The daily intelligencer. [volume] (Seattle, Wash. Territory [i.e. Wash.]) 1876-1881, 1881-07-03

been paid for or not.
ist. Il needs no argument or citation
Of authorities to show that stock can
be paid for in money.
I'd. In the sense indicated by this
within certain limitations
10 be hereafter stated. it is we'll settled
that stock may be paid for in moneys
WORTH Thompson sec. 126 ct seq.
III an engine. or other machine. or
tools, are needed in carrying on the
business of the company. l have no
doubt but what they could be received
in payment Of stock. II would be re-
ceiving moneys worth. for sucn things
have q cash value; bat l sm of the
opinion that the true rule requires that
the property 30 taken in payment for
stock should have O strict relation to
the business OF the company. 4 COM
pany formed for the purchase of wool
and the manufacture Of wooden fabrics
could not take pay for its stock in tim
Der lands, cattle. or other things hav-
ing nothing to do with its business.
But il is not necessary for me to cite
or state reasons TO show
what are the limitations of the true
rule. because it is conceded that the
property taken in payment in this case
was clearly within the object of the
3rd. Our statute provides that stock
may be paid for. if the company is
mining corporation. BY the conveyance
10 the company Of the shares, feet or
interest of the grantor in the mine or
mining lands according to rule of
valuation to be fixed by the company.
This statutory provision is reasonable
and beneficial one. II can injure no
one. Rightly construed it cannot be
made q cover for fraud. The only
question is, whether the articles of in
corporation should not distinctly show
the object of the company, that it was
formed for the working of mine in
this Territory. and that its capital stock
consisted of the aggregate valuation of
the mines.
As have already said his Honor has
decided this can be shown by parol
evidence and that the general words of
the articles are sufficient for this par
pose.
Sub. 3. sec 4. page 800. Laws of 1873
empowers corporation 'to purchase,
hold. mortgage, sell, and convey real
aud personal property Conceding
that this power is limited by the OBJ
ject Of the corporation as stated in the
articles. no objection can be raised
here. for the purchase was clearly in
furtherance Of the declared object. II
the corporation can purchase i see no
reason why they may not pay in stock.
Especially is this true If there are no
creditors at the time.
Carr vs. LeFevre, 81 Penn st. Alb is
an authority for the payment for stock
in coal lands.
1t is true that the Pennsylvania COR
poration was formed under q special
act; but the grsnted powers in this re-
gard were in substantially the same
words as those quoted above from our
general act. No reason is known the
power to purchase and hold with no
express limitation should not have the
same scope in general as in q special
act.
Foreman vs. Bigelow Reporter 1877
was an action by an assigne in bank
ruptcy against the stockholders of a
coal company who were innocent pur-
chasers without notice Of the facts, Of
stock in open market. the stock having
been issued in the first instance to five
persons, none OF whom were defendants
in payment fer coal lands at a frandu.
lent over valuation. The court held
that as the defendants were not par.
Elephants in the fraud the plaintiff could
not recover. This case cited by defend.
ants, is not in my judgment, strongly
in point
Phelan We Hazard, s. Dillon 46, is O
streng case for defendants. The stock.
holder sought to be held was q pur
chaser from the origin holders. The
stock had been paid for in mining lands
The corporation was formed for lead
mining. The plaintiff became a credit
or subsequent to the purchase by the
defendant. The court held, that should
be treated as payment which the par.
ties agreed should be payment. even al
against creditors. page SO.
Steacy VS. Little Rock & G r Z Co
8. Dillon S4S is to the same purport a.
Phelan VS. Hazard supra. The actor
was by q creditor of the company
against the purchaser Of stock from on,
who had paid ios it. or rather haC
agreed to psy for IL in the construction
of the road, ana il was held that th,
purchaser took it discharged from al
equities existing between the company
and the original holder. although 81
examination of the books of the com.
psny would have shown such equities
In oil OF these cases the stock on it
face was fully paid up stock.
General Rule. Thompson, sec. l34
contra 8; G L Journal. l42; Uptol
W Hbilcock, /, Otto. As; Sanger v
Upton. /. Otto. Sc, Webster VS. Upton
l, Otto. 65. are ell to the same point
They decide that an understanding o
agreement made with the company, O
its agents. that part payment shall b
accepted by the company a. full pay
ment for shares subscribed for or &C
cspted is void 40 against subsequen
creditors. Second. they decide that th
term non -assessable written or printe,
on the stock certificate does not reless
the holder Of the stock from its full
payment. Third. they decide that th
capital stock OF . money corporation
fund for the payment Of its debts.
J IL trust fund Of which the Director
are the Trustees. Il isA trust to b
managed for the benefit Of the share
holders durinv fts life and for tba han