Court Opinion

ID: 6588231
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:51:26.535021+00
Date Added: 2024-06-11T15:57:34.253836
License: Public Domain

Scott, Justice.
The plaintiff in error as Trustee in Bankruptcy of the estate of the “Copper City Commercial Company,” which *259had theretofore been doing a general mercantile business at Encampment, Carbon County, Wyoming, and had been adjudged to be a bankrupt by the U. S. District Court within and for the District of Wyoming, brought this action against the defendant, Charles D. Terwilliger, to recover the sum of $2,400, an alleged balance due upon a subscription to the capital stock of the plaintiff at the time of its organization. The case was tried to the court without the intervention of a jury ^nd the court found and gave judgment for Terwilliger and. the Trustee brings error.
Plaintiff alleged that the defendant subscribed for twenty-five shares of said stock of the par value of $100 each, and had paid for one share only. The defendant admitted having subscribed conditionally but not absolutely for such stock, in that he was to be permitted to turn in as payment for the stock subscribed for a lot and store building thereon in the town of Encampment to be used as company assets, and that he should not be liable on the subscription unless it was accepted on that condition. It is shown by the evidence that the word “conditional” was written by him after his signature on the subscription list, and it is further shown that at the time of the subscription Fry, who as organizer was circulating the subscription list of the company, gave this written statement of the conditions to Terwilliger, viz.:
“Encampment, Wyo., 6-26-1907.
“This is to certify that C. D. Terwilliger having this day signed the original subscription list of the 'Copper City Commercial Company conditionally for twenty-five shares of stock par value $2,500, it is understood that said company shall take in full payment for said 25 shares of stock lot 4, block 22, Townsite Grand Encampment, in full payment for said subscribed stock, and it is understood that he shall not be liable for said subscription unless the said company accepts same under said conditions.
“Said stock to be fully paid and non-assessable.
“W. B. Fry, Organizer.”
The company entered into possession and occupied the lot and store with this understanding from the organization un*260til March 11, 1908, when at a meeting of the executive committee, it was resolved as follows:
“Special Meeting of the Executive Committee of the Copper City Commercial'Company. March nth, 1908. 5 p. m. W. B. Fry acted as chairman in the absence of J. J. Mona-han. C. D. Terwilliger acted as secretary.
“Moved and seconded that inasmuch as the deed to lot 4, block 22, in the Town of Grand Encampment, Carbon County, Wyoming, has not been delivered to the company in accordance with the original agreement, the President and Secretary of the company be and they are hereby instructed not to issue any stock of this company in payment therefor. Motion carried.
“Bill of C. D. Terwilliger rendered for rent for the store building at $37.50 per month from July 22nd, 1907, to March 22nd, 1908, with credit of $100 for payment of one share of stock originally subscribed for by the said C. D. Terwilliger, balance due, $200.
“Motion made and seconded that the bill be allowed and the manager be and he is hereby directed to pay the same in trade, pursuant to agreement to receive same in trade, and that receipt be given for payment of one share. Motion carried. (Signed) C. D. Terwilliger, Sec.
“(Signed) W. B. Ery, Chairman.”
This action was ratified at the annual stockholders’ meeting early in August, 1908; and after the Executive Committee meeting the company occupied the lót and store building upon a rental basis of $35 per month, up to November, 1908, the time of the bankruptcy proceedings by certain creditors and the appointment of Natwick' as trustee under the National Bankruptcy Law.
As already stated, it is claimed that Terwilliger subscribed for twenty-five -shares of the'capital stock at the par value of $100 per share'when solicited by one Fry, who was promoting the corporation. On July 12, 1907, the subscription list was' presented to the stockholders at a meeting when the following proceedings were had-: “On *261motion, duly made and carried, 25 shares of the capital stock shall be issued to C. D. Terwilliger, upon the delivery of a good and sufficient deed to lot 4, block 22, in the Town of Encampment, Wyoming, as per condition and agreement ' when he signed said subscription list', said deed to be accepted in full payment of said stock subscribed.” The stock subscription list was handed in and returned to the other subscribers at the organization meeting and including Ter-williger’s conditional subscription was satisfactory to the other subscribers and -they proceeded to organize the corporation and embarked in the business for which the corporation was created, entering upon and occupying the lot and store as a place of business under this arrangement until March 11, 1908, when the executive committee declined to issue more than one share of stock to Terwilliger, and that upon a different arrangement, and to place the company’s occupation of the store building on a rental basis at $35 per month from the time of the incorporation of the company and gave him credit for one share of stock at the sum of $100, that being the par value of one share of stock which was then issued to him.
The arrangement made authorizing the defendant in error to pay his subscription in property at a fixed value, and not to be otherwise liable, was satisfactory to the parties, and the corporation went into possession of the lot and store in pursuance of such understanding. It was an executory contract and by performance of conditions precedent could have been made into a binding contract. Neither of the parties did this. (Minneapolis Threshing Machine Co. v. John A. Davis (January 30, 1899), 40 Minn. no, 41 N. W. 1026, 12 Am. St. Rep. 701, 3 L. R. A. 796.) No deed to the property was delivered or demanded, and the stock was not issued; and in that situation the company finally concluded not to accept the subscription on the conditions named. The evidence shows certain reasons for this, and that it arose generally out of the desire of the company not to take the property or to issue the stock to the defendant. *262This refusal to accept was assented to by the defendant, and he took the one share on the terms named by the executive committee, whereupon his subscription, which was a mere offer until accepted, was, in effect, withdrawn. The condition of Terwilliger’s subscription involved a condition precedent to his becoming liable for the stock; and he did not at any time 'become liable to pay for the stock in money, or otherwise than by conveying the property, and that the company declined. As already stated, the contract was ex-ecutory, while the suit is upon an executed contract. No tender of title deed or of stock in exchange therefor is made as a preliminary — the parties stand in the same relation to the subject matter of the contract as at the beginning.
Aside from this the amount of indebtedness and assets on March 11, 190&, is not shown. It cannot be said from the record that the act of that date was (1) one of insolvency, or (2) contemplated insolvency, and (3) within four months of the institution of the suit by creditors under the National Bankrupt Raw. The contract is mutual and executory. No preliminary steps were taken by either party as a condition precedent to enable him or it to maintain the suit. The right to maintain a suit is originally fixed by the parties, and when the conditions change so as to affect such right that fact must be judicially determined so as to determine the method of procedure. In the case here the suit is based upon the contract as originally made. Courts do not, nor can they, make or change or substitute contracts between the parties, and yet plaintiff will have accomplished that if permitted by this court to carry out his purpose as disclosed by his case. The agreement on March 11, 1908, in any event must be sustained unless made by the corporation when insolvent or in contemplation of insolvency or as an act of insolvency under the National Bankrupt Law. The evidence is insufficient to base the right to proceed upon either of these grounds.
If the right to make such new contract depended upon the question whether the corporation was in failing circum*263stances at the time and also whether the contract was made in view of insolvency, the fact of insolvency was not shown. There is no room for the application of the trust fund doctrine in this case. .Nor is it necessary to consider when, by whom, or under what circumstances a subscription for stock may be released. The defendant’s subscription was conditional, and the condition was not complied with by the company. The judgment will be affirmed. Affirmed.
Potter, -C. J., and Beard, J., concur.