Case Name: SEACOAST PACKING CO. v. SCHEIN
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1921-08-01
Citations: 117 S.C. 90
Docket Number: 10705
Parties: SEACOAST PACKING CO. v. SCHEIN
Judges: Mr. ChiEE Justice Gary and Mr. Justice Watts concur.
Reporter: South Carolina Reports
Volume: 117
Pages: 90–94

Head Matter:
10705
SEACOAST PACKING CO. v. SCHEIN
(108 S. E. 289)
1. Pleading—Defense That Stock Subscription Made on Faith of Representations Full Amount of Stock Subscribed Properly Stricken Where Based on Mere Rumor—In an action for the unpaid balance of a stock subscription, there was no error in striking out a defense that such subscription was made on the faith of the representation that the full amount of the capital stock had been subscribed for by bona fide subscribers, where such defense was based on mere rumor, and not connected with plaintiff or its duly authorized agents.
2. Pleading—Defense That Stock Subscription Became Binding-Only after Full Amount of Capital Stock Subscribed Erroneously Stricken.—In an action for the balance of a stock subscription, a defense that such subscription, by its terms, became binding only after the full amount of the capital stock had been subscribed was not subject to being stricken out as sham; it setting up a violation of the terms of the subscription.
3. Pleading—Defense Subscription Made on Agent’s Assurance Person Objectionable to Subscriber Would Not be Made Director Erroneously Stricken.—In an action for the Balance of a stock subscription, a defense that such subscription was made on the assurance of the corporation’s agent that a certain person objectionable to defendant would not be made a director cannot be stricken out as sham, being based on a violation of the conditions of the subscription.
Before DeVorE, J., Beaufort, March., 1921.
Modified.
Action by Seacoast Packing Co. against D. Schein. From order striking out certain defenses in the answer, the defendant appeals.
Messrs. Moffatt & Marion and C. M. Aman, for appellant,
cite: Defense that subscription not payable until all stock is subscribed is a good one :■ 72 Atl. 399 (Md.); 16 Ann. Cas. 1247; 52 Atl. 975 (Md.) ; 93 Am. St. Rep. 339; 7 R. C. R. Sec. 20.3; 6 S. W. 134 (Tex.); 15 S. W. 674 (Tex.). Misstatement as to personnel of officers a good defense: 131 N. C. 178; 42 S. E. 576; 34 Beav. 630; 8 Ry. & Corp. E. J. 197; 62 R. T. N. S. 30; 23 Ch. Div. 413,49 R. T. N. S. 348; 33 R. R. A. 733.
Mr. W. J. Thomas, for respondent,
cites: Not necessary for whole stock to be subscribed: 1 Civ. Code 1912. Secs. 2837, 2838; 16 Ann. Cas. 1255. Mismanagement no defense : 48 S. C. 278. Subscriber liable even though he had mistaken idea that he could forfeit stock at pleasure: 10 Rich. R. 282. Stockholder cannot set off claim against the corporatioon: 57 S. C. 52; 55 S. C. 78; 43 S. C. 80.
August 1, 1921.

Opinion:
The opinion of the Court was delivered by
Mr. Justice Fraser.
This is a case similar to the case of Seacoast Packing Co., v. Long, filed herewith, 108 S. E. 159.
The complaint alleges that the defendant subscribed in writing for 10 shares of the capital stock of the plaintiff corporation, and had failed to comply with the terms of his contract. Ah order was made on motion of the plaintiff striking out the second, third, and fourth defenses. From this order the defendant appealed.
1. There was no error in striking out the second defense. This defense was¡ based on mere rumor, not connected in any way with the plaintiff or its duly authorized agents.
II. The third defense sets up a violation of the terms of his subscription, and is not subject to being stricken out as sham.
III. The fourth defense is based upon the violation of the conditions of defendant's subscription and cannot be stricken out as sham.
The judgment appealed from is modified. •
Mr. ChiEE Justice Gary and Mr. Justice Watts concur.