The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1881-04-07
Important SUIT Decided.
LrzABEru IRON coMrANY's CREDITORS VS..

ELIZABETH IRON CoMPANY's CREDITORS VS..
ELIZABETH IRON COMPANY &C.
This case, which has been depending in the
Circuit Court of Augusta for several years
past, was disposed of by Judge Mclaughlin
on Monday last
The corporation known as the Elizabeth
Iron Company was organized in 1874 for the
purpose of acquiring and working that very
valuable property in this county, on the G. &
0. railroad, about Is miles west of Staunton,
known as the Elizabeth Iron Property. This
property was valued at 100000, which was
fixed as the minimum capital of the corpora
ton.
Henry Forrer the owner of one moiety of
the property, subscribed for 1000 shares of
stock to be paid for by conveyance Of his
moiety; and some of the heirs of Daniel Forrer,
who owned the other moety, took stock and
paid for the same by transfers of their inter-
ests in the property.
A large majority in number of the stock
holders, however, made their subscriptions to
be paid for in money; and whilst the caption
of the stock list to which they signed their
names was absolute and unconditional, these
money subscribers nevertheless insisted that
their subscriptions were made upon condition
that the title to the property conveyed and TO
be conveyed to the corporation by the land
subscribers in payment of their subscriptions,
should be freed from encumbrances and other
wise made clear before the money subscribers
should be required to pay for their shares. 1t
is claimed that this condition never was COM
piled with. On the other hand it appeared
that the money subscribers generally attended
the stockholders meetings, and they were well
on the board of directors.
After the company had been in operation
for about fifteen months and had been heavily
involved in debt, the corporation, at the in
stance of the money subscribers, undertook to
release them from their subscriptions and dis
charge them from all obligation to pay for
their stock. Under these circumstances cred
itors ofthe company brought suit against the
stockholders to require them to pay for their
stock in order to provide fund for the pay
ment of debts.
DuTlng Cne aCtlVe operations OI Tie company
1t had created a mortgage on its real estate,
and some ofthe mortgage bonds had been n.y.
pothecated with the First National Bank of
a large creditor of the company,
to secure the company's Indebtedness to it.
Thus the were four parties to the contro-
versy, viz /. The general creditors of the
represe1ted by Messrr. Elder s. Mel
son, who brought the suit g. The First Ma
tional Bank of Harrisonburg, claiming to be
secured creditor, represented BY Gen'l ]. E. |
Roller of Harrisonburg; 8. The land sub
scribers represented by Capt. T. D. Ransom, |
and 4, the money subscribers represented by
Messrs Sheffey and Bumgardner
The court held that the money subscribers |
are bound to pay up their subscriptions in full |
to satisfy creditors; that the First National |
Bank OF Harrisonburg was entitled to the Sc
curity which it claimed and that it was compe-
tent for the land subscribers to discharge their
subscriptions by the conveyances ofland which
they made; and that no fraud had been prac-
ticed on the married ladies who united in these
as had been charged by them.
The case involved large amounts of money
and very interesting and important questions
of law