The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1898-08-04

will transferred to the company by
NJ G. Harris for "a. $50 shares OF the
stock of the Harris a Mccormick com-
many was not reasonably ana larry
worth $24.750, and the trustees OF saIu
corporation and the defendant knew
the fact, or in the exercise OF o~rdlhaIS
prudent business judgment could nave
not honestly and fairly estimated the
same to be of such value. and the de-
PENDANT became the owner of n porllon
of said shares of stock by transfer iioIh
said NJ. c. Harris, and did not pay lhe
full face alu therefor. then the az
PENDANT is liable for the difference be-
tween the actual amount paid by him
for said stock and the face value there
Of not exceeding the mount OF the
debts Of the corporation.
.In order to make the defendant
liable to the creditors of the corpora
tion. as a stakeholder I'm the corpora
ton, for unpaid stock. il IL not neces-
sary thai the defendant should nave
been guilty of any actual fraud in OBJ
tanning stock held by him or TO nave
taken il with the intention of defrauu-
ing creditors of the corporation. III inc
defendant assented to "A purchase 81
property for stock and the ~overValua-
tion thereof. and Immediately there-
after became "A stakeholder with run
knowledge of the fact that the STOCK
had been paid by property when was
knowingly grossly overvalued, the ele-
ment of fraud attaches, and ne becomes
liable.
"A deliberate and advised overvalua-
ton of property is "A fraud upon the
law. 1t is i'm direct violation or the
policy as well as the terms of the law
which demands payment either IN
money or property at it's value OF an
the capital stock of the company as a
condition of immunity of the ~stockhold-
.rg from liability from the debts OF the
corporation. The payment OF an
amount for property i'm excess OF the
property for it's value, does not depehu
on any fraudulent intent, other than
that which is evidenced by the act or
knowingly issuing stock for property
to an amount in excess OF its Value,
If the generalization is so gross ana
obvious that il could not ! have been
done through mere error of judgment,
the transaction will be held fraudulent
as a matter of law.
I'm order to render stock in a cor
poration paid up, and to exempt the
holder thereof from liability to the
creditors of the corporation, the cor
poration itself must receive the actual
fair value of the stock, and If II has
not received such alu "A person tax
ing said stock with a knowledge of that
fact is liable to the creditors regardless
of the consideration which he might
have paid for the stock.
Higher authority than the statute
also exists, prohibiting a corporation
from issuing stock except for property
actually received. the constitution oi
the state of Montana. section 10. article
Is, provides as follows: No corporn
ton shall issue stock or bonds except
for labor done, services performed or
money and property actually received,
and all fictitious increases Of stock CT
Indebtedness shall be void. The stock
of a corporation shall not be increased
except i'm pursuance of general law, MOI
without the consent of the persons
holding a majority of the stock first
obtained at a meeting held after 30
days notice i'm pursuance of law. I'm
der this provision of our constitution
the stock of a corporation must be paid
for i'm money or moneys worth. 1t may
be paid for in property, but in such
case the property must be the far
equivalent i'm value to the par value If
the stock issued therefor. 1t is the duty
of the stockholders TO see that itlpos-
sesses such value.
When a corporation is sent forth
into the commercial world as possessed
of a canital stock in money or it's
equivalent in property equal TO the par
value of the capital stock, every per-
son dealing with 1t. unless otherwise
advised, has a right to extend credit
10 il on the faith of the fact that is
capital stock has been so paid for, and
that the money or its equivalent IN
property will be forthcoming to re-
spond To their legitimate demands. in
short. IL Is the duty of the stockholders
and not of the creditors to say thar 1t
is paid