are given. with
an agreement executed by the mort
gaeors that they will (say) in ten years
pay the principal sum mentioned, and
interest thereon annually at the rate of
eight per cent per annum. The con
slderation on each side is entire. That
is, all that is done or to be done, on
one side. is the consideration for all
that is d1ne, or to be done, on the 9th
en- TIE law will NOT require perfor>
nance on the one side, unless it is also
demand performance on the other. The
law will NOT demand performance OF
an agreement when the contracting
party has not power to make that
agreemen The directors agree to
m la tia morton c,os apd oooou,DonUiuo,
agreement, in absolute payment for the
stock. If the mortgaged property is
not worth more than one-tourth the
the nominal amount of stock given, the
stock is paid in full, and certificates to
thai effect are out. This stock must
remain tull paid, Notwithstanding the
mortgagor is not worth dollar III the
world, aside from the property mort
gagged. Here is an instance where the
directors dispose of the stock for less
than par, by its three-fourths.
On this point, Redfield-on railways
page 9O-says that sit is well settled
that railway, or other joint stock
company CAN NOT RECEIVE subscrip-
lions to their stock, payable at less
sums, or in other CoAIDoDITIEs, than
that which is demanded of other sub
scrIbers."
$50, to, in a case where subscrip>
tons to stock Of such a company are,
by the agents Of the company, agreed
to be received at discount, below the
par value of the shares, it will be res
garded as tr0ud upon the other share
holders, and not BINDING on the com
pany." This doctrine is exploded III
the opinion we are considering. Ac.
cording to the doctrines there laid
down, one set Of subscribers might be
required to pay their shares in money
vt par; another could have them at ten
cents on the dollar; another would have
as many shares Zone hundred dollars
each) as they would calves or sheep,
worth five dollars q head, the directors
having power to say that they We're
worth one hundred dollars apiece; an
other could have as many shares as
they could convey acres OF school,
swamp, or other lands, the directors
having the power to say that these lands
were worth one hundred dollars per
acre, although everybody else knows
as matter Of fact, that the lands are
not worth, and that they will not sell
for more than two dollars per acre. So,
this partainity and discrimination may
be indefinitely multiplied. In taking
calves, sheep, and lands IN the pay
ment for stock, value thereofiS placed
by the directors; but no more SO than
in taking a mortgage of lands III pay
ment. They have just as good right
to consider the lands worth one thous
and dollars per acre as five dollars, it'll
being question Of power to determine
value at all.
Does any one except the judge sup
pose that the legislature Intended some
shareholders should pay in money,
some in part money, and some in dogs,
cats, and other animals? some III lands,
some in grain, or merchandise some att
one hundred cents on the dollar, some
at two, five, ten, twenty cents on
the dollar? Did the legislature intend
that the directors should have the pow
er of taking the hazard whether the
Company should ultimately realize, or
lose eight tenths of the par value OF
the shares disposed Of as full paid?
Suppose that one half Of the capital
stock was taken and paid for in cash,
and thesother paid for in mortgages.
one half cash 34,0O0,O0O
Mortgages, 100000
Total capital, 100000
Annual interest which the direc-
I'm, hc.rn nnrnnd the GnmnAnV