Court Opinion

ID: 9417547
Source: CourtListenerOpinion
Date Created: 2023-08-02 20:24:21.757852+00
Date Added: 2024-06-11T17:21:45.712036
License: Public Domain

Mr. Chief Justice Fuller, with whom concurred Mr. Justice Lamar,
dissenting.
*438I dissent from the conclusion of the court in respect of the stock received by the subscribers to the bonds. That stock was not paid for in money or money’s worth, or issued in payment of debts due from the company, or purchased at sale upon the market. It was a mere bonus, thrown in with the bonds as furnishing the inducement to the bond subscription, of larger control over the corporation, and of possible gain without expenditure. Becoming secured creditors through the bonds, the subscribers increased their power through the stock. In my view, there was no actual payment for the stock, and to treat it as paid up, is to sanction an arrangement to relieve those who would reap the benefit derived from the possession of the stock, in the event of the success, from liability for the consequences, in the event of the failure, of the enterprise.
When the capital stock of a corporation has become impaired, or the business in which it has engaged has proven so unremunerative as to call for a change, creditors at large may well demand that experiments at rehabilitation should not be conducted at their risk.
My brother Lamar concurs with me in this dissent.