Court Opinion

ID: 8195001
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:18:13.835546+00
Date Added: 2024-06-11T16:40:44.354110
License: Public Domain

Rosenberry, J.
The defendant contends (1st) that by reason of the failure of the plaintiff corporation to carry into effect the purposes for which it was organized, he is discharged from liability on his stock subscription; (2d) that *549the plaintiff abandoned the enterprise which it undertook to carry on and thereby relieved the defendant from liability on his stock subscription; (3d) that the sale of the stock of the plaintiff was void because its membership was not entirely composed of farmers as required by sub. (9) (b) of sec. 1772 of the Statutes of 1919, and organization fees should have been paid in accordance with the provisions of. sub. (9) (c) of sec. 1772.
It is argued on behalf of the plaintiff that it did not fail to carry out its corporate purposes; that the lease was not an abandonment of the enterprise, and that it has not violated any law of the state of Wisconsin relating to the organization of the corporation. The acts alleged in support of the first and second propositions made by the defendant are in the nature of acts ultra vires and constitute no defense to an action to enforce the subscription to the capital stock of the company. The defendant was a stockholder of the plaintiff company, and if there was in fact any attempt on the part of the directors (á question which we do not determine in this action) to do some corporate act or acts which were beyond the power of the corporation to do (a question which we do not determine in this action), it constitutes no defense. The stockholders’ remedy is to have the performance of such acts enjoined, or, if already performed, to set them aside. 1 Cook, Corp. (8th ed.) p. 595, § 187, and cases there cited. There has been no amendment to the articles of incorporation and in that sense no change in its purposes.
Nor can the defendant avail himself, in an action brought to enforce his liability on a stock subscription, of any failure on the part of the plaintiff corporation to pay the necessary organization fees. That is a matter between the state and the corporation which in no way concerns the defendant or affects his liability. The amounts due to the corporate treasury from subscribers of stock constitute the sole assets of a new corporation, and courts do not look with favor upon *550technical and unsubstantial defenses to subscription contracts. None of the matters set up by the defendant in any manner affect the contractual relations of the parties. Each of the defendant’s claims relates to matters entirely outside of and having no connection therewith. Where there has been a change in the corporate organization by amendment so that the corporation suing is not in reality the corporation for the stock of which the subscription was made, an entirely different situation is presented. Nothing of that kind appears in this case.
By the Court. — Judgment affirmed.