Court Opinion

ID: 4935491
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:14:33.808072+00
Date Added: 2024-06-11T08:14:39.787786
License: Public Domain

Haskell, J.
Creditor’s bill against the shareholder of a corporation for unpaid stock.
The books of the corporation show the par value of the shares to be $5 and that defendant paid "on acct. stock” June 8, 1887, $500, August 25, $200 and September 28, $300, in all $1000. The certificates had not been issued. On October 16th following, Burrill directed the treasurer to issue the stock standing "to my credit on your books, not issued,” to B. T. Sowle. In'pursuance of that order, November 10, 1888, Burrill receipts for 400 shares in the form, "C. C. Burrill byE. F. Brewer,” and on the same day Sowle in the same form, "B. T. Sowle by E. F. Brewer,” receipted for the transfer of the same. So it appears that 400 shares were owned by Burrill at the time the credits were entered upon the books of the corporation for money paid "on acct. stock.” The first credit was June 8, 1887, and of course on that day Burrill had taken the 400 shares. The evidence in the case shows a prior understanding that he should take that number <of shares, although no written subscription is produced.
On May 27,1387, it was voted by the directors, the defendant, president of the corporation and one of the incorporators, being-present, "to allow each incorporator to purchase an amount of stock not to-exceed $2000 at ($2.50) two and one half dollars per share.'” .Again, on June 9, "voted to instruct Clark to notify thefineorporatory who have not already signed for preferred .stock 4o do-so on or before June 13.” The first payment of Burrill ¡for his stock was on June 8th. He therefore must have signed ¡for his stock prior to that date, for he hardly would have paid $500 "on acct. stock” that he had not agreed to take. He paid for'the 400 shares at the price fixed by the directors, although *71some of the incorporators evidently had not, for it was voted on October 5th "that the incorporators pay the balance due on the incorporatory stock on or before January 1, 1888.” BurrilPs ownership of the stock was none the less real because the usual evidence of ownership — certificates of shares — had not been issued. He, therefore, became liable to pay the balance of their par value, viz. $1000.
The plaintiff’s debt arose from a covenant by the corporation made June 14, 1887, to save the plaintiff harmless from the payment of a mortgage before that time given to another on a parcel of land that day conveyed by her to the corporation. That mortgage debt fell due December 3, 1887. Whether the plaintiff’s debt was "contracted” by the corporation June 14th or December 3d, 1887, is immaterial, for the defendant’s ownership of stock began before the first date and continued until after the last. He transferred his stock November 10, 1888; suit was brought against the corporation April 15, 1889, within one year.thereafter. The defendant, Burrill, is liable, therefore, to the plaintiff for $1000 due on unpaid stock with interest from the bringing of this bill, as there is no proof of any sums due him from the corporation, that may properly be credited to him as payment for the stock, above the cash items already mentioned.
One of the plaintiffs died since the bringing of this bill, and the same has abated as to him. The survivor, being the only party really interested in the judgment sought to be enforced, may properly prosecute this bill to enforce the same.
The bill was originally filed against the defendant Burrill and Alley Bros., Nash and one Holmes. Each of the four defendants severally answered the bill, and plaintiff moved below to discontinue against the last three, which motion was opposed by Burrill and not there decided, but reported for consideration here. The bill must be sustained against Burrill with costs, but dismissed as to the other defendants with costs for each one to the time of motion to discontinue as to them.

Decree accordingly.