Court Opinion

ID: 8656213
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:16:12.020226+00
Date Added: 2024-06-11T16:56:43.858167
License: Public Domain

McCARTY, J.
3 The articles of incorporation were signed January 20, 1909, were filed with the County Clerk of'Weber County June 12th, and with the Secretary of State June 15, 1909. The corporation, therefore did not come into existence until the last-mentioned-date. Comp. Laws of 1907, Section 319; Machen’s Law of Corporations, Section 137. The undisputed evidence shows that before the corporation was perfected the promoters (defendants herein) made payments *52on their subscriptions to the capital stock aggregating $11,100 as follows: Preston A. Blair, $2,000; Stephen S. Blair, $800; Seth 'M. Blair, $800; J. P. Blair, $2,500; Simon Spencer, $2,500; Lars Hansen, $2,500. From the time the articles were signed (January 20, 1909) until the corporation came into existence (June 15, 1909) the above-mentioned defendants did business in the name of Blair-Hansen Live Stock Company — the name designated in the articles of incorporation. During this period of time the company was liable as a partnership, but not as a corporation, for the business transacted by it and in its name. 10 Cyc. 676; Cook on Corp. Sections 233, 424. Fraud is not charged in the complaint and hence is not an issue in the case. Plaintiff bases its right to recover solely on the ground that the subscriptions for the capital stock have not been paid in full. The record shows that the transaction out of which plaintiff’s claim arose took place long after the corporation came into existence. The business, therefore, transacted by the company before the .corporation was created can have no possible legal bearing on the case. The only questions presented by this appeal are: (1) Have the subscribers to stock (defendants herein) paid in full for the stock subscribed for by them? and (2) did the cash and the cash value of the property transferred by the company to the corporation at the time the corporation came into existence equal the aggregate of the payments theretofore made on the stock subscribed? The evidence, without conflict, shows that the assets of the company to which the corporation succeeded when it came into existence consisted, among other things, of the following property: 2,665 sheep, of the value of $9,327.50; cash in bank, $811.69; two horses, of the value of one hundred dollars; team and camp outfit, $375; one dog, ten dollars; and $775 advanced on the purchase of sheep that were later delivered to the corporation — aggregating $11.399.19, or $299.19 more than had been paid on stock subscriptions. The corporation not only succeeded to the different items of property mentioned, equal in value to the cash paid on stock subscriptions, but it got the benefit of $299.19 earnings — profit—of the company while it was a partnership concern. Therefore plaintiff and other parties *53wbo subsequently did business with, the company as a corporation were benefited rather than injured or prejudiced by the corporation accepting the assets of the partnership in lieu of the cash paid on stock subscriptions. Therefore plaintiff and the parties who subsequently did business with the company could not possibly have been prejudiced because the corporation accepted property in lieu of the cash paid on the stock subscriptions. The corporation not only succeeded to property equal in value to the cash paid in the stock subscriptions, but, as stated, got the benefit of $299.19 earnings —profit—of the company while doing business as a partnership. The books of the company were introduced in evidence by plaintiff, and they show that the balance due on the subscriptions for capital stock at the time the corporation was created (June 15, 1909) was later paid in full. S. S. Jensen, the secretary of the company — one of the defendants herein — • testified at considerable length and 'explained in detail when and under what circumstances the payments were made. I have examined the record with much care and fail to find any evidence in conflict with his testimony upon that point. I am also of the opinion that the finding made by the court “that the said defendants and each of them have paid in full their respective subscriptions to said capital stock, ’ ’ etc., is sufficient and is amply supported by evidence.
For the reasons stated I am of the opinion that the judgment of the trial court should be affirmed, with costs to the respondents.