Court Opinion

ID: 6272103
Source: CourtListenerOpinion
Date Created: 2022-02-18 15:48:45.718891+00
Date Added: 2024-06-11T08:59:56.434562
License: Public Domain

Opinion by
Smith, J.,
In this action, brought on a contract of subscription to stock, a judgment was entered for the plaintiff for want of a sufficient affidavit of defense. The subscription of the defendant was in writing, under his hand and seal, and in law is an ordinary contract : Railroad v. Graham, 36 Pa. 77. And with reference to other subscribers, it is a trilateral contract: Railroad v. Conway, 177 Pa. 364. In terms, it is an unqualified agreement to purchase eighty shares of stock, fifty per centum of the price to be paid down, and the balance as called for by the corporation. It contains no other condition or limitation. More than one year after its execution, the defendant paid an additional ten per centum of his subscription, upon call by the directors ; but a few months thereafter, when duly called upon for another instalment of ten per cent, he refused to pay on the ground, substantially, that certain alleged parol promises, set out in the affidavit of defense, and upon the faith of which he now says he subscribed, have not been fulfilled. It is not alleged that the parol agreement, now set up in defense, was omitted from the writing by fraud, accident, or mistake; nor is it averred that any part of the written contract itself has been violated by the plaintiff. The affidavit alleges that the subscription of the defendant was obtained by reason of false and fraudulent representations, but does not specify wherein the alleged parol statements were false or fraudulent. The most that can be said of the affidavit is that it recites alleged, unfulfilled promises, and unrealized expectations. Nothing definite is given, showing or *587alleging the existence of fraud when the contract was' made, and upon the strength of which the subscription was procured. No specific loss is stated upon which even a defense of set-off could be based. The defendant has evidently lost faith in the enterprise, and therefore seeks to avoid further liability. The main features of the affidavit allege unperformed promises, and misappropriation and waste of the company’s assets. But these allegations are not sufficient to bar judgment: Iron & Steel Co. v. Selliez, 175 Pa. 18. If, as the defendant seems to believe, the affairs of the corporation have been mismanaged, and it has become insolvent, the law affords a remedy for those ills. But they cannot be cured or lessened by withholding from the company a legitimate part of its assets, the use of which might enable the officers tq successfully carry on its corporate business.
Conceding the truth of the affidavit, and giving full force to all proper inferences therefrom, enough has not been shown to entitle the defendant to go to a jury.
Judgment affirmed.