Court Opinion

ID: 3917744
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:45:17.659308+00
Date Added: 2024-06-11T14:16:13.916381
License: Public Domain

The verdict of the jury establishes the following conclusions of fact:
In 1892 the appellee was incorporated as a private corporation. It was engaged at Decatur, Texas, from that date to the filing of this suit, on June 12, 1895, in the business of manufacturing oil, feed stuffs, etc., out of cotton seed. Its capital stock consisted of $50,000, divided into 500 shares of the par value each of $100. On and before June 18, 1894, its stock was owned and held as follows: D. Waggoner owned 200 shares, the defendant Lillard 50 shares, H.H. Halsell 16 shares, J.F. Halsell 170 shares, H. Greathouse 14 shares, and A.J. Reagan 50 shares. *Page 69 
At that date the corporation had been operated at a loss of $7891.43. It was without funds to pay this amount. Accordingly, on the day last named its stockholders held a meeting, at which all were present or represented, and at which it was agreed by and between them that each should pay the loss in proportion to the stock severally held. In accordance with this agreement the stockholders D. Waggoner and H. Greathouse paid to the plaintiff each his proportional share of the loss, which was appropriated by it. The defendant, however, did not comply with his undertaking; but subsequently he executed a note, with the stockholders other than Waggoner and Greathouse, signing also the name of the plaintiff, including therein his proportional share of the loss. This note was subsequently paid exclusively out of the funds of the plaintiff. The amount representing the proportion of the loss which the defendant undertook to pay was $789.14. From a verdict and judgment for that amount in favor of the appellee as plaintiff, against him as defendant, the appellant appeals.
Opinion. — The petition of the plaintiff alleging the foregoing facts states a cause of action. The corporation was an entity, in which each of the stockholders was interested. It was in a certain sense their representative. The personal profit and advantage of each were involved in the payment of the debt of the plaintiff. The agreement of each stockholder looked as a source of benefit to the compliance with a similar agreement upon the part of each of the remaining stockholders. Such an agreement rests upon a sufficient consideration, especially after a compliance with it on the part of some of the stockholders, as was the case with Waggoner and Greathouse. The relief sought by the plaintiff does not rest, as the appellant misapprehends, upon the doctrine of contribution, which arises purely out of the relations of the parties, but it rests upon a contract supported by a valid consideration. Hopkins v. Upshur, 20 Tex. 89; Conrad v. LaRue, 52 Mich. 86; Lathrop v. Napp, 27 Wis. 222.
As the agreement of the stockholders was made for the use and benefit of the corporation, and incidentally for the benefit of themselves, and as it rests upon a sufficient consideration, it is enforceable in the name of a corporation and by it as a plaintiff. McCown v. Schrimpf, 21 Tex. 27; Whitsett v. Pre-emption Church, 110 Ill. 125; Linneman v. Moross, 39 Am. St. Rep., 531, note.
The verdict is supported by the evidence, and the judgment is affirmed.
Affirmed. *Page 70