Court Opinion

ID: 5208542
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:07:36.814194+00
Date Added: 2024-06-11T08:27:19.956250
License: Public Domain

Ingraham, J. (concurring):
The complaint alleges that plaintiff was a corporation organized under the laws of the State of - New Jersey with a preferred stock of the par value of $50,000 and common stock of the par value of $450,000; that on the 25th of May, 1901, the preferred stock was increased so that its par value was $100,000, and'the common stock was reduced so that its par value was $200,000, and that on or about' . the 4th of June, 1901, “ the defendants duly subscribed for and agreed with plaintiff to take one thousand (1,000) shares of the plaintiff’s preferred capital stock, and then and there agreed to pay to this plaintiff the sum of one hundred (100) dollars per share for said stock or the sum of one hundred thousand dollars.” There is no allegation of a sale of the stock by plaintiff to defendants, and the complaint would seem to be based on a subscription for capital which had not been issued rather than a sale of stock by a corporation which had in some way acquired a portion of its stock. From the evidence it appeared that all of the. common stock except one share, viz., common stock of the par value of $449,000, was issued to one Edward Goodall for certain patents which he assigned to the company and under which it was to transact its business. There is no evidence that I can find that, at the time -of the agreement alleged *307in the complaint, the plaintiff had authority to issue any stock except the original preferred stock of the par value of $50,000. On this evidence it would appear, therefore, that defendants’ subscription would only be binding on either party for the stock that the company had power to issue, which was 500 shares of preferred stock, and the defendants have paid a sum in excess of the amount due for that stock, $50,000 having been paid by defendants to the plaintiff on August 14, 1901.
The evidence that the common stock that had been issued had been returned to the plaintiff who had retained some of the common stock as what was called treasury stock, does not show that the plaintiff had, on June 4, 1901, power to issue more than 500 shares of preferred stock. But, assuming that there was evidence that the plaintiff had authority to issue 1,000 shares of preferred stock, I concur with Mr. Justice Laughlin that the finding that there even was an unqualified subscription of the whole of the 1,000 shares of the preferred stock by the defendants is against the weight of the evidence, and I, therefore, concur in the - reversal of the judgment.
Judgment and order reversed and new trial ordered, costs to appellants to abide event.